BiggerPockets Business Podcast 54: $4M in Revenue in 6 Months Through Software & Licensing with Brennan Tolman & Nik Krohn

BiggerPockets Business Podcast 54: $4M in Revenue in 6 Months Through Software & Licensing with Brennan Tolman & Nik Krohn

50 min read
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Have you figured out a good business model that is consistently making money but don’t know how to expand? Itching to take your local business national? Ready to put your business on auto-pilot, generating recurring income while others do the work?  If so, this episode is for you!

Brennan Tolman and Nik Krohn—founders of Tolman Media—were in that same boat just a couple years ago. They had grown their local wedding photography business in Salt Lake City and were ready to expand. But they quickly decided that owning locations around the country or franchising the business wasn’t for them—too much work, too much red tape.

So, they figured out an even better plan, creating an online marketplace and licensing the business to dozens of other entrepreneurs.

On this episode, Brennan and Nik walk us through the process they used to scale their business and then license it all around the country—and around the world. The two were able to generate over $4M in revenue in just six months by letting others do the bulk of the work—while they simply collected the royalties.

Whether you’ve already explored the idea of licensing your product or business, or you’re looking for a new tool to add to your business toolbag, Brennan and Nik walk you step by step through the process of taking your business to the next level. And making LOTS of money in the process!

Make sure you stick around to the end, where Brennan and Nik tell us the single most important metric to the success of your business.

Check them out, and subscribe to the BiggerPockets Business Podcast so you won’t miss our next show!

Click here to listen on Apple Podcast.

Listen to the Podcast Here

Read the Transcript Here

Carol:
Brennan, Nik, thank you so much for joining us today. We’re so looking forward to chatting with you.

Brennan:
Absolutely.

Nik:
Thank you. We’re excited to be here.

Brennan:
We’re pumped.

J:
Hey guys, so great to have you on. Okay. Our audience I think knows what to look for in this, because I’ve talked to you guys up in the intro. But I want to hear, before we jump into the business that you guys are building and growing, I want to hear a little bit more of your backstory. So, what got you to the point that you got into this business and you started this business together? How’d you meet each other? What are your individual backstories, as well?

Nik:
You go for it, dude.

Brennan:
Okay. It’s actually a great story that’s overlapping. I’m a videographer by trade, I’ve done that forever. When I was like six, I was running around with a camera, and all that stuff. And so, I was in high school when the transition from tape to digital happened, if you guys remember that. So, that was a big deal, because, suddenly, cameras weren’t like 500 grand anymore, you could get one at Costco. And so, that was my perfect timing, outliers opportunity right there. I started shooting weddings myself, people were asking me to shoot. And-

J:
I’m going to interrupt you really quick for a second.

Brennan:
Please do.

J:
Most of our listeners are audio, they don’t have the video, so they don’t see who’s speaking. But that is Brennan that’s speaking right now.

Brennan:
Correct.

J:
So, we have got Brennan and Nik, but that is Brennan that’s speaking now.

Nik:
Cool. Cool.

Brennan:
Yeah, so sorry. So, me, Brennan, I’m a videographer. I come from that background. People would ask me, “Hey, can you shoot my wedding?” And I was like, “I don’t even know what a wedding video is. I’ve never heard of that before.” Because it wasn’t a thing, besides the two hour VHS back in the ’90s, or whatever.

Brennan:
I was part of that brand new posting on YouTube wedding video phase, kind of a thing. Got my startup upon requests. And then, eventually, started this company because my wife learned how to do photography and people wanted a bundled deal. They just said, “We don’t want to pay for two different people, two different terms, two different contracts. We just want a bundled deal, we want a good price.”

Brennan:
So, we started going out together and shooting together. And I saw, like, “Hey, that’s a neat, right? People don’t want to hire two separate people who don’t know each other and can’t work well together.” That was the initial, where this all started. And that’s my background.

Nik:
Yup. I’ve been a digital marketer for, pushing 11 years now. In the last few years, I spent tens of millions of dollars in Facebook ads, Instagram ads, and that’s been my background. Always been entrepreneurial, selling everything under the sun, in a consulting manner. And I jumped into entrepreneurship right after dropping out of college, honestly.

Brennan:
And so, the way that we met, just the short version is, back when I was in college, I was in an entrepreneurship class and one of our assignments, they said, “Go online to the local classifieds listing and find a business for sale. Call them and interview.” I said, “Okay.” So, I call, and he’s like, “Digital marketing business for sale.” And I’m super interested in Facebook, and all that stuff. So I give him a call, and he’s like, “You know, I don’t really want to sell the business, but I could train you how to do it for 2,500 bucks.” And I was like, “Okay.” I did not have 2,500 bucks.

Nik:
Creative marketing, yeah.

Brennan:
Yeah. I’m like, “Oh, how am I going to get 2,500 bucks?” I had this job where I was running a Facebook page on campus. And so, I’m like, “All right, let’s see what I can do.” I walk into my boss, I sit down, I’m like, “Hey, there’s this opportunity. There’s this guy, for 2,500 bucks-

Nik:
There’s this guy.

Brennan:
… if you guys can pay for it, I will be such a good marketer. And I’ll be able to do this, and this, and this.” And to their unlimited credit, they said, “Okay, it’s about the same cost as sending you to some seminar.” So, they wrote me a check. I meet this guy at Kneaders. My wife comes along because we totally thinks it’s a scam, or we’re going to get murdered. I hand him the check from the university, and then that’s… Literally, the university paid for us to meet.

Nik:
You got the cause to pay me, I’m like, “Yeah, that takes some guts.”

Brennan:
Yes. So, that’s how we met. And then he mentored me for a while, and then we eventually became friends. And he gave me a call, early last year about this time, and said, “Hey, man, what you’re doing is cool, and I think that I want in. And I think that I could bring some serious value.” Which he absolutely has.

J:
That’s awesome. Okay. So, first tip for everybody out there that’s listening, if you’re looking to sell mentorship, or training, or courses-

Brennan:
You get grungy, baby.

J:
Yeah, just put your business for sale. And when people call, you say, “I’m not selling you my business-

Carol:
That’s very nice.

J:
… right, I’ll train you.”

Nik:
Oh, no, man.

Carol:
No, maybe it’s the right situation there, what’s wrong with it?

Nik:
Hey, and it worked.

Brennan:
Look what happened.

Nik:
It’s been profitable ever since, hasn’t it?

Brennan:
Absolutely.

Nik:
Working together.

J:
That’s awesome. So, take us through how the business started. It sounds like Brennan, you started the business, but when Nik, when you came into the business, how did you guys work together? What was your roles and responsibilities? How did you divvy up the work? And how did the business grow from there?

Brennan:
Totally.

Nik:
So, yeah, tell him about the first few years, Brennan.

Brennan:
They were awful. It was terrible. Hindsight bias, whenever you look back, you’re like… And I tell the story, it’s like, “Oh, what a genius.” Absolutely not. It was a rough, rough ride. It was-

J:
And what year was this when you guys finally met?

Brennan:
Well, we met in like 2016, but he came on in 20-

Nik:
’19.

Brennan:
… 19.

Nik:
2019.

Carol:
Oh, okay.

J:
Okay. This was just last year?

Brennan:
He observed for a while.

Nik:
I did watch for several years, and I watched the ups, and I watched the downs, and the roller coaster. And I can totally sympathize, because I’ve been there, you know?

Brennan:
Yeah. Essentially, like I mentioned, my wife and I started shooting the double package. People started calling us. So I said, “Hey…” And then somebody tried to book us for my birthday, and I was like, “I don’t want to go shoot a wedding on my birthday, but I don’t want to lose this money.” You know?

Nik:
Happy birthday.

Brennan:
Yeah. So, I said, “Well, can I subcontract it?” So, I hired a photographer and a videographer. Trained them on how I would do it, and then they went out and shot. And I was like, “Hey, that worked pretty well.” And we were literally meeting, by the way, as our little team meetings, in my parent’s basement with little Caesar’s pizza. That was the start of Tolman Media, right? We were like, “How do we shoot weddings better?” You know? And then, like all, I guess, businesses start at their mom’s basement, or whatever.

Brennan:
Then, eventually I said, “There’s something here.” So I started hiring more videographers, more photographers. Teams, and teams, and teams, and got to the point where now we had 20 teams. I could just book any date ever and provide an awesome value to the brides. But with that came all sorts of nightmares. Contractors started over billing me. I was paying on Facebook Messenger, like send the money, which you’re not supposed to do for business. Now I’m permanently for life banned from sending money on Facebook. And then I tried Venmo. Same thing.

Brennan:
I had no idea how to pay people. I didn’t know payroll solutions. I didn’t know anything. I was just like, I learned how to make some money. I learned how to provide value and flying by the seat of my pants, patching the holes of the ship while trying to sail along the seas. So, it was hard. I would always… We would get together maybe once every six months and I would just vent. I’d be like, “Nik, I’m dying.”

Nik:
I’m like, “You got to do this, this and this.” And he’s like, “Oh, yeah, I’m going to do this.”

Brennan:
Well, and I was paying contractors too much. That was the biggest thing. Is, it wasn’t even super profitable because they were like, “We’re the same as you, dude. We’re in college too, dude.” Like, “We-

Nik:
I think I beat you up for years, just about that fact.

Brennan:
Absolutely.

Nik:
I was like, “These kids are making 125, 150 bucks an hour.” And like, “It’s just incredible. You know what I mean?”

Brennan:
And he kept saying, “You got to pay them less. You got to find a way where we can not pay them less, but find a way where you can actually be profitable so that they can continue to get jobs.” Because we go under then adios to their jobs. Basically, when he came on, it was initially to help us build a software, which has been a game changer, called Dragon Sumo. That’s what I am, about the URL in high school. So-

Nik:
This is going to be the coolest software ever.

Brennan:
Yeah, literally, the logo is a little fat Sumo holding the dragon. I paid like 50 bucks for it. But what it is, is it allows instead of us just assigning a contractor a wedding, and having to text 20 different people saying, “Are you available? Are you available? Are you available on June 10th?” Right? And getting a bunch of yeses and nos. That was a nightmare. It’s a software where as soon as my salesperson books a package, they’re all… All my photographers and videographers, they’re all approved. They’re all awesome. They’ve been through our rigorous training.

Brennan:
She shoots out a notification via an app that they get, saying, “Ding, ding. July 10th, wedding. Here’s the date, here’s the venue. Here’s the bid range.” And so, I’m going to tell you the maximum that I’m willing to give you for the job and you can bid lower if you’d like. And so, Nik was the one that actually built this. Now photographers can say, “Oh, the max bid is $350, I’ll do it for $300, because that’s a Tuesday and I’m not going to book that on my own.” And so, Nik was the key in wire framing, implementing that software, building it, beta testing it amongst contractors.

Brennan:
And so, it’s, number one, saved a huge scheduling hassle. And number two, save some money. And number three, he built this cool algorithm where each of the contractors have a quality score. And so, it’s not just the lowest bid that gets the job, it’s the lowest bid that also has the highest quality score, based on the algorithm. So, he was key in getting all of that bill and moving the company towards having some proprietary softwares.

Nik:
And just to note, I love the model that Brennan was doing this whole time. You run advertising, you book people, and then you outsource everything. And watching him, I was like, “Wow, this is incredible.” I don’t know if you actually know how good this actually is.

Brennan:
I didn’t.

Nik:
And then I came in and said, “Hey, I’m interested in the business,” mostly primarily because the model was incredible, and how many weddings he was booking. And two, I could provide value in the form of the software. And the competitor, the competitive nature between all the contractors just drove the price down significantly on what they opt in to pay. And honestly, that helped the margins dramatically. And so, that’s when I got involved, about a year ago.

Carol:
Very, very cool. So, thank you for sharing that. I want to unpack so many different things-

Brennan:
Sure.

Carol:
… is all. So, just to recap, back in the early days, sounds like it was around 2016-ish, you and your wife were tag teaming a photography and videography package, if you will.

Brennan:
Totally.

Carol:
Your birthday rolls around, you get a request on your birthday. Like, “Ah, ah, I am not shooting and working on my birthday, not happening.”

Brennan:
Absolutely.

Carol:
So, out of necessity, you chose to hire a contractor to do that for you. And then you realized that there was value in that. I think there’s a really great tip for our listeners, right? Once you start realizing that you can teach somebody else to do what you’re doing, though that really launches the first step in you growing a business, in you growing a company. In you realizing that you can implement trading systems and processes to get other people to do the job-

Brennan:
Totally.

Carol:
… that you were previously doing, right?

Brennan:
And it’s terrifying. It’s terrifying to do that. Because-

Nik:
Letting go of control, man.

Brennan:
Because you are the brand of your company. Whatever it is, it’s you, for the first while. And so, it’s so scary to… I mean, I never did the training before, it’s scary to do that. It’s scary to let go. You will get customers that are like, “Where’s Brennan? You’re not Brennan. Why aren’t you here?”

J:
But that’s the shift. You’re going from-

Brennan:
Totally.

J:
… an employee having a job, where you go to work every Saturday night, or Friday night, or Tuesday night, or whenever you get a client, to suddenly, you’re no longer just an employee that has a job, you’re now a business owner that is, quote unquote, employing dozens or hundreds of other people. That they’re contractors, they’re not employees, but they are doing the work for you. They’re generating the income for you, you’re passing payment onto them. You’ve gone, again, from being an employee to a business owner here.

Brennan:
Totally.

Nik:
It’s a switch, baby.

Brennan:
And that’s what he kept saying, he’s like, “Dude, stop filming weddings.” Like, “You got to stop selling weddings.”

Nik:
“You got to stop.” And I guess that ripped the bandaid off, you know?

Carol:
Excellent.

Brennan:
Well, and it’s a shift, because if you’ve read the E-Myth Revisited, right? You get your technician, you get your manager, and you have your owner. And I started as a technician. Those people who had any degree of service business, whether it’s concrete, or whatever, you’re going to start as the technician. And so, you have to grow. And so, for me, my secret… Secret. Was a fetal position every night until it was better.

Brennan:
Just being like, “Oh, man, this is so hard.” But then I went to the bookstore, I grabbed 10 business or self-help books off the shelf. I’d sit down, and I would just skim. And I would bring a notebook. I would just skim through, write down these principles, get the brain moving. Then I would usually buy the two that I most resonated with. Go home, read them, learn, implement immediately. That was what I did to stay alive.

Brennan:
It was the continuous education of myself. Something that, no offense to college, but it didn’t teach me. The schooling system did not teach me, it was school of hard knocks and just pulling out those books, learning from the masters, things about finance, and accounting, and all that stuff. That’s what it was for me.

Carol:
Great. And so, it’s-

Nik:
If I can just chime in here. One thing that school didn’t teach me as well was how to manage the funds of the business. Which is the next part of the story, right? I got involved in the business, and we started meeting, and we got… There’s a team of us all getting together, and I got super frustrated about six months into this. I’m like, “Guys…” I’m in it for, I’m investing for equity, and I’m all in it. I’m working for my piece of the business, I’m not getting paid. We had no money-

Brennan:
No.

Nik:
… ever, at the end of the day. We’re talking like $40,000 a month, $100,000 a month, $60,000 a month, and it was still no money. We’re like, “Oh my gosh, what is wrong with the core of the business?” And that’s when we pivoted into the licensing piece. But, honestly, it took us nine months to really just keep getting hit in the head to learn that we needed to make adjustments.

J:
Very cool. Okay. So, we’re going to transition into the licensing piece, but it sounds like you guys, and just to recap a little bit, already had one transition, or maybe two transitions. Brennan, you went from being an employee in your business to, as they say in the E-Myth, working in your business to working on your business. And now you’re subcontracting all of this stuff out to other people.

Brennan:
Absolutely.

J:
But then there’s another big shift when Nik comes in. And as you go from being a company that’s just shooting weddings and having your contractors shoot weddings, to now you become a lead generation business.

Brennan:
You’re right. Yeah.

J:
You’re taking in leads, you’re building a software, you’re actually also a tech business. You have a piece of software that allows you to take these leads that are coming in, farm them out in some automatic fashion so that you can get the best price, or I guess the lowest price for the contractor, which gives you the best price, or the best profit for farming out that lead. And you’re scaling your business that way. So, that’s great. You’re basically, you have multiple businesses going here. You’re making money shooting weddings, you’re making money having other people shoot weddings. And then you’re making money by basically selling leads.

Brennan:
Yeah, absolutely. And the hardest part, I would say, about when Nik came in, and that transition you talked about, is you can’t please everyone. Especially in the school system, you’re just taught, whatever, the evils of capitalism, or whatever, whatever. And that was the hardest thing. Is Nik was coming and saying, “Dude, you have to understand if you go out of business, that you have hundreds of contractors who will lose a ton of money.” Like, “If you can’t employ them, then they’re going to be hurt. And so, if you have to pay them a little bit less, or find a way to be creative, then that’s actually helping them, although they’re going to maybe hate your guts.”

Brennan:
And I’m not going to lie, they did. Because we were a company that pandered to our photographers and videographers. We were bowing to them, like, “We need you. We’ll recruit you so heavily.” And the shift was, with this new software, it was a total change of like, they need to please us. They need to have… Which is how it should be, right? They need to have good… They needed to treat the brides well or they’re not going to get any jobs. And before, it was like, we were all buddies, half of them were my friends. And so, it was like, “I’m going to give you jobs.”

Brennan:
That was the hardest thing, is we definitely lost some good contractors during that shift. They were really upset that, “I have to bid for my weddings now? I’m already not getting nearly as much as I should, blah, blah.” And it was hard, like personal attacks. But we were like, “We have to do this. We have to make this transition for them to be able to keep their jobs.” And a lot of them who actually left during that time, angrily, came back a few months later saying, “Yeah, we can’t book weddings without you. And so, can we now sign up for the app? Because we get it.” So…

Nik:
That’s when he was just like, “Yeah, we did it.”

Carol:
Yeah, totally. You proved your concept.

Nik:
Exactly.

Carol:
All these contractors that you were contracting out to at the time, were they all local?

Brennan:
Yeah. Yeah. Because we started in Utah, so most of them were people that I personally would call on the phone and say, “Hey, I got a business idea, can I get you to shoot some weddings for me?” And it was a real challenge. Because they were like, “No, I charge $2,500.” And I’m like, “Yeah, I’m going to pay you $300, or $400, but you also don’t have to do any marketing. You don’t have to do any fulfillment. You don’t have to do any editing.” Like, “You’re literally going to get a $100 an hour to show up.”

Brennan:
And most photographers charge 2,500 bucks, but they only booked three a year. This is a different model. A lot of them are photographers that worked in call centers. And so, they would work on call centers because they didn’t have any other money. I was like, “Well, listen, take two weddings a week from me, and then you’ve got all this free time. Because now you can pay all your bills. You don’t have to work in a call center, you’re going to make $125 an hour.”

Brennan:
And we still encourage them to book their own weddings. We don’t make them sign a noncompete. We hope that this is a launching pad for them to go off and become amazing. But it is hard when they’re like, “You’re so evil, you’re taking money away.” And you’re like, “No, I’m not. I’m trying to build a business that will keep you in business.” Right? And so, that was a rough transition.

J:
They don’t realize that instead of going out and spending money on marketing themselves, they’re giving you a piece of their business, and you’re doing the marketing for them.

Brennan:
Totally.

J:
Basically, you’re consulting for them as much as they’re consulting for you. You’re contracting to them. You’re their marketer. You’re their marketing arm.

Brennan:
Yup. A-

Carol:
And-

Brennan:
Go ahead.

Carol:
Go ahead… I was going to say, and you are enabling these contractors to do the piece of the business that they truly want to be doing.

Brennan:
Exactly.

Carol:
I mean, no, these guys aren’t getting into the wedding photography business, or their photography business in general, to be out there marketing and spending all their time writing up proposals. They want to be shooting those weddings and building up their portfolios. So, you are helping them, and you did. It sounds like you were able to shift their mindset to help them understand the value that you were able to provide to them through everything that you are offering.

Brennan:
Yeah. Exactly. The way that we put it is, we had to sit down as a team when this app was coming out, and we said, “Currently, we’re a family. We’re a family. We’re a family of 30 photographers.” We literally would go to get pizza together. And I said, “Unfortunately, that’s not scalable. If we’re going to go nationwide, we can’t do that.”

Brennan:
And it was a painful thing for all of us to say, “Okay, so, now, we’re making the shift where we’re not a family, we’re a tool. We’re not buddies hanging out shooting weddings together.” We, Tolman Media, are a tool for them to book. We’re Expedia for them. We are literally going to book for them and help them out.

Brennan:
And that was the shift. That’s the most simple way to put it. Is we had to make that shift in our business. I lost friends, and that was hard. There was some personal sacrifices made there, but at the end of the day, it’s been absolutely worth it for everybody.

Carol:
Excellent.

J:
That’s awesome. Okay. So, we mentioned the word that licensing. It sounds like we’re getting to the next part of the story pretty soon. Take us from, now you have this marketplace, let’s call it, for wedding videographers and photography. You’re getting a lot of clients, customers in Utah. You’ve got a lot of contractors who you’re farming out too, who are bidding for jobs in Utah. But you guys aren’t satisfied, it sounds like. What’s next?

Nik:
Yes. I’ll chime in here. In that nine month learning phase, when I first got in the business, it was really challenging because, I mean, as you just heard Brennan say, I mean, we learned thing after thing after thing. And one of the things that we tried, we were like, “Well, okay, how do we expand this business? Well, we get into Colorado, we get into Idaho, get into Arizona, and let’s just duplicate it. Let’s hire a team. Let’s hire managers. And managers on managers. And let’s start running ads, and we have to do all sorts of new testing.” And so on and so forth. It got to be a lot of busy work. And we were booking weddings. But what we learned was, in Utah, we could sell them this way, in Arizona, we had to take a different approach sometimes.

Brennan:
Every time.

Nik:
Every time. So, a little bit of learning. And honestly, I mean, we did this, and we were growing really slow. There’s nothing wrong with slow growth, but we were ready for explosive growth. At that time, I had been in a different business entering the licensing realm. And I came back and I said, “Brennan, we’re not making money. The model is not sustainable. The growth is too slow.” It’s somewhat of an ultimatum, I was like, “Hey, we need to pivot, or I don’t want to waste my time. I don’t want you to waste your time, but what are we going to do?”

Brennan:
And part of this too is, we had to make a decision, do we want jobs? Do I want to become the CEO of a national company with 800 managers, and 1,000 contractors? And do I want to work 60 hours a week doing that? Or do I want to be an entrepreneur, and do I want to keep my freedom? And that was the hardest thing for us to decide. Is I had to decide with the licensing, and we’ll get into this in a minute. But I had to let go of a lot of control in exchange for my freedom. We don’t even have an office, but we’re a national company, and-

Nik:
International. International, I guess so.

Brennan:
International, as of today, company, and we wouldn’t have been… If we would have grown ourselves and not done licensing, and not brought in other entrepreneurs to use their mindsets and their strengths, I would be wearing a suit in an office all day long, trying to run this company, and it would be really, really hard. And so, we said, “Can’t we bring in other entrepreneurs? Won’t it be faster, and won’t it be better for everyone? Everybody wins.”

Nik:
It was crazy for us. We all got on the same… This was like, we went through hard things and now we’re going through a pivot. And this is, things got even harder for a short period of time. And we’re like, “Okay, we got the vision, we all love the vision. Now, how do we do it?” And we’re like, “Well, like any good entrepreneur, we’re problem solvers.” And we just made it up as we went. We got licensing paperwork. We got everything squared away with a lawyer. It took us a month to get our first sale.

Brennan:
Yes.

Nik:
And I remember that. That, for us, that’s slow. It took us a month talking to many people, refining a sales pitch. How do we generate the leads? What do you say? Refining what you say. Can I pass them over to him? Then I pass. And then negotiating all this stuff. And we eventually got our first sale. We sold Las Vegas. Las Vegas is 110,000 weddings a year. And the person is frothing at the mouth, so to speak. Because in Utah, we built this huge business, and honestly, there’s 26,000 weddings a year in Utah, but we’re only targeting maybe 18,000 a year, in terms of wedding count. So, they’re like, “Okay, we get that there’s, in Las Vegas-

Brennan:
Try a few.

Nik:
There’s 110,000, still, it’s the second most popular, and we eventually sold it. And for us, we were just like, we were dancing. And then right after that, we were off to the races. We were selling two a week, and it was just magical.

Brennan:
I always tell my wife, I’m like, “In every business I’ve ever been in, whether it worked or not, the first sale is near impossible-

Nik:
It’s the hardest, man. Yeah.

Brennan:
… And then once you do it, the flood gates open.” And it’s like, if you just toil long enough and figure out how to make the sale, where to run the ads, what to say, what to not say. You make that first sale, you have the validation, and then you can actually replicate whatever worked the first time.

J:
So, let’s dig in here a little bit. When you say you made a sale, that you licensed the business, for anybody out there that’s listening, and they’re probably a lot of people out there listening, because this isn’t something we talk about a lot, but what does that look like? What does licensing mean? What are you giving to the person that’s, quote unquote, buying that business? What are they giving back to you? What’s the relationship look like? How is this different? We’ve talked a lot about franchising recently. How is this different than a franchise?

Brennan:
Real quick I’ll explain how it works for us, and what the risk’s, I guess, for me. And then Nik will go on to all the beautiful nitty gritty details, because he makes the deals. So, essentially, I’ve heard you call it franchise light, right? Well, in a franchise, you contain strict control over everything. You have to have X grams on the hamburger patty, or else it’s bad, or whatever. Every detail is controlled. And they can lose your name if they do it wrong. But you also maintain tight control. You need a big corporate office, you need a lot of people who are constantly looking at regulations and compliance, and blah, blah, blah.

Brennan:
Licensing is a more bare bones version where if you have a system that works, like we do, you got a couple of proprietary softwares, some marketing that works. Images that are known all across the nation to make brides go, “Hey, I want to click on that.” Right? They’re basically paying you for the rights to a territory similar to a franchise, but you lose all that control. So, it is Tolman Media, that’s my last name. Should they go mess it up, should somebody just go make Florida just the worst Tolman Media branch ever, it’s going to reflect poorly on me. And there’s not much I can do about it, that’s the risk that we take.

Brennan:
I can’t go take it back from them like McDonald’s could, or whatever. But it enabled us to expand a lot faster. And we said, “If we have the training in place and we have the right partners that aren’t going to go do that, and we vet them carefully, then I think that it’s worth the speed and the benefits we’re going to be able to get to lose that control.” Basically, it’s the same as if you license a photo to print on your wall. They’re literally licensing our system, and they run with it, and they can choose to use it or not. So, I’ll let Nik talk more about specific deals and everything that he brought to the business.

Nik:
The actual logistics in the business itself changed, right? We went from booking our own weddings and collecting majority of the profits. And to us, we decided to give away the majority of the profits for sliver, and provide the marketing, the technology and the entire system.

Nik:
And honestly, the entrepreneurs who got out of their way and just follow the system, do the best. But obviously, we always preach to them, “This is your business. You can do whatever you want. You can totally deviate from the plan and we’re fine with it. No problem.” The way that we technically change is, now we have a 7% royalty.

Nik:
And then we have this component, right? And franchising, it’s like, “Hey, 40 grand, or you’re not involved. 150 grand, or you’re not involved.” For us, we were like, “Okay, we can close more by allowing creativity and flexibility.” And I love negotiating. It’s one of my favorite things to do. And so-

Brennan:
You’re good at it.

Nik:
… we negotiate, there’s a down payment component. There is a financing component. And I’ll talk, just real quick, about the financing piece. In terms of financing, we’re talking seller financing, this is not on their credit. We’re not taking their house. If it’s not working for them, they can walk away. We’re not hard business guys, in that sense. I’d say every one of our partners is making money, which, honestly, at the end of the day, makes us sleep really well at night.

Nik:
And so, I can go in and I can say, “Hey, this territory’s $80,000 and I’m looking for $20,000 down payment.” And then they come to me and say, “Hey, I love this territory. I’m emotionally attached to this territory, but I only have 10,000 bucks.” They’ll say, “Great, how about we… Can you figure out how to do $12,000, and then we’ll finance the remainder?” And we can get as creative as we want.

Nik:
And I’ll say this one last thing, because I know you’re itching for questions here. The last thing is, when we started it was, “Hey, you’re paying us $2,000 to $3,000 a month, and it’s just a monthly payment.” The challenge that we ran into… And we sold the first… What? 10 partners that way. And the challenge with that was, everything in the business is expectation. In fact, I’d argue that every business, that everything comes down to expectation.

Nik:
And what I mean by that is, I told them like 16 times, I mean, you have to make expectations super clear that, “You may or may not be cashflow positive for the first three or four months.” Right? And so, there was a challenge there. And then when it came monthly payment time, they’d get all worried and nervous. And, is it working? Like any business, it takes a little bit of time to get started.

Nik:
The key shift that we made is, there was one partner, and I tell them, and then negotiates. Everything’s negotiable except for the 7% royalty. He comes to me, he’s like, “Nik, I don’t want any risk at all. I’m willing to give you this down payment. I’m willing to pay 7% royalty. And I want to pay 14% of my total sales towards my financing piece.” And I was like, “Okay, let me think about it.” I really didn’t want to do the deal.

Nik:
We ended up striking a deal and today, it’s one of our most advantageous deals. And as he books three, four, five, $6,000 a week in down payments in our system, we’re getting 14%. We’re like, “Oh my gosh, we just tripled our royalty.” And now, every single one of our partners is on performance base. They love it. And for them, there’s little stress, little risks. And so, for us, we loved the financing component. I don’t think you can do that in the franchising space.

Brennan:
My last 30 seconds is, they love it because they’re getting a pretty much, a risk free business. I mean, what other business are you going to be able to put in five to $10,000 only, plus a little bit of marketing spend, for the potential of hundreds of thousands of dollars worth of profit, and then be able to walk away from it anytime? You get a franchise, you’re buying the lot, you’re buying the bill. You are locked into all of that. Plus you got your yearly fees and stuff.

Brennan:
This is, people love that it’s low risk. And we’re high touch. We’re going to make sure that we help you, because if they’re not making money, then we’re doing our job wrong. And so, we work really hard with each area to help them overcome… They’re doing 90% of the learning in Chicago. What do Chicago brides want, right? And then we provide that 10% of our experience from the other industries. We share what other people are doing. And it’s just, it’s been awesome.

Nik:
We’re just barfing all this stuff at you.

Carol:
Okay, great. You’ve really outlined really clearly all these amazing advantages that this model has for the licensee. Can you talk to us more about the clear and distinct benefits it has for you as the licensor, who put together these systems, processes, this whole model for your licensees?

Nik:
Absolutely. When I look at licensing versus franchising, I like to compare the two, there’s nothing wrong with franchising. When I think about it, starting a franchise, it’s going to cost me hundreds, with the S, hundreds of thousands of dollars, right? Whereas licensing, I might pay a lawyer five, $10,000, $15,000, so, cost, right? In terms of speed, I’m just waiting on my lawyer to bust it out for me. It’s not very hard to build the licensing paperwork and the framework for the model.

Nik:
Whereas, franchising, you might wait a year. And you have to have benchmarks, and you have all the regulations. And that’s another thing, is the compliance aspect. Well, who are we complying with? Well, we’ve invented this system, and it’s all legal and everything. And we don’t have to worry about compliance at all with the government, or any entity. We allow a lot of flexibility and freedom for our partners, which is fantastic as well.

Nik:
And then the looser financial structure, right? Again, we get very creative with our deals. Most of our deals are structured the same, but I always go to the partners and I say, “Hey, what’s important to you? Do you want to go in with less money? Do you want smaller area paybacks.” So we call them. “What’s important to you?” And they really just… We open up, and it doesn’t feel like a negotiation. They’re telling me what’s the most important thing to them. And then we structure a deal around that.

Nik:
So, we have all the flexibility. It’s not just a hard line in the sand that, “Hey, can you do it or can you not do it?” Like, “This is it.” You know what I mean? We have all the flexibility in the world.

Brennan:
And-

J:
I-

Brennan:
Oh, go ahead.

J:
No, go ahead, please.

Brennan:
Yeah. And just with that, really, the licensing piece, why it’s so great as well, for us, it’s because we know our system’s going to work. And so, our goal, we actually, their percentage that they’re paying back on those areas is scalable if we work super hard to make them a lot of money. And so, as long… We know how to run the business. We know how to do all that.

Brennan:
And so, if you have a set monthly payment, that’s it. You sell out the nation, and that’s all you’re ever going to get. But for us, we can work as hard as we can to make them… They’re going to have to make like 800 grand gross before they ever even pay back our $50,000 payback. And so, we are working really hard to make them money, but it also allows us to scale instead of just being locked into a monthly payment.

Nik:
One thing that we usually tell our partners, our potential partners is, at the end of the day, when we’re talking to them, we get this gut check, right? And the gut check is really important. This intuition that you feel. When we’re looking at a potential partnership, because you have to look at it that way. And we tell them this, “Is we’re looking, it’s less about the money and more about the partner.” If you have an entrepreneur that’s a go getter, he doesn’t get in his way, he’s ready… He works fast and he’s getting… He could literally, in a week, have his ads running, his website up. His first two sales happen in a week. That’s not uncommon.

Nik:
And then we have the entrepreneurs who are like, “Okay, let me take… Let me make the LSE… Oh, I made my LSE after three weeks.” I really want to tweak this, “Can we have some photography for Maryland specifically, before we start running ads?” And now we’re three months down the road, we’re like, “Okay…” And by the way, to that, I’ll mention, in our contract, one of the things that we have in there is a minimum benchmark. The minimum benchmark used to be something like, “Hey, we need you to book eight weddings a month.” Right? We went away from that and we… Again, this is a perk to the licensing is very easy to change some of this, the legal ease.

Nik:
We went to a monthly minimum ad spend. We know if they spend a minimum of $400 a month, or roughly $15 a day, that they’re going to book X number of weddings. And so, we went to that model. And, hey, honestly, at the end of the day, if they spend 400 bucks, they’re advertising, they’re working the business. For us, we don’t want to get locked down and be like, “Okay, Dallas, Texas hasn’t advertised in six months. Well, shoot, the system’s not working for them. We’re not getting… It’s not working.” Right? And with having that minimum in there, it actually helps significantly. And again, it’s negotiable. All of it is negotiable.

J:
Yeah, I agree.

Brennan:
And they make money with it, because when you think about it, $400 a month, that’s the profit from one wedding. They’ve sold one wedding in 30 days, and they’re good. So, it’s not a huge risk for them to spend that much.

J:
Yeah. And this also goes back to something Nik was saying earlier, it sets expectations. So, basically, they don’t come in and think, “Oh, I didn’t think I was going to have to do any marketing. Now I have all this marketing costs that I wasn’t budgeting. I wasn’t putting it in the P&L, I wasn’t putting it in my models.”

Nik:
Good.

J:
You’re telling them upfront, “If you want business, this is what you’re going to have to do.” And it’s funny, we were talking to a woman on our last show, who was talking about the difficulties of finding, embedding good franchisees. She has a franchise. And the problem was that people came in with the expectation that they would just come in and hire a couple people. And the business would run itself, and they wouldn’t have to market.

Nik:
Expectation.

J:
They wouldn’t have to spend any money here. And it really, it boils down to setting expectations. So, I love that.

Nik:
Totally.

Carol:
Super important. And I’d love to dig a little bit more into the part of finding your partners, right? It sounds like it’s so critical, of course, to continue growing your brand, to maintain all these systems and processes working the way you designed them, and outline them to work. And them using your software, and everything, you really have to have that right partner, the right type of entrepreneur. How are you guys going about making sure that you’ve got the right people when you sign someone on? How can you tell?

Nik:
Well, it’s our secret, man. What is it? Are we going to tell them the secret?

Brennan:
I’ll talk about the finding, and then Nik can talk about the secret sauce, if he wants to. So, for the finding, when we started, we were running ads and we were saying, “Business for sale,” in classifieds. We had some Facebook ads to a landing page. We tried a ton of stuff, but-

Nik:
Franchise websites.

Brennan:
Franchise websites. Those were horrible-

Nik:
Just those thousands of that in pages.

Brennan:
… the leads didn’t work. Yeah, we tried. We spent a lot of money getting tons of leads. We had a salesman, at one point, who was a New York guy and would just franchise sales, was his thing. But at the end of the day, I would say we had the first way where everybody was super nervous. And they were like, “Ah, this feels so sketchy because it’s not a franchise. And I just don’t know if I really want to do this.”

Nik:
And then 60 days later, they’re like, “Yes.”

Brennan:
Literally, all those people who were super sketched out started making a ton of money. And suddenly they were like, “Hey, I have a brother. I have an uncle, and he-

Nik:
That’s the real secret sauce. Is the success, okay?

Brennan:
Yeah. And they would say, like, “My mom really wants your business.”

Carol:
I love that.

Brennan:
And so suddenly Nik’s on the phone with their mom. And within a week, she’s bought a territory. And it’s funny because they used to have to talk to me and do this big lengthy Zoom, called all the systems. And the moment that it was a referral and all of… The referral would do all that for us. I didn’t even have to talk to them. I’d be like, “Who are they?” And Nik was like, “Oh, we just sold another one.” And I was like, “Whoa.” It was crazy, because it was working. And so, it snowballed, and now we’re sold out for US.

Carol:
God.

Brennan:
And so, we’re moving into international. And once we opened those gates, the same thing happened. Just a referral serving like, “Oh, wait, you’re selling international? I want London. I want Manchester.” Like-

Nik:
Everyone wanted a piece. And it was crazy. I was in Hawaii for two months. In January, I’m in Hawaii, and I got the background, I got the Kochi frogs. I’m in the jungle, and the birds, and all this stuff. And here I am, I’m still like, four or five, six hours a day, “I love selling.”

Nik:
And I’m just talking to these people. We got to this crazy frenzy. I’ll just tell them how we wrapped up United States. Is, we have the spreadsheet that basically had, here’s the wedding count for every area. Here’s our purchase price. And here’s what you’ll be charging for your photography and videography.

Nik:
Well, then, they’d come to me and they say, “Hey, I’m interested in Chicago, and I’m interested in New York city.” Right? They come up and then we start talking about some of the areas. And the list started at, I think there were 60 some odd territories. We had like 60 some odd territories. And it gets down to 50, and then it gets down to 40. Honestly, once it turned down to 30-

Brennan:
We got a mad dash.

Nik:
… we sold all of it in one month. And so-

Carol:
What?

Nik:
… I kid you not, it was just a madhouse. My wife was like… I’d be on the phone with someone, and she’d just be beating me up. She says, “Hey, We just left lunch, or we just left breakfast, or something.” She’s like, “You can’t be doing another one.” I said, “Honey, he wants another territory.” It’s like, “What can I say?” And so, it was crazy. That first sale was so hard. And then after that, we started closing two a week, and then started closing four a week. And then we started closing six a week. And then, literally, in the last week, I think we did over $100,000 in down payments.

Brennan:
We had a guy who was like, “I want 15 areas.”

Carol:
What?

Brennan:
He’s like, “I want them all. I want the list.”

Nik:
I think it was 12, he just bought a bundle.

Brennan:
Made some crazy offers. He’s just like, “I don’t want it to be gone.” Like, “I know that they’re going so fast. I want them.” And that was the beauty of the referral thing, is-

Nik:
We weren’t selling, they were coming to us. And so, it was mind blowing just to see how fast and how crazy it got.

J:
How many territories do you have right now? In the US?

Nik:
In the United States, I think we just have over 60, as what we talked about the other day.

J:
They’re big areas.

Nik:
I don’t know the specifics of it. Some of them were metropolitans, and some of them were, you have North Carolina, right? And so, for us, we didn’t want to deal with the ticky tacky piece of, we’re advertising these eight zip codes and, “Oh, my lead came in here, but it’s for this territory.” It’s like, “Yo, it’s Louisiana, it’s Louisiana’s.” Right? It’s very black and white. And honestly, it just made it easy, and most of the entrepreneurs were really happy with that. If I look globally, there’s a lot of territories, right? States, or provinces, or whatever the case is. Countries. And honestly, there’s still a lot of room to grow.

J:
Okay. So, you guys now have 60 licensees, and I don’t know about our listeners… See, actually, I do know about our listeners. They’re going to be really curious about the numbers that you guys are pulling in here. I know I’m curious about the numbers. Could you talk to us a little bit about what your financials look like for this business, as of today? I know it’s a relatively new business, but as of today, what you’re looking at.

Nik:
Yeah. I’ll take a stab at it. We have the royalties piece and the area paybacks piece. We’ll shelf that for a minute, because that’s an ever-changing growing number. In terms of the actual growth and bringing on other entrepreneurs, we’re probably sitting, for the United States, we’re just under $500,000 in down payments. And then we have about three and a half million dollars in accounts receivable, which we’re really excited about.

Nik:
And we just started selling international, and we’ve brought on about, I think $85,000 down, and about, I think we’re around $400 or $500 in accounts receivable. As we have less territories, there’s a finite number of English speaking countries, the price is always right race. So, the first 20 deals that we did in the United States were like, “Okay, let’s get scrappy.” And the prices were made up numbers, and people were okay with them.

Nik:
And then, as that list started to shrink down to the last 15, I mean, every day, I was raising the prices on down payments and accounts receivable. All in all, we’re just over $4 million in accounts receivable. If you can do math, what is that? Almost $600,000 in down payments. In the space of four months.

Brennan:
Yeah, exactly. In September, when he gave me that phone call saying, “Brennan, I have an idea.” That’s been six months till now, and $3.5 million in accounts receivable has been awesome. And what’s cool about that is that those are all happy people. Those are people that are actually making money. There’s not exploitation going on or anything. Those are people who are actually humming, their businesses growing, and they’re thrilled.

Brennan:
It’s the best thing when somebody is like, “Dude, I’m so happy. My wife is so happy. I was in this struggling business before, and I ditched it, and I’m here. And I’m in it to win it. Let’s go.” That’s been really, really cool to see that this model that I built… And honestly, built during some really hard times. I thought that this whole thing was going to crash. I thought that it was just going to sink the ship, and it’s going to be terrible. But we just kept pushing. We kept trying, we kept growing, we kept innovating. We did whatever we had to.

Brennan:
There was a period where I… A period when Tolman Media was humming, before we did the licensing, where I literally had to shoot weddings to survive, because it got that bad. And so, you do what you got to do. And to now see that in just six months, all these entrepreneurs are making money, growing their businesses, and we’re providing that training, it’s been awesome.

Carol:
Gentlemen, I’ve got to tell you, my mind is truly just blown right now. I mean, right? $4 million in revenue, in less than half a year. We’re talking four or five, six months tops. I don’t even know what to say about that. That’s absolutely incredible. I’ve got to say though, I’m curious, what’s next? You guys are fast. You’re furious. You just, you run, you scrap together what you need to make happen. You figure your stuff out, and you just go. So, what are you going to be doing next? I know there’s got to be something on the horizon.

Nik:
Go for it, dude.

Brennan:
Yeah. No, so, we hired… I’m young. I’ll be honest, I’m 25, right? And so, I’m like, when this whole thing started happening, I was like, “Nik, I have no idea how to run a giant company like this.” Obviously, I’m good at what I’m good at, which is building these systems. And so, we actually hired a president who’s a master of operations, to come in and run the company for a percentage of the royalties side.

Brennan:
We said, “Listen, man, if you are awesome, your pay is going to explode. This is going to be huge for you and you have to help these businesses grow in order for you and your own personal finances to grow.” And that was a really awesome deal that we made. So, we’ll work with him in more of an advisory kind of point. But Nik and I at this point are like, we’re wanting to move on to… Well, first part, we have some big projects we’re working on with Tolman Media to continue to improve it. Adding in some DJs, some florals, some-

Nik:
Upsells.

Brennan:
Some upsell. Just a big piece that we’re working on here. And so, we’re trying to build that so that Tolman Media areas can just have more and more revenue. But we’re moving on to some other stuff. We have a YouTube channel we just started together, about some of this stuff. It’s called the Hobo Entrepreneur.

Nik:
Whatever we want.

Brennan:
That hair, you know? And so-

Nik:
Always the hair jokes.

Brennan:
And also is the hair jokes. We want to keep helping people, right? And so, actually, we’re in the midst of beta testing some different services that we could turn into a similar licensing thing, because we’re all about helping entrepreneurs change their lives, make more money. If we’re not providing value for them, then we don’t want to do it, you know? And so, we’re testing out different things that other entrepreneurs could then license and go make a lot of money with in the future. Because that’s what we’d love to see. That’s where we’re at right now, is we’re beta testing these different services. What can fit the model? What can use a similar thing? And what can we just run with to get people making money?

J:
That’s fantastic. Awesome. Guys, this has been absolutely fantastic and really enlightening. Because, I’ll be honest, we think about franchising a lot when we talk about growing our business. We think about the adding more corporate owned stores, but very rarely do businesses think about licensing their brand, licensing their technology. And you guys, really, you figured out how to do that, not just successfully, but very quickly as well. So, absolutely kudos to you guys. That’s awesome.

Brennan:
Oh, thank you. Yeah.

J:
And this was great. We’re getting to that point in the show where we want to do the final segment that we call the Four More, where we ask our guest four questions, same four questions to all our guests. And then give you an opportunity to tell us a little bit more about where our listeners can connect with you. Sound good?

Brennan:
Let’s do it.

Nik:
Do it.

J:
Fantastic. I will let both of you guys take all four questions. So, question number one, what was your first or your worst job ever, and what did you take from it?

Nik:
You go first. Every time.

Brennan:
I worked at China Wok. I was a server. I don’t really know, because I couldn’t really understand half of what was said. But I was a server, and I got thrown up on a few times. And I would say it was my first and worst-

Nik:
And your worst job.

Brennan:
And my worst job.

J:
That doesn’t say much for the restaurant when your servers are getting thrown up on.

Nik:
That’s right.

Brennan:
I don’t even know what to say. I don’t even know what I was. So-

Nik:
No title. I was like seven and eight, and I had a paper route. And this is back in the day where you get on the bike and you had the vest, and you all the papers. I folded the papers and I’d ride my bike. I remember one day… This was my first job. It wasn’t my worst job. I loved it, actually. I remember one day, and it was just raining like crazy on me, and I was crying, and I was peddling at eight, nine years old. I had this paper route for like three, four years.

Nik:
And then, eventually, it got to the point where… Growing up until I was 17, 18, I did this throughout. And my dad… I would fold thousands of papers and we’d load them up into the white van. We drive with the door open, I’d be sitting in the back. And he would just drive like 10 miles an hour, and I’d just be… I just keep throwing them. All I remember is my dad paid me 50 bucks once a week, and I was like, “Yeah.” And I always got a Whopper at the end. It was-

Carol:
Bonus.

Nik:
It was awesome. I love it.

Brennan:
Who needs $50 when you have a Whopper? You had a lot.

Carol:
Right? Just sign me up.

Brennan:
Oh, yeah.

Carol:
That is outstanding. Okay. What would each of you say was the defining moment when you realized that you had the entrepreneurial edge?

Nik:
Woof, edge?

Brennan:
For me, in high school, I started a company where I could convert VHS to DVD. It’s funny now, DVDs are obsolete, but that was a pretty big thing. I would make 10 bucks a VHS, and I literally plug it in. You click a button, and you wait for the VHS to be done playing. And then that’s it. That’s 10 bucks. And I remember I was playing video games, and I was sitting there in my pajamas-

Nik:
Wait, what video game? What video game?

Brennan:
Skyrim, if you know what that is.

Nik:
Guy was Skyrim, okay.

Brennan:
I was sitting there in my PJs, and I was like, “I just made like 30 bucks to play video games.” Because one of the-

Nik:
He just played video games for three hours.

Brennan:
Yeah, there was three tapes in a row that were like 30 minutes each. And I was like, “I just made 30 bucks in an hour and a half. And I’ve been sitting in my PJs playing video games.” And I said, “I want to keep doing this. There’s got to be ways to provide value to people that they’re willing to pay for, that can afford me some freedom to play stupid video games, or whatever.”

Carol:
That is outstanding.

J:
I’m glad video games gave you the entrepreneurial edge, because I think for a lot of us, playing video games and making $30 would take all motivation away. I could make 10 bucks an hour playing video games, why do anything else?

Brennan:
Oh, yeah.

Nik:
Oh my gosh. That’s funny. I think, for me… So, for me, it was out of necessity. Newly married, listening to BiggerPockets, a real estate podcast. I was 22. This was 11 years ago. Dropped out of college, bought a house at house hacking, before it was coined house hacking, and the mortgage pretty much paid for it. But I was still in this… My wife and I both just got laid off. I quit for a really crappy life insurance sales job, and I was terrible at it. And my wife got laid off. I quit the life insurance sales because I was no good at it.

Nik:
And here we were, but we had this house and we’re like, “Sweet, the house is covered, but how do we pay…” Like, “How do we survive?” I started posting these ads on Craigslist, saying like, “Hey, I’ll build your website for 500 bucks.” I think the first one was like 250, 300 bucks. And I started getting these phone calls. I’m like, “Yeah, of course I’ve been doing… I know what I’m doing.” At 250 bucks, 300 bucks, 500 bucks, 1,000 bucks. I started doing these and over the course of a few years, I did 500 websites.

Nik:
And even to this day, I still get referrals. I don’t want to do it anymore, and I outsource it all. But, for me, it was out of necessity, I want to foot on too. I remember my wife’s family, we didn’t have a stove in our new house, and we couldn’t cook food. I got so much flack from my in-laws, like, “Oh, is he going to provide?” And I was like, “I’m working on it, guys.” That’s when I started just doing this website stuff, and just hustling.

Brennan:
I want to throw in a 20 second story about Nik, too.

Nik:
Oh, gosh.

Brennan:
During this hustling period, he got a salary job that was a work from home, hired some overseas dude to do it for 10% of his salary, and then that was it.

Nik:
This is-

Brennan:
It took them like two years to find out.

Nik:
This is my first big boy job. In fact, it’ll-

Carol:
That’s incredible.

Nik:
It was my first big boy job, is what I call my big boy job. For being a no college type situation, and just having experience alone. Going and getting a big boy job, getting a salary, getting the PTO, and all that stuff. I was still closing my own business stuff and I was like, “This is awesome. They’re thrilled because we’re doing a great job over there.” So, I felt like there wasn’t any conflict of interest. And then I did, I outsourced it. And honestly, the work got better and I got raises. Anyway, it was good.

J:
Awesome. Awesome.

Brennan:
I’m not sure what you’re going to do now, but…

Nik:
You can cut that.

J:
It’s okay.

Carol:
Getting me that is platinum. I feel there are no words. That’s incredibly awesome.

Brennan:
Oh, no.

J:
You know what I love? I love the fact that I found you guys, we’ve never talked about real estate, we’ve never talked about BiggerPockets, and yet Nik was listening to the BiggerPockets real estate podcast.

Nik:
That’s the one, baby.

J:
That’s very cool. Okay, question number three. I’ll keep this short and simple. Favorite book. And you’ve already mentioned the E-Myth. It doesn’t have to be a business book, but if it’s a great book, this is for-

Nik:
There’s a better one.

J:
Great.

Brennan:
For me, it’s the Millionaire Fastlane book.

Nik:
Millionaire Fastlane.

Brennan:
Yeah, M. J. DeMarco.

Nik:
It’s the secret, for real. We love it. It’s the-

J:
M. J. DeMarco.

Nik:
It’s the Bible. The entrepreneurial Bible.

Brennan:
Yeah, M. J. DeMarco is the man. Yeah.

Carol:
Awesome.

J:
Excellent. Both of you, we don’t want to get a second book? You both-

Nik:
No, that’s literally the best book.

Brennan:
I think that’s the one.

J:
Okay.

Nik:
My wife makes fun of me in terms of business books. I love reading tax books, books on taxes. How you save on taxes, and stuff like that. And she’s like, “Who are you?” You know? There’s a category that’s in second or third place, it’s taxes.

Brennan:
I always say I have two Bibles. Business Bibles. My first is the Millionaire Fastlane, and the second one is actually a book called Brain Storm. Disney publishes it. It’s by a Don Hahn, I think is his name. And he was a producer of the original animation for Lion King. It’s literally-

Carol:
How cool.

Brennan:
… just a book about how to bring creativity into your life, and it’s been a game changer.

J:
Awesome.

Carol:
Very cool.

J:
I knew if I get you to talk long enough you’d give us a second one.

Brennan:
That’s right.

Carol:
There you go. And Jay, I have to ask this. I know I usually go into my fourth question, but there is a third… And the third question, we changed it up. I really want to hear from these two, because there have been so many great nuggets I want to sneak. It’s going to be the five more, sorry. But I would love to hear from each of you, or at least one of you, the best piece of advice you have for small business owners, that you haven’t yet mentioned. Because you guys took such a different path, it sounds like, from the beginning. You just figured it out. You didn’t have a plan, you were just winging it, figuring it out. So, I would love to hear each of your… at least one of your best piece of advice that you haven’t been able to tell.

Nik:
I got mine, you got too.

Brennan:
I got a sec. Okay.

Nik:
You got one? Yeah. Okay, go for it.

Brennan:
For me, I’ll try to be brief, I was always terrified because when you start a business, it doesn’t matter who you are, you’re going to do a lot of things wrong. You’re not going to do your taxes right maybe, or you’re not going to… Or you’re going to… I don’t know. You might break a law on accident, or whatever, and there’s a million reasons why people are like, “Be really careful. Be really careful. It’s not worth the risk to try it.”

Brennan:
I was talking to my CPA like two weeks ago, and I was like, “Dude, I’m so sorry that my books were just a mess from 2019.” And he said, “You did it right.” He said, “At the end of the day, the most important thing you can do is figure out how to provide value to others, and how to be profitable.” And he’s like, “If your first year is just spent being scrappy and figuring it out to get the money so now you can pay professionals, to take care of you, and all that stuff, then it’s okay.” I would say, don’t worry, right?

Brennan:
Don’t be so paralyzed by the million big boogeyman things that could go wrong. Because, at the end of the day, if all you’re trying to do is create value for people, get there first, and then tie up all your little… This is the first year that I’ve ever had a lawyer, and it’s been years of doing this. And so, it’s like, you don’t need to be scared of all those things. Just try your best. Do your best to… Do what you can, and stay within the regulations, and stuff. But man, just try to figure out how to be valuable and profitable. And then, don’t let all of those big maybes scare you away.

Carol:
Outstanding.

Brennan:
I’m not saying to break the law. That’s not what I’m staying.

Carol:
A little clarification.

Nik:
There you go.

Brennan:
Yeah, no, it’s not what I’m saying.

Nik:
I think, for me, it comes down to, what’s the difference between a hobby and a business, right? And the digital marketer will come out here for a second. So, for me, a hobby is what can be confused as a business, and you’re doing the right things. You’re in the motions, and you’re acquiring customers, all this stuff. But a business actually comes down to one metric. If there’s one metric, it’s cost per acquisition.

Nik:
And so, me, as a digital marketer, I’ve done this in e-commerce for a long, long time, and it’s the exact same thing with Tolman Media. In fact, this is why we sold so fast, cost per acquisition. And so, if you understand this one metric… And by the way, cost per acquisition is how much do you have to spend to acquire your customer? Well, if I know that I can spend X dollars to get more revenue, I’ve created an ATM. And it’s no wonder if you watch Shark Tank, Kevin O’Leary is always like, “Hey, what does it cost you to acquire your customer?” And nine out of 10 of them don’t know the answer.

Nik:
And that’s just the cold hard truth. And so, in Tolman Media, we know that we can spend a certain dollar amount for $1,800. And honestly, if you can figure out that ratio, that’s a business in my mind. I like to razz on family members, and stuff. And other people, they have these really great businesses, but they’re lacking this element of control. If you can, honestly, figure out what that number is, and you can constantly buy customers, you have a business, man.

Carol:
Phenomenal. See, I’m glad I stuck that extra one in there.

Nik:
Fair enough, yeah.

Carol:
Worth every last second. That was outstanding. Okay, here is the real last question now. I would love to hear from each of you, what is something in your personal life, your work life, whatever, wherever, that you’ve splurged on along the way, that was totally and entirely worth it?

Nik:
So, my name is Brennan Tolman, and I’m going to answer for my friend here.

Brennan:
He’s going to get it right.

Nik:
There’s this company that I love, they make these electric cars. I can’t remember what they’re called, but I have like six on pre-order. He loves his Teslas. What were you actually going to say?

Brennan:
No, no, that was it.

Nik:
Okay, that’s it.

Brennan:
Absolutely.

Nik:
He loves his Teslas.

Brennan:
Absolutely. Tesla-

Nik:
Tesla.

Brennan:
… has been the thing that… It’s one of the only things I’ve ever bought in my life that I do not have buyer’s remorse for. It’s been the splurge… I mean, I knew it’s a crazy splurge, but it has been unbelievable. Life changing, game changing for lotteries.

Nik:
Literally life changing because he can form an LLC while on the freeway-

Brennan:
Don’t say that.

Nik:
… and he’s not doing thing, and he’s like… You know?

Brennan:
I can. I’m not saying I did, but I can.

Nik:
Off the record.

Brennan:
I can. Possible to.

Nik:
I’m a pretty frugal guy. I don’t know. I don’t buy a lot of stuff for myself. I don’t generally like to do that type of thing. I love buying real estate, and that type of stuff. For me, I love… I took my wife and family on a two month vacation… vacation where I was still selling, January, February, this year, to Hawaii. And for me, that wasn’t even a splurge, because a lot of it was still business. We were looking at real estate out there and I was still conducting business. So, for me, travel, I never feel guilty about. And in most cases, because of the nature of our business, I can usually take it as a deduction so long as I have proper documentation, and stuff. So…

Carol:
Super cool.

J:
Awesome, guys.

Carol:
Love it.

J:
Thank you so much. Okay, let’s jump to the more part of the Four More. And this is where you tell us, or tell our listeners a little bit more where they can get in touch with you. Where they can find out more about you, where they can find out more about Tolman Media, and what you guys are doing.

Nik:
Okay, pitch away. Pitch away.

Brennan:
Yeah. If you want to hear more specifically about Tolman Media, you can just email at [email protected], and I’ll respond to you there. We have a joint YouTube channel called the Hobo Entrepreneur, we mentioned that. You can find that on there, where we talk more about licensing. And I may or may not have thrown five Tesla videos on there. But, yeah, Hobo Entrepreneur is the YouTube channel where you can reach us.

Nik:
We just goof around and have a lot of fun, and then we do a lot of entrepreneurial stuff too.

Brennan:
And we’re happy to answer questions, or give some guidance, and stuff, because it’s all about helping each other, giving back. I mean, all entrepreneurs, we’re in this together, so…

J:
Awesome. Fantastic. And all of those links will be in the show notes for anybody that wants to find out more. Gentlemen, this was fantastic. Thank you for sharing your stories. Thank you for sharing your knowledge and wisdom. We really appreciate it. And we look forward to checking back in a year or two, and see-

Brennan:
Thanks. Absolutely, we love it.

J:
Hearing about-

Carol:
World domination for you guys, you’re right.

J:
Yes. Hearing about the international business.

Brennan:
We do this again, yeah. Thank you guys so much.

Watch the Podcast Here

 

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In This Episode We Cover:

  • How Brennan and Nik met and started their business
  • How they solved a problem for photographers
  • How they solved scheduling, improved earning, and added scores in their booking app
  • How they made changes in their system
  • The hard decision they had to make
  • How they managed to expand internationally
  • How they brought in entrepreneurs and went the licensing route
  • Franchising versus licensing
  • How they’ve set partner expectations
  • How business comes down to one metric: cost per acquisition
  • And SO much more!

Links from the Show

Books Mentioned in this Show:

Tweetable Topics:

Connect with Brennan & Nik

Brennan Tolman and Nik Krohn, founders of Tolman Media, started and grew a wedding photography business and were ready to expand. Instead of franchising, they decided to license it all around the country—and around the world—letting others do the bulk of the work while they simply collected the royalties.