Building a $1,000,000 Business for a Stranger in 69 Minutes | Ep 905

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.

• 0:00Alex Hormozi?

  This is Philip. He gave up a high-paying job in tech to start a garbage collection business. Last year, he lost $150,000. So Philip has a wife and a kid and another baby on the way. And if he doesn't fix the business model fast, he'll put that growing family at risk.

• 0:13Speaker 01

  Hi, my name is Philip. I'm the owner of Garvey Disposal Services. We do residential trash recycling and yard waste collection. Our revenue is 642,000. Our net profit is negative 151,000.

• 0:26Alex Hormozi?

  That's the wrong side.

• 0:27Speaker 01

  It is on the wrong side.

• 0:28Alex Hormozi?

  All right.

• 0:29Speaker 01

  Our net margins are negative 23%. We've been in business for a little under two years, and we currently serve 2,500 customers.

• 0:36Alex Hormozi?

  So what's the problem?

• 0:37Speaker 01

  We need to become profitable.

• 0:40Speaker 01

  We're not utilizing our assets enough. Trash is a very capital-y intensive business.

• 0:44Alex Hormozi?

  Totally.

• 0:44Speaker 01

  One of our trucks is at half utilization. Routes are not super efficient. We've had lots of unexpected repairs. We need more leads. Scale up our door-to-door efforts. We need to scale up our meta ads efforts profitably, though. And we need more conversions on the HOA side, and we need to increase our route efficiency. So a lot of things we need to do.

• 1:05Alex Hormozi?

  So many things. Why is solving this important? What happens if you don't solve this?

• 1:10Speaker 01

  I'm definitely in the thick of my rocky cutscene right now, where I left my high-paying job at Amazon as a software engineer to start this because I thought it was a great opportunity. And I have been working 16 hours a day, seven days a week, for the past two years with really little to nothing, actually negative, to show for it. And I have a wife and a child at home. And my wife is actually due in the next six weeks, which props to me. So I need to make sure that I'm able to provide for her and my daughter and the new baby, especially as, you know, my wife won't be able to work. So it's really crucial that we figure this thing out sooner rather than later. And I think we're really close because by my estimations,

• 1:54Speaker 01

  we, 3,000 customers is going to be that critical mass point. We're just going to start to make some money.

• 1:59Alex Hormozi?

  So here's my promise to you, which I don't normally do. By the time you leave, you'll feel absolutely clear on what you need to do in order to be profitable. Alright, so I'll stay as long as it takes to make sure that you're good. Alright, okay, alright, so who do you help?

• 2:12Speaker 01

  Yeah, so we have two types of avatars. Fifty percent are what we call scatter. The other fifty percent are HOAs. And there's two different types of sales processes for these two types of customers.

• 2:23Alex Hormozi?

  Yeah, what's the, is there, is there a difference in, in like home value or income in the scatter versus HOAs? Or HOAs, do they tend to be nicer than the other ones or?

• 2:33Speaker 01

  We had some HOAs that are lower income for sure. And then we have some scatter customers that are much higher income. That scatter group is thinking about switching to be an HOA.

• 2:43Alex Hormozi?

  Yeah.

• 2:44Speaker 01

  Typically, it does correlate with income. The HOAs are higher income.

• 2:48Alex Hormozi?

  In general, right. I think there's gonna be a big strategic decision that we're gonna have to make that you're probably not expecting. And it's around, it's around who the avatar is. So we'll talk more about that. The second thing is gonna be how you acquire them. So how do you help them?

• 3:04Speaker 01

  Okay, so we have two different types of services for two different customers. So our scatter customers have once weekly trash recycling and yard waste collection. Most don't have an existing contract, so we can just get them set up and start service even next week. But typically, the beginning of the month is what we do. Then our HOAs have two service options there. So they can either have once or twice weekly trash collection. Most of them opt for the twice weekly trash collection.

• 3:31Alex Hormozi?

  Sure.

• 3:31Speaker 01

  Yeah, eighty percent. So they're on three or five year contracts usually. And so we wait for the end of those contracts for us to be able to bid.

• 3:40Alex Hormozi?

  Do you reach out to find out when the end of their contracts are? And then you just have put them in a calendar, basically?

• 3:44Speaker 01

  Excel spreadsheet.

• 3:44Alex Hormozi?

  Yeah, okay.

• 3:45Speaker 01

  Yep. Yep, so once those are up for bid, then we start to, then we just calculate the price and everything. And then we, often the low bid will win, unfortunately.

• 3:55Alex Hormozi?

  That's commodity.

• 3:56Speaker 01

  That's kind of the name of the game.

• 3:56Alex Hormozi?

  That's what I want to talk to you about.

• 3:58Speaker 01

  Yeah.

• 3:58Alex Hormozi?

  So we'll get, okay, let me ask one more question about the slide before, which is, who do you help? So of homes in your area, do you know what percentage of them are scatter versus kind of like contained within HOAs? And like kind of off the, basically off the board until they come up?

• 4:14Speaker 01

  In my service area, there's a very large majority that are HOAs.

• 4:18Alex Hormozi?

  Okay.

• 4:19Speaker 01

  Yeah.

• 4:20Alex Hormozi?

  That is interesting. Do you have any idea what percentage?

• 4:23Speaker 01

  I don't know, but I can just see it on a map.

• 4:25Alex Hormozi?

  Just if you guesstimate it for me, it's fine.

• 4:28Speaker 01

  Seventy percent?

• 4:29Alex Hormozi?

  Seventy, okay, okay. Are there a lot of other computing trash services on the scatter side?

• 4:35Speaker 01

  There's one big one that's really causing us to reduce a lot of our prices right now.

• 4:39Alex Hormozi?

  Yeah, we're gonna, we're gonna, we'll, we'll deal with that. Okay, got it. Okay, let's keep going. So give me the, the money stuff. How do you make money?

• 4:47Speaker 01

  So for scatter customers, we charge twenty nine sixty seven a month, which is billed quarterly at eighty nine dollars. And as an intro offer, we offer three months free. That's not all in one go. That's just on the third, uh, excuse me, second, third and fourth invoice. And for our HOA customers, it varies pretty widely. It really depends on, you know, the home type, whether it's a town home or a single family home. Single family home with a lot of families are going to produce a lot more trash. And then we have to pay that at the landfill. Um, and so it also varies depending on the number of units as well as the proximity to our current route. Um, and they're actually all on a monthly billing schedule.

• 5:27Alex Hormozi?

  But, but the scatter ones are on a monthly billing schedule too, right?

• 5:29Speaker 01

  No, they're billed quarterly.

• 5:30Alex Hormozi?

  Oh, quarterly, excuse me. Got it, got it, got it. Okay.

• 5:32Speaker 01

  Yeah.

• 5:32Alex Hormozi?

  You price it, you price it monthly. I got you.

• 5:34Speaker 01

  Yeah, exactly.

• 5:35Alex Hormozi?

  Okay, cool. Okay, so how do you get customers?

• 5:37Speaker 01

  We have four different channels through which we get customers. So we have door to door and I currently go and do around three hundred a week. I knock on three hundred doors and my close rate is right around twenty six percent. And we hired.

• 5:52Alex Hormozi?

  What's your door open rate?

• 5:54Speaker 01

  Door open rate was, I don't have that ready.

• 5:57Alex Hormozi?

  Just rough.

• 5:58Speaker 01

  I believe it was around thirty percent.

• 6:02Alex Hormozi?

  Is it really?

• 6:03Speaker 01

  Yeah.

• 6:03Alex Hormozi?

  Dude, so you knock on twelve doors, you get a sale?

• 6:06Speaker 01

  Yeah.

• 6:07Alex Hormozi?

  So chill.

• 6:08Speaker 01

  Yeah.

• 6:08Alex Hormozi?

  You can just like, you're like, hey, I gotta get lunch. You're like, give me two seconds. Just like knock on twelve doors and buy lunch.

• 6:13Speaker 01

  I'm not the best sales guy, but yeah, I mean, I can even sell, so.

• 6:16Alex Hormozi?

  Okay.

• 6:16Speaker 01

  Yeah.

• 6:17Alex Hormozi?

  Okay. Uh, there's, there's some things that we're gonna do in the offer that things gonna help us out. But, okay, so door to door fifty dollar commission per sale. That's what you're paying your current sales guy?

• 6:25Speaker 01

  Yes, exactly. And he recently started with us three weeks ago.

• 6:29Alex Hormozi?

  Got it. And he's, how many deals is he doing a day?

• 6:32Speaker 01

  So he's been getting better and better, but right now he averages right around five.

• 6:37Alex Hormozi?

  Five a day. I mean, it's not a bad, it's not a bad gig. And he'll just keep getting better, right?

• 6:41Speaker 01

  Yes. Like yesterday, he got seven.

• 6:43Alex Hormozi?

  That's awesome.

• 6:43Speaker 01

  Yeah.

• 6:44Alex Hormozi?

  That's good. That's really good. That's very exciting. Okay. Now you pay him fifty and he's collecting less than fifty?

• 6:51Speaker 01

  No, he'll, he's a contractor, so he just gets all the fifty.

• 6:55Alex Hormozi?

  No, no, as in for what he's like, he's collecting less than fifty, but you pay him fifty for getting the sale?

• 7:02Speaker 01

  He collects the eighty-nine for the first invoice.

• 7:05Alex Hormozi?

  Okay, for the first three quarter, or for the first three months?

• 7:07Speaker 01

  Yep.

• 7:09Alex Hormozi?

  Okay, you said that it was, you said it was month two, three, four is where they're getting their free month?

• 7:16Speaker 01

  The quarter two, three, four.

• 7:17Alex Hormozi?

  So they get one month on quarter two, quarter three, and quarter four?

• 7:21Speaker 01

  Okay, got it, understood, okay, that's fine.

• 7:23Alex Hormozi?

  Okay, so let's walk, let's walk through this, so I understand the DDD. Do you have percentage breakdowns on these between which ones what? In terms of how many are coming from door to door, how many are coming from paid ads, coming from outreach, how many come from referrals?

• 7:34Speaker 01

  No, I don't have those numbers.

• 7:36Alex Hormozi?

  Rough estimate?

• 7:37Speaker 01

  Yeah, I mean, recently, I'd say fifty percent have been coming from door to door, because I've really been.

• 7:42Alex Hormozi?

  Pounding the pavement, quite literally?

• 7:44Speaker 01

  Yeah, yeah, and then we leave cards there and stuff, and then people sign up.

• 7:47Alex Hormozi?

  Yeah, I did see your door hanger got one point two percent.

• 7:50Speaker 01

  Yeah.

• 7:50Alex Hormozi?

  Super interesting.

• 7:51Speaker 01

  Yeah.

• 7:52Alex Hormozi?

  Yeah, okay, let's, okay, we'll, we'll, we'll keep on, okay, so paid ads, you're spending six hundred a month?

• 7:57Speaker 01

  Yep, yeah, we have meta ads, we run six hundred a month, that gets us HOA and scatter customers, but they're marketing, we're, we're targeting scatter customers. And we also do cold outreach, so cold email exhausts that list pretty quickly. And then I also have started doing in the past six months handwritten letters to the board members.

• 8:17Alex Hormozi?

  A hundred percent.

• 8:18Speaker 01

  And then we also have referrals for our scatter customers, and the, for each referral, they get one free month of service.

• 8:25Alex Hormozi?

  So, I'll just say this right now, if you have, call it five hundred HOAs, which represents seventy percent of the market, it's not a cold email play. So, that's where it's the handwritten card, personal gift, drive up, it's like you have three hundred sixty-five days, it's like go to two a day. You know what I mean? And obviously, you're gonna have the ones that are due, you know, with their own, whatever the renewal is. And so even if they're on three-year, three-year cycles, five hundred divided by three, so it's one fifty, so you go to one every other day. Where you decide to do one day a week where you visit seven, and it's like you are a hundred percent up to date if you just did that. Yeah, I think there's some, there's, there's opportunity there. Okay, so, and then referrals?

• 9:04Speaker 01

  Yeah, referrals, for our scatter customers, when they refer their neighbor successfully, they get one free month of service. We also fast track them after they get ten referrals, and we just give them a free year at that point.

• 9:15Alex Hormozi?

  Cool, does that get a lot of people?

• 9:18Speaker 01

  Not as many as I'd like. I don't think I've been good enough about nurturing.

• 9:21Alex Hormozi?

  Yeah, I have. I have ideas. So how many do you help? What's your sales velocity per month? Okay.

• 9:26Speaker 01

  Yeah, so we get total average leads is two seventeen per month. We close about seventy-two of them, which is a thirty-three percent close rate.

• 9:35Alex Hormozi?

  And is that when you see leads there, is that from meta primarily?

• 9:39Speaker 01

  A lot of them are organic, so they'll see our cans and then.

• 9:42Alex Hormozi?

  Oh shit.

• 9:43Speaker 01

  Yeah.

• 9:43Alex Hormozi?

  And do you have like QR codes and things on the cans?

• 9:45Speaker 01

  No, we don't.

• 9:46Alex Hormozi?

  Interesting.

• 9:47Speaker 01

  That's interesting.

• 9:48Alex Hormozi?

  Well.

• 9:48Speaker 01

  Yeah.

• 9:49Alex Hormozi?

  All right, that too.

• 9:52Speaker 01

  But yeah, they'll see our cans throughout their neighborhood and be like, everyone's switching to your service, so might as well switch too.

• 9:57Alex Hormozi?

  Yeah.

• 9:58Speaker 01

  They, yeah, that's, they just call it. And so our average month for HOAs is usually two leads.

• 10:02Alex Hormozi?

  And you provide the bins?

• 10:04Speaker 01

  We do, yeah.

• 10:05Alex Hormozi?

  Do you have a specific color or do they have to be a certain color?

• 10:08Speaker 01

  Yeah, I think it helps with our branding.

• 10:10Alex Hormozi?

  No, so they do have to be a certain color?

• 10:12Speaker 01

  So they can provide their own if they want.

• 10:14Alex Hormozi?

  Okay.

• 10:15Speaker 01

  Most people just want our bins.

• 10:16Alex Hormozi?

  Okay.

• 10:16Speaker 01

  And so we provide, we provide a trash and recycling container.

• 10:20Alex Hormozi?

  All right, I have so many ideas. Average per month, you get two HOA leads. You close half your HOA leads. That's great. And those are somewhat inbound or is that from the outbound efforts you're doing?

• 10:29Speaker 01

  Yeah, those, we'll, we'll start with the outbound and then we, oftentimes they'll reach a property manager.

• 10:35Alex Hormozi?

  Yeah.

• 10:35Speaker 01

  Or a community manager, rather. And then they'll say, hey, not interested right now. And then they'll reach out later.

• 10:40Alex Hormozi?

  Got it. Okay, heard. So you've got a thousand scatter, thirteen HOAs, twenty-five hundred doors. Okay, let me, give me all the other numbers unless you think there's anything that's important here. HOA customers more likely to convert in spring and summer. Okay.

• 10:52Speaker 01

  Just that our churn is super low.

• 10:55Speaker 01

  But I think that that might change if we increase prices.

• 10:58Alex Hormozi?

  Yeah.

• 10:58Speaker 01

  As we haven't been as aggressive for increasing.

• 11:01Alex Hormozi?

  Yeah, I got you.

• 11:01Speaker 01

  Yeah.

• 11:02Alex Hormozi?

  Okay, yeah, because I do have, I have a bunch of questions on gross margin, lifetime gross profit and churn.

• 11:06Speaker 01

  Yep. Yeah, so our, our revenue is six hundred and forty-two thousand, as I mentioned earlier, negative one fifty-one, gross margin eight percent. Net margin, negative twenty-three.

• 11:15Alex Hormozi?

  So how's your, the gross margin seems off?

• 11:18Speaker 01

  Yeah.

• 11:18Alex Hormozi?

  So how is that, how is it eight percent? Because it can't cost, like, if you're charging twenty-nine dollars a month, it's not costing you twenty-six dollars per month for each incremental ad.

• 11:30Speaker 01

  So that was this past year and this past year was rough with repairs.

• 11:33Alex Hormozi?

  Yeah, the hundred thousand dollars in repairs.

• 11:34Speaker 01

  Yeah, just for one truck, like, that's not even all the trucks. Like, it was pretty excessive.

• 11:39Alex Hormozi?

  Brutal.

• 11:40Speaker 01

  Yeah.

• 11:41Alex Hormozi?

  Okay.

• 11:41Speaker 01

  Yeah, so. Blended CAC of $67 with a blended LTV of $1,300.

• 11:48Alex Hormozi?

  And is LTV like lifetime revenue or gross margin?

• 11:51Speaker 01

  Gross margin.

• 11:51Alex Hormozi?

  Okay, okay, that feels better. What's annual retention?

• 11:56Alex Hormozi?

  Or monthly churn, either way?

• 11:57Speaker 01

  It's at 0.4%.

• 11:59Alex Hormozi?

  Nice, nice, sick. That's really good. Okay, so and then you've got marketing at $1,000 a month. Is that, that includes door to door?

• 12:07Speaker 01

  Yes, marketing with door to door, that's actually, since we just started that guy, that's gonna be increasing.

• 12:12Alex Hormozi?

  A bit more, obviously. If he's closing seven, that's three, you know, that's 350 right there. Okay.

• 12:16Speaker 01

  Exactly.

• 12:17Alex Hormozi?

  What else you got?

• 12:18Speaker 01

  So our number's by customer type, so 50/50 for our revenue, so 300,000 for our HOAs. And then we have a CAC of $1,200 with an LTV of 23,000 and an LTV CAC of 18 to 1. And our gross margins on this are 23% and we have a total of 13 of these customers. And the reason the gross margins are off there compared to what was last year is because I'm going based on, you know, backing out some of those costs that are one-off, one-off costs. And then for the scatter, we have 300,000 in revenue and a CAC of $51 and LTV of 1,000. 21 to 1 LTV to CAC and gross margin of 26 to 40%.

• 13:02Speaker 01

  And the reason I did that range there is because right now it's at 26, but once we get efficiency, we're very easily gonna get to 40.

• 13:09Alex Hormozi?

  Yeah, yeah. You can also raise prices a couple of dollars. It's like, oh, look, we go 10%, we had 3 bucks.

• 13:15Speaker 01

  That's true.

• 13:16Alex Hormozi?

  Yeah, okay.

• 13:17Speaker 01

  Yeah.

• 13:18Alex Hormozi?

  Let me see the ads.

• 13:19Speaker 01

  So we have a total ad spend of 7,500 with a cost per click of $2.12 and total clicks of 3,500 with total sales of 153 and a CAC of 5163 with an LTV of 1,000, just like the other ones. And then LTV to CAC of 20 to 1.

• 13:37Alex Hormozi?

  What stops you from just spending 70,000?

• 13:39Speaker 01

  A lot of it is our, our cost per lead goes like crazy, crazy high because it's such a small area we're marketing towards.

• 13:47Alex Hormozi?

  I'll tell you why, okay.

• 13:48Speaker 01

  When I was doing it, I could be doing it wrong, but it was just.

• 13:53Alex Hormozi?

  You're doing a lot of stuff right.

• 13:55Speaker 01

  I feel like I'm doing everything wrong.

• 13:57Alex Hormozi?

  No, you're good, you're good. We'll get there. Okay, so Mids, I got this. These numbers are good though. I get, you're saying that it skyrockets and after a certain point, we'll deal with that. Do you have any other metrics or creative to show?

• 14:09Speaker 01

  I have a cold outreach. It's kind of skewed a little bit because it's so low for our our cost per lead because it's all public data. But this is for email as well as the direct mail.

• 14:21Alex Hormozi?

  You're just not valuing your time because you're the one doing it.

• 14:23Speaker 01

  Yeah, yeah.

• 14:24Alex Hormozi?

  Okay, so yeah, I mean, $12,000 to be a 700 to one. Yeah, let's do more of that. Yeah, it only costs you $174 to make, you know, 12,000. And you got nine more HOAs in the pipeline?

• 14:34Speaker 01

  We do. Yeah, a lot of them seem very interested.

• 14:36Alex Hormozi?

  If you close half, what happens to the business?

• 14:39Speaker 01

  The business rose substantially.

• 14:42Alex Hormozi?

  Okay, that sounds chill.

• 14:43Speaker 01

  That sounds pretty good.

• 14:44Alex Hormozi?

  Okay, you know, so what's really interesting about your business is that we have two key decisions that we have to make. Decision number one is what avatar we're going to focus on. Decision two is what channel we're going to focus on to get them. I think the direction we go in will depend on you, but you might be surprised by which way we go.

• 15:00Speaker 01

  Okay.

• 15:01Alex Hormozi?

  If you wave a magic wand, what thing is giving you the most heartburn right now?

• 15:05Speaker 01

  Not being able to.

• 15:06Alex Hormozi?

  Obviously, money.

• 15:07Speaker 01

  Yeah.

• 15:08Alex Hormozi?

  But what's the what's the indicator prior to that? Like, is it like if people paid you $200 upfront, that would change the economics of the business dramatically? Like, is it simply not getting leads? Like, I'm like, that's, I just want to understand that part.

• 15:20Speaker 01

  Yeah, it's more about offsetting some of the upfront costs.

• 15:23Alex Hormozi?

  This is what I want to solve for, which is I would like to have the most scalable acquisition channel we can that can get because also you've said you're like, if you spend $7,000, even in a local area, you're not even getting close to tapping. How big's the the market overall, like on a, you know, 10, 20 mile radius?

• 15:40Speaker 01

  Yeah, it's pretty big, a few million people.

• 15:42Alex Hormozi?

  Yeah, right. I mean, like, you're not even close. So like, I would love to see spend at like $7, $10,000 a month on the Facebook side. And then probably another five or 10,000 a month on PBC, which will have super high intent, it'll have different metrics around it, but we'll get there. For us to solve the problem for good, we just need cash in the first 30 days to be greater than your cost of goods sold and CAC, fully loaded.

• 16:09Speaker 01

  Right.

• 16:11Alex Hormozi?

  So do you know what that number is? Like, what's? So let's ignore CAC for a second. I guess we have fifty, we can use that as a placeholder or sixty seven. We wanna be bullish or bearish. So sixty seven dollar CAC. And then what's it cost to kinda like onboard someone and kinda like get them going?

• 16:28Speaker 01

  I do that all myself, so I don't.

• 16:31Alex Hormozi?

  If you paid someone and you and the bin was, you had like fully, fully bake it in, because we wanna scale past you.

• 16:36Speaker 01

  Right, yeah. So to deliver all the containers for, you know, let's say like two hundred customers, it'd be about five hundred dollars to pay someone.

• 16:45Alex Hormozi?

  So that's two hu- two dollars and like fifty cents.

• 16:48Speaker 01

  Yeah.

• 16:49Alex Hormozi?

  Per customer.

• 16:50Speaker 01

  Yep.

• 16:50Alex Hormozi?

  So that's not big. So when I say, so you get on with this where it's like, okay, if it costs us seventy dollars, if we made more than seventy on the first transaction, which you do,

• 17:01Alex Hormozi?

  what's, what's something like, what's stopping? It's just that like you can't get more leads and then it just, and then it, because you're at twenty to one.

• 17:08Speaker 01

  Yeah.

• 17:08Alex Hormozi?

  Right? And you're at least more than one to one on the front end. So like, why, like, why not? Is it just, you just can't, as soon as you spend more, it just goes to zero? Like?

• 17:17Speaker 01

  So, yeah, the issue is, is that we have fulfillment those months after that we still have to cover. So like they pay for the quarter in the first month, and then we have to pay for fulfillment in months two and three.

• 17:29Alex Hormozi?

  Uh huh.

• 17:29Speaker 01

  Which is completely, it, it costs roughly, like if we get them all.

• 17:33Alex Hormozi?

  Give me that number.

• 17:34Speaker 01

  That would be.

• 17:35Alex Hormozi?

  Yeah, the full, that's what I'm saying, cost of goods. So give me the fully loaded before you get the next payment.

• 17:39Speaker 01

  Got it. Yeah, okay. So, um, for each customer on these, it's around fourteen dollars.

• 17:45Alex Hormozi?

  Or per pickup or not, right? So it's fourteen dollars and you're gonna pick it up three times?

• 17:51Speaker 01

  We have three pickups per week. Yep.

• 17:54Alex Hormozi?

  Wait, hold on. It's fourteen, it's fourteen dollars per month, right?

• 17:57Speaker 01

  Yes.

• 17:58Alex Hormozi?

  Okay, fourteen dollars per month, and they're paying quarterly.

• 18:02Speaker 01

  Yes.

• 18:03Alex Hormozi?

  So it's times three, right? So it's forty two bucks in costs for the first month of delivery. When I say delivery, I mean like fulfillment, right? And your CAC is, we'll call it seventy dollars.

• 18:18Speaker 01

  Right.

• 18:18Alex Hormozi?

  So if we get upfront cash over, call it a hundred and twenty bucks, you could be good to go.

• 18:26Speaker 01

  Right.

• 18:27Alex Hormozi?

  Well, then let's solve for that.

• 18:29Speaker 01

  Yeah.

• 18:29Alex Hormozi?

  Okay.

• 18:31Speaker 01

  Sorry, I had to pull it out of me.

• 18:33Alex Hormozi?

  No, you're good. I mean, do.

• 18:36Alex Hormozi?

  That's why we're here. Okay, cool. Let's come over. Let's break it down. Let's figure it out. What order do I want to do this in? I think we need... So I think what we're gonna do is I think we're gonna go Avatar. I want to get clear on this because I think that's super important. Two is I actually think we're gonna go Offer next. We have to figure out like how we're gonna, you know, do it, facilitate the transaction. And then, once we know that, then we can do Acquisition Channel. And then I think we're gonna go Ads. And then we're gonna go Sales Process.

• 19:15Alex Hormozi?

  We'll do some Funnel, Funnelitics. I think that's it. I think that's all we need to do. Okay. You're at that, in that stage where like, I like having one Avatar, one channel, one product, up to a million dollars or more, right? And you're kind of, you're right there, right? And so you have two Avatars and like, five channels. Pretty much. Right? Yeah. And so you feel spread thin. This is me just hearing you out. And so what I want to solve for is we have to make this decision between HOA and Scatter. So if you could just do one, which one would you do? I think HOA is a better opportunity. Okay. I'll tell you, I'll tell you why I don't like either of them. Okay. And then I'll tell you why I like both. Okay, alright.

• 20:01Alex Hormozi?

  So the reason that I don't like HOA is I never want to have a commoditized service where I get into an auction.

• 20:07Alex Hormozi?

  Because then it's always just gonna be rich to the bottom. Now, the reality is that that's not gonna change. And so, it's like, what business are you really in? Right? And so the business that I think you're really in is the efficiency business. So fundamentally, like if you, if 70% of the market is owned by HOAs and they continue to gobble more and more, you know, more of these houses continue to glob together, then it's kind of an eventuality, right, that that happens.

• 20:33Alex Hormozi?

  Figuring out the HOA offer, I think, makes sense from a future-proofing perspective. But the strategy of the business has to be geared towards efficiency because it's the only way you're going to beat the other players. Because I agree, I think they're going to commoditize you and I think they're going to make it lowest, lowest bid fundamentally. The reason that I like scatter in the short term is that you can price more aggressively, you can have higher gross margins, you can out-market, you know, your competition, there's still a decent amount of market share that's there. But, and acquiring them is super easy. If you just knock on 12 doors and get a sale, it's like, all right, well, how many doors do I need to knock on?

• 21:05Speaker 01

  That's true.

• 21:06Alex Hormozi?

  It's like very straightforward.

• 21:07Speaker 01

  Yeah.

• 21:07Alex Hormozi?

  Because like taking it to the hypothetical extreme, it's like, okay, what stops me from running an ad, getting 10 guys, getting them into a room, taking a day to have them, you know, to train, to train them? And then all of a sudden I've got 10 guys doing five or five to seven sales a day.

• 21:21Speaker 01

  Exactly.

• 21:21Alex Hormozi?

  All on contract with no risk. That sounds relatively appealing. And the nice thing with door to door is that they already naturally have a route. Right? Which you already know. And so it, it makes it even more efficient for the business right on the backend. So that's what I like about scatter. But I do think that there's, you know, long, long term, there's, there's probably some downside risk. I'm sorry. Yeah, there's some risk. The HOA, I just feel like you're going to continue to get squeezed.

• 21:47Speaker 01

  Yeah.

• 21:47Alex Hormozi?

  That's the only, so you're like, okay, well then which one should I do?

• 21:56Speaker 01

  You mind if I add something?

• 21:57Alex Hormozi?

  Yeah, go for it.

• 21:58Speaker 01

  I think that the thing with scatter that's even better too. And the reason I said HOA was not really because of.

• 22:04Alex Hormozi?

  Oh, you're good.

• 22:05Speaker 01

  Like the, I like, I like HOAs because I think that the competitor that we have right now, that's really aggressive, is really going hard scatter and no HOAs. So like, it'll, and then a competitor that only does HOAs, we've recently acquired, so people are unhappy with them. So then it kind of opens it up for me. But the thing I love about scatter is what you said about pricing.

• 22:25Alex Hormozi?

  Yeah.

• 22:25Speaker 01

  And then also the fact that it's only once weekly collection. So we increase throughput for each truck.

• 22:30Alex Hormozi?

  Mm-hmm.

• 22:30Speaker 01

  So that's the thing I like about it, but in terms of, you know, me being one, I guess I'm just thinking about it in a limited sense where I'm, I'm like, I'm only one guy. How many doors can I knock on in a day? You know?

• 22:41Alex Hormozi?

  That's not going to be human.

• 22:42Speaker 01

  Yeah, exactly. Yeah.

• 22:43Alex Hormozi?

  So we just, I mean, let's think of it this way. You said when you get to 3,000 doors is when you're like super profitable. Right? Or like it becomes more profitable.

• 22:51Speaker 01

  Yeah, we have.

• 22:51Alex Hormozi?

  Right? And if we get to 5,000 doors, then you're like.

• 22:54Speaker 01

  We're good.

• 22:54Alex Hormozi?

  You're, you're, yeah, you're good. Well, I mean, in my mind, I like to think like, if I had to take this to its natural extreme, and I only had have one thing be true, because I'd like I'd like to like, make a plan on like, the fewest need to believe is possible, like every single new assumption that we introduce, like dramatically decrease the likely that occurs. If I said, all right, do you think it's humanly possible to get 10 people to work on commission to knock these doors? And get to, let's say, conservatively, five a day, right? Now, this guy's gonna keep getting better. He's three weeks in, he's already doing seven, fine. But like, let's just say they stick to five a day. Yep. That's 50 sales a day, that's 1500 a month. You're looking at 20,000 doors by the end of the year. That's... Right. And so to me, it's like, okay, well, that overshoots our goal by like, you

• 23:39Alex Hormozi?

  know, 8x. Yeah. So, there's all these things that you're doing, but if it was like, if only that one thing were true, then what are the other need to believe that are associated with that? Which is that you can find the houses to do these door knocking on? Mm-hmm. Do you have the ability to do that? Yeah. Okay, so, knowing where to go is not a problem. Yeah. And so basically, your ability to solve two things. One is, the cash to pay the salespeople, that they collect as much as you owe them, and that you can cover the cost of the first, you know, the $42 that we went over earlier. And so like, if the only thing you did was like, you went home, and you were like, I'm

• 24:21Alex Hormozi?

  going to go find 10 dudes, and they will be commission only, and I will just rejig the offer so that I can get $42 plus what I have to pay them upfront, we don't have to talk about anything else. Yeah. Let's do it. I mean, like, I can go through, like, I can look at the ads, and I could tell you what I think, like, could be better. I can tell you why the, which, you know, we can go through some of those things. But fundamentally, like, I just want to be like, here's the ramrod. Like, if only this were true, then what stops me from doing that? Not a ton, which is just the offer and getting the sales guys on. Yeah. And then after that's done, it's like... That's it.

• 25:03Speaker 01

  Yeah.

• 25:04Alex Hormozi?

  And then we just, and then we just jam it and then you just don't let yourself get distracted.

• 25:07Speaker 01

  Right.

• 25:08Alex Hormozi?

  I will give you my, my blessing on if you get an inbound HOA, you can close them. But I still would be like, this is our growth strategy. I mean, like, yeah, sure, except for money provided it doesn't, there's, it's super operationally efficient. It does take some of your time, fine, you're the owner, you can close big deals. But by and large, I think that's the play.

• 25:26Speaker 01

  Okay.

• 25:27Alex Hormozi?

  All right, great. So I think we go scatter.

• 25:33Alex Hormozi?

  Great, that was decision number one.

• 25:34Speaker 01

  Yep.

• 25:35Alex Hormozi?

  Now, acquisition channel, you already have 50% coming from door to door. So that gives us that one, right? So I'm gonna hit the sales process in a second, but I think we need to go on offer. Because this is kind of the big, the big unlock of this business. All right, so.

• 25:52Alex Hormozi?

  We have to get, you said you're gonna pay them 50, right?

• 25:55Speaker 01

  Yes.

• 25:56Alex Hormozi?

  Okay, so here's how I would restructure this. I would say we have to get $42 no matter what. Period, because that's what it costs, that's hard cost, right? So this is base. Then, gotta get the sales guy paid, so I'm just gonna put commission here. Which we can fill in in a second. So we can backfill that, okay, we have to get a commission and we have to get the contract, right? So what I wanna do is find something, so do you give them all a new bin? Or can they get like a, do they get like somebody else's bin or like, how's that work?

• 26:25Speaker 01

  We recycle the bins, so if someone, like the three people who canceled, then we'll. But for the most part, they're new bins.

• 26:31Alex Hormozi?

  They're new bins, okay.

• 26:33Speaker 01

  And we'll finance them over three years. Before I bought them with cash, but then I'm like, okay, maybe we should probably. Hold on to more cash.

• 26:41Alex Hormozi?

  You, wait, you used to pay for them in cash?

• 26:43Speaker 01

  Yeah.

• 26:43Alex Hormozi?

  And you financed them?

• 26:44Speaker 01

  Now I'm financing.

• 26:45Alex Hormozi?

  And do the customer, is that $14 per month including, included?

• 26:48Speaker 01

  Yes, yes.

• 26:50Alex Hormozi?

  How much does it cost for a bin?

• 26:52Speaker 01

  For the set, including freight, it's 116.

• 26:56Alex Hormozi?

  All right, so it's 116. Okay, now, so this is bin. What else can you sell upfront?

• 27:06Speaker 01

  Both pickups, maybe?

• 27:10Alex Hormozi?

  But only, how many, what percentage of customers like opt for that?

• 27:14Speaker 01

  That's also seasonal and that's.

• 27:16Alex Hormozi?

  So no, that's not the offer. Okay, what else? So I'll tell you, I had this idea. So we talked about the QR code earlier. So what I was thinking about doing was like, you put the just the ugliest massive QR code on there. And you just say, hey, if you want to not have this big QR code on there, it's it's an extra five bucks. Or if you're cool with it and you're still like, are cool with us advertising the business, you allow us to leave it on.

• 27:40Speaker 01

  Okay.

• 27:41Alex Hormozi?

  And I think a lot of people don't give a shit.

• 27:42Speaker 01

  Yeah.

• 27:43Alex Hormozi?

  Right. And so all we're gonna do though is just tack that on to your existing pricing. So you're, so if they say, I don't want the QR code, then they're gonna pay five dollars more than your existing price. So there, we bake in a little price increase there. So we get five dollars for the QR code. So go buy stickers. They're like, not expensive. And just put this massive QR code and put your phone number and but your, like, you've got this, you've got this billboard. That's just sitting out there. What color are the bins?

• 28:12Speaker 01

  Gray.

• 28:14Alex Hormozi?

  I totally want them to be neon orange. I'm dead serious. I would, I would allow everyone to be like, Jesus. What is this company? But they would notice it, right? I mean, that's what you're trying to, you're trying to stand out.

• 28:23Speaker 01

  Yeah.

• 28:25Alex Hormozi?

  You said, wait, didn't you say you wanted the branding? You wanted to be on brand with the gray?

• 28:29Speaker 01

  Yeah, people were like clean and stuff.

• 28:32Alex Hormozi?

  Do you think gray's clean?

• 28:33Speaker 01

  It looks, you should look at them. They look pretty clean. We have people calling us and like, I seen your nice clean bins.

• 28:37Alex Hormozi?

  They're so gray. That's like the perfect gray.

• 28:40Speaker 01

  It's like a light gray.

• 28:41Alex Hormozi?

  Fifty Shades. Anyway, um, okay. Okay, this is, this is the, this is how we, this is how we solve the business.

• 28:48Speaker 01

  Right.

• 28:48Alex Hormozi?

  So like, let's take the time on this. The other stuff is really easy. I'll show you some easy, like, I can't get into ads. I can't get into the funnel.

• 28:56Alex Hormozi?

  Like, if we just do this, we win.

• 28:58Speaker 01

  Yeah.

• 28:59Alex Hormozi?

  Okay. So you don't charge them anything for the bin, right? As far as they're concerned.

• 29:05Speaker 01

  We do have a separate process through our website. So we at the door, we have that offer that I mentioned. But then when they go to our website, enter in their address and everything and they're qualified. They do get charged a $37 initiation fee and then they get charged 35 a month. So we have a little higher price point if they don't take advantage of that. But most people do the door to door.

• 29:26Alex Hormozi?

  And so this 42 is labor, right?

• 29:29Speaker 01

  Yes.

• 29:30Alex Hormozi?

  Labor plus truck breaking.

• 29:32Speaker 01

  Yeah, and dump fees.

• 29:34Alex Hormozi?

  Okay, yeah, plus dump. Okay, got it. I think our key is actually how we structure this, the bin. So it costs you 116. Is there a way that we could be like?

• 29:46Alex Hormozi?

  Cause what I want to do is, you see where I'm going with this, right?

• 29:49Speaker 01

  Yep.

• 29:50Alex Hormozi?

  Cause like if we can get the first transaction to be like 199, you're covered. Right? Cause you've got like, so if we add this together, we've got 158. So 158 is the true like cost, cost, right of of getting this person set up. Then you have the commission, which is 50. So 208 all in, if we got that, you're like.

• 30:13Speaker 01

  Yeah.

• 30:13Alex Hormozi?

  Set, right?

• 30:14Speaker 01

  Something I've been playing around with is maybe doing, only doing the three months free if they pay annually upfront.

• 30:21Alex Hormozi?

  Yeah, totally.

• 30:21Speaker 01

  And then like down sell to the 89 a quarter with no months free.

• 30:25Alex Hormozi?

  Mm hmm. I like that.

• 30:27Speaker 01

  Yeah.

• 30:27Alex Hormozi?

  I like that.

• 30:28Speaker 01

  Cause even the rate is really attractive, but the, I mean, the only negative about that is sometimes they're like, yeah, sure, let's do it. And then they opt out because their current provider matched it. But then the three months free usually is what puts them over the edge because the current provider will not offer the three months free. But out of those that do that, I would say it's only maybe one in eight would really.

• 30:47Alex Hormozi?

  Would do the pre-bag. Oh, would um.

• 30:50Speaker 01

  Would like after we like, okay, it's 89 a quarter. And they're like, yeah, actually my current provider matched it. So it's like one in eight.

• 30:55Alex Hormozi?

  Most people are just like, here, just take the business. Yeah. Yeah. So if we get, if we get the, the deal on seven out of eight, who cares?

• 31:01Speaker 01

  Exactly.

• 31:02Alex Hormozi?

  Right? Okay.

• 31:02Speaker 01

  Yeah.

• 31:03Alex Hormozi?

  So if we go. What I'm trying to play with is, so we've got the, what, what levers do we have, right? So levers that we have this little QR code, like we're gonna make your thing look ugly. That's thing one.

• 31:13Speaker 01

  Okay.

• 31:13Alex Hormozi?

  Thing two is we have the bin. Thing two, we have, thing three is we have the commitment, right?

• 31:18Speaker 01

  Right.

• 31:19Alex Hormozi?

  These are, this is like what we're, these are our puzzle pieces. Okay.

• 31:27Alex Hormozi?

  But I wanna collect two hundred. That's what I'm trying to do.

• 31:34Alex Hormozi?

  Okay, so a quarter is eighty-nine, right?

• 31:39Speaker 01

  Yes.

• 31:39Alex Hormozi?

  Is there any reason, do you think anyone's gonna balk at ninety-nine? Eighty-nine to ninety-nine?

• 31:44Speaker 01

  A lot of people are paying one oh five, so it may not get them over the edge.

• 31:47Alex Hormozi?

  You mean it's not enough savings?

• 31:49Speaker 01

  Yeah.

• 31:50Alex Hormozi?

  I hate being low cost.

• 31:52Speaker 01

  Yeah, but I think that there's still some people who would definitely convert, cause like, there's some people I talked to who are being charged like one eighty a quarter.

• 31:59Alex Hormozi?

  Yeah.

• 32:00Speaker 01

  It just all varies, you know, depending on if you, if you call them to say, hey, lower my rate.

• 32:05Alex Hormozi?

  So eighty, so okay, so we got ninety ninety is one eighty, right, in terms of cash, right? There's gonna be some setup fee, right, which we could say we have a forty-two, and we also have setup fee, right? So it's another little, little thing. We're just, we're constructing an offer right now. That's literally what we're doing, okay? Cause you could do three months free, and it's thirty-three per month, right? You could still do three months free.

• 32:30Speaker 01

  Yeah.

• 32:30Alex Hormozi?

  So that works fine. Oh, here we go. So we can basically have the QR code be our five dollars extra a month. And you're at twenty-nine, so that gets you to thirty-five.

• 32:39Speaker 01

  Okay.

• 32:40Alex Hormozi?

  Right, where you can make it, yeah, that's fine. So that gets us to thirty-five dollars per month, right? And so if we did times six, and that's gonna be two... What's that? That's thirty plus one eighty, so two-ten. Alright, so it's gonna be two-ten in cash.

• 33:04Alex Hormozi?

  And if you commit to six, and you normally just eat this, right?

• 33:09Speaker 01

  Yeah.

• 33:11Alex Hormozi?

  So if you commit to six, we'll give you our hundred and sixteen dollar bin for free.

• 33:19Alex Hormozi?

  And we'll waive

• 33:22Alex Hormozi?

  our

• 33:24Alex Hormozi?

  forty-nine dollar setup.

• 33:27Speaker 01

  So can you talk a little bit more about these? These converser here?

• 33:30Alex Hormozi?

  Yeah, so this, yeah, so thirty-five dollars a month is the, the price, right?

• 33:34Speaker 01

  Yeah.

• 33:34Alex Hormozi?

  But what we're trying to do is get them to prepay for six months.

• 33:37Speaker 01

  Okay.

• 33:38Alex Hormozi?

  So that's the main offer, is you prepay for six, and then that gets you a free bin, and we waive the setup fee.

• 33:45Speaker 01

  Okay.

• 33:46Alex Hormozi?

  If you don't prepay for six, you can prepay for three and we'll give you, actually, maybe we'll just do this, we'll do this, we'll do twelve, and we'll step down to six, and then we'll step down to three, which is your current offer.

• 33:59Speaker 01

  Okay.

• 33:59Alex Hormozi?

  So, twelve months gets you, because what we're looking for here is blended average cash per door. So if you have some people who pay four-twenty, and even if it's like one out of, whatever, one out of five pays four-twenty, we're still effectively adding eighty bucks per door in cash collected.

• 34:20Speaker 01

  Okay.

• 34:21Alex Hormozi?

  So even if the vast majority of people, if everybody took, if, if four out of five took the, your current offer, and then one out of five takes the four hundred, it's like we're still adding eighty with the existing, whatever, eighty-niners that, that you're getting right now. So now our actual blended average goes to like one-seventy a door.

• 34:37Speaker 01

  Okay.

• 34:38Alex Hormozi?

  Does that make sense?

• 34:38Speaker 01

  Yeah, yeah.

• 34:39Alex Hormozi?

  Okay. So, I think we go, times this, now if they're like, I don't want the QR code, then we're like, fine, we'll drop it to thirty, right, if they don't want this. And times twelve, so that's three-sixty. And we get that upfront, which is going to have lower churn anyways. If they say, no, I don't want to do that, then we say, because with that, you get free bin and free waive, or like free, free setup, right? If they say, no, I'll just do six, which would then get us the two, whatever, the two-hundred-dollar-ish price point, we can get to, we can finalize the prices in a second. But you get your two-hundred-dollar-ish price, um, and when you do that, we can't waive the bin, or we can waive the setup fee, but we're going to add, we're just, we'll finance this over the duration.

• 35:24Alex Hormozi?

  So that's where you can get the difference in terms of the, like, it's thirty-five dollars a month if you do six months, it's thirty dollars a month if you do twelve months. Um, and if you're doing just month to month, if you sign up today, I'll let you waive this fee, but you've still got to pay three.

• 35:36Speaker 01

  Okay.

• 35:39Alex Hormozi?

  How does that feel?

• 35:40Speaker 01

  Complicated.

• 35:41Alex Hormozi?

  Yeah. Well, no, no, it's complicated now because we had to go through everything. But let me, let me, let's clean it up.

• 35:45Speaker 01

  Okay.

• 35:45Alex Hormozi?

  Because we've got to be able to explain it to the sales guys.

• 35:47Speaker 01

  Yeah.

• 35:48Alex Hormozi?

  So the offer at the door is going to be 12 months.

• 35:54Alex Hormozi?

  And what price are we going to charge at 12 months?

• 35:57Speaker 01

  For 12 months?

• 35:58Alex Hormozi?

  Up front. Up front. So we're going to do 30. So that's going to be $360.

• 36:04Speaker 01

  Yep.

• 36:07Alex Hormozi?

  If they commit to six months,

• 36:10Alex Hormozi?

  that's going to be at 35.

• 36:12Speaker 01

  Okay.

• 36:13Alex Hormozi?

  So that's 210.

• 36:17Alex Hormozi?

  And I'd say we bill biennial. We just bill twice a year.

• 36:19Speaker 01

  Hmm.

• 36:21Alex Hormozi?

  And then three months. Do you do ACH?

• 36:25Speaker 01

  We, we just incorporated that actually, yeah.

• 36:28Alex Hormozi?

  Okay, do you have a processing fee?

• 36:30Speaker 01

  Yeah, so we stripe, so it's.

• 36:31Alex Hormozi?

  Yeah, but like, you don't, you don't charge a processing fee?

• 36:34Speaker 01

  No, but we, like, I've gotten a bunch of people to switch over. I like offer them a gift card, like a small gift card to switch over to ACH. But then we don't do a.

• 36:42Alex Hormozi?

  Well, I'll tell you really a fancy one. So say that you charge the 3%. So this is, all these are plus processing.

• 36:52Alex Hormozi?

  And then if they're like, oh, I don't want to pay the processing fee. It's, no worries. If you want, if you have a second form of, of payment, we'll waive the processing fee. It's just because we have the processing fee just because if the card declines, we, it just takes us work to go redeem it. And then you get your service interrupted and you have trash sitting around. So it's honestly in everyone's best favor. It's like, honestly, no one ends up paying it. They just give us two forms.

• 37:10Speaker 01

  Okay.

• 37:10Alex Hormozi?

  Oh, thanks.

• 37:11Speaker 01

  The, um, so I did actually do that. And when I got the, uh, the prices book that you gave at the workshop.

• 37:17Alex Hormozi?

  Yeah.

• 37:17Speaker 01

  And so I kind of messed it up. I did like two things. I did like an annual fee.

• 37:22Alex Hormozi?

  Yeah.

• 37:22Speaker 01

  And then I also mentioned, oh yeah, we're also doing a credit card fee, which is really, I was too much.

• 37:27Alex Hormozi?

  Yeah, too many things. Yeah.

• 37:28Speaker 01

  Yeah, but I did that and just, I was looking into how to add the processing fee. And like, you have to like go to Mastercard and Visa and all that stuff. And is that true? Or like they're, they were saying like you have to legally go to these companies.

• 37:40Alex Hormozi?

  True.

• 37:42Alex Hormozi?

  I don't, I think you can just charge 3% more.

• 37:43Speaker 01

  Oh, we can just do, okay, okay.

• 37:44Alex Hormozi?

  And just say, this is our fee.

• 37:46Speaker 01

  Okay.

• 37:46Alex Hormozi?

  You can charge whatever fees you want. Check with your legal counsel.

• 37:49Speaker 01

  Yeah.

• 37:50Alex Hormozi?

  Okay.

• 37:50Speaker 01

  Yeah.

• 37:50Alex Hormozi?

  Great. Uh, and then three right now, we'll keep it at, um.

• 37:56Alex Hormozi?

  We'll keep it at the three month rate, which is gonna be thirty five, right? Which is one oh, shit, what is that? Thirty, one oh five, right? But we'll still waive the forty nine dollar fee.

• 38:11Speaker 01

  Okay.

• 38:14Alex Hormozi?

  This one waive is, waive's bin and fee. I think, right? That we have?

• 38:23Speaker 01

  Yes.

• 38:24Alex Hormozi?

  So this gets the discount, so this gets you the discount and the bin and the fee. So it's like, what, you're like, how, why is it, so it's like, the effective rate here is thirty? Thirty five? And then here it's also thirty five, but.

• 38:48Alex Hormozi?

  Bin, how are we gonna, how are we gonna do the bin? How are we gonna work that? We're close. This is honestly the most important thing of today. Like, we nail this, you go all in on door to door, we can get there by the end of the year.

• 39:01Speaker 01

  Exactly.

• 39:01Alex Hormozi?

  And you're set. So I just wanna like, make sure we nail this. What else do you think is?

• 39:05Speaker 01

  So with the bin, are you saying that they pay the full one sixteen upfront?

• 39:09Alex Hormozi?

  I would love that.

• 39:10Speaker 01

  Okay. But like, for this one, I guess, cuz this is not waived with this, with this offer.

• 39:15Alex Hormozi?

  Well, what if, so if you didn't have the bin, right? What would their actual rate be? So what do you charge people who don't, who provide their own bin?

• 39:22Speaker 01

  Yeah, the bin is like a few, if you, I mean, depreciating it over its.

• 39:27Alex Hormozi?

  No, not that depreciation. I mean, like, well, what, okay, fine. You do, you appreciate it for what, three years, it would, so it is?

• 39:31Speaker 01

  They have a ten year warranty on them, so.

• 39:33Alex Hormozi?

  So ten years is what you'd appreciate it over? So you paid, it's like a dollar a month or something like that.

• 39:37Speaker 01

  A few cents, yeah.

• 39:38Alex Hormozi?

  Yeah. How's it a few cents?

• 39:42Speaker 01

  Yeah, cuz over like.

• 39:43Alex Hormozi?

  Well, a hundred sixteen months.

• 39:45Speaker 01

  So you're doing that math wrong?

• 39:46Alex Hormozi?

  Yeah, it'd be, it'd be dollars, nonsense.

• 39:48Speaker 01

  Yeah, maybe we're doing that wrong.

• 39:50Alex Hormozi?

  Well, twelve months times ten is a hundred twenty. It's a hundred sixteen dollar bid. So it's ninety whatever cents per month. Okay, so it's a doll, it's a buck. They don't know that you do that, though.

• 40:02Speaker 01

  No.

• 40:03Alex Hormozi?

  So that's the thing. So like, that's like, that's, that's one-sided information. Don't worry, we'll cut most of this thinking time out. To figure it out.

• 40:10Speaker 01

  Yeah.

• 40:10Alex Hormozi?

  No, but I wanna, I, I, I think the magic is in this bin. I actually think that that's, I think that's where the real leverage is.

• 40:16Speaker 01

  Okay. It is something I've been wrestling with, because initially, when we were doing it, and we didn't have a competitor, we were like, charging ninety-nine. And they were like, okay, fine. But then some people balk at it, and I'd be like, okay, fine, we'll waive it. But most people would pay for it. Um, but now that it's really competitive, there's like, I'm gonna go to this other guy who's giving me three months free, eighty-nine, and I just have to pay for the quarter, so.

• 40:36Alex Hormozi?

  Yeah.

• 40:37Speaker 01

  So it's become a little bit more challenging in that sense. Doesn't mean we can't do it.

• 40:40Alex Hormozi?

  Yeah.

• 40:41Speaker 01

  But that had, that has been something I, I've done in the past.

• 40:46Speaker 01

  I think most people were, I kind of played with ninety-nine, and then I went down to fifty, and most people were like, they didn't really care about fifty as much, but then like, when I did.

• 40:56Alex Hormozi?

  Cause I like, so I like, I mean, you're, you're currently charging nothing.

• 40:59Speaker 01

  Yeah.

• 40:59Alex Hormozi?

  So if we said, okay, upfront, we have a forty-nine dollar bin fee, right?

• 41:05Speaker 01

  Yeah.

• 41:05Alex Hormozi?

  You can buy the bin for forty-nine bucks. We know that it doesn't matter, right? We're just adding, adding money. So they'd be like, eh, it feels reasonable, right? Forty-nine bucks for the bin. And it's forty-nine dollar initiation. I don't know, I'm just coming up with this. Okay, it's forty-nine dollar initiation.

• 41:23Alex Hormozi?

  And then you have your first quarter, which is, let's just use your old pricing.

• 41:28Speaker 01

  Mm-hmm.

• 41:29Alex Hormozi?

  Eighty-nine. So that would give us a one-ninety. We still have commissions.

• 41:34Speaker 01

  Yeah.

• 41:38Alex Hormozi?

  But this bin isn't a real cost, because it's gonna cover towards forty-two dollars for the quarter. That, we're, we're calling it the bin fee, but it's really covering our labor for the first quarter.

• 41:48Speaker 01

  Right.

• 41:51Speaker 01

  Well, that's clever, yeah.

• 41:51Alex Hormozi?

  And our initiation is actually our commission.

• 41:55Speaker 01

  Mm-hmm. Mm-hmm. I got you, yeah.

• 41:59Alex Hormozi?

  And then our eighty-nine is, hopefully, our margin.

• 42:05Alex Hormozi?

  This feels okay. Do you think you can sell this?

• 42:12Speaker 01

  I think, I think people will be really upset with the extra forty-nine.

• 42:17Alex Hormozi?

  The initiation?

• 42:18Speaker 01

  Yeah, I think they understand the bin.

• 42:20Alex Hormozi?

  Well, why don't we do this?

• 42:21Speaker 01

  Yeah.

• 42:23Alex Hormozi?

  Like, we can either, basically, would you think they'd be more comfortable paying ninety-nine bucks for the bin?

• 42:28Speaker 01

  And they own it?

• 42:29Alex Hormozi?

  Yeah.

• 42:31Alex Hormozi?

  It's your bin, you keep it forever.

• 42:32Speaker 01

  Yeah.

• 42:33Alex Hormozi?

  Unless you cancel, of course. In which case, we can take it back.

• 42:36Speaker 01

  Yeah. Yeah, I mean, I think that... I'm just, like, replaying anecdotal experiences.

• 42:43Alex Hormozi?

  Yeah, no, no. Take your time.

• 42:46Speaker 01

  I'm just worried people would be like, "Yeah, it's, that's a deal breaker for me. Like, I, I won't pay that for, for the bin, even if I own it. I just don't want to have to provide it."

• 42:56Alex Hormozi?

  Yeah, but what percentage?

• 42:57Speaker 01

  You're right. I think it'd only be like twenty-five percent or something. I just always remember the negative, right?

• 43:01Alex Hormozi?

  Of course. Yeah, no, I get it.

• 43:03Speaker 01

  Yeah.

• 43:03Alex Hormozi?

  The thing is, is all the new sales guys coming in aren't gonna know anything.

• 43:06Speaker 01

  Right.

• 43:07Alex Hormozi?

  In terms of like what status quo is. So you're like, "Here's the deal, guys." Like, "You're gonna get paid fifty bucks on each one of these." And you gotta, you gotta collect two things. You gotta sell them a bin, they gotta pay their first quarter. That seems pretty straightforward. And we can waive the initiation fee.

• 43:22Speaker 01

  Yeah. And, and we still do the three months free with this, or no?

• 43:25Alex Hormozi?

  Yeah, I think you can still do the three month, the three months free.

• 43:27Speaker 01

  Okay. I don't hate that. And do, just to clarify for myself, so the bin, it's actually theirs now? So they're actually paying for it?

• 43:34Alex Hormozi?

  Well, it's one sixteen, right?

• 43:36Speaker 01

  Yeah.

• 43:36Alex Hormozi?

  Yeah, so why not? Now, if they, if they cancel before their term, then take the bin back.

• 43:41Speaker 01

  Right.

• 43:42Alex Hormozi?

  Which gives you another piece of collateral.

• 43:43Speaker 01

  Yeah. Okay.

• 43:45Alex Hormozi?

  So all in, you lose sixteen bucks on the bin, who cares?

• 43:47Speaker 01

  Yeah, yeah, exactly.

• 43:48Alex Hormozi?

  So I think, I think if you go, you sell them the bin, you have this,

• 43:54Alex Hormozi?

  you have the first three months, right? First...

• 44:01Alex Hormozi?

  Quarter.

• 44:03Speaker 01

  And we're, we're in good shape with that?

• 44:06Alex Hormozi?

  And this factors, and then you have, you give them one free month the next, each of the next quarters?

• 44:10Speaker 01

  Yeah.

• 44:11Alex Hormozi?

  And then, that means that you're charging them, what, sixty on Q two, Q three, Q four?

• 44:17Speaker 01

  Exactly. Fifty-nine and some change.

• 44:20Alex Hormozi?

  Got it.

• 44:27Speaker 01

  And so how do we handle situations where they were like, I'm not gonna buy your bin?

• 44:32Alex Hormozi?

  So you can provide your own.

• 44:33Speaker 01

  Okay, and so we just wouldn't accept them as a customer?

• 44:35Alex Hormozi?

  Yeah, because I mean, you can provide your own if you want.

• 44:37Speaker 01

  Yeah, okay.

• 44:40Alex Hormozi?

  You could, if you wanted to, say, if you're not willing to do that, we'll finance it over three years, but we end up charging you 150.

• 44:46Speaker 01

  Hmm, I like that. Yeah, I really like that.

• 44:48Alex Hormozi?

  Because then it gives you a three-year term.

• 44:50Speaker 01

  Yep, okay.

• 44:53Speaker 01

  And then with the three-year term, budget in like, I don't know, add in like a, I don't know, 4% price increase each year?

• 44:59Alex Hormozi?

  Okay.

• 45:02Speaker 01

  I think that's it.

• 45:03Alex Hormozi?

  Feels doable.

• 45:03Speaker 01

  Yeah.

• 45:04Alex Hormozi?

  I still want to get this anchor, though, because we still want to, because some houses are like, fine, just if I could build me ones, I don't, I don't care about this.

• 45:10Speaker 01

  Exactly, yeah.

• 45:11Alex Hormozi?

  Yeah, and so it's like, start at 360, it's a yes for the year. Okay, so we're getting close. We're gonna do it, we're gonna do a cleaner, a cleaner next version of this, alright? So, alright, I want to think through it real quick. So, this is the core offer, right? We're bringing this up, but it's like 99 bucks for the bin, 89 for the first quarter, you still get your three months free.

• 45:29Speaker 01

  Mm-hmm.

• 45:30Alex Hormozi?

  Cool, that's fine. I still want to start higher, because even if we get 20% of people to take, which we totally will, I'm telling you, we're going to, that would be really big for the business, because if we can get this on the core offer, and then we can add 80 to the average door, then that takes this, uh, so this is 190, add 80, we're at 2, we're at 270.

• 45:55Speaker 01

  Right.

• 45:55Alex Hormozi?

  Average cash collected per sale.

• 45:57Speaker 01

  Mm-hmm.

• 45:58Alex Hormozi?

  You're good?

• 45:59Speaker 01

  Yeah.

• 45:59Alex Hormozi?

  You're home free?

• 45:59Speaker 01

  Mm-hmm.

• 46:00Alex Hormozi?

  Sexy, right?

• 46:03Alex Hormozi?

  Yeah, it's way better than right now. It is way better than right now. That's, that's, that's, that's fax, F A, F A, you know, fax no printer. Okay, okay, okay. So here's, here's where this gets sexy.

• 46:13Speaker 01

  Okay.

• 46:14Alex Hormozi?

  I got it. Okay.

• 46:19Alex Hormozi?

  So, alright, okay, I think this is coming together. This is coming together. If someone, if someone paid 360 upfront, would you give them the, the bin for free?

• 46:28Speaker 01

  I think I'd do that, yeah.

• 46:30Alex Hormozi?

  Okay. Boom, I think we're just gonna have two offers.

• 46:33Speaker 01

  Okay.

• 46:33Alex Hormozi?

  Keep it super simple. We're gonna have 12 months.

• 46:37Alex Hormozi?

  And with 12 months, they're gonna be at $30, right? And they're gonna pay 360 in total. But free $99 bin. So they don't have, they don't have to pay that.

• 46:53Speaker 01

  Right.

• 46:55Alex Hormozi?

  Great. And then the core offer is gonna be three months at 30. But they have to pay for the $99 bin.

• 47:07Alex Hormozi?

  And three months upfront. So all in, they're looking at 180, one night, whatever, 189.

• 47:18Alex Hormozi?

  So now, look at that AB offer.

• 47:21Speaker 01

  Yeah.

• 47:22Alex Hormozi?

  So would you rather pay 360, pay for the year, I'll give you the bin, it's on me? Or 189, you just pay the first quarter, but you just gotta pay the bin, right?

• 47:30Speaker 01

  Yeah, I like that. And we just gotta hustle.

• 47:33Alex Hormozi?

  Yeah, but the nice thing is that this keeps it super simple. The billable is the same. All we're debating is who gets the free bin and who doesn't. You get the free bin when you commit for the year. Cause listen, it costs me money to do this, but if you commit for that period of time, I'll throw it in, right? Like, it actually cost us 116. So like, I'll be, like, we, we actually lose a little bit of money on these bids.

• 47:51Speaker 01

  Okay, yeah.

• 47:53Alex Hormozi?

  But if you're committed to us, we'll commit to you.

• 47:54Speaker 01

  Yeah, exactly.

• 47:57Alex Hormozi?

  And then our breakdown is, let's say, now let's look at the math. So let's say 80% take our 189 dollar offer. And then 20% take our 360 offer. Equals $72. And this equals services. Michael, Jamie, Jamie!

• 48:28Alex Hormozi?

  Well, it's 19.2 is 270. It's $27 off this, which is 162.

• 48:43Alex Hormozi?

  So we add this together.

• 48:49Alex Hormozi?

  Average per door.

• 48:53Alex Hormozi?

  And we needed 208.

• 48:59Speaker 01

  Yeah.

• 49:00Alex Hormozi?

  And then your home free.

• 49:07Alex Hormozi?

  Doable?

• 49:07Speaker 01

  Yeah, I just never thought about it that way.

• 49:09Alex Hormozi?

  You still get three, you still get three, like, the offers are banging.

• 49:12Speaker 01

  Yeah.

• 49:13Alex Hormozi?

  It's like you get three, like, the offer is great because you're given three months for either way.

• 49:16Speaker 01

  Yeah.

• 49:16Alex Hormozi?

  So I would, now I think you've got this great feel, right?

• 49:21Alex Hormozi?

  You say, listen, we're gonna give you three months for either, right, just because you're switching to us. So we're happy to do that. But if you're willing to commit to a whole year, give you the bin.

• 49:28Speaker 01

  Right.

• 49:30Alex Hormozi?

  If you don't want that, no worries. We'll get you set up.

• 49:33Speaker 01

  Yeah.

• 49:33Alex Hormozi?

  Yeah.

• 49:40Alex Hormozi?

  What are you gonna do? What are you gonna do with all this money?

• 49:43Speaker 01

  Yeah, I don't know.

• 49:44Alex Hormozi?

  All right, so that's, that's the, that's the play. That's the play.

• 49:48Speaker 01

  Okay.

• 49:48Alex Hormozi?

  And for, for our folks at home, the reason that that was so important is that we needed to get above $208 because he had a $50 commission that he has to pay.

• 50:03Alex Hormozi?

  And we knew we had $42 of labor.

• 50:08Alex Hormozi?

  And we know that he had these bins that he's been basically fronting the cost for, for customers. Now, to be clear, as of right now, what was the other cost, though? There was something else? There's labor, there's commission, and there's something else?

• 50:20Speaker 01

  No, I think it was just bins.

• 50:21Alex Hormozi?

  Oh, so I'm just being greedy. That works, okay. So then we got, yeah, yeah, well, I like to have, I like to grow businesses debt-free. If I can.

• 50:28Speaker 01

  Me too.

• 50:28Alex Hormozi?

  Because I just think there's, there's always a way, if you just think about it hard enough. And so the bin, which right now he's been financing over 10 years for $116, but when we add all these things together, we get to 208. And so in a perfectly debt-free, cash flow positive way of growing the business, we have to get, on average, over $208 to, to break even upfront and have really high, really strong cash flow for the business, which has been the biggest constraint for you. So getting above that is the objective. And so what we did was we solved for it by having an anchor on the top that we know 20% of people are gonna take. And that contributes an extra $72 a door where the core offer is gonna be 190, which already solves this. Mm hmm. Cool. So that's for everyone back home. Okay.

• 51:12Alex Hormozi?

  Now let's go back to our handy dandy. Isn't this fun? It's a lot of fun.

• 51:21Alex Hormozi?

  Okay. So we have our, our new offer, our 360 for 12, our 12 at, at 360. And then we have our 3189. Money. And if you really get wild with that and you're like, you know what? I don't need all the extra cash. So you can pay the guys a hundred bucks a day. A hundred bucks a deal. And they'll be willing to sell. If you're like, you know what? I don't need all the cash. Like, I'd rather just get more aggressive on the spend. Yeah. You can get way better guys. If the guys can make, I'll tell you the difference in salesmen that you can get at $500 a day, $15,000 a month, almost $200,000 a year. Like a different, an order of magnitude better salesperson. The thing is, those guys might be doing like, and that order of magnitude better salesperson might do 10 deals a day. Yeah. Because the guys who really do door to door, they run between doors. Really? A hundred percent. Okay.

• 52:06Alex Hormozi?

  Cause they know it's a numbers game. Yeah. They're like, for every 12 doors I knock on, I'm gonna get a sale. So if I run, I mean, that's why the UPS guys, like the guys who are commissioned and are really understand the game, they sprint back and forth. Because you can cover four times the doors just by walking fast. They cut across the lawn. They don't go on the, on the sidewalk. Like they're moving. Okay. So we're going scatter. We're going door to doors, our channel. We have our offer, our 12, our AB offer, which is great. The extra guys get the bin. Awesome. And now we don't even have to have a financing partner. Yeah. And if you want, you can, and just collect the cash. The, the next thing is let's talk about sales process.

• 52:50Alex Hormozi?

  On how we're going to teach these guys. Okay, how do you teach your guys right now and what's the sales process?

• 52:55Speaker 01

  Pretty relaxed. I mean, he's the first guy I've done, so I just, I just take him door to door, show him how I do it. And I generally tell him.

• 53:01Alex Hormozi?

  He's just right next to you?

• 53:02Speaker 01

  Pardon me?

• 53:02Alex Hormozi?

  He's right next to you?

• 53:03Speaker 01

  Yes, exactly.

• 53:04Alex Hormozi?

  Okay.

• 53:04Speaker 01

  Yeah, and then I'll do that for a few times, show them how it works, show them how to get a few sales. And then I watch him do it and let him just kind of go at it and then chime in if I need to. And then eventually just kind of like give them critiques wherever I see.

• 53:17Alex Hormozi?

  How many doors can you knock a day?

• 53:19Speaker 01

  I think, I think easy like 150.

• 53:22Alex Hormozi?

  Okay.

• 53:22Speaker 01

  If you're out there for eight hours.

• 53:24Alex Hormozi?

  Yeah, so 150 doors, if he's closing, I mean, if he gets to what you're doing, one out of 12.

• 53:29Speaker 01

  Yeah.

• 53:29Alex Hormozi?

  Right, then he's closing more than 10 deals a day. Which is chill, even at 50.

• 53:35Speaker 01

  That's what I hear on average, like conservatively you can get 10.

• 53:38Alex Hormozi?

  Yeah.

• 53:38Speaker 01

  But most guys get 15.

• 53:40Alex Hormozi?

  Yeah, so the nice thing with your business is that you're going to be in person with them. And so you, you, there's basically two primary ways that people learn. One is modeling and the other is basically doing it. So children learn through modeling, they watch you do something and then they learn it, right? Alternatively, you take it up a notch when you give feedback. And so doing role plays like in very real time with them is going to be the fastest way to speed up the loop.

• 54:05Speaker 01

  Okay.

• 54:05Alex Hormozi?

  So it's literally just like have the door at your facility, whatever like, I mean, you want to, you really want them to get them in the like, in the mechanics of I say this as the door opens, like it will, it will teach them, like, don't just stand next to them. Like, close the door, open the door, close the door, open the door, close the door, open the door, until they just nail it every time. Because you know, the first five seconds of them opening the door is like, that's the only shot you really have. And they're making their split second decision. And so it's like, you have to drill the opener super hard so they can just say it in their sleep and they say it the right way every time. But they should absolutely be following a script. And for this type of sale, this script, I mean, how long does it take you to do a sale for these?

• 54:41Speaker 01

  Two minutes?

• 54:41Alex Hormozi?

  Yeah, right. So they're not super hard sales.

• 54:43Speaker 01

  Yeah.

• 54:43Alex Hormozi?

  And so the sales script is gonna be like four questions.

• 54:46Speaker 01

  Yeah.

• 54:46Alex Hormozi?

  It's not a lot.

• 54:47Speaker 01

  Yeah.

• 54:47Alex Hormozi?

  Right? And so it's just like, cool, here's our door, here's our knock, here's our open. And then question one, question two, close question, overcomes. Like, that's it. And so I just drill, honestly, drilling the three or four questions is not gonna be tough.

• 54:59Speaker 01

  Mm-hmm.

• 54:59Alex Hormozi?

  Then you're just gonna do traditional sales training where you're just gonna be like, I have to think about it, I'm not sure, I have to check with my spouse, like, oh, I don't have the, the card that I want on me.

• 55:07Speaker 01

  Yeah.

• 55:07Alex Hormozi?

  And when you're, when you're collecting, do you have a lot of people, do you have any people who are like, oh, I don't have the card that I wanna use on me?

• 55:14Speaker 01

  So we actually don't collect money at the door.

• 55:16Alex Hormozi?

  Why?

• 55:17Speaker 01

  We have a contract that we sign.

• 55:19Alex Hormozi?

  Okay.

• 55:20Speaker 01

  I heard that it was a, I don't know, I, I just heard that it was, you have to have certain permits to collect money at the door, so then I don't have that permit yet.

• 55:28Alex Hormozi?

  But they put a credit card number down, right?

• 55:30Speaker 01

  No.

• 55:31Alex Hormozi?

  What?

• 55:32Speaker 01

  And we're still get, but people are still signing up.

• 55:34Alex Hormozi?

  What percentage of people who sign contracts don't end up giving you the card?

• 55:39Speaker 01

  Uh, none of them, really.

• 55:40Alex Hormozi?

  Alright.

• 55:41Speaker 01

  If we haven't, I mean, we haven't done the volume we're, we're talking about right now.

• 55:44Alex Hormozi?

  Yeah.

• 55:45Speaker 01

  So I'm sure there would be a ton of people.

• 55:47Alex Hormozi?

  Okay. So you then call them back later?

• 55:50Speaker 01

  I send them an invoice, and then if they don't complete it, I'll follow up and.

• 55:54Alex Hormozi?

  And everyone pays?

• 55:55Speaker 01

  Yeah.

• 55:58Alex Hormozi?

  What are we doing, Michael? We should be selling, we should be selling trash. What are we doing?

• 56:03Speaker 01

  Well, they need it, yeah, I mean.

• 56:04Alex Hormozi?

  Yeah. Well, if it's not a constraint, then I'm not gonna mess with it. But I do think you probably tighten the sales process in terms of the training.

• 56:09Speaker 01

  Yeah.

• 56:09Alex Hormozi?

  That's absurd, uh, what you just said. I, I don't know in terms of compliance for that, so check with an attorney, but I'm, I'm pretty sure you can just ask someone to buy something.

• 56:18Speaker 01

  Okay.

• 56:18Alex Hormozi?

  I'm like, pretty, like, feel pretty confident.

• 56:22Speaker 01

  Yeah.

• 56:23Alex Hormozi?

  But, but, but, you know, it hasn't been an issue. And so if you really do collect a hundred percent, it's certainly a less friction, a lower friction sale. But a contract without a payment clause, that means nothing. So.

• 56:35Speaker 01

  Yeah.

• 56:36Alex Hormozi?

  The fact that you're getting it is great. The fact that you're getting is great. Okay. Let's pull up the ads in the funnel real quick. Okay. So, yeah, just go, just go funnel. Sorry, ads, sorry. Okay. So I think, I think this is fine. I read the copy. I think it, it, it checks the boxes in terms of a normal offer. Uh, the video ad that I saw, that was your best performer, was unsurprising to me that it was the best performer. Bottom link.

• 57:04Speaker 01

  There you go.

• 57:04Speaker 02

  If you're a homeowner in Centerville, Chancilly, Clifton, or Fairfax, and you want to save hundreds on your trash collection this year, this is for you. My name is Philip and I'm the owner of Garbys Gold Services. We're a local, family-owned and operated business in the Centerville area. And we're here to help take care of your trash. So if you're tired of things like increasing bills every year, crazy prices, unreliable pickups, then we might be the ones for you to help give you some more consistency, ease of mind, and stress-free trash collection. If that sounds good to you, click the link down below so we can give you a quote for trash collection in your area so you can start saving money and stop worrying about your trash collection.

• 57:45Speaker 01

  It's so cringe.

• 57:46Alex Hormozi?

  No, it's your highest performing ad. The thing is, it seemed authentic.

• 57:49Speaker 01

  Yeah, oh yeah.

• 57:50Alex Hormozi?

  And it also hit the core pieces, like, this is for so-and-so. I do think you introduced yourself first rather than talking about them. But, like, you can, you can, I would probably make it offer-driven first. Pain, pain of like, hey, what you said at the end, like, hey, if you're tired of X, Y, and Z, blah, blah, blah, I'm so-and-so.

• 58:07Speaker 01

  Okay.

• 58:07Alex Hormozi?

  Because it's like, leading more with the things that they're interested in. And so, basically, I would just flip the script on that and then I would record 10 different versions of that with you in different shirts, in different backgrounds, with the truck, with a bin behind you, with a neighbor behind you. Like, I would just do as many variations of that. If I was going to do paid ads, but we're not going to do that because we're doing door-to-door.

• 58:26Speaker 01

  So you're going to just cut it off completely?

• 58:27Alex Hormozi?

  I just don't think you need it. I think all of your attention should go to, I need to get 10 guys that are commission-only that are going to sell this offer.

• 58:34Speaker 01

  And just only focus on that?

• 58:35Alex Hormozi?

  Yeah, that's it. I mean, like, if we only have one thing to be true in order for this business to be profitable, then let's just pick that and then just put all of our effort on that one thing. I mean, fundamentally, it's the idea of leverage.

• 58:46Speaker 01

  Yeah.

• 58:46Alex Hormozi?

  It's like, find the one thing that gives you the greatest output. It also has no risk on cash flow for you because they're commission-only.

• 58:52Speaker 01

  Yeah.

• 58:57Alex Hormozi?

  The perfect solution doesn't nix.

• 59:00Speaker 01

  Except when it does.

• 59:02Alex Hormozi?

  That was it. AV offer, 12 month, 3 month, 20% take the 12, 80% take the main. We're cash flow positive on both. You don't even need to go into debt for the, the bins.

• 59:13Alex Hormozi?

  You get 10 guys closing 5 deals a day, 50 deals a day.

• 59:17Speaker 01

  That's it.

• 59:18Alex Hormozi?

  Yeah.

• 59:19Speaker 01

  And then.

• 59:20Alex Hormozi?

  And it's way, way easier to close in solar. You can probably get some of those guys. They're just tired. It's like, dude, you're like, it's, it's such a, such a better life to, to just know you're going to close deals every day. Rather than be like knocking doors for 5 days and closing one or two.

• 59:33Speaker 01

  Yeah.

• 59:33Alex Hormozi?

  Like, it's a much more, you know, energizing way to live.

• 59:38Speaker 01

  Yeah, no, for sure. I think my next constraint would be then getting the sales guys.

• 59:42Alex Hormozi?

  Yeah, let's talk about that.

• 59:43Speaker 01

  Yeah.

• 59:44Alex Hormozi?

  So, right now, so I would say if, like, you can handle more volume, right? You don't have to really change anything by infrastructure to handle the volume that you'd be getting from these sales guys.

• 59:55Speaker 01

  I think after a certain point, we would need to get another truck.

• 59:57Alex Hormozi?

  Well, let's, we'll deal with that. So, to get to your 3,000, whatever it was, number, how much can you take? If you were full capacity, how many customers can you, can you handle?

• 1:00:06Speaker 01

  I think we could do 3,500.

• 1:00:07Alex Hormozi?

  Okay.

• 1:00:08Speaker 01

  Yeah.

• 1:00:08Alex Hormozi?

  I mean, dude, like 3,500, we had 1,000 more customers to sell.

• 1:00:11Speaker 01

  Yeah.

• 1:00:11Alex Hormozi?

  So you gotta sell, I mean, in 6 month, let's call it 5 months, that's 200 customers, that's 7 customers a day. I mean, you're, if you get a second guy, I'll be doing that.

• 1:00:19Speaker 01

  Right.

• 1:00:20Alex Hormozi?

  In 6 months.

• 1:00:21Speaker 01

  Could be me.

• 1:00:21Alex Hormozi?

  Yeah, could be you.

• 1:00:23Speaker 01

  Yeah.

• 1:00:23Alex Hormozi?

  Alright, so, yeah, this can be an issue. Because, I mean, do you have the cash to get buy another truck?

• 1:00:31Speaker 01

  I think I could figure out a way to get one.

• 1:00:32Alex Hormozi?

  Okay.

• 1:00:33Speaker 01

  Yeah.

• 1:00:34Alex Hormozi?

  So, the way to do it is, I, I think that you could, given the nature of this job, I would be looking at running like Indeed Ads slash Craigslist.

• 1:00:42Speaker 01

  Yeah.

• 1:00:42Alex Hormozi?

  That would just probably be the easiest thing for you to do. And then you just need to work these like it's a lead funnel, right? And so like, if you're not getting people, so, it'd be like, like, you have to think about this like as a true ad. So a lot of people will try to like ward people off. It's like, dude, it's an ad. It's the same thing. It's like, you're gonna run an ad, you have to have a headline, it has to be appealing. The cop, the body copy has to be interesting, which is like, hey, you can work 4 hours or 8 hours a day, the guys who work 8 hours make this, the guys who work 4 hours do this. Instead of the other alternatives you have of like, you have to be able to ask 4 questions to somebody at the door. Like, break it down to what they're gonna have to do. It's like, if you can memorize 4 questions. Then you could be able to make a six-figure or multi-six-figure per year income, as long as you're willing to be in the street, but then add damaging admission. It's like, hey, sometimes it can be hot, sometimes it can be cold.

• 1:01:27Alex Hormozi?

  That's the trade. But if you're somebody who's like, just barely graduated high school, we don't care about your grades. We care about your work ethic.

• 1:01:35Alex Hormozi?

  Like, I think that would attract plenty of people. And so just add Indeed, and those ones already have kind of like applicant funnels that are built into it. And so basically, if we're turning off all these extra things that you're spending all this time, like fragmented time on, this is all you do. You go get salespeople. And honestly, all you need, you need like two guys, just to get this going.

• 1:01:57Alex Hormozi?

  That's it.

• 1:01:57Speaker 01

  That makes a lot of sense.

• 1:01:58Alex Hormozi?

  Baby offer, two guys, four questions. That's it, let's go.

• 1:02:03Speaker 01

  Yeah, I've been doing Indeed ads, but I haven't been structuring it like that. Yeah, exactly. It's been more just like the traditional, like, corporate.

• 1:02:12Alex Hormozi?

  Yeah, but the thing is, you have to think about who's responding to this. Write it to the salesman.

• 1:02:16Speaker 01

  Right.

• 1:02:16Alex Hormozi?

  Because that's who you're trying to attract. Like, what are all the things that either hate about your current job, or you hate about your current sales job? Both of those are the pains. What's the promise? You can make six figures, you know, a year or more, and you can work four or eight hours a day. I'll take you on either. So some guys will work, you know, seven to noon or seven to 11:00, and then they go to their other job by noon and they work, you know, 12 days because they're providing for family. So this is a great opportunity for you.

• 1:02:40Speaker 01

  I'm going to work on that immediately, yeah.

• 1:02:44Alex Hormozi?

  So I'll give you the truth about this. So for a job where someone's coming in commission only, my bar is relatively low, because I'd rather give more people the opportunity to take a shot and like prove that they have work ethic, rather than they have the skill of interviewing, which is a different skill. I basically would just screen for crazies. No, I'm serious, I would just screen for crazies, and because if you're going to do this, you're probably going to get a lot of applications. Definitely don't do one-on-one interviews. You're going to be doing group calls. So a bunch of people on, two minutes, tell me who you are, two minutes, two minutes, two minutes, whatever. And then invite the ones who seem normal to your, you know, your warehouse or whatever. Meet them in person, give job offers on the spot, tell them they can start.

• 1:03:21Speaker 01

  Okay.

• 1:03:22Alex Hormozi?

  I just don't think you have to overcomplicate this.

• 1:03:24Speaker 01

  Yeah.

• 1:03:24Alex Hormozi?

  And so it's like, cool, what we're gonna do is we're gonna do shadow for a week. And then we're gonna break you off in twos. And then that's it, like you're good to go. And the thing is serious, like if you wanted to like. This is, this is me talking about how you aggressively scale sales, like you need like two guys.

• 1:03:38Speaker 01

  Yeah.

• 1:03:38Alex Hormozi?

  So like.

• 1:03:39Speaker 01

  Yeah.

• 1:03:39Alex Hormozi?

  Get on a group call, talk to a bunch of them, the guy who seems cool and normal and hardworking. Invite two or three of those guys out because a bunch of them aren't gonna, aren't gonna last. Right. Cause it is door to door and there are, there are some risks there. And so like, maybe it's higher five to get one.

• 1:03:52Speaker 01

  Okay.

• 1:03:53Alex Hormozi?

  Just lower the bar, like you're not looking for somebody to cure cancer here. You need someone to ask four questions and build a photo for.

• 1:03:58Speaker 01

  Yeah, definitely. Cause I mean, like I said, me, I'm not like the best salesman in the world, but I can go up there and sell.

• 1:04:04Alex Hormozi?

  But you think it's, you seem trustworthy.

• 1:04:06Speaker 01

  You think so?

• 1:04:07Alex Hormozi?

  Yeah.

• 1:04:07Speaker 01

  Okay.

• 1:04:07Alex Hormozi?

  So. And you're also the business owner, so it's like.

• 1:04:10Speaker 01

  That, I think that's a big.

• 1:04:11Alex Hormozi?

  You have star power.

• 1:04:12Speaker 01

  Yeah.

• 1:04:12Alex Hormozi?

  So with them though, I think what the, the one thing that I'm looking for is hunger.

• 1:04:17Speaker 01

  Yeah.

• 1:04:18Alex Hormozi?

  And so I think that'll typically skew to either young, single guys. Who are just like really hungry and like go getters. Or people who just are about to have like a kid on the way, like you are, you're more hungry now than you probably were. Right. Cause you're like, cause you have to be.

• 1:04:31Speaker 01

  Yes.

• 1:04:31Alex Hormozi?

  It's like, you know why married, uh, married men with kids make more money than guys who are single without being married and don't have kids?

• 1:04:40Alex Hormozi?

  Because they have to.

• 1:04:40Speaker 01

  Yeah.

• 1:04:41Alex Hormozi?

  That's why they make more money.

• 1:04:42Speaker 01

  I mean, yeah.

• 1:04:43Alex Hormozi?

  So they're, they literally choose to make more money because they have no other choice.

• 1:04:46Speaker 01

  Yeah, that's, that's definitely how I feel.

• 1:04:48Alex Hormozi?

  Yeah, right. And so you're doing it. So basically like, I just look for someone's circumstances of like, why do they need this? If someone's like hungry, then I'm, especially in a job like this, this is so work ethic driven. They're not gonna run out of houses.

• 1:05:01Speaker 01

  Yeah. For sure.

• 1:05:02Alex Hormozi?

  Right.

• 1:05:03Speaker 01

  So would you say I should just not do any more door to door and just train the guys?

• 1:05:07Alex Hormozi?

  Well, I think you, I mean, you're gonna be doing door to door.

• 1:05:09Speaker 01

  Okay.

• 1:05:10Alex Hormozi?

  In the training.

• 1:05:10Speaker 01

  Okay, yeah.

• 1:05:11Alex Hormozi?

  So your sales isn't gonna go down, you're just gonna have more people so you can duplicate it.

• 1:05:13Speaker 01

  Right, okay. Makes sense.

• 1:05:15Alex Hormozi?

  Two birds on stone.

• 1:05:16Speaker 01

  Yep.

• 1:05:17Alex Hormozi?

  Basically, as far as I'm concerned, I want you to keep doing door to door. Because if you've got your guy and you've got you, you guys start doing ten, ten deals a day, just you two. You're at three hundred a month. You need, in three months, you're at your thousand. Forget everything else. In three months, you're a thousand.

• 1:05:33Speaker 01

  Yeah.

• 1:05:34Alex Hormozi?

  Right? But as far as you're concerned, I don't think you should ever do something alone.

• 1:05:39Speaker 01

  Okay.

• 1:05:40Alex Hormozi?

  So you have this skill set. You should have somebody always watching you so that you're basically, you're getting, you're getting two birds on one stone, right? You're getting, you're double dipping on effort.

• 1:05:48Speaker 01

  Yeah.

• 1:05:48Alex Hormozi?

  So someone's always with you because you're the lead salesperson and they're learning until eventually somebody else is the best salesperson. You pass out, you, you know, you step back Homer Simpson style into the bushes and then they, they slide up and then they become lead trainer. And if you want, you say, hey, I'll give you 60 bucks a sale instead of 50 because it's a little harder to have somebody else with you.

• 1:06:04Speaker 01

  Right. Makes a lot of sense.

• 1:06:07Alex Hormozi?

  Easy.

• 1:06:08Speaker 01

  Yeah.

• 1:06:10Alex Hormozi?

  Cool. I feel like this is it. So let's, let's do a quick recap here.

• 1:06:13Speaker 01

  Yeah.

• 1:06:13Alex Hormozi?

  Let's do a quick recap and we'll prioritize it, but it's going to be an easy list. Simple, not easy. How about that?

• 1:06:18Speaker 01

  Yeah.

• 1:06:20Alex Hormozi?

  All right. So make it blue for you, Michael. All right. I know Michael really wanted the blue. He's like, all right. So the first thing we're going to do is we made the decision to go scatter as our avatar. All right. So that's decision number one, which we just did instantly, but there we go. Number two is we switched our offer. So we have now an A B offer. For offer for three months free. And so offer A is going to be 189. And then 60 per month after that.

• 1:06:58Alex Hormozi?

  And then offer B is 360 free bid. That's our deal.

• 1:07:06Speaker 01

  Yep.

• 1:07:08Alex Hormozi?

  Three. Indeed ads. I'd also hit up your network. You only need a couple, right? Indeed ads into group. Call. Or you can just honestly invite them all in person if you want, but sometimes people are really crazy. So the two minute, you know, call in person. And then tag along. And roll flag until your eyes bleed.

• 1:07:37Alex Hormozi?

  And the nice thing is that basically Document, dev, or sheet duplicate is the process that we use. And so like the document is like you have the script. They memorize it while you're walking between doors. You're just like you're role playing it back and forth. What do you say? What do you say? What do you say?

• 1:07:48Speaker 01

  Yeah.

• 1:07:49Alex Hormozi?

  Demonstrate, you do it in front of them. Hey, watch me follow the script. Watch me close deals. Now duplicate, you knock, I'll be here. I'll ride shotgun and I'll watch you do it. So you can give immediate feedback.

• 1:07:58Speaker 01

  Okay.

• 1:07:59Alex Hormozi?

  That's it.

• 1:08:00Speaker 01

  And then in terms of.

• 1:08:06Alex Hormozi?

  I mean shit, what like what's the, what's the outcome of this? The outcome of all of this is that your cash flow positive.

• 1:08:17Alex Hormozi?

  And babies have food.

• 1:08:25Speaker 01

  Smiley face. Yeah.

• 1:08:31Alex Hormozi?

  Yeah. Feel better?

• 1:08:33Speaker 01

  Does this feel clear?

• 1:08:34Alex Hormozi?

  It does. Yeah.

• 1:08:37Alex Hormozi?

  That's it.

• 1:08:38Speaker 01

  Yeah. Give me instructions and I'll go.

• 1:08:40Alex Hormozi?

  That's it. So all you have to do. And the nice thing is one and two is instant.

• 1:08:42Speaker 01

  Yeah.

• 1:08:43Alex Hormozi?

  You literally just have to do this.

• 1:08:44Speaker 01

  Right.

• 1:08:47Alex Hormozi?

  Go hire five more sales guys.

• 1:08:50Alex Hormozi?

  I think this is the, this is the play.

• 1:08:52Speaker 01

  Yeah. I think so too.

• 1:08:55Alex Hormozi?

  Doesn't this feel like, like the noise in the world like quiet?

• 1:08:58Speaker 01

  I think I was doing way too much.

• 1:08:59Alex Hormozi?

  Of course you were doing way too much.

• 1:09:00Speaker 01

  I think I was like.

• 1:09:00Alex Hormozi?

  You have two different advertisers and five different acquisitions process.

• 1:09:02Speaker 01

  Yeah.

• 1:09:05Alex Hormozi?

  When there's just one that if we just did this well.

• 1:09:08Speaker 01

  Yeah.

• 1:09:08Alex Hormozi?

  We can solve the cash flow issue. And we can hit your, hit your extra thousand in the next like 90 days.

• 1:09:15Speaker 01

  Yeah.

• 1:09:17Alex Hormozi?

  It's a quarter. It's nothing.

• 1:09:19Speaker 01

  Mm hmm.

• 1:09:21Alex Hormozi?

  Feel good?

• 1:09:21Speaker 01

  I appreciate it.

• 1:09:22Alex Hormozi?

  That's what we, we'd get through it.

• 1:09:24Speaker 01

  Yeah.

• 1:09:24Alex Hormozi?

  And so Phillip, I'm rooting for you. If you enjoyed this and you want to see a different business that went from negative to positive in one conversation, check out this conversation with Alexi Amar. He's a legal person who does legal things for musicians so that they can get contracts and incorporated and whatever musicians do to make money.