Helping a Structural Engineering Firm Scale to $20M

0:00Unternehmer/Gast Name is Rens. I sell structural engineering services, so I design commercial large scale commercial real estate buildings for commercial real estate developers and architects. Do 5.2 million in revenue, trailing 12 months closed revenue predicts next year is about 8 million. Want to do 20 million in 2027. >> Cool. >> Uh learned a lot from the team and most of which is my data isn't organized properly for me to understand my appropriate CAC and LTV. >> Yeah.

0:25>> But in our business high reoccurring, right? They do a lot, but it's cyclical. The fun things interesting. Um I feel like a certain amount of my marketing is just necessary to nurture my existing clients and has all these other So when I go into like CAC to LTV to figure out my slot machine on where to allocate capital, that's where I get confusing. Just curious if you've had experience with that. >> loop all of that all that nurture into CAC.

0:49>> And then what about LTV for new customers? You just call that you look at that as your CAC versus your new LTV? >> So CAC's CAC. >> Yep. >> So think about it this way. So every month you spend X amount of money in general. So forget about the fact that like some of this is nurture for customers who've been here before. You pay this amount of money every single month that goes into advertising and sales to acquire customers. So all of that blended together and if you have more lumpy revenue, which I'm guessing you do, uh you just expand the time horizon, so you look at trailing six or trailing 12 and say, "Okay, we spent just let's simple math.

1:23We spent a million dollars on marketing and sales this year, whatever between commissions and uh advertising. Okay. Over that year we acquired call it 50 customers. Okay, so our CAC is $20,000. So the longer the time horizon is, also by the way, the more accurate it tends to be. So if you just zoom it out cuz it's like if I just said like, "What's your CAC today?" It's you know, it's kind of like that this volatility thing. It's like, "Our CAC today is terrible."

1:50Alex And then tomorrow it's amazing, right? And so the the the the further out you blend it, the more accurate it'll will Um but in terms of uh lifetime gross profit or LTV, that one there's a lot of different ways to calculate it. I tend to calculate it in the ways that are underestimated so that I like I want to overestimate CAC and I want to underestimate LTV. If I do that and I still have my good metrics, then I'm kind of like in safety zone on both. So like I'll do fully loaded CAC, which is like including commissions and the software and the media spend and the nurture and all that fully loaded. And then LTV I'll say, "Okay, if I wanted to have the lowest LTV, I would just look at same thing, all customers, what did they spend historically?" So even if you look at all the way from it's been 5 years whatever you've been in business, what was revenue? How many customers do I have? And you just do total revenue over 5 years divided by total number of customers acquired. And then you're like, "Wait, but some of these customers are only 6 months old." It's going to underestimate it, but then you still have a that will be the most it will be the ugliest version of that number, but if that's baseline, then you're going to only go up from there.

2:52Does that make sense? >> It does. >> If you're business owner and you're not growing as fast as you'd like, I'd like to give you a free gift. So my team and I put together the $100 million 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 into 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.

3:31And 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.