The Mozi Hotline Is Open | Ep 892

In this episode, Alex (@AlexHormozi) opens up the Mozi Hotline and takes live questions from business owners in the trenches. From someone selling green rings to signal they're single, to a founder burned out from scaling too fast, Alex delivers unfiltered, tactical advice on pricing, focus, customer acquisition, and when to quit. Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast, you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Wanna scale your business? ⁠Click here.⁠ Follow Alex Hormozi’s Socials: ⁠LinkedIn ⁠ | ⁠Instagram⁠ | ⁠Facebook⁠ | ⁠YouTube ⁠ | ⁠Twitter⁠ | ⁠Acquisition Mentioned in this episode: Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap

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

• 0:00Alex Hormozi?

  The biggest belief breaker that I've had with content is that when I saw the guys who are the true, the best in the world, 20 million plus subscribers on YouTube. And I asked them to kind of look at my stuff. They said, oh, well, send me your pre-production notes. And I was like, what do you mean? I kind of just like have a couple of stories and I turned the camera on. They're like, yeah, well, that's why you don't have 21 subscribers. I was like, well, that that tracks.

• 0:23Alex Hormozi?

  What's going on everyone? We're live in our first personal promo Z hotline, second ever, I guess. I did one with Sean Purry. And he did a little Twitter post and said, if anyone asks questions business wise, you can ask them. And I had a blast doing it. And I was like, I would much prefer to do this. Then make the the good old fashioned right camera. Not that I don't love it, but we're gonna see what we got. All right, caller one. Let's see here. Hello.

• 0:48Speaker 01

  Hello.

• 0:50Alex Hormozi?

  How are you?

• 0:51Speaker 01

  I can't even believe I'm talking to you right now.

• 0:54Alex Hormozi?

  I can't believe I'm talking to you.

• 0:57Speaker 01

  This is Candace Lambert. Nice to meet you.

• 0:59Alex Hormozi?

  Nice to meet you too Candace. Tell me about the business. What's going on? What's the issue?

• 1:02Speaker 01

  Okay, so I am ready to ring for single people because I'm a single all my life and the dating apps are just insufferable. So it's just a ring that screen that kind of shows that you're single and seeking. It has gotten some traction.

• 1:19Speaker 01

  Here's where it's at. It's a colossal task to educate everybody that needs to be educated about it. And that's what it's making people have the chance to buy it. Because they're not seeing it on anyone else or their deliveries or anything like that. So they're kind of waiting, can't be bought. So I do a ton of products. They're like, just get it out there. I went out there promoting it. You want a bigger part? I do what I can, you know, in my free time. But like I said, I also have a salon, a barber shop and Airbnb and I work there six days a week.

• 1:48Alex Hormozi?

  God, how many businesses you got going on right now?

• 1:50Speaker 01

  That's what Alex do.

• 1:53Alex Hormozi?

  Well, I mean, we'll try and figure out what you should do more than what I would do. But all right, tell me, what's revenue of the ring?

• 2:00Speaker 01

  Yeah, not a lot. We've sold maybe less than 20 rings.

• 2:04Alex Hormozi?

  Oh, 20 rings in total. Okay, got it. All right. What do you sell the rings for?

• 2:09Speaker 01

  It's 129.

• 2:11Alex Hormozi?

  Okay, got it. 129. All right. So that's a, yeah, not a lot of dollars.

• 2:14Speaker 01

  It's a really nice packaging and it has an offer to. Card with each one and they're like very great.

• 2:20Alex Hormozi?

  Okay, what's so give me the uh the salon. So what are you making on the salon?

• 2:23Speaker 01

  Oh, the salon about probably definitely probably.

• 2:27Alex Hormozi?

  And that's your net or revenue?

• 2:28Speaker 01

  Um revenue.

• 2:29Alex Hormozi?

  Okay, got it. And you own the salon?

• 2:31Speaker 01

  Yes.

• 2:31Alex Hormozi?

  Okay, got it. Okay. And then what's your take on the on the hundred?

• 2:35Speaker 01

  Yeah, so I did pretty good. I mean, I break home probably seventy five and I make about twenty five thousand on the Airbnb.

• 2:44Alex Hormozi?

  Okay, great. So that Airbnb is twenty five K. Okay, got it. So what do you want to have happen here? Because I'll tell you this, trying to change the entire social norm around single versus not singles, tough, like super tough. There's also not like a recurring revenue thing. So it's like I would want to educate the entire world on different way of single versus married. Only to sell them something one time is a very hard model.

• 3:09Speaker 01

  Well, okay, so my did have plans and I'm partnered with a jewelry company for scaling it. Literally, the company is the only jewelry lot for singles, the first and only jewelry lot for singles. So we would have like stackable singles that you could also add, you know, like we have collections. So with the product being the thing back from the great.

• 3:29Alex Hormozi?

  Well, if this were Shark Tank, Candace, this is a tough one. So that for me, this would be a pass. Basically Candace is in one of these situations where she has this really big, you know, dream idea of this. I'm going to change the the world of singles and dating. And then she has two other businesses that she has kind of going as well. So she has three enterprises she's pursuing and she also doesn't have the resources to really do this. I wouldn't want to pursue three things like now and I have a ton of resources. And so like the reason that I harp on focus so hard is that it's just so hard to make anything work. That you have to put all your resources into one thing if you want to make it bigger. The getting the single rings is like I have to change the entire perception of a population. And then if I were to do that, I would want to make sure that I had some way of consistently monetizing them for an extended period of time.

• 4:13Alex Hormozi?

  Now, selling a physical product that's a one time purchase on a hundred twenty nine dollars to me is very tough. So like even something that's a product like a drink or something like that, well, it's consumable. I'd be inclined to think, okay, well, if we make sure the product's good enough and people keep buying it again and again, so we're. Buy a customer once, but then we get customer for life. Here, it's purely transactional and like, do people want to stack rings? I don't know. Do people want to say and shout to the world that they're single publicly? I don't know. I mean, up to this point for zillions of years, just not having a ring has been the demonstration of that. I would be focused on the business that's the salon business and say, okay, how do we take this to four million a year? Or how do we take this to a million dollars a year? And focused on that, that's what I would do. If you're like, what would Alex do in my situation? And I, I wouldn't think about the ring, just to be very candid. You have three different businesses going on. You have super limited resources, limited time, limited money.

• 4:59Alex Hormozi?

  And the ring especially is going to require a ton of, of capital to really, to really win. And so the way to, if you really do want to make the, the ring win, the way to do it would be to dramatically decrease the scope. And so what I mean by that is that you would say like, how do I win the green ring in a high school? And then how do I win in, in, or college, whatever? And then how do I win in three colleges or five colleges? Right? You have to, you have to just dramatically narrow the scope so that the resources you have can get saturation. Because the business model that you have is a good business. It's just incredibly hard to do. It's like Facebook's business model, really good business, really hard to do. Right? That's why there's a label on Facebook. I see where your passion's at with it. First off, I wouldn't do it.

• 5:41Alex Hormozi?

  But if I were going to do it, I would do it this way, which is I'd get way, way, way, way, way, way, way more narrow. On a tiny, tiny, tiny little, a puddle of a puddle of a puddle that I could put all my time and effort into. And the key for you is that you have to have a viral coefficient. Right? You have to have something that gets it shareable. Like people have to want to share it because your dollars aren't going to go that far. Cause you don't have that many. So you have, like, it has to grow off word of mouth. If it doesn't, you have to keep fixing until it grows off word of mouth. It's the only way you're going to win unless you raise a ton of money. That's me being real rather than nice.

• 6:13Alex Hormozi?

  Yeah, that's great. That's what I want.

• 6:14Alex Hormozi?

  Okay. Well, I'm still rooting for you to do the salon because I think that you just, you can, you can much more easily just be like, okay, I'm going to buy back something doing her. But that's another call for another day. Appreciate you getting this. No, you're great. Thank you for being a sport. Alright, bye. Yeah, I want to be real with you guys. I will, I will always be taking the perspective of like, if I were to invest in this business, what would I do? If Candace were really serious about the green ring idea that she has, she has to, it's gonna take a ton of money and it's gonna take a, and it has to have a huge amount of initial traction. And so I would be continually tweaking the product, tweaking the product, tweaking the product. Now, right now, the ring itself is not really the product. Like, if she wants to build the app, that makes more sense, these things go together. But just selling the green ring is very much marketing, and that's very hard to do.

• 6:59Alex Hormozi?

  Word of mouth, only sell a concept of marketing, be via word of mouth, like product, because as soon as you're two degrees separated from the founder, the product has to do the selling more than anything else will, right? And maybe you can make the argument that a story will, but again, it's like, you have to have such a small pond where like you can actually achieve saturation, where it actually becomes useful. This is Alex on the Hermosy hotline.

• 7:22Speaker 01

  Yeah, thanks for, you can tell me about all.

• 7:24Alex Hormozi?

  You bet. Tell me about the business. What's the problem?

• 7:26Speaker 01

  So I run a digital marketing business where we focus a lot on posting, website, and things, both design. And honestly, I don't know what to spend most time to get people in, uh, do about thirty-five hundred a month. Uh, I also have a full-time job with Three Six, so.

• 7:47Alex Hormozi?

  Got it. So you're making thirty-five hundred a month right now off of it?

• 7:50Speaker 01

  Uh, on that business, yes.

• 7:51Alex Hormozi?

  Okay, thirty-five hundred bucks a month. Got it. How many hours are you spending on it?

• 7:55Speaker 01

  Roughly twenty to thirty hours a week.

• 7:57Alex Hormozi?

  Okay, twenty, thirty hours a week. Got it. Can you handle more business right now?

• 8:01Speaker 01

  Yes, I can. Actually, I had to bring on a team because, uh, I knew that I wasn't being able to scale.

• 8:07Alex Hormozi?

  Okay, if you had to bring a team on and you got thirty-five hundred dollars a month, you're underpriced. So that's like thing number one is that you probably need to charge more for what you're doing. How many clients do you have at thirty-five hundred?

• 8:15Speaker 01

  Uh, we run, uh, we.

• 8:19Alex Hormozi?

  Oh dude, but wait, you're, who are you, is this for businesses?

• 8:22Speaker 01

  Yeah, it's for a service-based business.

• 8:23Alex Hormozi?

  You run an ads? Are you, they're just like managing the purchase?

• 8:27Speaker 01

  Ads, we're just basically managing and providing so that they can focus on their.

• 8:31Alex Hormozi?

  So why do you need a team if it's so passive?

• 8:35Speaker 01

  Mostly because I don't want to handle the website design anymore. Uh, we run.

• 8:42Alex Hormozi?

  But they're paying a hundred fifty bucks or a hundred and whatever, two hundred bucks, somewhere in there, a hundred and seventy-five dollars a month?

• 8:47Speaker 01

  Yeah, uh, someone like you can, you can just pay one fifty and three hundred bucks.

• 8:51Alex Hormozi?

  Okay, so you got twenty clients paying somewhere near to a hundred and fifty, whatever, plus a month, right? And you're managing their, what is, what is managing the site actually a tale?

• 9:04Speaker 01

  So hosting, backup, security updates, uh, making any changes I need to sites.

• 9:10Alex Hormozi?

  Okay, doesn't sound like a ton unless you have a lot of people who are asking for a lot of stuff.

• 9:14Speaker 01

  No, uh, usually our cost on a per client is not thirty-four, it's usually thirty-five dollars.

• 9:20Alex Hormozi?

  Okay, so when you said team, do you mean you have one guy who's doing this?

• 9:23Speaker 01

  Three.

• 9:23Alex Hormozi?

  So three guys make it like, nothing?

• 9:25Speaker 01

  No, I honestly have no idea what they're making it.

• 9:29Alex Hormozi?

  Well, we're splitting thirty-five hundred dollars and you're running, you're running eighty percent gross margins on it, so there's only seven hundred dollars left, you said there's three guys.

• 9:38Speaker 01

  Yeah.

• 9:39Alex Hormozi?

  So they're not making anything, my point. So we've got, we've got three teammates, fine, okay. There's a whole bunch of things that need to get fixed, but we'll, we'll get to that in a second. So how are you getting customers right now?

• 9:50Speaker 01

  More about, uh, Facebook sometimes, a little networking.

• 9:54Alex Hormozi?

  Okay, when you say Facebook sometimes, what does that mean?

• 9:56Speaker 01

  Facebook groups, going and answering questions, something like that.

• 9:59Alex Hormozi?

  Okay, cool. So if you're not the one doing the actual website stuff, what is the twenty to thirty hours a week you're spending on this business?

• 10:07Speaker 01

  Trying to grow through networking.

• 10:08Alex Hormozi?

  Okay, and that means like in-person, like, so I mean, that's, that's four hours a day, right? I mean, that's, that's real time. So what, so what are you doing every day?

• 10:16Speaker 01

  To be honest, I, I don't know, that's why, that's honestly why I need to.

• 10:20Alex Hormozi?

  Okay. No, you're good. No, you're good, but you're good, you're good. Okay, I'm gonna help. Alright, so we have to pick one of the four promotion methods, okay? So you can reach out to friends, one-on-one, so think text, DM, email, phone call, any of those. When I say friends, I mean anybody who's in your contact list, anybody who's a subscriber to yours on any platform, anybody who's ever emailed you in your entire life that's in your Google or whatever Gmail, you know, whatever your email provider is that's ever emailed you. That is, that is the first list you make. You export all your contacts on your phone, all the people that you, that are subscribed to all your social medias, all of the contacts you have on, on your email platforms. And then you message all of them with an option to, well, if you want, you can work for free for a period.

• 11:04Alex Hormozi?

  And then if they're happy with it, they can start paying. I mean, that would be the first thing we do. The next thing is that you need to raise the price by a ton. So, I mean, for what you're doing, I would say like, minimum, I charge 500 bucks a month. Like, and right now, you might be talking to business owners who are just not that big either, which means you just have to go after people a little bit. But I mean, if you just do that, if you did nothing else, like if you're spending 20 hours a week and you just spent four hours every day, just messaging the people, say, hey, can I work for free? And then if I do a good job, pay me afterwards at this rate. Like, I think you'll probably do more than you are now. That's thing one. Thing two, I mean, I can give you thing two. Do you want to do thing two or you just do thing one? Just do thing one and still make more.

• 11:48Alex Hormozi?

  Yeah. So thing two is that I, I want you to make the same, like make some content, but make the content in those communities. All right. And ideally, I think if you're like, you can go after local because there'll be a little bit more trust if you're down the road, et cetera. So look at the locals, all business groups on meta and whatnot. And I would just basically put valuable posts. I would put teardowns in there, like look at this website that we redesigned for free. Look at this website that we did. And I think people will just solicit you and anybody who interacts with it, you can reach out and offer them freestyle. And then when they get on the phone, of course, you can say, hey, that's what I'll do for free. I do more stuff for money if you want. And then you can obviously stop from there. That's it. That's all you got. Like, that's where all your attention to be gone. One is we have to chase the price from 150 to 500. And number two, you can give away a free thing upfront into the 500. And number three, spend the 20 hours a week doing op out, one on one.

• 12:34Alex Hormozi?

  All right. Appreciate you, man. No, you bet. Congrats on the business. Thanks for taking a leap. Hello, Hormozi hotline. Gabby, what's up? How are you? Excellent. So tell me about the business. What's, what, what do you want to have happen that's so happy?

• 12:46Speaker 01

  Well, so I grew this, um, solo. Over the course of a year to a six-figure business. Amazing. And I created, thank you. I created so much demand that I could no longer handle it by myself. Awesome. So. What do you sell? Um, so I sell what's called the compass. It is a confidence, resilience and emotional mastery system for youth athletes. Okay. To help them understand their emotions on the core, to help them be confident, to help them.

• 13:15Alex Hormozi?

  Is this a course or is this a survey? Like how, what, what's the delivery?

• 13:19Speaker 01

  It's, oh, so it's a physical workshop. Okay. The workshop was designed to kind of meet kids where they are. Okay. In a gamified setting. Okay. So I will guide them through what I developed called the maze model. Okay. So it's mindset, analyze, zero and execute. Okay. Reflection over the course of every season. So the challenge with our kids these days is that they are accustomed to instant gratification. They don't know what exists, or we tell them they have to work or something. And then with social media, they're very insecure. Yeah, hurt, okay. So they're always like comparing themselves. We're trying to help them with that.

• 13:50Alex Hormozi?

  Let's go business. What's revenue right now?

• 13:52Speaker 01

  Revenue right now, I'm around 10K month over month, but that went down from 30 to 40 when I hired people.

• 13:59Alex Hormozi?

  Wait, re- revenue's top, okay. When I'm saying revenue, is your, are you still doing 30, 4,000 a month in total sales?

• 14:05Speaker 01

  No.

• 14:06Alex Hormozi?

  Okay, and then your profit is 10?

• 14:08Speaker 01

  Um, no, my, my revenue has dropped from 30 to 40 down to 10 after hiring people.

• 14:13Alex Hormozi?

  Costs go up, revenue goes down. No winner. Okay. Got it. What did you stop doing when you hired these people?

• 14:21Speaker 01

  I stopped doing all the services myself.

• 14:24Alex Hormozi?

  Okay, and so as a result, word of mouth stopped because they're not as good too?

• 14:28Speaker 01

  Um, they're not as good, they're new.

• 14:30Alex Hormozi?

  Well, they're not as new. We gotta be able to speak clearly, right? They're not as good. If they were good, then you, this wouldn't have happened. Okay.

• 14:36Speaker 01

  It wouldn't be wrong.

• 14:37Alex Hormozi?

  Right, so you have people who are delivering the services. As a result, they're not doing as well, and since they're not doing as well, you're not getting referrals. That, summarize it?

• 14:46Speaker 01

  Not getting referrals and not able to handle any demand in the business. So. Just the back to like for me as a founder, I need to be talking to customers. I need to be doing content. I need to be leading the team and organizing the team and running data systems, which I can't do anymore because I have to change.

• 15:03Alex Hormozi?

  But before this, you were generating demand and doing three or four times the volume without them.

• 15:08Speaker 01

  Yes.

• 15:09Alex Hormozi?

  So what am I missing?

• 15:10Speaker 01

  Killing myself doing, I was killing myself doing it.

• 15:13Alex Hormozi?

  And now you're getting killed.

• 15:14Speaker 01

  Yeah, now I'm getting killed dollars by it.

• 15:16Alex Hormozi?

  Yeah.

• 15:17Speaker 01

  Um, I have a brick and mortar and I have a digital side. So the brick and mortar is very labor intensive. I control it all. So it's hours upon hours of coaching, practice planning, um, talking to the parents and making sure the parents are understanding where the kids are developing, where they're not. And all of that was just, I did it for a year by myself and then it was just, I ran myself to the ground. Like I need people to help me do this.

• 15:41Alex Hormozi?

  What are you charging per student?

• 15:42Speaker 01

  We charge seventeen hundred and fifty dollars for our twelve week course, which includes four hours of training per week over the course of twelve weeks.

• 15:50Alex Hormozi?

  Okay.

• 15:51Speaker 01

  That's our flagship offer.

• 15:52Alex Hormozi?

  Okay. And is that one on one?

• 15:53Speaker 01

  It is groups, a small group setting. We tap our classes at twenty. Right now I have, when I was doing thirty to forty a month, I had half full classes, so ten, ten girls.

• 16:04Alex Hormozi?

  Is this in person?

• 16:05Speaker 01

  In person.

• 16:06Alex Hormozi?

  So people come to you in person for the four hours per week of sessions?

• 16:12Speaker 01

  Correct, for the brick and mortar.

• 16:13Alex Hormozi?

  Got it. Okay. Times twelve weeks. Okay, got it. And so they're paying, you know, just under two grand for, for forty-eight hours call it of work. Does that sound right?

• 16:22Speaker 01

  Yeah.

• 16:22Alex Hormozi?

  Okay, got it. And then it's one on, you said one on ten?

• 16:25Speaker 01

  Yep.

• 16:26Alex Hormozi?

  Okay. So for one session, right? If you just did one, one four hour session a week for twelve weeks, you could do seventy thousand five hundred dollars if you just did that. Okay. And that'd be over twelve weeks divided by three. So you'd be somewhere, whatever it is, six ish, you know, a thousand dollars a month if you just did one of those per week. If you did five of those a week, so half of your day, then you'd be making thirty thousand dollars a month. And that's kind of, I'm guessing where you were before this?

• 16:51Speaker 01

  That's kind of where I was before this. Um, we also have the digital side. So what I did, when I got to the year, I was like, oh my gosh, the cost of acquisition in my body and labor is so high. What if I put all my attention into the digital side? I can scale faster, I can do more clients. It's not in person, so I can go wider in part. Um, so we spent the last couple of months while I hired my employees building out a physical system. Um, a digital ecosystem where we are focusing on selling journals. My enterprise client is volleyball clubs. So there are about five thousand volleyball clubs across the nation and their average amount of players per club is around two hundred.

• 17:35Speaker 01

  And so I have a number of clubs buying the journal and we're trying to get them into the ecosystem and do a product there. So like, can I replace my brick and mortar with the digital or can you run both at the same time? That's kind of where we are right now.

• 17:50Alex Hormozi?

  Is this your whole business? Is your primary thing that you do?

• 17:53Speaker 01

  Yeah.

• 17:53Alex Hormozi?

  Okay. You, I mean, you have a decision you have to make, which is what business do you want to, you want to own? I mean, obviously the online is going to be something more scalable than, than, than the, the brick and mortar. The difficulty you're going to have online is acquisition. Because right now, when you're local, you're very spoiled. And I don't say that as a slight, I just say like, there's such embedded trust when you're down the street from somebody. Like, you don't need to have multiple indoctrination sequences, you know, huge brand, lots of content, you know, video sales letters. They have to go out to convince people. That's if you're selling, you know, straight to consumer. If you're selling to the enterprise client, then it's going to be more outreach, multiple touchpoints, et cetera. I would say that the more valuable business for sure is the, can I get the enterprise? Can I get all these teams to buy a journal and then have a subscription as a team?

• 18:35Alex Hormozi?

  And then that you facilitate training the team, one to many, that they have to, they have mandated kind of curriculum they have to attend. So I kind of like study all, I think that model works and scales. The question that you have to deal with right now is the bridge, right? Of how do I go from where I'm at now to where I'm trying to go?

• 18:50Speaker 01

  Yeah, because I'm deep in the brick and mortar.

• 18:53Alex Hormozi?

  Yeah.

• 18:53Speaker 01

  Investment wise.

• 18:54Alex Hormozi?

  Yeah. Well, what do you mean investment? What do you mean, like you put money into the location?

• 18:58Speaker 01

  Yeah.

• 18:58Alex Hormozi?

  Yeah.

• 18:59Speaker 01

  Yeah.

• 18:59Alex Hormozi?

  So besides the delivery, when you were making four times as much money, what were you, what were you doing for promotion?

• 19:06Speaker 01

  Um, Instagram. So I have a pretty decent Instagram following.

• 19:13Alex Hormozi?

  Yep.

• 19:14Speaker 01

  And so I'm just telling, so here's, here's the challenge. Right now in youth athletics, mindset isn't a standard. Basic conditioning is a standard, skill training is a standard, mindset is not, but it needs to be. So I'm going in and educating and telling people that based on my experience as a former, because I'm a volunteer player, you should be doing this.

• 19:32Alex Hormozi?

  Okay.

• 19:33Speaker 01

  So as I educate, it brings in a ton of leads, ton. So all my leads come from Instagram. I bring them into the studio.

• 19:40Alex Hormozi?

  What percentage are not local?

• 19:43Speaker 01

  Um, none. They're all, they're all local.

• 19:46Alex Hormozi?

  Interesting.

• 19:46Speaker 01

  Oh, what was it like a twenty mile?

• 19:48Alex Hormozi?

  Yeah, but on Instagram that it's local is very interesting. This is tough. So you have a business that's based on you and then you quickly put other people in place who are not as good as you to do this curriculum and instead doing, killed your cash flow, which makes it difficult to do anything, right? So I would prefer we look at the calendar. If I transported my brain into your body and I had to take over the wheel today, I would be saying, okay, I did forty thousand a month when I was killing myself. I would like to do twenty thousand dollars a month, except I'll raise my price. Because if you have more demand than you can handle, then price is a lever. So I'd raise my price and I'd cut my time in half. And then with the excess time, I would spend my excess time and excess cash, because now I don't have any other people,

• 20:32Alex Hormozi?

  to start developing out the digital thing. So basically you have to put a cap on your time, because your, your purpose was saying, I'm not gonna, I'm not gonna take all the money that's on the table right now, so that I can build this other thing. And so like if you really wanted to take the real hypothetical extreme, you could cut three quarters of the time you were doing before, double your price, make half the money, but you still have seventy-five percent of your time. And so right now I think your pricing lever is the one that you're not using because you said you had oversold demand. And so I think also the fact that you haven't recently been doing the delivery will also still give you artificial bump if you say, hey, I'm coming back in, but only for select clients at a higher price point, you actually have a decent narrative to do that now. The enterprise play with the team signing on and them getting on a very small subscription for many of those people,

• 21:16Alex Hormozi?

  many parents are accustomed to spending that kind of money. I think the whole mindset thing makes sense, all that, all that jazzes. But you still have to get there, right? And so we have to buy you time, we have to make you money. And so raising the price and cut and capping yourself at either twenty-five percent of the time you were at before or fifty percent can get you at least half to maybe you would a hundred percent of the revenue you were at beforehand. And I would have a very strong look internally of like, I know I have these people, but if you don't take care of the business, they're not gonna have a job for a loan anyways. So it's like, we gotta take care of the business. You gotta put the oxygen mask on. We can breathe and buy some space, buy some padding. And then once the enterprise starts kicking off, then of course you can have the trading for them.

• 21:57Alex Hormozi?

  Also, I think that some of the best people we might take would be probably ex-athletes or even some of the older people that are graduating from those teams and offer them internships, the people who like really excelled at it. And then you'll be able to get some free labor or at least discounted labor. That might be solid. Do you like that plan? Okay, good. I'll have this play for us.

• 22:17Alex Hormozi?

  Congratulations on the business.

• 22:21Alex Hormozi?

  All right. Well, have an awesome day and keep us posted. All right. You're on Ramozi Hotline. What's going on?

• 22:28Speaker 01

  Hey, how you doing? Um, my name's Jonathan. I have martial arts schools and we have five. And they do well, but my challenge is always in getting more people to wanna be instructors and then training those people on how to sell.

• 22:46Alex Hormozi?

  Okay.

• 22:47Speaker 01

  And it just seems like it's like a niche within a niche within niche. I'm wondering if maybe there's a better way to go about it.

• 22:54Alex Hormozi?

  Really pointed question, which I want to ask some questions about the premise first off, which is you've got, you've got, you've got these trainers, whatever, instructors. Why do they all need to learn how to sell?

• 23:03Speaker 01

  Well, the model we run, running a high profitability is that basically you have a guy that does it all. Small brick and mortar, 150 to 200 students at a rate average of about $300 a month.

• 23:18Alex Hormozi?

  Great. That's great. Good one.

• 23:20Speaker 01

  You know, we run ads on Meta. We call leads. We sell trials over the phone. They come in. We do a tour and orientation and invite them to enroll and save money by going on the first day if it's a good fit.

• 23:30Alex Hormozi?

  Yeah.

• 23:31Speaker 01

  And getting guys that are really good on the floor to be really good at sales, sometimes is a challenge.

• 23:37Alex Hormozi?

  Yeah. Yeah. I mean, you have identified the, the difficulty of the model.

• 23:43Alex Hormozi?

  So, you know, it's one of those, it's more of a feature, not a bug type setup. So it's one of these, like, there's a lot of different businesses where like, okay, well, you know, selling cleaning is really easy. It's like finding people to clean is really hard. So it's the kind of one of those that you gotta pick, like, every business has shit, right? And this is the one that you've got. Now, I'll tell you this. What's your churn right now?

• 24:01Speaker 01

  I don't know. I'll talk my head.

• 24:03Alex Hormozi?

  I'm guessing it's decent, but it's. Okay, okay. So what are you compensating instructors?

• 24:11Speaker 01

  They get a percentage of gross revenue.

• 24:13Alex Hormozi?

  Oh, revenue. Okay, what is their OT or on target earnings? What do they make per year?

• 24:19Speaker 01

  Depends on the location, anywhere from forty to almost two hundred.

• 24:24Alex Hormozi?

  Oh, wow. It's a big range. Okay. Yeah, big range. Okay, so the entire issue you have is you need to find someone local who knows martial arts who can sell.

• 24:34Speaker 01

  Right.

• 24:34Alex Hormozi?

  Okay, so I guess the reverse question is, is it easier for you to teach somebody who has martial arts how to sell? Or easier to find somebody who can sell to teach martial arts?

• 24:43Speaker 01

  Then there's the challenge I wrestle with all the time because, you know, people that are good at selling.

• 24:52Alex Hormozi?

  They're not martial artists.

• 24:54Speaker 01

  They're not martial artists, or if they are, the problem is it takes so darn long to get good. You know, like most of our instructors are at least second degree black belts. We're looking at a five year training.

• 25:05Alex Hormozi?

  Yeah, so then it sounds like the reverse is the, now that's if you require a second degree black belt to be the good guy, right? I would imagine that, like, for me, teaching this sale, I don't think should take longer than, like, a day or two.

• 25:19Speaker 01

  What do you mean?

• 25:21Alex Hormozi?

  Like, this is not a hard sell. Like, this is not a good one. Like, you're not selling, you know, intangible consulting services for $250,000. You're selling a membership to a martial artist. So this should be like a six question script. That you just have to tell them, when do you raise your voice and when do you shut up? And so my guess right now is that the deficiency that you have as an entrepreneur is that you are not good at teaching sales.

• 25:44Speaker 01

  Well, guys, we have a really good is how I recruit more of them.

• 25:47Alex Hormozi?

  So do you just need to?

• 25:48Speaker 01

  It's such a small pool.

• 25:49Alex Hormozi?

  Okay, so then said differently, do you just need to be able to find, so if we, okay, so I'm taking, taking this argument. If we think that if you're good at teaching sales, let's just take that position. Then it's not trying to find martial arts people who can sell. You just need to find martial arts people.

• 26:04Speaker 01

  Yes.

• 26:05Alex Hormozi?

  Okay, great. We're getting narrow on the issue. So how big is the, uh, the city that you're in?

• 26:12Alex Hormozi?

  Greater Sacramento area, about two million. If you were like rural Kentucky, I'd be like, you know, that would be, I can see that might be a, you know, be an issue. But no, I mean, how many martial arts groups are there in Sacramento? Are there any students that you can promote? You've got 1,500 students or, you know, you're 300 toes five or close to that. It's like, there's not one who would just be willing to make a hundred thousand dollars a year and quit their job and do cry all day. I mean, they mean it as a slight, but I'm saying like, yeah, they wouldn't do martial arts all day. Yeah. Be more aggressive in recruiting people. Yeah, it's the constraint of the business. Anything that you're doing that's not recruiting is you not pursuing businesses growth. If that's the limit of the business, if that's the constraint, then every day I'm waking up and before, you know, before noon, I've reached out to a hundred people about whether they know somebody or they are the person who is a really good martial arts

• 26:57Alex Hormozi?

  that either lives here or is willing to move here.

• 27:01Alex Hormozi?

  Like you can also offer something like a signing bonus for $5,000. Like there's, there's things you can do if you want to incentivize people, but I, I get the impression right now. It's like, how do you solicit it? The whole thousand person plus base that you have, number one. Two, had you emailed your entire email list from historic. So I'm sure you have a bunch more leads that never came in, probably been running ads for a while. Ask them if they would like to be an instructor. Number three, ask them if they know anybody you would like to be instructor. Number four, I would go at, you know, like the Sacramento, you know, martial arts community. And I would ask them, I would go to the tournaments and the meets and find people at that. Like this is so solvable. What stops them from doing that? Okay, great.

• 27:39Alex Hormozi?

  Well, we got, we got narrow on it because I think you, you had a narrative around like drilling, trying to find martial arts people itself. It's like, okay, well, are you bad at teaching sales? Like, no, I'm good at teaching sales. Okay. So we just have to find martial arts people. Okay, great. Let's go find some martial arts people. Yeah, okay. Yep. No, you bet, you bet. Congratulations on the, on the business. Yes, sir. Talks it. Hello, caller number five, four. What's going on? It's Alex.

• 28:04Speaker 01

  Hey, I'm Mike Diddy, he's the founder of Best Along Care.

• 28:06Alex Hormozi?

  Mike, what's up, man? How's it go?

• 28:09Speaker 01

  Good, good. Last month, it is 1.1 million in revenue. It cost us two or three different departments. So 50% of it comes from. Franchise, twenty percent from the media side of things and thirty percent from co-plant serum, which is like software.

• 28:24Alex Hormozi?

  Twenty percent software, what was the thirty?

• 28:26Speaker 01

  Fifty percent from the franchise.

• 28:27Alex Hormozi?

  Yeah.

• 28:28Speaker 01

  Twenty percent from the media side of things and thirty percent from co-plant serum, which is the software.

• 28:33Alex Hormozi?

  Okay.

• 28:35Speaker 01

  And so we have a hundred ninety-one locations on the franchise side now in US and Australia, about a hundred eighty in operations now.

• 28:42Alex Hormozi?

  Okay, a hundred eighty open, got it, okay.

• 28:44Speaker 01

  Systems failed to program seventy to eighty million in twenty twenty-five.

• 28:48Alex Hormozi?

  Okay.

• 28:49Speaker 01

  And so I came to the family work up last year, so with you and you said really focus on your economics, so.

• 28:55Alex Hormozi?

  Yeah.

• 28:55Speaker 01

  Dr. Cash and I work with five different ways to solve the off-season for the franchisees.

• 29:00Alex Hormozi?

  Yeah.

• 29:00Speaker 01

  And the goal is a thousand locations and they go public in six to eight years.

• 29:04Alex Hormozi?

  Okay.

• 29:05Speaker 01

  Right now, my constraint is that a hundred percent are, I guess my question is, a hundred percent of our franchise leads come from our organic social media content on YouTube. And about two hundred twenty-five thousand subs. So my question is, do you have to focus more and better on the content side? Or just start a second marketing channel or acquisition channel, data ads, outbound calls, et cetera, just because we want to increase this deal between our selling locations, we really haven't been pushing it up until now.

• 29:34Alex Hormozi?

  Hmm. Well, I'll first say that this is a many ways up the mountain type problem, so I want to be clear that like either will work. So just like upfront, so that way you look back and think like, oh, I should have done the other way, like, well, this will work. Like, if you just say, I'm going to spend up outbound, you've looked like you have the resources to do it. So that will be fine. If you wanted to say, like, you know, I'm going to double down on content and make more better content, that will work too, because it's not like you're, you know, it's not like you've tapped YouTube. You don't even in terms of the cut that you have. Are the people that are coming in existing long here guys that are flipping? Or are they people who want you starting a little care business?

• 30:06Speaker 01

  The vast majority are converting about to have seventy.

• 30:09Alex Hormozi?

  No, I think it's better. I think it's better. That's good. Okay. So you want to grow faster. How many units a month are you selling?

• 30:14Speaker 01

  Right now, we average forty to fifty units every year, basically, since we started.

• 30:19Alex Hormozi?

  So what a week?

• 30:20Speaker 01

  Approximately.

• 30:21Alex Hormozi?

  Okay. So you saw one a week and have you changed your cadence on content or what you make?

• 30:26Speaker 01

  Uh, in the past year and a half, we basically are weekly and then shorts are more frequently across all platforms, but. They're like turnaround shows, like travel out as a full production team. You want to like run out of business, it's all home services.

• 30:40Alex Hormozi?

  There's a lot of different plays here. So it's like, you could just run ads and just retarget all the people that are near just the audience. That would probably be the lowest lift. It's like, what's going to be the thing that's going to get you to where you're trying to go the fastest? It would be that. If we imagine your audience as a triangle, you basically have persisted at making money by letting people kind of float to the top of that, that little peak, and then some of these people convert, right? And then you have a huge amount of people underneath that are just kind of consuming free stuff. Now, you can either move the line down and convert a higher percentage of the audience, which you would do via ads, or we extend the size of the pyramid overall so that the percentage of people who convert then becomes a larger slice.

• 31:18Alex Hormozi?

  Both of them work. And so then the question is, okay, which do you have more skills that you can do in a shorter time period? So given you're just doing resources.

• 31:28Speaker 01

  I would say I'm better at the content than to be on paid ads.

• 31:32Alex Hormozi?

  Okay.

• 31:32Speaker 01

  Right now.

• 31:33Alex Hormozi?

  Well, then I would say if you haven't really changed much about your K Dad strategy in the last eighteen, sorry, excuse me, your, your content strategy the last eighteen months, that's where I would double down on. And I wouldn't double down on it. I'd be like, how do I five X down on it?

• 31:45Speaker 01

  Yeah.

• 31:46Alex Hormozi?

  You know what I mean? Like, so how many pieces are you putting out a week right now?

• 31:49Speaker 01

  One long form a week on YouTube. It's like the show.

• 31:52Alex Hormozi?

  Yeah.

• 31:53Speaker 01

  Every day is a shorts.

• 31:55Alex Hormozi?

  Yeah. And you're only doing that on YouTube?

• 31:58Speaker 01

  Facebook, the other platform too, Facebook, Instagram.

• 32:00Alex Hormozi?

  And that's for shorts?

• 32:01Speaker 01

  Those are smaller platforms. They say they can get a hundred thousand dollars on those platforms. YouTube is where everyone says they hear from about me.

• 32:08Alex Hormozi?

  So I'll give you a little tiny little tactic that, that we've seen work well is one is, is your CTA just in the description?

• 32:13Speaker 01

  Yeah, we really don't do much CTAs, but maybe sometimes one over a third on the videos.

• 32:19Alex Hormozi?

  Yeah.

• 32:19Speaker 01

  But really not much of a CTA.

• 32:21Alex Hormozi?

  Okay. So thing number one is I would put the CTAs within every video. There's five different ones. So you can put CTA in the description, CTA thirty percent mark of the video. You run your own kind of internal ad. The next is your actual profile. I would put it there. The fourth would be pinned comment on every video. And then number five would be YouTube community posts. Are you using those?

• 32:41Speaker 01

  Yeah, right now daily. About paving, yeah.

• 32:44Alex Hormozi?

  The, the community bus?

• 32:46Speaker 01

  Right. I'm just not gonna need to need to, that's probably where I'm lacking.

• 32:49Alex Hormozi?

  Yes.

• 32:50Speaker 01

  I'm kind of used to trying to like everything free, but yeah, I'm trying to be too promotional, but.

• 32:54Alex Hormozi?

  Well, you could, so it's a, it's a great point. So I kind of see these as kind of persistent. It's like a, it's like an email sign off. If you give away stuff for free in exchange for email, I still see that as free. I don't see that as like a bad thing.

• 33:08Speaker 01

  Okay. Yeah. We, we do that. And I have about fifty thousand that we can email.

• 33:13Alex Hormozi?

  Okay. Are you emailing regularly right now?

• 33:15Speaker 01

  Few newsletters and then on Friday, when we release the show, we send out basically a summary of that.

• 33:20Alex Hormozi?

  Do any of those three emails per week have any call to actions in them?

• 33:24Speaker 01

  Sometimes, yes, I've been moving away from it actually to get, um, just focusing on like the open rate, but, um.

• 33:31Alex Hormozi?

  I don't think you having a CTA is going to affect the open rate. This is how I delineate this because I think your instincts are good. It's just an execution thing. So I, so like for example, are you on Mozi Minute by any chance? My email? Yeah. So like, I don't, I don't think that those emails are super right now. I think it's like, here's a tactic that you can use today to make more money in this business. By the way, you can go check out our thing, which is I only have one line that's a CTA. And then the entire rest of the email is here's stuff you can use. I think that use, I mean, I use that strategy for a reason because I like it and it's not, it's just like when someone is ready, they can raise their hand and I make it easy and quick for them to do it. When someone is not ready, they just can skip past it. No big deal. There's two ways that I've seen work really well. One is the way that I do.

• 34:13Alex Hormozi?

  The other way is basically the, uh, the ultra PS, a super signature, if you will, where you underneath of the email have four different, you know, things that someone can do. It's like, hey, if you want more free stuff, go here. If you wanted this, go here. And if you wanted this, go here. I tend to prefer fewer calls to action that are more direct, but that's just me, but also just have one signature. This is PS. Here's my CTA. Right. So I think number one, I would be emailing with CTAs. Number two, I would embed in those five places. Again, I don't think it hurts. If the biggest podcasts in the world can have eight minute long ad reads, you can put a thirty minute, thirty second thing saying, hey, by the way, if you don't know, I own franchises and I sell these things. And so if you want that, you can go here. Otherwise, enjoy the show. Like that to me is not. I don't think people are like, screw this guy. You know what I mean?

• 34:56Alex Hormozi?

  Those are the two of like moving the line down in terms of converting a high percentage. The other is still basically, I'll bet you that you have to spend more time than you currently are in pre-production for the content to grow. Like, I don't think it's, oh, let's go from one video a week to five videos a week. It's how do we make that one video? Like, if you had to spend five times the time on that video, could you get it to perform better? And I, I mean, being real, like, the biggest belief breaker that I've had with content is that when I saw the guys who are the true, the best in the world, 20 million plus subscribers on YouTube. And I asked them to kind of look at my stuff. They said, oh, well, send me your pre-production notes. And I was like, what do you mean? And they were like, the pre-production notes? And I was like, I kind of just like have a couple of stories and I turned the camera on. They're like, yeah, well, that's why you don't have 21 subscribers. I was like, well, that, that tracks.

• 35:41Alex Hormozi?

  And so right now, you're putting all this effort into the production of the show, but I would put a ton into like, here's where huge leverage is, is the selection of the people that you're going to go see. Like Howard Bay on camera, huge, right? That's why they do casting for all these shows. Prepping them ahead of time so that it's like tighter, it's faster, it's better. And then looking at the packaging, packaging and headline for that stuff, looking at outliers, see if you model outliers, make sure that the, the hook of the video is going to match the headline and the thumbnails, all that stuff. The question on that, double click on it, cause I do see the constraint of the content as they are casting and then I would keep going to the show. Would you use my CTA? Yeah, sure. More towards that or towards that? Not more, just both, just both. And, yep.

• 36:26Alex Hormozi?

  All right, Mike, appreciate you, man. Thanks, sir. All right, so the hot and the rosy hotline. So if you guys enjoyed that, let me know and I'll do it again. I enjoy, like, I could do these all day. This is like the most fun stuff. You can see how the, like, the level of the business, the change in terms of how we're thinking about it. Like, in the beginning, we're kind of like, double checking the idea of like, does, this is validate the idea of the business? The second one we went through was web hosting. It's like, okay, well, he fundamentally was Miss Price and he wasn't promoting enough. Okay, great, we fixed that one. And then we had Compass. So for her, she had hired too quickly, also was Miss Price. So we had to raise her price, get her back in. And maybe a quarter to half the time to free up time and cash flow, she could pursue the better opportunity, which is the enterprise. And then we obviously had Mike just now, we

• 37:10Alex Hormozi?

  just need to increase demand, right? And so for him, it's like, we need to do more better on the stuff that he's already doing. And the better side is also the conversion aspect. So it's like boom, everyday business. Oh, then we hit martial arts. So it's a black and strange. So it's okay. If you have one point of leverage in the business, so like, Mike needs to just make more content. He just needs to go recruit like crazy. She needs to go and get people back on at a higher price so that she can then book the rest. The other two, I went over already. That's this week's Hermosy Hotline. This is so much more fun. Rock and roll.

• 37:38Alex Hormozi?

  Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Leila and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, HR, you've got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30 ish pages for each of the stages. Once you 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

• 38:21Alex Hormozi?

  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.