"Why Am I Making Money and Keeping None of It?"

0:00Alex. >> What's up, man? What's that? >> Congratulations on the world records. >> Oh, thank you. Tell me about your business, man. What's What's revenue? >> Year-to-date, $413,000 and we're at $43,000 profit. >> Okay, so 10% margins. So, 400-ish K top line, 43 K bottom line. Okay, what's What's the business?

0:26>> So, we do accent walls. Uh uh feature walls in people's houses, and we're split 50/50 residential and commercial. Our residential clients, we have twice as many and average uh job orders half the price. So, that's that's one question is uh how do I decide where to focus, residential versus commercial? >> So, it's a pretty classic situation that you're in. I would say instead of thinking about where to focus, I'd be like, where do I focus my advertising?

0:55So, you want to focus the advertising on the place you're going to get the most leverage. It's going to be the people who pay you the most. So, basically, what's the difference between LTV to CAC on each of those two types of businesses or types of customers, excuse me? >> Um LTV's better on commercial clients cuz they come back. Residential customers >> Heard. What's CAC on either of those? >> Um I I don't have clear numbers on that.

1:21>> Okay. How much more work is it to get a commercial versus a residential? >> It's probably twice as much work. >> Okay, how much more are they worth to you? >> And on average, they're they're worth double. >> Okay, so it's twice the work and they're worth double, but they also come back. >> Yep. >> Right, so all of your effort should go towards commercial because that'll build a recurring base of business for you.

1:46And basically, as soon as you can get 70-ish, you know, basically, if you can cover all your all your costs and I do think you're probably mispriced, too, because your your margins are bad. Um I'll do it, you know, we'll do that do that on another call. But, I'll say right now, if you just want to listen to me blindly, um, just raise your prices by 20% at minimum, okay? Across the board. Your margins are too slim. >> One other question, I started a school group cuz I also like teaching for carpenters who are just starting out.

2:16Um, which is really fun, but then my focus is split. So, is that okay to be doing both or should I just do one? >> No, you need to focus, man. I would say if you want to if you want to if you want to have a community, have it be for your customers. >> Uh-huh. >> Right. And then maybe they'll buy more stuff. Cuz you're in touch with them. It's a long-term lead nurture. >> Yeah, keep it push the customer >> Keep them hot, baby. Keep them hot. >> Okay. Okay.

2:41>> Okay. 20% price raise, switch your community to your customers, focus all your marketing on commercial because that's recurring, and to make sure that's recurring, actually put them into a sequence to get them to come back. >> Amazing. >> Cool? >> Let's talk. >> Rock and roll. Appreciate it. >> If you like this video and you're a business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling road map 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.

3:12Again, absolutely free, and since you're a business owner, I appreciate you and enjoy.