How to Make Your Business More Profitable And Find True Financial Freedom

Speaker 1 Most people won't be able to tell you what their capacity is per person, per truck. So, how on earth could you have a CSR fill it?

Speaker 1 How can you have a dispatcher fill it if you don't know what you're capable of? And I think it comes down to one of the things that we love to talk about, which is pricing, right?

Speaker 1 You're not priced right, or if you don't know where you need to be priced, if you don't know what your break-even point is,

Speaker 1 then you're never going to get ahead. Every day, you're just starting over.
It's like Groundhog Day.

Speaker 1 And I feel like there's so many business owners out there that can relate to that, where you're like, at the end of the month, there's nothing left.

Speaker 1 At the end of the week, there's nothing left and you don't know why.

Speaker 2 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.

Speaker 2 Now, your host, the Home Service Millionaire, Tommy Mellow.

Speaker 2 Welcome back to the Home Service Expert. Today, I have a really good friend of mine.
She's an expert in a lot of things that I'm going to go over.

Speaker 2 Megan visits us from Davis, California, and she's absolutely killing it. She's got a lot of stuff to talk about today.

Speaker 2 She's an expert in small business, consulting, tax preparation, payroll, bookkeeping, and all kinds of good stuff with HR.

Speaker 2 She's the co-host of Fight Club for Business Partner podcast. She's the founder from 2017 to present, Bookkeeping Academy Online.
She's the owner at Lek's Accounting Company.

Speaker 2 She's part owner with her and her husband of Jeff Lek's Clean Windows and Gutters and Meg Lek's Balanced Books Owner.

Speaker 2 She's a small business accountant, consultant, speaker, teacher, and volunteer with nearly two decades worth of professional experience.

Speaker 2 Founded Booking Academy, an institution that teaches small business owners how to use QuickBooks Online.

Speaker 2 to capture and organize their expenses so they can understand how their business is doing financially. She owns five businesses in Northern California.
Her favorite is now

Speaker 2 window cleaning business. She's the third fastest female window cleaner in the world and spends about 10 hours a week volunteering and 20 hours a year traveling around the world.

Speaker 2 Megan's passion is educating and empowering other business owners across the world to find financial freedom in their own lives.

Speaker 2 She will teach you smarter ways to make money, save money, and inspire you to give back in meaningful ways.

Speaker 1 i never know where you find this stuff like i tried to write you a shorter one make likes balance books that's like in the closet buried like a long time ago before i was even a likes fun stuff i like it

Speaker 1 well tell me what's going on what's new with you what's the plan here what do you got going i think we're gonna talk about profitability i think we're gonna talk about financial freedom i think we're gonna talk about leveling up and elevating what do you think There you go.

Speaker 2 Well, that's the good word. So what's going on as far as just new with you? You're killing it in the window gutter business.

Speaker 2 I know you're coming out with some new stuff, some new trainings, and you're just trying to give people a good foundation.

Speaker 2 Financials are the most important thing in a company. I can't tell you enough about it.

Speaker 2 I didn't know that until I worked with Alan and Gail, and she contributed to my book before I met you, The Home Service Millionaire. But it's just...

Speaker 2 Without great financials, a good CFO and a controller, I found it really hard. A good bookkeeper is okay if they give you the right stuff, I guess.

Speaker 1 Yeah, I feel like that's something I've struggled with over the past couple of years.

Speaker 1 So what's new with me, we came to vertical track in May, and I feel like that was a game teacher for the window cleaning business.

Speaker 1 So I don't know how I feel about a plug for vertical tracks, but a plug for vertical track October 13th and 14th, because my husband Jeff and Tommy just became friends like in the past six months.

Speaker 1 And seeing your shop really helped Jeff be like, wow, it's just about being in a room with bigger-minded people, right?

Speaker 1 I think when you get stuck in your industry, like at our window cleaning conferences, it's pretty common to be under a million. Like it's really rare to get to 3 million.

Speaker 1 And then when you sit in a room like vertical track, you're like, well, why not a bigger number? Why not 10 million? Why not 15 million? Why not 50 million? Like, how do you get there?

Speaker 1 And so I've been thinking a lot about what do I offer to the industry and how do I offer it? And I got some clarity over the past couple of months.

Speaker 1 So I used to talk about bookkeeping because what you just said is so true. Without good data, you can't make good good decisions.

Speaker 1 So I felt like my service to the home industry world was to clean up those financials. And we can absolutely do that at Lekk's accounting company.
We can help you clean up the financials.

Speaker 1 But what I'm realizing, the secret sauce is really putting financials to work. And a lot of business owners, even when you have bad books, you still have good data because you probably have a CRM.

Speaker 1 And even if you're not on service titan, even if you're on something smaller like HouseCall Pro or Jobber or something like that, or I don't know, there's a million of them out there depending on your industry.

Speaker 1 You likely know how many customers you served last week, how much money they paid you, and you can figure out some basic metrics from that information.

Speaker 1 So I don't know, I've been nerding out about a bunch of other numbers that are outside of regular books. That's what I've been doing.

Speaker 2 Yeah, well, I'm excited to talk about profit and freedom. Pat Clark was in town.
I spoke at his sales summit. and he kind of gave me the lowdown.

Speaker 2 I just was interested in kind of soft washing, power washing companies, trying to get the scoop of why there's really not been much consolidation in it.

Speaker 2 And then he told me what a good company looks like. It's a million dollars.
And for me, a good truck is a million dollars. And I'm not belittling any industry.

Speaker 2 But when he told me what Christmas lights were like, that's where I was like, no, because my second year, we did 5 million in Christmas lights.

Speaker 2 So what I figured out is for them, it's a marketing problem.

Speaker 2 They don't keep their trucks packed each day. Their conversion rate's where it needs to be.
That's one of the best sales sales boosts is amazing.

Speaker 2 So I figured out certain industries are weak in marketing. Certain of them are weak in sales and conversion rates.

Speaker 3 You know, they told me.

Speaker 1 I feel like most people won't be able to tell you what their capacity is per person, per truck. So how on earth could you have a CSR fill it?

Speaker 1 How can you have a dispatcher fill it if you don't know what you're capable of? And I think it comes down to one of the things that we love to talk about, which is pricing, right?

Speaker 1 You're not priced right, or if you don't know where you need to be priced, if you don't know what your break-even point is,

Speaker 1 then you're never going to get ahead. Every day, you're just starting over.
It's like Groundhog Day.

Speaker 1 And I feel like there's so many business owners out there that can relate to that, where you're like, at the end of the month, there's nothing left. At the end of the week, there's nothing left.

Speaker 1 And you don't know why. And I think Tommy addressed it in two ways.

Speaker 1 I did a spreadsheet that I'd be happy to share with any listeners if you wanted it that was like, how do you take a pressure washing company to 15 million? It's just a math problem.

Speaker 1 Like, how many leads do you need? How many texts do you need? How much do you spend on advertising? How much do you spend on recruiting? It's a pretty simple exercise. And I think you're right.

Speaker 1 I think we need to think bigger. And that's for me, that was a huge thing about vertical track.
Like, Jeff just came away and we brought our field supervisor. We did training.

Speaker 1 And it was like, huh, yeah, our industry's been thinking too small. And I feel like you had a similar epiphany with garage stores, didn't you?

Speaker 1 Like five years ago, 10 years ago, and you were like, huh, where were HVAC was 20 years ago, right?

Speaker 2 Well, HVAC 30 years ago, 91, I feel like we're ramping garage drawers up too. And I'd love for you to sell that $50 million spreadsheet with Pauline.

Speaker 1 Yeah, I'll get it to Hannah.

Speaker 2 And we'll get that on this podcast. So if they go online to home service experts to your podcast.

Speaker 2 So the problem I have with, you know, garage doors back in the day before I really got into it, and right now window washing and power washing and gutter cleaning.

Speaker 2 is people go into it to make a living. They like $200,000 a year.
They don't understand the simple simple concept of they're allowed to make six figures and the company should still be making 20

Speaker 2 and then they don't understand performance pay and they don't understand the principles behind it and it's not because they're stupid it's because they've never been around it they've never seen it it took me traveling to every hvac shop in this country that does over 100 million literally to get the principles and the fundamentals but i needed the dream bigger And I needed my mindset to change that.

Speaker 2 This isn't for a living. This is to build an incredible company to build a lot of people up that are allowed to make a lot of money.

Speaker 2 One of my guys just bought a sixth rental in Wisconsin, six rental houses, and he's a senior tech here.

Speaker 2 So it's important to understand this concept that people need to make six figures when they work for you. You need to make six figures and the company still needs to make 15 to 20 percent.

Speaker 2 Now, people are like, that's not possible in my industry. And I tell them bullshit.
I tell them you're wrong. You're dead wrong.
And I'll prove it to you.

Speaker 2 Any industry, I can find a leader that's doing amazing things.

Speaker 2 And I'm not trying to be condescending i just i don't like the victim mentality and i'm not okay with it this podcast is about financial freedom it's about finding the rolodex to help you grow you know some of the people you've had on it levy was a big mentor of mine but you've had people on darius liver is just king of financials oh my gosh we got to go visit him i wish we would have recorded it but fight club went to go visit darius it was so fun he's a hoop and he's done amazing things at fh for have you ever seen his rocky video?

Speaker 2 No.

Speaker 1 Okay. I feel like we should text him and ask him to send it to you.
It's amazing. Okay.
So I want to back up just a second because I know you've got a lot of listeners.

Speaker 1 Like there's a lot of people that look up to you. And if you just heard that, like we're not saying you're a victim.
We're saying you have a poor mindset.

Speaker 1 We're saying you're thinking too small and you've got to get in a room with people bigger than you. I mean, I feel like that's what I love about Vertical Track.

Speaker 1 And this is not a commercial for vertical track, but it was the first time that Jeff, my husband, he grew up poor, right? His first goal in business business was make to make $100,000. Gross.

Speaker 1 And then you killed it. You can do that.
We would just watch Brandon Vaughn do that in his like fourth month, right? You can do that in a month. So then it was like, okay, let's do it net.

Speaker 1 No. Okay, now let's do it owner salary.
No. Like you just have to keep stretching what's possible and you have to get around people who have already done it.

Speaker 1 And you start to realize like, wow, this is achievable. This is a math problem.
We just have to dream bigger. We just have to think bigger.
And I like this fixed mindset comparison.

Speaker 1 I think you and I both love this book called Mindset by Carolyn Dweck.

Speaker 1 And it really separates like those who want to be learners and those who just, like you said, get stuck because, well, nobody else is doing over 3 million. So how could I? It's impossible.

Speaker 1 It's not impossible. It's actually quite easy to do.

Speaker 2 Well, Megan, our second year in business, I told Johnny we need to double our prices in the Christmas light business. And he said, I got to meet him.

Speaker 1 I think I texted you. I got to meet him the other day.
It was so random. And I could not meet him through you.
It was so weird.

Speaker 2 You know, Johnny's grown up. Like, I'll tell you what, before we thought, man, this guy knows Christmas slights, but he's amazing.
And what they've done with the business is remarkable.

Speaker 2 Like, there's no credit for me. But what I will say is looking at the stuff, I realized we were losing money.
The one thing I know I could do is I could bring leads in, like, nobody's business.

Speaker 2 And, you know, we used A1 as we recruited there. We trained there.
It was a tough business. I thought Christmas slice, what could be easier? And it wasn't, but

Speaker 1 right? It's like get off the roof or something.

Speaker 3 Stayoff the roof.com. Yeah.
Stay off the roof.

Speaker 1 That's right. It's a super cute name.

Speaker 2 But the fact is, what we needed to focus on, and I just want to be very clear because there was a question about what you would do in marketing. Number one

Speaker 2 is where are the people? They're on Google or they're on social media. So you dominate those two things.
And I mean completely dominate your $10 million market in softwashing.

Speaker 2 No one's ever heard of it. So next year I might take it upon myself to prove it.
But I'll tell you this. I want to get rid of the naysayers because I can do it in garage stores.

Speaker 2 I can do a $30 million business in one market. I'll do a $50 million market in Phoenix next year here.

Speaker 2 And there's some certain things. Marketing is three levels: it's recruiting for people, customers, and partnerships.
You get good at those three, you're a multi-multi-millionaire.

Speaker 2 But let's dive into really what we're here to talk about. And that's profitability and freedom.
And I think this is a great subject.

Speaker 2 So you have five businesses and they're just in accounting.

Speaker 2 So

Speaker 2 number one is

Speaker 2 why start your own business? What caused you to say, I'm sick of working for somebody? It's a lot of work. Most businesses don't survive.
The majority of businesses will fail, period.

Speaker 1 75% of businesses fail in the first 15 years. 75%.

Speaker 1 Like, that's just haunting, right?

Speaker 1 and I agree it's not easy it's not fun why do you do it I feel like everybody starts a business for probably the same three basic reasons right they want to make more money because they think that it's easy or they want more time freedom or more time with their family which never happens in the first year or they're desperate like they lost their job or they're in a tough situation where they can't get a job and they go out and they start a business We started Jeff likes clean windows because Jeff had been cleaning windows over the course of the summer and he was looking for a new gig when he moved down to where I live because we it's a fun story we won't tell it on the podcast but he moved here he needed a job he started a window cleaning business I bought a book written by a guy named Steve Wright that said how to start a window cleaning business and we just did it we went off after 10 years with Jeff likes to clean windows I was still working as a corporate CPA I had a normal W-2

Speaker 1 I would not say nine to five because I worked 100 hour weeks, but I had a big job with a big paycheck. And I said, I need to go out on my own.
I want more time freedom.

Speaker 1 There were two weddings in France. I wanted to be gone for six consecutive weeks.
And essentially the shortcut is my boss said, if I don't need you for six weeks, I probably don't need you.

Speaker 1 And I said, okay, here's my notice. I gave him four months notice and I left.
And I built an accounting firm around me being able to be wherever I want to be. Last year, we traveled 30 weeks.

Speaker 1 And it really made us scale. Jeff likes clean windows because it's hard to clean glass and make money if you're still on the glass.

Speaker 1 So we got Jeff out of the truck, we got Jeff out of the office, and we were able to start having some true freedom in our lives.

Speaker 1 Now, likes accounting, I thought would be easy because I'd already started Jeff Likes the Windows. It's a piece of cake to start the next one, right?

Speaker 1 Well, every business has its challenge, and I think I'm figuring out ways to hack it for other businesses. So like, how do you do this easily?

Speaker 1 Like, how do you protect your time so you're not working nights and weekends? How do you recruit people? How do you delegate? I think these are things that you're really good at.

Speaker 1 But for me, I felt like I had to relearn in a whole new industry. But yeah, that's what I started with.
I wanted to go to France for six weeks. So I started likes accounting.

Speaker 2 So what do you think it takes? Because I'll tell you, a lot of people become really good technicians.

Speaker 2 I know a lot of guys that literally make a couple hundred grand that work for me a year, but they're not going to make a great manager. And I've learned that the hard way.

Speaker 2 They're not going to be a good sales coach. And they also, I don't mean to belittle anybody, but there's a lot to it.
There's tax planning. There's management.

Speaker 2 there's HR, there's trucks and insurance, there's marketing, lots to do with payroll.

Speaker 2 I mean, I don't think their best position would be to go out and leave because they at least read a lot of business books. I know this because I had to do it.

Speaker 2 But what do you think it takes to be ready to take on a business to be successful? Because you throw me into any business today in home service. I promise you, I could fast forward to 10 years.
So,

Speaker 2 what is it that you think that makes somebody ready?

Speaker 1 I think pricing is going to be number one.

Speaker 1 Pricing right from the beginning. I think systems is going to be number two.
So that's where Al comes in, right? Then we go to marketing.

Speaker 1 And I think if you've got good, well, maybe you go to recruiting. What do you think? Then you go to recruiting, then you go to marketing.

Speaker 2 I mean, I think sales cures everything.

Speaker 1 Sales. But it's not priced right.
I disagree. So pricing first and then sales.

Speaker 3 The marketing business is still an unprofitable business.

Speaker 1 And I have to always remind you, you're really good at math. And the people listening to you are not good at math.
Tommy is like crazy good at math.

Speaker 1 I've seen you do math in front of hundreds of people from the stage. But most people, they think like, eh, the neighbor next door is charging $100 an hour.
So that's what I'll charge.

Speaker 1 That seems reasonable. And the neighbor next door is going bankrupt in the next six weeks because he's in the 75% of people who fail.

Speaker 2 Well, I guess I talk to a lot of businesses and they're like, I'm not a good salesman. And then I look at their conversion rate.

Speaker 2 And if they can't sell at this price point, raising the price point is not the solution for them.

Speaker 2 I guess from my perspective, is conversion rate I see kills a lot of people, especially I look at conversion rate of Christmas lights even. And if it's below 30%,

Speaker 2 you've got an issue. You're not advertising the right avatar.
You see, you can't advertise to McDonald's customers filet mignon.

Speaker 2 It just doesn't work.

Speaker 2 I agree with you wholeheartedly. Most people are priced wrong, but also you can't advertise on Craigslist and expect to get the $10 million houses to buy from you.
So they all interrelate.

Speaker 2 I think the biggest thing that I see, Megan, is there's no money. They're living check to check.
They're under stress. It's called sweat equity.
They're underfunded. They can't pay people.

Speaker 2 They're too worried, worried making this week's payments to even focus on the business. It's so tough.
I've been there.

Speaker 2 It's really hard to make sound decisions when you're trying to figure out how to make your rent at your facility.

Speaker 1 I don't know if I agree. I feel like if you're starting off as an owner operator, it's pretty easy to make money.

Speaker 1 Like it's pretty easy to go out there and hustle and you can probably even do the Craigslist thing.

Speaker 1 Now, it's not sustainable and you're going to blow out your shoulder and you're going to blow out your back and you're going to blow out your knees and all of that. That's not a good way to grow.

Speaker 1 But what I noticed with the owner operators is they're robbing the piggy bank. The second they make money, they spend it.

Speaker 3 Right.

Speaker 1 They're constantly chasing their tail and they don't set up good habits. So when somebody comes to work to me at Likes Accounting and they say, Megan, I'm not profitable.
I need help.

Speaker 1 What I say is like, we need to put you on a budget. So tell me what the family needs to live.
And that's all you get to take out of the business this year. That's it.

Speaker 1 So make sure you do your math right because that's going to be your salary. And we're going to set it up on a weekly basis, whether you're a sole proprietor or a S corporation, I don't care.

Speaker 1 You're going to get a weekly paycheck and that's all you get from the business. The business is not your piggy bank if you want to grow it.
And you set them on a budget.

Speaker 1 And then you and I, we kind of bonded over profit first. I feel like that that was when our friendship first like went off.
What I love about Profit First is Profit First makes you wait.

Speaker 1 If you want to rob the piggy bank, you can't do it till the end of the quarter. And I tell Jeff, Jeff's a pretty sophisticated business at this point.
He works, you know, five hours a week.

Speaker 1 We travel 30 weeks a year. He makes significant income off of the window cleaning company.
He tells me, he says, I feel broke all the time. And I'm like, yep, it's working.

Speaker 1 Profit first makes Jeff feel broke 89 days a quarter. And on the 90th day of the quarter, that's when he does his distributions.

Speaker 1 We run it on a super tight budget, and I feel like it's way more fun that way. I mean, you explained Parkinson's a lot better than I do.

Speaker 1 And the last time we were together, we did the whole, you know, going on a diet and putting it on our plate.

Speaker 1 We could talk about that, but I think at the end of the day, your business is not your piggy bank, and you keep robbing the piggy bank, and you'll never be able to grow because there will never be any money left.

Speaker 2 You're right. You've looked at a lot more financials in your life than I'll ever come close to.
So, you're right. People do, and they say it in the fact, number one, it's bad habits.

Speaker 2 Number two is that they feel like it's deserved. They feel like both

Speaker 2 they deserve a new card. They deserve a huge vacation.
And they live well above their means. I know a lot of people that do this because the money's there, but the business suffers.

Speaker 2 And I do believe in profit first. I do believe in my size.
It's hard to have seven bank accounts. You need a really good CFO, but you got to have a budget.
And the budget for me set me free.

Speaker 2 Our budget this month, I've literally had five meetings before this podcast about hitting budget. And one of the things we're coming out of the woodwork, it's the 12th.

Speaker 2 And what I'm asking people is, how do we get more doors installed? Because we're on a cruel accounting. How can we get the 20 doors from door 48 installed faster?

Speaker 2 They're like, well, we can't get a hold of the clients. I'm like, then text message them, let's get resourceful here.

Speaker 2 So I just talked about a bonus program for the people booking the installs because when you set a budget, your brain starts going, what do I need to do to make this happen? How do we get there?

Speaker 2 You start thinking outside of the box, just like 10X, Grant Cardone. How do I grow my business a thousand times? It's not just this simple stuff.

Speaker 2 You start getting way outside of the box, way resourceful, partnerships, new ideas.

Speaker 1 I feel like I'm going to pause you because like the word budget, most people listening to you just like ears turned off. And they're like, yeah, I know, I need one.
I don't know how to do it.

Speaker 1 And I'm never going to do it. Budgets aren't sexy.
They're never going to be sexy. I've tried.
everything I can to make them interesting and they're not fun.

Speaker 1 So what I like to do now is we don't call it a budget and you break it down, set a goal. So like there's a target and you just need a couple of targets in your business.

Speaker 1 So a conversion rate target, an average ticket target, a daily sales target.

Speaker 1 And then the thing you were just talking about, getting more doors installed, this was an epiphany we had in our window cleaning company recently.

Speaker 1 So I want to just verbalize it on this podcast in case it helps anybody else. There's a huge difference between daily sales, daily production, and daily receipts.

Speaker 1 And a lot of business owners really struggle with that, right? So you've got somebody who's selling every day, but it's not going to to be produced today.

Speaker 1 It might be produced six months from now or three months from now. And then you've got a bunch of people out there who are producing.
Your technicians are out there hustling doing the work every day.

Speaker 1 And then you've got hopefully credit cards on file for everybody and you're getting paid.

Speaker 1 But if you have commercial work or if you've got longer term or larger projects, you're not getting paid every day. So understanding your business, what is the sales goal every day?

Speaker 1 What is the production goal per whatever makes sense to you for us per band? That makes sense to us. So what's the production goal per band every day?

Speaker 1 And then what do we need our daily receipts to be? And then you plug in the people in your company who are responsible for that and you do your performance pay like Tommy just said.

Speaker 1 So the person who's selling, they have a sales goal now and they need to report on their daily sales every day.

Speaker 1 The person producing or who's in charge of your production manager or field supervisor, or maybe it's you, maybe I love when Tommy's like, maybe your name's in all these boxes, like maybe you're wearing all the hats, but you need to look at these from every angle because they're not the same dollar amount.

Speaker 1 And most business owners think that they are. Most business owners are like, Yeah, I just need to make $10,000 a day and everything's fine.

Speaker 1 And I'm like, You need to receive it, or you need to sell it, or you need to produce it. Which one of those do you mean?

Speaker 2 Well, that's what we did. We reverse-engineered on how many calls we're getting, our conversion rate.

Speaker 2 The way that you build a budget is you have to have one leading indicator, and ours was driving phone calls. So we put it back because I'm a marketing guy.

Speaker 2 I knew over time the guys have almost the same paycheck, right? Their paychecks are very similar. So our conversion rate is not going to change 10%.

Speaker 2 Not when we have 10,000 clients a month. Now I'm working on something that will help that.
And I don't think our average ticket is going to jump 20%. So I said, what's the big variable here?

Speaker 2 It's phone calls. How can I drive more leads? And you can do that through expansion or just taking more market share.
So Obviously, we're working on every KPI, always. But what's the biggest ones?

Speaker 2 We built the budget. We back-ended how many leads we needed.
And then obviously there's other things on there, like training and recruiting technicians. You're only as strong as your weakest link.

Speaker 2 But here's the secret sauce.

Speaker 2 I'll tell you, Megan, something that changed my life is when Dan Miller started, our president, and he said in my last company, the HR person gave us some secret sauce, and that is to build a six-month org chart.

Speaker 2 What does this company look like in six months? Because I'll tell you this.

Speaker 2 Mike Bailey's come up to me. Our COO, Luke Down Martin, has come up to me.
And there's certain people that aren't cutting it, but they have no choice but to keep them.

Speaker 2 And how many times have you heard that, Megan? You know what? They're filling in right now. They're the best we've got.
Well, if they could fog them here, they could get a job type of thing.

Speaker 2 But ultimately, for me, is it's the fear of having to do it yourself is what causes people that are not good at what they do to stay on.

Speaker 2 And when you set up a six-month work chart, the goal is that you start looking for the best, the best. There's one thing I've realized over the last month.
Is the best, the best?

Speaker 2 They're always hiring as well as doing their job. They know how to build a team, coach a team, and keep the good people happy.

Speaker 2 And the difference is a lot of times you get people that can build a team that just want to delegate, or you get people that are good at what they do, but they don't know how to build a team.

Speaker 2 It's so hard to find a person that could grow the business and find great people and learn to not do the work themselves. Now, I want somebody that could still be in the meetings, right?

Speaker 2 I want somebody that's still going to get dirty, but they don't get in the weeds as much. And they learn how to build and coach a team.

Speaker 2 And that, to me, just keeping somebody on saying, hey, they're the best I could do right now. You don't understand.
I'm swamped. I got kids.

Speaker 2 I got a wife that's not happy or a husband that's not happy. Right now they're filling in.
It's the best trainer I could get. It's the best league tech I have.

Speaker 2 And I know he's a prima donna, but I need him. How many people are slaves? They can't have hard conversations with people because they've got B and C players.

Speaker 1 I think I have a really good idea. They're working.
I don't know if I can talk about it yet, but I will talk about a couple of pieces of it because you can relate to a couple of these pieces.

Speaker 3 Yeah, let's go back.

Speaker 1 No, you're taking notes. Can you put down labor efficiency? We have to talk about labor efficiency today because I'm very excited about it.

Speaker 2 Got it.

Speaker 1 Okay, good. So, I hired a company recently called Bergflow.
And Bergflow, their idea is building out leadership teams. So, they say, Where's your company today? Where do you want to be?

Speaker 1 So, for you, six-month org chart or one-year org chart, right? And their whole thing is your org chart needs to be divided into servicing, operations, and growth. They're selling features.

Speaker 1 You're three hires away from infinite possibilities with your company. Three hires away.
If you have a strong person in servicing, which for us, let's talk about window cleaning.

Speaker 1 Servicing for me is a production manager or field supervisor. That's the person who's in charge of the technicians who are producing all the work.
That's your servicing department.

Speaker 1 Operations at our company is our office manager. That's the person who's in charge of scheduling, dispatching, over-the-phone sales.
Growth would be a sales manager.

Speaker 1 In our company, we don't have a sales manager yet. We're not there, but we do have marketing, right? We have a marketing person who's working in the growth division.

Speaker 1 If you can get each of those sections of your org chart autonomous, like they have their own budget, they have their own freedom. They know how they're moving this KPI tracker.

Speaker 1 They know how they're moving the needle in the company, then this is how you get out of the way. This is how you get to start acting like a CEO.
Like Jeff, this morning, I love my husband.

Speaker 1 He barely works. And he comes in my office.
I'm in the middle of meeting at 9:30. He's like, Hey, I have an interview right now.

Speaker 3 Can you?

Speaker 1 And I was like, What? What do you mean you? He's like, Well, because we have a whole automated recruiting system. He had three interviews today.

Speaker 1 I'm like, Yeah, this is gonna be the last week you ever do interviews because we need to delegate it to somebody else. It's time for us to move it on to somebody else.

Speaker 1 But I like this idea that you can build a company very strategically, very thoughtfully. You're only three key hires away from it.
And you're a big fan of Breakthrough Academy.

Speaker 1 We're huge Breakthrough Academy fans. They help you figure out what are the deliverables of each of those

Speaker 1 How do you set them up for success? How do you measure the success? And then they get to run with it.

Speaker 1 And we can talk about Jonathan Wistman if you want, but there are like really cool tools out there now that can help you predict in advance whether that's a good hire.

Speaker 1 Bergflow likes a company called Accumax. That's who they're predicting through.

Speaker 1 But I think this is going to get way easier in the next 12 months. I think we're going to be pretty much guaranteed to make good hires at 90% effectiveness very soon.

Speaker 2 Yeah,

Speaker 2 I will say this. Tony Robbins said it the best.

Speaker 2 He said, I don't bring family in because they don't live up to my expectations. I got sick of watching people learn on my dime.

Speaker 2 He goes, so now what I bring in is I make sure they've got the skills at a leadership director or VP level.

Speaker 2 Now, what that means to a small business is any type of leadership, anybody that's meant to coach and build a team or manager. So too many people, Megan,

Speaker 2 they hire people that are there to learn with them. You don't bring out a good controller that knows to set up billpay.com and get you on the right credit cards that understand the tax laws.

Speaker 2 That's conferring with a CPA. You don't bring on the right people that understand what the business needs to do.
So, they're learning alongside of you instead of helping you grow the business.

Speaker 2 So, now my one goal is to find the best winner. And so, here's what I call it.
I called my president earlier and I said, listen, we've got this amazing gal. Her name is Blair.

Speaker 2 She's the best recruiter I've ever seen. And I said, We can't afford to have her recruit for some of these positions.
It just doesn't make sense.

Speaker 2 So I want to pay her really good money to sit down with her and our exec team for two hours and teach us how to recruit the right people.

Speaker 2 Because if you think they're going to come to a Craigslist or Indeed and the greatest people are sitting there waiting, you're wrong.

Speaker 2 To get people that are going to grow your business faster than you ever could, they work somewhere else.

Speaker 2 And you need to actively pursue them to to get the A-plus winner because A-plus winners are not on the sidelines looking on Indeed and Monster and Career Builder and LinkedIn.

Speaker 2 They're out there working. We've got to go after winners, right?

Speaker 1 Here's the thing. I think most of the people listening to this podcast, they wouldn't know if a winner showed up in front of them because we are recruiting for ourselves.

Speaker 1 And something that you learned early, but you're more advanced than most of your listeners, is that you built a team around you of people who played to their strengths, right?

Speaker 1 People who were better at it than you were. And that's how you complement it.

Speaker 1 I think we need a system, and that's what I like about Birdflow, is they'll actually like hardwire personally profile who needs to be in each position.

Speaker 1 So for Likes Accounting, we're hiring an operations manager and they profiled it. And then you send out an assessment.

Speaker 1 And now I only have to do, well, I don't, but my executive assistant only has to do phone interviews with 10% of applicants, right?

Speaker 1 I'm only meeting with 1% because they're hardwired to perform in that position because we can be thoughtful about what does this position take what are the core responsibilities you can also build out a training and onboarding program so if you're listening to this and you have a less than million dollar i'm sorry to keep bringing up window cleaning but it's what i know window cleaning pressure washing soft washing company your next key hire is probably an operations manager It's probably a field supervisor, somebody who can manage the technicians because you're not doing it.

Speaker 1 You're still got that technician mindset. Jeff is not a natural natural leader.

Speaker 1 And we have, we've leveled him up as far as we can level him up, but it's time to bring in people who are even better at it than us. It really is.

Speaker 2 And that's really, really hard for a lot of people because when you bring in someone better, you got to be willing to say that you know more than I do about this. And that's giving up control.

Speaker 2 And a lot of times for a business owner that's pigheaded like I am.

Speaker 2 You just need to realize you hired somebody that's better than you at their position, but you need to have checks and balances, but you need to get freedom.

Speaker 2 And you need to just say, listen, I'm giving this to you. What's the expectations? Let's just make sure we're clear that the expectations are to create profitability and growth.

Speaker 2 Now, how are we going to get there? And those discussions should happen before that person gets hired. And if the person is looking for you to design a plan, then that's not the right person.

Speaker 3 That might be a really good technician, right?

Speaker 1 But that's not a good leader. And I did not plan on bringing up Birdflow because we're still learning how to be friends.

Speaker 1 But I like that they helped me figure out what are the top five tasks that we're going to delegate first.

Speaker 1 And then you build out the first one and you're just taking chunks of 80 of your time off your plate in that first 90 days and my sister-in-law she just started a new job i never really talk about my sister-in-law but she just started a new job and she was not set up for success she almost quit in her first week because

Speaker 1 everybody's too busy to talk to her so she felt like she was a burden She didn't feel welcome. She didn't feel like warm and fuzzy.
She didn't feel like she was being helpful.

Speaker 1 When we bring on a key hire in a leadership position at our company, we do need to organize you know you don't have to have every day planned but you need to have enough space in your calendar and enough setup for them to be successful in those first 90 days otherwise you're going to lose them even if they're a good fit so i feel like there's so many things we can i'm not even staying in my lane like this we're talking about recruiting but it does

Speaker 2 so it's good to have this conversation because you're at a point in your career that you've changed a lot over the last two years, but you also are asking valid questions because the biggest mistake for listeners would be to listen to everything I have to say.

Speaker 2 You know, this isn't condescending by any terms because I was smaller than anybody at one point, but it's so hard for me to go back to a million dollars or 5 million or even 20 million at this point.

Speaker 2 So these are things that I, it's hard for me to go back and say, unless somebody remember before Adam or before Luke, like before

Speaker 3 it's hard to remember because

Speaker 2 my life doesn't live in reflections, it lives in forward thinking. So it's hard for me to say, sit back and try to get at that place.

Speaker 2 I was lost and I I don't even want to talk about it because if I go back and talk to myself, I would tell myself a lot of things.

Speaker 2 Mostly, the biggest thing would be is find somebody that's better than you. That's very, very good.
But the difference was I got blessed with Adam in 2014.

Speaker 2 But if I would have read Rocket Fuel in 2007, which it didn't exist, I would have found Adam a lot earlier. So the books I've read, the things I've done.

Speaker 2 to find the right people is the best thing you could do is build your team and focus on team building and focus on all your weaknesses and replacing the weaknesses first.

Speaker 3 And I'm going to.

Speaker 1 I'm going to take a step backwards and say, first, I want you to focus on money because I'd say not to be condescending to a listener, but 90% of your listeners still aren't profitable.

Speaker 1 They're still not paying themselves and payroll still stressful for them.

Speaker 1 So until we can fix that, we can't talk about taking on more payroll because you've got a bunch of B players, C players, D players there. So we've got to fix the money.

Speaker 1 We've got to start stacking some cash. And I have to tell you, I'm hiring this operations manager for likes accounting.
It's so exciting because the money's there.

Speaker 1 Like now I I just need the right person. The money was there to hire the coach, which was insanely expensive to help me find the right person, just like you're talking about recruiting.

Speaker 1 Like all of that takes money. So the reason we're here is step one, you got to find yourself some more money.
So first half just in the podcast is profit first. They got to read profit first.

Speaker 3 Yeah, I agree.

Speaker 2 When you have no money, you're literally a victim to staying in the truck. When there's no saved money for payroll, when you can't hire people to help train, you can't hire.

Speaker 2 You know, we separated, didn't separate from Jody, but we basically said, we're going to hire some internal recruiters and be less dependent on him. Jodi came back two weeks ago.

Speaker 2 We fired all of our recruiters and he took back over because to be able to bring on these resources, so that's rapid hire.

Speaker 2 But ultimately, that's the only person that could get us to 50 new technicians a month right now. We would like to be a little less dependent on them, but at the end of the day, he's a buddy of mine.

Speaker 2 They do fabulous and they've got resources and they've got contingencies. They've got plans if a person is out.
So I think you're right.

Speaker 2 A long time ago, there was a guy listening to the podcast. He hired Dan Antonelli

Speaker 2 and he spent a dozen grand. I don't know what it was.
Spent all of his money branding, but didn't have any money for marketing or hiring. So you're right.

Speaker 2 Without money, without sales, without pricing right,

Speaker 2 you don't have a leg to stand on. And it's almost like you're handicapped.
And I get that. So that's.

Speaker 1 And Tommy was there. Like, I think if you're listening to this, you're listening to it for a reason.
Like, but Tommy's at, what are you going to do now this year? 150, 200? What are you at?

Speaker 2 These deals, I got a couple deals, people coming into town the next week. If these deals go through, we'll do a little over 200.

Speaker 1 Okay, so Tommy is sitting here going to do 200 million this year. And there was a time when he had a giant Amex bill that he didn't know about.
He didn't have any money to pay it off.

Speaker 1 And that wasn't that long ago. How long ago was that, Tommy?

Speaker 2 Well, when we moved into this building four, four and a half years ago, I got a SBA loan that wasn't approved. So they did a bridge loan and the SBA loan didn't go through.

Speaker 2 And

Speaker 2 I remember talking to my neighbor,

Speaker 2 and he's a controller. He's really smart.
He looked at our financials and he goes, Oh my God, this is bad. I was just talking to him on Friday night.

Speaker 2 And he goes, I just remember it was like yesterday. You came in and said things weren't good.
And then I had my buddy Keegan fly into town and he goes, you need to close these four markets.

Speaker 2 And I said, no, no, no, I can fix those. He said, Tommy, close these tomorrow.
Without these four markets, you're making 20

Speaker 2 you are bleeding your heart's about to stop this is bad he goes give them a relocation package and close them tomorrow and he goes i'm not bullshitting you these four markets are bleeding you to death so what did i do i closed those four markets the next day turned ultra profitable that now is in the rearview mirror but i was

Speaker 1 can we stop there because i just i love that so much and i know you're interviewing me and i but this is how we are this is our friendship welcome to tommy and megan's life we just talk over each other It's crazy.

Speaker 1 Okay, so five years ago, Tommy was like almost, it was a bad breaking point. And now here he is like very comfortable profit margins, gonna do 200 million this year.
Now, five years is a long time.

Speaker 1 Billy Klein just commented. So Billy, I'm just gonna call you out for a second.
Billy was at Vertical Track in May. Tommy and I wrote a class on pricing for profits in May.
And it was really cool.

Speaker 1 You built this awesome calculator. It was really cool.
Billy sat there and in six weeks, he increased his net profit margin from vertical track by 30%.

Speaker 1 30% on one month sales is cash in the bank. And that's what Tommy and I are talking about.
This doesn't have to be five years from now. This doesn't have to be one year from now.

Speaker 1 We can fix your problem if we can fix your profitability. And you don't even need a friend like Keegan to tell you to close down some markets.

Speaker 1 You just got to look at like a couple key metrics, do a couple key things. and you can fix your problem.
I believe that I can fix your problem in six weeks.

Speaker 1 If you give me six weeks of your full attention and you do your homework, I can fix your problem in six weeks. It's pretty cool, right? It turns around like that.
There's a couple key things.

Speaker 2 Yeah, what you're going to teach is you need to know. Like it's the most important thing.
One of the things that I spend a lot of time now is I go spend a lot of time with the guys next door.

Speaker 2 There's 50 of them training. So my job has completely changed recently.

Speaker 2 I ask hard questions to a lot of people, but I'm not involved in day-to-day. I mean, look, I won't be involved in any of the meetings at all this week.

Speaker 2 Like, I'm gone the whole week, and me and Jim are working on some stuff in San Francisco.

Speaker 2 So ultimately, it changes dramatically, but now I'm asking the main questions of how much money made it to the bank. I found out our

Speaker 2 EBITDA is at 23.8%.

Speaker 2 That's EBITDA. So I'm happy with that, but we're trying to get it to 30.
Now, I realize that I have some unrealistic goals here, but I've got a clear path to get to 30. And one of the things,

Speaker 2 look, Megan, you're right. Without confusing people, first get your get money saved.
But there's so many other little things like what an A-player could do for your company.

Speaker 2 And the first time I met an A-player, like I met a lot of A-player technicians, but I remember Robin, Robin coming on, and this guy just, I didn't think it was possible until I did a ride-along one day and I go, oh my God.

Speaker 2 This guy, he set the bar so high in our company. And it's ridiculous what he's been able to teach me.

Speaker 2 So sometimes what i do is i study the best performer in in a csr dispatching technician installer and that's how i help come up with the manual and the training and you watch he's a disc trainer like we got robin disc certified and he always talks about it he's like i zip myself up before i go into a job i recognize what kind of person they are and i know exactly how to deal with them and now one of my top technicians all he talks about is personality profiling that's the kind of level we're talking about here but but

Speaker 1 and we're talking to people who like they're like disc what you know what is that and that's okay but first let's talk about top technicians so now I'm gonna bring in labor efficiency do you like how I came up yes

Speaker 1 but I've been doing some really nerdy service titan things and I've been meaning to call you an Adam to tell you about them like it's been very fun to play with service titan reports like I think I'm breaking some stuff, but it's been really exciting.

Speaker 1 Most people cannot tell me what their labor rate is. And most people cannot tell me what their labor efficiency is.

Speaker 1 So what I'm talking about here is when somebody calls to schedule whatever service you sell, there's got to be a formula somewhere that says, okay, a technician can produce this much per hour and the job's going to take this long.

Speaker 1 So let's schedule it for this long.

Speaker 3 I mean,

Speaker 1 some people who are listening are like, what? What did she say? What I'm saying is when a job ends up on your calendar, who decides how long it should take? Usually it has to do with a labor rate.

Speaker 1 And usually the labor rate is determined by you as the owner when you used to be out in the field doing it.

Speaker 1 So you used to be like, okay, I'm going to look at this house and that would take me four hours to do, I think. And I think I can make $100 an hour.
So I'm going to bid this job at $400.

Speaker 2 That's stupid.

Speaker 1 Okay, it is stupid. I agree.
And you're going to tell them why in just a second, but let me get through this.

Speaker 1 So you go out and you teach somebody to answer the phone and that person answers the phone and they look at it on Google Earth and like, okay, $400 because that's what Jeff said.

Speaker 1 And it's going to take four hours. And they put it on the calendar.
Most home service companies never go back to look, how long did it actually take?

Speaker 1 What happens if it takes the technician six hours because they're not like you? What happens if you have a rock star and it takes them three hours, but then they have crappy quality?

Speaker 1 Nobody looks at it this way because it's called job costing and it's too much math. It's too labor intensive and nobody really cares.

Speaker 2 But I feel like this is week two of the six weeks of financial freedom, but it might be the lowest hanging fruit in your company is figuring out, are you charging the right amount per hour of your labor rate so now tell the story of how much it costs to turn on a van and what a basic labor rate should be especially at a1 because i love that well it's pretty simple if you take our price book and you can redesign our price book very simply for california florida chicago and new york into sold hours and you can reverse engineer exactly what you need to make you should figure out your total expenses to be very nice kind and a very good person to your company and pay yourself well and then reverse engineer into your price book so when i

Speaker 2 you're you're talking so fast they're not going to keep up with you so total expenses he's saying like how much let me just explain the formula real quick if i'm sitting there and i'm a window company

Speaker 2 if i'm a window company paying for windows i'm reverse engineering by the window how much labor i'm going to pay whether they finish in four eight or two hours number one I'm going to make sure they are motivated to get done fast and efficient.

Speaker 2 So I put checks and balances in place that I'd have a checks and balances checklist that each guy goes over with the client, and there'd be pictures of it and signatures from the client.

Speaker 2 More importantly, if I'm going to pay by the window and I'm going to pay a labor rate, I've got an expected fixed labor rate instead of being variable. So now I say this window costs $35.
I pay seven.

Speaker 2 I know exactly what I'm paying on it. I'm paying 20%.

Speaker 2 And therefore, I'm able to create a simple mathematical equation.

Speaker 2 So the price book should be based off of labor to make it as fixed as possible. And all my labor is fixed.
All of my labor.

Speaker 2 Now, that depends on what they sell, but I can tell you exactly what my labor rate is after they sell a job. I don't even have to guess at it.

Speaker 2 You tell me what technician, I can tell you my labor rate minus material cost. Material costs will vary, but I hate people that build a price, their pricing book.
It has to do with time. And time.

Speaker 2 You can't motivate a guy to take less cigarette breaks unless he has a stake in the outcome.

Speaker 1 I see guys double their efficiency when they switch to my type of price book and most people are like i don't have a price book i don't know if that is and the reality is you do if you are selling services you have a price book whether it's organized or not you think in your head this house will take this long this job will take this long and so we need to figure out is that math good and have you included everything in it have you included the cost of the gas and the cost of the truck and the cost of the insurance?

Speaker 1 Have you included your salary? Have you included all of your costs in it? Jim made that beautiful, we can link to that too, that beautiful break-even point calculator.

Speaker 1 He basically took, Tommy used to have this really old school worksheet and you would have to like handwrite it in. And Jim turned it into like a program, a computer program.

Speaker 1 You can put in all of the expenses of your company and it will tell you what should you be charging per hour. What should your labor rate be? If you want to cover all those expenses.

Speaker 1 And Tommy says, when you're filling out this calculator, he says, dream big. Like they deserve a nice truck.
They deserve a good salary. You deserve a good salary.

Speaker 1 Include all of the expenses and then charge accordingly.

Speaker 2 You know, it's interesting you mentioned Jim Leslie.

Speaker 1 I'm a fan. I'm a big, he helped me out a lot in May.
So I'm a fan.

Speaker 2 I'm looking at this next year going,

Speaker 2 how do I become a magnet for

Speaker 2 A ⁇ ?

Speaker 2 Dan Miller.

Speaker 2 and Jim were the two best hires in a while, in quite a long time. And these guys are moving the needle so fast.
And so now,

Speaker 2 and I'm just telling people this because I think it's important to understand, how am I going to go from 200 to a billion in less than four years? I'll do it before 2025.

Speaker 2 It's by bringing on, look, Jim Collins said it the best. You get the right people on the bus.
They'll help you decide where to go. And listen, I'm not going after a billion.

Speaker 2 I'm going after two and a half billion because I know you get fatigued out. Just like push-ups, if I told you to do 50 push-ups, you're going to struggle at the end.
You want to blow past your goal.

Speaker 2 So we set a bigger goal to be able to build the systems that will fly by that goal.

Speaker 1 Are we doing comments or no?

Speaker 2 Yeah, you could go ahead and read some questions.

Speaker 1 There was somebody, it just says Facebook user. So I don't know who said this.
And I'm saying it because I think that a lot of listeners are going to relate to this.

Speaker 1 He says, tough to hire these roles when we're buried in lease debt. Things are super slow here for the next few weeks.

Speaker 1 We need to get into charge more, I think, even though we are on the high end to begin with. So I feel like you, Facebook user, whoever you are, are very typical of most people listening.

Speaker 1 So Ellen Rohr says, if you don't want to do the math and the pricing for profits profits thing that Tommy and I did at Vertical Track in May, we said you had three options.

Speaker 1 You could figure out your break-even point using Jim Leslie's calculator. You could figure out your labor rate, which is super hard to calculate, but you can do it.

Speaker 1 Or you can triple your prices, which is Ellen Rohr's hack. You know, Tommy's expression, you can outsell anything.

Speaker 1 Well, Tommy couldn't outsell those four markets that weren't priced right or weren't producing, right? You can't outsell everything unless you triple your prices.

Speaker 1 And when I say triple your prices in front of a live audience, everybody turns green and is like, she's lost her marbles.

Speaker 1 So Facebook user are are not saying go triple your prices, but I am saying that there are a couple of ways that you can fix your profitability.

Speaker 1 One is raising your prices, but then Tommy's going to talk about conversion rate. Then you've got to work on how are you going to sell at the higher prices?

Speaker 1 How are you going to work on your perceived value? How are you going to articulate your perceived value? And I think we met a great company through Tommy Power Selling Pros.

Speaker 1 They've done a huge thing helping us with that. I know you love Uncle Joe.
He's done a huge thing helping with that.

Speaker 2 There are ways that you can work on communication to enhance perceived value almost immediately like almost tomorrow i think well yeah the idea of that they're already the highest price in town and i'd like to know how they know that but ultimately what i'd like to see is i realize conversion rating is killing people and that to not have a rehash team going after old leads but we talk about build rapport educate and follow up ref a lot of people skip the third step they don't do any follow-up whatsoever and the conversion rate is the number i see but they're also not open nights or weekends.

Speaker 2 So their booking rate sucks. So I think understanding financials is so important.
You hear me talk about the same things every single time. I need to know how much you want to do this year.

Speaker 2 I need to know your average ticket, your conversion rate, your booking rate, your cost per acquisition. I'll go through that a little slower because I talk fast.
How much do you want to?

Speaker 1 I can pause for a second. So Billy Klein mentioned my spreadsheet.
This is another spreadsheet I'll get to, Tommy.

Speaker 1 If you know those numbers that he's going to repeat to you, I can show you how to get to any number. If you want to get to 100 million, 2 billion, whatever, we can tell you exactly the roadmap.

Speaker 1 And we actually break it out by a year.

Speaker 3 It's fantastic. Okay.

Speaker 3 I went through

Speaker 2 real estate. And I learned this from Jim Krautkramer as he built this calculator for real estate agents.
And all you do is divide into each number. So you take, forget the revenue.

Speaker 2 Let's just take your average ticket divided by your conversion rate divided by

Speaker 2 your.

Speaker 2 booking rate. And then you find out how much it costs you per acquisition.
That'll tell you how much marketing you need to spend. Now, if you want to do $10 billion,

Speaker 2 you put 10 billion, you divide it by your average ticket, divided by your conversion rate, divided by your booking rate. And then you find out how many leads you need to get that number.

Speaker 2 That's all it is. And every time, Megan, every time I go into a business, number one, the biggest problem I see is there's no true number.
They say me and my wife are booking all the phone calls.

Speaker 2 We're probably at 92%.

Speaker 2 But it turns out they don't book phone calls on the weekend. It turns out they're not counting all those areas that are out of service.

Speaker 2 Oh, yeah, that's out of our service because they're marketing to the wrong areas. So they're not counting it.
And there's always these gray areas.

Speaker 2 So first, systematically, they don't have the right numbers. They don't know where they're at.
And then number two is I find one that's like, holy shit, how are you even making money?

Speaker 2 How are you not paying attention to this? And then we fix it and they're like, oh my God, I'm making so much damn money. Why didn't you come into here before?

Speaker 2 But that's all it is, is that simple formula.

Speaker 1 And we made a calculator for you. So everybody's asking for it.
We will get it into the chat or or the, we'll figure out a way to get it to you.

Speaker 1 But basically, you don't have to do all the math that Tommy's talking about because he can like do it in his head and nobody else can. It's weird.
But you do need to know a couple of key things.

Speaker 1 So conversion rate is all it is, is how many people ask you for an estimate versus how many people actually turn into an invoice. That's how you figure out your conversion rate.

Speaker 1 And you really could do it as simply as possible, meaning look at yesterday.

Speaker 1 And if you want your booking rate, and Tommy and I sometimes we don't always speak the same language, but we try. Your booking rate is how many people reached out to you yesterday.

Speaker 1 How many of those turned into estimates? That's the difference between those two.

Speaker 2 Now there's something that nobody counts. And there's abandonment rate.
So if you don't have call center software to tell how many calls you're not answering, those are abandoned.

Speaker 2 Those should be counted as not answered. And those should be counted as an opportunity.

Speaker 1 Yep. And it's an opportunity that didn't turn in an estimate.
He can also talk to you about web traffic. So people who start to fill out a form or an estimate form who abandon it, right?

Speaker 1 But we call that lead lead slippage. So you've lost that lead because you've never even got their name and phone number, right? It never turned into an estimate.

Speaker 1 So that's the first one, which what were you calling your booking rate? So that's your booking rate for the estimate.

Speaker 2 And you're conversion.

Speaker 2 Conversion rate, you explained booking rate.

Speaker 1 Yep. And so now average tickets, the last one I want to explain.
And you can do this again for yesterday. So you look at yesterday.
How many jobs did you do?

Speaker 1 How much were they worth?

Speaker 3 Do not explore your average ticket.

Speaker 2 You include zeros, you include zeros, you include zeros.

Speaker 2 Because everybody I know,

Speaker 2 they're lying to themselves. You need to include the estimates that are not closed.

Speaker 2 Even if you think they're going to close, if you got zero on a service call, every single opportunity you add in there, and you'll find that every company I walk into lies about these numbers.

Speaker 2 They got this gray area. Oh, we didn't count.

Speaker 1 They're not lying, Tommy. They're not liars.
They just

Speaker 3 don't know how to find it.

Speaker 1 They don't have good data. They don't have service titan.
And they don't have your math brain. So we're not calling you liars.
We're telling you that you're not going to be able to do that.

Speaker 2 Listen, I don't know. If I'm talking to you, I'm not calling one person out.
If I'm talking to you, you're lying to yourself because you give excuses. And like I did.

Speaker 2 And then when I started counting zeros and my conversion rate.

Speaker 2 I mean, obviously, you got to count zeros, but you better count every single opportunity. And if you're not going to count it, there better be a very, very good reason.

Speaker 2 Now, on a booking rate, what happened is we didn't use the count of it if it was out of our service area, Megan.

Speaker 2 And then what I realized is, why are we getting calls out of our service area? Why are we spending money? So if you don't count those, you can't isolate the problem.

Speaker 1 Okay, and we're not trying to scare you with counting.

Speaker 1 So what we're going to have you do, and he doesn't even give homework, but we're going to make you do this because it's going to change your life. You need to just write it down.

Speaker 1 Get out a piece of paper. Jeff's like terrified of a computer.
He's terrified of spreadsheets.

Speaker 1 Just get out a piece of paper and write down everything that happened yesterday hopefully you have software because this is really painful that's why you can only do one day at a time hopefully you have software that will tell you but you need to be realistic and you do he's right you got to write down the zeros you can't avoid you can't hide from the zeros you got to write them down so if you went out and did a callback because of quality yesterday that was a job with zero dollars if you went out to give an estimate and they didn't actually you didn't sell you still got to write it down you write down everything that happened yesterday and the last thing that you were talking about tommy was selling marketing dollars outside of your service rate.

Speaker 1 So the client acquisition cost, I think, is important. So I'm going to go through that math with you really quick.
Also, this is your advertising spend divided by total customers.

Speaker 1 So this math isn't terrible. And you can do it for one day.
You can do it for one week. You can do it for one month.
If you don't have fancy software like we do,

Speaker 1 get your business profitable enough so you can get more software, right? Because you won't have to hire as many people, but do the math and start today.

Speaker 1 And if you start today with these numbers, it becomes a game against yourself. We do the exact same math a month from now and you start seeing cash in your bank account.

Speaker 1 You start seeing how you improved things. You start seeing that, oh my gosh, my business is getting better because we're focusing on just a couple places to look.

Speaker 1 And this is how you move the needle forward. Sorry, Tommy.
I just like, the math's hard and then they won't do it. And then they get scared.
And I don't want you to be listening to this to be scared.

Speaker 2 No, no, you're right. You're right.
I forget sometimes. I just, the thing is that there's going to be one of these four things that really stick out to me.

Speaker 2 And if you include the revenue, the scary thing for me is the fact that they're starting at a million instead of five to 10 million.

Speaker 1 Because they're starting at 200,000, Tommy. Like these guys are at 200,000, 600,000.
They're not even, I'd say,

Speaker 2 think about how to get to 500,000. That's not real numbers to work with because what I would tell you is it's not even a dream.
I would tell you that the way to get.

Speaker 2 to make money is to get to feel uncomfortable. That's what makes me move.
Listen, if I tried to get a million dollars more per year, I would still be where I was 10 years ago.

Speaker 2 All I'm telling you is the mindset is dream for a big number, write it down, have a decent goal, shoot for the stars, you land on the moon, you're still doing good.

Speaker 2 But if you just want to do $2 million,

Speaker 2 look, you need to walk before you run and crawl before you walk, whatever, something like that.

Speaker 1 Well, in our industry, I would say less than 5% of people in window cleaning, pressure washing, soft washing are doing over a million.

Speaker 3 So you're going to have to.

Speaker 1 They need to go to other industries. They need to go to vertical track.
They need to meet people like Tommy and think bigger.

Speaker 2 You know what? Here's the deal. I'll give you a tour of the facility.
You can meet all my trainers.

Speaker 2 To realize who you need, you need to be able to meet these personalities and say, oh my gosh, now I see what they're talking about.

Speaker 1 You need to drink to the bar with Luke and Adam. And

Speaker 1 you just need to get around people who think bigger. And we can't describe it.
You got to feel it for yourself. For Jeff.

Speaker 1 We've been friends like, what, three, four years? I don't know, a while. And it wasn't until Jeff got to A1 that he finally got it, right? He saw it.
He felt it.

Speaker 2 And I felt that before at different shops. And when you get that feeling, everything becomes easier because you start to learn where you need to go.

Speaker 2 Right now, it doesn't need to be this black forest of what you don't know. We're doing it here.
And there's 50 technicians training. There's a bigger class coming in next month.

Speaker 2 50, my goal is million dollars per truck. So $50 million producers.
I'm making $50 million worth of revenue in the next 12 months. Not to say we're going to get that.

Speaker 2 I'd be happy with 40 because there's some fallout and stuff like that. But ultimately, you started a business hopefully for a lot more than just making money.

Speaker 2 I hope you want to give back to the community and really give back to your people. Because when you figure that out, it gets a lot easier and a lot more fun.

Speaker 2 True.

Speaker 2 So, profits to freedom. Tell me a little bit about it.

Speaker 1 I think this is my best work ever. So, I have an accounting company.
I'm a CPA. I've helped like between two and 10,000 business owners a year build more profitable businesses.

Speaker 1 And I met up with a guy named Ryan Lee and he helped me put together. I have over 50 classes that I've taught in either big group settings or small group settings.

Speaker 1 And it's like, I do something with a client one-on-one with five different clients and then I turn it into a course. That's my rule.
So I'll do it one-on-one five times.

Speaker 1 I'll find the commonalities and I turn it into a course.

Speaker 1 So I took my top six courses that made the biggest difference in, you know, these tens of thousands of businesses a year and I put them in the right order.

Speaker 1 And we're going to go through it in a group setting starting next Tuesday. So September 20th.
And it's called six weeks to financial freedom.

Speaker 1 The first week, we're going to show you how to double your profits without increasing any expenses. So you're not going to spend any extra money.

Speaker 1 And we're going to show you how you can double your profits. The next week, we're going to show you how to actually price for profits.

Speaker 1 We're going to use Jim Leslie's calculator and we're going to show you where's your break-even point in your business every day. You need to know that number every day.

Speaker 1 Then we're going to save some money. So I have this expense saving hacks that used to be a fan favorite.
I gave this talk like a dozen times or two dozen times.

Speaker 1 And I show you like all the places that you should be saving money in your company because that will help with your profitability.

Speaker 1 Then we're going to set some goals and we're going to use those fancy spreadsheets that Billy was talking about. And I'm going to show you how you need to think bigger than $2 million.

Speaker 1 You need to think like Tommy said, if your goal is $2 million, you need to set it at five and we're going to go bigger.

Speaker 1 And then we're going to talk about profit first because that's the secret sauce to stacks of money in your bank account.

Speaker 1 And at the very end, I call it creating financial freedom, but here's the spoiler. We're going to make a budget and we're not going to make it scary.

Speaker 1 And it's still not going to be sexy, but we're going to try because you're going to have enough confidence. I always say, I have enough confidence for the two of us.

Speaker 1 You can borrow some of my confidence. You're going to have enough confidence to actually get a budget done.
And we're going to show you how to track it. Now, it's being done in my membership group.

Speaker 1 because you have to keep doing this stuff. It's not a one and done.
You've got to track it once and then come back to it a month from now. Come back to it three months from now.

Speaker 1 And I feel like I've made it not scary. I've made it fun and easy and accessible.
And in six weeks, we can see at least like Billy Klein's results, 30% net profit increase. So that's what it is.

Speaker 1 Six weeks to financial freedom. And the website's profitstofreedom.com.
Super simple.

Speaker 3 Profits to freedom.com.

Speaker 2 I'm going to see Billy here soon here in Dallas. I got a couple of people.
And the deal is,

Speaker 2 he's killing it. He's making more money than he ever has.
But ultimately, what I think that I realized now after meeting, I mean, Ryan Davis is amazing, you know, Pat Clark.

Speaker 2 I see these businesses and I'm like,

Speaker 2 the real deal is how do you make the phone ring off the hook?

Speaker 2 The whole formula that I just explained to you, Megan, is really once you get that formula to where you need it to be, conversion rate, average ticket, and booking rate.

Speaker 2 Then you're just pouring fuel in. It's like putting gas.
And sometimes you got to dump a lot of gas in there. And that's the phone call machines.

Speaker 2 You got all your KPIs dialed in, then you're just pouring gas on them.

Speaker 1 And I remember the day that Tommy and I had that call and he's like, okay, you're ready to like light it on fire, aren't you? And I'm like, I am.

Speaker 1 It took me a while to build it, but when you build it, then you just pour gas on.

Speaker 3 And here's what's beautiful.

Speaker 2 It's you can pour gas on this thing and you're going to come up with new problems, but you can continue to pour gas.

Speaker 2 And then you realize, oh my gosh, I poured enough gas on to renegotiate with my vendors. I poured enough gas on to renegotiate with the trucks I buy and the uniforms I buy.

Speaker 2 And now I can buy tools on a discount. All of a sudden, when you pour enough gas, there's all these whole new horizons of new,

Speaker 1 you can hire good people. You can pay them good money.
You can take time off to be with your family. When you get to a point, you can breathe.

Speaker 1 To me, that's what financial freedom means is taking a deep breath.

Speaker 1 And if you're listening to this and you're feeling stressed or your shoulders are sitting high, like we're talking to you, you can fix this. This is very fixable.

Speaker 1 And it's not going to take you five years or 10 years because Tommy and I have done a lot of the pain and suffering already. And we're here to help.
So yeah.

Speaker 3 So what do I learn to sign up, Megan?

Speaker 1 How do I get to your profitstofreedom.com and use Tommy's code Tommy50 for 50 bucks off?

Speaker 1 I'm practically giving it away, but I learned early on in my career, I can't give it away because then nobody treats it with respect.

Speaker 2 Well, I give a lot of stuff away. And, you know, that's the problem is, is when they don't have an invested, financial invested interest, what happens is it goes out one ear and in the other.

Speaker 2 I mean, the fact is now,

Speaker 2 I understand now why I pay for what I do for Al Levy. I didn't at the time until I'm like, he should have probably charged me three times as much.

Speaker 2 Don't tell him I said that because they'll figure out a way to back charge me. But ultimately, you know what I find is I think his stuff is like 10 grand, something.
I don't know.

Speaker 2 I paid thousand times more, so much more. But yet people don't do it.
They don't stand up for Al Levy. They don't sign up for years.

Speaker 2 The biggest problem I have right now is they know it's there, but they also know the gym's around the corner, they don't want to work out, they've chosen not to fix it.

Speaker 2 The people that are listening that know they need this, it's not about the money, it's about an investment. And I don't care, literally, like to me, I'm not going to lose sleep.

Speaker 2 I just feel bad because the answers are right there. You know, it's like, look, you know, you need to get on a diet because the doctor said it's not healthy, you know, you need to do it.

Speaker 2 This is your business health, and I think there's nobody better. I think you and Alan, just there's stage.
And I know you guys have shared stage because Alan is like old school.

Speaker 2 Don't ever tell her I said this, but you're like the new school. Make it fun.

Speaker 1 You know, Ellen Rohr is amazing. The way I became friends with her and Tommy is very similar.
She was a keynote speaker at a conference. I ran up to her and I was like, you have to come to my class.

Speaker 1 We are going to be friends. And then we became very good friends.
And her book, How Much Did I Charge?

Speaker 1 and Where Did the Money Go, are books that I read over and over and over again because they are so simple. She makes it stupid simple and yet nobody does it.
So we've got to.

Speaker 3 Do it.

Speaker 2 Take action. I can't tell you guys enough.
Take action. Listen, call Megan up and tell her where you're at right now.
Listen, she's a really smart, but she's a very considerate person.

Speaker 2 She'll help anybody who asks her one way or another. They'll be there.

Speaker 1 And looking at you very closely, like if you give out my cell phone number, I will throw it.

Speaker 3 I'm not giving out your cell phone.

Speaker 3 I got it. I literally

Speaker 1 thank you for this.

Speaker 1 Profitstofreedom.com. Tommy50 is your discount code.
And we'll get those calculators in the show notes.

Speaker 2 So, oh, by the way, yeah, we'll get them in the show notes.

Speaker 2 So, Gianni, I've pretty much told everybody that I want to get, I'm working on the best books that I've read, getting a discount for the books, too. So, appreciate you, Megan.

Speaker 2 Thanks for doing that for us. And great conversation.
Literally, I've got a lot of notes of things I want to do. I want to find out a little bit about this bird flow, but I will talk to you later.

Speaker 2 Let's connect later on this evening.

Speaker 1 Okay. Bye, Tommy.
Thank you guys.

Speaker 2 Hey, guys, I just wanted to thank you real quick for listening to the podcast from the bottom of my heart. It means a lot to me.
And I hope you're getting as much as I am out of this podcast.

Speaker 2 Our goal is to enrich your lives and enrich your businesses and your internal customers, which is your staff. And if you get a chance, please, please, please subscribe.

Speaker 2 You're going to find out all the new podcasts. You're going to be able to ask me questions to ask the next guest coming on.
And do me a quick favor, leave a quick review.

Speaker 2 It really helps us out when you like the podcast and you leave a review. Make it four or five sentences.
Tell us how we're doing. And I just wanted to mention real quick, we started a membership.

Speaker 2 It's homeservicemillionaire.com forward slash club. You get a ton of inside look at what we're going to do to become a billion-dollar company.

Speaker 2 And we're just, we're telling everybody our secrets, basically. And people say, why do you give your secrets away all the time?

Speaker 2 And I'm like, you know, the hardest part about giving away my secrets is actually trying to get people to do them. So we also create a lot of accountability within this program.
So, check it out.

Speaker 2 It's homeservicemillionaire.com forward slash club. It's cheap.
It's a monthly payment.

Speaker 2 I'm not making any money on it, to be completely frank with you guys, but I think it will enrich your lives in further. So, thank you once again for listening to the podcast.
I really appreciate it.