Pricing, Focus, and the Seven Growth Sins | Ep 935

23:13If it's, you know, physical, obviously like manufacturing locations, et cetera. So the long story answer, you're like, I'm still waiting for an answer. What should I do? I will ask a different question, which is how do you get business right now? Mainly it's SEO, people calling us from some of the stuff we've done on our website and customers just re-upping. Yeah. So right now it's word of mouth and SEO. Yeah. and you should probably be a little bit concerned because of chat gibbita. Yeah. That's eating away the SEO pretty rapidly. So right now, I think the real thing that you're lacking is a reliable acquisition channel.

23:51And so for me, if I were to switch places with you, my first and primary function would be how do I get a reliable acquisition channel? Once I have that, then you can put all of your eggs, like you can basically drive all of your own inputs through that channel, then get disproportionate return with the additional cashflow, hire the people to backfill yourself. And then it's like, okay, well then what, what am I currently doing that I need to give up in order to get the attention in order to do that? And so it might be less expensive instead of saying, how do I hire that guy who's going to grow my business, which I'm still waiting for that guy.

24:22How do I hire the person to do what I'm already doing so that I can go grow the business is probably the better question. And that guy will probably be less expensive than the guy who can grow it because rainmakers ain't cheap because they, if they actually can grow shit, they don't need you. Like that's the real, like the people who are absolutely the best at growing shit can do things on their own. And so you have to make the vision for the business so much bigger and so much more compelling that they're willing to come. So I think backfill what you're currently doing, take all the existing resources that you have in terms of time and money, put them towards getting the next channel going for a corporate sales motion.

24:53I'll bet also that you probably just focus on B2B. I don't know yet. I'd have to look under the hood, but that's going to be my bet. And that would probably, the nice thing for that business is I'll bet you have a much higher ticket for the corporate, corporate gigs than you do for the individuals. Yeah. And so if, as soon as you get a channel there, all of a sudden you can start selling 10, 20 engagements a week or whatever. And you're like, holy shit, because there's no, there's no reason why you, like if you can sell 10 B to C people a week, there's no operational constraint on selling 10 businesses a week.

25:22It's just, it's the, the function is the same, but you just add zeros. And so you just got a lot more operating leverage. That was my long, short answer. Cool. Very good. Okay. Yeah. That would be a way to answer that question. And then I would ask the question, why do I care? Real quick guys, I have a special, special gift for you for being loyal listeners of the podcast. Layla and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. You've got marketing, you've got sales, you've got product, you've got customer success, You've got IT, you've got recruiting, you've got HR, you've got finance.

26:03We show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30-ish pages for each of the stages. Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com forward slash roadmap. R-O-A-D map, roadmap. Hey, Alex, I'm one of the Sydney boys as well from Australia.

26:37Welcome. Thank you. Yeah. My name's Arjun. I'm going to do a shooey at my launch for you guys. Awesome, awesome. My name's Arjun and we sell buyers advisory services, essentially helping property investors purchase more properties. and we're helping moms and dads or small business owners. We did 15 million in revenue, 27 % profit margin last financial year. This year we're on track for about 22 million. How do you do that? Do acquisition fees or what's your fee structure? We charge a flat fee for service at$22 ,000, half upfront, half upon success. Independent of deal size? Yeah, it could be an 800K deal size or a$1.5 million house purchase.

27:15Is that usually your range? Usually 600K to 1 million price point for a purchase of a property is our range. And then we have a secondary service, which represents about 10 % of our revenue so far, that's percentage-based. Yeah, for bigger. And that's commercial property. Yeah. Now usually be two, three,$4 million deals and a much higher service fee. Yeah. Okay. So we're on track to do - Pretty high percentage though. It's four or 5 % on those deals. So that's pretty good. Yeah. We're on track to do 22 million for this new financial year. And we want to be doing, based on the valuation metrics I learned, about 54 million with all those scorecard points ticked off at an EBITDA of about 27%, giving us a valuation of 125 million using an eight times multiple.

27:56And what's stopping me right now is two things. One is a reduction of CAC that's needed. And then the second thing is best people duplication. If we had our top two people in each of our divisions, the same standard as the rest of the team, we would overnight get to about 45 million in revenue. So two-part question, that's on the best people. And the CAC reduction is that our LTV is about 22 ,500. half thousand. Okay. And our - It's big. It's a big chunk of your - Yeah. And right now we have CAC at about 6 ,700. And the biggest problem we're finding - Wait, you said CAC was 22 or CAC was six? CAC is 6 ,600 with LTV at 22 and a half.

28:35Okay. Got it. I heard. Okay. And the CAC part, what we're finding is we'll put about 15 % of ad spend of target revenue is how we've mapped out ad spending. And then with that 15%, it's thrown all over the place. Agency fees, PR, organic content, some Facebook, some YouTube. And so we've just done a whole bunch of channels. Fingers crossed we get some customers and then we look at our data. It's like, oh, they came through meta for a generation, but they converted from five other things. They did 10 things along the way. That's the constraint. Yeah, we're like, what do we scale? Because it feels like everything's working because they're all touching every touch point.

29:09So we try and do everything more. We don't know which one. So those are the two things. If we best practice duplicate, we double our business literally in a year. And if we get our cack down, we increase profitability substantially. So I'll ask a different question. If you double everything you're doing, what stops you from doing that independent of the attribution, which right now is lacking, but let's just say you just doubled what you're doing from, from a, from an acquisition perspective, what stops you from doing that? Well, we got four months of OPEX, so we should be able to have the cash to do it.

29:39So nothing would physically stop us. We just wouldn't have a clue if it works or not. We just hope it works. Yeah. Well, I will bet that if you do twice of everything that you're currently doing, it will work. The data piece will come into play if you want to just get more efficient on it. And so realistically, how long is your deal cycle? We usually have someone sign up and then that's the first half payment. And they'll usually sign up within a month of the appointment latest. What about from when they become a lead? Do you have any idea? From when they like opt into anything? Do you know how long it takes?

30:09No, because we've got some people who watched us for podcasts for three years and they're like, yeah, I'm ready to go. And then some people, they watched a VSL and they're like, oh, I'm not so sure. Okay, for sure. I'll sign up and give you a go. But in terms of sign up to actual full cash receive the 22k, it's usually four months. Yeah. So I basically double down on the branding efforts that get you the, like, because if you, like one layer before attribution, that would be kind of like forensic attribution where you'd really know would just be kind of directional attribution, which is closer to the sale.

30:43And it would be qualitative, which is just like, where did you hear about me first? And that will at least give you some indication of where people are coming from initially, because what happens is the deeper you get into attribution, the more like nuanced it is because you're like, okay, well, let's say that someone opts in a year ago and then they see a short and then they watch a long and then they opt in and then buy a year later. Did they come from the first thing a year ago, or did they get converted from the thing that's more recent in the last 30 days? I would argue it's the last 30 days.

31:20It starts to get a little bit more muddied. So there's something called scientific attribution, which is like last touch is the closest to conversion events, but will skew everything towards direct response. And then you'll split test until that should become a porn business. And so there's a great saying by George Mack. He said, if you split test enough, everything just becomes porn, which I just think is really funny, but partially true. But on the other hand, scientific kind of blends those because you go first touch, which then it's like, well, maybe everything is going to be my email list or whatever.

31:51If you go last touch, it's whatever the right hook is. And so scientific is if it's within 30 days, then it's last touch. If it's more than 30 days, then it's first touch. And that's kind of blends both. The qualitative will at least give you direction. So I'll just ask you guys here. So who, it'll just be a fun exercise. Who here, first thing you ever heard was just from someone telling you about my stuff? Can you get hands? Okay, cool. Okay. So separate set hands. Who here discovered my stuff from the book on Amazon first? Interesting. Wow. Okay, cool. So by that logic, I might be like, I should never write books, right?

32:29So who here found me on YouTube first? That's the first. Okay. So there's some. And then And what about Instagram as the first? Okay, so between those three sources, you kind of got so if I were to power rank this, it'd be like, make really good shit on YouTube, because two thirds of the room said YouTube. And then you know, another third told people from YouTube. And then somebody found me on Instagram, and everything else almost became irrelevant. But that's top, right? You still have all the other kind of touch points that happen in between, like the book, for example. And so for you, like that wasn't that hard to do, but I think you can mimic what I just modeled for you with your existing customers.

33:10And then where they tell you the vast majority of first touch then can inform where you do your reinvestment. So you get a disproportionate return on dollars in or effort in that would be. And so the back of napkin way would be qualitatively do that, allocate resources to more than double the one point of greatest leverage in terms of bringing people in, but I would still continue the other quote brand touches, at least as it currently stands, because they're probably doing some sort of nudging function or conversion function that's getting people to buy. Cause you have a little, you know, you have more complex, higher touch services.

33:43So it's expected for people to take longer to convert. Got it. Um, on the second part was the best person duplication. So I've got the fulfillment team. So it's going to come down to you actually studying the top two guys and being a better student of exactly what they're doing and breaking it down into behaviors so that everyone can do it. Because everything is teachable. Everything is teachable. There is no magic. It's just a question of how teachable is it? And most sales skills are exceptionally teachable within like a couple of weeks. And so fundamentally they're doing or saying different things than the rest of the team is.

34:14And so once you identify what things they're doing differently, you can then make that the standard for the rest of the team. And you can see if the rest of the team goes up. If they don't adhere to those standards, then you might have other skills, which is like adherence, work ethic, things like that, which are absolutely skills, but probably not worth training. Thank you. Yes. How's it going? Good. My name is Sam Jacobs and we do China fulfillment for e-commerce sellers. China fulfillment? Yeah. Like 3PL services. China. Yeah. China. The Wuhan. Yeah. A little scared with the tariffs, but we're back.

34:42You're good. So yeah, we service e-commerce sellers. 70 % of our sellers are actually dropshippers. 30 % are our brands that just like the international fulfillment. So we do about a hundred and this month, 130 ,000 and then 90%, 80 % profit. Amazing. And then we want to be at five million here. Okay. And really, I think what's stopping us is just continuing what we're doing, keep doubling down on the leads. But we're kind of like figuring out our vision with it because we're working with many teams in China. We don't really have assets, right? So when you say assets, what do you mean? Technology, warehouses, we don't really own anything.

35:25Okay, not a bad thing. Yeah, I guess it's simple. So we kind of want to figure out our vision and create more valuation with the company so we can exit next, you know, one day. So there's nothing inherently not valuable about your business. If you run 80 % net margins and I mean, the issue right now is growth. So you have to grow probably, what are you growing year over year? Over 100%. Yeah, you're on the smaller side right now. So like we would need to see that sustain but that's fine So you are growing you've got good margins I'm guessing it's sticky because once they get the deal they have to continue to buy through you because you keep it masked Yeah, I mean they're using our we're sourcing and fulfillment.

36:04So we get them product ship the product Yeah, I'm guessing churns low. Yeah, but they also sometimes they're drop shippers. So their products dies out Sure, we kind of like we're trying to figure out where's the longevity in it? Yeah So what you have to, so this is a part of this is actually how you color the revenue that you have in the business. There's a little bit of finance thing, but basically I'll give you an example. So Allen, which is a software company that we owned and then sold. So Allen sold to agency owners. Now the issue with agency owners is that they would get small businesses and they would do lead gen for them.

36:35The problem is that, you know, chiropractor one, two, three would say, I don't want to buy leads from you anymore every three or four months. And so they had tremendously high churn at the SMB level. But the churn at the agency level was super, super sticky. It was very low. So I could rely on an agency to sell 10 more clients per month onto the platform and churn out 10 clients per month. But they would maintain a client base of 50 clients, which would do X amount of revenue. And so I think if you chunk up how you're thinking about churn, which is if these drop shippers, you might find out that, and this is where you do it activation metrics, we can help you with that stuff.

37:08But it's like, okay, if we look at all the data of the customers that we have to date, what do the people who have stuck with us for over a year have in common? It might be, this is me guessing from the hip, from working with a lot of businesses. I would bet you that they have at least three SKUs that they work through you and they might have at least two acquisition channels, whatever. And they might be doing over X a month for at least six months. So if we just say, okay, well, somebody who goes from 10 ,000 a month to a hundred thousand a month in 20 days on TikTok shop might not be a super, you know, a stable business, even though there's big money there, they might just get shut off tomorrow or whatever.

37:43Right. Whereas if somebody comes and they have at least two SKUs, they've been doing it for six months and they're on multiple channels, then the likelihood that both SKUs and both channels die is much lower. And so I think you would chunk up to the seller, not the SKU. And then I would be looking at how do we cross sell multiple SKUs to recreate activation of the most valuable customers. Right. So here's the issue, though. So to bring on these type of sellers, like we have two options. Either take USA Ace brands and then bring them to China so they can unlock 65 plus countries. That's kind of like our offer there.

38:16Or we just go to people who are already shipping from China and then we just beat their rates. That's kind of how we're getting a lot of our clients is beating their current rates, which is kind of like a race to the bottom. But it's how we got most of our clients. 50 % of our clients currently come from word of mouth. I would say 30 % from affiliates like e-com coaches for their, you know for the audience um and then we have like events which is big we go straight to like the e-com guys like hey who are you using let's beat your rates let's bring you on that's how we're getting it so we're just kind of like figure out it's going to be very hard we talked a lot of the team members they've been incredible um to bring usa based brands over to china it's like a really hard ask for them and they're like we're doing all the revenue here already it's like bringing you there it's kind of like a big ask so like we're trying to figure out again what type a customer should we be going after?

39:04Should we just keep going after these like quick 20 year old? Yeah. So the issue of the like race to the bottom would be concern if you didn't run 80 % net margins, right? And so you're saying there's this component about my business, which is actually exceptional, but I don't like it because I was told that that means something bad. And therefore I want to get people to do something they don't want to do in order to grow my business. I think that would be, I would rather bet on the thing that everyone's already doing. That's making you a lot of money. Yeah. I mean, we make money on every single order, right?

39:32Yeah, which is pretty cool. We kind of launch. And essentially, it's like if someone has massive volume, we make most money. Like we had a 20 year old kid, like he processes 100 ,000 orders, right? Over 100 grand profit, like pretty cool, right? So we have a lot of our leads coming in that are beginners. So we're like, hey, let's just launch a$30 a month thing to get access to our team. That's kind of running on the backbone. for beginners because we don't make money if they're doing zero orders. They just waste their time. So$30 a month and then 10 % of our actual profit recurring is coming from those beginners.

40:07But that's not, so, okay, I just need to recolor your brain around this. You having, how many people actively sell stuff on your, using your service? About a thousand. Okay. You have reoccurring business. You don't have recurring. Reoccurring is still fine. Coca-Cola is not recurring. It's still a super valuable business. you just have to demonstrate that people who buy once continue to buy. That's it. And so it, I think again, it's the chunking up, which is what percentage of the thousand people continue to stick with you. And maybe you have the thousand, but there's really only like 200 that are hardcore that are the real guys who drive all the volume.

40:41Great. So you build the business for them. And so a lot of this other activity is wasted effort, unless you had a very clear path of these$30 become these people. Now you might have a couple of case studies, but it doesn't mean it's reliable or that it's right. Everybody has one sad story that everyone's really happy about. But realistically, most of the time, it's just going to be people who are already players, who are already doing volume, who understand the game and you just bring them in. And so I would probably say your 80-20 in terms of how do we allocate attention so we get higher returns is I would probably ignore everything that's not the 200 and then reverse engineer what those 200 all have in common.

41:14And then I would make that my primary objective on the acquisition side. And then you reverse that avatar through the acquisition channels, meaning now some of them came over word of mouth. We're not going to operationalize that. You can try and encourage referrals. We can help you with that too. But like big picture, it's maybe they all came from the coaches. Sounds like probably a lot of beginners come from there. Uh, probably more from the events. And so you should probably go through an event sales motion. And then basically how do we, how do we go from, you know, two events a year or whatever it is that you're doing to like two a week?

41:43Yeah. It's funny. You said the same exact words, one of your guys. It's awesome. Good. Yeah. Good. And then we had a crazy idea. The 80-20 rule, focus on the top clients. What do they have in common? Do we start building out some sort of technology to help those people? Just that's a distraction. Okay. Cool. So the way that we're going right now, we can take this at five to 10 million. You see that as a vehicle or do you think it's the wrong vehicle? You can totally take it. There's obviously going to be other issues on the way in terms of scaling the services, scaling the team, scaling your connections abroad.

42:16probably there's a massive data project that has to get done but besides that yeah 100 % like the business model there's nothing flawed with the model yeah don't try and become a software company you're not a software company just be a you company that does 80 % net margins that's sticky should we look to own anything in China or keep it the way we have it simple yeah love it thank you so much Alex yeah please don't try to become a software company so that you think that your company would be more valuable just side note please don't do that thanks if you were a software company, you would know you were a software company.

42:42Hey, Alex. Amazing. Amazing. Flew from England for this. So I really appreciate it. My name is Oliver Bruce, running an agency called Pinpoint Media. We sell performance marketing. So paid search, paid search for creative. We do four and a half million, roughly a year. I want to be a million a month if we can get there. What's stopping us, I think, is cobbler's shoes. So we can't do enough of our own ads, because we're doing it for lives. How do we fix that? How do you fix that? Well, I mean, so right now you're supply constrained. Yeah. Right. So I'll ask you, I'm a business owner. I've got all these, you know, customers.

43:21I have more demand than I can handle. And I want to increase cash flow in my business so that I can both hire people and grow. What do I do? Well, make sure it compounds correctly and make sure you cut the overheads. Make sure you're making sure you're, ask me again, sorry. So I was pretending to be not you, somebody totally different. Okay. Um, and so I've got, so I've got, I'm fully staffed. Yeah. Everyone's at full capacity. I want to grow. I need to increase cashflow. I have more demand than I can handle. What do I do? Sell more. Do more. Raise prices. You see, this is the issue. I promise you, this is what the guys are telling us to raise prices, et cetera.

43:54And we are mid to high ticket already in the UK. And for us to raise prices, got a client sat here, actually, maybe I should - Sorry, he's going to raise prices. Um, but for us to raise prices is really difficult because a lot of the clients are kind of, we're already quite pricey in that sense. So you're performance-based. We are performance-based in that sense. And 75 % of it is retained as well. So it compounds nicely over the course of the year. But for us to raise prices, we'd then almost outprice ourselves and then go to somebody else potentially. I know we deliver a good, you know. Well, if that happened, you would free up capacity and then you could run ads.

44:25Absolutely. But then we've got to, you know, go back to the beginning and it's kind of what's the point in winning new clients. Well, I'm saying your downside is you can, you'll basically, your downside is you're fine. Your upside is you make more money and you get cash flow and you get growth. Yeah, I get that. I get that. What about just hiring more people to be able to do that? You can do that. I don't know. What are your margins? 20 ish, 18%. Yeah. So you got what? Seven, 700 ish cash flow. Yeah. I mean, you could, you could immediately just hire off of that cash flow. All of this is just, it's really a question of risk and how much margin you want.

44:54So like if you need, I guess I'll ask the simple question, why haven't you hired somebody already? We have a performance team that we literally started six months ago with this in-house. So the reason we haven't hired someone to do it for us is because it's not immediately revenue generating. It's not a billable service to our clients. I know it is hypothetically in the future. Wait, you doing performance for yourself is not revenue generating? No, no. My point is we can't bill it out to the client straight away. So it is revenue generating in time, but it's that sort of front load in the cost to be able to then generate the revenue.

45:21And because it's organically funded and such like, it's super hard to front load it. We've got 700 in cashflow. You can go hire the person and have 500 or 400 left if they're a savage. It'll still be fun. Yeah. Okay. And what would you say the best hooks are in terms of agency creative? For getting customers? It's still always going to be results in brands. We sell a lot through case studies and lead magnets. The best agencies grow on word of mouth because they're actually really, really good. And so if you have some portion that's word of mouth, you're just continuing to reinvest in the team.

45:58Agencies are traditionally lower, will both lower margin and also typically lower multiple from a valuation perspective because it's so people heavy and that's okay it's just a different business model but they're also like i mean every business in the world wants more customers so it's really easy to sell that's why so many agencies exist so like you know every every upside is a downside just said differently you know what i mean but the simple simple low risk because you're not going to raise prices, I can feel it. So just hire the next person. This is the reinvestment part. And said differently, do you think you're going to get more than 8 % more business for the year by hiring somebody who can get you more customers?

46:39Yeah, 100%. Right. So then it's an investment that you'll get a way higher return on than putting it somewhere else. So that's a pretty good allocation of capital in my world. And what point do you dial? Because I do a lot of the ads myself in terms of the ad sets, the creative, the running around with the phone and all that kind of stuff just simply because I don't want to take up the dude's time in the businesses or in the business. So at what point do I dial myself out of that and put another excellent member of staff on camera sort of thing? Like how does that transition work? I think it's whenever you want.

47:04Yeah. I mean, you could do that at a million dollars a year. It just, the thing is, is like, you're going to have founder magic and it's always going to work disproportionately better for you than it does for anybody else. And so I will, I will expect a 30 % decrease in performance in a function if someone takes it over for me. Yeah, okay. And as long as that's baked into the financial model, that's fine. Because then I get, like one of the sayings we have is scale zero, which is like, how do I get me to zero? And once I'm at zero, we can just scale all the way to the moon. If there's any percentage that requires me, then it doesn't scale.

47:36Yeah, and that's what I'm trying to do. Okay. So hire someone, do more, try and dial myself out for Ken. Appreciate it. Thanks, Alex. No, you bet. Cheers, dude. And as a side note for everybody, when you're in a low capex business, which is kind of like the performance marketing agency. If you have a consulting firm, if you're an accounting firm, if you're legal, you know what you are if you're low capex. Any kind of services for the most part tend to be low capex. When you have the profit at the end of the year, the benefit of those businesses is they generally spit off more cashflow than other businesses.

48:04So like a physical products business, you have to buy more inventory. If you're brick and mortar, you have to buy more locations. If you're manufacturing, you got to buy another machine for more widgets or construction, you got to buy equipment, whatever it is, right? that some businesses require more capital to grow. Service businesses do too, but just not the way you think. And so there's two primary investments that will get through the disproportionately higher returns for service-based businesses, which is now 80 % of the room. So number one is talent. And so when you see your profit at the end of the year, the thing that you take is you look at that profit.

48:33Let's say it's a million bucks in profit. And you're like, okay, well, for me to keep going, I can try to keep squeezing my team more, but at a certain point, there's just not more they can do. And so I have to unlock more operational capacity by bringing more eight players on. And so I have to look at that and say, well, what percentage am I going to reinvest in the business? To me, reinvesting the business from a service perspective is again, one of two things. One is that you bring talent in and the other is that you do brand plays, which is like, what are the big aspirational associations that I can go for that will permanently cement me in a different tier than my competition?

49:03Like why does Red Bull waste the money to do a parachute jump from space? Because it's a brand play and because people talk about it like me right now, right? And you're probably haven't thought about Red Bull, but now you're more likely to drink one for the rest of the day. Right. And so the, the, like, why am I doing a book launch? None of you even found me off my damn book, right? Like, why am I doing this? Because I think that if we do an enormous launch that gives a tremendous amount of value to entrepreneurs, it'll introduce a lot of people who are kind of like much, much more on the top of my world who are just barely at the edges.

49:34They'll take them one long step in. They'll get three or four hours of tremendous value for me. Hopefully they'll buy a book and then get another six, seven, eight, 10, 20 hours of value from that. And then over the next few years, they'll work their way into my ecosystem. It's a multi-year play. And I'm putting, I don't know, six,$7 million into this launch. So I'm putting a decent amount of capital into this with basically no real return that I'm aware of. And so those are the bets that we have to make on brand that will get you out of the direct response doom loop that you may feel like you're in, which is hitting the national companies disproportionately to the local businesses.

50:09So like if you're local, you have a little bit longer, you can get away with basically just running Google ads or meta ads and just generating leads and selling shit, which is fine. But everybody who's national or sells international brand, like you can't just like five years ago, eight years ago, you could just run a cold ad to a video sales letter, get on the phone and sell something for 10 grand, you could do it with basically no reputation. Those days are more or less gone. And so now it's like you have to make these big brand investments. Now, part of that might be content that you can reinvest.

50:41So you're like thinking because you're a performance marketer, you probably think more in ads. But the biggest brands that really make money with performance, performance is only 30 % of their budget. 70 % goes to associations, narrative, founder story, all of the things that they want everyone to talk about and associate them with, which then long-term creates higher ROAS than direct response does. Direct response creates higher ROAS in 30 days. Branding creates five, 10, 20 times more rise over 12 months. And that's the part that everyone fucks out. Me too. I stayed stuck between 30 and 40 million for three years until I figured that out.

51:14Hopefully that helps. This is our last question. Yes, sir. Hopefully it's gotta be like amazing. It's probably not gonna be. I'm gonna try really hard. My name is Todd Weaver. We're B2C. I'm in the restaurant business. Restaurant business? Restaurant business. Oh, there we go. We do about 25 plus million in revenue. We're trying to get to 100. Amazing. How many locations? We have six. What's the, what type of dining? Oh, actually there are five different concepts. Two that are American pub fair. At least you're focused. That's good. Well, there was a - They're all restaurants. There was a lawsuit that got in the way of growing brands.

51:49So what's stopping us is probably to be truthful is me and my business partner, which I dragged here. You have a business partner. Business partner over here, yeah. I'm more of the front-facing marketing person. He's the implementer finance guy, right? Heard. So I thought I'd bring him to listen to the spiel, right? So if I'm looking at the business worksheet that we filled out from the beginning, the problem is the LTV to CAC. How do I, I don't have those numbers, right? Yeah. So in a restaurant, I have, let's say, I have information from our, what do we say? Our, I'm trying to think. I'll just.

52:26Our programs. Yeah. So restaurants is such a unique business. The thing is, is like more than anything, and this may sound ironic, it's like on the polar ends of business, you have restaurants on one side and then on the other side, you've got super high tech and they both converge on the same truth, which is that in the long run, product is the only thing that matters. And so at the end of the day, you can do all the marketing things you want in the world. If the food sucks, the food sucks. And also that's obviously tailored with the experience, the service, the environment, all those other things.

52:55But if the experience overall is not noteworthy enough, then you get a lot of like, yeah, it was all right. And then they never go back. And then someone's like, Oh, I guess we won't try there then. Right? It's that those tiny little because most people do find restaurants through word of mouth and reviews. It's like 90 % those two sources. I mean, not many people are scrolling Instagram and are like, Oh, I will respond to the buy one get one. Now, the one exception to that is when you have a grand opening, which you should have, I'm sure you do have a hopefully have a grand opening strategy for your locations.

53:24That for sure is hardcore marketing that you're doing. But the idea is that you never do grand openings until you know that the model that you have, the experience that you deliver, the food that you make, when someone comes in, you know that off of the grand opening, you can get that location to full capacity within six months, just off of the word of mouth of basically the initial push, which by the way, is how all brick and mortar should work. With restaurants, it's just more exacerbated because data collection is harder and gross margins are smaller. And so basically, if you're like, how do I, how do I aggressively grow the business?

53:57It's going to be mostly the food and the experience, which is the sad and also amazing. How do I get the finance guy to spend money in marketing? Because if I'm looking for that number, that CAC number, I don't know how to get that number. So right now, let's say hypothetically you spend$0 on marketing just for shits and giggles. So it's like, well, what's our marketing expense right now? Well, it's zero. You could just reframe that question, which is like, what do we like, what do we pay in premium across our systems, our service, and our ingredients that increase the virality or word of mouth from the business, that alpha, that spread is basically the marketing, you're just doing it in the form of product.

54:39But to get that finance guy to open, like, you need to have a grand opening playbook that needs to include what overstaff we do. I mean, what overstaff we do and how much money we're going to spend on ads across all channels? And what are the kind of promotional giveaways that we're going to do in the beginning, unless it's super premium, but even then the giveaways still happen. They're just different. Giveaways are still the way as like grand opening strategies. It's just going to be exclusive and invite only and things like that, but it still works the same way. Okay. Thank you. Appreciate it.

55:08Oh, that was it. Quick question. So who has read my previous last two books? Can you raise your hand? All right. On a scale of one to 10 using your fingers, how valuable were these for scaling your business? Can I get, oh, those look like lots of fingers. Those are at least, it's a 9.7 thumbs out of 10. All right, well, the rumors are true. Let me grab the third book here that's coming out. About$100 million money models. It's finally coming out. Who's stoked? All right, we already have 200 ,000 people registered. I've spent so much money in the launch itself, literally multiple millions of dollars, way too much.

55:47And the reason I've done it is because I actually want to blow you guys away But the best part of the event is that the tickets are absolutely free and there's also a secret project I'll be giving away as well. You guys don't know about it, but it's sweet It's also free But the only way you get it is if you click and you show up there live at the launch So click register and i'll see you there