Wanna scale your business? Click here.Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: How did Alex Hormozi scale to $100K per month with no employees?
Hey guys, so this is a throwback of when I needed to start all over again and had basically no money and no employees and got to $100,000 a month in the first month. This has been my forever, never go hungry plan. Like if I lose everything tomorrow, this is what I would do. And I walk you through the framework of how I think about creating high leverage...
zero dollar opportunities for income generation. And I think it's one of those easy things that you can think about your own business, even through that lens. But having lost it all multiple times and gotten it back, this is the actual thing that I would do because it's what I did. Being a Rainmaker is a skill that can feed you for life.
All right, all you gotta do, no matter what industry you're in, is learn one, how to make a Grand Slam offer, two, how to run a basic ad to get people to raise their hand, and three, how to upsell those people into a service. Welcome to the game where we talk about how to sell more stuff to more people in more ways and build businesses worth owning.
I'm trying to build a billion dollar thing with acquisition.com. I always wished Bezos, Musk and Buffett had documented their journey, so I'm doing it for the rest of us. Please share and enjoy. I built $100,000 per month profit business with no employees for less than $1,000 when I was 26. And anyone could start the exact same business with little to no money at all and no employees, all right?
So I'm gonna explain what I did, how it worked, the good, the bad, the ugly, and what I would have done differently and how I think you can use the same model for yourself no matter how old you are or how much money you got, all right? And I did all this stuff using skills that anyone can learn for free, all right?
So I'll even give you a step-by-step setup in the last three minutes of what you would need to do to get this running. And if you don't know who I am, my name's Alex Ramosy, the founder of acquisition.com, portfolio companies that does over $200 million a year.
And I make these because I want you to use the stuff, grow your business to three to $100 million in revenue and allow us to invest in your business and scale beyond that. All right, so that's my self-vision 10 here. For everybody else, enjoy the stuff, go make money. That's the whole point. All right, so let's dive in. So when I had my chain of gyms, I got asked to speak at this marketing event.
So this is a random thing, and I had never been asked to speak for anything at all, ever, and so this was kind of weird to me. I was just doing my own thing. And I didn't do any B2B stuff, I just sold weight loss. And so they wanted me to speak about how I was using Facebook ads to get leads for Brick and Mortar in 2016. So anyways, I wasn't sure, but I decided to accept anyways.
I was like, this is a challenge, I'll go speak. And so I went up and, you know, I gave my, I gave my spiel and I just went step by step. This is how I did it. Right. And what I want to do is I'll explain to you exactly what I said on that speech. And then we're going to quit in Tarantino. And then I'm going to circle back to why, why it's going to be important to you. All right.
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Chapter 2: What are zero dollar opportunities for income generation?
So let's Quinn and Tarantino back to when I stepped off that stage, right? So as soon as I showed my whole model, I was like, this is the ads, these are landing pages, this is the thank you thing, blah, blah, blah. I got bum-rushed by all these folks asking me to help them do what I was doing, right? And they're like, can you do this for my business? Can you do this for dry cleaning?
Can you do this for whatever, right? And I had a bunch of gym owners too, obviously, and I didn't sell to gyms. So I was like, sorry, out of luck. I just do this for myself and I hope you enjoy the presentation. But being the budding entrepreneur that I was at the time, I figured... Maybe I could make some money doing this, right?
Maybe I could launch their gyms like I did my own and work out some sort of deal to get a percentage of the revenue that I was bringing in, right? Makes sense. So here's the offer that I made some of the guys who rushed me off stage. Now, I got all their business cards, then I would call them up the next week because I didn't even know what I was doing. And so this is the offer I came up with.
I said, I'll fly out to your gym, I'll spend my own money, I'll market your gym for you, I'll work the leads, I'll schedule them, and I'll sell them. And I'll even do nutrition orientations, which by the way, is where I would sell another 100 to 150 bucks a head in supplements. And if you're doing the math, that would also cover my cost to our customers on its own.
And all they had to do was just fulfill the six weeks of service, right? And then they got to keep whoever they converted into a membership. So it was a no risk offer for them. Remember, like I spent all my time and my money. They didn't have to do anything. And I got to eat what I killed. That was the deal. All right. So here's the important part.
If you are a single guy or gal, or heck, I mean, if you're married, it doesn't matter. If you know these three things, you can make this business model work for you. All right. So number one is you have to have a very compelling offer for brick and mortar business that gets leads. So for me, it was the challenge. It could be any number of things, right?
All you have to do is give something very valuable for less, right? It could be a free thing or a discounted thing. And then if you're giving a heavily discounted thing, you just have to learn how to upsell something. If it's not that, then you can just sell the core offer. Either way, a very compelling offer upfront. Number two, you got to learn how to run ads. Not that complicated.
Nowadays, you can run lead ads. You can watch them on YouTube. It's not that complex to do. And then number three, you learn how to sell. If you can do those three things, you got an offer, you can run ads, and you can sell the leads, you can make this business model work in any local market, all right? Now, so here's how you get the business owners to agree.
So you go into the groups and you ask folks in the groups and say, hey, can I bring you customers for free, no risk? All right, here's how I'll do it. I'll fly out, I'll spend my own money, et cetera, et cetera. And then here's the key part. You then ask them what's the absolute cheapest that they would fulfill customers for during this thing that you're selling.
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Chapter 3: What is a Grand Slam offer and how to create one?
And if you ran this play for a month and spent $400 a day in ads, that's $12,000 total, Remember, you make money quickly so you can reinvest it in ads. You'd make $120,000 in gross revenue. Mind you, that's not profit, that's revenue, all right?
So we still gotta take out your 12K in marketing and your 24K that you have to pay the doc, but now you got $84,000 left over as a single person that has no employees, that's all profit, all right? So you can stop there and you can make a million dollars a year in personal income. Not bad for no money down to start, no degree, no employees, right? But if you're a smart cookie, you can do better.
So this is what you do. You also meet with all those leads again and then sell them retail products. So think like cream, supplements, oils, orthotics, et cetera, right? Which you could pre-negotiate that you keep all your product sales, which is what I would do. And so then you make another 500 bucks ahead in profit with those product sales. So that puts another $24,000 back in your pocket.
And that now covers the dock. So now you're back to 108,000 minus your cost of living, which when I was doing this, it cost me about $3,000 a month in extended stay, because I would stay at a motel, food, gas, et cetera. So $105,000, boom. 100 grand plus in profit, no employees, 1,000 bucks to start.
But before you run off and do this, I told you at the beginning that I would tell you the good and the bad, but I still haven't told you the ugly. All right, so here's what I would do different if I could do this again. Now, I ran this model for a while. Here are 11 things that went wrong for me that I would have changed, all right? Number one, I massively overwhelmed the facilities.
I would have spent far more time really planning out how they would fulfill another XX patients or clients or customers, et cetera. I would have really been like, okay, well, if we get you 100 customers, what times are you gonna put them in? How can you fill the slot? I go to spend more time doing that with them. Number two, I partnered with struggling facilities.
And so this was a double-edged sword. They're really easy to sell, but at the same time, they had a bad reputation for a reason. They weren't that good at fulfilling. And so if I could do this again, I probably would have tried to find good people, not just anyone who would just let me sell in front of their door. I was young. I was inexperienced. I've made mistakes. That was one of them.
Number three, in retrospect, I would have explained all the costs I would incur up front. Hotels, airfare, food, rental, ad spend, et cetera. So they wouldn't think I was just like taking all this money to their facility. I'd be like, I got costs too, right? So I'd explain that so they understand like I have to make money to do this, right? Make it worth my time.
Mosey Nation, real quick, if you are a business owner that has a big old business and wants to get to a much bigger business, going to $50, $100 million plus, we would love to talk to you. And if you like that or would like to hear more about it, go to acquisition.com. You can apply anywhere on the page and talk to one of our team and see if we can help you get there.
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Chapter 4: How did Alex acquire customers without upfront costs?
I didn't think about content. It just wasn't a thing for me. And honestly, I think I would have been booked year-round. Like, no matter what, I wouldn't even have had to run an ad or do a reach-out. I would have been booked inbound. And at that point, this is the cool thing, is that if I had done that, I would have had more negotiating power.
So I could either negotiate a piece of the back end, like what the continuity was going to be, like if they converted, or they could have made me like an upfront cost to go out or they cover my marketing for me, not me. Like there's other things that I could have been able to leverage if I had had more brand, more content, you know, and I didn't have that.
So if I could do it again, I would have done that. It would have made even better deal for me. Next is I'd include a clause in my contract that I'd have them sign separately for added transparency and accountability that if any customer said they were encouraged to refund, so if they told a customer you should refund or you should sign up again through me, right?
So like if I sold somebody at a chiropractor's office for $2,500 and then I find out that the customer refunds and says they signed back up through the doc at half price, that they would owe me twice what the person paid. I would have done that. And
Big picture for me, that was actually the thing that drove this business into the ground for me, was that I had a couple of bad actors, which is why I said earlier I would have done deals with better people, less shady, who just basically said, one guy was like, there's too many people here, just refund. Because it wasn't his money, right? He didn't care. And so that hurt me a lot.
I also got slammed on a bunch of reviews because I was the one who would sell someone into a location and the location would suck. And so it was my reputation. I mean, there's two, but my reputation, because I was the one who was like, this is going to work. Right. And I definitely had rose colored glasses on in the beginning being like, oh, no, it's good. They're just scrappy, you know.
But I think ultimately people were not as well served. I should have picked partners that I really wanted to sell their product. And I just picked partners who would let me sell their product. And I was better at selling it than they were. And so, I mean, you know, you learn a lot. It's been a decade. It's been a while.
So the biggest problem is that when I had this, I had a few bad gyms that ruined it. Some acted really sketchy. Others sold clients to refund and sign back up. And unfortunately, since I was the one who sold them, I was the one left holding the bag. And I was the one associated with the decision, which sucks. I made mistakes.
I definitely put this with my rose-colored glasses on when I was selling these gym packages. I just pretended I couldn't see all the crappy stuff that was going on. But I was desperate, and I wanted to make money. And that's something that I own. I would have done it differently now, which is why I make this stuff. So my goal is motivation, you guys don't have to repeat my mistakes.
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