How to Build an Eight-Figure Agency — 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
4. 0:07uh 7 million in revenue. 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.
9. 0:22>> Yeah.
10. 0:22>> And then I think it's trying to figure
11. 0:25out how to capitalize on market risk uh
12. 0:28with AI coming up. So you you were
13. 0:30answering some of that just the other
14. 0:31day.
15. 0:31>> Yeah, I think um are you guys already
16. 0:33doing like LLM SEO?
17. 0:35>> I'm I'm building that service out right
18. 0:37now.
19. 0:37>> Yeah, cuz that's I mean, it's absurd. I
20. 0:40think I think I saw this this morning
21. 0:42like GPT has 500 million users weekly.
22. 0:46That's really hard to comprehend,
23. 0:48everyone. Like that's a lot. It's a lot
24. 0:51a lot.
25. 0:52Um
26. 0:53that's more than like social media
27. 0:55platforms. Like it's a lot.
28. 0:57Um
29. 0:58and it's making recommendations for
30. 0:59commerce. And I'm sure they will
31. 1:01monetize it in the whatever future. Um
32. 1:04but yeah, I mean, that to me that's like
33. 1:06what's my future proving thing? That's
34. 1:07probably like thing one. Um thing two is
35. 1:11we have to Do you have a really good
36. 1:12finance arm or no?
37. 1:15>> Uh yeah, we have a fractional CFO and
38. 1:17then my wife runs money.
39. 1:18>> I'll say no. Um not as a not as a slight
40. 1:22just because in the business that you're
41. 1:23in, typically it's more op- ops heavy.
42. 1:27And so you have to be more financially
43. 1:29disciplined in that business than you
44. 1:31can get away with in let's say a course
45. 1:32business, right? Um
46. 1:35that being said, what's um what's turn
47. 1:36right now? What's your price point?
48. 1:38>> Uh turn is
49. 1:405% a month.
50. 1:42>> Okay. And what's your price?
51. 1:43>> Price point is like
52. 1:45uh average is like 5,000 a month.
53. 1:48>> It's pretty high.
54. 1:49For SMBs. You said 5%?
55. 1:52>> Yeah.
56. 1:53>> Okay. And then you're currently doing um
57. 1:57You said 7 million?
58. 1:58>> Yeah.
59. 2:00>> Okay, so you got 7 million here.
60. 2:02And then how many units are you selling
61. 2:03a month?
62. 2:05>> Um like 10.
63. 2:09>> So you're going down right now.
64. 2:12>> Or I just have the wrong number on the
65. 2:14how many we're selling. We're going
66. 2:15We're going up very fast.
67. 2:16>> you said no no no actually sorry. I I
68. 2:18did the math wrong.
69. 2:18>> Yeah.
70. 2:19>> That's on me. Yeah, so you're pacing
71. 2:21right now um 12 million
72. 2:24in terms of your run rate.
73. 2:26Right now.
74. 2:27So you want to get to 14. You can change
75. 2:29nothing and get to 12.
76. 2:31>> Mhm.
77. 2:32>> So I think we just need to make sure
78. 2:33that the additional
79. 2:355 million that's going to come is going
80. 2:37to drop to the bottom line.
81. 2:39So do you have operating capacity right
82. 2:41now in order to to scale the business?
83. 2:43>> We're building out near shore.
84. 2:45So that's going to allow us to do that,
85. 2:48I think. And so we're at our first five
86. 2:50employees. We're trying to add like 10
87. 2:51more in the next like 3 months with near
88. 2:53shore.
89. 2:55>> Yeah, I think like So I'll give you the
90. 2:57the the 12 months ago answer and then
91. 2:59I'll give you the today answer.
92. 3:01So the 12 months ago answer is yeah, I
93. 3:02would probably near shore almost the
94. 3:03whole team and then that would that
95. 3:05would give you the margin back that you
96. 3:06need.
97. 3:07If anyone's curious what this is, this
98. 3:08is how you calculate the hypothetical
99. 3:09max of a business based on its sales
100. 3:11velocity and LTV, which is what I was
101. 3:12trying to get to with you but you had a
102. 3:13zero so there's no point.
103. 3:15But you sell 10 units a month, 5K, 5%
104. 3:18churn, so 100K LTV times 10 is a million
105. 3:22bucks a month. So 12 million is your
106. 3:25where you will be projected to.
107. 3:27You're currently at seven so you've got
108. 3:295 million that's going to come if you
109. 3:30change jack [ __ ] about the business. So
110. 3:33you're going to have 5 million more in
111. 3:34revenue that's going to come in and what
112. 3:36we need to do is make sure that one more
113. 3:38of the existing revenue you got drops to
114. 3:39the bottom line and for sure the
115. 3:40additional revenue drops to the bottom
116. 3:42line. What does it cost to deliver on a
117. 3:43customer?
118. 3:45>> Uh we have 50% gross margin.
119. 3:48>> Yeah, that's probably why. So if I run
120. 3:50service businesses, my rule of thumb is
121. 3:51always 80.
122. 3:53So, I just don't start.
123. 3:54>> Yeah, I know. That's what you said. I
124. 3:55feel like that's a little crazy in our
125. 3:56business, but I would love that.
126. 3:58>> I I just don't I I would just challenge
127. 4:00that.
128. 4:01>> Yeah.
129. 4:02>> Just cuz like I'll I'll say this,
130. 4:03industry averages you can completely
131. 4:05throw out.
132. 4:07Because
133. 4:09American averages are overweight,
134. 4:12divorced twice, going to die at like 70.
135. 4:14So, like why would I give a [ __ ] what
136. 4:15the average is for an industry? Like
137. 4:17most people suck
138. 4:19at everything. Just concluding their
139. 4:20business. And so, why would I Why would
140. 4:22I measure myself against that benchmark?
141. 4:24It just like it All it does is anchor me
142. 4:26to lower standards.
143. 4:28So, there's no reason why you shouldn't
144. 4:29have an agency that runs 50% margins.
145. 4:31Zero. You're also in SEO and you're
146. 4:33niche down. There's tons of SEO agencies
147. 4:35that run 50% plus net margins.
148. 4:37And with AI and nearshoring, there's
149. 4:40for [ __ ] sake, for sure you can run
150. 4:42better margins than that. And so, I say
151. 4:44that just cuz I want to break this
152. 4:45belief and being a little bit crude, but
153. 4:47um
154. 4:48the nearshore is the 12 months ago
155. 4:49answer. The today answer is you need to
156. 4:52become an AIG.
157. 4:54Um because I'll bet you that 80% today
158. 4:58of what you guys do is automatable. Not
159. 5:00tomorrow. Like today, 80% of what you
160. 5:02do, AI can do.
161. 5:03>> I think I've been thinking of that as a
162. 5:04threat, but I think I'm just trying to
163. 5:06you know
164. 5:07>> Oh, why?
165. 5:08>> to capitalize on market risk, help think
166. 5:10a little bit I'm trying to flip that in
167. 5:12my head to
168. 5:13>> Definitely do not think of this as a
169. 5:14risk. Think of it as a risk for
170. 5:15everybody else because you're coming.
171. 5:17>> Yeah.
172. 5:18>> Be the big bad wolf, not the sheep.
173. 5:20>> Mhm.
174. 5:22>> Like for real.
175. 5:23Cuz like
176. 5:25I mean, what's the other option?
177. 5:26>> Yeah. Yeah.
178. 5:27>> Like imagine like from from heaven there
179. 5:29was this tool that they were like, "Hey,
180. 5:31I can 10x the productivity of your
181. 5:33entire staff and the rest of your
182. 5:35competition aren't going to do it
183. 5:36because they're lazy." Would you be
184. 5:38like, "I want that." It's available.
185. 5:40>> Yeah, we're we're incorporating a bunch
186. 5:42of things, but I think
187. 5:44I'm like a thousand hours in on ChatGPT
188. 5:46right now and I don't know if I'm really
189. 5:48using it as like
190. 5:49>> No, yeah, you
191. 5:50You have to be doing it You have to be
192. 5:51You have to get up to speed on agents.
193. 5:53You have to get up to speed on on like
194. 5:55make.com and how you can basically do
195. 5:56kind of like 2.0. Like what Zapier
196. 5:58automations used to be is what kind of
197. 6:00the new make.com type automations. Like
198. 6:03all the I can I can It's such an
199. 6:05ops-heavy business and it's so
200. 6:06tech-oriented that almost everything
201. 6:08that your team does right now, minus
202. 6:09account management, can pretty much be
203. 6:11done by AI.
204. 6:12So, you have a big opportunity. If you
205. 6:14wanted to sell for 20, you could get to
206. 6:1612 with 6 million in operating in
207. 6:19margin, and then you could sell for 20,
208. 6:21for sure.
209. 6:22So, like the business you have right
210. 6:24now, with no real changes in terms of
211. 6:27pricing and sales motion and anything
212. 6:29like that, can get you there. Like we
213. 6:31just have to improve the operational
214. 6:33flow within the business to get you the
215. 6:35exit you want. Like this is in shooting
216. 6:37distance. You just need to learn more
217. 6:38[ __ ]
218. 6:39For real. Like that This is good news.
219. 6:41This should be good news.
220. 6:42>> Yeah.
221. 6:43>> I'm just speaking aggressively, but it's
222. 6:44good.
223. 6:47Does that help? Okay.
224. 6:48>> For sure.
225. 6:49>> Yeah.
226. 6:50Hopefully just more belief breaking on
227. 6:51that one. If you are a business owner
228. 6:53and you are not growing as fast as you'd
229. 6:55like, I'd like to give you a free gift.
230. 6:57So, my team and I put together the $100
231. 6:59million scaling road map, which is
232. 7:00basically 200 hours of us looking over
233. 7:02all the portfolio companies we've had
234. 7:03and what stages of growth they went
235. 7:06through and more importantly, where they
236. 7:07got stuck and how they got past it. And
237. 7:10so, we broke it in these 10 stages and
238. 7:11we made this little kind of quiz thing
239. 7:13where if you put in your business
240. 7:14information, it'll tell you where you're
241. 7:15at and the most important part for you,
242. 7:17what to do for each of functions of the
243. 7:19business across product, marketing,
244. 7:20sales, customer success, recruiting, IT,
245. 7:22human resources and finance. And so, no
246. 7:24matter what you're struggling with,
247. 7:26someone else has already struggled with
248. 7:27it and solved it. And so, I'd like to
249. 7:29give you this thing absolutely free. You
250. 7:31can go to acquisition.com/roadmap,
251. 7:32plug in your business information and if
252. 7:34you want us to actually help you
253. 7:36de-constrain the business and you're
254. 7:38trying to scale, we'd love to help you
255. 7:39out on the thank you page. You can book
256. 7:41a call with my team and we will
257. 7:43look into business, see if we can help
258. 7:45and if we can, we'll invite you out to
259. 7:46Vegas and we'll do this in person live.