Understanding the Complexities of the Commercial Landscape with Josh Young

I get a lot of enjoyment out of pushing people that said, I can't do this.

There's no way.

And then all of a sudden, a year later, they're doing double what they thought they could.

You know, I have an estimator that came in.

He sold like $2 million, right?

And now he's selling 15 million bucks a year.

Welcome to the Home Service Expert, where each week Tommy chats with world-class entrepreneurs and experts in various fields like marketing, sales, hiring, and leadership, to find out what's really behind their success in business.

Now, your host, the home service millionaire, Tommy Mellow.

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Now, let's go back into the interview.

All right, guys, welcome back to the Home Service Expert.

Today, Josh Young is in the

house.

He is a, he's out of Chandler, Arizona, so he's my neighbor.

He's an expert in contract management, value engineering, construction.

He's the president of new construction at Tempe Mechanical, where he's worked for more than 16 years.

Over the years, he has worked to develop customer relationships on large commercial HVAC and plumbing projects.

Josh also specializes in several industrial projects, hospitals, municipalities, schools, and hotels.

What's up, dude?

What's happening?

Thanks, Tommy, for having me.

That's exciting.

I love home service, man.

I love business in general and uh i love hearing businesses that are growing you guys went from what is it eight to 16 million in a year yeah yeah so we uh we've kind of gone up and down a little bit um but uh yeah when i took over we actually spiked to about 16 then we came back to about 10 and now we're up to 37.

really yeah just in two years so So what, that's a lot of fluctuations.

Yeah.

What's what happened?

What's the good, bad, and the skinny on it?

Yeah.

So we started.

Obviously, I became president

two years ago.

I was vice president for a little while.

So my dad kind of retired.

I took over the business, and then I had to learn the business, right?

So he just kind of like dropped it and walked out and was like, hey, here's a, you know, here's a $10 million business.

Good luck.

Have fun.

So I had to kind of learn.

you know, what to do, what not to do.

And of course, like anybody, right?

I wanted to run for the fences.

So what I did was, yeah, I wanted to scale it, right?

So, the things that were going on at the time was a bunch of high-rises.

I'm like, hey, I'm going after the high-rises.

We weren't equipped.

We weren't ready.

We didn't have the manpower.

I didn't care.

I just went running right into it.

So, we did our first high-rise.

We didn't, you know, it wasn't great.

We didn't make a bunch of money, but we're like, hey, that was the whole point.

Set us up on the first one.

We learned, right?

So, we went into a couple more

and just about crippled us.

The manpower, the resources, the cash flow that you need and the logistics behind it were just absolutely way more than I expected.

Yep.

So we took a step back

and kind of reevaluated everything.

And then after that, learned that high-rises are not for us.

So we said, what is for us, right?

What works for our business and the people in it.

So we kind of put our plan together for marketing and the front end and just started, you know, doing what we know we're good good at, right?

What are you good at?

So we like

small, complicated projects.

And I say small, you know, not 20 plus million dollar projects.

We like between a million and 10 million dollar jobs.

And it's all HVAC related?

Yeah.

HVAC and plumbing.

Okay.

Yeah.

So.

And it's all commercial.

All commercial.

And it's commercial funded like apartments.

We don't do multifamily.

Another thing we're not good at.

So, and we try to stay, you know, under five levels, right?

So, like I said, high rises is not our thing.

Once you get

above five levels,

it just gets way more complicated, right?

Your logistics goes through the roof.

It gets it gets super complex.

Huh, interesting.

Now,

one of the things I hate about commercial

is the way they pay.

How'd you guys figure that out?

Overbill.

Overbill.

Get ahead of it.

So

if you can get ahead of it, then you're not in such bad shape.

But I agree with you 100%.

Every contract we sign is set up in a way that the contractor is going to benefit, right?

We're always behind

most of the time when it comes to payments, right?

I mean, we're right now we're 90-day pay, you know, on some of these contracts.

So it is painful in that sense.

But what I can tell you is if you get ahead of it and you can create, if you can create a billing or structure that you're able to bill ahead of it and you can get your, your money sooner, then your cash flow doesn't get affected.

Right.

And that's kind of what we've done.

What is your goal, bottom line, net profit?

Net

net.

Yeah.

Bottom, bottom, bottom line.

Yeah, some percentage of revenue.

I don't know that I have like a goal for net profit,

be honest.

We have a goal for gross.

Gross profit?

Is it in the 50s or the 40s or the 30?

30.

Yeah.

We're lucky to hit 30.

Yeah.

Damn, I'm shooting for 70.

Yeah.

Well, we're in the wrong business.

Well, you know, B to C is a lot more complex, but I wouldn't do it any other way.

You know, people always say, why don't you get into commercial to me?

And I'm like, well, it's a different pay structure, different talent,

different

trucks.

different OSHA guidelines, different accounts receivable, different finance.

It's not even in the same hemisphere.

And people are like, why aren't you doing more acquisitions?

I'm like, because they do box stores.

They do new construction.

They do fireplaces.

They do front doors.

They do commercial.

And when you're small, unfortunately, you take on everything you can.

I remember I did a commercial job and it still haunts me.

I not only lost money, but I lost time, effort, energy, and a fortune.

It was a custom gate with solar power.

It was just stupid.

And it was a buddy of mine and I felt so bad, I lost my ass.

I had to pay a company to go fix it.

Like, that's how bad it was.

The other bad part is you don't make the rules, right?

Somebody else makes all the rules for you, and you have to abide by them, whether right, wrong, or indifferent.

Half the stuff isn't even, is against the law.

The bureaucracy and the red tape is ridiculous.

And,

you know, I'm building a place in Idaho, and I think there's three inspections required.

You're allowed to build 47 stories tall on residential.

I think that's almost, it's under, like, there should be a little bit more guidelines for safety.

But I will say, I like this city a lot.

I don't think I'd,

I have an opportunity where I can live wherever I want.

I'm from Michigan.

I really like Michigan, but I don't, I don't miss the winter.

Well, that's probably why we get along then.

My whole family's from Michigan.

Really?

Yeah, yeah.

What part?

Boyne City.

I don't know if I know Boyne.

So it's up north.

You know where Traverse City is?

Yeah, that's where I just went my golf trip last year.

Yeah, so it's just east of there.

So

just east of, so

this May or or July, we do a golf trip called the Magruber Open.

Okay.

My team's, I pick the team.

My cousin picks the team.

I'm undefeated.

I just have to throw that out there.

I'm also undefeated in my volleyball for my pinnacle trip to Mexico next week.

But

we're going just east of Traverse City.

And I don't know.

It might be the same city.

Is it a golf area?

Not really.

They're kind of on the lake.

in that.

It's a very small town.

Okay.

So it's probably near there.

Yeah, but it's probably close.

That's that's awesome man yeah the midwest the best i um

i like this city because it's easy to get around it's not hard if you want to go to flagstaff or sedona you can get there not far from vegas not far from kelly uh it's a planned city it's a grid and it's just a lot of stuff to do uh i'm not a big fan of uh the west side glendale i'm not that yesterday we were at an event at downtown phoenix i hate downtown phoenix but i like scottsdale paradise valley i like chandler i like gilbert you know i like the east side of phoenix yeah that's the same for me i grew up in the east side i grew up in Tempe

and then moved out to Chandler, so not far away.

But yeah, I love the east side.

I don't know that I would ever moved to the other side of town.

Like you said, Glendale, not my place.

No, it's downtown Phoenix, not my place.

I lived in, you know, actually, I will say North Phoenix.

My mom lives off Cave Creek.

It's okay up there.

And then...

I used to live off of 7th Street and Bethany home.

And there's an area over there that's all old trees, and it feels like the Midwest.

That's where my pastor lives.

We go to Impact Church.

Yeah, where do you live?

I thought last time we talked, you were moving or you were building a house or something.

Paradise Valley.

Okay.

And I'm moving to the north side of Camelback, northeast corner of the land.

Yeah.

It's called Billionaire's Row.

My neighbors are going to be the Waltons and the Disney family.

There you go.

So that's a wonderful way to help.

Yeah, yeah.

But I'm building my dream.

Like, it's like a, it's passion of love.

But

we were going over the game room and I'm like, I don't have any feedback on the whole house except for the game room.

This is where I need to be perfect.

So it's really sick.

But anyways, tell me, so you've kind of got to learn the business.

What were some of the biggest mistakes you've made?

Obviously, fast growth.

Yeah.

You know, chasing revenue versus profit is probably one of the big ones.

Yep.

Yep.

So exactly.

Chasing revenue instead instead of profits is big.

Taking on stuff that, again, we're not good at, right?

Thinking that we were,

you know, capable no matter what building we went into

and finding out that wasn't the case, right?

And being more prepared, I guess, is something I've learned through this.

And also letting other people kind of help in the decision-making process.

So I think sometimes we get, you know, as managers or leaders, we think we have to make all the decisions, right?

And all our decisions are going to be the best decisions well i learned that letting some of my other leadership and even some of the people down even further down uh make some decisions and have some input um changed my views and and actually what kind of projects we went after um you know how how fast we could get projects done you know bringing in that feedback so i think you know A lot of that I learned going through challenges like taking on the high-rise building, right?

Taking on some of these projects that we weren't prepared for.

So there's this saying that a mistake made more than once is a choice.

So you got to learn from your lessons.

And theoretically, I always say like hypothetically, I've got scars and bruises all over from all the mistakes I've made.

And this experience, I believe, there's a lot of smart people that get master's degrees.

I've got an MBA.

You take my MBA at the age I was.

compared to my experience without an MBA.

This guy's way smarter without the MBA because of the experience.

100%.

And a lot of people,

they've got this authority complex.

Like, I've got the knowledge, I've learned, but

they lose the humility and humbleness.

And they think because they went to a stupid school with a tenured professor that never made it in the real world that they're ready to make big boy decisions.

And it's just not the case.

And it's funny because private equity is getting into it, but without great founders and leadership, private equity fails.

If they could do it, then they would.

Yeah, yeah, 100%.

So it was funny you say say that because I was at a CEO group meeting just yesterday and there's a doctor that created a business and has been running it for, I don't know, 15, 20 years.

This young kid with an MBA comes in, super smart kid, right?

Gets to her to believe that he should be the CEO of the company because he's smarter than her.

We basically showed her that like, hey, you have the knowledge.

You're just doubting yourself right now.

And by the end of it, she was like, yeah, yeah, what am I doing?

What am I thinking?

Like, just because this kid's, you know, showing me a bunch of cool stuff, you know, and has a bunch of new shiny objects, I, I should put myself to the side.

What's the CEO group called?

Vistage.

Oh, okay.

I've heard of Vistage.

Are you in a CEO group?

I'm in Joe Paulish's 100K Genius Network.

I'm in a couple other things.

I pay

Dan Martell, Cameron Harold.

I've got a lot of coaches.

Okay.

But I'm not in like YPO or EO or any of this stuff.

I just, it's a commitment, and I don't like to tell people I'm going to do something and not show up because I'm busy.

I'm sprinting at the next churn of the company, the next equity deal.

You know, that's a great question I had for you: is I think every business should be built to sell.

Yeah.

What's your goals with this business?

How do you look at it?

What's your timelines?

How are you manifesting the outcome?

Where do you see the business in three to five years?

So

my big audacious goal right now, my BHAG is $100 million I want to do in one year.

You know, that's kind of my 10-year plan.

Hoping to be able to get it done quicker than that.

We'll see.

But

I don't really have any plans to sell right this minute.

I've got three other partners in it, right?

My brother's a partner, and so is my uncle.

My uncle's only got about three years left, and then we'll buy him out.

So it'll be me and my brother will, you know, own it.

But I don't, you know, I'm kind of playing the long game.

You know, I see all these companies getting bought up by private equity and people kind of just, you know, getting out of the game.

And I think that's a benefit to us.

I think we're going to be one of few

small subcontractors or subcontractors out there that are family owned.

And I think that's a, that's a huge

advantage that we're going to have in the market.

So.

Yeah, you know, I'll tell you this.

There's great stories and then there's there's the nightmares of private equity.

I happen to,

mine's a dream.

Mine, and I'll tell you this: people underestimate what you do with the money they give you, but that money.

I had a guy come up to me yesterday.

I was at an event, and he's like, I'm doing a deal next week.

I go,

You idiot.

I go, You should have called me.

I've got so much advice about this.

But anyway, you found a great company.

I'm really excited for the guy.

But I really, I didn't know my life was going to be,

it's better.

I will say.

So explain, because obviously I've heard both, right?

I've heard the same thing.

So I just read a book, you know, Building an Empire.

Yeah, by Adam Coffey.

Yeah.

Yep.

And so, you know, that's kind of the positive side of it and how you can, you know, use private equity to kind of grow and do all that.

Well, you roll equity.

So I rolled 50%, 49%.

So the deal is, is this next deal, I'll be a billionaire on the next turn.

But the fact is,

Jet Bezos owns 8.3% of Amazon.

Mark Zuckerberg owns 14% of Meta.

Like the way you build an empire is by getting cash infusions.

Otherwise, you're reinvesting your living off of it.

Now, here's the deal.

I'm going to write a, I'll give you my book when it comes out in September.

It's called Pay Them What They're Worth.

And it's about equity incentive programs, Phantom Equity, profit units.

There's a lot of ways to skin this cat.

But you want to give key players in the business, number one, it helps you recruit the A-plus best players in the world like Elon Musk does.

Number two, it keeps people from leaving.

Number three, it has them run and sprint towards the same goal you are, which is build an equitable company.

So the deal is they do not get the money till a change of control.

So your second turn, you could make more money than the first turn.

Parker and sons, good buddies of mine, Paul Kelly.

Five turns.

Sold the business five different times, pulling out chunks, tens of millions, if if not hundreds of millions of money each time.

So my life, I had money.

I had $12 million in my account before we did the deal.

But now I'm like, I will say this.

I'm taking my niece and nephews next month to Disney World.

We're not waiting in any lines.

We're getting VIP and the money's a fart in the wind.

I don't worry anymore.

I pay for dinner every single time and I don't ask anything in return because I worked very hard to be able to do this for my friends, family, and people that are important to me.

And I will say, like, it's not that I didn't have money, but now, I mean, look, my house is the most expensive house in Arizona that I'm building.

And I'm not cocky, but, but here's the deal.

Right now, there's five people staying at my house.

My employees come to my house.

My mom's birthday party was at my house.

My dad's birthday party.

My niece, three years old.

We have,

like, I'm doing this.

I could live in a thousand square foot apartment.

But I'm doing stuff because I want to take people with me.

I want to live the best life.

I want them to enjoy this stuff.

So for me, that was good.

I'm helping, like, I'm going to give a ton of money to the church.

Do you think, though, do you think even you could never have done that without without those guys or without?

Well, I'll tell you this.

We went from 27 million this year.

We'll do about 80 million net of EBITDA.

I learned way more going through the process.

Ken Goodrich with Kettle called me up.

He goes, you're a badass home service dude.

He goes, when you learn what these guys know, how to raise capital, how private equity works, how the money game works, the financial engineering, you're going to be an effing ninja.

And he was right.

And so everything they tell me, I listen.

I have two ears and I write it down and I implement quickly.

And now I'm like, I'll never invest in a business again that's not going to have an exit within the next five years.

And I'm not trying to change your mind.

Look, I just want you to have the full knowledge of what I've been through.

I think a lot of people

don't understand.

They're like, oh, I'm going to lose a piece of my soul.

There's a book called Shine by Gino Wickman that when you sell your business, it's a piece of your soul.

It's like a part of your DNA.

For me, I'm like,

my face is on the side of the trail.

Like, I trust me, I'll have plenty to do.

And like you said, I want to start going golfing again more often.

I've never been married.

I'm 41.

I'll be 42 in March.

Yeah.

Congratulations.

No marriage, no kids.

I'm engaged, but I've had to sacrifice two decades and break the family curse of having nothing.

My mom worked three jobs when I was a kid.

My mom lives a really effing good life now.

But the generational curse had to get broken.

And

nobody should live the life I had to live.

And nobody should not be able to, like, I sacrificed not getting married and walking out of movie theaters and broken up with girl after girl after girl.

If a girl wanted to hang out with me that I was dating, we were going to fix Gros Rose together.

That was our time.

So people say, I don't want what you got.

I'm like, okay, don't get married.

Don't have kids.

Be careful what you wish for, right?

I'm an overnight success of two decades.

I think, and here's the deal.

Like,

when you get, like, this company that's guiding me, They don't tell me what to do They just ask really smart questions and make me think through a different lens and that's why it's good to have consultants Dan Martel got me to look through a different lens about things.

That's why I hired a driver and a chef.

Yeah, that's why I go to vistage same yeah vistage is amazing So is YPO I've heard is really good Tiger 21 I don't know if you ever heard of that Tiger 21 is like

They're very very wealthy.

I'll have an exit.

Did you go to Waste Management Open?

Who's the guys that they wear wear the medallion and they run the whole tournament?

Oh, geez.

What the heck are they called?

I forget the name, but it's something like that.

Yeah, with the green jackets or whatever.

Yeah, they're like bluish.

Yeah.

I don't remember what it's called.

If you could go back from the day you became the president, what would you have done differently?

What would I have done differently?

Obviously, listen to your coworkers a little bit more, get their insight.

Yeah.

To be honest, I don't know.

I don't know that I would do a whole lot different.

You know, like you said, I mean, you just, you have to go through it, right?

You have to make mistakes.

One of the things I told my dad early on in the reason he kind of walked away from the company and sold it to me was because

on the way back from a job site, I basically just looked at him and said, hey, have you never made a mistake in your life?

Like, let me make mistakes.

I'm going to learn from them and I'm going to make things better.

And I think at that time, he was kind of like, you get it.

Have fun, right?

Yeah.

So, so I think I don't know that I would change anything other than

shaped who you are and the decisions you make today.

So I agree with that.

Right.

So,

you know, other than that, I just think, you know, learning faster how to become a leader and being more humble and not being so stuck on, you know, the dollars, right?

And me, like, what's in it for me?

What, you know, once I got over to that part, if I could have relieved that part of it like long, long ago, I guess that would be the one thing is like being more humble and and not doing it for me doing it for the cause and and for the people underneath me i think would you know i i would be in a lot better place today if i had learned that faster

you know i i'm gonna give you a bunch of books to read but there's this new book called the courage to be disliked and if your mind is set on the mission you're gonna break some glass getting to that

But the deal is, if everyone's focused on the mission, it changes everything.

And it's what true leaders are.

And there's very few real leaders in this world.

They're not willing to do what it takes.

I'll say this.

I like to be liked.

It's a flaw of mine.

I don't fire anybody.

I haven't fired in over 10 years.

I like to be liked.

I like to be the

my glass door rating is 93% as a CEO.

I don't need it to be.

It's just a pride thing.

And

I kind of get bullied sometimes.

And I got a a lot of know people around me.

I'll tell you this.

Most of the team will tell me to go F off and no, respectfully, but they say no.

And I need that.

Yeah.

Because I'm a dreamer.

And, you know, they're very, they're very focused on the goal.

I mean, look, we hit last month 27% to the bottom line.

27%.

That's awesome.

That's nutty.

Yeah.

And I'm like, I think we could hit 30.

Yeah.

But you can only.

bleed bleed so much you can squeeze so much blood out of a turnup like the the idea is you got to go revenue growth too so we missed our revenue goal last year we we exceeded our ebita number and so this year is going to be a heavy revenue growth year yeah but i love this man i could talk about business all day like this is like people are like how do you work so much i'm like i never go to work yeah this is what i do yeah i don't know if you do you love what you do just as much as i do oh yeah yeah yeah i love i love love business i don't know that i love commercial construction as much.

Yeah.

Right.

But I do love business.

I love the financial part of it.

I love going through, you know, an income statement or a balance sheet and picking out things.

You know, how do we do this better?

Like I said, we were talking about, you know, how did you get, you know, get so good with the cash flow and making sure that you don't get behind on payments with these people.

Just figuring out those issues,

I really enjoy.

And building the business, right?

Building people up, pushing them to.

do things that they never thought they could do, right?

I get a lot of enjoyment out of pushing people people that said, I can't do this.

There's no way.

And then all of a sudden, you know, a year later, they're doing double what they thought they could.

You know, I have an estimator that came in.

He sold like $2 million.

Right.

And now he's selling 15 million bucks a year.

You know, he said, there's no way I'm going to ever get there.

Right.

And I just kept pushing and pushing and pushing.

And finally, you know, last year, he went above what he had set for a goal.

So that's the kind of stuff that I love.

And one of the things that I finally learned is I do need a leadership team.

And I didn't know what that meant.

And I can tell you, Vistage has helped me quite a bit.

I was going to ask you about that.

Yeah, Vistage has helped me quite a bit in that sense.

I should have joined a group a long time ago because you only know what you know, right?

And if you're not meeting like you are with

people every single day or

in your industry or different industries, you just don't know.

You don't know what's out there.

You don't know the people you can go to.

So Vistage kind of opened my eyes up to that.

And I was able to ask more questions to different people.

And

so

I learned really fast the type of leaders that I wanted and then started going after them and wasn't afraid to pay, like you said earlier, right?

Pay what they're worth.

I mean, I wasn't afraid to.

It's not impossible you could ever pay, which means you got to raise your prices, but it means you start on time and you finish on time and you collect on time.

Right.

Everybody's happy.

Yeah.

And the clients are happier.

The clients that call us up, they're like, we've had a garage company out.

We've had three garage recovers out out here in the last two years.

We don't care what it costs, just fix it right.

Because I'll tell you what, how much is your time worth?

I don't always call the best deal.

I want the best investment.

And there's a big difference between paying the best value or paying the best price.

Hey, guys, hope you're enjoying today's episode.

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Now back to the episode.

So I'll tell you a story.

My father-in-law just had your guys out to fix his garage door.

So no, it was great.

So I'm over there during Christmas, right?

And he's telling me, yeah, I got these guys to come over and do.

I said, who was it?

And he's like, A1 garage door.

I'm like, oh, Tommy Mellow.

And anyways, we're getting to talk about it.

He's like, yeah, all I wanted was a new garage door, right?

So the guy comes over and he said, this guy was super knowledgeable.

So he starts talking to him about the springs and about the rails and about the different things, right?

Not necessarily trying to upsell him, just talking through things, educating him, right?

And he was like, by the end of it, I had not only garage door, but my rails were changed, the springs were changed, the head was changed.

He said he hooked me all up, got my iPhone working, you know, with the garage door.

He was super stoked about it.

And he paid like 15 grand, you know, he was looking to spend like five, you know, and he was excited that he spent more money because, you know, he had a story to tell.

And I was just like, I'm like, wow.

And that was, I mean, kudos to you, man.

Like, that's, that's huge, right?

Well, we train a lot on that, but the biggest thing that we train on is like.

Be a great human.

Like, here's my number one rule.

Would I go have a beer with this person?

I want to go on a camping trip.

Like, dude, I want to like get to know you.

Like, do you make great eye contact?

Do you smile when you work?

Do you ask great questions?

Do you tell a great story?

Because that's like my litness test if you're going to make it here.

It's not if you're a great technician.

I can teach anybody to fix a garage door.

I want, and I need to be able to trust you if I got a wife and two young daughters at home to be there with them alone.

So that's a big deal to me.

And here's the thing is my mom worked three jobs.

I love my mom.

And I tell the story to my clients.

I say, I love my mom more than anything in the world.

And here's what I'd be doing for mom.

If this were mom.

Yeah.

And I just smile.

And I look at them genuinely in the blackest part of their pupils and I just smile and they say, all right, then let's do that.

But if mom's moving in two weeks, I just got to get it past inspection.

Do the right thing for mom.

I'm not trying to like take advantage of you.

And here's another thing that I'll tell you.

Always give options.

Because if you're not giving options to your clients, you're giving them ultimatums.

They can only say yes or no.

So say, if they say, wow, that's more than I was expecting to spend.

Oh, let's just sue a more economical option then.

It's up to you.

But you'll have 100% conversion rate if you give options.

Yeah, I agree.

We do the same in our business, right?

Even though we're given a set of plans and specifications and told, hey, this is get them pregnant.

Yeah, this is what we want, right?

You get them to say yes.

I've learned this about commercial.

Yeah.

And I'm not even doing commercial.

You get them to say yes, and then you say, by the way.

And then what are those called?

Adjust, not adjustment, add-ons or what?

Yeah, we get the change orders.

Yeah, change orders.

Yeah.

That's after you get the job, though.

You get the job.

Yeah.

You get job.

We give what we call VE options, right?

So value engineering options.

So it's like, hey, if we do this a little bit different, we can save you a bunch of money.

And sometimes they're like, yeah, we'll do it that way.

And sometimes they're like, no, we want it exactly how it is on the plan.

So we call it value engineering or VE.

I love that.

So

one of the things I've learned about myself over the last couple of years is I'm a seeker of knowledge.

I'm curious, and I bring it back to the company, and I got a team that helps implement it.

What What is Vistage?

So it's taught you, number one, to get a good team around you.

What other things have you taken from being around the best practices group like that?

So, you know,

don't be afraid to, you know, talk about things that are going on.

I feel like some people, you know, they want to be the biggest and the baddest company out there and they don't want to show, you know, you know, their dirty underwear, right?

And that's what the nice thing is.

Going to Vistage, it exposes that, right?

So it's like, hey, this person's having an HR issue well so am I and so is this person and so is that person right so it's it's nice to be like I'm not the only one out there with these issues and then you learn like holy crap everybody's going through this

you know so I think you know that was one of the big things in friendship you know you're you're in these meetings they get kind of deep I've made a bunch of friends through it and and when I say friends they're just they get it right they're a business owner they go through this stuff every day you can talk to them on a different level than your neighbor, right?

Or your friend from high school that, you know, works a regular job.

So I think some of that is also important.

And it gives you contacts, right?

It gets you in front of people, again, business owners, contacts.

You know, helps you, you know, kind of get a network of people around you that you can trust that will help you, you know, hopefully grow your business.

You know, Brie hates it when I'm around somebody like you because I enjoy talking about business and I don't get a chance to talk to all my friends, family, cousins, and stuff.

So she's like, oh, my God, all you do is talk about business.

And I'm like, no, I don't.

I don't get a chance to talk to anybody about this stuff.

And you as sure as hell don't want to talk about it.

So, so I enjoy the discussions.

Like, my buddy Aaron Gaynor has a massive plumbing company and he added HVAC and Electrical.

Then he's in Columbus, but he's out here.

His son's going to ASU.

So he comes out here.

We just, dude, he tells me something and I take notes and I'm implementing.

And he's like, we text each other all the time.

And like, it's nice because he's going to do 100 million this year.

Yeah.

And it's nice because I talk to people that like, here's the deal.

You hang out right now.

You're at vistage.

The best advice I could give you is you got to be able to adapt and change your circle quickly because as you're scaling, it needs to be, I want to be the dumbest guy in my circle.

And that means I can't be in the circle because my goal is to win in my circle.

I'm a competitive SOB.

And then I got to look over at this next mountain and say, huh, I got to go back to base camp to start climbing this mountain.

Who's the best, smartest person that's going to get me up this mountain the quickest?

It doesn't mean I don't have friends.

I have a lot of friends.

It's just, I still,

Dan Martel taught me this.

He said, you can't pick your friends when you're in middle school and elementary school and high school.

It's like neighbors.

But you can pick your friends as you get older.

And, you know, it's not only about money either.

It's about fitness and faith and

fun and future self and the six six F's, I call it.

And

so, you know, if you want to be a better father or a better husband, you need to like hang around with guys that don't go to the strip club.

So really picking really great friends.

And that's the time machine.

That'll put you 20 in six months, you can go 20 years faster.

But just being around, you want to become a better golfer?

Hang around with better, three people that are better golfers when you go in your foursome.

That's true.

If you don't, you're not going to play good and you're going to drink the whole time and just get wasted.

Yeah.

No, that's good advice.

I appreciate that.

Like that's, that makes a lot of sense.

Like I hang out with guys now.

At the Waste Management Open, I invited a lot of home improvement people there, not home service.

Everybody there did over a billion.

A lot of them were doing 2 billion.

So I'm like, guys, I'm only going to do 320 million.

Yeah,

I heard you were talking about on one of your podcasts, you're looking to get into...

home improvement stuff.

Oh, yeah, yeah, yeah, yeah, yeah.

Because my multiple is still two and a half times theirs.

Well, you know, commercial, I mean, you can skyrocket in commercial.

Well, I can't do it at all.

The amount of dollars that are in that that

There is a lot of money.

My buddy is already doing 15 million in commercial.

It's like I said, but you got docks, leather, storefront, rolling steel.

You got all these different things.

And if it was just garage drawers, I might do it.

And here, like, for example, if I just did firehouses in Phoenix, I can make a small fortune.

Yeah.

I just...

It's something where I'm not going to dip a toe in and dabble.

If I'm going to go in, I'm going all in.

I'm hiring a whole team.

i don't just go we'll just try it out and see how it goes no i'm going all in and i'm hiring a badass team to go like but but here's the thing do we go into commercial do we go into water treatment do we do front doors

so i'm working on some cool stuff because my average ticket is about a grand

but i run 22 000 jobs a month wow what if i get it to five grand yeah you know what the company says

that's what commercial does for us oh i know the tickets are you know yeah the project

yeah yeah so we have a service department as well.

And same thing, right?

Their service tickets are small, right?

So it takes a lot more effort, a lot more jobs to get to that point where we can, you know, it's like, hey, we just secured a $10 million job yesterday, you know, one job.

But as long as the profits there, because if it's not bid correctly, you got the blue book that you guys go to bid it on?

No, so we don't, we try not to do hard-bid stuff, right?

So we've been around long enough now, 38 years, right?

Everybody knows who we are.

Business development, Julia.

She kind of goes out and meets with all of our clients and brings in leads so it's all warm leads we we rarely bid anything that somebody else is bidding on oh that's nice so it's all negotiated work and then and then you get to charge by the hour and so you can't lose money not not necessarily that but you get to work with them on the front end right so you kind of create the the budgets from the the beginning.

So it's not a surprise, right?

So we come in, we say, hey, this is a design we should do.

This is what it's going to cost us, right?

And then we bring in some engineers, architects, they design it.

And as long as the price adds up, it's like, hey, yeah, everybody's happy because you told us this is what it was going to cost.

We designed it.

That's what it is.

So that's what we like to do.

And then they just sign us up and we move forward and everybody's planning.

So what do you think an average ticket is?

For us, probably around a million bucks.

1 million.

So you need 100 jobs to hit 100 million.

So,

but I like to reverse engineer my my numbers.

That's how you build a budget.

And what I look at is, here's my revenue goal.

Here's how many leads I need.

Here's my booking rate.

Here's my conversion rate.

Here's my opportunity, job average, or average ticket.

So then I just look at the marketing side.

And as long as those are good equations, like good booking rate, good conversion rate, good average ticket, then you just pour gas in and get more leads, which means you need a higher rate.

But that's the deal for me.

100 million, what I'd start to do if I were you, 100 million is the goal.

Here's how many leads I need.

Here's how I'm going to bid it.

Here's how I'm going to be an acquirer of great people to help run the business.

And that way it becomes a reality.

And you share that vision with everybody in the company and say, here's the plan to get there.

And it's based on lead gen and conversions and collecting on time.

And that way, you know, what's nice about 100 million too is you start buying better.

So you got to like negotiate with your vendors.

Right.

And that's a big part of HVAC plumbing.

Yeah, we're getting, and we're getting even at 50 million, I think, you know, like right now, there's already some guys coming in, right, and pocturing and like, hey, how can we sign a contract or make a deal with you guys so you're buying, you know, straight from us and, you know, not shopping it around.

But yeah, agreed.

You can leverage that, right?

When you're buying a bunch of stuff, you can leverage that 100%.

Well, I always say, look, right now, I'm spending 60 million this year with my manufacturer.

Like,

here's the old saying that I say.

When you owe the bank 100 million bucks, you got a problem.

When you owe them a couple billion, they got a problem.

You get to start calling your own shots.

And that's what's nice about being in the garage door business in 20 states is I'm able to buy better than most companies.

And

my competitors aren't very happy about it, but I'm like, then just get bigger and buy more.

It's not my fault.

We grew faster than you.

And by the way.

I showed you, and you're here trying to tell people how to do it, right?

I tell them it's the idea to do it.

I'm trying to show you how to do it.

I had 40 garage door companies come here about four years ago, and I said, how many of you guys charge this for a garage door and an opener?

And they were shaking their head, angry, and they were like, how do you sleep at night?

And I go, how many of you guys make sure your people can make six figures a year?

You train them for three months.

You give them the best PTO and insurance possible.

They drive new trucks.

You're allowed to be on billboards, TV, radio, like the HVAC plumbing guys.

How many of you guys do all those stuff?

We give your guys $6,000 worth of tools.

Any of you guys give your guys $6,000 worth of tools?

Every one of them shook my hand that day and said, I'm going to raise my prices.

Yeah, it's the way of thinking, right?

Alex Ramose says most people go into business, they find what's the average cost of this parts.

How do I offer it for a little cheaper and to give a little bit more, not knowing that the people you're following are bankrupt, barely making ends meet.

You're not in business to make a living as a W-2.

You're in business to

make profit.

And I think people forget that.

Like, the normal goal of business is profit, or else you don't stay in business.

Your clients lose and your vendors lose and your employees lose.

Well, yeah, and that's that's the whole thing, too, right?

Your employees are going to lose, right?

If you're not profitable and you're unable to grow and you're unable to raise their wages, right?

Yeah.

You just stay in one place, right?

And nobody wants to do that for very long.

So, yeah, all your employees are going to leave, right?

I mean, if you can't help them grow.

How do you get leads?

I mean, when you're going and meeting these people, these soft sales, is it just past clients?

Or is it like, do you guys go to B ⁇ I groups?

Or how do you get these soft touch points?

Yeah, so all the above.

There's events that we go to, right where where you know people from our industry all get together and you just kind of meet and greet talk about it uh we also are in a couple associations um aba arizona business alliance is one of them um they're is that good yeah they've they've helped us tremendously so they do teaching and training you know like leadership training project management training uh stuff like that um but getting involved with them um helps us because it gets us in front of our clients on a regular basis outside of the norm, right?

Otherwise.

Arizona Business Alliance?

Yeah.

Okay.

Yeah.

And they're a good group of people.

And the whole point of it is, so you have the unions, right?

And the unions have their own training and their own things and their own groups.

And non-union guys don't really have a group, right?

Right.

So the ABA was created.

It's AGC ABA.

But they were created basically to help.

the non-union guys.

Like, hey, let's get together.

Let's talk about best practices.

Let's help with the teaching and training, right?

Let's let's help each other.

There's 168 hours in a week.

168 hours.

How do you make the most out of those 168 hours?

If you work 50, you sleep 50, you work out for 10, you still got 60 hours left.

You could go on a date with your kids every night.

You could take your wife on a date, watch your favorite Netflix slow, read a book, and still got 20 hours left.

So people say, how do you find the time?

I'm like, you get a good EA and you get your calendar.

budgeted correctly.

Planet, yeah.

Planet correctly.

And that's the equalizer.

I don't care how rich you are, we still got the same hours.

It's how could I compound mine more?

I don't even, I don't know the password to my email.

I don't look at email.

Like, I've got a whole team now.

I've got processes for this.

Here's what I think everybody should do.

Get an old-fashioned journal, you know, a calendar journal, like the old ones that you write in.

And literally every 15 minutes, write down what they're doing.

And then if they could hire somebody, for less than they make per hour, which is an easy calculation to figure out, you highlight all that stuff.

And then that's the first hire you make.

You got all this time back and you start making high-level decisions.

And do you think Jeff Bezos is working 80 hours a week?

You think he's working 40 hours a week?

He doesn't start his day till 10 a.m.

He makes his important meetings between 10 and 1 p.m.

He takes off weeks at a time.

This idea of butts and ceases, more hours equal more productivity is crap.

I like Ed Mai Lepp and he says I work seven days or you know three days to year one day.

I don't want to outwork anybody.

I want to out delegate their ass.

Yeah, I have a funny story about that.

So I had a, when I was growing up in the business, obviously I worked for my dad, but he had hired these project managers.

And it was funny to watch them because it was like, who could outlast who the longest, right?

And I remember leaving one night.

You know, I usually stayed there till, you know, four o'clock and then left because I always thought it was stupid.

Like, why am I going to stay here even longer if I don't have any work to do?

I just thought I was more efficient, right?

I get my work done and get the hell out of there.

Anyways, I'm on my way out one evening, and there's a project manager passed out in his chair, right, sleeping.

And I wake him up and I'm like, what are you doing, man?

I'm like, go home.

You're not kidding anybody.

You're not just because you think you're working harder.

I stayed here till eight o'clock last night.

It's like, if you, if you got that work.

Yeah, yeah, right.

He didn't want to go home.

Yeah.

But I just, I don't understand the, you know, let's watch.

Well, I used to, I will say on unfair, I used to say, why aren't you here today?

Like, everyone takes Fridays now from home after COVID.

And it bothered me.

I'm like, why am I here?

No one else.

And I'm like, you got to show face.

And I still think it's important to see people in public and get to know them, personal relationships.

But now I'm like, I don't care if you work 10 hours a week.

I really don't.

But I don't care if you work 80 either.

Like, if you're more productive and you're smart and you figured out a way to do things, like the biggest thing, we're taking a class, me and I've got two EAs and Brie helps a lot.

So we're taking these AI classes because if you could input artificial intelligence, by the way, 50%

of the top 10, they call it the

Fantastic Seven or something about the largest seven,

Apple, Nvidia, the biggest companies, 50% of all their money is going into AI.

Like, if you don't start to learn it right now and start to get smart with it, that's another thing I'd fear, just being a family business, is PE is at the cutting edge looking to all the technology yeah and the bidding systems have you guys

have you guys implemented AI and if so what like what are some of the things that you're implementing now

so one of the things you feed in is is you could feed in your income statement balance sheet PL

and it'll literally tell you like it could compare markets it could compare like it takes all the online data and it says like my buddy that I told you the plumber put his in and it said renegotiate with your vendors because of the uh the cost analysis of the supplies which is the cost of goods um so like that's one way another way is like i started using chat gbt just in emails so i actually seem like i know what i'm doing yeah yeah and like i'll take books now and get the summaries and just if i love the summary uh i'll read the book but if it's something that i like but the deal is is i don't even know what i don't know like once

once

once you start using these tools like ai right now, we built a software that listens to every call in the field.

It's recording the call.

This is a one-person consent state.

And it actually matches to our script.

And then it tells you what they didn't do correctly.

Their voice inflections wrong.

It literally tells us in a snippet how to train them.

Like, this is the crazy thing.

It's like my call center right now.

If I showed you Lace AI, it listens to every CSR's call.

If they don't book the call, and it automatically handles the disposition, I'm at 89% booking rate.

There's some people at 75%.

It tells me the objection.

It goes right to the call where the objection was.

And then it's got five trainings of people that overcame that objection for them to train on.

Yeah.

This is happening whether you like it or not.

And there's this exponential effect of technology will be compounding faster than human beings can keep up with it.

But just get ready.

What do you think about these autonomous cars, like the no people driving these cars?

Yeah, yeah, yeah, yeah.

Well, look, it's going to change a lot because,

you know, Lyft and Uber will be out of business.

It's really big here, obviously.

You see them everywhere, the Waymo.

And whether you like it or not, you better, either you're going to embrace it or you're going to get ran over.

Well, just think, I mean, just think about like the autonomous cars.

I have discussions with people all the time about this.

I think it's going to be, so that's where it's going to start, right?

I mean, who wouldn't like for us, right?

Get in the car and maybe you have a driver, so you don't need to worry about this.

For me, I get in my truck, like, I mean, 30 minutes to work, 30 minutes back.

I mean, drive to meetings, you know, so I mean, imagine how many hours a week.

Yeah, how many hours could you get back?

And I mean, I could be on my, you know, my computer, on the phone.

Why do you think Google's investing more than crashing?

Google's investing more money than anybody.

You want to know why?

Because they're losing an hour a day of your ad spend.

You could be clicking on ads.

Yeah.

And TikTok's losing money on ad spend and Instagram and Facebook.

So all these companies are saying if we could get you in your car to be on social media and on Google,

we get to make more money.

Yeah, not to mention we can bring down insurance costs because

people wouldn't be crashing into each other.

Well, here's the problem.

Listen, there's a lot of books about this, but what do you do?

How do you think the police get funded?

Through tickets?

Through DUIs?

Through parking, tickets.

What do you think happens to all the parking lots?

All that becomes usable.

All the

parking literally becomes usable real estate because the problem that I have with autonomous cars is why do you need a garage?

That's the scary part.

There you go.

There we go.

Is there any books that you've read that are like crazy badass, like taught you a lot?

Crazy badass.

I don't know that there's any crazy badass.

I'm reading

Simon Silic.

Cinec?

Cinec.

Yeah.

Simon Sinek.

Start with Y?

No, it's the infamous game or the.

Oh, yeah, yeah, yeah, yeah, yeah.

The infinite game.

Infinite game.

There you go.

So it's kind of interesting.

Yeah, so his old deal is like,

it is infinite.

It's never ending.

So you got to look at things.

People make decisions based on tomorrow, but you should make the long-term decision.

You know,

Jeff Bezos says, I don't care about the stock in the next five years.

We're too focused on what this company is going to become and the client experience.

So they'll spend money and

even not make profits, but that's all a tax plan.

But anyways,

yeah, that's why I mean,

that's something that I'm looking at right now.

It's like, you know, stop looking at the short-term, you know, duration.

Let's look at the long game or the infinite game.

If you want this company to run forever, right?

Like you said, I mean, is private equity some part of the answer?

Because it's like, hey, we need the money and the cash to build this and get the right training, get the right people, get the, you know, the right things in place for this thing to run for forever.

Yeah, well, I know that this company will be around for a long, long time, at least A1.

And I had a PE company come visit me.

They said, what would you do with an extra 100 million?

I said, I'd probably hire a few more traveling trainers and it would all go into marketing because I need to take more market share.

And I would start greenfielding in a lot of new markets.

Like, here's what's crazy: an HVAC Plumbing Electrical, the market cap is 200 billion.

The market cap of Garage Rose is about 14.

So, like, the opportunity in HVAC and plumbing.

The problem is, the sophistication of people is much higher in HVAC Plumbing Electrical because of that market cap.

So, you're competing against right now.

We take all of our data, we feed it into this.

it's a data analytics model called Power BI.

Okay.

And I can load any outlier I want.

I can load humidity.

I can load in, as data comes, credit card scores.

I can load in social media preferences.

I can load in all these things to understand my avatar, which means I can create look-alike audiences and pixel people.

And when you're dealing with this sophistication, like...

I say this sincerely and I feel bad for my competitors because

how are you going to be able to beat me?

Like you won't.

Like I'm making better decisions.

I'm paying for more expensive software.

And I say this.

They asked me if I'm long-term greedy.

I said that means my family gets to win, my team gets to win, and my competitors got to join me if they want to survive.

Then yes, I'm long-term greedy.

How do people get a hold of you, Josh?

Like on a regular basis.

Yeah, well, if somebody wants to reach out, chat with you about commercial or this, you know, been your year.

Is there an email or find you on LinkedIn or what's the best way?

Yeah, yeah.

Email is great.

Jay Young at Tempe Mechanical.net

is probably the best way to get me.

I'm always checking my emails.

I live and die by email in my calendar.

So I would say that would be the best.

Lovely.

And we talked about a lot of stuff here, brother.

I'm going to have you just anything you want that we didn't touch upon.

I didn't even use any of these questions.

I know it's a great podcast when I don't use the questions.

Yeah, no worries.

I appreciate that.

So one thing I wanted to touch on.

So

you talked about, you know, having people that are educated and smart in plumbing and HVAC.

So we've kind of figured out there's a huge gap in our industry with

talent, right?

They just don't, nobody wanted to be a plumber or an HVAC guy for a lot of years, right?

Everybody went to college.

So what we're doing to try and help with that is we're all, a lot of us are creating apprenticeship programs.

So that's one of the things we're starting this year.

And I think that's going to set us apart.

But really it's to educate and teach people because I'm sure, as you know um people just don't want to work on anything at their house they're afraid to it's like oh my god my toilet broke and you're like well lift the lid and look inside the plunger is broken like i don't want to have to charge you 500 to come out there and replace your plunger when you can go to home depot and get it for 25 bucks like you know so so that's kind of our mission and our plan is to you know kind of teach and grow the community or you know even if they don't stay with us you know teach them how to like be better people and and some of this stuff do it yourself like some of the stuff is complicated that's what we want to do right the other stuff figure it out on your own man um

i don't know that's my i don't know i love that man i think uh you know teaching this younger generation well here's what we've learned is uh

ai is going to change unfortunately giuseppe might not have a job or videographer because uh AI is going to change that.

It's going to change the way we develop code.

AI is not going to be taking over Grousners, Plumbing, or HVAC, or Gutters anytime soon.

So everybody's saying, get into a good trade.

And, you know, I did get an MBA,

but

I know a lot more.

If I could go, you know why I got my MBA?

I knew I wasn't going to use it to go into a profession.

I just knew I was going to have kids one day, and I wanted to tell them dad didn't skip out on school.

That was my only purpose.

And I don't know if I'd do it again.

But

no, Josh, you're going to be very, very successful.

You got to keep in touch with me.

And I appreciate you jumping on the podcast, bro.

Yeah, I appreciate you.

Thank you.

Thank you.

Pleasure.

That's a wrap.

Hey there.

Thanks for tuning into the podcast today.

Before I let you go, I want to let everybody know that Elevate is out and ready to buy.

I can share with you how I attracted a winning team of over 700 employees in over 20 states.

The insights in this book are powerful and can be applied to any business or organization.

It's a real game changer for anyone looking to build and develop a high-performing team like over here at A1 Garage Door Service.

So if you want to learn the secrets to help me transfer my team from stealing the the toilet paper to a group of 700-plus employees rowing in the same direction, head over to elevateandwin.com forward slash podcast and grab a copy of the book.

Thanks again for listening, and we'll catch up with you next time on the podcast.