SPEAKER_06 0:00

One of the secrets to my success was that we built a team down in Tijuana, Mexico, which nobody even at the time definitely thought about going down to Mexico for design and development help. And um, so then I decided in 2017 I was gonna launch Dude and help other agencies get access to this hidden talent pool and uh grew that company uh or we've been you know been growing dude ever since. 2018 was kind of our breakout year. We went from uh four or five to twenty nine staff. Now we have over 90 people. We won uh we won an award last year for minority owned business uh of the year, as well as a silver, which is like second place for most innovative company under 100 people. Um excited about that.

SPEAKER_05 0:42

And so this year we should double what we did last year, uh which is fantastic.

SPEAKER_06 0:48

So breaking that multi-million dollar mark. And the best part is that we're very profitable. So that's why I'm excited to share with you guys all the things that I've learned because it hasn't always been like this. So, you know, I'm super excited to share uh how all of you guys can make more money because you guys deserve to make a lot of money. This business is very, very difficult. And like you mentioned, you all have a skill set that not many people on the planet have, and you deserve to be paid adequately for helping these other businesses.

SPEAKER_02 1:18

If you have a vision for the agency you want to build, then we want to help you build it. Welcome to the Agency Hour Podcast, brought to you by Agency Mavericks.

SPEAKER_07 1:28

All right, welcome, welcome, welcome to Agency Hour here live in the Digital Mavericks Facebook group. My name is Troy Dean. This is Pete Perry. Pete Crispy Butter Perry. Crispy Butter Perry. I'm gonna get you a bomber jacket, right, with the agency Mavericks logo on it and crispy butter written on this on this breast here. Uh crispy butter. Like for those of you who've met Pete in real life, you know he's like the furthest thing from crispy butter you can get. But he's uh he's just got that voice, man.

SPEAKER_03 2:04

You uh what did you Silence is Golden on one of the Silence is Golden um episodes? You described me as 10% grumpy.

SPEAKER_07 2:12

That's right. 10% grumpy.

SPEAKER_03 2:14

Now that you've worked more with me, would you would you raise that percentage?

SPEAKER_07 2:17

Oh, yeah, it's at least 33% grumpy now. Well, what I realized is you're not actually grumpy, you're just from New York. Well, that's probably true, too. Yeah, but the other the other New Yorker who I think is more grumpy than you is Victor Ramirez, and he's not grumpy at all. He's just really from New York, right? He's just like yeah, he it's just it's a there's a certain kind of I remember when I was in Manhattan for the first time, there is a certain directness that you get from people, which I really enjoy because you know exactly where you stand. There is no room for interpretation, right? You're a jerk means you're a jerk, right? It's like there's no room for interpretation, you know exactly where you stand. Today is a very exciting day because we have a very special guest joining us. And I'm really excited about this topic over the years. I want to I want to ask Pete this question. How have you here we go? How it's not it's all right, it's not your name, it's nothing tricky, it's not your name or your date of birth, right? It's it's fairly straightforward. How have you managed to price projects in the past and not go broke? And I'm making an assumption that you've managed to do that, right?

SPEAKER_03 3:21

So I so this I'm very interested in hearing our speaker speak about this because I've always uh really focused on value pricing. So I try to get from the client what their budget is and try to kind of make that work and make it profitable. And whether I'm I mean, I know I'm profitable, but I don't know how profitable I really truly am. I think that it I could be doing a much better job of the pricing. And uh, I'm really interested in hearing our speaker present about this topic. Do you track time?

SPEAKER_07 3:55

Do you track your team's time?

SPEAKER_03 3:57

My team does track their time, yes, yes. Um, but I don't necessarily do a great job at the end of a project of going back and uh figuring out figuring out, you know, were we really now? I have the advantage of um I'm using Filipino stuff. So when you're paying eight, ten dollars an hour, it's almost hard not to be profitable.

SPEAKER_07 4:19

Yeah, the economics make sense, yeah. Yeah. Um it's I I I think it's interesting the things that we don't factor in uh into pricing, and I'm we're gonna unpack this in a moment. But also, what I'm really excited to see here is the real cost of developing, designing and developing a website, because I think most of us wing it. I know I did for years. I kind of took it, I went, Well, I think they've got eight grand. I think I can get eight grand out of them without damaging the relationship, and I reckon I can do it for eight grand and make some money. And then you kind of realize six weeks into the project, I'm gonna stab this person in the face because I'm losing money every day because they haven't got their content and they keep moving the scope, and now they want a fucking membership site and they want e-commerce, and like I'm gonna throw myself off a building or stab them, one or the other. Yeah, no, and that's what happens when you guess, right?

SPEAKER_03 5:07

So that's exactly what happens. Um, especially if you don't have those boundaries in place for go creep and all that stuff.

SPEAKER_07 5:14

You have to have that in place too. And who has those boundaries in place when you're starting out? Because you just want to do everything you possibly can to keep the client happy because they've got the money, right? Right.

SPEAKER_03 5:23

And you have you have a little lizard brain with scarcity. That's right. Yeah.

SPEAKER_07 5:28

And um, and and I, you know, I learned this from reading Pitch Anything from Orin Claff. He's like, the first thing you've got to do is is reframe the relationship so that you're the prize, not them, even though they've got the money. Because remember, you know, for those anyone watching or listening, if we haven't offended you yet and you haven't tuned out, anyone watching or listening, remember you you know how to do something that less than 0.01% of the population of the world know how to do. And yet we continue to give it away for free or not enough money to be profitable. So, nice segue. Without further ado, I think I would like to welcome to the stage my good friend, founder, CEO, and extraordinaire, entrepreneur extraordinaire from uh Southern California and running dude agency. I don't know, actually, I don't know if he's in Southern California or Mexico, but he'll correct me. The one and only Chris Martinez, come on down. Hello, hello, nice to see you all again. I like the what I like the turn and the wave, like he's addressing the room.

SPEAKER_06 6:29

Well, I am looking out a window right now, so I'm addressing some construction guys across the way.

SPEAKER_07 6:34

Well, you have to do whatever we have to do to to emulate the live experience, right? Now that we're in a virtual world.

SPEAKER_06 6:42

I was having a lot of fun listening to you guys go back and forth bantering. Uh the Pete Pete, the guy that called you Krispy Kreme as opposed to buttercream or whatever. That was hilarious. I was dying. Already enjoying this this uh this event that we're hosting today.

SPEAKER_07 6:59

Well, that's the main that's the main thing. As long as uh as long as you're having fun, that's why we're here. Uh now for listen, for those who have no idea who you are and what you do, uh just give us the too long didn't read version.

SPEAKER_06 7:09

Yeah, sure. So I started an agency back in 2012, uh, grew that agency. We had over 200 and something clients on retainer, uh, and then decided that I was gonna launch a essentially an outsourcing company in 2017. One of the secrets to my success was that we built a team down in Tijuana, Mexico, which nobody even at the time definitely thought about going down to Mexico for design and development help. And um, so then I decided in 2017 I was gonna launch Dude and help other agencies get access to this hidden talent pool and uh grew that company, uh, or we've been you know been growing Dude ever since. 2018 was kind of our breakout year. We went from uh four or five to twenty nine staff. Now we have over 90 people. We won uh we won an award last year for minority owned business uh of the year, as well as a silver, which is like second place for most innovative company under 100 people. Um excited about that.

SPEAKER_05 8:06

And so this year we should double what we did last year, uh which is fantastic.

SPEAKER_06 8:11

So breaking that multi-million dollar mark. And the best part is that we're very profitable, so that's why I'm excited to share with you guys all the things that I've learned because it hasn't always been like this, and I've been able to kind of see what's the some of the main reasons why. And I ran my agency, it was primarily a web development agency. Um, so you know I'm super excited to share uh how all of you guys can make more money because you guys deserve to make a lot of money. This business is very, very difficult. And like you mentioned, you all have a skill set that not many people on the planet have, and you deserve to be paid adequately for helping these other businesses. 100%.

SPEAKER_07 8:53

Where where are you based? Are you based in California or Mexico?

SPEAKER_06 8:57

Yeah, so I live in Mexico, so I've been living in Tijuana for about three years, a little over three years, actually, about three and a half. Um, and but our company is based in the States, so I go back and forth pretty frequently.

SPEAKER_07 9:10

Um the agency, the agency that you had before, dude, was in California?

SPEAKER_06 9:15

Yes. Uh so our company is technically still based in like the headquarters is in California. Uh and and so I was living in San Diego up until 2018. Uh, and then I met my fiance who also is our CFO. And uh so we moved in together in 2018 and uh been living here ever since, and I love it.

SPEAKER_03 9:35

That's that's how it's gonna be when you get married, too. She's still gonna be your CFO.

SPEAKER_06 9:39

CFO, that's right. Um well, I was joking, you can't spell finance without the word fiance.

SPEAKER_07 9:44

So that's great. Why Mexico? Like when you you say you're in San Diego, you're building a team. Why did you yeah?

SPEAKER_06 9:54

So, you know, like everybody in the states for the most part, when we think of outsourcing, we think of going to the Philippines or India or now Europe, Central Europe. And I like to say, like, we always think uh of looking to the left and to the right. We never ever think about looking up or down. And so I was living in San Diego at the time, I'm originally from Los Angeles, and I was like, you know what, I bet you I can find a team down in Mexico. And granted, I don't really speak Spanish very well, definitely don't understand the culture, but it just had a hunch. Um, and went across the border, ended up building a team, and you know, a lot of bumps and bruises along the way, but figured it out. And the time zone was absolutely crucial for us because prior to moving our staff down to Mexico, I had people in the Philippines, and that first two years of running their company, I was up. I was my day was 6 a.m. to 1 a.m. every single day, yeah, every day. Yeah, and you can't run those hours. And what was the biggest problem? Um, and we still have a few staff in the Philippines, but the biggest problem was that we would have issues in the middle of the day, and then my team would be asleep. And how am I supposed to tell my customer, well, can you just wait until they wake up? Like some problems you just can't wait, right? You got to be able to fix it right away. Um, and I'm not super technically inclined. And so that was really hurting our customer experience, and that was ultimately stifling our growth. So that's why Mexico was an absolute godsend for us. Plus, I, you know, I was driving across the border every single day. Um, and it was only about a 30-minute drive for me.

SPEAKER_03 11:25

San Diego to Tijuana is a half hour, yeah.

SPEAKER_06 11:28

Stone throw away, you know. So yeah, so um, you know, I was driving down every day, we had an office down there, and being able to sit face to face with people was fantastic. Um that was you know really what helped make the difference for us.

SPEAKER_07 11:39

I I I've entertained, we had one of our staff was doing a night shift at one point when we were, I don't know, doing something that were manning live chat during one of our launches or something. I felt really bad. I'm like, I don't want you to work nights, I don't want to work nights, I don't want you to work nights, right? Because it completely screws up your day, you're just exhausted, you don't get to spend any time with your friends or family during the day anyway, because you need to sleep. And so I don't I don't expect anyone to work nights because I don't want to do it. And um and I don't think it's good long term, I don't think it's sustainable long term, I don't think it's good for people's health to work uh to work night shift anyway. Um so you you so you start building a team in Mexico when you've got the agency. How did you how did you approach pricing when you had the agency?

SPEAKER_06 12:18

So we had productized services, so we essentially had packages that we were selling over and over and over. I didn't learn the things that I'm gonna teach you until recently. Had I known these, I would have completely changed my pricing because while we had a ton of clients, um, we were not very profitable back then. And I what were you doing?

SPEAKER_07 12:40

What services were you?

SPEAKER_06 12:41

So what we did was website, ongoing support, content. So we did blog posts every single month. What else did we offer? We did Facebook ads for a little while, and then just general like marketing strategy. Like we had a whole roadmap that we would take them through and helping them to create their value proposition and things like you know.

SPEAKER_07 12:59

So a lot of us didn't even you and I didn't even know each other back then, right? It's like it's I didn't even know that you existed.

SPEAKER_06 13:05

I did not know that coaches for running an agency existed. You know, this is back in 2016-2015 when I was really hammering the websites. Um, and we had lots and lots of projects going on in any any given time. It was a very, very, you know, labor-intensive operation. I loved it, I absolutely loved it. Um, but looking back, of course, there's so many things that I would have done differently, primarily with the pricing. Yeah, and and part of the issue. Well, I don't know if you want me to start kind of like yeah getting into the details. Totally, absolutely, you know, like Pete, I think you were mentioning this, like we just kind of guess when it comes to how we're supposed to quote out a project, a new project, for example. So we like, ah, this one's kind of similar. You know, I'm gonna, I think it's gonna be around the same, right? And so you're just kind of throwing it to the wall, hoping that it sticks. And the real reason why we don't make enough money with our website projects is because we just flat out don't have the right data. And like Pete, you mentioned that you guys are time tracking. I would say that you're probably in the five percent of agencies that are diligently time tracking. And I'm talking about nobody is is is missing it because what happens a lot of the time is that people will time track and then they get lazy and then they don't do it for like a week, and we are too busy doing our own thing. So what happens now? We're not collecting the right data, we're not we're missing out on like 25% of the data that we need. So we need accurate data. That is the biggest reason why we don't time track. And I'm I'm gonna explain it to you in the context of a restaurant analogy. So I don't know, did any of you guys work in a restaurant ever? Okay, I think I did. I worked in a bar, but not a restaurant. Okay, so it's similar, right? So when I was uh in high school, this is in the mid-90s, I worked at Chuck E. Cheese. I'm sure you know what Chuck E. Cheese is. So Chuck E. Cheese, let's call it a pizzeria. Um it it was an absolute cash cow. Like I worked at the register, and you would not believe how much money flowed through that place. So on a Friday, Saturday, Sunday, uh below our register, we had this little box. It was a wooden box with a little slot inside of it, and there was a locked on the door. And so anytime you had a bunch of hundreds or twenties, you had to drop them and drop them underneath, right? And and so um there were five registers, each of them had their own little cash box. On a Friday, Saturday, Sunday. The manager would have to come by and empty out that box because it would get so full that you literally could not shove more hundred dollar bills in there, they would have to clean it out three times an hour. Three times an hour. Whoa, that is an insane amount of cash.

SPEAKER_03 15:58

So, this is before that's an insane amount of screaming children, is what that is.

SPEAKER_06 16:03

See, when I when they came to me, the kids were already running around going crazy. I only had to deal with the adults, who I think was actually worse. But so the the point of the story is that there was so much money flowing through this place, and they were able to pay their managers a lot of money because they had a lot of cash and profit uh as well. So they're the general manager of the store, he told me this young guy is like in his mid-20s, he was making 80 grand a year managing a Chuck E. Cheese in 1997.

SPEAKER_03 16:34

Wow.

SPEAKER_06 16:35

I don't know what the equivalent of that is today, but it's at least 140. Oh, at least at least for a 20-something year old kid managing a pizza place. Now, he wasn't just some dummy off the street, he went to law school, decided he didn't want to do law, they recruited him. All the other managers were making at least 50k, right? And the the reason that they were able to do this is because they had such good, uh, such good systems and they managed their numbers. So when I ran up an order, like the most popular thing was a package, it was like a large Supreme pizza, breadsticks, four sodas, and tokens. Uh, it was like 40 bucks. So 40.

SPEAKER_03 17:15

This 40 in 1997. They play games with the tokens, Trick.

SPEAKER_06 17:18

Yeah, the tokens for the coins for the machines. Um, the guy who started Chuck E. Cheese, by the way, Nolan Bushnell, he was the one of the founders of Atari. So that was the reason why they started uh Chuck E. Cheese showcase the games. Um so so ultimately, of all the things that I was ringing up for 40 bucks, the tokens literally are worth nothing. Um, they're you're mainly paying for the pizza. So a $30 large pizza in 1997 is really what you're paying for.

SPEAKER_03 17:44

Right.

SPEAKER_06 17:45

Um, so when I rang up the order, the it would go back to the kitchen, and then the cooks they had a little printout. And the printout said if it's a this size pizza and they have these toppings, this is how much they get in weight. So if you have a large supreme pizza, you get this much weight in pepperonis, this much weight in bell peppers, this much weight in mushrooms. So it would take longer for them to weigh out the food, yes. But the the Chuck E. Cheese knew that their biggest expense was going to be the food, the ingredients. So they had to manage the food costs. Food goes is perishable as well. So they couldn't overestimate, they couldn't underestimate, they had to get it perfectly right. So um that is ultimately why Chuck E. Cheese was so profitable because if they were selling a pizza for 30 bucks, they were gonna make damn sure that that was gonna get out the door into the customers for five dollars, and then they could reinvest those profits back into hiring the best people possible so that they can could keep this machine running and everybody is making a ton of money. So, what does that have to do with the web design business? Well, ultimately, we also have food costs. So, in our business, what do you guys think are the ingredients? Yeah, the people the team, the people, really it's time, it's time, guys. So we have to manage that time to the second. And there's a quote that I found uh and it goes, uh, take care of the seconds, and the dollars will take care of themselves. It's so unbelievably true. That's why we have to be time tracking. Everybody on your team has to be time tracking, and they all have to be doing it consistently. Now, time is not the only way to do your pricing, though. I do want to say that. So, like value-based pricing, absolutely the best way to do it. But at the same time, you can't be naive about the time that it's gonna take to do a project, even though a client says my budget's a hundred grand, and you're like, Okay, yeah, I can absolutely create a project for a hundred grand, you do need to double check and make sure that your labor costs are not going to exceed that. In general, I tell every agency owner, simple rule of thumb, if whatever you're gonna charge the client, you need to be able to get that project out the door, everything included project management, design, development, copywriting, everything for 30%. 30% is the goal. So if you sell it for 10, you need to be able to get it out the door for three. Yep. That is a very, very easy rule that everybody can should be able to understand. Okay. So, how are you going to guarantee that you can get it done for 30%? You go back to your time logs and you say it's way easier if you're productized too. But you go back to your time logs and you say, Okay, this was what took took this many hours. Now, what we do internally, and I know that most people don't have the uh ability to do this, but I highly recommend it. At least once a quarter, you run a report with your accountant, or if you have you know a fiance that's your CFO, that helps too. You run a report and you say, Okay, so this is how much we spent in labor, and this is how much we charge the client, and this was the actual margin. If you're if your staff are on salary, still break it out into an hourly rate. And that way you can basically pair up hours and time. And you can see to the penny. I know at dude, and this is what's helped us to grow, I know how much money we make with every single customer because we do you know flat rate for every everybody, and um, we run a report every month, and I can see how many clients, how many hours each client is using, how many, what team members were contributing to those hours because each team member has a different salary, or lots of the team members have different salaries. So I can see exactly to the penny how much we spent on every customer, and then I can go in and be like, hey, we need to give this person an upsell. This person's fine, you know, this person's in the red zone. We have a red zone thing. Um, and and so like you guys can do the same, it doesn't have to be as in depth with Me because my business is a little bit different now than your guys', but you need to look to look at those numbers. And that data, that data will give you what you need so you can make better decisions moving forward. Awesome.

SPEAKER_07 22:11

I got two questions. Can I can I go? I got two questions I want to do. Absolutely. Absolutely. One, the lizard brain needs to know the answer to this question. What do you use to track time for all your staff? Fantastic question.

SPEAKER_06 22:21

I was literally just about to say that. So we use Fresh Desk as our ticketing system because we have a ticketing model. So everybody submits a ticket inside of Fresh Desk. Uh literally each agent goes in and they click their, they start their time and they stop their time. We check it every single week, too. So each team member, team leader is responsible for checking all the team members. But if you don't have something like that, click up has a built-in time tracking feature. It does. Yeah, yeah. Um, the people that I know that use it absolutely love it. Yeah, yeah.

SPEAKER_07 22:50

So so how do you here's the thing about um how do you get a how do you position this to your team so that right because because here's the thing, right? If I was working for you and you said to me I have to track my time, I'd I'd be like, you know that Iron Maiden song, run for the hills, yeah, that's what I'd be doing, right? Because I don't like to be micromanaged, I like to feel autonomous.

SPEAKER_06 23:16

Exactly. And this is where the leadership skills really come into play. I'm gonna ask you guys, like you, you you Paul both of you probably have this already answered, but like if you were to ask your team and you ask them what's the company mission, do you think that everybody would answer the same?

SPEAKER_03 23:35

Uh so with agency mavericks, yes, I do. I do think that we would all some of us, some of them would probably have to look it up, but they they know where to look at least. But with my team, um, probably just my what I would consider my leadership team, which is one other person. Yeah.

SPEAKER_06 23:53

I highly recommend that if you've not tried this exercise, do it. It will be an absolute rude awakening for you, but it will be one of the best things that you can do. This is where people start to feel like there's micromanagement happening because they don't understand their role in the bigger picture of what we're trying to accomplish. At dude, we are trying to change the way that people look at Latin America for design and development. It's a very, very big mission. We have three missions, actually, but that's one of them. We want everybody to look at Latin America as the number one place to go for design and development. Love it. And we know that that is not the case right now. It is our job as the leaders, as the CEOs of the company, to convey this mission to our team members. Once they understand that they are playing a role in a much bigger mission that we have as a company, you it's much easier to convey this message of here's why we need to time track. So it's not, hey, we need to time track so that we can make more money and Chris can go take another vacation, or Chris needs to go buy a new car, so you guys need to work harder. That doesn't really inspire anybody, you know. That that's bad leadership. I think we can all agree on that. Yeah, it's we all deserve to uh grow our or we want to grow our company. So the more that we make from with our clients by serving them, the more we can reinvest back into the company. That means getting you guys better equipment, obviously, getting you guys bonuses. That also means creating new job opportunities. The better we do as a company, the more that we can reinvest in hiring new people and creating new opportunities for people that are going to be positively impacted by our company. Our staff, they absolutely love working for our company. They they have never found a work environment like what we provide. So they're very passionate about anything that helps us to grow. So I don't like I'm not one of these CEOs that has a problem sharing sales data with us or like revenue or profit. Like we are very, very transparent about that. Now, what helps is I have amazing people and they we screen them and we know that they have this internal thing where they feel an obligation to serve other people, they're willing to sacrifice themselves for the good of the team. That's what we look for in our team members.

SPEAKER_07 26:19

A couple of things I want to uh uh um touch on here. Um Kyle Kurakawa says, never knew about the 30%. That's actually mind-blowing. 70% profit sounds quite nice, but how do I not feel like I'm stealing from a new awesome client? Let's be clear the 30% is your cost of delivering the product. So the 70% you have left over is gross profit. Gross, right? Out of that 70%, you have to run the business. You've got to pay rent, you gotta pay insurance, legal fees, you've got to pay yourself, you gotta pay yourself yourself, any non-production staff. You taught me this in the pro forma, right? So you've got to pay all the, you know, uh the office equipment, like all the stuff that you gotta pay to run the business. And the idea is that out of that 70%, you pay all your running expenses, you should end up with at least 30% net profit at the end of the day after you've paid yourself a wage or a salary, right?

SPEAKER_04 27:12

Yep.

SPEAKER_07 27:12

Um, so just wanted to clarify that for Cobb. The other question I wanted to ask is do you share what profit do you share with your team? Do you share gross or net?

SPEAKER_06 27:19

Uh we share net. We share net.

SPEAKER_07 27:21

Like numbers. So numbers, you're like so.

SPEAKER_06 27:23

At the end of the year, we'll share the net.

unknown 27:25

Right. Yeah.

SPEAKER_07 27:26

So you can share the numbers or actually share the profit?

SPEAKER_06 27:30

Uh we'll share the actual number. We'll share like what we made as a company. Cool. Because it's been negative before. So I want them to know. Hey, we suffered. Um, we also we also bonus out everybody. So this is what I want, I want to be very clear on the differences between gross and net, because I didn't learn this until fairly recently. So gross is ultimately in our business, gross is what's left over after you're paying your production labor staff and other like credit card expenses, credit card processing expenses, things like that. But let's just say for the most part, it's it's labor expenses, right? So, and this is production labor. So, anybody who's touching deliverables that are being done for clients, that's considered production labor. Project manager? Project manager. I consider that production labor.

SPEAKER_07 28:20

Right, because if you weren't delivering the thing for the client, the project manager wouldn't be in the building. It wouldn't exist, they would not exist.

SPEAKER_06 28:25

So uh production labor, typically you want to keep that at that 30%, and it'll grow as your revenue grows. So let's say you're 10,000, 15,000, 20,000, your production labor budget also grows as a percentage. So 30% of 10,000, third three thousand, thirty percent of twenty thousand, six thousand. Now we have more budget to reinvest into the team. Okay. What's left over after that then? Uh you you're uh deducting your administrative and administrative and operating expenses. Within that is your salary as a CEO. Uh, you know, other um COO, if you have a COO, finance director, HR, like all those other people who are helping you to run the company. Rent is included in that as well. And then what's left left over after that is your net profit. Now that bare bare minimum should be at 20%. Think of the net income as the salary that you pay to your company. Think of your company as an employee. Every income, every employ every company has to have their comp every business, their company has an employee, right? That's the company is the employee. That's kind of like the easy way that I think about it. So I'm gonna pay my company, my favorite employee, at least 20%.

SPEAKER_07 29:49

Wow, that's really interesting. Ben Monk asks sales and marketing. I think what he's asking is marketing and sales commissions, what are they?

SPEAKER_06 29:58

Um, so this is where it kind of is an art and a uh and not necessarily a science. I consider sales and marketing as part of my administrative costs. Yeah, same. Okay. Um, I know some people that will roll it into their cost of goods. So it it really comes down to however you want to do it. If if it's me, I just keep it as an admin operating expense.

SPEAKER_07 30:20

Um the the I it's gotta be it's just gotta be consistent, right? Like if you oh yeah, so we uh we used to treat our Facebook ad cost as a cost of sale, but we don't now. It's it's now it's an it's an operating, it's an admin operating cost, right? Even though it's significant, it's a because I'm like, well, that's just a part of running the business, right? That's not that doesn't the the our main cost now is our coaches. Our main cost of sale is our coaches and the development of our IP and our product development. So we have Kat who develops all of our playbooks and takes our IP and turns them into teaching frameworks. She's a cost of she's a direct cost, right? She's basically a cost of sale. Uh our click-up implementation guy who's building out all of our kits in ClickUp, that's a cost of product because that's what we're actually selling to our clients. The coaches, they're a cost of sale, right? Because that's that's what it's costing me to produce the thing that I'm selling. Advertising, we now just put that below that line so it affects our net profit, not our gross.

SPEAKER_06 31:18

Yeah. Is anybody still watching? Because I know we're talking about really, really boring stuff.

SPEAKER_07 31:22

Like our we got our viewership just almost doubled. We got 60 people watching this live right now.

SPEAKER_06 31:27

Awesome, I love it.

SPEAKER_07 31:28

And guys, I know that this is people are frothing at the mouth, and the other half are asleep and they don't even know what they're looking at, and that's totally fine.

SPEAKER_06 31:35

Well, for everybody who's still awake, thank you so much for paying attention. I know that this isn't the most exciting things, but I can tell you this is what separates agency owners who are making a ton of money and not having to break their back to do it, and agency owners who are struggling and not getting paid what they deserve.

SPEAKER_07 31:53

I always call you dude, which is weird because you're own a company called Dude. Uh, can I just say, right, that I know a lot of people think this is not a lot of people think this is kind of like boring stuff and or not not sexy, right? Check this out. When you're sitting on the beach, you want to talk about sexy, right? When you're sitting on the beach sipping a pina colada with your fiance and your kids or whatever it is, and you and money is landing in your bank account, right? That doesn't get any sexier than that, right? Absolutely. Anyone who's in that position has been through the stuff that we're talking about now. So you want to talk about like having the you know, what is like the sexiest thing you can talk to entrepreneurs about? It's about having recurring revenue land in your bank account without you being on the keyboard and without you being on the tools. Well, you don't get there without doing this work. So this is the foundational stuff that allows you to go have a good party and not go not go broke. 100%.

SPEAKER_06 32:44

You know, so since since April, and I'm not trying to make you jealous, Troy, because I know you're locked down. Uh since April, I've been to Puerto Vallarta, I've been to Watulco and Oaxaca, I've been to Chichenitsa, I've been to Cancun, I've swam in two cenote's. I mean, and like, and I'm getting married next month, and I'm gonna be taking the whole month of October off. Cenote's are like the most amazing thing ever. One of the best things that you can do in good. Um, so yes, this is absolutely if you can master these things, this lifestyle that we all have like dreamed of since we started the agency, it's a hundred percent possible. Just gotta get really deep into the non-sexy stuff. Um, so anyways, let me let me get back on track. Um unless there's any other questions. Oh, dude, I'm here to distract you. That is my job. So, you know. So let's do let's just do some uh a really simple math exercise. I want you to take what you want to make personally make this year. So I'm just gonna do a hundred thousand dollars. Like that's that's the goal for this year. 100,000 bucks, and I'm gonna take a hundred thousand and I'm going to divide it by the number two thousand eighty-seven. Bonus points if anybody knows what two thousand eighty seven stands for.

SPEAKER_03 34:00

Number of hours in a year, yes.

SPEAKER_06 34:02

So if you work a 40-hour work week, which we know not.

SPEAKER_03 34:05

Where'd the seven come from? I don't know. 2080.

SPEAKER_07 34:08

It's 20 years. You take it's because you take a half-hour lunch break, right? Um, yeah, exactly. The oh does that include four does that include annual leave? The 2087 hours. Is that America?

SPEAKER_06 34:18

We don't get America annual.

SPEAKER_03 34:19

What is it? 4552. 45.

SPEAKER_06 34:24

Okay, you can dig in by 2080, it doesn't really make that big of a difference.

SPEAKER_03 34:26

Uh, on when the map is saying I'm telling Troy where the number comes from. It's right 40 times weeks.

unknown 34:33

Okay.

SPEAKER_06 34:34

If I want to make $100,000 an hour uh for the year, then that means that I need to average $48 an hour. I don't know if you can see that on my camera. Yeah, there we go. Okay, yeah. So you should not be doing anything that's less than $48 an hour, just so you know. Oh, yeah, I agree with that. So when you're looking at how you personally are investing your time, if it's less than $48 an hour, and and I understand when we're starting out, we have to do a lot of the grunt work. I have clean bathrooms, I literally have painted my office on a weekend. So I know what it's like to have to do that, but you need to get to a point where you are not doing work that's below what you deserve to be paid.

SPEAKER_03 35:13

And guess what else lowers your hourly rate? Working more than 40 hours a week.

SPEAKER_06 35:19

Absolutely. So if you're working more than 40 hours a week, that's gonna lower it. The goal though is it okay if we work less hours and make more money? Is that okay? Like, can we give ourselves permission to do that? Yeah, it's totally okay. So, anyways, getting back to the time tracking. Um, another tool that I that a friend of mine, Liam, runs, he runs a company called Time Doctor. That's another one. Um, Harvest is the elephant in the room, it's very complex, integrates with your accounting system and everything. Yep, click up. We already did talk about it. And then, yeah, so that those are the big tools. So if you are not doing time tracking now, you must do it. Please make a commitment to yourself that you will do this immediately. And I'm just talking about production labor. Don't feel like you have to do it for your sales time. It's important that if you do that, you should do that. But for the sake of this conversation, just track production labor hours. Now, if you get into a position where you have team members that are just refusing to do it, you're gonna have some hard decisions to make because these might not be the team members that are gonna help you get to that next level.

SPEAKER_07 36:29

That's right.

SPEAKER_06 36:30

It's very, very hard to straighten out your numbers and be able to make good future decisions without good data. Yeah, so you have to have people that are gonna be on board with that.

SPEAKER_07 36:41

Yeah, if anybody has a question from Michelle Perry they want to talk about. She says, Do you have to go over the border for affordable help? Would you be priced out? Rochelle, here's what one thing I learned when I started uh hiring people in other countries. Uh yes, the economics make sense, but also the numbers make sense. It's about the talent pool. So don't think of it just like, well, if I don't, if I don't go across the border and hire staff, I'm not going to be competitive, right? It's you're you're just you're also owing, you know, economically it makes sense, but also you're just opening yourself up to a gr to a bigger talent pool. I got it, I get a client here in Australia who is it like has a scalability issue because uh for a long time he's just resisted hiring people offshore. In fact, he's resisted hiring people who aren't in his actual building, right? And he lives in kind of like the outer, not quite regional area of Australia, but he's like an hour and a half out of the city, right? Well, it's hard to attract good talent to drive out there and work in his building, right? So I've kind of coached him through the idea of having strategists work locally and having implementers work, he's predominantly an SEO agency, having implementers work elsewhere because you're tapping into a larger talent pool. Now, yes, that raises a whole bunch of other problems you're gonna have in terms of like managing and culture and accountability and training and all that kind of stuff, but it's not just economics that that uh it's like that's not the only reason that you should look at hiring people in other countries, it's just tapping into a larger talent pool. I've worked with some people who do not live in Australia who are who put some of the Australian talent to shame, right? Yeah, uh that I and I've hired Australian people who are, you know, I wouldn't say useless, but you know, like just you can say useless not in the right seat, right? Let's just say that they weren't in the right seat. And then I've hired some people, you know, in other countries, like Pete, for example, who have just blown my mind, right? And who are like, so I mean, I I just think if I didn't, if I had borders around me, I wouldn't have access to that talent pool.

SPEAKER_06 38:39

We live in such a revolutionary time, and if COVID proved anything, it's that we can work remote. We were forced to do it for a freaking year, and we were we made it, guys.

SPEAKER_03 38:52

Yeah, so Cassandra brings up a good question. This is new to me, hiring offshore. How do you deal with the negativity about not hiring locally? My team has been offshore for seven years now, and I've never had a client question it even a little bit.

SPEAKER_07 39:09

Really, the really easy answer to that question is say to the say to the client, do you have a smartphone in your pocket? Yeah, right. Where was that made? Right, wasn't made in the United States of America, was it? So shut up. What are we talking about?

SPEAKER_03 39:19

Like, yeah, and and and the other side of that is do you really want to be working with people who would even ask that question?

SPEAKER_06 39:27

Exactly.

SPEAKER_03 39:28

I've got them as your client.

SPEAKER_06 39:30

I I just will stop the sales conversation if there's any ever any. And and trust me, like I've heard it as a brown guy in the United States. I've heard it all. I'm sure I have to prove that I'm an American citizen for people to actually take me seriously. It happens all the time. You just like walking with your passport open, do you? Well, because they're hearing me and I can tell, like, I can see it on the people's faces, and they're like, Is this guy Mexican? I'm like, Well, I was born in Los Angeles and I'm an American citizen. I happen to just ease that into the conversation, then everything's like, okay, cool. It's one of us. I'm a boy now. Um Chris is in the house. Exactly. So, anyways, um, yes, I wouldn't worry too much, you know, think about it from the opportunity standpoint, um, kind of like the prosperity mindset. Like, we have so many opportunities, and we can share our wealth with so many people from around the world. And what I've found is that our staff in Mexico, they are so appreciative and oftentimes more appreciative of the opportunity than uh a lot of our people in the in the United States or a lot of people that I've encountered in the United States. So I don't care where you are, if you can do an amazing job for my clients and you can make my life easier, you will find a seat here at our company. Like, yeah, uh, and the best part is that no matter how much you're charging your clients, for the most part, you can find somebody that will fit your budget. I do have some absolute non-like, you have to have these ones. One, you have to work my time zone. We do not hire people who don't work my time zone. The second one is you have to speak English, or you know, at least my language, like I speak English American. Um, you have to speak uh English, right? That those are my two, like I will not compromise on those. Everything else doesn't matter. Don't care where you're at.

SPEAKER_07 41:21

Greeting. Um uh in in the time that we have left. Do you want to do you want to share a screen? Yes, I do show us what you've been doing.

SPEAKER_06 41:29

Because I was just about literally, that was the next thing that I wanted to share. Because the big question is okay, so I'm going to start gathering the data. What if I don't have the data now? I still need to price out my projects. Well, yeah, luckily, dude has been been collecting projects on thousands and thousands of websites. Or I should say, we've been collecting data on thousands and thousands of websites over the past few years, and we've tracked tens of thousands, hundreds of thousands of hours. And so we actually created a free uh free platform that any of you guys can use um and get access to this data that I keep talking about. So I'm just gonna share my screen really quickly. We created a platform, it's called Dude2Go. And basically, what we did is we took all the website data that we've gathered over the years and we uploaded and we built a software, and you can now get access to that data. So when you're going to quote out a project, you no longer have to guess. Okay, so it's super, super easy to use. And so basically, you just go here. I'm gonna continue as a guest, you put in your name. I'm gonna say Pete. And uh, what did we call him before? Krispy Kreme, crispy butter, crispy butter, crispy butter. And uh we're gonna what I don't know, I'm just saying dude. Uh, and then I'm gonna put in my email just for fun. Agency, what is my email? I oh, my phone number. This is myself if anybody wants to text me. Uh tests, and then when do we want this completed by? So let's say I want this done by the 24th, and I want you guys to do a build for me. So let's say I'm a designer, I design everything in Figma, and I want you to build it out in oh, what happened to my Figma? I want you to build it out in Astra with Elementor Pro. So to start, these are the three themes and builders that we're doing. Divi, beaver, astra. We're we will continue to add more as we aggregate the data and upload it. Um and then Divi Elementor Beaver Builder. So I'm gonna say Astra with Elementor Pro. I've got seven pages. WP Engine. I don't have mock-ups yet. You can upload the link if you want so we can look at them. And I'm gonna include Yoast and uh Gravity Forms. Then I just click submit, it goes over to our team. Now, in the future, after we kind of get through this beta program, it'll just flash on the screen. It'll say it's gonna take you this amount of hours. And if you want dude to do it, it'll cost us much. But what happens now is that it goes to our team, and then very, very quickly, uh, we will contact you. And if you're looking for just the quote, we'll say, Hey, this project. Is going to take, on average, about 82 hours to do for the development. This is based on data, guys. This is not us just randomly guessing. We are checking your exact project against thousands of other projects that are just like the one that you want to do. And this is the average of how long it's going to take. So then what do you do with that information? You basically go in and you say, hey, okay, so it's going to take me 82 hours. I'm going to then price it out at X amount of uh of dollars. So if your hourly rate, I'm going to stop my share. If your hourly rate is $150 an hour or whatever, you're not going to charge less, you're not going to charge them like a thousand bucks. You're going to go in there and you're going to charge them the right amount. So that's basically what you can use dude to go for. And then if you want dude to do it, we'll give you the price on how much it'll cost us.

SPEAKER_07 44:55

Yeah. Awesome. And just be clear, just be clear, you can get the quote without engaging your services. We don't have to hire dude. You just get the get the data.

SPEAKER_06 45:03

Get the data for free. And then you have it, and you can more accurately quote out how long it's going to take for on your end. Got it. It absolutely does not matter if you work with us or not. Just take the data. Like that's the most powerful thing that we're giving you guys for free.

SPEAKER_07 45:21

Peter Butler says, Do you have time to talk about your producttizing in your agency? No, but we will definitely get Chris Martinez back to talk about that at some point for sure. Cassandra, he says the comment wasn't from a racist standpoint. It was about employing locally first. I'm definitely proud of my guy. We have a wonderful relationship. Yeah, we get that, Cassandra. And and I just think it's a really good conversation to keep having because you know, like there are certain organizations, governments, large non-profits, that will just put an embargo on your stuff being developed offshore. That's fine. I never dealt with those clients because they're a pain in the ass. So um uh Kyle says absolutely brilliant tool you've created. What is the link for people to go on and check this out? Oh, just dude to go, dude2go.io. Dude2go.io, d u d e. Then the number two, g o.io, dude to go.io. Uh so the next point is.

SPEAKER_06 46:08

Please use the data. I'm telling you. Easy rule of thumb again. If we get a quote from us, like if dude says we're gonna do it and it's gonna be 1500 bucks, take that number and multiply it by at least 3.5. That's what you want to charge your client.

SPEAKER_07 46:21

There we go. You know what I love? Um first of all, dude. Uh I'm gonna call you Chris eventually. First of all, I just want to thank you again, man. Like you just keep you have turned up to so many of our events in person in San Diego, our Mavcon events, uh, the podcast, a lot like it's just been an absolute revelation and such a pleasure uh crossing paths with you and having you in our ecosystem. And I really want to thank you for everything you you're doing and continue to do. I also want to say in the green room before we went live, I jumped in about three minutes before we were due to go live, right? And um, we kind of got chatting, and Chris is like, well, you know, so I've got some slides. Do I use slides or do I just, you know, like I don't really need to because I know this presentation. I'm like, whatever you want to do. And he's like, I don't need slides. I love the fact slides just get in the way, right? I love the fact that we're just having a conversation and it's really and we can kind of go off track there. Not many people have the experience and the confidence to just be able to have a really organic conversation without using the slides as a crutch, right? I don't use slides anymore because I think they just get in the way, but they used to be a bit of a crutch for me. So I just want to shout you out there and say, you know, again, thank you, man. You clearly know your shit, and uh this has been incredibly beneficial to people watching. Everyone share on the link in the comments here. So dude2go.io, go check it out. Run your next project through that. And I think what will happen is that you'll realize you ain't charging people enough money.

SPEAKER_06 47:43

You guys need to be charging more. Yep, you gotta put your prices up. You guys deserve to make a lot of money. So this helps level level the playing field, even if you don't have any data, so you can start charging what you're worth.

SPEAKER_07 47:55

I had a conversation with someone the other day who's like, I just don't believe anyone will pay me. Um I've heard I've had this conversation so many times, and I used to say this, but this guy says to me, I just don't believe anyone will pay me any more than four thousand dollars for a website. And I said, 'Well, that's true.' As long as that's what you believe, and as long as that's what you say, that's true. But I can tell you people there are people out there paying a lot more than that for the same websites you're building. You don't need to add complexity or functionality or drop shadows to your website to increase what you charge, right? It's you just have to have a slightly different conversation with a slightly better caliber client.

SPEAKER_06 48:43

Yep. 100%. 100%. Those folks that are running the million-dollar agencies and making more money than you, they're not smarter than you, they're not more talented than you, they're not any better than you. They're just doing exactly what Troy said. They have a slightly different conversation and they've got a different, I would say, higher paying client.

SPEAKER_07 49:03

Yeah, and also I think I think this, which is a whole other conversation, but I think they're just paying attention to different stories in their head. Yes. Yeah, they're not paying attention to the stories, a whole nother conversation, which we're definitely gonna have at some point, right?

SPEAKER_06 49:19

You know, I love talking about the deep stuff too.

SPEAKER_07 49:21

Yeah, well, I you know, I got to bed last night and I said to my wife, there is definitely something about my identity, the way I identify, I come from the working class suburbs of of South Australia, right? I identify as a battler, I identify as someone who struggles and who battles, and where, you know, like it doesn't come easy to me. I identify as that, and that I think informs my behavior. And my behavior informs my outcomes. So, you know, I'm like, I'm I just turned 48 last weekend. I'm like, why the fuck am I still listening to those stories that tell me I'm I'm gonna struggle and I'm a battler and I'm just a stupid little shit from the northern suburbs of Adelaide who went to a crappy school and doesn't deserve like why am I still listening to those stories? I'm 48 years old, for God's sake. Do you know what I mean? So for me, it's still a it's still a daily practice to just let those thoughts flow down the river and and you know, reprogram them and pay attention to more more useful things.

SPEAKER_03 50:21

You gotta catch, you gotta catch yourself and literally say the story I'm telling myself is whatever. Yeah, reframe it.

SPEAKER_07 50:29

Yeah, yeah, yeah. Dude, thank you so much. This is thank you guys.

SPEAKER_03 50:34

Your name, your name comes up with us all the time, and we're always like, no, we can't ask him again. We just asked him last week.

SPEAKER_06 50:41

No, ask me. I am here, guys. Like, this is one of the things that fires me up. I love sharing what I what I've learned along the way. Um, you know, because it wasn't that long ago where I wasn't making that much money, you know. The agency had high revenue, but not high profit. And it's one, two little switches. If you just flip those two little switches in 12 months, your your life can be so different, yeah, in a positive way.

SPEAKER_03 51:04

You're an inspiration, my man, and we appreciate it. We really do.

SPEAKER_06 51:08

Yeah, thank you. When's the wedding? October 9th. So a month from tomorrow. Oh, wow.

SPEAKER_07 51:15

We're excited. Well, I know this is the this is like the the uh the third tyke of the wedding, isn't it? Like it was plenty of the world.

SPEAKER_06 51:23

Yeah, so we got engaged January of 2020, and then we were gonna get in uh get married October of 2020, and then we had this little thing called COVID happen, and then we're like, ah, we should be good by May of 2021. Yeah, not the case. So then we pushed it. So this is uh this is take three. Well done.

SPEAKER_07 51:43

Because you just got engaged when you came to San Diego to our event, which is 2020. Uh exactly, like about a month. Um, yeah, man, congratulations. Yeah, man. I can't wait to get it. Yeah, we can't either. Yeah, it's gonna be it's gonna be great. First round of beers on me. Awesome. Awesome, good stuff. All right, thank you, Chris Martinez. Thank you very much for uh for being a part of it.

SPEAKER_06 52:04

Thanks, everybody.

SPEAKER_07 52:05

Ladies and gentlemen, that is the agency hour here in the Digital Mavericks Facebook group. Thank you, crispy butter Pete Perry. Hey, we'll see you again uh the same time next week.

SPEAKER_02 52:14

Thanks for listening to the Agency Hour Podcast. Subscribe at Apple Podcasts, Spotify, Pocket Cast, Audible, and wherever you'd like to listen. You can catch all of the agency hour episodes on our YouTube channel at youtube.com slash agencymaverics. Or you can get involved. Check out our free Digital Mavericks Facebook group, where we broadcast these episodes live for our community every week, along with a ton of free training. We'll see you there.