How to Scale Your Business — Alex Hormozi (1 Hour Compilation)

0:00Yes. Yes. So, I will I will speak pretty definitively to I rarely do about like this model is better than that model. Agencies are exceptionally easy to get to and you know, caveat caveat for the internet trolls of the world, right? Like exceptionally easy to get to a million, 3 million, even 10 million dollars a year in almost any version of the model.

0:25Beyond that, it becomes exceptionally difficult because you have human capital. So, it becomes really it's more and more difficult to attract, you know, talent to do higher level work. And typically the businesses that go from, you know, zero to 10 million, they're servicing SMBs and VSBs. So, very small business owners and and small business owners. If you take one of the the way that I like to think about any industry if I want to get into is I look at what the people who are the biggest in that industry are doing and think, okay, what's different about what they're doing versus what everyone else is doing. And the biggest agencies in the world service the Fortune 100. And so, I take that as the natural extreme of like what is the best version of this business is that you deal with businesses that always pay their bills, they never churn, they sign 5-year contracts at 5 million a year, and they're good for it.

1:07And so, the process of agency scaling is very much scaling the avatar. And you basically have to just keep earning your way up, which you're you're already on the right track, of how can I get an avatar that actually can keep their word? And once you get to there, number one, and number two, you'll have a telltale sign of like, am I dealing with an avatar that's too low? If you want to start doing more of their business for them. And so, if they're like, I can't close a door, right? Or like, you're like, maybe I'll do my sales for them. No.

1:36You have to deal with a business who knows how to sell because your services are not I will do acquisition for you. It is I will do this I will do this more I'll do lead generation. Right, exactly. And so, it really comes down to who's the perfect avatar for only this very narrow service that I have I have tremendous margins on. And so, that's where we get really clear on like, well, if they actually like I've been selling people who have over 10 people headcount, but if they have over 50, my turn is like 1%.

2:01And so it's like I really should just build that and not have all of this. Now, what happens is we we always incur debt. So, it's not like there's something wrong. Every business incurs debt when you start. 100%. You either incur talent debt, tech debt, financial debt, you incur debt. You want to incur the debt that's the easiest to pay back. Right? And so right now you can also incur reputational debt. Like there's debt. Um you're you're selling some people that you know you shouldn't sell so you can pay the bills.

2:29Fine. I'm not going to get on an ethical, you know, whatever with you. Um but the sooner you can draw the line of saying I want to Like if you told your team work How many sales a month you do? Sales velocity. Three, four. Okay. I'm okay with us going to one deal a month. And where this gets more interesting is that when you get that correct, truly correct avatar, the price elasticity uh changes. And so all of a sudden it's like if I actually were to price to my correct avatar, I might be able to charge two times as much. And by charging two times as much, I might 5x my profit. And by doing that, I'm actually more than happy to have my quote revenue growth rate be slower than what it was before when I had these people, but the amount of operational drag that you incur also like team morale of like I just don't want to work with this guy and he's already turned out. Like it just feels like such a pain. Whereas if they know that they're going to be creating long-term relationships with the customers, you will get a sticker business that's more fun to run and way more profitable. So, part of this is like a lot of entrepreneur a lot of the correct moves in entrepreneurship are counterintuitive because all the intuitive ones you've already done.

3:34You do those naturally. You wouldn't even You don't think about it because all the things that are intuitive you already did it and they already worked. Where you get stuck is the counterintuitive solutions. So, they're the ones where you're like wait, so for me to grow I need to sell fewer people and have higher qualifications. It's hard to do. That's why most people don't do it. It's also why most people don't make money. All right, I got Jack McGee. up? >> Hey Shane. My name's Angelo. I sell pizza, so sauce, cheese, and pepperoni to humans.

3:58>> This is what we need to get on. >> Uh we do 4.4.2 a year. We're on about 30% margins. I'm going to be vulnerable here. I would like to be at W revenue. Can I skip that? Can I go down? >> Sure. So, what's stopping you? So, >> I'm kind of the cool kid back home. I'm I'm as a leader. I don't work my stores. I have full capacity and I have a full team. >> Uh three. >> Okay.

4:24>> Three stores. So, I have I have great teams. Everything's in place. I have opportunity to scale, unlimited checkbook, all the things. >> Yeah. >> During the process, when I bought my time back, I was like, "What am I going to do to make the business money?" >> Uh-huh. >> So, I built a tool and I just And that's how I run my business. >> Uh-huh. >> So, other humans want the tool now. So, I was invited to a $350 million company. Was like, "Hey, what are you doing?" So, then I showed them. So, now other humans want the thing. So, it's Do I continue to do pizza? Do I give them tool? Now, the woman in the red dress, it's kind of like humans like the thing that I built in It's kind of cool.

5:00>> Yeah. Um What do you want to have happen with the tool? I want to I want to help people. The pain that I've went through, I want to help others with no expectation. The thing that I did to get to where I'm at is in an app. Mhm. Um What does it do?

5:33>> Uh simply, uh I I actually essentially what you did with Jim's Lunch. >> Okay. It's like a CRM? >> Uh yeah. Um it's more of an operating system, yes. >> Yeah, like a pizza OS. >> Yeah, actually. Yeah. Yeah, there you go. Yeah. >> Um would you process payments through this? >> With Stripe, we could, yes. >> Okay. Um well, would So, we got to go back to W revenue.

6:00>> Mhm. >> What do you want to have happen? >> What do I want to happen? So, with the revenue in in pizza, I'd I'd just go buy 10 units when I get home and do the thing. So, over on this side, I'm just I just don't know what I don't know. >> Well, let's level up for a minute. So, what what do you want to have happen like business outcome-wise? >> Okay, for the new thing. >> For everything. Cuz there's multiple ways up the mountain.

6:27>> Mhm. >> So, you could option A, forget about the tool. >> Mhm. >> Uh and we're not forget about it. Just use the tool for yourself. >> Mhm. >> And just run your own stores and buy stores for nothing cuz pizza stores are very easy to buy for basically nothing and basically turn them around and then have a big chain of pizza stores. Your edge is that you have this operating system that no one else has. That becomes a very valuable and sellable business, for sure. >> For sure. >> Option one. That can That can get you a very big outcome.

6:54>> Mhm. >> Option two, you take your take your tool and uh you take Pizza OS, right? Um and we build a different model around it. And so, there's a lot of different models you can have with a you know, SaaS tool like that that is uh CRM/payment, you know, centric. >> Mhm. >> Um there's kind of a turnaround business where you can let all pizza stores start for free and they will process their pizza through your thing. And then for people who are doing real revenue, you could say, "Hey, I can help you out."

7:31And then you get a percentage of the revenue. That's a very light model that could still have tremendous enterprise value. That's called like option two. Um option three is that you do that. Um but the thing is is that you and then you just go full software, right? Uh, you it's a very different life than you have now. So, you'd have to be prepared to like you're no longer a pizza guy, you are a software founder. That's what I feel like and to answer your question, what what you did for all of us in this room, I feel joy knowing that I can do that for others.

8:05>> Sure. >> Right? So, that that does feel like the way I want to go. >> Okay. >> Pizza's kind of like >> Cool. >> Yeah. >> Uh, leadership, influence, standards, hard work, paying ignorance tax. And I accidentally created a thing cuz nobody had it, so I just created it. And here we are, so. >> I think, um, I'm going to give you two things. So, one, I I think either opportunity could make you as much money as you want.

8:30Either way. You could have 100 pizza stores and make a lot of money that way, use your tool, or you use the tool and do some sort of call it franchise light or you could franchise heavy and use the tool. Either way, it's some version of B2B to that. What are the second thing? So, my my advice is that you'll win either way because winners win. And so, it's really what path up the mountain you want. You're going to get there either way. This is thing one. Thing two is that the view's going to be the same.

8:55The view's going to be the same. And so, right now, pizza's cool cuz you figured it out. You'll figure this one out, too. And at a high enough level, you'll have a head of marketing, you'll have a head of sales, you'll have a head of head of IT, you'll have legal [ __ ] you'll have employees, sleep with employees. Same [ __ ] It's the same [ __ ] everywhere. You're going to have the same five to seven people who report in to you. And if you build it all the way up in either level, you're going to have the same caliber people reporting to you. And so, you're not you're not going to be in the pizza business. If you're in the pizza business, you're going to be in the people business. And if you're in the software business, you're not going to be in the software business, you're going to be in the people business.

9:25So, it's up to you which one you want to do. I think at the end they end up converging. So, I think right now it just looks different and different's always fun. But at the end of the day, you could take both of them out. And it's an entirely a you choice. I think you'll win either way and given how it seems like you've outsourced the pizzas, I would say if you are going to pursue the other path, to sell the stores. Because you need all your focus on it cuz the people who are going to try to compete against you are for sure going to be focused on And I think out of respect to the competition, um you should not expect that you're going to beat them with one arm tied behind your back.

10:00Very helpful. Rock and roll. Appreciate you. >> I run a performance-based marketing agency called Ethos Marketing for kitchen and bathroom remodelers and auto living companies. Currently at 8K per month, profit is 7K. We work on a pay per show model and position them for high-end projects, so not like discounts, etc. Uh without retainers or ad spend on their end. So we take the risk there. Uh right now it costs me around in Yeah, right now it costs me around $250 to acquire a customer on the last That's where I ran the ads.

10:32Uh I have a $1,000 setup fee and I charge $500 per qualified appointment show. Uh to get them one appointment show Yeah, to get them one appointment show it costs at the worst times um like I'm aiming for 210. Uh and I if I don't get them at least 10 appointments in the first month, I refund them the setup fee. Now currently to let you know, I do have two clients in this but I have three auto clients still in free service which I kept for cash flow because that's what I ran before. Um my question is from just what I told you guys now and from your experience, what do you see which I currently don't see? Um so what would you do in my position to absolutely like scale this or maybe do differently. Um Are you keeping the customers?

11:22>> Um until I'm basically I wanted to keep them until I'm at 10K sufficiently in the modeling and And completely ditch. >> He's cutting out? >> I want to ditch the trees. >> Oh, you want to ditch the tree? No, no. Layla was Layla was asking questions. Also, I think Layla's audio is low for anybody on our team. If you can boost her audio a little bit. >> I didn't I don't hear Layla at all. >> I think I'm just on mute.

11:50Okay. Um so, the question was I mean, I don't think you should cut your cash flow. You have You only have like four customers, right? >> Um currently at five. >> Okay. So, you have five customers and that means that if you're doing $8,000 a month that You said 8,000 top line, 7,000 bottom line, but you said your cost of getting a show is 210 on 500. Those margins don't make sense. What am I missing?

12:15>> Um yeah, because so base Okay. I'm I didn't So, for the 8K, I'm not basically counting in the $200, which is lost. I just count in the 300. >> Okay, got it. >> guy I'm current The one guy I'm currently onboarding, so I only have one guy currently on it. Uh yeah, the other guy is currently on onboarding. >> And when you say guys on onboarding, you mean a client?

12:42>> Uh yeah, the one company I'm currently onboarding to get them into the $500 thing. I got his $1,000 setup fee basically, but he's not [snorts] actively >> And you have five clients right? >> Uh yes. Currently, I'm looking to scale this now, but yeah. >> I mean go for it. >> I know you're going to say what you're going to say. >> Well, I was just thinking that we have to run some more water through the well. >> Yeah. Can you Did you hear Layla?

13:07>> What? No. What did you say? >> [laughter] >> Run some water through the well. >> You hear that? >> So, I need to get more data. >> You need to Yeah, you need to get more data. I mean, at that point that sample size is so small. I think we need to focus on getting a bigger sample size. >> [laughter] >> And then we can go from there. >> I I understand. Okay. Well, what is what would you say what is just your opinion about the model they offer? I'm you know, I'm running this because all other agencies are basically running this paper appointment and yeah, they you know, and they pay for the ads but like the trust is really low in that market. So, I was thinking about doing that.

13:48>> Dude, I think everything's fine. I think everything's fine. The I'd say one risk that I see that's relatively significant is your cost per show relative to the revenue per show is kind of low. I would say the guys who I see like really murder it are at like 20%. So, you're you're at like 60. Sorry, 40. So, I would I want to see if we could drive that down cuz my fear of the business is that when you take this to scale you'll be less efficient and your margins are going to compress.

14:14That's like I'd say like that's kind of like my biggest red flag. Overall, the model of lead cost and arbitrage, there's nothing wrong with it. I've seen some massive agencies that run that model. The next issue that you're going to run into is the types of businesses that you're serving. So, you're going to want to go up market for people who can spend 50,000, 100,000, 200,000 dollars a month in ads. That's that's what you're going to want to go after because the volatility of your business is going to be predicated on the volatility of their business. So, when you go after and this is super common for small business owners for everyone who's listening is like you go after If you go Most people who are poor, I'm not saying you're poor, but like most people are starting out in business go after other people who are also starting starting out in business because that's where your confidence level is. But, their they don't know anything either. Right? So, it's the blind leading the blind and you're like, "What's wrong with my business?" All these people are churning and they're churning because they don't know what the hell they're doing in their business either. And so, you're going to want to earn the right to go up market as fast as you can.

15:11Um and if you have five clients that pay you what they're paying now versus having five clients and each one pays 100,000 dollars a month, you could run the same op ops and have 100 times the revenue. >> Yeah. >> The biggest Can you hear me? >> Okay. Yeah, I can >> Oh, okay. Fantastic. You can you can hear me? Sounds okay? >> Yes. >> Okay, great. I I was going to say the next the next thing that you're going to want to realize is that like we've done the pay per show model and we also had a software that used to enable the pay per show model. There's two things that you want to watch out for, which is one, when you're doing pay per show, a lot of times the businesses are going to think, well, if they show but they don't close, why the [ __ ] am I paying you? And so then you're going to be really tempted to be like, ah, can I just help them sell these people? I'm just going to also maybe I should start a sales agency and close these [ __ ] That's the next thing that's going to happen.

16:00The the second piece to it and by the way, don't do that. Go up market and say cuz people that are up market have their own sales team and they understand that concept that even though you get somebody to show, it doesn't mean that they're guaranteed to close you. So you have trained sales people. So do not give in to the temptation. Don't try and serve an avatar that isn't best for you more. That's the biggest mistake people make, which is like you're serving an avatar that isn't your best avatar and you try to go above and beyond for it. You just don't want to do that. The second thing

16:27>> Yes. >> is that okay. >> It's good. >> That's like I feel like that's like 2010. >> That was good. >> Um bringing it back. >> Yeah, that's fire. >> [laughter] >> Uh the second piece is that with the pay per show model, here's the place where it goes wrong, which I saw firsthand, which is why agencies have churn with it, which is that um customers want to be able to predict how much money they're going to spend with you. So if you look at churn and you look at customer retention, the customers who retain the most are the customers who understand how much they're going to pay.

16:56And so one thing that you can do is you can give people a range estimate or you can give them a heads up different times through the month as to how much you're going to be billing them. Now it seems contrary because you think, okay, well if I tell them how much they're going to be paying, they'll be like, oh my god, that's so much. But the reality is actually if they get a bill that's unexpected, that is like it looks and it's like once you get one unexpected bill from a company, it's like by the second one, there's a 50% likelihood that they're going to turn. So, think about how you can communicate with those customers. Maybe it's every other week, maybe it's every week to show them what their tab looks like.

17:29>> increment of revenue. >> Yeah, or by increment. That's a great one, too. >> Yeah, just like every 5,000 increment of whatever, every thousand, every 5,000 they spend, you just let it you just automatic, just letting them know that this is happening. We can turn it off whenever you want. >> So, I think another piece that you can also ask is when you're getting the sale when you're onboarding them, ask them what their budget is. I know it seems contrary, but it's like if you want to get them to spend more money with you, you also need to show them that you're okay spending as much as they're comfortable to start. Does that make sense? And you can coach them up from there once you get buy-in.

18:01>> Yeah. Okay. Yeah, that makes sense. I currently what I currently do is I built like this lovable thing where I put in the numbers, so close rate, average contract value, etc. And um basically, I do that on the sales call, though, so that's a big Yeah. >> That's right. Um because then I can always like weekly tell them like, "Hey, this is how much you should spend and that's what you should expect in the long term to get a return." So, thank you for that tip. Um I mean, if you were me here, how would like you think about going from like 8K per month for now to like 50K in this exact model as fast as possible and also as sustainably sustainably?

18:38>> Dude, this is uh we we answered it. So, I I want to ask you, what do you think we what do you think we just said? Just so I want to make sure you retain that. >> Nice. >> That I That I That I need to get more That I need to get more data. And like just sell more, probably. >> And? And? >> And that I should not uh switch my business model and get them to basically uh convince me to get them to sell.

19:04And also make sure that they know how much they get charged. >> And go up market. >> [laughter] >> And go up market. >> Yes. Up up market the one thing I want to What do you think about the avatar? 1 million above? Because I was reading about it. >> Just go up. >> have an opinion on this? >> Just go up. Just just like in your ads or your outreach, look for people who are doing 10 times those numbers.

19:29>> Number go up good. >> Yeah. Big number good. >> Okay. Okay. >> Cool. Like you can literally have the same size company you have in terms of headcount, literally just add a zero to what the people that you're trying to attract are, and you will make significantly more money and love your life more. >> Mhm. Okay. Yeah. Thank you. >> All right. Rock and roll. >> Should I Should I Should I increase that up, please? >> No, I don't think yet, dude. It's five people. >> Yeah.

19:56>> You got to get more water through the well. Also, there's a like for everybody listening, like it's like okay okay increase your prices, but like you haven't even gotten to the threshold of delivery. So, until you get to a point where your delivery is stressed and you can see how your team and how your company operates when you are stretched when it comes to your client load, do not increase your prices. You increase your prices when you know that your product and your delivery is rock solid. So, we got to get more water through the pipes first.

20:21>> Okay. Okay. I got it. Thank you very much. I appreciate you. Thank you. >> All right. Later, man. >> I sell management services to board members of commercially zoned property owners associations. Think HOA except for your office. >> Okay. >> The company does 1.8 million in revenue, it pays me 625,000 a year, requires me to work at it 90-ish minutes a week.

20:48>> Okay. >> I would love it if >> Look at this guy. It's like as a male model. >> [laughter] >> Yes. >> It's a very tiring profession. >> me the rest of my time. >> Yeah. >> But I would love it if I could figure out how to keep my same margins and find a way to 3 million. No, yeah. Cut the time Yeah. One word none. But, like I've been at this since 2003 and I've tried so many different ways to find the prospect that we're looking for and

21:18>> 90 minutes a week you're working? >> No, this is I used to work >> real. I was like >> Yeah, no, no, no. I used to I used to do it a lot more. >> Okay. >> And one of the reasons why I work 90 minutes a week right now, straight up, is I kind of gave up. >> Okay. >> Because I just couldn't Oh, like it felt like brick wall here, turn right, oh, another brick wall, turn left, another brick wall. >> Yeah. >> And so, right now it's essentially just like an annuity. It just keeps on paying. There's like on the risk side of things, there was like very, very little of that.

21:45>> Okay, how did you get the How many How many of these HOAs do you have? >> 147. >> Okay, how did you get the 147 that you have? >> Word of mouth haphazardly from brokers, from developers sometimes, sometimes an owner within an association that we have. >> Okay. So, what did you do to like So, fundamentally for me, this is like a uh center of influence type play. So, either if I'm having like a true brick wall issue with like gatekeeper type stuff, which happens a lot in like super high-level enterprise, happens in government uh contracts, things like that, I'm going to look for Well, government, this doesn't apply, but for the the first thing, yes. Um like the brokers, right? So, it's like how do I become the broker's favorite your broker's favorite broker, right?

22:28How do I get How do I get those guys to just love me and always send me stuff? And so, then the question is like, okay, of the brokers you've sent your business in the past, how many of them continue to send you business? >> All of them that have in the past. >> Okay. >> Which is not a massive number. >> Okay, that's fine. >> Yeah. >> And so, what I would look at is like, okay, what was the process that it took from this person finding about who I was to getting him to actually refer me business. Number one. Number two, what communication cadence do I have in place for the existing broker so that I can solicit them for new business or remind them that I exist so that I'm not just getting 10% of their business, I'm getting 100%. So, that's like the farming side. The hunting side is we have to look at the cost of acquiring a broker. I'm just assuming brokers like let's say the highest likelihood. If there's other ones, use that. But if broker, let's say an activated broker is going to send me two buildings a year or three buildings a year, then I'll say, "Okay, how many broker how many average attempts do I need to get one broker?

23:21What does it take for the broker to get me that first referral? Are there kickbacks that are allowed?" >> No, not for them when they're licensed. >> For them, they cannot take kickbacks. So, you're just going to have to get really creative. No. Um >> [laughter] >> My bad. Okay. I just like had like nine things in a row and I was like, "Can't say that. Can't say that. Can't say that." Okay. Um He's a good looking guy. All right. So,

23:49>> [laughter] >> I was like, "Use what you got, man." So, because of acquiring the broker, I would look at the Basically, I would want to reverse engineer the process that the people did. Basically, what happened on accident with the original brokers, we need to make happen on purpose. And so, we have to be deliberate in that customer experience and seeing them as the real customer. So, I think that you need to basically shift how you see your business. So, I'll give you the easiest analogy I have with like the first time I learned this was with Alan, the the software that we had. I thought that brick and mortar business owners that we were working their leads and responding to them, they were our customers. That was not true.

24:23The people who were our customers were the agency owners who brought these customers in, who white labeled our product to serve the SMB. And so, once I realized I was like, "Oh." Cuz I was spending the first part of me trying to grow Alan selling nail salon what you know, like in in coming in the door and they would turn out or they have a They'd be like, "Oh, this is amazing. It works our leads. How do I get leads?" And I'm like, "This is not my job. Like this is the software that works leads." And so, I thought, "Okay, what businesses always have leads?" And it's like, "Oh, businesses that have an agency that are running ads." And so, then I thought, "Oh, well why don't I but like sometimes they leave agencies, but agencies don't leave agencies because they're agencies because they're themselves and they have to stay themselves. So, then I was like, "Okay, so I'll acquire agencies and see if I just get them to bring all their customers on." And once that changed, I realized that the churn that would exist within let's say agency A has 10 clients, the 10 clients' logos would change, but agency A never left. And so, then when I chunked up how I thought about the business, my retention on agencies was amazing. Their retention on customers changed because Bs are volatile and so they're going to churn for whatever reasons. But I knew that that 10 guy was pretty much going to stay at 10. He would sell one, lose one, sell one, lose one. Every once in a while one guy would grow and that'd be great and we'd have expansion revenue.

25:37So, for you chunking up is like your HOA dudes are not the customer. The brokers and your COIs are the customer. And that's the whole mark All of your marketing is to them. And think about them as like, "What's their customer journey? What's their customer experience? What's the activation point? How do I re-engage those people um on a consistent basis? Do I run events for them? Like what ways can I serve them so that they always feel reciprocity towards me?" That's what I would do as like my overarching strategy. And I think that if you have an entire week of hours available to you right now, you can get super aggressive with it. Um and that would probably be like my like that's what I would do for 40 hours a week.

26:15>> Cool. Thank you. >> Uh I own a landscape design construction company in the Florida Panhandle. We sell primarily to homeowners. Last year we did around 1.5 million dollars in revenue, around 300K net. This year closer to 2.2 million and 400K net. Uh I have one main crew, seven crew members, and then I subbed out another like five guys. >> All right. >> Um

26:42>> [clears throat] >> I got about 300K in cash. And my big goal is to have you know, a 50 million-dollar plus landscaping construction firm with multiple divisions. >> Enterprise value? >> bottleneck right now What is it? >> Enterprise value or sales? >> Enterprise value. >> Okay, got it. >> Yeah, so my main bottleneck right now uh it's it's kind of a little bit of everything. Recruiting, ops, uh deciding where to place the big bets, you know, buy property, invest in crews.

27:18Um you know, where to put that big allocation of money. So really the main question I have is with everything that you have with context as far as what I do with uh the revenue, the net cash, what I have in uh you know, dry powder. Where do you think I should put the next investment that gets the highest compounding return over the next 12 to four or 24 months that'll get me the closer to my goal. More trucks, you know, buying or leasing a property that I've thought of that's high traffic area that to get me ideal clients, more marketing brand, or something else I'm not seeing.

27:55>> Yeah. Well, first off uh kudos on the question and context in getting to it. It actually gives me very helpful. Um so basically you have to 20x, right? If you want the $50 million enterprise value. So 8 million in EBITDA, call it 6x, 6 and 1/2x uh is what you're going to get in multiple. So that gives you your $50 million enterprise. You're currently doing 400k, so 20x that uh would be uh 8 million. So uh we got to get to like 44 million, you know, top line as the goal. So that's a great long-term goal, but in terms of short-term the best allocation of resources is always going to be the constraint because that's where you're going to get the highest return. And so the question is number one, why can't you do more of what you're currently doing?

28:35So what stops you? >> So right now I am kind of in everything. You know, I'm in what you call the swamp. >> Sure. >> You know, that one to three million dollars where I'm my hands are kind of in everything. I don't really like two to three tailors that can run crews or, you know, eventually division. Like I kind of have to put out all the fires. I have to make all the decisions. And I can market and sell. I've marketed and sold up to this point. And I think if all I had to do was market and sell, I could easily take it to 10 million plus

29:05>> Yeah. >> pretty quickly. >> Mhm. >> But I'm only able to allocate maybe 20 hours of my time per week actually go do consultations, market, and sell. >> What are your close rates right now? >> Close rates are right around 30%. >> Okay. What's the sales motion? >> The sales what? Sorry. >> How do you sell people? Like what's Walk me through the the process of selling.

29:30>> So the process is they usually fill out a form. >> Yeah, they usually come in um inbound through organic search, organic social. That's where I get about 70% of my lead flow right now. >> Uh-huh. >> 60 to 70%. And then they fill out a form. And then we schedule an in-person consultation where we decide what they want to do with their property. And I have a range of services from everything from, you know, fall refreshes to, you know, 150 K plus landscape design and renovation projects. So there's kind of a huge range

30:05>> And do you close on that meeting? >> No, it's a two-part It depends on what I do. So if it's a design, then we have to walk through the property, get a design, and then from the design, I try to close during the design presentation because I bring a proposal with all the numbers with it. >> Yeah. Got it. Um Do you have any like videos or anything that they see in between there?

30:30>> So I have my social media content. We post like three times a day between Instagram and Facebook. >> No. Yeah, I don't have a video yet. >> [laughter] >> Right. So yeah. Okay. So um one is There's two VSLs that are missing. Number one is VSL between, um, setting appointment and then and then you showing up there. So, it's VSL number one. Number two is between first appointment second appointment need a second second VSL. So, video sales letter for everyone who's listening. Um, we need to do that. I would do that so that you could like that might be the single largest influence on your close rate. And so, basically like you are properly priced without the correct sales motion. So, if we do that, you might boost like 50 maybe 60% close rates and at that point we'd be able to increase the price by like 25% 35% and so, when we do that, we would more than double the profit. When we double the profit, that'll then free up the cash so that we can hire some like a a crew chief um, or crew leader that we need.

31:27So, is there somebody inside of the company right now that you think is a leader? I'm guessing no because that person would have already come up. >> Well, there's one guy that is definitely uh, head and shoulders above everyone else. >> Okay. >> He leads. He leads the main crew. So, like the bigger projects, more complex projects. He's been in the industry for a long time and then he helps on the smaller projects whenever it's needed. And then he also oversees some of the subs. So, he's honestly kind of spread thin and the goal is to get a crew leader to make him a full-time project manager to make him a pure pro, you know, operations

32:00>> would that cost? >> all of the operations >> much would that cost? You know, 20 hours a week. Yeah, how much would that cost? >> Right now? He he's at about a 75k. >> How much would it cost to get him the help that he needs? You know, how much would it cost to get him the help that he needs? >> Another probably 50k position. >> Okay. So, two options here. I do think you should do the VSL regardless. I'll just say that. Number one. Number two, are you willing to make $340,000 so that you can get the time back to be able to like double the revenue of the business?

32:35>> 100%. >> Okay. So, if we wanted to go like two-step plan make the two VSLs, that should take a day. This is not long, right? And then number two, immediately go put out the ads that you need to or do the outreach to get the crew leader, which should be easier than replacing the main guy. Right? >> Mhm. >> So that you can debottleneck that constraint so that you can have that person handle most of the fires so you can get another 20 hours a week back so you can scale the business.

33:07>> Got it. Okay. >> That's it. >> And >> That's it. >> Awesome. >> Just do the VSLs, that'll improve the close rate. That's that's upside. If nothing happened, we should still put we should should still make 340 so that you can get the time back because you can still double it assuming no margins change. >> Right. I got you. And where do you think we should allocate the the large kind of, you know, amount of cash we're sitting on now?

33:33>> Well, you're going to need more You're going to need more trucks and equipment soon. You're going to need more trucks and equipment soon. That's what I'm going to save it for. >> Yep. Okay. >> So for your business, like where is capital going to go? It's always going to go towards the constraint. Right now the constraint is talent. So we're going to allocate of the 400, we're going to make 340, 60's going to go to talent so we can increase capacity. Once that talent comes in, you're going to free up your time to do more marketing and sales. With the improved motion, you should be able to close at slightly higher prices, which will make up for that 60K pretty easily.

34:00With that, right? We can still grow the business. What's going to be the next constraint? You're going to be like, "Why I don't have enough crews or I don't have enough uh you know, mowers, whatever, right? Uh at that point it's like, "Great, well I'm going to need to put out another 150 grand uh you know, for equipment or whatever." So it's like, "Great, we're going to put that out and that's that's how we're going to roll." And then at that point it might be cons- uh talent constrained again. >> Right. Got you. Okay. >> Cool.

34:24>> And as Yes, and I did have one more question if if I have the time. Um as far as enterprise value goes, cuz right now my business is kind of smash and grab. You know, we go in, we do the project, and more or less, unless somebody calls us for a project down the line, or you know, they give us word of mouth, you know, that's about all I get from them. Should I try to allocate, you know, maybe this is a 6- or 12-month play, more reoccurring revenue into the business to get a higher enterprise value?

34:52>> A thousand percent. If you want to sell this, yes, absolutely. So, the the best version >> be done sooner than later? >> Uh I mean, yeah, I mean, I would rather get you out of the weeds first, so like get your time back. The the first basically the first two steps that we just said. Get the time back. Then from there, with the extra time, is do I want to expand the existing model, or do I want to add more reoccurring? Either of those would be the next step. So, I would probably say I would add the reoccurring nature to the business. The reason I think this is important, or the way that I would think through this, is that most people that I've seen who succeed with this model, they will run They basically run this as their way of acquiring customers profitably, and then that serves as a phenomenal price anchor for the ongoing maintenance and continuity.

35:34>> Got it. >> So, it's like it's $75,000 for a whole backyard, you know, a whole backyard redo, whatever, you know, plants and all that [ __ ] right? And then afterwards, it's, you know, 800 bucks a month uh to to mow the lawn and and keep it going. You just made a $75,000 investment, you'd rather just have the guys who like know where all the pipes are, know they're not going to cut one of the one of the water hoses, you know, they just know where everything is, so you're just like not worried about it. Cool?

36:00>> Yeah, absolutely. And then as far as acquiring leads for that type of uh you know, caliber clients, that's what I'm looking for. With your with you going through everybody that you contractors and home services you see into the workshops, what's been the most effective lead source? >> It's not like most effective lead source, because all like there's many. So, Google search crushes for it, you know, for again, all of them every lead source is is sales motion.

36:28So, the way that you treat Google search inbound leads, it's going to have a different motion than how you're going to treat Facebook meta ads. And the conversion rate like you should be converting 30, you know, 30% of your, you know, Google inbound leads um at minimum. And then on meta it might be 10. Right? It's just going to be different because it's it's colder. It's interruption based versus intention based. >> Got you. Yeah, and the only reason I asked is because we've invested a lot, honestly, since consuming your content over the last 2 years. We've made like a thousand pieces of content and I haven't really really been into meta ads or Instagram ads and I've started to gain some traction and got some branding from it. So, that's why I asked.

37:04>> No, that's good. I mean, don't stop doing that. It's an and not an or. Cool. >> Got it. >> All right. Rock and roll. Appreciate you, man. If you have the goal of getting to $10 million a year, you can pretty much do it in any business. If you have the goal with with the exception of if you are a brick and mortar and there's a hundred people in your in your local market, probably not. But out outside of that, um that business model, even if you were in a tiny market, could get to $10 million a year. You just open up in new markets.

37:31That's all you do, right? Um and so most people's goals are achievable within their current vehicle. They are just too impatient and believe that there's another shiny object that somehow will get there faster. But if you take the natural extreme and say, "If I only did one thing for 40 years, do I think I'd be successful?" Probably. And so, if you knew that to be true, then that would give you a very strong reason to stick with whatever you're doing because let me give you a visual for this. This is the cost of switching.

37:55So, if let's say that you're in year three of your current current business, okay? Or current opportunity. It doesn't really matter what it is. So, this is one, this is year two, this is year three. Okay. Now, what people want to convince themselves is that they're like, "I want to start this new thing." Okay, that's fine. You want to start this new thing. So, let's see that year one of this new thing is higher. Okay, that's fine. This one is a a bit higher than this one in year two. But the thing is is that this is year one of this year, but it's year four here.

38:31You're still behind. And not only that, growth when you get bigger is easier than growth when you're smaller. And you're like, "Okay, well, maybe maybe this faster rate of growth I'll be able to catch up." Okay, well, now you're year two. But now we're at year five over here, right? And so, the head start that you give yourself by sticking with something, like sticking with it is how you get the head start. It's how you keep the head start that you already began.

39:05That's something I think so many people miss when they're trying to go to this next opportunity. Unless there is something inherently wrong with the assumption that you have, and skill is not the deficiency that you need to overcome, which it often is. Most of the time people get stuck on things that I call features not bugs, and this isn't my invention. Is that there's an element of your business that makes it hard. There's an element of every business that makes it hard. But that's what makes it a business, and that's why you're compensated for it. If you're in the cleaning business, the difficulty you're going to have is attracting and retaining high-quality talent. If you're in the fitness business, the difficulty is attracting customers and customer retention, because people are inherently really shaky um about staying with their fitness goals. But they typically stick with their cleaners for a really long time, right? And so, every business has elements that make it shitty.

39:51It's just the name of the game. And you know what? I'll give you a different frame on this. So, if you were to think about different business models. So, let's think about I doubt many of you guys have heard this, so this is pretty sweet. So, let's say that you've got uh e-commerce, you've got uh let's say you've got service, you've got um let's say info, education media, and let's say you've got SaaS. All right, so software. Okay.

40:21So, let's say that these are four different opportunities. Each of these opportunities has a different shape. So, info looks like this. Starts really fast, very difficult to scale. SaaS is the opposite. Starts really, really slow, scales really, really fast. Ecom is more like this. You can scale fast, but there's difficulty with typically cash flow because you have to continue to buy more inventory. Uh you have supply chain issues, you have to switch suppliers, switch 3PLs so they can handle your volume. All of this stuff happens as you continue to grow.

40:54So, it's more like Hold on. It's more like this. >> [snorts] >> That's the shape of ecom. Right? And then service businesses are more like this. The slowest, but they are steady. And so, when you see these four shapes, many of you guys just hit the crappy part of whatever the opportunity that you're on is, and then say there's something wrong with my business, therefore I should stop, rather than seeing it as what it is, which is this is just the nature of how this business works.

41:26This is a feature, not a bug. It's going to be harder for you to attract really good talent in engineering and build software, and you're probably going to be not profitable cuz most software sells for lower ticket, most, for a period of time, and it takes a long time to get a product to actually be good. And so, you're going to basically burn money, burn time for a long period, and then eventually you can scale to the moon, but it takes a long time, sometimes years to get there. A lot of people don't have that level of tolerance.

41:52Info, on the other hand, is kind of the exact opposite of that. You can make a lot of money really quickly, a lot being relative, right? You're probably not going to become a billionaire, but you can make a million dollars, and then very quickly it gets very difficult to scale it. And I'll say like info specifically more like coaching, things like that. And And for that is cuz there's almost no no revenue retention. People don't stay around. Once you learn something, you learned it. That's why people graduate school. They learned, right? Service businesses, the issue is people. Because it's a very people people heavy business. You have to constantly be hiring, onboarding, and training. And it depends on the service you're providing.

42:26If you provide weight loss coaching service or weight loss services, I use that as an example obviously cuz I came from that, you you have you have it's easy for you to get talent because lots of people want to talk about fitness and weight loss and and and and food all day cuz they're like really into it. So, it's actually very easy to get good talent. And for below average prices because people would do it for free. On the flip side, customers never want to do it. And so, they're canceling all the time. If I had an accounting firm, it's the opposite. Accounting firms have super high annual stick. What's the difficulty with accounting firms? Getting the people who can do accounting. And it's almost always this balance, right? If a lot of people want to do it, there's going to be a lot of competition.

43:02There's very low barriers to entry. And as a result, customers have lots of options. And they don't want to do it themselves. If there aren't as many options and you have a supply supply supply constrained industry, then you're going to have issues getting talent. Fundamentally. And you can look at this at the business level, but you can also look at the at the at the at the industry level. And so, I talk about demand constraints and supply constraints at the business level, but you can see if you are way off track based on do you match with your industry. If your industry, and by the way, if you are if you are the inverse of your industry, you're usually doing something either really wrong or really right. Side note.

43:37So, great way to think about it. If you can be supply demand constrained in like the cleaning business example that I gave. If you give supply constraints, sorry, demand constraints as in I could take a hundred times more customers than I currently am with my cleaning thing, well, then you've either figured out something really amazing with cleaners to like attract them in and like you're about to go hyper scale or you're just starting out and you haven't done anything yet. There's either something really right or really wrong with what you're doing. But most of the time you probably match the same constraint of your industry, and the problem with not being experienced is you think there's something wrong.

44:11And so then you end up spending multiple years not being all in on your opportunity, and then being upset that it's not growing as fast as you want it to grow. When in reality you never really gave it a shot because you're always looking you're kind of like the kind of like the guy who's in the marriage that they're like you know, they they were in love a while ago, and you know, they're things are okay, but they you know, he's not a wandering eye, right? He's always looking. He's always paying you trying to look for the next thing, the next girl, the next whatever. And he's like, "Well, my marriage isn't good." It's like, "Well, no [ __ ] You're spending all your time looking at these other opportunities rather than doubling down on the thing you got."

44:44And when you double down on the thing you got, usually when you take the mar- it takes way less time. I would say Okay, I'm not I'm not I'm not going to make broad sweeping statements on marriages, all right? But I will say that in my experience for my n equals one marriage it takes way less time to go from like we're upset about something to we're really good than it does to create the loyalty, the trust, and the track record that you have from that marriage with someone else. >> I am a real estate wholesaler. >> Okay.

45:11>> Um we're currently averaging about $450,000 a month >> Okay. >> in revenue. I would like to be at a million >> That's your spread? That's what you're making or that's like house volume? >> Uh that's gross. >> Okay. So what's your what's what's your spread on that? What's your take home on that? >> So we're at 40%. So right around 250, 240. >> Interesting.

45:35Weird. That's high. What kind of What are you wholesaling? >> [laughter] >> All right. So here's the um >> He's like, "Have you heard of brothels?" >> [laughter] >> So imagine a brothel, but now it's all midgets. Okay, keep going. You're good. >> Okay, but here's the challenge we run into. So we're currently at 450 average, yeah? We've had 700k months this year already.

46:02>> Okay. The challenge is every time we get to those numbers and I tried to Hey, you know what? It's time to ramp up. Uh for some reason, we tend to tank to you know, 200, 250. >> Okay. >> Um I'm sick I I have cause to believe it's the sales team and just >> Okay. >> You know, they have those power months where everyone you know, takes home 20, 30 grand. >> Uh-huh. >> And then the month after it's like >> Are they pure commission or is it split?

46:28>> So there is a base salary. >> Okay. What's the split between commission and base? >> Um so they're at 42 base >> Okay. >> uh per annum and then 10% of the assignment fees. >> Okay. >> of the fees. It's called >> Um all right. This is so So you have You have an ops issue. Which is sales ops.

46:54And so it's go like this is going to be much more weedy in terms of like tactics to answer this question. Um but it's like there's probably like 20 things that you need to be doing and you're probably doing like 13 of them and the other seven are going to be the thing that make the difference uh in creating the consistency of the team. That's at the surface level. At the at the at the deep root of this is who's the leader of the sales team? >> I do have a sales manager. >> Okay. So he or she is the problem.

47:24Because like sales at the end of the day is a culture game. Well, everything's a culture game, but like sales you can feel it so quickly when things are good or not good because the performance the feedback loops are so fast. Um but for whatever reason you do not have a culture of consistency within your team. I would wager that script adherence is low because you have such variability in close rates. Unless there's a change in lead quality, which would be something else. But are the leads the same like this month as last month?

47:57>> Yes, the leads are the same. >> Yeah, so it's a sales discipline issue, which then comes down to the training cadence, the scripting, um how people are being managed on a daily basis and weekly basis in terms of their career goals, how like you're doing morning me like it's it's this is all sales ops. Um I could I could like just start talking about sales, but like this is a pure sales ops issue. And so at the like there's

48:24>> [snorts] >> there's a two-step like I would approach this in two steps. Step one is we should do all the stuff that we are not currently doing or we should be doing. Everyone should be reading the same script. If they're not reading the script, why are you on this team? Right? Uh we need to have training that's every day to make sure that they are saying things the right way. We need to make sure that everyone memorizes the script. Some of you guys might have seen the YouTube video I put out like 2 days ago about this. But like they have to read the script. If they are not saying the script word for word, you cannot be on this team. You cannot take these calls. I'm getting these leads and not for you to go cowboy and make [ __ ] up.

48:57And that then if we cannot solve that problem because for whatever reason [snorts] you keep trying it and they don't adhere and they go off script because they just want to close the deals, it means you have a cultural issue, which is a leader problem. Because it means the leader is reinforcing behaviors that get people to go off script and there's no consequences for doing it. And so if you want to have a consistent world-class sales team, the process has to always go above the player.

49:26No one is above the process. And I do think that 95, maybe 98% of sales teams have no idea how sales training, how sales culture, how any of this stuff works. They just hire a bunch of people, see who closes deals, fire the rest, and so then you just have a bunch of mercenaries who work for you. But there is no culture. There is no team and it's every man for himself. And that is what creates this volatility in sales. And some guy says something and he closes a deal and the other guy is like, "Oh, I'm going to try that now."

49:56And there's no consistency across the board. And that also gets you in trouble long term because they start promising things and making deals that you can't cash. >> That makes a lot of sense. I um up until now, I mean, we have scripts, but they're more of suggestions. >> Guidelines. >> Yeah, I mean >> No, it's I mean, like I've done a lot of sales. Um like This is a straight out of the book checklist problem. Like we have to do all of these things. If we do this entire checklist, we will get this outcome. If we can't do this checklist, the leader is the problem because they don't know how to reinforce culture.

50:28Which then means that they're not able to get the right people on and the wrong people out, which sometimes means we might have to fire half the team to get the right people in so that we can build the culture we need to get to where we want to go. Cuz you are in like I showed the shapes of businesses, you are in a sales and marketing business. There's functionally no delivery. Like you're just basically like like are you are you guys doing outbound or like smiling and dialing or do you buy leads from setting teams? >> Inbound, just Google Ads. >> Google Ads?

50:55>> Yeah. >> Okay, so you have inbound leads that are coming in and then you close. Like that's the business. Like you buy media, you sell [ __ ] And so like this has to be a core like you have to be world class at this if you want to be world class at wholesale. >> Got you. >> But that's the key trick. >> In the events that I have to, you know, let go of half the team because they're just not good enough, where do you suggest I look for um

51:20>> It's not about where, it's about how. So, it's not like I'm going to find like the better you get at training sales and creating consistent sales processes, the less skill someone can have and create a consistent outcome within your team, which becomes the arbitrage of your business. Just like I said the cleaning thing before, if the whole constraint of that business is going to be finding, you know, basically taking a human being and then turning them to a great cleaner that actually shows up on time, you have to take the raw input of somebody who has no skill and just has work ethic, just has energy, and in 14 days you can get them closing deals on wholesaling. That box is the value that your company That is your IP. That is the trade secret. That's how your company is valuable.

51:58And so, when I say who versus how, like where do I find these people? You could run Indeed ads and find like for this caliber of salesperson, they're everywhere. Uh the issue is then what is the process and what are the expectations we're setting for those people as they walk in. And so, typically when you're doing high-volume sales like you are, how many guys you have on a team? >> Um currently 17. >> Okay. So, when you have that that like I mean this you know, mid-size. Uh someone comes in uh usually you get constrained because the amount of churn you have of people quitting leaving is about equal to what you have to hire and that's what keeps you stuck, right? And so, it's a process issue kind of on the demand gen side for talent. And so, usually you look at that and say, "Okay, what part of this can we screen ahead of time?" So, it's like let's send them the script before they even show up. So, people apply, we send them the script.

52:46And then send us a 60-second video of you saying the script. And then from the 60-second videos we're going to invite people to a group call, not one-on-one cuz we don't have time for that, and we're going to go quick drill, say the script, give a piece of feedback, see how they do it again. If they could take the feedback well and they were prepared, great. It means they're coachable, they have work ethic. Awesome. Now we can take you to a a job offer call. Somebody, you know, has attitude on the coaching, they're out. If someone doesn't show up prepared, they're out. Very easy screening. And so, you take 10, you pick two, pick three, they go to the next one, you make job offers. And that's the flow, but like the entire sales process of selling them on selling for you sets the frame for how the company operates. Like how disciplined you are and how militant you are in terms of how you set the frame for this is how we [ __ ] do things here.

53:34You either get in or get out. I do not care, but we win. And if you can set that frame, you will attract winners. And winning's not for everybody. And so that means that on the team there's probably some losers. And it's not for everybody. So that's the decision you make and that's from top down. So there's the tactics and then there's the root issue. I would try this first. If this doesn't work, you have to probably gut things.

54:00>> Thank you. >> Hey Alex, my name is Ryan Stern and I have um two physical therapy clinics and we roughly do 1.2 million currently. >> Total or per? >> Uh total. >> Okay. >> Yeah. Uh >> Margin? >> So very low. >> Okay. >> Yeah, it's like 10%. >> Okay. >> So I'm trying to figure out what >> practicing or are you >> Um no. No, I'm I'm out I mean temporarily, yes, for right now, but overall, no. I'm kind of out of the picture for that.

54:28So I'm trying to figure out what's the biggest lever to pull if I Cuz right now I feel like cuz we don't really do any marketing. We don't have to. We have plenty of patients. >> Okay. >> But we don't have enough providers >> Right. >> care. So right, it's a manpower thing, but the low margin, so I'm trying to figure out >> I literally went through earlier. >> I know. Well, I'm like I got my questions lined up and you already kind of answered them, but I'm still trying to figure this out. I mean cuz there are things that we can do on the profit margin wise. I could work on that.

54:58>> Walk me through your sales process. >> Okay. >> I'm just going to get to the heart of the issue. Walk me through your sales process. >> Okay. Um the sales process? >> Mhm. >> There really isn't any. I mean literally >> You're not seeing it. >> [laughter] >> People call me and they're like, "Hey, I need help." I'm like, "All right, let me see if I can fit you in. We can fit you in in a month, maybe two. You know, this person we can do >> And they're like, "I'm in pain." And you're like, >> "Deal with it." >> Yeah. >> No. Yeah. >> Okay. So this is what I want you to do.

55:23So you pick up the phone, right? >> Mhm. >> And before they come in, I want you to send them a VSL. So video sales letter that is mostly telling them uh promise, proof, pain. So basically like, "Hey, in this video, we're going to show you our unique method of how we get people from ooh, you know, boo-boo to yay-yay, right? And and we do it in less time um than you're probably used to." >> And then he's going to be me doing that, right?

55:49>> Yes. And so, if you're tired of insert pain one, insert pain two, insert pain three, then this is definitely for you. And just to give you an idea of what's possible, here's Angie, and she had pain most common pain number one, and in however much time, she got to way less pain number two. And this is avatar second most common avatar, and she dealt with pain number two, and this is what happened. Then here's three and three. And I'm only sharing that to share like you don't have to be stuck this way, things can change. From there, I'm going to lay out our four-step plan of how we actually attack this. So, one thing is old way, new way. So, the way that most people are accustomed to care is the run-of-the-mill model. They just bill insurance or blah blah blah. And our way of doing is more integrated because this is actually what gets you out of pain long term. And this is my special, you know, Ryan Stern process. And so, that's the big idea. Now, the question that comes up a lot of people's minds is what they think is incorrect, why it's wrong, what's right, proof. And the second thing that people worry about is what they think, why it's wrong, proof, right? And you do that for all the questions, and you're like, "Awesome.

56:44That's what this VSL is." Then, when they show up in person, you're going to ask them for their ID. First thing they walk in the door, "Hey, awesome, you're here for an appointment? Great. Do you have your ID on you?" They pull it out, right? We put it in. We say, "Okay, cool. Can I trade you for whatever card you want to use? It's just so we can complete the patient profile." Great. Now, we have card on file before we even ask for money. So, now we get the credit card. Now, at this point, you probably have them fill out the [ __ ] paper stuff of whatever, right?

57:12Make sure that the form they actually fill out has pain-based questions on it. So, we want to ask the same question 10 different ways of like, "How shitty is your life as a result of this pain?" Right? I don't like the circle here that like that doesn't matter. It's what things can you not do as a result of this pain. Okay? So, we have our pain-based cues. Then, they go into [sighs] the they go and uh get their assessment of some kind, right? >> Mhm. >> Okay. Now, they get their assessment. Let's just say the exam.

57:41And then, here, what do we do? Another VSL. Crazy, I know, right? We have them watch a VSL, which looks just like this one, except it's different examples. That's basically it. And then, they meet with the patient care coordinator, your closer, whatever you want to say, and you close. Now, right now, are you selling sessions? What are you selling is your packages? >> Uh no packages. >> Right. So, what we need to do is you need to switch to selling to goal, rather than selling the feature, right?

58:09You're selling a commodity, which is a session. >> Yeah. So, a bit of context, we are insurance-based. >> Okay. Understood. >> Just so you know that. >> Now, >> [clears throat] >> so, everybody's cash practice, how you do it. Um There you go. I answered your question. >> me on that. >> Yeah. Yeah. Now, um the reality is this. If you're in the insurance prac- like if you're in the >> Are you pure insurance? Everything's insurance? >> We do a little bit of cash, but not much, yeah. >> Okay. Um Dude, when you get into the cash business, you'll be like, I can't believe I did insurance ever.

58:38Um when you're in a fixed payment business, fixed it's price fixing, right? Like, you get paid this. >> Right. >> So, the only game that you can play is the bottom-up approach, which means that you have to, for the business, cut all costs and build it like Walmart. I'm just saying that's the If you can't control price, >> Mhm. >> then you have to control ops and costs. And so, you have to create your margin from a cost basis, rather than a value basis, which I hate,

59:06>> Yeah. >> but that's the game. >> So, cutting costs. >> Yes. >> Yeah. >> Unfortunately, which means it's way more about efficiencies, and like your entire ethos as a business means we run this lean as [ __ ] >> Mhm. >> That's what you have to do. And a lot of practitioners who are insurance only have a lot of emotional struggles with that, because they're like, I didn't get in this to to a pill mill or a, you know, this, you know, just a a mill of people coming in and out. It's completely destroyed medicine. That is the game you've chosen to play.

59:33>> Mhm. >> And so, if you stay in it, one, you can choose to win. Or two, the person who acquires you in the future will then immediately do that to your business, and then it will happen anyways. >> Mhm. >> Or the business will you'll eventually burn out and not want to do it anymore. >> Right. >> One of these three things will happen. Now, door number four is we learn how to acquire customers in a way because you can sell 3,000, 5,000 dollar packages all day long if you follow this process.

1:00:00>> So, do cash. >> Yeah. >> Not do insurance is the way you're getting at. >> You can You can stay in insurance. >> Yeah. >> But just understand that that's the business you're going to be in, and those are the rules of the game that you have to play. >> Yeah. So, then my goal for 5 million probably isn't going to happen with that model. >> It's not that it So, you don't have a an issue getting insurance customers, correct? >> Correct. Yes. >> Right. You have an issue getting providers. >> Yeah.

1:00:27>> Which means that you have to remove literally all cost besides providers since they are the bottleneck of the business. And so, then you have to create um basically, you need to have as much buying power on the scarcest resource. >> Yeah, that's what I'm been trying to figure out how to do that. >> Right. And so, it's basically you have to suck all of the the the the cost basis out of the business, and then you have to push that towards the providers so that you can attract more providers, and that's what's going to scale revenue. But you might be at 5 million with 500,000 or maybe, you know, 600, 700,000 dollars in profit. And at that point, you'll have five locations and be like, why am I doing this? Which is why a lot of people get tired of it.

1:01:04>> Yeah. >> Right? Because they price at the So, like, insurance companies price at the point of break even. >> Mhm. >> Like, they price it just enough for providers to get their heads barely above water and feel like the Navy SEAL test where you just bounce at the bottom and engulf air, right? And that's what you're doing every day. >> For sure. >> And so, we either need to play that game hardcore and basically be ruthless about the numbers and the math behind the business, which is probably not why you get into it, but that is the game.

1:01:30>> Mhm. >> Or you just have to learn one skill cuz this is a process that we can show you how to do. >> Yeah. >> You just have to get leads that are not insurance. Now, I'll give you a hybrid bridge. Is that okay? >> Absolutely. >> So, when people come in I want you to run them through this process. >> Mhm. >> But you're going to ask them do you want the best care possible or do you just want what your insurance covers? >> I actually wrote that down a little while ago.

1:01:57>> [laughter] >> And then [clears throat] take them through the process and say, "Hey, your insurance isn't going to cover this, but it's my duty to tell you that this is what's actually going to get you better." >> Okay. >> And if you just did that, that'll probably create the margin you need to get the people you need. >> And then just kind of when that starts working just double down on that basically. Build that side. >> You think you can do that? >> Yeah, I can do that. >> If you like this video and you're a business owner who wants to break through your current revenue ceiling, I just spilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling roadmap 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.

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