The Game with Alex Hormozi
Building a $3,000,000 Business for a Stranger in 57 Mins | Cash Cows | Ep 867
Wed, 09 Apr 2025
Wanna scale your business? Click here.Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: Who is Ben and what is his business?
This is Ben. He's a cocktail consultant who helps restaurants and bars optimize their drink menus to increase profits. But his revenue is unstable. Sometimes he has a great month and then other times he sells nothing and sometimes that goes down. I'm Alex Ramosi. I own Acquisition.com, our portfolio of companies that generate hundreds of millions of dollars per year in revenue.
What I suspect Ben needs to work on is optimizing his funnel, fixing his offer. He's trying to sell a $30,000 thing to strangers who've never even worked with him before, which is pretty tough. And then once all that stuff's fixed, spending more on his actual marketing.
So the first thing I'm gonna do is dive deep into the business, and then I'm gonna break down all the tactics that he and you can use to scale your business to your dreams.
Hey Alex, I'm Ben, one of the co-founders of Unfiltered Hospitality, where we help hospitality operators build better beverage programs.
Tell me about the business.
So we are bar and beverage program development specialists. In 2024, we did 1.1 million in revenue, 123,000 in net profit, so about 11.3% in net margins. We've been in business for about four and a half years, but we've helped over 200 bars launch or elevate their concepts.
So what's the goal? What do you want to do?
My goal, 3 million by the end of 2025.
Big goals.
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Chapter 2: What are the challenges Ben faces in his business?
Ding, ding, ding. Number two, we have a super expensive cost to our customer, and this is a customer that probably be 1500 bucks, 2500 bucks, maybe $3,500 to acquire. So there's definitely an offer mismatch between what is being advertised and what they're selling if CAC is so high, or they just have atrocious sales processes.
So it's either an offer or sales process issue or both, and we're gonna figure it out.
What we've noticed is that our best clients are existing restaurants. And so we're considering refining our targeting down to just serving restaurants that are currently operational, making $4 million a year or more in revenue.
What could you sell for like $8,000 to $10,000?
Something that we've tried in the past and could easily bring it back is essentially a DIY, like we'll teach you how to do it. The uptake on that is what I would assume lower. People have a hard time like doing things if they're already not doing things.
I would think, is there a different thing that could be sold that was still in that price point that wasn't DIY? I mean, basically I wouldn't position it as DIY. I would just be like, we're not gonna fly out. The good news is I think this is super fixable. Let's do the quick recap of all the numbers you got so far.
2024 revenue, $1.1 million. Profit, $123,000. CAC, $11,800. Very high. LTV to CAC of 1.7 to 1. Marketing spend without salaries is $10,000 a month. Close rate, 66%.
So come here real quick, check this out. This is the $100 million scaling roadmap. Ben is at stage four, prioritize. And let me know if this sounds familiar. He's saying yes to anyone who would pay. He's got all these different types of avatars. He's getting way too many unqualified leads.
But he's getting people who are clicking, he's getting people opting in, but they're not the right types of people. Here's his next problem. The result of all this stuff is that he's got to specialize his product. He's got to make better free stuff and have better creative to boost the volume and add qualifications and friction, sounding familiar.
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Chapter 3: How can Ben optimize his marketing funnel?
isn't working. There was a little bit of an aha moment, but actually it makes a ton of sense. So I'm excited to try to find an opportunity to give our clients or prospects that will become our clients exceptional value right off the bat will one, make it a lot easier to go to the next step and also give us a lot of quick wins so that we're not constantly putting in all this work to get nothing.
I'm trying to think about the easiest way to do this. I would probably end up doing a rollover upsell. So we're selling step one of a multi-step process. That's what this is. And I would seed that up front. So when you sell the thing, it's like, listen, I'll be real with you. My whole goal is to give you this pricing audit. I'm just gonna easily ROI myself and everybody will be happy.
What I really wanna do is help you really transform the bar because you can only do a pricing change once. And then after that, what do you do? But even if we make this pricing change, great, we made you an extra 100 grand. But wouldn't it be cool to make an extra million? Now, I'm not promising that, because obviously your results will vary, depends on your market.
But what I can do is basically walk you through what it takes to truly build this into a staple that then also drives people into the food side. So it becomes a virtuous cycle. And so what I want to do is take your 5,800 and I'll credit towards the year. So if you're wondering, should every business have a back end and a front end or multiple offers? The answer is it depends.
And I know that's a terrible answer, but I'll tell you what it depends on. There's a certain amount of information that is required for somebody to make a decision. Depending on where they come in on that continuum of needing a little bit of information versus needing a lot of information, then there has to be more selling that must occur.
Then the next constraint that comes up in the business is cash flow. Well, if we're spending money to get these people in, we want to recruit that cash as fast as we And for somebody to buy maybe a $100,000 thing, it takes more time and more information to make that decision. And during that time, we're spending all this money in labor and advertising, but we're not seeing any return.
The idea of sometimes having a front-end and back-end offer is mostly just to pull cash forward, offset the cash outlay, which is another way of saying decrease the payback period or increase the cash conversion cycle. Lots of fancy words, but basically just get money back faster.
so that then everything after that's all gravy, you recruit the money, now you can go get another customer, and then this person's all in the ascension process. For example, his advertising was all brand-based and all inbound, then he could probably get away with just going straight to a more expensive thing because they've already consumed so much information prior to that.
But since he's almost entirely based on cold traffic ads, we have to lower the bar to get people to just take that small jump so that he can then prove himself to then take the big jump. Got it.
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