Ben Herman – Do you have a system for your business?
I’m sure you know how to deliver the products and services for you business, and you probably have a system to help you get it right, every time. You’ve likely honed that system over time, as you gained more experience. Do you also have a system for running your business? That’s a completely different set of steps and things you need to have a profitable business. Ben Herman has grown his successful entertainment business and now teaches others how to develop these systems for themselves. He even sells his system to others, so they can hit the ground running, even if they’ve been running for a while.
Listen to this new episode for some ideas on how you can develop systems for your business, especially if you have plans to grow and sell it someday.
Ben’s passion for the DJ industry began at the age of 13 and by 17 he had launched his very own DJ business into the world. He has worked with some “big dogs” in the industry like Will Smith, Too Short, E40, Clinton Sparks, Red Man + Method Man of the Wutang Clan, Paul Wall and Mims just to name a few. He was voted the Best DJ of the North West Coast, as well as held weekly radio show residencies and now his company has become one of the most established and top-rated DJ entertainment companies in Northern California. Since then, he launched DJ University and ProfitableDJ into the world and most recently ProfitFlo, his three businesses have grown, so has Ben. His main focus now is to grow leaders and empower others to achieve similar results as him through his speaking engagements and mentorship programs.
Connect with Ben:
Ben Herman (@benseanherman) • Instagram photos and videos
Ben Herman (@benseanherman) | TikTok
podcasters.spotify.com/pod/show/benseanherman
Attend a ProfitableDJ Workshop Information
Join a monthly workshop just check the website for the next one: https://profitabledj.com/
Get 62% off the next monthly Profitable DJ workshop with Discount Code: IKNOWALAN
If you have any questions about anything in this, or any of my podcasts, or have a suggestion for a topic or guest, please reach out directly to me at [email protected] or visit my website Podcast.AlanBerg.com
Please be sure to subscribe to this podcast and leave a review (thanks, it really does make a difference). If you want to get notifications of new episodes and upcoming workshops and webinars, you can sign up at www.ConnectWithAlanBerg.com
Listen to this and all episodes on Apple Podcast, YouTube or your favorite app/site:
- Apple Podcast: http://bit.ly/weddingbusinesssolutions
- YouTube: www.WeddingBusinessSolutionsPodcast.tv
- Spotify: https://spoti.fi/3sGsuB8
- Stitcher: http://bit.ly/wbsstitcher
- Google Podcast: http://bit.ly/wbsgoogle
- iHeart Radio: https://ihr.fm/31C9Mic
- Pandora: http://bit.ly/wbspandora
Below is a full transcript. If you have any questions about anything in this, or any of my podcasts, or have a suggestion for a topic or guest, please reach out directly to me at [email protected] or contact me via text, use the short form on this page, or call 732.422.6362
Please be sure to subscribe to this podcast and leave a review (thanks, it really does make a difference). If you want to get notifications of new episodes and upcoming workshops and webinars, you can sign up at www.ConnectWithAlanBerg.com
– Scaling into a pivot. Oh, I love when I have guests on that fit into more than one of these groups. Listen to this episode. Hey, it’s Alan Berg. Welcome back to another episode of the Wedding Business Solutions podcast. I am so happy to have my friend Ben Herman on today. Ben, how you doing?
– Good, how are you, Alan?
– I’m doing great. Ben is with Profitable DJ and he has other companies, which we’ll get to in a second over here, and I was just recently actually on your podcast and I said we got to get you on here, because we were talking about so many different things. So the three groups that I generally have my guests on, or people have scaled a business, check, you did that. People who have carved out a niche, check, you’ve done that. People who have pivoted within or into or out of the industry, and check, you’ve done that as well. So we’re going to check all three boxes when I load this up onto YouTube so people will see that.
– Do I receive a prize for that or?
– Well, folks, you can’t quite see it in here, but just over my shoulder there. Where is it? Over my shoulder, if you’re watching on YouTube, is my hat rack with my swag from when I was on your podcast, so that’s a fourth check because I got swag from you, so there we go.
– Awesome, sweet.
– There we go, there we go.
– Sweet. And so you give me a hat and we’ll get some bourbon next time or something like that.
– Oh, love that one, I’m holding you to it.
– Okay, all right, we’ll do that. Let’s get into the episode here. So let’s start from the beginning here. So you were, and are, you have an entertainment company. Your entertainment company is called?
– Accurate Productions.
– Okay. But you started how long ago and it was just you, when did you start and how did it get going?
– Yeah, so technically speaking, I actually started it back in middle school, but that was, you know, just like any entrepreneur, right? It’s under the table, cash transactions and really as a high schooler. But I did perform, you know, a majority of my high school dances in front of my peers. I was a terrible prom date because I took my prom dates to an early dinner so I could set up for the gig and then perform, which I thought was kind of a cool thing for, you know, my girlfriends to be able to say “Hey, that’s my boyfriend up there” right?
– Oh, well that was, that was like me and bands when my girlfriend would have to sit there and watch the band, right?
– Exactly.
– So it’s the same thing when I played in band.
– You can relate. Absolutely.
– I can totally relate. But I got the girls, so, you know, she was she watching the band? And I got the girls, it worked. Okay.
– And then in my junior year, I officially started the business, so called Accurate Productions, got a business license, and then at 18, so shortly after I finished high school is when I incorporated the business.
– Okay. So that’s really on paper, I would say.
– Right. Which is, which is again, a real business at 18, which already puts you years ahead of people who don’t even realize they have a business until something happens. And they’re like, do you have business insurance? And they’re like “Oh, I need that?” Right. There you go. All right. now at that time, 18, it was just you?
– Yes, it was. Yeah. So I did have a guy that was, he actually became my best friend. He was bugging me in the hallways. He’s like “Man, I’d love to help you, I’d love to help you.” And he was into amateur bodybuilding, so it was definitely like twice my size. And I was like you know what, I could use you to lift the gear and all that kind of stuff. Help me with, with acting as a security guard and so forth. So just started having him come along to my various gigs. At that point it was a lot of school dances and nightlife events. And then later on in my twenties is when I really got into the private events as well. But really the way to look at it is, I owned a job, not a business back then.
– Okay. And this is going to lead into where we get to Profitable DJ. So started as you, when did you start adding more people and where are you today with that?
– Yeah, so I first began adding folks really in my early twenties. it’s kind of a funny story that I’ll give you a little bit of context on, is as a senior in high school, I didn’t complete any homework assignments or classwork assignments. Instead, I set myself up in the back of each classroom and read business books instead. So I made a decision at, you know, 17 years old as a junior after reading “Rich Dad, Poor Dad” that I was no longer going to finish school. That I was going to double down on my career and become an entrepreneur. And so I knew that the things that I was learning in the classroom weren’t going to be relevant for my future. Not to say that it wasn’t relevant for anybody else, but for, for my future. I didn’t see it really. And so that’s where I really nerded out on business. And, you know, I was really already introduced to a lot of the greats in my late teens and early twenties that I tried to start hiring folks and scaling a team larger than myself. So that really happened in the early twenties.
– So go back to high school for a second there. What was the inspiration to tell you to start reading business books at 16, 17 years old?
– Yeah, great question, Alan. So I don’t come from a wealthy family, it’s directly the opposite. So I actually grew up part of my life in the trailer park. So my, my mom and dad split up when I was fairly young, four years old, my mom’s German. So I actually lived in Germany and Europe for a while. And then I grew up there in a pretty nice middle-class neighborhood, I would say. But then when I moved back with my dad in my, you know, preteens, he lived in the trailer park. And so that was a quite a large culture shock to me. And I knew that, hey, you know, I knew that as a child, I had no choice over the environment that I was set in because of my parents’ decisions. And that I wanted to make sure that I empowered myself to be successful enough so that way when I had children, I wouldn’t put them in that same position. So that was one.
– Okay.
– The second was just the fear of failure. The third is the fear of ending up back in the trailer park. So I’ve run ever since as an adult as far away as possible from the trailer park. Now, that’s not to say that there’s bad people in the trailer park, there’s a stereotype of who hangs out in the trailer park. And I actually met quite a lot of folks that are actually highly educated. They just didn’t have the financial education really. Right. So they were very academically educated, but just lacked how to actually generate money and how to get themselves out of that environment. So that would be probably the start was just that inspired me to figure out, well, how do wealthy people live? Like, I mean, clearly there’s a reality that there’s people who don’t have wealth and there’s people that have wealth. So that means that it’s a possibility for me. Right? And then it was my godfather’s, or really my godparents, they had a friends that were in the real estate industry, and I’d stayed over at my godparents house in Sacramento and they’re like “Young man, I want you to read this book.” and it was “Rich Dad, Poor Dad” by Robert Kiyosaki.
– Wow.
– And at that point, I had never read a book from cover to cover. I’d always been the person to pretend in the class to read, but I didn’t actually read. I would be daydreaming instead. And I just struggled academically. So I always felt like, man, is there something wrong with me? Am I stupid? Like what’s happening with me? Why is it that it’s so easy for some folks to pass these quizzes and these exams and I’m literally getting tutoring after school and still only getting C averages. Right? And so once I read that book, it’s almost like that book recognized me because it talked about how so many entrepreneurs actually are falsely accused of having ADHD that they’re struggling academically in school, so they’re stupid, right? And they tend to be the ones that actually are the geniuses of the future that invent all sorts of things and change marketplaces and so forth. And statistically speaking, I mean, we’re talking about, you know, Steve Jobs, Bill Gates dropped out of college, right? I mean, Richard Branson didn’t even finish high school. Henry Ford didn’t finish middle school. So all these greats gave me permission to go, maybe I’m one of them and maybe I don’t need to finish school.
– And what was the Malcolm Gladwell book? The 10,000 Hours.
– “Outliers”.
– Outliers, right. How you talk about people that you met intelligent people in the trailer park, but they weren’t financially intelligent. You know, people that have an incredible skill, like the person, I think he said into the person with the highest ever recorded IQ can’t hold a job, Because his, the brain just can’t function, at that level to do something, to hold a job, but can absorb so much other information there. So you just needed to find that. And some people it’s music, some people it’s sports, right? It’s just what it is that was that thing. But like you said, it spoke to you. And thank goodness, you know, to your godfather who gave you that book, because that was the one that resonated for you. that was the one that exactly kind of tipped that. All right, so along the way that you grow this business, which again, successful business and you knew well, what a lot of people didn’t know first you needed a business, right? That was the thing, is you didn’t want a job, you needed a business. Right. And that growing that. again, a lot of people don’t find that out until they’re twice as old as you are, when you found that out.
– Absolutely.
– Growing it. But also you keep mentioning the word wealth and I understand the difference of the concept of money versus wealth. And a lot of people don’t, right? because they equate money with wealth, but it’s not necessarily the same thing. And wealth, by the way, does not have to be financial wealth. Wealth can be many other things there. But, you know, accumulating wealth versus accumulating money or accumulating stuff because a lot of times we’ll see, have you read “The Millionaire Next Door”? Have you read that book?
– My daughter’s actually reading that one right now. Yeah.
– Excellent. Right? The person driving the Ferrari down the street might be hocked up to their eyeballs and the person driving the 10 year old car, you know, living in a nice but modest house like Warren Buffet, not a 10 year old car. Yeah. Lives in the same house he bought in the seventies. Right. The man can clearly afford another house. Right, right. He’s got a few tens of billions of dollars. He could afford another house.
– Yeah. But it’s not important to him. His house is fine, his two-year-old car is fine and then gives it to a charity. Right. Wealth for him means something different. Right. It did different things there. So you grow this business along the way, you decided to help other people. And there’s two ways that you’re doing that right now you’re doing in terms of skills and you’re doing in terms of business. Right. And touch briefly on the skills, because it’s something that it’s important as part of your story, but it’s not where I want to get to. So gimme the story about how you teach other people DJ skills.
– The DJ skills. So really that came from skilling my own DJ company, right? So at first what I did is I fell trapped to, well I’m going to go out and hire out in the marketplace and hire folks that already have the experience. And it quickly fell on its face because I found out that folks that were used to taking a hundred percent of the revenue home had a hard time taking a haircut on that because they didn’t understand that there’s so many expenses involved with running a business, right? And that there we have to split the pie realistically, to make sure to sustain, right? So it’s not even out of greed purposes. And then in addition to that, also folks that had bad habits that they picked up on the way because a lot of times DJs don’t learn from a formal education system, right? They’re usually learning within the industry from afar, kind of studying DJs from afar and so forth. And they may pick up a few bad habits along the way and it’s very hard to un-train that, right? Versus starting with a clean slate. A person that has absolutely no experience at all that’s really passionate and sees them becoming a DJ, you know, and we can be that source of education to them and empower them to learn how to become DJs. So it really came down to figuring out how could I create a systematic curriculum that could then literally just get folks efficiently through from not knowing how to DJ at all to becoming professional DJs and scoring five star reviews and awesome video testimonies from our company within a short amount of time. So we’ve actually been able to scale it down to, from when I first learned, it took me two years to learn how to DJ my first hire, it took me six months to teach them. And we’ve now been able to perfect it to get it all the way down to just 60 days. So two months.
– Wow.
– From No experience to professional.
– And this is for your company, you do this for other companies too, or just for your company?
– So, yeah, so for our company is where it was founded, right?
– Right.
– And then we’re like, well, yeah, I think we could sell this, right? Okay, sure, business, yeah, right.
– So through a licensed partner program at Profitable DJ, what we essentially are doing is not only the training curriculum, but literally the entire business in a box. All of our systems from A to Z to running a business profitably and efficiently and scaling it beyond yourself, you know, where you’re turning a a job into an actual business is what’s included a licensed partnership at profitable DJ. And so that training curriculum is part of that.
– Right? and you used the word system a few times and it’s an important, important word for everybody listening here because especially if you’re looking to scale, you have to have that foundation in place. Absolutely. And if anybody has read “The E-Myth” or “The E-Myth Revisited” this is exactly what they talk about. I’m sure Ben, you’ve scoured that book, you know?
– Oh, yeah.
– More than once, right?
– 10 Times probably 10 plus times. Yip.
– Right. And I knew you would because you’re like me. if your book is really resonating, you’re like, read it again, read it again, you missed something, read it again, do it again. You’re going to hear something else. Systems, the, some people listening know this, I don’t know if you know this, I used to own two franchises, franchises or systems, right? We basically bought the system from this franchisor which is this set of things that are proven to work, right? And that it sets you up for success. And so why does somebody buy a franchise? Because they could start from scratch, right? They could say, you know, I don’t want to buy a McDonald’s franchise. I want to open up my own hamburger joint. Well, besides the branding and all the stuff people know that it’s all these systems in place. If anybody’s ever worked in a place like that or any type of a franchise thing, there’s very specific ways that they train you and that’s what gets you up to speed faster. So tell tell us about Profitable DJ. So what are some of the systems that you’ve created? Again, you did this for yourself, but then said “Hey, this can be replicated.” There’s all these people out there, creative, talented DJs, but they don’t know how to run a business. What is it that you actually did for yourself that you now offer for others?
– Yeah. It’s funny that you mentioned franchising because originally my dream was actually to start a franchise in the mobile DJ space. Because to this day, and this is a dream of mine that I had since high school, right? So I read Ray Kroc’s book, which those of you that don’t know McDonald’s was actually started by two brothers, right? And then Ray Kroc is the one who actually took that McDonald’s and turn it into the franchise that you know it to be today, right?
– Right.
– And to this day, there’s no such thing as a household brand of mobile DJs across the world. Right? And so I knew that I was put on this planet for a reason, that there’s a purpose for me to impact people’s lives in a positive way. And to also revolutionize the DJ industry was like my niche, right? So of course there’s plenty of other ways to impact the world, but I feel like, you know, there’s a reason that I was drawn to become a DJ and then learn how to build and scale a DJ business, right? And now I’m empowered to be able to forward that knowledge and that experience to the next generation of folks that can now hopefully impact their lives in a positive way. So franchising, I looked into that actually very seriously. And at first what I was trying to do, and I kept just running into a wall over and over and over again and I was trying to turn a DJ into an entrepreneur. So I was actually trying to hire within folks that showed a little bit of leadership skills and showed passion. I mean, we have a lot of buy-in a great culture in our company because we spent a lot of intentional time dollars actually into fostering our company to be a thriving culture. And I just kept running into this wall of like, every time I found the guy or girl try to train them up to then become a leader to then go and expand to another market. And every single time they would get cold feet, something would happen and they would exit. And I was just really frustrated because this wouldn’t be just a short process. I mean, we’re talking about, I would try to groom these folks for a couple of years. So it was a couple years of my life just to end up right back at square zero, right?
– Okay.
– It was actually my mentor that called me out and he is like, you know, Ben, I think you’re trying to turn DJs into entrepreneurs instead of just going after entrepreneurs that want to run a DJ business. Right? And I was like, yeah, I like that. But I think there’s so many tiny nuances, especially when it comes to a DJ business. You have to understand how to DJ in order to lead other DJs, right? And so there is that component that we can’t just act like any other standard franchise of just a standard investor, a credited investor that is sitting on a decent amount of cash that is looking at this, you know, just to add another investment to their portfolio. It needs to be someone who’s passionate about DJing that’s willing to lead DJs as well, and that understands our world. So instead I was like, you know what, there’s so many passionate business owners that are DJs out there, and they’re all struggling because they’re all solopreneurs, they’re all just owning a job. And a lot of them, I looked at statistics, which is crazy, Alan, so it’s 70% of DJs in our country make less than $6,000 a year. Can you believe it?
– Oof, oof.
– Only 1% in our industry actually generate over six figures in revenue, top-line revenue, not even EBITDA. We’re talking about just top-line revenue.
– 1%?
– 1%.
– Wow.
– Right. So that was shocking. I was like, okay, I think this is what I was put on this planet to do, is to impact the world and revolutionize the DJ industry by helping these, these folks. Right?
– Wait, so where did those numbers come from? Just curious.
– So digital DJ Tips actually is one of the main surveys that we drew that from. Have you heard of Digital DJ Tips?
– No.
– They’re based out of the UK They’re actually one of the largest online DJ school platforms out there.
– Okay. They’re way larger.
– And are they talking about all kinds of DJs or event DJs?
– So they did come out with a survey that literally studies all types of DJs. Right?
– Okay.
– So we’re talking about mobile DJs and also party/event DJs. But the numbers that I was drawing from were mainly mobile DJs.
– Mobile DJs, yeah. Okay. Crazy. Yeah. So 1%. Wow, and did they say what the number is? What do they estimate the number of DJs in the country or the world to be?
– Yes. It’s well over 2000 that they surveyed.
– Oh.
– So That’s a decent survey.
– Right, But I mean I’m saying how many DJs do they think there are? Because I always get asked this question, how many DJs are there? I was like, I have no idea. There’s just a lot, you know?
– Yeah. I don’t know that statistic either, unfortunately.
– Okay.
– Right. because again, you know what is a DJ? If we go onto Craigslist, there’s a DJ if we go on to bark, there’s a DJ. If we go onto The Knot and Wedding Wire and you know, there’s DJs all over the place. There’s part-time, there’s full-time. They write all, all these different things there. But wow. 70% earning $6,000 or less. So clearly not full-time. I hope. I don’t know how you can eat on that.
– Yeah, for sure.
– Right. And some people think a side hustle is a fine thing for them. It’s extra money and there you go. I still think, and I think you would agree with me, that side hustle or not, it’s a business. Right?
– Exactly.
– It’s still a business. It can be more profitable. You still have to do things the right way. I remember back when I was doing TaeKwonDo there was guy in our TaeKwonDo school who was a drummer and he decided to get into DJing. My son’s college fraternity was looking for a DJ for their formal, and I said “Hey, you know, here’s a guy. I’m sure it’ll be within your budget.” Right? Because college fraternity, they don’t have a lot of money, but they were having it at a Hilton hotel. And the Hilton wanted his insurance certificate and he didn’t have one because he didn’t have insurance. And I said “Well, why don’t you join the ADJA and you can get part of their insurance, right? Be part of their insurance. It’ll probably cost you what you’re going to get paid for this gig, but now you’ll have insurance for a whole year. And he said “Nah.”
– Oh really?
– Yeah. He said, no, that was it. He couldn’t see past this one gig. He wanted the money. I said, well you’re not going to get the money
– Yeah.
– So why don’t you get the money to pay the insurance and now you have the insurance and the next time somebody says “Hey, you can’t walk into my building without insurance.” You’re like “Here it is.” Right here it is. We’re recovering.
– Also, what happens if you don’t have insurance and something bad happens? Right. Then you’re totally backwards in your life. that could be a devastating event in your life ,yeah.
– Right. Again, you and I thinking like business people, right? I have insurance with my business. I go to trade shows, I have insurance, annual insurance, I have annual travel insurance because the what if I get stuck in another country health issues or whatever. I don’t buy it per trip every year. I do. That’s done. It’s why I have a generator on my house. The power never goes out since I put a generator on my house. Right. That’s what insurance is for. Okay. So, the systems, like what would you say are the top two or three things within your system there that are lacking from most of these people that this would be good for?
– Yeah, I would say probably one of the main ones that I’m seeing a pattern in right now is customer acquisition and lead conversion. Right.
– Okay.
– So how do you acquire more leads, more prospects, more folks that are interested in your service? And how do you convert those folks into actual paying customers?
– Okay. That’s probably one of the biggest ones that I’m seeing the roadblock in. And then folks that are actually above six figures in revenue because we have plenty of those as well in our partnership. Those folks are now looking at trying to hire a team. And a lot of them tend to go the easier route because they think they’re going to save on tax advantages by going with contractors versus employees. Right? And there’s so many pitfalls that happen with working with contractors. And by the way, I don’t mean to offend anybody, you know, if you’re a contractor out there, that’s awesome. Like we need those as well. But when it comes to creating a multi-op in the DJ space, at least a company that’s larger than yourself, especially with branding purposes and so forth, there’s so many added bonuses that are not tangible, they’re the intangibles that you gain Working with W2 employees versus a contractor.
– Right. And besides the legalities of it, there’s a lot of people that are floating in a very, very gray area.
– Yeah.
– Yeah. They’re walking that gray area. And it’s like people that are doing things not necessarily above the board financially and just hoping they don’t get audited by the IRS. It’s the same thing here. if the labor board comes in, there are countless horror stories. I know you’ve heard them, I’ve heard them where people have to pay big, big money for the back taxes and the stuff they didn’t do when they had these people.
– Yeah,
– Plus it’s the control you have over them. You know, I need you to be here on this day doing this representing me. and you don’t want that contractor handing out their business card under the table when it was a gig that you got. I mean, all these different things there.
– Yeah, absolutely. Its a little bit of mindset, just like the fellow that you mentioned that wasn’t willing to invest in insurance. Right?
– Right. These entrepreneurs are telling themselves, well, I’m saving on taxes. And it’s like, no, no, no, you’re paying in so many other ways that it makes it not worth it at all.
– Right. And again, it’s the business mindset versus the creative mindset. Right. What makes you a great DJ does not make you a great business person. What makes you a great caterer, photographer, florist, invitation company, officiant, whatever. It doesn’t make you a great business person. I have a business because of the industry having people that didn’t know how to run a business. So I don’t know if you, I think I might have said this on your podcast. I started speaking because my advertisers in my wedding magazines, back when I was publishing two wedding magazines, the franchises, a lot of them were struggling in business because they were really, really talented creatively, but they didn’t know how to run a business. And I remember I walked into this one photographer’s office and the bookshelf behind him was half business books and half photography books. And I was like, oh, this guy gets it. He gets it, right? You need photography books, right? You need to improve your skills. Absolutely, you need to do that. But he also had that, and I rarely, rarely ever saw that in anybody’s office. I would only see their technical skill, whatever, manuals, books, you know, training and stuff like that. And at and at conferences, I was the anomaly. I was the guy wanted to come and talk about business, but you know, the people go to a DJ conference like “Hey, how do I mix?” right? And “How do I set up my crates?” and all. And you go to photography conference like, “Well let’s go to the one on shadows and light and, and whatever.” Like yeah, yeah, yeah, yeah, yeah. But let’s go to the one on how to sell it. Let’s go to the one on how to make money. Right. But I mean, it seems pretty common now, but when I started speaking at conferences, I was usually the only one talking about any business topics.
– Wow. And again, I had to kind of break through with that and convince conferences, yeah, I can come and talk about this. They’re like, but you’re, you’re not a DJ. Right, right. That’s good. That’s good. Let me come and not talk about DJing. Right. Let me do that.
– Well, thank you so much Alex, for doing that because again, the industry needs you. Yeah.
– Well and again, I think the industry needs with what you’re talking about here with Profitable DJ because you understand, just roll back here, you decided not to do this for anybody. You said, “I’m going to do this for DJs.” because I understand being a DJ and I understand running a DJ business, I understand the mindset of these DJs who are great DJs and love their music and all that kind of stuff, and are struggling to have a profitable business. And you know, a profitable business is what is the future. Right? That’s your retirement, that’s your education, your kid’s education, that’s your new house, your car, your security when COVID hit.
– Good causes that you want to invest in. Absolutely.
– Right. and having financial security means being able to do what you want to do. Right. Whatever that is. If spirituality is your thing, go for it, right? But you still need to support that somehow. Right. We’re not monks. We need to support ourselves.
– Right. So tell me what is profitable DJ then? is it an in-person thing? Is it an online thing? What is that?
– Great question. Yeah, so it’s actually a component of both, right? So as a matter of fact, we have a mastermind coming up on April 24th . and I believe this is going live shortly before.
– Shortly Yeah. Like right right after this, yeah.
– Yip.
– Yeah. So really the licensed partnership is in-person and also online but majority online because it’s just more convenient for folks. Right.
– Okay. So there’s actually weekly coaching sessions in addition to also all of the access to the systems. So maybe we should actually come back to that initial question in regards to what is licensing and franchising and so forth. Really franchising is licensing as well. And the way that that, to simplify it is a franchise can license their brand. So the logo and the name and also the business systems, right? Where licensing a licensing deal is usually either/or they can only license the brand or only license the system. They can’t do both. because if they do both then they’re falsely acting as a franchise. Right.
– Okay.
– And so what we’ve decided to do is we’ve decided to only license the business system. And there’s actually a multiple reasons why. One is that to gain DJ’s buy-ins because DJs are really proud of the companies that they created and the DJ names that they came up with. And to ask them like, “Hey Mr. and Mrs. DJ, we’ve got this system, that’s awesome, but you got to pretty much hang up your hat, your name tag and take on ours and put ours on.” Right?
– Right.
– That hurts the ego a little bit.
– Yeah.
– It’s a harder sell, right?
– Yeah. But in addition to that, selfishly, it also helps protect us because as you know, especially nowadays when you walk into a McDonald’s, it may not be the way that Ray Crock wanted it to be back in the day because really when Ray Crock was alive, he’s a perfectionist, right. He actually wanted every single one of his units to be immaculately clean and customer service to be top par. Right?
– Right.
– And I think that, you know, McDonald’s has definitely taken a fall in quality and of course that’s why it gets its reputation now. And so the challenge is, well, if someone, an operator ends up not fully following the system, doesn’t take care of their customers in an ethical way, then it actually would tarnish the franchise’s name.
– Right.
– Where it actually helps protect our name because we’re only selling the system not our name.
– Right.
– So we get to protect our name. And by the way, full transparency, all the DJs that are in our license program get to keep a hundred percent of the business as well. It’s not an equity deal. So they get to have a hundred percent control over their business. We’re not here to tell them what to do because we don’t own a piece of their business. We’re here to merely help them and encourage them, provide them right systems and also the right advice. But they get to pick and choose what they want to apply in their businesses.
– Right. And with a franchise, franchisor is taking a percentage of your sales and that’s what they do.
– And they force you, I mean they can literally take that control over that unit if you don’t follow the rules.
– Well, kind of how I got started on this side of the business is I was a franchisee, I was a successful franchisee and the franchisor bought my franchises back because they wanted me to come and work for them running markets that they had taken back through default and through litigation. So mine were actually the first franchises they bought back that were not in trouble. But they wanted me and I could not be a franchisee and work for the franchisor at the same time. So,
– I see, Conflict of interests, makes sense.
– Conflict of interests, right. So that’s how I went. But the company at the time had about 26 franchises that they had taken back and this is not one that had thousands like McDonald’s or Subway or you know, something like that.
– Significant number, yeah.
– It was a significant number. And what they needed then is they needed sales directors to run the sales teams. And in very many cases, we kept the franchisee on, we hired them as a salesperson because they were good at that. What they weren’t good at was running a business. And it was kind of the same thing there. Right. So that one piece, like you said, there’s these different pieces there. They were good at that. That was like being a DJ, right? This person could go out and sell ads in a wedding magazine. What they couldn’t do was run operations. They couldn’t run finance, they couldn’t run all that other stuff. And we were an exception to that. But it helped me because I understood both sides. I understood all of that. So, so profitably DJ, again, licensing, you’re licensing your system. It gets somebody up to speed faster, but somebody that’s already gotten existing business. Right. what do you see the people that have come to you so far, right? Because you have people that are doing this right now.
– Yeah.
– How long have they generally been in business? are you seeing a difference with people who’ve been in business shorter versus longer? Are they coming to you later in their career? Earlier in their career? what are you seeing?
– We have them all over the board.
– Okay. The only thing that they all have in common, which is really interesting and ironic, is that every single one of them are older than I am. I’m the youngest one in the group, which is interesting.
– Okay. All right.
– yeah. so that’s a weird word standpoint right? But yeah, some folks are literally starting from the ground up. Like I’m literally helping them form their businesses.
– Okay. And then we have other folks that are full-time DJs, but solo. And then some folks come in that are already multi ops. So they already have multiple DJs, usually contractors working for them.
– Right. And, you know, performing, you know, let’s say 50 to a hundred events a year.
– So somebody could be like a good candidate for that would be somebody who’s part-timer looking to go full-time. That right? That sounds like that would be a good candidate because they get the business going there. Right. Or single op looking to go multi op because that’s part of your systems as well there.
– Exactly.
– Or somebody who just has been doing this for a while and just is like, I’m not making the money I should be making. Right? I’m just not profiting the way I should because I know a lot of us, when we first get into business, we look at that top line, look at the top line, look at the top line, like, woo woo, look at this, look at this. Right. And then, and then the end of the year comes in like, where’s where, where’s all that money? Where, where, where, where did that go? Right. Right. I remember when I left The Knot, 2012 was my first full year in business and I looked at that top line and thought I did pretty darn good for my first full year in business. And then I looked at the net and I was like, wow, that is not good at all. Like that’s not going to work. That’s not going to work.
– Yeah. Because all of a sudden expenses that were covered before when I was a salaried employee, like my travel, my internet, my telephone and my technology and all that all came out of my pocket. And you’re like, Oh, yeah. Oh my health insurance. Oh yeah. All that other stuff there. So you start to start to realize that and I think we’ve all been told, those of us who’ve read the business books, if you’re going to start a business, whatever money you think you need to have put aside, that’s half of what you really need.
– Yeah, exactly.
– You can need a lot more money.
– And the other thing also is you want build a business that’s ready to sell even if you never plan to sell it. Right? That’s E-myth principle is you want to build it to sell and EBITDA is a real thing. So EBITDA is really, look at it as a fancy term for net profit, right?
– Okay, wait, hang on. Not everybody listening here knows accounting like you and I do.
– You want me to break down the actual acronym?
– Yeah, so say what the acronym is and then tell everybody what it is.
– Yeah, so EBITDA is acronym and it’s Earnings Before, sorry, E, B
– Interest.
– Interest.
– Depreciation.
– Depreciation.
– Taxes
– Taxation and Amortization.
– And Amortization.
– I see the acronym in front of me, I can leave it off real fast, but It’s a Lot of letters for sure.
– Right, but it’s an accounting term. It’s a very common accounting term. Right? So it’s your earnings before these things. because some of those things like depreciation is not a cash thing, right? You’ve already bought the thing, you’re putting the money out, but you’re depreciating that asset. So it’s going to affect what your accounting statements look like, but it doesn’t affect your cash flow because you’ve already bought that thing over there. Taxes. You have to have that money aside if you anybody has not read “Profit First”, please read “Profit First”, have your tax account, have it separate.
– Shout out to Mike.
– Yeah. Shout out to Mike Michalowicz. I sent my taxes off to the accountant the other day and I’m not sweating at all what he tells me. whatever I owe, because the money’s there. It, it’s already put aside. Yeah, for sure. The additional that’s going to go into my retirement plan again, you should all have one of those. I’m not worried about that. The money’s already put aside. I just need to know what the number is because two years ago I it was a good thing, but I contributed way too much. And then he said, okay, this is your contribution for the year. I said, yeah, I put in like $10,000 more than that. He’s like, yeah, we’re going to kick that to next year. Okay, we’re going to do that.
– Yeah, yeah, yeah.
– But again, the reason that accountants do EBITDA is because you want to look at the actual cash, right, The cash in, the cash out, stuff like that. So that’s where that, okay, so now we’ve geeked out a little bit on accounting here.
– And also on top of that. So, the way to look at this is that you want to build it to sell, even if you never plan to sell it. And the way that enterprise value is calculated is usually on EBITDA right. Or net profit. So it’s a multiple on net profit of any given year, maybe the average over the last three to five years. Right?
– Right.
– So I was looking at a business deal because it landed in my lap. It was a event rental company back at home in California and it had negative EBITDA. So if anything, it’s like, why would you ask for anything, if anything you should pay me to take this asset off your hands because it’s a burden.
– Right.
– I’ll turn it around for you, but you got to pay me to turn it around for you. You know what I mean?
– Right, right.
– But so many business folks are thinking because they, they’re so personally attached to the business, Like, well it’s all my sweat and tears and the sacrifice that I put into it and so forth. And unfortunately the reality check is that that doesn’t matter. And that actual marketplace value, folks want to invest in something, just like you want to invest in stocks or in a real estate investment, right. You want to get paid from that asset. You don’t want to have to pay into it. You ideally want to get paid from it. Right?
– Right. Now again, here’s the thing. If you’re building a business and you actually do want to sell it, one of the most important things is if that business is dependent upon you personally, you, your name, your reputation that goes when you leave, that goes when you leave. Now, I made a decision in 2011 when I left The Knot that my business was going to be, even though the business name is not alanberg.com, the website is alanberg.com because I was not going to have any other speakers, trainers, consultants, I made a conscious decision. I was not building a business to sell. That doesn’t mean I don’t do what Ben just said, which is to run my business as if it could be sold. But I know that when I shut off the lights, that’s it. it’s done. But that was a conscious decision. Previous business, when I was publishing my magazines before the franchisor came to me and wanted to buy them so I would go work for them, I was positioning my business to sell. I had been 75% of the sales and I wanted to get that down to 25% of or less. I had gotten it down to a third and I was on my way down to 25% when they came along and said, Hey, we want you to come work for us. But I had gotten down from 75% of the sales doing them myself to 33% working down to 25. because at 25 that’s enough that somebody understands some of those customers are going to leave, some of them are going to stay, but it’s a small enough piece that it wouldn’t stop them from buying the business.
– Yeah. But if turn it around, if it was, if I was 75%, you’re going to lose a lot of those customers because the relationship went away. And anybody who’s listening here, if you’re a planner or if you’re a venue, if you’re a photographer, whatever, you have relationships and they’re with you. People do business with people and when you go away, you turn off the lights, you’re trying to sell that business. They’re like, yeah, but you’re not here to make those relationships. They’re going to lose.
– Yeah. They could lose half or more of that business overnight.
– Absolutely. Absolutely.
– Cause they’re buying from you.
– And if you’re listening to Alan and I right now, right, and you’re thinking to yourself, well that’s cool guys, but you know, I’m never playing to sell my business and all this kind of stuff is really not relevant to me. The way that I would encourage you to think about this is that it is super relevant to you because you want your time freedom back. You’re building a business to, ultimately we all want to build a business to create time freedom and financial freedom for ourselves. However, we all end up usually entrapped in our own businesses, right? And stuck in our own businesses. So that’s where it becomes really valuable to listen to this advice because if you build it as if you were to sell it, you’re actually going to make the business less reliant on you. Because a lot of times investors are not even going to entertain purchasing your business if you are involved in the daily operations. Right? And so the more that you can remove yourself and the way I like to look at it is like it’s the best firing yourself. Like usually most folks don’t want to get fired from a job, but entrepreneurs should actually look forward to firing themselves. Right?
– Right. if if you can go on vacation and the business runs without you, part of you feels bad because it’s like they don’t need me. You know, they don’t need me. But, right, that’s the ego part. Right. But the reality part is that means that you’re making money wherever you are, anytime of the day, anywhere in the world. And it doesn’t rely. So if you are thinking about selling.
– And it also becomes a choice too, right?
– Yes, that, absolutely.
– Instead of like a necessity. And I think even if you choose to still stay in the business, at least you’ll walk into your office with just this liberating feeling of knowing like, I don’t have to be here, I choose to be here now.
– Right. Right. There’s a difference.
– Yeah. I had somebody posted on Facebook the other day, what does retirement look like for you? I said, retirement looks like I no longer enjoy what I’m doing and I found something else I enjoy more. Maybe I’m getting paid, maybe I’m not. That’s what retirement means.
– Love that, yeah.
– Right now I love what I’m doing and I’m getting paid well for it. So why would I stop? Right. It’s not the money that keeps me doing it. What keeps me doing it is that I love it. I actually just last night I had a phone call with two guys in Australia and we firmed up me going there again this August. I was there twice in 2019. I’m supposed to go in 2020, obviously it didn’t happen. And I’m going back again this year and it’s like I pinch myself and who gets to do this stuff? Well I do and it’s a choice, right? because I don’t have to get on a 15-hour flight if I don’t want to.
– Yeah. Yeah.
– But I’m going to because people are seeing value from what I’m doing and that brings me joy and if it brings me joy and it brings me money, great.
– Yeah, it’s a win for everybody.
– So we have gone over what I normally would like to do timewise here, but we could talk all day because I think we did the same thing on your podcast. We were just sitting there and you’re like,
– Yeah, we connected very well.
– We do. So let’s do this, I’m going to put it into the show notes as well, but tell people where they can find out more about Profitable DJ.
– Yeah. So I’d actually love to invite any mobile DJs out there that might find interest in what we have to offer instead of actually signing up for the licensed partnership. because that’s a pretty big leap. Full transparency it’s very expensive. Right? Is actually to just get to know us first and let us provide real high impact value to you and prove ourselves upfront. So I’d love to invite you to our upcoming Profitable DJ workshop. Run these once a month. And really what we cover in this workshop is to empower you to create a promotion plan that pays you upfront to track your dream clients and also book more events. So let me say that again. It’s a promotion plan that pays you upfront to draft your dream clients and also book more events. Most folks pay to advertise themselves. We’re actually teaching you a method that gets you paid to market market yourself. And not only are you going to just break even, you’re actually going to make profit on the front end before you even book all the events from the folks that you tracked.
– Wow, and you do this once a month? Right and you do this once a month?
– Once a month. Okay. So again, I’ll have in the show notes, is there a website that we’re going to send them to?
– Yeah, so it’s ProfitableDJ.com/workshop
– Okay.
– And since you are all cool with Alan, and I’m cool with Alan, I want to hook you guys up and we’re going to give you 50% off your ticket. Just use the coupon code. “I know Alan” at checkout. 50% off. Okay.
– “I know Alan” I love it.
– So full transparency, it’s a hundred bucks usually it’s $97. So you get half off of that, which is awesome.
– Oh gosh, I mean, people listening have wasted more money this week on Facebook ads that didn’t work for them, right?
– Yeah. Less than $50. So you’ve got to do it. Well thank you so much for that Ben.
– Of course, just clarify too, it is a virtual workshop, so it’s no travel is necessary, right.
– Okay.
– It’s just three days live with me personally coaching you for three days virtually.
– Okay. And this is, is this only for DJs? Just because we got other people listening?
– Yeah, I would say it’s the most ideal for mobile DJs, but as you and I know Alan, I mean business principles are business principles. So a lot of these things, I mean, this promotion plan can work for any vendor type in event industry. I mean we’re talking about coordinators, caterers, it can work for photo booth companies. I mean anybody. But it’s really specifically designed for mobile DJs.
– Okay. But again, if you want to read between the lines, you know, I know Alan.
– We’d love to have you.
– There you go, I know Alan. Ben, all right I got to cut us off because we’re going to be here forever. Thank you again so much. I really appreciate you joining me here. Again, thanks for the swag. Bourbon’s on me when, when I see you next, I don’t know if it’s going to be in Chicago or in Vegas, but we’ll, we’ll make that happen.
– Sure. Yeah.
– All right. and we’ll put into the show notes, how to contact you, how to follow you, all that kind of great stuff there. Thanks again for joining me, so much, appreciate it.
– Thank you so much, Alan, for having me on the show. It’s always a pleasure speaking with you.
I’m Alan Berg. Thanks for listening. If you have any questions about this or if you’d like to suggest other topics for “The Wedding Business Solutions Podcast” please let me know. My email is [email protected]. Look forward to seeing you on the next episode. Thanks.
Listen to this and all episodes on Apple Podcast, YouTube or your favorite app/site:
- Apple Podcast: http://bit.ly/weddingbusinesssolutions
- YouTube: www.WeddingBusinessSolutionsPodcast.tv
- Spotify: https://spoti.fi/3sGsuB8
- Stitcher: http://bit.ly/wbsstitcher
- Google Podcast: http://bit.ly/wbsgoogle
- iHeart Radio: https://ihr.fm/31C9Mic
- Pandora: http://bit.ly/wbspandora
©2023 Wedding Business Solutions LLC & AlanBerg.com
