Should You Scale Both Businesses at Once? — Transcript

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1. 0:00So, I have two business. One campground
2. 0:04resort.
3. 0:05>> Wait, what? You have two businesses. The
4. 0:07first one's what?
5. 0:09>> It's a campground. Like I went out
6. 0:11cabins on Airbnb and
7. 0:14>> Okay, got it.
8. 0:16Got it.
9. 0:17>> For that, it's about $300,000
10. 0:20and
11. 0:21profit is about 40%.
12. 0:24>> Okay, 120. Got it. Okay.
13. 0:27>> And
14. 0:28I have a also a detailing business.
15. 0:33I I detail cars and on the main season,
16. 0:38I do about 40,000 a month and that
17. 0:44business I've been running for a year
18. 0:46now.
19. 0:47>> Okay, congrats. That's pretty good.
20. 0:49Yeah, how many hours a week does the
21. 0:50Airbnb thing take from you?
22. 0:53>> So, right now zero because I have three
23. 0:56people that is working and running the
24. 0:59place.
25. 0:59>> Okay.
26. 1:00>> Basically, I have no involvement in that
27. 1:03business. That's the reason I cannot
28. 1:06grow that business is because it is very
29. 1:08expensive and I need a lot of capital to
30. 1:10>> You mean you have to buy more of buy
31. 1:12more buildings?
32. 1:13>> Buy more buildings, yes, exactly. I have
33. 1:16no problem in demand but
34. 1:19building.
35. 1:19>> Okay, cool. That's fine. So, to me I'll
36. 1:22reframe this cuz normally just for
37. 1:23everyone who's listening they'll be
38. 1:24like, "Oh, Alex is going to tell him
39. 1:25that he should shut down one of his
40. 1:26businesses."
41. 1:28I don't really see like the Airbnb is
42. 1:29like
43. 1:30right in the middle of like is it
44. 1:31investment versus is it, you know,
45. 1:34active? That's why I asked how many
46. 1:35hours a week you're spending on it. If
47. 1:37you're spending five five hours a week
48. 1:38or less, I'd be like that's fine. So,
49. 1:39basically it's like if you had a job and
50. 1:41then you did Airbnb on the side, I'd be
51. 1:42like fine. So, your job is detailing.
52. 1:45You do Airbnb is what you do with the
53. 1:46money after you get after you take it
54. 1:47out. Okay, great. So, what's the What do
55. 1:50you want to do right now? Do you want to
56. 1:51grow? Like what's what's what's not
57. 1:52happening that you want to have happen?
58. 1:55>> The uh the is I really want to go the
59. 1:57Airbnb business
60. 1:58um and I see a lot of potential in it.
61. 2:01>> You need more money.
62. 2:01>> Um the all my
63. 2:03potential in the Airbnb business. Um
64. 2:06but the thing is it's as I said it's
65. 2:08very expensive and I don't have the
66. 2:10money for it.
67. 2:11>> Yeah.
68. 2:12>> So, I started detailing
69. 2:14>> [laughter]
70. 2:14>> Yeah, I started detailing to
71. 2:17uh make money so that I could buy
72. 2:20>> Yeah.
73. 2:20>> Airbnb properties, right? So, that I
74. 2:22could buy come down and or another
75. 2:24resort so that I could build a
76. 2:27uh
77. 2:27built um cabins and stuff. Um but um
78. 2:32I I after a year of doing Airbnb I I'm
79. 2:35sorry I detailing I found out that it's
80. 2:37very difficult uh
81. 2:40you know, and it a lot it's a very
82. 2:42time-consuming business and um
83. 2:44>> Yeah, welcome to business. Yeah, okay.
84. 2:47>> Yeah, I'm not sure if uh
85. 2:50um it is something that is worth doing
86. 2:53for a very long period of time.
87. 2:55>> What would you do if it's not that?
88. 2:58>> Cuz the like the the best detailer they
89. 3:01do about 2 million a year and that's the
90. 3:03best best detailer in like I'm from
91. 3:05Canada that's just like that's the
92. 3:06>> Yeah, there's no good detailers in
93. 3:07Canada. Totally.
94. 3:10>> Uh so uh like my question would be
95. 3:12should I choose a different vehicle cuz
96. 3:15a different business uh to do or should
97. 3:17I stick to detailing?
98. 3:19>> you've been doing detailing for a year
99. 3:20and you're at 500 grand a year, man.
100. 3:23>> No not 500 cuz it's it's detailing a
101. 3:25seasonal so probably about 250 300,000.
102. 3:28>> And what's profit?
103. 3:30>> Uh so right now cuz I spend a lot of
104. 3:33money on the marketing um
105. 3:35uh cuz you know, it's the first year.
106. 3:37>> Tell me the number.
107. 3:38>> So, probably I'll say about 50 grand a
108. 3:41year.
109. 3:42>> Uh
110. 3:44So, I'll say this, man. Um do I think
111. 3:46it's the wrong business? No, I think
112. 3:48businesses can always be improved like
113. 3:50we could look at like the offer and all
114. 3:52these other things to like try and
115. 3:53improve it. But if you like the Airbnb
116. 3:56thing and you're good at it and I
117. 3:57normally wouldn't say this um but I'm
118. 3:59just this is me reading between the
119. 4:00lines from uh your call. So this is uh
120. 4:04me I think answering the question behind
121. 4:06your question. Which is how can I do
122. 4:08more Airbnb? Right? Does that sound
123. 4:10correct?
124. 4:11>> Yeah.
125. 4:12>> Okay.
126. 4:12>> Yeah.
127. 4:13>> So there's this thing in real estate
128. 4:15called raising money.
129. 4:18And you get investors to buy the real
130. 4:20estate and then you manage it.
131. 4:21And you give them a return.
132. 4:26>> For sure.
133. 4:27>> So I think you should consider doing
134. 4:29that and then make Airbnb your full-time
135. 4:30thing.
136. 4:32It's like you're spending all like I'm
137. 4:33you're spending all your time for
138. 4:34$50,000.
139. 4:36And you're spending almost none of your
140. 4:37time for 120. Right?
141. 4:40>> Yeah. Yeah.
142. 4:41>> Right. So I think you just need to raise
143. 4:42money.
144. 4:45>> Definitely. That makes sense.
145. 4:47>> Yeah.
146. 4:48Just use other people's money to buy the
147. 4:49buildings.
148. 4:50Give them a preferred rate of return.
149. 4:52After that you split a certain
150. 4:53percentage of the profit with them so
151. 4:54that you're super incentivized uh to get
152. 4:56them a good return and they'll feel
153. 4:57safe.
154. 4:58So it's like you know, you say
155. 4:59everything after you know, 6% 8% 10%
156. 5:02whatever it is um per year we split you
157. 5:05know, 80/20 my way after that or
158. 5:07whatever, right? And so the blended
159. 5:09return is going to be you know, my guess
160. 5:11is 15 or whatever.
161. 5:15>> Yeah, that makes makes sense.
162. 5:16Interesting.
163. 5:18>> Cool.
164. 5:19>> Yeah.
165. 5:19>> Cuz the um Airbnb I think I am pretty
166. 5:22good at it and
167. 5:23>> Yeah. Obviously, you spend no time doing
168. 5:25it and you're making two times the two
169. 5:27and a half times the money of your other
170. 5:28thing.
171. 5:29I think you're decent at it.
172. 5:31So yeah, I think you just double down on
173. 5:32the thing that you're good at. So we did
174. 5:34end up eliminating one of the
175. 5:35businesses. Who Who'd have thunk?
176. 5:39>> Yeah.
177. 5:39>> You're like I've got this thing that I
178. 5:40don't like that makes me no money that
179. 5:42takes all my time and I've got this
180. 5:43thing that I do like that I'm pretty
181. 5:44good at that takes takes none of my
182. 5:46time.
183. 5:46Cool. So then let's do more of that and
184. 5:48you're like I don't know how to do that
185. 5:49so I have to make the money to do that.
186. 5:50It's like or you can use other people's
187. 5:51money.
188. 5:55>> Interesting, yeah.
189. 5:57Definitely.
190. 5:58>> This was a good chat.
191. 5:59>> Thank you.
192. 6:02Thank you, Alex.
193. 6:03>> You bet, man.
194. 6:04>> [laughter]
195. 6:04>> Happy to help.
196. 6:07Congrats, bro.
197. 6:08>> Thank you. Thank you.
198. 6:09>> Today is the first day of the rest of
199. 6:11your life.
200. 6:13>> [laughter]
201. 6:14>> Thank you, Alex.
202. 6:15>> You bet, man.
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