Wann du dein Dienstleistungsgeschäft skalieren solltest

0:00Unternehmer/Gast Great. Thank you. Um, I just started business four four months ago and um, I the first business um, I had a little bit of like I I grew too fast. >> Okay. >> And um, I had uh, various issues. >> Okay. >> And um, so now I'm uh, I'm like wondering um, how you could like uh, decide um, when to grow and like when to >> Yeah. >> uh, when and what systems to grow first, you know?

0:26>> Yeah. Yes. Really good question. So, first off off the bat, I don't know what went wrong when you said you grew too fast, but my guess is that you So, one of the things I have is that you can't really overextend, but you can undertalent. Meaning the people that you brought in when you were quote growing too quickly were just insufficiently skilled and as a result things started breaking and falling through the cracks. >> Uh, so I so I I I went to the uh, BAM last year.

0:54>> Yeah. >> And um, I think the issue was uh, we were identified as like I went to over over my skis. >> Yeah. Yeah. >> That's uh, that's what you guys >> Yeah. Yeah. You basically you were spread too thin. And you can be spread too thin because you don't have enough support from good enough teammates. And if I say anything you don't understand cuz I'm I talk fast, just correct me. All right, just you know, hold me back. Um, but right now the speed of your I'll talk a little slower. So, the speed of your expansion should be correlated with the speed of your ability to acquire talent. So, the speed of your ability to get good people into your business to hire them. And so, the reason that it felt like you were overextending is because you had no help.

1:39Alex >> That makes sense. >> Okay. So, if that's if that was the situation I would then look at my talent basically the follow-up question is do you have the cash flow to pay somebody what's required to get the help you need to expand the business currently. [snorts] Do you? >> I um I I do like um so right now I hired my first uh sales uh um sales rep

2:07>> Yeah. >> starting uh next month. >> Okay. >> And I'm doing um uh 150 uh K revenue um like uh this month and I have like 25 K profit. >> Okay. >> Um >> That's a little low. >> I don't know like if that >> It's a service business? >> Yeah. Um I do uh it's like an HVAC company and >> Yeah. >> we specialize on uh heat pumps. >> Yeah, heard. So I think that especially if you're a niche uh you know, service like that niche home service especially or commercial service, um you probably this is me just guessing you're probably also a little mispriced.

2:43Alex Um so I'll bet that you do need to raise your prices because if you're running 150 top line, 22,000 bottom line, you're running what like 13% margins or something like that, right? >> Yeah, like 15% or something like that. >> Right. And so for me a home service business especially if it's niche like for me I would say 30 is going to be where I'm like my kind of like minimum target for just I would say a like if you were just just HVAC, right? Um but if you're like I specialize in heating pump specifically, I would expand that even further to like you could if if run well this business could run 50% plus margins.

3:21So >> It's like a very competitive market in Germany because it's very like >> No, I know. I know. >> subsidized. >> Yes. Yeah, yeah. No, I hear you. But the the Okay. So I'm just going to put a pause here for a second. I'll ask the original question again which is do you have the cash flow in order to hire the help? You said you're hiring a sales person, right? That's coming in. >> Yes. >> So in order to make sure that you don't grow too fast what you have to do is that when that new sales person comes in before saying okay, now I'm going to hire the next person, we have to make sure that that sales person becomes productive.

3:50So the the speed of your expansion is going to be the speed of your ability to onboard and activate teammates. So, just like you activate a customer, like you say, "Okay, you know, they they have to go through this journey and then they you know, they get a good result. They're happy." Like you have that journey, we basically need to think through your expansion from the employee perspective of how do I activate the employee so they don't have to think about them as much and you you go from training to managing.

4:16Alex >> Manage. >> Once they're managed and they're consistently generating revenue for you, especially cuz it's sales, right? Then at that point I'd say, "Okay, now you can take your eye and then put it to the next constraint of the business." But it sounds like acquisition was was taking a lot of your time and so you hired the salesperson, which you know, that's fine. That makes sense. I would look Do you give any discounts at all? >> No. >> Do you give discounts when you sell people? >> a welcome discount. >> Yeah, or anything like that. >> And but but I don't know what to use this.

4:44Alex >> No, no, I don't want you to. I was going to say, if you don't want to raise your price, at least eliminate your discounts. >> All right. Yes. >> Okay, no, cuz literally you're you're right. You're at 15% margins and if you're giving, you know, let's call it 10% discounts or 15% discounts, you're giving half your profit away. And so if you feel uncomfortable about raising the price, then what I would do is say, "Eliminate discounts and then add speed or add uh risk-free." So, it's like, "Okay, so uh if you buy today, we'll do it faster. If you buy today, I'll guarantee this." Rather than if you buy today, you can pay less. Does that make sense?

5:16Alex >> Yeah, makes sense. >> That's what I would approach to try and get a little bit more premium uh on your pricing so that cuz like did your your your your margins are so low that even 5, 10% jumps is like 60% increases in your actual take home. >> I'm afraid that if I raise price, they don't sell. >> Well, everyone's always afraid of that. That's why no one does it. >> Yeah. But I guess I do it now.

5:41>> Yes. Again, you have to focus on The thing is is you only you are afraid of raising prices because you believe that you sell a commodity. If you and someone else do what what the prospect believes to be the same thing, then they will choose the lower one, for sure. No question there. So, the question is, how do we get them to not perceive them in the same thing? Which is why the first chapter of the Offers Book is like it's it's an apple and orange issue, right? You're selling a commodity. And so, we have to get you to not sell a commodity, which means that we have to either add speed, we have to add ease, we have to uh make it more risk-free for them so that they say, "Okay, good, fast, and cheap, pick two." This guy is cheap and he's fast.

6:20But, the thing is that it's not really cheap because you have to pay twice as much cuz I'm going to have to fix it. And it's going to cost you way more. And it's going to take you longer. So, which one do you really want? Right? So, it's like you have to break the frame to reframe the conversation. >> Got it. >> Cool. And again, sometimes that frame even Sorry, go ahead. >> So, so I I I I raise the prices and um then I like hire for the next consultant. I I only hire the next person when uh

6:47>> Yes. >> the person I already hired is like uh fully on board. >> Yes. >> All right. >> You nailed it. >> Thank you. >> No, you bet. Thank you, man. Good luck with the business. Congratulations. And you are in a niche, man. I bet like I'll bet you have the pricing power. I'm just telling you, man. All right. I got to jump to the next call. I appreciate you donating books, man. Thank you so much. >> Thank you. Bye. >> All right. Bye.

7:13All right. Dude, I'm telling you guys, pricing like the biggest lever by far on your ability to generate profit. It's like a three I think PC said this 2 days ago. Patrick Campbell, he's one of the speakers at the launch. Um they did a huge meta-analysis of this. It has a three or four X stronger influence on on profit than any other thing you can do, which is you could keep customers longer, which is amazing. You could get more customers, also amazing. But, the thing that's going to generate by far the most take home increase if you were to proportionally increase each of them, pricing is going to be way, way, way more. And so, nailing pricing and being willing to experiment and do that uh with different prospects that are coming in and try new try new pricing structures out. Again, if you're 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 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. 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 de-constrain 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 your 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.