Brutally Honest Business Advice | Ep 850

In this Q&A episode, Alex (@AlexHormozi) goes rapid-fire with real entrepreneurs, giving blunt, tactical advice on everything from scaling service businesses to fixing offers, boosting CAC, and knowing when to walk away. 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.

• 0:01Alex Hormozi?

  Let's do Q and As, raising Qs in whatever order. Yes. So you sell people to people, you do human trafficking, you're not, you have no, you have no revenue and you want to get $2 million a month. So what's the issue?

• 0:13Speaker 01

  Yeah, no, I'm restarting, I'm restarting that company and so there's a long story in that. But my question is a personal question.

• 0:20Alex Hormozi?

  We should do the little thingy jingy.

• 0:21Speaker 01

  Right, right. So I'm a father, single father, I got two boys here and my name is DJ Christopherson. There we go. I sell people to people. I'm restarting my virtual staffing company and where it currently had zero revenue. It's just a matter of getting started.

• 0:35Alex Hormozi?

  Okay.

• 0:35Speaker 01

  And so we're really confident in that. My question is on a more of a personal one. So I'm a single father in a serious relationship and she's not a business person at all, very sweet and supporting, but what would you say would be some things to prepare her for when it comes to?

• 0:53Alex Hormozi?

  So your spouse or not spouse, your partner is that?

• 0:55Speaker 01

  My, my partner. I mean, she doesn't live at the house yet. She's, it's long distance, but it's coming together, but it's getting really serious.

• 1:01Alex Hormozi?

  Okay.

• 1:01Speaker 01

  Preparing her for being married to a type A?

• 1:06Alex Hormozi?

  I think you should give her a try before you buy.

• 1:08Speaker 01

  Yeah?

• 1:09Alex Hormozi?

  Seriously.

• 1:10Speaker 01

  How do you mean?

• 1:10Alex Hormozi?

  So fly out, spend two weeks with me. I'm not going to cater to you. I'm going to live my life. If the way that I live my life, the way this works, this is how it's going to be. If you like that, let's rock and roll. If you don't, I don't want to change.

• 1:22Speaker 01

  Yeah, that's true. That's perfect. No? I love it. That's, that's great. Thank you.

• 1:33Alex Hormozi?

  Crushed it.

• 1:35Speaker 01

  Hey Alex, thanks.

• 1:36Alex Hormozi?

  Yeah, you bet.

• 1:37Speaker 01

  So my name is Zach Levine. We sell pain management services to New Yorkers.

• 1:43Alex Hormozi?

  Okay.

• 1:44Speaker 01

  Integrated pain, so chiropractic PT.

• 1:47Alex Hormozi?

  But like old people, young people, women, men?

• 1:49Speaker 01

  It, we have a bunch of avatars, which is potentially a problem.

• 1:52Alex Hormozi?

  Brick and mortar?

• 1:53Speaker 01

  Brick and mortar. We're out of network insurance. We have just a dying, which we'll get to.

• 1:58Alex Hormozi?

  Sure.

• 1:58Speaker 01

  Reason. We do 4.2 in revenue.

• 2:00Alex Hormozi?

  Okay. So you're mostly insurance or you're mostly cash?

• 2:03Speaker 01

  Mostly insurance.

• 2:04Alex Hormozi?

  Oh, mostly insurance, out of network. Got it. Yeah, yeah, yeah. No, I'm investing in a rehab facility. So I'm familiar.

• 2:09Speaker 01

  Okay, cool. Yeah, 4.2, want to get to 20.

• 2:12Alex Hormozi?

  Okay, got it.

• 2:13Speaker 01

  We have three offices and don't know exactly how to transition out of the dying business model. Obviously our industry is growing.

• 2:20Alex Hormozi?

  Yeah. So what, what business model are you thinking about switching to?

• 2:26Speaker 01

  Cash.

• 2:28Alex Hormozi?

  I have a bunch of friends who are in network and murdering it.

• 2:30Speaker 01

  In network, yeah.

• 2:31Alex Hormozi?

  Do, why don't you get in network?

• 2:33Speaker 01

  We've just heard it's a grind, you know, it's commoditized.

• 2:36Alex Hormozi?

  It is commod, I mean.

• 2:36Speaker 01

  Race to the bottom, yeah.

• 2:39Alex Hormozi?

  I mean, I mean, basically you have three different, three different ways around it. So why, let me ask the question, why do you feel like the way that you have right now is dying from out of network?

• 2:48Speaker 01

  Uh, because reimbursements from payers are declining each year, whereas inflation costs are going up. Um, and because the amount of people who have out of network benefits is dwindling as well. It's mostly just corporate, and that's even declining. Yeah, they're just getting smarter and they want to push everyone in network. So we're getting squeezed, administrative burden through the roof.

• 3:08Alex Hormozi?

  Mm hmm.

• 3:09Speaker 01

  Prior costs, all this crazy shit.

• 3:11Alex Hormozi?

  So you basically see it as like, I could either go in network and then make your entire business model around operational efficiency. Which is, which is, I mean, I've got somebody who murder it doing that. So I don't think there's anything wrong with that. Or alternatively, you just go premium, be the best and be, be private, right? Be cash back. So the question is, how do you transition it?

• 3:31Speaker 01

  Yeah, yeah, I think we've decided as a team collectively, we just don't want to be in network.

• 3:35Alex Hormozi?

  Sure.

• 3:36Speaker 01

  Because of the lifestyle, you know, whatever.

• 3:37Alex Hormozi?

  I guess, and who you deal with.

• 3:39Speaker 01

  Yeah.

• 3:39Alex Hormozi?

  Yeah, a pain, um, literally for you, uh, or really, I guess for them. So I think, so fundamentally, I think you just have to think about this as basically starting a business over, but with resources already. So it's like, you don't have to think about, you don't really have to think about the service. You probably have to think about the packaging itself. It's like, what's the, what's the grand sum offer for this?

• 3:59Speaker 01

  Yeah.

• 4:00Alex Hormozi?

  And you'll, you'll have a number of, like, you're, you're just going to become a normal business. Which is just like, you will run advertisements and you will make offers to people and they will come in and then they will take their credit card out and they will buy stuff from you. And so it's probably more that it conceptually feels complex more than it actually is. And so it's probably a ripping the Band-Aid off thing, uh, which is that I would just out like, so one is what channel of acquisitions are you going to use? I'm guessing right now, is it mostly word of mouth?

• 4:29Speaker 01

  Yeah, it's referrals.

• 4:30Alex Hormozi?

  Okay, yeah.

• 4:30Speaker 01

  Business for a long time.

• 4:31Alex Hormozi?

  Yeah, so one is you can start sell, upselling existing customers. So like, obviously they have what's covered in from insurance, but. Then, you know, upselling other packages that'll get your team a little bit used to be like, it's okay to pay us. That's from like a really tactical level. But from an acquisition perspective, you've got content, you've got outreach, and then you've got, you've got paid ads, right? And alternatively, you could have affiliates. So we have to pick. So of those four things, which ones do you feel like you are better suited? So from affiliates, it's like, go to shoot injury attorneys or like you want to find the, the person that they're going to see prior to hitting you up.

• 5:04Speaker 01

  Tried a bunch of that and the issue there is that they want to send in network or if you're injury attorneys to workers comp cases, which they'll pay very well. So.

• 5:12Alex Hormozi?

  So you don't want to go from that perspective. So you don't want to do affiliates. Content probably, in my opinion, probably isn't the, the, the best way. So then you have outreach and you've got paid ads. I'm going to bet paid ads is going to be your better bet since it's local. It's pretty straightforward. Operationally, it's not complex. Like running paid ads in a local area is like, pretty easy. You drop a pin, you do.

• 5:32Speaker 01

  You say we need more, like, so obviously we have a bunch of different types of avatars. So like really nail, like, how would you say going about?

• 5:38Alex Hormozi?

  You're probably going to end up finding that you have one to three offers that actually convert. And then the remainder of your business will be upselling and cross-selling when they walk in the door. So instead of thinking about your business as having like, you know, we have 15 services. We advertise all 15. You're going to have one to three that convert really profitably on the front end. And then the remainder of your business is cross-selling and upselling. So it's like, you're going to have the most efficient door into your business. And then you'll end up just cross-selling, upselling people and retaining people from, from, from there. And so like in terms of next steps, it's, you need to record an actual ad for an offer and then put it on meta and then drop a pin on the map and do a 10 mile radius. Hopefully, all three are close together.

• 6:19Alex Hormozi?

  And you'll run the ad that'll then go to either a CRM or if you're low tech, it can just go to a Google Sheets. And then you can have your front desk, call them within 60 seconds. And then if they don't pick up, call them again and get them booked. Because your time is valuable, you'll probably want to consider running some sort of highly discounted assessment on the front end. So that'd be like a $200. Yeah, x-ray or something like that, that they can get for 19 or 20. You don't care about that. You just want a credit card on file so that when they walk in the door. You have two things. One is that when they walk in the door, uh, well, one, you, you want them to walk in the door because they paid. Two, you can charge a no show fee if you want to. Um, but typically if you're getting even a low ticket amount, you'll be in the seventy to eighty percent sure rate. So you won't waste, uh.

• 7:02Speaker 01

  So how do you pay upfront, actually putting out their credit card?

• 7:05Alex Hormozi?

  Yeah. Yeah. And just for the, for the discount offer, now when they come in the door, you'll do the assessment. And then after the assessment, you don't treat them. You'll do the sale appointment then. You sell at point of greatest need, not point of greatest satisfaction. So at that point is when you'll make the offer. Um, and then you'll be like, hey, awesome. You want to use the card we have on file because you already have it on file because you got it earlier and make so much for their sale.

• 7:26Speaker 01

  Got it.

• 7:27Alex Hormozi?

  Does that help?

• 7:27Speaker 01

  Yeah, definitely.

• 7:29Alex Hormozi?

  But that's what you have to do. Like you, you have to learn how to acquire customers that are cash based. And so that means you have to run ads and you have to sell shit.

• 7:35Speaker 01

  What would you do? Like if you were saying from a strategy standpoint, like we have the current business that's doing four point two million in revenue.

• 7:40Alex Hormozi?

  You're going to keep that business. So your, all of your discretionary resources are going to go towards this. If you want to build a, build a bridge to tomorrow.

• 7:48Speaker 01

  Yeah. Should we do any of the more on the things that are still working within out of network? Like it's really just a, you know, we have limited resources. How much should we spend on each?

• 7:58Alex Hormozi?

  Let's build a new. Sorry.

• 8:01Speaker 01

  We're at basically at zero.

• 8:02Alex Hormozi?

  Oh, shit. Yeah.

• 8:04Speaker 01

  It's part of the problem.

• 8:07Speaker 01

  We waited. Yeah.

• 8:08Alex Hormozi?

  Yeah, I know you're.

• 8:09Speaker 01

  Longer than.

• 8:09Alex Hormozi?

  Yeah, I understand. Well, you can't control. So unfortunately, because you can't control how you're reimbursed.

• 8:15Speaker 01

  No, but we can remove the lowest reimbursement. We're reimbursing patients, which is like remove Medicare, then we can lower our cost structure. We could go that route.

• 8:22Alex Hormozi?

  I think that would probably be the first thing that I would do.

• 8:25Speaker 01

  And then.

• 8:25Alex Hormozi?

  Cause you want to free up cash well. So yeah, you, you use this resources in terms of time and money to build the bridge.

• 8:32Speaker 01

  Okay.

• 8:33Alex Hormozi?

  Makes sense?

• 8:33Speaker 01

  Yeah. Thanks a lot, Alex.

• 8:34Alex Hormozi?

  Yeah, you bet.

• 8:35Speaker 02

  My name's Cody. Um, I sell roofs to people. Um, we did a hundred and forty million, uh, last year, trying to do two hundred and fifty million, uh, this year. Trying to figure out how to follow the principle of giving away more and, uh, you know, guarantees and, and bonuses when I have such high hard cost.

• 8:50Alex Hormozi?

  Yeah.

• 8:50Speaker 02

  And such a high ticket item.

• 8:52Alex Hormozi?

  Yeah. Well, what are gross margins right now?

• 8:53Speaker 02

  Uh, forty percent.

• 8:55Alex Hormozi?

  Gross. What's net?

• 8:56Speaker 02

  Ten to fifteen.

• 8:57Alex Hormozi?

  Okay, got it. Do you want to sell it or do you just want to keep it forever or?

• 9:00Speaker 02

  Well, I actually just sold my roofing business and now we're part of a PE firm that, that now I'm directing that, that entire.

• 9:07Alex Hormozi?

  So are you the platform?

• 9:09Speaker 02

  Yes.

• 9:09Alex Hormozi?

  Okay. So you're the platform. How many tuck ins have they done? Got it. How long has it been since they started?

• 9:14Speaker 02

  Uh, about three, four years. Um, I, I just got acquired thirty day, or we just closed thirty days ago. And now they're trying to roll everything into my brand and I'm

• 9:23Alex Hormozi?

  Chaos.

• 9:24Speaker 02

  Stir your head, Dan.

• 9:24Alex Hormozi?

  Yeah, got it. Okay. So sorry. Go back to the original question. Do you think I have like better context on this?

• 9:28Speaker 02

  Okay. So how do I give, uh, you know, follow the principle of, of give away more value, make the, you know, offer so good. It's, it's, you gotta feel dumb saying no when I have such high hard costs. I, you know, I can't really do a money back guarantee. I can't really give away more than a, you know, a roof.

• 9:44Alex Hormozi?

  Well, the question is, what is it? Is that the constraint? Well, like, is that the thing that's limiting the growth of the business?

• 9:49Speaker 02

  In, in my theory, yes, because if I create a good enough offer, then, uh, I could roll that offer out to the other eight, eight other brands. And that would be the biggest amount of leverage that I could deliver, you know, in the shortest amount of time.

• 9:58Alex Hormozi?

  And is everyone insurance based?

• 10:01Speaker 02

  That's why they acquired us because we're retail.

• 10:03Alex Hormozi?

  And so you're the only guy selling just new roofs. Everyone else is doing storm chasing and damage repair and shit like that.

• 10:08Speaker 02

  Correct. And what they want us to do is bring the retail model to the other brands, um, and add another layer is we sell everything a hundred percent virtually. So no in-home appointments. It's, it's all, you know, digital. And so that's what they, that's the vision is, is taking that, you know, nationwide.

• 10:21Alex Hormozi?

  Centralized sales, virtually.

• 10:23Speaker 02

  Correct.

• 10:24Alex Hormozi?

  So you want an irresistible roof offer?

• 10:29Alex Hormozi?

  I'm gonna blow the roof off. I feel like if I were in your position, the first thing that I would do would be centralize everything first without trying to change. Basically, I wouldn't, I would take the model that I already know works is what was your revenue before you did the, before you were acquired? Okay, you're doing twenty. So I would like, in terms of introducing levels of change, so this is actually pretty good for everybody. Like, I, I will typically not try and change like five things at once. And so you centralizing all sales is gonna get cost efficiency improvements and you're gonna be able to have a higher sales utilization. So you probably cut off the bottom third of the sales force that's low performing. That alone might give you a twenty-five percent lift in general, because the best sales guys will take more of the sales. And you'll have centralized all the costs, like we have centralized all the costs, right?

• 11:13Alex Hormozi?

  And so you'll have an increase in revenue and a decrease in cost that's paired. That would probably be my first step.

• 11:20Speaker 02

  That was part of the acquisition. That's the only way I did the acquisition is if they were gonna give me full control and centralize.

• 11:24Alex Hormozi?

  Yes. So but like, I wouldn't, I mean, I know the question is about roofing, but like that's what I would do first and that will probably take you six months or more realistically. In terms of, in terms of the offer to roofs, an offer that's worked really well in home services is instead of being a money back guarantee, I position it as a profit guarantee. So it's like, listen, you want your thing to be on time and on budget, probably. And so I guarantee that I will deliver it on time and on budget, or I'll give you my profit, which is 20%, whatever. And that way it's like you're not underwater and you still have 40% gross margin. So you're not really losing on the deal. But then people are like, okay, so he's got skin in the game.

• 12:05Alex Hormozi?

  And so that's a way of closing significantly more deals because the two biggest obstacles that, well, you would know this, but in most home services, it's on time, on budget. And probably for roofs, it's like, and how much am I going to be displaced? How much is going to interrupt my life? And so I would put my guarantee around those items and then just have a marginal amount that's back. But it's really just because all, they don't. So the big thing, just right with guarantees is that people don't want their money back. They want the roof. And so they just want to know that you care enough to make sure the roof gets delivered. And so that's really the solve for the guarantee is it just pays down risk of them not getting what they want. And so as long as that gets accomplished, you don't have to do it with money back. You can just do it with some money back that gets them to say yes. Does that help?

• 12:46Speaker 03

  That's mega.

• 12:47Alex Hormozi?

  Perfect.

• 12:48Speaker 03

  Hi, Alex.

• 12:49Alex Hormozi?

  Hello.

• 12:49Speaker 03

  Alex, you can call me Alex Rodriguez.

• 12:51Alex Hormozi?

  From Puerto Rico.

• 12:53Speaker 03

  From Puerto Rico. So I'm a music attorney.

• 12:56Alex Hormozi?

  Abogado.

• 12:56Speaker 03

  Abogado, corregato. En la musica y el entretenimiento.

• 12:59Alex Hormozi?

  Yeah.

• 13:00Speaker 03

  So what we do is we, our constraint is focus.

• 13:04Alex Hormozi?

  Okay.

• 13:04Speaker 03

  I have, yeah.

• 13:06Alex Hormozi?

  At least you said it. Yeah.

• 13:08Speaker 03

  So we have.

• 13:09Alex Hormozi?

  Realist.

• 13:10Speaker 03

  Law firm.

• 13:10Alex Hormozi?

  Yeah.

• 13:11Speaker 03

  So basically it's three businesses. But today, thanks to Ed and Sammy, we got much, much more clear on what we should do. But I would like to know, how would you think about this? Because the, the law firm side, it's growing 20% year over year without me actually doing anything, just redirecting people that comes to me through my law firm. And right now it's about a hundred K. And then we have the educational side and that is making two hundred K and it's been stopped like that in the last two years.

• 13:46Alex Hormozi?

  Sure.

• 13:46Speaker 03

  And we're.

• 13:47Alex Hormozi?

  And you get customers from organic?

• 13:48Speaker 03

  Yeah, both are organic.

• 13:50Alex Hormozi?

  Okay.

• 13:50Speaker 03

  So if you don't have money to pay us as a lawyer, you go to the educational platform. And we are developing a contract uh automation software for big companies like major labels or publishing companies. So right now, the the product, our software, our goal with the software is to sell. We are seeing that other, that big music companies are buying tech.

• 14:14Alex Hormozi?

  Yeah.

• 14:14Speaker 03

  So specific for them.

• 14:16Alex Hormozi?

  Sure.

• 14:17Speaker 03

  So they're doing everything manually. We want to sell that, but we have a cash flow problem because we're selling to, you know, people without a lot of money and the service size does uh make money. So our, our, our problem is where should we focus?

• 14:31Alex Hormozi?

  Yeah, you're but you're what's what's monthly churn right now?

• 14:35Speaker 03

  On the, it's.

• 14:37Alex Hormozi?

  On the software?

• 14:37Speaker 03

  We got a hundred people and we only have forty active right now.

• 14:41Alex Hormozi?

  And all you're doing it in the first year. So you've retained forty percent. Are they actually active though? Uh. So they're paying.

• 14:47Speaker 03

  The people that are active are paying three thousand dollars per year and are only like four.

• 14:53Alex Hormozi?

  Four?

• 14:53Speaker 03

  Four that are paying three thousand.

• 14:55Alex Hormozi?

  And then what are the other thirty six paying?

• 14:57Speaker 03

  Are paying six hundred per year.

• 14:59Alex Hormozi?

  Okay, got it. Um, okay, so I think we, we, we chatted about this last night. So you have a, there is no right answer, but there is a path that you have to pick. And so either you're going to be enterprise company and you're going to build only for that and I would say like you probably will just transact on the education side in order to fund this. I in general don't like this plan, but you could do this because you'll be split attention. And this is fundamentally why people raise money in software so they can just focus on one customer the whole time, build the product and then actually get it to work. Okay, that's that. Because you said that you're retaining forty percent in basically a prosumer-ish market, which is where you're at. I would be inclined to say that you probably are pretty close to a decent product. So you probably have nailed something there.

• 15:43Alex Hormozi?

  Cause keeping forty percent of people one year later on. You know, whatever it is for musicians that you guys have for contracts and whatnot, you could absolutely go all in on that and get that to like fifty or sixty percent. And then you just need to have a different acquisition system. So you probably just need to go spend money acquiring customers. And that already cash flows because of the education side. And are the people who are still paying you on the software also education customers or no?

• 16:10Speaker 03

  They usually come from the education or from my legal services as well. So I have some clients that be eighty percent of the job.

• 16:18Alex Hormozi?

  The million dollar question. The million dollar question is if they stop the education, do they keep paying for the software?

• 16:24Speaker 03

  Yes, because it's a one time.

• 16:25Alex Hormozi?

  Well, then that's what you mean. The software is one time?

• 16:27Speaker 03

  No, the education.

• 16:28Alex Hormozi?

  Oh, so then.

• 16:29Speaker 03

  Sometimes they just pay and they're gonna use the software.

• 16:32Alex Hormozi?

  As long as they. So the only thing that we're solving for is revenue retention on the software. And so like enterprise in and of itself is not more valuable than lower market. It's just that tends to be stickier, which is what makes it more valuable. But if you can get a larger marketplace, easier to acquire customer, to stick as well as a large enterprise customer, you've got a goldmine if that's true. And so if you want to go spend money, acquire customers with the education or media as your liquidation and then get, you know, a hundred percent like, but the goal that you guys should have is like, we don't care at all about the education. All of your focus, all the profit goes into just fixing one number, which is that you need to look at M12, so month twelve retention. Um, and just say like, okay, we're at forty. How do we get to sixty? And then how do we get to seventy? And that's all you're solving for.

• 17:17Alex Hormozi?

  Cause if you solve that, then the thing will just keep growing. And that's the beauty. I mean, that's fundamentally the beauty of software. Once you get it right is that it just keeps growing.

• 17:24Speaker 03

  Thank you.

• 17:24Alex Hormozi?

  Yeah.

• 17:26Speaker 04

  Hello, my name is Zion.

• 17:29Speaker 04

  Hold on, sorry. We do one point one to one point two million in revenue a year.

• 17:33Alex Hormozi?

  Which one is it?

• 17:35Speaker 04

  One point one.

• 17:36Alex Hormozi?

  Cool.

• 17:39Speaker 04

  Um, I would like to be at ten million in revenue.

• 17:42Alex Hormozi?

  I make one to a hundred million a year in there.

• 17:47Alex Hormozi?

  You're good.

• 17:49Speaker 04

  This is what's stopping me, I believe. Focus, skill deficiency and belief.

• 17:55Alex Hormozi?

  Okay.

• 17:57Speaker 04

  I have two avatars, which is working professionals and local government. And yeah, I need to, I, I, I believe I need to choose between the two avatars.

• 18:07Alex Hormozi?

  What do you sell again?

• 18:08Speaker 04

  Um, so support and accommodation. So basically, children who come from challenging backgrounds, who have been in care, come to us. We basically help them build their semi-independent living skills. So we built, we help them build their independent skills. So when they reach a certain age, they can then move on to their own accommodation and live independently. So these are kids in the system, right?

• 18:31Alex Hormozi?

  So like cooking skills, balancing a budget.

• 18:34Speaker 04

  Yeah, personal development, well, um, yeah, yeah, yeah.

• 18:37Alex Hormozi?

  Cool.

• 18:37Speaker 04

  Um, now, the issue I have is.

• 18:41Alex Hormozi?

  How do you make money?

• 18:42Speaker 04

  Huh?

• 18:42Alex Hormozi?

  How do you make money?

• 18:43Speaker 04

  So we make money from our support services and our accommodation. So basically, we rent properties from landlords who have, uh, real estate. And then we sublet the rooms. Um, and then we charge the government a support package for supporting young people. Um, and then obviously there's a risk premium because these are challenged kids. Um, and then, yeah, we just make the spread, basically.

• 19:10Alex Hormozi?

  Okay, so the government is your, is your customer?

• 19:12Speaker 04

  Yeah.

• 19:13Alex Hormozi?

  Okay, got it. Okay, so the issue is focus and avatar. Why is that a problem?

• 19:19Speaker 04

  Um, okay, so basically. Because we, so we have, so we have two avatars, so obviously the asset, the asset we have. Uh, control of is obviously the property, so, um, we can use that for different services. So we can either rent out to professionals who need rooms on a short-term basis, which we do. Or we can rent out rooms to kids in care who need support and accommodation. My issue is, which one do I pick?

• 19:49Speaker 04

  I don't know if that makes.

• 19:51Alex Hormozi?

  Okay, say the two people that you're running it out to is the difference.

• 19:54Speaker 04

  Okay, so so working working professionals is one.

• 19:57Alex Hormozi?

  Okay.

• 19:58Speaker 04

  The second is kids in care.

• 20:00Alex Hormozi?

  The kids.

• 20:00Speaker 04

  Yeah.

• 20:01Alex Hormozi?

  What's the revenue split now?

• 20:03Speaker 04

  Right now, just working professionals.

• 20:06Alex Hormozi?

  So the whole kids thing doesn't exist right now?

• 20:08Speaker 04

  Not not at the moment, no. But but but but wait, but wait, but I'll tell you why. I'll tell you why. I'll tell you why. So we were doing it. We were doing it.

• 20:14Alex Hormozi?

  Like, this guy's doing the Lord's work. He's like, well, some is like, for now, I'm just a landlord.

• 20:20Speaker 04

  So so so we actually so I actually scaled it from one to six, right? And my business partner had an inappropriate relationship with one of the kids in care. And it completely fucked me. And we were doing really.

• 20:32Alex Hormozi?

  Technically, he fucked her.

• 20:33Speaker 04

  Yeah. Well, he well, I we don't know if he fucked her, but it was inappropriate. It was it was inappropriate.

• 20:40Alex Hormozi?

  The highest Q and A I've had today, for sure. All right, keep going.

• 20:45Speaker 04

  And it's like, uh, it really ruined the brand. And we were doing really, really well. And it's like, obviously, due to safeguarding and risk, we kind of started losing all our contracts and they took all their kids out. I've got empty properties, so I just went to the professionals just to keep obviously paying my bills.

• 20:58Alex Hormozi?

  Got it. Okay, that helps a lot more context wise. Just thought you'd sneak that by me. No, so you can fill up all your properties using the professionals?

• 21:07Speaker 04

  Yeah, well, within seven days.

• 21:09Alex Hormozi?

  Okay, so is it just that your heart's not in it with the professionals and you?

• 21:12Speaker 04

  Yeah, I wasn't in it.

• 21:13Alex Hormozi?

  Okay, cool. Well, um, first off, kudos. How difficult is it? How quickly can you fill it up with kids?

• 21:20Alex Hormozi?

  Okay, so.

• 21:21Speaker 04

  Three to six, yeah, longer, three to six months.

• 21:23Alex Hormozi?

  Yeah, I'm guessing you have a cash flow issue in the meantime.

• 21:24Speaker 04

  Yeah, yeah. So obviously, the professionals is to generate the cash flow to.

• 21:28Alex Hormozi?

  Yeah, I think you got to bridge the gap to where you want to go.

• 21:30Speaker 04

  Okay.

• 21:30Alex Hormozi?

  So like, basically, sometimes you got to do what you don't want to do to get to what you do want to do.

• 21:36Speaker 04

  Hmm.

• 21:37Alex Hormozi?

  You know, like, as much as I could be like, you should only serve the one person like, I think that you have the properties you already have leases on. You have the commitments that you have to stick with. Fill up the properties with the working professionals so that you can create cash flow. I would consider just rebranding the old one, given your partner.

• 21:51Speaker 04

  Hmm.

• 21:52Alex Hormozi?

  And then just kind of relaunching, if you can, bandwidth wise in parallel, but just knowing that this is going to be basically an asset that you're going to sunset. Is there a huge amount of like, uh, operational resources after it gets filled up that you have to deploy to like manage it or no?

• 22:05Speaker 04

  The kids in care.

• 22:06Alex Hormozi?

  Professional, professional.

• 22:06Speaker 04

  No, easy.

• 22:07Alex Hormozi?

  Okay, yeah, I will say this as side note. Notice how easy it is to like make money in this other thing versus the hard thing? In general, if you weren't like, I really wanna help the kids, I'd be like, dude, just do the really easy one. No, you're like, it takes nothing, I could fill it up in a day, cash flows, whatever, like, like, do more of that. Um, if the goal was money.

• 22:24Speaker 04

  Yeah.

• 22:24Alex Hormozi?

  If the goal, like, okay, it's.

• 22:26Speaker 04

  Well, the goal, the goal, the goal is money.

• 22:27Alex Hormozi?

  Oh, dude.

• 22:28Speaker 04

  I mean, I, but, but, but, but I can, I can, I can fill for professionals. We can fill houses within seven days and what I put out, my build out, I get it back within seven days. And I just keep doing that. And, and the constraint is obviously finding the leases, right? So my, my, my plan was to build it out, do as many as we can, use the cash flow to then obviously open up the kids home. And then maybe convert.

• 22:50Alex Hormozi?

  That's just because you want to do that.

• 22:51Speaker 04

  Yeah.

• 22:52Alex Hormozi?

  Because, all right, so you're, you're conflicting priorities.

• 22:55Speaker 04

  Okay.

• 22:55Alex Hormozi?

  That's the issue. So it's like, it's a sequence thing, right? Like, you have a thing that you're good at making money on, and then you have a thing that you wanna give back on. I would imagine the professionals one makes you more money than the kids one does.

• 23:03Speaker 04

  No.

• 23:04Alex Hormozi?

  It does it.

• 23:04Speaker 04

  No.

• 23:05Alex Hormozi?

  Man, this thing.

• 23:05Speaker 04

  Kids is like three times, kids, so kids is like three times, maybe four times. So, so I would make, so let's say, for example, what I make from five properties, I can make from one kid home.

• 23:15Alex Hormozi?

  Okay, so I stand by my original thing.

• 23:17Speaker 04

  Hmm.

• 23:18Alex Hormozi?

  Bridge this with the cash flow and then switch to the kids. Professionals, fill up your existing ones so that you don't, you're not going into debt and you're not going negative.

• 23:25Speaker 04

  Hmm.

• 23:25Alex Hormozi?

  And then basically the rest of your priorities going forward, you sunset that. It's like that was the, our legacy model, now we do kids.

• 23:31Speaker 04

  When you mean sunset, please elaborate what you're talking about, what do you mean?

• 23:33Alex Hormozi?

  Don't keep, don't keep growing that side of the business.

• 23:36Speaker 04

  The professionals.

• 23:37Alex Hormozi?

  Right. Fill up the ones you have because you have all these vacancies because you had to get the kids out. Fill that up really quickly, get the cash flow back up. And then if you can make more money with the kids thing, and that's what you, you want to do it and you make more money, do that. But you gotta get to there.

• 23:49Speaker 04

  Yeah.

• 23:49Alex Hormozi?

  That's my two cents.

• 23:51Speaker 04

  Thank you. Can I throw in one more? One more?

• 23:54Alex Hormozi?

  Okay.

• 23:55Speaker 04

  In terms of like your top five meta skills, what would you?

• 23:59Alex Hormozi?

  Like left field, okay, got it.

• 24:02Speaker 04

  What, so what are your top five meta skills you would learn that give the highest projected output in terms of increasing business value? I know leadership is one of them.

• 24:11Alex Hormozi?

  Yeah. I mean, I really think prioritization is the most important skill.

• 24:15Speaker 04

  Top. Thank you, sir.

• 24:18Alex Hormozi?

  Everyone here is limited.

• 24:19Speaker 04

  Yeah.

• 24:19Alex Hormozi?

  So it's what you do with the limit.

• 24:22Speaker 05

  Thank you.

• 24:23Alex Hormozi?

  You bet. Thank you, man.

• 24:24Speaker 05

  Uh, my name is Dawn. I sell Christmas light installation to home and business owners.

• 24:30Alex Hormozi?

  Love it.

• 24:30Speaker 05

  Last year, we did four hundred and fifty K.

• 24:33Alex Hormozi?

  Sweet.

• 24:33Speaker 05

  And this year, I'd like to be at two million.

• 24:35Alex Hormozi?

  Awesome.

• 24:36Speaker 05

  Uh, what's stopping me is that I still have prices when I started the business two years ago for some businesses or for some clients. So I'd like to know how can I increase the perceived value uh so that I could increase my prices while still doing the same thing?

• 24:54Alex Hormozi?

  Can you just say a higher number when you get to the asking for money part?

• 24:58Speaker 05

  So for example, if I've been charging a house a thousand dollars for an install and takedown.

• 25:03Alex Hormozi?

  No, I understand. I understand. I'm saying like, what stops you from just changing nothing? And just saying a higher price?

• 25:11Speaker 05

  Like this year, it'll be two thousand.

• 25:13Alex Hormozi?

  Yeah.

• 25:14Speaker 05

  I guess nothing, but um the perceived value.

• 25:17Alex Hormozi?

  That feels like the easiest thing to do.

• 25:19Speaker 05

  Yeah, so I wanted to know like if there's a script or anything, how?

• 25:22Alex Hormozi?

  Okay, so a couple of things. So one is that it feels like you need to be sold more than anything, which like, great, but are you good at it?

• 25:31Speaker 05

  Good at sales?

• 25:32Alex Hormozi?

  No, no, Christmas tree lights.

• 25:34Speaker 05

  Oh, yeah.

• 25:35Alex Hormozi?

  Okay, good.

• 25:35Speaker 05

  You're the best.

• 25:36Alex Hormozi?

  So, great. So then you can you can charge whatever you want. In terms of, has the business all come from referrals?

• 25:43Speaker 05

  Uh, from Google leads and referrals.

• 25:46Alex Hormozi?

  Okay, got it. So you want to get to two million, uh, you raising your prices, what percentage do you want to raise them?

• 25:52Speaker 05

  Probably fifty percent.

• 25:54Alex Hormozi?

  Okay, got it. So the thing is, is like, if you want to raise them fifty percent, I'll bet you got so much more room than that because you seem not as convicted. So I'll bet you there's like a ton of room.

• 26:01Speaker 05

  Okay.

• 26:02Alex Hormozi?

  Um, so you're charging, okay, let's just, let's start with fifty and then bump it again another fifty if basically you have no change in close rates. And I would like you to keep bumping it by fifty percent until you see that you're making less money.

• 26:18Speaker 05

  Got it.

• 26:19Alex Hormozi?

  That sound okay?

• 26:19Speaker 05

  It's that simple.

• 26:20Alex Hormozi?

  Okay, that sounds great. I love this. Uh, is that as good for you as it was for me? Um, I'm kidding. That's what your partner said.

• 26:29Alex Hormozi?

  There you go. The, uh, okay. So I'll give you a little script for the people who are old that are going to come back. Cause I know some of them are going to recur is that, um, I would give them a heads up ahead of time and say, hey, just so you know, we're raising prices on all these new crazy people who are trying to give us money. But since you're a, a new, an old OG, if you want, um, to reward you for being a, a previous customer, I'll honor your old price as long as you buy now for Christmas. Otherwise you'll get the new price. So it's like, I'm giving you the love now because I'm like, hey, I'm letting you in, but then you can front, uh, forward, you can pull cash flow forward. That makes sense?

• 27:10Speaker 05

  Perfect.

• 27:10Alex Hormozi?

  And then everybody else just raise the price and you'll feel okay about it. Cause you'll have a full bank account.

• 27:14Speaker 05

  Right. Okay. Thank you. Hey Alex, my name's Alex.

• 27:18Alex Hormozi?

  What's up?

• 27:18Speaker 05

  Yeah. Um, we sell residential window replacements to homeowners.

• 27:24Alex Hormozi?

  Okay.

• 27:24Speaker 05

  We did 84 million in revenue last year.

• 27:28Alex Hormozi?

  Residential?

• 27:29Speaker 05

  Windows.

• 27:30Alex Hormozi?

  To homeowners.

• 27:31Speaker 05

  To homeowners.

• 27:32Alex Hormozi?

  Okay. Got it. 84. Okay.

• 27:33Speaker 05

  Yep. Um, today we have had a Google Sheets empire and a

• 27:37Alex Hormozi?

  A what empire?

• 27:38Speaker 05

  A Google sheet empire. And we're, we're starting to build out a HubSpot. Um, we spent the last few months building out the frameworks of our HubSpot.

• 27:45Alex Hormozi?

  Are you involved in it?

• 27:47Speaker 05

  Very involved.

• 27:47Alex Hormozi?

  Okay. Good. That's just like

• 27:49Speaker 05

  Yeah.

• 27:49Alex Hormozi?

  Biggest mistakes.

• 27:50Speaker 05

  So, uh, that's what I wanted to ask you about. Cause I know you just moved all your portfolio companies to HubSpot.

• 27:54Alex Hormozi?

  Who said that?

• 27:55Speaker 05

  You.

• 27:56Alex Hormozi?

  When?

• 27:56Speaker 05

  On one of your podcasts.

• 27:58Alex Hormozi?

  Jesus. It's like every, it's like I say it on one podcast, like four years ago. It's like everyone, there's like the best HubSpot endorsement ever. Anyways.

• 28:04Speaker 05

  Yeah. The question I have, so we're going to roll this out across 16 offices. Hopefully a hard launch March 1st. I don't want to pay the ignorance tax if I don't have to. So what advice would you have?

• 28:13Alex Hormozi?

  Stake, basically you just need like, you're CEO of IT for basically this whole quarter. It's the easiest way to say it. And so I would have really rapid feedback loops with each of the department heads. If you have functional heads at the holding company, and then you'd want to have basically separate lines of communication for all the location heads. So I think about, do you use Slack or something like that? Boxer, yeah. Really? Yeah. Jeez. Okay. Yeah, so I'd want to have basically different threads by by function. So one is the actual function. So people who are handling sales, people handling marketing, and I'd have the leaders there. And then I still want like, you basically want the different slices, basically lines of communication to the different slices of the org. So that you can get as much transparency top down into how it's working for them and making their life easier.

• 28:57Alex Hormozi?

  And then that way you can triage basically which, because you have limited resources in terms of which of these bugs are you going to fix? You know, which process flow sucks. Right. Um, and then you can basically stack order which of these things as a highest driver for revenue. But you can't really do it appropriately unless you basically can drink and all that, all that information. And as, are you CEO? No, I'm. Okay. Yeah. But. But you're in charge of it. So you're CEO of this. So, um, that, that's, that's basically, basically it's just like, you need to eat, breathe, breathe and sleep this stuff. Yeah. That's helpful. Thank you. Yeah, just like. It's okay that it is unscalable. Got it. But you have to do that in order to make it scalable. Yeah, thank you. Yeah, you bet.

• 29:41Speaker 06

  So first of all, thank you.

• 29:44Speaker 06

  You and your team for the things that you are doing.

• 29:46Alex Hormozi?

  No, you bet.

• 29:48Speaker 06

  Yeah, my name is Paulus. So this is what I'm doing that you said already. Uh, and for the, I guess, three, four years, it seems like I just kind of lost something. Like why or stuff like this? Because, uh, uh, two and a half, maybe already three years ago, uh, we planned to go from what, what I have right now. Because it's a one man company, just few team, team members. Uh, now it's, uh, four hundred sixteen revenue the last year. And the goal was two point three mil.

• 30:23Alex Hormozi?

  Uh huh.

• 30:23Speaker 06

  Um. Maybe this is the why I, I lost this on the way.

• 30:28Alex Hormozi?

  Uh huh.

• 30:29Speaker 06

  Um, so I just wanted to, to know what's your why?

• 30:34Alex Hormozi?

  Mm hmm.

• 30:34Speaker 06

  Why you are doing what you are doing?

• 30:38Alex Hormozi?

  I like working. I'm dead like, I spent a year thinking about that question when I had enough money to do whatever I wanted and just like, could just live on treasury bills for the rest of my life. Um, when I look back on the days that I enjoyed most, they had three things in common. I worked out, I ate with people that I liked, and I worked hard and had something to show for it. And had nothing left in the tank. And so, once I realized that those were the days that I enjoyed the most, that I made it my goal to live as many of those days in a row as I could. And the way that I live my life bothers a lot of people. And that's okay.

• 31:18Alex Hormozi?

  And so I think, I mean, I, I, I got that advice when I was 22 years old. From, I'll just, whatever, from a, a person in my past. Um, and I'd had a good weekend and I started work and, uh, she said, you're in a good mood. And I was like, yeah, it just, you know, had a good weekend. She was like, I'm pretty sure the secret to happiness is living as many days in a row like that as you can. And that was like the closest to operationalizing kind of joy that I'd ever heard. And so I have just stuck with that. And I think that the things that bring you joy will change over time. But I think that structure of just trying to find what that perfect day is and living in as many days in a row as you can is kind of the way to do it. That's how I do it. You can do everyone. Yeah. Thank you.

• 31:58Alex Hormozi?

  As a side note, um, for those of you who feel like you have lost your passion for your prospect. And I'll, I'll, I'll give you a simple example, like I used to sell weight loss to women between the age of 25 and 55. And at a certain point, I just really stopped caring. They were like, oh my God, my life changed forever. And I was like, I know you had a calorie deficit and you moved. Like, yes, that's how that works. And I would have to kind of like fake myself into feeling excited about it. I, it really bothered me because I was like, I quit my job to do something that I loved and I don't really care about this. I ended up loving business more than I loved weight loss and then I fell into that.

• 32:37Alex Hormozi?

  Um, but I had a friend who was a personal trainer, who quit being a personal trainer and started a cookie business. Brick and mortar, big cookie store, like did it right. Um, and I remember being like,

• 32:51Alex Hormozi?

  are you passionate about cookies? And he was like, not really. And I was like, but he crushed it. He did a really good job. Everything was like really tight. And, um, what I realized was that he was passionate about doing things well.

• 33:05Alex Hormozi?

  Rather than the cookie business. And once I realized that, I was like, oh, I don't have to be passionate about weight loss, but I can be passionate about being good. And just saying like, when I do things, I will do them well. And I think that has been something that has helped me stay motivated in times when I feel less so. 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, 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.

• 33:50Alex Hormozi?

  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. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com/roadmap. R O A D map, roadmap.

• 34:17Speaker 07

  Hey, Alex.

• 34:18Alex Hormozi?

  Hello.

• 34:18Speaker 07

  My name is Heather. I own a consulting firm called Channel Maven.

• 34:22Alex Hormozi?

  Okay.

• 34:22Speaker 07

  We help large IT companies sell better through and with their partners.

• 34:27Alex Hormozi?

  Okay.

• 34:28Speaker 07

  I, revenue was 3.6 million. I sold it in 2021.

• 34:33Alex Hormozi?

  How great.

• 34:34Speaker 07

  Thanks. Ran marketing for the company that acquired us. They called it an aqua hire.

• 34:38Alex Hormozi?

  Yeah.

• 34:39Speaker 07

  And convinced the board six months ago that I was done and they should give me the name back. So got the name, got the IP. I get to start over, not make the mistakes I made before. The market has shrunk, so that channel role is being pushed out. And when I started it, there were five consulting companies I competed with. Now there are probably 200. Um, do I focus more like channel marketing is probably what I'm best known for. Do I focus more on that in this industry or do I go just B to B? And like help kitchen and bath companies sell through dealers or automotive.

• 35:20Alex Hormozi?

  When you say channel, yeah, explain dial into the channel, channel sales that you're talking about.

• 35:24Speaker 07

  Yeah. So a large IT company sells direct, but they also sell through hundreds of thousands of mom and pop channel partners or Accenture or now market places.

• 35:35Alex Hormozi?

  Affiliate.

• 35:37Speaker 07

  Yeah.

• 35:37Alex Hormozi?

  Got it. Okay. So you're an affiliate expert for big IT companies and you have a network of people that can do basically sell their services for them with a markup.

• 35:44Speaker 07

  Yeah. I mean, I basically made an announcement on LinkedIn that I was back and did 360K in four months.

• 35:51Alex Hormozi?

  That's awesome.

• 35:52Speaker 07

  Yeah. Thanks.

• 35:54Alex Hormozi?

  So the question is, well, I mean, it sounds like you did okay with your announcement. Why do you feel like you can't out compete the other people?

• 36:02Speaker 07

  Um, I just feel like my champions, the, the 14,000 people that follow me on LinkedIn are starting to phase out a bit. And it's just gotten super crowded.

• 36:12Alex Hormozi?

  And this is the channel part. So the crowded part doesn't bother me at all.

• 36:15Speaker 07

  Yeah.

• 36:15Alex Hormozi?

  Cause that just means that there's lots of demand.

• 36:17Speaker 07

  My clients are the tech companies. So HP, Google.

• 36:20Alex Hormozi?

  Yeah. So the 14,000 people, you have a lot of high up people in those companies who follow you.

• 36:24Speaker 07

  Yeah.

• 36:24Alex Hormozi?

  I mean, you could do either path, but I mean, it's a good question. It was, I think it's, it's, I think it's more the statements that would initially jar me of like, it's saturated. I think it's going away, things like that because, you know, my, my, my big questions are always logic, evidence, utility. So, uh, uh, what does that mean? Like define that for me. How do you know that? And so what? Logic evidence utility. So when I asked, you know, channel partners, like please define that for me. It's like, okay, that's affiliates. How do you know that they are going down? Like, how do you know that?

• 37:02Speaker 07

  They're all calling me asking if I know of jobs and I'm tracking how long they're on the market. And on average, it's about 11 months.

• 37:09Alex Hormozi?

  Who's on the market for a lot?

• 37:11Speaker 07

  They call it a channel chief. So it's like chief partner officer.

• 37:14Alex Hormozi?

  Okay. And those people are looking for jobs?

• 37:16Speaker 07

  Yeah. Because they're all, they're all getting let go. So then the VP of channel sales reports to the CSO, the VP of channel marketing reports to the CMO, like that level is just getting.

• 37:27Alex Hormozi?

  And when you say a lot of people reached out to you, like, how many is that?

• 37:31Speaker 07

  In the last year, because I was still in the channel when the company acquired us, I'd say probably forty people.

• 37:39Alex Hormozi?

  Okay. The big conflicting data point I have is that you like made a post and made three hundred sixty grand. Yeah.

• 37:46Speaker 07

  So just. So just shut up and focus.

• 37:49Alex Hormozi?

  Yeah, no, I mean, it's real, though, but I think I I'll tell you what I like. If I'm in your shoes, I get excited by this stuff. Maybe because I'm broken on the inside. Who knows? But like.

• 37:58Speaker 07

  I am you. I work. I have little kids. Fifty percent of the time I work nonstop when they're not with me.

• 38:04Alex Hormozi?

  Yeah, and like I see everyone bleeding and I'm like, let's let's finish them off. You know what I mean? Like, they didn't deserve to be in business to begin with, and I will make sure that everyone knows. And so if you have this in and you're better and you're seen as a market leader, if things are consolidating, for example, then it means that like, as long as if the industry isn't going away, but it's consolidating, then it means a winner take all. So it just means the stakes got higher.

• 38:27Speaker 07

  Yeah.

• 38:28Alex Hormozi?

  Which if you're better, that's a good thing.

• 38:30Speaker 07

  Awesome. Thank you.

• 38:32Alex Hormozi?

  Oh, you bet.

• 38:33Speaker 04

  Hey, Alex. My name is Chris and I have a question about the business I'm starting soon. So I have no numbers right now. From my background, I'm a physiologist and chiropractor, have a academy where I teach medical professionals in my own concept called Crack and Move. And I'm doing social media.

• 38:49Alex Hormozi?

  Okay.

• 38:50Speaker 04

  And I invented a tool where you can crack yourself, your back.

• 38:55Alex Hormozi?

  Self-crack, if you will.

• 38:56Speaker 04

  Self-crack, yeah, more like a black rock posture role, but really intense and good. And you can use it as a customer for your own, for your better posture and pain relief. But also the professional for especially some small women have with some techniques problems. You can go, you're a big guy, so when I want to crack you, I have to.

• 39:17Alex Hormozi?

  Yeah.

• 39:17Speaker 04

  Need a, I'm a small guy, so sometimes it's really hard. And I would like to know, would you focus on one group for selling B to C? For example, just the customer for the problem solve of cracking themselves and with a posture program and everything, or just the medicals? And I have the medicals also in my academy with affiliate or both?

• 39:39Alex Hormozi?

  So you are a chiropractor?

• 39:40Speaker 04

  Yeah.

• 39:41Alex Hormozi?

  And you no longer have your practice.

• 39:43Speaker 05

  I can if I want. I have a waiting list and.

• 39:46Alex Hormozi?

  But you have a practice.

• 39:47Speaker 05

  Yeah, I have.

• 39:48Alex Hormozi?

  And then you also have an academy where you train other chiropractors.

• 39:51Speaker 05

  Yes, in my concept.

• 39:52Alex Hormozi?

  Yes, and you also want to start a physical products business.

• 39:56Speaker 05

  Yeah, because of scaling because time.

• 39:58Alex Hormozi?

  You don't want to leave money on the table. What's revenue right now?

• 40:03Speaker 05

  Um, with my academy, I started one year ago and we have five hundred K.

• 40:07Alex Hormozi?

  Dude, you just started it a year ago.

• 40:09Speaker 05

  Yeah.

• 40:09Alex Hormozi?

  Why are you starting another business?

• 40:11Speaker 05

  Because it solves some problems and I found out because I have a.

• 40:15Alex Hormozi?

  Why not sell newspapers? You know what I mean? Like sell orange juice. People are thirsty.

• 40:19Speaker 05

  I could.

• 40:20Alex Hormozi?

  Right. No, I'm being.

• 40:22Speaker 05

  Because I'm maybe a social media. I have an audience. I have customers who are um a waiting list. I have the problem that many people want the treatment. I can't give them, so I um built some.

• 40:32Alex Hormozi?

  You already have two businesses.

• 40:34Speaker 05

  Yeah.

• 40:35Alex Hormozi?

  And you have a third business and it's a physical products business, totally different business.

• 40:39Speaker 05

  Yeah, but I have some partners in it, you know, so I just have to do the marketing and the development of the tool itself and I, we already did it, so it's ready to launch.

• 40:49Speaker 05

  But the problem.

• 40:52Speaker 05

  Yeah, it's maybe, you know, sometimes it's boring just to do one thing at once. But in business wise, maybe it's better.

• 41:00Alex Hormozi?

  What what's your goal?

• 41:02Speaker 05

  Good question. Of course, I want to make money. Um, but of course, uh, I want to do very nice products who have a nice impact of the.

• 41:11Alex Hormozi?

  Yeah, but what what do you want to have happen from that?

• 41:15Speaker 05

  I think the focus, so that's the problem.

• 41:18Alex Hormozi?

  You want focus? Uh, you want to do that by doing more things?

• 41:22Speaker 05

  Yeah, and the problem is that's so combined to my brand, so um I have the problem that I can't, I have so many customers, I can't offer them anything, so I have limited time with my own treatments. So I need time to develop uh some uh.

• 41:37Alex Hormozi?

  Well, you have the academy.

• 41:38Speaker 05

  Sorry?

• 41:39Alex Hormozi?

  You have the academy, though.

• 41:40Speaker 05

  Yeah, but it's uh it's very hard to um.

• 41:45Speaker 05

  To teach them my concept because it takes half a year so they can implement it in their own office. So I I try to reduce it as a hybrid model with online and everything, but it takes time because of the brand protection quality. Because I send to my customers and when my customers go to them, I want that a high treatment, higher treatment. And the problem is that the onboarding takes so long that the customers want to treat them and I have no time. My um the people I'm teaching need time to learn it and gets.

• 42:14Alex Hormozi?

  You're saying it takes time to build a big business?

• 42:16Speaker 05

  Yeah.

• 42:17Alex Hormozi?

  Yeah, I believe you.

• 42:18Speaker 05

  Uh, yeah, but the problem is the social media makes the the all the um cast uh all the followers just.

• 42:25Alex Hormozi?

  Yeah, let me, let me, let me, let me help for a second. So.

• 42:29Speaker 05

  Sorry.

• 42:30Alex Hormozi?

  You're good, man. Uh, you're also like probably, you know, everyone's laughing, but like you're probably one out of four, one out of three of you here is in this exact same boat. So.

• 42:39Speaker 05

  Hope so.

• 42:41Alex Hormozi?

  Uh, here's the thing.

• 42:44Alex Hormozi?

  The opportunity will only get bigger, not smaller.

• 42:47Speaker 05

  Hmm.

• 42:47Alex Hormozi?

  So the rush that you have is a rush to do a smaller version of what you want. Cause if you get bigger on social media, you will have more customers who want to buy your thing.

• 42:58Speaker 05

  Yeah.

• 42:59Alex Hormozi?

  Right?

• 42:59Speaker 05

  Yeah, the problem is that the customers are now a little bit sad because they I have no offer for them.

• 43:04Alex Hormozi?

  Oh, no.

• 43:05Speaker 05

  I have no.

• 43:06Alex Hormozi?

  I had nothing to sell anyone for years.

• 43:08Speaker 05

  Okay.

• 43:08Alex Hormozi?

  Ooh, so point being.

• 43:13Alex Hormozi?

  Thing is, I I don't, I don't actually think I'm gonna convince you. I think you're gonna do it. No, I'm serious. So I don't even know if there's a point. You wanna sell your thing, you wanna sell your widget.

• 43:25Speaker 05

  Yeah.

• 43:26Alex Hormozi?

  So what am I gonna do?

• 43:28Speaker 05

  More like the advice of focusing on just the profession.

• 43:31Alex Hormozi?

  You want me to tell you how to focus? How would, how would?

• 43:35Speaker 05

  You're doing several things that.

• 43:37Speaker 06

  Ones, right?

• 43:38Alex Hormozi?

  What?

• 43:38Speaker 06

  You're also doing.

• 43:39Alex Hormozi?

  Buy acquisition dot com.

• 43:40Speaker 06

  Yeah, you're just have all the so.

• 43:42Alex Hormozi?

  I own one business.

• 43:44Speaker 06

  Yeah.

• 43:45Alex Hormozi?

  You want to be CEO of multiple. There's a difference between owners. I also own stocks and zillions of companies.

• 43:50Speaker 06

  I have different businesses at all.

• 43:52Alex Hormozi?

  What?

• 43:53Speaker 06

  Okay, product. So your book is also different.

• 43:56Alex Hormozi?

  No. So no, you have no, this is important. This is good.

• 44:00Speaker 06

  It's just for money.

• 44:01Alex Hormozi?

  So for everybody, there's a difference between owning something and being CEO and operator.

• 44:08Alex Hormozi?

  You can only really operate one thing. That's it. If I buy a stock in Apple, I'm an owner. I don't do anything, but I'm an owner.

• 44:17Alex Hormozi?

  Does that make? Do you get the difference here?

• 44:19Speaker 06

  Yeah.

• 44:19Alex Hormozi?

  You're like, well, I'm going to be Mark said like the where you would get me if you wanted to was school on the face of. But when I did that deal, I said, I will change nothing about what I do.

• 44:33Alex Hormozi?

  So my regular day must remain the same in order for me to do this deal. I'm going to continue to make content. I'm going to continue to record stuff. And then all I'm going to do is point in a different direction.

• 44:42Speaker 06

  Yeah.

• 44:43Alex Hormozi?

  That's it. So the pointing is a copy paste on a link. Everything else remain the same. So I boil this down to what does this change about what I do? And so the reason that this is very difficult is that you're going to start another business and it's going to change what you do.

• 44:55Speaker 06

  Ah, okay. So I was solving the things I'm not doing in my daily business. And when I starting a different business, for example, the product, I'm just doing my marketing, the development I'm doing also, I did it. Um, and everything else. So like, uh, targeting the group and, um, strategies, I don't have any clue. I should not. So I'm here just I'm taking the, uh, question.

• 45:19Alex Hormozi?

  All right. Um, I don't, I don't know what your question is anymore.

• 45:23Speaker 06

  I still like, uh, medical, would you focus on in this part?

• 45:27Alex Hormozi?

  When you have a selling group. I would take your 500 medical people and be like, how do I go from 500,000 in my first year to five million? That's what I would do. You already have something that works. You already have a following of people who have this thing. If you want, you can sell through them as an affiliate base and you have one business.

• 45:42Speaker 06

  Okay. That's a good answer.

• 45:44Alex Hormozi?

  Great.

• 45:45Speaker 06

  Thank the Lord. Thank you. My name is Gabriel, uh, Sal Solar. Also have a personal brand that helps Christian men be better. I have no plan to monetize this at this point, just simply help people find Jesus and.

• 45:56Speaker 04

  The goal is to gain a following at this time. Question is on organic content. That's our biggest constraint. We are putting out three hundred and fifty to four hundred pieces of content a month.

• 46:09Alex Hormozi?

  For solar?

• 46:10Speaker 04

  For also for solar, this is about the personal brand.

• 46:12Alex Hormozi?

  Okay.

• 46:14Speaker 04

  For solar with paid ads, it's easy. We just run the ten hooks. We run.

• 46:18Alex Hormozi?

  Do you do this framework?

• 46:20Speaker 04

  Yeah. So the question is, how do you split test organic? Content for different platforms, Meta, TikTok, etc.

• 46:28Alex Hormozi?

  How do you split test organic content?

• 46:30Speaker 04

  Yeah, like you would for the ads where you do the ten hooks, three bodies, different CTAs. Let the algorithm tell you what's up when you spend money behind it. How do you implement that into organic?

• 46:40Alex Hormozi?

  Uh, you, you, you don't. Uh, you just make ten pieces of content. And if you think something was really good and it bombed, you can re-edit it with a new hook. But it would be weird if match, imagine if you had a page and you saw ten hooks for the same piece of content, it would be kind of odd. And so, um, obviously you, uh, not YouTube, Instagram has the trial reels and whatnot, which is an interesting new function. But every person up to this point in human history of social media has not had that function. And so it's usually just a, a growth and disgusting amount of volume for an unending period of time.

• 47:16Speaker 04

  I'm being super real.

• 47:16Alex Hormozi?

  I assume that is the answer. Yeah, and so, yeah, that is the answer. And that disgusting amount of volume, the learning process is this. We make, call it a hundred pieces of content. And then we look back at which ones did well. And we try and point out what was different about those compared to the ones that didn't do well. Then the next hundred, we say, let's add two points to our checklist and do these extra two points for the next hundred videos. And fundamentally, that is how we've continued to make content. So like our long form YouTube videos have massive checklists of just like, okay, we have to do this, like whenever Alex is about to enter a story, this is what we have to do visually. Uh, you know, big this, like, obviously the intro is super, super important for long form, but.

• 47:59Alex Hormozi?

  I, just like we're saying better and more, that accordion I would see say is a consistent theme across all content creators that I've met, which is like in the beginning, you just do a ton. And then you're like, okay, this, if I just like this video got a hundred thousand and the other 10 videos got like 500 views.

• 48:19Speaker 04

  Yeah.

• 48:20Alex Hormozi?

  You're like, okay, if I just spent a little bit more time, instead of making 10 made three, I'll bet you I could get like 10,000 views per. And then you start doing that and you get good at that and you're like, I could probably go from three to 10 of these. And then you do 10 of those. And then as you do 10, you're like, you know what, man, these ones popped off. I'll bet you if I spent a little bit more time, right? And so you just keep going back and forth between better and more. And it's a very normal cadence. I will give you one final thing, because I know that you're not the only content creator here. There's a lot of mythology around content and volume, which is like Instagram can only take two posts a day or Tik Tok max is at four or at two o'clock and six like,

• 48:57Alex Hormozi?

  don't worry about it. Don't worry about it. One of the biggest Instagram accounts right now is a Bollywood account. They post a hundred times a day. They get nine billion views a month. A hundred posts a day.

• 49:11Alex Hormozi?

  You're just not doing enough. And so now I used to be so like, okay, let's make sure they're, you know, 12 hours spaced out. Like I'll post one and 30 minutes later, I'll have something else and I'll post it again. I, it doesn't matter. Thing is, is 1% of your audience is seeing it anyways. So they'll just push it to somebody else. The content is incentivized to distribute your content. So the platform is incentivized to distribute the content to people who find it valuable. So just give them more steps to distribute.

• 49:32Speaker 04

  Just go crazy on the input.

• 49:35Alex Hormozi?

  Yes. Just real. It's a lot of volume.

• 49:39Speaker 04

  Hey Alex, my name's Isaac Hamlin. I'm the founder and CEO of Better Blend, which is a chain of 13 smoothie shops that focuses on macro nutrients like high protein, low calorie, low sugar. We sell to healthy, we sell to people who are looking to eat healthier, easier and really to just anybody.

• 49:55Alex Hormozi?

  Yeah.

• 49:56Speaker 04

  News are right around seven, eight million. I'd like all of our locations to be at one million. And the thing that's stopping that was. Wait, why?

• 50:06Alex Hormozi?

  Why?

• 50:06Speaker 04

  Why a million for each?

• 50:07Alex Hormozi?

  Yeah.

• 50:08Speaker 04

  Cause we have this, we have this top line revenue thing where when, once we get past this certain amount, the, we don't need more employees on staff. So the margin just explodes.

• 50:18Alex Hormozi?

  Contribution margin is up.

• 50:18Speaker 04

  Right. So we need to get to a million and then everybody's just like printing. So that's the goal.

• 50:23Alex Hormozi?

  Two a million or past a million?

• 50:24Speaker 04

  Past a million, but two million to start.

• 50:27Alex Hormozi?

  Okay.

• 50:27Speaker 04

  The thing that's stopping us is because we're such a unique and different brand, when we go into new markets that are miles or hundreds of miles away from like our mothership in Cincinnati. People don't trust, people either don't think it's healthy and it stays good, or they don't think it tastes good and it's healthy. So we have a hard time with like the trust aspect to get them in the door, like a CAC problem.

• 50:47Alex Hormozi?

  Yeah. Okay. So are you franchised?

• 50:52Speaker 04

  So I own five and then we franchise the rest. So half and half. Yeah. I know you don't like franchising.

• 50:58Alex Hormozi?

  It's not that I don't like franchise. It's just that when you do the math on the amount of franchise support that is required. Now I do think that. I'm more okay with it in food businesses, typically less with low skilled labor businesses. Like a gym, for example, because it's easier to actually standardize a product in food more than, that's why if you think about how many successful franchises there are in food, there's tons of them. How many successful franchises are there in service based gyms? None. There's none. F45 is out of business. Orange Theory is out of business. CrossFit's whatever. Like, and the thing is, is that they actually don't have a model. They're a licensing business. And so that's why they've been able to stay around. So anyways, back to your point about, about franchising.

• 51:40Alex Hormozi?

  Uh, the business. Um, I'm not, I'm not gonna tear into that right now. Okay. So let's just, you just, you have a CAC issue. Okay. Well, what's the, so once a story gets going. Do you have to have any advertising in the market or just, it just kind of like slowly grows its way off of word of mouth?

• 51:53Speaker 04

  We recommend a 2% spend and it's usually through Meta that we're, it's like an agency throughout the, throughout everybody, but everyone's running the same ads. So like, there's this runway to get to where it is, but it's a painful runway. So we're just trying to shorten it.

• 52:05Alex Hormozi?

  You need a grand opening strategy.

• 52:07Speaker 04

  Yeah.

• 52:07Alex Hormozi?

  So every, every brick and mortar expansion, this is for everybody. Um, you have to have a killer grand opening. Like, I can't tell you, like, I don't know of a single successful chain. Brick and mortar that doesn't have like a super dialed. This is exactly how we get to profitable within 30 days, 60 days, 90 days. These are the promotions we run. This is the, the 90 days we do, you know, leading up prior, like by the day. It's just the level of detail that has to occur. Like, think about how Chick-fil-A opens up, right? Like, that first day, they have a line, you know, down, down the block, right? It's just, it's like, it's like this, you know, I was gonna say Jesus coming to town. That would be tongue in cheek, but, but it's, it's a big deal, right?

• 52:48Alex Hormozi?

  And so, one is you need some amazing giveaway that you can bring people in the door on. Two is I like to limit it to like the first 500 customers. Get something that's basically ancillary. So like Wendy's does a great one of these, which is like the first 100 people or first 500 people get a little golden keychain that they get free Frosties, right? For life, I think. And so very incentivizing for people to like tell their friends and line up. But where the second order effects that come from that are that the only people really gonna stand in line there are people who live close by. Like, why would you care about getting that thing for that one local area when you live far away, right? But on top of that, what are you gonna do now that you have this one free dessert? For example, like you can take whenever. You're gonna bring friends with you and you're not always just gonna get dessert.

• 53:33Alex Hormozi?

  You're gonna get a burger, you're gonna get fries, you're gonna get everything else. And so that becomes kind of like the ambassador base of the business. And so having one killer giveaway promotion on the front end and like lifetime deals on some sort of mini or some sort of, I'm sure you have some sort of little upsells of desserts or whatever that are healthy that you can give away that are high margin. That would be thing one. And it's probably like you need to start marketing 60 days at least prior to kind of like pepper the market, let everyone know that it's coming. I would just like build the list up of people who are getting excited for this giveaway. And then you basically run a launch play with a huge shout into the, the launch itself. In terms of the offers for decreasing CAC, it's gonna be some version of either BOGOs. So, you know, buy one, get one.

• 54:14Alex Hormozi?

  Or, you know, kids cups are half off or you just have to have one, one or two line transaction upsell that you have to teach the staff so that when people come in with this coupon, they, they ask one question back. That's it. And then that question then leads them to the upsell that can help you recoup CAC. And the thing that's gonna be most important about this entire thing is what percentage of customers come back?

• 54:35Speaker 04

  Are you asking or?

• 54:36Alex Hormozi?

  I'm just telling you, that is the most important metric that that you that you need. What percentage, I mean, if you have it, what percentage come back after first visit?

• 54:42Speaker 04

  It's really tough to calculate LTV with a brick and mortar. It's that's part of the thing that's.

• 54:47Alex Hormozi?

  Super doable, super doable for brick and mortar.

• 54:50Speaker 04

  What's the frame? Is it a year?

• 54:52Alex Hormozi?

  I mean, thirty days.

• 54:54Speaker 04

  Thirty days.

• 54:54Alex Hormozi?

  I mean, I would imagine if somebody's gonna be getting a smoothie, if they don't come back for a month and like they weren't thrilled.

• 54:58Speaker 04

  Yeah, that's fair.

• 54:59Alex Hormozi?

  Right.

• 54:59Speaker 04

  Okay. Thirty day, okay.

• 55:01Alex Hormozi?

  Mm hmm. Also, punch cards, running start, you probably know some of those things already.

• 55:06Alex Hormozi?

  When I say running start, it's like instead of having, if you have ten on the card, you wanna punch three, two or three up front when you give it to them. Psychologically, they're like three times more likely to finish it. By fact.

• 55:17Speaker 04

  Good. Thank you.

• 55:18Alex Hormozi?

  Yeah.

• 55:19Speaker 06

  Hey, Alex.

• 55:19Alex Hormozi?

  Hello, sir.

• 55:21Speaker 06

  Uh, my name is Chris. I sell data engineering bootcamp to current tech professionals. We do a million a month. Would love to be a ten million a month. What's stopping me is it's hard for me to know if it's a marketing, sales or sales process issue as I try to reduce my CAC. My LTV to CAC is three point two ish. Um, I think I know how to increase my LTV. We talked a little bit last night and I think Tim was also very, very helpful in helping me realize things I can do, but I think it's.

• 55:49Alex Hormozi?

  Are you meta ads or YouTube ads?

• 55:51Speaker 06

  Seventy percent meta, twenty YouTube, ten.

• 55:53Alex Hormozi?

  Got it.

• 55:53Speaker 06

  Big talk.

• 55:54Alex Hormozi?

  What, um, how much creative are you putting out, um, per week?

• 55:58Speaker 06

  At this point, five or six, uh, I think Tim blew my mind or someone blew my mind when they were like, you gotta do five or six per ten grands. I'm like, okay. Got to do that next step.

• 56:06Alex Hormozi?

  So like five hundred thousand a day is usually fifty pieces a day.

• 56:08Speaker 06

  Yep.

• 56:09Alex Hormozi?

  For context.

• 56:09Speaker 06

  Yeah.

• 56:10Alex Hormozi?

  Spend a hundred a day, a hundred thousand a day, it's.

• 56:12Speaker 06

  We spent.

• 56:13Alex Hormozi?

  It's closer to, it's less than.

• 56:15Speaker 06

  Yeah, we spent two, two fifty a month.

• 56:16Alex Hormozi?

  Yeah, but I think that you should at least right now be at twenty five a week.

• 56:21Speaker 06

  Okay.

• 56:21Alex Hormozi?

  Minimum.

• 56:22Speaker 06

  Got it. And would you hire actors? Would you just?

• 56:24Alex Hormozi?

  No, I think, I mean.

• 56:25Speaker 06

  Winning ads?

• 56:26Alex Hormozi?

  I would rather you just get it going. You can kind of like think about removing yourself. Are you like still the face of the business?

• 56:31Speaker 06

  I very much am still shooting.

• 56:32Alex Hormozi?

  Yeah, that's fine. Yeah, I don't, I don't think that's the issue right now. If you wanna get to ten, it's like you got tons of time before that's gonna happen. So like.

• 56:38Speaker 06

  Cool.

• 56:38Alex Hormozi?

  Yeah, it's a, it's a ton more volume than you're currently doing.

• 56:41Speaker 06

  Yeah.

• 56:41Alex Hormozi?

  And it's actually the same answer that we're talking about earlier from the concept perspective, just on the ads.

• 56:44Speaker 06

  Yeah.

• 56:45Alex Hormozi?

  Um, the nice thing with ads, though, is that because the, the nature of testing that can occur with ads is that if you record, call it twenty five. Here, I'll just walk you through this. This will apply to everybody. So you make fifty hooks. So it's just like, hey, quick question. Hey, are you been, have you ever wondered about, you know, data engineering? Hey, look at this crazy AI thing. You know who makes this? Data engineers. Like, what's that? Like, you just, you just go through 50 hooks, right? Then you have your three to five meats, which is like, this is actually the fastest growing industry in America right now. And believe it or not, you know, Goldman Sachs said that there's 23% in Kager. And if you're like, what's Kager? It just means every year by 23%, that means it's going to double in four years. So think about how many people you know who are data engineers, right?

• 57:29Alex Hormozi?

  None. Well, there's going to be even more. And this is the starting salary. This is just according to this, you know, reputable source. And here's the craziest part. You only need 16 weeks in order to get certified to get these types of jobs. And so if you've ever been kind of tech oriented or you're good at math, like, this is something that's worth considering. I just have a free class that'll walk you through step by step, blah, blah, blah. Right? So that's the meat. And then you have call to actions. I don't do a ton of tests on this. So usually typically with call to actions, once you know what the call to action that works best is, I tend to just run that as, as what I say at the end of the ad, which is if it's like, are you running to a VSL or something? Video sales letter? Often via sales letters. Okay, yeah. So it's like, you might try web class, you might try masterclass, you might try,

• 58:15Alex Hormozi?

  you could even just try video sales letter. Like, I've got a video training, I've got a train, like, basically, it sounds small, but when you're running tons of traffic, those little, little incremental bits matter. But once you nail with the CTAs on the backside, just use that. But fundamentally, 50 even times three is going to get you 150 ads. And so one, one recording session, if you do that, it's like, you only have to think of three to five actual, like, media angles. And the rest is just hooks that you'll take from the best performing ads. And I would strongly encourage you, if you're running, one, look at, obviously, people in the marketplace that are, you know, kind of around you or adjacent. But the cool thing with hooks is that they work, they work across everything. And so I've used one of the same hooks in four different businesses that are completely different, B2B, B2C, tech, and service. And

• 58:58Alex Hormozi?

  it still works, right? And so like, you can reuse hooks. And so what, this is, by the way, why I don't pay for any subscriptions for ad free service, is I, I'm always just paying attention to the hooks, like, what hooks are coming in my, in my ads. And if I see an ad that's been running a lot, I'm like, it's probably a good hook. Yeah. So I just write it down. Yeah, I was looking at the sales transcripts and And get hooks that way, but that's really helpful. Yeah, I would know for sure. Just just watch ads. Cool. Thank you. You bet. It's helpful. Yes, okay.

• 59:24Speaker 06

  My name is Joris Schmidt. I sell car loans to entrepreneurs. We do six million revenue.

• 59:30Alex Hormozi?

  Cool.

• 59:31Speaker 06

  We'd like to be at thirty million revenue in twenty twenty seven.

• 59:35Alex Hormozi?

  Okay.

• 59:35Speaker 06

  But what's stopping me is that the CPA is getting higher and higher. When we started out, it was like four hundred, five hundred euros.

• 59:44Speaker 06

  Uh, now it's almost nine hundred euros, sometimes even thousand euros.

• 59:47Alex Hormozi?

  Okay.

• 59:47Speaker 06

  And I think we're overcompensating the sales reps.

• 59:51Alex Hormozi?

  Okay.

• 59:51Speaker 06

  Like thirty percent of revenue is for uh uh wages for sales reps.

• 59:57Alex Hormozi?

  What do you, what's LTV to CAC? So what do you make on a loan?

• 1:00:01Speaker 06

  Like two point five?

• 1:00:02Alex Hormozi?

  So you make twenty five hundred dollars and it's costing you, it was costing you six hundred, now it's costing you nine hundred for the same deal. Is that correct?

• 1:00:09Speaker 06

  Yeah.

• 1:00:09Alex Hormozi?

  Okay.

• 1:00:09Speaker 06

  Something like this.

• 1:00:11Alex Hormozi?

  Okay. Actually, just wrote an email about this today, which we'll got in like six weeks. So fundamentally, if ad costs are going up, and so you feel like there's some sort of ceiling, like you want to spend more, but you can't spend more because the ad, the cost goes up. There's basically one of three potential problems or solutions. So problem number one is that the LTV needs to get fixed, and this is just a fact of life as you go to colder and colder audiences. You you get out of your kind of honeymoon phase of the easiest targeting with the absolute highest interest, you know, most, you know what I'm saying? That very small amount of people who are perfect fits, and then it just continues to go wider and broader. Right? And so the way to fix that is that we have to increase LTV so that you can spend more.

• 1:00:53Alex Hormozi?

  The second um reason that this would be limited is based on the quality of the creative. And so um uh I think a month ago, we had, you guys seen the um Old Spice ad? The the, you know, the the guy, that whole, this famous ad. Um, so the guy who made the ad actually came here. Uh, kind of cool. Uh, so I, we got to to chat about that. But what's interesting about that ad is that that ad was so good that they could show it to everyone, and they went from like twenty percent of the market to seventy.

• 1:01:25Alex Hormozi?

  With one ad campaign. And so to me, that is like the, the perfect example of what like complete S tier creative, like the maxed out creative of just amazing advertising is. And so a lot of businesses will get stuck at a thousand dollars a day, for example, and say like, I think I, we've capped our market. When in reality, it's you've captured creative.

• 1:01:47Alex Hormozi?

  And so in order to break through that, the quality of the creative needs to go up and the volume also needs to go up by consequence. And so in the companies that we spend like a hundred thousand a day in, in terms of our ad spend, we, we create, you know, 50, 100 pieces a week that are going out in terms of ads. And then we do that at first and then we follow kind of Google's 70, 20, 10 kind of rule, which is 70% of the creative that goes on from that point going forward is the highest performing hooks from historic. Uh, 20% is kind of adjacent to that. Uh, so just kind of like remixes, remakes, slightly different versions of the originals. And then 10% is the wild ideas that you've been saving.

• 1:02:30Alex Hormozi?

  But since it's only 10%, you're going to only pick the ones you're like, I think this one's going to work because you have 20 crazy ideas because you're an entrepreneur and you think that'll be awesome, but you just got to pick the one or two. And so that's problem two, that could um, be the reason that, that, that you are capped. So um, either you are not. The creative sucks, your LTV is too low. And there was a third one, which I forgot. Uh, but there were three in the email. And so, uh, the question that, that I would have for you is which one of those do you think is the issue?

• 1:03:02Speaker 06

  I think the LTV is like, is, is too low. LTV to CAC, so we have to uh, make the LTV higher. Um, but also we, we have to get more creative. Better hooks. I think that's the, the key to uh, better scaling.

• 1:03:22Alex Hormozi?

  The backend becomes the arms race of every business that spends money to acquire customers, which is many businesses. And so if you look between industries, the benchmarks for plumbing businesses in North Dakota, the cost to acquire a customer is going to be more or less the same between businesses. So as much as we like to think that we have some like very special sauce about like our sales team somehow magically sells different, even though we recruit from the exact same pool and compensate the exact same way, like we think it's somehow different. But in reality, like we run similar ads, we're in similar promotions, we have similar sales teams, similarly compensated, pull from the same talent pool. And so CAC is typically very similar between businesses. But where you get the outsized returns are that some businesses can have 10 times the LTV, and that's how they ultimately win.

• 1:04:07Alex Hormozi?

  So I think you're right. So when I buy a business, I typically takes it back to front. And then I look at the creative and think, okay, how do we just do a ton more volume here? Typically because we just don't even have enough data to figure out what the best ones are. So like, let's do way more, then look at the top 10%, then do more of that. And that process just never ends. Does that help?

• 1:04:27Speaker 06

  Right.

• 1:04:28Alex Hormozi?

  Yeah.

• 1:04:29Speaker 06

  Hey, my name is Kevin. I sell plumbing services to commercial, residential.

• 1:04:35Alex Hormozi?

  Cus, sorry, plumbing services to who?

• 1:04:36Speaker 06

  To residential and commercial people.

• 1:04:39Alex Hormozi?

  Okay.

• 1:04:40Speaker 06

  We do about $5 million in revenue. Half of that's construction, half of it's service work.

• 1:04:44Alex Hormozi?

  Okay.

• 1:04:44Speaker 06

  I would like to do about $10 million in service revenue. And with stopping these, really the construction side is a huge focus and a drain. So I'm just kind of wondering if I should kill that side or refocus it so I can pay more attention to the service side.

• 1:04:58Alex Hormozi?

  What do you think I'll say?

• 1:05:01Speaker 06

  What do I think you'll say?

• 1:05:02Alex Hormozi?

  Yeah. I mean, as a, not as a slide, I just, I mean, genuinely.

• 1:05:07Speaker 06

  I don't know, that's why I was asking.

• 1:05:09Alex Hormozi?

  Okay. Yeah. Okay. No, that's fair. Is, I mean, fundamentally, is the construction thing just like a separate business?

• 1:05:15Speaker 06

  Yeah, they're essentially ran two separate ways. Yeah, just under one income statement. I bought the business a year and a half ago.

• 1:05:20Alex Hormozi?

  You bought the construction business?

• 1:05:21Speaker 06

  I bought both together a year and a half ago.

• 1:05:24Alex Hormozi?

  Interesting.

• 1:05:24Speaker 06

  Yeah.

• 1:05:25Alex Hormozi?

  From an entrepreneur who is retiring?

• 1:05:27Speaker 06

  Yes.

• 1:05:28Alex Hormozi?

  Got it. Okay. What's the EBITDA contribution of each?

• 1:05:34Speaker 06

  It's about fifty fifty, but the pay like the accounts receivable collection on the construction and the capital or in capital requirements is much longer. The capital sucks. Right, exactly.

• 1:05:44Alex Hormozi?

  Yeah. Is there one of those two businesses that you like better?

• 1:05:48Speaker 06

  Yes, service.

• 1:05:49Alex Hormozi?

  Yeah, I would be willing to let it go. It's sunk cost. It's like it's already in your head, even if you even if you bought it and paid for it.

• 1:05:59Alex Hormozi?

  It's it's that decision's done. And the only decision you have now is like, well, if I were to start this today, would I do it this way? Probably not. And so if you're looking at also from an acquisition perspective, like if you want to get acquired in the future, which is I'm guessing because you bought it here, it's cleaner. It's like, what's the because they're going to probably want to carve out because they're like, well, we only want this piece. And this is different than that. And especially if it's splitting your attention, you'll be amazed at how much faster the other one will grow by getting rid of the headache. It's just really painful in the short term because you have all these like, I made this mistake. I should have. And I will refer back to the nine failed businesses I have and losing all of my money twice. And so like, I think the game's long and I think your gut was right. I think you kind of know.

• 1:06:39Speaker 06

  Okay, thank you.

• 1:06:40Alex Hormozi?

  Yeah, you're welcome. My name is John and I run a cold email agency and I sell to other agencies. We are making one million per year and we would like to go to ten million. And what's stopping me is high churn rate. And I think it's because, I mean, the core issue is when we deliver the leads to the agencies, they cannot close them. Or if they close them, they're on full capacity. Yeah. Yeah. Uh, my guess is that you're serving customers that are too small.

• 1:07:17Alex Hormozi?

  So, um, this is probably going to be really good for like a third of you in here. Or like, rather, it'll be really relevant for like a third of you. So there are some business models that small business owners look at from large businesses and say, I'll do that same thing for the bottom end of the market. The problem is that that strategy typically only works with a fully fledged business. And so

• 1:07:45Alex Hormozi?

  if you look at a small business, these agencies that you're selling.

• 1:07:51Alex Hormozi?

  They're volatile, like they have good ones, they have bad ones, they have good ones, they have bad ones. And their volatility now reflects onto your volatility. And so, let's say you make them some money here, then they make more money here. And then all of a sudden they make less and then they make, then they cancel, right? And so these things are called structural churn, which is that um, kind of things that are inherent to the industry. And so I'll tell you a story that might make this relevant. So I was talking to a friend of mine who owns a CRM in the gym space. And I was asking him, I was like, what's your churn? I would imagine it's like zero. He said, ah, it's about 3% a month. And I was like, 3% a month for a CRM? He's like, yeah, he's like, about a third of the gyms got a business every year.

• 1:08:37Alex Hormozi?

  And so like, there's nothing they could do to improve the product anymore. Just a third of the businesses go out of business every year and there's nothing you can do to the product. And so it's kind of similar here, which is like, if you look at, and this is a great exercise. If you look at the ultimate version of your business, because there is a a much bigger bit version of your business, which is you look at Ogilvy, you look at NP Digital, you look at Vayner, right? They're big agencies that exist. Who do they serve? Fortune 100. And so, the reason that those work that way is because those businesses can pay on time. They have salespeople that know what they're doing. They have a process in place, they have margins, their check's clear. And when they sign contracts, they keep them, right? And that's because they're good businesses.

• 1:09:21Alex Hormozi?

  And so it's very likely that you're not in the wrong business, you might just be serving the wrong customer. And so if you were to look at your spread of customers right now, I would bet that there are some that have been with you for a little bit. Right? And then all the new ones just churn out, it's just like, they're the ones, right? And so those ones that have been with you for a little bit probably look a little bit different than some of the ones who are coming in.

• 1:09:42Speaker 05

  We didn't analyze and

• 1:09:45Speaker 05

  Like you can't really always see this from from the outside because they can just sell. So this is hard to say like from the outside if they can sell. So they wanted to stay with us, they can sell and they can close the leads.

• 1:09:58Alex Hormozi?

  Were they at a certain size already?

• 1:10:00Speaker 05

  Yes, but the same size like other people were churning.

• 1:10:03Alex Hormozi?

  Sure. And so if there are intangibles that someone has to have, you can test for that. Or you can just go up market. So think about this way, if somebody does a five million dollar a year agency, they have to sell. There's no way they'd get to five million without being able to know how to sell. Right? And so you can just put like, you can try to test for it or you can just make a requirement. That would make it impossible that the person didn't know how to do that. Does that make sense? And so I try, like, if I can get something that's really small and testy, that like allows me to go a little bit lower market. That's okay. Otherwise, I'll just put a bar and say, it's gotta be this. But likely, and so many of you, I think, are in the same boat, though, is that you serve, you have a business model that is better served to a bigger customer.

• 1:10:46Alex Hormozi?

  And you charge too little and then they churn. And then you keep trying to like, think about what new thing do I need to add to my offering? Like what new guarantee, what new onboarding process? Like you're keep adding things and it doesn't matter because they are volatile. And that volatility will not change. Does that make sense?

• 1:11:04Speaker 05

  Yeah, thank you.

• 1:11:07Alex Hormozi?

  Oh, by the way, the equal opposite of that is that if you were in that, in that position, if you do want to serve that market, then you have to make the entire business model around being the low cost leader. And so you can serve that market if you have like a very tech-enabled service or software where you could charge those people three hundred dollars a month, which is always going to be below their volatility level of cash flow.

• 1:11:29Alex Hormozi?

  But it has to cost you nothing. And so the idea of like, I will, you know, fifteen hundred dollars a month for lead generation or whatever it is, like, which is kind of like the standard, like that model doesn't work because it just won't scale.

• 1:11:45Speaker 05

  Okay.

• 1:11:46Alex Hormozi?

  But you can always make one to three million bucks here with it. And just always be like looking on the hunt for the next lead. Yes, I've ever had it. Yes, sir. Hey, Alex, my name is Jordan. We own a gym.

• 1:12:00Alex Hormozi?

  Who's selling?

• 1:12:02Speaker 02

  Memberships and subs, we do gym launch.

• 1:12:06Alex Hormozi?

  Okay.

• 1:12:06Speaker 02

  We just acquired the company about three months ago.

• 1:12:09Alex Hormozi?

  Is it a big box or is it a micro gym?

• 1:12:11Speaker 02

  It's micro.

• 1:12:12Alex Hormozi?

  Okay.

• 1:12:12Speaker 02

  Women's only kickboxing.

• 1:12:13Alex Hormozi?

  Okay.

• 1:12:14Speaker 02

  Yeah.

• 1:12:15Alex Hormozi?

  Talk to Ed.

• 1:12:16Speaker 02

  Yeah. We bought it from him.

• 1:12:18Alex Hormozi?

  Yeah, okay, yeah.

• 1:12:20Speaker 02

  Your opinion.

• 1:12:21Alex Hormozi?

  Yeah.

• 1:12:23Speaker 02

  So we have about 560,000 revenue.

• 1:12:27Alex Hormozi?

  Cool.

• 1:12:27Speaker 02

  See, trying to get it to 1.2 and then we're gonna sell it.

• 1:12:30Alex Hormozi?

  Okay.

• 1:12:30Speaker 02

  And buy our next bigger business.

• 1:12:32Alex Hormozi?

  Cool.

• 1:12:32Speaker 02

  Yeah. What's stopping us? Well, I was really concentrated on acquisition.

• 1:12:37Alex Hormozi?

  Sure.

• 1:12:39Speaker 02

  And really just getting as many customers as possible. And so kind of inherited a lot of, you know, customers that won't necessarily gain their full value. And so our churn is at 25% on average. We really gotta lower that and that's gonna really, really help us because we have no problem getting new customers.

• 1:12:53Alex Hormozi?

  Yeah.

• 1:12:54Speaker 02

  Really. Although we do need to work on more referrals. But my question to you is how quickly and how would you go about lowering that 25% churn going into 2025?

• 1:13:07Alex Hormozi?

  Can I have that book real quick?

• 1:13:11Alex Hormozi?

  Thank you. So did you go through the four horsemen, five horsemen retention?

• 1:13:16Speaker 02

  Yes.

• 1:13:17Alex Hormozi?

  So those are the things that we have done consistently to cut churn. Are you doing all of them?

• 1:13:24Speaker 02

  Not consistently, yeah.

• 1:13:26Alex Hormozi?

  Well, I would do them consistently and I'm not saying that is a like, the interesting thing about the horsemen retention is that they, when you realize how much work it is, you're like, holy shit, this is a lot of work. But that's also why people stay. And so the point of the five horsemen retention is to approximate what having a small tribe feels like in a disorganized manner, doing it on purpose. And so some of you guys are familiar with Dunbar's number, which is basically like people can maintain whatever 125 to 150, basically acquaintances in their mind. And that's, I think, the reason that the vast majority of gyms tend to cap around

• 1:14:08Alex Hormozi?

  100 to 150 because that's about as many as the owner can manage in their mind without it becoming too big. And then beyond that, new people come in, they never really get assimilated and they turn back out. And so it's like, what are we doing with the original 150 people that we're not doing with these other ones? And so that's where the touch bases. On a regular cadence are super helpful. So Mike Ferrera has his retention system where they he updated the five force men. Sorry, I'm getting really tactical about gyms.

• 1:14:38Alex Hormozi?

  So, but basically alternating between an internal referral play. They've got fast cash Fridays, which is how they get, you know, how they generate the referrals. They have a weekly theme that that's gives you the thing to talk to them about because it's like, how do I approximate a relationship? It's like, I check in on people and I let them know the thing that's new, that's cool. And so the tweak from the system that I have here is that I used to check in about people's results. And we realized that people didn't care and just wanted to work out and have fun. And so us reminding them about the fact that they were still overweight didn't actually help. Real talk. And so we were like, okay, so that that's probably the big major shift between what is in here and what is kind of now the the most up to date.

• 1:15:23Alex Hormozi?

  And the every other month is when you run the internal play. So internal plays are like when you hit your list up and say, hey, we're doing.

• 1:15:33Alex Hormozi?

  It's the last chapter of the offers book. It's whatever our internal seasonal promotion is. So it's, you know, Valentine's Day, you know, get fit to fudge with your, you know, with your loved one, whatever, you know.

• 1:15:47Alex Hormozi?

  Accountability buddy, you know, lean by Halloween, you know, whatever. And so

• 1:15:54Alex Hormozi?

  the churn though is still going to be the quality of the sessions. I mean, the fundamentals are going to be there. The sessions have to be good, the music has to be good, the trainers have to be solid. You want to reach out on a on a once every other week basis. You want to check in around the promotion that you're running or the bring your friends component that you're that you're doing. And obviously the sales stuff and getting the pre pays and stuff Ed's already given you. So that's the big stuff. But the the the main thing that drives down churn is consumption. And so all of the objective has to be around, how do we get them to use the membership? No one cancels a membership they use.

• 1:16:32Alex Hormozi?

  And so people will cancel $10 in memberships if they don't use them. Like, nothing is worth it if you don't use it. And so that's the, um, that's the TLDR. Any questions on that? Cause I want to make sure that you feel okay.

• 1:16:43Speaker 06

  No, thank you.

• 1:16:43Speaker 01

  Alex, thank you for all you do. I appreciate you.

• 1:16:46Speaker 06

  Oh, you bet.

• 1:16:46Speaker 01

  Uh, my name is Renz. I sell structural engineering services. So I designed commercial, large scale, commercial real estate buildings for commercial real estate developers and architects. Do 5.2 million in revenue, trailing 12 months, closed revenue predicts next year is about 8 million. Wanted to do 20 million in 2027.

• 1:17:04Speaker 06

  Uh, learned a lot from the team and most of which is my data isn't organized properly for me to understand my appropriate CAC and LTV.

• 1:17:12Alex Hormozi?

  Yeah.

• 1:17:12Speaker 06

  But in our business, high reoccurring, right? They do a lot, but it's cyclical. The funding's interesting. Um, I feel like a certain amount of my marketing is just necessary to nurture my existing clients and has all these other. So when I go into like CAC to LTV to figure out my slot machine on where to allocate capital, that's where I get confusing. Just curious if you've had.

• 1:17:33Alex Hormozi?

  Well, you would just loop all of that, all that nurture into CAC.

• 1:17:37Speaker 01

  And then what about LTV for new customers? You just call that, you look at that as your CAC versus your new LTV?

• 1:17:44Alex Hormozi?

  So CAC's CAC.

• 1:17:45Speaker 01

  Yep.

• 1:17:46Alex Hormozi?

  So think about it like I say, so every month you spend X amount of money in general. So forget about the fact that like, some of this is nurture for customers who've been here before. You pay this amount of money every single month that goes into advertising and sales to a car customers. So all of that blended together. And if you have more lumpy revenue, which I'm guessing you do, uh, you just expand the time horizon. So you look at trailing six or trailing 12 and say, okay, we spent just, let's simple math. We spent a million dollars on marketing and sales this year, whatever, between commissions and, uh, advertising. Okay, over that year, we acquired, call it 50 customers. Okay, so our CAC is $20,000. So the longer the time horizon is also, by the way, the more accurate it tends to be.

• 1:18:29Alex Hormozi?

  So if you just zoom it out, cause like if I just says, like, what's your CAC today? It's, you know, it's kind of like that, this volatility thing. It's like, our CAC today is terrible. And then tomorrow it's amazing, right? And so the, the, the, the further out you blend it, the more accurate it will be. Um, but in terms of, uh, less than gross profit or LTV, um, that one.

• 1:18:50Alex Hormozi?

  There's a lot of different ways to calculate it. I tend to calculate it in the ways that are underestimated so that I like, I want to overestimate CAC and I want to underestimate LTV. If I do that and I still have my good metrics, then I'm kind of like in safety zone on both. So like I'll do fully loaded CAC, which is like including commissions and the software and the media spend and the nurture and all that fully loaded. And then LTV, I'll say, okay, if I want to have the lowest LTV, I would just look at same thing. All customers, what do they spend historically? So even if you look at all the way from it's been five years, whatever, even in business, what was revenue? How many customers do I have? And you just do total revenue over five years, divided by total number of customers acquired. And then you're like, wait, but somebody's customer only six months old. It's going to underestimate it, but then you still have a, that will be the most,

• 1:19:35Alex Hormozi?

  it will be the ugliest version of that number. But if that's baseline, then you can only go up from there. Does that make sense?

• 1:19:40Speaker 02

  Does.

• 1:19:41Alex Hormozi?

  Okay.

• 1:19:43Alex Hormozi?

  Was that helpful?

• 1:19:44Speaker 02

  Absolutely.

• 1:19:44Alex Hormozi?

  Okay.

• 1:19:45Speaker 02

  That's my wish. My name is Tyler. I sell roofs to residential homeowners or commercial building owners. We're about 10 months old, did 1.8 million in revenue this year. Uh, yeah, somewhat. Uh, a lot of the guys, like I've been in the industry for a while, so I had a lot of return customers. Did about 1.1 from return. And then my for sales guys brought the rest of the business. Um, short-term goal would be eight million, go to that. And then long-term would be around 70 and exit. Um, the problem is we don't know what model to choose or how to do it. So like, was it franchising?

• 1:20:18Alex Hormozi?

  Are you going to go like sure it's a storm chase or are you going to do private like cash pay like new?

• 1:20:22Speaker 02

  We haven't done any storm chasing.

• 1:20:23Alex Hormozi?

  So it's all new roofs and repair?

• 1:20:26Speaker 02

  So, so it's, the market that we live in is, is we get storms every year. So, um, yeah.

• 1:20:32Alex Hormozi?

  It's insurance.

• 1:20:34Speaker 02

  95% is insurance.

• 1:20:35Alex Hormozi?

  Okay, it's insurance. Got it. Okay.

• 1:20:37Speaker 02

  Yeah. So what, I guess my question is like, how would you scale or what model would you choose? And then how would you go about building that?

• 1:20:44Alex Hormozi?

  Well, you already have 95% insurance. So I would probably keep doing that. So what stops you from doing that?

• 1:20:51Speaker 02

  Well, we're going to stay with insurance. Well, insurance is changing a little bit. Deductibles are growing up. Homeowners don't want to get their roofs done as often. But would you scale to multiple locations, like different cities? Or would you do like a franchise model?

• 1:21:02Alex Hormozi?

  Hmm. Do you feel like you've nailed the model? No. I would, so right now, what I, what I wouldn't want to do is try and make a decision with incomplete information when, when, when it could be knowable. And so I think, once you nail the model, then the path will become really clear. And so if you nail the model and then the returns on capital are really like interesting and you can be more patient, then owning them all privately becomes more interesting. If it costs a ton of capital to open up and let's say it requires a lot of like oversight, then sometimes a franchise model can be good. But fundamentally, I kind of see franchises as like being impatient, just being honest. Because like all, basically it's the most expensive form of capital.

• 1:21:45Alex Hormozi?

  Is you say, hey, we're going to partner and you're going to take, you're going to put all the money in and I'm only, I may become a, you know, maybe you get eight percent of top lines and maybe figuratively it's like 25% partner or 30% partner location, which is okay, like nothing wrong with that. But I have seen such a graveyard of, you know, 20 location franchises that make no money. And the amount of work that it takes to maintain 20 is about the same amount of work as it takes to maintain 20 where you own them all. It just happens faster. But you make way less money. So I, I have a habit of flipping franchises back into let's own them all, like the teeth widening chain that we bought. When we bought it, we had 14 corporate stores, we had 18 open franchisees.

• 1:22:28Alex Hormozi?

  And so then over the last 12 months, we bought out all 18 franchisees. And so now we own all 32, but then like all of the administrative headaches just basically disappeared because we just run them the way we want to run them and we make more money. But yeah, I think you need to nail it and then the scaling of path will become clearer. I know this is not the sexiest answer, but that's probably the truth. No, thank you.