"My Clients Are Too Small to Pay Me. Now What?"

0:00Hey, Alex. >> Yep. >> So, I run a business that's much like GymLaunch for a meal prep businesses particularly. And um >> For meal prep? >> For meal prep, yeah. I understand I understand that you run a meal prep business or I did it for a short while. I fell into it by accident cuz I was helping out a family member. I scaled it to a million in 3 years. But, our LTV to CAC ratio is like 3:1. So, I'm wondering if I should just switch the avatar.

0:27>> Your LTV to CAC? >> Yeah, LTV to CAC. So, I'm wondering if I should apply my marketing skills for another avatar or just push. Um and also we're not finding a lot of meal prep businesses that are looking to scale up. We're finding majority that just are looking to start. Um and we get them to like 20,000 a month and they can only pay us like so much. >> Yeah. Um meal prep's interesting. It's kind of like a bell curve where you have a lot of because if you're small in the beginning, you can run decent margins.

0:56And then as you get into the middle, everything becomes really tough because you have a lot more fixed costs in the business and you don't have real economies of scale. And then you get to the very end, well, still no one's really proven that it can be profitable. Um >> Like >> Blue Apron and uh what was the big one that went out, too? >> Factor meals? >> Yeah, HelloFresh, yeah. So, there've been there've been plenty. I mean, I had a big friend of mine who he's only lost money every year he's been in business um doing the same thing. And as soon as I got into it, I was like, "Oh, yeah, this sucks." Um And so

1:27>> So, I mean, just to add to that, it's mostly for like chefs that are just starting out. So, there's private chefs, there's people that do food trucks, and those businesses are even worse >> Right. >> in my opinion than a meal prep cuz you can get to 20K per month, have a commercial >> food trucks better than meal prep, personally. >> They rent the kitchen for like once a once a week. For them, it's like 2K profit a week. >> Yeah. >> It could be a huge deal for them. >> Yeah. >> Um so, should I continue this or not? >> So, I'll say this. Uh I So, I actually, believe it or not, I don't hate your business as much as you do. Um I think I If I were If I were in your space, what I would actually look a lot cuz the thing that's interesting with meal prep is it's so easy to generate demand because everybody would like someone to take care of their food for them. And so then the only real question is price, right? And if you have any kind of unique things, but still you can I'm sure you have all the systems around like the best things are. I'm not even going to get into that. Um I actually think this is one of those rare times where I would say going down market makes sense.

2:24So going to people who want to start meal prep? >> Right. >> Because by doing that whenever someone starts a business everything's new, which means that you can get everybody set up the same way, same systems. Um they can use all your affiliate products in terms of gear and software, and you can get a piece of all of that stuff. And it's a business where like it's not complicated to both understand and get customers for. The hard part in this business is scaling it, but if these people don't want to scale it, they've kind of like satisfied themselves. And so somebody who does 20,000 a month makes whatever you said.

3:00I don't know. What do they make in profit? >> maybe. >> A profit a month? >> Four to five, yeah. >> Okay, cool. And so they get to cook all day and not have a corporate job, which they're pretty happy about. >> They actually work once a week. That's the bonus, right? Cuz there's only one production day. >> What are you talking about? It's a great deal. I think it's a I think it's a mega opportunity. Like if you said >> work two days a week, make 60 grand a year take home, cooking food for people you like. >> Yeah. >> I think a lot of people would be interested in that.

3:27>> That is right. And we have it completely done for you. We say we do everything but the cooking. Um but it's done for you, so our margins are kind of suffering. Maybe I should just do it done with you or do it yourself. >> Well, um I mean, there's a mega play here, which is that you get like 5,000 of these people, and then you can map them all, and then you can create a national company off of many small operators, which would be kind kind if you unified kitchen and branding. But, um that's, you know, a little down the road.

3:55>> I mean, we kind of do that cuz we found only set menus to work. >> All right, just so I don't talk to you for the whole time. What's the question? >> Um I was going to I was wondering if I have the wrong customer. >> No, I don't think so. I mean, I think what we said, I think going after beginners in the It's not often that I say this, but I do think that with this particular business, I think it makes sense. >> Cool. >> And there's a ton of people who would do it. If If you're not making as much money as you want, you're mispriced.

4:22And that's whatever problem for. So, you just have to fix that. If you are a business owner and you are not growing as fast as you like, I'd like to give you a free gift. So, my team and I put together the 100 million dollar scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly, where they got stuck and how they got past it. And so, we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information and if you want us to actually help you de-confine the business and you're trying to scale, we'd love to help you out. On the thank you page, you can just book a call with my team and we will look at the business, see if we can help and if we can, we'll fly you out to Vegas and we'll do this in person live.