Q&A. From Sales God to Scale God | Ep 931

0:00I have now the distinct pleasure of doing lots of Q &As for businesses. Selling to rich investors and entrepreneurs who are trying to avoid taxes. You do$6 million in revenue. You would like to be$24 million in revenue. And what's stopping you is that you're 68 % of your revenue despite the fact that you have seven agents. Yes, seven plus me. And I'm$4 million of the commission. That's a brag. I don't know if you noticed. Okay, cool. So why can't we do more? So each agency of seven agents that now do 2 billion in aggregate. Are they unskilled? No, it's in the industry average. Two of them are quite young and good for that age.

0:42A few hundred thousand dollars each, a month 21, a month 23. Okay, so let's just skip here and say that you have enough human beings in your market to do this. You have metrics for their funnel process. To be honest, I've just been designing the system. So you're good with your model, right? Can you afford to have good margins in your 6 million? So we can skip money. Yeah, we have about 4 million there. Cool. Fantastic. And that's tax-free, by the way. Manpower is the issue. There's one unique issue in my market, which was... So it's manpower is the issue. Why can't we do more? So what's the unique thing about your market?

1:25Yeah, so in the UAE you need the office before you can hire the person. You can't hold this because everyone needs a visa. So you actually have to make a big leap, take the office for 40 people and sign a four-year contract because the government will come inspect. How much does that cost? The office that we're negotiating at the moment in dollars, like 350 ,000 plus for that. per year yep okay so yeah when the question if four million profit yeah but you can make three point six and then have all these getting opportunity you know in the office now your profit re-investment in growth yes yes what's the issue hiring the talent because because I'm so that's not the problem anymore so we need to lower risk.

2:17Thanks for being a support by the way. I've had a good year. Well not that good you gotta scale. So your market's obviously not an issue. Yeah market's so good. Okay so let's take out your four. Two million is what it is and so seven people equals two million dollars so let's say three hundred thousand dollars per person just using rough math. So if you want to get to 24 million you need 80 reps. Yeah. Okay cool So you need whatever 73 more reps than you currently do. What are you doing right now to acquire agents? Yeah, no much like nothing to be honest. Yeah, nothing. Well, yeah, that explains the Yeah, we've only got four desk space left.

2:57So in this like I'm so past this So I'll give you this right there are some negotiations that I have made in my life that were so dumb in retrospect and put it differently if you're going to get office space for sure if you want your goal right the difference in cost of office space between this space and a better negotiated space for the same space or this space and yet another office a at a good price or office a at a mediocre price versus office B whatever the delta there is you negotiate to$300 ,000 a year so you save 50 pounds who gives a shit right sell a house whatever the point is that let's say it takes you extra time it's like you make five hundred thousand a month right now yeah so what's that that's two and a half days of work is generated right you can generate the difference in two and a half days if it takes you a month extra to try and nickel down who cares you have the one you're doing right now we had to submit a plan application basically waiting on that and then we're done price is negotiated it is negotiated I mean We're trying to get approval from the government to change it.

4:07Okay. So you're going to do this space. We're going to have desks. You have four desks open right now. Yeah. Okay. So that's like 50 % growth. So why not more? I guess I'm not. I don't take the time to train people as much as I should, so I need to hire that out. Because, see, I'm at a lot and it's low risk for me. And better for me to keep billing while I'm billing. So I need to hire the person that does the hiring. I'll softly push back. I'm not against it. this is more just figuring this out. At some point, your identity will have to shift from sales god to sales training god. And it'll be about not how good I am at closing, but how good I can make anyone at closing.

4:51And so fundamentally, you do behaviors. You do a big laundry list of behaviors that you do. And you being really clear about who those are, and this is what's tough with winners in general, is that a lot of people don't know why they win. Michael Jordan, way better player than coach. But there are things that you do that if we codify those things, we can get somebody else to do those things. And if we do that, then they'll sell more and make you money. Right now, you can outburn anyone. You will not be able to, in the business you want to build, outburn everyone. And so the sooner you can bridge that gap, the sooner you'll start building the business you what you want.

5:28Now I'm sure on some level, your ego is tied to how much money you make, but like big game, right? No one cares what you make. Yeah. They're going to care that you built an infrastructure that has 80 guys or a hundred guys that's knocking 30 million a year on, and you're four. Yeah. Right. And I'll say this. I think you keeping your chops, being the aspirational person, I think there's elements of that, especially in the space you're in, makes sense. I think that if you were to say right now, 25 % of your time, so you lose a million dollars a year I'm saying roughly you hard block for reinvesting in the team you will get disproportionate returns we'll make more than a million dollars back getting each of those other guys an extra one deal a year yeah it's also like I do all the content so yeah that needs organics like yeah so the time is yeah so it's also okay so back to this what do you have to do to get where you should fill those like tomorrow right you have four desk why not use it yeah But your entire marketing, you are in the hiring and training business, ironically.

6:32That's the business you're in. He's our president here at DCQ. He was the former president of Real Brokerage. He's super familiar with the space. Put all this time together. Hiring and training. All recruiting. All they did was recruit agents. And so he knew that they had a system. If you work through our system and you have our resources, you're going to sell X houses per year, period. So once you know that input output, it's just like how many people can we put through this black box? Right now you don't have the black box because it's up here. So as we come through the process now, we get to document the successful sales.

7:03In each step and then try to get it. When you walk into a house, where do you sit? Has he been walking through the process of selling a house before? No, okay. This is called the gameplay. Let's walk you. Whatever. You have to script all this stuff out. Yeah. Anything someone says to a customer should be scripted. Okay. Okay. I think you actually can get to 24 million dollars a year. You could totally do it in 24 months if you shift your perspective from sales god to sales training god or sales recruiting god. Yeah. Right? To take that leap when the new office is done, you can start trying to take it now.

7:35And I think that long term, the business that you want to ultimately build is going to be one where agents that are already good, that are already doing 1 million, 2 million, 3 million, are attracted to a brand because it's big enough that you can start feeding them leads and then you don't have to start taking these people from zero to hero you can just take heroes and become superheroes yeah that's where you want to be of course we have to build a brand going from seven to call it 20 or 30 and then this firm going to call it you know that'd be like 12 inch maybe 15 million a year that you'd be doing and you're doing a million month plus right you can actually reinvest a portion of those profits into consistently reinforcing your brand the long term your big brand should attract talent and reinforce high status so that people would rather be with you and get mentorship and help from you for their careers thank you thanks guys make your girl feel nice you know i probably didn't know this but i'm your long lost chinese cousin from australia i believe you my name is max i take your mission very seriously within 24 hours of your book on Chikoban Manfego.

8:41I was so excited. I had eight shots of coffee and I saw the light that morning. My study is a school community called The Mani School, inspired by you. I do what you do, but for the Chinese entrepreneur. I had 75 members join within the first week, charging a thousand dollars each. Lifetime, monthly, one time? I'm doing a funding member stage, so it's one side for life, and then I'm going to do a thousand dollars. Okay, got it. I've got two questions. The first one is, I really want to reach the 1 million monthly rep targets on school as soon as I can. What do I need to do? Right now you're at 75k total.

9:19Yes. Okay, so what did you do to get your first set of customers? I have a book. I have about 20 ,000 subscribers and I summarized your three books in Chinese. What am I doing? If you're like, write another book, Alex, you need some money. What is the consistent value that you provide to people in the community? So I've done this for many years and I've made... I'm not summarizing a book. Okay. He's like, I think you're content doing that too. I've been a small time KOL in Australia for the Chinese. KOL? K-opinion leaders. Okay, got it. So we... I have a group of audience. I've been a small time KOL in Australia for the Chinese.

10:05overseas Chinese entrepreneurs who are studying are making some money. Okay, got it. So the thing with membership, who here is a recurring revenue business? Well, I'm going to go a little deeper on this because it's probably valuable for a handful of you. In order to make a recurring revenue business, actually recurring, one of the big mistakes in the education business, which is the way we're in right now, is that people will take something that is inherently valuable and try to bill for it like it's consumable. so education has super high one-time value right the day before you know how to advertise advertising is a plumb believably valuable the day after you know how to advertise why would I pay for something I already know how to do it goes for a huge to zero that is the problem with education generally everybody who has an education business wants to build continuity continuity is very hard to build if you surely have education as the primary value proposition in a school community or any kind of recurring revenue business, you need to create or at least demonstrate consumable value.

11:09I'll give you a couple examples of this. So there is a super low-churned community that does 3D printing in school. What they do is they find the hottest trending items and then they create the 3D blueprint. I don't know how this stuff works, but like 3D blueprints and then every week they upload those blueprints to their community. And so because it's trending, it's new, it's consumable, you consume this week's things and next week's the trends are different right news in and of itself is consumable last week's news is no longer viable this week's news is why news subscriptions do work right different example there's a real estate business and they did wholesaling they would find all the hot deals in an area pre-vet them do their calculation burn say these are all the hot list and so every week every local market people in their community would see the building if they liked it they already knew it's pre-vetted but that creates this consistent thing that gets consumed.

12:03And then next week there'll be new deals and some of those deals are gone. Like Gym Launch, we made new ads that we tested every single month that we would then give to the gym owner. So rather than spending money, wasting money on production and testing ads that don't work, we would pre-film, test and hand them only the winners. And it would just take winning ads and run them. But what do you need next month? More winning ads. And so that's what gave Gym Launch the super high margins that it had and kept it sticky because it was media of functionally rather than quote education and so we sold the box which is like this is the gym lunch system this is how you run the gym this is the price point the sales process once you know the sales process you know the scripting of the bundles you have the white label stuff you got it it's zero value now so what we do is we want to sell like if you have inputs you've got a black box and then you've got output being money right this is your one-time thing that's very valuable you can only charge for once this is much smaller be charged for it on a recurring basis you sell the inputs to the machine so with your business you will probably have to niche down which is why niching is so valuable because you can actually create the machine and then sell the inputs like I couldn't make ads for a hundred different businesses because they're all different I can't test a hundred different businesses if you have a super new or beginner network you teach them one two or three different business models that work and then you sell the inputs same way if you have medium and larger business owners it has to be about something different which is probably going to be network it's going to be access and group negotiated discounts that you can do on behalf of everyone and that is to pay value much less than something that's one time that's going to immediately make them more.

13:52Sometimes I think this is where a lot of entrepreneurs make mistakes is that there needs to be a very big discrepancy between what you charge that one time versus the true willingness to pay for the small recurring revenue component of the business. That's okay provided it's sticky right because if you charge$10 ,000 up front and then$500 a month after that it probably would be relatively sticky if someone's willing to pay$10 and it's$500 a month. As long as the$500 a month was still like 10 ,000 buys you some time but as long as the ongoing value surpasses the five usually by three or four x and then you're good to go so I really just back into how can I provide value to all these people and ideally in what way can I make it so that each additional member does not detract or dilute the value of the community but actually adds value functionally that's what a number effect is okay does that help?

14:37Second question What would it take me to become your global Chinese partner to help share your message with 15 million overseas Chinese entrepreneurs? You'd have to have credibility. Real talk. The reason that I think the content that I have has been able to perform really well is because I had the backdrop of the proof. The Alex Romozi brand was built off of a$100 million net worth prior to this. It wasn't like coaches, coaches, coaches about whatever. I've already done this and that's my proof. I don't need to do this. I'll do this because I like it and I have other missions in my life. But that proof is the backdrop that everything stands on.

15:20If I were to partner with someone, I want them to be bulletproof from a proof perspective in terms of what they had done to prove that they were. Because anyone can repeat the words. I mean, shoot. Literally anyone can repeat the words. The idea of like why does my content outperform yours? it's because the messenger is 80 or 90 percent of the context within which the message is received elon can tweet i'm shitting on a toilet right now and it'll get 200 million views because elon's the richest man in the world that backdrop is so embedded in the message that they're inextricable and so obviously there's core components of value but the why should i believe you is always the big blaring vegas lights up of everyone's head why should i because if you think about why why is authority compelling, right?

16:05Authority is compelling because it actually decreases risk. And so we listen to an authority because we don't have to spend nearly the mental effort to deduce whether this is true or not, or to what degree I think this is risky to follow. If Warren Buffett gives some sort of investing advice, most people would just say, Warren Buffett's one rich man in the world. He's arguably the best investor of our generation. Therefore, I will just listen to him. It's actually a more efficient way to consume information is to follow authoritative sources because it takes less cognitive load that being said being high agency as a person you should separate those things people aren't in general but if you are a high agency person you should be able to separate messenger for message no one does though and so for me let's use napoleon's quote i'd rather have lucky generals if i were to do something like that i would rather somebody have a big proof point that they can sit on then all of the content makes sense within that context thank you thank you Thank you.