SEO Agentur hängt bei 1 Million Dollar fest

0:00Unternehmer/Gast I sell SEO websites and PPC to roofing, HVAC, and home services company companies. We do uh 7 million in revenue. I would like to do 14 and sell for 20, my company for 20. Um and the kind of the thing holding me back right now, I think is margin. I'm at like 13% EBITDA. >> Yeah.

0:22>> And then I think it's trying to figure out how to capitalize on market risk uh with AI coming up. So, you you were answering some of that just the other day. >> Yeah, I think um are you guys already doing like LLM SEO? >> I'm I'm building that service out right now. >> Yeah, cuz that's I mean, it's absurd. I think I think I saw this this morning like GPT has 500 million users weekly. That's really hard to comprehend, everyone. Like that's a lot. It's a lot a lot.

0:52Um that's more than like social media platforms. Like it's a lot. Um and it's making recommendations for commerce. And I'm sure they will monetize it in the whatever future. Um but yeah, I mean, that to me that's like what's my future proving thing? That's probably like thing one. Um thing two is we have to Do you have a really good finance arm or no? >> Uh yeah, we have a fractional CFO and then my wife runs money.

1:18>> I'll say no. Um not as a not as a slight just because in the business that you're in, typically it's more op- ops heavy. And so, you have to be more financially disciplined in that business than you can get away with in let's say a course business, right? Um that being said, what's um what's turn right now? What's your price point? >> Uh turn is 5% a month. >> Okay. What's your price?

1:43>> price point is like uh average is like 5,000 a month. >> It's pretty high for SMBs. You said 5%? >> Yeah. >> Okay. And then you're currently doing um You said 7 million? >> Yeah. >> Okay, so you got 7 million here. And then how many units are you selling a month? >> Um like 10.

2:09>> So you're going down right now. >> Or I just have the wrong number on the how many we're selling. We're going We're going up very fast. >> you said no no no actually sorry. I I did the math wrong. >> Yeah. >> That's on me. Yeah, so you're pacing right now um 12 million in terms of your run rate right now. So you want to get to 14. You can change nothing and get to 12. >> Mhm. >> So I think we just need to make sure that the additional 5 million that's going to come is going to drop to the bottom line.

2:39Alex So do you have operating capacity right now in order to to scale the business? >> We're building out near shore. So that's going to allow us to do that, I think. And so we're at our first five employees. We're trying to add like 10 more in the next like 3 months with near shore. >> Yeah, I think like So I'll give you the the the 12 months ago answer and then I'll give you the today answer. So the 12 months ago answer is yeah, I would probably near shore almost the whole team and then that would that would give you the margin back that you need.

3:07If anyone's curious what this is, this is how you calculate the hypothetical max of a business based on its sales velocity and LTV, which is what I was trying to get to with you but you had a zero so there's no point. But you sell 10 units a month, 5K, 5% churn, so 100K LTV times 10 is a million bucks a month. So 12 million is your where you will be projected to. You're currently at seven so you've got 5 million that's going to come if you change jack [ __ ] about the business. So you're going to have 5 million more in revenue that's going to come in and what we need to do is make sure that one more of the existing revenue you got drops to the bottom line and for sure the additional revenue drops to the bottom line. What does it cost to deliver on a customer?

3:45Alex >> Uh we have 50% gross margin. >> Yeah, that's probably why. So if I run service businesses, my rule of thumb is always 80. So, I just don't start. >> Yeah, I know. That's what you said. I feel like that's a little crazy in our business, but I would love that. >> I I just don't I I would just challenge that. >> Yeah. >> Just cuz like I'll I'll say this, industry averages you can completely throw out. Because American averages are overweight, divorced twice, going to die at like 70.

4:14So, like why would I give a [ __ ] what the average is for an industry? Like most people suck at everything, including their business. And so, why would I why would I measure myself against that benchmark? It just like it all it does is anchor me to lower standards. So, there's no reason why you shouldn't have an agency that runs 50% margins. Zero. You're also an SEO and you're niche down. There's tons of SEO agencies that run 50% plus net margins.

4:37Alex And with AI and nearshoring, there's for [ __ ] sake, for sure you can run better margins than that. And so, I say that just cuz I want to break this belief and being a little bit crude, but um the nearshore is the 12 months ago answer. The today answer is you need to become an AIG. Um because I'll bet you that 80% today of what you guys do is automatable. Not tomorrow, like today 80% of what you do AI can do.

5:03>> I think I've been thinking of that as a threat, but I think I'm just trying to you know >> Oh, why? >> to capitalize on market risk, help think a little bit I'm trying to flip that in my head to capitalize >> think of this as a risk. Think of it as a risk for everybody else because you're coming. >> Yeah. >> Be the big bad wolf, not the sheep. >> Mhm. >> Like for real. Cuz like I mean, what's the other option? >> Yeah. Yeah.

5:27>> Like imagine like from from heaven there was this tool that they were like, "Hey, I can 10x the productivity of your entire staff and the rest of your competition aren't going to do it because they're lazy." Would you be like, "I want that." It's available. >> Yeah, we're we're incorporating a bunch of things, but I think I'm like a thousand hours in on ChatGPT right now and I don't know if I'm really using it as like >> No, yeah, you You have to be doing it You have to be You have to get up to speed on agents.

5:53You have to get up to speed on on like make.com and how you can basically do kind of like 2.0. Like what Zapier automations used to be is what kind of the new make.com type automations. Like all the I can I can It's such an ops-heavy business and it's so tech-oriented that almost everything that your team does right now, minus account management, can pretty much be done by AI. So, you have a big opportunity. If you wanted to sell for 20, you could get to 12 with 6 million in operating in margin, and then you could sell for 20, for sure.

6:22So, like the business you have right now, with no real changes in terms of pricing and sales motion and anything like that, can get you there. Like we just have to improve the operational flow within the business to get you the exit you want. Like this is in shooting distance. You just need to learn more [ __ ] For real. Like that This is good news. This should be good news. >> Yeah. >> I'm just speaking aggressively, but it's good. Does that help? Okay. >> For sure.

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