You're Fixing the Wrong Problem. You Need More Customers.

0:00All right. Corey Reed, his business is Altair Capital Group. It's lending. >> Okay. >> Revenue is 3 million, profit is 1.9 million. We're going to give Corey a call. >> All right. Corey, let's rock and roll. >> Hello. >> Hey Corey, what's up, man? >> Hey, what's going on? >> What's revenue? What's the problem? How can we help?

0:27>> So, rev you know, um uh problem that I would >> What What did you say revenue was? >> 3 million. >> 3 million? Okay. >> Yeah. So, problem is in our business, uh sometimes, or actually a lot of the time, there might not be anything that we could sell them necessarily today. We We work in private lending for investment property. And so, these people, often times, they are, you know, highly qualified. They're They're doing deals. Uh they've done deals.

1:00Maybe they just don't have a property that they need financing for, like when that initial call happens. And so, it makes that initial, like framework of that call, difficult for us. And it turns the business into, like a highly nurture-driven business in terms of staying relevant, so that at the right time, but my question is, like specifically, like kind of like developing that closing framework, like at least to be able to have, like a solid framework for for that initial call. Uh so that we can have the best chance, you know, moving forward, um in in case there's not something that we can, you know, deliver on for them in that initial call.

1:39>> So, I think big picture, you need a reason why to move forward today, to create some sort of activation point within the relationship, right? >> E- Exactly. >> Right. So, I'll tell you something. So, I'm actually a member of a platform that does uh M&A for like uh 1 million to 100 million dollar checks. And one of the things that that platform did that worked, I mean, pretty good for me was it's just 10 grand a year and they basically just pre-qualified and vetted all my stuff so that they can they can fund me way faster.

2:09And so by doing that, they could basically transition me from being a prospect to a customer and then whenever I reach out, they are the first people I'm thinking about because I already have like basically a $10,000 a year subscription. >> Mhm. >> Right. So, the question is what other things would someone be willing to subscribe to that would add value to them? Now, obviously for them it's going to be the likelihood of getting completed, uh speed of of the lending. And so it's like, can we do more pre-diligence? Can we do like, how much of this can we take up so that we can provide more value to them? Cuz fundamentally, if you think about value from the value equation, right? You've got how can I make it risk-free? How can I make it fast? How can I make it easy?

2:43So, those are your vectors for value creation. And so we want to do that as the core elements of the offer that we get them to say yes to today if we're trying to transact in some way to activate them. Now, maybe activation for you guys might be like, you might find out it's just meeting them in person. Right? So, like if you if it's a cash flow issue, then we'd want to have some sort of transaction. If it's not a cash flow thing and you just need to have some sort of higher investment, for some of these guys just meeting them in person might be more meaningful than than paying $10,000, right? They're actually taking the time.

3:14>> Yeah, I mean, essentially all we've been doing in that call is is essentially like gathering data, asking questions, and then delivering information about us, and then effectively from there trying to kind of stay top of mind in in outside communication so that when they have an investment property that they are looking to acquire, you know, we can then like step in and be the financing arm for them on that. Um but it just it just can become uh difficult, I I guess, uh especially if we're not saying or doing the right things in that sort of opening appointment where we're, you know, introducing ourselves and then vice versa.

3:55>> [clears throat] >> So, are you opposed to doing the model where you essentially have people pay to get pre-qualified and already have done diligence on their company? >> No, but it's uh it's it's unconventional in the sense that like uh >> Well, conventional is that you're having the problems that you're having right now, right? >> No, no. I I I don't mean like your strategy's unconventional. I just mean like in terms of our like lending process in the sense that uh I guess like in a a a conventional loan scenario like where if you were going to buy like a personal house, you could pre-qualify somebody financially credit worthy and then

4:33>> Right. And you have the as deal by deal. Yeah, I get it. >> Yeah, for us it's very much asset based. So, as much as we we would want to be able to pre-qualify like the person individually, if they come to us with a a deal that's not financeable, then, you know, we're we're kind of stuck in the mud there. >> Is there any way that you could give them essentially like an estimate on their pre-qualification based on the kind of asset they're going to bring to you? >> Yeah, absolutely. I mean, we can get very like granular in terms of like the types of assets that we're willing to finance and, you know, all of the specifics with regard to that. Yeah, we we can definitely get pretty granular on that.

5:09>> I mean, yeah. I would do that. >> Mhm. Well, part of the things that I'll say this, man, is that like it may be a feature not a bug, which sometimes happens within businesses, right? Like trying to like So, I'll say this. This goes for anyone. There's a lot of times where you spend inordinate amounts of mental effort trying to solve a problem that is unsolvable. Like so, I'll give you an example. So, if I were to if I were to cater to, you know, people who want to start a business and I had a subscription software, right? I should expect that I'm never going to get to 100% retention. Why? It's structural. It's a feature not a bug because there's just so many people who are, you know, watch burners or people who are interested in in business but, you know, don't have the commitment, don't have the consistency, haven't really gotten going yet. That it would be ridiculous like that's about them not about the product, right? And so Shopify doesn't beat itself up because they only keep 60% of customers every year. They just know that a certain percent will eventually succeed and that's where they actually make their money, right? And so to the same degree there are structural things within the business that you're in which is that you have to um base your uh you have to base your lending on the on the on the underlying asset, right?

6:17And so if I'm thinking like I'll say this, I think the original question that you started the conversation with might have been the wrong question for you to actually scale. Because it's it's unlikely that that's even the limitation of the business. Because fundamentally right now we need to get more people in front of you and then is the is the true like do you have cash flow issues right now? Are you like struggling to pay bills? >> No, not not at all. >> Okay. So then So then there's basically there's no advantage to you convert increasing the cash conversion cycle right now. It it doesn't matter. So what really needs to happen which is completely outside of the original question frame is how do we increase the promotional activities that get people to find out about who you are so you can do more deals. And is there some sort of retention mechanism which I would cover in the delivery systems that we talk about um and LTV of how can we can put this in on a consistent basis uh to reactivate and re-engage people on a more uh on a cadence.

7:10>> Got it. Right. >> Heard? Cuz that's where the two levers are going to be in the business that are also going to be allowed to scale more so than this what I would just consider an inconvenience or fact of life for the business. >> Right. Right. >> I mean it's kind of the same with like, you know, we talked yesterday about um when Alex, you know, quote interviewed me for the money model for acquisition.com. It's like I'm not going to say like, you know what? I really wish that I didn't have to spend so much time and effort to get someone to want to be a portfolio company. It's like, okay, actually how can we just get paid more for that time and effort? And how can we make it easier? I think it's the same with this situation which is you're not trying to get rid of it, you're just trying to make it more ROI positive for you.

7:46But like what Alex said, which is like, but is that the constraint of the business? And if it's not, then it's like, would you get a higher return just getting more customers? >> Yeah. Right. Right. Yeah, I guess I was just viewing it from like a like a a KPI standpoint it like seemed like it would be like on the lower end in terms of like our ability to just like convert these leads into paying customers. And so I I guess that was the only reason why I was trying to address it was that I felt like it was a a bottleneck in that sense, but may maybe it's not.

8:14>> No, I don't think so, man. Well, maybe that was the most value I can do is just reallocate your resources to the thing that's going to get you the highest return. This isn't the thing that's going to have the highest return. >> Yeah, it's also like we've talked to a lot of businesses in lending. Like this is fairly like it's just what it is. >> That's not the thing you need though. You need more You need more deal flow. >> Right. Right. Of course, yeah. >> Heard. All right, I appreciate you, man. >> Yeah, thank you guys. Appreciate you. >> You bet. Donate some books. >> I got some I am.

8:40>> Oh, thank you, man. I appreciate that. And thank you on behalf of the other 200 entrepreneurs that are getting these books. So, thank you. >> Absolutely. It'll be a lot more than 200, man. >> Okay. We'll rock and roll them, man. Thank you so much. >> Thank you. >> Appreciate you, guys. >> Appreciate you. >> Appreciate you. >> If you like this video and you're a business owner who wants to break through your current revenue ceiling, I just did every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap that I've used to go from zero to one, zero to 10, and zero to 100 plus. And so you can click here and you can check it out.

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