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Hey everyone, it's Mike Andes, and this is a special episode because it's actually part of a in-person seminar that I recently did.
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And it includes not just home services, but a vast variety of different industries, including a coffee shop, bookkeeping, dog breeding, and the list continues on.
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A variety of questions I've never answered before.
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Hopefully they're helpful for you.
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Sales, marketing, and some material.
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What are like top three books, top three podcasts you've learned about?
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my business that uses Facebook right now Instagram and we have a website yeah so first in terms of books I would say $100 million offers is what it's called I'd recommend that I would say from a social media perspective
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If you have a local business, you really want to focus on being the mayor of your town.
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What I mean by that is when you go on Instagram or you go on Facebook and you post, you are marketing to the entire world.
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But you can't serve the entire world if you are serving coffee in Bellingham.
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So I don't care about anything besides what's happening in Bellingham.
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And so what you actually are trying to do is become like the local newspaper or the local mayor that kind of digests everything in your local community and people look to you as the resource for information in that market.
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And so on my social media, I only talk about lawn care, landscaping, and home services.
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Because that is what only people I'm trying to target.
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I'm not trying to target politics and health.
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I'm not going after this.
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I'm going after my market.
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And so I would just recommend if you have a local business, you go very narrow and become the local mayor of your town.
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So if something crazy, like a massive crash happens, you're taking pictures, and you just synthesize it for your local market.
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They begin to know, like, and trust you.
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And the goal of social media with a home service business or a local business in general is, my only goal is for them to trust me.
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Because if they trust me, they will buy from me.
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So I do plumbing on the side.
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So for like, I should probably focus on sales.
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So the key things for that would be, so I got a website that's good.
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And then for like, I guess the thing that does like the, biggest bang for the buck for like cheap, what would it be?
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Door to door, going door to door, flyers, or what would you suggest?
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Who are you selling to?
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Are you selling to contractors or are you selling to homeowners?
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I guess it would be both, but...
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Okay.
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Who do you want to sell to?
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Homeowners?
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Okay.
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What value do you offer to them?
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Fixing or installing, whatever.
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Okay.
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Which one do you prefer doing?
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Install them.
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I guess, Renos.
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Renos?
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Great.
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Is that usually going to be a subcontracting position, though?
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Yeah.
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Subcontracting.
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Like, usually they're a contractor that's subbing out the plumbing to you?
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Usually it would just be a homeowner that's just
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OK, great.
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So I would be going into, I'm just going to make you very tactical instead of broad.
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So I would be going into neighborhoods that are 40 to 50 years old, when I know plumbing usually starts breaking down, and when there's a market where there's a lot of money moving into it, and they're doing renovations.
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So if you go in the middle of July, down certain neighborhoods, there is contractors in every other house because they're doing renovations, decks, all sorts of improvements.
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I'm just hitting those markets.
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I'm not gonna go after a new build construction.
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They just had their plumbing done.
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They're not gonna think about it for 20 or 30 years.
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And so being very focused in terms of what my market is.
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Like most people think about it, what's the marketing channel I need to use?
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Like door hangers, flyers, every door, direct mail, Facebook, what do I do?
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If you have the right audience, you can sell anything.
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If I sell this water to people that are parked and haven't drank for three days, they will pay more for it.
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So I should find that audience instead of trying to think about, how do I reach everyone and try to sell them water?
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I just need to find the right audience.
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And so the vast majority of us just need to figure out, where's the starving crowd that I can sell a hot dog to?
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Instead of, how do I sell hot dogs to everybody?
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Just figure out who really needs your service and then go after them.
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And so I would be really looking at neighborhoods that have a certain,
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specifically with plumbing, when people switch away from copper or certain types of galvanize the pipes, that's like a certain age of house.
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And so when you're hitting that, that's my opportunity.
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So I am literally looking on Zillow.
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When are these track houses?
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These were all built in 1970.
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Great, that's a great opportunity.
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I know that they're getting leaks.
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There are furnaces.
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I just did a plumbing company the other day, and I said the only thing I wanted them to focus on was replacing hot water heaters.
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I said, instead of telling people about tank, their ad was like, tankless water heater this, and all this stuff, I'm like, no one cares about it.
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They care about there's a ticking time bomb in their 50-year-old house downstairs, that if it blows up, it's gonna cost $50,000 worth of damage.
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And by the way, yes, you can fix it for $3,000, but why not just go to this tankless model?
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Well, what does tankless mean?
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That doesn't mean anything to me as a homeowner.
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And so there's your upsell.
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It's like, you have a ticking time bomb.
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Let's solve that right now.
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And so if I was you, I'd be going to markets where you know they're hot water heaters giving out based upon the date of the build.
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And I'd be pitching all of them on you have a ticking time bomb in your house.
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Door hangers knocking on doors, every door direct mail.
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You go to a very local.
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You do next door.
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Even on Facebook ads, it would work.
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I'm just going to target the areas of my city, though, where I know the building construction is lining up with a replacement of their water heater.
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And I'm going to try to convince them that you don't want the ticking time bomb.
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I don't want to replace that ticking time bomb.
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You want a tankless water heater.
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And then you go from a $3,000 ticket to a $6,000 ticket.
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How do you increase the quality in the prairie, like,
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Saturated?
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No, a very niche business, like .
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How do I, like, I originally, what I originally just recreated our website and started ranking it in bigger cities.
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The issue is that people started thinking that we had a location in those bigger cities.
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So I got to make it clear on the website, like, no, our main location is in Bernal, Washington, but we service all over the US.
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But that still hasn't really increased our view.
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So I actually don't believe you have a lead quality problem.
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You have a lead volume, a number of leads problem, that if you had enough leads, if you had 1,000 leads, lead quality would be like, I'm just going to filter them all out.
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And you would just create filters.
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Like you would say on the website, are you willing to spend at least a minimum order of X amount?
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And you would weed people out.
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So lead quality is not the problem.
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Lead volume is still the problem.
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Because if you had 1,000 times more leads and only 1 out of 10 were good, you would find 100.
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Okay?
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And so I think it's much more a function of your offer to them.
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What are you trying to solve for them?
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And really, I think the part we've talked before, getting crystal clear what your ICP, your ideal customer profile is.
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Really crystallizing that and then finding out where they're at.
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I would venture to believe there are less than 10,000 people that can even buy from you.
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or that you would want to buy from, or that you would want to buy from you.
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And so that's when you have a market that small, a total address market, TAM, when you have a market that small, you call them.
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And you just one by one by one hustle them.
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Yeah, so what Krim's talking about is business to business or B2B.
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He only has so few customers that he can even come to him and do business with him.
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And if you have a very small total address market, I'm not going to do Facebook ads.
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I'm not going to go up to the entire world.
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And even if I try to filter them down, like there's tens of thousands of them versus like, oh, I literally have the contact list of the 100 people that can buy from me.
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Just go through those.
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So, for example, Johnny, like, there's only so many welding shops that I can work for.
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Great.
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Let's get the list of 300 in the local area in greater Vancouver area, and I'll just work my way down the list.
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I will email them.
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I will text them.
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I will walk into their shop.
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And so getting, like, business-to-business communications is very different than a business that you can sell things like products online.
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The state of Starbucks now are obviously more...
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If you are doing that, you make more.
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So outsourcing to the Philippines or India, how do you do that safely and legally?
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In terms of the X's and O's of legally, talk to ChatGPT.
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It'll give you the exact things to do.
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Specifically in bookkeeping and tax, your clients have to fill out a certain form in the U.S. that allows you to be able to say, someone else is going to look at this.
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So we have home service CPA.
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So we have other people we delegate their tax return to.
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We have to have them sign something saying that we're going to do that.
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That's the X's and O's of legally.
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In terms of the $100 per hour, let's say they're $20 an hour.
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The thing that you're taking on is management gap.
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So you're not gonna make 80 an hour because you have to manage them to some extent.
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And the challenging part with outsourcing overseas is the management is higher because there's gaps in their knowledge, there's words.
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It's like we have people in the Philippines, we have to teach them what lawn and grass is.
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So the training gap is much higher.
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They don't get colloquialisms over the phone, so you've got to train them more.
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So there is always, there's cost to everything, and it's not always monetary.
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And if you're going to get someone oversees, your costs are going to be much more in your time to train them.
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So it's something to keep in mind.
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I think that if your cost financial will be greater in the States, but your cost on training will be less because they will probably have a QuickBooks certification.
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They will have English nailed down.
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They'll be able to communicate with the customer directly versus through you.
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And so sometimes it's easier to start with on the U.S. side before you have systems in place because down the road you have systems in place, and a lot of those things can be – you can take the hit on the management side in exchange for the less financial.
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This one I don't expect you to really know, but –
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when you're talking about roofs and upselling or recurring, I was thinking the same thing.
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She said, what would you do?
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If I'm breeding puppies, a puppy's going to live 15 years.
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Hey, let's go.
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15 years a customer.
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Let's go.
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Outlive some of your customers.
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Well, how am I going to get recurring pets?
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People do come back to me for a second, but it's years and years later.
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So what service are you offering for the dog thing?
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I'm breeding.
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Oh, breeding.
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So it's not daycare or anything like that.
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It's not training.
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It's not, it's basically a breeding of these.
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upsell that?
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How do you recruit and sell that?
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OK, so what's some of the pains of someone who has a bred dog?
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Like, do they ever contact you after they buy the dog?
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I stay in contact with everybody.
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OK. And what are you solving for them?
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Like, what's the problem they're having?
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Yeah, we just stay in touch.
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And if we have problems with behavior or if they're having health problems or whatever, they'll ask me.
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Great.
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So for the person who's buying a new dog, what are some of the stresses they're having?
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Like what are they afraid of?
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The dog is going to die.
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The dog is going to be unhealthy.
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You've bred them incorrectly.
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This is great.
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This is great.
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Really easy.
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So on a typical dog purchase, because I'm not in the dog world, what's the cost?
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We don't even like dogs.
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Oh, this is all the same stuff.
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Lawns, roofs, dogs.
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Let's go.
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I didn't even know this.
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How much does a dog usually cost?
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Great, and okay, that's easy.
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So I would be trying to get $1,000 a year in recurring for every person I sell, I almost said a truck, a dog to.
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And so that's about $100 a month.
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I think that you could create a concierge service that you sell people to buy a new dog and say it is cheaper for you to have this service than to go to a vet.
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I am not a vet, but I am going to be able to service this dog very well because I literally made the dog.
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And so they have anxiety around they haven't seen the dog for the first few months.
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They don't know everything about this dog, especially if they're a first-time dog owner.
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Sort of a first-time homeowner.
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OK.
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First-time dog owner, they're a little bit worried and stressed.
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And so I would be trying to build a package that they subscribe to that you can produce value.
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It'd be around things like consultation in person.
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I would do an in-person looking at their surroundings
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At their house, they probably have a kennel.
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They probably have a dog feeding station.
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They probably have certain things.
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You would do an inspection, and you would sell that as part of the subscription.
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Every six months, we come, and I will assess everything.
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I'm going to assess the dog's living conditions, the health of the dog, X, Y, and Z.
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And this is way cheaper than going one time to a vet.
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And so you're going to think of all their pain points as a dog owner, and you're going to solve every single one, but put them on a recurring subscription.
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So it's going to be quarterly or biannual, six months, visiting their house.
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That's a huge value that they can't go on ChatDVT for.
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There's things like health-wise, they could just go on ChatDVT and figure it out.
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Inspecting their house is a whole other level.
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And I think you'd actually enjoy it.
223
00:13:08.001 --> 00:13:11.244
Meeting them, seeing the dog again, seeing what their surroundings are.
224
00:13:11.484 --> 00:13:14.327
So I think it'd be helpful, useful, and you'd enjoy it.
225
00:13:14.727 --> 00:13:22.775
And I think you could really sell it on a $4,000 ticket to say 2% a month, come back to me, and save yourself money against the vet, and I'm going to make sure this dog stays healthy.
226
00:13:22.795 --> 00:13:24.436
I think that's been slammed on.
227
00:13:24.456 --> 00:13:26.418
One other little thing there.
228
00:13:26.458 --> 00:13:28.760
So if I'm working with a full-time dog,
229
00:13:30.442 --> 00:13:31.943
I'm always going to come in and work.
230
00:13:32.063 --> 00:13:33.644
It'll be after 4 o'clock, whatever.
231
00:13:33.764 --> 00:13:35.605
Do you contract?
232
00:13:35.625 --> 00:13:36.866
I guess I'll find out.
233
00:13:36.906 --> 00:13:37.506
Do you contract?
234
00:13:37.526 --> 00:13:38.627
Is that okay with contractors?
235
00:13:38.707 --> 00:13:40.328
Is that okay with homeowners?
236
00:13:40.348 --> 00:13:43.170
I think it's probably my experience so far.
237
00:13:43.830 --> 00:13:45.771
They're more okay with homeowners.
238
00:13:45.791 --> 00:13:46.772
Contacting them after hours?
239
00:13:46.812 --> 00:13:48.853
Contacting them and then working after hours.
240
00:13:49.013 --> 00:13:49.874
Do you actually work?
241
00:13:50.234 --> 00:13:56.658
I would imagine most contractors don't care about you working after hours, but you probably won't get a hold of them if you call them at 6 p.m.
242
00:13:57.792 --> 00:14:02.215
less likely that you have the 1% ratio.
243
00:14:02.736 --> 00:14:03.376
Yeah.
244
00:14:04.597 --> 00:14:05.338
I got a question.
245
00:14:05.378 --> 00:14:05.598
Yeah.
246
00:14:05.618 --> 00:14:19.008
So for a business that is like a support business, OK, so say like a bunch of bad shops, your supervision can help for X amount of time, two weeks a month, whatever, however long you're scheduling.
247
00:14:19.028 --> 00:14:21.089
Then so you're pitching that as a business.
248
00:14:21.830 --> 00:14:26.313
Then the problem that I haven't figured out how to solution for it yet is,
249
00:14:26.815 --> 00:14:29.182
So you have like six clients and you're their support person.
250
00:14:29.222 --> 00:14:30.266
They call you and they need you.
251
00:14:30.667 --> 00:14:32.873
But what if two customers need you at the same time?
252
00:14:33.435 --> 00:14:34.498
You sell priority service.
253
00:14:36.167 --> 00:14:41.710
So you say, hey, here's our packaging for pricing for two weeks, four weeks, six weeks, and eight weeks.
254
00:14:42.371 --> 00:14:47.974
And if you want a higher tier of service, which is you're prioritized above everyone else, here's this other subscription.
255
00:14:47.994 --> 00:14:51.576
You sell one of those, but you're making an extra $2,000 a month for doing nothing.
256
00:14:51.596 --> 00:14:53.557
Yeah, then you could also hire someone.
257
00:14:53.577 --> 00:14:54.657
That would be the next step.
258
00:14:54.697 --> 00:14:56.398
You're getting so many leads you can't.
259
00:14:57.559 --> 00:14:59.740
Now you get a second and a third person that wants the priority service.
260
00:14:59.760 --> 00:15:02.040
You hire someone knowing that your margin is twice as much.
261
00:15:02.320 --> 00:15:04.741
Yeah, I understand that, but it's mainly an issue if you're a one-man show.
262
00:15:04.801 --> 00:15:05.762
That's what I'm saying.
263
00:15:05.782 --> 00:15:06.702
You can only do one.
264
00:15:06.822 --> 00:15:15.905
If you do sell priority in this case, like, I will drop everything and be at your shop within eight hours of any call, that is very valuable to certain sectors, and they're willing to pay twice as much.
265
00:15:16.505 --> 00:15:17.865
So when I say $2,000, that's probably too low.
266
00:15:18.305 --> 00:15:22.307
It's probably like, hey, there's a $2,000 package, $4,000 package, $6,000, $8,000 package.
267
00:15:22.427 --> 00:15:26.728
Add three grand to any of those, and I will be at your service within eight hours of any service.
268
00:15:28.460 --> 00:15:31.761
on a monthly basis because they can't guarantee any work.
269
00:15:31.981 --> 00:15:38.683
Unless they have PO, they've got funding, they're not gonna commit to $2,000 a month or whatever.
270
00:15:39.263 --> 00:15:45.904
But if it's, for example, if it's an hourly rate, you would just put that in the hourly rate if they were to call you.
271
00:15:48.902 --> 00:15:50.143
You know what I mean?
272
00:15:50.363 --> 00:16:00.110
I 100% agree with what you're saying, but what I'm trying to do is get recurring revenue and guaranteed income instead of when they call you, you're like, yeah, I'm making more money for the next few hours.
273
00:16:00.690 --> 00:16:01.551
I want it locked in.
274
00:16:01.631 --> 00:16:03.952
And because you're only selling one, there's way more value.
275
00:16:04.293 --> 00:16:04.993
You just be honest with me.
276
00:16:05.013 --> 00:16:06.114
Hey, I'm doing this on the side.
277
00:16:06.294 --> 00:16:07.395
You're hiring me part-time.
278
00:16:08.555 --> 00:16:09.476
I have other customers.
279
00:16:10.076 --> 00:16:14.840
If you want to be put to number one, this is the equivalent of you go to Disney and pay twice as much to cut the line.
280
00:16:15.800 --> 00:16:19.682
Say, I got one customer that I'm willing to serve at this premium price.
281
00:16:19.722 --> 00:16:22.663
It's X amount per week, X amount per month, or however you set it up.
282
00:16:23.043 --> 00:16:26.025
And you just immediately go to the front of the line, regardless of what job I'm on.
283
00:16:26.988 --> 00:16:33.269
And that also sets up the expectation that they don't accept that, you might have to walk off the job because there's someone else that is higher priority.
284
00:16:33.309 --> 00:16:38.430
Because I agree with the rate thing, but the problem with that rate thing is if you're not on an emergency job, you're not making that money.
285
00:16:38.550 --> 00:16:39.911
I want it to be where that's locked in.
286
00:16:40.371 --> 00:16:45.052
And if you're serving five, six customers, I believe there's one that's like, hey, if we call you, we want you here now.
287
00:16:45.072 --> 00:16:55.574
I feel like it's a little bit too saturated to like, present a company like that with like, pay me like a monthly rate when there's like a million other contractors making it.
288
00:16:56.526 --> 00:16:59.295
you know, call it, it's a very saturated market rate.
289
00:16:59.898 --> 00:17:03.861
So I like that idea, but I feel like it wouldn't really work.
290
00:17:04.062 --> 00:17:05.563
I wouldn't use hourly rates either.
291
00:17:06.083 --> 00:17:07.304
I would productize the service.
292
00:17:07.885 --> 00:17:09.266
So you give bundles of hours.
293
00:17:09.646 --> 00:17:11.808
So for example, right now, let's say you're $200 an hour.
294
00:17:12.128 --> 00:17:13.950
I'm not going to say, hey, I'm $200 an hour.
295
00:17:14.030 --> 00:17:21.036
I'm going to say if you buy a bundle of 40 hours in a month or 20 hours in a month or 80 hours in a month, you get a certain price.
296
00:17:21.456 --> 00:17:23.798
And it's a bundle, which means if you don't use it all, that's fine.
297
00:17:24.039 --> 00:17:26.160
Which means your pricing will actually go down per hour.
298
00:17:26.941 --> 00:17:32.164
So instead of charging $200, so say, for example, if you buy 40 hours, I'm not going to charge you $8,000.
299
00:17:32.184 --> 00:17:33.525
I'm going to charge you $6,000.
300
00:17:34.605 --> 00:17:36.606
And in their head, they're like, oh, it's $150 an hour.
301
00:17:37.007 --> 00:17:39.528
You know they're not going to use all 40 hours in the month.
302
00:17:39.888 --> 00:17:42.610
So you sell packaged goods, like a package of hours.
303
00:17:42.630 --> 00:17:43.690
You see what I'm saying?
304
00:17:44.070 --> 00:17:45.891
And then it gives incentive for them to buy more.
305
00:17:46.332 --> 00:17:48.473
It locks in how much revenue you're making so it's not as lumpy.
306
00:17:48.953 --> 00:17:52.095
And you know exactly what your schedules are going to look like because you're selling packages of hours.
307
00:17:52.175 --> 00:17:56.177
And then on top of that, you could just offer that premium service to one only customer.
308
00:17:56.868 --> 00:18:05.451
And I genuinely believe you would get one out of five, one out of 10, they're like, yes, I'm willing to pay 20% more, but we want you here within eight hours or 16 hours of us calling.
309
00:18:05.491 --> 00:18:11.734
But I think the bigger opportunity for you is stop selling per hour.
310
00:18:11.874 --> 00:18:20.817
Sell packaged of hours and bring your pricing down, knowing they will not use all of the hours, especially because it's more like on-call slash project here, project there.
311
00:18:21.137 --> 00:18:22.518
Like, that's a horrible business to be in.
312
00:18:22.538 --> 00:18:23.158
You're selling time.
313
00:18:24.152 --> 00:18:30.137
productize the service, and then also the way to scale this is you just know your demand and how many hours on average people are using.
314
00:18:30.557 --> 00:18:32.338
And you can forecast demand now.
315
00:18:32.438 --> 00:18:33.199
You have five customers.
316
00:18:33.279 --> 00:18:35.581
On average, they get 14 hours per month, or whatever it is.
317
00:18:35.821 --> 00:18:36.622
Much more stable income.
318
00:18:37.002 --> 00:18:49.472
How can I increase my conversion rate, being that technically my clicks for copy is like, OK, the click is on Google Maps, go to high type.
319
00:18:49.492 --> 00:18:53.175
But then how can I increase the conversion rate that they actually get in the car?
320
00:18:57.274 --> 00:18:59.015
I would challenge the assumption they need to get in their car.
321
00:18:59.655 --> 00:19:01.115
Because all I need to do is give me money.
322
00:19:01.876 --> 00:19:03.436
And I can get them to give me money online.
323
00:19:04.156 --> 00:19:05.557
And this is where ordering online is a big part.
324
00:19:05.577 --> 00:19:07.297
Because your conversion rate is higher.
325
00:19:07.437 --> 00:19:08.778
They don't want to drive to your shop.
326
00:19:08.818 --> 00:19:09.538
They want a coffee.
327
00:19:09.998 --> 00:19:12.139
So I need to expedite that as much as possible.
328
00:19:12.179 --> 00:19:15.100
Just give me money and then I guarantee you they will come get it.
329
00:19:15.910 --> 00:19:16.150
Right?
330
00:19:16.450 --> 00:19:20.834
So I would think about conversion in the form of, I need a paying customer by the end of this.
331
00:19:21.554 --> 00:19:24.076
And when someone goes to your website, they're doing one of three things.
332
00:19:24.237 --> 00:19:24.957
One, look at your menu.
333
00:19:25.237 --> 00:19:26.198
Two, looking for directions.
334
00:19:26.318 --> 00:19:27.399
Three, they're looking to buy coffee.
335
00:19:28.680 --> 00:19:29.941
Ideally, all three of those.
336
00:19:30.562 --> 00:19:34.405
But like, I need to make those three things the only thing they see when they get to that page.
337
00:19:35.005 --> 00:19:35.666
I want them to order.
338
00:19:36.286 --> 00:19:37.707
I want them to get directions.
339
00:19:37.887 --> 00:19:38.748
I want them to see my menu.
340
00:19:39.308 --> 00:19:39.629
That's it.
341
00:19:39.649 --> 00:19:41.450
That would be conversion.
342
00:19:42.531 --> 00:19:43.652
And then the second part was what, sorry?
343
00:19:43.672 --> 00:19:43.812
Sorry.
344
00:19:47.517 --> 00:19:49.839
People showing up, something's not on the menu.
345
00:19:50.279 --> 00:19:51.861
It's them showing up and thinking you're too expensive.
346
00:19:52.341 --> 00:19:55.884
So for example, how often do people walk up to your thing, see the menu, and like, it's too expensive, and walk out?
347
00:19:57.926 --> 00:19:58.847
Your close ratio is high.
348
00:19:59.047 --> 00:20:01.048
Back to what we talked about at church the other day, raise your prices.
349
00:20:01.549 --> 00:20:06.033
Like raising your prices during peak time, because remember, your asset capacity, we're hitting it for three hours a day.
350
00:20:06.533 --> 00:20:07.494
We're hitting it on the weekends.
351
00:20:07.954 --> 00:20:15.641
So having surge pricing during that time because I'm already hitting capacity makes a lot of sense, especially when no one's showing up to my thing, seeing the prices, and walking out.
352
00:20:18.429 --> 00:20:21.191
And then it's also a function of how do I increase my lifetime value.
353
00:20:21.231 --> 00:20:26.515
That's when things like your loyalty program is important, your upsells.
354
00:20:26.735 --> 00:20:33.499
So I would compensate my baristas on upselling them into a second product because one product is going to give me $6 or $7.
355
00:20:33.519 --> 00:20:35.881
Two products are going to give me $15.
356
00:20:36.161 --> 00:20:38.603
The lifetime value that customers has doubled, and I didn't get any more leads.
357
00:20:39.584 --> 00:20:39.964
So when...
358
00:20:43.525 --> 00:20:51.131
So yeah, that's what I would be focused on, like improving lifetime value by raising prices during surge pricing.
359
00:20:51.692 --> 00:20:54.394
I would be doing, making it easier for people to give me money on my website.
360
00:20:54.934 --> 00:21:00.879
And then I would be doing upsell compensation for my baristas to get them a $6 into a $20.
361
00:21:04.295 --> 00:21:08.697
All of that is ancillary to, that answers the question of how do I get people to buy more from me?
362
00:21:09.157 --> 00:21:11.218
Like gift cards, you get loyalty programs, et cetera.
363
00:21:11.498 --> 00:21:20.322
But I also know that if you raise prices by 50 cents per drink during 11 o'clock to 3 o'clock on a Saturday, you're making an extra $100 for doing nothing besides changing the menu out.
364
00:21:20.342 --> 00:21:20.502
Whoosh.
365
00:21:20.522 --> 00:21:27.445
You didn't actually tell people that I'm doing that?
366
00:21:27.465 --> 00:21:27.585
No.
367
00:21:27.605 --> 00:21:27.705
More?
368
00:21:27.765 --> 00:21:27.825
No.
369
00:21:27.905 --> 00:21:33.388
Unless you start getting people saying, no, this is too expensive, and you say, great, you can come back in two hours and it's going to be cheaper.
370
00:21:34.117 --> 00:21:42.764
Because right now, the other problem is your closer is actually lower than 100% because you have people driving in, seeing five cars stacked up and driving out.
371
00:21:43.885 --> 00:21:49.730
And so whenever you have that capacity limit, I am trying to reuse price as a way to push that down.
372
00:21:52.172 --> 00:21:53.073
No one will notice.
373
00:21:53.874 --> 00:21:58.858
If they do, you tell them, hey, during the peak hours we charge a little bit more because there's so many people stacked up in the parking lot.
374
00:22:00.479 --> 00:22:01.240
Great problem to have.
375
00:22:02.672 --> 00:22:03.092
Start with?
376
00:22:03.112 --> 00:22:06.413
People, like, he has his face, and they see his prices, right?
377
00:22:06.513 --> 00:22:06.713
Yeah.
378
00:22:06.753 --> 00:22:09.213
Buying the same coffee every day.
379
00:22:09.253 --> 00:22:09.453
Great.
380
00:22:09.493 --> 00:22:16.595
Then if they ask about your pricing, you tell them, hey, during our surge hours, we have so many people here we can't serve them, so we put our prices 50 cents more per drink.
381
00:22:17.215 --> 00:22:18.935
And if you don't want that, just don't come during these hours.
382
00:22:20.235 --> 00:22:27.477
And if they put you online, say you're social, like, this is what you're afraid of, them posting on social media and saying that you guys are a bunch of greedy people, money hungry.
383
00:22:28.777 --> 00:22:30.698
And then you say, have you seen our truck?
384
00:22:30.778 --> 00:22:31.518
We just got started.
385
00:22:31.858 --> 00:22:32.619
What do you think this is?
386
00:22:33.119 --> 00:22:34.500
And everyone will be on your side anyways.
387
00:22:36.180 --> 00:22:38.741
So they can go to Woods, they can go to Starbucks and pay twice as much.
388
00:22:39.902 --> 00:22:40.542
What do you think this is?
389
00:22:40.562 --> 00:22:41.423
It's a small business.
390
00:22:42.323 --> 00:22:43.804
The worst case scenario is good for you.
391
00:22:43.944 --> 00:22:46.465
You would get a whole bunch of branding.
392
00:22:47.625 --> 00:22:51.647
I started off with subs because I don't want to do any of the ops myself.
393
00:22:52.608 --> 00:22:53.588
And the numbers are predicted.
394
00:22:58.251 --> 00:23:02.485
I know what the growth profit should come out to.
395
00:23:02.505 --> 00:23:04.612
But is that scalable?
396
00:23:04.910 --> 00:23:11.493
I guess to continue with subs everything is scalable just FYI Here's the real question.
397
00:23:11.573 --> 00:23:12.553
What do you want to build?
398
00:23:12.873 --> 00:23:14.654
Like what what's the business gonna do in 10 years?
399
00:23:14.674 --> 00:23:15.474
Like what are you trying to do?
400
00:23:15.514 --> 00:23:16.515
Are you trying to sell this business?
401
00:23:16.855 --> 00:23:17.955
Are you trying to?
402
00:23:19.276 --> 00:23:20.756
Eventually where you work four hours a day.
403
00:23:20.816 --> 00:23:22.517
What's the goal of the business?
404
00:23:22.557 --> 00:23:23.838
Probably eventually sell the business.
405
00:23:23.918 --> 00:23:29.200
So if you're trying to sell a business in five years and you
406
00:23:30.565 --> 00:23:31.365
You're good at sales.
407
00:23:32.186 --> 00:23:33.146
How good are your operations?
408
00:23:33.386 --> 00:23:34.626
Have you done the roofs themselves?
409
00:23:35.707 --> 00:23:36.027
I have, yeah.
410
00:23:36.047 --> 00:23:36.627
OK, you're good.
411
00:23:36.647 --> 00:23:42.889
OK, fastest way to money is through subs, because you're good at sales and you don't need to build the infrastructure for operations or admin.
412
00:23:43.049 --> 00:23:50.992
So the fastest way to build a $20 million roofing company, top line, that you make 10% to 20% off of, is through subcontracting.
413
00:23:52.202 --> 00:23:56.105
The question that becomes debatable is, what size of business will you build?
414
00:23:56.145 --> 00:24:05.733
If you build that operation, you build an admin, you have the employees as W2 employees, the enterprise value on that will be higher because you've built that infrastructure out.
415
00:24:06.274 --> 00:24:12.219
And so it really just becomes, are you so good at sales you'll build a $50 million top line revenue subcontracting business?
416
00:24:12.639 --> 00:24:17.583
And if you spent five years also trying to build operations admin, would it only be a $2 million company?
417
00:24:17.724 --> 00:24:19.365
Because then I want the $50 million company.
418
00:24:19.645 --> 00:24:33.760
But the enterprise value, the valuation that you will get on a subcontracting sales model, very different than when you own the brand, you own the customers, you own the employees, you have all the infrastructure built, you have customers coming in, that's a different model.
419
00:24:34.061 --> 00:24:38.225
And so your valuation, like your multiple, might be on a sales, might be...
420
00:24:39.366 --> 00:24:42.228
0.8 times profit.
421
00:24:42.708 --> 00:24:45.170
So if you made $10 million, they might give you $8 million for the business.
422
00:24:45.590 --> 00:24:53.215
Versus if you had a W-2 employees, you built all the infrastructure out, you get like 2 to 3x multiple on profit.
423
00:24:53.436 --> 00:24:57.378
So maybe you have a million dollar EBITDA, you make $2 to $3 million on the sale.
424
00:24:57.779 --> 00:24:59.860
But it just depends what you're good at.
425
00:25:00.000 --> 00:25:05.043
If you're not good at admin, you're not good at operations, in five years, do I believe you're going to build a $5 million business doing roofing?
426
00:25:05.063 --> 00:25:05.184
Yeah.
427
00:25:05.924 --> 00:25:06.565
That's risky.
428
00:25:07.186 --> 00:25:16.643
If you're so good at sales and you're like, tomorrow you know you can drive leads, get people to convert, and get those jobs off to someone else and make 10 to 20% off the top, and you could scale that really big, I'd just do that.
429
00:25:17.945 --> 00:25:18.366
Here's the thing.
430
00:25:19.290 --> 00:25:23.492
Do what you're good at because if you have the subcontracting model, you can always go back and build the infrastructure.
431
00:25:23.812 --> 00:25:33.617
If you build a $10 million roofing company that has subs, you go hire an incredible operations person for a quarter million dollars a year that's done roofing and built teams out, et cetera, and then just convert over.
432
00:25:33.777 --> 00:25:34.758
So my cousin just did this.
433
00:25:35.298 --> 00:25:42.522
He started off with subs and then moved over to actually having the team once he had the money to go afford a great operations person.
434
00:25:44.499 --> 00:25:46.701
Get the customer, because whoever has the customer wins.
435
00:25:47.321 --> 00:25:48.002
So get them first.
436
00:25:48.042 --> 00:25:54.766
I would probably say, more specifically, I would probably, if I was you, go after subs, build a huge infrastructure of how you get the leads.
437
00:25:55.047 --> 00:25:58.629
You just dial in your sales and lead funnel and pricing and the whole nine yards.
438
00:25:59.069 --> 00:26:06.895
And then if you ever wanted to convert over, you'd get an incredible operations person that's done this before and build out $10, $20 million roofing companies.
439
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You'd hire them, pay them whatever they want, and then you'd convert it into, we own the whole model now, and then your multiple will be higher on the sale.
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Hey everyone, it's Mike Andes, and this is a special episode because it's actually part of a in-person seminar that I recently did.
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And it includes not just home services, but a vast variety of different industries, including a coffee shop, bookkeeping, dog breeding, and the list continues on.
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A variety of questions I've never answered before.
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Hopefully they're helpful for you.
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Sales, marketing, and some material.
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What are like top three books, top three podcasts you've learned about?
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my business that uses Facebook right now Instagram and we have a website yeah so first in terms of books I would say $100 million offers is what it's called I'd recommend that I would say from a social media perspective
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If you have a local business, you really want to focus on being the mayor of your town.
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What I mean by that is when you go on Instagram or you go on Facebook and you post, you are marketing to the entire world.
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But you can't serve the entire world if you are serving coffee in Bellingham.
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So I don't care about anything besides what's happening in Bellingham.
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And so what you actually are trying to do is become like the local newspaper or the local mayor that kind of digests everything in your local community and people look to you as the resource for information in that market.
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And so on my social media, I only talk about lawn care, landscaping, and home services.
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Because that is what only people I'm trying to target.
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I'm not trying to target politics and health.
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I'm not going after this.
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I'm going after my market.
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And so I would just recommend if you have a local business, you go very narrow and become the local mayor of your town.
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So if something crazy, like a massive crash happens, you're taking pictures, and you just synthesize it for your local market.
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They begin to know, like, and trust you.
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And the goal of social media with a home service business or a local business in general is, my only goal is for them to trust me.
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Because if they trust me, they will buy from me.
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So I do plumbing on the side.
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So for like, I should probably focus on sales.
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So the key things for that would be, so I got a website that's good.
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And then for like, I guess the thing that does like the, biggest bang for the buck for like cheap, what would it be?
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Door to door, going door to door, flyers, or what would you suggest?
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Who are you selling to?
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Are you selling to contractors or are you selling to homeowners?
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I guess it would be both, but...
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Okay.
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Who do you want to sell to?
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Homeowners?
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Okay.
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What value do you offer to them?
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Fixing or installing, whatever.
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Okay.
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Which one do you prefer doing?
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Install them.
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I guess, Renos.
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Renos?
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Great.
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Is that usually going to be a subcontracting position, though?
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Yeah.
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Subcontracting.
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Like, usually they're a contractor that's subbing out the plumbing to you?
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Usually it would just be a homeowner that's just
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OK, great.
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So I would be going into, I'm just going to make you very tactical instead of broad.
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So I would be going into neighborhoods that are 40 to 50 years old, when I know plumbing usually starts breaking down, and when there's a market where there's a lot of money moving into it, and they're doing renovations.
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So if you go in the middle of July, down certain neighborhoods, there is contractors in every other house because they're doing renovations, decks, all sorts of improvements.
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I'm just hitting those markets.
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I'm not gonna go after a new build construction.
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They just had their plumbing done.
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They're not gonna think about it for 20 or 30 years.
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And so being very focused in terms of what my market is.
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Like most people think about it, what's the marketing channel I need to use?
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Like door hangers, flyers, every door, direct mail, Facebook, what do I do?
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If you have the right audience, you can sell anything.
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If I sell this water to people that are parked and haven't drank for three days, they will pay more for it.
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So I should find that audience instead of trying to think about, how do I reach everyone and try to sell them water?
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I just need to find the right audience.
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And so the vast majority of us just need to figure out, where's the starving crowd that I can sell a hot dog to?
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Instead of, how do I sell hot dogs to everybody?
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Just figure out who really needs your service and then go after them.
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And so I would be really looking at neighborhoods that have a certain,
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specifically with plumbing, when people switch away from copper or certain types of galvanize the pipes, that's like a certain age of house.
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And so when you're hitting that, that's my opportunity.
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So I am literally looking on Zillow.
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When are these track houses?
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These were all built in 1970.
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Great, that's a great opportunity.
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I know that they're getting leaks.
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There are furnaces.
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I just did a plumbing company the other day, and I said the only thing I wanted them to focus on was replacing hot water heaters.
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I said, instead of telling people about tank, their ad was like, tankless water heater this, and all this stuff, I'm like, no one cares about it.
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They care about there's a ticking time bomb in their 50-year-old house downstairs, that if it blows up, it's gonna cost $50,000 worth of damage.
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And by the way, yes, you can fix it for $3,000, but why not just go to this tankless model?
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Well, what does tankless mean?
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That doesn't mean anything to me as a homeowner.
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And so there's your upsell.
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It's like, you have a ticking time bomb.
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Let's solve that right now.
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And so if I was you, I'd be going to markets where you know they're hot water heaters giving out based upon the date of the build.
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And I'd be pitching all of them on you have a ticking time bomb in your house.
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Door hangers knocking on doors, every door direct mail.
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You go to a very local.
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You do next door.
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Even on Facebook ads, it would work.
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I'm just going to target the areas of my city, though, where I know the building construction is lining up with a replacement of their water heater.
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And I'm going to try to convince them that you don't want the ticking time bomb.
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I don't want to replace that ticking time bomb.
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You want a tankless water heater.
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And then you go from a $3,000 ticket to a $6,000 ticket.
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How do you increase the quality in the prairie, like,
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Saturated?
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No, a very niche business, like .
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How do I, like, I originally, what I originally just recreated our website and started ranking it in bigger cities.
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The issue is that people started thinking that we had a location in those bigger cities.
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So I got to make it clear on the website, like, no, our main location is in Bernal, Washington, but we service all over the US.
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But that still hasn't really increased our view.
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So I actually don't believe you have a lead quality problem.
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You have a lead volume, a number of leads problem, that if you had enough leads, if you had 1,000 leads, lead quality would be like, I'm just going to filter them all out.
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And you would just create filters.
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Like you would say on the website, are you willing to spend at least a minimum order of X amount?
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And you would weed people out.
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So lead quality is not the problem.
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Lead volume is still the problem.
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Because if you had 1,000 times more leads and only 1 out of 10 were good, you would find 100.
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Okay?
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And so I think it's much more a function of your offer to them.
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What are you trying to solve for them?
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And really, I think the part we've talked before, getting crystal clear what your ICP, your ideal customer profile is.
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Really crystallizing that and then finding out where they're at.
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I would venture to believe there are less than 10,000 people that can even buy from you.
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or that you would want to buy from, or that you would want to buy from you.
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And so that's when you have a market that small, a total address market, TAM, when you have a market that small, you call them.
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And you just one by one by one hustle them.
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Yeah, so what Krim's talking about is business to business or B2B.
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He only has so few customers that he can even come to him and do business with him.
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And if you have a very small total address market, I'm not going to do Facebook ads.
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I'm not going to go up to the entire world.
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And even if I try to filter them down, like there's tens of thousands of them versus like, oh, I literally have the contact list of the 100 people that can buy from me.
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Just go through those.
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So, for example, Johnny, like, there's only so many welding shops that I can work for.
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Great.
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Let's get the list of 300 in the local area in greater Vancouver area, and I'll just work my way down the list.
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I will email them.
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I will text them.
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I will walk into their shop.
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And so getting, like, business-to-business communications is very different than a business that you can sell things like products online.
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The state of Starbucks now are obviously more...
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If you are doing that, you make more.
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So outsourcing to the Philippines or India, how do you do that safely and legally?
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In terms of the X's and O's of legally, talk to ChatGPT.
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It'll give you the exact things to do.
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Specifically in bookkeeping and tax, your clients have to fill out a certain form in the U.S. that allows you to be able to say, someone else is going to look at this.
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So we have home service CPA.
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So we have other people we delegate their tax return to.
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We have to have them sign something saying that we're going to do that.
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That's the X's and O's of legally.
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In terms of the $100 per hour, let's say they're $20 an hour.
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The thing that you're taking on is management gap.
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So you're not gonna make 80 an hour because you have to manage them to some extent.
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And the challenging part with outsourcing overseas is the management is higher because there's gaps in their knowledge, there's words.
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It's like we have people in the Philippines, we have to teach them what lawn and grass is.
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So the training gap is much higher.
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They don't get colloquialisms over the phone, so you've got to train them more.
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So there is always, there's cost to everything, and it's not always monetary.
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And if you're going to get someone oversees, your costs are going to be much more in your time to train them.
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So it's something to keep in mind.
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I think that if your cost financial will be greater in the States, but your cost on training will be less because they will probably have a QuickBooks certification.
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They will have English nailed down.
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They'll be able to communicate with the customer directly versus through you.
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And so sometimes it's easier to start with on the U.S. side before you have systems in place because down the road you have systems in place, and a lot of those things can be – you can take the hit on the management side in exchange for the less financial.
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This one I don't expect you to really know, but –
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when you're talking about roofs and upselling or recurring, I was thinking the same thing.
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She said, what would you do?
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If I'm breeding puppies, a puppy's going to live 15 years.
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Hey, let's go.
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15 years a customer.
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Let's go.
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Outlive some of your customers.
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Well, how am I going to get recurring pets?
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People do come back to me for a second, but it's years and years later.
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So what service are you offering for the dog thing?
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I'm breeding.
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Oh, breeding.
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So it's not daycare or anything like that.
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It's not training.
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It's not, it's basically a breeding of these.
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upsell that?
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How do you recruit and sell that?
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OK, so what's some of the pains of someone who has a bred dog?
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Like, do they ever contact you after they buy the dog?
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I stay in contact with everybody.
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OK. And what are you solving for them?
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Like, what's the problem they're having?
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Yeah, we just stay in touch.
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And if we have problems with behavior or if they're having health problems or whatever, they'll ask me.
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Great.
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So for the person who's buying a new dog, what are some of the stresses they're having?
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Like what are they afraid of?
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The dog is going to die.
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The dog is going to be unhealthy.
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You've bred them incorrectly.
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This is great.
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This is great.
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Really easy.
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So on a typical dog purchase, because I'm not in the dog world, what's the cost?
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We don't even like dogs.
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Oh, this is all the same stuff.
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Lawns, roofs, dogs.
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Let's go.
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I didn't even know this.
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How much does a dog usually cost?
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Great, and okay, that's easy.
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So I would be trying to get $1,000 a year in recurring for every person I sell, I almost said a truck, a dog to.
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And so that's about $100 a month.
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I think that you could create a concierge service that you sell people to buy a new dog and say it is cheaper for you to have this service than to go to a vet.
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I am not a vet, but I am going to be able to service this dog very well because I literally made the dog.
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And so they have anxiety around they haven't seen the dog for the first few months.
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They don't know everything about this dog, especially if they're a first-time dog owner.
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Sort of a first-time homeowner.
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OK.
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First-time dog owner, they're a little bit worried and stressed.
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And so I would be trying to build a package that they subscribe to that you can produce value.
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It'd be around things like consultation in person.
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I would do an in-person looking at their surroundings
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At their house, they probably have a kennel.
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They probably have a dog feeding station.
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They probably have certain things.
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You would do an inspection, and you would sell that as part of the subscription.
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Every six months, we come, and I will assess everything.
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I'm going to assess the dog's living conditions, the health of the dog, X, Y, and Z.
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And this is way cheaper than going one time to a vet.
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And so you're going to think of all their pain points as a dog owner, and you're going to solve every single one, but put them on a recurring subscription.
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So it's going to be quarterly or biannual, six months, visiting their house.
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That's a huge value that they can't go on ChatDVT for.
220
00:13:00.394 --> 00:13:03.537
There's things like health-wise, they could just go on ChatDVT and figure it out.
221
00:13:03.957 --> 00:13:06.239
Inspecting their house is a whole other level.
222
00:13:06.520 --> 00:13:07.761
And I think you'd actually enjoy it.
223
00:13:08.001 --> 00:13:11.244
Meeting them, seeing the dog again, seeing what their surroundings are.
224
00:13:11.484 --> 00:13:14.327
So I think it'd be helpful, useful, and you'd enjoy it.
225
00:13:14.727 --> 00:13:22.775
And I think you could really sell it on a $4,000 ticket to say 2% a month, come back to me, and save yourself money against the vet, and I'm going to make sure this dog stays healthy.
226
00:13:22.795 --> 00:13:24.436
I think that's been slammed on.
227
00:13:24.456 --> 00:13:26.418
One other little thing there.
228
00:13:26.458 --> 00:13:28.760
So if I'm working with a full-time dog,
229
00:13:30.442 --> 00:13:31.943
I'm always going to come in and work.
230
00:13:32.063 --> 00:13:33.644
It'll be after 4 o'clock, whatever.
231
00:13:33.764 --> 00:13:35.605
Do you contract?
232
00:13:35.625 --> 00:13:36.866
I guess I'll find out.
233
00:13:36.906 --> 00:13:37.506
Do you contract?
234
00:13:37.526 --> 00:13:38.627
Is that okay with contractors?
235
00:13:38.707 --> 00:13:40.328
Is that okay with homeowners?
236
00:13:40.348 --> 00:13:43.170
I think it's probably my experience so far.
237
00:13:43.830 --> 00:13:45.771
They're more okay with homeowners.
238
00:13:45.791 --> 00:13:46.772
Contacting them after hours?
239
00:13:46.812 --> 00:13:48.853
Contacting them and then working after hours.
240
00:13:49.013 --> 00:13:49.874
Do you actually work?
241
00:13:50.234 --> 00:13:56.658
I would imagine most contractors don't care about you working after hours, but you probably won't get a hold of them if you call them at 6 p.m.
242
00:13:57.792 --> 00:14:02.215
less likely that you have the 1% ratio.
243
00:14:02.736 --> 00:14:03.376
Yeah.
244
00:14:04.597 --> 00:14:05.338
I got a question.
245
00:14:05.378 --> 00:14:05.598
Yeah.
246
00:14:05.618 --> 00:14:19.008
So for a business that is like a support business, OK, so say like a bunch of bad shops, your supervision can help for X amount of time, two weeks a month, whatever, however long you're scheduling.
247
00:14:19.028 --> 00:14:21.089
Then so you're pitching that as a business.
248
00:14:21.830 --> 00:14:26.313
Then the problem that I haven't figured out how to solution for it yet is,
249
00:14:26.815 --> 00:14:29.182
So you have like six clients and you're their support person.
250
00:14:29.222 --> 00:14:30.266
They call you and they need you.
251
00:14:30.667 --> 00:14:32.873
But what if two customers need you at the same time?
252
00:14:33.435 --> 00:14:34.498
You sell priority service.
253
00:14:36.167 --> 00:14:41.710
So you say, hey, here's our packaging for pricing for two weeks, four weeks, six weeks, and eight weeks.
254
00:14:42.371 --> 00:14:47.974
And if you want a higher tier of service, which is you're prioritized above everyone else, here's this other subscription.
255
00:14:47.994 --> 00:14:51.576
You sell one of those, but you're making an extra $2,000 a month for doing nothing.
256
00:14:51.596 --> 00:14:53.557
Yeah, then you could also hire someone.
257
00:14:53.577 --> 00:14:54.657
That would be the next step.
258
00:14:54.697 --> 00:14:56.398
You're getting so many leads you can't.
259
00:14:57.559 --> 00:14:59.740
Now you get a second and a third person that wants the priority service.
260
00:14:59.760 --> 00:15:02.040
You hire someone knowing that your margin is twice as much.
261
00:15:02.320 --> 00:15:04.741
Yeah, I understand that, but it's mainly an issue if you're a one-man show.
262
00:15:04.801 --> 00:15:05.762
That's what I'm saying.
263
00:15:05.782 --> 00:15:06.702
You can only do one.
264
00:15:06.822 --> 00:15:15.905
If you do sell priority in this case, like, I will drop everything and be at your shop within eight hours of any call, that is very valuable to certain sectors, and they're willing to pay twice as much.
265
00:15:16.505 --> 00:15:17.865
So when I say $2,000, that's probably too low.
266
00:15:18.305 --> 00:15:22.307
It's probably like, hey, there's a $2,000 package, $4,000 package, $6,000, $8,000 package.
267
00:15:22.427 --> 00:15:26.728
Add three grand to any of those, and I will be at your service within eight hours of any service.
268
00:15:28.460 --> 00:15:31.761
on a monthly basis because they can't guarantee any work.
269
00:15:31.981 --> 00:15:38.683
Unless they have PO, they've got funding, they're not gonna commit to $2,000 a month or whatever.
270
00:15:39.263 --> 00:15:45.904
But if it's, for example, if it's an hourly rate, you would just put that in the hourly rate if they were to call you.
271
00:15:48.902 --> 00:15:50.143
You know what I mean?
272
00:15:50.363 --> 00:16:00.110
I 100% agree with what you're saying, but what I'm trying to do is get recurring revenue and guaranteed income instead of when they call you, you're like, yeah, I'm making more money for the next few hours.
273
00:16:00.690 --> 00:16:01.551
I want it locked in.
274
00:16:01.631 --> 00:16:03.952
And because you're only selling one, there's way more value.
275
00:16:04.293 --> 00:16:04.993
You just be honest with me.
276
00:16:05.013 --> 00:16:06.114
Hey, I'm doing this on the side.
277
00:16:06.294 --> 00:16:07.395
You're hiring me part-time.
278
00:16:08.555 --> 00:16:09.476
I have other customers.
279
00:16:10.076 --> 00:16:14.840
If you want to be put to number one, this is the equivalent of you go to Disney and pay twice as much to cut the line.
280
00:16:15.800 --> 00:16:19.682
Say, I got one customer that I'm willing to serve at this premium price.
281
00:16:19.722 --> 00:16:22.663
It's X amount per week, X amount per month, or however you set it up.
282
00:16:23.043 --> 00:16:26.025
And you just immediately go to the front of the line, regardless of what job I'm on.
283
00:16:26.988 --> 00:16:33.269
And that also sets up the expectation that they don't accept that, you might have to walk off the job because there's someone else that is higher priority.
284
00:16:33.309 --> 00:16:38.430
Because I agree with the rate thing, but the problem with that rate thing is if you're not on an emergency job, you're not making that money.
285
00:16:38.550 --> 00:16:39.911
I want it to be where that's locked in.
286
00:16:40.371 --> 00:16:45.052
And if you're serving five, six customers, I believe there's one that's like, hey, if we call you, we want you here now.
287
00:16:45.072 --> 00:16:55.574
I feel like it's a little bit too saturated to like, present a company like that with like, pay me like a monthly rate when there's like a million other contractors making it.
288
00:16:56.526 --> 00:16:59.295
you know, call it, it's a very saturated market rate.
289
00:16:59.898 --> 00:17:03.861
So I like that idea, but I feel like it wouldn't really work.
290
00:17:04.062 --> 00:17:05.563
I wouldn't use hourly rates either.
291
00:17:06.083 --> 00:17:07.304
I would productize the service.
292
00:17:07.885 --> 00:17:09.266
So you give bundles of hours.
293
00:17:09.646 --> 00:17:11.808
So for example, right now, let's say you're $200 an hour.
294
00:17:12.128 --> 00:17:13.950
I'm not going to say, hey, I'm $200 an hour.
295
00:17:14.030 --> 00:17:21.036
I'm going to say if you buy a bundle of 40 hours in a month or 20 hours in a month or 80 hours in a month, you get a certain price.
296
00:17:21.456 --> 00:17:23.798
And it's a bundle, which means if you don't use it all, that's fine.
297
00:17:24.039 --> 00:17:26.160
Which means your pricing will actually go down per hour.
298
00:17:26.941 --> 00:17:32.164
So instead of charging $200, so say, for example, if you buy 40 hours, I'm not going to charge you $8,000.
299
00:17:32.184 --> 00:17:33.525
I'm going to charge you $6,000.
300
00:17:34.605 --> 00:17:36.606
And in their head, they're like, oh, it's $150 an hour.
301
00:17:37.007 --> 00:17:39.528
You know they're not going to use all 40 hours in the month.
302
00:17:39.888 --> 00:17:42.610
So you sell packaged goods, like a package of hours.
303
00:17:42.630 --> 00:17:43.690
You see what I'm saying?
304
00:17:44.070 --> 00:17:45.891
And then it gives incentive for them to buy more.
305
00:17:46.332 --> 00:17:48.473
It locks in how much revenue you're making so it's not as lumpy.
306
00:17:48.953 --> 00:17:52.095
And you know exactly what your schedules are going to look like because you're selling packages of hours.
307
00:17:52.175 --> 00:17:56.177
And then on top of that, you could just offer that premium service to one only customer.
308
00:17:56.868 --> 00:18:05.451
And I genuinely believe you would get one out of five, one out of 10, they're like, yes, I'm willing to pay 20% more, but we want you here within eight hours or 16 hours of us calling.
309
00:18:05.491 --> 00:18:11.734
But I think the bigger opportunity for you is stop selling per hour.
310
00:18:11.874 --> 00:18:20.817
Sell packaged of hours and bring your pricing down, knowing they will not use all of the hours, especially because it's more like on-call slash project here, project there.
311
00:18:21.137 --> 00:18:22.518
Like, that's a horrible business to be in.
312
00:18:22.538 --> 00:18:23.158
You're selling time.
313
00:18:24.152 --> 00:18:30.137
productize the service, and then also the way to scale this is you just know your demand and how many hours on average people are using.
314
00:18:30.557 --> 00:18:32.338
And you can forecast demand now.
315
00:18:32.438 --> 00:18:33.199
You have five customers.
316
00:18:33.279 --> 00:18:35.581
On average, they get 14 hours per month, or whatever it is.
317
00:18:35.821 --> 00:18:36.622
Much more stable income.
318
00:18:37.002 --> 00:18:49.472
How can I increase my conversion rate, being that technically my clicks for copy is like, OK, the click is on Google Maps, go to high type.
319
00:18:49.492 --> 00:18:53.175
But then how can I increase the conversion rate that they actually get in the car?
320
00:18:57.274 --> 00:18:59.015
I would challenge the assumption they need to get in their car.
321
00:18:59.655 --> 00:19:01.115
Because all I need to do is give me money.
322
00:19:01.876 --> 00:19:03.436
And I can get them to give me money online.
323
00:19:04.156 --> 00:19:05.557
And this is where ordering online is a big part.
324
00:19:05.577 --> 00:19:07.297
Because your conversion rate is higher.
325
00:19:07.437 --> 00:19:08.778
They don't want to drive to your shop.
326
00:19:08.818 --> 00:19:09.538
They want a coffee.
327
00:19:09.998 --> 00:19:12.139
So I need to expedite that as much as possible.
328
00:19:12.179 --> 00:19:15.100
Just give me money and then I guarantee you they will come get it.
329
00:19:15.910 --> 00:19:16.150
Right?
330
00:19:16.450 --> 00:19:20.834
So I would think about conversion in the form of, I need a paying customer by the end of this.
331
00:19:21.554 --> 00:19:24.076
And when someone goes to your website, they're doing one of three things.
332
00:19:24.237 --> 00:19:24.957
One, look at your menu.
333
00:19:25.237 --> 00:19:26.198
Two, looking for directions.
334
00:19:26.318 --> 00:19:27.399
Three, they're looking to buy coffee.
335
00:19:28.680 --> 00:19:29.941
Ideally, all three of those.
336
00:19:30.562 --> 00:19:34.405
But like, I need to make those three things the only thing they see when they get to that page.
337
00:19:35.005 --> 00:19:35.666
I want them to order.
338
00:19:36.286 --> 00:19:37.707
I want them to get directions.
339
00:19:37.887 --> 00:19:38.748
I want them to see my menu.
340
00:19:39.308 --> 00:19:39.629
That's it.
341
00:19:39.649 --> 00:19:41.450
That would be conversion.
342
00:19:42.531 --> 00:19:43.652
And then the second part was what, sorry?
343
00:19:43.672 --> 00:19:43.812
Sorry.
344
00:19:47.517 --> 00:19:49.839
People showing up, something's not on the menu.
345
00:19:50.279 --> 00:19:51.861
It's them showing up and thinking you're too expensive.
346
00:19:52.341 --> 00:19:55.884
So for example, how often do people walk up to your thing, see the menu, and like, it's too expensive, and walk out?
347
00:19:57.926 --> 00:19:58.847
Your close ratio is high.
348
00:19:59.047 --> 00:20:01.048
Back to what we talked about at church the other day, raise your prices.
349
00:20:01.549 --> 00:20:06.033
Like raising your prices during peak time, because remember, your asset capacity, we're hitting it for three hours a day.
350
00:20:06.533 --> 00:20:07.494
We're hitting it on the weekends.
351
00:20:07.954 --> 00:20:15.641
So having surge pricing during that time because I'm already hitting capacity makes a lot of sense, especially when no one's showing up to my thing, seeing the prices, and walking out.
352
00:20:18.429 --> 00:20:21.191
And then it's also a function of how do I increase my lifetime value.
353
00:20:21.231 --> 00:20:26.515
That's when things like your loyalty program is important, your upsells.
354
00:20:26.735 --> 00:20:33.499
So I would compensate my baristas on upselling them into a second product because one product is going to give me $6 or $7.
355
00:20:33.519 --> 00:20:35.881
Two products are going to give me $15.
356
00:20:36.161 --> 00:20:38.603
The lifetime value that customers has doubled, and I didn't get any more leads.
357
00:20:39.584 --> 00:20:39.964
So when...
358
00:20:43.525 --> 00:20:51.131
So yeah, that's what I would be focused on, like improving lifetime value by raising prices during surge pricing.
359
00:20:51.692 --> 00:20:54.394
I would be doing, making it easier for people to give me money on my website.
360
00:20:54.934 --> 00:21:00.879
And then I would be doing upsell compensation for my baristas to get them a $6 into a $20.
361
00:21:04.295 --> 00:21:08.697
All of that is ancillary to, that answers the question of how do I get people to buy more from me?
362
00:21:09.157 --> 00:21:11.218
Like gift cards, you get loyalty programs, et cetera.
363
00:21:11.498 --> 00:21:20.322
But I also know that if you raise prices by 50 cents per drink during 11 o'clock to 3 o'clock on a Saturday, you're making an extra $100 for doing nothing besides changing the menu out.
364
00:21:20.342 --> 00:21:20.502
Whoosh.
365
00:21:20.522 --> 00:21:27.445
You didn't actually tell people that I'm doing that?
366
00:21:27.465 --> 00:21:27.585
No.
367
00:21:27.605 --> 00:21:27.705
More?
368
00:21:27.765 --> 00:21:27.825
No.
369
00:21:27.905 --> 00:21:33.388
Unless you start getting people saying, no, this is too expensive, and you say, great, you can come back in two hours and it's going to be cheaper.
370
00:21:34.117 --> 00:21:42.764
Because right now, the other problem is your closer is actually lower than 100% because you have people driving in, seeing five cars stacked up and driving out.
371
00:21:43.885 --> 00:21:49.730
And so whenever you have that capacity limit, I am trying to reuse price as a way to push that down.
372
00:21:52.172 --> 00:21:53.073
No one will notice.
373
00:21:53.874 --> 00:21:58.858
If they do, you tell them, hey, during the peak hours we charge a little bit more because there's so many people stacked up in the parking lot.
374
00:22:00.479 --> 00:22:01.240
Great problem to have.
375
00:22:02.672 --> 00:22:03.092
Start with?
376
00:22:03.112 --> 00:22:06.413
People, like, he has his face, and they see his prices, right?
377
00:22:06.513 --> 00:22:06.713
Yeah.
378
00:22:06.753 --> 00:22:09.213
Buying the same coffee every day.
379
00:22:09.253 --> 00:22:09.453
Great.
380
00:22:09.493 --> 00:22:16.595
Then if they ask about your pricing, you tell them, hey, during our surge hours, we have so many people here we can't serve them, so we put our prices 50 cents more per drink.
381
00:22:17.215 --> 00:22:18.935
And if you don't want that, just don't come during these hours.
382
00:22:20.235 --> 00:22:27.477
And if they put you online, say you're social, like, this is what you're afraid of, them posting on social media and saying that you guys are a bunch of greedy people, money hungry.
383
00:22:28.777 --> 00:22:30.698
And then you say, have you seen our truck?
384
00:22:30.778 --> 00:22:31.518
We just got started.
385
00:22:31.858 --> 00:22:32.619
What do you think this is?
386
00:22:33.119 --> 00:22:34.500
And everyone will be on your side anyways.
387
00:22:36.180 --> 00:22:38.741
So they can go to Woods, they can go to Starbucks and pay twice as much.
388
00:22:39.902 --> 00:22:40.542
What do you think this is?
389
00:22:40.562 --> 00:22:41.423
It's a small business.
390
00:22:42.323 --> 00:22:43.804
The worst case scenario is good for you.
391
00:22:43.944 --> 00:22:46.465
You would get a whole bunch of branding.
392
00:22:47.625 --> 00:22:51.647
I started off with subs because I don't want to do any of the ops myself.
393
00:22:52.608 --> 00:22:53.588
And the numbers are predicted.
394
00:22:58.251 --> 00:23:02.485
I know what the growth profit should come out to.
395
00:23:02.505 --> 00:23:04.612
But is that scalable?
396
00:23:04.910 --> 00:23:11.493
I guess to continue with subs everything is scalable just FYI Here's the real question.
397
00:23:11.573 --> 00:23:12.553
What do you want to build?
398
00:23:12.873 --> 00:23:14.654
Like what what's the business gonna do in 10 years?
399
00:23:14.674 --> 00:23:15.474
Like what are you trying to do?
400
00:23:15.514 --> 00:23:16.515
Are you trying to sell this business?
401
00:23:16.855 --> 00:23:17.955
Are you trying to?
402
00:23:19.276 --> 00:23:20.756
Eventually where you work four hours a day.
403
00:23:20.816 --> 00:23:22.517
What's the goal of the business?
404
00:23:22.557 --> 00:23:23.838
Probably eventually sell the business.
405
00:23:23.918 --> 00:23:29.200
So if you're trying to sell a business in five years and you
406
00:23:30.565 --> 00:23:31.365
You're good at sales.
407
00:23:32.186 --> 00:23:33.146
How good are your operations?
408
00:23:33.386 --> 00:23:34.626
Have you done the roofs themselves?
409
00:23:35.707 --> 00:23:36.027
I have, yeah.
410
00:23:36.047 --> 00:23:36.627
OK, you're good.
411
00:23:36.647 --> 00:23:42.889
OK, fastest way to money is through subs, because you're good at sales and you don't need to build the infrastructure for operations or admin.
412
00:23:43.049 --> 00:23:50.992
So the fastest way to build a $20 million roofing company, top line, that you make 10% to 20% off of, is through subcontracting.
413
00:23:52.202 --> 00:23:56.105
The question that becomes debatable is, what size of business will you build?
414
00:23:56.145 --> 00:24:05.733
If you build that operation, you build an admin, you have the employees as W2 employees, the enterprise value on that will be higher because you've built that infrastructure out.
415
00:24:06.274 --> 00:24:12.219
And so it really just becomes, are you so good at sales you'll build a $50 million top line revenue subcontracting business?
416
00:24:12.639 --> 00:24:17.583
And if you spent five years also trying to build operations admin, would it only be a $2 million company?
417
00:24:17.724 --> 00:24:19.365
Because then I want the $50 million company.
418
00:24:19.645 --> 00:24:33.760
But the enterprise value, the valuation that you will get on a subcontracting sales model, very different than when you own the brand, you own the customers, you own the employees, you have all the infrastructure built, you have customers coming in, that's a different model.
419
00:24:34.061 --> 00:24:38.225
And so your valuation, like your multiple, might be on a sales, might be...
420
00:24:39.366 --> 00:24:42.228
0.8 times profit.
421
00:24:42.708 --> 00:24:45.170
So if you made $10 million, they might give you $8 million for the business.
422
00:24:45.590 --> 00:24:53.215
Versus if you had a W-2 employees, you built all the infrastructure out, you get like 2 to 3x multiple on profit.
423
00:24:53.436 --> 00:24:57.378
So maybe you have a million dollar EBITDA, you make $2 to $3 million on the sale.
424
00:24:57.779 --> 00:24:59.860
But it just depends what you're good at.
425
00:25:00.000 --> 00:25:05.043
If you're not good at admin, you're not good at operations, in five years, do I believe you're going to build a $5 million business doing roofing?
426
00:25:05.063 --> 00:25:05.184
Yeah.
427
00:25:05.924 --> 00:25:06.565
That's risky.
428
00:25:07.186 --> 00:25:16.643
If you're so good at sales and you're like, tomorrow you know you can drive leads, get people to convert, and get those jobs off to someone else and make 10 to 20% off the top, and you could scale that really big, I'd just do that.
429
00:25:17.945 --> 00:25:18.366
Here's the thing.
430
00:25:19.290 --> 00:25:23.492
Do what you're good at because if you have the subcontracting model, you can always go back and build the infrastructure.
431
00:25:23.812 --> 00:25:33.617
If you build a $10 million roofing company that has subs, you go hire an incredible operations person for a quarter million dollars a year that's done roofing and built teams out, et cetera, and then just convert over.
432
00:25:33.777 --> 00:25:34.758
So my cousin just did this.
433
00:25:35.298 --> 00:25:42.522
He started off with subs and then moved over to actually having the team once he had the money to go afford a great operations person.
434
00:25:44.499 --> 00:25:46.701
Get the customer, because whoever has the customer wins.
435
00:25:47.321 --> 00:25:48.002
So get them first.
436
00:25:48.042 --> 00:25:54.766
I would probably say, more specifically, I would probably, if I was you, go after subs, build a huge infrastructure of how you get the leads.
437
00:25:55.047 --> 00:25:58.629
You just dial in your sales and lead funnel and pricing and the whole nine yards.
438
00:25:59.069 --> 00:26:06.895
And then if you ever wanted to convert over, you'd get an incredible operations person that's done this before and build out $10, $20 million roofing companies.
439
00:26:07.215 --> 00:26:13.880
You'd hire them, pay them whatever they want, and then you'd convert it into, we own the whole model now, and then your multiple will be higher on the sale.
