Bootstrapped to Millions Without Loans or Investors | Ep 873

In this episode, Alex (@AlexHormozi) sits down with Ahnny Truong, founder of EMME Lash & Beauty, to unpack how she bootstrapped her way to millions, sharing the bold moves, early mistakes, and branding breakthroughs that helped her dominate the lash industry. Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast, you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Wanna scale your business? Click here. Follow Alex Hormozi’s Socials: LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode: Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Hormozi?

  You're having a tough time right now. I think that if we get this right, the locations that you have will continue to grow even better. This is Ani. She runs a chain of eyelash salons doing $2.3 million per year. But she's dealing with challenges with her business partners, and she's spread way too thin. And if she doesn't fix this fast, this business won't just stall, it'll start falling apart.

• 0:18Speaker 01

  Hi, I'm Ani. I own Amy Lash and Beauty. We are in the business of empowering women with eyelash extension service. With a revenue of $2.3 million, 644,028% net margin. We have seven locations, been in business for over 10 years, and helped over 20,000 clients.

• 0:37Alex Hormozi?

  Amazing. What's the problem that you're dealing with right now?

• 0:39Speaker 01

  I have three problems. First is lead generations, because we always need more clients. Second is making the service better. Manager training is inconsistent because the managers are spending most of their time doing lashes. New employees aren't getting trained as quickly. Third is partner problems. Some partner have dropped responsibilities since the initial equity agreement. And I don't take a salary for doing most of the work on marketing and scaling.

• 1:04Alex Hormozi?

  What happens if you don't get these solved?

• 1:05Speaker 01

  The company is not going to grow. I'm doing unpaid work, so I feel unfair. I don't know how to have hard conversations with the partners because they're also my friends.

• 1:15Alex Hormozi?

  All right, tell me more about the partnership situation.

• 1:17Speaker 01

  I have three partners.

• 1:20Speaker 01

  Right now, they are just not aligning with my new goals and mission.

• 1:27Alex Hormozi?

  Yeah.

• 1:27Speaker 01

  To grow the company. They kind of have their own thing. One partner has her full, like, full-time career.

• 1:33Alex Hormozi?

  Yeah, and a new baby.

• 1:35Speaker 01

  A new baby. They don't manage the lash artists. They don't train them. So the customer service and the fulfillment are not as good.

• 1:45Alex Hormozi?

  Yeah, that's probably why those locations don't have as many customers. Word of mouth. Yeah. We kind of have to fix these, you know, call it seven locations first. And I think if we nail the model, you'll sleep better at night.

• 1:57Speaker 01

  Definitely.

• 1:58Alex Hormozi?

  Right? Okay. And so that 600-ish thousand that you have in profit, is that before you split it between all the owners?

• 2:06Speaker 01

  Uh, yes.

• 2:07Alex Hormozi?

  Okay. Got it. Yeah, you're having a tough time right now.

• 2:12Alex Hormozi?

  It's a lot of, it's a lot of people to manage.

• 2:15Speaker 01

  I'm feeling a little bit stuck because I'm having a disagreement on how to grow the business. I have a bigger vision where I want to take the company, but my partners, they don't share the same vision.

• 2:25Alex Hormozi?

  Who do you help?

• 2:26Speaker 01

  So I help 99% women, mostly in their twenties to fifties. Women who just value time saving or want to look good without needing a lot of makeup.

• 2:35Alex Hormozi?

  Is there an income level that they associate with, or does it work in any market?

• 2:38Speaker 01

  The people who come back to continue the service would need a higher income. But for someone who just wanted for an event, it could be anyone.

• 2:48Alex Hormozi?

  How do you help them?

• 2:48Speaker 01

  So for a new client, our lash artist goes through consultations, make the recommendations, and apply their first set of lashes. If a client decided they want to continue with the service, they come back every two to four weeks for refills.

• 3:02Alex Hormozi?

  I want to double click there for a second. If they decide they want to come back, how does that work?

• 3:09Speaker 01

  They just come back in.

• 3:11Alex Hormozi?

  Basically, when they want to come back?

• 3:13Speaker 01

  Yes.

• 3:15Alex Hormozi?

  Noted. So this is a massive untapped opportunity that so many businesses miss out on. And so there's two versions of this that you can do. Number one is something we call BAMFAN, which I talk about all the time, which I got from Sharona Vatsa, which is book a meeting from a meeting. BAMFAN, that's what it stands for. So if you ever have the opportunity where someone comes in and they're going to have to come in again, book it then, just get it done, rather than trying to rely on them coming back by chance or remembering you, or just even just creating the administrative burden of later having to schedule it when they're not right in front of you. The other way is just creating some sort of membership. Now, those are a little bit harder to sell because people don't like having recurring billing. That's why BAMFAN is one of the easiest ways you can implement just about any business. But the recurring membership component, if we can structure the membership well with a really compelling offer, it might be something that's going to drive more and more people into it, which will stabilize the business. Okay, so how do you make money?

• 3:58Speaker 01

  Depending on the style of lashes, between 170 to 300, we do have an intro promotion for 99. When they come back between two to four weeks is 70 to 270. The longer they go in between fills, the more it costs.

• 4:12Alex Hormozi?

  So let's say that someone comes in for $200 worth of lashes. What does it cost you in labor and what does it cost you in lashes?

• 4:19Speaker 01

  We pay our lash artist 50%.

• 4:21Alex Hormozi?

  Really? Wow. Do they cover the cost of the lashes as well?

• 4:25Speaker 01

  No, well, we pay the cost of everything.

• 4:28Alex Hormozi?

  Wow.

• 4:30Alex Hormozi?

  Wow, generous. So they get 50% of top line and then you deal with the cost of goods, marketing, rent, cleaning, everything else.

• 4:40Speaker 01

  Yep.

• 4:41Alex Hormozi?

  Wow, it's impressive that you're running 28% margins with that. That means you're running everything else on 22%.

• 4:47Speaker 01

  We, our supply is cheap, that's why.

• 4:50Alex Hormozi?

  Yeah, no, but I mean, it's still 22%. That's really impressive for literally giving 50% of top line away. Okay, so how do you get customers?

• 4:56Speaker 01

  50% of our clients come from Google. It's unclear whether this is organic SEO or pay ads. Although I do spend a thousand dollars a month on Google Ads.

• 5:07Alex Hormozi?

  Per location?

• 5:08Speaker 01

  No, total combined, yes.

• 5:10Alex Hormozi?

  The thousand dollars per month, you're saying you spend between five locations?

• 5:14Speaker 01

  Yes.

• 5:15Alex Hormozi?

  So you're spending $200 a month per location? So Ani's spending a thousand bucks a month between six locations? So that's like $180, whatever the math is, per month that she's spending. That's not a lot. Think about this, so she's spending $12,000 on a $2.3 million business. So if she spent 1% of her revenue, it'd be $23,000. So she's spending a half a percent on marketing, which to me is either like, this marketing isn't working or she's not spending nearly enough. And I think she's actually in the camp of not spending nearly enough. If she tells me anecdotally that half the people coming in say they heard of her from Google, I'm going to bet it's doing more than nothing. I'm of the camp of like, man, she's probably on a gold mine right now. Her probably cost to get a customer is almost nothing. And she should spend way more to get more people in the door.

• 6:00Alex Hormozi?

  How many customers do you sell a month?

• 6:01Speaker 01

  On an average month, our total appointment is 1,700. Total guest count is 1,100, 30% new clients, 70 recalling clients. 50% of our clients stay longer than three months.

• 6:13Alex Hormozi?

  Do you have the same prices during the weekend and during like search times?

• 6:16Speaker 01

  Yes, same pricing for weekdays and weekends.

• 6:19Alex Hormozi?

  When is it busiest?

• 6:21Speaker 01

  Usually Friday, Thursday, Friday and Saturday.

• 6:23Alex Hormozi?

  Is there a time of day or is it just those days all the way through?

• 6:25Speaker 01

  Just those days.

• 6:26Alex Hormozi?

  So the oldest law in business is supply and demand. And the cross point is where you have price. And if there is more demand and less supply, like for certain times, certain days, then price typically can and should go up. And so she's running a business right now where she has some supply constraints that are temporal, meaning either time of day or day of week, where she has constraints only on those days. And so on those days, it would behoove us or behoove Ani to bump the prices up to reflect that shift in the supply, demand of the business. Now, if you're like, oh, but wouldn't it piss off our customers? Of course, everything is about how you frame things. Now, wouldn't it be nicer if we said these are the prices on Thursday, Friday, Saturday? And the rest of the week, you get a discount, right? And that'll also drive more people to come the other days,

• 7:10Alex Hormozi?

  which will then smooth out her demand curve and ultimately keep her staff better utilized during the week. And then by doing that, increase her availability on weekends, which would then drive more people to those times that she can fill back up, but again, at a higher price. Genius. Brilliant. Let me ask you a big question. Would you say that you have more of a limitation on doing the work or getting customers?

• 7:39Speaker 01

  Getting new customers.

• 7:41Alex Hormozi?

  Interesting. So you could handle a lot more volume. So it's more demand issue. All right. Beyond that, why the rush?

• 7:49Speaker 01

  There's no rush. It's just that I don't see an improvement.

• 7:54Alex Hormozi?

  Can I tell you why I ask?

• 7:56Speaker 01

  Yes.

• 7:57Alex Hormozi?

  You have two or three different partners?

• 8:00Alex Hormozi?

  Why'd you take the partners on?

• 8:02Speaker 01

  I did not have the manpower to manage, didn't have the money to hire like a manager.

• 8:09Alex Hormozi?

  Then I'll ask the question, why the rush of opening? Before you had the money and before you had the manpower?

• 8:15Speaker 01

  I just thought that we would make more money with another location.

• 8:21Alex Hormozi?

  I agree with you. You probably already noticed though, that the next location is significantly harder than the first one. And the profit, I'll bet you a big part of the profit is probably from your first, the ones that you have the most direction control over.

• 8:32Speaker 01

  So I thought when I opened more locations, I would make more money. But then I realized the manager aren't training the new employee as well. The fulfillment of the service are not as good. Some locations aren't doing as well.

• 8:46Alex Hormozi?

  So I have a lot of empathy for Ani because I made the same mistake. And so I had six locations, almost to the, you know, same thing. I had multiple partners. I did this. I did this. And the reality is that if I had just continued to cash flow, you know, the first location that I had, rather than getting really aggressive with my expansion, I would have expanded better, more profitably. And I probably would have had a stronger brand going into new markets. And so sometimes we have to go against our desire to do things fast, make it them easy. Just make quick, big bets on new people that are unvetted or untested. Whereas if she had been able to maintain control and maybe have three locations by the same time period, and she owns them all outright, she would be consistently stomping out these new locations. Because here's the really fun fact.

• 9:31Alex Hormozi?

  The fastest way to five locations isn't the fastest way to 50 locations. You might go slower for your first one, two, three, four. But by doing it that way, you set up the infrastructure, the foundation, to be able to then aggressively go from four to 10, and then from 10 to 50. But you can't do that if you have all these hodgepodge deals on the side. Because let's think about this all the way to the natural extreme. Do we think the future version of the business is her with 100 different partners? Probably not. And if that's not the future version of the business, why start doing that today? And the answer to that question is one word: rush. This is the pro-location numbers. You own number one and number four outright. Number one makes the most profit, I'm guessing.

• 10:16Alex Hormozi?

  Does that one run 28? Or is it higher margins there?

• 10:18Speaker 01

  It's around the same margin.

• 10:21Alex Hormozi?

  Okay, so it's like 20, so, okay, cool. So that one makes like 250,000 a year, something like that?

• 10:26Speaker 01

  Yeah.

• 10:26Alex Hormozi?

  Okay, and then all of them kind of maintain the same margins? Or are any of them not profitable? Are they all profitable?

• 10:33Speaker 01

  Very similar margin.

• 10:34Alex Hormozi?

  Really?

• 10:35Speaker 01

  Yes.

• 10:36Alex Hormozi?

  That's interesting. That's not common. That's a good thing. That's a, that's a kudos to you. Talk to me about the membership process.

• 10:43Speaker 01

  So we just started a membership. We're still working on it, not rolling out yet.

• 10:47Alex Hormozi?

  So you've never really tried to have some sort of upsell offer?

• 10:51Speaker 01

  We do have an upsell. When a client come in for that ninety nine dollars set, I usually upsell them to one seventy, which is like a better set of lashes.

• 10:59Alex Hormozi?

  Okay. What percentage do you upsell?

• 11:02Speaker 01

  I can upsell ninety percent of the time.

• 11:04Alex Hormozi?

  What about the team?

• 11:06Speaker 01

  Probably do less than fifty.

• 11:08Alex Hormozi?

  They don't even ask.

• 11:09Speaker 01

  They don't even ask.

• 11:10Alex Hormozi?

  I mean, I guess they're good. You know, if they have fifty, it's not bad. It's just not terrible. Also, in terms of close rates, you have like ninety nine percent closer for people who walk in the door. I probably wouldn't. I don't even know if I would try. I mean, it's worth tracking to see if it falls off. But what I'd be more interested in seeing is the close rate on upsells. Because the ninety nine dollar thing is not where you're gonna make, not where you make your money. So she's got a really big opportunity here where she's saying that, you know, they close a hundred percent, but it's basically pre-closed people who already checked out on a page. And so when someone walks in already having spent the money or knowing that they're going to spend this money, they already know the price, they have the card down. Those are like, in my opinion, just absolutely assumed closes. Like, you're not gonna mess those up. The real opportunity, though, is that these are essentially lead magnets. They're front-end promotional offers that are not designed to make money.

• 11:55Alex Hormozi?

  The offer that's designed to make money, the profit maximization component of it, is the upsells. If she's not getting a huge percentage of people to take the upsells, those are all the missed opportunities. Because think about it like this. Let's say she breaks even functionally in terms of costs after payroll and taxes and materials and rent and labor and all that stuff on these promotional offers. Because if she only did promotional offers, she wouldn't have any profit in the business. So the real business is the upsell. And that's what we have to be focusing all of our attention on so that we can maximize that step one to step two take rate. What's the incentive for the girls to stay?

• 12:29Speaker 01

  The lash artist.

• 12:30Alex Hormozi?

  Mm hmm. Because I'm assuming that you could lose them pretty easily.

• 12:33Speaker 01

  I'd offer training and to, you know, advance their techniques. But mostly-

• 12:38Alex Hormozi?

  Which the other people aren't delivering on.

• 12:39Speaker 01

  Money, yeah.

• 12:40Alex Hormozi?

  Yeah. So are, do you lose them to other competitors? Or do you lose them more to them just going out on their own?

• 12:46Speaker 01

  Going out on their own. That's one huge problem that I have is I don't know how to prevent them from taking out clients either.

• 12:53Alex Hormozi?

  Yeah. Mm hmm. I have ideas. Ready to dive in?

• 12:58Speaker 01

  Yeah.

• 12:59Alex Hormozi?

  Okay, let's do it. Come on over. So here's how we're gonna do it. Number one, we're gonna talk about pricing. I think you have a little bit of an opportunity there that I'll walk through in terms of search pricing. Number two, membership.

• 13:10Alex Hormozi?

  That you're trying to put together. I have a lot of ideas on what we can do to make that better. Three is going to be the upsell process. Next one is going to be career path for your team. So that you can try and keep more of them. Ads plus attribution. How do we know we're getting what we're spending for? This is gonna be a big one.

• 13:30Alex Hormozi?

  Partnership.

• 13:33Alex Hormozi?

  Man, it's hard for me to even talk about the other five without going into this because I think that this is like, this is the one that feels the heaviest to me right now. Because fundamentally, if we don't nail the partnership, then none of the execution is going to happen.

• 13:45Speaker 01

  That's what happened after I went back from the event. Like, hey, this is all the things we, I want to do, but they're not really on board.

• 13:53Alex Hormozi?

  Yeah, okay. Check this out real quick. So this is the $100 million scaling roadmap. Leila and I spent 200 ish hours going over all the companies that we've owned, invested, scaled, and tried to break down where were the points that we got stuck? And then what do we do to break through? And we broke it in these 10 stages and Ani is at stage six, optimize. So let's look at some of the problems that she's dealing with. She has to run more ads than she currently is. So to graduate here, she's got to implement the ad assembly process to increase volume. If you're like, what's that? I have a whole video on it if you're at stage six. She has to install a product improvement process for both products. Because the second product here is the membership product, right? And so we need to put a process in place so that we can continue to improve it. So we can decrease churn and get more people to, to take that upsell, which also goes hand in hand with installing sales, training systems and individual coaching and a team cadence

• 14:38Alex Hormozi?

  to make sure that they're maximizing that upsell at step two. When they come in for that promo offer, we need to get more people to take that upsell, both in terms of just the immediate upsell, but also the membership upsell. And the only way we're going to do that is through training. And I think Ani says this, she's like, you know, the team's not as trained, trained as well as they should be. And if we're thinking about like, what layers this, she's got two layers of management. She's got a full team of managers. Every one of these locations has a manager. So these are the problems that she's dealing with right now. And for her long term, right? She almost shortcut the idea of getting. Good managers by just partnering, but what she really needed here, like what was the constraint was that the number and type of role she needed exceeded her current network, right? And the thing is, is that she just used her current network to just pull people in and that has become an issue. And so these are all problems that happen

• 15:22Alex Hormozi?

  all the time at stage six. And so if you're like, man, I would love to know what stage of business I'm at so that I can know what the constraints are and what I need to graduate. And so this is 100% free. You got acquisition.com forward slash roadmap. You type in your business information and it'll, it'll figure out what stage you're at and give you the potential solutions that might help you get through that stage with your business. And if you'd like my team to actually work with you in person to make sure that this is the stage you're at, and these are the things that can help debottleneck your growth, then on the thank you page, you can schedule a call with our team and we'd love to potentially see you out here in Vegas. Well then, I don't normally do this, but let's talk about the partnership first. Let's resolve that and then we could talk about all the downstream stuff. You have three sets of partners. You have two that work full time and then one that you've done

• 16:05Alex Hormozi?

  multiple partnerships with. Which one do you want to tackle first?

• 16:09Speaker 01

  The bigger yes.

• 16:10Alex Hormozi?

  Yeah. The reason I wanted to talk about her partnership structure is because all of these things that I'm going to go over are wonderful ideas and they're great things that she could do to potentially grow the business. But if she's using up 80% of her mental bandwidth on these partnerships, then she's never going to be able to execute any of this. I want to maximize the likelihood she succeeds and part of that is decontaining the biggest time drain she has, which is these partnerships that she hasn't visited yet, which is why one of my favorite quotes is everything you want in life is on the other side of a few hard conversations. You know, my heart goes out to her with the partnership situation and I know that firsthand, having nine failed partnerships. All the big jumps in my career happened after I had tough partnership conversations. If she doesn't deal with this thing, it's just going to get bigger and nastier. And so you might as

• 16:52Alex Hormozi?

  well deal with it now. And so this is me also talking to Ani and her potential partners. Please try and resolve whatever concerns you have and set up clear expectations. Don't leave it in the gray. Don't leave something there because you don't want to confront the issue. Like whatever you say to your husband or you say to the people behind one another's back, just say it to each other. Get it out there. Be clear about what you want. And then ultimately. I think it's going to be better for all parties. I think that your initial inclination is right, which is that you have option one is that there's a role that doesn't exist within the business, which is to do this level of work. And so I'll tell you a story. So when I had my first partnership ever, I, or second partnership ever, I had two people come into the business and so they were all one-third partners.

• 17:36Alex Hormozi?

  But I was the one who ran the gym, but I didn't get paid any more than the other two partners who never stepped, not really, didn't step in the gym comparatively to the amount of hours I did. The big issue that I had was that I never asked for basically what I should have probably been paid, which would have been what a manager would have been paid. And so the actual business has artificially high profit margins because there's a role that I'm doing as owner, but I'm also doing the role of somebody who would be working the business because long-term in order for it to really scale, you can't work in it. So you're basically running as manager probably for multiple locations right now. You're basically doing as an unpaid manager, which is not uncommon in the very beginning, but over time, it's like, as cash flow is there, you really want to have that role. So that later you can say, I'm going to hire someone and we're going to pay them the same amount that we paid me to take this role.

• 18:19Alex Hormozi?

  And so it should be the rate that somebody else would be able to do the same work for. It's super important for Ani or anybody who has a model that they intend to scale, to pay what would be market rate for the role that they're fulfilling within the business. And the reason that's important is because if you want to open up more locations, you're going to have to leave that location, which means you're going to have to backfill your skillset there. There's a couple of components to this. One is if you're doing like four different things at 25%, then that means there's something wrong with the model. We need to better organize the team and the roles so that all of that work gets covered. And if somebody else is going to come in and do those, you know, four 25% roles, fine. But we need to make sure that that's factored into our return on capital in terms of how much it costs to open up a location versus how much we're going to make from it.

• 19:03Alex Hormozi?

  And so let's say that we've got a location that's making $300,000 in profit and it costs us $50,000 to open. We'd be like, oh my God, let's, let's open a ton of these. But we then find out that it costs us, you know, $200,000, for example, to pay somebody who's good enough to be able to execute the business model there. All of a sudden now, we're making only a hundred thousand dollars in profit per location, all $50,000 invested. Now, mind you, that might still be a good return, but we still have to factor all of those pieces in is, is this the real return or is this artificially inflated because people are, are acting as owners and just getting a profit share of it? And it's not really built into the overall economics of the model. And this is why we say nail it, then scale it. That's option one. The other option is if you decide that you don't think the partnership's going to work out long term, that I do think it makes sense for you to split the partnership. Now, there's two paths there.

• 19:47Alex Hormozi?

  So path one is that she buys you. The other path is you buy her. Right? Now, I think the fairest way to approach it is to do something called a shotgun offer, which is like, I will buy you out for this, but I will also accept that for you to buy me out.

• 19:59Speaker 01

  Yeah.

• 20:00Alex Hormozi?

  And so you can basically make the price and the terms. So it's like, pay me over two years, pay me over three years, don't have to pay it upfront. But when that happens, you're going to be running this business and I'm going to be running my locations.

• 20:09Speaker 01

  Mm hmm.

• 20:10Alex Hormozi?

  I think that if we get this right, I think the locations that you have will continue to grow even better.

• 20:16Speaker 01

  It's just the problem is, what if they say no to the buying out part?

• 20:21Alex Hormozi?

  Well, the thing is, is that you have leverage.

• 20:24Speaker 01

  Mm hmm.

• 20:25Alex Hormozi?

  Which is if you're the working partner, you can say, well, then I'm not going to work anymore.

• 20:28Speaker 01

  Okay.

• 20:29Alex Hormozi?

  So there's leverage.

• 20:30Speaker 01

  Yeah.

• 20:31Alex Hormozi?

  And to be fair, they have the equal opposite leverage. But if they already are not working, then there's less leverage. Being the person who works and brings it in always gives you leverage in a relationship. The idea here, though, is that I think the fairest offer is, I will buy you out of this, but I'll also accept that. But either way, I don't think this is going to work long term because we have different goals.

• 20:48Speaker 01

  Yeah.

• 20:49Alex Hormozi?

  And also, because you have multiple locations together, you might be able to do just a straight equity swap, which is like, you're 50/50 here and 50/50 here. Let me just take this one, you take that one, and we just go our separate ways. And that's super smooth because then you really, it's an in-kind transaction, there's no taxes, and you basically just swap equity for equity. Yeah, I've actually done a deal like that. That might be the cleanest thing for you to do because it's a clean break. And now all of her focus is like, I just have to make this one profitable.

• 21:13Speaker 01

  Yeah.

• 21:13Alex Hormozi?

  And then you just cut the other full one. And if you want to be really generous about it, you can say, I'll let you pick which one.

• 21:19Speaker 01

  Okay.

• 21:19Alex Hormozi?

  If you want to be really generous with.

• 21:21Speaker 01

  Yeah.

• 21:22Alex Hormozi?

  How do you think, she thinks you'll take that? I think it's a pretty reasonable offer.

• 21:25Speaker 01

  Yeah.

• 21:25Alex Hormozi?

  Yeah. Well, they give you three different paths. I think the salary thing is going to be hard, given what you said. It sounds like a clean break is the way to go. So either buy me out or let's just trade. So we have path A, you do an increased profit share. Path B, which is shotgun offer. Path C is, we just consolidate. I take the other half of this one, you take the other half of that one. Which one do you, which one do you think you'll offer?

• 21:48Speaker 01

  I'll put the first one first.

• 21:50Alex Hormozi?

  Really?

• 21:50Speaker 01

  And then if they say no, because I still want half the relationships. I still want to run this business together if they onboard.

• 21:58Alex Hormozi?

  How many years have you done this with them?

• 22:00Speaker 01

  Five.

• 22:02Alex Hormozi?

  But it has been working.

• 22:03Speaker 01

  So before we just kinda.

• 22:05Alex Hormozi?

  We were friends.

• 22:06Speaker 01

  We would just let it be.

• 22:08Alex Hormozi?

  Yeah.

• 22:08Speaker 01

  Uh, there's not a lot of growing the business.

• 22:11Alex Hormozi?

  Right.

• 22:12Speaker 01

  As I said, it's just more like hiring and.

• 22:14Alex Hormozi?

  You have different goals.

• 22:14Speaker 01

  Yes. Now it's like, I wanna make each customer be happier with the service. I wanna improve our employee.

• 22:23Alex Hormozi?

  You have higher goals than what she wants to do, which there's nothing wrong with that. She's a family, she has another career, whatever.

• 22:27Speaker 01

  Yeah.

• 22:29Alex Hormozi?

  Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Leila and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, you've got 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 30-ish pages for each of the stages. Once you enter the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you,

• 23:14Alex Hormozi?

  which will probably be about 90 minutes. Um, and so if that's at all interesting, you can go to acquisition.com forward slash roadmap. R O A D map, roadmap.

• 23:25Alex Hormozi?

  Can I give you my due sense? I think you should do the equity swap.

• 23:30Alex Hormozi?

  Thing is, is that I think you'll be able to keep the relationship longer term. Basically, because if you have an ugly end to the partnership, which, you know, the profit share percentage, then there's like, well, now I feel like I'm getting paid even less. And you're really just doing what you were already doing, you're just being greedy. You know, there's the shotgun offer, which then, you know, one of you is writing a check to the other person for the next two years. And that kind of stings every month.

• 23:48Speaker 01

  Yeah.

• 23:48Alex Hormozi?

  The equity swap's a very clean, clean way to end it. And it's just unique to the situation that you have because you're both on multiple locations together. And so I think consolidating that is very clean. And then at that point, you can be a hundred percent friends and you can share all the secrets that are working, you know, with one another. But she can choose to do whatever she wants.

• 24:07Speaker 01

  With her location.

• 24:08Alex Hormozi?

  Right. And that way you can still talk business, you can still talk all the things you normally do, except the stakes are less. And if she doesn't wanna do so much, she's not gonna do it.

• 24:14Speaker 01

  Yeah.

• 24:15Alex Hormozi?

  That's my advice, because I think that you wanna run fast than someone else does. And that's very hard to, to keep long term.

• 24:21Speaker 01

  Yeah.

• 24:23Alex Hormozi?

  That's what I would do for partnership.

• 24:25Speaker 01

  How does it work if, let's say, the, she picked the one that's the second location?

• 24:34Speaker 01

  It wouldn't be the same at the equity of the less revenue ones?

• 24:38Alex Hormozi?

  Yeah, it depends how bad you want to get at. I'm serious. I gave, yeah, I gave my, uh, my best location to a partner so that I could split. You said earlier that you have about the same level of a margin between the two locations. You've got two and three. It's like if you got three and she got two, that would be a unquote unfair deal for, for you.

• 24:56Speaker 01

  Okay.

• 24:57Alex Hormozi?

  It would be, but then you're not going to be restrained anymore and you can go do all the things and you'll be at five fifty or six hundred or seven hundred in the next twelve months because you want to do more things.

• 25:05Speaker 01

  Yep.

• 25:06Alex Hormozi?

  So then, fine.

• 25:06Speaker 01

  Okay.

• 25:07Alex Hormozi?

  This is a small business. You can, you can very quickly change the numbers. That'll be the easy part.

• 25:11Speaker 01

  Okay.

• 25:11Alex Hormozi?

  This is the hard part.

• 25:12Speaker 01

  Yeah.

• 25:13Alex Hormozi?

  The rest of this is straightforward.

• 25:14Speaker 01

  Yeah.

• 25:15Alex Hormozi?

  Feel all right with that so far?

• 25:16Speaker 01

  Yes.

• 25:16Alex Hormozi?

  Okay. Let's talk pricing. I think that you should probably consider a plus twenty percent price raise on weekends. And that's because that's when demand is the highest, right? If somebody wants off hours, then they get off hour prices. If they want peak hours, then they get peak prices. And so that'll smooth out the demand within the facility so that you can actually just get more utilization out of it. And over time, what will happen is that you'll smooth out the, the weekdays, but then you'll have even more people on the weekends. You'll just end up making more. And I think that'll have a big difference on your profitability. And so this is where I would experiment with having a weekend search price. Now, you're having people just come back whenever. At the end of every single appointment, we need to have a BAM BAM, which is book a meeting from a meeting. So when they finish with the lashes, they walk them to the front and they say, cool,

• 26:01Alex Hormozi?

  your lashes are going to be done in, you know, two weeks or three weeks. Let's just get that on the calendar now because I'm getting booked up pretty quick. Is there any reason you can't do that?

• 26:09Speaker 01

  We do have clients who book their appointment way away.

• 26:12Alex Hormozi?

  But not all of them.

• 26:13Speaker 01

  Not all.

• 26:13Alex Hormozi?

  Right. But if we had all of them do it, we would make more, for sure. Because even at basic level, if they're coming back every four weeks or every five weeks, and we just get them always to come back every three weeks, you double the amount of times they come back in a year.

• 26:25Speaker 01

  Yeah.

• 26:27Alex Hormozi?

  It's a lot.

• 26:28Speaker 01

  Mm hmm.

• 26:28Alex Hormozi?

  So do you think you, your team can do that?

• 26:30Speaker 01

  Do we give them like incentive to book, rebook?

• 26:33Alex Hormozi?

  You can, or you can make it the job.

• 26:35Speaker 01

  So we do ask them and we do ask the client.

• 26:39Alex Hormozi?

  Every time?

• 26:40Speaker 01

  Yes, every time.

• 26:41Alex Hormozi?

  Okay.

• 26:41Speaker 01

  Um, just some of them, you know, they like, oh, I'll book later, busy.

• 26:46Alex Hormozi?

  Yeah, we would do basic sales training around this because it is fundamentally a sale. And so if someone's like, hey, I'm not sure, it's like, well, totally. If you want, I'm here and you're here, let's just pull up our calendars and that way we can just get it sorted right now. So I don't have to worry about it later.

• 26:58Speaker 01

  Mm hmm.

• 26:58Alex Hormozi?

  So it's just like a couple of lines that you can overcome with somebody that, I mean, if you just train them on like two things to say. If someone says, I can't do it right now and maybe like, I don't have my card on me. You're like, don't worry, we have the card on file and if you want here, let me just pull it up. Does next Saturday work? Does the Saturday after that work? Now, you might find that you have a better time booking the next appointment before you do the lashes.

• 27:21Speaker 01

  Okay.

• 27:22Alex Hormozi?

  Because I'm sure when they're, you have their lashes done, they like want to get out the door, right?

• 27:25Speaker 01

  Yeah.

• 27:26Alex Hormozi?

  But if you book it while they're doing it or before, it's like they're just sitting there.

• 27:30Speaker 01

  Yeah.

• 27:30Alex Hormozi?

  So you've got, how long does it take to do lashes?

• 27:32Speaker 01

  Like an hour.

• 27:33Alex Hormozi?

  Right. So if they're like, I don't have time to figure this out now, it's like, we have 60 minutes to just get one thing done, which is like, let's just book the next time you're in.

• 27:41Speaker 01

  Okay.

• 27:42Alex Hormozi?

  Do you feel like that's more reasonable?

• 27:43Speaker 01

  Yeah, we can try before they get the lashes done.

• 27:46Alex Hormozi?

  Yeah.

• 27:46Speaker 01

  That's a good idea.

• 27:48Alex Hormozi?

  I prefer to sell before because once someone has gotten the value, they want to leave. And so I want to do it before they've, you know, gotten the value because they're like, oh man, I want to get this done. And you're like, great, well, unless this, these are going to run out in three weeks. Let's get the next one on the calendar. Okay. So ban fan will just say before. Before slash during.

• 28:07Alex Hormozi?

  Getting a customer to come back and buy again is absolutely a sales conversation, though it walks and talks like an administrative conversation, a scheduling conversation. But a lot of sales conversations look, walk and talk like that, but they're not. And so we need to treat this conversation and outcome of getting them booked back in with the proper respect it deserves for the business. Because if all of a sudden we got 80 or 90% to rebook, it would dramatically change the outcome of the business. If that's the case, then we should put a lot of attention to this. And the nice thing is, is this doesn't even seem that hard, which are my favorite types of implementations. Not that hard, hugely impactful. Now, I do want to talk about the career path. Does everyone come in and start at 50%?

• 28:49Speaker 01

  No, so they start at. Forty.

• 28:53Alex Hormozi?

  Okay.

• 28:53Speaker 01

  Not everyone depends on their experience.

• 28:55Alex Hormozi?

  Okay. The way that I like organizing something like this is here, I'll draw it out for you. Let's say somebody can make eventually, you know, fifty five percent. Okay, so say like fifty five percent. And then we've got fifty percent, then we've got forty five percent. And then we've got forty percent, thirty five. And then third. All right, let's just say that that's hypothetically our, our little path here. All right, so they might start here and they're going to be junior lash. You know, technician, whatever. Now, we can intermediarily give them a bump and I like to have this basically every three months.

• 29:43Alex Hormozi?

  So this gives you almost a two year time horizon of improvements where you say, cool, I'm going to get you go from junior to lash tech.

• 29:54Alex Hormozi?

  And then you get the raise and then you go senior lash tech. Tech. And then you get the raise and then you get, what's another word for technician?

• 30:07Speaker 01

  Lash artist.

• 30:08Alex Hormozi?

  Perfect. So it's like technician is the first three. So you go junior, normal, senior. And then you go same thing, junior artist. And then you go artist. And then you go senior artist. So that gives you six title changes and six different compensation changes. And you just do it every three months. And then when they hit their, their three month, their six month, their nine month. What you can do is that with the increase of pay, you also unlock training. As you unlock these new things, we're going to give you another skill, which you can charge even more money for. So it just unlocks the earning because not only do they get higher income. So basically when you give them the title, they're still at their old pay, but you give them another skill they can charge more for.

• 30:53Speaker 01

  Yeah.

• 30:53Alex Hormozi?

  Does that make sense?

• 30:54Speaker 01

  Yeah.

• 30:54Alex Hormozi?

  And so that way they're making more money at every level. One is they just literally get better economics. The other is that they learn another skill that.

• 31:01Speaker 01

  A different tile.

• 31:02Alex Hormozi?

  Yeah, that they can, exactly.

• 31:03Speaker 01

  Okay.

• 31:03Alex Hormozi?

  Do you feel like you could break it into like six pieces? The training?

• 31:07Speaker 01

  Yes.

• 31:08Alex Hormozi?

  Cool. And then that gives you a career path that they can work into.

• 31:12Alex Hormozi?

  So what we're talking about here is deconstraining a supply-based constraint, which is how is she going to get more good technicians in each of her locations? And this is a super common constraint. And so if you're a business owner and you're being limited either by demand or by your ability to deliver on the demand, AKA supply. We run workshops here at our headquarters here in Vegas. And if you'd like my team to just directly take a look at your business, then you could just schedule a call with my team. And as long as, you know, we understand the business and we think we could help you out, we'll invite you out. So if that's interesting, you can click the link below this video. Otherwise, enjoy.

• 31:44Speaker 01

  What happened after two years?

• 31:46Alex Hormozi?

  Good question. I like the idea that you had where you have the one girl who's 33%. I think you just gave too much. And I think that you gave ownership rather than a profit share. And so the way that I explain this is, and you can draw this for them or you can have them watch this, right? Is that there's four things that you get with ownership. You've got risk, which I don't know if they want that. There's control, which right now you're not giving up. You've got profit.

• 32:12Alex Hormozi?

  And then you've got a sale, like if you sold the whole business. Those are the four components of equity. Now, they don't probably want this. They're not going to get that. And so what you can do is just give them the profit from the facility, but not ownership per se. So it's like, I'm just going to give you this profit share in the form of a bonus. And you can bonus them out every month. And so if we want to say like, what's the, what's the end goal? What do you think would be enough for them to be like, this is cool? Like this, is it a hundred thousand a year? Like, what's the amount of money that they'd be like, that's a lot?

• 32:43Speaker 01

  I think so.

• 32:44Alex Hormozi?

  Okay. So what we do is I always back into what my on-target earnings, it's called OTE, what I want my own target earnings to be. So if they're going to be a true owner, then they're not, are they going to be doing lashes or no?

• 32:55Speaker 01

  Yes.

• 32:56Alex Hormozi?

  Okay. I'll tell you where I'm going with this is that I want to create a path where they can get 20% of the profit of the facility. And so what you can do is say, cool, you're going to have the opportunity once you pass 24 months, once you pass two years. When I have my next locations that I'm opening up, I'll be able to place you in one of those new locations and you can have one of your own.

• 33:17Alex Hormozi?

  Offer all the money, you'll work and you're gonna get 10% year one and 20% year two. So that's four years. But you have to do this extra work that's associated with that. Now, the cool thing here is that it's not equity per se. So that if they're not doing a good job, you could say, you know what? Maybe you should just be a full-time tech. This much money has to go to getting somebody to run this thing. And it's either gonna be you or it's gonna be somebody else. So I'd rather give it to you because I trust you and I know you. But this gives you a very long-term career path for that.

• 33:50Alex Hormozi?

  So it's like, put your two years in, you're gonna continue to make more. You'll be fully trained up so that eventually you can train other people, which then you can open the new locations. And hopefully by two years of every location, you'll have enough cash flow to open another one.

• 34:00Speaker 01

  Okay. For this, I start them at 40, though. So should I start, I can't start at less.

• 34:08Alex Hormozi?

  Forty percent.

• 34:09Speaker 01

  Yes.

• 34:10Alex Hormozi?

  Well, you can't start.

• 34:10Speaker 01

  Can I stretch out the time? Okay.

• 34:13Alex Hormozi?

  The new ones, you can start lower. And when you're saying stretching out the time, you mean like?

• 34:18Speaker 01

  Instead of three months, can I do every six months?

• 34:20Alex Hormozi?

  You could. I like having more frequent, more frequent bumps. I'd rather, I'd rather you go 40, 42 and a half, 45, 47 and a half, 50, if you need to break up the increments.

• 34:29Speaker 01

  Okay.

• 34:30Alex Hormozi?

  That it's, I actually like the cadence a lot. I like three months because it's always, it's, it's right there.

• 34:34Speaker 01

  Yeah.

• 34:35Alex Hormozi?

  Six months, sometimes it's too far away.

• 34:36Speaker 01

  Okay, yes.

• 34:37Alex Hormozi?

  So yeah, if you have to with the existing ones, you can go 40 to 50 and just break it into, that's four chunks, plus the four title changes, that's eight chunks.

• 34:44Speaker 01

  Okay.

• 34:45Alex Hormozi?

  Does that work? Okay? And you could do it every four months and that still gets a year to you.

• 34:48Speaker 01

  Yes, I sense.

• 34:50Alex Hormozi?

  Doable?

• 34:50Speaker 01

  Yes.

• 34:51Alex Hormozi?

  Do you like this?

• 34:51Speaker 01

  Yes.

• 34:52Alex Hormozi?

  Okay, good. And to be clear, you're saying, I'm not gonna give you a facility when you get here. I'm gonna see you qualify.

• 34:57Speaker 01

  Yeah.

• 34:57Alex Hormozi?

  But you're gonna compete against all the other girls who are at two years. So you gotta be the best one.

• 35:00Speaker 01

  Yeah.

• 35:00Alex Hormozi?

  Because I'm gonna give it to the best person.

• 35:01Speaker 01

  Yeah.

• 35:02Alex Hormozi?

  That way, there's some competitiveness. Cool?

• 35:04Speaker 01

  Yeah.

• 35:04Alex Hormozi?

  Okay, great.

• 35:09Alex Hormozi?

  Let's talk about the membership. What ideas you currently have for the membership that you want to sell on the back end?

• 35:14Speaker 01

  Right now, we have a monthly membership, a six months and 12 months.

• 35:19Alex Hormozi?

  Okay, are they paying upfront?

• 35:21Speaker 01

  Yes.

• 35:22Alex Hormozi?

  They pay upfront for the whole six months?

• 35:24Speaker 01

  That's what I'm offering.

• 35:26Alex Hormozi?

  No, I love it. It's great.

• 35:27Speaker 01

  So for the monthly one, they not.

• 35:30Alex Hormozi?

  What do they pay for six and what do they pay for 12?

• 35:32Speaker 01

  Depends on the type of fills that they're getting now and we'd multiply it by six months.

• 35:38Alex Hormozi?

  Okay, what's the discount?

• 35:39Speaker 01

  Six month is 10% and 12 month is 15%.

• 35:44Alex Hormozi?

  Okay. And then 15%, got it. Do a lot of people do this?

• 35:50Speaker 01

  I haven't.

• 35:51Alex Hormozi?

  Okay, so you haven't done it yet. Okay.

• 35:52Speaker 01

  I just.

• 35:53Alex Hormozi?

  So let me give you some ideas on this. So first off, I would rather you give away free stuff than discount if you can. Because one, it'll be cheaper for you.

• 36:01Speaker 01

  Yeah.

• 36:02Alex Hormozi?

  Because your costs are so low.

• 36:03Speaker 01

  Yeah.

• 36:03Alex Hormozi?

  If we can make the value of whatever it is more than 10% off, which you can do for less than the 10% of the cost, because I'll get you, I'll bet that the the actual cost of stuff is, I don't know, nothing, almost for the lashes, I'm guessing.

• 36:17Speaker 01

  Yeah.

• 36:18Alex Hormozi?

  Right. So what kind of free thing could you add in that would be like, you know, valuable for them?

• 36:23Speaker 01

  Well, I already add then the free facials.

• 36:27Alex Hormozi?

  Okay.

• 36:28Speaker 01

  Those.

• 36:29Alex Hormozi?

  Okay, so they have facials?

• 36:30Speaker 01

  For the monthly one, the price don't change, but I do have a lot of benefits.

• 36:35Alex Hormozi?

  So you give them facials for free when they come in?

• 36:37Speaker 01

  Mm-hmm.

• 36:38Alex Hormozi?

  Okay, what else do you give them?

• 36:39Speaker 01

  Just discount products.

• 36:41Alex Hormozi?

  Okay, product discounts, okay.

• 36:42Speaker 01

  We also increase our referral from $10 to 50 if they are a member.

• 36:48Alex Hormozi?

  Okay, okay, I like all that.

• 36:51Speaker 01

  And then just anniversary gifts and birthday gifts.

• 36:57Alex Hormozi?

  Really good.

• 36:59Alex Hormozi?

  Do you look at our stuff? This is good.

• 37:00Speaker 01

  Yeah.

• 37:01Alex Hormozi?

  Yeah.

• 37:03Alex Hormozi?

  No, it's good. Anniversary and then birthday.

• 37:05Speaker 01

  More value, but don't.

• 37:06Alex Hormozi?

  You don't have to change the price. Yeah, no, I love it. So I want to understand what makes this membership that she wants to roll out compelling? Because sometimes people just roll out memberships that are just discount-based memberships and like, not my favorite way to roll out a membership. I want to add some significant benefits. So it's like you want to take away bad stuff, which would be money, and add good stuff, which would be value. I want to make it, dare I say, dare I say, an offer so good, people would feel stupid saying no.

• 37:31Alex Hormozi?

  And so what I'm going over here is what are the bonuses? And so if you're like, huh, I'd love to know how to structure bonuses. The good news is I have an entire chapter on how to structure bonuses inside my offers book on page 117. So how do you splinter stack what you have? Pull out the different components, order them in such a way that they're the most compelling as possible to each avatar. And I will say this, I think people will kind of sit on this continuum of like, they have no bonuses or they offer like a hundred bonuses. I think the magic is actually in the middle is you want to have each bonus in and of itself be worth the same value as the overall price. And so that someone could just say, I would do it only for this. I would do it only for the free facials, right? Now, would they do it only for the bump in referral bonus? Probably not.

• 38:16Alex Hormozi?

  Would they do it only for the discount? Maybe, but to me, up to this point, the most compelling thing she brought up was that they would get facials every time they come in, which I think is not a bad, not a bad thing. Let's see if there's something else that we can put up. So one other thing that you could consider doing, and I think this makes it kind of fun. It's up to you, is you could have a little sweepstake.

• 38:36Alex Hormozi?

  Where every month they're entered into kind of a giveaway where they get something cool. And then that way, when you select the winner, you can then advertise it kind of all over the place. And also if the person who, if they were referred by somebody, the person who referred them wins too. So that'll give them a really strong incentive to refer as many people as possible because those get as many chances as possible to win. And so I think it should be like, see, I'm thinking like something like $200 to $500 of, it has to be enough that they should be excited about it. So just like one last thing, like maybe, but like, I think if you was like $500 with like the, whatever the full suite, you know, deal is, you give it to one person a month. I think that's very exciting from a marketing perspective. It's not a huge cost to the business.

• 39:16Speaker 01

  Yeah.

• 39:17Alex Hormozi?

  Does that work?

• 39:17Speaker 01

  Yes.

• 39:18Alex Hormozi?

  Okay. So how are we going to sell it? So someone comes online, they put their card down, they show up in person for, you know, the $99 promo, right? While they're there, we're gonna try and book their next appointment before they even start or during the, during the appointment, we're gonna get them booked for the next one. Okay, where are we gonna do the upsell?

• 39:34Speaker 01

  For the service or the membership?

• 39:36Alex Hormozi?

  Membership.

• 39:37Speaker 01

  Now I'm starting with the clients who are already coming.

• 39:39Alex Hormozi?

  Okay, so the recurring clients?

• 39:40Speaker 01

  Yes.

• 39:41Alex Hormozi?

  Okay.

• 39:41Speaker 01

  And I say, why don't you try the memberships? You're paying the same amount you're paying now every two weeks.

• 39:47Alex Hormozi?

  Mm-hmm. Except you get all this stuff.

• 39:49Speaker 01

  Yeah, but then now you get all this stuff. And then you also get a free facial.

• 39:53Alex Hormozi?

  Yeah.

• 39:54Speaker 01

  Uh, just like today.

• 39:55Alex Hormozi?

  Yeah.

• 39:56Speaker 01

  I only asked like a handful of clients.

• 39:58Alex Hormozi?

  Okay, and how many people said yes?

• 40:00Speaker 01

  Uh, two.

• 40:02Alex Hormozi?

  Out of?

• 40:02Speaker 01

  Out of like five.

• 40:04Alex Hormozi?

  Okay, it's not bad. The one thing that I would do is, is the, so the facial is right now if they say yes?

• 40:08Speaker 01

  Mm-hmm.

• 40:09Alex Hormozi?

  Okay, that's good. Immediate bonus is strong. I mean, forty percent is not bad.

• 40:14Alex Hormozi?

  I would like it to be like seventy, though.

• 40:17Alex Hormozi?

  I wonder how many more reps you just need?

• 40:19Speaker 01

  Yeah, I think just offer more.

• 40:21Alex Hormozi?

  Yeah, cuz it's, because basically you have to, I think you have to get into the conversation and kind of learn the flow of it. But I would imagine if you say, hey, um, do, did you wanna get like some of these free things? And they'll probably say, yes. And it's like, cool, it doesn't cost you anymore. And then be like, oh, great, how do I do that? It's like, just sign up for the membership. And the way that I'd start it is say, you've been here?

• 40:43Alex Hormozi?

  Especially if you're upselling existing customers. You know, six times in the last, you know, whatever, six months. It doesn't really matter. So just look up the CRM, how many times have you been here? So like, hey, Charlie, you've been here, you know, six times in the last six months. Um, I realized that you haven't been getting any of this free stuff. Did you know that you were supposed to get that? And they're like, huh, I didn't know. It's like, yeah, all you have to do is just sign up as a, one of the members. You pay nothing more than you're currently paying, but you just get all of these things that you should already be getting cuz you've already. Cuz like, if we can frame it on the fact that they should have already been getting it, it's kind of like a default close, rather than trying to get them to opt into something. I want the positioning to be like, you've already been paying for it and opted in for it. Now we just need to formalize it.

• 41:25Speaker 01

  Yeah.

• 41:26Alex Hormozi?

  I remember reading a study in a book called, I think it was like 50 scientific ways to get to yes. And one of the things they talked about in the book was that one country was able to get like 80% of people to opt in to be an organ donor. Whereas other countries average like 10%. And the one thing that that country did is they had people opt out of being an organ donor rather than opt into it. And so to me, that almost permanently changed how I saw upselling, which is how do I make the thing that I want someone to do appear like the default option, as in they have to opt out of it. And so the way that I'm trying to frame this upsell for Ani is that, hey, you've already opted into this membership. You just haven't been getting the bonuses.

• 42:09Alex Hormozi?

  So let's just like formalize you getting what you already should have been getting, rather than do you want to do this new thing? So upsells in a true new sale scenario, you might be at 30 ish percent, 20 to 40, whatever. And that's the numbers that she's getting, which is fairly typical. But if we can structure it so that it feels like a default close or an assumed close based on past behavior, we might overnight be at those 80, 90% close rates, which is where I want it to be. The more you can get it to be like, oh, you should already have this. And the less pressury it is, the more likely they're like, yeah, okay, sign me up. How are you actually facilitating the transaction? You have their card on file, right?

• 42:45Speaker 01

  Yes.

• 42:45Alex Hormozi?

  So do you say, hey, we can just use the card you have on file? Do you say that?

• 42:51Speaker 01

  No, because I haven't asked that many.

• 42:54Alex Hormozi?

  Okay, well, I would have that as my actual final CCA. Is that way you can say, hey, if yes, I'll give you the facial right now. And we'll get you booked for the next time you're out here. You'll also get a facial then too. And you get some of these other things. And we come to the front, card on file work, great. And then that way, when they check out, boom, it's done. They're on recurring and they just sign the thing and then they're in.

• 43:15Speaker 01

  Yeah.

• 43:16Alex Hormozi?

  Seamless.

• 43:17Speaker 01

  What if they don't be booked?

• 43:19Alex Hormozi?

  They don't rebook. To be fair, the rebook is a is an easier sale than the than the membership. We have to first be able to get close people on rebooking. If someone's not gonna come back again, they're definitely not buying a membership.

• 43:29Speaker 01

  Yeah.

• 43:30Alex Hormozi?

  So we gotta like, like, we we we foot in the door, like, get the small win.

• 43:33Speaker 01

  Yeah.

• 43:34Alex Hormozi?

  And then offer free stuff and then go for the membership.

• 43:37Speaker 01

  Okay.

• 43:37Alex Hormozi?

  It's a three step.

• 43:38Speaker 01

  Okay.

• 43:39Alex Hormozi?

  Does that make sense, though?

• 43:40Speaker 01

  Yes.

• 43:40Alex Hormozi?

  Okay. Good. So that's how that's how I would pitch it for the existing people.

• 43:45Speaker 01

  Do I bother to sell the six and 12 months at all? Or only people ask?

• 43:50Alex Hormozi?

  So.

• 43:50Speaker 01

  That's a different sale.

• 43:52Alex Hormozi?

  So I'll tell you, so the way it actually would work is that after they say yes to the the membership. You then say, would you want to save some money?

• 43:59Speaker 01

  Okay.

• 44:00Alex Hormozi?

  And then you say, cool, if you want to save some money, you can prepay it today. Would you prefer 12 or 6? Like, you're getting into a sales business. Like, this is how it works. The reason prepayment for memberships is so valuable is, one, people who prepay churn at a significantly lower percentage. Number two, it pools cash for for the business, which allows you to grow more rapidly if you want to. Pay people more aggressively and fundamentally, cash today is always worth more than cash in the future. And I would say, third, and maybe more, most importantly, if they're prepaying for the year, it's unlikely they're gonna go somewhere else. So you basically lock in the customer for all of the future business, rather than maybe they're only gonna come four more times this year, and they're gonna mix and match between you and two other places. I'm gonna draw this out, because I think it's worthwhile. So first, we ban fam the appointment. We have to get the next booking. Then we have our free offer.

• 44:44Alex Hormozi?

  That's kind of the B, right? We have a free offer. They say, yes, I want the free eyebrows. So we say, cool. So we already know when you're coming back. So you might as well just sign up for the membership. Yes. So now we have our membership. Yes, if they say, if we're already in on the membership, just from one tip. This happens separately from when they check out. So this is at the at the station. When they go up to check out, then we say, wanna save some money? Save whatever, $100, $150. Now, they're gonna be looking at their bill, and it's almost the whole bill. So they're like, yeah, I I wanna save $150. It's like, awesome. Prepay

• 45:21Alex Hormozi?

  the next 12.

• 45:24Alex Hormozi?

  And if they're like, oh, I don't want to do that. You're like, oh, if you want, we could just prepaid a six. You want to do six?

• 45:29Alex Hormozi?

  That way you can save the money. But to make it really sexy is you say, oh, would you want the day to be free? Cause they're at the checkout. They're right there. The card's on file. They're about to leave. Like, do you want the day to be free? Oh, cool. Just sign up for the next 12. We already have the next time you're here. So you're good to go. Just check the box. Now that, to be clear, is going to be off what you're going to save for the next year. But we'll apply the first discount tonight. Feel all right with that? Is that too complicated?

• 45:53Speaker 01

  No, I get it.

• 45:54Alex Hormozi?

  Okay, but it's just bam bam?

• 45:56Speaker 01

  It's just the wording.

• 45:57Alex Hormozi?

  Yeah, for sure. This is training. This is how you train staff to do this.

• 46:00Speaker 01

  I need the recording. So I can learn it and then train other people.

• 46:04Alex Hormozi?

  Yes.

• 46:04Speaker 01

  The training of the people is hard part.

• 46:06Alex Hormozi?

  Well, why don't we just cover the training right now? So if you're in a service business, you're in the recruiting, hiring and training business for the most part. Because selling lashes to me is not super hard. Like, beauty in general tends not be difficult to sell because people just like go in and they look better. So it's a very easy sale compared to like, hey, work out for a year and wake up early and stop eating the foods you love. Much harder sale. The real thing that will scale this brand is her ability to scale training to new people who come in the door. And the arbitrage of the business is being able to get someone in who has low skill, train them up on your system and then be able to charge a higher rate for what that skill commands in the marketplace. And so basically the arbitrage of I can train someone in a week and take them and pay them what I got them to say yes to on the way in.

• 46:50Alex Hormozi?

  And then with the added training that I'm paying for, I can now make this spread on what the market now values this new skill at. And fundamentally, that arbitrage is what exists in service businesses and how service businesses make money. So she's got to be able to teach other people how to do this. The way that you have to train this is that you have to basically have them come in 30 minutes early or whatever, you know, whatever the gaps are during the day. And honestly, like, this is going to sound crazy, but like every day for 30 minutes, they role play with each other. So if you have four girls there, it's two and two, and one person's in the chair and they do the first part. Hey, so what time do you want to come in? And then you have to, well, I'm not sure. And then it's like, well, let's pull up your calendar. Like, I'll tell you what days I have open.

• 47:29Speaker 01

  Yeah.

• 47:30Alex Hormozi?

  If you want to do it with me. And they should be incentivized to do that because they want to get the money.

• 47:33Speaker 01

  They only have to train the front desk, one good, one lucky.

• 47:37Alex Hormozi?

  That's fine. Then it's even easier. So you just have to role play with them. Don't just say, here, say these words. It's not going to work. It's just repetition over and over and over again. As soon as they mess up, say, cool, say it like this, try it again. Say it like this, try it again. You did great. Do it five more times. Right? And we'll try it from the top again. It's just a ton of repetition.

• 47:53Speaker 01

  Yeah.

• 47:54Alex Hormozi?

  And then when somebody comes in,

• 47:57Alex Hormozi?

  they'll probably say it the right way.

• 47:58Speaker 01

  Okay.

• 47:59Alex Hormozi?

  Okay. All right. So the last piece is really just the adds an attribution. So this is actually very integrated into the brick and mortar. Okay. So when someone walks in, so this is during, right? This is after,

• 48:14Alex Hormozi?

  which is these ones. That's after. And then I know this is looks weird, but this is before. So when someone walks in the door, what we want is we want to immediately get their ID. So, hey, do you have your ID on you? As soon as they walk in, that confirms the appointment.

• 48:31Alex Hormozi?

  Then you say, great. Do you have the card that you want to put down today for to pay for the thing?

• 48:36Speaker 01

  So they already have that card on file when they book.

• 48:39Alex Hormozi?

  Good. So we're just confirming it.

• 48:40Speaker 01

  Yep.

• 48:41Alex Hormozi?

  Now, the next piece is great, sign in. And on the sign in, we want to have the dropdown of where they came from. That way we can have our attribution for the marketing. And the referral code if someone's getting some sort of referral benefit. The longer you stay in business, the more you are compensated by the quality of your decisions, not how hard or how long you work. As you increase leverage in your career, you want to make better and better decisions. And one of the easiest ways to make better decisions is have good, clean data. And so you can always just do post-it notes and duct tape in the beginning. And that's how a lot of people start. There's nothing wrong with that. But at some point, you have to make bigger and bigger bets on where you're going to invest, where you're going to grow, how you're going to expand.

• 49:24Alex Hormozi?

  And in order to make these irreversible bets, we need to collect the data so we don't bet the farm on something that's a loser. So that way, when every single person walks in, it's like, great, you have ID on you. Awesome. Cool. Is this the card you want to use for today? Just confirming because sometimes people want to change their card out. You're like, awesome. Uh, can you sign in right here? Where'd you hear about us? Great. Did anyone send you? Cool. Let me know who. If not, then there you go. So then you got your referrals tracked, you got your ad attribution tracked, you got the right cards on file, and you have confirmation that is the person. The reason I asked for ID first is because it's less intimidating. This is just like it's a checklist and they just follow up with every single person who walks in the door.

• 50:00Speaker 01

  Yeah.

• 50:00Alex Hormozi?

  Like, the fact that you have this waiting area is the biggest advantage for most service businesses that are underutilized. It's because you can check off all things. You can get your reviews, you can get your next deployment done, you can get the card on file, you can find out where they came from, you can get all of this stuff done before they walk in to get their service.

• 50:15Speaker 01

  Yeah.

• 50:17Alex Hormozi?

  That's the big stuff.

• 50:19Alex Hormozi?

  But I think we have to do the partnership thing. I think that's the big deal.

• 50:22Speaker 01

  Yes, that's what was holding me back.

• 50:24Alex Hormozi?

  No, it is. Okay, so let's recap all this for you. Let's go easiest and fastest. So I use ICE as my little moniker, so impact, confidence, ease. So how likely is it this is going to work? How easy is it? And how big of an impact is it going to make? So something that's really easy, really fast and high impact, you do this first. And some things are high impact, like the partnerships, but it's going to be not easy. Okay. So ICE is a really common investor framework and it also maps pretty closely to the value equation, which is like, what are the four elements of value? You have the dream outcome, which ICE is the I of impact. You have the perceived likelihood of achievement, which is the confidence score, how likely is this to occur? And ICE just says ease, but I split that into how fast and how much effort is there?

• 51:09Alex Hormozi?

  So there's four variables in mind. If you want to use ICE, you can use three, whatever. But the point is that we have to make these appraisals based on what expected return do we have for the resources we plan to allocate into the business? What bets are we going to make? And so zooming all the way out, I define strategy as prioritization of resources. There's a lot of things we could do to Ani's business, but the idea is that we want to allocate our resources to the fewest things that are going to give us the highest probability of high returns. And so this is how we reorder these things that we went over so that she can get the most out of it. Number one is I do think weekend pricing is just like easy profit that will make a huge difference for the business. All you have to do is just have two sets of pamphlets or whatever that you have on the counter.

• 51:54Alex Hormozi?

  And when it goes Thursday, then you have Thursday through Friday pricing or Thursday through Saturday pricing.

• 51:57Speaker 01

  What the regular clients get. Annoy, absorb, that.

• 52:03Alex Hormozi?

  Well, if you want to, I can grandfather you in.

• 52:06Speaker 01

  If you have a membership.

• 52:08Alex Hormozi?

  Also great too. Another great way. Right, and actually, that's amazing. Hold on, that is probably the biggest benefit that we can put in this thing. For the membership is you have.

• 52:19Speaker 01

  Same pricing.

• 52:20Alex Hormozi?

  Yeah, non surge pricing. There we go. Now it's meaty. So one of the beautiful things is that you can create a problem and solve it. So we're gonna raise the price, but if you set up a membership, you're not gonna have a price raise. Well, it's only for weekends. So if you wanna come on peak hours and not pay peak prices, just join the membership.

• 52:41Alex Hormozi?

  I like that. That sounds good. That feels sellable. Okay, so weekend pricing, which will then pair with the membership offer.

• 52:55Alex Hormozi?

  And then I think we have our before process. Or five, we have our during process. Or five, we have our after process. Six, we have career path.

• 53:16Alex Hormozi?

  And then seven, finally.

• 53:20Alex Hormozi?

  We have our partnership issues. Okay. So weekend pricing, I think for you is gonna probably, I think it's gonna be a huge difference because it's gonna flow people right into the membership. So I think you'll probably be able to see a 10% ish increase in revenue without really doing anything else. Cause 50% of the time, you get a 20% bump.

• 53:38Speaker 01

  Do you think 20% is too high for a.

• 53:41Alex Hormozi?

  Do you wanna do 10%?

• 53:43Speaker 01

  Think we can start with 10.

• 53:44Alex Hormozi?

  Okay. You have to be sold on it. If you're not sold on it, it's not gonna work. So if you feel good with 10, I'm good with 10. Alright, so bump it by 10, which means you'll probably have something like a 5% increase in revenue. But that 5% increase in revenue, given your 28% margins, goes from 28 to 32, sorry, 28 to 33. And so it's closer to 20% profit increase for you. So even though it might sound small, right? Yeah, it's a whole nother location. Right, not bad. Membership offer. So the thing here is that you said the, a lot of customers stay past three months, right?

• 54:15Speaker 01

  Yeah.

• 54:15Alex Hormozi?

  What percentage do?

• 54:16Speaker 01

  About 50, yeah.

• 54:17Alex Hormozi?

  Right, so if we can get that to something like 70% plus, that will probably be one of the largest changes in the business, because you don't have to pay to acquire those customers, and they just basically are always profitable going forward. And so that's probably somewhere in the neighborhood of like a 20 to 30% lift in the business. So now, the before process, this is just going to allow you to increase your ads, because you're going to finally be able to attribute where are these people coming from, right? So we're going to have that, plus we're going to get more people to come back, because we're already booking their next appointment from right as they walk in, right? Then here's where we have our upsell to a membership is at the chair, because that's when they have to do the eyebrows.

• 55:01Alex Hormozi?

  Unless we can stuff it before, that's up to you. I feel like it'll work better in the chair.

• 55:05Speaker 01

  I think it's, well, not in the chair, because then they won't be talking. They need to keep the eyes closed and get the service done.

• 55:13Alex Hormozi?

  So you think it should do before?

• 55:14Speaker 01

  Yeah.

• 55:14Alex Hormozi?

  Okay, so then.

• 55:15Speaker 01

  Booking the appointment and then.

• 55:18Alex Hormozi?

  Well, then let's do this.

• 55:19Speaker 01

  Do the membership.

• 55:19Alex Hormozi?

  Good thing is we can just cross this out. So you're just going to have a before and after. So before they walk in, you're going to get your ads, you're going to get their comeback, you're going to give them the upsell offer, and you'll get your reviews, because I don't want you to stop doing them.

• 55:31Speaker 01

  Yeah.

• 55:32Alex Hormozi?

  Okay, so that's all loaded before. Afterwards is basically second shot and prepayment. So they've already agreed, remember earlier, that they were going to sign up for the membership? On the way out, we say, hey, you want to have today free? Because the today free is basically what they would get off if they sign up for a year. But remember, you're not actually giving them today free, you're just going to say like, that's what you're going to save in discounts. Yeah, okay, cool. So that's where you're going to go, and that'll pull up cash, which I think will be another probably 20-ish% that you can get from the business. The career path thing, this is just going to decrease the churn, right? For your, for your staff. And ultimately, the thing is, is if you keep the staff, then you won't have to keep retraining people. And so the profit margin of the business just naturally improved, because the girls get better, they get more return customers, they have more repeats.

• 56:16Speaker 01

  Yeah.

• 56:16Alex Hormozi?

  And then finally. The partnerships. So you're gonna have to have basically three conversations. Well, really just two, because one you're fine with, which need to, you know, increase the ad spend, which we can do once we actually have tracking. The hard conversation, I think you should do the equity as well.

• 56:35Speaker 01

  Okay.

• 56:35Alex Hormozi?

  Even if it means you're getting the smaller one, because you're gonna be able to go all in on it. And just, I'm sure that you'll be able, if you're fully focused, you'll be able to turn it around in two seconds.

• 56:43Speaker 01

  Okay.

• 56:44Alex Hormozi?

  And then the, the one girl who has her foot out the door, I'll just give her some sort of buyout, so that she has some, some sort of stability over the next 12 or 18 months.

• 56:52Speaker 01

  Okay.

• 56:53Alex Hormozi?

  And then it's like, hey, just do one, one favor in exchange for this, just help me replace you.

• 56:57Speaker 01

  Yeah.

• 56:57Alex Hormozi?

  That's it. How does this feel?

• 57:01Speaker 01

  Good.

• 57:02Alex Hormozi?

  Feels like work.

• 57:02Speaker 01

  Yes. I like it.

• 57:04Alex Hormozi?

  Let me make a little bonus one, 2.5 is a follow up. With leads. So you could probably pay someone $40,000 a year to do one thing, which is just call the leads that come in. Do nothing else. You have to do anything else. You can stay at home, call the leads within one minute. So what we're gonna do is we're gonna make that number one. So, oh, by the way, maybe make that zero. This one is a two to three X for the business.

• 57:32Alex Hormozi?

  That solves your lead gen issue.

• 57:35Alex Hormozi?

  So you're gonna hire somebody who's gonna call the leads. We're going to roll out the membership offer with the weekend pricing. We're gonna train the team on the new pricing. The reason it's gonna make sense is because they're gonna have this career path. And then you're gonna have this conversation with your partnership, because now you're gonna have a more trained staff. They're gonna get paid better.

• 57:51Speaker 01

  Okay. So when do we call the leads? We say,

• 57:54Alex Hormozi?

  Immediately.

• 57:54Speaker 01

  Hey, we saw that you tried to book an appointment and it didn't go through.

• 57:58Alex Hormozi?

  I'll just say, hey, saw that you booked our $99 promo. What time do you want to come in?

• 58:02Speaker 01

  Okay.

• 58:03Alex Hormozi?

  And then, great. What card do you want to use? And they're gonna say, sure, here's my card. And if they don't say it's like, why do you need my card? You say it's how we've always done it. That's how we always do it. That's how you say it.

• 58:14Alex Hormozi?

  All right. Awesome job, honey.

• 58:16Speaker 01

  Thank you.

• 58:16Alex Hormozi?

  Yeah, you bet. If you liked this Cash Guys episode, which we keep making because you guys keep asking for them, we have another one of a female stylist who is a little bit smaller in the business, about $300,000 a year. And I think you'll love it. So go check that one out. Enjoy.