Why This $3M Owner Shouldn't Chase More Sales Yet — Transcript

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1. 0:00I own a um wellness, weight loss, meds
2. 0:04ball. We do a million things and I've
3. 0:07learned a lot from being here. So, thank
4. 0:09you.
5. 0:09>> What's revenue?
6. 0:10>> Um currently
7. 0:12hovering around three million.
8. 0:14>> So, you do you get $3 per thing that you
9. 0:16do?
10. 0:18>> I wish it was that way.
11. 0:21Okay. So, you're at three. You'd like to
12. 0:23be at
13. 0:25>> 20.
14. 0:25>> Okay. Next week.
15. 0:27>> Five years.
16. 0:28>> Yeah. Okay.
17. 0:28>> Two to five years, maybe. Cool.
18. 0:29>> I would love to have
19. 0:31>> through one location or multiple.
20. 0:32>> I have one location.
21. 0:33>> Through one. Do you want to get to 20
22. 0:35through one location or multiple?
23. 0:36>> No, multiple.
24. 0:37>> Okay, got it. Um, okay. So, what's
25. 0:40stopping you?
26. 0:41>> Uh, well, bandwidth.
27. 0:44>> Okay. So, so what stops you from doing
28. 0:46more?
29. 0:47>> Time, money.
30. 0:48>> Is it you can't afford to? What are
31. 0:50margins?
32. 0:51>> Well, so I I my is around a million.
33. 0:56>> Okay. One on three is good. Yeah.
34. 0:59>> Okay. So, it's not money.
35. 1:02>> Maybe.
36. 1:03>> Okay.
37. 1:06>> That sounded complicated.
38. 1:10>> Well, what I think my EVA is is
39. 1:13different when what anyways
40. 1:17than what my CPA think my EVA is.
41. 1:19>> Did they say it was less or more?
42. 1:21>> No. So, they so on my P&Ls my you know
43. 1:25>> Yeah. It's listed as, you know, your
44. 1:27IBIDA is your
45. 1:28>> Yeah.
46. 1:29>> your earnings before interest tax. Yeah.
47. 1:31>> Yes. Yes. Yes. So,
48. 1:32>> what was your I'm guessing is it a cash
49. 1:34flow issue?
50. 1:36>> No, it's not a c I think it's a sales
51. 1:38issue to be honest with you because a
52. 1:39lot of like with everything else it's
53. 1:42sales and we're word of mouth.
54. 1:45>> Real talk. So, in the beginning of the
55. 1:47month versus the end of the month, how
56. 1:49much did the bank account go up
57. 1:52>> um
58. 1:53>> on a monthly basis?
59. 1:55>> Okay. So probably around 20 to 50 grand.
60. 1:59>> Okay. Helpful. So the IB stuff that they
61. 2:02might be making adjustments I'm guessing
62. 2:03you're buying lasers, you're buying some
63. 2:05equipment and that's
64. 2:06>> Well, there's Yes.
65. 2:07>> impacting cash flow.
66. 2:09>> Yeah. I I think cogs. So um so I do
67. 2:13think some of like my labor's not being
68. 2:16in in my cogs essentially and I think it
69. 2:18should. So it's a bookkeeping issue.
70. 2:22>> She's wrong. You think you make less
71. 2:23money than she's saying you make?
72. 2:26>> No, she thinks I make Well, okay. So, I
73. 2:28have a gross income and I have a net
74. 2:30income. Okay. After everything like I
75. 2:33have a
76. 2:33>> What's net income?
77. 2:34>> Well, I have a 401k for all of my
78. 2:36employees and insurance.
79. 2:38>> So, my net income which includes
80. 2:42interest and tax and depreci
81. 2:48>> Yeah, it's around 700,000.
82. 2:52Okay, great. Okay, so three three
83. 2:54million top line, $700,000 bottom line.
84. 2:57>> So it's not it's not a money I think
85. 2:58it's more of a bandwidth and it's a
86. 3:00sales issue.
87. 3:00>> Okay, but you have three so you have
88. 3:02$700,000 in profit that is coming into
89. 3:04the business.
90. 3:05>> Yes.
91. 3:05>> Okay, now you're saying bandwidth. Is it
92. 3:08your bandwidth or
93. 3:10>> it's my bandwidth?
94. 3:11>> Okay, got it. So
95. 3:13>> because I'm practicing.
96. 3:15>> Okay, so you're in the chair.
97. 3:16>> Yeah,
98. 3:16>> functionally,
99. 3:17>> right?
100. 3:18>> Um
101. 3:18>> and literally.
102. 3:19>> Yeah. So are does that include your
103. 3:21salary the 700 or no?
104. 3:23>> Uh yes.
105. 3:26>> So you get paid and then the business
106. 3:27makes
107. 3:28>> no no I take draws but yeah so my net
108. 3:31would would be it's included in that
109. 3:34after after everything is done it's
110. 3:36700,000 is
111. 3:37>> and you get you eat out of this 700
112. 3:40>> uh before the 700.
113. 3:42>> Okay. So you have a salary.
114. 3:44>> Yes.
115. 3:44>> Or whatever. Okay. Your seller your
116. 3:46seller discretionary earnings. Okay. So
117. 3:48what are you paying yourself?
118. 3:51That's That's a little
119. 3:52>> I don't care how much you make. I really
120. 3:54promise I don't.
121. 3:54>> So, one of my Okay, so I take a medical
122. 3:56director draw and then I just take
123. 3:58profit sharing draws. So, I've paid
124. 4:01myself as the medical director, which is
125. 4:03very little. Please, please no one turn
126. 4:05me in.
127. 4:06>> No, no one cares. Let me explain. So,
128. 4:10like imagine
129. 4:10>> probably around 200,000 or so.
130. 4:12>> Okay, thank you. Okay, so 700's backs to
131. 4:16900.
132. 4:17>> Yeah.
133. 4:17>> Okay, so about a million bucks a year.
134. 4:18Yeah, that's what I said.
135. 4:19>> I think Okay.
136. 4:27>> Getting hot.
137. 4:31>> Okay.
138. 4:32>> Sorry.
139. 4:33>> Okay.
140. 4:35All right. So, you're making a million
141. 4:36bucks a year from your three million.
142. 4:37What are the other $2 million in costs?
143. 4:39Is it all like what's where's your cost
144. 4:41basis coming from?
145. 4:42Um, so
146. 4:44>> I'm asking this question because I want
147. 4:45to figure out whether you need more
148. 4:47headcount, more skilled headcount, or
149. 4:50you just need to choose to do fewer
150. 4:52things. That's what I'm trying to figure
151. 4:53out.
152. 4:53>> Yeah, I have to do fewer things.
153. 4:55>> Okay. So, of the many things you do,
154. 4:57which are the most profitable?
155. 4:59>> Um,
156. 5:00weight loss and concier.
157. 5:02>> Okay, got it. And then how much of that
158. 5:05uh of your time does that take versus
159. 5:07how much it makes? Um, so it takes about
160. 5:13I mean it's gonna So if I had to divide
161. 5:16>> No, just rough.
162. 5:17>> 80% of my time is being a physician. 20%
163. 5:20of my time is being a business owner.
164. 5:24>> Okay. Um
165. 5:26I'm saying I'm trying to figure out what
166. 5:29the highest use of your time is and then
167. 5:31get you to not do the things that are
168. 5:33not high use of your time.
169. 5:34>> Yeah. And so the 700 or 900 that you're
170. 5:37making, would you be able to find
171. 5:39another physician for $200,000 a year to
172. 5:41do what you're doing inside the business
173. 5:42>> in part-time at least?
174. 5:44>> Okay. Well, I mean, so what stops you
175. 5:46from paying someone $200,000 a year and
176. 5:48getting all the time back?
177. 5:49>> Because I'm trying to find a unicorn.
178. 5:51>> Okay. What does this unicorn do that
179. 5:54like? Because weight loss is not hard to
180. 5:56find.
181. 5:57>> Uh, true. We have a great wonderful
182. 6:01culture and it's somebody that will a
183. 6:05physician that will spend the time have
184. 6:08>> still be involved in the culture.
185. 6:10>> True.
186. 6:10>> You'll be the owner.
187. 6:11>> I'm still involved in the culture.
188. 6:13>> True. Yeah.
189. 6:14>> Okay.
190. 6:15>> And just it's not hard to find. I just
191. 6:16have to do it.
192. 6:18>> Okay.
193. 6:19This is great. Um
194. 6:24so we need to hire a doctor using your
195. 6:26$200,000 a year salary to give to hear
196. 6:29him. She sorry she whatever person. Um
197. 6:33and then you'll have your $700,000 left
198. 6:35over and then your question is like with
199. 6:38all that extra time that you have, do
200. 6:40you think you can make the business run
201. 6:41better and make more money?
202. 6:43>> Yes.
203. 6:44>> Okay, great. I love this for us.
204. 6:48>> Okay. And then yeah, you probably do
205. 6:49have some sales issues, but in terms of
206. 6:51like how are we going to get you the
207. 6:53bandwidth to solve the sales problem if
208. 6:55you're already scattered thin,
209. 6:57>> right?
210. 6:58>> Right. Because right now I'll bet you
211. 6:59have a lot of half-built bridges,
212. 7:02>> right? And so like we don't need to
213. 7:03start building more. You start removing
214. 7:05like everything that's taking all your
215. 7:06time. So that because like now if you
216. 7:08had said we're doing $400,000 in profit.
217. 7:12Um and my comp is included in that. I'
218. 7:13been like we probably have some business
219. 7:14issues and unfortunately we can't pay
220. 7:16anyone else to get in yet because it's
221. 7:17too thin.
222. 7:18>> So we got to fix a bunch of other stuff.
223. 7:19But given the fact that you got roughly
224. 7:2130% margins from a seller discretionary
225. 7:23earning perspective,
226. 7:25>> um like business is okay. Could you
227. 7:28probably improve the sales process?
228. 7:29Basically, every medical company can.
229. 7:31Um, so yeah. Is it the constraint?
230. 7:35Probably not.
231. 7:37Because if you made an extra $300,000 in
232. 7:39profit, would that change your life?
233. 7:44>> Not really.
234. 7:44>> Okay. So, the sales So, then like the
235. 7:46sales isn't the constraint that might
236. 7:48occur if the sales got fixed. The issue
237. 7:50is your time.
238. 7:51>> Yes.
239. 7:51>> Right. So, we need to go
240. 7:55>> manpower.
241. 7:57The first thing I said,
242. 8:02>> touche.
243. 8:03>> Does that help?
244. 8:04>> Yes. Thank you.
245. 8:04>> You bet.
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258. 8:27enjoy.