Building a $1,000,000 Business for a Stranger in 69 Minutes

Summary

Podcast Summary: The Game w/Alex Hormozi

Episode: Building a $1,000,000 Business for a Stranger in 69 Minutes

Host: Alex Hormozi
Guest: Philip, Founder of Garby Disposal Services
Date: October 28, 2025

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Episode Overview

In this episode, Alex Hormozi sits down with Philip, a former Amazon engineer who started Garby Disposal Services, a residential trash collection company now struggling with negative profits. With Philip's family on the line and time running out, Alex aims to overhaul the business in a single, intensive coaching session—"solve for cash flow, profitability, and focus"—with the audacious goal of creating a path to a million-dollar business model within 69 minutes.

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Key Discussion Points & Insights

1. The Situation: "Negative $151,000 and Growing Pressures"

• Background: Philip left Amazon to start a trash collection service. After two years, he serves 2,500 homes but is losing $151,000 per year with negative 23% net margins.
• Problem Statement ([00:13]):

  “Our revenue is 642,000. Our net profit is negative $151,000.” — Philip

• Personal Stakes: Philip’s wife is due with another baby soon; urgent need for profitability.

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2. Dissecting the Business Model

Customer Segments

• Scatter (“regular residential”): Individual homes not centrally managed. More price flexibility and higher margins.
• HOAs: Bulk contracts with homeowner associations (70% of the market). Lower margins, commoditized, longer sales cycles, but large revenue potential.

Service Overview

• Scatter: Weekly trash/recycling; easy to onboard, quarterly billing, current intro offers include “three months free.”
• HOAs: Typically twice-weekly, contracts 3-5 years, bid-based and highly price-competitive.

Operations Gaps

• Underutilized trucks, inefficient routes, unexpected repairs, low route efficiency.
• Need for more profitable marketing and sales strategies, improved lead conversion, and asset utilization.

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3. Numbers Breakdown

Financials ([11:07], [12:18])

• Revenue: $642,000
• Gross margin: 8% (skewed low by $100K+ repairs)
• Net margin: -23%
• Customer churn: 0.4% monthly (very low!)
• CAC/LTV:
  • Scatter: CAC $51, LTV $1,020–$1,300, GM 26%–40%.
  • HOA: CAC $1,200, LTV $2,300, GM ~23%.

Sales Channels ([07:37])

• Door-to-door: 50% of sign-ups (Philip and 1 new sales rep).
• Paid Meta ads: $600/month, mostly scatter customers.
• Cold outreach (emails, handwritten, direct mail): Effective with HOAs but limited scale.
• Referrals: Low volume.

“If you knock on 12 doors, you get a sale… you can just like, ‘Hey, I gotta get lunch—give me two seconds, knock on 12 doors and buy lunch.’” — Alex, [06:07]

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4. Identifying the Point of Focus

The Big Decisions ([14:44], [19:34])

• Avatar Focus: Must choose between doubling down on Scatter (short-term margins, easy conversion) or HOAs (future-proofing, scale, but price wars).
• Acquisition Channel: Door-to-door shows most leverage (high close rates, easily scalable with a team).

“I like having one avatar, one channel, one product, up to a million dollars or more. You’re kind of… right there. And so you have two avatars and like five channels.” — Alex, [19:21]

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5. Restructuring the Offer (“Solve for Upfront Cash Flow”)

Goal: Collect more upfront, cover immediate costs, fund growth ([18:03])

Analysis of Costs

• Labor, bins (cost: $116 each), sales commission ($50/sale), and route fulfillment.

Constructing the New Offer ([29:05]–[39:05])

• Problem: Current offer (3 months free) is too generous; upfront doesn’t cover acquisition/fulfillment costs.
• Key Need: “If we can get the first transaction to be $199, you’re covered.... What levers do we have?"
• Proposed Structure:
  • Annual Prepay Offer: $30/month for 12 months paid upfront ($360), bin included for free ($99 value).
  • Quarterly Offer: $89/quarter ($30/month), $99 for bin up front (total $189 day one).
  • Simple Script: Present both; let the customer pick.

Notable Quotes:

“What stops me from running an ad, getting 10 guys in a room, training them for a day, and having them do 5–7 deals a day on contract?... If only that one thing were true, what stops me?” — Alex, [21:05]

“If someone paid $360 up front, would you give them the bin for free?” — Alex, [46:28]

• Price Anchoring: Use a “bin fee” as an anchor; most people will pay it, but some will switch to annual to avoid it, boosting average cash collected.
• Upsell Leverage: QR code as an upcharge option for bin branding.
• Retention: Offer 3 months free, but only if customers accept the best cash flow terms.

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6. Team Building: Scaling Door-to-Door Sales

Systematizing Sales Recruitment ([59:43]–[62:42])

• Recruitment: Use Indeed/Craigslist. Position job as high-earning for go-getters (commission only, 4–8 hrs/day, $100K–$200K/yr potential).
• Onboarding: Group interviews to screen for “no crazies,” focus on work ethic and hunger.
• Training: Shadow/roleplay model (document the script; trainees watch, then do, then get feedback and improve).
• Incentives: Commission could be bumped to get higher-quality sellers; specialized sales scripts for fast, repeatable closes.

"You need someone to ask four questions and build a photo for... Just lower the bar—you’re not looking for somebody to cure cancer here." — Alex, [63:58]

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7. Simplification & The Action Plan

Key Moves ([66:07]–[68:55])

1. Pick the “Scatter” avatar – highest margin, fastest growth right now.
2. AB Offer: Quarterly: $189 upfront (includes $99 bin, $89 quarter 1); Annually: $360, bin free.
3. Hire and Train 5+ commission-only door-to-door salespeople.
4. Ditch Complexity: Eliminate most marketing channels; focus 100% on door-to-door until capacity is maxed.
5. Document & Duplicate: Build a quick, no-frills script and role-play based training program for sales reps.

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Notable Quotes & Moments w/ Timestamps

• “This is Philip. He gave up a high paying job in tech to start a garbage collection business. Last year he lost $150,000…” — Alex ([00:00])
• “If we just did this one thing well, we can solve the cash flow issue and hit your extra thousand in the next, like, 90 days…” — Alex ([69:00])
• “Does this feel like the noise in the world—quiet?” — Alex ([68:55])

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Important Segment Timestamps

• Problem summary & family pressures: [01:10], [01:59]
• Customer and market split: [02:23]–[04:30]
• Sales process and close rates: [05:37]–[06:13]
• Acquisition channel breakdown: [07:37]–[09:04]
• Financials, churn, margins: [11:07]–[13:09]
• Strategic “one avatar, one channel” pivot: [19:21]–[19:50]
• Offer-building workshop: [29:05]–[46:28]
• Sales team onboarding: [59:43]–[63:58]
• Summary and action steps: [66:07]–[68:55]

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Final Takeaways

This episode demonstrates Alex Hormozi’s signature approach: radical simplification, cash-flow-driven decision making, and focus on leverage.

• Clarity over Complexity: “Pick one customer, one channel, one sales process. Duplicate till you max out.”
• Optimized for Cash Flow: Structure offers to collect all upfront costs before fulfillment begins.
• Recruit & Train Aggressively: Door-to-door is simple to scale with the right systems and incentives.
• Don’t Be Distracted: Eliminate extraneous marketing efforts until you have maxed out your core channel.

“You’re home free. Sexy right now. That’s way better than right now. That is facts. No printer.” — Alex ([45:59])

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For Listeners

If you want a masterclass in building a local service business from loss to profit in a single strategy session—this is essential listening. Hormozi lays out the blueprint for anyone needing to turn around or scale a SMB, with actionable specifics you can implement immediately.

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End of Summary

Transcript

[A]

This is Philip. He gave up a high paying job in tech to start a garbage collection business. Last year he lost $150,000. So Philip has a wife and a kid and another baby on the way. And if he doesn't fix the business model fast, he'll put that growing family at risk.

[B]

Hi, my name is Philip. I'm the owner of Garby Disposal Services. We do residential trash recycling and yard waste collection. Our revenue is 642,000. Our net profit is negative $151,000.

[A]

That's the wrong side.

[B]

It is on the wrong side.

[A]

All right.

[B]

Our net margins are negative 23%. We been in business for a little under two years and we currently serve 2,500 customers.

[A]

So what's the problem?

[B]

We need to become profitable. We're not utilizing our assets enough. Trash is a very capitally intensive business.

[A]

Totally.

[B]

One of our trucks is at half utilization. Routes are not super efficient. We've had lots of unexpected repairs. We need more leads scale up our door to door efforts. We need to scale up our meta Ads efforts profitably though, and we need more conversions on the HOA side and we need to increase our route efficiency. So a lot of things we need to do.

[A]

So many things. Why is solving this important? What happens if you don't solve this?

[B]

I'm definitely in the thick of my rocky cutscene right now, where I left my high paying job at Amazon as a software engineer to start this because I thought it was a great opportunity. And I have been working 16 hours a day, seven days a week for the past few years with really little to nothing, actually negative to show for it. And I have a wife and a child at home. And my wife is actually due in the next six weeks, which props to me. So I need to make sure that I'm able to provide for her and my daughter and the new baby, especially, as you know, my wife won't be able to work. So it's really crucial that we figure this thing out sooner rather than later and think we're really close because by my estimations, we 3,000 customers is going to be that critical mass point. We're going to start making some money.

[A]

Mm. So here's my promise to you, which I don't normally do. By the time you leave, you'll feel absolutely clear on what you need to do in order to be profitable. All right, so I'll stay as long as it takes to make sure that you're good. Okay. All right. Okay. All right. So who do you help?

[B]

Yeah, so we have two types of avatars. 50% are what we call scatter. The other 50% are HOAs. And there's two different types of sales processes for these two types of custom customers.

[A]

Yeah. What's the, is there, is there a difference in, in like home value or income in the scatter versus HOAS or HOAS 10 do they tend to be nicer than the other ones or.

[B]

We've had some HOAs that are lower income for sure and then we have some scatter customers that are much higher income. That scatter group is thinking about switching to being HOA. So yeah, typically it does correlate with income. The HOAs are higher income in general.

[A]

Right. I think there's going to be a big strategic decision that we're going to have to make that you're probably not expecting and it's around. It's around who the avatar is. So we'll talk more about that. The second thing is going to be how you acquire them. So how do you help them?

[B]

Okay, so we have two different types of services for two different customers. So our scatter customers have once weekly trash recycling and yard waste collection. Most don't have an existing contract so we can just get them set up and start service even next week. But typically the beginning of the month.

[A]

Is what we do.

[B]

Then our HOAs have two service options there. So they can either have once or twice weekly trash collection. Most of them opt for the twice week trash collection. Yeah, 80%. So they're on three or five year contracts usually. And so we wait for the end of those contracts for us to be able to bid.

[A]

Do you reach out to find out when the end of their contracts are and then you just have put them in a calendar, basically Excel spreadsheet. Yeah. Okay.

[B]

Yep, yep. So once those are up for a bit then we start to. Then we just calculate the price and everything and then we often the low bid will win. Unfortunately that's commodity, name of the game.

[A]

That's what I want to talk to you about. Yeah. So we'll get. Okay, let me ask one more question about the, the slide before which is who do you help? So of homes in your area, do you know what percentage of them are scatter versus kind of like contained within hoas and like kind of off the basically off the board until they come up.

[B]

In my service area there's a very large majority that are HOAs.

[A]

Okay. Yeah, that is interesting idea. What percentage?

[B]

I don't know but I can just see it on a map.

[A]

Just if you guesstimate it. For me, it's fine.

[B]

70%.

[A]

70.

[B]

Yeah.

[A]

Okay. Okay. Are there a lot of other competing trash services on the scatter side?

[B]

There's one big one that's really causing us to reduce a lot of our prices right now.

[A]

Yeah, we're gonna. We're gonna. We'll deal with that. Okay, got it. Okay, let's keep going. So give me the money stuff. How do you make money?

[B]

So for our scatter customers, we charge 2967amonth, which is billed quarterly at $89. And as an intro offer, we offer three months free. That's not all in one go. That's just on the third.

[A]

Excuse me.

[B]

Second, third, and fourth invoice. And for our HOA customers, it varies pretty widely. It really depends on, you know, the home type, whether it's a townhome or single family home. Single family home with a lot of families are going to produce a lot more trash, and then we have to pay that at the landfill. And so it also varies depending on the number of units as well as the proximity to our current route. And they're actually all on a monthly billing schedule.

[A]

But the scatter ones are on a monthly billing schedule too, right?

[B]

No, they're built.

[A]

Oh, quarterly. Excuse me. Got it, got it, got it. Okay. Yeah, you price it. You price it monthly. I got you.

[B]

Yeah, exactly.

[A]

Okay, cool. Okay, so how do you get customers?

[B]

We have four different channels through which we get customers. So we have door to door, and I currently go and do around 300 a week. Knock on 300 doors and my close rate's right around 26%. And we hired.

[A]

What's your door open rate?

[B]

Door open rate was. I don't have that ready.

[A]

Just rough.

[B]

I believe it was around 30%.

[A]

Is it really?

[B]

Yeah, dude.

[A]

So you knock on 12 doors, you get a sale.

[B]

Yeah.

[A]

So chill. Yeah, you can just like. You're like, hey, I gotta get lunch. You're like, give me two seconds. Just like knock on 12 doors and buy lunch.

[B]

I'm not the best sales guy, but yeah, I mean, I can even sell, so.

[A]

Okay. Yeah. Okay. There's. There's some things that we're gonna do in the offer that things gonna help us out, but. Okay. So door to door, $50 commission per sale. That's what you're paying your current sales guy.

[B]

Yes, exactly. And he recently started with us three weeks ago.

[A]

Got it. And he's. How many deals is he doing a day?

[B]

So he's been getting better and better, but right now he averages right around 5.

[A]

5 a day. I mean it's not a bad, it's not a bad gig. And he'll just keep getting better, right? Yes.

[B]

Like yesterday he got seven.

[A]

That's awesome. Yeah, that's good. That's really good. That's very exciting. Okay, now you pay him 50 and he's collecting less than 50.

[B]

No, he'll. He's a contractor. So he just gets all the 50?

[A]

No, no, as in for what he. Oh, like he's collecting less than 50 but you pay him 50 for getting the sale.

[B]

He collects the 89 for the first invoice.

[A]

Okay. For the first three quarter or for the first three months.

[B]

Yep.

[A]

Okay, you said that it was, you said it was month two, three, four is where they're getting their free month.

[B]

The quarter two, three, four.

[A]

So they get one month on quarter two, quarter three and quarter four. Okay, got it. Understood. Okay, that's fine. Okay, so let's walk, let's walk through the. So I understand the ddd. Do you have percentage breaks downs on these? Between which one's what in terms of how many are coming from door to door, how many are coming from pay to ads, coming, coming from out reach, how many come from referrals?

[B]

No, I don't have those numbers.

[A]

Rough estimate.

[B]

Yeah, I mean Recently I'd say 50% have been coming from door to door.

[A]

Cuz I've really been pounding the pavement, quite literally. Yeah.

[B]

Yeah. And then we leave cards there and stuff and then people sign up.

[A]

Yeah, I did see your door hanger got 1.2%. Yeah. Super interesting.

[B]

Yeah.

[A]

Yeah. Okay, let's. Okay, we, we'll keep going. Okay. So paid ads, you're spending 600amonth.

[B]

Yep. Yeah, we have meta ads. We run 600amonth. That gets us HOA and scatter customers. But they're marketing, we're, we're targeting scatter customers. And we also do cold outreach. So cold email exhaust that list pretty quickly. And then I also have started doing in the past six months handwritten letters to members.

[A]

Yep, 100%.

[B]

And then we also have referrals for our Scatter customers. And though for each referral they get one free month of service.

[A]

So I'll just say this right now. If you have call it 500 HOAs, which represent 70% of the market, it's not a cold email play. So that's where it's the handwritten card, personal gift drive up. It's like you have 365 days. It's like go to two a day. You know what I mean? And obviously you're gonna have the ones that are due with their own whatever the renewal is. And so even if they're on three year cycles, 500 divided by three, so it's 150. So you go to one every other day where you decide to do one day a week, where you visit seven. It's like you are 100% up to date if you just did that. Yeah, I think there's some, there's, there's opportunity there. Okay. So. And then referrals.

[B]

Yeah, referrals for our scatter customers. When they refer their neighbor successfully, they get one free month of service.

[A]

Okay.

[B]

We also fast track them after they get 10 referrals and we just give them a free year at that point.

[A]

Cool. Does that get a lot of people?

[B]

Not as many as I'd like. I don't think I've been good enough.

[A]

About nurturing referrals, but I have, I have ideas. So how many do you have? What's your sales velocity per month? Okay.

[B]

Yeah, so we get total average leads is 217 per month. We close about 72 of them, which is a 33% close rate.

[A]

And is that when you see leads there? Is that from Meta Primarily.

[B]

A lot of them are organic. So they'll see our cans and then.

[A]

Oh, yeah. And you have like QR codes and things on the cans?

[B]

No, we don't. That's interesting.

[A]

Well, yeah, write that down. Yeah.

[B]

But yeah, they'll see our cans throughout their neighborhood and be like, everyone's switching to your service, so I might as well switch too. Yeah, they. Yeah, that's. They just call it. And so our Average month for HOAs is usually two leads.

[A]

And you provide the bins.

[B]

We do, yeah.

[A]

Do you have a specific color or do they have to be a certain color?

[B]

Yeah, I think it helps with our branding.

[A]

No, so they do have to be a certain color so they can provide.

[B]

Their own if they want.

[A]

Okay.

[B]

Most people just want our bins.

[A]

Okay.

[B]

And so we provide. We provide a trash and recycling container.

[A]

All right. I have so many ideas. Average per month, you get two HOA leads. You close half your HOA leads. That's great. And those are somewhat inbound, or is that from the outbound efforts you're doing?

[B]

Yeah, those. We'll. We'll start with the outbound and then we. Oftentimes I'll reach a property manager.

[A]

Yeah.

[B]

Or community manager, rather. And then they'll say, hey, not interested right now. And then they'll reach out later.

[A]

Got it. Okay, heard. So you've got a thousand scatter, 13 HOAs, 2500 doors. Okay, let me give me all the other numbers, unless you think there's anything that's important here. HOA customers more likely to convert in spring and summer. Okay.

[B]

Just that our churn is super low, but I think that that might change if we increase prices because we haven't been as aggressive for increasingly.

[A]

Yeah, I got you.

[B]

Yeah.

[A]

Okay. Yeah, because I do have. I have a bunch of questions on gross margin, lifetime gross profit insurer. Yep.

[B]

Yep. So our revenue is $642,000, as I mentioned earlier. Negative 150,001. Gross margin, 8% net margin. Negative 23.

[A]

So how's your. The gross margin seems off.

[B]

Yeah.

[A]

So how is that. How is it 8%? Because it can't. Cause like if you're charging $29 a month, it's not costing you $26 per month for each incremental ad.

[B]

So that was this past year. And this past year was rough with repairs.

[A]

Yeah, the $100,000 repairs. Yeah.

[B]

Just for one truck. Like that's not even all the trucks. Like, it was pretty excessive.

[A]

Brutal.

[B]

Yeah.

[A]

Okay. Yeah.

[B]

So blending hack of $67 with a blended LTV of $1300.

[A]

And is LTV lifetime revenue or gross margin?

[B]

Gross margin.

[A]

Okay. Okay, that feels better. What's annual retention or monthly churn?

[B]

Either way it's at 0.4%.

[A]

Nice. Nice. Sick. That's really good. Okay, so and then you've got marketing at $1,000 a month. Is that. That includes door to door?

[B]

Yes, marketing with door to door. That's actually we. Since we just started, that guy that's going to be increasing.

[A]

Be way more obviously if he's close in seven, that's three. You know, that's 350 right there. Okay, exactly. What else you got?

[B]

So our numbers by customer type, so 5050 for our revenue, so 300,000 for our HOAs. And then we have a CAC of $1200 with an LTV of 23 and an Altaviata CAC of 18 to 1. And our gross margins on this are 23%. And we have a total of 13 of these customers. And the reason the gross margins are off there compared to what was last year is because I'm going based on, you know, backing out some of those costs that we had that are one off, one off costs. And then for the scatter, we have 300,000 in revenue and a CAC of $51 and LTV of 1,021 to 1. LTV to CAC. And gross margin of 26 to 40%. The reason I did that range there is because right now it's at 26, but once we get efficiency, we're very easily going to get to 40.

[A]

Yeah, yeah. You can also raise prices a couple dollars. It's like, oh, look, we go 10%. We had three bucks.

[B]

That's true. Yeah.

[A]

Yeah. Okay. Yeah. Let me see the ads.

[B]

So we have a total ad spend of 7500 with a cost per click of $2.12 and total clicks of 3500 with total sales of 153 and a CAC of 5163 with an LTV of 1000. Just the other ones, and then LTV to CAC of 20 to 1.

[A]

What stops you from just spending 70,000?

[B]

A lot of it is our. Our cost per lead goes like, crazy, crazy high because it's such a small area we're marketing towards.

[A]

I'll tell you why. Okay.

[B]

When I was doing it, it could be doing it wrong. Um, but it was just. It was.

[A]

You're doing a lot of stuff right.

[B]

I feel like I'm doing everything wrong.

[A]

No, you're good. We'll get there. Okay. So meds. I got this. These numbers are good, though. You're saying that it skyrockets after a certain point. We'll deal with that. Do you have any other metrics or creative to show? I have the cold outreach.

[B]

It's kind of skewed a little bit because it's so low for our. Our cost per lead because it's all public data. But this is for email as well as the direct mail.

[A]

You're just not valuing your time because you're the one doing it. Yeah. Yeah, that's right. Okay. Yep. So, Yeah, I mean, $12,000 would be a 700 to 1. Yeah. Let's do more of that. Yeah. It only cost you $174 to make, you know, 12,000. And you got nine more HOAs in the pipeline.

[B]

We do, yeah. A lot of them seem very interested.

[A]

If you close half, what happens to the business?

[B]

The business grows substantially.

[A]

Okay. That sounds chill.

[B]

That sounds pretty good.

[A]

Okay. You know, so what's really interesting about your business is that we have two key decisions that we have to make. Decision number one is what avatar we're going to focus on. Decision two is what channel we're going to focus on to get them. I think the direction we go in will depend on you, but you might be surprised by which way we go.

[B]

Okay.

[A]

If you wave a Magic wand. What thing is giving you the most heartburn right now?

[B]

Not being able to, obviously.

[A]

Money. Yeah, but what's the indicator prior to that? Like, is it like, if people paid you $200 up front, that would change the economics of the business dramatically? Like, is it simply just not getting leads? Like, I'm like, that's. I just want to understand that part.

[B]

Yeah. It's more about offsetting some of the upfront costs.

[A]

This is what I want to solve for, which is I would like to have the most scalable acquisition channel we can. That can get. Because also you've said you're like, if you spend $7,000 even in a local area, you're not even getting close to tapping. How big's the market overall? Like on a, you know, 10, 20 mile radius?

[B]

Yeah, it's pretty big. A few million people.

[A]

Yeah. I mean, like, you're not even close. So, like, I would love to see spend at like 7, $10,000 a month on the Facebook side and then probably another 5 or 10,000amonth on PPC, which will have super high intent. We'll have different metrics around it, but we'll get there. For us to solve the problem for good, we just need cash in the first 30 days to be greater than your cost of goods sold. And CAC fully loaded. Right. So do you know what that number is? Like, what's. So let's ignore CAC for a second. I guess we have 50. We can use that as a placeholder. Or 67. We want to be bullish or bearish. So 67 CAC. And then what's it cost to kind of like onboard someone and kind of like get them going.

[B]

I do that all myself.

[A]

So I don't mean if you paid someone and you. And the bin was like, fully, fully bake it in. Because we want to scale past you. Right.

[B]

Yeah. So to deliver all the containers for, you know, let's say like 200 customers would be about $500 to pay someone.

[A]

So that's two, two dollars and like 50 cents. Yeah. Per customer. Yeah. So that's not big. So when I'm. So you're going with this where it's like, okay, if it cost US$70, if we made more than 70 on the first transaction, which you do. What's. What's something like, what's stopping. It's just that, like, you can't get more leads. And then it just. And then it. Because you're at 20 to 1.

[B]

Yeah.

[A]

Right. And you're at least more than 1 to 1 on the front end. So, like, why, like, why not? Is it just. You just can't. As soon as you spend more, just goes to zero. Like so.

[B]

Yeah. The issue is, is that we have fulfillment. Those months after that we still have to cover. So, like, they pay for the quarter in the first month and then we have to pay for fulfillment in months two and three, which is completely. It costs roughly. Like, if we get them.

[A]

Give me that number.

[B]

That would be fulfillment.

[A]

That's what I'm saying. Cost of goods. So give me the fully loaded before you get the next payment.

[B]

Got it? Yes. Okay, so for each customer on the exit, it's $14 or per pickup per month, right.

[A]

So it's $14 and you're gonna pick it up three times.

[B]

We have three pickups per week. Yep.

[A]

Wait, hold on. It's 14 hours per month, right?

[B]

Yes.

[A]

Okay, 14 hours per month. And they're paying quarterly.

[B]

Yes.

[A]

So it's times three. Right. So it's 42 bucks in costs for the first month of delivery. When I say delivery, I mean like fulfillment. Right. And your CAC is. We'll call it $70. Right. So if we get upfront cash over, call it 120 bucks, you could be good to go. Right. Well, then let's solve for that.

[B]

Yeah.

[A]

Okay. Sorry.

[B]

Pull it out of me.

[A]

No, you're good. I mean, that's why we're here. Okay, cool. Let's come over it. Let's. Let's break it down. Let's figure it out what order I want to do this in. I think we need. So I think what we're going to do is I think we're going to go avatar. I want to get clear on this because I think that's super important. Two is I actually think we're going to go offer next. We have to figure out, like, how we're going to, you know, do it, you know, facilitate the transaction. And then once we know that, then we can do acquisition channel. And then I think we're going to go ads, and then we're going to go sales process. We'll do some funnel. Funnellytics. I think that's it. I think that's what we need to do. Okay. You're at that in that stage where, like, I like having one avatar, one channel, one product, up to a million dollars or more. Right. And you're kind of. You're right there. Right. And so you have two avatars and like five channels.

[B]

Pretty much.

[A]

Right? Yeah. And so you feel spread thin. This is me just Hearing you out. And so what I want to solve for is we have to make this decision between HOA and Scatter. So if you could just do one, which one would you do?

[B]

I think HOA is a better opportunity.

[A]

Okay, I'll tell you why I don't like either of them.

[B]

Okay.

[A]

And then I'll tell you why I like both. Okay.

[B]

All right.

[A]

So the reason that I don't like HOA is I never want to have a commoditized service where I get into an auction, because then it's always just going to be race to the bottom. Now the reality is that that's not going to change. And so it's like, what business are you really at? Right? And so the business that I think you're really in is the efficiency business. So fundamentally, like, if you. If 70% of the market is owned by HOAS and they continue to gobble more and more, you know, more of these houses continue to glob together, then it's kind of an eventuality, right, that that happens. So figuring out the HOA offer, I think makes sense from a future proofing perspective. But the strategy of the business has to be geared towards efficiency because it's the only way you're going to beat the other players. Because I agree. I think they're going to commoditize you, and I think they're going to make it lowest bid. Fundamentally, the reason that I like Scatter in the short term is that you can price more aggressively, you can have higher gross margins, you can out market, you know, your competition. There's still a decent amount of market share that's there, but. And acquiring them is super easy. If you just knock on 12 doors and get a sale, it's like, all right, well, how many doors do they knock on?

[B]

That's true.

[A]

It's like very straightforward because, like, taking it to the hypothetical extreme, it's like, okay, what stops me from running an ad, getting 10 guys, getting them into a room, taking a day to have them, you know, to train, to train them, and then all of a sudden, I've got 10 guys doing five or five to seven sales a day, all on contract with no risk. That sounds relatively appealing. And the nice thing with door to door is that they already naturally have a route, right, which you already know. And so it makes it even more efficient for the business right on the back end. So that's what I like about Scatter. But I do think that there's, you know, long. Long term, there's. There's probably some downside risk or. Sorry, yeah, there's some risk. The hoa. I just feel like you're going to continue to get squeezed. Yeah, that's the only. So you're like, okay, well then which one should I do?

[B]

You mind if I add something?

[A]

Yeah, go for it.

[B]

I think that the thing with Scatter, that's even better too. And the reason I said HOA was not really because of, oh, you're good. Like the. I like. I like hoas because I think that the competitor that we have right now that's really aggressive is really going hard. Scatter and no HOAs. So, like, it'll. And then a competitor that only does hoas was recently acquired, so people are unhappy with them. So then kind of opens it up for me. But the thing I love about Scatter is what you said about pricing.

[A]

Yeah.

[B]

And then also the fact that it's only once weekly collection, so we increase throughput for each truck. So that's the thing I like about it. But in terms of, you know, me being one guy, I guess I'm just thinking about it in a limited sense where I'm. I'm like, I'm only one guy. How many doors can I knock on in a day?

[A]

You know that's not going to be you.

[B]

Yeah, exactly. Yeah.

[A]

So we just. I mean, let's think of it this way. You said when you get to 3,000 doors is when you're like, super profitable. Right. Or, like, it becomes more profitable.

[B]

Yeah, we have money.

[A]

And if we get to 5,000 doors, then you're like, we're good. Yeah, you're good. Well, I mean, in my mind, I like to think, like, if I had to take this to its natural extreme and I only had have one thing be true. Because I like to, like, make a plan on, like, the fewest need to believes as possible. Like, every single new assumption that we introduce, like, dramatically decreases the likelihood it occurs. If I said, all right, do you think it's humanly possible to get 10 people to work on commission to knock these doors and get to, let's say, conservatively five a day? Right. Now, this guy's gonna keep getting better. He's three weeks in, he's already doing seven. Fine. But, like, let's just say they stick to five a day. Yeah. That's 50 sales a day. It's 1500amonth. You're looking at 20,000 doors by the end of the year. Right. And so to me, it's like, okay, well, that overshoots our goal by, like, you know, 8x so there's all these things that you're doing. But if it was like, if only that one thing were true, then what are the other need to believe that are associated with that, which is that you can find the houses to do these door knocking on. Do you have the ability to do that?

[B]

Yeah.

[A]

Okay. So knowing where to go is not a problem. Yeah. And so basically your ability to solve two things. One is the cash to pay the salespeople that they collect as much as you owe them and that you can cover the cost of the first year, the $42 that we went over earlier. And so like, if the only thing you did was like, you went home and you were like, I'm going to go find 10 dudes and they will be commission only and I will just rejig the offer so that I can get $42 plus what I have to pay them up front. We don't have to talk about anything else.

[B]

Yeah, let's do it.

[A]

I mean, like, I can go through, like, I can look at the ads and I can tell you what I think, like, could be better. I can tell you why the. Which, you know, we can go through some of those things, but fundamentally, like, I just want to be like, here's the ramrod. Like, if only this were true. Then what stops me from doing that? Not a ton. Which is just the offer and getting the sales guys on. Yeah. And then after that's done, it's like, that's it.

[B]

Yeah.

[A]

And then we just. And then we just jam it. And then you just don't let yourself get distracted. Right. I will give you my. My blessing on if you get an inbound hoa, you can close them. But I still would be like, this is our growth strategy. I mean, like, yeah, sure, except free money, provided it doesn't. There's. It's super operationally efficient. It does take some of your time. Fine. You're the owner. You can close big deals. But by and large, I think that's the play.

[B]

Okay.

[A]

All right, great. So I think we go scatter. Great. That was decision number one. Now, acquisition channel, you already have 50% coming from door to door, so that gives us that one. Right. So I'm going to hit the sales process in a second, but I think we need to go on offer because this is kind of the big. The big unlock of this business. All right, so we have to get. You said you're going to pay them 50, right?

[B]

Yes.

[A]

Okay. So here's how I would restructure this. I would say we have to get $42 no matter what, period. Because that's what it costs. That's hard costs. Right. So this is base. Then got to get the sales guy paid. So I'm just going to put commission here, which we can fill in in a second. So we kind of backfill that. Okay. We have to get a commission and we have to get the contract. Right. So what I want to do is find something. So do you give them all a new bin or can they get like a. Do they get like somebody else's bin or like, how's that work?

[B]

We recycle the bin. So if someone like the three people who canceled, then we'll. But for the most part they're new bins.

[A]

They're new bins. Yeah. Okay.

[B]

And we'll finance them over three years before I bought them with cash. But then I'm like, okay, maybe we should probably move on to more cash.

[A]

You wait, you used to pay for them in cash. You financed them.

[B]

Now I'm financing them.

[A]

Yeah. And do the customer. Is that $14 per month, including, included? Yes, yes. How much does it cost for a.

[B]

Bid for the set, including Freight? It's 116.

[A]

All right, so it's 116. Okay. Now, so this is bin. What else can you sell up front?

[B]

Bulk pickup, maybe.

[A]

But only how many. What percentage Customers, like, opt for that.

[B]

That's also seasonal and that's.

[A]

So. No, that's not the offer. Okay, what else? So I'll tell you this idea. So we talked about the QR COD earlier. So what I was thinking about doing was like, you put the. Just the ugliest massive QR code on there. And you just say, hey, if you want to not have this big QR code on there, it's. It's an extra five bucks a month. Or if you're cool with it and you're still like. Or cool with us advertising the business, you allow us to leave it on. Okay. And I think a lot of people don't give a. Yeah, right. And so all we're going to do, though, is just tack that onto your existing pricing. So you're. So if they say, I don't want the QR code, then they're going to pay $5 more than your existing price. So they're. We bake in a little price increase there. So we get $5 for the QR code. So go buy stickers. They're like, not expensive. And just put this massive QR code and put your phone number and put your, like you've got this. You've got this billboard that's just sitting out there. What color are the bins? Gray, man. I totally want them to be neon orange. I'm dead serious. I would want everyone to be like, jesus, what is this company? But they would notice it. Yeah, right? I mean, that's what you're trying to. You're trying to stand out.

[B]

Yeah.

[A]

You said. Wait, didn't you say you wanted the branding? You wanted to be on brand with the gray? Yeah.

[B]

People were like, clean and stuff.

[A]

You think gray's clean? It looks. You should look at them. They look pretty clean.

[B]

We have people calling us and, like.

[A]

I seen your face.

[B]

Clean.

[A]

They're so gray. It's like the perfect gray.

[B]

Light gray.

[A]

50 shades. Anyways, okay, okay. This is. This is the. This is how we break. This is how we solve the business. Right? So, like, let's take the time on this. The other stuff is really easy. I'll show you some easy. Like, I don't even. Like, I can't get into ads. I can't get into the funnel. Like, if we just do this, we win.

[B]

Yeah.

[A]

Okay. So you don't charge them anything for the bid, Right. As far as they're concerned, we do.

[B]

Have a separate process through our website. So we at the door, we have that offer that I mentioned. But then when they go to our website, enter in their address and everything and they're qualified. They do get charged a $37 initiation fee, and then they get charged 35amonth. So we have a little higher price point if they don't take advantage of that. But most people do the door to door.

[A]

And so this 42 is labor, right? Yes, labor. Plus truck breaking.

[B]

Yeah. And dump fees.

[A]

Okay. Yeah, plus dump. Okay, got it. I think our key is actually how we structure this, the bin, so it cost you 116. Is there a way that we could be like. Because what I want to do is. You see where I'm going with this, right?

[B]

Yep.

[A]

Because, like, if we can get the first transaction to be like 199, you're covered, right? Because you've got, like. So if we add this together, we've got 158. So 158 is the true, like, cost. Cost. Right. Of. Of getting this person set up, then you have the commission, which is 50. So 208 all in. If we got that, you're like, yeah, right.

[B]

Something I've been playing around with is maybe doing. Only doing the three months free if they pay annually up front.

[A]

Yeah, totally.

[B]

And Then like downsell to the 89 a quarter with no months free.

[A]

I like that. Yeah, I like that.

[B]

Because even the rate is really attractive. But the. I mean, the only negative about that is sometimes they're like, yeah, sure, let's do it. And then they opt out because their current provider matched it. But then the three months free usually is what puts them over the edge because the current provider will not offer the three months free. But out of those that do that, I would say it's only maybe one in eight would really prepay. Oh, would like after we like, okay, it's 89 a quarter. And they're like, yeah, actually my current provider matched it, so. So it's like one in eight people.

[A]

And most people are just like, here, just take the business. Yeah, yeah. So if we get the deal on seven out of eight, who cares?

[B]

Yeah, right. Yeah.

[A]

So if we go. What I'm trying to play with is, so we've got. What levers do we have? Right. So levers that we have this little QR code, like we're going to make your thing look ugly. That's thing one. Thing two is we have the bin. Thing two, we think three is we have the commitment. Right, Right. These are. This is like what we're. These are our puzzle pieces. Okay. But I want to collect 200. That's what I'm trying to do. Okay, so a quarter is 89, right?

[B]

Yes.

[A]

Is there any reason. Do you think anyone's Gonna Balk at 99? 89 to 99.

[B]

A lot of people are paying 105, so it may not get them over the edge.

[A]

You mean it's not enough savings? Yeah, I hate being low. Low cost.

[B]

Yeah.

[A]

Okay.

[B]

But I think that there's still some people who would definitely convert because there's some people I talk to who are being charged like 180 a quarter.

[A]

Yeah.

[B]

It just all varies, you know, depending on if you. If you call them to say, hey, lower my rate.

[A]

So 80. Okay, so we got 9090 is 180. Right. In terms of cash. Right. There's going to be some setup fee. Right. Which we could say we have a 42 and we also set up fee. Right. So it's another little, little thing. We're just. We're constructing an offer right now. That's literally what we're doing. Okay. Because you could do three months free and it's 33 per month. Right. You could still do three months free.

[B]

Yeah.

[A]

So that works fine. Oh, here we go. So we can basically have the QR code be our $5 extra a month, and you're at 29. So I could see the 35. Okay, right. Or you can make it. Yeah, that's fine. So that gets us to $35 per month. Right. And so if we did times six, and that's going to be two. Was that. That's 30 plus 180. So 210. All right. So it's going to be 210 in cash. And if you commit to six. And you normally just eat this, right? Yeah. So if you commit to six, we'll give you our $116 bin for free, and we'll waive our $49 setup. So can you talk a little bit.

[B]

More about these converse right here?

[A]

Yeah. So this. Yeah. So $35 a month is the price, right? Yeah. But what we're trying to do is get them to prepay for six months.

[B]

Okay.

[A]

So that's the main offer, is you prepay for six, and then that gets you a free bid and we waive the setup fee. Okay. If you don't prepay for six, you can prepay for three. And we'll give you. Actually, we'll just do this. We'll do this. We'll do 12, and we'll step down to 6, and then we'll step down to 3, which is your current offer. Okay, so 12 months gets you. Because what we're looking for here is blended average cash per door. So if you have some people who pay 420, and even if it's like one out of whatever, one out of five pays 420, we're still effectively adding 80 bucks per door in cash collected. Okay. So even if the vast majority of people. If Everybody took. If four out of five took your current offer, and then one out of five takes the 400, it's like we're still adding 80 with the existing whatever 89ers that you're getting right now. So now our actual blended average close to like 170 a door.

[B]

Okay.

[A]

Does that make sense?

[B]

Yeah. Yeah.

[A]

Okay, so I think we go times this. Now if they're like, I don't want the QR code, then we're like, fine, we'll drop it to 30. Right. If they don't want this. And times 12, so that's 360. And we get that up front, which is gonna have lower turn anyways. If they say, no, I don't want to do that, then we say. Because with that, you get free bin and free wave or like free setup. Right. If they say no, I'll just do six, which would then get us the two. Whatever the $200 ish price point we can get to. We can finalize the prices in a second, but you get your $200ish price. And when you do that, we can't waive the bin. We can waive the setup fee, but we're going to add. We're just. We'll finance this over the duration. So that's where you can get the difference in terms of the. Like, it's $35 a month if you do six months. It's $30 a month if you do 12 months. And if you're doing just month to month, if you sign up today, I'll let you waive this fee, but you still got to pay three.

[B]

Okay.

[A]

How does that feel? Complicated. Yeah. Well, no, no, it's complicated because we had to go through everything. But let me, Let me. Let's clean it up.

[B]

Okay.

[A]

Because we got to be able to explain it to the sales guys.

[B]

Yeah.

[A]

So the offer at the door is going to be 12 months. And what price are we going to charge at 12 months for 12 months? Up front? Up front. So we're going to do 30. So that's going to be $360. Yep. If they commit to six months, that's going to be at 35.

[B]

Okay.

[A]

So that's 210. And I would say we bill biennially, which is bill twice a year and then three months. Do you do ach?

[B]

We just incorporated that, actually. Yeah.

[A]

Okay. Do you have a processing fee?

[B]

Yeah, so we stripe.

[A]

So it's. Yeah, but like, do you don't charge a processing fee?

[B]

No, but we like. I've gotten a bunch of people to switch over. I like, offer them a gift card, a small gift card to switch over to ach. But then we don't do a.

[A]

Well, I'll tell you, really a fancy one. So say that you charge the 3%. So this is all these are, plus processing. And then if they're like, oh, I don't want to pay the processing fee, it's. Oh, no worries. If you want. If you have a second form of payment, we'll waive the processing fee. It's just because we have the processing fee. Just because if the car declines, it just takes us work to go redeem it. And then you get your service interrupted and you have trash sitting around. So it's honestly in everyone's best favor. It's like, honestly, no one ends up paying it. They just give us two forms.

[B]

Okay.

[A]

Oh, thanks.

[B]

The. So I did actually do that and when I got the, the prices book that you gave at the workshop.

[A]

Yeah.

[B]

And so I kind of messed it up. I did like two things. I did like an annual fee.

[A]

Yeah.

[B]

And then I also mentioned. Oh yeah, we're also doing a credit card fee, which is really. I was just too much.

[A]

Yeah. So many things. Yeah.

[B]

Yeah. But I did that and just I was looking into how to add the processing fee and like you have to like go to MasterCard and Visa and all that stuff. And is that true or like they're, they're saying like you have to legally go to these companies.

[A]

I don't think you can just charge 3% more.

[B]

Oh, we can just do.

[A]

Okay, okay. And just say this is our fee.

[B]

Okay.

[A]

You can charge whatever fees you want. Check with your legal counsel. Yeah. Okay. Yeah. Right. And then three. Right now we'll keep it at, we'll keep it at the three month rate, which is going to be 35. Right. Which is 10, what is that? 30? 105. Right. But we'll still waive the $49 fee. Okay. This one wave is waves bin and fee, I think. Right, that we have. Yes. So this gets the discount. So this gets you the discount and the bin and the fee. So it's like what you like how, why is it. So it's like the effective rate here is 30, 35 and then here it's also 35.

[B]

But.

[A]

Bin, how are we going to press? How are we going to do the bin? How are we going to work that out? We're close. This is honestly the most important thing of today. Like we nail this, you go all in on door to door, we can get there by the end of the year and you're set. So I just want to like make sure we nail this. What else do you think?

[B]

So with the bin, are you saying that they pay the full 116 upfront?

[A]

I would love that. Okay.

[B]

But for this one, I guess because this is not waived with this, with this offer.

[A]

Well, what if. So if you didn't have the bin. Right. What would their actual rate be? So what do you charge people who don't. Who provide their own bin?

[B]

Yeah, the bin is like a few. If you, I mean, depreciating it over it's use.

[A]

No, not the depreciation. I mean like. Well what. Okay, fine, you do you appreciate over what, three years? Is that what it is?

[B]

They have a 10 year warranty on them.

[A]

So. So 10 years is we depreciate over. So you paid. It's like a dollar a month or something like that. A few cents. Yeah. Yeah, yeah. How's it a few cents?

[B]

Yeah.

[A]

Because over like 116 months. So doing that month wrong. Yeah, it'd be dollar. It'd be dollar.

[B]

Doing that wrong.

[A]

Well, 12 months times 10 is 120. It's $116 bid. So it's 90. Whatever cents. Okay. Per month. Okay. So it's a dollar, it's a buck. They don't know that you do that though. No. So that's the thing. So like that's like that's, that's one sided information. Don't worry, we'll cut most of this thinking time out to figure it out. No, but I want to. I think the magic is in this been. I actually think that that's, I think that's where the real leverage is.

[B]

Okay. It is something I've been wrestling with because initially when we were doing it and we didn't have the competitor, we were like charging 99 for like. And they were like, okay, fine. But then some people bulk at it and I'd be like, okay, fine, we'll wave it. But most people would pay for it. But now that it's really competitive, there's like, I'm going to go to this other guy who's giving me three months free 89 and I just have to pay for the quarter.

[A]

So. Yeah.

[B]

So it's become a little bit more challenging in that sense. Doesn't mean we can't do it.

[A]

Yeah.

[B]

But that had, that has been something I've done in the past. I think most people were, I kind of played with 99 and then I went down to 50 and most people were like, they didn't really care about 50 as much. But then like when I did, because.

[A]

I like so I like. I mean you're currently charging nothing. Yeah. So if we said okay up front, we have a $49bin fee, right? Yeah. You can buy the bin for 49 bucks. We know that it doesn't matter. Right. We're just adding, adding money. So they'd be like, eh, it feels reasonable. Right. 49 bucks for the bin and it's $49 initiation. I don't know. I'm just coming up with this, okay, it's $49 initiation. And then you have your first quarter which is, let's just use your old pricing 89. So that would get us to 190. We still have commissions.

[B]

Yeah.

[A]

But this bin isn't a real cost because it's going to cover towards $42 for the quarter that we're calling it the bin fee. But it's really covering our labor for the first quarter. Right.

[B]

That's clever.

[A]

Yeah. And their initiation is actually our commission.

[B]

I gotcha.

[A]

Yeah. And then our 89 is hopefully our margin. This feels okay. Do you think you can sell this?

[B]

I think. I think people will be really upset with the extra 49.

[A]

The initiation.

[B]

Yeah. I think they understand the bin.

[A]

Well, why don't we do this? Yeah, like, we can either, basically. Would you think they'd be more comfortable paying 99 bucks for the bin?

[B]

And they own it.

[A]

Yeah. It's your bin. You keep it forever. Yeah. Unless you cancel, of course. In which case we take it back.

[B]

Yeah. Yeah.

[A]

I mean, I think that I'm just.

[B]

Like, replaying anecdotal experiences.

[A]

Take your time.

[B]

I'm just worried people would be like, yeah, that's a deal breaker for me. Like, I. I won't pay that for. For the bin even if I own it. I just don't want to have to provide it.

[A]

Yeah, but what percentage?

[B]

You're right. I think it'd only be like 25% or something. I just always remember the negative. Right, of course. Yeah.

[A]

The thing is, all the new sales guys coming in aren't gonna know anything in terms of, like, what status quo is. So you're like, here's the deal, guys. You're gonna get paid 50 bucks on each one of these. And you gotta collect two things. You gotta sell them. Ben. They gotta pay their first quarter. That seems pretty straightforward. And we can waive the initiation fee.

[B]

Yeah. And we still do the three months.

[A]

Free with this, or no? Yeah, I think you can still do the three months. The three months free.

[B]

Okay. I don't hate that. And do. Just to clarify for myself. So the bin, it's actually theirs now. So they're actually paying for it.

[A]

Well, it's 116, right? Yeah. Yeah. So why not? Now, if they. If they cancel before their term, then take the bin back. Right. Which gives you another piece of collateral. Yeah. Okay, so all. And you lose 16 bucks on the bin. Who cares?

[B]

Yeah, exactly.

[A]

So I think. I think if you go, you sell them the bid. You have this. You have the first three months. Right. First quarter.

[B]

And we're in good shape with that.

[A]

And this factors. And then you give them one free month each of the next quarters. Yeah. And then that means that you're charging them, what, 60 on Q2, Q3, Q4.

[B]

Exactly. 59.

[A]

And some change. Got it.

[B]

And so how do we handle situations where they were like, I'm not going to buy your bin, so you can provide your own.

[A]

Okay.

[B]

And so we just would. As long as them as a customer.

[A]

Yeah. I mean, you can provide your own if you want. Yeah. Okay. You could if you wanted to say if you're not willing to do that, we'll finance it over three years, but we end up charging you one finger fifty.

[B]

I like that. Yeah, I really like that.

[A]

Because then it gives you a three year term.

[B]

Yep. Okay. And then with the three year term budget in like, I don't know, add in like a, I don't know, 4% price increase. Sure.

[A]

Okay.

[B]

I think that's.

[A]

It feels doable. Yeah. I still want to get this anchor though, because we still want to. Because some houses are like, fine, just build me once. I don't, I don't want this again.

[B]

Exactly. Yeah, yeah.

[A]

And so it's like start at 360. It's like, yes, for the year. Okay. So we're getting close. We're going to do it. We're going to do a cleaner, A cleaner next version of this. All right. So. All right, I want to think through it real quick. So this is the core offer. Right. We'll clean this up, but it's like 99 bucks for the bin. 89 for the first quarter. You still get your three months free. Cool. That's fine. I still want to start higher because even if we get 20% of people to take, which we totally will, I'm telling you, we're going to. That would be really big for the business. Because if we can get this on the core offer and then we can add 80 to the average door, then that takes this. So this is 190. Add 80. We're at 2. We're 270. Right. Average cash collected per sale. You're good.

[B]

Yeah.

[A]

You're home free. Sexy right now. That's way better than right now. That is way better than right now. That's this, that's. That's facts. Fa. Fa. You know, it's facts. No printer. Okay, okay, okay. So here's, here's where this gets sexy. Okay. I got it. Okay. So. All right. Okay. I think this is coming together. This is coming together. If someone, if someone paid 360 up front, would you give them the, the bin for free?

[B]

I think I do that.

[A]

Yeah. Okay. Boom. I think we're just going to have two offers. Okay. Keep it super simple. We're going to have 12 months, and with 12 months, they're going to be at $30. Right. And they're going to pay 360 in total, but free $99 bid. So they don't have to. They don't have to pay that. Right, Great. And then the core offer is going to be three months at 30, but they have to pay for the $99 bid and three months up front. So all in, they're looking at 180. One night, whatever. 189. So now look at that AB offer. Yeah. So would you rather pay 360? Pay for the year. I'll give you the bid. It's on me. Or 189. You just pay the first quarter, but you just got to pay the bid. Right.

[B]

Yeah, I like that. Now we just gotta hustle.

[A]

Yeah. The nice thing is that this keeps it super simple. The billable is the same. All we're debating is who gets the free bin and who doesn't. You get the free bin when you commit for the year. Because listen, it costs me money to do this, but if you commit for that period of time, I'll throw it in. Right. Like it actually cost us 116. So like I'll be like, we. We actually lose a little bit of money on these bids.

[B]

Okay.

[A]

Yeah. But if you commit to us, we'll commit to you.

[B]

Yeah, exactly.

[A]

And then our breakdown is. Let's say. Now let's look at the math. So let's say 80% take our $189 offer and then 20% take our 360 offer equals $72. And this equals. Survey says Michael. Jamie. Jamie. Well, it's 19.2 is 270 is $27 off this, which is 162. So we add this together, average per door, and we needed 208. Yeah. And then you're home free. Doable.

[B]

Yeah, I just. I've never thought about it that way.

[A]

You still get three. You still get three. Like the offers are banging. Yeah, it's like you get three. Like the offer is great because you're giving three months free either way. Yeah. So I would. That way. I think you've got this great feel. Right. You say, listen, we're gonna give you three months for you the Right. Just because you're switching to us. So we're happy to do that, but if you're willing to commit to a whole year, give you the bid. Right. If you don't want that, no worries. We'll get you set up. Yeah. Yeah. What are you going to do? What are you going to do with all this money?

[B]

Yeah, I don't know.

[A]

All right, so that's the play. That's the play.

[B]

Okay.

[A]

And for our folks at home, the reason that that was so important is that we needed to get above $208 because he had a $50 commission that he has to pay. And we knew we had $42 of labor. And we know that he had these bins that he's been basically fronting the cost for for customers. Now, to be clear as of right now, what was the other cost though? There was something else. There's labor, there's commission, and there's something else.

[B]

No, I think it was just bins.

[A]

Oh, so I'm just being greedy. That works. Okay, so then we got. Yeah, yeah. Well, I like to have, I like to grow businesses debt free if I can because I just think there's, there's always a way if you just think about it hard enough. And so the bench, which right now he's been financing over 10 years for $116, but when we add all these things together, we get to 208. And so in a perfectly debt free, cash flow positive way of growing the business, we have to get on average over $208 to, to break even up front and have really high, really strong cash flow for the business, which has been the biggest constraint for you. So getting above that is the objective. And so what we did was we solve for it by having an anchor on the top that we know 20% of people are going to take and that contributes an extra $72 a door where the core offer is going to be 190, which already solves this. Cool. So that was for everyone back home. Okay, now let's go back to our handy dandy. Isn't this fun? It's a lot of fun. Okay, so we have our, our new offer, our 360 for 12 or 12 at 360. And then we have our 3, 189 money. And if you really get wild with that and you're like, you know what, I don't need all the extra cash. So you can pay the guys 100 bucks a day, 100 bucks a deal. And they'll be willing to sell more. If you're like, you know what? I don't need all the cat. Like, I'd rather just get more aggressive on the spend. Yeah, you can get way better guys if the guys can make, I'll tell you the difference in salesman that you can get at $500 a day, $15,000 a month, almost $200,000 a year. Like a different, an order of magnitude better salesperson. And thing is, those guys might be doing like. And that order of magnitude better salesperson might do 10 deals a day. Yeah. Because the guys who really do door to door, they run between doors. Really? 100%. Okay. Because they know it's a numbers game. Yeah. They're like, for every 12 doors I knock on, I'm going to get a sale. So if I run, I mean, that's why the UPS guys, like, the guys who are, who are commissioned and are really understand the game, they sprint back and forth because you can cover four times the doors just by walking fast. They cut across the lawn. They don't go on the. On the sidewalk. Like, they're moving. Okay. So we're going scatter. We're going door to door as our channel. We have our offer, our 12, our AB offer, which is great. The extra guys get the bin. Awesome. And now we don't even have to have a financing partner. Yeah. And if you want, you can and just collect the cash. The next thing is, let's talk about sales process on how we're going to teach these guys. Okay. Okay. How do you teach your guys right now? And what's the sales process?

[B]

Pretty relaxed. I mean, he's the first guy I've done, so I just take them door to door, show them how I do it, and I generally tell them, you.

[A]

Just pardon me, he's right next to you.

[B]

Yes, exactly.

[A]

Okay.

[B]

Yeah. And then I'll do that for a few times, show him how it works. Show him how to get a few sales. And then I watch him do it and let him just kind of go at it and then chime in if I need to, and then eventually just kind of like give him critiques wherever I see.

[A]

How many doors can you knock a day?

[B]

I think, I think easy. Like 150.

[A]

Okay.

[B]

If you're out there for eight hours.

[A]

Yeah. Yeah. So 150 doors. If he's closing, I mean, if he gets to what you're doing, one out of 12. Yeah. Right. Then he's closing more than 10 deals a day, which is chill. Even at 50.

[B]

That's what I hear. On average, like, conservatively, you can get 10, but most guys get 15.

[A]

Yeah. So the nice thing with your business is that you're going to be in person with them. And so there's basically two primary ways that people learn. One is modeling, and the other is basically doing it. So children learn through modeling. They watch you do something and Then they learn it. Right. Alternatively, you take it up a notch when you give feedback. And so doing role plays, like in very real time with them is gonna be the fastest way to speed up the loop.

[B]

Okay.

[A]

So it's literally just like have the door at your facility or whatever. Like, I mean, you wanna, you really wanna get them in the, like in the mechanics of. I say this as the door opens. Like, it will teach them, like, don't just stand next to them, like, close the door, open the door, close the door, open the door, close the door, open the door until they just nail it every time. Cause you know, the first five seconds of them opening the door is like, that's the only shot you really have. And they're making their split second decision. And so it's like you have to drill super hard. So they could just say it in their sleep. And they say it the right way every time. But they should absolutely be following a script. And for this type of sale, this script, I mean, how long does it take you to do a sale for these?

[B]

Two minutes.

[A]

Yeah. Right. So they're not super hard sales. Yeah. And so the sales script is going to be like four questions. It's not a lot. Right. And so it's just like, cool, here's our door, here's our knock, here's our open. And then question one, question two close question overcomes like, that's it. And so I just drill. Honestly, the drilling three or four questions is not going to be tough. Then you're just going to do traditional sales training where you're just going to be like, I have to think about how much you have to check with my spouse, like, oh, I don't have the card that I want on me.

[B]

Yeah.

[A]

And when you're, when you're collecting, do you have a lot of people? Do you have any people who are like, I don't have the card that I want to use on me?

[B]

So we actually don't collect money at the door.

[A]

Why?

[B]

We have a contract that we signed.

[A]

Okay.

[B]

I heard that it was. I don't know, I just heard that it was. You have to have certain permits to collect money at the door. So then I don't have that permit yet.

[A]

But they put a credit card number down, right?

[B]

No.

[A]

What? Okay, we're still getting people. What percentage of people who sign contracts don't end up giving you the card?

[B]

None of them really.

[A]

They are.

[B]

We haven't, I mean, we haven't done the volume we're talking about right now. So I'm sure There would be a ton of people.

[A]

Okay, so you then call them back later.

[B]

I send them an invoice and then if they don't complete it, I'll follow up and.

[A]

And everyone pays. Yeah. What are we doing, Michael? We should be selling. We should be selling trash. What are we doing?

[B]

Well, they need it.

[A]

Yeah.

[B]

I mean.

[A]

Yeah. Well, if it's not a constraint, then I'm not going to mess with it. But I do think you probably tighten the sales process in terms of the training. Yeah. That's absurd what you just said. I don't know. In terms of compliance for that. So check with an attorney. But I'm pretty sure you can just ask someone to buy something.

[B]

Okay.

[A]

Like pretty feel confident. Yeah, but, but, but you know, it hasn't been an issue. And so if you really do collect 100%, it's certainly a less friction, a lower friction sale. But a contract without a payment closet means nothing. So.

[B]

Yeah.

[A]

The fact that you're getting it is great. The fact that you're getting is great. Okay, let's pull up the ads in the funnel real quick. Okay. So yeah, just go, just go follow. So ads. Sorry. Okay, so I think, I think this is fine. I read the copy, I think it checks the boxes. In terms of a normal offer. The video ad that I saw that was your best performer was unsurprising to me that it was the best performer. Bottom link. There you go.

[B]

If you're a homeowner in Centerville, Chantilly, Clifton or Fairfax and you want to save hundreds on your trash collection this year, this is for you. My name is Philip and I'm the owner of Garpi Disposal Services. We're a local family owned and operated business in the Center Hill area and we're here to help take care of your trash. So if you're tired of things like increasing bills every year, crazy prices, unreliable pickups, then we might be the ones for you to help give you some more consistency, ease of mind and stress free trash collection. If that sounds good to you, click the link down below.

[A]

Close.

[B]

We can give you a quote for trash collection in your area so you can start saving money and stop worrying about your trash collection. So cringe.

[A]

No, it's your highest performing ad. The thing is it seemed authentic. Yeah.

[B]

Oh yeah, right.

[A]

And it also hit the core pieces is like this is for so and so. I do think you introduce yourself first rather than talking about them. But okay. Like you can, you can. I would probably make it offer driven first pain. Pain of like. Hey, what you said at the end, like, hey, if you're tired of X, Y and Z, blah blah, blah, I'm so and so. Because it's like leading more with the things that they're interested in. And so basically I would just flip the script on that and then I would record 10 different versions of that with you in different shirts, in different backgrounds, with the truck with a bin behind you, with the neighbor behind you. Like I would just do as many variations of that if I was going to do paid ads. But we're not going to do that because we're doing door to door.

[B]

So cut it off completely.

[A]

I just don't think you need it. I think all of your attention should go to. I need to get 10 guys that are commission only, that are going to.

[B]

Sell this offer and just only focus on that.

[A]

Yeah, yeah, that's it. I mean like, if we only have one thing to be true in order for this business to be profitable, then let's just pick that and then just put all of our effort on that one thing. I mean, fundamentally, it's the idea of leverage. Yeah. It's like find the one thing that gives you the greatest output. It also has no risk on cash flow for you because they're commission only. Yeah. The perfect solution doesn't exist.

[B]

Except when it does.

[A]

That was it ab offer 12 month, 3 month, 20% take the 12, 80% take the main. We're cash flow positive on both. You don't even need to go into debt for the bins. You get 10 guys closing five deals a day. It's 50 deals a day. That's it. Yeah.

[B]

And then.

[A]

And it's way, way easier to close than solar. You can probably get some of those guys, they're just tired. It's like, dude, you're like, it's, it's such a, such a better life to, to just know you're going to close deals every day.

[B]

Yeah.

[A]

Rather than be like knocking doors for five days and closing one or two. Yeah. Like it's a much more, you know, energizing way to live.

[B]

Yeah, no, for sure. I think my next constraint would be then getting the sales guys.

[A]

Yeah, let's talk about that.

[B]

Yeah.

[A]

So right now. So I would say if like you can handle more volume. Right. Do you have to really change anything about your infrastructure to handle the volume that you would be getting from these sales guys?

[B]

I think after a certain point we would need to get another truck.

[A]

Well, we could temporarily deal with that. Yeah. Yeah. So to get to your 3,000, whatever it was, number, how Much can you take? If you were full capacity, how many customers can you. Can you handle?

[B]

I think we could do 3, 500.

[A]

Okay. Yeah, I mean, dude, like 3, 500. We had a thousand more customers to sell.

[B]

Yeah.

[A]

So you gotta sell. I mean, in six months, let's call it five months. That's 200 customers at seven customers a day. I mean, you're. If you get a second guy, he'll be doing that. Right. In six months.

[B]

Could be me.

[A]

Yeah. Could be you. Yeah. All right, so yeah, this can be an issue because, I mean, do you have the cash to get by another truck?

[B]

I think I could figure out a way to get one.

[A]

Okay. Yeah. So the way to do it is I think that you could. Given the nature of this job, I would be looking at running like indeed ads. Slash Craigslist. Yeah, that would just probably be the easiest thing for you to do. And then you just need to work these like it's a lead funnel. Right. And so like, if you're not getting people, so it'd be like, like you have to think about this, like, as a true ad. So a lot of people try to like ward people off. It's like, dude, it's an ad. It's the same thing. It's like you're gonna run an ad, you have to have a headline. It has to be appealing the cop. The body copy has to be interesting, which is like, hey, you can work four hours or eight hours a day. The guys who work eight hours make this. The guys who work four hours do this instead of the other alternatives you have of like, you have to be able to ask four questions to somebody at the door, like break it down to what they're going to have to do. It's like if you can memorize four questions, then you could be able to make a six figure or multi six figure per year income as long as you're willing to be in the street. But then I do damaging admission. It's like, hey, some of it's going to be hot, sometimes it can be cold. That's the trade. But if you're somebody who's like, just barely graduated high school, we don't care about your grades, we care about your work ethic. Yeah. Like, I think that would attract plenty of people.

[B]

Yeah.

[A]

And so it's just add indeed. And those ones already have kind of like applicant funnels that are built into it. And so basically, if we're turning off all these extra things that you're spending all this like fragmented time on, this is all you Do? Yeah. You go get salespeople. Yeah. And honestly, all you need, you need like two guys just to get this going. Yeah, that's it.

[B]

That makes a lot of sense, baby.

[A]

Offer two guys, four questions. That's it. Let's go.

[B]

Yeah. I've been doing indeed ads, but I haven't been structuring it like that.

[A]

No.

[B]

Yeah, exactly. It's been more just like the traditional, like corporate.

[A]

Yeah. But the thing is, you think about who's responding to this.

[B]

Yeah.

[A]

Write it to that, to the salesman.

[B]

Right.

[A]

Because that's who you're trying to attract. Right. Like what are all the things that either hate about your current job or you hate about your current sales job? Both. Those are the pains. What are the. What's the promise? You can make six figures, you know, a year or more and you can work four or eight hours a day. I'll take you on either. So some guys will work, you know, 7 to noon or 7 to 11, and then they go to their other job by noon and they work, you know, 12 to 8 because they're providing for family. So this is a great opportunity for you.

[B]

I'm going to work on that immediately. Yeah.

[A]

All right, so I'll give you the truth about this. So for a job where someone's coming in commission only, my bar is relatively low because I'd rather give more people the opportunity to take a shot and like prove that they have work ethic rather than they have the skill of interviewing, which is a different skill. I basically would just screen for crazies. No, I'm serious. I just screen for crazies. And because if you're going to do this, you're probably going to get a lot of applications. Definitely don't do one on one interviews. You're going to be doing group calls. So bunch of people on two minutes, tell me who you are. Two minutes. Two minutes. Two minutes, whatever. And then invite the ones who seem normal to your, you know, your warehouse or whatever, meet them in person, give job offers on the spot, tell them when they can start. Okay. I just don't think you have to overcomplicate this. And so it's like, cool. What we're going to do is we're going to shadow for a week and then we're gonna break you off in twos and then that's it, like you're good to go. And the thing is serious, like if you wanted to, like this is me talking about how to aggressively scale sales. Like, you need like two guys. So like get on a group Call, talk to a bunch of them. The guy who seems cool and normal and hard working. Invite two or three of those guys out because a bunch of them are gonna, aren't gonna last. Right. Cause it is door to door and there are, there are some risks there. And so like, maybe it's higher five to get one. Okay. Just lower the bar. Like you're not looking for somebody to cure cancer here. You need someone ask four questions and build a photo for.

[B]

Yeah, definitely. Because I mean, like I said me, I'm not like the best salesman in the world, but I can go up there and sell.

[A]

But you think is. You seem trustworthy.

[B]

You think so?

[A]

Yeah.

[B]

Okay.

[A]

So. And you're also the business owner. So it's like, I think that's a big star car.

[B]

Yeah.

[A]

So. But with them though, I think what, the one thing that I'm looking for is hunger. Yeah. And so I think that'll typically skew to either young single guys who are just like really hungry and like go getters, or people who just are about to have like a kid on the way. Like you are. You're more hungry now than you probably were. Right. Because you're like. Because you have to be. Yes. It's like, you know why married, married men with kids make more money than guys who are single without being married and don't have kids because they have to.

[B]

Yeah.

[A]

That's why they make money.

[B]

I mean. Yeah.

[A]

So they literally choose to make more money because they have no other choice.

[B]

Yeah, that's definitely how I feel.

[A]

Yeah. Right. And so you're doing it. So basically, like, I just look for someone's circumstances of like, why do they need this? If someone's like hungry, then I'm. Especially in a job like this. This is so work ethic driven. They're not gonna run out of houses. Yeah, for sure. Right.

[B]

So would you say I should just not do any more door to door and just train the guys?

[A]

Well, I think you, I mean, you're gonna be doing door to door in the training. Okay. Yeah. So your sales isn't gonna go down. You're just gonna have more people so you can duplicate it. Right. Okay. Makes sense. Two birds in stone.

[B]

Yep.

[A]

Basically, as far as I'm concerned, I want you to keep doing door to door. Because if you've got your guy and you've got you, you guys start doing 10, 10 deals a day, just you two, you're at 300amonth you need. In three months, you're at your thousand. Forget everything else in three months, you're 1,000. Yeah, right. But as far as you're concerned, I don't think you should ever do something alone. Okay. So you have the skill set. You should have somebody always watching you so that you're basically, you're getting two birds, one stone, right. You're double dipping on effort. So someone's always with you because you're the lead salesperson and they're learning until eventually somebody else is the best salesperson. You pass out, you know, you step back Homer Simpson style into the bushes and then they, they slide up and then they become lead trainer. And if you want, you say, hey, I'll give you 60 bucks a sale instead of 50 because it's a little harder to have somebody else with you. Right.

[B]

Makes a lot of sense.

[A]

Easy. Yeah. Cool. I feel like this is it. So let's, let's do a quick recap here. Yeah, let's do a quick recap and we'll prioritize it. But it's going to be an easy list. Simple, not easy. How about that? Yeah. All right, so make it blue for you, Michael. All right. I know Michael really wanted the blue. He's like, all right, so the first thing we're going to do is we made the decision to go scatter as our avatar. Alright. So that's decision number one, which we just did instantly, but there we go. Number two is we switched our offer. So we have now an AB offer for three months free. And so offer A is going to be 189 and then 60 per month after that. And then offer B is 360 free bid. That's our deal. Yep. Three indeed. Ads. I'd also hit up your network. You only need a couple right? Indeed. Ads into group call. Or you can just honestly invite them all in person if you want. But sometimes people are really crazy. So the two minute, you know, call in person and then tag along and role playing until your eyes bleed. And the nice thing is that basically documented duplicate is the process that we use. And so the document is like you have the script, they memorize it. While you're walking between doors. You're just like, you're role playing it back and forth. What do you say? What do you say? What do you say? Demonstrate. You do it in front of them. Hey, watch me follow the script. Watch me close deals. Now duplicate. You knock, I'll be here, I'll ride shotgun and I'll watch you do it so you can give immediate feedback. Okay, that's it. And then in terms of, I mean shit, what's the outcome of this? The outcome of all of this is that your cash flow positive and babies have food. Smiley face.

[B]

Yeah.

[A]

Yeah. Feel better. Does this feel clear?

[B]

It does.

[A]

Yeah. That's it.

[B]

Yeah. Give me instructions and I'll go.

[A]

That's it. That's all you have to do. And the nice thing is one and two is instant. Yeah. You literally just have to do this. Right. Go hire five more sales guys. I think this is the play.

[B]

Yeah, I think so, too.

[A]

Doesn't this feel like the noise in the world? Like, quiet?

[B]

I think I was doing way too much.

[A]

Of course you were doing way too much.

[B]

I think I was like you.

[A]

Two different avatars and five different acquisition processes. Yeah. When there's just one, that if we just did this, well, we can solve the cash flow issue and we can hit your extra thousand in the next, like, 90 days. Yeah. It's a quarter. It's nothing. Feel good. Thank you.

[B]

Appreciate it.

[A]

That's what we get through it.

[B]

Yeah.

[A]

So, Philip, I'm rooting for you. If you enjoyed this and you want to see a different business that went from negative to positive in one conversation, check out this conversation with Alexiomar. He's a legal person who does legal things for musicians so that they can get contracts and incorporate it and whatever musicians do to make money.