Business Breakthrough: Reverse Engineer Your Business
Thursday, May, 1st, 2014 at 7:00 am by Mike J. Agugliaro
Hey, Mike Agugliaro, business ninja and founder of the $23 million business blueprint and service business warrior mastermind, greatest business mastermind on the planet bringing you today, yes, reverse engineering.
Some of you guys are like “What are we talking about? Are we building stuff here? Is that mechanical?” No, it’s not technical. It’s not mechanical. Some of you guys are like “I know reverse engineering. I’ve been doing it forever.” Really? What is it? How’s it been working? Are you crushing it? If you ain’t crushing it and you haven’t been growing 20%, 30%, 50% and your pocket is showing it because your personal income is just massive, and you got tons of free time and wealth, then maybe you’re reverse engineering that you’ve been doing is broken.
Let’s clear a few things up. Reverse engineering basically is looking at the outcome I want. I want to make a million. I want to make $500,000. I want to make $100 million, whatever it is, and then, it’s backing into the numbers and all the pieces of the numbers to figure out my landmarks, my lines in the sand. Once I get it all the way back, I execute my plans, and I move forward towards that target. Here’s what happens all the time and a lot of people go wrong is because they reverse engineer, but then, they have a bad month. If I have a bad month in January, what do I have to do in February? If you act like your budget didn’t change or your reverse engineering didn’t change, that’s part of the problem. You needed to make an adjustment. If I needed 500 calls in January, and I got 250, and I needed 500 calls in February, how many do I need in February now if I ran short 250? I need 750. I have to catch up at some point.
The other point of reverse engineering is a lot of times guys reverse engineer but they count on “This is how many trucks I’m going to run. This is my average invoice. This is my conversion rate.”, but guess what? If you have an employee quit, and you need 5 employees, and you’re down to 4, do you have to change everything again? Yes, you do. You can make that up by if you get those 4 guys to convert 5% more or $500 more, you can close the gap of the one missing, but sometimes, that’s not easy to do because maybe your guys are already capped out on the knowledge or the ability or skillset they have.
The second thing that you have to pay attention to is “What about my call volume?” When I look at my call volume that I need, I’m always projecting 10% more. Every day when I say … If I need 10 calls, you know how many I need, I need 10% more than 10 calls, and I’ll you why. Good, you answer it. Why? What happens to 5% of them? 5% cancel or reschedule all the time. Life gets in the way, things happen. Also 5%, they’re okay. My philosophy has always been, they’re okay to get rescheduled once. You can’t reschedule them twice, you’ll start making enemies and get a bad reputation. At the end of the day, that’s all you have in business is great reputation will grow a company. You need marketing, great marketing with a great reputation to do some quantum leaps, but if you have a bad reputation and great marketing, you got a death sentence. I’ve seen it over and over.
Let’s just do a recap. Reverse engineer. Uh-oh, January didn’t work out. Readjust my reverse engineer. Uh-oh, how do I fix things? I can fix it. Make sure you’re booking 10% more. If drop off rate is more than the 10% and 5% reschedule because maybe it’s summertime and 90 degrees. People go “Leave the faucet broke, I’m going to the beach.” If you see that there’s a reschedule rate of 8%, now you’ve got to go 13% more. You’ve got to adjust these numbers. Big problem is everybody tries to follow everybody’s philosophy and numbers, like the numbers in Texas and the numbers in Australia are going to be the same numbers for New Jersey. Really? I mean, come on. Give me a break. Different people, different mindset, different trends. Ridiculous thinking. Crazy thinking.
The other thing that I want to pay attention to here along with the call volume and the drop off and my average invoice and my conversion rate, I have to also make sure to remember if I drop a guy I have to make the adjustment there too. What if I add a guy? Maybe, I can push it further and I can reduce things a little bit. Nothing … What is stationary in the numbers? Go ahead. What is stationary? I wish I had a cricket thing, like cricket, cricket, cricket. No, nothing is stationary. Everything moves, and most of the time when people say “You don’t know your numbers, that’s why you’re losing.” No, it’s not knowing your sales price. I know a lot of companies, some of you watching this video, you know you selling price, and you’re still losing. What is the problem? The problem is you don’t have to … You also don’t have to know what’s direct cost of this. So many people are like “I got a GP…” All of sudden, it’s like “Come on.” Get to the simplicity of things. Look at the simple side of things. I need to make this tomorrow. This is where I’m at. Raise this, it raises that. Lower this, it’s going to lower that. Sometimes, I can make a fortune and lower things to sell more.
Remember, we talked about this before. There’s a couple kind of models out there. There’s quantity model. There’s quality model, and a couple places in between. Just to kind of pull this all back together for you. I could kind of rant and rave about this a little bit, but I want to at least open your eyes, and sometimes these videos give you an incite for you then to further think or reach out to me about the video and say “Hey, help me understand this a little more. Maybe that’s why my system is broke.” I’ve got to tell you, over and over again I hear companies doing over a million, a million five, two million, and the owner is starving, has no money, can’t part with $5,000 or $8,000, can’t pay himself. I’m like “Oh my God. That’s insane.” Twenty years ago, I was making $100,000. I didn’t even know what the hell I was doing and Rob was making $100,000 with me. We were partners. We were only probably doing $500,000 or $600,000, and we were taking $200,000 in salary. We were doing great. We were working our ass off, right, but we were making money. Some guys are doing over a million something dollars, and they’re making no money. Something is broke. If it ain’t the selling price, and you’re not reverse engineering it, guess what? Let’s fix it. Find somebody who will fix it.
I was telling someone the other day they’re still not fixing it. They’re in the same associations. They’re doing the same stuff. You know what I said? You’re the dog that’s got used to sitting on the nail. You’re just used to it. You’re comfortable. You’re not getting no change. You’re still suffering, but you’re sitting on the damn nail. Step off the nail, and see if there’s a different way. You have to ask different people to get a different answer. I’m not looking for an opinion. I’m looking for a fact analysis on what I should try to change. Is there anything you could change once and you’re done forever? NO. You change it once, you see sometimes it goes back, rechange. Sometimes, you go ahead, keep it and starts to adjust. Change again. There’s a lot to this video. You should rewind this video when you’re done. You should watch it again in slow motion so it’s kind of like rreevveerrssee eennggiinneeeerriinngg. You should write a lot of notes and then go back in, step back, and then look at things from a further view and say “Okay, I see what he’s talking about. I’ve got to rethink, relook at these things.”
Big mouthful today, but I tried to go quick because I don’t want these to be 20-minutes videos. I’m wishing you a better and great day today and everyday, you know that. I only have 1 mission, and it is a mission that I am on. I want to get all service companies to massive wealth, tons of freedom, and market domination. That’s my goal. That’s my story, and I am sticking to it. Have a better than great day.