Without Your Free Marketing, Your Margin Is Zero — Transcript

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1. 0:00I own a premium nail salon in San
2. 0:01Antonio Texas and we do 1.5 million
3. 0:04revenue from one location. I would love
4. 0:07it to be at 4.5
5. 0:10at some point.
6. 0:12But I think this is not the goal. What's
7. 0:13stopping me is actually me.
8. 0:16I'm the person who's trying to be all
9. 0:17over the place. What I was trying to do,
10. 0:19I was trying to well, not was trying I
11. 0:20am trying to build an empire pretty much
12. 0:23an ecosystem. I'm an influencer on
13. 0:25social media and I do really well.
14. 0:28I'm trying to educate nail technician
15. 0:30build an ecosystem, right? Educate them
16. 0:32how to do what we do then help them to
17. 0:35build the brand on social media, use our
18. 0:37products, our gel line and then
19. 0:40eventually when they get to the point
20. 0:41when they are ready to open their own
21. 0:44nail salon, come to us and we will help
22. 0:47them to open a profitable nail salon. So
23. 0:50my question is
24. 0:52how can I structure and manage these
25. 0:54multiple layers without losing momentum
26. 0:57or focus?
27. 0:57>> Freedomite.
28. 0:58>> Yeah and without burning out. That's the
29. 1:01key.
30. 1:01>> Yeah. Yeah, you're doing too much.
31. 1:02>> Because one
32. 1:04someone told me that I cannot do that
33. 1:05and I have to pick one lane.
34. 1:08>> So I think everyone would be well served
35. 1:11differentiating a vision from your plan.
36. 1:16So if I were to say hey I need you to
37. 1:17defend this little area around you, you
38. 1:20could probably do it pretty okay, right?
39. 1:22Now if I said you have to make sure that
40. 1:23no one can come in this room but you got
41. 1:24to go guard that door and that door.
42. 1:27Probably be harder because you got to
43. 1:28run further and further. If I said you
44. 1:30have to make sure that no one comes in
45. 1:31the parking lot and the entire premise
46. 1:33of this building
47. 1:34it'd be a little bit harder. If I said
48. 1:35this entire block, it probably be close
49. 1:38to the edge of where you'd be able to do
50. 1:40it. Right now you're trying to protect
51. 1:42an entire block but it's just you.
52. 1:45And so you have your social media side
53. 1:48that you're doing.
54. 1:49You have education and stuff which is
55. 1:51the actual delivery of whatever you're
56. 1:52selling as your marketing machine here.
57. 1:54And then you have a brick and mortar
58. 1:55store that has clients and you know, new
59. 1:58employees and all this stuff, right? I
60. 2:00don't think the vision for what you have
61. 2:02is wrong. I do think that it would it
62. 2:03would make more sense for you to just
63. 2:04franchise the model out and then use
64. 2:06your media as the lead gen to have
65. 2:08people just directly buy franchises of
66. 2:10nail salons from you.
67. 2:12As long as you nail the model.
68. 2:14Nail it, haha.
69. 2:16>> Uh yeah, I think I think I nailed the
70. 2:18model. Um
71. 2:19>> What are your margins?
72. 2:20>> Um so we are at 25% of profit.
73. 2:23>> nailed the model.
74. 2:25>> Um so we um it's pretty hard to increase
75. 2:29the margins to make more profit.
76. 2:31>> to go buy a nail salon. I've done a
77. 2:32shitload of diligence on these. Like I I
78. 2:35don't care what the business is. You can
79. 2:37for sure make it better. Number one.
80. 2:38Number two, the reason that I'm more
81. 2:40hesitant around the model is that you're
82. 2:41an influencer. And so do a lot of people
83. 2:44come from your social media into the
84. 2:46salon?
85. 2:47>> Uh no. So Well Well, yeah. Yeah. We I
86. 2:50never I never spent uh a dime on ads uh
87. 2:53in 5 years.
88. 2:54>> prove something
89. 2:55>> to you then?
90. 2:56>> So a normal brick and mortar business
91. 2:57that runs paid ads will typically expect
92. 3:00somewhere between 10 and 30% of their
93. 3:03total revenue going towards new client
94. 3:05acquisition.
95. 3:07If your model were great,
96. 3:09then
97. 3:10sorry, if your model
98. 3:12if you didn't have your social media and
99. 3:15the model had to exist on its own, which
100. 3:16is what you're going to try and sell to
101. 3:17people, remember?
102. 3:18>> Right.
103. 3:19>> Then your margin would be zero.
104. 3:23>> Well, we are teaching nail technicians
105. 3:26how to build their own brand as well
106. 3:28because we offer
107. 3:30>> have a salon, right? That's the 1.5 1.
108. 3:32Yeah.
109. 3:33>> Yeah, but clients they come uh not
110. 3:35because they saw us only on social
111. 3:37media, of course, because of word of
112. 3:38mouth. We offer an exclusive service,
113. 3:40something that no one else offered.
114. 3:42>> But the salon, just so I'm clear, is the
115. 3:44salon a nail salon training school or is
116. 3:47the salon like you do people's nails?
117. 3:49>> We do people's nails.
118. 3:49>> Okay, yeah. I'm still I'm still I stand
119. 3:51by my first thing.
120. 3:52>> Okay.
121. 3:53>> Okay.
122. 3:54So, we have to improve the model
123. 3:56>> Mhm.
124. 3:56>> a lot actually.
125. 3:57>> Mhm.
126. 3:58>> So, we would like you need to get the
127. 3:59model to call it 30 or higher
128. 4:04and it not be dependent on your your
129. 4:06social media to get customers in.
130. 4:08And so, I would know that you had a good
131. 4:11model if you said we can't accept new
132. 4:13new
133. 4:14new nail customers because all of my
134. 4:16techs are fully staffed and I have no
135. 4:18more chairs and so I'm thinking about do
136. 4:19I expand this location or do I do some
137. 4:22virtual thing? That would be the
138. 4:23questions you'd be asking me if the
139. 4:24model was nailed.
140. 4:26>> Mhm. Well, at the moment we are fully
141. 4:28booked. My issue is
142. 4:29>> a big social media influencer, so it's
143. 4:31it's different. No, I'm being real. Like
144. 4:32>> But I was not social media influencer
145. 4:34all the time, you know.
146. 4:35>> So, were you completely booked out
147. 4:36before you social media influencer?
148. 4:38Okay. I still don't like the margins.
149. 4:42>> So, I would say about 50% goes towards
150. 4:45the labor to cover nail technicians
151. 4:47paychecks, to cover manager, to cover
152. 4:49the reception to cover the receptionist,
153. 4:51and I perfected over the time because it
154. 4:52used to be 70%.
155. 4:54Uh
156. 4:5570% of
157. 4:57uh the revenue went towards the yeah,
158. 4:59went towards the labor only. So, we were
159. 5:01not profitable. Then I perfected a
160. 5:03little bit, increased the prices twice,
161. 5:05and it got better. So, and so far it
162. 5:07works for nail technicians because they
163. 5:09make really really good money.
164. 5:10>> Yeah, and that's the only way nail
165. 5:11salons work by the way.
166. 5:12>> Mhm.
167. 5:13>> Um
168. 5:15Man, I know so much about nail salons.
169. 5:18Um
170. 5:19I I don't
171. 5:20I want to pop the hood and like get
172. 5:21really deep, but it'll be not useful to
173. 5:23anybody else here. Um
174. 5:26Long term, I think the play is this
175. 5:28needs to get more nailed. I just want to
176. 5:30keep saying nailed. Um needs to get more
177. 5:32nailed.
178. 5:33And then
179. 5:35we need it basically we need to pull you
180. 5:36completely out of it so that it truly
181. 5:38runs on its own actually. And then
182. 5:40you'll put more and more time on the
183. 5:42social media side so you can create a
184. 5:43national sales motion
185. 5:45>> Mhm.
186. 5:45>> to sell people this model.
187. 5:47>> Mhm.
188. 5:48>> and then you'll have a banger of a
189. 5:49business.
190. 5:51>> Okay.
191. 5:51>> Like you're you're like you're you're
192. 5:52you're close. You have like a couple
193. 5:54pieces that are missing, but you have a
194. 5:55very valuable infrastructure. You have
195. 5:57the right pieces. You have ultimately
196. 5:59the product.
197. 6:00>> Mhm.
198. 6:01>> Franchise sales, right?
199. 6:02Uh you have a good product and you
200. 6:05already have a demand generation
201. 6:06machine. So, you have the pieces. We
202. 6:07just need to like tweak some of these
203. 6:09things uh so that when they connect
204. 6:11money pours out in big chunks on the
205. 6:13other side.
206. 6:13>> Okay. Perfect. Thank you.
207. 6:15>> But you're you're super close though.
208. 6:16>> So, but do you think it's even possible
209. 6:18to manage like multiple like being a
210. 6:21coach, being a salon owner, and
211. 6:23>> Well, I want you just to erase the word
212. 6:24coach from your vocabulary.
213. 6:26>> Okay.
214. 6:27>> Yeah. So, fundamentally you're going to
215. 6:28be an educator online.
216. 6:29>> Mhm.
217. 6:30>> And then when people say they want to
218. 6:31work with you, you're going to say, "I
219. 6:33have this $250,000 franchise. You're
220. 6:35welcome to buy it and then I will help
221. 6:36you because I will get a percentage of
222. 6:38sales forever."
223. 6:39And then you'll be super incentivized
224. 6:41and it'll be really high quality people
225. 6:42and you'll make plenty of money. And if
226. 6:44you do that well, which does take some
227. 6:45ops,
228. 6:46>> Mhm.
229. 6:46>> um then you will have you will be able
230. 6:49to scale using other people's capital. I
231. 6:51mean, fundamentally franchising is just
232. 6:52a it's it's just a capital play so that
233. 6:55you can open up 100 locations or 1,000
234. 6:57locations over the next 10 years
235. 7:00um and build something that's really big
236. 7:01and really special. So, I think you have
237. 7:03a lot of the pieces.
238. 7:04>> Uh I was thinking about franchising, but
239. 7:06I don't know if it will work because we
240. 7:08offer extremely detailed work and it's
241. 7:10really hard to control the quality. So,
242. 7:12I feel like someone someone who runs
243. 7:15that franchise has to have exactly the
244. 7:17same knowledge in this particular
245. 7:18technique as I have, but
246. 7:20>> Training.
247. 7:21>> Train them.
248. 7:22>> And that sounds like a hard thing.
249. 7:24>> It is.
250. 7:26It is.
251. 7:26>> But do you get what I'm saying where I
252. 7:27started with?
253. 7:28>> Mhm.
254. 7:29>> Like that's your hard problem.
255. 7:30>> Okay.
256. 7:31>> And then you'll get paid a hundred
257. 7:32million dollars for solving it.
258. 7:34>> Okay.
259. 7:34>> It's solvable.
260. 7:36The good news is that you're AI proof.
261. 7:38So, like there's always pros and cons
262. 7:39with all this stuff. Like in your
263. 7:41business, I mean now if there's also
264. 7:42like robots that'll come in and start
265. 7:44doing nails and you train them once and
266. 7:46then you're good to go. Like the thing
267. 7:47is we like this is happening now just
268. 7:49for everybody. The next 5 years going to
269. 7:51be [ __ ] nuts and all of business is
270. 7:53going to change. It's going from, you
271. 7:55know, I mean imagine the internet coming
272. 7:56again, right? Like that's kind of what's
273. 7:58happening and as soon as AI reaches
274. 8:00bought like humanoid robots
275. 8:02um
276. 8:04like you you will literally train one of
277. 8:06these staff techs one time
278. 8:10and then they will do it perfect every
279. 8:11time.
280. 8:13And then your optimist you can finance
281. 8:15for $200 a month.
282. 8:17And it works 24/7.
283. 8:19>> Yeah.
284. 8:19>> So like there are changes that are going
285. 8:21to be coming down the line. I do think
286. 8:23that you being really really good at
287. 8:24training
288. 8:25um
289. 8:26nails and the reason that I was going to
290. 8:27buy the nail salon um the chain that I
291. 8:29was going to buy was because of this. So
292. 8:32if you have a service-based business,
293. 8:34they had a gamified system for getting
294. 8:36the girls up to six figures a year which
295. 8:39was huge for girls who just like didn't
296. 8:40have high school diplomas. Like they
297. 8:42were loyal as hell. The you know, they
298. 8:44took care of the customers. The
299. 8:45customers never left. They priced
300. 8:46accordingly. They were on 43% net
301. 8:48margins. They had five locations
302. 8:51um and they were doing more revenue than
303. 8:53you're doing. And so per location and
304. 8:55that was against across multiple not
305. 8:57with the founder magic with no social
306. 8:59media influence. So that's why I'm
307. 9:00saying like I know there's a whole bunch
308. 9:02more inside of your business that we can
309. 9:03make better.
310. 9:04>> Got you. Okay. Thank you so much.
311. 9:06>> If you're business owner and you're not
312. 9:08growing as fast as you'd like, I'd like
313. 9:10to give you a free gift. So my team and
314. 9:12I put together the $100 scaling road map
315. 9:14which is basically 200 hours of us
316. 9:16looking over all the portfolio companies
317. 9:17we've had and what stages of growth they
318. 9:20went through and more importantly where
319. 9:21they got stuck and how they got past it.
320. 9:24And so we broke it into these 10 stages
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323. 9:28information it'll tell you where you're
324. 9:30at and the most important part for you
325. 9:31what to do for each of functions of the
326. 9:33business across product, marketing,
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