Why This Business Owner Shouldn't Spend All His Profit — Transcript

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1. 0:02I feel like we get to be in this
2. 0:03together.
3. 0:04>> Hello.
4. 0:05>> What's up, Hunter?
5. 0:06>> Hey.
6. 0:08>> How's it going?
7. 0:10>> It's good. I I wasn't going to go show,
8. 0:12so
9. 0:13>> Well, I appreciate that.
10. 0:14>> that.
11. 0:15>> [laughter]
12. 0:15>> I feel ever so lucky.
13. 0:18>> Well, I appreciate you helping me, so
14. 0:20>> No, we appreciate you, dude. Um so, tell
15. 0:22us the animal hospital.
16. 0:24Right now, my my curiosity is what's the
17. 0:26goal with it right now? Do you want to
18. 0:28scale it? Do you want to get more money
19. 0:29per location? Do you want to just make
20. 0:31this location run on its own so that you
21. 0:33can, you know, be with your family?
22. 0:35Like, what's your goal with the
23. 0:37business?
24. 0:38>> Yeah, I mean, so I'm a little younger. I
25. 0:41mean, I'm I'm only 32, so like I figured
26. 0:43I'm going to do this for a long time. Um
27. 0:46ideally, I would like to have more
28. 0:48family time, but right now, like I'm
29. 0:50actually kind of bored at the clinic.
30. 0:51Like, we need a lot more patients to be
31. 0:53seen. Um and I would I'd like to help
32. 0:56>> By patients, you mean animals, right?
33. 0:58>> Y- yeah, so animals, yeah. So, I'd like
34. 1:00to help the most amount of patients that
35. 1:02I can, while also making the most amount
36. 1:04of money.
37. 1:05>> Okay. And so, again, can you repeat your
38. 1:07revenue and profit?
39. 1:091 million.
40. 1:10>> So, this year will be at 1 million. Um
41. 1:13last year we were at 700,000. The year
42. 1:15before that was 499. So, we're growing.
43. 1:19We're growing, but I feel like the jump
44. 1:22this year has mostly just been due to my
45. 1:23pricing increases, more so than like
46. 1:26actual new patients coming in.
47. 1:28>> And what's uh where where do you Where
48. 1:30do you reside? Where's your business
49. 1:31located?
50. 1:32>> Um we're north of Dallas in uh McKinney,
51. 1:35Texas.
52. 1:35>> Okay, that's a good location.
53. 1:37>> Mhm. Yeah, there's a lot of people, tons
54. 1:39of people, tons of uh
55. 1:40tons of pets as well.
56. 1:42>> Tons of pets.
57. 1:44>> Okay. So, what did you do the years
58. 1:45prior from Essentially, right now you
59. 1:47want to see how do I grow faster and not
60. 1:50be bored?
61. 1:52>> I I want to I want to feel a little bit
62. 1:54more fulfilled. Like, we're you know,
63. 1:55I'm making, you know, a good amount of
64. 1:57money, more than it is an associate, but
65. 1:59I want to do more. I want to build
66. 2:01something very special. I want to help
67. 2:03uh pets. I mean, honestly, I've always
68. 2:05wanted to nationwide, but I figured out
69. 2:07how hard this was with my single
70. 2:08location. So, I kind of scaled back my
71. 2:10vision a little bit after that.
72. 2:12>> Oh, let's not do that.
73. 2:13>> Yeah.
74. 2:14>> This is just a step, man. There's a lot
75. 2:16of steps.
76. 2:17>> yeah, you've already got you've already
77. 2:18put all the years into this. Like, I
78. 2:20don't think that's unreasonable.
79. 2:21>> Yeah.
80. 2:23Um so, I, you know,
81. 2:25whatever path would help me help more
82. 2:29pets, and again, obviously, be a little
83. 2:31bit better off financially and spend
84. 2:32time with my family is where I want to
85. 2:34go, but I'm fine, you know, sticking to
86. 2:36it, seeing as many pets as I can myself
87. 2:39um to not put myself in a bad spot to
88. 2:41set that up for success.
89. 2:42>> Okay, so I have a couple questions. One,
90. 2:44are you the primary
91. 2:46What do you call your caregiver?
92. 2:48>> Yes, so I'm the only doctor. I have one
93. 2:50receptionist and two technicians.
94. 2:52>> And then, how many days per week hours
95. 2:54are you working? How many patients are
96. 2:55you seeing?
97. 2:56>> Um so, we see on average about 16
98. 2:58patients a day. Um and that's Monday
99. 3:02through Friday. Fridays are half days
100. 3:03right now.
101. 3:05>> Okay, so how many hours do you work a
102. 3:06day?
103. 3:07>> Uh it's it comes out to about 36, maybe
104. 3:0940.
105. 3:11>> Okay.
106. 3:13Um next question.
107. 3:16How Okay, so you have 16 patients per
108. 3:18day.
109. 3:19>> Mhm.
110. 3:20>> And then, how do you get those patients?
111. 3:22>> Most like well over 60% of it is
112. 3:25absolutely referral, just word of mouth.
113. 3:28People seem to be really happy with us,
114. 3:30which is great. It just seems to like
115. 3:32take a while for those people to come
116. 3:34in, unless they have an issue or they,
117. 3:36you know, they get a reminder that
118. 3:38they're due for something, and then they
119. 3:39remember us.
120. 3:40>> Mhm.
121. 3:41>> Well, how actively are you like how what
122. 3:44kind of um
123. 3:45cadence are you basically nurturing them
124. 3:48on to like do Do them on a maintenance
125. 3:50plan right now?
126. 3:52>> So, there there's no like membership
127. 3:54plan. It's basically kind of like pay as
128. 3:57you go. So, they come in, they pay a
129. 3:59they pay a consult fee. But, we do have
130. 4:01like reminders for core things like
131. 4:04vaccines, fecals, blood work, if their
132. 4:07cat has like kidney disease, like
133. 4:08reminders to come in for those checkups.
134. 4:10But, they're only sent out um 2 months
135. 4:13before it's due, um 2 weeks before, and
136. 4:16then like 2 weeks after they've missed
137. 4:18their appointment. That's all we do.
138. 4:20>> I like that.
139. 4:21>> All right, we have a plan.
140. 4:23>> [snorts]
141. 4:23>> So, so there's a there's the 101 version
142. 4:26and there's the 201 version, right? So,
143. 4:28the 101 version is something that we
144. 4:29call BAMFAM, all right, which is book a
145. 4:31meeting from a meeting, which that no
146. 4:33one ever leaves
147. 4:37without booking a meeting. So, let's say
148. 4:38they're you know, they they their kidney
149. 4:40got fixed today, great. Well, we're
150. 4:42going to want to book the next meeting
151. 4:43for 3 months from now or or 6 months
152. 4:45from now. So, you just look at the the
153. 4:46patient or the pet, and you look at
154. 4:48their file, and you see which one of the
155. 4:49next thing that's due, and then you just
156. 4:51book that meeting. That is the
157. 4:52requirement.
158. 4:54>> Okay. Yeah, I mean
159. 4:55>> That's how it works. As simple as simple
160. 4:57as that, literally. No one leaves
161. 4:59without already knowing when they're
162. 5:00coming back.
163. 5:01>> Okay. We can do that.
164. 5:02>> Done.
165. 5:04>> Okay. Yeah, I mean we literally don't do
166. 5:06that at all. We just I kind of I know
167. 5:08>> probably double your business. I'm not
168. 5:09even joking. Like that alone.
169. 5:11>> Yeah.
170. 5:11No, we don't we don't
171. 5:14I just started sending like emails to
172. 5:17our existing clients. So, I mean we have
173. 5:18about 2,000 clients right now.
174. 5:21And I don't I don't do any I don't
175. 5:22nurture them. They just kind of come in.
176. 5:24That's how we make our money.
177. 5:25>> So, is it primarily like you and the
178. 5:27receptionist that run the business?
179. 5:29>> Um yeah. I mean really, yeah. The techs
180. 5:32just kind of help me go room to room.
181. 5:35Um but they I mean we all kind of answer
182. 5:36phones. Like I'm still answering phones,
183. 5:37to be honest. Um
184. 5:40but yeah, it's mostly just us.
185. 5:45>> I mean I think the first focus is the
186. 5:46profitability piece, getting more of
187. 5:48them coming back in and rebooking.
188. 5:49>> Mhm.
189. 5:50>> I think the second piece is having the
190. 5:51right people so that you could scale it
191. 5:52in the future if you want to.
192. 5:55But you would have to first get yourself
193. 5:56out of this location.
194. 5:58>> Out of this location?
195. 6:00>> Well, how are we going to
196. 6:00>> So, we got to increase cash flow, right?
197. 6:02>> Increase cash flow.
198. 6:03>> Mhm.
199. 6:03>> And then we say, "Okay, how do we bring
200. 6:04in another practitioner?"
201. 6:06>> Mhm.
202. 6:06>> And then after that we say, "Okay,
203. 6:09if we can get ourselves out of this one,
204. 6:10we can scale others."
205. 6:11>> Okay, real quick. How much um
206. 6:14How accurate are you right now? Are you
207. 6:15seeing all the pets?
208. 6:18>> I mean, I I could easily do
209. 6:211.5 myself, if not I mean, I'm going to
210. 6:24be a little, you know, I'm probably
211. 6:26closer to 1.8 million, I would say
212. 6:27myself.
213. 6:29>> But why are the margins so low?
214. 6:33>> Um I'll be honest with you, they were
215. 6:35even worse last year. This is all for me
216. 6:38increasing my prices mostly.
217. 6:41>> Like what are the costs? Do you have a
218. 6:42secretary and you've got a you've got an
219. 6:43office?
220. 6:45>> Yeah, I mean,
221. 6:47my rent seems to be a little high, but
222. 6:48it's not like killing us.
223. 6:50>> What's your rent?
224. 6:51>> Um we spend it's 8,500 a month.
225. 6:54>> I mean, it's a little high, but okay,
226. 6:56fine. But like but but that's not that's
227. 6:57not eating up
228. 7:00>> Uh so, each staff member gets between 20
229. 7:02to $23 an hour.
230. 7:04>> Okay.
231. 7:05Well, then where's the cost coming from?
232. 7:07That's a huge I mean
233. 7:08>> The other 40% clients that aren't
234. 7:09referral, are you paying to get those
235. 7:11ones?
236. 7:12>> Yeah, well, I am, but those I only spend
237. 7:15$4,000 a month on ads right now.
238. 7:18>> Then where's the money going?
239. 7:21>> Well, I mean, we have we we have um
240. 7:25profit. I mean, we have around, you
241. 7:27know, if I pay myself 100,000, we have
242. 7:30around 200,000 left over. I just I don't
243. 7:32do anything with it. I don't know what
244. 7:33to do with it.
245. 7:35>> Okay.
246. 7:37But you're running 30% margins
247. 7:38figuratively, right? If we added in your
248. 7:40owner pay.
249. 7:41>> Yeah, yeah.
250. 7:42>> Still seems a little low.
251. 7:44>> Okay.
252. 7:45>> Given there's no like you're the one
253. 7:46doing the service. That's the thing.
254. 7:48>> What's the I think the pricing is what
255. 7:50we need
256. 7:50>> Well, yeah, no.
257. 7:50>> you raised it already, but
258. 7:51>> Probably needs to raise it again.
259. 7:52>> Yeah, what what did you raise it from,
260. 7:54too?
261. 7:55>> I I raised it so like let's say, you
262. 7:57know,
263. 7:58my exams I really didn't raise. My exams
264. 8:00are $95.
265. 8:02Um but most of my other costs I raised
266. 8:05them close to 100% and no one cared. No
267. 8:08one said anything. So, it tells me I'm
268. 8:10probably I'm probably still too low.
269. 8:12>> Yeah.
270. 8:13Have you
271. 8:13>> Well, our our average our average
272. 8:15transaction, like each each transaction
273. 8:17is about 250.
274. 8:19>> Yeah.
275. 8:20So, let me let me just give you this.
276. 8:22So, have you read Did you get my that
277. 8:24email is a Mosey Minute email where I
278. 8:25talked about pricing versus close rates?
279. 8:28>> Yes.
280. 8:29>> So, I'm guessing your close rates are
281. 8:30basically 100%.
282. 8:32>> They're They're pretty good.
283. 8:33>> Right. So, you like and you probably saw
284. 8:35that if you're over 80% you've got like
285. 8:36a triple.
286. 8:38>> Yeah.
287. 8:38>> Yeah, so I mean you you saw you saw
288. 8:40double and nothing changed. So, that
289. 8:42like that pricing guide is pretty
290. 8:43accurate rule of thumb. And if you also
291. 8:45doubled and still saw no change, then
292. 8:47the double still double or triple still
293. 8:49remains. So, you might be able to get to
294. 8:51250 you know, sorry to to to 500 600
295. 8:55dollars per
296. 8:57and you still probably have room there.
297. 8:59Because right now
298. 9:00we fix So, like in order of operations
299. 9:02it's like let's fix pricing even though
300. 9:04you didn't fix it. It's like we need to
301. 9:05increase pricing still.
302. 9:07With the increased pricing we need to
303. 9:09bring somebody else into buy your time.
304. 9:10With the extra person and now added
305. 9:12capacity then you need to start emailing
306. 9:14your list on a regular basis. And from
307. 9:16this point going forward you institute
308. 9:17bam fam as a way of life. No one leaves
309. 9:19the office without knowing when they
310. 9:20come back in. If you just do that,
311. 9:23you're good.
312. 9:24>> Okay.
313. 9:25>> Cool.
314. 9:25>> Yeah. No, I like that plan. I'm I'm
315. 9:27going to sweat a little bit about the
316. 9:28price increase again, but I'll do it
317. 9:30because you told me to.
318. 9:30>> Dude, the worst case they say no, man.
319. 9:32>> I And that's what I expected everyone to
320. 9:34say no last time and no one cared.
321. 9:36>> No one cares. Dude, these are kids.
322. 9:38Don't worry about it.
323. 9:38>> Yeah.
324. 9:39>> Yeah, I don't think you should worry
325. 9:40about it. Also, McKinney, Texas is
326. 9:41pretty good in terms of average income
327. 9:43and such. It's on the higher end, so.
328. 9:44>> Yeah, yeah, people I mean people will
329. 9:46spend what I consider a large amount of
330. 9:48money on their pets, which is great. You
331. 9:49know, it allows me to practice the gold
332. 9:51standard, which I like doing. I don't
333. 9:54try to play the low-cost game, but maybe
334. 9:56unintentionally I am a little bit lower
335. 9:57cost. Like people do make comments that
336. 9:59oh, you're cheaper than so-and-so down
337. 10:00there.
338. 10:01>> Yeah, you don't want to You don't want
339. 10:02to be known for that.
340. 10:03>> [laughter]
341. 10:03>> No, I don't.
342. 10:04>> No. You're in a service business, man.
343. 10:06Like service businesses, especially with
344. 10:08humans, it's like you pretty much only
345. 10:09have one play, which is build a brand
346. 10:11and continue to charge more. Like if you
347. 10:13think about a meta concept of service
348. 10:14businesses in general, your prices
349. 10:16should really only get go one way, and
350. 10:18you can measure how much you've
351. 10:20succeeded as a service business by how
352. 10:22high your prices are. Because if you
353. 10:24succeed as a service business and you do
354. 10:26a good job long enough, then you will
355. 10:27always have more demand than you have
356. 10:28supply. And if that is the case, then
357. 10:30you continue to raise your price.
358. 10:32And so that then reinforces the brand,
359. 10:34which brings better people who spend
360. 10:35more and you do a good job, you get a
361. 10:36better reputation, which reinforces the
362. 10:38brand. And so that's the virtuous brand
363. 10:40and pricing loop. And so you can measure
364. 10:42how advanced you are as a business owner
365. 10:43by the prices you're able to charge
366. 10:45because of how good you are at the
367. 10:46service.
368. 10:47>> Right.
369. 10:48>> I feel like you're really good, and it's
370. 10:49just a literal matter of like
371. 10:51self-esteem.
372. 10:51>> Totally.
373. 10:52>> And confidence.
374. 10:52>> Just charge more, man.
375. 10:54>> No, it is. I I struggle with it because
376. 10:56I never want you know, people to feel
377. 10:57like I'm taking advantage, but like I I
378. 10:59do consider us to be top quality. Like
379. 11:02people love us when they find us.
380. 11:03>> advantage. You only Go ahead. Go ahead.
381. 11:06>> You take the money and then you invest
382. 11:08it in getting better talent,
383. 11:09>> Better equipment, yeah.
384. 11:10>> better training. Like we talked about
385. 11:12this yesterday, me and Sharan, but like
386. 11:14that's how the flywheel works. If you
387. 11:15want to have a high-quality business,
388. 11:17you have to make a lot of profit because
389. 11:19if you don't, then you can't invest to
390. 11:20have that high-quality business.
391. 11:22>> Right. And that And that And I do I have
392. 11:24started to understand that. The only way
393. 11:26for me to help more pets and do what I
394. 11:27want is to be profitable and continue to
395. 11:30>> Yes. If you want to go national, you
396. 11:31need Yeah, need to have Yeah, if you
397. 11:33it's interesting cuz it's it's almost
398. 11:35counterintuitive cuz like
399. 11:37the people who really need to raise
400. 11:38their prices the most are like your type
401. 11:40of person. They're the usually the ones
402. 11:42that are like the most hesitant. Yeah,
403. 11:43it's the Laylas, right?
404. 11:45Like when I met Layla, I'll just say it
405. 11:47just so you feel a little better about
406. 11:47this. Like it this is totally learnable
407. 11:50and this is this is a this is a
408. 11:51perspective on the world. And when I met
409. 11:53Layla, she was like, "I just want
410. 11:55everyone to be healthy." Cuz she was we
411. 11:56were in fitness, right? She's like, "I
412. 11:57just want to help everyone." And I was
413. 11:59like, "Don't you think you'd be able to
414. 12:00help more people if you actually made a
415. 12:02profit?"
416. 12:03And I would just say that our life is a
417. 12:04living testimony of that.
418. 12:06>> Yeah, absolutely.
419. 12:08>> We couldn't make this content unless we
420. 12:09had businesses that make money.
421. 12:11We wouldn't have time. We wouldn't have
422. 12:12the resources.
423. 12:14>> Yeah,
424. 12:15okay.
425. 12:16>> Cool?
426. 12:16>> Well, I can do I can do all these
427. 12:17things, yeah.
428. 12:18>> All right. Well, you got you have the
429. 12:19four-part plan. We're going to increase
430. 12:21prices, with the extra cash flow, hire
431. 12:23somebody with the extra time that you
432. 12:24get back from that person, you're going
433. 12:26to nurture the leads and put up
434. 12:27basically the the fast cash playbook. We
435. 12:30have the cash calendar system in there.
436. 12:32That plus the LTV playbook will be the
437. 12:34two things that I'd want you to focus on
438. 12:37to install in the business as the first
439. 12:38two things.
440. 12:40And then after that
441. 12:42um and BAMFAM is like you can do that
442. 12:44tomorrow. Like that that's not like an
443. 12:45option. Like do that tomorrow. So, those
444. 12:46are the three actions and then BAMFAM is
445. 12:48just like assumed, okay?
446. 12:50>> Okay. Yeah, no. I I can do that. I
447. 12:52appreciate it.
448. 12:53>> Rock and roll, dude. And the pricing uh
449. 12:54the pricing playbook will help you just
450. 12:56kind of with some of the messaging
451. 12:56around how to raise the price. Cool?
452. 12:58>> Yeah, I'm excited to get that. I
453. 13:00appreciate it.
454. 13:00>> You bet, man. Rock and roll.
455. 13:02>> the hard work. I had uh 18 pets growing
456. 13:04up, so I love animals.
457. 13:06>> Yeah, you That's crazy. I I have about
458. 13:0818 right now. You You and my wife would
459. 13:10get along well.
460. 13:11>> Great, man. I'm happy to hear it.
461. 13:13>> Yeah.
462. 13:13>> All right, rock and roll. Thanks, man.
463. 13:15>> Okay.
464. 13:16>> Thank you for donating books.
465. 13:18All right, see you.
466. 13:19>> Bye-bye.
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