Helping a Salon Coach Untangle His Offers

0:00Unternehmer/Gast Uh, my name's Nick. I sell salon coaching and business solutions to salon owners. >> All right. >> I'm doing just about 2 million a year in revenue. I would like to be at 100 million a year in revenue or evaluation. >> Okay. >> And what stopped me was I actually own hair salons, too. >> Very different. >> [laughter] >> Uh, I own hair salons, so I talked to Ed. I got the line of permission, so those got to go. >> And Wait, what was the other business? >> Hair salons. I own brick and mortar. >> Okay, so you have brick and mortar and you Yeah, yeah. >> I'm doing a thing and I'm coaching a thing.

0:26>> Yeah, yeah. Wouldn't want to leave money on the table. Got it. >> So, my coaching offer that's where it gets tricky. >> Okay. >> So, I coach you, I help you, you're doing great. It's like done for you. Well, teaching you how to do it and you're like, it's too much for me. So, I'll do SEO for you. Then I'll build your website. >> Yeah. >> But, the website's like a main like the main source of how I track clients. So, I do it on the back end of retail. So, instead of someone looking for a haircut, I sell a popular brand. So, a TikTok was viral with like Amika. So, I just set a shopping campaign up a shopping campaign up for Amika. They find Amika.

0:57>> Amika? >> What is it? A hair line, like a hair product. >> Got it. Sorry. >> it's a hair product. >> You should know. >> Of course. >> And so, now they're in my world. So, I can retarget on Meta, retarget on Google. They buy the product. I put a gift card in the box. They're down the street. They become my service client now. So, I teach them that. But, they're like, how do I build a website? I'm like, oh, I'll do that for you, too, for more money. So, my money model is like where I'm kind of confused at where I >> So, you All right, hold on. I'm going to say it say it back. Um, you help salon owners

1:26>> Yeah. >> build out e-commerce stores. >> No, that's what it's kind of turning into. I coach them like leadership, marketing. >> Yeah. >> I'm like, oh, this is how I build my >> of getting customers though that you show them >> Yes. >> is to sell product online, call the leads up, and then bring them into their salon. >> Pretty much. Or put a gift card in the box and then retarget with the email. >> That's the prime but like that's the That's the That's the trick. >> That's how I did it, yeah.

1:50>> Yeah, got it. Okay. Um, and so, you have your salon. What's your salon's revenue? >> Uh one is just below 500,000. The other one's like 500,000 and 500,000. >> So, you have three. Got it. And then >> five. I sold two after watching your video on YouTube. >> Got it. Okay. So, You're good. Start with five, down to three. >> Yeah. >> You have the coaching business which does 2 million?

2:16>> No, that's like 700,000. >> Got it. Okay. Um >> But the margins are way better. I like it a lot more. >> Okay. Yeah, yeah. All right. All right. So, what's the issue? Just that it's a lot of work to do the strategy that you teach? >> No, the offer is like I'm like here.

2:42It's easy to build a Shopify store. >> Yeah. >> They're like, I don't want to [ __ ] do it. >> Of course. >> Can you do it for me? I'm like, of course I could. >> Yeah. >> For extra money. >> For money, yeah. >> And then they're like, oh, I can't do SEO. I'm like, I'm teaching how to do it. It's not hard. >> Clock. >> Go to hook up to the API. They're like, what are you saying to me? Can you just do it? >> Mhm. >> So, now I have like this agency type model like done for you done with you. >> Okay. >> But I want to really scale this. I want to build it. They stay. >> Okay. That's nice.

3:09Alex >> Yeah. >> Great. >> great testimonials. >> Okay. What's What's churn though besides they stay? >> I would probably say like I keep 80% >> per >> per 10 like out of 10 people, eight will stay. >> Per year? >> Per year, yeah. >> Okay, got it. Thank you. Um okay. So, you have 80% revenue retention or rather logo retention over an annual basis. Um you're building out these stores for them. And so, what stops you What is the limiter of you building out stores? So, I'm guessing you getting customers is not the hard part.

3:38>> I wasn't leading with that offer. >> Okay. >> like should that become my main offer? >> it sounds very interesting. It's the first time I've heard of that offer. >> And then how do I get continuity with that offer cuz I now it's just like one flat fee and then it would >> You have to manage the store and you have to manage the SEO. >> So, then I was thinking I was listening to our leads or our offers [clears throat] last night at 3:00 in the morning. And then I heard you talking about what you did for Jim Launch, so I'm thinking, "Oh, let me do 16 weeks or, you know, 10K for 4 months, build it out. Oh, you want to stay with me?"

4:07>> Yeah. I think that works great. >> All right, cool. >> Yeah. Um that What What's the problem? Cuz that sounds like that like that you're like, "I'm selling people. They want this thing. I say I'll do it in exchange for money. They say yes. They never leave." >> beginning cuz now I'm running those and I'm doing this and I'm getting distracted. >> Okay. If you got Let's magic marker this. If you got rid of the three salons >> Yeah. >> do you think you could replace the net income from those three salons with this business?

4:34>> Yeah. >> Okay. How long would it take you? >> Honestly, probably 6 months. >> Okay. So, do you think it's >> Yes, I have no sales team, either. So, I literally sell in the DMs. >> Yeah, yeah. We'll get to that. But like if you got your attention back because you sold these your story will be, "I had five locations. I successfully sold them and I will show you the model that I used to scale mine same way." But the nice thing that you have, which is what's really tricky with education, which is the business you're in, um is the stickiness. That is the hard part. So, you actually have solved the hardest part of an education business.

5:11So, like you have huge potential. Uh just don't get distracted with this other thing cuz now you actually have a vehicle that everybody wants and they don't stop paying for. >> I was way under priced, too. >> Yeah. Well, like we we'll keep going until we see some issues. But yeah, it sounds like you have a good thing on on your hands. >> So, should I lead with the full package rather than just coaching and the upsell? Or

5:35>> You're talking about plane flights, not Hawaii. Okay. They care about Hawaii. They want their business to grow. The vehicle that you use to get them there is is probably not that relevant. It'll be 30 seconds of your quote pitch around it being your unique mechanism. But besides that, it's not going to matter. >> Okay. >> Do you get what I'm saying? >> Yeah. And then on >> They just want to grow. >> One more caveat. >> Yeah. >> They can't fulfill. So they >> Okay, so you could centralize the delivery. >> yeah. We do that. >> Yeah, I think that's fine. >> All right, cool.

6:00>> Yeah. >> I just didn't want to be too spread out. >> Well, you are too spread out. But if we make the decision to get rid of the three salons, this business makes a lot of sense to me. You have a way a novel way which requires some tech and some other elements that I see as kind of competitive modes. If you just have pure information, it's very easy to copy. It's very easy to dilute down, blah blah blah. But because you are delivering an actual service, and you're delivering physical products to the customers, both of those have some elements of stick that education doesn't. But you're using So like what's amazing about education businesses is that you can acquire customers really easily, and there's lots of gross margin. The downside of education is that it's not sticky at all and people leave, right? And that's it's supposed to be that way. You're supposed to learn and then leave and graduate.

6:40That's kind of education works. And so we want to use It's ham and garlic, right? It's like we want to use the education get them in, but then your monetization uh mechanism, unique to you, which is very cool, is that you have something that's really sticky. Now, we just have to tweak the pricing to make sure gross margins are right. But otherwise, you have something that's easy to sell, and they never leave, which is like >> Cool. Great. >> So I think I think you just need to make a little bit of like a who do I want to be when I grow up. If you're clear that this is the direction you want to be in, and you think you can replace your net income in 6 months in that business, then do it.

7:14Alex Like I think you're you're straddling the line because you've spent probably however many years building, you know, figuring all this stuff out. >> Yeah. >> And it feel it's hard to get rid of, you know, five stores. Uh but >> The uh like the the service part of it, like a done-for-you, it was just thrown in my lap. So I was like, am I getting distracted by doing that? >> I don't think you are >> Okay. >> because of the revenue retention. If you had said they churn out uh at like a high rate, I would have said screw that. Just stick with the high high margin education. We'd have a different conversation. But because you have 80% logo retention in a SMB audience and there's zillions of them, that is very interesting.

7:50Alex And so I would say great, there's a zillion of them, it's a way hard ticket, do as much of that as you can. I was I kept asking like what's the constraint cuz I was waiting for you to say like I can't build that many of those stores, but it doesn't seem like it's that complicated to do. Right. And so >> Just [ __ ] do it. >> [laughter] >> Like I think you're just sitting you're straddling the edge. Inch it, John. >> Yeah. And pricing too, I got to figure out. But I got your book so >> Well, more is probably a good place to start, but I would say before you [ __ ] with any of that stuff, get rid of the three stores. And I would say do not obsess about the valuation and what you could get and you know what? I'm going to tweak it, get it ready cuz the the short story that I'll tell you is when I had six gyms, I was a similar situation.

8:31Um I thought the launch business was going to be like I could see the writing on the wall like this is going to be big. And so I fire sold six locations in 90 days. Like I sold it for parts. I think I sold it I sold six for the price of like one and a half. Like I really just gave them away of like if you'll take the lease over, I'm out. I didn't care. And then within six months you're almost doing a million a month.

8:57Alex And so that's not normally what happens, but in with your background, your expertise, the narrative and the fact you already have a proven offer, so we already know the thing that converts and we already know it sticks. To me that's like a I don't normally give this advice, but yeah, I would just like just make the jump. >> So for continuity purposes, get them in four months. Hey, you want to stick around? >> Well, of course they're going to want to stick around cuz it's like oh yeah, you so you got all the SEO and the store management and the and the products?

9:24They're like no. And you're like great, just keep paying. >> And for the model, I do group coaching with that or like that's fine. Same [ __ ] >> Yeah, just keep it as much leverage as you can on the front end cuz you're not having any issues selling it. Don't sell like right now you're about to go scale so I wouldn't start introducing unscalable options. >> Okay, cool. >> If you're 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 scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for future 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.

10:15And 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-confine the business and you're trying to scale, we'd love to help you out. On the thank you page, you can book a call with my team and we will look at the business, see if we can help and if we can, we'll invite you out to Vegas and we'll do this in person live.