Fix These Bottlenecks to Scale Past $1M | Ep 861

And I think that was—

I tell you a secret.

Yeah.

Very small business owners will never build a stable business because they are not stable. Mm. So it's nothing to do with you.

Okay.

Hello. How are you, sir?

My name is Kyler. I sell landscape lighting and exterior lighting basically to homeowners north of half a million dollars for the home.

Well done, really good.

I'm at $310 revenue, $310K, $142 EBITDA. And what's stopping me is I literally make all of that money from that lighting division, temporary lighting. So holiday lighting. So now I know I need to add on landscape lighting, permanent lighting to be sustainable all year round.

Okay.

I haven't started advertising for landscape lighting except for the warm outreach that I've done to my temporary lighting customers. So So now I need to start working on a proven acquisition channel for new customers.

Mm-hmm.

And that's what's stopping me.

Okay. And it's usually like Christmas lighting type stuff?

Yeah.

Okay. When you, when you spin that up every year, do you just hire a bunch of temps and then you guys put 'em all up and then you fire everybody kind of thing?

Unfortunately, yeah. But we, we also have a washing side. I talked to Ed about that. We, we might kill that.

Okay.

So I didn't really want to get into the weeds with that.

Okay, good.

But I keep a couple on that do washing with me. Washing, exterior cleaning, concrete, house washing, gutter cleaning.

That's actually a pretty decent business side note, but okay. You're like, I'm selling water, you know, like not a bad, not a bad gig. Okay. But you prefer the lighting business because it has higher margins and okay. So two potential ways to think about this. So one way is you look at the Halloween store, which you've probably heard of, and they, you know, they run for 90 days or 2 months, whatever it is leading into Halloween. And they every year just do more and more of it. And that's the model. And he just sticks to that and he just takes off the rest of the year. And so then the question becomes, how do I continue to gain access to a scalable workforce that is, that I can basically turn on overnight and train up in a weekend to do all, you know, basically to deliver all these services. So that is not an unattractive business to be clear. I mean, a lot of people would love to own a business that they only have to work 90 days a year and they just I wouldn't say chill, but like kind of, right? And so the other 9 months of the year for that business would be you building out the, the inroads and laying in all of the, basically building out the rapid work infrastructure so that when people come in, it's just like, boom, this is the training or like, boom, we send our messages out. You guys have 14 days to respond. And you know that every year you get verbal commitments around the year from 100 people. And you know that that translates into 20 people who are actually proficient in work. And so then you just work your, you're basically work backwards from the model. Does that make sense? So that's the Halloween store path, which I don't think is necessarily a bad path. Like when I have something, you're like, okay, I'm making 310 on 500. I'm like, cool, let's do like 5 million and make 3 million. Like that sounds chill.

Yeah.

Right. Rather than like, how do I start another business to like give my people something to do in the meantime? So if I'm you, I would probably try and say like, and Layla has a great frame on this, which is. When I, when we're looking at two business decisions, there's always problems on either side. And so we ask the question, which problem would we rather solve? Or which problem do we feel like we're more equipped or more likely to solve given our current resources, skill sets, et cetera. And so if we're looking at this path, path one would be like, do I believe it's within my skill set to build the network 9 months a year and build the training out so that when people, when I send the mass blast out, like we're about to go into high season. Ready to rock and roll. I can get this percentage of people and I can get them trained up in a weekend and then we're off and running. Do I want to solve that problem or do I want to build out basically the ascension path from temporary lighting to permanent lighting and kind of build that whole other business? Okay. The way I asked the question seemed one-sided, but like, that's, that's a, that's a, it's a real question.

Yeah, no, it's, it's a real question because I could spend 9 months doing that, but I'm not gonna lie.

I think.

I may just get like a little bored, you know, through the rest of the 9 months.

Yeah. Get a dog, you know? Well, one of the things you can do and like, okay, so, okay. So I define patience as figuring out what to do in the meantime. Right. So we have to figure out something for you to do in the meantime. And so the question is, what can I do in the meantime that could make my core business money during that high season? Well, I could probably pre-sell that season all year.

So I did do pre-sales basically last month. We do our presale, just, you know, get cash flow. And just real quick side tangent, basically I went to a permanent lighting training end of last month.

Cool.

They actually said you can lease that permanent lighting, essentially, you know, year-round lighting if, for all y'all that don't really know.

Yeah.

Year-round lighting. But basically, you know, have that just recurring every single year. So they're leasing it basically, and then if they want, they could buy it out. So I was thinking about upselling those customers. We have, 1-year, 3-year, 5-year contracts, and then upselling the people that are on those contracts for just year-round lighting and say, hey, do you want this thing all year? And it's not going to cost you the $6,000 to $10,000 if you don't want to pay that upfront. Of course, we'd like that, but then offer that same exact price every single year.

I don't think it's a bad model. Which one would you rather do? I think both will work.

Honestly, I'm leaning towards just figuring out the landscape lighting because I don't think it's that hard.

Okay.

Great margins to add onto the business in my long-term play of making this scalable potentially to other markets. I would like a full year-round business instead of just seasonal.

So I'll say this. It's not that it's not a year-round business in the first year. This isn't me trying to convince you of this. It's kind of for everybody else too. It's not that it's not a year-round business. It's just that you do delivery for 90 days. The fact that you're not working the other 9 months is the problem. You're right. Because could we take $500K and make it $5 million if you worked the other 75% of the year?

Yeah.

Rather than kind of like creating this other business to keep yourself busy. Okay. Like that's how I think about it. Like you're like, man, if I work, I work a little bit, I make, I make $500K, I make $300K in a quarter. I'm like, we work a lot of it and maybe make $1.2 million. In the next year, that's with zero changes in like current capacity.

Yeah. And honestly, you answered my question. If Sammy's in the room, really sorry. I tried to ask her a question. She's like, I need literally 98 other data points, but you just figure it out. Because that's literally the problem I run into is like I had to pull all my advertising, all that stuff last season because I hired on all these people. Half the people don't know what they're doing all the way. There's no time to train. So That makes a lot of sense.

What'll happen, what would happen next is like if you went the other path of, if you decide to do the, the temporary leasing thing, the demand that you'll be able to generate for temporary lighting will still exceed your capacity with your existing workforce on the recurring work. So you're going to have the problem either way.

Yeah.

So which problem would you rather have?

Okay.

That's a you problem. Business-wise, either model works. I would recommend not doing both.

Yeah.

Okay, cool.

Thank you.

Yeah, you bet. Thank you. Little round of applause. These have been the easy ones. These have been fun ones.

All right.

Oh goodness.

Let's put, yeah, let's put some in.

So my name's Christine Mattis and I sell legal services in the form of estate planning and helping clients with real estate matters, basically to families. And there are families.

All high net worth families.

Yes, high net worth families.

Okay.

We did $2 million, so we've been growing 20% every year for the last 5 years. My goal is $10 million. What's stopping me is really, it was an eye-opener yesterday doing that scorecard. My EBITDA is terrible, like zero. And, but yet I know we wanna get more leads.

More like, I could just do nothing for zero.

Yeah.

It's so much easier.

And our, I know I would get more leads, but also sales. So I'm trying to figure out, well, what's the What's the first thing you would attack with when you have this kind of situation?

Well, I don't wanna understand why we weren't making money.

Right.

So I would probably be tackling that first.

Okay.

I think we were talking about y'all's restaurant yesterday. Like we need, you need to fix the core model unless there's some, what I'm pretty confident, 'cause I understand the business fairly well. Like there isn't some massive fixed cost. Like your cost is, is people, it's payroll. It's not like you have some machine that you have to pay or some massive rent. That must get paid before you can make, you know, incremental revenue. And so I would probably be looking inwards first at basically how I'm compensating people and how I'm pricing. So it's likely that, so are you at capacity right now with your current team?

They think we are, but I'm feeling there's more room to grow.

Yeah. So you, you have a, you have a pricing issue. Mm-hmm. So you're either underpriced or overpaying or a combination of both.

Okay.

And so I would fix that first cuz then you'll fix cash flow and then that freed up cash flow will allow you to go more, get more aggressive on the front end.

Got it.

But like for me to say, hey, let's go get more customers, it's probably not the solution right now.

Makes sense.

Like we have to free up cash so you can breathe.

Yeah, absolutely. Appreciate it.

Thank you. Yeah, you bet.

Oh, thank you.

How's it going, Alex? My name is also Alex. I own a company that—

Are you having the best day ever because you have that name? I mean, that's how I wake up every day. I'm like, I'm called Alex. Like I'm having the best day.

I sell trivia nights to bars and restaurants across the country. So they'll bring us in on their slow night of the week and we will come every week and basically fill up their bar for them.

Cool.

Currently at $1.1 million in revenue.

Like bar launch?

Sure.

If you will. No, man, that's what I did. That's what I did for a living for 2 years.

So currently $1.1 million, would like to be at $10 million. What's stopping me right now is capacity, but I think really I just a couple hires away from getting that. So my question is really more about our upsell. We do have an upsell that we present to bars right now, but it kind of sucks.

Cool.

And that our core offers to the trivia nights themselves, our LTV to CAC is about 12 to 1.

Love it.

So I like where we are there, but our upsell, I mean, people churn out after like 3 months.

You mean they do a couple trivia nights and then they dip or the bars?

The bars themselves will use it for about 3 months, the upsell. And then what is the upsell? The upsell is basically a different type of trivia night. It's called Music Mashup.

More of that.

It's like a music style trivia.

Okay.

So my question is, this is right now, I'm trying to just improve the Music Mashup game to make it something better.

Okay.

Do I keep doing that or do I just bail?

Okay. So this is, this is like super applicable to a lot of people here.

Okay.

So Let's say this is a customer journey. This will be Trivia.

All right.

So where do you sell ideally on this lifecycle? Where do you sell?

Where do I sell?

What's the best time to sell? This is our value line at the bottom, at the pain point, right? Yes. Okay. So you're delivering trivia hints, right?

Yes.

We have now provided value and we're selling here, but they're already full. So I give the analogy of if I go to, I go to y'all's restaurant, right? And I say, hi, I want a steak. I'm starving. Right. And sorry, I go to the restaurant. I say, I'm starving. You say, would you like a steak? And I say, sure. I eat the steak and you guys come back over and you're like, how was it? I'm like, oh my God, it was amazing. Oh, and you're like, awesome. Do you want another steak? I'd be like, no, no, I'm, I'm good. Like I'm good. And they're like, oh, you don't like the steak? I'm like, no, I like the steak. I'm, but I'm good. It's like, well then why don't you have another steak? You're like, ah, right. It gets really awkward. But that's actually kind of the situation a lot of business owners are in. And so, but after I have my steak, I might have the desire to have something sweet. And so now I'm full on my value vector for steak eating, but I'm empty on my value vector for dessert eating. And so then I'd be like, ah, you should try our apple cobbler. It's delicious, whatever. And so what we want to figure out is sometimes the point of greatest value also on another vector. Becomes the point of greatest deprivation. And that's why sometimes they overlap, often they don't. And so I think it's one of the big mistakes that people make is when they time their upsells. And so for, I'll give you a B2B example and then I'll circle back to the bar. So if I help someone get more leads, right? I have now provided value, but now that I've provided this value, they're like, shit, now I have to work all the leads. And so then that creates the opportunity to sell the lead nurture services or the other things that they need to go with this problem that I just created by solving their first problem. And so upsell timing is one of the big mess-ups I think in a lot of businesses. Okay. Back to the bars. So trivia nights is the, the core. So what's the, what stops you from just having basically just continue to do trivia nights with them?

What do you mean?

So you do a trivia night, you bring a bunch of people on Thursday. Next Thursday, I still want a bunch of people. Why don't I do trivia?

Oh no, that is the business model. Everything is weekly. So a bar will hire us and we will come in every week on that day at that time and bring back that crowd. So we develop regulars for them.

Okay. And that's, and that's sticky though, right?

Yes.

Okay. Then what's the problem with just doing more of that?

That was my question is whether I should just focus on doing more of that.

Yeah.

Okay. So you're like, I've got this really sticky thing that we're really good at and people like it. It's like, do that. Okay.

So follow-up question to that would be at what point, so let's say I just the next, however many years I just keep milking the trivia nights over and over again. At what point do I even consider bringing on an upsell? Because right now we have no upsell.

I don't think you necessarily need one. Are you running good margins?

Yeah, they're fine.

They're 25-ish percent. Yeah. 12?

25.

Oh, 25. Okay. I was like, 25 is fine. Okay. Yeah. I think you're just in a, you're in a more situation.

Okay.

So how do you get bars right now?

Primarily cold outbound. A lot of cold email, cold call, some inbound, about 20% of new clients come via referral.

Cool.

So, and that's, I can understand that because they're not trying to refer the bar down the street because it's like, it's, yeah, I get it. So we had so many issues with Jim Walsh. They only refer somebody who's like out of state. That's part of it. I get it. How many outbound actions are you taking per day to generate your sales velocity?

One sales guy full-time and he'll make about 100 sales calls, cold calls per day.

Yeah. So I mean, that guy should probably rip like 300, but just as a baseline, but I think hiring like 3 more guys and having all those guys do 300 a day would probably get you a bunch of sales. As long as, because the biggest thing that I would want to solve if I'm you is how do I make sure that bars that do trivia night just keep doing trivia night with me?

Yeah.

If that's not a problem and they are just all continually doing that, then you have solved the hardest problem in business, which is that you have revenue retention. So we just don't need to be fancy. We just need to do a shitload more of it. Cool.

Thank you.

Rock and roll. Yes, ma'am.

Hi, my name's Zara Mutuaquio. I sell—

Zara?

Zara.

Nice to meet you.

Nice to meet you. I sell kitchens and bathrooms to residential homeowners.

Okay.

I would— our revenue is about $320K.

Right.

Would like to be at $1M. The problem we're having is we have a sister company that is commercial real estate development. That is taking the money from the construction. It's my father's interest to keep that, the real estate. I want to focus on the commercial or the construction.

Who founded this business?

My father. Both.

So you founded both of them? So it's family business.

Family.

Your father here?

No.

Okay.

Mm.

All right.

So I want to focus on the construction. We are partners with Home Depot for 3 of their stores. I was told try to like do more with Home Depot, get more stores.

Mm-hmm.

But we do have all those leaks in the real estate, like properties aren't selling, properties aren't being rented to the max, all these bills, and they take the construction money. So I was—

so you have one business that makes you money and another business that loses you money?

Yeah.

Okay.

And we're kind of stuck in the real estate.

Are you stuck?

It's like a fight with my dad.

Oh yeah, that's fine.

Yeah. So I tell him, relax, take a chill pill, let's do the construction. But he's like, real estate is what makes you rich. And I'm like, no, like that's like you save and you invest with real estate, but that's not a business. And that's where we have the different opinions.

Mm-hmm.

So that's where we're trying to plug in the holes and grow.

I wanna, I wanna just give you this, which is that your father's logic is sound, but the practicality of it tends to be different in reality. And so the vast majority, this is super, I would say it's more common than it's uncommon, is that people who get into construction, they make some money and they're like, oh, I'll just start also doing construction and real estate and then I'll start flipping things. And then all of a sudden they've got like 4 businesses that are kind of real estate adjacent and they're like, well, it's actually an ecosystem. And you're like, oh God. Anyways, real quick guys, I have a special, special gift for you for being loyal listeners of the podcast. Layla and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all 8 functions of the business. So you've got marketing, you've got sales, you've got product, you got customer success, you've got IT, you've got recruiting, you got HR, you've got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30-ish pages for each of the stages. Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. Um, and so if that's at all interesting, you can go to acquisition.com/roadmap, R-O-A-D map, roadmap. So I think Let's say you're on stage here. What do you tell you?

What was that?

What do you tell you if you're on stage?

What do I tell me? I wanna focus on construction. Like, I like to focus on one thing. I don't like doing multiple and it just gets to the fight.

Yeah.

You know what to do.

Yeah.

So I think you have, so, so let's get real for a second. So you have a question of what you wanna do in your life. So you can continue to work in your father's business. So you have basically 3 paths. One is stomach it. I don't think your dad's going to change his mind. How old is he?

I'm waiting like 5 years for him to retire. He's 56. Yeah. Cause he tells me, he's like, I'm going to give you like 5 years. And then he tries pushing it. It's like 10 years.

I think it'll be 5 years away for the next year.

And I tell him, I'm like, I'm going to take over. It's me and my sister. And hopefully my husband comes back because he kicked them out.

There you go. Like, it's a whole family affair.

Yeah, it's crazy.

Okay, this is getting so juicy.

Yeah, it's crazy.

So this is one where there's high drama, very simple solutions. Sure. Other ones you have like no drama and very complex solutions. So these are more fun.

Well, I tell him like, I'm gonna take over, you should focus on what I want. And it's kind of just like repeating that into him.

Wait for your dad to retire in 5 years. Know that it's not going to be 5 years. Or I'm leaving. That's what you start with.

Yeah.

And under these terms, I'll stay.

I feel like I've done the third and that's why I'm here.

But do you believe that? But you just said he's moving them. He's pushing them back.

We fight, but I tell him I'm the boss.

Yeah.

It's very, and he listens, but it's a fight. Like it's a fight.

But did you sign something?

Sign what?

An agreement?

No.

I would put it in paper. And I know this sounds wild because it's like, it's family. The thing is, is that I don't think he's going to take you seriously. You're his baby girl.

Yeah.

Right. And this is big, rough construction. They're going to take advantage of you. You don't know as much. I've been doing this longer than you. Right. And you're like, and in the short time that I've done it, I've made more. So my units of, you know, my income per unit time is actually way higher than yours is. You don't need to say that. He'll hate you. So, but honestly, you have, you have life choices right now. The business decision is actually really easy. You know, the construction business is what you should be doing. Stick to the one that you have really good margins in. You have all these growth opportunities that are sitting in front of you and you have, you're throwing good money after bad, right? That's like a pretty standard thing that happens in the entrepreneurial journey. But you just have that choice to make. Now, if you're like, well, I already did 3, it's like, then you didn't do it right.

Mm-hmm.

And so fundamentally, he doesn't believe you. Now, there is a world where he will just never relinquish power.

Mm-hmm.

And then you've gotta figure out what you wanna do with your life.

Yeah. I'm gonna hope for 3 and then we'll see what happens.

But, but you have to, he's gotta take it seriously though. So here's how I would do it. This is how I do it. I want to buy the business from you because you saying wait until you retire. It's like, what am I gonna do with my time? And like, I, you know, I gotta do something. And then, right. So it's like, I'm going to buy the business from you effective today. And I will pay you over the next 5 years. Then you have a clear date or 3 years, whatever. And then you work essentially for free. And then you take the profit that you would, you know, you agree on a price and you start paying it. Like you have to have an agreement and you have to send money, has to change hands either way. It's going to have to change hands. Otherwise you're going to have a tax event regardless when he gives you a business. So you might as well do it now. You can talk to the estate attorney, right? Like there's a way to do this in a tax efficient manner, but if he is going to transition the business to you, which I'm sure he does want to do, then we need to put a clock on it. We need to start making payments towards it. That's how 3 actually works. If it's just like, hey, I'm the boss now. It's like, you're just going to keep doing this loop for the next 20 years.

Okay.

And you seem like a very kind person. And so I need you to put your, take your teeth out a little bit.

That's what my sister is.

Yeah.

She's a mean one. And I'm like, is she here? No, she's not. So the deal I made with him when I wanted to come here was to invest in the construction. And he said, okay, you go, you pay for it. If it works, I'll give you your money back. So that's what I'm hoping. Like, okay. I mean, if I say you can do this. Yeah. And I don't want to do the real estate. Yeah.

But this is it. There's no, there's really no more to go over on this one.

So do the paperwork. This is the deal.

Agree on a price and then agree on the terms and then start the car.

Okay.

And if he says no, then you'll actually be able to say, this is like, I'll give you a totally different example. Girl dates guy, guy promises to marry girl, girl asks for engagement ring. He says, I'll give you a promise ring. Wait, when are we getting married? Don't worry. I gotta close up some things at work first. 2 years pass. When are we getting married? He's never going to marry you. And so you just have to, like, you have to, there's a decision that has to get made. And so, and if you want to use this quote, you can, which is decision comes from the Latin root of dicidere, which means to cut off, which means that we have to cut off one of these paths. Otherwise you haven't made a decision. I define commitment as the elimination of alternatives. Right now you have 3 alternatives. You have to eliminate 2.

Okay.

Cool?

Thank you.

Hey, Alex.

Hello, sir.

My name is Adam Hernandez. We sell health insurance, life insurance, retirement planning to middle-income Americans. We currently about $4 million in top line. Want to be about $10 million here. I think we can do it in 2 years. Our constraint is we've got 2 locations, brick and mortar. We have a DMA about 90 miles from our, you know, brick and mortar. We're at max capacity at this point.

Awesome.

And so we need to, you know, we're looking to bring another location on outside of this DMA, right? And so how do we efficiently, as we're thinking through the strategy, find good talent that we can eventually groom into leadership to lead that office? And then do so cash flowing as quickly as we can, because one of the challenges is taking somebody from unlicensed to licensed to learning the business to, we have a 6-month sales cycle as it is once we start marketing. How do we do that as efficiently as possible?

What stops you from taking one person from your current locations and giving them the opportunity to own a small chunk of that one?

Yeah, we've, we've thought about doing that. And then the thought process is there, well, we kind of disrupt the flow of that existing office.

How many guys are in each office?

They're small. So our, our West, West office is 2 people and then we've got 5 in our, in our home office.

Okay. Yep. Do you think you can take one of the 5?

No, not, no, I don't. I don't think so.

Okay.

No.

Well, which problem would you rather have? So either you can take your 5 location. And bring it down to 4 and then backfill within that location that's already cash flowing positive, has the culture there and bring somebody else in? Or do you think it'll be harder to get somebody who's brand new, not surrounded by anyone to get up to speed?

It's a great question. I don't know without testing it. And I know that, you know, both have risks and, you know, you know, we might, you're only in trouble.

Yeah, exactly. So I'm always thinking about how do we mitigate the risk and how do we, so I'm, I'm, I'm leading to where I'm, where I, I think that it is lower risk to take one of the five and bring them over to the other location and have them seed that with all the values and the culture that, you know, they already know how to run the business. And so now you only have one new variable, which is the location that, you know, the guy's good, you know, he's going to do your values and then you can spin that location up. And then the location that you have, that is your mothership. It can take a little bit of a dip, right? If it needs to, because it can weather that you've got cash flow, you've got existing contracts, you've got premiums that are coming in. If you do new guy, new location, everything's new and you're not sure, is it the market that's bad? Is it this guy who's bad? Maybe he's good, but he's not a culture fit. But now I got to turn the whole location over because he ends up hiring 2 other people underneath him that also aren't culture fits. So like, to me, it's, it's, it's a pretty straight, like, I think the risk on going from 5 to 4, taking the, one of the best guys, give him the opportunity for his career to advance, which also paints a picture for everyone else in the organization that, hey, you do a great job. You might be able to have your own office that you can lead. I think that's a really good story. And you're in the talent business. It's hard to find good guys. Right. For sure. Yeah. I own an insurance company. So I, I get it.

Question for you to follow up on that then. So to efficiently scale that quicker and continue to duplicate that, then, you know, we thought about that as, as a, as a model for it. So then, but it's, it's kind of slower. We got to build this up, find a guy from here and then move them here. Right. Guy or gal from here. Or how do we eventually across state lines now find somebody that's two states over? You know, you got somebody that's like, I don't want to move two states over. Maybe they do because the upside's so good. You don't— so the opportunity, creating a good enough opportunity.

Yeah. And this is career pathing. I think it's actually really good for the business because people do eventually, they build a big enough book of business. You know, I'm thinking about hanging my own shingle. It's like, cool, let me just take care of that for you. Hang your own shingle, but under our bigger flag and you get all of our systems, all of our infrastructure, all our our support, our lead generation, everything that's in that area, we'll just immediately send to you. You'll hit the ground running.

So from initial onboarding, having a good process that's thought out, you know, from A to Z, hey, if you get to this point, this is an opportunity.

Yeah. And I think that paints a really compelling picture.

Yeah.

That's what I would do. I also would just, this is for everybody. A lot of the problems that you have are based on timeline, which is just like an arbitrary line in the sand that it's like, I must get to this point by this, you know, by the state, which is basically irrelevant, just made up. And so I think at the end of the day, if you thought, well, what would it take to make this, you know, insurance company one of the biggest in the, in the US in 20 years, you probably grow very strategically off of this culture that has worked really, really well and trying to seed each location with the best, best seeds from the ones before. So you just keep those values kind of all the way through. So I think that's the much lower risk path. Appreciate it. Thank you. 100%. Hi again. Yes.

My name is—

Seller Ukraine, number one seller in all Ukraine, spends lots of money on ads. You've gone to Poland and you haven't been able to get the market to convert. We talked last night. You take the words, look at the cultural differences on ChatGPT, translate your existing marketing copy back into the Polish cultural norms so that the right language is used so that it converts there. What's the question? Wow.

You have, you have AI here already. Neuralink, something like this. I prepare a little bit different question.

Thank you.

Thank you. I promise that you don't remember me. And we sell crypto education to a wide audience and mostly who want to meet their basic needs. So there are no specific audience. We make over $1 million in revenue. We operate in Ukraine and are launching in other countries. I want to reach $10 million. I more or less understand how by expanding to new markets and we run cold traffic from Meta, Google, influencers, Telegram, and etc. through funnels. And one auto webinar funnel had generated over $20 million and still working. And we tested VSL, we put same content like in our auto webinar, but shorter and without comments. Activities. We tested advertorials, we tested lead magnets funnels, and nothing works as well as auto webinar funnel.

Okay.

That's where the magic happens, where we are creating new auto webinar funnels and testing new topics, even new faces within these funnels. And I want to reach the audience that doesn't attend webinars, and my big question is how to find best practices and what else could hypothetically work and I'm reading your book about offers right now and it inspired me to build funnels for specific high-paying segments instead of just wide audience and I'd like to ask you your opinion about this and is it the right way that I think right now?

So are you doing $1 million a year or because you said, I remember the $20, Million dollars more over a million dollars per month. Per month. Okay. Okay. That makes, makes me feel better. Okay. Cause you're like, we're the biggest in Ukraine. I'm like a million bucks a year. I don't think so.

Yes.

Maybe in crypto at, you know, maybe at 12 in Ukraine. I don't know. I don't, I don't know what the proportional GDP is there and I know there's war and all sorts of stuff. So I'm sure it's tough over there. Okay. So if the goal is to get bigger, either, I mean, the simplest thing to do would just be to add an upsell to the existing Ukraine market. That would be the simplest thing to do. Highest likelihood impact that would just make you more money. That's the, that is for sure the easiest money button. If you wanted to expand front ends, then I think the idea of like trying to hit the people who are not on Google and Meta is not the framework that I would use. And the reason for that is one, everyone's on it. Secondarily, the people who aren't on it probably aren't buying crypto. Like if you're not on Google, you're probably not buying crypto. You're not on Web2, Web3 is going to be like, what is going on? And so I think that like the first thing I would do is probably add the Ascension Path. That would be like thing one. And then in terms of expanding into new markets, it was kind of what we talked about last night, which is I think that the marketing that you're doing is just simply not resonating in these other markets because it's not your first language. And so marketing is so nuanced in terms of how copy's written, how like what analogies are persuasive, what visuals resonate within a given audience, that's in my opinion what the highest likelihood gap is for why it's not converting in those new markets.

Yes, I understood. We do upsells, we have continuity, we have high-ticket products inside, and we, I think, do everything. The main point is what the best practices in funnels can work with us. Maybe I don't understand clearly about Google. Yeah, Google banned us every day and we can't work with our crypto. We are not a crypto project. We are not some like, but it's not.

Well, everything crypto related, there's a lot of.

Yeah.

Yeah. So, I mean, fundamentally, the business as it is today is just going to be a cash business. It's not going to be something that has enterprise value. And so you're, you're running a basic arbitrage business, which is just, I buy media for a buck. I make $8 on gated media and I just run that as much as I can. And so really the only, the only way to grow that business is to just market more, spend more. That's it. And the only way that you can do that is that you continue to increase LTV. And so you're going to reach a natural cap based on the amount that you make per customer and the cost of eyeballs. And then over time, that gap is going to shrink and your margins are going to compress. Press, which is why like right now you have, when I remember I did company 1, company 2 yesterday, I walked across here and I said, you're, you're company 1. You're a marketing machine and you're, you know, blowing tons of cash flow in the door. And that's a good thing. I call this a smash and grab opportunity. It's unlikely that it becomes something that has like sustainable long-term enterprise value. When I say long-term, you're like 10 years, like you can for sure run this for more years than now, but it's just going to be a more thing. Like, how do we spend more money and how do we make better ads? But if you have converting language, if you like auto webinars, whatever is converting really well for you, then there's lots of little things. So, which is probably out of the scope of what I could answer in a verbal Q&A, but it's like, have we split test the first 30 seconds of the VSL with 3 or 5, you know, 3 to 5 different hooks, you know, on the ad side, like how many new pieces of creative are we putting out a day? I don't know how many you're putting out, but like, if you get up to, it's basically about 50. 50 pieces of creative per $10,000 per day. Yeah. So 5 pieces per $10,000 per day.

Hundreds per month.

Yeah. So that would be from a creative perspective. So it would really just be looking at every step of it and just looking against the checklist and saying like, like all we're going to be doing with that business is just improving it. There's not going to be a big order of magnitude change that's going to happen. It's just going to be 100 small things because it's already profitable. You already have a client acquisition system. So it's just like, how do we go from 8 to 1 to 12 to 1 so that we can then double ad spend and be at 8 to 1 again, but at twice the spend. And that's literally the process. You just do that over and over again. Got it.

Thank you so much.

Yeah, you bet.

Hi, Alex.

Hello.

My name is Nico. I'm from Quebec also. There was another guy from Quebec too, my friend. So, yeah, we help home service businesses stuck between $100K and their first million a year to Reach their first million a year with a 3-step client acquisition formula called TNT. But before that, for 5 years, we were a WAS, so website as a service. We sold $2.1 million over the last year. Net profit is like $950K. We would like to reach $500K a month collected for Quebec market and have less complexity. Okay, situation here. So we have like 700 active clients on the whole old system, which was a WAS. $200 a month thing. It was super cool, but super frustrating. The team was starting to feel like robots. So we got emotional and we're like, okay, let's move to high ticket. So that's what happened 4 months ago. Uh, we started high ticket. We're like, woo, cash flow is here now. But the thing is, I realized yesterday actually that my LTV to CAC is now very low because my clients are home service businesses. I'm in Quebec. We can only run ads for like 4 months for them because there's, there's snow everywhere for like 7 months a year. The other thing is once the ads work, they stop the ads because they are limited by capacity. So what's stopping me to grow?

What do you want to do with this business?

What we want to do actually is, well, you want to—

because the first business sounded like a great business, right?

I know.

Sure.

The thing is we wanted to create a real transformation and I think that was—

Can I tell you a secret?

Yeah.

Very small business owners will never build a stable business because they are not stable.

Hmm.

So it has nothing to do with you.

Okay.

And this took me a very long time to figure out and I kept trying to bang my head against the wall being like, how do I fix churn? How do I fix retention? Like Shopify. Has best-in-class retention for VSMBs, so very small business owners, prosumers, if you will, and they keep 50% per year. That's best-in-class, $100 billion company. And so I have only seen one model work with small business owners and it's ultra low priced and you build the entire business around having high gross margins, but low prices.

Right. So the West.

Yes.

That was a good thing because I feel like I'm trying to push a high ticket.

The only thing that happened is you just got impatient.

Yeah.

You had 700 customers paying you $200 a month. You're making $140 a month.

Yeah.

Probably good margins.

Yep.

Yeah.

It was nice.

And you're on like a little— Right. And so I think honestly, like, you know, the best thing that would have happened would have been that you didn't take the last 4 months and build this other thing and you would have just kept doubling down and taking all that extra energy and said, what were you doing in sales per month with the WAS? I just like saying WAS.

The WAS were onboarding like 40 to 50 new clients a month.

What's churn?

It was, we were keeping like 85% of people year after year.

Good business.

Right.

The thing is super high gross margins.

Yeah.

85% annual revenue retention.

When we started high ticket, we're like, whoa, cash flow is insane now. Like on month 1, but then maybe not later.

Well, you're certainly not making transformations now. They leave in 4 months.

Yeah.

So here's, okay. So instead of thinking about transformations, just think So Elon has this really good frame around this. He said, either we can help a very small amount of people a ton, or we can help a lot of people a little bit. And he's taken the perspective to helping a lot of people a little bit. And so I think with this business, like they have demonstrated with their dollars that they value what you give them. They don't cancel it. They like it. When you give them the other thing, you think you're selling, you're selling out of your own wallet. You're saying, I wouldn't want this. I would want this. And then you're saying they're not like me. Duh.

And we can still like sell the high ticket to the nuggets in the West. Yeah, that would be the thing.

You know what would be even cooler? We're not doing that.

Oh, again, not even?

No, like, hear me out. So, so, no, this is, this is like, I will, I will keep the entertainment for, for entertainment purposes, but I want you to, I want you to really think about this. So, okay. There is going to be, I didn't explain one of these other frameworks, but crash course. So with every one of the implementations that you do, you have limited resources, time, effort, money, right? And so strategy is prioritization. It means how do we take these limited resources and allocate them against unlimited options? And so if you're not sure, it's because you're not doing the job of the entrepreneur. There is always only one thing that is the most important in the business. And if you can't decide, that's on you. And so you have the stuff, you've got your team, you've got your money or whatever. And so instead of being like, man, we should start this Ascension thing, 'cause you probably have really good LTV to CAC on this other business, the WaaS business.

Oh yeah.

Yeah.

This one.

Yeah.

Yeah.

Yeah.

Yeah.

Right. And so instead of saying, hey, let's start this whole other business, right? 'Cause it's totally different service, totally different price point, whatever.

Right.

Just say like, what if we took all of that energy of starting this other business and just said, how do we get to 200 customers a month? True. Yeah. That would quadruple the business.

Yeah.

And if you did that, you'd be at $500,000 a month in 6 months. That's right. And it would be really good $500,000 a month.

Amazing. That helps.

Cool.

Thank you.

No, you bet.

All right.

My name is Cole. So I sell solar. I'm, I'm like a marketing company for for solar providers in California. Uh, so we sell to homeowners. I'm currently, we opened up last April and I did $850,000 last year. So I want to be at $10 million. The biggest, I know, I know the biggest concern that I have, huh?

Yesterday. Yesterday. Yeah.

I think that our, my biggest concern right now is that I think we have a very much of an apples to apples comparison to other solar companies. I don't think our offer is actually that special in terms like, you know, relatively speaking, commodity.

Yeah, for sure.

And so I've been trying to find ways to create an apples-to-oranges comparison.

Our sales rates—

like, me and my business partner, we're very good at sales. So we have like a, you know, we did door-to-door for like decades, so, you know, we're like 80% close rates. Um, but it's a battle, right?

We—

and we do lose people to price shopping, which is, you know, we're 100% virtual. So I'm trying to figure out how to create an apples-to-oranges comparison in the solar industry, which is very much a commodity market.

But you don't have control over the product, right? That's correct. Yeah. I'll, I'll be honest. It's very tough. Like you can't, you actually can't really change your offer. Right. And so the only thing that you can do is change the terms, but it's a zero-sum game. So every dollar you take out of your pocket, you put it into, you know, the co— like every dollar you give the customer, you're taking out of your pocket because you, you can't control the variables.

Right.

Yeah.

So what were the margins that you made on the $800 million?

We made half of that.

Okay.

Yeah.

So I'll say this. I don't think the constraint of the business is that it's commoditized. Okay. So although it may be frustrating, you're running 50% margins on a business that you have very little operational complexity around. And so if you want to hit $10 million, you absolutely could hit $10 million. There's tons of solar companies that go from 0 to 10, 0 to 20 in like 12 months, 24 months. It's not that uncommon. Yeah. But the business that you're really in is the recruiting, hiring, training of salespeople business. And that's, that's the game, right? The business is not super sellable. It don't, I mean, it is sellable. Like you can sell like one times and then you can basically meld your team into some other guy's distribution base and it all gets aggregated. And that's kind of how that industry is going. But I don't like, basically you don't have enough control over the business to really materially change the offer.

Yeah.

And so I don't normally say that, but essentially, and like, this is, I hope you're not taking it as a slight. It's just like, you're a hired gun. You know what I mean? And so you've got two hired guns and you guys are both really, you're mercenaries. You're both really good at sales and you're making basically the same amount that a top tier sales guy would at, at a sales org. And so the only leverage that you're going to get is training, your ability to train, onboard, recruit other guys who can do the same thing as you and you get an override on, on their commissions. Yeah. And so if anything, I would say that So we're getting to the answer. So basically where you can have a competitive advantage is not on the customer side, but on the salesman side. And so I would reorient all my attention to being like, how can I make the best offer to salespeople? How can I get more salespeople onboarded? How can I have superior training? How can I have better data and analytics and better lead gen for them so that their job of selling is made easiest with me? For everything else minus the core offer. Yeah.

My, my vision long-term is with solar, especially in California, it's, it's a savings-oriented sale. So it's like your bill is this, you're gonna pay less money, et cetera.

As long as the credits are there.

What's that?

As long as the credits are there, which is also a problem. But, uh, so soon.

Yeah.

For real. My, I divested from a solar company.

Well, was that you?

I divested from a solar. Oh, did you really? Interesting. For this exact issue.

Yeah. My ultimate vision, what I, what I'm kind of been obsessed with is instead of selling on savings, I would way rather find a way to add services on top of that, whether it's like, you know, some sort of HVAC, AeroSeal thing, or, you know, the tax services with depreciation losses.

Dude, I'd rather you just like you. So let's say, so when we're going zooming all the way out strategy stuff, what you have is an ability to sell, correct? And you know how to generate leads. And if tomorrow you said, I'm not selling solar, you'd have to fill out the, you know, the next 180 days max of contracts and make sure that the shit gets installed, whatever. Right. And then after that, you can do whatever you want. Right. How many employees do you have?

We have 4.

Yeah. So it's not, I mean, it's you, your partner and 2 other people. Yeah. Yeah.

Or 3 other people.

3 other people. Okay. Yeah. So I think that it just might be, you might be better served and I don't normally give this kind of advice, but like you might just be better served taking that skillset and putting it in a different opportunity vehicle. Interesting. And just like you were like, how do I do this solar thing with HVAC? It's like, just do HVAC. Mm-hmm. Just go door-to-door, sell HVAC. And HVAC has phenomenal multiples and has great revenue retention.

Mm-hmm.

Once people do the HVAC, person comes back every year, services again, upsells more stuff. Cool. And there's problems in that business. Getting HVAC, you know, people, the fixers, the technicians.

Yeah.

Is the constraint of that business. Usually getting customers is actually not the constraint. So it might be kind of fun for you to be like, oh, my phone's ringing. This is weird. People are calling me because their AC is broken, not like, hey, can you sell me solar? Like, no one does that. Yeah, for sure. Right. And so I think like, if the goal long-term is to build something that has pure enterprise value, given the fact that you have so little control over the existing process, you're basically just an acquisition machine, which I respect. I came from that in the gym world. Then recombine it into a business model that actually has enterprise value.

Got it.

Cool. Probably not what you expected, but not at all. Okay.

Thank you.

Perfect. Sweet. Was that helpful? Was that cool? Interesting? All right, good.