The 4 Audio Business Models, The Pros And Cons Of Each, And How To Avoid “The Death Zone” | The 6FHS Business Quadrant

Brian: This is the six figure home studio podcast episode one 38, brought to you by COVID-19.

[00:00:22] Welcome back to another episode of the six figure home studio podcast. I'm your host Brian Hood, and I'm here with my bald beautiful purple shirted cohost Christopher J. Graham. How are you doing today? My friend.

[00:00:34] Chris: I'm good. I'm very good. I bought a car, Brian,

[00:00:38] Brian: I know, dude, you bought. Okay. So back in my bachelor, thanks. Oh, my bachelor party, we went on a trip to Yosemite. We called it the bro Semite trip. We rented Jeeps on that trip and you fell in love with a specific Jeep. Tell us about it.

[00:00:52] Chris: the Jeep Renegade. So you guys on other Wranglers on the podcast all the time it's engine blew up.

[00:00:59] Brian: God. It was

[00:01:00] Chris: Hey, it makes me sad.

[00:01:01] Brian: I mean, now that I've seen photos of your new car, and I think it's a blessing that your other old trash car died.

[00:01:06] Chris: It has been it's better than the Wrangler. So it's a Jeep Renegade, which is what we had.

[00:01:10] Brian: Do we gear slut for car models?

[00:01:12] Chris: No.

[00:01:13] Brian: Yeah.

[00:01:14] Chris: Nah.

[00:01:15] Brian: James we'll figure it out there either was or wasn't

[00:01:17] Chris: We could gear slit for this. My Jeep comes with beats audio ha.

[00:01:22] Brian: no, that's a thing.

[00:01:24] Chris: it actually sounded pretty good. It actually sounds good, but I'm pumped about it cause it's got two sunroofs.

[00:01:29] Brian: One's a sunroof. One's a moon roof. You knew that?

[00:01:31] Chris: No, no, no. They're both.

[00:01:33] Brian: Yeah. I'm Megan, shut up. I don't know.

[00:01:35] Chris: It's true.

[00:01:35] Well, one of them is electric and then you can take them both out and turn it into like a convertible. Which my kids went nuts for and hilariously, I got a new car. I'm like buying all the accessories for it. And I bought what I think is one of the most fabulous products on the face of the earth. Not sponsored because us it's called a NOCO boost.

[00:01:54] Plus it's a big lithium battery. You keep in your car that has like this little pair of jumper cables.

[00:02:01] Brian: Oh, so when you inevitably leave your interior lights on, or your door cracked or your headlights on and your battery's dead, you can jump yourself off. Is that what it is?

[00:02:10] Chris: Yeah. Or in my case, you went out to your car last night to put this new device in your car and you left your trunk open all night

[00:02:19] Brian: No, you

[00:02:20] Chris: then had to jump your car the next month

[00:02:22] Brian: No, you didn't.

[00:02:24] Chris: I did.

[00:02:25] Brian: That's incredible. It's like,

[00:02:26] Chris: It was awesome.

[00:02:27] Brian: like this product's awesome. But also I wouldn't have needed it. Had I not had this product?

[00:02:31] Chris: Exactly. It's like a hundred bucks, but like everybody should have one of these in their car.

[00:02:36] Brian: Yeah. Cause it's so annoying, dude. Like I've had multiple times in my life where you're like, Hey stranger, who probably thinks I'm going to stab them in this parking garage.

[00:02:43] Can you pull your car over here and give me a jump, even though we don't know each other and you owe me absolutely nothing. Yeah.

[00:02:48] Chris: It's the worst. Yeah. With this thing, it's like literally under 30 seconds and you're on the road again. So dope.

[00:02:54] Brian: I just pay for AAA so they can come out and do that shit. But also triple a here in Nashville is so fast. Like I've had them come do things multiple times since I've like paid for that service. It's like a hundred bucks a year or something. And they're here within like 15, 20 minutes. It's weird in Nashville, how quickly they can come, but I'm not complaining.

[00:03:10] Chris: Well, that's 19 and a half minutes longer than it takes this device to jump your car.

[00:03:14] Brian: This is so true. Yeah. I mean, this was for tire related issues. So this thing can't do that, but for battery related issues, that's just one less thing to worry about.

[00:03:21] Chris: It also has a flashlight built into it, a USB charger. So like, if you're out in the middle of nowhere, need to charge your phone, you've got like a whole power bank.

[00:03:29] Brian: that's kind of sick.

[00:03:30] Chris: dope. So we're not sponsored by them. We just think, I just think that you guys should have these in your cars because you're going to kill your battery.

[00:03:37] Cause you're an idiot like me.

[00:03:38] Brian: Well, we're going to move on to more important things. I love that we're four minutes into this episode

[00:03:42] Chris: let's do it.

[00:03:43] Brian: And, and Chris hasn't asked about me, which is funny because yesterday I got my test back for COVID and I tested positive for COVID.

[00:03:52] Chris: the worst, not how are you doing that? I've

[00:03:54] Brian: And here we are four minutes into this episode. And Chris Graham is talking about his fucking, not as new car, his new battery for his new car.

[00:04:04] You see this shit I put up with on this podcast.

[00:04:06] Chris: Hi, Brian, how are you?

[00:04:07] Brian: Oh man. So yeah, my wife got it. Last week. She tested positive Thursday or something. And then now here it is, we're Wednesday morning, which is a weird ton to record this podcast. I got my call back yesterday and I am positive for COVID-19. So, woo, woo. We'll see where this goes.

[00:04:22] I think I'm through the worst of it. I think I'm relatively asymptomatic. Like I've experienced a lot of the symptoms, so weirdly, but they're all spaced out. Like first day was like, I'm just tired. So like by 11 or 12 or one I was done with work and just laid around. Second day, like body aches, third day relatively.

[00:04:39] Okay. But I had a headache fourth day, sore throat. And then Sunday, I finally got the test because we had to wait til I got symptoms to actually have the task, because here's what happens. If you take the test before you have symptoms, you have, have like a 50% chance of getting a false negative, which happened to my wife.

[00:04:54] She had to get the test twice. Anyone who's gotten the test knows what they do to your nose and it's awful. And then now the worst, and this is the worst symptom of all. I've kind of had like a, a tight chest this entire times. It hasn't been bad at all. It's just been kind of like annoying and I'm, you can hear me now, like this is as bad as it's been the whole time and I can talk and do long sentences without major issues.

[00:05:13] But the worst part of this entire thing is I can't taste anything. So I can't, I have my nice, wonderful Ethiopian home roasted coffee sitting next to me, light roast, spend some time roasting it like perfect. It's amazing. Can't taste it. It's basically just bitter water to me right now. I've got a Tangerine LaCroix in front of me right now.

[00:05:32] This is actually the worst flavor when you have no taste. Cause all you taste is like the sharp Tangerine flavor and it just tastes like hairspray. Like it's a sensation, like as if you've got hairspray in your mouth. I didn't say the grand scheme of things. This has been a cupcake. COVID experience for me other than just slight, minor annoyances.

[00:05:49] I feel so far, at least lucky that it hasn't been terrible, but we'll see where we go with this. If it gets better or worse, we'll see.

[00:05:55] Chris: Amazing. You would get COVID and be completely fine.

[00:06:00] Brian: Well, we've been taking a lot of, uh, like for the last three months, elderberry syrup, and now we have elderberry gummies.

[00:06:05] Chris: Oh, dude. Yeah, that stuff's legit. I use that.

[00:06:08] Brian: That's my anecdotal story of something that might've helped. I don't know. I generally have a good immune system. I'm healthy. Like who knows how much any of this has anything to do with it.

[00:06:16] I'm 33, which helps a lot and not no 53 or 63.

[00:06:20] Chris: Elderberries are so funny because the name sounds like it's from like a fantasy video game.

[00:06:24] Brian: Yeah. It's like straight out of final fantasy. Seven or straight out of,

[00:06:28] Chris: You are a fountain 17. The elderberries

[00:06:31] Brian: yeah. Straight out of oblivion or Skyrim. Skyrim is the better one.

[00:06:34] Chris: I have no dude talking about.

[00:06:35] Brian: Yeah, you're not a true nerd. You're just a fantasy mainstream nerd that likes Lord of the rings and Hobbit because it's popular.

[00:06:43] Chris: So good. I read it before I knew what it was. So there's that.

[00:06:46] Brian: We talked for so damn long, last episode, pre like actual episode that like the first comment on YouTube was someone leaving the timestamp for when we shut the fuck up and started the episode.

[00:06:57] Chris: Thank you, sir. To whoever did that.

[00:07:00] Brian: For those who don't know, we actually have these episodes on YouTube. No one really listens to them on there. That's like our smallest area for people to listen to this podcast. But sometimes people listen on there. And the first comment for this last episode was skip to 1453.

[00:07:12] Chris: Was it 1453.

[00:07:13] Brian: It was like 15 minutes into the episode before we actually started.

[00:07:15] And now we're 12 minutes into this episode. No, no, I'm sorry. We're seven, eight, seven or eight. We're good. We're good.

[00:07:20] Chris: Let's shut up and add value, Brian.

[00:07:22] Brian: Yeah, no one gives a shit about my COVID or you're a new Jeep guide, but my voice is like deeper and sexier, probably more so that it's morning than anything else, but

[00:07:29] Chris: It does sound very good, but who knows, maybe somebody will buy a NOCO blues plus battery for their car, and we'll not get stranded in the middle of nowhere as a result of this podcast.

[00:07:39] Brian: Yeah. Okay.

[00:07:40] Chris: That was my dream. When we started this podcast is that one person would not get stranded somewhere. Anyways, let's add value, Brian.

[00:07:48] Brian: So Chris, what are we going to be talking about today?

[00:07:51] Chris: We're going to be talking about how to gain stage your preempts to get nice and juicy

[00:07:55] Brian: No, get the fuck out. That that's incorrect. That's a lie.

[00:08:02] Chris: We're going to talk about different business models.  one of the things that's important is as I've been talking with so many of you guys doing the coaching thing and doing that free coaching thing that I've been offering, it's been apparent to me that just about everybody it takes for granted their own business model.

[00:08:21] And we want to talk about something, Brian and I came up with, what are we calling this? The six figure home studio business quadrant.

[00:08:27] Brian: It's like the worst lamest name ever, but until we have something better, it's called that. So we're basically going to cover four different business models.

[00:08:34] Chris: Wait, can we call it the biz quad?

[00:08:36] Brian: God. No. Well, here's the thing we've talked about probably at great length, multiple times of this podcast, the difference between my business model and your business model, Chris, I think we have an entire episode dedicated to this, but we couldn't find it cause we're like 138 episodes in now.

[00:08:47] And I just don't, I don't know what I named it. And it was like probably years ago. However, we've talked about this at great length. My business model for my studio is. Low volume, high margin, meaning I don't do a lot of work, but the work I get paid for is a substantial amount of money, like thousands per project.

[00:09:03] And Chris has business model as a mashing engineer is high volume, low margin.

[00:09:08] Chris: I get it. Mastering engineer, high volume,

[00:09:10] Brian: Okay. Loudness Wars are dead, buddy.

[00:09:13] Chris: 13 lefts.

[00:09:15] Brian: get the note, buddy. Okay. So with his business model, it is a lot of projects, high volume and low dollar amounts. There's actually two other business models that we really haven't covered on this podcast before. And this quadrant kind of talks about those. One of the two business models is actually like the golden zone that it needs to be what we strive for.

[00:09:32] And the other of the two business models is actually the death zone that a lot of our listeners find themselves in right now, and they don't know it and they haven't realized it. And I'm hoping this episode opens your eyes to understanding why the business model you've chosen for yourself is that absolute death sentence.

[00:09:46] And you will not have success in this. It will be. A slow slog to nowhere. And then one day you'll wake up and realized God, Brian and Chris nailed it on episode one 38, and I just ignored them. And I should have gone back and switched my business model up so that it didn't mess this up. So this episode, we're going to cover all four of these and some things to look out for some thoughts to part with.

[00:10:04] And at the very end of the day, we're just hoping that you have picked the right one of these four business models for your own business.

[00:10:10] Chris: And also have not taken for granted that you can change business models. I think most people, they get trapped because they're like, well, it is what it is. And it's got to look like this and they just, they don't ask questions. They just sort of willingly continue to operate in traditional ways.

[00:10:27] Brian: I mean, that's like most of the world though, I think most entrepreneurs, you don't become an entrepreneur or thinking that way. But if you are someone that is trying to transition out of a day job and you haven't trained yourself, not to think that way yet. Then you are going to fall into this trap of just continuing on blindly, because that's what you thought you should do.

[00:10:43] And you didn't really stop to consider that, Oh my God, I'm building this business in the wrong part of this quadrant. And I need to reassess what I'm doing.

[00:10:50] Chris: And I think a big part of this is just asking yourself the question. Okay. With the current business model that I have. If it grows and I am successful, what will my life look like? And if you don't get this right, it ain't pretty.

[00:11:04] Brian: That's true. We'll just go straight after this part right here into the actual quadrant and talk about it and you can visualize it and you can go to our show notes page and actually see it for yourself. Even if you pick a good business model, a good part of this quadrant, and you haven't thought through what success looks like for you.

[00:11:17] Like if you are successful, what does it look like? You can still set yourself up for failure because just in Chris's example, high volume, low margin business is a really tough business to run. You can make money in it. You can be successful with it, but there's a lot of work involved with it. So you have to plan ahead for.

[00:11:32] Growth, if you are going to go to that model, but Chris, before we get into this, let's talk about the actual quadrant that we're talking about here. And I'll try to do the best I can to visually describe it so you can imagine it. And if you want to see the actual quadrant for yourself, there will be a very crude, very ugly, gross version of it@thesixfigurehomestudio.com slash one three eight.

[00:11:50] So episode one 38. And here's the quadrant. I want you to imagine just putting a plus sign on a screen, and then you have the top left. The top, right? The bottom left and the bottom, right? That's the quadrant we're working within here. Top left of that quadrant is high volume. High value. This is the golden goose area.

[00:12:10] This is the part of the market where you have a lot of potential projects that are all valued at a high amount of money. Very competitive also, but this is the golden goose area that you would ideally be working in. If you had a choice top right of this quadrant is high volume, low margin. This is Chris Graham mastering.

[00:12:27] This is you've got a lot of projects you can work with. Very large market. You don't really necessarily specialize in any specific niche. You have a few niches that kind of favor you, but overall you work in a multitude of niches. So you have a very wide market, but generally speaking, it's relatively low margin.

[00:12:44] You've actually raised prices and adjusted things over the last year or so. So it's a little higher margin than it used to be, or probably a lot higher margin than it used to be. But still in the grand scheme of things, it's a relatively low margin. So that's the top right? Part of this quadrant. Then you get the bottom left part of this quadrant where I am, and this is low volume high value.

[00:13:01] This is the business model where you don't have a huge market. It's a relatively low amount of projects, but you're getting paid enough money where you have a good business. And so in like the heavy music scene, This is not a big niche. This is not a big market. It's probably bigger than you think it is.

[00:13:14] And you have a really passionate people who are willing to invest in themselves in this market, but it's relatively low volume. You're not going to get 5,000 paid products in a year in this market, nor could I handle that, but it's low volume high value, and that's where I've lived. And then you get the bottom right side of this quadrant.

[00:13:30] And this is the death zone, the low volume, low margin. It's a small market. There's not a huge opportunity for a lot of projects. And it's low margin, meaning you're not charging enough to sustain yourself. And this is where a lot of our listeners currently sit in and we want to make sure we shake people loose from living into this deaf zone part of the quadrant.

[00:13:50] Chris: Well, and I think what gets tricky here is that a lot of people are like, I know I'll start a business and they don't understand that they're doing this. I didn't understand that I was doing this when I first started out, but they're like, okay, I'll start with low volume, low margin. I'll be really cheap and I'll have almost no customers.

[00:14:04] And then I will migrate either North or what is this West to high volume, low margin or two low volume high value. So I will either increase the number of customers I have dramatically. And keep my prices about the same, which is what I did for Chris gray mastering, or I will increase my price and trim down the number of customers that I have, but make more per project.

[00:14:31] Or if I'm really, really, really lucky, I'll do both. I'll get tons of customers and I'll raise my rate at the same time. Challenging, not impossible, but that's the big thing is people make this assumption of like, Oh, start low volume, low margin. And I'll work my way up to one of the other ones where I'd rather be.

[00:14:47] I would argue that it is probably smarter most of the time to not exactly do that. Obviously you can't just start with high volume. You have to work up to high volume.

[00:14:59] Brian: When we talk about volume, it's not just how many projects you're currently taking on. It's like to me, the volume is how big. Potential, because what happens is people are like, I'm going to edit vocals and heavy music, and I'm going to charge 50 bucks a song. I mean, I don't know many businesses that are trying to do this.

[00:15:14] I'm just using this as an example, or for the last episode where I'm going to D S vocals.

[00:15:18] Chris: Hmm.

[00:15:19] Brian: That's actually probably high volume, cause there's a ton of vocals to D S in the world. And if you become a DSN specialist, go for it, but there's, that's super low value.

[00:15:27] Chris: That's true.

[00:15:29] Brian: Super true. See what he did there. Audio nerds.

[00:15:33] Okay. So, okay. Let's, let's back up here. The whole point of this though, is if you're trying to pick the market of the services you're doing, if you're a low margin and there's no room for growth in what you're charging, make sure you've picked a niche or a market or a segment of who you're working with that has room for potential volume growth.

[00:15:48] So if you can't make up for it in price, You can make up for it and volume. There's still negatives that come with this. And if you go back and listen to episode two of the podcast where Chris Graham talks about his story, you'll hit this wall in the high volume, low margin business, where you're working with a ton of projects for low amount of money.

[00:16:02] You hit a wall where you get burned out. You are dropping the ball. You are pissing off clients, your work quality suffers because you're overworked and underpaid. You don't know how to manage the leads. Your CRM becomes a train wreck. If you even have one, there's just like so many things wrong with the high volume, low margin business for new business owners, because it takes a very mature business owner to live in that high volume, low margin side of the quadrant.

[00:16:25] So to me, honestly, for most business owners, the right side of this quadrant, the high volume, so a lot of projects, low margin, so low dollar amount and the low volume low margin. So that whole entire right side of the quadrant to me is kind of off limits for any new. Business owner, because it takes a mature business owner to make that stuff work.

[00:16:44] Chris: Well, and there's a lot unpack there that we'll get into the high volume, low margin thing. When you're trying to go from low volume, low margin to high volume, low margin, what is an evitable going to happen is you are going to hit plateaus of death. This is something I talk about with a lot of people that I work with coaching wise.

[00:17:02] And what happens in these businesses as you begin to grow and then your capacity to take on more work, it starts to get choked.

[00:17:09] Brian: I call it an income ceiling.

[00:17:10] Chris: You hit an income ceiling and you know, I hit this at 20,000. I hit this at 40, I hit this at 80. I hit this at a hundred thousand, this at 150,000. And what happens is you start to have trouble keeping up with the amount of work and less.

[00:17:24] You spend a lot of time. Working on your business, either eliminating, automating, or delegating some part of the process.

[00:17:33] Brian: And that takes a very mature business owner, which is why I say this right side of the quadrant is kind of a no zone, four immature business owners, new business owners.

[00:17:42] Chris: Yeah, it's something you can make work, but you got to have the skills to make that happen. And their skills are different than the skills that got you into this business. Those skills or business skills, their systems skills, their management skills, discipline skills to take time off each week. And work on your business, not for it so that you can break through these plateaus.

[00:18:01] These plateaus are also a great place to have a business coach or to take a business course. Or to go to a business retreat or to join a mastermind or to read a book that you've known that you should read for a long time. These plateaus  awful. They are so painful and you got to get through them as quickly as he can, but you also gotta keep in mind like the service industry that we're in.

[00:18:23] You're never, maybe one of you, it's going to make a billion dollars in this industry. And I'm going to be me as far as mastering stuff goes.

[00:18:32] Brian: I don't know if anyone's going to get a billion dollars in the service industry.

[00:18:36] Chris: There is a ceiling that you're just not going to get past with this business model. And that's okay. This isn't about money. This is about doing what you want to do with your life. This is about fullness.

[00:18:47] Brian: Yeah. And I think most of our listeners, like this is one of those things that I've talked to Chris at great length about where I think the majority of our listeners aren't as concerned about becoming like the Joe Wadsworth of the industry, where if you listen to that episode where I interviewed Joe Wadsworth of the online recording studio, His business is set up.

[00:19:01] So he's not actually doing into the audio fulfillment. He's truly the business owner. He works on systems. He works on managing his team. He works on marketing.

[00:19:09] Chris: Gosh, I wish I knew him better.

[00:19:10] Brian: Yeah. I mean, he's a great dude. He's very, very smart.

[00:19:12] Chris: I mean, know him. I don't know him.

[00:19:14] Brian: Yeah, you were, you were gone when I interviewed him, but again, he set himself up to be the true business owner.

[00:19:18] I don't think most of our audience really wants that. Most of our audience just wants to be able to sit down and do audio for a living and not have a day job. And that's a hundred percent. Okay. But that's why this entire conversation about this business quadrant being on the left side to me, most of us need to be in the left side, if this is what you want to do for a living, because it's way easier, high volume, high value or low volume high value is a much easier business to figure out because.

[00:19:41] If your average revenue per project or average income per project is in the thousands, you don't need that many projects in order to make a living. If it's in the hundreds, low hundreds, it's really hard. You have to have dozens and dozens of projects to keep your head above water. I made a calculator for this back when I launched home studio startup course, and I don't know where it is.

[00:20:02] I'll have to find it. I'll try to put on our show notes page. If I can. I think it previously, it was a resource just for students, but I don't mind making it for our podcast listeners. And it was literally like doing the math of you put in a couple of numbers in your business and it spits out how many leads you have to have in order to hit your income goal.

[00:20:16] And it really shines a light on how unsustainable most people's goals are for their income because they realize. If I want to make $10,000 in a month, which is really high. Like most people don't need that much to make a living, but that's just like a goal. People have that, you know, over six figures a year.

[00:20:30] So $8,333 a month is the six figure. Mark. If I want to hit the six figure Mark, I have to have 20, 30, 40, 50 court requests coming in a month. And if I have that many court requests in a month, that means I have to have. Hundreds, if not a thousand or more people come to my website each month, and most people are not savvy enough to figure out how to do that as a marketer.

[00:20:50] Because again, if you don't want to be a business owner, you sure as shit don't want to be a marketer. You just want to do audio for a living. And if you want to do audio for a living and you don't want to figure out all of this, like becoming a business owner and marketing stuff, or you don't want to be a master at it, you just want to get by with it.

[00:21:03] It's much, much easier to manage a high income. High value type of business than it is the Chris grand masters of the world, where you have to really be a good marketer. Chris Graham is a good marketer. Most people that want to do audio for living are not good marketers, and it's okay. You just have to make sure your business is actually set up for success.

[00:21:20] If that's the decision you want to make. So I think you need to have the average price per project needs to be in the thousands for that kind of business to sustain itself. And it's just much easier because if you're making two grand per project on average, that means you need, let's just say two projects a month, which means you need about.

[00:21:34] Eight quote requests per month, which means you need about 150 website visitors a month. That's a much more manageable thing to do as someone who is marketing their business on the side, compared to someone who is trying to make thousands of dollars from a little nickel and dime projects like Chris Graham, no offense, but that's kind of what it is in the mastering world.

[00:21:52] Chris: Let me throw out a couple. What sort of thoughts and ideas here I'm agreeing with you? Um, but there are some caveats, there are benefits to every business model and I want to talk about.

[00:22:04] Brian: I love when we argue Chris.

[00:22:05] Chris: Me too. It's like the most fun thing. So when you're doing a high volume, low margin business, there are a couple things that come into play that are interesting.

[00:22:13] One of the most important things is it to do high volume. You need a wide top of funnel. And if you're new to the podcast, we've got top of funnel, middle of funnel, bottom of funnel. What that means top of funnel is everybody who's like, maybe I'll work with them someday.

[00:22:28] Brian: It's generating awareness.

[00:22:29] Chris: Yeah, generating awareness. Middle of funnel is I filled out a form.

[00:22:33] Bottom of funnel is I'm writing you a check.

[00:22:36] Brian: If your clients talk that way, you need to fire them.

[00:22:38] Chris: Yeah, exactly. So you have to have a wide top of funnel to do the low margin thing and a why type of funnel. Isn't something, you know, if you can pull off a why type of funnel you should. And a lot of people don't want to focus on a white top of funnel because it's complicated, it's scary.

[00:22:52] And it can be embarrassing to get out there in front of a lot of people and have the inevitable like tool bag on YouTube. I remember when I first started advertising years and years and years ago. I had comments enabled for one of the ads I was running. And this guy commented this like awful thing about like, Oh my gosh, look at the size of the gap in his teeth,

[00:23:14] Brian: Sure.

[00:23:15] Chris: effing disgusting.

[00:23:16] And I was like, Whoa. Oh,

[00:23:20] Brian: YouTube comments in general or any comments on ads are typically like the bottom of the barrel of the humanity. YouTube comments in particular are honestly the worst of humanity. So it can be hard to put yourself out there. So like, if you want to cast a wide net on the top of your funnel, like you had to do with Chris gray mastering, you have to be willing to.

[00:23:37] Be uncomfortable. And honestly it almost takes you have to be a face of a brand. You can't just be a nameless business. And the people that I know that are successful with this are generally people that have a large name for themselves. And there's multiple ways to do that. Sometimes it's you landed a client that just blew the fuck up and kind of dragged you along.

[00:23:53] That's kind of the exception of the role. That's not what most people can can accomplish. And then you have people like Chris who just made their own destiny and they were willing to put themselves out there and be uncomfortable and make ads and get laughed at because of the giant gap in their teeth.

[00:24:04] Cause it's disgusting. Honestly, it is disgusting. And. So like, but the problem is, again, most people sitting in their studios that just have a day job, or just trying to make their studios work or make more money from the studios. Like they just want to do audio. They don't want to put themselves out there.

[00:24:18] They don't want to make ads and that's okay. But if you don't want to do that, you gotta make sure your business model matches your goals and your aspirations and what you're willing to do in your business.

[00:24:25] Chris: Totally. You also got to ask yourself the hard question. Am I unwilling to go for a wide net and my unwilling for a wide top of funnel, simply because I don't want a 13 year old in Boise, Idaho to comment. On the post that I made with some hate,

[00:24:42] Brian: Yeah, you can also do what I do. And I just don't read the comments. I just make James go through and moderate stuff on my ads.

[00:24:48] Chris: right? So you have to be comfortable. Well, you're going to get critiqued if your business dream is like, I never want anyone to say anything slightly aggressive about me. You need to get over that. It's 2020, there's the internet and there are trolls and that's going to happen. So, all right, let's wrangle this thing.

[00:25:06] So there's a couple things to keep in mind as you are building these businesses. And one of these, there's a great book, not necessarily a great book for everyone to read, but a really cool book by John Warlow called built to sell. And one of the things and built the cell.

[00:25:21] Brian: I love that book.

[00:25:22] Chris: That's one of the first books we ever talked about.

[00:25:23] I think. So in built to sell, they talk about weather. What your service business does is teachable and whether it's high value or not. And he, it has this kind of graph thing. And the basic idea is if you're in the upper right hand corner of the graph, you've got a highly valuable skill. That's also highly teachable.

[00:25:43] Obviously you don't want to low value of skill. It's not teachable, obviously a high value skill that isn't teachable is nice, but over the long run, that's a pain in the butt. So. Mastering kind of hard to teach. There's a lot of information there it's valuable, but that makes it problematic for growing the business from an employee standpoint.

[00:26:03] Brian: And that's assuming that you even want that. Like I talked about, if you're trying to build a business like Joe Wadsworth, online recording studio, it's important that you pick a skill set. That's either trainable or in high supply.

[00:26:13] Chris: Yup. And interestingly enough, my intent is not to do this with Chris grant mastering, but like, if you do something like startup, popular podcasts with your friend and all of a sudden you have access to lots of qualified people that can change this, that can make it a lot easier because ultimately if you're going to go high volume, you have to assume that someday you're going to have health issues because you're human.

[00:26:33] Brian: You might get COVID one day, I feel like my voice is going out. As you get deeper into this episode.

[00:26:39] Chris: You might want to have people help you do your job. And if the business that you've chosen is something that's very difficult to train. You're going to hit some bumps there.

[00:26:50] Brian: Yeah. And I'll push back a little bit here again, this is just kind of picking and making sure that the business model you choose is in line with your goals as a business owner.

[00:26:58] Chris: Yeah, there it is.

[00:26:59] Brian: Because not everybody wants a business where you're training up people to work under them. I'd say most people listen to this podcast.

[00:27:04] Don't want that. Most people just want to be able to do what they love. And again, that's why the left side of this quadrant, the high volume high value or low volume high value. Anything in the high value side of this quadrant is. A more sustainable way, an easier way to build a business that you want to build, which is basically, you're not even really building a business.

[00:27:23] If I'm being a hundred percent honest, you're building a job for yourself. And that's an important distinguishment to make as a podcast listener. Because if you just want to build a job for yourself, it's much easier to do frankly than it is to build a business for yourself. And the high value world is a way easier role to play in if you're just building a job for yourself.

[00:27:38] Because again, like I said, you don't need to build an incredible systematic business where you have all these moving parts and all these tools put together and build up your marketing skills in order to build that job for yourself. It's relatively easy to do.

[00:27:50] Chris: So, this is kind of raw for me. I mentioned, you know, over the past couple of months, I'd had some health issues I'm on the men now, but it was really interesting to be not well enough to master. Sometimes that was scary. It was not fun.

[00:28:07] Brian: That's a tough business model to do. If you have any prolonged health issues.

[00:28:10] Chris: Exactly. So that's one thing to be thinking about here is yeah, you want to build yourself a dream career, but you have to either yay. Train people that can help you. And thank God for my assistant Kyle Whitaker. He was, uh, freaking champ. I love that guy. Where'd he go, Kyle or. You need to make such a high margin that you can afford to stop working for a long period of time.

[00:28:35] If you need to, or you need to have some sort of insurance that covers something like that, which is going to be hard to find. So there's a lot of stuff to think about here of, we've talked about this a lot on the podcast, especially in our earlier episodes, you've got to take what your current dream is, and you have to hold that up against.

[00:28:52] How you're going to change as you age, you gotta be thinking about, well, am I gonna have health issues? Am I going to get married? Am I going to have kids? Am I going to want to move? Like, there's just a lot of stuff that changes as you get older. And it's great. If you can build a business that can flex with those changes over time, as opposed to something where you get trapped, man, certain business models.

[00:29:11] And this is why we bring this up with it. This is why it's so important is that if you build your business wrong, the freedom engine that you are building can become your prison. It can trap you. You can get in a situation where it's like, Oh, I took on all this debt and, uh, Oh crap. Like I have to pay it off, but in order to pay it off, I need to take more projects in order to get more projects.

[00:29:32] I have to lower my prices, but if I lower my prices, I lose my margin. Oh my gosh, I'm losing $4 on every project I take on the debt inspired that I have control. So he, you have to be thinking into the future.

[00:29:44] Brian: Is that your inner voice, Chris.

[00:29:46] Chris: Mmm, thank God. No, my inner voice is really aggressive. He's a pole vault coach.

[00:29:53] Brian: Oh, okay.

[00:29:54] Chris: So that sounds so weird.

[00:29:56] Let's not put that in the episode.

[00:29:58] Brian: I don't know if I want it, edit that out. I want to leave it.

[00:30:02] Chris: That's the funny thing. So for me,

[00:30:04] Brian: Yeah. Just in case we leave the sending people don't know, Chris used to do pole vaulting in high school.

[00:30:08] Chris: I used to pull vault and you have to be out of your mind to pole vault. More kids per capita are injured or die, pull vaulting than any other sport bar, none in high school sports because you jump on top of a 14 foot pole that's bent in half, and then it Springs you into the air. So in order to be successful in the pole vault, you have to have like, A really intense, like psych up game for on.

[00:30:32] Yup. Hello. So that's, that's my internal

[00:30:35] Brian: voice. Okay. That's way

[00:30:36] Chris: Yeah. Chop on top of that pole. Anyways. Okay. So we're kind of all over the place here, but let's talk a little bit more about high volume about wide top of funnel. One of the things that I think is tricky about why top of funnel is that the world that we live in now rewards vanity metrics.

[00:30:57] Brian: Ooh.

[00:30:58] Chris: Vanity metrics are numbers that look sick, but don't mean crap. So if you've got 25,000 Instagram followers, I bet that feels great. I don't, you have 2,500 maybe,

[00:31:10] Brian: I got like 12,000. I'm basically like the most popular person on earth.

[00:31:13] Chris: probably, probably. And I bet you sleep better at night as a result of that. And you feel more loved than I

[00:31:19] Brian: Oh yeah.

[00:31:20] Chris: But Instagram is a funny thing to bring up. Let's say you've got 25,000 followers and you're doing it because you're posting pictures of audio gear. Maybe. I don't know. That seems to be popular method, nothing wrong with that.

[00:31:32] But there's 25,000 Instagram followers equal a wide top of funnel. Maybe, probably not though. And this is one of the things that gets tricky with a high volume, essentially a wide top of funnel. Is it with the wide type of funnel you got to filter? You get like, Hey, my name's Steve, I'm 13. I want to record, uh, a cover of Ariana Grande day.

[00:31:53] Uh, can you help me no. Moving on to the next person. Okay. You just burned time reading this application or reading this quote. Oh man. It gets really tricky if you don't balance your friction so that you've got some sort of way to automate out leads that aren't going to be helpful.

[00:32:10] Brian: And again, we've talked about this in the past, but when you do high volume, you've got to build more systems in place. This is kind of what I was talking about, where it's just a much more complex businesses set up. Because if you've cast a wide net, you're going to get a lot of court requests. And a lot of those court requests going to be trash, create systems to filter out those trash leads.

[00:32:26] And you're still going to have a lot of people to follow up with. You're going to build out systems to follow up with those people. You have to build out systems to take those deposits. You're going to build out systems to bring in a lot of files. If you're a mastering engineer or a lot of files, or for mixing engineer, you have to build out a lot of systems to manage those projects so that you don't drop any balls for your clients.

[00:32:42] You got to have good systems in place for file delivery for final payment. There's so many systems you have to build out to where if you are high margin, low volume or high margin, high value, and all you have are two to three projects a month. That's a much easier thing to manage. You don't have to build out some complex systems for this.

[00:32:58] We could talk all day about high volume and all the headaches that come with that. And all the cities you have to bill for that. But at the end of the day, There's 137 other podcasts where it's through some of those, we talk about building out systems. Actually, if you go back to episode, we got a series on this episode, 93, through 95, we have a three part episode on how you can work on your business instead of in your business.

[00:33:17] And those are three episodes where we talk about building out systems in your business to help facilitate some of the things that I just talked about, especially if you're a high volume business.

[00:33:25] Chris: Now, one of the things that's interesting to bring up, you know, kind of some of what's spurred this conversation is we've gotta get a shout out to our buds at the unstoppable recording machine. They have a dope business called nail the mix nail. The mix is a subscription. I think what it's like $19 a month,

[00:33:41] Brian: Yeah, they have like multiple tiers, but something like 19 a month.

[00:33:43] Chris: you get to watch like your heroes mix hit songs each month.

[00:33:48] And what's interesting about it is they're killing it with this business. But it's only $19 per customer. So there high volume, low margin. And I think what's interesting about that is what that business, they inevitably started at low volume, low margin. You know, it's not like they launched it and had 50,000 customers on day one, but this brings up an interesting point and there's a couple of concepts that really affect this quadrant.

[00:34:12] One of them is reoccurring revenue. If your business allows for people to ideally automatically repurchase again and again, and again, and again, and again, you can make the jump to high volume in an interesting way because your revenue becomes more predictable. So we're not trying to make a blanket statement here about like a low volume, low margin is good or high volume, low margin is bad, or, you know, obviously the opposite of that, whatever.

[00:34:38] Yeah. We want you guys to think about and to not just take for granted the way that your business operates, that there are opportunities to play in multiple parts of this quadrant. There are opportunities to say, well, I could make that work so long as. It was a reoccurring revenue thing or so long as this part of this service was more automated, but more delegatable.

[00:34:58] But one of the things to keep in mind, this is one of the most important metrics any business can have is a metric called lifetime value. Lifetime value is how much does a customer give you over their lifetime? And a part of that is how often did they give you money? Do they give you $40,000 one time and then never talked to you ever again?

[00:35:17] Or do they give you $19 a month for five years?

[00:35:19] Brian: I'd rather have the 40 grand upfront because I can remarket that into my business.

[00:35:23] Chris: Well, I would too, obviously.

[00:35:25] Brian: Bad example. The other example is do you get $500 from a customer one time, or do you get $19 a month for five years? That's a much different thing to look at because the 19 bucks a month sounds trashy until that becomes more than $500.

[00:35:40] Chris: And until that customer has lots and lots of friends.

[00:35:43] Brian: Also true. I will say in my own business, he'll just with four or five, six recordings. I had customers that were worth 10,000 or more for me, even if the average price per project was one or $2,000, they came to me multiple times over multiple years. And the lifetime value of that customer is much, much higher.

[00:35:58] So it's just much easier to manage a business. If your lifetime value of a customer can reach $10,000.

[00:36:04] Chris: Totally. And that brings up an interesting point in the low volume high value category is the low volume category could mean low volume is, and not that many customers each month, or it could need not that many customers total a perfect example would be if you are a mix engineer and you work with three big labels, you really only have three customers.

[00:36:24] I mean, depending on a lot of things, but in a situation like that, you've really only got a couple customers. But their lifetime value is ridiculously large. They're going to send you work again and again and again and again, and in a lot of ways. That's great. On the other hand, if you're doing a high volume, low margin play, no, one's your boss.

[00:36:43] If a client's a pain in the butt. You'll cut them loose and you move on with your life in the low volume high value play. It's a little trickier because if you have a problematic customer, you got to deal with it. You have to have a confrontation with them, and you might be in a situation where you can't afford to lose them.

[00:36:59] Personally, I like being able to afford to lose customers. It makes me sleep better at night.

[00:37:04] Brian: Tim Ferriss. It just talks about like, be willing to fire a bad customer in four hour work week. His business was a nightmare until he learned that he could fire customers. And that's hard to do when one customer is worth so much money to you. So that's one of the negatives of the high value, high margin kind of business.

[00:37:18] But again, this is not necessarily an episode to pick apart every one of these business models as like the pros and cons behind each of them. But to me, it's more of an episode to make sure you're aware of each of these four quadrants understanding where you are in this quadrant and understanding where you want to be.

[00:37:32] And making sure those things align, because if there is any, this alignment between those two places, you need to make changes sooner rather than later, or else it's going to be that much more painful to change later on. It's just like a bad relationship. The longer you stick in a bad relationship, the harder is going to be in that relationship in the future.

[00:37:47] Just go ahead and rip that bandaid off right now and reassess where your business is and where you want it to be.

[00:37:52] Chris: Well, one of the things that's interesting to bring up with this is I was talking to a guy last week who I think told me he charges $50 to mix a song.

[00:38:00] Brian: Okay. Why.

[00:38:01] Chris: And, and I was walking him through, you know, this and I was basically like, well, where do you want to be in two years? And he's like, well, I mean six figures.

[00:38:10] Right. That's why I'm talking to you. I was like, yeah, yeah, yeah, totally. Okay. Well, how many projects would you need to do to get to that point? How would you get that many projects? Take it to that point. And almost most importantly, how on earth, if you want to get to low volume, high value, how on earth are you going to take your $50 customer who paid you $50 and convince him in two years now you're worth two 50 and that he should pay you five times as much.

[00:38:37] When you raise your prices, that much you're going to have customer turnover. You're going to do all this work to have a bunch of customers that are willing to pay a certain price. And then you have to very carefully. Raise your price without losing too many of them, there are limits to that. You know, I just bought my Jeep Renegade.

[00:38:54] I love it. It's super cool. But if I went to buy another one in five years and it costs three times more, am I going to still buy a Jeep Renegade? Absolutely not. They're going to price me out of the market. So unless they're picking up a bunch of new customers in the meantime that business will die. This is tricky stuff, but you know, like Brian said, I think the biggest point in this episode is it, you look at your business, you take a look in the mirror and you say, am I low volume, low margin?

[00:39:18] Am I low volume high value in my high volume, low margin? Am I lucky enough to be high volume, high value? Where am I and where do I want to go? And what are gonna be the problems as this business transitions to a different part of the quadrant, or as I hit one of these plateaus of death. And I suddenly don't have enough capacity, just take on more projects or if I'm not feeling well, and I need to take some time off and do some work on myself so that I can keep up.

[00:39:45] There's a lot to keep in mind here. There's a lot to be thinking about. And the most important thing you can do as a business owner, just to be aware and to be thinking, and to have the courage, to ask yourself hard questions.

[00:39:59] Brian: So that is it for this episode of the six figure home studio podcast. I'm recording this ultra light two days after we recorded this episode. Yeah, I feel like my voice just keeps dropping deeper and deeper, but fortunately covert has not been hard on me this week. And for that, I can be grateful. So going back to this episode and what we talked about in this, I think I was pretty clear about what my thoughts were as far as which side of that quadrant you want to be on the left side, which is the right high value, either high volume, high value or low volume, high value, either way it's high value.

[00:40:27] And it's simply because if you were the type of person that all you want to do for a living is audio. You don't want to necessarily become a master marketer. You don't necessarily want to become a master business owner. You don't want to become a master at systems. You don't want to have to put all the work in that Chris Graham has had to put in his business, which again, Chris Graham has scaled his business to an incredible point, but it is only through great difficulty in great strife that he's been able to do that if you don't want to be that type of person, stick to the high income.

[00:40:55] High value side of this quadrant. And I urge you to stay away from the nickel and dime projects. You cannot build a sustainable business off of nickel and dime projects, unless you want to be a master marketer and a master at systems. So if you are stuck on the right side of this quadrant, where you're working on nickel and dime projects, and you're trying to move to the left side of the quadrant, there's a few steps you can take.

[00:41:16] That'll kind of leave you with here as well as some resources that I think will help you with this. The first step that I would take is. Go back and listen to episode one 37, where we talk about how you can D fuck your marketing message with a before and after transformation. Listen to that episode and take it to heart.

[00:41:32] Because if you can think through a transformation you're helping a client get through and then piecing together what services are required to make that transformation and making sure your messaging is matching the transformation. You're helping them. Actually make, it becomes much, much easier to charge a premium for those services.

[00:41:49] And it also goes back really well to episode one 36, when we talk about how you can make marketing 10 times easier using the Motown model, this is just a deeper way to look at this whole transformational marketing type of thing, where you're helping someone go from where they are to where they want to be.

[00:42:03] If you can really nail this. And it's not as hard as you think, if you can really nail this, though, whether you're a mixing engineer who's helping transform mixes, or you're a mastering engineer, who's helping transform. Songs and bringing them to life, or you're doing full production where you're taking someone with an idea and bringing it all the way to the finish line, or you're doing the Motown model where you're just going straight after the raw material to final product, wherever you lie with that.

[00:42:24] If you focus on the transformation, you will be able to charge a premium for your services. And it makes the process easier when it comes to getting customers for your studio. Because when you start doing things like I teach in my workshop where you go out and actually find leads, instead of waiting for them to come around, to find you, you don't have to find hundreds and hundreds of leads to make a living.

[00:42:43] It doesn't take that many leads in order to actually make a living. If you're charging a premium, when it comes to converting. A lead to a customer. It becomes much easier because you're the one focused on helping them make that transformation from where they are now to where they want to be. You're the one focused on bridging that gap.

[00:42:57] And then when it comes to charging a premium for your services, that's like the least important part to them. They don't care what the price is. If you're the one helping them actually get to where they want to go. You're not just another mastering engineer. You're not just another mixing engineer.

[00:43:10] You're not just another producer. You're not just another studio offering random services. You are offering a transformation to your clients. So, if you were trying to make that transition from the right side of this quadrant, to the left side of this quadrant, again, I recommend going back and listening to the previous two episodes episode one 36 and one 37.

[00:43:27] And then once you've done that go to the six figure home studio.com/workshop. And that is a workshop where I go over the three things you need to actually see that through to the end Lee acquisition cells. And charging a premium for your services. If you were stuck on the right side of this quadrant, and you're doing low value projects that workshop's not going to do much to help you, because it's going to be overwhelming.

[00:43:48] How many leads you have to go out and find it's going to be overwhelming, trying to get those people to actually convert to a paying customer. It's going to be overwhelming trying to get those nickel and dime projects when it comes to charging a premium, because you're not gonna be able to charge a premium because you're stuck on the right side of this low value land.

[00:44:03] So staying in the left side of this quadrant makes that workshop much, much more effective for you and your business. So again, the URL to that is the six figure home studio.com/workshop, 90 minute workshop, a hundred percent free. And it is a perfect followup to make this transformation in your business from the right side of that quadrant to the left side of the quadrant.

[00:44:20] So that is all I have for you this week. Hopefully you got some good takeaways from this episode. We'll be back at you next week, bright and early 6:00 AM Tuesday morning with another episode until next time. Thank you so much for listening and happy hustling.