← The Game with Alex Hormozi
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- [00:02]
Alex Hormozi
The other piece that I will tell you that is worth writing down is that we need to be reminded more than we need to be taught, and that it goes double for your audience. Maybe some of you guys watch some of my content. You've probably heard me say work more before. And yet when you see the seventh video of that in a slightly different context, it's like, well, I kind of wanted the reminder.
- [00:23]
Colton
Please help me welcome Author of the.
- [00:25]
Alex Hormozi
$100 million offers leads and soon to.
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Colton
Be money models, Alex Horbozzi.
- [00:32]
Alex Hormozi
How are you guys doing today? Good. Good morning so far? Yes, very tactical. Awesome. I appreciate that. So I normally do a little bit of a preamble, just kind of top of mind stuff. I feel like it's more common that we will keep our goal the same, but then be unwilling to change ourselves to accomplish it. And then we just stay on the same path when we know we should probably be doing something different than we currently are. It's just something I'm thinking about. I heard the last bit of you've got a bunch of stuff that's in your way. It's like, well, if you had to accomplish the goal, you'd probably do something a little bit different than you are. And I think rather than saying, you know what, the path I'm currently on will never accomplish my goal, we kind of mentally masturbate to the idea that we have this goal, but our actions don't align to it. Just because it's very easy to say and much harder to do to change you. So you don't change your goal. You also don't change you. And so you just stay there basically doing nothing. It's just something that I've observed on a continuous basis. And in having a lot of these discussions, I've had kind of the unique benefit of seeing the common mistakes that are made as business owners kind of at all levels. And they are thematic, meaning they're very strategic in nature, less tactical, because a lot of times, like for sure, tactics, we can help you with all that stuff. But the big things that move the business are going to be the decisions that sometimes are just left unmade. And typically that is what slows the decision down more than anything else. And so right now you probably have some decisions you need to make, and the amount of time you choose to deliberate can take weeks, months, years, and sometimes you just never make the decision. So you stay the same. And so I see a lot of businesses stuck in those places because there's typically rock and hard place scenarios where you either choose short term pain today or long term pain persistently. That's just slightly less painful than the short term pain, which is why I think people get stuck in these ruts. And so just by show of hands, who here is in around the same revenue they were last year? Okay, keep your heads up. Would you guys like to change that? Yeah. Okay, so these are kind of the seven rock and hard place scenarios that I see with founders in general. The first is focus. I talk about it a lot. I have, you know, a laundromat, a real estate business, an E commerce company, like whatever. Right. Like, and they all somehow work together. But like, let's be real. No they don't. I mean, just in that they have customers and the customers have money and money, you know, combines all the businesses sort of. But for the most part it's like you need to pick one thing and go all in on it. The difficulty is that when you have, quote, two businesses or more than one business that's kind of live at one time, the short term pain is that you're going to see a dip in revenue because you're going to lose the revenue from the one that you choose to give up. So you either have that or you have the long term persistent, not achieving of goals. The next one is over expansion. So this is the classic, like I had one location, it was doing well. And so then I opened up a second location and I took the best person from my first location, put it over there. My first location dropped to here. My second location didn't get up to my first one. And that pretty much destroyed 2/3 of my margin. But now I have 2 times 1/3 of the margin. I'm making about a little bit less than I was before with two times the liability. And so I think the solution is I should open up a third location. Right. Which whenever, like to be clear, every business needs to expand. So how are you quote over expanded? It's easy to say that, but the reality is that you're just under talented, meaning that the team that you have is just not sufficient. If you had two rock stars or somebody who's better than you at the first location, then it'd be fine for you to open up the second one. But it might be a model issue or a cash flow issue that prevents you from getting the talent that you need, which ultimately is what's keeping you stuck. So in this situation again, what do you do? Do you kill the second location? It's like, well, that kind of hurts. On the flip side, it's like, or do you just give up all of your profit for a year or two in order to get somebody else in? Also a risk. So what do you do? You just stay the same because it's easier. The next is compensation, which can be over or under. So I'll give you an example. Physical therapy clinic came here doing really well. Full, all the beds were full. You know, all the therapists were staffed up. Just wasn't making any money. And so, you know, after a couple questions, it was like, oh, well know I do a rev share with my therapist. I was like, oh, okay, well how much? And she was like, well, 50%. I was like, okay, well are they like kind of like a hair salon? Like they just rent it, you know, rent a, a chair or room and then they handle everything else. She's like, no, I, I spend the money to get customers. I close them. I out for the facilities. I'm the one who cleans everything. They just show up and do work. And I was like, well yeah, you're running the entire business on half your margin and there's just nothing left. Right? You know, that's an example of a compensation issue. Another one, very common is underpriced. I bet over half of you guys are underpriced. And I think the reason there is again, it's the same rock and hard place scenario. Well, under compensation, under priced, equal side of the same coin. Once for employees, one's for customers. But if I tell my staff that I have to change their compensation, I'm going to lose my team. But if I don't, then I'm never going to make money. Underpriced. Same, same. If I raise my prices, then I'm going to lose my customers. But if I don't, I'm not going to make money. Let's see what is my s here. Ah, thank you. Single product, which is like you have a business where you have one thing, that's it and you do that thing relatively profitably, but over time your margins continue to shrink. And so then you're like, well, I guess I should just start another business when maybe you just need to sell those people something else. Having a backend. Next one is Avatar. This is again classic heart, rock and hard place. Well, I have to accept everybody who has a pulse on a credit card. Really, the pulse is optional, but I have to accept these people. And if I don't, I won't be able to make payroll next month. But I do need to get more narrow and more focused on my services and who I'M servicing and the messaging around it and the pricing that goes with it and my actual delivery. But if I do that, I'll lose money in the short term. Right. And so then we stay again in this rock and hard place scenario. And this last one was the last one I added to this list, which is data. There's not really a rock and hard place scenario here. More so that I guess the rock and hard place is you need data, but the resources and time it takes you to get data you're unable to do because you don't have data. And so you're like, well, how do I expend the resources to collect the data and forego my short term goals of putting out fires and growing? It's like, well, you can't grow because you don't have the information to make the bets you need to make. So these are just kind of seven recurring themes I've seen. I saw a bunch of you guys nodding your heads as we go through the the Q&As. I will do one of these so that, you know, we can kind of beat in on it together. With that being said, let's rock and roll. I'm guessing your yoga clinic instructor, the doctor. Yeah, I should have gone with doctor. That would have been better. Yeah.
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Tony Cooper
So my name's Colton. We sell tattoos to tattoo clients. Doing about 4 million in revenue. I'd love to be at 35 million in revenue. And what's stopping us is focus. So we've got multiple parts of the business. Stop me if you've heard this before. We do the tattoos. We also have continuing education for other tattoo artists. And what I was alluding to earlier, I've started to get into coaching studio owners and things like that. And so Ed was talking about maybe doing something like Gym Launch for the tattoo industry.
- [07:16]
Alex Hormozi
Yeah. So, yeah, so normally I wouldn't recommend doing something like Gym Launch because Gym Launch was a unique situation. It's actually similar to tattoos in that probably tattoos actually been more in that direction because it's so dependent on the skill of the operator or the artists that are in each shop. Unless you are absolutely like mechanized it so it doesn't matter if anyone's good. Like there's a hundred tattoos that everyone gets. I don't know. Is that true? No, not. Okay, yeah, I don't know about that part. So what's the goal?
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Tony Cooper
Goal is to have a company that I can exit.
- [07:46]
Alex Hormozi
Okay, so you want to exit. So this, these are conflicting. Very, very tough to exit a business that's like that it was unique for us and very difficult to do that. Mostly because it's very face driven and so people don't typically like unless it just over time becomes, you know, Jim, launch became its own brand. That it was like I stepped out the back door for almost two years leading into the sale where I wasn't involved in delivery or even last 18 months for the, for the ad side. So you can do it. It's just significant. Significantly harder than you might expect and profitability will take a hit. But let's outline the decision paths. So you have number one, go into the kind of information, et cetera, space. Very difficult to sell. You will make more money in the short term. The second option is that you just continue to grow corporate and build a large brand and then that will for sure be easier to sell when you come to sell, but it will take longer to get there. I don't really think there's an option three. So which of these sounds more tasty to you?
- [08:39]
Tony Cooper
It all sounds good to me. The only when I'm thinking about scaling the studio side of things, I would need a lot of studios, which is just a lot of personnel. It's like 20 people per studio, you.
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Alex Hormozi
Know, so I mean Panda Express has 2600 locations. Yeah, that's true. Yeah.
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Tony Cooper
I mean I'd really be happy with.
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Alex Hormozi
Any of them, I think. Well. Well then which one are you going to do?
- [08:59]
Tony Cooper
So should I not do gym launch for tattoos?
- [09:01]
Alex Hormozi
I don't think you can. It's like that's one. The thing is, is that either way, you're going to have to shoot a kid in the head. Yeah, I know. Aggressive, maybe multiple. Well, it feels that way, I imagine. You know what I mean? It's like this spawn that you created and you're like, you made it in your own image, you know? Yeah. And it hurts. It hurts a lot. Has anyone here ever shut a business down before? Painful as shit. Like so much harder than starting one.
- [09:24]
Tony Cooper
Because I'm assuming to pursue one of the other options I'd have to shut the studio down.
- [09:29]
Alex Hormozi
Yeah, yeah, yeah. Now there's the narrative that you say, well, isn't it good that I have these studios that I can prove that I'm legit. Nope, nope. Doesn't matter. I owned exactly zero gyms when I had gym watch. I had six prior, but zero when I did it so that I could focus on gym watch. Yeah, makes sense. So which direction are you going in?
- [09:53]
Tony Cooper
I think, I think the educational or the tattoo studio owner facing thing.
- [09:57]
Alex Hormozi
So here's the thing you will make more money over. Like let's paint it out over 10 years, right? Like over 10 years you'll make more money every year. You just won't make as much the last year. And so there's a lot of romanticism around selling a company. And as somebody who has done it, I can appreciate it. But the thing is, I don't see one way as right or wrong. If you offered somebody, hey, would you like to make a million? Like when you're 85 years old and you look back, would you be happier that you made. I'm just making up numbers. $3 million a year in personal income for 10 years or basically made $100,000 a year for 10 years and then made 50 on the last year. In your 30s or 40s, whatever. Pick your. Pick your number. I don't know when you look back on it, like I'm. I mean it's 10 years of living. So I, I'm not as polar on. On the decision. It's totally personal. But if you do want an exit, then the corporate path is the way. If you want to make more money, then the gym launch version is probably a better path, which I don't normally say, but just because of how difficult it is to attract star artists and that being kind of the core of the delivery. I could imagine wrapping their model in something that you have and then ultimately what you'll have to weave in is the things that make it sticky. And that's why Jim launch was able to win because basically everything in education what makes it so difficult to sell and also honestly to run is that once someone has gotten your secret or your bag of tricks, then what you have to have consumables. And so that's one of the things that you know, we can help you with but like putting the consumables in there so that it does stick. And that's what's going to drive LTV long term. Putting the sales motion in place, all that kind of stuff. It's different but ultimately the that's going to make it work. Cool. Awesome. Thank you. Rock and roll. Thank you. Doctor of the year.
- [11:37]
Ricky
My name is Tony Cooper and I sell plumbing and air conditioning to residential customers. And I would like to. We're currently doing around. We'll pay some for 15 million this year and I like to be at 40 million. And what is stopping me is the chaos.
- [11:52]
Alex Hormozi
We.
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Ricky
I recently hired two new leaders from outside the industry and we went from 4 million to 8 million. 11 million. Pacing for 15 now.
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Alex Hormozi
Awesome.
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Ricky
The chaos. I'm worried about the overexpansion or just, just because we're making a lot of errors. Our, our profits are staying level and I expected them to go up, but we're not. We're growing top line and we're just flat. We're just chewing up a lot of mistakes.
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Alex Hormozi
Yeah. Why the aggressive growth pace?
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Rob Jenkins
It's actually.
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Ricky
I'm kind of bent more towards perfection and going slower. The, the guys that I hired are from outside the industry. They're. They're just top line revenue driven and it's almost like they, they would just keep driving it and it's working and I'm making more absolute dollars than, than I could have imagined when I first hired them. So it's a good thing. But I'm, I'm wondering if they'll be that or.
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Alex Hormozi
I mean, because you're netting 2, right? You're in 13%.
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Ricky
No. Yeah, we're netting about. You're at 14% right now. We landed last year 50.50.7 and we're like 16 something whenever, right at the 4 million mark. So we're staying flat net. But the gross dollar is coming to me. I'm the single owner. Everything's paid off. We're not acquiring debt to grow. So I'm stacking up money. But I'm just wondering if we're going to make a mistake that rams it backwards.
- [13:06]
Alex Hormozi
What are those guys compensated on net? And they're driving top line.
- [13:11]
Ricky
It's just how they're built, I guess. They're driving top line. And the guy that's the biggest driver, he really. I just, just in love with big numbers. He's come from the corporate world where they did hundreds of millions of dollars and. And that's what he's about.
- [13:26]
Alex Hormozi
Yeah. So your issue one is data. I'll bet unless you have real time gross operating margins on each of your product lines. Because by doing that you'll be able to drive EBITDA through the roof. And in your business, being tax efficient is actually super achievable. Do you have a good cfo? I don't.
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Ricky
No, I don't think we do. I would want more of that function. My background is kind of accounting as well, so I'm kind of a little bit lent that way.
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Alex Hormozi
Okay, are you. Do you want to exit it or what do you want to do?
- [13:54]
Ricky
I just want to grow it. I want a good running business that's just a cash cow and kind of a lifestyle business. That's what I want.
- [14:00]
Alex Hormozi
Okay, well, what if you Said our goal this year is to not increase top line at all and to triple bottom line.
- [14:09]
Ricky
Yeah, I like that.
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Alex Hormozi
I feel like, yeah, that's chill. Yeah, no, I like that. That would, I would be perfectly happy.
- [14:15]
Ricky
With 15 million and run 30% in that.
- [14:18]
Alex Hormozi
Yeah, yeah. Cause I mean if you're at 13, 14% or whichever one it is, if, if you're around there, I would for sure like you for sure. I'd be targeting plus 30 minimum. I, I don't pay much attention to industry averages mostly because like American averages is like fat, overweight and divorced. So like why would I care about industry averages? I kind of take the same position with, with most service businesses. I'm going to bet right now that you probably have some sales motion that can be improved and probably some pricing that can get optimized that would improve cash flow. Basically the sequence goes like this. It's like, okay, we have to look at the sales motion so that we can fix the pricing and packaging of each of the services so that we can generate sufficient cash flow so that we can get the talent that we need so we can shore up the infrastructure. And so that would probably be the sequence that I would do it in. And then I would set the year's goal. Like here's our four part plan. This is what we're doing for next year and this is how we're going to go from, you know, whatever two and change or three and change, whatever it is, to you know, six in ebitda. Fair enough. Congratulations on the business though. Rocking and rolling. Cool. My name's Ricky. I. I sell coaching to real estate agents. I do two and a half million in revenue. I say I. Well it's really I because hey, I'm a solopreneur, I have no employees. I. Everything's 100% organic. I'd like to double it. What's stopping me? That's a good question. Your boy Ed, he seems to think he's real passionate dude. You see, he seems to think I could be just super famous. Uh hu plan. He's like, you need a brand manager. Yeah. And so, you know, he's like, you need somebody that has already kind of achieved that with someone else, right? Yeah. So I guess my question is how do I find that person? Because 99% of the stuff out there is scams basically with totally that kind of thing. And I would even define them as scams. I just people that are not that confident, I think it comes down to deception whether they intend to deceive or just aren't that good. But back, back to your point. I agree. So fundamentally if you want to just make more money and you are a brand that promotes itself, then you need to advertise more. Are you constrained on your delivery? Delivery as far as the fulfillment? Yeah. No, it's group coaching. It's easy. So you could double the amount of customers you have right now and it was quadruple. Yeah. Okay, well then yeah, I mean this is a pure advertising play. You probably, I mean I'm, I'm interviewing sales guys and I'm looking at paid ads. Like hiring people. Yeah, that. So like I'm getting into that. Yeah, the paid side is going to give you call it like a 1 time, 3 to 5x off of a baseline, not a promise or guarantee. Just saying like that's, that's what I would say is kind of typical. If you've gotten to this point off of just organic, obviously we can help you with that stuff. But like the long term, kind of like, well, that you need to keep digging is you want to so think about like this. So you have just imagine this as your audience right now you're monetizing these people, right? The people who are just like super hot, they love you forever and you continue to promote and you know, this gets filled up with new eyeballs and then they come up because they see your stuff and then they give you money. Yay. Right. When you start doing, if you do more organic and do it across more platforms, do it more consistently, do with higher volume, do with higher quality, that we're going to do is you're going to grow this, this base, this percentage will stay about the same, but now it's going to go to here. Right. So then that dollar sign goes up. That's a great long term play. And you just want to keep growing the pyramid. What ads will do is that ads will keep this the same and then it'll move this line down. And so you want to do both. So like in the short term, if I was like, how do I like double your business? It's like that wouldn't be that difficult. I would just be like, cool, just pull the ad lib where it's done. But if we're looking at a ten year horizon, then I would say, well, we need to do both of these in parallel. We need to continue to plant the seeds and then the ads kind of reach off the top and skim. That makes sense. Yeah, for sure. So how do you find an ad manager? I mean, I mean, I mean, I mean a Brand manager. So that's good. Yeah. The best thing, I mean I just. We just poach. We just, I mean just outreach. Hey, you've crushed it with so and so can I pay you more to do it here? Right. And sends to where I get you? I guess. How do you realize who those people are to poach? Like who look at the brands that you admire and then reach out to them and offer them more money to do it for you. But you see the brand, but you don't really know who's behind the brand. LinkedIn, like Frankenhoe, like. Yeah, solvable. Gotcha. For sure. Solvable. Yeah. I mean, and most of the people who are really good at media stuff do have some presence anyways on their own, so they don't make themselves invisible. Like, you could probably change ChatGPT search. Who are the people who are involved with that? Here's my question. Like, like, is that something that could be outsourced? You mean recruiting? No, no, no, no, no. Not the recruiting part. Like the like the brand manager part. No, I wouldn't recommend it. Yeah, bring somebody in house. It's the thing is what are the. So what are the core things to the business? So for every business you have attraction, you've got conversion, you've got delivery. Right. Those are the things that are core to every business. IT recruiting, finance. I see all of these functions as ancillary that aren't core to value creation for the customer. There are things that must occur for the business to continue to be a business, but not things that are core for the value to be created. And so for you, your brand is arguably the most important asset that you have and for sure would not be something that I would outsource. So bring somebody in house working directly for me. Yeah, I would poach somebody. Obviously we've done, we've hired a lot of media people, you know, with that. But beyond that, I would probably, if I'm doing order of ops, it'd probably be. Because the thing is, is right now are you selling, you're sewing, who's doing the sales? Well, so I do it in a challenge. Okay. It's the only time I offer it. You know, you do one to money, one buy a day thing. Something like that. Yeah. Okay. And so I'm gonna switch to book a call. I'm a single sale guy. And do it on a recurring kind of evergreen basis or still do it in this long run. I'll do it both, I'll do both. Yeah, but. Okay, but you're selling straight to Checkout. Got it. Yeah. That motion, as soon as you turn on ads is going to break in all likelihood because it's totally different selling to cold than it is to to warm. And so the break, you will not convert the same percentage. I really do. Yeah, no doubt, no doubt, no doubt. By a lot. And so the whole, the whole, the economics of the entire funnel will change. And so that'll take some adjustment in motion. So just more like preparing you for that. Cause that's what comes next. Yeah. So high level recruiting for brand manager, that's going to start building the base and then ads plus sales motion are going to have to come in tandem because they both have to be good. The ads have to be good and the sales motion has to be good. If the ads are great and the sales motion sucks, it won't work. If the sales motion is great and the ad suck, it won't work. Cool. That makes sense for next step. Yeah, yeah. Go to LinkedIn and poach somebody. Got it. I highly recommend Outbound for high level roles. By the way, like your stars. One, already have a job and two are not looking on Craigslist. That answers one of my questions 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 course 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, once you answer 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. Bingo. My name's Austin. I am a chiropractor. We do right around 2.4. Been stuck there for five years. Like to get to 3.6 out of the swamp stock or growing over five years. We've been at 2.4, five, five years. Yep. And so I don't know what's stopping us. I'd like to get out of the swamp. Heard. And then profit margins, you're at 30%, right? Yes, sir. Yeah. Okay. I'm receiving 600,000 as a profit number, if that's still. Yep. Accurate. Okay. Okay, so you have 600,000 in profit, and you and a partner, you're 100%? 100%. Okay. Well, what. What do you want to. You just want to, like, what do you want to happen? Do you want to, like, what do you want to do? Do you want to go to many locations? No, I want to. I want to grow Main. Big location and, you know, create a space for family to eventually. I mean, grow in there. If they're. If they don't want to do that, then that would probably change my goal to be in an exit. Okay, standpoint, what's your square footage? Right now we have 7700. Okay. So decently large. Yeah, we occupy about 4700 of it. Okay, got it. And so are you at capacity within the space right now?
- [22:47]
Chris
No.
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Alex Hormozi
We used to have a supply issue till about two weeks ago, and then we hired another doctor. So now it's become a demand issue, and that's where we're at now. So how do you get customers now? We. Our highest is referral. Then we get about the next highest would be paid ads through Facebook. What percentage are ads? We do probably about 20% from ads. About half is from referrals. Another 20% is from Google. Okay, so you separate meta ads from Google Ads when you talk about ads? Yep. Okay, got it. We don't actually currently do Google Ads, but that's where they said they came from. Herb. Got it. Which I would probably see as word of mouth, like, I Googled you or Googled something. It's probably SEO, something like that, but okay. Okay, so two and a half million. Like, what stops you from just spending more money on med ads? Trust that we're doing it right. Are you making more money than you put in? Yeah. Well, so you might have one of daily eyes, which is that we need. We need attribution tracking so that you can know if you're putting a dollar in and getting $5 or $10 or $20 back out. We have no clue. But as soon as you have the attribution tracking, because fundamentally, what you lack right now is an input output equation for the business to grow. And so every business needs to know what are the core actions that I do that increase how much money I make? And if you can't define that for the business, then for sure as shit. Your employees don't know what it is if you don't know what it is. Right. And so for you, if you are not supply constrained and you're demand constrained, that means lead generation is the issue. If lead generation is the issue, what's the activity? The activity is going to either be, I'm going to be making content, I'm going to be getting affiliates that are going to be promoting my shit for me. I'm going to be running paid ads. Right. Those are going to be kind of like the bigger buckets that you're going to be going into. And then you got people who do those things on your behalf. And so right now do you make content? Yes, sir. Okay. What percentage comes from that? We just started it about two months ago. How much do you do? I'm not going to tell you to do more, I'm just curious. We do four videos that gets created into short and long per week. Four videos for the month and. Okay, yeah, don't. Yeah, okay, got it. Okay, so you've got four longs and you chop this into little shorts and things like that. Okay, got it. All right. So short term, long term, short term, we got to get the data tracking in place. Second step is going to be the ads funnel in place and kind of like what the sales motion is behind that. For local, the good news is that it's easy to do because there's already so much trust locally that you don't need to have nearly the complexity of kind of like the funnels and indoctrination and education prior to someone making a purchasing decision. You can pretty much just like one call, close two, two conversation close anybody. Even at very high ticket numbers, which is one of the benefits of local. The downside of local is that you've got a market that's this big. Correct. That's the downside. Right. So if you don't want to expand markets, then you need to dominate the market you're in. And so it's going to be a multi prong approach. And it's kind of like I was saying earlier, like we're going to start with ads because that'll just get you more in because I'm guessing right now if you have a good reputation, a good brand, then the ads will actually help you more than they would help somebody who doesn't have that footprint. But then we're going to start probably layering in the content as the second kind of the. Well, that needs to continue to get dug again. This is going to be long term and so you're going to want to be a thought leader. And then what happens is that if you can, if you can succeed at building the brand long term, and it sounds like you're more long term guy, so I will, I'll speak in these terms. What happens is your radius actually continues to expand. And so if you're taking to the natural extreme, you can go to the Amen clinic in New York or whatever. I think it's in New York because they have a national reputation, but people fly there. And so that's how, that's what it looks like as you continue to expand the brand because people would just be more willing to travel to you and pay premium prices, which I'm sure if we looked under the hood, the prices probably get tweaked too. But like those are some things. And if you're in the swamp, cash flow is actually the biggest thing that you need. And so again, the pricing and packaging is probably like again, if I was to do order of operations, pricing and packaging would probably be number one. So we could free up cash flow. The freed up cash flow we'd then funnel into the ad so that we could get, well, data attribution. Then we'd put the ads in place, putting flow through there. And then the baseline that happens after that is we're just going to increase the cadence on the, on the content that demonstrates thought, your leadership. That's the path that makes sense. Thank you. We're having trouble also hiring good high quality doctors in Wyoming. It's actually ladders have been the first problem. Cash flow. We need to fix the pricing so that we can generate more cash flow so that we can pay doctors so that we can actually get the business to not rely on you as much. Appreciate you. Thank you. Yeah, happy to help.
- [27:00]
Rob Jenkins
Hi, Alex. I'm Rob Jenkins.
- [27:01]
Alex Hormozi
Hello, sir. Hey.
- [27:03]
Rob Jenkins
I'm a 25 year recovering attorney. I have a very specialized practice.
- [27:06]
Alex Hormozi
So sorry. My condolences.
- [27:08]
Rob Jenkins
We serve as an officer of the court for judges throughout Texas. About 1400 judges, 250 counties. The our revenue currently is standing at 15 million.
- [27:18]
Alex Hormozi
Okay.
- [27:19]
Rob Jenkins
74% profit margin.
- [27:20]
Alex Hormozi
Okay.
- [27:22]
Rob Jenkins
Based on a proprietary piece of software we developed, I'd like the revenue to get to 20 million. It's a nice round number.
- [27:28]
Alex Hormozi
Me too.
- [27:29]
Rob Jenkins
It is progressing that way for both of us. It's progressing that way. So what's stopping me is we have conquered the market in Texas. We are number one by a large magnitude, number two, three and Four combined still don't do what we do. And so we're about half of the entire industry in the state of Texas. So where we are now is this crossroads of we have solid relationships with five of the seven whales that could possibly exist in Texas. And the whales being the law firms that ask the judge to appoint a receiver. We have relationship, like I said, lockdown relationships with five out of the seven, there's two that we will choose not to serve.
- [28:08]
Alex Hormozi
Yeah. Dicks.
- [28:09]
Rob Jenkins
So we just don't align.
- [28:11]
Alex Hormozi
Yeah. Our values come out again.
- [28:14]
Rob Jenkins
So we're kind of at this crossroads of do we go to another state or as kind of came from yesterday's discussions, perhaps I go out and do some whale hunting and bring some new whales into Texas. And so. Meaning find other national big, high volume law firms that choose not to do business in Texas because Texas is a tough state to practice in. And so it's really that fork in the road of what makes more sense. We're a single business building operation outside of Dallas. We cover the entire state with our.
- [28:50]
Alex Hormozi
Our ability.
- [28:50]
Rob Jenkins
So we have massive efficiencies.
- [28:52]
Alex Hormozi
Yeah.
- [28:53]
Rob Jenkins
We are tight. I have a Rockstar team, three of them there up front on the front row, versus going into unchartered waters.
- [29:02]
Alex Hormozi
Yeah.
- [29:02]
Rob Jenkins
And saying, all right, well, we did it in Texas, we can do it in Oklahoma.
- [29:06]
Alex Hormozi
What prevents you from doing Oklahoma?
- [29:08]
Rob Jenkins
It's never been done there. There would have to be a tweak to the law. The legislation might need to pass. So there's a two year journey to pass a law to make it more available.
- [29:17]
Alex Hormozi
Okay.
- [29:18]
Rob Jenkins
But the good news is the, you know, one of the particular wells we have in Texas is saying, hey, come to Oklahoma. We're already here. We need this remedy here.
- [29:28]
Alex Hormozi
Yeah.
- [29:28]
Rob Jenkins
But my natural inclination, based on efficiencies and processes and systems that are in places will figure out how to do what you're doing here bigger. And so I'm kind of in that fork.
- [29:38]
Alex Hormozi
Yeah.
- [29:39]
Rob Jenkins
Which mountain is worth climbing?
- [29:41]
Alex Hormozi
What's a great. I was. You even used the analogy I was gonna. I was gonna use. So the good news is that both ways will get you up the mountain. And I think one of the things that I used to get. I'd lose too much sleepover was obsessing over which path when both of them lead you up. So then I would end up deliberating for way longer than I should have because I wanted to find the perfect path rather than just knowing both of them will take me up. And so that's allowed me to make big decisions Faster, just as a overarching frame. The second thing with regards to the actual decision. So when I think about something like this, I think, okay, how do I maximize the risk adjusted return on this move? Right. And so if I call a whale up. So you have five whales that you like. Are there any other whales that you like that are not those five that you have relationships with?
- [30:22]
Rob Jenkins
Not in Texas. But the idea is there are. You know, there's firms out there that do eight states, they just don't do Texas. And so not a lot of cost into pursuing. Hey, let me encourage you. Let me tell you what Texas can hold for you and try to get them to come to us.
- [30:37]
Alex Hormozi
Is there? And you would know this. Are there laws that prevent you from kind of doing a joint venture or something like that with a whale firm so that the EU is an exclusive?
- [30:47]
Rob Jenkins
It is critically important that I am independent.
- [30:50]
Alex Hormozi
Okay. Yeah, yeah. Hurt. Yeah. Because otherwise I would have been like, you could put a very big, you know, check on the table for them to get there, which I guess you could still do, but you'd have to have no agreement. Like they could just take the money obviously, and then not send it to you. They probably still would. But as, as a, as a risk consideration. The thing I don't like about that one, my big hang up, which might be yours, is I just don't want the growth of my business relying on somebody else opening their business and doing a good job. Whereas I'd rather go where the fish already are. So if Oklahoma has a two year delay, I mean, that is a pain in the ass. But are there other states that don't have a two year delay?
- [31:25]
Rob Jenkins
That's just the most logical first step.
- [31:27]
Alex Hormozi
Because of the one whale geographic.
- [31:29]
Rob Jenkins
I mean, it's literally our north.
- [31:31]
Alex Hormozi
Yeah.
- [31:31]
Rob Jenkins
And we already have a relationship with the Texas whale that is in Oklahoma saying, please come here also.
- [31:37]
Alex Hormozi
How much business does that represent, though?
- [31:39]
Rob Jenkins
That's the big question is it's unknown.
- [31:41]
Alex Hormozi
Because you're doing Texas and you're at 15. Right. Oklahoma is way smaller by, you know, headcount than Texas. And this is one of five. So it's like if we had one fifth current revenue, you know, you're at three. And that's of Texas slice of pie. Now, whatever. The Oklahoma slice of pie goes from three to less than three. Exactly. And like to me, I'm like, I don't know if I care.
- [32:07]
Rob Jenkins
You nailed it. Yeah, that's really a big piece of. It is, you know, the growth piece of Great. We can take on Another state. And of course Texas could lead to Colorado and Colorado. But you're talking about, all right, you just added 10 more percent revenue.
- [32:22]
Alex Hormozi
Yeah, incremental for sure.
- [32:23]
Rob Jenkins
But now you have something else dragging and on your brain at 9 to 3 in the morning, you know.
- [32:29]
Alex Hormozi
Yeah, I'm with you. So then what stops you from going to New York hypothetically? Like if you, if you operate remotely, fundamentally within the business? Like what. Why does if, if it's another state, is another state, is another state, do you need to be local in order to do it?
- [32:43]
Rob Jenkins
Some of it has to do with the laws that are in place.
- [32:45]
Alex Hormozi
Yeah.
- [32:45]
Rob Jenkins
You know, this remedy that is a Texas law based remedy makes sense in Texas because Texas protects wages and you can't do wage garbagement. It protects your homestead. We can't force you to sell your house. It, it has a lot, you know, it's, it's considered the second toughest state in the nation to recover unpaid debt in or judgments end. So we come in as a tool that works. And so there would be just a handful, I would estimate three to four states where this would make sense.
- [33:14]
Alex Hormozi
Okay.
- [33:15]
Rob Jenkins
It's a matter of, is the view worth the climb? Is adding 10, 15% more top line revenue worth taking my brain, my overthinking brain to Oklahoma?
- [33:26]
Alex Hormozi
I would say this will actually be fun. I'm going to do this because it'll apply to probably half the room because this is a really cool fundamental decision. So bear with me. This will be a little bit longer, but you'll hopefully like it if you don't, don't tell me. So let's say that this line represents normal revenue of the business. In my experience, I've noticed that I get a 20% decrement or decrease in performance whenever I change anything about the business before any kind of gains can then get accrued from whatever that change was supposed to bring. And so I see this as my guaranteed cost of change, no matter what that I have to pay. And so what's ended up happening after observing this over and over, over again is that number one, if I'm going to take a guaranteed 20% cost, then I'm not going to take a potential for a 20% gain on a guaranteed 20% cost. And so for me to take a 20% dip, it's like I need to see 50, maybe a double in the business. For me to be like, okay, this is worth it. And so what ends up happening is that I think this can, I'm speaking to everybody else, but you get out of this constant desire to tweak everything in your business and drive your employees insane. Because you always have a new idea every week. And they're like, well, just did this other one. Because what ends up happening is you're like, well, this thing's going to net well. You're like, okay, well, what if this does net me 20, I should still do it, right? Okay, sure, let's play that out. But the thing is, is that this week you're going to think of something else. You're going to have another 20%. And so people actually have, like, persistently, far below potential businesses that are operating way below what they should be, because we just constantly are changing shit. And so to ladder back to what we were talking about, my question would be, what state can generate the same amount of revenue as Texas? None. None. Okay. You have to grow the pie of Texas. So you have two, two growth paths, right? You go from 40 or 50% where you're at now to 70, 80%. So it's like, what monopolistic levers can we employ so that, like, we can starve everyone else out? Which then just increases the value of the business a ton, which is awesome. And so there's share of pie and growing pie of Texas. And if none of the other states really make this feasible, then I think that probably answers that, at least in the short term. So I don't love the. I have to get other people here as my growth path. And so it's like, number one, the thing that requires the least amount is increase percentage of pie. Number two would be increase PI percentage or. Sorry. Yeah, PI percentage. And then number three, if I've done both of these things well enough, then that might already be, I mean, for sure getting your 20. But then it's like, okay, I'm going to look at New York. I'm going to look at some of these other. Other states that might have opportunity that's still not as good as Texas. But I have truly tapped this, and that's probably the order of operations I would do it on. So then solving for the constraint of, okay, why do these other 50%, why are they allowed to breathe? And then how do I take the oxygen out of the room would probably be my approach if I were swapping places. Love it. Thank you. Yeah, appreciate you. No, thank you. Congrats on the business. Very cool. Yes, sir.
- [36:26]
Dylan Larson
My name is Chris. I sell welding accessories to welders. We do 1.7 million revenue. I'd like to be at 10 million in revenue. What's stopping me is I feel like demand has plateaued and we have about 300,000 followers on TikTok, and I was wondering if you.
- [36:42]
Alex Hormozi
That's amazing. So you're doing this on from TikTok.
- [36:45]
Dylan Larson
TikTok is our main channel that kind of got things going and then we had a Shopify store.
- [36:50]
Alex Hormozi
Yeah. But I'm just still amazed. Thank you. Yeah, TikTok has just the worst monetization of audience, so kudos.
- [36:56]
Dylan Larson
I was wondering if you think it'd be worth trying to double that audience from 300,000 to 600,000 or jump into another channel like Amazon is what I was really considering.
- [37:07]
Alex Hormozi
You were seeing Amazon as a channel.
- [37:08]
Dylan Larson
Like as a means to sell more things.
- [37:11]
Alex Hormozi
Well, so. Okay, hold on. So are you saying I have such limited resources that my decision is I can either list my stuff on Amazon or I can make more content? Is that what you're saying? You said go from 300 to 600 on TikTok, right? Yes.
- [37:28]
Dylan Larson
Make more content with TikTok. The thing. I made videos for about a year, just every day. I was trying to make like good original content. And over the past few months I've been experiencing a lot of burnout. And I think that's what's kind of made me interested in looking in other avenues of.
- [37:44]
Alex Hormozi
Yeah.
- [37:45]
Dylan Larson
Selling my shirts.
- [37:45]
Alex Hormozi
So this is, this is like awesome. I'm really glad you asked this question. You have to reverse engineer you. So what are the things that you actually like doing?
- [37:53]
Dylan Larson
Making content.
- [37:54]
Alex Hormozi
But you're burned out though, so. Yes. Yeah. So is there a type of content you enjoy and other types you hate?
- [37:59]
Dylan Larson
More educational content? I like. I like educated educational content because I feel like, yeah, when I post it, people can come back to it anytime. And it's kind of crazy.
- [38:10]
Alex Hormozi
What stops you from making that?
- [38:12]
Dylan Larson
Ideas, like coming up with good original ideas. I feel like it's hard and like, I know they say just like post the video, like no matter what, but sometimes when I look at it, I'm like, man, like, that could be better maybe.
- [38:25]
Alex Hormozi
Yeah. So I, I don't think you should just do this other random thing for no reason. So if that, if that, if you want that initial answer, I can give you that one right away. I think that the long term play for you is figuring out how to make the content that you enjoy so that you can keep making it. And so it's either you like the stuff you make or you capture yourself doing things you already like. Those are kind of your options. And then the rest of it is just pain tolerance. That's fair being real and to be fair, going from season to season of content creation. Like you'll probably notice, many people, myself included, like, the nature of my content shifts over time. And it's for the same reason, which is that, like, I have to give myself permission to do whatever I want because there are no rules and no one's, there's no content police that's going to come arrest me if I don't make a video today. And they're not going to arrest me if it's not algorithm optimized. I'm just going to make what I want to make and that changes because I change and I focus on different stuff. The other piece that I will tell you that is worth writing down is that we need to be reminded more than we need to be taught and that it goes double for your audience. Maybe some of you guys watch some of my content. You've probably heard me say work more before. And yet when you see the seventh video of that in a slightly different context, it's like, well, I kind of wanted the reminder. And so it's not like you're disserving the audience by reminding them of something they want to be reminded of in a context that is slightly novel. And so I think one of the big burdens that creators or people make content put on themselves, that they believe that the content has to be as novel for them as it is for the audience. And it is just not true. Dave Ramsey has been answering I'm broke questions for 35 years. Stop spending the money you make. That's it. That's it. That's. That's what you got to do. Right? And then everything else goes up. That's how it works. World's shortest content piece. But the thing is, is that it's the nuance of this unique situation. Well, there was a girl who won a lot. I mean, I've seen multiple lottery winner call ins to Dave Ramsey. Have you seen this? Like little clips of him? I've seen multiple. So you think, oh well, we can't make another lottery clip. We've already covered what to do with lotteries. It's like, well, that was a $22 million lottery. This is a $2 million lottery winner. What's different now? Well, this guy has a wife who hates him and this guy doesn't. Now what? Well, the answer is stop spending so much money. You get where I'm going with this, right? Yes. So if you weld stuff and you like making cool projects, the nice thing about your business, it's super visual, so it's so made for making content around, which is a huge advantage. Whereas if you like, teach stuff, you have a big box of intangibles. It's like for me to demonstrate client finest acquisition, not nearly as fun or cool as you welding some shit. Never. That's fair, right? I also follow a handful of gym equipment accounts. Like, that's probably one of my hardcore side hobbies. I will look at reels of the same piece of equipment 30, 40 times until another one comes up. And it'll be 31 or 41 times. Right. And so I think you underestimate how much your audience might just like your shit. And then you just be okay with posting today's version of that thing. So just keep Dave Ramsey top of mind. And part of the reason that he's been able to make the content for 35 years is that he enjoys doing it. And so it's just find a format that you like and then figure out all the algorithm bullshit around it to make it, you know, all nice and clickable and all that, all that kind of jazz. But I'd say start with you and kind of reverse backwards and then long term, that's what's going to build it. But was that really the core problem? I just, I wanted to answer that because I know that probably affects a third of the room. So. Yeah.
- [41:49]
Dylan Larson
Now the other big problems that I've kind of realized being here, Data. Like, I don't know my numbers, like I should. That's a big thing that I've realized. Focus.
- [41:56]
Alex Hormozi
You run ads.
- [41:57]
Dylan Larson
Big thing. And that's like you're saying, like, we need to be minded more. That's. I think coming here and just having that laid out has helped a lot.
- [42:04]
Alex Hormozi
Do you run ads?
- [42:05]
Dylan Larson
Yes, we do. Google and Met ads.
- [42:08]
Alex Hormozi
Okay. What percentage comes from that versus organic from TikTok?
- [42:13]
Dylan Larson
It's probably 50, 50, I'd say.
- [42:15]
Alex Hormozi
Okay, interesting. Got it. And so what stops you from just running more ads?
- [42:18]
Dylan Larson
I've talked to my marketing guys about it and they say we've saturated the mark. Not like that. They say we just want to, like, trickle up slower. So we're planning on spending more leading into the holiday season.
- [42:30]
Alex Hormozi
Okay, cool. I agree. Spend more. I appreciate it. I know he's not the only person who's dealing with that content issue. As a side note. Yeah, shoot.
- [42:41]
Chris
My name is Derek. I sell real estate advisory services to C Suite execs and business owners. I do about 1.2 right now, and I'd like to be at 10.
- [42:51]
Alex Hormozi
You're running like 60% margins, right? Like 700 or so, like profit.
- [42:54]
Chris
As an example, the guy who repped you to buy this building, that's like what I do. So my, my hypothesis in Seattle. I'm in Seattle suburban market in Seattle doing 1.2 hypothesis. I'm moving to Phoenix next year, so I'll be, I'll open the office in Phoenix. I much larger.
- [43:09]
Alex Hormozi
Tam.
- [43:09]
Chris
I want to hear your framework about how do you think about customer acquisition strategy for C suite execs in a brand new market where you don't know anyone?
- [43:18]
Alex Hormozi
Yeah. So how many people do you have working under you in Seattle?
- [43:23]
Chris
I have one guy.
- [43:23]
Alex Hormozi
It's like, are you concerned at a.
- [43:25]
Chris
Meeting for meetings for me?
- [43:26]
Alex Hormozi
What for? Okay. Are you concerned that your revenue in Seattle is going to drop?
- [43:30]
Chris
I'm starting over.
- [43:31]
Alex Hormozi
So you're cool. Just, you're like this is going to zero.
- [43:33]
Chris
It's more like lifestyle too.
- [43:35]
Alex Hormozi
Okay, heard.
- [43:36]
Chris
Okay.
- [43:36]
Alex Hormozi
Yeah. So well then what'd you do to get the first one point?
- [43:40]
Chris
Brute force calling and emailing one to one.
- [43:42]
Alex Hormozi
Yeah, well that will do.
- [43:43]
Chris
So like, yeah, for sure. But 0 to 1. But how do you think about from 0 to 10 in a brand new market? Would you change that strategy up?
- [43:52]
Alex Hormozi
Yeah, if you're going for high level people, then it's going to, it's going to be more outreach driven because most high level people are going to get everything from referrals or for meeting people in specific, you know, arenas. Yeah, yeah. I'm just being real. I'm not responding to a meta ad for buying this building. Right, for sure. And so.
- [44:11]
Chris
And you don't pay that.
- [44:12]
Alex Hormozi
You don't pay out of pocket.
- [44:13]
Chris
I mean the landlord or the seller pays my fee. So like the customer itself isn't paying.
- [44:18]
Alex Hormozi
For my services or you do, you do renters, Is that what it is?
- [44:21]
Chris
Tenants. So like.
- [44:22]
Alex Hormozi
Yeah, okay. Sole renters. Yeah, yeah, yeah. That is actually kind of interesting. I remember. Yeah. Now, now it's coming back to me. Yeah. Unique model, only focusing on tenants. Tenants and buyers. Yeah, yeah. Oh, but. And buyers. Yeah. Okay. And buyers. Okay, got it. What percentage is tenants?
- [44:35]
Chris
Landlords.
- [44:36]
Alex Hormozi
Yeah. What percentage is tenants versus buyers?
- [44:38]
Chris
Oh, in this market with interest rates, it's like 80 or 90% tenants.
- [44:42]
Alex Hormozi
Okay.
- [44:43]
Chris
Buyers.
- [44:43]
Alex Hormozi
Interesting. Huh?
- [44:45]
Chris
And I do industrial in the office building.
- [44:46]
Alex Hormozi
So. Yeah, like, yeah, I'll, I'll say this. If like that specialization is kind of unique, at least I haven't. And I feel like I get solicited constantly and so you're not getting beat.
- [44:57]
Chris
On by a commercial real estate broker's problem.
- [44:59]
Alex Hormozi
I mean not really zooming all the way out. You go into a new market, right. It's like you got to either be face to face, networking, et cetera, like conferences, meetups, like pounding the pavement. V1, V2 is outreach just digitally. Right. Which if you have some organic following that can help or you have to go true cold outreach on LinkedIn, things like that. That can work for sure. Again, volume. The ad strategy. I think because of the unique angle that you have, I actually am more okay with it given it's like if you just lean in on the tenant side, I actually think you might have a better shot because it just feels unique rather than like I have to buy these buildings, you know, so that. Because if you're like I. I am a specialist at negotiating leases for commercial buildings under these conditions, then it's like you're niching down and that messaging could pull someone who otherwise would like. I have multiple brokers that I use. Yeah. But I currently don't have a. I own all my shit. But like if I didn't then I would, you know, I would probably be responsive to a message like that. So I think I would probably just from a speed perspective because I'm guessing you have cash from. Right. I mean your margins are good. So I would probably start with ads first. No. And I would do the rest as though ads don't exist. But the ad strategy would be probably one of the primary things that I would want to crack in the new market because otherwise it's going to take you however long it took you to do it the other time. How would you.
- [46:23]
Chris
80, 20. I mean from. From cold outreach to ads. What's that disparity look like?
- [46:28]
Alex Hormozi
Yeah. I don't normally recommend doing more than one thing. Yeah. My only exception is for local because local there's just. It has smaller. You just have to just hammer market. The thing is, is that ads don't take a tremendous amount of time. Yeah. I basically would want you to spend call it a hundred to $200 a day in local ads. And your primary priority is to work the shit out of those leads and get the sales motion in place. Yes. And in the meantime, you do the normal playbook. Okay. So it's like this is my guaranteed path, this is my fast path that I'm willing. I'm spending this money. Right. Right. To learn to get it, to crack it. That would be my approach. Now the good news is that there's plenty of realtors who are super Successful running ads in local markets, platforms.
- [47:12]
Chris
LinkedIn obviously.
- [47:13]
Alex Hormozi
No, I mean I think like again I like the super niched messaging so I would actually be more willing to. I mean I LinkedIn for sure, but I wouldn't be as opposed to a meta strategy given that unique angle. Just being generic. Realtor number six. No, no chance. Yeah. Right. Okay. Real quick.
- [47:29]
Chris
And then decommoditizing my service. I guess I already had that kind of specialty so that probably helps.
- [47:34]
Alex Hormozi
I would be showing before and afters. You know, this is what the tenant was originally offered. This is what we're able to negotiate. This was the difference. Just I would be.
- [47:42]
Chris
I thought about a guarantee. You know, landlord offers this if our. If where we end up is 20% less than that or not. I'll rebate my fee kind of deal. The landlord paid fee back to you. Yeah, but it's like.
- [47:54]
Alex Hormozi
Yeah.
- [47:55]
Chris
Tough to guarantee that when sometimes it's 8% savings, 10% savings.
- [47:58]
Alex Hormozi
I mean I would probably go with dollar amounts if you can. Okay. And then only take projects over X. Right. That way you could probably. It'll. It'll. Because you want to anchor to the biggest number you can. And that would probably be how I'd approach it because percentages get eaten up real fast and going from like if it's less than 5, it's like that's not impressive. But if it's like I'll save you 50. But it's like over a six year term. It's like, okay, that I did save the money. It's just backloaded and then. Right. So I'd rather anchor to the big number. Okay. Appreciate it. Thank you. 100%. Congrats by the way. Alzy. Hi Alex.
- [48:29]
Colton
My name is Dylan Larson. I sell beef protein chips to athletes and outdoor enthusiasts. We do about a million or in revenue we want to be at 12, want to be doing about a million a month. Up to this point. Up until this point we've been severely what I've identified as supply constrained. We've been in the supply chain purgatory for a while. I say a while period of like six to nine months. Trying to find a manufacturer that's going to make our stuff or because we decommoditized away from jerky, didn't want a price race to the bottom. Changing their lineup a little bit dissuaded so many of them. So we finally found one and we're working through that right now.
- [49:12]
Alex Hormozi
Okay, so what else is distracting you?
- [49:15]
Colton
The approach. Now that we've unlocked the volume, this new manufacturer can do about 20,000 units a month, which will get us to about 280,000amonth in revenue.
- [49:25]
Alex Hormozi
Okay.
- [49:26]
Colton
At that point, he has a proprietary machine that can spit out a tray of our product every 12 seconds. But that machine is too large for his facility. So we would need to kind of come together and find a solution and a location to employ that. Or the alternative option, which I think is the ultimate end state anyways, would be to stand up our own facility. Understanding the timeline, the red tape.
- [49:51]
Alex Hormozi
How much does the machine cost?
- [49:53]
Colton
I didn't think about buying it from him.
- [49:55]
Alex Hormozi
Yeah. And you could buy it used. Okay, so basically, how big are your dreams for this business? Large. You want to get to 12, but you want to do beyond that. Do you want to be a big brand?
- [50:03]
Colton
Yeah, absolutely.
- [50:05]
Alex Hormozi
Yeah. Well, if you want it to be a big brand, then owning the manufacturing for something that is novel or different is probably a good idea. The issue is obviously cash flow is that you're super constrained right now. I'm guessing a couple things. If I were to like, one, there's probably a renegotiation of terms, if I absolutely could, to just increase my. My payment. So, like, can I be net 30, can I be net 60, etc. That'd be the first thing I would look at. We had a company I was looking at investing in just taking turn. Like we just really hardcore negotiated. Went from net zero to net 90, and then the company went from 2 million a year to 5 million a month in 18 months. Not a promissory guarantee. Just saying the second thing. Okay, so one is cash flow from a terms basis. The next one is, what's your influencer game?
- [50:47]
Colton
Oh, well, right now we're heavy in the CrossFit space. Very heavy. And we were able to secure his name. It's Austin Hatfield. He's. He has a high, high likelihood of podium at the CrossFit Games and, you know, a shot at winning. And so we contracted his head, and so he's. He's our primary influencer right now. So we're kind of pumping everything into him, and we got a couple more athletes like that. And then we do everything else through podcasts and on the unscripted live reads.
- [51:13]
Alex Hormozi
Got it. You don't run any ads then? It's all organic? No.
- [51:16]
Colton
Yeah, we just kept hitting the inventory ceiling, trying to solve for that and.
- [51:20]
Alex Hormozi
Okay, so right now you have a double sitting in front of you that you think you can hit with the guy's existing capacity. Capacity.
- [51:25]
Chris
Yeah.
- [51:27]
Alex Hormozi
How many months of that do you need in order to save up enough to buy the machine with terms and lending.
- [51:33]
Colton
Oh, I mean, not that.
- [51:34]
Alex Hormozi
Not that many.
- [51:35]
Colton
Not that many.
- [51:36]
Alex Hormozi
Okay. So I mean, I think that you're spelling out kind of the plan, so meet existing volume requirements. I also, it might be worth leaning into selling out because then you can just kind of pent up some demand in the. In the meantime. So that's number one. You can also do pre orders to do that.
- [51:53]
Colton
We did before, but we just. We ended up letting go of another manufacturer just a couple weeks ago because they. There's the whole nightmare. QA dropped, everything wasn't on time. So we were technically sold out, you know, for this last month. And we got the team together rented. We just kind of flew by the seat of our pants and solved the problem. So we did the sold out play. And I'm sorry, I forget if that addressed your question there.
- [52:15]
Alex Hormozi
You're good. I was just trying to pull cash forward. Okay. So we have. We have our terms. I think you can use pre orders as a mechanism. You have your existing volume that you think you can hit these new volume caps that are twice as big. Cool. So that. So the three of those things bring you cash flow forward. Then it's. Where are you at?
- [52:30]
Colton
Based out of San Diego and the manufacturers in la.
- [52:32]
Alex Hormozi
Interesting. Okay, well, yeah, ideally you'd be central, so then you could get our 3pls in Georgia.
- [52:38]
Colton
So it doesn't.
- [52:39]
Alex Hormozi
Okay. Okay. So yeah, then you can. I mean, I still just hate California stuff, but yeah, you can. Then you could basically open up the facility there. I'd still hate that. But. But you do live there, right?
- [52:51]
Colton
Originally from Montana, so that's probably a more appetizing location. But if we.
- [52:56]
Alex Hormozi
Much more appetizing.
- [52:57]
Colton
It sounds like if we, you know, scale into this. This guy's volume, we're able to acquire the machine from him then.
- [53:03]
Alex Hormozi
Or just from whoever makes the machine. Right.
- [53:05]
Colton
It was a proprietary. He assembled a bunch of things together.
- [53:08]
Alex Hormozi
At least he says. So. Yeah.
- [53:09]
Colton
And then grab the own the. The new facility that we would own and then inject that machine to it.
- [53:14]
Alex Hormozi
Yeah, it'd be interesting. Like, the machine is a big question mark for me. Like, I would call up a couple of really good machine guys and say that this is my partner of marketing and roll in and check the machine out and be like, all right, how proprietary? Because we might find out it's like, you know, a $75,000 machine that has, you know, $25,000 add on that they're pretending is $400,000 a good friend of mine was in the machine business, murdered it. They were. You know, they're doing 70 million a year selling machines. The average cost they'd sell machines for was, like, 400 grand. Cost them 17. Yeah. So, like, printed, destroyed. So I say this because, like, again, I mean, a smart machine builder prices off of value, which is if I, you know, I replace your entire workforce that cost you 2 million for 400 grand, it's a steal. And if it just happens to cost me 20 grand to build more for everybody, Right? So I would. I would really lean on that because there's. There's probably a big delta there. Because the core of your business, if it really is this proprietary thing, that machine right now is the core defensibility that you have. So knowing everything about how that thing works is everything. Because if you're, again, like, we have to take this to natural extreme. Let's say we hit that, okay? Then we have this machine, and then we build it out. It's like, well, we're gonna need more machines. And that's the only thing differentiates us from everybody else. Then it's like, that actually is a huge point of leverage for the business. And so getting as much intel as you possibly can on that so that you can ultimately grow. Got it. Thank you. Yeah, you bet. Rock and roll. I should have prefaced this earlier, but I. I try to answer the questions in a way that it, you know, obviously affects more than one person in the room. Whether it's, you know, should I do this business or this business? Should I, you know, go to a different state? Should I buy the machine, you know, for. For Meats? Do I need to expand the brand? How do I go, you know, how do I go about doing that? If I'm at 15 million and my margin isn't what it is, and we've been going like crazy, should this be a year to prune the tree and get it so that we can then set up for our next year of expansion? Like, these are all everyday business problems that affect more than just the people in the back of the room. And part of the selection that we do is we try and have different questions that are representative of more people's problems than just one. Rather than like seven people in a row, they're like, I think I need to grow my brand. With that being said, so we gave a talk on basically maximally converting an audience to our sales team. So this is something Vincent and I put together. One of the big reasons that I stayed at between 30 and 40 million a year for like, three or four years of my career was because I didn't understand how to convert the widest percentage of an audience. And so Benson's gonna go through a talk that kind of explains our thinking around this. So you can maximally convert as many people as you want within your given target market. Business owners. Quick question. Can I get your email address? Because I want to send you a gazillion dollars of free value in my next book, $100 million money models. Okay. Who here read one of my other books? Yes. All right. Was it worth reading? Yes. Okay, so August 16th, this book comes out. It is the crowning achievement. I've been working for years on it. And on top of that, every single person who shows up live will get a product I've been working on for not one, but two years that is better than an nft, less than a bitcoin. And every single person who shows up will get one. All right? And it will be for sale afterwards. So this is not. This is legit. All right, so click register. The event's absolutely free. I've got five. Five mystery headliners. And out of 10, what would you rate the last two books? Can I get some fingers? Hell, yeah. All right, so you're not going to miss it. Click Rich, and I'll see you there. All right, thank you guys so much. I appreciate it. Back to Benson.