How to Start a Business From Nothing (Thank Me Later)

I made my first $100,000 when I was 23 years old, when I opened my first gym location. In this video, I'm going to cover everything I learned from that. And so first, it's going to be how I started it. Next, my first $100,000. And then third, and most importantly for you, the lessons and tactics that I still use to this day that you can use to, to help you grow your business. And it felt appropriate to film this video in my current gym in the background because this is where it kind of all started for me. So let's talk about how this even started. The reason this was the riskiest move in my life was that one, quitting my job was the hardest thing I ever did. Two, it was This is during a time where like the economy still wasn't like roaring. It was like kind of okay. And I had saved up $50,000 from my job. Now I spent $10,000 to get into the group for the gym owners. I actually signed up for a gym mastermind and I didn't have a gym. So I had like $40,000 left. And then I spent $34,000 opening up the location. So I had $6,000 left. Mind you, the rent was $5,000. And so I had exactly the amount of money like required to have like one month. And so I was like, oh my God, what am I going to do? And so it was by chance that I went to a different seminar that taught about this thing called Facebook ads. And so I ended up running an ad. And here's the craziest thing of all. I actually found this out years later, $4,972 in cash collected in the first month. And my rent was $4,972. I only found this out years later when I looked at my processing records. And I was like, I'm not, I'm not a divine, you know, dude, but wild. And so I basically had no money and all my money was in the gym equipment. And I spent the $1,000 basically that I had on these ads. And so when I started this one, I was like, man, this is, this is hard. So first big lesson that I learned was when you're poor, barter. All right. And so I had basically no money. And so, but I needed stuff. So I needed people who could train. I needed people who could clean. And so I had people come in and be like, I can't afford to do this. And I'd be like, hey, well, you want to clean the gym? And if you clean the gym, I'll let you attend the classes. Because the class, like someone else attending a class for me wasn't really any cost for me. And I mean, my costs were fixed. So anything that I could basically barter for $200 a month or $300 a month of services, I would just, I did everything like that. I was like, hey, can you fix my computer? Want personal training? Like I did that. Like I got my first printer and scanner from a guy who had an IT company because he felt bad for me because I was doing everything on paper.. And he said, you shouldn't do this. And I just did PT lessons for him so that he would pay for that. And so like, I just, I barter like crazy. I still barter to this day because guys, it's tax efficient. Neither party has to pay taxes on anything, right? It's the most efficient form of trade. So if you have the opportunity to do it, do it. On top of that, I actually had a client who was a food, like a food prep person. And so they would end up bringing a refrigerator and I could eat the food that they would bring for free for having access to my members. So like I'm saying literally everything. My laundry, I had a different client who did my laundry for me. Like everything that would take any of my time or money, I just traded for so that I could spend all my time in the gym just trying to make this thing work. So if you're like, okay, well, how do I apply this to me? Look at every single line item that you have on your, like your expenses, right? Like your credit card or whatever, your bank account. And anything that I had, I just tried to find somebody who did that thing. And I just was opportunistically looking. If somebody came in and they're like, oh, I do, because I would always be like, oh, what do you do? And they would tell me, I'd be like, ooh, I actually need one of that. Wanna want to do this? And this happened a lot. And I would just keep asking for less and less service until it was the amount of money that was the equivalent of a membership. And then I was like, sick, let's do that. My first ads, I got a videographer who came in because it was California, right? And this guy comes in, he's low, he's a small-time videographer. And he was like, I can't afford this. And I was like, well, I can't afford you. So, and so he recorded my first, some of my first ads for the gym, which actually ended up crushing. And so like, just, you got like bartering is one, but I'll put it second here, which is like, be creative. And I think in order to do this too, is that you just can't have an ego. Now I was lucky that I was, you know, 23 and, you know, poor. And so like, I had no shame for asking. I was like, please, like, help. I like, I need it. And so I think that a lot of, I'll just, I'll just be honest with you guys. I see a lot of y'all's Instagrams, you know who you are. And a lot of you guys are posturing and pretending like you have something that you don't. And it actually, I think it actually does a lot of disservice to you because if you're like, hey, I need help. Hey, I'm trying to build this thing. People will reach out and help. People will be way more willing. If you pretend like you're, you know, you've got it all figured out, no one's going to try and help you. And I think at that time is like when, like when you're earlier on is when you want all the lessons, you want all the favors you can get. And the way that I could get extra calories in is that I would actually, with the food prep stuff, I would sell clients on food prep and sometimes some of them wouldn't pick up all their meals. It happens. And so I would wait for the food to expire and then as soon as it expired, we weren't allowed to distribute it anymore. And so I would just take it and I would eat all of it. Expired. It's fine. I called the people. If they didn't respond, then I would, then I would take it. And that's how I fed myself. And for those of you who have a moral quandary with me, suck it. Next thing. Boy was trying to eat. I was growing. All right. Now, number 2 is that when you're early, you need tactics. All right. Which is why I make a lot of the videos that I do. Actually, to be fair, you need tactics at all levels, but especially when you're starting out because you're not really thinking in terms of strategy. You're just like, shoot, what fires do I have in front of me? I got to pay bills. Like, let's get this done. And so I joined this mastermind of a guy who had a really successful gym, Stan Baxiar. And he had a group of, I think, probably like 30 or 40 gym owners who kind of paid him to like kind of learn some of the stuff that he had. So I showed up to this first mastermind and I'm 20, 22 years old at the time, and I didn't own a gym. But the most valuable thing that I got is so many mistakes that I didn't have to make that all of these guys had made when they started their gyms. And so I just went around the room and I was like, hey, so what kind of location were you looking for? And they were like, oh, definitely don't do it in these markets. You definitely want to have this kind of square footage. Try to get a layout that only has this much office and this much warehouse. I was like, and they're like, oh yeah, parking, make sure you. And so all of these things, and I was like, okay, well, I'm going to buy this equipment. They're like, oh no, don't buy that equipment. That stuff breaks really fast. Buy from this brand. And I've got a guy, I'll hook you up with him. And like within the first conversation, I was like, oh my God, I saved the entire cost of what I paid in the first day. And basically that was such a reinforcing experience for me that whenever I enter anything, I always just pay if I can to just get access to people who are already doing it. And they can just tell me all the mistakes that I can avoid up front. And this is why I invested in school. Like I think communities are the future anyways. They also told me, so on top of that, what I would do is on my weekends when I had time, which was basically never, but when I did have time, I would make weekend trips to the other gym owners in the community. And so then I would just basically shadow them and pester them like a leech. And I would just go there and I would just ask as many questions like, I'd be like, why do you do that? And then when they sign up, what do you do? Where do you put the contract? I asked 100 questions. But the thing is, is all these guys are older than me and they like kind of felt bad. They were like, hey, this is what I do. This is what I do. This is what I do. And I just took every note I possibly could. And so I think the meta lesson for me was that the thing that has carried me into this day has just been the intention to keep learning.. And I think that life, like for me, the meaning of life is learning is to change behavior based on the conditions. And so I hope that I live the end of my life differently than I do now. Hopefully I'll have learned. And so, um, I went to other gyms. I asked tons of questions and all of those little things that I learned, I would try and not all of them worked obviously, but some of them did. And so I just tossed out the stuff that didn't work. I wasn't like, screw that guy for trying to help me for free. Uh, cause he gave me a tack that didn't work. I was like, well, he gave me another one that did. So works for me. And so I'll give you this little thing, which is that when you're starting out, it's actually one of the only times that people are willing to help you. And so take advantage of that. Like this This is a strategic advantage that you have when you're starting out is that people are willing to help, especially other entrepreneurs. It's like fairly common. Like most entrepreneurs are willing to help people one or two steps behind them. Now, this was a big mistake that I made, which is number 3, which after I learned this, I, I forever changed how I do every business. All right. Which is that pre-sales. So I thought that the way that I should make money, because I was like, I don't have any money. I need to start this gym as fast as possible in order to make money. Completely wrong. What you need to start doing is marketing and selling as fast as possible and then delay delivering as long as possible. Because every location I opened after my first, after having learned this lesson, I was like, oh, we're going to presell for 3 months and we're just going to keep marketing, keep selling, keep collecting cash, keep getting members, keep getting members, keep getting memberships. Right. And then only like basically as long as possible, because that's when all your costs start. So it's like just market and sell, get people to prepay for, you know, 3 months, 6 months, a year. Right. Get people into, into trial memberships that kick in later, like whatever you need to do in the beginning to just start kind of with a bang.. And so if you're brick and mortar more than anything, obviously every kind of business would benefit from a grand opening strategy. But if you're brick and mortar, grand opening strategy is, is one of the core ways you scale. Like you cannot scale without having a killer grand opening strategy. Look at every, every brick and mortar retail, food, gyms, like, you know, massage parlor, it doesn't matter. They have a crazy grand opening strategy. Otherwise, like it takes so, it takes way too long to get your money back., right? You have to be able to get to be profitable as soon as humanly possible. And so what I did with pre-sales, and as I got more sophisticated, is that if I, instead of being like, oh, I think I would open up a location in, you know, La Habra, what I would do is I would run ads. So I'd spend like $500 or $1,000 in 5 or 10 markets. And I would see where I got the lowest lead costs. And so as soon as I saw that, I was like, oh, well, some people are like, oh man, it's such like, dude, that guy's market is so easy compared to mine. And I'm going to be real with you. Some markets are easier than others. Like there are better and worse markets. Absolutely. For any type of service. But guess how you can pay down that risk? So instead of signing a lease, doing a build out, and then beginning to market to figure out whether it's a good, a good location or not, do it first. Worst case scenario, you spend the $5,000 or $10,000 in ads across 10 locations and you pick a perfect spot, a 1 out of 10 spot rather than a who knows what location. So instead of rolling the dice, pay $10,000 for presale insurance of checking. And it's like, okay, if you're wondering, well, what do you do when, when, when, when people opt in and then you don't have a location? Do what 99% of business owners do anyways. Ignore the leads. Right? That's what everyone else does. So like, don't worry about it. Like, you'll be okay. They'll just keep living their lives. And you paid Google and Google got their benefit and everybody's happy. Right? But you get to avoid signing a 5-year lease and a, for $500 grand or whatever it is that you're signing. For a bad spot. And I want to be really clear. Don't— I can't believe I have to say this. Don't sell shit that you're not going to deliver. If for whatever reason you think you're not going to open up a location, for fuck's sake, don't take money and not deliver. Like a really great way to just have people hate you. So don't do that and get in trouble. Don't do that. So the next big lesson I have was variation in ads. All right. So I'm gonna explain this. This skill ended up benefiting me for the rest of my life. And so when most marketers advertise on a national level, they get really lazy because they're used to running an ad and having an ad work for a month, 2 months, 3 months. Sometimes like YouTube ads will run for 6 months. I wasn't that guy at all. I had to make new ads like every week because my local market's so small. Right? And so in the, in the $100 Million Offers, the last chapter, I talk about the magic headline formula. And so basically what I, what I figured out was that I can't— I don't want to change my service, right? I don't want to start like offering back massages or something at my gym like that. I don't— you don't want to change your core thing. But what I want to do is change the wrapping paper. So it's the same present. I just present it differently. And so that's how I got, you know, that's how I figured out, oh, okay, Lean by Halloween, Slim for Santa, Big Booty Bootcamp, 42-Day Detox. 42-day fix, 42-day transformation, 6-week transformation, 6-week challenge. Like, I learned how to permute my promotional headlines because I had to. And then later on, once I went to a national level, I was willing and able to make so much more variation in my ads and my copy and my lead magnets than my competitors because all of them were spoiled in this world where they only have to make a couple ads a month. I was like, I'm used to making 20 or 30 a week. And so this is where I actually learned both the volume of creative and the variation And it's really just slight variation in the naming conventions of the promotions that I'm running. All right. And so it might— you want to make it look like a different offer, but you're still— I mean, what's it going to be? It's still going to be you're going to work out a couple of times a week, you're going to eat differently, you're going to have a trainer. Like, the core deliverable is the same. It's not going to change, but you just change the way it looks to change the way it feels. And that's what keeps it new in a market. Yeah. And what's changed between when I learned this lesson and today is that the creative itself is part of the targeting now. And so who you have in the ads, like, like attracts like. And so if you want more girls, have more girls in the ads. You want more guys, have more guys in the ads. Want big jack guys, have more big jack guys. It's like, and so this is something that is more new now than then, because then the targeting was much more basic. But big picture, if you're local, you don't need to worry too much about this because you're just going to drop a pin and say everybody in this local area. But as you go national, that's where it becomes a little bit more important. And real quick, I spent 200 hours this year just making this one project for you. Which is the $100 million scaling roadmap. And I broke up the stages of business into 10 stages, and you can identify where you're at by simply just putting in your business information. You go to acquisition.com/roadmap, and it'll spit out this custom report that tells you what the constraints are at that current level and what you need to do to graduate and get to the next level. This is our gift to you, absolutely free. On the thank you page, you can book a call with our team, and we'd love to help you, uh, figure that out and ideally get past it. So this is how I was generating leads. But then what was the actual offer that really like made or broke the business? Right. And so this is where I learned the 6-week challenge offer. And the 6-week challenge offer is a win-your-money-back offer. And there was also an unconditional money-back guarantee that I paired with this. So it just made it an absolute hurricane of an offer. And if you're curious about guarantees, I have a chapter on Guarantees in general, the guarantee formula, which is just if you don't achieve X by Y time, I will Z, which is what's the consideration. So you have some sort of thing you're promising. There's some sort of timeline you're promising it on, some terms, and then you have what you'll give in consideration. And so one of the big mistakes people make when they're doing any kind of guarantee offers that they say, I guarantee this. Yeah, but you have to say the or what, right? The or else, and it's the or what that gives the guarantee power. Just the word guarantee is not going to do nearly as much as the stake you're putting on the line. Now, inside of the book, I actually have 11 of my favorite guarantees that I have used and work. And so you can check those out. But the 2 guarantees that I use most frequently were a service-based guarantee and an unconditional guarantee. All right, so let me explain what those are. So a service-based guarantee is, hey, I'm going to help you achieve X by Y, but if you don't, I'll continue to work with you until you do. Now, this matters more importantly when there's actual cost associated with delivery. If you're like, I will, you know, you're, you're a digital person. It's like, yeah, you get access to this course for 6 weeks. And then if you don't hit the goal, you keep getting access for another 6 weeks. It's like access is not that valuable of like, I didn't hit it, but we were actually training people. And so for me, that was like real stakes on the line and it was very compelling. The second guarantee that I offered was an unconditional guarantee, which is that during the 6 weeks, if at any point you feel like you haven't gotten $500 of value from us independent of your results, I'll give you the money back. I said, that means that 5 weeks, 6 days, and 23 hours from now, if you don't think that we gave you the value, I'll give you the money back. And I'm telling you, like, that closed so many sales for me. And because we really obsessed on delivery, my team, knowing that that guarantee exists, forced them to just level up and be like, we just have to bring it every day. And I want to tell you, the actual number, which is over the years of doing it, I had 2 people who asked me for the money back on the unconditional. Now, there were people who obviously hit the goal of losing 20 pounds in the 6 weeks and they won it, which is fine. And that's kind of, that was the deal, right? Which if you aren't familiar with the offer, it was lose 20 pounds in 6 weeks. Obviously, this is for people who are over a certain BMI. If they were below the BMI, we just say 10% of your body weight. So, if it was like a 140-pound person and they're like a little overweight, they lose 14 pounds in 6 weeks. That's like, 2 pounds a week or 2, 2 and change. And mind you, like, I knew that people, people were like, oh, in the comments, like, oh my God, that's unhealthy. People gamed it. I know that. So when they came to weigh-in day, they were, they had 6 pounds of water and, you know, bricks in their pockets. Like, I, I knew people were gaming it, right? It's like, to be clear. And at the end, they're like dehydrated like a raisin. You know, they're naked on there, just like, you know, covering, covering themselves to like get underweight. So like the weight. Like I knew there was a 5 or 6 pound give on both sides that were happening, right? But we had almost 80% of people were hitting the goal at the time. And so it was very compelling. And the reality is that most people who work out for 6 weeks straight want to keep working out. And so that's why the offer worked. It got people really motivated in the short term, but then it was like, hey, listen, Cindy, you've lost 14 pounds. That's amazing. You told me your goal is 50, though. Yeah. Okay. Well, it's going to take longer than that, right? Yeah, I know it's going to take longer than that. Cool, then let's just get you going for a year and actually get you there for good. Right? So it was a very easy transition, even though people came in for a defined program on the front end. Now, the beauty of this particular offer was that compared to the rest of the industry, everyone else is giving free trials, free months, or low barrier offers like $21 for 21 days, things like that. And so when they were trying to market against me, I was making $500 in the, in the first transaction. And then 48 hours later, I was selling another $200, $300 of supplements. I had so much more cash up front, I could wildly outspend them. For them, they have $21. Okay, basically nothing. And then they have to wait 3 weeks to convert into a normal membership price of $99, $199 a month. And it would take them 3 months to just get what I got in the first transaction. And because of that, I was able to massively outspend them. And so by doing that play, I was able to dominate markets. And the beauty of the guarantee, the way I had it structured, was one, obviously there was a goal. And if they won their money back by hitting the goal, They had it. It was straight up. They have the money back. Sometimes, some, like later on, we started doing it as credit, saying, hey, this is credit, so we'll credit it back to any other services. You just have to disclaim in the advertising, all that stuff, obey the laws of your area, whatever. Now, beyond that, what it enabled me to do is do something that is one of my favorite closes ever, which is the best case, worst case close. And so I'd be like, hey, Cindy, let's just zoom out for a second. Best case scenario, you change your life forever. You finally get in shape. You find a community of people and you actually stick with this for life. That's best case. Worst case scenario, you work out for 6 weeks, basically for free. You tell me I suck and I give you your money back. You have nothing to lose, except the only thing that is more guaranteed than that is that if you leave, you're definitely not going to get to where you want to go. So what do you want to do? Like, it was a risk-free move and that closed a lot. So all of this stuff is what helped me get to $100,000, multiple $100,000 in revenue the first year. Now, I also had a decent amount of profit that was left over. But the thing is, is that I didn't take that money out of the business. I left the cash in the business. And then when I opened my second location, I took that cash from my first location and basically spent it all on the second, right? It cost me $250,000 for the second location, which was a big mistake. I way overspent because my ego was tied to it. But the thing is, is that it took years before I actually ended up taking money out of the business and putting it in my personal bank account. The richest I've ever felt, which I talk about in the last story of this book, was when I put $100,000 into my bank account from the launch business. And so I kept doubling down on new location, new location, new location, new location. And so I felt like I was living on like a razor's edge because like I basically had, I was really asset rich and cash poor. I just had all these locations, all this equipment, all this payroll due every month. And so there was cash in all the bank accounts of the businesses, but like nothing in mine. And I think if I could do it over again, I would have said, dude, like what's What's the rush? Like, why are you rushing? Like, take money out, like get yourself set up so you can breathe. And so I think that I was running on such high, like stress at all times that it dramatically impacted my ability to make good decisions because like, there is no finish line. There's no, like, there's no award I get. Like it, like, it's not like there's a network effect in gyms. Like you just have to keep executing really well for a very long period of time. And then eventually you can build something that has hundreds and thousands of locations, but like you still have to run a really good business. And I just had this artificial sense of rush because I was trying to prove myself to everyone in my head that didn't even care about me anyways. Now, the interesting thing with this whole challenge thing is that it took me a while to get good at it. So the first challenge I ever ran, only 15% of people lost the weight. And what's interesting is that between then and, you know, a year later, multiple years later, like we were almost 80%. But, like, fundamentally, we still had more or less the same workouts, and the meal plans that I provided in terms of the calorie restriction, et cetera, were basically the same thing. And so, it was like, what was the difference? And so, the difference was I actually learned how to operate a business. Number 2 is I really leaned onto accountability, which is, like, make— reminding people to show up to the gym, reminding people to follow their meal plans, telling people they have to weigh in on a regular basis, making sure they're documenting that publicly. Like, I started doing all these little things, right? There was no one thing That made it just like every time we just got better and better and better. So even though the stakes were there with the money, that actually was enough to motivate some people. But the reality is that like, I should have just made it easier. So I like took the meal plans and I made them color-coded and I made them— they didn't have to weigh anything. They have to count calories. Like, I learned a lot of things that made it more accessible to people who were just getting started because I was starting as I was starting with beginners, but I was an advanced, you know, fitness person at the time. I had multiple state records. Like, I was like, I was hardcore in it, but like the people I was serving were not me. And it took me a minute to learn that. And I'll tell you how I figured this out. So, I remember freaking out near the end of the very first challenge I ever ran. I called my dad up, he's a physician, and I was like, I think I'm crashing people's hormones and metabolism, and maybe I'm restricting their calories too much, that's why they're not losing weight. And any experienced doctor will tell you, he's like, oh, they're just not adhering. And I was like, no, it's obviously not that. It's obviously like some sort of scientific thing, and obviously he was right. It was just, No one was following it, right? And so, one of the things that I learned, and this is good for anybody who has clients who have to do anything to get a result. So, it doesn't matter what you sell, but if you have a service where a customer has to take action in order to see an outcome, what I learned was asking specific questions. So, when I would ask people, hey, did you follow everything? In the beginning, they were all like, oh yeah, follow everything to the T, 100%. And then I could literally follow that up with, okay, so how many days out of 7 did you eat all 3 meals exactly to plan? With nothing else? And they'd be like, oh, I mean, at least 3 days a week. And I'd be like, you just said that you followed it 100%. And then the next question was, how many days out of 7 did you eat all 3 and nothing else? They were like, oh yeah, only 3, right? And so I got more specific about it. Like, how many times did you have 3 and 2 shakes or whatever? And they would be like, oh, that's what I had. Now, if anybody who's like listening to this is like, ah, fitness stuff. Point being is that ask specific questions. And you'll get much more specific answers. Now, the 6th thing that kind of got me to that $100,000+ was sell the vacation, not the plane flight. So I want to give you a visual on this because I think it's really important. Like this, when I understood how this worked for sales, it really changed. I mean, how much money I made. So what happens is let's say somebody's here, right? They're sad because they're like, oh, I'm sad. And my eyes are really weird. I look like a Cyclops. Right? I'd be sad if I looked like that. Right? And they want to get over here. Right? They want to be happy version of them who's got eyes that are evenly spaced and has a smiley face. Now, there's going to be some process of getting them here. Right? Now, what happens is most salespeople will talk about all of the steps of getting here. Right? That's what they're going to talk about. And the thing is, is that that's like telling somebody, hey, I want you to go on this vacation. And so what's going to be required is you're going to have to wake up at the crack of dawn. You're going to have to pack your stuff the night before. You have to be stressed out to wait in line to pull your idea. They're going to weigh it. You might have to pay an extra bill. Right. And then once you get to the plane, they're going to make you sit for another hour and then you're going to get called up like cattle and put into the, and put into the, the compartment of the plane. And you're going to have somebody sneezing and coughing next to you. Of course, there's going to be a baby on the plane. They're going to be crying the whole time. The food's going to be terrible. And you might get jet lag. There's going to be a delay for sure. And by the way, did I mention the layover? Yeah, you're going to have to do it all again another time in order to get your final vacation. Now, once you get there, you're actually not going to be there. You have to get— you get the point here, right? Painful. That's what most people's sales sound like. But instead, if I just said, hey, you're here, you want to be in Maui. Let me tell you about Maui and let me tell you how it's not like Baltimore. So Baltimore, it's like, it's, it's, it's raining here, right? Oh, that's rain. That's like a, looks like an octopus or jellyfish. Anyways, that's rain. All right. So it's raining here. Right? Like rain. You've got your little umbrella. Very sad. Right? It's terrible here. What we want to talk about is the pain of their current situation. Pain increases their, their desire to change. So think about it this way. You want to sell at the point of greatest deprivation. So that's why, like, when someone's in pain is when they want to go to a doctor, right? You want to solve that. And so we want to remind them of the pain. So you want to talk about them where they're currently at, all the problems that exist. Then we say, cool, well, let me tell you about Maui. Maui's got beautiful clear water. It's got white, white sand, very fine. It's almost like powder when you're stepping into it. You're going to have poolside service and oceanside service depending on what you want. And you're going to have a cabana boy who's got little drinks with the little umbrellas in it. And you're going to be sipping there. Having a time of your life, creating memories that you will have until you die. And the thing is, is that this vacation isn't just going to pay dividends when you're there. You're going to enjoy it, but you're going to enjoy it 2 other times. Every day leading up to it, you're going to be looking forward to it. It's going to make every day better. And then afterwards, you're going to be able to look back at those pictures and re-experience it. And so it's not even about the vacation. It's about something that you're going to be able to use and think about for the rest of your life, right? Notice what I didn't talk about. The plane flight, the TSA, the guy, the baby, you know, smoking cigarettes next to you. I don't know what this baby's doing, but he's doing something crazy.. And so the point is, is that you wanna focus on the pain of their current and then what the experience of the result will be like. And then them signing up is the process of getting there. Now, this part's key. Number 7 was the role of bonuses and discounts. Okay? Now in the beginning, and I think I learned this really early on, and so I've never been a discounter when it comes to my core product. Now, very different than saying like, I'm gonna peel a piece off, it's gonna be a lead magnet. That's a different situation. But if someone wants me to discount my core service, The answer is always no, because we don't negotiate with price terrorists. So what do you do instead? So I'll give you two different things that have worked really well for me. So number one is that if somebody asks for a discount, what I would prefer to do is just add a bonus. If somebody asks for a discount, the first answer I usually say is, well, I could do it for more, right? And a lot of times that gets people to buy. Now, if they still don't want to buy, then I say, okay, how about this? Because maybe they're like, I literally can't. I'm like, okay, can you refer me three friends? If you refer me three friends, I'll give you that discount, which is different because it changes the terms. So if someone else finds out, hey, you gave Susie sign up for $400 and you made me sign up for $500, like, oh dude, bring 3 friends. I'll give you the $100 right now. And they're like, oh, she didn't say that. I'm like, yeah, I changed the terms. Right? And so you can use discounts as bartering tools to have them advertise for you. So like, I'll give you $100 off if you also make reviews on all these platforms or do other things. So basically any kind of discount I'll have, my terms will change to all the advertising they will allow me to do. Which is worth more to me than whatever the discount is. Now, if somebody presents with a specific obstacle, and I'll give you the actual story. So the first time I realized this, there was this lady, business professional, had the money. She was like, the money's not a problem. I was like, okay. She said, the issue is I travel a lot for work. And she's like, so how am I going to be able to stick with a plan when I'm not here? And she was like, do you have a travel meal plan? And I was like, well, I don't. And she's like, well, that's kind of a deal breaker for me. And I was like, okay, what if I made you a travel meal plan so that every time you travel, you know how to order at the restaurant., so you can eat out and actually like, you know, keep with this when you're gone. And she was like, oh, if you can do that for me, I'm in. And so I made that thing for that one lady. And then for every other person after that, when they'd come in and say, hey, uh, what happens if I travel or I have to go somewhere for work or I have this vacation in the middle? What do I do? I'd be like, oh, I'll give you the travel plan. And then boom, the obstacle is done. And so what happened is I started collecting kind of all of these obstacles that people would present with for the reasons that they wouldn't buy. And then I ended up making things. So I made a budget guide meal plan. So it's like, I can afford the thing, but I can't afford the food. I'm like, oh, what are you spending on food right now? Cool. This budget groceries is cost less than $40 a week. And you'll be able to stick to the calories and lose the weight. And they're like, oh, that's amazing. I might even save money on this plan. And they're like, what if I'm on the go? I'm like, oh, I've got the shakes guide. Oh, what if I, uh, like, what if I don't know what to eat for breakfast, lunch, and dinner? Okay. Well, not only will you follow the plan, I'll actually give you specific breakfast, lunches, and dinners that you can make with zero prep. Oh, what about working out when I'm away? Oh, that's why I have my while you're away workout guide. Right? What about if I can't make it in the gym because of time constraints? Can I work out at home? Yep, I have my at-home workout guide. And so basically every single thing that people would present with, I would take the one-time effort of making a beautiful solution for them. And they're like, wow, you went above and beyond. But then I took that templated solution and I stuck it in my stack so that when somebody would talk to me and they'd bring up an obstacle, I'd be like, oh, don't worry. Something like this, would that help? And they're like, oh my God, that'd be amazing. And so I wouldn't, in a one-on-one selling situation, different than group sales, I would have my big stack of bonuses in my back pocket so that if they presented with it, I would just match their objection with the bonus that would overcome it. So this was a, this was a pretty terrible thing in terms of lessons, which was overspending. So what made my first location kind of like so successful was that I was there and I went above and beyond for customers and I tried to make everyone happy. And people could tell that I wasn't like rolling in money. You know, like, you know, I had, I had these sandbags that like there's nice sandbags you can buy. They're like fitness sandbags. I went to Home Depot and just bought sandbags and then just taped them with duct tape. And people just like would carry these like babies around of sand. Right. And so when my second location happened, I saved all this money up and I put $250,000 in the second location. So like I spent What are this, 8 times or whatever is more on my second location than my first location. And here's the crazy part. It made the same amount of money as my first location. And so like, it was way worse returns on capital than my first one. And the thing is, is that I didn't actually understand what made my product good. What made people actually like my stuff. And so people weren't coming to the gym for fancy top tier equipment. They weren't coming for granite countertops and a glass wall, which is what I did. My glass wall at my second location was almost the same price as my entire first location. What they were coming for was the accountability and the quality of the training, quality of the experience, the people they liked. And so that's when it, I mean, it took me $250,000 to learn this lesson, which is that I had to understand like, what's the job to be done? What's the job that I'm actually accomplishing for the customer, right? Or for like, what does my product or service deliver? And so for us, it was community and accountability. Like people are very lonely. People want to feel like they belong and obviously want to do things that are good for themselves. But what I realized over time is that the people who stuck with it, a lot of them didn't like dramatically change after they'd done their weight loss challenges, but they kept coming back again and again and they just liked it because they wanted to look good, feel good. They just wanted to just like feel good, see their friends, listen to some music, you know, get a little sweat on and then they'd go have their Margarita Tuesdays or whatever. And I used to get really upset about that, but I was like, but it was because I didn't understand what we were actually doing. What we're really doing was providing a place for people to like get away from home and get away from work. It was like that third spot. I think Starbucks talks about that. Like what's that third location? Like for us, the gym was that. I think the only way you can really discover this is by actually talking to your customers and just asking them and saying like, what, what need does this fulfill for you? Like, what problem does this solve? Like, where does this fit in your life? And I think listening qualitatively to the feedback, you'd find out like, and the key when you're asking these things is you don't want to lead them on. You don't want to say like, are we the third location for between your house and your, you know, like your job? Are we that thing that fills your community hole up? It's like, no, that's, That's not what you're asking. You're just saying you want to keep it super open because you want them to tell you. And what that has helped me with is where I allocate my time in terms of reinvestment in the service or product to make it better. Because it's not better in my eyes, it has to be better in their eyes. Because I spent way too long obsessing over like the periodization of the training and like, and I completely disregarded the music, but like the music mattered more to people than like the training. Like in terms of the actual workouts. Now the quality of the trainer, different. But like how many reps and sets they were doing, how much volume they were doing, like they didn't care at all. I mean, shoot, half the time they'd skip a workout or two. So like the periodization was irrelevant, right? But I was so obsessed with it because I was into it. Yeah. And I think, I think the vast majority of business owners spend a huge amount of time solving problems that aren't problems. And so it's like you completely and excellently solve something that only you think is a problem. And so that's where like this tremendous waste of resources happens. Now, let me tell you the next big lesson I had. Which was proof. So what I did was, and I recommend this to every brick-and-mortar business owner, is if you have a sales area or sales room, these are examples that I have of before and after pictures. Obviously, you need permissions and all that stuff from people. Make sure you're following the law, but just showing overwhelming social proof. And so right now, if you have Yelp or you have Google or whatever, there's going to be all these 5 stars you've gotten. People have left you reviews. Well, what a waste for them to only live there. So screenshot them, go to the dollar store, buy $1 frames, and then frame them all. And so when somebody's in your sales office, if all they see around you is before and after pictures of people saying you're great, it's hard for them to be like, well, is this place legit? You're like, I mean, yeah. And then I ask, and this is the question, right? This is the question I would ask. I'd say, well, how much proof would you need to see in order to believe? And then the follow-up question is, and If they like didn't, you know, be like, and is that reasonable? Because you tell me when is it that one, like 1, 2, 3, 4, just tell me when 5, 6, 7, 8, just tell me when it's good. 9, 10. And they'll be like, no, stop. I get it. I'm like, right. So like at some point it probably isn't about that. It's about something you're afraid of. So what are you afraid of right now? I'm back in the sale and I'm actually dealing with the real thing. The reason behind the reason, not the easy one. That's a smokescreen that they're just putting out to not buy. Mostly because let's be real, someone for, at least for a gym, they're scared. They're afraid they're going to get made fun of. They're afraid they're going to slip. They're afraid to look stupid. Right? That's the big fears that people— I didn't even realize this when I— it took me a long time to realize that like, these are actual fears for people. And it was weird for me because I love the gym. So I'm like, everyone should love the gym. But it wasn't like that at all. Yeah. And so I made a whole video about this, like required viewing for business owners. You can go check it out. And inside the video, I basically talk about a flywheel that every business has to have. And I realized I learned it with this business. Which is that you're gonna get customers in the door, step 1, you're gonna get those customers results, step 2, and then step 3, you need to use those results to get you more customers. And so that's the flywheel that every business needs to build. And so you have moments in your customer experience or your product experience where customers are gonna get these wow moments, right? Or ideally, right? And you wanna be there at those moments to capture their reactions so that you can feed that into your marketing machine. Right. And so there's, there's the milestones along the way. And then obviously the end goal. And so for us, obviously with challenges, we, it was easy to be like, weigh in, weigh out, big moment. Awesome picture, video. Was this great? Yeah. Leave us a review. Fantastic. And so trying to engineer that into your customer experience, primo way to get more customers and enhance your sales. I'm going to finish that by saying proof system and displaying. So it's both, both collection and displaying of the proof. Now, the next one was partners. Now, man, it's taken me a very long time to learn my lessons with partners. All right. So I have this really nice acronym for partners I'm going to share with you. So if you want a partner to join your team, they should accomplish one of the TEAM acronyms, which just means either they have time that you don't have, they've got expertise that you don't have, they've got assets that you don't have, or they've got money that you don't have. So, assets would be like they've got a brand, they've got a following, they've got an audience, they might have a machine. I mean, whatever. They have something. They have a distribution base of customers. They have a network of affiliates, whatever. They have something that you don't have. They have expertise. They have a skill that you don't have. You can't do this without having the skill. They can work and you're predisposed, or they've got money and you need it, right? But fundamentally, every single partnership should have one or more of these things that they're bringing to the table that's complementary. If the worst business partnerships in the world is when two people have the same expertise, get into business together because they're friends. It's like the recipe for bad partnership. Two lessons on partnerships beyond the team framework. Number one is that if one of you is the working partner and somebody else is the outside partner who's maybe funding it, you need to figure out if you're going to have some sort of salary to live on. This was a mistake that I made, and I basically lived without taking a salary from the business because I brought in partners and they weren't taking a salary, but I was the one working in the business and they weren't. And so I basically lived without taking an income for 2 years. And so the reason that I'm so sensitive to cheapness and personal finance is because like what I made in the first 5 or 6 months of me being in business is what I lived on for the next 2 years. And so I lived on like $30,000 a year or less. And that's why I was so sensitive to it. The idea is make sure that you have some reasonable compensation if you're going to be the manager of the business, because long-term you need somebody else who's going to be the manager in your stead. So that's a cost that the business is going to have to incur regardless. And you're doing a job in addition to being the owner. So that's like, there's, you want to make sure that that's clear. Are you doing a job in the business different than the owner? That's only going to be in the situations when somebody's funding your thing. All right. Point one. The second point is that the equity that you give away in the beginning is the most expensive. And so to the degree that you possibly can hold out on giving equity away early. Now, if you have to bring people in and you absolutely need them, then sure. That's, that's part of the game. But I, it's just like, it's so often that someone's like, cool, here's the pie. There's two of us. Boom. Here's half. Right? You don't always have to split things evenly between the number of people. There's, different value of skills. There's different value of experience. There's knowledge sets. So like you can bring two people in and each of them can have 5% and then you have 90, like the slices of the pie don't necessarily need to be the same. And a big variable that they have there is, are they taking a paycheck or not? Right. And so it's a lot of this has to come down to one big word, risk, who's taking on the most risk. And so typically that is how the pie is sliced. So number 11 was owners. You're like, how is that different? Than partners. Let me explain. So every brick and mortar— now I've, I have a lot of experience with this now, but every brick and mortar business that I know that's been scaled privately, not franchised, which actually still follows the same law, but that scales privately with one or, you know, a couple owners that own everything, is that they figure out that every brick and mortar location typically needs to do a profit share. They need to have somebody that they have, they have, they have what feels like a stake in the location. So if you look at like Chick-fil-A, for example, they have their location operators and those operators have a percentage of the profit from each location. Now they're not the majority owners. They don't have controlling, but they can run the day-to-day operations. And so basically every brick and mortar business that I have seen scale has this thing. Now, some people ask the question, well, how much do you give them profit share? I'll tell you how I come to it. I think, how much would someone need to make that has the level of skill required to thrive in this position? And so let's say that I think that the skills that are required here would require 5 years of experience and $150,000 a year. Okay. So I'm going to say the on-target earnings, OTE, all right, is $150K. Okay. So what I'd probably do is say, all right, well, what does my average location make? And let's say my average location makes $250,000 in profit. All right. Well, I don't want to give $250,000 in profit straight to the— that doesn't make any sense for you as an owner. Right. So then what do I do? So I would probably do something like this. You get $75K as a base. So 50% and the other 50%, which would be $75,000, would mean that you would get, let's say, 10, whatever, 12.5%. I don't know what the math is here. 12.5% of the profit from the location. Now, if a location does really well and does $350,000, then all of a sudden this 12.5% is even more. So now they're at $185,000 or whatever. Now, if they underperform and let's say they're at $100,000, well, then they would only get an extra $12.5K, right? And so then they'd only make whatever that is, $87,000. And so this still keeps them very invested as an operator for the location and feeling the top line and bottom line impacts of what it costs to run the business. And I want this person to be like, I want their picture on the wall and be like, this is John's location, right? And this is where I love this from a long-term perspective, because this can become a very easy career path for people. So people who are kind of low, like if you have a business that requires low or medium level skill, somebody can come in, do an amazing job. And they're like, what's my long-term career path here? It's like, well, if you do an awesome job, I'm happy to put you in our newest location that's across town. So if you want to start that one up, you can start here, but you got to prove yourself over 3 to 5 years. Right. And so that way they get to know the business, they get to know how it's operated well, and then you can pull them over. And then this kind of gives you this organic growth where people have ownership in their futures. And so this took me a really long time to learn. And this was a mistake that I can now tell you because now having looked at a lot, and we obviously have chains of locations inside of acquisition.com, you want to have this model. At least in my opinion, that's Alex's two cents. And if you're curious how this math works, I'm going to spell it out really easily for you right now. You have your on-target earning of what you think the person would make if they do a normal job, like you're not going to fire them, they're fine. You then say half of that's going to be base and the other half would be for medium performance. That gets them to the medium outcome. Now, if they have exceptional performance, whatever that percentage was to equal half of the base or half the extra half of their, of the on-target earnings, then they would get more if it goes up. And if it goes down, then that percentage is going to be less. So they're going to be below their own target earnings. That's the earnings for the person. So I didn't do this and it was really hard. And if I could do it again, that's what I would have done. Number 12, this is a big one. Nail it before you scale it. So this goes to the whole rush thing, right? I was in this massive rush to do what? I have no idea. I just, everything was like, everything has to happen tomorrow. Everything has to happen tomorrow. And I ended up making a ton of mistakes. Not getting locations perfectly situated before starting the next one. And so basically, like, I'm still selling at location 1 when I'm starting location 2, right? Just not smart, right? It should have been like, okay, how do we get this so that our churn is really low? How do we get it so that's continuing to compound year over year over year? How do we make sure that we're absolutely full capacity? How do we know that, like, people are selling and marketing on their own without me? Once that occurs and I let it sit for 6 months and it's still growing straight, then I can maybe start the next one, right? And so if you're like thinking through this, my litmus test for this is that number 1, you shouldn't care about your second location before the first one can run without you, period. Number 2, don't go to a new one until the old one is growing without you for 6 months straight. That's my rule of thumb. 6 months straight of growth without you doing it. Now, to be clear, a lot of business owners or small business owners for local business especially are like, oh no, this thing runs without me. No, no, no, no, no. I'm not saying like, oh, uh, you don't show up to the gym, therefore it runs without you. There's many things that are required in a business. You're the operator. You don't necessarily train the sessions. You don't necessarily like do the billing, but like you're still required to make decisions and, and deal with customers, all that stuff. No, we need somebody else who completely encapsulates that business. And here's the, the deal. This, this goes on number, uh, on number with number 11. Here's how you have the conversation. So John, I want you to be the operator for this location. You're going to have a profit share. Your on-target earnings is twice what you're currently making. And here's the shtick. Cool. You've been working here for 5 years. I want to give you that opportunity. Okay. So here's the deal. You're going to make 10% of the profit of this location on one condition. Get it? Yes. Here's the condition. This doesn't ring. That's the deal. So let me explain. Let's role play this. A pipe breaks in the middle of a session. It's leaking out of the ceiling. What do you do? Call a plumber. Right. So skip the call me part and just call the plumber. Okay, let's try it again. Let's say someone has a heart attack on the floor. What are you going to do? Not call you. Correct. Now, someone has a heart attack on the floor, probably would call you. But for the purpose of our illustration, what would you do first? Call 911, because that's what I'm going to do. Right. So just think one extra step and then do that thing. And you have permission up to $1,000 of cost to not have to call me. All right. And so we want to make sure, though, to be clear, you want to give, so this is a good one for everybody to write down, is that you want to pair responsibility with authority. So when you only have one or the other, it creates problems. If someone has authority and no responsibility, you have an asshole, right? They just tell people what to do, but they're not responsible for anything. It's just people just go sticking their nose in other people's business. On the other hand, this is far more common. Business owners give someone the responsibility, but not the authority. They see you're responsible for all this stuff and they're like, okay, well, I need to do X, Y, and Z. And they're like, no, no, no, no. You can't do that without my permission. It's like, well, then they're just handcuffed. They can't do anything. Right? So you have to give authority that is equal to the responsibility. If you think that 90% of problems can get solved for $500 or less, then give it to them. If you know that customer escalations, there's a problem with the customer, you say, hey, up to 100% of what a customer spent with us in the last month, you're able to spend on discretionary for people who are upset. So if someone spends $100 with us this month, you can spend 100% of their $100 to make them happy and not have a bad experience. Right? If they're, you know, and this is where like somebody has a new kid, someone's parent died, someone's car breaks down, whatever it is, like That going that extra mile and using this kind of discretionary fund is what you want to empower a location owner operator to have so they can actually make decisions of value. And so the nail before you scale it concept works across all industries. All right. So like if you have a software company, if you're losing customers and churning them out, why would you scale it? Like you don't just like pour more water into a leaky bucket. Why would you do that? If you have an agency and you're, you know, you're like, oh, look, we're, we're, we finally have ads that are converting for us. Yeah. Cool. Great. That's step one. Don't scale them anymore. See why customers are leaving. And if customers are consistently leaving, maybe you're serving the wrong customers and maybe you shouldn't scale it because you're just going to create a churn factory. Right? And the thing is, is that the vast majority of businesses are this. They, especially small businesses. And this is actually the difference between small businesses and big businesses is that small businesses become medium-sized businesses typically by just spending a ton more on marketing sales because they learned how to do it, but they never figured out how to keep customers. And if you never figured it out when you're small, you're definitely not going to have it when you're rich. When you're big. All right. Because it's easier to fix it when you're small and there's going to be natural degradation of things as things scale. And so if you can't do it when you're small, it's even harder when you're big. And so you want to nail it first and then as you scale it, keep fixing it so it stays nailed. Yeah. And a great test for that 6-month walkaway period from point 11 is just take a vacation, take a 1-month vacation, see what happens. You'll be able to see what breaks. It's actually a great test. So let me give you, let me give you my lesson number 13 I learned from the gyms is Unscalable beginnings. So when I started my first location, Huntington Beach, I had one PT client who paid me like $4,000 a month. And it's because they trained 5 days a week and it was like hour and a half or 2-hour-long sessions. And so it was 10 hours a week of PT basically guaranteed that I would do with them. And so it made me a significant amount every month. And I basically just lived on that. Now, is that part of the model? No, but I did it because that's like what allowed me to be more aggressive with the expansion of the business. I could take all the cash that come in, buy new equipment. Fix things, whatever, you know, hire more people. And so there are some things that you're going to do in the beginning that will not scale with the business and that's okay. So you just want to make sure that your nail it portion doesn't include the unscalable parts that I still think you should absolutely consider doing to make the whole process a lot easier on yourself. And so it's like if you have your core business, fine. If you have 5 clients who pay you more personalized attention for stuff so that you can like live on that money, Part of you is going to be like, man, I should just do this. And maybe you should, but if you're trying to build an asset that has value independent of your time, then this is what we're building. So I just like, I wouldn't, yes, is it a distraction? But being poor is an even bigger distraction. And so it's really like the lesser of which evil, right? If you're like, man, it's just, I'm so stressed about payroll and stuff. But like, if you have this other cashflow thing, and to be clear, this isn't woman in the red dress. I'm talking like, you're not building another business. It's like, you're just straight selling time. So that at a higher, you know, a higher ticket for your expertise or something so that you can build this asset. So I'm okay with that. And that sounds like it's contrary to the woman in the red dress, but we're not building two businesses. You're just accepting very high ticket clients that you can on a one-on-one basis, not building a separate business, minimizing the time requirement. And so for me, with my personal training client, I did in the middle of the day. So I like, it worked out fine for me. So I finished my morning sessions. I would have a couple hours. I would do 2 hours, uh, you know, with him and then I'd start my evening session. So I basically just started that as my my evening sessions. And that's just what allowed Alex to eat Chipotle. And if you're like, wait, I thought you ate the expired food. I did that too, but sometimes I wait for it to expire. So I had to eat Chipotle in the meantime. All right. So this next one's really big, especially if you have a team, which basically anybody who has a business eventually has a team, is that doing is not the same as teaching. So it's one thing to be able to sell. It's another thing to be able to teach to sell. It's one thing to be able to train, another thing to be able to teach to train. One thing to be able to run ads, another thing to be able to teach people to run ads.. And so I had this kind of ego thing where I loved being the most valuable player, right? I love being able to come in and save the day and put the team on my back and everyone's like, Rocky, Rocky, you know, whatever. Right. And that was something that handicapped me. And so I wanted to be the best salesperson, but what a terrible thing to want if you want to have a business. And so I had to shift my identity to being, I want to be the best sales teacher. I want to be this best marketing teacher. I want to be the best operations teacher. Right? And by doing that, it shifted how I saw what winning looked like. And so before this, it was like, oh, they went 2 for 6 today. I could go in and close 5 out of 6. Okay, cool. Well, that means that you suck as a teacher, not that you're great as a sales guy. And so you have to basically level up your game and think this is the new identity that I have to be. And this took me, this took me a long time to learn. And I'll tell you the first time that this was like very real for me is that I went home for Christmas. This is like, the first year of the gym, and I was very afraid to do that. And I had trained these girls who had sold tanning before, and so I taught them how to sell the challenge. And I remember when I was driving, I remember where I was. I was driving on the road to go back to my actual house where I lived when I grew up. And I get this phone call and they're like, yeah, you know, the day ended. And I was like, how'd you do? And they were like, oh, we had, you know, we had, we had 5 people show, sold 2. And I was like, you sold them though, like credit card, like it ran like the whole thing. They were like, yeah, one was paid in full, the other was a split pay. And I was like, hold on. So today $750 came in, like it said successful next to it. And they were like, yeah, they were like, actively like, why is this guy being so weird? And I ended up pulling the car over and I remember it was like one of the few times that I had like a real big emotional, like experience, one of the few times ever. And I almost got like teared up because it was, it was the first moment where I realized like I wasn't the one who was going to have to make every dollar in this business. And it was the first moment where I realized the value of transferring a skill to somebody else. Because until then, I just wanted to be MVP. I just wanted to be the best trainer, the best sales guy, best whatever. But as soon as I gave it to someone else, it was like, it was like I tasted freedom. And once I had that, I was like, I'm going to get fucking great at this. And I think a big part of honestly, the stuff that you guys see today with YouTube and the books and things like that, like it was because I shifted my perspective from being like, it's one thing to learn. I have to learn it. I have to learn it so that I can teach it rather than I want to learn it so that I can be the best person at it. I don't think I'm the best at Basically anything. If I can be one of the best at teaching the thing, then I can help thousands and millions of people. And that's a much higher leverage skill. So the next thing kind of bolts onto that, which is lesson 15 for me, was simple. All right. Simple scales, fancy fails. All right. Now it's like, okay, well, duh. All right. But let me talk about this within the context of systems and training. So a lot of people have these very, very complex sales systems and I Honestly, just try and cut more and more things out of the sales stuff that I teach because I want it to be something that someone can immediately pick up. And so the whole like closer framework came out of just trying to make this as simple as possible. Clarify why they're here when they come in, label them with a problem to show that you listen, ask them, you overview the past experience, their past pain. What have they tried so far? Then sell the vacation, tell them about our thing, make the offer. If they say no, explain away their concerns. Once they buy, then reinforce the Decision, tell them they did a good job. That's it. It's all we're doing. Right. And so I used to have all these like really complex things that I tried, like, and it became really hard for people to learn. And then I was like, okay, I just need this so that somebody who has no idea how to sell can go through this thing and then be able to sell afterwards. And I remember when I started launching gyms that the sales training I had in, in total was like an hour and 15 minutes, the whole thing. And what's crazy is that that sales training came from the intention of like, people have to watch this and at the end to be able to close.. And what's so interesting is that I see like lots of sales trainings that are like sold and things like that on the internet. They're, you know, they're 100 hours long, but I had a sales training that was like, just do this. Don't do anything else. Just do this. And I only had to get them to understand 7 steps in this process. And if they could understand the 7 steps, they could close. And so I would encourage you to first think, what is the absolute minimum required in order to close this out? What is the absolute minimum required in order to make a great training session, right? And then try and boil it down to the core components rather than make it complicated because the complexity piece again makes you feel important like you're so advanced when in reality, like there's probably fewer things that matter than you think. All right. So this is a very kind of technical advanced thing that I learned from the gyms, which is that you want zero cost upsells. Okay. So what does that mean? So I realized early on that people will come in the gym and then I'd sell them service, right? But they also would want other things after that. They would want apparel. They would want apps. They would want food. They would want supplements. Like there's all these other things, right? And so I realized that it would cost me about $200. Well, later $200, earlier cost me less, but let's call it $100, $200 to acquire a customer. Okay. The question I then asked myself was, is there something that I can sell them that costs me no time? Because selling service costs me time, right? There's something I could sell that costs me no extra effort. That could recoup that original cost? And the answer was yes. And so if you sell a service, I think one of the easiest things you can do is upsell products that go with the service that you just make your margin on and you can liquidate your ad cost upfront. And so for me, I sold supplements. I'd sell $200 or $300 supplements to every person. And the margin I made on the supplements was usually enough to cover the cost of all of my advertising every month. So basically I would just recover all my advertising bill with my supplements so I could spend whatever I wanted. To get customers because then all of my service revenue was basically gravy on top. And so the goal that I would, like, don't think, oh, that doesn't work for my business. Ask it differently. Think, how could I make something like this work for my business? So like if I have a yoga studio, that's like, fine, sell yoga blocks, sell mats, sell leggings, whatever. 'Cause they're gonna want that stuff. There's always gonna be a couple other things that someone's gonna want when you have a service typically. And if you're like, well, I can't immediately think of some, fine. Then give yourself more than immediately to think about it because you only have to figure out one or two things and it can change your business wherever. Also, pro tip, if you want, you can, uh, you can sell a guarantee. So guarantees don't have to be free. You can sell a guarantee. So you can sell your normal services and if for an extra 10%, we'll guarantee this. People will buy a guarantee and guarantees are basically zero extra cost if they don't take it. And so it's like only 1 out of 10 people who buys a guarantee ends up, uh, taking me up on it. And it's like, okay, well then 90% of the time it's just profit. Pro tip. And you can also charge more than 10%, obviously. 17. I learned the power of what I called internal plays. All right. So internal plays are basically internal promotions that you run to your existing customers in the list. And so one of the things I realized is that customers get bored of things. And so you just need to sell them more stuff. And so I would say, okay, you know, we have our normal gym membership, but we're going to run a big booty bootcamp. We're going to run a buns and guns. We're going to run a sexy, you know, get your sexy back, whatever. Right. And you laugh, but this is, this is This is how it was, right? I did an abs and arms program for dudes. And the thing is, is it sold. It worked great. But here's the best part is that I remember the first time I did this was Big Booty Bootcamp. So Sam, the guy that I, that I sent him forth, said, hey, uh, send these emails. So I was like, all right, so cool. So I sent these emails that were about Big Booty Bootcamp. And the emails all of a sudden, like, came back. People were like, I'm in, I'm in, I'm in on my, on my emails. Like, holy cow. And I got 30 people to spend $300. I made $9,000, which is It was huge for me, right? At the time, I made $9,000. And the crazy thing is there's a 6-week program and it was only, it was a 90-minute session once a week. So I got 6 sessions for $300. I was like, holy shit. And so with 30 people, I was able to do 6 sessions and make $9,000. So it was $1,500 a session. Like that was so much more than the amount of money that I was normally making per session. And so the thing is, is that these types of plays are, they're just free money. And so what you want to do is I would say have some sort of promotional cadence where like once a quarter, every 12 weeks or so, you run some sort of defined-in thing for your customers. And here's the crazy part is that in a business, especially like this, like a gym business, the margins historically are like 12.5%. That's the average, like micro gym margins. It's not a lot. And the average micro gym does like $360,000 a year. So the average gym owner is making like $30,000 to $40,000 a year, not a lot take home. And they're working like 80 hours a week. And so you might hear $9,000 and be like, oh, well, that's nothing. It's like, well, 9 times 4 is 36. You normally take home $36, then making another $36 doubles your income. Would you double your income for like a couple emails 4 times a year? Yeah. So do it, right? And so every business has this opportunity that there's something that you can do, a very defined thing. Like there wasn't, like Big Booty Bootcamp was one body part, right? And so think about your, your business, whatever you serve, you probably serve the whole body of someone's business. You serve the whole body of their computer. You serve the whole body of their phone, whatever. And then you say, cool, I'm just going to peel off one portion of that. And then say, hey, all my customers, any of you want this one thing like really maxed out? And 10% or 20% of the customers would be like, yeah, I'm interested in that. And then boom. And that thing that you end up selling is actually super high margin. Internal plays are almost all profit. You can run them 4 times a year. Recommend. Yeah, it's, it's all, it's basically all profit because you already pay the cost of acquiring the customer. And so the only cost is the cost of delivery. So for me, for the 6 sessions, If I wanted to like, you know, charge based on my time, right? I'd pay a trainer maybe, you know, $20, $20 back then, you know, $20 an hour for, for 90 minutes. I'd pay $30 times 6, $180 for $9,000. 98% margins. Like, what are we talking about? Like, let's do it. Right? Like, unbelievable. And so those opportunities exist. You just have to find them. Yeah, if I, if I wanted to acquire 30 new customers, I would have to pay $6,000. Right? And so like here, that's why this is free money. And most, most services have, if you at least have a decently designed business model, your gross margin should be 80% or more. And so if you're running 80% gross margins and you sell something, you make $10,000, you make $8,000 net. That's a great deal. The problem is just all the other costs of the business, but all those are fixed already. You don't have to pay cost to acquire customers. You already have your fixed cost covered. So this is just incremental revenue, which typically should be high margin for you. So let me give you a quick one. So here's number 18. Is a lot of people, and I read this a lot, like people have the, you know, they write books and they make content and they're like, here, here's why this thing works. I really try hard and you guys are welcome to call me out on it. I try really hard to not say why things work. And I think the reason I do that is because I have no idea and I don't think anyone else does either. So we make postulates, we create these hypotheses about how these work, but we have no split tests. We have no research, right? So instead I have spent almost no time in my life trying to figure out why things work and just figure out a big bag of things that do work. And I just try to recommend those things. And so on my channel, that's pretty much where I spend my time. I was like, this stuff works. I don't know why it works. I just know that it works. So run an internal play a couple of times a year. It'll probably make you more money. If you have upsells, try and have them be zero cost, zero work upsells so that you can just make more money upfront. Right? If you do it simpler, more people do a good job. Right? Like why? I don't know., but when you have fewer steps, it's easier for people to remember. Right? So next little lesson. This is a big one. It's a little lesson, but it's a big one. Agency. If you're a small business owner, there are two core things in every business: acquiring customers and delivering to those, those customers. Those are the two core elements of a business. Everything else you can outsource. Now, I'm not saying you should outsource it. I'm just saying it's possible to, but like, what is the core business that you actually run? And so if you, you have a business, then getting customers is a part of that. And so I think agencies have a use, but not as something that you rely on. And so I would recommend learning to acquire customers, which is why I make all the stuff that I do, right? If you're like, how do I acquire customers? I'll show you 8 ways how to do it inside of this book. So inside the Leads Book, I show 8 different ways to get customers: warm outreach, cold outreach, posting content, running ads, getting customer referrals, getting affiliates, other businesses to refer you business, getting agencies,, right, to run stuff for you. But I'll show you how we do that and the lesson I'm about to share with you. And then employees to do all those things on your behalf. Now, you as a person can only do the core 4. You get other people to do these other 4 things on your behalf. So how does an agency fit into this? So an agency usually has a mastery of some sort of platform or method. So they're either really good at like email outbound and they set appointments for you, or they're really good at making content. They clip clips for you. They're really good at running paid ads on YouTube, really good at running Google Ads. They're really good at SEO. They have some method of getting customers. Okay. My objective with an agency, if I have to do it, is that I want to beg, borrow, and do whatever I need to do in order to get them to teach me how they do it. And I prefer this method because agency owners tend to know how to do this better than people who teach it because they're actually doing it every day. I usually go into the intention with an agency owner to say, hey, here's my intention. I will sign up with you, but I will do it with the intention of learning everything I can from you so I can eventually replace you.. And so my actual story around this, I tell in the agency chapter in this book, which is that I got on the phone with a bunch of agencies and they were like $3,000 to $5,000 a month. And I could not afford that for at all. And so I knew how to run ads at the time because I'd learned from that, that weekend bootcamp that I did at the very beginning of my gym, but I needed to, I need to get better. Right. And so finally it was like the third or fourth call. I was like, hey man, like, what would it take? That's the magic question. What would it take for you to teach me one-on-one? He's like, I don't sell my time. And I said, okay, what would it take? It's America. There's a price. I was like, well, you know, would you do it for $1 million an hour? And he was like, well, yeah. I was like, okay, cool. So there's a price. So you will do it. So just give me a price that you think you would do it for. And he said, uh, $750 an hour. And he said that and I was like, deal. And so he ended up doing once a week with me for an hour. And he taught me how he would set up my ads. I was like, this way you don't have to, you don't have to include your team. You don't have any more., you know, cost of the business. Like, I'll just hop. It's basically just, it's just one call a week, man. $750. That's all. And so he said, sure. And so for the first few weeks, the deal was I'm the only one who touched the computer. So you show me what you're doing, but I'm gonna, I'm gonna do it. Right. And so I'm gonna, so you can tell me where I'm messing up if I get stuck. Once he taught it to me, and if I didn't know how, like why he was doing something, I was like, explain your decision-making process. And then after the 6th time that I, 6th call that I did, I like was like, I don't need this guy. I did 2 more calls. I didn't have anything that came up. And so for $6,000, basically the cost of 1 month of running this agency, I was able to learn the skill from one of the best agency owners. And then I used that skill for like the rest of my advertising career. I learned how to do national ad campaigns. I learned how to do retargeting. And those are the 2 lessons that I really learned I didn't know how to do. And that's what I learned. And so if you're a small business owner mastering How to get customers is one of the most important skills you can have. You can hire an agency, but you do it because you want to learn from them, in my opinion. Number 20. So this is a mistake that I made too. This is a crazy mistake. So this is absolute versus relative return. So I remember that I had other gyms in the area started catching on to the challenge, right? It was working really, really well. And they saw that I was doing well. So then they started running ads and these guys were more, you know, advanced business owners than me. I was 20-something, whatever.. And so I remember this guy moved into the area and he was running ads and I asked him how much he was spending and he was like, ah, I was like, I think we're spending like $500 a day. And I was like, $500 a day. Holy shit. And I'm spending like $50 to $100 a day. And so this guy comes in and like 5 to 10x my spend. I was like, oh my God, he's going to take all the ad space. And the thing is, is that he was willing to, and I was like, well, what's your return? He was like, ah, he's like, I don't know. I think we're getting like 4 to 1 on it. But that means that he's spending $15,000 and making $60,000, right? And here I was, you know, spending $1,500 a month, being really excited that I'm getting 10 to 1. So I spent $1,500, make $15,000, I net $13,500. This guy spending $15,000, making $60,000, netting $45,000. And I was like, wait a second. So this whole time I was obsessing about like every little incremental dollar, I was missing the bigger picture, which is like, at some point, you just need to spend more money. You just need to do more. And so I was getting, I was like, oh no, oh, we went from, we went from, you know, 13 to 1 to 10 to 1. I got to, I got to stop. It's like, no, man. Like if I could get 2 to 1 on a million dollars to make a million dollars by spending a million to make 2, I would rather do that than get 10 to 1 on 10 grand. And so the big lesson that I had to learn was that I was obsessed with my ROAS and not by the absolute amount of money that I was making in profit. Right. And so if the ROAS dropped, I would stop spending money. And so the big TL;DR on this is just focus on the bottom line of like, how much money am I going to make rather than being as obsessed with those. Now, this is especially around local markets, right? You want to make— I mean, any business, you want to maximize the amount of money you're making. Obviously, having big LTV to CAC discrepancies is great. And I'm a big advocate of that, but I don't want to do that to the long-term detriment of the total amount of money that I'm making. Don't break, what works. All right. So I'll tell you a very sad story. So I had my gym and I'd, I kind of like tweaked my, my, my sessions a few times from when I started to like try and make them better. And I got to the point where my gym was packed. Like I had 2 sessions running at any given time. I had a strength session and a cardio session. And it was, it was packed to the brim. I had 40, 50 people and I only have, you know, 3,500 square feet of actual like gym space. So it was packed. What's crazy is that because I couldn't fit any more people in, what I decided to do was I decided to cut the session times in half and consolidate it to only one type of session and combine them again. And what happened next was I churned out like a third of my customer base because they were like, why'd you change it? It was so great. And it was because I let the capacity tail wag the business dog. And so basically what I should have done was say, oh, uh, I nailed it. I should open another location. Right? Now, if I wasn't making enough profit, then I should have fixed my price. If I have huge amount of demand, everybody's showing up and everyone loves it, then I probably had more price flexibility. But basically what I reasoned with myself was, oh, I just need to find a way to fit more people so I can make more money. But it was the wrong, I messed it up. Like if you finally figure out what actually, like what people love, that is the hardest thing to do. And so once they love it, if your business model is profitable, don't mess with it. Just do more, open up more locations. If people love it and it's not profitable, then fix your pricing. Don't fix the product. Like if they love it, they love it. That's the hardest part. Pricing's easy to change. Changing what you deliver is super tough. That was one of the hardest lessons that I had to learn. And so the most elusive thing is getting customers who absolutely adore your product and service, tell their friends and bring— I remember what the energy of the gym was like at that point. And it was a terrible mistake for me. Ah, number 22. Work your leads. As we get, as we get further in the numbers, they're just going to get sillier and sillier. No, work your leads. So I realized that when I worked the leads, we got like 3 or 4 times more sales than if my team worked the leads. And what I realized was the incredible lever that lead nurture had on the throughput of my advertising. Even larger than the throughput of closing. And so like maybe I could close 80% of people walk in the doors, but a good closer would close, let's say, half. And so the difference between 50% and 80% is a— I don't know what the math is there, call it a 60% or 70% difference. Okay. But the difference between getting 10% of the leads in the door and 50% of the leads in the door is a 5x difference. And so it made more sense for me to put my leverage on figuring out how to work the leads harder and better and faster. Than even trying to obsess about close rates. And so this is something, and like, this is for you. I'm like, I'm gonna tell you a different story that's from the future. So I was recently talking to a business owner and he was closing 55% of his leads. Leads, not shows, not calls, leads, 55%. And I was like, dude, how you doing that? He was like, oh, I pay one girl full-time. She has no other job but to call leads the moment they come in. And I want to give you an idea of scale here. He gets about 2 to 3 leads a day. That's his business. 2 to 3 leads a day. That's all he gets. And he pays a girl full-time. And the only job description is be available. That's it. So 24/7, whenever a lead comes in, you stop what you're doing, you call the lead. That's it. That's the only job she had. But, and think about how crazy it is because as a business owner, you're like, well, I should give them something else. Well, think about this. Most people in his position, close 10% of their leads. And we've all heard the statistic that if you call a lead within 60 seconds, you have a 391% increase in sales. Okay. 391%. Let me translate that into Xs. That's a 4X. It's a 4.9X for business, almost a 5X. If you have something that could 5X the amount of sales that you're getting from the leads that you're working right now, is there something right now that you could do that's more valuable than that? Probably not. And so the question is, or the interesting thing is, is that the cost of actually achieving that is the cost of one maniac that you have to pay to stop whatever they're doing to call the leads. That's it. And so think about what the difference of a 2x, 3x, 4x, 5x in revenue would be for your business in terms of efficiency on the leads that you're currently getting. And then if that number is larger than what it would pay one maniac to call the leads, find the maniac and pay them. And so I figured out way too late that lead nurture oftentimes is a larger potential throughput. There's a larger discrepancy in performance on nurture than almost any part on acquisition. And so we focus at acquisition.com on that super heavily because it's one of the easiest, lowest risk levers that you could— you don't even have to change any of your marketing, you don't have to change any of your delivery, you just nurture better. Okay. Number 23. So this is gonna be a callback, which is never rely on another business to feed yours. Now I made an entire video about oneitis, which is that if you only have one kind of point of failure, that becomes the weak link in the chain. And so I told you about the gym mastermind that I joined and everybody there was running Groupon. Well, guess what happened when Groupon stopped working? They were all out of luck, right? You have to, you ideally want to have multiple ways to get customers. Now, I like to have multiple ways to get customers as I get bigger. I want to have one channel that I can reliably get customers when I'm starting out. But if it's another business, that's my source. I don't like that. So there's a difference between having a single channel risk versus another business risk. So if another business can choose to shut off my, my lead flow tomorrow, very risky. And so if I say, okay, I do door knocking or I do outbound, that is one channel and that can scale up usually to about $1 million a month. And then at that point you can kind of diversify. Now, if you're brick and mortar or local, it's one of those businesses that's a little bit different than like the online or national space. Which is that it's easier to have multiple streams. Typically with brick and mortar, you're going to have naturally a little bit more word of mouth. It's easy to set up your Google search terms. Winning local SEO, not that hard. Running paid ads local, not that hard. All right. And so it's more common to have multiple streams open in a local business than it is at a national level, just because of the nature of basically ease of competition there. The next 3 lessons are going to be 24, 25, 26, which is close to when I finished the gym. And so my gym, my gym season. And so we're going to end on there. So 24, 25, 26. All right. And so all 3 of these are going to be around people. And so the first thing is around what you have to pay for people. All right. So if you can't pay to get great people, you're going to have to work to get great people. So let me put it differently. It is faster to get better people by raising how much you're willing to pay. You'll just have better quality candidates that'll come towards you if you raise basically the ticket or the barrier to entry. That being said, I have had exceptional people that came for less. You just have to talk to like 10 times more people to find those people. So it's basically like in a video game, you either have to like grind or pay, right? It's like you, you have to like work to level up or you can pay to level up. Well, if you're poor, you're starting out in your business, it just means that you're going to work and the work is outreach and running, you know, job postings and doing a lot of interviews and kissing a lot of toads before you find your magic prince, which, hey, I'm glad that you found your magic prince, which was your customer success rep. All right. And so you either got to grind or you got to pay. So that's not number 1. That's number 24, but number 1 for people. All right. Number 2 or number 25. Whichever we're going to say. Platinum rule. So treat people the way they want to be treated, not the way you want to be treated. So I'll tell you this, this really, really crazy story. So my best gym employee of the whole time that I had my gyms was a guy named Jesus. Well, I won't say his whole name. His name was Jesus. And he was the best, the best of everything, right? He was an unbelievable salesperson, unbelievable manager, great trainer, amazing energy. He was in shape. Everybody loved him. I loved him. It was great. So I ended up promoting him to manager. All right. So I'm going to tell you this story. So number 25 is the Platinum Rule. And this was a really eye-opening experience for me. I had an employee that taught me one of the most interesting lessons I've ever learned in managing people. So my single best manager across all my gym locations, everyone loved him. He was an amazing trainer. He had great energy. He was in shape. He was great at sales. He was awesome. So I ended up promoting him to manager and he did an amazing job. One of the best managers I ever had. And at like month 6, he came to me and he was like, hey man, I, I don't want to be manager anymore. And I was like, what's going on? What's wrong? Like, let's figure this out. And he was like, I just don't like the stress of being manager. He's like, I'd rather just like train clients, train myself, go home. And I was like, well, so you still want to work here? He's like, yeah, no, I love it here. And I was like, okay. I was like, so you just want to go back to your old job? And he was like, yeah. I was like, so, but I was like, you're going to make half as much money. And he was like, yeah, I'll, I'll just, I'll just be poor then. And he said, yeah, I guess I'll just be poor. So I was like, you're going to make half as much money. He said, I'll just be poor then. And I remember him saying that. And it was like my world, like twirled around me. I was like, I don't understand this at all. But he said it with so much conviction. I was like, I don't understand it, but I respect it. And the lesson that I took away from that was not everyone's motivated by the same things as me. And to the same degree, it means that they're motivated by other things., and I have to learn what those other things are so that I can build career paths and roles and incentives that are right for them. And so that was the whole concept of the Platinum Rule rather than the Golden Rule. Instead of like, treat others the way you wanna be treated, it was treat others the way they wanna be treated. And that was my big takeaway that I've tried to stick with myself to this day that I still mess up all the time. But it was just like, it was such a crazy lesson. I figured I'd share it. So 26 on people. Can you be friends with your employees? This is a controversial one. Employees? Friends? I'll tell you the difference. So when I started, I was friends with all my employees. Whatever the professional line was, I definitely didn't have it. And so I was just friends because I was 20-something, right? And all the people who worked for me were 20-something. Like, we're all just like a bunch of, bunch of hooligans, right? Like trying to run a business. Basically, I didn't run that well, right? Like I would show my emotions on my sleeves. If I was upset, they would be upset. I'd take my emotions out on them. And like when I needed them to change something, it was weird because we're friends. I'm like, hey man, can you, you know, like it just was It sucked. So I then kind of created the rule, like, you can't be friends with your employees. Right. And so I kind of lived that way for a while and that maintained a professional line. And I would say that where I'm at now in my career is that you can be friends with your employees as long as you maintain a clear line, which is that you, they have to respect. And the easiest way that I have delineated this is literally doing a hat change. It sounds silly, but it doesn't have to be an actual hat. But I, I'll start a conversation and be like friend hat, and then I'll talk whatever I'm going to talk. And sometimes I'm like, hey man, boss hat. Like, this is, this is what's going wrong. Like, you need to change this. Right? And by being able to maintain that, and I don't know if that's a maturity thing or whatever's happened. First was like friends with everyone. That didn't work. Friends with no one. Uh, you can do that, but I would say like life is lonely. Um, and then the, you know, the third version, at least where I'm at now, is that these are the people that help me accomplish my goals. I mean, I can't imagine a better definition of a friend. People who like try to help you accomplish what you're, what you're trying to do. And so the people that work at acquisition.com, I'm friends with many of them, but we also have a line of kind of like mutual respect and professionalism because at the end of the day, this is the kind of, you know, we're business athletes and we're all on a team. And so everyone needs to perform. And so it's kind of having more like a coach relationship, I think, where it's like a coach is still, I would say, friends with the players, but there's just some line that you don't cross. And I think that that's, that's really what it comes down to. Like, I'm there for them 100%. I'm probably not going to like come in in tears because my dog dies to somebody who's on my team. Like, I don't think that'd be appropriate, right? So it's just maintaining that line. So these are the 26 lessons I learned from building my gyms. And if you want to see me apply these lessons to a real everyday business that's not at all in this space, check out over here where I help a stranger build a million-dollar business. Enjoy.