Josh Bucio
speaker
87 appearances
1 recordings
1 series
first heard Dec 2024
last heard Dec 2024
Josh Bucio’s voice in public audio — every appearance, attributed to the second.
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Appearances
Right. Which it should, right? Like paid advertising should be your number one generator for business, right? Because where most business owners get it wrong is they pump the brakes on this once they get too much business, right?
Instead of growing the operations or doing the things to be able to fulfill on that, they pump it, they get scared, they see the numbers, they're like, oh, that's too high, right? Like 50 grand a month, does that scare you?
Yeah, and if you're not used to doing it, it should be scary, right? But once you understand the science of it, they're like, okay, if marketing is 10% of my revenue and I'm doing, so what I'm looking at here on your financials, I see actually only 1%. You're spending 50K on, It says advertising and promotion. So what does that incorporate right now?
That might be like yard signs and flags at our shop and stuff like that. Right. Which is part of marketing, but it's more branding related rather than direct marketing is what we call it. But like, you know, when... So you're spending about 50K a year where it should be, you know, 600,000.
But the cool thing is, is like when you dial in this budget and really come at it from a scientific approach, you'll start understanding that for every $1 I spend, it's going to equal $10 in revenue, right? And so if I go and I spend another $500,000, that means I'm going to get another 5 million, right? And so obviously any business owner in their right mind, they want that. Right, right.
So what's the percentage usually from paid marketing? Yeah, that's a great question. So your marketing should be... And I would say, and sales. So marketing and sales should be a total of about 20% in these type of businesses.
And so usually about half of that is attributed to marketing and half of that's attributed to sales, which I know you guys don't have like a huge sales team or anything built out either.
Because those two things, those drivers, marketing and having a high-performing sales team, all of a sudden, you can flip this thing on its head, right? Because you can be generating sales in a variety of different marketing methods. You could be doing organic door-to-door sales.
sales where people are going out and looking for quotes right by going door to door you can do paid advertising you come in you close it across the across the kitchen table or you do virtual i know we've talked a little bit about like virtual sales and those type of things and getting like real high ticket closers in in the room because right now your your sales department consists of who
Yeah, me, Josh, and we've got two other sales reps.
You're part lane that lead. Yeah, that's a good. And the, the, the other thing to consider here when we're talking about 10 cities is guess who doesn't scale? Me and Carter. That's right. That's right. And so, you know, although it's been easy up until this point to get $3 million in sales per location, you've had Carter and you in basically every single location. You guys don't scale, right?
Like your team can scale if you have good systems for recruiting and training and everything else. But The reality is, is you're not going to get the same type of production as you will from an owner that's sitting right underneath their nose. And so like, these are all things that you have to consider, especially when you're talking about like multiple locations.
But man, huge opportunity from a marketing and sales standpoint. But also this also goes back to like, I mean, all this is tied together from like creating like a five year plan and and the way that you have your your offer dialed in. Right. Because if there is not enough margin to be able to spend 20 percent on sales and marketing. You know, you don't you don't have a scalable business. Right.
And so then it goes back to, OK, what am I charging on the top line basis? Because like right now, from a percentage standpoint, you guys are charging 100 percent. You have 58 percent cogs. Right. Right. which means you have 42% gross margin, okay?
If I have 42% gross margin and I go and I allocate 20% to sales and marketing, and then on top of that, I see you guys have like 10 to 15% in everything else, right? What does that leave us with? That only gives us 7% net margin at the end of the Right. And, you know, which... For a traditional construction business, that's very accurate, like 7%.
The reason why you guys have been able to maintain a higher percentage is because one, Carter's doing all the sales, right? And you're not paying a big sales team and everything else. And so it's like, okay, how do we restructure this that allows us to still hit those targets of 20%? And so what do I need to do to my top line numbers to be able to be priced in. Right. Yeah.
Yeah, so you're referring to more like utilization, right? Like utilizing your fixed assets or your fixed labor, which is like you got this management in place or whatnot.
And that's a key thing for anybody to understand that's watching this or listening to this is just how valuable an additional dollar is to the business owner versus the customer, right? Like using this example, coming back over here to the whiteboard, where if it was $100 and you're taking home 7% at the end of the day, if you go and you charge the customer 100%,
101, you've increased their price by 1%, right? And your 1% goes directly to the bottom line, which has increased your net profit by 12%, right? So I mean, it's just such a drastic difference.
And this goes to one of the core strategies and principles that we always teach that you don't have a true competitor. A lot of times when we go and we look at the marketplace, we try pricing according to the competition out there. We make poor decisions for our business versus actually doing what's best for our business, backing it up with competition.
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