Are you a small business owner looking to grow or acquire a business but unsure how SBA loans work? In this episode of Radio Free Enterprise, Frank Felker sits down with Mary Soldano, SBA Business Development Officer at Truliant Federal Credit Union, to demystify the SBA loan process. Mary explains the key differences between SBA loans and traditional loans, the role of government guarantees, and the flexibility SBA loans offer—including access to capital with minimal collateral requirements.

Mary also dives into the “5 Cs of Credit” lenders use to evaluate applications, emphasizing the importance of cash flow, management experience, and transparency. You’ll learn how to choose the right SBA lender, navigate the application process, and understand recent changes to SBA lending rules, such as new equity injection options for business acquisitions.

Whether you’re considering an SBA 7(a) loan for real estate, working capital, or business acquisition, this interview provides invaluable insights to guide you through the lending process. Don’t miss this comprehensive guide to securing the funding your business needs!

Mary’s Contact Information

Mary Soldano

SBA Business Development Officer

Truliant SBA Lending

Phone: 856-562-8323

mary.soldano@truliantfcu.org

https://www.linkedin.com/in/marysoldano1/

What follows is an AI-generated transcript of our entire conversation. Please excused any typos!

[00:00:00] Mary Soldano: Banks are still taking a risk. So there are still certain underwriting guidelines and criteria that they have to underwrite by in order to extend that financing to you. The program is really there to create better access to capital for the small businesses in America. And so not everyone is qualified for a traditional commercial loan where you need collateral that is worth more than the financing you are getting.

[00:00:21] Mary Soldano: In the SBA world, you can get a 3 million loan and have essentially no collateral. Collateral on that loan because of the SBA program, which that can really either help you buy a business, grow your business, um, it can do a lot for the small business economy.

[00:00:41] Dude Walker: And now it’s time once again for the show that gives glorious voice to 25 million business owners across the Fruited Plane Radio Free Enterprise with Frank Felker.

[00:00:57] Frank Felker: Thank you, Dude Walker. Yes indeed. I am Frank Felker. Welcome back to Radio Free Enterprise. My guest today is Mary Soldano. Mary is an SBA business development officer with Truliant Federal Credit Union. Mary’s calling in today from the greater Philadelphia area. Mary, welcome to Radio Free Enterprise.

[00:01:20] Mary Soldano: Hi, thank you so much for having me.

[00:01:23] Frank Felker: I’m so happy you’re here, Mary. I want to, uh, ask you a bunch of questions about a topic which you are quite expert at, but which causes a lot of confusion for a lot of small business owners. And that has to do with SBA loans, SBA as in Small Business Administration. So people, here’s, you know, I’ve heard people say they don’t understand small business or SBA loans.

[00:01:47] Frank Felker: They don’t, uh, they have misconceptions, especially about what exactly gets guaranteed and what they’re going to be on the hook for. And how to apply and how long the process takes, just all kinds of things. So I appreciate you taking the time to come and get us all straightened out on that. Yeah. So first off, Could you give us your sort of, uh, 40, 000 foot view of what exactly an SBA loan is and how does it differ from, I guess we might call it a traditional business loan?

[00:02:19] Mary Soldano: So an SBA 7A loan is very different than a conventional loan, um, that traditional banks offer you. So SBA 7A, it is a government program. And they use bank intermediaries to lend those funds. So think of FHA went for the first time home buyers program or federal student loans. It’s under that same umbrella where it’s government guaranteed lending and it is, uh, guaranteed by 75%.

[00:02:45] Mary Soldano: So what happens is a bank or an approved financing institution lends you their money. for the SBA 7 A loan and the government backs that loan by 75%. So sometimes folks get confused because they think the actual government is lending them those dollars. It’s not, it’s banks like, um, or credit unions like Truliant or some of the big guys like Wells Fargo, uh, TD bank, um, all of those types of things.

[00:03:09] Mary Soldano: Thanks. They are lending you their money and then it is backed by the government if that loan were to go into default. So at the end of the day, you as the small business owner and guarantor on the loan are responsible for paying that loan back. You are first responsible to that financing intermediary, whether it’s us or somebody else.

[00:03:28] Mary Soldano: And then if it were to go into default, then you are working out some type of payment plan with the government.

[00:03:33] Frank Felker: Okay. So, uh, you’ve made it clear, but I just want to reiterate. Okay. I’m still on the hook for this loan. Uncle Sam is not going to come bail me out. In fact, it’s more, he’s sort of like going to bail you out, make it easier for you to take the risk on me, because even if I end up blowing it, the government will come and guarantee the loan.

[00:03:56] Frank Felker: Now, the next thing is you, I think you did mention this. But the government won’t guarantee 100 percent of the loan amount. Is that correct?

[00:04:05] Mary Soldano: Yeah. So banks are still taking a risk. So there are still certain underwriting guidelines and criteria that they have to underwrite by in order to extend that financing to you.

[00:04:13] Mary Soldano: The program is really there to create better access to capital. for the small businesses in America, and so not everyone is qualified for a traditional commercial loan where you need collateral that is worth more than the financing you are getting. In the SBA world, you can get a three million dollar loan and have essentially no collateral on that loan because of the SBA program, which that can really either help you buy a business, grow your business.

[00:04:38] Mary Soldano: Um, it can do a lot for the small business economy.

[00:04:41] Frank Felker: Interesting. I wasn’t aware of that. Uh, that there potentially could be no collateral requirement at all. That’s interesting. Okay. So if I’m not coming to you with collateral, uh, what, what are you looking for? I assume even with an SBA guarantee from the government, TrueLion’s not going to loan to anybody who just happens to put in an application.

[00:05:08] Frank Felker: What is it that you guys are looking for from me as a business owner?

[00:05:12] Mary Soldano: Yeah, correct. So there’s the SBA SOP, which every single SBA lender has to abide by. So those are bare minimum rules. And then on top of that, each lending institution has their own credit box rules on top of that, that they want to make sure their board is okay with and their credit teams are okay with.

[00:05:29] Mary Soldano: And so the biggest things, um, there’s, you know, the whole five Cs of credit, which every lending partner looks at, um, for us, our biggest items we’re looking at is cashflow. So we are cashflow lenders. So can the loan that you’re asking for, can the business you’re running or the business you are going to buy cashflow for the debt you are requesting cashflow.

[00:05:48] Mary Soldano: And then also management experience is huge. So the people, You know, you, if you are 20 percent or more owner of that business, you have to personally guarantee on that loan. So we’re looking at the business’s operations. What is their business model? How do they pay their expenses? And then the management expertise.

[00:06:06] Mary Soldano: Who is this person who at the end of the day is on the hook to pay us back? What have they done in their past that relates to operating a small business? How long have they opened this business for? Um, there’s a lot of different things that go into all of that.

[00:06:20] Frank Felker: It’s really interesting that it’s not just the numbers.

[00:06:23] Frank Felker: It’s also the people that you guys are, in fact, you’re lending the money to a person and you’re putting your faith and trust into that person. And, um, so you mentioned a couple of things. Uh, I guess, uh, management experience, uh, the specifics of the business itself, how long it had been in business, um, anything else in particular that you would either look kindly upon in a business or frown upon that you would find in a business application.

[00:06:55] Mary Soldano: Yeah. And so this is a great question, Frank, because there are every SBA lending, um, institution is different, right? So there may be a loan that I would say yes to that. Another loan, another lender would say no to, or the opposite as well. So the industry is a very special place because I get, Probably about half of my referrals are from other SBA lenders in the country.

[00:07:16] Mary Soldano: Um, and so we are able to learn each other’s credit boxes so that at the end of the day, we’re still helping that small business and that entrepreneur. Um, so for example, we at your client, we’re okay with some of those larger, we call them air ball deals. Um, let’s say you are buying a business and it costs 1.

[00:07:32] Mary Soldano: 5 million dollars, but the cash flow is great. Um, you have direct industry experience. Um, let’s say it is a, uh, it’s a restaurant. We’re not afraid of restaurants here. There are other letters who are. Um, and let’s say you’ve been in the restaurant industry your entire life. You know how to manage the inventory.

[00:07:50] Mary Soldano: You know how all of that works. Um, that is a deal that we would do. On the contrary, right now, we are not big in the construction industry. So there’s industry specifics as well that certain lenders will or will not do. Now that could change over the next couple of months. Um, and another lender that sometimes I will send those deals to another friend who is at another lending institution who would be more apt to do that type of transaction.

[00:08:15] Mary Soldano: Um, and so it’s really important that the folks who are in my position as a business development officer know what their credit team is going to want to do. Um, to do at the end of the day and know where to pass and then refer to other colleagues in the industry, you

[00:08:29] Frank Felker: know, I want to come back to the issue of cash flow.

[00:08:32] Frank Felker: If we could, um, you know, that’s a lot of different ways to look at the word cash flow. Um, I often say that, uh, uh, What is it? Profit is a theory, but cash flow is reality. And, uh, you know, do you have money coming in just because it’s on paper that you’re making a profit doesn’t mean you’re going to be able to make payroll on Friday.

[00:08:55] Frank Felker: Yeah. So when you guys are looking at cash flow, um, I assume also what you’re saying or what you’re looking at is, can we carve some of that flow off, move some of that river of money? In a different direction to make these payments and still allow the company to operate. What, what percentage of cash flow.

[00:09:17] Frank Felker: Would be a limit, uh, for the, uh, the payment, the monthly payment.

[00:09:21] Mary Soldano: Correct. So, and that’s, so SBA has a minimum cash flow ratio of 1. 15, which means you can pay all of your expenses at least once, and then you have 0. 15 left over. And that is including your debt service. That is the SBA’s minimum. Now depending on the loan size, we like to see a little bit higher than that.

[00:09:40] Mary Soldano: So if my loan size is above a million dollars, I would like to see closer to maybe 1. 2, 1. 25 on that cashflow ratio. Um, there’s other lenders who won’t do it unless it hits 1. 5. And then it’s also important to know, you’re not just looking at today, you know, 2024, you’re hitting that number of 1. 25, for example, but we need the last two periods to cashflow of that, which would mean one file tax return.

[00:10:06] Mary Soldano: Plus your interim P& L statement, um, or there’s other lenders out there who they may need three periods to cashflow at that point. And so that’s why it’s really important to make sure when you’re talking with a prospective SBA lender, you’re learning what their rules are that you’re asking, okay, is this an SBA thing or is this a, your specific credit box thing?

[00:10:23] Mary Soldano: You know, if you’re able to get access to that capital somewhere else or not. Um, yeah.

[00:10:30] Frank Felker: Okay. Now, um, geez, it’s funny. Okay. Um, There’s so many questions that come to my mind and we could just go down multiple rabbit holes chasing after these questions I’d like to get answered. But instead, I’m going to try to stick to my, uh, to my outline here.

[00:10:46] Frank Felker: Um, it’s become clear through what you’ve said that I, I’m going to put myself in the position of the business owner who wants to get a loan. I’m borrowing from you and, and Drew Lyon or whomever I’m borrowing from, not from the government. And you’ve also made it clear that Different lenders have different criteria and some will look favorably on different types of loans and so forth.

[00:11:10] Frank Felker: So, if I’m looking for an SBA lender, how do I start that search and what should I be looking for?

[00:11:18] Mary Soldano: Yeah. So there’s a number of different ways you can find an SBA lender. Um, it depends on sometimes it depends where you’re located. So you could go to your local lender, your local banks and see if, do they provide SBA loans to people?

[00:11:32] Mary Soldano: Um, there are a lot of lenders these days who are on interviews, right. Or a podcast like this one, for example, um, So you could reach out to me for an SBA loan if you’d like. Or, um, there are, so LinkedIn has become a huge power source of just like referral networks for SBA. I’m probably, most of my news feed is just tons of SBA lenders asking, Hey, you can do this deal.

[00:11:57] Mary Soldano: Here’s a recent deal I closed. Um, and then there also are still traditional loan brokers out there. There’s a couple of really great ones who specialize specifically in SBA lending. Um, and then there also are business brokers out there. So if you are in the process of buying a business, um, you could be also utilize your business brokers contacts.

[00:12:16] Mary Soldano: Um, you could also go to, there’s just tons of different ways. We’re all over the place. So it’s no, you

[00:12:22] Frank Felker: guys are not doing a good job hiding from us. You want us to find you.

[00:12:26] Mary Soldano: Yes, but it is important. It really kind of depends on what you’re asking for is who you should work with. So if you have a really strong deal that cash flows really well, it’s fully secured by commercial real estate, you may be able to go to your local bank and get an amazing rate and they may be able to help you.

[00:12:43] Mary Soldano: They may take a lot longer to do that, but you’re, it depends on what you’re paying for. You may get a really better rate at the end of the day where there’s some national lenders, um, like us at Shoe Lion and there’s a number of other ones in the country who we work a little bit faster and we are okay with the true, just cash flowing deals with a very little collateral.

[00:13:01] Mary Soldano: Um, So it really, it’s like deal by deal specific depending on what you need.

[00:13:06] Frank Felker: But is there any way for me to know, uh, for example, let’s say I own a restaurant, how to find an SBA lender who likes restaurants? Or is that just something I can, maybe I’ll speak to the first one says no, and I should ask them who might say yes.

[00:13:22] Mary Soldano: Yeah, I would, there’s not really, so there is the list of the top active lenders in the country. You can find that on the SBA’s website. Um, we just cracked that top 100 list as a credit. Oh, that’s great. Um, but so you can go on that list and typically like whoever’s in the top 100, they’re going to be more apt to doing a bunch of different industries because they’re actually.

[00:13:42] Mary Soldano: It’s a good place to start. Um, I would also advise once you get a lender on the phone, be very upfront and direct about, Hey, this is the industry I’m working in. Here’s the hair on the deal, right? Like whether there’s no collateral or I had something happen on my credit last year, be very, very upfront about that.

[00:13:58] Mary Soldano: That lender will appreciate it. They’re going to know if their credit team can mitigate it, or they’ll know right away if they need to pass you off to a friend or a colleague to help you get that transaction done. Um, I’ve seen a lot of folks. Over the last couple of years, they call and they ask you a million questions.

[00:14:14] Mary Soldano: And then at the end, they’re like, Oh yeah, and this is what I’m looking at doing. And you’re like, I can’t do it here. And so if you’re very upfront about what your situation is and what you’re finding, then that lender will be able to tell you. Very quickly, if they’re able to do that deal or not.

[00:14:30] Frank Felker: Interesting. Well, and I will include all of your contact information in the show notes, uh, for this interview, wherever you may be watching it right now, Mr. or Mrs. America, uh, whether it’s, uh, audio, video or elsewhere. Um, now tell me about the application process. Um, how is it different from a more traditional loan?

[00:14:53] Frank Felker: Does it take longer? Is it shorter? What’s it, what’s it like?

[00:14:56] Mary Soldano: Yeah, that’s everyone’s favorite question is how long does it take for me to close? It’s probably way way before they even get approved. They’re asking when can we get to the closing table? Um, and so that also is going to depend on the lender that you are working with Of course, it’s lender by lender.

[00:15:11] Mary Soldano: Um, but there are certain things that we’re Re rely on you as that borrower. So every lender can only move as quickly as possible with the information you give them. So a lot of us like to say the average timeline is around 45 to 60 days from start to finish. And I say average. ’cause obviously we’ve seen some that go by faster.

[00:15:30] Mary Soldano: And there’s some that drag out for a little bit longer. Most of that timeline is in collecting paperwork and documentation. Um, and so there’s, I try to break it up into three different phases. There’s your term sheet or like pre approval. Some folks like to call it. And in that phase we ask for a short needs list.

[00:15:48] Mary Soldano: So it’s basically last three years of financials for yourself, your business. personal financial statements, and your resume. And then what is your ask? Are you buying a business? Then we want to see that business’s financials as well. Um, are you buying commercial real estate? We need to know what that address is.

[00:16:04] Mary Soldano: And with that information, most good lenders can do a quick pre underwrite of your transaction and then issue you a term sheet if they’re confident that they’re able to get you to the closing table and get you approved. If you sign that term sheet, then you go into underwriting. So another checklist of documents, um, and then business plan, cashflow projections, um, all of the SBA application paperwork and all of this can be found on the SBA’s website.

[00:16:30] Mary Soldano: Um, and most lenders to also have these like checklists on their website. So you can get very well prepared before starting the process. And then once you’re approved, it’s the closing process. Everyone super excited about the commitment letter they signed and they want to close like two days later. So basic closing timeline is usually around 30 days.

[00:16:52] Mary Soldano: And I say usually again, because it’s going to depend on third parties and on what you’re doing. So if you’re buying commercial real estate and you need an appraisal, That’s going to take some time. Um, typically once you sign that commitment letter, your lender is going to give you a closing checklist.

[00:17:07] Mary Soldano: And then at most institutions, once everything on that checklist is done, you can close a few days later. So it’s really a matter of how quickly can you work and your attorney work, or can you and the seller work together to complete all of those items on the checklist? Um, and I always advise folks, ask your lender a lot of questions.

[00:17:25] Mary Soldano: If you get a checklist and you just like start doing stuff and You don’t know if it’s correct or not. Ask the lender. Say, Okay, this is what you’re asking for a collateral schedule. Am I putting the right information on this? Because if it’s not correct, they’re going to send it back to you and you’re going to have to correct that.

[00:17:40] Mary Soldano: So never be afraid to ask questions in this SBA process. It is. It can be a long process, so it really matters on who you’re choosing to partner with.

[00:17:50] Frank Felker: That’s great. That was a very thorough answer. Um, So I’m picturing myself at the closing table. Do I get funded at the closing table? When do the funds arrive?

[00:18:01] Mary Soldano: Yeah. So most of the time it depends, again, depends on what you’re asking for. So under the SBA seven, eight umbrella, there’s tons of different use of funds that are eligible for financing. I

[00:18:12] Frank Felker: see. One

[00:18:13] Mary Soldano: of those is buying commercial real estate. That would be, you know, everyone gets funded at the closing table title, either as wiring it out Sending checks to the appropriate parties.

[00:18:22] Mary Soldano: You’re able to have working capital as a part of your loan request as well. So let’s say you’re buying a building, but it’s going to take you some ramp up time to move all operations over. You can include three months of working capital expenses. Same thing with buying a business. Um, most SBA 7a loans are closed and funded on the same day under 7a.

[00:18:42] Mary Soldano: You can also do construction loans as well to the commercial real estate you’re operating out of. Those would not all be funded on the same day because you’re going to have to be working with your contractor. Um, so most of the time you are funded the same day, but it’s going to depend on where all of those dollars from the loan are going.

[00:18:59] Frank Felker: Well, I’m going to fall down one quick rabbit hole. If it’s a, if the transaction involves real estate, is there also going to be the typical title search and all the paperwork we might see in a residential purchase?

[00:19:12] Mary Soldano: Of course, all of that. So, um, and it depends on when you want to engage all of that as well.

[00:19:17] Mary Soldano: So there’s folks where they have to meet a deadline. And if they don’t meet that deadline, they’re going to lose that property. They can while the loan before you get officially approved, you can start ordering your appraisal. You do have to get environmental reports in SBA as well, depending on the condition of the property.

[00:19:33] Mary Soldano: So that could either mean a low level risk assessment, or it could mean a full blown phase one. All of those things take time. Um, and then of course all of your recommended title as well. So SBA has certain title requirements that every lender needs to abide by in their title policies.

[00:19:51] Frank Felker: Now, you guys are preferred SBA lenders.

[00:19:55] Frank Felker: Um, can you tell me what the advantage is of working with a preferred lender.

[00:20:01] Mary Soldano: Yeah. So the biggest advantage is that we can do that stamp of approval ourselves without having to submit your entire loan package to the SBA. So there’s preferred lender status. That’s all that means basically that we enter your information to their system called e tran, and then we’re able to pull down your approval number.

[00:20:20] Mary Soldano: Um, they, the SBA did make an update last year where they go through different data checks and To make sure that, you know, you’re a for profit business or your E. I. N. Number matches and social security number hasn’t been used for fraud. So they used to be instantaneous where we could pull that number.

[00:20:36] Mary Soldano: Now every lender has to wait around 48 hours to get that lender. That number. I’m sorry, no matter what the status is. And then there’s GP lenders, which just means general processing. Um, and so that means once you get approved by your bank, you then have to submit that whole loan package to another person at the SBA to also approve it.

[00:20:56] Mary Soldano: Now, it used to take a really long time for GP lenders to get that approval. It has gotten a lot faster in the last couple of years, and you can simultaneously start the closing process. Um, so the biggest advantage is you just know you’re really approved faster with a PLP lender. with where a GP lender, it may take an additional two weeks for that approval.

[00:21:17] Frank Felker: Now you are in the greater Philadelphia area, but is it, am I correct that you are able to help people with SBA loans anywhere in the United States?

[00:21:29] Mary Soldano: Yep, that’s correct. So, um, this past year, a team of us were brought on to Trilliant. They’re based in North Carolina and we were brought on to expand their national SBA 7A footprint.

[00:21:40] Mary Soldano: Um, so I’m based in the Philly area, but I can land anywhere in the country.

[00:21:44] Frank Felker: Henry, the last thing I wanted to ask you about has to do with changes in the SBA approval process or you name it. I’ve heard that there have been some changes in recent years. Can you speak to that?

[00:21:59] Mary Soldano: Yeah. Um, over the last two years, there’s actually been a lot of changes in the SOP.

[00:22:03] Mary Soldano: And so that is the big book of rules that every SBA lender has to abide by. Um, one of the largest, there’s been a lot, but one of the things that I’ll focus on today is around equity injection. And that is for basically for every use of proceeds. And so part of that is when you buy a business, it used to be a requirement that you had to do 10 percent of the total project cost.

[00:22:24] Mary Soldano: You as the buyer had to put in, and if any seller financing was going to count towards that 10%, it would have to be on standby for the full life of the loan. Now, though, they’ve changed that seller financing portion of it to be a little bit more flexible and more favorable to sellers. For example, there are now three ways seller financing can count as equity injection.

[00:22:45] Mary Soldano: It still is for the full life of the loan. So what that means when I say standby is that the seller doesn’t see a penny of their money until you pay off that SBA loan. That’s what full standby means. And so the other options are now partial standby, which would mean interest only payments. For a minimum of two years and then the loan must amortize out or standby for two years only and then the loan must amortize out.

[00:23:08] Mary Soldano: None of those facilities can have a balloon in order for it to count as equity injection. This is huge because it really creates access to capital for folks who are looking to buy businesses and need that seller financing to help bridge the gap in equity injection. A lot of sellers, if you ask them, can I do a standby a note for the whole loan?

[00:23:26] Mary Soldano: They want to see their money faster than 10 years. But some are okay seeing it in year three, you’re getting interest only payments in the first two. That’s the biggest change. Again, that is like per the rule book of SBA, some lenders are abiding by it. Some aren’t. Um, we are using it. We actually, we love seeing seller financing and business acquisitions.

[00:23:45] Mary Soldano: It shows that the seller really believes in the buyer who’s going to help take their company to the next level. You

[00:23:50] Frank Felker: know, that, uh, your answer there made me think of a question I had intended to ask, which is what sort of term lengths Do these loans normally stretch out over?

[00:24:01] Mary Soldano: So business acquisitions are 10 years, 10 year amortization.

[00:24:05] Mary Soldano: If it includes real estate, that is more than half of the proceeds. It can be stretched out to 25 years.

[00:24:12] Frank Felker: Great. Well, Mary Saldana, thank you so much for joining me today on Radio Free Enterprise.

[00:24:18] Mary Soldano: Thank you for having me. It was an honor to be here.

[00:24:21] Frank Felker: Thanks again to Mary. And thank you for joining us. Until next time, I’m Frank Felker saying, I’ll see you.

[00:24:30] Dude Walker: You can’t seem to turn a profit? Is that what’s eating you, Sparky? Well, you’ve come to the right place. Radio Free Enterprise.

In this episode of Radio Free Enterprise, host Frank Felker interviews Dan Rochon, author of the upcoming book Teach and Grow Rich. Dan shares insights on how business owners and professionals can increase their influence, avoid the number one sales mistake, and ultimately get what they want.

Whether you’re a small business owner or a sales professional, this episode is packed with actionable tips to help you grow your influence and achieve your goals. Tune in to discover the powerful strategies Dan outlines in his book, Teach and Grow Rich, and learn how to apply them in your own business.

Pre-Order Dan’s Book at: https://NoBrokeMonths.com

What follows is an AI-generated transcript of our entire conversation. Please excused any typos!

[00:00:00] Dan Rochon:

If you want to achieve something in your life, we talked about, you know, earlier in the conversation about believing in yourself, but I’m going to give you something specific to believe in. I want you to believe that you have the ability to figure it out because you may or may not, you know, when I say believe in yourself, I think that’s too general.

[00:00:18] And for years, I used to teach that to my audience and to my mentees and the people that I coach and, and not too long ago, I said, well, wait a second. What does it really mean to be able to believe in yourself? And if I believe in myself, what do I have to believe about myself? And I’ve sort of distilled that to one thing, which is I can believe that I’ve got the resources.

[00:00:43] I mean, geez, Google chat, GPT. If you can’t figure something out in this day and age, it’s because you’re not trying. So when I believe that I can figure something out, that’s the basis. To having that really strong faith in yourself to be able to achieve whatever it is that you are meant to achieve.

[00:01:11] Dude Walker:

And now it’s time once again for the show that gives glorious voice to 25 million business owners across the fruited plain. Radio Free Enterprise with Frank Felker.

[00:01:27] Frank Felker:

Thank you, Dude Walker. Yes, indeed. I am Frank Felker. Welcome back to Radio Free Enterprise. My guest today is Dan Rochon, author of the upcoming book, Teach and Grow Rich. Now I want to make sure I get this subtitle right. Dan, it’s how to increase your influence, avoid the number one sales mistake, and get what you want.

[00:01:49] Wow, that’s a pretty ambitious subtitle there, Dan. Welcome to Radio Free Enterprise.

Thank you, Frank. It’s really nice to see you.

Good to see you. Uh, we may touch on at some point further on in our, uh, discussion here. How long we’ve known each other. It’s been a while. But, uh, I want to dive right into your upcoming book.

[00:02:10] I’m looking forward to its publication. I, I really like that subtitle. And I didn’t mean to raz you about it because as I say, I like it. Let’s start with those three items. When you say how to increase your influence, What do you mean by that? And why should I want to do that?

[00:02:27] Dan Rochon:

Yeah. As you can imagine, Frank, you know, business in life, you know, really depend on the ability to be able to persuade, to, to persuade, right.

[00:02:37] And if you really want to sell, you have to understand it’s not about you. And so you have to be able to understand, to, to step into the other person’s view, to step into the other person’s viewpoint in their, into their world. before you can even attempt to increase your influence. So when I talk about increasing your influence, it’s really about understanding who the other person is.

[00:03:02] When I talk about the number one sales mistake, and you have to get the book to really dive into this deeper, it’s really about understanding. And I’ve done this Frank for many, many years, you and I have known each other for many years. And, um, you know, I’ve owned businesses. I’ve coached tens of thousands of people in business and really have had the privilege of being able to, to really learn a lot through my journey.

[00:03:25] And what I see over and over and over again for the number one sales mistake. Is. Not good enough. Now, whether that be my website’s not good enough or my, uh, my processes aren’t good enough or the worst, I’m not good enough. That is the number one mistake that I see salespeople and business people make over and over and over again.

[00:03:51] And so when you recognize that that is the number one sales mistake, then you can then make a choice. I’m going to either commit to doing this. Or I’m going to quit because you really have three choices. If you’re, if you’re not getting what you want right now, you can continue to get meager results, or you can commit and go all in, or you can, so if it’s the choice between those three, my recommendation is to commit and be all in, and then the last section of that subtitle, uh, real quick is to be able to get what you want.

[00:04:28] It’s really, truly believing in yourself first. And I go through in the book, teach a grow rich, how to believe in yourself, the 11 ways that you can be able to believe in yourself, that the scientists say, like, these are, these are, you know, scientific ways to believe in yourself so that you can then get what you want.

[00:04:48] Frank Felker:

That is fantastic. Uh, I can see where that section alone of helping people build their own self confidence could be invaluable to almost everyone. It seems like it’s only a small fraction of the population that feels highly confident and ready to take on the world on a daily basis. So let me, um, that’s great.

[00:05:11] And I had, uh, thought I was going to ask you about each of those three items individually, but obviously you have them organized together in your mind as a group. Um, Let me go into then, uh, sort of the, what I call the, uh, bullet points from the, uh, the most important page in your entire book, the back cover in which you learn what you’re gonna learn if you invest the time and, and money into buying and reading this book.

[00:05:37] And so the first bullet point that I saw was build trust through the quote, teach to Sell method. What is the Teach to Sell method, Dan? And how does it help us build trust?

[00:05:51] Dan Rochon:

If you can remember Frank and for the listeners and audience, if you can remember going back all the way to school, however long that’s been, and there was somebody, a teacher.

[00:06:01] In your school that influenced you, one that you can remember right now, vividly to say, that is the person that made a difference in my life. And I want you to think about that person right now. And when they’re in your mind, I want you to consider if you ran into them at the grocery store, they came in, knocked on your door, whatever, however, what you interacted with them, and they gave you some advice.

[00:06:30] I want you to ask yourself, would you consider to follow that advice? I bet the answer to that is yes. So now if you sit there and consider why would I follow their advice or at the very least listen to them? It’s because they earned trust. How did they earn trust? Well, once upon a time you were struggling with a bad breakup or maybe something in your family was going wrong, or maybe you were having some, some doubts about yourself.

[00:06:58] You weren’t believing in your own abilities and that teacher entered into your life and that teacher saw you for who you’re meant to be. They saw you for something for somebody greater than maybe you even saw yourself. And through that, they earned trust. So the Teach to Sell philosophy is to be able to be that guide to demonstrate to the consumer To demonstrate to your prospects, to your current clients, to be able to demonstrate to them what to expect throughout the journey of the sale, to be able to expect the pros, the cons, the predictable problems, so that they can now understand what to expect.

[00:07:42] And when you’re, when you elevate your ability to teach to sell, you’ll gain more and more trust, just like that teacher that you were just envisioning in your head.

[00:07:52] Frank Felker:

That’s a great, great example, Dan, and you touched on one thing there that I always found was a great success factor for me, which is to pre address any objection that my prospect may have in mind, but hasn’t yet verbalized, and certainly if they do verbalize an objection, to respond to it thoughtfully and honestly.

[00:08:15] Yes, that could be a problem. That might be a reason it wouldn’t make sense for us to work together or what have you. But the, the amount of, uh, surprise oftentimes I would see on the face of the prospect and certainly the amount of trust that would build, uh, was significant. Would you agree with that statement?

[00:08:33] Dan Rochon:

I think when you’re able to predict to prevent or prevent the predictable problems of a transaction. The, the cycle of whoever you’re serving and you’re able to accommodate that before it happens, when you’re able to teach to sell, to be able to say, Hey, Mr. Consumer. Every once in a while, it doesn’t happen often, but every once in a while, this particular thing may go wrong with the service or with the product.

[00:09:03] When you do that, if it does go wrong, then they look at you like, damn, Frank, you’re a freaking genius. And Frank, you are a genius, right? And so when they, when they understand that. You know, before it happens, you position yourself as the authority, as the, uh, as the guide so that in the unlikely event that something does go wrong, you’ve already prepped them.

[00:09:28] And when you’re able to handle the objections, like you mentioned, before they come up, then they’re going to trust you so much more when you’re proactive in the communication, rather than reactive. Because if the objection comes up and now I handle it, It seems almost like I’m just trying to sell, right?

[00:09:46] But if I prep the conversation and be proactively handled the objection before it comes, if it, you know, it becomes just like, Oh, okay. I was thinking about that. And now they feel reassured.

[00:09:59] Frank Felker:

And that’s the real thing. And I know that this is at the heart of how you work with customers is having their best interest in mind.

[00:10:08] Um, I may be jumping ahead of here a little bit, but. I remember a discussion or something, uh, that I read that you had written that had to do with helping the other person get what’s best for them, not necessarily what’s best for you. Could you speak to that for a moment?

[00:10:26] Dan Rochon:

In neurolinguistic programming, there’s several presuppositions, and one of those presuppositions is the communication is the response that you get.

[00:10:36] And so we go through life often and I hear, you know, many people say, well, they didn’t understand what I meant. They didn’t hear what I was saying to them, whatever the case may be. But when you understand that your communication is the response that you get, then you become more responsible for who you’re being more responsible for what you’re saying, more responsible for the way that you’re interacting with another person.

[00:11:04] And so as you. Become more responsible for the way that you’re communicating and you take responsibility for communication being the response that you get. Now you suddenly can put them first rather than yourself. And granted, sometimes you, it takes a little bit of a risk to do this, right? Because you become vulnerable.

[00:11:29] You become vulnerable, but put somebody else in front of you. Yet, if you’re willing to take that risk, and if you’re willing to really care for another human being, then you’re able to, you know, Zig Ziglar. I mean, if you help enough people get what they want, you’ll always get what you want, right? I had the privilege of meeting Zig Ziglar once upon a time and I agree with Zig on that.

[00:11:48] And so I think that that accommodates or answers the question of what you’re asking there.

[00:11:53] Frank Felker:

Yes, absolutely. And, and what that really comes down to is something that I’ve written about, which has to do with sales is something you do for someone, not something you do to someone. And I really encourage more people to consider sales as a career choice because it can be so lucrative.

[00:12:11] But also it’s, it’s a service based, uh, job. But you and I could go on about that for a long time. Sorry to cut you off there, but I want to go on to your next bullet point in terms of what you’ll learn reading the book. The second bullet point is create engaging and effective content. Now, I kind of want to break that into all three of those words.

[00:12:32] What sort of content are you talking about? What do you mean by engaging and what do you mean by effective?

[00:12:38] Dan Rochon:

Engaging and effective sort of work, you know, hand in hand. So when you think about the, um, effective is, are you getting the result that you want to get? So you have to think, well, what’s the result that I want to get?

[00:12:51] Is it I want to have awareness? Is it that I want to be able to help somebody? Is it that I want to be able to make a difference and make an impact? What in somebody’s world, what I believe is the most effective way is to, again, follow the teach to sell philosophy, where you educate the consumer. There’s a company called Patagonia and they educate the consumer and they do close, but they educate the consumer in a way, you know, they’re aware of like the natural, you know, the environment.

[00:13:21] And so as they’re educating about the environment, then. The people that are educating, the people that they’re teaching to sell, that they’re, they’re doing that with, they now become advocates, they become fans. And so then when they say, well, I want to get some clothes, well, they’re going to think about that company.

[00:13:36] So when you think about engaging content, when you’re thinking about effective content, the top producing content is one that you’re going to be an educator, that you’re going to walk them through. You know, not just what to expect about the, about the journey, but something that may be parallel to your product or your service, such as the environment, which really is not even directly, you know, connected with, uh, with clothing other than maybe, you know, put a park on, uh, if, if, if you’re, you know, going to be in a blizzard, right.

[00:14:06] But there’s, there’s a way that you could communicate to be effective, to gain trust. And that way is really to, to embrace, you know, to educating that your consumer.

[00:14:19] Frank Felker:

What sort of content can we create and generate that’s going to have that effect for us?

[00:14:24] Dan Rochon:

Think about what you do. Let’s say you’re a plumber and let’s say, you know, that the consumer is gonna, You know, I mean, me, I’m, I’m not a handyman.

[00:14:33] I, you don’t want to call me to fix your toilet. Okay. In fact, I got two toilets right now that are, you know, you know, like you got to jiggle the handle, you know, because they’re running. So if I was a plumber, I would do content. Such as, Hey, you got that, you know, you have to jiggle that to, uh, to get that water to stop running and you told it, well, here’s how you fix it.

[00:14:54] And now you become the educator. Okay. Now, at some point, you’re going to, you’re going to be able to present your, your offering, which is hell. Hey, by the way, if you, you know, if it’s, this gets too big for you to handle, or you don’t have the time to handle it, give me a call. I’d love to be able to help you.

[00:15:11] And so it’s really about educating first and then, and then saying, Oh, by the way, I can do this, save you time, save your money, save your hassle, or maybe it will cost you a little bit of money, but the very least, I mean, trust me. You don’t want me turning a wrench at the very least. You’re not going to break something to cause, you know, more harm rather than, uh, rather than health.

[00:15:30] Frank Felker:

So you mean things like, uh, blog posts and videos or what, what, how are we going to educate our, uh, target tribe?

[00:15:37] Dan Rochon:

Social media. There’s two words in social media, one of which is media. So when you can consider media, you know, you can consider, you know, posting on YouTube, posting on podcasts, like what we’re doing right now.

[00:15:54] You could consider, you know, Facebook, Instagram, Tik TOK, all the different social media platforms is really linked in is really, you know, figuring out like what’s relevant because each different, um, you know, Instagram is going to be different than YouTube. There’s going to be different than, um, Tik TOK.

[00:16:11] So it’s figuring out what’s your platform and then. What do you do within that platform? Frank, something that I know that you do an incredible job is we call this Buffaloing. Okay. So what I mean by Buffaloing is the native Americans, when they would, uh, when they would kill a Buffalo, they would use every single part of that Buffalo to some sort of effect from the hooves to the blood, to the, to the meat, to the, the fur, every single part of that Buffalo was used.

[00:16:38] So when you create content, and again, this is why I mentioned that you do such a great job with Frank. Frank. Is you take that one long form of content and then you slice and dice it to multipurpose it for the appropriate venue. And so, um, something that may be appropriate on the Instagram is going to be different than on YouTube or whatever the case may be, but you can do just a conversation, just like what we’re doing right now.

[00:17:02] And you can edit that. You can put it into shorts. You can put it into reels. You can put it in all kinds of different cool stuff. And then you could take one, a one, one hour presentation, and you could have enough content for an entire month. If you chose to repurpose it in that way.

[00:17:17] Frank Felker:

That’s a fact. And I was wondering where you’re going there because just like, we don’t want to call Dan.

[00:17:23] to fix our toilet. You don’t want to call Frank to butcher your buffalo. Uh, I’m definitely not that guy. Uh, I, I faint at the sight of blood. Many nurses can attest to that, but in any event, uh, you’re right. And once you have captured that content, once you can slice it and dice it and, and all of these platforms give us a great opportunity to connect with our target market.

[00:17:48] Now, let’s keep moving forward. Your next bullet point is establish authority in your niche. And you know, it may be that you’ve already pretty much answered that question as far as how to do that. Um, but how, if you would just give a quick idea of how the effective and engaging content helps establish you as an authority.

[00:18:11] Dan Rochon:

There’s one person in this world who can go to the president of the United States And ask that president now, let’s not get crazy here besides the president’s wife. All right. Right. And ask that president to take down his pants, bend over and cough is the president’s doctor. Okay. Now what causes me to say that because the president’s doctor in that situational relationship has more authority than the president of the United States does.

[00:18:49] In that one context. So I’m demonstrating that. So if you ask about authority, when you gain authority in your own realm, you can become more powerful than the president in a certain situation. Okay. And so that’s the approach that you want to be able to take within your business. Now, the way, again, it goes back to teach yourself.

[00:19:10] How do you become an authority in your own business? You become an authority in your business by having the knowledge, but guess what? Just like what you just asked, you say, okay, what do you do with that knowledge? Now you’ve got to take that knowledge and you’ve got to, you’ve got to present it to the marketplace.

[00:19:25] You’ve got to be that guy or that gal that people look to. That people like when I need a problem solved, I’m going to Frank, I’m going to Dan because Dan specializes in this realm of knowledge, Frank specializes in this area of knowledge, and when you could be able to not only have an expertise, but also teach that to others.

[00:19:48] Through the many vehicles that we all have available to us. Then you become that authority.

[00:19:56] Frank Felker:

Very well put. Uh, the next bullet point is engage with your audience. It sounds like we’ve covered that very well. Is there anything we have not covered about engaging your audience?

[00:20:06] Dan Rochon:

Well, you can be strategic. So one of the things that I do, for example, on a daily basis, I’ve got a few thou well, I had to redo my Facebook a few years ago.

[00:20:14] I used to, you know, be max out of 5, 000 friends. And what I did when, you know, I use that as an opportunity, somebody hacked my Facebook and they, they, you know, uh, they put it to rest my old Facebook. And so I use that as an opportunity. I said, okay, well, I’m going to rebuild this book as I rebuild it. I’m going to rebuild it with my avatar.

[00:20:31] And so today. I have 3, 500 or so, something like that, you know, a decent amount, but not, it’s not maxed out. And, um, and what I do is I’m strategic on the engagement. So I’m thinking before I want somebody to see something to say, what would Facebook want to know if Frank. Is friends with, with Dan on Facebook, how would Facebook know that Frank wants to see what Dan posts, you know, on a regular basis?

[00:21:02] Well, the strategic way, the tactical way to do that is. Each day I go into 10 of my friends randomly. I type in Q and see who comes up, R and see who comes up. And I go in, I look at their feeds and I say, Hey, nice dog. And so now when I say nice dog to Frank, Frank says, huh, thanks so much. Now we’ve engaged back and forth.

[00:21:22] So that’s using the engagement smartly. So now when I post something that I want the as many people as possible to see, Frank’s very likely to be one of those people who’s going to see it another smart way that you could do things such as like using YouTube. For example, I do regular YouTube videos when I do a YouTube video.

[00:21:42] It’s the strategy that we employ with that is. We’ll post the YouTube video at the same time as we post the YouTube video. I’ll send out an email to my, uh, to my market list and it’s, I’ve got a large market list, right? So there’s around 30, 000, I’ve got two market lists, one around 30, 000 email marketing and another around 30, 000.

[00:22:00] So around 60, 000 is divided into different categories, but most likely it’s going to go to one of those two, 30, 000 people. So if you consider the, now you may not have 30, 000 in your market base. That’s okay. Once upon a time, I did not either, but you got to start somewhere. Okay. So I’m going to post a YouTube video.

[00:22:16] The second I post a YouTube video, I’m going to email it out to my audience and then I’m going to advertise it 5 a day for seven days. I regularly get thousands of views on my YouTube videos on the no broke. If you search no broke months on YouTube, you’ll find them. And I regularly get thousands of views by just employing that one technique.

[00:22:37] So you post it, you email it out to your thousands of people or hundreds of people or tens of people or however many people you have, and then you advertise it for whatever you can afford for seven days. And you will be amazed at the engagement that you’ll get by that one technique.

[00:22:52] Frank Felker:

That was a great tip, Dan.

[00:22:54] Thanks for sharing that. Really good. I know one person who’s going to use that idea.

[00:23:02] Okay, the last bullet point is convert learners into customers. And, uh, obviously that’s the object of the exercise. That’s what feeds the bulldog, as we like to say. How do we do that? How do we convert learners into customers?

[00:23:19] Dan Rochon:

Well, you have to understand that when you’re, when you’re, when you’re selling a product or a service, oftentimes, I mean, there are times where you can create an emotional desire for something.

[00:23:32] Okay. Uh, if you’re walking in the mall, for example, they take the little perfume package and they’re like, Hey, pretty mama. Here, check this out. Right. You know, they don’t say that to me anymore. Right. But I’m just teasing. Um, but pretty daddy, I guess. Um, so you can like try, you can intend to create some sort of action Okay.

[00:23:52] To in conversion. Right. But what I find is more likely. That you’re not able to create a desire as it is that the desire is going to be a situational type thing. So for example, if you’re an auto mechanic and you want to, you know, sell more services, well, unless it’s something breaks in somebody’s car, they’re not going to come to you and just say, Hey.

[00:24:13] Come fix my brakes. They’re not broken, but I want you to fix it, right? That’s not going to happen. And you can’t manufacture that like the guy with the perfume at the mall can. But what you can do if you’re that auto mechanic is that you could set yourself up for success so that when my car breaks down and I don’t want to create that as a reality anytime soon, right?

[00:24:34] That I already have somebody that I know, like, and trust. This goes back to teach to sell. How will I best know, like, and trust them? I’m going to best know, like, and trust the guy that I see on the different media, different social media, that’s educating the consumers. And now in that case, when, when I have the need, I’m already as a consumer thinking, Oh, I’m going to call this person right here because they can be able to help me.

[00:25:04] Then. The service provider. So now let’s flip the seats and let’s say, now I’ll call you the service provider rather than the guy that needs the mechanic, the service provider’s job is to be able to really what I call the CPI communication model, which is to be in rapport. So rapport is a connection of energy.

[00:25:22] Rapport is we’re, we’re, we’re spiritual beings, you know, you know, um, housed in this human condition. Okay. So we’re spiritual beings in a human condition. Rapport is your spirit and my spirit inter interacting with each other. So service provider, number one is being rapport. Number two is ask adept questions.

[00:25:43] And an adept question is really coming from a place of curiosity, such as like, what is your need? You know, if it’s the, again, if it’s the mechanic, well, tell me what’s rattling. Tell me, you know, when’s the last time you had a service? When have you changed the oil? That type of thing. Then actively listen.

[00:26:01] Okay. So as somebody who, who can improve your communication, what are you actively listening to and for what you’re actively listening to and for is not just the words, but it’s that, remember I told you about rapport as a connection of energy you’re actively listening to, and you’re actively listening for the connection of that energy between you and I.

[00:26:25] The C is a hesitant, Hey, do you want to buy? Yeah. Well, does that really sound like a yes? Yes. It doesn’t sound like a yes to me. You heard the, yeah, that’s a yes, sort of. But when you’re paying attention to the energy, you can say, wow, that person is not committed. The worst thing you could do as a sales professional is to get somebody who’s not committed to buy from you.

[00:26:50] Uh, because that’s when the problems are gonna, are gonna arise. So you could simply take that. Yeah. As a smart salesperson and say something like, is that a yes? And I’ll say, well, yeah. And you say, is that a yes? Well, yes. And now you can see the change in the transform and energy went from a hesitant, yes, to a, aren’t you freaking listening to me?

[00:27:13] I said yes to you four times. Yes. Yes. Right. And now the energy from that, uh, from the person you’re selling to is like a a hundred percent. Hell yes.

[00:27:24] Frank Felker:

That’s great. Wonderful stuff. Well, Dan, I know, um, your book, this, uh, you have one book out on the market and this book is in pre publication and we’re looking to pre order your book.

[00:27:36] Where do I go to pre order?

[00:27:39] Dan Rochon:

When you visit NoBrokeMonths.com, you’ll have an opportunity to pre order Teach to Grow Rich. How to increase your influence, avoid the number one sales mistake and get what you want. And because it hasn’t been published yet, and I want to be able to provide you value up front.

[00:27:55] When you get that, you’re going to get a bunch of free goodies and electronic swag bag, which include the work worksheet, 11 ways how to believe in yourself. The, uh, a paragraph, a chapter of a book. You can’t lie to me from body language expert, Janine driver, how to get people to call you back guaranteed and many other assets of goodies that I’m going to be able to give you as soon as you pre order, you can get all those goodies and more in electronic swag bag.

[00:28:21] Because I want to be able to, just like what I was saying, I want to be able to educate you up front. I want to teach to sell. I want to be able to help you. I want to be able to be your guide. And if you’re want to learn how to become a better persuader, a better salesperson, a better parent, a better, whoever it is.

[00:28:41] I want to be able to earn your trust. So I’m going to give you a bunch of free rate education tools. When you visit www. nobrokemonths. com to pre order teach and grow rich.

[00:28:52] Frank Felker:

That is awesome. You definitely bringing it strong to the mic today, Dan. Now there’s always one question I like to ask before we sign off, which is, is there a question I have not asked you that I should have, or a thought that’s come to your mind while we’ve been talking that you’d like to share before we go?

[00:29:11] Dan Rochon:

A thought that has come, um, before me, something that I would share with you. And I don’t know if there, you know, there was a context to ask this question, but something that I would say that if you want to achieve something. In your life. We talked about, you know, earlier in the conversation about believing in yourself, but I’m going to give you something specific to believe in.

[00:29:31] I want you to believe that you have the ability to figure it out because you may or may not, you know, I say, believe in yourself. I think that’s too general. And for years, I used to teach that to my audience and to my mentees and the people that I coach and not too long ago, I said, well, wait a second.

[00:29:47] What does it really mean to be able to believe in yourself? And if I believe in myself, what do I have to believe about myself? And I’ve sort of distilled that to one thing, which is I can believe that I’ve got the resources. I mean, geez, Google chat, GPT. If you can’t figure something out in this day and age, it’s because you’re not trying.

[00:30:13] So when I believe that I can figure something out, that’s the basis to having that really strong faith in yourself to be able to achieve whatever it is that you are meant to achieve.

[00:30:30] Frank Felker:

You’ve left me speechless, Dan, and that’s a hard thing to do. I got to tell you that was strong. Dan Rochon, thank you so much for joining me today on Radio Free Enterprise.

You’re welcome.

Thanks again to Dan and thank you for joining us until next time. I’m Frank Felker saying, I’ll see you.

[00:30:54] Dude Walker:

You can’t seem to turn a profit? Is that what’s eating you, Sparky? Well, you’ve come to the right place. Radio Free Enterprise.

A fantastic conversation with Marty M. Fahncke and Doug Wick on the topic of Building a Business Operating System. If you’re serious about building a business that can operate profitably without your day-to-day involvement, or you’re looking to sell your business for the highest possible price, do yourself a favor and tune in!

Books Recommended During The Interview:

The E Myth
Why Most Small Businesses Don’t Work and What to Do About It
https://amzn.to/3zhIC4F

Mastering the Rockefeller Habits
What You Must Do to Increase the Value of Your Growing Firm
https://amzn.to/3zwqcgp

Metronomics
One United System to Grow Up Your Team, Company, and Life
https://amzn.to/3Twy8oS

Simple Numbers 2.0
Rules for Smart Scaling: A Play by Play Analysis for Pure Growth
https://amzn.to/4emNLXW

Double Double
How to Double Your Revenue and Profit in 3 Years or Less
https://amzn.to/3XzCqx4

Vivid Vision
A Remarkable Tool for Aligning Your Business Around a Shared Vision of the Future
https://amzn.to/4d3IyDb

3hag Way
The Strategic Execution System that ensures your strategy is not a Wild-Ass-Guess!
https://amzn.to/3Xvdsyy

What follows is an AI-generated transcript of our entire conversation. Please excused any typos!

[00:00:00] Doug Wick:

The only businesses that really thrive are those that realize we have to get our people to perform predictably and consistently, otherwise we really don’t have a business. We have a bunch of people running around, uh, doing their, uh, you know, changing the muffler one way. And not having any consistency and predictability.

[00:00:18] If you look at an automotive business. So really the operating system allows you then to predictably and consistently deliver on your promise and, and, and develop a promise, develop a vision, many businesses fail to even get to the point where they create a vision. And, and so they’re operating from no system at all.

[00:00:41] The people don’t know what they should be doing or what to follow. Um, and so that just leads to confusion and chaos and why more businesses fail, because there is no system to deliver the promise of what their customers want.[00:01:00]

[00:01:05] Dude Walker:

And now it’s time once again for the show that gives glorious voice to 25 million business owners across the fruited plain radio free enterprise with Frank Felker.

[00:01:20] Frank Felker:

Thank you, Dude Walker. Yes, indeed. I am. I’m Frank Felker. Welcome back to Radio Free Enterprise. Today I bring you two guests, Marty Fahncke, who’s a mergers and acquisitions expert with Westbound Road in Olathe, Kansas, and Doug Wick, a strategic business consultant with Positioning Systems in Cedar Rapids, Iowa.

[00:01:45] Gentlemen, welcome to Radio Free Enterprise. Thank you, Frank. Glad to be here. We have an unusual show for you guys today. Uh, regular viewers and listeners will know that Marty Fahncke is a frequent flyer here on the show, and he’s also co author of with me of our upcoming book, Boomer sells the business.

[00:02:08] And it’s through, uh, Marty’s good offices that we have Doug here with us today. Uh, Marty invited Doug to join us to talk about What’s called a business operating system. What a business operating system is and why it’s so powerful. And Marty, I know you include writing an operating system as one of your seven steps to sale ready condition for any business owner that’s looking to sell their business.

[00:02:38] But my understanding is that you were not always such a big fan of the idea of business operating systems. And in fact, Doug was the person who got your thinking turned around on that. So if you would, let’s start with why you weren’t a fan and what happened that caused you to. Turn around on the idea and then invite Doug to be with [00:03:00] us today.

[00:03:01] Marty M. Fahncke:

Yeah, absolutely. I’d love to do that. Yeah. So, uh, thanks for that introduction. Um, yeah, so in my 30 year career, I’ve had, um, a lot of great successes and a few failures, but mostly successes, which, which have been primarily kind of running businesses, uh, by the seat of my pants, and, uh, I always figured. It’s working well.

[00:03:21] Why change anything? Um, well over a decade ago though, um, I was working with somebody at a business and, and the CEO said, uh, you know, I want you to read, read these books by, by Vern Harnish and, uh, and about the Rockefeller Habits and okay, I’ll check it out. And so, um, next thing I know, um, we’ve decided as a company that we’re going to employ this kind of Rockefeller Habits operating system and which involves like.

[00:03:50] These very intensely structured meetings and we’re, we’re, we’re going to go to, you know, we’re going to, we’re going to travel once a quarter to do these things. The structure [00:04:00] was just, I’ve never been a big structure guy. And so, um, we started doing these, these quarterly meetings with, with Doug, who was hired to help the company, um, go through this, go through this process effectively.

[00:04:13] And I was, I don’t know if I was your biggest pain in the butt client you’ve ever had, Doug, but I know I was, I gotta be top five. I gotta believe I was top five. Um, I just resisted so much of the structure and well, you know, the, the way it all kind of works didn’t make sense to me. And I caused, I caused a lot of problems, but it.

[00:04:37] I started to see the benefits and I started to see the results and I was like, Oh, now I, now I understand this. And, um, I eventually in my acquisitions career started working with, you know, hundreds and hundreds of different business owners who, um, were, were preparing or hoping to sell their businesses.

[00:04:55] And one of the things that I realized was that businesses that [00:05:00] had A written, documented, and structured game plan, um, whether that be through Rockefeller Habits or EOS or any, any other operating systems out there, um, are much better run businesses. The owners are, you know, Making much happier, they’re making more money and they’re a much more sellable business.

[00:05:22] And so having an operating system became one of the keys to effectively selling a business that, you know, that I’ve been talking about for, for many years. And now we’re including in, in the Boomer sells the business book. And so, I’m a believer. I fully understand now that why it’s so important and, and, and, and how, how critical it can be.

[00:05:42] And so we were talking about, you know, who should we bring in to, to, uh, uh, talk about these types of things. And I’ve since come to know many, many consultants who do all sorts of different, you know, everything from strategic coach to EOS and everything else. But I thought, you know, the person I need to bring in is Doug Wick.

[00:05:59] Cause [00:06:00] after what I put him through in those early years, uh, Um, he deserves to be the guy that gets, uh, that gets to tell his story about the whys and what’s of having, um, written strategic plans and written, written operating system for your business. And so that’s why I brought him in. So Doug, I’m so glad you’re here and I’m looking forward to you sharing your wisdom with everybody.

[00:06:19] And hopefully the audience is much nicer to you than I was back in those earlier days.

[00:06:24] Doug Wick:

Thank you, Marty. Thank you. I, you know, now that I remember, I recall you being a little, uh, Skeptical . It’s been a while. It’s been a while, but yes. Yeah, you’re bringing back some good memories. .

[00:06:41] Marty M. Fahncke: Well, and even back then, we were betting on football.

[00:06:43] I think The Chiefs, the Chiefs won something and you, you lost a bet and had to wear a,

[00:06:49] Doug Wick: I think it was, uh, the Vikings with Joe

[00:06:51] Marty M. Fahncke: Vikings. Yeah. And I have

[00:06:52] Doug Wick: to wear a five uniform, uh, Viking. Oh, .

[00:06:57] Frank Felker: That sounds painful.

[00:07:00] Doug Wick: It was. Very painful.

[00:07:03] Frank Felker:

Well, Doug, the prodigal son returns, Marty has reached out, and I really appreciate you joining us today.

[00:07:10] And I’m looking forward. One of the things I love about doing these interviews is I get to ask the questions I want to know the answers to. So it really helps me learn a lot. Let’s start from the beginning with your definition of what a business operating system is and why would we want one? And what makes it so great?

[00:07:31] Doug Wick:

Yeah, the, the value of, you know, and one of the reasons I think Marty, because he was in the creative area, we tend to think of creativity as being something that’s less structured. And so, um, what people don’t realize is the power of discipline and structure in. Helping, um, people be creative. And so I think that’s why most people battle against it.

[00:07:58] But in reality, [00:08:00] without that structure, you, you fall prone to, um, having very little consistency. Very little predictability and very little accountability as well in your business. And so the value of an operating system provides, um, a meeting structure, uh, a structure for how, um, the operating, uh, Uh, procedures in your business should run.

[00:08:27] The first coaching I did was with a gentleman by the name of Michael Gerber, who wrote the E Myth Revisited, uh, and why most small businesses don’t work and what to do about it. And the whole intention of that was that most business owners who start a business really are, um, nothing more than, um, uh, small business people who think that, you know, mechanic, who thinks because he knows mechanics.

[00:08:55] He can operate a business. And what happens is they end up working in the business. And [00:09:00] so the only businesses that really thrive are those that realize we have to get our people to perform predictably and consistently. Otherwise we really don’t have a business. We have a bunch of people running around, uh, doing their, uh, you know, changing the muffler one way.

[00:09:15] And, and not having any consistency and predictability if you look at an automotive business. So really, the operating system allows you then to predictably and consistently deliver on your promise and, and, and develop a promise, develop a vision. Many businesses fail to even get to the point where they create a vision.

[00:09:38] And, and so they’re operating from no system at all. The people don’t know what they should be doing or what to follow. Um, and so that just leads to confusion and chaos and why more businesses fail, because there is no system to deliver the promise of what.

[00:09:58] Frank Felker:

Their customers want. I have some excellent definition and explanation of the value of it.

[00:10:04] So if I could, what you’re saying would, the value of this would apply. Whether someone were choosing to position their business for sale Or if they just wanted it to be able to grow and to Allow them to remove themselves as much as possible from the day to day operation. Is that a fair statement?

[00:10:26] Doug Wick:

That is I I think you know I i’ve worked with a number of customers recently that they don’t even have a vision And and and without a vision for the business You don’t even know when things are, you don’t know when things are going right, and you don’t know when things are going wrong.

[00:10:43] It’s almost, it’s almost unfathomable to me to think that somebody wouldn’t think of that. But I think I can remember the very first, um, sales management job I had. I was, you know, I was, um, I became a sales manager after being a salesperson. And I think the very [00:11:00] first year I didn’t have any structure at all.

[00:11:02] I kind of went, you know, these people know what they’re doing. They can do it on their own. And what I almost got fired, you know, my, my, my general manager sat down and said, Doug, you’re too good to fail here. Either you got to improve or, and so I got a mentor. I. And, and, uh, followed, developed a system on how to get them to create their goals, create their own system for how they were going to get there.

[00:11:29] And then it was simply a matter of, uh, on a weekly basis, sitting down with them and saying, okay, are you doing these things? And most of the time they weren’t and they needed to be reminded. And when they got back on track and we’re following this, the activities, the system they had set up to achieve their goals.

[00:11:46] Lo and behold, they were, they’d stay on track and, and succeed. And so it’s that same idea. You got to have a vision. You got to have, uh, systems and activities that you follow [00:12:00] rigorously, just with, with discipline. And that allows you to stay on track and for yourself, deliver on the goals. By attending to the activities and therefore satisfy your customers, which ultimately the only reason to be in business is to satisfy your customers.

[00:12:18] And when you do it consistently, they reward you.

[00:12:20] Frank Felker: That’s what it’s all about. Isn’t it?

[00:12:23] Doug Wick: Yes.

[00:12:23] Frank Felker:

You know, you talked about moving from salesperson to sales manager. Those are two entirely different jobs, obviously. You found that out. And it’s similar to what you talked about, the auto mechanic who wants to open his own shop, or from my background, the printing press operator who wanted to open his own print shop.

[00:12:40] It’s a completely different, uh, job. And I love, uh, Gerber’s book, and I love that subtitle, What’s Wrong With Every Business and How to Fix It. Um, but, uh, I guess what I’m driving at is. Do sometimes people come to the realization that maybe they want to go back to being a [00:13:00] mechanic instead of running an auto shop?

[00:13:02] Do you ever run into that?

[00:13:04] Doug Wick:

I have, you know, a number of times we had a, um, a value guarantee with, um, all of my, um, coaching. I’ve had a value guarantee. If you’re not satisfied within, in one case, it was three meetings. And now it’s usually within three minutes, three months, I will, um, you know, I will give them back their entire investment.

[00:13:26] If that’s, they feel that, or, or whatever they feel it was worth at that point. And I can recall a couple of customers. One, uh, one was a restaurant owner who’s. Um, wife was the cook and she decided to divorce him. So he said, I’m going to, yeah, that was, that was a difficult and another one who simply told me he ran a, um, a school supply and he said, you know what, this is too much work.

[00:13:51] I don’t want to do it. I’m I’ll just run my business the way it was. And now I’m, I’m going to get out of it, you know, because it was to him, [00:14:00] too much of an investment of his time. Compared to what the way he had been doing it. So those were the two cases I can recall where I own, where I had to, uh, give back the investment that they had provided.

[00:14:12] Uh, and usually it was very shortly after I got started like one or two meetings in.

[00:14:18] Frank Felker:

Now, what types are, or let me put it a different way. Is an operating system more effective or make better sense for certain vertical industries and, or. Businesses of a certain size.

[00:14:33] Doug Wick:

Well, if the only size that I can think of that it wouldn’t make sense for is or and even then I think it would make sense just one person, right?

[00:14:43] You know how to do it. So, you know, but if the minute you start hiring one person or two people or three people, the complexity. Of your business, more than doubles with each person you, you add. And so [00:15:00] somehow I, if you want to run a consistent, predictable business, you need to, you need to have documented systems so that people follow that procedure, because otherwise they’re going to fumble around.

[00:15:18] If you’ve been doing something a certain way and it’s been successful, then why would you, why would you not want the next person to do it as well that way? And, and then the documentation also allows you the opportunity to go, well, it isn’t working. Let’s look at it and evaluate it. And maybe we can tweak this.

[00:15:41] Maybe we can tweak that. And you can make those adjustments. And actually what you should be doing then is measuring the outcomes, of course, as well to determine did that tweak help or not. And that’s something too frequently that businesses don’t want to take the time to [00:16:00] do. And in doing so, you know, they fail to learn and fail to grow.

[00:16:06] And in many cases, that’s why businesses fail.

[00:16:09] Frank Felker:

So Doug, you coach the Scaling Up system, also known as Gazelles, and it contains four components, uh, or four decisions, uh, people decisions, strategy decisions, execution decisions, and cash decisions. Now, let’s start with the people decisions. I love this.

[00:16:33] Getting the right people. In the right seats, doing the right things, right is the first order of business. Let me read that again. Getting the right people in the right seats, doing the right things right is the first order of business. So, that seems pretty, uh, self explanatory, but what, what does that really mean for a, If you could give us like a sample business.

[00:16:56] Doug Wick:

When I introduced those four decisions, I usually [00:17:00] share with those, with my customers, what’s the outcome of getting people’s strategy and execution right. And I define people by a harmonious. Uh, culture of accountability in essence that helps people understand and in fact when I go through all four of them and give the definitions, we usually arrive at, um, one of those four.

[00:17:27] That is giving them the most pain. It’s like the rock in their shoe that constantly is aggravating them. So in the case of people, a harmonious culture of accountability tells you, are you people getting along and are they accountable? Are they, are they getting things done? And in order, um, to achieve that.

[00:17:48] And if you’re, you’re not achieving that, we have tools and resources to help you do that. First of all, it starts with hiring and we, we, uh, uh, provide. Uh, [00:18:00] resources to help them use the top grading methodology, which is what, uh, GE used to hire a players at their, uh, when, when Jack Welch was there. Uh, and it’s a, it’s a very thorough process that helps people identify, uh, you know, what are the job accountabilities, what are the, the, uh, metrics that they should have?

[00:18:19] What is the cultural, um, makeup? In other words, you’ve got a, you’ve got core values you should be interviewing to make sure that the people you’re hiring. Have the same values that your business has and so all that is incorporated There’s a it’s a long interview process And and then there’s elements of that as well that we go through in the performance appraisals and so forth that use that same Scorecard that we hired the person for to help with the evaluation process I’m not a big fan of Believer in having evaluations on an annual basis.

[00:18:58] I think people should be [00:19:00] evaluated every week if possible and, and certainly no less than monthly. And it should be based on a objective and subjective criteria. The objective being, these are the metrics. The accountabilities you have and the subjective being the ones that are the core values of a business.

[00:19:19] So that’s, that’s in essence, the people part of the business. I, and how to achieve the, that, uh, harmonious culture of accountability.

[00:19:30] Frank Felker:

That is wonderful stuff. I learned a lot from you right there, Doug. I, uh, I produced a number of years ago an online course called How to Hire and Keep Great People, and, uh, I’m hoping to get that also turned into a book at some point in the future.

[00:19:44] But the idea of doing, uh, Uh, evaluations that frequently, uh, that, uh, that sound, it makes a lot of sense, but I could see where a lot of managers and owners would shy away from that. I’m sorry, I don’t want to go down a rabbit hole on that. And in fact, so many things that you said [00:20:00] we could spend an hour on each point, but unfortunately we can’t do that.

[00:20:04] So the next, uh, group of decisions are strategy decisions. And from the research that I did, I found that. Gazelles has something called seven strata of strategy. Now, we don’t have time to delve down into all those strata, uh, but can you give us just sort of an overview of what areas of strategy you develop as part of the creation of this operating system?

[00:20:30] Doug Wick:

Yeah, strategy, um, going back to the idea of what’s the outcome. Strategy is, uh, the outcome of getting strategy right. Is top line revenue growth. And, and really what we mean by that is you should be growing faster than your industry. Um, probably about 10 times faster if you have the correct strategy. And so, um, not 10 times, 10 percent faster.

[00:20:57] I’m, I’m sorry. Thank you for correcting me [00:21:00] there. And there, you know, there’s a number of pieces in that, what, what Vern found in that, uh, to briefly talk about the seven strata of strategy during, uh, during 2008 to 2010 when the country was going through a recession, he looked through, um, the, um, uh, the businesses that were doing well at that time, despite the recession.

[00:21:22] And what he found was that those businesses that were doing well had these seven elements included. They had, um, a distinction in terms of a differentiating extinction. They had a one phrase strategy. They had a brand promise and several other things. And so, um, one of the other tools that I use is, um, from, um, uh, metronomics that, um, is very closely related to, um, um, scaling up.

[00:21:48] And there’s a key attribution framework, very similar to what, how a key, uh, And Southwest Airlines determined where are we going to be? What you have to do is identify [00:22:00] how are we different and then plan for the next three years, how are we going to exploit those differences and, and really then project that over to the future.

[00:22:11] The next what it would be, um, uh, 12 quarters, how are we going to take this advantage, um, that, that we’ve identified, we usually try and identify three to five different, um, attributes that you have a distinct advantage over your competitor and then expand upon them. So within three years, you have an idea, this is where we want to be in three years, which helps that gap increase and therefore increase.

[00:22:43] The value customers perceive you at that’s part of the idea of top line revenue growth and how you can build yourself. What another one is, um, an X factor, um, which is having a, uh, a 10 time advantage, which is difficult to do, but most companies don’t [00:23:00] even start looking at that. I had a car wash that was able to actually determine, uh, I can remember him struggling at, this is a long time ago before I think car washes realize the value.

[00:23:11] Of, um, the, um, carwash memberships. And, and he was in a, a, uh, workshop where he was thinking about getting rid of, because he said, well, these people have, um, credit cards and every month, I don’t have anybody to call them. And, you know, a lot of them are having problems with their credit card. They’ve been, uh, defrauded or whatever.

[00:23:32] And so we just don’t even, we’re thinking about canceling it. And when he went through and looked at the value. Of those customers who are membership customers paying him, you know, um, a membership fee. Whether the car wash was open or not, and they would pay him at the front front part of the month. Every month, he recognized those customers were 10 times more valuable than his [00:24:00] regular customers.

[00:24:00] That was back in like 2009 or 2010. And I think you’ll see, I think you see if you go to a car wash now, they’re almost all Uh, trying to get you to be a member. And what he did was he revamped his whole business. He says, Doug, I’m not in the carwash business. I’m in the membership business. And he focused on customer satisfaction and, uh, he has.

[00:24:21] He told me when I talked to him just about two months ago, he said, I have a million dollars in revenue coming in every month just on my memory. Yeah. He’s got nine car washes out in the San Francisco Bay area. So he’s doing very well.

[00:24:36] Frank Felker: God bless him. That’s amazing.

[00:24:39] Marty M. Fahncke:

So it sounds like chime in here really quick.

[00:24:42] Sure, because this is, it’s incredible that you’re talking about car washes, Doug, because I actually use this as a case study for a whole different reason, which is, um, a regular service based car wash, valuation multiple of a business is probably going to be around three [00:25:00] times, maybe three and a half times its profit in value.

[00:25:03] So if it’s doing 12 million a year and it’s profiting, Let’s say 2 million a year, the, the owner could sell that for probably 6 million, but here’s, what’s interesting is by turning that into a membership business, um, that same 12 million a year doing 2 million a year profit is worth somewhere between seven and nine times its profit.

[00:25:28] So that business could be sold for between 14. And 18 million, the exact same business. So there’s a whole other reason to, uh, to do that. So I didn’t know you were going to talk about a, uh, a recurring revenue model case study, Doug, but Oh my gosh, it’s so huge. If you, if you’re a business that can do that, and by the way, any business could do it.

[00:25:51] Um, people don’t think about it, but any business could do it with a little creativity. All right, sorry. I’m going to jump back out, but there’s a massive difference in those two business valuations for [00:26:00] the exact same.

[00:26:00] Doug Wick:

Yeah. Yeah, we have a, we in, in the strategy element, um, of our scaling up work, we have a specific slide deck that we look at the different models of recurring revenue to help our customers build that and, and, and actually locate or identify an opportunity with a recurring revenue.

[00:26:21] Frank Felker:

phenomenal. Good point. That’s amazing. So, uh, thank you so much for, uh, joining in with that, Marty, because that’s what it’s all about, is the value that you’re building, the asset that you’re building over time, uh, and what a difference in terms of leverage, when really, the nuts and bolts of the business changed very little.

[00:26:44] Um, what I was going to ask you, Doug, it sounds like, uh, everything under those seven strata, it relates to marketing. Is that correct?

[00:26:53] Doug Wick:

Pretty close. Although, um, you know, as an example, identifying your X factor is not necessarily a, [00:27:00] um, uh, a marketing function as much as it’s a financial function and being aware of how your, um, your, um, business operates, but they are, they, a lot of them are very related to, uh, to marketing.

[00:27:13] Yes.

[00:27:14] Frank Felker:

Okay. I just, I’m always trying to make sure I understand what we’re talking about here. Um, okay. The next set of decisions. Uh, revolve around execution. So what is it you’re referring to in that group of decisions?

[00:27:30] Doug Wick:

Execution again, the outcome, uh, or the result of getting it execution, right, is What I’d call profit or efficiency and profit is the best measure of whether or not your business is being efficient.

[00:27:44] And so what, what we need to do there, a lot of this is systems related, but very much so it’s involved in the meeting rhythms. We call it a cadence of accountability where you have, um, meeting rhythms, uh, [00:28:00] daily huddles, weekly meetings, monthly meetings, quarterly meetings, annual meetings, then you have a dashboard that.

[00:28:07] Monitors the goals for the year and for the quarter. And most importantly, you know, once you break down the year, then you divide it into four quarters with the idea of we’re going to focus on this one thing with some associated, um, priorities as well. But usually every quarter has a one thing focus and the rest of the objectives or.

[00:28:32] Priorities. I think I use that term loosely are hinged on making that one priority so that you’re moving the needle, so to speak, on the business, improving and performing better. And so again, a lot of times what we do at the very beginning is decide which of those four decisions are the most critical.

[00:28:58] And that’s then [00:29:00] what we decide, okay, we’re going to focus on people this, you know, in hiring the right people. And so then we break down into themes. And quarterly priorities, each of the, the quarters so that we’re focusing on an aspect of probably hiring people, um, uh, motivating people, coaching people and so forth as we go through the year.

[00:29:21] Frank Felker:

You know, one thing that occurs to me is that, uh, I use the expression sometimes, uh, when trying to coach somebody who’s thinking about, uh, becoming a business owner, uh, an aspirational, uh, entrepreneur, shall we say. And as I use the expression, it’s serious business. And the reason I bring it up here is as I’m listening to you.

[00:29:45] A business owner who would implement this type of stuff is serious about their business. They’re not playing around. They’re, they’re serious about execution. And, um, so it’s something again, like, uh, you mentioned those two people who decided they didn’t want to be [00:30:00] in business anymore. It’s not for everyone, is it?

[00:30:03] Doug Wick:

No, it isn’t. I, I, and I find, you know, unfortunately that some of the, you know, I, I have one client who’s been, um, back and forth as a, a customer and his biggest problem is he, He, uh, I think he likes the drama of being interrupted constantly. And so he never, he never, he cannot, he can’t get into routine when we’ve been, when I’ve been coaching with him, it’s been frustrating.

[00:30:29] And I’ve finally decided I can’t work with you unless you’re going to dedicate the time and get him providing one hour or an hour and a half for us to meet. And then for him to set those times up to have his team, his leadership team me. It’s just, um, something you just, you know, it, it, um, it doesn’t work for him because he likes to be either a free spirit or not be governed by, um, [00:31:00] that kind of regimen and that kind of routine.

[00:31:02] And

[00:31:03] Marty M. Fahncke:

I’ve seen something in business owners where they, it’s a, it’s almost an ego or a, or a self, um, confidence thing. It’s like, um, If, if, if everybody doesn’t have to come to them for everything, then they feel like they’re not important. And of course we know how successful a business is where the owner has to decide every decision.

[00:31:26] Doug Wick:

It’s usually not, but I don’t think they don’t get it. That that’s not, you know, when, if everybody’s coming to you, That’s not a business, you know, right.

[00:31:34] Marty M. Fahncke:

But they think that if I’m not needed, then I’ve lost my value and self importance. And so I think some of, I see business owners who almost self sabotage success for that desire to be needed, everything to go through them every day.

[00:31:49] Doug Wick:

Yeah, it’s kind of odd because this guy goes, I’m a smart guy. Why don’t, I’m trying to tell him, but it’s just like, It just hasn’t clicked with him that [00:32:00] that’s um that that he needs to let go, you know And he needs to hire people to take care of the things that he’s right being bombarded with constantly

[00:32:11] Frank Felker:

I worked for a guy one time who uh Was the ceo of a 400 million dollar privately held business and he Always, uh, showed up for every meeting on time and, uh, and any time, whether it’s a client or you name it, I’ve got somebody telling me they’re too busy, uh, you know, to show up or even call and let you know they’re not going to make it.

[00:32:36] I think about that guy and think, yeah, nobody was more busy than that guy. Uh, so the final, uh, group of decisions revolve around cash. There’s a whole list of them here. One that I thought was great. I love the expression, had not heard before. Harvesting the profits and distributing them as dividends. I really like that expression.

[00:32:58] So, in addition to [00:33:00] that, what, uh, sort of cash decisions is. Will we codify in our operating system?

[00:33:06] Doug Wick:

So, you know, cash is really, um, again, going back to the idea of what’s the outcome of getting cash, right? That, that decision, right? The cash decision is about oxygen and options. I like to tell my customers that when.

[00:33:26] Newborn, uh, is in, you know, is brought into the world. Love is like oxygen to a baby. All right. Well, to a business, oxygen is cash. You can’t operate your business unless you have cash. And I think too many business owners don’t realize how valuable cash is to the growth of the business. If you don’t have cash.

[00:33:54] You can’t keep funneling the growth of your business. I learned that very early on in [00:34:00] my career. When I was in radio, we were, we, we set out, um, one year, the very first year to, I think, do a half million dollars in business, you have to put up a radio tower, you have to put up a building, you have to hire, you know, like 10 different people, well, all that sucks cash and growth sucks cash.

[00:34:20] So you have to figure out how are you going to. Cashflow this business. What kind of funding do you need up front? And most importantly, how do you get your customers to fund your growth? You know, Marty knows this more than anything. The cash part of the business is really what determines the value of your business.

[00:34:42] And so when you have cash. You have options. You have options to, you know, my other, that, that customer I was talking about, they, they literally buy every one of their competitors because they have a lot of cash and that’s been working, but I don’t know how long it’s going to continue to work for. So if you have [00:35:00] cash in the bank, It increases the value of your business.

[00:35:05] And so what we try and teach our people with, we have something called the cash flow story, which is a, is a software that, uh, an Australian company has put together that looks at a business and helps them decide there are seven levers that either lead to greater profit or cash or both. A lot of times what people don’t realize is that just raising your price can have a significant effect on, um, your cash and your profit, but significantly on, on your, uh, cash flow.

[00:35:40] And most owners are really reluctant to do that and don’t evaluate the business that they have and recognize that they’re That some customers are losing money on or making such a margin You know a paper thin margin. They’d be better off not having those customers and [00:36:00] so that gets into the marketing aspect of two of that two is which is identifying who are your Best customers who are your ideal customers who buy you for a profit?

[00:36:12] Rewards you with loyalty as well. So there’s a lot to the cash flow process, but understanding that is so Important particularly for selling a business but for growing a business because if you don’t have to cash funds You’re constantly going to the bank and that’s gonna they’re gonna quit giving you money At some point, if you still don’t start showing a profit,

[00:36:36] Marty M. Fahncke:

I’ve got a, I’ve got a comment.

[00:36:37] So one of the businesses that I own, we just had this conversation, Doug, because of the process, as you’re talking about. And so I was working with my business partner on it. And that’s not this one that we’re talking about, but it’s a different one. And, um, there was an employee and he was like, well, I’d kind of like, you know, I’d kind of like to get rid of this employee, but if I, if I lose this employee, they’ve kind of got these dedicated clients that they’re [00:37:00] working with and I’d lose these clients.

[00:37:02] And I, I, I did some math and I said, well, guess what? You’re losing money. The amount that you’re paying this really overpaid employee is actually more than the profit margin of your, the clients that you’d lose if you lost that employee. So it fits exactly what you just said, but without doing that cash analysis, that never would have come to light.

[00:37:22] It was just like, oh, I don’t want to lose these, these clients. So I can’t get rid of this employee. And so we were able to make the right decision about a plan to do that. And part of that actually was raising prices because I, I submit here, we are in late 2024 that there is a, never been an easier time for a business to raise prices.

[00:37:41] And every business should be looking at where their prices are because we’re all getting, we’re all getting hit with, I mean, everything’s more right. Gas, bread, everything else, but even on professional services. There’s not a piece of software that I subscribe to that hasn’t had a price increase in the last 90 days.

[00:37:56] There’s not anything that I do that people have. I mean, well, sorry, we’re having to [00:38:00] raise our rates. Guess what? We’re almost getting immune to it, unfortunately. But for fortunately for a business owner is right now you can raise prices and people like, yeah, it makes sense. Like cost more, you know, you got to pay 10 percent increase or 15 percent increase.

[00:38:15] And there’s almost no resistance. A lot of business owners are like, Oh my gosh, if I raise my prices, all my clients will flee. They won’t. Maybe you’ll lose one, you know, more than make up for it by raising your prices. So your advice to raise prices, Doug, now’s the time to do it.

[00:38:30] Doug Wick:

Yeah. In fact, in fact, if you, um, if you don’t lose customers when you raise your prices, maybe something else is wrong with that.

[00:38:37] There’s a, um, there’s a, um, video. I. And, and it’s from Greg Crabtree. There’s a great book he has called Simple Numbers. And, uh, there’s a way to go in and look at your financials and determine what each of your employees is actually producing. So you can get a number on, we used, um, uh, one of my clients, we used [00:39:00] to his, um, formulas.

[00:39:01] When they were looking to hire a salesperson to figure out how much, um, is this person going to need to produce if we pay them 125, 000 and that kind of, um, uh, value when you can determine before you even hire the person, what they’re going to produce, what they need to produce. you know, helps you make decisions as you move forward.

[00:39:25] And if they’re not doing it in six months or nine months, maybe you need to reevaluate that higher and so forth. But there are so many ways that you can look at your employees numbers, your customer numbers to evaluate them to determine are they as profitable? Do you think they are? What value are they bringing?

[00:39:45] And maybe you even need to, uh, restructure your business to focus on a different customer because that’s where you’re making the money and you’re not putting enough resources to it versus putting resources to something that you’re losing money on or making [00:40:00] very little. So those are the types of things we do and help within the cash area.

[00:40:07] Frank Felker:

That’s great stuff, gentlemen. I really, every business could benefit from listening to what you two just had to say. I, uh, I have a thing I encourage my clients to do sometimes, which is fire the customer. Um, and it’s for that very reason, you’re either not making enough or For the amount of hassle they bring or you’re actually losing money.

[00:40:31] But you know, the old joke is making it up on volume

[00:40:37] Well, we are running short of time here I wanted to I Figured many people are watching and listening or thinking. Okay, I get it. I want the Benefits that come from having an operating system, structured ways of doing things, uh, being able to exit myself, uh, from the business, being able to maximize the value of my business for [00:41:00] sale and so forth.

[00:41:01] How do I get started, Doug? Where do I get started either outlining or writing my operating system?

[00:41:09] Doug Wick:

Yeah, you know, there’s any number of ways that, you know, the traction EOS, um, scaling up, um, uh, we, I naturally prefer scaling up, um, metronomics, uh, three egg way is another. Uh, example which follows very closely the same formulas, a lot of the same formulas that, uh, Scaling Up does.

[00:41:31] Uh, you, you could argue you could even go to the E Myth Revisited, although that probably is a little, that, that’s probably suitable for, for smaller businesses, but anything you can do to help systemize your business, uh, hire a coach, um, hire me. Thank you. Uh, but there are A lot of different operating systems out there and scaling up metronomics, um, EOS, those are [00:42:00] examples.

[00:42:00] And I would recommend just reading the books that are out there because if you read the book, you probably will go, this makes sense to me. This is what I’d like to, I could, uh, this process, this, uh, reading this book makes exactly what I think I could implement in my business. And, and then choose from, uh, either the book you’ve read or the options that you have to determine which is the best operating system.

[00:42:28] And, and then I would say even more is just as important is finding a coach that you feel you can work with somebody who’s going to hold you accountable. And that’s going to ask you the right questions to move you forward because that’s really what a coach is about. Asking the right questions and keeping your feet to the fire and making you accountable to achieving the results that you set out to.

[00:42:52] Frank Felker:

Wonderful. Well, the last question that comes to my mind is, let’s say we, we as the [00:43:00] business owner, Have decided to move forward with this and we’ve written our operating system and now we’re going to implement it. What sort of challenges are we going to run into? Uh, with, let’s say, our employees, our business partners, with ourselves, what, what sort of challenges do we need to be prepared to overcome as we move forward?

[00:43:23] Doug Wick:

You know, I think any business, just like Marty shared, there’s going to be people that are skeptical and you’re going to need to just ask them to devote time to it. 90 days to the system to follow it. There, there are a lot of software programs out there. You know, when Marty and I were working together, we didn’t have the software programs that we do now.

[00:43:49] Metronomics is a very good Um, software system that, um, it follows the process of they, they, they include the [00:44:00] job summary scorecards, the meeting rhythms so that people can go in their weekly meeting and type the information in for the meeting. It streamlines the whole process. It also then. Uh, keeps track of the revenue, the, um, uh, priorities that they have.

[00:44:18] And, and you, in fact, you go in there every day if you want, and you probably should be updating what you’re doing in terms of, um, the metrics for your business and it makes it really simple. And in most, uh, no time at all, that becomes kind of the Bible. For people to watch, to, for attending meetings, to keeping track of their, their metrics and achieving their, um, objectives and priorities for each quarter and that system, uh, because it’s a software system.

[00:44:51] Just makes this whole process a lot easier and, um, and simple to follow. So, um, I don’t, I’m not sure what Align has. I know, [00:45:00] um, uh, I shouldn’t say, uh, EOS has, but ScalingUp has another software system that they recommend, which is called Align, and that works very well, uh, to, uh, uh, they’ve, they’ve upgraded that and it’s very good as well to help keep.

[00:45:15] The people in the business and I would, uh, you know, aligned and consistent. I’d start with the leadership team and then cascade the system down to everybody else, because if the leaders don’t know what they’re doing and how to follow it, it’s going to be hard to get everybody else to follow it.

[00:45:35] Frank Felker:

Great, great advice.

[00:45:38] Now, uh, If someone did want to reach out to you, Doug, and ask for your help, what’s the best way for them to contact you?

[00:45:46] Doug Wick:

Yeah, my, my email address might be the best way. I can give you my phone number as well. That might be a little more difficult, but dwick at positioning systems. com and 319 [00:46:00] 393 2565.

[00:46:01] Again, 319 393 2565 is my phone number. Feel free to call me. I’m, um, you’ll either get my voicemail and I’ll call you right back. So, but email, email might be easiest and say it fastest way.

[00:46:15] Frank Felker:

I think your, uh, radio and broadcast experience came in there with that number again.

[00:46:23] Doug Wick: Thank you.

[00:46:26] Frank Felker:

Before we go, I always like to ask my guests if there’s a question that I have not asked you, but that I should have, or if there’s a thought that’s come to mind that you want to share before we go.

[00:46:38] Doug Wick:

You know, maybe it’s because of a couple of clients didn’t do this. That I, that I recommend that they do it. I would say one of the very first things you should do is write out a vision. Um, um, trying to, I can’t think of, uh, I think his name is Cameron Harreld. He has a, um, book [00:47:00] called, uh, double vision, I think it is.

[00:47:02] And he talks about being very specific about. Writing out your vision. Where are you going and why? Why are you doing this? I think a lot of times we forget about the why that we’re doing it. And when you combine that vision of this is where we’re going. So not only does the owner know, your employees know, you simplify by telling them the vision, how to act.

[00:47:34] And so, and the why does that as well. And when we don’t have those two working together, that’s where I think a lot of issues come in. If you know why you’re there, what your intention is in terms of what the business is supposed to produce, and why it’s producing that. You solve so many problems, so many issues, and not only that, [00:48:00] I don’t believe in motivation, I believe in inspiration.

[00:48:03] And the why provides the inspiration. So why are you in business? Communicate that. And I believe you’ll, you know, you’ll build a successful business.

[00:48:14] Marty M. Fahncke:

So Doug, it looks like Cameron Herald has two books that you might have been referencing. One is called Vivid Vision. And the other one is called double double.

[00:48:22] And you said double vision. So maybe you were combining the two.

[00:48:26] Doug Wick:

The one I, they’re both good, but I, the one I liked was double double, which is really about how to double your business. And he gives some very, it’s almost an operating system in itself there. Yeah.

[00:48:37] Marty M. Fahncke:

Yeah. The subtitle is how to double your revenue and profit in three years or less.

[00:48:41] So, um, interesting. I haven’t read that one before. It’s going on my reading list.

[00:48:45] Doug Wick:

Yeah. Cool. I think it’s very similar to, um, Metronomics, uh, Shannon Susco’s 3 Hag Way, which is in essence the same thing, although, uh, they get very good results. But the whole idea is to map out, [00:49:00] here’s what we’re going to do year one, here’s what we’re going to do in year three, and have a very, very, um, vivid vision on what that is going to be.

[00:49:08] Yeah. Well,

[00:49:10] Frank Felker:

Marty Fahncke and Doug Wick, thank you so much for joining me on Radio Free Enterprise today. Thank you. Thanks very much, Frank.

Thanks again to Marty and Doug, and thank you for joining us. Until next time, I’m Frank Felker saying, I’ll see you on the radio.

[00:49:29] Dude Walker: You can’t seem to turn a profit? Is that what’s eating you, Sparky? Well, you’ve come to the right place. Radio Free Enterprise.

In today’s ultra-tight labor market, owners of small and medium-sized businesses need to find creative ways to Hire and Keep Great People.

In today’s interview with Gino Palozzi, Chief Marketing Officer at DailyPay, I bring you a powerful new tool. Earned Wage Access lets your employees control when and how much they get paid, based on their needs – not the payroll cycle.

This level of access and flexibility has resulted in tremendous improvements in recruiting and retention success – as well as significant increases in productivity – for the hundreds of employers currently offering this service to their workers.

To learn more about how DailyPay could bring tremendous value to your firm and your people, connect with them at: https://DailyPay.com/SmallBusiness

What follows is an AI-generated transcript of our entire conversation. Please excused any typos!

[00:01:29] Frank Felker:

Yes, indeed. I am Frank Felker. Welcome back to Radio Free Enterprise.

My guest today is Gino Palozzi. Gino is chief marketing officer for DailyPay.

Gino, welcome to Radio Free Enterprise.

Thanks for having me, Frank. Appreciate the opportunity.

Gino, I’m very excited about having you here today. And I wanted to give the quick backstory of how this conversation came to be. I was I pulled up outside of a Wendy’s restaurant. I saw a big sign on the window, a big poster.

It said, we’re hiring, get paid every day. And I thought, wow, what a great way to hire and keep good people in a job. That’s notoriously difficult to keep staffed. After lunch, I went back home and I ran a Google search on get paid every day. And number one search result was daily paid. So I reached out to your communications folks and here we are today.

So Gino there’s a lot of nuts and bolts we’re going to get into on this, but I wanted to start with just a 40,000-foot overview. If you could tell us, my audience of small and medium-sized business owners. What daily pay is and the benefits that it brings for both employers and employees.

[00:02:50] Gino Palozzi:

First of all, I do eat at Wendy’s, so I can’t say the same as you, but they are a client, so that always helps. Daily pay is a simple mission, right? To effectively help people, who are working every day unlock the opportunities that, are afforded to them. And one of those opportunities is getting paid for the work that you’ve done, right?

So we want to help everyone who works make the most of every day. And, it’s, it is a simple mission, right? And the reason we came up with it really at its heart was we realized that there are a lot of challenges that people are facing, especially now more than ever, right? The workforce is struggling in many ways to keep up with their bills, to keep up with their schedule.

And one of the things that we found was going to be helpful is given that freedom, that control. Over their ability to access their wages as they earn them. It was, founded back in 2015. And since that time, we’ve really started to recognize how important this one benefit was to a many, a very diverse working group, whether they’re coming out of the retail space, QSRs like Wendy’s supermarkets, like Kroger, Target, these companies struggle.

Not just acquiring workers, but as you mentioned, keeping those workers keeping them happy, keeping them motivated. And one of the things that they’ve seen is this benefit that we offer. It’s simply just allowing them to do one more thing to make sure that they’re in the corner of the employees that work for them.

So those folks are more likely to stay and pick up more shifts and work harder. It’s a very simple concept, but a very powerful outcome that we’ve seen.

[00:04:31] Frank Felker:

And I do want to talk about the results that you guys have seen, there’s some amazing statistics about the impact that this opportunity to access what you call earned income, or what is the technical term you guys use?

[00:04:45] Gino Palozzi:

Earned wages, and it’s often referred to as earned wage access in the market. So I, I thought, by the way, Frank, sometimes people you’ll hear called on demand pay, but earn wage access is as clear as I think you can make it. It’s your money. You should have the right to access it.

[00:05:01] Frank Felker:

And I think that’s great.

And I told you a story where I took a job. It was actually quite a high paying job, but the two week pay cycle plus one cycle in arrears. And I had to move over 2, 000 miles. And wait over a month to get paid. And, that stretched me out a little bit. So this can impact almost anybody.

But when I thought back on my days, I had a printing company, family printing company. The most employees we had there was 10. I was a co founder and CEO of a dot com back in the day. We had 15 employees. The reason why I bring it up is because I could imagine specific people who worked for me back then who could have really made use of this opportunity.

Now, you touched on something just then that I wanted to go ahead and ask you anyway. It was my next question. When I saw this My thoughts immediately went to small and medium sized business owners because that’s my tribe. But I was interested to learn that you guys have been working with hundreds of quite large employers with large payrolls and finding all this engagement and benefit.

You mentioned Wendy’s and a couple of others. I noticed on your website, there’s some sports teams that use your service. And I also, I guess this is probably the best way for me to ask for your response. I saw where one of your clients, Hilton Hotels, was named the number one best place to work.

I can’t recall if it was either Fortune Magazine or Forbes. And I would have to bet that earned income access, or what you called it, is a big part of it. Earned wage access. Earned wage, I need to get that straight. Earned wage access. Yeah, that’s

[00:06:48] Gino Palozzi: all right.

[00:06:50] Frank Felker: So tell me about Hilton.

[00:06:52] Gino Palozzi: Yeah, so Hilton is a great client of ours.

They are certainly doing some amazing things, making sure that they’re taking care of their people, and it has paid off in the awards that they’ve won and the recognition they’re getting. We believe there’s certain industries where you see a lot of what, daily workers, frontline workers, hourly workers.

Hilton is one of those, right? Hotels, hospitality. We do work with companies we have a network of, sponsorships with sports teams, but that’s fundamentally supporting the concessions and the people working within the stadiums. So we’re really taking a look at people who, whether you’re working for a Hilton, whether you’re working for one of these hospitality groups or one of the large supermarkets doesn’t really matter, over, I think it’s somewhere like In excess of six out of 10 Americans are living paycheck to paycheck, right?

And 40 percent of Americans are finding it difficult to cover their expenses. These hourly workers and the daily workers that often make up a large part of not only the big companies, but a lot of the small businesses are the ones who need. opportunities to say, how do I pay, pace my pay with my expenses, right?

So that you can, pay your bills when you need to pay them and not be beholden to a two week payday cycle, right? Which is fairly antiquated, right? So it’s really helped to unlock it. Not only for Hilton’s of the world, for many companies to say, we’re going to offer things that are in your best interest to support you in the situation that you’re in.

right to provide again, not just control over when you get paid, but even visibility, right? Because a big portion of our folks that use our service, their people are just seeing their shifts and seeing the available funds that they have. And that in itself is a real powerful mechanism to manage your budgets and your finances and your well being.

So it’s not just about getting access, although certainly, people to use those opportunities to pull out the money when they need it. And it’s really important to understand that we offer three opportunities for people to get access to their wages, two of which are free. One is you can pull it out and wait for the, one to three business days for the ECH or the clearance of that, like a typical transaction.

And that’s free. You can pull it out right away and put it on a visa daily pay card. And that’s essentially a cash card to allow you to pay your expenses. The third is if you want to get it right away and put it into any of your destination accounts, and that comes with a small ATM like fee. But it’s again, one of those, just one benefit that the people we work with the Hilton’s like the Kroger’s like the targets.

Many of the McDonald franchises, Wendy’s franchises, they are leveraging this to attract people to say, here’s what we offer to help provide you and for your benefit. And people will take advantage of it in more larger numbers than anybody would anticipate. It’s the second largest benefit often that we’re seeing it within our clients right behind healthcare.

So there’s an attraction to this control and visibility that people want that in their lives. And they in many ways need that. So it started at the top and that’s not unlike a lot of new innovative technologies. You and I’ve had that conversation before, but what you’re quickly finding is. to stay competitive, to stay on path, because you’re competing, even as a small business, with a lot of these large corporations, more and more smaller businesses are looking forward to saying, I want to offer that benefit to my people so I can be competitive in the market.

[00:10:34] Frank Felker:

And that was, again, you’ve anticipated my next question, because I wanted to speak to the competitive advantage that your service offers to employers in a very tight labor market. Regular viewers and listeners of the show know that I have an online course called How to Hire and Keep Great People and Gino, you know that I’m taking the information in that course and turning it into a book of the same title.

Speak to that if you can. I guess we can imagine in our own minds. If I were trying to lure someone from another company, or if I knew that the person sitting across from me at the interview table had multiple options available to them, I can see where offering this access and the alternative opportunity they’re looking at not offering that.

Could be a very strong pole. Has that been your client’s experience?

[00:11:28] Gino Palozzi:

I think what we’ve heard from our clients and we often do a lot of studies, not just within our thousand plus clients, but across like larger spectrum of the U S labor market. And within our clients, we’re seeing benefits that are staggering and very powerful.

So I think 40 percent of the users of daily pay. Said it was a factor in their decision to take the job. So obviously from a recruiting perspective, it’s a powerful lever that companies are recognizing is important to them. We’re also seeing within our clients that they saw a 44 percent improvement in turnover among their daily pay enrolled employees.

So what the folks who take advantage of the benefit and there’s no cost to either offer the benefit as an employer, right? And there’s no cost to the employee unless they decide to have that instant access into the account that they want. But those that actually have it, are staying longer. 40 percent 44 percent improvement in that turnover.

So for a small business in my father owned his own small business, it’s crucial that you don’t only find good talent, but you keep that talent because you don’t have a large resource pool and the flexibility that some of these large organizations have. So it’s really important. Those two in particular, finding the talent, keeping the talent.

And then the one interesting stat that I always like to talk about. It’s left unsaid, but it shouldn’t be, which is improving the productivity 55 or some odd percentage of employers with daily pay say that the users picked up at least one extra shift per month. So what it’s showing is when you have visibility and you have that kind of control over your finances and you see how the shifts in the earnings are adding up, it motivates them to actually take on more shifts and work harder.

So keep the talent, hire the talent, keep the talent and motivate and help, drive productivity within your base is, are three of the common benefits that we often hear from our clients and from our studies that we do.

[00:13:39] Frank Felker:

That’s fantastic. Hire, keep, and get more productivity out of great people who are available out there in the marketplace and are just looking for the best fit for them.

My next question relates to the job categories. Now, just as I was surprised but it makes perfect sense that large companies would engage with this. I was also surprised to learn that it’s not just necessarily lower paid. skill, lower wage jobs, but actually some quite high skilled jobs in industries such as healthcare.

Can you speak to that?

[00:14:15] Gino Palozzi:

Yeah. The industries that we’re seeing a lot of adoption in and a lot of interest in I mentioned a few already, retail, hospitality, QSR, but we’re also seeing healthcare and there’s a lot of hospital systems and providers. have a tremendous size staff, right? And so those ranges anywhere from visiting nurses to, the orderlies and the folks that are running the operations at a hospital.

Those folks, especially on the visitor, visiting healthcare professional market, they’re almost contractors in a sense, right underneath a corporation. They’re often the ones that, have a lot of flexibility in their shifts and having the ability to get them their money when they need it to pay their bills to invest in the things that they want to buy or do on their schedule has shown tremendous success.

There’s other industries to Frank. Don’t get me wrong. Manufacturing is another one with a high propensity of daily hourly workers. But those were some of the big ones that we’re seeing. a constant demand for. And once one, one person does it in a market, you see a lot of people want to follow suit to stay competitive.

As we talked about, one area, from a size of the organization perspective, we have a lot of, we work with a lot of,

The franchises out there, and while they don’t necessarily dictate to their, the folks in the franchisees. What benefits they need to take, they make them available, right?

And they make them available to have, a vetted set of benefits that they believe in that they can choose to select for their people. And we’re seeing a lot of pickup and excitement, right? Within those franchises to have those options because a lot of those companies are Relatively small businesses, right?

They may have five locations, they may have 10, they may have 30, but it’s still a relatively small compared to the larger, some of the larger organizations that we work with. That was our first foray into, there’s a lot of need and interest in these smaller type organizations. And we continue to build towards that and we can talk a little bit about what we’re doing specifically for the, what I’ll say, the small, medium sized businesses.

[00:16:21] Frank Felker:

Great. That’s going to be a couple of more questions down the line, Gino. Sure, I’ll hold on that. I wanted to address what I think are the questions in the minds of the business owners watching and listening. So the next one I would have is, You said that there’s no cost to the employer. And so what I would like to dig into here is the nuts and bolts of how you do integrate with the employer.

My understanding is that you connect. With their payroll service company. And also you guys connect with a certain time tracking apps. Is that correct? How does that part of it work? How do you actually know what a given employee has earned?

[00:17:07] Gino Palozzi:

Yeah, this is what’s referred to in the market as employer sponsored earned wage access.

And what employer sponsored means is not only are they endorsing it, we are integrated into both their payroll. And time and attendance type systems. We have over a hundred integrations that have been developed, right? For the most common systems that companies are using and what that affords us or allows us to do.

Is to really understand, not just estimating earned wages, right? Based on some calculation, but to truly understand when somebody is clocked in what, their wages are and to be tied into the system. So there’s really no doubt that the hours were worked and there’s no it’s very seamless in the sense of how, from a payroll perspective, there’s no change.

So not only doesn’t it cost you anything to offer this benefit. We do all the work. We do all the lifting to get it set up for you during the onboarding and integrate into your systems so that then obviously it’s very seamless for the person to see what hours I’ve worked and based on my pay what I’m available to pull out.

And then from a payroll perspective, it’s almost nothing really fundamentally changes. If they take money out, at the time of their two week pay cycle that money is then removed from. The remaining balance is then paid out and any money that was taken after a wage, but before the payroll period is taken out.

So it’s really no lift at all or change any of the existing processes, which is important to most companies, right? It’s disruptive if you try to do daily pay in the current systems and the processing would almost be impossible. So we do that lift for them and we don’t disrupt Your business extremely important for small businesses as well, right?

The big ones obviously don’t want disruption, but you don’t always have the same resources, HR teams, payroll teams. needed. So we do a lot of that lift up front and then we just seamlessly bring it into your process. So there’s really no effort on your part.

[00:19:12] Frank Felker:

So if a, an employee were to draw some money some of their earned wages out before it was payday, would your system reach out and grab that money out of the employer’s bank account or where would that money come from?

[00:19:28] Gino Palozzi:

Yeah, that, that money essentially before it flows back from the employer to the employee, on the day of payday. It flows through daily pay, and then we remove it from that perspective at that point in time. And then the distribution comes from us so that we can ensure that any money that was removed is taken out before the final remittances is made.

The money that we do, obviously, we work with a lot of financial institutions to provide that cash flow need in between before we get. Paid by the employer, so we cover that through our different credit work with different large institutions that support us.

[00:20:10] Frank Felker:

Good. That’s just what I was, so there’s no surprise.

Surprise bank balance change for the employer. That’s great.

[00:20:19] Gino Palozzi:

Now Yeah, I’m sorry, no cash flow impact to them, which is a big thing, obviously, for them. What was that? I missed what you said. There’s no cash flow impact when you run it through that process, which is a huge impact and not something people would want to try to float that out and change their cash flow so we don’t disrupt their business from an integration or a cash flow perspective.

[00:20:41] Frank Felker:

Now, before we talk about what you guys might be working towards in the future, Let’s talk about how an employer can either get more information or start working with you guys. I know you have set up a specific place for them to go, which we’ll show on the screen here in a moment. Tell us about that.

the spot that small and medium sized business owners can visit.

[00:21:08] Gino Palozzi:

Yeah. For the first time, we’ve recently opened this up for for organizations with less than 400 employees. It’s our small business group and we actually have, it’s very easy to get started. So there’s a website, it’s dailypay. com.

Slash forward slash small business and all one word small business. And this is an opportunity to it’s in about 15 minutes. You do want to talk to somebody, people, there’s opportunity to connect with us, make sure that the systems that you’re using are going to be in effect.

If the systems that you use are not one of the a hundred plus integrations that we offer. We definitely want to understand what you’re using so that we can put it on our roadmap, but that’s where I would go is dailypay. com slash small business. And at that point, it’ll give you an overview of the offering itself, how it would work, some of the benefits that I’ve already shared.

And then you obviously will want to be in touch with somebody to understand where you’re coming from, what you’re trying to do, what systems you have so we can get you up and running pretty darn quick. They tell me within 15, 30 minutes, we can at least get you set up.

And then we work through the onboarding process which again, is not a big lengthy effort especially if the systems that you use are in our portfolio of integration partners.

[00:22:27] Frank Felker:

That’s great. I remember even when I had small number of employees. I always had a payroll service, I think I used ADP, and it just made life a lot easier.

Certainly there was a monthly charge of a couple of hundred bucks, but I just knew that all the reporting was going to be handled. It’s something I’ve always recommended to business owners. Not everyone does it, but I showed this as another great reason why you should use a payroll service provider.

[00:22:54] Gino Palozzi:

Yeah. And I’m sorry, just, ADP is one of our larger partners. Team software in particular is another one that we’re, obviously partnering with, and we want to leverage those relationships, with some of those like technologies, some of the word largest to really make sure that.

We are doing this as an ecosystem. We can’t do this alone, especially because of the employer sponsored nature of it. But this small business experience has been tailored for their needs, right? They don’t always have the time or the resources to offer these types of benefits, but they’re starting to hear about it in the market.

They’re starting to see You know, competitors offer it, and we just want to give them the opportunity to compete in that same labor pool is the larger counterparts. So we’re really tailoring this program, and we’re excited about it because we want to bring. We believe that everybody should have visibility and control and access to their wages, right?

We want to bring that to everybody. And in order to do that, I think nearly half of the U. S. Population is, in that private sector is in So that means we have to tailor our offerings, our experiences for those folks, right? To make sure everybody can get access to this.

[00:24:06] Frank Felker:

One thing I really enjoyed about your website you’ve got great testimonials and naturally the ones I was watching.

We’re from employers and I’ll give a quick example of one I saw that I’m sure you have a million of them, and maybe you’ll think of one that you’d like to share where the employer got a phone call from one of his top people and the person calling said his car had broken down as he was driving to work.

And if it had not been for daily pay and as access to his earned wages, he would not have been able to get his car fixed, but as it turned out, he was able to. take the car to a garage and rent a car to get to work. And not only did it mean that he got to work that day, but he was able to work the rest of the week while his car was still in the shop.

And that made a tremendous difference to both the employee and the employer. So that’s the story that I really enjoyed learning about. But I bet you have a million stories like that, that you’ve seen from your clients. Could you share something from that for us?

[00:25:12] Gino Palozzi:

We do. We hear it every day, right?

Whether it’s on our social, whether it’s through our voice of the customer teams, we hear really powerful stories of how we’re supporting people and giving them what they need. And really, we often look at this, Frank, as is certainly You know, daily pay is helpful in that time of need, whether you need to put gas in your car, whether you have an unexpected emergency that you hadn’t budgeted for.

But I like to think about this broader, like we also have a strong passion for wanting to help build stability, financial wellness and stability for people. So yeah, the stories we hear are moving. right? Those stories can include stories of how somebody didn’t know how they’re gonna pay rent or, was worried they’re gonna be homeless.

But the ones that are really exciting is I’m able to help, my son or myself go back to school, right? Or I’ve been able to save and been able to purchase my first, car. Those are really interesting stories as well, because it really shows a pathway of everybody’s on their own journey.

And, we’re having a real difference in not just helping with the emergencies or we’re really helping to stabilize people’s financial wellbeing. Some of the data I shared, some of the data that we often will talk about on the client side, from the employee side, right? The data shows that 69 percent or nearly 70 percent of users who previously paid late fees are doing so less often or stop completely once they started using daily pay.

That’s significant, right? That helps you build that stability and that lack of the fees all, add up. They make better financial decisions, right? And 69 percent of them said that daily pay helps them to be more diligent about their spending. And the one that I, there, there’s often a level of reduction in not just the late fees, but the impact that has on reducing their dependency on other forms of credit, to float them in those times. So when you can pay your bills on your schedule, not based on your, your pay schedule, it provides the opportunity to avoid some of the more reoccurring and higher credit facilities out there. So I think it’s a real powerful financial tool. We’re doing things beyond that too, Frank.

I think we, we have things within the tool like motivating people to save, right? And demonstrating even, The ability to schedule those saving mechanisms. We’re offering great mechanisms fairly recently here, piloting the ability to see your credit health, which is a really core fundamental part of your financial wellness, and we’ll continue to broaden out these financial Consumer financial tools and resources to support people in building the stability for long term benefit to the people that, we want to reach.

[00:27:59] Frank Felker: That is truly amazing.

[00:28:00] Gino Palozzi:

Those are stats that really make a difference. And we want to really help you a small part of that.

[00:28:08] Frank Felker:

I think you guys, what you’re doing is just great and it’s a win for everybody. Certainly I, as I had mentioned to you in a previous conversation, if this service had been available when I was running the family print shop I can see it being a tremendous value to me out there recruiting and trying to retain good people.

But also there’s several people who work for me. Who I know this would help. And you and I also talked about how expensive being broke can be when it comes to things like late fees and payday loans. That kind of stuff and all at once, you’re not spending that money anymore. So it could go somewhere like a savings account or anywhere else that you’d like it to go?

[00:28:49] Gino Palozzi:

Yeah. I grew up in a family that didn’t have a lot right. And we, my, my dad did own his own small business and I think it’s really hits home when I know the challenges that people are going through and if there’s small things that we can do. to not only help the small business owner, but more importantly, the employees and making sure that they’re taken care of.

It is truly a win. It’s a win for the employer like we talked about, but it’s also more importantly, a win for those users, those people like my own family that would have loved to have this access early on, right? It just wasn’t there. But now with the tools it’s not hard and without disrupting your business, you can offer this up.

And, we continue to work with these small businesses and large businesses on what do those folks that they are, what do they need? More importantly, are we hearing from the users themselves and what types of resources can we offer to them? to help build their stability, to help build their kind of progress and their own financial journey.

So we’re going to continue to evolve. We’re going to continue with a mission to help everybody unlock those opportunities every day. And continue to find opportunities to continue to expand our impact that we can have. We’re committed to it. We’re passionate about it. We’re excited about what the future holds.

And I hope some of the folks listening here Take a hard look, take a look, talk to our people and see is this something that, I may want to bring to my own folks.

[00:30:13] Frank Felker:

That’s great.

Gino Palozzi, I thank you so much for joining me today on Radio Free Enterprise.

Thank you for having me, Frank.

Thanks again to Gino, and thank you for joining us. Until next time, I’m Frank Felker saying I’ll see you on the radio.

[00:30:30] Dude Walker:

He’s the kind of guy who finds microeconomics fascinating, but go ahead and listen anyway. Radio Free Enterprise with Frank Felker.

Ever wonder if TV Ads could help build your business? If so, you’re not alone.

Lots of business owners are wondering the same thing these days.

That’s why Chuck Boyce and Ken Massa from SmallBiz.com invited me to explain my Zip Code Famous concept at their Virtual Summit for business owners.

The resulting presentation and detailed question-and-answer session created a valuable educational resource for anyone looking to grow their local consumer-facing business.

What follows is an AI-generated transcript of our entire conversation. Please excused any typos!

[00:00:00] Chuck Boyce:

A lot of times what we see in the small biz community is we’re looking for opportunities to really level the playing field. But. By what we can do as small business owners versus some of our large corporate deep pocketed competitors. And I think this is really going to be such a game changer for a lot of local smaller businesses to, to get the same credibility that those bigger companies are getting through the use of TV.

[00:00:28] Frank Felker:

I could not agree with you more, Chuck. I want to do everything I can to get the word out to people, whether they choose to work with me or not. This is a unique moment.

[00:00:46] Dude Walker:

And now it’s time once again, for the show that gives glorious voice to 25 million business owners across the fruited plain radio free enterprise with Frank Felker.

[00:01:02] Frank Felker:

Thank you, Dude Walker. Yes, indeed. I am Frank Felker. Welcome back to Radio Free Enterprise. Today, I’m bringing you a presentation I made to the Small Biz Virtual Summit in April, 2024. On new opportunities in television advertising for small businesses across the country. In this webinar, I introduce you to the amazing world of connected TV and explain its ability to target your ideal prospects on the big screens in their living rooms and bedrooms just as well as, and in many cases better than, social media ads on Facebook and Instagram.

Be sure to stick around to the end, where the moderators from smallbiz. com, Chuck Boyce and Ken Massa, ask me some very pointed and detailed questions about exactly how connected TV works and how much it costs.

[00:01:55] Ken Massa:

Welcome to this month’s Small Biz Virtual Summit. My name is Ken Massa and I am here with Chuck Boyce.

Today we’re bringing on a variety of guests that cover topics in everyday problems that we face within the business world. But our guests are experts in creating solutions to these challenges. And these challenges may be everyday problems that you’re facing as a business owner, an entrepreneur, or someone that works in a very amazing business, but you face problems that we all face.

Here is a way where you can find those solutions, where you can listen to those who have experienced the same things that you’re going through, and even come up with a solution that may work for you. The world of marketing and reaching the right audience is ever changing. Typically you’ve heard of traditional TV, radio, or even social media and search engine practices to reach your audience.

Today, we have a guest that has a wealth of knowledge around a newer type of advertising, which is known as CTV or connected TV, which is more involved around streaming platforms and placing ads on TV screens through the streaming platforms that we see today. I like to welcome Frank Felker to our summit today, who has a wealth of knowledge around this topic.

So thank you for visiting us today, Frank, and we’re excited to hear you present.

[00:03:15] Frank Felker:

Thank you so much for inviting me, gentlemen.

I want to talk to you today about what I call zip code famous. It’s correct that it’s all based on connected television, connected TV, CTV, a lot of different nomenclature around it.

But specifically, my presentation is for local business to consumer companies. Now, many of the things that I will be talking about are things that any company of any size could benefit from, but this specific presentation is for. Local companies, and I’ll define that further in a moment, who target consumers with products or services and who are looking to grow.

If you’re not looking to grow, this is probably still going to be a little bit entertaining, but not something that you will be able to take action on. I have a lot of information to share with you in a limited amount of time. So forgive me if I gloss over anything. We certainly can connect later if you’d like to reach out to me with questions.

And there will be questions and answers after my presentation. But I would like for you to just for us to just explore this new opportunity together and I hope you’ll find it interesting. What is Zip Code Famous? This is a mouthful here. It’s geographically focused, targeted and retargeted television ads with lead magnets and special offers.

I hope everyone’s taking notes. You won’t need to do that. I’ll be happy to share this slide deck later if you’re interested. I’m going to explain what each of these things means as far as the geographically focused, targeted, and retargeted, what sort of television ads I’m referring to, and what I mean by lead magnets and special offers.

What can Zip Code Famous do for you? Initially, excuse me, initially, It will establish your brand in the minds of your most ideal client profile. And I’ll talk about that in a moment. Extremely targeted group of people who are the ones you want to deal with and who have the highest propensity to purchase your product or service.

Now, why would you want to do that? Because through this method, you can become the best known plumber, dentist, restaurant, what have you, again, all local companies targeting consumers with products and services in one or more zip codes. And as I’ve been working this program, I found that it’s best if you get at least five zip codes.

to get a big enough audience to test and refine your process going forward. Another thing that Zip Code Famous can do for you is where the rubber meets the road, drive new sales. The fact is that people we know buy from those they know and trust. That’s what leads up to the purchase decision. If you think about who you currently buy from, whether it’s a large company or small, somehow, There was a relationship that was initiated and developed over time.

And you’re able to accelerate that process with television advertising through a method that’s called a parasocial relationship. It’s another mouthful, but what it means is You see somebody on TV repeatedly and you come to believe that you know them. That you, not necessarily friends, but that you have a relationship.

Example, members of the royal family, the Kardashians, sports figures, and so forth. It’s it’s a proven fact that we become, the more familiar we become with someone, the closer we feel to them personally. Now, a big aspect of this is the geographically focused element. And I refer to this as your golden nugget neighborhoods.

Now, if you are a restaurant, that’s probably the neighborhoods right around you. No matter what kind of business you’re in, I hope you’re tracking the zip code of the consumers who are purchasing from you. Doctors and dentists target families. That’s where most of their business comes from. Certain specialties like cosmetic dentistry or cosmetic surgery for that matter are more focused on individual adults.

But general practices, family practices do well with this type of advertising. I’m going to spend a lot of time today talking about home contractors, people like roofers, people who put in new windows, doors, siding, that kind of thing. And one of the reasons why I’m going to do that is because Their next sale is often worth 10, 000 or more.

So as a result, they are, see their way clear better than others to spending money on marketing. Even they’re so leads and sales focused that I think sometimes they forget about the impact. That branding has on the entire sales cycle. And I’ll speak to that in a moment. This is also excellent for real estate agents who are targeting what they call farms, specific farms.

But again, if you’re only targeting one farm, it’s probably just one part of one zip code. And you can have success with this without doubt. It’ll just take a little bit longer because it’s going to take longer for your ads to get in front of enough people. Now, I want to quickly give you an idea of how different zip codes are different, and some are more lucrative than others.

If you’re already in business right now, and let’s say you’re a home improvement contractor, you probably have a pretty good feeling where your golden nugget neighborhoods are. They’re higher income level, the homes are of a certain age, When it’s where it’s time to replace the roof or the windows or what have you and it’s probably where you’re getting most of your business right now in.

I’m here in northern Virginia near Washington, D. C. And the golden nugget neighborhoods for the home improvement contractors I’ve worked with are in places like Fairfax Station, Clifton, Great Falls, a variety of other places. that mean nothing to you if you’re not from this area. But they, it means everything to those home contractors because every one of them is fighting to get those deals in those same neighborhoods.

And what I want to talk to you about here is how important branding is to differentiating yourself from your competition and being that best known contractor in Fairfax Station or wherever. I’m going to show you here quick data, I’m going to go through it quickly and not burden you with it. But the first zip code, this is in an area called Woodbridge.

This is the lowest income one that I want to point out. Just, these numbers are not as meaningful until you compare them. with the other zip codes. As we start going to higher income neighborhoods, you’ll notice that the number of households goes down. That’s because there are more single family homes, and that the percentage of owners goes up.

And when we go all the way to the top here, and this is Great Falls, Virginia there’s almost no renters whatsoever. And while there are a smaller number of households almost all of them are homeowners, decision makers, who are the ones you want to get your message in front of when they need a new roof.

Now, if we combined all that information together, you would find that the average number of owner occupied homes in each of these neighborhoods was around 10, 000. And I love that because it makes the arithmetic of how this works a lot easier to get your arms around. And you see here that the owner renter percentage dramatically changes as the income level goes up.

Let’s use the example, here’s a roofer, and what a golden nugget neighborhood would look like to them. Let’s say right now they’re getting, they’re going to Fairfax Station and they’re getting two jobs a month and I’m sure any roofer would tell you, if they were getting two jobs a month from one neighborhood that would be a golden nugget neighborhood.

And if you run the arithmetic here, over the course of four years it would be somewhere between 96 and 100 jobs. And if we say 10, 000 average revenue, that’s a million dollars over four years. That’s a place that’s worth investing in. But even with that level of penetration, if we’re looking at 10, 000 owner occupied homes in a given zip code, a hundred deals in four years is only 1 percent penetration.

And if another four times as many people as the ones you did a roof for, are even aware that you exist. That’s only 5 percent marketplace awareness, which means 95 percent of the people in that golden nugget neighborhood or zip code have never heard of you. And I’d like to point out, put a little salt in the wound.

They never will hear of you unless you invest in some effective marketing. Now, This works. Here in the D. C. area, these are three well known companies. As far as I know, I don’t know, they could be outside the D. C. area. But all of them started as family owned contractors, and they have grown to multi million dollar industry leaders by investing tremendous amounts of money in radio and television advertising.

But, They blanketed the entire area in order to do that, which means they covered some neighborhoods that weren’t golden nugget. They showed ads to a heck of a lot of renters. They showed ads in areas where they don’t really want to go and service because it’s too far distant for them to go. But you don’t have that problem.

My point is, even with this higher level of cost and lower level of targeting and effectiveness. These people were able to build multi million dollar businesses. Let’s say back in the day, I just picked 1980 because that’s when All in the Family was out. You could reach the entire D. C. area for 30 seconds at the same time, or close to the same time, if you purchased an ad, let’s say, during the 6 o’clock news.

on all four of the local channels. But it would cost a fortune to do that because that’s in prime time And it’s not technically prime time, but the people you’re looking for are sitting in front of the television You’d spend a lot You’d your ad would only run once and so if nobody if person didn’t see it, it didn’t exist You would reach a lot of unqualified prospects as I just mentioned and a lot of coal lump neighborhoods Places you either don’t want to service Or places where there’s a lot of multi family units or what have you where you are not going to prosper But what if there was a way that you could spend a fraction of that amount of money?

Target only ideal clients and re target them You can re target people who have watched your ads. You can re target people who have visited your website You can re target people that are on your email list and past clients You And you could co brand, associate your brand with things like the Peacock Network, I’ll talk about other things, the National Football League, a lot of different things.

They’re not going to endorse you, but you placing your ad in an NFL game or during a particular show on a particular network has a powerful effect of lending credibility to you and your brand. Shockingly, there is such a way that we can do all these things. Now we have zip code famous. You target only your golden nugget neighborhoods.

You’re able to target in many of the ways that we target today on social media, income level, gender, interests, and specific things. Home ownership status. This is huge. And as I just mentioned, you can retarget people who have seen your ads or people who have visited your website. It costs a lot less than spending money like Len the Plumber and the other companies I showed you, Long Fence.

Have spent for years blanketing the whole area and you’re not wasting money. So for the dollars you do spend You’re getting more bang for your buck. You’re able to saturate those golden nugget neighborhoods Now, I don’t want anybody to get frightened about that We’ve all seen certain ads that we see it so many times.

We’re sick of it And but there are ways that you can limit what’s called the frequency Which means the number of times that a particular person sees one of your messages and If you want to, especially after you’ve tested which messages, which video messages are the most effective, you can layer on social media later.

Now, and this is where I explain a little bit about what connected television is. There are a number of platforms. In fact I’ve spoken with executives from most, all of these companies and several other companies that I haven’t listed. There’s a wide variety of ways you can do this. And I’ll add, you can do this yourself.

Most of these people are trying to build a platform that business owners will come to and run their own ad campaigns. I recommend against it. It’s not your core competency. Writing scripts, producing spots, managing advertising campaigns, reading the reports, tweaking. You do what you do and let me or somebody like me take care of the connected TV advertising.

Now, if you’re just dipping your toe in the water, vibe. co and Hulu have only 500 a month minimums. I usually recommend that you go with a per day budget, so I would say 20 a day, which would be 600 in a month. The minimum is 500. Mountain, which Ryan, I can’t think of his name right now, is the spokesperson for and a company called TV Scientific offer charge a minimum of 2, 500 per month.

They claim to have better targeting and they generate better results. I’ll let you know once I’ve been able to compare them. Now, just so you understand how powerful this can be, Intuit, the people who generate QuickBooks they have their own advertising platform for TV. Excuse me a second.

Perfect timing for me to blow my nose. Or admit. And they target only businesses. And guess what they know about every business that uses QuickBooks. They know how much you, what your top line revenues are. They know how many employees you have. They know what you buy. Of course, as they stressed to me, we would never tell you exactly that information for any given business.

But I just want you to understand that this is the kind of targeting that’s possible, but they want 50 grand a month. With a three month minimum investment and a big part of their three month minimum as the guy explained to me Is we need to test? We need to find out what’s going to work. And this is if one thing you come away from this presentation with, it’s important to understand that you need to spend money at the beginning of your campaign testing, which means it may not generate any tangible results in the first two to four weeks.

But once you find out what works, you can stop spending money on what doesn’t work and only focus your investment on what does work. And the way you got to that point was by investing in testing. And as I say, it’s very important. Now there are over 500. This is in particular right here. It’s just on vibe.

co. Over 500 premium networks and local television stations that you can choose to place your ads on. If you wanted to say for example, in your other marketing, be sure to see our ads on the NFL Network or on Peacock or on Amazon Prime or what have you. My counsel would be Don’t do that. You can do it if you really feel like that’s something that’s important to you.

It’s available. You should instead test, run the ads across a wide variety of networks and see what works, and then take back what doesn’t work, double down on what does work, and you’ll see tremendous results. Now, my system works like this. You start with the branding. And this includes the test period.

You want to let everybody in your golden nugget neighborhoods know who you are, what you do, what problem you solve, what your special magic formula is that solves those problems. You can include testimonial messages from happy clients. Talk about how many five star reviews you have, what have you. But I would recommend that you create a number of these types of identity messages, branding messages, and cycle them in your golden nugget neighborhoods.

While that’s happening, people will be visiting your website, either in response to the ads or just the ways they already reach your website. So you need to put that. Pixel on there, the cookie on there that tracks people who have come to your website and you begin to build that audience over time as well as the audience of people who have seen your ad so that when you’re ready to change gears, you can now offer a little bit more assertive message, which says something like, call this number, visit this website, whatever call to action it is, and get your free ad.

lead magnet, which could be a a free information resource. If you’re a restaurant, it could be a free appetizer with the purchase of a meal. But you need to be willing to offer something of value, of high value. I was working with a a woman who has a home cleaning service. And I asked her what the most effective offer she ever did was and it was 40, whole house cleaning, new customers only, 40.

And I said, Oh, wow. I said, did it work well? Yes. Eight out of 10 people who got their house cleaned became regular customers. So I said, then what, how long do people stay with you? Oh, I don’t know. They’ve stayed with us for years. People almost never stop buying from us. We went through the numbers and the lifetime value of her average client was somewhere around 15, 000.

Now I’m not saying she spent 40 and got 15, 000 back. In effect, that is what she did, but it was over time and what have you. But even with the net present value of money, that’s a trade off I would do every day. But when I suggested to her that she offer that on television, she wouldn’t do it. She felt like it was just going to cost her too much money to make that offer.

And yet the fact is that every person who took her up on that offer was letting them, letting her into their house and doing business with her and seeing firsthand with their own eyes and ears. And one thing I learned with the cleaning business, their nose They come home to a house that smells clean and they love that and they want that again.

So from my perspective as a marketing person, of course, I’m not going to have to go in there and clean the floors. It seemed like a bargain to me, but I feel as though she wasn’t willing to acknowledge what’s called customer acquisition cost. You have to invest in getting customers. So many of us are willing to invest in equipment and overhead and employees and this and that.

But if you don’t have any customers, you don’t have a business. So I’ll get down off my soapbox for that. So you have to then re target people with something of value. And the people who step forward and raise their hand and say, Yeah, that’s of interest to me. They just qualified themselves further. You already knew that you were only targeting people who are homeowners in your golden nugget neighborhoods.

And now this person’s raised a hand and said, I’d like that free resource about avoid the five biggest mistakes. Most people make when they get a new roof. That is a person who is thinking about getting a new roof. Then you take that list of people and target them. Not immediately, but whenever it fits into the system with a special offer, buy today and get, 1, 000 off your roof or upgrade your shingles or what have you.

I don’t have time to go through every possible iteration of this, but I think I think you see where I’m going. Now, a lot of these same things could be done through social media and as I mentioned before, and I’ll say right now, you can always add social media later, but I recommend you start with this because television has a much higher level of perceived value.

When I see you on the big screen in my living room, or I see you on the big screen in my bedroom, or see you on the screen when I’m at the sports bar. I’m like, I don’t say wow, but it just signals to me, it’s a trust trigger. Those people are professional, those people know what they’re doing. And little by little, you get those nine messages through somebody’s consciousness, and it becomes ingrained in them.

They recognize your name, they know what you do, and that’s the first step for them thinking of you and making you the easy choice. when they have the problem that you solve. Another very important point is that almost nobody is doing this right now among small local businesses or businesses of any size.

It’s almost brand new, I’d say, I don’t know, less than. Two or three years at the most and because of the challenges of writing and producing effective ads and creating, managing, and reporting effective campaigns, advertising campaigns, that’s enough to keep a lot of people away and think this is not something I should even consider.

The fact is that the connected television, CTV, has a lot of the same features that social media. Advertising offers relative to targeting, retargeting, et cetera. But everybody and their brother and all of your competitors are on social media. They’re not on television. Here’s what I would recommend that you do as as next steps.

Identify five to ten zip codes that are your golden nugget neighborhoods. request the data and I can include or you can reach out to me. There’s a source that I use that gives you an unbelievable level of data on a statewide basis. That’s broken down by zip code. I want to say it’s 190, 199 a state.

Choose your zip codes, commit to 20 a day, as I said, or more, and give it six months. I, it’s up to you, but 3, 600 spent to become the best known company of your kind in your golden nugget neighborhoods sounds like a bargain to me. Certainly, the more you spend, the faster the benefits will accrue and the deeper penetration you’ll have in terms of marketplace awareness.

So that’s what I have for you today. And I’m wide open. If anybody wants to reach out to me offline and set up a meeting to discuss further.

[00:27:59] Chuck Boyce:

Frank, that was certainly some great information. And a lot of times what we see in the small biz community is we’re looking for opportunities to really level the playing field.

But. By what we can do as small business owners versus some of our large corporate deep pocketed competitors. And I think this is really going to be such a game changer for a lot of local, smaller businesses to, to get the same credibility that those bigger companies are getting through the use of TV.

[00:28:30] Frank Felker:

I could not agree with you more Chuck. To tell you, this is an opportunity that, as I say, it’s almost the best kept secret in digital marketing right now. But I want to do everything I can to get the word out to people, whether they choose to work with me or not. This is a unique opportunity.

Moment

[00:28:51] Ken Massa:

Frank you touched on this a little bit But I want to highlight this because i’ve heard this question come up before around this topic I think that there’s a misconception that by Doing an advertisement on tv. It’s excessively expensive Can you just touch on and you did bring up pricing and the minimum entry point here?

but can you touch on the difference between traditional tv and how much that might cost compared to a ctv type of Environment for advertising

[00:29:21] Frank Felker:

Most, as most advertising is sold on a cost per thousand basis, which means the thousands of people, the number of thousands of people, who will see your ad.

And generally speaking, it’s been my experience and I think that CTV is putting a lot of pricing pressure on traditional television. But you’re spending about the same price per thousand. The difference is, you’re targeting tens of thousands fewer people or reaching them. And which is perfect because you only want to reach your prime client profile.

You don’t want to cover all DC. I would say on a unit basis, it’s the same cost. But on a out of pocket basis, It’s apples and oranges. It’s, it’s whatever you’d like to spend, but you can certainly spend five percent of what it would cost you to run an ad on television, or you can spend ten percent.

The difference is remarkable.

[00:30:20] Ken Massa:

Yeah, that makes sense. You’re just really becoming more confined with your audience and you’re putting the commercial in front of the users that you dictate based off of the geographical and demographical information that you’re looking for that fits your target audience best.

So that makes a lot more sense. You’re basically confining your budget to the perfect person, which I really like.

[00:30:39] Frank Felker:

That’s right. And when you think about it, as you refine your audience, it goes beyond the zip code to just people who responded or just people who watched your ad 10 times previously, or just people who visited your website.

It’s just crazy. It just makes perfect sense. And I think there are so many benefits to it. It almost seems too good to be true, but it is true.

[00:31:05] Ken Massa:

Yeah I do agree. Another question I have is with just the amount of platforms there are in streaming today, there’s different networks like Hulu and YouTube TV and Peacock and Paramount plus and all of these different networks, how does someone from a business perspective or from a marketing perspective, how does someone dictate whether one platform is.

more sufficient for their audience over another? Or do you say you test them all and then they basically find what one is the best performer from data? What would be the approach there?

[00:31:40] Frank Felker:

I’ve given that question a lot of thought, excuse me, and I appreciate you bringing it up. At the end of the day, it doesn’t matter which network you’re on.

What matters is I learned this with YouTube advertising, I would be shocked at the some obscure channel that somebody saw my ad on and then converted. I never would have picked that channel. So we can’t, we certainly cannot dictate what our prime clients are watching on television. And I would submit that even though they may meet our prime client profile out of a hundred of them, Probably no two people have the same viewing habits.

So it just comes back to testing it. And because it could be different based on your industry, or your message, or your golden nugget neighborhoods, the only way to find out in any seasoned digital marketer will tell you, you have to test. You can’t kid yourself and think you know. Because you don’t know until the results tell you

[00:32:47] Chuck Boyce:

So Frank.

Can you hit a little bit about we all know Roughly what social media ads cost from a production standpoint, and the production quality expectations on a social media ad, specifically in video, I think are lower than what we would be expecting to see on a connected TV ad.

Can you talk a little bit about kind of the costs that go into the production versus, what we might be able to. Quote, get away with on social media.

[00:33:17] Frank Felker:

Good question. Yeah, that’s a good point, isn’t it? There’s a couple of ways. I, because I literally started shooting video in the 1980s.

I’ve learned a thing or two about how to do it. Inexpensively and yet professionally we’re all aware that there are things of stock footage houses and this kind of thing where you can get unbelievably high quality footage of, let’s say, people watching television or a family playing in the park or whatever it is.

And Combine it with either a faceless voiceover person, or a head and shoulders talking head type thing like this. Or, in some cases, and we all remember the family owned car dealerships back in the day where My daddy used to be a Chevrolet dealer in all of Northern Virginia, so that’s certainly an inexpensive level of production quality.

And I’m not sure how effective those ads were, but they might actually have helped brand the dealership as being family friendly. What I’m driving at is. Just like with your monthly budget, Chuck, and I don’t want to dodge the question, I’ll give you a couple of examples. But just like with your monthly advertising budget, you can spend whatever you like on production.

But I will tell you, this is something I’ve learned the hard way over the years. Spending more on production does not necessarily result in a more effective commercial, or a more effective video message of any kind. I was recently shooting interviews on a trade show floor using an iPhone 11. on a gimbal had a associate with me who was shooting the video and using wireless microphones that are the size of a quarter that cost 179 for the whole set of two.

And we have come away with some incredible content from that. And People these days are accustomed to webcams and dash cams and pylon cams and garage cams, you name it. So they’re less attuned to production values, which is what you’re referring to. Back in the day, the expression network production values was real, and it was difficult to try to produce video that met up with network production values.

But today, it’s not. And you don’t have to have a giant digital camera. There’s a camera called RED that’s unbelievably expensive. And I would submit that you can get 90, 95 percent of the quality that an average person could perceive using the latest iPhone. I would say that if you were to come to me, and say, okay, I want to create four spots.

And this is separate from your investment in the advertising. I could do four spots for you for on the low end using the lesser expensive stock footage, iPhone talking head approach for five to 6, 000, something like that. And if you wanted, me to come to your location and bring, camera and sound and lights and Be there all day And shoot several things We could spend at least ten thousand dollars and we could probably spend a lot more than that Depending on what was going to be involved in the shoot

[00:36:49] Ken Massa:

Yeah, that makes sense.

There’s a lot of insight there that is very helpful for a lot of companies because I think that there’s a misconception around the quality of production that’s needed in order to do this. And I think that halts a lot of companies from getting started with something like this. They think that they need.

This massively high production quality video in order to do something like that. So I appreciate your insight on that because I think it’ll allow a lot of others to, to realize that you don’t need to have an extraordinary production in order you don’t to enter this I have a part two to that question.

Okay. We’ve had a lot of guests that were presenters talk about ai. Are you seeing any companies using AI technology to help with the production side of video creation to get the commercial ready?

[00:37:37] Frank Felker:

I’m seeing a lot of it. I’m not seeing a lot that I think is effective. One of the most important things about video is that in person connection.

That parasocial relationship, if you will. where we connect with each other as human beings. Now, I would be willing to say that within five years and maybe a lot sooner than that, you literally will not be able to tell the difference. But right now, both the script writing and the bot presentations.

They’re just a little bit off. And even if you don’t know that it’s all fake, you’re not, you don’t, you’re not feeling it. If you’re not getting a good feeling. You may just be getting no feeling. In the future that could be true, but the other thing I would say is, then you got to learn how to do that.

[00:38:28] Ken Massa:

Yeah.

[00:38:28] Frank Felker:

You could outsource it, to a company that does production that way, but so far at least, I don’t think we’re quite there yet. But it’s a, it’s an apt point, and I think it’s worth considering and keeping an eye on going into the near future.

[00:38:43] Ken Massa:

Okay, great. Thank you for the insight on that.

[00:38:46] Chuck Boyce:

Well, Frank, you certainly have shared with us a wealth of information, and we really appreciate that. I really think this is going to open a lot of business owners eyes into seeing what’s truly possible now with connected TV, and that it really, Doesn’t have to be that expensive and certainly can fit within even the most modest of advertising and marketing budgets.

So we’re going to make sure that all of your contact information and so that people can reach out and connect with you are here in our show notes. So that’ll be on the page, wherever you’re seeing or connecting with this episode. Frank, I just want to thank you so much for taking time out of your day and joining us here on small biz.

[00:39:30] Frank Felker:

Thank you very much. Thank you so much for having me guys. I really enjoyed it.

Thanks so much to Chuck Boyce and Ken Massa from smallbiz.com for inviting me to present at their virtual summit.

And thank you for joining us. Until next time, I’m Frank Felker saying I’ll see you next time.

[00:39:50] Dude Walker:

And now, a man who maintains a shrine to Mark Cuban in the basement of his suburban home,

Frank Felker and Radio Free Enterprise.

In this episode, Frank interviews business acquisition expert, Marty M. Fahncke, a veteran of almost $500 million in business sale transactions over the course of 25 years.

Frank and Marty also announce that they are co-authoring the book, Boomer Sells The Business, along with an accompanying workbook.

At the beginning of the interview, Marty shares five reasons why every business owner should have their firm in “sale-ready condition” even if they have no current or future plans to sell it.

He then lists the seven things you must do to move your business from its current state to a position where it can be sold for the highest price, and shares why you need to get started on those tasks as soon as possible.

At the end of the video, Frank and Marty share how you can register to receive free paperback copies of the book and workbook when they are published later this year.

Simply send an email to book@BoomerSellsTheBusiness.com and include your mailing address and phone number (in case the shipping company needs to contact you).

If you have ever wondered how much you might be able to sell your business for, or how you could make it worth many times more than it currently is, book a 15-minute call with Marty M. Fahncke by accessing his private calendar at:

https://calendly.com/adventurist-marty/free-consultation-boomer-sells-the-business

What follows is an AI-generated transcript of our entire conversation. Please excused any typos!

[00:00:00] Marty M. Fahncke:

I started buying and selling businesses over 20 years ago, almost 25 years ago, when one of the earliest business that I started was acquired. And that would led me down the road towards mergers, acquisitions and buying and selling businesses. Since that time I’ve done almost 500 million in deals and I’ve taken ownership in I don’t even know how many businesses.

So Westbound Road, my company was started to buy and sell businesses. And then that eventually led to advisory to help others buy and sell businesses as well. So that was all great, but how is that a mission? It’s not. Here’s what happened is more and more I have been seeing, especially since 2020, I’ve been seeing more and more business owners who for various reasons are deciding to sell their business and they come to me and say, Marty, I’d like to sell my business.

Would you like to buy it? Or can you help me find a buyer? And I look at the business and I realize that. It is not sellable.

[00:01:05] Dude Walker:

And now it’s time once again for the show that gives glorious voice to 25 million business owners across the fruited plain. Radio Free Enterprise with Frank Felker.

[00:01:21] Frank Felker:

Thank you, Dude Walker. Yes, indeed. I am Frank Felker. Welcome back to Radio Free Enterprise. My guest today is Marty Fahncke, Acquisitions Advisor at Westbound Road, calling in from Olathe, Kansas. Marty Fahncke, welcome back for your third visit to Radio Free Enterprise.

[00:01:43] Marty M. Fahncke:

They say the third time’s the charm, Frank.

So hoping this one’s a home run.

[00:01:47] Frank Felker:

You’ve been nothing but charming in your previous appearances, Marty. I can testify to that. To our viewers and listeners, I want to let you know that today’s episode is going to be a little unusual because Marty and I are announcing that we are joining forces to co author a book titled Boomer Sells the Business, a step by step guide to cashing out and living large.

It’s a how-to book for Americans, American business owners in their 50s, 60s, and 70s who have been running their small business for decades and now are considering retiring. It’s also a great book for any business owner of any age who is considering the idea of realizing the value that they built in their business and maybe move it on to try something new.

In this podcast, we’re going to explain. Why it is so important that you have your business sale ready, even if you have no current plans to sell it. Marty’s going to make a very strong case for that. And then we’re going to tell you what you need to do, the seven steps you need to take in order to move your business from where it is now.

To that sale ready condition. Now I’d like for you to stick around to the end so that you can find out how you can get a free copy of the book and the accompanying workbook and Marty, with all that having been said, tell us what your mission is at westbound road and. How it relates to this book that you and I are writing.

[00:03:24] Marty M. Fahncke:

Thanks Frank for that introduction. I’m so excited to work on this project with you. And it truly is a mission. I started buying and selling businesses over 20 years ago, almost 25 years ago, when one of the earliest business that I started Was acquired. And that would led me down the road towards mergers, acquisitions and buying and selling businesses.

Since that time I’ve done almost 500 million in deals and I’ve taken ownership in, in, I don’t even know how many businesses, so Westbound road, my company was started to buy and sell businesses. And then that eventually led to advisory to help others buy and sell businesses as well. So that was all great.

How is that a mission? It’s not. Here’s what happened is more and more. I have been seeing, especially since 2020. I’ve been seeing more and more business owners who for various reasons are deciding to sell their business and they come to me and say, Marty, I’d like to sell my business. Would you like to buy it?

Or can you help me find a buyer? And I look at the business and I realize that it is not sellable. Here’s a shocking statistic. Only 15 to 20 percent of businesses that are put up for sale on the market will actually sell. Only 15 to 20%. So that means 80 to 85 percent of businesses We’ll not sell. The owners have to turn off the lights and walk away.

And the really sad thing about that is that the majority of those owners thought they had a business that was worth a lot of money. They thought they had a business that was going to sell. And many of them planned to use that income from that business sell in their retirement. And then they find out it’s not sellable.

There’s no value and they’re in big trouble. And I am here working with you. To prevent that from happening to as many business owners as we can possibly reach.

[00:05:20] Frank Felker:

That’s great. And that’s a very strong mission. And I think this is why you and I we just our wavelengths are in sync with each other about, it’s all about helping business owners.

And I’ve written extensively about this in my I have a book called Unlocking the M Cube where I talk about how business owners should start with the end in mind. At some point, you should, throughout the life cycle of your business, you should be focused not only on current income and increasing sales and so forth, but what sort of an asset are you building to sell.

The true entrepreneur can see themselves as separate from their business. Their identity is not entirely tied to it. And at some point, They see themselves selling and moving on. Now, that was a great explanation of what you do and how you came to this point. What about your contention that every business owner, irrespective of their intention to sell the business today or in five years or ever, why is it so important that they have their business in sale ready condition?

[00:06:29]

Marty M. Fahncke: Yeah, absolutely. And I have been preaching this message out there quite a bit, and I really want people to take it to heart because I see a lot of times for people. I don’t have any intention of selling my business. Why should I even care about any of this? Let me give you a story. So most people will buy or sell or start one business in their entire lifetime.

However, most people may buy or sell multiple homes in their lifetime. And so I’m going to relate this story to selling a house because a lot of people can relate to that. So when you decide you might have a house and you’ve lived there for several years and you decide, maybe we need something bigger or we need something smaller or, Whatever the case may be.

And so you decide you want to sell the house, you bring in a professional, they commit and they say, all right, here are the things you need to do to sell your house. And it’s called staging, right? And so they might say, you need to put some, some fresh paint in these rooms. There might be some landscaping.

There might be some decluttering certainly. And even all the way down to, baking fresh baked chocolate chip cookies when the buyers come through. So it smells really pleasant. Now, it is not uncommon in that scenario for a homeowner to decide they want to sell their house, get it all ready to sell, and make it appealing to buyers, and then they look around and go, Oh, wait a minute.

This actually isn’t so bad. We’ve fixed all those little Things that we’ve been living with for a long time. And it’s all spruced up and bright now and maybe we’ll stay. And it is not uncommon for homeowners to just decide to stay. It’s a similar situation with your business. If you are in your business right now, and you’ve had it for a really long time, you may have.

No interest in selling, but if you were to prepare your business for sale, to make it appealing to a prospective buyer, or let me rephrase that to a prospective new owner, then you as the current owner can have a fresh new look at the business. And a whole different attitude towards it. If you clean up the things that need to be cleaned up in your financials and your operations and put in the processes and procedures that need to be done to make the business so that it would be appealing to someone else, it’s probably going to be even more appealing.

To you we’ve had scenarios where business owners who are working 50, 60 hours a week in their business, and we help them over a period of time, get the business ready to sell. And one of those is to get the owner out of the day to day operations. And we’ll talk about that a little bit later on, they’re making, let’s say, 150, 000 a year and working 50, 60 hours a week.

When you do all of the steps necessary to sell your business. You might be working 20 hours a week and guess what’s going to happen. Your profit margins are actually going to go up because it’s going to be running so much smoother and so much more efficiently. So you’re going to be making more money and working less.

And again, you may look around and say, heck, why would I sell it now? Great. That’s exactly what we want for you is to have a great thriving business that isn’t. Killing you and driving you into an early grave. Now that’s the positive side. Please go ahead. Why you should have your business ready to sell. Yeah, Frank?

[00:09:36] Frank Felker: No, go ahead. I thought you were coming to a close there. Please go ahead.

[00:09:41] Marty M. Fahncke:

No, that was the positive side. I’m gonna talk about the negative side. And the negative side is what I call four D’s and a B. Alright, the four Ds are divorce. disease, debt and disagreements. And the B is burnout.

Those are the reasons we have people calling us every single day saying I need to sell my business. Note the word I just used need not want. It is burnout. Very common to be trucking along in your business and everything seems fine. And something happens, life happens. And all of a sudden you find yourself needing to sell your business.

Divorce is obvious. Disease is really common. We we just had a business that we just sold a close on a few weeks ago. Where it was a great thriving business. They were doing millions of dollars in revenue a year and some things happened and two of the founders who were family members got cancer at the same time.

And it decimated the business and we wound up selling it for. pennies on the dollar because they were not prepared. Their business was not ready for sell. And but they had a timeline that they had to hit and there was nothing we could do about it. We got the most money we possibly could for it, but it was less than it would have if they’d have been ready.

So divorce, disease, debt, financial ramifications, inflation is going rampant right now. Taxes are getting higher. There’s a lot of reasons. We just had a, I just had a potential client call me the day they’re in a lease in a downtown metropolitan city that has an 8 percent annual increase in their lease payment.

They have a 15 percent profit margin in their business. Guess what? At month 23, they have no profit in the business. And that’s what happened to them. They’re about to go out of business simply because of their lease payments. So things can happen financially that can prompt you to have to sell your business.

Disagreements is the fourth, the partnerships. A lot of businesses have partnerships, whether that’s a family business with family partners or outside partners. Unfortunately. Related to divorces. Bad partnerships can be as bad as a divorce in a business and necessitate a sale of all or part of the business.

We see it all the time. And then last, but certainly not least is the B burnout. We see a lot of business owners. Who contact us and say, I’ve had the business for seven years, 10 years, 12 years. And all of a sudden I have just hit a wall and I am burned out. The scary thing about the burnout thing is that once somebody is burned out, we notice a very rapid decline in the business.

The revenue start going down. The employees start getting unhappy profits go down and all of that impacts the valuation of the business. So if you are experiencing burnout or you’re even close to experiencing burnout you really need to think about selling immediately because waiting will probably cost you a lot of money.

So the four D’s and the B are more reasons why you should always have your business ready for sale, even if you don’t plan on having it. So we don’t plan on having a fire. But we have fire insurance. We don’t plan on getting into a car accident, but we have we have car insurance. You don’t plan on wanting to sell your business, but things may happen that will force you there and you want to be prepared.

[00:12:55] Frank Felker:

Another thing that can happen is something like the pandemic something completely out of the blue that nobody saw coming. Another thing that can happen is technological revolutions. Three times my businesses have been, I think, decimated by be a little strong, but certainly strongly negatively impacted.

I was in the printing business and along came CD ROMs and then the internet. I was in the com business. And along came the com bubble bursting. I was in the real estate business and along came the financial crisis. And you need to be prepared for that and perhaps take a step away before that type of thing happens.

You made the analogy to buying and selling homes. I have a very close person to me who owned a home and a hurricane In in Florida, and they just dodged a bullet with Hurricane Ian. So many of the homes all around that were completely, the whole place was like a flat top, but not their home. And they rebuilt or repaired, and then they decide, you know what, we love this house, we’ve lived here for 20 plus years, we’re selling.

We’re moving on, and it just makes sense to be prepared and everything you’ve just said, particularly relative to burnout. I know I’ve seen it many times. I’m sure you have as well. They don’t, the owner doesn’t show up to work till 11 o’clock or noon. They mope around, they don’t do the things they need to do.

And that type of negativity is contagious. And and as you say, so they’re not marketing as actively, they’re not out there beating the bushes, looking for business, things just start winding down. And before you know it, The value of your business is not nearly what it might have been. Now, before we move on to how you move your business from where it is today to sale ready condition, I’d like you to speak to what it is that the valuation of your business is based upon it.

Before you answer that question, I’m sure you would agree that many business owners think. Oh it’s our top line sales, or we got a million dollars worth of equipment on the floor, or we got a 10 year lease on this space, or whatever it is. What is it actually that you wanted to use the expression new owner instead of buyer?

What is it that they’re really looking for?

[00:15:28] Marty M. Fahncke:

Yeah, absolutely. And actually we’re going to talk about the seven things I recommend you do to get your business ready for sale. And this topic is number six. Because for the most part in general, businesses are valued based on the profit. There’s a hugely broad misconception out there that businesses are valued based on revenue, and that is simply not true.

The case, certainly revenue is important and if a business doesn’t have revenue, it’s not a business, but the valuation is generally gonna start with profit. And then from there you’ll start to look at asset values, like you mentioned, equipment or inventory. Real estate, obviously if it’s, if it owns real estate, the real estate value, et cetera.

But in general, the simple answer is profit. And we’re going to talk about that much more aggressively a little bit later on, because I see a massive mistake that a lot of business owners make that I want to, that I want to touch on when we get to our seven things to look at to get your business ready to sell.

[00:16:28] Frank Felker:

I apologize for jumping the gun on that one, Marty, but it was top of mind for me because it’s an important topic and one that most people do get wrong.

[00:16:38] Frank Felker:

And there’s a thing. And if you, if what I’m about to say Dear viewer, listener you’ve never heard before. I strongly suggest you Google this expression, net present value.

A projected future income streams. And basically what it means is let’s say you’re making a hundred thousand dollars profit per year over 10 years. That would be a million dollars, but because of what’s called the time value of money, you’re not getting a million dollars today. That million dollars over 10 years is worth, let’s say, 500, 000.

I just thrown a number up in any event. That’s what in essence, an entrepreneur or a new owner or a business buyer is most interested in. What type of profits income am I going to be able to generate with this asset, the business that you have? Okay let’s move on then. Let’s start with the seven things every business owner needs to do to get themselves or get their business from its current state to sale ready condition.

What’s number one, Marty?

[00:17:41] Marty M. Fahncke:

All right. These are not in any particular order of importance or timeline. They’re just the order that I put them down in. They’re all important. They’re all critical. So I’ll start with the first one, which is your financials. We see time and time again where businesses have financials that are either inaccurate or incomplete.

Or just an absolute mess. Entrepreneurs and especially small business owners are notorious for flying by the seat of their pants with regard to financials. And, they basically run it by if there’s money in the bank at the end of the month, then it must’ve been a profitable month.

You can not. Can not run your business that way. If you’re going to have a sellable business and if you’re going to have a business that’s worth even owning yourself, you want to have your financials in order. Make sure you have a bookkeeper who is keeping your, all of your accounts payable and your accounts receivable into some sort of a system like a QuickBooks or whatever you want to use.

But you should always have your financials in clean clean order, understand your financials, know what your profit margins are, both gross profit and net profit. Understand how your capital expenditures are impacting your financials and know what your financials look like in the past and in the future.

Make projections, understand what your business is going to look like this year, next year and the year after. That’s a tall order. Again, most business owners don’t have this in place. But it really isn’t that complicated. If you aren’t a great numbers person, hire somebody who is, it will be one of the best investments you will make in your business.

Number two is what we call an operating system or what, not what we call an operating, what is called an operating system. Do not confuse this with a piece of software. When we think operating system, we think like windows or something like that. An operating system. Is a business operating methodology that lets you do everything from creating processes and procedures and standards and documents to hiring, firing your marketing efficiencies, everything else.

And it’s a it’s an entire system. There are a couple out there that we’ve used in the past very successfully. There’s EOS, which is the entrepreneurial operating system. There’s the gazelle system. There’s the scalable operating system. Take a look at all of those and find one that fits. But it’s really a everything from meeting rhythms to outlines of templates of planning and strategizing.

So for example, this is a document my business partner and I called the 90 day game plan. Every three months we get together and we write this document out. It’s our, we go look at the past 90 days, the present, the future, and then we have what’s called our focus five, which is the five things we want to achieve in our business.

to make the biggest impact. So again, it’s not a software, it’s a system. And if you have an operating system in place, it’s going to make your business so much smoother to operate, so much easier to operate. And most importantly, so much better for a new owner to be able to take over and step right in and operate easily and profitably.

Number three thing you need to do to get your business ready to sell, and it’s tied to an operating system in most ways is what we call owner exit. And when we say owner exit, that doesn’t mean the sell of the business. That means the owner exiting themselves from the day to day operations of the business.

There’s a saying from one of my mentors, Ryan Dice, the more valuable you are to your business, The less valuable your business is. What does that mean? Think of it as an old time wagon wheel with the hub in the middle and all the spokes going out to, to support the wheel. If you as the business owner are the hub and all of your team are the spokes and everything surrounds you, everything has to go through you.

That is a business that is probably not sellable because you are the business. All of the things that are in your head are the business. And so you need to work on exiting yourself from that business so that it is not dependent solely on you. If you’re working 50 to 60 hours a week in your business, it’s, it may be a non sellable business.

So you need to exit yourself from the business. Part of doing that is implementing an operating system so that all the things that are in your head. Can go out and be documented and procedures built and processes built in your team can be hired and trained so that they can do the things for you without you having to be present every single day.

The fourth thing to look at is identify a buyer and build your business to suit them. So for example, let’s say you have a plumbing business and you are thinking maybe we’ll sell in a couple of years. Who is going to buy that plumbing business? There’s a couple of different options. There’s an entrepreneur who maybe a plumber now who has a business and then they’re one guy in a van and they’re, they have, visions of growing their business and you’re planning business has three or four plumbers and it’s, you’re planning a business.

You as an owner are above the business, right? You’re no longer out, unclogging drains. You are running the business not out in the field. And so that entrepreneur looks at you and says, I want to be like you. And instead of trying to grow their business, which can be really hard, they buy your business.

That’s one type of buyer and entrepreneurial buyer. Another type of buyer may be what we call a strategic or roll up buyer. There are national organizations of plumbing national chains and brands that are out gobbling up and buying plumbing businesses to acquire until they have a local presence in every metropolitan area and under a national brand.

That’s another kind of buyer that’s called a strategic buyer or a roll up buyer. Identify who you feel you would want to sell your business to and start to build, understand what their needs are, what are their desires, what do they want to buy and build your business to match them. It’s going back to the house analogy.

If you wanted to put your house on the market if somebody, you identify that somebody wanted to buy a house with purple walls, You wouldn’t normally think I’m going to paint my house with purple walls, but if you knew beyond a shadow of a doubt that the perfect buyer out there really wanted purple walls, you’d paint the walls purple.

And it’s a similar thing here. Every buyer or buyer segment has specific things they’re looking for. And if you can start to understand what your future buyers is wanting, then you can start to build your business toward that. Now, number five is to understand your valuation target. One of the toughest.

Jobs I have, and I have to do it almost weekly. I do it weekly. I was gonna say almost daily, but I do it weekly is to talk to a business owner who needs or wants to sell their business. They have a number in mind that they believe it’s worth the value. When we talked a little bit about this before and then I have to break them the news that it’s not even close.

They may think it’s worth 2 million and I may look at it and say, there is In no world possible is it worth 2 million. It’s worth 400, 000. I hate that conversation and unfortunately I have to have it all the time. So I highly recommend that you get evaluation of your business now. So you understand where it is now and you can do the steps to get it where you want it to be.

So the problem is a lot of people call me and say, I want to sell my business, next month and there’s no time to fix anything. And the value is the value. But if you contact earlier or start the process earlier, there’s more time to fix it. Bullet point number six or step number six. I have bullet points on my notes right here.

Step number six is the one you talked about, profit. So a business is valued primarily based on the profit or cash flow. How much money is it actually making? There’s a variety of reasons for that. One, you mentioned that the cash flow, the other big reason is debt. If most buyers of a business have to use debt to buy the business, whether it’s S.

B. A. Loans or other types of financing, they have to fund the acquisition. If the debt service of of the business acquisition is more than the profit of the business that can happen, right? So you have to have a high profit margin in the business in order to make it sellable. And here’s something else, a big tip.

Listen up. This is really critical. Many business owners operate their business and their financials for tax mitigation, meaning they’re trying to minimize their profit as much as possible by stuffing as much stuff into the business to make it look like they’re not making as much money in order to minimize taxes.

Fine. That’s one way to do it. The problem is we’ve had many business owners who’s called subs and I want to sell my business, it’s doing 2 million a year, but I’ve got a great tax mitigation strategy, so it shows no profit whatsoever. How much is it worth? And that is a really tough proposition.

On most business transactions, it’s a three year look back. So if you’re thinking about, if you’re currently in a tax mitigation strategy and you’re doing everything you can to minimize your profits, to minimize your taxes, you may want to start thinking about changing that. You want to maximize your profits.

You can’t make the same money twice. You’re either going to make the money by saving on taxes. Or you’re going to make the money by showing profit and selling the business and gaining it that way. But most people are trying to have their cake and eat it too. And and it’s sad when I have to have that conversation with people that have a, an unprofitable business on paper, they’re making money, but on paper, it’s unprofitable.

Guess what? On paper, it’s also not valuable. And then the last bullet point that I want to talk about, number seven is prepare. Early three years is optimal. Again, I mentioned why three years look back on financials, three years, look back of history at a business is standard in the acquisitions game.

Most people are going to look at three years, especially. In 2024, when, at the time of this recording, 2025 2020 didn’t count. 2020 was an anomaly. The COVID year and even 2021 to some degree, things were so weird for so many businesses. Some had a crazy high record revenues and something, and of course, the PPP and EIDL and all that.

Some had horrible years. So those years are ignored. But the last three years, of your business is what is key. And so if you have, if you start preparing now for a sell in three years, all of the things that I just talked about and many more are going to be in the best shape possible when you get ready to sell.

So number one, clean up your financials. Number two, install a business operating system. Number three, exit yourself as the owner from the business. Number four, identify the right buyer and build your business to suit them. Number five, understand your present valuation and the valuation you want to get when you sell.

Number six, focus on profit. And number seven, start at least three years in advance. So hopefully that was a lot of information, but we’re going to go a lot deeper in the book.

[00:29:04] Frank Felker:

Yes. And I did not interrupt you. I have so many, things I want to say, but, and also questions I want to ask. But I just felt you were on a roll and that was all fantastic information.

And everything that we need to know to move ourselves from where we are to that sale ready position. So I would like to now touch on through them one at a time. Number one was get your book straight. Is that correct? Correct. Financial. Okay. And so I liked how you talked about tax mitigation and yeah, we don’t pay any taxes because we don’t have any profit.

Nobody wants to buy no profit because as we’ve discussed, profit is what people are buying. Another thing that I’ve seen is that a business owners will take benefits or, go so that are off the books or, literally go so far as they’re. taking cash that they’re not recognizing as revenue.

And that’s great. And maybe it helped you build the house that you’ve got and everything, but, you can’t sell that. You can’t, pull the buyer aside and whisper in his ear and say Hey, guess what? We take five trips to Tahiti every year and it’s all on the business, that kind of thing.

So you need to make sure that all your off book Transactions are put on the books. You refer to it as an operating system and the expression I’ve always used is an operations manual. And I use the example of what you get. If you were to spend however many millions of dollars it costs to buy a McDonald’s franchise, just so you can work 70 hours a week and make 160, 000 a year.

But they do have a book, everything you do from the moment you unlock the door and turn on the lights until you turn off the lights and lock the door. And that’s the kind of thing you’re talking about, right? As you mentioned, how you hire, fire.

[00:31:01] Marty M. Fahncke:

Yeah, exactly. If you were to buy, man, I have to steal that from you in the future, Frank, because that’s actually really brilliant.

Like, all of this, every step of every process has been figured out how to do it best. And it’s replicatable, right? And that’s what you need to have in your business. And so I don’t like to call it a manual or a book because people And picture a literal manual in a book, which I’m talking about something even more, like I said, it even involved I guess they’re in the manual, we talked about like, how often do you have, team meetings?

How long are the TV? What are the agenda for the, I guess it all is in there. Yeah that’s actually a really good example is a franchise operations manual. If somebody was going to buy your business as a franchise and you just hand it on books that here, go start the exact same thing. That’s what they really need.

It’s brilliant. Yeah.

[00:31:47] Frank Felker:

And then that’s, the turnkey business,

[00:31:50] Frank Felker: Here’s the key, here’s the book, have fun. And there’s a company or a resource that’s called the manual that I would recommend people look into. Everybody has different ways of working. You may not like the way they do things, but that is their mission is to help you write what I call the book.

And so that’s that. That’s phenomenal. Now, when we talk about cleaning up the books or putting together, cleaning up the the financial books, and putting together the operations book, do you find that Did you get pushback from business owners about that? Yeah, it sounds like a good idea, but it also sounds like a lot of work, Marty, and I’m not sure I really want to go through all that.

And so two questions on that. Do you hear pushback and if, and when you do, or whether you do or not, can you help people make it easier for them to get these things done?

[00:32:45] Marty M. Fahncke:

Yes. The answer to the first question is yes, certainly. And and it depends on their timing. Again, if they’re calling me and saying, I have to sell my business now.

The no, there’s no time to install an operating system and create that book. It just, it’s not gonna happen. Their financials should be in order. And we actually have a accounting partner accounting firms that will take over their financials and clean everything up. It can take.

Sometimes a month or two to do all of that. But we absolutely recommend that happened. And we’ve got resources to do that. If somebody is contacting as well in advance of their cell a year or two or three, which is optimal. There’s plenty of time to do all of that in. I don’t get a lot of pushback from people who are contacting me that far in advance because these are people that have figured it out, right?

They’re contacting saying, how do I get the most money for my business when I’m ready to tell me and I’ll do it. And if they’re contacting me that early they’re big enough planners and they understand well enough to know that, yeah, if they’ve got to start. Creating the playbook or creating the operating system now, and it’s going to be a lot of work, but it’s going to pay off in the end.

Then I get a lot less pushback. The pushback I get is from people who like, is it have to sell? And I say we can’t, we’ve had some businesses. We’ve literally had to walk away. We’re like, your financials make no sense. They’re an absolute mess. We have to have them proper, or we can’t sell your business.

We’ve had some who’s I, they are what they are. You have to do what we won’t even have

[00:34:09] Frank Felker: to deal with them.

[00:34:10] Marty M. Fahncke:

Yeah, we don’t. And then we have others who we say, look, you’re, your financials are a mess. We’re going to have you go to our accounting, partner accounting firm, let them get everything in order and then we’ll put you on the market.

Which we get pushed back on. I need to sell now, not in two months. Like I can’t sell a business that the financials literally don’t add up. It’s just, no buyer’s going to buy it. And if they do, they’re going to come back and sue you later because something wasn’t right. So don’t break.

[00:34:36] Frank Felker:

Yeah, that’s what you need. Yeah. And also, a fire sale, you’re not going to get the best price. You, in fact, you’re going to get a very poor price. Exactly. Okay. I don’t remember which number it was, but I believe you referred to it as exiting the owner. Was that the expression? Number three

[00:34:52] Marty M. Fahncke: owner exit.

Yep.

[00:34:53] Frank Felker: Okay. So one of the things that I talk to business owners I consult with about is I’ll ask him honestly, how many days a week they work. And I’m sure you hear it. I work every day, thank God it’s Friday. There’s only two work days left till Monday. And they just, anyway, they feel compelled, whatever, for whatever reason, that’s what they’re doing.

And it’s part of what they see as their role as an entrepreneur is to be hard working and more hardworking than, some schlub that’s a clock and a check on a nine to five job. But What they don’t understand is exactly what you said, that they, what they really doing is in the the e myth is they’re just managing the business.

They’re, they really bought themselves a job. They’re not an entrepreneur. And so what I encourage people to do is take a long weekend once a month and then take an entire week off. Now, of course that requires you to prepare. your people and your systems and all that jazz people and processes to be able to do that, which means empowering people and giving both responsibility and authority.

Anyway, we could spend a lot of time on that. But the ultimate thing, in my opinion, is if you can take one full week of vacation every quarter, Then you are now at least very close to the point of being able to to exit or sell the business and I’ll let you respond to this after I tell this great story, I know a really successful entrepreneurs, great American dream story came to the U S as an immigrant, a hundred bucks in his pocket, blah, blah, blah.

Now, he’s got a multimillion dollar home services business that’s actually being franchised. And they are selling these things like hotcakes anyway. He told me, or I overheard him telling somebody else that he had everything set so well that all he had to do was come into the shop at nine o’clock every morning and yell for a half an hour.

And then he could go home.

He’s almost there, but not quite. He was kidding. He’s not a yeller. And he’s got people that worked for him for 15 years because he’s totally focused on his employees and his customers and everybody knows it. And that’s why his business does so well. But anyway, so what, how would you. Any thoughts about like phases we could go through from working seven days a week, a hundred hours a week to four vacations a year to, showing up at nine o’clock and yelling for 30 minutes.

[00:37:39] Marty M. Fahncke:

Phase one is believing it. You touched on it earlier. People, entrepreneurs believe that if they aren’t working 50, 60 hours a week, they aren’t an entrepreneur. They have to believe that their business can operate without them. And that’s often the most difficult phase, because if they can’t get there, then they can’t do the steps to get them where they need to be.

So you’ve got to believe that your business can operate without you. Now when we’re talking about that, I want to make it clear, we’re talking about an actual business with employees and team and infrastructure. If you are in a solo entrepreneur and you are the only person in your business, and you are the only source of revenue.

That obviously right now certainly can’t work your way out of the business and also, by the way, that’s a business with almost no value because if you stop working, the business falls apart. That is not a business. I am talking about businesses that actually have some sort of team infrastructure.

So the first step is getting them to believe it. The second step is understanding those steps. How? And we always say that the ultimate the ultimate scenario is you should be able to take a month on a deserted Island with no internet, no phone, no nothing, and you get 15 minutes once a month.

to log online and check on the status of your business and make any impact. And so you should have a dashboard that you can pop up and instantly with red, yellow and green. And we actually implement these in our businesses. Red, yellow and green. You pop it open. You look, if it’s all green, you close the laptop and you go back about your business.

If it’s yellow, that tells you that there’s something that’s not quite right. You need to, maybe go in and twist a dial or ask a question or poke something. And if it’s red that means, hey, something’s seriously wrong and we need to we need to fix it. And so from point A of 60 hours a week to, Point Z of 15 minutes a month, which is the ultimate goal.

There are a lot of steps in there, but I generally recommend starting with bringing in some help there are coaches for EOS or coaches for gazelles. There’s coaches for scalable who can come in and get everything set up for you and help you through that process. It’s not a very easy thing to do.

Self serve you usually need to. to put you through that. But again, first step is just believe it can be done.

[00:39:59] Frank Felker:

We’re going to need to zip through my last two or three points here and then get to telling people how they can get a copy of the book. You mentioned roll ups a company that’s going across the country and buying up plumbing.

Companies and that kind of thing. This is something that people really need to be aware of and find out what the status is in your industry. Is your industry currently hot for roll ups? And what is it that type of buyer is specifically looking for? A large company that knows how to acquire it. A company like yours and has done 100 deals just like you in the last five years could be somebody you want to deal with.

I’m sorry. We’re not going to have time for us to go into that, but perhaps we can do that in a follow on book. Absolutely. Also, you talked about how people always believe that their business is worth more than it is. It’s been my experience that generally for each owner in the business, we’d like to get a million dollars.

That each one of us would like to walk away with a million dollars. And generally that’s not going to happen.

[00:41:06] Marty M. Fahncke:

And then the last, I did have one business owner last year, by the way, who told me how much he wanted to sell his business for. And I, and it was, I vividly remember this because I said, that’s way too cheap.

I can get you twice that. Wow. He was like, oh, okay. And I did get him twice that, but that’s one in the last five years that I’ve had, actually was like, oh yeah, your expectations are a little bit too low. I was going to say that

[00:41:29] Frank Felker:

I’ve never heard anybody that happened.

[00:41:31] Marty M. Fahncke:

He gave me a great testimonial too.

[00:41:34] Frank Felker:

I bet he did too. And then the last thing is you talked about three years. There’s three year look back. Let’s start today. Let’s start maximizing profits. Let’s start writing the book. Let’s start doing everything that Marty recommends. And those three years are going to go by fast. Even if you are starting to feel burned out or what have you, if it’s important enough to you to walk away from this endeavor with a big chunk of change to allow you financial, if not independence, a lot of freedom and choices about what you’re going to do next.

Three years is a worthwhile investment. So Marty, let’s talk about I want to just tell people I’m sorry. One last thing, maybe on any of those things I just talked about, roll ups three years or what have you, before we go to how people.

[00:42:28] Marty M. Fahncke: I think we’ve pretty much covered it. I think I think that. I have kind of word vomited a ton of information. And if you’re listening to this right now, you’re probably feeling a little bit overwhelmed. So I think I’ve probably covered everything as best we can. I think we’re going to get into a lot more detail later on in the book and the workbook and in future interactions.

I know that there’s lots of people that have lots of questions after hearing all of this and you’re going to talk about how we can help them out.

[00:42:55] Frank Felker:

Great. Okay. All you need to do is to send an email. To book@BoomerSellsTheBusiness.com. And obviously that will include your email address. I would also be excellent if you included your shipping address.

And your phone number if we end up, I’m not sure how we’re going to ship them, but then certain shipping companies like to have the phone number in case there’s some problem with the shipment. And and we’ll send you the book when it comes out. And right now as we’re recording this, it’s the day before Independence Day.

It’s July 3rd, 2024. And we’re looking to have the book come out in Late August or perhaps mid September of this year. But you can go ahead and register there now and we’ll get you the book when it comes. And then the last thing is Marty I know that you in some cases, obviously you consult to people about selling their businesses.

Would it be all right if I put a link in the show notes and Whether it’s on Facebook wherever somebody YouTube might be seeing this video where people could schedule a meeting with you at no charge.

[00:44:07] Marty M. Fahncke:

Absolutely. My step number five of how to prepare your business to sell is to understand the current value and then how that relates to you, your needed value.

So the best way to understand the current value is yeah let’s get together. We can put some, a rough valuation together for you free of charge. You need to know what that number is so that you know how to plan for it and happy to do that or answer any questions you’ve got from from this interview.

So yeah, go ahead and put a link on there. You can get on my calendar. We’ll start with just a 15 minute brief chat and then I’ll give you the information you need as best I can. And then from there we can decide. If we work together longer term or if you just needed that and that question answered, happy to do that as well.

I just, again, I’m here to serve. My mission is to just get the wheels turning and get people thinking about what this looks like for their life, as far as exiting their business. And I want to be able to provide that service to the community of listeners and readers.

[00:45:03] Frank Felker:

That’s great. And I can tell you folks, because I’ve known Marty for quite a period of time, he means what he’s saying.

He really is committed. To helping you get the most for your business. And I am the same way relative to helping you in every aspect of your business, because I feel I’m, entrepreneur through and through it’s in my blood, I literally have been doing this since I was 15 years old, which makes it 50 years now.

So I love you guys. And we, Marty and I both want the best for you. Marty Fahncke, thank you so much for joining me again for the third time on Radio Free Enterprise.

[00:45:40] Marty M. Fahncke:

Ah, thanks for having me here. Frank has been an absolute fantastic opportunity and I am so looking forward to working with you to literally change people’s lives and make them better.

It’s great. I’m very excited.

[00:45:51] Frank Felker: Thanks again to Marty. And thank you for joining us. Until next time, I’m Frank Felker saying, I’ll see you on the radio.

[00:45:57] Dude Walker: He’s the kind of guy who finds microeconomics fascinating. But go ahead and listen anyway. Radio Free Enterprise with Frank Felker.

As business owners, we often spend months of effort and thousands of dollars to land a new client, but then do almost nothing to retain our current clients by showing them the slightest amount of appreciation.

“Studies have shown that 68% of customers leave because of a perceived attitude of indifference on the part of the company. Perception is everything.” Forbes

My guest this week, Joe Kenemore, CEO of Mailbox Power, says that is an absolute shame. Especially when his company makes it so easy and inexpensive to show your best clients a little love once or twice a year.

Tune in to this week’s Radio Free Enterprise episode to learn how you can easily and consistently show your customers, employees, vendors, and partners how much they mean to you – right from your computer or mobile device.

Learn more about Mailbox Power: https://bit.ly/3iFHNYo

What follows is a computer-generated transcript of our entire conversation. Please excused any typos!

Frank Felker  00:23

Thank you, Dude Walker. Yes, indeed. I am Frank Felker. Welcome back to Radio Free Enterprise.

My guest today is Joe Kenmore Joe, CEO of Mailbox Power. And he’s calling in from Lehi, Utah. Joe Kenmore, welcome to Radio Free Enterprise.

Joe Kenemore  00:41

Awesome. I am excited to be here, Frank, let’s do this thing. You know, I show a lot of energy. So sorry, I hope your audience is ready.

Frank Felker  00:49

Well, ready or not, here we come. And, yeah, I’m aware of your energy level. And it’s one of the many reasons I’m so glad you’re here today, Joe, really appreciate you taking the time to do this. Okay, so we got a lot of ground to cover, I want to start with this. When I first saw a Mailbox Power, I got it immediately. And I signed right up, I was two or three or four months ago. And I’ve been using it in a number of creative ways. But I got to assume that most people watching or listening, are not aware of Mailbox Power, and so they don’t get it. What, what is the elevator speech you share with people?

Joe Kenemore  01:22

Well, I don’t know if I have an elevator speech. But boy, I can tell you what Mailbox Power is all about. So let’s do this. Listen, Mailbox Power is a customer engagement platform. And what we really do is it’s relationships, it’s retention, it’s referrals. It’s really result oriented, result oriented marketing. And we use the mailbox and not the inbox. And I’m not saying don’t use the inbox, what I’m saying is, is the mailbox is a very effective tool, when you really take a look at our technology and how it functions.

We turn bystanders into customers, and we take existing customers, and we create kick ass customer experiences for companies. So customers don’t feel like another number, they actually feel important to the company, they feel important to that company that they’re buying a good or service from, let’s take an insurance agent, for instance, an insurance agent, you know, all they do really is their hands out all the time for premium, it’s here’s my premium notes, premium notice premium notes, you know, pay me 80. Right, right. And that’s typical for that space, they didn’t create a relationship, something that that was stands the test of time.

And we look at people who are in a commission-based business, what they’re really, really trying to do is create a long term or forever relationship. And that is the expertise that we deliver here at Mailbox Power through an automated system, that we’ve also realized that folks don’t want to sit down and pound out on you know, a handwritten card every day, well, hold on 2% of the population will do it. But the other 98%, we are here to help you. You know, our system is very automated, where you can click on a link and somebody’s name somewhere and it automatically fires off an order for you just a done deal.

Frank Felker  03:14

Well, and it is highly automated. And there’s all kinds of incredibly interconnected aspects to it. It also integrates with a lot of third-party apps, I don’t think we’re going to be able to cover all that ground Joe. So I want to start at sort of a 40 or stay at a 40,000-foot level. Okay, Mailbox Power, you’re engaging with clients and prospects, retention, recognition, etc, etc. What kind of great stuff are we able to put in these people’s mailboxes?

Joe Kenemore  03:43

Oh, my goodness. Are you kidding me? Wow, dad, that was a softball, Frank. But thank you. I appreciate that. I’ve got my bat out and I’m ready. All right.

Frank Felker  03:53

Well, hit it out of the park.

Joe Kenemore  03:55

Well listen, let’s start out with just greeting cards. I probably have. There are seven offerings in our greeting card category alone, regular five by seven greeting card with a regular envelope. And then we move on to three other options that include the option to print right on the envelope one at a time, you don’t have to order 30,000 or 10,000 or even 1001 at a time. And having control that envelope is a big deal. I have what’s called a Giga gram. It’s an 8 x 11. A greeting card it is huge, and it makes an impact, and you get control of that envelope as well.

And then our postcard offerings and our postcard offerings are absolutely amazing. four by six and two other larger sizes. I mentioned the four by six for a reason. because it brings us a lot of customers around one thing our pro members don’t pay for the four by six postcards, they just pay for the postage, so free four by six postcards. For our you no group of pro members, no other products. Oh my gosh,

Frank Felker  04:53

if I may want to stop you there because I just want to stick with the printing for a minute. Because as you and I discussed it previously. In a previous life, I was Johnny Digital Printing. And I am amazed. In particular, the Custom Printed exterior envelopes on the baronial cards. I just I just, that just blows my mind. And it is powerful in terms of open rates and impact on the recipient. So we get notecards beautifully printed full color inside now you name it, folded, stuffed, sealed address stamped, yeah, yeah. And then yeah,

Joe Kenemore  05:29

I’ve got a couple of examples here, too. And I’d really Frank, if you don’t mind, I’d like to talk about some technology that we have that no one else has, right. And I also want to talk about the psychology of somebody’s going to their mailbox. And why. Why do people that are using Mailbox Power have the conversion rate that they do, and there’s a lot of reasons behind it. But let me start here. This is a postcard simple postcard, right?

But as you can see at the top, that’s my name in the headline, Joe, we can make your problems go away, and my name isn’t headline. Now, I’m going to stop right there. And I’m going to talk about the psychology of a human that goes to the mailbox. Now. I’m going to admit my age, I’m 56 years old, I’m going to I’m going to say a couple things here really quick, Frank, and hopefully your audience will understand. When I go to the mailbox, you know, when you go to the mailbox, what are you looking for, you’re looking for your name, that’s what you’re looking for, you’re not looking for your spouse’s name, your children’s name, your neighbor’s name, you’re looking for your name. And some of us at my age, I’m still looking for checks with my name on it, but they’re not their deposit.

So anyway, that’s all that’s all good. But the truth is, when I get something like this in the mail, and it’s got my name, right on the top of it, the very first thing I ask is, who knows me? Why did they send me something? Now this card, this card went out and did a dance for a handyman service. And they sent out I don’t know, I think 900 of these things, and it brought them back $19,000 in business. Now, I have to say this as well. $19,000. Do you know what the number one question they got was? How did I get my name? Oh, how did you get my name? That was the number one question.

Now. With that being said, I got it. I’m going to show you a couple of, you know another example here. What about this one? Right in the headline, Larry, you deserve the best Indian cuisine in Las Vegas for dinner tonight. Okay, back of the card, ah, a QR code. It takes them to the menu. It converts them from a physical piece of mail to a digital customer of some kind. We’ve connected the dots between the mailbox and the digital world. And that’s one of the things we’re doing now. I want to just take a peek at this really, this is one of those Giga gram envelopes. And I want you to pay attention to something really quick. What does it say right there? Nice Kelly. Right? Is the homeowner. And that is Kelly’s home right there on the envelope. Hey, I

Frank Felker  07:59

Hey, I agree, nice Kelly.

Joe Kenemore  08:00

There is no way that Kelly will not will be able to leave this envelope or throw in the trash. He is opening this sucker up guaranteed 100% open rate. And that’s kind of what we’re after. We’re after that open rate as marketers, you know, Frank, I think a lot of the marketers if you’re a marketer, and you’re listening to my voice right now, I have a I have things that have 100% open rates. Unlike email 100% open rates, if you send a package to somebody, it’s a 100% open rate, they are going to open it, their eyeballs are going to be on your message. And that’s really what counts in this whole thing.

Frank Felker  08:37

A couple of things I’d like to pick up on that you just talked about. One was the handyman and you said they sent out 900. But I want to make sure people understand they could have sent just one that’s crazy, customized full color with all the impact 1000 100 million they could have sent.

The next thing is with the QR code, one of the things that I put in the card is a QR code that goes to a video. So it’s like a video postcard a video note card. And of course that’s a personalized video for that person. And which brings us to you know how much time and effort should be put into the customization and so forth. And I’d like to just touch on that. Let’s if we could have your thoughts about what is the worth of retaining or acquiring a really great A-List customer.

Joe Kenemore  09:34

I couldn’t agree more. And maybe it’s not even A-List Frank, you know, when you really talk about retaining a customer. What we like to talk about is what is the lifetime value of a customer to your company and to you. And again, I’m going to go back to commission sales folks. And let’s talk about an insurance agent who’s selling a policy. And that policy is worth $250 annually to that insurance agent $250 annually. For a 10-year period of time is 20 $500. Would any of you that are receiving $250 a year for in commissions from somebody be willing to take a small amount of that and invest it into the retention of that customer?

You know, my understanding is, is that it’s relationships is what makes people stick around. It’s what make people stick to a business, it’s what the, it’s the sticky binding glue is that I have a relationship with somebody, I can pick up the phone and call somebody, there’s a warm voice. On the other side, there’s somebody there that cares about me, there’s somebody over there that was willing to send me a gift, there was somebody over there at that company, who recognized and acknowledged how important my business was to that business. It made me feel good, it made me feel important as the customer, those customers, they don’t cheat on you, they don’t leave on you, they will call you and add more business to your to the line of business that you sell. And that is pretty much the whole deal around everything that we’re speaking to Frank.

We’re in a Thank You Economy right now, literally a Thank You Economy, things have changed. If you are not thinking your customers, somebody else will. And I can promise this, they will eventually hear my voice and my message. And I think take advantage of my voice and my message and Mailbox Power, you are going to be at a complete disadvantage at that point. Because I’m going to tell you right now, people will switch for $1 in a second. But they will not switch if there’s a relationship involved, they will not cheat on you, they will not leave you.

And I’m speaking to every person in sales and every business out there. I’m even speaking to the HR person at a company. It’s a tough deal right now to get new employees, it’s a tough deal even keep the employees. And you know why? Because they don’t feel valued. They don’t feel appreciated,

Frank Felker  11:51

if you would just speak to that the recognition, employee recognition, impact that Mailbox Power can have for a company of any size.

Joe Kenemore  11:59

Oh, my goodness, recognition is such a big deal, I got to tell you, about a third of the conversations I’m engaged with on a weekly basis right now have to do with employee retention. And it’s not just employee retention, where we talk about recognition, but employee retention is a big deal right now, recognize an employee, a brand-new employee, imagine they’re in an onboarding. They’re onboarding into a new company.

And let’s say they got hired on a Friday, and they show up at you know, the first day of work on Monday. Well, by that following Friday, they get a greeting card in the mail with a gift from the owner or CEO of the company that just says, Hey, I appreciate you being a part of our family. I’ve heard great things about you. And I really, really look forward to meeting you someday soon. And I wish you all the best on your journey with our company. Imagine how that employee is going to feel right out of the gate. from on high, they get a message and a gift, you know, from an owner.

And maybe the following week, they get a message and a gift from the person they directly report to. And then on their birthday, they get a birthday card and a gift. And guess what the folks in HR don’t have to remember, we do we remember for you, we’re the ones who take care of all that all that stuff. We package it, personalize it, send it out, it doesn’t have our brand on anything, it looks like a glove that, for me, this is the deal.

And let’s talk recognition for a minute in other spaces, direct sales, direct sales, we are so perfectly fit for direct sales, it is incredible. You know what they say in direct sales that behavior recognized and rewarded is a behavior that will be repeated. I’ll say it again, a behavior that is recognized and rewarded will be repeated. And that’s one of those things in direct sales. Somebody signs up their first customer. And all of a sudden in the mail, what do they get? They get a greeting card saying wow, what a great job. I wasn’t expecting this. This is wonderful. I can’t believe you’re that this into your business.

But what are they going to do? They’re going to repeat that behavior because they were just rewarded for something that they went well, I’m going to go do that again. And what about who signed up their first business partner? I mean, boom, let’s reward them. What about their first customer? What about you know, they rank advance they did whatever it is that they did, you know, recognition, what do they say? babies cry for it and grown men die for it. I it’s the truth. You know, I mean, it’s the truth, it’s recognition. And we all want to be recognized for the great job that we do, and the communities that we serve.

Frank Felker  14:36

I’m so happy I’m already a customer. Because I’m getting fired up.

Joe Kenemore  14:42

Good friend. Good. I’m glad to hear it. I hope your audience is listening in they understand. You know, what we’re speaking to the mailbox is a very, very powerful mechanism to communicate with your employees, your customers, the customers that you don’t know Frank, I’d love to talk about that for a minute prospecting. No need to prospect Through the mailbox. Yeah. And can I talk about that for a minute?

Frank Felker  15:03

I wish you would.

Joe Kenemore  15:04

Okay, awesome. Here’s the deal. In mailbox pal, we have a couple of things going on. And I’m going to talk about two things. I’m going to talk about a prospecting campaign. And I’m going to talk about our list builder. And I’m going to start by talking about our list builder. Imagine you’re a realtor. And the one thing you want to do, you’ve just listed a home for sale, and you represent the seller. And you want to find the buyer because you love commission so much, which is why I love you, right? This is why I really like them, we should vote, they want to double dip on the Commission’s because and I want them to win this, I want them to win. so desperately, I wanted to double dip on the Commission’s all day long, I want to represent the seller and the buyer.

Now how would I find that buyer, the perfect buyer, the laser targeted lead, and you don’t have to get on the phone and start cold calling and you don’t have to door knock, that those days are over folks don’t have to do that. So what my recommendation is this, you get into our list builder. And what you do is you go to the area code or the address of the home you’re selling, that you’re representing. And you create a list. And when you create a list, you can identify who you want to work with, by their income, by their credit score, by their net worth, can they write a check for a down payment?

I mean, these are just three items of probably hundreds of things you can actually choose from, do they rent right now you could find that out. So I could do renters that have an income that have a credit score and a net worth, or they can write a check for down payment. Now, how would you like to talk to those people and those people alone, and those leads, by the way, are less than 10 cents apiece, less than 10 cents apiece, and you get those names and those addresses. And you could keep reaching out to those folks at will whenever you want.

And realtors I’m speaking to you right now directly. You guys are crushing it right now. You can list a home and you’ll have 20 offers. I mean, it’s crazy. It’s going to adjust. Yeah. And when it does, tell me what your customer experience is like. Tell me those folks you sold homes to? Are they giving you referrals right now because you did such a great job. Probably not, doesn’t happen often.

I got to tell you, for the realtors out there. I have a campaign. And it’s called the ultimate closing gift. When you engage this ultimate closing gift sends a gift every 90 days for two and half years to that homeowner. And it’s not just any gift, the third gift that goes out, we help us by start asking for referrals. It’s a tape measure, an actual full blown yellow tape measure, right? With the realtor’s logo and the homeowners name on it. And the greeting card says how do we measure up? If we measure up to expectations? We love referrals. That’s the deal? Yeah. Do you have a company you’re working with? That’s actually helping you engage with your customers ask for referrals.

And I like to put it like this. Frank, are you ready? This is what I like to tell everybody. I want to put helium in the hands of every one of your customers helium. So when somebody in a circle says hey, do you know a good realtor? Oh, I got the best realtor on the planet. So fast because there’s helium in it that we help you put in that hand. They cannot help but to give you that referral because you have treated them like no one else has ever treated them before. What happens with realtors, I get this crappy basket of dried crackers, bad cheese and maybe a bad bottle of wine is the typical $40 closing basket. And in today’s day and age with a home selling average home selling price of $300,000, $400,000. That’s all I get?

Frank Felker  18:39

Yeah, that’s it, they’re getting a five-figure commission and you’re getting a crappy basket.

Joe Kenemore  18:43

Right. And for a couple hundred bucks, they can engage this ultimate closing gift. And they don’t have to think about it.

Frank Felker  18:49

This is the perfect place for me to interject and try to transition. So real quick, because I’ve seen your training on this ultimate closing gift over the course of two and a half years. All the great stuff. And we’ll come back to all the great stuff that you send them. What’s the total budget on that as I recall, it was like $200 or something like that?

Joe Kenemore  19:09

That’s about it. It’s about 200 bucks. And you can make adjustments to it. You could send different things. It could be $500. could be it could be $1,000. Or it could be 100 bucks, depending on what you want.

Frank Felker  19:18

Let’s use that as an example, a $200 investment spread out over two and a half years – and you only pay as you go – to keep a client that was worth five figures in commissions and could be worth their weight in gold and referrals and repeat business. So anyway, let me let me I know that gets you fired up, but I got to stop you for a second.

Joe Kenemore  19:38

Yeah, yeah. I missed another piece too. Oh my gosh, Frank, but keep going. Let’s go.

Frank Felker  19:43

Oh, I’m sorry. I might want to take a note. But here’s what I’m driving at. A lot of people – I always try to put myself in the seat of the viewer or the listener – “Yeah, yeah, yeah, Joe, this sounds great, but it sounds expensive. And you know, I don’t know whether I can afford this!” So we touched on the value of acquiring and retaining a client And we’re talking about it’s not as much as you think. So let’s just start here because I also want to transition from the printing gifts to the more elaborate gifts.

A pro membership and Mailbox Power is $49 a month, and it includes up to 50 free – included notecards. Postage is always extra, we got to pay the USPS, we can’t expect Joe to handle that for us. No unlimited four by six postcards. And I’ve seen you throw down the gauntlet and tell people go ahead order 100,000 postcards, see what happens. And so there’s all that stuff, plus that we can use the tool to build lists, there’s a separate tool, people finder where you can find an individual person that you want to send all kinds of stuff, $49 a month.

Now, if you want to put together and you could put together this program you just spoke of if it was all just notecards, there would be no additional cost other than the postage over the two and a half years. But then you also have some unbelievable gifts that are so cool. And some of them are so clever, and some of them are so funny. So if you would, you can certainly go in with whatever it was you were about to say. But the next place I’d like to go is for you to talk about the gifts. I mean, they’re amazing.

Joe Kenemore  21:21

Perfect, perfect. So the one thing I missed. So we talked about building a list. And I missed this piece. And this just is a great segue. So thank you, Frank. So the one thing I didn’t talk about, do you know the name of that big customer that you want to talk to that potential big customer, and you know who you want to talk to, you know who it is that signs the decision maker, on whatever it is that you’re selling the goods or services that you’re selling, and you just don’t know how to get ahold of them. You don’t have that inroad. That’s what else we kind of specialize in. It’s called a prospecting campaign. I have several of them.

We have one we used to communicate to realtors, it’s 10 touches. It puts something in their mailbox every four days, for 40 days. You think there’s a way anyway, anyhow, that that person wouldn’t know exactly who I am 40 days, Not a chance. And this prospecting campaign cost about 50 bucks, but it’s almost bulletproof. Like every single if you know what to say, that person is going to call you even if they don’t know you. They’re going to call you eventually. Right?

I have a prospecting campaign for myself right here at Mailbox Power. And what I use this prospecting campaign for is this. It’s seven touches every four days for 28 days, it’s seven touches, and every single touch is a package. And this was designed for me to communicate to chief marketing officers to VPS of sales to offer in a position that might be able to go Oh yeah, I really like that. Now here’s where this transitions into the gift thing because if you think this is just about greeting cards and postcards, you would be extremely disappointed because that’s only one section of nine that we have and all of our gifts are personalized.

We can go right into gourmet foods, gourmet foods that are actually personalized. The brownie label is personalized. It has you can put whatever you want on the label that goes on the brownies or the cake bites or the Belgian mint truffles, or whatever it is in our section of gourmet foods. Almost everybody loves chocolate. The statistics are out there it’s 99% of the population they’ll eat it for sure there’s sugar in it’s like crack cocaine is really good stuff that bread the brownies are a no brainer. I got to tell you, I There are over 10,000 of them in my freezer in the back. You know what I mean? That is the deal is those brownies.

But then we move along to drink where a personalized coffee mug for $10.99 for our pro members $10.99 one mug, printed and shipped the next business day. There is no other place you can buy that no other place. But then we start talking about laser engraved gifts, leather wine boxes with all the tools and the top charcuterie boards. I mean all kinds of just great, great gifts that could really fit any customer.

We have prints. We have pet gifts we have. We have gifts that are just amazing. And when I say personalized, everything’s personalized. I just want you to imagine this. As a matter of fact, I’m going to grab this box that I have right here. This is the box, and it says trying to earn brownie points. No. I ordered this for my friend Susan. And it says prepared especially for right here. Susan Thomas. There it is prepared especially for Susan Thomas.

Now inside of the box. I just want you to pay special attention to a couple things. laughter is the best medicine is what the card on the outside. It has my picture on the inside. All right. And it says dear Susan, they say that laughter is the best medicine they lied. It’s brownies. Please enjoy your friend girl. Okay, on the back, it says brownies alamode put one of these things in the microwave. But what I want you to look at is this. Imagine this the brownie that shows up trying to earn brownie points bait, especially for Susan. Right? There’s a foldable phone holder in here as well. But what I wanted to share is, it’s the foldable phone holder actually is personalized as well. And it would have their name right on the bottom of it laser engraved. So it’s a gift set. And you can’t tell me a customer wouldn’t think you just went to the end of the earth to get the gift set like that for them. That is all personalized as well.

Frank Felker  25:35

And I want the people to understand because I have not sent the phone holder. But I have sent that set with the brownies and the customized gift box and the note card and inserted. And then it ships out two-day express. And the whole schmear is $17, including the shipping. The shipping cost more than the product. And the impact that it has on people is astounding.

Joe Kenemore  26:03

It is if you want your phone to ring. It’s what we do. If you want your phone to ring from existing customers giving you referrals, if you want your phone to ring with new people that you don’t know, you need some new prospecting, you want to take control of your leads, and stop guessing this is the spot. I mean, this really works that mailbox is a phenomenal place for engagement in 2021 and beyond. I think that all the millennials, the United States Postal Service to a survey that really clearly identified that millennials love getting things in the mail. They love seeing their name on it,

Frank Felker  26:40

about that survey

Joe Kenemore  26:42

is just that I’m being you know, you look at the survey, and it’s like, wow, they not only do they love it, but the engagement, the actual engagement. I am willing to bet everybody hearing my voice right now, Frank, are you ready for this? Every single person that’s hearing my voice right now has probably gone to a business or a service from something they got in their mailbox. I almost guarantee. I’m sure statistics are so high. All I got to say is Pizza Pizza. It’s going to show your mailbox, you know, it is you’ve probably bought from it before.

And if you didn’t buy from it You were reminded to buy. And that’s kind of the key is that did you know everybody has a place in their home for a meal for their male friend. That’s another citizen from the United States. But I know you just thought What? Oh, yeah, I’ve got I know where I put my mail.

Did you know that mail stays in the home for an average of 17 days? Why did you know that? The average email last point seven seconds. Let’s figure this out. So it’s really a big deal. And the other thing is this the engagement 135% engagement when you have somebody’s name on the piece of direct mail 135%, which means they engage with it probably more than once the first time they see their name and go, who is it and what’s going on? Well, I’m going to keep that this goes over in the keep stack because they had my name on the track. Right? You know the deal?

Frank Felker  28:04

Well, there’s usually you know, left-hand right-hand trashcan. But when your name is on there, what do you throw in your own name away? No, you know? No, sir. No, sir. Not at all. Well, I wanted to ask you about a couple of specific success stories. One way turns out I don’t know, I just realized is Steve Angeline. His office is like in the same zip code where I’m sitting right now. Oh, my goodness. Yeah. Isn’t that something but anyway, Oh, my goodness. I see all of his videos.

So he has a he’s a real estate agent. And one of his specialties is getting listings from FSBOs for sale by owners. And I’ve been marketing to or helping real estate agents’ market for so long. That FSBO was practically tattooed on the back of my head. And it’s a seems like great hunting grounds. But those FSBOs are hard to turn. And yet Steve’s using Mailbox Power to turn an amazing number of those for sale by owners into listings. What’s the story he’s told you that you’d like to share?

Joe Kenemore  29:05

Why it’s not just a story. I’ve dug in his account. He shared it with me. I’ve watched him I know exactly what he’s doing. And clearly for me in the word FSBO I thought it was a frisbee I figured out it wasn’t last year and went Oh, for sale by owner got it check. Anyway. It Steve Angeline is you know, he’s an amazing you know, businessman and he found us and what he figured out is if you will put the FSBO home on the front of the postcard. The homeowner will engage with that piece of direct mail.

So what he figured out is that he put together a system to send these free postcards out to these for sale by owners. And what happens is people collect these postcards and he sold I believe it was $7 million in sales last year. Just because of the postcards, and the Mailbox Power system, no more cold calls, no more door knocking none of that stuff. It’s all gone. And its cost for that business was about $2,200 only reasons total cost.

Now I’m staring right now. And I have a postcard that he sent out. And he sent 14 of them. His cost was $8.53. His return on investment was $1.2 million in sales, and a pending sale for $600,000 on these postcards. Well, that ROI is almost unheard of. And in this world, in that FSBO world, Steve is just crushing it and doing a great job. He gets it. We have a realtor group on Facebook, that where if you’re a realtor, and you’re a Mailbox Power user, you’re invited. We’d love to have you there. And this is where you can learn the successes of other realtors who have been using our platform for two years. It’s you know, I mean, we have some rank, you know, not just rank and file, but we have some absolute experts.

So Steve Angeline is an absolute expert Brendon Moe Brennan, absolute expert, Kelly Wheeler, absolute expert, Jim McCord, absolute expert and author. We even have his book here on you know, how to get the job done. I’ve seen that Yeah, and the crazy, I mean, these people are with us. And they’re using our platform, they understand it. And they’re trying to tell the whole world that it’s like this, like no, listen, you know, if you want you don’t let’s talk about farming your area and a realtor, right?

You know, most of the time No, please don’t laugh too hard about this. But most of the postcards you get from a realtor kind of look like this. Hi, my on the planet. Here’s all my attributes as a realtor call me. Well, why am I going to call you you’re trying to sell to me, what we teach our realtors is this, we teach you to pour value into your potential customers lives. Imagine if that same postcard showed up. But it didn’t have the picture of the realtor on it. Maybe it was on the back of the card, it was much smaller, but the value you pour into that customer’s life, his curb appeal, how it can affect the value of your home. This is what we’re going to talk about on this postcard, and it calls them out right on the front.

You know, Frank, did you know that curb appeal can add the raise the value of your home by 10%. And on the back of the card it talks about how they could use curb appeal what they could do to have a better curb appeal that all of a sudden changes the game and pouring value not taking. Don’t be a taker give Yeah, stop low going up. Stop putting your picture on everybody,

Frank Felker  32:42

Stop telling me you’re a member of the chairman’s club, I doesn’t matter for me. Right? what you’re talking about. There is something I try to encourage clients to do, which is to switch from salesman to the generous educator and sincere advocate for the success and trusted authority on the topic that you can turn to for answers to your questions without obligation. And that’s exactly the way Steve positions himself in those FSBO cards, which is nice. It’s 180-degree mirror image of the other agents that are trying to call these FSBO.

So it’s it really that’s the thing is the creative use of it is where the real power is in your system. And I just want to say one more thing about Steve. Steve hasn’t been a realtor that long. When I first became aware of yours in a totally different business, not even two years. Is that right? I didn’t realize that. Yeah, it’s crazy, isn’t it? Well, so it’s a natural Mailbox Power natural for real estate agents who can use it correctly or get themselves in the right mindset? What about some other vertical industries that you’ve seen success with?

Joe Kenemore  33:56

So realtors, insurance agents, direct sellers, it’s any business really. But those three have really crushed it. And really, the service businesses are really just cranking it up there right now. They’re showing up on the scene, the handyman, the pool cleaners, the landscapers, those types of services that involve that home, where they can use our list builder and connect directly to the homeowner, that homeowner in an area where, you know, maybe that pool cleaner knows that this air, every home has a pool in this area, and this is a rich target environment for them. And then they go out and find those people with a good credit score.

And you know, they find out the end you can even find out if somebody even has a pool or not or whether they have a pet or not. There’s so many reasons and ways that you can use it. But definitely, you know, those marketplaces are going gangbusters and truthfully, Frank, I mean, what I’m doing right now to grow this business is find new vertical markets that we can support and serve and we’re going out And finding thought leaders there and getting the information we need to create the campaigns, the automated, you know, things that need to be used in those arenas, creating them. And then you know, giving it to that marketplace.

Frank Felker  35:14

Well, here’s an unusual niche podcast. So I use, I send out a gift to people after the show, which is going to be really difficult in your case, Joe, because obviously, you probably have every gift that Mailbox Power offers in spades already, so I’m creative. But I have found that it has a big impact on people. And one of the things that I do is use the graphics, that one of the graphics that I create for their appearance, and put it on a ceramic mug, that’s a real winner. And also, you know, putting their face on the label of the brownies is always a good one. But I’ll think of something it’s going to it’ll have to probably be a gag gift is what I’m going to do. Well, I’m not too worried about it. You’re pretty creative creature. So yeah, I think you’re fine.

All right now let’s talk about speaking of creative, creative reasons to connect. You know, one of the reasons people I don’t know slow down or get back up is, well, I don’t know what to send or when to send something to somebody. So it’s some training recently, that you and Vanessa done back in March, that talked about creative times to connect, like half birthdays. And other times, would you tell us I know, birthdays and happy birthdays are very near and dear to you. You maybe tell us a little bit about that. And then other times we could reach out that would impact me.

Joe Kenemore  36:39

Okay, I’m going to start here, Frank, with the basics. If every single company would do two things, just two things with Mailbox Power, I promise your business will increase. And these are the two things number one, when you get a new customer, the very first thing you’re going to do is you’re going to send them a gift and profusely thank them for becoming a customer, you’re going to let them know how important they are to your business, and how important they will be to your future business. And really just profusely thank them with a gift, not just a greeting card, a greeting card and a gift. Now most transactions will support, you know, somewhere between seven and $10, which is pretty much what it would cost you to send a greeting card and a gift to somebody and profusely thank them for their business. That was number one.

Number two, I want you to recognize them on their birthday, and their half birthday. And this can just be a greeting card, their birthday and their half birthday. Now I know some of you are out there snickering at me right now. Half birthday, Joe. Nobody’s sober there have partitions. We were 12. What are you talking about? Well, here’s what I’m talking about. I’m talking about getting into your customers mailbox and letting them know how important they are to you. I’ve asked this question often. And I asked it every week of somebody, how many birthday cards Did you get on your birthday? And you know what the answer typically is? One, I often get a lot of zeros and twos, and maybe a three. But it’s one is the typical. Imagine if you were that one.

Your customers see the birthday card from you. from you. You were the unique one that celebrated their life. You celebrated their birthday. you celebrate the lives of your customers on their birthday, and their half birthday and let’s talk about that half birthday thing really quick because a lot of people have kind of joke that’s crazy talk. I would never want you to think about this.

Your customer doesn’t even know when their half birthday is. They have no idea. But our system knows and it’s automatic here. We send that card out that that my half birthday card gets more action than any other card I send out. No Kid it is strangest thing. I get more responses on my Haha, it’s my half birthday. Thank you so much for the card. It’s just one of those things that people are just like, unexpected. you’re reaching out in kindness, you’re not selling anything. Sure, put your logo on the back of the card, no big deal. You definitely want him to know who it came from. Just don’t over blow that up. You know what I mean? Just, you know, understate your brand is typically what I say but just to it’s two things. You should be thanking your customers profusely for their business anyway. Right?

And number two, if you recognize them their birthday and Happy birthday, you are in a winning position. Just right there, done, done deal. Now you could start thinking about some other things. What about their anniversary of the first day you did business with them? And you let them know that hey, you know, this is the anniversary of us getting together and doing business. I’m so happy to be in business with you, you know for another year. I hope this continues for the rest of our lives. How are you going to say no to and cut that person off and stop doing business with them unless they completely screw something up.

Frank Felker  39:58

They’re not. I’ve helped a number of people become first time authors and bestselling authors. And I send them cards on the anniversary of their published date or their bestseller date and that kind of thing. And I know that has a really big impact.

Joe Kenemore  40:14

It’s massive. I mean, it’s so crazy that, you know, it’s such a small thing. It’s not even the greeting card, it’s the message that’s on the greeting card. Unfortunately, in this digital world we’re in right now. You don’t get the chance to have everybody read that message in an email, but you do in the mailbox. And that’s kind of the key here, that really just letting people know, they’re important to you, letting your customers know, they’re important to you, and doing it in so many different ways that, you know, it just gets creative, you know, at that time.

You know, when there’s other times, you know, when they lose some, they lose their dog, they lose a loved one, the spouse, I mean, you know, there are many reasons to reach out many, many reasons, you know, people get married and have babies, there’s all just all kinds of stuff. And, you know, to send a greeting card for 50 cents plus postage, are you kidding me? like you’d miss that opportunity?

Frank Felker  41:05

I have a little campaign queued up for August 20, which national radio day. I’m going to put a picture of an old radio on the front and make sure it’s personalized, like you should. But I’ll get a few yucks out of that.

We’re starting to run out of time here. If somebody wants more information about Mailbox Power. In fact, I want to in sake of transparency, let people know that I am an affiliate partner of Mailbox Power, but it’s only because I believe in it so much. And I like to share it with people. But people can go directly to Mailbox Power comm if you’d like to help support Radio Free Enterprise, you can go to https://MailboxPower.com/frankfelker  Is there any place else that people should go, if they’re looking for more information about your company?

Joe Kenemore  42:02

Sure, you know, they can go to our YouTube page, there’s tons of information there, right on our website. If you pay attention, when you’re there, you can just click on you know, what can I send, and it’ll show you the pricing and all the products that you can choose all kinds of things there. But frank, I want to add one more thing. You know, we have a 14-day free trial. And in that 14-day free trial of our pro account, you get everything, all the bells and whistles, all the technology, you go build a list, you can send stuff out, you can send free postcards out even on this 14-day free trial, the only thing you don’t get is the 50, free greeting cards. And that’s okay. If you want them, you can skip the trial and get going right now.

But the truth is, we put that trial in place. So you could bounce around in our system, you could figure out what it is you may want to send before you commit to that, you know, before you commit to the account. And by the way, we do charge your card 10 bucks, that’s so you can send something out of our system. And if you don’t want it, you don’t have to sit on hold, there’s a big yellow Cancel button, you’ll be able to find it really easily. We’re one of those types of companies, you know, if you can start the account yourself, you can finish it yourself. You can cancel, right, so you can cancel at any time.

Frank Felker  43:08

And also there’s no obligation to become an affiliate? No excuse.

Joe Kenemore  43:19

No. And yeah, absolutely, you can become an affiliate for free as well. There’s no charge for you to become an affiliate. It’s a great program. You know, we just want folks to share, you know, share and share alike. You know, I mean three people, you know, that you know, encourage to use Mailbox Power in your accounts paid for that’s kind of the deal. It’s really, really simple. But we just love our platform. And most mostly what we love is we’re out celebrating people’s lives every day and we’re helping others, you know, do that we’re helping businesses understand that they have to celebrate the lives of their customers and have to let them know how important they are.

Frank Felker  43:52

We’re just about out of time, as I say, but there’s something that you share frequently. that I think would make for a great closing thought, which has to do with the quotation from Mary Kay Ash of Mary Kay cosmetics. Could you share that with us?

Joe Kenemore  44:07

Yes, Mary Kay Ash, Mary Kay Ash was the founder and CEO of Mary Kay cosmetics, think pink Cadillacs. Here’s what she said. She said everyone is walking around with a sign an invisible sign hanging around their neck that says make me feel important. And if you remember this message when working with people at all times you’ll do well. So it is a simple message. Think about your customers. They want to feel important. They want to feel important to you. That’s why customers stay with companies because they feel important.

And that message just couldn’t resonate any higher with me and with most of the people that we work with. She was brilliant. And the company she built stands as withstood the test of time. And I can tell you that every single Mary Kay rep today still on stands that message to a tee. Because they use our system as well. They know that it makes people feel important. And that is the key. That’s what we’re doing here. Frank, we’re making people feel important. Such a simple message, isn’t it?

Frank Felker  45:13

It really is. And yet, it seems like so many people have a hard time getting their arms around it. Yeah, not only simple but effective. Yes, absolutely. Yes, no doubt. Joe Khanna more. Thank you so much for being on Radio Free Enterprise today.

Joe Kenemore  45:29

I couldn’t be happier to be here. I’m so thankful you’ve given me this audience to share my message with. I really hope that that you just give it a try. Just try the 14-day trial, send a few things out. And here’s the deal. You’re ready, Frank, if you’re on if you’re listening to me, go there. Do a 14-day free trial. And what I want you to do is I want you to send a gift to your significant other. Don’t tell them it’s coming. You tell me what happened when it gets there. Okay. Get a card, and I want you to tell me what happens. But that’s the challenge I have for you today. Do that. send that to your significant other and tell me what happens. Hmm,

Frank Felker  46:04

That’s a great idea, Joe. Thanks again.

Joe Kenemore

All right. Thanks, everybody. I appreciate it.

Frank Felker 

Thanks again to Joe and thank you for joining us. Until next time, I’m Frank Felker saying I’ll see you on the radio.

Dude Walker  46:18

And now a man who maintains a shrine to Mark Cuban in the basement of his suburban home. Frank Felker, and Radio Free Enterprise

Have you ever dreamed of featuring your business on the ABC television show Shark Tank?

My guest this week is Joe Altieri. the inventor of FlexScreen, the world’s first flexible window screen, and a successful past contestant on the ABC television show Shark Tank.

I’m going to ask Joe to share the origin story of his invention, his experience as a contestant on Shark Tank, and what has happened to his company since he teamed up with The Queen of QVC, Lori Greiner.

If, like me, you are a longtime fan of the show who has often wondered what it would be like to be standing on that stage pitching the Sharks, you DO NOT want to miss this episode of Radio Free Enterprise.

Watch Joe’s Shark Tank episode: https://flexscreenretail.com/pages/shark-tank

Learn more about FlexScreen: https://flexscreen.com/

Learn more about Joe Altieri: https://joealtieri.com/

Joe’s Podcast, Lessons from the Tank: https://podcasts.apple.com/us/podcast/lessons-from-the-tank/id1570315078

What follows is a computer-generated transcription of our entire conversation. Please excuse any typos!

Frank Felker  00:22

Thank you, Dude Walker. Yes indeed, I am Frank Felker. Welcome back to Radio Free Enterprise.

My guest today is Joe Altieri. Joe is the inventor of FlexScreen. The world’s first and only flexible window screen. He is also the founder and CEO of a multimillion-dollar company of the same name, and a successful past contestant on the ABC television show Shark Tank. Joe Altieri Welcome to Radio Free Enterprise.

Joe Altieri  00:52

Thank you for having me, I look forward to our conversation.

Frank Felker  00:55

So glad you’re here Joe. And I appreciate that you’ve blocked out some extra time for me today, we really have a lot to cover. I know everybody wants to know all about your experience on Shark Tank. And when I say everybody, I mean me, I really want to know about that. And I want to dig into it. But I think the best place to start for people who may not be familiar with your product, or you or your appearance on Shark Tank, is to talk about that. What exactly is FlexScreen? What’s so innovative about it?

Joe Altieri  01:27

Well, as you mentioned, we’re the world’s first and only flexible windows screen. So, so that the sides of our screen, they flex in, so it makes it really easy to install them and remove them from your windows, they also don’t block the view like a normal screen does. So a normal an old-style aluminum screen, which most people have on their windows actually blocks up to a square foot of the view. And they’re nearly indestructible.

And we have videos online of me pounding them with hammers, that was one of the big things on Shark Tank was me pounding our screen with a hammer, which of course, regular screen would never put it, you know, it would just get completely destroyed doing that, but we run them over with cars, we throw them off of buildings and, and so really it was FlexScreen is born from all the problems that homeowners have with regular windows screens, we buy a lot of fortunate mistakes, we solved all of the problems. So that’s a that’s what FlexScreen is the quick elevator pitch there.

Frank Felker  02:30

Well, and I know anybody and that’s everybody’s ever wrestled with a Windows screen, trying to get it open or it’s crooked. Now I can’t get it to move, or it won’t lock in place. Or it’s you know, all of the problems with Windows screens, they should definitely go to FlexScreen.com and watch those videos. And it will become immediately apparent what a breakthrough idea this is. And I I really have to congratulate you on your video marketing. Because there’s a video you have that’s only 51 seconds long. And in that 51 seconds, it becomes abundantly clear what the big deal is about this product. And so I am a big fan of video marketing, and I congratulate you on doing such a great job. We’ll also come back to how that intersected with the folks at Shark Tank. So let me then ask you, when was it that you first started working on this? What year do you think it was?

Joe Altieri  03:24

It was a little over eight years ago. Now the thought of something better in the screen industry has been a goal for me, I’ve been in the window industry and then the screen industry for about 20 years. And so it’s been a one of those things that’s rattling around in my head that there has to be a better way, just because of all the problems that my customers which, again, I’m a window guy I was, you know, for most of my professional life, I’ve been in the window and door industry. And every window that gets produced has to have a screen on it, you know, homeowners expect to have a screen on their, on their on their window. But so but there’s a lot of problems with them. You know, there’s a there’s a three to 5% reject rate on window screens. Again, it’s one of those things that most homeowners don’t understand. But you know, 3% 5% of every single window that goes out has a screen that’s bad. That’s a huge financial burden for the window manufacturers and a big pain for the window dealers and the homeowners.

Frank Felker  04:23

I imagine for the installers as well. We then have to go out and replace that screen with no additional revenue associated with it. This is another area of where you are in my careers cross. I did a lot of sales work in the home improvement industry. I’ve made a lot of in-home sales presentations and sound like you did as well. Since then, I’ve done a lot of marketing for Oh, you know, the roofers and the windows and doors guys and all those people. And, and there’s I hope that we’ll have time at the end of our conversation to come back around to the Home Improvement industry and talk a little bit about what you learned there about successful marketing and sales, and how it impacted what you’ve done here with FlexScreen. Okay, so eight years ago would be 2013. At what point did you have, like a minimum viable product, something that you could either demonstrate to manufacturers, or sell to homeowners.

Joe Altieri  05:23

So it took me about two years in my garage. And again, this is, you know, me trying things that I could buy at Lowe’s and Home Depot, you know, walking through a store like that and going, can I make a screen out of that, can I make a screen out of that. And so it took me about two years to to, to come up with what I call my bubble gum and duct tape prototype in it. And when you say minimum viable, that’s exactly what it was, it was what was the absolute minimum that it could be, but it was enough to show the concept. And, and that, that was important. That was a big step, you know, to come out of the garage with something in my hands, rather than an idea. And, again, from there, at least, then I could start describing this to, you know, patent attorneys and things like that to try to see if anything like this had ever existed before.

Frank Felker  06:13

Right? You never know, you absolutely never know, until you do those searches. And of course, that involves investment with the with the attorneys, and so forth. And so, you know, that’s risk, you might spend a few thousand dollars with an intellectual property attorney, and he comes back says, Sorry, if somebody already has this. So that’s a big risk. And with that in mind, I want to ask you, what was your thought relative to your business model? In other words, let’s say you could patent this, and you could manufacture it, and you could sell it somehow? Who did you think you were going to sell it to?

Joe Altieri  06:50

So, again, because I was in the window industry, that there were a couple different avenues that I could that I could explore, you know, one of the big window companies, maybe I can just sell the patent to them. One of the windows screen suppliers, most window screens are not produced by the window manufacturers anymore. They’re produced by large window companies. And so, you know, maybe one of those guys might want to, you know, might want to buy this or license it or something like that, truthfully, when I came out of the garage, and I had something that worked, I was just surprised that I had some things. So I was open to absolutely any, any way of getting it out into the world. interest.

And yeah, and again, just some fortunate things that had happened with my journey. You know, I got an MBA, from you know, I got, I got an attorney, they gave me an NDA, so I could actually start showing it off a little bit to see him if it was more than just my excitement, could I get some excitement out in the industry as well, we did invest in and, you know, getting the patent search and at least the first patent application, that was a personal investment from my family and I. So we started showing it off into the industry and, and we had an offer from an equipment company in our industry. And they said, Look, we’d love to buy this, this idea from you this this, this patent application and this idea. And I reached out to a personal friend, who was in the, you know, he owns several companies, some of them actually control IP, and he owns some IP.

And I just laid it out in front of them and said, What should I do here? I don’t know, I don’t know how to grow this. I’m, I’m a sales guy at heart. I’ve never grown a business. And what should I do? Should I sell it? should i do? What should I do? And he took some, some very of his valuable times took an entire afternoon, sat down with me looked at the whole opportunity, and just said, Give me a couple days, let me think about this. Let me you know, let me come back to you with my suggestions. And that was on a Thursday, he came back to me on a Monday and said, If I were you, I wouldn’t sell it. This looks like it’s in a huge opportunity. And I can actually help guide you, if you’re interested. I can, I can invest myself. And I also have some other people that have invested with me in the past. And I can help you to grow this business if this is something that you want to do.

And so he was my first investor and actually introduced me to our first team of, of, of investors. So again, very fortunate that I had that in my in my life. But you know, I think there’s a lesson there as well, for some of your listeners yet if I wouldn’t have reached out and been humble if I would have thought that I knew what everything. I never would have put this in front of him and probably never would have gotten to the point where our business is today.

Frank Felker  09:47

So that’s great. Yeah, it’s good. I think it was Dirty Harry who said a man’s got to know his limitations. Absolutely. I am quite aware of how much I don’t know. Good on you. It seems like the older I get, the more I figured that out. Well, and you know, it is interesting and fortuitous, as you say that that person was in your life. But that also, to me sounds like the first strategic investor that came into this business. This was a person who had more to bring than just a checkbook. They also had this experience with IP, intellectual property. They knew other investors, they knew they knew a lot that you didn’t know about how to leverage an innovation like you had created. And so Okay, so I think this is a good point to tangent, then pivot into your experience at Shark Tank, because those people also were strategic investors. Now, my understanding is that, unlike most companies who go through a lengthy application and interview process, in order to try to get in front of the sharks, that the producers at Shark Tank actually reached out to you after having seen some of your video marketing, can you tell us that story?

Joe Altieri  11:02

Yeah, we, um, the first thing that the window and door industry loved our product, they really did. It solved a lot of problems, especially operational problems, because our product didn’t get damaged as easy. And so but we had this issue where traditional windows screens were invented in the early 1900s. So if you look up the patents on a on, you know, traditional window screens, they are metal window screen with a rubber spline looks exactly like the screens that you’re probably on your house. So nothing had changed in over 100 years. So, so turning an industry that had gotten used to something for over 100 years was a bit difficult.

So we had this this slow, yes. situation that was going on. We had a lot of people like yes, this is great. But who else is using it? Yes, this is great. But we have to educate the homeowners. But yes, this is great. But and so we had to find a way to get through that slow. Yes. And for us as a young company that didn’t have you know, $5 million to do a 15 second spot on the Superbowl. We said, Look, video marketing is the only way that we can tell our story about a flexible window screen that nobody can even fathom what a flexible window screen looks like. We had to show them. And so we just started doing funny, crazy videos.

And again, it was really basic back then, we put a black curtain up behind me with a put a table in front of me. And we were doing some iPhone videos and using basic video editors to make them and put them out on social media. And through those efforts, the Shark Tank producers found us they said this year, your product looks great. You look like you’re a lot of fun. And we’d love to have you come on. And I’m not kidding. We thought it was a joke. The first, the first phone call, we’re like, Yeah, whatever. That’s Yeah, you know, I’m sure one of my buddies is give me a hard time. Then we got the email. And I’m like, Oh, this is somebody going really far with this. And then the second call came, we were like, okay, it says Sony Pictures. I guess we should answer this one.

And but yeah, that they asked us to come on. And so we skipped an awful lot of steps that most people, most people have to go to a cattle call where they’re at a convention center, and they get a minute to pitch in front of the producers or they send in a video application or something like that online. I want to say it’s around 100,000 people a year are putting in applications. And the year that we the year that we aired. So it’s 29 are not the waste film 2019 they had five that they actually reached out to and asked to come on the show. And we happen to be one of those lucky five.

Frank Felker  13:41

So now 100,000 people a year apply. Are you saying that we’re only five the whole season or was five just on the one episode? You’re on five people that the Shark Tank producers actually reached out? Oh, I see rather than the $100 season, right? Yes.

Joe Altieri  13:58

Yeah. So So again, there’s however many four or five per episode that they get through, but most of those are, you know, they like I said they’ve gone a different way. And they have a lot more steps. I mean, we went from them contacting us. We were we were filming within a few months. You know, most of the time. This is a year process by the time you know, you go through everything.

Frank Felker  14:20

So just to nail that down, what month they contacted you what month it filmed and what month had aired.

Joe Altieri  14:28

I want to say we I think we got contacted in April. And we filmed in June and then we aired in January.

Frank Felker  14:36

So April and June of 2019 in January of 2020. Yes, okay. Yep. Great. Okay, now we’re starting to get into the meat and potatoes of this. As for me, as somebody who’s watched the show, you know, religiously for years. They will always think well if I had been that guy, I would have said this, or I you know he never should have said That a boy really ticked off Barbara on that one? Or, you know, there’s always that kind of thing going on. Had you been a fan of the show? Had you even seen it before you went on?

Joe Altieri  15:11

Yeah, I had seen it. I wasn’t a religious viewer of it, mainly because I was in the middle of growing a business. Sure. And so, you know, one of the frustrating things, as somebody who’s going through this, as a young as a young company, is you have these companies that go on Shark Tank, and they’re like, I did 12,000 in sales, and the valuation of our company is, you know, $300 million, or something ridiculous. And you’re like, oh, my goodness, like, you have no idea what you’re talking about.

So, you know, I didn’t necessarily want to feel those feelings, as I was struggling to grow my own business. But I did watch it every once in a while, you know, we would have it on a, you know, Friday night or something like that. So well, in one of the things you always as an inventor, which is weird saying that I’m that, but when you have something new, the thing that always gets said is you should go on Shark Tank, you should go on Shark Tank. I don’t want to do that.

Frank Felker  16:09

That’s funny. So did you hear that a lot?

Joe Altieri  16:12

I did. And that’s why we thought it was a joke. We thought that the call was a joke, because again, we had heard that so much.

Frank Felker  16:18

But okay, now, having watched it was and you don’t have to name names, which I imagine you probably wouldn’t want to name any names. But were there any of the sharks that you felt, let’s say more kindly towards or any that you definitely didn’t want to become a partner with? And as I say, you don’t have to name a name. But did you have any sense of that before you walked in that room?

Joe Altieri  16:42

So you know, what’s, what’s interesting is, first of all, the thing to remember is they showed 12 minutes, 14 minutes, right? I was in front of them filming for two, two hours and 37 minutes. So, you know, you really do get to know their personalities a little bit through that there’s a lot of back and forth, but it’s just, it doesn’t make good TV. So, you know, when we were going in, we were actually targeting Lori, we thought that Lori was a good partner for us, mainly because we were weak with retail. You know, we’re mainly, like I said, mainly, we sell to the window manufacturers. So the retail side is just something that I wasn’t in my wheelhouse. We had done a little bit. But we wanted somebody that was a bit of an expert and Lori is But Mark Cuban was by far the nicest person in that room.

He Yeah, he really understood our business model. He was very, very kind, you know, even as he was, you know, trying to understand he wasn’t overbearing, Mr. Wonderful, was probably the worst. And, look, he comes across that way. And I know they play a little bit of a character again, it’s a TV show, they’re playing a little bit, you know, almost, you know, bigger than they actually are. Because my understanding is, you know, because now I’m a part of this community of Shark Tank entrepreneurs, we talk to each other, we have online groups, we meet up together.

My understanding is he’s a fantastic partner. He’s one of the best sharks No kidding. Yeah, he does. He goes above and beyond for the, the companies that he partners with, he really gets into their day to day lives helps them to be better entrepreneurs, not just let me make your company better. So again, we never you don’t get that side of him from the TV show. But

Frank Felker  18:38

well in you know, nearly cultivates that hard as reputation that you know, people call him Mr. Wonderful anywhere. Is it like a badge? So but in your case, when I was watching the episode, he’s like, Well, here’s what I’m going to do. I’m going to lend you, $600,000 at 9% interest. And I was like, wow. And I was thinking, do I really want to borrow $600,000 from that guy? I don’t know. But with that in mind, there’s the next thing I want to ask you. So I mentioned to you in a previous conversation that I’ve had a number of guests on here, and we’ve talked about raising money, and their things about valuation and profits and revenues.

And you mentioned that, you know, people I did $12,000 in revenue last year, and I want $100 million for my company. Even so your call or your request 800,000 wasn’t it for 6% of the company? Is that it? You know, as Mr. Wonderful said, I missed it the first time and I ran that calculator myself. That was $13.3 million valuation on a company that had 5 million in top line revenue, and not a lot in in bottom line profit. What I’m saying is that was, that was pretty strong call there that you made. Where did you pull that number from First off, and the other thing is, was that just a start? point for you? Or was that really what you wanted to come out of that room with?

Joe Altieri  20:06

So we actually worked very hard on our valuation. Again, one of the behind the scenes, Shark Tank, things that that I’m probably not allowed to say, but whatever, they, they actually have a business consultant that is willing to work, that works for the show. And they’ll actually work with you on helping to understand the, you know, what the sharks are looking for with valuations and things. Interesting, yet really interesting fact, less than 20% of the companies that go on the show actually use them, mainly because they don’t want to hear that their baby is ugly. Right? Right. They want to, they want to go in there with evaluation, and they don’t want to be convinced otherwise.

So, you know, we went in, and again, what you see on the show is a very small snippet that is there for drama, right? It’s in there to create a good TV show, first, you know, that the rest of it is secondary. So, you know, you don’t go from, you know, your valuation stinks to, hey, three sharks wanting to make a deal with you, without them understanding where you came up with that valuation. Okay, so, so there was a lot of, you know, again, two hours and 37 minutes, probably an hour and a half of it was just helping them to understand our business model and understand why, you know, even though we had, you know, low bottom line, it really, that’s, it didn’t tell the whole story, you know, we’re growing company, were reinvesting, you know, all of those types of things.

So profits were, they’re just not important at that point in our in our trajectory, you know, and we were also we had $5 million for the year before we before, but the year that we were in, which is 2019, we were going to be over $10 million. So we doubled our top line, you know, just from year to year. And so, again, all of those things get a little bit lost in the translation of the TV show.

Frank Felker  21:57

Yeah, so well, I have to say, because, you know, I do a lot of video and editing and that kind thing, and I understand that, but they tell you, their editors do a great job of increasing the drama and attention. But they also did a good job of showing Mark Cuban one, huh? About three times. And virtually everybody on the panel, nodding their heads and on Wow. And, you know, when you did the product demonstration, etc, it seemed like, and correct me if I’m wrong, by the way, I’ve done a lot of investor presentations. And that’s part of the reason why I’m so taken with the Shark Tank thing. Did you have a positive feeling right out of the gate as soon as you started talking? Or did it warm up?

Joe Altieri  22:40

So what happens in the show? Number one, it’s the most surreal experience ever. Right? So you know, they’re all a type personalities, right? So they all want to be heard, they all are vying for, for attention from you, because that’s giving attention from the cameras and the audiences. Yeah, and again, this is one of those things that, you know, hindsight, you look back and go, Oh, I see what was happening here yet, you know, the producers tried to warn you, they’re like, Look, you need to own that stage, you have to own that those moments, you know, because they’re going to want to talk over each other and stuff like that. So, you know, they pretty much leave you alone during the pitch portion. Right?

So that’s the thing that you memorize as you’re going in. Hey, sharks. My name is Joel tear from Pittsburgh, Pennsylvania, you know, that, that, that that section of it, they leave you alone for that, then when they start getting into valuations and understanding the business, they’re talking over each other. There they are, you know, they are, and they’re arguing, they’re, they’re saying, Hey, why are you answering her question? I asked my question first. And, you know, don’t why. So there’s all of this stuff happening. So in your head, you’re answering a question, right? Your mouth is speaking, you you’re formulating the next answer to the next question that you have to answer while listening to them at the same time. all at the same time, you’re having this out of body experience going, Oh, my goodness, am I standing in front of all these sharks? Is this really happening? So having this to say I had a warm and fuzzy was probably a little bit of a stretch, but I could tell that they were impressed by the demonstration right off the bat, like it was, you know, there was a lot of great questions. There was a lot of, you know, wow, I have this problem in your own house. Again, you don’t think about the sharks taking their screens out, but there’s they’re real people, you know, they do deal with these things. And so

Frank Felker  24:33

If I could interrupt you, because you mentioned as soon as you walked out and started saying, Hey, I’m Joe, etc. So I actually broke this down because as I say, I’ve done a lot of these presentations, I help coach people on it, make an investor presentations. That situation is unique because I can’t remember an investor presentation where people are shouting at me and shouting at each other and I got cameras on me, you know, generally it’s more of a one to one or one to, you know, up to date group of it. investors. But here’s what I want to ask you, if what I’m about to say is the way it was live, or if it was edited down to this, because your introduction, your elevator pitch was so sharp, I couldn’t believe it.

You came out and you said, Excuse me, he said, your name and hometown. He said the name of the product. He said, What problem it solves. He said, We’re the world’s first and only flexible windows screen. He pulled it out of the window, you beat on it with a hammer. You put it back in the window. And while you had your back turned to them, you said FlexScreen is an industry disrupter. And then you turn around and he asked for the investment. So who wants to get on board? And it was one minute and three seconds. And I was like, that was awesome. So was that the real deal? Or was it edited down?

Joe Altieri  25:49

That’s the real deal. So when it looks like Yeah, when it looks like you’re going to be on the show, that they assign a producing team to you. So I had two guys that were with me for this entire journey. And they and again, these are some behind the scenes things. But every Friday, I had a call with them. And they pretty much said, Look, if we show up on the call, that means you’ve made it another week. That’s a three o’clock every Friday at 259. I’m like please be on the call, please be on the call. But But every Friday they would ask you questions and things like that. And you’d have an assignment for the next week.

So my first assignment they said, right, you’re right, your pitch, tell us why we should, why one of the sharks should do this, watch some episodes and all that stuff. And you’re going to do it in front of us as if you’re doing it live next Friday. Great. Okay, perfect. So I do it, I write it all up. You know, it’s like three pages long. And they’re like, okay, that’s great. That was six and a half minutes, get it down, cut it and cut it in half for next week, get it down to three minutes. I’m like, Okay, great. Get it down to three minutes. So the next week, I get it down to three minutes, what I thought was three minutes. They’re like, Okay, that was five minutes, like, I need to understand by next week, you have to have it down to two minutes. And so the next week, you know, I’m down to two minutes.

By the time I was all done, that you have to get it down to a minute, but by the time you’re done, my pitch on paper was this was this much, it was a paragraph and a half. That was it. And so trying to try to do that was it was a crazy exercise for me and for my team to do that. Because you’re summing up a business, you’re summing up a product, and trying to say that this is the best thing in the world, with very few words. And it is tough to do. And it’s something that the entrepreneurs struggle with. And, and to your point, I’ve been a part of some of these investor pitches, just as a shark tank person, they asked me to be part of those. And that’s a big challenge as people want to get into a very long explanation. You’re like, Look, you have to impress us very quickly, whether they’re interested or not. And so that’s a skill. And it’s something that that is hard to do.

Frank Felker  28:00

It really is it is a skill, and it can be developed. I was fortunate to have the opportunity to write 32nd radio spots many years ago, and to try to get in not even have the video aspect to the visual. Anyway, that’s where I learned how to do it. But it’s hard for people and all of us as humans, we want to tell the whole story. If I don’t tell them everything they’re not going to completely understand. They don’t realize right now, you don’t need them to complete the understand. You just need them to get interested. But I just need their attention. You did. I’m not kidding. I was shocked. And when I timed it, I couldn’t believe it. You know, minute in three seconds. It was unreal.

Joe Altieri  28:39

Okay, I didn’t do too bad. I was really close to my minutes.

Frank Felker  28:43

Well, you were having the out of body experience. You know, you go What if when you were putting the screen into the window, it would pull you know, you’d let’s let go of it or something. The Lord only knows what might have happened.

Joe Altieri  28:54

I am telling you I had that I had that fear. I told this story. I did a little speaking thing. And I told the story. One of the one of the episodes that I watched was this company who had a door lock that comes up from the bottom right. And their demonstration was we have our door, and we have this door with a regular lock, and they’re supposed to be able to kick in the regular one without any problems. Well, they had a problem with the display, and they couldn’t kick in the regular one and these guys pounded on this door kicking it dropped kicking it they brought out a sledgehammer and there’s pandemonium gets it that’s the sharks are laughing and like, Oh, please don’t let that happened to me. Please don’t let me so but yeah, that was that was one of those fears. I’m like, okay, go really easy putting this in make it look smooth.

Frank Felker  29:40

Yeah, but well, anyway, good on. He did a great job with that. Thank you. Okay, so now you’re in the room and you’re in there for two and a half hours. What was that? Were you standing up the whole time? Did you get to sit down? Was there any snack break bathroom break?

Joe Altieri  29:59

No. One of the Things that they say is there’s no timeouts, there’s no take backs, there’s no, there’s no breaks. Now, mine was a little bit rare. So typically they’re 25 to 40 minutes is what they prepared us for 25 minutes if if you have a good pitch, and they want to make a deal 4040 to 45 minutes if you have a good pitch, and they’re going through the deal portion of it. So I, we just had a more, we had a bigger company than normal Shark Tank companies, and they really wanted to understand the financials. Because as we were growing to your earlier point, you know, we didn’t, we weren’t showing much profit, and they wanted to understand why what were well, how are we reinvesting what was going on here, that that we showed a bottom line of only, you know, a couple $1,000 profit every year.

So, and the sharks do really want to understand that they have, they have their notebooks out, they’re making tons of notes, they’re there, they have calculators out, they are doing the things that are normal, you know, a normal counselor, you know, a normal investment group might do if they were looking at investing. So. So a lot of that’s all very real. I mean, there’s none of the sharks that get into deals just to do something for TV or something like that, that they legitimately want to make finish these deals and make good deals with good entrepreneurs. So Well, there’s just the one wasn’t sexy in our in our two and a half hours, if that makes sense. Hit the episodes great. As

Frank Felker  31:25

I say, I’ve watched many of them. I had never seen your episode before. I was surprised at the level of interest all of the sharps. I can’t remember who first said they were out. But it almost seemed like immediately they were wish they hadn’t said it. Because it right away. Lori and Mr. Wonderful. And Barbara, were like, Lori came in last, I guess. But anyway, I was clear, they were interested. They had those buying signals. They’re leaning forward. They’re asking questions that you know, anyway, I thought that was interesting. Here’s something that I always wondered about. And I want to ask you, okay, they’re making you an offer? Well, there’s hundreds of 1000s of dollars minimum at stake.

But when you’re talking about a $13.3 million valuation, and really, they didn’t whittle you down very much. You know, I don’t know what the final number was, but they took your pitch very seriously in terms of the numbers. But what I’m saying is, you’re standing there by yourself having an out of body experience, the lights are on the cameras are on, you’ve been there all this time. And now you got to make a decision. Right, then, did you have to make a decision? Right, then, you know, could you phone a friend? How did that work?

Joe Altieri  32:41

So it so I did make a decision right then and it does take a lot of take a lot of practice. And I don’t know how else to say that other than, you know, I have great partners, who, you know, they, they asked me a lot of questions, they prepped me ahead of time. And then we also prep the deal making what if, what if, what if, what if, and we were in through scenarios and scenarios? What about this? What would be a good counter for this? And so I had some of those things, just as we had already thought about ahead of time. No, don’t get me wrong with all the lights and stuff. It’s easy to forget what. But you do have to make a decision right there. Right, then there’s no timeout, let me go Think about it. Let me go talk to somebody else. If they’re not in the room with you, you can’t talk about it. So and, you know, it is you know, and the other thing about it too, which I didn’t realize until we got into this, you know, Shark Tank is a game too. It’s not just reality TV, it’s not just a business thing. It’s a game and there’s rules to the game. And one of the rules of the game is you can’t they cannot offer you less than the amount of cash that you’re asking for. So we were going in asking for $800,000 I couldn’t walk out of there with less than that I couldn’t walk out of there with 700. I came out of there with one 100,000 they could offer more, but they can’t offer less. So again, that’s one of those things you have to be careful of when you’re going in and with your ask, because $800,000 is an awful lot of money. So, you know, it’s actually a lot easier for the smaller companies to go in and ask for 25 $50,000 because the sharks are almost like, okay, which pocket? Do you want to take that out of? Sure. Yeah. You know, when you’re up into the close to a million dollars, you’re, you know, we’re one of the bigger deals on Shark Tank that you know, typically they don’t come close to a million dollars.

Frank Felker  34:34

So, where were your partners? They’re at the studio with you or were they How did you like how did they debrief you about what had happened and what deal you had struck?

Joe Altieri  34:45

So, no, as a matter of fact, if you’re not going on to the show, you’re not on the set. So even though my wife was in LA with me, she was back at the hotel, so she couldn’t come and go And as a matter of fact, the cell service was so bad in my trailer, that when I got back, I couldn’t call, like, I have all this excitement. And I’m like, I need to tell someone like, you know, and you also have an NDA, because they don’t want you talking about it until, you know, a week or two before you air. So from June until January, I couldn’t tell anybody you know, it’s like, my immediate, immediate, immediate family who was sworn to secrecy and my business partners. That was the only people that knew. So, whoops. So yeah. So I’m like, trying to send texts out I’m outside of trailer like trying to hold my cell phone up to try to deal and but yeah, we’ve finally got through and got to celebrate with her. But yeah, my partner says the same thing. You know, I’m trying to send a group text and I’m like, we got to deal with Lori.

Frank Felker  35:48

I have to wonder, you know, if they had some kind of cell blocker in that trailer to keep you from communicating, but Okay, so what do you remember what day of the week that was that you were filming?

Joe Altieri  36:00

I do, because, you know, they came out. So they flew over. But this is all pre-Corona. So we were the season before Corona hit, right. So. So they flew everybody out that was filming for that entire week. So they film for six days a week for two weeks in the summer, and then two weeks in the fall. And that takes care of the entire season. So we were the first week in the summer. And they bring everybody out on Sunday because they have a big meeting on Monday. And I was supposed to film on Thursday of that week. And they called me on Monday night, and told me that I was filming the next morning. So I Oh my god. Yeah, it was it was a scary it was a scary phone call, too.

Because what happens is on Monday, they line everybody up, and they’re like, okay, you’re doing your pitch that little one minute, right? You’re doing that in front of everybody that is part of the show. And they’re doing it. You know, they want to make sure that they understand the lighting cues. And this isn’t the sharks, this is the producers, directors, lighting, people, all of that. So there’s about 50 people that watch you do this. And they make it really clear that some of you are not going to go in front of the sharks this week, because you’re just not going to do a good enough job in front of us. And we’re going to send you home early. And so yeah, that’s that was scary. So then I get this

Frank Felker  37:16

No pressure. No pressure.

Joe Altieri  37:20

No pressure. Yeah, exactly. But I think they want you to feel a little bit of that. Do you know what I mean? So that you do understand what that’s going to feel like going in there. And they don’t you know, if you’re going to pass out or you’re going to not do very well in front of them, there’s no possible way that you’re going to do well in front of sharks in front of the pressure of having the cameras around you.

Frank Felker  37:40

So what I was driving it, it’s so you Tuesday morning is when your time morning. modifier was? Okay, so who you wake up Wednesday morning, any buyer’s remorse as far as the deal that you took?

Joe Altieri  37:55

Absolutely, actually, none. You know, we, the deal that we took was actually something that we saw Barbara do in previous episodes where she says, hey, look, you keep your wholesale side of the business, which is what we you know, we sell to the window manufacturers, we’re going to start a brand-new retail company over here that we’re going to partner with together. So for us, we weren’t doing much in retail, we only did about a million dollars of retail and in 2019. So which was a very small portion of our business.

It was so low risk, like it was like, hey, look, we’re not touching our core business. We’re just starting something new that we’re not good at anyway. And we’re going to have a partner in it. And Barbara when Barbara proposed that, and then Lori jumped on it. So it was like the perfect deal for us. And then the shark that we wanted, jumped on to that same deal. It was like, it was like God came down and like said, here’s the answer to all your prayers.

Frank Felker  38:54

Oh, that’s great.

Joe Altieri  38:56

Yeah, it really was, it was it was quite fantastic for us.

Frank Felker  38:59

So this may seem like a tangent. But recently, Tesla has gotten into a lot of trouble with their solar roof installations, because they didn’t realize how difficult it is to install a roof. Although anybody had been in the roofing business for any period of time, could have told him that and especially when you’re not going in with you know, flexible shingles made out of asphalt, and instead have these rigid shingles that are made out of glass, good luck. So they learned that the hard way and they actually had taken deposits from people who were going to pay $25,000 for a roof and then they call them back and said, sorry, that’s going to be $45,000 After all, and they did give them opportunity to walk away from the contract.

The reason I bring this up is somebody who hasn’t sold windows and doors for 100 years doesn’t understand that every hole in the wall is a different size. And if it’s even off by a quarter of an inch or a half an inch, then you know the winds going to blow through and the water is going to come in and so it came down to a lot of discussion among the sharks, they were shocked that every window almost every window is custom made, I bring this long explanation up to ask you has that been an ongoing rub with your relationship with Lori, about the idea versus mass production of templated screens versus custom made screens.

Joe Altieri  40:23

So, by the time by the time I was done in front of them, they understood as much as they could, you know, within two hours of me talking that yeah, this was just a standard size screen is going to be impossible. Now, we’ve had conversations with Lori and her team, you know, since then, and, you know, we’ve reiterated some of those, you know, some of those facts to them, we, you know, we’ve launched on Home Depot comm recently, and of course, her and her team were part of that. And, and we are doing some standard sizes that that Home Depot carries, we have for windows that they carry in stock, we’re doing some standard sized screens that fit those windows, and that’s coming up here this summer.

But, but yeah, coming to the like, one size fits all, it just yeah, it took a little while to help them understand that. But now that they do that, they don’t push me, one of the things about the sharks is, they really don’t, they don’t have a lot of interest in going in there and running your business for you, they’re there as a resource, but they’re not going to try to force you, you know, if you’re a round peg, you’re not going to try to force you into a square hole. And, and that’s, um, that was a that was really refreshing, you know, to have them as a help, instead of, you know, somebody driving us in a certain direction. There’s no tension there, which, which I was I was concerned about, just to be honest with you.

Frank Felker  41:49

And I would have been as well. And I’m glad that you just address that. So the type of investing that the sharks do is broadly known as strategic investing, where it’s not just their checkbook, but they also bring their Rolodex and their relationships and their experience and their connections and so forth. prior to going on Shark Tank, had you an outside of your existing business partners, had you been seeking capital from traditional, let’s say, angel investors or venture capitalists.

Joe Altieri  42:18

We weren’t all of our outside of Lori, all of our investments have been within a group of people that have all invested in in the past, we did a round of funding we for Shark Tank, and so even going into the show, we didn’t necessarily need the funding. And we were looking for that strategic partnership, the funding, you know, the money is just a bonus, you know, mainly because you have to do that on Shark Tank. I don’t know how I say it, you know, you can’t go in there be like, Hey, I’ll give you know, 20% for nothing who’s interested. But, you know, that was that was that that was the big advantage for us. Now, some of the Shark Tank companies, you know, they go on and they do you need the investment? And they do you know that that money is important as important as the strategic side of it.

But, but yeah, I mean, we’re, we weren’t really looking for that. Now, one of the things that does come from being on Shark Tank is, is you do have a lot of VCs that come and want to throw money at you, you know, they see you on the show, they and so we were inundated with companies that wanted to invest, you know, for the first year, we still get them about once a month now somebody will reach out.

But, but again, for us we’re not looking for we’re not necessarily looking for money, you know, we’re a big enough company, we can go get a loan, you know, our banks are great, you know, we have a good, you know, our, you know, our business is solid. So, you know, unless somebody is strategic, it doesn’t make much sense for us to bring somebody else into our, our team.

Frank Felker  43:55

Yeah, that makes sense. Okay, I think I’ve just about squeezed every drop out of your experience there on the set. Anything I missed?

Joe Altieri  44:06

No. I mean, it was it was the best scariest experience I’ve ever had my entire life. Yeah, it’s one of those experiences that I say it’s probably like, I haven’t jumped out of an airplane yet. But I assume it’s a lot like that the first time is terrifying. And then the second third, fourth time, it just, you know, I’d have no problem doing it again. Yeah, and doing it for that first time was terrifying. So well, nothing’s going to scare me. I guarantee that.

Frank Felker  44:36

That level of stress brings a lot of energy to the screen. It dealt with that in mind. Let’s talk about your podcast, where you’re going to be interviewing other people who weren’t necessarily successful on Shark Tank but did appear on the show. What’s the name of your podcast and what’s it all about?

Joe Altieri  44:55

It’s called Lessons from the Tank. And it’s just a give back. You know, we One of the universal things for all of the Shark Tank entrepreneurs is we have people reaching out to us, you know, how can how do I take an idea to the market? How do I how do I take my idea for an invention? Or how do I take my prototype and get to the next level? Those types of questions happen to every single one of us, and it happens all the time.

And so, this is just a give back for us where we can answer some of the questions, you know, and, and help people to understand some of the lessons that we’ve learned, you know, people think that, you know, you get on Shark Tank, and you’ve made it, really what happens is, you just burn faster and brighter. So the lessons become, that they do they become, they become bigger, and, and, and, and faster than you would normally have had to learn those, you know, without Shark Tank.

So, so we’ve learned a lot and I had my first my first guest was Tiffany Krumins, who was season number one, episode number one winner, number one, she was the very first guest on the podcast, and the lessons she’s learned through the past 12 years. And the things that she’s gone through have been, I mean, she really paved the way for the rest of us, I mean, that she was on the pilot, you know, nobody knew who knew who Mr. Wonderful was, or Barbara Corcoran, you know, they were they were kind of unknowns. And so, you know, she, she actually has an organization that helps women entrepreneurs, you know, be successful, you know, Tiffany does.

And, again, every single one of the Shark Tank entrepreneurs wants to give back that we really do have a heart for small business. And so this is just one of the ways that we can give back. And it’s called lessons from the tank, you can check it out on lessons from the tank, podcast, calm or just search for lessons from a tank on Apple, or Google or Spotify. That’s great.

Frank Felker  46:54

And I will put a link to the podcast in the show notes for this episode. We’re just about out of time. But I with the idea of helping business owners in mind, I want to come back to the Home Improvement industry or remodeling comes by a lot of names. And I don’t know, do you know that your friend, Tony Hoty, was a past guest here on Radio Free Enterprise,

Joe Altieri  47:16

I heard that I did hear that. And Tony’s a great guy.

Frank Felker  47:20

He’s an amazing guy. He truly is. And I know that you recently presented at his annual conference lead con. And here’s what I want to drive at and ask you to share your thoughts on within the home improvement industry, a lot of industries, there are business owners who get it when it comes to marketing and sales. And there are those who don’t. And the difference between their success is night and day. And, and so I know.

And that’s why I’d asked Tony to come on because he’s all about excellence and superiority in customer experience, customer, development, customer, everything, marketing and sales, making sure people are happy with what you do, and giving you repeat referral business and dread generating leads etc.

What if you could share one thought or maybe a couple with any business owner about why they need to focus on marketing, or a great suggestion on how they can improve their marketing and sales? What do you think that would be?

Joe Altieri  48:21

Well, I think the first thing is for people to understand the difference between marketing and sales, I think sometimes, especially if you’re not in the marketing industry, you think that they’re the same thing. And they’re 100% or not, you know, marketing is branding, it’s, it’s it, you know, marketing is a thing that’s impossible to really understand your ROI, you know, you know, for us to go and say, Hey, what’s our ROI on these marketing videos that we’re putting out, I can never tell you if I sold one more screen because of these videos that I put out. But what I know is that it made my company more visible to the to the outside world.

You know, so that’s the that’s the first thing is, you know, you know, I hear a lot of people they talk about, oh, we do great marketing. Our guys are out there selling all the time, we’re like, Well, hold on a second guy knocking on the door is not marketing. And so that’s the one thing is it, you know, try to understand that the difference there. But from the from the other side, I think say I’m a sales guy, I love presenting I love being in front of the customers. I truly like my customers. That’s one thing that a lot of, especially when you get small businesses that might start struggling a little bit they start not liking their customers. I’ve heard so many times where people are like, my customers are so stupid like well, maybe, maybe you should figure out what their what their problem is. Because without them you don’t survive.

You know, we are within our company now I have close to 160 employees now, you know across all of our factories and stuff, and I still say that We are a sales and marketing company first. And we happen to sell something that is pretty cool that that would that we make, you know our customers come first we make sure that every single one of our associates that are making our product up through the customer service people that talk to the customers understand that the only reason that we exist is to make our customers happy.

And so again, that’s a paradigm shift for a lot of companies that that they think that manufacturing, we’re here to manufacture something, nope, you’re here to keep your customers happy. Because as soon as they’re not they stop buying. And when they stop buying, you start stop manufacturing. And so again, I think it’s more of the mindset of companies that are out there is the biggest that will be my biggest advice is to try to shift that to sales first.

You know, even when my when my initial investors, one of the things that they came back with was, you know, if you were not a salesman, if we didn’t, we do not think that you would have made a very good CEO of a startup company. You know, that was, that was interesting to me, because, you know, I was just being me. But that was something that they were looking for. And when they put their trust in because we have millions of dollars invested at this point, that was something that was really important to them is that that I was a sales guy that could go out there and tell my company story to our customers, and that I was going to be a customer advocate first.

Again, we protect our you know, our customers are, they’re fantastic. You know, I mean, and we’re it’s not like we do think do stupid things because of our customers. But we’re customer advocates. First, we make sure that our customers are happy because they’re why we exist.

Frank Felker  51:52

There’s no arguing with that. And it’s funny, you said three or four things right there, Joe, that we could go down rabbit holes on each one of them that has to do with sales, and the difference between sales and marketing. And did you sell another screen because of your videos? Well, you sure as heck sold somebody at Sony Pictures on something like those videos. And so they’re all necessary for the growth of the business and I don’t know maybe you’ll be kind enough to come back and talk to me again on here. So we can go back into some of those rabbit holes. I would absolutely love to Joe Altieri. Thank you so much for joining me today on Radio Free Enterprise.

Joe Altieri 

My pleasure. Thank you for having me.

Frank Felker 

Thanks again to Joe. And thank you for joining us. Until next time, I’m Frank Felker saying I’ll see you on the radio.

Dude Walker  52:41

And now a man who maintains a shrine to Mark Cuban in the basement of his suburban home, Frank Felker and Radio Free Enterprise

“LinkedIn Ads are unapologetically expensive. Terrible click-through rates and very high cost per click. Most people lose money on it.”

That’s what this week’s guest, LinkedIn Advertising Expert AJ Wilcox, was recently quoted as saying.

But if that’s the case, how was LinkedIn able to generate over $3 billion in advertising revenue in 2020?

By delivering spectacular results for companies with high-value offerings and highly efficient sales funnels targeted at very specific industries, companies and job titles.

Please join us in this episode as AJ and I talk about Landing Dream Clients from LinkedIn Advertising.

Learn more about AJ Wilcox and his company B2Linked: https://B2Linked.com

What follows is a computerized transcription of our entire conversation. Please excuse any typos!

Frank Felker  00:22

Thank you, Dude Walker. Yes, indeed. I am Frank Felker. Welcome back to Radio Free Enterprise.

My guest today is AJ Wilcox. AJ is a certified LinkedIn Ads Partner. He’s the host of the LinkedIn Ad Show podcast, and the founder and CEO of B2Linked. AJ Wilcox, welcome to Radio Free Enterprise.

AJ Wilcox 

Thanks so much excited to be here. Frank.

Frank Felker 

I’m excited to you’re here as well, AJ, I’ve watched a bunch of your YouTube videos over the years, and you’re just somebody who really knows what they’re talking about. You’re a true subject matter expert in this area of LinkedIn ads. And I think it’s something very important for business owners to know more about.

So I’m going to start by throwing you under the bus right out of the gate – just to mix metaphors there – and read a quotation I found from you, at least attributed to you, you can tell me whether this was you or not. But you know, here it is. Here it is.

According to AJ Wilcox, “LinkedIn ads are unapologetically expensive. They have terrible click through rates and very high cost per click. Most people lose money on it.” Ha, this sounds great. Tell me more. What were you? What was that all about? It’s pretty clear what you’re saying. But then why should we still consider these things?

AJ Wilcox  01:44

Yes. So really, where LinkedIn ads shines is with companies that have higher deal sizes or higher lifetime values. And so that quote came from when I was talking to, I would say, smaller companies, people who are good at Google and Facebook ads that do really, really well with low lifetime value products.

Frank Felker  02:10

Okay, yeah. So those companies are more low margin high volume, and you’re talking more about high margin, low volume, or even high margin high volume?

AJ Wilcox  02:22

Yeah, exactly. Yeah, so they cost more for sure to get in. But because we’re able to target just exactly the right people. It’s perfect for those big deal sizes. I think of it like LinkedIn ads is a sniper rifle, whereas Facebook and Google might be a shotgun. Okay, fewer shots, but they’re more important.

Frank Felker  02:43

Can you give me a couple of examples like I can think of from my own career and business, coaching and consulting clients that I might be targeting? So are we saying, minimum five figures per transaction? Or is there any sort of rules of thumb you can share?

AJ Wilcox  03:02

I mean, this totally depends on how efficient someone sales cycle is. But what we’ve found is, if when you close a deal, if they’re going to be worth $15,000, or more to you, in North America, obviously, that limit goes way down significantly anywhere else in the world. But, yeah, $15,000, or more than LinkedIn ads are going to be a total home run. If it’s less than that, like, you got to test and make sure I mean, it’s significantly less than that. If you’ve got a product that sells for $100 a month or something. And you’re paying LinkedIn, eight to $12 per click for the traffic up front, it’s probably not going to work out.

Frank Felker  03:38

Okay. I think that’s great, because it gives us something we can hold on to: $15,000 marginal revenue from the new client that we’re bringing in through LinkedIn ads. And I’m just as I say, I’m trying to give a frame of reference for the viewer. So that could be doesn’t have to be an individual consultant like me, it could be a big consulting company, like one of the, you know, like Accenture or somebody like that. Is that sound writer? Can you give us some examples of different types of companies? Maybe even that you’ve worked with that have had success?

AJ Wilcox  04:14

Yeah. I mean, we worked a lot with HR, because HR people are on LinkedIn all the time. So things like we had a client who was targeting people who are, like senior HR executives at large companies, because they were selling them a SAS software. And oh, that worked extremely well, because obviously, you know,

Frank Felker  04:39

okay, and then, you know, another I’m here in the Washington DC area. I wonder about business to government, B to G. You know, that could be a huge client. Have you had any, any customers that do that? Absolutely.

AJ Wilcox  04:55

Yeah, big works great. LinkedIn ads give us an industry that we can choose. Just government, we can even target by the specific government agency you care about. So if it’s the

Frank Felker  05:06

the SEC or the IRS, like you can target just employees of those organs. Wow. Now you and I had talked previously a little bit about the difference between content marketing on LinkedIn versus paid advertising. But I may be speaking sacrilege here to the expert. But it occurs to me that maybe I could use this type of advertising, even for my brand building.

Let’s say for example, I were targeting buyers in the IRS something, whoever I’m targeting, and I really just want to let them know about me and my company and the services we offer so that they’ve heard of me, maybe then when one of my bids comes in and reply to a request to proposal, is that something in terms of branding that you think would make sense, even though even knowing how expensive This is?

AJ Wilcox  05:58

Yeah, totally. I mean, if you’re getting your message in front of your ideal buyer, that’s always valuable. The problem is, if you’re just dipping your toe in the water, with LinkedIn ads, and you want to do a test, if you’re just doing brand building, you’re not seeing deeper signals that what you’re doing is working. So what we like to do is go right after that cold audience with something of value. So, you know, come watch this free masterclass or download this free guide or checklist or eBook, something like that, where we’re getting them to identify themselves and the fact that they are filling out a form in order to get this tells us that what we’re offering is a value, and people were willing to actually put their information in it in exchange for it. So that combination, yeah, you get that combination of like, our, and they’re engaging with your content. So it’s kind of a double whammy, but you can certainly do it that way.

Frank Felker  06:52

Great. I had not thought of that. And that makes perfect sense. Now, you talked about targeting, and you just gave a great example of what agency somebody that what types how you talk about a sniper rifle? What types of variables can we target by in LinkedIn with our messages? Oh, it’s

AJ Wilcox  07:12

so much fun. This is where LinkedIn shines. We get job title, we get the department someone works at, or works in, we get their level of seniority, their skills, or even groups by name that they’re members of, we can company size, company, industry, even company name, like we talked about. And then and then retargeting, I mean, I, and I’ve probably only covered about a third or a fourth of all the options that are available. There’s just a ton.

Frank Felker  07:42

Well, let me It occurs to me, as you say that, can we be too specific? Or could we be ultra-specific on purpose? In other words, you know, I want to make sure that my boss from three jobs ago, sees this ad every day, and I really don’t care. Who else does? Is that getting to? You know, and that’s crazy and not a good objective? And like you said, like, how am I going to track whether it’s working or not. But I just use that as an example of being ultra-targeted. Can’t let’s say we wanted to get in front of you know, the Vice President of Engineering it, you know, Lockheed or something, could we get that specific. So the more the most

AJ Wilcox  08:21

specific LinkedIn will let you get is down to an audience size of 300. So yeah, for instance, we target the fortune 500. Anyone in marketing, who has a paid social ads kind of skill, and so you get really small. And the cool part about that is it doesn’t take much budget to stay in front of these people. And you can just kind of keep a slow drip going and stay top of mind with them. So that’s one way we do it, you can’t get more specific than 300. But there’s also advantages to that with that slow drip.

Frank Felker  08:58

And is this thinking of the branding again, and staying top of mind? Or what would be the advantages of that slow drip strategy?

AJ Wilcox  09:07

I think I mean, if you can be sure that anyone who sees this because certainly anyone in the fortune 500 is probably spending a lot on LinkedIn ads, or they could be and so that kind of that kind of exposure to someone who could be one of our next biggest clients is certainly valuable. And because we’re not paying a lot for it, because the audience is small. It’s just little drip over time. What we do get is not spending a whole lot and investment in the future in potentially, you know, giant accounts.

Frank Felker  09:40

Right. Okay. Now, there are different types of campaigns that we can run on LinkedIn. Can you speak to them and which one or two or three are your favorites and which one do you think people might have the most success with?

AJ Wilcox  09:55

Yeah, sure. So the big two options that you get with each campaign You get to choose which ad format you’re using. And there’s a whole bunch, there’s some that come in the newsfeed, there’s some that are just over in the right rail. When you’re on desktop, there’s some that come to you like an email or a message in your LinkedIn messaging box.

AJ Wilcox  10:16

What I recommend for these is there are two that tend to work over and over. The first one is single image sponsored content. So this is in the newsfeed, something that just has a line of text, a big image, and then another line of text ads. And we love these because they’re only on the right rail on desktop. So like, most people are using mobile for sure. So they don’t get seen a whole ton. But they are Lincoln’s cheapest ad format. So where we might pay eight to $12 per click for the sponsored content, you know, something in the newsfeed, we can pay down to like $2 per click for those right rail ads. And those are our favorite to start with.

Frank Felker  11:04

And are all these campaigns Pay Per Click? Are there any cost per 1000 impressions, or is all LinkedIn cost per click?

AJ Wilcox  11:12

Yeah, most you can pay by either cost per click or cost per impression, or per 1000 impressions. On the message ads, you can only pay per person that you send it to. And on video, you can also pay on a cost per view basis. But most of the time you get that option. Interesting because I’ve been thinking about using video ads myself, to drive traffic to my a to Radio Free Enterprise to the exact thing we’re doing right now.

Frank Felker  11:38

So this is I love being do being able to do these interviews with experts like yourself, because I get to ask the questions that I want the answers to. So it’s a great benefit for me. Now, you mentioned $2 per click $12 per click these are you know pretty high numbers, when you look at them relative to something like Facebook.

This is a two-part question. And maybe you’ll just address the first part. And I’ll ask you the second part again. But the first part is, what sort of range of cost per click, might I pay? And then the following on is you talked about efficiency of my funnel after the click? And can you talk to what sort of variables or percentages I would be looking at there. So again, the first thing is how, what’s the range of cost per click that you’ve seen?

AJ Wilcox  12:28

Yeah, so the minimum, it depends on each audience. But if you’re building sponsored content, you can say, hey, LinkedIn, I only want to pay $6 per click, or $5 per click. And if you’ve suggested to low, they’ll come back and say, Well, actually, the minimum bid for this audience is, you know, 575, or 612, or whatever that is. So on a small budget, you really can bid the minimum. And most likely, as long as your ads are good and getting clicked on, you could spend your whole budget at just the minimum. And that’s the most efficient way to be. If you’re not performing very well, or you’ve got a bigger budget, you probably are going to have to bid a little bit more aggressively to get LinkedIn to, to show as much as getting clicked on.

The second part of that question with the sales team efficiency. So we know just according to benchmarks, about half a percent of people will click on your ad. And then you know, if you have a good piece of content a good offer, it’s probably going to be 10 to 12% of those will, will convert they’ll sign up for your whatever, then it’s really up to the sales team to reach out and nurture that person. So how do you do it? How many of those people go on to become demos? How many of those people go on to be like, like sales qualified leads? How many of those go on to close? So yeah, that’s very much up to the sales team to kind of pick up the ball and run with it.

Frank Felker  13:56

And so I would imagine that as far as the arithmetic goes, it comes back to what’s the, you know, marginal revenue for every new client. And then, you know, how many people who do a demo turn into a client and how many people who register do a demo and you work back up the funnel kind of thing? And I guess I was looking for sort of thumbnail numbers, but are they like all over the place?

AJ Wilcox  14:24

Yeah, what we find is, you’re generally going to spend as long as you’re about average in the sales process, and, and then your cost per click, you’re probably going to end up somewhere between about one to $4,000 in ad spend per closed deal. So that’s why we like that. Oh, that’s

Frank Felker  14:40

a great figure. Thank you for that.

AJ Wilcox  14:43

Okay, cool. That’s why we love the 15k number, because it’s like, well, if you’re if you’re going to make 15k over time, but you’re only going to pay one to four. In order to acquire the client. That’s plenty of room to pay a sales commission, plenty of room to pay an agency like ours to keep managing it and grow It’s perfect.

Frank Felker  15:03

Yeah. And, and it’s funny because particularly with smaller business owners, I’ve found that people don’t even seem to be able to get their arms around the idea of cost per acquisition, that you have to pay to get new clients in the door. And but once you’ve come to that realization, it really is just arithmetic. How much is the next client worth? or How much could you pay? And it depends, as you say, on all the variables. Now, there’s something here I came across, I just want to make sure I said it correctly. It’s called a linked in lead gen ad form. What is that all about? Is that something I should pay attention to?

AJ Wilcox  15:44

Oh, this is so good. What happened is, originally when LinkedIn was running, and Facebook ran into the same problem, it was like these advertisers would come on and start running ads, and they would send the traffic to their landing page or their website. And then when they didn’t see conversions come out of that, they came back to the platform and said, Hey, LinkedIn, hey, Facebook, your traffic must not be very good, because we’re not getting business from it. And the platforms were like, ah, we can’t control what your landing page experience looks like.

So they came out with what Facebook calls, lead ads, LinkedIn calls link, lead gen form ads. And what it is, is when someone interacts with the ad, a little drawer will slide down within the ad itself and have all the form fields embedded there. So what it allows you to do is basically skip the landing page experience. And this is I mean, because you’re not sending to another website, that’s going to take a few seconds to load, and someone has to look at it and see if they trust it. Navigate any problems you have with your landing page, instead of that. LinkedIn just goes, Hey, fill out the form, we’ll even autofill all these fields for you, and you have a really, really high conversion rate.

Frank Felker  16:59

So is that something you would recommend? And do I pay a higher cost per click for that?

AJ Wilcox  17:05

I definitely recommend it because your conversion rates are going to be 10 to 50%. Higher, which, what that what that also means is your cost per lead is going to be 10 to 50%. Lower. So okay, we will we love, we love to start our clients out on this, like this is the first the first thing we want to try. Because when you’re just dipping your toe in the water, you’re testing to find out is this platform going to work for us, the more conversion data that you have, the better of a clue you’re going to get. So definitely highly recommended.

Frank Felker  17:37

Start. That’s great. So some reminded me of a question I meant to ask earlier, when we were talking about targeting, as we become more tightly targeted, do we pay a higher cost per click?

AJ Wilcox  17:50

Yes, in general, with social media, this is especially prevalent on Facebook, as you get more and more targeted, you’ll see your costs go up. LinkedIn auction attempts to work the same way, but it really doesn’t. So what we found is, the more targeted you get, the more facets that you layer on to that audience, the higher LinkedIn is going to push your minimum. And so instead of bidding 515 per click, you’ll have to bid 630 or something like that. But then after that, as long as you’re above the minimum, it’s probably not going to cost you any appreciably more.

Frank Felker  18:29

Now the last time I ran a LinkedIn ad, and I don’t think I’ve done one this calendar year, but they had a minimum campaign investment or something but a minimum of $100 that I had to throw at my campaign. Is that still correct? Or is that gone up?

AJ Wilcox  18:47

Thank goodness, that’s, that’s gone entirely. The only limits you have when you go on and create your own account. Now. It used to be they would charge you $5 to open an account. Now that’s gone away. It’s free. You can create as many accounts as you want. And then when you actually go to advertise, each campaign has to have a minimum of $10 per day in budget. So at the very least, I mean, you could spend $10, and then shut it off. And you don’t have to spend any more than that.

Frank Felker  19:19

That’s great. That’s good to know. Because, you know, I mean, as you said, You’ve got to gather data to find out what’s working, there’s no point in just throwing $100 or a million dollars or $10 for that matter, if you’re just hoping I don’t know not doing it with a specific objective in mind. Now, there are two levels of services that you offer at your company B two linked. One is account management, and the other is strategic advice and training. Let’s start with account management. What would that mean if you were to manage my LinkedIn advertising account?

AJ Wilcox  19:57

So this is what we do. 95% of the For our clients, it’s where the client says, here’s our budget, take it and maximize it get us the most bang for the buck on LinkedIn. And then we’re in there every day tweaking, testing, making changes to try to maximize it. So yeah, that’s, that’s what I would recommend, as long as you’ve got the resources for it.

Frank Felker  20:17

And can you speak to I mean, just in general terms of whatever you’re comfortable with, what sort of an ad budget a company should have, in order to be a good fit with your agency, and then how you charge for your services?

AJ Wilcox  20:32

Oh, sure. So the, because LinkedIn ads are more expensive, on a per click basis, what it means is to get enough data to actually test and make sure that it’s working, it means you’ve got to spend more during that test. So we don’t recommend if you’re targeting in North America, we don’t recommend budgeting anything less than about $5,000 a month, because that’s the level of data where usually by the end of spending $5,000, you have statistical significance in your conversion rate data. So that’s what we look for. For us, we start at $3,000 a month for account management. So if someone came on with a $5,000 budget, we invoice for three, and so they’d be eight kale.

Frank Felker  21:16

Okay. And, you know, it’s interesting, you talk about data. And as I’m glad to hear that somebody in an agency position like yourself, and that it’s a learning process, especially initially to figure out what’s working. So would you run like multiple ads against each other? Or headlines against each other? And images? How to? How will you? How will you get the data you need? AJ? Oh, such a good question. Testing is really near and dear to my heart, I can see testing gets you juiced up.

AJ Wilcox  21:48

It totally does. And I love data, and I didn’t used to do in high school, I was like, oh, math, I’m performing poorly here. It’s okay, I’m never going to need math again after I graduate. And sure enough, like, I do math every day, and I actually like it now. But when, when we run tests, we are we’re doing what we call a multivariate test. So we’re testing audiences against each other.

We’re also testing the types of targeting against each other because we know like job title targeting costs more than like department and seniority targeting. So we want to figure out which one gives us the better quality, conversion at the lowest cost. We’re also AV testing, ad messaging, or ad offers against each other. And so all of that together gives us really cool data we get to, to present to the client and teach them their audience.

Frank Felker  22:39

That’s great. And so then do you figure after? What is it 3045 6090? How long before you’ve got enough data at it to sink your teeth into and say to your client, okay, this is what’s working, this is what we recommend?

AJ Wilcox  22:54

Yeah, it’s usually within the first $1,000, we get a good idea of which audiences are going to be the most, the most engaged, and what they’re going to cost. It’s within about $5,000 that we know which audiences and which targeting types are, are the most efficient at to the conversion. And then, you know, if you give us three months or six months, every month, we’re going to learn more, and then use our previous data to help hone you know, who we should be doing more of the targeting to and always getting a little bit more efficient.

Frank Felker  23:29

That’s great, great stuff. Now, you don’t have to name names if you don’t want to. But can you give me an example of somebody who helped where they were before they came to you? Which magic wand you waved over their head? And what kind of results they got?

AJ Wilcox  23:46

Yeah, so I’ll share one account, because it doesn’t necessarily make us look very good. But it illustrates a really important point. So there was a – it’s actually the same HR SaaS company I talked about earlier. They came to us, and they were spending like $5,000 a month, their ideal target audiences absolutely there. But costs were too high. They weren’t getting performance. So they came and just said, AJ, we’ve got to have your team take this over, like, do what you can. And so for three months, we took their five eBooks that they had, and systematically tested through them to try to figure out which one was going to convert better and, and I thought for sure, at the end of this three months, the client was just going to fire us because we couldn’t get any of those. Those eBook downloads for under like $127 per one. I don’t know about anyone else, but $127. You know, paying an ad spend to get someone to download an eBook is like, sorry, that’s probably too much.

But rather than firing us the client came and said, Oh, hey, by the way, we just came out with this new offer. It’s called The Definitive Guide to onboarding is for employee onboarding. See what you can do. And so we did exactly the same thing, like we, we didn’t do anything different, we, you know, tested the same kind of ad copy the same kind of imagery, and just pointed it at this new offer. And overnight, our click through rates doubled. And our conversion rates tripled. While and we, you know, we got, we got this, this, this asset down to like $27 per conversion, which is night and day difference.

And the cool thing is that particular offer lasted for a solid, you know, six, eight months of that same kind of performance, it was kind of like a, a, don’t fix it if it’s not broken. So what that goes to show is really the power of your offer. But that’s an example of

Frank Felker  25:45

something we raise just because I’m a content nerd. Do you think it was the design of the cover of the book or that title or what it was about? What do you think was the big difference?

AJ Wilcox  25:57

I think as a combination of the title, because something that says the definitive or the ultimate guide, makes people feel like oh, this, this could be really meaty, I kind of dig my teeth into this. That’s great. The other one is, I mean, that the topic of it was, there’s so many HR leaders out there who were having trouble with onboarding, and they were just hungry for information about it. And you know, someone coming around saying, Hey, here’s the Ultimate Guide to plugging the leaks you have in your organization. I could imagine that contributed to it being a

Frank Felker  26:31

Regular viewers know that that topic is close to my heart. I published and I have a online course called How to Hire and Keep Great People. And one of the biggest topics is onboarding, and how it’s absolutely ignored in some places, and then totally screwed up almost everywhere else. So that I can see why that would be a strong offer. Now, a lot of people might try to do this themselves, the LinkedIn advertising. But you and I’ve talked about this a little bit previously, the interface and the platform, they’re not exactly what we would call intuitive. Has that gotten worse over time? Do you see that improving at any point?

AJ Wilcox  27:06

You know, it used to be really, really simple. But even when it was simple, there weren’t very many buttons, it was still really hard. And I guess the reason for this is because LinkedIn ads cost more per click, what it means is they are higher risk of making a mistake, because if you make a mistake, obviously, it automatically becomes an expensive mistake.

So even back when the platform was simple, it was still hard. And now they’ve really followed Facebook’s lead, and in finding all the new features that are working really well, and so they start tacking it on. And LinkedIn campaign manager has really become kind of a Frankenstein, where if you don’t know what you’re doing, like, it’s really easy to get lost or go. I don’t know what that button is, I guess I’ll press it. And that’s, that’s the risk.

Frank Felker  27:55

But you’re right, because that the risk of making a mistake from a financial standpoint is very hard. And so and you know, I’ve talked about this as well is that there’s almost like this black granite monolith, which is LinkedIn to its customer base, you know, who do you call it? What can you find? There’s, there’s so many questions that I have about so many different things. And it seems as though they really haven’t focused on, for example, they could have a great YouTube channel that explained a lot of things. But they don’t Yes. So and I don’t see that happening. But that’s good for your business, isn’t it, AJ?

AJ Wilcox  28:33

It is. I mean, if they made it really easy, no one would want to hire us. So I guess I should be grateful that they don’t get very intuitive.

Frank Felker  28:40

We’re running out of time here. But I want to learn a little bit about the LinkedIn ads show podcast, what kind of guests you bring on, and what might we learn there?

AJ Wilcox  28:51

Yeah, so it’s mostly a solo show, where I just go deep into strategies and tactics with LinkedIn, perfect. I started out as like, hey, when I have new employees coming on, I want to give them a resource where I’m teaching them like a master class. And I release it publicly. I mean, really, anyone who wants to do what we do, as well as us can just listen to the podcast. And oh, that’s all good. Everything we don’t back. Occasionally, we will do interviews. And usually it’s interviewing an employee at LinkedIn, who’s telling us about their product or giving us insight into what’s coming.

Frank Felker  29:29

I see. So you found a crack through the marble wall, the granite wall to talk to people, that’s great. Well, that I really like that. I really like that you’re giving away that content for free. Because you know, that’s content marketing. That’s what it’s all about. That’s what referred to as the generous educator, and sincere advocate for the success of your tribe, and the trusted authority on the topic. So I’m so glad to hear you’re doing that, and I appreciate you sharing what you know here. What we are Frick, I love it. But I’m sorry, what do you say?

AJ Wilcox  30:03

I said, preach frank, I love it. All three of those concepts are great.

Frank Felker  30:07

I’m glad I asked you to repeat that. I’ll pull that out as an audio snippet. They’re very cool. So we’re wrapping up. And I always like to ask my guests before we sign up. Is there any question that I have not asked you that I should have, or something that’s come to your mind that you want to share? before we sign off?

AJ Wilcox  30:26

Oh, I’d love to share something about like, when I go to launch a new campaign on Facebook, Facebook is a really generous platform. Because if I don’t know what I’m doing, and I just click all the defaults, I’m probably not going to wait, overpay, I’m not going to get punished. But LinkedIn, on the other hand, if you just take what they recommend in the campaign setup process, you’re probably going to end up paying three to four times more than you should be. Wow.

So yeah, the big pitfalls are LinkedIn starts you bidding, essentially CPM, it’s like, they call it automated bidding. And that’s the most expensive way to pay 90% of the time. And they also auto check a box called audience expansion. And what it does is basically says, like, hey, LinkedIn, here’s the target, we want to go after and they go, cool, we’re going to get some other people and shove them in there. If you’re paying LinkedIn premium pricing, I don’t think it ever makes sense for them to choose audience that you didn’t specifically choose. So avoid those pitfalls if you’re doing it yourself or talk to us and we can make sure that you get the very best performance possible.

Frank Felker  31:29

AJ Wilcox, thank you so much for joining me on Radio Free Enterprise today.

AJ Wilcox 

Awesome. Thanks so much, Frank.

Frank Felker

Thanks again to AJ and thank you for joining us. Until next time, I’m Frank Felker saying, I’ll see you on the radio.

Dude Walker  31:46

Forgiving your entrepreneurial sins with a gentle wave of his microphone, here’s Frank Felker.

Have you ever considered the impact that becoming a bestselling author could have on your business or career?

My guest this week is Tyler Wagner, a master book marketer and founder of Authors Unite in Miami, Florida.

Tyler has helped hundreds of authors become bestsellers on Amazon, USA Today, and the Wall Street Journal.

In today’s conversation I’m going to ask him how he performs his magic, what kinds of authors he helps, how much it costs, and how long it takes!

To learn more about Tyler and Authors Unite: https://AuthorsUnite.com

Frank Felker  00:22

Thank you, Dude Walker. Yes, indeed I am Frank Felker. Welcome back to Radio Free Enterprise.

My guest today is Tyler Wagner. Tyler is a master book marketer, and the creator of Authors Unite, calling in from Miami, Florida. Tyler Wagner, welcome to Radio Free Enterprise.

Tyler Wagner

Thank you. Thanks for having me.

Frank Felker

Tyler, it’s pretty amazing what you’ve been able to accomplish. You’ve helped hundreds of authors become Amazon best sellers, USA Today and Wall Street Journal best sellers. And we’re going to talk today about how you do that and how you could do it for somebody watching or listening today. But I want to start out with, you know, this sounds great. But what does it really mean to me as an individual? What would becoming a USA Today or  Wall Street Journal, bestselling author mean, for my business or my career?

Tyler Wagner  01:19

So I think there’s, there’s a lot of things with that. But I’ll try to unpack some of the top ones that we’ve seen with our, with our clients. So first thing I believe, to get there, right, you have to sell, typically, in a given week, at least 5000 copies of your book. So I think that that’s kind of one of the biggest things right? So 5000 new people are going to read your book, and then the chance of word of mouth taking over. And that book spreading outward from there is way higher.

My firm belief is the reason that most authors fail and fail is different for everybody. But meaning that their book doesn’t reach their expectations of sales is because the book never gets in enough hands to begin with for that to actually have a chance of happening. So. So I think that’s the first thing. Second, from a branding perspective. What I always point people toward is, you know, look at some of the biggest authors in the world, their social medias. And like Tony Robbins, another one’s like Russell Brunson of ClickFunnels I think he’s a really good example. He became a New York Times bestseller, and he’s the founder of like $100 million company Click Funnels. And if you go to his LinkedIn, he lists actually New York Times bestseller first, and then co-founder of ClickFunnels.

Second, so it just shows you like the importance and Tony Robbins, I believe, I don’t know if it still is, but his first listing was New York Times bestseller. There’s a book never split the difference. I’m blanking on the author’s name on his Instagram, it’s Wall Street Journal, bestselling author, when you become USA Today, Wall Street or New York Times, I believe it’s typically your first and highest accolade that you list on all of your socials. And then speaking fees. Also, getting clients, like a lot of our clients have courses or consulting that they offer on the back end of their book. So when you generate, you know, five to 20,000 sales to get on these lists, you know, obviously, you’re getting some opt ins, and most likely people are purchasing other things from you too, sometimes. So there’s a few to start.

Frank Felker  03:42

Okay. So it can translate into dollars and cents in the door in terms of charging higher fees as a consultant earning higher fees as a speaker, the actual generation of royalties from book sales and that kind of thing. Are we talking about primarily here? nonfiction business? How to books?

Tyler Wagner  04:07

Yeah, so we actually do fiction books as well, but primarily our target audience or author is a nonfiction, business, or self-help how-to, okay.

Frank Felker  04:21

Now, you know, we’ve all heard stories about authors who have spent a lot of money out of their own pocket to have copies of their books purchased at retail outlets, in order to game the system and get their book jacked up onto whatever list you’d like. But that’s not what you’re talking about here. What you’re talking about is promoting books in such a way that hundreds or even 1000s of people are spending their own money individually to buy the book, which also has it run up the run up the scale, does that sort of sum up what you do?

Tyler Wagner  05:00

Yeah, I mean, pretty much. And I can tell the backstory a little bit if you think it’s possible. So, you know, basically, I’ve been doing this now for about 10 years. And what happened is, is if you go online, on Google and just type in, like eBooks, sites, eBook promotion sites, there’s like 1000s of them. And 910 years ago, when I first started doing this, I would test those out, because I could only do Amazon bestseller for my clients for like the first five years.

So I would actually purchase part of the marketing plan that we would do for our clients, just one piece was these email lists. And so I would actually purchase some of them and isolate them to see what results they would get for my clients when going for Amazon bestseller. And from doing that, what I came to realize very quickly is like 99%, let’s say like, didn’t really produce any results. Thankfully, we did other marketing efforts that did so the client, you know, still got the result they were after. But it wasn’t coming from these email lists. But from all that trial and error, I did find like 10 to 15, depending on genre that would consistently produce results.

And so essentially, I brought them together. And I was like, hey, if we can isolate one to two books per week, and just focus on those primarily, and mail them out to these less, do Facebook ads, or some other types of paid advertising will do too, I think we can start hitting these major lists. Because as you know, and look, I think being an Amazon bestseller is better than not being one. But it’s categorical. And if you put the book in an easy category, you don’t really need that many sales.

When it comes to Wall Street, USA Today, there is no, you can’t game it, let’s say like you, you definitely need at least 5000 sales to have a shot. So either way, based off of all the testing I done, I knew if we could just isolate one to two books, we could probably get that we did our first one like five years ago, it’s sold 4800. And the guy hit number eight on Wall Street Journal. And then ever since then we’ve continued to do it. And now typically, our clients are getting anywhere from seven to 20,000 sales in a week. And then they’re hitting these, these lists.

Frank Felker  07:32

And I just want to reiterate that and when it comes to promotion that’s been used for years, probably over a century, to promote films and books and concert tickets and record albums. And you name it, I mean, it’s just a part of the entertainment business is promoting your property. So it’s, you know, in some movies, for example, they spend more on promotion than they do on producing the movie. So that just highlights you know how important it is. Now, I would be willing to bet to bet that in terms of you who you will accept to work with, because you’re going back to the same lists and offering books on a fairly frequent basis for sale, that these books need to have some value to them, they need to be relatively well written at least and that they solve a particular problem for a given audience. Is that a fair statement?

Tyler Wagner  08:26

Yeah, what so what’s cool about it is, so the answer is yes. But also that the way we’ve built the business, because we do focus primarily on the marketing side, is by partnering with publishers. So what happens is, like, I I’ve partnered with a lot of publishers that I trust, you know, our only and they’re really the ones doing the vetting process. So I know from certain publishers, like if the book is coming to us to do one of these campaigns, in all honesty, I don’t really need to vet it that much, just as long as I know that the actual topic will align with our audience. But as long as that’s the case, I know that you know, these publishers I’m speaking of like, I trust them enough that the book is going to be in good standing by the

Frank Felker  09:20

time it gets to us. That’s great. And that’s a that’s a great benefit of you having done this for this long and put together these partnerships that you know, you know that they’re doing the vetting and the sort of the bird dogging for you to find the good books. Now, can you tell us like a success story of a particular client? And the way I’d like for you to do it is here’s where they were before they came to you. This is what you were able to do for them. Here’s where they are now.

Tyler Wagner  09:52

Yeah, for sure. So there are a lot that come to mind. I actually literally like an hour and a half ago. I just did a testimonial Interview with a client that we just did a campaign for him. So he’s really fresh. So I’ll speak to him. So we did his campaign like two or three weeks ago. And he hit number one wall street journal. And then number two was Oprah Winfrey’s book. So that was, yeah, that’s been really cool in a lot of ways. Because as soon as that hit, you know, basically, now we’re using it as a testimonial, right? And it’s working really well.

But essentially, I actually exactly how you just asked me that is how I asked him. And basically, he said, prior to working with us on Amazon, the highest rank that his eBook had hit was ranked 2000 in the whole store. When we ran his campaign, I think he definitely hit top 10 in the entire Amazon Kindle Store throughout the week, and then obviously, number one in all of nonfiction, because that translates pretty closely to Wall Street Journal’s list. And then, you know, number one, Wall Street Journal. And then what he said so far, it’s very recent, right?

So he said one thing is, because he’s ahead of Oprah, a lot of people in his circle are talking about and even his daughter, like, told his teacher about it, like my dad’s book be open. So either way, that we’ll see what all His benefits are down the road. He is a public speaker, and he does on he does plan on doing a series of these books, the books called 22 Talk Shifts, and the author’s names Krister Ungerböck, just for anybody listening if they want to check out the book.

And so I think in a few months is when you’ll really see like that ROI, right from the public speaking. He’s doing a book series, he’s, he asked me actually to introduce him to a literary agent. So one of the one of his ideas potentially, is to get a traditional publishing deal by leveraging the results that he got this book, right. So that’s just that’s one of our most recent examples that I could share.

Frank Felker  12:10

Great. And what what’s the topic about it sounds like communication oriented? Yeah, communication oriented? Yep. Okay. Now, you’ve touched on Sunday, a couple of times that I think I want to make clear, which is, being a best seller does not require you to be number one on the list. That How do you define what a best seller is?

Tyler Wagner  12:34

Great question. So the best way for me to describe it is there’s five major lists, right, Amazon, Barnes and Noble, USA Today, Wall Street in New York time. So they all little differently for wall street journal. In this case, there’s a top 10 list. So as long as they hit one of the 10 spots on the Wall Street Journal, and it’s printed in the physical paper, then I would say they’re a Wall Street Journal bestseller.

If they hit number one, then obviously, they’re number one, Wall Street bestseller. USA Today is a top 150 New York Times depending on which one it is, is a top 10. And then Amazon’s categorical. So there’s, it depends on how many categories there’s, I guess there’s maybe 1000s of lists on there. And then Barnes and Noble is more of like a top 100.

Frank Felker  13:27

List. Okay. Now, in addition to helping people become bestsellers, you also if we go to author’s unite.com, we see quite a number of other services. And, again, you touched on something that I wanted to come back to and ask whether or not this is something you help authors with, which is if you get your book in the hands of 5000, or 10,000, or however many thousands of people during this bestseller campaign, potentially these are new members of your tribe, and that there are various techniques you can use within the content of the book to get somebody to let’s say, registered receive a bonus, or the audio version or something like that. And as a result, then they give you their contact information, usually at least first name and email address. Is that something you help people with? Or what sort of add on services do you guys offer?

Tyler Wagner  14:25

So we do we help people like build their sales funnels and like the back end of their websites and stuff. But what I always tell people if there is a business tied to it, and honestly, even if you’re a fiction author, it wouldn’t be a bad idea to do if you plan on doing like a series or multiple books. One of the things we tell people is in the beginning of the E book have some sort of link that is an opt in, right. So what we’ve seen work really well I’ll actually I’ll give an example. Have one, his name is Dan Henry digital millionaire secrets is the book. And he had his book like teaches you how to grow a business online. And then he had links throughout the book and one within the first like 20 pages so that you can see it. Even if you don’t buy the book, it’s in the look inside feature on Amazon. And from our campaign, I don’t know exactly how many opt ins you got. But he said he got a lot and that he actually made a lot of sales from it as well.

So people would buy the book, opt in, and then he had a course that he sold, and then it goes up into a mastermind, there’s a whole value ladder. But um, I think I always tell my clients like, there’s no reason not to have that, right. So even if it’s something like an action guide, we’ve seen that work well. So in the first few pages, like before you continue reading or before you start reading go here to download your action guide that will maximize your reading experience. You know, because you get a few 1000 opt ins or a few 100 opt ins that can lead like you said that they’re your tribe now. And the unfortunate thing of Amazon is even though people buy your stuff, you don’t get that customer data, right, you have to actually place things in your book. Mm hmm. Yeah,

Frank Felker  16:19

they get between you and the readers. No question. It’s funny, she mentioned that. I’m sure you’ve heard of Pat Flynn. He’s famous internet marketer and author. And he wrote a book called will it fly. And it has to do with testing your idea before you sink a bunch of money into creating a business to sell a product or service nobody wants. So first, you need to find out will it fly. And he did just what you described, I was looking at the look inside feature on amazon kindle of his book and right there on the first page was click this link to get my free online course. And you know, and I knew I’d have to register and whatever.

The interesting thing was, once I saw that I bought the eBook and the hardcover or not hardcover, paperback and audio book, just so to see how he had tied that in to everywhere. And the interesting thing to me was I really enjoyed the course and got a lot out of it did not like the book at all. didn’t enjoy reading, it didn’t enjoy listening to the audio book, but I’m on his email list now. Until I as I like to say I either by die or opt out. I see that you’ve got you will even help people like create a website for themselves or their book. What were what areas do you not go into might be easier way to carve this out? What sort of things do you feel like you really can help people with? And what sort of things are you not trying to help people with?

Tyler Wagner  17:46

Um, you know, it’s a good question. So the way Arielle mentioned this, and I’m, I’m not even trying to like plug this course. But it’s just it’s kind of fitting with what you asked. So I have this course coming out soon, called infinite partnership system. And it teaches how we grew our business, really, primarily through partnerships. So what happened is, once I started to focus on book marketing, the way we built it is I would my team, and I now have a team of like, now I think, right, like 15 salespeople, and we don’t ever really do like direct sales, we reach out to ghost writers, edit publishers and PR agencies to build strategic partnerships with them. And then they refer to us for the book marketing, and then we’ll refer to them for other things like editing. Oh, that’s great. And but what’s happened is when you build a business that way, now we’re at a point where my team and I have had over 5000 partnership conversations over the years so far.

And what that’s really allowed us to do. And this was like an unknown benefit when I started building the businesses way is those partners, you can like collaborate on other things. Like it’s not just a referral relate relationship. It’s like, Okay, I have 20 literary agents that refer to me for book marketing, and I know what all of their specialties are. So now when somebody comes to Authors Unite, and they’re looking to go the traditional route, I have a team of 20 literary agents that I can, like, send them the info, and actually the deal can flow through Authors Unite, you know, so and then the same thing was sometimes with like publishers, or ghost writers or editors is a good example.

So I have like hundreds of ghost writers, I know hundreds of editors, that they’re not like in house, they’re not just working for Authors Unite, but I know all of their expertise is what they focus on as far as genres. And so when somebody needs editing, I can have it come through Authors Unite, and then use One of my partner editors are ghost writers. Right? The reason position like that is like, in house, we really focus on the marketing, and we do publishing as well. But as far as the editing, Ghost writing PR, like, that’s all my partners that are kind of behind the Authors Unite brand, is the best way to put in

Frank Felker  20:21

play. That’s great. That makes a lot of sense. And congratulations on putting that together over the years. Clearly, you must be treating people correctly, or they wouldn’t partner with you, or at least stay partners with you. Yes, yep. So Tyler, the elephant in the room that’s been going on acknowledged is how much does all of this wonderfulness cost? I become, let’s say, a wall street journal or USA Today. bestselling author? How much? Is it going to set me back?

Tyler Wagner  20:55

Yes, so for our best seller campaigns, it’s a pretty wide range. It’s anywhere from low five figures to mid five figures, for those sort of campaigns from Amazon to USA Today, Wall Street. And then if you were, you know, going for something like New York Times, that’s it’s a whole different story, but that the budget necessary to move that amount of books and have a chance that could be potentially in the six figure range?

Frank Felker  21:22

Okay. All right. And how long does it take? Let’s say, I reached out to you today. And my book is already published, and it’s already to be promoted. How long before I become a best seller on one of these lists?

Tyler Wagner  21:40

So it depends on the list. So like Amazon, Barnes and Noble those, we could do within about 30 days or so, from you engaging us when it comes to USA Today, Wall Street’s that just depends on our timeline. So right now, we’re capable of doing up to two per week that we like, feel comfortable with our marketing capabilities. So right now, we’re booking into August, September, for that. So if you were to engage us now and we’re in, this is bad, we’re in May right now. Yeah, it was like March. So we’re in May.

So if you were to engage us now, we could do it. August, September time. And then for New York Times, that you’d really want to, you’d want to start that way earlier, because that’s more of like a pre order type of situation. The other bestseller lists, our strategy is more discounting the E book, and that all the sales actually happen in the same like week, right? Whereas a New York Times, you really want to start like six to nine months, potentially even longer. And it’s a full like pre order campaign strategy.

Frank Felker  22:53

Great. That was very clear. So if somebody is watching or listening, and they do want to learn more about this, what’s the best way for them to connect with you.

Tyler Wagner  23:05

So if you’re interested in this, the best way is just Authors Unite dot com. And if you fill out the application at the bottom of the homepage, that will then prompt you to schedule a time with me or somebody from our team. And if you have any questions, we do have a little chat. It is a real person. But obviously, the initial message is like a bot. And you can ping us a message there. We’re happy to answer them. Great.

Frank Felker  23:33

Well, I’m looking forward to when is that course coming out your partnership course. So that will be June 7, so about two weeks. Okay, that’s coming right up? Well, I’m looking forward to learning more about that. But we’re just about out of time. But I always like to close by asking my guests if there’s some question I have not asked you or a thought that has come to mind that you’d like to share before we sign off?

Tyler Wagner  24:01

Oh, that’s a good question. I don’t know. No, I would just say this. One of the things that I’ve seen by because we do a lot of the marketing side is a lot of times people, they get referred to us and we can still do the campaign, but they end up having to wait longer than they anticipated because they didn’t think about the marketing far enough in advance. So I would just say if you are an author or soon to be author, rather, just like instead of just focusing on one thing at a time, I suggest like think about have the end in mind and really plan that out in the beginning. Like get your marketing team ready before the book is even finished, right? Like get your PR team ready so that everything actually works out in a proper timeline for you.

Frank Felker  24:55

That’s great advice. And Tyler Wagner, thank you so much for joining me today on Radio Free Enterprise.

Tyler Wagner 

Thanks for having me.

Frank Felker 

Thanks again to Tyler and thank you for joining us. Until next time, I’m Frank Felker saying I’ll see you on the radio.

Dude Walker  25:12

Forgiving your entrepreneurial sins with a gentle wave of his microphone. Here’s Frank Felker.