Episode 011: 5 Stages of Repair Business Growth – Part 3 – Cellular Repair School

Episode 011: 5 Stages of Repair Business Growth – Part 3

ABOUT THIS EPISODE

In this episode Will and Josh talk about Stage 2: Ideation of the 5 unique stages of cell phone repair business growth.  They also answer an audience question regarding "How do I add additional items to sell if I'm not working with much money?"

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 some strategies around how to add additional items to sell for upsells and more.

DOWNLOAD 5 STAGES INFOGRAPHIC:

AskWill+Josh 011 EPISODE TRANSCRIPT:


Josh: Episode number 11.

Will: Yes sir.

Josh: Here we go. Yeah, it's fun diving into this topic we've been covering. So, what we're going to do is a continuation today of some of the topics we've been talking about over the last couple of episodes.

Will: Yes.

Josh: And in particular this is the stages of repair business growth.

Will: Absolutely.

Josh: Right? So, we'll do kind of a quick recap of what we've talked about in the last episodes and then we'll dive in deeper into this topic and then again this is the Ask Will and Josh Show, so we're going to answer an audience, member's question as well.

Will: Exactly.

Josh: So remember if you're out there listening and you enjoy this, don't hesitate to leave a question, go on the website, right, click the big orange button that says submit your question, and if we select it there's a special prize for you that we do in the back end for you there, but it's important because if there's a question that we think is relevant to the rest of our repair community we definitely want to address that and help you and help the rest of the community as well. So, don't be shy ask, ask your questions.

Will: Exactly. I hope you guys have been enjoying the series because this is part three of the series that we've been discussing which is the stages of business. So today what we're going to be talking about Josh?

Josh: Today is stage 2. So, we'll do a real cap of, a real quick

Will: Stage 2, I say 2 out of 3.

Josh: Yeah. Well, because technically it kind of is, right? So we'll do a recap. So we call it the 5 stages of repair business success, but we created the stage 0 as well, so we'll start there real quick. Stage 0 is ideation because throughout the years and up until today we know there's a lot of people who are in other industries working a job somewhere that might have stumbled across this as an idea of a business to start.

Will: Right.

Josh: So, we call it the ideation stage because its an idea right so you got to flush out that idea to make sure it makes sense and that it's something that you really want to do.

Will: Exactly.

Josh: So we call that stage 0.

Will: Right, which is how people actually get started, right?

Josh: Yeah, of course. No matter what business you ever start, you always start with ideation, right? It's an idea and then you got to flsh it out to see if it makes sense. You run numbers, you run whatever it is that you're trying to do whether it's software, whatever it is, right? You prove it out, you got to prove out the model and see if it even makes sense for you to commit to one of the next stages that we get into. So, the first official stage is what we call the onetrepreneur stage or the solopreneur stage.

Will: Right.

Josh: And there are two distinct sides to this and one of the things that's important that we cover is each stage kind of identifies itself through revenue as well as resources that are available to you as far as people goes and kind of what your business looks like, so that's whether its number of employees, number of people on your team, number of locations, whatever that might be, there are some unique things that we see that accompany all these businesses that we've developed ourselves throughout the years, helped our students grow.

Will: Right.

Josh: Coach people through, right? And that's how these 5 stages came about and we've seen this actually not just in the repair business, but in many other industries as well.

Will: Right.

Josh: So stage 1 we broke that into two distinct stages that we've seen in our space throughout the years, because really it’s kind of 0 to 10 thousand dollars per month cover stage 1. But inside of that 0 to 4 thousand usually is kind of a side gig sort of individual, right?

Will: Yeah. Kind of a side hustle. Yes, it's kind of a side hustle.

Josh: That's the right terminology to use, that's big right now, right?

Will: Right, the hustle. side hustle.

Josh: Yeah, the side hustle, get yourself a side hustle.

Will: What is great about the side hustle is I think why a lot of people are attracted to side hustle is it's extra income, right? So, it's actually cash flow, right? Which is probably the main reason why people are in it obviously, but also the flexibility.

Josh: That's it. Yeah, that's number two.

Will: What the side hustle allows you to do is have flexibility. You can work when you want to work.

Josh: Right.

Will: And how great is that.

Josh: And that is sexy, right?

Will: That's sexy.

Josh: It's sexy to be able to do something that you enjoy doing, right?

Will: Exactly.

Josh: That you do on your own terms.

Will: Yeah.

Josh: When you want to do it.

Will: Yes.

Josh: How you want to do, where you want to do it, right?

Will: Exactly.

Josh: And make the money you want to make, whatever that target is for yourself. So, that's the definition of a side hustle and that's the left side of the stage 1 that we call, right? So again that's usually 0 to 4 thousand dollars a month whether that's you doing it. Actually, that's all part time, right? No matter what you look like whether you're flipping phones or whether you're doing repair as a service or whatever that might be.

Will: Right.

Josh: 0 to 4 thousand dollars a month. Usually it's the left side of stage 1.

Will: Right.

Josh: Biggest challenge there? Time.

Will: Time.

Josh: Right?

Will: Yeah.

Josh: Because you're trading your time and you're going to run out of time to trade.

Will: Exactly.

Josh: Right?

Will: Exactly

Josh: Bottom line.

Will: Yeah.

Josh: The right side of the equation of stage 1 is self-employed. So now you've made it as a tipping point where you are done dipping your toes in this thing.

Will: Right.

Josh: And you then jumped off the edge of the cliff where and you're full body in, nose dive, you're in this thing 100%.

Will: And you realize that it works, right?

Josh: Right.

Will: A lot of times at this point you come to the conclusion that there's something here.

Josh: That's right.

Will: This looks good, there's something if I put more resources, more time into it then what it should equate to is more revenue.

Josh: That's right.

Will: Right? So, you're moving, it's more of a commitment as Josh said or committing to just us in this stage like it's just me, but I'm committing to more of that with my time and my resources.

Josh: Right, exactly. And typically you'll have 4 to 10 thousand is what we've seen pretty typical, right? 4 to 10 thousand dollars a month in revenue is usually what you're generating, and again you're a solopreneur, your biggest challenge at this stage is leads.

Will: Yes.

Josh: Right? You're having a hard time generating enough leads that you could potentially sell to.

Will: Right.

Josh: Right, because you're getting started, you're wearing all the hats, you're trying to figure this thing out.

Will: Yeah.

Josh: So again, we're just kind of skimming over the surface, if you want to dive deeper into each one of these, go back and listen to the last couple of show episodes where we go deeper into these and we talked about that specifically. So, if you feel like that is something that you're interested in or define yourself and you want to know more about it, go back to episodes 8, 9 or 9 and 10.

Will: Yes, check it out.

Josh: 8, 9 and 10, it's all the episodes.

Will: The last two episodes. Listen to all of them, exactly, exactly.

Josh: So in this one today what we're going to do is we're going to dive deeper into stage two.

Will: Right.

Josh: So stage 2 is what we call the new employer stage.

Will: New employer stage.

Josh: Right? So, you're no longer solo.

Will: Right.

Josh: Maybe you got a business partner on board or maybe or however that looks, but you've made a hire. So now you've got a team of 2 to 3 people, right?

Will: Right.

Josh: This is the epitome of I am committed, you probably have a store at this particular location, you know however that looks, I haven't really seen anybody do a mobile business like this yet unless they're using a fleet of vehicles that the own or control.

Will: Right.

Josh: But usually the other side of this that lets you know is usually you’ve got a little more skin in the game, right? It is not just time.

Will: Right.

Josh: Because now maybe you got some lease, you had to go out and get some equipment whether that's a fleet of vehicles or whatever that is.

Will: You got some employees.

Josh: Right and you got employees. You got other mouths to feed besides your own, right? Now, you're responsible, you're a parent, you're responsible for other people.

Will: Exactly.

Josh: Right?

Will: Exactly. People are counting on you to be there tomorrow.

Josh: Exactly.

Will: Right?

Josh: Right. I'm looking up to you to show me the way.

Will: Exactly.

Josh: What are we doing? I'm here to help you accomplish your goal and how are we going to do it.

Will: Exactly.

Josh: And I trust that you're going to take care of me as far as doing what you agreed to and that's keeping my check what it needs to be every month. So, communicating it to me about it if there is a problem, right?

Will: Exactly, exactly.

Josh: So.

Will: More risk.

Josh: Yeah. It's significantly more risk, but also more rewards, right?

Will: Exactly, exactly.

Josh: So typically at this stage what we'll see is 1 to 300 thousand dollars in annual revenue, right? And again I see many independent repair shops fall into this.

Will: Right.

Josh: Nationally, there's about, what do we say, 1.7 million businesses across all industries that fall into this category.

Will: Right.

Josh: And again it's 2 to 3 people and your biggest challenge at this particular stage, sales. Now, let's back up to see what that actually looks like.

Will: Let's understand what sales actually mean.

Josh: Exactly. So, I want to unpack that a little bit.

Will: Unpack that. That's the word I'm looking for.

Josh: I know, I know, I can see you digging. I can see you digging for it.

Will: Let's unpack that.

Josh: So I want to unpack that a bit because what we identified in the last stage was leads are your problem, right?

Will: Right.

Josh: So, what's the difference between a lead and a sale?

Will: Exactly.

Josh: So let's kind of talk about that, right? A lead is an opportunity. So think of a lead like someone calls the phone, right? That's a lead. You get a phone call.

Will: That's a hot lead.

Josh: Right?

Will: Yeah.

Josh: Or someone submits an inquiry on your website.

Will: Right.

Josh: That's a lead, right?

Will: Yes.

Josh: That is not a sale because it hasn't converted to money, right?

Will: Right.

Josh: A sale is where you actually convert the transaction. It becomes an actual transaction where even if it's a dollar, right? But you have exchanged money for a product or service, that is a sale.

Will: So, a lead is an opportunity to convert a sale?

Josh: That's right.

Will: Yes.

Josh: Exactly, right? And the reason why this is the biggest hurdle is because guess what you got to do?? You got to be consistent with your revenue targets man.

Will: Right.

Josh: Month after month, because guess what?

Will: The bills?

Josh: You're responsible for people.

Will: The bills, exactly.

Josh: Yeah, exactly. You have more responsibility. So, what I see a lot of stage 2 businesses make a mistake is they don't know how to become a sales focused organization.

Will: Right.

Josh: Right? And that's what should happen at this stage is you really need to start honing in your sales chops, right?

Will: Right.

Josh: Whether that's sales scripts, whether that's training your other employees, sitting down and coming up with ways to sell, right? So when someone walks in your store at the other store, right? Good job you converted the lead into a hot lead.

Will: Right.

Josh: They're in your store. How do you make sure that they don't leave without spending some money with you?

Will: It doesn't get any hotter than that.

Josh: Right.

Will: Like the hottest the lead could be is standing right in the store that you pay for ().

Josh: Exactly.

Will: It can't get any hotter than that.

Josh: Exactly.

Will: So it's time for you to convert it at this point.

Josh: You have to convert that to a sale, right?

Will: Absolutely.

Josh: So your goal is to make sure that that person does not leave without spending some money with you.

Will: Exactly

Josh: No matter how small.

Will: Exactly.

Josh: Right? No matter what it is you need to be able to convert that sale.

Will: Exactly.

Josh: So one of the other reasons that this is a challenge is because this is early in the game where maybe you don't have things systemized yet, but you really got to start thinking about what it looks like to systemize your business. So, whether that's scripts.

Will: Right.

Josh: Right? I remember back when I first started in the repair store business back in 2008.

Will: Yes.

Josh: This was actually one of the very first things that we learned focus on quickly was we have people lane here.

Will: Right.

Josh: So, how do we convert on a consistent basis, right?

Will: Right.

Josh: Because maybe I'm good at converting a certain type of customer or maybe you're good at converting a certain type of customer, but between the two of us we're not consistent, right?

Will: Exactly, exactly.

Josh: Maybe one of us is outshining the other one. So we got to figure out ways to be consistent in those conversions, so that's where good sales scripts come in. A sale script aren't just relevant for the phone even though you should do those for the phone as well, they're very relevant for when people they walk in your store.

Will: Place ().

Josh: Right? You should have a way of greeting them like for us here we said make sure you greet the customer within 20 seconds of walking in the store.

Will: Yes, right.

Josh: Even when if you're tied up with someone else, you make sure you greet them, let them know you're going to be right with them, right? Then you got to have a way to convert them, and it's not always like going straight for the juggler for the sale, right? But there's a process to this thing.

Will: Right.

Josh: The other thing is you got to make sure you understand how to upsell, right?

Will: Right.

Josh: Because just because you sell something to someone doesn't mean that you don't push the ticket to be higher, so you're maximizing your profit on that particular transaction.

Will: Exactly. Josh why don't you give us an example of one, because I'm sure you've experienced that before where you have done say repairs, because we're talking about the repair business, right? What goals with the repair that you can upsell, give us an example of an upsell on let's say a repair?

Josh: Yeah. Man, there's a lot, right? There's a lot. And so I'll give you an example of some of the things we used to do. One of the easiest to do when we started teaching this like 6 years ago or something like that.

Will: Right.

Josh: If not longer than that.

Will: Right.

Josh: But tempered glass right now, like if you're in the business you're going to be like oh, that's obvious. It didn't used to be so obvious, and if it's not obvious to you and please keep in mind like we deal with students and people in ideation stage from all over the world.

Will: Right.

Josh: So just because something seems obvious to you in your market, it doesn't mean that is obvious to someone in South Africa or into Iceland or something like that.

Will: Right.

Josh: Which is why we got to cover these things, but tempered glass is a very very, and back then it wasn't just tempered glass it's a screen protector, right? If you came into a repair shop with a broken screen, you know what the easiest upsell is? Let me get you to protect the screen we just spent money and time repairing for you, right?

Will: Yeah, that's the pain.

Josh: So that's one of them.

Will: It’s that pain point, right?

Josh: For sure.

Will: The customer just experienced pain having downtime or time away from the device that they value very much.

Josh: Right.

Will: And so what you're trying to do is tap into that pain and say hey, let me alleviate some of that for you by giving you this upsell on a screen protector.

Josh: Exactly.

Will: That's the perfect time.

Josh: Exactly. You know what it is?

Will: It's a hot lead.

Josh: It's the same as when you go into the, it used to be Incredible Universe and then they changed to Fry's Electronics,

Will: Yeah.

Josh: I don't know, it's here at US. I don't know, I've never seen them actually in some of the other countries I've been in.

Will: Right.

Josh: But man, these guys are experts at the upsell, right?

Will: Right.

Josh: So let me kind of give you an example of the way it works.

Will: Right.

Josh: So Fry's Electronics is an electronic reseller, right? And a lot of times they have open box stuff, so if you return it, guess what? They don't necessarily just liquidate it the way like some forward retailers like the best buy does.

Will: Right.

Josh: They'll put that used product right back on their shelve and say this has been opened, this is an open box return.

Will: Open box, yeah, open box.

Josh: But you can get some killer deals on some stuff at Fry's Electronics, right? And they carry all kinds of stuff. So, what they did at super smart is they make you walk through the daunting maze of upsells.

Will: Right.

Josh: Right? So you're going through a maze of gum sticks and candy and SD cards and CDs and books and like headphones.

Will: Yeah.

Josh: Man, and it was long like literally you would stand in lines, they would cattle trough you through these lines.

Will: Right.

Josh: Like herd you right back and forth through a maze and left and right there is nothing, but last minute give me items, right?

Will: Right.

Josh: So whatever you came in for maybe it was a $100 hard drive, man it's hard to get out of there without buying an ice tea or a bag of chips or a pair of headphones, or whatever it is.

Will: Yeah. I mean you see it all the time. I mean you see it in the most consistent place you've ever see it is like at the grocery store, right?

Josh: Right.

Will: You go buy the milk, but on your way out right there in line while you're standing waiting there is chocolate looking you in the face.

Josh: Exactly.

Will: Right?

Josh: They give you like that all the time, because my daughter sees the toys, I had to buy a pez dispenser at the store the other day, right? Because she saw the Minnie Mouse pez, so I had to get pez.

Will: Exactly.

Josh: Upsells all the time, right?

Will: Upsell all the time. You're being upsell when you don't know sometimes that you don’t know your being upsell.

Josh: Right. So pay attention to these things though because they work.

Will: Right.

Josh: And it was a little bit of a, I went around my back to touch my nose on that one, but I want to kind of really explain to you like the concept of understanding.

Will: It's the concept, () of how important it is and how powerful it actually is and how people leave a lot of money on the table by not doing effectively upsells.

Josh: That's right.

Will: Right?

Josh: So for an example, right, to dive deeper into that and I'll give you some other examples of good upsells, right? But the reason that's so important is because it increases your margin without very much more work, right?

Will: Right.

Josh: So if you're a service based business which is what his repair business is, right?

Will: Yes.

Josh: Again, we like to use the rule of thumb that your cost to goods should be about 30%, right?

Will: Right.

Josh: So it should be maybe 30 bucks is what it’s costing you for your screen and your labor or whatever.

Will: Right.

Josh: On a 100 bucks repair, right?

Will: Right.

Josh: Just rule of thumb.

Will: Right.

Josh: It's not always that, sometimes it's way less, sometimes it's way more. But if I can buy a screen protector for a buck or 80 cents and sell that for 10, 15, 20, 30, 40 dollars.

Will: So, your cost is a buck?

Josh: Right.

Will: Right.

Josh: Man, look at the way you just increased it. You just took that $70 repair and you added on an extra 10, 20, 30 dollars of pure profit even if you just go with 10 bucks, right, on a 70 bucks repair, that's well over a 10% increase.

Will: Right.

Josh: Right? For what? For just asking the question would you like a screen protector?

Will: Right. And ou just pushed that 70 dollars sale into a 100-dollar sale.

Josh: Yeah.

Will: Just like that.

Josh: Boom, just like that.

Will: Just like that.

Josh: Easy peasy man. So, this is why it is important, right? So screen protectors aren't the only thing though there's a lot of other options. I see a lot of gas stations now and in your repair shop you should definitely have these, you have these unique accessories, right? Charging cubes.

Will: Exactly.

Josh: You know the little cords, right? Charging cables.

Will: Yeah.

Josh: Headphones, obviously cellphone cases. Now, there's a whole black hole of inventory you can fall into if you're not careful with this.

Will: Right.

Josh: So you got to be very selective in things that you do choose, but again we're using this as an example of how to push sales.

Will: Right.

Josh: And with that being said again the focus for your organization, you need to be a sales focused organization.

Will: Right.

Josh: Right? So, at this point it's not so much about understanding the technical how do we do a repair on a phone.

Will: Right.

Josh: Your focus needs to be how do we push sales, right?

Will: Right.

Josh: How do we increase the average ticket? How do I make sure when a customer comes in, we have a way to convert them into, well, when a lead comes in, excuse me.

Will: Right.

Josh: Do I have a way to convert them into a paying customer almost a 100% of the time, right?

Will: Right.

Josh: Another one that we've mentioned before in another podcast that's overlooked all the time in the space right now is phones.

Will: Right.

Josh: Right?

Will: Yes.

Josh: Sometimes, very common on Samsung, sometimes the customer just doesn't want to do the repair because it doesn't make sense to them.

Will: Right.

Josh: Right? You're asking me to pay $200 or $220 for a repair on my Samsung, I'd rather just buy a phone.

Will: Right.

Josh: Oh you know what? That's right Susie, you know how about I offer you this other phone instead, right? It's only $250, right? And then I can buy your old phone from you to offset that cost?

Will: Absolutely.

Josh: Right?

Josh: Absolutely.

Josh: Guess what you just did? Boom, you just converted and made money on a sale, plus you got a device that you could refurbish and resell to the next customer that comes in.

Will: Right.

Josh: Or you could parts harvest to lower your inventory.

Will: Exactly.

Josh: Man, there's a lot of different ways to slice this baby up.

Will: But this is where, and this is where in the classroom we used to talk about a lot. We used to talk about difference between working in your business and working on your business, and a lot of what Josh is talking about is actually taking the time to work on your business. Like this doesn't just happen by through osmosis, right? This isn't just something because you're doing cellphone repair, any business for that matter that you just move into without proper strategic thought on how to do it, such as sale scripts, things like that, like how to sell, what to sell, these things take time and you have to work on it. What we've always say work on it, right? You have to understand how to sell there's a method to this madness of selling.

Josh: Yes.

Will: And you really have to understand how that's done strategically, and you have to take time to do it. Now, challenge with that obviously is if you're moving from say stage 1 to stage 2, this is where a lot of people actually lost in the sauce, right? Because they're not doing that or they haven't practiced that or they get condition because they don't have the necessary or they're doing that in stage 0 or stage 1 and so when they commit because the demand is there for the commitment and they go you know what? I'm going to commit, I'm going to hire people, I'm going to take on more responsibility, I'm going to take on, I'm going to sign this lease.

Josh: Yup, overhead.

Will: Right? Overhead, right? Now you're in this place where you've committed to sales. This is why we're really harping on this, because I know we're harping on sales a lot for this, but it's important because you're committed to the sale. Now, you have to make the sale in order to cover the nut each and every month, right? And the expectation from your employees and your customers. So again what we used to talk about in the classroom a lot  is that transition in your mind to take the time to work on your business and not just in your business because in stage 0 and stage 1 a lot of times people are working in their business.

Josh: Right.

Will: They are maintaining their demand and their requirement.

Josh: Or you're focused on service.

Will: Exactly. Your focused on the service.

Josh: That's usually what it is.

Will: And learning, and training and learning and all of ()

Josh: Yeah, exactly. But you understand that early stage stuff of like how do I provide the service that I'm here to provide.

Will: Exactly. Exactly.

Josh: Which is important, right?

Will: Exactly.

Josh: But as you scale and as you hit stage 2.

Will: Right.

Josh: For revenue, if you want to push beyond this, remember that's what we're focused on, it's how to push beyond it because this is going to be your biggest hurdle.

Will: Yeah.

Josh: Is how to become a sales focused organization.

Will: Exactly.

Josh: Right? Which means that your conversations with internally and what you're focus on should be less about how to repair something and more about how do I sell stuff, right? How do I make sure I'm selling more? How do I convert more people?

Will: Right.

Josh: Not even so much how am I driving leads in because that's a constant ongoing by the way, but that's not your biggest hurdle at the stage.

Will: Right.

Josh: You probably have already figured out some ways to generate leads on a consistent basis, but now what it is is you're not converting those leads well enough.

Will: Right.

Josh: Right? It’s One thing again it's a vanity thing, right?

Will: Right.

Josh: It's a vanity thing to say oh, I've got a 100 phone calls a day.

Will: Yeah.

Josh: Okay. Well, that's great.

Will: We've seen that.

Josh: But how many of those phone calls are turning into paid customers, right?

Will: Exactly.

Josh: If you're only converting 10 of those customers a day.

Will: Right.

Josh: That's a 10% conversion rate. You got some work to do.

Will: Exactly.

Josh: Right? You got some work to do, so you need to really go to work and sharpen your pencil to figure out how can I be more persuasive to convert these leads into more sales.

Will: Yes.

Josh: Again, I feel like I'm harping that, but again

Will: It's that important, because it's the commitment.

Josh: Yes.

Will: This stage is the commitment.

Josh: Exactly.

Will: You're really committed to the responsibility of the overheads you have to pay each and every month and that's not going to stop.

Josh: Right.

Will: And so if you don't know how to, and this is where we see and the reason why and I'm glad we're harping on them because what we see, we see this to be the biggest and you correct me if I'm wrong Josh, but I've seen this to the biggest fail point.

Josh: Yes.

Will: For most people in this business is this particular transition where people actually start to go in the wrong direction.

Josh: Yes, usually they start to back pedal, right?

Will: Yes.

Josh: Because either, here's how it works, right? One of two things either they feel like oh I know what the next thing to do is, let me just put another location, right?

Will: Yeah.

Josh: Let me open another location because I feel like we've maxed out, like we're hitting good revenue numbers, but I want to increase my revenue.

Will: Right.

Josh: So the quickest way to do that is to open another location.

Will: Which can be the quickest way to

Josh: It could be a spiral to death.

Will: For sure.

Josh: Right? Because if you're not a sales focused organization, now what you're doing is your spreading yourself who's probably the sales generator.

Will: Right.

Josh: Your spreading yourself too thin between physical locations, right? So now it's harder for you to generate those sales. It's harder to get those leads converted, because you're not there doing the sales.

Will: Right.

Josh: And whoever you left behind might not be good at sales especially if they'rea  technician.

Will: Right.

Josh: So, there are some things to balance here.

Will: Exactly.

Josh: That you really have to focus on, so to that point it's a very important point that you bring up man because it's so true that a lot of times by not being focused on sales, and focused on the wrong things.

Will: Right.

Josh: As far as what we think is going to take us to grow, right?

Will: Yeah.

Josh: Me and Frankie say all the time, what's the biggest way to solve a problem? Throw money at it, right?

Will: Right.

Josh: That is not always the answer, right?

Will: Right.

Josh: That sometimes is a quick way to burn through a lot of money, right?

Will: Yeah.

Josh: But at the end of the day again sales.

Will: And I'll tell you one of the biggest things that I remember one of the biggest problems, you know I love stories.

Josh: Yeah.

Will: One of the biggest problems we used to have and I remember you and Frank talking about his all the time is how we inspire or incentivize our employees who we now obviously hired in this stage to actually sell?

Josh: Right.

Will: Right? As opposed to just repair.

Josh: Right.

Will: Right? Because what we would have and what you guys may face a lot of times is the combination of tasks that a technician typically does in this stage of business, which means you have such limited resources of people that people are wearing several hats. So your technician at some point has to be your sales team.

Josh: That's right.

Will: Right? And so with that a lot of times what you'll find, what you guys will find is technicians like to fix things, right? They're not multi-faceted a lot of times, and what happens is when you as the owner obviously you need them to sell when you're not there, you need them to sell upsell, you need to get them motivated to ask for more, right? Or sell more, right? And a lot times a guy who's earning a paycheck, right? Who's going to get the same paycheck regardless of what he does in terms of the time, right? That he's on the clock or however you choose to pay your guy, there may be no incentive there to actually upsell, right?

Josh: Yeah, a lot of times there are not. We ran into that too where when you're away the technicians are turning away people, right? Because they are like oh man, I'm already backed up as far as the amount of repairs we got in the queue.

Will: Right.

Josh: So.

Will: It takes time to upsell.

Josh: That's right.

Will: Yes.

Josh: That's right.

Will: Yes.

Josh: So that's another problem is that they don't like to spend time with the customer necessary to explain the solutions and get them comfortable which makes them easier convert into a sale, right?

Will: Exactly.

Josh: So, some challenges.

Will: Yeah, some challenges.

Josh: There are some challenges.

Will: Definitely that transition that people get caught up in and we're just really, I know we're harping on the sales guys, but that is the biggest part of this commitment. You are committing to the sale when you go into stage what we call 2, the new employer.

Josh: Yeah. Again, at this point you're no longer a repair organization.

Will: Right.

Josh: You're a sales organization.

Will: You're a sales organization.

Josh: Right?

Will: Yeah.

Josh: That's how you need to think of yourself that you are a sales organization and your job is to sell, repair services and everything related to it.

Will: Exactly.

Josh: Right?

Will: That's success at the end of the day. It's not how well you can repair it, it's typically what we're saying is the best repair person isn't the guy who wins, he isn't the most successful guy, it's the guy who can sell the best, the guy who has the best sales techniques, the guy who runs his business the best in terms of working on his business instead of working in his business. Yes, the technical skill is important, but the technical without the ability to actually grow your business and do what we've been talking about, which is grow your business and sale, right? You're not going, you're not going to last, you're not going to win, you have to always be growing and you have to always be increasing your sales.

Josh: Right.

Will: And that takes time, that takes thought, that takes strategy, that takes understanding your customer, understanding your market, understanding their likes, getting feedback, right?

Josh: Yeah.

Will: That's one thing that we really put a lot of focus on is getting feedback from our customers to understand what they like, what didn't like, what drove them to buy, what drove them not to buy, right?

Josh: Yeah. And also another key point in that, right? Another differentiator between stage 1 and stage 2 and they kind of go hand in hand, right? Because leads and sales attract. You got to make sure you're attracting the right kind of customer, right?

Will: Exactly.

Josh: Because sometimes you might figure out that you're driving a lot of leads, but you're driving in leads that are not going to spend money with you.

Will: Right.

Josh: Right?

Will: Yes.

Josh: That are just deal shopping.

Will: Right.

Josh: Right? ()

Will: There are levels to this leads, right?

Josh: There are levels to this things. There are levels to this thing.

Will: There are levels to those leads baby.

Josh: Yeah.

Will: All leads aren’t' equal, right?

Josh: Right.

Will: That's for sure.

Josh: Yes sir.

Will: Right? And again, it depends on what type of customer you're wanting to serve and what you're offering. You really got to understand who your customer is.

Josh: Right.

Will: What we call your customer avatar.

Josh: Yeah.

Will: Who is your ideal customer?

Josh: The persona.

Will: Yeah.

Josh: Your customer's persona.

Will: Exactly. Who is your ideal customer and do you really want to take the time. Let's give them an example to that. Do you think we got time? Remember when we did the

Josh: Well, man it's so easy to point out, right? And it's funny because I know anybody in the business has probably tried this, right?

Will: Right.

Josh: And there are ways to work, so don't take this wrong and please don't take this wrong if you're not in a place where you can do this, right? But we were running group on ads for a while.

Will: I didn't even say that guys, I knew he knew exactly what I was talking about.

Josh: Yeah.

Will: Let's give them an example.

Josh: Yeah. We we're running group on ads and man you know, you want to talk about learning about customer avatars, we learned really quickly about customer avatars, right? So there are a couple of customers that I learned really quickly that it's not a bad customer.

Will: Not a bad customer.

Josh: But it was different than the type of customers we were used to serving.

Will: Exactly.

Josh: And what it turned into was a large amount of customers and leads.

Will: Right, right.

Josh: But where very deep, which was exciting.

Will: Which you assume to be great.

Josh: Right.

Will: Like man, we're getting a lot of leads.

Josh: Right. But at the same time, we're doing it for less margin, right?

Will: Exactly.

Josh: Because we got to give groupon a percentage of that, right? So yeah, we're doing more volume, but we're making less money per.

Will: Working harder.

Josh: Working harder.

Will: Spending more time.

Josh: Stressing the team out more, right?

Will: Exactly.

Josh: Stressing the team out more, right? For what was really the purpose of that. So, for me it took us a second to kind of step back and figure out okay, I see there's a difference here because our normal customer, at this location when we were running this

Will: Right.

Josh: It was in a very well to do area, right? Average minimum income of 90 thousand.

Will: Right.

Josh: Right? So it's not a typical area by any means, and it was different types of clientele that were coming there. This was a way different clientele that was coming in from groupon Jack let me tell you.

Will: For sure, for sure.

Josh: You want to talk about impatient.

Will: Yes.

Josh: And demanding.

Will: Expectation

Josh: Super high.

Will: Yes.

Josh: Right? So, we're not prepared for that type of customer whatsoever, right? So that really goes back to drive the importance of customer personas. Now, what we did is obviously we readjusted, right?

Will: Right.

Josh: And we came up with the new sales strategy.

Will: Right.

Josh: Right? To make that work. And this is before groupon had scheduling in place and all of that sort of stuff.

Will: Yeah.

Josh: So we created a calendar scheduling, so people could put their appointment in place, and we create this whole automated sales script on the front end to allow that customer to really be set an expectation of what is next, how this is going to work.

Will: Yes.

Josh: Part two of that is realize really quickly that the groupon customer is a deal shopper, right?

Will: Right.

Josh: At the end of the day the only reason they bought this is they've been walking around with a broken phone for a long time, the reason they did it is because it was a killer deal.

Will: A proud deal shopper may I add?

Josh: Yes.

Will: Yes.

Josh: So what you give a proud deal shopper? Another deal.

Will: Yes.

Josh: Right? So then what we figured out was let's put some specials together for the groupon customers when they come in, right? And we offered those as upsells which were killer one time offer deals since they were there doing the repair that they couldn't find anywhere else, right?

Will: Right.

Josh: And what it did is it pushed our margins back up.

Will: Right.

Josh: Right?

Will: Yes.

Josh: But it took some experimentation and a little bit of pain to figure that out.

Will: Man, we had to learn that and we learned it the hard way, but it was good in the end we did learn, we understood the importance of like you said understanding who our customer persona.

Josh: Right.

Will: What that is, what that looks like and how to handle that, and again you guys will probably will probably go through that and a lot of this depends on where you are in this process, where you are in regards to your geographical location, right? What you can offer, what you can't offer, you got to really understand that to figure it out. But sometimes you have to go through that.

Josh: Yes.

Will: That trepidation, that heat, that discovery, right? To understand what to do and how to make the sale, right?

Josh: Yeah. And you can't be afraid. One of the things that is so important guys keep this in mind, fail fast, fail fast.

Will: Yeah.

Josh: Do not be afraid to try things, but what you want to do is try and fail if it's going to fail.

Will: Yeah.

Josh: And fail quickly so you learn the lesson.

Will: Quickly.

Josh: And you dust yourself off and you go try it again.

Will: Right.

Josh: Try the next iteration of it. Try the next version of it, right?

Will: Right.

Josh: That is better, stronger and more well, equipped.

Will: Right.

Josh: But that is the goal. Don't be afraid to try things because that's what we did.

Will: Yes.

Josh: This road was not paved for us back in the day. Like I'm telling you it's funny because on the forums and things today you see a lot that sounds like it's old hat. Like Oh yeah, this is what you do in this, this is how these customers, man, back in 2008, 2009 bro, this was not paved. We figured out a lot.

Will: Yes.

Josh:  And we went through a lot pain to figure those things out.

Will: And those principles are still the same, I'll give you one example of principle like Josh was saying fail fast, but what you want to do is you always want to, you want to test small.

Josh: Yes.

Will: Right? Test small and then if it works, go big.

Josh: Exactly.

Will: So that way if you fail on the test it's not so substantial that you can't recover.

Josh: Right.

Will: So it's very important to test small.

Josh: Yeah.

Will: For example

Josh: We call it pilots.

Will: Yeah. The groupon example that Josh just gave, right? It would have been ideal for us to test that very small kind of in a sample size, so we can get an idea of what the problems or the struggles would be.

Josh: Which we did.

Will: Which we did.

Josh: We were forced to stop it, because there were so many.

Will: Right, exactly.

Josh: So we did. We cut it off. Yeah, we cut it off.

Will: Wait, wait, wait, wait. But that's the idea, the idea is if you do get an idea and you want to test it, test small. If it works, get a little bigger. If it works, get a little bigger. If it works, get a little bigger. So you can start to manage that increase very linearly, right? That's very important for you guys to understand that.

Josh: Yeah, yeah. In fact I mean we do that until this day with everything that we do, right?

Will: That's everything. That's everything.

Josh: We call it pilots. Any time we come up with an idea, we run a pilot, right? They do it in TV man, right? They do a couple of episodes they call it pilot.

Will: They call it the pilot. It's the pilot.

Josh: Right?

Will: Right.

Josh: Right, because you're just trying it out to see if it's going to fly.

Will: Right.

Josh: Right?

Will: And you can tell it's very under budget, right?

Josh: Yeah.

Will: So, it's very cheap, it's done on the, it's not, we don't throw all, everyday

Josh: You don't put all the resources behind it.

Will: Yeah. You don't put all the resources behind it. It's just kind of let's get the look and feel ().

Josh: Yeah. You do enough to see if it's going to work and what the feedback is and whether it makes sense for you in your goals and your business.

Will: 100%.

Josh: And then once you get those results, put some gas behind it.

Will: Put some gas behind it.

Josh: And go, right?

Will: So Josh I think, are we going to a question today, we're at the 30 minute mark, so?

Josh: Yeah, yeah.

Will: It's tough.

Josh: We've got a question today that I think ties into that really well.

Will: Right.

Josh: But I have a feeling it's going to be like another 20 minute conversation.

Will: I do. I think this is going to go long. We can continue with, I mean we can tie it to if we want. It's really up to what we want to do at this point, what we think, because what I don't want to do is we don't want to short you guys that information, right?

Josh: Right.

Will: And so we want to make it crystal clear, so we don't want to give you half of it hear and be in a place where we got a

Josh: Well, let's do this. Let's dive in.

Will: Okay.

Josh: And what I don't want to do is short the answer.

Will: Right ().

Josh: I don't want to short the answer.

Will: That's exactly what I was saying.

Josh: But we need to shorten time.

Will: Right.

Josh: Right? Because it's just the right thing to do for us, but I do want to address it.

Will: Okay.

Josh: So today's question comes from William Midget, who's a student of ours, a new student, right?

Will: Nice name Will.

Josh: Yeah. Williams, I almost thought it was Midget. But Williams, yeah, so his question goes like this. He says hey, I'm 9 months into this trade as a business. I use cash for everything. I'm about to open my first store front. So, that's important, right? So he's doing it as a trade.

Will: Yeah.

Josh: Which means he's probably been side gigging or something like that.

Will: He's ().

Josh: He's about to open his first store front.

Will: New employer, got you.

Josh: The largest problem I'm having is inventory. I cannot afford 20 $150 phones or 5 $900 phones which is the minimum order quantities says, minimum MOQ which is minimum order quantity from whatever suppliers that he's dealing with as far as

Will: So obvious he wants to resell devices?

Josh: Right, exactly. So what do I do? I have folks coming to me left and right wanting high end phones with cash, but they do not want to wait until I order it, please help.

Will: Okay.

Josh: So, William fantastic question.

Will: That is a great question.

Josh: Right? And I'm going to try to give you the reader's digest version of what I think I would do if I was in the situation, right? So, again I'll rewind real quickly back to when the road was not paved for us in the service business back in the day, right?

Will: Right.

Josh: What I saw people in other markets doing and I still see it today, right? Is people were coming in with their devices, leaving the devices, you do the repair, if the repair is not, if it's non-repairable or BER, right?

Will: Right.

Josh: A lot of times customers wouldn't come back for the devices.

Will: Right.

Josh: Right? Or it will be like pulling teeth trying to convince that customer to pay you.

Will: Right.

Josh: Right? For something that was non-repairable.

Will: Right, for your time.

Josh: Right.

Will: Yeah.

Josh: So, we flip the model, right? And we went to you pay in advance for the repair.

Will: Right.

Josh: Right, which until this day every time we teach anybody the strategy, it makes a lot of people uncomfortable, but I'm going to tell you something, the cash conversion cycle, which we'll dive into an another episode, right? Put a pin in that one.

Will: Right.

Josh: My cash conversion cycle is important man, because it's all about how quickly you can convert a sale to cash, right? It's one thing for me to say yeah, I sell you. But basically if you're doing something where it's net terms, right?

Will: Right.

Josh: Right? There's a delay in that and I bring that up because there's a strategy behind how you convince people to pay you upfront for something.

Will: Right.

Josh: Right? And the reason why I thought this was a fitting question for today's show is because this is a sales problem, right? At the end of the day I know it feels like an inventory problem, but this is a sales process problem, because what I think there are two ways of going about this, right? If you’ve got customers coming to you left and right that want to buy phones, you need to solve this problem because you're leaving a lot of money on the table.

Will: Absolutely.

Josh: Right, number 1.

Will: 100%

Josh: So, the easy answer would be go get a line of credit.

Will: Right.

Josh: If You got people coming to you left and right, get a line of credit. Use your credit card, do whatever you need to do, right? And I'm not advocating anybody to get into debt, but if you've got customers banging on your door that want to buy something from you that's a pretty safe bet.

Will: Yeah.

Josh: That hey, if I leverage this, right? And I do a little bit of credit leverage, how hard is it for me to be able to turn around and sell that inventory, you're going to be able to sell that pretty quickly.

Will: Right.

Josh: So that's not a big deal. Part of it is how do you leverage your ability to sell that device and convince them to wait?

Will: Right.

Josh: Right?

Will: Right.

Josh: Now, that's an. That's an effective sales script or, you know because at the end of the day what you're saying is people see no value in buying a phone from you versus buying a phone from this individual around the corner.

Will: Right.

Josh: Right?

Will: Right.

Josh: So, how do you come up with a way, can you come up with a creative way to add more value to make someone want to wait?

Will: Right.

Josh: Right? Can you add a warranty? Can you do something special? Can you throw in maybe a case or something that is out of the ordinary that they don't get from anywhere else that makes them willing to wait, right? Even if you make a reduced margins. What you're saying at the end of the day is you have the opportunity to capitalize on sales.

Will: Right.

Josh: So I'll be okay taking a reduce margins to have you pay me up front.

Will: Right.

Josh: I don't need to make as much when I'm using your money to leverage to buy my inventory.

Will: Right.

Josh: I can make less, right?

Will: Right.

Josh: And as I do that more and more eventually I can use your money to purchase my inventories and then I can change my strategy ().

Will: And you're always ahead.

Josh: Right.

Will: So I think effectively what you just gave people is a kind of a blueprint of how to transition from being cash strapped.

Josh: Right.

Will: If that's the right, if that's the right terminology, not having the cash.

Josh: Right.

Will: To invest in the opportunity, right? And then transition that into, but you got to do it really responsibly.

Josh: Yeah.

Will: Right? And think about

Josh: This is

Will: Go ahead.

Josh: This is art, this is not science. So, I can't tell you

Will: Exactly.

Josh: I mean I could if we we're one on one I can just coach you to help you with this, yeah.

Will: And it's just a blueprint, it's just a blueprint.

Josh: But there's a way to do this until this day, right? One of the things that we've always done in our stores as well is we've always been able to convince people to wait.

Will: Right.

Josh: If there were something that we didn't have in stock for repair

Will: Right.

Josh: Excuse me. I never ever had a problem getting anybody to wait to order a part.

Will: Right.

Josh: Ever.

Will: Right.

Josh: Once we figured this system out, never ever was a problem waiting for anybody else, right?

Will: Right.

Josh: Even if the guy down the street had the part in stock, people would wait for our service.

Will: Yeh.

Josh: All the time, right?

Will: Right.

Josh: Until this day I hear people all the time, well, people don't want to wait, they will go around the corner.

Will: Right.

Josh: Again it depends on the type of customer you're attracting and it depends on the rapport that you're building with that customer when you're there convincing them why you are the best solution and they should not go anywhere else, because at the end of the day guys, this is not a commodity business.

Will: Right.

Josh: This is a service business.

Will: Right.

Josh: Right? It's the same reason why when I take my car somewhere I don't just go anywhere.

Will: Right.

Josh: I will wait because I like to deal with my particular service advisor and I trust that they're not going to rip me off and you know the other example, dentist.

Will: Right.

Josh: Right? I took a day to fly back to Arizona to go to the dentist. I don't even go to dentist here, right? Because of the rapport that has been built with this dentist.

Will: Exactly.

Josh: Overtime.

Will: That's funny because we're going back to Arizona here in just

Josh: In Just a few days out.

Will: And I'm thinking right now, I'm thinking hey I need to make a dentist appointment.

Josh: Yeah. I'm going into the dentist man,

Will: () my dentist is in Arizona and we're sitting here in Dallas.

Josh: Yeah. Man, there are hundreds of dentists here, right?

Will: Exactly.

Josh: But why do I not?

Will: It's the relationship.

Josh: Because, the relationship, right? That individual and his business have done a good enough job to convince me to wait.

Will: To wait.

Josh: Until I go back to Arizona which I do. I actually make trips specifically to go to the dentist. I've rearranged my schedule for that.

Will: Which is even more expensive I might add.

Josh: Right.

Will: Right? Because you could probably get the same thing in terms of cleaning or whatever it is done here.

Josh: You know why though? I trust him, right?

Will: You trust him. Exactly.

Josh: He's not going to rip me off. He's going to tell me I have a cavity when I don't.

Will: Right.

Josh: He's not going to try and pull a tooth and tell me that I’ve got something that I don't have. He's not going to sell me something I don't need, right?

Will: Right.

Josh: And he's done that throughout the years by being consistent, right?

Will: Right.

Josh: Because I found him after I did some work. I went to other places and other people were trying to tell me I needed work I didn't need.

Will: Right.

Josh: Are you seeing a trend here maybe we could copy, and that's my point.

Will: Right.

Josh: Because you can do the exact same thing in this business man. William trust me on this, refine your sales script.

Will: Right.

Josh: Think about ways you can add value to your commodity, what you're thinking someone can buy from anywhere, I'm telling you there's a reason they would prefer to buy from you, you just have to figure out what that is, bundle into a nice pretty little package and this money problem will disappear as far as buying inventory.

Will: Right. And then have the confidence to use it very responsibly the resources you have. So, like Josh's stated you may need to use your credit, right? That's what it's there for.

Josh: Right.

Will: But again, you have to make sure that you strategically thought it out, you understand what your plan is and you execute your plan to the tee, right? Being very responsible in your resources, right? This is where a lot of people get in trouble because they start to kind of, kind of, they don't, they get away from the plan.

Josh: Right.

Will: And they don't stick to the plan and a lot of times it just takes one mishap or one thing to get you off the plan and then then next thing you know you find yourself in a place you didn't want to be. So if you are going to be using a strategy that you're really not fond off in terms of using credit to establish your inventory of whatever you need just make sure you have the plan laid out and then execute the plan to the tee but strategically think about what that looks like, and which is why Josh is talking about and come out with a plan or whatever plan that is for you and execute that plan to the tee.

Josh: Man, I'll tell you.

Will: And you should be fine.

Josh: To that point I'll tell you this, right? One of the things that I learned from a mentor long ago when I was in a real estate business, right? He said actually one of the biggest blessings in business is not having money.

Will: Right.

Josh: Because it forces you to be creative.

Will: Exactly.

Josh: It forces you to think out of the box to solve problems that most people would just throw money at.

Will: Exactly.

Josh: Right?

Will: And you see that happening all the time and it doesn't matter how much money people have guys, we work around people who have lots of money, we've been around with people who've had tons of money, business guys, very savvy business guys and a lot of times we can see that difference like people who actually throw money at problems and try to figure things out sometimes, right With the money, as opposed to really taking the time to understand what the issue is.

Josh: Right.

Will: A lot of time like Josh said not having the money forces you to actually be creative and think about and really sit down and understand strategically what are three different ways I can actually attack this problem.

Josh: Right.

Will: As opposed to just one which is let's throw some money at it.

Josh: Right, exactly.

Will: You see it all the time.

Josh: Again, William what I would say is get your thinking cap on.

Will: Right.

Josh: Sharpen you pencil, right? And figure out a way to add value to the commodity that make people want to wait in line to buy from you as opposed to going to somewhere else.

Will: Exactly, exactly.

Josh: I don't know what strategy we actually have before we wrap up because we would have people commit to the product before it even came in.

Josh: Yeah.

Will: Right? And I think you might have mentioned that just now.

Josh: But that was a launch strategy that we did and we do that all the time here at the school, right?

Will: Right.

Josh: But it's the same thing where people pay in advance for things that they're waiting for.

Will: Exactly.

Josh: Right?

Will: And they are not going to go anywhere else, they're are going to wait on it obviously because now they have some skin in the game.

Josh: Right.

Will: Right? Now, I'm committed to it so to speak, because I paid for it. There was a transaction that happened.

Josh: Right.

Will: Right?

Josh: But in addition it was always bundled with some exclusive bonuses with some exclusive access that you didn't get if you were just a normal buyer, right?

Will: Exactly.

Josh: Because you were a early adaptor you got something special

Will: Yeah.

Josh: So I would challenge you to come up with the same thing.

Will: Yeah. We used to that with parts remember?

Josh: Yeah.

Will: As a down payment for the part, right?

Josh: Exactly.

Will: You would wait on it, right?

Josh: Right.

Will: So you can commit to it which means you're not going to go anywhere else, you're going to come back here ().

Josh: Exactly. Even if it wasn't paying in advance you at least pay a deposit that covers the cost of the part.

Will: Exactly.

Josh: And you can pay the balance when you pay back in.

Will: Exactly.

Josh: So there's a lot of creative ways. Again, put on your thinking cap, sharpen your pencil,

Will: Figure it out.

Josh: You can figure this one out.

Will: That was a great question William by the way, I really appreciate that question.

Josh: Yeah. Man, I think it was perfect because it fits right in there because clearly, right? It's this leads to sales conversation which is why I thought this is a really great question. Thank you for asking that William again, because I think a lot of people in the repair community are going to get some value out of that and hopefully we did a decent enough job of addressing that and you got some value of out of that as well.

Will: Yeah. So we're right at 45 minutes.

Josh: Yeah man, let's wrap it up.

Will: Let's wrap it up. Guys thanks for the questions, thanks for joining us again. Where do we want people to go and check us out at Josh?

Josh: cellularrepairschool.com

Will: That's right.

Josh: Obviously, you're listening to this podcast. If you know where to find this, but there's a lot more out there. Make sure you check us out on social, right?

Will: Yes.

Josh: Leave some comments, post some things, look for the #RepairRight, because

Will: RepairRight () I miss you ().

Josh: You miss out ().

Will: I was thinking too much man. I was thinking too much.

Josh: Yeah, I was leading you in on that one, but again you know again that's the whole goal of this thing guy is it's not just about how you do it, it' about doing things the right way.

Will: The right way.

Josh: Right? So again #RepairRight.

Will: #RepairRight, exactly.

Josh: And so next episode.

Will: Ask Will and Josh, see you guys on the next one.

Josh: We're out.

Will: Peace out.

About the Author Joshua Gray

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