Speaker 1: 0:00

All right. All right, we're live. Hey, it's Chris here at the surges of income podcast and this is a podcast we're just doing live on YouTube and we're talking about surges of income. We're talking about how to tap into large amounts of income rather than just focusing on raising our normal recurring income. And large amounts of income and surges allows you to really increase your net worth and be able to invest a lot more and be able to create surges of income. And that's what we're going to talk about on this podcast, and I've got some special guests.

Speaker 1: 0:35

But before I talk about my special guests here and talk about what we're going to talk about today, let me tell you a little bit more about surges of income. Surges of income you can find a video on my channel. Just go click on videos, find the channel called Chris Moore Speaks and look at the surges of income video. You can learn all about it, but I'll tell you briefly about what surges of incomes can do for you and how you can find it. It allows you to increase your net worth. It allows you to very much accelerate your wealth, and doing it because you're using income that's not already allocated for your normal bills, something where you can get a lot of income all at one time. So the way that we do this and the way that we teach surges of income and what we're going to probably talk a little bit about today is by exiting a business and having a large sum of money come to you exiting real estate properties, quarterly distributions from business profits, as well as business growth tactics.

Speaker 1: 1:29

So let me introduce you to Mona and Juliana. They are in our dealmaker protege program, also very good friends of ours. Now We've all. We've even looked at doing some businesses together. We're still in negotiations, but I wanted to invite them on because they needed some help with a few things, and what I want to do on this podcast is help as many people as possible, and this is all live. We have discussed very loosely about some of the problems they're having, but we haven't had any discussions past that. So this is a very good time to talk about both of our mouths, or all three of our mouths right here. Uh, not really rehearsed whatsoever. And I do want to remind you, ladies, that anything we talk about, please make sure that you're making an anonymous or, if you don't want the whole world to know about it, be very intentional about what you say because we are live here on YouTube. But welcome Juliana and Mona.

Speaker 2: 2:15

Thank you, thank you for having us.

Speaker 1: 2:18

Oh, it's a pleasure. So we first met in September in Las Vegas at Dealmaker Live, which is an event that Carl and I attended, where we teach business acquisitions, where we have one of the largest business acquisitions training companies in the world Dealmaker Well Society and you all came along with Abraham Gray. You all have been working with Abraham from quite a while, but you also jumped into action yourself and you've closed a couple of business deals even since September. Congratulations, you have a lot of people who are looking up to you inside our program, so I just wanted to give you some acclaim for that.

Speaker 2: 2:52

So great job, thank you, thank you, thank you, thank you.

Speaker 1: 2:57

So lots of different irons in the fire, lots of different businesses, and what I want to do right now is maybe just tell us a little bit about who you are, and then let's just get right to it and talk about what. Can I help?

Speaker 3: 3:09

you with today Sounds good. Um, so we're mom and daughter and our background is in real estate. Um, i have had my real estate license for over five years. We've been working with family, We've fixed and flipped houses for a really long time, and we got introduced to buying businesses through Abraham. Um, juliana was actually one of Abraham's first um business buying students, and so that's kind of how we got interested in the in the business buying process?

Speaker 2: 3:47

Yeah, I was interested. I was trying to drag Mona into it back when I was a kid. But there's not a lot of information out there on like business buying, especially like when I tell my friends about it they're like what, what are you? doing Like what is this? So I'm glad like you're doing this and getting this information out there.

Speaker 2: 4:07

So my background is in like therapy and like mental health and yoga. So like this is like a way different spirit for me, way different like mindset and everything. So it's been a lot of learning and growth. for me It's just been like teaching me a lot.

Speaker 1: 4:25

So awesome. I mean it's so much more fun to do this with somebody that you love and care about and where you can be successful together. Success is lonely when you're on an island, so I think that's really cool, that you have each other as well. as well as many hands make light work, so it's an interesting. all the businesses I own I'm only the sole owner and just the one pass through company where a lot of my revenue comes from, but everywhere else I'm a partner just because I don't want to get over extended seriously, i don't want all the liability and I think that's a big part of it, because I don't want to get over extended on one risky business.

Speaker 1: 4:59

but if there's four or five of us and as partners inside of a business, something goes wrong, i mean we can really tackle it a lot easier together, especially if there's a financial hardship that comes from it. So I think it's cool that you're doing it together and also I believe you all are partnering with tons of other people as well.

Speaker 3: 5:14

We are Yeah Yeah You you introduced us to that concept when we first met We actually one of the parts of the business find that we enjoy the most is getting to know people and making those connections, finding out what somebody's talents are and then figuring out oh hey, we have a deal over here that fits this person's background and talents, and then we collaborate together. So that's been one of the best parts of it for us and it definitely opens up your deal origination.

Speaker 1: 5:42

There's so many more opportunities when you look outside of just the deals that you've originated, when you be yourself out there and say, hey, i'm willing to partner, i'm willing to work with you at the same time. So I think you're really cool. Uh, there's a lot of people out there who need what you have and if you put yourself out there, there's a lot of opportunity there. So cool. Well, let's let's dive right in. Just to save some time. You have several businesses. We can talk about whichever one you want to. Uh, i think for Surgeons of Income podcast really focus on, probably, business growth strategy today, which feeds business profit distributions, which feeds the built to sell model, so you can't simply exit the business and make a lot of money. So let's talk about the topic here. So, which business do you want to talk about specifically?

Speaker 3: 6:23

and how can I help? Okay, so we want to talk about the cleaning company. Um, it is our newest acquisition. Um, so the cleaning company was, uh, when we call it a new deal, meaning that it was a seller finance deal. Um, we did make a down payment on that deal, but the seller carried the note for the balance of it, so we're making payments to the business. Uh, you gave us some strategies for, you know, being able to grow it and maximize it in order to implement most of what?

Speaker 3: 6:57

um we talked about about a month ago Um but we want to find out if it's possible to have Surgeons of Income in this business, and if so, you know how? how can we do that?

Speaker 1: 7:11

Absolutely So right out of the gate. When you have a business where Surgeons of Income can sell distribution, so you've gotta get the business profitable enough where everyone can make quarterly distributions. And number two is is it gonna be something that you can sell for a large exit right? So step one I think going into any business we should have the built to sell mindset. We should be focusing on the ability to exit the business one day if we want to, if the opportunity arises, and to have something built to sell. It's a very intentional process of making sure that you're not in the day to day activities. That's only one. You know, there's a great, literally a blueprint roadmap in the book called Built to Sell, and even in the appendix they give you the seven steps, seven pieces of advice from Ted about how to have a business that's built to sell.

Speaker 1: 8:03

So have you read that book Built to Sell? No, we haven't started that one yet. Oh, my goodness. It's about a five hour listen on Audible and it's just a story about Alex Stapleton and the Stapleton Agency and how he was a generalist agency. He did a lot of business with a specialist where he had to get rid of all of his other clients, thin out his, his employees and only focus on specializing in the one thing which turns his business in from a service business to a profit which was able to raise his multiple. The book talks about and explains a lot about the difference between a strategic buyer versus a financial buyer and then really how to work your way out of the business, productize it and then have very predictable streams and machine of new client acquisitions that allows you to have a business that's going to be a profit. So you know when you're going to get a lot of value at reading that book and really just kind of internalizing it and slowly start taking action towards having a business that's built to sell, which is interesting. Throughout that journey, in that process, you're going to have a business that's much more profitable, that doesn't need your day to day involvement, which is what I probably imagine you're having problems with right now is yes, maybe you're getting pulled into it a little bit more than you'd

Speaker 1: 9:12

like Yes, that is correct, it's a lot of work that's going to be done in business and it's all about expectations, right? They say the gap between expectations in reality is called disappointment. That's from my friend Clayton who taught me that and it's very powerful concept, right? Sometimes we walk into an acquisition and we're not expecting to put in the amount of work that's necessary to get it to run itself, or we didn't look at the business the right way up front to determine how much effort, our time is going to take from you to get

Speaker 1: 9:41

the business to run itself. So I think that's a great transition. Think about that and look at that as part of the process of buying it, where, hey, there may be a lot of opportunity, There may be a lot of expansion. How much time is it going to take from me? Am I able to do it? or do I need to actually bring in another person to operate it from the very beginning as a partner? So it's another concept to look at. Um, you know your transition period with the seller. How long was that?

Speaker 3: 10:09

period About two weeks now. we needed him for anything, but it's a really simple business, so the two weeks was adequate. It was enough for us to get in there, figure out what was going on, where the opportunities were and where the warts were. That was not a problem at all.

Speaker 1: 10:28

Okay. So after transition period, who's actually running the business? I am, you are Okay. So when you're looking at a business and you're saying, okay, who's running the business now? And when you're looking at larger businesses, you can break it into three different things. Right, You got sales and marketing, operations, hr and finance. So when it's a smaller business, a lot of times a one person does all of them, or maybe two of them, and the one thing's outsourced to a CPA or a bookkeeping company, right? So when you jump in and you take over that type of business, you got to say someone's going to take sales and marketing, someone's going to take operations. I think you already have done that. You brought somebody in as a partner, take over sales and marketing. You're still wearing the operations hat.

Speaker 1: 11:06

So I think the path to least resistance to getting yourself out of that business is two fold. Number one you have to say the income from that business. Now, if it's there, is it something that I need to live off of? The answer is no. You replace yourself immediately, because you're not having a net gain or a net loss, by not needing that income, right? So imagine you're operating the business. You're able to pay yourself, maybe even a couple thousand bucks a month. Well, go find somebody else in the business, or go find someone you can bring into the business maybe on a hybrid performance base and salary roll and pay them to run that business to free up your time. That's the easiest way to alleviate that time suck immediately. If you needed the money coming from that business, then what you would have to focus on is maybe a 30 to 60 day ramp up period to get revenue and profits higher where you can take the money and hire somebody.

Speaker 1: 11:57

I think you just have to look at which one of those would work best for you, kind of in that situation, and every business is different, right? So I think that's one way to do it. The other way to do it is to understand around what's it going to take to put somebody who maybe is in a lower skill type work environment into that operations role and have them still do well? And that comes down to SOPs and understanding the documentation process. So you're teaching people a process and it's not revolving around the person itself.

Speaker 1: 12:30

So I don't know if you started that process around kind of doing the standard operating procedures around everything it takes to run that business correctly. Have you done that yet?

Speaker 3: 12:40

We have, so we're building that as we go. Business came with someone who's in the role of they call her an office manager. She handles the scheduling, invoicing and customer service, and so she's been with the business for about 15 years Wow, and the challenge that we have found with getting our SOPs implemented is that she knows the business better than we do. Like we're coming in and learning, so, as we are kind of putting those best practices out there, what we're getting is well, this is the best way to do it, so we're working through that with her so that she understands. Well, the way that it has been done in the past has gotten the business to the point where it's at now. We're trying to start from here and go forward, and so that is definitely a process, but that's something that's happening right now.

Speaker 1: 13:37

So that's still. To me, that's still part of a transition period, even though it's not the seller transition, it's still the transition of being able to take it to the next level, and maybe just that's a part of the process you're going to have to be a part of until it's finished, and I don't think there's any shortcuts or fast forward buttons for that, and I think doing it one time and doing it right as you're doing it now is probably the best way to do it. The only question would be is how much time is that taking you? Could you all maybe block out a few days and just be exclusive, just to the focus and just have the three or four people in the room that need to work on those SOPs and extract that information from the manager and just do it all in one condensed time period, because right now maybe you're fitting it in here and there when you have time or you have everything else you do, so maybe giving it more of a focused effort for a couple days could get you there faster.

Speaker 3: 14:33

That probably would be a good idea, instead of like every day, a little bit every day, Right Yeah putting it on project status and just knocking it out and having everybody come to an agreement that this is what we're going to do and this is how we're going to move forward.

Speaker 2: 14:45

Well then, there are times where it's like we have to put out fires and that kind of gets in the way. Like I hear when you're on the phone with like Bank of America or something, because like some check didn't go through or something, yeah, it's like only they could talk to you or something.

Speaker 1: 15:00

Yeah, Well, that's still going to be an edge case at some level. I mean, if you get together in a room for three days and just knock it out and you have little breaks, or if you need to get interrupted here and there and have them keep working without you, you just have to do it, i think, sitting together in a room and just knocking it out, maybe the fastest way, and then having the next steps already planned out as well. So after you have these SOPs and you have everything kind of extracted from the manager's brain and from her experience and you're able to kind of funnel that, what are you going to do with it next And I think that's probably a big part of it as well is really understanding what's next past that step. So have you thought that far ahead yet?

Speaker 3: 15:37

Yeah, so we're working on a lot of things simultaneously. One thing that I feel this business needs is either an inside salesperson who really is dedicated to working with the leads that we are originating, because one thing we know how to do really well is to originate, and so we have leads that are coming into the business from several different sources, and those leads right now are just being split between the office manager and our partner, alexis, who's kind of in charge of sales. But I know if we had somebody out there who was dedicated to bringing in new business and dedicated and to solely work in the leads that we are generating, we could really like increase the revenue in this company fairly dramatically.

Speaker 1: 16:24

So let's table that for just a second. Let's get back to when I said who's operating the company, you said you. So help me understand exactly what that means. What are you doing right now?

Speaker 3: 16:34

Right now I'm a billing clerk. I see what's happening. One of the areas that this business needed a lot of improvement on was actually getting the money that was being generated in the door. So they had a billing policy where they were allowing customers seven days to pay. So instead of paying at the time of service, they were giving them basically a week to pay And they have all these different sources that they let customers pay by Zell, They let them pay by Venmo, They let them pay by Cash App. Some of them are still collecting checks, So there's all this business around the invoicing system.

Speaker 3: 17:13

So that I've been working on for the last six weeks getting that more streamlined so that customers understand that they're expected to pay at time of service and they have easier ways to get the revenue into us ASAP. The other thing that we are working on is because we're focusing more on commercial commercial accounts. We found they expect to be able to pay in 30 days. Not a lot of you know commercial accounts want to pay in, you know, net seven or net three or even at the time of service.

Speaker 3: 17:45

So, I've come, you know, up with some creative ways to make the businesses more comfortable with being able to pay immediately. So those are the kind of things that I've been focused on is getting the revenue that's already being generated actually in the bank.

Speaker 1: 18:00

Makes sense. So what else? What else are you doing?

Speaker 3: 18:05

So I did institute a system of just having one person that I deal with. So I haven't met any of the cleaners. I only deal with the office manager, and so she handles scheduling, she handles dealing with the cleaners. I do handle if there's anything that you know goes wrong as far as like a customer not being happy with service or anything like that, I kind of jump in there and make sure that that customer is taken care of, just because it number one is it's kind of a gift that I have. And number two, if a customer is dissatisfied, I want them to know that as the owner of the company, I'm paying attention to what they need. And then I'm kind of facilitating things on the sales and marketing side, helping Alexis, who is our partner.

Speaker 3: 18:56

look at some different ways for us to be able to get business, i'm setting up some strategic partnerships. We have other people in the cleaning industry that we're kind of doing co-ventures with, so they have a steady source of leads and we are basically providing the cleaners to execute those cleanings.

Speaker 2: 19:18

So a lot of different things, so setting up systems. Yeah, setting up the systems Yeah, setting up the systems, yeah.

Speaker 1: 19:26

Love it, love it. So let's tack them a little by little. I've been taking some notes. I'll keep you posted on social media. I the first part is you've got to get finished with the billing process and resetting that up. Did you get a new software? Is there a software that's already in play that you're using?

Speaker 3: 19:40

Yeah, so that there was a software that was in place, but it didn't Give us all of the KPIs that we needed very easily to get from the system. So I wasn't able in this software, for instance, to look at my commercial account revenue versus my residential account revenue. And there was some other information that I wanted to have as reporting features to my partner, who is Abraham, and That information just wasn't available.

Speaker 1: 20:07

So we do this, which softwares for that and a couple other reasons and that process is in place right now, so the big focus is getting as many of the residential clients as possible on do it do on sale or do up front. And then you're working towards your commercial clients getting them away from the net 30 mindset of how they've always done business with with vendors like yourself, and more towards focused on paying up front or even a lot closer, maybe closer to a net 7, so you can have a positive cash flow Business rather than having it in a rears.

Speaker 1: 20:39

Yes interesting, okay, perfect. And then the other thing is We talked about sales and marketing. Lead generation has not been a problem for you, just being able to kind of utilize that, the leads that you're getting, and really convert them at the highest level. And Then also touched to briefly on kind of the talent funnel and making sure you have a steady stream of new people Who can come in and actually clean And in kind of a management system around that. So I think at this point you're doing all the right things.

Speaker 1: 21:09

I'm not sure if there's anything that I would necessarily change, except maybe focus on each one Much more for a short period, like for longer periods of time. So around the billing process, when you're busy and you have all these things going on, you're only making incremental gains daily on That's, rather than being able to be able to call it finished. So some things we like to do when I'm building a business, as I say, when can we call this done? And then who can I hand it off to? or I never have to touch it again.

Speaker 1: 21:37

So I think you look at it from those lenses and say, when it comes to the billing number one, is there someone that I can hire that can handle this for me moving forward, there may be some AI and some of these softwares that you can use where you don't have to do it anymore.

Speaker 1: 21:51

Is there anybody else in the business who has the ability to handle this? or maybe does Abraham or one of your other companies use a, an account and they're a bookkeeping service that can help monitor this for you, and I just I would want to hand it off quickly after you get it to where you want it to go. We never have to touch it again. But instead of doing this like little by little, can you take two or three days off of everything else you're doing and just finish it and Hand it off and then go back to your office manager and take two to three days and finish that process, get all the SOPs done and be able to move past it, and I think that'll find a lot more stress relief from you, faster than than trying to just do it piecemeal day by day.

Speaker 1: 22:31

Yeah, yeah, we do this quarterly for EOS meetings for our bigger companies, where we get together, no distractions, three days and we talk about everything, we fix everything. We get so much momentum for those meetings But we also don't have to carry the weight of the stress of all those issues Beyond that meeting, because it's kind of done and we also know what art. So maybe even start with maybe some sort of an EOS meeting with your key employees and the ownership, and Maybe that would be a good, good place to start to really get a good cultural alignment. Make sure everybody's in line with the vision. Talk about the major things that need to be solved in the business. Solve them right there in that room.

Speaker 1: 23:10

Okay and then move past it and then I think you can really free up your time By doing that, and that's easier said than done. I get it. Some things take longer than a couple days, but yeah, like, for instance, the billing reaching out to every single client. Well, why wouldn't you use someone like Alexis to do a lot of that reach out? because she's gonna want to have the ability to upsell and Cross-sell. So the idea of having your sales and marketing Person make a lot of those touch points So you don't have to allows them to establish a relationship with someone who's gonna be working on client retention, upsells, cross-sells and referrals. So you just gave her all this fuel in the time with those new clients or those old clients Ability to ask for referrals at that point, and she can get business without having to even focus on me Then. So I think, looking at who you have on the team who can also help carry the heavy lifting, stay in the strategy in the higher level and not actually make those calls, that would help a lot too.

Speaker 1: 24:05

Okay, just thoughts like so for me when, if I'm dealing with billing or collections or accounts receivable, i want a salesperson on that they're the best at those anyway, like in dealmaker, if someone's behind and they go to accounts receivable, we could have a team of the a's pound them and try to get the money in which we. We have that in place at some level. But I also like putting it on the sales team, because the sales team they're professionals at going out and getting business, going out and collecting money. So they'll call and handle that for me and then I'll give them a bonus for everything they collect.

Speaker 3: 24:33

Okay. I never thought about that.

Speaker 1: 24:35

That's Really good strategy, Yeah imagine if you gave someone whose money motivated, who's making Commissions, say, hey, we're behind.

Speaker 1: 24:44

We have a hundred and thirty thousand and probably not like that much for you guys, but a hundred thirty thousand in accounts receivable. Right, that money for me. I'll give you twenty percent of every dollar you collect. Okay, and in the future will you get them to switch to an ACH method, so we have to pay the credit card fees? Can you get them to do it here on auto draft And it's, and change the billing date from the 14th to the first, so we're not one on that 14 moving forward, if, and I'll give you an extra fifty dollars bonus for every account that you can get on that system, okay, i think incentivizing someone is money motivated to do that, instead of you having to do that, and make sure you teach them the process, tell them how they can win, how does it benefit them, how does it benefit the customer? that can be huge and then also make sure they're prepared to take advantage of these conversations and ask for Referrals at that moment.

Speaker 3: 25:30

Okay, okay, yeah, yeah, a little bit outside the box.

Speaker 1: 25:34

But I think that's a way you could do it be even more effective not use your time, turn it into an income producing activity And have someone who's financially motivated to get it done. Okay, make sense There you go. And if say you all are too busy for that, there's people out there that would be able to do that for you. There's people who could do it from their living room on their phone. Yeah. Okay just some thoughts and and?

Speaker 3: 25:58

how do you find those people?

Speaker 1: 26:00

Well, it depends. So I think one thing is I like talking to salespeople who are money motivated, who are used to pounding the phones. If it's more of that type of thing and it's not a local thing where you actually have to go in someone's office to get this done, you can hire people. You can go on, indeed, and you can look for people who want to be at stay-at-home salespeople. I like car internet salespeople, which essentially are like setter teams that are in charge of calling people who visited dealerships And they're only paid when someone comes in for an appointment.

Speaker 1: 26:32

There's ways to get people who have been selling In direct sales, who have a lot of skills and a lot of personal skills, but they want something more steady. There's all kinds. You can hire headhunting services. You can call someone like mitten, who's young and sharp, who knows a lot of people, who are ambitious and see which one of his friends needs a job, who's well and you know he put his name on the referral. There's all kinds of ways to do it right. When we were looking for these type of people, we would go. We would go and find people who were stay-at-home moms that wanted to contribute financially to the household. Okay, discipline. We've done really well with that type of avatar. Okay, nice, in our gym sales our best gym sales people have been kind of Moms who have kids there that just love everything about it. You don't have to teach them anything, but just a couple skills and let them go on there and just let their passion shine through and they'd sell like crazy.

Speaker 3: 27:28

Okay, yeah, love it.

Speaker 1: 27:31

You can hire someone who is in collections or billing. This is what they do for a living anyway and they don't have to have all these mean conversations about Uncle Vinnie breaking your leg Score, so that may be a more positive thing for them as well.

Speaker 2: 27:43

Right.

Speaker 1: 27:44

Yeah, just some thoughts. Let's keep going. So, on the, the, the transition of trying to get everything SOP'd out, who's gonna take over the other roles that you're handling currently, once you're able to pass them off So we've got billing Hopefully you can outsource that. Get somebody motivated on that to go out there and collect that money for you. You're trying to SOP everything to make the business worth a lot more money, because it's not valuable and not focused on one person, but instead on the process. Right for someone for two or three days knock that out, maybe an EOS style meeting, but who else is gonna come in and make sure everything's running really well and and be financially incentivized to do so when you step out?

Speaker 3: 28:25

So eventually the business will have a general manager who I am hoping to transfer. You know some of the Higher level, you know what we're seeing of the business to, but of course it's got to you Producing of income. You know to be able to support that person and also, you know, still wanted a profit. Okay, so what?

Speaker 1: 28:48

would have to be true to have that position available. I think I would be looking at projections. How much money is this person need to make? is their compensation gonna be based off of, maybe, percentage of gross profit or gross margin, so they can also help you suppress costs? How are you gonna pay them? and then, what point does the business need to be at financially to be able to afford that Right?

Speaker 1: 29:11

so once you're freed up from the billing and you don't have to worry about standardizing all the SOPs and everything. My next focus for you would be transitioning directly to growth and work with Alexis every day, or whoever else is in that position, and just focus on hitting revenue goals, and your job is to remove impediments So they can continue to move forward and do what they do best and block for them, as well as help them And get them the right training and support they need to be able to really knock it out of the park. So that's what I would focus on next, because that's gonna be the catalyst That's gonna be able to get you that general manager hired.

Speaker 1: 29:46

Okay, have you done projections on how much that's gonna cost. Maybe are there some things that you need to do besides growth, like, maybe, enhancing your profit margins. That's gonna allow that to happen even faster. Have you looked at all the money that you're spending on your credit card statements and all the money spent last year and see what you can Cut, and maybe you have enough money in savings that can go ahead and pay for this position now? Have you done any of that stuff? Yeah, have you done any of that stuff? Yes, we've done all of that.

Speaker 3: 30:12

So the business and at this point the business is So small that a lot of that doesn't apply to where we are right now. We're not spending a ton of money every month. We're spending Less than a thousand dollars on all of the services that we need to run the business. So some of the Yeah, it's, it's really good, which is why there's such an opportunity here okay but at this.

Speaker 3: 30:39

The flip side of that is that we definitely need to grow the revenue by a lot in order to Get us to the place where you know we need to be. So, for instance, when we started out this business, they were billing at $12,000 a month. In six weeks, we've gotten the billings up to 15,000 a month by focusing on Commercial accounts versus trying to get a little tea tiny residential accounts.

Speaker 3: 31:06

So once we saw that we were like okay, we need to focus more on the commercial side and And Airbnb because we get repeat business there. So that was a really good discovery for us because we were able to implement that really quickly. So we want to do more of that and we know exactly where we need to be in order to get someone into the business to be able to run it for us and also, you know, have a profit for for the partners. Like we zeroed in on that number pretty quickly.

Speaker 1: 31:37

When it comes to the profit margins, have you studied that a little bit too? And I figured I'm talking to very, very intelligent women here, just so everybody sees this but I just have to ask and uncover all the bases, because some people are watching, may not Know this stuff, but sometimes we chase the wrong rabbit. Sometimes we go after revenue instead of profit. So I've seen businesses that say, wow, this is so much easier to sell and We make so much more revenue per transaction. Yet They didn't check the profit margin and they realized that they actually switched to something that was less profitable.

Speaker 1: 32:08

I watched the restaurant impossible one time. I don't know if you've ever seen that show. They were highlighting somebody in Alabama, randomly, and they were so proud of so much of their business was catering, so much their business was to go, and they never did the math.

Speaker 1: 32:21

They were actually losing money on every single order in their business, but it it was such a large part of their revenue that they were just saying, hey, but it's what, it's what selling, it's what brings us our revenue and in the day it was killing them. So I would just make sure you keep that in mind anybody watching when you're looking at these type of Conversations around. What should we be focusing on the growth side? What should we be trying to sell? Should we be going after a different market that has a higher average transaction value? Definitely look at profit margins, right Yeah, so are your profit margins pretty much flat across the board, depending no matter what client you serve or Yeah.

Speaker 3: 32:59

So the way the model is set up now is that our gross profit margins are at about 47 close to 48 percent, because we're just on a rev share with the cleaners and so we get a job in. Cut it in half, take out what we need to run the business and we have our gross, our profit margins. Now our net margins are Somewhere around almost 30 percent. We have, like I said, very little that that we actually spend money on in the business, so our net margins are really high. We're paying out, like I said, a seller.

Speaker 3: 33:40

We also have borrowed money in order to buy the business, so that money comes out of you know What we, what we need to account for every month. But our margins are really good and the nice thing about going into commercial in Airbnb is that our margins are The same unless we completely change the way we pay our cleaners. If I have a residential account that we're billing at a hundred and fifty dollars for cleaning, or I have a commercial account That I'm billing at you know $400, it's still a fifty-fifty rev share, sure, right.

Speaker 1: 34:14

So it's just the way I looked at it is just going after the bigger number because the rev share is It's going to be the same any and just a thought, and you may have already thought about this, but is there any difference in the, the talent pools and people that you can recruit to come work for you doing Commercial versus residential? is there any differences in liability insurance? Is there any difference in qualification? Is there any difference in just what people like to do? is there one that's better than the other?

Speaker 3: 34:43

so We have a gentleman by the name of John Torres in our in our group, who gave me some really good advice When I came to him and asked him that question about which way to go, said go with What fits for your personality. And what I figured out very quickly when he presented that to me is The way my brain works. I understand business owners and I understand what's important to them, and so immediately I was able to make the connection For this company as to the our value add right. I can provide a business owner with a Cleaning service that they don't have to worry about. I can make sure my cleaners show up on time. I can make sure they follow instructions. I can make sure that they, you know, get in and out of that business exactly the way the Business owner wants. I can put all of that in the box and I can deliver it to that business owner to where he doesn't have to think twice About what his cleaning crew is doing.

Speaker 3: 35:46

Right, but on the residential side There's a lot more involved in it and in ways It's a lot more emotional. You're going into someone's home where they have their family, everything that they love and they treasure, and I related more to the business side of it, so that's why I decided to go that route. I also looked at our current client list and, basically, our commercial customers. We had six commercial customers who accounted for about 50% of our revenue. I Was servicing 42 residential customers. Wow, the same revenue my commercial customers.

Speaker 3: 36:29

Were happy with our service. They took feedback from us about what we needed. As far as the billing, i had no complaints whatsoever on the commercial side and the money was better. So that was no brainer.

Speaker 1: 36:45

I think you're gonna love reading this built to sell book. It's so funny because they talk about it so much on how he was looking at everything He was doing and for Alex Stapleton in that book, 40% of his revenue was from one client And that was very dangerous for him. But he had such this dependency on the client and they were running them ragged. And then he looked at this one thing He did and, just like you said, it was just a better audience. They all felt like the value was there. They paid really well. He's got the best profit margins and that's when he went towards specialization right. So I'm reading it right here in Ted's tips that he reveals to Alex.

Speaker 1: 37:24

Number one is don't generalize, specialize. If you focus on doing one thing well and hire specialists in that area, the quality of your work will improve and you will stand out amongst your competitors. So I think, kind of looking at it from that angle when you read the book, i'd love to discuss it with you. After is, maybe specializing specifically in commercial cleaning and being able to turn away residential clients in the future May be the best path for you all and I think that's really smart. So I wanted to ask you that question because not everyone watching is gonna understand the difference between the two.

Speaker 1: 37:57

And it's very personal, like you said, to have someone come in and clean the house. Like I want my wife and I to hire someone to come clean our house, but it's too personal for her. She's like I don't want people in my bathroom, i don't want people. It's very, very different. Also, i see that commercial cleaning will often can be done outside of business hours, so it's not a disruption to businesses. Very different. And, being somebody who owns Airbnb's, i like that as well, because the frequency of purchase is much higher, right, and it's a no-brainer for people who own Airbnb's because they charge a cleaning fee.

Speaker 1: 38:28

Yeah, the idea of passing that on, it doesn't matter. You can also coach people like hey, your cleaning fee is not high enough. It should not, from what we've seen, change your booking percentages. It needs to go up a little bit more.

Speaker 2: 38:40

And that allows you.

Speaker 1: 38:41

There's also a lot of upsells and things you can do as a cleaning company with Airbnb's, And there's also a couple of things that you're gonna wanna stay away from. I don't know if you've run into it yet, but often the cleaning company gets asked to do things like empty and refill the hot tub because that's an Airbnb standard. So just keep in mind, from what I understand, so when you have things like hot tubs and there's actually safety precautions, they make you take that do take a lot of time. So the guy who cleans my Airbnb plus 10 more over here on the lake he has to clean and empty out these hot tubs and switch the water out, And it's an extra fee that he has to charge. So it's a pretty interesting thing.

Speaker 1: 39:20

That's one of the reasons I haven't put a hot tub in ours The ones that you've stayed at Like because I just don't wanna deal with that Assel. So some things there as well. I think commercial may be your very best bet, And I think commercial allows you to have more stability and predictability on the scheduling compared to Airbnb. It's very sporadic.

Speaker 1: 39:37

And you're gonna have to have. You're gonna have throttle period, especially in certain areas during summertime peak hours and peak season where you're gonna need more people than you have to throttle your employee base. So, once again, specialize. I think that's a smart move. Okay, so what I hear is a business that has very few expenses, right, it's got great margins 50% net margin, around 30%. You've got a couple of things you're dealing with with your existing client base. Hand it off, put that process in place. Let somebody who's money motivated, who's getting paid for performance, handle that, who's capable. That'd be a great thing for someone to focus on. Couple ideas. Maybe some of those young ladies that were with the film crew that Abraham has with the event, maybe someone like that who wants to get into business would love a chance to mentor under you. That could be a good option.

Speaker 1: 40:27

The third thing I hear is all you gotta do is raise revenue. So what stops you from taking everything off your plate? finish those processes, like within the next week or two, and just focus on building revenue, like work with Alexis, and just tackle that Cause. If you're thinking like 15,000 a month and recurring revenue coming in on billings it like we could, you could 10X? that? That's not even that big. That's a very small number to start with, where you have a lot of upside. So why would your focus not be 100% on that And then letting other capable people kind of run the things that you've been working on? So don't let anything stand your way from doing that. The only thing you've gotta focus on is that talent funnel and being able to bring in new people, cause that's what's gonna throttle you. You may be able to easily grow faster than you can like. Put in workers, yeah, yeah. So have you figured out any way to do that? John, who's like a cleaning business whisperer did he tell you anything about his talent recruitment?

Speaker 3: 41:25

I don't think we talked about that.

Speaker 1: 41:27

I would ask you to go chat with Vincent Yoder, vincent.

Speaker 2: 41:31

Oh, I do.

Speaker 1: 41:32

Yeah, yeah, so you know Vincent already.

Speaker 1: 41:35

Vincent's got a pretty cool talent, funnel he uses up in Ohio for his electrical business And he'll tell you that his secret is the way he treats people and the fringe benefits and the things that they get. But I've seen some of his talent funnel. I don't think it's very difficult, very complicated, but I would look at that specifically And then I would probably talk to some of the other people in the protege group that have cleaning companies and just have very focused discussions around how to get good workers And cause. I think that's gonna be the big problem that if you don't focus on it now and solve it before, it's a problem that's gonna kick you in the butt.

Speaker 1: 42:09

Yeah, yeah Cause imagine if you start scanning and then, all of a sudden, you're having issues with employees.

Speaker 3: 42:13

Yeah, yeah, so try to hire a couple new cleaners, and that's been an interesting process. So we basically decided we did kind of a hiring round. We got two new really good cleaners and the ones that didn't work out. We were just really quick to part ways and we decided rather right now, rather than focus on just bringing the cleaners online, to work with the cleaners that we have, because we're only at 50% capacity for our cleaners, that we know how they service our customers.

Speaker 1: 42:54

Yeah, you could double your business with three key new accounts and then you'll meet new people immediately, so I wouldn't wait on that. One concept that's interesting as you're doing your talent acquisition is every dud knows a stud. Have you ever heard that concept? No, so it's a big thing. In the multi-level marketing business They say every dud knows a stud. So even if you find somebody, recruit somebody, hire someone, who's just absolutely terrible and they fizzle out you always ask for referrals from those people immediately.

Speaker 1: 43:21

So this is something that we do when we're like in out staffing restaurants. I would staff like hundreds of people a quarter sometimes because there's high turnover And I would say, hey, so glad to have you on the team. Where else have you worked in the past? And they would say, wherever. So hey, who do you know that would love an opportunity to come and work at this restaurant? Who else? I don't care where they're working now. What if they're out of the industry? Who would be a ma-?

Speaker 1: 43:41

Who do you think is the best server, best cook, best manager you've ever worked with? They're like, oh, I said, can you get me in touch with that person? I'd love to have a chat with them. And I was able to find better talent through the terrible hires referrals than I was through the hiring process. So it's just the concept, Cause everyone you hires probably has experience. Who have they cleaned with? Have they cleaned in hotels? There was this one, lady Mariela. that was fantastic. Oh, I think she's looking for somebody You didn't know unless you asked. So that may be something you can do as well. that can almost double your talent acquisition from just the same effort you're already doing.

Speaker 1: 44:14

And we always said every dud knows a stud. So that's why we like in multiple marketing, network marketing, you would get your opportunity out and message out to everybody, because there's so many referral opportunities, even if the person you're talked to is not a good fit.

Speaker 1: 44:28

So, just a concept, and then I would go talk to someone like Vincent or someone like John and just say what are you doing to find good people. There's also a mastermind or friend of mine owns named Brandon Vaughn, and I think he's still part owner in it. It was called Conquer And he has some courses specifically around recruiting employees for home service businesses. He built and scaled the business just like that, sold it for very high seven figures And he's like one of the most well-renowned home services business builder there is And he just launched like millions and millions of dollars worth of franchises. He's crushing it So I can see if I can get access to his course Maybe a way to buy it legitimately, of course.

Speaker 2: 45:11

His name is Brandon.

Speaker 1: 45:11

But he has an employee recruiting course. It's just incredible. Remember when he recorded it, yeah, and he's like the best in the game, the best in the game. So that would be cool And that would span across probably every business that you have.

Speaker 3: 45:24

Exactly, sounds good Yeah.

Speaker 1: 45:27

So sometimes I'm going to be on these podcasts talking to people who maybe are very new to business and they need a lot of help And I may tell them to just hang up the towel because maybe they're not ready. But other times I'm going to be talking to people like you all who are extremely sharp And I don't feel like I have too much to offer you that you're not already doing. Maybe a couple nuggets here and there you got from this conversation, but just hope I was able to help at all.

Speaker 2: 45:53

Yeah, i mean we've got here because of you, though. Yeah, all the conversations we had with you before, yeah, yeah, yeah A lot of the things that we're implementing were from conversations that we had.

Speaker 3: 46:05

So we kind of had a leg up because we came in the door being able to implement and execute some strategies.

Speaker 1: 46:14

Fair enough. Well, let's close it with this. Let's talk about surges of income for just a minute. You are actually here one day with me in the studio. We're on the whiteboard. I introduced the concept of it.

Speaker 1: 46:26

I think part of being able to tap into surges of income is understanding, first of all, what skills are necessary to get into these type of businesses, how you can buy businesses, what you can do with the money that you get from a sale of a business, what you can do with money that you get from large quarterly profit distributions.

Speaker 1: 46:43

But forget all that. It comes back to understanding this skill set and that's building businesses with the ability to sell it, with the intention to sell it. So my big walk away item for you or anybody else who's buying businesses already owns a business if you don't understand the built to sell model and you don't know how to get a business ready to sell, to have the highest multiplier possible at the time of sale, the difference between a strategic and a financial buyer and who you're actually forming this company to be able to sell to, i think that's gonna be key for where you are and all the different businesses you're doing. Unless they're just extreme cash cows, 100% passive. It does help to sell at some point and be ready to do so, because every business has a life cycle. I don't care how rock solid it is, somebody's gonna come and knock you out. Someone's gonna come in and disrupt the entire industry.

Speaker 2: 47:33

Look at Blockbuster that was a solid.

Speaker 1: 47:35

Yeah, i know, and it wasn't necessarily just a competitor Redbox and Netflix that knocked them out, it was a technology shift. So even the best businesses, if they would have sold that business, if they would have approached Redbox or approached Netflix a year early, which both had venture capital, they could have sold a large part of their business. They could have acquired that. They could have acquired Netflix or Redbox and they'd still be one of the largest conglomerates today. But they didn't. So I think learning to build the sell from the very beginning is huge.

Speaker 1: 48:05

One of the things I'm doing with my professional education is I'm about to enroll and become a certified exit planner, not because I have any interest in being a CPA or a bean counter, but just the ability to be ahead of the game. So imagine, as a real estate agent, you do have a leg up when you're going in and doing it. Like me, i'm a real estate agent, broker license and insurance property casualty commercial. I'm just a smarter consumer. I'm a smarter investor because of all the professional licenses. So for me, i'm going after that certification because I want to continually chase exits. I wanna chase exits And I'll tell you I wasn't gonna tell people what I'm working on, and I guess this is live, so I'll tell you anyway.

Speaker 1: 48:45

No one's really on at the moment, but people will be watching in the future. I wanna start shifting some of my focus away from just building the businesses I'm building, but also start looking for my buyer first, right? So if you go and watch the movie or the TV show Undercover Billionaire Yeah, and the first season there was the billionaire from the mortgage company and one of the first episodes he needed money. He got dropped off in a remote city in Pennsylvania with no contacts a hundred bucks, a truck and a phone with no numbers right And he went to Craigslist and he said I gotta find my buyer first And he said what are people paying for?

Speaker 1: 49:19

So for me, doing exits, chasing surges of incomes, focusing on what Carl and I do in business acquisitions, i'm looking for what businesses these large strategic acquisitions are looking for or these large private equity companies are looking for. I'm gonna go find those businesses, buy those businesses. I'm gonna use my strategies and my tactics for growth and be able to get it built to sell from the very beginning. And I already have my buyer. All I'm gonna do is go out and find what they want, build it up and sell it to them. And for me, i like underserved businesses and maybe not even I wouldn't say distressed, but maybe businesses have hit plateaus and they can't get past where they are, because that's what I do best.

Speaker 1: 49:57

So it's just kind of an interesting concept. So my big walk away for you, besides tackling each one of these problems within one or two days and just knock them out, and find somebody who is financially incentivized to be your new, almost like collections person and make sure everyone gets switched over to the new system. get everyone bought in on the new terms, maybe on auto pay, maybe switching to ACH, and save you 3% per year if you're total revenue, but somebody who can actually go out and get that accounts receivable for you, almost like a collections person and get a commission. The other thing I would do is tackle the talent funnel right up front. I would be learning about that more than even growing, because growing is not worth doing if you can't sustain and you can't fulfill, and then I really be focusing on growth once I have those things help handled. Okay.

Speaker 1: 50:48

And lastly, learn the build to sell minds like whole formula, and go read that book twice and just look at everything you're doing and saying, hey, in three years from now I'm gonna wanna be able to sell this business. or five years from now, even one year from now, if I need to switch directions, this thing needs to be very valuable, able to be sold. It doesn't need me to operate. It needs to be more focused on processes instead of people.

Speaker 1: 51:11

So I can have as many people, as I want and I need to be very specialized, and I think that's gonna be the key. Also understanding who is gonna be the buyer one day if you sell this company Okay, big as well.

Speaker 2: 51:24

So Okay, i love it, that's good.

Speaker 1: 51:28

Do you have anything else you wanna talk about? I know you have some other businesses. Maybe we can talk about another point or maybe offline, but any other questions for me at all, or?

Speaker 3: 51:37

No, no. Yeah, we have decided on a direction that we do wanna talk to you about, so we'll talk about that offline.

Speaker 1: 51:45

Sounds good, sounds good. Well, it's been fun. I've got unfortunately, i have got like six more Zoom meetings, yeah Yeah, one of the things I've been working on a lot and I'll just share it with you and anybody else who ends up seeing this video is part of the surges of income path that I've been on. Besides business exits, business distributions and profits selling properties, is also using digital marketing and business growth strategies to create large amounts of revenue all at one time. So one of the things that we do a lot and we add a lot of value to people's lives for this revenue, by the way but we do a lot of events. So one of the things that I've been working on today and with my teams is really honing in on event marketing and honing in on how to put people in seats and bring people to local meetups if we're gonna start doing those in regional areas constantly and how to be able to do that predictably, because we know that there's a great ROI for us if we can just put butts in the seat and the right butts in seats. So that's what I've been working on.

Speaker 1: 52:47

I think, really, the skill sets that will allow you to unlock surges of income is probably the most valuable thing people can learn, which is really understanding how to get new customers, digital marketing, business growth tactics, learning how to get businesses prepared to sell, and that's beyond just profit margins, but also making sure the owner's not needed and that all the business is focused around the processes that it takes to run the business and grow it without having to focus on exactly who are the people. So that's what I would recommend anybody watching this is to focus on learning those skill sets because, no matter what happens, no one can take it away from you. You're always gonna be relevant. Yeah, agreed, awesome. Well, i enjoyed it And I'll talk to you offline another time. Thank you so much for joining us for today's podcast.