Why $15M at 30% Profit Might Beat $40M — Transcript

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1. 0:00And I sell plumbing and air conditioning
2. 0:01to residential customers and I would
3. 0:04like to we're currently doing around
4. 0:06we'll pace it for 15 million this year
5. 0:08and I'd like to be at 40 million.
6. 0:10And what is stopping me is the chaos. We
7. 0:14I recently hired two new leaders from
8. 0:15outside the industry and we went from 4
9. 0:17million to 8 million 11 million pace it
10. 0:19for 15 now.
11. 0:20>> Awesome.
12. 0:21>> And the the chaos I'm worried about the
13. 0:24over expansion or just just the
14. 0:27because we're making a lot of errors our
15. 0:28our profits are staying level and I
16. 0:30expected them to go up but we're not
17. 0:32we're growing top line and we're just
18. 0:33flat. We're just chewing up a lot of
19. 0:36>> [snorts]
20. 0:37>> a lot of mistakes.
21. 0:38>> Yeah. So what is what it basically why
22. 0:41the aggressive growth pace?
23. 0:46>> It's actually I'm kind of bent more
24. 0:47towards perfection and and going slower.
25. 0:50The the guys that I hired are from
26. 0:52outside the industry. They're they're
27. 0:54just top line revenue driven and it's
28. 0:56almost like
29. 0:57they they we just keep driving it and
30. 0:59it's working and I'm making more
31. 1:01absolute dollars than than I could have
32. 1:02imagined when I first hired him so it's
33. 1:05a good thing but I'm I'm wondering if
34. 1:06they'll be
35. 1:07>> or I mean cuz you're you're netting too,
36. 1:09right? You're at 13%?
37. 1:11>> No. Yeah, we're we're netting about year
38. 1:13to date 14% right now. We landed last
39. 1:15year at 15.7
40. 1:17and and we're like 16 something whenever
41. 1:20I at the 4 million mark. So we're
42. 1:21staying flat net but the gross dollars
43. 1:23coming to me. I'm I'm the single owner
44. 1:25everything's paid off. We're not
45. 1:27acquiring debt to to grow.
46. 1:29So I'm stacking up money but I'm just
47. 1:31wondering if we're going to make a
48. 1:32mistake that that that rams it
49. 1:34backwards.
50. 1:35>> What are those guys compensated on?
51. 1:37>> Net.
52. 1:39>> And they're driving top line?
53. 1:41>> It's just how they're built, I guess.
54. 1:42They they they're driving top line and
55. 1:44and I one the the guy that's the biggest
56. 1:46driver he really uh
57. 1:48I just he's just in love with big
58. 1:49numbers. He's come from the corporate
59. 1:51world where they did hundreds of
60. 1:52millions of dollars and
61. 1:54and that's what he's uh
62. 1:56about.
63. 1:57>> Yeah.
64. 1:57So, your issue one is data, I'll bet.
65. 2:01Um unless you have real-time gross
66. 2:03operating margins on each of your
67. 2:05product lines.
68. 2:06Um because by doing that, you'll be able
69. 2:09to drive EBITDA through the roof. And in
70. 2:11your business, being tax efficient is
71. 2:13actually
72. 2:14um
73. 2:16super achievable by actually just
74. 2:18playing with Who's your Do you have a
75. 2:20good Do you have a good um CFO?
76. 2:22>> I don't know. I don't think we do.
77. 2:24>> Okay.
78. 2:25>> I would be more more of that function.
79. 2:26My background's kind of accounting as
80. 2:27well. So, I'm kind of a little bit lent
81. 2:29that way.
82. 2:30>> Okay. Are you Do you want to exit it or
83. 2:32what do you want to do?
84. 2:33>> I just want to grow it. I want a good
85. 2:34running business that's just a cash cow
86. 2:36and kind of a lifestyle business. That's
87. 2:38what I want.
88. 2:39>> Okay.
89. 2:40Um well,
90. 2:42what if you said, "Our goal this year is
91. 2:44to not increase top line at all
92. 2:48and to triple bottom line?"
93. 2:50>> Yeah, I like that.
94. 2:51>> I feel like Yeah, that's chill.
95. 2:54>> Yeah. No, I like [laughter] that. That
96. 2:55That That would That would be perfectly
97. 2:56happy with 15 million and and run 30%
98. 2:58net.
99. 2:59>> Yeah. Yeah, cuz I mean, if you're at 13,
100. 3:0114% or um
101. 3:03whichever one it is.
102. 3:04Um
103. 3:05if if you're around there,
104. 3:07I would for sure like you for sure I'd
105. 3:10be targeting plus 30
106. 3:11minimum. Um I I don't pay much attention
107. 3:15to industry averages mostly because like
108. 3:17American averages is like fat,
109. 3:18overweight, and divorced. So, like why
110. 3:19would I care about industry averages?
111. 3:21Um So, I I kind of I kind of take the
112. 3:23same position with with most service
113. 3:25businesses. Um I'm going to bet right
114. 3:27now that you probably have
115. 3:30some sales motion that can be improved
116. 3:32and probably some pricing that can get
117. 3:34optimized that would improve cash flow.
118. 3:37Um
119. 3:37and when you expand that quickly, um
120. 3:40having
121. 3:41good enough talent So, it's basically
122. 3:43the sequence goes like this. It's like,
123. 3:44"Okay, we have to
124. 3:46um look at the sales motion so that we
125. 3:48can fix the pricing and packaging of
126. 3:50each of the services so that we can
127. 3:52generate sufficient cash flow, so that
128. 3:54we can get the talent that we need, so
129. 3:56we can shore up the infrastructure.
130. 3:58And so, that would probably be the
131. 3:59sequence that I would do it in. And
132. 4:01then, I would set the year's goal like,
133. 4:03here's our four-part plan. This is what
134. 4:04we're doing for next year, and this is
135. 4:06how we're going to go from, you know,
136. 4:07whatever, two and change or three and
137. 4:08change, whatever it is, to, you know,
138. 4:10six
139. 4:11uh in EBITDA.
140. 4:14Fair enough.
141. 4:16If you like this video and you're a
142. 4:17business owner who wants to break
143. 4:18through your current revenue ceiling, I
144. 4:20distilled every lesson from scaling 10
145. 4:21businesses past 10 million and three
146. 4:23businesses past 100 million into a
147. 4:25completely free scaling roadmap that
148. 4:27I've used to go from zero to one, zero
149. 4:28to 10, and zero to 100 plus. And so, you
150. 4:30can click here and you can check it out.
151. 4:32Again, absolutely free, and since you're
152. 4:33a business owner, I appreciate you and
153. 4:35enjoy.