Mick Unplugged - Tim Calise | Unleashing Business Potential:Business Growth, Customer Retention, and Pricing Strategies

Episode Date: August 29, 2024

Welcome to another exciting episode of Mick Unplugged! Today, we've got a special treat for you as we sit down with Tim Calise, a remarkable entrepreneur, finance expert, and tech innovator. Tim takes us through his incredible journey from the world of investment management to making waves in the fitness and technology industries. In this episode, he'll share the highs and lows of business expansion, the crucial role of self-awareness, and the magic of learning through experiences. Tim provides invaluable advice on building a successful business, including the importance of connecting with potential customers, refining products, and crafting a unique market position.He also dives deep into strategies for driving growth and customer retention, emphasizing the pivotal role of pricing and perceived value, especially in the service industry. With specific advice for businesses of various revenue levels and actionable insights, Tim equips entrepreneurs with the tools they need to thrive.TakeawaysSolving problems is key to success in entrepreneurship. It's important to identify problems that people aren't thinking about or businesses don't foresee.Innovation and technology provide opportunities to increase output, reach, and value creation in business.To drive growth, businesses can focus on selling to more people, selling more frequently, or raising prices.Service businesses should have multiple price points to cater to different types of customers and increase revenue.Understanding customer behavior patterns and addressing their needs and desires is crucial for business success.Aspiring entrepreneurs should make offers before building products and not take business decisions personally.Sound Bites"You have to solve problems because that's what people appreciate.""One of the greatest values is we can compress decades into days.""I truly consider you a thought leader in many spaces."Top 5 Questions Tim answer's in this episode:Transition Challenges: What were the main challenges Tim faced when transitioning from investment management to the fitness and technology industry, and how did he overcome them?Self-Reflection: How does Tim Calise suggest business owners use self-awareness and self-reflection to navigate challenges and setbacks in their business journeys?Customer Engagement: Why does Tim strongly advocate for speaking to potential customers before creating a product? What are the core benefits of this approach?Growth Strategies: According to Tim, what are the key strategies a business should implement to drive growth, and how do these strategies differ based on a company's revenue level?Service Industry Advice: What specific advice does Tim give to business owners in the service industry to maximize growth and revenue, and why does he stress the importance of pricing control?Connect & Discover:LinkedIn: linkedin.com/in/tcaliseInstagram: instagram.com/tim.caliseFacebook: facebook.com/timcaliseWebsite: timcalise.comPodcast: Leveling the Field ★ Support this podcast on Patreon ★ See omnystudio.com/listener for privacy information.

And we were talking about entrepreneurship, right? And how everyone wants to do it until they actually get into it. The reality that we come to is that we don't rise to the level of our aspirations. We fall to the level of our systems. If your top tier is not 10 times more expensive than your bottom tier,

that you are leaving money on the table. My wife is laying next to me and I had this terrible thought that if she knew just how screwed we were, she'd probably leave me. Welcome to Mick Unplugged, where we ignite potential and fuel purpose. Get ready for raw insights, bold moves, and game-changing conversations. Buckle up. Here's Mick. Ladies and gentlemen, welcome to another exciting episode of Mick Unplugged, where we challenge your why to really understand the fueling of your because. And today, we have an exceptional

guest that is a highly successful entrepreneur, a finance expert, and a tech developer. We're going to talk about that one. His passion for empowering others and sharing his knowledge has made him a sought-after advisor and mentor. Please join me in welcoming the inspiring, the influential, Nashville's own Mr. Tim Calise. Tim, how are you doing today, brother? I am great, brother. Thank you for having me on the show. I'm really looking forward to the conversation today. Same, man. Same. So you do a lot of really, really, really cool things, right? What was your journey that led you to becoming this successful entrepreneur and finance expert that you are? Yeah. So, you know, it's like that old adage. It's not where

you start. It's where you end up or some version thereof. When I started as a kid, I was the one who was probably insufferable to my parents. I was always on the move, taking things apart, putting them back together again, but ultimately solving problems that I saw around me. And I think that was a precursor to when I got into college, I started two companies while I was an undergrad and then was able to kind of took the reins off in my early 20s and got into the finance industry, the investment management business always been, I am not artistic in the traditional sense, but my art is taking problems, taking kind of complex things, that big ball of twine, if you will, and making sense of it and being able to craft a great story and engage and bring people along for the ride. I love that because that's also something that I tell people, you know, my business as a coach and leader, I tell people all the time, you have to solve problems because that's what people appreciate. And you've got to be able to solve the problem that people aren't

thinking about or businesses don't foresee. And I know, you know, following you like I do, that's one of your things, right? It's helping people not only understand the now, but more importantly, what can or should happen if you don't solve this problem. Yeah, absolutely. And, you know, I think, you know, great people can solve a problem. Experts can not only solve the problem, but explain to you how they did it. Right. And so, you know, one of the great things kind of sitting in my seat and I've got the scars to show it is, you know, you learn so much through the process. Right. And so I have the great fortune and honor to be able to package, you know, what's kind of in my head as a result of all of this experience and be able to put it

in a way that someone else can look at it and say, oh, you know, not only do I understand the immediate thing in front of me, but I also see all those potholes that I didn't even know to look for. And you're helping me steer through those. A great coach and inspirational guy in the marketing space, Dean Graciosi, partners with Tony Robbins. A lot of people know him. He said something like, you know, one of the greatest values is we can compress decades into days. And if you think about we learn, we pay the price of learning one way or the other. You either do it through the scars and the trial and error. We pay to hire a coach or join a mastermind group. But what are we really doing? We're acquiring insights instead of just information. Yeah. And I think those that have been able to go the furthest are the ones that can kind of compress that learning curve as much as possible.

That's amazing, man. That is amazing. You know, it's 2024. And the last 12 months, but really the last six months, we've seen so much in technology and AI. And I always tell people, be careful what you label AI because everything isn't truly AI. And that doesn't mean that it's bad, right?

It just means that, you know, you can slap something out there and call it AI. And now all of a sudden it's going to generate interest when really it's machine learning or, you know, it's just helping you do something faster. Again, not saying it's bad, just careful with labeling. What's inspired you to focus on innovation and technology in your business ventures? Yeah. And you're so spot on as it relates to AI. I remember I was investing in the markets in the dot-com timeframe and, you know, you can take any name, company name and add dot.com to it, and the stock would go up.

It was just the easy kind of affiliation, right? The thing that's always fascinated me about software and technology in general is it's one of the few lever points that we have to be able to increase either our output or our reach or the value that we can create, right? So, you know, so for me, I've always focused on technology because it allows for a consistent delivery vehicle, you know, because I come from the world of recurring

revenue, which means I think anybody can sell anybody anything one time. It's a heck of a lot harder to build that know, like, and trust factor and maintain that relationship over the course of time. And so if you think about, you know, take restaurants as a great example in the service industry, you can have any kind of restaurant you want. It's consistency is what matters in the restaurant industry. And so for us, anyone who has a service business, we should be thinking not just how can we always have a top tier experience. It's the reality that we come to is that we don't rise to the level of our aspirations. We fall to the level of our systems. And one system, there's

people systems, but there's also kind of technology systems that we can employ to create that high level consistent experience so that we can focus on the areas where, you know, our true Spressle sauce lives. Tim, like so much that I want to unpack and unplug there, man, like you are so deep. And that's why I love you, because I truly consider you a thought leader in many spaces, right? Like serial entrepreneur, but more importantly, you give such quantifiable advice, right? Like Tim doesn't give you fluff. He's not going to tell you what you want to hear. He's always going to tell you the truth. I always tell you the truth.

Being an entrepreneur is hard enough, right? And so there's definitely a brotherhood and sisterhood amongst business owners where it's like, if we're all crazy enough to go try to do this on our own and with the community in which we're able to surround ourselves with, I feel it my moral obligation to be able to help folks and just pour into them in any way that I can to help them accelerate their journey, stack the deck in their favor, whatever analogy you want to use. Yeah, totally agree, man. And I was talking to one of my friends, Gina Bianchini, on the podcast a couple of weeks ago,

and we were talking about entrepreneurship and how everyone wants to do it until they actually get into it. Like everyone sees the end result before they start, but most people never get there. And so I'd love for you to tell us a story or a moment where you had a challenging moment in this journey, but you overcame something. Right. And what you started is what you finished. I'd love for you to kind of talk through a challenging moment because, again, I'm not saying everyone thinks it's easy, but I definitely think for those that are listening that are early into their entrepreneur spirit and career or those that are thinking about it, I don't want to sell you and Tim doesn't want to sell you that it's easy

because I promise you it's much harder than you think, even the best laid plans, right? Like day one, it becomes hard and you got to much harder than you think. Even the best laid plants, right? Like day one, it becomes hard and you got to scrap it and start over. So Tim, I'd love for you to share some insights here. Yeah, so I'll share the story first and then I'll give you some learnings that I think your audience can take. So if you're listening to this, stay tuned. In a couple of minutes, I'll share with you some nuggets that you can implement in your entrepreneurial journey. So in between my kind of investment management season of my life, and so I basically raised capital for an investment company that we shut down proactively before the 2008

stock market crash, I moved into fitness and technology. And we actually, my wife and I were developers of a fitness franchise. And now just kind of for context, I'm in my late twenties. I had had some early success. My ego was probably driving me more than I care to admit at the time. And I felt somewhat untouchable to be like, this is easy. That fitness business like i can go raise hundreds of millions of dollars i'm sure i can do this and so we opened up one club then we opened a second and a third and a fourth and what happened was and i didn't realize it at the time but every time i opened another location driven purely by the idea that i want to be the biggest developer inside the system. I realized that I had outgrown my skill set as a business owner. And what that means for me was our profitability in one location. And when we had four locations, we were less profitable at four than we were at one.

And I kept leveraging and levering and levering both financially, mentally, energetically. And I kept leveraging and levering and levering both financially, mentally, energetically. And I put us in a position where effectively we had four locations and we were really struggling. And I can tell you exactly where it was. It was in the middle of the night. It was between 136 and 138 in the morning. I woke up, looked up at my ceiling, at the ceiling fan spinning. My wife is laying next to me, and I had this terrible thought that if she knew just how screwed we were, she'd probably leave me. Wow. And I use that as an example because I didn't have the self-awareness at the time to realize what business I was in. I realize, I believe that just putting more risk on the table was the way, was the path

forward. And I just take, I use that experience simply to drive me because you can't teach someone what that feeling is like. If you have not stood and looked over the abyss and said, I'm putting it all on the line, it's a very unique experience. Now, the learning that I can take from that was for anyone who's getting started, the game of business is an infinite game. There is no end to it. Number one, number two, the first business you start is almost

virtually not going to be the last one that you're going to start. And we'll also not be the one that's going to get you to where you want to go. Right. So if we acknowledge it, this is a game that has no end. So the purpose is to stay playing the game. And our first round is a learning lesson to ultimately where we're going to end up. Here's a framework that you can use, which is number one, if you're going to start a business, do not build the product or the service before you have spoken to a hundred people who represent the type of person you want to help so what that looks like is if i was starting a podcast i'm like i'd say so mick my name's tim so here's how it's going to work um i'm thinking of starting a podcast where entrepreneurs and business owners can learn the five lessons from every guest.

If I did something like that, would that be of interest to you? And would you be a guest on the show? And you're like, yeah, that sounds amazing. Or, you know, there's 17 other people doing the exact same thing, or I don't find that valuable. That feedback is so critically important. And I'll, so number one, interview before you build. Number two, what that allows you to do is you have a built-in audience. So you always create the market before you build the product. And the last takeaway and the reason why I have found this to be the best way to build a business or to start a business is because when you do those interviews and you, let's just say you said, I don't like your idea. I haven't invested

my ego and my sweat equity and my capital to building something that you're saying no to. So the learning happens before we attach our pride to the thing, because then we can be infinitely flexible. And it's just a search for the right answer, not the answer you want. That's amazing. Ladies and gentlemen, I told you, Tim's always going to tell you what you need to hear, not necessarily what you want to hear. And so speaking of that, Tim, what people need to hear, for the listener or viewer that's a business owner, and I don't care if they're an entrepreneur 10, 15 years in, at some point, you get to that moment where it's like, I really have to drive growth, right? And I've got

a, not just little growth. I'm talking about, I need to figure out the plan to 2X, 3X where I'm at. What are some key strategies that you use to drive growth in the companies that you work with? Yeah. So if you have an existing business, you know, there's only a couple of ways that you can drive revenue. So you can sell more people, you can sell more people things more often, or you can raise your prices. Those are really the only levers we have to pull. So the question that I would have, number one, is tell me about your product stack. Because in my opinion, up to about a million dollars a year in revenue, the only thing that matters is the product. Because what you're searching for is what is termed product market fit. Product market fit. What that means is you have an offer

with an audience that matches. Just think about in the beginning, you say, do you want to buy my thing? And somebody says no, or they'll say yes. You're just looking for that match. So up until about a million dollars, you want to make as many offers as you possibly can. So if you're under a million a year in revenue, all you want to do is to go to your existing client base, your maybe ex-clients or former clients, and anyone in your universe and make them an offer. So for the entrepreneurs that I work with, until they hit a million dollars a year in run rate, the only metric we care about is how many offers did you make today?

It's simple, not easy, but if that's where you are right now, after you're done watching this, I want you to go and find someone in your universe and make them an offer. An offer could be jump on a call, watch a thing, download a lead magnet, buy my widget, join a class, whatever it might be. Just do something because you want the yes or the no to learn. That's it. If you're over a million dollars, what I generally will recommend is you probably have too few products and your pricing is probably not optimized. So from about a million a year to somewhere between three and five million a year, it's all refining the product and building the consistent delivery vehicle. Over five million a

year in revenue. It's all people systems. So for most folks, it's kind of that zero to $5 million sprint. Uh, and that's really where I specialize. That's, uh, that's where I, and a lot of it is because it's owner operators. Like I love working with the person who has the idea. Once you kind of get kind of further down the line, it's a very different story. Right. No, totally. And so that second person, right. So, so that second business owner I love because I see a lot of them in my daily, right. It's like, okay, I'm not quite five, but I'm not a startup. Right. And it's, it's usually a couple of things and you hit on it. You've got to either get in front of more people, right? Or increase your prices, right?

Like to me, those are the two big caveats. To the person that's listening, that's like, well, I'm in the service industry and I don't necessarily control all of my pricing. What advice would you have? Oh, you're speaking to my heart because I love the service industry. So I actually just actually did a presentation.

I had 150 people this past weekend that I did a talk to, and it was on this exact topic. So fundamentally, where people go wrong is number one, service business owners chronically underpriced. Now, if you have one product or one price point, this is going to be really important for you. Over a million dollars, you should have at least three price points. You have an entry level, a mid tier and a high level and the top tier. If your top tier is not 10 times more expensive than your bottom tier, I will tell you right now with 100% certainty that you are leaving money on the table. You are not giving your VIP clients the method to spend more with you. You are forcing them to not pay you enough. And if your next hesitation is, if I ask too much, they're going to say, no, I will tell

you from experience, it is the exact opposite. The more someone pays, the longer they stay. And it will give you the ability to get onto the virtuous cycle of the more they pay, the more resources you have, the better your service delivery can be, the better your services, the better retention will be, and the more opportunities you have to engage that person over the course of time. So please, please, please promise me that you will have at least three price points and give three different types of people a very welcome home within your organization. And, you know, I set you up for that because I knew you were going to go there

because you talk about it a lot. And that's what I needed the people to understand is you've got to have the three tiers. And I'm going to take it a step further with one of my mentors, Damon John. You know, he said, hey, Mick, if you're top tier, if you think it's worth $50,000 and that's what you charge. Right. Like don't don't try to give people what you think they want. If you feel like your your best service is worth 50, then that's what you charge. And then you'll figure out really quickly if you're worth that or not.

But if you are, if one person's willing to pay you that, then you're worth it. And then you need to go find those other people that are like the person that's willing to pay you that. And so I love your take on that too. Yeah, you're spot on. And I'll go you one step further. If you're thinking I can't charge $50,000, here's the phrasing I want you to use in your inner

dialogue. What needs to be true for someone to be excited to pay me $50,000? What needs to be true for someone to be excited to pay me $50,000? Because what that does is it disconnects what we, the kind of rational side of our brain, like how am I going to fulfill that to, okay, so if I know my general audience, if I was to charge 50K, that means I need to deliver $500,000 worth of value. Okay. What is worth $500,000 to my audience? Okay. So I was in the, and to put some really fine point on this, I was in the fitness business, as I mentioned, when we started, we charged $69 a month, one tier only. By the time we actually got the business model dialed in, our average monthly revenue went from $69 with a three-tier pricing system

to $247 a month. And our conversion rate doubled. We charged more and got more people to sign up. It is counter to everything we believe in the idea of supply and demand because service businesses don't work like physical products. Your price point is a reflection of your perceived value. So without that high price, you're going to be leaving money on the table. We could do this all day. I think we need to have getting your masters with Tim and Mick. Count me in. You tell me when and where and I'll be there. Because this is what business owners need to hear. These are the conversations that people actually need to have. Because, you know, again, as someone who's scaled and exited multiple

businesses, I tell people this, it's not hard. It's not easy. I never want to make it sound easy, but the principles of business really are not that hard. And it's are you going to stay committed and are you going to get out of the way yourself? Because, Tim, you hit on it. The perceived thoughts that we have, right, we limit the ability my average ticket to $249,000, and the old Tim was probably sitting there thinking, there's no way someone would pay $249,000 because you're living out of your wallet, right? Well, no. I don't know the total number, but there's a lot of people on the earth. There's a lot of people in the United States, right? Somebody's going to pay that if you have the value, and they're going to feel like they're getting more value than you're actually giving. And that's what you want to be able to do. So Tim, I appreciate that, man. Like, this is amazing. This is amazing. Spot on. Spot on. Amazing. So, you know, again, you're in multiple avenues. You're doing a lot. How do you personally stay ahead of industry

trends and ensure that your businesses remain competitive? So for me, I stay as connected as I can to the customers that I serve. I do, my job is to know what kind of when the music is slowing and when to evolve the business model. So I actually don't look at competition all that much simply because, and we could probably spend an hour on this, I am a big believer on creating a market of one. To put a kind of an image to that, I think there's a perception when we're starting a business that we're going kind of into an existing market and we want to like pull those people out to come and be, to do business with us. I believe that we should go into the blue ocean where there's no competition and say, this is who I am. And this is how I think and then attract those people that are philosophically and morally aligned to what you're doing. And so because of that, it's very much relationship driven. It's not transactional.

So my job is actually not to necessarily defend from the outside. My job is to not give people a reason to leave. And so the more I can understand what problems we're solving, how we're going to solve them, can we do it faster with less effort, with less capital, whatever it is today. And then I believe in the idea that businesses are basically a series of open loops and closed loops. So when I say, hey, Mick, is this a problem you have? You'll say, yes. Great. I can solve that problem. But by the way, if the problem was, how do I go from $100,000 a month to $500,000 a month? I can solve that problem for you. And the thing

you might not realize right now, but I know intimately is when you're doing $500,000 a month, your business is going to start to break. And I even know how it's going to break. So once you get there, I'm going to say, Hey, Mick, right now, there's only three freedoms you're desiring. There's time freedom, mental freedom, and financial freedom. Which one feels the furthest away for you? Oh my gosh, I'm working 27 hours a day. Awesome. You're running a half a million dollar a month business.

If I could get your time back, would that be of interest to you? Oh my gosh, that'd be amazing. Awesome. I actually have a six-week accelerator course on how to extract yourself from the day-to-day operations of the business and to feel like the business is not running you, but you're running it. Sound fair? Absolutely, Tim. Awesome. Now you've just made another sale. And the reality is if somebody doesn't make another buying decision, at least every nine months, you're going to lose them.

Which means for anyone out there who's running annual contracts, if you don't get someone to buy after nine months and you ask them to renew at 12 months, there is a 60% likelihood that they're going to leave. We're going to school with Tim right now. Wow. I didn't know that stat. Because cancellations are a lagging indicator. The time to get the renewal is not at the point of renewal.

The point is 90 days before that. Yeah. That's when they're making the decision. That is an amazing statistic, Tim. Yeah. Wow. But these are the things we built into our process. So we're not surprised by these things because we know.

We know what usage patterns look like. You know, in fitness, I knew that if we didn't have a client who worked out eight times a month or more, they had an 87% chance of canceling within 30 days. So in your business, what are the behavior patterns that look like someone who's disengaging? When do you capture them? How do you reverse those? What do they need to hear? How do they need to be resold? Who's responsible for that? How do you capture them? How do you reverse those? What do they need to hear? How do they

need to be resold? Who's responsible for that? How do you track it? These are all things that you have to think about. And that proves my point. Again, when people ask me how I scale the way that I did, and I say it wasn't hard, but it wasn't easy. It's knowing your information. The biggest thing that you should do as the CEO of your business, and I know you're going to wear many hats, but your CEO hat, you need to know all the information in your business. Not necessarily metrics, the information that the metrics are telling you, because to me, that's the key. Yeah, spot on.

And I have a great resource for anyone who's listening. I put this all on one page. It's good for you. It'll clarify your thinking. It'll also be an asset and an artifact that you can use with your team. So if you go to timcalise.com slash audit, A-U-D-I-T, that's T-I-M-C-A-L-I-S-E dot com slash audit. You can download that for free. I'll make it available to your audience. It's a great, there's a little video attached to it and you can walk through and it'll actually help clarify a lot of these milestones and actions you should be taking. That's awesome. So I'm going to make sure that link is in the show notes and then also within the McUnplug community. So those

that are members of the community, I'm going to make that link directly available as well. And then maybe I'll get Tim to come in the community and kind of talk through that and give him some time to go through the services that he provides. Yeah. Be happy to. Amazing. So really quick,

rapid fire with Tim Calise. All right. Shoot. Your college or university you graduated from. George Washington university in Washington, DC. Love it. Your favorite college sport. I was a rower. I was a division one athlete in D.C. Love it. Your favorite college sport?

I was a rower. I was a Division I athlete in college. I was rowing. Okay. Rowing. Your favorite college basketball team, and why is it the University of North Carolina? My favorite college basketball team, I actually grew up a UNC fan, and this is like back in the day. So I will go with UNC.

Thank you. Thank you. I don't even have to edit that out. Not to pander to the audience, but- No, no, no, no, no. If you could give two tips to an aspiring entrepreneur, what would those two tips be today? Make offers before you build and don't take it personally. You are not the business. That was a mic drop, Tim. We're going to go deeper. Part two of this, we're going deeper into that because again, people get in the way and that's why they don't scale.

Tim, where can people follow you and find you? Yeah. Instagram, Tim.Khalise, T-I-M dot C-A-L-I-S-E. Facebook, Tim Khalise and LinkedIn, Tim Khalise as well. You can find me on all the major platforms. Awesome. What do you have coming up in the future? I've got some big things coming. My vision in the next five years is to build a private equity portfolio doing a hundred million a year in revenue and doing that with as the number two to aspiring entrepreneurs. So I work as the collaborative partner to service business owners. Awesome. Everyone, do me a solid and make sure that you are following Tim, but not just following.

Interact and engage with Tim because he is one of the most engaging folks that you will find out there. He's not just, you know, go to my website, get this. He actually has dialogue with the people that engage with him. So do me a solid, don't just follow, but engage because we all want that and need that too. Tim, brother, I appreciate you. I can't wait to do part two. Like this honestly has been one of my favorites. And I'm saying that and not editing that out. This has been one of my favorite episodes because we're giving the people what they want. So I appreciate you, brother.

I appreciate it. Looking forward to coming back for round two. You got it. And to all the listeners and viewers, remember your because is your superpower. Go unleash it. Thank you for tuning in to Make Unplugged. Keep pushing your limits,

embracing your purpose, and chasing greatness. Until next time, stay unstoppable.