Next Level Pros - #161: From 38% to 55%: How David Mayster Mastered His HVAC Margins // Next Level Pros Podcast

Episode Date: August 22, 2025

Welcome to a new episode of Next Level Pros! In this episode, Chris sits down with David Mayster, owner of Maester Heating and Air in Seattle. David shares his remarkable journey from Ukraine to building a thriving HVAC business, overcoming personal struggles, and learning the hard truths about running a profitable company. This episode is packed with insights for business owners—especially those in the trades—who want to get their pricing right, build a strong team, and scale their business while staying true to their values.Highlights:"If you know how to work, America will reward you for that.""A standardized offer is one of the best things that I could get for you.""Numbers don’t lie. People do.""If the company makes a lot of money, we can provide you a lot of opportunity."Timestamps:0:00:00 – Introduction & David’s Background0:06:09 – Starting Maester Heating and Air0:10:13 – David’s Personal Transformation0:19:38 – The Power of Money and Business Purpose0:21:45 – Partnership Challenges and Lessons0:28:36 – Pricing Strategy and Gross Margin Goals0:36:11 – Sales Negotiation and Standardization0:49:19 – Reviewing the Numbers: Revenue and Gross Profit1:01:23 – Marketing Spend and Customer Acquisition1:14:22 – Action Items: Standardizing Offers and Scaling UpWant me to teach you how to grow your business? Text me! 509-374-7554Want access to more of my content? Click the link below for all of our latest updates and events!https://linktr.ee/nextlevelprosWant to be a guest on our show? Apply here!https://docs.google.com/forms/d/1YlkVBSluEKMTg4gehyUOHYvBratcxHV5rt3kiWTXNC4/viewform?edit_requested=trueWatch my latest PodcastApple - https://podcasts.apple.com/us/podcast/next-level-pros/id1687030281Spotify- https://open.spotify.com/show/1e0cL2vI1JAtQrojSOA7D2?si=95980cd4e55a437aYouTube- https://www.youtube.com/@NextLevelPros

Today we've got something that's going to hit home for a lot of business owners out there. I sat down with David Maister. He runs a successful HVAC company out here in Seattle, and we got real about the numbers. We dig into the difference between thinking you're running a 55% gross margin business and realizing that you're actually a 38% and how to get those numbers locked in so that you can actually scale. Plus, we dive into his personal journey from Ukraine to overcoming addiction, turning to his faith and building a thriving business. So if you're looking at getting your pricing right and find a bit of inspiration, you're in the right place. What's up, everyone? Super excited to have David Maester here today with us.

David is an entrepreneur in the HVAC space. He owns a shop. Mastor Heating and Air, is that the right? Cool. Master Heating and Air over in Seattle, Washington, right? Is that where you guys are based? We're south of Seattle. We're in Lakewood, Washington. Okay, Lakewood.

You know, us Eastern Washingtonians, like, we think it's all Seattle. I know. That's what people are asking. Hey, where are you at? I'm out of Seattle, south of Seattle. South of Seattle, dude. So he's at the west side, a little bit strange over there, not quite like a seasiders.

But definitely has a cool story. has been building the HVAC space for a while. Family moved here when you were younger from Ukraine. It's cool. We actually have several different people to have like a Ukrainian background in our community. And just cool to see like the hustle, the grid, like the first generation wealth and building and just a lot of fun. So give us a little more color to the story. And then let's dive in.

We're going to be treating this like a live consult, diving into the. the numbers and figuring out like what's working what's not working and hopefully we got a good game plan from this yeah i love it well first of all thank you for having me on here this is a privilege this is my first podcast ever ever oh my goodness let's give him a round of applause ladies and gentlemen what an honor so uh so it's really an honor to be here um i do want to say that my journey has been very unique just because we moved countries yeah and we came to america in 2001 i was eight years old. Nice. There's nine kids in our family. Wow. Where are you at in the pecking order? I'm number seven. So the perfect number. Yeah. That is the perfect number. So at the bottom,

bottom end of the pecking order. Correct. Correct. Seven sisters, one brother. Wow. Yes. Cool. And your brother's your business partner. Correct. Yeah. It's interesting if you guys ever have a chance to meet David. So like you came here when you were eight and your brother was 13. Yeah. And he's got. a pretty thick accent and yours you basically can't tell you're from somewhere else he has a funny story because he was kind of like a bad kid in school so he didn't do any kind of that was a bad kid too but um and then he went to truck driving for 11 years so you know he was just in the truck with his wife and you don't really talk to a lot of people but he ended up like the way that he improved his English was just because he started watching movies in English change his phone

to English language and with subtitles. And now we have a lot of refugees coming in from Ukraine right now. Yeah. And he's like, this is what worked for me. You got to do the same thing. You want to learn English. That's cool. Why did your family come originally?

So we just kind of, everybody started moving from our family down here. So first my uncle and aunt came in like 93 or something, 92. And then it would just one by one. Why Seattle? We don't know. I mean, I don't know. You know, one thing I've never quite understood is like when people move from maybe like a poorer situation, which happens, you know, a lot, whether it's from like certain like southeastern Asian countries or, you know, Latin countries. And they come and they move to a big city.

And it's like, dude, that's the most expensive place. Like I've never understood why, you know, it's like, you know, you got like these people that literally came from nothing that are living in New York paying $5,000 for an 800 square foot apartment. it's crazy. I think, I mean, people that come from other countries that don't have nothing, they know how to work. Right. And if you know how to work, America will reward you for that. Yeah, for sure.

I think that coming here, just, you know, there was a big Slavic movement in the early 90s. And a lot of people came here. There's a big Slavic church down in Tacoma. Cool. That's kind of what, yeah, kind of very family-oriented, right? I know you guys are very, like, faith-based. You got a family. yourself, wife, a couple kids. So I have a beautiful wife, Natalia, and I have a son Solomon,

he's six years old, and a four-year-old daughter in Abigail. So cool. Family is, yeah, so much, I mean, really the purpose of why we do this whole thing, right? Yeah, I mean, God bless them. Yeah, yeah, for sure. It's a sacrifice, but in the end, you know, it's rewarding because when you stick through it, you know, you'll be able to reap the fruit. Hey, guys, it's Chris. If you're finding value in what you're hearing, go ahead and like and subscribe. That way people just like you can find this content for free here on YouTube. Now let's

stop back in the show. Let's talk about Maister heating and air. And so you guys just specialize in HVAC, right? Yeah. Right now, yes. Cool. Plans to expand into like plumbing and electric, anything like that? Possibly plumbing, but definitely electric.

Yeah, definitely on the electric side. Currently, are you carrying like any 01-02 electricians, which for those that are outside of Washington State, that means like a commercial or residential journeyman electrician. Yeah, no. So we subcontract all our electrical work, but the goal is to bring that in-house. Love it.

Love it, love it. And how long have you been running, Master, Heating Air? We started in 2019, March. I actually started the company two days before my son was born. So we had two babies at once. And the company name was simply efficient, heating and air conditioning LLC. You were what, 26 at the time? Yeah, 0.6.

So young, hungry, passionate, you know, could do everything in the world. Why did you want to start your own business? I didn't really want to start my own business, to be honest. Whenever I had my life transformation back in 2013, I really wanted to be like a pastor or an evangelist. I mean, I am an evangelist, to be honest. But I wanted to be like a missionary guy or something involved with my faith. because I used to be a drug addict and a drug dealer. Oh, wow.

Tell us more about that. Yeah, I loved you. That's my favorite story. So, you know, coming from Ukraine, we were super poor. We lived in the village, like village city type area. And coming to America, my favorite thing that was like, hey, my mom can't spank me anymore, you know, because I was a bad kid. I was like, the black sheep. And I striding myself with the wrong people.

And, you know, parents are always wrong. and my friends are always right. And then in high school, like, you know, middle school, you used to start dabbling some unique stuff. And then in high school, I went into heavy drinking and cocaine. Wow. In high school. High school.

Oh, yeah. Wow. I didn't realize cocaine was, like, available. I mean, everything was available. Plus, I went to Foss High School. So Foss is boss, you know. So, and I was there at the skate park. I mean, if you know Foss High School, you know the skate park,

That's where all the pot heads and everybody was that. And the Coke addicts were hanging out, I guess. That was on the low, but yeah, whatever. But basically, it took me down a path where I thought it was free, but a cigarette controlled my everything, my life. If I was hungry and I had 10 bucks, I'd go buy a pack of cigarettes. When did you start smoking cigarettes? Oh, that's Daniel.

First cigarette was actually in Ukraine with Daniel. When you were eight? wow wow and you liked it at that age I don't know what I was doing but I mean and then later on after like middle school you kind of oh this is cool you know someone bought me and my buddy a couple packs and we smoked it until we threw up you know sounds fun it was just yeah but anyways so high school went to the crazy and and about you know so on our culture actually there's things that you don't really do because we're conservative slavic culture christian so you don't like move out and move in with a girl and that's what i did you know i moved out living with the girl just with your current wife no no um so it was a shame to the family kind of thing you know yeah um but god had his plans and he had his hand on me from that time because my mom prayed for me for years and my mom was like a prayer warrior so she would pray until the wall

sweat you know so she would just go in and she did not let the devil have his way even though my friends were dying and getting girls pregnant and all that kind of stuff you know kind of ruining their lives but there was a time where I became real with myself and it was about six months before my life really transformed and I just said, you know what, if the world tells me that this is what life is about, I have it. I had money, you know, I had a really, I'll say a good looking girlfriend, you know. How were you making money, do you on drugs? No, no, I actually started to work, but I actually always worked, but I started to work in hardwood flooring and And then I got into HVAC in May, 2013.

So you were 20 years old. 20 years old. Got it. And but that's when more money came in because I actually got into a trade where you're making good money. You're making overtime. So guess what? You could spend more money.

And what did I like to do? I like to work and I like to party. And that was it. And but then, you know, I tasted that party life, the freedom kind of having whatever you want. Yeah. And I was just, you know, this is like. a lie like this sucks and i became um you know the bible says there's a heart that's a cold heart it's better than a warm heart you know and i became cold and i said i'm not a christian i don't read

the bible i don't go to church i don't even pray but i believe in jesus and um i became real and that's when i hit like the low point and i broke my finger and i don't know what to do except that was home and bored started using it home and that's when i got into ecstasy molly cocaine all that stuff and there was a time on december 16th 2013 i was high in five drugs just gotten huge i mean me and this girl broke up like four times a day you know it was that bad yeah um i remember i did something i never thought i would and i have seven sisters and you know i just kind of like pushed her into a wall that i would never do that and i realized that something's inside of me that controls me and that's not me that scared me because the bible it's a clear answer

in the bible it says if you do sin you're a slave to sin yeah and i said wait whoa hold on hold on hold on i'm not a slave to the devil but yes i was because all my fruits were all about lust pride you know um just be me i became my own god in the sense and i was desperate and i became like that night i became suicidal i said i'm not going to live like this anymore and i had one little string of hope left that there is a god that still might help me and that night came to my room i actually had a i told you i had a broken finger i came to my room i fell before my bed and i said god I wish I could come to you clean

white pure but I'm coming to you as I am I have nowhere else to go so then if you don't help me I'm not going to do this anymore and God knew that I was real about that

and he encountered me in that room it was December 16th 2013 about 720 something 23 in the morning I cried my heart out to God for two hours I confessed anything and everything I could. Anything came to mind. I was just, God, I'm so sorry.

I don't want to be this person anymore. Please help me here. And I ran out of words. So what I said was amen. That's what you say at the end of the prayer. And I didn't know that there's such a presence or a love. or a wholeness out there and i was seeking that in every every every single thing and what happened was when i said amen i just started to get up because i was done prayer praying and i literally felt

chains ripping off of me so if you imagine like the darkest ball and just cracks and then like this light coming out of it that was me being born again because the bible says if you're born of the spirit you know that's when you're born again and from that day i never used drugs i never had to go to rehab i'm talking about i was picking like like cocaine would fall off i would pick it off the carpet type thing like i was that bad and nobody knew and i was using in daniel's apartments and he had no idea that i was going through this so when i tell you that god had mercy on me God had mercy on me and like Bible stuff started happening

to me like there was a guy that always invited me to church I don't care about Jesus like I don't want to go to church I want to party I'm going to go from him my friends you know we're going to go fast you know whatever I'm going to get drunk or we're going to just do dumb stuff

when I encounter Jesus that's the first person I thought about and I was looking for his number on my phone and I kind of flipped phones in high school to make some money. It's kind of what you do, you just flip stuff. And I never saved his number because it wasn't important to me. So when I was looking at the phone, trying to find his number, I couldn't find it. I said I'll see him at church because I want to go to church. So on Monday I gave my life to Jesus.

By the way, my finger got healed. That broken finger, they take my cast off that day, a month and a half early. Wow. The doctor checks my cast and your finger's full. fine. You don't need this anymore. Wow. So my finger gets healed after I become completely sober, which I shouldn't have been because I was high in five drugs. On the next day, you know, us Slavics, we love the sauna. Like, that's our thing. So after my cast was gone, I was able to go to the sauna now. Which, by the way, a great tradition. Yes. And then I love that.

Big, big fan of a nice Slavic spa with an ice bath. Yes. Yes. It's great. So on Tuesday I go to the YMCA Where my dad works And I come home And this guy Tim that I was looking for Or wanted to meet Was at my house

Wow And he told me Hey David I know it's going to be hard to believe But I have a message for you He said I want you to know that God sent me to you And I want you to know that God heard your prayer

Wow Because scripture is absolutely 100% accurate because what was going on in my life that Tuesday only God knew and I was dealing with doubt like was I just tripping was that I even counter God was it just this crazy high You know the Bible says that there's a seed that falls on certain soil or on rock or shallow and enemy wants to come and pluck it out and that was happening with me that Tuesday because I was doubting this whole situation but when Tim this guy shows up and he's like you're alive by the prayers of your mom so cool and all that doubt just shattered and I said no

I'm telling everybody about Jesus so for me like not ashamed I don't care who I'm in front of I encounter Jesus I love it and ever since then my life changed but I wanted to be in ministry didn't really care about business or money at all

actually became so how can I say freestyle with money right that god had to hey you're got to be a steward of this you can't just be giving it away and you know people start to use that and all that but that's later on well dude thanks for sharing with us uh that that's uh that's a that's a remarkable experience i mean coming out out of that you know i've never had you know had to face that kind of pits of despair my own life but uh very powerful yeah uh oh yeah so that's awesome thanks for thanks for sharing that So you go from there and you wanted to be a minister, but eventually you stuck in the trades? Yes. So basically, I found passion and just doing good and whatever the gift that God gave you.

So when I saw that, hey, this is actually a place where we can serve people because HVAC is a very unique trade, you know, you're there underneath houses, you're in the attic, there's stuff disconnect. it done incorrectly, which could damage people's health and life and all that stuff. And I just loved doing the right thing. To me, that was just like, I know that I know that I did my best. And that to me satisfied me. But what really took me away from the path of ministry to business was I was looking at all these evangelists and crusade, you know, Ryan Hart, Bonkey, Daniel, Colinda, and all these big boys. and I loved how they were bringing

like thousands and thousands of people to the kingdom of God but I think I know personally that was more for me than for God right you know what I'm saying so that was my idol not really like oh I'm gonna be a great

evangelist all this stuff so then I went to a different church and I went to a church called the Church for All Nations we still go there I went there I started going there 2016. I met my wife in 2017.

Pastor Bill Wolfson. Shout out to Pastor Bill Wolfson. Amazing pastor. We have an incredible pastor, Dan, right now. But Pastor Bill Wolfson was the pastor, and he showed me, him and Dave Ramsey, showed me that money has power and power needs to be respected. Absolutely. You can do a lot of amazing things with money. Yeah, I'm a big fan of, you know, my money.

money being the great magnifier of who we are, right? When our heart is dark and not in the right place, money can do some terrible things, right? It can destroy lives. And when our heart is in the right place, money is the great magnifier that can, you know, spread his word, can get back to communities, serve, impact a lot of different lives.

So, you know, that's one of the things I'm most passionate about with next level pros is getting people to a very highly profitable position. and teach them how to be great people and use that money in the right way. And so, yeah, I think obviously, you know, your experience has been the same with learning from your pastor and whatnot. And so that's awesome. So then you fast forward, you start this company in 2019. You initially, do you have a business partner at the very beginning?

Yes. So me and my brother-in-law partner together. He's the one that actually trained me in HVAC. Got it. his apprentice. Yeah. My lead. So 2019 was awesome.

You know, 2020 COVID hit. Like, if you had breath, you had work. Yeah. So I think that was a big plus for our company and why we were able to hang through it because I didn't know about,

I just didn't know how to do installs. Right. I didn't know. You didn't know what to charge, what to pay. Yeah. For sure. This price.

I'll do it for this. Great. Yeah. You know, it's interesting in the trades. I think this is a very common practice is that. you know a tradesman becomes a business owner sometimes out of necessity sometimes out of luck sometimes just like wanted to but really doesn't necessarily know what they're doing right right

they get in they learn through a lot of mistakes um you know it bumps and bruises along the way what was like in those first few years what was like the biggest mistake that you could pinpoint partnership partnership so it's tough to to be partnered with your your brother-in-law Yeah. What was the difficult part about that? Mindset. Yeah. And motives.

Yeah. And what do you mean? Like give me more depth there. Like mindset and motives. What does that mean? So I've always believed in buying your time and gaining freedom, especially if you're going to be on the line. It's your business.

It's your responsibility. You take all the hits. Yeah. If I want to, you know, we can make great money, be in installers or save. sales guys or whatever actually salesmen I mean they make stupid but they don't have to carry the burden they make a mistake okay we'll take it off my whatever right next job but I was always focused on buying my freedom and that was not the same kind of mindset from my business partner at that time so how do you mean like he was more committed like hey we need to be in the field

doing the work you can't hire hired out So, yes, so basically. Basically, he who works hardest should get paid the most or deserves just as money. No, he's saying, hey, I just, we have work. We have, you know, we have money. Like, we're good. You know, I just want X amount a month and I'm cool. I'm like, that's not cool.

Yeah, I want free. I want to be able to be anywhere anytime with anyone. You want to be able to grow. Yeah. Yeah. So that's the difference. And the reason I want to be a little bit sensitive because I get it. You know, we're still in the process of the.

what do you think he would have said about you like in like what was the because it's it's easy to say the friction was one-sided but what do you think he would say about you you know that's such a good question no one asked me that before i really like that um i think that just because i've been with him for many many years um what i mean by that i was like in ukraine when he was dating my sister i was the little kid that had to take with me so make sure they're not kissing and stuff. Yeah. That's funny. The snitch.

Watch out for the stitch. That's right. So he would probably say, you know, he has, he had thoughts about me as well, which he didn't like, but I'm sure we do love each other and respect them and want the best for one another. But what would you have said? He probably, that's a really good question. Like at that point when we were.

Yeah, exactly. As you're starting to feel the friction of like, hey, this is this is. it going to work like well he said he probably would say i should have listened to my friend his friend told him like once you guys start seeing money you'll see that um you know david's gonna change get rid of you that's what his friend said but that's not the case i mean but eventually you you did buy him out and you treated him very fairly in in that buy i mean i talked to ken goodrich i don't know if you know who ken goodrich i know who kenn is yeah so he sold his company for what half a billion and he said yeah you paid it

very well right all right especially especially the fact if uh if i remember right you guys weren't making a whole lot of net profit at the time no we did so much work i mean we won the sales award for bosh yeah uh on 2022 but we did like two million two million because you were selling all your units it's five grand or something no not five i'm joking but come on yeah It's four, I'm kidding. You said four. That would have been a, we would have made money at five. That's, it's funny.

Yeah, I think one of the hardest things, I don't know if you agree or not, but like just when you have experience as a technician, just even knowing where to price yourself, would you agree? Absolutely. Yeah. Because you don't take an account, like, what really goes in to run a business. Right. And the thing is about when you're starting out, you don't really focus on marketing and just

kind of go on. Angie's list or something. Yeah, marketing. Yeah, when you start out, marketing is not considering an expense, right? Because you're not doing it. Right. Only word of mouth and referral, right? So I don't have zero marketing. So that means I can charge less. Or, you know, it's you and your business partner, maybe one other staff or two other staff. And so you price based on how big you are today, not how big you want to be. Correct. Right. Not for scale. And so these are like a lot of the classic mistakes. Would you agree that you made those same? his same mistakes. Absolutely. We did so many of those just because you're exactly right. When we looked at a job, we were like, oh, well, here's a job that we can make X amount. At least we're making money. Correct.

And then you go at the end of the month and you're looking, you're like, no, we didn't. You didn't make any money. Is it fair to say too? Like there's times where you are pricing things just by gut, feel. all day long that's how it was like i feel like we could make some you know one of the things that i think would be you know really beneficial for school is to teach how to understand numbers better yeah versus just math like i don't remember anything about any other letters and stuff right but like this is not that hard right to understand you know okay what does it cost especially

if you have a good CRM yeah and that too. We didn't have a, we didn't have like a very simple basic serum that costs like 40 bucks a month. But now you're on service titan, right? Now we're on service titan. It's great. Yeah, but it's from the gut pricing all day long. Yeah. That's how a lot of business owners start is they're just like there's no system. There's no process. There's no thing to follow to know how much you should charge for what thing. Yeah, no structure. And so let's talk about today. So I'm assuming there's still some mistakes being made today. Absolutely. All right. So, but, you know, I'd love to maybe dive in and like see,

okay, where we can help right now and just diagnose like some of the potential issues and what improvements we could potentially make. They're going to help you even be better at the numbers. Because ultimately, at the end of the day, business is ran on numbers and people. Right. Right. If you got right people and the numbers make sense, now you got a profitable business, right? And so, and much of it's rooted in the structure and not pricing correctly, not paying correctly, you know, not strategically planning, right? There's a lot of different things. So a few of the things that I always love to, to dive in is, is understanding like, well, one, how are you currently pricing a project? So if you roll out to a home and you just

have like a standard offer like what's your standard offer if you want to do a whole home replacement so if we're doing i'll give an example uh recently actually just closed the job this morning okay so felt great energy's on here we go let's go um and the way that i came into the house identified what the needs are i looked at i presented options on what system would work for them you know, asked about air quality, all that stuff. That location, it's a full new duct system. Yep. It's a small house.

It's not like that much, but it still has a good amount of detail. So the way that we look at pricing is we look at our cost all the way down to labor, all that, and then we divide it by 0.45, so we get a 55% gross margin. so right now we're working on being at 55% gross but there's other things that I'm not taking in account like we're not utilizing financing so I need to add that into my price so everything's cash right now pretty much okay wow pretty much yes but we are no we are offering financing but zero percent through our programs we're not really yeah there's there's a difference in having financing available and offering financing

So that's why one of the things that I really appreciate with the phone call with Alex was like his business was basically built on financing. 100%. And he showed me like, dude, even though you think that you want to be with this kind of income level, I don't know, because these guys have cash and then kind of play with you. Someone that has a need and you can serve them and help them, but they're not making XM. of money but they still qualify you can actually help them to buy better in their life with a better system yeah um absolutely i mean financing i think is the key to volume right and and frankly it opens up your ideal client profile you're right what we refer to as an icp right like if if you're going in and you're expecting somebody to pay what's like what's your average ticket

we're at right around 14 000 okay so if your average ticket's 14 000 okay so if your average ticket's 14 thousand dollars and you're going into a home expecting them to put or you charge half up front in a cash deal yes seven thousand dollars down and then figure out how to pay another seven thousand dollars it's something the the the stats are like ridiculous like 80% of the population doesn't have more than five thousand dollars sitting in their bank account right and so if right out of the gate you're only being able to market to 20% of the population and you know out of that 20% how many of them are willing to put their whole bank account into an HVAC system, right? And of course, like, when you're dealing with a customer, there's a lot of psychology that's

going into this, right? The psychology of the consumer of, like, one, they have a reputation to uphold. Everybody's got a reputation, right? Everybody wants to feel important, look good, feel good to other people, even if they don't know you, right? And so one thing they don't want to express to you is I don't have the money for that, right? Like, nobody wants to say, I'm poor, right? Yeah.

Regardless of it's true or not, nobody wants to admit that. Right, right? And so when as an HVAC professional or anybody in the home services, like if your product is more than $1,000, if your product is more than $1,000 and you are not leading with financing, you are making people say I'm poor. and, and also sometimes calling them poor. And this is what I mean. Like, if I'm sitting there across the, the table from you, and I show you, hey, a $14,000 system. And instead of saying, hey, yeah, all of our people,

we qualify for zero down financing, it's just $98 a month, right? If I don't present that it's $98 a month or $150 a month or $200 a month, and I only present $14,000. And you in turn tell me, I need to think on this or whatnot. And then I'm like, oh, by the way, we have financing. Even if they want that financing, by them taking it, they're admitting, yo, I'm poor. Yeah, I don't have this $14,000.

I don't have the $14,000 and I need this. And so you basically want to eliminate that friction of the customer admitting that they're poor. So that's one of the biggest things that changed and I began to move towards this way was understand like people don't have that money. Right. And no matter how you say, if you had a Dave Ramsey passed or, you know, we personally, I took it really serious, canceled credit cards, it does affect you no matter how you do it. That's why I was like, man, forget financing. I don't want to have people screw over their life and all that stuff. But the truth is, people need to have incredible H-FAC systems.

They're going to better their life. This is the way I justify it. I mean, they're going to go by Jordans or H-Fag, you know, whatever. But the truth is, if you can save on their energy, they come home, even if they had a terrible day, something happened at work, they come home to a comfortable AC home. Right. Or they will have a way better experience. Or they can come home having an amazing day. their house is extremely hot, they'll get mad at the kids, mad at the wife, you know, it's just

I mean, dude, the reality is no matter how you look at it, whether it's a tool like what you're talking about, like it's elevating their life, right, from a tool standpoint, allowing them to be better fathers, mothers, sisters, brothers, better providers at work, what on, like that's a tool and the straight asset aspect. If a home doesn't have a working HVAC system, it's worth less the cost of the HVAC system. Right? And this is an asset, right? Like an HVAC system is an asset to a home. There's also a psychology piece too of like that we've learned in solar is you present the HVAC system at, you know, 15 grand, 14 grand, even if they can buy cash.

You mentioned that Alex was talking about like, dude, you actually don't want these customers at this upper bracket because if they can pay cash, they immediately have to think this is an investment. Whereas if you just present the 98 bucks a month, that's not an investment for them. And you get to mitigate that, that, uh, a business. objection later because they don't have to perceive this as an investment. I've got to go talk to my account. I've got to go talk to this, then, the other.

It's just, this is what happens. There's just $98 a month. It's like having a cell phone bill. Yeah, right? Having an HVAC system is a cell phone bill. It's a tool. It's a utility cost. Correct.

Versus a debt that's being taken on. And actually yesterday, we got off the call with Goodleap. And finally, we got our integration done because of our name change. that's right yeah and so we're going to be able to present proposals with the monthly costs love it and that to me is like one of the tools that because when you go into a certain house or you know even you say hey it was it's only $99 yep what do you mean $9 this system costs yeah $99 you know and it's it's nice than saying oh it's 14,000 yeah it's a completely different psychology so on top of that so right now you're you're pricing

your stuff at 55% gross margin, what about negotiation? Customer says, hey, I can't afford this or can you do it cheap or so-and-so is doing down the street. What are you saying? So let me tell you this, okay, I got to show, I got to give you guys a full picture. I went back into sales about a month ago. Yep. And I haven't done actual like face-to-face customer sales in a very long time. I've done construction sale custom homes all that stuff so for me i've just been facing stuff like this and i'm like what is going up because i'm so used to saying discount sure i'll do i'll beat that price you know and unless i did run into somebody i'm not going to say his name but somebody told me hey just win the job which whatever the guy ended up going lower and uh but what i say now is i go back

to my CRM service time and I say hey let me see if I can make something work and I look at it and sometimes it does make sense if I can pull some triggers other times I just say no right it doesn't make sense to me what what about so I know you've had a sales force do you currently have a sales force right now is it just you so I just brought it on the way up here I just got a guy that left one of an awesome company I mean they're they're struggling in our market but he's going to come on and he's starting on the 20th. Awesome. But previously you had sales guys.

So what did you allow sales guys to do? So I paid them on gross profit numbers, not total job. So if he was going to go. So I had one sales guy and if he would go below 50%, he'd get 5%. Got it. Can I give you some feedback here? Absolutely. Okay.

One of the best things you can do is eliminate negotiation. like when you give room to negotiate it does two things one it tells the customer like when you're willing to negotiate it tells the customer hey I was trying to screw you to begin with okay I mean like wait why didn't you present me the lower price to begin with you're willing to drop it now why didn't you do it before right right that's that psychology number one number two is it also uh prohibits the salesperson from having perfect confidence in the price and so because they know that in their back they can negotiate and that previously they negotiated and they got a deal then what does it do

it creates a cyclical error of constantly so one in my companies we do not negotiate we cannot drop price prices cannot be dropped the only exception to that is a promotion that is done by the company and decided upon by the company, all right? And that's not done in the moment either, right? Like, it's like, okay, if this is our price and we're running a promotion for the rest of the month, then the promotion is for the, and so it's just, it's the price is what it is, right? But at the, every time whatever is presented the customer, I am not, like, we are not going to drop from that. Okay, so it solves those two psychology.

And in turn, what it, what it encourages with, the salespeople is actually to be better salespeople, right? Because when, when a customer says, hey, can you lower the price? And even if you respond like the way you were just saying, like, hey, let me, let me, let me check on it. What that, that is, whatever you're doing here is not a good sales practice, right? It's not using sales skills to convince them to buy at that price. It's you're, you're trying to negotiate on price. And the same, the same psychology that, navigates price is what navigates pay with employees as well, right? And so just understanding that you can get great employees by not paying the most in the market and you can get great

customers without being the cheapest in the market. Right. And so it's the same type of thing. But like then it allows us to up our skills, say things like when the person's like, hey, are you able to go cheaper? Right. Like if a customer is like, hey, Can you drop the price at all? I have a couple different responses I love. One would be, Mr. customer, yeah, I can drop the price, but I'm going to have to cut corners. Which corners would you like me to cut?

And immediately, how do you respond to that as a customer? You don't want the corners cut. You want the whole package. I don't want a corner to cut. And basically, you come to this realization of like, look, our price is what it is. and we put in, we're going to bring the best equipment, the best value that, right. And then one of my other favorite ones is, he's like, ask me, hey, why are you $5,000 more than

the other company? Why are you $5,000 more? Hey, that's a great question. David, why is it important to you that we're profitable? Well, I know why, because I don't know business, but I want you to honor your warranty. Yeah, so as a customer, why is it important to you that me, as, is Meister or Meester heating and air? Why is it important that maister heating and air is profitable to you?

Because you give me warranties and guarantees, and I want you to be in business if something goes wrong. Exactly right. And because of that, we refuse to drop price. If you want to go with ABC down the street, you're more than welcome. But I'm assuming this isn't just a short-term investment for you. No. Right.

And so, like, here's the reality is that a customer has never been asked those questions. Go ahead, sorry. I was just saying, think about it. Like, have you as a customer ever been asked by someone trying to sell you something? Why is it important that we're profitable? I'll tell you, like, one of, one, another big thing why trade guys don't think about this kind of stuff is because the business coaching part of the trade, you don't,

you don't get that being in the field. Right. You don't, you know, you don't understand how to negotiate. you don't understand of saying you kind of like you know someone say i got an air conditioner or mine just broke you just go there and help them out when you're working for somebody else but when you actually start looking to the business and understanding what how numbers are supposed to be ran and how you're supposed to look at them you're thinking like no way i don't know i just spent 20 000 on gas right i had no idea you know i don't know that my um you know building payment

is six and a half thousand oh it's only six and a half thousand what is that and then at the end of the year you're like oh my goodness so if you're looking at percentage wise it does make sense right so not having that kind of background because you're in the field and you're just kind of oh this is a lot of money because i make this much and now i can make this much i'm like you know way more twice as much or whatever and that's kind of mindset i had i like period and here's the beauty is you you don't have to be a business owner to see this kind of training, right? Like, like, one of the most important things you can do as a business owner is to train your people on this level of psychology and help them understand, right?

Right. Like, when we talk about business priorities, there's three priorities in a business and the way that they're prioritized is very important. So most companies prioritize the customer first, the employee second, and the company third. Right. When the exact inverse needs to be true, the company needs to be first, then the employee, then the customer. And that is the only way that you can serve the customer. And the reason is if I am profitable, if I am priced correctly, profitable in business long term, I can afford to take care of my employee, pay them right, motivate them right, build the culture that's going to last, keep great talent around, provide opportunity. for them to learn and grow and intern. If I do that, they will take care of my customer, right? And that is the best, that is the best way to serve your customer is actually putting them last.

And it seems counterintuitive, but it's the reality. It makes total sense. And like, and educating our team members on this and educating our customers on this, right? Like if you can, if you can teach your salespeople like, look, the company needs to make a lot of money. Because if the company makes a lot of money, we can provide you a lot of opportunities. You can learn, grow, you can develop, you can be in management opportunities. We can expand locations.

You can be a general manager. You can do all these things, but only if the company is profitable. And if that, then we can take care of the customer, right? So now they can sit down with a customer and have a conversation of, hey, Mr. customer, why is it important to you that we're profitable? And the customer is all of a sudden is going to start selling you on why they should go with you versus ABC. you know, heating and air down the road. The confidence your employees have in the business gives them like the value to sell you, sell better to the customer.

Because a lot of the times pricing is not the actual objection. Right. Like it's just a value proposition that needs to be readjusted because if it, regardless of the situation, if their HVAC was completely out, they would probably be willing to pay any price to get it fixed if the value was correctly set up. Like another great objection of ways. Like I noticed, Mr. customer, you've got an Apple watch, like on your wrist. Why didn't you just get like a Casio or Samsung? Why didn't you get that on your wrist and set just to tell time?

Yeah. No, I mean, there's so much for me. You know, I can go on walks and it tracks my steps. Yeah. And you have an iPad too, and I assume you probably have an iPhone. I do have an iPhone. Why don't you just get like a flip phone? You know, I just, I like Apple.

I see the value and I'm willing to pay them I'm willing to weigh overpay I feel I feel like that is so important what you're saying because if you're it's also a process right so if you're coming in and another thing I want to kind of backtrack it's so hard to change a mindset of a team or a culture of a team if you yourself are programmed that way and that was one of the reasons why I had to separate myself from people in my business yeah And I'll tell you, I'll tell you one other quick story. I believe it was at the end of 2024. I said a prayer like, God, please, I want to, you know, people say, it's your team.

It's your team. I say, God, please help me to build an amazing team. And if there's people that need to be here, bring them on. If there's people that need to be gone, take them out. Well, this year hit me that really good. I'll tell you that. Like, I have a whole new team, which is nice because now, like, we might have never done something before. And I'm like, this is how we do things here.

Yeah. And they're like, okay. Yeah. And like today on the way here, I hired a new service technician. And he was an installer. I told them, dude, you're going to sell. It's, you have the path to the customer's heart because the sales guy comes in, all nice and everything. You're just a tech.

You're here to help them. On the way here, this guy closed and a lot. $11,000 job, too many splits, like, you know, I said, dude, that's amazing. And because changing a mindset of a company is so hard. And that's why changing people and just, I mean, not in a bad way, but because they're, you know, it's not a good fit or they just have their own dreams and goals.

So for us, we're doing it now and being on the right CRM, knowing your numbers better, and just making sure you're making money. money. Yeah. If I could add one more thing to that too is like you think we start hiring these sales reps and technicians and we give them these powers to negotiate thinking like that's what they want. But I promise they don't want that because now they have to think about numbers when before they could just think about if you take that power away from them, they all they have to do is think about value, sell objection handling. But now because you give them this power to negotiate, they got to start calculating how much am I going to make on the back end of this. Do I want to give

them half and then have to save some wiggle room in case I need to go down again and then continue to objection handle like they don't actually want that power you want your employees to have the easiest path of success and it's by doing less like just standardize it across the board we never did discounts unless it was a company forward facing discount so I've got I got some numbers here in front of me yes so we got year-to-date financials yeah and I want to so you know one of the old adages that I love is that numbers don't lie people do and so I think and the beauty of when we accept the lies that we've told ourselves and accept the truth for what it is that's the only way that we can make change right you agree absolutely like you shared your story

earlier of you coming to God and basically putting it on on the table and basically what that represents is everything in life is done based on truth when you own the truth expose the truth then you can change right and the same thing goes for running a business yeah it's the exposure of the sins of the business that allows us to make change and uh sins of the business because man i'll tell you what there's some sinful things here help me lord but uh but yeah so what we got here just to be like specific with the numbers we got 2.1 1. So 2.1 million this year. So 2,117,882 year to date. That's through a July 31st close. So first of all, what's your biggest year to date up until this in revenue? So we did 3.6 last year. Okay. Cool. Yeah. So right now you're on pace to outgrow that a little bit. So I don't know if we're going to do because of seasonality.

Well, not only that, we are focusing more on structure and versus just top line. Yep. Which, yes, profits are sanity for sure. And so let's talk about that. So right now, you're 2.1 top line. This next line is one of the most important things that most business owners fail to understand is their gross profit. So, like, right now, you'd shared with me, hey, we build all of our stuff at 55% gross margin. Right.

Your numbers here would say otherwise. That's right. And so right now, right now we're at $799,000 of gross profit. So if you take that divided by that million, we're at a 37.7% gross margin. Yeah. So basically, if you want to open the other link I gave you, it has the percentages on. on the right side too. Okay.

So it's super easy. Love it. Let me pull that guy up. 100%. And then there's no justification. I know that. So to me, all that says is one, you're either one not pricing correctly up front or two, there's too much negotiation going on, right?

Yeah. Too many special deals, side deals, everything like that. And so the hard part with, so a standardized offer is one of the best things that I could get for yet. And a standardized offer is basically like, we sell mainly one solution at one price, right? Like, and I know it's very common in the HVAC world to give choice. Like, good, better best, you know, good, better best, you know, we have options. We'll customize it to you, right? Right. The problem with customization or the problem with optionality, optionality creates a confusion, right? And a confused buyer doesn't by and that's so true i'm i just listened to a guy named sean mitchell he said he did eight over eight million with a company down uh in seattle area yep and he's he actually says that i

do not give too much options because then they got to think about it they got to figure it it's it creates confusion right like whenever there's more because here's the reality most customers so there's a range of customers and if you've if you haven't dive into my course where I talk about this and it literally talks about like the different levels of of questions or knowledge that a customer needs to buy and the lowest common denominator is like Billy Bob right so Billy Bob when when he calls up Maister heating in there he just knows he needs a new unit right and he needs it now right and so when we go and we give Billy Bob too much information Billy Bob doesn't want to admit to you that he has no idea

you're talking about, right? And so in his mind, he's like, well, I didn't think that there were other options. I didn't think about multiple warranties. I didn't think about this, that, and the other. So instead of admitting to you that he's confused, he's like, David, can I just have some time to think about it? Can I give you a call back tomorrow? When reality, if Billy Bob would just been a lot, hey, Billy Bob, this is what you need. He's like, man, I just need me some money say you, and didn't realize there were so many options. That's how they sound in liquid. Right. And so like the less options, the less options, the better and the more standard, the better. And when you are standardized, you have predictability. All right. So if we are consistently always at a 55% gross margin, now I can make decisions as a business owner. But if I think I'm at a 55% gross margin, in reality, I'm at 37.78, it's really hard to run a business. It is. And I'm feeling that pressure. And that's why for me, you know, I reach, I'm reaching out to, uh, you guys actually. You know, my goal is to grow and learn and understand how can I better myself as a business. And a lot of the things that we just don't know because no one does this. Right. And the thing is we can go and blab and everybody lies on their numbers too. But so that's it when you look at this stuff. Um, it gives you the truth. Now,

it put me in a in a unique position because I took I looked at this this was recently and we did a call with our CPA and he said your materials and supplies are quite you know it's 33% yep you know each fact is expensive but that's a lot of money yep you know and another thing is like our direct labor it's not bad we're at 20% that's you know you know you You got to pay to have good talent today. Absolutely. Kids want, or not kids, guys want to be on, not in the crawl space or in the attic at 130 degrees. So if you want good integrity work to be done, you're going to reward that.

But it has to be built into the price. Now, another thing where we're struggling a lot in is marketing. Yeah. Because we're not going to the right customer. Just like we said, hey, we're, like we're actually selling to a higher end person, you'd say, in a society. Because that's where we grew as a company. And it was easier to go there and say, oh, these guys got cash. They'll pay, boom, boom, boom, whatever.

So can I give you the straight truth here? Yes. Cool. So the reason you're struggling with marketing is because you're not spending enough. And the reason you're not spending enough is because you're not priced right. And so, and really, every single business starts with the offer. Okay. If your offer to the marketplace isn't structured the right way, it doesn't matter how good you're at marketing.

It doesn't matter how good you are at sales. It doesn't matter how good your installation processes. If you're pricing and offer is not structured correctly, you're scaling a piece of crap, right? And so, like, if I'm looking at this, I have to see a consistent. So for me, I'm building my heating and air company at a 60% gross margin. Okay. Not 55, 60. And I'm not 60, I think it's 60, but it's going to show up as 60.

here, which means I've got to go through and see how my labor is actually being priced in, how my equipment really is, what happens when we have to eat certain things. Like, because do you guys ever have to eat something with the customer that you didn't properly quote it? Yeah. What are examples of that? Oh, sometimes, you know, let's say like we're doing something in the attic, drywall. Yep.

You've got to repair some drywall. That happens. How often does that happen? Not often. I would say, you know, out of 100 jobs, maybe two, three. And how much does that cost? Oh, it depends. Right.

Yeah, it depends. I would say, like, let's say that an average drywall repair, we're at around like maybe 600 bucks to repair the drywall paint. Right. So this is like, and here's the reality is like right now you're pulling that number out of your butt as far as how often it happens, right? Like, you think you know. So what, I mean, pretty much yes.

I mean, you have a gut feel about it, right? Right, because what I do is because I don't actually really look at, hey, we had a damage on the drywall. So we just call Victor. Right. And then, you know, we get a okay. So my point in this is like, you've seen it happen. You know it happens, but you don't know exactly how often and how much, right?

And so this is an example of knowing your numbers and how you have to make sure that you can price it in correctly. Because somebody's got to pay for that, right? And so for me, the way I like to price in certain things. So like, for example, if I know something happens one in four homes and I know that one of that thing is going to cost me $400, what do I do? You put in all of them? I'm going to put $100 into every single. I'm going to, yeah. And so because, so I protect my margin.

Right. And so that when I do have to eat $400, no problem, the law of averages keeps me at that same. And right. And so if I'm properly creating that offer, my gross margin is going to only vary one to two percent maximum, right, based off a little mistakes or whatnot. But like right now, you're thinking it's your price at 55 and you're actually coming at 37. That's a huge variance. Yeah. Right. 18. Imagine an additional 18. percent to the bottom line. Oh, right. The coolest part about baking that price into like one of every four homes is, you know, if you got to go fix a drywall, one out of every four homes is when that happens or a mistake happens by one of your technicians, the customer's like, oh, well, what the heck is supposed to happen? We'll take care of it, Mr. Customer.

Don't even worry about it. That was our mistake. It's already done. Don't worry about it. And it's the value stack of the company becomes so much higher of perception of value just because you're like, oh, and we need to change out your electrical panel. we'll do that for free. Don't even worry about that, Mr. Customer.

So, yeah, that's the example is, like, even when it wasn't our mistake and it was actually the customer's home mistake, where you should be able to go back and bill them for it, like they need a new electrical panel upgrade or whatnot. If you're baking that in, you now can offer, like, you're basically giving them something incredible

without having to come to the... Because think about how many other companies that are in your industry, send them a change order, and be like, all right, it's okay, we'll upgrade your... electrical panel is going to cost you $2,500. So don't worry about it.

And then now you've created an opportunity for them to cancel. And so now the less opportunities you give them to back out because you had to change something, you've already baked into your price. The more you can just bouldose your way through the rest of the process and it's nothing to you as the company or to the customer and it's completely seamless. Because there's two ways you're going to increase your gross profit margin. Lower your cogs or increase your price. And it's a lot easier to increase your price than go through line item by line

item of like so well I should change my this or that so what one like 100% I agree with and that's why we're in when we're focusing on like you said it we're not marketing you know we're not and and the thing is what I'm figuring out is okay how are we supposed to do marketing because I've never done this before you know we did some flyers recently we did you know all this unique stuff but still where do where do the most customer come from it's going to be google yeah like that's your best customer yeah today i'm on my like fifth digital marketing company who you guys using right now so this guy that we just got he started in july and i went to us i went i dropped all these cool big names that were just in the background

i went to a small company who'd you use previously oh come on all right dang it who'd you use We used Camp Digital. Who else? Rival Digital. Okay. Who else? Before that, oh, so sad, a high boo. Okay.

It's like the yellow pages, I guess. Man. So a couple things. A couple things here. Like, let's just look straight at your numbers. Yes. If you were actually hitting a 55% gross margin, that would have an 18% more to drop down, right? and then if we so right now you're spending 5.77% on your marketing that's not enough you need to

at least be 10%. So marketing is one of those interesting things if you're spending too little it's a it's a stab. If you're spending too much it's a stab right right like meaning like you're spending too little you're costing yourself revenue you're spending too much you're just doing it wrong right Right. And so this number has to be 10%, 12% max. And so what that's doing, because this is directly correlated to the amount of revenue that you get, right? Like if you, like typically, if you're at 5%, if you double your spend, you should get double the customers, right? Now you have to have the operational capacity. You have to, not only that, you have to have the proper business model because even though it says 5%, we actually spend more than 5% because a lot of this revenue comes from new construction, which is the repeated builder. We work with a remodeling company. So if we take down, so we're about 60% retro like replacement service and then 40% new construction. And we only do marketing for retro service.

Got it. We do zero marketing for new construction. Okay. So, I mean, so the reality is you are probably like 10, 11% for your new, for your new business. Yeah. Right. Your new retro business. Yeah. Yep. Totally, totally understand. But like, even then, how are you pricing your builder stuff? So we, the way that we do it, we try to do it. So that's, that's going to be a hard one for me to answer because there's so many details. But our average project is around $30,000. And that's, that's a higher ticket for a new construction. or remodel. But I have, it's a very unique path, but I have everything built out by systems

and what it is, like we go by the heat duct. So for example. Do you know your gross margin on that 30,000? No. Okay. Very vital. Very vital. And so this is the only thing I would say that potentially,

so on new construction, I still like to be very high margin. And at most, I only want to reduce it by the cost of marketing. You know, what I can do is I can see if I can work this out. And that's fine if you don't have those answers. We don't need to solve that on this. But this is my philosophy on new construction is if you're going to reduce it because you have that repeatable business, only reduce it by the cost of marketing.

Right. So basically your difference between a new construction and a retro should be about 10%. And now I understand that may cost you business in certain aspects, but the problem is, like most business owners, they make the decision like, well, if I make a dollar, it's a dollar I wouldn't have had, well, but it's also a dollar that you couldn't focus on a different channel with, right? Right. Right. Which is more and highly profitable. And at your current spend, you know, we'll take the 5.77% with a grain of salt with your new construction. But to me, highlights if you're not spending on marketing well marketing is a casino okay as you walk into a casino

the casino will always have the edge on you right if you sit down on a blackjack table you get one hand dealt with you and if the dealer is showing a strong hand and you've got a weak hand you've got a hit but the problem is sometimes you'll still hit and you might still win but sometimes you'll bust and you might lose but the problem is you only had one hand and if you're not spending enough on marketing, you're not able to figure out with data how many more hands you could do to find the winner because you're going all in and hoping, you're trying to get a lottery ticket with 5.77%. And unfortunately, most of the time as marketing, most of your ideas will fail and most of your ideas won't work. So you have to spend enough to test so you can find

the ones that work and scale that to the moon. And at 5.77% you're not testing enough. And of course, to your point, you got to have the right, you got to have the right group and you got to have somebody that's running your, you have to have a right systems, right? Which starts with generating the lead and then having the proper CSR that is going to convert that lead to a book, right? And from that appointment to a close, right? Like that system has to be constantly fine-tuned, trained up and delivering for marketing to be worth it. Right. That's, that's very true. And with marketing, like another big area where business owners just don't ever get learned never taught about it you know and what we're doing we're trying like social media stuff we just like I thought

was going to be such a cool video we got you know that I was going to get like a bunch of views and stuff I threw I dropped the unit off my roof like it was supposed to be pretty cool you know no and it was I was giving away a free heat pump in the month of July can you believe that and nothing happened zero entries and by the end of the month i said take it down because if one person enters i'm screwed it's a good thing nobody got in so and it's like it's like okay what so this is this is a classic marketing mistake is that we think we are better than the data at like determining what's going to work right right we see something viral we're like hey let's recreate this it's got to work you go all in you do this high production you freaking bust a system

you do whatever else and then it doesn't work and then on the opposite you got a few of your employees doing a christmas tic-tok dance right and it's generating your highest leads and converting and this is reality for us just so you know um like like one of our highest performing ads ever was five of our female employees just doing a christmas a dance with christmas music that continued to run through the summer. Yeah. And like, told me that.

They continued to run through the summer and it was our best performing ad, right? Like, like, at the end of the day, Levi's going to say, we're scientists, right? Like, we're, we're not these great artists or whatnot. Like, marketing is a science and you've got to test and you can't go, you can't go all in on one hand, right? You've got to be diversified and you've got to take whatever's performing and add more money to that. rather than going this big giveaway that you broke a system on

that you thought was going to break the internet you know i also want to add too like we think as small business owners all the time the more discount slash free things slash giveaways i can do it will probably like who doesn't want a free heat pump but i'm gonna tell you this right now as an uneducated hvac customer i don't even know why i want a free heat pump you know what i'm saying like if i'm not properly educated on the paint of why I should have a new free heat pump. I don't even know why the value of a free heat pump is, because you're like in your brain,

dude, you kidding me? How did nobody enter a giveaway for a free heat pump? But if I'm sent as a customer and I don't even know what a heat pump does, why would I enter it? So that also goes to not even just specifically you, but anybody watching is like structuring your offer and you're scripting and you're creative of don't just keep stuffing and doing more discounts and giveaways,

identify a true pain and educate your customers, those would be the best customers to sell, the ones that you teach those things to. The sad reality about whatever your product is, nobody knows as much as you do, nobody cares as much about your product as you do, and frankly, nobody probably even knows what your product is, right? Like that is the sad reality. The truth and the happy reality is people just want something that works and gets them a result to solve the pain that they're in.

that's it and so like at the end of the day we sometimes we get hung up on like oh this is the best xyz product with the best warranty and the best everything when nobody cares right and nobody knows that that's a cool thing in fact i was sitting with the fencing company the other day and they were trying to tell me about this cool product and they want to carry this product and they dropped the name and I'm like what's that and like you don't know what that product is I was like no what why would I why would I know that brand of fence and like everybody knows what that I'm like news flash I'm your customer nobody knows like and so just like getting in the head of the customer and understanding like who we're selling to so when I rebranded I started to

attract better talent yeah and like these other companies they're not selling these they are selling some of the top of the line stuff but that's so true the brand or whatever company or system or whatever that you're using your material doesn't matter it's truly about who you are and that's why we shifted the focus and doing more like social media stuff about who we are love and you know that right there actually put me a look at these numbers actually put me in the room with some amazing people and they understand like, hey, I'm looking for a incredible product that's going to take care of my customer. Yeah.

I'm not, even though maybe the name is not there, but I need it to deliver. Yeah. And if you guys got my back. A reliable product. Yeah. For sure. Customer wants a something that works and solves their problem. They don't care about the brand.

They don't care about like all the fancy whatever, right? The stuff that we get hung up on. The only reason they think they care about the brand. is because they can trust that brand that it will deliver the results or hope that it deliver results. And so like this is what I've learned recently in the past. Well, basically, I've had the business for two years. Right.

That's why I started to focus on the CRM, on the brand name, systems of processes, answering the phone call, looking through, you know, making sure the leads are being booked. It's what we went through today. It all has to make sense because even if you say like your sales process, might be really cool, but then you're dropping the ball on, like, discounting or whatever structure. Yeah. Installs guys are promised maker.

The installers are promise keepers. Yeah. So if your install guys suck, you're not going to deliver. The whole wheel has to be round. Right. And then that's from like getting the lead, booking the lead, getting the sale and fulfilling it and then get referrals. And then get referrals.

Yep. And that's where we're at. We're figuring all that out because it wasn't. just a discount game and one thing that frustrates me the most is you know I my ad spend on Google LSA is not small right but my Google is broken I'm not getting calls yeah and to me I'm like what is going on and that's why I hired a smaller company that I can reach out to hey we got Google just gave me the scene whatever just figure this out dude yep and um overall it's it's a process. So a couple

items of homework that I would give you. Okay. One, let's create a standardized offer that's going to consistently get you that 55 to 60% gross margin. Because right now you're not, right? The 37%. That alone, if we just shifted that additional 18%

all of a sudden your business, right now you're operating just over 10% net, right? So on the 2.1 you've made 200 and you know, some 219,000, which is great. And it's respectable, right? But imagine that number with, that's more than double, right?

Oh, yeah. Yeah, like that this, this number could easily be a 25% net. You could easily be over $500,000 today if we can standardize that offer up front. So the standardization of that offer, we can get that to, let's just call it a 55% and then dial in the marketing to a full 10%. I don't care what, like, where you're at. like if you can average 55% across commercial residential everything and get the total spend up to 10% and of course it's got to work right like the phone's got to ring the the appointment's got to be set it's got to be booked right you got to have an 80% booking rate

and everything like that like fix those two things your business will look drastically different this time next year and and again you're in a good position a lot of people are in much worse positions like like your problem You've got a lot of really good things going on. You've got a great name. You've got some good people. You've just recently hired another salesperson, right? And then now with these new people structuring it in a way, and this is one last

piece I would give to you, do not pay the sales rep on gross profit, pay them on a percentage of revenue, total revenue, because they won't have control over the gross. gross profit. Now they just get paid. So that's interesting that you say that because a lot of times people say, you know, if you're looking at the gross profit, that's the accurate way to pay. So the reason why people say that is because they negotiate with price and they want the sales rep to be tied to their negotiation. Okay. And they give them the opportunity. Like, hey, look, if you drop gross profit, you're going to drop too. Look, you can't drop because you're selling it. Like, if you and you have a unique opportunity right now you're starting with new salespeople

build it the right way yeah and i promise you this is the right way and you know it's going to it's going to give you so much more power it's going to you're going to train your people so much better they're going to sell the right way and ultimately they'll make more money yeah i think that i know that that's that's a hugely marketing has been such an opportunity for us it's just we need to figure that part out and i'm willing to invest but when when i'm not seeing the fruit it's you know it's a little hard because you're like man why am i spending that you know three grand on yelp a month and we looked at the revenue and it's like it doesn't make any sense you know or whatever the case no matter what so but i like your

even though i'm not into like gambling or casinos but you're saying hey you know it is it is a chance you got to kind of you know shoot and see what works and dropping a unit off the roof I think a better analogy is like the stock market you can either try to go all in on one stock hoping it works or you invest in a mutual fund

in a mutual fund you know eliminates a lot of your risk and basically assures you're going to be successful so I wanted to ask you a question I heard I was listening to your story yeah on the way up here and man you have a crazy story

I was shocked like I you know I heard you on a podcast with Tommy Mello yeah and you recommended a book that i actually listened to twice james clear comic habits shout out it yeah jimmy jim so that book just completely changed well that's why i drink water i don't have celsius in my van anymore because you know you make you adjust your life but you were at a point where like you thought you were making money you made all these investments and you got all these you know or you got all this money from family and whatever when did numbers really just like click for you and how did you get to the point of like

man this is where business is it's not all motion or you know that's a great question so I think one I have been fairly naturally gifted with numbers from the beginning so I've got eighth grade shout out eighth grade uh state champion Washington state champion math team um but uh but even then even though numbers made sense, like to your point, I did make a lot of emotional decisions that were more emotionally driven. And frankly, when did it all shift was once I started getting in the right room with the right mentors and I saw the importance of having the KPIs and the numbers and everything in your face constantly. And not just numbers, but like knowing the meaning behind the numbers

and the story that they're telling. Right. And so like, again, when I look at your, when I hear what you're saying and I see your numbers, I know exactly what the truth is, right? What the real story is. And so, like, that's, um, it's, it's a process of education. And, and I, you know, I've spent a lot on my education, 1.3 million in personal development, um, being in the right room, being with the right mentors and whatnot. And so, um, and then of course just, you know, bumps and bruises too, man.

Like, yeah, I think that's where you, I think the, the spending the money, you have to spend the money because, you know, that, but that's how you actually get to the people that, hey, let me show you what I went through here in my numbers and like you get those connections and they call you or you call them. Now they call you say, hey. And another thing that stood out to me was you talked about your bankruptcy and you said, please, please, please reach out for help. I think that right there is another big opportunity for the trades. Yeah. Because we feel stupid when we don't ask questions. And I failed so hard. We feel stupid when we do ask questions. Yeah, yeah. So we don't, we feel stupid and that's why we don't ask questions. But that, a wise person,

the Bible says, it's so amazing. Scripture is so powerful and true. But a fool is wise in his own eyes. Right. Right. And then a fool cannot get instructed. Amen. You know? So that to me was those like things like, stood out to me. I was like, man, this is where my life really changed. And it was I when I began to ask for help. And that's why I came to a decision of moving away from my situation with my partner and working on the brand and getting on the CRM and eventually coming to this place and working with you guys. Yeah. Well, David, dude, we appreciate you trust in us being a part of the next level community, sitting down with us, going over your numbers. Dude, you have an incredible opportunity here. Like you build a great brand. I mean, this,

This is something that if you can dial in these numbers, the scalability of it, right? Like, I mean, you've seen as the people that have gone before you, like in the HVAC space, this is something that could be scaled to $50 million, $100 million, $200 million a year. But the only way we get there is we have to have, we have to fix the foundational stuff that allows it to scale. And so you have some incredible opportunities. Look forward to working with you on it. Thank you. Appreciate you being here today.

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