I Bought 32 Teeth Whitening Studios and 5xed Their Value — Transcript

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1. 0:00How do you tell if there's a 10x? What
2. 0:01do you look for? What's sort of
3. 0:02qualities do you see?
4. 0:03>> So it's actually just looking at the
5. 0:04business like a pipeline. So it's like,
6. 0:05okay, you've got
7. 0:06uh X X per like basically you just have
8. 0:08to understand everything from click to
9. 0:10close to renewal. And so every business
10. 0:12more or less is like you have eyeballs
11. 0:14that at some point get converted into
12. 0:16leads or they get converted into
13. 0:18customers. So if it's leads then they
14. 0:19have eventually have to get a scheduled
15. 0:21appointment, they have to show, they
16. 0:22have to close, and then
17. 0:23on the back end once they are closed
18. 0:25they have to get a product delivered or
19. 0:26a service delivered, and then they have
20. 0:27to buy again and again or get upsold
21. 0:28into other things. Right? So if we look
22. 0:30at that, we can see breakages along that
23. 0:32line because that would be something
24. 0:34that we'd get in diligence just like,
25. 0:35okay, what are [clears throat] the
26. 0:36click-through rates on the ads? What are
27. 0:37the CPMs on the ads? What are the
28. 0:38conversion rates on the pages? What
29. 0:39percentage are scheduling? What
30. 0:40percentage are showing? What percentage
31. 0:41are closing? What's the average offer
32. 0:42rate? What percentage are we collecting
33. 0:44cash up front? What's the average close
34. 0:45rate? On the back end like how many
35. 0:47dropouts do we have in the first 48
36. 0:48hours after that? What does it look like
37. 0:50over the next 12 months or 24 months for
38. 0:52these customers? What percentage are
39. 0:53sending to the next level of service?
40. 0:55And so if we look at that and we have
41. 0:56our benchmarks for what we think we can
42. 0:58do with the processes that we have
43. 1:00already tested, then we're like, okay,
44. 1:02well these guys are getting 30% of their
45. 1:03appointments to show up and we know that
46. 1:05we can get that to 80. It's okay, well
47. 1:06there's a 2 and 1/2 X. Okay, boom,
48. 1:08there's one. And we're like, okay,
49. 1:11I think they're mispriced on this offer
50. 1:12and I think we can at least double this.
51. 1:15It's like, okay, well there's 5X, you
52. 1:16got 2 and 1/2 and 2. And we're like,
53. 1:18okay, and right now they're not doing
54. 1:19anything to reduce their turn, they're
55. 1:20at 10%. I think we can get them to
56. 1:22three, so there's a triple. And so we're
57. 1:23like, okay, so that's 15X.
58. 1:26What's our confidence score in terms of
59. 1:27like our likelihood that we'll be able
60. 1:29to implement these changes? Is it like a
61. 1:30super big overhaul or is it just like
62. 1:32there's a handful of things that we can
63. 1:33implement immediately see that? And
64. 1:35the easier it is, the more likely we're
65. 1:37going to do it.
66. 1:39A chain of teeth whitening studios, we
67. 1:41have 32 locations.
68. 1:43We just bought.
69. 1:45And I just got so excited because I saw
70. 1:46their sales process and I was like, I'm
71. 1:48going to market
72. 1:48>> It's a very interesting business.
73. 1:50>> Oh, very interesting.
74. 1:51>> I've seen a lot of those
75. 1:53just this direct to consumer products
76. 1:56though that you see that you get on the
77. 1:57subscription and they just send you
78. 1:59>> Yep.
79. 2:00>> I actually have a whole bunch from Ali.
80. 2:02>> Okay.
81. 2:02>> Believe it or not. From I think that was
82. 2:04an Alpha M product.
83. 2:06>> Alpha M.
84. 2:07>> Yeah.
85. 2:07>> Yeah. Well, I saw their sales process
86. 2:09and was like
87. 2:10I could make this. Like we literally
88. 2:12could just change a handful of things
89. 2:14around here, switch it from one time to
90. 2:15membership, make these packages based on
91. 2:17these price points, have an intake
92. 2:19questionnaire, you know, like do some of
93. 2:20the things that we already know work
94. 2:21over and over and over again. And we 5x
95. 2:23the LTV of the customer. So 5x how much
96. 2:25people were worth to the business. And
97. 2:27so it's like great, well, there's a 5x
98. 2:29and uh
99. 2:31then all I have to do is just double the
100. 2:32locations over the next 5 years. I got
101. 2:33to 10x. Great.
102. 2:34>> And then what do you do once you do
103. 2:35that? Is it just collecting cash or is
104. 2:37it to eventually then sell that
105. 2:38business?
106. 2:39>> Depends on the business.
107. 2:40>> one.
108. 2:40>> Depends on the business. Um
109. 2:42I would say there definitely are like I
110. 2:43used to give it probably like I always
111. 2:44wanted to hold everything forever. But I
112. 2:46think there are times where
113. 2:48it does make where where businesses get
114. 2:50to a point where the next like increment
115. 2:52of growth
116. 2:54um
117. 2:54requires like an order of magnitude in
118. 2:56terms of effort that it's not worth
119. 3:00or we might determine, you know what,
120. 3:02we're we're good cashing out on this
121. 3:03one. Like we might not be the right
122. 3:04partners or like we might not be the
123. 3:06right owners to take it from here to
124. 3:07there.
125. 3:08Um it also just depends on what's on the
126. 3:09horizon. If it's like, you know,
127. 3:10interest rates are super low. I mean, I
128. 3:11I sold I sold literally everything I
129. 3:13owned in 2021 cuz money was free. And so
130. 3:16I was like I sold my house, I sold my
131. 3:17cars, I sold three of my companies, I
132. 3:18sold everything. I was just completely
133. 3:19cash. Um
134. 3:21>> [clears throat]
135. 3:21>> cuz it just it would just seem
136. 3:22ridiculous what people were willing to
137. 3:24pay. So I was like, okay. And so if like
138. 3:25something like that comes along that I
139. 3:26would be considered.
140. 3:27>> If someone wants to If someone wants to
141. 3:28buy it more than I want to own it, then
142. 3:29I always I always entertain offers.
143. 3:31>> You know, in hindsight, it seems like
144. 3:32you made a pretty good deal by selling
145. 3:33everything somewhat at the peak of the
146. 3:35market. I think you I think you cashed
147. 3:36out. The market kept going up a little
148. 3:38bit and then it started Yeah, amazing
149. 3:40time. And then I think you were in
150. 3:41contract to buy a house, weren't you?
151. 3:43>> Yeah.
152. 3:43>> And then you backed out of that.
153. 3:45And also fantastic time.
154. 3:47>> Yeah. So things have worked out pretty
155. 3:48okay um on on the the of that. And I
156. 3:50would not like claim it just So it
157. 3:52wasn't like I think I'm timing the
158. 3:53market. It was just more like
159. 3:56this makes sense like this is a this is
160. 3:58a deal that I will accept. And on the
161. 3:59flip side, when you're buying, you're
162. 4:00like, I don't know if this is a deal I
163. 4:01want to do. And it's just more like
164. 4:02that. Unless you have like an absolute
165. 4:04need, which I would say on the flip
166. 4:05side, like if you need a house, buy a
167. 4:06house. You know what I mean? Like if you
168. 4:07need like whatever. If you need a if you
169. 4:09need an office for your company, like
170. 4:10buy an office cuz you're going to make
171. 4:12more than trying to time the market
172. 4:14perfectly, at least in my opinion.
173. 4:15>> Yeah. Real quick, if you're a business
174. 4:17owner and you're not growing as fast as
175. 4:19you'd like, I'd like to give you a free
176. 4:20gift. So, my team and I put together the
177. 4:23$100 million scaling road map, which is
178. 4:25basically 200 hours of us looking over
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180. 4:28and what stages of growth they went
181. 4:30through and more importantly, where they
182. 4:32got stuck and how they got past it. And
183. 4:34so, we broke it into these 10 stages and
184. 4:36we made this little kind of quiz thing
185. 4:38where if you put in your business
186. 4:38information, it'll tell you where you're
187. 4:40at and the most important part for you,
188. 4:42what to do for each of functions of the
189. 4:43business across product, marketing,
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