Scaling Your Business With Effective Marketing And Relationship Building

But to have every day distracted, every single day, your time's getting taken from you.

And doing it every day and just becoming a firefighter all the time, it gets addicting because it feels good to solve problems.

But what happens when you can just, the systems don't, imagine McDonald's when they first started.

They're like, man, the burgers are different every time, the fries.

If you watch what they did in the movie, The Founder, they went into the park and they chalked out a fast way to create a process that works every time across the world.

Thank you. Guys, if you watch what they did in the movie, The Founder, they went into the park and they chalked out a fast way to create a process that works every time across the world.
The Big Mac tastes the same. They put the two pickles in the same spot.
If you guys can't write the manual on how a Big Mac is made and you can't understand the systems of standard operating procedures, the checklist that went into that, then I'm sorry. You'll never have a business that's worth buying.
Welcome to the Home Service Expert, where each week, Tommy chats with world-class entrepreneurs and experts in various fields like marketing, sales, hiring, and leadership to find out what's really behind their success in business. Now, your host, the home service millionaire tommy mellow all right today's gonna be really really cool i'm excited about today well let me just get you guys caught up to date so i had a great great thing happen recently we had this thing called garage door freedom we're forming a group for garage doors garage flooring storage, windows and front door companies.
And it's going to be absolutely phenomenal. Mostly garage door companies.
Everybody had a great reaction to the event. We are putting massive, massive savings.
It's going to be insane how much value is delivered in this group. Just been nonstop working on this stuff.
Built the website. Dan Ansonelli made a new logo.
Dan said he's had 20 people sign up. We've got 20 companies getting on a service titan.
We've got Al Levy's manuals that we're decking out. We're making them better.
We're building out a nicer price book for the group. We're going to figure out a way to get their sales through the roof, to get financial accountability, to make them extra super profitable.
Several companies wanted to partner with us where we invest in them and we grow them exponentially. This is going to be the coolest thing I've ever done.
Just to be part of it means a ton. But I'm very, very excited about that.
I visited a buddy of mine, Shannon McCord. He's a super smart guy.
He owns a roofing company. Just really got a lot of great ideas on how we could help grow his business dramatically.
Insanely profitable. Really just getting the motions going.
I tried to visit other shops. I had two people come visit earlier.
It was amazing. I think they got a lot out of it.
Really enjoyed that. One of them does HVAC.
The other guy does window washing. They were out of LA and New York.
Just going to try to deliver value, value, value, value. So we're really trying to change the game in the home service industry.
We're really redoing the way we do our home service expert group. It's going to be an accountability group.
And we're really going to be working one-on-one with each person. And we're going to be getting tons of rebates for insurance and workers' comp and uniforms and trucks and kind of building a mini Garage Door Freedom group out of it because Garage Door Freedom makes a lot of money because you get more users on.
And of course, home service expert, all those people that join will get cheaper tires, better insurance cars, better finance companies, better rates, better rebates. The way that these buyers clubs work is you actually make way more money being involved with them than not.
And we've got A1's buying power behind it. Let me answer a few questions we've got a lot of questions today so tommy do you have any examples of companies starting as 1099 route and getting to w2 after one to two years of being successful i want to start um independent contractors way because the profit margin is way to get some cash well i'll tell you this you know especially there's a lot of tests that they're going to do.
So if you're booking them to schedule, first of all, they got to not receive more than 70% of the money from your company. So they got to have other clients that they work with, independent contractors, number one.
Number two, the IRS is scrutinizing the heck out of those. I don't recommend it.
It can't be wearing your uniform. They could wear like a jacket, like an over thing, a little vest, but they can't be your uniform.
They can't be in your trucks. You can't schedule them.
They got to be able to work on their basis. Never pay the individual.
You got to pay the LLC. Lots of rabbit holes that you get stuck in.
And when you do that, yes, you make a little bit more money. You don't have to pay taxes, but here's the problem that none of these contractors, most of them, they won't pay their taxes.
What do you think the IRS goes after when you don't pay the employee taxes? Your chance of getting out of it are great when you do a bunch of independent contractors. My best advice is working your tail off in a truck yourself and building a nice amount of money and also taking a SBA loan.
Josh Kim has done a great job for about 40 people. It makes sense to borrow money now.
Money's cheap and it can make a big, big effect in the business. So I think everybody should be looking at an SBA loan if they can get it.
To have that money in the bank at a low interest rate right now makes a lot of freaking sense. You never get the money when you need it.
So that's some advice. I have an org chart and can start working on manuals and building systems out.
But if I can drive traffic to the independent contractor model for a year, so I get some cash or personal stuff. Seems so.
Let me know. I don't know.
I really want to understand your personal... Roofing, they always use independent contractors.
The guys that do the fulfillment are contractors. They show up when they want.
They get the job done. The roofing model works well for that.
I think it all depends on your situation, what you're trying to do. I don't like guys that I'm trying to train.
I can't give them my manual and say, you need to do it this way. Because they're a contractor.
It's like hiring a paint company to paint my house and say, whoa, you've got to show up at this exact time. You've got to put my uniform on and you've got to paint it exactly my way.
But then you've got sick days, tattoo policies. You're supposed to check their background on a drug test, but you really can't enforce it if they're an independent contractor.
Where if I'm wrong? Like I said, personally, the 1099 model fails a lot. You lose so much control over your business, so much control.
A lot of people would rather take the money, but that's not... I want to understand the goal of the long-term, long-term goal.
You need to understand that first. And you're going to be wasting two years of hiring independent contractors because now they're used to living on that money.
You can't bring them into the W-2 most of the time. In this world right now, W-2s I think are better.
People want to have a home to stay at and they want benefits. And there's a lot of choices people have.
Right now, it's a seller's market. Right now, it's definitely an employee market.
The employer does not have a lot of control. It's hard to start in this market.
You got to be very profitable. It's kind of survival of the fittest, the most profitable at this point.
Have you read Traction Thoughts? Of course, they read Traction. That's Gino Wickman.
He was on this podcast, actually. You can listen to the podcast with Gino.
iOS or EOS, whatever. I got the book right here.
What the heck is EOS? It's a good book. Oh, there's a lot of them.
Getting the yes. I think I've got Traction somewhere here.
Lots and lots of lots of books there you go how to be a great boss get a grip another book by gino whitman but yeah mark winters and him wrote rocket fuel i think it's a great book you know i subscribe to it i don't follow it i just was on the phone with a buddy of mine that does it we we kind of built our own system and it looks a lot just like the os i love it i'm talking to a business owner in north county about buying his company his business is structured as a silver proprietor mine's a c-corp any tips or what questions to ask thanks brother that's the cpa question you know what you're going to want is a holding company to roll all these companies up and you're're going to want to do an asset purchase only. One thing you're going to want to have is audited books.
That's what I recommend. The reason you do an asset purchase only is those, if you buy the company outright, any lawsuits that happened 10 years ago will come to haunt you.
That's why an asset purchase literally gets rid of all the baggage. James Mullis said, I run a heating and air conditioning company in Tennessee.
Currently reading your book and wondering if you still recommend Angie's List. Well, Angie's List now is called Angie.
It's a partner with HomeAdvisor, I think. I recommend Groupon.
I recommend Living Social. I recommend Craigslist postings.
I recommend Yelp. I recommend Nextdoor.
You name it. Shoot, I recommend Intact.
Personally, I don't have to do all those right now. I spent a lot more money on Google, the four algorithms of Google, and Billboard's TV radio.
Why? Because I charge a much higher price and people want quality. When you're going on Angie's List, when you're going on HomeAdvisor, when you're going on Thumbtack, I can still make money.
My sales process still works. I want to keep my guys busy.
If I could take more clients and get my sticker on the door, a lot of them turn into door sales and other things. So yes, I like it all.
I mean, look, I bought from all those sources, so why not beyond them? It's still part of the BBB. When you're smaller in a market, I think you should do more of that kind of stuff.
It's cheaper and you're really trying to get your top producers. You're trying to evaluate who they are, get them hired, keep them busy.
But as you start to get better and better guys that know how to sell financing and give options and get five-star reviews and they can handle more work because they're good technically, operationally, and on sales is when you start to be able to afford better marketing strategies. But when you're small, why would you want...
I won't send a guy into a $10 million neighborhood, let's just say a million-dollar house or a $2 million house, if he can't close a $40,000 door sale. Why would I want to do TV, radio, billboards when you first start out? Unless you knew a way to build an amazing group of technicians.
I think that that goes a long way. So yes, of course, I recommend any lead source, but I prefer them typing in A1 Garage Door Service versus Garage Door Repair Phoenix.
Bryce Satterfield said, can you share examples of sales wording you prefer, such as the following client instead of customer, something instead of contract? Yeah. I got another book out here that kind of outlines it.
The book is called something influence, not the Roberts of anyone. Oh, it's called Maximum Influence.
i got another bookshelf over here because i don't you know ran out of room so maximum influence let's go to the page here all right page 108 words that repel people contract use agreement or paperwork instead of saying sign here here, you say, okay, the paperwork. Instead of saying cancellation, you say the right of rescission.
Instead of saying salesperson, you say business consultant. Instead of saying commission, you say fees for services.
Instead of saying cost, you say investment. Instead of saying credit card, you say form of payment.
Instead of saying objection, you say area of concern. Instead of expensive, you say top of the line.
Instead of cheaper, you say more economical. Instead of service charge, you say processing fee.
Instead of problem, you say challenge. Instead of appointment, you say time to visit.
Also, negative, downsizing, you say right sizing. Demotion, you say correct workforce imbalance.

Instead of dumb it down, you say simplify.

Instead of market, stock market crash, you say correction.

Instead of stupid idea, you say with all due respect.

Instead of lost money, you say negative gross profit.

Instead of lying, you say misrepresented the facts.

Instead of failure, you say incomplete success. Instead of bankrupt, you say substantial negative net worth.
Instead of disinformation, you say creative license. Instead of employee theft, you say inventory shrinkage.
Instead of irregularity, you say practically perfect. Right.
Yeah. I mean, it just goes on and on the way you package your numbers.
Good book, but one of the best. Boom, boom.
Let's keep going here. Lots of stuff here.
Let's see. 15 minutes already.
How do you set up your multiple locations? I'm in Texas. Each location needs a license holder for HRAC.
Yeah. I need licensees.
I'm a qualifying licensee. I've had to fly into States to go take the test.
Once you get through the first five of them, they're easy. So I get licensed.
There's times that I've got qualifying people if I could hang on another license, depending on the severity and when I could get in to do the test. But there's a lot more to setting up a location.
I believe you should start out with online reputation, build the online reputation, working on some new processes. When I worked at a

restaurant, just Cheesecake Factory, I remember when I was 17 or 18 when I got the job, maybe 19.

I don't know. I was a busboy.
They literally were all over the radio. The word was buzzing.

I got text messages from people. It was in the air that they were hiring.

And they did a soft opening. So they hired me.
And of course, a lot of the people fizzled out. I think they overhired by double.
And then they did a soft opening where we did friends and family. I think if you look at the restaurant world, you can learn a lot about doing an opening of a new market and understanding the three interviews and the process of the profiling, different personality types, stuff like that.
Old school versus new school marketing. Does it matter if you start with a mailer versus a billboard, PPC or SEO? Well, there's what's called direct response.
You know, in the beginning, especially when you don't have a ton of money, you're not trying to build the brand. You always are trying to build a brand with a vehicle wrap, but you can't afford, when you're new, you don't know who the top performers are.
You don't know conversion rate. You don't know who's going to be sick.
You probably don't have a new fleet, so you don't know what's going to break down. So why, that's like me saying, when I go to Vegas or something, I'm not an experienced poker player.
Let me start on the million dollar table. No, start around the small table.
Don't make big mistakes. Get good on the small table, then move up to the next one, the next one, the next one, the next one to when you're world-class players and you understand it.
So I'd say if you want to start out, of course, you got to build the brand. You get the right website that looks like the mailers.
And then the mailers are direct response. If your ValPak's not working, that's got a two-day shelf life.
If it doesn't work well, change your ad a couple of times. If those don't work, then you get out of it.
Radio TV billboards are harder to track. They're much more expensive and they take consistency of six months to a year.
So I'd highly recommend getting a direct response, making sure you got the right rap, the right website, the yard signs, and you're building your online reputation. What happens when you do a billboard and somebody searches you, they see three results started two weeks ago.
I don't think it's best to start with that stuff for the first year. Let's see.
I'm in a rural area. It seems like people are more interested in price than quality.
What can I do? Well, that's what I always said is, let's go through this. You go to McDonald's every day.
You're used to paying nine bucks. You get a Coke.
You love your large fry and you get the Big Mac. Well, six months later, I take you to the steakhouse.
You're paying for your own food and you pay 90 bucks. It's a really cool experience.
We had a reservation, but you're like, what the hell? This is just way too expensive. So understanding your avatar, number one.
Number two is when I was just at this grouping company, here's one thing I learned. The people have the 49th worst state.
Alabama's got the 49th worst credit in the United States. Everything they do is financing.
So when you're looking at that, if you're one of the only companies that can get people through financing or you got something that's a unique selling proposition it's easy to get a big ticket because the people just want it you're the only one that can get it through so financing takes a lot of that cheapness and people don't understand financing for service calls not just the new door not just the new stuff so that's part of it and then if i see your brand and you show up in a used truck, your wrap,

you got stenciled on there,

whatever it is,

bugs,

you know,

unlimited,

you know, you're a pest control company.

Your shirts look like crap.

They're different colors.

You got drool all over it.

You don't do your hair.

You don't have a CRM.

Your brand does not deserve to get paid.

You haven't built any brand recognition.

People are searching as a commodity.

They're looking for you as a commodity. And that's the biggest mistake I think you could ever be.
So don't become a commodity. I just tell you guys, I think that's a huge, huge, huge, huge mistake.
What I'd say is really try to differentiate yourself, try to be something bigger and better. Let's see another question from here.
going from a one-man shop to going to over 100 technicians.

How do you know when it was time to start hiring? Well, it's always time to start hiring. You start hiring for your biggest deficits.
So you find out what you're the worst at and you might find, like I found Adam, that was a lot of years into the business, but he could handle the stuff that I'm really bad at. I don't like training.
I don't hate training. I'm just not very patient.
I'm not very organized. I'm not very good with time management.
So Bree handles that. What I recommend is get a very nice schedule and start writing down every single thing, the biggest three things that need to get done.
And then you write down every single time you get distracted and you hire around that. If you're spending eight hours in your truck running jobs, hire a technician and train them while you're doing it and start recording mistakes as they happen.
Start doing little voice recordings. Hey, listen, I made this mistake.
I had to go back to this job, blah, blah, blah, blah, blah. That's going to help you write your manual.
And then after you get a really nice manual, so let's just look at the manual here.

You've got a technician manual.

General procedure when arriving to a service call.

After receiving the job information from the dispatcher and arriving at the job,

the tech follows this procedure.

Where parking is permitted, park your vehicle on the street in front of the customer's property. The vehicle should be in plain view from the front door of the customer's property.
No, you should not park in the customer's driveway. And you read this with the people that work for you.
Setting up the manual and understanding. We're doing personality profiling.
We're working with Jonathan Wistman right now. He's helping us come up with a playbook for hiring top performers that believe in themselves, that are just more likely to succeed.
They took one of the worst Mercedes dealerships in sales to the most profitable one within six months. And those are the type of people I work with and I share with you guys.
You just get it at an extremely discounted rate. I have no problem spending $250,000 with Jonathan Wissman.
I have no problem giving Joe Crescent a 40 grand to come out here and train us. I have no problem spending several hundred thousand dollars with Al Levy.
I have no problem spending $250,000 with Jonathan Wissman. I have no problem giving Joe Cresero 40 grand to come out here and train us.
I have no problem spending several hundred thousand dollars with Al Levy. I have no problem.
The money that I've spent as we as a company have spent and been coached, it's crazy. Don't ever think that this is all coming from me.
This is coming from a lot of failures that I've been through. This is coming from 12 contributors that have been in this book.
This is coming from my network. This is coming from every book I've read.
This is coming from amazing things. This is coming from podcasts.
So I'm trying to take everything that I've learned in the mistakes and try to help you guys out so you don't have to make the same mistakes. Some of you are going to.
It's just about getting back up, brushing it off, and moving on and not making that same mistake again. But to have every day every single day your time's getting taken from you and doing it every day and just becoming a firefighter all the time it gets addicting because it feels good to solve problems but what happens when you could just the systems don't imagine mcdonald's when they first started they're like man the burgers are different.
If you watch what they did in the movie, The Founder, they went into the park and they chalked out a fast way to create a process that works every time across the world. The Big Mac tastes the same.
They put the two pickles in the same spot. If you guys can't write the manual on how a Big Mac is made and you can't understand the systems of standard operating procedures, the checklist that went into that, then I'm sorry.
You'll never have a business that's worth buying, and it'll be a very low multiple. I need to see scripts.
I want to understand what people do. I want to see uniformity.
I want to understand I'm buying the systems from your business, not the people. The people come and go.
If I'm buying the people, it's getting way less multiple. How has that moved for you? It was tough.
I was still the guy that ran nights and weekends. I'll tell you, it's not easy.
But after a while, here's what I found is it becomes easier and easier because I'm doing the things I love the most. When you get big enough, you start hiring specialists.
They're not a one size fits all. And that's when you start moving mountains so when you can

get someone that just specializes in accounts receivable or accounts payable and you find

someone that just works in the warehouse and is perfect at ordering and you find somebody that just specializes in getting appointments for tourists coming in that's when because they're only responsible for this little thing and you get much more accountability let's still go with one of these questions here matthew cool horn how do we establish a performance pay with a base that supports lifestyle and yet is set to still expect earning the pluses is it people who are hungry or a system that engages the effort well first thing you do is you get on a whiteboard and you write down what are the biggest things a person can affect you write down what is the expected outcome of this position where am i losing so let's see csrs what do i care about well number one they always seem to miss mondays the busiest day they don't get excited about answering the call so how to make them excited to answer the call and want to answer more. How to make them want to spend less time and make sure it gets booked with the right expectations.
How to make sure their voice is very good. How to make sure they don't make a mistake drive instead of street or street instead of boulevard.
And how do I make sure that their booking rate is above 90%. So we took all five of those things and put that into a pay rate system.
And we built different weighted averages. And then we tested that for a month versus what they currently make.
And we ended up saving two bucks per person the day we came out with performance pay. Then we ended up paying more in the long run, but we booked 20% more of the calls, didn't have the mistakes and the customers were happier with us when we showed up because we had the right inflection in our voice.
So I would say you got to A-B test it with an Excel sheet and test the pay and run through it a bunch of different times to make sure. And just tell the people, listen, I'm trying to come up with things to make you motivated.
I've tested this for three months. I think it really gets the results we want to, just know this isn't concrete i'm not going to switch it every week but we might make some

modifications any of those people that i see gaming the system will get written up and the

second time there's a good chance they'll get fired if you try to lie cheat or steal

good tips there oh this is pretty much the same question i'm also interested in paying the guys

hourly and give them a commission pay fee on the sales what do you recommend believe it or not i'm

I'm not. is pretty much the same question i'm also interested in paying the guys hourly and give them a commission pay fee on the sales what do you recommend believe it or not i'm on performance pay if the company shits the bed i don't make any money i think it makes a lot of money why shouldn't i want to share that with the employees so why not give the people that have invested interest a lot of people brag that they're hourly and say i don't do the bad things for.
You don't have to be a liar to be on commission. I'll just tell you this.
I'd rather everybody have a stake in the outcome. But I don't just pay my technicians on commission.
I pay them. I want to know all their mistakes, their recall rate, their average review, how many yard size they put out.
All that things go into making a technician's pay grade. Ours is a little bit cumbersome, but over the years, we've really figured out a way to really judge it against the mean.
So we take up everybody, take the average and run them against the average so they know amongst their peers. If the economy tanks, that mean goes down.
The mean is just the addition of all the numbers and then divided by the total. They're not easy to build.
And this is where you need a CFO. This is where you need a controller.
This is where you need a good CPA. This is where you need a math, mathematical equation.
You look at someone that's very, very good at understanding the outcomes of what you're trying to get. And then building a model.
You can find people that build Excel models and you just say, how do I build a model that makes sense that they're going to understand their pay? And I could use my data integrity team to know that the numbers are spotted. You could do something like call cap.
Call cap creates a lot of accountability amongst the call center. They got a thing called call assurance.
Third party listens to the call. They tell you the name of the CSR.
They tell you their booking rate. They tell you their success rate, how many calls they give.
They'll actually do a scorecard for you if you want. But most people that are listening won't use it.
You'll write it down or that'll be lost. And you'll probably text me in six months and say, what was that again? Because I'll give you all the answers.
Just most of you won't take them. Most of you will sit with your thumbs.
I don't know. You'll do something, but you won't get action.
You won't take action. Most of you guys, you listen to these podcasts and you're great people.
You are. You care about your family.
You're trying the best you can, but you don't take action. Those are the biggest things I see out there is a lot of people.
They listen to a lot of stuff. They go to every industry show they could.
They're shaking hands. They're calling the next day.
They're calling the author of the book. They're reaching out.
But when it comes to their business, they sit stagnant and they don't take action. It's really ridiculous.

What financing system do you have?

I love the idea in your book about going over the financing,

what the sales tech is going over financing and how he's able to lay out the monthly rate off the bat.

Well, here's the thing I can tell you.

I use a lot of different finance companies,

but there's several of them.

There's Service Finance, there's Green Sky, there's service finance there's green this guy there's uh sean stevens over at um good leap lots of good ones but the deal is is you should only pick three or four of the rates you like and they're going to give you a multiple tape them to the back of your sales guys phones because literally it'll give you a multiple to multiply it with i know on a 20-year plan plan, it's about $7 per thousand. So a $7,000 door is $49 a month.
So it depends on the plan, but you'll get the multiplier and you just run those multiples on the back of your phone. And the deal is service time lets you toggle between the financing.
So you can just look at the monthly... And here's what you do.
I mean, certain companies, as I'm starting to learn, they're much more likely to use financing. Garage doors just went up again today.
Clopay and Amar just sent out an update that they're going up about 10%. So they're going to continue to rise.
And that's turning garage doors into a finance company. People don't usually finance.
The smartest companies, Darius Livers, what he measures is a ticket over 5,000 and a ticket under 5,000. How often do we use financing? Of course, over 5,000 are going to use more financing.
But when you learn what a car salesman does, what I'd recommend is post on Facebook today and ask, who knows someone that works at a dealership, especially in the car sales department? Then I go in and talk to the finance guy there, and I just talk to them, shoot the shit with them, talk about your company your company and why not like i said most of you guys will be taking notes but none of do this stuff i'll have you freaking come on this show and we'll talk right now about how you actually went in and get a recording of it and say hey listen guys i'm for value post it in the facebook group let's see don't sell commodities sell commodities. Sell service, baby.
I need to build relationships on LinkedIn for commercial work. Do you recommend reaching out and paying a coach for this? I don't want to waste.
Look, we've got software that automatically finds people on LinkedIn based on certain things and it reaches out to them for you. If I were you, I would join a really, really expensive mastermind and that'll give you the best Rolodex ever.
But if you're just looking for clients, here's what you do. Buy the book, the dream 100, you'll pay a hundred bucks for it, but you'll learn how to find a hundred of your biggest prospects.
You don't take a shotgun and shoot a fish. So what I'm saying is you find your hundred clients.
Let's say they're each worth $500,000 a year to you and ongoing. If you want to spend 10% on marketing, you can spend $50,000 to acquire a $500,000 customer.
Now, none of you guys got $50,000 lying around. I don't think most of us don't.
So how do I do this? I know I can buy some really nice, cool tickets. If there's $700 tickets and I find out the guy loves Alton John or whatever, he loves Keith Urban.
Who knows? When they're coming into town, buy him a flight out there. Go with him.
Go with her. Go figure this out.
Sign him a signed copy of something. You can spend $1,500 and just say, look, I'm not trying to buy your business.
What I'm trying to do is be there for when something the company you're using

is going to screw up they always do and i want you to know that i'm the type of person that wants to

have a relationship that we will make a mistake but if i got to go out there and clean the roof

or clean the freaking drywall whatever we do if i got to go do it myself i will because that's the

type of guy i am i want to show you our character i want to show you what we stand for i want to

show you our core principles and if you like that then we can do business okay nadim sherry

I'm sorry. I want to show you what we stand for.
I want to show you our core principles. And if you like that, then we can do business.

Okay.

Nadeem Sharif.

I'm consistently reading, listening, and observing.

An overarching lesson seems to be hire people so that you can get out of the field.

I've had two guys in the last two months and they're still over one with petty work.

Financially speaking, at what point do you say you can't afford the next hire? What I learned is I probably went through 20 employees till I found somebody that could outperform me. And I think in the beginning, and I hate to say this because this is not my long-term play, but I try to steal somebody that's better from another company.
And I give them, you'd be surprised what you could do with the right equity incentive program. There's equity incentive programs where they don't invest within four years.
So you can give somebody 5% equity to help run the whole program and do the hiring for you if they're better at sales than you. There's a lot of ways to skin a cat on this one.
But the hardest thing is if you never work for a service company and you're trying to build it and you don't know what it's like, what I'd recommend is going and seeing it and talking to everybody. But I would not talk to a guy like me if you're just getting going.
You come into my

office, you're like, I was just on a call with 23 of my managers handling each and every different thing with different meetings. So go to the 10 person company with 10 employees.
And then once you get the 10,

go to the 25 and then go to the hundred, because you could go from 25 to a hundred.

Think about this. If you go from a one company to 10, that's a thousand percent increase.
25

to a hundred is only 330%. So instead of a thousand, so that's how it works.
You got to

know how you get the point A to B. Don't jump from a to z that's some advice i'd recommend i own a junk removal company and i was curious if you have any suggestions for key performance indicators to give my guys bonuses we don't sell a product and often there aren't necessarily readily available upsell for future projects to sell other than reviews what should i be looking for to track my guys performance and reward them well let's see junk removal number one i will pay your guys in any markets i'm at to put a sticker in the garage when they're in there number two i got plumbing buddies that'll pay for a sticker on the hot water heater if they see one number three i can teach you how to look out other things.
I would have them make money for a yard site or a video testimonial that you can put on YouTube and put on Facebook and put on Instagram and put on TikTok. I would have video testimonials.
I do. I would look for how do I get more routed jobs.
I would have door knocking team go knock on every door in the area with certain things to say I'm in the neighborhood today and tomorrow. What can I do to earn your business? And have a call tracking number for those guys that they could get money every fire they put out and put, we take things like this, this, this, and this, and make sure it's a fricking good one.
I'd have a really good guy design the hanger and have my guys spreading out as we're cleaning up and talking to the customer, getting the testimon sending the yard sign going over everything i'd have the other guys out there freaking doing that i'd like to look at your whole pay structure and know what do i care about here hours worked if i'm charging by the hour you know i'd have to look at the pricing model of how you charge i think that has a lot to do with it what else could i get out of it i don't know what you do with all the scrap metal but if they organize it in a way that they're willing to spend off hours taking and separating the copper from this or that i'd measure here's how much i'm getting for the metal now and let's see i'm able to go from a buck to three bucks by separating it based on weight i might be able to give them a bonus based on separating metal on their off hours to pull the coils out the copper and getting the aluminum all sorted out i'm just coming up with little shits and giggles here i might have something to wear if a guy's willing to use his personal garage to sell things i might say i'll create a marketing campaign for you to sell anything that you think is of value. I might have a freaking guy's wife that just repaints stuff, old wood cabinets or bookshelves.
And here's what we do. I'll get you unlimited supplies of it and I'll help you market it.
All that I ask is I take 30% of it. You guys do all the work and you take it home and you put it in your own truck.
I can come up with this stuff. I don't know if it's worth a while to do this stuff, but those are just some things I'd look at.
Michael Bauk, how are you handling material shortages? Well, what I had to do is I had to go out of my way to think outside of the box and say, how am I going to find more distribution centers? So I had to call every vendor and really, I asked for a lot of favors and I kept calling and I kept asking who do they know, whose names and names. And I've done a lot of favors for people over the years.
So I was able to get a lot of answers and I've got a new distribution center coming online here in Phoenix. So it wasn't easy, but we're a big company with bigger companies.
We're worth a lot to people. We spent $12 million so far in parts this year, parts and doors and openers.
So we're important to a lot of companies. If we were to switch that business, it'd be a pretty big sting.
So we're trying to do whatever we can. We've got connections, believe it or not.
People say you're not buying from China, but inevitably you are. It's assembled in the United States or some crap.
But I think what we learned through this whole pandemic is we need to be manufacturing more internally. It's not easy when they don't pay for labor.
They pay 20 cents per hour. But if you look at China, they're actually becoming more robust with the way they pay.
You look at a place like Shenzhen, and I've been there. There used to be 5,000 people back 80 years ago.
Now there's 15 million. It's crazy what's going on with the adoption rate the speed of implementation they're going through what we went through with the the industrial revolution they've already hit that and they've done more than we've done um it took us 70 years to do what they've done in 10.
it took Britain 100 years to do what they've done in 10. so do you have any video shop tours yeah i'll have that available how the hell are you doing with no supply uh like i said we get stuff still mike i don't know that hasn't been easy but you know our guys they meet each other all the time if they need help we can cut down springs we share with different markets but make a lot of phone calls i don't give up when no one else to find a way i figure it out and i say you can knock me down but i'm lot of phone calls.
I don't give up. When no one else can find a way, I figure it out.
And I say, you can knock me down, but I'm going to get back up. I'm going to figure out a way.
You know what I did? Think about this, Mike. Think about all the companies that are really small.
They're all able to order from a manufacturer, maybe let's just pretend a thousand pounds a week or whatever. I don't know.
They are not buying anything because they're slow. They're one man, but they've had this connection for three years.
Why not go on a forum and reach out to every single person? If it's garage drawers or fricking drywall or carpet and call them up and say, I'm willing to give you 20% more than you pay for it. So what is your rates on an average spring or a drywall or a carpet?

I'll give you 20% more and either I'll come pick it up and you're two hours away from me or you

can ship it or whatever. But why not think outside of the box? Let's think outside of the box, right?

Joy Harris, Al Levy suggests working on policies and operations than marketing.

Marketers suggest working on marketing first so you can have the money to pay for the things. What are the first three to five things you focused on to go from one to five million? Marketing and sales are everything.
I think what Al wants you to really understand is most companies that he works with have a plan. They got some money, they've got a loan.
You know, I tell you to get a brand first. I mean, Dan Tonelli is not cheap to figure out your brand and your website and to do SEO.
But if you're starting to kind of just build a company based off of your reinvestments, it's a lot harder to do that. So what I recommend is, like I said, Josh Kim, I'm not promoting him.
I just know he got an SBA loan done for my... Actually, my partner's in the Christmas life business to buy me out.
He made that happen. I've worked with him.
He got me some tax savings. He's a good guy for the SBA stuff.
Ultimately, I think it takes money to make money. And if you're so busy trying to run jobs and I'd say, go tear it up.
I was in the truck for a long time, but I had to save and reinvest. And just know that you don't stand a chance at growing as fast as me if we're the same day we start, if I've got a bunch of money and I'm conservative and I'm doing all the right things and I'm working with a guy like me, Tommy Mello, that's telling me the people to use, to get branded, to build the SEO, to build the right manuals and the right policies and procedures.
The fact is that you even know who L.E.V. is a huge head start.
It took me till 11 years to figure that out. So that's a huge deal.
So one to five million, that's what I would say. Really understanding what you're trying to get as far as the obstacles.
If you're really, really good at sales and you're killing it, just go out there and make a bunch of money. You always got to work on marketing.
Marketing will never go away. But there's really only a few things you could do.
You could do SEO. You could do lead gen services like Angie's List or Craigslist or Groupon or Living Social.
And I could go through a million of them. You could go to all those.
You could do to direct response. You could do affiliate marketing, but you only got like 10 choices.
And if you read a book like Traction, like we talked about, it tells you to pick one and run with it. You can do the one-page marketing plan.
That's a good one that had a guy in the podcast, but you're going to need to do a marketing plan that involves SEO, that involves your reviews, your pay-per-click. Find the right person and don't be afraid to A-B test.
I put people against each other all the time. I say, once you run an account, you're not going to get access to the account of the other guy doing it, but I want to know what my cost per click is.
And know this for pay-per-click too. I had a company do it.
They got me 100 freaking clicks that day. It was for remote control for Genie Openers.
I don't sell Genie Opener remotes. I could get you them, but those leads were crap.
They were getting them for cheap, and they were getting me a ton of them. I want to know what my average ticket is per marketing source.

And that comes through things like service Titan.

Do you know any electrical contractors that run their businesses?

The same you run yours, manuals, flat pricing.

Yeah.

Al Levy works for the company that runs it very much the same way as I do.

I reach out to him and ask him.

Cody Johnson, love. Let's see.
Love the financing idea thank you tommy and darius how do you go about implementing price increases thanks here's what i do i look into my email my price went up and i say oh shit we got a price increase adam and i call adam and i say raise our prices and he goes okay i just did and then i send out an email and a text message blast to all the texts and say hey price just went up our price book just went up and then what I do is if I got a chance and they give me 20 days to do it I'll tell every customer in my database that they got 20 days to make a decision and I'll copy the thing from the manufacturer saying as of this date so then I tell them what this means to you is your price is locked down for this many days. And it's real.
You don't need a light cheater still for that stuff. So that's how I do it.
Trevor Maddox, Tommy, what is your target gross margin for each service called? Gross margin between 55 and 60%. I'm not there, but I think 60% is how you should reverse engineer your price book.
But before insurance back off costs overhead. You know, I'm doing a lot here.
I set up a training center. We just bought the building next door.
We're growing into multiple markets. We're buying out companies.
We need a better, stronger, faster infrastructure. So that means I got to pay things that aren't directly related to the job.
That means I need learning management systems. That means I need different training tools.
That means I'm investing in consultants all the time. So I need a higher gross profit because I need more money to pay for those things that aren't directly related to the job.
Now people say, man, you charge a lot more. Well, you can't afford what I do.
You couldn't afford $250,000 to pay a consultant. And I got five of them going on at the same time all the time.
You couldn't afford to send someone in your place for a week for $40,000. So never talk about my pricing, but here's what's the greatest thing about my podcast and about the guys in Garage for Freedom and the things that we're working on, is I'm able to give you guys this stuff.
And I'm going to give it exponentially out there. And you know what? It's paying dividends in the long run because there's an ultimate goal here.
Obviously, I think most companies I couldn't even buy if I wanted to. The banks would say, hell no.
They wouldn't give me the money. And I'm not going to take all my personal savings to invest in a company.
So if you guys listen to me, some of you guys will realize I'm a pretty good guy. If I shake your hand and say, I'm going to do something and it's a fair deal for everybody and I'm getting a good shake, you're getting a good shake.
There's a good chance we can maybe do business in the future. And what better way to get it out there in the podcast and say, listen, let me get you to the size of the bank.
We'll at least give me the money to loan to be able to invest in you. But you know what else feels good is when somebody calls me and they say, dude, I got my relationships back.
I owe you everything. And they don't owe me a dime, but it feels good doing things for good people.
I mean, at the end of the day, because I know that you would do the same thing if you were in my shoes. And those are the type of things you need to think about is now I went out to this roofing company.
I learned so many cool things and he was very gracious with me. We went bowling.
I met his family. Look, these are the kinds of things that change your life forever.
I'm not going to invest an hour. There's a million people.
There's 21 right now, but probably 25,000 people will have listened to this year by the end of the year i don't know how many exactly but i can tell you this you give it out there you put it all out there you receive a lot that's what i could tell you let's see i am trying to build an internal training facility and program i have not completed the operator manuals should I wait on the training facility till the manuals are done? Well, first and foremost, what I learned from Al is you designed your office space in a pattern that mirrors the orange chart, number one. Number two, my training center is going to be world-class.
I can't wait to show you guys my new training center. My one right now is is the best in the garage industry.
The new one is going to have 26 garage doors. It's going to have a kitchen.
It's going to have a living room. I'm going to have real couches, real kitchens, real ovens, real tables that we sit at where we go over financing, financing, financing.
We build trust with the client. We play with the dog.
We jump on the Harley. We talk about the Harley Davidson.
We talk about the fishing poles. We got the the dartboard.
We've got the man cave. We've got the pool table.
All this stuff is going into my training center to give real life scenarios. We're going to sit there with a mannequin.
We're going to have a full conversation. I'm going to have that recorded so you can listen to it.
You can hear your highs and lows. We change the body language.
We show them what's good, what's bad. We personally profile.
We have them run through different scenarios. They learn the technical, the operational and the sales and it's killer.
So why would I want to create a world-class

training center for a hundred technicians a month? Number one, when a technician or a company walks

through that, the companies say, I automatically want to do business with you because you've done

good. It's a freaking killer calls.
It's a killer training center. Number two is when the employee

walks through there, he goes, Oh my God, I want to work for you. And number three, the most important

Thank you. it's a freaking killer calls it's a killer training center number two is when the employee walks through there he goes oh my god i want to work for you and number three the most important thing is we put out studs we put out 10 out of 10 we got a gal working with us now she's going to be a 10 out of 10 you would start attracting a different type of talent they go oh my gosh these people care about their employees they want the best training it's not just one wham bam 30 days're done.
It's continuous training. I got all my guys that come in from Phoenix.
We've got the same training center, the mini version going into every area. Have you acquired smaller graduate companies, just phone number, website? More as a marketing spend.
We are considering this in markets we are in. Absolutely.
I mean, Travis, but the whole thing I'm buying old phone numbers. Here's a little secret.
I don't know why I'm telling everybody this, but why not find the companies that went out of business and build landing pages for them? I mean, I've got enough SEO juice that if I came into any market in the garage door industry, I would outrank everybody for search terms that people are out of business. You see, that's what's nice about pairing with somebody.
Let me just show you guys. You guys have seen me do this.
So this is employee retention credits. You guys have seen me do this.
And then you can type in a1garage.com. If you look here, it's ahrefs.com forward slash website dash authority dash checker.
a1grudge.com for 62. Why does this matter? Because if I put anything on my website, it'll rank better.
I mean, think about it. You guys tell me what company you're with in the notes real quick.
Give me a company in the notes.

Comment for me.

Anybody, don't be ashamed.

Don't be afraid.

Somebody just give me their website.

Going once, going twice, going three times.

Someone hook a brother up.

All right, there you go.

Of course, Cody.

So we're going to go gar garagedoordoctor.biz.

Oh, oops.

Sorry.

I'm trying not to look, but I guess I have to.

So this will show you.

He's at a 28, 3,500 links.

Great.

We'll go maid brigade, made brigade.com. 56.
That's a good one. It's a franchise, 120,000 links.
So this tells you the backlinks. Now you could also go into a lot more details and really dig into this stuff.
So ultimately the plan that you should start thinking about is how do I get more links to my website now you might not think seo is a big deal but you want to rank for things like i don't know amar versus clope or linear versus genie i don't know anything you know when people are doing research and they want to know why a garage door installation is it important or how to protect my garage door from a storm or

stop the break-ins whatever it is or how do i fix a drywall debt become the faq specialist create that content um when someone searches for a company or a part you should have pages for all that stuff and you get more and more and more i'm working on a way to outsource a lot more because we do so many things internally that my team can't keep up. So if I could create a process that drives thousands

of pages of content per month, and then I'm buying, well, look, you could buy links in a way. I could pay to be on a podcast.
Now, I don't charge for my podcast, but if I pay to be on someone that's famous, Joe Rogan's podcast, you could donate to his charity, whatever it is, maybe 5,000 bucks to get a link from Joe. That's crazy.
That's awesome. That helps out the website.
So there's kind of pay for play when you could learn how to, you know, if I want to pay a PR company to get me all over the news, that's called earn media, right? So earn media is a way to get lots of links but the more links you get the more charity you're involved in the more you do scholarships for dot edu you know we do things for the soccer players and the baseball players and the kids and and we get our employees involved and we're donating to a hole in the golf tournament and you just make sure listen all we want is to make sure you guys uh put this a1grage.com donated and put a little video there i mean look you can get your banks to list you on their website as a happy customer by giving a testimonial give you guys a million ways to buy links well stop buying a link so if i gotta go do one on western state bank you know they're going to me. I got a page because I recommend their bank.

They'll,

they'll go on and do a lot.

Vets.

Gov.

Any of those things.

Let's see.

I'm also working on automating our accounts receivable because we have so

much commercial HOA.

Is there any collection companies that you've worked with in the past?

There are professional companies that you work with.

What I'd recommend is building an automated tool.

So find the best companies, maybe someone that even has worked for one on, I go to Upwork. And then I say, I want you to give me the exact terminology.
And I build an automatic tool that just messaged out that we're doing a lean on your house, blah, blah, blah, blah, blah. Automate that stuff.
Actually, part of what I'm working on with Home Service Expert, the group now is we're creating these things like accounts for receipt, you know, collection companies. I've got a list of what I'm going to be partnering with.
And this is what we're putting together. I got this amazing guy that's going to help me put these deals together.
But the cameras in your vehicles, listen, I'm just going to go through. GMB ranking, as seo craigslist posting services virtual assistant services citation sites valpack clipper pfp programs pay-per-click simply noted call cap unique selling propositions go for no series backup call centers drug tests background checks auto reference checks indeed zip recruiter auto permit pullingman's comp.
Affleck liability. Cyber.
Working with enterprise with my discount. Local Viking.
Yext. Schedule engine.
Construction monitor. Housebot Zapier.
QuickBooks. Playing cards.
Viral notebooks. It just keeps going on and on.
Bearing blaster. E-squared for the tablets.
Green sky. Service finance.
Megan likes and her how to travel. Get better parts kickbacks from amazon gas national recycle deals legal expenses computer and tech utility payments bad debt collection they already said that hr advisement recruiting special credit cards temp services csr training national pr sba expensify gleam just keeps copywriting.
I am going to get you guys access and rebate for this stuff because of my buying power. So I think when this is built out and it will, and I'm, look, I'm only busy to the end of the year getting this thing set up, but you guys, I've already experimented enough to know who not to use and who to use.
I've used 10 different SEO companies. I've done so many things with GMB rankings and pay-per-click and spent a fortune.
I'm on my 10th variation of the wrap. I think it's spot on now.
I mean, anybody that's done a tour of the shop and seen what we do and our methods and the money we've spent on failure will understand that my Rolodex is great because of the money I've wasted. It's not great because of who I found, even though the people I found are amazing, but just going down the wrong rabbit hole and spending the money with the wrong people and with me on their asses to get stuff done faster and more effective and put out great work.
Cause I won't accept second best.

And what is it like when they lose a client like me,

that's got a bunch of you guys behind me.

And I say, you guys are not doing the job fast enough.

The buying power of the group is what's most powerful.

So something to think about, I'm excited about it.

I think you guys, it's gotta be a win-win.

You guys gotta make more money than you're spending.

And then we've gotta be able to afford people like Adam to work in the group because he's i mean the dude just knows shit better than anybody service type you can't even compete so he sets up systems we're going to building apis web hooks all kinds of cool stuff but the best is yet to come we got one more question by brian what do we got what do I say to a company why the reason is to visit and why and how they run things without them feeling that I will steal their ideas? Pretty easy. Hey, Leland Smith, I think you're freaking amazing.
You're the godfather. You're the best of what you do.
I got big plans. I'm nothing like you.
I'm not even a competitor in your market. I'm not going into air conditioning anytime soon.
And even if I was, he loves it because the more air conditioning companies that come visit him, the more relationships he has, he gets the first right to buy them. And when you partner with Leland, you're guaranteed to make more money with him than not with him.
So the smart guys, the big guys, the good guys, you get a hold of them. You act nice to them.
There's a good book that I want to get the guy on, John Ruin. Giftology.
Get somebody a gift that they're unexpected and say, listen, I look up to you. You're like the godfather to me.
You're like everything. I want to get to know you more.
I got so many great questions. The companies that want to give back and pay it forward, they'll all do it.
The companies that don't, trust me, you want to to test this out you don't want to go visit those companies because they're going to have all their stuff you can't take pictures blah blah blah blah i mean look i got stuff about levy's in here so he asked me not to take pictures and i don't like you know necessarily the stuff that my employees have done they spent their whole hundreds of hours working on it but for the most part of let people take videos and stuff you know i had a i have companies that come out here all the time and i it wouldn't make sense to me but here's what happens you know we did a big tour we had our limo bus take everybody around i think we did nine bus rides of 15 people each something like that maybe a little bit more and um they were blown away i had people that have been in this industry for 40 years say, we've never seen anything like this. What you guys are doing is special.
And I got to tell you this, I celebrated with my staff for three days. We really got excited.
We felt great about ourselves. And then Saturday, it hit me like a ton of bricks, anxiety, stress.
And I said, okay, let's build this thing. i got into superman mode and started typing up and whiteboarding and getting all this stuff and building new files in my phone and i got on the phone every day all day all night and i've delegated a ton of stuff tons and tons and tons of stuff i'm getting new hire set up and you know a lot of people won't be able to do it with me because i expect a lot done and i delegate a lot and i expect a lot but they there's a skin in the game for them the people that i got interested in in helping me that they're definitely going to make out at the end what does partnering with a1 look like can you explain the process a little more you know a little bit about my company so a company like mine what could that look like well here's what a partnership with me you know, you get our buying power, you get everything that we'd come in there.
We would change a lot of things, but not for the worst. We get our scripts, we get our advertising, we get our discounts.
And then what it would look like is I'd want to get you on the same systems beforehand. I'd want to get you with audited financials and get you with accrual accounting and make sure that

if I need to go to the bank, it's easy to get money to do stuff with you. And what we try to do is we try to amp it up.
So I buy a certain percentage in maybe 20, 30%. I don't know until we look at the specific deal.
And then I'd give you a way better multiple, like eight times. So I'd fix your EBITDA.
So let's just say you're at 300,000 and I gave you, I don't know, let's just say we said the company's worth a million bucks.

And I bought in for 300 grand. We took that money and we got you up from 300,000 to 1.2 million.
So you still own 70% of 1.2 million. And I gave you, let's say, I don't know, seven times, seven times 1.2 is 8.4, 8.4 times seven is you get another $6 million for the rest of it if I was to buy it out.
But chances are, if you're a great operator, I'd want to lead you in for the second turn. This stuff's kind of complicated, but you've got a business that's only making $300,000 and all of a sudden within two years, I made you $6 million.
I think that that's a win-win. No one will be able to do this.
This is a once-in-a-lifetime opportunity. There's no one that's coming into this industry doing what we're doing.
The guys that are buying companies are literally buying their leads, screwing those people, and their company's turning into zero. Crap.
What if we went in there, got you on the same systems, operating systems, got you a really good logo, got our systems, better sales, better conversion rates, better financing, built it up with you, had invested interest, trained all your guys, recruited all your guys, grew the business, got you enough trucks, got you the supply chain, and you got to benefit from it and become multi-multi-millionaires. That's the only way I see this working.
So that's what it looks like. I know it's not that easy.
The bank scrutinize everything. So it's interesting.
I got to go give another blood test and saliva and urine and all that stuff because they want a bigger insurance policy because their thought process is, man, if we give this guy a hundred million bucks or whatever, even 10 million or 4 million, whatever, I don't have any loans except for the building and the vehicles, but they want to know that if something happens that they're going to get paid. So I willing to put it all on the line right that's what i do so that's how that works and there's that look here's one thing you need to think about partner or not i gotta have a good reputation i gotta have a good reputation from my employees i mean some of the guys that have quit hate me because i put a lot of pressure on them and they can't keep up, but that's fine.
But I got to give a lot of pressure to my employees. I need them to love me.
I need my vendors to love me. I need businesses that I associate myself to love me.
Because just the one out of 100 that don't like me, that it goes bad, that just echoes chambers throughout every other company. So I need to make this work.
I need to have a win-win. I need every single person to become a Tommy Mello A1 fan because if it doesn't, and they're unhappy and they feel like they got taken, that ruins it for every employee here in the whole future and all my vendors.
So that's not how I roll. In fact, one of the Clopay guys, Brian called me not that long ago.
And he said, hey, dude, I was wrong about you.

I made a mistake.

You are the real deal.

And I love what you're doing to this industry.

I don't know how it's possible.

I'm excited for things to come.

But I owe you an apology.

And I said, I owe you an apology too.

And I said, ultimately, I think you're a really good guy.

I appreciate the phone call.

But I'm really trying to help this industry out.

I'm really trying to help out home service in general. And the cream is rising to the top and it's going to move mountains.
And this is the real deal. So having fun here.
I really like these two. I get a lot out of it too, because it reminds me, I've taken some notes of things I got to do today, but I'll be back with more.
I appreciate you guys very, very much. Thanks for tuning in.
You guys have a fantastic week. I'll do one again soon and go kill it out there.
Thanks, guys. Hey, guys, I just wanted to thank you real quick for listening to the podcast.
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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.
And we're just we're telling everybody our secrets, basically. And people say, why do you give your secrets away all the time? 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.
It's homeservicemillionaire.com forward slash club. It's cheap.
It's a monthly payment. I'm not making any money on it, to be completely frank with you guys.
But I think it will enrich your lives even further. So thank you once again for listening to the podcast.
I really appreciate it.