Wie kleine Firmenkunden dich stillschweigend ruinieren

0:00I sell basically complete digital marketing services to service based businesses in Australia. I moved >> SMBs? >> Uh like cleaning companies, stuff like that. Cleaning, yard work, and >> Average revenue for them? >> Uh average revenue per company is anywhere between half a million to 2.5. >> Tough. >> Uh the ones I sell. Uh I pivoted The company's gone from zero to 500k in the last four four months. >> Jesus. >> I pivoted from fitness. Uh just happened so it worked out well. Uh so they've all been wound down, getting other people operate. I'd like to ideally get to eight figures.

0:31Uh in terms of what's stopping me, I Well, I spent the whole 28 hours here going through every framework I could to figure out what was wrong. >> Yeah. >> I just want to figure out >> tell you what it is? >> Good. I also want to figure out uh where would be, besides like getting operations and moving out to other people, and making sure I'm not involved in delivery, where would be the best use of my time. >> turn will suck. >> Yep. >> Yeah. That's what's going to happen. >> Yeah. >> So, you're four four months in, so you're it's it's brand new. >> It is brand new.

0:58>> And you haven't seen all the [ __ ] that's about to happen. So, what's going to happen is because you're because you're servicing SMBs, >> Yep. >> their volatility will translate over to your volatility. >> Mhm. >> And independent of how well you do, they will start turning. Um and you have probably mastered the sales function, which is why you're growing quickly. >> Yep. >> Um but you also will have like CAC will never be cheaper than it is today. >> Yeah. CAC will always >> So, CAC will always go up. >> Mhm.

1:23>> And churn is going to start eating into the business because SMBs suck. And so, we What's going to happen is that your margins will continue to compress and compress and compress and you have to spend more and more. CAC will go up. You'll have to hire more people because of churn, that's what you're going to think you're going to have to do in order to fix the churn, but it's not. But, whatever, let's go to it. And so, you're going to keep going, keep going, keep going. And so, revenue keep going up, but the margin gets smaller and smaller until eventually you're just like, "I feel like I'm running a nonprofit and I have to just keep selling stuff and I don't even feel confident about it cuz I got all these people complaining, but it's really cuz they're the business owners who suck."

1:50And then you think, "Maybe I should take on more responsibility for the business owners." I'm going to start maybe doing some sort of sales motion, some sort of, you know, nurture motion because they suck at sales, they don't know how to run their business, and that's why they can't market with me, but I'm going to do this cuz I want to take, you know, responsibility of this, and all of that is just wrong. >> Yeah. >> And so, if you want to get to 3 million bucks a year, you can just do what you're currently doing. >> Yeah. >> You'll just sell more, and LTV will probably be What's your price point? >> Uh $450 a week. >> A week. Okay, so you're 2K a month-ish. >> Yeah.

2:17>> So, you're right in the sweet spot of churn. Like that is like if you like 1,500 to 3K a month for an SMB, average stick is going to be 4 to 6 months. >> Mhm. >> Um and so, you can back nap back of napkin How many are you selling a month right now? >> Uh I'm selling about 10 a month at the moment. >> Cool. So, if you're selling 10 per month, right? And uh you said 2K was your price point, right? So, let's say that we have five turns on that on average.

2:4710K, >> Yep. >> right? Instant per month. Right? So, you're going to get to 100K-ish per month. Um and then you will stall. And so, at that point, you'll either have to increase unit sold or increase LTV, and then you'll keep thinking, "Man, if I could just get this to go up, it'd be amazing." But you won't be able to >> Yeah, cuz it's a nice >> Um and so, the only way to really make SMB work is to go the opposite end. It's to go super, super cheap.

3:14>> Yeah. >> And then build something that costs you nothing. >> So, it's nothing to deliver. >> Yeah. So, it's like $400 a month or less for an SMB if it's a nuisance style. So, I'll give you some examples. Um if you were like, "I can get you ranked on first three of maps in your local area, and I charge $400, $500 a they'll do it cuz they can see it, >> Yep. >> and they'll pay for that. Um review management, um and SEO stuff, uh they will pay $300, $400 a month, and they will stick on that. You'll get like 30 to 40-month stick rates on that. Um but you'll close way more sales velocity. Uh so, LTV's is actually similar to this but CAC stays super low

3:54>> Yep. um as a result. But, I know you just got a fitness which you probably got out cuz it was terrible and hard. Um you might need to just go and get to there and then you'll feel good about things. Um like you might need to walk this path rather than believe me. But, that's probably that's what's going to happen. So, what do you want to have happen? >> Not walk uh to not have to walk the path in the first place. >> Okay. >> [laughter] >> Um >> Get a lesson out of it.

4:20>> So, this is like the this is me just being real like marketing there's so I mean obviously a lot of marketers follow my stuff and so I get a disproportionate amount of marketing agencies and I've seen every model under the sun. Um SMBs suck as customers. Um and so you have you have to do this one of the other. You have to go up market, you have to go down market. Um and you guys go really cheap and it's something that's super automated uh or you do truly do more of these high-touch services but you do with a business that actually knows their metrics, actually has a sales process, already has a proven model, uh rather than all of them just like wanting to change their stuff all the time, not knowing what they're doing to begin with cuz like they're expecting you to figure out something that they haven't figured out themselves. Um and so that's so like your price either goes up and you serve a higher level avatar uh or it goes down and you serve the one you are now but you make sure that your delivery is almost nothing.

5:08>> Yeah. >> And then it becomes a CAC issue because you have to offset CAC and so then it becomes big head long tail, one time set up into very small recurring monthly high gross margin. >> Understood. >> Those are the two models that work for what you want to do. >> So, I drop below, go high. And in the middle it's just a dead zone. >> What everyone does. >> Cool. Makes sense. Thank you. >> Yeah, cool. >> If you are a business owner and you are not growing as fast as you 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 deconstruct the business and you're trying to scale, we'd love to help you out on Thank you, badgers. 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.