"Why Can't I Get Anyone to Buy From Me?" — Transcript

Full transcript

1. 0:00I've always been told to niche down, but
2. 0:01I'm the person that couldn't focus. I
3. 0:03Uh
4. 0:04I I don't want to put all eggs in one
5. 0:05basket, so I'm doing all all all the
6. 0:07different
7. 0:08contrary to your conditional advice.
8. 0:10>> Yeah.
9. 0:11>> If you can't put all the eggs in one
10. 0:12basket, then you drop all the baskets.
11. 0:14>> Yeah, so Dale Carnegie's advice is put
12. 0:16all your eggs in a basket and then watch
13. 0:17that basket.
14. 0:20So, you I mean, you're in the swamp.
15. 0:22You're 1 to 3 million. It's a very
16. 0:23classic spot. And you need to niche
17. 0:26down. I actually covered this in the
18. 0:27scaling road map. Um you need to niche
19. 0:29down. Because you're not getting any
20. 0:31efficiencies. You're You're basically
21. 0:32having to re-derive solutions for every
22. 0:33single person, right?
23. 0:35>> Yeah.
24. 0:36>> Especially with
25. 0:38And I'm going to bet you right now that
26. 0:39operationally, and this isn't me I don't
27. 0:41I'm not throwing shade, all right? I
28. 0:42just want to be clear. I get it. Things
29. 0:44are kind of tough right now. Um
30. 0:46I think you probably need more
31. 0:47operational discipline.
32. 0:49>> Yes. Yeah.
33. 0:50>> Right? And so, like I'll say this, do
34. 0:53you have do you have more demand than
35. 0:55you can handle?
36. 0:57Or do you have a lot of excess capacity
37. 0:59right now?
38. 1:01>> We probably have
39. 1:0330% more capacity.
40. 1:04>> All right, that's not good. So, that
41. 1:07because like let's say that we actually
42. 1:08maxed you out, you're not going to get
43. 1:10like your incremental margin's going to
44. 1:12be tiny. Even if you got the extra 30%,
45. 1:14you're still going to be running like
46. 1:1510% margins. It's going to be nothing.
47. 1:18>> Mhm.
48. 1:19>> Right? So, we do have a little bit of a
49. 1:21model and pricing issue.
50. 1:23Number one, go ahead Leila, I know
51. 1:24you're about to
52. 1:24>> Yeah, and I'm just curious like of the
53. 1:26services rendered, what would you say
54. 1:28take up the most amount of like what
55. 1:30contribute to the most amount of
56. 1:31revenue? Personal injury, estate
57. 1:34planning?
58. 1:36>> Sure, right now it's family law that
59. 1:38contributes to about 80% of our revenue.
60. 1:40>> Okay.
61. 1:41>> Um billed hourly. The personal injury
62. 1:42side, we just spoke that out 3 months
63. 1:44ago, and I've signed up 20 clients since
64. 1:47then. So, just a small investment cuz
65. 1:49with personal injury, the the runway is
66. 1:51typically 6 to 9 months before revenue.
67. 1:54>> Yeah.
68. 1:56>> [sighs]
69. 1:59>> Dude, I think you need to like let me
70. 2:00let me say it this way.
71. 2:02If I'm going to go get surgery, right?
72. 2:06I'm not going to go to a generalist.
73. 2:08I'm going to go to a knee surgeon.
74. 2:10Or I'm going to go to a nose surgeon. Or
75. 2:12I'm going to go to a back surgeon.
76. 2:14If I'm going to get
77. 2:15legal help for my estate, I'm going to
78. 2:18go to somebody who specializes in
79. 2:18estate. If I'm going to go to a personal
80. 2:20injury I have a personal injury, I'm
81. 2:21going to go to a personal injury
82. 2:22specialist.
83. 2:23>> And and the people who will go to a
84. 2:25generalist are not the people who want
85. 2:27to pay a lot.
86. 2:28>> Mhm, cuz they weren't smart enough to
87. 2:29figure that out.
88. 2:32>> Okay.
89. 2:33>> So which of these different services do
90. 2:37you run the highest gross margins on?
91. 2:43>> That's something that I'll need to work
92. 2:44on. The part of it is that I need
93. 2:46probably need to get a CFO on board or
94. 2:48something.
95. 2:48>> No, no, no.
96. 2:49>> Let's ask this.
97. 2:49>> No, yeah.
98. 2:50>> How many attorneys do you have that
99. 2:52focus on family law?
100. 2:54>> Four.
101. 2:55>> And then how many and you have seven
102. 2:56attorneys total?
103. 2:58>> Yes.
104. 2:59>> And then of your VAs that you have,
105. 3:02uh where what are they doing? Cuz you
106. 3:03said you have 23 people?
107. 3:06>> Yeah, so we have three on the sales team
108. 3:08and taking people
109. 3:10um and then some support staff, uh
110. 3:12assistant work, paralegal.
111. 3:15>> Okay. What would you say their split is?
112. 3:17About the same 50% focus on family law?
113. 3:22>> Yeah, I would I would say that, yeah.
114. 3:25>> Okay.
115. 3:26So half of the firm essentially is
116. 3:28family law.
117. 3:29>> Just put the mic next to it so they can
118. 3:30be they can hear it.
119. 3:32Uh okay. Um so I'll say this, man. I I
120. 3:35do think you're probably mispriced right
121. 3:36off the bat. Like you need like if
122. 3:38you're a service-based business owner,
123. 3:39which is exactly what you are, you need
124. 3:41to know your gross margins like the back
125. 3:42of your hand.
126. 3:44And in the business that you're in, I'd
127. 3:45be like I uh
128. 3:47this might this will shock you, but I
129. 3:49like to have at least 80% gross margins
130. 3:51in any service business that I run.
131. 3:53>> Wow.
132. 3:54>> Yes.
133. 3:55>> [snorts]
134. 3:58>> I need to figure out uh yeah, I'll need
135. 4:00to figure this out.
136. 4:00>> Now, part of Yeah, so you have like you
137. 4:02have a packaging issue as part of this.
138. 4:04Now, one of the other issues is that you
139. 4:05can choose to not bill hourly and you
140. 4:07can just bill by solution. That is one
141. 4:08way of doing things.
142. 4:10Which aligns you with the customer and
143. 4:12also allows you to drive down your costs
144. 4:14as much as possible. It aligns
145. 4:15everyone's outcomes and especially with
146. 4:17AI in your firm, like I'm still
147. 4:19surprised you have so many attorneys.
148. 4:21Like if you're looking for the future,
149. 4:22man, like AI is one of the like legal is
150. 4:25one of the the biggest, you know, um
151. 4:28businesses that's going it is actively
152. 4:30getting disrupted.
153. 4:31>> Wow.
154. 4:34>> So,
155. 4:35we need to we need to niche down number
156. 4:36one. Number two, we need to pick the
157. 4:38thing that has the highest potential for
158. 4:39gross margins. Number three, I'd want to
159. 4:41package this in such a way that I'm
160. 4:43decoupled from hourly rates so that my
161. 4:46team isn't like, "Wow, they're making
162. 4:47this." It's just like it's it's
163. 4:48independent. We're operating these
164. 4:49things independently. And then, I would
165. 4:51have to make sure hardcore that I am
166. 4:53auditing the time of my
167. 4:56uh you know, the subordinates, the
168. 4:57people who are actually running the
169. 4:58legal side so that I can make sure that
170. 5:00my revenue per head count is going up.
171. 5:03Like that's probably your North Star.
172. 5:06>> I have one question.
173. 5:06>> Yeah.
174. 5:07>> I have one question for you. You said
175. 5:08that you had to build the business to
176. 5:09stay in the United States. Do you come
177. 5:11from a law background or a business
178. 5:13owner background or neither?
179. 5:15>> Neither. Neither. I just graduated law
180. 5:17school like 3 years ago and
181. 5:19um
182. 5:20I kind of had to start my own business
183. 5:21on with a with a visa
184. 5:23to stay in the US.
185. 5:24>> Got it. So, you didn't before that you
186. 5:26didn't Did you study specifically family
187. 5:27law or personal injury or just general
188. 5:29law?
189. 5:31>> No, just just law school, just general
190. 5:32law and myself I I practice immigration
191. 5:35myself.
192. 5:36Um so, that's the irony of it. Well, we
193. 5:37do we do do flat fees for immigration.
194. 5:40Um
195. 5:41>> Is it profitable?
196. 5:42>> Yeah. Yeah, it's it's profitable. Um and
197. 5:45we're trying to grow that out. But,
198. 5:46mostly, doing Facebook ads strategy
199. 5:48right now with immigration.
200. 5:50>> Thank you. $100 million man, let's go.
201. 5:53Full attack mode.
202. 5:55>> I think
203. 5:56>> you.
204. 5:56>> Like, if we zoom out and we're like,
205. 5:57what created this problem?
206. 6:00Um
207. 6:01I think part of it is that when you got
208. 6:04into it, you hadn't had a business
209. 6:05before and you hadn't practiced that
210. 6:07that specific law before.
211. 6:09Right? And so, you don't know what's
212. 6:11normal, what's not, how many attorneys
213. 6:12can handle how much. So, this is
214. 6:14completely normal. I just want to like
215. 6:16put that out there. Like, when we had
216. 6:17our first business, we over-hired and
217. 6:19overshot by a lot and it was painful to
218. 6:22fix that because essentially, we didn't
219. 6:23know. We're like, I don't know how many
220. 6:25tickets can a support rep take? How many
221. 6:27like, how long does it take one staff
222. 6:28accountant to do the books? How many
223. 6:30calls can a sales rep take? Like, I
224. 6:31don't know. I've not built this before.
225. 6:33And so, I think that's really normal and
226. 6:35especially if you haven't done those
227. 6:36things yourself, you don't have your
228. 6:38personal experience to call upon. And
229. 6:40so, it makes sense that this occurred.
230. 6:42Um and I think that for you, in order to
231. 6:44get out of the situation, we have to
232. 6:45solve the original problem, which is
233. 6:47understanding that we have to we kind of
234. 6:49have to go backwards from that, right?
235. 6:52>> Right. Right.
236. 6:54>> So, I think just in general, putting it
237. 6:56out there, it's normal. So, for everyone
238. 6:58watching, like, very normal for this to
239. 7:00happen. We talked about this yesterday
240. 7:01on the live stream as well, which is
241. 7:03like,
242. 7:04there's so many times in business where
243. 7:05you start something and then you get
244. 7:07into this situation and then it feels
245. 7:08like, I want to double down on this. So,
246. 7:11it's like, no, I've already invested in
247. 7:13having personal injury, in having the
248. 7:15family law, and having the immigration.
249. 7:16And so, the worst thing that you can do
250. 7:18when you make a mistake or a misstep is
251. 7:21to double down on it. We don't want to
252. 7:22double down on mistakes or on sunk
253. 7:24costs. We instead want to pull out of
254. 7:26it. And so, I think this is one of those
255. 7:27situations where
256. 7:29the instinct is always going to be I
257. 7:30want to double down because you're like,
258. 7:31crap, that sounds like a lot of work to
259. 7:33undo it. But, I think like, you are 12
260. 7:35months away from a much more profitable,
261. 7:37less of a headache business.
262. 7:39>> And there's probably one one two
263. 7:40attorneys that you could probably let go
264. 7:41right now. And I'll bet you the other
265. 7:42ones if with a little bit of AI and a
266. 7:44little bit of training could probably
267. 7:45absorb that workload. I would also
268. 7:47strongly question cuz you haven't
269. 7:49quantified anything. Like you made an
270. 7:50estimate that you could have an increase
271. 7:51of 30% in utilization before you'd hit
272. 7:53capacity. I would bet, and this is not
273. 7:55me, you know, doing this as a slight,
274. 7:57just cuz it's your first run, you
275. 7:58probably have two to three times the
276. 7:59capacity with that existing team. You
277. 8:01just don't know how to You don't know
278. 8:02how to utilize it, which is why the
279. 8:03margins are what they are.
280. 8:05>> Yeah, check. Yeah, so I need to do more
281. 8:07homework then. I'm I'm glad
282. 8:09Yeah, I'll need to a lot a lot to do
283. 8:12before trying to trying to reach my
284. 8:13ultimate goal. Thank you.
285. 8:15>> No, you bet, man. Thank you, dude. And
286. 8:17good luck. Just know this, man.
287. 8:19It Like this is the ignorance debt, man.
288. 8:21Like this is like it's painful, but when
289. 8:23you look back in 24 months, you're like,
290. 8:25"Oh my god, I can't believe I didn't
291. 8:26even know that. I didn't quantify Yeah,
292. 8:27I didn't quantify utilization. We
293. 8:29weren't even tracking their hours. Like
294. 8:30we didn't have them allocated and we
295. 8:32didn't have all these services
296. 8:32templatized, so we get immediately two
297. 8:34or three X the the throughput per
298. 8:35attorney." Like there's all these
299. 8:37things, right? And you just aren't doing
300. 8:38it yet, and so I would encourage you to
301. 8:40do this. Do not keep trying to grow your
302. 8:43top line. I would want you to focus
303. 8:45entirely on growing your bottom line.
304. 8:47How do I increase the margin from seven
305. 8:49to 40?
306. 8:51>> Okay.
307. 8:51>> If you don't have enough profit, you
308. 8:52can't hire the best attorneys. And if
309. 8:54you can't hire the best attorneys, you
310. 8:55don't have high-paying clients. If you
311. 8:56don't have high-paying clients, you
312. 8:57don't have good margins. So it's just a
313. 8:58round and around circle, chicken or the
314. 9:00egg problem.
315. 9:00>> Vicious cycle or virtuous cycle. So you
316. 9:02just need to You need to stop the buck
317. 9:04stops now, and then you need to flip how
318. 9:06you're thinking through the business.
319. 9:08From unit economics up.
320. 9:10>> Yeah, yeah, you're right. I think I've
321. 9:11been just been That was so great. I I've
322. 9:13been just focused on the top line
323. 9:15instead of like looking at the bottom
324. 9:16line.
325. 9:16>> It's kind of like vanity metrics, you
326. 9:18know what I mean? People like, "Oh, look
327. 9:19at how many followers I have." And but
328. 9:21then their file followers won't buy
329. 9:22anything that they have, right? It's the
330. 9:23same with revenue. It's like vanity
331. 9:25metrics. It's like Instead, if you were
332. 9:27at the same revenue a year from now, but
333. 9:28you had double the profit margin, would
334. 9:30you be satisfied?
335. 9:33>> Mhm.
336. 9:34>> Cool.
337. 9:35Rock and roll, man. Appreciate you.
338. 9:36>> Thanks. Thank you.
339. 9:37>> Thank you for donating books, man.
340. 9:38Appreciate you.
341. 9:39>> Yeah.