Q&A: The best pet cremation business model on a budget + 3 more questions! Ep. #039

Why don't you show us your customers and give us your customers and sell your vans and not be in the logistics business at all. Just give us some of your margin and stay in your cremation facility all day, every day and focus on growing your business. And we'll have the capex and the opex of the vans and the drivers and people calling out and all that. And that was very attractive to him. We're going to go knock doors and find you more vets. We're going to grow your business basically. And so yes, your top line will take a hit, your bottom line might even take a hit. You'll have less headache and we'll grow your business with future vets that we bring on because we are not about to buy our own incinerator and get in that side of the business. Welcome to the Kerner office. We had another call in show today with four callers. I talked to a guy about his unique idea to have a quiet room rental service. So basically he goes to the library to get some studying done and there's always a line and he thinks there's a big demand for not a wework, not a Starbucks somewhere to work that is quiet all the time. And no one's doing this, which I don't like about it. But this seems like a really great idea and could be really profitable, which I do like about it. So we talk about that. Talk to a guy that is starting a pet cremation business in Phoenix just like we have a pet cremation business in Dallas. So he wanted to ask some tactical strategies. Should I go to, should I partner with the vets? Should I partner with homeowners or consumers? Should I partner with cremation facilities? How should I attack this? And some people might be like I'm not sharing my secrets because we're competitors. But no, I just shared it all. I told him what we were doing and what he should be doing. Talked to a guy that does search engine optimization for a yacht rental business or a yacht booking business and he's done it for 15 years and he's really close with the owner and the owner wants to sell the business to him. So he wants to know could I grow this? Am I too dependent on Google? What should I do? And it's a pretty attractive price and pretty cool business. And then the last person wants to start an RV park from scratch in an area where a lot of blue collar workers are and he wants to have more amenities than the other blue collar RV parks and he wants to start from scratch. And he's doing some things right, some things maybe less right. So I gave him some tips. He was really grateful for it, but I actually forgot to hit record, so I ended up just talking him through it. Or I ended up just summarizing it myself in five minutes to cover all the high points. But. But that's it today. And also, I'm not sure how many of these Q and A call in episodes I'm going to keep doing. I don't know if I like them. I don't know if you like them. They take a lot of time and energy out of me. Maybe I'll do them once a month. I don't know, about once a week anymore. But I want to hear from you. If you're on Spotify, you can actually comment on Episodes now, which is a brand new feature. So comment on this. Let me know if I should keep doing them, if I should change them, or email me chrisofounders.com or comment on a YouTube video. Just let me know. Do you like the call in the Q and A? Yes. No. What type do you like? I want to know. Give me feedback. Podcasts are hard because it's hard to get feedback. Unlike Twitter. I get it immediately. So love you guys. Thanks for listening. Please like and subscribe and share with your friends. How are you, man?

Great. Great. Great. Thanks for having me.

Of course. I'm sorry to keep you waiting. I messed up my time zones and you're actually the first person I'm talking to and I missed everyone else.

Oh, my God.

Oh, wow.

Oh, wow. Oh, wow. Oh, wow. It's all right. You got my message, right? I don't have so much time.

Yeah, no, that's fine. Let's just knock it out.

Okay. All right, sure. All right. The idea is about creating this quiet spaces for people to study and read. And I got this idea from when I was reading for my final exams. I just completed my Ms. At University of Dallas and I live in bikini, right? So I'd go to the library every day. And the Library opens at 10, closes at 6 some days, 9 on other days. And at 10 o', clock, the door there at the door, they're like 20, 30 people waiting to get in, you know?

Oh, wow. Yeah.

And it's kind of tough because it's always noisy. They bring kids in and stuff like that. So I thought, why aren't there any quiet spaces? Why aren't there any places where you can go into a secluded room and it's just you and you have five Hours, Six hours to yourself. And you can just get your head down in your books and study hard, you know? And in the McKinney Library, they have three study rooms, but you can't book it for more than two hours in a day, you know, so once it's two hours, you need to get out. So, yeah, I thought about that and I searched around and there's nothing like that, actually. Not even in 100 mile radius of Dallas.

Right.

So I felt that, well, this could be something.

Okay, so we're talking about the McKinney Library. Every single day, once they close, 20, 30 people are waiting, like, hey, what?

Yeah. To get in. Yeah, yeah. Every day.

Because you can't do this at Starbucks. You can't. They're clearly looking for this need because they're not able to get it at home. Oh, okay. Is this a thing in other areas? Like, because it's not co working. Right. You don't want to pay 200 bucks a month. Just something quiet. Like a quiet place.

Yeah, something you can pay 10 bucks, 15 bucks an hour.

And do you think you could even. You think it'd be a. Like a subscription service or something that you pay by the hour or either.

Pay as a use and do subscription as well? Yeah, that could work.

Have you found anyone else doing this? Like, how much research have you done?

All right, so I searched on Google and I searched on Facebook, Marketplace, search for spaces, stuff like that. Nothing.

I'm asking this because I want you to have found someone that's doing this. Right. Like, I would rather see that someone's tried this.

Someone's doing it.

Right.

Yeah. I don't want you to be first.

You know, I get you.

Okay, so what I think you should do, where do you think these people are hanging out? Facebook groups. Yeah. How could you find people that are looking for this? Oh, you know. Okay, here's what I want you to do.

Okay?

So go to the library and start talking to the people waiting at the door and just ask them. Just be very transparent. This is my name. This is what I'm looking to do. Like, do you mind if I just ask you a couple questions about yourself? Like some of the stuff you won't have to ask them. I would just assume their age, assume their gender, assume their race. Write that down and say, like, are you a student? Are you a working professional? Are you a mom? Are you a dad? What makes you need to come to the library? And I will ask, do you know if these people are going to the library to rent books or to Study or both. Is that clear?

Yes. So, yeah. So when I get in, I see some go study that. Some bring their systems, that bring this, some bring their screens in there, you know, and some come there to work as well. So people have meetings. So it's always sometimes rowdy and noisy. So it's hard for you to concentrate if you're actually studying for exams or you're studying for some kind of certification and something else. You know, I also wrote a certification recently in my Project Management Professional certification, and it's a proctored exam. Right. And so you could either go to the center, the VUE center, or you could take it at home. So if you take it at home, it's a proctored exam, so there's someone on the other side of the screen watching you while you take exams. So this quiet space could also work for that. You know, if people want to take exams, you don't want to go to the center. Drive one hour. You could drive an hour and a half. If you have that in your city, then you can go there and take your proctored exam in peace and quiet.

Yeah. This could be a partnership play. Right. Where it's like, you could be like an afferred.

Exactly.

An approved referral provider to the test.

Precisely. To the vues. Yes.

Yeah. Okay, So I would love for you to do surveys, like, five nights in a row. And, like, write down. All right, Monday night there's 13 people waiting. Tuesday night there's 34 people waiting. And as much data as you're willing to gather, ask them who they are, why they're there, do they have any frustrations? Maybe they're just there to run a book and it's not your person at all. And then count the percentages of how many people are there to run a book, how many people want to study, then use that data. And I'm picturing this as being like a shipping container. A 20 or a 40. A 40 foot shipping container that you would have to retrofit. I'm wondering if you could rent something to prove the model. But you obviously need air conditioning in there, especially in Texas. Yeah, but you could build out the inside of that shipping container with, like, spray foam insulation, make it, like very, very, very quiet. And I'm picturing like, a hallway on the left side and then just rooms along the right.

Exactly, yeah.

So if it's 40ft long, then, you know, you don't want it any more than six feet wide. The offices. And if the hallway is like, they're eight feet wide, the hallways Two feet wide. Yeah. It's pretty small, isn't it?

Yeah, it's going to be too small to be quite tight.

Yeah, it'd be tight. Maybe you could fit three in there or something. Because it's 80 by 40. It's 320 square feet. Maybe you could fit. I mean, so. Yeah, so that could be like three 10 by 10 offices. And that's pretty big actually for just a place to study. So maybe like 48 by eights somehow you could just cut the thing into fourths. And then when you do your research, when you talk to them, ask them what they'd pay. Is this like a $30 a month thing or is it a $30 an hour thing?

An hour thing.

Right. And just get a feel for it. I would think this is like going to be a thing. This has to become a thing at some point. Like the world is getting more loud, not less, which means the pendulum needs to swing in the opposite direction. For many of us. It's like a. It's a Starbucks alternative. You're going to have WI fi.

Yeah. Probably refreshments, like beverages and stuff that people. Maybe a vending machine actually.

Yeah. Yeah. I wonder if you could make this work like in a, like a, a physical space like that you rent.

Yeah, that's what I was thinking. I was thinking of renting a space in maybe like, I don't know, look for some, maybe 1500 square feet and just build it out inside.

Yeah. So let's say. All right, so I know the space a little bit because I used to rent a thousand square foot spaces for my iPhone repair store and I was just talking to a guy that owns a bunch of similar types of locations nationwide. So let's say it's a thousand feet and it's. I mean, there can't really be a communal space because the point is for it to be private, quiet. Right?

Yeah. Yeah.

So it's almost kind of built out like a massage place. Like a massage envy. Right. Just like a hallway with a bunch of rooms.

Bunch of rooms, yeah.

Huh. But specifically like sound barrier rooms. Yeah, go ahead.

And also it'll be self checking, so the rooms will have electronic locks where you put in your code and then you can enter.

Yeah.

So okay. You know you have that whole space for your time.

Yeah. All right, so let's say they're eight by eight rooms. That's 64 square feet. Let's say you could probably fit like 12 in a thousand square feet because you do need like an open area and a bathroom. So let's just be conservative and say 10, 10 rooms in a thousand square feet. Let's, and let's go on the low end. Say $5 an hour and you're open 24, 7. Okay, so that's $120 a day total potential revenue per room. So $1200 a day total potential. Very few people will be there at 3am 1200 per day equals 36,000 or so. 200. Yeah, 36,000 per month total. You pay one hourly person just to make sure nothing crazy happens. Maybe in the middle of the night. It's like an anytime fitness and there's nobody there. Right. But you'll have to have someone there occasionally. So your costs are very low. Your rent is going to be, let's say, three grand a month for something like that. So that's 10% of your cost or less than 10%. So like with a person there and insurance and water and electricity, your gross margins on this could be 80% at like, okay, at full capacity, which is you won't be. So but $5 an hour, in my opinion is also very, very cheap.

Right. I, I, I, I, I, I estimated like 10 bucks an hour, 50% capacity for 12 rooms, and I came to about 300,000 a year.

Yep, yep. Okay, so that would be 72 grand a month at $10 and full capacity. So then we gotta cut that in half at 50%. We get back to 32 grand times 12. You're like 400 take out your cost. You're exactly right. 300 grand. Okay, that's a good business. That's a good business. But a lot of ifs. So, I mean, let's see how many people that needs to be. So, yeah, so let's say people are there for two hours. So 50% capacity. So there's if. Okay, so if everyone's there for two hours, there's 12 slots a day times 10 rooms. So 120 slots a day, but then 50% capacity. So 60 slots a day. Am I doing that right? I think that seems right.

Chris, I need to jump off to the other call.

That's all good.

I'm so sorry.

That's all great. You go ahead and go.

All right, thank you so much.

Yep, no problem. All right, so let me just finish that up. Because he had to go. So that's 60 total slots a day if everyone's there for two hours. So that means if everyone's there, let's say three days a week on average, then you need, I think about 80 customers. 80 to 100 customers. At 50% occupancy to net 250 to 300 grand a year. I could be wrong, but one person. So if they're there for $20 times three, that's 60 times four, that's $240 a month. So 25,000 divided by 240. Yeah, about 100 customers. But 240 bucks a month is a lot. So maybe you make it $100 membership and, and then they can book rooms for free. Anyway, I like this idea, it's a cool idea. But I would like to, I would like him to test it before signing a five year lease with a personal guarantee because only idiots do that. I've done that anyway. That's a good segment.

Carl, good afternoon or good morning. How are you?

Good, how are you?

I am well, thank you. All right.

Where are you calling from?

Phoenix, Arizona.

All right. I was just calling mobile home park owners in Phoenix yesterday.

There's a few of them out here. Mesa. There's a lot of them, right?

Quite a few, yeah. They don't answer their phone though. That's the problem.

Yeah, that's a problem with a lot of things, right?

Yes.

People to respond and follow up and get things that you want to accomplish done.

Right? That's right. So you've got a question about our pet cremation business. Yeah.

So with the little bit of inspiration of some stuff I saw from you back in September, October, somewhere in there, you know, I'd actually already had a conversation with Buddy. We started up a business and we're looking at doing full on cremation retort, all that fun stuff and ran into some issues zoning. So we put that off to the side and essentially just working as a courier in this market, we partnering with a cremation facility. So is drop the pets off there, let them take care of things, we'll pick them up and redeliver. So you know, like I mentioned, we'd gone down the path with the zoning thing, but it's a bigger, you know, big fish to fry essentially and just trying to get something off the ground so. But initially wondering how you approached that topic. I saw a little bit information on, I think you guys might have partnered with an existing cremation facility.

Yeah, we had the same issues with zoning. It's not insurmountable, but it was enough for us to start thinking creatively and thinking like man, what if we just like partner with cremation facilities? Because those incinerators are not cheap as I'm sure you've learned.

Yep.

What point in the process are you right now?

So we're just about ready to turn our website on. We're buying a van, having an employee hired that's ready to start here next week or whatnot. I think initially we'll be picking up a lot of households, picking up from there and taking care of things from that perspective. And then we're looking at, obviously make some calls to vet offices, there's plenty of them here in Phoenix, and get the volume going from that perspective.

You're going to do the courier model. Start with one refrigerated van and you're going to hire someone to do the driving. You're going to call on the vet. Do you know what your competition looks like in that area?

Yeah, there's not a whole lot. There's four or five actual cremation facilities and a couple, I think three of them are, you know, actively marketing themselves to the vets and picking up from vets and then from the courier aspect of things, it's a little more mom and pop. There's probably three or four from what I've seen in the market. So it's relative for as many. Kind of do the math based off of a little bit off of your original post, I think it was start reverse engineering. You know, Phoenix has a 4 or 5 million population. 50% have vets, 80% get cremated. There's a lot of demand there. Right. So. And the cremation facility that we're working with, they're nowhere close to running at capacity, so we could presumably pick up quite a bit and keep them entertained and, you know, make some money while doing it. So that was our thought process on there. So is that similar to what you guys have going?

Yeah, it is. What kind of a split have you worked at with them?

I don't have the numbers in front of me, but it was very economical to where we can mark it up 35 for communal, 105 for individual and 135 for private.

Okay, yeah, that's pretty good. And how does the vet play into that, like with his markup?

Yeah, that's where. That's probably where the line of questioning that I have for you at this point leads into because we haven't quite got that far with the vets yet. I did some initial calling back in October, November, just to have conversations with vets, but that was before any of this was fully realized and all that. And it was actually under the different model where we were running our own retorts and all that good stuff. But yeah, so I Know the. From what I'm gathering anyways, I think the vets probably across the valley are getting probably somewhat similar pricing to what I just read off to you there. So that might be a little bit of the challenge, but thinking you might know a little bit more.

Yeah, I think the, one of the challenges you're probably going to find is picking up directly from consumers because there's no predictability to that and finding them at the right time can be hard. If you use Google Ads, that can work but it can be like the profitability on that is close to break even. We tried it. I think your best bet is to exclusively focus on vets because if those consumers don't think of their vet when their dog is getting close to dying, then they're going to Google it and the chance that you'll be able to, it's very, very, very time sensitive. Like if you get to them a couple hours late, they're no longer your customer. So I would think you'd be more wise, this is what we're doing to focus more exclusively on vet partnerships and starting with the ones that have more locations just because it's more efficient.

Yeah, that's I think like you said, it's a timing thing. Right. And just need to pop up but you know, for the consumer side anyways pop up first in the search and in those type of things. Right. So you know, we've got some stuff. My business partner has a, another, a pet grooming business. So we have some things built out for that and scheduling and all that good stuff. And obviously we'll build in the vet routes and the return of ashes and all that good stuff into what we're doing. But the vets are where it's going to come in handy. So if you don't mind sharing what, when you guys are working with vets, how do you guys put those deals together? What are the numbers look like, what the conversations look like?

Well, we'll still, we're still early on in this and my partner Matt is the one that has all the vet relationships because he used to do, he used to work for private equity and they did vet roll ups. But with the vet, the first vet customer that we got, we basically inserted ourselves as a middleman between him and the cremation facility. And the pitch to the cremation facility was don't worry about logistics anymore, we'll do that. And the pitch to the vet was change nothing. Like keep doing what you're doing. And that's worked so well. That's worked Pretty well so far. And we're trying to, with some success, to get the cremation facility to actually refer us some of his current customers and say, hey, give us some of your margin. Because he was very concerned that we would go after his customers without even knowing. He wouldn't tell us who they were, but he didn't want us to take them. Said, okay, well we don't know if someone is your customer until we already have a relationship with them and then we ask and then at that point they might not want to tell us. So we said, well, why don't we do this? Why don't you show us your customers and give us your customers and sell your vans and not be in the logistics business at all. Just give us some of your margin and stay in your cremation facility all day, every day and focus on growing your business. And we'll have the capex and the opex of the vans and the drivers and people calling out and all that. And that was very attractive to him. So we're still trying. It's kind of a long term play. But that could be another thing that you do is you go to the cremation facilities and pitch the same thing, say, hey, send me your vets, all interface with them and then your other pitch to them is not only stop worrying about the opex and the capex, but we're going to go knock doors and find you more vets. We're going to grow your business basically. And so yes, your top line will take a hit, your bottom line might even take a hit, you'll have less headache and we'll grow your business with future vets that we bring on because we are not about to buy our own incinerator and get in that side of the business.

Yeah, that's. And we had a similar, I guess to the degree anyways, conversation with the, the cremation facility yesterday about okay, who are your customers and all that. With that being said, like I said, they've got a lot of capacity to, to build up. They've got four or five vets in northern Arizona and then four or five here in the Phoenix marketplace. And so there's not a lot of toes to step on there. So there's, it's still a lot of great big opportunity. And I think my, the biggest thing I need to come up with back to that question I asked you is, okay, the, the pricing that I mentioned, am I going to be in the ballpark when having those conversations with the vets? And obviously I'm selling A service and, you know, making it easy and not making sure they don't have to worry about it, have to worry about ordering all the earns and things of that nature as well. Right. So we're taking a lot of time, effort, energy off their hand and just taking top line and taking a little bit of margin, but also making their life a little bit easier, so.

Exactly. Yeah. Yeah. I think your pricing is right in line and yeah, hopefully it gave you a couple ideas that might be helpful.

Yeah, that sounds good. So, yeah. So you think that the pricing I mentioned, I can go to a. There, I can mark that up and go to a vet and they'll be okay with it?

I do. One thing we, we did about a month ago is we called a ton of vets around the country just to get some data and I was very surprised by how high the prices are in other markets. Our first customer does not charge nearly enough and we showed him our data. The cremation prices are higher than you think they would be. So I think you, you could even juice them a little more.

Yeah, so what we were planning to go retail or go to the market with was at least to the consumer, you know, individual household type of stuff was a fair amount higher than that. So we're going to make some decent money there. Just wanted to, like I said, it's a volume play working with the vets which make sure there was more than 5 bucks or 10 bucks or whatever in there. So quick question for you. You guys doing handling any of the, the urns and memorial items?

Not yet. When we drop off animals, we pick up those and bring them back to the vet. So we are in that sense, but we're not like, we don't make any margin on that. We're not involved in that right now, but it's something that we've talked about doing in the future. Cool. Well, best of luck to you.

Awesome. Thank you. I appreciate the time.

Yep, no problem. See ya. See ya. Bye. Hey Chris, good to talk to you. Sorry you've been waiting so long.

No problem. I'm all good. All good. Good to see you. So it's, it's a company that I've worked with for a long time and the owners are old and they want to retire. Really cool people. I like them a lot. I've known them for a long time and they've done this business as a broker for pretty good sized charter yachts, mostly in the British Virgin Islands. People go for a week, they go for a boat, they get taken out and they get people cook for them, they go. And usually it's like a 20 to $30,000 vacation package for the week. And it's basically an online business. There's no physical assets. You know, we don't own the boats. We don't have any control of the crew or the equipments. It's just connecting people that want to go with the actual boat owners and the crew.

Yeah. So you're like a lead generation service or a marketing arm for all of these crews?

Yeah.

Okay, and then how are you getting paid by them? Is it like a per lead or a percentage of the booking?

The commission on the booking.

Okay, and what does that average ticket look like? I know you said like 20 grand for a week, right?

Yeah. The total price to 30 grand is the average. I mean, it can go up to 100, but that's pretty rare.

Okay.

Straight commission, you know, pretty much fixed on that booking.

Okay, what is the commission?

That is 15%.

Okay. Okay. Does it scale up or down based on the ticket size or just flat?

No, it's.

That's flat.

Okay. And how big is this business, like, on a revenue basis?

Total revenue is about 280,000 or so. Okay, like that? 250. 280 per year.

So like a hundred. Well, like 100ish bookings per year on average.

Couple right now? No, more like 15 to 20. Probably basically like a couple per month. So it's not huge right now.

But wouldn't that be like six grand a month in commissions to you? How do you get to 280?

Some of them are larger.

Okay, so tell me about this opportunity that you have and how did you come across it? Did they approach you? Did you approach them? They approached me.

So they. Yeah. Again, I've known them for 15 years or so, and they're just. They're done. And they said, we want to sell and would you like to take it over? And I said yes. They've been a great client for a long time and know that, you know, boating and sailing and science, that's a big interest. I love doing that.

So you've basically been like driving them most of their business or leads through SEO and outbound stuff.

Yeah, exactly, yeah. Email, paid at Google Ads.

Okay.

Yeah.

And do you see much opportunity to really scale it? If anyone would know, this would be you. Right.

Obviously there's tons of competition. It's just because anybody can do it. It's really about lead generation. I do think there's opportunity to do more.

Okay, so is that 280? Is that top line or bottom line?

That's just gross. That's top.

Okay.

Total, just gross.

Do you know what their profits are?

I think they said like 38,000 or so.

Okay, where are all those costs coming from? Google Ads, employees, or are they just like putting a bunch of stuff on? You know, Are they just not reporting a lot?

Yeah. So basically the net income, well between 38 and 40,000.

Okay. I'm just wondering where all those costs are coming from. If it's a remote business, they're just generating leads, passing it on. I feel like there'd be a lot of automations there. And it sounds like only 10 to 15% margins. Have you seen their books? Even if they're like janky and not very well kept. Have you seen them?

Yeah, 37,000. 15% of 250.

Right. I'm just wondering what the 85% is in a business like this.

Oh, that goes to the yachts, that goes to the owners. So that money, that's what they pay to the actual boat.

Oh, okay. So they're counting the total, like. Okay. I thought they were only counting like their cut as the revenue, which is why I thought there'd be like a hundred bookings per year.

Okay.

Yeah. Okay, so they're counting like the gmv, like gross merchant volume is their revenue.

Yeah, that would be what that was.

Okay. Because I think the more accurate way to do that would be if your average like cut, let's say it's a $20,000 booking, you're. You take 15%, that's three grand, you're doing three a month in. If I were keeping these books, I'd say my revenue is nine grand a month. I'm not counting their revenue. Right. You're not paying taxes on that 85% that you give them. So do they really have. So the opposite question now, do they have no cost?

Then there's like association fees and insurance and broker fee total fees or your costs just cost probably 500amonth, 600amonth.

Yeah. Now, have you guys tucked prices or multiples or are you not there yet?

They offered 60, was sort of thinking about more. I don't know, 35 to 40.

So like one times profit, one times earnings.

Just thinking about it. I don't know, not sure yet.

Okay. How much time would this take per week for you?

Yeah, it's a great question. Probably. Honestly, maybe an hour a day.

Okay. I mean, to me, even 60 seems like a great price. I mean, you make your money back in two years essentially if you don't do any value add for 5 hours a week work 40 is better, but 60 is a 2x multiple on what sounds like an easy low maintenance business that you have. Not only could you scale, but that's your job is scaling businesses like this. Right. Seems like you're the perfect person for it. Yeah, it could just be like this nice little, just not passive, but somewhat passive revenue stream that pays dividends for years to come.

It could be, it's pretty, pretty Google dependent right now. That's kind of the main risk, I guess.

Yeah.

Especially with AI and Google playing in AI so much. Like it could totally change. Right. For all we know in six months the homepage of google.com could look totally different and they send you to a completely different website. You know, I get that. What, what if you tied the earn out to a percentage of their revenue being moved away from Google within a certain time period. So like they got a certain amount of cash guaranteed. But if you don't rely less on Google within one or two years, then you don't have to pay out the rest.

Huh. So if it moved away from Google then that would be less of an earnout for them.

It would be requiring you to take steps to start generating revenue from other channels. Right. And if you were unable to do that within a certain time period, whether Google changes their algorithm or not, there'd be a discount on the purchase price. But you could work it the other way to where it's more fair to them. Like hey, if I, let's say I use cold email and that becomes a big or I find a partnership opportunity with a, like a travel agent agency in the United States and they bring a bunch new revenue like I'll give you a percentage of that as well. Like this earnout, they could capture some of the upside but be tied to some of the downside. Yeah, well another thing you can do is, is like put a little money in a couple grand or something to buy the option to buy them in like three months at a set price and say hey, I'm going to spend the next three months trying to find other revenue channels for this. If I don't, then no harm, no foul, keep my two grand. That's just for wasting your three months time. If I do, then I will buy your business at X, Y or Z price at that time period in the future or sooner. Then you can just start experimenting before you really take the risk.

Yeah, that's a possibility.

Okay, well, anything else?

Well, do you mind if I plug the site? No, please, you can check it out. It's boatbvi.com British Virgin Islands. British Virgin Islands.

All right. Yeah, I've talked to my wife about doing this one day. It seems like it would be a really awesome week. You just have someone cook for you and you fish and you swim and the kids have fun. Be awesome.

An interesting thing some people do is they do groups. So three couples will go and do it.

That's a great idea.

And kind of something you can't really get anywhere else. It's not like a cruise ship at all.

Right. Yeah. Okay.

Well, that's awesome. That's really cool. I appreciate you putting me on here, you know, that's really fun. I've seen you. Yeah. On Twitter all the time. I think I originally saw you buying mobile home parks.

Yep. But still am.

That's awesome.

Okay, well, thanks, man. I got someone else in the waiting room, so. Okay. Enjoyed getting to know you.

Okay, thanks, Chris.

All right, thanks.

Thanks, Chris.

Yep.

Appreciate it.

No problem. All right, so I am kicking myself right now. I just had a caller named Daniel speak to me. It was about 15 minutes and I did not hit record. Something glitched out with my software and we recorded none of it. So I'm just going to walk you through really quickly. I'll save 10 minutes of your time and I will summarize what we talked about because it was actually a pretty dang good call and I think you would have liked it. So Daniel lives in an area of Texas. There's a lot of high earning blue collar workers in this area and he has a lot of RV parks in the area that he drives by. And he. They all stink. He says they're all too close together and they have no amenities. And I know these types of RP RV parks. I used to own one in Colorado City, Texas, and they're called man camps. And they're basically RV parks, exclusively built not just for long term tenants, but for long term oil workers or transient tenants. They're typically close together. They have no amenities because These workers spend 12 to 18 hours on the job and they come home and just go to sleep. So he wants to do something different by starting a new one from scratch in the same area and offering more space between the RVs and more amenities like a playground, maybe a pool and charge a little bit more, but about the same, hopefully. And so he wanted to know if that was a viable idea or not. Here's what I told him. I gave him the bull case and the bear case for that. The bear case for that is you don't want to be the pioneer in the front of the line getting hit with all the arrows. You don't want to be the first guy to try something. And I use the analogy of my friend that opened a healthy restaurant in a mall that had no healthy restaurants. He thought, man, we're going to be the only one. People want a salad in this mall. We're the only place where they can get a salad. And guess what? He failed. Because people don't go to that mall to buy salads. They go there to buy Panda Express. And people speak with their money. They don't speak with their mouth. Right? So don't listen to what people tell you. Like, oh, if someone were to put a salad restaurant in the mall, they would crush it. No, no, you could probably put a second Panda Express in that mall and it would crush it. Not a salad restaurant. So I told them the bear case for this is maybe these guys work so much, they don't care about space, they don't care about amenities. If it's the same price. Even if it's the same price, maybe that market is pretty saturated for RV parks and there's just not room for you. Okay? But the bull case for that is we are buying a park in Louisiana that has a lot of tenants like this. It's not a man camp. They aren't oil workers. It's not that type of an area. But 90% of our tenants are high earning, blue collar workers and they love our park. And we have a waiting list for pad sites because we offer a ton of amenities. We have multiple pools and a great lookout and golf carts and all that. And they don't get that at the other parks. And so amenities can help you stand out, it can help you keep your park full, and it can help you charge more, but only in certain markets. I also told them that I would not start this from scratch because the replacement cost for these is pretty high. You can usually buy them off market for cheaper than you can build them. So I advise them do that. We talked about loans, terms and all that boring stuff, but he was super grateful. Oh, I also told him how to market this. He was about to go take out a loan or is thinking about it to start this. But I said, go to Facebook Marketplace, put up two listings. One for your park that doesn't exist yet, one for a current park that does exist. Right. And so go to Google Images, find pictures of RV parks that have a lot of space, that have a playground. Copy those, put them in your listing, point to the pain points. Like, are you sick of living in an RV park that has no space, that has no playground for your kids? Well, that's who we are. And here's our price, and here's what city we're in. Post that. And then post a generic listing as if you have a park that looks like everyone else's. And then measure how many clicks each post gets versus how many messages it gets. And that is your conversion rate. Side by side, same market, two different parks, as if yours already exist. What's your conversion rate? Is it about the same? Don't open. Don't take the risk. Is it three, four, five times higher? Then that's pretty good, right? But once again, people speak with their money. They haven't given you any money yet. This is just research. They might like the idea of living in a park. You might like the idea of having a park that is similar rents, but more amenities. But does that pencil in a spreadsheet? It does. But in actuality, does it pencil out anyway? I'm sorry you missed that. His name is Daniel. Okay, that's a wrap. I hope you guys enjoy this. And you know what? I think I already said this, but I don't know if I'm going to keep doing these Q and A episodes. At least not as often. Maybe once a month from now on. I don't know. I. I'm not getting enough questions submitted. I don't know how well you guys like them. The data is mixed. So if you could. If you're on Spotify, you can actually comment on episodes. Now, that's brand new. Let me know if you think. If you're on Apple, then you can just email me or on YouTube, just comment. Let me know if, like, you want me to keep doing the Q and A's. Should I keep interviewing cool guys? Should I keep just talking about business ideas? Should I keep doing the hold cobros? Which one should I lean into? Because right now I have three different formats. Hold cobros, interviewing people in Q and A. I just want to know what your favorites are. So let me know because. Yeah, all right. Thanks for listening. Like, subscribe, follow, yada, yada, yada.