How to Scale Past Your First Niche

0:00I run a marketing agency for martial arts schools. I offer lead generation and yeah, I offer lead generation and appointment setting services. I currently am at 420k in revenue, 100k in profits and yeah, I guess the problem right now is that I kind of started this just doing freelancing, kind of stumbled into martial arts on a whim after having success with the client.

0:24I figured out like a repeatable system to get them results, get people showing up, get people coming to the first class and that's kind of where I'm at today. I guess my problem right now is you know, I'm selling three month contracts and uh churn is pretty high still and I kind of just didn't really fix the churn issue. I kind of just started selling a lot and getting clients and I have a good relationship with all of them but uh I've been kind of stuck at this range, this 35,000 per month for a while now and uh clients have leave for a lot of reasons out of my control. Either A, I do a great job and they can't handle the long coming in or B, they don't have the patience to kind of keep going with it and I think I don't I don't run a martial arts school myself so sometimes I have an issues with sales and I can't really run a martial arts school so I kind of just grew this agency on a whim.

1:14>> [laughter] >> What do you want to have happen before I answer the question? What do you want to have happen? >> What's your goal? >> Yeah. >> That's the the question I like to start with. >> Yeah, I think right now I'm trying to figure out if I should keep pushing on this or if I should pivot. I didn't like really set out to start an agency. >> What do you want to have happen? What's the goal? >> It depends whether you should push or pivot depending on your goal. >> Are you trying to make a certain amount of money? Are you trying to sell a business? Do you want a lifestyle business? Like, you know what I'm saying? Like what do you want to end up?

1:42>> I think right now I think I want to learn how to make a lot of money and exit and learn how to do that and finish. >> Yeah. >> We we can tell you that. >> Yeah. >> That you want to not exit. That's for sure. >> So, the question is can you learn something from this business and make money at the same time or is there a better opportunity?

2:06Yeah, I thought about potentially selling my book of business and then opening up and pivoting to some sort of brick and mortar kid education business. I mean I've I've kind of flushed out the scripts on how to get parents and getting them invested into martial arts program and the whole nurture sequence behind it. So I thought about investing the money cuz I've seen it about $100,000 in this business and I'm thinking of kind of leveraging that into maybe investing in an actual brick and mortar and learning how to scale that.

2:31But I guess I'm just trying to figure out do I you know am I in a good spot should I push the agency grow it you know >> what Leila's going to say. We'll probably have two different pieces like we'll probably come at this from two different angles so you'll get a double trouble on this one. Um sure. But I'll say this. Congratulations on learning how to generate leads in a market and work them and get them in. You've you've learned acquisition.

2:57Super valuable and you've learned it for a specific avatar, right? >> Appreciate that. >> The next step that this business like I can tell you where this is going to go. You would have to you'd have to basically change this entire business in order to make it a bigger sellable business which is essentially the same as starting over. If and that's all based on your goal because the reason that you have the turn you have is because martial arts studios in general tend to have you know they have high turn. They're typically not very good business owners not very good but just they're small right they're very volatile and so that volatility is reflected in your business and volatility in their business in your business therefore creates a business that is not valuable, right? And so that's going to be based on them. The only way that you can get those types of customers who are volatile inherently to be sticky is to look at the things that those people already buy that they don't turn out of. So what are the things that they buy that they don't turn out of? If you were to stick with this and I'm just using this as a mental construct and then I'll get into more specific examples of what I think you should do next. But, big picture, you could their their payment processor, they don't turn out of, right? Their CRM, they don't turn out of. Um

3:59>> Right. >> Their insurance, you know what I mean? Like their like there's there's things that they don't turn out of. Marketing stuff, they will turn out of left and right and center, right? So, >> Right. >> I think that you have this whole kids education thing. If it were me, I would prefer you go and find an industry, if you want to do brick and mortar, which is fine. If you want to go brick and mortar, I would find an industry that already has a product or service that people don't turn out of.

4:27Then I would apply your skill of learning acquisition to that business, and then you'll be able to like you can go and start acquiring businesses, um and then filling them up because you know how to acquire, and those businesses um will already have the stick in place, and so you'll have the full stack. >> Mhm. >> What was your experience prior to this business? >> Uh well, I worked for a marketing company, and I learned lead generation there, and then I kind of just um the company ended up getting sold, so I ended up, you know, trying to

5:02>> Do it again. >> have a freelance thing, and I learned [clears throat] Yeah, I took I I got my own clients, and then uh after I did that for about 2 years, and here I am with a bunch of clients, and I don't really know what the next step is, so >> Okay, that's great to know that you came from a marketing background. >> Yeah. >> Yeah, so I I I thought about getting into the uh kids education space because, you know, I did martial arts because um I came from a sports background teaching kids like different sports, specifically frisbee, um which was cool.

5:29Um and I guess I thought about, you know, buying some sort of like tutoring business or kids education, and taking my marketing skills there, and growing that. Um But, uh just because if my goal is to learn how to sell and and and sell a company is I'm not sure if the agency space is there, too. That's where my head's head's at in happy days, so >> Just find something that has high revenue retention, high stick. >> I would say you want to find something easy to market. Like >> Right.

5:55>> it's really impressive that you've done what you've done for martial arts studios because we've worked with thousands and it's tough. So, I mean I can say that objectively. Uh it's like you have a you know, like a level eight skill that you're using on like a level three opportunity. And the opportunities that you're kind of presenting, they're not really that much better. It's like maybe level four. >> different. Yeah. >> I'm like, can you get a level eight opportunity to match your level eight skill?

6:23>> Mhm. And and what is that you guys? >> It's something that has revenue retention. I'm just telling you right now. It's something with revenue retention. >> retention? >> Yeah, if you just solve for that cuz once you have revenue retention, if you know how to acquire [snorts] customers, you just grow a business. Every year it just gets bigger. That's I mean, the hardest thing is revenue retention. >> I I just want to like open up your mind. You're looking at opportunities that are linear. I want you to look at opportunities that are exponentially different than what you're doing right now.

6:49And I think the reason you're thinking linearly is because, you know, without noticing we have these beliefs, right? That we keep ourselves in these boxes thinking like this is what I'm good at. The fact that you're very good at marketing, you need to find a great product that retains customers easily to market. What that is, maybe it does scare you or makes you nervous and you're like, I don't know anything about that. That's okay. You can figure it out. And the thing that I tell people a lot is it is just as hard to build a small business as it is to build a big business. Both of them are going to be painful. You're going to suffer. There's going to be late nights. It's also just as hard to build a uh I would say like a more advanced business as it is a small business. I can tell you that from personal experience. Like building a gym up to what it needs to be is as hard emotionally as building a large company like acquisition.com. And they are hard in different ways and they're also easy in different ways. So, you're going to have 50% [ __ ] and 50% good, no matter what opportunity you pursue. I would love to see you pursue an opportunity that is at least worth the 50% [ __ ] you're going to go through. That's something me and Alex talk about a lot, which is like pick an opportunity that's worth the pain.

7:53Because it's going to be pain no matter what. This goes for everybody on the call. It's going to be hard no matter what. So, pick one, even if you're like, I don't believe that I could do it. You will figure out a way. And everybody does. Even when we started Acquisition.com, you know, we didn't know anything about investing or buying companies or doing any of those things, and we learned along the way. It's just that you have to have the belief in yourself to just start. Like you're not going to feel ready for any opportunity that's exponentially different than what you're doing right now. You get ready by start.

8:23>> Got it. Just got to find a level eight opportunity. >> I would literally I would go on to I would literally go on chat GPT and I'd be like, "Tell me what an opportunity is that has great revenue retention. Here's all the industries I've worked in. Here's all the skills. Where is something where I can get insane revenue retention that is five times more likely to sell and be worth something and make me you know, maybe it's $50 million compared to these businesses I'm in right now." And just like look at the list and then think like, [clears throat] "Okay, well, like where do I have a 30 to 50% shot of success?"

8:58>> Mhm. >> I mean like I I don't know how to explain this. Like I have never felt ready before I tried something. I'm always like, "I have no [ __ ] idea if this is going to work. I could totally fail. This could totally be terrible." >> And like that's going to happen no matter what. It's just like you're picking things that are small. And here's the thing that's even worse. You said you want to sell a business? Well, then that means you have to stay in the game, which [snorts] means you have to be challenged. >> Right. >> If you pick something that you know you're going to win, this is like where high performers just die. And I can tell that you're a high performer, is that you pick something that's too easy.

9:29And then you get disengaged, and then you're like, "I can already play this out. I know where this is going to end up, and I don't want to go there." And then you don't even want to see it out to sell the thing because you already know where it's going to go. It's not interesting. >> [snorts] >> Do you have anything you would add? >> No, you're right. Yeah. I want to watch Yeah, I love Yeah. No, last year I I remember I was at the 10K rate and I I watched a bunch of Alex's videos and he just said double ad spend and keep the course and here I am a year later double ad spend, kept the course and I'm now I guess just got to find a you know higher level of activity. So

10:03>> Also, I would just say this, you're going to learn more trying something than you are going to learn thinking about it. We don't learn while we stay in our heads. We learn when we get out into the world and we do stuff. So like think about a way like how could I test these opportunities? Can I be an affiliate of a company like this? Could I be an affiliate to an insurance company? Could I just come in and be a contractor to help build up this X company? Like you could literally just find one big client be like, I will do your in-house marketing just so you can learn the business. >> Yep.

10:31Damn, I would love to do that. >> Then use the cash that you have as your savings so that you can be more aggressive with your learning. Cuz then like that's your nest egg so you don't have to worry about living. >> Yeah, I I've been I've been doing the whole like Chipotle thing for a little bit and [laughter] I I saved up my first 100K. >> Good, man. >> I appreciate you guys. [clears throat] I appreciate you guys. No, I appreciate that. >> Appreciate you, man. >> Awesome. No, awesome. I'll do the thing. >> All right, appreciate you, dude.

10:56>> All right, appreciate you guys. >> See you later.