ABOUT THIS EPISODE
In this episode Will and Josh talk about the 5 unique stages of cell phone repair business growth. They also answer an audience question regarding how much profit margin to expect in a cell phone repair business.
WHAT YOU’LL LEARN:
Discover how to identify what stage you or your business is in, the challenges at each stage and how to grow to the stage that you want to reach. You’ll also learn what profit margins make sense in your cell phone repair business.
AskWill+Josh 009 EPISODE TRANSCRIPT:
Will: Let’s do it.
Josh: Let’s go!
Will: All right man, we’re back.
Josh: Man, actually this one has been – you’re right, we’ve been away but I think you like to say this every time.
Will: Yeah
Josh: Right?
Will: Yeah.
Josh: Because it always feels good to be back.
Will: It’s good.
Josh: This one was a good break though, man. We’ve been busy.
Will: You know, really busy. It’s been crazy, crazy busy.
Josh: It actually has.
Will: And actually, what I’ve – I’ve been feening to get back though. It was almost like I’ve been missing something, you know what I mean?
Josh: Well we have, right?
Will: Yeah
Josh: Because we’re not connecting with – we’re not connecting with our students, with the audience, you know, and really helping to – it’s funny because we kind of get caught up in our own world at what we do.
Will: Right
Josh: We don’t get the opportunity to share that all the time. So it’s always cool when we get to kind of reflect.
Will: Exactly.
Josh: It’s reflection moment for us…
Will: Exactly.
Josh: …to really kind of open up to share – open the kimono.
Will: Exactly.
Josh: Right?
Will: But I will tell you what the benefit of that is, is we have a lot of ideas of what to talk to our people about…
Josh: Right.
Will: …in between – in between time and in the meantime.
Josh: Right.
Will: So, I do like that aspect of…
Josh: That’s true, man. Yeah, it gives you that perspective.
Will: Exactly. And this will be great to talk about, man. This will be great.
Josh: Yeah. Hey, put a pin in that.
Will: Put a pin in that.
[Laughter]
Josh: Yeah.
Will: So, what do we – so, with that being said, what are we talking about in this particular episode?
Josh: Well, the last one we put a pin in.
Will: Yes.
Josh: Right? We were reflecting on where this industry is versus where it was when – way in the day when we started…
Will: Right
Josh: … with the repair store.
Will: Exactly.
Josh: And like three years ago, we did a segment, we did a webinar.
Will: Uh-huh.
Josh: About the five stages of repair business.
Will: Exactly.
Josh: Right?
Will: I remember that, I remember that. I remember that quite clearly. I…
Josh: Yes, so we’re like, you know what? Let’s dust that off and dive back into this.
Will: Five stages of the repair business.
Josh: Right.
Will: That’s very interesting.
Josh: Yes. So, exactly. So, what this is, is it’s kind of a deep dive into identifying where you are in your business.
Will: Right.
Josh: And where you going to go.
Will: Right:
Josh: Right? So maybe you are where you are.
Will: Right
Josh: Right? And we’re going to help you identify what works and where your challenges are.
Will: Right.
Josh: So even if you don’t want to grow to the next stage…
Will: Mm-hmm.
Josh: …you’re going to at least say, “Let me solve this problem” so you can remove yourself from the business and remove the heartache at least, right?
Will: Exactly, exactly.
Josh: So, when we say stages, all the stages really are again, it’s – we actually – it’s not quite fine. It’s technically a little weird but it is – it’s zero to five.
Will: Right.
Josh: Right, so there are six stages.
Will: Mm-hmm.
Josh: But what we identified was by revenue.
Will: Mm-hmm.
Josh: And there are two actually key markers to this, right?
Will: Mm-hmm.
Josh: It’s revenue and the amount of team members you have but they go hand in hand.
Will: Right.
Josh: Because as your revenue goes up, you need people to help you.
Will: Exactly. Actually everything goes up.
Josh: Yes.
Will: So as one identifier or one marker goes up, such as people…
Josh: Right.
Will: …right, everything else tends to go up.
Josh: That’s right.
Will: Right? And I guess it would be the same way in the opposite direction too, as things go down, everything else tends to go down.
Josh: Yeah, exactly. Now, there are unique businesses like software businesses where you can get you know larger scales of economy.
Will: This is true. This is true.
Josh: Right? You could do, you can generate way more revenue…
Will: Yes, that’s true
Josh: …with less people
Will: Right.
Josh: But this is a service business…
Will: Right.
Josh: …which is why we created this specifically for the repair business.
Will: Exactly.
Josh: Because service businesses have things that need to be serviced with.
Will: Exactly.
Josh: We’re here to service people.
Will: Exactly.
Josh: So, when you service people, you need people to help you service those people.
Will: Exactly.
Josh: Right?
Will: Exactly, for sure.
Josh: [Phone ringing] Yeah and I don’t know what’s going on here? How did that get through?
[Laughter]
Josh: Thought I had it on airplane mode.
Will: It happens, it happens.
Josh: Oh, look at that.
Will: Josh got a phone call. He’s a very important person so…
[Laughter]
Will: … that’s what happens when you’re a VIP and you’re live on, right?
Josh: Yeah.
Will: You have to take those phone calls.
Josh: Yeah.
Will: I guess the thing would be if you’re not getting phone calls then you should be wary, right?
Josh: Well, typically.
[Laughter]
Josh: I’m OK. We’d get back to that place to be honest with you. I’m all right with getting back there.
Will: Right, right, right. Get that time back there. You don’t need…
Josh: Right?
Will: Yeah, you don’t need…
Josh: We just cut the amount of phone calls down a little bit.
Will: [Laughter] Exactly.
Josh: Just a little bit.
Will: Exactly. So, let’s dive into it.
Josh: Yeah. So, we’re just going to start at a high level.
Will: OK.
Josh: As far as like, let’s talk real quickly about the stages and then we’ll dive deeper in each one.
Will: OK. So, what are the stages? You’re talking about five stages of the repair business.
Will: Right.
Josh: So again, you know it’s deceiving because there’s technically six.
Will: Right.
Josh: But stage zero, we don’t count…
Will: Right.
Josh: …for this reason.
Will: Yes.
Josh: So it’s zero thru five.
Will: Mm-hmm.
Josh: Stage zero is what we call Ideation.
Will: Right.
Josh: Ideation is just you’re not actually in the business, you haven’t committed to this yet.
Will: Right.
Josh: This is an idea that you have. You’re doing research, right?
Will: Right.
Josh: But, it’s important enough for us to want to talk too about it because there are some challenges that you face when you’re in there and there are certain things that you need to know to figure out whether you want to take the step into the next stage.
Will: Yeah.
Josh: And we’ll come back to that as far was what that looks like.
Will: Actually, I think ideation is one of the most important parts of this process and you know, we actually…
Josh: That’s true.
Will: …we actually focus a lot on this because in the education business, ideation usually is the customer that calls us and the customer we talk to first. So, we’re one of the first points of contact for a person in the ideation stage.
Josh: Right.
Will: Because a lot of times, they’ve done the research a little bit, but they want more information.
Josh: Right.
Will: And you know we’ve been in that place or we’ve actually talk to these guys and we have to answer a lot of questions, fill in a lot of…
Josh: Got to fill in the blanks.
Will: Fill in the blanks.
Josh: Got to fill in the blanks.
Will: Exactly.
Josh: Right?
Will: So, ideation is a very important part. It is a very important stage.
Josh: It’s an important part. For sure, everything starts – anytime you start a business or anything, it always starts in ideation.
Will: Exactly.
Josh: Right?
Will: Exactly.
Josh: And there’s a processes you could put in place to help you if you’re there. And that’s why we created this stage, ideation.
Will: Yeah
Josh: It’s because through the years, what we’ve seen with this business is a lot of people start there.
Will: Yes.
Josh: They don’t know if this is the right business for them or not.
Will: Exactly.
Josh: So they need basic information to even understand whether it make sense to just jump into stage one.
Will: Exactly.
Josh: Right?
Will: And I think it’s important to also say before we jump to next one, Josh is that ideation regardless of what business you’re getting into, and you kind of said this already, but I wanted to be clear that ideation is a typical general space for anybody looking to start…
Josh: Yes.
Will: …any business.
Josh: Any business.
Will: Any business. It’s not just the cellphone repair business.
Josh: Yeah.
Will: But it’s any business when you’re looking to move to that next level.
Josh: For sure. In fact, it’s funny because throughout the years, I’ve started multiple businesses. I got side deals with you know software and different things we built. And when I brought in other team members…
Will: Right.
Josh: …it always started with an idea.
Will: And idea. Right?
Josh: Right? It’s an idea.
Will: Yes.
Josh: List it down and figure this out.
Will: Yes.
Josh: But you have to invest time into growing that and flushing out whether it makes sense.
Will: Right.
Josh: Can we monetize it or should we – is this aligned with what we want to do? And that’s why we call it an ideation stage.
Will: And what are – what are some of the problems wee see in ideation stage? Because I can say with that…
Josh: Well, we’re going to come back to it.
Will: Well, I think one type of that is that the ideation stage, you can get in trouble by – and I just want to make this a point, is you can get in trouble by jumping past ideation stage.
Josh: Yeah.
Will: If you really don’t understand…
Josh: It’s true. Yeah.
Will: …what it is and how important it is, which is why we’re talking about it.
Josh: Right.
Will: If you forego or you move too fast through the ideation stage it could be a detriment to the rest of the process.
Josh: Right. And really it’s planning.
Will: Yes, it is. It is what…
Josh: That’s what that is, right?
Will: Yeah. Yeah.
Josh: That’s why we gave it a stage.
Will: [Laughter] Exactly.
Josh: Stage zero, Ideation, right?
Will: It’s that important though so we want to make sure you got to understand it.
Josh: It really is. It truly is. Everything starts there.
Will: Exactly.
Josh: And we wanted to identify you, if you’re in that stage.
Will: Yes.
Josh: Because we don’t want to tell you that’s not an important stage.
Will: Exactly.
Josh: And there are tools that you need to help you move to the next stage.
Will: Exactly.
Josh: Or, you could figure out, this is not the right thing you.
Will: Right.
Josh: So, you can go ideate in a different industry, right?
Will: Boom! That’s it. Boom!
Josh: Stage…
Will: Fireball, psshh! [Laughter]
Josh: Boom! Yeah. Fire! It was that, you go, fire!
Will: Exactly.
Josh: But man, I just went back street fighter. So Stage 1 is what we call wantrepreneur. Right?
Will: wantrepreneur. Yes.
Josh: And that’s not a derogatory term.
Will: Right
Josh: By any means, right? It – you know, but you want to be an entrepreneur, which is why we called it a wantrepreneur, right?
Will: Absolutely. Yeah.
Josh: And here’s why we say that is because you know, entrepreneurialism right now is super hot. Everybody, “Oh, I’m an entrepreneur. I’m an entrepreneur. I’m a CEO.
Will: It is hot right now. Yeah.
Josh: Right? CEO comma oh, oh, oh.
Will: [Laughter] Exactly.
Josh: Right? Like everybody is like this is what it’s all about.
Will: Yes.
Josh: But at the end of the day, there’s a lot of work involved in being an entrepreneur. And a true entrepreneur actually is more that just themselves.
Will: Yes.
Josh: Right?
Will: Yes.
Josh: And that’s why we deemed this stage “wantrepreneur”.
Will: Wantrepreneur.
Josh: And in fact, we split this stage into two parts.
Will: Right.
Josh: So one is, this is a side gig for you.
Will: Yes.
Josh: So this is something you do on the side like you were an Uber driver.
Will: Right.
Josh: Right? It’s not something – you’re not doing it full-time, you’re just doing it on the side to make some extra money.
Will: Yeah, it’s not paying. It’s not paying all of your bills. It’s not the majority of the bill, you know, it’s not the thing that’s supporting your lifestyle. It’s anything…
Josh: Right. It’s just adding to it.
Will: Adding to it.
Josh: And you’re figuring out. It’s almost an extension of ideation.
Will: Exactly.
Josh: Because you’re testing it, right?
Will: Exactly.
Josh: To see if this is something that works.
Will: Exactly.
Josh: Can you build in something that allows you to skip…
Will: Right.
Josh: …the tipping point that we call…
Will: Hence the words – hence the words side gig, right?
Josh: Right. And then there’s the tipping point to where you can flip over and now you are fully self-employed.
Will: Right.
Josh: Right? But you’re a team of one.
Will: Yes.
Josh: An army of one.
Will: Yes.
Josh: Right? So that’s why we call you a wantrepreneur because at this point you want to build a business but you actually are self-employed, right?
Will: Exactly. I think at this point it’s important to point out that – I think the word would be for me is committed, right?
Josh: Yeah.
Will: Whereas before, you’re not totally committed to this side gig.
Josh: Yeah. That’s why we used to call it the toe dipper, right?
Will: Exactly.
Josh: You’re dipping your toes, in fact, if you go back through the history of Cellular Repair School and you check out some of the other trainings we do…
Will: Right.
Josh: Service to have blueprint, hint. Right?
Will: Go get it.
Josh: Go get it.
Will: Go get it.
Josh: Right? But this is what we talk about. This is the concept of a toe dipper.
Will: Right.
Josh: A toe dipper is a side gig.
Will: Exactly.
Josh: That’s what that is versus fully committed.
Will: Yeah.
Josh: Right? And there are different ways you can build that.
Will: Exactly.
Josh: So, but yeah, this is stage 1 and again, we’re going to come back. I just want to kind of lay it out for you real quick and then we’ll come back and dive deeper into them.
Will: Right.
Josh: Right? So then obviously, as you progress through stage one, you go to stage two.
Will: Stage two.
Josh: So stage two, now you’ve got a few employees, two to three. You’ve hired a couple of people. You’ve had your first hire maybe two.
Will: Right.
Josh: Right?
Will: Right.
Josh: You got a small team.
Will: Mm-hmm.
Josh: It’s no longer you anymore. Now, this is what we call the New Employer stage
Will: Oh. This is what…
Josh: Right?
Will: Yeah, this is a very important stage.
Josh: Yeah. There are a lot of challenges at this stage.
Will: A lot of changes, a lot of challenges and a lot of development in this particular part of the stage, yes, I guess. For sure.
Josh: Yeah, exactly. But, this is one of the most exciting stages.
Will: It is.
Josh: It’s because now, you’ve got other people that do things.
Will: Exactly.
Josh: Right? That you would normally be doing so you have multiplied your powers.
Will: Exactly.
Josh: But, you have the challenge of managing these personalities. [Laughter]
Will: Well, we’ve seen here. This could be TNT? Or this could be Nitro.
Josh: Yeah.
Will: It’s totally up to how you manage it. [Laughter]
Josh: Yeah. Or, it could be a black hole.
Will: It could be a back hole. Exactly.
[Laughter]
Josh: But you – if you believe in yourself, you can always…
Will: You can always do it. It’s just a matter of having the skills and knowing how to do it.
Josh: For sure and again, we’re going to come back and tie this in because…
Will: Right.
Josh: …what we’ve seen through the years, we’ve been doing this 10 years guys, right?
Will: Mm-hmm.
Josh: Literally have coached tens of thousands of people.
Will: Right.
Josh: In the cellphone repair business…
Will: Right.
Josh: …in addition to experience outside of the cellphone repair business and these things actually stay pretty true to know any business.
Will: For sure.
Josh: But this is specifically the…
Will: Absolutely.
Josh: …with the repair business. So we’re going to tie in and show you like how you can kind of know what stages you’re in.
Will: Exactly.
Josh: Right? Right now, obviously, we’re talking about the employee aspect of it.
Will: Yeah, yeah, yeah.
Josh: That’s an easy way to…
Will: We just want you to understand the stages. So, where 0, 1, this is number 2, right?
Josh: Right. And you might not be square in the one.
Will: Right. Exactly. Exactly.
Josh: So, I don’t want to be like, this is black and white.
Will: Exactly.
Josh: But it’s good to get a kind a marker where you’re at.
Will: Mm-hmm.
Josh: So you know where you’re at and you can figure out where you want to go.
Will: Right.
Josh: Or, you can plant your flag and say, “This is where I want to be.”
Will: And I think that’s important because different people here at this audio obviously and they come in at different places.
Josh: That’s right.
Will: So everybody, it’s important to understand that everybody doesn’t come in at the same place.
Josh: Right.
Will: Some people will come in at the ideation stage. Some people will come in at the wantrepreneur stage…
Josh: Right.
Will: …some people will come in at the new employer stage and some people will come in at the next stage which is…
Josh: Right, which is stage three…
Will: Right
Josh: …which is what we call a consistent business.
Will: Exactly.
Josh: So now you have four to 10 employees.
Will: Mm-hmm.
Josh: Right? You got a decent size team going.
Will: Right. [Laughter]
Josh: There are some challenges with that. But there are some exciting opportunities that come with that, right?
Will: Oh my goodness. Yes.
Josh: And there are some unique revenue levels that you start to hit.
Will: Yes
Josh: That allow you to do things that you couldn’t do when you were stage three and under.
Will: For sure.
Josh: But there are unique challenges that come up that prevent you from going to the next stage.
Will: Yeah.
Josh: Right? So we’re going to dive deeper into that.
Will: We’ll get into that.
Josh: And so you know guys, actually we’ve experienced all of these things throughout the years.
Will: For sure.
Josh: So, we’re not talking about anything that we haven’t personally experienced, personally seeing our students and clients and coach people to go through.
Will: Right.
Josh: This is – this is real. This is, you know, what we’ve experienced and what we see day in and day out.
Will: Yeah, and what we also understand with these stages guys, is you don’t necessarily have to evolve to every stage.
Josh: No.
Will: Right? It’s literally what your capabilities are, what your wants are, where you want to do. You might get to stage three and say, “Hey, I’m content.”
Josh: Right.
Will: It’s up to you, right? We’ll get into that S word which is Scalability.
Josh: Scalability.
Will: Exactly
Josh: Exactly. So, that’s kind of what the next driver is, right?
Will: Mm-hmm.
Josh: Because this next part, now when you get into stage four, this is actually a one double M business. So, now, your business is generating $1Million in revenue plus per year.
Will: Yes.
Josh: Right?
Will: Yes.
Josh: Now, let me tell you, no matter where you’re at, that is a very hard number for a lot of businesses to cross.
Will: Right.
Josh: Right? We’ve crossed that. We’ve been fortunate enough to cross that…
Will: Yes.
Josh: …in our businesses
Will: Yes, a lot of hard work. A lot of…
Josh: A lot, a lot of hard work and there is some unique challenge that come there but I say that because a lot of businesses do not make it. There’s literally, I want to say like out of – we should look at the stat actually.
Will: Right.
Josh: But I want to say it is like, under 10% of US businesses actually ever reached the $1Million mark.
Will: It’s very small.
Josh: Yeah, it is super small.
Will: It’s very small. It’s super small.
Josh: It is very challenging to do.
Will: Yes. Yes.
Josh: But once you figure it out…
Will: Yes.
Josh: …then you can start to dial it in and grow it.
Will: Right.
Josh: So at this stage now…
Will: Well, lets – to go back to your, your data…
Josh: Right.
Will: …with the number of people. So, just to give you guys a perception. At the Ideation stage, right, to give you a number or put a number to it, a 100 million, right? So, let’s just say a 100 million right, at the Ideation stage. At the one double M stage, 700,000.
Josh: Yes.
Will: Right? 700,000
Josh: Yes
Will: So there’s a big difference between 1005 million and 700,000. [Laughter]
Josh: So to be clear, to be clear on what you’re saying is that over a 100 million people or businesses at stage zero?
Will: Mm-hmm.
Josh: When you get to Stage four…
Will: Mm-hmm.
Josh: …there are literally only 700,000 businesses that ever really hit that mark.
Will: Exactly.
Josh: Right? Now, put this in perspective to go from stage three…
Will: Yes.
Josh: …at stage three, there’s 1.9 million…
Will: Yes.
Josh: 1.9 million
Will: Right.
Josh: So to go to stage four, 700,000.
Will: That’s that million threshold – that’s that threshold that we talk about.
Josh: That’s the revenue threshold.
Will: It’s that revenue threshold.
Josh: It’s a big marker.
Will: It’s a big marker.
Josh: It is an emotional and mental block.
Will: Yes.
Josh: And it is a challenge in many more ways than you think because it’s no just sales.
Will: Right.
Josh: Because now you’re managing four to 10 people. There are a lot of different problems. You’re dealing with personalities…
Will: Exactly.
Josh: …you’re dealing with breakdowns in your systems.
Will: Yeah.
Josh: Or the fact that you don’t have. There’s a lot and we’re going to come back to some of these things, right?
Will: That’s fires you’re putting out everyday. There are a lot of things to manage, basically.
Josh: Right.
Will: And what you have to be able to do, we’ll talk about it more. But in the scalability sense, you have to be able to teach people what you do. And you can’t do it all yourself.
Josh: Right.
Will: So, we’ll get deeper into with that, with that light.
Josh: Right. And to that point, our goal is to keep this show on time.
Will: [Laughter] Right.
Josh: So, what I…
Will: We’re 15 minutes in it.
Josh: Yeah. So, what I’ll tell is our goal is we already knew going into this…
Will: You’re not.
Josh: …that we probably weren’t be able to cover all of this in one episode.
Will: Right.
Josh: So, we’re going to crush it down into as few episodes as possible.
Will: Right.
Josh: But this is probably going to be a multi-episode series because the information is that important.
Will: Actually, I think we could do. Based on the time and based on what we’re doing, I think it’s good right now just to identify the…
Josh: Right. Yeah, obviously, which we’re going…
Will: …the stages. And then what we’ll do is we’ll come back in the following episodes and break each one down.
Josh: And break each one down and go a little deeper.
Will: Yeah.
Josh: Yeah, so…
Will: Absolutely.
Josh: I think that’s a good plan.
Will: Yeah.
Josh: Again, our goal is just to educate you.
Will: Yeah.
Josh: Hopefully, you can identify where you’re at, where you want to go.
Will: Mm-hmm.
Josh: Or say, “You know what? Let me plant my flag.”
Will: Right.
Josh: “This is where I am at, I’m good.”
Will: Right.
Josh: Get to the beach, cheer up and chill. Right?
Will: Exactly.
Josh: So, again stage four is the $1 Million mark.
Will: Big mark.
Josh: Right? That means that your business has crossed the $1 Million a year in revenue mark.
Will: Big marker.
Josh: Very big, if you crossed this so far…
Will: Congratulations!
Josh: Fantastic job!
Will: Yeah. You’ve done a great job.
Josh: Right? If you want to get there but you struggling, right? We’ve got some resources to help you get there.
Will: Exactly. Exactly.
Josh: So, the next stage, stage five.
Will: Yes.
Josh: This is a growth-focused business.
Will: Right.
Josh: Right? This is much different. You have to think about it, right? Like, when you start a business, sometimes you just to get – you just want replace your job.
Will: Mm-hmm.
Josh: To go from wanting to just replace my job…
Will: No.
Josh: …to going to a growth-focused business…
Will: Right.
Josh: …is significantly different.
Will: Right.
Josh: Because now, you have a mission, you have a vision…
Will: Mm-hmm.
Josh: …and you have core values that are going to help drive you beyond that.
Will: Yes.
Josh: Because at this stage, right now, you’ve got 25 to a hundred people plus.
Will: That’s a lot of people.
Josh: That’s a lot of people. You have a unique set of challenges that you’ve never experienced in smaller stages of this business.
Will: Right.
Josh: That really take unique skills sets to get passed.
Will: Right.
Josh: In fact, when you see a lot of start-up companies, you know, it’s funny because, obviously we talked about how sexy entrepreneurial is.
Will: [Laughter] Right.
Josh: Right?
Will: Right.
Josh: And we promote entrepreneurialism. I believe in it.
Will: For sure.
Josh: And I’m not trying to degrade it any way.
Will: Yeah. Yeah, I think it’s great.
Josh: Right? But, I like to put the real spin on what it is when you choose this hard life.
Will: Right.
Josh: This is a hard life, man.
Will: Yeah.
Josh: Like you are sacrificing a lot of time and energy and you know.
Will: It’s a grind.
Josh: Yeah, it literally is, right?
Will: It’s a grind.
Josh: But you’re doing it, usually because you have a big focus on making a change somewhere.
Will: Right.
Josh: Right?
Will: Yeah.
Josh: So, what’s interesting, what I was going to mention is when you see growth-focused companies that start to cross those revenue thresholds…
Will: Yes.
Josh: …like, let’s look at you know any tech company in the last five to 10 years.
Will: Oh, what they…
Josh: What happens especially if you got outside investors that come in?
Will: Yeah.
Josh: Right? Because you might be looking for outside investment at this point. Typically, what they want to do? Get rid of leadership.
Will: Yeah.
Josh: Let’s get rid of leadership, put our own leadership in. Why is that? Because the leadership currently that grew the business to that stage does not have the skills to grow it beyond that.
Will: Right.
Josh: Right?
Will: Right.
Josh: And most CEOs and founders of businesses…
Will: Mm-hmm.
Josh: …don’s – and that’s why you see CEOs from outsiders brought in to companies because those guys don’t have the skills necessary…
Will: …to take it to the next level.
Josh: …to take it to the next level.
Will: Yeah.
Josh: Right? Around the people and the systems, and the values…
Will: Yeah.
Josh: … and the visions and all those things that are necessary.
Will: Those are very, very specific skills that are needed to take it to that level, right? It doesn’t necessarily – it’s not necessarily the skills to get it there but it’s the skills that take it to the next level. And a lot of times that is a differentiation. You don’t have to be the same person. I see it in sports. We see it in sports all the time. Like, the guy that actually gets the team to where it needs to be is not necessarily the guy that takes it to the next level, right.
Josh: That’s right.
Will: To get it where it needs to get over that hump to with the championship.
Josh: That’s right.
Will: And so, a lot of times, there’s a different set of skill sets, there’s a different set of experience, it’s just – it just is what it is, right?
Josh: That’s right.
Will: So, yes, I agree with you 100%.
Josh: Absolutely, man. And to kind of tie it in, I don’t want to go too deep in to it, because I know we’re going to circle back.
Will: Right, we’re going to circle back.
Josh: But obviously, we mentioned that stage four was the mil – $1Million threshold.
Will: Right.
Josh: So now, you’re well beyond the $1Million, right? You’re up to – this is 3 to 10 Million, right?
Will: [Laughter] Yes. Yes.
Josh: And obviously, their stage is beyond 10?
Will: Yes. Yes.
Josh: But, to put it in a perspective like you mentioned…
Will: Yeah.
Josh: So, if 700,000 businesses make it…
Will: To 1Million.
Josh: …into stage four which is 1Million.
Will: Which is 1Million.
Josh: 300,000 make it to Stage 5.
Will: So, we just knocked off 400,000.
Josh: Yes.
Will: Right? Is that right?
Josh: That’s right.
Will: Did I get my math right?
Josh: Yes, you did.
Will: Yeah, OK.
Josh: Yes, you did.
Will: Yeah. That’s a big decrease.
Josh: Yes, it is.
Will: But it shows how significant the increase…
Josh: That’s right.
Will: …is, right?
Josh: Exactly.
Will: The ability to increase because you have that decrease. Everybody doesn’t make it to this – to this level, to this stage.
Josh: That’s right.
Will: Right? [Laughter]
Josh: Yeah. It’s a very tough stage to go to.
Will: Right.
Josh: And not everybody has to go there. Yeah.
Will: You don’t have to, yeah. It’s not – yeah.
Josh: Again, I mean it – this is your own goals, you know…
Will: To be successful, I think it’s important to identify what success is.
Josh: For you.
Will: And success is it’s important to identify what success is for you and that’s not necessarily every stage, right? It could be – success could be Stage 2 for you. Actually, success could be Stage 1 for you.
Josh: Right.
Will: Right? Having a side gig…
Josh: Right.
Will: …that pays you know extra bill
Josh: That give me you know what, but this other job I got…
Will: Exactly.
Josh: …it covers my medical.
Will: Exactly.
Josh: And I got my benefits.
Will: That can be success, right?
Josh: Yeah.
Will: We’re just identifying the numbers.
Josh: Yeah. There’s no judgment, man. Every – this is unique to everybody.
Will: Exactly.
Josh: Right? Your situation, you know, your mileage may vary as we use to say, right?
Will: But it’s important to know.
Josh: It is.
Will: Just in case you want to aspire to the next stage, right?
Josh: Right. Or just to know where you are, right?
Will: Right.
Josh: And again, we’re going to come back and we’re going to start talking about what’s needed to move, like how to identify really what level you’re at.
Will: Right.
Josh: And how you need to – the challenges that you might see at each stage, and how you can solve some of those challenges to move to the next stage if you want to.
Will: See?
Josh: Or, maybe how can you even start to systemize things so you just live life on whose controlling the stage that you’re in.
Will: Exactly. So let’s do this, Josh. Let’s go ahead and kind of re– go through.
Josh: Yeah.
Will: Once again, what the stages were.
Josh: OK.
Will: Right? Kind of do a…
Josh: So again, we got six stages.
Will: Six stages.
Josh: Five.
Will: Right.
Josh: Zero to five, right?
Will: Right.
Josh: So, zero is ideation.
Will: Right.
Josh: Right? One, wantrepreneur where it’s a side gig or you’re self-employed.
Will: Right.
Josh: Stage two, it means that you’re a new employer.
Will: Right.
Josh: Stage three is a very consistent business.
Will: Right.
Josh: Stage four is a $1Million plus business.
Will: Mm-hmm.
Josh: And stage five is a growth-focused business.
Will: So, those are the six stages.
Josh: Those are technically the six but it – we’ll call them five stages of business.
Will: Yeah.
Josh: Because Stage zero still, it really isn’t a business idea.
Will: Right.
Josh: Right?
Will: Yeah.
Josh: So, that’s really the five stage of business growth…
Will: Right.
Josh: …for repair businesses.
Will: Right.
Josh: And I’m excited to dive in deeper and really…
Will: [Laughter] Yeah.
Josh: …kind of like tear this apart.
Will: Me too, dissect it.
Josh: And share what we’ve – what we’ve seen throughout the years, right?
Will: Yeah, I can’t wait to dive into it. And I think it’s good. Again, what I think you guys should take from this, at least this episode, if you’re starting here, is really again, identifying where you are in these stages, right? Are you in the ideation stage? Are you in the wantrepreneur stage? Are you in the employer stage? Like which stage are you in based on the characteristics and the settings that we’ve set up in giving you guys. Identify what that is. And as we continue in the future episodes to go deeper in each one of these characteristics or each one of these stages really dive in, get your pen, get your paper, like really do your homework, really take from us our experience. We’re going to do deep dives, right?
Josh: Right.
Will: We’re going to really get deep. We’re going to dive deep. We’re going to help you all guys understand what the challenges are for this stage. We’re going to help you guys understand how to get to the next stage. We might give you information how to jump the stage, right? And… [Laughter]
Josh: Maybe. Yeah, hopefully, hopefully.
Will: Right?
Josh: I mean I think you got to go through every stage. It’s kind of like learning how to walk.
Will: I think – I think you kind of do… You kind of do, yeah.
Josh: You don’t just topple. You know what I mean?
Will: Exactly.
Josh: But you can get there more quick.
Will: Yeah, if you can really understand. And maybe you’ve done something in your life where you’ve already experienced another stage and you’re just you know at – and this particular example you’re in this stage so, maybe to help you get to another stage faster. But I think it’s really important to do the – do the homework, right? Do the homework. Understand, you know take notes, right?
Josh: Mm-hmm.
Will: And understand where you are so you can understand where you need to go and where you don’t want to go. That’s very big. I think it’s important to understand because we’re going to be talking about that. How not to go, necessarily, go the wrong direction and what to focus on to move in the right direction.
Josh: Right.
Will: So, we’re going to be doing that in future episodes, right?
Josh: Yeah, in the next episode.
Will: Yeah
Josh: Yeah, we’re going to dive right in.
Will: Yeah.
Josh: We’re going to dive right in to the next stages.
Will: So, what can they expect in the next episode? Are we going to start ideation?
Josh: We might actually combine depending on how deep we go.
Will: Yeah.
Josh: We might combine ideation and stage one.
Will: OK
Josh: So, it just depends.
Will: I think – yeah, I think that’s a good idea.
Josh: Right? I think it depends but I like it because it all kind a – it’s the beginning.
Will: Exactly.
Josh: So I think it just is nice to just bottle it all up and show like the challenges and how you can quickly move through each one of them.
Will: For sure, 100%.
Josh: Right?
Will: Yeah, I like that, I like that. I like that one. I’d like that a lot. I’m excited. Actually, I’m excited.
Josh: Yeah, I am too.
Will: I am too,
Josh: I am too, man. We haven’t talked about this in a while.
Will: Yeah.
Josh: Again, it’s funny because we had taught this three years ago.
Will: Right.
Josh: But it was like a 20-minute segment.
Will: Yes.
Josh: Basically, what we just did.
Will: Yes.
Josh: Right?
Will: Yes.
Josh: We didn’t go deeper.
Will: Right.
Josh: To really give some tools and resources…
Will: Exactly.
Josh: …and just mindset.
Will: Exactly
Josh: About how to identify where you are, right, get your emotions aligned…
Will: Yeah.
Josh: …and get your expectations aligned about what you need to do to move to the next stage, if that’s what you want to do.
Will: Exactly.
Josh: What I also say is if you are just the technician working in the business.
Will: Mm-hmm.
Josh: This is still a valuable information because the thing with the repair business…
Will: Mm-hmm.
Josh: … is, most of the repair businesses are still early stage businesses.
Will: For sure, most of them.
Josh: Right?
Will: I would say 70 or 80%.
Josh: Yeah, majority of they. Yeah. So, why I would say even if you’re just the technician, right?
Will: Right.
Josh: And you feel like, “Well, it’s not my business. So, yeah, I don’t really care about this topic.” But what I’ll tell you is I think that if you can learn this and embrace to learn this information and you can go back and share it with your manager or your store owner you know, whoever it is, right?
Will: Right.
Josh: You can help to influence and mold the growth of that company…
Will: Right.
Josh: …which adds value for yourself and for your organization.
Will: For sure, man.
Josh: I think it’s important man, never ever put the blinders on to learning.
Will: Right. Yeah.
Josh: Right? This is an important topic. If you’re in the repair business, I promise you that most repair businesses are actually very early stage businesses.
Will: Yeah.
Josh: There’s a lot of growth that can happen. And you can be a pivotal component of really achieving that next level of growth for your organization.
Will: Exactly, there’s a lot of opportunity. And that kind of a piggyback on what Josh is saying, anytime things are really early but very high in demand, that means there’s a lot of opportunity, right? And so, what we see and what he is talking about is there’s a lot of opportunity in regards to the need for this type of understanding.
Josh: Mm-hmm.
Will: Because once you start to understand, what you’ll be able to do is to start to identify where that understanding fits. And we’ve seen it. We’ve had people who worked for us in the past, move on to do great, exceptional things about what we’ve taught them…
Josh: That’s right.
Will: Right? And it’s based on understanding and information. And then what they do is they take that understanding and they take that information and they capitalize on opportunity to move into spots that they see that information is very valuable. And so, we’ve had that happen quite a few times…
Josh: Yeah.
Will: …with people we’ve actually trained. We’ve seen them go off and do wonderful things.
Josh: Fantastic things, yeah.
Will: Fantastic things. So, it’s important. That’s my point. My point is simply is like understanding, regardless of where you are, whether you’re a technician like Josh is saying, whether you’re a technician. No matter where you are in this business, if you can really understand a full understanding of the full evolution, which is really, what we’re talking about. And we’re talking about stages of business. We are talking about the evolution of business. Right? And that goes, from obviously ideation to growth-focus, right?
Josh: Yeah.
Will: And everything in between.
Josh: Right.
Will: And when you focus on that, right? And you understand that, then you understand, OK, what do I know? What don’t I know? Where do I need to go? And how can I fit in to somebody else’s plan potentially?
Josh: Right. How can I add value?
Will: To add value.
Josh: At the end of the day, right?
Will: Yes.
Josh: You should always be asking yourself. How can I add value?
Will: Exactly. It doesn’t necessarily have to be you moving the needle, it can be you supporting…
Josh: Exactly.
Will: …somebody else to help move the needle.
Josh: Exactly. It can be you sharing an idea, right?
Will: Exactly.
Josh: Because the other thing in this business that we’ve seen throughout the years is that not everybody in this business is business savvy.
Will: Exactly.
Josh: Right?
Will: Exactly.
Josh: A lot of times you have people in this business because it was an opportunity but they aren’t business savvy.
Will: Right.
Josh: So, they don’t actually know everything.
Will: Yeah.
Josh: And I’m not – by the way, I’m not professing to know everything.
Will: Right. Exactly.
Josh: I’m a continuous student, like we’re saying all the time.
Will: Well, we do that too. We find – it’s like Josh, he used the – he used the analogy once in a previous show we had [0:27:59.9] [Indiscernible] and a lot of times it takes finding the hand, or finding the other hand or finding the foot.
Josh: Right.
Will: Or, finding the head, right, that fits into your plan.
Josh: Yeah. Business is the team sport.
Will: Exactly.
Josh: It’s a team sport, man. And it really is.
Will: It’s definitely a team sport. And you can’t do it all yourself. [Laughter]
Josh: No, you cannot.
Will: You cannot do it, especially when we talk about number five.
Josh: Right.
Will: Even number four. Even number three, right? Even number two.
Josh: Right.
Will: Right? Because everything that is outside of yourself, in terms of needing someone else to support it, requires you to have the ability to educate, teach, share, motivate, goals, values.
Josh: Exactly
Will: It’s all of that kind of stuff. [Laughter]
Josh: It’s a lot. It’s a lot. Yeah, it’s a lot. But that’s…
Will: [Laughter] But people – people don’t put respect on that.
Josh: Yeah. You better put some respect on that.
Will: You better put some respect on that.
Josh: But that’s the exciting part of it.
Will: Right. Exactly.
Josh: That’s what it makes it fun. That’s part of the journey.
Will: Exactly.
Josh: That’s part of your personal development. That’s part of your growth.
Will: Right.
Josh: Right? That’s why we choose this life of entrepreneurialism is to change the world.
Will: Exactly.
Josh: And we change the world through people.
Will: Through people. That’s the most important, most important…
Josh: Boom! I’m going to leave it at that. I’m going to just drop the mic and walk out. [Laughter]
Will: [Laughter] People. Ping! [0:29:02.1] [Indiscernible] Yeah, people, people.
Josh: Right?
Will: Definitely people. People, people any – and we often say and we said this before, anything worth doing, anything that’s of service worth it outside of yourself, you know what I’m saying is, how does it go. I think its significance – what’s the thing…
Josh: Oh, you lost me. I don’t know. [Laughter]
Will: Yeah, it’s significant.
Josh: Anything of significance. Yeah.
Will: Anything of significance, right? And so, AOS, anything of significance requires – that requires people outside of yourself, right, you know serving something outside of yourself requires people to help you…
Josh: That’s true.
Will: …assist – people assisting you in reaching that goal, right?
Josh: Yeah. That’s true.
Will: And I’d say I know it took me a minute to get that out but…
Josh: Yeah, you stumbled a moment through that one.
Will: But…
Josh: It’s the truth though. Yeah.
Will: …you know it’s the truth. You know what I mean? Anything of significance requires this and people. Right? Or people and people helping you fulfil that significance. So you can’t do it yourself.
Josh: Yeah Well again, if you look at any business.
Will: Yeah.
Josh: And you look at the stages that we just outlined as we dive deeper into them…
Will: Right.
Josh: …what you’ll notice, the key factor that’s attached to the revenue growth…
Will: Right.
Josh: …is the people growth.
Will: It is.
Josh: It doesn’t happen. They don’t stay at three people and hit 100 Million.
Will: No.
Josh: It didn’t happen.
Will: [Laughter] It’s not even possible, I don’t think.
Josh: I mean some – maybe certain business.
Will: Well, like you said, software maybe.
Josh: Yeah, maybe.
Will: Maybe? Even then I don’t know if…
Josh: I mean you might need more than three.
Will: Yeah.
Josh: Maybe, I don’t know.
Will: I mean…
Josh: Yeah. I’m not into software business like that so…
Will: A couple of software business is so…
Josh: But even then, that’s three, that’s not one.
[Laughter]
Will: Exactly. So, you still got to – still got to play your part, right?
Josh: Exactly.
Will: So yeah, what we can do at this point, right, and I think that we hit that pretty good. So, you got to understand, just to repeat one more time, five or six stages of business, right? Ideation.
Josh: Yeah. Ideation.
Will: What’s the next one, Josh?
Josh: Wantrepreneur?
Will: Wantrepreneur. New employer.
Josh: New Employer
Will: Consistent business.
Josh: Yeah.
Will: One double M business
Josh: Yeah, 1Million plus.
Will: 1Million plus and then growth-focus.
Josh: And then a growth-focused business.
Will: So, identify where you are, tune it to future episodes, right? And understand that we’re going to break this down and get more specific and hope you guys understand exactly how to move, navigate, what problems you may encounter in each one of these and you know that’s pretty much it.
Josh: Right.
Will: Right?
Josh: We leave time to answer a question today? Because we got a question I think that, that could be tied into this.
Will: Let’s do it. Let’s do it.
Josh: Right. So…
Will: We got – we’re at 30 minutes, so let’s do it.
Josh: Yeah, yeah. So, we’ll try to make this one brief, right? Because…
Will: Yes, let’s do it.
Josh: …obviously again, in case you don’t know, go on our website CellularRepairSchool.com.
Will: Yes.
Josh: Click on the Blog.
Will: Right.
Josh: Go down and submit your questions. This is a Q & A Show.
Will: Yes.
Josh: So we get our topics to talk about to you through the things we get through to your feedback points.
Will: Exactly.
Josh: And we select the question every show…
Will: Yup.
Josh: …that we will highlight and dive deep into. So, if you have a good question that we think applies to a lot of people outside of just your specifics…
Will: CellularRepairSchool.com
Josh: Right? We will answer that question. So, tonight’s question comes from, hopefully, I’m pronouncing this right is Kervin? Kervin Ferrera and he asks…
Will: Mr. Ferrera.
Josh: He asks – all right it might be Mrs. we don’t know.
Will: [Laughter] Or, Mr. Ferrera, OK.
Josh: What is the acceptable profit margin for a cellphone repair business?
Will: Acceptable profit margin for a cellphone repair business.
Josh: So…
Will: That’s across the board, right? That’s an across the board question.
Josh: Yeah.
Will: So that’s not per – so we’re not talking per repair. We’re talking…
Josh: That’s – what’s the acceptable profit margin for a cellphone repair business?
Will: OK.
Josh: So, what I would say, it actually goes right into the five stages of business, right?
Will: Right.
Josh: Because, part of what we need to do…
Will: Mm-hmm.
Josh: Right? Put a pin on this.
Will: Right.
Josh: What we need to do is we need to really dive into what is profit.
Will: Right.
Josh: Which we’ve done before and again, that is in – I think we teach that in the Seven Stages in Cellphones, right?
Will: Seven stages, oh did it.
Will: …of success. Yes. Oh, can I get that again? Seven Stages?
Josh: Cellphone – you just go right to CellularRepairSchool.com and it’s on our website, you can get the Seven Stages. I think we sell it for $7.
Will: And we talked about that.
Josh: It’s a killer course.
Will: Yes.
Josh: We go in, it’s a mini course.
Will: Yes.
Josh: But we dive into all of this sort of stuff.
Will: Which is part of Ideation stage.
Josh: That’s right. Yes. So, if you’re in that early stage and you’re not sure you want to do this.
Will: Right
Josh: That’s why we have it there for seven bucks.
Will: Exactly.
Josh: Right? Cheap, right? Low commitment. You just got to put some your time in, but it’s going to answer all of these types of question for you.
Will: Right.
Josh: But, to answer your question, Kervin, what I would say is, man, that depends. I don’t know. [Laughter] Right? And I hate to answer questions like that. Right?
Will: It was… yeah.
Josh: Because, what I’ve seen throughout the years…
Will: Yes
Josh: …in every business is that yes, there are acceptable profit margins in certain industries.
Will: Mm-hmm.
Josh: But at the same time, every business is built on a different profit margin of operation.
Will: Right.
Josh: Some businesses can run on very thin margins.
Will: Mm-hmm.
Josh: Some businesses because of whatever value they add to their customer base…
Will: Mm-hmm
Josh: …need much fatter margins to operate.
Will: Right.
Josh: So, I’m not going to give you this, I mean I am going to give this generic answer, but at the same time I’ll tell you that it does vary based on what it is that you are trying to accomplish.
Will: Right.
Josh: So, one of the things that we teach in the seven step repair – successful repair…
Will: Right.
Josh: …is how to identify what your goals are.
Will: Mm-hmm.
Josh: Because it’s one thing to say, “Well, I’m making 50% profit margin.”
Will: Right.
Josh: Right?
Will: Yeah.
Josh: And then you can have someone else says like, “I’m taking 10% profit margins.” But, that’s not the end all be all.
Will: Right.
Josh: Because your 50% might take you 100 hours to accomplish.
Will: Yes.
Josh: While his 10% might take him 30 minutes.
Will: Yeah.
Josh: So, which one is the sexier business model?
Will: Yeah.
Josh: Right?
Will: There’s the word for that. I just can’t remember what it is, right? You know, when you’re putting a perspective by and I think it’s understanding that you can’t just – I think the question is it’s a very specific question but it doesn’t take in a lot of variables…
Josh: Right.
And honestly, at the end of the day, the variables come down to you.
Will: Yes.
Josh: Right? And they come down to you and what it is you’re trying to achieve. So, what I would do to help answer this question and so you know I’m not trying to be political. I’m really trying to answer your question but I want to define what profit margin means to me.
Will: Right. What is…
Josh: Right? Because…
Will: Let me ask the question. Mr. Josh…
Josh: Yes, Sir.
Will: What does profit margin mean to you?
[Laughter]
Will: Everything. It’s the only thing.
[Laughter]
Josh: Hey, you want to know the answer? Ask my wife what it means. [Laughter] She knows.
[Laughter]
Will: She knows.
Josh: For real.
Will: Yes.
Josh: At the end of the day, right?
Will: Mm-hmm
Josh: This is not an accounting course, but there are two things that I look at.
Will: Right.
Josh: When we talk about profit margin. There’s gross margin.
Will: Mm-hmm.
Josh: And then there’s net profit margin, right?
Will: Right.
Josh: So, when we talk about gross margin, you could think of that as like when I sell an LCD screen, right?
Will: Mm-hmm.
Josh: And this ties into the stages deeply. When I sell an LCD screen repair, and I charge 100 bucks, right? And I’m just using numbers, right?
Will: Right.
Josh: This might not be your actual cost, right? But let’s say I charge 100 bucks for an LCD repair.
Will: Yes.
Josh: And the screen cost me 30 bucks.
Will: Yes
Josh: I made $70 gross margin.
Will: Right.
Josh: If it’s me doing the repair…
Will: Which is ridiculous.
Josh: Right? Now, if I’m paying a technician $20 an hour to do that repair…
Will: Yes
Josh: …and it took him 30 minutes…
Will: Yes
Josh: …right? Well now, my cost of goods sold is $30 of the LCD…
Will: Mm-hmm.
Josh: …plus 30 minutes of my $20 an hour technician time…
Will: Right.
Josh: …which is an extra $10 and I’m into this for $40.
Will: Exactly.
Josh: So now, I’m making $60 gross margin. That means just the cost of the good. So, it’s the service, or the repair or the product minus the cost of the good…
Will: Right.
Josh: …is your gross margin.
Will: Right.
Josh: Net Profit margins however, are completely different, and will be different between everybody’s businesses.
Will: Mm-hmm.
Josh: Because that ties into what you are in.
Will: Yeah.
Josh: How much do you need to pay your employees?
Will: Yeah, absolutely.
Josh: Right? How much is the cost for your insurance, right? What are your utility bills?
Will: Yeah, operational cost.
Josh: Yeah, these are all of the things that are unique to your business and your geographical location and your negotiation abilities, and all these different things, right?
Will: Right.
Josh: So, one of the things I got taught years ago by my mentor…
Will: Mm-hmm
Josh: Right? …is this golden rule of net profits. Right? And this is going to – it’s funny because it sounds silly when you listen to it.
Will: Right
Josh: Because the margin sounds small.
Will: Right.
Josh: But, I’m going to come back and put in perspective for you.
Will: OK.
Josh: Right? So, if your business is making 5% net profit margins.
Will: Mm-hmm.
Josh: You are on life support.
Will: Right.
Josh: Right?
Will: Yes.
Josh: Your business is on life support and you need to figure some things out because your time is limited.
Will: Right.
Josh: Right? If you are making 10% net profit margins, you have healthy business with opportunity to grow.
Will: Right.
Josh: Right? Man, we should a pin and discuss because we can go way deeper on this.
Will: [Laughter] We can go – yeah, yeah.
Josh: There’s a lot on this one. There’s – because I can’t even explain all of the things that play into this.
Will: Right.
Josh: And why this is so important.
Will: Yeah, we’ll put a pin on it.
Josh: Right?
Will: We’ll come back to it.
Josh: Let’s put a pin in this one. This is an important one, right?
Will: Yeah. We’ll come back to it. Yeah.
Josh: If you are making 15% or more net profit margin…
Will: Yeah.
Josh: Take it a while you can.
Will: Right.
Josh: Because it’s not going to be long before your competitors come in and shrink that margin down.
Will: Yeah, it’s a gold rush, you’re doing that.
Josh: Right? Take it while you can.
Will: Yeah.
Josh: So, you hear business opportunities and make 20%, 30%, 40% net profit.
Will: Yeah.
Josh: Man, get it while you can.
Will: Right.
Josh: Get the bags out, back the truck up, load it up.
Will: Right.
Josh: Right? Because there will be a day when your margins shrink.
Will: Yes.
Josh: That’s Economics 101.
Will: For sure.
Josh: It happens unless you have some sort of monopoly…
Will: Yeah.
Josh: …and if you do, you know…
Will: Yeah.
Josh: …hat off to you.
Will: Evolution of business, evolution of technology, evolution of competition.
Josh: Right.
Will: Right. All of these things drive your profit margin down.
Josh: Exactly. So, but you have…
Will: But you have – what you have to be is very creative in under – this is where you know – and you keep your thoughts, I don’t want you to lose your thought.
Josh: Yeah, yeah.
Will: But this is where you have to be very, explore – you have to explore. You have to be creative. You have to always be thinking about how we can sustain.
Josh: Analyze. You got to be analytical.
Will: Analyze, yeah you got to be analytical. What works, what doesn’t works, right? This is what we’ve used to always teach in the business portion of our classes…
Josh: Yeah.
Will: …and our structure which you can find at CellularRepairSchool.com.
Josh: That’s right.
Will: But we teach business also, so – and what we always taught was how to explore, always be questioning, looking, reviewing, analyzing, what’s working, what’s not working, customer interaction, what the customers are actually asking for.
Josh: Upsell opportunities, right?
Will: Upsell opportunities, all of these things.
Josh: How to squeeze more margin at every opportunity
Will: Exactly. You have to, because what happens, what we see so often is people get comfortable in making at 15%.
Josh: Right.
Will: They get comfortable in making it at 20%.
Josh: Right. And I think they base their home model on that.
And then if it shrinks back – if it shrinks back to 12% or 13% or 11%, guess what?
Will: Exactly.
Josh: They have a harder time surviving…
Will: Exactly.
Josh: …because their whole model is built on needing that 15 points.
Will: Exactly.
Josh: Right?
Will: And they’ve set it up that way. They got into the point where they have to get that because of how they actually operate.
Josh: Right. And again, and again this is net profit…
Will: Yes.
Josh: …so there are a lot of variabilities between the gross margin and the net profit.
Will: Yes. And the longer you stay away from being that creative and analytical mind, in terms of analyzing what’s going on in your business, the harder it is to get back to it.
Josh: Mm-hmm.
Will: So, what I’ll suggest, and I’m sure Josh follow me on this is you should always, always, like take a day, take a two days, take a week within that month, right? And schedule out that time to actually reflect…
Josh: Yup.
Will: Right?
Josh: You need to review
Will: And analyze and review…
Josh: You need to look at your numbers out.
Will: …and look at your numbers. This is where a lot of people get in trouble. They don’t really go by the numbers and they don’t really analyze the numbers. And they don’t really understand how their business is – it’s really the health, the health of your business. It’s in the numbers.
Josh: Right.
Will: It’s in the details, right? But we always talk about the details, how important the details are. And the details are in the numbers.
Josh: Right.
Will: And what you need to do is you need to be analyzing, reflecting, going back…
Josh: Again, I’m going to tell you why this is such a good topic.
Will: Yes.
Josh: We need to put a pin in, it’s because there are still, right, when you look at net profit…
Will: Right.
Josh: …and things like that. That’s we call a lagging indicator.
Will: Right.
Josh: That’s telling you what happened in the past.
Will: Exactly.
Josh: Right? But there are certain things that you can do on the frontend what you call leading indicators.
Will: Right.
Josh: Right? That can already predetermine what you’re lagging indicators look like.
Will: Right.
Josh: Right? Which would be around marketing sales, lead acquisition, you know…
Will: Right.
Josh: …different things like that.
Will: It’s just – you lost about half of how important it’s like not – no disrespect, no disrespect to any of you guys, right? But when you start talking about that kind of stuff, you lose people, you lose…
Josh: Yeah, yeah. I know. I just want to put that out though because that’s – there’s still a difference. There’s a difference on the way we look at it.
Will: It is a difference. It is a difference. And we’re going to you guys down that rubble. We’re going to do a slow control and so you understand exactly what we’re talking about, right?
Josh: Right. And if you want to know, if you don’t want to know we ain’t going to cover.
Will: Yeah. Yeah, exactly.
Josh: Yeah, if you want to talk about tiny bots, we’ll talk about tiny bots.
[Laughter]
Will: Exactly.
Josh: Right?
Will: Yeah.
Josh: So, hopefully, Kervin, that helps, right?
Will: Hopefully, that helped you. But – 42 minutes, yeah.
Josh: But again, let me – let me reiterate. Yeah, let me reiterate. Gross margin…
Will: Right.
Josh: …versus net margin.
Will: Right.
Josh: When we look at the gross margin, then this is your repair service and your cost to goods which should be labor and the cost of the parts.
Will: Right.
Josh: Right? So, throughout the years what I’ve seen a healthy margin always be?
Will: Yeah.
Josh: It’s about 30%.
Will: Right.
Josh: You have some repairs that are way better?
Will: Right.
Josh: Some that aren’t even close.
Will: Right.
Josh: But when you average them all out.
Will: Yeah.
Josh: Right? 30% is always been a pretty good number and we’ll dive deeper into why that number works…
Will: Yeah
Josh: Right? And again, your mileage may vary.
Will: Yes.
Josh: But if you can make number work…
Will: Yes.
Josh: …or better?
Will: Yeah. You’re doing good.
Josh: You’re doing really well, man.
Will: You’re doing great.
Josh: You’re doing really well.
Will: Just keep going in that direction.
Josh: Yeah.
Will: And we’re going to talk about direction as we get deeper into the stages of business in future episodes. So…
Josh: Yeah, man.
Will: I think that…
Josh: Yeah, that was fun.
Will: Yeah, that was fun.
Josh: Yeah
Will: Those are going, bro. I love this. I love getting into the stages of business and business and – business acumen, because this is where we really, we’ve had the experience.
Josh: It’s my passion too you know so…
Will: Yeah. Yeah.
Josh: Anytime you guys ask me question about my passion, you’re going to see it’s hard – it’s going to be hard to stay on this time limit right here.
Will: It is! It is. It’s already 43 minutes man and it feels like it has been five, 10 minutes. And so, how it is when you’re having fun, right? And so…
Josh: On that note…
Will: What are we going to do?
Josh: Now, we out.
Will: Let’s do it, let’s do it. So, you guys check back in again, what we always say check us out on our social media, right?
Josh: Yup. You know, find us on Instagram, find us on Facebook, find us on YouTube.
Will:Ask Will and Josh.
Josh: CellularRrpairSchool.com #AskWillAndJosh
Will & Josh: #RepairRight.
Will: That’s the highlight of it.
Josh: And hopefully, we left you better than we found you.
Will: All right. Let’s do it. We’ll see you guys on the next one.
Josh: Until next time.
Will: This is William Agnew.
Josh: Josh Gray.
Will: Signing off.
Josh: Peace.
Will:Ask Will And Josh, we’ll see you guys next time. Peace.
[End of transcript]
