How to make SO much money it makes you sick
This is a transcript of a business-growth keynote by Alex Hormozi focused on maximizing company value through strategic prioritization, leverage, and solving core constraints. Hormozi presents practical frameworks: define goals (magic-wand exercise), treat "strategy" as prioritization, use "volume × leverage = output," and map every initiative to three objectives (acquire more customers; increase lifetime value / gross profit; reduce business risk). He emphasizes finding & fixing the business constraint, improving product experience before scaling, recruiting A-players and having hard performance conversations, the "Rule of 100" for lead generation (100 minutes of content, 100 cold outreaches, 100 warm outreaches, or $100/day in ads), and capital-efficient scaling (simplify operations for franchising).
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My goal here is to make you guys as much money as humanly possible. If you're a lazy mother, you better have a load of leverage. Now you have a 300 million dollar year exit rather than a 25 million dollar year. He's like, that sounds better. Here's what's crazy. We 10x the company. He just added 10 million dollars to his net worth. So we're gonna start with a little exercise. I'm gonna call it the magic wand. Alright? So right now if I have a magic wand or you have a magic wand, you waive it and you get to make as much money as as you want. All right? So write down or put at least think about it in your head what number that would be per month. Okay? How much money are you making per month? Okay, hopefully it doesn't take too long to think of a number. Now who here currently is making that amount of money, please raise your hand. Wonderful. So what we have just done is establish the gap between where you are and where you'd like to go. Fantastic. So here's you, here's goal which we all just established. Now in scenario one, you have these goals, right? And there's all of these different ways of getting there, right? And the problem is you're like, which one do I do? Before I explain more on that, scenario two is I don't know what to do to get to there. Let me tell you how these feel. This one feels like anxiety. So if you feel stressed or you are overwhelmed about which thing you should do, that's this. If you don't know what to do, you're at a loss, you feel hopeless because you're like, I don't know what the fuck to do. Like I don't know, I don't know what to do. And it's not about picking, it's like you don't even know where to start. And this has been really important for me to identify. If I feel anxiety, it's because I don't know which thing to pick. If I'm feeling sad, it's because I feel hopeless. I'm like, okay, hopelessness means I have a lack of choices. So I have a lack of choices means I am, I have ignorance around this topic. Okay? This makes it solvable so then I can start solving for. I need a path so that I know what to do. It's the only thing I know me personally, that's what makes me sad, is if I don't know what to do, I get sad. Is this resonating with anyone here okay? So when you're deciding which thing to do, this is a clear case of lack of strategy. All right? Now, strategy is a big, fluffy, amorphous word that gets tossed around a lot, and no one knows what the fuck it means. But it's probably important, and in my opinion, is the most important. But I'm going to give you a different definition for this to make it a little bit more useful. Okay? Strategy is just prioritizing. That's all it is. Like whenever you hear someone say, we have to figure out our strategy, it just means we have to figure out our priorities. That's all it means. And in layman's terms, it's what's going to get us the most bang for the buck. If you want the fancy definition that I have, it's how you choose to allocate resources that are limited against unlimited options. That is strategy. And the tough part about this, about strategy in general, is that when you're looking here, you have all these options. Strategy is figuring out, actually there's one that's right here that takes us off the page. Because the most costly thing in business isn't just the unknowns, but it's the unknown unknowns, as in the things that you didn't even know you could pick from. I show this to say that right now. If my goal here is to make you guys as much money as humanly possible by the time I am done my 46 minutes, then if I can just get you to make the one chess move that will make you the most money, then it will roi everything you do this year or maybe the next five years. Cause fundamentally, people don't actually move faster than other people. Like, you see me walk. It's not like I'm hyperactive. It's just you get more for each step. When you are more strategic, when you have better priorities and you allocate your resources, time, money, energy into the fewest moves that gets you the most bang for the buck. You make the most money. So back to this. You guys want to hear a different example? So we have a PR company that we bought. We dove into the data, and it looked like 85% of the businesses churned out within two or three months, which is horrendous. 15% of the customers paid the most and stayed the longest. And they were different. I was like, wild idea. What if we stop selling these 85% and only sell these 15 and cater our stuff to only them? And he was like, that would kill my business. Mind you, recurring theme of the first one When I told him to shut his agency down, he had to go to zero and then built the next thing. And for nine months he was basically at zero. Ish. Hard, like tough. Very simple to say. Very hard to do. You guys imagine if you have two locations. I was like, hey, I. I can help you get there for a year. You're gonna have to make no money. Cool. What do you do? Play a long game, right? And he was willing to do that. And that was me talking to him off a cliff every week, being like, hey man, we're gonna get there. And so with this individual with the PR, he cut 85%. We catered the messaging and we made it way more niche down to this specific avatar. And we 10x the price. And now we sell more units than we did before.we 10x the company strategy rather than thinking, okay, what am I going to do to just get more now? There's always a time for more. Believe me, violence is the answer. Big fan, all right. Of brutal, relentless effort. But we want to make sure that we're capturing the most per unit of effort. And so the equation for this. Is volume times leverage equals output. Which means the more times you do something and the more. The more you get for each time you do it, the more you get ultimately. Now, if you're a lazy motherfucker, guess what, you better have a shitload of leverage. No, you can be lazy and still make tons of money. You just have to have lots of leverage. You gotta be really strategic in the moves you make. The more activity you have, the more you can let a little bit of that violence work for you. But it ends up becoming a cap soon enough. Because at the end of the day, we only have X amount of hours. And if you want to do big shit, you need a lot of other people's hours to work for you, which is a form of leverage. I'll give you a third one. So we had a company that is an association of. Trying to keep it vague, let's call it Dentists association of Dentists. They had a business that, like, they glob all the savings together of all the dentists so that they would charge less than all of them saved with. With the conglomerate of buying power, right? So if you save $30,000 a year as a dentist, they would charge 10. Super sticky model, great business. And so he's like, hey, I think I could sell this thing for 20 or 30 million. And I was like, how many dentists do you have there? He's like, I don't know, 500. And they all run the same systems. He's like, yeah. He's like, what's the average dentist make like per unit? It's like I don't know, 500,000. I was like wild idea. What if we take 10 every year, bundle them up and sell them from 100 million every year, get 20%, give 80% to them. That'd be chill, right? I was like, then you get your exit every single year. And then if you want to sell it, we exit the machine that does roll ups. Because in that you have roll up machine does 20 or 30 million a year in profit and we get 10x on that. Now you have a 300 million dollar year exit rather than a 25 million dollars a year. He's like, that sounds better. I'm with you. I agree. Strategy prioritizing. What move will get me the most for the effort I put in? All right now this is a perfect transition to. You're like, okay, that sounds very pie in the sky. So next TikTok theory of constraint. So everything that we do@acquisite.com and the approach that we have with growing any business is spending a lot of effort to try and identify the constraint of the business. Because every single business is constrained. There's one thing that is limiting its growth. So right now, and here's the fucked up part, many who here works all the hours of the day, like most of the hours that you're awake, okay, Half of you, if your business is not growing as fast as you want it to, you are working on the wrong stuff. If it has stayed the same and you were spending all your time working on it, you're not going to get more hours. So you're doing the wrong. So it means that you have not properly identified the constraint of the business. So I'll give you an example of this. We had a media company that came to us, big YouTubers, 40 million plus subscribers and they were like, hey. I was like what's the goal? They're like we want to make money. I'm like, cool, love it. Great goal. So they're like, we think that we need to create a better media machine. It's like, okay. They're like, we need to really systematize this and do it better. It's like, okay, how are you monetizing adsense by the way? Very inefficient way to monetize. Okay. And so they're like, I think we're, I think this is. These are all the things that we need to do to eliminate our constraint for Our production. Cool. It's like, have you thought of wild idea? Maybe we just. Like, the constraint of the business is that you don't have something to sell. I was like, you're like a 97 out of 100 on media and you're a 0 out of 100 on shit to sell. And you're trying to talk about how to get to a 99 rather than like, if we just went from 0 to 20, we would probably make you 10 times more money than you're currently making. And so that is an idea of the theory of the constraint, right? Like, the constraint of that business was not media. And many of you, the constraint of your business is not making better fucking workouts. Right? That's not the constraint. It's not the constraint. Right, that's not the constraint. And so right now, if you spend all your day working on shit that doesn't move the ball, working on the wrong shit. So let me tell you how we do it so that hopefully you can too. So one of the questions I like to ask is, why can't we 10x this business? Like, why can't we? And sometimes asking that question and then it becomes really apparent what the problem is. And the answer is, sometimes, well, we just need to hire all these people. It's like, well, then let's fucking do that, right? And so here's how we transition into the tactics around this. So this is the actual first part of my planning process, prioritizing process, strategy, process, whatever shoe fits you for figuring out what we're gonna do with a company that we're gonna grow. So when we're thinking about all the objectives, all the things we could potentially do, it has to map to one of these three objectives, which is, one, how's this thing that we're gonna spend time, money, effort on gonna get us more customers? Two, how is this thing that we're gonna spend time, money and effort on get us increased LTGP make them worth more? Or 3, how is the time, energy, et cetera, going to decrease the risk that this does not continue to happen in the future? Which is another way of translating how do we increase the enterprise value overall? So, for example, if you do all of this stuff, that's great, still really risky because if you die, the business dies. Now, if we have to hire someone to do the same thing as you, is it going to get more of either of these? Probably not. Will it make the thing more valuable? Absolutely. Does that make sense? So I'm going to segue briefly, we're going to Side quest. Imagine two people, five million top line. Five million top line. Two million in bottom line. Two million in bottom line. This guy is a single owner, runs all the day to day, has lots of minions known with real brains, and they just do what he says, okay? If this person dies, the business dies. This guy has a team that runs the whole thing, and he makes $2 million in income from the business, but it doesn't require him. Who's richer? This guy. Question is, how much richer? A lot. This guy, because he doesn't have to do anything, means that somebody else could also not have to do anything and also collect that $2 million a year, which means his thing is probably worth, depending on what type of industry it's in. 10, 15, sometimes $20 million. And so when this guy. Here's where the leverage comes in. Big L. If you go from 2 million a year to 3 million a year in income, he just added $10 million to his net worth. This guy is concerned about all of the tax evasion strategies because he's trying to maximize his income and forgetting the fact that the asset is the thing that's going to build his net worth. This took me a really long time to learn, like an absurdly long time. Everything I did was all about like, how do I take the income, be more efficient with it, blah, blah, blah, blah, blah. When it's really like you become wealthy from the shit you own, not the shit you do. So everybody here has a business, and right now, many of the businesses in this room are not valuable. No one would buy them because it's really just you with some helpers. And so the idea is that we have to transition. And this is a skill that is worth getting because no matter what you do for the rest of your entrepreneurial career, you're going to need people. You need to have the skill of hiring, recruiting, training, onboarding, managing talent. Who here has one amazing superstar person who works for you? Cool. Imagine if you had four of them at your one location. How easy would life be, right? You make a ton of money. Here's what's fucking crazy. The difference in small businesses and big businesses is how many a players they have. And so what happens is most small business owners hire a lot of people, get lucky, one sticks actually works their ass off at a fair rate. And you're like, man, if I had six more Sandras, right? I'd be good to go. The thing is, is that big business owners maintain a higher level or a lower tolerance for mediocrity. And so they actually do keep looking until they find six sandras. And then it does become too easy for them to kill it because I got six sandras. How could I lose? That's the idea. Make sense. Okay. This took me a long time to learn. Like, I would just put up with people who are mediocre. And right now, many of you have a. Think of somebody who's mediocre on your team. Actually, I'll make it easier. Think about that person that you thought about today who you shouldn't have thought about, because if they're not making you money and you're not sleeping with them, don't think about them first thing in the morning. All right, so anybody have somebody in mind? So if you have that person in mind, that person is taking up 25% of your bandwidth. What a cost, right? And probably many of you. The biggest lever of growth is on the other side of a few hard conversations. I now talk to portfolio CEOs all the time, and it is incredibly clear. The people who will win and the people who will not is simply based on their ability to confront discomfort. And it's interesting because this is a mostly, it's kind of 50, 50, actually, audience between male and female. But a lot of guys beat their chest. I can cold plunge. I can run a long time without stopping, lift lots of weight. But you can't just say, hey, man, I think you suck a little bit. Real can't do it. And for that reason, they suffer for fucking decades because they can't fire Sarah. Not Sandra. Sandra Stud. Right? Can't fire Sarah. It's like, yeah, I know she slept with one of the clients, but, like, I mean, I think her heart's in the right place. It's like whenever you're. Whenever you're qualifying that someone's heart's in the right place and deep down they're a good person. It's because it's obvious they suck. Right, Hit a nerve on that one. So right now, do me a favor. Write down the name of the person that you know you need to get back to and start what we call a performance improvement plan, which is you've got 14 days to fix your shit or get out. And many of you can't even have the conversation because you're too much of a flat pansy. Real talk. And this will keep you poor. Seriously, like, you have, like, you got to grow up, got to be able to have hard conversations. Be like, hey, my biggest. My biggest piece of advice for this is, you know the shit you say about Sarah while you're here behind Sarah's back. God, she's just like. She's been slipping lately, you know what I mean? Like she's not showing up on time, she's not cleaning up after the classes, she's short with the clients. I had two people complain about her, right? Say that to her. That's it. Just think about what you'd shit talk and just say it to them. It's just the truth. Just say it to them. See what happens. One of two things. Either they're like, fuck, I've had my head up my ass. That's why it's been so dark, right? You're totally right. Thank you. Pull it out, right? And all of a sudden they have a total 180. That happens like one out of five times, four out of five times, you say, these are the things that you have to do. They either say, I won't do that, or they say, sure, I'll try. And we both know they're not going to. And then you elegantly exit them from the business. The problem is that right now Sarah teaches like six classes. Now. What? Gotta find somebody else. She's killing your business. So get rid of Sarah. Alright, so that was a side quest, but hopefully we found some treasure there. And write the name of the person you need to have that hard conversation with and be like, there's this fucking speech and this guy was talking shit about you and I should have talked to your face. And so this is me talking shit to your face so that I feel better about it. You kind of suck. Okay, thank you. So right now there's a lot of shit that you guys probably learned so far. You're learning tomorrow and the rest of the day, et cetera. If it doesn't do one of these three things, toss it, number one. Number two, you might only be able to do one of them or two of them. And so then you got to pick, okay, of all of these things, which of these has the highest likelihood of working with the least amount of effort? You do that one first. And as silly as this sounds, many of you won't do this. The reason I say this is because I talk to people who are making a million a month, Million a week, and they sometimes forget too. So, like, when you have the same conversation over and over again, you start to develop frameworks around it, all right? And the first framework that I wanted to give you around strategy is how does this get us more customers? How does this make them worth more? And how does this increase the likelihood that those two first, things don't stop happening. If it doesn't map to that, forget about it. Just cut it. Because there are other things that will do that that we should be doing instead. Cool. Now, the second framework is gonna go one level down. What? Who? How? So usually when you do this whole thing, you get a big list of what's right. These are all the things I gotta do. What? What? What? What? What? What? What? You're like, fuck. There's a lot of what's. Who's gonna do it. Most of the time, you're like me, right? The difference between the guys who become bigger business owners and the ones who don't is they have to think, how can I get my team to do this for me? Now, this is not a team team talk. But I am telling you that the reason the gym launch went from 3 million a year, or whatever it was to 37 and still cranks, was because of Layla. Because I was like, we're gonna make it the Alex Show. And she's like, that's a terrible idea. And so she built a team and started empowering the team. She's like, you can't do that. She started taking things off my calendar. I was like, hey, I like that. She's like, no, not for you. That's for Sandra. Look, I got six Sandras. They all want to work. And so what ended up happening is, has anyone given a task to someone on your team and they actually just did a great job with it? And you're like, oh, thank God. That was awesome. Anyone had that happen? Okay, so big businesses do that all the time, and you just do it with lots of Sandras. And if you can't give shit to any Sandras, then you're the problem, because you have really low standards, and you're a pussy. You can't have hard combos. That's what it is. Like, literally, it comes down to that. Big macho, guys. Can't tell the female trainer that she sucks. Can't do it. Can't do it. And so what happens is we have this big list of what's. And then we put Santana on the first two, and we're like, but, man, it'd be cool if we could do some of these other ones. Who should we give it to? And then we start assigning the who's. But here's a fun trick. If you've given the same who the same thing 12 weeks in a row, like, each quarter, and the what's not done, the who's the problem. Winners win. And I'm sure that the best people that you have on your team hit the ground running, started taking shit off your plate, immediately started executing everybody, love them. Remember what that felt like. That blueprint is what talent looks like. And you just have to do more of that, get more of those people, which then opens up the next thing, which is I'm not the type of leader who will attract that type of talent. I don't have time to get into fixing you right now, but that is what the next thing that happens is. Okay, fantastic. So TikTok over for this strategy session. Go to the next one. All right. Oh, good. I'm great. I'm crushing on time. Next framework for you. More Better. New. So as soon as we figure out that we have the highest strategic leverage activity that we can in a business, we then ask ourselves, can we just do more? Why can't we do more? I want to do more. More money. Let's do that. More, more, more. Right? Or we say, can we do it better? We don't have to invest any new resources. Just do it better. We're going to go from calling leads in 30 minutes to calling leads in under five. Deal. Fantastic. Once we do all the mores and all the betters, then and only then do we do new. Now here's how most small business owners decide what they're going to do. Oh, there we go. All right. New. And the thing is, a lot of you guys are going to come back from here with lots of new. And you're going to be like, hey, team, I'm going to vomit all over you. I'm going to make no plan. It's going to be awesome. And they're just going to be like, let's give it a week. He'll forget about all the things he said and we'll go back to normal. Real talk. It's going to happen. Gym launch, since we sold it to whatever ish years ago, whatever the time was 2021. I'm so proud of Kale and the team because they consistently ask, thank you. How can we do more of what we're doing? How can we do it better? GEM launcher's grown 40% since Alex and Layla exited the majority share. We still own 30 plus percent of it, but. And I think in a lot of ways, Kale's a better CEO than I am because I also like new, shiny things too. But Cale is super disciplined. He's an exceptional CEO. There's a lot to learn from him. How can I do more? How can I do it better? So it's like hey dude, I think we should be getting on TikTok. He's like, you know we could also. Do we fucking double our cold call team do that? What if we do that? What's the likelihood that if we double our cold call team we'll make more sales high? We already have a trodden path there. Let's just do more of that. But what about TikTok? It's like Jin likely that we're gonna get sales. I don't know. We've never done it before. I don't know. But what about this kid I saw on the Internet? He's making millions. Let's just double our cold call team and then let's look at our better and say like do you think we can clean the numbers more? Do you think we can improve the script? Do you think we can follow up faster? Do you think we can personalize the reach outs more? Probably. And so right now this is real. Real. The thing that is killing most of you guys is the desire to 10x in 90 days and then not doing it and trying something new and hoping for a silver bullet that never comes. It's just, it's 100 golden BBs. Like the big businesses, it's just golden BBs. It's just improving lots of little things over and over again. The 40% improvement that Jim Watch has had since we sold our majority share has. There's been no one thing. And man wouldn't I love to make that short video. There isn't one thing. We just improved a lot of little things and that creates the big outcome. And so right now you probably have this big list. Of should do's. Like I should do that. I should probably email my list sometime, right? At some point I should do that, right? I should probably do more cold DMs or do more reach outs. I should probably make more ads to run. I should probably do that. I should probably figure out our pricing and optimize it. I should probably create that sales training program or get my team to go through that sales training program. I should probably set up a role playing cadence for my team so they sell better. But you know what's new? That sounds cool. The should dos. If you actually just wrote all the things that you need to do down and then you tick them off and you realize that it takes two years to build an exceptional business and you did nothing but just actually do all the shit you know you should be doing. You usually build a pretty exceptional business. It's the rush that kills everyone. It's the hope that this new thing is somehow going to shortcut the work that needs to be done. And like, this has just been truer and truer. Because the thing is that that list for a $10 million company is longer and bigger. That list for a hundred million dollar company is longer and bigger. And it's just shit that needs to get done. And so the faster you can confront the work that has to get done, the faster you start getting the getting, getting to the getting. There you go. Is this making sense? All right, thanks, man. Appreciate it. All right, now you're going to have a lot of different things. You're going to have a lot of different things that you could do, right? And you've noticed this is the central theme is like, you've got a lot of decisions to make, and I just want you to make the right one. I want you to make the one that makes the most bang for the buck. And an easy way to order this is impact, ease. There we go. So when you have your big list of shit, just put it as 1, 2, 3, 4. Just put a number next to it. Really easy. Lots of impact. Really easy. Do these first. Then once you've done all of those. Hey, don't consume any more information. Once you've done. Wait, but I haven't fit. Once you do all of these, then start working on these. Then start working on these. Then fuck these. I really want to rebrand the logo. Why? No one knows that you exist to begin with. What are we talking about? You're like, I want to rebrand. It's like, why? Like, you have a nameless. No one has any association with your first thing. Like, Xerox is just made up letters, Right? They created a brand because branding is the consistent action of associating the unknown with the known. Right? I know I'm supposed to talk about social media branding. I didn't think it was gonna be social. Super important for you guys. Because you don't need to for now, in my opinion. Not because it wouldn't benefit you, but because there are other things that I think would benefit you more. Just to be clear. Okay, now I'm gonna give you this little. This little tirade, and then I may. I may have time, but I may not have time at the end for Q and A. We'll see. So oftentimes the things that is limiting the business is the big obvious thing. So we have really big egos about our business. We assume that it's exceptional, we assume that it's excellent. Right? But in Your heart of hearts. You probably know that if you were actually fucking exceptional, you would not be asking questions about how to get more leads because you would have people referring their friends. And referrals, by the way, are nonlinear in that they are exponential in nature. 2 bring 4, 4 bring 8, et cetera. So the book, the Hundred Million Dollar Offers book was probably my first big experience with that because I spent like a very long time writing it, and then I gave it away for 99 cents and I made one post, and I think this one had like 20,000 Instagram followers in total, and I didn't have really any other platforms. And that book to this day sells more copies every month than it did the month before. And like last month it sold 25,000 copies. It's like almost 1,000 books a day. A thousand customers every day. No marketing spend, just word of mouth, right? And 14,000 five stars. And so, like, it's the big obvious thing. And from being in the room with millionaires and, sorry, billionaires and deca billionaires, the thing that has become so clear to me is that the people who are obsessed with their product are the ones that get the compounding. And so every business needs to have some sort of compounding vehicle within it. Otherwise you're going to spend the rest of your life trying to promote it. So think about it this way. If I spend two years trying to write a book, and at the end of the two years, it's exceptional, I'm going to give the alternative example first. If I spend two months writing a book and I publish it, and then I have to spend the rest of my life trying to promote it to get people to buy it, it's a tough life, low leverage. On the flip side, if I spent two years trying to build something fucking incredible and then let my customers market it for me for the rest of my life, more work up front, less work long term. It's just that being willing to delay satisfaction or gratification is, in my opinion, the single greatest skill that you can develop. And what's wild is that a lot of you guys think you have that skill. You only do when it comes to cookies, but not when it comes to money. And so you, like, give your clients all these lectures about self discipline and being hard and like, you know, believing in your better self, but, like, you will take actions that are in direct contradiction. That same thing, it's just we're switching calories for dollars. Same thing. And so when I see a lot of the business, like the gym owners that struggle it's just the big obvious thing. The sandwich sucks. They're like, dude, what's the new marketing thing for, like, gyms? I'm like, have you tried your sandwiches? They are terrible. Why would you want more people to know, Right? Like, it's real, though, right? Like, imagine I had a mediocre book, which is what most people would have, and then I spent tons of money trying to market it. Why would I do that? It sounds ridiculous. When you think about it. You're like, I'm just going to let everyone know I'm mediocre. That would suck. But that's what a lot of people in this room do every day. And so the thing is, is that in my opinion, if I were to start a gym over today, I would consistently work on the actual product, the experience, the way people get greeted, the trainings for all of the teams into the world's simplest model. And until people were not leaving, I would not be worried about bringing more customers in. Once you get that right, then when you're pouring all this gas in, you can catch it. Because if you got a hole out the other side, your constraint is the fact that people don't stay. And so the biggest thing that you have to solve for, because now we buy into a lot of brick and mortar chains. It's one of my favorites, unsurprisingly, is ltv or lifetime Gross Profit Everything. The guys who can spend the most money on marketing are the ones who make the most money from ads. So when you see these massive marketing companies or these massive campaigns that are out there, it's not because they're better at marketing. It's because their LTV enables them to spend as much as humanly possible on the marketing. If you print cash on the back end, you can get silly on the front end. This has to sink in. Like, this has to sink in. And I keep being repetitive about this because I continue to get the same questions whenever I go. And it's like, what's the new marketing trick? What's the new hack? It's like you have to solve the root issue. And it's kind of like the. It's like the gal who's like, hey, is it keto? Is it intermittent fasting? Is it, you know, like, I'm just trying to give the parallel here. Like, that's what you sound like. You don't get it. You got to understand how to count your macros. It is what it is done. And so, like, in the business, it's like you have to figure out how to get the mousetrap to work even at its simplest level, so that people actually like the thing you have. And I just feel like so many of the gyms that I see and I go to, it's obvious. Like, takes five seconds to see why they're not successful. And the gym owner, because they're in it, can't see it. Because their ego, their identity is attached to it. Because you think that if your gym sucks, it means you suck. And that's not true. So you have to break that. You should just be like, oh, yeah, we suck at that. Onboarding non existent. Churn through the roof. You should see my trainers slaving each other. It's terrible place. Absolute pig stock. Right. So what's your plan? I'm gonna market it. I'm going to market it. So to give a quick recap, and if I have time for Q and A, I will. One brand is making associations between things that are intangible with things that are tangible and unknown. So things that people like. If I hold a bunch of bricks of gold on stage or I hold a bunch of stacks of cash, you will make associations of money with me. And if you didn't know who I was, you would assume that I have something to do with money. That would be your assumption. That would be the association. If I stand next to a porn star, you would assume other things. Right? Associations. And so if you want to build the brand, associate the service that you have with the intangible ideas you want the prospect to believe about you. So if you want them to think that you are clean and you are friendly and that you care, then start there. Magic wand. If you feel sad, immediately translate that into, I do not know what to do next. It massively simplifies this very, like, hard page, painful experience. It's been really helpful for me. So if you feel hopeless or you don't know what to do, it means you just don't have options. Like, you don't perceive that you have options. It's a lack of options. So you just have to become informed. All right, so whenever I think sadness, I think ignorance. It's like, oh, that's solvable. And then I can start attacking it. On the flip side, if you have lots of options and you feel anxiety, it's because you don't know how to pick, which means you have to prioritize. It means you have a lack of strategy. Strategy is getting the most bang for the buck. It is. Allocating finite resources against infinite options. And some of the biggest strategic moves are Outside the board. And that's where sometimes having gym, launch other people, et cetera, is helpful because you have outside eyes. So your mouth inch below your nose, but you still need somebody else to tell you. Bad breath. I heard that the other day. I really liked it. Right now, there's a constraint in your business. If you do not know what the constraint of your business is, you will not solve it. You'll continue to do the shit you have been doing, and that has not been getting you what you want. So right now, unless you change the activities you do, you will not change the getting that you are getting. So if you go back, so I'll give you a different one. So. Intelligence and learning. This will be fun. So the definition of intelligence as I define it is rate of learning. It's a speed. Someone learns fast, they're smart. They someone learns slow. A little slow. Right? Rate of learning. Okay, what does learning mean? This is how you can remember it. Same condition, new behavior. Which means if the phone rings and I trained you, and you answer it one way before I train you, and then I have the same condition, the phone rings again. And then after I trained you, you behave differently. You have learned. If you come to this event and you do things, and then you leave this event and you do the same things, you have learned nothing. Which means that change in behavior is the way that you can measure intelligence. The speed at which you change behavior within the same conditions is your rate of learning. The faster you do that, the smarter you are. And so some of y' all are. Hold on. I gotta figure out the political one. Dumb. But again, when I define words or operationalize them, it becomes a lot more under my control. So I'm like, man, I don't want to be stupid. It's like, I gotta do this thing. I went to this marriage seminar, and they say that when my wife walks in the door, I should say something nice to her. Damn right. Walks in the door. You went to the seminar and you're like, nice blouse. She's like, is that the top one or the bottom? Like, I don't know one of them. Right. And so, same condition, new behavior. It's also a great way to teach your team, which is like, I'm going to present this condition. We're going to train. And when I present this condition again, I need you to change your behavior. That's what learning is. And so everybody here, if you don't know what to do, then you're not gonna be able to change your behavior. Which means you're not gonna get a different outcome. So most of the success that I've had is my effort to try and boil everything down into an inputs to outputs equation. I remember when I was studying for the GMAT back in the day, I found this research study that showed that the number of problems that you solved was in direct correlation with the score you got on the test. And I was like, oh, yeah, okay, this is a clear input output. Like, life isn't always this clean. But I was like, fantastic. So I did about a stack of phone books this high. I did four hours a day for 16 weeks of problems, and then I scored above a Harvard's mid score. I didn't start there, but I had the graph. I was like, the more problems I do, the higher my score is. And by the time I got to the actual test, I was like, I've literally seen every one of these problems before, and I've done all of them 100 times. Right? So it became really easy. And so if you don't have the inputs, outputs equation, which will be the last thing I do because Kale asked me to talk about leads, then you're not going to get there. All right? So I'm going to give you guys a sneak peek. You can write it down. You can't take pictures or talk about it. There's only eight ways to get customers. You got warm outreach, you've got cold outreach, get paid ads, got content. These are the only four things that you can do. So if you claim that your constraint, because everything's amazing about your gym and your trainers aren't sleeping with each other, and the gym's really clean and people don't churn, and you're priced appropriately, and you have really good onboarding experience, and people get reached out on a regular basis to check in on them to show that you actually give a shit, you do all that stuff, right? And you think that your constraint is more marketing, which, by the way, everyone thinks that's what it is. And if you keep thinking that nothing changes, maybe wrong. And anyways, let's talk about leads. So these are the only four things you can do. You can either post content, do warm reach outs, do cold reach outs, or run paid ads. Simple. I like to quantify this by the rule of 100, which means you either spend a hundred bucks a day on ads, you do 100 cold outreaches, you do 100 warm outreaches, or you do 100 minutes of content. You do it every day, and if you want to get there faster, do more. Guess what? You'll also get better because you did more. Just like the problems on the GMAT test. If you're not doing this stuff, what are you doing? You might be thinking about marketing or advertising, maybe strategizing, planning. You're not doing any of it. And the amount that you get will be directly proportional to how much of this stuff you do. This is how you let other people know about stuff. That's it. That's all there is. Now, o. P is other people. You've got your customers who can refer you, people. You've got affiliates who can send you people. You've got employees who work for you, and then you've got agencies. Those are the other four types of people who can get you the stuff. If you think about it, any of these four, do these on your behalf. This, by the way, is leverage. If I can go get my customers to tell everybody about my book, then I won't have to. If I can get affiliates, all the chiropractor places in a five mile radius from my gym and all the massage Studios in a 5 mile radius radius from my gym to just give a free month with any new customer they have because they know that I will treat them right, then I can just have 200 different businesses that come to me. Now, do those 200 businesses come out of the sky? Nope. What would you do? Warm reach outs, Cold reach outs, run ads or make content targeting those people, then they'd come and then they do those things on your behalf. Agency will do those things on your behalf. Or if you do all that stuff, then you Cold outreach, cold outreach, warm outreach, paid ads, make content to get employees, and then the employees will do those things on your behalf. Is this simplifying some shit right now? Business can feel confusing and usually it's because we have not defined terms. If you define the terms, then you can know what you're actually talking about rather than like making noise with your face. Okay. If you don't make noise with your face and just know what you're talking about, it becomes a lot easier because the variables become defined. And so if you want to get more leads, you have to do these things. If you want to get even more leads, you get other people to do these things for you, which starts with you doing these things to get those people. That's it. I have three minutes, so I'm gonna see if I missed anything. By the way, giving away really good free stuff. Great way to get more people to opt into your thing. Just in case anybody needed to be convinced about doing free Stuff. Who here wants to know what it looks like when it's all the way? Right? Yeah. Talk about scaling it. Okay, so this gives you a little bit of vision for the future. So we love local brands. They're great. They're wonderful capital compounding vehicles. What you need to know is how much does it cost to open a facility? All right, Cost to open. Then you got to know your top line revenue, or more specifically, your bottom line profit per facility. The ratio between these things. Let's say it cost me 100k to open a facility, and let's say I make 100k per year, then I have a 100% cash on cash return. Who here remembers what the stock market is? Less than that? Right. Which is why I like it. Now, this would not be that interesting to me. Why? Because I know there's a lot of operational drag associated with opening a facility. Just make 100 grand, right? And so the idea is, how can I. Is there a way that I can get a more leveraged model so I can make maybe like 250 to 500,000 per facility? And then maybe even if it cost me 500 to make 500, then I only have to open 1/5 as many facilities in order to compound my cash. Now, the way to do this, and this is one of the things that I've observed with some of the most successful franchisers in the space, is you have your facility now. It has been your special child. You have lots of doodads and lots of whiz bangs that you've attached to it. Specialized sessions, blah, blah, blah, blah. The franchises that are the most successful simplify it. Even if their corporate or headquarters has, like, all this stuff, when they want to scale, they massively simplify. They think, how little square footage can I possibly use? Because I'm not using this to fulfill my ego. I'm using it to fill my bank account. Big difference. How little can I make this so that I'm really efficient with capital? And then how can I make it as little operational drag as possible? I can do it with six people, but can I do it with three? How would I incentivize those people? I know I went from like super dirt or sorry clouds to dirt here, but that's. That is how you unlock going from five locations to 50 locations. Locations. And then you start building the machine that builds the locations. So then you have launch teams that fill it up before it opens. You turn it over to management. They keep running it. And the big key of making all of these work is that it can't just be based off some unique acquisition channel, because those all eventually go away. All advertising platforms will eventually become too expensive, and they will eventually die because the tension always moves, right? And so the only way to become enduring with your business, like, if you really want to, not, like, if you want to sleep well at night, you have to fix the back end. If you know that if you don't sell any new customers, you're still going to be fine next month, and you do that for three or four more months and you'll still be fine. That's the perfect business to then go market. But, like, that's the boring work that no one wants to do. I'm going to end with this one thing. A franchisor of a really popular, not really popular. They had, I think, 20 locations. Franchise came to me, and he's like, my franchise isn't working, right? And they had, I think, six corporate stores, 14 franchised. And the average store cost about a million bucks to open, and they made about $150,000 in profit per year, right? It's like, you might as well just like, invest in a stock and just not bother, right? Like, that's. That's what you have to think with. And when I saw that they were doing, I think the average was like 1.3 in top line and 150 in bottom line. And I think they were running, like, a very small margin. I thought to myself, I think it was actually less than 150 point is shitty margins. He was trying to figure out how to market his franchise better. How ridiculous is that? Right? But the thing is that, like, many people who are in this room are thinking the exact same way. And so instead, what I said was, hey, man, I actually think your margins blow. And I think you have a lot of interest, because that's why I took the call. I knew the brand and I was like, I think you have really good products. I think you just have to get the ops right? So get your margins in check, right? You've got this menu that has 500 items on it. Boil it down to the top 15 that everyone usually does. Look at all the ingredients by type. See if we can negotiate better deals with vendors, because we're going to consolidate all of our demand. We'll get more volume, et cetera, et cetera. And so what I did was I said, hey, we've got 12 months. I want you to spend one month, 12 months in a row to get 1% profit back. Month one, you get 1% back. That's all you have to do. It's my only thing. That's 1% back. And next month you'll find another 1%. Next month, you're gonna find another 1%. So all you have to do, hey, if you find three, three months ahead next month, another 1%, and 12 months from now, you would have a business that would be sellable, would be investable, and would have already tripled or whatever was the profit of that and made it a scalable enterprise. But he had spent 10 years, 10, trying to scale the franchise. When it was the big, obvious thing. The Sanchez just wasn't that good. The sandwich in the literal sense was okay for the customer, but it was terrible for the investor, so you had to fix the model. And so I think right now, a lot of everyone here, as much as everybody loves to come for leads, that's great. A lot of you guys are just serving mediocre sandwiches. And I think if you spent a year eating your own sandwich, you would immediately see all the things that are wrong with it. You'd fix that, and then the rest of your life, you'd be able to scale this thing. Thank you.
