Business Scaling Workshop Live Q&A | Ep 827

Summary

Podcast Summary: The Game with Alex Hormozi - Business Scaling Workshop Live Q&A | Ep 827

Release Date: January 17, 2025

In Episode 827 of "The Game with Alex Hormozi," host Alex Hormozi engages in a dynamic live Q&A session, addressing real-time challenges faced by entrepreneurs striving to scale their businesses. The episode features multiple callers from diverse industries, each seeking actionable insights to overcome obstacles and achieve substantial growth. Below is a comprehensive summary capturing the essence of each discussion, complete with notable quotes and timestamps.

---

1. Rick's Financial Planning Services Scaling Challenge

Timestamp: [00:01 - 05:54]

Caller: Rick
Business: Financial Planning Services for Young Big Tech Employees
Current Revenue: ~$500K
Goal: $5 Million within three years

Challenge:
Rick is grappling with time resource management as he attempts to scale his financial planning business. With only two sales per month, the primary bottleneck lies in customer acquisition. He's implemented a novel pricing model—charging a reduced 25 basis point AUM fee along with a monthly subscription of $275, aiming for an annual net of approximately $5,000 per client.

Alex’s Insights:

• Acquisition Over Fulfillment:
  “I think the biggest issue is probably just acquisition. So getting two sales a month is probably the big bottleneck.” ([01:25])

• Lead Generation Strategy:
  Alex emphasizes the importance of enhancing lead flow by shifting the lead magnet to workshops—either virtual or in-person—to build trust more effectively. He suggests that such a pivot could potentially multiply sales from two to ten per month.
  “Sometimes... an easy 5x, it's usually something at the very front where it's just like we just swap the lead magnet from hey, book a call to hey, get this thing.” ([02:13])

• Pricing Model Adjustment:
  Highlighting the need to reassess the service delivery versus pricing, Alex points out that Rick might be undercharging relative to the efforts required for monthly meetings. He recommends a more traditional wealth management pricing structure to better align revenue with service intensity.
  “I think you're under, undercharging and over, not over delivering, but doing too much.” ([03:19])

Conclusion:
Rick is advised to focus on boosting customer acquisition through strategic lead generation while reevaluating his pricing and service delivery to ensure profitability aligns with business growth goals.

---

2. Luke Devens' Home Services Business Expansion

Timestamp: [06:04 - 25:02]

Caller: Luke Devens
Business: Pressure Washing and Gutter Cleaning Services
Current Revenue: $810K
Goal: $1.5 Million next year, $3 Million thereafter

Challenge:
Luke aims to scale his home services business by transitioning to a subscription model. His main obstacles include effective resource allocation across marketing channels and managing the increasing workload, as he currently handles much of the operations himself.

Alex’s Insights:

• Maximizing Current Marketing Efforts:
  “What stops you from doing 10 times more of that?” ([06:44])
  Alex questions whether Luke is fully leveraging existing marketing channels, suggesting that expanding door hangers and yard signs could significantly boost lead generation without adding complexity.

• Hiring and Delegation:
  Recognizing Luke's constraint with personal time, Alex advises hiring additional sales personnel to scale operations.
  “If you replace what you were doing, you will find something else to do.” ([23:34])

• Streamlining Marketing Efforts:
  Alex recommends maintaining simplicity in marketing strategies to avoid overcomplicating resource allocation. He suggests focusing on the most effective channels and gradually introducing new methods as the business scales.
  “I would rather do more of that thing rather than be like, oh, on top of that...” ([08:33])

• Sustainable Growth Strategy:
  Emphasizing the importance of maintaining a balance between managing current operations and expanding, Alex encourages Luke to stack subscriptions to enhance cash flow, facilitating the hiring of an account manager to oversee client relationships.
  “Most relationship guys can handle many, many, many customers.” ([03:19])

Conclusion:
Luke is encouraged to intensify his current marketing efforts, delegate operational tasks through strategic hiring, and maintain a straightforward marketing approach to efficiently scale his business.

---

3. Carter Cofield's Tax and Financial Services Scaling Dilemma

Timestamp: [09:38 - 12:37]

Caller: Carter Cofield
Business: Tax and Financial Services for High-Income Entrepreneurs
Current Revenue: $9 Million
Goal: $25 Million by End of Year

Challenge:
Carter identifies people as his primary constraint, needing more advisors and a faster onboarding process to conduct scalable five-day virtual events. He also grapples with balancing the focus across different company departments without harming team morale.

Alex’s Insights:

• Single-Constraint Focus:
  “If we solve that constraint, the business will grow.” ([10:15])
  Alex advocates for identifying and addressing one primary constraint at a time rather than attempting to tackle multiple issues simultaneously, which can dilute resources and slow progress.

• Prioritization and Team Alignment:
  Drawing inspiration from Jack Sklootman's philosophy, Alex emphasizes the importance of having a single, clear objective that the entire team prioritizes, fostering unity and urgency towards solving the most critical constraint.
  “If you can't get clear that one thing is more important than everything, then that's your fault as an entrepreneur.” ([10:15])

Conclusion:
Carter is advised to concentrate on resolving the most pressing constraint—whether it's hiring more advisors or streamlining onboarding—by aligning the entire team behind a single, prioritized objective to drive substantial business growth.

---

4. Ashley Stahl's Agency Growth and Guarantee Concerns

Timestamp: [12:37 - 15:08]

Caller: Ashley Stahl
Business: Wise Whisperer (TED Talk Booking Agency)
Current Revenue: $1.3 Million
Goal: $10 Million Next Year

Challenge:
Ashley seeks to expand her TED talk booking agency but is hesitant to offer guarantees due to inconsistencies experienced during the COVID pandemic. She fears committing to a 100% success rate might be risky given the uncertain booking timelines.

Alex’s Insights:

• Mathematical Approach to Guarantees:
  Alex shares a relatable story about a home services business owner to illustrate how guarantees, when structured mathematically, can enhance sales without jeopardizing profitability.
  “It's just look at the math.” ([13:34])

• Leveraging Guarantees as a Selling Point:
  By tying the guarantee to a measurable outcome, Ashley can mitigate risks while making the offer attractive to potential clients. For instance, offering a money-back guarantee based on specific performance metrics can balance the promise with achievable standards.
  “If you don't deliver on time, you're going to give the client the entirety of your profit.” ([13:34])

Conclusion:
Ashley is encouraged to incorporate mathematically structured guarantees to bolster client trust and increase sales, while safeguarding her business's financial viability.

---

5. Nick Page's Fitness Studio Ambitions

Timestamp: [15:08 - 25:00]

Caller: Nick Page
Business: Fitness Studio
Current Revenue: $1 Million
Goal: $50 Million

Challenge:
Nick expresses his desire to scale his fitness studio to $50 million but is uncertain about the feasibility due to market saturation and personal beliefs about the industry's future. He's contemplating whether to continue scaling or consider selling the business.

Alex’s Insights:

• Assessing Scalability and Market Potential:
  “The likelihood that you get it there from a large group studio is very low.” ([16:28])
  Alex advises Nick to evaluate the scalability of his current business model, suggesting that reaching $50 million may require diversifying or adopting a different vehicle.

• Strategic Business Transformation:
  Alex presents two pathways:

  1. Adjacent Path: Transitioning to a small group fitness model, which he believes offers exceptional returns and operational simplicity.
     “The best fitness model right now is a small group.” ([17:00])
  2. New Ventures: Exploring entirely new business models or opportunities beyond the existing fitness studio framework.

• Focus and Execution:
  Emphasizing the necessity of concentrated effort, Alex urges Nick to prioritize executing a single, well-defined strategy rather than spreading resources thin across multiple initiatives.
  “What matters more? The win. So get the win.” ([24:02])

Conclusion:
Nick is encouraged to either pivot his business model towards more scalable formats like small group fitness or explore new ventures altogether, maintaining unwavering focus on executing his chosen path to achieve substantial growth.

---

6. Bri's Residential Construction Business Scaling and Niching Down

Timestamp: [25:02 - 28:55]

Caller: Bri
Business: Residential Construction for Middle-Aged Women
Current Revenue: $100K
Goal: $3 Million in Two Years

Challenge:
Bri is considering whether to scale by maintaining broader construction services or to niche down specifically to bathroom renovations, aiming to enhance profitability and operational efficiency.

Alex’s Insights:

• Advantages of Niching Down:
  “You like it? So it's high margin.” ([25:49])
  Alex supports Niching Down to bathrooms, highlighting benefits such as higher margins, faster turnaround times, and easier sales processes.

• Operational Efficiency:
  By focusing on a specific service, Bri can streamline operations, improve advertising responsiveness, and increase the volume of projects without overextending resources.
  “You can sell way more of them, because then the transaction, the deal cycle shorter.” ([27:04])

• Gradual Transition Strategy:
  Alex advises maintaining some capacity for larger projects initially while steadily increasing focus on bathroom renovations. This approach ensures steady revenue flow while transitioning to a more specialized service offering.
  “If you can make a lot more money... then focus there.” ([27:38])

Conclusion:
Bri is advised to niche down to bathroom renovations, leveraging higher margins and operational efficiencies to scale her construction business effectively while gradually phasing out broader services.

---

7. Kevin's Asset Protection Planning Business Growth Obstacles

Timestamp: [28:55 - 31:30]

Caller: Kevin
Business: Asset Protection Planners
Current Revenue: $11 Million
Goal: $25 Million

Challenge:
Kevin faces skyrocketing pay-per-click (PPC) advertising costs that are eroding profits and struggles to find sales professionals adept at selling and understanding complex legal concepts.

Alex’s Insights:

• Diversifying Lead Generation:
  “I would probably go social ads to workshop virtual or in person and then sell from there into your stuff.” ([30:39])
  Alex recommends expanding beyond PPC by incorporating interruption-based ads and hosting workshops (virtual or in-person) to generate high-quality leads.

• Enhanced Marketing Strategies:
  He suggests pivoting towards top-of-funnel strategies that target a broader audience, particularly those not actively involved in lawsuits, to increase lead volume and diversify client acquisition channels.
  “Run social ads to workshop virtual or in person.” ([30:39])

• Optimizing Sales Processes:
  By streamlining the lead generation and sales process through workshops, Kevin can effectively educate potential clients and improve conversion rates, thereby reducing dependence on costly PPC channels.
  “Expect 20 call it and then from there you'll close a third of the room.” ([30:40])

Conclusion:
Kevin is advised to diversify his lead generation strategies by integrating social media advertising and workshops, thereby reducing reliance on expensive PPC campaigns and enhancing overall profitability.

---

8. Josh Hadley's Amazon E-Commerce Scaling Strategy

Timestamp: [25:00 - 24:02]

Caller: Josh Hadley
Business: Amazon E-Commerce (Stationery Products)
Current Revenue: $12.5 Million
Goal: $50 Million, $100 Million

Challenge:
Josh aims to scale his Amazon-based stationary business amidst diminishing profit margins due to increasing platform fees and heightened competition. He explores expanding into TikTok Shop and Shopify while managing a vast inventory of 1,600 SKUs.

Alex’s Insights:

• Expanding Sales Channels:
  “What matters more? The win. So get the win.” ([24:02])
  Alex underscores the importance of focusing on proven strategies that drive the most significant growth, advising Josh to prioritize expanding successful channels like TikTok Shop and Shopify before exploring new avenues.

• Delegation and Hiring:
  Recognizing Josh’s hesitation to delegate marketing tasks, Alex encourages hiring a dedicated director of marketing to manage TikTok and Shopify operations, ensuring Josh can concentrate on overarching business growth.
  “If you replace what you were doing, you will find something else to do.” ([23:34])

• Maintaining Core Operations:
  Alex advises against overcomplicating the business with multiple initiatives simultaneously. Instead, he recommends consolidating efforts on high-impact channels and scaling operations through strategic hiring and resource allocation.
  “Don’t be afraid to pay him a lot.” ([24:56])

Conclusion:
Josh is encouraged to expand his marketing efforts into TikTok Shop and Shopify by hiring a specialized director of marketing, thereby allowing him to maintain focus on high-impact growth strategies while ensuring operational efficiency.

---

Key Takeaways and Closing Insights

Throughout the episode, Alex Hormozi reiterates several core principles essential for scaling businesses effectively:

1. Identify and Address Primary Constraints:
   Focus on resolving the most significant bottleneck that impedes growth before tackling other challenges.

2. Prioritize and Simplify:
   Streamline operations and marketing efforts to concentrate on what drives the most value, avoiding unnecessary complexity.

3. Leverage Strategic Hiring:
   Delegate tasks and hire specialized personnel to manage expanding operations, allowing business owners to focus on growth-driving activities.

4. Adapt Pricing Models Appropriately:
   Ensure that pricing structures align with service delivery to maintain profitability as the business scales.

5. Niche Down for Efficiency and Profitability:
   Specializing in specific service areas can enhance operational efficiency, increase margins, and simplify marketing efforts.

6. Diversify Lead Generation Channels:
   Expand beyond traditional methods to include diverse marketing and sales strategies that cater to a broader audience.

7. Execute with Focus:
   Maintain unwavering focus on executing chosen strategies effectively, avoiding the pitfalls of spreading resources too thin.

Alex concludes the session by offering listeners a complimentary "Scaling Roadmap," a comprehensive guide breaking down scaling into ten stages across eight business functions. Entrepreneurs are encouraged to utilize this resource to personalize their growth strategies effectively.

“What matters more? The win. So get the win.” ([24:02])

---

This episode serves as a valuable resource for entrepreneurs navigating the complexities of scaling their businesses, providing actionable strategies and insightful guidance tailored to diverse industries and challenges.

Transcript

[Rick]

Hey Alex. Hello, my name is Rick and I sell financial planning services to young big tech employees. W2 employees. We do about half a million in revenue. I'd love to be at 5 million within the next three years or so. And what's currently stopping me is just a time resource management issue where I'm currently doing the fulfillment of meeting with our clients. And I hired a new full time associate planner to start to take over those relationships. And so I think my current constraint is figuring out how to replicate teams as I continue to grow the business. We're doing relatively we're just doing organic marketing content mostly on LinkedIn and write a daily blog which I post to the website and an email list, a small email list.

[Alex]

How many sales a month did you do?

[Rick]

About two.

[Alex]

Two sales a month. And is the model like 1% assets under management?

[Rick]

No. And that was another question that I wanted to get your thoughts on was one of the big swings that I took about four or five years ago is to change the traditional financial planning model. So instead of charging the 1% AUM fee, we charge a 25 basis point AUM fee and then a monthly subscription which is 275. So it nets out to be about 5,000 per client per year on an annual basis.

[Alex]

Okay.

[Rick]

And then obviously bigger clients pay more.

[Alex]

You know, on the aum. Interesting. Okay, got it. Okay. So typically with your type of business, they're usually demand constrained, not supply constrained. Like managing lots of people and lots of money usually doesn't actually take too many resources relative to how much they make you. And so I think that the biggest issue is probably just acquisition. So getting two sales a month is probably the big bottleneck. And so I would. So what's the big incentive for someone to get on the phone with you?

[Rick]

You mean what's in it for them? Like why do they contact us initially is to get their financial house in order. We do a lot around getting people's financial independence like by age 50.

[Alex]

Yeah.

[Rick]

So we're retire for.

[Alex]

With a million dollars.

[Rick]

Yeah. Fire movement, you know, real well.

[Alex]

Yeah. So you know, as much as you may hate what I'm about to say, there's a reason that all the big do the same exact playbook, which is they run to either virtual or they run to in person workshops. Because in one or two days or even a half day, you can gain a lot more trust than a very long time online. And I would probably use that as my lead magnet because sometimes for a lot of you guys, one of the biggest levers you can have. When we unlock an easy 5x, it's usually something at the very front where it's just like we just swap the lead magnet from hey, book a call to hey, get this thing. And then a call just happens to be part of it or a workshop happens to be the vehicle for delivering that outcome. And when we do that, that's when all of a sudden your lead flow goes from making two sales a month to eight or 10. And I think that for me that would be the biggest issue. Now you managing customers, it's like, I think you just need more cash flow which more customers will help you with. And then you can get an account manager who can kind of like run those relationships. But most relationship guys can handle many, many, many customers because people don't. I mean also the higher up you go, they tend to, in my experience, actually need less.

[Rick]

Yeah, that is true. We meet with people on a monthly basis, so we're.

[Alex]

Is that required?

[Rick]

It is, it's sort of like our sort of bread and butter. So we do a lot of accountability, a lot of like coaching.

[Alex]

A lot of like, is that for them to like save more money and stuff?

[Rick]

Save more money, save on taxes, tax projections, manage their.

[Alex]

I think you're under, undercharging and over, not over delivering, but doing too much. Yeah, like meeting every month. That's almost like personal finance coaching more than like wealth management because I feel like those are two different offers. So it's like there's the Dave Ramsey of like, hey, stop spending money, silly pants. And then there's the like, once I have money, what do I do with it? And I feel like you're kind of blending those, but you're not, but you're, but you're doing both services and pricing like one but like lower. So I think expand on that. Basically you're not making enough money per customer to do the work you're doing.

[Rick]

Okay. Okay.

[Alex]

Like 12 meetings a year is a lot. Most of the wealth management firms that like come through here, one maybe quarterly at most. Right. And so like you're doing 12 times the work and billing less. So unless you had a tech enabled way of making that the model, I would change the pricing. Okay.

[Rick]

Okay.

[Alex]

Because fundamentally like you're either the volume player and you have tech built in since day one and the entire model is around cost efficiency or your premium. There's really not a lot of room in between. Like best for least like people. It's a hard time for people to perceive that value. So I just think you're Doing way too much.

[Rick]

Can I see this? One of the reasons why I designed it that way was so that we could fish further upstream than most financial planning firms. So we start to work with people in their early 30s, right, where they're making, you know, a few hundred grand a year, and then, you know, a lot of those relationships that blossom into people, you know, doing big things at Meta, you know, making 5 million a year.

[Alex]

Right.

[Rick]

Do you think that's a smart player?

[Alex]

Is that, you know, I don't think it's too much. I don't think it's. I don't think it's. It's dumb. I think you have a. You have, you have, you have two elements. You have a personal finance thing and you have an investing thing, and you're getting the people who are younger with the personal finance thing, and they're still not. They don't have enough assets to make their aum, like, really worth it. Right, right. And so, like, I would probably have a more traditional private wealth management model. And if you just find out that you can acquire customers really easily on personal finance much more easily than you can here, but then the ascension is much higher, then, like, that's a great model. Like, I think that's a really interesting play, but I think trying to combine both of them in terms of both the delivery and the pricing, I think that's where it feels off to me.

[Rick]

Okay. All right.

[Alex]

Interesting. All right, so I just blew your shit up, so I apologize. We have a whole year, so you're good. Go for it.

[Luke Devens]

How you doing? My name is Luke Devens. I sell pressure washing gutter cleaning to homeowners. I did 810,000 last year. This coming year I want to do 1 5, then the following three. So we're kind of. Throughout this, we switched to the subscription model. That's what everyone's been suggesting. So how do. Now I get into neighborhoods or allocate resources because a lot of people are saying just do one channel. But then we do a lot of, like, door hangers, yard signs, and I feel like that all kind of like goes into one with, like, ads. Like, how would you kind of rush neighborhoods and home service?

[Alex]

So can you, can you, can you restate the question?

[Luke Devens]

Yeah, like, how would, how would you spend your marketing money? If you want to get as many on this yearly subscription currently, how are you acquiring customers? Just old school yard signs, door hangers, referrals, stuff like that.

[Alex]

What stops you from doing 10 times more of that?

[Luke Devens]

Probably just people.

[Alex]

Okay, so then people.

[Luke Devens]

I do A lot of it myself.

[Alex]

Okay, got it. So then, so what's the return? What's the. Do you know what your LTV to CAC is on?

[Luke Devens]

I guess it's 10.

[Alex]

It's 10. And that's with your time being free. Yeah. Okay, so if you paid someone full time to do that, do you know how much that would impact your roas?

[Luke Devens]

Someone would probably be about 50, 60 grand. Like a sales guy.

[Alex]

Okay, so wait, are you, you're knocking on doors and getting the business? Yeah, got it. And then the truck follows you and then like does the work or whatever. Got it. So I think in the beginning you'll have to keep stacking the subscriptions so that you can generate the cash flow because then you'll have the basically the for sure business. And then once that starts stacking, then you'll have the cash flow to hire the other sales guy who's going to be able to take over your role. Thing is, most door to door guys need to make like decent money because it's terrible. And so like you'll probably need to be like, they'll probably need to make like, I mean, a decent, I mean, how many sales a day can you make?

[Luke Devens]

Anywhere from like 8 to 10.

[Alex]

Okay. Okay. Yeah. So I think, I mean one of those guys could easily, if you can pay them, shoot 50, 100 bucks a sale, they can make 1,000 bucks a day. I think you'd be able to get somebody to be able to do that.

[Luke Devens]

Would you like sprinkle in some type of Facebook or Instagram or Google?

[Alex]

I just don't want to add complexity because right now you have limited resources. And so I'd rather just do more of that thing rather than be like, oh, on top of that, now I have to start calling leads and have to create a whole the online world and then working those leads is a whole different monster versus you're right here, you say, yes, I call truck, we clean shit. I get money. Like, yeah, it's good business. Right? Just keep it easy. Yeah, I would rather you keep it easy long term. Like once you have, if you ever like, hey, I've got, you know, 15 trucks for the city or whatever and I've got 15 teams that are out doing it. Then I'd be like, yeah, I think having a canvassed top of funnel kind of awareness stuff that generates leads in a centralized phone team that can then also proactively send trucks out to people that you already sold over the phone, I think that makes sense. But given the fact you already know the Script, you already know the process. I'd rather you just stack some of the recurring so you have the cash to bring the new guy in. That being said, if you get a little bit more generous on the commissions, you could probably get someone to pay work commission only so then you wouldn't have to take the risk on. Okay, so I revised my original answer. Do that. Thank you. Yes, sir.

[Carter Cofield]

How you doing? Carter Cofield. We sell tax and financial services to high income entrepreneurs. We do about $9 million in revenue. Like to be at 25 million by end of this year. What's stopping us? So I know the constraint is people. We need more advisors to service our clients. We need a faster onboarding process to do more five day virtual events. I don't think it takes the whole company to fix that constraint. I think it's HR, CSM's operations. Is it okay to have the rest of the company focus on a different constraint or would that like kill team morale? Or how do you balance constraints across fixing trace costs departments?

[Alex]

That's a really good question. I've gone back and forth on this, so maybe there isn't a right answer, but I would say that in the season that I'm currently in, I believe that there is one constraint and if we solve that constraint, the business will grow. And so I want everybody to know that this is what we're working on. And what ends up happening is that you see the other fires that are burning and then that actually creates more urgency to fix the first one. When you try and fix them in parallel, it ends up taking longer to do both than to do one and then the other. Because the whole team knows it's like, but there's this other fire burning. You're like, right, then fix the fucking first one. And so then it just orients the whole team, right? And then also that means that like if something has to happen, the whole team is greasing the, you know, the tracks to make sure that this objective gets pushed forward. Even because there's so many supporting and ancillary things to get some big thing done that if they're like, well, we have our priority, I think that's what gets in the way.

[Carter Cofield]

Yes, well, sales has this priority, but operations, this is not a priority for us right now.

[Alex]

So we call it the silent six, which is basically like every business has their priorities for the year or whatever. The silent six one is that we have to keep selling, we have to keep doing business. Right? So those things always have to continue. But what is the one thing that Matters most. I think it's Jack Sklootman. He has a good book on this, but I'll give you the TL doctor of the book is that he was a big believer or is a big believer in not having three objectives or five objectives, but just one. He said basically, if you can't get clear that one thing is more important than everything, then that's your fault as an entrepreneur. And so I see, like, if we're the chief allocators of resources, then it means we have to be able to prioritize. And if we can't do it, how can we expect our teams to? Which means we have to be able to say this is more important than that. And yes, they are both important, but this one is more important. And I think that that kind of betting perspective has served me really well. Being very violent with, like, this is the most important. And I've just noticed that things get done way faster because then it's like, hey, when we do this, then we can do this next thing. And then everybody wants to do the next thing too. And then when we do the next thing, all we move, we, you know, we part the Cs to get that done. I like that. Thank you. Yeah, it also in service of what I was talking about earlier, when you have that perspective, it also minimizes all the other changes that you're making across the company too, because you're like, that's not a priority. Could we improve this thing? Probably. Do we need to right now? No, it's not the constraint. Yes, ma'am.

[Ashley Stahl]

Hi.

[Alex]

Hello.

[Ashley Stahl]

I'm Ashley Stahl. My agency is Wise Whisper and Wise Whisperer. Wise Whisperer. We write and we book TED talks for people, specifically entrepreneurs. We talked yesterday. We did 1.3 last year and we actually think and want to do 10 next year just because of ads and the infrastructure we've built.

[Alex]

Okay.

[Ashley Stahl]

And it seems actually quite feasible just based on it. But I was talking a lot to Jacob about closing and getting good closers. That's stopping me. But beneath that, I started thinking about the contract and everybody wants to feel like we're guaranteeing them their TED Talk and we have 100% success. But because we existed during COVID and our average time to book went from 10 months to 20 months to get somebody their talk. I feel scared to offer a guarantee when I'm not ted. And so I just want to show my track record.

[Alex]

Are they TED or tedx's?

[Ashley Stahl]

Tedx.

[Alex]

Okay, got it.

[Ashley Stahl]

Yeah. So any insight on guarantees?

[Alex]

Yeah, this is a math Problem?

[Ashley Stahl]

Yeah.

[Alex]

So I'll tell you a story that applied to a home services business not that long ago. So he was really scared to raise prices, but he wasn't making any money, and he was closing 80%. So I was like, hey, man, please raise prices. And so he decided to raise prices. But to get him to raise prices, I said, so here's the deal. How many times. I said, what are the biggest concerns of a customer? He said, well, it's, you know, on time and on budget. I was like, all right, how many times are you on time and on budget? He said, 8 out of 10. I said, what happens the other two times? He said, one time, they'll change what the requirements are. They'll say they actually want their kitchen to be twice as big or whatever. I said, okay. He said, the other time, I won't get materials in time, and I can't control that. I said, all right, so what if we write the guarantee? So it's. You're going to raise your price by 20%, which is what we did and said. And if you don't deliver on time, you're going to give the client the entirety of your profit, which right now is. You make no money anyways. So, like, we can say that. So it's like, if I don't deliver on time and on budget, I will give you all my profit, which is 20% of this deal off. So that's why. So that's the guarantee. And by switching to that, he closed way more people and made way more money. And so the fear around guarantee, I think, is justified. But if you just look at the math and you're like, oh, I can close twice as many people and I have to give 1 out of 10 back. You made way more money. So I think just do the math on it.

[Ashley Stahl]

Yeah. I think it's just fear. Like, fear of being on the hook if there's, like, another pandemic. And I have, like, 400 TED talks breathing. Yeah.

[Alex]

Well, you already went through a pandemic, so you already know what you do.

[Ashley Stahl]

Yeah. And with your gym numbers, I have no excuse. Okay. Thank you so much.

[Alex]

Too bad. You're good.

[Nick Page]

Hello, Alex?

[Alex]

Yeah.

[Nick Page]

My name's Nick Page, so. I own a fitness studio.

[Alex]

Cool.

[Nick Page]

We just surpassed a million in revenue. Congrats and thank you.

[Alex]

Personal training or semis or group?

[Nick Page]

Okay, so I'm being honest. I would like to be at 50 million. So, honestly, what I think stopped me is looking at my business, just 49 more gyms.

[Alex]

Yeah, exactly.

[Nick Page]

So. And I honestly don't this is like something that I don't know if it's a belief. Right?

[Alex]

Yeah.

[Nick Page]

Looking at my business as an investor, my LTV to CAC is, I mean, 2 to 1. I mean, we can get it to 3 to 1. Looking at the market and realizing that the fitness studio space is becoming a.

[Alex]

Red market, it's very tough.

[Nick Page]

I don't know if I personally think it's a smart investment in my time to try to continue to grow my gym. We're profitable, I have a great team, and I'm like, maybe I'll just sell it in one to two years. And then I'm like. So like, I just read the book how to how to how to Make a Couple Billion by Brad Jacobs, and he talks about getting, you know, ahead of the trend, which I think you've done a great job of. So when I, like, read that, think like an investor and then I look.

[Alex]

At my business, I'm just like, this ain't it.

[Nick Page]

Yeah. We're kind of at this point where I'm like. And people are like, this is great. Why don't you scale? I'm like, you don't fucking understand it.

[Alex]

So I get it. So I guess he's like, this sucks. Everything's great.

[Nick Page]

But it's like demon side.

[Alex]

No.

[Nick Page]

So, I mean, what do you think I should do? Like, if you were me, like, if.

[Alex]

You want to make $50 million, the likelihood that you get it there from a large group studio is very low. So if that's the goal, then you probably want to have a different vehicle. And so I would say that if I was in your position, you have one of two paths. There's like a really close adjacent path which would be like, I do believe that the best fitness model right now is a small group. I think it's the best model that's on the market right now. And so you could change your existing model to that. And that one gets exceptional returns on capital and is a very operationally easy model to run. Yeah. And so that would be like. The reason I kind of like that for you is because it already borrows from a huge amount of your existing skill set and knowledge base, and that is a good vehicle. So that's option one. Option two is you just try something brand new, which I have very little insight into. What of the unlimited opportunities could you pursue all of them or one of them, but transforming what you have into. I mean, I fundamentally, I think that's why you're here. Or at least I would be if I were you is like, how do I make this? How do I turn the thing that I have into the thing that I want? And I think that you can do it with a lot fewer steps than you expect. You'll probably have, you know, six months where there's a little bit of turbulence of, like, people being upset because you change the rules of the game on them. But unless the facility that you have right now, like, precludes you in some way from delivering that other model, I would say that that's probably a very. The lowest risk, highest likelihood path.

[Nick Page]

Yeah.

[Ashley Stahl]

Okay.

[Nick Page]

Yeah. Because my head just goes everywhere and like. Yeah, Another.

[Alex]

Let me. Let me give you something. This is the first year in my entire life where I haven't had fomo. I haven't had it, and it's really weird. And I noticed. I noticed that I didn't have it only at the end of the year. And I was like, oh, wow, that's weird. And I think it's because I finally realized how fucking hard it is to do anything. And when I see someone who's, like, crushing it, like, a friend of mine made 50 million in crypto this year, and it's not his main business. It's a side hustle. And I was just like, okay, noted. And so then I thought to myself, I was just like, good for him. I was like, I'm not gonna get into it. That's not my game. You know what I mean? But he's like, dude, the school deal's fucking monster. And I was like, I know, it's awesome, but that's the game. I know. You know what I mean? And so it's not even the comparisons of the Thief of Joy thing. I think it's just that learning to play a game really well takes a really long time. And accepting that one of the saddest things about life for me has been that I'm only going to have maybe three or four more entrepreneurial seasons in me. And that's really sad because it means I only have three or four more big swings. And it's like, shoot, I have all of these things that I want to do in my life, but I only get to pick three or four more. Maybe. Maybe, right? And so I think that just getting comfortable with the idea, like, there will always be people who make more. And even if you are Paul Getty and become the richest man in the world, everyone will forget anyways. And so just context, right, that there's nothing wrong with having six months where you reconfigure what you're Doing to then say, this is what I'm going to do for the next five or 10 and then you're set for life and then you can do whatever you want. Thanks. You bet.

[Josh Hadley]

How you doing, Alex? My name is Josh Hadley. We sell on Amazon E Commerce. We talked last night. Primarily stationary products. So calendars, planners, educational posters. We did 12.5 million last year. Like to be at 50 million and even get to 100 million, that's kind of the trajectory. I look at the. You know what, your preamble earlier, right. Go to the increase your number of customers, do more of what's been working for you. And I have a podcast in the e commerce space, ideally want to be like you when I grow up, but in the e commerce space, I want.

[Alex]

To be like you. So we're all good.

[Josh Hadley]

But with that being said, our number one priority for growth has always been find more products opportunities on Amazon, launch those products. Right. That's been our biggest growth lever. All.

[Alex]

How many SKUs do you have?

[Josh Hadley]

1600. So we've got a lot. It's all stationary. My wife designs it.

[Alex]

All right, all stationary.

[Josh Hadley]

All stationary.

[Alex]

I'm sure I bought something from you probably own that whole category. Okay. Yeah, keep going.

[Josh Hadley]

So we've looked at, you know, and Amazon's a cruel mistress in terms of decreasing profit margins. Right. They're increasing fees and I see like the net over the next decade, you look at Amazon, you're going to be happy with single digit profit margins. It just becomes so competitive.

[Alex]

Mm.

[Josh Hadley]

So with that being said, we've got onto TikTok shop. Right. We've had some success there, took 10% of our sales this year already. We've then taken the viral video, the videos that go viral on TikTok, we run meta ads on them and we've finally cracked Shopify for the first time.

[Alex]

All right.

[Josh Hadley]

We've got a five row as on that. Right. So we're doing that. I also look at wholesale. We briefly mentioned distribution in our conversation yesterday. So as I look at like our number one priority for growth has always been do more of what's worked, which is then launch products to serve whatever crap people are looking for on Amazon.

[Alex]

Yeah.

[Josh Hadley]

But I also have these things that are boiling up that I'm like, man, I think this can really help things. TikTok actually is supporting all of our Amazon increasing organic rankings. Of course people will search by and buy it. Right?

[Alex]

Yeah.

[Josh Hadley]

So how do I communicate that to the team? Because it's like we still got to keep doing.

[Alex]

Yeah. So that's the silent six. That's the silent six. Right. So like we're going to continue to make the sausage. We're going to continue to do the proven winning strategy. And that's kind of the core. That's the base. We're not going to threaten the base to try and pursue the new thing. But if you do see one of those writing on the wall type situations where you're like, my margins are going to compress, et cetera, et cetera, then it makes sense to make your one big bet of the year. Let's say it's TikTok. And I mean to be fair, it's not that much more work to just take the same ads and then run them on Shopify and then that becomes the objective of the year, which I would probably just put into Owned. You know, Owned customer list is probably how I just categorize that for the team. I feel like that's it. So what was the actual question?

[Josh Hadley]

Yeah, I mean that. So you talked about that being like, hey, this is the one thing we're doing right because we've got 25 team members already. They're all serving that one thing which is finding, launching new products.

[Alex]

It can be you and a Scott.

[Josh Hadley]

It's on a small other team.

[Alex]

Yeah.

[Josh Hadley]

My follow up question to this has been because I was talking earlier about go hire a director of marketing that can go run this whole TikTok side. All of the Shopify stuff that we want to do. I've been doing a lot of it myself and almost my reluctance to go hire somebody is like, well then what else do I do in the business? You know what I mean?

[Alex]

I'll make you a promise that I don't make promises often. I promise that if you replace what you were doing, you will find something else to do.

[Josh Hadley]

Well, I know that. Well, then I will double down on that because I've got this other E Commerce thing. Ideally a decade from now. I've got to win and I can go do this exact same thing you're doing. But the E Commerce space, right?

[Alex]

Yeah.

[Josh Hadley]

To me I'm always like, oh, go do more speaking on stages. Go start building my own personal brand. It's kind of what I like.

[Alex]

That wouldn't be my priority, I think. Get the win because say it differently, take it to the natural, logical extreme. So you do lots of stage stuff and then the main business suffers and then you don't get the W, then you're just an airbag. On the flip side, you don't do any speaking and you get the win. All those doors open tenfold. And so what matters more? The win. So get the win.

[Josh Hadley]

Easy enough.

[Alex]

I do think that with your audience that you have, you'd be able to very easily headhunt a really savage director of marketing who's already done e commerce for TikTok shop or Shopify. And I'd probably do it on your podcast. I'd be like, hey, I'm looking for a savage. Like, read Ernest Shackleton's ad looking for men. Low chance of survival. Just like, this is a dangerous place to work. And I think you will attract the right people. Cool.

[Josh Hadley]

Awesome.

[Alex]

And don't be afraid to pay him a lot. Okay?

[Josh Hadley]

Thank you.

[Alex]

Yes, ma'am.

[Bri]

Hey, I'm Bri. I'm from Tennessee. My sister's over there.

[Alex]

Hi, Bri. Sister.

[Bri]

We sell residential construction to middle aged women who like to spend their husband's money.

[Alex]

Love it. You got to know your avatar.

[Bri]

Yeah. We've done 100k in revenue in one year. We would like to get to 3 million, ideally in two years. I think it's pretty realistic and easy in construction. And I think what's stopping us is scaling and potentially niching down. So after these workshops, that's what we feel like is the right thing and we wanted to get your feedback on potentially niching down to bathrooms. There's a two week turnaround and it's a pretty standard.

[Alex]

I can already tell you I like it.

[Bri]

You do?

[Alex]

You like it? So it's high margin.

[Ashley Stahl]

Yeah.

[Bri]

42%.

[Alex]

Yeah. And it's fast. Two weeks, it's easy to sell it.

[Bri]

A little bit lower.

[Alex]

Yeah, no, I like. So with a lot of. It's interesting because like in like app development or software shops, it's actually really. It's just digital construction versus like physical world construction. But they have the same issues. I want to get into it, but yeah, they have the same issues. And so in almost all of those situations, I end up saying like, okay, what aspect of app development or what types of apps or what type of development do you do or what types of construction do you specialize in or that you have like, that you absolutely nail. And usually it's like it's something like this. Like, you know, we crush cabinets or like we're really good at countertops, we're really good at bathrooms, we're really good at whatever. Right. And then zeroing on that. You'd be amazed at how much more responsive your advertising, your advertisements will be, prospects to your advertisements. Because like, then you can show before and Afters on bathrooms, like, it gets much more niche down. And then people who are coming in and calling are like, that's what I want. You're like, cool, let me just take your money and I'll give it to you.

[Bri]

So do you think, like, if we're saying no to the larger projects, which still holding a 42% margin, we can do more of those, but they take longer time. You still think it's a better option to do the quicker thing?

[Alex]

Well, what do you make on a bathroom?

[Bri]

So for a custom shower, it might be 10k $4200. A full bathroom in Tennessee is probably about 14.

[Alex]

Okay. How many of those can you. I mean, how many can you fulfill right now at max? Five. Five a month?

[Bri]

Our max was five a month.

[Alex]

Okay. And that's today.

[Bri]

I think we could fulfill double right now with our crew. And then we'd have to build a filament. I mean, we really just started ramping up. The last six months of this.

[Alex]

That was really more of the last six months. I don't want you to turn off how you get customers because you need to make money. And just for everybody, when you're really small and you're starting out, it's normal to basically accept money from anyone. You're like, you have a pulse and a credit card, you're for me. So it's normal. But what I would like you to do, though, like, you can take those jobs, but in terms of what you're being deliberate about your advertising, if you start running ads on, like, Facebook and show some of those images to generate leads and sell, like, I would focus on that. And if you think that, that. Because, like, we should be able to. You should be able to pencil out in five minutes. Like, can we make more money from this? If you feel like your sister seals very, very convicted about this.

[Bri]

Very convicted.

[Alex]

Okay. Yeah. So if you can make a lot more money, if you can sell a lot. Yeah, a lot more money selling bathrooms. And you can sell way more of them, because then the transaction, the deal cycle shorter. It's, you know, you walk there, you quote, you close. Like, it's very straightforward. I like those types of businesses. Yeah, no worries. Keep the money coming, but focus there. And then over time, the coloring of your money will shift and you'll be like 80% will be bathrooms. And then you'll just be like, okay, now we're going to. There'll be a time where you'll be able to say, we don't need this anymore. Just to get the focus So I just want you to like shift it over time. That makes sense. Okay. Yes, sir.

[Kevin]

Hey, Alex. Kevin with Asset Protection Planners. I set up asset Protection Trust to.

[Alex]

People in lawsuits for Germany and in lawsuits actively. Yeah, there you go. Or before. Yeah.

[Kevin]

And we do 11 million in revenue and I'd like to be at 25.

[Alex]

Okay.

[Kevin]

And I think two things. One, they add the pay per click cost or through the roof, eating up.

[Alex]

A lot of the profit.

[Kevin]

And two, finding people who really can sell and understand legal concepts.

[Alex]

Both super common. Yeah. Okay, so those are two separate problems. Yeah. Which one's the bigger problem?

[Kevin]

Currently it's the ad costs are going through the roof.

[Alex]

Just ppc?

[Kevin]

Yeah, ppc.

[Alex]

Well, I mean if you're bidding for those terms, the only way to win because it's an auction is going to be you increasing ltv. But I'm guessing, I mean, I'm guessing you're selling relatively expensive packages. We are, yeah. So I don't know how much room you have there. So I would probably, if I wanted to solve the acquisition problem, I would probably be looking at another paid ad way of running ads. So PPC for everyone here, typically pretty good returns, very consistent. It's really nice because once you set it, you can kind of forget it. Kind of. Well, definitely compared to social ads that are interruption based, you have to refresh all the time. But I think that may be. Actually the next thing though is that I think you might have to look at interruption based paid ads rather than inbound intent based because honestly the only other thing that you could really do is just start going top of funnel more because what percentage is people who are in lawsuits versus people who are not in lawsuits?

[Kevin]

About 50.

[Alex]

50. Okay. Yeah. So then I would imagine that where your growth will come is from the people who are not in lawsuits because there's way more people there than in lawsuits. PPC is going to be intent red hot pain. They're going to come in, they'll buy quickly. Whereas the people who are preventative obviously take a little bit more education. That's where it's actually very similar to the finance thing I was saying earlier where pushing to either virtual or in person events, giving away lots of information for selling more complex products tends to do really, really well in your space. And so I would probably go social ads to workshop virtual or in person and then sell from there into your stuff. That would probably be my strategy if you wanted to get to 25, because I don't think you probably can't increase your, your spend on ppc that much more anyways. True.

[Kevin]

Like webinars, things like that.

[Alex]

Okay, cool. Yeah. So you can do them virtually or you can do them in person if you want. Cool. Because if you do it in person, where are you out of? Florida. Florida. Yeah. I mean you could probably run a 50 mile radius in Florida and do an in person one and people still show. So that would be like a. Because it's much easier to get people to. It's a very easy funnel for in person if you're local. Like it's literally just lead gen call schedule. Remind the hell out of them. Expect 20, 25% to show up of your leads. 20 call it and then from there you'll close a third of the room. That's. I mean that's a very simple model. So I'd probably start there and then as you kind of like get more familiar with it, get the pitch down, et cetera, then you can go online and then do the nation. Great. That help? Thanks, appreciate it. Yeah, you bet. Real quick, guys, I have a special, special gift for you. For being loyal listeners of the podcast. Layla and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product, you got customer success, you've got it. You've got recruiting, hr, you've got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30ish pages for each of the stages. Once you enter the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com roadmap, R O A D map, roadmap.