Q&A with Tommy - Dialing In on Your Standard Operating Procedures to Set Up Your Business to Scale

you got to get out, but you can't get out to get out. If you're the top performer, you should be getting out to do more in sales and come up with more manuals and make sure everybody's trained.
It shouldn't be I'm getting out so I could get out and say I'm not working in the truck anymore. That's not a big enough why.
You say, if I was out of the truck, I want to see a list of like 100 things you're going to be focused on. Working on tax planning, working on budgeting, working on getting your financials in order, building the right manuals, building the right trainings, working on performance pay.
Don't just get out having a priority list of what you've got to accomplish because you might get out of the field and find out everybody's calling you because you've enabled them. You have not taught them enough to be sustainable in the field by themselves.
So that's the first thing is make sure it's sustainable to keep yourself out of the field and keep them in the field.

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 Mello.

Before we get started, I wanted to share two important things with you. First, I want you to implement what you learned today.
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 my team to take the notes for you.
Just text NOTES to 888-526-1299. 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, go check it out.
I'm going to 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.
Now let's get into the interview. Welcome back to the Home Service Expert podcast.
It's going to be a good Q&A today. I had to miss the other date.
I don't remember. I think I was out of town.
Last two weeks. We've done a lot for A1 the last couple weeks.
If you guys haven't heard of the book yet, the first book is The Home Service Millionaire. If you go to homeservicemillionaire.com forward slash podcast.
The new book is elevateandwin.com. I've been getting a lot of great feedback.
Those of you that have been asking, I finished the Audible. I just got to go back one more time.
I'm building a studio for the home office. I got my studio here.
I got another studio. So we're going to be able to record things a lot quicker.
Working on efficiencies. First course was course.homeservicemillionaire.com.
The Elevate's got a course that came with it. And if you're not part of the home service expert group on Facebook, you should be joining.
Man, I just took two Advil and I took an allergy pill earlier. Like I am getting nailed today.
Worse than I've gotten in years. Well, let me just catch you guys up with what I've been up to.
Then I'll go through some questions. So first we did the Pinnacle Club.
We had top, top, top performers in the company come to Tulum, Mexico. A lot of management went.
We had a blast, did a lot of fun stuff, really got to just celebrate the big wins. And it was great.
It was about a five-day trip, got back. We have the dream manager program.
And so we had a bunch of people fly in for more training we went to top golf then we went to a baseball game that was a blast next day we went to sedona uh small celebration here about some stuff we hit last year more uh employee fun we did some atvs out there then yesterday, me and 12 other guys jumped out of a plane and went skydiving. And that was crazy.
Everybody came back alive, which is great. And then we had a picnic.
We had about 50 people out there. We had a cornhole tournament.
It's a good time. So, man, I'm excited to be in the May.
As fun april was my whole body hurts so today i gotta go work out and then interestingly enough i have a whole content manager now and i was talking about my wardrobe i was like half the stuff doesn't fit anymore good or bad we need to go through my clothes so she hired this lady from northstrom's to come over and she's like, get into your boxers. So take my shirt off.
I was wearing shorts, take off my socks. And I tried on every single thing I own and ended up getting rid of more than half of the clothes.
So just working on making sure stuff fits right. Not going like all out wearing a suit every day, but getting custom A1 shirts made.
It's really looking out, making sure I'm trying to be the best version of myself. I got a lot of great questions here to go over, but April, I won't have the financials back for probably eight days.
Usually we try to get them out between the 8th and the 10th. I think I know where we're going to land bottom line.
The month before it didn't hit my target. We were still in the high teens, but that's where you should be if you own a business.
I read this book, Acres of Diamonds. And if you guys get a chance, read that book.
You could read it on Audible in less than an hour. And it's such a great book.
I definitely recommend it. And he talks about money is not the root of all evil.
The love of money is the root of all evil. And in business, you have an obligation to your business, to your employees, to your customers to make a profit.
If you're in business, not making a profit where I've been before in my life, it's a tough road because it's a lot of hard work. You guys know that.
But let's just dive right into the question. I'm sure I'll think of a lot more things to go over.
So Brian said, I have a little over a year in business. I'm in the home service industry.
I'm an electrical contractor. Out first year, we made almost a million dollars in sales, and I'm hungry to double the amount.
Good. Well, if you want to double, it comes down to some basic things.
You need leads, right? You need to get a lot of leads. So getting qualified, affluent, great customer leads that are calling you because they like you, not just because you're the cheapest guy out there.
Getting leads, making customers, they buy the experience, they buy the reviews, they buy who you are and what kind of service you offer them. So I definitely would highly recommend trying to make sure you're different than everybody else.
And a million dollars is really a big accomplishment. But start thinking in the terms of bottom line.
You know, I was talking to a guy earlier, amazing guy. His name is Tim Fitzpatrick, and he's in Portland.
He has a painting company.

And I was telling him my goals, but he's like, well, didn't you hit over 150 million last year?

I said, no, I was talking about EBITDA because my goals have really shifted from revenue to profit.

And that's where I think everybody should be. Mexico was absolutely phenomenal.
You guys haven't been to Tulum. You should go.
It was safe. It was fun.
Everybody had a blast. Everybody got

Thank you. Mexico was absolutely phenomenal.
You guys haven't been to Tulum. You should go.
It was safe. It was fun.
Everybody had a blast. Everybody got sump burnt.
Super fun, though. One thing that I'm having trouble with and feel like I'm hitting a wall is building strong systems within the office.
This year, I feel like I'm hitting a lid. You know, I recently called back Al Evie, and I basically said, listen, if we're not recording everything, if there's not a system, if there's not a standard operating procedure of how you're doing your job, I just went and talked to our controller.
And I said, I want you to give me five things you guys are struggling with, whether that's Intact talking to Service Titan, whether it's our payroll software talking to intact, whether it's just where are the hiccups that's not systematized? And I said, I will work on making your guys' life easier because working in spreadsheets, different software, trying to make them all talk, I've got all the channels to be able to get this stuff fixed quickly. And that's what's important.
I gave five people real quick that I could call to get these things fixed. So she's working on that for me today is what in the system is broken, right? There's only three ways the system doesn't work.
There is no system. It's the wrong system or the system is not being followed.
So figuring those out is super, super important. But really, are you cataloging everything? Is it written down? Is there a video to explain why you do it that way? If there's not, and you haven't created a standard operating procedure, and there's madness going around all the time, because people are doing things differently.
They're booking the calls in a whole different way, asking different questions than the other person. The interviews are always different.
The way they load the trucks are different. Some guy does inventories a little bit differently.
The way you dispatch is different. And there's not a payment structure that makes sure that follows the win-win.
Then that's really going back and figuring out how to slow down. And I'll tell you this, there's been several times in my business where I said, I'm just going to stop growth.
The reason why I say stop growth is that we need to make a profit. And if you're going to have a huge year in revenue growth, make sure it's sustainable, but I'd really be looking at profit.
Tommy, three to five key steps you took to shift from 50,000 to success. I'm under 3 million and I'm curious.
Well, somebody asked me if I could go back in time. I get this question kind of a lot.
And I would say right here, we've got the new investors, which are absolutely phenomenal. This is a complete breakdown.
The pitch deck is, this one is 12 slides I'm adding. And this looks at every single marketing channel we have.
and it tells me which ones are performing, whether that's GMB, LSA, PPC, Organic, whether it's Clipper, Valpack, HomeMag. I know everything on one piece of paper.
And there's different color codes here. In process, working on really making sure.
One of my buddies called me up during COVID in the beginning, and he worked with private equity. And he said, listen, make an Excel sheet of every one of your employees by department and come up with a rating, a performance rating, one through 10.
And make sure you're fair. Make sure it's factual.
Make sure it's KPI driven. And what I figured out was push come to shove if the economy just completely tanks.

I want to be in the driver's seat to be able to make sure the company goes on. I didn't want to have to lay out people.
We barely, I think we laid out like one or two people, but the moral of the story is you should know what's going on within your company. In every department, there should be an org chart of who reports to who and you to have accountability.
That's been a big buzzword around here, accountability. Let me answer more things.
Performance pay was a miracle. I've got the steps of delegation right here.
And I sent this out to 10 different people this week. I'm sorry, last week.
Every single thing going on within the company, here's what needs to get done. Here's why it needs to get done.
Here's what you have available to get it done. Here's the priority assigned to it.
Here's the date it needs to get done by. Here's the meetings we're going to have in the process of getting it done.
Here's the consequences or rewards if you get it done. And did the task get done? What opportunity do we have for feedback? And they sign off on it.
And going back to the roots of what Alivi taught me, I called them this weekend. We talked for about 45 minutes, went over just getting back to the basics.
And we had a great conversation and there's a lot of fun things that are gonna be coming up. Another thing that I would tell you is don't borrow money when you need it.
Get a delay draw term loan set up when you don't need it. That way, if there's an opportunity, but don't use that money like it's your own.
You're paying interest against it. But if there's an opportunity, what's a great opportunity? Well, let's say a guy's selling three vans.
It's 2018 with 80,000 miles. And he's got a trailer with it.
He's got 100 grand worth of inventory and he wants 300 grand for everything. His business, the phone numbers, the GMB, everything.

That would be an amazing opportunity.

If you didn't have the money,

you could never take that opportunity. So to have that there,

and maybe he's getting 10 calls a day

so you figure out your break even is 1.8 years

or one and a half years.

That's a given, right?

I would do that in a heartbeat.

I'll go over to this stuff a little bit more later,

but I've got so many notes. Every one of my markets is broken down to in a basic balance sheet, operations, finance and accounting, how much discounts we're averaging per market.
A lot of stuff on marketing that I'm really looking into as well as several people on the team. So if I could go back, I would tell you, get the best CFO and controller you could ever imagine.
Understand tax rules out there. Understand accelerated depreciation.
Take advantage of what's out there with the government. If you hire somebody that was in the Army, Navy, any military, there's all kinds of grants out there.
to not have anybody looking into these things or

just the CFO and controllers are going to be able to help out a lot know your financial we call it a financial quick check each week we know where we're at we know exactly what our EBIT is we know these ratios and I'm going to go into this later because there's a questions right here one of the other things I would have done is got a really really, really great EA a lot earlier. And I look at some of my senior management team and they don't know how to deal with an executive assistant because they have a hard time releasing certain things.
So if you're not keeping track of what's easy that you do on a daily basis, I'm not only going to be hiring another EA because Bree's going to be moving into a different role in the company, but I'm going to need two EAs and a personal assistant. So I'm going to need three people full time.
And we're going to be coordinating a lot because there's no way I'm going into a town to speak without going and talking to the big HVAC and garage door company and learning and doing a shop tour and maybe meeting one of the great authors I've had on the podcast. We're really, we're double downing on content because I think, I just, I like the fact that

we can help a lot of people.

So putting the word out there, of course, there's going to be, the more haters, the

more I know I'm doing better.

But anyways, getting an executive assistant is super important.

Understanding if you're an LLC versus S Corp versus C Corp, there's been a lot of questions about an equity incentive program. I'll dive into that here because there's a question here about it.
I would have done an equity incentive program a long time ago. I would have built a training center and got my manuals dialed in and made sure I'm keeping track.
We keep track of cancellation rates. We keep track of how many jobs did you use financing on we keep track of uh your average ticket your conversion rate your average review was it a four and a half star was it a 4.3 star we keep track of so many things with the technicians with the csrs and dispatchers it's important to as well when we hire somebody who is a hiring manager and how long have those people lasted because if you looked at a bell curve and you looked at the outliers, this person that's hiring is exceptional.
Whoever they hire stays on and they're great performers. This person is ridiculously bad.
This person, I don't know where they're hiring from and what's going on, but the turnover rate is through the roof. Those little keys are what make it possible to scale.
I got to go for a lot more, but those were about five. Here's a question by Shane Levenson.
I particularly love your emphasis on your culture. Taking a page from your book, I'm looking into employee ownership structure, and I'm curious what it looks like in your company.
And if you have a referral for a finance legal team, that could help me set it up. The finance guys I hired don't seem to grasp the utility of it from a cultural or narrative standpoint.
So I feel that they aren't the best equipped to develop this for us. Well, Shane, every single PE company has an equity incentive profit unit program.
This isn't like brand new, whether it's phantom equity, which I hate the word phantom because that basically means fake. It's real, but you got to hit certain benchmarks, right? And there's different ways to structure it.
But basically you take a percentage of the company and here's how it works. Let's say the company today, let's just take a 5X multiple and you're doing 2 million of EBITDA.

The simple math is the company's worth 10 million, right?

So you're not going to grant anything to anybody under 10 million.

That first 10 million is yours.

Now they came on and they help you get to 15 million.

Now that 5 million pool, if you gave them 1%, that'd be worth 50 grand, right?

So that's kind of how that works.

Thank you. million pool, if you gave them 1%, that'd be worth 50 grand, right? So that's kind of how that works.
It's great for recruiting A-plus players. It's phenomenal to have people want to stay at the job and running in the same direction.
They're all owners now, so they're looking out for you every which angle. And you could do this on a vesting period of five years, or you can make it vesting plus hitting certain numbers.
Like maybe you say we've got to get, for this to be, you might do a table. If we do 15% EBITDA, you get this.
20%, you get this. 25%.
There's a lot of ways to structure it. I happen to work with a company called Foley.
And if you want, there's a guy, Chris Kane,

you could reach out to him at Foley. I can help you get in touch with him, but it's the real deal.

These programs work. This is why every public company does shares, right? To their executive

staff, they'll do a stock options that they could buy into. This is not new, but it's new to home

service and it's new to really a lot of the people I've been talking to. And when I figured this out, the day that we had a transaction was not just the best day for my financial future, my families, but it was the best day for over 20 other people that are ride or die.
And I got their back and they deserve everything they got.

And we got to work together. I have a lot of ideas and they help implement these and integrate them.
Silas Smith said, where would you look to find insight on what number we should be looking at in our business? What reports to run, what the ratio should look like, et cetera. I just don't know a trusted source.

Thank you in advance.

Well, the main number should look like, et cetera. I just don't know a trusted source.

Thank you in advance.

Well, the main number to look at is one that I really like is gross profit, right?

And it should be in the low 60s, most likely, high 50s.

Gross profit looks at a lot of important things.

You should be looking at how many people are supporting, like your support staff.

This is call center dispatch, corporate support staff and technicians. That's a really quick pie chart that we're analyzing the crap out of.
I take a ton of notes. But understanding how many people you have in your company, who's doing what.
Al Levy always said, if you're not a two to one ratio, meaning there's two guys out there collecting checks, whether it's an installer, a technician, a maintenance tech, whatever you might have, compared to one person helping, whether that's a CFO, COO, sales support, warehouse people, could be a fleet operations manager. If you're not a two-to-one, we're not quite there yet.
Somehow we're still still doing great but once that ratio is really what it should be i think what happened is we had a lot of stuff to clean up we're right sizing everything right now and when that ratio gets back it's hard not to make money in fact alan roer and al both say that when you're hitting that two to one or better you're absolutely killing it. You got Grant Cardone and his team, Brandon Dawson.
They say that home service companies, specifically HVAC should be doing $350,000 per person, not only technician, but CSR dispatcher. At those ratios, I mean, just think about it.
If you've got a hundred people,

you're doing 350,000. So 10 would be 3.5 million.
Yeah. 35 million.
I mean, pretty crazy numbers to hit, especially in things that don't have a $10,000 average sell or better. But those are some ratios.
Obviously everything that I didn't focus on when I was younger in the business was more of the income statement, the balance sheet. And these guys, they look at these and they tell you exactly what's going on.
They're like, what's going on? And I've got a slide for every single market. What's going on with discount rate here? What's the cost of goods? Why is your marketing flaring here? And here's the deal.
They don't care. They want to know, you can go to 25% of your revenue, 25%.
If you're making a million, you can go to 250,000. But what's the goal? You want to double for next year? Because that's okay.
But if you don't have a budget, you don't have a goal, you don't have a plan. I would be looking at all my discounts, how much I'm using financing for, profit.
I'm telling you guys, I just sat down with a guy the other day. The reason you're not going to find profit is because you're not priced right.
I'm not insisting on screwing my clients over because we've got a really high booking rate and a high conversion rate. With the right average ticket and the right cost per acquisition, that's how you make the money.
Are you open nights and weekends? Does your GMB say open 24 hours? Do you have an emergency guy? Because don't raise your prices if everything else is broken and expect to make more money until you're booking. People called you with a problem.
And if you're not booking 80% plus or more, then there's an issue there. If you're not converting on a service ticket, if you're not converting 90% or more, that's bullshit.
And if you're not optimized all over the internet, specifically Google, then raising your prices won't do anything. You don't have a chance to get more work until those main things are fixed.
I'm wanting to scale into different markets. I'm currently at $3 million a year.
What is the best route without getting sucked back into the weeds? Well, here's the problem, Brian. If I could go back in time, another thing I would have told you is take market share.
See what's possible. Own your own market.
There's different studies out there. I paid a lot of money to get a study done in garage doors, which put the market cap around 13 billion.
I think it's higher than that. That's just residential garage stores.
But Tom Howard put on a great clinic, and I could get you guys access to that at the last vertical track, where he explained what the market cap is. And if you think 3 million is great in a market, but I guarantee you could get it to 10.
I don't know the industry off the top of my head, but why not own the relationships that's in your backyard? You probably have a lot of family and friends and neighbors there. Take more market share and don't go more than two hours away when you go to another market.
I mean, if you're not stellar in your current market, it's not going to get any easier in another market. You think, hey, man, if I got 3 million going in 10 markets, it's low-hanging fruit.
I know I can get... Well, you can't even have a meeting face-to-face in 10 markets ever.
Good luck getting to 10 markets even in a year. I know because I've lived it.
Take market sharing and current market is what I would tell you. Greg said, what primary KPIs exactly would you recommend keeping a record for a service industry like window cleaning? You guys know my favorite KPIs, Converse Rate Average Ticket.
But in window cleaning, what I would do, and I just, I spoke at Sales Boost. And there's certain things I would look for.
Service agreements, huge. Are you selling service agreements? And the way I would sell a service agreement is not put a lifetime warranty or five-year warranty on it.
I just say, listen, I'm going to do something else for you while we're out here. I'm going to winterize your home for the winter.
I'm going to bring you back in the summer. I'm going to show up here before your Christmas or your Thanksgiving event that you're having for your family.
And when I saw a service agreement, I thought a lot about this as I'm speaking to all these guys, and I went back up. And I'm like, how would I sell a service agreement in that industry? Window cleaning, I'd say, listen, we're going to do your deck treatment.
We're going to make sure to apply this on the windows, which creates longevity. I'd show them some stuff on their roof and gutter systems that we treat it.
It doesn't take a lot of money to do this stuff. But then I'd show them in their warranty from their stucco or their aluminum siding or the wood that they have on their deck.
If it's not treated properly, it voids the warranty, which a new deck will cost 12 grand. A new roof will cost 25 grand.
If we don't take care of this, it'll cost us. If you bust a pipe in winter, it'll cost on average eight grand.
So we're gonna take care of this stuff for you. And we wanna be out here twice a year and I'd be selling the crap out of service agreements.
So you asked for Windows what I would do and Windows, Pools, Pest Control, there's a lot of others. I'm looking for how long do you keep a client? Do these clients stay on for a long time and have you built the business that creates them coming back? Super important.
I don't think a lot of people think about that as how much does it cost you to acquire a customer and how often are customers falling off? Another thing that I would look at for sure is my average review. And most likely I know you're in Boise.
you have an opportunity to be on the outskirts

and set up another office

and you could run a real office there with a real lease

on the completely opposite side of town.

And you want to be in an affluent area with nice houses

because here's what I found out is

people with nice things,

they tend to have the money to pay more

and they'll take care of it.

When the windows cost them,

you know, packages,

I'm looking at houses,

window packages cost 150 grand.

Thank you. they tend to have the money to pay more and they'll take care of it.
When the windows cost them, you know, packages, I'm looking at houses, window packages cost 150 grand. So to spend some money taking care of those windows, making sure that they're operating correctly, making sure like they'll spend the money.
So being in a fluent area, and then I keep track of the reviews in each different side of town, if you're far enough away, you know, for our programs, everything's the same on performance pay,

but we started logging their hours.

And if a guy's not making our performance pay, they're one of 10.

Either they need to be trained more or they got to get more efficient or we're having them drive too much.

Maybe it's a dispatch problem.

Maybe it's a marketing problem. But it's definitely something to look into because our performance pay is easy to hit.
And when you find people are getting paid the hourly rate over the performance pay, there's a big red flag there. So definitely keep an eye on that.
And I went over a bunch of other ones, but I'll think of more here as we're going. Do you primarily sell grouchers of people having issues with their doors or can you proactively generate door sales, even if they don't have a problem with their doors? How can you create a sale when there isn't a need? The majority of our door sales come when they're not looking for a new door.
It's what would happen if you took your car to the shop and they said, this is going to cost more than going out. It's kind of like when the refrigerator salesman came out to me and said this refrigerator is 12 years old we can fix it for 400 bucks so i can get you a new one for two grand same thing happens with the garage door this paint is oxidized it's non-insulated it's dented it's got lots of issues the rubber seals are not doing their job anymore the trim the opener is old we could go ahead and fix this and fix this right now.
I can put a strut on that, replace the bottom rubber to keep the bugs out, but I'm not going to put insulation in this old door. I mean, we might be able to, but it's not cost-effective.
Then you got to paint it. And then it's still dented.
I'm not going to get a guy out here to pop out the dents on your garage door. So if someone comes and looks at your roof to repair it and they find seven different spots where it's leaking, is it best to patch all that stuff and then have seven more next year? Same thing.
Really what you look at is how old's the equipment. That's, in HVAC, they look at it as it's over 10 years.
And if it's over 10 years, there's a good chance it's not efficient. It's just not, you cannot breathe life into that old of an age.
You know, maybe a 50-year-old unit that was built with like different parts to last forever, but this day it's built to break. It's just the way it is.
So our service calls, you know, you got to remember, garage doors make up 40% of your curb appeal. So when they see the difference of what their home looks like, they understand the difference between their electric bill.
They understand there might be some stuff with the Biden did this thing called the Inflation Reduction Act, which there's certain energy qualifications. Garage doors don't really fall under that.
There's like a $300 credit they could get for building something you factor our value efficiencies. But when you bring all these things up, people are like, yeah, I never really thought about replacing it.
But now that you mentioned it, it's the largest moving object of your home. You use it all day, every day, in and out.
The kids are using it. It could be dangerous.
It weighs a lot. So I think there's a lot of opportunity because I don't sell things people need.
I hate people that say that. I only sell things people need.
I sell things people want. Did you need a brand new iPhone when it came out? Did you need to go on that vacation? Most of the stuff we do, we don't need, we want.
And when people understand that in the home service industry, he didn't give me any options. And if you're not giving options, you're giving ultimatums.
And when you come up with more options, your sales will go up dramatically. Even if you came up with four and somebody picked the second one every time, it would be better than the first one.
And you will get people doing four and three and two and some one. But the more choices, Joe Cressara says you take six choices.
That's the difference. That's going to make a huge difference.
90%, John said, 90% of our customers pay with credit cards or checks. Financing is rare for us.
How do I help more customers to finance? Well, certain phrases, did you want to use your money or our money today? What's the credit card rate right now? 19, 20, 30? Pretty high credit card rates. I'll save you a lot of money.
We never call it financing. We've got a promotion that's half of that.
And there's no prepayment penalty. So it's really understanding.
We had to work and work and work and work and role play and role play and role play. It was not just one day that everybody said, oh God, financing is great.
We watched one guy that was successful at it out of a hundred. We studied that guy.
We got him more successful in like a rubber band. Everybody was able to pull up.
And I asked a lot of people for help that are much better. Darius Livers went through a whole clinic with me on why financing makes sense.
You know, the average customer makes it, it's hard for them to write a check for, I think it's around $500 when they don't anticipate it. You know, this industry is massive And there are four reasons why your technicians don't use financing.
Number one is they hate change. It's not how we used to do it.
Why are they making us do this now? Number two is, I'm going to forget these. They hate change.
It's complicated. A complicated mind always says no.
APR, prepayment penalties. How does it work? How do I log in? And so you could role play over and over again.
Another one is that a lot of customers don't like the word financing. Do I look like I need financing? If you say, listen, a lot of our smart clients are taking advantage of these promotions, it makes a lot of sense.
When I think if somebody walked into brie just had this happen she did some like laser hair removal and it was like i don't know three grand or something and the lady said hey i'll set you up with our financing and brie's like i just want to pay and she's like well how old are you and brie told her she's like most girls always finance this but the girl assumed one of the things Darius talks about is assume they're paying with financing. Hey, we always talk about our membership and how you can save money and using our money instead of yours.
And I will tell you guys, it's not our money. We pay a dealer fee.
So if you go zero interest for two years, it's probably 10, 12, 15% that you pay to use that. But the reason a lot of people like the financing is because you could advertise, just like the couch companies and the vehicle companies, all the furniture and automotive companies, they say, don't pay anything for two years.
Well, that's a lead generator too. So if you could generate enough leads and you're not giving a coupon on top of financing customers, understand that.
So I think there's a little distinction. You can't combine using our money, us paying a dealer fee, and giving you a coupon on top of it.
Do you have a business guide or paper performance structure that I can buy? No. The performance pay is tricky.
It's a little bit easier for CSRS technicians and dispatchers because you can basically take in an Excel sheet and load in everybody's pay for the last two months or two quarters. And then you could plug and play.
Hopefully you have the analytics. Hopefully it's not paper invoices to say, what if I took out, you could start playing with the numbers.
And if you get somebody really smart in Excel, you can literally say, I want to try paying them 10% of revenue, or I want to take out all the parts costs and the tax, and I'll pay them on a different scale. Like for example, we've got a scorecard.
Scorecard determines what category they fall under as a percentage. And we've got a lot of things that matter.
What's your cancellation rate? What's your average review look like? What's your average ticket? What's your conversion rate? And so we're monitoring this every single week. We go over their scorecard and the scorecard figures out if they're going to get promoted or not.
And so they've got a lot of skin in the game of their promotions and how it all works. But you can play with these numbers and say, okay, what I would do is say, here's my revenue goal for the year.
Here's how much profit I want to make. Here's my fixed costs.
Here's my variable costs. Now, if I'm paying the guys this amount, and I will tell you guys this, when you look at it all and break it down, I don't have these numbers off the top of my head, but I could get them in a heartbeat.
But you take all of your people in the field, direct labor, and figure out if my percentage is on or not for my industry. So you can take your direct labor percentage of revenue and say this either, I'm well under, so I'm probably gonna have a lot of turnover because I'm not paying people enough money.

Or there's not a lot of turnover

and everybody's staying and happy

and they're all buying motorcycles.

Then maybe you're paying too much.

So depending on that number,

but you could get your guys to do other things to make money.

You could get them a self-generated lead.

You could get them if they bring on accounts

that you pay them on that.

Every time someone sells a service agreement, that's an annuity for them them they make a little bit of that service agreement each month it gets paid so i didn't have to find all my pay and just one thing i was able to get the guys different types of money with different types of uh things heather meeker we are in need of vehicles for our pool care specialists i know I've heard you talk about leasing or replacing every few years to keep the fleet great. Do you have a specific company that you work with directly? Right now, I'm just Googling.
There are lots of options. But getting a recommendation from you would help the process.
So we go back and forth. We've used a couple of companies, Enterprise.
Everybody's heard of Enterprise, but they don't know they're one of the largest fleet companies in North America. So Enterprise, there's a girl named Tara there.
And then there's a guy at Holman, H-O-L-M-A-N. His name's Dave.
His number is 609-706-3471. He's good at getting vehicles.
What we do is lease to own these vehicles five to six years, depending on the lease. And then after the fifth year, it's like $5 and we own it.
We still get all the accelerated depreciation right now, 80% a year. Last year was a hundred percent.
I think it's like 6,200 pounds per vehicle. And just taking care of them because when you look at a graph.
Let's see if I can draw this. There's the value on the Y

X. and just taking care of them because when you look at a graph, let's see if I can draw this.
There's the value on the Y-axis, and then there's kind of the mileage and more the general repair. So you've got miles on the bottom value.
This is when it's worth the top. The day you buy it was zero miles, right? This is going to be hard to show you guys, but basically as you put more miles and the condition gets worse, and let's just say this is two years, these big fleet companies will tell you the maximum value you can sell the car for, recoup and buy another one.
And so it might be you paid 45 000 two and a half years later it's worth 22 000 and then you'll apply the 22 towards a new car that now it's not 45 now it's 52 but now you look at when is the warranty it's a three-year warranty with 90 000 miles well it's about to come out of come out of warranty. And that's usually when shit hits the van, right? It's right after the warranty goes away.
So understanding the way the game is played and they'll teach you is very, very important. Let's see, we have an HVAC company that's growing.
We did about 13.5 million last year and we'll do over 16 this year with double digit profit. I'm looking for a killer fractional CFO that helps take our financials to the next level.
Yeah, there's this guy. And if you go back to this podcast, his name is Ryan Tansom.
This dude's sharp. And there's several places that have fractional CFOs.
And it's just worth the conversation, right? 612-720-6530. Maybe text them.
I don't know if these people all love me giving out their numbers, but Ryan Smart, listen to the podcast we've had with them. But at your levels, you might want to think about starting to hire somebody.
I mean, even if you're at 10% at 13 and a half, you made about 1.4 million. And if it keeps going up, maybe you're at 2 million.
It's about time to start looking for somebody seriously. Ryan Davis, how do you lead a leadership team? Well, I think one of the quotes I have in the office is pretty good.
You know, there's no amount too great that you could do if you don't care who gets the credit. The one thing I talked about in my book, Ryan was that who gets fired if a soccer team, the Olympics fail, who gets fired if the NFL team is not doing their job, who gets really fired if a kicker for a NFL team doesn't make the field goals.
Usually it's a special teams coach. If every team offensive defense isn't doing their job properly, we get fired.
And we don't talk about that enough. The best way to lead, I think, is by example, and it's showing up every day, which most business owners, founders, CEOs, they don't show up a lot.
They don't want to be part of their own business. They've got a lot of ideas and they expect everybody to follow, but they don't want to fight in the fight every day.
They don't have important meetings. They don't take their guys to Mexico and you don't need to take them to Mexico.
Take them somewhere nice though. It could be a bowling alley.
It could be cooking with them. It could be like the outing we did, but a lot of people are really, we're very quick to point the finger instead of the point the finger back at ourselves and say, well, this guy didn't do it right.
This guy is not listening. This guy, there's a reason why.
You know, I was talking to one of my top guys in the company and he said, when we decide something, I just wish people would take us more seriously and just embrace our solutions. And I said, well, that's the biggest problem.
How do you make it their solution? They're the people in the fight every day. And if it is a solution that we collaboratively came up with, then let's have the discussion about why it's this way and make sure they understand why they're doing it that way.
After all, they're in the fight every day. How important is culture to a home service organization? Who drives it? If you have someone that can't your culture, how fast do you make a switch? Well, I've had this problem come up a lot.
It's not easy. Here's the ultimate question, Dan.
How long do you hold these people on before you say, I waited two years too long? The problem is most companies aren't always recruited. And I've kind of learned this from the president of the company, Dan Miller, is he tells everybody about who I am and how hard it is to work for me because I got a lot of ideas.
I'll call you on the weekends. I'll call you Sundays or at night.
I'm not going to get down and have a two-hour conversation about your feelings. It's not what I would consider corporate.
It's entrepreneurial is what he calls it. He tells them a lot about me and the culture and how close I am with a lot of the people here.
And that I do have a big heart so I don't just go firing people. You know, like Al says, it shouldn't be a surprise with the scorecards we have if you're not living up to expectations.
So that hopefully answers your question. But culture is everything.
Culture is what attracts people. It attracts customers.
It attracts vendors. It makes profitable.
It makes it fun to make profit, which most people don't find it fun because it is hard work. If it was easy, then every single company would be extremely profitable.
But when you can make making profit fun because there's an outcome for everybody, it's much better off. But the hardest part is firing a top technician that's killing it in sales, but taking advantage of clients.
You might not know they're taking advantage, but if they're like an outlier, you need to go do some ride-alongs and find out how they're doing it. And just make sure they're not rolling their eyes in meetings.
Don't think they, they shouldn't be able to take over control of your whole meeting. Trying to scale business, got a great coach, but I thought I would pick your brain.
I upped prices. I've hired another tech trying to get out of the field.
What do you do to overcome the fear? You know, it's weird because I didn't just get out of the field one day. I didn't say, I'm out.

First, I took myself off the schedule for a day.

And then I took my schedule for three days.

And I still did a lot of ride-alongs.

So when I was back into the field,

I was coaching and training.

And I was documenting standard operating procedures.

And I worked with guys on different things. If they weren't selling a spring pad

or selling bottom rubber or a strut,

Thank you. And I was documenting standard operating procedures.
And I work with guys on different things. If they weren't selling a spring pad or selling bottom rubber or a strut, I call it the garage door integrity package, which is the Airbnb struts.
You got to get out, but you can't get out to get out. If you're the top performer, you should be getting out to do more in sales and come up with more manuals and make sure everybody's trained.
It shouldn't be I'm getting out so I could get out and say I'm not working in the truck anymore. That's not a big enough why.
You say, if I was out of the truck, I want to see a list of like 100 things you're going to be focused on. Working on tax planning, working on budgeting, working on getting your financials in order, building the right manuals, building the right trainings, working on performance pay.
Don't just get out having a priority list of what you've got to accomplish because you might get out of the field and find out everybody's calling you because you've enabled them. You have not taught them enough to be sustainable in the field by themselves.
So that's the first thing is make sure it's sustainable to keep yourself out of the field and keep them in the field. How are you distributing your SOPs and knowledge? How do you make it easy for those in the field to access as needed? Paylocity is a place we have a lot of stuff.
We also have a learning management system. So we've got an area that they can find all the directories of numbers, they can find their manuals, they can find out their pay, how to do PTO.
All this stuff is built into a financial system. There's ADP.
There's a lot of great big ones out there. We use Paylocity.
That's a great way to make sure they could access them. And when you're doing a meeting, have them all access it at the meeting, make sure their logins work and make sure they understand it and can show you and sign off on it, saying they understand it maybe have them create a google doc or whatever they store their you know samsung notes or iphone and just put a quick sop have a build up like i build everything into shortcuts on my my home screen i just slide over but you got to make sure they know how to access that information let's see based on your knowledge what's the best comp model for a salesperson selling jobs for a commercial electric contractor? Is it percentage on gross sales or NOI? What percentage is fair for each? You know, I figure out pay structures based on where I want my EBITDA to be.
So without being able to back into it, like I said, it's really tough to build a compensation program without knowing the revenue and profit I need to be at. That's where it all starts.
If I want to do 10 million at 20%, I need $2 million of profit. So I got to take all these bills and I got to find out where it leaves me.
And if I can't get rid of costs, but what if I found out I could play with conversion rates and get my conversion rate higher and get my average ticket to an extra $100? Then I could afford to do that, right? So what if you just took all these numbers and built a quick, easy scale and said, if I motivate this, this gives me 22%. This could give me 24%.
So wait a minute, I'm paying more, but I'm making more profit. And it's a larger number.
But there's a point of diminishing returns where that won't always work. For GarageBridge, I can't say, I'm gonna pay guys a larger amount over $5,000 because the average ticket in GarageBridge is not gonna be five grand.
It's just, it's not possible unless you're doing more commercial applications. I know the average ticket in almost 100 companies in GarageBridge, and that's not realistic.
So have a realistic amount that your average ticket's going to be. And you back end into these numbers.
And I know this isn't beautiful, but if I knew your industry, I mean, my shit's evolving every day. And there's certain things that we were like, what were we thinking? And there's certain things we're like, wow, to figure that out that early.
That's why we had a huge headstart. Alchemy power solutions.
What is the best marketing you guys have found out to be for home service? We currently do water mitigation. I mean, going out there, getting a lot of reviews, getting on citation sites.
If you look up NAPS, name, address, phone number, making sure it's all the same across the board. I think when you're smaller, you know, if I was working on mitigation issues, I'd be talking insurance adjusters, insurance companies.
I'd be very strategic with getting a lot of jobs coming in on the regular. And then I'd make sure I'm just GMB, LSA, PPC, all of Google.
I'd find some really good mailers. I'd use a lot of data.
I'd say, okay, there's these tools that tell you when there's going to be a flood. And you should have enough clients to know based on, it's called regression testing.
You should be able to tell that these houses are more susceptible to leaks. They're this old.
And you probably want to hit them up more often when you know it's raining like, or whatever is going on in that area. I don't know your business once again, perfectly, but I'd be very, very smart on the way I spend my money.
And the first thing I'd go after is relationships and getting a great reputation online. Ryan Jantz, quick question.
What would you consider sustainable revenue for marketing budget ratio? I'm over in the Northwest Valley, surprise Sun City, Peoria, doing irrigation repair. Last 30 days, I've been running 13.8% of growth revenue through Bing, Google, Yelp.
Thoughts? I think 14%, I'd like to understand your attribution model. I think you're probably overspending a little bit, but I'd ask how much are you trying to grow? Are you trying to grow 40% month for month, year for year? If you're trying to grow 10%, 14% on percentage of revenue is too high.
If you're trying to grow 100%, you might be at 20%. So once again, I like to be around 10% and that's on a growth of 30% a year.
We missed our budget, but we realized there's certain things we've been spending money on that are not delivering. There's no attribution models that didn't have call tracking.
It was not tracked correctly. So fixing the tracking, knowing.
Hold your marketing, everybody accountable to say, this is what we're going to spend. It gets a lot easier as you grow, but there's still a lot of great people out there, but they're not easy to find.
You should have somebody internally helping you hold your marketing partners accountable. Because if you think you're just going to call up a marketing company when you're slow and they're going to save the day,

I've never found a company that we can't push on and say, we need help here.

We need you to help us this.

Here's our goal here.

And not saying, hey, we're slow this week, do something.

That's just going to cost a lot more money.

That's part of being a business owner.

JB said, I know you've mentioned the importance of maximizing the current customer database and the inbound leads, ensuring a high booking rate. What is your advice on how to structure performance base for the call center CSRs? How does the lead rehash work? Well, a few things for CSRs, right? Their booking rate's super, super important.
I think it should be based on how many calls they book. I want them to get customers on the phone and book them quickly.
And if they're not a lead, get them out very quickly and have a department for that person to handle. Because my top agents can make a lot of money if I'm paying them 10 bucks a book phone call, and they could do an average of 3.8 an hour.
That's 38 bucks an hour. Now, the CSRs, I could get into a lot more of the weeds here.
But it should be a booked rate and how much the volume is. And then there should be something to listen to make sure they were following protocol and there was empathy.
Like literally checking on two out of five calls, which is 20%. I'm sorry, two out of five would be 40%.
But 40% makes sense. Listen, keep them accountable.
Every customer, see, we really care a lot when a technician gets a zero, it pisses us off, but we don't pay enough attention to a CSR that said, it was a parts call or, oh, that wasn't a wrong number, whatever it was. It's like, you should care more about the CSRs than anything.
They're the guys going into battle first, making the first impression on the customer. So what kind of personality profile do you use? We're using Jonathan Wistman, Predictive Predict.
I like that. And then we obviously use the most common one, Disc.
Don said, I've owned and operated a cleaning business for the last 20 years. I started out with window cleaning as my primary service, but ended up migrating to gutter cleaning in 2015.
I have netted six figures over the last three years, but I need to do better. I want to learn how to build a business the right way.
Where do I go from here? Oh boy. Well, I think most of the stuff falls into marketing and marketing goes back into hiring because marketing is getting the right word out there to attract the right people.
When you've got these, these simple KPIs, listen, if you got high conversion rate, high average ticket, I mean, it doesn't need to be a high average ticket. It just needs to be above average in the industry.
And you've got the right marketing and you've got the right call center. All it is is putting things into the funnel.
How do I get more clients into the funnel? There's a lot of books. It's hard to just tell you a couple, Don, on what to read.
But I think a lot of times, and by listening to this podcast, some of you probably get confused. Some of you are like, I don't know where to start.
I don't know where to go from here. But once the reporting's right, you'll start getting annoyed when you see a big problem.
You'll go, holy shit. You know what Nextstar does is when you give your financials to Nextstar and some of these best practices, big groups, they'll show you where you should be for your industry.
Now, Nextstar doesn't do that, but very soon I'm going to be announcing some stuff that's going to be absolutely amazing in about a dozen different industries. And we're going to help people know based on their balance sheet and income statement and profitability and marketing and direct labor and gross profit.

And I could go on and on where they should be,

what the best of the best are doing.

And some people are going to go,

that's not even possible.

It's because they're efficient.

They're using technology.

They don't have anybody out there reconciling because the CRM does that

automatically.

They don't have a lot of people running all these expensive reports because

they let the software work.

The more efficient you get,

the more profitable it becomes and the more nice things you can do for your

employees.

Thank you. don't have a lot of people running all these expensive reports because they let the software work.
The more efficient you get, the more profitable it becomes and the more nice things you can do for your employees. If I can't afford L.A.V.'s manuals, what can I do on a budget for SLPs? That's a good question.
There's samples out there everywhere of like your tardiness, your attendance. If you're sick, if you can't show up, if your truck breaks down, if the tattoo policy, if you can't go through and figure out really what your general handbook should look like, I mean, you need to take something that's out there.
There's already a ton of them out there, but then the people need to read them and understand them. And that's even harder because that starts out with a leader.
I can't give you an exact budget of what this stuff should cost, but I think learning the process and how to build it and actually being involved in getting it done, that's one of the things I'm still working on. Like I've really inserted myself back into who's in charge, where's the SOP.
We're going to be looking for more things to be done overseas. Things more systematized with APIs, connections.
So we don't need a human being doing it. AI is part of the equation now.
So I don't have a budget, but I would definitely say it's not necessarily a monetary thing. It's more about how much time are you going to take to write down every time there's an effing issue and a problem within your company of writing it down and say, what was wrong with the system? And how do I build logic around these to make sure this doesn't happen again? And where's my checks and balances to make sure that doesn't happen? We built our HV company, Air Sharks, with a very high quality of standards and best image a startup can have.
Been in business now for two months and we have 85% closing rate. Where would you recommend investing marketing campaigns first? Direct mail worked well comparing to Yelp.
Direct mail? Direct mail is quick and easy. Yelp takes a lot of time, so does Google.
Organically on Google, I spend a lot of time and energy making sure I'm getting links built and making sure I got a beautiful website. Make sure I got my vehicles wrapped.
Make sure I'm leaving yard signs. Make sure I talk to the neighbors when I'm at the house.
Make sure I'm getting reviews on Yelp, Google, Nextdoor, Facebook, video testimonials. Make sure I'm updating the website.
Make sure I've got a YouTube channel. I mean, I started all this stuff when Yelp just started.
Google wasn't even really on the map hardly. So I got to start from the beginning to play catch up.
You need to get more from every customer. I'd probably knock on the neighbor's door.
I'd say, listen, I'll give you a free filter. I just want you to know who to call when you do have an issue because your neighbor's just broken.
The house were installed eight years ago. I just want you to use me.
When you're growing a business from the beginning, you need to get into every house. You need to do things you wouldn't normally do.
Sometimes you got to do things for less. Sometimes you got to be, and I hate to say this, but two months in, sometimes you got to be the guy willing to do it for a little bit less because you don't have as much overhead.
I'm not saying give the unit away. If you're selling it for like six, seven grand, you're not doing it right.
You should be selling it 10, 12, 15. Some of the bigger companies they know are going less than 20.
And some people say, we can't get that here. Well, I guarantee you, if I looked at 10 companies in your market, you could get it.
You're just not selling right. You're not offering them a complete solution, which means all the insulation.
It means to be able to turn their unit off when there's no motion and how it's going to save them money. So I'd say 85% is good.
I think tapping out LSA is great. I'd say getting a lot of reviews, putting your hours of operation, adding pictures to your GMB is a must.
But I always go back to the basics. People go to Google when their shit's not working.
I joined a BNI group. I'd go to the chamber meetings and probably get heavily involved with the BBB.
And I think right now it's shaking hands to me and the people is going to help you the most. What's up, Tommy? Love the book Elevate, not finished yet, but we love it here in the office.
Awesome. Thank you, Frankie.
Shane said, how is your employee ownership structure, program structure looking implemented in the next six months? I kind of explained it earlier. It's called an equity incentive program.
It's just what PE companies do. You got to be very careful who you issue to and how you issue.
I think I'm going to have a whole podcast on this because I've been getting a lot of questions about that and performance pay. Those seem to be the really two large ones.
Any business coaches you'd recommend? You know, it depends on the industry, Frankie. There's a lot of great ones out there, but it's one of those things where you get what you pay for a lot of the time.
Different industries, different things, but we're working on some stuff right now in the back end. Just the simple things, a business plan, budget, accountability, where you

spend your time, time management, getting the right people to help, using the right technology,

understanding the right tax code, understanding how to do your taxes correctly, how to line up

a loan, how to do an equity incentive program. We're putting all that stuff together right now.
To be determined. It's coming out soon.
How are things going in Charlotte? Slow and steady. You know, it's a great market.
I think really what we're doing now is going back to some of the else's questions. As we're double downing on the markets we're in, we're looking for any opportunities to partner with anybody in those markets.
I think the main thing is, and I told this to a couple of my managers, my area managers, is you want to triple this market? Bring me two companies that want to retire. Shit.
They're everywhere. All I got to do is go and meet the people and say, listen, there's not a lot of buyers out there right now.
You look at the market and it's definitely down 20% of who was selling and why. But there are a lot of people that want to get out of the market.
And that's one of my plans in Charlotte. If you know anybody who wants to sell in any market that A1's in, definitely let me know.
I don't, I see many electrical contractors growing as big as HVAC and plumbing. Why do you think that is? Well, if you think about electrical and plumbing, there is such a high demand for HVAC and furnaces sometimes, but a lot of HVAC.
I mean, they go out quickly. They're not sustainable.
They have a lot of issues with them. Same thing on a car.
I mean, how many people have HVAC issues versus electrical issues? I do think a lot of people have electrical issues. They just, it's not something where they really, your HVAC doesn't work.
It's not blowing cold air. Your toilet doesn't flush or the shower is flooded.
A lot of people will go, the fan doesn't work. Okay.
you know what's interesting is my cto jim leslie said he had his power out for two days and he said he called to get a um a generator and he called five people in pennsylvania nobody called him back the big dogs and he never got one but i think there's a lot of electricians ailes work with plenty of them that are making a fortune mr electric those guys are doing great i think what they figured out in hvac is they needed plumbing and electrical to help subsidize them in the slow season nobody says you have to replace your electric today unless you're selling the house a lot of people have old fuse boxes and stuff they'll live with it until they won't Until they sell it or until they find a big enough issue where they got to rerun the whole house. Maybe it was with copper or something.
But I just don't think it's a big enough problem where they're like, I can't live without it. Whereas plumbing and HVAC and garages, you can't go without it.
Electric, if it's completely out. But there's always a fix.
Sometimes people lie and they say, we can't get this stuff anymore. And maybe that's true.
Maybe it's completely out but there's always a fix sometimes people lie

and they say we can't get this stuff anymore

and maybe that's true maybe it's dangerous

maybe it's code maybe it's just it's going to burn down

and that's when you get it but a lot of people

just they're not willing to spend the money it takes

until they can really understand

what the ramifications and opportunities

are for that

is your performance pay

set up under pro rata cash plan

if so can you talk about the structure

Thank you. and opportunities are for that.
Is your performance pay set up under ProRata cash plan? If so, can you talk about the structure? ProRata cash plan. I'm not sure if I'm following it, but basically there's different performance pays.
Now we give a minimum per hour, but ultimately my main goal is that these guys can make six figures. Now, I'm not there with CSRs and I'm not there yet with dispatchers.
But what ends up happening with technology and what we're working on is we're going to create a system where these people can make $60,000 to $80,000. Right now, they can make $60,000, $70,000.
But I want them to get to $80,000 to $100 a hundred. And there's the cash side of it.
And I don't understand really pro-rata is yes, there's different levels. But what I would tell you is my main goal is that to make all these guys marketers, make them posting all over social media, get them to go to a BNI meeting, no matter where they live.
I've got CSRs, technicians, installers all over the country, is to actually teach them how to get jobs. Maybe they have a wife at home that's a real estate agent.
Maybe their kids are in soccer and they know all the moms and dads in the neighborhood. Maybe there's an inspector in the relationship or family.
If you teach them how to get leads for you and they can get 10 extra leads and make $80 a lead, that's 800 extra dollars. So I think coming up with a performance pay and other avenues that everybody could win, who cares who gets the customers? I don't care.
I pay them. I can pay Google or I can pay the people that I get to work with.
I'd rather pay people I work with. What is more important, having system in place or having the good people? The system.
System all day long. Because if you've got great people and that great person walks out or hits the lottery or God forbid something happens or they retire, what good is that person? Build a business around systems.
The right systems will get the right people. Well, having a system to do a background check and checking the DMV and doing the drug tests, that's a system that makes sure we don't get felons that are on methamphetamines driving under a suspended license.
These systems get the right people. Of course, great people.
You need to have them. But hopefully the interviews, the personality profiling, the backgrounds, everything we do, taking them to dinner, finding out the relationship they have with their family, getting them motivated, being a great coach.
I don't care if you got the best players in the world under the wrong coach, they're going to fail. With techs, CSRs, and dispensers, you have to keep track of so many things.
What are you using and how does the process look like? Service time reports to Excel, paper sheets filled out by managers. Over the call center, we used a business intelligence tool called Grow.
I'll tell you what, we've got an analyst, Leanne, that just started. We got another guy, Spiro, that started in Detroit.
We've got probably 20 people working on reports. 20 full-time people that their whole job is to get these reports, to make decisions based on facts.
So there's a lot, a lot. Let's see here.
I bought Al's manuals, and I'm a chimney sweep HVAC guy. I've been incorporating a lot of your books and your book processes from Elevate.
Awesome. This shit doesn't happen overnight, guys.
It starts with an idea. Then the idea gets implemented.
No one's going to walk in and say, wow, the culture has really gotten better in here today. You know, someone told me, if you don't build your culture,

your culture will build itself.

So if you don't plan on it and how 360 reviews and getting back with people, and listen,

I tell everybody this all the time.

I've got a lot of work to do, lots and lots of work.

If you guys walked in my office,

and I let people come in here all the time,

they're like, wow, you've got a lot of issues. I thought you had it all figured out.
I say, no, no, there's always going to be issues. I don't know of any company without issues.
My issues are great issues. I'm not wondering who's going to show up to work today, but shit trucks get in accidents.
You know, stuff happens to people. A bad review does come in from time to time.
It's inevitable. The suppliers don't have stuff at certain points.
To pretend that this business is not going to have, I'll tell you what. I do believe that in the next 18 months, I'm going to have to do very, very little.
My job, see, I'm always thinking growth and to think the kind of growth and acquisitions and what I want to do to an industry and just home service in general. If I wanted to grow slow and steady for 30% a year for the next 30 years compound, I could probably do that, but that's not my target.
I don't want 30 years. I don't want to be doing garage doors when I'm 70 years old.
I mean, I just don't. I mean, that's just not what I want.
Make sure your customer experience is dialed in. Gary said, I tried to scale and was doing good.
It was working itself for a year. Then it turned on me.
Now at the point where I can't make payroll, I had to get a hard money loan that is a daily percent. All right, Gary, when this happens, it's called the death spiral.
And when you're borrowing money just to make payroll, you're going to have to make some judgment calls because you can't go too far in debt or every single great employee you has will lose because there'll be a time where the money's not available anymore. So I always had a backup plan.
There are times where I had to write myself a check, whether it was out of my LPL account or an escrow account in my house, an equity check, whatever I had to do, because I didn't have the right reporting. But right now you're going to have to make some cuts.
And it's not marketing. You go back, you bust your ass.
You're in a situation where if you do this right, you can come back out of it. But if you continue to borrow money to make payroll and you do not get rid of the people that aren't AAAA plus, you're going to find out you're going to be giving your money away for very, very, very cheap.
Right now, I try, if anything, and I don't know how old you are exactly. I mean, we need to talk.
That's all I can tell you is before it gets out of control, which it's already started to do, you're going to need to figure stuff out quickly. And if it's a small business, only been around a short amount of time, but if you've built a lot of processes, you've got great people.
I don't know how many people there are, but I got a lot of questions. Hi, Tommy.
Struggling to find the right financial performance-based incentive for my pressure-washing technicians. Well, how do you make money? If you're paying them hourly, you can't have them taking their time.
I had the same thing with Grosvers. So they got to be efficient.
So I'd have your current pay scale and have the other one and say, if these guys are hustling, getting you a couple of reviews, a video testimonial, proof that they put a yard sign out, they're moving, they're talking to the neighbors. They're being efficient.
There's a lot of opportunities versus hourly pay. Hourly pay is like, hey, why are we going fast? Who cares? What? He's going to make more money if we get to the next job.
There's nothing in it for us. So really sitting down and understanding what are the possibilities? What are they making now? When I've rolled my CSR performance pay, we saved a little bit of money.
Within a month, we were spending an extra 10%, but the booking rate went through the roof. So the extra 10%, when you went from a 40% or whatever it was, 70% to 90%, with the call volume I had, it was just like, holy shit, this is the best investment I've ever thought possible.

But in the beginning, it actually paid people less than three people quit.

The same day the performance pay came out, three people quit because they were never

going to survive when their performance was on the line.

What percentage of sales would you reinvest?

10% minimum, 20% if I'm growing, 5% if I'm just dialed in and just trying to maintain. What are some good financing companies? Good Leap.
It is amazing that we pay to finance and the auto business gets paid by the finance company. I get that they can't repossess HVAC or garage doors.
When you buy a car, there's a lot of different things going on there. Trust me, the vehicle companies, they still pay out depending on, look, my buddy Chad did this for 10 years for Wells Fargo.
You've got an underwriter saying, does this guy have a job? Can we get a payroll history? Can we get the wife to co-sign? They're making sure everything, look, there's a credit rating that there's not a whole lot of chances of it falling out, but they look at how much equity you got in the house. No one really does that for houses because it's attached to the home.
And that's a great point, but I don't really know why that is. There's repossession, but I don't think I'd ever, as a financial lending institution, without dual income and a long job history and all kinds of other stuff, have you ever defaulted on a loan? I'd be looking at a lot that they look at.
We're a local here in Phoenix for retractable shades and awning sales and installs. We spent about $100,000 a month in ads

and just seems stuck at about $8 to $9 million a year.

And I would like to break that eight-figure mark,

but it just seems like it's not possible.

Only thing we don't do is billboards.

I see your stuff all over.

Do those actually work?

Well, when you got the right conversion rate average ticket

and the right cost per acquisition on Google

and you start doing TV radio billboards,

Thank you. Well, when you got the right conversion rate average ticket and the right cost for acquisition on Google and you start doing TV, radio, billboards, I've never talked to a company that broke $10 million without doing personal branding for their company.

So I would tell you, yes, it actually works.

Will it work in six months?

Hell no.

It's an investment and it's got to continue and you've got to have metrics. I'm actually working on a new equation to find out exactly when we do this in every market.
You know who Rafi is. He's a good buddy of mine, Brandon Rafi.
He's all over the place. If you saw this guy's advertising, I mean, he's a wizard.
He's showing me what needs to happen and he needs a 70% conversion rate of every call that comes in, he needs to do 70% book rate. He goes, when I went from 59 to 70, that's how I was able to pay for everything.
59 to 70% changed the world for me. So what I would say is I'd look into your books and the fact is that you spend a hundred grand.
So you're spending about 10% if you do about $10 million. I'd like to know the attribution model.
What are you paying for that's working? Maybe you're doing a bunch of neighborhood stuff. Maybe you're giving some soccer teams 10 grand.
Unless I know what you're doing, I can't tell you if it's working. But if you don't have attribution models for every lead source, TV radio billboards, you should see everything else go up.
Your Valpac should do better. Your Clipper, your Welcome Home Arizona, all that shit should do a lot better when you're doing TV radio billboards, but it won't happen overnight.
And here's what'll end up happening. When you do it for about a year, people will start walking in and say, I see your stuff everywhere.
I'm just going to go with you because you guys, you got the new bands, your technicians are always smiling. And then someone else is going to walk in right after them and say, listen, I want to come work for you.

I'm the best of the best at AY, you know, ABC company, one of your biggest competitors.

I love what you guys do.

I love that you're advertising because right now our company is slow on leads.

I've got a couple guys I think I can bring over.

Let me show you what I can do for you.

And you'll be surprised getting the right people. Those billboards are going just as much after amazing people in the company as they are for clients.
Dropping in amazing knowledge is what I love doing. So thank you.
Can I use AI to answer customer questions? Yeah, you could actually build AI to learn. You could have it follow.
We're working on A right now, answering lots and lots of questions.

And we're building all the answers.

So yes, AI could basically learn how to do a lot of things.

Have you found that having a fully stocked shop

and a system to restock vans every morning

can help your billable efficiency

and average tickets?

Well, there's a guy, his name's Dave, and it's called four seasons it's an hvac company in chicago and what he does is there's companies out there that'll actually stock all your stuff for you in the hvac plumbing world and so he built it so that you drive through everything stocked it goes through a car wash the guy's ready to go while this is all going on, his guys are in a meeting for the day talking about what's important. Just like when I was a server or a bartender, we had a huddle before the shift started on what was important that day.
What was the soup of the day? What kind of alcohol are we pushing? We should be doing the same thing as a home service company. So if you guys are there getting ready all day, I'd have a full time warehouse guy.
I'd have them work a night shift, getting everything ready or get in there four hours earlier and have it all in and out. They should not be spending a lot of time getting inventory.
What do you think about social media marketing for service-based businesses? I have an appliance repair business. I think social media works.
I was talking to Grant Cardone or Gary Vaynerchuk and he goes I would never do billboards he goes it would take me 100 different tests but I think social media could outdo it the one thing about social media is it's got to be visually stimulating it's got to be an awesome picture you've got to have something on there that says no money for two years it just needs to stand stand out. It needs to be something that's interesting that I want to watch it.
I think social media kicks ass, but it has to be cool and you got to get the right audience, right? The right target audience is everything. If you're showing everyone to everybody, there's no way to win.
I always wondered, why are you out buying all these companies instead of advertising more in those markets and taking more business from them where their techs come work for you? Seems more expensive to buy these guys up when you could just take them over. Well, think about this.
This company's been around the block for a long time. They've got all these old invoices for 35 years.
They've built a good name. They've got great reviews.
They've got technicians. So it's a speed thing.
I know I could go in a greenfield market, but there's no way to take over a market as quick as I could buy somebody. What if I find out their booking rate? They're not open nights or weekends.
The conversion rate is crap. They don't know how to do service to sales.
They never sold a service agreement. And I could go in and on the second year, I could actually make money.
Well, I basically used everything they built for the last 30 years and actually operated effectively. I talk about this in the book Elevate.
I think you need to do both. That's my answer.
You could also go to a network and action meeting. We're all over the country.
Network and action, that's where it's at. Kathy said, come to the network in action meeting.
Jill's office can help with CSRs. Absolutely.
I see you everywhere in Tulsa, Oklahoma. I can't wait to come see you.
We'll chat soon over a few things. I need some help with performance pay with scorecards.
Awesome. You're the shit boss.
Appreciate the opportunity. You've given to myself, my family.
Thank you. I appreciate you.
Tell us how you opened your first additional location. That was Tucson.
I could get there quickly. I hired a great guy.
Small. Barely.
Look, Tucson, then Milwaukee, then Las Vegas. We're talking.
I'm building the dream way to build. Now that I'm talking to all these PE companies, I'm kind of patched in.
You know, you look at a company like Window Nation, they never bought any companies. They greenfielded it, but they started marketing there two months before they were even boots on the ground.
They were having home shows. They were doing all this stuff.
So I'm taking all this data and I'm building new plans, new ways to do whiteboarding a lot more getting the right people on the bus like Jim Collins says but second location make sure your first one is 10 out of 10 super tight do you have a team during your M&A right now I got three full-time people in charge of corporate development three full-time people then a full-time controller in that department. And then I've got a whole legal team.
So no, I mean, yeah, I find some quite a bit and people take my calls. But the best news is when people partner with us, they get paid, their team does good.
We do the best we possibly can. And I see a lot of companies, you can't just buy a business because you're dealing with two different cultures.
You got all kinds of stuff. You're taking over a mess of marketing.
They might have liabilities out there. That's why you do an asset purchase only.
There's all these things that need to happen. Trust me, unless you're very, very advanced and have over 50 employees, do not go into acquisitions, period.
But I've been getting a lot of good things about the book Elevate. Hopefully you guys get a chance to read it.
It's elevateandwin.com. We got some really cool stuff coming out.
So your first week of November, plan on just marking that off. I'm going to need you hanging out with us.
I'll have more details to come, but lots of fun things happening. Literally, I think we're going to change the whole service industry.
I've just been compounding the information I'm taking in. Like I said, two EAs, one personal assistant, new facility at the house, building a recording studio.
Just getting started, like I always say, but I love all the questions. Keep sending as many questions as possible.
I think I'm going to have to write a book on performance pay and an equity incentive program at the end. I talk about CSRs, dispatchers, technicians.
I think that book, if you guys like the idea of that book, comment down here what else you'd like to see in that book, because charging the right prices, like Alan Rohr put, what should I charge? Paying the right performance pay, coming up with an equity incentive program. Here's what's nice about having this podcast.
There was over a hundred people on here earlier is that you guys tell me what you need. Obviously I'm reading these questions and I'm going, this is where we need the help.
So you guys are amazing. A lot of you guys have my cell phones.
If you need anything, let me know. Keep asking great questions.
The questions page, if you don't know where to go, write this down. It's homeserviceexpert.com forward slash questions so homeserviceexpert.com forward slash questions order the book elevating win.com and if you want to know the key takeaways from this podcast doesn't cost you anything it's homeserviceexpert.com forward slash bonus that's where i'm going to have all shortcuts, short notes, cliff notes of all the podcasts.
If you're busy and you just want to check out what was important to one of the podcasts, trying to make this easy for you. So thanks guys.
You guys have an amazing day. Go out there, make a profit.
You're allowed to and have fun. Enjoy your Monday.
Thanks guys. 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 that helped 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. Thanks again for listening,

and we'll catch up with you next time on the podcast.