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"Why Does Everything Break When We Grow?" (1-Hour Compilation) — Transcript

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0:00So, uh, we met back in, uh, August and
0:02we had a conversation. At that point, I
0:04was at 20K. This month, I'm going to be
0:06doing 71K.
0:08Um,
0:09>> a nice a nice a nice three and a halfx
0:11in, uh, in six months. I'll take it.
0:14>> Yeah, not too bad. Um, yeah. So, we'll
0:17do uh on average right now, we're doing
0:19about 45K a month. The the challenge
0:21that I'm having right now is that I am
0:24>> I am doing everything like I am the main
0:27point of
0:28>> uh I'm a We help financial advisory
0:31businesses scale through uh client
0:33acquisition. So meta ads is the main
0:35deliverable.
0:36>> Financial advisor agency consultant.
0:39>> Yep.
0:39>> Okay. Got it. Problem?
0:42>> Um I'm the main point of failure. So uh
0:46I don't have the systems or the
0:48processes for marketing, uh sales or uh
0:52delivery. And so like right now I'm I'm
0:55fixing the delivery and I'm just trying
0:57to figure out how do I do this faster so
0:59I can make more money.
1:01>> Yeah. Love that. So right now if we were
1:05to double the amount of like can you get
1:07customers easily right now?
1:09>> Yeah.
1:10>> Okay. So getting customers not a
1:11problem. So the issue is delivering for
1:13the customers.
1:15>> Yeah. Like I haven't I haven't lost any
1:17clients, but if if I were to double it
1:18right now, I would definitely I would I
1:20would start not being able to service
1:22clients and they would start churning
1:24faster.
1:25>> Got it. So what I would think of is step
1:27one is you need to think in workflows
1:29rather than roles. So like what are all
1:33the things that must occur in order for
1:35the business to happen and value to be
1:37delivered. So right now with a customer,
1:40there's probably some sort of
1:41communication cadence you have with
1:43them. There's probably something that
1:44you that's like I don't know
1:46individualized. There's probably some
1:48sort of account management that's done.
1:49There's probably some sort of asset or
1:51creative that's you know being generated
1:53on their behalf. There's probably some
1:54sort of like site work. Do you help work
1:57their leads? I'm guessing.
1:59>> Yeah.
2:00>> Yeah. Right. It's a classic. So, um
2:04currently how many people work for you?
2:08>> There's uh six of us total. So, five.
2:11>> Okay. And so what are you spending your
2:13time doing
2:16>> right now? It's it's building out the
2:18the process of building all the assets.
2:20So like the the VSSLs, the nurture
2:23campaigns, um and then I meet with the
2:25clients and I work on them with strategy
2:27as well. Like how how do we position
2:29themselves for their business?
2:32>> Got it. So I would say that um like the
2:35VSSL stuff, so much of that can be AIDed
2:38at this point, right? add basically
2:41almost all asset creation has become
2:44incredibly commoditized. Like will it be
2:46the best? No. But you can get eight out
2:47of 10 every time in seconds, right?
2:48>> Yep.
2:50>> So you're building out those flows which
2:52when a new customer comes in that should
2:54kick off a process. Then spins up VSSL,
2:56spins up ads, spins up creative, spins
2:58up copy, integrates with meta, gets them
3:01online, spins up the funnel so that they
3:03can get built out. And so the only thing
3:04that really has to happen is that they
3:05agree the direction and you turn it on,
3:08right? And you get a card on file.
3:10>> Yeah.
3:11>> Okay. So, right now you just need to
3:12build that.
3:15>> Okay. So, how many hours a day you spend
3:17building it?
3:19>> Right now, it's like all of my time
3:21aside a aside from meeting with
3:23customers or like servicing like
3:25responding. It's it's all of my time
3:26right now.
3:26>> So, how long will it take you to get
3:28this stuff done?
3:30>> I feel like
3:32two weeks probably like max.
3:35>> Okay. And then
3:37>> well let's let's deal with the next
3:38problem because if you're it's asking me
3:40a two week it's going to be solved in
3:41two weeks problem
3:42>> then uh let's look past that.
3:45>> Okay.
3:45>> So
3:45>> yeah. So then
3:46>> yeah go for it.
3:48>> Yeah. I was just going to say then the
3:49next thing that I see is is just like
3:51the process for sales. Like
3:53>> we're we're getting like I I can turn up
3:55the spot for uh leads on Meta and I
3:58think we'll still the cost per lead
4:00right now for us is like 50 bucks. It's
4:02It's pretty cheap um in comparison to
4:04what we're charging.
4:06>> Um and so I I think like the next
4:08challenge that I'm going to have is that
4:10is just not being in sales. Um although
4:13I guess I could be. Yeah. So
4:16>> Okay. So I mean you're going to apply
4:17the same process on delivery to the
4:19sales process. The only difference is
4:21that you [sighs] you cannot rely on your
4:24expertise in order to close. So the
4:26process has to look like this is that
4:27like you have to script this. So
4:29somebody who does not know much about
4:32being a financial adviser can close a
4:34financial adviser on your services.
4:37>> So they will not be able to sell like
4:38you because I'm assuming you sell with a
4:40position of authority as kind of an
4:41expert. And that's why founders
4:43typically always have higher close rates
4:44than somebody who's a traditional
4:45salesperson. And then they're like the
4:47salesperson can't sell like I can. It's
4:48like of course they can't sell like you
4:50can. They can sell a different way and
4:51still close the same percentage
4:52sometimes more. Right?
4:55So that's what the questionbased
4:57framework u in terms of like having a
4:59closure framework for the sale for them
5:00and then do you have a VSSL before they
5:02get on the call with you?
5:05>> Uh yeah, but it needs to be updated
5:07because
5:08>> Okay.
5:08>> Yeah, it needs to be updated.
5:10>> Well, I'm going to I'm going to give you
5:11I'm going to give you uh bad news and
5:13good news. Which one you want first?
5:17>> Uh give me the bad news.
5:19>> The bad news is that you don't have any
5:21real problems with your business. And so
5:22I have no like I'm not going like you
5:24you three and a halfx in the last 6
5:26months and you know what your constraint
5:28is which is delivery. You're taking the
5:30time to systematize what you're doing on
5:31the back end integrating AI so that you
5:33can get more leverage there. The next
5:35constraint that's going to come up is
5:36going to be sales and we need to just
5:38look at your t are you recording your
5:39sales calls?
5:41>> Yeah.
5:42>> Okay. So keep all of them plug them into
5:44the AI and then ask for the recurring
5:46themes that people uh say their problems
5:49are before they buy. take that list of
5:51problems, reintegrate that into the
5:53VSSL. We did this and it literally
5:55doubled our acquisition. Just a side
5:57note, we literally just took only the
5:58pain points that people said, put those
5:59in, and then we're like, "Oh, the we
6:01literally made a document called why
6:02people buy [laughter] and then we just
6:05use those in the VSSL." And then you
6:07take those same things and you build the
6:08script around it.
6:14>> Perfect.
6:14>> The good news is
6:15>> you're on the right path. Like this is
6:17just the work.
6:19So, I was going to ask you then if if
6:21I'm on the right path. You said before
6:23when we talked that this is going at
6:25some point I'm going to get capped out,
6:27right? And I when you when we spoke
6:29originally, you're like go up to Wales.
6:32>> Um,
6:32>> what's how many customers do you have
6:34right now?
6:36>> Nine.
6:37>> Nine. Yeah. So, the thing is is that
6:39what's your price point monthly?
6:42>> Uh, it's it's creeping up, but I'm I'm
6:44pushing to like six or seven. It's
6:45probably around five right now.
6:46>> 100 or thousand?
6:495,000.
6:50>> Yeah. So, with SMBs,
6:53um I mean, if you get the right
6:55financial advisors, $5,000 a month means
6:58nothing to them
7:00and that's who you want. This can scale,
7:02but it will scale only based on the
7:03quality of your avatar. If you deal with
7:05somebody who needs you to save their
7:06business, you will never save them.
7:09You'll just create a churn factory. So,
7:11just make sure you keep the bar very
7:12clear for who what what it what is
7:14required for someone to be a customer of
7:15yours. As long as that bar continues to
7:17go up over time, the business will be
7:19okay. If it starts going down, it's no
7:22bueno.
7:25>> From an enterprise sellability
7:26perspective, but like if you want to
7:27make money, which is what you're doing,
7:29it's fine.
7:32>> Yeah. Yeah. Like first of all, like I
7:33would I want to get to a million dollars
7:35in profit per year, but then after that,
7:37>> you could figure you could do that in
7:39you'll hit that run rate in a few like a
7:41quarter or two, man. Like just just keep
7:43solving the problems you are. You're
7:44fine.
7:45>> Yeah. Okay,
7:46>> cool.
7:47>> Awesome. Thanks, man.
7:48>> Appreciate you. Yeah, rock and roll,
7:50man.
7:51>> I sell SEO, websites, and PPC to
7:54roofing, HVAC, and home services company
7:56companies. We do uh 7 million in
7:59revenue. I would like to
8:02do 14 and sell for 20. My company for
8:0620. Um, and the kind of the thing
8:09holding me back right now, I think, is
8:11margin. I'm at like 13% IBIDA.
8:13>> Yeah. And then I think it's trying to
8:16figure out how to capitalize on market
8:17risk uh with AI coming up. So you were
8:21answering some of that just
8:22>> Yeah, I think um are you guys already
8:24doing like LLM SEO?
8:26>> I'm I'm building that service out right
8:28now. [snorts]
8:29>> Yeah, because that's I mean it's absurd.
8:31I think I think I saw this this morning
8:33like GPT is 500 million users weekly.
8:38>> That's really hard to comprehend
8:39everyone. Like that's a lot. It's a lot
8:42a lot. Um, that's more than like social
8:45media platforms. Like it's a lot. Um,
8:49and it's making recommendations for
8:50commerce and I'm sure they will monetize
8:52it in the whatever future. Um, but yeah,
8:56I mean that to me that's like what's my
8:58future proving thing? That's probably
8:59like thing one.
9:00>> Um, thing two is we have to Do you have
9:03a really good finance arm or no?
9:06>> Uh, yeah. We have a fractional CFO and
9:08then my wife runs money.
9:09>> I'll say no. um not as a not as a slight
9:13just because in the business that you're
9:14in typically it's more op opssheavy and
9:18so you have to be more financially
9:20disciplined in that business than you
9:22can get away with in let's say a course
9:23business right um that being said what's
9:27um what's churn right now what's your
9:28price point
9:29>> uh churn is 5% a month
9:33>> okay what's your price
9:34>> price point is like uh average is like
9:375,000 a month
9:39>> it's pretty Okay. For SMBs, you said 5%.
9:43>> Yeah.
9:44>> Okay. And then you're currently doing um
9:48you said 7 million.
9:49>> Yep.
9:50>> Okay. So, you got 7 million here. And
9:53then how many units are you selling a
9:55month?
9:56>> Um like 10.
10:00>> So, you're going down right now.
10:03>> Or I just have the wrong number on the
10:05how many we're sell. Okay.
10:06>> We're going we're going up very fast.
10:07>> No, you should go. No, no, no. Actually,
10:08sorry. I I did the math wrong.
10:09>> Yeah,
10:10>> that's on me. Yeah. So, you're pacing
10:12right now um 12 million in terms of your
10:15run rate right now. So, you want to get
10:19to 14. You can change nothing and get to
10:2112.
10:23>> So, I think we just need to make sure
10:24that the additional 5 million that's
10:27going to come is going to drop the
10:29bottom line. So, do you have operating
10:32capacity right now in order to uh to
10:33scale the business?
10:34>> We're building out nearshore. Uh, so
10:36that's gonna allow us to do that, I
10:39think. And so we're at our first five
10:41employees. We're trying to add like 10
10:42more in the next like three months with
10:44nearshore.
10:46>> Yeah. I think like so I'll give you the
10:48the the 12 months ago answer and then
10:50I'll give you the today answer.
10:52>> Yeah.
10:52>> So the 12 months ago answer is yeah, I
10:53would probably nearshore almost the
10:54whole team and then that would that
10:56would give you the margin back that you
10:57need. Um, if anyone's curious what this
10:59is, this is how you calculate the
11:00hypothetical max of a business based on
11:02its sales velocity in LTV, which is what
11:03I was trying to get to with you, but you
11:04had a zero, so there's no point. Um, but
11:07you sell 10 units a month. 5K 5% churn.
11:10So 100K LTV times 10 is a million bucks
11:13a month. So 12 million is your where you
11:16will be projected to. You're currently
11:18at seven. So you've got 5 million that's
11:21going to come if you change jack [ __ ]
11:22about the business. So you're going to
11:24have 5 million more in revenue that's
11:26going to come in. And what we need to do
11:28is make sure that one more of the
11:29existing revenue drops the bottom line.
11:31And for sure the additional revenue
11:32drops the bottom line. What does it cost
11:34to deliver on a customer?
11:36>> We have 50% gross margin.
11:39>> Yeah, that's probably why. So, if I run
11:41service businesses, my rule of thumb is
11:42always 80. So, I just don't start.
11:45>> Yeah, I know. That's what you say. I
11:46feel like that's a little crazy in our
11:48business, but I would love that. That
11:49would be
11:50>> amazing. Don't I I would just challenge
11:51that.
11:52>> Yeah. Just because like I I'll say this,
11:54industry averages you can completely
11:56throw out
11:58because
12:00American averages are overweight,
12:03divorced twice, going to die at like 70.
12:05So like why would I give a [ __ ] what the
12:06averages for an industry? Like most
12:08people suck at everything is including
12:11their business. And so why would I care
12:13like why would I measure myself against
12:14that benchmark? It just like it all it
12:16does is anchor me to lower standards. So
12:19there's no reason why you shouldn't have
12:20an agency that runs 50% margins. zero.
12:23You're also an SEO and you're niche
12:24down. There's tons of SEO agencies that
12:26run 50% plus net margins. And with AI
12:29and nearshoring, there's for [ __ ]
12:32sake, for sure you can run better
12:33margins than that. And so I say that
12:35just because I want to break this belief
12:36in being a little bit crude, but um the
12:39nearshore is the 12 months ago answer.
12:41The today answer is you need to become
12:44an AIG. Um because I'll bet you that 80%
12:48today of what you guys do is
12:50automatable. Not tomorrow. like today
12:5280% of what you do AI can do. I think
12:54I've been thinking of that as a threat,
12:56but I think I'm just trying to, you
12:57know,
12:58>> oh, why
12:59>> the capitalize on market risk help?
13:01Think a little bit. I'm trying to flip
13:03that in my head, too.
13:04>> Definitely do not think of this as a
13:05risk.
13:05>> Yeah.
13:06>> Think of it as a risk for everybody else
13:07because you're coming.
13:08>> Yeah.
13:09>> Be the big bad wolf, not the sheep.
13:13>> Like, for real. Because like I mean,
13:16what's the other option, right?
13:18>> Yeah. Like imagine like from from heaven
13:20there was this tool that they were like,
13:22"Hey, I can 10x the productivity of your
13:24entire staff and the rest of your
13:26competition aren't going to do it
13:27because they're lazy." Would you be
13:29like, "I want that.
13:30>> It's available."
13:31>> Yeah, we're we're incorporating a bunch
13:33of things, but I think
13:35>> I'm like a thousand hours in on tragic t
13:38right now. I don't know if I'm really
13:39using it as like
13:40>> No. Yeah.
13:41>> You have to be doing you have to be you
13:42have to get up to speed on agents. You
13:44have to get up to speed on on like
13:46make.com and how you can basically do
13:47kind of like 2.0 like what Zapier
13:49automations used to be is what kind of
13:51the new make.com type automations like
13:54all the I can I can it's such an
13:56opsheavy business and it's so
13:57techoriented that almost everything that
13:59your team does right now minus account
14:01management can pretty much be done by
14:02AI. So you have a big opportunity if you
14:06wanted to sell for 20 you could get to
14:0712 with 6 million in operating in margin
14:11and then you could sell for 20 for sure.
14:13So like the business you have right now
14:16with no real changes in terms of pricing
14:18and sales motion and anything like that
14:21can get you there. Like we just have to
14:23improve the operational flow within the
14:25business to get you the exit you want.
14:27Like this is in shooting distance. You
14:28just need to learn more [ __ ] for real.
14:31Like that this is good news. This should
14:33be good news.
14:33>> Yeah.
14:34>> I'm just speaking aggressively but it's
14:35good news. [laughter]
14:38>> Does that help? Okay. Um, how much would
14:41you say internal urgency has played in
14:42in the success you've had with with your
14:44business and [snorts] life
14:50[sighs] or is there something more
14:51overbearing than that?
14:56>> I think strategy is the reason that we
14:58have done well
14:59>> and so if we define strategy as
15:01prioritization
15:02u which means not that we do more things
15:04but we get more for the things we do.
15:07I think most people spend a lot of their
15:08time doing things that don't matter
15:10because the rate of activity is not like
15:11you're going to have frenetic energy.
15:12You're not going to be like moving your
15:13hands faster. So, um, in order for
15:16someone to work, you know, if I if I
15:17move a thousand times faster, I make a
15:18thousand times more than someone else
15:20does. It's because I'm operating with
15:21more leverage, not because I'm doing a
15:23thousand times more work. Now, I might
15:24have a thousand times the output. To be
15:26clear, I make a thousand times more
15:28content than many of you. A thousand
15:29times more content than many of you do.
15:31It's not like I have a thousand times
15:32more minutes. I just have a team and we
15:35have infrastructure and so we can
15:36repurpose and reproduce and all this
15:38kind of stuff and so we get and then
15:39that content is 10 times better and so
15:42we get 10 times the views on 20 times
15:44the content and there you go we have 200
15:45times the output or whatever and so um
15:48the speed that you move is
15:53if we define speed as output the output
15:55is is predicated on volume and leverage.
15:57Those are the two variables how much you
15:58do and how much you get for what you do.
16:00And so we move quickly because of the
16:03things how much we get for the things we
16:04do. And we also do work hard. We for
16:06sure work hard. Um and I would say that
16:09a lot of it has been more about
16:10consistency is that Leila and I have
16:12like pretty much worked every day for
16:14the last 13 years. Um last year was
16:17really tough. Last year I worked a
16:18hundred the first 100 days of the year
16:20without a day off. And I'm seeing like
16:22true work, not like I mean I still work
16:24every day today, but to me if I stopped
16:27working before two I don't really count
16:28as a work day. Um, so like it has to be
16:31more than 10 hours for me to be like
16:32this is a work day. [laughter]
16:34Um, just to put it in like perspective
16:37>> and and I'm not saying that everyone
16:39should do that. I want to be really
16:41clear and I'm sure it'll be taken out of
16:42context, but like
16:45um you do what you want. I just like
16:46doing this and so I do it.
16:49But the I mean I think maniacal sense of
16:51urgency is good. Um, but it's more so
16:53like if we ask the question, how could
16:56we do this in less time in onetenth the
16:58time rather than half the time? It's
17:00kind of like how do I make 10 times more
17:01money is a better question to ask than
17:03how do I make two times the money
17:05because when you operate in orders of
17:07magnitude rather than in, you know, 1,
17:08two, 3x's. A double is simple because
17:11all you do is more of what you're
17:12currently doing, which is the best
17:14riskadjusted move. But when you want to
17:16do a 10x or 100x, you have to think in
17:18with different levers. And so if you
17:20want to make a 100 times more money than
17:21you're currently making, you would have
17:23you just think about the you think about
17:24solving the problem entirely
17:25differently. And so if you had to do it
17:27100 times faster, you'd think about
17:28solving the problem differently than
17:30like I will move at I will take half the
17:31rest. Like does that make sense? What
17:34type of business is this business? I
17:36love it if you actually think about it
17:38right now. Like if if there's different
17:39types of businesses, what do you think
17:41this one really is? All right. Now that
17:43you you've thought about it, this is the
17:45shape of an e-commerce business. So, in
17:48the very beginning, you'll typically
17:49have to get some inventory, especially
17:51if you want to have a bigger business.
17:52No gigantic businesses or drop shipping.
17:54So, if you want to have a bigger
17:55business like a brand, you're going to
17:56have to do some sort of inventory. You
17:58have to front a little bit of cash,
17:59right? But as soon as you start selling,
18:01because it doesn't require a lot of
18:03operational infrastructure, you can grow
18:04really quickly. But then you'll hit
18:06these breaking points that stop your
18:09growth flat. And so, either these will
18:11be um cash constraints in the business,
18:13as in like you don't have money to buy
18:14more inventory. It could be um it could
18:18be traffic constraints like all of a
18:19sudden your ads just stop and then the
18:22the ads don't perform past a certain
18:24point. It could be that you've maxed out
18:25your distribution. Let's say if you're a
18:27retail distribution it's like okay we
18:28got 7,000 more 7-Elevens. It's like okay
18:31and then we continue to stay at that
18:33level until we get CVS's and then we
18:35stay at that next level. And so each of
18:38these kind of unlocks typically occur
18:40when you have a supply chain unlock or
18:42you have distribution that unlocks. So
18:45distribution could be literally physical
18:46retail distribution or it can be adbased
18:48andor affiliate um based distribution.
18:51All these different ways are promoting
18:52it so it gets it in more hands. So this
18:54is why the shape of this business looks
18:56this way. And you also can get stopped
18:59by all of a sudden you run out of stuff,
19:01right? your supply chain dries up
19:03because your manufacturer can only do a
19:05thousand units a day and you need 10,000
19:07units a day. And so while you find the
19:09next manufacturer, you're flat again,
19:11right? And this is the nature of the
19:13business that you're really in. And if
19:14you're curious, what you know experience
19:16do I have with e-commerce? Well, I'll
19:18give you two. So first off, Prestige
19:21Labs was a physical products business.
19:23We sold through a brick-andmortar
19:24distribution base. We also sold through
19:25an online store. So we had both those
19:27angles. I had distributors, obviously,
19:29our gyms. And then also uh any consumers
19:32could buy directly from the store. So we
19:34had ads that were running as well. And
19:35so both those elements were e-commerce.
19:37In addition to that um the launches that
19:40we had for uh my last book, the world
19:44record-breaking Guinness World
19:45Record-breaking book. Um this is
19:48literally e-commerce. It's a physical
19:50product that gets bought through a store
19:51and then shipped out. Like very
19:53straightforward. And so the reason that
19:55this video is so important before I dive
19:56into all the other four is that most
19:59people think that there is something
20:01inherently wrong with their business
20:02when it is in reality a feature of this
20:05business, not a bug. And so the more you
20:08can zero in on, okay, if these are the
20:10big hairy problems that exist within the
20:12shape of my business, how do I put
20:14disproportionate effort on solving these
20:17key foundational issues or problems to
20:20this model that will allow me to out
20:22compete all the other people in my space
20:24that don't know this? And I'm telling
20:27you, like this is the sauce. And also,
20:30sometimes you'll have to switch three
20:31PLs as you scale, too. Even if you have
20:33the the inventory, somebody might not be
20:34able to ship out 10,000 orders a day.
20:37Like when we did the book launch for me,
20:40I had to find three PLs who could ship
20:42out millions in 72 hours. That's
20:46absolutely absurd. Which is why we had
20:48to have multiple across different states
20:50in order to make sure that every single
20:51person got their book within days, not
20:53weeks or even months. I talked a little
20:55bit about the cons, but let's talk about
20:56the pros of this. So e-commerce,
20:59it can scale relatively fast compared to
21:02some of the other business models. And
21:03the reason for that is once you have the
21:05stuff, I mean, it's really just like how
21:07fast can you hand it to somebody in
21:08exchange for money. And if you have, you
21:10know, a Shopify store or a commerce
21:12store, any kind of online store, like
21:14they can just click and buy and then you
21:16have somebody else who's shipping it
21:17straight to them. As long as they can
21:19ship it and they can buy, you can sell a
21:20lot of them. The issues is when you run
21:22out of stuff, the guys can't produce it.
21:24You can't get raw materials. They can't
21:25ship enough of them. these become the
21:26constraints. But fundamentally, if
21:28you're within operating within all of
21:30those, as in they can ship more than you
21:31have, you've got enough inventory. As
21:33long as people keep buying, the number
21:35just goes straight up. And so, um,
21:38what's interesting about this particular
21:39business is that it also typically isn't
21:42going to be nearly as kind of keyman
21:44risk from the founder. Of course, there
21:45can always be key risk for key skills,
21:47but if you have a product that people
21:48love and people keep going to your store
21:50and buying it, it's a very sellable
21:51business. Okay? And so if that's the
21:54that's maybe the upside, let's talk
21:55about the dirty. So what sucks about
21:57having e-commerce? One of the first
21:59things that sucks about this business is
22:00that in general, most people who own
22:02e-commerce stores, they can do
22:04significantly more revenue than some of
22:05the other business models really
22:07quickly. It's one of the fastest ones
22:08you can grow revenue on. And it's also
22:10because people are willing to spend more
22:11money for stuff than they are for the
22:13other three categories because there's
22:15inherent value because everyone knows
22:17there's an inherent cost to creating it
22:19and sending it. So people are just more
22:21willing to spend money on it because
22:22that's t it's tangible. Um and it's the
22:25reason if you look at like gross sales,
22:27what are the what are the some of the
22:28top companies in the world? Walmart,
22:31huge amount of sales. Amazon, huge
22:33amount of sales. It's stuff, right? And
22:35people love stuff. And as somebody who
22:38came to selling physical products much
22:40later in my career, I was amazed at how
22:42easy they were to sell compared to some
22:43of these other things. Which then brings
22:45the the next question, which is like,
22:46okay, well, sometimes they're easier to
22:48sell. people are easy to take their
22:49wallet out. Um, but what makes it
22:51harder? So, this is very capital
22:54intensive because people know [ __ ] costs
22:56money.
22:58You also have to have the money to buy
23:00the [ __ ] And so, it is capital
23:03intensive in that this thing might make
23:05profit on paper, but as soon as you make
23:07some profit, what are you going to do
23:09with that money? You got to go buy more
23:10inventory. And so unless you have a flat
23:13e-commerce business, if you want to
23:15grow, the extra growth requires the
23:17profit from the earlier part of your
23:20growth path to fund the next level of
23:23inventory so you can sell through more
23:24in a shorter period of time. And so you
23:27can have you can be very asset rich in
23:29this business. You can have lots of
23:30inventory. You can have maybe a lot of
23:31enterprise value. But it's very common
23:33that entrepreneurs will get I mean I'm
23:35saying unbelievable numbers. They'll go
23:37to hundreds of millions a year and
23:39pretty much only live on their salaries,
23:41which there's nothing wrong with that.
23:42It's just different than some of the
23:44other models that are out there. In
23:46terms of the things that can also be
23:47difficult about this is that you have to
23:49rely very heavily on your partners. And
23:51so, it's very rare for an e-commerce
23:54business to be vertically integrated. It
23:56it sometimes happens, but it's super
23:57super uncommon. Uh that means that are
24:00you the one who's manufacturing the
24:02stuff? Are you the one who's actually
24:03shi, you know, pickp pack shipping of
24:05all the things both locally and
24:07internationally? Are you sourcing raw
24:09materials or do you have a a raw
24:10material mine that you're, you know,
24:12you're collecting milk from cows and
24:13turning that into protein? Probably not.
24:15And so you have core dependencies on
24:17other businesses. And if those
24:19businesses fail, you fail like very
24:22real. And so having many redundancies
24:24within each element of the business.
24:27Okay, how do we get raw materials? How
24:29do what about manufacturing? What about
24:30uh logistics in terms of pickp pack
24:32ship? Um and then on the capital side,
24:36it's like, do we have lending partners
24:37because we might run out of of capital
24:39if we're scaling really quickly? Because
24:41there can literally be nothing wrong
24:42with your business. But think about
24:43this. If you have 10 units of something
24:45and you make $10 of profit on each unit
24:47and you sell all of them in a day and
24:50the next day 10 more people want to buy,
24:52there's nothing you can do. And so that
24:54might mean that you might have 300 units
24:57worth of demand and you only have 10
24:59units worth of profit. What do you have
25:00to do next month? You can only buy 10
25:02more, right? And so your growth rate
25:04will be dictated by the amount of free
25:06cash flow that the business kicks off.
25:08And then that will be the growth rate
25:10that you'll be able to sustain or only
25:11growth rate that you'll be able to have
25:12in the business. And you'll be you'll be
25:14constrained by that capital. There are
25:16lending partners because this is a
25:19clearly a capital constrained business
25:20if you're growing quickly. Um, but those
25:23are some of the some of the negatives or
25:24some of the downsides. Now, if you own
25:27one of these businesses, what's the big
25:28hairy problem? What's the big problem
25:29that you have to solve?
25:31Number one is managing cash flow. So,
25:33you have to be able to forecast cash
25:34flow. You have to look at inventory
25:35cycles. How long is it, you know, if
25:36it's a 12-week lead time for you to buy
25:38stuff? You have to predict how much
25:39you're going to be selling in 12 weeks.
25:41That can be difficult, especially if
25:42it's your first time. Um, number one.
25:44Number two, your distribution. You're
25:46going to live and die by your
25:47distribution. So, ad accounts, um,
25:50brick-andmortar distribution partners
25:51that you can have, affiliates or
25:52influencers who have kind of I would
25:53call it synthetic distribution through
25:55their audiences. All three of those are
25:57your partners of yours, right? Product
26:00like great product will always find
26:01great distribution. Great distribution
26:02will always find great product, right?
26:04But the problem the big problem that
26:05you'll have to manage is going to be
26:07supply chain. How can you have enough
26:09stuff to sell, right? Logistics isn't
26:12that hard because there's a lot of
26:13there's some decent um, you know,
26:15pickpack ship that are out there.
26:16Everybody always has complaints because
26:18it's not their business. They would do
26:19it differently, blah blah blah blah
26:20blah. You wish they they they didn't
26:21charge you as much, etc., etc. But like
26:23by and large that I would say that
26:24problem has been has been solved
26:26relatively well. Um the next issue um is
26:31going to be
26:34making sure that the product you have
26:36has a brand behind it. And this is the
26:38real nasty one because if you just have
26:40a pure I call them smash and grab
26:43businesses, which is just you're a media
26:44arbitrage business. You know, you can
26:46buy eyeballs at $10 and you can sell
26:48them something where you make $11 in in
26:50gross profit. That's just a smash and
26:52grab business. And if somebody else sees
26:55you smashing and grabbing, guess what
26:56they do? The downside of physical
26:58products is that because anybody can own
27:00it. Anybody can also sell it. And so if
27:02you've got a widget, somebody else can
27:04go to China and make the same widget as
27:05you. And that's where patents come
27:07important. That's where if you actually
27:08do own your manufacturing, have some
27:10special sauce in terms of how you make
27:11your stuff, these become the competitive
27:13moes for the business. But the largest
27:16of all of them by far is brand, right?
27:19Why? Like Nike shirts are inherently the
27:22same shirts that other shirts, you know,
27:24shirt companies make. They literally buy
27:25the same raw materials. But why are you
27:26willing to pay so much more for a Nike
27:28shirt versus, you know, an unnamed
27:29shirt? Because of the brand. And so even
27:31if someone can copy every single thing
27:33down to the thread count of your
27:34business, they still can't copy the
27:36brand. And so some of the best uh brands
27:39are in e-commerce because you have to be
27:41in order to get big. And so we think if
27:43we translate what brand does and this
27:45applies to all of them, it's it's super
27:47important with e-commerce because it's
27:49so easy to commoditize um is that the
27:52value that brand delivers is that you'll
27:54have higher clickthrough rates as in
27:56more people show interest because they
27:57have a history of good experiences with
27:59you or good word of mouth. Number two is
28:01that you'll have higher repurchase
28:02rates. People will buy once and they'll
28:04continue to buy again. And number three,
28:06you'll able you'll be able to charge
28:08higher premiums for the same thing. So
28:10that means lower cost of acquisition,
28:12higher LTV because they're buying more,
28:13and higher gross profits because they're
28:15buying at premium prices. Those are very
28:17real benefits of building the big brand.
28:19And so when you have these types of
28:20businesses and they are kicking off
28:21cash, that means that that is somewhere
28:23you have to continually invest to expand
28:25and reinforce the associations that you
28:28want your products to stand for, which
28:30also means what affiliates or
28:32influencers you're not going to
28:32associate with, even if they can drive
28:34quick sales. what discounts you're going
28:36to choose to make or not choose to do
28:37because of what kind of brand you want
28:40to um uh demonstrate for your target
28:44audience. There's some brands that never
28:45do discounts and there's some that live
28:46and die on discounts. And so it really
28:47depends on what kind of brand you're
28:48trying to build. But you got to be
28:50specific about it and you want to be as
28:51deliberative about as you can day one.
28:53And so if this is you, I think probably
28:55the most important question is how do
28:56you win? Right? The per I I'll just do
28:59this by describing the perfect
29:01e-commerce company and then you can
29:03reverse engineer what you are missing.
29:06So the perfect e-commerce company would
29:08have its own manufacturing that it
29:10makes. It would have a very trusted
29:13third party or be able to ship directly
29:15out of their manufacturing facility to
29:18you know all the markets that they have.
29:20Now if they're international more likely
29:22they'll have to have international
29:23partners that do the logistics. Um but
29:25even more likely if that becomes bigger
29:26markets, they'll start creating
29:28decentralized manufacturing uh in each
29:30of those markets. So they have lower
29:31shipping costs and faster uh turnaround
29:33times and faster cycles for um returning
29:37inventory. So that's we're going back to
29:39front. They make the stuff right. They
29:42have some trade secrets or unique
29:43partners that they get their ingredients
29:45from or and or they have unique way of
29:47combining unique ingredients which makes
29:48them incredibly difficult to copy. They
29:50have uh great logistics in terms of
29:53pickpack ship. On top of that, they have
29:56uh a very lean team on the paid ad side
30:00that uh is a performance marketing team
30:02that is done in tandem with a team that
30:06understands brand first approach. And so
30:08what does that mean? The most successful
30:10companies that persist over a long
30:12period of time in e-commerce tend to
30:14have a 7030 split in terms of how they
30:16spend their money. 70 going towards top
30:18offunnel and brand awareness and
30:20associations and only 30% going to
30:23direct to purchase and most companies
30:25that are starting out and the vast
30:26majority of the ones that I talked to
30:28it's basically 100% just straight to
30:30purchase. You are building a drop ship
30:32company that has no competitive mode and
30:34you will always complain about the dupes
30:36and the the Chinese companies that are
30:37going to come in and undercut you
30:39because they they're in China and they
30:41have some of these other other
30:42competitive edges that you don't have,
30:44right? And so you have to know the game
30:45you're playing because if you know the
30:47game you're playing, you'll know how to
30:48win.
30:51And the last piece of this kind of
30:52competitive advantage that I would have
30:53in this perfect e-commerce business,
30:55assuming they have invested that extra
30:57money to have these premium brand
30:58associations, they have strong
31:00performance marketing. Um, we then have
31:03two more components to it. One is we
31:05want strong brick andmortar retail
31:07partnerships so that you have 50,000
31:09retail stores that are pushing your
31:11stuff out or you choose to long-term
31:13create your own pop-up stores that
31:14actually are your own. There is what's
31:17interesting is that nowadays the model
31:18has reversed. It used to be build a you
31:21know huge brickandmortar presence across
31:22many many states and then start an
31:24online store. The last kind of version
31:26of that was like Lululemon that I would
31:28say that was more popular and that I can
31:31think of at least and more recently it's
31:33kind of the reverse of that. You look at
31:34like the the Gym Sharks, right? They
31:36they're almost all e-commerce and then
31:38they choose to open up these flagship
31:40stores in key locations that are brand
31:42additive. Now on a on a long enough time
31:44horizon once brand awareness has been
31:46completely saturated for an e-commerce
31:48brand then you actually open up stores
31:51all over the place because you remove
31:53the cost of shipping um each of those
31:56markets because people actually go
31:57straight to the store and it increases
31:58their average order when they're in
32:00person. And so the actual cost of
32:02acquiring the customer becomes rent
32:04divided by sales per month.
32:07Kind of cool. And so uh that's what
32:10happens at the ultimate scale level that
32:12many brands don't get to and some of
32:14them just choose not to do that uh
32:15because they don't want to because it's
32:17super capital intensive, right? But at
32:19some point when everybody already knows
32:20who you are, you just want to make it
32:21even easier for them to buy. And so that
32:23is the ultimate version of an e-commerce
32:26brand. Um and how you do it, right? And
32:29it takes years to build that level of
32:30brand, but you can scale revenue
32:32incredibly quickly. And I'll add one
32:34last caveat, which is that you have to
32:35be an absolute savage uh email marketer.
32:38And so the amount of backend, the
32:40iceberg underneath of here that exists
32:42in terms of messaging, different process
32:44flows, the campaigns that you're
32:46running, attribution so that you can see
32:48your true metrics. Like these are some
32:50of the like I think some of the best
32:52marketers in the world are here. And
32:54it's because to be fair, once you have a
32:55killer product, it's, you know, backend
32:58dweebs that we're going to, you know,
32:59they're going to be working on making
33:01sure that we have enough product. You
33:02can you can hire the people who can make
33:03sure the cash flow is there, all that
33:04kind of stuff. But like the best, I
33:05think some of the best marketers in the
33:06world are e-commerce marketers. Oh, last
33:08thing. The product's got to be
33:10exceptional
33:11because no matter what you do, you can
33:14have all the best marketing in the
33:14entire world. If you get someone to buy
33:16it and then it sucks, doesn't matter.
33:19And as you scale these businesses, the
33:22cost of acquiring customers continues to
33:23rise. And so the only thing that you
33:26have that's a compounding vehicle that
33:28can scale proportionally to increasing
33:30cost of acquisition is a referral word
33:33of mouth chain that does two things. One
33:35is repeat visitors. Like how many what
33:37percentage of your sales are customers
33:39that are coming back because they really
33:40like the product? And then number two,
33:41what percentage of those customers are
33:43bringing more customers? And if you're
33:44like, well, what percentage is right? It
33:46depends on the growth rate of the
33:47business. So if you're growing by a
33:48th000% you're always going to have, you
33:50know, more new customers in the
33:51beginning. What matters more in terms of
33:53if you want to make this thing sellable
33:54is you want to be able to demonstrate
33:55that you look at this new cohort, how
33:58many of them are going to come by again.
33:59If you can get 60% 70% uh to buy again
34:03after their first purchase, you likely
34:05have a product that's pretty if you have
34:06the goal of getting to $10 million a
34:08year, you can pretty much do it in any
34:09business. If you have the goal with with
34:12the exception of if you are a
34:13brickandmortar and there's 100 people in
34:14your in your local market, probably not.
34:16But out outside of that, um that
34:19business model, even if you were in a
34:20tiny market, could get to 10 million a
34:22year. You just open up in new markets.
34:24That's all you do, right? Um and so most
34:27people's goals are achievable within
34:29their current vehicle. They were just
34:30too impatient and believe that there's
34:32another shiny object that someone will
34:34get there faster. But if you take the
34:35natural extreme and say, "If I only did
34:37one thing for 40 years, do I think I'd
34:38be successful?" Probably. And so if you
34:40knew that to be true, then that would
34:41give you a very strong reason to stick
34:43with whatever you're doing. Because let
34:45me give you a visual for this. This is
34:47the cost of switching. So if let's say
34:50that you're in year three
34:53of your current current business, okay,
34:56or current opportunity, it doesn't
34:57really matter what it is. So this is
34:58one, this is year two, this is year
35:00three. Okay? Now, what people want to
35:03convince themselves is that they're
35:04like, I want to start this new thing.
35:06Okay, that's fine. You want to start
35:08this new thing. So let's say that year
35:10one of this new thing is higher. Okay,
35:11that's fine. This one is a little bit
35:13higher than this one. on year two. But
35:15the thing is is that this is year one of
35:16this year,
35:19but it's year four here.
35:24You're still behind. And not only that,
35:29growth when you get bigger is easier
35:31than growth when you're smaller.
35:36And you're like, "Okay, well maybe maybe
35:38this faster rate of growth I'll be able
35:40to catch up."
35:42Okay, well now you're year two, but now
35:44we're at year five over here, right? And
35:47so the head start that you give yourself
35:50by sticking with something like sticking
35:53with it is how you get the head start.
35:54It's how you keep the head start that
35:56you already began, that's something that
35:58I think so many people miss when they're
36:00trying to go to this next opportunity.
36:02Unless there is something inherently
36:03wrong with the assumption that you have
36:05and skill is not the deficiency that you
36:08need to overcome, which it often is.
36:10Most of the time, people get stuck on
36:12things that I call features, not bugs.
36:13And this isn't my invention, is that
36:15there's an element of your business that
36:17makes it hard. There's an element of
36:18every business that makes it hard. But
36:21that's what makes it a business, and
36:22that's why you're compensated for it. If
36:24you're in the cleaning business, the
36:25difficulty you're going to have is
36:26attracting and retaining high quality
36:28talent. If you're in the fitness
36:29business, the difficulty is attracting
36:31customers and customer retention because
36:32people are inherently really shaky um
36:35about staying with their fitness goals,
36:36but they typically stick with their
36:37cleaners for a really long time, right?
36:40And so, every business has elements that
36:43make it shitty. It's just the name of
36:45the game. And you know what? I'll give
36:46you a different frame on this. So, if
36:49you were to think about different
36:51business models. So, let's think about I
36:52I doubt many of you guys have heard
36:53this, so this is pretty sweet. So, let's
36:55say that you've got uh e-commerce,
37:00you've got uh let's say you've got
37:02service,
37:04you've got um let's say info, education,
37:09media, and let's say you've got SAS. All
37:11right? So, software. Okay. So, let's say
37:14that these are four different
37:15opportunities. Each of these
37:17opportunities has a different shape.
37:20So, info looks like this.
37:24starts really fast, very difficult to
37:26scale. SAS is the opposite. Starts
37:29really, really slow, scales really,
37:31really fast.
37:33Ecom is more like this. You can scale
37:35fast, but there's difficulty with
37:37typically cash flow because you have to
37:39continue to buy more inventory. Uh you
37:41have supply chain issues. You have to
37:42switch suppliers, switch 3PL so they can
37:44handle your volume. All of this stuff
37:45happens as you continue to grow. So,
37:47it's more like, hold on, it's more like
37:50this.
37:52[snorts]
37:53That's the shape of ecom, right? And
37:56then service businesses are more like
37:57this,
37:59the slowest, but they are steady. And so
38:03when you see these four shapes,
38:05many of you guys just hit the crappy
38:07part of whatever the opportunity that
38:09you're on is, and then say there's
38:11something wrong with my business,
38:12therefore I should stop. Rather than
38:14seeing it as what it is, which is this
38:16is just the nature of how this business
38:18works. This is a feature, not a bug.
38:21It's going to be harder for you to
38:22attract really good talent in
38:24engineering and build software and
38:26you're probably going to be not
38:28profitable because most software sells
38:29for lower ticket most for a period of
38:32time and it takes a long time to get a
38:33product to actually be good. And so
38:35you're going to basically burn money,
38:36burn time for a long period and then
38:38eventually you can scale to the moon but
38:40it takes a long time sometimes years to
38:41get there and a lot of people don't have
38:42that level of tolerance.
38:45Info on the other hand is kind of the
38:47exact opposite of that. You can make a
38:48lot of money really quickly, a lot being
38:50relative, right? You're probably not
38:51going to become a billionaire, but you
38:53can make a million dollars and then very
38:56quickly it gets very difficult to scale
38:58it.
39:00And I'll say like info specifically,
39:01more like coaching, things like that.
39:02And the reason for that is because
39:03there's almost no no revenue retention.
39:05People don't stay around. Once you learn
39:06something, you learned it. That's why
39:08people graduate school. They learned,
39:10right? Service businesses, the issue is
39:12people because it's a very people people
39:14heavy business. You have to constantly
39:16be hiring, onboarding, and training. And
39:18it depends on the service you're
39:19providing. If you provide weight loss
39:20coaching service or weight loss
39:22services, I use that as example
39:23obviously because I came from that. You
39:25you have you have it's easy for you to
39:27get talent because lots of people want
39:28to talk about fitness and weight loss
39:30and and and food all day because they're
39:31like really into it. So, it's actually
39:32very easy to get good talent and for
39:34below average prices because people
39:36would do it for free. On the flip side,
39:38customers never want to do it and so
39:40they're canceling all the time. If I had
39:41an accounting firm, it's the opposite.
39:43Accounting firms have super high annual
39:45stick. What's the difficulty with
39:46accounting firms? Getting the people who
39:48can do accounting. And it's almost
39:50always this balance, right? If a lot of
39:53people want to do it, there's going to
39:54be a lot of competition. There's very
39:55low barriers to entry. And as a result,
39:57customers have lots of options and they
39:59don't want to do it themselves. If uh
40:01there aren't as many options and you
40:02have a supply supply constrained
40:05industry, then you're going to have
40:06issues getting talent fundamentally. And
40:09you can look at this at the business
40:10level, but you can also look at the at
40:12the at the uh at the industry level. And
40:14so I talk about demand constraints and
40:16supply constraints at the business
40:18level, but you can see if you are way
40:20off track based on do you match with
40:22your industry. If your industry, and by
40:24the way, if you are if you are the
40:25inverse of your industry, you're usually
40:27doing something either really wrong or
40:28really right. Side note, so great way to
40:30think about it. If you can be supply
40:34demand constrained in like the cleaning
40:37business example that I gave, if you can
40:39give supply constraints, sorry, demand
40:41constraints as in I could take a hundred
40:43times more customers than I currently am
40:45with my cleaning thing. Well, then
40:47you've either figured out something
40:48really amazing with cleaners to like
40:50attract them in and like you're about to
40:51go hypers scale or you're just starting
40:53out and you haven't done anything yet.
40:54There's either something really right or
40:56really wrong with what you're doing. But
40:57most of the time, you probably match the
40:59same constraint of your industry. And
41:00the problem with not being experienced
41:02is you think there's something wrong.
41:04And so then you end up spending multiple
41:05years not being allin on your
41:07opportunity and then being upset that
41:09it's not growing as fast as you want it
41:10to grow when in reality you never really
41:12gave it a shot because you're always
41:14looking. You're kind of like the kind of
41:16like the guy who's in the marriage that
41:17they're like, you know, they they were
41:19in love a while ago and you know they're
41:21things are okay but they you know he's
41:23got a wandering eye, right? He's always
41:25looking. He's always pay you know trying
41:26to look for the next thing, the next
41:27girl, the next whatever. And he's like,
41:28"Well, my marriage isn't It's like,
41:30well, no [ __ ] You're spending all your
41:31time looking at these other
41:32opportunities rather than doubling down
41:34on the thing you got.
41:36And when you double down on the thing
41:38you got, usually when you take the mar,
41:40it takes way less time. I would, okay,
41:42I'm not I'm not I'm not going to make
41:44broad sweeping statements on marriages,
41:46all right? But I will say that in my
41:48experience from my n equals one
41:49marriage, it takes way less time to go
41:52from like we're upset about something to
41:54we're really good than it does to create
41:56the loyalty, the trust, and the track
41:58record that you have from that marriage
42:00with someone else.
42:02>> I sell a school community to real estate
42:04agents. We're doing about 85,000 in
42:06monthly revenue. I want to get to
42:08300,000. What's stopping me is we put so
42:13much effort into webinars and in-person
42:15events that aren't converting the way
42:17I'd like them to to convert. Our
42:19in-person events specifically, we have
42:21not found the right sales strategy to
42:24capture people
42:25>> while they're in person to actually
42:27>> some experience with that.
42:28>> Yeah. To actually,
42:30>> you know, flip out their phone, scan a
42:32QR code, and pay right there. basically
42:35>> take out their phones, scan a QR code,
42:37and pay right there.
42:39>> Yeah. So,
42:39>> well, that might be part of it.
42:40>> Yeah, that probably is part of it. So,
42:42we're learning. So, our our webinars are
42:44>> Have you been to one of our events?
42:46>> Just this one,
42:47>> dude. Come.
42:48>> Yeah, I will.
42:50>> So,
42:50>> get your $5,000 worth real fast.
42:52>> I know. I'm sure.
42:53>> Just watch how we do it.
42:55>> So, our our webinars are by far our best
42:57converting events. Um, we do about,
43:00>> you know, 40 or 50 school sales on the
43:02webinar. say we have five or six hundred
43:04people.
43:04>> And you do and you only promote it
43:05organically. You don't do ads.
43:07>> Yes. Yeah. It's all on Instagram through
43:09our emails and everything. So,
43:12>> um we we put 45 minutes. We frontload
43:14the value and then the last 10 minutes
43:15is a school pitch. We actually show it
43:17to them. Our in-person event we just
43:19>> What percentage do you convert on the
43:20webinar?
43:21>> Probably about 5%.
43:23>> H that's low, but okay.
43:25>> I feel like it we're hitting the same
43:27audience over and over again. Also,
43:29they've kind of seen this before. Yeah.
43:31So, our at our in-person events at the
43:33end, we tried to have a big offer where
43:36it was like, you get access or you get
43:38your book, you get free access, you get
43:40a mastermind with
43:41>> my book alone didn't do it.
43:42>> I thought it would.
43:44>> What are we talking about?
43:45>> And I think the problem I was talking to
43:46my my friend over here who I just met
43:48and you you said this in an earlier
43:50question was maybe the audience that's
43:52live doesn't understand the story of us
43:55that much or they didn't have the
43:57context. The event was
43:58>> I'm gonna ask you a couple rapid fire.
43:59So eight hours one day event.
44:01>> Yeah, one day.
44:02>> Okay. And you pitch at the end of the
44:03day.
44:03>> We pitched right before a break, which
44:05might have been stupid because
44:06everybody's kind of getting up and then
44:08we pitched right at the end. And I think
44:10we got 10 before break not a big deal
44:11because you need to have the time to
44:12close them. So that's not bad. But um so
44:14you're doing a one-day event and
44:16pitching basically right before lunch.
44:17>> Right before lunch and then right at the
44:19end.
44:21I think
44:25[sighs]
44:25I would see if you could make Can you do
44:27a two-day?
44:28>> Yeah,
44:29>> it'll make a big difference
44:30>> because imagine you show up and then you
44:32have two presentations and like but are
44:34I guess they are a warm audience.
44:37>> Some I mean some of these came from a
44:39title company so not everybody
44:40understood our story but we have so much
44:42value in speakers that I didn't want to
44:44go up there for 30 minutes and explain
44:46the brand story.
44:46>> So let me give you a couple couple big
44:48things for everybody. So um this room is
44:50disproportionately marketers because the
44:52nature of getting here was that you were
44:53able to market stuff.
44:56So so
44:58um surprise um so I'll talk a little bit
45:00more from the marketing angle. So many
45:02of you guys saw um information education
45:04media related stuff um where people make
45:08mistakes where they're like how much do
45:09I teach versus how much do I pitch right
45:12the issue is not understanding what kind
45:14of information you should teach at each
45:15stage. And so there's two types of
45:17education. There's declarative knowledge
45:19and there's procedural knowledge. This I
45:20didn't invent this. This is just
45:21education system last 100 years but
45:23people just don't talk about it. So um
45:26uh declarative knowledge is knowledge
45:28about something. This is what you use to
45:30sell. Procedural knowledge is about how
45:33to do something. This is what you sell.
45:37If you use this to try and sell stuff,
45:39people will walk away with a shitload of
45:41to-dos and they're like, "I'm good."
45:42Mhm.
45:43>> What you want to talk about is all the
45:44things about how it works, about the
45:47outcomes, about what is possible. Teach
45:49how how it works conceptually, not so if
45:53I say I'll give you an example. Hey, you
45:55have a business, you're doing $2 million
45:57a year. If you go from 2 million to 5
45:59million, you cross over the
46:00institutional threshold. At that point,
46:01your multiple goes from 3 to 7. And so,
46:04you go from having something that might
46:05be worth $4 million to something that
46:07might be worth $35 million just by
46:09adding another $3 million in revenue.
46:11And here's why that is because
46:12institutional buyers blah blah blah blah
46:14blah. Me explaining that people like
46:16whoa that is really interesting. I
46:18didn't know how all that worked. I
46:19didn't teach how to do it. I teached
46:21about how it works.
46:23>> That still is incredibly valuable
46:24because the what's really nice about
46:26declarative knowledge is that everyone
46:28gets value from it because you just have
46:30to be there to get the value. When you
46:32teach tactics, you have to do the
46:34tactics to get the value, which means
46:35they can't do it with you. They have to
46:37go and then do it and then they would
46:39extract the value, right? So it's at a
46:40delay which means they don't want to buy
46:42right now. And so whatever you're
46:43teaching you want to be predominantly
46:45declarative in nature. Let me teach you
46:47about this stuff that you aren't aware
46:48of. This is where breaking beliefs
46:50around specific uh I think like this is
46:53the old model. This is the new model.
46:54I'm not teaching you here's how you set
46:56up a domain. Here's how you warm it up.
46:58Enzo, right? Here's how you have an AI
47:00agent. Here's how you personalize the f
47:02like we're not teaching that. We're
47:03saying did you know that if you go from
47:04not personalized to personalized this is
47:06the increase? Whoa. I'm not gonna I'm
47:09gonna show you that's how it works and
47:11then I will sell you how to do it.
47:14>> That's what you separate again. Secrets
47:16implementation.
47:17>> Yeah.
47:18>> So that's in terms of how you're
47:19structuring the days. Obviously you want
47:21to interweave proof throughout. That's a
47:23that's a a no duh. Um, my preference is
47:26if you do a two-day teach the first day,
47:28sell at the end, and then second day
47:31halfway through,
47:33>> you p you do a rep pitch and then you
47:36still finish with value the back half of
47:37the second day. And that give you two
47:39bites of the apple.
47:40>> Um, when you do the first half of the
47:43day, uh, on day two, you want to make
47:45sure that we sell at the point of
47:46greatest deprivation, not the point of
47:48greatest value. And so, this is one of
47:50the big mistakes that people make when
47:51they're trying to sell stuff is they
47:52actually sell at the wrong time. And so
47:54I'll [snorts] give you an example. So if
47:55we go to a restaurant, you order a
47:56steak, you have an amazing steak, and I
47:58say, "Awesome. How was it?" You say, "It
47:59was great." I say, "Awesome. Would you
48:01like another steak?" And you're like,
48:02"No, I'm good." And I'm like, "Why
48:03wasn't the steak good?" And you're like,
48:05"Yeah, it was great." I'm like, "Then
48:06why don't you want another steak?" And
48:08you're like, "Cuz I'm I'm good. It was
48:09I'm" I'm like, "So you didn't like the
48:10steak?" And you're like, "No, I loved
48:11the [ __ ] steak, dude. Like back off,
48:13right?" [laughter]
48:14Right? And so and that's because like
48:16the offer is right. The timing is wrong.
48:18Mhm. And so if I wanted to sell two
48:20steaks, what I would do is say, "Hey,
48:22sir, how's it going?" You say, "Great."
48:24I'm like, "How hungry are you?" And
48:25you're like, "Dude, I'm [ __ ]
48:26starving." And I'm like, "Guy like you,
48:27you're going to need two steaks." That's
48:29when you sell two steaks.
48:30>> Yeah.
48:30>> Before you've had your first bite before
48:32you're full. When you're at point of
48:33greatest deprivation. Where people get
48:35confused is they're like, "Hey, people
48:37got a lot of value. That's when I want
48:39to sell." The point of greatest
48:41deprivation and the point of greatest
48:42value only sometimes intersect when once
48:45you've created the value, you create
48:46deprivation around the next thing.
48:48>> And so the motivation for any person to
48:50take action on anything is the amount of
48:53lack they have. Deprivation. You're
48:55incredibly motivated to sleep when
48:56you're exhausted. You're incredibly
48:57motivated to eat when you're starving,
48:58incredibly motivated to [ __ ] when you're
48:59haven't. Right? And so the idea is we
49:01want to extend that's why in a pitch
49:03it's all about the pain. It's like how
49:05can we agitate the pain? How can we
49:06extend where they are to where they want
49:08to be and make this gap bigger and
49:10bigger and bigger? For us in a monetary
49:12world, which is what you sell in, the
49:14gap isn't physiological.
49:16It's um it's perceived. And so, we have
49:19to build up the perception of
49:20deprivation. And if any of this is like
49:22sounds like too complex, just stop me.
49:24But basically, when you get around
49:26people way richer than you, you feel
49:28poor.
49:29>> And then when you feel poor, you get
49:30motivated to get richer. If you're the
49:33richest person in all the people that
49:34you know, you have no motivation because
49:36you're the you're the richest man in uh
49:38not Babylon, but the poor part of
49:40Babylon, the hood of Babylon, [laughter]
49:42right? Do you do you get what I mean
49:44there?
49:44>> Yeah.
49:45>> And so um from a pitching perspective,
49:47what percentage are you closing on your
49:48impersons
49:50>> on the conversions? 62%.
49:54>> From free trial to
49:56>> Is that what you're referring to?
49:57>> No, no, no. You said you sell an event.
49:59>> Yes.
49:59>> And what percentage of people do you
50:00close at the event?
50:01>> In person event. So, we have 270 people
50:03there. 10 people join school from that.
50:05>> That was bad. Okay.
50:06>> On the webinar, it's five to
50:08>> Yeah. What's the price point?
50:09>> Uh,
50:09>> 97 per month, but we have a 7-day free
50:11trial,
50:13>> bro.
50:14>> But, at that event, we turned off the
50:16free trial because I was like, we're
50:17going to give them so much value here
50:19that 150 people are going to join. But
50:21when I say scan the QR code, I think
50:23operationally,
50:25>> is is it weird at an event for someone
50:26to pick up their phone and then put in a
50:28credit card during a break? Is that
50:32>> I think if I had a 97 Well, first off, I
50:34think you should be selling annuals up
50:35front.
50:36>> Yeah,
50:36>> for sure.
50:37>> Well, we we had if you get the annual,
50:39you get the mastermind and you get the
50:40book.
50:40>> Yeah. Yeah. Um I would get 100% of
50:44people to do the free trial.
50:46>> Mhm.
50:46>> And just say that they have to.
50:48>> Yeah.
50:49>> And then you leave
50:51>> like hold [laughter] them at gunpoint or
50:52something or what do you mean?
50:53>> Yeah. Kind of. You know what I mean?
50:54>> Yeah.
50:55>> So I would say, okay, hey guys. So, the
50:57first presentation we're going to talk
50:58about today includes um all these
51:00downloads. As soon as you do the free
51:02trial, it's the first module in there.
51:03Go get the free trial and then you'll
51:05get the first download that you need to
51:06fill out.
51:08>> I think our dumb move was [laughter]
51:10>> great 100% close rate. Uh and then we
51:12have the rest of the day and then the
51:14rest of my day, by the way, because we
51:15took their credit card out and what
51:17rolls out in school this coming week or
51:19very exciting. Um is that once the
51:21card's on file, they can one click
51:23upsell for the year.
51:24>> Mhm. So, you like, "Hey guys, um, also
51:26end of the day, this is the other thing
51:27that you're going to need for all of
51:29tomorrow. Everybody here, we're doing a
51:31dinner after this, I'm going to be
51:32there. Everybody who upgrades for the
51:33year right now, come to dinner with us.
51:35It's going to be sick." And that's your
51:38ticket out of here.
51:39>> Mhm.
51:39>> And just show us that you did it. And
51:41then we'll all go to dinner and we got
51:42the bus outside because you want to have
51:44an immediate reward for taking action.
51:46>> Yeah.
51:46>> Right now there isn't one.
51:47>> No.
51:48>> Speed outsells everything.
51:50>> Everything. And so if you have the
51:52choice between a really big outcome
51:53that's far away or a really small one
51:55that's right now, really small right now
51:56will outsell every time. Like on the
51:59live, I think we did like $250,000 in
52:03sales
52:04because I said we would sign a a t-shirt
52:07of mine
52:08>> and five people bought it.
52:09>> And I was like, that's wild,
52:12right? Anyone here? No. Okay. [laughter]
52:14I mean, I appreciate it. Um the B smells
52:17great, but the but the speed.
52:20>> We need an immediate reinforcer for why
52:22they should do it because people right
52:23on the edge and they're gonna have
52:23something they're going to miss out on.
52:24>> Yeah.
52:25>> And like if you're going to do it
52:26tomorrow, either way, you might as well
52:26do it now and get the dinner and hang
52:28out and we'll talk about like most
52:29people are going to ROI the whole thing
52:30just from the dinner.
52:31>> And if you want you get positioned as a
52:33three-hour mastermind and we'll have
52:34food, which will be perceived as more
52:35valuable than going to dinner with us.
52:36>> Got it. Thank you.
52:37>> Yeah, no worries. Was that helpful?
52:39>> Yeah.
52:39>> Okay, good. [laughter]
52:41[applause]
52:44I feel like that free trial thing will
52:46destroy for you.
52:47>> I mean, it is with the webinar and with
52:49everything else. It's just that in
52:51person we turned it off
52:52>> on the way into the webinar. Do you have
52:54a thank you page trial?
52:55>> No,
52:56>> dude. Bro,
52:58>> in order to attend the webinar and get
53:00the most out of it, get a free trial for
53:01our group is the thank you page offer.
53:03>> We have a big event on Thursday.
53:06So, we're gonna do that.
53:08>> Yeah. So, optin, thank you page, trial,
53:11and then also during the thing, hey
53:13guys, go get the trial. You can get all
53:14the stuff. You can cancel whenever, but
53:15at least you have all the assets.
53:18>> Thank you. Appreciate it.
53:20>> And then the whole event is about
53:21getting them to upgrade to annual, not
53:23about getting them to buy.
53:24>> It's almost weird that you sell 97. It's
53:25too cheap
53:26>> to sell. It's like It's like
53:31>> I mean, dude, you could sell $50,000
53:33thing from the event.
53:36>> Yeah. Okay.
53:37>> Yeah. Yeah. Yes, sir.
53:39>> Yeah. No, you're good. You're good.
53:40You're good. Yeah. Yes, sir.
53:42>> I own a medical practice. We're kind of
53:45closing in on 3 million revenue.
53:47Correct.
53:47>> Uh would like to grow. I wrote down my
53:49question.
53:51>> Um
53:53and it's um what's the most overlooked
53:57operational uh system that adds the most
53:59leverage in scaling a service-based
54:02medical business like HRT? And if you
54:05could uh only hire one person to help
54:08implement that system, who would it be
54:10and what would their role look like?
54:12>> It's a very targeted question. I think
54:14it'll depend on the business. So what's
54:17um right now are you are you local or
54:20are you
54:22Yeah. Are you local or are you national?
54:24>> Just local.
54:25>> You're local. Okay. So people come in
54:27person.
54:27>> Yes.
54:28>> Okay, got it. What's your primary lead
54:29source?
54:30>> Uh meta.
54:32>> Meta. So ads.
54:33>> Yeah. Ads and re uh sorry referral
54:35>> referrals.
54:36>> Sure. What's the split?
54:37>> Probably
54:3930 60 referrals. 30 60 meta.
54:42>> Okay. Heard. What's CAC? What's LTV?
54:44>> Uh
54:46LTV would be probably
54:504K I would say.
54:52>> That's LTV.
54:53>> Yeah.
54:53>> What's CAC?
54:54>> Um
54:59>> what do you spend for on per month on
55:01ads? How many new customers do you get?
55:02We spend about 25k
55:05>> per month now. Yeah.
55:07>> Okay. And
55:07>> Adwords,
55:09>> excuse me.
55:09>> Adwords or meta or meta?
55:11>> Both.
55:11>> Both. Okay.
55:12>> Yeah. And we get
55:15probably out of that we get roughly
55:17around 150 new patients.
55:21>> Okay. So like 225ish
55:23per per patient. Okay. So you're making
55:26like 20-ish to one. That's not bad.
55:29>> Um Okay. So 20-ish to one. And I'm
55:32guessing margins are good.
55:33>> Yeah.
55:34>> Great. So, do you have from a capacity
55:37standpoint, do you have more square
55:38footage that you can service more
55:40customers with?
55:40>> Yes, we have more square.
55:41>> How many how many more customers can you
55:42take right now per month sales velocity
55:44wise?
55:45>> 100 200.
55:46>> Okay. So, you can double right now.
55:48Okay. So then what breaks when you
55:51double?
55:52>> Nothing breaks.
55:53>> Well, then why don't you double?
55:56>> No, to answer your question. So like the
55:58thing that breaks first is going to be
56:00the operating constraint.
56:02>> And so then what stops you from
56:03doubling?
56:05>> I don't.
56:06>> Can you spend twice as much money?
56:07>> Yeah.
56:09>> So why don't we spend twice as much
56:10money?
56:11>> We should do that. That sounds good.
56:14>> Um so if you had twice as many people,
56:17would they all be able to be serviced?
56:18>> Yeah.
56:20>> I love this for us. So
56:24I I don't I don't really know what the
56:26issue is.
56:27>> Yeah. I think um
56:29>> are you doing this right now month over
56:30month?
56:31>> No, we're kind of stagnant right now.
56:32>> So then why why
56:34>> Yeah, that's what that's why I'm here.
56:36>> Why not? So why don't we spend more
56:37money just because you it's like you got
56:40to mental barrier of a thousand bucks a
56:41day and you're like I don't want to
56:42spend more than a thousand a day.
56:44>> I I mean I think my personal observation
56:47or thinking was that we should be more
56:50efficient with the money we're spending.
56:52Like I was thinking like okay our
56:53conversion rate
56:54>> 20 to1 should be like 40 to1.
56:57Maybe
56:59>> I mean you can always get more
57:00efficient. I wouldn't say it's the limit
57:01of the business.
57:02>> Okay.
57:03>> I mean long term the only thing that's
57:05like if we're just zooming zooming out
57:07the only thing that's really going to
57:07matter long term is that you keep people
57:09forever.
57:10>> Mhm.
57:10>> That's the only thing that matters. What
57:12are your long-term goals?
57:13>> Long-term goals.
57:14>> Yeah.
57:15>> Ideally, I mean we would like to grow uh
57:18expand, you know, nationwide if
57:20possible.
57:21>> Would you expand to multiple locations
57:23locally first?
57:24>> Yeah.
57:25>> Okay.
57:26We have two right now.
57:27>> Okay. So, if you could have four or five
57:30in your local market, you would be fine
57:31with that.
57:32>> Yeah.
57:33>> Okay. Um,
57:36>> yeah. The way I mean, the way to do this
57:37is that you you basically want to
57:39reverse engineer forever stick. Now, HRT
57:42is a product that tends to keep people
57:44pretty long time because it's hard to
57:45get off, right? They might switch you to
57:48switch providers, but once you're on,
57:49you kind of stay on. Um,
57:52so as long as you're What's your turn?
57:53Do you know? Um,
57:56right now probably 40
57:59>> 40% annually.
58:02>> Yeah.
58:04>> 40% annually. So you keep 60% of your
58:06customers every year.
58:08>> Maybe less. Maybe we keep like 50%.
58:12>> Okay. So 50% leave, 50% stay. All right.
58:14So that would be something that I would
58:15be looking at. Um, so yeah, if I were to
58:18solve this in order, I hear where you're
58:20coming from from like because you're
58:22local, you need to make sure that you
58:23don't just burn through your reputation.
58:25Um, which you might be at 50% of your
58:28customers leaving every year, especially
58:30on a product that's typically as as
58:31sticky as that. I mean, that's if you
58:33come from the gym world.
58:34>> Um, did you go through gym launch?
58:36>> Yeah.
58:36>> Yeah. So, you learned how to market and
58:38sell. You just didn't learn how to
58:39product. Um,
58:41yeah. So, I think you I think your
58:42instincts are right. I think we have to
58:44fix churn and we'd have to fix the sales
58:46motion. Part of it is going to be how
58:48the expectations are being set on both
58:49the marketing and the sales call and the
58:50offers that are that are that are that
58:52are top of funnel um and kind of the
58:55handshake between kind of step one, two
58:56and three and what are the what are kind
58:58of the key activation points and um the
59:01conversations that have to be had. So,
59:02if you did have a lot of profit, I would
59:04probably grab someone from
59:07from the software world and customer
59:09success um to build out the customer
59:12success like pathway for you so that you
59:15can fix the churn issue. So, to your
59:17point, I hear what you're saying. We're
59:18like, "Yeah, we could spend more, but
59:20you'd be churning out of people." So, I
59:21think your your instinct's right there.
59:23Um fix the hole in the back. And then
59:26number one, if you just do that, the
59:27business will probably double. Like if
59:28you can cut your churn from call it 50%
59:31per year to 20% per year or less then
59:34the business will just double on its own
59:35in two and a half years if you just did
59:37nothing. You just kept everything the
59:39same. But the thing is
59:40disproportionately that would drop the
59:41bottom line.
59:42>> So your profit would significantly more
59:44than double by doing that.
59:46>> I'll give you guys a fun example. So uh
59:48we whiten is a is a teeth whitening
59:50chain that we own. Um and when we
59:53invested in the business
59:55we
59:57two 2
1:00:00no we doubled LTV or rather double
1:00:02lifetime revenue per customer which
1:00:05sounds like a small thing but by doing
1:00:07that we 2.4xed revenue and we seven and
1:00:10a halfxed profit per location.
1:00:13That's why I bought the company. I was
1:00:14like I can crush this. Um, and so I I
1:00:18say that as a good incentive for you in
1:00:19terms of uh making it worth it. Like you
1:00:22might be able to double or triple or
1:00:23maybe quadruple the profit of the
1:00:25business by simply keeping going from
1:00:27turn being half people leaving to only
1:00:2920 or maybe 10% leaving every year. If
1:00:31you do that, the thing will just grow
1:00:32like crazy
1:00:33>> um and you'll just feel good about it.
1:00:34So your pro the who to solve that
1:00:36problem is there is a customer success
1:00:38person and then mapping the journey and
1:00:39there's probably a little bit of tech
1:00:40stack that you need to automate a good
1:00:42deal of it so that you don't have um as
1:00:44much operational drag.
1:00:46>> Awesome. Thank you so much.
1:00:50>> I feel like we get to be in this
1:00:51together.
1:00:51>> Hello.
1:00:52>> What's up Hunter?
1:00:54>> Hey.
1:00:55>> How's it going?
1:00:57>> It's good. I wasn't going to go sh so I
1:01:00appreciate that.
1:01:01>> We appreciate that.
1:01:02>> I [laughter] feel ever so lucky.
1:01:05Well, I appreciate you helping me. So,
1:01:07>> no, we appreciate you, dude. Um, so tell
1:01:09us the animal hospital right now. My my
1:01:12curiosity is what's the goal with it
1:01:14right now? Do you want to scale it? Do
1:01:16you want to get more money per location?
1:01:18Do you want to just make this location
1:01:20run on its own so that you can, you
1:01:22know, be with your family? Like, what's
1:01:23your goal with the business?
1:01:25>> Yeah, I mean, so I'm a little younger. I
1:01:28mean, I'm only 32, so like I figured I'm
1:01:31going to do this for a long time. Um,
1:01:33ideally I would like to have more family
1:01:35time, but right now like I'm actually
1:01:37kind of bored at the clinic. Like we
1:01:38need a lot more patients to be seen.
1:01:41>> Um, and I would I'd like to help.
1:01:43>> By patients you mean animals, right?
1:01:45>> Yeah. So more animals. Yeah. So I'd like
1:01:47to help the most amount of patients that
1:01:49I can while also making the most amount
1:01:51of money.
1:01:52>> Okay. And so again, can you repeat your
1:01:54revenue and profit?
1:01:56>> 1 million.
1:01:57>> Yeah. So th So this year we'll be at 1
1:01:59million. Um, last year we were at
1:02:01700,000. The year before that was $4.99.
1:02:04So, we're growing.
1:02:06>> We're growing, but I feel like the jump
1:02:09this year has mostly just been due to my
1:02:11price increases more so than like actual
1:02:14new patients coming in.
1:02:15>> And what's uh where where you where do
1:02:17you reside? Where's your business
1:02:19located?
1:02:19>> Um, we're north of Dallas in uh McKenna,
1:02:22Texas.
1:02:23>> Okay, that's a good location.
1:02:25>> Yeah, there's a lot of people. Tons of
1:02:26people. Tons of uh as well. Sounds a
1:02:30bet.
1:02:30>> Lots of bets.
1:02:31>> Okay. So, what did you do the years
1:02:33prior from essentially right now you
1:02:35want to see how do I grow faster and not
1:02:37be bored?
1:02:39>> I I want to I want to feel a little bit
1:02:41more fulfilled like where, you know, I'm
1:02:43making, you know, a good amount of money
1:02:44more than it is an associate, but I want
1:02:46to do more. I want to build something
1:02:49very special. I want to help uh pets. I
1:02:51mean, honestly, I've always wanted to
1:02:53nationwide, but I figured out how hard
1:02:54this was with my single location. So, I
1:02:57kind of scaled back my vision a little
1:02:58bit after that.
1:02:59>> Oh, let's not do that.
1:03:00>> Yeah.
1:03:01>> This is just a step, man.
1:03:03>> You're already Yeah. You've already got
1:03:05you've already put all the years into
1:03:06this. Like, I don't think that's
1:03:07unreasonable.
1:03:09>> Yeah. Um, so I, you know, whatever path
1:03:14would help me help more pets and again,
1:03:17obviously be a little bit better off
1:03:19financially and spend time with my
1:03:20family is where I want to go. But I'm
1:03:22fine, you know, sticking to it, seeing
1:03:24as many pets as I can myself, um, to not
1:03:27put myself in a bad spot to set that up
1:03:29for success.
1:03:30>> Okay. So, I have a couple questions.
1:03:31One, are you the primary, what you call
1:03:34your caregiver?
1:03:35>> Yes. So, I'm the only doctor. I have one
1:03:37receptionist and two technicians.
1:03:39>> And then, how many days per week hours
1:03:41are you working? How many patients are
1:03:42you seeing?
1:03:43>> Um, so we see on average about 16
1:03:46patients a day. Um, and that's Monday
1:03:49through Friday. Fridays are half days
1:03:51right now.
1:03:52>> Okay. So, how many hours do you work a
1:03:53day?
1:03:54>> Uh, it's it comes out to about 36, maybe
1:03:5740.
1:03:58>> Okay.
1:04:01Um, next question.
1:04:03How Okay, so you have 16 patients per
1:04:05day.
1:04:07>> And then how do you get those patients?
1:04:10>> Most like well over 60% of it is
1:04:13absolutely referral, just word of mouth.
1:04:15People seem to be really happy with us,
1:04:17which is great. It just seems to like
1:04:19take a while for those people to come in
1:04:22unless they have an issue or they, you
1:04:24know, they get a reminder that they're
1:04:25due for something and then they remember
1:04:27us.
1:04:28>> Well, how actively are you like how what
1:04:31kind of um cadence are you basically
1:04:35nurturing them on to like do you have
1:04:37them on a maintenance plan right now?
1:04:39>> So there there's no like membership
1:04:42plan. It's basically kind of like pay as
1:04:44you go. So, they come in, they pay they
1:04:46pay a consult fee, but we do have like
1:04:49reminders for core things like
1:04:51>> vaccines, uh, fecals, blood work, if
1:04:54their cat has like kidney disease, like
1:04:55reminders to come in for those checkups.
1:04:57>> But they're only sent out
1:04:59>> um two months before it's due. Um, two
1:05:02weeks before, and then like two weeks
1:05:04after they've missed their appointment.
1:05:06That's all we do.
1:05:07>> I like that.
1:05:08>> All right. We have a plan.
1:05:11So, so there's a there's the 101 version
1:05:13and there's the 2011 version, right? So,
1:05:15the 101 version is something that we
1:05:17call BAM fam. All right? Which is book a
1:05:18meeting from a meeting, which that no
1:05:20one ever leaves
1:05:24without booking a meeting. So, let's say
1:05:26they're, you know, they they their
1:05:27kidney got fixed today. Great. Well,
1:05:29we're going to want to book the next
1:05:30meeting for 3 months from now or six
1:05:32months from now. So, you just look at
1:05:33the p the patient or the pet and you
1:05:35look at their file and you see which one
1:05:36of the next things that's due and then
1:05:38you just book that meeting. That is the
1:05:40requirement.
1:05:41>> Okay,
1:05:42>> that's how it works. As simple as simple
1:05:44as that. Literally, no one leaves
1:05:46without already knowing when they're
1:05:47coming back.
1:05:48>> Okay, we can do that.
1:05:50>> Done. [laughter]
1:05:52>> Okay. Yeah. I mean, we literally don't
1:05:53do that at all. We just I kind of I
1:05:56>> That'll probably double your business.
1:05:57I'm not even jo like that alone.
1:05:58>> Yeah. No, we don't we don't I just
1:06:02started sending like emails to our
1:06:04existing clients. I mean, we have about
1:06:062,000 clients right now, and I don't I
1:06:09don't do any I don't nurture them. They
1:06:11just kind of come in and that's how we
1:06:12make our money.
1:06:13>> So, is it primarily like you and the
1:06:14receptionists that run the business?
1:06:17>> Um, yeah. I mean, really, yeah, the
1:06:19texts just kind of help me go room to
1:06:21room. Um, but they I mean, we all kind
1:06:23of answer phones. Like, I'm still
1:06:24answering phones to be honest. Um, but
1:06:27yeah, it's mostly just us.
1:06:32I mean, I think the first focus is the
1:06:34profitability piece, getting more of
1:06:35them, coming back in and rebooking.
1:06:37>> I think the second piece is having the
1:06:38right people so that you could scale it
1:06:40in the future if you want to.
1:06:42>> But you would have to first get yourself
1:06:43out of this location,
1:06:45>> out of this location.
1:06:47>> Well, how are we going to increase cash
1:06:48flow, right?
1:06:49>> Increase cash flow.
1:06:50>> And then we say, "Okay, how do we bring
1:06:52in another practitioner?"
1:06:54>> And then after that, we say, "Okay,
1:06:56>> if we can get ourselves out of this one,
1:06:57we can scale others."
1:06:58>> Okay, real quick. How much um how at
1:07:02capacity are you right now using all the
1:07:04pets?
1:07:06>> Oh, I mean I I could easily do 1.5
1:07:09myself. If not, I mean I'm going to be a
1:07:11little you know I probably closer to 1.8
1:07:14million I would say myself.
1:07:17>> But why are the margins so low?
1:07:20>> Um I'll be honest with you, they were
1:07:23even worse last year. This is all from
1:07:25me increasing my prices. What's the
1:07:27cost?
1:07:28>> Like what are the costs? You have a
1:07:29secretary and you've got a you got an
1:07:31office.
1:07:32>> Yeah. I mean my rent seems to be a
1:07:35little high but it's not like killing
1:07:37us.
1:07:37>> What's your rent?
1:07:39>> Um we spend it's $8,500 a month.
1:07:42>> I mean it's a little high but okay fine.
1:07:43But like but but that's not that's not
1:07:45eating up
1:07:45>> for your staff.
1:07:47>> Uh so each staff member gets between 20
1:07:50to $23 an hour.
1:07:51>> Okay. Well then where's the cost coming
1:07:54from? That's a I mean
1:07:55>> the other 40% clients that aren't
1:07:57referral, are you paying to get those
1:07:58ones?
1:07:59>> Yeah. Well, I am, but those I only spend
1:08:03$4,000 a month on ads right now.
1:08:05>> And where's the money going?
1:08:08>> Uh, I mean, we have we we have um
1:08:12profit. I mean, we have around, you
1:08:14know, if I pay myself a h 100,000, we
1:08:17have around 200,000 left over. I just I
1:08:19don't do anything with it. I don't know
1:08:20what to do with it.
1:08:22>> Okay.
1:08:24But you're running 30% margins
1:08:25figuratively, right? If we added in your
1:08:27owner pay.
1:08:29>> Yeah. Yeah.
1:08:30>> Still seems a little low.
1:08:32>> Okay.
1:08:32>> Given there's no like you're the one
1:08:34doing the service. That's the thing.
1:08:36>> What's I think the pricing is what we
1:08:38said you raised it already, but
1:08:39>> probably need to raise it again.
1:08:39>> Yeah. What what did you raise it from
1:08:41too?
1:08:42>> I I raised it. So like let's say you
1:08:45know my exams I really didn't raise. My
1:08:47exams are $95.
1:08:49Um, but most of my other costs I raised
1:08:52them close to 100%. And no one cared. No
1:08:56one said anything. So that tells me it
1:08:57probably I'm probably still too low.
1:08:59>> Yep. Have you
1:09:01>> But our average our average transaction
1:09:03like each each transaction is about 250.
1:09:06>> Yeah.
1:09:08>> So let me let me just give you this. So
1:09:09have you read Did you get my uh that
1:09:11email? It was a Mosy Minute email where
1:09:12I talked about pricing versus close
1:09:14rates.
1:09:15>> Yes.
1:09:16>> So I'm guessing your close rates are
1:09:17basically 100%. They're They're pretty
1:09:20good. Yeah.
1:09:20>> Right. So, you like and you probably saw
1:09:22that if you're over 80% you've got like
1:09:24a triple.
1:09:25>> Yeah.
1:09:26>> Yeah. So, I mean you you saw you saw a
1:09:27double and nothing changed. So, that
1:09:29like that pricing guide is pretty
1:09:30accurate rule of thumb. And if you also
1:09:32doubled and still saw no change, then
1:09:35the double still double or triple still
1:09:36remains. So, you might be able to get to
1:09:39$250, you know, sorry, uh to to to $500,
1:09:42$600 per
1:09:44and you still probably have room there
1:09:46because right now we fix so like in
1:09:49order of operations, it's like let's fix
1:09:51pricing even though you didn't fix it.
1:09:52It's like we need to increase pricing
1:09:53still with the increased pricing. We
1:09:56need to bring somebody else in to buy
1:09:57you time with the extra person and now
1:09:59added capacity. Then you need to start
1:10:01emailing your list on a regular basis.
1:10:03And from this point going forward, you
1:10:04institute Bam Fam as a way of life. No
1:10:06one leaves the office without knowing
1:10:08when they come back in. If you just do
1:10:09that, you're good.
1:10:12>> Okay,
1:10:12>> cool.
1:10:13>> Yeah. No, I like that plan. I'm I'm
1:10:14gonna sweat a little bit about the price
1:10:16increase again, but I'll do it because
1:10:17you told me to.
1:10:18>> Dude, the worst case they say no, man.
1:10:20>> I And that's what I expected everyone to
1:10:22say no last time and no one cared.
1:10:23>> No one cares, dude. It's their kids.
1:10:25Don't worry about it.
1:10:25>> Yeah.
1:10:26>> Yeah. I don't think you should worry
1:10:27about it. Also, McKenna, Texas is pretty
1:10:29good in terms of average income and
1:10:30such. It's on the higher end. So,
1:10:32>> yeah. Yeah. people. I mean, people spend
1:10:34what I consider a large amount of money
1:10:35on their pets, which is great. You know,
1:10:37it allows me to practice the gold
1:10:39standard, which I like doing. I don't
1:10:41try to play the lowcost game, but maybe
1:10:43unintentionally I am a little bit lower
1:10:45cost. Like, people do make comments
1:10:46that, "Oh, you're cheaper than so and
1:10:47so, don't
1:10:48>> Yeah. You don't want to You don't want
1:10:49to be known for that."
1:10:51>> No, I don't.
1:10:52>> No, you're in a service business, man.
1:10:53Like, service businesses, especially
1:10:55with humans, it's like you pretty much
1:10:56only have one play, which is build a
1:10:58brand and continue to charge more. Like
1:11:00if you think about a meta concept of
1:11:01service businesses in general, your
1:11:03prices should really only go go one way.
1:11:06And you can measure how much you've
1:11:07succeeded as a service business by how
1:11:10high your prices are. Because if you
1:11:12succeed as a service business and you do
1:11:13a good job long enough, then you will
1:11:14always have more demand than you have
1:11:15supply. And if that is the case, then
1:11:17you continue to raise your price.
1:11:19>> And so that then reinforces the brand,
1:11:21which bring better people who spend more
1:11:23and you do a good job. You get a better
1:11:24reputation, which reinforces the brand.
1:11:25And so that's the virtuous brand and
1:11:27pricing loop. And so you can measure how
1:11:29advanced you are as a business owner by
1:11:30the prices you're able to charge because
1:11:32of how good you are at the service.
1:11:35>> I feel like you're really good and it's
1:11:37just a literally a matter of like
1:11:38self-esteem. Totally. And confidence.
1:11:40>> Just charge more, man.
1:11:41>> No, it it is. I I struggle with it
1:11:43because I never want, you know, people
1:11:44to feel like I'm taking advantage. But
1:11:46like I I do consider us to be top
1:11:49quality. Like people love us.
1:11:50>> You're not taking advantage. You only go
1:11:52ahead. Go ahead. Go ahead.
1:11:53>> You take the money and then you invest
1:11:55it in getting better talent,
1:11:56>> better equipment. better training. Like
1:11:59we talked about this yesterday, me and
1:12:00Chiron, but like that's how the flywheel
1:12:02works. If you want to have a high
1:12:03quality business, you have to make a lot
1:12:05of profit because if you don't, then you
1:12:07can't invest to have that high quality
1:12:08business,
1:12:09>> right? And that and I and I do I have
1:12:11started to understand that the only way
1:12:13for me to help more pets and do what I
1:12:15want is to be profitable and continue to
1:12:17grow.
1:12:17>> Yes. If you want to go national, you
1:12:19need Yeah. You need to have Yeah. If you
1:12:20if and it's interesting because it's
1:12:22it's almost counterintuitive cuz like
1:12:24the people who really need to raise
1:12:25their prices the most are like your type
1:12:28of person. They're the usually the ones
1:12:29that are like the most hesitant. Yeah.
1:12:30It's the Lelayas, right? Like when I met
1:12:33Laya, I'll just say just so you feel a
1:12:34little better about this. Like this is
1:12:36totally learnable and this is this is a
1:12:38this is a perspective on the world. And
1:12:40when I met Ila, she was like, I just
1:12:42want everyone to be healthy. Because she
1:12:43was we were in fitness, right? She's
1:12:44like, I just want to help everyone. And
1:12:46I was like, don't you think you'd be
1:12:47able to help more people if you actually
1:12:49made a profit? And I would just say that
1:12:51our life is a living testimony of that.
1:12:54>> Yeah, absolutely.
1:12:55>> We couldn't make this content unless we
1:12:56had businesses that make money. We
1:12:58wouldn't have time. We wouldn't have the
1:13:00resources.
1:13:02>> Yeah. Okay.
1:13:03>> Cool.
1:13:03>> Well, I can do I can do all these
1:13:05things. Yeah. Absolutely.
1:13:06>> Well, you got you have the four-part
1:13:07plan. We're going to increase prices
1:13:09with the extra cash flow, hire somebody
1:13:11with the extra time that you get back
1:13:12from that person. you're going to
1:13:13nurture the leads and put a basically
1:13:15the the fast cash uh playbook. We have
1:13:17the cash calendar system in there. That
1:13:20plus the LTV playbook will be the two
1:13:22things that I'd want you to focus on to
1:13:24install in the business as the first two
1:13:26things.
1:13:27>> And then after that um and bam fam is
1:13:30like you can do that tomorrow like that
1:13:32that's not like an option like do that
1:13:33tomorrow. So those are the three actions
1:13:34and then bam fam is just like assumed.
1:13:36Okay.
1:13:37>> Okay. Yeah. No, I I can do that. I
1:13:39appreciate it.
1:13:40>> Rock and roll, dude. And the pricing uh
1:13:41the pricing playbook will help you just
1:13:43kind of with some of the messaging
1:13:44around how to raise the price. Cool.
1:13:45>> Yeah, I'm excited to get that. I
1:13:47appreciate it.
1:13:48>> You bet, man.
1:13:48>> Thank you for doing the hard work. I had
1:13:50uh 18 pets growing up, so I love
1:13:52animals.
1:13:53>> Yeah, that's crazy. I I have about 18
1:13:56right now. You You and my wife would get
1:13:57along well.
1:13:59>> Great, man. I'm happy to hear it.
1:14:01>> All right, rock and roll. Thanks, man.
1:14:02>> Okay.
1:14:03>> Thank you for donating books.
1:14:05>> All right. See you.
1:14:06>> Byebye. If you like this video and
1:14:08you're a business owner who wants to
1:14:09break through your current revenue
1:14:10ceiling, I distilled every lesson from
1:14:11scaling 10 businesses past 10 million
1:14:13and three businesses past 100 million
1:14:15into a completely free scaling road map
1:14:17that I've used to go from 0 to 1, 0 to
1:14:1910, and 0 to 100 plus. And so you can
1:14:21click here and you can check it out.
1:14:22Again, absolutely free. And since you're
1:14:24a business owner, appreciate you. And uh
1:14:26enjoy.

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