The Business Niche Everyone Skips Runs Itself — Transcript

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1. 0:00Zack, we've got 5 minutes on Hermosi
2. 0:01Hotline and I want to help you with the
3. 0:04business. So, the timer has begun.
4. 0:06>> my call.
5. 0:07>> You bet, dude.
6. 0:09The timer has begun. Okay, so talk to
7. 0:10me. What's uh yeah, what are we looking
8. 0:13at?
9. 0:13>> Okay. So, I'm actually in a client
10. 0:16meeting. I'm stepping out right now.
11. 0:17>> It's only 5 minutes. You can tell him
12. 0:18that. [laughter]
13. 0:19>> Perfect.
14. 0:20>> Okay.
15. 0:21>> we own a local architecture firm in
16. 0:23Minnesota.
17. 0:24>> Got it.
18. 0:25>> We niche down unintentionally, but it's
19. 0:27worked to our favor.
20. 0:28>> Fine.
21. 0:28>> Uh we only do assisted living facilities
22. 0:31that are converting.
23. 0:32So, it's people that are taking a single
24. 0:34family home with five or less bedrooms
25. 0:37and converting it to an assisted living
26. 0:38facility.
27. 0:40They need to get licensed architecture
28. 0:42plans from the state or for the state.
29. 0:45>> Uh-huh.
30. 0:45>> So, that's where we came in.
31. 0:46>> Uh-huh.
32. 0:47>> Our problem is
33. 0:49>> Deal with that.
34. 0:50>> everyone's really cheap. Well, we
35. 0:52actually we do 80 of those just off of
36. 0:54referrals every year.
37. 0:55>> Okay.
38. 0:56>> So, it's pretty solid where it just
39. 0:57sustains itself by our service.
40. 0:59>> Can I can I make a guess at what you
41. 1:00need to do? Cuz I pattern recognition.
42. 1:03Like I promise you. Okay, so you're in a
43. 1:05you're in a space that it's it's super
44. 1:06price driven, right? Cuz you've got it's
45. 1:08construction they're looking at cost,
46. 1:09blah blah blah blah, right?
47. 1:10>> Yep.
48. 1:11>> Okay, you have three vectors of winning.
49. 1:13You have to pick one.
50. 1:14Ideally, you can have more than one, but
51. 1:16one is what I like to lead with. So, you
52. 1:17either got speed, you've got risk, or
53. 1:20you've got ease, right? And so, in your
54. 1:22business, time is money. If you can do
55. 1:25things faster, right? There's also a
56. 1:26risk component of like what kind of cost
57. 1:28you're going to come down the road if
58. 1:29you do it the wrong way or do it
59. 1:30differently. And then, it's like is
60. 1:32there a way that we can throw some sort
61. 1:33of verbage or guarantees
62. 1:36uh or some sort of like clawbacks that a
63. 1:39customer can get where we say, "Listen,
64. 1:41we'll put our skin in the game to make
65. 1:42sure that we're you know, we'll be on
66. 1:44time and on budget." Um
67. 1:46so that you can build your thing faster
68. 1:48so you can get faster returns on
69. 1:49capital. Because I'm assuming these like
70. 1:51you quote sell to an investor or you
71. 1:54sell to a GC?
72. 1:56>> So, they're all the they're individual
73. 1:58business owners. That's the hard part is
74. 1:59we're going to small business owners.
75. 2:01It's likely their first business, right?
76. 2:02So, they're cheap, too.
77. 2:04>> Okay. I mean, who the best Who are the
78. 2:06best business owners that you deal with?
79. 2:09>> People that don't question the price,
80. 2:10that understand the process.
81. 2:12>> Yeah, my favorite, right?
82. 2:12>> Um but
83. 2:13yeah, exactly.
84. 2:14>> No, but it's not
85. 2:15>> It's a process.
86. 2:16>> Okay. So, then what stops us from
87. 2:17getting only those people or focusing
88. 2:19almost exclusively like can we get Deal
89. 2:21Flow that has higher percentage of those
90. 2:24people so we can command the prices we
91. 2:26want?
92. 2:27>> Oh, I would love that. And part of it is
93. 2:29I've tried to expand so that we give one
94. 2:31faster speed like you mentioned. So, we
95. 2:33get our plans back to you within a week.
96. 2:35>> Yeah.
97. 2:35>> So, that's faster than most everyone.
98. 2:37>> Yeah.
99. 2:37>> And then we on the back end, no one
100. 2:39understands the process. So, I've
101. 2:40learned it really well. So, that's where
102. 2:42I come in and I can give them that
103. 2:43guidance versus just someone that's
104. 2:45giving them a commodity of just a single
105. 2:47plan.
106. 2:47>> Yeah.
107. 2:48>> So, that's where we've been able to get
108. 2:49our price up some, but I need to get it
109. 2:50up higher.
110. 2:52>> So,
111. 2:52>> But I'm wondering if
112. 2:53>> stats, dude.
113. 2:54I'm sorry right now. You need stats. So,
114. 2:56this is a logical sale, right? This is
115. 2:58not an emotional, you know, thing for
116. 3:00most these guys, I would imagine. Right?
117. 3:02This is a pure like dollars and cents
118. 3:03thing. And so, you need to line up and
119. 3:06come in with that frame, which is like,
120. 3:07"Listen, let's be clear here. You and I
121. 3:09are both business people. You need to
122. 3:10make this make sense, you know, make
123. 3:11sense from a dollars and cents
124. 3:12standpoint." They're going to say yes.
125. 3:13It's like, "Cool. So, there's there's a
126. 3:15concept called, you know, save a dollar
127. 3:16a day, cost you four tomorrow or pay two
128. 3:19today and it saves you four tomorrow.
129. 3:21Which one do you like would you rather
130. 3:22pay two and save four or pay one and
131. 3:24have it cost you four?" And they're
132. 3:26like, "Well, obviously the save one."
133. 3:27It's like, "Right. I would like to
134. 3:28establish that cuz if someone says, 'No,
135. 3:29I'd rather just save as little as
136. 3:30possible,' then we all know that's not
137. 3:32going to work for either of us, right?
138. 3:33Okay, cool." So, then it's like this is
139. 3:35where the stats come in. Like I'd look
140. 3:36at Statista, I'd look at I'd ask, you
141. 3:38know, GPT. I'd be like, "Hey, find me
142. 3:39all the stats of average unforeseen
143. 3:41costs that can occur." And so, then now
144. 3:44we took the frame of the fact that it's
145. 3:46just going to be a a a logical sale.
146. 3:48We're all dollars and cents here. But in
147. 3:49the reality is now we go fear,
148. 3:51uncertainty, and doubt, right? So now
149. 3:52it's like well these are the top four
150. 3:54things that occur. This occurs in 22% of
151. 3:57circumstances, this occurs in 15, this
152. 3:59occurs in 38, right? And these are all
153. 4:00the different things that can go wrong,
154. 4:02right? And so what we've done is that we
155. 4:04try to minimize this thing, which is
156. 4:06going to cost you way more money than
157. 4:07what I cost.
158. 4:09Okay. And so now we're anchoring or
159. 4:11anchoring around all these way more
160. 4:12expensive things.
161. 4:15And then basically that's how we can
162. 4:16basically nudge our way into a
163. 4:17completely different price cuz we're
164. 4:18we've we've we've changed the context
165. 4:20around the conversation.
166. 4:22>> Okay.
167. 4:23Would you think about any way to get
168. 4:24recurring revenue or would you just
169. 4:26double down on this and try to get as
170. 4:28many people as possible?
171. 4:29>> So the only way that I would see
172. 4:30recurring revenue in your specific
173. 4:31business is going to be people who do
174. 4:33regular business, more so than like
175. 4:35subscription anything like that. It's
176. 4:37more like who are the nodes of
177. 4:40referrals? Those are my quote
178. 4:43reoccurring more than recurring
179. 4:44business. Like Coca-Cola, super amazing
180. 4:46business, not recurring but reoccurring.
181. 4:49And so I put your hat on. So what you
182. 4:51need to do is chunk up in terms of how
183. 4:53you think through your business. I'll
184. 4:54give you an example. So when I had Alan,
185. 4:56which was a software company, we had,
186. 4:58you know, the first thing we did is we
187. 4:59went to market for small business
188. 5:00owners, right? And that sucked because
189. 5:03they'd be like, "Oh, this is great. It
190. 5:04works our leads but we don't have any
191. 5:05leads." And I was like, "Oh, darn. That
192. 5:06I didn't think through that." And so
193. 5:08then all of a sudden the people who did
194. 5:09really well were the ones who already
195. 5:10had agencies that were working with them
196. 5:11generating leads and then our thing just
197. 5:13did the lead flow. So then all of a
198. 5:14sudden I was like, "Okay, well I'm going
199. 5:15to go after agency owners and say, 'Hey,
200. 5:16we can improve the results of your your
201. 5:18services and decrease churn and
202. 5:20increase, you know, like basically make
203. 5:21more money, etc. using our software.'"
204. 5:23And so all of a sudden what happened is
205. 5:25instead of having, you know, trying to
206. 5:26go onezie-twozie after business owners,
207. 5:28we just went after agency owners and I
208. 5:30knew that let's say a chiropractor
209. 5:31agency comes in and he only does
210. 5:32chiropractors, he comes in and he pays,
211. 5:35you know, he onboards his 50 clients at
212. 5:37a time and I was like, "Oh, that was
213. 5:38great, right?" And for you it's
214. 5:39like somebody might have a portfolio,
215. 5:41but he onboards 50 clients, but then
216. 5:42after that I could rely on the fact that
217. 5:4410 of his people would churn every month
218. 5:45and then he would sign 10 more up every
219. 5:47month.
220. 5:48Right? And so he So our churn at the
221. 5:50agency level was almost zero. Our churn
222. 5:53at the SMB level was whatever the churn
223. 5:55of the agency was, which is not really
224. 5:57our issue.
225. 5:58And so when we redefined our business as
226. 6:01"Oh, we're actually in the agency
227. 6:02servicing business, not in the SMB
228. 6:04servicing business." That's when it
229. 6:06really started stacking. And so
230. 6:07translating this back to you, you said
231. 6:09you've got these referrals that are
232. 6:10coming in, right?
233. 6:12>> Yeah, we typically get three to four
234. 6:14referrals every week that we'll then try
235. 6:16to book.
236. 6:16>> Amazing. And so then I'll bet you you
237. 6:18have a list, or hopefully you do, of all
238. 6:19the top referrers that refer you
239. 6:21business, right?
240. 6:22>> 100%.
241. 6:23>> Right. And so then the whole the whole
242. 6:25paradigm around this for me is how do I
243. 6:29How do I partner with the referral
244. 6:31partners so that they can frame the
245. 6:32conversation with their introduction to
246. 6:35me in the way that maximizes the
247. 6:36likelihood of a close and the framing
248. 6:38around pricing uh that I want.
249. 6:42>> Okay.
250. 6:44>> That's how I approach this. And so your
251. 6:45business, if I'm thinking through this,
252. 6:47right? Like if I'm you, my business is
253. 6:49I'm really in those centers of
254. 6:50influence, right? Those affiliate
255. 6:52partners, those referral partners that
256. 6:53you have, those are the quote customers.
257. 6:56And so I want to see like what's my
258. 6:58sales guy for those guys to get them to
259. 7:01consistently, you know, bring me more
260. 7:02in, and how can I acquire more of them?
261. 7:04Because each one of them is a node that
262. 7:06over the years, if I go from having a
263. 7:08base of 20 guys who refer me business to
264. 7:10200, that becomes reoccurring by nature
265. 7:13rather than recurring.
266. 7:15But still stable.
267. 7:16>> on a referral bonus for those people?
268. 7:18>> Are you allowed to do kickbacks legally?
269. 7:21>> I think so.
270. 7:22>> Okay, great. Well, if you're allowed to
271. 7:23do
272. 7:23>> I'll just double check.
273. 7:24>> Yeah, yeah, if you're able to do
274. 7:25kickbacks legally,
275. 7:27um
276. 7:28there's there's three different
277. 7:29affiliate structures that I like like
278. 7:31you'll immediately know I'll say all
279. 7:32three of them and then you'll you'll
280. 7:33know which one's right for you. So
281. 7:35version one is that you peel off some
282. 7:36element of your particular service, a
283. 7:39very small element, and then you allow
284. 7:41them to sell it
285. 7:42for whatever it whatever they want, they
286. 7:44keep all the money, and then you deliver
287. 7:45on that as step one of a multi-step
288. 7:47process.
289. 7:49That's V1. So, an example of that is,
290. 7:51"Hey, uh new business owner gets an LLC
291. 7:54set up. We'll do the LLC set up. You can
292. 7:55charge whatever you want for that."
293. 7:56Let's say they sell for $300. We do the
294. 7:58LLC set up, but then we upsell uh tax
295. 8:01and bookkeeping, right? From there. But,
296. 8:03they keep 100% of the upfront. That's
297. 8:04option one. Option two is that they just
298. 8:06straight up sell your thing, right? Uh
299. 8:09and then they get to keep whatever
300. 8:11percentage, right? They give you give
301. 8:12them 10% or 20% or whatever number makes
302. 8:14sense for you, um for them to actually
303. 8:16just legit, you know, cradle to grave,
304. 8:18all they got to do is just acquire the
305. 8:19business and then just send it to you,
306. 8:20and then you deliver. That's the second,
307. 8:22right? And then the third is more of a
308. 8:24um
309. 8:25more of a lead gen version of this,
310. 8:27right? Which is kind of what you're
311. 8:28doing right now, it sounds like. Um and
312. 8:29then you can quote give them kickbacks
313. 8:31later, and that's and then they
314. 8:32basically factor it in
315. 8:33uh to how much they're Every three
316. 8:34referrals I send, I get, you know, one
317. 8:36sale or whatever.
318. 8:38>> A lot of ours come from consultants or
319. 8:40on the actual application.
320. 8:42>> Dude, 100%. Then consult like you need
321. 8:44to basically build out like Think of
322. 8:45this like you need a customer journey
323. 8:47for the consultants.
324. 8:49>> Okay.
325. 8:49>> Like and then that's Yes, exactly. And
326. 8:52then they're the ones who are going to
327. 8:53consistently be sending you business
328. 8:54month over month over month.
329. 8:56>> Okay.
330. 8:57>> Got it?
331. 8:58>> Yeah, thank you so much.
332. 8:59>> Dude, you bet. I know you got you got
333. 9:00you got I went over five five minutes,
334. 9:01so I'm I'm so sorry. Uh but hopefully
335. 9:03you're good with that.
336. 9:04>> [laughter]
337. 9:05>> Thank you so much. I appreciate it.
338. 9:06>> Dude, you bet. Thanks for doing anything
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