Speaker 1: Hey, we're live. Welcome back to the Surges of Income podcast. Today. I have Steve Dobson, who's a part of our dealmaker protege program in Kings of Deals and he has an incredible business in automation engineering And we're going to dive into that today and we're going to talk about how that business can grow using sales and marketing and hiring business development people, and that's what we're going to go over and talk to Steve about.

Speaker 1: But just to talk a little bit about the Surges of Income podcast, the goal of this podcast is to teach you more on how you can tap into surges of income above and beyond the daily and the monthly income you get from your job or from your business.

Speaker 1: That'll allow you to really accelerate the growth of your net worth by having money that's allocated just towards investing and having this money come in in surges. And that's what we talk about specifically on this podcast. And to relate that to what we're talking about today, when you own a business, you have the ability to get profit distributions and be able to also build the business with the intent to sell in the future that allow you to unlock a lot of cash at closing. So that's what we're going to be focused on today Other ways you can get surges of income, and you can go check out my Surges of Income video that I have on my YouTube channel. I'll put the link down in the description to talk about doing it with buying and selling businesses, the sale of a real estate property, learning, business growth and digital marketing tactics that can allow you to tap into large amounts of income at once, using product launches and events, and so much more. So, without further ado, steve, why don't you come on and introduce yourself and then we'll dive in All?

Speaker 2: right, sounds good. Hey everyone, My name is Steve Dobson. I'm the owner of an automation engineering company called IoTeX I-I-O-T-E-C, Which is really kind of a moniker, if you will, for the Internet of Things or, in our case, the industrial Internet of Things, which is a big part of our business taking data from the factory floor and getting it up to the management level where they can make an analysis of what's going on for everything that they can't see every minute of the day.

Speaker 1: Awesome. Can you start by maybe diving in a little bit deeper there? Who is your perfect customer for your business?

Speaker 2: Our perfect customer is a combination of two different, i guess two. We have two different models, if you will. We have customers who have operations that are mass producers of some widget of some kind. They are fairly labor intensive and part of our job is to make them less labor intensive through the addition of some type of automation And, again, collecting data from machinery how fast they're running, how often they're running and getting that up to management so that they can make an analysis of what's going on. Our second customer is really another mass producer, but it's water utility systems, where we're basically controlling the rate at which water is produced. This is usually well, 99% of what we do is desalination of ocean water, if you will, to drinking water, and we deal with facilities that produce millions of gallons per day And we control the startup of those plants, as far as all the pumps and all the addition of chemicals, and we also do all the data collection, again, so that they can see how efficiently their plant is running and where they might have to make adjustments.

Speaker 1: Wow, i had no clue that's what, exactly what your company did. That's really interesting, especially the second one. I've never even thought about the concept of converting ocean water into drinking water. Maybe I've just never thought about it, but that's pretty cool, so really interesting. the companies that you work with and your customers are probably fairly large, or would you call them small to medium size. What's the average revenue of a company that you would work with?

Speaker 2: In order for us to be able to put in any kind of an automation system, our customers usually need to be probably above $15 million in revenue. We've got nav stack listed companies as customers. We have some private companies that are doing pretty well But again, to be able to afford an automation team to go in and do something, you've got to have a fair amount of earnings just for us to be able to come in the door and pay us.

Speaker 1: So definitely big B2B play with your current situation. Do you have a lot of new leads coming in? Do you have a sales team currently? How are they generating new contacts and new prospects?

Speaker 2: Okay, we don't do any of that, okay, there you go.

Speaker 2: So our customers come in usually as a referral from an electrical contractor who is working in a facility and they just find out by word of mouth or by talking to the operations manager that they're looking for something. Or we get referrals from our current customers, But for the most part I think our newest real customer is probably about six months old, and that was really more serendipitous than anything other than that. I think our next oldest customer or our next newest customer is probably four or five years old. We just do a lot of repeat work at several businesses.

Speaker 1: And there's nothing wrong with that If we're looking at really sales for a company like yours. A couple of questions I'll have for you. So looking at as one is capacity how many new customers could you bring on at this size around 15 million plus per year or maybe per quarter, and then beyond that I would probably break it down into conversion rates of your past experiences with new clients and how often when you get a referral are you actually closing the sale versus not closing the sale? So to start with, not having more than a couple of new clients in the last four to five years may not be really a bad thing or a red flag. My first question goes to you is what's the capacity? if you all were to bring on new customers or clients very frequently or spaced out perfectly, what would that look like? Would be every six months you could take on a new client, maybe one a year. What would that pace look like?

Speaker 2: I think for us, we're at a point right now where we could use a new client every three months, every quarter.

Speaker 1: Okay, every quarter. The next question is to incentivize someone to be able to bring you new clients outside of referrals but actually have someone doing business development. Is there enough juice left in the squeeze and margin to be able to pay someone to do that?

Speaker 2: Well, we were currently paying 65,000 base plus commission.

Speaker 1: So you have someone in that role or you do not have someone in the role. Maybe you did, but you no longer do.

Speaker 2: No, we don't.

Speaker 1: Okay, correct.

Speaker 2: We know how to do.

Speaker 1: On the commission side. Is that pretty large commissions or what kind of commission structure is?

Speaker 2: that That is after the first 100,000 in sales commission starts rolling basically 10% of our engineering costs. So we don't provide commission on equipment that we purchase because our markup isn't really huge on that. But our engineering hour time is where the commissions are paid.

Speaker 1: Is that capped at a certain amount of time or is that in perpetuity, for the life of the community?

Speaker 2: That is pretty much uncapped at this point.

Speaker 1: Okay, but either way in the last five years only one or four or five years only one new clients come on. So it's some of it's kind of theoretical at some level, right Cause maybe the efforts of having a sales plan?

Speaker 2: Oh no, it's. Yeah. This was all financial planning, really, for the most part Taking a good look at what we had, what we had coming in, and just looking at what we have for a job and what we could afford to give up if you will, Sure You know to a brand new client and what a salesman should make to come to work for us.

Speaker 1: Awesome. Well, let's dive in on this. So B2B sales is something I am very familiar with Getting out of just calling it B2B sales. Usually in this level, when you're dealing with really enterprise level clients, it's more called business development, and people who specialize in B2B sales versus people who specialize in business development for large enterprises is a little bit of a different skill set. Usually the sales cycles are much longer in these larger companies. It's usually more of a maybe a complicated transaction and outside of government contracting, which is its own beast.

Speaker 1: I think what you'd be looking for ideally, beyond a B2B sales person, is more of creating a business development department, and maybe that department starts with just one person and you. But for me, my easiest low hanging fruit focus direction for finding people like this is finding people of one of two things. One, people who already have the connections that you're looking for. So in the ideal scenario, this business development manager who's working your sales for you would need to go out and create these relationships with very specific type of companies. So finding someone who already has those relationships with those companies is your fastest way to being able to get to that quarterly number of getting a new client every quarter. The other option would be to go out there and find somebody and head hunt somebody who's already a business development manager, maybe in a similar or the same industry. I know that there are tons of these people out there, especially where I lived for a long time in Huntsville Alabama. It's just packed full of business development managers because every one of these engineering companies that work in defense or government contracting or in aerospace almost every single one of them have these BDs in play, full time, very high earners, and they have all of these relationships.

Speaker 1: And like so a friend of mine that I knew for a long time. He was a business development manager and head of sales for Honeywell for one of their divisions, and he had several people working for him across the country I think 15 to 20. And every one of them that's exactly what they did was this exact position of being a business development manager. And the way that he would find these people is he would go out and find out who his end customer he wants to have and he'd find the people who already have those relationships and it would speed it up so much because they already had that no-liking trust, they already had their foot in the door and that allowed them to scale a lot faster.

Speaker 1: And I think, when each client like what you have is worth so much money to you, i think the key for this is putting together the right benefit package and the right salary. That is gonna attract the right person right. So rather than say, hey, the financial planning, we can afford 65,000 base plus whatever benefit package, plus they're commissionable after 100,000 at 10% of whatever the engineering cost is for life of the customer, you may actually put that to the side for a second. Maybe you've already done this so just forgive me, but somebody listening or watching may need to hear this. You can also go and talk to big time recruiting agencies. You can go look at glassdoorcom and try to find out who the perfect person would be candidate for this position where also they're already working and then start studying the compensation plans of the companies that they have been with for a long time to try to see what it's gonna take to be competitive. I don't. Have you done all that already? Have you looked at all those different things?

Speaker 2: No, the I mean the extent of our searching and even with the sales rep here, that just didn't work out. I mean we started with demanding that somebody have industrial experience in manufacturing facilities where they again they have a network, but that's really as far as we've gone. We certainly haven't gone into the looking at what competitors are doing or we just assumed, i guess, that we were offering a competitive wage just based on talking to a couple of other people.

Speaker 1: I would do some more research there because I don't know anyone in the business development space that makes less than 200,000 a year for this size of company In the Huntsville area. That was one of the big sought after positions that we've seen. Of the people I was knowing And a lot of the people that I met in business development were through networking and mostly private school families where my kids went to school. I was talking to other parents and that's what a lot of them did, but yeah, they're all extremely high earners because they're facilitating transactions that have multiple commas and zeros on them per year And then also not just getting the deals but maintaining the deals. So I think besides sales, it's also business development and retention and maintaining those relationships, keeping a pulse on quality and user experience.

Speaker 2: Right, no, no, right. so for us, i mean, i look at it as and you probably heard the terminology, but we're looking at hunters versus farmers.

Speaker 1: Yeah.

Speaker 2: Right now I need a hunter, but we would certainly with a large enough client or whatever. We would be looking at farmers after that.

Speaker 1: Well, one of the things is, you can look beyond hunters or farmers. There's also people that don't have to hunt because they already have all the people in front of them. They already have all the connections. So I would look at number one, absolutely.

Speaker 1: Yeah, is there anybody out there that's already doing this for a living, and can I tap into them? And what do I have to do to get them to come work for me instead, or as well? That's where I'd be looking to begin with. The easiest way to do this is to take that due diligence and process off your plate and pay somebody else to do it. There's companies out there that are specialty staffing firms that could hire and find and recruit the business development managers, and a lot of times they have an upfront compensation point for the actual headhunters. But a lot of that also can be deferred based off retention of the new employee that they recruit.

Speaker 1: So for me, one of the things that stops us from taking action on something like this is it's complex, the complexity of it as well, as we have a lot of other things to do. So I would hire this out immediately. My focus here is how much time are we losing or wasting by not letting somebody else's focus be on this instead of mine? So, even if it costs you $10,000 to engage a high specialty staffing firm to go find you the perfect person with the right experience, with the right connections, who can go and completely talk to them and make sure they're the right person. I would do that in a heartbeat, and that allows you to not have to worry about it anymore.

Speaker 2: You're about 10,000 off.

Speaker 1: You think it's 20,000? It may be. Yeah, I've had those numbers thrown at me Yeah, so what's stopping you from doing it? I mean, i understand it is a lot of money, but at the same time, could it lead you to one, two, three new customers in the next 12 months? How much would you recoup that money, and how many times over? So just some thoughts, right? I don't know.

Speaker 2: I mean, i think right now, the thing that's stopping us, i guess, is that we're one of the reasons I'm here today is we're looking to restart our effort and looking at all kinds of different options I'm not saying I wouldn't And again, we looked in the past and that's really where. That's where we're sitting, on a percentage standpoint, somewhere 16 to 20% or more, and if you just throw out a base salary of 100K, that's where you are suddenly.

Speaker 1: I get it. I think there's something, some things that we can do ourselves and some things that we can do that work really well, but I think other things like this it's just a pay to play and to get the right person in and be able to do it with more pinpoint, accuracy and faster. It may be just need to pay to play. I'm not sure if there's any way to get around that. The only other way I could think of for you to be able to start getting new?

Speaker 2: Yeah, no, I mean, and something.

Speaker 1: Go ahead.

Speaker 2: Well, i was just gonna say, i mean, the deferred option is something that nobody had really offered. Everybody wants their money up front with maybe a six month guarantee to get it back, but they don't actually wanna give you your money back. They wanna give you another candidate.

Speaker 1: Yeah, of course, of course, but that's what you want is another candidate, though. So you need somebody in the position. I don't know if you've spoken to Jim Helms on this in our group, but he's been in the staffing the specialty staffing for many, many years. He may have a direct connection with somebody, or maybe he can give you a referral. Maybe that'll work out for you, but I think that's probably the best way to do it, just because it's so specialized in how you need somebody who already has connections, and I'm sure being able to speak your language is gonna be absolutely vital, otherwise they're not gonna be effective in this position, so I think that's probably your fastest route. The other thought is and I'm sure you've already thought about this, but I'll say it anyway, since we're live on YouTube on this podcast is what about buying Market Share? Is there anybody else where you could go and acquire Market Share through an acquisition, rather than go and hire a business development manager to go out and get you new clients and accounts?

Speaker 2: Right, obviously that's something that we're looking at. We really haven't seen anything in the market that we're in right now in that area. I mean, we've done the. You know we've done the direct approach. You know, send out, send out mail, send out email. You know, basically either getting no response or you know not interested, or don't you compete with us Answers. So for the region that we're looking at expanding into right now, you know it doesn't seem to be an option, but that certainly doesn't mean that there isn't someone out there that we didn't. You know that we've passed over for some reason. Number one we didn't know they were there. But I mean, i mean to me it's. This is an option that might exist, being in our region where we wouldn't. You know, when we're looking for an acquisition, we're really looking for something that we can run, that's got a general manager in place and you know a couple levels whatever, and this is actually a situation where we might be able to buy, you know, a one man show and take over their client list.

Speaker 1: Yeah, that's what I was referring to as more strategic acquisition just to gain more market share. Yeah, where it opens up, where the business doesn't have to be built to sell, it doesn't have to be able to run without the owner. Instead, you can literally buy it and absorb the owner as a really high level employee or not. But that's what I would be looking at. Have your deal origination been focused around that specifically or no?

Speaker 2: No, that's, that's what I'm saying. That just kind of popped into my head just now. We've been. We've been on the other end. You know more. You know more companies out of our region looking to expand. You know our holding company into. You know more of a national firm.

Speaker 1: So I would. I would probably switch and focus towards that a little bit and look for those underdeveloped businesses where you can just absorb their client base. I'm sure they're going to have other assets and equipment, maybe other people as well. That would be a great acquisition for you Because usually you're going to find really good people doing that. Another question for you and just for anybody watching so we're I'm part owner of Dealmaker Well Society.

Speaker 1: We have a mentorship program on business acquisitions, led by guru Carl Allen, on how to acquire cash selling businesses and really just M&A in general.

Speaker 1: So that's kind of the angle that we're going at here is the idea of not just using sales and marketing or a business development manager to get new clients, but instead you can acquire a business, even if it's not the ideal business that you would acquire as a known investor, but acquire one that already has some of the market share in clients where you can just absorb it, and that's called a strategic acquisition compared to a financial acquisition.

Speaker 1: So one other thought for you for anybody listening is Steve is doing direct approach letters, and that's what he said a second ago. What that is is where you write a private and confidential letter to a business owner that may not have his business on the market or hers, and the reason why you would do that is a way where you're not dealing with business brokers. Instead, you're going directly to the seller and you can have a conversation to see if they've ever considered an exit, and you can also make offers on businesses that aren't even on the market. So let me ask you this Steve wanted to know about taking those same exact direct approach letters and then start writing them to your perfect customers. But instead of asking about acquiring their business, why not use that exact same strategy to see about acquiring them as a client? Have you tried any of that?

Speaker 2: Not in that manner.

Speaker 1: no, So we did this a lot in our marketing agency, direct Mail, where instead of sending them that confidential letter in a creative way to get them to open it, for getting in front of them to offer them to buy their business, instead we would do that with showing them what we could do for their business and just use the exact same Direct Mail strategy.

Speaker 1: So that may be a way you can do that, because only needing one or one to four different new clients per year, you may be able to do a direct approach strategy and handle that business development yourself. Because if it's only one new client per quarter, that may be something where you can get some more cash from the door doing it that way to be able to afford a more expensive business development manager. Just a thought, because you can already download and buy lists of your perfect client, correct? Yes, so business directory lists. So if you take that same strategy as the direct approach, change the letter template and instead add a little bit more marketing in it around case studies, maybe actually in the letter have print out one pages of case studies of companies that you've come down to work with and what you've been able to do for them maybe an interesting strategy to get directly to the owner and not have to have a salesperson right out of the gate.

Speaker 2: Okay, interesting.

Speaker 1: You have the capabilities to do that, i'm sure, having Go ahead.

Speaker 2: No, I think there was a little choppiness there. No, it's certainly something worth considering. I mean, again, we've got the direct approach letters that we're already using. It wouldn't take a whole lot to adjust the mindset a little bit there and the wording.

Speaker 1: And then what I would suggest in there is also have one page case studies maybe as many as you can five or six, seven and just say here's one of our clients, here's where they were when we found them, here's what we've done for them, here's how long we've worked with them, here's the net gains that they've seen. And I would probably put as many of those in there as humanly possible without breaking any confidentiality agreements you have with your clientele. But I think that demonstration is going to be really important for a business owner because imagine if they open that and you're using the same type of psychology we use with the direct approach letters for acquisitions, but the main focus and call to action is more focused around giving you an opportunity to have a conversation, around working together. That may be huge. You know what else that may do That may open the door if you're communicating directly with the owner around potential acquisitions there as well, because would you all, with your buy box and deal specification, potentially being open to buying one of your ideal customers as well?

Speaker 2: Absolutely So. that's actually the big plan. We're looking to acquire companies like ours and deploy them into companies that we own that are manufacturers.

Speaker 1: Another thought would be this So I have my own deal origination funnels where we're getting new leads every single day, all day long, of people who are wanting to sell their business. They're not on the market. Be interesting if you could also look at sending the direct approach letters to your perfect client list and then just to open the conversation for business sales and development. So that may be another way to get your foot in the door talk to somebody who would be a good business that you'd like to acquire and then transition the conversation towards also being your client.

Speaker 1: I don't know if you've tried it.

Speaker 2: No, not really It works. Most of those customers again are pretty big. I think the smallest customer just got bought out by a holding company that's owned by Berkshire Hathaway.

Speaker 1: Yeah, and some of this is easier said than done, i imagine, but at the end of the day, it's also a numbers game. So if you have, let's say, 25,000 perfect businesses out there, that would be good clients for you in the US. maybe it's a lot higher than that. If you send a letter out to every single one of them, you will get responses. You will get conversations from that just off your activity levels Great.

Speaker 2: But it's the same Yeah.

Speaker 1: What we find a lot in sales is sometimes we have a hard time getting through the gatekeeper, sometimes we have a hard time getting to the decision maker, but ways to look around it is saying what does the decision maker want and try to get your foot in the door using that tactic. Specifically right, there's a book called Fanatical Prospecting I can even pull it up on Amazon here by Jeb Blunt, and he is a big author in the sales space B2B, b2c, telesales, things like that And he even talks about some of this stuff and around how to get around gatekeepers, how to get in front of the right person with your focus called action, but maybe using a different fly catcher where you're able to get their attention using something totally different. So I think that would be a book that I would definitely recommend you read, even if it just kind of opens your mind a little bit here. Can you see this? Yep, even if it just opens your mind and gives you some new ideas, i think this will be really, really helpful for you. But it's called Fanatical Prospecting by Jeb Blunt. I think it's one of the best sales books in the game And I think he's just so creative the way that he's able to get in front of people. So I'll tell you, when we're talking about deal origination, one of the strategies that we use is we don't put online on these ads like, hey, do you want to sell your business, do you want to sell us your business, or we'd like to buy your business. That's not what people respond to. So we found a way to go around that and we get people to respond in a different way And then we transition the conversation towards acquisition. So the same concepts could apply for what you're doing or anybody else is doing, where you go and find what your perfect customer really, really wants and then get in front of them with that angle and then switch the conversation to your agenda. So it's just some conversations to be thought of there.

Speaker 1: I've also seen it in your style of business, where people create their own association, and that's been a very effective play as well in the B2B world. So imagine you had the Automation Engineering Association and you created your own association and you did what you had to do to get it accredited. You went as the association and approached these people and asked them to be a member or a founding member, and you are able to line up benefits, whether that's buying power or just something that they want. Maybe there's a continuing education they have to take, maybe finding a way to offer that for cheaper or free. And I've seen this strategy work really, really well. Where all of a sudden your perfect clientele and customer list is literally a part of an association that you also own, then you are the authority and you control communication.

Speaker 1: So give an example a friend of mine just to keep it more anonymous named Craig, is in a B2B space where they do a lot of homeopathic and medicinal machines that help people with respiratory issues. So what they did is they went and created an association around that and then every single perfect customer to buy their hardware to put in their business they went and market into them directly not to say, hey, can we sell you our hardware? But instead we've created this association around this topic and they've gotten literally tens of thousands of businesses to join it. And then they have these giant conventions every year that are sponsor paid and then they sell as many as they want. So it's kind of a backdoor strategy to get in front of your perfect customer. So once again, it's going to take some effort easier said than done, but if you're in this for the long haul, this is something that you could potentially deploy. I don't know if you've ever considered that, but I've seen it work really well.

Speaker 2: Well, not on the client end, but on the business acquisition of companies similar to ours. That's the company we just bought.

Speaker 1: So you bought the directory company, right? Yeah, yeah, okay, so is that how it was positioned on the association like an association No, but it can be.

Speaker 1: Okay, so there you go. So the reason I did it right there for you is maybe transform the business that you acquired, which is the directory. Can you elevate that to the next level and turn it into association? And if you go, google it and look at what the difference is, i think associations are kind of member benefit driven businesses that are more for serving a certain industry, giving them continued education, giving them both discounts, it's just, it's a huge platform. So that may be a great transition for you.

Speaker 2: But in our industry there's some tough competition. There There's already a couple of major associations that we actually belong to. That would be basically if someone came to me with a third association I'd be like do I really need to join this?

Speaker 1: Well, sounds like you need to do it from a different angle. You need to have a different hook, a different benefit, right? So instead of having an association that's similar to the other two, you need to have one with a unique benefit for yours, or take that same concept and push it towards your perfect clientele, rather than the businesses that are like yours. That may be a different way to do it.

Speaker 1: Yeah. So if I sold dental equipment and I wanted to break into that market and compete with the big markets, there's something you could do there is figure out a way to create an association around dentistry. It doesn't have to be around dental equipment, maybe it's around HR solutions, or maybe it's around something different. Maybe find something congruent that's not competing with what you're already a part of. You also may find something that you can offer that allows the other associations you're a part of to back you, and maybe even do list sharing. It's all about asking what would have to be true for this to work.

Speaker 1: I've known that owning the audience, owning the media, is a lot easier than going out and trying to earn it. So if you can find a way to do that, another way to do that is make the entire thing a nonprofit and allow all of the money to get put towards certain charities. There's a lot of ways to get people's attention, and a lot of these big businesses that you're going after need tax write offs as well. There's all kinds of ways to do it. So just some other thoughts for you to think about.

Speaker 1: Okay, cool, that seems a little more long term than what I'm looking for right now, today, that's okay.

Speaker 2: Yeah, that's what it is. I mean, that's a strategy.

Speaker 1: Yeah, yeah.

Speaker 2: No, no, that's something to me that you start today and you're not going to really see any benefit for a while, but that doesn't mean you shouldn't start it today.

Speaker 1: Well, it's also worth something. So if you started today and you have an exit at some point midway through, it still adds the value if you have more engagement, more audience, more influence. So this is a little bit of a different topic. The idea of jumping into a B2C or an e-commerce business or a local business very, very different type of conversation, but on the B2B level, business development just to recap some of it. the idea is how do we bring on one new customer or new client every quarter, really, when you don't have anything in place at the moment, the salesperson is no longer with the business. There's only a couple of different suggestions. I have one bite the bullet, pay the fee and get somebody in to be a headhunter and go and find the perfect person that already has the experience, speaks the language and already has some built-in rapport and influence over your perfect market. That would be probably the fastest method. You could also go out and find other companies that hire people like this and headhunt and try to take one and coach them. I would do more research if I do it myself more in Glassdoor and try to understand. what type of compensation plan does it take to get someone's attention? I think that would be huge, even if it's not exactly the same industry, but something that's very similar. Maybe they'll have a lot of connections and strategies to be able to get in front of the right people if they don't have the connections. Another concept would be to take what you're doing at Dealmaker Well Society with a direct approach letter. maybe shift that strategy and get creative around sending these letters directly to your perfect clientele with a different spin on it. I would add in probably more information and case studies around what you've done and what you're able to provide for them to get their interest beyond just asking for some sort of action in the letter.

Speaker 1: My third suggestion would be to potentially become the resource, create some sort of association that would allow you to either get in front of your perfect customers frequently and own that audience by providing something of value to them. The other way you can do it without an association is you can create a discounted buyers group. I've seen this a lot in the medical space. when I was in the medical marketing space, instead of an actual association, they were able to create kind of a club that allowed you to tap into discounts on all the stuff that they're already buying where they would go and have the economies of scale. They would represent this large buying group and they would be able to provide discounts for everyone on the stuff that they're buying. Not sure if that's applicable to you whatsoever in your business, but that's another way I've seen people be able to create influence quickly by saving people's money and doing economies of scale.

Speaker 1: It's kind of an interesting thing. Just threw a lot at you there, good, another reason we came on here together. I asked in our group if anybody wanted to come on and just chat completely off the cuff, and you raised your hand. Hopefully this provides some level of value to you. This is a little bit more of a difficult type of business to talk about than a lot of the other ones that we look at. Hope that helped a little bit. I'll see your thoughts on all this.

Speaker 2: Yeah, i think. well, number one, i'll be having to go back and watch the clip here and write all this stuff down. But no, i think there's some ideas that we've kind of kicked around and we've looked at a little bit, and there's others that we hadn't thought about at all that I think are definitely worth exploring. I think the direct approach letter with a twist is actually again something that we're pretty much all set to do. We just have to come up with a letter, and I think Bard or OpenAI can help us with that.

Speaker 1: Yeah, absolutely 100%. Well, a couple other thoughts is who would want to buy your business? Just an outside, off the wall topic who would be the perfect buyer for your business And is there any opportunity for you to potentially get in front of a company like that for a merger?

Speaker 2: Actually I think the best option. There is probably two of our biggest customers. I've actually thought about it a couple of times. They spend enough money on us and they have enough divisions that again they could save a bunch of money and basically just absorb us and all that talent and put it to use strictly for their purposes.

Speaker 1: It's an idea, just a thought. I know that when you look at for me, i'm always looking at surges of income. I'm looking at how is this resource, this opportunity I have, going to lead me to a large exit or lead me to a pretty large amount of cash flow? And then I also look at the opportunity cost of not going after that. So for me, when I look at a property, i just got an offer and accepted, on a property about four houses down from where I live. We're going to go live there and we have the ability in a two-year period to make at least a couple hundred thousand dollars off of that purchase and get to enjoy the house while we're there. So for me I look at two things. One is that an opportunity for me to get surges of income? I had to creatively figure out how to do it. And then the other thought I have is what if I don't do this? How else am I going to come up with that two or three hundred thousand dollar gain in the next two years?

Speaker 1: So I think when you're looking at your business, one option is do we go out and acquire another company and do a bolt-on? Do we go out and acquire a company strategically just to absorb their customer base and some of their human capital. Maybe we look at potentially going and selling our business to one of our customers. I think it depends on the concept of what you're trying to accomplish. Are you looking for a large amount of money at some point? The idea of the acquisition is to lead to an exit. Is that the option, is that the focus? Or is it also a cool thought to maybe exit a little sooner than take the money from the exit and be able to do something else with it?

Speaker 1: I think kind of keeping a creative mindset around what's possible can really lead to a lot of big gains as well. And that's what I do. A lot is I just figure out of everything I've got around me, what could I do with this resource? So it's the property. Can I rent it? Can I sell it? Can I flip it? Can I long-term rent it? Can I short-term rent it? I just look at all the different options and I weigh kind of the pros and cons. I don't know if you've gone through the exercise recently, but there may be some other options that are always sitting right in front of you, but since we've never considered them. They never manifested themselves, so that's why I wanted to ask that out loud, just in case.

Speaker 2: Okay, yeah.

Speaker 1: No we really didn't.

Speaker 2: I mean other than to say I wonder why they've never offered once. I look at what their annual expense to us was, It's like wow, I mean good for us, but surprising that no one's throwing it out there. But no, otherwise we're looking to do the opposite. We're looking to acquire companies like ours, roll them up, share resources, share engineering talent is really what we're trying to do. It's even more than acquiring customers, even though that's what you would do. When I'm looking at it, there are months where I might need four engineers and there are months where I might only need one, And I think every company goes through that in this business, because you want to pay the talent that you've acquired, even if there isn't all that much work for them right now, because it's going to be ridiculous to try to get them back or somebody to replace them for as good as them. So creating our own society, if you will, where we can share resources, is really one of the big ideas or one of the big reasons for doing what we're trying to do.

Speaker 1: Are you doing any subcontracting?

Speaker 2: At all.

Speaker 1: You mean us hiring No more around. Imagine if you were the second company in play here. Do you do any subcontracting with companies that are already working with your perfect customer? So think about like in the government space, the government contracting. You have contractors and subcontractors where Boeing may win a big contract and they've got five other contracting companies much smaller than them in the wings that also get the subcontractors Right no, that's actually how we get a new customer.

Speaker 2: A lot of times is an electrical contractor might bring us in. We work for them, but they're the ones that actually have the contract. And then eventually the relationship changes and we'll go in and do things that don't require them, but the end user company was so happy with the way we did things or how we did them, whatever that, even if they don't need the electrical contractor, they still come back to us and say, hey, we'd like to automate this piece of equipment or whatever it might be.

Speaker 1: Sure. What about when it comes to incentivizing more of these electrical companies, electrical contractors, to subcontract to you? Do you have some sort of plan in place there? Are you actually compensating them for referral, or are you allowed to legally? I'm not sure how that works.

Speaker 2: Oh no, we definitely do that, especially in a case where they're not doing the work. I mean, there's a lot of times where they're already there working with us and in those cases we don't really. We just think that They keep coming back to us because they know that we'll help make them look good, as opposed to worrying about how we are going to perform. But in a case where we might end up with a customer that You know, or with that customer and they weren't involved, i would certainly say You know, hey, we'd like to give you some kind of bonus for, you know, because the only reason we're even in the door Is because of you guys.

Speaker 1: Yeah, all that's true, yet You you haven't had too many referrals over the last several years, right? So I guess my question still stands is there something you could do, above and beyond what you're doing now, to potentially influence more referrals from those people who've referred you business in the past?

Speaker 2: Yeah, we would have to make and I'm not saying we could, and I've done a little bit of that in the past We'd have to make an honest effort, you know, to go to go visit electrical contractors or contact them the exact same way, you know, again with a direct approach, letter of some kind, but basically saying, hey, we're out here and we're looking for work and we know that you are into company ABC, whatever it might be. You know we have this automation group that we know you guys don't do it, but we'd like to partner up with you on any future projects. You know something along those lines.

Speaker 1: So, to be clear, you're not doing that now, but that also falls within the wheelhouse of what you're already doing, that you could be adding that to your, your attack. Is that correct? Yes, correct, yeah, awesome. So I mean.

Speaker 2: I guess I would I. Would expect that our salesperson Would have. I would expect that our salesperson would have done that, but I know that they did and that's probably one of the reasons they're not our salesperson anymore.

Speaker 1: Got it, got it. So one thought I just want to add a concept here to the table. So when I was in real estate residential sales this is 11 years ago I had an assistant and I didn't have my assistant doing any of the normal stuff that a real estate assistant would do no contracts, no listings, open houses. All they did for me was the one thing that That unlocked me to have a lot more prospects than everybody else. So I found something that worked really, really well and I hired somebody in a role of just doing The one activity all day long that leads me to get more prospects.

Speaker 1: So maybe just a thought for you instead of thinking about I need to go hire someone to do sales or need to go hire someone to do Business development, why not hire someone at a much lower level, lower wage, lower skill type position to just handle your direct mail Department for you?

Speaker 1: essentially, someone who comes in and it doesn't need to be a high-level salesperson, doesn't need to be a $65,000 year base plus 10%. Instead, it can be someone who makes very little money, doesn't take a lot of skill to take a process that you've developed and go out and execute it. So you can hire someone in their 20s to come and do that, and their job is to send out letters To all these different people. They handle all the envelopes, all the stamps, they handle out all the printing. They're using your templates, you're providing them the list of people to send it to, and You could literally build a sales process and a prospecting system using someone who's very low-skill, low-waver, low-wage labor employee. So that may be a way you can add leverage, because that's probably following on your plate right now, right, tending out the letters. Who's actually doing that?

Speaker 2: That would be me, but again, we don't do that very often.

Speaker 1: Well to for me the big walk away. If it was, if I were, you I'd be looking at. I have a strategy to get in front of people that works. I would try every single way I can continue to use the direct approach letters. I would send them out to my perfect customers with a different spin on them, with case studies. I'd send them out to the people Who could potentially send me more subcontracting jobs And I would hire somebody else to do all the legwork because that shouldn't be too expensive whatsoever And that could unlock you prospects.

Speaker 1: So one of the things I was looking at, my notes from another mentoring session I did very recently and I was talking to them about kind of my bulletproof plan that I put in play that allows The business to almost be impossible for it to fail. Right, you want me to tell you what that is real quick and I'll tell you how it kind of relates to what I'm talking about. So the process number one I want to have more prospects than I can possibly handle. At the end of the day, if you have more prospects For your business and you can possibly handle, it's literally almost impossible to fail. The number one reason this is true, number one reason businesses is allow, fail or hit plateaus is a lack of prospects. They don't have enough in the funnel to consistently provide Them new clients, and that's the number one reason businesses have a hard time or they end up failing. There's a lot of other reasons out there, but the number one way is they stall out due to lack of prospecting. So with what we just talked about, that could be a new funnel for you to have prospects more frequently.

Speaker 1: Imagine if you were sending out, on average, three to five thousand letters a month across the different types of people. I think you're gonna have quite a few responses And all of a sudden, you have all these options available. Imagine if your time, rather than doing that, is focused on having sales conversations with potential clients, having conversations with potential sellers, having conversations with people who own electrical companies, finding ways where you can work together and teaching them how to refer you business and adding you as a subcontractor on the account. I think your entire business could transform from that. Easier said than done, i'm sure, but that's the way you can do it Not leveraging just your own time, but leveraging somebody else's time to implement your system And I'm not thinking of VA, i'm thinking probably somebody in your actual area That can go to your office or wherever and you can supervise the process. That's what my biggest explanation would be. There might, my biggest suggestion would be for you but thinking that giving you a lot of Potential prospects could completely transform your company, and your actual company And your acquisitions.

Speaker 2: Yeah, no, i mean that's that's really. I Think I'm pretty fortunate. I mean I've been doing this a long time and there are very, very few jobs that we Put in a bid for that we do not get. But again, a lot of that is all reference people. I know people are background checking work we've done and they've. You know they've talked to other companies Because we freely give those names even if we won't tell them what we actually did. You know we almost always get a very good reference from every company We've never worked with. So You know we I've got a very good track record for securing business once we know that it's out there available.

Speaker 1: So to me the path looks pretty clear. I mean, you can take everything we talked about and do whatever you want with it. My suggestion, though, would be, if you had more opportunity and you could do it without having to hire someone who's very, very expensive And it's kind of a gamble. Instead, you know a process that works to get more prospects across the board, why not hire someone at a much lower level, lower skill employee to do that process And then, for the time being, you handle the incoming responses?

Speaker 1: Because if you have a strong track record and a strong conversion rate when you have the ability to bid on a job, why not do nothing but go after more bids and do it in a way where you're not Over leveraging, you're not paying tons of money to a headhunter right out of the gate And you're not sure if it's going to work or not. You're not going through a process of having to train someone over and over again on how to do business development and sales for your business. Why not do it this way and get some new clients in the door, get some new cash on the door, and that allows you to buy some time. So that that probably my number one one.

Speaker 1: That, that probably my number one walk away from this, from my position.

Speaker 2: Okay, i think that's for what we're, for what we're trying to accomplish and you know, and everything that we look for in an acquisition. I think what you're talking about is probably a pretty good short-term answer. But yeah, the whole point is to you know for for for me to step back, but I realize, in order to get to that point, there's probably a lot of stepping in. That's right down first.

Speaker 1: Correct. Yeah, and I think the fact that you hired someone before And it didn't work out the way you were hoping may mean that Couple things. Maybe it was the wrong person, maybe the process of getting them up to speed and getting them plugged in wasn't Working. Yeah, i think you're gonna have to step in a little bit before you can step back. If, if you want it to be able to take it to the next level.

Speaker 1: Yeah, yeah, and and sometimes that's how it is but even if you're stepping in just to get the process Perfected and working, then how much easier is it to if you have your prospecting working, you've got enough responses, you're having enough conversations. Is it easier to teach someone to come in and have the conversations instead of you to close the deal, or is it easier to have someone hired and go out there and make them a hunter-gatherer? If you've already got all the incoming leads, it's a much easier process to just replace that one part. Sure, yeah, you may. You may have someone already in your business that could handle that sales conversation And take somebody who's already been originated, somebody who's already Had the conversation with you, and just close the deal, because there's a big difference in skill set.

Speaker 2: Oh no, absolutely No. unfortunately, the one, the one person who's already talked to me about that is also You're my best technical guy, so I don't I don't really want to give him up.

Speaker 1: Understood, understood. Yeah, sometimes your best bartender gets promoted to the manager position and all of a sudden you lost your best bartender. So I get that. But you got to look and see which one's easier to replace.

Speaker 2: He's not a good manager.

Speaker 1: Yeah, I'm a terrible manager.

Speaker 2: So I get it.

Speaker 1: Okay, well, we're right here at the 54 minute mark. Uh, of course, everything we talked about is easier said than done. It always is right. I don't know all the different things, uh, about your business, all the ins and outs, but I know I know business really well. I know that creative thinking and comes to creative results. Uh, i know that there's never one way to do it. I also know that when someone's tried something, it didn't work. Most the time, uh, it's more on us than it is on the other person. I I always believe in that.

Speaker 1: I like to hold the mirror up and say, hey, what could I have done differently to see a different result? Then also, i look at the amount of effort necessary to be able to step out of a business. Sometimes is a lot, it's, it's very, um, under estimated. People don't think that it should be this hard right. Or we look at, hey, we need to fill this one role to allow me to step out of the business. But instead, sometimes that's not the right answer. Sometimes breaking it into multiple roles Maybe a better way to do it. Uh, and then the other thing is the one thing that most people Do wrong in business and that slows them down or makes them go out of business or makes them stall out as a lack of prospecting. And if you just fix that one problem, usually a lot of the other problems become a lot easier to fix and everything becomes more clear. So that's just some of the business principles that I've learned over the years, and I know I look like I'm 25. I'm 37. I own multiple.

Speaker 2: No, i'm sure I thank you very much. I think, uh, yeah, no, i'm sure that, uh, i mean, it's like, it's like anything else. I mean, you know, you can have all kinds of ideas, you can go to all kinds of masterminds, you can do whatever. It's all about action, you know, and so the things that that you brought up here today is it's really more about deciding You know which, which ones deserve immediate action steps. But either way, it's you know. You know It's great, the tips are great, but we still have to act on them. That's, that's really the bottom line 100.

Speaker 1: But I think what's interesting though, after just chatting together, it should be, in theory, easier to do Than going out and putting a lot of money Uh in time and effort towards trying to find another salesperson first, because if hunting, hunter, gathering is already done and all you need is a closer, that's a much easier thing to find. So that that's kind of my biggest concept here Is, sometimes we can split the roll in two and find a much easier path forward and a much cheaper path. So Okay.

Speaker 1: Yeah, yeah, well, awesome, are you? I'm going to see you this weekend, right, all right, am I going to see you this weekend? You are not going to see me? Oh, okay, i didn't know if you were coming. Uh, my wife is going. Your wife is going, okay, that's. I remember I had a conversation about it. So I'll see your wife this weekend in our Vegas event.

Speaker 2: So, well, awesome, i've got yeah, i've got some unavoidable stuff on Thursday, that's going to prevent me from getting on the plane, but she is going to be there, i'm going to be there. I'm going to be there. I'm going to be there. I'm going to be there. She is going to be there.

Speaker 1: Awesome. Well, i look forward to seeing her. Thanks so much for coming on. The Surgeon's Beacon podcast. You know all this is live, 100 off the cuff And you've got a really cool business, and I know that everything we talked about, just like you said, is all action focused. It's really on you to take the actions, but hopefully there's something you can walk away with. Well, maybe happen a little bit faster, easier, and you have some new ideas to think about. So, thanks so much for coming on. I can't wait to see you in person next time I see you. I'll see your wife this weekend at our meal maker meetup And thanks again for hopping on with me 제 보여 tô sonühsa.