Episode 012: 5 Stages of Repair Business Growth – Part 4 – Cellular Repair School

Episode 012: 5 Stages of Repair Business Growth – Part 4

ABOUT THIS EPISODE

In this episode Will and Josh talk about Stage 3 of the 5 unique stages of cell phone repair business growth, "Consistent Business."  They also answer an audience question regarding "When is the right time to add a new team member?"

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 overcome the challenges at Stage 3 which are servicing your customers and marketing challenges.

DOWNLOAD 5 STAGES INFOGRAPHIC:


AskWill+Josh 012 EPISODE TRANSCRIPT:


Will: Let's do it, I feel rusty this time. So you know what it is, you just got back from a long trip.

Josh: Yes.

Will: You have some business to take care off. Fun trip, fun trip, but work.

Josh: Yeah. There was a lot of work man, so we went out actually to a lot of different places. We went and visited Phoenix, we went and visited the disruption team.

Will: Yes, California.

Josh: Shout out to the #DisruptionTeam.

Will: Yeah, #DisruptionTeam.

Josh: I'm not going to #Disruptions.

Will: Right

Josh: But yeah the disruption teams that we were working on a secret covert project that you guys will find out about soon.

Will: Absolutely.

Josh: With our software development team that is super exciting. Man, it's really going to make some major differences.

Will: Yes. Chino Hills baby.

Josh: Out of Los Angeles. Yes, sir.

Will: Shout out to Chino Hills.

Josh: Los Angeles, shout out to Cali.

Will: Yup. Shout out.

Josh: Right?

Will: Shout out.

Josh: I was going to try my Tupac California love boy, but I don't think it would have sounded right.

Will: Yeah, yeah, yeah.

Josh: You need a top box on that one.

Will: Right, right, right, right.

Josh: So yeah, but you know it's good to be back. I always feel like we say that every time, but this one actually really does too because it has been a couple of weeks, right?

Will: Right.

Josh: And obviously for you guys listening there probably has not been a break in the shows that you're hearing, but for us there was a little bit of gap.

Will: Yes.

Josh: It's because we'll record multiple shows in one shot.

Will: Right.

Josh: And today this is coming on the tail end of quite a long trip that we were on.

Will: Yeah, yeah.

Josh: So good to be back man.

Will: It's good to be back.

Josh: It's a continuation of our stages of business series.

Will: Yes sir. Which stage are we on?

Josh: Today, we're going to be talking about stage 3. So I guess we got to do a real quick recap.

Will: Let's do it.

Josh: Right? Depending on where you are.

Will: Yeah.

Josh: If you're jumping in, this is your first episode into the stages of repair businesses. What this is all about is just talking about what you're going to expect and these are stages that occur in any business, but specifically what we've seen throughout the years in repair businesses.

Will: Right.

Josh: Because there are things that are similar regardless of the type of business that you're running, so whether you have a retail shop or you're doing refurbishing, whatever it is there are similarities that run across that we've seen throughout the years, right? In our coaching and training, all these things that we've done in our own businesses.

Will: Right.

Josh: So, there is 5 stages. Stage 0 is ideation, basically it's just an idea, right?

Will: Yes.

Josh: So we've kind of broken it out to where we talk about the number of employees we typically see, the number of sales that you do in annual basis, the number of businesses that are like that in the US.

Will: Yes, which is always the most ideation ().

Josh: Right, exactly, yeah. And the amount of members on your team, and then usually the biggest hurdles for you to grow to the next stage or the pain points that you feel while you're in that stage.

Will: Yes.

Josh: So, starting at stage 0 we showed about a hundred million plus, right? And this just means it's an idea, this is isn't a real stage.

Will: Yeah.

Josh: But it really is.

Will: Your contemplating.

Josh: Right? Because you're just, you're trying to figure it out.

Will: Yes.

Josh: You want to do something maybe you're looking for side gig.

Will: Yes.

Josh: You want to start a new business, whatever it might be, right? You want to buy a franchise, whatever, right?

Will: Yeah.

Josh: Software company.

Will: Yeah.

Josh: It doesn't matter.

Will: Right.

Josh: It's an idea, you're doing research to figure it out. So your biggest hurdle at this stage, education.

Will: Education, right.

Josh: Because you got to know what you're doing, right?

Will: Yes.

Josh: So, stage 1 is what we call the onetrepreneur or the solopreneur. Usually it's going to be a team of one, and it really is a range of anywhere from nothing per month up to about 10 thousand dollars a month.

Will: Right.

Josh: And we broke that into two pieces actually because what we've seen in this business is this is a very good gig economy business.

Will: Gig economy.

Josh: Right?

Will: That's everything.

Josh: Gig economy.

Will: Gig economy.

Josh: Gig economy.

Will: Everything is going to gig economy, it is.

Josh: Right?

Will: It is.

Josh: And this is an awesome business for it. Shout out to the guys at Icrack and Pulse and all of those cats that are going to be doing and creating some cool tools for the guys in the gig economy.

Will: Absolutely.

Josh: But half of the stage is dedicated to that because as a gigger, you're just trying to do it on the side.

Will: Right.

Josh: Right? Maybe you're just dipping your toes in and we call it toe dipper.

Will: Toe dipper, it is.

Josh: In some of the classes that we teach, right?

Will: Exactly.

Josh: You're dipping your toes in, it's a low barrier of entry and you're making some money on the side, maybe trying to figure out if you're going to go full time or maybe just that's all you want, just some money on the side.

Will: Right.

Josh: Right?

Will: Yeah.

Josh: There's a tipping point in the middle though. and it's usually that 4 to 10 thousand dollar mark which is when you got to make, you got to poop or get off the pot.

Will: Yeah, right, right.

Josh: You know I got () I say poop poop.

Will: Yeah, yeah, yeah and you said that get off the pot.

Josh: Right. Yeah, I'm used to saying this right now, right?

Will: Poop or get off the pot.

Josh: Poop or get off the pot.

Will: Yeah, yeah, yeah.

Josh: Right? But this is the tipping point because you're going to run into issues where you can't continue to operate your business the way that you are as your revenue increases, right?

Will: Right.

Josh: So either you got to dedicate yourself fulltime if you want to do that or you got to say you know what let me pump the brakes, step back, I'm just going to stay on this gig economy service, side gig side.

Will: Right.

Josh: So that's that distinct dividing line that we have in the middle there.

Will: Decisions that need to be made

Josh: Stage 2 is what we call new employer. Usually got 2 to 3 employees, you're doing about 100 to 300 thousand dollars a year in revenue. There is 1.7 million of these businesses in the US today, and a lot of the times it will be yourself and maybe a partner or an assistant or something like that you got helping you out.

Will: Right.

Josh: Biggest challenge in this stage is sales, right?

Will: Yeah.

Josh: It's understanding how to sell, right? Defining your sales and again we're not going to deep dive into those stages.

Will: Yeah.

Josh: Go back and listen to

Will: Yeah, you can go back and listen to the previous episodes

Josh: Previous episodes, we got a link below.

Will: Right.

Josh: Links to those episodes, so you can learn more about it.

Will: Right.

Josh: Today, we're going to do a deep dive into stage 3 which is what we call a consistent business.

Will: Right.

Josh: Right? And this one is sexy because man, I feel like we were stuck in this stage for a while. This was a hard one for us to breakthrough.

Will: Well, I think this stage has a lot of, there's a lot of learning in every stage.

Josh: Yeah, for sure.

Will: Right? I honestly think being at what we've experienced this stage that this stage is by far the most in terms of what you need to learn, and I say that because I think this stage sometimes you have to make decisions that you aren't necessarily clear about what direction you need to go in.

Josh: Right, right.

Will: And that's what makes this stage

Josh: You're a firefighter still.

Will: Yes.

Josh: That's the biggest part, right? You're still fighting a lot of fires.

Will: Yes.

Josh: You're not proactive, you're very reactive in business at this point.

Will: Right, right. And if this is your first business dealing or not even dealing, but having experience with say employees or there's things you have to definitely learn in this space that are learning curves, right? And I always tell people you got to be open to learn. One thing, you got to be open to learn because if you think you know it all, right? What you're going to find is when you get particularly in this space

Josh: You're going to get served.

Will: You're going to get served, you're going to learn a lot of things because the people that you start to bring into your space is going to teach you a lot things that you need to learn and understand, so.

Josh: Yeah. Before we dive too deep let's kind of talk into what stage 3, what it's like.

Will: Yeah, yeah, for sure.

Josh: So what we see typically in stage 3 usually your team is about 4 to 10 employees, so you're bigger, right? You've outgrown the new employer stage, you're a consistent business now.

Will: Right.

Josh: So you got about 4 to 10 employees, your revenue is usually between 300 thousand dollars to a million dollars, and guys these are just rules of thumb.

Will: Yeah.

Josh: I'm not saying that these are hard core like set targets.

Will: Right.

Josh: We've seen different business that are actually at different stages that can have higher revenue, some that are higher level stage business that have lower revenue.

Will: Exactly.

Josh: So

Will: So, it's just no guarantee. Yeah.

Josh: It's just kind of a general thing that we've seen throughout the years.

Will: Right, exactly.

Josh: But usually the average is about 300 thousand to a million dollars a year in revenue. The US right now there is 1.9 million of these businesses.

Will: Right.

Josh: Right? So you notice that the number is significantly shrinking.

Will: It's decreasing.

Josh: Right?

Will: Yes.

Josh: It gets much much, you're rising to that top 1% of businesses and people as you move up stages.

Will: It's fine because you said it's decreasing, but at the same time you're rising.

Josh: Well, you're rising.

Will: Right, that's my

Josh: you have competition

Will: That's my point.

Josh: or businesses your size is decreasing.

Will: Exactly, exactly.

Josh: Right?

Will: Exactly. Yeah, I want people to understand that concept.

Josh: Yeah.

Will: That you're rising, you're going in the right direction even though it's harder to get to this level, right?

Josh: For sure.

Will: And there are less people who actually get to this level because of the difficulty, but that means you’re going in the right direction.

Josh: That's right. And at this stage your team is one team.

Will: Right.

Josh: Right? So, I'll dive back into this and then your biggest hurdle is marketing and service. So, we're going to kind of dive into a couple of these challenges at this point. So again just kind of remember I found that actually the revenue targets for this business, for the repair service business is like almost dead nuts on man.

Will: Right.

Josh: Like it's a pretty good target for the stage. I've seen some businesses that systemize a little bit better and can make things move faster.

Will: Right.

Josh: So they can do things a little more efficiently, but usually the revenue target is a good tell tail sign.

Will: Right.

Josh: But that one team thing I think is awesome, right? Because again it's 4 to 10 employees.

Will: Right.

Josh: Usually you guys are splitting like a pizza or two.

Will: Right.

Josh: Right?

Will: Right.

Josh: So, it's you as the founder if you are the founder and then again I don't know who is listening

Will: Right.

Josh: Because I know there are people from all different walks of life's listening to this, so we're just assuming that it's the business owner, right?

Will: Right.

Josh: At this stage that is listening, but a lot of times it's the business owner.

Will: Right.

Josh: That is still managing all the teams. They're the main leader, the main manager.

Will: Right.

Josh: Right? You don't have any sub-managers yet.

Will: Right.

Josh: Right? So, it's what I say goes.

Will: Right.

Josh: It's very easy to manage kind of, right? And I want to talk about this a little bit because it's easy to manage kind of because it's a small enough team.

Will: Yes.

Josh: Of 4 to 10 people.

Will: So you can still touch these guys?

Josh: You can touch them, you're dealing with them, you probably, you might be sitting next to them.

Will: Right.

Josh: You're bumping shoulders with them every day.

Will: Or you're going out, you're having a team building, whatever it maybe.

Josh: Right, right.

Will: Yeah.

Josh: So, but at the same time there are some challenges.

Will: Yes.

Josh: In managing because what we've seen throughout the years, again so when we talk about the biggest hurdles, biggest hurdle is marketing and service.

Will: Yes.

Josh: So in fact let's dive into what that means exactly.

Will: The biggest hurdle?

Josh: So we can start to talk about the problem that we see in the team.

Will: Got you.

Josh: So marketing service means, right? In order for you to grow, the pain you're going to feel in this stage is the fact that you don't have professional marketing that is expanding because if you remember in previous stages, stage 1, it was about leads.

Will: Yes.

Josh: You didn't have your leads right.

Will: Right.

Josh: And then maybe when you move into stage 2 you got the leads, but now I'm having a hard time converting these bad boys.

Will: Right.

Josh: So you got to get your sales strategy together.

Will: Yes.

Josh: Right? That conversion.

Will: Yes.

Josh: Now you should have a little bit more smooth of a system, but you maybe you've extended all of your resources.

Will: Right.

Josh: As far as like word of mouth. Man, I've post it on my social media, I've let everybody know I'm doing cellphone repair.

Will: Yeah.

Josh: I'm passing flyers out.

Will: Right.

Josh: I'm giving pizzas to the T-Mobile guy down the street.

Will: Right.

Josh: Right?

Will: Yeah.

Josh: There's only so much business that's going to get you.

Will: Yeah.

Josh: This is a part of my problem, right? That you're going to feel here. It's because in order to blow past this 1 million dollars stage, you got to really focus on some real professional marketing to really start to drive that lead.

Will: Lead generation ratio.

Josh: The lead generation ratio. Really, that's the right term.

Will: Yeah. The lead generation.

Josh: The lead generation and your sales funnel to really start to drive and put that to overdrive, so your numbers can increase.

Will: Right.

Josh: But at the same time part two of that problem is service.

Will: Right.

Josh: Because guess what you're having? You're having some pain in your ability to service the people that you are getting.

Will: Yeah.

Josh: Right?

Will: Yeah.

Josh: So this is that chicken and the egg or the cart or the horse.

Will: The cart or the horse, yeah.

Josh: Right?

Will: This is a place where it can be really a trying for you, because like Josh said you really got to make that decision as sometimes and this is what I say before sometimes you got to make decisions about the money you're going to spend and that can be difficult because you don't really know what the return on that is. It's what we called discovery a lot of times.

Josh: Yeah, yup.

Will: And what you don't want to do is you don't want to you know be in a discovery space where you're spending a lot of money on marketing or you make the decision because we talk about this on one of the previous shows where we chose the wrong marketing tactic for what, I think it was the groupon that we talked about, where we had some learning.

Josh: Yeah. It was a lot of learning.

Will: It was a lot of learning curve.

Josh: It was a lot of learning, yeah.

Will: And it was a chance we took, it looks like it was the right thing to do, but at the end of the day what we realize is that you know we've bet out for more than we could do. So, the marketing kind of work, but the bet, the fallout part was it was a different type of customer, right? Number one.

Josh: Significantly different, yeah.

Will: Significantly different that weren't used to and that we didn't know and so that was a learning curve not to say that the groupon marketing strategy

Josh: Was bad or ineffective.

Will: Was bad or ineffective.

Josh: Yeah, it was just what I don't realize at the time when we launched those campaigns was I didn't understand about customer personas.

Will: Right.

Josh: Or what we avatars.

Will: Right.

Josh: Right? It's the type of customer that you know your business does.

Will: Yes.

Josh: Like for us at that time.

Will: And if I'm not mistaken I think this stage was that experience.

Josh: It was this stage.

Will: It was this stage.

Josh: It was this stage, yeah. We were at 6 employees.

Will: Right.

Josh: Right? In our first location we had 6 employees.

Will: Yes.

Josh: We launched the groupon, right?

Will: Yes.

Josh: Which is marketing, right?

Will: Because that's what we thought we needed to be.

Josh: Right.

Will: And that's where we needed to be.

Josh: Right.

Will: We needed to garner more customers.

Josh: More awareness.

Will: Yeah, more awareness.

Josh: Right? We're just trying to bring more awareness to what we did.

Will: Right. And groupon just makes sense.

Josh: Yeah.

Will: () awareness.

Josh: And back then the groupon was just, nobody knew about it.

Will: Right.

Josh: So it was still kind of early stage and it was really effective.

Will: Back then, yeah.

Josh: Super effective.

Will: It worked in regards to getting us that attention.

Josh: It did, but it wasn't the kind of attention we wanted, right? So, and that was part of it, right?

Will: Part of the learning process.

Josh: Yeah.

Will: And for us what it was is we were in a very affluent area, right? Where the median income is about 90,000 dollars.

Will: Right, yeah.

Josh: Our customers were used to a certain type of service experience and we have been servicing that type of customer for a little over a year and a half or so.

Will: Right.

Josh: So we really got to know this customer and we really had our customer service dialed in as far as dealing with that type of persona. Groupon brought a completely different type of persona in that that I wasn't even aware of.

Will: Right.

Josh: And it rock our business man.

Will: Yeah.

Josh: Like it really we ended up with a lot of really shitty reviews on Yelp.

Will: Yeah, because we weren't ready.

Josh: We didn't know, we didn't know what we're signing up for.

Will: It was a lot of discovery.

Josh: Yup. We didn't know what we signed up for.

Will: But this is the challenge of this particular stage.

Josh: It is.

Will: Right?

Josh: Because what did that do, right? We put a focus on marketing.

Will: Yes.

Josh: We were unable to service the customers.

Will: Exactly, marketing and service.

Josh: That's why, right?

Will: Yes.

Josh: Because that we didn't know oh we probably need to have, I didn't realize it was going to generate that many leads.

Will: Right, right, right.

Josh: And the hard part was it was very low margin leads.

Will: Yes.

Josh: Right?

Will: Yes. It was a volume play.

Josh: It was a volume play.

Will: Right.

Josh: Without a () tell you exactly what I did was stupid, right? I didn't know much. I wasn't savvy, I'm walking you back to like 2009 right now, right?

Will: Right, right, right.

Josh: But we didn't have a good upsell strategy, right? So it was about bringing awareness without realizing that these are not repeat customers anyways.

Will: Right.

Josh: These are deal shoppers.

Will: Yes.

Josh: Right? So the job is with a deal shopper is to service them and wow them, but it's also to put the ticket price.

Will: Right. And find the money to get repetitive customer.

Josh: Right, exactly.

Will: Yeah.

Josh: So again it's about putting the ticket price, so it's attached to what we call attached rates.

Will: Yes.

Josh: Where you have to attach other stuff.

Will: Right.

Josh: Attach more accessories, attach screen protectors, attach whatever it might be.

Will: And to try to make them a repeat customer, right?

Josh: It's hard. Repeat customer in repair business is tough, right?

Will: I know it's hard. It is, it is.

Josh: Because it's not like an oil change business, right?

Will: Right.

Josh: Where you got to comeback in for standard maintenance.

Will: Right.

Josh: So, we have strategies today that we're able to do that, but back then we weren't savvy enough to know how to do that, right?

Will: Right. Because you still want your customer even though it's that type of business, you still want the customer, you want the customer to be have you on top of mind, right?

Josh: Yeah.

Will: Top of mind when that problem does happened, right? The first thing they think about is you when they do have their problem or when they have that conversation with someone else.

Josh: I would actually argue that they want you, you want them, you want to be top of mind whenever they think of their device.

Will: Yeah, yes.

Josh: If I need anything with my, like my car, right?

Will: Anything.

Josh: Anything  on my car.

Will: Yes.

Josh: Boom, Kyle Warrick is the guy I call.  ().

Will: Right, that's anything.

Josh: Right? Boom, anything.

Will: That's tire under the hood.

Josh: Unless I'm going to buy like (), because that's not his thing, right?

Will: Right.

Josh: But other than that like service needs or an issue.

Will: Yeah.

Josh: Kyle top of mind.

Will: Right.

Josh: That's where you need to be, right? It's man, there's something, I'm not sure, top of mind let me call these guys. That's the goal where you're trying to drive your service.

Will: Right.

Josh: So to kind of bring it back, again this is part of that struggle.

Will: Right.

Josh: That you really got to figure out and it is this cart and horse dance you got to do between figuring out how to service your customer.

Will: Right.

Josh: Because the other problem that we experience during this stage and then I see with a lot of our students is a lot of times maybe you're finally hitting your profit targets.

Will: Right.

Josh: And then it's hard to decide because how do you drive your sales up.

Will: Right.

Josh: Do you bring in another technician?

Will: Yeah.

Josh: Or do you focus on marketing and not have the ability to repair all the devices.

Will: Right.

Josh: Right?

Will: Yes.

Josh: So this is that kind of delicate dance that is hard to do because it's scary.

Will: Yeah.

Josh: Because the last thing you want to do is pissing people off.

Will: And that's the thing, pissing people off is a great segway because one of the things I used to always talk about with our students is the customer avatar of who you're going to be serving and what the expectation is for these guys and what you guys got to understand and you probably already do, I'm sure you do, but in the cellphone repair space people and their cellphones are very, the people are very passionate about

Josh: What do we call it nomophobia?

Will: Nomophobia.

Josh: Nomophobia, it's a real phobia. Look it up.

Will: Yeah, it's a real phobia.

Josh: It's a real phobia of being separated from the device.

Will: Nomophobia.

Josh: Nomophobia

Will: Yeah, I have no phone. It's a real phobia and what that

Josh: Nomophobia.

Will: Nomophobia. And what that is is people have real, they have real anxiety when they're without their device. You guys can probably relate to this. I used to say in the classroom, right? If you guys were going to work and you're 15 minutes away from working you're going to be late and you didn't have your cellphone, would you turn around and go get it, right? Or would you continue to go to work and be without it all day, right? It gives people perspective, right? Can you be without your phone all day or would you rather be late to where you can go back and get your phone, right?

Josh: Right.

Will: That's where we are in this space and that your customer. Your customer is that person who can't be without, when we talk about getting pissed off, right?

Josh: Right.

Will: That's who you’re going to be serving. So this decision you got to make and take it back as to who you're going to be serving and what the expectation is in terms of turn around, in terms of how you serve, you know all those things they weigh very very heavily in decisions you have to make about taking on more responsibility and being able to provide the service to that responsibility. You know what I mean?

Josh: Yeah, ().

Will: Because you can take more if your capacity is low, right? We're going to talk about capacity. If you capacity to turn around devices is very low, right? It doesn't, I mean at the end of the day, yeah, you're garnering more customers and your marketing is working, but at the end of the day is that going to be successful for you if you can't provide the service in a timely manner.

Josh: Right.

Will: That's a big decision.

Josh: It's a very big decision.

Will: Right?

Josh: And it's critical, it's a () to growth.

Will: Right.

Josh: And it's a struggle.

Will: Yes.

Josh: And again it's funny because we were stuck in this stage for way longer than I, looking back on it at the time it felt like it was normal,

Will: Right.

Josh: Looking back on it, it was like man, that's kind of stupid. How long we were stuck in that stage.

Will: Right.

Josh: But I didn't know even though I was getting mentors from other businesses, I wasn't asking the right questions.

Will: Right.

Josh: Right?

Will: Yeah.

Josh: I wasn't asking the right questions to figure out how to get unstuck from that stage.

Will: Yeah.

Josh: Which is why we remain stuck there for a long time,.

Will: Right.

Josh: Because none of us was savvy enough to know how to really push through that.

Will: Right, right.

Josh: Because I had then other businesses.

Will: Right.

Josh: But this business was unique in that way that I didn't know how

Will: Yeah. The customer is a little different in this business.

Josh: Yeah man.

Will: The expectations are very high, so what you say they're going to hold you to, for sure, right? and how you sell it, they're going to hold you to. And so that's what I used to always teach our students to understand before they even get in this game, pretty much at any level, your expectation is going to be the same in regards to your customer. They're going to have this expectation that I need my device and I need it today, right? No more phobias or ()

Josh: It's so real.

Will: It's a real phobia for people, right? The anxiety goes up, the stress level goes up when you're not connected because at the end of the day what it is, is we're connected as a society now and so when you don't have your cellphone, if you really think about it like your kid's calling you or your wife calling you or your husband calling you, right? And you don't have that contact or that connection that's like a lifeline is no longer there, right?

Josh: Right.

Will: And so that can be highly stressful when you think somebody is trying to contact you and they have no way to do so and they don't know what the reason is, that's a nomophobia.

Josh: Right. It's stressful on that side.

Will: Stressful, exactly.

Josh: Right?

Will: Yes.

Josh: Because I'm trying to call you all day, why aren't you answering your phone?

Will: Exactly.

Josh: For sure.

Will: So we got to get back up as soon as we can.

Josh: Right.

Will: Right? And so the expectation for the customer is very high and so and the decision making process with we're getting more leads, we're getting more customers, what do we do now?

Josh: That's the challenge.

Will: What do we do now?

Josh: Again, that's the challenge, right?

Will: What would you do?

Josh: Because if you've got a team of 10, no matter what it is in this stage there's going to be inefficiencies.

Will: Right.

Josh: Right?

Will: Yeah.

Josh: You're not big enough yet to have efficiencies of scale.

Will: Right.

Josh: Which we talk about, right? And I've seen it in my real estate business. It was the same problem, but this business it shine likes a star on a cloudy night, man, in the middle of ocean, like it lighten everything's up.

Will: Yeah.

Josh: The inefficiencies of not knowing how to drive efficiencies to grow, right? So, we want to give you just a couple of tips on maybe what this could be because again it's going to come down to your ability to do professional marketing to drive your leads that are bigger than what just word of mouth is in your normal campaigns, right?

Will: Right.

Josh: And service to customers that you are driving in, because again it's the cart and the horse, do you want to keep pushing leads in if you can't service them?

Will: Right.

Josh: Right? And there some ways that you can handle that and in fact that when we came up with the idea of the expedite fee.

Will: Right. The expedite fee, right?

Josh: Expedite fees. So, explain that to you, right? I don't know how many people out there implement this in their business today, but I swear we were the first one to do this in this business.

Will: Well, I can tell you we worry before you explain what it is, is that because again teaching, right? It was crazy because we've taught thousands of people, right? And one thing that was consistently the same is even when we taught people who are already in the business, very often I would say 90 to 95% of the time they had never even thought of

Josh: Some of the business tactics.

Will: The business tactics. They have never even thought of expedite free like oh, they would be like oh, that's a great idea and I'm talking about people who have been in 2, 3 years.

Josh: Right.

Will: Right? But they had never even thought about how effective, right? Or how to even use to their advantage in terms of service, right? How an expedite fee could be use, right?

Josh: Right.

Will: To benefit. So, go ahead and explain what that is. I just want to know it's not.

Josh: Well, so I'll keep this short.

Will: Yeah.

Josh: This is just one little tidbit that I'm going to throw () out there for you guys because this is what one of our aha moments was.

Will: Right.

Josh: Right? I remember sitting around thinking about it, because I'm like okay, one thing that I realize was that customers didn't drop their phone and rush right into the store.

Will: Right, right.

Josh: Yeah, they wanted it back when they gave it to us, but they would walk around sometimes for weeks and months with a broken phone.

Will: For sure.

Josh: Right?

Will: You guys see it all the time.

Josh: So, what I started to realize is that we were doing a good enough job that we were becoming in demand, right?

Will: Right.

Josh: And that goes back to, with some of the other lessons we teach as far as you don't have to be a commodity guys, remember people buy you.

Will: Right.

Josh: They're not buying your screen replacement.

Will: That is true.

Josh: Right? And if it's just price, you need to get some coaching, you need to do something because there's way more ways to win in price shopping.

Will: Right.

Josh: Believe me, because you're going to go out of business quickly. So again our focus was never to price chop. I actually didn't even really price chop my competitors at that time, right?

Will: Yeah.

Josh: We didn't have a whole lot, but they started to pop up, but it was always irrelevant because of the way that we managed the expectations and just the way our USP was.

Will: Right.

Josh: Right? So, it became clear that what we could start to do was hey, these guys were already walking around with a broken phone. So, it wasn't like they needed a phone or their phone back, they just need it a phone back.

Will: A phone.

Josh: They needed something. So we implemented a phone loaner program and we would charge an expedite fee.

Will: Right.

Josh: Right? So we would charge for phone loaners, right? If people wanted the phone loaner, we give them the options to pay for phone loaner and then also we've been charging expedite, so we'll say hey, this is where we're at in our queue, right, based on our how much work we have right now and again this depends on where you're at in your business, but for us at the time this is what made sense because sometimes we would run a two day turnaround.

Will: Right.

Josh: Right? Which again is funny because it would seem like it would make sense to add a ticket at stage, but it's these bubbles, right? And that's what hard because it's not always that way.

Will: Right.

Josh: Some days you have heavy whipped and some days you have lower whipped.

Will: Right.

Josh: Right? So it's trying to crush that down to where it's more efficient. So, what we ended up doing was adding this expedite fee for the customers who absolutely positively wanted it repaired and they wanted to go the top of the line.

Will: Right?

Josh: We would charge them $35.

Will: Yeah.

Josh: Right?

Will: And that would jump you in a queue.

Josh: We'll get you taking care in an hour.

Will: Yes.

Josh: Right? If other than that we'll put you in queue and you'll have it back tomorrow or I can get you this loaner or whatever it is. Man that increase our ticket sales significantly.

Will: Yes, yes.

Josh: Right? It took a little bit of coaching with the sales staff and the text on how to deliver that message the right way.

Will: And what repairs actually qualify

Josh: Right. Because not every repair, we couldn't take something in that we weren't clear that it was a good a candidate for this because you're going to open yourself up for wounds.

Will: For sure.

Josh: If you take the wrong candidates.

Will: It has to be, yeah you have to qualify, you have to understand what repair qualify for expedite. Not all repairs are equal.

Josh: Yes, correct, correct, but that was one of the things that we did that allowed us to increased the margin on the repairs.

Will: Right.

Josh: It didn't really increase our capacity, so to say, right?

Will: Right.

Josh: We weren't repairing more devices.

Will: Right.

Josh: But at least we were able to get more for the repair.

Will: Right.

Josh: Right? Because again it's chicken and egg.

Will: It is.

Josh: Right? I need revenue to pay people, right?

Will: Yes.

Josh: But I need people to generate revenue.

Will: Right.

Josh: So it's this delicate dance you got to do.

Will: Right.

Josh: So, stage 1 for us was to increase revenue by expedite fees.

Will: Right.

Josh: Stage 2 was to really get efficient on focusing on our employee training, right? Because when we really figure out that let's analyze, let's break down and analyze what our staff is doing and how can we really get more efficient about making sure we're turning and burning more repairs, right?

Will: Right.

Josh: That we're getting more out, right? More with less.

Will: Yes.

Josh: So it was really putting the focused on that as well.

Will: Right.

Josh: And those two things is what allowed us to break through that stage.

Will: Absolutely.

Josh: Obviously there are a lot of details inside of that.

Will: Yeah, yeah.

Josh: But that's in an essence that's really what it is. It's either more efficiency or more revenue generation.

Will: Right, right.

Josh: Right? Without having to do more.

Will: And that strategy, it was brilliant because it did, it increased our month to month and annual sales

Josh: Significantly.

Will: Without the

Josh: We had a 35% uptake on those expedite fees.

Will: Right.

Josh: Right?

Will: Exactly, yes.

Josh: And you're talking about the average ticket was like 110 bucks adding $35 on to  $110

Will: Exactly.

Josh: It was a significant increase.

Will: Without taking all

Josh: No addition cost.

Will: Exactly.

Josh: No addition cost.

Will: Exactly.

Josh: It was a significant increase.

Will: And that's the kind of concept, that's the kind of thing like that you see a lot of times in business is or the bad thing or the learning experience or the learning curve or what I'd say is the inexperience, right? Is people often throw money at every problem, right?

Josh: If you have money to throw at.

Will: If you have money, but even then and even if you got money to throw at, that is not the right way to go about it because you end up losing the efficiency, right?

Josh: Right.

Will: It still can be efficient, right? To throw money at it. You're hiring people because you think oh, you're throwing money, whatever it is you're throwing money at to solve a problem and a lot of times that's not or we've experienced that this is a great example of that, right? Where we're like hey, we need to, obviously we need to up the ticket.

Josh: Yeah.

Will: We need to,

Josh: We got to squeeze the juice.

Will: We got to squeeze the juice, right? And it wasn't to throw necessarily go out and hire two more technicians to cover, to do it because at the end of the day you're spending more to make more. So you're breaking even in regards sometimes.

Josh: If not losing.

Will: If not losing, right? So you got to be creative. I did.

Josh: I did that, I did that too guys. I did that too. I tried that, I hired technicians prematurely.

Will: Right.

Josh: And I loss money.

Will: Right.

Josh: Right? And then I had to let people go because it wasn't working.

Will: Right.

Josh: And then I had, it was a painful period.

Will: Yes.

Josh: I mean honestly it was one of the most painful periods in this business.

Will: Yeah.

Josh: Was figuring out how in the world that we breakthrough this. I wasn't working with like a 2 million dollar budget man, you know what I mean?

Will: Right, yeah.

Josh: So, I was trying to figure out how to do it efficiently and make the business pay for it.

Will: Yeah.

Josh: () this thing.

Will: Great learning experience though.

Josh: I got the wounds to show for. Yeah, but it was. It was a transitional moment that I think is important for every business again that every business goes through this.

Will: Yes.

Josh: So, those are couple of the examples.

Will: Yes.

Josh: I think we got to transition to our question for tonight.

Will: Yeah, yeah, because we're almost, we're 30 minutes in.

Josh: Yeah.

Will: So we typically do a question right at about 30 minutes, right? So we got to transition to our question, but we hope you guys really enjoy that, that's stage.

Josh: Yeah. Hopefully you got something out of that.

Will: Yeah.

Josh: And I feel like there was some really good meat there if you really unpacked that.

Will: Yeah, yes.

Josh: And again at the end of the day it's just about identifying the stage that you're in.

Will: Right.

Josh: Understanding the problems that you do have, right?

Will: Right.

Josh: Because you got to pull your head out of the sun.

Will: Right.

Josh: Right? To make sure that you can see what's happening. The sooner you can see what's happening the sooner you can start to focus on putting some solution in place.

Will: Absolutely. All right, so with that being said let's go ahead and transition into the question of the evening.

Josh: All right.

Will: Q and A.

Josh: Let's see if I could find it. Okay. So tonight's question and again we've been really fortunate because you guys are submitting questions on

Will: Yeah.

Josh: Again, go to the, on cellularrepairschool.com

Will: Yes.

Josh: Under blog, there's a big orange button that allows you to submit your questions.

Will: Right.

Josh: And if we feel that your question will resonate with our topic or with the audience, we'll select that and there are some special prices that we give you as well for being selected.

Will: Absolutely, yeah.

Josh: So tonight's question comes from Justin Raglan.

Will: Yes.

Josh: Justin asks or he says, I currently have a repair store that I'm handling the front and I have two repair technicians working in my shop, but I feel I'm thinking about hiring a person to handle the customers coming in the door for sales, but I don't feel like right is the right time. How do I know when I can afford to add another person to my team?

Will: Great question.

Josh: Right?

Will: That's a great question.

Josh: Exactly. The reason we pick this is because it's the right question for tonight's topic.

Will: Yes, yes.

Josh: And man that's a

Will: That's a tough question.

Josh: That's a tough question.

Will: It's a good question, but it's a tough question.

Josh: It is. So again so we'll kind of back it up and break it down. So, Justin is handling the sales. So, he's a team of three.

Will: Yes.

Josh: Two techs, he's doing the sales.

Will: Yes.

Josh: He feels like the time is right to add someone.

Will: Right.

Josh: But at the same time he doesn't know if it makes sense financially yet to do it.

Will: Right.

Josh: Right?

Will: Yeah.

Josh: Man, Justin I'll tell you

Will: It's hard without seeing, without

Josh: The exactly details.

Will: Yeah. I don't think we have enough detail.

Josh: We don't. So all I can do is talk from my experience.

Will: Exactly.

Josh: Right?

Will: Exactly.

Josh: So, again take it or leave it.

Will: Yeah.

Josh: Hopefully you get something out of it.

Will: Right.

Josh: But from my experience here's how I would do it when I was in your shoes and I  have been in your shoes like we're just talking about.

Will: Right.

Josh: Man, I feel like that today sometimes on.

Will: Right.

Josh: It never changes.

Will: Yeah.

Josh: There's always these contraction and expansion periods in your business to where it's hard to know if it's the right time to add someone.

Will: Right.

Josh: So, let me give you a couple of rules of thumb, right?

Will: Yeah.

Josh: One thing I learned from one of my accountants was it was all about profit margins, right? So when you look at your net profit, right? If you're getting anything above 10 points, right? And again I know this doesn't sound sexy to a lot of people, right?

Will: Yeah.

Josh: When you're talking about you know a business that does ten thousand dollars a month, I would say.

Will: Right.

Josh: Right?

Will: Yeah.

Josh: Even though this is stage 5, so let's bring it there.

Will: Right.

Josh: 30 thousand dollars a month.

Will: Yeah.

Josh: If your business is doing a net profit of 3, keep in mind though that that means that that profit is paying everyone in the business including yourself if you work in the business.

Will: Right.

Josh: That profit is not part of your salary.

Will: Right.

Josh: Your salary is calculated for already. So this a big tip too, right? You can put a lightbuld at this one, because this is another mistake we see a lot of people do in this stage.

Will: Right.

Josh: Is they fail to put themselves on payroll, right? You got to make sure that you are on payroll so your business is used to spending that money, so it's easy for you to pull out and then slap somebody else in that slot.

Will: Right.

Josh: Right? And you can move on.

Will: Right.

Josh: So you can either grow a new position for yourself or you can just go to taking that percentage of profit.

Will: Right.

Josh: Which in this case if we're looking at 10% profit, it will be three thousand dollars amount.

Will: Right.

Josh: Right? Not the sexiest sometimes.

Will: Yes.

Josh: I actually think it's really great. To be honest with you again, you know it's interesting being in organizations like EO and you see these, even if you watch CNBC, you see profit margins of businesses.

Will: Right.

Josh: I was just watching something on Krispy Kreme and Krispy Kreme operates on like a 4% profit margins.

Will: Yeah.

Josh: You know.

Will: Sounds like a grocery store.

Josh: Well, no, but this is net profit.

Will: Oh okay, I got it.

Josh: This is net profit.

Will: I got you.

Josh: Right? Not gross profit margins.

Will: Not gross profit margin. Yeah.

Josh: This is profits after what trickles down to the bottom.

Will: Right, yeah.

Josh: Right?

Will: So this is everything they've made () everything spent, after all bills are paid?

Josh: So to recap that conversation. Exactly.

Will: Yeah.

Josh: That's take home, that's what we can distribute to our partners, our shareholder, if you're the sole guy, that's the extra that you get, right? Because you're wearing two hats.

Will: So, Krispy Kreme operates of a 4%?

Josh: Yeah, it's like 4%. 4 and some change, right? So a lot of these big fortune 500 companies, yeah they are generating 500 million dollars a year, 700 million a year.

Will: Yeah, yeah. But their cost is heavy.

Josh:  Yeah. Man, I literally maybe they're only taking home 18 million dollars in profit.

Will: Right.

Josh: You know what I mean?

Will: Yeah.

Josh: So you got to keep these things in mind.

Will: Yeah.

Josh: So, here's the rule of thumb. Anything above 10%, actually anything above 15% take it while you can get it.

Will: Right.

Josh: But that 10 to 15% window, that is your opportunity, right? So you have to decide how greedy you want to be.

Will: Right.

Josh: Do you want to take let's say you're at the 15% mark, you're in place where you can take 5 points, put it back in the business.

Will: Right.

Josh: Right?

Will: Yeah.

Josh: You put it back in the business. Now if you got partners you guys have to have this conversation about what that distribution looks like, right?

Will: Right.

Josh: But that's one of those decisions because 5 points is another employee typically.

Will: Right.

Josh: Right? So again, so that's part one, right?

Will: Yes.

Josh: It's let's look at that. Even if you're at 10%, right? Are you okay moving down to 5, 4, 3%, right? By investing it smartly to grow and potentially put yourself back up towards the 15 point mark.

Will: Yeah.

Josh: So that's part one, right? Part two is you really have to look at the risk and that's kind of () you up for that, but you have to look at the risk and you have to do a real assessment of how efficient your business currently is.

Will: Right.

Josh: Right? Because you mentioned specifically that you want to hire someone for the front, why is this someone you want to hire for the front, I'm going to make some assumptions, right? My assumption would be you feel like your time is better spent working on the business than in it sales.

Will: Right.

Josh: But I would actually argue that you're going to be the business's best salesperson probably for another stage or two.

Will: Right.

Josh: Right? So, yes, it's important to backfill yourself, but sales might be something that you still want to handle for a while because even hiring someone else, they're probably not going to perform as well as you do.

Will: Well, they're not going to be as motivated to sale as you are.

Josh: At all.

Will: Right? Because they don't have the same motivation.

Josh: Even if you incentivize them.

Will: Right, even if you incentivize them. You have to get to a point where the incentive, it matches the, it really drives the sales, right? And until you get to that point, no, I don't think somebody is going to have as much incentive in sale as you, because you own the charge.

Josh: No, and again that's kind of a blanket statement, but that's from my own experience from my businesses and what I've seen.

Will: All experience, all experience.

Josh: It's just one of those things to keep in mind when it comes to sale.

Will: Yeah.

Josh: And even technicians specifically, right? It's one of those things that you have to keep in mind. I would argue that it's good to move from technician to sales.

Will: Yes.

Josh: But be very very cautious and very very calculated about the move from sales to owner.

Will: Yeah.

Josh: Right? To where you move to where you don't have an active role in the business, because that's what it is, right? As the owner of your business you have two tasks, you have the head of your employee which you do every day, which is you sales position.

Will: Right.

Josh: And then you have the hat of your shareholder hat.

Will: Yeah.

Josh: Right? Which looks at the numbers and looks at the profit margins.

Will: Right.

Josh: Right? So, you got to be careful about how you mix those and you want to be very calculated in the way that you're looking at that.

Will: Yeah. You want to be very clear. I mean when you're wearing certain hat, even if it's you, right? Even if you're working in a business and you're paying yourself, you might some of you guys, you might be paying yourself as a technician, you might be paying yourself as an employee, right? Or you may be taking the dividends from the profit, right?

Josh: Right.

Will: But you really got to understand, my opinion would be and my advice would be, be very clear on that particular hat even if you're wearing both, understand what hat you're actually wearing. Another thing I would actually say is understand from an owner and it sounds like it's Justin, it sounds like Justin owns the place, right?

Josh: Yeah.

Will: He's the owner.

Josh: Yeah.

Will: So Justin what I would also say is be very, really understand what the long term

Josh: What your goal is, right?

Will: What your goal is.

Josh: Yeah,

Will: In regards to what you want the business to do for you, right? Are you looking to grow the business? Are you looking to grow to multiple locations? Do you want to have 2 or 3? If that's your goal or are you trying

Josh: Are you trying to grow your profit?

Will: Right.

Josh: Are you trying to get your time back and just focus on growing your practice?

Will: Are you trying to put that money in your pocket and stock it while the business is good, get it while the business is good, right? It really depends like a lot of decisions depend on what, on that. So the first thing I would ask you is

Josh: That's good, that’s good.

Will: Yeah, yeah. The first thing I would ask you is what is your 3 year, it sounds kind of cliché, but what is your 3 year, 4 year look like? What do you want, what do you see yourself in 2, 3, 4 years in regards to this business specifically? Do you see yourself having multiple locations or do you see yourself just having this one location and you're going to put all of your energy into this and maximize that profit as much as you can and ride it until the cows come home? You know what I mean?

So, and that, understanding that is going to help you answer that question to a certain extent I think and that's the first question I would ask you because then I would say hey, all right if that's what you want to do then this is probably the best decision for you to make in terms of hiring people or what money you're spending or not going to spend or whatever the case maybe because a lot of times when you're trying to grow the business then it would make sense to put more money, to take those points and put some of those points back into the business, right?

Obviously, that's what you would have to do and if you're not trying to grow it in terms of multiple locations then obviously it's just support of that business which means you might have if you can really generate a lot of sales with that business you're going to have more money to put in your pocket each and every month. So again, it's just, what is your two to three year plan looks like in regards to this cellphone repair business. So, that's the advice I would give you on that.

Josh: I agree with you 100% and I think that was really good, really good on point advice.

Will: Right.

Josh: And I would just cap it at where I was at is I actually had to make that same decision and I made the decision to eat into the profit, right? To grow the business. So, actually I went back down to 0 profit in my business personally. We went back down to 0 profit, we reinvested all profit into some new hires with the goal of really focusing on training and development and really trying to get a focus on the next stage, right?

Will: Right.

Josh: Because I knew that the closer as I got to the next stage that that was going to be my next problem is people and systems.

Will: Right.

Josh: So I really try to focus on hiring the right type of people, creating the systems so things would run more smoothly and efficiently without me having to be too involved.

Will: Right.

Josh: But it took a lot of work. But we went back down to 0 profit, actually I think we were negative there for a few months.

Will: Right.

Josh: As we kind of dug down deep

Will: To invest in growth.

Josh: To invest, but it allowed us to blow through it.

Will: Right, for sure.

Josh: Right?

Will: Yeah.

Josh: After a few months then boom, we smash it.

Will: Yeah, yeah, it's a risk. It's the challenge of that stage, it's the challenge of that stage.

Josh: For sure.

Will: So, you guys got a lot of look there. If you're in that stage you probably kind of emphasizing and identifying with some of the things we're talking about. If you're not in that stage and you're trying to get to that stage then you had lot things to work for.

Josh: Be aware. If you pass that stage then you're reminiscing

Will: Right.

Josh: And you might still feel this because I notice even with our business at about 100 employees today.

Will: Right.

Josh: We still feel it.

Will: Yeah.

Josh: Right? To still go through the next revenue level.

Will: Right.

Josh: It is the same problem.

Will: It's the same, yeah.

Josh: It's always the same problem.

Will: It's always the same.

Josh: It never changes.

Will: It's decisions, decisions.

Josh: It's a decision of profit margin versus growth.

Will: Yeah, absolutely.

Josh: Right? And I think that's really how you have to look at it. Keep the hats separate. What are your goals, right?

Will: Yeah.

Josh: Am I in the place where I just want to eat the profit and take it while I take it off the table while I can get it

Will: Yes.

Josh: Or am I in a growth mode where I want to reinvest and be aggressive.

Will: Absolutely, 110%.

Josh: Yeah.

Will: At the end of the day that's going to dictate what decision you actually make.

Josh: That's all I got man.

Will: That's all I got. That was a good question, I think.

Josh: Good question Justin.

Will: I mean you really had us thinking on that one Justin, because and sometimes it's great because sometimes the question, we don't have all the detail and what that allow us to do is go down this road of less detail which we actually hit more examples, I think sometimes, so. (), right, right, right.

Josh: Yeah, I actually anticipate that, yeah. That was good.

Will: It was really good. So, I think that's it. We're about 42 minutes in Josh.

Josh: Boom.

Will: That's another one.

Josh: Another one again.

Will: Another one.

Josh: Guys hopefully you're getting some value out of this.

Will: Yes sir.

Josh: Again, like us on, subscribes to us on iTunes.

Will: Yes.

Josh: Check us out on Sticher.

Will: Yes.

Josh: Where else are we? We're somewhere else now too?

Will: Sticher, iTunes, Spotify.

Josh: Spotify.

Will: Google play.

Josh: Boom Bam.

Will: Yup.

Josh: Right?

Will: We try to be everywhere

Josh: Everywhere you are.

Will: Yeah.

Josh: Right? Everywhere you are.

Will: Everywhere you are. That's a tag line for somebody. We're everywhere you are. Anyways, it's the Ask Will and Josh Show.

Josh: You know guys it really means a lot to us that you let us know how we're doing, leave us some feedback.

Will: Yes.

Josh: Smash the like button if () where you're seeing us.

Will: It's Instagram, Facebook, we're on all the social media sites, so #AskWillandJosh. You can check us out, you can look for us, you can Google that, we're all over the place, so.

Josh: Yeah. And don't forget, right? It's not about doing this just however you want to, it's about doing it the right way. So #RepairRight.

Will: RepairRight.

Josh: Because at the end of the day, you got to have some ethics.

Will: Yes.

Josh: And if you're really going to have a long term business that does something, you got to do it the right way.

Will: I agree 110%.

Josh: Hopefully we left you better than we found you, I'm Joshua Gray.

Will: I'm William Agnew.

Josh: This is the Ask Will and Josh Show, until next time.

Will: Signing off. See you guys, have it going.

About the Author Joshua Gray

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