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

Alex Hormozi (0:00)

I'm about to help a complete stranger build a $7 million per year business. I'm gonna give him a step-by-step roadmap on exactly what he needs to do. And 90 days later, we're gonna 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 Kaleb. Ready to rock?

Kaleb (0:29)

I'm ready to rock and roll, brother.

Alex Hormozi (0:31)

All right. Tell me about the business.

Kaleb (0:32)

So first off, my name is Kaleb with a K. I own Keys Roofing Company.

Alex Hormozi (0:35)

Also with a K.

Kaleb (0:36)

Yeah. Alex, nice to meet you. So we are a premium and luxury roofing gutter and downspout contractor in St. Louis, Missouri.

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, so I'm at about 59 percent.

Alex Hormozi (0:56)

So you're doing like 20k a month ish.

Kaleb (0:58)

Yep.

Alex Hormozi (0:58)

Right now. Correct.

Kaleb (0:59)

The goal within the next three years is going to be 7-10 million.

Alex Hormozi (1:02)

Okay.

Love that. So how do you get customers?

Kaleb (1:07)

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 currently meet or people within my internal network.

Alex Hormozi (1:20)

So walk me through the money stuff.

Kaleb (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 18,000 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.

Alex Hormozi (1:49)

How many doors do you need to knock to get a sale?

Kaleb (1:52)

Man, I have a high close rate on that. So if I knock 20 doors, I'm getting a sale.

Alex Hormozi (1:59)

Yeah.

Kaleb (1:59)

Like it's like that.

Alex Hormozi (2:00)

Yeah. No, it's like that.

Kaleb (2:02)

It's like that.

Alex Hormozi (2:03)

It's like that. All right.

What's stopping you right now?

Kaleb (2:08)

So what's currently stopping me is having more salespeople. Because if I have two more salespeople, one project manager, I'm 100 percent confident, seven to 10 million is very doable.

Alex Hormozi (2:17)

All right. Hop on to the side and then we'll dive into it.

Okay. So the big thing that you right now have to deal with is like, there's one of you and you don't have that many, like it's a small business. Right. And I'm not saying that as a slimy thing, 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 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 it 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.

Kaleb (3:18)

Sure.

Alex Hormozi (3:18)

Does that sound fair?

Kaleb (3:19)

Yeah.

Alex Hormozi (3:19)

Okay. So if we have 7K replacements, what is the gross profit on a repair?

Kaleb (3:27)

I mean like 64 percent.

Alex Hormozi (3:30)

And that average ticket is 1,500?