Business Scaling Workshop Live Q&A | Ep 809

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

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

• 0:01Speaker 00

  Hey Art.

• 0:01Alex Hormozi?

  Hello.

• 0:02Speaker 00

  My name is Rick and I sell financial planning services to young big tech employees, W2 employees. We do about half a million of revenue. I'd love to be at 5 million within the next, you know, three years or so. And what's currently stopping me is just a time resource management issue where I'm currently doing the, you know, fulfillment of meeting with our clients and I hired a new full-time associate planner to start to take over those relationships. And so I think my current constraint is figuring out how to replicate teams as I continue to grow the business. We're doing relatively, we're just doing organic marketing, content mostly on LinkedIn

• 0:47Speaker 00

  and write a daily blog, which I post to the website and an email list, a small email list.

• 0:52Alex Hormozi?

  How many sales a month did you do?

• 0:53Speaker 00

  About two.

• 0:54Alex Hormozi?

  Two sales a month. And is the model like 1% assets under management?

• 0:58Speaker 00

  No, and that was another question that I wanted to get your thoughts on was one of the big swings that I took about four or five years ago is to change the traditional financial planning model. So instead of charging the 1% AUM fee, we charge a 25 basis point AUM fee and then a monthly subscription, which is 275. So it nets out to be about 5,000 per client per year on an annual basis.

• 1:21Alex Hormozi?

  Hmm, okay.

• 1:23Speaker 00

  And then obviously bigger clients pay more, you know, on the AUM.

• 1:27Alex Hormozi?

  Interesting. Okay, got it. Okay, so typically with your type of business, they're usually demand constrained, not supply constrained. Like managing lots of, lots of people and lots of money usually doesn't actually take too many resources relative to how much they make you. And so I think that the biggest issue is probably just acquisition. So getting two sales a month is probably the big, the big bottleneck. And so I would, so what's the big incentive for someone to get on the phone with you?

• 1:58Speaker 00

  You mean what's in it for them? Like why do they contact us? Uh initiatives to get their financial house in order. We do a lot around uh getting people's financial independence like at by age 50.

• 2:07Alex Hormozi?

  Yeah.

• 2:08Speaker 00

  So we're.

• 2:08Alex Hormozi?

  Retire for with a million dollars.

• 2:10Speaker 00

  Yeah, fire movement, you know.

• 2:11Alex Hormozi?

  Yeah.

• 2:12Speaker 00

  Real well, yeah.

• 2:13Alex Hormozi?

  Um I so you know as as as much as you may hate what I'm about to say, uh there's a reason that all the big dogs do the same exact playbook. Uh which is they run to either virtual or they run to in-person workshops. Uh because in one or two days or even a half day, you can gain a lot more trust than a very long time online. Um and I would probably use that as my lead magnet. Cause that sometimes like for a lot of you guys, like one of the biggest levers you can have like. When we unlock like an EZ 5X, it's usually something at the very front where it's just like we just swap the lead magnet from like, hey, book a call to hey, get this. Thing and then a call just happens to be part of it or a workshop happens to be the vehicle for delivering that outcome.

• 2:55Alex Hormozi?

  And we do that like that's when all of a sudden your lead flow goes from making two sales a month to eight or 10. And I think that for me, that would be the biggest issue. Now you managing. Customers, it's like, I think I think you just need more cash flow, which more customers will help you with. And then you can get an account manager who can kind of like run those relationships, but. Most relationship guys can handle many, many, many customers.

• 3:14Speaker 00

  Yeah.

• 3:14Alex Hormozi?

  Cause people don't, I mean, also the higher up you go, they tend to, in my experience, actually need less.

• 3:19Speaker 00

  Yeah, that is true. We meet with people on a monthly basis, so we're.

• 3:22Alex Hormozi?

  Is that required?

• 3:24Speaker 00

  Uh it is, it's sort of like our our sort of bread and butter. So we're, we do a lot of accountability, a lot of like coaching, a lot of like.

• 3:31Alex Hormozi?

  Is that for them to like save more money and stuff?

• 3:33Speaker 00

  Save more money, save on taxes, tax projections, manage their.

• 3:36Alex Hormozi?

  I think you're, I think you're under undercharging and over, not over delivering, but doing too much.

• 3:41Speaker 00

  Yeah.

• 3:42Alex Hormozi?

  Like meeting every month, that's almost like personal finance coaching more than like wealth management.

• 3:48Speaker 00

  Yeah.

• 3:49Alex Hormozi?

  Cause I feel like those are two different offers. So it's like there's a, there's the Dave Ramsey of like, hey, stop spending money, silly pants. And then there's the like, well, once I have money, what do I do with it? And I feel like you're kind of blending those, but you're not, but you're, but you're doing both services and pricing like one. But like lower, so I think.

• 4:06Speaker 00

  It's been on that one.

• 4:07Alex Hormozi?

  Basically, you're not making enough money per customer to do the work you're doing.

• 4:09Speaker 00

  Okay. Okay.

• 4:12Alex Hormozi?

  Like 12 meetings a year is a lot. Most of the wealth management firms that like come through here, one, maybe.

• 4:19Speaker 00

  Quarterly at most.

• 4:20Alex Hormozi?

  Right. And so like you're doing 12 times the work and billing less. So unless you had a tech-enabled way of making that the model, I would change the pricing.

• 4:34Alex Hormozi?

  Because fundamentally, like you're either the volume player and you have tech built in since day one and the entire model is around cost efficiency, or you're premium. There's really not a lot of room in between. Like best for least, like people, it's a hard time for people to perceive that value. So I just think you're doing way too much.

• 4:53Speaker 00

  Can I say this? One of the reasons why I designed it that way was so that we could fish further upstream than most financial planning firms. So we start to work with people in their early 30s, right? When they're making, you know, a few hundred grand a year. And then, you know, a lot of those relationships that blossom into people, you know, doing big things at Meta, you know, making five million a year, right? Do you think that's a smart play or is that, you know?

• 5:14Alex Hormozi?

  I don't think it's dumb. I think it's, I think you have, you have, you have, you have two elements. You have a personal finance thing and you have an investing thing. And you're getting the people who are younger with the personal finance thing. And they're still not, they don't have enough assets to make their AUM like really worth it.

• 5:30Speaker 00

  Right.

• 5:30Alex Hormozi?

  Right? And so like, I would probably have a more traditional private wealth management model. And if you just find out that you can acquire customers really easily on personal finance much more easily than you can here, but then the ascension is much higher, then like that's a great model. Like I think that's a really interesting play. But I think trying to combine both of them in terms of both the delivery and the pricing, I think that's where it feels off to me.

• 5:53Speaker 00

  Okay. All right. Interesting. All right. Appreciate it.

• 5:55Alex Hormozi?

  So I just blew your shit up. So I apologize.

• 5:59Alex Hormozi?

  We have a whole year, so you're good.

• 6:04Speaker 02

  How you doing? My name's Luke Devens. I sell pressure washing, gutter cleaning to homeowners. I did 810,000 last year.

• 6:12Alex Hormozi?

  Mm-hmm.

• 6:13Speaker 02

  This coming year, I want to do 1.5, then the following 3.

• 6:16Alex Hormozi?

  Mm-hmm.

• 6:16Speaker 02

  So, we're kinda, throughout this, we switched to the subscription model.

• 6:21Alex Hormozi?

  Mm-hmm.

• 6:21Speaker 02

  That's what everyone's been suggesting. So, how do now I get into neighborhoods or allocate resources? Because a lot of people are saying, "Just do one channel." But then, we do a lot of like, door hangers, yard signs. And I feel like that all kinda like goes into one with like, ads. Like, how would you kinda rush neighborhoods and home service?

• 6:44Alex Hormozi?

  So, can you restate the question?

• 6:48Speaker 02

  Yeah, like, how would you spend your marketing money if you want to get as many on this yearly subscription?

• 6:54Alex Hormozi?

  Currently, how are you acquiring customers?

• 6:56Speaker 02

  Just old-school yard signs, door hangers, referrals, stuff like that.

• 7:01Alex Hormozi?

  What stops you from doing 10 times more of that?

• 7:05Speaker 02

  Probably just people.

• 7:06Alex Hormozi?

  Okay, so then people be-

• 7:07Speaker 02

  Because I do a lot of it myself.

• 7:08Alex Hormozi?

  Okay, got it. So then, so what's the return? What's the, do you know what your LTV to CAC is on?

• 7:16Speaker 02

  It's right at 10.

• 7:18Alex Hormozi?

  10, and that's with your time being free?

• 7:20Speaker 02

  Yeah.

• 7:21Alex Hormozi?

  Okay, so if you paid someone full-time to do that, do you know how much that would impact your ROAS?

• 7:31Speaker 02

  Someone would probably be about 50, 60 grand, like a sales guy.

• 7:35Alex Hormozi?

  Okay, so wait, are you, you're knocking on doors and getting the business?

• 7:38Speaker 02

  Yeah.

• 7:39Alex Hormozi?

  Got it. And then you, and then the truck follows you and then like, does the work or whatever? Got it.

• 7:46Alex Hormozi?

  You'll have, so I think in the beginning, you'll have to keep stacking the subscriptions so that you can generate the cash flow, because then you'll have the, basically, the for-sure business. And then, once that starts stacking, then you'll have the cash flow to hire the other sales guy, who's going to be able to take over your role. Thing is, most door-to-door guys need to make like, decent money, because it's terrible.

• 8:05Speaker 02

  Yeah.

• 8:08Alex Hormozi?

  Like you'll probably need to be like, they'll probably need to make like, I mean, a decent, I mean, how many sales a day can you make?

• 8:15Speaker 02

  Um, anywhere from like eight to 10.

• 8:16Alex Hormozi?

  Okay, okay, yeah, so I think, I mean, one of those guys could, if you can pay them shoot 50, 100 bucks a sale, they can make a thousand bucks a day. I think you'd be able to get somebody to be able to do that for you.

• 8:27Speaker 02

  Would you like sprinkle in some type of like Facebook or Instagram or Google or like?

• 8:33Alex Hormozi?

  I just don't want to add complexity because like right now you have limited resources inside, right? You just like do more of that thing rather than be like, oh, on top of that, now I have to start calling leads and have to like create a whole like, like the online world and then working those leads is a whole different monster versus like, you're right here, you say yes, I call truck, we clean shit, I get money, like.

• 8:51Speaker 02

  Yeah.

• 8:53Alex Hormozi?

  It's good business, right?

• 8:54Speaker 02

  Just keep it easy.

• 8:55Alex Hormozi?

  Yeah, I would rather you keep it easy. Long-term, like, once you have, like, if you were like, hey, I've got, you know, 15 trucks for the city or whatever, and I've got 15 teams that are out doing it, then I'd be like, yeah, I think having a, you know, a canvassed, you know, top of funnel kind of awareness stuff that generates leads and a centralized phone team that can then also proactively send trucks out to people that you already sold over the phone, I think that makes sense. But given the fact you already know the script, you don't know the process, I'd rather you just stack some of the recurring so you have the cash to bring the new guy in. That being said, if you get a little bit more generous on the commissions, you could probably get someone to pay work commission only, so then you wouldn't have to take the risk on it.

• 9:29Speaker 02

  Okay.

• 9:29Alex Hormozi?

  So, I revise my original answer, do that.

• 9:35Speaker 02

  Thank you.

• 9:37Alex Hormozi?

  Yes, sir.

• 9:38Speaker 03

  How you doing? Um, Cartic Field, we sell tax and financial services to high-income entrepreneurs. We give about $9 million revenue. I would like to be at $25 million by the end of this year. What's stopping us? So, I know what the constraint is, people, we need more advisors to service our clients, we need a faster onboarding process to do more five-day virtual events. I got that. I don't think it takes the whole company to fix that constraint, I think it's HR, CSM's, operations. Is it okay to have the rest of the company focus on a different constraint or would that like KLT morale or how do you balance constraints across basic trace costs of departments?

• 10:15Alex Hormozi?

  That's a really good question.

• 10:21Alex Hormozi?

  I've gone back and forth on this, so maybe there isn't a right answer. But I would say that in the season that I'm currently in, I believe that there is one constraint, and if we solve that constraint, the business will grow. And so I want everybody to know that this is what we're working on. And what ends up happening is that you see the other fires that are burning, and then that actually creates more urgency to fix the first one. When you try and fix them in parallel, it ends up taking longer to do both than to do one and then the other, because the whole team knows. It's like, but there's this other fire burning, and you're like, right, then fix the fucking first one. And so then it just orients the whole team, right? And then also, that means that like, if something has to happen, the whole team is greasing the, you know, the tracks to make sure that this objective gets put forward, even because there's so many supporting and ancillary things to get some big thing done, that if

• 11:06Alex Hormozi?

  they're like, well, we have our priority, it's like, I think that's what gets in the way.

• 11:10Speaker 03

  That's what we see, he's like, well, sales has this priority, but our reason is that this is not a priority for us right now.

• 11:14Alex Hormozi?

  So we call it the silent six, which is basically like, every business has their priorities for the year, or whatever. The silent six one is that we have, we have to keep selling, we have to keep doing business, right? So those things always have to continue, but like, what is the one thing that matters most? Like, I think it's Jack Slutman, he has a, he has a good book on this. But I'll give you the tale, the R of the book is that he was a big believer, or is a big believer, in not having three objectives or five objectives, but just one. He said, basically, if you can't get clear that one thing is more important than everything, then that's your fault as an entrepreneur. And so I see like, if we're the chief allocators of resources, then it means we have to be able to prioritize, and if we can't do it, how can we expect our teams to? Which means we have to be able to say, this is more important than that, and yes, they

• 11:58Alex Hormozi?

  are both important, but this one is more important. And I think that that kind of betting perspective has served me really well, being very violent with like, this is the most important, and I've just noticed that things get done way faster, because then it's like, hey, when we do this, then we can do this next thing. And then everybody wants to do the next thing, too. And then when we do the next thing, all, we move, we know, we part the Cs to get that done.

• 12:18Speaker 03

  Thank you.

• 12:19Alex Hormozi?

  Yeah. It also, in, in service of what I was talking about earlier, when you have that perspective, it also minimizes all the other changes that you're making across the company, too. Because you're like, that's not a priority. Could we improve this thing? Probably. Do we need to right now? No. It's not the constraint.

• 12:36Speaker 04

  Hi.

• 12:37Alex Hormozi?

  Hello.

• 12:38Speaker 04

  I'm Ashley Stahl. My agency is Wise Whisperer.

• 12:40Alex Hormozi?

  Wise Whisperer.

• 12:41Speaker 04

  Wise Whisperer.

• 12:42Alex Hormozi?

  Okay.

• 12:43Speaker 04

  We write and we book TED Talks for people, specifically entrepreneurs. We talked yesterday. We did 1.3 last year, and we actually think and want to do 10 next year, just because of ads and the infrastructure we've built.

• 12:56Alex Hormozi?

  Okay.

• 12:57Speaker 04

  And it seems actually quite feasible just based on it. But I was talking a lot to Jacob about closing and getting good closers that's stopping me. But beneath that, I started thinking about the contract. And everybody wants to feel like we're guaranteeing them their TED Talk, and we have 100% success. But because we existed during COVID and our average time to book went from 10 months to 20 months to get somebody their talk, I feel scared to offer a guarantee when I'm not TED.

• 13:25Alex Hormozi?

  Yeah.

• 13:25Speaker 04

  And so I just want to show my track record.

• 13:27Alex Hormozi?

  Are they TED or TEDx's?

• 13:28Speaker 04

  TEDx.

• 13:29Alex Hormozi?

  Okay, got it.

• 13:30Speaker 04

  Yeah. So any insight on guarantees?

• 13:33Alex Hormozi?

  Yeah, this is a math problem.

• 13:34Speaker 04

  Yeah.

• 13:35Alex Hormozi?

  So I'll tell you a story that applied to a home services business not that long ago. So he was really scared to raise prices, but he wasn't making any money, and he was closing 80%. So I was like, hey, man, please raise prices. And so he decided to raise prices. But to get him to raise prices, I said, so here's the deal. How many times? I said, what are the biggest concerns of a customer? He said, well, it's on time and on budget. I was like, all right, how many times are you on time and on budget? He said, eight out of 10. I said, what happens the other two times? He said, one time, they'll change what their requirements are. They'll say they actually want their kitchen to be twice as big or whatever. I said, okay. He said, the other time, I will get materials in time. And I can't control that. I said, all right. So what if? We write the guarantee. So it's, you're going to raise your price by 20%, which is what we did.

• 14:20Alex Hormozi?

  I said, and if you don't deliver on time, you're going to give the client the entirety of your profit, right? Which right now is you make no money anyways. So like, we can say that. So it's like, if I don't deliver on time and on budget, I will give you all my profit, which is 20% of this deal off. So that's why, so that's the guarantee.

• 14:39Alex Hormozi?

  By switching to that, he closed way more people and made way more money. And so the fear around guarantee, I think, is justified. But if you just look at the math and you're like, oh, I can close twice as many people and I have to give one out of 10 back, you made way more money. So I think just do the math on it.

• 14:54Speaker 04

  Yeah, I think it's just fear, like fear of being on the hook if there's like another pandemic and I have like 400 TED Talks breathing.

• 15:00Alex Hormozi?

  Yeah. Well, you already went through a pandemic. So you already know what you do.

• 15:03Speaker 04

  Yeah, and with your gym numbers, I have no excuse. Okay, thank you so much.

• 15:06Alex Hormozi?

  You bet.

• 15:07Speaker 05

  Hello, Alex.

• 15:08Alex Hormozi?

  Yeah.

• 15:09Speaker 05

  My name's Nick Page. So I own a fitness studio.

• 15:13Alex Hormozi?

  Cool.

• 15:14Speaker 05

  We just surpassed a million in revenue.

• 15:15Alex Hormozi?

  Congrats.

• 15:16Speaker 05

  And thank you.

• 15:17Alex Hormozi?

  Personal training or semis or group?

• 15:19Speaker 05

  Life group.

• 15:20Alex Hormozi?

  Oh, true, okay.

• 15:21Speaker 05

  So if I'm being honest, I would like to be at 50 million. So honestly, what I think's stopping me is looking at my business just like-

• 15:31Alex Hormozi?

  Need 49 more gyms.

• 15:32Speaker 05

  Yeah. Exactly. So, and I honestly don't, this is like something that, I don't know if it's a belief, right?

• 15:39Alex Hormozi?

  Yeah.

• 15:40Speaker 05

  Looking at my business as an investor.

• 15:42Alex Hormozi?

  Sure.

• 15:43Speaker 05

  My LTV to CAC is, I mean, two to one, I mean, we can get it to three to one. Looking at the market and realizing that the fitness studio space is becoming a red market.

• 15:55Alex Hormozi?

  It's very tough.

• 15:56Speaker 05

  I don't know if I personally think it's a smart investment in my time to try to continue to grow my gym.

• 16:03Alex Hormozi?

  Mm-hmm.

• 16:04Speaker 05

  Or profitable, I have a great team.

• 16:05Alex Hormozi?

  Mm-hmm.

• 16:06Speaker 05

  And I'm like, maybe I'll just sell it in one to two years.

• 16:09Alex Hormozi?

  Mm-hmm.

• 16:10Speaker 05

  And then I'm like, so like I just read the book, How to Make a Couple Billion by Brad Jacobs. And he talks about getting, you know, ahead of the trend, which I think you've done a great job of. So when I like read that, think like an investor, and then I look at my business, I'm just like-

• 16:29Alex Hormozi?

  This ain't it?

• 16:31Speaker 05

  Yeah. I'm kind of at this point where I'm like, and people are like, this is great, why don't you scale? I'm like, you don't fucking understand it, so.

• 16:39Alex Hormozi?

  I get it.

• 16:40Speaker 05

  So I guess like-

• 16:41Alex Hormozi?

  He's like, this sucks.

• 16:42Speaker 05

  Everything's great, but it's like, gym sucks now. So, I mean-

• 16:49Speaker 05

  What do you think I should do? Like if you were me, like?

• 16:52Alex Hormozi?

  If you want to make fifty million dollars, the likely that you get it there from a large group studio is very low. So if that's the goal, then you probably want to have a different vehicle. And so you can, I would say that if I was in your position, you have one of two paths. There's like a really close adjacent path, which would be like, I do believe that the best fitness model right now is the small, uh, small group.

• 17:11Speaker 05

  Yeah.

• 17:12Alex Hormozi?

  I think it's the best model that's on the market right now. Um, and so you could change your existing model to that. And that one gets exceptional returns on capital and is a very operationally easy model to run.

• 17:22Speaker 05

  Yeah.

• 17:24Alex Hormozi?

  And so that would be like, the reason I'm, I kind of like that for you is because it already borrows from a huge amount of your existing skill set and knowledge base. And that is a good vehicle. So that's option one. Option two is you just, you know, try something brand new, which I have very little like insight into like, what of unlimited opportunities could you pursue? All of them or one of them, but uh, transforming what you have into, I mean, fundamentally, I think that's why you were here, or at least I would be if I were you. Is like, how do I make this, how do I turn the thing that I have into the thing that I want? And I think that you can do it with a lot fewer steps than you expect. You'll probably have, you know, six months where there's a little bit of turbulence of like people being upset because you changed the rules of the game on them.

• 18:07Alex Hormozi?

  But unless the facility that you have right now like precludes you in some way from, you know, delivering that other model.

• 18:14Speaker 05

  Yeah.

• 18:14Alex Hormozi?

  I would say that that's probably a very, the lowest risk, highest likelihood path.

• 18:20Speaker 05

  Yeah. Okay.

• 18:23Speaker 05

  Yeah, cause my head just goes everywhere. I'm like, another.

• 18:27Alex Hormozi?

  Let me, let me give you something.

• 18:30Alex Hormozi?

  This is the first year in my entire life where I haven't had FOMO. I haven't had it. It's really weird. And I noticed, I noticed that I didn't have it only at the end of the year. And I was like, oh, wow. That's weird. And I think it's because I finally have realized how fucking hard it is to do anything. And when I see some, when I see someone who's like crushing it, like a friend of mine made fifty million in crypto this year. And it's not his main business. It's a side hustle. And I was just like, okay, noted. And so, and so then I thought to myself, I was just like, good for him.

• 19:01Alex Hormozi?

  I was like, I'm not going to get into it. Like, that's not my game. You know what I mean? But he's like, dude, the school deal is fucking monster. And I was like, I know it's awesome, but that's the game I know. You know what I mean? And so, um, it's not even the comparisons to the thief of joy thing. Um, I think it's just that.

• 19:17Alex Hormozi?

  Learning to play a game really well takes a really long time and accepting that like one of the saddest things about life for me has been that like I'm only gonna have like maybe three or four more entrepreneurial seasons in me and that's really sad because it means I only have three or four more big swings and it's like shoot I have all of these things that I want to do in my life but I only get to pick three or four more. Maybe, maybe, right? And so I think that just getting comfortable with the idea like there will always be people who make more and even if you are Paul Getty and become the richest man in the world, everyone will forget anyways. And so like just context, right? Yeah. That there's nothing wrong with taking, having six months where you, you know, reconfigure what you're doing to then say this is what I'm gonna do for the next five or 10 and then you're set for life. And then you can do whatever you want. Sure. Thanks.

• 20:02Alex Hormozi?

  You're welcome.

• 20:04Speaker 06

  How you doing Alex?

• 20:06Alex Hormozi?

  Good.

• 20:07Speaker 06

  Name is Josh Hadley. We sell on Amazon e-commerce.

• 20:11Alex Hormozi?

  Yep.

• 20:12Speaker 06

  We talked last night. Primarily stationary products, so calendars, planners, educational posters. We did 12.5 million last year. Like to be at 50 million and even get to 100 million. That's kind of the trajectory. I look at the, you know, what you, your preamble earlier, right? Sell, you know, go to increase your number of customers.

• 20:31Alex Hormozi?

  Yeah.

• 20:32Speaker 06

  Do more of what's been working for you and I have a podcast in the e-commerce space. Ideally want to be like you when I grow up, but in the e-commerce space.

• 20:39Alex Hormozi?

  I want to be like you, so all good.

• 20:41Speaker 06

  But with that being said, I, our number one priority for growth has always been find more products, opportunities on Amazon, launch those products, right? That's been our biggest growth lever.

• 20:53Alex Hormozi?

  How many SKUs do you have?

• 20:54Speaker 06

  1,600. So we've got a lot. So all stationary. My wife designs it all, right?

• 20:59Alex Hormozi?

  All stationary?

• 21:00Speaker 06

  All stationary.

• 21:01Alex Hormozi?

  So I'm sure I've bought something from you.

• 21:03Speaker 06

  Probably.

• 21:04Alex Hormozi?

  Probably own that whole category. Okay, yeah, keep going.

• 21:06Speaker 06

  So we've looked at, you know, and Amazon's a cruel mistress in terms of decreasing profit margins, right? They're increasing fees and I see like the, over the next decade, you look at Amazon, you're gonna be happy with single-digit profit margins. It just becomes so competitive. So with that being said, we've got on to TikTok Shop, right? We've had some success there. Took 10% of our sales this year already. We've then taken the viral, the videos that go viral on TikTok. We run meta ads on them and we finally cracked Shopify for the first time.

• 21:37Alex Hormozi?

  All right.

• 21:37Speaker 06

  We've got a five row as on that, right? So we're doing that. I also look at wholesale. We briefly mentioned distribution in our conversation yesterday. So as I look at like our number one priority for growth has always been do more of what's worked, which has been launch products to serve whatever crap people are looking for on Amazon.

• 21:55Alex Hormozi?

  Yeah.

• 21:55Speaker 06

  But I also have these things that are boiling up that I'm like, man, I think this can really help things. TikTok actually is supporting all of our Amazon.

• 22:04Alex Hormozi?

  Yeah.

• 22:04Speaker 06

  Increasing organic rankings just because people will search, find, buy it, right?

• 22:07Alex Hormozi?

  Yeah.

• 22:08Speaker 06

  So how do I communicate that to the team? Cause it's like, we still gotta keep doing.

• 22:12Alex Hormozi?

  Yeah. So that's the silent sixth. That's the silent sixth, right? So like, we're going to continue to make the sausage. We're going to continue to do the proven winning strategy. And that's kind of, that's the core. That's the base. We're not going to threaten the base to try and pursue the new thing. But if you do see one of those writing on the walls type situations where you're like, I, my margins are going to compress, et cetera, et cetera. Then it makes sense to make your one big bet of the year. Let's say it's TikTok. And I mean, to be fair, it's not that much more work to just take the same ads and then run them on Shopify. And then that becomes the objective of the year, which I would probably just put into owned, you know, owned customer list is probably how I would just categorize that for the team. I feel like that's it. So what, what was the actual question?

• 22:55Speaker 06

  Yeah. I mean, that, so you, you talked about that, that being like, hey, this is the one thing we're doing, right? Because we've got 25 team members already. They're all serving that one thing, which is finding, launching new products.

• 23:08Alex Hormozi?

  It can be you and a small team.

• 23:10Speaker 06

  Yeah. My follow-up question to this has been, cause I was talking earlier about go hire a director of marketing that can go run this whole TikTok side, all of the Shopify stuff that we want to do. I've been doing a lot of it myself and almost my reluctance to go hire somebody is like, well then what else do I do in the business? You know what I mean? So.

• 23:34Alex Hormozi?

  I'll, I'll make you a promise and I don't make promises often. I promise that if you replace what you were doing, you will find something else to do.

• 23:41Speaker 06

  Well, I know that, well, then I will double down on that because, you know, I've got this other e-commerce thing, like ideally, a decade from now, I'm, I've got to win, and I can go do this exact same thing you're doing, but in the e-commerce space, right?

• 23:54Alex Hormozi?

  Yeah.

• 23:56Speaker 06

  To me, I'm always like, oh, go, go do more speaking on stages, go start building my own personal brands, kind of what I like.

• 24:02Alex Hormozi?

  That wouldn't be my priority. I think get the win. Because like, say differently, take it to the natural logical extreme. So you do lots of staged stuff, and then the main business suffers, and then you don't get the W. Then you're just a, you know, airbag, right? If you, on the flip side, you don't do any speaking, and you get the win, all those doors open tenfold. And so like, what matters more? The win. So get the win.

• 24:29Speaker 06

  Yep. Easy enough?

• 24:32Alex Hormozi?

  I do think that with your audience that you have, you'd be able to very easily headhunt a really savage director of marketing who's already done e-commerce for TikTok Shop or, or Shopify. And I'd probably do it on your podcast. I'd be like, hey, I'm looking for a savage. Like Reed Erna Shackleton's ad, like, looking for men, low chance of survival. Just like, this is a dangerous place to work, and I think you will attract the right people.

• 24:56Speaker 06

  Awesome.

• 24:56Alex Hormozi?

  Yeah, and don't be afraid to pay him a lot.

• 24:58Speaker 06

  Okay, thank you.

• 25:00Alex Hormozi?

  Yes, ma'am.

• 25:02Speaker 07

  Hey, I'm Bree. I'm from Tennessee. My sister's over there.

• 25:07Alex Hormozi?

  Hi, Bree's sister.

• 25:09Speaker 07

  We saw residential construction to middle-aged women who like to spend their husbands' money.

• 25:14Alex Hormozi?

  Love it.

• 25:18Alex Hormozi?

  Got to know your avatar.

• 25:20Speaker 07

  Yeah. We've done 100K in revenue in one year. We would like to get to 3 million, ideally in two years. I think it's pretty realistic and easy in construction. And I think what's stopping us is scaling and potentially niching down. So after these workshops, that's what we feel like is the right thing, and we wanted to get your feedback on potentially niching down to bathrooms. It's a two-week turnaround, and it's a pretty standard.

• 25:49Alex Hormozi?

  Can I already tell you I like it?

• 25:50Speaker 07

  You do. You like it.

• 25:51Alex Hormozi?

  Is it high mar, so it's high margin?

• 25:53Speaker 07

  Yeah, 42%.

• 25:54Alex Hormozi?

  Yeah, and it's fast?

• 25:56Speaker 07

  Two weeks.

• 25:56Alex Hormozi?

  It's easy to sell?

• 25:57Speaker 07

  I think we could get it a little bit lower.

• 25:59Alex Hormozi?

  Yeah. No, I, so with a lot of... It's interesting because like in like app development or software shops, it's actually really, it's just digital construction versus like physical world construction. They have the same issues.

• 26:11Alex Hormozi?

  I don't want to get into it, but yeah, they have the same issues. And so in almost all of those situations, I end up saying like, okay, what aspect of app development? Or what types of apps or what type of development do you do? Or what types of construction do you specialize in or that you have like that you absolutely nail? And usually it's like, it's something like this, like, you know, we crush cabinets or like, we're really good at countertops. We're really good at bathrooms. We're really good at whatever, right? And then zeroing on that, you'd be amazed at how much more responsive your advertising, your advertisements will be, prospects to your advertisements. Because like then you can, you can show before and afters on bathrooms, like it gets much more niched down. And then people are coming in and calling are like, that's what I want. And you're like, cool, let me just take your money and I'll give it to you.

• 26:52Speaker 07

  So do you think like if we're saying no to the larger projects, which is still holding a 42% margin? We can do more of those, but they take longer time. You still think it's a better option to do the quicker thing?

• 27:05Alex Hormozi?

  Well, what do you make on a bathroom?

• 27:07Speaker 07

  So for a custom shower, it might be 10K, it might be $4,200. A full bathroom in Tennessee is probably about 14.

• 27:15Alex Hormozi?

  Okay. How many of those can you, I mean, how many can you fulfill right now at max?

• 27:21Alex Hormozi?

  Five, five a month?

• 27:23Speaker 07

  Our max is five a month.

• 27:25Alex Hormozi?

  Okay. And that's today.

• 27:27Speaker 07

  Double. I think we could fulfill double right now with our crew and then we'd have to build fulfillment. Yeah, that was like a short, I mean, we really just started ramping up the last six months of this.

• 27:38Speaker 07

  That was really more of the last six months.

• 27:40Alex Hormozi?

  I don't, I don't want you to turn off how you get customers because I like, you need to make money. And just for everybody, like when you're, when you're really small and you're starting out, like it's normal to basically accept money from anyone. You're like, you have a pulse and a credit card, like you're for me.

• 27:56Alex Hormozi?

  So, it's normal, but what I would like you to do though, like, you can take those jobs, but in terms of what you're being deliberate about, your advertising, if you start running ads on like Facebook and show some of those images to generate leads and sell, like, I would focus on that. And if you think that that, because like, we should be able to, you should be able to pencil out in five minutes, like, can we make more money from this? If you feel like, your sister feels very, very convicted about this. She's very convicted. Okay. Yeah, so if you can make a lot more money, if you can sell a lot, yeah, a lot more money selling bathrooms, and you can sell way more of them, and the, because then the transaction, the, the deal cycle's shorter, it's, you know, you walk there, you quote, you close, like, it's, it's, it's very straightforward. I like those types of businesses. Appreciate it.

• 28:37Alex Hormozi?

  Yeah, no worries. Keep the money coming, but focus there, and then over time, you're, the coloring of your money will shift, and you'll be at like, 80% will be bathrooms, and then you'll just be like, okay, now we're gonna, there'll be a time where you'll be able to say, we don't need this anymore, just to get the focus. So I just want you to like, shift it over time. Does that make sense? Yeah, thanks. Okay. Yes, sir.

• 28:55Speaker 06

  Hey, Alex, that Kevin with Asset Protection Planners. I set up Asset Protection Trust to people on lawsuits, protect their money.

• 29:02Alex Hormozi?

  Sweet. In lawsuits actively?

• 29:03Speaker 06

  Yeah.

• 29:04Alex Hormozi?

  There you go.

• 29:05Speaker 06

  Or before.

• 29:06Alex Hormozi?

  Yeah.

• 29:07Speaker 06

  And we do 11 million in revenue, and I'd like to be at 25.

• 29:11Alex Hormozi?

  Okay.

• 29:12Speaker 06

  And I think, two things. One, the ad, the paper click costs are through the roof, eating up a lot of the profit. And two, finding people who really can sell and understand legal concepts, both.

• 29:24Alex Hormozi?

  Yeah, super common.

• 29:25Speaker 06

  Yeah.

• 29:29Alex Hormozi?

  Okay, so those are two separate problems.

• 29:31Speaker 06

  Yeah.

• 29:34Alex Hormozi?

  Which one's the bigger problem?

• 29:37Speaker 06

  Currently, it's the ad costs are going through the roof.

• 29:39Alex Hormozi?

  Just PPC?

• 29:40Speaker 06

  Yeah, PPC.

• 29:46Alex Hormozi?

  Well, I mean, if you're bidding for those terms, the only way to win, because it's an auction, is gonna be you increasing LTV, but I'm guessing, I mean, I'm guessing you're selling relatively expensive packages.

• 29:54Speaker 06

  We are, yeah.

• 29:55Alex Hormozi?

  Yeah, so I don't know how much room you have there. So I would probably, if I wanted to solve the acquisition problem, I would probably be looking at another paid ad, you know, way of running ads. So PPC for everyone here, typically, pretty good returns, very consistent. It's really nice because, once you set it, you can kind of forget it, kind of. Well, definitely compared to social ads that are interruption-based, you have to refresh all the time. But I think that may be actually the next thing, though, is that I think you might have to look at interruption-based paid ads rather than inbound intent-based. Because honestly, the only other thing that you could really do is just start going top of funnel more. Because if you, what percentage is people who are in lawsuits versus people who are not in lawsuits?

• 30:39Speaker 06

  About 50/50.

• 30:40Alex Hormozi?

  Okay. Yeah, so then I would imagine that where your growth will come is from the people who are not in lawsuits, because there's way more people there than in lawsuits. PPC is going to be intent, red-hot pain, they're going to come in, they'll buy quickly. Whereas the people who are preventative, obviously, take a little bit more education. That's where it's actually very similar to the finance thing I was saying earlier, where pushing to either virtual or in-person events, giving away lots of information, right? For selling more complex products tends to do really, really well in your space. And so I would probably go social ads to workshop, virtual or in-person, and then sell from there into your, into your stuff. That would probably be my strategy if I, if you wanted to get to 25.

• 31:23Alex Hormozi?

  Because I don't think, I mean, can you, you probably can't increase your spend on PPC that much more anyways.

• 31:28Speaker 06

  Crew, like webinars, things like that.

• 31:30Alex Hormozi?

  Okay, cool. Yeah, so you can do it virtually, or you can do it in-person if you want.

• 31:34Speaker 06

  Cool.

• 31:35Alex Hormozi?

  Because if you do it in-person, where are you out of?

• 31:37Speaker 06

  Florida.

• 31:38Alex Hormozi?

  Florida? Yeah, I mean, you could probably run a 50-mile radius in Florida and do an in-person one, and people still show. So like, that would be, that would be like a, because it's much easier to get people to, it's, it's a very easy funnel for in-person if you're local. Like, it's literally just lead gen, call, schedule, remind the hell out of them. Expect 20, 25% to show up of your leads, 20, call it. And then from there, you'll close a third of the room.

• 32:06Alex Hormozi?

  That's, I mean, that's a very simple model. So I'd probably start there. And then as you kind of like get more familiar with it, get the pitch down, etc., then you can go online and then do the nation. That help?

• 32:16Speaker 06

  Thanks.

• 32:16Alex Hormozi?

  Yeah, you bet.