Creating 99 Millionaires with America’s Plumbing Hero

Speaker 1 I mean, being around the right people is key. I mean, I've learned everything I've learned, you know, just like doing what I did today.
Come to your business, hang out with you, ask questions, learn.

Speaker 1 And I did that when I got into the, you know, franchising. You know, the way I became the largest franchisee for them is by visiting all the franchisees that were doing well.

Speaker 1 I took the top 20, I called them all out, and I said, hey, can I come see you? And I flew out there.

Speaker 1 I went out, hung out with them you know and and learned their business learned what they do you know came back applied it went back again yeah and one of the guys is like man how many times do you want i'm like i'm a slow learner i need to get out here yeah several more times for me to figure this out and and he said one thing to me he goes you know what he goes in five years you're going to be larger than me i said i said why do you say that he goes i've never seen anybody wanting to come out and learn as much as you said because i i want to apply everything i learned and i don't think i got everything yet so every time i'd go out there i'd get something new 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

Speaker 3 Before we get started, I wanted to share two important things with you. First, I want you to implement what you learned today.

Speaker 3 To do that, you'll have to take a lot of notes, but I also want you to fully concentrate on the interview. So I asked the team to take notes for you.
Just text notes, N-O-T-E-S to 888-526-1299.

Speaker 3 That's 888-526-1299. And you'll receive a link to download the notes from today's episode.
Also, if you haven't got your copy of my newest book, Elevate, please go check it out.

Speaker 3 I'll share with you how I attracted and developed a winning team that helped me build a $200 million company in 22 states. Just go to elevateandwin.com forward slash podcast to get your copy.

Speaker 3 Now let's go back into the interview. All right, guys, welcome back to the Home Service Expert.
Today I got a really awesome guest. He's been on the show.
It's been about four years, but the Mr.

Speaker 3 Jon Acoen, he's an expert in negotiation, business planning, coaching, team building, mergers and acquisitions, and customer service. He's based out of LA and his company, Rotor Hero Plumbing and Air.

Speaker 3 John is the founder of Roto Hero, a plumbing repair and installation service company, an experienced chief executive officer with a demonstrated history of working in the consumer service industry.

Speaker 3 He relies on old-fashioned marketing techniques to promote his business, which now has several convenient locations across California and Arizona. John is the author of...

Speaker 3 Three books. I think more than three.
Yeah, five altogether. Five books.
Creating 99 Millionaires, The Secret to Real Wealth and Values First, Principle-Driven Leadership. What are the other two?

Speaker 1 So my latest book is called Temporarily Broken.

Speaker 1 It's just a autobiography of my life, of my parents, and how we came to the country.

Speaker 1 And the other one before that is how I built my plumbing company from zero to 50 million in nine years and how I plan to triple it in the next three.

Speaker 3 So last time he was on, he was at about 50 million. And this year, you're...

Speaker 1 We're getting about $100.

Speaker 3 $100 million. So you doubled in the last few years.

Speaker 1 Yeah.

Speaker 3 And

Speaker 3 tell us a little bit about, I mean, it's been a while. Tell the audience who you are, how you got into the business.
I know you're an investor at Service Titan as well.

Speaker 3 And it seems like you're doing great. You're investing in real estate.
Your team is making great money. And you didn't go the PE route yet.

Speaker 1 No, no, I didn't. I felt like kind of too early.
And,

Speaker 1 you know, we just have such a long runway ahead of us. You know, we started this brand in 2011

Speaker 1 after I sold my plumbing companies I owned, which were franchise companies. And sole reason for starting it was to have, you know, the ability to build a, you know, good large-scale platform company.

Speaker 1 And I think we've independently become the largest residential plumbing company in the state of California that's not owned by private equity.

Speaker 1 And I just feel like, you know, we have the ability to maybe double our size before we go that route.

Speaker 3 Yeah, that's what we were talking about. I mean, you're right around the 20 million, 18, 20 million EBITDA.
I mean, when do you think is the right time?

Speaker 3 Do you have a number or is it a timeline or is it just wait to see what the economy does?

Speaker 3 Where's your mind at as far as when you want to get a deal done?

Speaker 1 I'm not quite sure. We're not in a rush to do it.
We're still building the team and building the company.

Speaker 1 I feel like, you know, maybe within the next few years, it might be, you know, time to look at it again.

Speaker 1 But for now, we're just having too much fun. Yeah.

Speaker 3 Yeah. So what is it that gets you up in the morning? What makes you go in on Mondays? I know you work with your wife.
You've got two kids?

Speaker 1 I've got two kids, two boys. Two boys.

Speaker 3 And tell me a little bit about

Speaker 3 what gets you excited and passionate.

Speaker 1 I mean, I'm really passionate about the home service space. That's sort of my, I don't,

Speaker 1 I have two love affairs in my life. One of them is with my wife and my family.
I really enjoy spending time with them, doing stuff, taking trips with them, reading with my boys, fitness with my wife.

Speaker 1 You know, she works in the business as well. So we enjoy each other's company.

Speaker 1 We like, you know, taking weekends with the boys, going to Newport, sometimes, you know, just staying and doing family activities. And my next love affair is with my business.

Speaker 1 I just really enjoy doing what I do. I don't believe in work-life balance.
I believe in work-life integration. Yes.
So I kind of like, you know, like always work, not because I'm trying to do things.

Speaker 1 I'm a workaholic. You know, you said you're a great delegator.
I love to delegate as well. I don't want everything to be done by myself, but I really enjoy the business.

Speaker 1 You know, besides my family, I just enjoy working. Yeah.
Well,

Speaker 3 I mean, that's what it's all about is enjoying Mondays. And I think you're doing a great job.
So you're building a house in Miami.

Speaker 1 Yeah.

Speaker 3 So right right on the ocean?

Speaker 1 It's right on the water. It's on the waterway.

Speaker 3 So you got California. You spend time now in Miami, or you're going to be in the next year.

Speaker 1 We've been going to Miami for many years. Ever since my wife and I met, you know, she had a family friend that lived out there.

Speaker 1 And we'd go to Miami for Lauderdale, just that whole area, you know, anywhere from two to three times a year. And we just fell in love with the lifestyle over there.

Speaker 1 And just Miami has become such a like good, you know, food town, you know,

Speaker 1 nice waterways. You know, it's a, it's a really good area, not in the summer, but in the winter to be at.
So we just enjoy going out there.

Speaker 1 We've been going out there for so much time that we finally decided we're going to buy something out here. So our house should be done in February.
So we're looking forward to it.

Speaker 3 So you spend a lot of time in California this year. Any other spots you go to a lot?

Speaker 1 Just, yeah, we go to Orange County a lot. So we have a place in Newport as well.
So we enjoy going out there on the the weekends sometimes during the week to work from the house and

Speaker 1 um yeah

Speaker 1 so you have three places three places okay and tell me a little bit about coming to the states and your upbringing and and how you guys came here what you had yeah so when we came it was in 75 i was three years old My grandfather got into the States before we did.

Speaker 1 He was here in 72 and he sent the visa. My dad decided, hey, you know, I'm going to take my family to to America because that's where my kids have the best opportunity.

Speaker 1 And we got to Hollywood where my grandfather lived. We rented a one-bedroom apartment, which me and my brother grew up in until we went to, until I was ready to go to high school.

Speaker 1 That's when we bought a house in North Hollywood. Finally got my own room.
I was sharing a couch with my brother, you know, until I was a teenage kid. And then a year after that, my dad passed away.

Speaker 1 He was a truck driver. He had a heart attack.
He died. Biggest life-changing event in my life.

Speaker 1 I dropped out of high school, went to work with a family friend who was a plumber and learned plumbing from him. Started my first plumbing company when I was 19 years old.

Speaker 1 And I was doing new construction. You know, anything I could get my hands on.
Anything that had to do with pipes, you know, I was, I'd get my hands on it. I'd fix it.

Speaker 1 And then eventually I bought a franchise business and

Speaker 1 became the largest franchisee for this franchise company, had multiple locations. When I met my wife, I was just starting in plumbing.

Speaker 1 I just started my plumbing company, actually. I was 19.
And then when we got married, I bought this franchise company and I was 25 back then.

Speaker 1 And my wife quit, came to work with me, started answering the phones, and we've been working together ever since. And

Speaker 1 so sold the franchise company, started Rooter Hero.

Speaker 1 That was in 2011, grew to becoming the largest in the state, opened up multiple locations the first several years, and then started to concentrate on growing the locations.

Speaker 1 Now we have individual locations that do over 20 million in revenue. Back then, they were doing like $3 to $5 million in revenue.

Speaker 1 So now the concentration is, you know, taking our existing locations, getting them as large as we can, while we open up new locations geographically.

Speaker 3 Greenfield.

Speaker 1 Greenfield. Okay.
So we're a hub and spoke type of company. We have a corporate center, sort of like you do, Tommy, over here, where we have a call center, we have a dispatch, we have accounting,

Speaker 1 we have a marketing department. So a lot of everything comes into there.
And then from there, we distribute it out to our service centers, which are all geographically located all over California.

Speaker 1 We have one over here in Phoenix as well.

Speaker 3 And how's that going?

Speaker 1 It's going pretty good. I mean, it's not growing as fast as we want it to, but we're making improvements.

Speaker 3 I mean, it was, it got hot this summer.

Speaker 1 Yeah. So, well, we're not doing HVAC.
We're not doing any HVAC. Yeah, it's strictly plumbing, but we, we just got our HVAC license in Arizona, so we'll start.
You're going to add that next summer.

Speaker 1 Yeah, we're adding it. Okay.

Speaker 3 And right now, there's one of two things that always happen in business. I need more leads or I need more good people.

Speaker 3 And I feel like the smaller companies are always like, how do you get your first really great hire? How do you develop people?

Speaker 3 Where do you find them? And these are the questions I get every day. It's like, I'm still in the truck.
What's my next move? What was it like to get out of the truck? How did you do it?

Speaker 3 And what would you advise somebody that's trying to get out of the truck?

Speaker 1 When I got out of the truck, that was a long time ago. So the hardest was getting out of the truck, but I trained my cousin.
who became my number two truck.

Speaker 1 And then our number three truck, he's actually running one of our larger centers right now in Northern California.

Speaker 1 He actually came in from a larger company back then, Rescue Rooter, and I learned a lot of stuff from him. I mean, after the third or fourth truck, I haven't been in a truck ever since.

Speaker 1 I'd go in it once in a while and I'd get out of it.

Speaker 1 But after that, it was sort of like, you know, focusing on more, how do I become a resource for my management team?

Speaker 1 How do I get them the tools they need so they can actually, you know, continue to thrive? Yep. And how do I create incentive programs to make them wealthy?

Speaker 1 Those are the things I think about now. How do I, you know, create the ability to create multiple millionaires in our business?

Speaker 1 You know, so if we do do a private equity deal, you know, I can help create a lot of wealth for the people that help me get there.

Speaker 3 Yeah, incentive programs, pay-per-performance. What do you look at? You know, me and Keegan talk a lot about this and I talk to a lot of different companies.

Speaker 3 And personally, I bonus 100% of, so let's just say you make 100 grand. I'll give you 100% bonus.

Speaker 3 It's paid out quarterly, and you're not going to hit every metrics on your bonus, but you're capable of hitting an extra 100 grand.

Speaker 3 And I look at revenue growth as 50% of it, and gross profit is the other. Those are the two things I feel like they can affect the most.

Speaker 3 Obviously, EBITDA is an arbitrary number, depending on how you want to look at adbacks and what I'm spending for growth and different things.

Speaker 1 So I can't control that.

Speaker 3 When you're thinking about incentive programs, those are C-suite levels.

Speaker 1 Yeah.

Speaker 3 What do you really, what do you try to do? What have you figured out over time that works well

Speaker 1 so uh having it incremental where you know if you take a step sideways if it doesn't grow that you get a small bonus but not full bonus that you're getting uh we were on ebita mainly primarily on ebita we switched it to gross profit now uh so now it's based on growth uh percentage of growth over last year and and gross profit so that's exactly what we're doing yeah those are the two areas that we're we're completely focused on now

Speaker 1 and you guys have a training center yeah and you guys focus on would you rather get a guy with a lot of experience from you know service champions or any of the other companies or would you rather take a guy out of a restaurant or hotel or just a guy that's green most of our better performers come from guys that are green okay you know that didn't know anything about the business and we teach them and you know they stay with us and they learn the concept and they do a good job i mean we're still hiring from the industry as well.

Speaker 1 I mean,

Speaker 1 but a lot of them that come from the industry, as you know out of experience, I mean, they come with a belief system, you know, they come with their own,

Speaker 1 you know, just their own just belief system of how things should be done.

Speaker 1 And it doesn't always work out because we just have a different philosophy at our company and we like to build them from ground up.

Speaker 3 So what's the biggest differences between you, and I don't need to use another company, just there's so many good companies in California, but what do you think you guys do that's like different?

Speaker 1 We share with everybody everything we know. TNL or TNL.

Speaker 1 And we're very transparent. Besides transparent, we're very easy to get to.
Like anybody in the company could pick up the phone and call me.

Speaker 1 Like they, they usually don't, but like I took a call from one of our, you know, like salespeople from Northern California over the weekend. We do a lot of things together.

Speaker 1 We go on vacations together. We do a lot of celebrations together.
Like we'll get, like, we have a group of people that'll end up going to Cabo with us.

Speaker 1 We've been doing that for several years now, like seven or eight years now.

Speaker 1 And it's like a big family. I mean, we just, you know, and the people that are, that have been there, that have grown with the company, you know, are kind of don't see it any other way.

Speaker 1 I mean, we've had people leave and come back because they're like, we can't find anything like this. Yeah.

Speaker 3 You know, someone that cares, especially from the founder, the owner, the top down, it's like when everybody cares and you got access to people. Yeah.
And you show up to work.

Speaker 3 I mean, I'm at companies that are doing $5 million

Speaker 3 and the employees come to me and they go, we never saw the owners. We were only doing $5 million.
Like the guy really, rarely came in, lifestyle business.

Speaker 3 And he's like, why do you still, you know, these guys ask me all the time, why do you still come in? And I'm like, this is what I love to do.

Speaker 3 I'm here because I want to be here, not because I have to be here. Yeah.
You know, I enjoy watching you guys grow. I enjoy hearing you guys break through this mental barrier.

Speaker 3 I enjoy your belief system as it grows and you believe. And I always say, listen, you got to believe.
You got to believe that we're worth it. You got to believe.

Speaker 3 So many people, they sell out of their own pocket.

Speaker 1 Yeah. And they're like, wow, that's expensive.

Speaker 3 Yeah. And I'm like, well, you don't own a house.
Your house is your best asset. Right.

Speaker 3 And like, just because you looked up the parts on Amazon, it costs a lot more to be able to service it fully insured. California is a really tough state to operate.
I don't know how.

Speaker 3 Have you been in much litigation?

Speaker 1 Well, we have a full-time attorney that works in the company. So, um,

Speaker 3 yeah, I mean, you have to in California.

Speaker 1 You have to, yeah. I mean, when we got to, I think, 200 or 300 employees, it was like one of the best hires I did because we were spending so much money on, you know, just outside counsel.

Speaker 1 And when we did that transition, it's like now you have somebody that can be proactive, right? I mean, because the laws in California change so often.

Speaker 1 like just being on top of it, you know, about changing it and like advising everybody and a lot of hr stuff hr stuff yeah so you know it just it just helps us be you know on the cutting edge you know like making all the changes ahead of time not waiting until something happens right it's tough man there's class action lawsuits and the thing i hate about california there's more litigators in california than the rest of the country combined oh i bet yeah and they just they call up employees and they say we'll do a free analysis for you.

Speaker 3 And if there's any money we could get you, then they do a class action lawsuit. And then you got to pay for it if they win a dollar.

Speaker 3 yeah so you pay the attorney fees for the employees right it's just i can understand when you don't treat employees well and there's a lot of companies that do that but when you're doing everything right you're trying to abide by everything it's like these guys are predators they're out there just trying to find a way because they'll bill up their hours to where they'll make a couple hundred grand and the employees make like a few grand right right i mean at the end of the day they're the ones that win you know and then you know california also passed a law where you know they they can sue on behalf of the labor board.

Speaker 1 So the labor board doesn't have to have a complaint. They can actually, you know, create a complaint and sue on behalf of all the employees for the labor board.

Speaker 1 And then they don't really give the labor board anything, right? So, you know, the attorney fees usually take in all of the income.

Speaker 1 So I know more attorneys personally, you know, just like family, friends, and people that have. graduated that went through law school than I know any other trade, like any other profession.
Yeah.

Speaker 1 You know, so like personally in the the family, like there's like probably 30 attorneys, right?

Speaker 3 Oh my God.

Speaker 1 Between friends and family and everybody else. And then you think about how many mechanics do we know? One or two? Oh, yeah.

Speaker 1 Like it's crazy because they're all going to law school for some reason or another.

Speaker 3 Yeah, that's interesting. I don't think I'll do business in California for a few more years.
You know, it's a necessary evil. It's a lot of population.
I really enjoy California. I really do.

Speaker 3 I think it's a beautiful state. I think there's a lot to offer there.
But my buddy Tom Howard, you know, Tom. Yeah.
You know, he got the hell out of there because the taxes were just ridiculous.

Speaker 3 I mean, it's like extra 10%.

Speaker 3 Yeah. And, you know, he did a big deal with Brent Buckley, Petratech,

Speaker 3 and they made a big deal happen. And he's like, I don't, I'm going to move to Vegas.
Yeah. So he got up and out.
You know, that's pretty cool.

Speaker 1 Yeah, I mean, the state taxes are the highest in the whole country. I mean, we thought New York was high.
California past New York. Oh, yeah.

Speaker 3 Yeah, you lived in New York?

Speaker 1 No, I never lived in New York, but, you know, we might end up getting a residency in Florida eventually. Oh, yeah.

Speaker 3 Florida's the way to go. I mean, I learned that from Keegan, and there's better property laws.
How long have you known Keegan Hodges for?

Speaker 1 So Keegan was in our performance group before he sold his company. And that was, God, I've known Keegan probably seven years.
Okay. Six, seven years.

Speaker 1 So he was one of the last companies that got into our group. So we had service champions, Kevin and Leland were in our group.
We had Jonathan with the company in North Carolina. We had

Speaker 1 so we had the, we called it the families group and we would share financials and combined, I mean, we were pretty large and we were having meetings all the time, going to each other's offices until everybody started selling.

Speaker 3 Yep. You know, they kind of got dismantled.

Speaker 1 Yeah, it got dismantled. I think it's just me and Gus and

Speaker 1 Dallas. Yeah.

Speaker 3 I just was out to dinner with him. He's a really smart guy.
Yeah. Starting the electric business.

Speaker 1 Right.

Speaker 3 And I think they're pretty far north of 100 million. He works with Josh Kelly a little bit with the Clover.

Speaker 1 Okay.

Speaker 3 Yeah, the great guy also held out. You know, there's not a lot of companies that held out.
And, you know, what pushed me is, is I had more opportunity and not enough money in the bank.

Speaker 3 I just, I wanted to acquire more businesses and grow faster. And I just, I didn't have the money to buy the deals I wanted to.
And I had a delayed draw term loan for $30 million,

Speaker 3 but that won't take you as far and as fast as I wanted to go. So for me, the timing was right.
And I couldn't be be happier with Cortitec.

Speaker 3 They are unbelievably generous with their time and they're there to help us, not control us. They don't make us cut our trips.
You know, I brought 25 people to Service Titan's Pantheon.

Speaker 1 Yeah, yeah.

Speaker 3 25 people. And they're like, yeah, go ahead.
Do whatever you want to do. Continue to run the company.

Speaker 3 We invested in you.

Speaker 3 So you get to run the show. I didn't know that it was going to be this great because you hear these nightmare stories.
I mean, Keegan's got a nightmare story.

Speaker 1 Yeah.

Speaker 3 They go on and on and on about P got involved and all they care about is cut, cut, cut, cut, get rid of all the nice things and try to cut their way to the top. And then they, you know, they come in.

Speaker 3 They do want reporting dialed in. They do want to know what where you're ahead or what your vision is, what your timelines are, what your budget is.

Speaker 3 They're going to hold you accountable to getting numbers produced to make sure because they got to answer to their LPs. Right.
Yeah. And they got to sit down at a big board meeting each month.

Speaker 3 If you didn't hit your budget, they want to know what's going on. The guys that I work with always say, you guys made up the budget.

Speaker 3 You guys said you could hit these numbers, you know, so you got to stay accountable. That's why we send them a budget that's obtainable, that's fairly easy to hit.

Speaker 3 And if we don't hit it, you know, these guys aren't going to come down and like fire me.

Speaker 1 They could.

Speaker 3 I'm an employee now. So I don't want to get fired.
But at the end of the day, you know, because I got a lot of, I invested a lot back into the company and I want to kind of run where this is going.

Speaker 3 But, you know, they, they know if they lose a founder, that shit's going to hit the fan. They really want the founders to stay on for most of the time.

Speaker 1 Right.

Speaker 1 Especially if you're a platform. Well, see, I don't I don't see a wrong or right.
I mean, you know, like, you know, you went with with private equity, with Cortec.

Speaker 1 I think you made a great move, you know, and

Speaker 1 it all depends on, you know, like where you're at at the time, right? And what you want to create and do. And you've created a lot of millionaires.
Yeah. And you gave back.

Speaker 1 And, you know, I want to do that too. I just don't think it's the time to do it right now.
I think

Speaker 1 I think we have time to grow. I think we can continue to grow the company and, and, you know, you never know what will happen.

Speaker 3 I mean, you've made great money along the way. It's not like you're waiting for this.

Speaker 3 What you said earlier is I said, what's going to happen when you got a pretty big investment in service tight and you were an early, early adopter into that.

Speaker 3 And then you've got your massive plumbing HVAC company. Right.
And you said, it's not going to change my life.

Speaker 1 It's not going to change it. No.

Speaker 3 I mean,

Speaker 3 probably change some people around you. Like,

Speaker 3 I don't know exactly what you'll do with the money. Do you have any idea? Because you're talking about hundreds of millions of dollars.
Do you have any idea where,

Speaker 3 what's your life? Have you started planning out where that money would go?

Speaker 1 I don't see myself, you know, like ever like retiring.

Speaker 3 Riding out in front of the sunset.

Speaker 1 Yeah. So, I mean, I really, you know, my goal is to, I'm into health and fitness and I test myself.
I go to HLI every year. I've been doing it for like five years.
HLI stands for Human Longevity Inc.

Speaker 1 and they do like head-to-toe testing and everything else. So I know all of my numbers.
I know like where I'm at. I know exactly where I need to be, like supplements I take.
I do all that.

Speaker 1 My goal is to live as long as I can because my dad died when I was 17 and I want to see my kids grow. I want to see my grandkids.
However, I just can't see myself retiring.

Speaker 1 I mean, I've seen people retire and, you know, just kind of lose the purpose.

Speaker 3 Yeah, they fall apart. They start drinking every day.

Speaker 1 yeah and my my coach has told me there's three reasons why somebody dies early number one is you know running out of money number two you know losing relationships you know when they all die off and go number three is losing purpose and my goal is to keep all three of them intact yeah you know for the rest of my life like you know so I don't want to lose purpose and my purpose is to continue to build and and provide and create a vehicle that can help the people that have helped me get there.

Speaker 1 And I just don't think I could have provided to enough people by doing it right now. And I know I can if I wait and continue to grow the company.
And that's our plan is to continue to grow it.

Speaker 1 And when we do do it, do it with the right partner. That's going to help us get to the next level so we could do it again and do it again.

Speaker 3 Look at Paul Kelly. He's been through five transactions.

Speaker 1 I mean,

Speaker 3 he's created enough wealth in the first transaction to retire, but then he just, it kept going, going, going. And now that company's doing, I think it said 270 million this year.

Speaker 3 Yeah, that's good out of one they're in two sun now but it's it's pretty cool you know what do you think what's going on right now with uh

Speaker 1 hvac in particular there's the demands falling apart and a lot of people aren't hitting budget and you see this across the board i don't care if you're in the pool business pest control business you're seeing things kind of get harder especially the phone calls demand is not where it was what do you do to prepare for times like this i mean whenever it gets tough we just you know double down on on marketing i mean you know my my thing is when when people start cutting you double you know like uh take it put it right back in and we have the ability to do that right now because we don't have to like you know we we don't have to report to a private equity so if we wanted to put all of our profit back into growth we could put it all back into growth and make that happen so

Speaker 1 I think, you know, and I've done this before.

Speaker 1 So whenever the economy got a little, you know, soft, we just focus, put our heads down and work really hard on, you know, marketing and acquiring more customers.

Speaker 3 Yeah, you grow market share when the economy's

Speaker 1 down.

Speaker 3 So how do you engage employees? Like, what's the secret that you do? Not a secret, but what do you do to like make sure they're all feel their voice is heard and they feel like they're engaged?

Speaker 1 Well, first of all, being accessible, you know, is

Speaker 1 important to your people. One of the things we we do is we have this all-team meeting we do where we basically bring everybody together once a month.
We go through our highest performers.

Speaker 1 We recognize them.

Speaker 1 We take a look at our individual offices and where they're at and if they've hit budget and where it's at. We do open book management.
We share our financials with our team.

Speaker 3 That's the best way to do it.

Speaker 1 Yeah. And we've been doing that since inception.
I mean, ever since we opened up, we've been doing that. I did that in my previous company as well.
I believe that if you don't share, people assume.

Speaker 1 And a lot of times their assumption is a lot higher than what the actual is.

Speaker 3 They think we're printing money. Yeah.

Speaker 1 Yeah. I remember the first time

Speaker 1 I went into a meeting because I was like not happy about

Speaker 1 the percentage of EBITDA that we had. So, you know, we were in a room and I dropped down a dollar bill.
And I said, for every one of these that come in, and then there was a bunch of change.

Speaker 1 I put a quarter, nickel, 50 cents, you know, half a dollar. I put a few pennies.
I said, for every one of these that are coming in, how much of this do you think that I'm taking? Right.

Speaker 1 And it was all over the place. There was people like 50 cents, you know, 80 cents on the dollar, you know, like nobody ever said back then it was a nickel.
Right.

Speaker 1 And nobody, nobody said a nickel, right?

Speaker 1 And, but that's.

Speaker 3 So for every dollar we've taken, how much do you think I'm keeping?

Speaker 1 Yeah, that's what I asked them, right? Yeah. And everybody's guess was higher than the actual.
Oh, yeah.

Speaker 1 And this was like with my previous company, and I was like really frustrated because I was looking at the financials, but nobody else was right.

Speaker 1 And as soon as I pointed it out, people were like, What? That's crazy. We never thought that, right?

Speaker 1 And then, on top of that, we got to pay taxes and get you new vehicles and uniforms and all of that other stuff, right? So, what's left at the end? Really, nothing, right?

Speaker 3 Yeah, it's like a break-even. I don't, I pay it, it's just like a job for me, unless we get to, yeah, I think healthy is 15%, right?

Speaker 1 15, 20.

Speaker 3 So, we want to be a 30, but I think 15 is like, you're doing good. It's a good indicator.

Speaker 1 Right. So we, so what we did is after that, I started doing open book management.
Every month, I'd share it with my team.

Speaker 1 And those numbers got better and better and better and better month after month because they knew where we were. And then they would ask, what can I do to help? What can we do to help?

Speaker 1 And then we started giving money back to them. Right.
So when we hit this number, everybody gets this, right? So now everybody's wanting profit sharing. Right.

Speaker 1 And the more you earn, the bigger profit we get, the bigger percentage of profit you get. Right.
So it just led into more and more of people just wanting to know the numbers.

Speaker 1 And, you know, so that's kind of how it all started. And then we started doing that and it's just worked great.

Speaker 3 Fantastic. That's that's the best way to do it, profit sharing and just having benchmarks.
You've been growing really fast. You doubled since last time we were on the podcast together.

Speaker 3 What do you attribute that to? I mean, culture, obviously, but was it the greenfield growth? Was it a couple of good hires? Where was the,

Speaker 3 you were already on service titan, so it wasn't a CRM change. You already had the brand.

Speaker 1 So was

Speaker 3 just steady growth?

Speaker 1 I mean, it was just head down, you know, work towards bettering the business every day, incrementally, you know, do the best you can to marginally fix the business.

Speaker 1 I mean, a business, you know, is like, you know, there's a saying I believe in. It's like, all the water in the ocean, you know, can't sink a ship, only the water that gets inside.

Speaker 1 So, you know, with our team, I tell them, listen, it doesn't matter what others are doing. Okay.
It only matters what we're doing. So let's just concentrate on making the business better.

Speaker 1 So we just kept putting money into marketing. We just kept adding more trucks.
I would just buy the trucks ahead of time, anticipating that, you know, we're going to grow the business.

Speaker 1 And just ordered one year, I ordered 100 trucks.

Speaker 1 I said, we're ordering, I signed up paperwork said i want 100 trucks delivered and those trucks started coming so we had no choice we had to you know like make sure they weren't sitting in the parking lot right yeah so i don't advise that for anybody but uh especially going into next year but but it's smart you know you're holding yourself accountable what percentage of revenue do you think you should be spending on marketing At minimum, I think it should be eight to ten percent.

Speaker 1 Yep.

Speaker 3 And then when you're refunding for growth, maybe 20.

Speaker 1 Yeah.

Speaker 1 I mean, the better you do on the gross margin, and that's what we're working on right now.

Speaker 1 Because I told my team, look, you know, is if the economy gets softer and softer, we're going to have to put more money in marketing.

Speaker 1 And the only way we could do that is by operating more efficiently. Right.
Okay. So the efficiencies are what's going to create the growth in the future.

Speaker 1 So the more efficient we get today, the better off we're going to be tomorrow.

Speaker 1 And if it does get tougher, then we're going to have to put more money in, but we're going to have to create that money to put in. Right.
We just can't.

Speaker 3 Vahe was like, he called me up about two months ago and he said, Tommy, my goal for you in the next 18 months is you're going to need technicians and installers only. You won't need CSRs.

Speaker 3 You're not going to need dispatchers. You're not going to need a whole lot of office staff.

Speaker 1 Yeah.

Speaker 1 I hope he's right.

Speaker 3 You know, Vahe is a very forward thinker, very intelligent. I think sometimes he thinks it's so easy to develop and implement these things.

Speaker 3 But he knows. I mean, listen, that company's gone through so much in the last five years since I've been part of them.

Speaker 1 Yeah.

Speaker 3 It's just incredible, six or seven years, actually, but it's just, they're great people. And I'll tell you what, I invested in

Speaker 3 R and Vaughe more than I've, I didn't pick service titan. I picked because of those two guys.

Speaker 1 Yeah.

Speaker 1 Yeah, definitely. It's them.

Speaker 3 I mean, and they're, and they'll, they'll always pick the thing for the traits. They're not money driven.
Although they've got investors that need to get an ROI, and that's understandable.

Speaker 3 No one's going to invest in a company because they're great people.

Speaker 1 They're investing because they want an ROI.

Speaker 3 Right. But so they got to make profit.
And I want them to make profit because the more profit they make, the more innovative they get.

Speaker 1 Yeah. I have a chapter in my latest book about Service Titan and my relationship with them and how I met them.
But it was a very interesting time because they just started their business.

Speaker 1 I was their first customer. Right.
So when I met Vahe and Ara, they were actually writing code. Vahe would come to my office and he would, you know, like, we need a report.
And he'd start right.

Speaker 1 He'd like do the coding for the report. Yeah.

Speaker 1 Like it was interesting times but i was right about to go with another software company we're on this company called dispatch pro yeah now i know service titan has dispatch pro feature now yeah but this company's name was dispatch pro they were written on this old you know database that was kind of aging and i was looking at going with successware and we had a special way of doing payroll and i kept asking these guys at successware hey can you guys like write this you know, like, you know, I'll give you money to, you know, like give me a custom feature.

Speaker 1 Will you do it?

Speaker 1 and they're like no we won't like why don't you hire somebody and have them do it in excel the whole reason for a software company is so i don't have to hire somebody right to write it automate it yeah automate it i'll pay you to automate it it's just code write it they wouldn't do it so a friend of mine introduced me to vahe and ara and they're like hey you know these young armenian guys are just you know they've created a company they're engineers once from stanford once from usc so i met them at one of my friend's company they're no longer in business but I met them over there.

Speaker 1 And I asked them for this wish list, I had a whole list of items I wanted. And he's like, yeah, we could do it.
We could do all of that. Like, can you do this one payroll feature I have?

Speaker 1 He's like, yeah, absolutely. We could do it.
So it was like a, it was like, man, a, you know, breath of fresh air because all I heard is no, no, no, no.

Speaker 1 And this guy's like, yeah, we could do anything.

Speaker 1 So he wrote an auto report and started, you know, like having it emailed to me every day because I used to have somebody in the office doing a report for me every evening so I could could look at it before i go to sleep yep and every like one day it would come out the next day would come out late and then it would come out wrong and i was constantly frustrated and he wrote this auto report it's called a huddle report until today i get it right i go into the huddle report at least twice a week and i go into the old one yeah so i get the old one too that's we created the huddle report yeah and then he had it emailed to me so every day at nine o'clock like clockwork the huddle report comes in i look at it in bed and then i go to sleep Like, I'm looking at those KPIs, right?

Speaker 3 I love looking at the huddle report because it tells me where we're trending at. Yeah.

Speaker 3 You know, and what I'll do usually is like this morning I went in and I went to yesterday because I don't want it to count the day because it'll, it'll, the way that huddle report works.

Speaker 3 So you got to go into reports, go into legacy reports to go to huddle.

Speaker 1 Right.

Speaker 3 And I love that report just because it says where we're trending and it's pretty dead on.

Speaker 1 Yeah.

Speaker 3 The bigger you get, the more. I know what my payroll is going to be within a couple, couple percent.

Speaker 1 Like it's crazy with this many employees and this much revenue how you could predict revenue well you could eventually start feeling your business you know like you feel when there's something wrong that's oh yeah kind of how i am now i could like kind of tell when i'm looking at it i could like feel what's going on if we're light on calls i'm like oh i could i could feel that there's going to be a light week you know uh but you know eventually that's that's how it is so that's how i met them and it turned out to be a great relationship and uh and i'm you know it couldn't have happened to any better people oh yeah Guys are just salt of the earth.

Speaker 1 They are.

Speaker 3 They're amazing. I was going to ask you, what do you believe about service agreements? Because this is pretty controversial right now.
People are like, are service agreements going away?

Speaker 3 There's a lot of work when you just replaced a unit a year ago to have to go maintain it.

Speaker 1 But I mean, I guess that's the nature of the beast.

Speaker 3 You do a great job. Like, Leland is big.
Like, he was like the one that was like, always service agreements are what's going to propel the company in the bad times. Right.

Speaker 1 Yeah. So we just got into HVAC, right? So we're not really, you know, we're more into plumbing and in plumbing.

Speaker 1 We sell them. We sell them.
It wasn't as urgent of a sell because, you know, with HVAC, it's like seasonal, right? You get to a point where you have to create the business and all that.

Speaker 1 Ours was like, you know, very small seasonal effect with plumbing and drain cleaning. So there was no urgency to sell service agreements.
You know, there was always new customers coming in.

Speaker 1 There was always other services coming in. And then occasionally we'd call them and offer them water heater flushes.
And with or without service agreements, people would take it, right? Yeah.

Speaker 1 But now we understand how important it is. And we're focused on selling service agreements, offering it over the phone from the call center on, double offering it when the tech gets out there.
Right.

Speaker 1 You know, to make sure that you have multiple nets to capture the customer.

Speaker 3 And how many service agreements do you think you got?

Speaker 1 I mean, probably in the thousands, but I don't, you know, I don't know the exact exact number.

Speaker 1 But it's not, it's not as much as it should be. Let me tell you that.

Speaker 3 Well, that happens when we started really focusing on it and we moved that onto a scorecard and we let the technician know this is how you're going to get paid. It changed the whole game.
Yeah.

Speaker 3 It made it so much better.

Speaker 3 And Keegan was always in my ear, like, don't pay, don't ever pay. Your commissionable techs to go run service agreements because all they try to do is sell, sell, sell.
Yeah.

Speaker 1 And you don't want to have to, you don't want to glorify its sales pitch every time you run a service agreement if you're a client and a smart nakigan's a smart dude yeah what about what about financing how important is financing to your company uh financing is really important i mean as a percentage we do less financing on on revenue than than most companies but it is very important for us to offer it yeah and um

Speaker 1 you know i i without financing i mean there are certain customers we couldn't secure without financing because not everybody is going to be able to pay for the work you know some people have to leverage it if they need it today you know and the average average service agreement or the average finance job is about 40 more it's a higher conversion rate it's it's significantly more what do you feel like

Speaker 3 what do you feel like your ticket average is right now

Speaker 1 so is that on replacements or service like all in we're over 1500. So when we, when we, when we're talking about

Speaker 1 higher than mine, all in. Yeah, all in.
And we're even including estimates in there, too.

Speaker 3 So counting the zeros.

Speaker 1 Yeah, count the zeros, count everything in. On replacements, probably north of $10,000.
Okay.

Speaker 3 And that's hot water heaters?

Speaker 1 Hot water heaters, sewer repairs, replacements,

Speaker 1 HVAC systems. I mean, I haven't separated it to look at it separately, but I would imagine HVAC is a lot higher because the average cost of HVAC system is a lot more.

Speaker 3 What about do you guys do garbage disposals and stuff? We do, yeah. Do you do air quality.

Speaker 1 We do air quality. Water quality.
Yeah. All that.

Speaker 3 If you could go back and talk to yourself, young John,

Speaker 3 and you're, you get talking to him, but he's just 20 years old. What would you tell him to stay away from and what to do in the business earlier on?

Speaker 1 If I was to rewind, I would stay away from new construction. 100%.
I ended up doing that when I was younger. So I would have gotten into service a lot quicker.
Okay.

Speaker 1 And I was mainly into like commercial apartment buildings and stuff when I first started my career. I would, I would get into residential a lot quicker.
Okay. Because residential is the place to be.

Speaker 1 I got into residential, you know, pretty late. My first company didn't do any residential.

Speaker 1 And then when I got into the franchising, that's when I started running residential. In the beginning, I'm like, man, these are like smaller pipes.
You know,

Speaker 1 it's like easier work.

Speaker 1 It's not going to be as big of an average ticket, but it turned out to be probably the best thing because cash flow-wise, it's great because you're done with the job, you get paid.

Speaker 1 Yeah, you know, we just had so many accounts receivables back then with my first business.

Speaker 1 And then I had some, you know, people when things got tougher, I mean, they, you know, declared BK and didn't pay us. Like, I had Kmart as one of my big customers when I had my commercial company.

Speaker 3 How much did they owe you?

Speaker 1 Oh, they owed like over a hundred grand. I mean, back then, I was smaller.
It was a big deal. It was a big number.

Speaker 1 I mean, it literally, you know, it went from them, you know, doing, I don't know, chapter 7, 11, whatever it was.

Speaker 1 Yeah, I think it was a reorg they did. And then, you know, like, besides them owing money, now they sent me a letter that I have to pay them back all the work they've done over the last year.

Speaker 1 I'm like, what do you mean? You know, like, how do you like write them a check back for the work they've done because they're reorganizing? So it was like a pretty crazy situation, right?

Speaker 1 I was like, I don't know. Everyone wants to pay them back.

Speaker 1 Yeah, they can actually retract some of the money they've already paid you if they're going through a reorganization oh my god it's like a bankruptcy rule or something like that i mean i don't know it was some crazy thing way back then but i'd stay out of commercial uh at least that heavy of commercial we don't mind it now as a smaller percentage of business yeah what would you say 20

Speaker 3 20 should be good yeah okay because we're going to break back into commercial I think it's great if you get the right companies. That's right.
They're net 90. It really is tough on AR.
Yeah.

Speaker 3 You got to be good at collecting.

Speaker 1 And it's a whole different facet because it's different insurance it's different truck setups different pay different knowledge base but you know plumbing i'd imagine is just a little bit bigger of the same stuff yeah and and then you have to be more careful too you have to monitor their well-being as well as a company if you're providing service for them if they're publicly traded you got to start looking at their financial statements make sure that they're not going to go out of business because you know who was to know sears would go out of business oh yeah i mean it's crazy you know companies like that that have been around forever are not around anymore.

Speaker 3 Well, one of the things that I would definitely not give them a long leash on AR, like down at 90.

Speaker 3 And I'd say, before we do your next job, we need to pay this one. I don't know.
They kind of call the shots. That's the problem.

Speaker 3 If companies are bigger, they kind of tell you what they're going to do.

Speaker 1 Yeah, I mean, you know, nowadays it's a little different. I mean, if you're doing a bigger job, you could always call for an early payment.
when you're doing the contract or anything else.

Speaker 1 I mean, for service and repair, maybe you let it go out a little bit, but then you're doing a big replacement or something like that you know you could start getting some money up front yeah

Speaker 1 i think they're used to that nowadays tell me about this 99 millionaires concept yeah so yeah i remember when i came up with the idea to write the book so it was august of 2018 uh we shut down our entire company for for like a week almost we had two groups uh that were going to train everybody.

Speaker 1 We said, we're going back to the basics. We're going to bring everybody in two-day training.
The one group will stay home, you know, run the service, and then we'll train them.

Speaker 1 And so we flew everybody down to LA. We got a place in Pasadena, and we're doing a full-on teaching, right? We're going through the whole concept, and we call it the five keys.

Speaker 1 You know, we go back to the basics and we teach. We got a book written on that, too.
I'll send you that book if you want to read it.

Speaker 1 And it's our whole sales concept. So we went back to the basics.

Speaker 1 We're teaching everybody the communication in the house, um you know how to the questions to ask you know the diagnosis how to diagnose the problem you know how to wow the customer yeah you know do all of that stuff so while we're teaching you know one of our um he was our he's our operations manager at one of our centers was teaching the class as well and he asked me a question he's like john how many millionaires have we created so far and it was about a dozen millionaires and a couple billionaires too you know in uh in starting you know like uh helping what we did so i said you know like a handful maybe a dozen or so he's like so what's next and i was thinking and i thought for a moment and i'm like create a hundred of them right yeah like what's a dozen let's let's like 10x that yeah let's 10x it i said we're going to create 99 millionaires so that's where i got the concept of writing the book and then we started thinking about how we're going to do that you know how are we going to teach our people to save, to invest, to do all of the things they need to do to create the wealth that they need to create for their families so it's not just giving them a million bucks or you know

Speaker 3 give them a million dollars they're going to blow it they got to understand they'll be financially stable yeah yeah learn to save money and compound interest and how it works and not use leverage every time you can use leverage for a house everybody typically has a mortgage and that's okay because it's an appreciating asset right so we we started bringing realtors into our meetings to educate our guys on how to clean their credits how to buy a house i mean we we brought them in, they started talking to them.

Speaker 1 We started, you know, they started first by cleaning their credit, getting their FICA scores up. And next, it's like, okay, create the down payment.
So it was a step-by-step process.

Speaker 1 Every one of our GMs brought in a realtor, started educating the guys. They sat down personally with them, cleaned their credit, and then helped them buy a house.

Speaker 1 And anybody could do this because there's realtors

Speaker 1 want work. You know, they want buyers.
They want people that'll do that. And they're willing to sit down and help them from the process from the beginning to the end.

Speaker 1 And multiple guys bought houses, and their equity is in their houses. If you're in California, you know that I mean, if you buy a piece of real estate, it's going to appreciate.
Yeah, it goes up.

Speaker 1 Yeah, it goes up. So, a lot of their wealth is in their homes.
So, we help a lot of guys buy homes.

Speaker 3 You said a couple of billionaires. Is that R.N.
Vaje?

Speaker 1 I'd like to think we were a little instrumental in the beginning to help them get in. Oh, yeah.

Speaker 3 A couple billionaires in there.

Speaker 3 You were. Yeah, it was 100%.
I mean, I've heard that story from we were in Vegas and Arn Vaje were telling me like they had to put on kind of a dog and pony show.

Speaker 1 Yeah.

Speaker 3 Kind of get you to say yes.

Speaker 3 Their story is amazing.

Speaker 1 Yeah, and then we helped them get into the franchising, which was a big deal for them. You know, so there's a chapter in that last book I wrote about Service Titan that's a great story.

Speaker 1 It's a story about them, not me.

Speaker 1 Yeah, so, I mean, that's what we did, you know, and we continue to support that.

Speaker 1 So the concept of creating 99 millionaires is not just to give somebody, you know, a million bucks and say, hey, you're a millionaire. I mean, if we do a transaction, that's going to happen as well.

Speaker 1 But, you know, it's to teach somebody how to build it themselves, how to earn more money, how to save more money, live below their means, and invest their money so it'll grow.

Speaker 3 It's so important. I think these people look up to us as leaders and they want to learn exactly like you said, clean up your credit, how to budget for certain things.

Speaker 3 So how to write your goals down and actually accomplish them and apply your KPIs for work to your wealth. Like, how do you, how do you budget? These, yeah, these things change people's lives.

Speaker 1 Yeah. And if it comes to you all of a sudden, it could be dangerous, right? I mean, I know the guy that won the $2 billion Lotto, you know, and

Speaker 1 I know the guy. He was actually doing drafting.
So he did my mom's ADU, you know, a 31-year-old young guy, you know, that was doing drafting, architectural stuff.

Speaker 1 And he was going to the city, pulling permits and doing that. All of a sudden, he wins $2 billion, cashes out $1 billion.

Speaker 1 Right.

Speaker 1 And, you know, I'm kind of following them because I know the guy. I've got his number in my phone.
I text him a couple of times.

Speaker 1 And, you know, buying $30 million homes and doing all of this and going, man, 10% of the wealth's already gone. All right.

Speaker 3 And there's no. They blow it, but most, most people that win the lottery blow it all.
Yeah. Conserve it.
And they hire a bunch of workers and they get, their nut becomes too big. Yeah.

Speaker 3 And they blow it.

Speaker 1 No, I wish the best for the guy, but I mean, you know, just like not really coming too quick could be dangerous right i mean you could end up blowing it and end up you know like creating a lot of bad addictions you know oh yeah yeah you get into drugs really easily when you make that kind of money yeah what you you get into to just it's hard most people that when that they never learn how to conserve it a lot of people want to be millionaires but they don't think about I want to be a millionaire to have a million in the bank.

Speaker 3 I want to be able to spend the money. It's just the wrong way of thinking.
You know, Julian Scanner with Next Door was in my office a few years ago when he first took over the CEO position.

Speaker 3 And he said, your biggest challenge, Tommy, your rate of growth is going to be developing leaders.

Speaker 3 And he goes, you're going to have to pull them outside from outside of the industry. So there's not enough in here that are great leaders to be able to run the kind of speed you want to grow.

Speaker 3 How do you develop your leaders?

Speaker 1 I mean, we have a development process. We go through, read books together.
And actually, we're reading your book right now. Yeah, you televised it.

Speaker 3 That's awesome.

Speaker 1 So we're going through the book, reading it, and we've been doing that from a while ago.

Speaker 1 Everybody goes off, they read the book, they read a chapter, and then we have a one-hour meeting and we ask questions.

Speaker 1 And we have a facilitator that prepares questions and then gets a conversation going. We do that.
I mean, we go outside of the company for leadership development.

Speaker 1 A lot of it happens within as well. We went through different programs.
We had this one-year program where we went through the hero's journey with

Speaker 1 Darren Hardy and did that. It was a one-year journey.
So there's just so many things that we've done as a team together just to develop everybody's skills, get them better. And then, you know,

Speaker 1 we try to hire people that lead by example as well. I think that's really big for me because, you know, I believe that people are always watching.

Speaker 1 You know, you don't, you know, people observe with their eyes more than their ears. Yeah.
You know, so make sure you're doing the right thing and you're leading by example.

Speaker 1 And, you know, now we are looking outside. Our CFO came from the outside of the industry.

Speaker 1 And, you know, we're looking to bring people in that have grown bigger businesses that can bring that fresh new perspective into the trades as well.

Speaker 3 It's important. I mean, you met a lot of my team here.
What did you think of Leanne?

Speaker 1 Oh, phenomenal. I mean, you've got a world-class team.
Yeah.

Speaker 3 The teamwork makes the dream work. And people are like, man, Tommy, A1, Tommy.
I'm like, if they only knew how many great people run this company.

Speaker 1 Yeah. And, you know, the three people I talked to, including Leanne, came from American Express.
I mean, none of them came from another.

Speaker 1 Yeah. A lot of them have done bigger business, smaller business.
They understand the whole dynamic of how the business works.

Speaker 3 They're absolutely phenomenal at what they do. They all bring their own a lot of positive things.
And, you know, Leanne will not sleep till she's done with something.

Speaker 3 She is like, she's going to work her ass out.

Speaker 1 She's She's definitely a number cruncher. She's like on those spreadsheets.
I saw those three big monitors and it scared the heck out of me.

Speaker 3 Oh, man. She lives and breathes that stuff.
And she's really learning the business. She's got a passion to want to know what's going on.
She wants to understand the garage drawer industry.

Speaker 3 And it's really cool because Luke, our COO, is kind of bred into the.

Speaker 3 garage draw industry. Like he knows sales.
I bought his business five years, six years ago, and he had two employees. And now he's the COO of, you know,

Speaker 3 pretty massive. I mean, the largest grassroots company.
Yeah. And I think there's so much more room to grow.
Like, people say, what is like, what does Tommy's life look like when you turn 50?

Speaker 3 And I'm 40 now. I'm like, well, I enjoy business, but, you know, traveling, it's really deepening relationships and enjoying yourself.
Yeah.

Speaker 3 I don't think my life is going to be a whole lot different at 50. I mean, hopefully I have kids eventually.
And, you know, luckily. Their life is going to be pretty amazing.

Speaker 3 You know, a question I get a lot, John, is how do you have kids and not bring them up into this to where they're spoiled rotten, going on private planes?

Speaker 3 And like, they don't understand what it's like to come from the bottom. And they just lived with a golden spoon their whole life.
They could have anything they want.

Speaker 3 What do you think the secret is to parenting when you're a wealthy guy? I mean, you've got two boys. Yeah.
How do you handle that?

Speaker 1 I mean, my wife and I talk about this all the time. I mean, we feel like we're very lucky with our kids.
I mean, they've

Speaker 1 both of them have been like extremely non-demanding.

Speaker 1 Like, they don't have any kind of like you know like i want this or i need this or whatever the case your nose is stuck up yeah they're very humble i mean hardworking i mean my my oldest son andrew like you know he wouldn't bring friends to our house because he was afraid of how they'd feel seeing our house because it's better than theirs.

Speaker 1 I'm like, what are you talking about, dude? That's our house, not yours. So don't worry about it.
Bring them.

Speaker 1 So it was like, you know, so, so caring about other people and how they perceive them and everything. And just really never asked for anything, right?

Speaker 1 Just would always want to earn something what do i need to do to get this even my youngest son whenever he wants something he's like dad what do you need me to do for me to be able to make this much money i'm like why do you need it he goes because i want to buy this he never asked me for money he just asked me how he can earn it yeah right and what do you respond with i i give him something to do like

Speaker 1 hey there's you know there's this you could do that since they were kids i had my youngest son you know that was shredding paper at one time i you know we would have all this paper that was in our accounting department, and the girls would shred it.

Speaker 1 I'm like, hey, I'll just have my son do it. So I'd take it home with a shredder.
I'm like, here's a job for you. Shred all these papers.
He's like, all right, well, how much do I get?

Speaker 1 Get minimum wage. He'd sit down and shred paper all day, you know, and then make some money and go buy video games or whatever.
Yeah. You know, so they've always been like that.

Speaker 1 And I think it's, you know, I don't know what it's from. I mean, because they've never really been sort of like the kind that, you know, thought they deserve something for nothing.

Speaker 1 You know, that's nice.

Speaker 3 nice and it's difficult because

Speaker 3 you want them to go out and build their own success not because

Speaker 3 it just changes your mindset when you when you said hey i built this rather than saying hey i got my dad i inherited his business and you know that's why i'm a multi-millionaire is there's some type of pride of just knowing i accomplished this i came from this and i built it yeah well another thing i did with my kids when they were young we started reading books together so they read a lot of the self-development books that i've read.

Speaker 1 Yeah. You know, like how to win friends and influence people.
I noticed you have that there. Yeah.
We read it. We read it.
Me and my sons read it together probably three or four times.

Speaker 1 We'll always go back to that book.

Speaker 3 Those are so many. Best book.
Yeah.

Speaker 1 So many nuggets that come out of that book. But I think it was those kind of things that, you know, as they were reading books and they read the slight edge for teens and, you know, they read

Speaker 3 Seven Hill, Think and Grow Rich.

Speaker 1 Yeah, Think and Grow Rich. They read, you know,

Speaker 3 Rich DePordet.

Speaker 1 Yeah. Yeah, I went through and we played cash flow together, yeah.

Speaker 3 I got that game, I haven't played it yet, but that's cool.

Speaker 1 So, as you know, that was their game when they were young, we'd play it together, you know, they were learning the value of money and how to invest all that.

Speaker 1 So, I think that had a lot to do with it as well. It's just how old are they? So, my oldest is 21, he's uh, he's in college, um, he's taking um technology, he's like into IT.

Speaker 1 Yeah, um, he wants to be a programmer, he wants to go work for service titan, yeah, or

Speaker 1 start up something. Oh, that's cool.
And then the youngest is still in high school deciding what he wants to do. He talks about wanting to come into the business.

Speaker 1 I don't know if he's going to do that or not, but you know. Well,

Speaker 3 if I could go back, I would have said, listen, go get a job, learn a blue-collar industry,

Speaker 3 find out what you love and go intern before you go in for a four-year degree. Right.
Because

Speaker 3 I was pre-dental. And then I interned with a dentist.
It took 65 credits. And I interned with a 47-year-old dentist.
He said, specialize if you're going to go to dental school.

Speaker 3 And how much do you know about business? I said, a fair amount. He said, I go to MBA, get a master's degree in business.
He goes, because I'm 47.

Speaker 3 I don't know how to run a business and I still have a lot of college debt. And he goes, I'll be 55 by the time it's all paid off.
I live a good life.

Speaker 3 But Tommy, you don't seem like the type of guy that wants to do what I do.

Speaker 3 And thank God I didn't. But I wish I would have interned.

Speaker 3 before I decided I want to go to dental school. Like, I know so many people that change their mind after three years of college and they're like, I don't

Speaker 3 communications degree or liberal arts or all these things. They're like, I can't make money in this, but they have a passion for it.

Speaker 3 But just because you have a passion for something doesn't mean it's going to pay the bills. And some people say, I'm fine making 50 grand a year.
I'm doing what I love.

Speaker 1 But that gets old.

Speaker 3 You have a family and all of a sudden you wake up every day and doing what you love and you're like, this isn't enough.

Speaker 1 I mean, even

Speaker 3 listen, Tiger Woods has to hit a thousand balls a day. It's a job still, but he's very passionate about it.
He doesn't mind hitting golf balls, but that's the only way to earn money.

Speaker 1 So

Speaker 3 I don't knock college. I think everybody.

Speaker 1 Yeah, I mean, it's for some people, not for everybody, but our system wants to put everybody through it. That's, that's the problem.

Speaker 3 They want to put you with that.

Speaker 1 Yeah. I mean, every, it's like the colleges have a way to get everybody in and they have a way to.

Speaker 1 But, you know, I never went. I'm a high school dropout.
I went into plumbing after my dad died. And

Speaker 1 I don't have a high school diploma, but I've been educating myself

Speaker 3 through books, through podcasts, through seminars, and you've got around the right people. How important has it been for you to be around? Who's your biggest mentors throughout your life?

Speaker 1 I mean, being around the right people is key. I mean, I've learned everything I've learned, you know, just like doing what I did today, come to your business, hang out with you, ask questions, learn.

Speaker 1 And I did that when I got into the, you know, franchising. You know, the way I became the largest franchisee for them is by visiting all the franchisees that were doing well.

Speaker 1 I took the top 20, I called them all out, and I said, hey, can I come see you? And I flew out there.

Speaker 1 I went out, hung out with them, you know, and learned their business, learned what they do, you know, came back, applied it, went back again. Yeah.

Speaker 1 And one of the guys is like, man, how many times do you want? I'm like, I'm a slow learner. I need to get out here several more times for me to figure this out.
And he said one thing to me.

Speaker 1 He goes, you know what? He goes, in five years, you're going to be larger than me.

Speaker 1 I said, why do you say that? He goes, I've never seen anybody wanting to come out and learn as much as you.

Speaker 1 He said, because I, I, I want to apply everything I learned and I don't think I got everything yet. So every time I'd go out there, I'd get something new.
I'm like, how come I didn't hear that before?

Speaker 1 It's because I wasn't ready for it, right? Yeah. When I was ready for it, then I'd learned the lesson.

Speaker 3 You know, Keegan came on the podcast about a month ago and he said, Jamie Domenico.

Speaker 1 Yeah.

Speaker 3 said the same thing. He goes, dude, could come around here because you're obviously outgrowing me at this point.

Speaker 3 But he said, without him nudging him and allowing him to come through, and I mean, I spent time at service champions, spent time with Keegan and Ken Goodrich, and I went to Detroit with a couple companies there.

Speaker 3 And then I went, I mean, I've been around without going and looking at really successful companies, I don't think I'd be where I'm at. And I took HVAC.

Speaker 3 I picked HVAC because I was like, who's making the most money? Who's got the private jets? Who's doing service agreements? And HVAC Plumbing was it.

Speaker 3 I mean, and they built, you know, Nexstar, and there's all these other networks. And that was Jim Abrams back in the day.
Yeah. And success leaves clues.
Yeah.

Speaker 3 A lot of people are so, they think they got it all figured out.

Speaker 3 They're like, you know what I hear a lot of people say that aren't even doing a million dollars of profit is we got something really special.

Speaker 3 I'm like, man, you must be making tens of millions of dollars. No, no, no, but we're going to franchise it for sure.
So you're not making a lot of money.

Speaker 3 You're not making, you don't have 15% market share. You haven't proven it in any other markets.
Your marketing is okay. Your reporting sucks.
And you're going to start a franchise.

Speaker 3 It's like for me, the two people that I think don't really do well in business, they say, I'm going to start a franchise.

Speaker 3 Not saying franchises are bad, but they just say, I don't want to work very hard, so I'm just going to franchise it. And the other one says, I'm going to go into coaching.

Speaker 3 And I'm not saying all coaches are bad, but what do they say? What if you can't make it in the real world? You teach. Yeah.

Speaker 3 So I'm not saying there's a bunch of great coaches. There's a bunch of great franchises.
But the franchise model, and you've lived it, you got to know everything.

Speaker 3 CRM, you got to know the training, the recruiting. No one wants to buy a franchise and say, let me build a business.
They want a business in a box.

Speaker 3 And the problem with franchises, most franchises, they say, oh, yeah, you could buy one. You're not buying one of my franchises unless you're a badass five out of five.

Speaker 3 Because you're going to give us a bad name. You're not going to take care of your employees.
You're going to get bad reviews. And you got to know everything.

Speaker 3 You got to know the payroll systems, manuals, standard operating procedures, checklists, recruiting, tax planning.

Speaker 3 You got to do the marketing for them. Their job is to penetrate that market and be involved in the community because you can't do that from afar.

Speaker 3 Other than that, the franchise should have all this set up. Who are you buying from? What kind of affiliate deals do you have? How much money are they getting back?

Speaker 3 You look at something and it's so hard to control a home service franchise because it's a lot easier to do a restaurant or a gym because you could control it in four walls.

Speaker 3 You could have cameras, you could look at things. A home service company

Speaker 3 is like you got all these different employees that drive home and they drive to work and you got CSRs and dispatchers and you got warehouse and inventory. There's a lot to manage in that.
Yeah.

Speaker 3 Would you ever do franchise?

Speaker 1 No, I was a franchisee and I wasn't a big advocate of franchising. I didn't see the benefit for guys that wanted to scale because they kind of hold you back.

Speaker 1 So I just really never got the real good vibe of franchising. So I don't think I'll ever get into franchising.

Speaker 1 I believe in, you know, like hiring entrepreneur-like people and giving them a chance to build a business within a structure.

Speaker 3 Yeah, an entrepreneur. It's an entrepreneur instead of an entrepreneur.
They work within a business, but they get the flexibility. They still get PTO.

Speaker 3 They get to put their work jacket off when they get home.

Speaker 1 Yeah, and give them the autonomy to run the business.

Speaker 3 Let them fail. That's the hardest thing I have.

Speaker 1 Yeah, let them fail as well. I mean, because

Speaker 1 they have to fail forward and they have to fail. And the whole thing is that...

Speaker 1 you know, they don't have to risk their own money when they're doing this, but they could definitely benefit from the equity, right?

Speaker 1 So the upside is there without the downside, but they have to be people that are willing to take risk within a business structure.

Speaker 3 Yeah, and that's the hard part is like, I'll let you fail, but you might want to run things by me because I'd rather give you the nod of go for it.

Speaker 3 Then, because here's the deal, if you do great, I'm going to applaud you. If you don't get my approval and you shit the bet, it's going to be bad news bears.
And I don't want to have bad news bears.

Speaker 3 So at least let me know. Anything over 100 grand, let me know about.
And if we lose it, we lose it. Like if we go out, like you just met Robert, my VP of marketing.

Speaker 3 He said, Hey, I want to do this thing with the Las Vegas Knights where I want to sponsor them. I said, How much? He's like, A little over 300 grand.
And we got to have a two-year commitment each year.

Speaker 3 And it escalates about 10% a year.

Speaker 1 I said, Are you in the Las Vegas market?

Speaker 3 Yeah. Yeah.
So we're take, and we believe that's going to be a very, very big growth market for us. So we picked five markets: Vegas, Houston, Denver, Michigan, Detroit, and Milwaukee.

Speaker 3 And we're putting a lot of money into those. And I said,

Speaker 3 how great do you feel about this? Because it's 1.2% of our yearly budget, 1.2% of our marketing budget, which is about 10%.

Speaker 3 So you're putting 10% of the marketing bucket into the nights. And he goes, Tommy, I feel great about it.
And I said, well, here's the deal. If it doesn't work, we're losing a percent of marketing.

Speaker 3 If it does work, we're going to do it in every market. We're going to go berserk with it.
So it's worth testing those things out, making educated decisions on it.

Speaker 3 What are some of the books that you've read in the last few years that you think really changed the game?

Speaker 1 Well, I mean, we're reading your book. I think it was really, you know, it's a really good book.
Thank you.

Speaker 3 I appreciate that.

Speaker 1 Let me think. There's just several books.
We just went through Al Levy's book, Seven Power Contractor. Seven Power Contractor.
I read a lot of books, but I don't remember all of the names. Yeah.

Speaker 1 But one of the ones that really I go back to a lot is a slight edge because I think those little habits

Speaker 1 that people incrementally do lead into big results.

Speaker 1 So it talks about how to create positive habits. Miracle Mornings is another one that was really good.
It talks about how to create, you know, certain things in the mornings.

Speaker 1 But some of the main ones are, you know, now we're going back to industry books.

Speaker 1 There was a book written by Jim Abrams and John Young called Phoenix. Called Phoenix? Yeah.
It's a hard to get to book.

Speaker 3 Yeah, it's probably not in print anymore.

Speaker 1 It's probably one of the most expensive books you're going to buy also. I think I paid $500 when I found it.

Speaker 3 And that Matt Michelle, I bought a book by Matt Michelle about your numbers and I paid a couple hundred bucks for it. Yeah.

Speaker 1 I paid $500 for this one. And it's a really good book.

Speaker 3 I'm going to have to buy that. I'm glad you mentioned that.

Speaker 3 Is Is there any other books that stand out to you just off the tip of your mind?

Speaker 1 I mean, those are the books that are coming to mind right now that were very instrumental. And some of them are industry-specific books, you know, that talk about exactly what they did.

Speaker 3 I'll show you a book when we go back into my office by Matt Michelle that you should pick up.

Speaker 1 Cool.

Speaker 3 So I'm going to read you a poem real quick that you made me think of. I am your constant companion.

Speaker 3 I am your greatest helper or your heaviest burden. I will push you onward or drag you down to failure.
I'm completely at your command.

Speaker 3 Half the things you might as well turn over to me and I'll do them quickly and correctly. I'm easily managed, but you must be firm with me.

Speaker 3 Show me exactly what you want and how you want something done. And after a few lessons, I'll do it automatically.

Speaker 3 I am a servant of great people and the alice of all the failures as well. Those who are great, I have made great.
Those who are failures, I have made failures. I'm not a machine, though.

Speaker 3 I work with the precision of a machine plus the

Speaker 3 intelligence of a person. You may run me for profit or run me for ruin.
It makes no difference to me. Train me, take me, train me, be firm with me, and I will place the world at your feet.

Speaker 3 Be easy with me and I will destroy you. Who am I? I am habit.

Speaker 1 That's right.

Speaker 3 Yeah. And it's all the habits.
So when you said great habits is as you start to form great habits, for me, it's been working out, eating healthy, not drinking the booze.

Speaker 1 Yeah.

Speaker 3 And I don't think booze is bad if you do it with moderation. It's one of those things where, do you even drink?

Speaker 1 No, it's been five months now.

Speaker 1 I haven't touched any. Maybe had a glass of wine here and there.
Yeah. But I mean, I've completely, I've decided I don't like what it does to me, and I just don't want to touch it.

Speaker 3 When you were getting that,

Speaker 3 what was it called?

Speaker 3 The HL1 or HLI.

Speaker 1 HLI.

Speaker 3 Was alcohol a big thing they tested?

Speaker 1 No, no, it's my liver is fine. Everything's good.
I just didn't like the way I felt.

Speaker 3 Yeah.

Speaker 3 The hangovers.

Speaker 1 Yeah, the day after and uh you know i like to get things done

Speaker 1 and uh sometimes after if i drank a little heavy the next day i would just be in a it's hard you know so what uh the last thing i ask if someone wants to reach out to you what's the best way to do it my cell phone numbers on our website if you go to um rooterhero.com um you've got about us so you got your cell phone number for clients to get i have my cell phone number number on the website.

Speaker 1 It's clients call me. We try to give them a service where they don't have to call me.
I put my cell phone number behind every business card too. Said, if you're not 100% happy, call our office.

Speaker 1 If they can't help you, call my cell phone. And that goes to a Google voice number

Speaker 1 where it auto-dictates. And if I ever get a message on there, I forward it to the proper manager.

Speaker 3 And I'm like, how many do you get?

Speaker 1 It depends on the day, but I'll probably get about four to five a week. Okay.

Speaker 1 And a lot of times it's auto-dictated.

Speaker 3 Yeah, when it's transcribed?

Speaker 1 It's transcribed, yeah. So it'll transcribe and then I could forward it to whoever I need to.
And then I just monitor to make sure they get a hold of them.

Speaker 1 But what it does is because all of my techs know that my cell phone number is beyond the card, they try even harder to, you know, wow the customer. Yeah, exactly.

Speaker 1 And that's the whole idea. It's like, you know, make yourself accessible, but don't let people call you.

Speaker 3 Two books I want you to read.

Speaker 3 Buy Back Your Time, Dan Martel, Genius Guy. And then I've been talking a lot about this other book.
It's called

Speaker 3 Come Up for Air.

Speaker 3 And it just explains getting everybody on the same software using the right stuff because everybody seems to use Slack. And then you got another person using email.

Speaker 3 Then you got another person using Google Drive. Another person using Microsoft Drive.
Then one person's got Monday. Another person's got Basecamp.
Oh, this guy likes Asana. Oh, this guy likes Loom.

Speaker 3 This guy likes Zoom.

Speaker 3 And it's like, holy shit we're all using different stuff we got to get on the same board here so we use monday for our project management uh john to close us out i'm going to give you a couple minutes we talked about a lot of stuff and i just love hearing the story you you didn't have a lot of money when you came here and here you are super successful great business taking care of people got two amazing sons you're happily married she's in the business with you you're out here visiting on a monday which it's great you're running a huge business you can just break away and not that's what's so nice about owning a really great business: I can leave for a month and nothing will change.

Speaker 3 But I'll let you close this out. Anything you want the listeners to know, or just any final thoughts?

Speaker 1 Yeah, I mean, just

Speaker 1 final thoughts. I mean, you know, continue to want to grow, you know, learn, visit successful people like yourself.

Speaker 1 You know, I'm grateful that you allowed me to come out and take a look at your business because we want to get to where you're at. Right.
So,

Speaker 1 and you know, work on, you know, providing resources for your teams. Reach out there, provide resources, make it easy for them, and uh, just show up, be there.

Speaker 3 So important. Great advice.
Be there, be present when you're there. Andy Elliott came and spoke to us a couple weeks ago.
He said, guys,

Speaker 3 be where your feet are. If you're at work, be all in.
If you're at home, be all in with your family. That's not watching TV.

Speaker 3 If you're at the dinner table, put your cell phone away and be engaged in your family. Be where your feet are.

Speaker 1 So, so true.

Speaker 3 John, thank you for being here, brother. Anything else?

Speaker 1 My pleasure. Thank you.
Thank you for having me on your show.

Speaker 1 Thank you. Thanks.

Speaker 3 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.

Speaker 3 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.

Speaker 3 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.

Speaker 3 So if you want to learn the secrets to help me transfer my team from stealing 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.

Speaker 3 Thanks again for listening and we'll catch up with you next time on the podcast.