You Have to Remove Before You Can Add

0:01Hey Alex, I'm Michael. Nice to meet you. >> What's up, Michael? How's it going, man? >> Doing well. So, I run a consulting firm here in Vegas that implements project management software for enterprise ops and PMO teams >> Okay. >> with Fortune 500 clients. Uh we're at 1.4 million tracking towards 2 million. We're demand constrained because almost all of our pipeline comes through software vendor referrals and a subcontractor relationship. However, I've built some serious uh AI enablement in the business over the last 12 to 18 months and genuinely feel I'm ahead of most consultants in the space. My concern is the avatar's fuzzy, but I'm a top 1% architect of the software.

0:40You're going to roast me for it, but considering a brand new business with my wife with the crystal clear avatar in healthcare. And so my question is, how do I know if a clear avatar is worth walking away from a business I think I already know how to run. >> Um I'm I'm okay with you burning the boats. I am less okay with the trying to serve two masters or ride two horses with one ass. Um and so if you really, really feel confident about it, then I would encourage you to go all in.

1:09Um and I think the way to do that would be just get your first customer from the new stream from a channel that is reliable. And so that would mean like it's either going to be an outbound method uh or an ad space motion that you're probably going to run. It could be an affiliate motion um as well if you like know two or three call it influencers or coaches in the space who help healthcare businesses. That'd be a great first place to go if you wanted to have like a speed to money. Um but I think you'd have to pick one of those three um business models. I understand the difficulty of the enterprise play.

1:40It's mostly just that the sales cycle's so long. I'm going to guess, how many clients do you have right now? >> About 12. >> Yeah, I think you're also just wildly under priced um on the enterprise side. So it makes sense that it It makes sense that you wouldn't want to charge SMB prices and go through a Fortune 500 sales process. Does that make sense? >> Yeah, for sure. Um, part of it is we when we go direct, we have like a killer offer model thanks to your books, and like that does 83% margins, but because of the referral subcontractor relationship, we're capped at hourly, which is killing us to like 17% margin.

2:18So, we're trying to move away from it. >> Yeah, that's fine. >> in Yeah, the avatar in that space though is like, do you use the software? Yes, cool. No, okay, let me explain what it is. It's not really uh industry-vertical based, which is our our struggle. >> Dude, I'm I'm all I'm all good with the healthcare thing. My my biggest thing on that side is you should be able to directly go acquire a customer. So, what size healthcare providers are you looking for?

2:45>> I'd say it's probably private practice >> [clears throat] >> physicians. >> I think you'll I think you'll print. It's very easy to get to sell to those customers. Like, almost every motion works for them because they're business owners, they typically prefer done-for-you solutions because they don't like doing things besides their practice, and they're they're very hours-constrained because they literally like make money by trading their time. Um, and so but it's it's TLDR, I'm good with the move. My my only counsel here is that you go all in on it if you really feel confident. So, do you have savings saved up?

3:15>> We do. So, part of it is we have like multi-year contracts in the current business, and some of it is just like pass-through reseller transactions that we do. >> Understood. >> So, we do have a cushion, so I guess like the follow-up would be what would because it's a time investment, we have two little kids, and just making sure that we're keeping the current business afloat enough while the two kind of, you know, switch off essentially from the primary. >> Well, so the afloat enough part is the part that I don't like, which is what are the things that you have of that business are passive versus what are the things that are still active?

3:48I would say be willing to cut out the active to the degree you can. and also those contracts are ongoing, but you can cancel them on your side whenever you want. And so, it feels like the appearance of being stuck, but you could stop it whenever. Unless Did they prepay? >> Uh so, it's In most cases, it's like 3-year deals, and they pay annually. And again, part of it's through the subcontractor relationship, so we're just getting like a commission check in some of those cases.

4:14>> again, so just separate out what's the stuff that I'm doing work for, what's the stuff that I'm just being, you know, a sub, you know, over for Right On um to the degree possible. Basically, what I'm trying to go for here is I'm trying to minimize your workload. Because to say I'm going to keep this business going and then also start this other business, I think it's the recipe. Like, that is the recipe for pain and failure. Um and it's what everyone wants to do. And so, I think that if you could clear your calendar the like basically, you'll maximize the likelihood that you're going to be successful in this new endeavor if you have all your resources deployed towards it.

4:46And I'll give you a different frame on this, which is that like your downside protection of like I want to make sure I'm paying my bills might come at the expense of 2 years of growth. So, like you might be able to grow basically what would be your year two if you went all in might be your year four with the quote downside protection because of split attention. That again assumes that you're going to be successful, which might not be true because you're not going to be able to fully allocate time towards it. And so, if anything, maybe I'd prefer your wife stays behind, fully does that one, and then you can go uh and start the health care thing. But, I do not like split focus. It's just very hard to win cuz you're competing against people who are fully all in.

5:24>> Yeah, she would most likely be the brand authority. She's a nurse. She's way more impressive than I am and would be a better brand authority in in that space. I'd be more of the technical operator. >> Yeah, but you like Do you get my cuz this is what you're saying is I want to start this new thing, but I have this other thing, and this other thing is still full-time right now, but I want to add to my plate because I think this other thing's better. If you think the other thing's better, then like do the other thing.

5:51>> Yeah. No, totally makes sense. I think what's what's tough for me is that the current business just got to a place where uh we're no longer founder dependent on delivery. So, I can go focus on marketing and sales. And I think for me my biggest constraint is I need to like I don't care about earning for the next 5 to 10 years. I need to develop marketing and sales skills. >> Yeah. >> And so, what I don't want to do is make the wrong time investment gap because I'm going to have to develop those skills in the new business anyways. It's just I have to start it all over from scratch to get it to that that level.

6:23>> Yeah, I mean, you you described the cost of switching. >> Yeah. >> But it sounds like what you want is affirmation for a decision. Not a problem to solve. >> Yeah, I mean, I guess my my fear is being in the top 1% in like one technology skill set with a fuzzy avatar >> Mhm. >> is like, okay, can I overcome that avatar gap to get to 10, 20 million versus, you know what, I'm okay being a top 20, top 30% um operator with a very clear avatar that should allow us to scale a lot quicker.

6:59And again, it's really the kids is the big thing is that I don't want to make a bet where it's like, oh hey kids, it's just going to be a little bit longer for, you know, this business to take off. It just feels like starting over is a is a pretty big gamble, and I don't want that to come at the expense of my kids. >> It is a gamble. And so, you ask a question of risk, which is entirely personal. >> Yeah. >> So, like, you know, let's say I put $300 million into your account tomorrow, uh and then you say, "Hey, I'm going to put, you know, a a hundred between three different companies and sleep on the couch." I'd be like, "That's very risky." That's what Elon did.

7:34I would probably not counsel most people to do that, but that would have been then we wouldn't have SpaceX, and Tesla, and and else. And so, like, risk is entirely personal. I think that you were looking for more from certainty from a world that will give you none. Um and I wish I could just say like it's all going to be okay, but I have no idea. Um I think it makes sense that selling to an avatar that is easier to target and has a shorter sales cycle uh will be easier to acquire customers.

7:59You'll also have to deal with all of the pain in the asses of that specific avatar. >> Yeah, that all makes sense. And I I think that's the big piece I was, you know, uncertain about is the how important is clarity of the avatar to to grow a business. I think that >> Extremely. >> Yeah, but that's kind of what I figured. >> Yeah. I mean perfect world is you sell one thing to one person.

8:24Uh less than perfect is you sell one thing to lots of people. Uh worst case is you sell everything to everyone. >> Makes sense. >> So right now you sell one thing to a lot of different people. That's the fuzziness, right? >> Yeah. >> And so you're trying to transition to selling one thing to one person, which I think is a good idea. >> Yeah. Cool. Now that that's that's great. Now it's been very helpful. It's uh I I think my big fear hesitation is like I've I've been on a path and honestly it wasn't until the marketing workshop

8:54>> Yeah. >> this idea came up and it's like, "Oh, I think we might want to go all in on this." And it's like do I want to end one road to pursue another? Uh that, you know, I've already put a bunch of time and effort in. But no, this has been very helpful. >> Good. I would just I would encourage you whatever your line of comfort is, I would just go past that in terms of what you need to be willing to give up on the other one. Because again, I will say this is my final word before we get to the next caller.

9:20Um the idea that you're just going to keep this business and start another business is typically a failing formula. So you like I Here's my tactic for you. Create a plan that gets you out and monitor how many my hours you're going to have in your week by what you remove from the other side. You're not going to just be able to add. You have to remove first.

9:45So, think about everything you're going to be able to remove and then with the time that's left over, if you think that you can actually start a business and succeed, then go for it. If you still don't think you can with the amount of time that when you clearly look at how much time every single thing takes, they're going to be able to do it, then you have a decision to make, which is maybe I should just, you know, reinvest in the business that I have and see like is there world where I could get to 20 million in that business? If you sell to Fortune 500 companies, I think it's probably you could. You just aren't charging enough for that level of avatar.

10:13>> And I think last thing I'll say cuz I do want to be respectful of time is for us, we get through the Fortune 500s through subcontractor relationship, which we don't control. And it's very difficult for us to get in direct with an offer that does bring. >> Yeah, you just don't have an acquisition channel. >> Exactly. >> So, instead of starting a new business, you could just start a new acquisition channel in the business you have. That would be a different alternative.

10:39All right, appreciate you, man. Just create the plan, figure out how many hours you got, and then make the call. >> Will do. >> All right. Thanks, brother. If you like this video and you're business owner who wants to break through your current revenue ceiling, I just distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling road map 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. Again, absolutely free. And since you're business owner, I appreciate you and uh enjoy.