← BNI & The Power of One
BNI & The Power of One
BNI 795: Business Matters 115 - All the Noise in the Market Right Now
00:38:08
In this episode of Business Matters we discuss all the current noise in the market and how it effects us.
Loading summary
Transcript121 lines
- [00:00]
Michael
Sac Matters podcast, part of B&I Power of One. We're back. It's been a minute.
- [00:35]
Lindsey
It's been a minute.
- [00:36]
Michael
We're back. Michael, how are you?
- [00:39]
Lindsey
Doing well, doing well. Lots going on since our last podcast.
- [00:43]
Michael
Yeah, the world is changing rapidly. I would say that it is. We just had the big presidential speech, so we're recording this on Wednesday. That was last night. And, you know, there's all kinds of, I think, fear and uncertainty and confusion and all kinds of things going on in the world. We obviously. So you don't get into politics of, like, you know, what we think of in terms of politicians. But right now, the hot topic is tariffs and inflation wars and stock market.
- [01:18]
Lindsey
Plummeting and energy costs going up.
- [01:21]
Michael
And eggs have never been as expensive as they are kind of thing.
- [01:24]
Lindsey
Eggs have never been as expensive as they are, and that's kind of true for almost everything on an annualized basis. It is a little bit shocking with how much certain things have gone up, but those. These things don't just happen at the drop of a pin.
- [01:44]
Michael
No. Right. And I think what we. We should talk about a little bit is just generally, from a business standpoint, what are the things people should be thinking about and, and looking at? And, you know, I think the biggest problem with all of it is the. None of. Not many of us, I shouldn't say none of us, not many of us are educated enough in, like, how these things work. And we just get bombarded by headlines and, you know, talking heads and all these things that it causes just this fear of unknown, like when some people start really blasting off tariffs, you'll hear one side beings the greatest thing in the world and the other side being it's the worst thing in the world. And like, unless you studied economics and what tariffs you're going to do, it's like, I don't know, you know what I mean? Prices are going to go up. That's what you hear. And it's like, well, is that true? Is it not true? And what do we. What can we control? I guess, yeah.
- [02:34]
Lindsey
And. And I think what we can control is especially, I think, for the audience that's listening to this particular podcast, you know, you're a solopreneur, you're a smaller business, you're operating in a local community, you're doing networking and all of that. I think the first thing to not lose sight of is don't forget to do those good things that you're already doing in your market. I think that's number one. Number two, you Know, it's hard to avoid all of this noise because everybody's talking about it, but a lot of it is just that it's noise. You know, if you're, if you're an accountant, this is not going to impact how you price your services to the market. Right, right. If you're a plumber and you're getting parts from overseas and things like that, or from other countries, you know, let's face it, a lot of manufacturing things have not been done in the United States in a long time. So there's a potential for, you know, parts and knickknacks. You know, if, or if you go to Home Depot and you're going to buy stuff that there could be some price increases on foreign made goods, that may be the case. I think the challenge though is to make sure that you're staying true to your local market in the community that is supporting your business. And you know, there are going to be cases where you probably have to take an increase. So if you're, you know, if your cost of energy goes up precipitously, you know, you may have to charge more, you know, in order to kind of get out there, but you also have to not. And I think this can work two ways, but falling victim to the hype, meaning that you feel like you have to price your products that you currently have at some rate based on what's in the news, and then say to the consumer, oh, well, you know, the cost of everything's going up and da, da, da, da. And so I got to raise my prices. Maybe you have to. But there are a lot of people who do that kind of stuff and they don't actually have to. So right now the, the, there's nothing in our pipeline that's tariffed as an example.
- [04:40]
Michael
Yeah, yeah. Except for you're talking about Target. Right.
- [04:43]
Lindsey
Already they're already saying that they're going to be increasing prices on produce by this weekend. And it's like, well, but the produce in your store today, on Wednesday, is there new produce that's going to be there? Maybe, I don't know. Is it already going to have been subject to those taxes? Are those goods in fact being taxed?
- [05:07]
Michael
Right.
- [05:08]
Lindsey
So when, when they say that, oh, all the tariffs on produce. Well, it's not on all the produce, it's on specific produce. So, you know, you have to, as a consumer too, I would just say the good advice is to make sure that you're really paying attention to what's going on. You may have to shop around a little More. But I, I think from a business perspective, the, the challenge is really going to be not getting caught up in the hype and then making mistakes where you give the impression that people feel like you're gouging them. Especially if you're in a space that is either hard to justify an increase. Like if you can't give a great reason, if your reason is, oh, tariffs, and yet you're like, you're not doing anything with equipment, well then what is your tariff on? How does that increase your prices? I think that's one thing that you have to be prepared to do that if you're going to do anything that potentially adversely impacts people's impression of you, you need to have a good reason why you're taking a price increase. I used to have this a couple of years ago, remember when gas prices went up quite a bit a couple of years. And you know, all of a sudden anybody who came out to your house for anything was started to charge these driver fees. Like we're just, it's just a fee to show up.
- [06:27]
Michael
Right.
- [06:28]
Lindsey
And it was like because of gas prices are up and all this kind of stuff. And you know, but then you could do the math and say, well, you're not spending that much in gas to get out here, so what are you doing? You know, And a lot of those fees are gone now because people were just like, I'm not paying it, sorry, you lost my business. And I think that they did that because the news was gas prices are up and everybody's, you know, cost is going to go up because of it. And so all of these people that were driving around to come out to you were using gas prices as an excuse to add these show up fees.
- [07:02]
Michael
Right.
- [07:03]
Lindsey
And a lot of people got mad at that because it's like you're driving eight miles from your place to my house. So even at that you're spending a gallon of gas. And a gallon of gas is say it's $4. Why am I paying $99?
- [07:16]
Michael
Right. Right. I think any of these times open up to the gouging part. Right. It's, and that like you said, I, pricing in general is all based on value. So it's, you know, you can't just, I don't think you could just jack rates because other tariffs are coming. So I'm jacking rates because they're not going to see the. You better have, like you said, a really good value pitch.
- [07:37]
Lindsey
Yeah.
- [07:38]
Michael
What you're doing to say that like you gotta, if you're gonna raise Rates or adjust pricing based off of these kind of things. Like you better be able to tie it back and show it like, hey, you know, we were our price. Especially because most of those are gonna be trades related, I think, right. Supplies, like that kind of stuff. It's like, yeah, this is what the job was, this is what the job is now. And the increase you can see here is based off this price increase on this product. It's not that we. The price increase on the product went up 10 bucks, but I raised the prices 100 bucks, you know, I mean, just to take advantage.
- [08:07]
Lindsey
Well, but this is what a common practice and you know, so I'm going to spill the tea a little bit. But a common practice is. So say you have a part that you would Normally sell for $10.
- [08:19]
Michael
Right.
- [08:20]
Lindsey
That part oftentimes only costs you a dollar or two.
- [08:25]
Michael
Right.
- [08:25]
Lindsey
So say there's a. The tariff isn't on the retail price. The tariff is on the cost, on the cost of goods sold. Right. So if you have a 100% tariff on this particular item, so that cost goes from one or $2 to $2 or $4. What people would do is instead of charging $10, they'll charge 20.
- [08:49]
Michael
Yeah, right.
- [08:50]
Lindsey
So not only have they, they've so, so from a cost plus perspective, now they're incredibly more profitable than they were selling it at ten dollars.
- [08:59]
Michael
Right.
- [09:00]
Lindsey
Because where they had a eight or nine dollar profit, they're now having almost twice that.
- [09:05]
Michael
Right.
- [09:06]
Lindsey
Like a 15 or 16 or 17 profit. So, you know, on the same item and you know, people can find. People have to know that, you know, this stuff kind of happens and if you can get it, great. But you, you running, you're running up against the incredible amount of information that's out there for people to do research. And so if they feel like you're gouging them, they're going to call you out and they're going to talk about it. So if you've, if you have to take a 20, 25, 100% tariff on a part, you just have to build that extra cost into the part. So instead of it being $10, maybe it's 12.50.
- [09:46]
Michael
Right.
- [09:47]
Lindsey
But if we put it out at 20, people are going to get upset. Now most people do that actually. So, so if a business, oh, we got this thing, you know, this, this happened with the, with the price of wood, you know, during the COVID thing, right? Where it was like, there's not enough supply, whatever. No, there was, there was plenty of supply. It was just that it was getting tariff to death and. Or taxed to death. That's the difference between a tariff and a tax. But it was taxed to death. So, you know, you ended up paying twice as much per board foot, you know, in 2021, as you did in 2019. And it's like, well, why.
- [10:22]
Michael
Right.
- [10:23]
Lindsey
They're not harvesting fewer trees, you know, and they. And their argument was, well, you know, with all the COVID restrictions, you know, we can't have as many people out there working, so we're not processing as much. And, you know, I think in the beginning, that was the case because people didn't know what was going on. But that was, you know, there was never been as much building as what happened. Right. That Covid thing. Right. Renovations, new home starts, new home construction, complete teardowns and rebuilds. All the stuff. So you need all the supply. So it's like, well, there was plenty of supply. You know, it might have been slow getting to you, but it all ended up getting caught up. But the prices didn't really go down because they could get those prices for it, even though the costs were relatively the same as they had been prior. Yeah. So, you know, I just think that, you know, you have to be careful and, you know, you have to be realistic. So if you are somebody that relies on parts. Yeah. You have to make sure you're not getting killed. You know, as a business owner, you know, you're in business to make money, provide value, and then make money from that. But if you go overboard, you know, it used to be people didn't know. Right. They couldn't tell you if you said, well, you know, hey, cost is going up and da, da, da, da. You were kind of forced to pay out of ignorance. Now, you might be forced to pay just because you need something done, but the amount of information about what things are, what things are happening, if you get through the muck of listening to pundits, and this is why I don't think you should pay any attention to anybody talking on TV or online. Go do research into what these things mean for your business and then price things accordingly.
- [12:02]
Michael
I think it's also important to be educating your market on it, because the fear isn't just on the business owner side of, like, how do I price things? And not. It's a lot of. It's not going to be on the consumer side. Right. So there's a lot of people who might be holding back from buying your product or service because they fear the price is going to be up because they're hearing the price on, everything's going to be up. So maybe they're like we can't afford to do that project, we can't afford to do that service. And, and it's just as important to be out there teaching your market like hey, these tariffs, these news doesn't affect us. So if you were thinking about, or you're in the market, like don't worry about it. You know what I mean? Because generally just the general public, all you're hearing is prices are up, prices are up, prices are up, interest rates are up, prices are up, price are up, the tariffs are coming, prices are going to be up. Like, so it would make you hesitant to be like do I buy the car right now, do I buy the refrigerator right now, do I redo my kitchen right now? Do I do these things I wanted to do or do I have to wait until pricing comes down? And it could just be completely false for that product and market that prices are up.
- [13:02]
Lindsey
Yeah, you know, and I think that, but those are the questions you have to ask. And, and you know, I think we, in this podcast and I think in, in BNI and your members in particular, the, the focus is really on building relationships, right. That that kind of pay dividends over time. And I think that business owners need to kind of take that same mentality with their consumer is that if you're just raising prices as an example to raise prices as is because you see it as an extra way to get some profit in that's thinking of immediacy. And I can do this right now, but what's if you don't ask the question, well what is that going to do to my reputation in the, in my market? What's that going to do for my long term success? You know, if you don't ask those questions, you're short changing yourself because you might, you've gone a con from a relationship mindset to a transaction mindset. And I'm all about capitalism and making money where you can, you know, but I, I think you have to do it with a long term vision in mind and not, you know, necessarily doing it for right now today if you're just thinking about like what's right in front of your face and you decide to kind of make a snap decision that might bite you in the butt.
- [14:17]
Michael
True. But the other benefit of being in bni, most of these people who are listening are, is it gives you the opportunity to educate that market. Right. So you can be right now. One of the questions I always ask when and we do training and I usually get like a blank stare is I go, how many of your members know what the most common misconception about your business is and how to answer that objection. And they're all like, huh? And it's like. Because that's probably the first thing they're going to hear when trying to set up a referral. Well, you go off that now and that would be a thing I'd be talking about, hey, here's the most common misconception about my industry right now with what's going on in the world. And here's. If you hear it, here's how to discuss it. You know, I mean, like, here's a line you can have or a way to get over that objection. Because that is what happens with fear, right? Is there's all this misconception about what's real and what's going to happen and all these things because they're just listening to, again, talking heads who are selling a point. And you know, you have this opportunity uniquely when you have a network like BNI where you're meeting weekly and you've got that dedicated time, it's a unique opportunity to start educating your market on those kind of things. And I would be utilizing that time to do that.
- [15:37]
Lindsey
Yeah. But I think, you know, that kind of goes hand in hand. What we've always preached is be out there talking about what value you add. You have to know what value you add to the market. And I think it's like anything else situation comes up, like what we're dealing with now and, you know, how do you answer that when asked? You have to spend the time strategizing about how to respond to market conditions.
- [16:02]
Michael
Yeah, I don't think most of my members have even thought about that question for themselves. Like, what's the most common misconception in the market about you? Or you're not you personally, but your business. And how do you answer it? And then how do you prep these other people answer?
- [16:14]
Lindsey
Yeah, but it kind of, I know we talk, we kind of talk about in, in the past, we. About knowing your story, knowing who you are, making sure you have that at the ready. And I think this is like anything else. You have to kind of spend the time to think about the actions you should take and the possible consequences thereof. And, and that's just, you know, pricing strategy, all of that stuff. But then how do you explain it? How do you talk about it? But I like what you're saying. Like if you go out and ask people what their impression of your business is or what you, what value you add, you might be shocked at what you hear.
- [16:54]
Michael
Yeah.
- [16:55]
Lindsey
So you shouldn't be. And if you do it the right way, which is don't take answers personally. If you're going to ask a question, you know, just listen.
- [17:06]
Michael
Right.
- [17:06]
Lindsey
Be ready to just listen. And don't get defensive. What you hear might help you navigate some of these types of situations.
- [17:15]
Michael
Yep, yep. 100. It's preparation. Right. You know, being, Being aware of what that there's a lot of times, we'll bet when things get crazy, some people will just bury their head in the sand too. You know, I mean, ostrich. And just be like, I'm going to ignore it. And it's like, that could be detrimental. Because again, misconceptions start flying. Right.
- [17:34]
Lindsey
Yeah.
- [17:34]
Michael
Those, like, theories and those fears. People will talk about their fears a lot. Like, people are talking about all this craziness, like, right now. And if your market's uneducated, then that could be doing a lot of damage to your business. Right. And you see that with like, you were in the industry that's getting crushed right now because of interest rates. Right. The mortgage industry. And everybody's talking about high interest rates. And it's like, yeah, compared to the ultimate lowest of all time. They're high compared historically, maybe they're not. You know, I mean, they're not high at all. Compared to the message gets out of control.
- [18:08]
Lindsey
Yeah. And, you know, my former company spends a lot of time educating people about historic rates.
- [18:16]
Michael
Right. Yeah, just.
- [18:17]
Lindsey
And going and showing their salesman how to like, well, hey, but here's what it was 15 years ago. Here's what it was 25 years ago. Here's what it was when your parents bought a house. And so, you know, by showing that, it starts to not just remove obstacles, you know, to a sale, but it starts to give people peace of mind that this isn't something that's new and unique. So just for the record, everything goes up over time.
- [18:45]
Michael
Right?
- [18:46]
Lindsey
All things go up over time. Costs increase forever, always over time.
- [18:52]
Michael
You know, that's why inflation is not negative. Right. They're just trying to get it to a, a percentage point that's still positive.
- [18:58]
Lindsey
Yeah.
- [18:58]
Michael
You know, means it goes up. Like it's just going up slower.
- [19:02]
Lindsey
It's just going up slow. But it, it does. It does go up over time. And I, and I think, you know, we're in our markets in particular, consumers are kind of trained, and it's kind of the fault of all the people been selling stuff for a Long time we've been trained to have, like, the least expensive things ever. Everything is so cheap. Services are so cheap, Food is so cheap, Goods are so cheap. And not necessarily meaning cheaply made, although a lot of them are, but cheap and inexpensive. And maybe they shouldn't have been. Not all of them.
- [19:38]
Michael
Right.
- [19:38]
Lindsey
You know, this is where, you know, how you add value becomes really important. You don't have to try to sell to everybody.
- [19:46]
Michael
Also fair. Yes.
- [19:48]
Lindsey
You know, you have to know who you are. You have to know what value you add. And if you explain it well, you know, you're probably not going to have kind of the big highs and deep lows that companies who just kind of coast go through. And we see that all the time, you know, see, you know, hey, I'm standing up tall as an ostrich when things are good. Right. That super tall bird with the head way up here. And then all of a sudden something goes down and boom, the head goes all the way into the sand. So that's a big wave. It's like. And then down. I think from a predictability standpoint, from a business success standpoint, from planning standpoint, you need to be closer to the middle.
- [20:27]
Michael
Yep.
- [20:28]
Lindsey
And, you know, you're going to have swings that have nothing to do with you, and that's okay. But you should be mitigating all of those things, because if you bury your head in the sand, people will lose confidence in you because you've lost confidence in yourself 100%.
- [20:43]
Michael
Yep. I also just, I know we're going a little long, but put it out there a little bit, too, with all this craziness is opportunity. Right. So on a lot of different fronts, we talked about, you know, your, Your past industry, the mortgage industry. I think I saw a stat the other day that was like, there's less than half as many mortgage reps as there was five years ago in the market.
- [21:08]
Lindsey
Yeah, it wouldn't surprise me. You know, that happens in, in real estate agents, too. It goes up, goes. It goes up and down quite dramatically.
- [21:16]
Michael
Right. So to me, that presents an opportunity for those who've been sticking with it. And then, you know, or even if you're like, oh, that seems like an industry I want to get into, but times, it's like, now's probably the time to get in. When the market is the, you know, most accessible in terms of competition, you've got like, yeah, the stock market right now is like, you know, pulling back and, you know, because of fear and everything else. And to me, it's. I look at that and go, okay, well there's an opportunity. Opportunity. The next millionaires and billionaires are going to be made when that wave starts going the other way. Right. Are you prepped for that? Same for business. Like, this is the chance where I don't mind. So just to be full disclosure, BNI generally globally, so not just like our region tends to do, see growth during down economic times. That's the crazy part because everybody's like, that was busy, isn't busier. They're looking to do something different. So we're a natural attraction. But when I look at other industries, Lindsey's industry, just generally, it's like the tough times is where you eliminate the, a lot of your competition. So if you have the right strategy, like you almost want some of these times just to kind of clear the market out. Right. And show where you're the strength, where your strengths are. Because those ones are the ones that when in the greatly good times, outgrow everybody else as well. You know what I mean? I'd always fear entering a market in a really good time. I'd almost enter it in a tougher time and build through the good time.
- [22:44]
Lindsey
Yeah, well, I mean that's the whole thing. And when you have a market economy, you know, the, the, the populace kind of dictates those trends. Are they buying or are they not buying?
- [22:53]
Michael
Right.
- [22:54]
Lindsey
And, and I do agree with you that when people seem to have stopped buying because you have a crowded marketplace, when that if that marketplace gets thinned out, keep in mind there's still plenty of business to be had. And so, you know, there are people that are going to jump ship quick because they're, they've got fear aversion or like negativity aversion, something goes wrong, they're bailing out fast. They might be bailing out prematurely. And so if you're somebody who's looking for opportunity, you got to start looking around for like, all right, what am I hearing on the ground? Who's in? And what better place than maybe a BNI chapter where people are talking to each other.
- [23:34]
Michael
Oh, 100. I've been screaming it. And we'll continue to scream it. We're in the midst of member extravaganza now in our region, which is big growth season. I just did a podcast about how the spring just generally in networking is your best time of year to expand your network. Well, even more so now. Right. Like when things get a little tighter for people in the fear, like be out there, this is your chance to expand your market because people Are looking back to getting into it. There's a lot of people who, when things are easy and things are good, stop doing the networking. So we talked about that, remember in Kobe, within the mortgage industry. And I was like, man, all these people are stopping networking. They're screwed, like in a few years. And so they do that. So now, like from a networking standpoint, even like, oh, what an opportunity to expand my network. Because people are looking to re engage, like, you know, I mean, and so you can expand your influence and expand your. Your exposure that way. So there's always an opportunity to. These times, if you're looking for them. Housing market's going to be changing. It already is. That's an opportunity for people like, you know, I mean, so just got to be looking. I always look at like, all right, what does this provide versus what is this costing? What is this hurting? It's like, where's the opportunity to. To do something? And I think those who do that tend to capture it and those who don't.
- [24:45]
Lindsey
Yeah. And listen, that opportunity doesn't necessarily mean buying a distressed business or somebody buy. It's just, what are you doing for what is. How are you using your business to capitalize on these opportunities?
- [24:58]
Michael
Right.
- [24:58]
Lindsey
It doesn't have to be an acquisition. It can just be a deeper market penetration. It could be a new marketing campaign. It could be all kinds of things.
- [25:07]
Michael
Or think of the networking side. Think of the BNI side. Okay, so when things are really good, say your chapter's like 25 members and you got 24 people, even if things pull back, even from your standpoint, and you go, okay, they're pulling back around. But if more people want to start networking because it's their feeling to pull back too. If I get my group to 50, even if this year the 50 produces the same the 25 did. But when things start turning, I've got 50 people now, and I'm going to freaking explode, right? And that's like the opportunity of like, hey, maybe I got to have twice as many people in my network right now to produce what half did a year ago. The opportunity is I can get them in my network a lot easier now and then ride the wave out. And that's like, I would be talking to everybody because if you have any fear about this stuff, everybody does. And what an opportunity. Like he, hey, you want to come to a positive place where we're trying to help each other. Yeah, get involved right now. And so it's just massive opportunity for people. If you look at it that way, if you go, oh, things are so hard. Things are so hard. Nobody wants to do anything. You'll, you're not going to talk to anybody and nobody does business with anybody out of pity ever, ever, ever. I try to remind people of this. Like I see people blasting on Facebook, you know, all the woe is me shit. And it's like, that ain't gonna help. Like you'll get a lot of hey, keep it up, we, we're behind you kind of comments that your business ain't going to grow.
- [26:29]
Lindsey
Unfortunately, there's a bit of a GoFundMe mentality almost.
- [26:33]
Michael
Yeah.
- [26:34]
Lindsey
That, you know, if people tell a sad story, suddenly everybody's going to come to them and there are some that will. But it, that's not, that's not a good, you know, predictor or a good foundation for getting long term support. It isn't the right kind of networking. I agree with you, man. If you, I'd be working harder now to get my networking group to be as robust as possible. Because when things turn and they will, yeah, of course you'll have that much more going for you. But. And I think the lesson really is don't take your foot off the gas.
- [27:11]
Michael
Right.
- [27:11]
Lindsey
You know, don't take your foot off the gas in fear. Don't take your foot off the gas. If things are going well, work harder when they're double down to make sure they stay well. You know, and I, and I'll say this, you know, I've talked to the, the ownership of the mortgage company and you know, they've been hiring and hiring and hiring and they're doing great.
- [27:35]
Michael
Yeah.
- [27:35]
Lindsey
And because they haven't, they're sticking to it, you know, they're telling their story. They're, they're, they're marketing. They're, they're not, you know, letting the good times be this thing of, oh yeah, you know, I remember the good times and all that. It's like, no, we're going out now, there's still opportunity. They're working with buyers, you know, that type of stuff. They're doing more grassroots than they've ever done.
- [27:56]
Michael
And when the interest rates do drop again, they're going to be primed to explode.
- [28:00]
Lindsey
Yeah.
- [28:01]
Michael
Be primed to explode. Yeah, we talked about it, remember, years ago, I was like, man, I'd be buying mortgage companies right now. Like, yeah, I would still be into that mindset because it's just gonna be, they're gonna be primed. But yeah, I think the networking side of it's interesting because people lose sight of that it's just like if this is the time when people are trying to re. Engage in networking, you should be doubling your efforts and getting them in because it might take more. But man, when things do come back around and, and again, even if it's just, hey, there's a lot of fear or misconceptions in the market about my service. I'd rather 50 people hearing me tell them that and what, how to answer it than 20. Right?
- [28:37]
Lindsey
Yeah. And, and, and here's the thing. I think there's probably people that are so worried that, that they might want to join a networking company but they're going to have sticker shock no matter what the price is to get in.
- [28:50]
Michael
Yeah, we have.
- [28:50]
Lindsey
Because they're just concerned. Right. And I think the people who are leading those membership campaigns have to be really good at explaining that the, the value and the return on this investment. If you invest this, in my opinion, small amount annually to have exclusive access to a local community of people and lots of goods and services, the price tag is really small compared to the access you get. And if you follow the program, you do those things and, but I think, you know, you got to get past those people's fears of oh, you know, I would really love to do it but you know, and even individuals that work for companies sometimes have to pay that out of pocket. Like company's not going to pay to send them there or whatever. Invest in yourself over the long term. It's a very small investment. Like so you just got to have these things ready to go. Whether it's selling memberships in BNI and what's the value proposition there or you know, selling pastries at your pastry shop.
- [30:01]
Michael
So right now our dude. So this is my region and we're not the highest, we're not the lowest. Our annual membership dues, just renewal or new member joining, not taking application, one time fee things is 999. That sounds like a lot to some people. They're like holy thousand bucks. That's for a whole year. You can get cheaper for two years and everything else.
- [30:27]
Lindsey
Yeah.
- [30:27]
Michael
So I have this habit of going to Dunkin Donuts every day and except for today, today I went to Starbucks. You can see it right here. And this one was more. So this medium coffee I have from Starbucks was $5 and 60 cents Duncan's. It's like four bucks. So. And it's like every day and I. Yeah. And that's probably for a lot of people. Well, four dollars every day for my coffee habit is just under fifteen hundred Dollars. So this is the way I, like, try to explain it. Because they'll tell me, in holding a Duncan's cup, this is really expensive. And be like, that's 50% more a.
- [31:07]
Lindsey
Year and gives you nothing but diabetes.
- [31:11]
Michael
Yeah. Or kick. Yeah, 50% more. People are spending 50% more on minimum, 50 more on their coffee habit. Never mind any other. Like, take any other habit into play. Just the coffee habit. A cup of coffee a day from Dunkin Donuts, A medium cup of coffee a day from Dunkin Donuts is 50% more than our membership dues. Yeah, that's bananas. Yeah, but.
- [31:39]
Lindsey
And you don't think anything of that?
- [31:41]
Michael
Nope. Because it's daily.
- [31:43]
Lindsey
Yeah, yeah. So you know that. But that's, that's the thing. So you got to be able to explain, you know, what that's worth. You know, I, I do this. I do the sexualizing my head all the time. I'm always like, what's the cost benefit of buying this?
- [31:57]
Michael
Right.
- [31:58]
Lindsey
What's the cost benefit of not buying this? You know, and. Or this compared to that? And a lot of times in my head, the little game I play is, okay, well, I believe in compromise. Not just in business with other people and those relationships, but even with myself. Like, keep myself in check a little bit. Right. So I'm constantly giving something up to get something I want.
- [32:18]
Michael
Right. Yeah. I mean, that's the way you should be doing it. You should always be looking like, can you give up the coffee a day? Or is the coffee more valuable than having access, like you said, to this network of people who are dedicated to helping you grow your business so much so they're going to meet with you every week to do it. And you can be the only one that does what you do in the room. Like, which one's more valuable? And then, you know, what would happen, though? They would say, okay, that makes sense. They'd pay the membership and then go to Dunkin Donuts the next fucking day. It'll be right back. Right back at Duncan's.
- [32:48]
Lindsey
Exactly. So, you know, you got to invest in yourself, in your strategy for the long term. I think 9.99 a year. Even if that goes up, it's still worth it when you have that exclusive access. It's. It's.
- [33:00]
Michael
If you use it. If you use it.
- [33:02]
Lindsey
If you use it. Yeah, if you do it right, you know, and, you know, let's just say you're in the. You're a loan officer, because I, I know a little bit about that. And you pay 999 if you get one loan out of that group, you've made the money back. Plus.
- [33:16]
Michael
Yeah.
- [33:17]
Lindsey
One loan out of that group.
- [33:21]
Michael
The average ROI in our region on a cash to cash basis, which I don't like, just because there's obviously time investment and everything else, but just dues to average return is almost, is over about 7,000%.
- [33:34]
Lindsey
Yeah.
- [33:35]
Michael
So if you went somewhere and said they gave, we averaged 7,000% return. How much money you gave them? All of it. All of it, yeah.
- [33:46]
Lindsey
So yes, every penny I got.
- [33:48]
Michael
Yeah. And that's average. So there's obviously people who make a lot more than that and there's people who make less than that. And usually the difference could be, it can be profession based, sticker price based. It's so many different factors in it and I don't like averages.
- [33:59]
Lindsey
But 100 return on your investment, you're taking it. If you get 30 invest return on, you're taking it. If you're giving it to a financial planner, you're getting, you know, 7 to 10, maybe 20% depending on where you're invested in the market. And you're doing it all day long. You're like, oh my God, I'm making so much, so why not, right? Do it.
- [34:21]
Michael
I didn't preach it to the choir on that one. Trust me, I know. But I think it's good though for members who are hearing this because again, that's the misconception. Oh, it's really expensive. It's not when you use analogies, like if you compare it to things. Right. To compare it to a cup of coffee a day, compare it to these kind of things a day. A carton of eggs is eight bucks. So you know, it's not really that expensive. And sometimes that is, we have to do a good job internally of teaching our members that too because they're the ones who hear the misconceptions, they're the ones who hear those things. And back to your point earlier, we'll kind of wrap up. We've also told people like BNI is not for everybody and that's okay.
- [35:00]
Lindsey
Right.
- [35:01]
Michael
And so, you know, some people just are not going to be willing to do it. Some people might not be in a position to do it. And maybe, and I've always told my members too, like, if a person can't invest a thousand dollars a year in their marketing arm for their business and I mean, like they literally just cannot afford to do it. I understand that. I and my heart breaks for them, but they're also probably not in a position to provide Value to the rest of the group. If they were to join it would be what can I get out of this group to save my business? And that's not a great member for everybody else. And so like that you have pricing in our industry, I think pricing comes in as a, like a small barrier of entry is a good thing. You know, our competitors will come in and be like we'll do it for 300 a year. It's like great. And you'll get a lot more smaller businesses that might not be able to provide the same value or you might get somebody who's less committed because the dues are so small. It's like a whatever kind of thought process, you know. And like you have those things. So our game of pricing matters a little bit even in the like value return for the member themselves. Like you seems counterintuitive but like you'd almost want the dues to be high enough to have some level of barrier of entry for future members joining your group because you want to make sure they're sophisticated enough or serious enough to provide the value in return for you by joining your group. If we only have one seat for one mortgage broker, you're going to want to make sure that that person is dedicated, has a business, has these things. So.
- [36:34]
Lindsey
Yeah, and like I said, I think that talking about the networking group, but it doesn't same for everybody. Can be applied to everything you're doing in your business.
- [36:43]
Michael
Yep, yep. All right.
- [36:45]
Lindsey
Who are you? What are you doing? What's your value? You know, and, and you'll get through all this stuff. You know, we're gonna, we're gonna hear about this stuff for the rest of our lives.
- [36:54]
Michael
Yeah, I would, I think your best advice is like turn off the news and do your own research because otherwise you'll get confused.
- [37:00]
Lindsey
Do your own research and, and you know, really look at your business because I think you know, if you're having to make trade offs if you look for efficiencies in your business, we've always talked about it. I know everyone's talking about doge and da da da da da. And, and we've been saying before, always look in your business for things you can improve on. Where do you spend? Are you spending wisely? And make sure you invest in the things that return value to your business. And I think you know, investing in your community is important. Investing in networking is important. Yeah. Especially as a, as a local business owner. They're everything to you.
- [37:39]
Michael
100. 100. All right, my man. Good to catch up. Good to see you. We'll be back on the next one. Yeah, and as always, if you get any topics, questions, etc, go to bnipowerofone.com leave it there. We'll make sure to get to it. Have a good one.
- [37:52]
Lindsey
Bye.
- [38:07]
Michael
You know.