Seasonality Isn’t a Problem, It’s a Profit Opportunity | Ep. 952

Join Alex Hormozi Live At The Scaling Workshop In Las Vegas: https://www.acquisition.com/o-vegas How do you double revenue without reinventing your business model? In this episode, Alex Hormozi reveals how the predictability of seasonal fluctuations can be a massive advantage if you know how to scale it. Alex breaks down how to make more money by doing less and focusing on what’s already working. From the Theory of Constraints to cracking PPC and Meta ads, his insights will show you how to grow a seasonal business with predictable cycles without the typical stress and distractions. YouTube Timestamps 00:00 Does catering have to be seasonal? 02:58 Why PPC and SEO are the main growth channels 04:00 Volatility vs. risk: embracing predictable business cycles to scale 06:30 Theory of constraints: why saying "no" is necessary for success More Value: Download your free personalized $100M scaling roadmap in under 30 seconds: https://www.acquisition.com/roadmap?el=yt-alex-486r&htrafficsource=youtube Discover The Easiest Business I Can Help You Start (Free Trial): https://www.skool.com/hormozi Get the $100M Book Bundle: https://shop.acquisition.com/pages/100m-book-bundle Take the $100M Lead Generation Course: https://www.acquisition.com/training/leads?hsLang=en Learn How to Make Offers People Cannot Refuse: https://www.acquisition.com/training/offers?hsLang=en 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?

  All right, let's rock. Revenue, business, and problem.

• 0:05Speaker 01

  My name is Matthew. I sell premium catering experiences to private clients looking to celebrate milestone events in Sydney.

• 0:12Alex Hormozi?

  Great.

• 0:12Speaker 01

  We do about 2.8 million this year with 40% net profit.

• 0:16Alex Hormozi?

  Woo!

• 0:16Speaker 01

  We'll like to be at 8 million in two years.

• 0:18Alex Hormozi?

  Let's go.

• 0:18Speaker 01

  The main constraint seasonality, so we do about 65% of our annual revenue in six months, and if I don't solve this, I either say no to demand in summer, or I am over-started in winter.

• 0:30Alex Hormozi?

  Yeah. So, one thing right off the bat, I will say is that this is a feature, not a bug, of the industry that you're in, right? Same thing as lawn care guys, same thing as guys who do snow plowing. It's just a, it's a super common thing. Swimming pools sometimes, obviously, in the summer. So, like, there, there are industries that are just going to be more smoothies if you have summer versus Italian ice story. Like, there's a lot, right? That are seasonal. Now, couple of questions. So, catering, what is your, what is your hot season again?

• 0:55Speaker 01

  Pretty much September through February.

• 0:58Alex Hormozi?

  Okay. And so, from now until September is when it's slow?

• 1:03Speaker 01

  Yes.

• 1:03Alex Hormozi?

  So, what, why are people not celebrating from now until September? Actually, I'm not even sure.

• 1:08Speaker 01

  It's not a festive season. I think, yeah, it's, it's not, it's not as much of a festive season. I think people don't spend as much money going through winter. I don't know if any of that has to do with...

• 1:19Alex Hormozi?

  But you still have like...

• 1:20Speaker 01

  ...me in general.

• 1:21Alex Hormozi?

  East, uh, don't worry about the economy. They, whatever. I'll just remove economy from, from Lexington. There's nothing you can do about it. So, okay. So, people don't do Easter, you don't do corporate events?

• 1:32Speaker 01

  We do do corporate, yes. So, we target corporate through winter more so. They have better lifetime value, but they have lower spend per, per event, which lowers gross profit. So, we do market more or less exclusively to, to private.

• 1:44Alex Hormozi?

  Okay. I'm just like, it actually doesn't sound like you're actually in that seasonal of a business. People have like...

• 1:51Alex Hormozi?

  I mean, I started with that, but like catering happens year round. I mean, shoot, I cater every single week.

• 1:56Speaker 01

  Yeah, so we we do large events, so typically kind of sixty to a hundred people.

• 2:00Alex Hormozi?

  Mm hmm.

• 2:01Speaker 01

  In the year, like birthday parties, engagements, weddings, they're all year round. Um, but a lot of the corporate rush that comes through in summer for end of year staff parties, uh, things of that nature, that's what it takes us like well beyond our capacity, which gives us that busy season and then through winter, we just, we lose a lot of that.

• 2:19Alex Hormozi?

  You subsist in the not, in the off season, correct? You like lose money or break even in the off season?

• 2:25Speaker 01

  No, no, we're still profitable. We have a really good, we have strong gross profit and strong margins, so we're still good.

• 2:30Alex Hormozi?

  Okay.

• 2:30Speaker 01

  I'd just like to make more money.

• 2:32Alex Hormozi?

  Yeah, okay, got it. Um, okay, so a couple of things. So currently, how are you getting customers?

• 2:39Speaker 01

  We have really strong organic SEO and we also do a lot of Google Ads.

• 2:44Alex Hormozi?

  Okay.

• 2:45Speaker 01

  That's the most, that's their domain channels. So we have probably fifty percent organic, uh, probably forty percent organic, forty percent ads, twenty percent for.

• 2:53Alex Hormozi?

  Okay.

• 2:54Speaker 01

  We do some top of funnel meta, but it's less tracked. Um, it's more of a brand awareness.

• 2:58Alex Hormozi?

  Got it. So SEO and PPC kind of, kind of rule, rule the day. Okay. So what stops you from spending more PPC? Are you maxed out? Like, is it stopping profitable? Like, what's, what's stopping you there?

• 3:09Speaker 01

  Search volume and lead quarterly drops through winter.

• 3:12Alex Hormozi?

  Okay.

• 3:12Speaker 01

  Uh, back to LTV still a strong, we're at a twelve to one, so we can just spend more.

• 3:17Alex Hormozi?

  Uh huh.

• 3:17Speaker 01

  I'm trying to find my, my, I guess my constraint or my, my question. My main question becomes, I have considered popping up a corporate delivery, like a, um, prepackaged, like typical corporate catering setting.

• 3:31Alex Hormozi?

  Mm hmm.

• 3:32Speaker 01

  Through Yacht Chat to be a kind of entity under catered by Matt, which would be a year round service, because they have a very inverted, um, seasonality to the event side.

• 3:41Alex Hormozi?

  Yeah.

• 3:41Speaker 01

  We're like the corporate to order in more of that delivery, but it's, it's, I don't want to get distracted. Like I'm watching all your content. I don't want to chase the woman in the red dress.

• 3:49Alex Hormozi?

  Yeah.

• 3:49Speaker 01

  It's a whole new business.

• 3:51Alex Hormozi?

  Yeah, well, I guess the problem that we're trying to solve here, like you are profitable, you're running 40% even in the fact that there's on and off cycle. So to grow the business, we could ignore the fact that it's lumpy. I'll give you two examples of this. So Harry and David's, it's a chocolate company here in the US, does like 100% of their annual profit in the month of December. And then the other 11 months of the year, they have their mall location and they just lose money. That's number one. Others, if you look at like insurance, right? Insurance makes money every year and then every eighth year, there's a hurricane Katrina and they lose a bunch of money. And so I think what we need to replace is the difference between volatility and risk. So you can have something that is volatile, but not risky.

• 4:35Alex Hormozi?

  So insurance is volatile, but not risky. Same as this chocolate thing. It's volatile and the fact that it changes a lot month to month to month, but it's not risky because it's predictable. You know that every season this is going to happen. And so if we know it's going to happen, then we can predict it. If we can predict it, we can plan for it, right? So all that to say, if we change nothing about the business, but you simply did twice as much, what stops you from doing that?

• 4:58Speaker 01

  Nothing.

• 5:00Alex Hormozi?

  Okay.

• 5:01Speaker 01

  Everything's quite efficient, to be frank. We can just spend more, hire more.

• 5:07Alex Hormozi?

  Well, then I think you have that answer. I think what feels annoying is you just wish that, you know, if you're Harry and David's, you wish that the other 11 months of the year, people celebrated chocolate as much, right? But you're just gonna have a slow season and a hot season and that's fine. Especially since you're not losing money in the off season. So I don't think you actually have a big problem to solve here. I think we just need to do more what's working.

• 5:29Speaker 01

  Hmm.

• 5:32Alex Hormozi?

  I wish I could pull some magic business model out of a hat, but if you're profitable all the months of the year and then some months you just make more money, that just sounds like a business that has a predictable cycle.

• 5:42Speaker 01

  Right.

• 5:43Alex Hormozi?

  I mean, think about the alternative. It could be unpredictable. That would suck.

• 5:48Speaker 01

  Yeah, no, it's almost predictable to the descent, to be honest, it's pretty consistent. I've been trying to contemplate like how to get around this without actually starting a new business. And I was just, I've been thinking about it for a couple of years. I thought maybe Alex would figure something out, but maybe it is just that it's just a feature.

• 6:06Alex Hormozi?

  No, what I would like to do is just focus all of your time on not trying to solve that problem and solving the more important problem, which is like, how do we double PPC and probably get meta ads going? Like, if you did nothing else this year, doubled PPC and just cracked meta ads, you'd hit your goal.

• 6:22Speaker 01

  Yeah.

• 6:22Alex Hormozi?

  So it's like, if you can double the business doing one thing, why do four?

• 6:26Speaker 01

  Yeah, touche.

• 6:27Alex Hormozi?

  Right?

• 6:28Speaker 01

  Yeah.

• 6:29Alex Hormozi?

  That's it, man. I mean, the whole point of the theory of constraints is focus. And it's just being able to say all the things you say no to. Like, there are such limited resources in a small business, the biggest one being your time, your effort, and your mental bandwidth. If you can just say like, "I'm not looking at this anymore because this is just a feature of my business, and I'm so grateful because all my competitors will be distracted by the shiny object." Like, let them worry about that while you just keep crushing it. End them.

• 6:53Speaker 01

  Okay.

• 6:54Alex Hormozi?

  Cool?

• 6:55Speaker 01

  Yeah, cool. Thank you.

• 6:56Alex Hormozi?

  Appreciate you, man. Congratulations.

• 6:58Speaker 01

  Thank you.

• 6:59Alex Hormozi?

  All right. Thanks, brother. Talk soon.

• 7:01Speaker 01

  Bye bye.

• 7:02Alex Hormozi?

  Toodle-oo. Toodle-oo, as they say.