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Hi, thank you so much for all your content you make. My name is Lorian and I sell personal finance courses and coaching to open

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We do thirty four women pardon four women for women. Ah with a plus

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Like screw the guys. They don't need to save money. You know, they can learn from someone else. I'm messing with

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So we do 30 million in revenue that ends. Thank you. I would like to be at I don't know revenue

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Which comes to my question, right? Um, and what is stopping me is our

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CAC to LTV ratio. Right. Both CAC is too high. Got the team working on volume right now

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LTV is too low. Okay, and

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AOV is too low on our front end. Okay. I think it's actually a cash flow

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Maybe straight

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Potentially, but I'm a little I'm a little confused on where like exactly to go to work. Okay

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How do you car questions right now?

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Primarily meta since all paid ads. Yeah. Okay, so all paid ads and you're running to what a webinar 2k webinar

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Okay, are you are you have a little ticket offer for the webinar?

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Are you charging like something is like a self-liquidating offer on the front of the webinar? No, never done a self-liquidating

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Okay, so free webinar on the front end. You have a two thousand dollar offer. Okay. Yeah, then what two thousand dollars or twelve month payment plan

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For two hundred dollars a month. Okay. Why are AOV is like nine dollars? Got it

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And

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Then acquisition costs like 1500 on the client and then we have a back end. Okay. That's 10k has a 7%

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That's your problem. Yeah, that's low outsourced sales team right now and

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So LTV is like 2400. Yeah, that's a problem

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Yes

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That's why I'm here. Yeah, no, you're centuries too low

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You will probably have to bring the sales team in house if you want to really fix it

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It's very hard to influence the team you'll want the

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Ascension to be integrated into the onboarding and so you sell the two thousand or thing you have your onboarding call the onboarding call

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The finish of the onboarding call is they set their goal setting call with what would become a setter

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And then that setter sets for a closer so they actually get three calls so they have webinar by

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They have an actual onboarding call because you want them like you want to make sure you deliver one-on-one or that's a group one minute you can do well

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you can start with

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You can start with group and then you will make more money if you go to one-on-one it is more ops

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But like we actually did this and I have a video that breaks down everything that you need to know

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Okay, yeah, and so one-on-one is better

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But if you're gonna start start the group and they're way of getting off the call like saying like okay

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You're dismissed is that you show me that you have confirmed your booking with your next call

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So that way I have a hundred percent through through line to the next now their customers

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They're gonna show up the goal setting call basically sifts

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For who he like what's your goal cool? What's that it basically just do another sales call again

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And then you push people into the ones who can afford it that makes sense into a closed call with

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Basically an invitation to join something that has more help or work associated. Yes

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Okay, great. You'll probably need to get third party financing in place

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Yeah, oh for the for the sales calls. Yeah, and and front end

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Like you should definitely have some BNPL options, so buy now pay later. You should probably have a few

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Okay, we have back in we don't have one

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Yeah

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Also with the webinar, I would recommend split testing the first five minutes

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So retest two or three different intros and look at LTV

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That will make you money

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But the biggest issue is that you're you're upselling seven percent like you need to be at you want to be at at least 25

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And you should shoot for 50 okay, okay, so just one more question as I'm that's like a longer term

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Solution right you mean bringing the sales team to bring the sales team in house and really optimize that process

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Why does it have to be a long term?

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Just a time it will take to find a sales leader and recruit and like shift leads from the you need to hire one person

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Really good sales director and then you hire six recruiting firms that do sales and say I need 10 guys from each of you

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And you can get a 60 person team and form like two weeks. Okay

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We just added 40 guys and two weeks to work

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We just paid a bunch of recruit like if it if we're doing that kind of volume

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We're just gonna go to somebody who has a big network of people lay there

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That's their full-time business recruiting sales guys. That's like great. These are requirements

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Go get them. Yeah, and I'm willing to pay for the speed

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So if it's and you can also negotiate if you're doing multiple like the same with multiple

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So it's like hey normally it's you know, it's 10 grand per per head

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But I'm gonna buy 20 from you. So I'll do it for five. Okay, so pay 100 grand all of a sudden you have a department

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Okay, cool so and action on that immediately and then while we're doing the recruiting and getting that person up to speed

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Just keep spending basically as much as we can afford to spend on the front end to keep like lead flow coming into the back

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Realistically if you spend less you will typically

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Row as will increase. Yeah typically

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YouTube's not that way though kind of random the more you spend the more profitable gets. It's wild. Yeah, it's the shit

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Anyways, if you have a cash flow issue right now or like, you know, it's like it's self-inflicted like you can just spend less

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And improve the improve the returns, but your CAC is appropriate

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$1,500 to a bar customer in that space. Yeah, it's like you're not gonna like you're not gonna get below a thousand

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And so this is a back-end issue like you just have to

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Increase the essentially rate and that's it. Okay. Thank you. You bet. Awesome. Hi

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I'm Jacqueline. I know we talked dentist. Yes

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3 million 5% profit margins. You have five different ones three-or-part time

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Perfect. Wow. Great memory. Yeah, you're in Dallas. It's 30-year-old business. I mean here to from your father. Yes. Yep

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And my social security number. Yeah, I can pull that

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So I know we talked yes last night, which you obviously remember and a couple other people from your team. We talked about this issue

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That my number one constraint probably isn't our cancellation rate

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But it is something that I'm like really perplexed about and want to at least go back with a little bit of something to share with my team about

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So our show rate or our cancellation rate is a little over 30% and

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This past year we've lost like a million dollars because people made appointments confirmed them and they didn't show up

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So if you have any

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Insight on what we could do to start improving that I would be really helpful. Yes

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I don't think it's the constraint of your business

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so

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Number one is you're going to want to make sure that the absolutely that that time is the right time for them and

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We ask questions like is there anything that will possibly get in the way of you showing up for your meeting

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And so we call this an integrity tie down and so after you get a time slot

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You want to ask that right afterwards because it like gets like shakes them out of there like mine for whatever reason

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It works. So I could come up with some narrative for it, but it works

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Number two is I think I mentioned this yesterday, but I think it might be worth considering pulling up appointments

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Like to basically can we bring them up sooner so that we have increased shop rates

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The next one is

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Let's see here. Do you want to make sure that you've automated reminders, which you probably do

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But then you want to have manual reminders on top of that. So if you have I would have an office iPhone

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And you want to send manual text at three times

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So you want to send the manual text at 24 hours. So basically think night before

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Second text is going to be morning up and the third text is going to be 60 to 90 minutes prior

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Basically when they have to like get your shit together get in the car now

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Ideally we like to have some sort of

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Selection that they pick that we've like some cost we have incurred. So this works exceptionally well for brick and mortar

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Which I'm sharing with you in the gym space. Obviously like we would say hey

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Sharon I've got

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this shirt

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Tell me what size you're at and I'll put it pull it aside for you and so when you come here

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I'll give it to or it's like do you want red or do you want blue like it just do some sort of a B

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Ask for them and so it could be as simple as like

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You're gonna you're gonna pull I mean because it's a dentist office, right?

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And so you're like, okay, what can I give them? Well, I always get free shit when I go to this office

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And so just like have them pick the free stuff that you put in their goodie bag and they and just and then I would send them a picture with their name on it

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So that they're like, oh man, they incurred this cost just for me. I have to show up now

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right

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Because you're having the issue because someone books and like six months later is their cleaning or whatever, right?

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That's the problem here

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Yeah, well we call and confirm their appointment a week in advance and then we call and remind them again three days in advance

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And then we call them and text them again a day before and they'll say yeah

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I'm gonna be there and then two o'clock comes and they don't you think you're you're reminding too far out

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Okay, like if if if I schedule an appointment on Saturday Monday morning is a different universe for me

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Yeah, no, I'm just being like super real and so I think I think a lot of people are that way and so

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All of the many reminders are like if you want it like I would use the automated ones for the far out like hey

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You're seven days away. Hey, you're three days away, okay, but I would have the ones that you're putting the real effort in 24

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Morning and right before okay, and then have the incentive have the personalization

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And I will bet you dollars to don us that that on its own would work. Okay, awesome. Thank you so much. I really appreciate it. No, you bet

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Yes, sir, my name is Tyler. I sell roofs to residential homeowners or commercial building owners

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Sweet, we're about ten months old did 1.8 million in revenue this short

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Yeah, somewhat a lot of the guys like I've been in the industry for a while so I had a lot of return customers

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I did about 1.1 from return right and then my poor sales guys brought the rest of the business

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Short-term goal would be 8 million greater than that and then long-term would be around 70 and exit

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The problem is we don't know what model to choose or how to do it. So like it was a franchising

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Yeah, are you going to make sure it's a storm chase or are you going to do private like cash pay like new we haven't done any storm chasing

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So it's all new roofs and repair so it's so it's the market that we live in is is we get storms every year. Oh, so

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Yeah, it's insurance 95% isn't okay. It's insurance. Got it. Okay. Yeah, so what I guess my question is like how would you scale or what model would you choose?

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And then how would you go about building that we already have 95% insurance, so I would probably keep doing that

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So what stops you from doing that?

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Well, we're gonna stay with insurance

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Well insurance is changing a little bit. The ductuals are growing up home under someone to get their roofs done as often

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But would you scale the multiple locations like different cities or would you do like a franchise model?

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Do you feel like you've nailed the model?

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No, I would so right now

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What I what I wouldn't want to do is try and make a decision within complete information when it when when it could be knowable

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And so I think once you nail the model then the path will be really clear and so if you nail the model and then the returns of capital are really

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Like interesting and you can be more patient than owning them all privately becomes more interesting if

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It costs a ton of capital to open up

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and

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Let's say it requires a lot of like oversight then sometimes a franchise model can

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Be good, but fundamentally I kind of see franchises is like being impatient

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Just being honest

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Because like all it basically it's the most expensive form of capital is you say hey

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We're gonna partner and you're gonna say you're gonna put all the money in and I'm only I'm gonna become a you know

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Maybe you get a 8% of top clients and maybe figuratively. It's like 25% partner or 30% partner location

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Which is okay? I'm not like nothing wrong with that, but I have seen such a graveyard of

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You know 20 location franchises that make no money and the amount of work that it takes to maintain 20 is about the same amount of work as it takes to maintain 20 where you're in a bowl

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It just happens faster

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But you make way less money. So I am I have a habit of flipping franchises back into let's own them all like the teeth widening chain that we bought

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When we bought it we had 14

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corporate stores we had 18 open franchise ease and so then over the last 12 months

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We bought out all 18 franchise ease and so now we own all 32

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But then like all of the administrative headache is just basically disappeared because we just run them the way we want to run them and we make more money

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Yeah, I think you need to nail it and then the scaling of half of become clearer

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I know that's not the sexiest answer, but that's probably the truth. No, thank you. Awesome. This may

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Hi, my name is Adam. I have a music lessons and recording studio in Atlanta, Georgia and your your content

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You in Layla what you what you've done is profoundly changed my life because you've put me out of my comfort zone in

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how I think and so

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I sell music lessons to neuro divergent kids between eight and 18 we have a half million dollars of revenue

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I think we could be at two million dollars of revenue

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Yeah, and what's stopping me is I've realized that the model is completely broken. I'm underpriced

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Overcompensating the staff. We're under utilizing capacity in terms of

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Time and and physical space and time and so

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My question is how would you apply first principles thinking to what I should do now

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Next and later sure to run the business that I've got as we make the transition to one that it becomes an asset. Yeah

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so

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Basically the core so there's there's two a chunked down version and chunked up version of the core economic engine that makes a business successful

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So LTV2CAC is the the most the smallest version of that engine you put some money in you get more money out

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That's the the gross profit you run the entire business off of at a higher level. It's for turn on invested capital

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Right, so it's like okay, that's what the core machine is, but then there's also equipment

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There's leases. There's buildouts. There's all that stuff that goes into it

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That's not typically included in LTV2CAC and then how much does it cost us to build this machine again and again

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So that's kind of how I think about it like micro level it's out of you to CAC

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Return on invested capital is what it is at the macro level when you're like opening more more locations and saying it cost me

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500,000 open a location the location makes me $500,000 from the first six months. Okay, cool

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I've got a two-on-one you know return on on capital within a year, which is awesome, right?

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So let's tactile for you. So the nice thing about the music business is that it's actually identical to the gym business

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So I know a lot about it

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And so the the models that I've seen works unbelievably well have been semi-private models

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number one or

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The 30-minute multiple times a week much higher ticket

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People you know people stay three four or five years with music lessons with their their their person

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I prefer semi-private because I think you get more loyalty to the brand and it's less about the music teacher

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Who can then leave and then take all of those you know students to go private?

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And so I like semi-private in general also

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I'm sure you could sell around the idea that they get a little bit more socialized and it's probably good for them and all that jazz and

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In terms of pricing I want my gross margins to be at least 80%

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Ideally 90 now you can do that when you're one on six

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Harder one-on-one

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And so if let's say you have

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Six kids right in the class or four. I mean you can you can you can you know level into it

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But let's say it's one on four keep it math simple and you charge

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200 dollars

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Sorry $50 per session times four kids is 200 you make $200 per session right well for you to pay for an hour of

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Music teacher's time. What does that cost?

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Right now that would be 40 to $50. Okay, so that's 80% right there

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So 240 so 80% gross margins right there now if you charge 60 bucks a session to be at 240 so then you'd be like 84

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Whatever in terms of gross margins. So you're above that. But that's my lot. That's my rule of thumb for

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Brick and mortar service businesses. I want it to be over 80 ideally over 90

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But I will not do a business if it has

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Lower than 80% gross margins some people do I just don't like to

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Because you don't have enough cash to do anything

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Right, and so then the question is okay. How do we how do we create the sales process in the positioning so that now you already are working with a special class of

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customers and so I would imagine that you would be able to probably even more easily than a traditional music

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Academy sell at a premium price

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Because if I'm a parent who had a neurodivergent kid, I would be willing to pay for a specialist and so specialist prices are a premium

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So I think that would work

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And in terms of the model

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You can I mean it just headcount divided by

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Teachers basically that you have to get the the core gross profit right in the business and then everything else kind of flows from there

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I'm kind of in the same position that this guy over here was and I don't have an operator and so I'm kind of in that swamp too and

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So we have to get more margin

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Yes, you're cash flow cash flow allows everybody to breathe better

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So okay, I guess that makes sense we raise prices and

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Get that a different sort of client

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funding sell one on four and say and just sell around the fact that it's a better experience for them

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Because you don't want them to be married to a teacher you want them to be married to like this is how I would sell it

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I would say listen misses whatever like if your child becomes really attached to a single teacher

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Then if that teacher leaves then all of a sudden this skill that they spend all this time on those

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So say with the teacher and then all of a sudden they stop playing violin after five years. You don't want that

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I don't want that what we want is to create a a positive relationship with the skill so they just continue for life right right

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And so we facilitate that by having other people in the sessions and so that the teachers sometimes do change so that no one really

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Gows to attach to anybody, but they really grow attached to the craft

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So if you are capacity constraints so some of you guys are in that position like you you're you can't you can barely handle the customers that you have right now

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You have three solutions the easiest solution is you just raise prices because if you have supply constraint

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Then that means that you have more demand than you have supply prices go up right and must be

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Don't do that and just suffer so just raise the prices make more money. That's the solution number one

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The second solution is changed client delivery ratio which we just covered so instead of going one-on-one you go one-on-four

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So you get more out of what you already have this gives you leverage and it gives you cash flow

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Comprehensive gross margins the third way is to bring other people in who can do what you do

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Which is then delegating you know the responsibility right to somebody else so that's the ultimate leverage that you don't have to do any

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That makes sense so there's a kind of like the three steps that I think about when I have somebody who's

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Supply constrained and they don't have any time they kick or the business and they can't sell more customers

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But they need to sell more customers to go to the business and so that the rock and hard place and the nice thing is we start with price because it's the fastest and easiest one to do

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You have to do anything you have to change anything you just say a different word and then you make more money

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So our our primary thing when we opened was it was a hundred percent private lessons

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Yeah, and so that's where that's basically the only difference in the the hypothetical gym in gym launch, which I

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Red the whole thing on the plane over here

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Well, how I didn't know that book didn't exist until it's a good book. It's awesome

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Like so what would that what would the you can still have one-on-one you can sell one-on-one just I would

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Predominantly sell some our private right if someone's like well

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I want the special snowflake treatment then you're like awesome. I'll give this special snowflake price right

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How would you design the that

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The the initial offer for that type of model the

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Six-week beginner challenge

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But it would be something whatever whatever the fast outcome that you can deliver to a kid who's neurodivertion who picks up a violin or whatever the

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Instruments that you teach are right it's like they'll be able to play this like a song in this period of time

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Right now it might not be good, but like they'll be able to you know, you'll recognize it kind of right

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But like I would want some sort of discrete outcome

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And that would be like an outcome you could also do some sort of subjective thing

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Which is that like they rate X or they like you could have a survey the beginning survey at the end that would be kind of more of an internal thing

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Got it

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But yeah typically you'll serve you'll sell some sort of package up front

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I'm gonna guess that the price point for what you're looking at is between 600 and 2000

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Is what the up front package would be and then you'd up sell or at least let people go into continuity on the back end

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It'd probably be somewhere in the neighborhood of like six weeks to six months

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You'd know that range better in terms of how long this offer

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Okay, yeah, and the best thing the we're drowning in context. We're a recording studio

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Yeah, kids are making songs all the time

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Yeah, and they should be feeding the marketing, but it's just so much then there's that whole problem

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But yeah, you just need time, man

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Like I think what's interesting is that like the more stressed you are the lower this is not me

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This is not a slight just to be clear. I'm saying in general the more stressed anyone is the lower your IQ is and so I'm saying this to say

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That again, this isn't a user. I'm saying that the problems that you struggle with

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When you are stressed when you have a good night's sleep in a little bit of time you solve in like five minutes and so

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If you want to increase your capacity, it's like let's solve for capacity and then a lot of these things that are keeping you up at night

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You're like, oh, we'll just run a six-week thing or one of 12-week thing will sell for this

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I can see how the margins work out and like we already have more demand than we can handle

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So it's okay if people say no at our higher prices because we'll make it up in profit anyways on the people who do say yes

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That makes sense. That wasn't a slight to be clear. I was thinking for anybody. Yeah, it's fine

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Yeah, no, it's it's true

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So cool. I appreciate that. Yeah, you're back

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Hi, thank you so much for all your content. You make my name is Lorraine and I sell personal finance courses and coaching to win

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We do thirty women pardon for women for women. Ah with a plus

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Like screw the guys. They don't need to save money. You know, they can learn from someone else. I'm messing with

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So we do 30 million in revenue that ends. Thank you. I would like to be at I don't know revenue which comes to my question

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Okay, and

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What is stopping me is our

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CactLTV ratio. All right. Both CAC is too high. Got the team working on volume right now

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LTV is too low. Okay

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and

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AOV is too low on our front end. Okay, I think it's actually a cash flow

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Maybe straight potentially, but I'm a little I'm a little confused on where like exactly to go to work

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Okay, how do you car customers right now?

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Primarily meta since all paid ads. Yeah, okay, so all paid ads and you're running to what a webinar 2k webinar

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Okay, are you are you have a load ticket offer for the webinar?

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Are you charging like something is like a self-liquidating offer on the front? No, never done a self-liquidating

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Okay, so free webinar on the front end. You have a two thousand dollar offer. Okay. Yeah, then one two thousand dollars or twelve month payment plan

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For two hundred dollars a month. Okay. Why are AOV is like not? Okay? Got it

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And then acquisition costs like 1500 on the client and then we have a back end. Okay. That's 10k has a seven percent

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That's your problem. Yeah, that's low outsourced sales team right now and

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So LTV is like 2400. Yeah, that's a problem

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Yes

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That's why I'm here. Yeah, no, you're centuries too low

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You will probably have to bring the sales team in house if you want to really fix it

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It's very hard to influence the team. You'll want the

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Ascension to be integrated into the onboarding and so you sell the two thousand or thing you have your onboarding call the onboarding call

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The finish of the onboarding call is they set their goal setting call

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with what would become a setter

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And then that setter sets for a closer so they actually get three calls so they have webinar by

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They have an actual onboarding call because you want them like you want to make sure you deliver one-on-one or that's a group one minute you can do well

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you can start with

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You can start with group and then you will make more money if you go to one-on-one

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It is more ops but like we actually did this and I have a video that breaks down everything that you need to know

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Okay, yeah, and so one-on-one is better

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But if you're gonna start start the group and they're way of getting off the call like saying like okay

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You're dismissed is that you show me that you have confirmed your booking with your next call

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So that way I have a hundred percent through through line to the next now their customers

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They're gonna show up the goal setting call basically SIFS

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For who he like what's your goal cool? What's that it basically just do another sales call again

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And then you push people into the ones who can afford it that makes sense into a closed call with

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Basically an invitation to join something that has more help or work associated. Yes

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Okay, great. You'll probably need to get third party financing in place

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Yeah, for the for the sales calls. Yeah, and and front end

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Like you should definitely have some BNPL options so buy now pay later. You should probably have a few

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Okay, we have on the back end. We don't have on the front end. Yeah

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Also with the webinar I would recommend split testing the first five minutes

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So retest two or three different intros and look at LTV

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That will make you money

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But the biggest issue is that you're you're upselling seven percent like you need to be at you want to be at at least 25

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And you should shoot for 50. Okay. Okay, so just one more question as I'm that's like a longer term

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Solution right you mean bringing the sales team in house and really optimize that process

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Why does it have to be a long term?

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Just a time it will take to find a sales leader and recruit and like shift leads from the you need to hire one person

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Really good sales director and then you hire six recruiting firms that do sales and say I need 10 guys from each of you

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And you can get a 60 person team and form like two weeks. Okay

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Okay, we just added 40 guys in two weeks to work

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We just paid a bunch of recruit like if it if we're doing that kind of volume

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We're just gonna go to somebody who has a big network of people that they're that's their full-time business recruiting sales guys

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So it's like great. These are requirements

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Go get them. Yeah, and I'm willing to pay for the speed

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So if it's and you can also negotiate if you're doing multiple like the same with multiple

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So it's like hey normally it's you know, it's 10 grand per per head

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But I'm gonna buy 20 from you. So I'll do for five. Okay, so pay a hundred grand all of a sudden you have a department

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Okay, cool so and action on that immediately and then while we're doing the recruiting and getting that person up to speed

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Just keep spending basically as much as we can afford to spend on the front end to keep like lead flow coming into the back

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Realistically if you spend less you will typically

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Row as will increase. Yeah, typically

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YouTube's not that way though kind of random

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The more you spend the more profitable gets it's wild if you have a cash flow issue right now or like you know

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It's like it's self-inflicted like you can just spend less

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And improve the improve the returns, but your CAC is appropriate

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$1,500 to a bar customer in that space. Yeah, it's like you're not gonna like

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You're not gonna get below a thousand

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Yeah, and so this is a backend issue like you just have to

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Increase the essentially right and that's it. Okay. Thank you. You're about awesome