Trailer Rentals, Supplements, and Vending Machine Saturation!

Thank you for joining episode nine of the Kerner Office. I'm having a lot of fun. Today was great. I think you'll like it. We had four callers and then four pre submitted questions. And you may notice my voice sounds buttery, silky smooth, much like you're listening to NPR talk about tribal heritage on the tundra or something really weird like they talk about. But I'm proud of this microphone and I'll stand by that. So here's how everything went today. We had a guy ask about his supplement business in Oklahoma and Texas. He has two retail stores and he is struggling with racism. It's actually hurting his business. Next person wants to start a trailer business with his sons. Next person has a dad business. He encourages dads to cook, but he just got laid off. And so he's wondering, is this ever going to make any money? Should I buy a business? What should I do here? 4th person has a sales AI chatbot that he wants to sell to. Storage businesses, of all things. And then we had four pre submitted questions. The first one asked about how to buy a home in a very small community that never has homes for sale. Next one asked about filing a new entity. Third person asked about a stone quarry that wants to. That should be repurposed as a different type of stone quarry that would be more profitable. That was interesting. And the fourth person asked me if the vending machine business is oversaturated. And I went on somewhat of a rant, which was kind of fun, but unusual. So I. So I hope you enjoy today's episode and I hope you join me next week for episode 10. Anyway, enjoy the show. Welcome, everyone. Welcome to The Kerner Office, episode 99 of 9999. Because we're going to be doing this forever. Thank you for joining. If you're just joining us for the first time, this is where you call in and ask your business questions. Maybe it's a failing business. Maybe you're crushing it. Maybe you have a bad partnership or a good partnership or you want to quit your job. I don't know. Ask me anything. Let's see how this goes. So I am going to let in our first guest and he is anonymous. But I think I'm about to let in this specific person. So let's see how this goes. Hello.

How are you?

Good. How are you?

I'm good, man, thanks.

Absolutely. So you are the one asking about supplement business, Is that right?

Yes. Correct.

Yeah. Okay, let's hear it, man.

So we have two locations. I'm in North Texas and southern Oklahoma. And I've been in business in Texas for 10 years and Oklahoma for five years. The first few years growing the business, everything went according to plan, Things were going great. Covid hit and Covid actually skyrocketed our business. We had more people than ever wanting to be healthier, taking care of their health, fitness, stuff like that.

Now, real quick, why don't you, why don't you back up and just tell us about what your business is, what you do, what you sell.

Yeah, so we're retail stores and we do any kind of workout supplements, vitamins, like proteins, pre workout, stuff like that, all sorts of pre made meals, healthy snacks. And then inside both locations we have a full smoothie bar as well.

Okay, so you're selling other company supplements, not your own in these?

Correct?

Yeah. Yeah. Okay. Okay, so supplements store slash smoothie bar. Two locations, one in north Texas, one in southern Oklahoma.

Yes.

What are the populations of the towns that these are in and what are their locations like within those towns?

So they're both going to be right around the town and surrounding areas. About 30,000 people. Okay, and are you asking for the location specifically?

No. Is it on a busy road?

Yeah. The first location, we are right on the main highway. Pretty prime location. Couldn't ask for really a better spot. The second location is in a newer up and coming spot. The last probably two or three years. A lot of businesses, a lot of new developments have come to that area. A lot of older businesses from the same city have relocated to this part of town. And in that one, that Oklahoma location, I'm in a shopping center with about 15, 16 other businesses there.

Okay. Just like a normal outdoor strip mall. Correct. Okay. I actually pulled up your locations here. So without revealing you, I'm looking at where you are. Okay. So sorry, let's back up. You were saying you, what year did you open?

So Texas opened up in 2014.

Okay.

And then Oklahoma was 2019.

And you said Covid skyrocketed your business.

Yeah, it was crazy, man. We about double. A little more than doubled our normal foot traffic. Everything was great. Absolutely. Just like I said, Covet affected a lot of people in a lot of different ways. And we were one of the businesses that really benefited from it.

Okay. What made you want to open that second store five years in?

Honestly, man, it's. The locations are about 40 miles apart. And as far as direct competition from the original location, there was nothing even remotely close. And I had a very regular crowd from the city up in Oklahoma that came down about once a Month as a big group and spent a good amount of money with us. And that was one of the main complaints was from people of that area is that they wished we were a little bit closer. So we went looking around and it took about eight months, almost a year of looking before we finally decided to go ahead and finalize on that spot or that location. But that was the main reason I wanted to open up a second location after about five years. Anyway, that was in the original plan. And we had such a good consistent following from that Oklahoma region. That's why we selected that location.

Which store is doing better and what are their sales numbers?

Each.

So as of. Right. So as a whole. So the Texas location definitely does better. And then as a whole, we do on the month. The Texas location does about 30k a month and the Oklahoma location is. Floats around that 18 to 21amonth.

Okay, what are your net, what's your profit like?

We gross month after month. We stay between 25 and 30%. Gross or margins?

Sorry, gross margins? Yeah. What are your net profits like?

So we're in Texas. We stay around 7 to 8k a month. And then Oklahoma is going to be honestly closer to that 3k mark.

Okay, how many years left do you have on each lease?

Texas is now in a month to month and Oklahoma has the last part of a year. I think there's six months left on it.

Okay, and what are your sales like today compared to at their peak during COVID Significantly slower. What were they during COVID per month at their peak?

So the Texas location we were 55 minimum. We were pushing close to 60k a month in the Texas location. And then we were floating around that 30k in the Oklahoma location.

Okay. All right. So Oklahoma's always been 2/3 to half as big and that it stayed steady during COVID They each got about twice as big.

Correct.

Okay, now what are you struggling with? What was last year? Like when did you start to see sales dip? Are they flat today or are they still dropping? What's going on?

Yeah, and I guess that's my scenario. I'll lay it out for you. And this is where I wanted to hear your thoughts. After Covid, literally following the COVID trend as the fad or the worry of COVID went away way, sales dipped a little bit with that kind of followed that trend. And then one of the biggest issues that I'm having is over the last about year or so, so the towns, both of the cities I'm in, I would say are very political. And so something I'VE had issues with over the last year is I found out from very close friends of mine that there were groups of people. So I'm originally born. I'm from Texas, born and raised here. I've been here my whole life. My father is originally Middle Eastern, and so myself and all my siblings, we have, like traditional Middle Eastern names. And about a year ago, I started dealing with a big group of individuals who were spreading a lot of negativity about me and my businesses. And they were pushing this huge campaign about how we don't support Middle Easterners. And that was a big hit. When I started hearing stuff like that, I've noticed that traffic has gone down. And in our locations, we do have a standard free and a paid, like, platinum, like a membership program that we offer. And with that, a lot of the people that I had heard were spreading or talking about those rumors about not wanting to support me because of my background. I actually saw a lot of those people who were involved in that completely, either deleting accounts or unenrolling from our membership account, stuff like that. And that's been something I've really struggled with.

Let me make sure I understand this correctly. You are Middle Eastern, correct?

Yeah.

So my father's side is Middle Eastern. My mother's originally from the states. I was born and raised here in Texas. I literally just have a Middle Eastern descent. Name?

Yeah, your name. Okay. Now, is it other Middle Easterns that are saying this about you, that you don't support Middle Easterners or.

No. So it's the local people. A group of local people saying that they refused to support Middle Easterners.

Okay, so they're being racist.

Absolutely.

Yeah.

Okay. And what triggered this? Was it Covid? Was it something unrelated to Covid?

Now, it all really started when all the. The most recent, like, political type stuff with all the war and all that stuff started happening. That's when it started. And it's just stemmed from that, I believe.

Would you say that, like, what is the racial makeup of your. The majority of your customer base or is there none? Is it representative of the town?

It's very white, very Caucasian, very Republican.

So representative of the towns where you are?

Yes.

Yeah.

Okay, where's this talk happening? Is it on Facebook? Is it like, what is the medium for this race?

So everything that I've heard, like, from mouths of other people has been spread in two places. And one of them was one of our local gyms, and then one of them was in a business that one of those people who did not want to support Me owned.

Okay, man. First of all, I'm sorry, this. That's. I can see why you want to say anonymous. I didn't expect that coming on this call threw me for a curveball there, but. Yeah, that's. That's tough, man. I apologize. That's happening, especially minutes from where I live.

Yeah.

Has it been. Was it all at once or is it slowly started affecting your sales numbers?

It was a. I would say a slower pace. It happened. I started noticing like the. The negative talk and the loss of select customers and their friends and followers over the course of probably, I'd say four months, five months maybe, and then it's just been stagnant since then. The last five or six months have been stagnant since then. So I guess, if it helps you any. So I guess what I'm looking for is your thoughts or your recommendations on not maybe not necessarily dealing with that issue, but trying to. In a smaller town like this, where that is, some say that's going on. Just trying to generate more sales, more traffic, trying to get more foot traffic in.

Yeah. What do you want to do? If we were to never talk three, four, six months from now, where do you find yourself, realistically speaking? Are you thinking of closing or in.

Six months from now?

No, not now or not from any of that. In the near future? Six months, ideally. Still where I am now, just building out and growing the businesses. My original plans were to have two or three locations. And then I wanted to figure out what my last calling, what my final calling, whatever you want to call it is, and my original plans back when I opened everything up where I wanted to be out of retail, I wanted to be doing something else. I wanted to exit retail, whether it was close, sell whatever it is. I wanted to be out of retail by the time I was 35. So that gives us about two years.

Have you thought of opening different locations in a different city altogether, in a.

Completely different city or in the same city? In a different location?

A different city, third store.

I have thought about it. Yeah. I would say the biggest hindrance is just right now with everything that's been going on in recent times, with the decline of sales, it just, I guess, to be honest, scares me. Finding other people or more help to staff the stores and me go off and do a third location.

Has there been new competitors open up these last five years? Do you compete directly with gnc?

Not at all, no. I'm still in. In Oklahoma, there is a GNC relatively close by, but it's very poorly staffed. They have horrible operating hours. They're literally only open when there's somebody available. They're in a not that great part of town as far as, like, location is considered. And they were there before I opened up. Since I've opened up both locations, there has not been any direct competition that's opened up within, okay, 30 miles or so.

Okay. Have you reached out to any local media or news about any of this?

I have not. I've toyed with the idea, but I didn't know which direction that would take it. I didn't know if it would help things or if it would make things worse.

Why don't you test that at your smaller store in Oklahoma? Why don't you test reaching out to just the local news and just telling them your story exactly as you're telling me and trying to get someone on your side? I would even go so far as to do some background research on the person that you'll be reaching out to and try to find someone that seems like they'd be more sympathetic to your cause because obviously you're going to fight up against that too. Right. Like, the person, the people you reach out to might be just as racist as everyone else.

Right.

I would try to reach out to people that at least appear to be more sympathetic to your cause, and I would just fight back in public. If you have a month. A month lease and you're concerned about the viability of your business or at least one of your stores, what do you have to lose? Yeah. If the town in Oklahoma is just tainted permanently and it's okay, either I close this or I just move this to a completely different metroplex altogether and just hope that this doesn't happen again. Or I just fight back. I just punch back and see what happens. And worst case, my sales drop more, month to month lease, whatever. I get out. Best case, the community rallies around me and says, hey, I'm not racist, I'm not racist, I'm not racist. They all raise their hand and say, I'm sorry that's happening to you on behalf of the town that is a minority of us that is acting that way. And we support you. The majority support you. I could see some sort of a groundswell happening if you were to do that, but people need to know about it. And worst case, you're in the same spot you are now. Maybe sales are a little lower and you just pack up and move home. Yeah, it's true. But what do you think about that? Is that viable?

Yeah, I think, like, the plan as a whole Is very viable. And if it was like to come down to something happening to one of the locations or whatever it is, I don't think that negatively affects me or impacts me. I don't have any negative feelings or towards it. Like I said originally, the plan was to exit these businesses at some point anyway. No, I don't. I see it being a very viable option and I don't have any negative feedback or connotation towards it.

Yeah, I would even make a video. You could write something, but I would make a video of you standing in front of your store just pleading your case and even be specific about your sales numbers. Hey, there's been no new competitors in this area. People are only working out even more. I don't, like, help me out here, what's going on. And you're going to get some haters, obviously, but those haters will just help spread the message even further. Right? Nothing goes viral without haters, period.

Yeah, that's true.

And this is actually more likely to go viral than a more vanilla message, if you will. Okay, so that's what I would do. But I apologize. That's happening either way. It's tough to have forces like that going against you that aren't normal. Right. That shouldn't be there. Yeah.

But no, I appreciate it.

Absolutely. I wish you the best. And let me know how it turns out. Either way.

I will. I'll keep you posted. Thanks so much for your time, Chris.

Yep, no problem. We'll see you later.

Bye.

Bye. Brandon.

Yes, sir.

How are you?

I'm good.

I am pulling up your info now, and it looks like I have two words. Trailer business. I want to hear about your trailer business.

Basically, I. My intention is to copy yours and set it up in a way. I have five grown children, four or two boys that live outside of my town in Corpus Christi. So my thought was, how could I set it up in a way where I get to buy the trailer on my credit, them, run it where they are, pay me back for the trailer, but then eventually build their business up to where they can buy their own trailers and expand.

Okay, so let's back up. What type of trailer specifically?

Those dump trailers.

Okay, so you're looking to start a hauling business with a dump trailer with your sons. You're willing to pay for it out.

By the day or the week.

Gotcha. Okay. And you're willing to pay for the trailer, but you want to structure it right with them, and so you get paid back. Is that right? Do you want equity in the actual business or just to get your money back?

My thought would be basically buy one trailer, pay me back the cost of the trailer, and then I get a percentage every month, just like a royalty.

For having lent them the money?

Yeah, like for general terms, $100 a trailer for 10 years or whatever it is.

Okay. Now what do these trailers cost and how many do you plan to buy?

They're about 10 grand each, depending on your discount. And I would like to buy about three each to get them started.

Okay. And how many of your boys are going to be in this business again?

Two initially.

Okay. And do you have a plan for marketing these or for actually collecting revenue? Is there some sort of a channel that you already have in place? Is there a marketplace that you're going to list these for rent on? Or what is the plan to rent them?

Basically do the rent me stickers on the back, do Facebook marketplace, and then both these two particular signs have a number of connections with home builders, construction and fence building firms in those particular areas around the hill country of Texas.

Okay. Are they, what, what's the personality type of your sons? Are they sales guys? Introverts? Extroverts, Hard workers?

Like sales guy, white collar is very knowledgeable about the construction and stuff like that. So he's a little bit more of an introvert. The other one's more of an sales guy. Go out there.

Okay, what will they be charging for these? What's an average job?

What they're finding in their particular area is most of them are going for about 150 to $200 a day. My thought to get started is $100 a day to build that kind of reputation and then do some sort of multi day discount.

Have they, have they been in business before? No. What about you?

Yes.

I've started a number of businesses over my lifetime and I've always been the guy in the back where you do most of the work, but I fund it and then you buy me out, essentially.

Okay.

Which is fine between two people like you and I, because I can yell at you, I can call you names, and your mom's not going to get mad at me. But when we're dealing with my direct signs, there's another person involved, mom makes me be nice to them, but I also want it to be very clear and legal so there's not disputes later on either.

Sure. Okay. So I would start like before you do anything, I would have your sons start marketing these trailers before you buy anything, before you spend a dime. All those marketing channels that you talked about, except for, of course Putting a sticker on the trailer because there is no trailer yet. Get that going. Put up a website use card C A R D to put up a landing page and see if you can draw some interest first. Assuming you do now, they're going to, they're going to actually want to rent it and then just tell them it's not ready yet, it's not available on that day, whatever. We're not in business yet. However much or little you're comfortable telling them. Assuming you do see enough interest to warrant buying a trailer, I would start with one. I know that's tricky because you can only rent out one at a time, but I think it's. I think you just want to hedge your bets here. I think you'd rather have one trailer that you have to unload at a small loss than three if it doesn't. If there's a downturn in the economy or downturn in local construction or whatever. I would hedge your bets by just buying one. And I like your structure of, you know, $100 per. What was your structure again? $100 per what for paying you back?

$100 per day and then multi day discounts for the week?

No, for the structure, for you getting compensated for this.

Oh, Basically the trailer's 10,000. My thought was probably do $1,000 or $500 a month until it's paid off and then drop it to 250amonth for 10 years or whatever just for.

It's like your royalty or your equity in the business without actually having equity in the business. What is the backup plan if they stop paying you? What is there recourse? Do you just say because it's family? It's weird. Have you thought about that?

Yeah, basically that was my plan is to set up essentially a small contract. That said, these are the payments you have obligated to and if you don't, then I will come repossess it and then use the Apple tags to make sure we can find it at all times.

Perfect. Yeah, I would put some flexibility in there in case they have a slow season, slow year, slow month, but I think that's great. Just have a very simple payback period. I think you're on the right track. A smaller dollar amount, once it's paid off in perpetuity, maybe forever. Sounds too scary. So five or ten years as you said. So the only real change I would make to your plan is put more emphasis on the marketing and less emphasis on the structure. You want to be sure that you can actually rent these things. Out because we hear things anecdotally all the time. Or, oh, man, I can't get a trailer. Ooh, I should buy a trailer. But that's not enough research. It's just not. I would start with one. Even if you can get discounts for buying multiple, start with a website. Start with some marketing. Get some bookings. Even if you're. The booking is for the next day and you're not going to have the trailer for a month. Just cancel it, get their name and number, call them back in a month and go that way.

That's a great idea. I like that idea of just saying, hey, it's not available for the weekend you wanted. How about this weekend? And if I get enough, then, hey, let's go get one tomorrow and we'll put it out there.

Totally. Or you could even rent a trailer to rent to them and just break even or even lose a little money.

That's true. That's a good idea. As long as I'm charging them at least what I'm paying or close to it, there's not a much of a risk.

Yeah. We were looking at the same thing in the pet cremation business where we were going to buy this $100,000 crematorium, and then we realized, man, all of our competitors are. They're only using this thing 10% of the time. We could just rent it from them hourly, and that's what we're doing.

So that makes sense. And then if it gets to a point, you can always buy it. But for right now, if it goes away, it's not that big a deal.

That's right, Brandon. Hope this helps.

It does. Very much. I appreciate it. I appreciate all your help.

Absolutely. Have a great weekend.

You, too. Take care.

All right. Bye, David.

Hey, Chris. How are you?

Good. How are you, man?

Good, good.

Welcome. Big fan office. Thank you very much. So you were recently laid off, and you have a side hustle that encourages dads to cook. All right, let's hear about it.

Yeah, so it's a little bit of a. The meta thing that's going on is that there's a lot of options on the table. And, like, I've been looking at maybe purchasing a business, and I've. While I'm doing that, maybe also looking for jobs. I'm also just trying. I've got my kind of fingers on a lot of different pies right now. So part of this is about focusing a bit, but I've. I keep finding myself drawn to this thing that I'm building to help Dads cook for their families, reclaim family dinner, make it less chaotic and whatnot at a high level. Curious about your thoughts on focus. And then I think in as I'm like balancing joy and energy and harmony fighting with this thing that I'm doing. It's been really fun. I've done some cohort classes, I've helped a bunch of guys, and now I have a community that I'm. I'm building up and have a newsletter and all these different things. Like, how would I. I'm looking for kind of creative ways to maybe grow it while I can maybe maintain or do these other things or maybe just stop at all. You know what I mean? And, yeah, just. Yeah, love.

Love your.

Love your thoughts here.

So how many months left of Runway do you have? Would you say?

I probably have till maybe till the end of the year? I would say probably like maybe five or whatever that is. I can't do the mental math right now, but yeah.

Okay. And how. What is your background? If you were to have to go get a job tomorrow, what do you do?

So I've started a couple few companies. I've been in. I've been primarily in digital health. I've been building products in the digital health space. Had one company I started, bootstrapped it, did a few million in revenue, had a team. But after that company, I exited that company and worked. I'm. I'm technically a product manager, so I work with my. Build digital products effectively.

Okay. How is your job market today? Oh, have you been looking?

You've been looking? Yeah. Yeah. It's a bad. Product managers are just. Just being dumped and laid off by the thousands at the moment. It's a really. It's a bleak market right now.

Okay. Pretty high cost of living where you are?

Yeah, I live in the LA area, so, yes.

Okay.

High cost. Yeah.

What is your MRR on your cooking project today?

Oh, it's at. It's at zero right now. It's almost a zero. Yeah.

So you've got a zero. Yeah, I did a little research, I'll admit. So you've got a. A free newsletter and then you have a $20 a month product, is that right?

That's right, yeah.

So have you not sold any of the $20 a month products then?

I haven't been marketing them. I. So I originally, when I first started, I was doing cohort classes and I was like sharing that on LinkedIn and getting people to join and I was charging like 150. I originally started at 30, and then I bumped it to 75 and I was discounting it and the total price is 150. I wasn't getting much many people after 75 bucks to like. But yeah, I've decided to go to more like recurring revenue model, lower price, doing less of the intensive course and just did a once a month cook along and some meal plans and also just have a community to help support these guys.

Okay. Is there a precedent for a competitor doing what you're doing and doing well or are you inventing this model?

Yeah, there are people doing this in the fitness space quite a bit. Especially there's a guy that's doing stuff in the kind of over 40, 50 year old like fitness men, male fitness space and doing quite well. There's like various people doing this in this space like this.

Okay, but what not for dad's cooking specifically.

Oh yeah, not for there.

There are. There.

There's a couple of guys on to have a Facebook group but they don't really have. It's not like a very like active. There's like an also like a Reddit group called Dadit Chefs as well. So there's some. But it's like free stuff going on.

Do you have much experience doing like paid ads for digital products?

No, I don't. I'm learning about it, but I've no clue very much about that.

Okay, now tell me about the. Your interest to buy a business. You said you were looking at like a backfill business. What. Why do you have that interest and what types of businesses catch your eye when you're shopping on bizbuysell like we all do.

Yeah.

So the one I was looking at is called Backflow Prevention Services. I like this business because it's. It's mandatory in 30 states to. For commercial businesses to get this like test. So it's like really cheap, quick, fast test that's done by. For making sure water doesn't go back into the main line. I like that business but I'm just. That's. It excites me because it's like they have. Businesses have to do this on a regular basis. Commercial businesses have to do this. It's not high, it's high margin and it's not like a lot of the tests are like cert. You get certified. It's 100 bucks, 120 bucks for the, for that. So I'm looking at business. I'm trying to. I'm just tired of tech. So I'm tired of that tech world and I'm trying to. I grew up in grocery stores and Cafes and my family had those. They had a distribution business and things like that. So I it all in food. And so I've just been.

I'm.

I like the tactic tactile, like just using my hands, and I just like the simplicity of those businesses. They're messy because of employees. And obviously, it's a very different type of management than, like, managing as a product manager with, like, designers and engineers and things like that. So there's a little bit of a difference there. But, yeah, like, I'm attracted to that. I'm attracted to taking back a little bit of control of my career and also just trying to find something with, like, cash flow that is cash flowing and profitable and things like that. So if.

Yeah.

How much money, like free cash do you have to invest in a business?

So I was definitely going to be considering my own cash, some portion debt with SBA loan or some sort of loan, as well as seller financing. That would be my kind of. It would be a combination free cash plus maybe like 100 grand. I would say around 100 grand.

So you could use that or some of that to put down in addition to seller financing and. Or an sba.

Correct.

Yeah.

Okay, so here's my gut, like, from everything you've told me, you're laid off a few months ago. Your job market is really tough right now. You have experience managing people. Is that right?

Yeah, yeah, definitely.

And you're. You feel comfortable with that? Like, you. People like you.

Yeah.

Yeah, I love people. No, I'm not a jerk.

No, definitely not.

Very collaborative. Yeah. Nice. I try to be. I'm fair and firm. Yeah.

Yeah.

Okay. I feel like the time. The phase of life that you're in today is not the phase of life to chase your passion. Right. The dads that cook thing, it sounds fun, but it just doesn't feel like you have that luxury right now. And you're doing it because you want to be doing something, and you should be doing something. And good on you for doing something. You're not just sitting there watching Netflix all day. You're building. And I commend you for that. But I don't see a path for this side hustle being enough to cover your monthly burn right. In the foreseeable future. Yeah, Like, I would love it if you were to tell me, man, I know this guy and this guy that are doing this, and this is their model, and they're making 70 grand a month, 110 grand a month. 10 grand a month. Anything where it could be like, okay, let's take Some of that market share or, okay, let's go capture these dads that they're not even looking at. These guys are. They're only doing Instagram organic and they're crushing it. But no one's doing it on TikTok. Okay, let's talk about that. It just scares me if you're inventing a model. And it scares me that you don't already have an audience, that you could push this to the 19amonth scares me. Like, I've done a newsletter before that scares me because it is just a slow, linear grind to get that to be five, ten grand a month even. So I feel like you should just keep doing that as your outlet, but not expecting to rely on that as being a form of tangible income for you and not continuing to work in that direction. I think if the job market is crap, as I believe you say it is, I think you should look seriously at buying a business, specifically something in a niche that you have experience with. I wrote a newsletter about this about a month ago. I have a five or six step scoring system of if you should buy or build a business. And one of the scores is if you have a lot of experience, then you should be more likely to buy that business. Because in my opinion, the risks are much higher when you buy a business because you have something to lose. Right. And so if you are a product manager going to buy a restaurant and you're obviously not trying to do that, that would be very risky. Whereas if you're from the restaurant industry for 20 years, that would be less risky. And so I would just shop, start shopping on Biz by Sell. Despite what people say about it, oh, there's no good deals left on Biz by Sell. They've all been picked through. I don't agree with that. There's good deals on Biz Buy Sell and on Zillow and on Crexi. There's good deals everywhere. There's a lot of tire kickers and dreamers and guys that just play business on Biz Buy Sell. And so if you want to get a broker or an owner to answer your caller email, you've got to break through the noise and get really creative because they're sick of dealing with all the tire kickers. And I feel like you're serious. I would tell them that you have cash, you prefer seller financing, but you're also willing to do sba. And I would find something that can cover your monthly burn on day one with a lot of upside. Right? Upside, in my opinion, being they're not charging enough or they don't even have a website. Or they have a website but they're not marketing at all or they're complacent. Like in my opinion, when it comes to buying a boomer owned business that's the biggest and easiest to find upside or things like that going in. Getting SBA qualified, finding a really good SBA lender, being willing to put in some cash. Hopefully the seller can hold a note and find any like home service. Any kind of boring, ugly business that is netting at least six figures a year. I would put all of your energy and focus into that and I think you'd find something good. You're in a city with 20 million people. Right. There's got to be something.

There's a few things here. Do you. So what I'm like at a. Which like your worry as well is I don't have experience like you. You've written a lot about like tree. Tree trimming and things like all this kind of home service. I've never done any of that stuff before. So it's not like I like I. I was thinking of backflip. I don't have any experience in plumbing or backflow. I'd have to go get like test or go get certified in that too. But I'm open to things like that. I just, I'm. Is there.

Do you.

I do have. Most of my experience has been healthcare. So it's like I know healthcare very well and I have credibility in. In the. Especially in the healthcare space. I've been looking at like medical billing companies, coding companies, things like that. So I wonder if that's a. Should I be looking in that area or should I. Or really just doesn't matter. Industry agnostic. It doesn't. I should be looking at.

There's. Do you follow my business partner Nick?

No, I don't. Unfortunately.

Sorry.

So he bought. He lived in la. He bought a medical billing company in Boise for a couple million. Sold it two years later for 5 or 6 million.

Wow.

And didn't really do a ton of. And just. He didn't even operate it. He had an operator that he gave minority equity to and they just made some good efficient changes. The owner was great. She stayed on. It was just a great outcome. I actually invested in that business. But I like that idea. Medical billing. I learned a little bit about that industry when I helped him sell it and I learned there's an opportunity. I don't know how you feel about this but it is a business strategy. There's an opportunity in Medical billing today to buy a medical billing company and to outsource the labor or to use AI to cut costs.

Yeah, it's a huge thing people using like India, Philippines, using folks like that to do that. And AI is doing fantastic too. And I know a bunch of the AI companies that are doing that so very. Maybe I should just go down that. Is there a great way like to find those? Because I've had a lot of trouble finding those businesses like.

I would start calling them, try to hire a VA to find the owner's info, a skip tracer and text call, email them. Find the ones that seem to have been around for a while, seem to be undercharging, seem to have outdated websites. And that's the nice thing about looking for a business to buy that is very niche and specific is that you can hone in on 10 of them. Right. Especially if they're not listed. And you can be pretty sure that one or two of those 10 are at least going to be willing to sell. And then you got a grand price. Right. And then you got to get to the closing table. So maybe try 20 or 30. But still look on biz by sell. There's stuff on there. And I wouldn't be completely afraid of home services. I would be afraid of more high skill or more high risk industries, manufacturing, restaurants. But home services, you could find a hundred different home service type businesses that are not very high skill where you could become experienced in a weekend of YouTube videos.

Yeah.

And that might make you nervous, but you could learn a lot, right? Binging YouTube videos.

I've learned quite a bit doing YouTube. So that's. Yeah, it's my, it's my, my university now.

Okay.

And what was skip tracer again? What was that?

That's just what they call someone who can find the contact info really well or they have tools at their disposal. And on upwork there's thousands of people that call themselves skip tracers which really just means they have login info to tools that. Okay, make that available.

I didn't know that. Okay, so I can have them go find. And should I be localized to California or. I guess your colleague was in LA as well and found some place in Boise.

So that's if you're willing to move. I'm a huge proponent of, of looking for the best deal anywhere and just moving there. I'm a big proponent on it. If you're beggars can't be choosers and if you find an amazing deal on the other side of the country, then move there for it.

Oh, he moved. I didn't realize that. Yeah, so that was the, that was a key detail. All right, so he moved to Boise.

He did, yeah. And they were not. They were lifers, they were SoCal lifers. So it was a big deal for them to move, but they do not regret it whatsoever.

Yeah, I can imagine. With that kind of outcome. That's huge. Okay. And then you asked about advertising and things like that for the dad cooking thing. Is that something I should, should also be doing as I'm like just filling the cut, like feeding the soul of it?

I don't think so. I don't think so, honestly. Because that's a whole nut to crack and you're going to have to put a bunch of money into it just to break even on ads like the play there is to have some sort of a $49 course that you sell that you can just break even on with ads and then use those leads, sell something more high ticket to them. That's the whole Russell Brunson playbook there. But that's. I wouldn't split your time between the two. I would just keep your newsletter going, stay in the know, keep that fire lit, but not really lean into trying to grow it because this is. Looking for a business to buy is at least one full time job.

Got it.

Okay.

This is super helpful.

Yeah.

If.

And if your colleague knows any. Anyone in the. Anyone selling in the medical billing space, that'd be. I'd love to hear.

I'll have him reach out to you, he'd be happy to help.

Yeah, that'd be fantastic. I appreciate that.

Absolutely. David, thanks for coming on.

Thanks Chris. Have a good day.

Yep, you too. See ya, Patrick.

Hey, Chris, how are you?

Good.

How are you man?

Having a good Friday so far.

Good. All I know about you is sales AI.

Yeah. So I'm a software engineer by background and have been tinkering over the past six months or so on an AI product. Basically we have a way for people to, for us to build and train AI models to do the sales process for businesses. And originally we were going after really white collar category and there was going to be a lot of integrations and a lot of other things that were really complex that needed to be done before we would really get product market fit. The meantime I had the opportunity to show this product to someone that's more of a blue crawler product business and won 3 million dollar a year sales category. And it was as if I had shown a caveman fire for the first time. You get really excited about the product, feels like there's a lot of room to run. So obviously it started me thinking about what other categories, what other areas could I get into. And one of the things that I'm running into is there are many businesses in that space, whether it's a product or service business, sub $3 million maybe family run type business where we can help do some of their inbound sales qualification. But I'm suffering with honestly too many options and not really knowing where to start A and then B, like how do I contact these people? Because they're not LinkedIn or Twitter people by and large they're out in the field doing their business.

Actually these, in my experience, these are the easiest guys to con to contact and I'll tell you how. But I first want to hear about the guy you talked to with the when you say $3 million that the revenue of his business or is that the potential size of a customer he would be to you?

Yes, that's the top line revenue of his business. He's a dealer for in a product category.

What industry? Tell me everything you can about this guy.

Yeah, it's, he's in the portable shed storage industry. Has a lot of inbound for, for his customers for product features. Will it fit, will it be a good fit for my property? Those kind of things. And yeah, so he gets a lot of inbound. Some of it's really low quality or not super qualified. But at the same time he may get two or three a week that are ready to move to make a purchase, you know, that day or that week. Filtering through those is a challenge for him.

Okay, so by nature of that business he just has a ton of questions and probably 80% of them are the same, right?

Exactly.

Do you need to level this? Like how do you bring it in? How do you get access? What stuff like that. And so he's thinking if I can just upload my FAQs, basically this AI software can just chat with my customers and save me a ton of time.

Exactly. And we help them do that. So we import all that data and build a model that's really customized for their business. And they don't have to do anything other than start to send customers that way and connect to their socials, start distributing those phone numbers, etc.

What would he be willing to pay for something like this?

The next best option for him would be hiring an employee to do it, presumably either in house or some type of va. That would lend me to believe that there's a fairly high dollar Amount, thousand dollars or so a month to be able to do that. Being that we're software, obviously we've got a pretty good margin, so we could offer a really competitive rate relative to what it would cost to hire a person to do this, even if they were offshore.

Would this software live on the website? It's just a chatbot, basically, yeah.

So it's omnichannel. Right. So it's on the website, it can answer text messages and phone calls as well as Facebook messages, those kind of things.

Okay, so chatbots are crowded. Right. And I'm sure you know that.

Right.

But I think what you have going for you here is the owners of these blue collar businesses have never heard the word chatbot in their life. So it might as well not be crowded if they don't know that it's crowded or that chatbots are commonplace. They were commonplace long before AI. Right. I remember there was a, there was a whole chat chatbot craze with Facebook messenger, like in the 2018, 2019 eras. But what if you took this product and made it SMS based, like with Twilio?

It is already.

It is already. Okay, yes. Is that like the first case use for it or is that one of the uses for it?

That's one of the uses. So you can, you can call it, you can text it, you can chat with it through Facebook Market or Facebook messenger, etc. As well as chat with it through the website. So basically any channel that you're pushing traffic to or getting leads from, with the notable exception of if you have a storefront that you walk into, how.

Would you prefer to charge for this? What's your gut? If you were to charge, have to charge for it today, what would you put up on the website?

Yeah, I think I would probably charge in that 6, $700 a month, recurring, monthly recurring category.

And do you think people would pay.

That based upon the feedback of one? He seemed really interested in doing that and in fact is trialing it right now to see if it's a good fit for his business. As we go out of people that I'm that are in my circle, maybe there's a little less dollar amount to be had.

But yeah, it's funny because the same demographic, these business owners, these boomer business owners, they're the first to say, keep jobs in America, don't outsource jobs. But the second you pitch to them, hey, I could replace your employee with a $500 a month chatbot. They're in. They're so in.

Right? Yeah. One of the things he communicated with me was like, getting people of quality was really hard. Right. He's middle America. And getting people that were really driven and motivated to do a good job was difficult for him, even at a high rate. So having the ability to automate it is awesome for him.

Yeah. Okay, so have you sold. Is this live? Do you have a website ready to go? Is it fully built out or are you still in the.

Fully built out. We're still working on some additional features and stuff. It's definitely something that could be turned on live today.

Is this gentleman willing to start paying for it? Because there's a difference between. This is amazing. Where has this been on my life? First take my money.

Yeah. Had a conversation about what price point we feel like that's comfortable. And he replied positively to that. He didn't pop out his credit card.

But okay, if I were you, I would start with this guy, charge him whatever, doesn't even matter, and then craft your landing page around his industry, the shed industry, literally. And then I would scrape a list of all of the shed businesses in America or in a state or whatever, start texting them. Just different approaches. Hey, honestly, you could start by texting them a normal question that a customer would ask, right? Just to get their attention. Hey, like are you open or are you open over the weekend? Or do you have this model in stock? And then just start a conversation of what you can do for them. And I would get on the phone with this guy and say, hey, I'm going to give you half off, but I really want to pick your brain and know, like, all of the pain points in your business so you can start using those pain points as part of your sales pitch to these other business owners. Because this is when your total addressable market is so big, you really have to start so niche. Like, don't name this shedbusinesschatbot.com name it something generic so it can be anything. But point all your branding towards the shed industry. And just for a month, just for a month, just see how it goes. And are you able to acquire. I like to use the 1% rule personally. So if you have 10,000 shed businesses and you. All of them, let's say you have 10,000 shared businesses and all of them see your outbound, right? They see it. It's an email or it's a voicemail or it's a text and you can convert 100 of them, then to me, that's a scalable business. And that sounds, oh, easy. It's not easy. Sometimes it's a tenth of a percent and I would not try to scale that business. But if you can convert 1% of them, then with additional tweaking you can probably convert 2 to 3 to 4, even 5% of them, which is a great business. And then take that learning, scale it as much as you can and then if it's not a big enough business for your liking yet, then add another industry and just change the branding on the website because if you're getting your first customer to give you all this Data, that's your LLM and now you, it's, that's less friction for customers two through 200. It's going to be much easier to onboard them. Right. Whereas it's going to, you're going to handhold all these different industries and it's not going to be efficient for you. I would start with just, hey, serendipitous. This is what I'm doing now. I have a chatbot for SHED companies because of one conversation I had with a guy. And you're assuming that sample size of 1 can scale and you might learn on the first day after you talk to 10 other Shed guys that this guy was an outlier, but probably not.

Okay. Yeah. Great feedback. Thank you.

Yeah, absolutely. I wish you the best of luck.

Thanks, Chris.

Yep. I think that's it for today on the the live call ins. We had a couple others but they weren't able to make it at this. So I have a few pre submitted questions that I'm going to answer. There was one person, they didn't leave any contact information whatsoever but they didn't want to be anonymous. They asked. I'm going to read their question exactly how to buy a home in a very small community under 40 homes where there are no acceptable homes publicly for sale now. So first of all, I'm going to focus on one word in here. Acceptable. Acceptable for you. I imagine it sounds, this is tough. Okay. It sounds like a pretty exclusive community. Under 40 homes, the average homeowner stays in their home for three years. If it's a community like this that's exclusive and highly sought after, let's call it five years. That means statistically speaking, under 40 homes, let's say there's 35 homes divided by five is seven. That means every two months there should be one home for sale. So according to statistics, you can wait and check out a home every two months or if you're not wanting to wait, which I imagine you're not, the best way to do it is just to knock all 40 homes. As someone who's knocked over 20,000 homes, I'll tell you that knocking 40 homes will take you one evening. And a home is a very important, important decision. And it's one that most people don't take lightly. And so if you really want to live there, I would spend an evening, call it a Tuesday or a Thursday night between 6 and 9pm and just knock all the homes and say, hey, my name is Anonymous and I really want to live here. Bring some sort of a flyer or a business card or something and try to associate, try to get them to associate you with something memorable. I'm the guy that randomly knocked on your door that you want to tie the memory of you to something. So maybe you wear a weird shirt or something like I'm the guy in the flannel or whatever. I'm the guy that wore a coat in the middle of the summer. It'll just be easier. And then if you can get their phone and or email and check in with them every six months or so, I'd love to suggest some cool high tech option. But this, this is a personal decision. It's a big decision for them, it's a big decision for you. And I would just knock all the doors. So. Next question. We have best service to form a legal entity for a new business. In the past I've used Legal Zoom. But there has to be a better way. Specifically I need an S corp in the state of California. So I did not do any research. I don't know of any websites that does this. I'm sure there are many. I hate LegalZoom. I'll just tell you everyone in the world, I don't like Legal Zoom. I don't like the way they do business. I don't like their emails, their follow up. There's all kinds of shady onboarding practices to trick you into buying this or that. So don't use LegalZoom. If I were him, I would go to Upwork and post a job for a paralegal or someone to file an S corp. It's going to be a lot cheaper than finding a lawyer to do it. Next one is. All right, this is a really good one. So we just discovered that our patented Tufa stone quarry maybe ground into Pozzolon. I don't even, I've never seen that word in my life. And of use to the cement industry. Initial testing will run three to ten grand. We just put everything into a sawmill. How best to approach this potential opportunity? All right, so if I'm understanding this question correctly, you own a stone quarry for patented Stufa, patented Tufa stone, and you think it could be used for cement, and you're assuming that could be as if not more profitable than what you're currently using it for. And it's going to cost three to ten grand to know for sure. To me, this seems like an asymmetric bet. Three to ten grand. I imagine there are tons of people in your orbit that would be willing to pay that for a percentage of the upside. This reminds me of the guy that threw away a hard Drive in the UK that had $130 million worth of Bitcoin on it, and he wanted to go dig up the landfill, and he could not afford to do that. It was going to cost like 1 to 5 million bucks. So he raised the money successfully to dig up the landfill. Has he found it yet? I don't think so. I imagine I would have heard about it. But it's an asymmetric bet. You get. You find 10 guys that will each put in 500 grand, that that's a small percentage of their net worth, and they're going to get 40, 50, 60% of the $130 million Bitcoin outcome, or they'll get nothing. It's a gamble, and there are a lot of gamblers out there. So this is three to ten grand. Honestly, I would probably make that bet. Email me. And if everything looks good, I'd probably take that bet if I get a percentage of the revenue or profits. So just find an investor if you don't have the money. Last question. Is a vending machine biz oversaturated? I don't think any business is oversaturated. Any business in the world. That's my hot take for the day. And I'm not just trying to sound controversial. I feel like people only look at one side of the equation when they look for saturation in a market. For example, virtual assistant agencies, they're everywhere. I've talked about it before on a previous episode. Every time I get on Twitter, I'm launching a VA agency. And it's different. It's Latin America. This one's different. It's only the Philippines. Oh, this one's different. It's only Pakistan. Everyone's launching them. It's saturated. It's oversaturated. How do you know? How does anyone know if it's saturated? Do you know how big the market is? Do you know how much demand there is? It just seems saturated because in your little bubble, everyone's launching it. Now, if you're Launching it in that bubble and only selling to that bubble, then there's a better chance that it's saturated. But even so, there could be more demand in that bubble than there is supply. Is anything oversaturated? You can't answer that definitively unless you know how big the supply and the demand sides are of that market in that niche. And so if you go figure that out somehow, if you're able to figure out the size of the market, if you're able to say, in Roswell, New Mexico, there's 10 plumbers, and in every city, every other city in Roswell, New Mexico, that matches their demographics exactly with the same population, there's five plumbers that I think you could say with reasonable certainty that it's oversaturated. Okay, that contradicts what I said. No, it doesn't. Because if there are twice as many plumbers in Roswell, New Mexico than there should be, based on other demographics of other cities in New Mexico, then it almost certainly means that those guys are not fully maximizing the potential of their business. They're not fully marketing as well as they should have. Or guess what? They're not out of business. They're still in business. Right. So I'm assuming they're. All 10 of them are still able to feed their families, which means, for some weird reason, there could be something going on in Roswell that makes the demand for plumbing much higher than average. And so I just. I take issue when people say it's oversaturated because of their anecdotal sample size, seeing something in. In their immediate orbit that seems to be over saturated, when maybe all 10 of those plumbers are garbage. They all have terrible customer service. Maybe they're all overpriced and you can come in there with a fair price or with great customer service and be number 11 and do better than the other 10. So is the vending machine business oversaturated? Absolutely not. And I don't need to know anything about the vending machine biz to answer that definitively, because there's room for everyone. It's capitalism. And if you do a better job, then that means the other guy will have less business or go out of business, which means that you will be successful. So instead of worrying about if something is oversaturated, ask yourself, do I want to go into this business? Do I love this business? Is there an asymmetric bet in this business? Do I have an unfair advantage in this business? Do I have a way of finding new vending machines or finding places to place new vending machines that other people don't. That's the question you should be asking yourself because there's opportunity everywhere. So don't worry about the other guys. Just worry about what your preferences are and where you have an unfair advantage. I think that's it. Thank you for listening today. This was a lot of fun. This was episode nine. Originally I said this would be a ten week test, that would be next week. But Noah Kagan is joining me for week 11. And the size of this podcast and YouTube doubled this last week, so we were growing about 10 to 20% a month, which I was thrilled with. Or not a month per episode. And then this last one, episode number eight, for whatever reason, it just crushed it. So I'm gonna keep doing this and I'm having fun and I enjoy talking to you, but I have a strong need for more callers. Like what? What's going on? I got all kinds of people listening to this and watching it and no one is just filling out a five question type form. I'm not charging you. Come on, let's talk business.

Come.

You don't need to ask me a question. Just come tell me about your business and then maybe I'll help you come up with a good marketing idea. So let's talk business. Go to. I don't know where to go. Go to my pin Tweet or just DM me, DM me on Twitter or email me Chrisofounders.com and we will send you a link to the form to come on this show. You can be anonymous, you could pre submit your question, you could not be anonymous and ask me a question. Or let's just talk shop and we'll have a lot of fun. So thank you for joining. I'm glad the live stream worked today. You guys are awesome and see you next week.