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Perpetual Traffic
Selling Your Agency for $10M+: The Untold Obstacles Revealed with Chris Martinez
00:35:40
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- [00:00]
Chris Martinez
Foreign. You're listening to Perpetual Traffic.
- [00:11]
Ralph Burns
Hello and welcome to the Perpetual Traffic podcast. This is your host, Ralph Burns. I'm the founder and CEO of Tier 11 alongside my amazing Seattle based co.
- [00:20]
Lauren E. Petrulo
Host, Lauren E. Petrulo, the founder of Mongoose Media.
- [00:25]
Ralph Burns
That's right. Well, and today is an amazing podcast because we've got an amazing guest, amazingly amazing, hand picked, hand plucked for his expertise in the agency space. And I know you're listening, you agency owners, because today we're going to teach you the right way to grow your agency with a guy that is doing it the right way. Because I used to try to do it and then I kind of sucked at it. Although all the people that actually went through my agency program did actually have a good time. I don't know if they learned anything, but they had a good time. In your case, you're actually teaching them the right way to do it through the real metrics that matter for an agency. But also you've got sort of a bone to pick with the agency space in general, which is something that you and I and I think Lauren also really resonate with. And we're really, really glad to have you on today's show in Perpetual Traffic. Welcome Chris Martinez from Bloom Partners Agency Freedom, sponsor of Agency Freedom Live, coming up in June. So welcome to PT man.
- [01:31]
Chris Martinez
Thanks guys. Great to be here.
- [01:34]
Ralph Burns
So, Chris, what's the bone that you have to pick with agencies? So what is it about agencies that are doing it the wrong way? And this is the reason why we're connecting on this and why I'm actually consulting with Bloom Partners on what you're doing because we both feel very, very strongly on it.
- [01:50]
Chris Martinez
So I started my agency in 2012 and it was a much different landscape back then. I mean, looking back, who knows if it was realistically better or worse? But objectively speaking, right now, our industry as a whole, the reputation has never been worse. And if you walk into a room and you tell somebody, hey, I am a digital marketer or I own a digital marketing agency, what's the thing they're going to think?
- [02:16]
Ralph Burns
Scam.
- [02:17]
Chris Martinez
Scam. Yeah, right. Scammer. It sucks. The reality is that I would say the overwhelming majority of marketing agency owners are good human beings. They want to help clients. It's a small percentage of people that have really fucked over our industry. Selling things to people when they didn't know how to deliver and they didn't know how to get results. And ultimately they didn't know how to help their clients make more money. That's really, what a marketing agency is supposed to do. It's like, you know, we got to help our clients to make more money. It doesn't have to be more complicated than that. And so, you know, that's kind of the bone that I have to pick, so to speak. Ralph, is like, I'm tired of seeing this. Like, we got to stand up and take a stand.
- [02:54]
Ralph Burns
Yeah, we say that this stat all the time and we paid for this report. So we know it's, you know, somewhat accurate. Even if it's halfway accurate. Like, there's 433,000 agencies on the planet. Like, let's say there's half, there's 200,000. That's still. That is an incredibly fragmented industry. And the reason is, is there's no barrier to entry and it's unregulated. There's no rules. So if you have a laptop and you have some kind of knowledge of, let's say, Google Ads or content marketing or website building or meta ads, you can start an agency and you can also do it really, really cheaply and undercut everybody else that's in the space. Question is, is how good of a job are you really going to do? And when we talk about how good of a job, that's also a subjective measure.
- [03:43]
Chris Martinez
Yeah.
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Ralph Burns
So quick example, I was on a discovery call today with a customer in the. They basically, you know, trick out trucks and like, they're in that space. Great business. He's like, yeah, my agency right now is doing about as good as I was doing when I was running it. They're getting about a 3 to 4 to 5 MER blended ROAS. Like, he understood kind of how it all worked. It's all in app metrics. And he's like, I'm not making any more money. I've been flat ever since I added these guys for a year. And they're telling me every week, hey, look at, look at your roas. Look at how great we're doing on MetaGoogle. You name it. And I'm like, this is a story I've heard hundreds of times is that you can make the metrics look as good as you need them to be in order to air quote, not get fired. But at the end of the day, if the business owner is looking at your production as more than just in app metrics or, you know, reports that you're showing them, hey, look at our frequency, our reach this week or our impressions. Like, that's even worse, quite honestly. But it can be manipulated. I don't think agency owners Necessarily believe they're trying to deceive. They just don't know any better in some cases. But in some cases they do, and they do it in spite of that. And that's sort of the duality of it is that I was like, listen, you want to grow 31% over the next eight years and get to $50 million in revenue, you're at X number of dollars right now. That's what you want to do, right? He's like, yes, my goal is to get you there and to get there in incremental steps. 31% this year, 31% next year at an end CAC or a cost to acquire a customer. That makes sense. And then we increase ltv, we increase aov, we do all these things. Three ways to grow the business, right? Get more customers, get them to buy more often, get them to buy more when they buy. There's the only three ways. He's like, yes, that's it. And in app metrics don't show that. So his agency isn't bad. I don't think they're evil people, but they're just. They don't get it or they don't want to get it. And he's looking for alternatives. And I think that's kind of what's wrong with the space. I would even say in that case, that individual is probably dealing with like a good agency, like they're doing a good job, but he's not getting what he wants out of it because his business is flat year over year ever since he hired him.
- [06:09]
Chris Martinez
Well, part of the problem too, Ralph, I agree with everything that you said. One of the root causes of that issue is that a lot of agency owners don't know about business. They don't understand the metrics of running a business. So to be able to have a very intelligent marketing and sales conversation with a client or prospective client, you do have to understand concepts like cost of goods sold and operating expenses and just overall profitability and how you scale a business. And, you know, I think because as you mentioned, the barrier to entry so low and the type of people that typically gravitate towards running a marketing agency. Not a whole lot of business backgrounds. We all worked in corporate. We all see the reporting that goes like that you have to do and all the things that are tracked in corporate America. And so we do have an understanding of how things are spread. Supposed to run a lot of marketing agencies who don't have that background, they just kind of shoot from the hip, you know, and bring those types of. They're not best practices. Maybe like mistakes or like lack of SOP or whatever. Like their lack of business knowledge carries through in the way that they deliver for their clients. That's one of the issues with that. That's why we're dealing with these problems.
- [07:18]
Lauren E. Petrulo
They're in these creative ideas. But they don't know about the business impact. But also not only do they know about it, they don't know to ask for it. So I'm sure that they've not been given credentials or information that speaks to profitability because they're like, oh well, I'm dependent on in app roas, something I can demonstrate at large at scale. However, the net growth on that business, they don't know to ask for. I think that's the biggest part. Like when you don't know and you don't know what you don't know, you're in a perpetual state of mediocrity.
- [07:53]
Chris Martinez
And I'm not like some finance expert, you know, I didn't go to Wharton or Harvard, you know, or I graduated with a degree in sociology. But I've learned over the years and I've learned how to run a business and I love business in general. I love running businesses. Obviously we work with the clients, we show them how to run the business better.
- [08:10]
Ralph Burns
Yeah, well, you bring up an interesting point because how can a agency owner understand a client's business if they don't understand their own business? And I think that's one of the cool things about when you work with somebody, that's the first thing that you do. And we're obviously going to have an incentive for people to get involved with you at the end here. So, you know, open loop. But the point is, is I think that's what's wrong with a lot of agencies is that they don't have the metrics or they don't even understand their own metrics. How can they understand like the cost of goods sold or gross profitability or, you know, operating expenses or chargebacks or any of the things that need to understand in order to determine NCAC at the end of the day or how to grow a client's business if they don't understand it themselves? And I'm sure one of the questions that you probably ask is obviously you look at their P and L or their profit and loss statements, but then you ask the question for them, like how much can you afford to pay to acquire a customer? And I know the answer in the agency space is I don't know, 300 bucks.
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Chris Martinez
So one of the Things that we do at the very beginning of a client relationship is we get their numbers right, and so we map out a budget. So they say, I'm doing, you know, 1.5 million in revenue, and this is my profitability, and I want to get to here in 12 months time. And so we'll map out exactly when it needs to happen. And we always create sales targets that I would say 99% of agencies do not have quotas or sales targets every single month. And so we have to create that. Okay, cool. So you want to grow by three clients a month. Point that I'm making is that once we establish a quota, even if it's one client a month or three clients a month, then the next question we ask is, how much are you willing to invest to acquire a client? Do you know how many people have actually thought about that? Like, maybe one out of 50, you know, and to me, these are like basic marketing questions that we should all be asking our clients, too. If you're willing to invest, let's just say a thousand bucks for a client and you close at 20%, then you say, okay, well, how much am I looking to invest? Invest. I know it should be higher. How much am I willing to invest to get an appointment? So if it's cloying at 20%, then you should be willing to invest $200, you know, to get that appointment. So very, very basic things. It's all math. I know it scares some people and it's not necessarily fun. It's 99 cents. Store calculator math. You know, we can all do this. Now, we do have a data analyst that'll go through and, like, put in all these crazy calculations. Like, if you have a sales team and you need to calculate commission rates and you know, what their quota should be and product and what you should sell of each one. And arpu and all this other stuff. Like, you know, like, we can do arpu. Arpu. You haven't ever heard that term average revenue per unit?
- [10:57]
Lauren E. Petrulo
Oh, no.
- [10:59]
Chris Martinez
Yeah, that's a. That's a good one for Jeopardy.
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Lauren E. Petrulo
That sounds like a character of the next Disney film.
- [11:05]
Ralph Burns
Banking school. The movie. The new movie by Disney. So tell the agency listener who's like, all right, all this makes sense. I'm sick of Burns, like, ranting about agencies yet again. Martinez is here. Sounds like he kind of knows what he's talking about. But, like, how do you do it? Like, how do you figure out what that number is? And then back it out, out, and then say, oh, okay, if you want to grow by X amount. This is what you need more of. And then you determine what actions they need to take. Like take us through that whole sort of process there.
- [11:42]
Chris Martinez
I'm going to explain it in a way so that really anybody can do this. It's just something that we happen to do all the time. So obviously it's way easier. And if you want to try and do it yourself, send me a message. I'll walk you through it if you want. So there's two aspects of figuring out how to get from point A to point B. The first one, that where we like to start is the team. So who do you have on the team now? What are they doing and then what do we need them to do? So if I'm going to use the sports analogy, right, so let's say there's 11 players on the field, right. The goalkeeper obviously has to keep the ball from going in the net. Right. If your goalkeeper is not able to do that, can we train that goalkeeper? Do we need to trade them and bring in somebody who can? Your forwards have got to score goals. Your midfields are going to be playmakers, right? Yeah, to the midfielders. So everybody has a specific function on the field and in. In soccer. For all the soccer players that are listening, the you might change up your lineup based on the team that you're playing and if you're home and away. So maybe they've got, you know, just massive bodies in the back and there's no chance of you winning head balls. And then. So then you'll put Laurentrulo up at top and just have her receive those balls and then play the midfielders through. So whatever the tasks are, you align those with the people on the team. I know we can just going to turn this into a soccer podcast.
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Lauren E. Petrulo
I'm playing soccer in college. Look, I thought I was going to be a professional soccer player, okay. That was my entire life until I was 22.
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Chris Martinez
I am shocked that you were a midfielder, by the way. Anyways, what were we talking about? You need the right team in your agency. If they can't do what you need them to do, we got to level them up and train them to do that. Otherwise we are going to have to find somebody else. And that's the way that it is. Sure.
- [13:22]
Ralph Burns
Retention versus attrition. Like how do you know? Because that's an easy. Like, I get it. There's 11 players on the field. We're using the soccer analogy here, but like get a little deeper on that because that's where people are like well, I've got seven media buyers, and I've got two creative people, and I've got a strategist, and then I've got, you know, a deaf person.
- [13:42]
Chris Martinez
It's a great question. Okay, so this feeds perfectly into my second one, which is the numbers. So the second thing that we got to do is we got to dive into the numbers, and we got to see what's actually going on into the business. And we got to look at the numbers. We got to see what's actually going on. So my big phrase is facts, not feelings, right? And there's no more factual thing in your agency or your business than the actual finances of the business. So we got to look at the numbers. One of the first things I look at is the cost of goods sold. So specifically to your question, Ralph, are we staying within the budget? So what I like to see, there's some variance here, but what I like to see is whatever your revenue is, I like to see 30 to 35% of that going towards cost of goods sold, meaning mainly the fulfillment team that's producing the deliverables and any other software that we're using for fulfillment. So all your fulfillment stuff, I like to see that around 30 to 35% of the revenue. The reason I start there is because if we're losing money on cost of goods sold and our gross margin isn't healthy, it makes everything else more difficult. So we go in there. So if you have seven media buyers, right, And I'm looking at your revenue, and I'm looking at your cost of goods, and this is like, really happens. Like, some people's cost of Goods is like 70% or 80%.
- [14:59]
Ralph Burns
Right. It is related to revenue. You have media buyers, in this case, relate to, like, how much revenue comes in, how much, how busy they are. That is a cost that rises and falls with sales, in essence. Although a lot of people would debate that because it's personnel. But anyway, I. I agree.
- [15:18]
Chris Martinez
Exactly.
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Lauren E. Petrulo
Well, there's like, with labor, because labor is if they're doing marketing for internal purposes. So if our media buyers are doing hours on Mongoose Media ads, whether it's online, pornhub or Facebook, that doesn't count in the cost of fulfillment because Mongoose Media is an internal client, external one.
- [15:36]
Chris Martinez
So when Lauren is advertising for herself on pornhub, that is more considered an operating expense. But if pornhub is a client and they're fulfilling for that client, now it becomes cost of goods sold. See how I tied that all together there? If that number, if that percentage of revenue is higher than, you know, 35%, more or less. Then I look and see, like, you know, what's the issue here? I'll then actually switch and I'll go look at Churn, because Churn is a great indicator if our. If we're actually getting results for the clients. What we sell, as I mentioned, is inherently easy, right? Where clients are giving us a few grand a month and we're turning that around and we're generating a lot more money for them. That's really what we're here for. And if we're not doing that, then a lot of times they're gonna cancel. It's not the only thing. We do have to manage the relationship and build trust and all those things. Right? But if we're not making money for our clients, they're going to cancel. So then if I look at those two things, I see budget and I see high churn, right over budget and high churn. Then it goes back to the people conversation. It's like, okay, yes, you have those set of seven media buyers who are the ones that are actually making money for the clients and the ones that are not, because it's usually just a couple bad apples that are ruining it for everybody. We have to make the decision. Red, yellow, green. They're green, then they're great, and we keep them. They're yellow. It's somebody that maybe we can train. Or if it's red, like, this person's been a problem for a long time. Let's just, you know, cut our losses and move on. It's not easy to do that. But again, we're making those decisions with facts and not feelings. Because it's like, if this person's been making that mistake for the past three years.
- [17:17]
Lauren E. Petrulo
Oh, gosh, yeah.
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Chris Martinez
And they're still on the team. Now that's an us problem. That's an ownership problem. This person's not going to improve. And maybe they were great when the agency was smaller and we were doing, you know, a half a million and whatever, but now we're playing a different game. You know, we're in the big leagues here. We need better quality people that can perform for our clients. Otherwise, we suffer.
- [17:38]
Ralph Burns
That's a good place to just reiterate that. Point is that I find that in almost every roundtable or any group discussion that I ever do with agency owners, it's always like, oh, I need to let this person go, but I just can't because then I have to go out and hire. So they just let them fester longer and longer and longer. And I think your percentages of like, I've got seven and maybe two of them are great. And then the others are sort of in the either yellow or red. The reds. Like, the hardest part is letting go of the reds. I think just, I mean, it's apparently not a problem for me because I've hired more people than I probably hired. No, that's not actually, actually true. But the point is there's an art and a science to it. You have to understand that you have to separate out the feelings. Although I will say you say facts, not feelings a lot. I think all business is personal. And so there are feelings and it's to separate them to be cold. And my wife tells me this all the time. She's like, you're so cold when it comes to these sorts of decisions. It's not. I just have to like separate it out because I come across that way because it is personal. You develop relationships with these people and that's the hardest thing to do. And making that decision, I always sort of look at. And if you're an agency owner, you have seven people on your staff right now, right? In the analogy that we're talking about here, maybe you got 11 person crew. Whatever it is, ask yourself the question, if I let this person go today, would I be happy or sad or ecstatic and relieved? Or if they quit today, would I like do everything I possibly could to save them? And that's a great differentiator. And if it's you're relieved or you're slightly happy, like, you need to take action. So what do you do there? I guess, like, what's your. The facts, not feelings. Like, how do you coach your individuals? Because I see that as like one of the biggest, biggest issues. Because it really is hard to separate that out.
- [19:36]
Chris Martinez
So when I say facts, not feelings, I'm not saying to just be a robot and ignore your feelings. What I am saying though, is don't let your feelings dictate all of your decisions. Your feelings, your gut can absolutely make you aware of problems. That's how we've survived as a species, is we do have an instinct. But at the same time, if your instinct is essentially to help you survive, that instinct can also keep you from making a decision that you have to make as an agency owner that gets outside of your comfort zone. You might be playing it safe. You might be hanging on to somebody that's not a good fit. Right? So that's why I'm saying you need to make, ultimately make the Decision with facts and not feelings. So when I go through. And if we're going to determine whether or not we have to let a team member go, we'll go through their job description. Another thing that most agency owners don't have. We'll go through a job description that lists out exactly the things that that person needs to do to be successful at their job. We put our job descriptions as daily, weekly, monthly, quarterly, semiannual goals. So we just go through a checklist. Are they doing this?
- [20:45]
Ralph Burns
Yeah. Whether you're a business and you're listening to this, you're like, oh, should I hire an agency? Or I am an agency listening to this, Having that is actually absolutely critical.
- [20:54]
Chris Martinez
Yeah, I got that from my wife, actually. She's, like, amazing at the whole HR stuff. So we'll go through that. And now we're starting to look, okay, they can't do the job. How long have they been training? Like, have we been trying to fix this for weeks, months, sometimes years? Then it goes to, well, what's the alternative? We keep them on. And you look at the growth trajectory that we have and our budget and, you know, all the things that we're looking to accomplish as an owner. You have to also recognize that if you're keeping somebody on the team that is not a great player, your great players are looking at that, and they are considering leaving because of that reason, and they're looking at you and they're wondering what the hell is wrong with you? And maybe they're questioning your ability to leave.
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Ralph Burns
People forget that so much. And, like, if you're really, really uncomfortable with this, you have to start thinking, are you the right fit for the role that you're in right now? And even, like, I've had this conversation with just some of my managers, like, if they absolutely hate this stuff and, like, we have to reevaluate whether or not you're in the right role within the organization. If we have another seat on the bus that perfectly fits your talents, your skills, great. If not, we might want to move on. And we have done that. And that's really hard because these kinds of decisions are not made lightly. And you know, to be able to do them takes a lot of courage, and you should never feel like you enjoy it. That's masochistic. But you should feel badly. Yes. But if you are just riddled with guilt, even when somebody is a bad hire and you know they're a bad hire, when you do finally let them go, everyone who's good, finally, like, what took them so long they all know.
- [22:35]
Lauren E. Petrulo
Those are the worst conversations. Because then it's like, well, we were ready to quit. And it's like, at least I can speak from my standpoint. I'm like, well, why did no one tell me? I was under the impression that this was all happy go lucky. I didn't realize that this had become pervasive.
- [22:50]
Chris Martinez
Yeah, you would think that they would speak up. They're terrified. And in reality, that's not their job. Really. Like, you know, like you're there. This is the part of being an owner that I think is the least sexy and definitely the least fun, is basically holding people accountable. Right. Like, who really likes going around and holding everybody accountable. From a sports perspective, though, think about the best coaches that you ever had in your life. Those are the folks that made you stay late, that made you run when you didn't want to, that pushed you.
- [23:18]
Lauren E. Petrulo
Called you out on your shit, called you out.
- [23:20]
Chris Martinez
Yeah, go hard in that tackle. What's wrong with you? You're going up half ass for those head balls. I know you can do that. Right. Those are the people who get the best out of you. The soft coaches. We don't even think about them anymore.
- [23:32]
Lauren E. Petrulo
Oh, my gosh. I remember, I was like, I can walk all over this coach. Like, they don't actually care, so why should I care?
- [23:37]
Chris Martinez
Exactly. So that's part of your job as the boss, as the owner, is you have to go around holding people accountable. And we have systems to be able to do that so that it's fair and ethical and obviously makes it a lot easier to make these hard decisions. But that's what you signed up for as an owner. And if you want to build a business that you could sell one day, that's an asset that you can sell one day, I promise you, you have to have these systems in place.
- [24:03]
Lauren E. Petrulo
One level of accountability, though, there has to be a moment where you have to evaluate, did you hire the wrong client? Because there are times where you could have really great A players. And I'm just going to use a media buyer example. And it's like they have a bad offer. They've done everything. They're not updating their tracking or they will not pivot their offer to match what the market demands. And so then you're doing everything you can. And I have seen talented media buyers wither away because everything that they're trying isn't working and there's no cooperation back. So that, like, putting that aside, the accountability has to go both ways.
- [24:39]
Chris Martinez
I agree 100%. And there's this is why you have an SOP for what's a good client. And that needs to go all the way through to the sales team. These are the boxes that they check to make sure that they're a good client for us, that we can bring them on. Here's something that I've never seen anybody else do. When you're onboarding a client, a new client, you walk through all the things that they have to do. Right. It's kind of like a checklist of like, hey, if you need to do.
- [25:05]
Lauren E. Petrulo
This as our client, like the agency for agreement.
- [25:09]
Chris Martinez
So you go through and you go through these four agreements or whatever, and then you send it to them to sign. We do this for our clients. You send them a document, we call it a best practices document, and you have them sign it. Is it legally enforceable? No. But there is now a mutual agreement amongst people that, hey, yes, I understand that I need to do these things, and if I don't do these things, then I might get dropped as a client.
- [25:35]
Lauren E. Petrulo
Like earlier, communicating financials of if the cost of goods increases or if financially speaking, you need to communicate when, like right now with everything with the tariffs, costs are going so high for many of the products that we're selling that if we don't get that carryover and we're not communicated the moving targets, like how we can have impact with our marketing efforts, then they're not following through with the agreement because we're held to an accountable standard that we've not been communicated to.
- [26:01]
Chris Martinez
That's a great one that you could put in there and who could have predicted the tariffs, but if you had something in there that says, you know, like, hey, if costs are adjusting and we might need to adjust our cost to target cost of acquisition or whatever, you know, so that also is part of the reason why you need to be really good at understanding business so that you can then educate your clients. Because a lot of the times they're not even thinking about that either.
- [26:21]
Ralph Burns
What's the next step after you figure out who your people are? You have those tough conversations, figure out who's on the team, like, what's the next step in the journey for you all because you take people through this.
- [26:33]
Chris Martinez
Yeah. So ultimately, after we have our team that we need now also in the future that's going to help us get to our goals. We have this whole budget that lists out their financial targets, their sales goals or cost of good goals or net profit goals, everything. We map all of that out and then we hand them the tools and we are, we hand them the plan and we say, hey, here you go, you know, go ahead and execute that on your own. Or, you know, that's where we could come in and do a longer term engagement. And I don't think. Well, our clients say that they love the clarity. What they also enjoy is having us there to drag their asses across the finish line. So one of the things that our clients love about us is ultimately having us there in their business every single week, every single day, if they need us, just dragging them across the finish line. And so we implement our facts not feelings method, of course, which means that you're going to have a whole lot of reporting that you've probably never done before or have looked at. You're going to have to send us the financials every single month because that's how we make sure that we're actually on track and making money. And it's just a new way of running the company. And there is a level of transformation that the owner has to go through as well. But our clients that work with us are ready for that because they, as I mentioned before, these people want to build an asset that they can sell one day. It's a big, big component of who we work with is they've been doing this for a while and they're like, you know what, I know that I'm not going to do this forever, but I see where I'm at today and I know that I'm on to something.
- [28:05]
Ralph Burns
So the analysis is really is we were sort of talking about to start this whole conversation like how much you can afford to pay to acquire a customer if you're an agency. And most don't really know it's, you know, one of these. But we're talking about like figure out your profitability. And then as a result of that, there's probably some internal, well churn. Might be an issue of bad client, but also bad employee. That's a whole other conversation. Clearing out your red, yellow greens. As far as like your best employees go, the ones that are actually carrying the team and the ones that are dragging everybody down. Got it. Then you're actually closer because you now know what the big number is, what your cogs number is, basically what your gross profitability is because gross profitability is revenue minus cogs. And then you got your gp and then from there you determine what, like the growth that most agencies want. The ones that I talk to are like, yeah, just get me more leads, man. And then they don't know how much to pay to acquire a lead. And then that would be sort of the step. Like, that's the step before the step that was actually the cost to acquire a sale.
- [29:13]
Chris Martinez
I'll do a little analogy of the business analysis that we do. It's like doing a full diagnostic test of your body, for example. So we're doing blood work, we're doing, you know, CT scans. We're going through everything that's going on in the business, and that will give us an understanding of why we're at where we're at today. Second piece of this, and this is really like, I think it's the value is what needs to change for us to get to this goal that I have. So if that goal is 5 million revenue, if that goal is a $10 million exit or a $20 million exit, we map that out for you over the next three years. This is where you're at today, which is very, very important. That's our benchmark. These are the things that we have to fix. Maybe it's a churn thing, maybe it's a cost of goods thing, Maybe it's a people thing. Maybe it's a profitability thing where you're just. You're not building your business for profit. And to be able to do that, maybe you got to raise prices. Maybe we got to let people go. Maybe we have to bring on better people. Maybe we have to invest in our own marketing. It's different for everybody. But that's ultimately what we do in that business analysis. And so when you leave, you know exactly what needs to change for you to be able to hit that target. Well, this whole. We call it our profitable agency business analysis. That's our fancy term that we have here at Bloom. We charge normally $2,500 for that. For the first five people who are listening right now. If you are over a million dollars in revenue, have to be over a million dollars in revenue. And I'm not like, don't put ad spend in there, because I will catch you. You're over a million dollars in revenue. You can get this profitable agency business analysis, which we Normally charge for $2,500. You can get it for free. Five people. So you gotta go to the page and act fast. Just go to agencyexitplan.com and we'll do this whole thing, the whole analysis, everything for you. We'll meet one on one, a live call. It's two hours. We'll give it to you for free.
- [31:06]
Ralph Burns
So go to agencyexitplan.com agencyexitplan.com. and oh, by the way, we didn't mention like you've exited your agency, like you actually know what you're talking about. This sort of stuff like how to prep for sale, that's the bigger piece.
- [31:19]
Chris Martinez
Of what we're doing as well. So we're actually helping an agency to do an exit right now. Husband and wife team, amazing, amazing people who've built a great business. And so we are deep in it and things are going very, very well. So yes, I know what I'm talking.
- [31:35]
Ralph Burns
To the outside world, to the private equity world, to the, you know, larger strategic, whether you want to be a tuck in, whatever it is that you want to do. But if you want to sell your business and you're an agency on it, you have to have a system. And it's like these guys will eviscerate you the private equities of the world unless you have numbers that match Churn. Obviously we talked about employee churn to a certain degree, but employees relating back to curing churn number one issue. When we went down this road three years ago, that was the thing that they've dialed in on us so much. And then it's ebitda. It's about like earnings before interest, taxes, depreciation and amortization, which is basically profit, net profit, like what's left over then add backs. And then they want to see a proven model of acquiring customers to affect better churn the right types of customers and or clients and then also increase profitability going long term because what they're paying for is your profit right now. But really what they're pricing you for is your profit in the future. And you also have where I'm going to actually be at this in June. You have a live event in San Diego. Everyone wants to go to San Diego, so why not go tell us about that one as well.
- [32:54]
Chris Martinez
Yeah. So it's the first time in history, at least that I know of, where there will be an agency event talking and showing you exactly how to build an agency that you can sell one day for eight figures or more. The speaker lineup is insane. Obviously Ralph's going to be there. We have people on the stage that have done over $650 million in exits, people that have done it before. Right. So there's nobody better to learn from than them. It's a small, intimate event. We'll have about a hundred people there. It's workshop style. And definitely do the VIP because then you can have lunch and meet all the speakers.
- [33:25]
Ralph Burns
Okay, so agencyfreedomlive.com. and then also for the freebie, if you're like, maybe not yet, but I'm sure you'll email them or spam them to make sure that they go to go to the event. If they go to agencyexitplan.com that resource is really good. That is the thing. It's like, you guys do it right. And I'm not just saying this. That's the reason why you're on the show, and the reason why you're on the show is because the value that you bring. I was super impressed when I was there, what, four or five months ago. And ever since then, we've had this relationship where I think we see where the break right now is in the agency world and where it can be fixed and it can be fixed. It's going to take just a little bit more effort. And in most cases, most agency owners are like accidental business owners in a lot of ways. They kind of start it and then they're like, oh, crap, now I'm managing people. I'm leading people. I got to hire people. I got to fire people. I got to know finances. I have to know when you started it, you probably didn't expect you needed to know all this. And you guys get all this. And especially with Amare, who's like, just a ninja, you get all this there. So we're not like, pumping this up too much, but I really do believe strongly in this because we do believe that this agency space does need to be rehabilitated to a certain degree. So check it out over@agencyexitplan.com for your freebie there. First five. Get that analysis first, Pete. Five PT listeners like, that's a pretty big deal. And then checking out Agency Freedom Live, we'll leave all this over in the show Notes over at Perpetual Traffic. And of course, wherever you listen to podcasts, leave us a rating and a review helps us get this to a wider audience, especially more agencies, I suppose, so that we revolutionize this world that we live in and also help businesses grow the right way, which is what we're all about here. So, anyway, so glad to have you on. Psyched to have you. Sure. You'll probably be on again. Chris Martinez from Bloom Partners. So on behalf of my amazing co host, who's going to catch a fish later today, Lauren Epitrulo, until next show. See you.
- [35:39]
Chris Martinez
Bye. Bye. Thank you, guys.