Strategic Business Advice That Applies To Every Business | Ep 820

Hey guys, welcome back to the game. I have been getting your feedback and y'all have been saying you like the more interactive content, you like the more real business content, which hallelujah, so do I. I prefer actually talking about business rather than, um, not. And so, um, I'm stoked about it and I'm gonna keep doing more of this because I love it. And so, uh, this is full of business owners who ask me questions in person about their particular businesses. What's really nice about this is that there were so many common throughlines that applied to every business in the room. Okay, I've got this other opportunity. Should I pursue that or should I keep the one I'm on? I've got multiple customers that I'm serving. Which one should I switch? One's easy to get, one's harder to get. The other one that's harder to get is more profitable. The market's getting hard right now. How do I continue to scale despite that? And a few more questions that affect just about every business owner. Enjoy. Okay, Q&A stuff. So typically I have a longer preamble that I'll do going into this, but before I do, did you guys enjoy this morning? Yes? Okay, awesome. It was cool to meet other people from the portfolio. Okay, yeah. So those are the people who actually do the stuff that we do kind of every day. And hopefully I kind of fulfilled on the promise that I made yesterday that yesterday was all kind of like theoretical. This is kind of the framework that we think about creating value. Today was all about kind of tactics and actually making sure that you're asking the right questions to move your company forward the fastest. So the big thing, hopefully, that I would like for you to get out of this is making sure that you're prioritizing the right things. And so I have had the fortune or misfortune, depending on how you see it, of sitting on a lot of quarterly meetings and annual planning. And so I have a very simple framework that I walk through for when we are figuring out what matters most. And if we think about strategy as prioritizing limited resources—time, money, you—to unlimited potential actions, then the better we do that, the higher the return we get on what we have and what we put in. And so fundamentally, that is leverage—getting more for what you put in. So every task that you have, 'cause right now you probably have this big list of to-dos, right? You have this list of 100 different notes that you're thinking about for the cleaning business and you're like, okay, which one am I gonna start with first? And when you get on the plane tomorrow, you'll have your empty page and you'll have like, okay, what am I actually going to do, right? So this is how I think through it. And I would teach this to your teams because they will come to you with ideas all the time. And being able to say no and here's why, I think helps a lot. So number 1 is every single goal that you have in the business or any action that you're going to take has to increase the number of customers that you're going to get, increase the lifetime gross profit per customer, or decrease the risk associated with making action 1 or action 2. And so when someone comes with some sort of proposal of like, hey, I would like to use some of our limited resources to do something, You say, great, which one of these things is it gonna do? Is this thing that you wanna do going to increase the number of customers we're going to get? Is it going to increase how much they're worth? Or is it going to decrease our risk as a business, aka increase the likelihood that these two continue to occur? And if they can't clearly draw a line to how what they want to do changes these things, you should probably not do it. So I'll walk you through an example. So let's say Sharon comes up to us and says, hey, I think we should redesign the site. And you're like, okay, why? Well, I mean, I think it just looks a little outdated, right? And you say, okay, understood. Well, how much do you think that's gonna cost money-wise? And she might say something like, well, I think, you know, get a firm in, maybe like $25,000 or something like that to like do a full rehaul. And you're like, all right, got it. How long? About 8 weeks. Okay, what internal resources do you need? Probably need to take Tom and Bill and put them on it full-time. "Okay, great. And what do you expect is gonna increase throughput for the business?" "I don't know, I guess opt-in rate could go up by 10%." She probably wouldn't say that, but let's just say she did say that. "I think we could get a site-wide opt-in increase by 10%." "Okay, great. Is there anything else that we can do for $25,000 and 8 weeks and 2 of our people full-time that can get us more than 10%?" And if the answer is yes, then we shouldn't do that idea, that Sharon's idea. We should do the other one instead. And so fundamentally, the thing is, is that there's lots of very logical reasons of things that can increase the business. The question isn't whether it's going to work. It's what, to what degree will it work? How much is it going to work? And fundamentally, the best entrepreneurs get the highest returns for the things they put in. That's the game. And so, um, I think about this all the time because the highest leverage moves are oftentimes moves that are off the board. They're boards. They're moves that you don't see. And that's where sometimes you meet somebody who's in your industry and all of a sudden they change your paradigm and they show you a different move that you get 10 times more for what you put in rather than continue to play the kind of incremental game that you're on. Now, that being said, you know what, I'm gonna explain this 'cause I think it's really worth it. So one of the biggest breakthroughs that I had as an entrepreneur was my understanding of change and cost of change. So, I'm gonna show a little visual here. Let's say this is normal business function, all right? Your business is moving, everything's fine. Okay, now let's say that you change something in your sales process because you think it's gonna get better. Well, this is what's going to immediately happen, which is that you're gonna go down by about 20%. This is just from pattern recognition from doing this for, you know, decent amount of time. You change stuff, you go, basically your team has to relearn a new process. Customer success, marketing, onboarding, reporting, content, whatever, you're gonna go down by 20% because they just don't know what they're doing. Okay, so if they're down by 20% and you thought you were gonna get a 5% improvement from this thing if it worked, is it really worth the bet? No. Now, this is where it gets really hairy, 'cause some people are like, well, you know what, it'll improve by 5% a month, and by month 6, I'll be +5%. But let's be real, month 2, you're gonna think of something else. And you're gonna be here again. And so what this has translated into for me is two things. One, and I'm gonna be crude on purpose here, some shit stays fucked. And so what I mean by that is that there are things that are in your business that are wrong and that you're like, this drives me nuts. And that's okay. And there's tons of things. There's literally, I have a list, it's Alex's big list of ideas. It's 6 pages long of things that I think we should do better at acquisition.com. And whenever I get up and I see people breathe for a moment, I'm like, I'm gonna pull another one off the list. I'm gonna, you know, mess their days up. It's gonna be great. And so, but the thing is, is that I appraise those things that can get better by, can it at least improve this process or the overall business by over 20%? And so that's my rule of thumb. If it's not going to, if I don't have strong confidence that this will have a more than 20% lift, I'm not willing to take a guaranteed 20% cut. Because what you'll find is that if you actually do none of these things, this is what happens in reality. People just get better at doing their jobs. People just get more efficient. Humans don't wanna work as hard, they find better ways. And so not changing things in and of itself oftentimes does result in improvement. And so if I know I have a guaranteed cost of, 20%, and basically a fixed improvement of 5 to 10% that I'm going to get from doing nothing, I now have a 30% spread for change. You've got to be really sure that it's worth the bet. So this is like, this took me like way too long to really understand. And so I would encourage you, if you have this big list of things coming from here, pick the 3 that you think are absolutely, there's no question in your mind, are going to increase the business and cost you the least amount of operational risk in order to implement. Okay, so going back to this, and now I'll go choose an ace. Let's say that we say, all right, we wanna increase, you know, number of customers, great. So let's say to do that, we want to double our sales team. Okay, so when we do that, we have 3 options for any strategy. And if you followed my stuff, hopefully this should look familiar. But either we're going to do more of what we're already doing, we're going to do what we're doing better, or we're going to do something brand new. So if you're sub-$1 million, you almost always have to do more. Period. You're just pretty much like— there's a math explanation behind it, but basically, if you're closing at 25%, you know, your sales guys are, and you're like, okay, I could spend my time trying to get the sales guy better and maybe I could go from 25% to 35%. Okay, that would be material. "Or I could just hire another salesperson and double the business." Well, you should probably just hire the second salesperson and double the business. When you get bigger, when you have 20 salespeople, if you wanted to have, let's say you're closing the same percentage, say 25% close rate. If you wanted to go from 25 to say 35, in order for you to make that same increase, you'd have to get like 8 more sales guys. So at that point it's like, well, maybe it makes more sense for us to kind of retrain the team. And that would be a better rather than a more. And so math-wise, you can just math out which one of these actually makes more sense based on the risk and the cost associated with basically doing whatever path you're choosing to take. Does that make sense? Okay. So we wanted to get more customers. We said, okay, could we improve our close rate or should we get more sales guys? We said we're gonna get more sales guys. And then if I see quarter over quarter that I have the same objective and it hasn't happened, I usually have a who issue. And so one of the things that I, I made a lot of mistakes with this early on, and I would say even midway on, maybe even three-quarters of the way on too, was that I would come up with a plan. I would check this out. I think this is a good return. I think it's low risk. And then two quarters in a row, it hasn't happened yet. And so then my immediate assumption was I must have done something wrong. This is a bad plan. More times than not, the plan is not that bad. You just have a bad person doing it or somebody who's incompetent. And I used to have a lot more like, you know what, last 2 quarters, I know Sharon's gonna turn it around. I think this is gonna be your quarter. And I just don't have enough time for that anymore. I just, I want things to improve. You know, we're on a mission to do what we wanna do. And I just really need competence. And so at the end of the day, I think we do Sharon a disservice because there's a company that has mediocre standards that she will be welcomed to in open arms and feel at home and find her brethren, be able to move up in that company because everyone there sucks and she's mediocre. And so by, you know, imagine the fulfillment that Sharon could get in that company compared to yours. And I feel like I owe it to her to release her to that. And so I wanna, you know, Release you to free agency. Okay. So jokes aside, let's get into Q&A. I just like this as a backdrop for when you're making, okay, which thing am I going to be focused on so that's gonna move my company forward the most in the shortest period of time? So guys, what you're listening to is one very minuscule sliver of the Scaling Workshop that we run here at acquisition.com in Vegas at our headquarters. If you wanna be in the room and figure out exactly what you need to do to scale, then come check it out. Obviously, you got to be a legit business owner, got to have employees, got to have revenue, all that kind of good stuff. I think the room that this was, I think the average was over $3 million in terms of business size. So pretty legit businesses. And if you want the easiest link in the world, acq.com/go.

Hello, my name is Zion. We do $1.1 to $1.2 million in revenue a year. Which one is it? 1.1. Cool. Um, I would like to be at 10 million in revenue.

I make 1 to 100 million a year.

In there, you're good. Um, this is what's stopping me, I believe: focus, skill deficiency, and belief. All right. I have two avatars, which is working professionals and local government. Um, and yeah, I need to— I, I believe I need to choose between the two avatars.

What do you sell again?

Um, so support and accommodation. So basically, children who come from challenged backgrounds who have been in care come to us. We basically help them build their semi-independent living skills. So we built— we helped them build their independent skills. So when they reach a certain age, they can then move on to their own accommodation and live independently. So these are kids in the system, right?

So like cooking skills, balancing a budget? Yeah, personal development, work life skills.

Yeah, yeah, yeah, yeah. Um, now the issue I have is, how do you make money?

Huh? How do you make money?

So we make money from our support services and our accommodation. So basically we rent properties from landlords who have, uh real estate, and then we sublet the rooms, um, and then we charge the government a support package for supporting the young people, um, and then obviously there's a risk premium because these are challenged kids, um, and then yeah, we just make the spread basically.

Okay, so the government is your, is your customer? Yeah. Okay, got it. Okay, so the issue is focus and avatar. Why is that a problem?

Okay, so basically because we— so we have, so we have two avatars. So obviously the asset, the asset we have control of is obviously the property. So we can use that for different services. So we can either rent out to professionals who need rooms on a short-term basis, which we do, or we can rent out rooms to kids in care who need support and accommodation. My issue is which one do I pick?

I don't know if that makes sense. Okay, say the two people that you're running it out to is the difference.

Okay, so, so working professionals is one. Okay. The second is kids in care. The kids. Yeah.

What's the revenue split now? Right now, just working professionals. So the whole kids thing doesn't exist right now?

Not at the moment, no. But, but wait, but wait, but I'll tell you why. I'll tell you why. I'll tell you why. So we were doing it. We were doing it. I was like, this guy's doing the Lord's work.

He's like, well, He's like, for now I'm just a landlord. So, so, so we actually—

so I actually scaled it from 1 to 6, right? And my business partner had an inappropriate relationship with one of the kids in care and it completely fucked me.

And we were doing really—

technically he fucked her. Yeah, well, he— well, we don't know if he fucked her, but it was inappropriate. It was, it was inappropriate.

The highest Q&A I've had today, for sure. All right, keep going.

And it's like it really ruined the brand and we were doing really, really well. And it's like obviously due to safeguarding and risk, we kind of started losing all our contracts and they took all their kids out. I've got empty properties, so I just went to the professionals just to keep obviously paying my bills. Got it. Okay.

That helps a lot more context-wise. Just thought you'd sneak that by me. I'm kidding. That's what your partner did. Anyways. Okay, so how quickly are you able to fill it up with the professionals thing? One day. Wait, no, so you can fill up all your properties using the professionals?

Yeah, within 7 days.

Okay, so is it just that your heart's not in it with the professionals and you're gonna do it? Yeah, my heart's not in it. Okay, cool. Well, first off, kudos. How difficult is it? How quickly can you fill it up with kids? Okay, so longer.

3 to 6, yeah, longer, 3 to 6 months.

And I'm guessing you have a cash flow issue in the meantime.

Yeah, yeah. So obviously the professionals is to generate the cash flow to—

Yeah, I think you got to bridge the gap to where you want to go. Okay. So like, basically sometimes you got to do what you don't want to do to get to what you do want to do. You know, like, as much as I could be like, you should only serve the one person. Like, I think that you have the properties, you already have leases on, you have the commitments that you have to stick with. Fill up the properties with the working professionals so that you can create cash flow. I would consider just rebranding the old one, given your partner, and then just kind of relaunching if you can bandwidth-wise in parallel, but just knowing that this is gonna be basically an asset that you're gonna sunset. Is there a huge amount of operational resources after it gets filled up that you have to deploy to manage it or no? The kids in camp? Professional, professionals. No, easy. Okay, yeah. I will say this as a side note. Notice how easy it is to make money in this other thing versus the hard thing? In general, if you weren't like, I really wanna help the kids, I'd be like, dude, just do the really easy one. No, if you're like, it takes nothing, I can fill it up in a day, cash flows, whatever, like do more of that, um, if the goal was money. Yeah, if the goal— like, okay, well, the goal, the goal is money.

I mean, but, but I can, I can, I can feel for professionals, we can fill houses within 7 days. And what I put out, my build out, I get it back within 7 days. And I just keep doing that. And the constraint is obviously finding the leases, right? So my, my plan was to build it out, do as many as we can, use the cash flow to then obviously open up the kids' home And it may be because you want to do that, not because—

All right. So you have conflicting priorities. Okay. That's the issue. And so it's like, I think so. It's like it's a sequence thing, right? Like you have a thing that you're good at making money on and then you have a thing that you want to give back on. I would imagine the professionals one makes you more money than the kids one does. No, it doesn't. No, man. This thing is— Kids is that free time.

Kids. Kids is that 3 times, maybe 4 times. So, so I would make— so let's say, for example, what I make from 5 properties, I can make from 1 kid home. Okay.

So I stand by my original thing. Bridge this for the cash flow and then switch to the kids. Professionals, fill up your existing ones so that you don't— you're not going into debt and you're not going negative. And then basically the rest of your priorities going forward, you sunset that. It's like that was our legacy model. Now we do kids.

When you mean sunset, please elaborate what you're talking about.

What do you mean? Don't. Keep— don't keep growing that side of the business. The professionals, right? Fill up the ones you have because you have all these vacancies because you had to get the kids out. Fill it up really quickly, get the cash flow back up. And then if you can make more money with the kids thing and that's what you— you want to do it and you make more money, do that. But you got to get to there. Yeah, that's my two cents. Thank you. Can I throw in one more?

One more? Okay. Um, so in terms of Adam. So in terms of like your top 5 meta skills, what would you like?

Left field. Okay, got it. What—

so what are your top 5 meta skills you would learn that give the highest projected output in terms of increasing business value? I know leadership is one of them.

Yeah, um, I mean, I really think prioritization is the most important skill. Thank you, sir. Everyone here is limited. Yeah. So it's what you do with the limit. Thank you. You bet. Thank you, man. Kudos to the kids, the next set of kids, not the old ones. So as I was picking through Avatars and you're saying he has the kids thing and then he's got the professionals thing, I'm thinking like, how easy is it for him to get customers? What's the gross margin per customer? And are there lots of them? So it's like if you have a lot of people that you can get really easy, really quickly and make a lot of money, that's a good path. And so when he immediately said that he could do professionals really fast and easily, I was like, and that's obviously a lot of them, I was like, okay, this sounds like the right path. And so then I just asked that one last question, which was like, I'm assuming you make more money on the professionals. He was like, oh no, not at all. So that's what then basically redirected my attention to like, okay, well maybe this other path is okay and is the better long-term play. But we have to get there. And if we don't get to the future, then it's never gonna happen. And so then it just became a short-term cash flow bridge that he needed to create, which you could either get, you know, you get somebody to lend him money or things like that, which I don't prefer to do. But given the fact that it was real estate and he could just fill up apartment buildings and just kind of like move on and then just restart with new leases for the government program that he was placing children into, that felt like the best kind of two-step play. It's common that entrepreneurs will try and use one business to fund another business. It's often not a good idea. And it's usually just a massive distraction. And then the problem is that they can never turn off the thing that's funding it. And I'll say from my experience, the vast majority of the time, the thing that's funding it is the real business. And the other thing is some hobby that they think in their mind some way, someday might work. But the thing that just pays their bills, if they just focus on that one thing, it could be 10 times bigger. I mean, fundamentally, prioritization tells you what you're going to do with what you have. And so I can't think of something that's more important than that.

It's gonna be a hard one to follow. Uh, my name is Charlie Johnson. I don't even know how to follow that, to be fair. You set the bar, but yeah, it won't be quite as humorous. Uh, my name is Charlie Johnson. I help online trainers and personal trainers scale online. Uh, we do around $3.3 million at the moment, top line revenue. Profits $1.3 million. Based in Dubai, so we also don't pay tax. Cool. Um, our bottleneck at the moment is traffic and brand awareness. I don't know whether we focus more on scaling from a paid ads perspective or focusing more on organic? We're really trying to hammer organic at the moment, building a media team around me with YouTube, podcasts, all the other platforms. I've done over 7,000 posts on Instagram, incredibly consistent on social media. So that's not an issue from a workflow point of view. And if it's an ad strategy, what's the best type of strategy you see to scale these types of businesses? Is it a VSL or— what we currently do is we run ads to a lead magnet funnel where we dial them and then convert them off backend.

What's the issue with doing more of that?

The ROAS at the moment is only like 2 to 1, so I need to try and optimize that. What's CAC? 1400. LTV is like 4.5.

You just have to make more. Yeah. I don't think there's anything wrong with your existing. So this is a good meta one. So we, you know, fortunately, unfortunately, we look at a lot of different businesses and like we know the numbers for a lot of different industries. And you'd be surprised at how similar CAC is between industries. And so as much as people will generally obsess about like, I just need to get more leads, I just need to get cheaper leads, it's almost never really the solution. Once you have some working way to acquire customers, which you obviously do, it's usually about extending LTV. And that's where you see the huge disparity between businesses. Like I think I made a short about this, but like Starbucks LTV is $14,000 per customer. And so like the coffee guy down the street's like, I just need cheaper leads. It's like, dude, Starbucks is making 14 grand, they spend whatever they want. And so the companies that make just tons and tons of money just find ways to get customers to never leave and then they just basically keep printing money as soon as they acquire them. And so what the game really then becomes is a cash flow management game so that you can spend as aggressively as you want to get customers that will never leave. And so that's why like you hear in the software world like, you know, 6-month, 3-month payback periods, things like that. And it probably doesn't resonate as much 'cause you're like, well, I make $4,500 and I spend $1,400. It's because people keep leaving out the back. And so from a Solve perspective, there's a couple of ways to look at it. Are you charging £4,500 upfront?

No, we have 3 tiers of program essentially. So we have a higher ticket one that's £35K, our mid-ticket one's £16K, and then a low ticket one that's £4K.

Yeah. And so front end's £4K and then they get ascended? Yeah, but we're not—

problem we have at the moment is we're not sending them through from the £4K one, which I think is what's screwing the LTV.

Yeah, so I don't think, so this is a great example. It's like, as much as this was like, should I do more organic or should I do more paid? I don't think that's the issue. I think basically figuring out the ascension links between each of the phases. But the real, I mean, that would be like first thing to do. But the second thing that I would do, which is like the long-term fix for the business, is we have to get the price, basically we have to get churn below 3% per month. And you can do it. You 100% can. So if you're below 3% per month, this business will just continue to grow. And so like, I would basically put all of my effort into doing that because you will never outsell bad churn. You'll always feel this like crippling anxiety of like, what happens if my ad account gets shut down? What if, you know, what if, you know, this happens? Because you never feel like you're really building a permanent asset 'cause you're like 6 months away from no customers. And so like, it's worth taking the time to solve that problem in the beginning, especially to be fair, the smaller you are, the easier it is to solve. The bigger you are, the harder it is. So it's like, solve it now, get it right, and then just, it'll just keep stacking. Cool. From a churn perspective, it's usually gonna be around pricing. And so what I found in that space is that the price points that like have the lowest churn are between like $600 and $1,200 a month for fitness trainers, et cetera. And there's usually some component of, you know, 2 times a year, 3 times a year they get to meet up. And beyond that, I don't think you need a huge amount more delivery besides whatever kind of one-to-many thing that you're doing. If they have, at $600 a month, it's not that hard to justify, but that's what continues to stack.

Would you almost look to reduce the price point at a certain point once they're in the programs? Like the way we structure at the moment, it's almost like—

I'll go big headlong tail. So like $3K down, $600 a month. $1,500 a month after that. So yeah, so we do something similar.

We do like an accelerator for like 3, 4 months where they pay upfront like a big chunk and then like a lower price.

I prefer pay and then pay immediately. Okay. So it's like rather than, you know, like $5K, I'd rather get, as crazy as this sounds, I'd rather get $3,500 and then have them pay $500 3 times in a row, whatever the math works out. Yeah, that works out to $5K. I would rather that because I don't want to have a second sale for Ascension because then I'll lose whatever, you know, conversion percentage. So I'd rather just get like $3,500, you're invested. Now we start at $500 a month. Does that make sense?

Yeah, that's sort of what we do with our high-stick program.

Great. Does that one churn less than the other ones?

Yes, 95% retention, year on year. But then I think that's also the caliber of person we're dealing with has less of a financial obligation.

When you pay $3,500, the $600 doesn't seem that bad. That's what I would do. I think you're doing fine on the advertising side. $1,400 CAC's fine. If anything, it's good. So I don't think you should obsess on that.

So literally just try and pull— churn averages, I think like 13% last few months, which is way too high.

You gotta cut it by 3/4. That's where you attack. Part of it's gonna be a pricing thing. Part of it's gonna be expectation setting on the onboarding call. And sometimes a little bit of it is the marketing and how they're getting sold. As in like overselling? Yeah. And also probably just customer avatar, like making sure that you're not taking people who want to start, you know, fitness training businesses, but people who already have training businesses.

So that's the challenge we found is that a lot of, say, from the ad traffic comes through from the beginners rather than— we had a lot of people at the beginning who were advanced, who came from my organic warm audience. Yeah.

And they're the best saturated that. Yeah. So you disqualify customers. Okay. So it just means that you don't take some people's money. Cool. And if you tweak the marketing so that the messaging is clearer, you will attract more of those people. Just being like, this is only for people who, and then you keep going into the ad, you'll get more of those.

To be more clear in the ad narrative in terms of—

That you must have these things in order to do it. If not, watch my free shit. Okay. Cool. Awesome. Thank you. Yeah, you bet. Rock and roll. You know, this is a business that is very sales and marketing driven, but if you want to get really big in that world, really any world, you have to keep customers. And so that business, you can either sell more customers year over year over year knowing that they're going to fall out the back, or just take the extra year or two and fix the churn in the core thing. Now, my caveat is that Will you ever eliminate churn in that business? No, but you can dramatically reduce it. It's not going to be the same as a CRM business, right? It'll just be worse than that, but better than what he's got. Right. And so that by fixing it for a year would then allow him year over year over year to have consistent growth rather than always having to be worried about where his, you know, his next ad campaign is going to be doing. It gives more stability in the business, increases cash flow, increases margins, and And fundamentally, it just makes it a more enjoyable business. Hey, Alex. Thank you.

This is an amazing couple days.

Awesome. Thank you. Thank you, guys.

My name is Joel McDonald. We sell a travel coaching program. We help travelers—

I don't know, 40 sales a month. You did 150 sales in December and had a record month using the Black Friday play, doing a giveaway.

Yes. Yeah.

And then you got the bigger group that's— half your revenue doing $180,000 a month, 6,000 members at 30, right? Exactly. And then you have your higher ticket.

Okay. Yeah. So that we feel very good about, especially now we've got a lot more clarity. We're on trajectory to hit 10 and actually a lot of clarity to hit $15 million this year. Cool. The biggest thing, and it's not necessarily what's stopping us, but what has us really nervous is we've kind of got a— we've got all of our eggs in one basket, and that's our, you know, we're 95% dependent on Meta advertising, which works great. We've got it pretty under control, but that could disappear at any moment. My thought is diversification. I mean, we could do other paid channels. Those are a lot more expensive. Um, I'd like to diversify a little more with affiliates. That represents about— we've got an aggressive program. It pays $5 to $7 per click. All right. But it's like 1% of our revenue. What you've— you've done reels and topics on, you know, creative ways to do affiliates. A, do you think that's a best way to diversify? And B, if so, what are some out-of-the-box strategies to kickstart that?

Big picture, you'll never feel like the business is solid until you find out how to get people to not leave. Everything else is window dressing. Um, in terms of acquisition, uh, I would rather you go from paid Meta ads to adding in paid YouTube ads than trying to go a whole new method for affiliates or a whole new method for content, um, as like your primary kind of like new investment. And so I would probably just go YouTube ads as my kind of like next thing. And you're knocking on the door of a million a month. So you're— it's about that time. Does that make sense? Cool. That's what I would do. All right, thank you. Easy peasy. So, uh, this gentleman trying to go from, you know, $6 million to over $1 million a month. So he's right here, right? And he— his current constraint is that lead flow is volatile because he only has one way to get customers. And so to graduate, he has to fund his second acquisition channel with for what I, I like doing. And he actually just ran the play. And so when I started this, I was like, you just ran this referral process play, which he had just done to generate more cash flow and then segment long-term lead nurture by lead scoring and then pick the most similar platform, which in this instance was go from paid ads on Meta to go to paid ads on YouTube. And so that was the most similar thing that he could do to get more customers. And so fundamentally, that's all I did was basically walk him through what His current constraint was how to graduate for it at this level. And if you want a personalized version of this to know exactly where you're at and know what constraints you have and how to graduate, this scaling map's absolutely free. Just go to acquisition.com/roadmap. And on the thank you page, if you'd like to have my team tell you where you're at and kind of apply this to the business rather than having just kind of like the automated thing, then book a call. We'd love to meet you. Otherwise, Enjoy.

Hi, I'm Mauricio. I sell corporate training focused on soft skills to large companies through—

Who on soft skills? What? You help who do soft skills?

I train companies in soft skills.

Okay, got it.

Leadership and coaching, etc. We do $1.3 million in revenue on a project-based model. I would like to be at $100 million subscription-based model. And what's stopping me is a project-based model is more lucrative. So I feel like stuck with these whales. Okay. That doesn't want the subscription model.

So project-based isn't bad. You just need to demonstrate. So this is the concept of recurring versus reoccurring, right? And so if you go project to project, there's nothing wrong with that as long as you can demonstrate that you have a high renewal rate between those things. And so I'm, in general, I do like having kind of project-based stuff because typically you can price 2 to 3 times higher than you can for a subscription. And so you have usually way better cash flow 'cause people are willing to commit to a certain amount for this period of time versus this forever, which is what a subscription feels like even though realistically we know that it's not that case. So you want to get to a $100 million subscription business. You have a $1.3 million non-subscription business. I would say I don't think the limiter to your business is that. So we'd have to dive a level deeper and say what's stopping you from getting to $10 million with your current model?

Yes, we are now aiming to smaller companies on the subscription base. And the whales are staying the same. Basically. So that's our strategy to like, this year we're aiming for a 40% of subscription, subscription-based model from all the revenue.

40? 40%, yes. Is subscription already, or that's the goal?

No, it's the aim of this.

Okay, got it. And you said you have whales? Yes. And you have small companies? Smaller, yes. What percentage of companies are in either bucket revenue-wise?

Nowadays it's like 80-20. So the whales have, are almost everyone. You just do more whales.

Okay. I'm serious. So how do you get whales?

We have an outbound sales team. Okay. And we are pretty good at it. So we get into a whale and then sell it to more departments.

Yeah, of course. So, What stops— so what's the limiter on your outbound team? People. Okay. HR. HR. So recruiting? Yeah. Okay, got it. So if you had twice the outbound team you have now with equal skill, would your business double? Yes. Great. So what stops you from doing that? You don't have a recruiter? Yes, but it doesn't work. Okay, so you have a bad recruiter? Yes. Okay. So hopefully this like line of reasoning was fun for everyone, but that's what we have to work on. Like, you don't even, like the rest of the stuff that we talked about is basically irrelevant. You need to go get another recruiter who's good and can get you outbound guys basically. And you will continue, like my advice is to continue increasing the outbound team until you can't handle the sales anymore. Okay. That's it. And Whales, and Whales fundamentally, like it's not uncommon for them to be work on projects for, Just extend the terms. So if you sign, you know, they're currently doing 6-month engagements, try go for 12 or 18-month engagements. Okay. Does that make sense? Yes. Yeah. And that's just as valuable. Like if you have like a 5-year contract with a Fortune 500, it's recurring. As far as like an investor would be concerned, it's the same thing. Makes sense? Yes. All right. Rock and roll. Hopefully it's simpler. Hey guys, real quick. This podcast only grows from word of mouth. Quite literally. There's no other way to grow a podcast than word of mouth. If there's some element of this that you think somebody else should hear, or would be relevant to them, it would mean the world to me if you shared this via text, via Instagram, via DM, via whatever way you like to share stuff with people you love. Thank you. Yes, sir.

Hi, Alex. Hello. My name is Don. I sell Christmas light installation to home and business owners. Last year we did $450K. Sweet. And this year I'd like to be at $2 million. Awesome. What's stopping me is that I still have prices when I started the business 2 years ago. For some businesses or for some clients. So I'd like to know, how can I increase the perceived value so that I could increase my prices while still doing the same thing?

Can you just say a higher number when you get to the asking for money part?

So for example, if I've been charging a house $1,000 for an install and takedown—

No, I understand. I understand. I'm saying like, what stops you from just changing nothing? And just saying a higher price.

Like this year it'll be 2,000. Yeah. I guess nothing, but the perceived value.

That feels like the easiest thing to do.

Yeah. So I wanted to know like if there's a script or anything, how—

Okay, so a couple of things. So one is that it feels like you need to be sold more than anything, which like, great, but are you good at it? Good at sales? No, no. Christmas tree lights. Oh yeah, yeah. Okay, good. We're the best. So great. So then you can, you can charge whatever you want. In terms of, has the business all come from referrals?

From Google leads and referrals. Okay, got it.

So you want to get to $2 million. You raising your prices, what percentage do you want to raise them? Probably 50%. Okay, got it. So the thing is, is like if you want to raise them 50%, I'll bet you got so much more room than that. Because you seem not as convicted. So I'll bet you there's like a ton of room. Okay, so you're charging. Okay, let's just— let's start with 50 and then bump it again another 50 if basically you have no change in close rates. And I would like you to keep bumping it by 50% until you see that you're making less money. Got it. That sound okay? It's that simple. Okay, that sounds great. I love this. Is that as good for you as it was for me? I'm kidding. That's what your partner said. Um, there you go. Um, thank you. Um, that's also what she said. So, um, the, uh, okay, so I'll give you a little script for the people who are old that are going to come back, because I know some of them are going to recur, is that, um, I would give them a heads up ahead of time and say, hey, just so you know, we're raising prices on all these new Crazy people who are trying to give us money. But since you're a new— an old OG, if you want, to reward you for being a previous customer, I'll honor your old price as long as you buy now for Christmas. Otherwise, you'll get the new price. So it's like I'm giving you the love now because I'm like, hey, I'm letting you in, but then you can front forward. You can pull cash flow forward. That make sense? Perfect. And then everybody else just raise the price and you'll feel okay about it because you'll have a full bank account. Right. Okay. Thank you. So pricing is one of those weird dogmatic things that founders have, these like deep-seated beliefs about it. And I think there's, because there's a lot of fear, right? No one wants rejection. Everyone fears that their business is going to go away. And it's usually because you think that like, oh, if I, you know, change the price to one customer, everything's going to change. It's like, well, if you you aren't selling, then you can just change the price back next week. But the risk of not testing your pricing is so much greater than the risk of keeping it the same. Like, think about it at its absolute extreme. If you kept your business prices the same forever, you would eventually go out of business. Think about how crazy that is, because over time prices inflate, right? Costs go up. And so you have to be able to adjust prices. If you haven't adjusted your price in the last 4 years, you're making 30%, 40% less profit for sure, bar none, in terms on a per unit basis. So like, why wouldn't you do that? And so with this particular guy, he wanted some like strategy to get his head around, you know, I want to charge more. And so how do we increase the value? But he's closing a ton of people and he's obviously doing a good job. And so the easiest way to price higher is to just raise the price. And I just gave him a little tactic, which is you want to reward existing customers. But the thing is, you can reward them whatever you want. So you can reward them by giving them early ability to pay you. You can give them a discount for 3 months if it's a recurring membership. So it's like, hey, I'm changing the prices, you know, today, effective now, but I'm grandfathering you in for 3 months, right? Rather than forever. Right. So as long as you give them some consideration, it kind of like smooths things out and it's easier for a discount to go away than a price to go up. And so increase the price, give them the discount, say you grandfather discount for 3 months or 6 months, and then the price goes up. So what Don was struggling with is an issue that I cover in the $100 Million Offers book. So he was dealing with a virtuous versus vicious cycle of price. And so there's always this fear of like, okay, well, if I decrease my price, maybe I'll make more money. But when you decrease your price, you decrease your client's emotional investments, you decrease their perceived value. You decrease the results they get, you decrease— you increase their demandingness towards you. They're more of a pain. You decrease your revenue per customer so you have less money to actually like do the thing that you deliver. You have less profit, less value for yourself, less perception of impact, lower service levels, and your whole sales team, which sometimes when you start, it's just you, your personal conviction drops. So wouldn't it be so much better to increase their emotional investment, increase results, increase demandingness, Increase the revenue for fulfillment so you can get better talent and have more profit, increase your own perception of self, increase the service levels you have, increase the impact and increase your own conviction? Yeah, probably. And so the thing is, is that changing your prices is the single easiest thing that you can do operationally that can make you more money. And you should always exhaust that as fast as you can before thinking about other things. Because literally the only thing you need to do when you raise your prices is just when you get to the end of the sale, Say a different number. Hey, Alex. My name's Alex. What's up? Good to meet you. We sell residential window replacements to homeowners. Okay. We did $84 million in revenue last year. Residential? Windows. To homeowners? To homeowners. Okay, got it. $84. Okay. Yep. Today we have had a Google Sheets empire and a— A what empire? A Google Sheets empire. Oh, Google Sheets empire. And we're starting to build out a HubSpot. We spent the last few months building out the frameworks of our HubSpot. Are you involved in it? Very involved. Okay, good. That's just like, yeah, biggest mistakes. So that's what I wanted to ask you about because I know you just moved all your portfolio companies to HubSpot. Who said that? You. When? On one of your podcasts. Jesus. It's like every— it's like I say it on one podcast like 4 years ago. It's like everyone— it was like the best HubSpot endorsement ever. Anyways, keep going. Yeah, yeah. The question I have is, so we're going to roll this out across 16 offices, hopefully a hard launch March 1st. I don't want to pay the ignorance tax if I don't have to. So what advice would you have? Stake, basically you just need like, you're CEO of IT for basically this whole quarter. It's the easiest way to say it. And so I would have really rapid feedback loops with each of the department heads. If you have functional heads at the holding company, and then you'd want to have basically separate lines of communication for all the location heads. So I think about, do you use Slack or something like that? Just Voxer, yeah. Really? Yeah. Geez. Okay. Yeah, so I'd want to have basically different threads by function. So one is the actual function. So people who are handling sales, people handling marketing, and I'd have the leaders there. And then I still want, like, you basically want the different slices, basically lines of communication to the different slices of the org so that you can get as much transparency top-down into how it's working for them and making their life easier. And then that way you can triage Basically which, 'cause you have limited resources in terms of which of these bugs are we gonna fix? You know, which process flow sucks? And then you can basically stack order which of these things has the highest driver for revenue. But you can't really do it appropriately unless you basically can drink in all that information. And as, are you CEO? No, I'm— Okay. Yeah, but— Fine, but you're in charge of it. So you're CEO of this. So that's basically, it's just like you need to eat, breathe, Breathe and sleep this stuff. Yeah. Oh, that's helpful. Thank you. Yeah. Just like it's okay that it is unscalable. Got it. But you have to do that in order to make it scalable. Yeah. Thank you. Yeah, you bet.

Hi, my name is Julie Tietvelder, and we sell travel coaching to people who want to travel more frequently or more luxuriously for free or almost free. You already know all our business stuff. So my question is kind of piggybacking on what you were talking about earlier with your 6 pages of ideas. We're in a room full of people that are always trying to optimize as well as always has new ideas. Yeah, we had an idea for a B2B offer for adding a $50K concierge offer for businesses that are already spending half a million or more on travel annually. So when is it appropriate to add a new offer while you're already like still working and optimizing your— Yeah, I just wouldn't. Sorry?

I just wouldn't. You would? I wouldn't do it. Okay. You're gonna go from 6 to 15 this year. Do that. Okay. Like, I'm not trying to be like short to like— these are the mistakes that we make. There will literally always be money on the table. Like, you can't sell everything as much as you want to. Right. Like, you just can't. And the thing is, is like, if, so said differently, if this company can go from 6 to 15 and the next year goes from 15 to 30 and the next year goes from 30 to 60, if you hit the same numbers and have 2 different product lines versus 1, which would you rather have? 1, right? And I'll also tell you that if you just do it with 1, you'll increase the likelihood, not decrease the likelihood that that occurs. And so like, that's all the, that's the focus and discipline stuff that you hear all the Steve Jobs and all that. Like, it's just, it's, he called it the quantity of unbelievable ideas that you know you could crush that you say no to. That's what focus is.

So how do you discern when to pursue something off of that 6-page list?

When we have bandwidth. Which if you're continually, like if you're basically doubling every year, Your bandwidth is getting eaten up by doubling. So just double. Basically it's like, why would we do it? Okay, thank you. Yeah. But if it's like, I wanna grow, why would I, like, why, like, then let's just grow with the thing that already is working and is really profitable and we know everything about it rather than this, you know, crazy girl in the red dress that like walking by and like has a crazy boyfriend, has crabs. You're like, what's going on? You know? So like, why bother? It's like, we have this girl, she loves us, she knows me, I know her, let's go. I define focus as the quality and quantity of things that I say no to. And so if you think about commitment, the ultimate commitment is the elimination of alternatives. You have nothing that you can do besides that one thing. That is the ultimate fo— like the perfectly focused person who plays video games would do nothing but play video games. Everything that is not that decreases his focus. And so focus isn't like, are you focused or not, but how focused are you, right? And so the idea is the more things we eliminate, the more focused we are. And so that is always my constant reminder, especially the Steve Jobs quote, because he's like, it has to be something that you want to do in your core, you know you could crush, and you still have to say no. Yes, sir. Hey, Alex. Okay, the Coaching Federation internationally, you have the certification, 18 people is the cap. How do we get around it? Let's go.

So, first of all, thank you. You and your team for the things that you are doing. No, you bet. Yeah, my name is Pavlas. This is what I'm doing that you said already. And for the, I guess, 3 or 4 years, seems like I just kind of lost something, like why or stuff like this. 2.5, maybe already 3 years ago, we planned to go from what I have right now because it's a one-man company, just a few team members. Now it's $460K in revenue the last year and the goal was $2.3M. Maybe this is the why I lost this on the way. So I just wanted to know what's your why, why you are doing what you are doing.

I like working. I'm dead— like, I spent a year thinking about that question when I had enough money to do whatever I wanted and just like could just live on Treasury bills for the rest of my life. When I looked back on the days that I enjoyed most, they had 3 things in common. I worked out. I ate with people that I liked, and I worked hard and had something to show for it and had nothing left in the tank. And so once I realized that those were the days that I enjoyed the most, then I made it my goal to live as many of those days in a row as I could. And the way that I live my life bothers a lot of people, and that's okay. And so I think, I mean, I, I got that advice when I was 22 years old from, I'll just, whatever, from a person in my past. And I'd had a good weekend and I started work and she said, "You're in a good mood." And I was like, "Yeah, just had a good weekend." She was like, "I'm pretty sure the secret to happiness is living as many days in a row like that as you can." And that was like the closest to operationalizing kind of joy that I'd ever heard. And so I have just stuck with that. And I think that the things that bring you joy will change over time. But I think that structure of just trying to find what that perfect day is and living it as many days in a row as you can is kind of the way to do it. That's how I do it. You can do whatever you want. Fine. Yeah. Thank you. As a side note, for those of you who feel like you have lost your passion for your prospect, and I'll give you a simple example. Like, I used to sell weight loss to women between the age of 25 and 55. And at a certain point, I just really stopped caring. They were like, "Oh my God, my life changed forever." And I was like, "I know, you had a calorie deficit and you moved. Like, yes, that's how that works." And I would have to kind of like fake myself into feeling excited about it. And it really bothered me 'cause I was like, I quit my job to do something that I loved and I don't really care about this. I ended up loving business more than I loved weight loss and then I fell into that. But I had a friend who was a personal trainer who quit being a personal trainer and started a cookie business. Brick and mortar, big cookie store, like did it right. And I remember being like, "Are you passionate about cookies?" And he was like, "Not really." And I was like, but he crushed it. He did a really good job. Everything was like really tight. And what I realized was that he was passionate about doing things well. Rather than the cookie business. And once I realized that, I was like, oh, I don't have to be passionate about weight loss, but I can be passionate about being good. And just saying like, when I do things, I will do them well. And I think that has been something that has helped me stay motivated in times when I feel less so. Paul had kind of fallen out of love a little bit with his business, which is— I just want to say, if you're an entrepreneur, I get it and you're not alone. All right. Like, it's It's very common. You've been, you know, you're getting beat up for 2 years, 3 years, 5 years. You're trying to support your family. And, you know, at some point you just feel like it's just the amount of crap that you have to deal with on a regular basis. You almost just like it's no longer romantic anymore. But the thing that really changed my perspective on this was leveling up the ideal that I wanted to be loyal to. Right? So originally it was like, I want to be loyal to my interest in weight loss or my passion in weight loss and fitness. But over time, I just found new interests. And for me, from a forever perspective, I always want to be excellent. And so that becomes a hypothetical ideal that I can always chase and never achieve. So like, I want to be great at what I do and do excellent work. And so every day I can improve towards that ideal, independent of whether I'm baking cookies or selling weight loss or doing IT services or cybersecurity or coding for software or sweeping floors. Like, it's a very trite statement of how you do one thing is how you do everything, because I don't necessarily agree with that. But how you do the things you care about is how you do the things you care about.

Hey, Alex. Hello. My name is Heather. I own a consulting firm called Channel Maven. Okay. We help large IT companies sell better through and with their partners. Okay. Um, I— revenue was $3.6 million. I sold it in 2021. Congrats. Thanks. Ran marketing for the company that acquired us. They called it an aqua hire. Yeah. Um, and convinced the board 6 months ago that I was done and they should give me the name back. So, okay, got the name, got the IP. I get to start over, not make the mistakes I made before. The market has shrunk, so that channel role is being pushed out. Um, and when I started it, there were 5 consulting companies I competed with. Now there are probably 200. Okay. Um, do I focus more— like, channel marketing is probably what I'm best known for. Do I focus more on that in this industry, or do I go just B2B and like help kitchen and bath companies sell through dealers or automotive?

You say channel— yeah, explain, dial into the channel, channel sales that you're talking about.

Yeah, so a large IT company sells direct, but they also sell through hundreds of thousands of mom-and-pop channel partners or Accenture or now Marketplace. So like affiliates? Yeah.

Got it. Okay. So you're an affiliate expert for big IT companies and you have a network of people that can do basically sell their services for them with a markup. Yeah.

I mean, I basically made an announcement on LinkedIn that I was back and did $360K in 4 months.

That's awesome. Yeah. Thanks. So the question is, well, I mean, it sounds like you did okay with your announcement. Um, why do you feel like you can't outcompete the other people?

Um, I just feel like my champions, the, the 14,000 people that follow me on LinkedIn, are starting to phase out a bit, and it's just gotten super crowded.

And this is the channel part. So the crowded part doesn't bother me at all. Yeah, because that just means that there's lots of demand.

My clients are the tech company, so HP, Google.

Yeah, so the 14,000 people, you have a lot of high-up people in those companies who follow you. Yeah. I mean, you could do either path, but I mean, it's a good question. I think it's more the statements that would initially jar me of like, it's saturated, I think it's going away, things like that. Because my big questions are always logic, evidence, utility. So, What does that mean? Like, define that for me. How do you know that? And so what? Logic, evidence, utility. So when I asked channel partners, like, please define that for me, it's like, okay, that's affiliates. How do you know that they are going down? Like, how do you know that?

They're all calling me asking if I know of jobs and I'm tracking how long they're on the market and on average it's about 11 months.

Who's on the market for a lot of—

they call it a channel chief, so it's like chief partner officer.

Okay, and those people are looking for jobs?

Yeah, because they're all, they're all getting let go. So then the VP of channel sales reports to the CSO, the VP of channel marketing reports to the CMO. Like, that level is just getting—

and when you say a lot of people reached out to you, like, how many is that in the last year?

Yeah. Because I was still in the channel when the company acquired us. I'd say probably 40 people.

Okay. The big conflicting data point I have is that you like made a post and made $360 grand. Yeah. Yeah. So just focus. So just shut up and focus. Yeah. No, I mean, it's real though. But I think like, I'll tell you what I like, if I'm in your shoes, I get excited by this stuff. Maybe because I'm broken on the inside. Who knows? But like, I am you.

I work. I have little kids 50% of the time. I work nonstop when they're not with me.

Yeah. And like, I see everyone bleeding and I'm like, let's, let's finish them off. You know what I mean? Like, they didn't deserve to be in business to begin with. And I will make sure that everyone knows. And so if you have this in and you're better and you're seen as a market leader, if things are consolidating, for example, then it means that like, as long as if the industry isn't going away, but it's consolidating, then it means a winner take all. So it just means the stakes got higher. Yeah. Which if you're better, that's a good thing. Awesome.

Thank you.

No, you bet. What Heather presented with is super important because a lot of businesses deal with this same issue, which is the perception that the market's getting harder and the perception that saturation has gone up. And those both may be true. And so what? Right? And so the thing is, is that like business pretty much always gets harder and in the Opportunities where you have— in the sectors where there's opportunity, more fish are going to come, right? More sharks are going to enter. But like, that's not always a reason to not pursue it. It just means that you have more competition. You have to be better. And so in some ways, I can see lots of demand as a big market to go after. And if you're good, there's just more for you. Now, I want to be clear, there's a difference between consolidation and degradation. So a degrading industry would be like newspapers, right? They're getting smaller and smaller every year. But a consolidating industry is when the same amount of demand's there, it's just aggregating into fewer, fewer customers. And so given the fact that Heather is better at high-level deals with these bigger companies, it felt like a good, a good risk-adjusted move for her to go after that kind of big pie because she already had a company, she'd already sold it, she had good connections there. She immediately made a post and made, you know, $300,000, $400,000. To me, it's like she's got a good reputation, obviously. Like, it seems as though she's doing a good job. And so I have a hard time telling someone to start brand new in totally different industries, totally different spaces where they don't know the devil that's going to come. Whereas here it's the devil she knows because she gets to harness the compounding benefit of being in industry for a long time, is that you know how it works and you know how the game is played. And so if you look at some of the richest people in the world, it's people who've just been in the same industry for their whole careers. And so it's really hard for me to give someone advice to be like, yeah, just change it.

Hey Alex, my name is Chris and I have a question about a business I'm starting soon. So I have no numbers right now. For my background, I'm a physiotherapist and chiropractor, have an academy where I teach medical professionals in my own concept called Crack and Move. And I'm doing social media. Okay. And I invented a tool where you can crack yourself, your back. Like self-crack, if you will. Self-crack, yeah. More like, BlackRoll posture roll, but really intense and good. And you can use it as a customer for your own, for your better posture and pain relief. But also the professional, for especially some small women have with some techniques problems, you can go. You're a big guy, so when I want to correct you, I have to need a— I'm a small guy, so sometimes it's really hard. And I would like to know, would you focus on one group for selling B2C? For example, just a customer for the problem solve of cracking themselves and with the posture program and everything, or just the medicals. And I have the medicals also in my academy with affiliate, or both.

So you are a chiropractor? Yeah. And you no longer have your practice?

I can if I want. I have a waiting list and—

But you have a practice? Yeah, I have it. And then you also have an academy where you train other chiropractors?

Yes, in my concept. Yes.

And you also want to start a physical products business.

Yeah, because of skating.

Because you don't want to leave money on the table. So, okay. Um, what's revenue right now?

Um, with my academy, I started one year ago and we have 500K.

So you just started it a year ago? Yeah. Why are you starting another business?

Because it solves some problems and I found out because I have a—

Why not sell newspapers? You know what I mean? Like sell orange juice, people are thirsty. I could. Right. No, I'm being real.

Because I'm maybe a social media, I have an audience, I have customers who are a waiting list. I have the problem that many people want a treatment I can't give them. So I built some specialist in them. So you have two businesses.

Yeah. And you would have a third business. And it's a physical product, it's a totally different business.

Yeah, but I have some partners in it, so I just have to do the marketing and the development of the tool itself. And we already did it, so it's ready to launch. But the problem is, yeah, it's maybe, you know, sometimes it's boring just to do one thing at once. But business-wise, maybe it's better. What's your goal? Good question. Of course, I want to make money, but of course, I want to do very nice products who have a nice impact of the—

Yeah, but what do you want to have happen from that?

I think the focus. So that's the problem. You want focus?

You want to do that by doing more things?

Yeah, and the problem is that's so combined to my brand. So, I have the problem that I can't, I have so many customers, I can't offer them anything. So, I have limited time with my own treatments. So, I need time to develop some—

Well, you have the academy. Sorry? You have the academy though.

Yeah, but it's very hard to teach them my concept because it takes half a year so they can implement it in their own office. So I try to reduce this as a hybrid model with online and everything, but it takes time because of the brand protection quality because I send them my customers and when my customers go to them, I want that high treatment, high-end treatment. And the problem is that the onboarding takes so long that the customers want the treatment and I have no time. The people I'm teaching need time to learn it and get expertise.

You're saying it takes time to build a big business. Yeah, yeah, I believe you.

Yeah, but the problem is the social media makes all the, um, cast, all the followers just—

yeah, let me, let me, let me help for a second. So sorry, you're good, man. Uh, you're also like probably, you know, everyone's laughing, but like you're probably one out of four, one out of three of you here is in this exact same boat. So hope so. Uh, here's the thing. The opportunity will only get bigger, not smaller. So the rush that you have is a rush to do a smaller version of what you want. Because if you get bigger on social media, you will have more customers who want to buy your thing. Yeah. Right?

Yeah. The problem is that the customers are now a little bit sad because I have no offer for them.

Oh no. I have no offer. I had nothing to sell anyone for years. Okay, so point being, thing is, I don't, I don't actually think I'm going to convince you. I think you're going to do it. No, I'm serious. So I don't even know if there's a point. You want to sell your thing, you want to sell your widget. Yeah. So what am I going to do?

More like a little advice of focusing on just the professional.

You want me to tell you how to focus? How would you—

You're doing several things at once, right?

What? No. You're also doing something. I have acquisition.com.

Yeah, you just have all the—

So just build a team. I own one business. Yeah. You want to be CEO of multiple. There's a difference between ownership. I also own stocks in zillions of companies.

Are those different businesses at all? What? Okay, product. So your book is also different.

No. So, no, you have— No, this is important. This is good. It's just for mine. For everybody. There's a difference between owning something and being CEO and operator. You can only really operate one thing. That's it. If I buy stock in Apple, I'm an owner. I don't do anything, but I'm an owner. Does that make— do you get the difference here? Yeah. You're like, well, I'm gonna be Mark. So like the, where you would get me if you wanted to was school, I'm the face of. But when I did that deal, I said, I will change nothing about what I do. So my regular day must remain the same in order for me to do this deal. I'm gonna continue to make content. I'm gonna continue to record stuff. And then all I'm gonna do is point in a different direction. Yeah. That's it. So the pointing is a copy paste on a link. Everything else remained the same. So I boil this down to what does this change about what I do? And so the reason that this is very difficult is that you're gonna start another business and it's gonna change what you do. Ah, okay.

So outsourcing the things I'm not doing in my daily business when I'm starting a different business. For example, the product, I'm just doing my marketing, the development I'm doing also, I did it and everything else. So like targeting the group and strategies, I don't have any clue. Oh, I should not. So I'm here just, I'm taking the question. All right.

I don't know what your question is anymore.

It's more like medical, what you focus on in this part when you have a selling group.

I would take your 500 medical people and be like, how do I go from 500,000 in my first year to 5 million? That's what I would do. You already have something that works. You already have a following of people who have this thing. If you want, you can sell through them as an affiliate base. Then you have one business.

Okay, that's a good answer. Great.

Thanks a lot. Take care. Yeah, I had no idea where this was gonna go, uh, but it seemed like this guy had a lot of stuff going on. This, this was a classic like entrepreneur ADD rush issue. And so fundamentally, I think the reason that entrepreneurs end up opening up multiple things is because we're all in a rush. We all think that like somehow an opportunity is going to disappear. So there's two things. Number one is that opportunities do disappear, but then other opportunities come. So there will not be a shortage of opportunities if you know how, if The better you understand the game of business, the more opportunities will come your way that you'll have to learn how to say no to. There will always be opportunities. That is a promise. I don't promise often. You can take that to the bank. There will always be opportunities. The next issue is the timing around this, which is some opportunities actually just get better with time. And so I'll give you a perfect example. So if I say no to people introducing me to people today, and the reason they're introducing me is because I have a big business, If I continue to grow my business, the people who wanted to introduce me to these other people today will want to still introduce me to those people tomorrow. But I'll also unlock the people that now that my business is bigger will want to also introduce me to even more people. So the opportunity grows by me not taking up the opportunity. And so the thing is, is that he's got this brand, he's grown it a little bit, and so he wants to basically monetize it because he's like, some people want to buy something from me. Well, welcome to advertising. Right? But the point is, is that those people aren't going to go anywhere. And maybe if even if those specific people go somewhere, if the brand doubles, he'll have more people that'll come up. That's the new opportunities will present themselves. But the thing is, is that you have limited resources and bandwidth. And so we have to allocate that to the highest return opportunity. And if he in the first year of a new business does $500,000, probably very profitably, I would have a hard time being like, yeah, now a year later, let's start another business. And I only say that because I've only done it every other time in my career and made a terrible mistake. And I— it's just like I'm so vehement about this particular mistake because I have, I have done it so many times. Can you hire a CEO for a business? Yes, but unlikely for a couple of reasons. So number one, he had a very small business. So the likely— the thing about the thing of it from a numbers standpoint, right? So let's say that he's got a business that does $500,000 a year, and let's say he's profiting $200,000 from it. Okay. So it's $200,000 in profit. What is he gonna pay a CEO to go like run this business? It's not even gonna be a CEO. It's gonna be like a manager kind of. And so it's like, okay, maybe you can pay $100,000 a year for someone to do that. But then there's $100,000 a year that's, that's leftover in profit. But that assumes that that person's gonna run it as well as he does as the founder. And that's unlikely. And so it's a lot, it's likely to have like a decrement in performance. Performance. So like, would it be fair to say a 20% decrease in performance? Yeah, that's fair. And guess what? Now it's break even. You make some money. So like, it's so small that unless you have a manager model that like is really built for that, like brick and mortar stores can sometimes work for things like that, it's unlikely to be able to find somebody who can take over like his influencer business. But can bigger businesses hire CEOs? Sure. But if you also look at the biggest businesses in the world, almost all of them are still founder-led. And I think that there's a little bit of a pendulum right now that's kind of swinging from like professional managers to the people who were like the heart and soul of the business. Because the one advantage that you have as a founder is that you wrote the rules so you know why they exist and you know how to break them and when to break them. And so when someone else takes over, they're like, well, these are the rules, but they never derive them from zero. And so if you know how the infrastructure was built, you know how to navigate it without messing up the business overall while still accomplishing the objective. So fundamentally, you make the system more adaptive because of your knowledge of it.

Hey, sir, my name is Joshua.

I'm actually a chiropractor as well, like Chris. I have a great product that I would love to tell you about. Self-cracking. Yeah, yeah, yeah, yeah. That's funny. Yeah. Yeah. So me and my wife, we run a family chiropractic center in the UK.

Cool. And our current revenue is around £750,000. We'd like to get it 2.3, perfect the model and then scale. Okay. This is what is currently my predicament. So we averaged 48 new clients per month last year consistently from two main channels, referral and Facebook, Meta.

Okay. What was the split?

So it's 35% referrals, 65% ads. Got it. Yeah. And, uh, excuse me, uh, so I'm a bit nervous.

Uh, thanks. You're 35/65 referral versus meta. You did 48 customers per month. Yeah. The issue that you have, 750, you want to get to 2.3. Yeah.

So my question, and I think what's stopping me, is determining where I should be focusing, because we get great results for clients, like they get— but, you know, even if they have an amazing result, like a lot of those clients leave. Yeah, which is fine.

Um, and then I mean, they need us.

It's terrible. Yeah. Yeah. And I'd love to have more clients that stay with us longer term from like a membership perspective. Yeah. Um, and when I looked at our churn retention rates, our gross retention rate is 47%, and then our, our net retention rate is 74%. So once we've done expansions, upsells, and everything else, it brings it up, but we still lose a lot of we leave a lot of money on the table on the— because we're losing— you lose half your customers, correct?

But you keep a little bit more revenue. So you're talking revenue retention versus— yeah.

So I'm like, which one do I focus on? Do we expand the marketing and just keep pumping the machine? Because I literally feel like you. I've got to a stage in my business where I'm still in the clinic, I'm still serving patients. I love my clients. Yeah. But like, you know, even if they've had an amazing change in their life, like, it's like you with the weight loss. Like, I've got to the point now where I'm like, man, like, this doesn't excite me anymore. Like, I know I can help serve more people if I can just become more of the owner rather than the operator. I've stepped my shifts down from, you know, 5 days a week to like 2 now.

And if you made more money, you'd definitely be happier. So not necessarily. That was a joke. Okay, so you have a location, you're doing 750. What does it cost to open a location? We own the building. Well, outside of real estate, what's the cost to outfit the location? Oh, outfit it.

So we So we're pretty lean. Like, we outfitted our current one. It was $100,000.

Okay, got it. What's profit?

We kind of keep it— we've kept it low the last few years, but we— yeah, it's like, it's like 13%. Okay. Yeah.

So you need to fix that. Yeah. Okay.

So it sounds like there's a lot of like, you know, owners' earnings and stuff. Well, what's SDE?

So seller discretionary earnings. So what do you make plus the profit of the business?

Uh, so me and my wife, we draw $100K. Uh-huh.

Each? No, total. Yeah. And you have 13% on $75K, so another $100K. So $200K on $750K. Yeah. Okay, got it. So whatever, that's, um, 20, 30, 30-ish margins. Okay, so you want to get to 2.3. Why 2.3?

Because this is what we worked out for our build, like our practice. We could, if we were at capacity.

Okay, so that location can to do $2.3 million. Okay, so the issues we have to solve, retaining customers. Now, if you keep 50% of customers, like if let's say you lose half your customers year one, but then after that they stay forever, that's fine. We just have, we just like, in next year you'll double. If that isn't the case, then, and you lose half of those customers the next year and then half of those the next year kind of thing, um, I would see what we could do to improve that. That being said, you're in a business that traditionally is marketing heavy. It's kind of like weight loss because like people get fixed and then they're like, yeah, deuces. So the, the strategy that I've seen that has worked really well in the chiro space is basically going significantly higher ticket, number one, and number two, niching down in terms of the different problems you solve. So this is like neuropathy, diabetes stuff, those types of like kind of segments. And having more targeted advertising for those avatars and selling significantly higher price packages. And that's typically how those businesses will get to like a few hundred thousand dollars a month just with one like very small store. And so typically that model is a, you run ads for some sort of free workshop, free dinners, free whatever.

This is pretty much how we did, we built our business so far. Like, because we realize—

so then what's the ticket price that you're charging? It's different based on the— well, you're selling 50 customers a month, then you're doing $60K. So the, the average is around—

like, it depends because every plan's different for the client. So we don't just give like a, here's your plan.

No, I know, but if I just did simple math, I'd say $60,000 a month, 50 new customers, average customer is $1,200. Yeah. Okay, so it's not the same model because I'm talking $10,000. Right. Does that make sense? Yeah. More. Yeah. So I think you have to get niched down in terms of— so like if you're doing all those things, I think you probably need to add a zero to your price tag.

We're already the most premium in our area.

Like, well, then it won't change. You'll still be the most premium. Okay.

And which one would you focus on then? Would you just focus on like just filling the front end or would you try and fix that? Because you talked about like fix the chair and like get it to less than free, like Or would you double down on both? Like, would that be—

Well, if you keep half your customers, you're pretty close to 3. Say again? You're pretty close to 3 if you keep half your customers. Right. When we track it, it varies between 3 and 7 depending on the month. I mean, are there things that you could do to improve it? Sure. I think you have more of a model issue. Okay. Like, you obviously can acquire customers and you're doing a decent enough job keeping them. If we need to improve how much money this thing makes, it's either a pricing thing Basically it's an offer and pricing thing, is that you need to charge more so that you can make more money. And then once you have the cash flow, then the expansion becomes pretty straightforward. That goes for basically everyone. Like a lot of times it's like, you know, we're doing 20% and you have what I would consider is like a normal business. It makes money, we work hard, but there's no, like, you never feel like you really can like get ahead. Yeah. It's usually 'cause there's some significant hole in the business and You're decent at both sides. And I think that the issue is that you just need to be making way more money. Okay. Which is I think you need to add more. Do you sell physical products and consumables?

Not really.

Do you sell like braces and orthotics?

In a care plan, it will be based on like, yeah, we do adjustments, massage.

It might be like traction, whatever. Yeah. So the key is there's two, two models that have worked really well. One is where you basically upsell them some sort of machine that they can take home and do other work, and there's a big markup on that. And the other is supplements, because you can sell a year's worth of supplements or 6 months worth of supplements up front, make a really good bit there, and it doesn't increase your operational drag at all because you just make the sale, give them the product. Okay, that makes sense. Yeah, but that's what I would add in to justify the higher price so that you could make more money per customer, which will then make you more money overall, which then fixes the model, which then allows you to scale. Gotcha. That make sense? Yeah. Cool. Thank you. Rock and roll. All right. Thank you. So he's kind of at the 5, getting to 10 employees. So he's at stage 4. And so if you look at his product, he said yes to anyone who would pay. And because he's getting feedback from so many different customers, he has created so many different products and services. There's basically too many different things. And so what I wanted him to do was get really clear on a higher level avatar. So specialized product. And price to serve niche-down customer. So I talk about the neuropathy and diabetes and kind of like thyroid. These are all like kind of sub-segments that allow a chiropractor to charge much higher rates. And so we had to reconfigure the offer and the avatar to charge more and then ultimately make significantly more profit for the business. Now, he had a decent, you know, marketing and sales machine, and I would say he had a decent delivery machine and as a result had decent margins. And so all we need to do is just change the offer and we could probably double or triple the business from that one move alone, which then opens up cash flow to then hire the people he needs to then be able to expand. Because at his current profitability, 13% margins after you have a manager, essentially, you know, it's not a, it's not a compelling model and that's with him running it. So you know, if you spend $100,000 and you make something that makes $90,000 with you running it in profit, not including the manager pay, which he was taking personally, it's not a super compelling model. And so we had like— what you'd want is like you pay $100,000 and then it makes like $400,000 or $500,000. You're like, this is a model. And that kind of cash flow allows you to scale. So that's what I wanted to get to. And I think honestly, if he just does that one thing, he could easily add $250,000, $500,000 to the business with maybe half that drop into the bottom line. Now you have a much more interesting business.