You're the reason your margins look good.

0:00Hello, my name's Gil Karakashian. We sell window tint, paint protection film, and vehicle wraps. We're on track to do 2.2 million. I'd like to be at 100 million, and what is mainly stopping us is copy pasting and opening them up all over the country. So, the main thing we have now is our store is at 50% margin. Ed Canatota taught us how to get to 70. We're going to implement that when we get back. The main thing that we want to do is make sure we're staffing them correctly. So, when we do start opening other ones, they won't start falling apart when we're no longer there.

0:31>> Yeah. How many do you have now? >> One. >> Mhm. Okay. Um So, how can I help? >> What would be I don't want to over staff them cuz I'm I'm worried that I'm going to do that, but I'm also afraid that I'm going to under staff them. Like, I have a manager, but then I almost feel like I take care of everything. There's another owner involved. We both take care of everything.

0:58>> Yeah, man. >> And I feel like it's just going to crumble if I don't structure it correctly, and I don't really know what the first step is to start putting people in a leadership position. >> Yeah, so you have a partner? >> Yes. >> 50/50? >> Yes. >> Yeah. It's tough. Um it's tough because right now you're probably running artificially high margins because you guys are functioning as one or two GMs. >> Okay.

1:22>> And that will get factored into the business model, especially as it scales. Let me tell you what I don't want to have happen. >> Got it. >> So, you say we're going to open up the second location. You're going to go to the second location. You're going to divide and conquer with your partner. He stays there. You go forward. You try and spin this next one up. Now you're both working more time. Some of the work you were doing there uh falls a little bit to the wayside because that's what you're better at. Your partner's not as good as that, and some of the stuff that he was doing you're not doing at the new location. The new location doesn't go up quite as high as the first one did because you have more word of mouth.

1:52You've been there longer, and it doesn't reach that high water mark. In the meantime, the one that was over here goes down a little bit, and now your profitability, all of that extra decrease comes straight out of the bottom line. >> Right. >> Right? Then over here, it doesn't increase. So, you doubled your liabilities, and your profit might actually be around the same or even less. And now you're like, wait, now we have two this twice as many stores, but then you think, wait, this is now the stable model. We'll open a third. And then you open a third, and then now your split's two on three. You go from man-to-man to to zone, right? And you're running back and forth between three stores, and now profitability between the other two, because now you're not all the at any of them, starts to go down. And now all of a sudden you're like, I have three nonprofits. What the [ __ ] How did I get here? Right?

2:29That's what I don't want to have happen. >> Right. >> That's also, by the way, what happens most of the time. >> I figured. >> Yeah. So, you actually have to get to what Angelo got to with the pizza shops, which is it has to be able to grow without you. >> Mhm. >> For 6 months. >> Okay. >> That is my litmus test. And that means that you and your partner need to basically disappear, and somebody at the shop, if that does person doesn't exist, need to find them, or somebody who's already there needs to become general manager. That person should have their picture on the door. This is Johnny's shop. Johnny's the general manager here.

3:01He's treated as an owner. And basically, he'll have the or she'll have the ability to earn some percentage of profit in the business. Likely, what do you um So, you're making a million-ish, right? Um Do you have someone right now in mind who you think could become GM? >> Yeah, my manager right now. >> Okay. The deal works like this. Is you What's your partner's name?

3:28>> Nathan. >> Nathan. Where you at? What's up? So, you say, hey, this is Nathan and I's phone. >> Right. >> Um you get this percentage. This doesn't ring. That's the trade. And so, let's role play. >> Okay. >> So, if there's a leak in the ceiling, what do you do? >> Don't call me. >> Exactly. Any answer but call me is the correct answer. Okay. Right? >> Right. Right. >> It's like, let's try it again.

3:55>> [laughter] >> Right? And I mean I make the point because I like I want them to get it. It's like if this rings, that's not the trade. The trade is this doesn't ring, you make more money. >> Got it. >> If this rings, then I want the money back. >> Right. >> And so if whoever your manager is can actually run the store, now part of you guys are going to have to write down what you actually do. Because you're doing a I'll bet you a hundred small things. >> Oh, yeah. >> Right. And so you need to document that with observable behavior. What can someone see that you do that you can get someone else to do? Now once you have that list of stuff, you can start divvying it up and putting it into their daily tasks for the rest of the team plus the manager.

4:30>> Okay. >> Now if that guy can't or gal can't do it, then you might need two depending on like how the how how it's set up with shifts and I don't I don't know the inner workings. Um but we want to get that structure because like one of our big things is you nail it before we scale it, right? And so you want to nail the model because this model you don't want to be iterating your model location after location. Get the first one right. And if you get that one right, everything after that's much easier. If you get one wrong, it's really tough. >> Right.

4:56>> Cuz backtracking off a bad location, bad bad decision, your cash flow is lower, you expanded the wrong market because you didn't know enough. You You can get stuck for years. >> Okay. >> So I'd rather you stack more cash. I know that right now you probably like want to go and like expand and make more money. I'm all for it. But if you nail this, there's actually a lot more optionality. Because if you if you were to come to me and say I haven't been in the shop in six months, it's making more profit than it did, I'd be like, dude, there's six options we can do from here. >> Mhm.

5:23>> But we got to get there. So just see it as like a very important step on the milestone of where you're trying to go and then at that point it's like, okay, do we open up more shops? Do we buy failing shops and flip them? Do we license it? Do we franchise it? There's a lot of different optionality from there, but get to that point first. >> Okay. Now quick follow-up question. I don't like not working. So not doing something for six months bothers me. Yeah. I don't know what I would do. I feel like I would almost just like find things to do or I would be more worried. I'm going to call him. I'm like, "Hey,

5:54>> Yeah. >> how's it going?" >> Yeah. Sounds like an opportunity for improvement. >> Okay. >> So, you want to win, right? >> Oh. >> So, do what it takes to win. >> Okay. >> Which might be something that's uncomfortable for you today and welcome to growth. >> Okay. >> All right. >> Thank you, sir. >> Yeah. >> Appreciate it. >> If you are a business owner and you are 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 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 deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page, you can book a call with my team and we will look at the business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.