Adopting Performance-Based Compensation to Scale Your Business Sustainably

Speaker 1 If you're going to be paying people money to do things for you, make sure that, especially if it's incentive-based, it's inspiring them and not manipulating them.

Speaker 1 Because if you're manipulating behavior, it might short-term work, but long-term usually blows up in your face.

Speaker 1 If you're inspiring people to be better and actually helping them find things inside of themselves that they didn't even know was possible, then it's going to the right place.

Speaker 1 And I think money in general, and especially the more you have it, and Tommy, I'm sure you'd agree with this.

Speaker 1 Money is a form of energy, it's a form of transaction that it exemplifies what is already already there. It brings out more of what already exists.

Speaker 1 And if money is being used to manipulate people at a higher degree, then that's what you're going to get in the end.

Speaker 1 But if it's being used to inspire people and drive people past what they normally would do, then that's what you're going to get in the end.

Speaker 1 And just be very intentional about what that money is actually used for and your intentions behind it as well.

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 3 Now, your host, the Home Service Millionaire, Tommy Mellow.

Speaker 3 Welcome to the Home Service Expert. I'm Tommy, and today

Speaker 3 we're going to be talking a lot about hiring and operations because you guys know one A player equals three B players and stacking the deck.

Speaker 3 I just got out the phone with a private equity company when I said I'm more interested in my internal customers than my external customers because that's where my family is.

Speaker 3 And these guys, they pay my bills. So Danny lives in the most beautiful house I've ever seen with the most amazing view I've ever seen.
I haven't been there personally. I'm jealous.
He's from Canada.

Speaker 3 He lives in Canada. He's the managing partner of Breakthrough Academy, president of,

Speaker 3 well, he was a BEST, Best Mindset Group, college pro HR manager at Western Canada. He's been on the podcast a couple of times.

Speaker 3 At 20 years old, Danny took a leadership position for a franchise company and grew sales 300% in one year.

Speaker 3 And over the next six years, he was managing over 150 staff in the organization. Today, Danny has shifted his focus on helping external contracting entrepreneurs with Breakthrough Academy.

Speaker 3 In just six years, Breakthrough Academy grew from 370 active members with over a billion in revenue and 41% net profit increase per member in 2019.

Speaker 3 It was also rated Canada's 16th fastest startup by McLean's magazine. Danny, it's always a pleasure.
I think your podcasts are just brilliant, and a lot of people get a ton out of this stuff.

Speaker 3 So I'm excited to have you on today.

Speaker 1 Hey, man, thanks for having me. And just so everyone knows, that's not a billion dollars of our revenue.
That is a billion dollars of our members' revenue. We are not there yet.

Speaker 3 So, been a hot minute since we spoke last. We're in an economy now that

Speaker 3 getting the right people is becoming harder and harder. I've got companies begging me to buy them every day.
They can't get parts. They can't get labor.
They can't get to the jobs for three weeks out.

Speaker 3 It's nothing new to hear that, but it keeps getting a little bit worse. Human capital is an issue.
But let's hear what's going on with you the last few months. We haven't spoken a whole lot.

Speaker 3 I want to hear what's new in your life. You had the flu, and I don't even want to call it what it is, but

Speaker 3 you did well. It looks like you're back at it.

Speaker 1 I did fine for me, anyways. It was no issue, so yeah, that was good because you know, if anything, I've got some antibodies now.
There's no wondering what this could be for me, anyways, for my body.

Speaker 3 And good, just get back at it.

Speaker 3 This is a controversial topic, but I don't really care. Um, did you get the vaccine? No, see, I've already had COVID, and I got the antibodies, I got to get tested for the antibodies, but it's like,

Speaker 3 you know, this isn't a politic show, so we'll go into home service. But sure.

Speaker 3 So tell me what Breakthrough Academy has been up to. What's the newest, latest, and greatest? What's the big topics going on in your world? And I'm excited to get talking about this.

Speaker 1 Yeah, we've been

Speaker 1 working on a lot. I'm sure a lot of companies through, you know, since this pandemic started have had time to really internally look at, hey, how do we make improvements? And what do we do?

Speaker 1 We've done that with a lot of our members and we've done that a lot ourselves.

Speaker 1 And so, you know, some of the big stuff that's just launched is we just launched something called our contractor quick tools, which is basically public domain, like, you know, free access to courses that we feel really would hit the nail on the head for a lot of people.

Speaker 1 And we designed them specifically for the public.

Speaker 1 So there's a walkthrough video, instruction manuals with like a step-by-step process on how to build out parts of your company, and then example files and templates to use.

Speaker 1 So a couple of people on our team spent about six months building it, and it's something that we can offer to the public for free now, which is awesome.

Speaker 1 So those are launched as of about a month and a half ago.

Speaker 1 And then in coinciding with that, we built our own facing brand called contractor evolution which consists of a podcast blog articles our top-tiered webinars like i said there's free resources we're giving away it's kind of like a freemium version of breakthrough academy to get people kind of some value into the public and let us have a voice so that we're not just talking to our members all day long but we can actually talk to the public and provide some good good help so that is what's been going on and then yeah i guess the last thing it'll be announced next week to our members.

Speaker 1 So they'll know more details on this. So I won't say too much right now, but we are officially doing our winter summit, which for most doesn't mean a ton, but that's our annual get-together.

Speaker 1 So, we should have about 300 people there, and it's all members that I've been working with for years coming together for a good time. So, we've got a lot planned for that.

Speaker 1 It's the first time we've done that since this pandemic kicked off, so we're stoked because a big part of what we do is you know, noogies and handshakes and hugs.

Speaker 1 And I've not been able to do that a lot lately, so excited to get back.

Speaker 3 Not a lot of nowhere. Is that waiting for next week?

Speaker 1 Yeah, it's all next week. It's all under wraps.
So all I can say is that we are doing it.

Speaker 3 Do you have to say A is like

Speaker 3 ah, or do you say A?

Speaker 3 I don't know if that makes sense.

Speaker 1 What I'm saying about the event though, Tommy, is you may want to be there and it might be quite easy for you to be there. So oh, good.

Speaker 3 Okay. So California.

Speaker 3 Not quite.

Speaker 1 I'm not giving, no, it's not, I won't say location, but I'll just say that it's in the States.

Speaker 3 Okay.

Speaker 3 So, you know, let's dive into

Speaker 3 one of the things I get all the time with hiring is really,

Speaker 3 you know, I got a book right here on my desk. It's called 1501 Ways to Reward Employees, and most of them don't cost money.
But money's how we pay the bills.

Speaker 3 You know, people say not everybody's after money, but I know a lot of people don't want to make minimum wage, even if you give them all kinds of cool lunches and dinners. So let's talk real quick.

Speaker 3 about performance-based pay

Speaker 3 and what are the big advantages and disadvantages of performance-based pay?

Speaker 1 Yeah, I mean, it's interesting because we've definitely grown up in a society where we feel like the more you pay somebody, the better they'll do, right? But that's not always true.

Speaker 1 And that does hit, I'd say, a bit of like a law of diminishing returns over time. And especially if you don't organize it well.

Speaker 1 So for those who have put in performance-based pay, some of those maybe not, I mean, the things I've established and seen is it does give direct accountability.

Speaker 1 So you can say, hey, like these are the things we're paying you for to specifically achieve. And you can track that with them and that becomes more meaningful, which is huge.

Speaker 1 i think for a lot of business owners you know especially as you're growing your business it is nice to sometimes have a bit more of control over the costs things don't run away like if you have your production team that has no care in the world how long it takes them to produce a job versus if they have some performance-based pay on how long that takes and the quality of the job they're tied to think a little bit more like an owner which is huge and

Speaker 1 you have to do this right but i find a lot of times owners are they're feeling like the boss all the time, just having to bark orders to get things done.

Speaker 1 And this can help align the company goals with those individuals' goals.

Speaker 1 So you don't have to feel so much like a boss, but you can, if you do this right, and we'll talk about this today, feel a bit more like a coach, that everyone's in it together and everyone scores together and everyone wins together, which is huge.

Speaker 3 A word to the wise, buy yourself a whiteboard

Speaker 3 and do not roll out performance pay until it's hard to take it back, just like Social Security. Once you give it, It's very, very, very difficult.

Speaker 3 L E V has taught me: make sure you run the numbers inside out

Speaker 3 because you will have hell to pay if you play with people's money all the time. So I love performance pay, but I've screwed up dozens of times on it.

Speaker 3 And, you know, for example, my managers last year were based on a pay salesless materials.

Speaker 3 So if salesless materials went up,

Speaker 3 Right. Take the material cost out of the revenue and the taxes out.
And that's the number. Well, I didn't plan on 100% inflation on the cost, which inevitably caused our numbers to go up

Speaker 3 because the dollar is worth a lot less than it used to be. And so I didn't plan on rapid inflation, which was, I guess, we're up 120% of what we were at the beginning of the year.

Speaker 3 So you know, prices have been going up. So a big mistake.
And here's where actually statistics come in.

Speaker 3 You learn a lot about finance and statistics and standard deviations and the mean and the median and how significant those numbers are.

Speaker 3 And that's what I've learned to kind of base things off of is compared to the cohort that you work with, instead of basing things on an arbitrary number that you have no control over, if prices go up, inflation happens.

Speaker 3 I don't think we're going to hit any deflation because the plan of the Democrats is to release $5 trillion into the economy.

Speaker 3 But anyways, so would you say incentives work on every type of task, like a CFO or a linesman, or where are you going to draw the line there?

Speaker 1 Yep. So it's funny.

Speaker 1 And so I've seen this for many, many years, going back to my days doing franchising, working working with middle management, you know, now working with Breakthrough Academy, not only with our own team, but also within all the members we work with.

Speaker 1 There is this really interesting psychological study that was done. I first saw it on TED Talks like 10 years ago.
And I was like, that is so true. And we do not reference it, I think, enough.

Speaker 1 And this is what it talks about. It says, compensation and incentive-based pay works extremely well for basic tasks.
And it actually almost does the opposite for complex tasks.

Speaker 1 And what they did is a study on, and I I can't remember the exact tasks they had people do, but I'm just going to make these up and give you an example of this.

Speaker 1 One was on, let's call it ditch digging, and the other one was on like building a bridge out of popsicle sticks.

Speaker 1 I think I can't remember the exact ones, but they basically had a control group, and then they had an incentivized group in each one of those tasks.

Speaker 1 The ditch diggers, long and behold, you know, when incentivized, dug that ditch faster than anybody else that was not incentivized. Worked every time, data was very well proven.

Speaker 1 The people that were incentivized versus the people that were not, the incentivized people built bridges that broke quicker and were not as structurally sound.

Speaker 1 And the conclusion that came out of it was that when you put incentive-based pay, especially when it's quite a bit of incentive-based pay versus their base, you blind people from the task at hand and they start to just try and get to the result to get the money and the problem solving gets diminished.

Speaker 3 Well,

Speaker 3 let me just ask you this.

Speaker 3 I believe in specialists. I don't believe you should have a CSR that's a dispatcher.
I believe in a salesman versus a tech versus an installer.

Speaker 3 And if you could break apart the complexity of the role by getting a specialist, you see, when you have to build a popsicle

Speaker 3 bridge, there's someone that knows integrity of the bridge. And what I would say is I think you'd want to limit it to a few KPIs if it goes out of that.

Speaker 3 If it says, the bridge needs to do this, this, this, this, this, then we're going to judge it by the design, this, this, this, this. I think that's when you go, wow, this is tough.

Speaker 3 And you know, there's something else I want to talk about. And I think you hit the nail on the head there, but we got to also discuss equity incentive programs, rev share,

Speaker 3 and a couple other things when it comes to this stuff, because those complex tasks, if it's on everything overarching, that's what profit share means.

Speaker 3 And that's what an equity incentive program or What is it? It's fake equity until it changes a hand.

Speaker 1 Are you talking about profit sharing or what are you talking about?

Speaker 3 There's a profit incentive program, equity incentive program, and then phantom, phantom equity. So they're the same thing.
So, but I'm kind of getting off on a tangent here.

Speaker 3 So where do we start out then? So typically you have three things. LEV has always taught me the triangle is CSR, dispatcher, technician.

Speaker 3 Do you believe all those roles can be put into a performance pay situation?

Speaker 1 Yep. And to varying degrees.
So everyone in our company has some level of a bonus structure. Everybody.
So we do that for a couple of reasons.

Speaker 1 One, I think intrinsically, I want our people to feel like they can get something for doing more, for going above and beyond. And I've always said that to my team.

Speaker 1 And I think for a lot of the contractors we work with, I always try and help them see it too. It's like, look, if you're giving away money beyond a salary, it should be for going above and beyond.

Speaker 1 And that should be the perception of it.

Speaker 1 Because if it's, hey, this is what I get paid to do my job, for the most part, unless we get into like strictly just like, you know, people that are commission-based,

Speaker 1 doing your job is that's the hourly wage you're getting or that's the salary that you're getting. Going above and beyond is what the incentive is for.

Speaker 1 And that also helps a lot with what you were just saying around people getting titled to like, hey, this is how much I make. Why are you taking this from me now?

Speaker 1 It's, no, this is because you went above and beyond. And that's a really important thing to distinguish.

Speaker 1 So yeah, whether it's our administrative staff, our sales staff, you know, production staff, everybody has something they're trying to work towards that they can still live without it, right?

Speaker 1 Their needs are still met, but their wants aren't. And that's where these incentive-based pays kind of kick off.

Speaker 1 I know that there's certain areas like commission-based roles, which we can talk about if you'd like to as well today, where it's a little bit different.

Speaker 1 But for the most part, when people are high in emotion, aka can't pay their bills this month because they didn't hit their targets, they're low in intelligence.

Speaker 1 And when you put your people into a constant state of high and low,

Speaker 1 unless it's a basic task, it can impede on their ability to be 100% them. And they start to lose themselves a bit as a result.

Speaker 3 That's really interesting. I do think that

Speaker 3 what I tell people to do when they're thinking about an incentive program or a performance pay,

Speaker 3 the biggest mistakes I see is a lot of the things they pick are out of their hands. So they might say, the CSR,

Speaker 3 I'm going to give you money based on

Speaker 1 their job description.

Speaker 3 Yeah.

Speaker 3 And the problem is, yes, if they set the call up for success. But really, that's really difficult to pay the CSR on the ticket total.
But yet people do that. But here's what happens.

Speaker 3 Some good things happen is they try to give the number one guy at sales all the jobs, but then the next CSR goes, well, why are they? And then it turns into this internal conflict.

Speaker 3 And then it's like, and it just doesn't make sense. So a lot of times we pick the things that are out of their control.

Speaker 3 So how do you stop that?

Speaker 1 Yeah, I mean, there's no one, I wish in a podcast, I could explain exactly how you stop it, but the best thing I could say is, is first, you need job descriptions.

Speaker 1 If you don't have job descriptions, don't even think about incentive-based pay because you're just going to create a misalignment all day long, especially for where you're heading in the future of the company.

Speaker 1 Once you have job descriptions and people have very specific things that they do and they don't do, and there's a production line of passing the buck down from lead all the way to invoice, and they know what part they do, now you can stare at that job description and say, what are the things that this job description does every single day that would benefit the company if they did it better or if they went above and beyond?

Speaker 1 That's the stuff that they should be focused on.

Speaker 1 right so every company that's going to be different but if you haven't even defined what people's jobs even actually are and you're already putting in bonuses you've skipped a step and you're going to create an animosity you're going to create misalignment people are going to feel yeah like i couldn't hit my goal because i'm not even in charge of it because you haven't structured it properly you know i got a scenario for you that's actually happening right now day one we came out with this program called the pinnacle club and it's for my technicians and if they hit a certain customer satisfaction, conversion rate, and average Saleshouse material ticket, they get to go.

Speaker 3 Well, three of my top guys came up to me and they're disqualified because they were in a different role at the beginning of the year and they switched back to tech.

Speaker 3 And, oh my God, you don't want to piss off these guys because they're amazing guys and they're great at what they do.

Speaker 3 And you also don't want to change the rules, which the rules were never said that if you, if they still hit those marks, and it's like, hmm.

Speaker 3 It's interesting. And it's these little things that you rock the boat.

Speaker 3 It's almost like when you have incentive pay it's great until someone feels like they were taken advantage of and maybe they were part of the team and didn't get the credit how do you deal with that and i love your answers by the way they're so well thought out and just very uh well spoken yeah these are hard questions man

Speaker 1 okay a couple things one is what you dealt with i've dealt with too right so like you set up something you think through it you think you thought of all the variables and you release it and it doesn't really work out one of the best things i've seen with our members even because a lot of times they'll come in with us and they don't fully know their numbers.

Speaker 1 They don't fully know, you know, what their year-end averages are and stuff like that.

Speaker 1 They get excited about bonus programs because, like, we told the guys we're going to start this management program. We're going to get them bonuses.

Speaker 1 And I'm like, that actually might take you one to two years to roll it out. And they're like, well, what are you talking about? I'm like, you don't know fully.

Speaker 1 all the ramifications that are going to go in place.

Speaker 1 So for why don't we for a year to maybe even two years track it, even have something small that people can get as a result of it, but make it less transactional, make it less about money, make it more about like you even have like a trip or a prize.

Speaker 1 And let's see how things roll out. Because after probably one to two years, you're going to get all the kinks ironed out.
And I've tried to, man.

Speaker 1 Like I thought through our sales team bonus structure and like the next year, I changed it.

Speaker 1 And the next year I changed it again because it was, you know, first it was an annual bonus that was too long. Now we've gone to the quarterly that works extremely well.

Speaker 1 And then we've got like, you know, certain on sales and then on setups. And

Speaker 1 I needed a couple of years to kind of like play with it, if that kind of makes sense.

Speaker 1 And I would just say to a lot of entrepreneurs, because a lot of us are hyper, like just go, go, go, make things happen tomorrow.

Speaker 1 Something like this, when you're playing with people's livelihoods, take time, slow down to do it once well. Because it's like you said, and you've experienced, I've experienced it too.

Speaker 1 It's hard to pull back once you've started. So I don't know if I have a fix for you for how to do it moving forward.
Other than, again, what I've done is just conflict resolution, right?

Speaker 1 Let's sit down with a guy. Let's be human with them.
Let's figure out where my mistakes lied and where their expectations lied and find common ground.

Speaker 1 And that's a one-on-one talk that has to come come out of that.

Speaker 1 But to learn from that would be to, okay, you know what? It's going to take us a year, maybe even two, to get this right.

Speaker 1 And let's not put too much weight on these incentives until we know what we don't know right now.

Speaker 3 You know, at Christmas, we set up a really very sexy scorecard. And

Speaker 3 to my mistake, I wanted to put driver score on there. And the other

Speaker 3 great, amazing people around me said, driving is non-negotiable. If they suck at driving, they need to get fired.
You know, and I said, no, you're very right at that. I agree with that.

Speaker 3 So, putting some things on, like you need to be dressed well, or your truck needs to look okay, and you need to keep it clean. Those should be non-negotiables, those should be your duty.

Speaker 3 And I think a lot of times, and I've made this mistake of putting things that you're just, this is your job. You know, you don't smoke in the van.

Speaker 3 I'm not going to reward you for not smoking or not being on your cell phone.

Speaker 1 You know, like, oh, yeah, I'll give you an example of this on like a management level. Again, going back to like your base pay is to do your job.

Speaker 1 Like everything that's in your job description, that's why we're paying you 50, 60, 70, 80,000 a year. It's a lot of money.
So hopefully you're doing the things that are written in there.

Speaker 1 To go above and beyond is where I really want to incentivize behavior. So like to make you better than you currently are.

Speaker 1 And so like a project manager, one of my best bonus structures I ever figured out was to help them have what we call the gross profit driver.

Speaker 1 So it wasn't a revenue driver and it wasn't a profit driver. It was a gross profit driver.
So the profit made after labor, subs, and material.

Speaker 1 And what I would say to them is this, you know, use hypothetical numbers. I want you to produce a million dollars this year at a whatever, 40% gross profit margin.

Speaker 1 So essentially I'm saying to the person, I want you to bring the company $400,000. And that's why I'm giving you this, it's called $70,000 salary to do that.
It's fair enough.

Speaker 1 I've got to pay for overhead. I've got to pay for all these other things and I want to make a profit.
And part of that 400 grand is going to go straight towards your salary anyway.

Speaker 1 Now, you want to make more money. I want to make more money.
To do this together, I want to give you 10% of all the gross profit made over 400 grand.

Speaker 1 So if you make $450,000 next year, I'm going to give you $5,000 bonus because it's 10% of what's over 400K. And you can do that by producing more.

Speaker 1 You can do that by producing that million dollars more profitably or the combination of the two. And that gives them A, a baseline where it's like, you still got to produce 400K this year.

Speaker 1 Like that's your job.

Speaker 3 But if you want to go above and and beyond what i've budgeted then you can make yourself more money and me in turn as well and now we're in it together but again we're going above and beyond i'll tell you you guys listen to this this is true i've done programs like that the problem is then i say you know what you're a better closer i'm going to get appointment centers for you then i say you know what you're better at closing high ticket items so i'm going to make you i break up the divisions and create specialists among and then all of a sudden they're like well i hit my numbers numbers, you know, second quarter.

Speaker 3 And you're like, shit. And you know what? So that's why I think you said you got to take some time.
And that's what you develop a company.

Speaker 3 Because when you're young in a company, you know, there's a lot of people listening that work for me or are going to listen to this. So got to watch what I say.

Speaker 3 But, you know, I always thought if we get a top producer,

Speaker 3 just pay the trainer good money. Then I realized, well, there needs to be more trainers.
Then we got to hire recruiters. Then we have to have people train them 60 days into it.

Speaker 3 So, all these things that I thought, man,

Speaker 3 and then all of a sudden, I was like, the trainer is going to make like $10 million this year about the pay because all of a sudden we got recruiters and we got a great station.

Speaker 3 We brought on more trainers and we brought on more systems and we brought on more consultants that were training too, like personality profiling.

Speaker 3 And it's the cumulative of everything that makes it better. So it's really, you do got to be very, very careful.
And you got to tell people: if I give you this,

Speaker 3 just realize that there could be changes. And I need you to sign something saying you understand that your base pay is not going to change.
You'll always get paid what we agreed upon.

Speaker 3 But if we got to make this thing a little more robust to get you some other people involved, you realize that this might not be the same.

Speaker 3 And it sucks when it happens because you see top producers that are kicking butt getting paid deduction. Their life becomes a little easier, but it's still aggravating for them.

Speaker 1 What you're describing is a company that is growing quickly. So the rules of the game are changing quickly.

Speaker 1 and that's that's true for a lot of us right so like the overhead changes the marketplace changes and i think for a lot of us especially now you're not in this position but i think a lot of people listening probably would be when you're a smaller company it is kind of like in the beginning almost like yeah i could give them a percentage of this and then a percentage of this and then i'll have my percentage and then it's safe it's good but they're not looking three years out or four years out and how that all changes and i've realized too it's like it might

Speaker 1 feel a little bit more like a high risk thing in the beginning but to provide people with good stable salaries that they don't need the bonuses. They're just an added little piece of benefit.

Speaker 1 And then as your company matures and you really start to lock in and know your net metrics and know your actuals and know your overhead, now you can start to kind of expand out and provide bigger incentives for people.

Speaker 1 But in the beginning, it's just like, let me take care of you. Let me pay you what you're worth.
And let me go figure out what we actually have here.

Speaker 1 Once I figure that out, let me come back and provide something that's a little bit more like, you know, incentive-based pay.

Speaker 1 But our company, I mean, every single person we work with, I would much, even on my sales team, I would much rather pay you extremely well, make sure you can live your life.

Speaker 1 But if you want to have that extra nice house or that extra nice car or whatever, these are the things that you know we'll work towards through incentive-based pay.

Speaker 1 Other than that, your bills are always going to be paid working for us.

Speaker 1 I don't want you stressed out, and like you just mentioned, the rules change every year, things change, and I don't want to get stuck in a weird spot where I got to pull back on something I promised.

Speaker 3 Well, I'd rather work somewhere that I get paid a lot less, but I'm not a 1099 and I get insurance and I get PTO and I get a 401k valued. And sometimes lunch is bought.

Speaker 3 And somebody cares about my kids. And somebody cares about my wife.
And those are the things. And it's a family rather than a 1099 contractor that gets shit on all the time.

Speaker 3 And I think those guys that come in here and say, I make more as a 1099, blah, blah, blah, blah, I go, go pay for your own gas, pay for your own truck, pay for your truck insurance, go get an insurance plan.

Speaker 3 pay for a flack we cover aflac at least a portion of it what we pay for the dave ramsey program you add all these things up, you're making way more money as a W-2 for me. And you don't do your taxes.

Speaker 3 So you think you're making a lot of money because you all Uncle Sam for the last 10 years because you never paid taxes.

Speaker 1 There's pros and cons. I see in the roofing industry, it's very 1099 driven.
And I also see that there's models that are pretty well proven now.

Speaker 1 Like people kind of know generally, like when you're in Texas or when you're in Colorado, or there's a certain amount that a decent sales guy can.

Speaker 1 book in a year and a really good sales guy can book in a year. And it's the industry has become more and more standardized every year year we go by.

Speaker 1 And I think it's getting to be a little bit easier to understand how to pay a 1099 in that realm.

Speaker 1 But I would say it's 10, 15 years of running 1099s, not just for one company, but for all these companies combined. I see them at conferences sharing what they're doing.

Speaker 1 And it's starting to come down to a bit more of a common denominator. But yeah, it takes time.

Speaker 1 And nobody's going to be able to like just year one of production be able to figure out what the best bonus package is going to be because you have no idea. So be careful not to go too far with it.

Speaker 1 Anyways, we've talked a lot about that.

Speaker 3 Well, you know, here's the thing. I just decided to buy grills, barbecue grills for every single market.
And one of my managers was like, dude, I got the grill. We grill up every day.

Speaker 3 The guys love it. We're attracting so many people because they're close to the distribution center.
Sometimes they even grill for other gouncher companies.

Speaker 3 And I'm like, I love that because it means a lot to me to be able to have lunch. And if you add it up,

Speaker 3 There's so many things you could be doing to create a better culture. And I'm obsessed with culture these days.

Speaker 3 I mean, I think I told you this, Danny, but I used to hate hate the word culture because I was putting out so many fires. I'm like, what the hell is culture? Like, this is crap.

Speaker 3 But I realized I was the problem

Speaker 3 because I was a firefighter. And it's compassion.
It's understanding. It's communication.
How important is that versus their pay grade?

Speaker 1 Again, going back to my background in franchising and just working with hundreds and hundreds of people, I did notice that pay was the number one importance to people up until the point where they could pay for their bills and save, save, say, 10 to 15%.

Speaker 1 After that, pay became like quite a bit less important.

Speaker 1 And where I saw a lot of my franchisees sticking around, our painters sticking around was because what you just talked about with culture, we had a performance culture.

Speaker 1 So we felt more like a high-level sports team than a painting company. And we were all trying to track goals and see what we could hit and achieve and award people for that.

Speaker 1 And it wasn't always money. It was sometimes it was just like you literally get an award at the end of the year.
And it was like the sought after thing to get.

Speaker 1 And that gamification of our business really changed people's mentalities from being transactional with me, right? You pay me this, I'll do this for you, to being a cohesive team, right?

Speaker 1 You think about the sports teams you were part of when you were a kid and think about how much you like sweat, blood, tears, like put it all out there for what? So that you could win the championship.

Speaker 1 What did you, did you get paid for that? Nope.

Speaker 1 But you cared about it a lot. And it's tapping into that same primal nature within the competitiveness.

Speaker 1 That's why I hire only competitive people because they like to win and they've been in competition i don't care if you you're we played in the symphony you understand what it's like to practice you understand what it's like to want to be better at something totally and you can have fun with it and people from there can get a lot more value than just money now is money important definitely and if you're trying to find ways to pay people less you're already thinking the wrong way right like i constantly every year i'm like how can i make my people more money It's so fun for me to be able to have them make tons of money because in return, they bring that value right back to our organization.

Speaker 1 And I tell my team that one thing they know when working with me is I'm not like, hey, like, you missed your goals, too bad. I'm like, no, you're about to miss your goals.

Speaker 1 I want to make sure you hit year end or hit quarter end. I will figure out with you how to make sure this happens.

Speaker 1 And it's my job as their coach versus their boss to get all my players to be like top stats.

Speaker 3 Well, I go beyond that because for me, Every once in a while, every quarter, I go up there and I go, who here is a Harley? Who here is a Bo?

Speaker 3 Who here? Those are all, and I hate to say this, depreciating assets, your snowmobile, your jet ski.

Speaker 3 And I go through this and I say, look, if you can't save money at 40,000, you'll never be able to save money at 100,000 unless we work together.

Speaker 3 Because for some reason, like me and like a lot of people, we're think we're owed something. We worked hard.
We should deserve it and we should go spend it. But the fact is.

Speaker 3 That what if you invested in yourself and in your future? And I think it takes a lot. It takes constant management.

Speaker 3 It's like when I had my weight loss, I was such a horrible leader when it came to this contest. I spent five grand, $3,500, $1,000, and $500.
And we didn't get accountability partners.

Speaker 3 We never talked about short-term success. We didn't celebrate the little wins like not eating any fries for a week.
I could have done such a better job.

Speaker 3 And I think there's a lot of things that go into leadership that's more than just the money. It's teaching people.
We weren't taught in high school how to not bounce checks or get an 800 credit score.

Speaker 3 No one teaches that. So I feel like it's kind of our responsibility as business owners.
And half the business owners I know, they're in debt.

Speaker 3 And so it's a tough thing to do, but when you can do that and you can change lives, it means a lot.

Speaker 1 Yeah. We actually, our own company, we have a podcast coming up on just how do you create essentially this like company brand to your people.

Speaker 1 Like how do you create a brand to the world that your employees are drawn towards, right?

Speaker 1 And a lot of it has to do with that. I keep going back to this one way of thinking.

Speaker 1 Am I every day reinstilling transactional relationships with my people, or am I instilling more of like a unified team mentality?

Speaker 1 And you know, the words that are coming out of my mouth, the words that are written down in their job description, the meetings that we have, the way I support them, the way I spend my time, what am I portraying in all of these areas?

Speaker 1 Am I portraying a transactional, I paid you, so shut up and do your job, or am I portraying a unified, we're in this together? Right? And there's subtle things, right?

Speaker 1 Like the simple use of the word employee versus team.

Speaker 1 Right. And if you're usually used to like, yeah, they're my employees.
As soon as you say that in today's world, they feel less than you. But you're like, yeah, it's my team.

Speaker 1 So like they feel on board with you.

Speaker 3 Hey, I hope you're enjoying this conversation. I just wanted to let you know that we have a special offer from Breakthrough Academy for you today.

Speaker 3 So stick with us to the end and I'll reveal how you can take advantage of it.

Speaker 3 But if you're in a rush, just go to btacademy.com forward slash home service expert and check out our exclusive offer that we put together for our listeners today.

Speaker 3 Okay, now let's get back and continue our chat with Danny. You know, I tend to say my coworkers, and sometimes I catch myself saying,

Speaker 3 you know, my employees, and I'm like, they pay my paycheck. I would not get paid my paycheck, or when we have really good years, our profit.
And there have been a lot of good years. So,

Speaker 3 you know, I really respect the fact no one knows what these CSRs do. Without the CSRs, it calls no good books.
No one knows what the dispatchers do.

Speaker 3 No one knows what the managers and the lead techs do. No one knows what those techs are doing at 130 degrees in the garage.

Speaker 3 And yet, I think what happens with me sometimes is out of sight, out of mind. And I look at some people and all I want to do is go, dude, especially out of state, what do you do all day?

Speaker 3 Show me your calendar. Because it seems like to me, well, here's the worst answer, Danny.
And I think everybody,

Speaker 3 I've been here many times is I'm like, and this is, this is so funny because I always ask to see their calendar.

Speaker 3 What did you do today that you needed to get done that's going to help your life get easier towards a better system or hiring a better person to make your life easier?

Speaker 3 Because to me, a lot of times I talk to my managers and they say, well, I had to fix the dispatch board. Well, I got an answer for that.
I'm just going to call a fake guy, Stephen.

Speaker 3 Stephen, how about I fly you to Arizona to teach the dispatchers to focus on the dispatch board the way you want it? And then they say, well, I had to fix a fire with the

Speaker 3 chain. Well, why don't we go to our supply chain specialists that work here in the main hub and tell them how to handle that? Because I need you doing a few things right.

Speaker 3 You're either growing the market revenue, figuring out ways to make more profit, or you're working on getting a great team together. Those are really the three main things.

Speaker 3 You're growing the market and you're growing the people. You're growing those relationships.
And I know I'm going off on a little tangent here.

Speaker 3 I was starting to talk about how everything applies, but I think sometimes we take for granted what our guys do, but it's our job not to let them firefight.

Speaker 3 Because if you're a firefighter, they always follow the leader. If my desk is messy, every desk is messy in this place.

Speaker 1 Yeah. And you're also just talking about like, what kind of mentality are you creating in people?

Speaker 1 Because what you're describing is people going from like a do-my-job taskmaster mentality to like a problem solver, kind of more like independent thinker mentality.

Speaker 1 And you create your own reality around you every single day, right?

Speaker 1 I even think about with my team, I'm like, I can say to them messages of, you know, you're a part of this and you couldn't exist without us. Or I could send a message of, you're incredible.

Speaker 1 And look what you're creating around you and look at the opportunity that you're doing. I don't even think I could do it that well.

Speaker 1 And just that simple like line of communication changes their mindset. I had one guy on my sales team for years.

Speaker 1 He makes calls. That's what he does.
Makes calls. He calls people, you know, 50 to 100 people a day.

Speaker 1 And that was all he did for like two years. And that was all he ever asked to do.

Speaker 1 And he had kind of a okay mindset around it, but there was times I could tell he just was like losing it because he was just burning out because who wouldn't after making that many phone calls?

Speaker 1 And I remember reaching into him one day and just being like, bro, like, I know you're more capable than this. And I know you have so much more locked up inside of you and you're not using it.

Speaker 1 And we need to address that because it's, you have a better potential to be a better person. And I'm not allowing it.
And you're not talking about it. And we need to get level you up.

Speaker 1 And the first thing I said to him is, I trust you. I trust you with some of the decisions that I'm making right now.
And I'm going to give them to you. And I want you to see how you do with them.

Speaker 1 I knew his capacity was there. I knew his ability was there.
So that was step one for me. But once I knew that, like really laying into him, I trust you.
A year later, like everything changed.

Speaker 1 Like he's now actually leading up our entire like follow-up team and he's like reinventing our CRM for us right now. And he's doing all kinds of cool stuff that's like optimizing our flow.

Speaker 1 And then he came back to me and said, I'm like, like, what's changed? He's like, you told me that you trust me. I never thought you trusted me, just the way you were acting prior.

Speaker 1 And I was like, right. He's like, you're always tracking like how many calls I was making every week and like wondering why some weeks were lower and some weeks were higher.

Speaker 1 And then finally, you just told me you trusted me.

Speaker 3 Like, right. Pretty profound.
That's a good story. You know, part of them is knowing that you believe.

Speaker 3 The other day I had a tech call me. I was in Florida.
This was a few weeks ago. And he said, dude, I feel so bad.
I'm letting you down.

Speaker 3 I know when you were talking about conversion rate, everybody, I get a million calls from all my technicians after a meeting. If I address something, they're like, dude, I know you were talking to me.

Speaker 3 I was like, no, I wasn't.

Speaker 1 I didn't.

Speaker 1 You know, if they felt that message, they're like, he must be talking about me.

Speaker 3 And they call, and he goes, dude, my conversion rate hasn't been to my average ticket. It's not where it should be.
And I said, do me a favor. Let's say this together.
I'm a winner.

Speaker 3 Pull your shoulders back. Put your head up, be a little louder, and smile.

Speaker 3 And here's what I want you to do. When you knock on that door and you offer a coffee before you get there, I want you to play with the dog.

Speaker 3 I want you to say yes, sir, no, sir, and I want you to have fun. He called me back.
We called a couple technicians in between that. And he goes, I had so much fun.
I was smiling the whole time.

Speaker 3 I just walked out with a $7,000 job. And we rejoiced.
We were excited. We clapped.
We celebrated with him. But he needed to believe in himself as well.

Speaker 3 And I think sometimes we don't know what's going on at home. And that's one of the things I try to do is go out with the significant other that they're part of the business too.

Speaker 3 And you got to see how that relationship is because something could be happening at home or with your kids or anything else.

Speaker 3 And a lot of times you bring work home and a lot of times you bring home to work. So it was a profound having this talk with him.
And like you said, believe in yourself. You are amazing.

Speaker 3 And it's what's hard about interviewing people because I'm like, dude, I need direct eye contact. I need tonality.

Speaker 3 I need to know that you believe in yourself because I can't, I don't have the time like Starbucks has to fix people, to make them believe in themselves. Not with the way I'm trying to grow.

Speaker 3 I need somebody that can look me in the eye and say, look, I'm a good person. I love myself.
And sometimes I just got to remind them.

Speaker 1 A really good environment for that. What you're kind of describing is just like you're coaching people.
So you're coaching them more just on their numbers and skill.

Speaker 1 You're actually coaching them on their mindset. So we, and I still do this with my staff.
We do this with all of our members. We institute something called GSNR.

Speaker 1 And I think you might do something kind of like this, goal setting and review. And it sounds very like we're going to set goals.
We're going to review them. We're going to look at numbers.

Speaker 1 But it's surprising how many of those meetings turn into, how's things going at home? How's your workload? Where are you at right now?

Speaker 1 Like always starting starting with that personal side and being somebody who, you know, I did GSNR since I was 18 years old at College ProPaners and moved through the ranks of like doing it for franchisees.

Speaker 1 And now I do it for my staff and now we teach all these members. I'd say like 30% of those conversations have nothing to do with numbers.

Speaker 1 We actually don't talk about it for the week because it's not relevant because trying to figure out how to get two more leads this week or get four more hours produced or it's going to ring on deaf ears because there's something else going on.

Speaker 1 And if you have that regular cadence of meetings, like ours is every Monday, half an hour per per report, right? So you might not do it with your whole team, but you'll do it with your direct reports.

Speaker 1 Your direct reports will do it with their direct reports and so on. It catches a lot of that stuff early before it becomes systemic.

Speaker 3 I love that. And, you know, we're hiring a dream manager right now.

Speaker 3 And I want to know, Danny, your dreams, because your dream is not for me to become a billionaire, I don't think.

Speaker 1 Maybe it might be, but I don't.

Speaker 3 So what are your dreams? Because if we can help you accomplish your dreams, I just love the notion of becoming a a person that's trying to help others accomplish their dreams.

Speaker 3 And, you know, I love the idea of just

Speaker 3 giving.

Speaker 3 Because for some reason, when God's been good and plentiful to us, I feel like we want to give it back.

Speaker 3 And everybody that I've ever went to and visited their shop, they opened their doors to me and gave me everything.

Speaker 3 And they've been very successful and they pay it forward.

Speaker 3 And now I told my guys yesterday at our Thursday morning meeting, I said, guys, not to sound sound condescending or cocky, but God has been good as far as financially to me.

Speaker 3 I don't need to work anymore. I don't need to be here Monday through Friday.
I'm coming in Saturday. I'll be here Sunday.
I don't have kids and I'm not married. So, but

Speaker 3 I want you guys to know that my goal and my dream is for you guys to hit your dreams. And that means we're going to celebrate the home ownership.
We're going to do these fun things.

Speaker 3 We're going to make sure your life is set up. And I'm not going to give you, you know, job versus a career.

Speaker 3 I'm going to give you a better life you guys are going to run with me come with me if you guys hate me

Speaker 1 then you can go work for a competitor but i promise you your life will change when you work here and that's it's exciting because i really really want that yeah it's important for you to know too and and to even express this to them there's no such thing as altruism there's no such thing as a selfless act and it's not just money that is always going to be the beneficial thing for you you're like i actually personally get a lot out of seeing you guys succeed you're getting a lot from that oh no yeah

Speaker 3 Somebody dies. We're selfish that we cry because I believe they're in heaven.
So you're right. I'm selfish that I want them to succeed because I could say I was involved with it.

Speaker 1 You are, man. You love seeing people grind and pound and make something out of themselves and know that you had a little bit to do with that.
Exactly. That's why you're doing this podcast.

Speaker 1 That's why you do a lot of these things. And it's important just to realize that for yourself and let other people know that too.
And be like, look, I am greedy.

Speaker 1 I'm greedy because I really like seeing what happens and know that I had a part of that. But the best part is you're going to benefit from that too.

Speaker 3 I'll tell you what, you know, part of being an influencer is what started to happen with the podcast and speaking on stage quite a bit is I realized this thing called affiliates. And what happens is

Speaker 3 I genuinely believe in somebody and they say, let me pay you my marketing fee. And then what I say is I'll take that money.

Speaker 3 instead of having all these sponsors on these podcasts and i'll promote the podcast to get more listeners because it costs money to pay facebook It costs money to pay Instagram.

Speaker 3 And I'm not going to take money out of A1 because that's not fair to my employees.

Speaker 3 So, if somebody's willing to, if I love them and I cherish a company and they say, Hey, Tommy, what I'd like to do is throw you a few bucks because you've helped me succeed and your outlet has.

Speaker 3 Then, what's so cool about it as an influencer is I could take that money and get the message to more people. So, all around, it all becomes this equilibrium that feeds the beast.

Speaker 3 And I don't feel bad doing it. And the people I work around don't feel bad doing it.
And I love it because it's genuinely things that I care about.

Speaker 3 Take for instance, for example, if I had a guy that was just amazing at Google or something, what's so cool is I will never stand behind somebody.

Speaker 3 And I know 100,000 people probably that got screwed over by a Google guy. So if I could promote it and say, this is a good guy.
And he's like, dude, you changed my life because I do a good job. Look.

Speaker 3 This thing has definitely changed. I owe everything to the podcast because Val Levy came on the podcast and decided to go to lunch with me and teach me about manuals.

Speaker 3 Then I had Dan Antonelli teach me about brand. Then I had Ken Gooders come on and teach me about buying company.

Speaker 3 And literally, they wouldn't come on unless it was entertaining and we were helping people. So people say, what's the catalyst in your business?

Speaker 3 And I'm like, it was the podcast because people now want to talk to me. They didn't want to talk to this firefighter, Tommy Mellow, before the podcast.

Speaker 1 Here's an interesting concept. Actually, our event's coming up in January.
One of the things I say at almost all of of our events is I'm like, look, you guys are all here.

Speaker 1 You guys all have needs and wants and business interests and hope of what you'll get from this seminar or this thing we're doing. Approach it like this.
Everywhere you go, figure out how can I help?

Speaker 1 How can I give? And if you all do that, all 300 of you here this weekend watches 300 people do the exact same thing to you.

Speaker 1 Now, instead of just one person trying to draw as much as they can and pull out and whatever, get what they can get, everyone's focused on each other.

Speaker 1 And it's a very small tweak to how the conversation goes with people.

Speaker 1 But I do feel, and I, and I see it even in business right now, like more and more business owners need to understand that because we all know so much, but we have to be willing to work together because as big as your business is or my business is and other people's maybe like we're all still pretty small fish in a pretty massive pond.

Speaker 1 Like there are organizations that are just eclipsing anything we could ever even dream of. And if we're all going to work against each other and all of that, then we're never going to get anywhere.

Speaker 1 But things like this podcast and like these programs and some of these guys you're working with, like we can work together and actually pool resources and do something much greater than even just one individual company, which is cool, which is exactly what you're experiencing.

Speaker 1 I've seen it time and time and again with our membership.

Speaker 1 And we're getting out of this compensation incentives things, but just the message I always say to entrepreneurs is like, try to find ways to develop non-transactional relationships.

Speaker 1 And you'll find way more comes out of that, both with your employees, your customers, your competitors, everything around you.

Speaker 1 And that's, if there's one like thing that I've really focused on and even building Breakthrough Academy is like, I don't need to make this the most profitable thing on the world.

Speaker 1 I don't need to be the guy who's like, I've invented all this because the truth is I haven't. My team has.

Speaker 1 And it's like, if I can just figure out how to bring people together and help people kind of almost like hold the space for everything to kind of become more productive, then I've done my job.

Speaker 3 It'll grow infinitely. It'll grow exponentially if you do that.

Speaker 1 Yeah. And it's less effort, which is interesting.

Speaker 1 right you don't have to pull the rock uphill all by yourself the whole way through everyone will do their strengths and do their part it's true in your company it's true in you know your working relationships it's true in your family you know i'm just because look i'd rather have a podcast like this yes i like to stay focused but if it goes somewhere this one is going everywhere and i love it because

Speaker 3 you know for me i was on this podcast yesterday for this pest control company cool dude and he shows me he sends out these letters to every single pest control company in his markets to buy them.

Speaker 3 And there's this amazing book right here by Chet Holmes called The Ultimate Sales Machine. And then there was a student of this guy who wrote this book called The Dream 100.
It's a $100 book.

Speaker 3 And in the book, he says,

Speaker 3 learn how to identify your perfect hundred.

Speaker 3 Me, I got clients that spend over a million dollars a year with me. If I find a hundred of those, That's a hundred million dollars.
It's very easy. Now, what can I do to get a hundred people?

Speaker 3 Well, you know, all these gifts came. There's these gifts, these cups.
They got my name and Bree's name written on them.

Speaker 1 We just got those cups. We have our own brand on that.

Speaker 1 Those are good cups.

Speaker 3 Tommy, the Mellow family.

Speaker 3 So this is a company that sends these things out. This is a shortitiery or whatever they're called board.

Speaker 1 But,

Speaker 3 yeah, I'm not good at that. Recruitery.
Recruiter.

Speaker 3 I'm not a cheese man.

Speaker 3 This company sends out gifts and they make itemized things. And imagine if you found 100 companies you wanted to buy or partner with

Speaker 3 and you worked with a VA and you worked with them diligently and you went to town and you find out their favorite metallic, they love Metallica.

Speaker 3 So you superimpose them in a picture and you get a fake signature and you tell them it's fake, but it's kind of cool. And then you put, we love that you're four and a half stars on yelp.

Speaker 3 And you write about how the company was founded and you send a nice gift and a nice, a truly nice gift that they're interested in.

Speaker 3 Do you think they take your phone call and want to do business with you versus this thing that comes to everybody that's generic?

Speaker 3 And, you know, the generic ways work. Your guy made 200 calls a day and he, you know, he accidentally got lucky a lot.
But if you go with a purpose,

Speaker 3 and that's what I'm learning: I'm trying to identify my Dream 100. But more importantly, here's the next game.
I'm identifying my next Dream 100 employees.

Speaker 3 And then even on top of that, Dream 100 companies, Dream 100 employees, and Dream 100 customers, which are clients because they spend a lot of money with us.

Speaker 3 So when you start thinking with purpose, the world becomes a lot easier. And, you know, the world doesn't change.
Your attitude changes.

Speaker 3 And I got to tell you, I hate the people that say this and now I'm saying it. I'm 38.
I hate this.

Speaker 3 But if I do then what I know now, and I'm not even, I'm not old, but damn, who would have thought 40 years old is right around the corner? But this is gold.

Speaker 3 I think just identifying 100, 100, 100, and working on what those people are and how to get them. Because I could send a free book.

Speaker 3 Listen, if I get somebody that spends a million dollars and I spend 10% in marketing, do you realize I could spend $100,000 to acquire that customer? $100,000 if I'm willing to spend 10%.

Speaker 3 I could buy them tickets to Hawaii for two weeks and still make a ton of money. So the thing is, is it just changes your whole paradigm, doesn't it?

Speaker 1 One thing I've noticed is how we do, like you're saying, you're 38, how we reach different stages in our life. So like when we're in our 20s, we're in our like warrior phase.

Speaker 1 We've got to conquer, we've got to achieve, we've got to win, we've got to own, we've got to make money. And I'd say it's a pretty important phase, right?

Speaker 1 Like a lot of people need to establish themselves on this planet and find out who they are, right? In their 30s, you're kind of continuing that and you are now physically establishing yourself.

Speaker 1 You're gaining that wealth. You're gaining that right recognition.

Speaker 1 And then by the time you hit your late 40s and 50s, you get to what you're talking about right now is where you do really want to start to give back. And you feel that.

Speaker 1 And you see that in older people, right? Left, right, and center, not everybody, but a lot of us.

Speaker 1 And it's pretty natural for the human experience, I think, for people to go through that. And I think it's important to recognize that.

Speaker 1 Like one thing I've done in my life is I'm like, hey, like working hard and conquering and owning is important, but I can see that like there's another phase here.

Speaker 1 It's not always going to feel like that.

Speaker 1 And the reason I know that is because Tommy, think about when you were in high school, how much you cared about being cool or getting by or getting good grades.

Speaker 1 Or think about how much anxiety you had around like somebody picking on you or the teacher gave you an F for whatever it was, and how much that didn't matter now in your life.

Speaker 1 The same is true in this like business thing we're doing right now. This whole thing of like, I got to build a business and conquer and grow.

Speaker 1 And it's really important for now, but when we're 50, 60 years old, we're going to look back at it and be like, that was a cool game.

Speaker 1 It taught me some cool stuff, but what I was so emotional about wasn't nearly as important as the relationships I built along the way.

Speaker 3 Yeah, the deal is, is I know a lot of billionaires that want to kill themselves. Right.
I look at my buddy. He's He's a very brilliant guy.
He got paid a ton of money and he says, Tommy,

Speaker 3 do me a favor, don't ever sell.

Speaker 3 He goes, I lost my purpose. He goes, the money, the couple hundred million dollars I got is great.
And I'm like, yeah, pretty nice house, kind of cool car. I like the boat.

Speaker 3 But at the same time, there's not as much purpose waking up.

Speaker 3 And the reason I'm here

Speaker 3 is

Speaker 3 I got a bunch of phone calls after a meeting yesterday and they said, dude, that was an amazing meeting. And I was so excited.
I was so excited and energetic.

Speaker 3 And to not be in this role, I've worked hard to be able to give back to these guys and gals. And I'm not perfect.
I'm far from, look, I'm a six out of 10 on a good day.

Speaker 3 No, I'm actually make it three out of five.

Speaker 1 But I know, I know.

Speaker 3 But I'll tell you, I've joined this club. It's called 100 Million Mastermind.
And these guys are going, I know rich people every day that commit suicide. The money is a tool.

Speaker 3 And when people understand, yeah, it's easy to say that when you have it.

Speaker 3 But the deal is, is I guarantee you, if I went dead broke, I'd have the money back within two years because I know how to get it now. It's so crazy.
You see these people, they live extra.

Speaker 3 Sometimes they go broke. They lose all their money in real estate.
Within three years, it's all back.

Speaker 3 And it's actually the relationships. The relationships, I could get money back, but the relationships, my integrity, the fact when I shake your hand, I mean it.

Speaker 3 That's something there's so many rich people I know that they're scumbags and they're scummy and I hate them.

Speaker 3 And there's other guys that would give their the shirt off their back and the reason they drive a normal truck to work.

Speaker 3 And I love those guys because there's so many flashy guys. We used to call them $30,000 millionaires because they'd rent a beamer.

Speaker 3 They'd lease a beamer, live at their mom's house, you know, Scottsdale. But this is fun stuff, man.

Speaker 3 I know know you had something very important drill you wanted the audience to listen to. And I don't want to take that away because I do think performance pay, I'm bringing it back.

Speaker 3 One of the best things about our company is top performers can make

Speaker 3 what I love the most about performance pay

Speaker 3 is

Speaker 3 I got CSRs making 26, 28 bucks an hour. And then I could advertise that and three of them could come on and say, yeah, I make this consistently.
But they're a players, they're drivers.

Speaker 3 So one of the things that my call center manager taught me, Angela, she's brilliant. She said, don't give an hourly rate plus bonus.

Speaker 3 Give an hourly rate or bonus.

Speaker 3 So that way they're making minimum wage or their bonus number. Because if you pay minimum wage plus a bonus,

Speaker 3 then you get C players that stay.

Speaker 3 So we encourage people are like, what's your turnover? I'm like, super high for the first 90 days, but it's really, really low after the first 90 days.

Speaker 1 Yeah, I would say, Ned, on everything we're talking about, going into like both topics, if you're going to be paying people money to do things for you, make sure that, especially if it's incentive-based, it's inspiring them and not manipulating them.

Speaker 1 Because if you're manipulating behavior, it might short-term work, but long-term usually blows up in your face.

Speaker 1 If you're inspiring people to be better and actually helping them find things inside of themselves that they didn't even know was possible, then it's going to the right place.

Speaker 1 And I think money in general, and especially the more you have it, and Tommy, I'm sure you'd agree with this. Money is a form of energy.

Speaker 1 It's a form of transaction that it exemplifies what is already there. It brings out more of what already exists.

Speaker 1 And if money is being used to manipulate people at a higher degree, then that's what you're going to get in the end.

Speaker 1 But if it's being used to inspire people and drive people past what they normally would do, then that's what you're going to get in the end.

Speaker 1 And just be very intentional about what that money is actually used for and your intentions behind it as well.

Speaker 3 You know what I love about talking to you and other business owners is I've been an employee. I've been a dishwasher.
I've been a bus boy. I've worked at a lot of jobs.

Speaker 3 I worked at women's shoes, dealers selling women's shoes. That was a funny job.
But I liked it that I could always look at how much I hated certain things like being on call.

Speaker 3 And so a guy came up to me this week and said, I hate being on call if I get no action. So

Speaker 3 I said, that's not fair to you. And I wouldn't want to to work for somebody that had on-call shifts that I stayed home all day, stressed up, waiting for a call.

Speaker 3 I couldn't live my life, even if it's only one day a month or one day every other week.

Speaker 3 So I'm talking to my dispatch manager saying, listen, we can pull today, we, Friday, we can pull from Saturday, Sunday, Monday, and work very hard to make sure this on-call at least gets one job.

Speaker 3 And then if he gets another one, he's fine.

Speaker 3 So I love thinking as an employee, but what I don't like, Danny, is I don't like employees thinking that they know what it's like to be an owner if they never done it.

Speaker 3 I appreciate employees that don't have to steal their own businesses because they actually know what it's like. You know what I mean?

Speaker 1 Yep. It's something I saw every single day.
So back in the day, I was a franchisee. When I was 18 years old, I started my own business.

Speaker 1 I remember thinking I knew what it was going to be like to start my own business. And it's just like having a kid.
Like you just cannot describe it.

Speaker 1 And it's 10 times crazier than you ever thought it would be. Then I got into a position where I was hiring and training young franchisees.

Speaker 1 It was 18, 19, 20-year-old kids to go start their own business for the first time. And I got to experience that shift in their mindset, going from like, they're like, I'm do this, aren't I?

Speaker 1 I'm like, I'm owed this. I'm like, you're owed nothing.
This is your business. Everything is on you.

Speaker 1 And the 80-hour work weeks that you're going to go work, no one's going to thank you for it or say anything. You're just going to do it because it's the right thing to do.

Speaker 1 And when you can learn that way of being, it changes somebody. like internally for the rest of their life, I think.

Speaker 1 And it gives them a level of freedom and a level of, I'd say, discipline that most people don't get to experience. And until you've experienced being off on your own, you're right, Tommy.

Speaker 1 Like, you can't know. You can't read it in a book.
You can't be told by a friend who's doing it. It's an experiential.
And yeah, I would agree with that in a big way.

Speaker 3 So,

Speaker 3 and I would say, on top of that, is you put sweat equity into the business. You did not have a bunch of cash.

Speaker 3 So, all of a sudden, for some reason, our wife and I, or your husband, and you, you say, We deserve this beautiful second home. We deserve to put our kids through private education.

Speaker 3 Well, private education is one thing, but we deserve all these things because we work so hard for the business. No, you don't.
Put that money back into it and receive 10 times the gifts.

Speaker 3 But it's called delayed gratification. I talk about it in the Home Service Millionaire book is people don't have enough delayed gratification.
They want it now.

Speaker 3 And Bill Gates said, quit thinking what you could do this year. Think about what you could do in 10 years.

Speaker 3 It's a little bit of the longer game, but 10 years from now, you could get a lot done if you look at things in the long way. But we want to be overnight.

Speaker 3 You know, the websites tell us we could be this e-commerce site. We could be billionaires in a, no, dude, it's a pipe dream.
Literally, get your shit together.

Speaker 3 Go to work. Don't put your money into real estate.
Like, I was a house flipper. I was going to own a bar.
I was going to take all these things out of the garage of your business.

Speaker 3 And now I got rid of everything. I'm so focused now because I think that.
This business has given me the gift that keeps giving.

Speaker 3 Don't get me wrong. I've invested in a lot of real estate.

Speaker 1 I'm buying the building next to mine but we're using it you know and i believe in it but what's your perspective on that because i think people want to take it out and flourish and you don't deserve it yet you got to take your head outside of just north america right because there's a lot of parts of the world that having more money is it doesn't take precedent over having a better family life or having better kids or having more time like

Speaker 1 There are cultures and people on this planet that look at North America and think we're psychotic and think that we are giving up what life is really all about to make more money.

Speaker 1 And they wouldn't be wrong. And I'm not saying they're 100% right, but I'm saying what we have here in North America is just one perspective.

Speaker 1 And we live on a giant island separated by a massive ocean. And we don't really get to see what the human experience is like in many other areas.

Speaker 1 Because to be human and to live on this planet, I'm a Christian, just like probably some listeners and probably you two, Tommy. It's not about just this life and there's more to it than that.

Speaker 1 And it's easier to say when you have the basics met for you. I think the basics would be, you know, eat, sleep, poop, and breathe.
You can do those things. You're in good shape.
All right.

Speaker 1 If you don't have those things, yes, I get it. That's the fight or flight response takes control and you are unfortunately subject to that a little bit.

Speaker 1 But for a lot of us, if not most of us in North America, we've already gotten those taken care of at birth. And now it's about inspiring to do something more.
And money is just one component.

Speaker 1 It's not the whole thing.

Speaker 3 That's well said. I was in Brazil and these kids are piled into this car, and they're all singing, and they got their heads out the window, and they're high-fiving, and they're loving their life.

Speaker 3 They're actually so in peace and harmony and family. And to have that

Speaker 3 happiness, and that you watch these people around the world that smile.

Speaker 3 Yeah, it's hard to do it when you don't have clean water. And I understand that.
Something's changed about, you know, I feel like my grandpa. He was born in 1910.

Speaker 1 He worked in the coal mines in Pennsylvania, Scrand, Pennsylvania, and life was different different then you know he had an outhouse think about the people that like came on a ship arrived in like the americas built a log cabin before the winter hit survived that think about the people that came west that went through the woods and just like trekked over here and that was only like a couple hundred years ago 250 200 years ago some of it not even i mean You know what I love the most about this podcast too is usually I stay on topic and stick to the questions, but I feel like this is a little more Joe Rogan-y.

Speaker 3 And I feel like a a lot of people say they're liking it and it was profound. And so I really enjoy just because you're a deep guy and we can have a deep conversation.

Speaker 3 And we both have done a lot in the home service industry. So we can talk about these things and you've got a different perspective on a lot of things.
And it's just fun to have a conversation.

Speaker 3 And normally we don't get to do this kind of stuff. I think we understand performance pays.
Great. What's your exercise? Because we're really excited to give the exercise.

Speaker 3 And I don't want to take that away from the audience. Yeah.

Speaker 1 So we made a bunch of quick tools for everybody. There's 10 of them.
One of them is on how to build incentives and performance-based pay for your staff. So we'll give that away to everybody.

Speaker 1 There's a little video that goes with it. There's a step-by-step exercise to help you decide what types of incentive-based pay to pay certain roles in your company.

Speaker 1 And then there's a little thing for you to kind of build out for yourself so you can build your own incentives. So I'll put the link in here.

Speaker 1 You guys probably will have it in the show notes, I would imagine, for those who are listening.

Speaker 3 Yeah, so if they go to the home service expert to define this podcast, this will be in the notes, and you get these free links. This stuff, I'll tell you, is very powerful.
What you guys do there is

Speaker 3 it's so hard for me to teach. I've just, I know when I have kids, and I'm going to have kids, hopefully, I'm going to be so patient.
And I'm going to have so much understanding.

Speaker 3 And my daughter, my son's going to go, daddy, what's three plus three?

Speaker 3 And I'm going to go, son or daughter,

Speaker 3 one, two, three, four, five, six.

Speaker 3 And I'm going to be patient. And one day they're going to be smarter than me.
But for some reason, when I teach, I'm like,

Speaker 3 it's six.

Speaker 3 And I don't have a lot of patience. And sometimes I forget where I've been because it's so hard to remember.
It's so hard to remember what I was.

Speaker 3 Because let me tell you, you know, there was a time I was a four-handicap in golf.

Speaker 3 And I always wanted to golf with somebody that was even. If I golf with somebody that was 10 under.

Speaker 3 I'd be like, dude, I can't take a divot and get backspit on the ball. Like, it's just not where I'm at right now.
So right now I'm going and visiting two, $300 million companies.

Speaker 3 But before I used to visit $6 million companies and $10 million companies because I wanted to be that.

Speaker 3 And I'll tell you, I think part of my problem with teaching is I understand the formula, but sometimes like you're just not ready for it. And you got to grow this way instead of like this.

Speaker 3 And I want to have everybody listening to the podcast skip the steps that I failed at, but sometimes. My mom and dad told me this, son, you're going to make your own mistakes.

Speaker 3 And I wish I could take the mistakes and tell you, but you're going to make them. And I wish I could do this for you, but it'll make you stronger.

Speaker 3 And I wish I could take all the business owners listening to this and say, listen, I want to give you the best life and the best marriage and the best father-motherhood or whatever.

Speaker 3 I just, certain people are hearing this, and it's the perfect podcast for them that they needed to hear today.

Speaker 3 Other people might say the other one last week or two weeks from now, but it's very, very interesting. And I'm hoping that they just understand that I'm just getting started.

Speaker 3 100 million used to be a goal. Then it'll be a billion.
But the deal is, is that just means more lives I can help.

Speaker 1 So I would say this too, from getting to know you, like you are very good at inspiring people, but you're not the gifted teacher. And that's okay.
I come from a family of teachers.

Speaker 1 So that's like kind of like was grained in my DNA. I'm not as inspiring as you, but I teach and that's what I'm good at.
And I've got some good thoughts.

Speaker 1 But you have an ability to inspire beyond most people. And teaching is something I think you have around you.
You have people that help do that. So just do what you do best, man.

Speaker 3 You know, I'm like this. We went over that three weeks in a row.
It's so funny. I tell my guys, like, I remember Adam, my GM, he goes, Tommy, you talk about the same shit every week.

Speaker 3 You talk about conversion rate, average ticket, how to get eye contact. And I'm like, when I'm talking to 200 guys, all I need to do is get through to one.

Speaker 3 And every week, I promise you, I get a phone call, dude. And they're like, I'm like, what is there to talk about? We have a Mojo call every single day, except for Saturday and Sunday.

Speaker 3 But what I like to do is hear somebody's success story. We say, Oh my God, it finally clicked.
When it clicks, these guys start giggling.

Speaker 3 Oh, you were right.

Speaker 3 And we go, you know, tell us about it. And we get excited about it.
And we got this new fancy checklist that you got to take a picture of every single part before and every single part after.

Speaker 3 There's 60 pictures you have to take. And all my veterans were like, dude, you're crazy.
What's wrong with you? And all these new guys are like, oh my God,

Speaker 3 this is freaking awesome. I could show the customer everything.
And now all my fires, like the one lady said, we didn't replace her springs. It was broken.
So we have the before and afters.

Speaker 3 And then when I go to this job in two years, I can see exactly what the stuff looked like and know what I'm walking into. And so we turn it into a positive.
I love what I do, man.

Speaker 3 I got to tell you, this, I wouldn't want to change it for the world, but there will be a day that I say my job here is done.

Speaker 3 And, you know, I'm not Elon Musk or Richard Branson, but I'm obsessed with space.

Speaker 3 And I think one day I might not be going to space i don't i just i love nice size theory of relativity i love wormholes i love the cosmos and i think there's going to be something else that comes up i don't know if i'm going to start another podcast about it but i love home service too much but you know what do you think you're going to be doing you think this is your life i'm 30 hold on 34.

Speaker 1 i mean until i'm 40 this is me this is me i'm here i'm in and i'm like fully like i've got some stuff to create here that i'm super stoked about i can feel it inside of me like i need to build things like I have to create something from nothing.

Speaker 1 And it's so like even on my house that I just bought, like I'm just constantly, you know, my creative juice are going into building an infrastructure that is stable and is beautiful and is unique and is whatever comes out of this thing.

Speaker 1 So it will probably be in Blink something. And if BTA continues to, you know, provide that runway, cool.
Like we're building some software right now.

Speaker 1 We're putting about a million bucks into a custom application for our members that will eventually become public. And we'll see where that leads, right?

Speaker 1 But one thing I've noticed my entire life is nothing has ever been planned out years in advance, right? Like I started a brand new painting company.

Speaker 1 I was 18 because I was in university to be a police officer. I flew helicopters for a little bit randomly.
Then I started like doing management consulting. Then I built this BTA thing.

Speaker 1 But if you asked me when I was 18, did you plan to do that? I'd be like, dude, I was just building stuff and I was passionate about it. And I was learning.
And life will probably do that.

Speaker 1 So by the time I'm 40, we'll see. I'm open.
I've got some ideas, but I'm not too tied to anything.

Speaker 3 So. Well, Danny, you are one of the smartest guys I've ever spoken with.
I love what you're doing. I've told you before, I swear, I think Canadians have different waters.

Speaker 3 So you guys are all smart and awesome and nice. I think you guys got a lot of values too.
It's not as populated. It's not sales signs everywhere you look.
It's genuinely great people.

Speaker 3 I always learn a lot from you, and I really appreciate today. It meant a lot to me, and I had a blast.

Speaker 1 Me too, buddy. Yeah, it's a good job.
So, hopefully, everyone enjoyed it.

Speaker 3 Well, there's three things that I always got to do that I forgot about.

Speaker 1 How do people reach out to you if they want to get involved with your teachings uh breakthrough academy so btacademy.com b is in bravo t is in tango academy a cadeny.com is our main website if you just want to check out our content brand that we just launched it's uh contractorevolution.com check that out And then the second question is, are there any books that you read recently that are must-reads for the listeners that you really enjoyed?

Speaker 1 So you, yeah, you always ask me this. So it's funny.
And I think I told you this last time too. I don't read books.

Speaker 3 Yeah, that's right. Yeah.

Speaker 1 I watch a lot of documentaries. I have had an unhealthy, I'm sure a lot of people listening have had an unhealthy obsession with what's going on in the world right now.

Speaker 1 So I've spent a lot of time understanding the background of this, the history,

Speaker 3 the future.

Speaker 1 Yeah, whatever it is. The history,

Speaker 1 the future, the science, the hearsay, the political side of it, my faith side and the religious side of this.

Speaker 1 And just trying to come to terms with where I stand on this and what to do about it for me and my family.

Speaker 1 and the most important thing i could say about all this is right now is do not let us be divided i get that people are going to think differently and people are going to be emotional about that for lots of very good reasons we cannot allow ourselves to become divided that is more dangerous than anything so well i'll add two cents and i hope i don't lose any listeners because of this but i just it's hard for me when my dad almost passed away from this so i'm very sympathetic and i could tell you this he pulled through and i'm very lucky this is not good.

Speaker 3 But I also know that the mortality rate has not changed. And typically,

Speaker 3 there's the healthy people that have passed.

Speaker 3 You know, I believe they're in a better spot too. I do believe I'm a Christian.
And I just don't believe in big government. I don't.
I don't believe in redistribution.

Speaker 3 I believe that I'm going to become the best, one of the biggest philanthropists of all time.

Speaker 3 And I'm better than putting it through this system of diseased Republicans, Democrats, whatever you are. I just don't believe in big government.

Speaker 3 I believe that us people could make a better choice in our own communities. Now, that's, I'm probably pissing a lot of people off, and I'm sorry.

Speaker 3 And those are my own views, and this is not a political show, but sometimes I just got to throw it out there. And this isn't the forum to do it either.
This is just me telling you as a friend.

Speaker 3 And you've obviously probably studied a lot more than I have. So you probably shouldn't be.

Speaker 1 I line, man. And I think a lot of us feel very similar about a lot of things and very different about a few things.

Speaker 1 And if we can focus more on where we feel aligned, I think that's what will keep us from being divided.

Speaker 3 So I just got back from Florida and I was near the equator. That's why I'm like purple right now.
I apologize. And this is the last question, Danny.
And so much good information here.

Speaker 3 Why don't you leave the audience with one last

Speaker 3 great

Speaker 3 thought, one go-to, one thing they could do right now to change their lives for the better, whether that's business or personal?

Speaker 1 I don't know if I've said this on your show yet or not, but one thing I've always lived by is just like, how can I?

Speaker 1 Right. So I think people go to motivational seminars and they're always just like, you can, you can do it.
If you say you can do it, you can believe it.

Speaker 1 The words that come out of your mouth create reality. And there's a place for that.

Speaker 1 But I think a lot of people also bullshit themselves and then know they're saying bullshit and then nothing happens out of it. On the opposite side, people are negative, right?

Speaker 1 Like that can't be done. That's impossible.
I've never done that before. Won't work.
Well, that doesn't cause any kind of action, right? Just causes you to sit in the place you're at.

Speaker 1 So I've always just been like, well, how can I? Like if I had to, like, what would I do? And how would I figure that out?

Speaker 1 And I don't claim to have the answer or know 100% what I'm doing is right or wrong, but I'm willing to kind of go in that direction and see what happens.

Speaker 1 And so from like just a pure way of just living my life, just be open and just like, how can I should be the language you're always pursuing life with and be in the process of.

Speaker 1 You don't have to have something done or figured out or complete. No, I'm in the process of figuring how I can do it and constantly be problem solving.

Speaker 1 And it's weird what comes out of that two years later of an idea that could never have happened had you not spent that year thinking through how can i versus i can or i cannot that so

Speaker 3 good

Speaker 3 people say how do you get to a billion and i wrote a billion on the same whiteboard it's at a different shop before and i said i wrote a line just a slant slanted line and i put a billion at the top And then I put there 500,000 protect 2,000 technicians.

Speaker 3 And then I wrote five lines for five years. And I said, what would need to happen at the bottom here? I need recruiters.
I would need trainers. I wrote down all these things I would need.

Speaker 3 I would need a huge training center. I need to figure out how I'm going to get the trucks, how I'm going to get the trucks outfitted, how to have the iPads monitored.
And I wrote all these things.

Speaker 3 And I said, this is the beginning. Then how do I scale up every year to do that? And all of a sudden, it was a map.

Speaker 3 And then everybody came in and looked at my map that said it wasn't possible and said, holy shit, you're serious, aren't you?

Speaker 3 let's get to work it's history from there but it's fun man and and i love that piece of advice uh this has been a really fun podcast for me brother and uh it's a friday i don't know do you drink beer i used to i probably drink more just rums and cokes and whatever i don't drink

Speaker 3 for your figure i'm not going to break out the beers i got another three hours here of meetings but uh appreciate you very much man i know you guys learned a lot about performance pay and maybe a little bit more about a lot of other things and thanks for listening everybody.

Speaker 1 Awesome. Thanks for having us.

Speaker 3 Thank you.

Speaker 3 Hey, I hope you enjoyed today's podcast with Danny Kerr. A lot of people always ask me if I could coach them or provide them training to grow their business.

Speaker 3 The fact is, you guys probably know this, but I'm really, really busy with A1 Browser's service, making it the biggest and largest home service company in the country.

Speaker 3 But I got to tell you, when I discovered what Danny Kerr was doing with Breakthrough Academy, I realized that this would be a perfect program that I'm proud to vouch for.

Speaker 3 What I truly love about their program is they combine the done-for-you systems with coaching and accountability to make sure you make huge progress fast in your business.

Speaker 3 So, if you're making a million dollars or more and you want to build a solid structure for your business to generate more profits and grow, check out the link btacademy.com forward slash home service expert to learn more about the Breakthrough Academy.

Speaker 3 You're going to thank me for it.