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All right, so let's go over the stages of success and the copy and paste method.
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This is actually the principles that are encapsulated in the entire book, actually are kind of pushed down to this exact model.
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Let me be clear, and that is that the copy and paste method and the way that I describe it here is the exact steps that we use at Augusta.
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Does that mean you have to be inside of Augusta to use it?
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No.
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I think this is principles across the board that can be used.
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I want to make this distinction, though, because we have built all of our systems at Augusta to facilitate this exact process.
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And so will it be easier in Augusta?
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Yes, because Command Center is built out for you.
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Augusta Leads is able to handle your advertising.
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There's a lot of different processes that are in place that allow this process to go faster.
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But I wanted to be very clear.
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that this is our internal process that we use for owners to be able to copy and paste locations.
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But it can be used across other industries, no problem.
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It's just a function of you're going to have to build out a command center, you have to build out general manager training, you have to build out a department to be able to run ads on behalf of each location.
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That might take you a little longer, that's fine.
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But this is the method that the entire book is actually premised on.
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And so let's jump in.
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So these are the stages of success for owners.
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Now we have stages of success, seven stages for technicians.
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We have seven stages of success for general managers, and we have the seven stages of success for owners.
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Now we put this all on one giant board.
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We put on the wall and we actually track where every technician, every general manager, and every owner is at.
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This gives a sense of camaraderie.
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We're all on the same page.
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And when we talk about getting to the next stage of our career,
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There's actually some meaning to it because every technician, whether you got started last week, whether your general managers worked for a few years or you've been an owner for five or six years, you are still somewhere on these 21 stages of success.
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And so internally, that's why we talk about getting the next stage of your career.
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Now, you might be saying, well, I don't want to use those exact 21 stages.
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That's fine.
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I would just recommend that if you're hiring entry level, people have a way for them to move up inside the organization, whether that be actually having different levels of management that they can move up into and gain more skills, make more money, or simply different stages that unlock the next stage or certificate of their career.
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I highly recommend doing this now.
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We're not going to talk a lot about the general managers or the technicians, but let's talk about the seven stages of success for owners and then dive deep on the actual stage that requires the copy and paste method.
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So in the seven stages of success for owners, the first stage is to grow past $500,000 in annual revenue.
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This typically means you're gonna need several employees.
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Now, I like to get past this as fast as possible, so I'm usually going to be break even.
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Or like, I'm just trying to get past $500,000 in annual revenue.
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Now, this is gonna obviously be higher if you have a whole bunch of product costs, and materials, subcontractors, cost of goods sold.
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But in general, $500,000 of labor revenue is what I'm shooting for in stage one.
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This is like the entry level.
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You're never going to be able to do the copy and paste method if you're just doing $100,000 or $150,000 in revenue.
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The business won't be able to run without you and generate enough cash flow for you as the owner to take distributions.
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Right?
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And so I'm always thinking about how do I get past $500,000 as fast as possible?
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And if that means I'm not super profitable at the beginning, that's okay.
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I don't care.
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I don't care if my pricing is super high.
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I am just trying to get past that stage as quickly as possible.
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The reason is because stage two is entering profit mode and raising prices.
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So if you have a $500,000 annual revenue business and raise prices by 20%, that immediately puts you at $600,000 in annual revenue.
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Now, in order to go into profit mode, as we've talked already, is I've got to have enough customers coming in to replace churn.
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Otherwise, I raise prices, my close rate goes down, and all of a sudden I'm bleeding cash because my revenue starts declining.
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Assuming, though, that I have more demand for my services than I have supply of labor, I can enter profit mode, raise my prices, and draw a lot of money straight to the bottom line.
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Now, I believe in order to use the copy and paste method, I want to be able to follow these exact processes and steps.
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Now, I've already stated that this is the Augusta systems that we use.
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Now, if you're just starting doing one location, and I think most people should just have one location,
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If it's your process, you still would follow these steps to be able to have the business run without you.
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So the copy and paste millionaire and the copy and paste method is useful for multiple locations, but it's also a great way to have a business that does six to eight employees,
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A million dollars in annual revenue, super profitable.
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So stage one, I'm just getting to pass $500,000 in annual revenue.
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That's labor revenue.
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So if you have materials and stuff, it's going to be double that potentially.
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I'm going to enter profit mode and raise prices.
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I'm going to do that for a few years.
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This is the part where it kind of depends on how fast you want to grow.
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So we have owners of Gusto Lawn Care that as soon as they hit stage two, they will start another location.
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Because as soon as they get into, let's call it $550,000, $600,000, they pass $500,000, and they raise prices by 20%, 25%, 30%, they immediately can afford a general manager and be able to get to their next location.
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So...
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The speed at which you're trying to copy and paste locations kind of comes down to how long do you stay in stage two?
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Because in my opinion, I'm going to try to stay in profit mode for a few years if I'm being most conservative.
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Because if I can raise prices by 20% this year and get to $600,000, $600,000, $700,000, but then stay in another year and get to $750,000, $780,000, and I'm just raising prices.
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I'm raising prices by 15% to 25% every single time I hit capacity.
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and I'm not buying more trucks, I'm not hiring more people, I'm in profit mode.
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If I do that for a few years, I am much more conservative in my profit margins and the amount of cash I have on hand, and I've just done it longer.
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I've had more years and more reps to be able to then start another location, if I want to, much more conservatively, with more cash.
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If you're more aggressive with your approach, usually you'll go into profit mode and immediately start the next location.
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The reason I'm not a huge fan of this is that means that
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your first location although it is in profit mode you don't have necessarily the cash in your bank account yet from it actually being in profit mode for a full year and so i would much much rather if you're being more conservative use profit mode and have so much cash that you actually need to start another location just for the sake of taxes and section 179 and actually be able to have some write-offs for your second location
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as the most conservative approach.
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All right, stage three is I'm simplifying and I'm focusing on recurring revenue.
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There's a lot of times where people, if they do project-based work, one-time jobs, which I'm not against, everyone thinks I am, but it's stage three that they'll start moving towards recurring revenue.
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And they're like, you know what, I would rather take the small singles and doubles that are consistent than trying to hit these home runs and grand slams on these big projects.
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Because I also sometimes swing and I miss and I strike out.
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And those strikeouts are very difficult to overcome sometimes.
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A lawsuit, a damage case, and more importantly, these systems, stage three, I'm trying to simplify things.
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And again, I'm trying to always simplify and standardize everything.
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And therefore, that's what creates a system.
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is simplification and standardization.
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And so if you want the business to run without you and you have one location, or you want to do multiple locations, the copy and paste millionaire method, you're going to need to have systems.
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And in order to create systems, I'm going to have to simplify, I'm going to have to standardize.
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The most simplified standardized way of generating revenue is on a recurring basis, not reoccurring, which happens periodically, but not on a consistent basis, and not on a one-off basis.
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So this is generally where you're going to start doing more maintenance.
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You're going to do do trying to get out of repairs, reoccurring and going towards more recurring maintenance type work.
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And less installs.
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Are installs profitable?
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Yes.
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Are repairs profitable?
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Yes.
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But is recurring maintenance going to be the most consistent?
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Absolutely.
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It's going to be also usually the least affected by economies going up and down and by recessions.
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So it just is the most predictable revenue.
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This is also why the highest multiples are.
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in terms of selling the business goes to businesses with recurring revenue.
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Because when someone is valuing a business, they are looking at, what is the likelihood that this business continues to have this kind of revenue and profits in the long term?
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And so stage three, I'm creating systems.
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That's simplification, that's standardization, and I'm focusing on recurring revenue.
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Stage four of success is I'm going to scale.
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This is basically is again, that period where I might wait a few years.
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And that is a business that's 550, $600,000 in revenue, if they for three years just raise prices by 15 to 25%, they become 800, 900,000, a million dollars in revenue.
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In the past I've said like the perfect size business is 800,000 in revenue.
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The problem is if you stay in profit mode,
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assuming that you have more leads coming in than you can serve, you just will keep slowly growing revenue as you raise prices.
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And so my location that I have locally, it is doing over probably 1.1, 1.2 million in revenue.
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But if I just had not raised prices, it would be doing about $650,000 to $700,000 in revenue.
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It just, over the course of four or five years, just price increases have gotten me to 1.1, 1.2 million.
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And so this is many times where someone gets past $500,000 over the course of a couple of years, gets past $800,000, $900,000.
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And that stage four, again, is a huge variable in terms of your level of risk and how fast you're trying to grow.
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And so if you're trying to grow fast, you will not wait for scale.
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You will not wait for $800,000, $900,000 in revenue before you start going into the next location, getting a general manager, et cetera.
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But the most conservative approach is to sit in stage four for a second.
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and get past $800,000 in annual revenue.
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Real quick, in case you missed it, Copilot CRM is a thing of the past.
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We've now officially moved to HomeWorks, and you can go check out the new website, and it's super cool.
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Go to home.works and see how we guarantee home service businesses to grow their revenue or profit by a minimum of 10%, or we give them their money back.
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Stage five is where you hire a general manager and you get out of daily operations.
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The book covers a lot about the compensation plan, how to attract great talent for the GM.
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There's operational general managers.
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There are sales led general managers.
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How I compensate someone for sales versus leading day to day operations is going to be very different.
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The type of person that I'm looking for, where I look.
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In terms of finding a general manager that is operationally going to be liking the 5-10% tweaks of improving operations.
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As I'm sitting in stage 4 and I'm like 700,000, 750,000, 800,000.
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Those...
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Each year, I'm only growing a little bit based on profit mode, raising prices slightly.
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Very different personality and compensation plan required than someone that's starting a location from zero.
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Or trying to grow a location from $300,000 to $1 million in annual revenue.
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So the book talks in depth about compensation plans and where to find sales plans.
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oriented GMs and then operations or in GMs, very different compensation and their day looks very different.
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All right.
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Stage six, that's the copy and paste method.
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This is the copy and paste multiple locations.
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Again, there are many people that will skip stage six and that's fine.
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Take your current location, hire general manager, get that business up to 900,000, a million dollars in annual revenue, pumping out $200,000 in profits, sharing a chunk of that to your general manager.
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And that's a great business for a lot of people.
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Now, I also believe that the likelihood of success, if you go start another business, another industry, go into a different form of real estate, stocks, etc., your likelihood of success is lower in those industries than just doing what you've already done again.
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in maybe a slightly different market, the zip code over the city over, not on the other side of the country, not on the other side of the world, not in a different industry, not in a different, completely different market, just copying and pasting what you've already done.
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Now, this is not fun, this is not boring, copy and paste on your computer and like on the front of the book that has the command V or control V. It's not fun and exciting, but it's the highest likelihood of success.
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And so this is why I just encourage people, if you've got a model that works, does a million bucks in revenue, it's been in profit mode for several years, you have a general manager in place, you know how they should be running operations, just keep doing it over and over and over again.
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And don't get fancy with things.
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And so if you look at like Panda Express, they just did the same thing, selling chicken and rice online.
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2,000 times over the course of 40 years to be able to become billionaires.
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And so you don't need to get fancy with it.
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You just got to keep copying and pasting what already is working.
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And a lot of times people will have a million-dollar business and then start doing other stuff.
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They'll basically skip to stage seven, which is diversifying the stocks, real estate, and other businesses.
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The difference between a millionaire and a billionaire most of the time is how long they spent in stage six.
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Did they actually...
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spend a year or two trying to do another location, or do they do 20, 30, 40 years of just copying and pasting, figuring out the model, and then just doing it over and over and over and over again?
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And so if your main objective is purely economic,
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you're going to use the thing that you were the best at and has the highest likelihood of success and has a historical and statistical advantage compared to everyone else in the industry.
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And so if you go start a restaurant after starting a home service business, you are statistically on par with everyone else that has started a restaurant.
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If you've already built a million dollar home service business and it's profitable and being ran by a GM because you've passed stage five,
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your likelihood of doing that again is probably like 90% versus a 10% likelihood of success if you went start a restaurant.
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And if you're like, well, real estate is try and true.
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It always works.
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I agree.
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But your percentile is like maybe you're in the top 50th percentile if you're an average investor.
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and you've done it a few times, you're likely, if you're just getting into real estate, like the bottom 20th percentile, 25th percentile.
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So why would I try to make up that ignorance tax going from 20th percentile to like 90th percentile when I'm already in the 90th percentile of your industry, in-home services?
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So why not just do it again?
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Like your likelihood of success is so much higher.
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Yeah.
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Now, will you have to gain more skills?
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Will you have to learn how to hire general managers, compensate general managers, and will there be churn at that level because that level of leadership is something you haven't figured out yet?
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Yes.
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But you'll hit that same exact roadblock if you do another industry and it scales a certain size.
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And so a lot of times people will just get to that million dollar marker and just like, oh, I've gotta go to a different industry.
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And it's really just like they don't want to conquer the next obstacle of leadership that is required to have multiple locations, have general managers, or go to the GM Plus model where they're gonna start having
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sales operations and admin managers and different levels of hierarchy.
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And so people just go build a million dollar business and then they bounce to something else because there's another obstacle that's very difficult and that's the leadership side.
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And so will that be difficult?
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Yes.
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But if you already figure out everything else, how to get employees, how to attract talent, get technicians, train them up correctly, answer the phone, do upsells, have marketing and ads in place, you've already figured all that stuff out.
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That's like the hardest, like the biggest part.
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The next level is just unlocking the leadership part so that you can then copy and paste.
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And so the hardest part of copy and paste, stage six, and repeating this is leadership.
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And most people will burn through a few general managers before they start figuring out the skill that is required to be able to copy and paste the thing that they already know how to do, which is get customers, do the work, and get paid.
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Sales, operations, admin.
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They already know how to do those things.
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They just lack the skill of leadership.
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And so instead of going to a new industry, starting to figure out some other business, just figure out the leadership thing.
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And it might take you a few years, but if you do it, you can then copy and paste the system that you've already built for sales operation admin over and over and over again.
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That's the copy and paste multiple location stage six.
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Stage seven is after you've done all those things and you start diversifying.
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Now, I would only diversify once I have so much cash flow that I can't copy and paste fast enough.
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And in my opinion, people think this is like three or four years, maybe five years from now.
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I think this is 20 to 30 years away.
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And that is after I've copied and pasted so much, I now actually start thinking about like buying the land that my location sit on.
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I start thinking about how do I put money in a 401k or an IRA so I can protect my money from being taxed?
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How can I do tax advantage accounts to be able to, when I retire, I don't have to pay taxes on millions of dollars of money, of profit, of profits.
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These are things that I only worry about after I've exhausted number six.
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Because if you have 20, 30 locations, if you have a business that has 20, 30 million dollars in revenue, whether you do the GM Plus model, or you do the copy and paste method, either way, if you're doing 20 or 30 million dollars in revenue, you will get to the point where you can't copy and paste fast enough because the profits are so high.
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You can't keep starting locations fast enough or investing back in the business.
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So you'll need a more tax advantage way to grow your wealth.
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And it's going to be through real estate.
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It's going to be through your IRA, your 401k, and different methods of being able to save money and invest it without getting taxed.
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That's when you focus on number seven.
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I think I was really hesitant to even put number seven because so many people jumped to that after five or 10 years of business.
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What if they just stayed in stage six and just kept doing what they're doing, building a bigger org structure under the GM Plus model or copying and pasting their current model over and over and over again, moving into new markets, achieving lower customer acquisition costs by going to markets where they're brand new instead of trying to just like constantly increase customer acquisition costs because they're trying to boil this,
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this puddle, like your customer actually costs gets higher and higher.
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These are the type of things that if they were to figure these things out, spend years honing the skill of leadership and finding great talent, attracting and retaining great general managers, I feel like their returns would be a lot better than the real estate market.
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If you look at just like the S&P 500 over the past five or 10 years versus the real estate market, everyone's like, man, if I was about real estate, if you would invest in the S&P 500, you would know a lot better than the real estate market in the past five or 10 years.
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go up and down and there's going to be crashes, both on the real estate side as well as the S&P 500.
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The thing that you can control with certainty is your business and who you hire for your general manager and what you're doing for sales, operations, and admin, and getting more customers and doing the work efficiently and getting paid.
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And so in my opinion, the highest likelihood of success, the greatest level of success
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knowing and control of your wealth and the outcome that you you aspire to achieve is going to be through copying and pasting your current method whether that be inside the gm plus model copying and pasting different service departments different service crews and crew leaders and copying and pasting that over and over and making a massive org or copying and pasting one location and
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one model over and over again in different markets.
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Either way, I believe that is the greatest way to build wealth.
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And if you look at the return on invested capital, if you put a dollar in, how much I get out after a year, five years, 10 years, I believe that this is the highest likelihood of not only success, but also the highest degree of returns.
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and risk adjusted returns.
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And the reason that I think that they have the highest risk adjusted returns is once you've copied and pasted several locations, the risk is so much lower than putting the money in the stock market, in the real estate market.
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It is just lower because you have done it enough.
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You have full control.
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You have systems in place.
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You're not guessing.
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It is simply, I am putting a dollar in.
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I'm getting X amount on the other side.
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And so that's where the copy and paste method kind of stems from.
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Now let's look at the, what this copy and paste millionaire org chart looks like.
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Uh, many times as you scale out, if you look at one of these little branch at the bottom, it's basically a working GM model, a GM with six to eight technicians underneath them.
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Um,
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As you begin to scale that, you get multiple locations.
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You're usually the regional manager.
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You build out your command center and the agents inside of that, whether it be virtually or you start maybe having a hub-and-spoke model where you have an in-person office with your command center.
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And then these locations are smaller, like...
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office spaces, or I should say like storage spaces, they don't require an office, they're cheap rent, etc.
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Those could be more satellite options, satellite locations.
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Usually the owner is serving as the regional manager, but as all of their locations, five, six locations get into profit mode, you can then put a regional manager over all of them.
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Now these locations, because they're in profit mode, they've been there for several years, is starting to do four or five, six million dollars in annual revenue.
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Now you can afford to put a general, a regional manager completely step out of day operations.
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And this is where you can continue now to copy this, like the same, what we talk about copying and pasting the GM, the working GM model.
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You could then take this model where a regional manager is managing five to six locations.
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underneath them, each of those locations are being ran by a general manager, with six to eight technicians, you could then copy this and go do this again with five to six more locations somewhere else.
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And so this is where, again, staying in stage six for 10 years allows you to do this.
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Staying it for 20 or 30 allows you to copy this multiple times.
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With a regional manager, six locations underneath it.
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Inside of each of those locations is a general manager with six to eight technicians.
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It's a working GM model wrapped up into six locations that a regional manager is managing.
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But you can even copy that regional manager over and over again, each of those with having more locations underneath them.
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So again, a 10 year swing is probably what you're looking at right now, which is an org chart where you can step out as the owner, hire a regional manager with five, six locations underneath them.
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Each of those having a general manager with six to eight technicians underneath them, having a command center in the highest level of service, probably an in-person space with some VA to help with evenings, weekends, nights, et cetera, you'll answer the phone.
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Um, yeah.
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That's a very good business.
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This is in 10 to 12 years, someone can build this model, absolutely, doing four to $6 million in annual revenue.
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The person that wants to take this to the next level and really stay in the copy and paste method is going to stay here for another 10 years and probably do this once or twice again.
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Now all of a sudden that looks very interesting when someone's doing $10 to $20 million in annual revenue, this is now a chain that could be sold to private equity.
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And so that's where usually an exit is going to be for this type of business owner.
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All right, let's move to the checklist.
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So what does this look like for your first location?
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How do we get to this?
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What's the building block?
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So if we look back at the org chart, what's the building block look like?
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So on page 154, this is the checklist for the copy and paste method.
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Develop a team, six to eight field workers motivated by pay for performance.
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Fill to capacity.
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Every truck and employee is working full time.
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Employees take company vehicles home or park them at the shop.
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The shop does not have an office building.
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It serves as equipment storage.
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The company spends less than 3% of its revenue on rent.
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Have one general manager and zero middle managers.
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This is again your first location.
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This is the model you're going to copy across the entire org chart.
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Outsource your admin.
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Use virtual assistants or answering phone services for now.
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Build a command center once you have three or more locations.
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Automate sales, use instant quote forms from homeworks.
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You can also use over the phone sales.
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The working GM runs operations.
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They manage the team, hiring, and training.
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If they can't do scheduling, you will need to simplify services and systems more.
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Usually I see the owner or the regional manager doing the scheduling for any location that's in growth mode.
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Because if you're in growth mode, there are so many new customers being added and new team members being added.
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There's just a lot more chaos.
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It's a lot harder to do scheduling.
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Okay.
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At this point, the owner can leave daily operations.
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They will only need to work one to two hours a week at the location or remain the operator in the business and serve as the working GM.
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So again, that is the building block by which then we copy and paste that over the course of five, six locations, the owner serving as the regional manager.
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Then down the road, once all those locations are in profit mode, you can then hire a regional manager to take those locations
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five, six locations with five to six general managers, all in the working GM size, all been in profit mode for a few years, doing over $800,000 in annual revenue.
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That's a business that's very, very strong.
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That is the copy and paste millionaire method.
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All right, so let's go over the stages of success and the copy and paste method.
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This is actually the principles that are encapsulated in the entire book, actually are kind of pushed down to this exact model.
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Let me be clear, and that is that the copy and paste method and the way that I describe it here is the exact steps that we use at Augusta.
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Does that mean you have to be inside of Augusta to use it?
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No.
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I think this is principles across the board that can be used.
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I want to make this distinction, though, because we have built all of our systems at Augusta to facilitate this exact process.
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And so will it be easier in Augusta?
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Yes, because Command Center is built out for you.
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Augusta Leads is able to handle your advertising.
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There's a lot of different processes that are in place that allow this process to go faster.
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But I wanted to be very clear.
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that this is our internal process that we use for owners to be able to copy and paste locations.
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But it can be used across other industries, no problem.
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It's just a function of you're going to have to build out a command center, you have to build out general manager training, you have to build out a department to be able to run ads on behalf of each location.
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That might take you a little longer, that's fine.
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But this is the method that the entire book is actually premised on.
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And so let's jump in.
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So these are the stages of success for owners.
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Now we have stages of success, seven stages for technicians.
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We have seven stages of success for general managers, and we have the seven stages of success for owners.
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Now we put this all on one giant board.
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We put on the wall and we actually track where every technician, every general manager, and every owner is at.
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This gives a sense of camaraderie.
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We're all on the same page.
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And when we talk about getting to the next stage of our career,
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There's actually some meaning to it because every technician, whether you got started last week, whether your general managers worked for a few years or you've been an owner for five or six years, you are still somewhere on these 21 stages of success.
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And so internally, that's why we talk about getting the next stage of your career.
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Now, you might be saying, well, I don't want to use those exact 21 stages.
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That's fine.
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I would just recommend that if you're hiring entry level, people have a way for them to move up inside the organization, whether that be actually having different levels of management that they can move up into and gain more skills, make more money, or simply different stages that unlock the next stage or certificate of their career.
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I highly recommend doing this now.
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We're not going to talk a lot about the general managers or the technicians, but let's talk about the seven stages of success for owners and then dive deep on the actual stage that requires the copy and paste method.
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So in the seven stages of success for owners, the first stage is to grow past $500,000 in annual revenue.
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This typically means you're gonna need several employees.
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Now, I like to get past this as fast as possible, so I'm usually going to be break even.
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Or like, I'm just trying to get past $500,000 in annual revenue.
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Now, this is gonna obviously be higher if you have a whole bunch of product costs, and materials, subcontractors, cost of goods sold.
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But in general, $500,000 of labor revenue is what I'm shooting for in stage one.
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This is like the entry level.
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You're never going to be able to do the copy and paste method if you're just doing $100,000 or $150,000 in revenue.
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The business won't be able to run without you and generate enough cash flow for you as the owner to take distributions.
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Right?
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And so I'm always thinking about how do I get past $500,000 as fast as possible?
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And if that means I'm not super profitable at the beginning, that's okay.
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I don't care.
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I don't care if my pricing is super high.
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I am just trying to get past that stage as quickly as possible.
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The reason is because stage two is entering profit mode and raising prices.
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So if you have a $500,000 annual revenue business and raise prices by 20%, that immediately puts you at $600,000 in annual revenue.
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Now, in order to go into profit mode, as we've talked already, is I've got to have enough customers coming in to replace churn.
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Otherwise, I raise prices, my close rate goes down, and all of a sudden I'm bleeding cash because my revenue starts declining.
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Assuming, though, that I have more demand for my services than I have supply of labor, I can enter profit mode, raise my prices, and draw a lot of money straight to the bottom line.
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Now, I believe in order to use the copy and paste method, I want to be able to follow these exact processes and steps.
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Now, I've already stated that this is the Augusta systems that we use.
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Now, if you're just starting doing one location, and I think most people should just have one location,
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If it's your process, you still would follow these steps to be able to have the business run without you.
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So the copy and paste millionaire and the copy and paste method is useful for multiple locations, but it's also a great way to have a business that does six to eight employees,
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A million dollars in annual revenue, super profitable.
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So stage one, I'm just getting to pass $500,000 in annual revenue.
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That's labor revenue.
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So if you have materials and stuff, it's going to be double that potentially.
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I'm going to enter profit mode and raise prices.
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I'm going to do that for a few years.
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This is the part where it kind of depends on how fast you want to grow.
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So we have owners of Gusto Lawn Care that as soon as they hit stage two, they will start another location.
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Because as soon as they get into, let's call it $550,000, $600,000, they pass $500,000, and they raise prices by 20%, 25%, 30%, they immediately can afford a general manager and be able to get to their next location.
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So...
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The speed at which you're trying to copy and paste locations kind of comes down to how long do you stay in stage two?
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Because in my opinion, I'm going to try to stay in profit mode for a few years if I'm being most conservative.
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Because if I can raise prices by 20% this year and get to $600,000, $600,000, $700,000, but then stay in another year and get to $750,000, $780,000, and I'm just raising prices.
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I'm raising prices by 15% to 25% every single time I hit capacity.
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and I'm not buying more trucks, I'm not hiring more people, I'm in profit mode.
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If I do that for a few years, I am much more conservative in my profit margins and the amount of cash I have on hand, and I've just done it longer.
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I've had more years and more reps to be able to then start another location, if I want to, much more conservatively, with more cash.
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If you're more aggressive with your approach, usually you'll go into profit mode and immediately start the next location.
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The reason I'm not a huge fan of this is that means that
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your first location although it is in profit mode you don't have necessarily the cash in your bank account yet from it actually being in profit mode for a full year and so i would much much rather if you're being more conservative use profit mode and have so much cash that you actually need to start another location just for the sake of taxes and section 179 and actually be able to have some write-offs for your second location
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as the most conservative approach.
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All right, stage three is I'm simplifying and I'm focusing on recurring revenue.
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There's a lot of times where people, if they do project-based work, one-time jobs, which I'm not against, everyone thinks I am, but it's stage three that they'll start moving towards recurring revenue.
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And they're like, you know what, I would rather take the small singles and doubles that are consistent than trying to hit these home runs and grand slams on these big projects.
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Because I also sometimes swing and I miss and I strike out.
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And those strikeouts are very difficult to overcome sometimes.
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A lawsuit, a damage case, and more importantly, these systems, stage three, I'm trying to simplify things.
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And again, I'm trying to always simplify and standardize everything.
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And therefore, that's what creates a system.
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is simplification and standardization.
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And so if you want the business to run without you and you have one location, or you want to do multiple locations, the copy and paste millionaire method, you're going to need to have systems.
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And in order to create systems, I'm going to have to simplify, I'm going to have to standardize.
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The most simplified standardized way of generating revenue is on a recurring basis, not reoccurring, which happens periodically, but not on a consistent basis, and not on a one-off basis.
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So this is generally where you're going to start doing more maintenance.
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You're going to do do trying to get out of repairs, reoccurring and going towards more recurring maintenance type work.
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And less installs.
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Are installs profitable?
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Yes.
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Are repairs profitable?
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Yes.
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But is recurring maintenance going to be the most consistent?
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Absolutely.
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It's going to be also usually the least affected by economies going up and down and by recessions.
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So it just is the most predictable revenue.
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This is also why the highest multiples are.
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in terms of selling the business goes to businesses with recurring revenue.
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Because when someone is valuing a business, they are looking at, what is the likelihood that this business continues to have this kind of revenue and profits in the long term?
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And so stage three, I'm creating systems.
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That's simplification, that's standardization, and I'm focusing on recurring revenue.
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Stage four of success is I'm going to scale.
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This is basically is again, that period where I might wait a few years.
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And that is a business that's 550, $600,000 in revenue, if they for three years just raise prices by 15 to 25%, they become 800, 900,000, a million dollars in revenue.
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In the past I've said like the perfect size business is 800,000 in revenue.
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The problem is if you stay in profit mode,
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assuming that you have more leads coming in than you can serve, you just will keep slowly growing revenue as you raise prices.
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And so my location that I have locally, it is doing over probably 1.1, 1.2 million in revenue.
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But if I just had not raised prices, it would be doing about $650,000 to $700,000 in revenue.
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It just, over the course of four or five years, just price increases have gotten me to 1.1, 1.2 million.
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And so this is many times where someone gets past $500,000 over the course of a couple of years, gets past $800,000, $900,000.
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And that stage four, again, is a huge variable in terms of your level of risk and how fast you're trying to grow.
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And so if you're trying to grow fast, you will not wait for scale.
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You will not wait for $800,000, $900,000 in revenue before you start going into the next location, getting a general manager, et cetera.
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But the most conservative approach is to sit in stage four for a second.
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and get past $800,000 in annual revenue.
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Real quick, in case you missed it, Copilot CRM is a thing of the past.
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We've now officially moved to HomeWorks, and you can go check out the new website, and it's super cool.
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Go to home.works and see how we guarantee home service businesses to grow their revenue or profit by a minimum of 10%, or we give them their money back.
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Stage five is where you hire a general manager and you get out of daily operations.
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The book covers a lot about the compensation plan, how to attract great talent for the GM.
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There's operational general managers.
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There are sales led general managers.
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How I compensate someone for sales versus leading day to day operations is going to be very different.
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The type of person that I'm looking for, where I look.
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In terms of finding a general manager that is operationally going to be liking the 5-10% tweaks of improving operations.
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As I'm sitting in stage 4 and I'm like 700,000, 750,000, 800,000.
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Those...
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Each year, I'm only growing a little bit based on profit mode, raising prices slightly.
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Very different personality and compensation plan required than someone that's starting a location from zero.
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Or trying to grow a location from $300,000 to $1 million in annual revenue.
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So the book talks in depth about compensation plans and where to find sales plans.
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oriented GMs and then operations or in GMs, very different compensation and their day looks very different.
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All right.
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Stage six, that's the copy and paste method.
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This is the copy and paste multiple locations.
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Again, there are many people that will skip stage six and that's fine.
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Take your current location, hire general manager, get that business up to 900,000, a million dollars in annual revenue, pumping out $200,000 in profits, sharing a chunk of that to your general manager.
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And that's a great business for a lot of people.
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Now, I also believe that the likelihood of success, if you go start another business, another industry, go into a different form of real estate, stocks, etc., your likelihood of success is lower in those industries than just doing what you've already done again.
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in maybe a slightly different market, the zip code over the city over, not on the other side of the country, not on the other side of the world, not in a different industry, not in a different, completely different market, just copying and pasting what you've already done.
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Now, this is not fun, this is not boring, copy and paste on your computer and like on the front of the book that has the command V or control V. It's not fun and exciting, but it's the highest likelihood of success.
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And so this is why I just encourage people, if you've got a model that works, does a million bucks in revenue, it's been in profit mode for several years, you have a general manager in place, you know how they should be running operations, just keep doing it over and over and over again.
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And don't get fancy with things.
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And so if you look at like Panda Express, they just did the same thing, selling chicken and rice online.
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2,000 times over the course of 40 years to be able to become billionaires.
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And so you don't need to get fancy with it.
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You just got to keep copying and pasting what already is working.
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And a lot of times people will have a million-dollar business and then start doing other stuff.
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They'll basically skip to stage seven, which is diversifying the stocks, real estate, and other businesses.
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The difference between a millionaire and a billionaire most of the time is how long they spent in stage six.
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Did they actually...
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spend a year or two trying to do another location, or do they do 20, 30, 40 years of just copying and pasting, figuring out the model, and then just doing it over and over and over and over again?
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And so if your main objective is purely economic,
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you're going to use the thing that you were the best at and has the highest likelihood of success and has a historical and statistical advantage compared to everyone else in the industry.
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And so if you go start a restaurant after starting a home service business, you are statistically on par with everyone else that has started a restaurant.
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If you've already built a million dollar home service business and it's profitable and being ran by a GM because you've passed stage five,
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your likelihood of doing that again is probably like 90% versus a 10% likelihood of success if you went start a restaurant.
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And if you're like, well, real estate is try and true.
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It always works.
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I agree.
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But your percentile is like maybe you're in the top 50th percentile if you're an average investor.
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and you've done it a few times, you're likely, if you're just getting into real estate, like the bottom 20th percentile, 25th percentile.
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So why would I try to make up that ignorance tax going from 20th percentile to like 90th percentile when I'm already in the 90th percentile of your industry, in-home services?
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So why not just do it again?
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Like your likelihood of success is so much higher.
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Yeah.
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Now, will you have to gain more skills?
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Will you have to learn how to hire general managers, compensate general managers, and will there be churn at that level because that level of leadership is something you haven't figured out yet?
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Yes.
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But you'll hit that same exact roadblock if you do another industry and it scales a certain size.
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And so a lot of times people will just get to that million dollar marker and just like, oh, I've gotta go to a different industry.
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And it's really just like they don't want to conquer the next obstacle of leadership that is required to have multiple locations, have general managers, or go to the GM Plus model where they're gonna start having
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sales operations and admin managers and different levels of hierarchy.
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And so people just go build a million dollar business and then they bounce to something else because there's another obstacle that's very difficult and that's the leadership side.
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And so will that be difficult?
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Yes.
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But if you already figure out everything else, how to get employees, how to attract talent, get technicians, train them up correctly, answer the phone, do upsells, have marketing and ads in place, you've already figured all that stuff out.
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That's like the hardest, like the biggest part.
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The next level is just unlocking the leadership part so that you can then copy and paste.
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And so the hardest part of copy and paste, stage six, and repeating this is leadership.
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And most people will burn through a few general managers before they start figuring out the skill that is required to be able to copy and paste the thing that they already know how to do, which is get customers, do the work, and get paid.
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Sales, operations, admin.
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They already know how to do those things.
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They just lack the skill of leadership.
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And so instead of going to a new industry, starting to figure out some other business, just figure out the leadership thing.
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And it might take you a few years, but if you do it, you can then copy and paste the system that you've already built for sales operation admin over and over and over again.
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That's the copy and paste multiple location stage six.
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Stage seven is after you've done all those things and you start diversifying.
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Now, I would only diversify once I have so much cash flow that I can't copy and paste fast enough.
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And in my opinion, people think this is like three or four years, maybe five years from now.
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I think this is 20 to 30 years away.
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And that is after I've copied and pasted so much, I now actually start thinking about like buying the land that my location sit on.
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I start thinking about how do I put money in a 401k or an IRA so I can protect my money from being taxed?
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How can I do tax advantage accounts to be able to, when I retire, I don't have to pay taxes on millions of dollars of money, of profit, of profits.
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These are things that I only worry about after I've exhausted number six.
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Because if you have 20, 30 locations, if you have a business that has 20, 30 million dollars in revenue, whether you do the GM Plus model, or you do the copy and paste method, either way, if you're doing 20 or 30 million dollars in revenue, you will get to the point where you can't copy and paste fast enough because the profits are so high.
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You can't keep starting locations fast enough or investing back in the business.
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So you'll need a more tax advantage way to grow your wealth.
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And it's going to be through real estate.
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It's going to be through your IRA, your 401k, and different methods of being able to save money and invest it without getting taxed.
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That's when you focus on number seven.
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I think I was really hesitant to even put number seven because so many people jumped to that after five or 10 years of business.
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What if they just stayed in stage six and just kept doing what they're doing, building a bigger org structure under the GM Plus model or copying and pasting their current model over and over and over again, moving into new markets, achieving lower customer acquisition costs by going to markets where they're brand new instead of trying to just like constantly increase customer acquisition costs because they're trying to boil this,
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this puddle, like your customer actually costs gets higher and higher.
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These are the type of things that if they were to figure these things out, spend years honing the skill of leadership and finding great talent, attracting and retaining great general managers, I feel like their returns would be a lot better than the real estate market.
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If you look at just like the S&P 500 over the past five or 10 years versus the real estate market, everyone's like, man, if I was about real estate, if you would invest in the S&P 500, you would know a lot better than the real estate market in the past five or 10 years.
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go up and down and there's going to be crashes, both on the real estate side as well as the S&P 500.
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The thing that you can control with certainty is your business and who you hire for your general manager and what you're doing for sales, operations, and admin, and getting more customers and doing the work efficiently and getting paid.
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And so in my opinion, the highest likelihood of success, the greatest level of success
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knowing and control of your wealth and the outcome that you you aspire to achieve is going to be through copying and pasting your current method whether that be inside the gm plus model copying and pasting different service departments different service crews and crew leaders and copying and pasting that over and over and making a massive org or copying and pasting one location and
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one model over and over again in different markets.
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Either way, I believe that is the greatest way to build wealth.
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And if you look at the return on invested capital, if you put a dollar in, how much I get out after a year, five years, 10 years, I believe that this is the highest likelihood of not only success, but also the highest degree of returns.
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and risk adjusted returns.
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And the reason that I think that they have the highest risk adjusted returns is once you've copied and pasted several locations, the risk is so much lower than putting the money in the stock market, in the real estate market.
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It is just lower because you have done it enough.
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You have full control.
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You have systems in place.
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You're not guessing.
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It is simply, I am putting a dollar in.
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I'm getting X amount on the other side.
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And so that's where the copy and paste method kind of stems from.
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Now let's look at the, what this copy and paste millionaire org chart looks like.
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Uh, many times as you scale out, if you look at one of these little branch at the bottom, it's basically a working GM model, a GM with six to eight technicians underneath them.
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Um,
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As you begin to scale that, you get multiple locations.
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You're usually the regional manager.
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You build out your command center and the agents inside of that, whether it be virtually or you start maybe having a hub-and-spoke model where you have an in-person office with your command center.
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And then these locations are smaller, like...
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office spaces, or I should say like storage spaces, they don't require an office, they're cheap rent, etc.
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Those could be more satellite options, satellite locations.
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Usually the owner is serving as the regional manager, but as all of their locations, five, six locations get into profit mode, you can then put a regional manager over all of them.
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Now these locations, because they're in profit mode, they've been there for several years, is starting to do four or five, six million dollars in annual revenue.
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Now you can afford to put a general, a regional manager completely step out of day operations.
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And this is where you can continue now to copy this, like the same, what we talk about copying and pasting the GM, the working GM model.
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You could then take this model where a regional manager is managing five to six locations.
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underneath them, each of those locations are being ran by a general manager, with six to eight technicians, you could then copy this and go do this again with five to six more locations somewhere else.
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And so this is where, again, staying in stage six for 10 years allows you to do this.
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Staying it for 20 or 30 allows you to copy this multiple times.
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With a regional manager, six locations underneath it.
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Inside of each of those locations is a general manager with six to eight technicians.
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It's a working GM model wrapped up into six locations that a regional manager is managing.
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But you can even copy that regional manager over and over again, each of those with having more locations underneath them.
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So again, a 10 year swing is probably what you're looking at right now, which is an org chart where you can step out as the owner, hire a regional manager with five, six locations underneath them.
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Each of those having a general manager with six to eight technicians underneath them, having a command center in the highest level of service, probably an in-person space with some VA to help with evenings, weekends, nights, et cetera, you'll answer the phone.
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Um, yeah.
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That's a very good business.
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This is in 10 to 12 years, someone can build this model, absolutely, doing four to $6 million in annual revenue.
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The person that wants to take this to the next level and really stay in the copy and paste method is going to stay here for another 10 years and probably do this once or twice again.
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Now all of a sudden that looks very interesting when someone's doing $10 to $20 million in annual revenue, this is now a chain that could be sold to private equity.
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And so that's where usually an exit is going to be for this type of business owner.
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All right, let's move to the checklist.
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So what does this look like for your first location?
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How do we get to this?
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What's the building block?
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So if we look back at the org chart, what's the building block look like?
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So on page 154, this is the checklist for the copy and paste method.
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Develop a team, six to eight field workers motivated by pay for performance.
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Fill to capacity.
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Every truck and employee is working full time.
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Employees take company vehicles home or park them at the shop.
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The shop does not have an office building.
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It serves as equipment storage.
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The company spends less than 3% of its revenue on rent.
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Have one general manager and zero middle managers.
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This is again your first location.
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This is the model you're going to copy across the entire org chart.
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Outsource your admin.
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Use virtual assistants or answering phone services for now.
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Build a command center once you have three or more locations.
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00:24:46.039 --> 00:24:49.021
Automate sales, use instant quote forms from homeworks.
279
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You can also use over the phone sales.
280
00:24:52.202 --> 00:24:54.023
The working GM runs operations.
281
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They manage the team, hiring, and training.
282
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If they can't do scheduling, you will need to simplify services and systems more.
283
00:25:00.567 --> 00:25:06.890
Usually I see the owner or the regional manager doing the scheduling for any location that's in growth mode.
284
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Because if you're in growth mode, there are so many new customers being added and new team members being added.
285
00:25:12.173 --> 00:25:13.274
There's just a lot more chaos.
286
00:25:13.294 --> 00:25:14.555
It's a lot harder to do scheduling.
287
00:25:14.575 --> 00:25:15.275
Okay.
288
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At this point, the owner can leave daily operations.
289
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They will only need to work one to two hours a week at the location or remain the operator in the business and serve as the working GM.
290
00:25:25.201 --> 00:25:34.086
So again, that is the building block by which then we copy and paste that over the course of five, six locations, the owner serving as the regional manager.
291
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Then down the road, once all those locations are in profit mode, you can then hire a regional manager to take those locations
292
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five, six locations with five to six general managers, all in the working GM size, all been in profit mode for a few years, doing over $800,000 in annual revenue.
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That's a business that's very, very strong.
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That is the copy and paste millionaire method.
