How to Get Out of a Sales Slump | Ep 900

Summary

Podcast Summary: The Game with Alex Hormozi – How to Get Out of a Sales Slump | Ep 900

Release Date: June 4, 2025

Introduction

In Episode 900 of The Game with Alex Hormozi, entrepreneur and business strategist Alex Hormozi dives deep into strategies for overcoming sales stagnation. The episode features a series of business owners from diverse industries seeking guidance on scaling their operations, optimizing sales processes, and navigating common entrepreneurial challenges. Alex offers actionable insights, practical advice, and unique perspectives to help listeners break free from sales slumps and drive their businesses toward sustained growth.

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1. Ryan: Scaling a Real Estate Law Firm and Marketing Agency

Timestamp: [00:23] - [01:35]

Ryan, the owner of a real estate law firm and a marketing agency, shares his aspirations to grow his law firm from $2.5 million to $10 million in revenue. Despite his agency generating $450k with a $200k EBITDA, Ryan feels constrained by the logistics of managing both businesses.

• Key Points:

  • Ryan struggles with dedicating full-time efforts to his wife's law firm while managing his marketing agency.
  • Alex suggests reallocating his time from the lower-performing agency to focus on the more lucrative law firm.
  • Importance of prioritizing high-impact areas to maximize revenue growth.

• Notable Quote:

  • Alex [00:45]: "If you took 30 to 35 hours a week and put it towards the thing that's already making seven times as much money, do you think you'd be able to find a way to get the extra 200?"

Alex's Advice: Alex encourages Ryan to consider shutting down the marketing agency to fully commit to scaling the law firm. He outlines a strategic approach to exit gracefully, maintaining client relationships, and potentially earning passive income through referrals.

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2. Ricky: B2B Bar Cocktail Mix for Country Clubs and Resorts

Timestamp: [02:59] - [07:08]

Ricky discusses his business of selling frozen cocktail mixes to B2B clients such as country clubs and resorts. With revenues reaching $3.5 million last year, Ricky faces challenges in expanding sales beyond existing distribution channels dominated by his father's outbound sales efforts.

• Key Points:

  • The product is a specialized frozen cocktail mix, requiring high-volume clients.
  • Dependence on Ricky’s father for sales has limited growth potential.
  • Alex advises mechanizing the existing outbound sales process to scale efforts.

• Notable Quote:

  • Alex [04:35]: "So, if I had to pick between more of that thing and this brand new thing that you've never done, I definitely would mechanize the existing thing."

Alex's Advice: Alex recommends standardizing the outbound sales process and hiring a dedicated sales team to replicate Ricky’s father's success. Additionally, he suggests exploring trade shows and conferences to increase product visibility and generate new leads.

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3. Max: Contractor Equipment Sales Facing Fulfillment Bottlenecks

Timestamp: [05:50] - [10:37]

Max owns a business selling lightweight equipment to home service and industrial contractors. Despite strong revenue growth, Max anticipates a production bottleneck due to an upcoming lease expiration and needs to decide whether to relocate his production facility.

• Key Points:

  • Current revenue streams are expanding, but fulfillment capabilities are strained.
  • The decision to move production to a more cost-effective location requires significant capital investment.
  • Balancing immediate sales and marketing improvements with long-term operational scalability.

• Notable Quote:

  • Alex [07:44]: "Now is the constraint that you just like, if you fix it, then the business will grow, but you are profitable today."

Alex's Advice: Alex advises Max to prioritize scaling sales and marketing to increase cash flow, which can then be reinvested into relocating the production facility. He emphasizes the importance of addressing both short-term constraints and impending operational challenges concurrently to ensure sustainable growth.

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4. Sam Tierling: Transportation Company Diversifying Product Offerings

Timestamp: [10:37] - [18:16]

Sam discusses his transportation company specializing in delivering chemicals to fracking companies, with revenues growing from $5 million to $10 million over two years. He contemplates diversifying by using his trucking fleet to sell additional products directly to end-users.

• Key Points:

  • Diversifying product offerings could lead to increased revenue but adds complexity and cash flow constraints.
  • Existing receivables pose a challenge for purchasing and selling new products.
  • The dilemma between expanding services and maintaining the core profitable business.

• Notable Quote:

  • Alex [12:22]: "So basically if you're buying the stuff that you're going to sell to the end users, you're going to add cash constraint to the business."

Alex's Advice: Alex cautions against overcomplicating the business model, highlighting the potential negative impact on cash flow and focus. He advises Sam to concentrate on scaling the existing transportation business, leveraging his established distribution network rather than diversifying into new product lines that could dilute resources and hinder growth.

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5. Chase: Exhaust Cleaning Business Struggling with Clear Offer

Timestamp: [18:16] - [23:43]

Chase runs an exhaust hood cleaning service for restaurants in San Diego. With initial success, he now seeks to refine his pricing and offer strategy to transition from competing solely on price to adding value through enhanced services.

• Key Points:

  • The business operates on a subscription model with $100k in yearly recurring revenue.
  • Challenges in differentiating the service to move beyond price competition.
  • Importance of creating a compelling, non-commoditized offer to attract and retain clients.

• Notable Quote:

  • Alex [19:16]: "So what's really important is how can we take this thing and break into 50 pieces."

Alex's Advice: Alex emphasizes the need to de-commoditize the service by identifying and eliminating pain points that competitors overlook. He suggests enhancing the value proposition with additional features like customer portals and backend support, thereby allowing Chase to justify premium pricing and foster customer loyalty.

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6. Kyle: Outdoor Lighting Business Facing Seasonal Lead Generation Issues

Timestamp: [23:43] - [29:28]

Kyle owns an outdoor lighting business targeting homeowners, generating $880,000 annually with a significant reliance on holiday-season sales. He struggles to generate leads during the off-season and seeks strategies to stabilize revenue year-round.

• Key Points:

  • Heavy reliance on holiday sales leads to uneven revenue streams.
  • Exploring permanent outdoor lighting as a year-round service to complement seasonal offerings.
  • Difficulty in converting leads due to ineffective lead magnets and marketing strategies.

• Notable Quote:

  • Alex [25:13]: "The perfect business in the world is you sell all year and then you only have to deliver for this much."

Alex's Advice: Alex recommends expanding the service offerings to include permanent outdoor lighting installations, thereby diversifying revenue streams and reducing seasonal dependency. He advises enhancing lead generation tactics with more compelling offers and improving the overall sales funnel to increase conversion rates during the off-season.

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7. Kiera Brinton: Multi-Business Owner Seeking Clarity and Focus

Timestamp: [29:28] - [42:18]

Kiera Brinton manages multiple ventures, including a publishing house, luxury adventure book-writing retreats, a business school for women, and a TV show. Despite impressive revenues and diversified interests, Kiera feels overwhelmed and seeks clarity to focus her efforts effectively.

• Key Points:

  • Managing multiple business lines leads to dilution of focus and operational inefficiencies.
  • Desire to scale the most profitable ventures while minimizing distractions from less scalable projects.
  • Struggle with balancing creative pursuits and business management responsibilities.

• Notable Quote:

  • Alex [33:50]: "You have to realize that like you can't pursue every opportunity. Not only can you not pursue every opportunity, you basically have to say no to every opportunity to be able to make one opportunity worth pursuing."

Alex's Advice: Alex advises Kiera to prioritize her primary revenue-generating activities, such as her book writing and publishing endeavors, and to eliminate or delegate less critical projects. He emphasizes the importance of focusing on scalable and profitable ventures to maximize business growth and personal satisfaction, urging her to make strategic trade-offs for long-term success.

---

Conclusion

In this episode of The Game with Alex Hormozi, Alex provides valuable, tailored advice to a range of business owners grappling with sales slumps and scaling challenges. His insights underscore the importance of prioritizing high-impact activities, de-commoditizing services, and maintaining strategic focus to drive sustained business growth. By addressing each guest’s unique situation, Alex reinforces the principles of effective business management and entrepreneurial resilience.

Notable Takeaways:

1. Prioritize High-Impact Areas: Focus efforts on the most profitable and scalable aspects of your business to maximize growth.

2. De-Commoditize Your Offer: Differentiate your services by eliminating customer pain points and enhancing value propositions to avoid competing solely on price.

3. Strategic Focus Over Diversification: Resist the urge to pursue every opportunity; instead, concentrate on core business strengths to build substantial and sustainable growth.

4. Optimize Sales and Marketing: Standardize and scale sales processes, invest in effective lead generation strategies, and continuously refine your sales funnel to improve conversion rates.

5. Manage Operational Constraints: Address both immediate and future operational challenges concurrently to ensure long-term business sustainability and scalability.

By implementing these strategies, business owners can effectively navigate sales slumps, enhance operational efficiency, and achieve significant growth trajectories.

Transcript

[Alex]

So it's like I put all my effort whenever I start any business or any product line into like, why is this different? Like that's my full. Like I don't even think about pricing. I don't think about anything until I answer that question. And I have to at least be able to articulate it to them really simply. Which is like, here's the five things that happen that suck. Here's how we don't have any of those five.

[Ryan]

My name is Ryan. I have a real estate law firm and we sell real estate closings to home buyers. We did 2.5 million last year and we're on pace to do 3.5 million.

[Alex]

You're a law firm?

[Ryan]

Yes.

[Alex]

Okay.

[Ryan]

I want to be at 10 million in revenue and I also myself operate a marketing company. My wife operates the law firm. That's what's I believe stopping me.

[Alex]

Okay.

[Ryan]

She's the lawyer. I do the marketing and business.

[Alex]

Okay. How much does the agency make?

[Ryan]

450. Top line? 200 EBITDA.

[Alex]

And how much the law firm make? I know you're on page 25. What's the bottom line?

[Ryan]

About 500.

[Alex]

Oh, interesting.

[Ryan]

This year it'll probably be closer to 750 with the 3.5.

[Alex]

So do you not want to full time market into your wife's law firm? She's a client of your marketing agency.

[Ryan]

Correct.

[Alex]

That's smaller than her law firm. Correct. Why not join hands?

[Ryan]

It's tough to turn something stop Something that's making $200,000 in my pocket every year.

[Alex]

How much time do you put towards the agency?

[Ryan]

30 to 35 hours a week.

[Alex]

If you took 30 to 35 hours a week and put it towards the thing that's already making, you know, seven times as much money, do you think you'd be able to find a way to get the extra 200?

[Ryan]

Yes, because our constraint is to get more butts in seats. I guess my problem is like shutting it down. How do you like how to shut something down? Like the right way, I guess.

[Alex]

Yeah, yeah. No, it's a great question. So it's actually kind of like the, the example I gave with the, the price raise, which is I just give people ample time. So if I think that something's going to disrupt someone's business, you know, for your own reputation, I'd say, listen, you know, it's been an amazing time. I know that, you know, you guys have been loyal clients. I just want to let you know two things. Number one is we stopped accepting new customers. And number two, we're going to be phasing, basically phasing this out over the next six months. And so I wanted to give you guys six months. We'll continue levels of service for this period of time. Also I have three recommendations of people who I trust in this industry I think will do a good job. And then you negotiate deals with those guys to give you kickbacks for all this book of business. And you'll probably be able to make a hundred grand a year just from referring the business out to those guys, which they'll happily do. And then that's a very easy way for you to keep the money, get it to 100% passive and then move on and help the help your. I mean I don't help your wife. It's like you guys do your business together and crush it. Yeah.

[Ryan]

Would it be smart or dumb to hire an operator just to operate the marketing company instead?

[Alex]

Yeah, I think that would be not smart.

[Chase]

Cool.

[Ryan]

Thank you.

[Alex]

Perfect.

[Ricky]

My name is Ricky. We have a bar cocktail mix that we sell to B2B country clubs resorts.

[Alex]

You partner with Ben Potts who is on the cash guest.

[Ricky]

Yeah, we do 3.5 last year and revenue. And our biggest thing that's stopping us was my father. He was the main salesman that he had a position. He's doing this full time as well as trying to focus on whether we should try to grow the business awareness just because a lot of people don't know about it unless they know us or referrals or just try to just get more accounts.

[Alex]

Can you speak a little bit more about the product?

[Ricky]

Yeah. So a pina colada, strawberry daiquiri, margarita, stuff like that. It's mainly. It's a frozen product like comes in frozen last two years. Once you thought it lasts a week. But it's mainly for people who are high volume. So you can spat out like cruise.

[Alex]

Ships and things like that.

[Ricky]

Yeah, mainly like a frozen drink machine or like a blender.

[Alex]

So. Got it. Okay. And so the question is whether you should focus on awareness.

[Ricky]

Oh, like growing the brand. Because it's like it's not very public. It's only mainly people that know us, we talk about it or just people who the guests are like this is amazing.

[Alex]

You're currently all word of mouth.

[Ricky]

Yeah, basically.

[Alex]

Okay, so you have no. Well, you have your father who's. Who does sales.

[Ricky]

Yep.

[Alex]

And how does he do sales?

[Ricky]

Previous relationships from being in the industry for over 20 years.

[Alex]

Outbound.

[Ricky]

Yeah.

[Alex]

Okay, so what stops you from mechanizing his existing outbound motion and then getting like 10 guys to do it.

[Ricky]

We haven't done it. It's just, you know, probably. Yeah.

[Alex]

So like, I mean, if I had to pick between more of that thing. Right. And this brand new thing that you've never done, I definitely would mechanize the existing thing.

[Ricky]

Yeah.

[Alex]

So yeah, it's going to be a conversation that you're going to have with your father. Obviously we can help but like breaking down like, okay, let's take this thing and break into 50 pieces. Because it's not like, hey, how do you do outbound? Like that doesn't work. It's like, okay, what's initial contact look like? What's first message, what's second message? What's the script, what's the opener? What's the offer to get them kind of enticed? Once we have that conversation, what's the thing that we can increase the pain between where they're at and where they want to go. So we can insert ourselves.

[Ricky]

Yeah. One of the biggest things at least is with getting them to actually try the product because it's like, I was like, oh, it's just, it's another mix. So once they taste it, it's different. But you know, getting to that person, a decision is, you know, the hardest thing.

[Alex]

So there are so many ways to do that. But yeah, I mean you, you need an outbound motion. There's probably a combination of conference slash trade show. That would work really well too, especially cause you are a tate. Like literally taste it and it would probably crush in that setting.

[Ricky]

Okay.

[Alex]

Probably be very easy to sell.

[Ricky]

Yeah.

[Alex]

I just don't. I don't think you should go brand now, especially since you built the whole business off B2B. Yeah, I would just do more of that for now to start. Okay. Thank you. Yeah, no worries.

[Max]

Thank you very much for the event. Very well executed.

[Alex]

Awesome. Thanks.

[Max]

I'm Max. Nice to meet you. So we sell a variety of different like lightweight home service contractor equipment to home service contractors and industrial contractors. Love that family business. We've been doing it for couple of generations now.

[Alex]

Cool.

[Max]

We are. I was going to ask a different question, but got answered by your, by your team earlier in the day. So I'm going to skip the revenue level question. Just say we have two PNLs that I have fought to very much focus our teams. We've divided and conquered 1. 1. 1 part of the team focus on one P and L. The other part of the team focused on the other P and L. And we're going very deep into the niche and really niching down to who the core avatar is for each of those core product lines.

[Alex]

Okay.

[Max]

In doing that, we have a fulfillment bottleneck that's on the horizon that we have to make a call for both or one for one. So we started a plan to relocate our production facility to a different state during COVID because, you know, New York wasn't so friendly to manufacturing companies.

[Alex]

Or business.

[Max]

Or business. It was ridiculous. So I moved to Texas and we moved the business to a different state. And now we have to decide if we want to continue that plan and move the other 50% of the P and L and kind of make manufacturing a center of excellence that's based out of this new state.

[Alex]

Okay.

[Max]

And recapture some of our EBITDA by consolidating the cost structure.

[Alex]

Why not do it?

[Max]

Because it's a huge distraction for the team while we're. While we're really sales and marketing constrained. So right now we need to like hack sales and marketing to take us to the next level. But we have this like, over the next 24 to 36 months, we have this ticking time bomb of one of our production facilities. The building's kind of dilapidated. We lease is going to expire.

[Alex]

So you're going to have a constraint. Basically you have an upcoming constraint in 24 to 36 months that will happen with basically manufacturing, procurement, whatever. Right. But you have a today constraint of sales and marketing. Now is the constraint that you just like, if you fix it, then the business will grow, but you are profitable today.

[Max]

What do you mean?

[Alex]

So the one that's coming in 24 to 36 months is an existential threat. Right? Because like if you, if the building's falling apart and you have to find a new location anyways, that's an inevitable threat. Like if you don't solve that, you won't be able to continue that line of the business. Right. The. The constraint in terms of the short term is just I want to get bigger. And the thing that's limiting me getting bigger is sales and marketing. Correct. This is definitely like Eisenhower matrix of non urgent and important.

[Max]

Yeah.

[Alex]

And so this actually feels like a project that can be done. I don't normally say this, but like in parallel because I do think that you'll get a lot of improvements within the business if the whole team is centralized. And so I would, I would definitely encourage that. You also have tax improvements and all that other stuff that that comes with moving to Texas. And the thing, the reason I lean towards saying like, that's probably worth doing is that let's say that, let's play it out the other direction. Like if we crush marketing and sales in a good way, it's like we're just going to exacerbate how quickly that next constraint is going to come. And so I probably lean towards like, let's pull the facility in, then we can crank the hell out of this. The reason I said concurrent is like a lot of times the leaders that are going to be in charge of one are going to be very different than the leaders that are in charge of the other. So it might be something that you can do at the same time, which again, I don't normally say it, but like you just finding, you know, basically managing the move between these two places a pain. But not like to me that's like a 12 week project.

[Max]

Okay. And if it. And if we're capital constrained and doing both, any.

[Alex]

Okay, so there is a capital constraint. That's why I asked about the profitability.

[Max]

So we're profitable. But to like fund a move and like do it securely or not, what.

[Alex]

Would that represent in terms of percentage of yearly cash flow from.

[Max]

What do you mean?

[Alex]

If you were to move, how much cash does that represent for you as a percentage of how much free cash the business generates per year?

[Max]

45%.

[Alex]

Okay. So about half your, roughly about half your profit would go towards the move for one year.

[Max]

Conservatively.

[Alex]

Okay, conservatively. So if we were to increase marketing and sales, then we could get more cash flow and would we be able to do that without incurring the supply constraint that the existing dilapidated location would cost us sooner?

[Max]

Yeah. So you're saying like max out these two facilities?

[Alex]

Yes. Can we make more money faster so that we can do the move faster?

[Max]

Yeah, probably.

[Alex]

Okay. Then it would be sales and marketing first, free of cash. Deploy the cash as the reinvestment strategy is a good return on capital. So it totally makes sense. Bring that in, recapture ebitda and then it makes sense.

[Max]

Okay. And take anyone who's like on the marketing and sales projects, like totally off that and just have them start planning for this move. Like have someone own that now?

[Alex]

No, I think marketing and sales first. Marketing sales first, free up cash flow. Bring somebody else in who can project manage the move and if they're a good project manager, you'll want to keep them long term.

[Max]

Okay, cool. Thank you. Appreciate it.

[Alex]

That was a fun one. That was good. Thank you.

[Sam Tierling]

My name is Sam Tierling because I sell a service. I own a transportation company.

[Alex]

Cool.

[Sam Tierling]

We deliver chemicals to the fracking companies Last Mile transportation like this.

[Alex]

There we go. Nice.

[Sam Tierling]

Revenue wise we did 10 million last year. Year before that was 7. The year before that was 5.

[Alex]

Nice.

[Sam Tierling]

Kind of just kept growing and this year decided to slow it down a little bit. Not like, well I guess slow it down to get myself out of the day to day and it's worked great. While doing that I realized that can make more money taking and selling to customers that my customers don't sell to the same product that we're transporting.

[Alex]

Say that last part again.

[Sam Tierling]

All right, so I'm more of a specific type of person. I sell polymers or I transport polymers, friction reducers. SNF is one of the biggest. They make it, there's 40% of customers they won't deal with that want to deal with me that want to buy it from us. My struggle is, is I figured out how to continue to replicate the trucking industry like the trucks and grow that. So do I keep focusing on that which is a very cash intensive business, like I have to put a lot of money up front or do I use my trucks to sell the product to the end user? But I also struggle with that because how do I balance the 2? Cash like sorry, how do I balance the two? So if I like I'm regularly floating a million and a half, 2 million in receivables for BKT and I want to start buying the product, well, I have to pay in 30 days. Not going to get paid. Kind of same thing is you're going.

[Alex]

To add another cash flow constraint to the business.

[Sam Tierling]

Say that again.

[Alex]

So basically if you're buying the stuff that you're going to sell to the end users, you're going to add cash constraint to the business. Okay, right.

[Sam Tierling]

Yeah.

[Alex]

So then they would further constrain it would basically pile on the existing constraint. So said differently, why do it versus just doubling the existing business? Because like the way that I'll explain where my thinking is. So I had a good friend of mine from high school, actually that's a strong statement. An acquaintance of mine from high school who had a general contracting business and in his dentist general contractor business he realized he was, he was pretty good at roofs. And so he started doing roofs. And I called him up, I was like hey, how's the business going? He's like ah, we're growing, it's great. And so he was explaining to me, he's like so we, we do roofs primarily. I was like okay. He's like we also do, you know, some contracting work. And I was like okay, that's Another thing, he's like, we also kind of buy and flip houses. I was like, okay. He's like, but that's. He's like, you know, I didn't want to leave money on the table, which is like my favorite entrepreneur statement ever. And I was like, so what stops you from being a billion dollar a year roofing company? And the answer is the general contracting and the real estate flipping. I was like, well, what stops you from being a billion dollar a year real estate flipper? The answer is the roofing and the general contracting. And so basically, if you already have a winning model, to me I'm like, there's no reason to not just become even better at the thing that you're currently doing and compound the competitive advantage that you have. There's always going to be better. There's always going to be opportunities.

[Sam Tierling]

I guess I looked at it as a more of a control thing, like. Cause there's.

[Alex]

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've got customer success, you've got it. You've got recruiting, hr, you've got finance. 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 research roadmap R O A D map roadmap.

[Sam Tierling]

For the most part, our customers we've started with have been with us for six or seven years.

[Alex]

On the trucking side?

[Sam Tierling]

Yes, on the trucking side. But they also do dictate the rates. Like, I can continue to raise my prices and eliminate customers, which we have done, but they're only willing to pay so much. And it's like, well, if I'm selling the chemical, I'm still going to get what I want for transporting it. And then you're getting paid to sell it too. So I don't. It's just one of those things.

[Alex]

It's like the only reason I hesitate is like, it's adding. It's. It adds complexity to the business. Again, given the limited context that I have of, like, five minutes of hearing about the business, like, if I. It's a huge decision. But from my personal experience, when I had gym launch and prestige labs, I basically said, oh, I've got this distribution base of gyms, and so why don't I just sell supplements through my distribution base? Which on the service level, seems like a smart idea. But what it ended up doing is that it completely slowed down the growth of my main business, which was the licensing business. And so it felt like, oh, there's this big pot of gold right here. But if I took all the attention that I put into starting this supplement company and manufacturing it and distributing it and, you know, the testing it and the flavors and the marketing and all that stuff and the support team that I had to do for the product, I could have taken all of that energy and just gone double down into the thing that I should have done. It was one of the bigger mistakes that I've made. And so if you already have a business that's gone from 5 to 7 to 10, I'm like, well, maybe next year you're at 13. Year after that you're at 17. I'm like, that sounds like a pretty good business.

[Sam Tierling]

Yeah, I guess. I guess it was more of what I wanted to do.

[Alex]

If you want to do it, that's a life question more than a business question.

[Sam Tierling]

Yeah, but how do I make it make sense to not screw my first business up?

[Alex]

Well, yeah, that's always the. I mean, like, there's always opportunities. And the thing is, the bigger distribution base is which it will continue to grow, the more enticing the other opportunity will be. Right? The woman in the red dress, she just always is more and more attractive. The more distribution you build, the more skills you have and the more opportunities you see. Like, believe me, the amount of opportunities that I have to return down now is sickening. But it's just like taking to the natural extreme. Can I build a $100 million per year trucking business? If the answer is yes, then what risks that? Everything that isn't. That.

[Sam Tierling]

That's fair.

[Alex]

I mean, it seems like a simplistic way of viewing the world, but it's also really hard. But I also think it's probably the right call.

[Sam Tierling]

I was more or less thinking of it in transportation most of the time for Hazmat companies, once you get to where you do 15 to 20 million revenue, you get bought out.

[Alex]

Okay.

[Sam Tierling]

Quantics, Hanif, Dana.

[Alex]

Do you not want to get bought out?

[Sam Tierling]

No, no. Get started this, because a lot of.

[Alex]

You could always just keep owning it because they can't force you to give. They can't force the money down your throat. Like, no, I'm just being real. Like, I mean, a lot of people take the exit then, because at that point they probably have, you know, between. I know. What are margins?

[Sam Tierling]

20%.

[Alex]

Okay. Yeah. So 20 at 4 million in EBITDA, maybe 5. Right. And so at that point they maybe give you eight or ten on it. And so most people are like, okay, well, for 40 million bucks, I'll walk away. And that's why a lot of people, like, usually that's, I mean, I think part of the reason that institutional investors come in at that 5ish million is that at that point is where most business owners are like, okay, this is enough for me to be done forever. And that's probably why there's a ton of M and A activity. This is me just speaking speculatively. So I don't think there's anything inherently like, okay, if a lot of people get bought out at 20, like, fine. But there's also companies that get to 100, and it's usually just a more stubborn founder who does it for different reasons, which I actually think is a good thing.

[Sam Tierling]

Okay. No, that's gives me peace of mind. Thank you.

[Alex]

Yeah, you bet.

[Chase]

My name's Chase. Own a exhausted cleaning business in San Diego. So we sell like exhaustive exhaust hood cleaning.

[Alex]

Exhaust hood cleaning.

[Max]

Got it.

[Chase]

So we do like grease removal from ducks, fans, hoods, and restaurants in San Diego.

[Alex]

Cool.

[Chase]

Where we're at right now, just hit month six.

[Alex]

Is that like 18 wheelers, like semis that you do that on? What is that? Is that we just have like a.

[Chase]

Van with a hot water pressure washer. Roll, rolling. The restaurants, guy with water and truck.

[Alex]

Okay. Oh, so restaurants, restaurants. Okay, got it.

[Chase]

So like, in all the restaurants, there's a hood system above where they cook grease. Grease in there. It's like a fire hazard. So everyone has to legally do it.

[Alex]

Yeah, it's a great business. I, I, it was described to me differently in a different setting. So yeah, it's a cool business. Very.

[Chase]

That's why I kind of explained. Or else people are like, what the hell are you talking about?

[Alex]

Yeah.

[Chase]

So we just hit month six. We're doing like 6k a month right now, but we have People on it's a subscription based business. So our book right now for like yearly recurring revenue is like right around 100k.

[Alex]

Cool.

[Chase]

I think what's stopping us right now is just like not a clear offer.

[Alex]

Right?

[Chase]

Because I deal with restaurant owners who only care about their bottom line of money thing. They're business owners. Yeah, true. They're like, well, if you can give me a better price, I'll give you a shot. And right now I'm just like the hungry kid that's like, yeah, I'll beat your price easy. Right. So I think what's stopping us is figuring out pricing and offer with a service that more or less is the same no matter who you go with. But we have added value adders with like customer portal streamlining, back end support, things like that, if that makes sense.

[Alex]

So you say that to the business owner.

[Chase]

Say that to the business owner, how suck you mean?

[Alex]

There's good, fast, cheap, pick two. And so the problem is you can have somebody else who can do this. Like to your point, like you started with the premise that this is a commoditized service. I would just break, I would just erase that from your memory because at the end of the day, like you have to believe, you have to believe before anybody else that it's not a commoditized service. And so I would say, what are all the reasons that somebody who sucks at this sucks and let's fix all of those things. And so what's really interesting about good, like what does good even mean? Right? So good is basically the absence of hard, right? And so I think about this when I'm creating a product or service and this has actually been really helpful for me in terms of like how you operationalize value in terms of quality is you think, what are all the things that suck about the existing services? What are, what, what makes it hard? And so a lot of people use the term friction, right? And so something that is easy, you can't make something easy. You can only make it not hard. Right. Like if I said make it easy, it's like when something's easy, all the hard vanishes and all that's left is the outcome. Right? And so if we want to make our products or services easier, which then means more valuable, we have to remove all of the elements that make it sucky. And so if we're thinking about the competition that you're competing against, like maybe a lot of them are, you know, not that personable, they be terrible service, maybe they don't do a complete job, maybe they're not willing to come back if something happens. Like, is there, like, what risks does the restaurant incur? If it's a shoddy job, is there a cadence that they have to like, maybe we can treat it in a way that allows us to come half as frequently so we're more per. More per cleaning, but they. They don't have to pay it as often. Right. So we have higher gross margins, and that actually works fine for us, and it's less for them. Like, year. I'm going with this. Yeah, yeah. And. And then from a. From an economies of scale perspective, it's like, how can we increase. Now you're super early on this, but, like, over time it'll be, how can we increase route density so that, like, we don't waste as much time and so we get more efficient with the routes and we can ultimately make more than our competitors or at least increase our gross margins even we keep our price fixed.

[Chase]

Right now that makes sense. One more question. So everybody has to get done at least twice a year. So we're signing people a year agreement anywhere from twice a year. Some people do quarterly. Some people do like three times a year. So based on what you just said, would you recommend potentially going more towards just pushing semi annually but keeping price higher so that they feel like they're paying less over the year?

[Alex]

Yeah, I would look at my gross march. I mean, real, real. I'd rather sell someone more. Start at 4 down, sell to 2 if you can, and then probably play with payment terms, which is like, can I stack more of that cash up front versus getting paid quarterly, paying full upfront. Yeah.

[Chase]

Okay, gotcha.

[Alex]

But big picture, I mean, we. I, like, if I'm you, I'm putting all my effort into trying to figure out how to decommoditize my service, because it is probably the most important thing otherwise. You're right. You will just consistently be dealing with. If you are the same to the customer, it's the first chapter of offers. Right. Like, if you're the same thing to the customer, these two things are about the same. I'll buy the cheaper one. It's the worst comparison. It's not the fight you want to fight. So it's like, I put all my effort whenever I start any business or any product line into, like, why is this different? Like, that's my full. Like, I don't even think about pricing. I don't think about anything until I answer that question. And I have to at least be able to articulate it to them really simply. Which is like, here's the five things that happen that suck. Here's how we don't have any of those five. And for that, in exchange, instead of paying this, you pay this. But this is why it's worth it, right?

[Chase]

And then in that our only form of outback right now is just like door, door knocking restaurants and then cold email. So then building that offer out with the decommoditized, if that's even word, and then put that into the offers, the emails, the text, the cold outreach, basically. And just sell the shit out of that.

[Alex]

Sell the shit out of it. Heck yeah.

[Kyle]

Kyle. I sell outdoor lighting to homeowners. We do 880,000 revenue about 40% is in the holiday season. New Christmas lights. Bas. The problem is we don't have enough leads in the not holiday light time of year. So the first half, until basically now.

[Alex]

I fixed this business so many times. Do you want to just walk you through it? Yeah, for sure. Okay, cool. So basically you have, you have one kind of existential decision that you need to make, which is are we going to be full time lighting? Which there's nothing wrong with that. Look at the Halloween store. Like they're open two months a year and they just murder it. And that's all they do. Right. The alternative is that you basically have a home team that goes from lawn care and other home services to, you know, lighting. Because the lawn care guys have the equal opposite issue. They're like, okay, well there's grass that's growing nine months of the year and then it's holiday season. And what do my guys do for three months or four months, depending on whatever geographic area you're in. Right. And so I tell you which one I prefer. I prefer the keeping the holiday season business year round. And I'll explain why, but either option works. I just want to be really clear about that. I like thinking about it. How many months of the year are you doing the lights? Three.

[Max]

Yep.

[Kyle]

45 days.

[Alex]

Perfect. Yeah. So instead of. So the way I think about it is how can I take. How can I equip my existing team with as many skills as possible so that the other 10 months of the year all they're doing is getting business. And so like the perfect business in the world is you sell all year and then you only have to deliver for this much. It's an amazing business. You just collect cash all day long. Collect cash, collect commitments. Collect cash, collect commitments all year round and then you boom. And you basically earn the living over the next 45 or 60 days. And then you go back into the sales cycle. And so that's one way of doing it. I like that because it's such a simple. Like you just have to think about one thing for 10 months, which is marketing and sales.

[Kyle]

Yeah.

[Alex]

And that gets pretty nasty. And the cash flow is really good. The alternative obviously is you're like, okay, well these guys don't have these skills. Which then begs the next question is what type of talent would I need to facilitate model A versus Model B? Right. If you have model B, which is maybe, maybe of lower skilled people who work for you right now, then it's like, okay, can I buy some lawnmowers? Can I buy some landscaping stuff so that I can give them something to do for the other nine months of the year? Yeah.

[Kyle]

So we were doing lawn care and picked up Christmas lights to fill that gap. Well, where I live in October, you have to do both. Yeah, I got rid of the lawn care.

[Alex]

Okay, well, just.

[Kyle]

Just Christmas.

[Alex]

And you made better margins and all that.

[Kyle]

Yeah, yeah, yeah, yeah. So that was awesome. So what we're doing now is project based permanent lighting jobs with the exact same team. So we can literally just shut it down as soon as Christmas time starts.

[Alex]

Cool.

[Kyle]

So I guess where I'm. What you're saying would be just sell Christmas all year, which is like really hard to sell this time of year. Really, like super easy to get leads in Christmas.

[Alex]

Yeah.

[Kyle]

So my thought was sell permanent lights and then also 50% of them still get Christmas lights.

[Alex]

But why not do that?

[Kyle]

That is what I'm doing.

[Alex]

Well, great.

[Kyle]

Well, so the problem is the leads problem.

[Alex]

Okay.

[Kyle]

So I'm running out of Christmas light customers to sell landscape lights to because that was the natural first, like, easy to get them. Well, I'm running meta ads, so lead.

[Alex]

Gen for permanent lights.

[Kyle]

Yeah, exactly. Is the problem. So what I'm trying to figure out is the problem, like lead magnet issues or landing pages use is where I'm at, I think.

[Alex]

So now we're. Now we're in the meat of it. Great.

[Kyle]

Yeah.

[Alex]

Yeah. No, I'll bet you that the crate is probably not that good because I think it's a pretty easy thing to sell. Yeah. The permanent lighting, like you show a house before and after the dark. Before and after, like, oh, look, lights. I think it's very visual.

[Chase]

Yeah.

[Alex]

So I actually think that. I actually think that the ads is probably the issue. What's the lead magnet you're offering right now?

[Kyle]

We come to your house, do a free demo so you can See how it looks?

[Alex]

Yeah, yeah. I probably try and enhance that offer. The nice thing is in local markets it's very offer driven. And so I'd have to think more than three minutes, you know, two seconds about it because it'll be the front end of the whole business.

[Kyle]

Yeah.

[Alex]

But it would probably be some element of like some amount of lights that come for free. So like I think something that would murder would be like, can I light someone's like not their deck but like maybe from the sidewalk to the house or can I just light the driveway like some small element. So we talk about in the leads book, a lead magnet can either be a trial of something, it can be one part of a multi step process, or it can be a third thing. But for yours, I think the. Thank you. One step at a multi step process. That's why I wrote, I wrote it down so I don't have to remember it. But I think like, if I can, if I wanted to, because like I'll, I'll prefer to start with a banger offer and then add friction. Because the thing is, is like you can say I'm going to give this away, but you don't have to give it away to everybody. You can say I only give it away to houses that are over X. And you can have people put their address in and then run an API to Zillow, look at home value and then rank order the leads based on value of home and then basically prioritize those leads ahead of time. And so you can go to those, you know, those houses first and probably sell much bigger, bigger packages overall. But I think that like if I'm struggling to get leads, I just need them to say they want lighting. I don't really care how they say they want lighting. I just need them to say they want it and then the sales process takes care of the rest. Cool. Do you like that?

[Kyle]

I'm just trying to process. Yeah, like how that would go. I mean you're 100% right. That's the problem is people, once they say they want lighting, selling it is easy.

[Alex]

Yeah.

[Kyle]

So I just got to get them to say it and put their phone number.

[Alex]

Exactly. So give them a crazy. So give them a much better offer than I'll give you a free sales pitch. Yeah, yeah, yeah, yeah. No, I'm just being real. Like that's so fundamentally, that's it. So I think you're saying like we'll, we'll do the install for free. You just cover the cost of the lights for this tiny amount See how I'm developing it now? I like it. All right, now you can put the markup on the lights and put zero on the labor. It doesn't matter either way. You just basically mix and match how you're showing the money. And that way you'll still break even on that first thing and you'll just know that one out of two or whatever it is, who buy the first thing, buy the 10 times bigger package and then that's just math. Cool.

[Kyle]

That's it.

[Alex]

I like that. I like that too.

[Kyle]

Awesome. Thanks.

[Alex]

I like the business though. Congrats.

[Kiera Brinton]

So my name is Kiera Brinton.

[Alex]

Let me brace myself.

[Kiera Brinton]

We're like going to clean out my closet for a minute.

[Alex]

Okay? Okay.

[Kiera Brinton]

So last year my company made a million. I've already made a million this year, so I think I'm on track for four, but I hope to hit 10. So here's the deal, is that I get really bored. And so I'm also really amazing visionary. And so I've built a lot of different things. And what I'm needing right now is I need clarity. Okay. And I need you to. I would love for you to help me focus. Okay? So I'm gonna share with you. I'm gonna share with you what I've done, I'm gonna share with you what I have. And then what I would love for you to show me is how do I get clarity?

[Alex]

Okay. What do you sell?

[Kiera Brinton]

Yeah, so I have a publishing house. Okay. But really what I've sold is that I take people on these five day adventures, like luxury adventures, and I can help people channel their books in five days and that's what's filled my pocket.

[Alex]

Cool.

[Kiera Brinton]

But it's also just not scalable.

[Alex]

Why is it not scalable?

[Kiera Brinton]

Well, because one week a month I'm on these adventures and I love it, but it's like there's like a ceiling. And so then I like rented this island in the middle of the British Virgin islands. I took 15 people there, we all write their books for five days. And so that was like scalable, which that landed me a TV show. So now I have like this TV show, but then I have like my publishing house. And then like I have this business school for women. Yeah. And then like I'm also like a single mom of five kids. Also I like write books on the corner. Also I did a live event in January and closed 1.25 million in five minutes to a crowd of 30. So it's like I have all these things. I just like, I Just need some.

[Alex]

Yeah, you got to pick, you got to pick one of your five kids.

[Kiera Brinton]

The 10 year old, all day.

[Alex]

There you go. So you just gotta, you gotta think about which one's the 10 year old of your businesses. It's just like the roofing thing that I said. Like, the thing is, the more talented you are, the more opportunities you know you could crush, which just means more things you have to say no to. And it's just like, it's the reality of it. I mean, the thing is, is there's a price to that, which is if you continue to do what you're currently doing, you pay a price on either side. On. If you continue, you pay the price of how big the impact you want to have and how big of a business you ultimately built. That's the price. What you get for that trade is you get to have the novelty and the excitement of new things happening all the time on the other side. You build something really big that has teams and systems and it just grows really large. Probably maybe not bigger than your vision, but large, much larger than what you have right now. And what you give up for that is all of the novelty that's associated with doing new things.

[Kiera Brinton]

Yeah. So which one?

[Alex]

Well, it sounds like you know which one you should do and you want to do something different.

[Kiera Brinton]

I feel like when I've been looking at, okay, well, what has brought people to me, it's always the books. And I keep trying to get out of it because there's so many people and there's so many things in all these systems in publishing. And I'm like, but if I just ran the business school, I don't have to have all these editors and formatters and book covers. Right. But then I look at like, well, what do people always come to me for? It's always books. No. Yeah.

[Alex]

So you run the business school, right?

[Kiera Brinton]

Yeah.

[Alex]

So imagine I come to you and I'm saying, hey, I've got this business that everybody wants to buy from me. It has good margins, I sell it like crazy. But I have like four other businesses that I want to start. They don't grow as quickly as this other one. What should I do?

[Kiera Brinton]

Weird. Sounds so easy when you say it. Yeah, obviously. Right, right, right. Yeah, yeah. Okay.

[Alex]

No, I mean, like, that's the, I mean the thing, what you're encountering is a problem I think everybody in this room has dealt with. Right. It sucks. It's like, and I was crude earlier and I apologize to them in the room, but like, it's like you have to realize that like you can't pursue every opportunity. Not only can you not pursue every opportunity, you basically have to say no to every opportunity to be able to make one opportunity worth pursuing. And if that sounded good, didn't it?

[Kiera Brinton]

Yeah, that was, that was really good. If my TV show is on Amazon prime and I'm helping people write books and then I'm like, but I'm pushing my business school, like that doesn't even make sense.

[Alex]

Yeah, I wouldn't push the business school. Just have the media asset of prime that pushes you writing books and then help people write more books and then have a second season of Amazon prime helping you people writing books. And then sell more people writing books.

[Kiera Brinton]

Yeah. All right, this is my financial advisor in the front shaking her head. We got this. Julia.

[Alex]

Yeah. Julia's like, I've seen the financials on the book 1. Do more of that, right? No, but I want to hit on this one because I think I'm not really talking to you, I'm talking through to everybody else. I had these massive multi year plateaus where I just stayed stuck because I wanted to pursue every single thing. And so you have to trade novelty for loyalty. And so it's like you become loyal to the business. I also think that occurs with relationships. Like you make the trade, the new person every week, every month, every whatever for somebody that you know that you've built something meaningful that's deeper. Right. And I think that you, it's kind of like, I think business in a lot of ways is like a fine wine where like you understand it at a different level as the years go by and you go through different seasons. And I think that you miss out on that opportunity if you're going after, you know, one night stands in flings.

[Kiera Brinton]

From a business perspective, do you know my life. I'm just kidding, just kidding.

[Alex]

I know the wife earlier, that actually came out way wrong. But thank you. No, but like I, I, I'm, I'm, I'm keeping you up here because I just know that this is helpful.

[Kiera Brinton]

Thank you.

[Alex]

Yeah, you have to, but it's okay. Like life will not give you what you want if you want everything.

[Kiera Brinton]

Damn.

[Alex]

Like we, we have to make trades or we get nothing. And it's tough. And I think there was a big, at a big realization, I want to say a few years back where once I realized how much work it takes to make something truly great and something big, I had this moment of like deep sadness where I realized that I could only do a few things throughout the rest of my life, I was like, oh, I only have, like, two, maybe three entrepreneurial seasons left in me, which is kind of, like, crazy to think about. It's like, I only get two or three more big swings. That's it. And the real real is that if the swing just keeps going, which is what I plan on doing, acquisition.com, it's like, this is it. I'm going to do this until I get too old to do it. And that's it. That's all it is. Now what I want to do is give you something tactical. All right. Because we were all the way up here. So I'm going to make a video on this because I think it's really helpful, which is that you have to take your creative energy, and I have a lot of that, too. And you have to channel it into something that is accretive to the business, something that adds value rather than something that attracts value. And so what are the components of the business that need novelty on a regular basis?

[Kiera Brinton]

I think I can give you a hint. What?

[Alex]

Marketing.

[Kiera Brinton]

Marketing. I was just going to say sales marketing.

[Alex]

Lead magnets.

[Kiera Brinton]

Yeah.

[Alex]

Like, so if you want to build and you want to create. I have the same itch.

[Kiera Brinton]

Yeah.

[Alex]

I put all of my add into content. I've become a significantly better entrepreneur by making content because it distracts me from fucking up my business.

[Kiera Brinton]

This is legit. I just wrote a book about. I just wrote a book about when leaders get bored, they just fuck it all up and burn down the city. And I just keep doing it over and over.

[Alex]

So instead, just, like, just paint the city. Just paint it. Don't destroy it. Just paint a different color.

[Kiera Brinton]

Got it.

[Alex]

And so that, like. And that goes for everyone. Like, my. My add, like, I put it into ads. I put it into, like, the reason I write books is mostly for me. Like, Layla's like, can you just write another book? Because she's like, you're just getting into all of these things that you should just not get into. Right. And so the thing is that when I am in writing mode, the business does exceptionally well because I do so little. Yeah, Right.

[Kiera Brinton]

Feel this.

[Alex]

Yeah. I don't normally talk about this, but I think this feels incredibly relevant. So this is going to feel real for you and everyone else. So let's imagine the business like, everyone's revenue here represents this. Like this. This line, your revenue. Not aggregate, but, like, they'll say, that's your business. That's normal business. That's happening. What I realized, this is me. So this is anecdotal, is that whenever I decide to make a change in the business, I see about a 20% decrement or decrease in performance from whatever that changes. So I change a sales process, I change a lead nature process, I change an onboarding process, I change something that I have to train people up on, something new. Now, even if that change is something that I think is superior, I'm still going to have an immediate decrease in performance. Now, if I assume this to be true, which in my experience, it's been about 20%. So if you're like, what's the data research behind it? It's Alex doing this, all right? Now if I think that this improvement is going to make, let's say, a 5% improvement in the business, like I think so, you know, improve our closing rate by 5% or something like that, then I'm going to take a guaranteed 20% loss for a potential 5% increase. Bad trade. Now how many months is it going to take me in order to make up for the 20%? It's going to take four or five months, right? And it's going to. Now here's the really fun thing is that on an alternate timeline, you have this thing, but when you leave people alone, they tend to just get better at their jobs. So you'll get the 5% improvement. And so what's happened is that I've actually created this rule, which is that if I don't see a risk adjusted 20% improvement. So let me explain what I mean by that, which is I need to see a 40% improvement that I think has a 50, 50 shot at happening for me to make any change at all. And so I have a list right now. It's Alex's big list of ideas, which I encourage you to have. And I have it. It's on my phone where every time I think of something else that we could do to improve this business, instead of messaging the team and saying, hey guys, emergency meeting, we're going to do this, this is such a great idea. I just write it down and I just keep living my life, okay? And every once in a while I'll have one where I'm like, this is actually a 40, 50% potential move. Then I'll go to the team and say, here's my reasoning behind this. And then they'll say, cool, you have four other 50% return moves that you've told us about in the last 30 days. Is this better than those ones? And then I'll look at it and be like, no, it's not better than those ones. And so then I'll keep it on my list. And in the event that the entire team has bandwidth and they're all breathing a little too easy, then I can go destroy their worlds. Right? But what's ended up happening is that my businesses have improved so dramatically by me just saying, let's just let people do their jobs. And so I'm going to be crude yet again just to emphasize this point, which is that I have grown to accept that some shit stays fucked. And so there are tons of things about the experience that you guys went through today. Hopefully it's been really positive between yesterday and today. I hope it has been. The team was great, but there's probably a hundred things that I want to improve about it. But every time I want to go improve one of those things, four others drop. And it's not worth the cost of change. And so most of us just don't factor in the guaranteed 20% decrease for the potential, which we're usually overly optimistic on. I think this will be 40%. But then after it's all said and done, it's 5. Was that worth it? No. And so hopefully this is not, you know, this is not. I'm not just talking to you. I see a lot of heads nodding. This has been one of the most useful razors that I've used as an entrepreneur, and it has made all of my business significantly better. And so tactical takeaway for you is, number one, channel your add into the stuff that benefits the business by being creative. Number two, make a list of all your crazy ideas when they come up and don't tell anyone about them. And if it seasons for two or four weeks and you still think about it, it's like, maybe when you go to the store, you're like, maybe I'll buy this dress. I don't know. I'm just pretending to be a girl for a second. And then you decide not to. And it's like, if you still think about the dress a month later, then go back and buy it. But in the moment, if you buy it, then it's usually a terrible decision. And so it's the same thing with this. Put the list down, sleep on it. If you're still thinking about that idea a month later, it probably has some legs, right? And then number three, if I am going to pull something off of my big list of crazy ideas, it better be worth it, because I'm going to absolutely detonate a bomb in my business and it better be worth what's going to happen when the dust settles.

[Kiera Brinton]

Wow. This was hard for me to hear and, like, everything I needed. Thank you.

[Alex]

Cool.