And you guys register for the book launch that's coming up.
Did anyone notice a little checkbox on the opt-in that said like, I want a VIP ticket or something like that?
Okay, so that created an absolute 16% increase in sales.
The checkbox did nothing. It changed nothing about the process. you didn't see a different page.
If you checked off a box saying you wanted a VIP ticket, you were more likely to then on the next page when we said, want to be a VIP, buy the VIP thing.
And so the pre-framing is so powerful that the questions that you ask have absolutely a huge effect on the likelihood of someone taking the purchase when they get the option.
All right, please help me welcome the author of the $100 million series, host of the game, Mr. Alex Ramosi.
Thanks. Thanks. Good morning? Yes? Super tactical?
Okay, good. Teams great, aren't they? Really good?
Yeah. As I think about you guys kind of going home or getting on the plane, getting the car, getting the Uber, getting the hotel, wherever it is, you probably have a lot of notes from yesterday and today, right?
The thing is, is that most of the time there are many good ideas that will come to you now and tomorrow and weeks from now, but you have extremely limited resources. in terms of your ability to execute those.
And so that comes from limited time, money, and then also just operational capacity the talent that you have that exists within the business.
And so making sure that you select the highest return opportunity is will dictate how fast you move as a business owner.
And I think that that has been responsible for the disproportionate speed that Layla and I have been able to grow the companies that we own.
And so I'll bring this point up, but I've had the distinct pleasure of answering a lot of business owner questions over the last few years.
And there are basically seven deadly growth sins that I've seen consistently recur within businesses.
And I think they are, quote, deadly sins because they are decisions that have two apparent shitty outcomes.
And so the result is that most people just choose not to make them and then they stay stuck until they do.
I'll outline them briefly. But as we go through the questions, I'll do one of these like pointing exercises.
So I'll be like, which one do you think this one is?
And I'll encourage you to go through the short term pain to avoid the long term pain of never growing your business.
So the first is avatar selection. And so this happens when you're like, well, I have these high end clients and I've got these low end clients. and I hate one of them, whichever one it is, right?
I hate one of them, but I need both of them in order to continue to pay my bills. but I need to focus on one of them in order to continue to scale the business.
But if I pick one, then I'll lose money or I'll lose team or I'll be negative or I'll be not profitable.
And if I don't pick, then my business will never grow.
That is one quagmire. Another one is data, which is there's some big decision I need to make.
There's data that I need in order to make it, but I don't have the resources to collect the data.
It's like, okay, well, what are you going to do?
Won't go. You got to get the resource to collect the data.
Otherwise, or you just, you take a shot and you just make your best, bad guess.
But the thing that you can't do is just not decide.
The next is Focus, which is... Yeah, I have a bakery.
I also have a lacrosse team, but they kind of work together because I sell pastries to my lacrosse team.
That's why I have two businesses. I'm actually trying to create an ecosystem an all in one stop right for anybody who's looking to lacrosse with croissants.
Maybe that'll be a thing. I say this jokingly, but I literally had a yoga studio chocolate factory like two months ago and I was like, what are we doing here?
She's like, I'm trying to build a platform.
I was like, you were trying to build a headache.
So you will not sell me on your idea of why you are the best entrepreneur in the world who somehow can manage to do two things when no one else can.
You're not Elon. If you were, you would be Elon.
The next one is overexpansion. And this is what it looks like, but what it really is. is under talented.
And that's not under talented necessarily just for you, but your company, your team.
And so like a business, it's fine for a business to go from two locations to three locations, two locations, five locations, whatever, right?
One product line, two product lines, that's fine.
The problem is when you do that with the same team as you did when you had one.
And so if you take your good person in location one and put him in location two and say, now I'm expanding.
It's like, no, you're just over expanding.
And then now your location one will go down.
And now I have location two that's not as good as location one, and both have come down.
So now I'm actually making less money than I did with one, but I have twice the liability, twice the headache, twice the overhead.
A little PTSD, a couple head nods, right?
So of course, the answer from there is to open a third.
And so I say this because people say this.
Don't do that, right? But again, in each of these situations, you have rock and hard place.
When I've got two businesses, I got to shut one of them down.
That's going to hurt. But if I don't shut them down, then I'm never going to grow.
I've got two locations. Do I downsize? But I just put all this money in that sunk cost fallacy.
But if I don't, then I'm going to feel like a failure.
But if I stay at this, I'm just going to keep not making money.
Next one is compensation. So some of you guys have And this happens on both sides.
I have an HVAC company and I can't recruit technicians.
And I say, okay, well, what do you make on a technician?
They say a million dollars a year in gross profit.
And I say, fine, what do you pay technician? a hundred grand.
I'm like, okay, well, would you pay 200 grand to make a million dollars?
And they're like, well, yeah. I'm like, okay, well, why don't you pay 200 grand to get the technicians?
Well, like undercompensating, right? I'm supply constrained, but you're undercompensated.
That doesn't make sense. So raise what you're paying people so you can get them in.
On the flip side, you have, um, the alternative where it's like, hey, I can't grow my company because we're not profitable.
We're fully, you know, fully staffed. We're full capacity.
But we were making no money. And it's like, why is that?
It's like, well, I pay all my employees 50% of revenue.
It's like, well, that'll do it. that'll do it.
And so it's like, what do you do? Well, if I change the comp, then I'm gonna lose my employees.
If I don't change the comp, I don't make money.
It's like, well, you got one of them, you're fucked forever.
One year is fucked for a Heck, the problem is that most people don't want to be, because the thing is, is almost all of these, the right decision is the one that's worse today.
The next is under price. Sorry, that's supposed to be a U, just it's an ugly U.
There you go. Underpriced. Super comment.
I bet a third of you are more just underpriced in the room.
Probably more, maybe 50% are underpriced.
And I was actually thinking about this this morning for those of you following me on X.
Service-based, can you raise your hand if you're a service-based business here?
There we go. Well, 78% of businesses in America are, so it's, you know.
Loaded question, leading the witness, anyways. only one direction that you go throughout your career if you're doing a good job, which is your prices go up, that you can pretty much mark your progress by your price.
Because if you get better at what you do, then you will get better results for customers.
If you get better results for customers, your reputation will go up.
If your reputation goes up, you also get better at selling. if all these things happen then you will eventually get supply constrained if you get supply constrained what you do you raise price and so if that isn't happening then one of those other three wheels isn't spinning so So we have to fix that.
But basically, you should be pretty much just always raising your price on a consistent basis that outpaces inflation.
And that'll be a good indication that you're making progress.
The only exception to that is if your entire strategy is to be a low-cost leader, which some of you guys are.
Like, I have an outsourced agency that's all VAs and AI.
And we do what normal people do for $1,500 a month and we can do for 500.
Okay, fine. That's the strategy. But unless that's the strategy, the price should probably be going up.
And then finally, I added this one after a long time, also because it made my ad focus easier to remember. which is single product.
And I don't necessarily have an issue with a single product, but if you have LTV as the primary bottleneck in the business and you're like, Hey, I've got all these customers, they're not worth enough. and they buy this one thing, it's like, what if we sold them something else?
Not to say we started a lacrosse camp to sell to our bakery customers, with our bakery customers instead of just selling croissants?
Like, what if we also sold doughnuts stuff that's not going to be operationally complex that can still dramatically increase LTV, which then could offset the amount that it costs us to get customers so that we can then de-bottleneck growth in the business.
So with that being said, creative agency doing $5 million a year that wants to be at eight that is stuck because of I didn't hear what you said.
How are you going? I just want to say quickly, we've flown 14 hours from Sydney to be here.
Four of us mates. We've been following for years.
And all my bloody questions have been answered by your team.
Oh. Without you being bloody in the room, is anyone else the same?
Can we just give everyone a big clap for that?
Thank you, man. No, I really mean it. It means a lot to be here.
Let me pause you then. Real quick for everybody.
The biggest gift I can probably give you in terms of breaking a belief is what you can see or demonstrate more than what I can say.
And maybe some of you guys met the team and was like, I understand why they make a lot more money than my team does.
Right. And so it's like, oh, well, if I had this team, I could scale my business.
It's like, yeah. That's the point. It just took me a really long time to realize it too.
And so I promise you that the best talent you have is in the future, not in the past.
Go ahead. Yeah, so to your framework there, we've been severely underpriced.
But my question for you actually is, because I've got so much to execute from your team, it's actually here and here.
It's like the more ambitious I've got, the more successful I've become, the more numb I've become.
Sure. know with that so if you had a kpi for your soul yeah what would they be and how you're tracking Knowing me, because you probably consumed enough of my content to know that I would probably not be like, this is how I define my soul.
I would say that when I look back on the days that I remember and enjoyed the most, I had three things that occurred, is that I worked out with people I liked.
I ate with people I liked and I wrote something down.
And if I do those three things, I tend to have good days.
And so for me, my goal is a lot simpler, which is how do I maximize the number of days in a row that I have that have those three things occur?
And so I think soul can be incredibly amorphous and really tough.
And that's when like manifestation and synchronicities and and vibrations and energy and all these words that people throw around that no one can define.
Well, I mean, they try to define them. They just fail.
Anyways, I just try to define things by the observable universe because everyone can agree on those things.
And so for me, I know the days that I can say, this day was a good day, I can rate this above average, fine, subjectively.
And from there, what are the things that occurred with the highest frequency on days that are subjectively rated good?
How do I maximize the likelihood that those things occur?
How do I do that on a consistent basis? And then what happens is if you define creativity as mistakes that happen while copying, which is how it happens in nature.
That's how creativity and innovation often occur.
Like you keep iterating, keep trying to copy something and then you fuck up your own copy and then it ends up better and you're like, and I have potato chips.
This is awesome, right? If you do 100 days in a row of your best day, you will then also add nuance to that.
So because it used to be just work out, eat healthy food and write something down.
But then I had other days. So it's like, well, these days I didn't just eat healthy food.
I ate with people I liked. And so it starts adding to that little framework for yourself.
And I think for me, that has maximized my enjoyment.
And I'll give you a quote from Sharon, who's now our president, which is pretty cool.
He said in his 20s, He cared about the destination in his thirties.
He cared about the journey and his forties.
He cares about the company. And so I think that that has been a really good framework also, because like, For anybody here, and I won't judge you for saying this, like, fine, I'll hedge it a little bit.
Are there days where you hate your business?
Okay, most of the heads nodded. I think that you decrease the likelihood that those days occur if you surround yourself with people you really like.
And so even though you might hate what happens in the business, you might love the people you do it with.
And I think that takes a lot of the shittiness out of it.
Awesome. Thanks, man. That was an easy one. that's how we go from five to eight million done thank you how's it going good um first of all i want to second that your team is badass and it's really inspiring because now i'm like this is Someone said, you know, you have to have a goal, at least just have a goal.
And that's my goal is just to build a team like this.
Obviously there's a stepping stones. You didn't just start that day one.
My name's Preston. I sell restaurant operations consulting to restaurants, to restaurant owners.
Um, we do about, we're on track to about 3.2 million this year.
Um, we, I want to hit 10 by the end of the year.
Um, what stopped me is my, yeah. I'm on track.
Give me some hope here, please. Um, and, uh, what's stopping us is a sales process all the way from messaging.
Do you have demand? Yes. Do you have more demand than you can handle?
We have more demand than we can unlock. Okay.
Do you have $10 million of demand you can unlock?
I absolutely think so, yes. A hundred percent.
But yeah, the problem is unlocking it. Like I tell my team all the time, like we have the demand, we have the attention, the shares, the saves, the comments, all that stuff is all there.
Um, but it's a messaging I think is a problem in, in, uh, in the marketing and in the sales process.
Like that's, that's a problem, the price point.
I know you guys gave me a lot of hope because you're saying, Hey, restaurant or a gym, uh, gym owners make like 32,000 a year.
Our pro product is this much, but we have this, this, this tactic.
We have the same problem, right? Restaurant owners, small markets.
Yeah. So that's what's stopping us. Okay.
Those four things. So you said your messaging is off.
Yes. How do you how do you know that? Because you guys might hear a really good framework for solving problems.
So I've also done a lot of this. And so what does that mean?
How do you know that? Why should I care?
Logic, evidence, utility. So you said something like our messaging is off.
What does messaging mean? This is why I define terms.
So people don't know what I'm selling, right?
They want something from me, so they're booking a call, but they have no idea what I'm offering or how I can execute it.
Okay. So when I would say, so that's what, that's what it means.
I would then say, how do you know that? So the way that you would answer that question would be some sort of quantitative measure, which would be like 80% of our calls are unqualified.
That would be a way to answer that question.
And then I would ask the question, why do I care?
Now you might say, well, I think if we could sell the other 80%, then we'd make more money.
I would then ask like, well, is it a sales constraint?
Can we just kick all those people off the calendar and fill it up with the 20% for the rest of it?
Like then we kind of have the discussion.
Okay, so you're saying messaging is off.
So are people who are coming on the call unqualified?
No, they're qualified for the most part, but they're like, they don't know what we offer.
So the sales process becomes much more challenging because they're coming in thinking like, Do you come into my restaurants?
How does this work, right? So we have to bridge that gap.
Are you working with us after this? this?
I'm trying to, you should, you should like, this is a sales motion.
Like we do this in our fucking sleep. So it will not make any difference in my life.
I promise. But make it to my life. There you go.
So fundamentally, you've got your demand that's coming in, right?
This is an eyeball. It's really ugly. But basically, what we have to do is take them through an indoctrination process prior, which will probably create some sort of video sales letter here.
We can help you with that in terms of the scripting.
And then the questions themselves should reverse and engineer the sale.
So I'll give you guys a little tidbit and you guys register for the book launch that's coming up.
Thank you. Did anyone notice a little checkbox on the opt-in that said like, I want a VIP ticket or something like that?
Okay. So that created an absolute 16% increase in sales.
The checkbox did nothing. It just checked, but there's, it changed nothing about the process.
You didn't see a different page. It's just if you checked off a box saying you wanted a VIP ticket, you were more likely to then on the next page when we said want to be a VIP. buy the VIP thing.
And so the pre-framing is so powerful that the questions that you ask have absolutely a huge effect on the likelihood of someone taking the purchase when they get the option.
Same thing with the VSL for a lot of you guys having some sort of video sales letter or information.
Like if you're getting too much traffic, which it sounds like you are, cause I'm guessing organic is your primary way.
Yes. Right. So you have all this traffic's coming in.
You need a filtering function that qualifies in a good way because there's bad friction, which is like, i could put a wall up and no one can get through or like my page is really slow that just gets everybody turned off good friction gets bad people away and good people in And so having qualifications, which I'll give you guys a rule of thumb that has yet to be proven wrong in my history,
The more good friction you add, the more money you make and the more expensive the contacts.
Meaning if you run ads, for example, to get sales calls, If I say this thing costs $10,000 and you have to have cured cancer in order to get it, my cost per call will go up, but my ROAS will go up even more.
So I might double my cost per call from 200 to 500.
But my my return might go from 3x to 6x. even though I'm more than double my cost per call.
But with the secret sneaky one is that your sales efficiency will double or triple.
And so that means that you can close way more deals with a smaller team, which creates less operational drag and allows you to scale easier.
So to answer your question, you had four issues.
One you said was messaging. One is going to be the sales motion itself, which is then going to ladder into pricing, right?
What was the fourth one? Or is that just the fourth one was, you know, you, you have like a, you guys had like a, with the, with the gym owners, right?
It was like, here's how we get there. Yeah, you need a fast cash play.
Yeah, yeah. So fundamentally, most fast cash plays operate off of the existing resources.
So most business owners have dead contacts, old customers, some sort of list, or even just an existing social media profile that has some level of followers.
And so basically a lot of business owners don't allocate resources where they could get the highest return.
This is fundamentally why they don't grow.
Like if somebody else were taking over a business and then all of a sudden the business grows, it's because the guy who was running it isn't allocating attention and resources well.
Right. And so that means that they have resources that are untapped or underutilized that you can help them appropriately utilize quickly. so that they can make the cash to pay you.
And so that would be just a campaign that you would probably test out really early. with a handful of beta users, and then you would include that as basically the first part of the onboarding.
And so by doing that, it's like, you can make the sale and then immediately pay for yourself within the first 30 days, which is like always my goal so that I always want to operate off of like found money.
Like I never want someone to pay me money I haven't already made you.
And I've pretty much operated that way my whole life.
I'm just curious. The problem we have is that we give them the blueprint.
We build it out for them one-on-one calls in the first month.
We really try to do that. Right. And that doesn't do the results.
So they get bleep, they get bought in and all that good stuff, but they don't take action. and that's the biggest problem we have.
That's gonna be an incentive thing, carrot and stick, in terms of how you incentivize that.
Like you can give bonuses or discounts that they unlock.
If they take hit quality action, you can make guarantees contingent on three actions.
There's a bunch of things you can do to structure that initial offer that, again, will factor into the application, the sales motion, and then ultimately you take as the first kind of activation point within the business.
So take the fast cash and then tie it to, you have to do these things.
Yes. And all of that gets reversed all the way to the front.
And just out of curiosity, do you actually enforce that?
Is there a way to enforce it? Or are you just kind of- 100%.
Okay. Yeah. Because that's the hard part we're seeing.
Yeah. Okay. I mean, state the facts and tell the truth.
Be upfront. Okay, cool. No, 100%. Thank you.
I know that affected more than just his business.
I usually say this up front, but I try to answer the question so that it's not just one person answering because I know that the problems are usually shared by more than one person.
Yes. Hey, Alex. My name is Mike Frusciano.
I sell corporate training to B2B, B2C. We do right under about 2 million revenue per year.
I'd like to be at 10 million with about.
You said B2B and B2C, you mean companies?
So corporate training. Yeah, to businesses.
Oh, B2B then. Yeah. Okay, got it. Okay, so B2B.
Okay, got it. Yep. And then B2C consumers, just individuals.
So we do both. We do corporate training for companies and we do open enrollments across the country. that individuals can sign up.
Interesting. Okay. Got it. Yeah. And the corporate training is around what?
For communication. It was like getting presentations.
How to employee. Yeah. Heard. Okay. We'd like to be at 10 million here about two and a half years.
And what's happened to me is really our sales process.
And my question is, as a growing company with limited upfront cash, How do you hire top A talent to attract and bring somebody on that can drive sales? but expecting a good revenue.
I want somebody to make a lot of money, but how do you do that with really a limited cashflow?
What in models or things that you've seen work?
I can give you the answer you want or the answer that's true.
The answer that's true is if you hear like, John Paul DeGioia, you hear Elon Musk, you hear Bezos talk about the early days.
I mean, the reason that founders get disproportionately compensated is because we have to do more jobs better than most people for an extended period of time. to make up for the debt that the business has to incur.
So basically, every business always incurs debt, period.
The question is what type of debt you want to incur.
And so you can incur financial debt in the beginning, which would be that you take on capital and then you go and find the all-stars.
And then by doing that, you don't incur the operational debt, the talent debt, the data debt, the tech debt that you have to do that you have to make up later.
And so fundamentally, you want to take on the debt that you can most easily pay back.
If you're bootstrapped, then you're choosing not to take on financial debt, but you do actively take on talent debt, you take on infrastructure debt, you take on tech debt because you can't do it all as a founder.
And the alternative to that is that you can give away equity in the business to attract a better player without the necessary cash comp.
And then part of that's still going to be levered on your skill set because they're going to be betting on you to a large degree of like, I would rather have 10% of this guy's thing than a hundred percent of my own thing.
Cause I think this could go places. And so the long story short of what's margins right now, 20% ish.
Okay. So you have 400,000 in free cashflow, which is basically enough to hire like one good person.
Right. That's a stud. And so you're like, okay, so I can just risk all of my paycheck to have one good person and they might not work out.
I mean, and this again is why we get disproportionately compensated for when we win. is that we make bigger bets and we take bigger risks.
And so the choice is you take the bet on the person who you sell using your skillset, who can help you grow the business. or you work third shift, you increase the revenue and the cashflow so that now you go to 2.5 and you can pay 300 to get somebody who can actually drive growth.
And then like you basically work overtime to afford the guy so that he can then work more.
And then all of a sudden you get lift off.
But the cash flow is kind of like the oxygen for the business.
And to be fair, this is actually what the whole money models book is about. which is like, is there a way that we can recombine the money-making variables in the business so we can accelerate cash flow, get customers for cheaper, get them to pay faster, get them to pay more, so that we can decontrain the business from a cash flow perspective so that we can grow Either that means scaling ads or a scaling team or talent or infrastructure.
If it's, you know, physical, obviously like manufacturing locations, et cetera.
So the long story answer, you're like, I'm still waiting for an answer.
What should I do? I will ask a different question, which is how do you how do you get business right now?
Mainly it's, it's SEO people calling us from some of the stuff we've done on our website and, and customers re just re-upping.
We, yeah. So right now it's word of mouth and SEO.
And you should probably be a little bit concerned because of chat jibbitah that's eating away the SEO pretty rapidly.
So right now, I think the real thing that you're lacking is a reliable acquisition channel.
And so for me, if I were to switch places with you, my first and primary function would be how do I get a reliable acquisition channel.
Once I have that, then you can put all of your eggs like you can basically drive all of your own inputs through that channel. then get disproportionate return with the additional cash flow, hire the people to backfill yourself.
And then it's like, OK, well, then what what am I currently doing that I need to give up in order to get the attention in order to do that?
And so it might be less expensive. instead of saying, how do I hire that guy who's going to grow my business, which I'm still waiting for that guy, how do I hire the person to do what I'm already doing so that I can go grow the business is probably the better question.
And that guy will probably be less expensive than the guy who can grow it Because rainmakers ain't cheap.
Because if they actually can grow shit, they don't need you.
Like that's the real, like the people who are absolutely the best at growing shit can do things on their own.
And so you have to make the vision for the business so much bigger and so much more compelling that they're willing to come.
So I think backfill what you're currently doing, take all the existing resources that you have in terms of time and money, put them towards getting the next channel going. for a corporate sales motion.
I'll bet also that you probably just focus on B2B.
I don't know yet. I'd have to look under the hood, but that's going to be my bet.
And that would probably, the nice thing for that business is I'll bet you have a much higher ticket for the corporate gigs than you do for the individuals.
Yeah. if as soon as you get a channel there, all of a sudden you can start selling 10, 20 engagements a week or whatever.
And you're like, holy shit, because there's no, there's no reason why you, like if you can sell 10, B2C people a week.
There's no operational constraint on selling 10 businesses a week.
It's just the function is the same, but you just add zeros.
And so you just got a lot more operating leverage.
That was my long, short answer. Cool. Very good.
Yeah. That would be a way to answer that question.
And then I would ask the question, why do I care?
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.
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, you've got 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 30-ish pages for each of the stages.
Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow.
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 forward slash roadmap, R-O-A-D, roadmap, roadmap.
Hey Alex, I'm one of the Sydney boys as well from Australia.
Welcome. Australia. Australia. Yeah. My name's Arjun.
I'm going to do a shooey at my launch for you guys.
Awesome. Awesome. My name is Arjun, and we sell buyer's advisory services, essentially helping property investors purchase more properties, and we're helping moms and dads or small business owners.
We did 15 million in revenue, 27% profit margin last financial year.
This year we're on track for about 22 million.
How do you do that? Do acquisition fees or what's your fee structure?
We charge a flat fee for service at $22,000, half upfront, half upon success.
Independent of deal size? Yeah, it could be an 800K deal size or a $1.5 million house purchase.
Is that usually your range? It's kind of like in the-
Usually 600K to 1 million price point for a purchase of a property is our range.
And then we have a secondary service, which represents about 10% of our revenue so far.
That's percentage-based. Yeah. And that's a commercial property now usually be two, three, $4 million deals and a much higher service fee.
Yeah. So we're on track to do 22 million.
Pretty high percentage, though. It's 4% or 5% on those deals, so that's pretty good.
Yeah. We're on track to do 22 million for this new financial year.
Amazing. We want to be doing, based on the valuation metrics alone, about 54 million with all those scorecard points ticked off. at an EBITDA of about 27%, giving us a valuation of 125 million using an eight times multiple.
And what's stopping me right now is two things.
One is a reduction of CAC that's needed.
And then the second thing is best people duplication.
If we had our top two people in each of our divisions, uh the same standard as the rest of the team we would overnight get to about 45 million in revenue so two-part question that's on the best people and the cac reduction is that Our LTV is about 22 and a half thousand.
Okay, and our big is a big chunk here. Yeah, and right now we have CAC at about six thousand seven hundred and And the biggest problem we're finding- Wait, you said CAC was 22 or CAC was 6?
CAC is 6,600 with LTV at 22 and a half. Okay, God, it hurts.
And the CAC part, what we're finding is we'll put about 15% of ad spend of target revenue is how we've mapped out ad spending.
And then with that 15%, it's thrown all over the place. agency fees, PR, organic content, some Facebook, some YouTube.
And so we've just done a whole bunch of channels across.
We get some customers and we look at our data.
It's like, Oh, they came through metaforigination, but they converted from five other things.
They did 10 things along the way. That's the constraint.
Yeah, we're like, how do we what do we scale?
Because it feels like everything's working because they're all touching every touch point.
So we try and do everything more. We don't know which one.
So those are the two things. If we best practice duplicate, we double our business literally in a year.
And if we get our CAC down, we increase profitability substantially.
So I'll ask a different question. If you double everything you're doing, what stops you from doing that independent of the attribution, which right now is lacking.
But let's just say you just doubled what you're doing from an acquisition perspective.
What stops you from doing that? Well, we got four months of OPEX, so we should be able to have the cash to do it.
So nothing would physically stop us. We just wouldn't have a clue if it works or not.
We just hope it works. Yeah. Well, I will bet that if you do twice of everything that you're currently doing, it will work. the data piece will come into play if you want to just get more efficient on it.
And so realistically, how long is your deal cycle?
We usually have someone sign up And then that's the first half payment.
And they'll usually sign up within a month of the appointment latest.
And then what about from when they become a lead?
Do you have any idea from when they like opt into anything?
Do you know how long it takes? Uh, no, uh, because we've got some people who watched us for podcasts for three years and they're like, yeah, I'm ready to go.
And then some people that watched a VSL and they're like, Oh, I'm not so sure.
Okay. Sure. I'll sign up and give you a go.
But in terms of sign up to actual full cash receive the 22k, it's usually four months.
Yeah. So I basically double down on the branding efforts that get you the Like because if you like one layer before attribution, that would be kind of like forensic attribution where you'd really know would just be kind of directional attribution, which is closer to the sale and it would be qualitative, which is just like, where did you hear about me first?
And that will at least give you some indication of where people are coming from initially, because what happens is the deeper you get into attribution, the more nuanced it is because you're like, okay, well, let's say that someone opts in a year ago,
And then they see short. and then they watch along and then they opt in and then buy a year later.
Did they come from the first thing a year ago or did they get converted from the thing That's more recent in the last 30 days.
I would argue it's the last 30 days. It starts to get a little bit more muddied.
So there's something called scientific attribution, which is like last touch is like, the closest to conversion events, but will skew everything towards direct response.
And then you'll split test until it should become a porn business.
And so... It's a great saying by George Mack.
He said, if you split test enough, everything just becomes porn, which I just think is really funny.
And partially true. But on the other hand, scientific kind of blends those.
Because you go first touch, which then it's like, well, maybe everything is going to be my email list or whatever.
If you go last touch, it's whatever the right hook is.
And so scientific is if it's within 30 days, then it's last touch.
If it's more than 30 days, then it's first touch.
And that's kind of blends both. the qualitative will at least give you direction.
So I'll just ask you guys here. So who those be fun exercise?
Who here? First thing you ever heard was just from someone telling you about my stuff and get hands.
Okay, cool. Okay. So separate set hands.
Who here discovered my stuff from the book on Amazon first?
Interesting. Wow. Okay, cool. So by that logic, I might be like, I should never write books.
Right. Um, So who here found me on YouTube first as the first?
OK, so there's there's some. And then what about Instagram as the first?
Okay. So between those three sources, you kind of got, so if I were to power rank this, it'd be like, make really good shit on YouTube because two thirds of the room said YouTube.
And then, you third told people from YouTube.
And then somebody found me on Instagram and everything else almost became irrelevant, but that's top.
Right. You still have all the other kind of touch points that happen in between, like the book, for example.
And so for you, like that wasn't that hard to do, but I think you can mimic what I just modeled for you. with your existing customers, and then where they tell you the vast majority of first touch, then can inform where you do your reinvestment so you get a disproportionate return on dollars in or effort in.
That would be... the back of napkin way would be qualitatively do that, allocate resources to more than double the one point of greatest leverage in terms of bringing people in.
But I would still continue the other quote brand touches, at least as it currently stands, because they're probably doing some sort of nudging function or conversion function.
That's getting people to buy because you have, you know, you have more complex, higher touch services.
So it's expected for people to take longer to convert.
Got it. The second part was the best person duplication.
So I've got the fulfillment team. So it's going to come down to you actually studying the top two guys and Yeah.
And being a better student of exactly what they're doing and breaking it down into behaviors so that everyone can do it because everything is teachable.
Everything is teachable. There is no magic.
It's just a question of how teachable is it?
And most sales skills are exceptionally teachable within like a couple of weeks.
And so fundamentally, they're doing or saying different things than the rest of the team is.
And so once you identify what things they're doing You can then make that the standard for the rest of the team, and you can see if the rest of the team goes up.
If they don't adhere to those standards, then you might have other skills, which is like adherence, work ethic, things like that, which are absolutely skills, but probably not worth training.
Thank you. Cheers. How's it going? My name is Sam Jacobs, and we do China fulfillment for e-commerce sellers.
China fulfillment? Yeah, like 3PL services.
China. Yeah, China, Wuhan. Yeah. A little scared with the tariffs, but we're back.
You're good. So, yeah, we service our sellers.
70% of our sellers are actually dropshippers.
30% are brands that just like the international fulfillment.
So we do about a hundred and this month, 130,000.
And then 90%, 80% profit. Amazing. And then we want to be... at $5 million a year.
And really, I think what's stopping us is just continuing what we're doing, keep doubling down. on the leads, but we're kind of like figuring out our vision with it because we're working with many teams in China.
We don't really have assets. Right. So when you say assets, what I mean, technology, warehouses, we don't really own anything.
Okay, not a bad thing. Yeah, I guess it's simple.
So we kind of wanna figure out our vision and create more valuation with the company so we can exit.
You know, one day. So there's nothing inherently not valuable about your business.
If you run 80% net margins and... I mean, the issue right now is growth.
So you have to grow. What are you growing year over year?
Over 100%. You're on the smaller side right now.
So like we would need to see that sustain, but that's fine.
So you are growing. You've got good margins.
I'm guessing it's sticky because once they get the deal, they have to continue to buy through you because you keep it masked.
Yeah, I mean, they're using our we're sourcing and fulfillment, so we get them the product, ship the product.
Yeah, I'm guessing churns low. Yeah, but they also sometimes they're dropshippers, so the product dies out.
So we kind of like, we're trying to figure out where's the longevity in it.
Yeah. So what you have to, so this is a part of this is actually how you color the revenue that you have in the business is a little bit of finance thing.
But basically, I'll give you an example.
So Allen, which is a software company that we owned and then sold.
So Allen sold to agency owners. Now, the issue with agency owners is that they would get small businesses and they would do lead gen for them.
The problem is that chiropractor 123 would say, I don't want to buy leads from you anymore every three or four months.
And so they had tremendously high churn at the SMB level.
But the churn at the agency level was super, super sticky.
So I could rely on an agency to sell 10 more clients per month onto the platform and churn out 10 clients per month, but they would maintain a client base of 50 clients, which would do X amount of revenue.
And so I think if you chunk up how you're thinking about churn, which is if these dropshippers, you might find out that, and this is where you do it, activation metrics, we can help you with that stuff.
It's like, OK, if we look at all the data of the customers that we have to date, what do the people who have stuck with us for over a year have in common?
It might be this is me guessing from the hip from working a lot of businesses.
I would bet you that they have at least three SKUs that they work through you and they might have at least two acquisition channels, whatever.
And they might be doing over X a month for at least six months.
So if we just say, okay, well, somebody who goes from 10,000 a month to 100,000 a month in 20 days on TikTok shop, might not be a super stable business, even though there's big money there, they might just get shut off tomorrow or whatever.
Right. Whereas if somebody comes and they have at least two SKUs, they've been doing it for six months and they're on multiple channels, then the likelihood that both SKUs and both channels die is much lower.
And so I think you would chunk up to the seller, not the SKU.
And then I would be looking at how do we cross sell multiple SKUs to recreate activation of the most valuable customers.
Right. So here's the issue, though, to bring on these type of sellers like we have two options, either take U.S.A., Ace brands and then bringing them to China so they can unlock 65 plus countries.
That's kind of like our offer there. Or we just go to people who are ready shipping from China.
And then we just beat their rates. That's kind of how we're getting a lot of our clients is beating their current rates, which is kind of like a race to the bottom.
But it's how we got most of our clients.
50% of our clients currently come from word of mouth.
I would say 30% from affiliates, like e-comm coaches for their, you know, for the audience.
And then we have like, events, which is big, we go straight to like the e-comm guys, like, Hey, who are you using?
Let's beat your rates. Let's bring you on.
That's how we're getting it. So we're just kind of like figure out it's going to be very hard.
We talked a lot of the team members. They've been incredible. um to bring usa based brands over to china it's like a really hard ask for them and they're like we're doing all the revenue here already it's like bringing you there, it's kind of like a big ass.
So like, we're trying to figure out again, what type of customer should we be going after?
Should we just keep going after these like Quake 20-year-old.
Yeah, so the issue of the race to the bottom would be a concern if you didn't run 80% net margins.
Right. And so you're saying there's this component about my business, which is actually exceptional, but I don't like it because I was told that that means something bad.
And therefore, I want to get people to do something they don't want to do in order to grow my business.
I think that would be, I would rather bet on the thing that everyone's already doing that's making you a lot of money.
Yeah. I mean, we make money on every single order, right?
Yeah, which is pretty cool. We kind of launch...
And essentially it's like, if someone has massive volume, we make most money.
Like we had a 20 year old kid, like he processed a hundred thousand orders, right? over a hundred grand profit, like pretty cool.
Right. So we, we have a lot of our leads coming in that are beginners.
So we're like, Hey, let's just launch a $30 a month thing to get access to our team that's kind of running on the backbone okay for beginners because we don't make money if they're doing zero orders they just waste their time so 30 a month And then 10% of our actual profit that's coming from those beginners.
But that's not so, okay, I just need to recolor your brain around this.
You having, how many people actively sell stuff on your, using your service?
About a thousand. Okay. You have reoccurring business, you don't have recurring.
Reoccurring is still fine. Coca-Cola is not recurring.
It's still a super valuable business. You just have to demonstrate that people who buy once continue to buy.
That's it. And so I think, again, it's the chunking up, which is what percentage of the thousand people continue to stick with you.
And maybe you have the thousand, but there's really only like 200 that are hardcore, that are the real guys who drive all the volume. so you build the business for them.
And so a lot of this other activity is wasted effort, unless you had a very clear path of these $30 become these people.
Now you might have a couple of case studies But it doesn't mean it's reliable or that it's right.
Everybody has one sad story that everyone's really happy about.
But realistically... Most of the time, it's just going to be people who are already players who are already doing volume, who understand the game, and you just bring them in.
And so I would probably say you're 80 20 in terms of how do we allocate attention so we get higher returns is I would probably ignore everything that's not the 200. and then reverse engineer what those 200 all have in common.
And then I would make that my primary objective on the acquisition side.
And then you reverse that avatar through the acquisition channels, meaning...
Now, some of them came over word of mouth.
We're not going to operationalize that. You can try and encourage referrals.
We can help you with that, too. But big picture, it's maybe they all came from the coaches.
Sounds like probably a lot of beginners come from there.
Probably more from the events. And so you should probably go through an event sales motion.
And then basically, how do we go from two events a year or whatever it is that you're doing to like, to a week.
Yeah. It's funny. You said the same exact words as one of your guys.
It's awesome. Yeah. Good. And then we had a crazy idea.
The 80-20 rule, focus on the top clients.
What do they have in common? Do we start building out some sort of technology to help those people?
Just that's a distraction for me. Okay. Cool.
So the way that we're going right now, we can, we can take this a five to 10 moment.
You see that as a vehicle or do you think it's the wrong vehicle?
You can totally take it. There's obviously going to be other issues on the way in terms of scaling the services, scaling the team, scaling your connections abroad.
Probably there's a massive data project that has to get done.
But besides that, yeah, 100%. Like the business model, there's nothing flawed with the model.
Yeah. Don't try and become a software company.
You're not a software company. Just be a you company that does 80% net margins that's sticky.
Should we look to own anything in China or keep it the way we have it?
Simple. Yeah. Love it. Thank you so much, Alex.
Yeah, please don't try to become a software company so that you think that your company would be more valuable.
Just side note, please don't do that. If you were a software company, you would know you were a software company.
Hey Alex, amazing, amazing. Flew in from England for this, so I really appreciate it.
My name's Oliver Bruce, run an agency called Pinpoint Media.
We sell performance marketing, so paid search, paid search for creative.
We do four and a half million roughly a year.
I want to be at a million a month if we can get there.
What's stopping us, I think, is cobbler's shoes.
So we can't do... enough of our own ads because we're doing it for clients.
How do we fix that? How do you fix that?
Well, I mean... So right now your supply constraint.
Yeah. Right. So I'll ask you, I'm a business owner.
I've got all these, you know, customers, I have more demand than I can handle.
And I want to increase cash flow in my business so that I can both hire people and grow.
What do I do? well make sure it compounds correctly and make sure you cut the overheads so make sure you're making sure you ask me again sorry so i was pretending to be not you somebody totally different okay um And so I'm fully staffed.
Everyone's at full capacity. I want to grow.
I need to increase cash flow. I have more demand than I can handle.
What do I do? Sell more. Do more. Raise prices.
You see, this is the issue. I promise you, this is what the guys are telling us to raise prices, et cetera.
And we are mid to high ticket already in the UK.
And for us to raise prices, got a client sat here actually.
Maybe I should ask him. But for us to raise prices is really difficult because a lot of the clients are kind of, we're already quite pricey in that sense.
We're performance-based. We are performance based in that sense.
And 75% of it is retained as well. So it compounds nicely over the course of the year, but For us to raise prices, we'd then almost outprice ourselves and then go to somebody else potentially.
I know we deliver a good, you know. Well, if that happened, you would free up capacity and then you could run ads.
Absolutely. But then we've got to, you know, go back to the beginning and it's kind of what's the point in winning new clients.
I'm saying your downside is you can, you'll basically, your downside is you're fine.
Your upside is you make more money and you get cashflow and you get growth.
Yeah, I get that. What about just hiring more people to be able to do that?
You can do that. I don't know. What are your margins?
20-ish, 18%. Yeah. So you got, what, 700-ish a year in cash flow?
Yeah, yeah. I mean, you could immediately just hire off of that cash flow.
All of this is just, it's really a question of risk. and how much margin you want.
So like if you need, I guess I'll ask the simple question, why haven't you hired somebody already?
We have a performance team that we literally started six months ago with this in-house.
So the reason we haven't hired someone to do it for us is because it's not immediately revenue generating.
It's not a billable service to our clients.
I know it is hypothetically in the future.
But you doing performance for yourself is not revenue generating?
No, no, my point is we can't bill it out to the client straight away.
So it is revenue generating in time, but it's that sort of front loading the cost to be able to then generate the revenue.
And because it's organically funded and such, like it's super hard to front load it.
We've got 700 in cash flow. You can go hire the person and have 500 or 400 left if they're a savage.
It'll still be fine. Yeah. Okay. And what would you say the best hooks are in terms of agency creative?
For getting customers? Yeah. It's still always going to be results and brands.
We said a lot through case studies and lead magnets, but Um, so I mean the best agencies run, the best agencies grow on word of mouth.
Yeah. Yeah. Because they're actually really, really good.
And so like if you have, you know, some portion that's word of mouth, you just continuing to reinvest in the team.
Agencies are traditionally lower, well, both lower margin and also typically lower multiple from a valuation perspective because it's so people heavy and that's okay.
It's just a different business model. But they're also like I mean, every business in the world wants more customers.
So it's really easy to sell. why so many agencies exist.
So like, you know, every upside is a downside just said differently.
You know what I mean? But the simple, simple, low risk, because you're not going to raise prices, I can feel it.
So just hire the next person. This is the reinvestment part.
Said differently, do you think you're going to get more than 8% more business for the year by hiring somebody who can get you more customers?
Yeah, 100%. Right. So then it's an investment that you'll get a way higher return on than putting it somewhere else.
So that's a pretty good allocation of capital in my world.
And what point do you dial? Because I do a lot of the ads myself in terms of the ad sets, the creative, the running around with the phone and all that kind of stuff, just simply because I don't want to take up the dude's time in the businesses or in the business.
At what point do I dial myself out of that and put another excellent member of staff on camera sort of thing?
How does that transition work? I think it's whenever you want.
I mean, you could do that a million dollars a year.
It just the thing is, is like you're going to have founder magic and it's always going to work disproportionately better for you than it does for anybody else.
And so I will expect a 30% decrease in performance in a function if someone takes it over for me.
Yeah, OK. And as long as that's baked into the financial model, that's fine.
Because then I get like one of the things we have is scale zero. which is like, how do I get me to zero?
And once I'm at zero, we can just scale all the way to the moon.
If there's any percentage that requires me, then it doesn't scale.
Yeah, and that's what I'm trying to do. Okay, hire someone, do more, try and die myself out if I can.
Appreciate it. Thanks, Alex. No, you bet.
And as a side note for everybody, when you're in a low capex business, which is kind of like the performance marketing agency, if you've consulting firm, if you're an accounting firm, if you're legal, if you're you know what you are, if you're if you're low capex, any kind of services for the most part.
When you have the profit at the end of the year, the benefit of those businesses is they generally spit off more cash flow than other businesses.
So like a physical products business, you have to buy more inventory.
If you're brick and mortar, you have to buy more locations. you know, manufacturing, you gotta buy another machine for more widgets or construction, you gotta buy equipment, whatever it is, right?
Some businesses require more capital to grow.
Service businesses do too, but just not the way you think.
And so there's two primary investments that will get through the disproportionately higher returns for service-based businesses, which is now 80% of the room.
So number one is talent. And so when you see your profit at the end of the year, the thing that you take is you look at that profit, let's say it's a million bucks in profit, and you're like, okay, Well, for me to keep going, I can try to keep squeezing my team more, but at a certain point, there's just not more they can do.
And so I have to unlock more operational capacity by bringing more eight players on.
And so I have to look at that and say, well, what percentage am I going to reinvest in the business?
To me, reinvesting the business from a service perspective is, again, one of two things.
One is they bring talent. And the other is that you do brand plays, which is like, what are the big aspirational associations that I can go for that will permanently cement me in a different tier than my competition?
Like, why does Red Bull waste the money to do a parachute jump from space?
Because it's a brand play and because people talk about it like me right now.
Right. And you're probably haven't thought about Red Bull, but now you're more likely to drink one for the rest of the day.
Right. And so the like, why am I doing a book launch?
None of you even found me off my damn book.
Right. Like, why am I doing this? Because I think that if we do an enormous launch that gives a tremendous amount of value to entrepreneurs, it'll introduce a lot of people who are kind of like much, much more on the top of my world who are just barely at the edges.
They'll take them one long step in. They'll get three or four hours of tremendous value for me.
Hopefully they'll buy a book and get another six, seven, eight, 10, 20 hours of value from that.
And then over the next few years, they'll work their way into my ecosystem.
It's a multi-year play. And I'm putting, I don't know, six, $7 million into this launch.
So I'm putting a decent amount of capital into this with basically no real return that I'm aware of.
Right. And so like those are the bets that we have to make on brand that will get you out of the direct response doom loop that you may feel like you're in. which is hitting the national companies disproportionately to the local businesses.
So like if you're local, you have a little bit longer you can get away with basically just running Google Ads or meta ads and just generating leads and selling shit which is fine but everybody who's national ourselves international brand, like you can't just like five years ago, eight years ago, you could just run a cold ad to a video sales letter, get on the phone and sell something for 10 grand.
You could do it with basically no reputation.
Those days are more or less gone. And so now it's like you have to make these big brand investments.
Now, part of that might be content that you can reinvest.
So you're like thinking because your performance market, you probably think more in ads.
But the biggest brands that really make money with performance, performance is only 30% of their budget.
70% goes to associations, narrative, founder story, all the things that they want everyone to talk about and associate them with, which then long-term creates higher ROAS than direct response does.
Direct response creates higher ROAS in 30 days.
Branding creates 5, 10, 20 times more ROAS over 12 months.
And that's the part that everyone fucks up.
Me too. I stayed stuck at between 30 and 40 million for three years until I figured that out.
Hopefully that helps. This is our last question.
Yes, sir. It's got to be like amazing. It's probably not going to be.
I'm going to try really hard. My name is Todd Weaver.
We're B2C. I'm in the restaurant business.
So restaurant business, restaurant business.
Uh, we do about 25 plus million in revenue.
Uh, we're trying to get to a hundred. Amazing.
How many locations? We have six. What's the, what type of dining?
Oh, actually, there are five different concepts to the American Pub Fair.
At least you're focused. That's good. They're all restaurants.
There was a lawsuit that got in the way of growing brands.
So what's stopping us is probably to be truthful is me and my business partner, which I dragged here. uh i'm partner business partner over here yeah I'm more of the front-facing marketing person.
He's the implementer finance guy, right?
So I thought I'd bring him to listen to the spiel, right?
So if I'm looking at the business worksheet that we filled out from the beginning, the problem is the LTV to CAC.
How do I... I don't have those numbers.
Right. Yeah. So in a restaurant I have, let's say I have information from our, what do we say?
Our, I'm trying to think our programs. Yeah.
So restaurants is such a unique business.
The thing is, is like, More than anything, and this may sound ironic, it's like on the polar ends of business, you have restaurants on one side and then on the other side, you've got super high tech.
And they both converge on the same truth, which is that in the long run, product is the only thing that matters.
And so at the end of the day, you can do all the marketing things you want in the world if the food sucks, And also that's obviously tailored with the experience, the service, the environment, all those other things.
But if the experience overall is not noteworthy enough, then you get a lot of like, yeah, it was all right.
And then they never come back. And then someone's like, oh, I guess we won't try there then.
It's that those tiny little because most people do find restaurants through word-of-mouth and reviews.
It's like I 90% those two sources. I mean, not many people are scrolling Instagram and are like, oh, I will respond to the Buy one, get one.
Now, the one exception to that is when you have a grand opening, which you should have, I'm sure you do, hopefully you have a grand opening strategy for your locations.
That for sure is hardcore marketing that you're doing.
But the idea is that you never do grand openings until you know... that the model that you have, the experience that you deliver, the food that you make, when someone comes in, you know that off of the grand opening, you can get that that that location to full capacity within six months, just off of the word of mouth of basically the initial push.
Which, by the way, is how all brick and mortar should work with restaurants.
It's just more exacerbated because data collection is harder and gross margins are smaller.
Right. And so basically, if you're like, how do I how do I aggressively grow the business?
It's going to be mostly the food and the experience. which is the sad and also amazing.
How do I get the finance guy to spend money in marketing?
Because if I'm looking for that number, that CAC number, I don't know how to get that number.
So right now, let's say hypothetically you spend $0 on marketing just for shits and giggles.
So it's like, well, what's our marketing expense right now?
Well, it's zero. You could just reframe that question, which is like, what do we like?
What do we pay in premium across our systems, our service and our and our ingredients? that increase the virality or word of mouth from the business, that alpha, that spread is basically the marketing.
You're just doing it in the form of product.
But to get that finance guy to open, like you need to have a grand opening playbook that needs to include what overstaff we do.
I mean, whatever staff we do and how much money we're going to spend on ads across all channels.
And what are the kind of promotional giveaways that we're going to do in the beginning?
Unless it's super premium. But even then, the giveaways still happen.
They're just different. Giveaways are still the way as like grand opening strategies.
It's just going to be exclusive and invite only and things like that, but it still works the same way.
Okay. Thank you. Appreciate it. Oh, that was it.
Quick question. So who here has read my previous last two books?
Can you raise your hand? All right. On a scale of one to 10 using your fingers, how valuable were these for scaling your business?
Can I get, oh, those look like lots of fingers.
Those are at least, that's a 9.7 thumbs out of 10.
All right, well the rumors are true. Let me grab the third book here.
That's coming out About 100 million dollar money models.
It's finally coming out who's stoked. I All right, we already have 200,000 people registered.
I've spent so much money on the launch itself, literally multiple millions of dollars, way too much.
And the reason I've done it is because I actually want to blow you guys away.
But the best part of the event is that the tickets are absolutely free.
And there's also a secret project I'm gonna be giving away as well.
You guys don't know about it, but it's sweet.
It's also free, but the only way you get it is if you click and you show up there live at the launch.
So click register and I'll see you there.
