How We Took This Business From Bankrupt to $150k/month

This brand went bankrupt and then I bought it back. And right now it's on pace for about $2 million in sales this year. And in this video, I'm going to walk you through step by step how we turned this bankrupt business into a multimillion-dollar brand. So if you've got a business that feels stuck right now, this one's for you. And I'll walk you through how we started basically over from zero and grinded our way back to a 7-figure run rate so that you can see what the actual path looks like to building a multimillion-dollar business. Now here's the backstory. Back in 2013, my business partner Matt and I started a brand called Sheer Strength with about $600. We bootstrapped that business all the way to a $10 million per year business with $3 million in EBITDA. And then we sold the business at a $16 million valuation. That was a big win. In fact, it was such a big win that I wrote a book about it. It's called 12 Months to $1 Million, and I sold hundreds of thousands of copies of that book. A lot of you who watch my content found me through that book. Thank you for reading, by the way. But something else happened after we sold the business, and that was that after I documented the growth of this business to hundreds of thousands of people on my podcast, and after I wrote a book about building and selling this company. The private equity group started doing what private equity groups do. They brought in a CEO to run the business who had no experience in our industry. They started hiring more people, running up debt on the company, watering down the quality of the products, selling whatever product they could think of to sell, and moving away from the core values that Matt and I used to build the company in the first place., and a couple years after I sold the business, they declared bankruptcy on this brand. So this business that I had built a lot of my reputation around was now feeling like a scarlet letter on my reputation. It was now feeling like I had this big L on my record. And yes, I got some of the money that I was supposed to get from my exit, but I didn't get all of it cuz they still owed me money from what would happen from the growth of the business that did not happen. By the time the business was bankrupt, it was a shell of the business that Matt and I had built. It was not the same company that we were so proud to run in our entrepreneurial heyday. So when I got the opportunity to buy the business back out of bankruptcy, I said no. And then they dropped the price and I said no again, and they dropped the price again, and I still said no. But then there was this Sunday afternoon. I was at home with my kids. They were watching a Disney movie, I think, and I'm laying on the couch scrolling on my phone, and I started to look at the product line that Sheer Strength had, and I started to ask myself a question, can I do this better? And I started to look at the different products that were in the marketplace and the competitors that were against Sheer Strength, and I started to look at their marketing and their the formulations of the product, and I started going, man, I could do this so much better. And all of a sudden that entrepreneurial spark started to come alive again. So I went back to the people I was negotiating with and I dropped the price one more time and we got a deal. And so I decided to buy the business back for what ended up being about 4 cents on the dollar for what I sold it for. Now, as you'll discover in this video, I still probably overpaid. Because I joked that this business that was a $10 million business called Shear Strength should have been called Shit Strength. It was just a piece of crap company. And what I soon discovered was that turnarounds are harder than new starts. But I will break down step by step the different decisions that we made in order to take this business from a crappy little shell of a company making no money to now a profitable business that is selling 7 figures a year, which finally has a shot of becoming a really valuable company once again. Now there's something that I should mention just to be fully transparent about this process. When I had the opportunity to buy the company back, I was not in the best financial situation. I was still doing fine and my businesses were profitable, but I had made some investments with the money that I got from the, the sale that went to zero, and I was really stressed about the loss of several million dollars from some bad investments, and I could have bought the company back with my own money, but it would have put me in a really tense position. It would have sopped up most of the cash that I had in reserve. And so one of the things that was stressful for me was that I didn't want to take a really big risk to buy back a crappy company. So I did raise capital in order to buy the business back. And my only regret there is that I didn't raise more. I basically raised enough to buy the business back, but I didn't have a whole lot of runway to invest in the growth of the business. And I thought I had enough to be able to do this turnaround, but I found that turning around a bad business is harder than just starting from scratch. And so I actually wish that I had raised a little bit more capital so we could have made more strategic investments. But what that meant is that I kind of had to bootstrap things. I kind of had to be gritty. I kind of had to be scrappy and lean and make hard decisions in order to get this thing moving. Again. So here's the situation of what the brand looked like when we bought it. It was doing about $30,000 a month in sales. That's a 97% drop from the peak of when we sold the company. We sold the company when it was doing $1 million a month in sales, and when we bought it back, it was doing $30,000 a month. Now, to some people, that sounds like maybe you have enough revenue to work with. But that was spread over a bunch of different products, most of which should not have ever been sold in this line. The email list was dead. The Amazon listings were crap, the reviews were crap, and the whole thing was, was basically just a giant cluster. So I'm looking at the details of this business going, how do you screw this up? Like, how do you, how do you make something this messy? How do you have this creatine and this post-workout and an immunity gummy? You're selling an immunity gummy. Why did you sell this product? Oh, it's because, you know, well, when COVID happened, there was all kinds of demand for immunity stuff. So we sold immunity gummies. That has nothing to do with the core of this business. So I'm looking at this after I buy the business back. And this was my thought, my friends. What have I done? I bought the business back and was petrified because it was way worse of a situation than I had come to appreciate. We had 12 different SKUs that were not selling, that were taking up room at Amazon's warehouse that we're paying fees on because they've been sitting for so long. I've got customers that haven't heard from us in years.. And all of a sudden I realize this is not a strong foundation to build from. This is like a day one rewrite. And that's when I actually started to freak out. The brand had moved away from everything that I believe in, and I felt like I had to fix it from bleeding cash and going in the wrong direction. And now I'm starting to worry that I may have done my investors a disservice by asking them to trust me. In buying this business back. And so I was legitimately scared. I was legitimately scared that I had made a really bad decision, that I was gonna have to go to my investors and say, sorry guys, this was a terrible mistake and I'm gonna fire sale this business. I really didn't know what to do. And I was, I was, I was very concerned. There's another thing that was going on, uh, that I really didn't talk about much publicly at the time. And it's that I was going through a pretty hard personal time in my life. I was not in the shape that I wanted to be. I was on antidepressants. I was going through a separation. I had two young kids. I had several business partnerships end horribly that lost me millions of dollars because I invested capital in those projects. I had a business contact go to prison and I was worried I was going to get caught up in the things that I didn't know about. And maybe they'd try to take me down too. I was not in a good spot, my friends. And so the turnaround of Sheer Strength also was kind of a turnaround for me. And I realized that I needed to get my own house in order if I was going to be able to turn this company around as well. And that actually leads me to the first point of the turnaround, because when I looked at this business, it was a business for nobody. It, it was selling all these different products to anyone who would buy them. There was no clear target customer. And if you've ever read my book or listened to like any of my content, you know that the first step that I teach is you choose your target person that you're gonna build the entire company around. This business had no person. And to make it worse, the person that we had built the business around the first time was a 25-year-old dude who wanted to add a bunch of muscle and look good for the girls. And I wasn't 25 anymore. And so the person that we built it around, I wasn't even interested in serving that person anymore. So I chose to serve the person that I was interested in helping, and that was myself. I was going through a reclamation project of my own, of getting my life back in the direction that I wanted to go long-term. I was getting back into shape. I was getting my, my mental house in order. And so I decided to build the brand around one target person, and that was fathers. That was fathers going through a reclamation project. My tagline was going from dad bod to father figure, having a few extra pounds and not being proud of who he sees in the mirror to being a person that was capable of leading his family, leading himself, casting a vision and going in the direction that is on his own terms, going from dad bod to leader, dad bod to father figure. And so that was the lens that I started to look at everything through. Does this product serve the dad bod who's going to become a father figure? Does this product serve this? Does this marketing attract this person? So that was step one. Choose the person. And from there, all other decisions would flow. Whether you are buying a business back or you're starting something from scratch, that is always step one. And it was actually harder to make that decision in this case because there were so many products that did not fit that target person. And that meant that a lot of hard decisions were about to come. Boy, oh boy, were they. So that was our guiding light. We're going to help the dad bod who is transforming into a father figure. So the question becomes, Is anything that we have worth saving? Do any of these products serve that target person? And the answer was mostly no. There was one exception, though. There was one product. It's a DHEA supplement that was actually doing okay. It was making up more than half of the sales of the total $30,000 a month.. It had strong reviews. The branding was okay. And there are a lot of fathers who are getting a little bit older who will supplement with DHEA. And so that became the one product, the one thing that we decided to keep in the business. Everything else needed to go. What do we do about that? Well, that meant that we needed to drop price just to liquidate whatever we could.. And in a lot of cases, that unfortunately meant that we just had to destroy hundreds or thousands of units of product cuz it was expiring and we didn't feel good about selling it anyway. Who was gonna buy it? The email list hadn't even been touched in years, so we really didn't have any other options. And so we just started pulling the plug on products until we could liquidate what we could. And destroy the rest. That was really hard, but it gave us one product that maybe we could build around. And then the next step was to cast a little bit of a product roadmap for what we were going to launch to that target person. And honestly, I just went back to what we sold back 10 years ago. The, the product line was built around a few really good supplement stacks. We had a nitric oxide formula, we had a testosterone Booster. We had a thermogenic and we had some other products too, but that was the core line. And so I started to look at what was being sold in the marketplace, and I noticed that there was a lot of volume for those types of products. Check. I also noticed that there was not a lot of good stuff in the market and I could do a lot better. Check. Okay. Now the step is going out to a manufacturer to see what I had to work with. That's where things started to get just a little bit fun. I remember I was on a call with a manufacturer and I said, hey, here's my desire to go in this direction and I want to develop this thermogenic and here's what I want in it. Go bring me a formula. And they went back and a week later brought me this formula and they walked me through why the different ingredients were in there. And it was a mid-level formula, like it was okay, it was fine. But I said to the team on the other side, I said, hey, listen, I don't think you understand what I'm going for here. I understand that this is kind of a, an okay product for most of your clients, but this is not the best thermogenic that has ever been developed. And I want to create the best products possible. And they said, well, that's going to be really expensive. Okay, how expensive? Twice the price of all of the other clients that we service. And I said, okay, good, go make that. And they balked. They were like, um, really not sure that we want to do that or that you're going to be a player here. And what I could tell here, and you'll experience this if you're a new entrepreneur who is bringing a product to life, when you're working with a manufacturer for the first time, they will not take you seriously. They've got other clients to service. They've got other people that are taking up their time. So if they don't believe that you are a player, they are going to give you second-rate treatment. So I had to find a way to flip the script. I had to find a way to be on the same team with this supplier so that they would take me seriously and give me priority when it came to developing products and getting it made. So this is the question that I asked them. What does your favorite client pay you? And how much do I need to pay you in advance for you to treat me like one of them? And there was a pause on the other side of the line. And then there was a girl on the conference call and she said, well, that changes the conversation. So what I did there was I just treated these people like people, you know, with manufacturers, just like employees or with customers. Everyone has their own self-interests. And when you're working with a company, that's paying a lot of people, usually on commission, they obviously want to make the most amount of money possible. And so I flipped the conversation to be about how can I be an awesome client for you? What do I need to pay upfront? What do I need to order in advance? Like, what needs to be true for me to become one of your favorite clients? And all of a sudden I started getting better treatment from the manufacturers that I was working with. So now I'm on equal footing. And now we can have a real conversation. And through that relationship, we were able to develop what I believe, and I'll stake a claim on this, the best products possible. And we could not launch them all at once. We had to launch them one at a time in order to develop the marketing machine to bring these products to at least 25 sales a day. But at least now I had a plan. I had a roadmap. I wasn't just going to be selling a DHEA supplement. I had 3 other products that I would feel really really good about bringing to market. And then it was lining up the dominoes and starting to launch those products. Now, the way that I like to market products is I build email lists and I launch products to my email subscribers. So the way that I launch anything is I'll create content and I'll build an email list and I'll nurture that email list, and then I'll launch products to them, and then I'll treat those customers really well and get really good reviews, and we'll build a snowball to getting each product to $25,000 a month at least. This is what I This is what I believe. This is what I do. And the, the business that I bought had about 10,000 people on an email list. Now that's pretty good, right? That means that I should be able to launch these products and get 'em to 25 sales a day and start building the snowball to a multimillion dollar business, right? Easy. No problem. Layup. This is gonna be a cakewalk, except that the email list had not been emailed in over 2 years. So we ran a couple of tests to promote the first product launch, and all of them went to spam. Every single email went to spam, not to promotions. They went to spam. And I had a team member on the team who basically said, hey, this email list is dead. There is nothing we can do in order to salvage this. We just got to start over. Oh, that sucks. So you know what I did? I took over the email list management myself. And here's what I did. So we had this email list of about 10,000 subscribers. Sounds pretty good, but nobody was opening the emails. I just decided that I was going to start emailing the list and see if anybody replied, if anybody listened at all. Anybody. So we started sending out emails with subject lines like, you still here? And I would just tell the story of, hey, we took this company over from private equity and they haven't done anything good and we're rebuilding. I was just totally honest and like 2% opened. It may have been less than that, but let's just say that it was 2%. So we had maybe a 2% open rate. That is about— what is that, 200 people? So 200 people opened the email. What I did then was I took those 200 people and I put them into a separate list. So this is a new list that we're starting to build. Then I would send another email. And that would get like a 1.5% open rate. Remember, these are all going to spam. So somebody had to actually go into spam, see the email, click on it to open it. This is terrible. It was so bad. And now this is another 150 people, and I would add that to the second email list. And now I've got 350 people on the email list. Now I just kept doing this over and over and over again, and I would just come up with new ways to engage with the, the old email list, like discounts, or I don't honestly, I don't even remember. It was just whatever excuse I could come up with to email the list. I would email the list and just see who opened. And every time I might get 50 new people or 80 new people and I would just move 'em to a new list. And so what I had here was I had a 10,000-person list that was dead basically. And over time, I built up a list of maybe 1,500 people from just relentless emailing. And this was a live list. And I'm not kidding. I am not below just one by one emailing customers and just seeing if anybody opens. I learned a lot about email health management and how to get out of the spam box and just experimenting with different things to try and get some things to get into the promotion tab and then maybe some into inbox. And this was a multi-month process of just getting this list to have some life to it again. And after a couple months, I've got these two lists, one that's dead, one that's alive. And so then I just made a difficult decision to delete the dead list. And people ask me, was that hard? Well, it wasn't my favorite day. I mean, that was a list of people that had been built over 10 years. But honestly, it felt like a cathartic release. It felt like I was letting go of a bad relationship. We were just deleting this, and now this was going to be my focus. And we did a launch to this list of 1,500 people., and that product had a nice launch and it got to like 15 to 20 sales a day. All right, now we've got a little bit of momentum on product number 1. So what am I gonna do here? I am gonna go to these customers and I'm gonna treat 'em with as, as much love and kindness as possible and ask for some reviews. And so we start to add reviews to the first product and we start to get we start to get some momentum on this first product. We start to get some keyword rankings on this first product. And there was a little bit of momentum, just, just enough momentum to now have 2 products that were selling okay. And now we had a little bit of momentum to be able to justify launching the third product and repeat the process. This is how we very slowly started to get sales moving again. Now, I said before that turnarounds, turns out they're harder than new starts. I hope I'm not scaring you off from launching your own brand. I totally believe in this business model. And if you're starting from scratch, the best thing you can do is create content and build a small audience. I've got clients that build an email list of 150 people and they have $10,000 launches on their first product, and then they start building up that momentum and getting it to 25 sales a day or $25,000 a month and we get the snowball moving. I was trying to resurrect a dead list and dead products and starting all over from scratch. Much harder the second time around. So I hope I'm not scaring you off from doing this. I believe in launching high margin, profitable, consumable brands. And if you wanna be a part of a cohort that we put together where we run entrepreneurs through a process of building a great product, launching it, getting it to those first sales and building the foundation of a company you can scale and sell, you can find out more about those cohorts over at Capitalism.com/bootcamp. But back to how we turn this brand around. The next thing that I did was I hired a brand manager. His name is Shane. What's up, Shane? I bet you're watching. Shane, great guy. And Shane comes in and he's got expertise on Amazon. So he basically taught me what the new playbook was to win on Amazon. And it was different from when I ran the company the first time. And he basically taught me that Amazon will rank products according to two metrics, and those metrics are click-through rate and conversion rate. So if you have a product that stands out for a keyword and people click on it, that's a good sign to Amazon and they'll rank you for that keyword. And then if you've got high conversions for the product, then you're really gonna start showing up for that keyword. So there's two numbers that we need to solve for. The click-through rate is gonna come from your images, your price, and your headline. And it's also gonna come from your reviews too, because people see a lot of reviews, they're more likely to click on the listing. And then conversion rate is going to come down to some of those same things, but it's also going to be things like copy and it's going to be discounts and it's going to be proof on your listing. So these are the things that we start— needed to start to optimize for. And as we put more attention into these things, each product started to rank for more and more keywords. So it was not fast. It happened really slowly. But as we optimized for these things, we started to show up for more keywords, get free exposure on Amazon. Also, these are the same things that will help you convert to advertising on Amazon. So we started to have healthy advertising results as well. So this is where we started to get some real momentum on growing this business. And somewhere along the way, we had our first $100,000 month. I don't remember when it was. But it was like a year and a half into the turnaround. I probably should have said that earlier. The first year was just resurrecting the email list, getting rid of old product, getting rid of stuff that we shouldn't be doing. Oh, it was awful. It was such a grind. And then 6 months into working with Shane and getting some momentum again, we're starting to see the products grow and we get to, you know, the million-dollar run rate. We're at like like $84,000 a month. So we started to have some momentum, but around this time I made a really difficult decision. This was, this was the hardest decision that I made in the turnaround process, and that was that I, I parted ways with Shane. And the, the hard part about this was that Shane was technically performing. We were growing, we were having some record sales days. But we just had a, a fundamental disagreement about what the brand should look like. I'm a dad. I wanted to build a brand around dads. That's not necessarily the, the most expedient path to winning on Amazon or TikTok Shop, which was another thing that Shane was really big on, was we should be on TikTok Shop, we should be doing this user-generated content. And he's right. Those are all wonderful things. But the way that we were doing it, using the, the images that were the most flashy, the things that would get the most attention, or running the user-generated content that was about somebody talking about how big his downstairs was as a result of taking the product, that just didn't sit well with me. It was, it was just not the type of brand that I wanted to build. So Shane had one vision for the business because he's not a dad. He's an Amazon expert and great on TikTok Shop. I was thinking about long-term brand building, and so I decided to part ways with Shane. Now, he and I are still on great terms to this day. We actually still work together. He's involved in one of my other businesses. I still send people to him when they want to maximize their position on Amazon or TikTok Shop. It just wasn't a fit for the direction that I wanted to take this brand. And it was, it was the right decision for the brand at the time. But then Almost immediately after I parted ways with Shane, my, uh, director of ops, he got recruited away from another company. And I had one more person on the team who was my ops manager. He was really loyal to the director of ops and they worked really well together. And so he decided to pursue other opportunities as well. He put in his notice. So all of a sudden I have now recently parted ways with my brand manager. I've lost my director of ops and my ops manager is now gonna pursue other opportunities. I'm like, I'm screwed. Like I, I got nobody. I, I, I can't run this whole thing myself. I, I, I, I, I, I don't, I do not know what to do. And this was the low point in this turnaround process. So like, yes, okay, we've accomplished a million-dollar run rate, great. But now I've lost my team and I have other businesses to run. And so the panic that started to set in was about, am I gonna have to go to my investors and say, I'm sorry, I gave it my best shot, but like, I just don't have the chops to do this anymore? Am I gonna have to go to my audience and say, hey, you know, all these things that I teach you about brand building and building million-dollar businesses, I can't do them myself. And so I'm packing up shop and I'm a failure. Are all the people, the hundreds of thousands of people who read my book, are they going to now say, oh, Ryan's a washed-up entrepreneur, none of his stuff works anymore? Which is like, that kept me up at night. And the whole reason I wanted to buy this thing back in the first place, because I wanted to do a great job and I wanted to show the people who had read my book that this stuff still works. It works better than the private equity playbook. And now I'm panicked that that is not going to happen. And I— and once again, I'm still going through my own personal transformation where I'm getting my mental health back on track. I'm rebuilding my finances and I'm like, Ryan's not doing so good, friends. He's— he is really worried about what is going to happen. So this was my saving grace. I put in a call to my buddy Nate, and Nate runs a company called Sellerplex. Sellerplex does infrastructure operations for e-commerce brands. That sounds complicated, but basically what they do is they have people on their team that know how to run the different parts of an e-commerce business. And he helped me distill down what are the, what are the most important pieces to keep Shear Strength running. And it basically came down to We needed inventory management and we needed somebody to manage pay-per-click on Amazon. Like, if we could just do those two things, I would have some breathing room. And thank God for Nate and the team at Sellerplex, 'cause they're really good at these two things and they're actually really affordable too. So Nate was just a saving grace for me to come in and say, hey, look, the basic operations of this are just inventory and pay-per-click, and we can handle that. And we can handle that for a lot less than what you were paying the team previously. And I was like, oh, thank goodness for Nate. I have a little bit of breathing room. And then Nate was able to help me figure out that, okay, we can hire a brand manager who's fully dedicated to Sheer Strength. And we can have inventory under control. We can have pay-per-click under control, and we can bring in a brand manager that you feel good about working with, and we'll help you hire this person. And I was just so thankful for Nate during this time. Like, sometimes you just need one person who is a calm voice of reason when you feel like everything is on fire. Nate was that person for me, and if it hadn't been for his calm voice during that time, not sure how I would have turned around this brand. So they take over inventory management and they took over pay-per-click. We're starting to get a little bit of momentum. The email list is breathing a little bit again. And then we went through the process of hiring a brand manager, which was its own process. But eventually that led me to hiring Sean. Now I want to be super transparent about how we hired Sean because Sean had a really strong background. In e-commerce brands. He knew how to manage Amazon listings. He had built a couple of brands himself. And to be honest with you, you know, I, I couldn't make Sean an offer that would blow him away. Sheer Strength was just barely profitable. I mean, it was profiting like a couple thousand dollars a month and still had complicated operations that were still turning around. I couldn't pay him what he could have gotten on the open market. So during this time, I was restructuring the way that I compensate new team members. And I want to share a little bit about how we do that, just so you can see that there's more options out there for you when you're looking to bring on good people. So this is, this is what I said to Sean. I was like, okay, Sean, I'm gonna pay you a base salary, right? And it's gonna pay for your life and it's gonna be okay, but it's not gonna be, you know, what you could make on the open market if you were to get recruited by somebody. It's not gonna be what I paid my director of ops. It's not gonna be what I paid my operations manager. It's gonna be a reasonable salary. But what I can do is I can treat you like a partner. And when I was running Sheer Strength the first time, I paid myself a salary of $60,000 a year. But I got distributions when we were profitable. I got to pay myself more. So I can treat you like a partner as long as we're growing together. So if we cross $150,000 a month, you're going to get a big bonus. And if we cross $200,000 a month, you're going to get a big bonus. And I just kept running the numbers of as we hit these benchmarks, you're gonna get a bonus for performance. And then as we continue to grow, at certain points, you're going to unlock points of equity because Sean, the last time I sold this business, I sold it for more than $10 million. I want a partner that I can build this with again. So if we continue to grow and have profits, you're gonna have the option to get some points of equity in the company as well. So you're gonna have your salary, We're going to have these, these bonuses for hitting these numbers, and you're going to have the opportunity to earn equity in the company. So now I'm able to have a conversation with my brand manager to say, how do we do this together? Not I need you to do this for me because I'm your boss. It's like we're going to be partners in this. So what do you think is the best opportunity that we need to pursue? That felt like a much better conversation than me managing an employee. Guys, I'm not a good manager. I'm honestly just— I don't like meetings. I am not good at telling people what to do. Sometimes I think I'm smarter than I really am. So I want to eliminate as much management as possible. How do we create a partnership opportunity where, okay, like you're going to be paid for your time, But ultimately what we're both riding on is the long-term upside of this business and the, the total value that we can create together. And, and that, that was such a better position to be in than me managing employees and me feeling like I had to come up with all the plans myself. I work well with partners and this is how I found a partner to build the business around. Okay, now if you've stuck around this long, this is where it's gonna start to get exciting. So stay with me. Thanks for sticking with me up to this point. Sean comes on and his job is basically for the first 3 to 6 months, just solidify things like learn the inventory management side, learn how to communicate with Sellerplex, look at all of the things that the previous team was doing and just get a lay of the land. And now our goal is we got to take this thing over $150,000 a month, right? And I think we were sitting at around like $100 grand a month or so. So we're a year and a half into— nah, man, we were almost 2 years into this thing and we're sitting at about a million-dollar run rate. Not bad. You know, I basically followed my own 12 months to $1 million formula, but we had this whole year of turnaround and then we had a year of actually making progress. And that was the year that we had, you know, we hit the million-dollar run rate. So Sean's job is to work with me on coming up with a growth plan. And the way that he proposed that we get back on track was that we drop price. And if you look at most people in the e-commerce space, this is exactly what they will recommend. We drop price, and as a result of dropping price, we're going to get better rankings on Amazon. Now, why is that? Because our click-through rate and our conversion rate is going to go up. If we have a higher conversion rate and a higher click-through rate, we're going to rank for more keywords. Kind of makes sense, right? But it's my experience that when you start to drop prices, you can get into a bit of a negative death spiral. You drop price and so you start cutting costs in other areas.. And we had talked about if we drop price, hey, maybe we can swap this ingredient out for another ingredient. It won't be as good of a product, but it'll be almost there. And like, what else can we cut? Can we use AI automations for this over here? And, and then I started to think like, is that the company that I wanna have? Do I want, do I, do I wanna drop price to get more market share on Amazon? Like, that's not the business that I really want, is it? Is that going to acquire the customers that I want? Are we going to be able to make investments into making the product even better? And all of a sudden I felt really, really bad about this plan because this is— this— we're starting to move away from everything that I believe in. We've warmed up the email list. We got the best products in the industry, hands down. I'll put my— I'll put my reputation on our products being absolutely best of market. It'll, it'll be very hard for anybody to beat us. So why are we dropping price? We're dropping price to try to get market share. Is there another way to do this? So this is when I said, hey, um, I don't know if you're gonna like this, but instead of dropping prices, what would need to be true if we 2x the price? Instead of dropping our prices, what if we doubled our prices? This makes no sense on paper. This is going to kill our conversion rate. This is going to kill our click-through rate. So what would need to be true in order for us to double our prices? At first, everybody was like, uh, I don't know that we can do that. And even I felt a little odda-ja. Adagio. I learned that word recently. Adagio. I felt a little bit of about doubling our prices, but it was just a thought experiment. What, what would have to be true for us to double our prices? Well, if we're going to double our prices, we're gonna have to get better reviews. Another thing we're gonna have to do is we gotta improve our images cuz right now they look like a mid-level product. So we're going to have to get much better images. We're going to have to work on our packaging and our marketing needs to get better. Hmm. Well, what about these customers that have us on Subscribe Save? Or what about these customers that are buying from us at the current prices? How are we going to treat them? Well, in order for them to continue having the same experience, We're going to need some sort of VIP group where they can unlock what we called legacy pricing. Well, friends, look at this for a second. If we get better reviews and we create better images and we improve our packaging and we improve our marketing and we have a VIP group where we're treating our customers with gold star service, isn't that a better business? I mean, doesn't this grow the company if we do these things? Even if we didn't change price, aren't these the things that we should be doing anyway? And then I was reminded of my own advice. This is what I tell clients and partners. I say dropping price is an excuse to not do good marketing. Dropping price is a way to in a lazy way, not do all of the other things that grow a business. What are the things that actually grow a business? Having great connections with your customers, having good reviews, good branding, good packaging, great product, good marketing, and treating your customers with gold star service. Okay, that is what we need to focus on. And, and we started to say we are going to raise price as a forcing function to make us do these things. One thing that I tell clients and students is that price should protect your presence. It should protect and honor your focus on doing good work. And you can't really do good work if you're charging the lowest amount in the industry. I want to be at the high point in the industry so that I feel calm and clear to focus on being there for the client, giving them a great experience and thinking about how do I justify this price? With the best product and the best experience possible. And so we started raising price on our products and we didn't do it all at once, but we had one product that was selling for $39.99 and we said, okay, we want to take this to $80 or $79.99. So let's start at $44.99. Guess what this allowed us to do? Just going from $44 to $99 meant that we got to do a promotion to the list and say, hey, price is going up, but you can get on the VIP list and unlock legacy pricing. Guess what? That's a great promotion to get people to buy one last time and come onto the VIP list where we're gonna communicate with them doing one-to-one outreach, seeing how they like the product, how they like their experience, and how we can serve them better. So now we're creating a better experience for our customers. We take this product then after a few weeks to $49.99. And guess what that allowed us to do? It allows us to run another promotion and add more people to the VIP list. You can see where this is going. This is just like when I was warming up the email list the first time. There's a few people that we get to interact and now we get to treat them even better. But now we have $10 of additional margin. Guess what this allows us to do? It allows us to increase our pay-per-click. This allows us to do better discounts. And my favorite, this allows us to do more aggressive incentives for Subscribe Save. So now the percentage of people that are adding our product to Subscribe Save is going up on Amazon. So this $10 of additional margin allowed us to increase our advertising, do more aggressive discounts to get new customers, and put more people on Subscribe Save. This also allowed us to go back and say, could we make the product even better? Okay, we got $10 of margin. Can we, can we be even crazier with how good this product is? And there were like a few tiny things, but we definitely saw where we could invest in packaging and where we could invest in branding. Because if we're a more expensive product, we can invest in better designers, better packaging, more, more expensive packaging and bottling for the products. And now all of a sudden we've got a little bit of positive momentum because guess what happened? We increased our pay-per-click, we're getting more traffic. We increase the conversion rate because our images are better. And now we're actually getting the same momentum that we hoped to get from dropping price. But we did it by raising price because we're able to invest in the things that actually grow the company. And so we are not done with this process. We're sort of letting the price season a little bit before we raise price again. We're about 25% of the way where we want to be. But now we've got a little bit of a plan and the product that we raise price on and we're being more aggressive with is now growing consistently and we're starting to take this plan and apply it to the second product in this turnaround process. Okay, so that's how we got here. Now let me share with you where we are and what comes next. Right now we're sitting at about $150,000 per month, so Hopefully Sean is about to unlock his first really fat bonus. Great news. We have some consistent momentum and growth with the business, and we're starting to raise price on our products. We're, we're not to the price point that we want to be. We're about 25% of the way there. We'll start to continue this process over the additional products, and, and we have no plans to launch additional products at, at this point in the process. We're just gonna, mature what we have. So if we stay at $150,000 a month, which obviously I hope we grow beyond that, but if we stay at that run rate, we'll be at about $2 million a year, which honestly is where I thought we would be at like the end of 2024. So we're about a year and a half behind this turnaround. You know, I thought, hey, I was going to acquire this company, 12 months to $1 million, we'll be at a $1 million run rate, and then we'll get back to— we'll get to $2 million. Okay, so I'm a year or a year and a half behind where I wanted to be. But here's why this number is important to me, because the first time we built this company, year 1, we did $1 million. Year 2, we did $2 million. Year 3, we did $4 million. And then year 5— year 4, year 4, we did about $8 million. And that's when we started looking at selling the company. So we are here. If the growth trajectory follows what it did the first time, then we should be right at that point where there's going to be compounding returns. Where over the next couple of years we may double and then double again. And last year, last full year in the business, it did like $1 million in sales. This year we're pacing to— so does it make sense that we might have another double and then another double and be back to where the company was in its heyday? I don't know for sure, but we're right on track for where we need to be in order to follow that same trajectory. So even though I'm beating myself up over I should be further ahead than where I am right now, this brand is still right on track for where it needs to be to have a really nice exit someday in the future if we continue at the same pace we did before. Now, at the same time, there's a couple of initiatives that I thought I was gonna do year one that just got pushed down to the bottom of the to-do list that I'm hoping we get around to doing in the next 12 months or so. And the first is that I'm writing my second book. And my second book is not a business book. It is a fitness book that goes through my personal physical and mental transformation over the last couple years, how I overcame depression and losing millions of dollars and got back on track, made the money back. Got my businesses back on track, got my health back, got my mindset back. How did I, how did I do that? I'm, I'm, I am writing that book and that book is called, you'll love this, From Dad Bod to Father Figure. And I hope that this is, well, I hope that this impacts your strength in some way. I don't know how yet, but I hope that my transformation and the book that I helped to lead thousands of men through their own transformation, I hope that that provides fodder over to Grow Your Strength. And if not, that's fine too. This is just something that I want to exist in the world. The second thing is I have always wanted to develop a telehealth backend. So a telehealth backend would be that we have doctors and us and healthcare practitioners that can do general practice and write prescriptions and recommend peptides and biohacks and look at the numbers behind people's blood tests. I've always wanted to attach a telehealth to the backend of Sheer Strength so that, 'cause that was a big part of my transformation is looking under the hood and seeing what was going on and I can't do that. I cannot build that. I don't have the experience or expertise or certifications to be able to do that, and I don't want to do that. So what I'm looking for is a partner where I can basically white label, or I can create some sort of affiliate relationship with that company so where they can service our customers and give them a great experience. So So hey, if you know anybody like that, send them my way. I'm Ryan@Capitalism.com. But here's what this does for the backend numbers of the business. If, from what I understand about the cost of this and the profits of this, if we put someone through a telehealth package, this is probably going to be about $1,000 in margin, in profit per customer. Now, it's not like we're going to be selling 100 of these a day, although that'd be great, but we might sell a few. And if, if we sell a few, then we can arrange our follow-up sequences and our promotions to go to this high-end, high-margin backend. So in other words, if, if we sell out 200 units a day of supplements and 1% of them become buyers of the telehealth. Well, now we've got 2 customers a day, which means that we're gonna have about $2K a day in profit on this backend offer. Now, I hope we convert more than 1%, but if we only did that, then we're looking at $2,000 a day in potential profit from this backend. What that will do is allow us to be even more aggressive with marketing the supplements, even more aggressive with marketing the book, even more aggressive with having the best product possible. And so the reason I share this with you is because you can see how the more margin we've got on both the frontend and the backend, the better job that we can do for our customers. And ultimately the best thing that can happen for somebody who buys a supplement on Amazon is that they get under the care of a great healthcare practitioner who's looking at their blood levels and making recommendations for how they can improve their life. So if I think about this, not just about how do I sell more DHEA supplements and more about how do I give the best possible outcome for the type of person that would buy that DHEA supplement, that's the dad bod trying to become a father figure, all of a sudden I have a lot more to work with to make sure that this customer has a transformation in their life. That's what I want this company to represent. Now, once again, this does not exist. I keep saying it's going to exist, but it keeps falling to the bottom of the to-do list. Hopefully by me making this video about it, I have some accountability to go do this. But I want you guys to see the thought process behind this being more than just how do we sell supplements on Amazon or Shopify? Or how do we sell more stuff on TikTok Shop? Or— and you can see why it didn't make sense for me to continue paying content creators to make really crappy videos when the brand that I want to represent is going to have a book and a telehealth backend and represent dad bods who become father figures and has premium branding at premium price points. This is the direction that ultimately is the company that I want to build. And that I think also has the best shot at being successful. So that's how we took a bankrupt brand and turned it into a $2 million business. But it is still very early. It is still early in the process. And I want to leave you with the framework that we used in order to, in retrospect, resurrect this thing from the ground. Number one, we ripped it to shreds. We tore out everything that we did not want in the business anymore.. And you can do that when you don't have this baggage around how things were supposed to be. I, I basically had this business and looked at it and said, is this what's matching my vision? No. Okay, cut everything else that doesn't serve the ultimate person that we wanna serve. Number 2, the, the next big takeaway for me was I needed one person who was in my corner in order to feel like I had the capacity to turn this thing around. And that started with Nate and, well, first it was Shane and then it was Nate and then ultimately Sean, who is the brand manager right now. I needed one core person to allow me to do what I did best. And then third, it became about being relentlessly focused on one strategy that would work. I have people tell us that we should be doing a whole bunch of other things, and honestly, I want to do those things. Like, I want to be running aggressive advertising to a shop a Shopify store. I wanna do that. We're just not at the point where we have the margin and the capacity to do all of those things. Remember, we've been bootstrapping this thing cuz all the capital that we raised went to buying back the company a couple years ago. Probably should have done things differently in retrospect, but that's okay. Once we get to $3 or $4 million, it will make sense for us to be more aggressive in those other areas. But we needed one strategy that we could focus on in order to move the needle. And then finally, maximizing margin as much as possible, not by being cheap, but by being expensive. And the more that we can focus on having a high margin business, the better job we can do for our customers. And the faster I believe that the compounding returns will kick in for this company. That's how we turn this brand around. Now we'll see what happens in the future. Does this become an 8-figure exit again? Or does it become, you know, a pet project that Ryan has? It's just a nice little 7-figure profitable business. We'll see. But I wanted you to be able to see what the turnaround plan looked like and what worked and what didn't work. Honestly, I now realize that if we had just started something from scratch, it would have been way easier. It would have been so much easier to just do something from scratch rather than turn around a project that was failing. But do I regret it? No, because I wanted to show that the playbook that worked back in 2013 still works today on the exact same company that the private equity group could not turn around. Then the playbook that I wrote is still the playbook that is turning this around into a multimillion-dollar business. If you want to follow that playbook on a new fresh start, a new fresh business with high margins, with consumable products that you're proud to release, we do cohorts where we help people launch and get their product to market and get those first sales so they build the foundation of a business that can become a 7-figure brand and maybe sell for a, a, a large amount of money in the future. If you wanna see what that is and get on the waiting list for the next cohort, you can find out more about that at Capitalism.com/bootcamp. And I would be honored if you would subscribe to the channel on the podcast or on YouTube so that you can follow the journey that is this company. My name's Ryan Daniel Moran. I help entrepreneurs build 7-figure businesses and have 8-figure exits, and I hope you found value in today's lesson. Thanks for watching. I'll see you guys next time. Take care.