4 Top Ways to 2X Any Business

Alright, so in this video, we're going to discuss the four ways to double your business. And I didn't come up with these ways, but what we're going to do in this video is I'm going to go through and talk about what's a good number and how you can get these numbers, and what are some real tangible ways that you can double these numbers to ultimately double your business. So Tommy Mello is a guy that I follow. He runs a $150 million garage door company and he's scaling it to a billion dollars. And he came up with these four ways. And when I heard this on a podcast that I was listening to, I'm like, that's great. But like, how can we actually use this information to grow our business? And so that's what we're gonna do in this video. My name is Phil Richer. I'm the owner of Flash Consulting. We partner with local service businesses, carpet cleaning, electricians, H vac, plumbers, duct cleaning, a whole bunch of different companies, and we help them grow using digital marketing and technology. And so in this video, I'm gonna go through these four ways and discuss ways that you can implement them into your business. All right, so the first one that he says is know what your average ticket is. All right, so what is average ticket? If you take all your jobs that you've done last year, take the revenue divided by the number of jobs, that's your average ticket. I know people get caught up in like, oh, I do this service, this service, this service, and this average ticket service is here. This average ticket service here, this one's here, that's fine. But knowing your average ticket, and it could be based on the different service that you offer, but really, we want to know what's your average ticket? Let's say it's 400 bucks. And again, every business is different. Some of our clients are at 15,000, some of them are at 400, some of them are at 1000. It all varies. But if you're going to grow your business and double the size, then one way that you can do that is you can double the size of your average ticket. And how can you do that? You can offer new services, you can increase your prices, you can sell more things, you can cross sell things. Obviously you can come up with a million different ways to increase your average ticket. But knowing what your average ticket is. So what is a good number? I would say a good number is typically if you build in all of your expenses and you still have profit of about 20% on top of that, that is a good number. So whatever you do with a 20% profit margin is a decent number to at least start with. And then how do you get this number? You could go into your QuickBooks, you could simply look at the revenue versus the jobs and divide it and you can get the number. You can also use your CRM. A lot of CRMs have this data available to them. You kind of just got to dig a little bit, but those are the ways that I would look at doing this. All right, the second thing we have average ticket. The second thing is appointment booking rate. Now, this is a huge one for local service businesses. I actually used to be the director of business development at one of the largest air duct cleaning companies in the country. And this was a huge point of emphasis for us. And the reason is because there's really two schools of thought on this. So your appointment booking rate, let's say you're like a carpet cleaning company. Your appointment booking rate is basically giving them a price and then letting them come out and do the work. So it's really your booking a percentage. Is this is it? There's no. You don't go out and try and sell another service on top of it. You can, but no one's going to turn you away when you get to their house. When it comes to like H vac World electricians, anything that you're going out on site for free estimates the appointment booking rate is going to be a lot higher because people are not saying, yeah, come on out for that price, that kind of stuff. So Service Titan did a report on this and what they found was that the average booking rate was 42%. And I just gave you some examples of how this might skew. But one way that you can double the size of your business is by increasing your booking rate from lead to appointment set. So what is a good number? 42% is a good number. I would say if you are not providing price over the phone, you're going out for free estimates or free service of some sort. This number should really be around 60%, 70%. And then how to get this number. What I would recommend, if you have a CRM, a customer relationship manager, you can keep track of the leads and calls that come in. A lot of times people don't do that. So what I would recommend doing is if you have a CSR team, they can keep track of their lead calls on a piece of paper and say like, each time they get a call, they just check it and then at the end of the day they put them together and they send them. That's one. It's more of a manual process. If you use a tool like Service Titan or some of these other ones, they will keep track of this number for you. But that's one way to do it. And then the second way to do it is if you use a tool that counts all your calls, regardless if there are lead calls or customer calls, that kind of stuff, you can kind of back into this number. Let's say half of your calls are for leads. Then you can divide that in half and kind of figure out what this number looks like for your business. Cool. So we have your average ticket, your appointment booking rate, and then the next one, which is your face to face close rate. And again, this is different based on the industry that you're in. Carpet cleaning, for example, you're not going to go out there and they're not just going to kick you out if you give them a certain price. I mean, they might, but it's like, you know, 1% of people are going to do that. So what they recommend, you know, in H Vac World, Electric World, your face to face close rate should be 50, 60, 70%, depending on how good you are at closing the deal. And so let's just put 60%. This is really high. Some people are down in the 30%, some are in the 40%. And some people might say, hey, my industry is 30%, which is fine. What's a good number? I would say that you would know what a good number is and I would challenge you to don't make excuses for your industry. Or my price is this or my price is that. Because let's say that Your average is 30% and you could double this to 60%. Well, then again, you can double the size of your business. So how do you get this number? Old school. You can keep track of all the estimates that you go out on and then how many you close in your CRM. You can do the same thing. There's a bunch of different ways. This is a pretty standard number. You go on this many sales calls and then you close this many deals. You should know your conversion percentage. And there's a bunch of ways that you can do that. All right, and then the last one, which is my favorite, is your customer acquisition cost. And most people do not think of this number and a good customer acquisition cost. What I recommend is 3 to 10% of your revenue is a good customer acquisition cost. So what exactly is customer acquisition cost? How much does it cost you to get a new customer in the door. And this could be on revenue. This could be on lifetime revenue. So for your business, let's say that your average ticket is $400. Well, then you should spend no more than 10% or $40 on getting that customer, which is your customer acquisition cost. And if you have a 3% customer acquisition cost from that channel, then that's going to be a really good one. It's like, what, $12 or something? And so once you can narrow in on your customer acquisition cost, it's really just a numbers game. Because how do you get this number? Let's say you brought in 100 new customers this month and your marketing budget is $1,000. Then you know that you spent a thousand dollars and you got 100 new customers. And so your customer acquisition cost is going to be $10. So you know that if you spend $10, you're going to get a new customer. So how many times can I spend $10 and where can I spend $10 to get my new customers? Because if this is 10% of your job is $100, 10% of your job, then it's really just a numbers game to just keep spending more and more money to get more jobs and to grow your business. So how does this help you double the size of your business? Well, if you're spending 10% on customer acquisition costs, can we tighten up our marketing and lower this? Or get rid of the stuff that's at 20% customer acquisition cost and only focus on the 5% customer acquisition cost? What is my customer acquisition cost? If you don't know that, that's a good place to start. So those are really the four ways that you can double your business. Based off of what he talks about, those are the only ways that you can double the size of your business. And it's pretty easy to get that information. If you're interested in doing marketing for your business or discussing strategies and ways that you can use this information to grow your business, I put a link down below and be sure to hit like and subscribe and we'll see you in the next video.