Scaling a $300K Moving Company in 60 Minutes

0:00My name is Alex Hormozi and I've been in business for 15 years and I recently broke the Guinness World Record for the fastest selling nonfiction book of all time, making over$106 million in a weekend. And this is Scale or Fail.

0:19Good morning, Alex. Good morning, man. How are you doing? Good. Great to see you. Good to see you too, man. So, tell me about the business. My name is Nas. I'm 29. I'm the founder of Flexed Audio Moving and Delivery. We did about$300 ,000 over the last 12 months, profit being 62%. Our goal is really to expand to multiple locations with$2 to$4 million per location in the next two to three years. We'd love to paint the matte pink with our pink trucks. Walk me through the business model. Most of our business come through local residential moves that represents about 90 % of the revenue. We charge it based on an hourly rate.

0:54It's$165 for two professional movers, plus$150 for the truck and equipment. Are you the cheapest? No, absolutely not. Are you the most expensive? Up there. Okay. And how do you get customers? So being the second highest and best-rate moving company in San Diego, as you can see, like most of the revenue would be from Google Maps and SEO. It's kind of like organic. Costs about$1 ,000 to$1 ,200 a month for SEO. So the main winner right now that we've been testing with would be the realtor outreach. Tell me about this realtor thing. So we would reach out to them and they would tell them, hey, if you have anybody moving out, we'll give them that little offer of anybody over$2 ,000.

1:32Then we will give them$250 off. So for the realtors, the job is like, they pay so much. For example, this month, out of 17 jobs on Google, we made$16 ,000. Okay. And out of six jobs with the realtors, we made$15 ,000. So it's over$3 ,000 per job with the realtors compared to any other channel. Okay. Anything else that's stopping you from scaling? Just not enough leads. We could easily double up the business. But as of right now, just not enough leads. Okay. Why do you even want to grow the business to begin with? Like you're already making money, right? There's different reasons. Number one is that my wife just quit her six-figure job about five days ago to bid on me.

2:14I know you heard that a lot but this one is real so she grew her job she's been around me she trusts me on doing this I'm not going to let her down and then two I've had guys that have been working with me for the last few years and these guys all they're asking for is just stable work so they can feed their families three with me my mom worked extremely hard for us to be here coming from Morocco her only dream in life is to own a house and it would be the reason make that you know a dream in reality and last but not least it's kind of like a little bit personal people that have been against us it's not really to show them that they're wrong but just to prove myself that I could go a lot further.

2:44To show that you're right. Sure. No, I dig it. Okay, cool. This seems pretty straightforward. I've got a handful of things that I think we can do. So let me just walk you through how I kind of think of this large scale. So I think we'll start with the offer, all right? And then I want to work on the sales process a little. And then we'll talk about this realtor's thing. And then we'll go traffic. So if you think about fixing a business, I always fix things from back to front. So it's like the thing you sell, how we sell it, who we're going to sell it to, and how we get to find out about it, right?

3:21Okay. If we're talking like big picture, basically you will become a commodity if you're using the exact same measured unit, right? Because they're just asking, what's the hourly? I'm guessing a lot of people get on the phone, right? Yes. What's the price? Yes. Right. And so I think if I were you, I would break that frame and just say, we don't do it by hourly. We just do it by job. and I can give you an estimate because at the end of the day, because someone might respond back, well, I just need to know what the hourly is. It's like, I can't have the guys drag ass and take all day. You'd rather get done quickly rather than take a long time, right?

3:54And you want it done well. Well, that's what we'll do. Yeah. Because that'll get you out of this kind of like, it's 120 here and there were 125. It's just like, it doesn't matter because they could take eight hours and I could take four. Yes. Do you know what I'm saying? The only issues with that is that a lot of these people would like to tell you what they have. And you can't really estimate that if you do a flat rate. think about like this, like in order to scale the business long-term, it's like, we want to have something unique. That's, that's somewhat different, right? If we can now, if we're also selling a commoditized product, which is just sheer labor right now, plus a truck, there's not a lot of differentiators there besides maybe like pink.

4:30I'm trying to think of a way to get you out of the hourly race if possible, because right now you're servicing kind of the lower end of the market, right? If you're servicing renters and kind of smaller homes. Because like, I'll tell you, when I moved, I honestly have no idea what I paid, but I'm guessing it's probably in the neighborhood of like$25 ,000. I have no clue. But the idea was I'm going to leave my house and then I'm going to show up at the other house and it's done. That was what happened. Yeah. That's for the rich. Yeah. No, exactly. Well, have you heard my stuff? Yeah, yeah, yeah, yeah.

5:01Of course. You know where the money is? Yeah, yeah, exactly. Sell to the rich. Right. And so my point is not like, I'm not saying you all of a sudden overnight become ultra diamond, you know, whatever. But if you, what you realized was the realtors, it's not that the realtors are special. It's that they're giving, you got a taste of selling to people who have more money. Of course. Right. And so you made way more profit on those deals than you did on the, on the kind of generic. And so that's why I asked about the offer because to me, there should be a white glove offer. To me, that's, what's missing.

5:30so i thought about that i did it um it worked it worked a couple times but then i kind of just turn it off okay why because it wasn't selling well okay well that's fine the offer wasn't good so i'm not i'm not thrilled right now um because you're just like i'm a little bit more expensive and people get a little bit more value than they would with other people and it's very hard to claim anything that's different besides the trucks being pink and the guys being better and no hidden fees sure because material is included like shrink wrap and moving buckets and all that stuff is included compared to other companies they would just throw an extra 600 at the end of the bill and you have to pay for it because you have absolutely no option but they don't tell you that until it's done but people still see the hourly rate being cheaper somewhere else it's what's going to save the day no i know i know i know don't love it i'm going to shift gears Let's talk about this realtor thing.

6:29So why don't we say, just for fun, for shits and giggles, right? You can have a VIP moving level, right? And then you have your standard moving level. I think that the realtors would be better served. They probably don't care about the$250 because if they sold the house, they made way more than that. It's irrelevant. They want the referral and they want the people to know that it was a great experience. And so I think you probably get way more referrals if you said, I'll give everybody who you send a VIP service for the price of standard, that will probably mean more to them than getting$250. And then for them, they'll be able to be like, hey, if you go through me, he'll give you the VIP level service at the standard rate.

7:08Got it. To me, I think it's a lot more compelling. But what would the VIP be? I don't know. Yes, let's make it up. Okay, okay, okay. Yeah, that makes sense. In the cloud. Yeah, well, I mean, you could offer to unpack and if everybody says no, then that's that, right? It's like, we'll even unpack it and then people might just opt out. If you know most people do, then it's great. It's almost like a false offer. Okay. Because you know more about the customer than they do, which is the whole point. Or the VIP could be, I can give you like movers with 10 plus years of moving experience that would take care of this entirely.

7:36Only reason I don't like that is from a model perspective, that'll be more difficult to scale. And I don't know how much that'll matter. So I'll tell you a different version of this, which is like, instead of doing 10 years, it'd be like every mover has over 50 moves. Okay. And so I'll give you an example. So like when I had my trainers at my gyms, anyone can be a trainer literally anyone can be like you i have low skilled labor and then you can have a certified trainer which they go through accreditations versus not and you can also internally certify and so what i did was i created three levels of internal certification i'd be like you're gonna have a level three master trainer most people are like oh wow that's awesome but it's just like they just had to do some stuff and for me a level three was like they'd done a thousand sessions fair enough or whatever and so for you you can be like you have a level three mover so we have different moving movers different for different skill levels.

8:18And so you'll have all level three movers. Because what you're trying to do when you're selling a commodity, you're basically sowing seeds of doubt against the competition. So part of what you said was, well, they're charging 120 an hour, but that's because they're going to nickel nine me over here. I'm not going to do that. That's basically sowing some seed of doubt saying, I'm actually different. That's basically what you're doing. You're saying we're not the same. Basically, how many other things can we do there? So we have speed, risk, and ease. So speed, since you're charging hourly, is probably not going to be a thing.

8:43Now, you could do speed in terms of like we can come tomorrow but they probably have a moving day that they like are planned out doing a lot of times you do last minute moves and we charge up a little bit yeah oh yeah people call like today for today it's like my movers bailed on me and that's the reason why a lot of people would go with cheaper movers and then do you have the same day premium i'm not premium we're kind of like okay because like sometimes we're so desperate for jobs i'm like yeah whatever i'll just take it you know i know got it okay um okay so you have the fee that other people are nickel and diming.

9:16And then, so another kind of seed of doubt, right? So there's risk, speed, and ease, right? And so what we're hitting on with this kind of like master mover, if you will, actually sounds kind of nice, master mover, is the risk component, which is, listen, believe it or not, a lot of my competitors, they can win on price because they're just literally going to take someone off the street. When I say literally, I mean literally. And you don't know if they have a record, you don't know like what's going on, right? None of my guys are, you know, ex-cons. And on your move for VIP, you get all level three master movers who've done at least 50 moves or 100 moves, make whatever you want to, right?

9:46So how does that sound in terms of the VIP? It's going to be around risk. So it's like, we're going to have this higher tier of mover and there's no extra thing besides the labor and we're going to include all the materials. If you do full service moves, that's like packing and unpacking. I love that a lot. Okay. So that to me is what you give these guys, the realtors, and you already use master movers as is, right? Yeah. So there's really no change between that and standard. It's just that if you have standard, you have the option of using cheaper movers. If all your guys are already, quote, master movers, then great.

10:17So I'll just go here. But basically, our VIP is going to be pack plus master movers plus material. And then standard, I would say it's still pack, but it's just not master movers plus anyone. So that's probably not too big of a cost for you. For me, no. Okay, perfect. Well, then that's about the$250, but this feels significantly more premium than just doing 250 bucks off or 250 bucks to the realtor. Okay. Do you like that better? I love that a lot. Okay. So also when you're, when you're getting on the phone, I think you can just basically have these, these tiers. And I would start with VIP. That's how you would sell it to anybody or just?

11:02No, I would do it to everybody. I always start high. Okay. Because the thing is, is when you get on the phone with somebody who has money, they don't care. They just want it done. Yes. I agree. And so you have to give that person the opportunity to buy. Now, as soon as I know I'm on a budget, you're like, no worries, then just do standard. Perfect. So most people do this, but if you're on a budget, we have this. And then if someone still objects, then you basically have to walk down the seeds of doubt. So this feels like it's worth diving into a little bit. The issue that you brought up, you said Yelp you didn't like and Google ads you didn't like, right?

11:30Yeah. Right. So to me, that's not a leads issue. It's a sales process issue. Okay. So we have to make you different in some way compared to everybody else. Okay. So we have our factors. So we have master movers. We have that. We have materials. We have that. Do you have insurance or anything like that? Yeah. Okay. Do you talk about it? Yeah. I mean, as an operator moving company, you're supposed to have license and insurance. Great. Great. These are elements, right? We need components to the offer. All right. Because again, think risk. So this is risk. This is ease. This is risk. What else do we have?

12:04We have speed. So I do think that if someone does same day, you can just say we have a same day surcharge of 10 okay just because i want you to get used to charging it because speed is one of the biggest things people pay for if someone had someone back out and they need somebody to move today that's when you can charge yeah right yeah and this might not sound like much but again when you hit 20 locations this will add up because your margins are going to be 70 you might be at 30 and all of a sudden 10 lift or 20 lift all of a sudden you're like, oh shit. And it's all margin. Yeah. Right. So I'll say a date premium start at 10%, but I want you to go to 20 % over time and you can basically keep moving up until they say no.

12:43So these are different components. We have our A, we have B, we have C. We're getting, we're getting little pieces that we can talk on the phone. Right. Okay. What about a cap? Meaning? It's not going to cost more than this. Let's say they do an estimate. Yeah. How likely is it that they're off by two X? Not by two X. No. Okay. But at least a 30%. Okay. So what if we say 50 %? So I'm going to give you a buffer. I'll tell you why I'm saying this. If you get on the phone and say, hey, did the other guys give you a cap? And they'll be like, no. And you're like, oh, well, yeah, that's how they're going to get you.

13:18And then they're like, wait, what? You're like, oh, yeah. I mean, like, I can just take 20 hours to move one thing from here to there. There's not much you can do when somebody's on site. And they're like, oh, I didn't even think about that. It's like, right. So we'll be this and we won't exceed this. unless there's a huge issue when we arrive on site but that's basically like are you the type person who's gonna be lying about this no okay great then it's fine so it will not be more than this and then that way because again we're trying to sow seeds of doubt like if they have two things they're both 100 hour 90 an hour yeah they're gonna pick the 90 of course so we have to be like oh okay got it so what insurance the other guys oh they didn't mention oh yeah well for sure if you're uninsured then yeah i mean that's that's a cost but i'm assuming is nothing you have valuable you know like no i have some things that matter to me it's like great well we have insurance um that we can include do you know what i'm saying with this sale here yeah it's gonna come it's gonna come down yeah and we're gonna we had to get this part here so that when we move to the my brain is going like all over yeah yeah okay but fundamentally because this is going to ladder into this but we have our vip and we have our standard we're going to start everyone here yeah and then we're gonna if they say i'm on a budget we'll say no worries we can do this for you yeah okay you're right yeah it's opening up i love it all right so sales process so you were able to talk to all the people who came in on the on the google leads right yes everybody immediately that's great the main objection we have is always price it's always price if they don't know what else to talk about customers will always go to price if you don't give them any other variables to consider okay and this is what we're trying to do like that's the point of the offers book is like how do i how do i break these two things of price and value yeah right if if there's apples and apples you want apples and oranges and even though you build the same way we like fine i get that can we still make it different enough on all these other things that they're like fuck i need to think about that yeah so when someone when someone calls in what's the first question you ask them the day of the move when are they moving just to make sure we have availability okay so you ask for the day and then let's say that you're empty now what now i do ask how much time they're looking to move like what's the size of the move just okay and you say size of your what's the square footage of your stuff or what no how many rooms we go by the rooms like is it a one bedroom two bedroom and then the time is for example it's a two bedroom i was like great like what are we looking to move yeah and then it asks stairs or no stairs just have an idea like okay like how long the job will take yeah and then where the truck is going to be parked we still want to walk through these other pieces which is okay got it do you care about the the qualifications of the movers that you have you're like i never thought about that you're like oh okay because a lot of the guys uh to have like ex-cons and people are like very uncomfortable with that believe it or not it's actually 20 of the industry i put some stats right yeah it's true no no for sure right so it's like do you care about the world i don't want ex-cons in my house and you're like great so and you're you're in your mind you're like okay they want master movers you're like okay so um do you already have all the materials to get all this stuff packed up and all that oh no you don't okay packing got it right and you're like okay you're like got it so do you have anything that's valued over$500?

16:16Obviously, yes. And they say, yeah, you're like, okay. Insurance. You're just listening, right? Yeah. And you're like, okay. Now this isn't today. So if it was, if it was today, then we'd include the date premium. If it's not, then we're like, okay, got it. So this is what we can do. We're 165 an hour. And if you go with us today, I'll include the master movers, I'll include materials and I'll include the insurance. If they do full, if they do full service, like packing, if we could pack for them, then we can include the materials for free. so that is the offer you were talking about yeah okay and if they're like oh i can't do that then it's like okay we can still do it but we're going to be at standard what's your i don't know if this is going to be the new vip make this 195 and make this 165 whatever okay okay uh so this is vip and this is standard right do you like that yeah i love it it's fantastic it's awesome because that way that way again we're already having a conversation with more detail i just want to give you bullets so that again we want to get on the phones because how many how many are you losing to price oh a lot like 40 yeah okay so so this is important right so we want to make sure that they don't think that they're getting the same thing for less we want them to know they're getting way less for less so the way we've been selling is that if they kind of hit us with the price issue and like hey if you find anybody in this industry in san diego right now that would match our reviews will be their pricing because they don't exist no again that's not yeah but that's they're like yeah but whatever yeah yeah if you can find somebody else that does insurance has has level three movers uh includes materials you know and has a cap by all means uh i'll price match it but like i've never been in the price matching game my whole life i'd rather just be in the value surpassing game which is if these things matter to you we're the only shop in town that does it if you don't care about having x-cons in your house and again i have no beef with x-cons but people have perceptions, right?

18:02If you have no issues with ex-cons and you plan on doing the packing yourself and you're okay with them potentially breaking it because they're not, they're not insuring anything, which honestly it happens in 25 % of moves. And if you're the three out of four, it's great. If you're the one out of four, it's pretty tough. Yeah. Right. And if you have no cap and you don't care because I can come in at$10 an hour, if you want, I'll just take a week. Again, it's like we have to, you have to explain the whole, the whole system. Right. And So what this is called is I call it shifting from local to global, right?

18:30So like you're thinking about this. I am. I'm thinking about this, not me, but the consumer, right? And so all of a sudden you give them way more variables than they thought about because you know more about me than they do. And that's the point of a good sales process. And so they're like, I didn't even think about these things. And it's like, right, that's okay. That's what education is for. I'm educating you right now, right? And so this is what it sounds like you really want. And that's what I can deliver for you. Because at the end of the day, if you get everything on time, nothing breaks, you have great experience.

18:54I was like, is that worth the extra 50 bucks? right it's like oh good good man so this is what i want you to walk through is like this will get you the the deals you're losing you're losing a price because they have nothing else to say they're doing apples to apples you're like no it's apples and oranges but it's totally fair that they're they're charging less because they're not doing all this stuff which by all means if you want us to not do that stuff i can't because i have to have a level service you see our reviews i'm not willing to i'm not willing to sacrifice my reputation for that some people are though because they're in and out of the industry.

19:24They come in, they just start moving for short periods of time and then they get out. I'm here for the long run. Now that we have a better idea of what our offers are, what we need to say is I would include, we'll give them a free VIP upgrade or free white glove if you want to use that term. For anyone who you refer just so they think good things about you. They need to gain from referring you. Their customer has to see them better because they have the hookup. People go to realtors because they're supposed to know the area better and they've done this more times than they have right if you knew everything you wouldn't need a realtor because you already know the houses you already know the deal right so saying oh my my guy i've got an amazing moving company they give all my customers free upgrades that makes them look great right got it okay i love the offer so we did try um sms we also tried emails emails did not get us absolutely zero conversion yeah so sms is what would give us some traction and then we've been trying lately is that we would just go follow them on instagram i think following and DMing would probably have a higher conversion than anything else.

20:22So what we tried is that SMS, if absolutely any response in a positive way, even like liking the text, I would find that person on Instagram, like go look them up and then follow them. Like, hey, I saw you like the message. We'd love to tell you more about what we have going on. I mean, I think start there. But I would take that list, feed it into AI and have an agent search online, find the Instagram and then follow them from my account. Okay. And so every day I would DM 10 or 20 of them because you can't, you can only, you know, DM so many. Now, if they follow you back, then you can DM as many times as you want, right?

20:55So we could do, there's two considerations. So one is we could say, follow everyone. And then anyone who follows you back, then you DM. That's one option. Or you just automatically DM 10 or 20 cold, independent of whether they follow back. Okay. So you would actually do massive outreach instead of just like picking up the top 100 producers in San Diego? I mean, we should do that. I mean, start there. Yeah. That's one of my, okay. My wife could use your job to actually take care of this realtor. So you're going to do your SMS. This is what you're currently doing. I don't think you necessarily change anything about that.

21:23That's fine. The second is the follow to DM. And I would say, like, do you know anyone? We have our realtor special, which is VIP upgrade. I like that word upgrade. Yeah. Or white glove, whatever you want to. Yeah. And so that would be my auto DM back. Now, the third thing that I would do, because this is like a lot of the realtor offices, the brokerages, right? They have five, 10, 20 agents, right? I would want to go to the head of the brokerage and say, hey, I'll do a brokerage level deal for you. We'll give everyone who's an agent of yours VIP, like for free, if we can just be the first people you call when you have a move.

22:04And ideally, it's like, can you integrate us into your packet? Because that's the thing. It's like they give people packets. Right, exactly. So it's like, I want to be the only one in the list and I'll give all of your customers VIP upgrade. You can look at our reviews really good. That's where, because you want integration. Because as soon as you get integrated in their sales process, as long as you do a good job, they'll just, they're not going to look anywhere else. Yeah. I have two that I can like let it call up today and set up an appointment for this upcoming, like tomorrow. Yeah. Because like one brokerage might sell.

22:3220 agents. Right. Well, yeah. 20 agents. And then each agent might sell, you know, let's say a house a quarter on average. I'm just making it up. Right. Yeah. So it's like every brokerage is five houses a month. Okay. That's$16 ,000. Right. On an average of three grand. Per, right? Yeah. And so it's like, okay, well, how many brokerages are there? Plenty. A lot. Right. And so I'd rather you sell one to sell 60 a year. Like that's what's worth your time. Like let Jacob take the individual calls. Yeah. But you should be going out and getting the brokerage who's going to get you 60 houses a year each.

23:02And then like every week you bring another brokerage on. And that means like every week you're bringing another five deals a month on. and it stacks. Right. And then the next bottleneck is going to be you're not going to be able to manage the relationships. It's not there yet, but that's what's going to happen. And so you're going to need to hire one person to full-time manage the realtors. Yeah, exactly. It's just a farmer. My wife is going to be doing that for now. Great. So I think we target brokerages because this is the long-term flight. It's good to have the reviews you do and that's going to continue to compound and all that stuff.

23:33But where I'd like you to get is in the future at some point, you start turning deals down that are too small. Like one bedrooms and small deliveries. You'll be like, it's just not, we're not there. I'd like you to get there because there will be a day where you don't do deals under 3K or under 5K. Yeah. They exist. I know. Trust me. I have to believe that they exist. They do exist. I promise you. Okay. So we have our offer. We have our VIP under standard. Now it's the key thing to differentiate us. We itemize all the elements inside of the sales process. So again, we can further differentiate from the hourly.

24:03If we're going to stick with hourly and we still have to have as many different colors as we can here. All right. Then, and also I'm very flexible on this. This might be able to be 225, like, like continue to keep pushing this VIP level up until people say no, because you always have your backup. You can always fall down to standard, but the people who have money will just, they'll spend more. It's just, it's a different monster. Realtors, we keep doing this, but I think these two will give you more leverage. This one is the biggest one. Okay. Can I ask one question? You want to show up in person here.

24:32And so here's how I do it. This is the process. Once you get any realtor thing, you need to show up in person to their office to meet all the other realtors in their brokerage. Come, come with donuts, come with whatever, meet the head guy and say like, I, you know, I set up Kelly was, was that a good experience? Kelly? Great. I can give every single one of your agents VIP upgrades for all of our moves for free. That's on me just because she was so great to work with. and it gives you something that you can kind of have as a nice experience yeah okay what was the question the question is about the sms like because now i have a list about 12 000 agents what do you think the first sms should be like is it should it keep you the same or it doesn't you're gonna you're gonna see what the response right but would you send the same thing to all of them the smart cookie move would be look up the agent ai can do all of this yeah all this I can do.

25:23In this cloud, yeah. Yeah. So hook up AI to the list, create an Excel sheet that has personalized information, and then have a template for it to then output what you think or what it thinks the personalized first text should be. And it'll give you the whole list of all hundred. You read them real quick to make sure that they sound like they make sense and click go. Because then they could all be personalized. That's what I would test against just the generic opener. Got it. And if you want to be wild, you could probably, are you doing from a you're doing from a true sms right no i was using uh milchimp is that does have like a an iphone like a blue thing blue bubble no okay would you recommend the blue bubble i would give it a shot so i would say for blue bubble and i would say just test it because it's going to be more but if you have a higher response rate then it's worth it with it with an area code that's local yeah and then five for this sms here i guess right here is ai personalization for that first message.

26:22It'll also make it less likely that you get put into spam. Perfect. Because if the carriers see you spend that same thing to 100 people, they spam the number. Yeah. So traffic. So there's a couple of smaller things that I think are worth doing. So right now, how are you getting the reviews? What's the review process? So as soon as we finish the move, the guys just ask for a review immediately. It was occasionally a huge favor. It takes 30 seconds. It helps us tremendously. So what's the script for the guys to ask? If you guys think we did a great job, would you mind leaving us a five-star review?