Next Level Pros - #34: Tommy Mello: Founder A1 Garage Doors, Podcast Host, Author

Episode Date: September 15, 2023

Join host Chris Lee in an exhilarating conversation with Tommy Mello, the entrepreneurial powerhouse behind the massively successful garage door service empire, A1 Garage Door Service. Tommy's journey from humble beginnings in Michigan to scaling a multimillion-dollar business in the home service industry is nothing short of inspiring. In this episode, Tommy shares the ups and downs of his entrepreneurial path, from hustling side gigs in his early years to realizing the importance of processes and management in business growth. Tommy's story takes a remarkable turn when he delves into the intricacies of navigating a private equity deal and the transformative impact it had on his company. Listeners will gain valuable insights into the process of preparing a business for private equity, the role of due diligence, and the pivotal moments that led to Tommy's business success. Tommy's infectious enthusiasm and candid storytelling make this episode a must-listen for anyone aspiring to scale their own venture, providing practical lessons and inspiration along the way." HIGHLIGHTS “I hear it every day. I'm just gonna do what you did in my industry. I'm like, Well, how many markets are you in? You're in one. And you own 1% of the market, you need to take market penetration in your market plus two or three other markets.” “The other thing is, don't listen to broke people. Because broke people are going to tell you all the reasons why something won't work. But successful people are going to say, 'Well, if you do this, this, and this, this will happen.'" "I love helping people, I love growing people, I love watching them succeed. And I think that's one of the big keys to my success." TIMESTAMPS 00:00: Introduction  02:39: Making Money At A Young Age 04:34: Selling Cars 09:27: The Beginning  12:50: Service Titan 19:06: Hiring The Right CEO 21:37: Rasining Capital  28:44: Process Of Buying And Selling A Company 38:06: Freedoms 46:30: Family & Business 🚀 Join my community - Founder Acceleration https://www.founderacceleration.com 🤯 Apply for our next Mastermind https://www.thefoundermastermind.com ⛳️ Golf with Chris https://www.golfwithchris.com 🎤 Watch my latest Podcast Apple - https://podcasts.apple.com/us/podcast/the-founder-podcast/id1687030281 Spotify - https://open.spotify.com/show/1e0cL2vI1JAtQrojSOA7D2?si=dc252f8540ee4b05 YouTube - https://www.youtube.com/@thefounderspodcast

I hear it every day. I'm just going to do what you did in my industry. I'm like, well, how many markets are you in? You're in one? And you own 1% of the market? You need to take market penetration in your market plus two or three other markets. Plus, you need to do some acquisitions to even be considered close to a platform. Yo, yo, yo, yo. Welcome to another episode of the Founder Podcast. Today, I am joined by Mr. Tommy Mello. Tommy is the founder of A1 Garage Door Service. This guy has gone and scaled this thing. We're talking to hundreds of millions of dollars. It's absolutely crazy what he has done as a founder. He's also a best-selling author of two

very cool books. One, The Home Service Millionaire, and then I'll let him tell you a little bit about his other book. But Tommy, welcome to the show. Hey, thanks for having me, Chris. Tommy, dude, where are you joining us from today? You're down in Arizona? So I live in Phoenix, Arizona. Yeah. Yeah, right now, we're right by the airport airport and then I live in Paradise Valley.

That's so awesome. Yeah, so Tommy and I were actually introduced by a mutual friend of ours. And Tommy has just gone on to scale pretty much all kinds of different businesses within the home service. You run your own podcast, that's right? Yeah, the Home Service Expert. And I looked, and I thought we were top 20, but apparently we're not. You might be beating us. I think we're in different sections of business. That's all right.

We're getting about 50,000 downloads a month. The goal is to get that to 100 here. Nice. Very good, very good. Yeah, I think we're at about 300,000 downloads a month right now. Very good. Very good. Yeah. I think we're, we're at, uh, we're about 300,000 downloads a month right now. So, uh, man, that's awesome. Yeah. It's been, it's been fun. So Tommy, dude, tell us your, tell us your story. You're what? 39 years old, 40 years old. Just turned 40. Yep. Just turned 40.

You've been scaling a garage door service business. I know when we were talking and you were, uh, you were saying something like you're doing how many transactions a month in this space? 16,000 to 18,000 customers a month. Dude, that, first of all, is like mind-boggling transactions. Doing that much with an end user at their know, being from the home service space myself, like that, that hurts my brain even thinking about that. So dude, tell us, tell us about like how it all began. So you've been doing this for quite some time.

Give us, give us a little of the background, a little of the story. Yeah. So I'm from Michigan originally. And you know, my mom and dad got a divorce when I was seven years old and my mom worked three jobs to make ends meet. She didn't want to have to move us out of our school zone district. So, you know, I just knew mom was always struggling. It seemed like she was gone early in the morning and working late at night.

She was gone weekends. She was a realtor, a bartender, a server, just doing whatever she had to do. She cut hair. And so I mowed lawns and shoveled snow when I could, you know, I was eight, nine years old and I turned 12 and I got a job washing dishes. You got to be 13 to work in Michigan, but they paid me $4 and 5 cents under the table. And, you know, I just got used to making my own money. Didn't really want to ever ask anybody for money. I mean, Christmas was

great. I'd get 25 bucks from my grandma, you know, whatnot. But I learned how to make money at a young age and learn to be self-reliant. So moved out to Arizona when I was 16 to be with my dad and my sister. Broke my mom's heart, but I wanted to get my residency to go to college out here. And I really needed a father figure my dad's amazing and I going through puberty and just getting away from some trouble in Michigan my buddies were selling weed and just really wasn't going in the direction I knew I wanted to go so was a great move did it for the right reasons was pre-dental while I was running a landscaping company out here. I was bartending, serving, flipping Bowflexes, hustling. You talk about side hustles.

I was a side hustle king. Give us some of those side hustles because, I mean, usually those are the ones that shape you the most. Like tell us about some of the side hustles. Okay. So one day I was watching TV and I saw this Bowflex commercial come on and I knew what Bowflex is are, ad came out on Sunday and the guy's like, dude, you're the seventh person that called. It's already sold.

The guy already came and picked it up. And I was like, holy shit, that's crazy. And my roommate's walking by at the time. And he goes, have you ever heard of Craigslist? And I go, Craigslist? No, he goes, you got to type in the domain Craigslist and go on there. There's a bunch of used stuff.

So I go on Craigslist, first time on there, and I find all these Bowflexes. I went and bought all of them, and I was paying $200 to $500, and I put an ad in Arizona Republic, and I said I want to pay by the year, keep the ad running. And every week I'd go pick up five or 10 Bowflexes. And then I saw an ad for Total Gym. So now I'm doing Bowflexes and Total Gym.

Anything I can find on TV, I'd buy it on Craigslist. So it was arbitrage. I'd buy it on Craigslist, sell it in Arizona Republic, different audiences. And then I started doing cars. I bought G20 Infinities. I did Honda Civics. I did Toyota Tuercells. And I bought G20 Infinities. I did Honda Civics. I did Toyota Tercels. And I'd buy all of them.

I'd have all the extra parts that are extra bumpers, extra tires. I didn't buy four tires. I bought 40 tires. And we'd go in and I'd get them detailed. I'd pick them up. Sometimes I'd wrap them. But I literally just made them look pristine, changed the oil. A lot of times I bought them broken down and my dad would fix them.

And we were just hustlers, man. And what I learned was when I'm working hard, I'm making a lot of money. Whenever I go on vacation, everything would fall apart. And I was just a one man soldier, man. I would make 500 bucks a night in bartending. I mean, I was hustling. I was the number one ringer in all the bars in Scottsdale. Like when I went,

I was doing three, $4,000 rings. This is 20 years ago. So started a landscaping business. And the problem with landscaping is it's low barriers to entry. So I came up with an idea. I said, I'm going to do water conservation analysis because everybody was worried about water in Arizona. So I'd go to these big industrial parks and I'd go talk to them about their water usage and basically show them how I could save them money. And I took companies that were paying 800 a month and I've got them to 2,500 a month and they'd use me. And I just go to Home Depot and pick up 10 guys. And it was just a hustle. I was bringing in 30, 40 grand a month. but then again when i wasn't there it fell apart i needed to oversee everything and you know but all this is going on and the the important thing though here to understand is like not everybody just goes and scales a super successful business

right away right like like the the important thing is like, you learned the hustle, you learned how to go out, make it happen by your own two, two hands, two feet, your brain, right? You're, you're identifying value, creating arbitrage. You know, most, most guys just aren't willing to even go through that, right? They want to go and they want to scale the big thing. They want to, they want to just, you know, have employees. They want to have the big logo and the big signs and everything else before actually going and doing it. And I think what you're talking about is like, yeah, sure. It wasn't able to be able to scale without you, but you learned how to do it. And I think that's that's imperative for any of the listeners that are thinking about going to do they're doing something themselves, like learn how to create it yourself before you go and try to scale.

A hundred percent. And I'm going to tell you a story here in a little bit about how the hustler had to die, but I'll tell you how I got into garage doors is, um, I had lived in so many places in Arizona and my buddy's like, we got an open room, but I don't want anybody to move in there. I moved in on the weekend when they weren't even there. And the total rent for this place, it was a dump in Tempe was 700 bucks. He paid 300. Me and my other roommate paid 200. And my, my one roommate,

I painted the whole house. When I moved in, I redid the floors. I put gravel out front. I said this place, I spent two hours cleaning the bathtub. I just couldn't be around filth. And these guys were pretty gross, but, Sean started working for a garage door company and he was the manager. And he said, Tommy, we can't find a good painter, man. He goes, can you paint garage doors? And how much does it pay?

He's like a hundred bucks a door. You got to buy the paint. So I hired a painter to go paint the first three doors. And he taught me how to feather it on and how to do it. So I go to Home Depot, buy a Magnum 5 spray painter. And I buy Glidden Speed Coat. And I got to the point where I was taping these things off, painting them.

I could do 10 a day. And I called every company in Maricopa County, which is Phoenix. And I became the painter of choice for every garage door. And I would knock out 20 to 25 a week. So that was an extra two grand, bottom line. I drove the G20, zero, hardly any gas. And I got really good. Well, my other roommate started to work for him and he was making 90 grand a year. The first couple of months, he was just slinging. He was a good salesman.

And this is, mind you, this is 2006, the economy in Phoenix is blowing up. It's before we hit the great recession. So he said, Tommy, you got to come do a ride along with me for a week. He goes, you understand business. You understand P&L's marketing. And I really didn't. Looking back, I didn't know shit. But, you know, you fake it till you make it.

And I said, OK, so let's go run this, these jobs. And I just got excited. I was like, this is so much better than landscaping. And, you know, he would sell remote controllers for 150 bucks because people were just, they'd give money out. They were making a lot of money on their house. Their equity was up and, you know, Springs, we paid 20 bucks for, we'd sell them for 200 each rollers. We paid a buck for, we saw him for 20 each. The markup was insane. And this is the heyday. So we started a business formed an LLC. I got a yellow book ad.

We got a Naval pack. And when I worked hard, we made a lot of money. When I didn't take the phones, you know, this guy was smoking a pound of weed a month. Still one of my best friends. But 2010, I just, it was worse than a divorce because we were best friends, roommates, and partners. And I said, either I'm going to take on the debt or you're going to take on the debt. He was going through a lot of personal stuff. And he goes, you can keep the business.

So I got my mom and stepdad to move out from Michigan and help me. My dad and I went and bought all the used trucks. I came up with a horrible logo. A1 garage door specialist at the time we switched to A1 garage door service. And if it could go wrong, it did go wrong. People were stealing toilet paper. I mean, I didn't have a great CRM. I literally went through seven CRMs. I struggled. But anytime I went to work, I'd go run jobs. I was the number one salesman. We'd make a lot of money. So I was kind of trapped into the field. And I love marketing and sales. I love

motivation, marketing, and sales. But I mean, you talk about not knowing something in Murphy's Law. I was the epitome of it. In 2014, I had a mutual friend that retired. He basically got a buyout to get out of the airline industry. He was only making like 50 grand a year, but he took a year off. And he comes back and he goes, I heard you got a good garage door company. Oh yeah, we're doing pretty good. We're in Phoenix and Tucson at the time. And, uh, I was at 6 million. And at this point, at this point, you're just painting garage doors or what are you doing with garage doors?

No, it's a 2007. I started fixing them. I painted them for years into that. So while I started the garage door business, I was still painting them. 2010, I really slowed down the painting and just focused on the business. And 2014, I mean, by the way, I got a master's degree during this. So I was busy at school. I was still bartending. And I was the side hustle king, you know. And you name it, I figured out how to make money was the side hustle King, you know, and you name it,

I figured out how to make money on it, but I didn't focus. I was wearing a lot of hats and, uh, I said, put your eggs in a lot of baskets. And, uh, 2014, Adam came on board and he helped me with payroll HR. He helped me figure out the CRM. And we started really scaling. And 2017, I got on a ServiceTitan and I met Al Levy. Now, ServiceTitan is an interesting story because I fell in love with the software. And I called ServiceTitan and they said, OK, we'll get you on boarded. What's your email? And I told them it was tmalloweda1garage.com.

And they said, oh, dude, I'm sorry. You're a garage door company. We only do HVAC plumbing electrical. And you don't tell a guy like me, no. I mean, I'm very, very, I'm going to follow up and I'm going to drive them crazy. So I called back 10 times, talked to different reps. No, no, no, no, no.

So I finally went on LinkedIn, found the founder of ServiceTitan. In 2017, they were still big, worth billions of dollars. But Ara returned my message from LinkedIn and said, I'm sorry, bro. You could understand we're focused. And I got on the phone with him. I said, dude, if there's anybody in the world you better put your money on, it's me. I will not let you down. We are very similar to HVAC Plumbing Electrical. I said, send out 10 success managers. I don't want one. We're going to build a whole new industry. And when I do garage drawers, I'm going to get you your first of every other industry. And he's like, you're

hard to say no to. He's like, F it. I'm going to bet on you. He goes, we're doing it. And they sent out 10 people. Adam did his thing in the background we figured out the price book we built all these automations and you know the software was a little clingy chunky clunky back then but at this point at this point what kind of what kind of revenue you're doing at this point in your business in 2017 about About 15 million when I got onto Service Titan. Got it. And what I found was, what was great about it is I got to get call tracking numbers that had attribution instead of, you know, I always had call tracking numbers, but they were owned by the company. That's a big mistake. If ValPak owns it. One day I made a mistake and I gave everybody

my ValPak call tracking number for Money Mailer, Clipper, Savvy Shopper. All of a sudden there was a garage door company that they sold every single market. And the lady at ValPak called me that worked there, that was a friend of mine. She said, they're doing a case study on home service because of your company. And I realized I gave them ValPak's call tracking number. So they saw all these leads coming in on that call tracking number. But ServiceTite had some really cool features. I love the marketing.

I love the automatic payroll. And just one thing I learned with software is I have to really do what the software does. I had to change what we do to model it to the software. So many people want to change the software. Well, they took billion-dollar companies and built the best practices into ServiceTitan. That's why it's industry leader. So I got on ServiceTitan. And at the time, I just started the podcast, The Home Service Expert. And I had Al Levy on the podcast. And he happened to live in Scottsdale. And he said, hey, Tommy, would you like to meet up for lunch?

And I said, yeah, I'm working on a new book called the home service millionaire. I'd like to run it past you anyway. And this guy been through the ringer, made a lot of mistakes, figured out his life, learned how to run a business, helped a lot, a lot of businesses. And we sit down and I bring a notebook and I'm taking notes and he goes, how old are you? And at this time, I was like in my early thirties. And he goes, you're the first guy that's ever bought a notebook. He goes, I'm already impressed. And he goes, would you mind if I came and looked at your shop? Well, I handed him a book and he said, the book is crap. You need to rewrite it. So I got 12 coauthors and I rewrote the book,

but he came into my shop and he says, show me your manuals. And I've given him an old dusty one thing. And I and i go this is it we haven't really used it much and he goes okay because you mind if i walk through your shop and he goes why are there calendars on every wall have you guys never heard of google calendar he goes i'm old and this is kind of shitty and he goes i tripped on a wire in the back that you had a microwave plugged in from across the hallway everything's a mess in here back that you had a microwave plucked in from across the hallway. Everything's a mess in here. I could have stole all your inventory with your own forklift.

He goes, how are you even doing this? Are you making any money? And I said, we're doing a lot of revenue. We're not keeping a lot of it. And we were the biggest firefighters you've ever seen. I mean, I was getting reviews, video testimonials, meeting with HOA presidents. I knew how to bring in money, but I didn't have systems. I didn't have standard operating procedures. I didn't have checklists and manuals. So he worked with us. I paid him hundreds and hundreds and hundreds of thousands of dollars. And he sat with us every

day. We built every manual. We figured out the dress code. If your car broke down, what happens if this, this, this, this, this, this tattoo policies, you name it. We put regulations in the place of how you do a roller job, how to fix the springs correctly. We built standard operating procedures and we built out a training center. And Al Levy was the epitome. He taught me how to delegate. He taught me how to build checklists. And we went through all this for a couple of years. And I had a really really really bad people in the financial department so i didn't have a good cfo i didn't have a good bookkeeper it was always

horrible so we expanded expanded expanded but one day my buddy keegan came in from best home services massive hvac plumbing electrical company and uh he, can I look at your financials? And I showed him the financials. And this is like 2019, maybe 2018. And he looks at them and goes, he looks at me pale. And he starts circling stuff. And he goes, you got to close these four markets today. It was Dallas, Houston, Atlanta, and Tampa. He goes, you'd be close these four markets today. It was Dallas, Houston, Atlanta, and Tampa. He goes, you'd be making 20% bottom line.

He goes, you got shitty leadership. You need to close down today. And I go, I can't just close those. I could turn those around. And he goes, Tommy, look at them down. Close those markets today. You are bleeding unmercifully. So I closed those four markets.

I gave the guys five grand to move. Some of them moved. And we started making a lot of money. And slowly but surely, a few really great hires and getting the right CFO. I got a president of the company in about two years ago. I got a CTO. And we started printing money like crazy.

And when I met them, I was doing six or seven million of EBITDA. In December, we decided to do, I built a board. I did an equity incentive program. I got the right people on the bus and I really built a career that I enjoyed coming in on Mondays. I hired for my weaknesses and I hired people way smarter than me. And I'm always the dumbest guy in the room. By the way, I've toured probably 25 major shops in HVAC and plumbing because I noticed those guys were the ones with the private jets. So I learned service agreements. I learned financing. I learned how to really train service to sales.

And we started implementing these things. And, you know, we did one of the guys, Tom Hauer, came out. He said, I think you should really do a deal with private equity. He goes, because you're an untapped market and you could be the only aggregator out there. You're the platform. There's no other platforms. There's just other platforms. There's just really not. And he goes, with all the LOIs that you're getting signed, we signed up all these NDAs.

And then the LOIs started getting... And the bank, we had a BMO. It's called a delayed draw term loan where I could pull money out when I needed it. But this is when the market's tightening up. And he goes, you're going to run out of money, dude. $20 million is going to fly. And I said, dude, I just, I don't know. And he said, let's go watch the big short. And by the way, I lived in an apartment that I owned. It was a thousand square feet. And I have the technicians that would train there. They come out for a month and train. So I live in this small apartment. We go watch the big short. We start whiteboarding. And I decided, let's do it. So I called the president of the company. I said, I'm ready to make a deal, but I want to roll 60%. Like I want

to go big. And we ended up doing an amazing process, quality of earnings. We did our own internal audit by a big four. And we did all the right stuff, got the right lawyers. Dan knew exactly what he was doing, the president of this company. He hired the right CFO to come in and clean shit up fast. It took like six months. And we ended up getting a great deal. We ended up going with Cortec and they've been absolutely, you hear horror stories.

These guys were absolutely incredible to work with. And they came in. They told us how it was going to go. They said, Tommy's the boss. He's the CEO. Everything runs through him. I don't want to hear anything until Tommy looks at it. And they're very good at putting me in charge, but they hold me accountable.

And we started, they gave me this PowerPoint. They said, here's what you guys are going to report on every month. And it needs to be accurate. No bullshit. So we're going to need to get the right people on the bus to get these reports. Lo and behold, it took us 90 days. So this is March this year. And these guys are like wizards.

They started circling stuff, work on this, do this, do this, do this. We went from 17%. So we got the $27 million of EBITDA when we did the deal. Got a fantastic multiple. I can't go into details, but it was a record for pretty much the top of the home service industry. And I ended up rolling 47%. And these guys are like, they're wizards. They're just good at finance. And Kent Goodrich told me with Gettle, he said, when you learn what these guys know, he goes, you're 40 years old. He goes, you're going to be through this process the next time, 42, 43, 44 years old.

You are going to be like, you're going to be printing cash and you're going to be able to take care of everybody you want. So I gave away $100 million because I gave away 20% of the company in the equity incentive program. And there was about 25 millionaires that came out of it. And that made me feel really good because I was celebrating with everybody. These guys are partners for life. They'll do anything and I'll do anything for them. And I'm watching that these people are buying houses,

buying their dream cars, putting their kids in private school. So it was a great outcome. And now, I mean, I thought I was pretty smart at home service because of all my mistakes that I kind of healed from. But now I'm getting like this doctorate degree in like how they raise capital, how the LPs work, what exactly they report on. And I talked to Doug yesterday, kind of the head of the fund, him and Mike. And he goes, you're one of my favorite guys I've ever worked with.

You call me with great news. We tell you to do something. You don't hesitate. You implement the same minute we tell you. We've never seen anything effing like it. He's like, you just got balls like we've never seen before. And you go for it. And Tom Howard called me two days ago and said the same thing.

He's like, most people talk about doing stuff. The minute you hear it, you're implementing it. And to a fault. I mean, there's mistakes I make, too. But we get up quickly. We fall forward. We get back up. And, you know, we're going to run this thing to about $110 million of EBITDA

and probably do another deal in 2026 in January because they've got to hold three years because of the way the taxes work with PE. They've got to have a three-year hold period. And then I'll roll again. But, you know, I got to tell you, man, I never thought life could be this great. And it's not about the money. It's about the fun.

It's about I'm living each and every day to the fullest. I'm working out. I haven't drank in a couple months. I plan on drinking again in the future, but I'm getting my body right. And I'm just investing in myself. And I know that was a long-ass story, and I'm sorry. No, dude, this is great. I think one important thing that you brought up that some of the listeners haven't gotten the full details.

Both you and I have gone through a process, right? Like going and doing a deal with private equity. A lot of entrepreneurs, a lot of founders don't even know that processes exist or how to go about it. And so I think it's important that we actually dive into that detail a little bit. And it was interesting just hearing you talk about like, I mean, there was years of your business where you did good, right? Like you, it wasn't, it wasn't like home run, but it wasn't, but from the sound of it, it was like, once you realized I got to get processes in play, I got to invest in better management, build out my management team, bringing in the high level executives or whatnot. Like that's from the sound of is really where the, the business began to turn. You invested in software, those processes and everything. And so diving into how a process

works for the listeners a little bit. So typically the way that most people run a process, right? You don't just have these private equity people knocking at your door and saying, we want to buy your business. Sometimes you do, but that's typically not how it goes. So typically you go and you hire a banker and a banker gets you process ready in which they go and they write a whole book on your company. Typically it's 60 to 70 pages. They're going to, they're going to basically create like this big, long presentation sales pitch. It's going to talk about market penetration. It's going to talk about competitors. It's going to talk about market penetration. It's going to talk about competitors. It's going to talk about industry, what the trajectory is, what the future, what the trailing 12 is, what the future 12 is, and all these different things. And so once they put that

together, then as Tommy mentioned, you go and you hire an outside accounting firm in which they're going to do perform what's called a quality of earnings. And this is just a grade below like a full audit that they do with a publicly traded company. And so what this quality of earnings does is it puts together, okay, this outside accounting firm has verified that this is how much money they made. Their books are clean, everything else, right? And most businesses aren't in a position or even close to be ready for quality of earnings. And so if you're considering selling, if you're considering going through a process similar to what Tommy and myself have done is like, you've got to go and you got to get at least clean up your books, right? Clean up your books, clean up your processes, clean up your management team.

And then you're going to go through something like this in which you get the quality of earnings. Once all that's put together, then you do what is what's called going to market. The book is sent out to all the different private equity groups throughout the US, no matter, depending on how well your banker is connected or whatnot. Once you have that information out there, they're going to submit what's called an IOI in which they're saying, hey, we're interested in this range. They put that out. Then you choose a few of these companies. Hey, we want to do a management interview. They fly in, they meet with your management team. They poke holes in the business. They say, hey, is this a legit business? It sounds like Tommy freaking was a home run for it. And then at that point, this final group, they'll submit what what's called an LOI or a letter of intent in which they say, hey, we want to buy Tommy's business. garage services for X amount of dollars under these terms and so on and so forth.

Then at that point, you sign an LOI with a private equity group, and then you finish off with due diligence, depending on how fast the group is. And you can give us a little more detail, Tommy. Some companies are able to close in like a 30-day period. Standard is more 60 to 90 days. What did that process look like for you, Tommy? So Dan Miller used to work for the five hour energy founder and he's bought and sold pretty much not bought and sold, but work for and sold companies. His wife is a partner at Foley, which is a big law group. And I happen to have one of the top guys at Cowan that did home service deals on my board, which was our banker. So, I mean,

we had 25 lawyers on the phone every day. We've had auditors. It was nuts. Background checks, looking at everything I've ever touched. They're pulling up dirt. They're like, dude, it is just a white. I mean, they got that glove and they are searching the cavities dude it went up my ass yeah it was like and i lost some of my hair i was like not sleeping i mean it was exciting but nerve-wracking because a lot of people go through a process and don't get a deal done people retrade at the end they get what what the pe companies tend to do is over promise and. People retrade at the end. What the PE companies tend to do is over-promise, and then they retrade at the end, which means give you less

because you've gone through this long thing, and you're like, I just want to be done. And as big as we were, $27 million of EBITDA, which is a fancy word for profit with ad backs. And we got it done. And I'll tell you what, it was hard because money was dried up. And they were able to get 5x leverage on our EBITDA, which it's an unheard of industry. I mean, garage doors, HVAC, you could get 6x or 7x leverage.

What that means is they borrowed money to pay me and I rolled equity and then they took the funds money and put more in. And I pay the debt on that money right which is interesting it's a great concept and then what happens with PE is they take two percent a year to manage the people that they have working for them so you want to use the people within the company then they take 20 percent and that's that's what they take from the LPs now I'm a partner. So it works a little differently for me, but I mean, I wanted to roll 60%. They just weren't able to do that. Now they want to control. They would have still had control. Even if they bought 40%, they just said,

listen, this is it. And they were only going to give me 35 and I hustled my ass up to get 49.9. And then I gave 2.9 away to the management that I wanted to roll. And I had every single person that wanted to roll. Everybody wanted to roll a ton, but I was like, listen, guys, this is where we're at. And then they give us these, what's called P units. It's profit units. And usually a company will give 10 to 15% and you,

you kind of put those out sparingly to get people involved and keep what we call golden handcuffs. So they don't leave. And it's a great recruiting tool. It's a great retention tool. It really attracts talent. And you know, when I realized what these guys do, they set up a PowerPoint that's the same for every single one of their platforms. And so they're used to looking at the same charts and they, they could see the outliers very, very quickly. And to go from 17% to 23% and to build

the machine. Now what Dan did is built out the whole finance team beforehand. We got two VPs of corporate development. So we were hunting for businesses. We had LOIs and we got a lot of the LOIs included. Now some of them didn't end up working out because we didn't want to work backwards because we rolled so much that we were like, we'll go backwards if we do this still. Even though it was good for the short term, we would have got more money, but it wasn't good for the long term. And I know I'm talking French to some people out there, but my favorite word in the English dictionary, when I really learned what this means, arbitrage, I could buy a company for 3, 4, 5x and quadruple that when it comes under my platform.

But integrations are very difficult. Taking a different culture, a different insurance plan, different paper. Everybody pays different, different CRMs. People go, I hear it every day. I'm just going to do what you did in my industry. I'm like, well, how many markets are you in? You're in one and you own one percent of the market. You need to take market penetration in your market plus two or three other markets. Plus, you need to do some acquisitions to even be considered close to a platform. And we had to build out all these training and recruiters and applicant tracking systems, learning management systems. And I say we're a technology company that does garage doors because, you know, it's crazy the stuff we're building and

110 million dollars is not an easy feat but i've never been more inspired and passionate about the company we will hit that and we hired a company out of chicago to help us source deals and they're giving us one to two a day and we just started with them and i'll tell you what you know a, I always talk about billionaires because billionaires work differently. Millionaires get up early. They got great habits. They they're very, very disciplined. They they work out. They go cold plunge.

They'll they'll they'll set KPIs and the budget correctly. But billionaires are a little bit different. When I started meeting billionaires, their network is so incredible and they delegate better than anybody. They don't outwork you, they outdelegate you. They know the right person to call. They know how to attract talent.

They know how to set the culture. And they're more connected than anybody. You get with a great billionaire, they're just making a phone call and getting shit they're not sitting there driving kpis they're sitting there hiring the right people and i learned that your network is your net worth you are who you hang out with if you don't get inspired by your circle you have a cage and so i started really changing the group i hang out with and some people talk about football some people talk about golf some people talk about football. Some people talk about golf. Some people talk about their kids and their marriage. I talk about business. That's what I'm passionate

about. I mean, literally like that's where I just can't stop talking about it. And I love, it's crazy. I love your, I love your point about millionaires and billionaires. In fact, I heard it put this way. Millionaires when faced with a problem, they say, how do I fix this? And a billionaire, when faced with a problem, they say, who do I know that knows how to fix this? Right? And so to your exact point, they know they delegate better than anybody. It's really about who you know, how you can get things done at the highest level possible. 100%. And what we pay people now is what I've learned working with PE is they're very, very good at attracting talent.

They're very, very good at recruiting talent. And they get somebody that has gone where we want to go. And they use the P units to attract them with a really good seller with a really good bonus. And these units are ours to give. And you're one higher away from gold. You're three feet from gold. Focus on one thing. And that's when I said the hustler had to die because I used to think put my eggs in a lot of baskets. And my buddy told me when I was writing my book, he said, what if you put all your eggs in one basket? Imagine how big it would get filled up. Imagine how fast. And I really started slowing down.

I started focusing. I started, as an entrepreneur, we're all faced with a little bit of ADHD, which I think is not a disorder. It's actually a skill because you can multitask. But I got to be entertained. And I got to do what I love. And 2X is better than 10X. It's a great book by Dan Sullivan. But I focus on what I'm really good at and I'm a networker and I try to be the dumbest guy in the room. And what I noticed was the more people I help, the better I got at coaching, the better I got within my company. Just like when I go work out and I got somebody else, I'll work out 10 times harder. And so I had to become an expert

at what I do. And so we started Garage Door Freedom. We got 60 companies in there. We'll probably have a couple hundred in the next year. And we got them on performance pay, how to get your brand. We work with Kick Charge to get the branding right, the best branding company in the world. We use Al Levy's manuals. We get them on rapid hire to recruit the right people. And I've got companies that went from 500,000 to 3.5 million in 18 months working with us. I got companies that went like the guy turned down performance pay in March. He went from 20,000 to 110,000 bottom line per month. And it's so much fun. So we decided to start the Freedom event. It's coming up in November. And I'm like, I want every industry to come because I get at least 25 visitors a month to come through,

walk our training center. And the moral of the story is if I could do it, anybody could do it. Because I'll tell you what, I'm not the smartest guy. I got a high IQ. I mean, I've taken advanced calculus. I took all the classes for pre-dental. And then I ended up taking the GMAT. But I'm definitely, I'm not the smartest guy. And my point is, if you meet the right people, you put the right systems in place, you got an accurate CRM with KPIs, you got systems in place. You got an accurate CRM with KPIs. You got systems in place. I did it in an industry that has never been done before with my team. And my team is my everything. You know, Andrew Carnegie

said, take away my steel mill, take away all my money, take away everything I own. Leave me with my core team. I'll have it all back in three years. I truly believe that. And I live by that creed. And so freedom's about getting people ready to build a company that's worth a lot of money because I understand accrual accounting versus cash accounting. I understand how to build a business now. And so many people have a great thing. They just don't know what to cut, where to spend their time, what they should be doing each day. They don't understand where they're bleeding. So I built these simple KPIs. If I know what you want to make this year, and I divide that by your average ticket, then I divide that by your conversion rate and then your booking rate. And then I multiply that by how much

you pay per acquisition. There's your marketing budget. And when I increase these numbers, your marketing budget goes down significantly. So first thing I do is get you on a CRM and get your data accurate. The next thing I do is get you on a CRM and get your data accurate. The next thing I do is I fix the biggest hole in the boat. And I'm telling you, I could fix any effing company in the world with that basic. There's a lot that goes in between. I renegotiate with the vendors. I put together really good oversight. I have more powerful meetings. But I decided I wanted to share this with everybody. And so what's your definition of freedom? And my definition of freedom is to do what I want,

when I want, with who I want, and really be able to take people with me. I don't have to take them with me. It's not my responsibility, but if you could, you should. And, you know, I'm just living my best life and I'm starting to take care of myself and respect myself a lot more. When I look in the mirror, I'm starting to smile and see that I'm doing good out there and everybody around me starting to really, they kind of follow the leader and home service sometimes we're the parents. And I noticed when my desk is clean, when I'm focused on reading and I'm podcasting and I'm growing myself, everybody is.

So I got to show up and during covid you know i had to line out my door and everybody i go what the hell's going on and the first guy walked in and said my wife and i have done really well can you cut my pay in half and i say we don't need to do this before we knew about PPP money. And then the next person walked in and said, I want to volunteer all my sick time. And I mean, this happened over and over and over. And I said, I got to become a better person. You know, I read this book, the compound effect by Darren Hardy,

and he wrote down a hundred things he wanted in the perfect woman. And he read this list out loud and said, there's no way I could get a woman like this. I need to become a better man. So he wrote down a hundred things he needed to become. So I took that kind of, after they all walked out, I wrote down who I would need to become to be worthy of such an amazing group of people to sacrifice their own families for the good of the company. So I wrote down a list. I didn't get to a hundred. I got to like 26 or something. And I just really started to really care more about people and really getting the right people in an elevate mindset. And that, you know, I'm not endorsing my book, but I wrote a book about the client's got to win. The employee's got to win. I got to win. The vetter's got to win

and our partnerships need to win and business. Everybody gets to win. If you find out their three and five-year goals, I sit down with everybody and find out how I can help them accomplish what their dreams, their goals, their budget, their KPIs, how they get their bonuses. And then I reverse engineer it, and we both win. And my competitors, I invite into this building. I do two shop tours.

If anybody wants to come see our shop, I do two shop tours a month. You can ask me any questions. I'll give you any resources. I open it up. On my podcast, I talk about everything we do. If I want to get the best CHRO in the country, I get them on the podcast. It's a pretty good podcast. It's not quite as big as yours.

And so the podcast has become like a religion for me. It's like my meditation time. But I really started thinking about taking care of the people. And I'm proud to say that a lot of technicians have equity in the company. Now they got profit units. And there's very few people that don't make six figures in this company. And people always ask, how do you price so much more than everybody else? And we had 40 garage door companies. and I asked them how much they charged. And I said, do you guys charge 10 grand for this?

And they said, how do you sleep at night, bro? And I said, how many of you guys have a 401k? How many of you guys have insurance? How many of you guys are paying for Aflac? How many of you guys, two months of training? How many of you guys have billboards and drive brand new vehicles and have the best CRM and do a Roth IRA on top of that. And how many, I said, I got to ask you guys, none of you guys do all these things.

How do you sleep at night knowing you're screwing your employees over and then sake of giving the customer a good deal? I'm like, I don't worry about my employees leaving. They're not going anywhere. I'm like, you guys, the minute you leave work for a week, your company fails. And you say I charge too much because I built an infrastructure out. We pay people really, really great. And we show up the same day with background check, drug tested people that care about treating people, everybody like they would treat their own mother. You know, here's what you need to do. Here's what you should do.

Here's what I would do for my mom. Dude, I love that. I love this topic. I love this topic because like you, my companies have always been the highest priced in the industry because exactly, exactly that. I always tell the way that we've always trained our salespeople is if they're like, Hey, why are you $10,000 more than your competitor? And we, and the way that we say is like, well, why is it important that you're more profitable? What corners would you, we're willing to drop the price, but what corners would you like us to cut? Right? Like, do you want

us to cut X, Y, or Z? Cause, cause the reality is there, there's no morality in pricing, right? Like, like pricing has nothing to do with morals. In fact, it has everything to do with them. If you don't, if you're not charging enough, you're, you're immoral. Like, like you're talking about, cause you have to take care of that customer first, which is your employee, which is eventually going to take care of your people. And if you can't stay in business long-term and have incredible employees, then ultimately you're screwing your customer. That's the ultimate screw job, right? Like is not being able to provide an incredible service to your people.

Yeah. Well, the thing is most of these companies that don't like my pricing, they're small. They don't make a lot of money. They make a living. They got a technician mindset. They dream too small. And you know, in the Bible bible it does not say the root of all evil is money it says the love of money is the root of all evil there's a great book called acres of diamonds um and what it says is sometimes it's right in front of our nose and you've got a moral responsibility to make a profit as a company absolutely and i don't have any problem i think the united states of america is the best country in the world i believe in

jesus christ i don't mind saying that i don't use my platform as a home service guy to preach to people, but I believe in Jesus. And I'm not afraid to say that single person has a Thanksgiving dinner and Christmas presents for their kids. I look at my own backyard with 800 employees before I could go out. I don't care about the publicity. A lot of people just try to get on the news because they gave away something. I'm more interested in helping out the people that have helped me, my family, which are the people I get to work with. They're my coworkers. And that's what I care about. So awesome. So awesome. So Tommy, you've, you've had a ton of success, right? Like you built this incredible business, you sold it off for, you know, multiple nine figures. Uh, you're scaling it up. You rolled a lot forward. You're going to do all these things at what point though, throughout the

history of your business, like tell us about a time that you almost gave up and what happened during that time and how you pushed through. Yeah, you know, there's a couple big things that have happened. One of the biggest things was when my mom was answering phone calls, my stepdad was trying to maintain the chaos. The guys weren't really trained. We were hiring guys that were high on the job. A lot of theft going on. I walk into the shop on a Monday.

The cops are there. There's two people smoking cigarettes outside. People were stealing toilet paper. This is not through COVID, by the way. Tools are getting lost. It's just accidents. And I was like, is this worth it? Like, but I,

I had my mom depending on me and, and you know, my mom, I love my mom. My mom's the most important woman in the world to me. And, and there were days that, especially that day and that week that I was like, is this, is this always going to be like this? I mean, I had to walk out of the theater. I burned through relationships. I'd work on Saturdays, Sundays, nights, weekends, holidays, you name it. And I was just, I was burnt out, man. I was like, I got, I got to do something. And I, sometimes you got to hit rock bottom to know really to, to make a change. And I had to reevaluate why I was doing this.

And my mom was a big person in my life. And I just said, I'm not going to go through this shit like this. And, you know, at this point I finished up my, my master's degree and I, I was always out there learning, but I became an avid reader. I read the E-Myth and and then I read The Ultimate Sales Machine, then I read The Richest Man of Babylon. I just started reading. And then the podcast happened a few years later, and I just –

I've been at the right place at the right time. I consider myself really, really blessed. I mean, people always say to me, man, you did it. You're just 40 years old. I'm going to get in the garage door industry. I said, dude, you did it. You're just 40 years old. I'm going to get in the garage industry. I said, you want to know how it was. I was writing checks to make payroll every other week. I was mortgaging everything I had. Like, you know why business owners do well, because the chance of doing well are slim to none. When they do well, you should do well. You sacrificed

a lot. Number one, number two. Absolutely. What I can tell you is that it was really, really, really tough. And when you hit rock bottom, man, and some people go through divorce, some people never talk to their family again because of the relationship of business. Luckily I ended up making most of my relationships with my family. Okay. And it was tough. And I'll tell you what, I do it all again. I mean at 40, no, but now I know a lot. I've made all the mistakes. And I used to get annoyed when my dad said,

if I knew at your age, what I know now. And I said, so tell me, but you don't know until you make the mistakes. And, uh, I learned the hard knocks and, and success does not come easy. It's tenacity. It's focusing on the one thing it's it's there's a good book called essentialism. And, and, um, you know, now I'm still very, very humble. And I, I to tell you, you know, I made a deal with God when my dad was in the hospital. He was this close. He was in the ICU. And I fell down on my knees. His oxygen fell below 60.

And I was at the apartment and I was driving to the hospital. And I made a deal that if he made it, that I was going to be, you know, way more closer with, with Jesus. So anyway, he pulled out, he's golfing, he pulled through and, um, and I'm just thankful. I still get time with my family, my parents, not married yet. I don't have any kids. You know, I've got a great girlfriend, Bree, and I'm living my best life. And I know a lot of people say that, and you look at the inside, and they're going through so much pain. I don't have any pain.

Right now, I'm really, really enjoying living each and every day. I'm thankful for each breath. I got my health. I've been working out. I'm on four peptides. I'm doing all these things. And I'm really, I want to pay it forward. I try to help as many people as I possibly can.

There's a quote here by Zig Ziglar. You could have everything in life you want if you just help enough people get what they want. And that's my creed. And I'm an open book. And I'm really happy we got introduced because I just like hanging out with people that that have the same mindset and I don't blame anybody I look in the mirror and when I tell myself I'm going to do something I keep my word to myself I don't lie to myself I don't say you're going to start working out next week and then not do it I'm disciplined and I have delayed gratification I lived in an apartment I drove a salvage title Nissan Titan for till two years ago from 2012.

I mean, it was a used truck. And I said, I'm not going to buy a new truck till everyone in this company has a new vehicle to show up to the client's house. And delayed gratification, gratification, discipline, consistency is built what I have today. And I'm just in the fetal stages. I'm just getting started. I mean, I think I, I really look at myself in a good light and I think I could really do some damage in this world with what I have now and the resources I have available. I love that. And I'm like, listen, just because I win doesn't mean you got to lose, but I'm coming for everything they said I couldn't have. Let go so man tommy if you go back to your 21 year old self like what's some advice knowing you know a ton right over the last

19 years is there anything that you would have done different or or maybe some advice that you would give to that person 100 so i talked to 21 year old to Tommy. I'd warned him about a bunch of stuff, a couple of girls. But what I would tell him would be, first and foremost, even though I've taken a lot of accounting and financial classes, probably not at that point, but I would have said get the right person as a CFO. And if you don't have the money today, invest in a fractional CFO and pay up, pay a hundred grand a year for a 10th of his time, because he'll build the systems or she'll build the systems. And you'll know when to grow and when to pull the brakes. You'll know how to renegotiate with vendors. You'll understand the Augusta tax rule and accelerated depreciation and a cost segregation study. And you'll understand tax. And you'll actually build systems for billpay.com or your Divi card and learn where the gas money is going and checks and balances.

Because that was a thing I missed. And then I would have said, Tommy, be very careful what you name the company because A1 happens to be what everybody calls that wants to be first in the phone book. And I would have said, invest in your brand, invest 50 grand, come up with the right jingle and come up with a great logo and the right brand because branding is what attracts great employees and great customers. And if you're going to be the most premium, best value, most expensive in your market, you need to look like

a premium brand. And that means new vehicles. And that means perfect wraps that don't have the BBB and Yelp and everything you do on the side of it. We do solar, we install battery packs. Look, you just need to say what your company is and that's it. And people can't read more than three or four words when they're driving by. So make sure it's easy and invest in the best CRM you can get your money on, your hands on, even if it's the most expensive, because that's what runs the company. And continue to hang out with the winners you want to be around. Because every time I travel to a successful HVAC company, they'd open up their doors, they'd give me everything and I'd

implement. And if I did that at a younger age, I mean, I'm happy where I'm at, but I probably could have done this 10 years quicker if I would have just been more open to constructive criticism and been around the right people asking the right questions. So that's the biggest lessons I think I would tell my younger self. Maybe cool it on the liquor through your 20s. But everything happened for a reason and, uh, it all worked out. Dude. I think, I think that's such incredible advice because I mean, that's very applicable to any young entrepreneur that's just getting started. Right. Uh, you know, the advice about a CFO, that's, that's actually advice that Alex or Mosey gave to me, uh, three years ago,

we didn't have a CFO at our business. We had a controller, we didn't have a CFO. And we were looking at, hey, potentially we want to sell in the next couple of years. He gave me that same exact advice. He's like, dude, go spend as much money as possible on a headhunter, get an incredible CFO. I mean, dude, all these things that you've shared today as far as investing in processes, investing in brand,

investing in marketing sales, you know, like, like these are, these are the ingredients that for an incredible recipe to be able to go and build a business that can be sold. You know, too many, too many entrepreneurs today are just building a hustle. They're just building something that's around themselves. It makes some money. It does these different things, but it's nothing that is attractive to an outside firm to come in and buy. And so if you're wanting to go

and you're wanting to scale similar to Tommy or myself, like get these things in place, invest in your management team, invest in your brand, invest in your processes. Like that's such incredible advice. Tommy, thank you so much for your word of wisdom today. I know your time is very valuable. Where's the best place for people to follow you and to be able to get some more incredible nuggets like this. Thank you for asking that. And I had a blast. I got a quote for you in a minute that I want to read, but I got a couple of books, Home Service Manager and Elevate. Put a lot of time into those. The Home Service Expert Facebook group is a great source. And then the Freedom Event, freedomevent.com is where I'm is a lot of people don't take action. If you really want to reach out, you want to see what we're doing.

I don't, there's no holds bar. I give away everything because the day anybody learns what I'm doing now, we're changing every day. And I think we're stronger together. I think the home service blue collar industry, we need to, we need to help each other, not attack each other. You go on these Facebook forums and everybody's talking smack and they got this tiny little mindset and they think they're right.

And I think they're going to change somebody's mind by arguing. And I just open up the doors and say, come look, you know, we have nothing to hide. We take care. I got my face on the side of the truck. It's a cartoon Tommy, you know, caricature or whatever. But, uh, this quote is something I live by and it's sitting on a wall out there on a canvas, but the master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his information and his recreation, his love and his religion. He hardly knows which is which. He simply pursues his vision

of excellence at whatever he does, leaving others to decide whether he is working or playing. To him, he is always doing both. And I live by that, man. You don't know if I'm working. You don't know if I'm having fun. I mix business and pleasure. And me and you are going to become good buddies. And I love what you're doing. You're out there to help.

You're out there to help the guy out there, the woman out there that's struggling. And my main goal is that everybody gets to spend more time with their family and get what their definition of freedom is. And I think the blue car industry is here. It's here to stay. We're essential. And I'll tell you this, programmers and all these other things, more people are going to get into this industry. And this is the calm before the storm. 2,200 baby boomers are retiring each day, 12% of them own businesses. This is going to be a massive wealth exchange. And I'm going to be there for it. And it's not about the

money, but it's about what we do and our moral compass. And if you're running the right way and you're taking care of people and you don't got to look behind your back and you're not, you know, some of the people out there that I've done business with are just cut throat only about the money. And there's so much more to life than that. So I appreciate this, man. I really do. And I'm going to have you on my podcast and you're absolutely phenomenal

for doing what you're doing out there. Appreciate it. Thank you so much, Tommy. Until next time.