How I Would Build a $10M Service Business (If I Had to Start Over) | Ep 1004

The Game with Alex Hormozi

Alex Hormozi meets with Caleb, owner of Keys Roofing Company, to implement a strategic roadmap for scaling his service business. The discuss

Key takeaways

• Caleb achieved a massive revenue jump from $32K to $250K in just 90 days by executing the scaling roadmap.
• The strategy utilizes Video Sales Letters (VSLs) to break customer beliefs and build social proof before the sales call.

Main topics

• Service business scaling
• High-volume repair models

Notable quotes

Getting the first sale is the hard part. Getting the proximate sale is significantly easier.

Conclusion

The episode provides a concrete blueprint for service entrepreneurs to

Transcript preview

Speaker 1 (0:00) I'm about to help a complete stranger build a $7 million per year business. I'm going to give him a step-by-step roadmap on exactly what he needs to do. And 90 days later, we're going to check in with him to see what actually happened. And for all the business owners watching, I've scaled 10 businesses past 10 million, three past 100 million. And I've realized an important lesson, which is that businesses behave in patterns at all levels. And so you can take any of the principles and tactics and apply them to your specific business and industry at its current size. There are far more similarities than there are differences. And so with that being said, let's go meet Caleb. Ready to rock? I'm ready to rock and roll, brother. All right. Tell me about the business. Speaker 2 (0:32) So first off, my name is Caleb with a K. I own Keys Roofing Company. Also with a K. Yeah. All right. Alex with a A. Nice to meet you. So we are a premium and luxury roofing, gutter, and downspout contractor in St. Louis, Missouri. Speaker 2 (0:47) So we've been in business for two months. The current revenue, we're a little bit shy of 41,000. Profit is 24,248, Speaker 1 (0:55) somewhere about 59%. Speaker 2 (0:56) So you're doing Speaker 1 (0:56) like 20K a month-ish right now. Correct. Speaker 2 (0:58) The goal within the next three years is going to be 7 to 10 million. Speaker 1 (1:02) Okay. Love that. So how do you get customers? Speaker 2 (1:06) So the way that we get customers, two primary acquisition channels currently is door knocking. So I do a ton of canvassing and then also referrals, whether that's doing a great job for the person that I Speaker 1 (1:17) currently meet or people within my internal network. So walk me through the money stuff. Speaker 2 (1:22) Yeah. So with the money stuff, I have two streams of revenue with the full replacements. My average ticket year after year is about 18 to 25,000. The greatest thing about being the solution for the smaller problems is these jobs, Alex, they typically chunk up to those jobs. So if I'm coming through and I replace one downspout for somebody, run a gutters, what have you, nobody else will even show up to even attack that job, which then qualifies me to get the next job and all their future jobs. How many Speaker 1 (1:50) doors do you need to knock to get a sale? Speaker 2 (1:51) Oh man, I have a high close rate on that. So if I knock 20 doors, I'm getting a sale. Yeah. Like it's like Speaker 1 (2:00) that. Yeah. No, it's like that. Speaker 2 (2:02) It's like that. All Speaker 1 (2:03) right. Um, What's stopping you right now? Speaker 2 (2:07) So what's currently stopping me is having more salespeople because if I have two more salespeople, one project manager, I'm 100 % confident seven to 10 million is very doable. All Speaker 1 (2:17) right, hop onto the side and then we'll dive into it. Awesome. Speaker 1 (2:23) Okay, so the big thing that you right now have to deal with is like, there's one of you and there's, you don't have that minute, like. it's a small business, right? And I'm not saying that as a slide, I'm saying just factually, right? And so you're going to be resource constrained both time and money. And so I want to focus all efforts on the highest return stuff that you can do right now. What's very good about your business right now, honestly, is you. Because at any given point, you can knock 20 doors and you can get a deal, right? And so that reliability of being able to just basically go get money. is something that a lot of entrepreneurs don't know how to do. And that gives you a lot of what I'll call like cats have nine lives. Like entrepreneurs need as many lives that they can. And knowing how to go get money is one of the ways to do that. So I think it's super good. There's a couple of key decisions that I wanted to like walk through because one of the considerations I had was like, okay, was there a world where we could get repair average tickets up more meaningfully? And so say 7K is gross profit on the replacements. Sure. Does that sound fair? Yeah. Okay. So if we have 7K replacements, right? What is the gross profit on a repair? Speaker 2 (3:26) Oh, I'm at like 64%. Speaker 1 (3:29) And that average ticket is $1,500? Yep. So $1,100 gross profit on repairs. So I'll tell you where I was originally thinking was basically, is there a world where, let's say we get this gross profit up to $2,000. Is there a world where you think you could sell three times as many repairs as you could replacements? 100,000%. Right. So this is what got more interesting to me. It was like... I love when it's like when there's something that's been cast aside by other people, right? Like no one wants to do this particular thing, but then you orient a business in such a way that you can actually make really good gross profits on it. Part of me was running out the idea of like, what if we just did repairs and you did an absolute, like you just became, you systemized the living shit out of it, right? So what is the aggregate amount of all repairs? What would that ticket look like? So if you did everything minus replacement. These Speaker 2 (4:14) should really be selling for like $2,500 to $5,000. The Speaker 1 (4:16) reason that this is interesting to me is that like, if we can get this thing to $2,000, $3,000, you know, $4,000. Sure. This becomes an incredibly interesting business. Speaker 2 (4:24) Yeah. Speaker 1 (4:25) Just from the sheer volume that you can do and the reliability of revenue. Because the obvious one is cool. We do repairs and then we try and upsell the roofs. Like, that's fine. But I just like that you have this angle a lot. Let's just run this out and run out a version of the future. So let's just say that we try and get really, really sexy with our repair sales motion. So all the repairs, we try and get our foot in the door, quite literally. We get our repairs, and then they go to have their onboarding call with Amanda. Prior to the onboarding call, I would love to have them watch a VSL that talks about the other... the benefits of what you guys do. It's a long-term investment, blah, blah, blah, blah, right? And then Amanda then tries to close them on a mini close of, okay, you got this thing, but... You probably don't need this. You probably don't need this. But what you really are going to probably want to take care of is this and this, which, you know, my partner didn't have enough time to talk about. But given what we now know about it, because we did a little bit more work than just talking to you, we're going