Helping an SEO Agency Get to $14M/Year — Transcript

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1. 0:00I sell SEO websites and PPC to roofing,
2. 0:03HVAC, and home services company
3. 0:05companies. We do uh 7 million in
4. 0:08revenue. I would like to
5. 0:11do 14 and sell for 20, my company for
6. 0:1420. Um and the kind of the thing holding
7. 0:18me back right now, I think is margin.
8. 0:20I'm at like 13% EBITDA. Yeah. And then I
9. 0:23think it's trying to figure out how to
10. 0:25capitalize on market risk uh with AI
11. 0:28coming up. So you you were answering
12. 0:30some of that. Just tell me
13. 0:31>> That's great. Yeah, I think um are you
14. 0:32guys already doing like LLM SEO?
15. 0:35I'm I'm building that service out right
16. 0:37now. Yeah, cuz that's I mean, it's
17. 0:39absurd. I think I think I saw this this
18. 0:42morning like GPT is 500 million users
19. 0:45weekly.
20. 0:46That's really hard to comprehend,
21. 0:48everyone. Like that's a lot. It's a lot
22. 0:51a lot.
23. 0:52Um
24. 0:53that's more than like social media
25. 0:55platforms. Like it's a lot.
26. 0:57Um
27. 0:58and it's making recommendations for
28. 0:59commerce. And I'm sure they will
29. 1:01monetize it in the whatever future. Um
30. 1:04but yeah, I mean, that to me that's like
31. 1:06what's my future proving thing? That's
32. 1:07probably like thing one. Um thing two is
33. 1:11we have to Do you have a really good
34. 1:12finance arm or no?
35. 1:15Uh yeah, we have a fractional CFO and
36. 1:17then my wife runs money. I'll say no. Um
37. 1:21not as a not as a slight, just because
38. 1:23in the business that you're in,
39. 1:24typically, it's more op ops heavy. And
40. 1:27so you have to be more financially
41. 1:29disciplined in that business than you
42. 1:31can get away with in let's say a course
43. 1:32business, right? Um
44. 1:35that being said, what's um what's churn
45. 1:36right now? What's your price point?
46. 1:38Uh churn is
47. 1:405% a month. Okay. And what's your price?
48. 1:43>> price point is like
49. 1:45uh average is like 5,000 a month.
50. 1:48It's pretty high
51. 1:49for SMBs. You said 5%?
52. 1:52Yeah. Okay. And then you're currently
53. 1:55doing um
54. 1:57You said 7 million?
55. 1:58Yeah.
56. 2:00Okay, so you got 7 million here.
57. 2:02And then how many units are you selling
58. 2:03a month?
59. 2:05Um like 10.
60. 2:09So you're going down right now.
61. 2:12Or I just have the wrong number on the
62. 2:14how many we're selling. We're going
63. 2:15We're going up very fast.
64. 2:16>> you should go No, no, no, actually
65. 2:17sorry. I I did the math wrong.
66. 2:19That's on me. Yeah, so you're pacing
67. 2:21right now um 12 million.
68. 2:24In terms of your run rate.
69. 2:26Right now. So you want to get to 14, you
70. 2:29can change nothing and get to 12.
71. 2:31Mhm.
72. 2:32So I think we just need to make sure
73. 2:33that the additional
74. 2:355 million that's going to come is going
75. 2:37to drop the bottom line.
76. 2:39So do you have operating capacity right
77. 2:41now in order to to scale the business?
78. 2:43We're building out nearshore.
79. 2:45So that's going to allow us to do that,
80. 2:48I think. And so we're at our first five
81. 2:50employees, we're trying to add like 10
82. 2:51more in the next like 3 months with
83. 2:53nearshore.
84. 2:55Yeah, I think like So I'll give you the
85. 2:57the the 12 months ago answer and then
86. 2:59I'll give you the today answer.
87. 3:01So the 12 months ago answer is yeah, I
88. 3:02would probably nearshore almost the
89. 3:03whole team and then that would that
90. 3:04would give you the margin back that you
91. 3:06need. Um if anyone's curious what this
92. 3:08is, this is how you calculate the
93. 3:09hypothetical max of a business based on
94. 3:10its sales velocity and LTV, which is
95. 3:12what I was trying to get to with you,
96. 3:13but you had a zero so there's no point.
97. 3:14Um but you sell 10 units a month, 5K, 5%
98. 3:18churn, so 100K LTV times 10 is a million
99. 3:22bucks a month. So 12 million is your
100. 3:25where you will be projected to.
101. 3:27You're currently at seven, so you've got
102. 3:295 million that's going to come if you
103. 3:30change jack [ __ ] about the business. So
104. 3:33you're going to have 5 million more in
105. 3:34revenue that's going to come in. And
106. 3:36what we need to do is make sure that one
107. 3:38more of the existing revenue drops the
108. 3:39bottom line and for sure the additional
109. 3:41revenue drops the bottom line. What does
110. 3:42it cost to deliver on a customer?
111. 3:45We have 50% gross margin. Yeah, that's
112. 3:48probably why. So if I run service
113. 3:50businesses, my rule of thumb is always
114. 3:5180.
115. 3:53So, I just don't start.
116. 3:54>> Yeah, I know. That's what you said. I
117. 3:55feel like that's a little crazy in our
118. 3:56business, but I would love that. I just
119. 3:58I don't I I would just challenge that.
120. 4:01Yeah.
121. 4:02Just cuz like I'll say this, industry
122. 4:04averages, you can completely throw out.
123. 4:07Because
124. 4:09American averages are overweight,
125. 4:12divorced twice, going to die like 70.
126. 4:14So, like why would I give a [ __ ] what
127. 4:15the average is for an industry? Like
128. 4:17most people suck
129. 4:19at everything. This concluding their
130. 4:20business. And so, why would I Why would
131. 4:22I measure myself against that benchmark?
132. 4:24It just like it All it does is anchor me
133. 4:26to lower standards.
134. 4:28So, there's no reason why you shouldn't
135. 4:29have an agency that runs 50% margins.
136. 4:31Zero. You're also in SEO and you're
137. 4:33niche down. There's tons of SEO agencies
138. 4:35that run 50% plus net margins.
139. 4:37And with AI and nearshoring, there's
140. 4:40For [ __ ] sake, for sure you can run
141. 4:42better margins than that. And so, I say
142. 4:44that just cuz I want to break this
143. 4:45belief and being a little bit crude, but
144. 4:46um
145. 4:48The nearshore is the 12 months ago
146. 4:49answer. The today answer is you need to
147. 4:52become an AIG.
148. 4:54Um because I'll bet you that 80% today
149. 4:58of what you guys do is automatable. Not
150. 5:00tomorrow. Like today, 80% of what you
151. 5:02do, AI can do. And I think I've been
152. 5:03thinking of that as a threat, but I
153. 5:05think I'm just trying to you know Oh,
154. 5:07why? To capitalize on market risk, help
155. 5:10I think a little bit I'm trying to flip
156. 5:12that in my head to capitalize
157. 5:13>> Definitely do not think of this as a
158. 5:14risk. Think of it as a risk for
159. 5:15everybody else because you're coming.
160. 5:17Yeah.
161. 5:18Be the big bad wolf, not the sheep.
162. 5:20Mhm.
163. 5:22Like for real.
164. 5:23Cuz like
165. 5:24I mean, what's the other option?
166. 5:26Yeah, yeah. Like imagine like from from
167. 5:29heaven there was this tool that they
168. 5:30were like, "Hey, I can 10x the
169. 5:32productivity of your entire staff and
170. 5:34the rest of your competition aren't
171. 5:36going to do it because they're lazy."
172. 5:37Would you be like, "I want that?" It's
173. 5:39available. Yeah, we're we're
174. 5:41incorporating a bunch of things, but I
175. 5:43think
176. 5:44I'm like a a hours in on ChatGPT right
177. 5:47now. I don't know if I'm really using it
178. 5:48as like
179. 5:49>> No, yeah, you
180. 5:50you have to be doing it you have to be
181. 5:51you have to get up to speed on agents.
182. 5:53You have to get up to speed on on like
183. 5:55make.com and how you can basically do
184. 5:56kind of like 2.0 like what Zapier
185. 5:58automations used to be is what kind of
186. 6:00the new make.com type automations like
187. 6:03all the I can I can it's such an ops
188. 6:05heavy business and it's so tech oriented
189. 6:07that almost everything that your team
190. 6:08does right now minus account management
191. 6:10can pretty much be done by AI.
192. 6:12So, you have a big opportunity if you
193. 6:14wanted to sell for 20, you could get to
194. 6:1612 with 6 million in operating in margin
195. 6:20and then you could sell for 20 for sure.
196. 6:22So, like the business you have right now
197. 6:25with no real changes in terms of pricing
198. 6:27and sales motion and anything like that
199. 6:30can get you there. Like we just have to
200. 6:32improve the operational flow within the
201. 6:34business to get you the exit you want.
202. 6:36Like this is in shooting distance. You
203. 6:37just need to learn more [ __ ]
204. 6:39For real. Like that this is good news.
205. 6:41This should be good news. Yeah. I'm just
206. 6:43speaking aggressively, but it's good.
207. 6:46>> [laughter]
208. 6:47>> Does [snorts] that help? Okay.
209. 6:48Appreciate it. Yeah.
210. 6:50Hopefully just more belief breaking on
211. 6:51that one. If you are a business owner
212. 6:53and you are not growing as fast as you'd
213. 6:55like, I'd like to give you a free gift.
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215. 6:59million scaling road map, which is
216. 7:00basically 200 hours of us looking over
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218. 7:03and what stages of growth they went
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220. 7:07got stuck and how they got past it. And
221. 7:10so, we broke it in these 10 stages and
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225. 7:15at and the most important part for you,
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