Helping a Service Business Owner Build Systems — Transcript

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1. 0:00owner medical practice with kind of
2. 0:02closing in on 3 million revenue.
3. 0:05We'd like to grow. I've wrote down my
4. 0:07question.
5. 0:08Um
6. 0:10and
7. 0:11it's um
8. 0:13what's the most overlooked operational
9. 0:15system that adds the most leverage in
10. 0:17scaling a service-based medical business
11. 0:20like HRT and if you could uh
12. 0:24only hire one person to help implement
13. 0:26that system, who would it be and what
14. 0:28would their role look like?
15. 0:29>> It's a very targeted question. I think
16. 0:31it'll depend on the business. So, what's
17. 0:34um
18. 0:36right now are you are you local or are
19. 0:38you
20. 0:40Yeah, are you local or you national?
21. 0:42>> Just local.
22. 0:42>> You're local. Okay, so people come in
23. 0:44person.
24. 0:44>> Yes.
25. 0:45>> Okay, got it. What's your primary lead
26. 0:46source?
27. 0:47>> Uh meta.
28. 0:49>> Meta, so ads?
29. 0:50>> Yeah, ads and revenue sorry, referrals.
30. 0:53>> Referrals. Sure, what's the split?
31. 0:54>> Probably
32. 0:5630 60 referrals 30 60 meta.
33. 0:59>> Okay, heard. What's CAC? What's LTV?
34. 1:01>> Um
35. 1:03LTV would be probably [snorts]
36. 1:074K, I would say.
37. 1:09>> That's LTV?
38. 1:10>> Yeah.
39. 1:11>> What's CAC?
40. 1:12>> Um
41. 1:16>> What do you spend for a on per month on
42. 1:18ads? How many new customers do you get?
43. 1:20>> We spend about
44. 1:2125K
45. 1:23>> per month
46. 1:23>> Yeah.
47. 1:24>> Okay.
48. 1:24>> And
49. 1:25>> AdWords?
50. 1:26>> Excuse me?
51. 1:26>> AdWords or meta or meta?
52. 1:28>> Both.
53. 1:28>> Both, okay.
54. 1:29>> Yeah. And we get
55. 1:32probably out of that we get roughly
56. 1:35around 150 new patients.
57. 1:38>> Okay, so like 225-ish
58. 1:40per per patient-ish. Okay, so you're
59. 1:43making like 20-ish to one. That's not
60. 1:45bad. Um okay. So, 20-ish to one and I'm
61. 1:49guessing margins are good.
62. 1:51>> Yeah.
63. 1:51>> Great. So, do you have from a capacity
64. 1:54standpoint do you have more square
65. 1:56footage that you can service more
66. 1:57customers with?
67. 1:57>> Yes, we have more square footage.
68. 1:58>> How many How many more customers can you
69. 2:00take right now for a month sales
70. 2:01velocity-wise?
71. 2:03>> 100 to 200.
72. 2:04>> Okay, so you can double right now. Okay.
73. 2:06So then
74. 2:07what breaks when you double?
75. 2:10>> Nothing breaks.
76. 2:11>> Well, then why don't you double?
77. 2:14No, to answer your question, so like the
78. 2:15thing that breaks first is going to be
79. 2:18the operating constraint. And so then
80. 2:20what stops you from doubling?
81. 2:22>> I don't like
82. 2:23>> Can you spend twice as much money?
83. 2:25>> Yeah.
84. 2:26>> So why don't we spend twice as much
85. 2:28money?
86. 2:29We should do that. That sounds good.
87. 2:31Um
88. 2:32>> [snorts]
89. 2:33>> So if you had twice as many people,
90. 2:34would they all be able to be serviced?
91. 2:36>> Yeah.
92. 2:37>> I love this for us.
93. 2:39So
94. 2:41I I don't I don't really know what the
95. 2:43issue is.
96. 2:44>> Yeah, I think um
97. 2:46>> Are you doing this right now month over
98. 2:48month?
99. 2:48>> No, we're kind of stagnant right now.
100. 2:50>> So then why are why?
101. 2:51>> Yeah, that's what That's why I'm here.
102. 2:53>> Why not So why don't we spend more
103. 2:55money?
104. 2:56Just cuz you It's like you got two
105. 2:57mental barriers of 1,000 bucks a day and
106. 2:58you're like, I don't want to spend more
107. 2:59than 1,000 a day.
108. 3:01>> I
109. 3:02I mean, I think my personal observation
110. 3:04or thinking was that we should be more
111. 3:07efficient with the money we're spending.
112. 3:09Like I was thinking like, okay, our
113. 3:10conversion rate
114. 3:11>> Like 20 to 1 should be like 40 to 1.
115. 3:14>> Maybe.
116. 3:16>> I mean, you can always get more
117. 3:17efficient. I wouldn't say it's the limit
118. 3:18of the business.
119. 3:20>> Okay.
120. 3:20>> I mean, long term, the only thing that's
121. 3:22like if we're just zooming zooming out,
122. 3:24the only thing that's really going to
123. 3:25matter long term is that you keep people
124. 3:26forever.
125. 3:27>> Mhm.
126. 3:28>> That's the only thing that matters. Do
127. 3:29you Like what are your long term goals?
128. 3:31>> Long term goals?
129. 3:31>> Yeah.
130. 3:32>> Ideally, I mean, we would like to grow,
131. 3:35uh expand, you know, nationwide if
132. 3:38possible.
133. 3:39>> Would you expand to multiple locations
134. 3:40locally first?
135. 3:41>> Yeah.
136. 3:42>> Okay.
137. 3:42>> Yeah.
138. 3:43We have two right now.
139. 3:44>> Okay. So if you could have four or five
140. 3:47in your local market, you'd be fine with
141. 3:49that?
142. 3:49>> Yeah.
143. 3:50>> Okay.
144. 3:51Um
145. 3:53Yeah, the way I mean the way to do this
146. 3:54is that you you basically want want to
147. 3:56reverse engineer forever stick. Now, HRT
148. 3:59is a product that
149. 4:01tends to keep people pretty long time
150. 4:02cuz it's hard to get off.
151. 4:03Right? They might switch you switch
152. 4:05providers, but once you're on you kind
153. 4:06of stay on.
154. 4:07Um
155. 4:09So, as long as your what's your churn?
156. 4:11Do you know?
157. 4:12>> Um
158. 4:14Right now, probably 40.
159. 4:16>> 40 per 40% annually?
160. 4:20>> Yeah.
161. 4:21But
162. 4:21>> 40% annually, so you keep 60% of your
163. 4:23customers every year?
164. 4:25>> Maybe less.
165. 4:27Maybe we keep like 50%.
166. 4:29>> Okay, so 50% leave, 50% stay. All right,
167. 4:31so that would be something that I'd be
168. 4:32looking at. Um so yeah, if I were to
169. 4:35solve this in order, I hear where you're
170. 4:37coming from from like
171. 4:39because you're local, you need to make
172. 4:40sure that you don't just burn through
173. 4:41your reputation.
174. 4:42Um which you might be at 50% of your
175. 4:45customers leaving every year, especially
176. 4:47on a product that's typically as as
177. 4:49sticky as that. I mean, that's if you
178. 4:50come from the gym world. Um did you go
179. 4:53through Gym Launch?
180. 4:53>> Yeah.
181. 4:54>> Yeah, so you learned how to market and
182. 4:55sell. You just didn't learn how to
183. 4:56product. Um
184. 4:58Yeah, so I think you I think your
185. 5:00instincts are right. I think we have to
186. 5:01fix churn, and we'd have to fix the
187. 5:03sales motion. Part of it is going to be
188. 5:05how the expectations are being set on
189. 5:06both the marketing and the sales call
190. 5:07and the offers that are
191. 5:09that are that are that are top of
192. 5:10funnel,
193. 5:11um and kind of the handshake between
194. 5:13kind of step one, two, and three, and
195. 5:15what are the what are the kind of the
196. 5:16key activation points, and um the
197. 5:18conversations that have to be had. So,
198. 5:19if if you did have a lot of profit, I
199. 5:21would probably grab someone from
200. 5:25from the software world and customer
201. 5:26success, um to build out the customer
202. 5:29success like pathway for you, so that
203. 5:32you can fix the churn issue. So, to your
204. 5:34point, I hear what you're saying. We're
205. 5:35like, yeah, we could spend more, but
206. 5:37you'd be churning out of people. So, I
207. 5:39think your your instinct's right there.
208. 5:40Um fix the hole in the back, and then
209. 5:43number one, if you just do that, the
210. 5:44business will probably double. Like, if
211. 5:46you can cut your churn from, call it 50%
212. 5:48per year to 20% per year or less, then
213. 5:51the business will just double on its own
214. 5:53in 2 and 1/2 years. If you just did
215. 5:55nothing, you just kept everything the
216. 5:56same. But, the thing is, it's
217. 5:57disproportionately that will drop the
218. 5:58bottom line. So, your profit would
219. 6:00significantly more than double by doing
220. 6:02that.
221. 6:03I'll give you guys I'll give you guys a
222. 6:04fun example. So, uh We Whiten is a is a
223. 6:06teeth whitening chain that we own.
224. 6:08Um
225. 6:09and when we invest in the business,
226. 6:12we
227. 6:14two
228. 6:15two point
229. 6:17No, we doubled LTV,
230. 6:19or rather doubled lifetime revenue per
231. 6:21customer,
232. 6:22which sounds like a small thing, but by
233. 6:24doing that, we 2.4x the revenue,
234. 6:27and we 7 and 1/2 x the profit per
235. 6:28location.
236. 6:30That's why I bought the company. I was
237. 6:31like, "Oh, I can crush this." Uh
238. 6:34And so, I I I see that as a good
239. 6:35incentive for you in terms of
240. 6:38uh making it worth it. Like, you might
241. 6:39be able to double or triple or maybe
242. 6:41quadruple the profit of the business by
243. 6:43simply keeping going from churn being
244. 6:44half people leaving to only 20 or maybe
245. 6:4710% leaving every year. If you do that,
246. 6:48the thing will just grow like crazy. Um
247. 6:50and you'll just feel good about it. So,
248. 6:52your pro The who to solve that problem
249. 6:54is there is a customer success person
250. 6:56and then mapping the journey, and
251. 6:57there's probably a little bit of tech
252. 6:57stack that you need to automate a a good
253. 6:59deal of it so that you don't have um as
254. 7:01much operational drag.
255. 7:03>> Awesome. Thank you so much.
256. 7:04>> You bet.
257. 7:04>> Thanks.
258. 7:06>> I can't give you every single SOP, that
259. 7:07would be ridiculous. It would be like
260. 7:08this long. [music] But, these are the
261. 7:09top five SOPs that we have used to scale
262. 7:12that Leila actually put together [music]
263. 7:13for us cuz she's really been the one who
264. 7:15operates the business. And so, yeah, I
265. 7:16don't know what's inside of it. But, um
266. 7:18it's good So,
267. 7:19>> [music]
268. 7:19>> you should check it out cuz Leila made
269. 7:20it, and she makes good stuff. It's free.