How to Find the Leaks in Your Business

They say one little leak can sink a massive ship. And if you’re an entrepreneur, if you don’t find leaks in your business, and plug them, you can absolutely sink your ship. Today I talk about how to find the leaks in three different types of businesses and how to plug them. Then at the end, I give you feedback on what you need to do with your business.

How to Find the Leaks in Your Business

Step #1: Write Out All the Steps

The first step to take to find leaks in your business is to write out all the steps. I do this with every aspect of my life and business. For instance, if it's health, I write out every single thing I do with my diet and every single routine I have, such as working out and sleep.

So step number one is to take out your business and write out all the steps. It could be 10 or 20 steps.

Step #2: Prioritize and Rate the 5 Most Important Steps

Once you write all the steps, prioritize the five most important ones. Then rank how well you do in each one. Next, bring in a group of three to five people who work with you that are also leaders. Get their input on what you are and aren't doing well, and how you can improve. Then put together an action plan and attack the plan.

Now I'm going to show you how to do that in three different types of businesses, a sales office, restaurant, and construction business.

Sales Office

Let's start here with sales office. Regardless of the type of sales office - real estate, pharmaceuticals sales, etc. - whatever it is, it's important to find the leaks in your business.

Inbound and Outbound Calls

In a sales office you either have inbound calls or customers coming in, or outbound calls, where you're reaching out.


Here are the things to inspect when it comes to inbound sales.

Script, Questions, and FAQs

So let's hypothetically say that somebody calls me and says, "I'd like to talk to a real estate agent about buying a house."

What is my script? I  test the script.

What questions do the sales reps ask the customers that are calling in? And finally, what are the FAQs? Do I have an FAQ sheet? For instance, if you sell real estate, there are 20 questions that everyone that wants to buy a house asks. So you need an FAQ sheet with those questions.

So if a person calls, I have a script. I know what questions to ask. For example, "How soon do you want to buy a house? Are you already pre-qualified? Do you know the area you want to live?"

And I have a list of FAQs so I know how to answer questions people ask.

Follow Up, Close, and Onboarding

Then I follow up and close, and after that is onboarding, such as the paperwork the client needs to fill out.

Next are referrals and nurturing the relationship.


With outbound, you reach out to the customer. For instance, let's say you're a social media marketing company, run an agency, and are outbound. You try to reach out to people.

Ideal Client, Volume of Contacts and Finding Customers

First, you have to identify your ideal client, and secondly, the volume of contacts. For instance, if you sell a membership to a magazine or a gym membership, it's volume. You call everybody.

But if you sell exotic cars such as  Lamborghinis, Ferraris, you don't contact 200 people a day. You instead nurture people. You go to country club events and other places that people of money go.

So volume is quantity vs. quality, depending on the product you sell. You need to be clear about that.

Then, are you good at finding customers? Some companies don't know how to find the right customers.

Scripts, Closing, and Onboarding

Next you need to evaluate script and how well you close. You also need to look at onboarding, follow up, and nurture.


Once you know your inbound and outbound, circle the most important ones in inbound. For instance, FAQs, since it's important for everybody to know the FAQs. Questions asked, closed, and follow up are also important.

Next, score on a scale of one to ten, score how you do on each of them. For instance, if your script sucks, score a two. Two, do you know what questions to ask? Three, let's say you somewhat have FAQs, so give yourself a six.

Then, figure out how to improve the five that are most important and lowest ranking.

Then do the same for outbound.


Let me do another example - a restaurant. I have a lot of friends that come to me for advice about restaurants. They run restaurants that bring in between a half a million dollars to $15 million  per year. They always ask, "How would you improve my restaurant?

I've been to thousands of restaurants around the world, and I love good food. And I'm so meticulous that I pay attention to every single thing about restaurants, because if I ever owned one, I would want it to be run a certain way.

So if you run a restaurant, here's what I'd pay attention to if I were you.


If your restaurant isn't doing well, you first need to ask yourself, "Is it even a good location?" The other day Paul and I were in Houston, trying to find a sushi spot. It was hard to find the place. The food and everything about the restaurant was great, but it was a horrible location.

Also, where can your restaurant be found online? Is it on Yelp? Do you have apps? Are you everywhere?

What about parking? Is it available? And how is the entrance?

I score every one of these from zero to 10.


Next, I look at my processes, such as the hostesses. What is the script when somebody comes in? Who do I hire? What is the attire? What's their look and attitude? Do I want someone attractive? What age do I want? How helpful do I want them to be?

I score each of the hostesses in all these areas individually. If I have five hostesses, I score each of them, and fire the bottom two.

I also shop them. Let me explain to you what I mean by that. When I sold memberships at Bally Total Fitness, I used to shop all of the other Ballys. For instance, when I heard, "The Bally in Chicago is best" or "The Bally in New York is best," I called those locations until the best guy picked up. I acted like a customer that wanted to buy a membership. And I'd see how they handled the call.

So I'd shop all my hostesses. I'd bring in 10 people and have them all shop them. I'd bring in different personalities, single mother, single female, a husband and wife, a couple with kids. I want to see how each hostess handles different experiences such as kids being rattled and loud.


Next, ambiance. What's the music? Is it too loud? What kind of music am I playing? Is it hip hop music, a lounge with jazz? Is it more salsa? Or is it more like current music or white noise? What station am I playing? How loud is it?

What about the lighting, dress attire, decorations and smell? Is there a smell? If I go into a place that smells bad, I walk out immediately, right?


How long does it take to be seated? If a person walks into an empty restaurant and it takes six minutes to be seated, they're annoyed. I want to know how long it takes from the time someone walks into the restaurant before they're seated.

If I go to an A-rated restaurant, I go for the service and food. If I don't have a reservation and it's busy, I'm okay with having to wait. But from the moment you seat me, how long does it take for the waiter to come and say hello?

I recently went to a restaurant with my five-year-old son Tico, and my three-year-old son, Dylan. When I walk in with kids, I expect people to notice that I'm sitting there by myself with two kids. It took seven minutes for a waitress to come say hello to me. I finally screamed out, "Who's working this side? I've been sitting here for seven minutes with two kids. You guys don't pay attention."

Finally, a very, very good waiter came and said, "I'm so sorry, sir. She's busy." She wasn't busy. The place was only 20% full and she had one other table. But he was willing to cover for her. Perfect. I like the teamwork. The girl came and apologized, but I would have fired her on the spot.

Quality of Food and Manager Greetings

Without good food, you're a done deal, right?

Then you have manager greetings. I love it when a waiter keeps coming and doing their thing, and then a manager comes by. They ask, "How's the service today? Are you enjoying yourself? Is there anything I can help you with?"

That little subtle movement increases my impression of the restaurant by at least 10%. So if you're not doing that, I recommend doing it.


Do you upsell? Do waiters and waitresses say things like, "Would you like to try this? Oh, let me tell you my favorite items on the menu. Are you sure you don't want to have some red wine with this? It goes so well with this. Let me tell you what red wine I recommend."

A Story

The other day I went to Capital Grill, a restaurant here in Dallas. It's not the type of restaurant where you typically go back to back.  But we went back to back, Friday and Saturday night. Here's how scripted the place is.

We went in and the waiter said, "Oh my gosh, let me just tell you about this one red wine that we have. I think we only have two or three bottles left. Let me check. And this is the best bottle of wine you want to have. It's $99. . . We only have a couple of bottles left."

So what does my wife say? "I want to try it." Great. They bring the bottle of wine out. The next day I went back. There was a different waiter, but he said the exact same thing. I looked at my wife and said, "That's a script." But you know what? It's effective because how often does a couple go to the same Capital Grill restaurant back to back? They don't. It worked on day one, but didn't work on day two. But that upsell got them $99, and at 20% that's  $20 more on the tip to the waiter. Good for him. That's an upsell.

 Specials, Desserts, and More

I love it when waiters and waitresses say the special so eloquently. I don't even know what they're saying, but the way they say it makes me respond, "Oh my gosh! I want all of it!" There's a script to it, and  a way you present the specials.

Then you have desserts, handling complaints, and technology. If you're running a business, write all these things down. Then bring it down to five important points, and score yourself. Bring your team together, to look at how you're doing and how you can improve. Then create a call to action.


Listen in here for how to apply this process to a construction business.

I've Been Doing this Since 2003

In all these, score yourself. Bring in a team of three to five people and ask, "What do we need to do to improve this?" I fire the weakest link that I have on the team that's not doing their part. And then we put a plan of action together and we attack it to improve the company.

I've done this since 2003 and every time, I find leaks. In '03 it was my credit score. My credit score was terrible. I put a system together and improved my credit score to 822.

My Challenge to You

You can apply this to everything -- savings, investments, health, relationships, business, leadership - everything.

Find the leaks and attack them. Then you'll see three percent growth here, eight percent there, and 13 percent here. And you don't even see the compounding growth of it over a five or ten year period.

Then all of a sudden people say, "Oh, he got lucky. She got lucky with her business." No, no, no. The entrepreneur that decides to pay attention to details and make improvements ends up with an established business. If you do the same thing, you will have the same results.

But if you don't pay attention to the leaks, that's why your ship sinks.

So my challenge to you is to take out a piece of paper. Write the systems in your business. Identify exactly where the leaks are. Get the opinions of a couple of other people. And put a plan of action together. Fire the bottom, weakest link. Go attack the plan and see what happens in your business.

If you have any questions or comments, comment on the bottom. And if you haven't yet subscribed to my YouTube channel, click on the button below to subscribe.



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