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David: You’re talking on the phone too much. All right. I just wanted a little more in general but I was hoping we get some good answers out of it.
Obviously we’re all here to build our businesses and kind of take them all to the next level and I define bringing things to the next level as finding ways to generate more profit on a monthly or annual basis, whatever it is. So what will be the top thing that you want to focus on to do that with your business?
And I know there are lots of ideas going around from iPhone apps to new programs or whatever but I’m really looking at going online and trying to sell something to the massive audience, to selling more high-end services, to upsell existing clients or expand to another location and …
Damien: It’s a good question.
David: Anyway, yeah. I know everyone here has a business that’s doing well. [0:00:59] [Indiscernible] do just that much better. So what areas are you looking to really focus on to get it…
Ian: All right. For me, the biggest thing would be retention just because keeping your clients and then having that be able to build on top of that has been the biggest thing for me and that’s actually what I’m focusing on now because I have been losing some people because I have been focusing on just getting a ton of people in and then it watered the program down which I don’t want.
So building good systems for retention and making people feel like you’re really there and you care about them. They’re getting enough attention as if they were a one-on-one client. It does a lot of work and then the second thing I found which is really powerful is postcards and Sam has helped a lot with that. But for me, my brick and mortar business, postcards have been the most lucrative. If you get a good postcard and it’s sent out and it lands in their inbox or mailbox…
Damien: [0:02:02] [Indiscernible] are postcards.
[Crosstalk]
Ian: Yeah. We’re making a swing through it. But yeah, postcards and then having – the other thing you just [Indiscernible] an email where they feel like they’re constantly getting value and that goes along with the retention thing but for me, those have been the number one thing from growth and increasing – like profit. If people stay with me and then I can keep them happy and then I can build more people, that’s how we’re growing.
Neil: I’m going to take a completely different take on this. Obviously [0:02:55] [Inaudible] very quickly I think [Inaudible]. Something that I learned which has been an eye-opener for me coaching through Sam and the rest of the folks was that I think we grew too fast [Inaudible] opening too many locations so [Inaudible] something very important last night, shrinkage, and I think shrinkage in terms of focusing on your core business. So we’re cutting down from six to four or whatever the number of businesses.
Now more important than that and something we’re doing is we’re just not looking at locations and number of people. We’re also looking at the classes. Is your class really profitable? Do you have the right number of people within? Do you have the right staff in there? Do you have the right trainer for that particular staff and why is it growing or not growing and is that a profitable class?
Unfortunately, you either cut it or you combine it. So you don’t feel like you’re letting people down. You’re just positioning it differently which is a strange thing. It’s like do less work, make more money and be more profitable per person and it’s like against the grain of everything we think at.
So I think that has been a very powerful lesson for me to learn to [0:04:14] [Indiscernible] other businesses and I think if that’s [Indiscernible] it’s something. But if you [Indiscernible] the level of analysis and due diligence [Indiscernible] you’ve really got to know your numbers and I’m not just saying know your numbers as like a cash flow or phrase. You got to know how many people are in that class. Who’s the trainer?
The other thing we’re doing in [Indiscernible] as well is we’re understanding the pipeline. Most people talk about, “How do I get the lead?” We know we have 50 leads scheduled – a pipeline of 50 leads scheduled for the month in advance, something very different.
If you don’t have a pipeline of leads, you got a fucking problem seriously. You got a major problem. Either your marketing is not working or your retention is so bad in the back and I’m not saying be perfect. We screw this up all the time but now every month, the first thing, one of the numbers we talk about is [Indiscernible] because we’re adding to the system. What is our pipeline? Do we have 50 people taking our class? Do we have zero people taking our class?
Are there sufficient people for us to have an extra session or to leave that class alone because it could grow or that class is dying and it can’t grow? These are not – like you don’t have to go to school and be an accountant and mathematician to do that. If you don’t have a pipeline or even a healthy pipeline, you’re screwed.
If you’re waiting for the next lead to come off the internet, you don’t have someone scheduled and take your trial classes off them, you’re in trouble. So I learned those lessons the hard way and I think those specificity – the actual specifics of that I think is going to help us really grow to get – and I’m talking profit per person. I don’t care about the revenue numbers anymore.
So what if you make six figures in nine months under [0:06:10] [Indiscernible]? So the number is meaningless unless you’re getting more money and cash flow into your [Indiscernible]. So really drilling down into specifics but it’s not just any specifics. It’s like what is the most important thing? The pipeline. Knowing how many people are there, knowing how many people may convert because you got the numbers, knowing how many people are in each class and who’s the trainer.
That’s the only way you can make intelligent, profitable decisions because most people are making profitable decisions with unprofitable information. How insane is that? How can you make a profitable decision with unprofitable information? We’re just fucking gunslingers shooting from the hip. We’re walking there like John Wayne. Today we’re just going to close this class down and fire [Phonetic] all these people. We have the wrong information in making the decisions. So the whole concept of getting the right info, shrinking it down and making the right result is I think a very powerful, profitable lesson. I learned that through this process [0:07:14] [Indiscernible].
Ian: Can I [Indiscernible] real quick because actually my question has to do with expanding but I think people are confused by growth and expanding. And I think you guys were talking about expanding a little bit too because growth would be to grow your bottom line whereas expanding would be to open a new location and have more overhead and stuff, right?
Neil: So that’s on the [Indiscernible] boot camp style of it. My expansion model for me personally is your businesses and working with other people. It doesn’t matter whether it’s [Indiscernible] because we’re forming relationships with other people across the country. Sam and I are talking about that and talking to various people and we spoke to one or two people out here [Indiscernible] expand the businesses.
But the way I’m looking at it is an equity expansion. I have this very different concept in my mind. My business growth is limited. Just think of business [Indiscernible] for a second. I can only handle so many SEO clients. Once I get over a certain number – I do make mistakes and I openly admitted it and I do, right? [Indiscernible] but I know there’s a number now and I learned this the hard way that I can’t go over because I’m not going to get quality of service. So my business can’t grow any more than that, right?
So my whole philosophy is equity. I’m going to go off with partnerships and deals and relationships. That’s equity. Chi-Town boot camp is an equity stake. I have no interest in getting in. The only pain that I want is equity stake in my business. How many have equity partnership in another boot camp? I don’t want to do that. It doesn’t mean you’re a trainer, you only have an equity stake. You have much more than that which is intellectual capital, right? And we saw – oh, can I get a few hundred more people in?
Fuck that. Why do you want to work so hard and get a few and a hundred people in and you bust your ass to keep them entertained when you can take your knowledge, take another struggling gym and turn the fucking thing around and become a 50 percent equity partner? What’s wrong with that? And you never have to work because you guys have so much more value that I could never understand. Like the training session we had this morning.
So for me it’s all about equity. I’m growing my SEO business to equity. I’m looking for businesses and I’m talking straight up. I don’t want you [0:09:33] [Indiscernible] invest in it but I’m going to take an equity stake. It’s a painful thing to do because I’m taking five steps back and I’ve got to invest the money now but in a year from now, I’m going to have [Indiscernible] coming in and it’s not going to be focused on this item and [Indiscernible] and SEO business is like that.
[Indiscernible] I’m in trouble. My clients don’t care. And you know what? It’s not their problem to care. I’m screwed because I don’t know what’s going to happen to SEO business three years from now. I’m [0:10:08] [Indiscernible] I don’t know. You don’t know, right? So I’m building equity stakes because that’s the long term vision for me. So my expansion is not necessarily getting more clients. Yeah, I’m going to do that but I’m like two, three years down the line.
Sam: You still have a lot of pieces of pie.
Neil: Pieces of pie in every business, at every business.
[Crosstalk]
Neil: And that’s how I’m expanding. I’m talking to four, five people. I’m talking to Sam. I’m talking to other business trainers. I mean that’s why I’m here to build relationships. I’m not going to say, hey guys, I want an equity stake in your business. I’m going to give as much help as possible and something is going to come back to me. You know, somehow …
Sam: [0:10:49] [Indiscernible] this one business. If that business changes, then what are you going to do? You know what I mean? And it’s [Indiscernible] that overnight something can happen and you don’t [Indiscernible] and I learned that the hard way because for many years, my gym was just my only income.
Well, no matter how many times you watch The Secret, how many times you say, “Oh my god, it will come to me. Oh, it’s not the economy. It’s my thinking. Oh, I have bad relationship with money,” that’s bullshit. People are losing their houses. People have lost their jobs [Indiscernible] so people don’t have money. People can’t afford [Indiscernible]. They can’t afford their house. They’re not going to come for one-on-one training.
So then you have difference in your income. So [Indiscernible] boot camps then I start doing stuff with Neil then I start doing stuff with a bunch of you guys. I started the Super-Trainer. I started the coaching program. I started all these parts and now, it’s funny because I get a check pretty much everyday in the mail and it’s funny because it might be 20 bucks. It might be $20,000. It might be five bucks. It might be $500 but it’s coming from different source of income and it’s coming from different revenue sources so if one dries up, no big deal. I have like 20 other ones.
As far as your question is concerned Dave, a lot of people think that – it’s sexy when we talk about profit. Everyone wants to talk about getting more clients in. OK? That’s the sexy thing to do. OK? Push a button. Get more clients and do the marketing and profit more. OK? Now there’s two different ways you can make a profit. You can get more people in or you can control your cost or you decrease your cost and nobody wants to talk about that. As Americans, we don’t want to talk about that because we don’t want to [Indiscernible]. We’re in a nation that we’re just over – we’re in Vegas right now [Indiscernible]. You go to an all-you-can-eat buffet, we throw lobsters out. Oh, I’ll only eat half of the lobster. People are dying in the world. We’re throwing lobsters out. OK?
I think that you can look at your budget, everything you spend money on. Every quarter, you really look at it and ask yourself, “Do I really fucking need this?” If you don’t need it, then get rid of it. [0:13:15] [Indiscernible] 50 bucks a year. I have $97 a month here. I have $47 a month here, $199 here. It all adds up.
In 2008, I [Indiscernible] for the first time. When the economy [Indiscernible] first time I did it. Do you know that I went through everything? I [0:13:35] [Indiscernible] and then every quarter now, I go in there and even if I can cut every quarter – I’m not talking about skipping on quality. I’m not talking about skipping on education but skip on bullshit. OK? And control your cost.
Once you control your cost, then you have peace of mind. Because I don’t care – you get a million other people come to your gym but if your costs [Indiscernible] your revenue keeps chasing your gross, you’re in the same place. You’re not going to have peace of mind.
I think the best example of that is Toyota Motor Company because they control costs. When the economy hit, what happened to GM and Ford? They went bankrupt and Chrysler. Chapter 13 bankruptcy. Toyota laid off people and paid them. Just take a few months off. I’m still going to pay. Because they controlled the cost the whole time and they know the bottom line.
Trainers in general, they do not know their number. They just buy whatever they want all in one show. Buy this, buy that, buy this, buy that and especially marketing stuff. Just oh market, market, market, market. Again, Ian touched on it. Your clients are your marketing. You’re marketing to your [0:14:53] [Inaudible] clients. There’s a gold mine sitting right in front of you. OK?
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