The Home Service Expert Podcast - Building a Successful Business Without Working 24/7

Episode Date: October 25, 2018

Christian Devlin was the founder and owner of Devlin Plumbing Services based in South Carolina. He successfully grew his plumbing business from $180K in 2015 to over $1.5M in less than 3 years, and built its reputation as one of the best, most professional, and highest reviewed expert plumbing companies in Myrtle Beach. He is also the host of the podcast Ethical Contractors Alliance. In this episode, we talked about customer service, marketing, leadership...

This is the Home Service Expert podcast with Tommy Mello. Let's talk about bringing in some more money for your home service business. Welcome to the Home Service Expert, where each week, Tommy chats with world-class entrepreneurs and experts in various fields, like marketing, sales, hiring, and leadership, to find out what's really behind their success in business. Now, your host, the home service millionaire, Tommy Mello. Hey there, folks. Welcome back to the Home Service Expert. Tommy Mello here, and today

we've got Christian Devlin here. He's a plumber out of Myrtle Beach, South Carolina. Christian, how's your day going? It's going great. How's the weather? It couldn't be better. It was about 72 degrees, sunny, and it's not raining today. Nice. I'm flying out to North Carolina tomorrow, actually, so looking forward to getting out of the heat.

Yeah, yeah, I don't blame you. So you've been a plumber now a couple of decades, and you grew your plumbing company to about $1.5 million over the last couple of years. Tell me a little bit about where you started. You went through the recession, and what you're up to today. Okay, well, I officially started in business in 2005. About 2010, I was doing new construction. Got hit hard by the recession. Watched a bunch of trucks go back to the bank.

Didn't make any money. Wound up broke. Had to start back over. And I had to bootstrap a business. I still had a family to take care of. And started off in my pickup truck, the only one that I was allowed to keep. And, you know, really learned how to be very strategic in my spending. And I learned how to really take a lot of the market share in my area without having to,

you know, overspend and just be very intentional about how I presented myself to the community and to my city. And it really paid off. It really did. And then I started hiring in 2013 when things just started getting overwhelming and realized I couldn't do it all by myself, even though that was my plan. Things were just going so good. I had to start bringing on some help. Okay. So tell me a little bit about that. So, you know, that's a big step for a lot of people is to start doing a few hires. So how did that go? Well, I was nervous. You know, everybody, you know, the most common complaint among day salons is nobody's going to do it as good as me.

But, you know, I was kind of in a new area for myself, and that was service plumbing. And I had never had the privilege of working for a service plumber before because I learned plumbing in new construction so when I decided to hire the one thing I was looking at in the resumes and I made it a habit ever since was was did they work for a company that was kind of where I wanted to be looked like I wanted to look and had customers that I was going after so my first guy that I hired, his name was John. And, you know, I saw that he worked for a large plumbing outfit in Washington, D.C. That was everything that I wanted to be. So I knew he would have things that he could teach me. And, you know, all the great gurus in the world say to surround yourself with people smarter than

you. And that's what I started doing. John was over 50. I'm 40 years old. He's over 50. He taught me a lot. It worked out well. I started making that a model for when I hired guys. I asked myself, how much am I going to have to teach this guy about the way that we do things?

I'd always look deep in their resume and look for a company that charged flat rate pricing, had some structure to it, uniforms, wore the booties in the house. You know, I looked for somebody that would have had the customer service training already so I didn't have to start from square one with a guy. Yeah, that makes a lot of sense. When I started my garage door company, I was really just trying to find somebody that did it better than me. I wanted to find someone that knew a little bit more about the different types of systems, how to sell doors. And it's funny now that I've got 100 technicians, I don't want anybody that's ever been in the industry. I want to take someone that's young, willing and able and teach them my way and say, this is the way we do it. Because, you know, I had a guy walk out of training, not walk out, but he got done with training and his his criticism was, you know, you've got amazing trainers, but each one

of them had their own way of doing things. So I got 10 different ways to put springs up now. And that's when I knew I had to have my own systems and my own way of teaching people. So I think when you're a smaller company to have to try to teach somebody from scratch, you're talking about months, if not years. And you don't have that kind of time, right? Yeah, especially with plumbing, because, you know, plumbing is not one system. It's drains, it's water supply, it's water heaters, it's garbage disposals, it's toilets, it's showers. Although it's all lumped under the category of plumbing, it's not all one thing, and it just takes a long time.

And then you have all the different brands. You have all the different kinds of pipe. You have all the different types of layouts for houses, and it takes a while. I wish you could have an online course and teach plumbing, but really beyond, you know, faucet repair and faucet installation and toilet installation and maybe putting in a water heater. It takes a while to really learn plumbing. Yeah, I know. There's a lot of things about plumbing. Plumbing's harder. HVAC's probably harder than garage doors. I mean, plumbing, I think the average plumber is about 47 years old, I heard. And it's something that there's not a lot of young people jumping into that because it takes five to 10 years to become like a journeyman and all that stuff.

And certain states require plumbers to have their individual licensing. So I think it's a lot harder to get into for sure. Yeah, there's a high barrier to entry. And like I said, being that's the diversity in the products that you're working on, it's a tough business. It's a very brutal business, and it's not for the faint of heart, thick skin. And you just have to be very dedicated to making it work. And you can be successful because of that high barrier to entry because the competition is going to bow out after a couple years. So you're 2013. You're making some good hires.

Tell me a little bit about taking market share. Because you told me, you know, I went into the market and I was able to grab market share. And you said you didn't have to spend a fortune in marketing. How did that look like? Well, what we started doing was, you know, I looked at my competition. I saw that they had a lot of stuff on autopilot and people calling them and they just, they kind of, you know, just like the taxi cab drivers assume that they were safe and sound and then Uber jumps on the scene and kicks their butt with technology. We kind of did the same thing with online reviews and

SEO. So I read books on SEO. I stayed up late, worked really hard at getting that right. And I learned Adobe Illustrator. I looked at other websites and I reverse engineered them. I'd see what was working and I'd see who would rank in certain cities for plumbing in huge markets. And I would then Google that domain name and I would look at all the links that they had where they were listed. And I would go to those same directories. I would look at all the links that they had where they were listed and I would go to those same directories. I would put my name in there. So we started rising to page one on Google. But what I learned in learning marketing, that's not enough. You can get people to come to your page, but your page has to give people a thousand reasons to choose you over the competition

because they got a choice to make and they're looking for the plumber or the company that they're going to hire is going to be the least amount of risk for them. So I made sure that they knew everything that they knew could know about me and reasons why I was the better choice over the competition. So it's not enough to just make your phone ring. It's not enough to just get people to your website.

At that point, you've done your job, but you've got to convert them too. And that's part of what I learned too too so we started kicking butt against the competition because they were they were relying on the phone book in the old ways and i moved in like a you know like a ninja and and started winning the web yeah that's huge so i got involved pretty heavily myself around 2010 to 12 in seo and uh what i think what you're talking about is in the Google ranking of the local, it used to be the seven pack. Now it's a three pack and they go after citation sites. So Yelp, Kudzu, Merchant Circle, Angie's List, YP.com. There's right now I've got about 500

generic ones and then I've got ones that are specific to niches. And there's tools out there that you could find what your competition are listed in. And the most important thing about those, Christian, is you got to make sure every single one of them is the same. So if you put street on one, the next one can't say ST if the other one says S-T-R-E-E-T. The phone number's got to be exactly the same. The website's got to be exactly the same. And when you get them universal across the board and you've got more than anybody, that really helps you rank. Is that something that you used to find as well? Yeah. Yeah. You know, all the information's out there. If you'll hustle and do your homework and put in the extra hours, I mean, I've worked 10, 12 hours out in the field and then

I'd come home and I'd put my laptop, you know, sit in my recliner and get to work. And that's what I did. Yeah, and you're right, the NAP is what they call it, the name, address, and phone number's got to be consistent across the web. And what I did was I kind of learned how Google thought and what they were looking for, because they're a matchmaker. And, you know, if you give them any red flags to make you think that you're not a legitimate company, you know, they're not coming out on your site to see if you're the real deal. They have their own algorithm that crawls the web and wants to see whether or not you're a legitimate company. And it doesn't do that by visiting there.

It does it by looking for those consistent things in their algorithm, like you just mentioned. Yep, it's a mathematical equation. And then what you have with the BBB, and you've used ReviewBuzz and Yelp and Kudzu and all these places is it's called user-generated content and those are customer reviews and you absolutely kill it in the reviews. Talk me through the approach you take on getting the reviews from customers and how that built your reputation. Okay, well the main thing I learned with reviews is nobody wants to review the corporation. They don't want to review your company necessarily.

I'm not saying they won't, but they're more apt to review your guy. So if you can have a reward system, if you can gamify it within your company where the guys are getting the reviews and their name is mentioned, because you'll see the majority of our 500-some-odd reviews on the web mention the technician and what a good job he did. So and one thing is, you know, if you want performance, you got to give applause. So we have we'll have company meetings where we're recognizing the guys got reviews. You know, you can't just ask people to do stuff without giving them a pat on the back. And so we made sure it's part of our culture that we get reviews, that we're the five-star plumber in the area, and we're better than everybody else.

And my guys would do that. And I owe it all to them. I mean, I barely have any reviews. It's all about them. But it comes down to the customer experience, too. So every single touchpoint that you have with the customer from them seeing your truck on the road to your ad, to how easy your website is to use, whether or not there's an online form to fill out for scheduling, if there's chat, to how the phone is answered,

whether or not their questions are answered, if they're treated nicely, if they're treated rudely, all those are touch points to the guy where he parks in the street. You know, Ms. Jones doesn't care if you use a brass shanked fill valve on the toilet. What she cares about is whether or not you stepped on her petunias. You know, guys got it all wrong as to the things that they care about. They think that Ms. Jones cares about, and it's just not the case. And if you can learn to really master those touch points, the contact points with the customer, and you can make every one of them a good experience for them, you're going to get the review and you're going to get the referrals. So tell me a little bit about this is a big misconception that I guarantee you 90% of

the people listening believe. How much does price have to do with the review? We have, as of today, we have no derogatory reviews whatsoever, period. And none of them are about price. I mean, we got a lot of reviews. I'm not aware of a single one. Price is an issue if that's all you leave the customer to judge you by. And, you know, they're automatically going to default to price if you make yourself a commodity.

And what I mean by that is if they feel like they could have got that experience from anybody, it's going to come down to price. But if they like you at the end of the deal and they paid a little bit more, they're not going to care about the price as much. They feel like they got the value. You're out there right away to carry the issue. And you exceeded their expectations. And that's another thing is people aren't going to talk about your reviews if you just meet their expectations. If you exceed their expectations, you're going to get the review and you're going to get them talking about you. I agree. I think that you need to create raving fans out of your customers and you're going to get them talking about you. I agree. I think that you need to create

raving fans out of your customers and you need to go above and beyond and deliver a service and explain customers. There was a double blind study in the garage door industry that they did about, I think it was 5,000 customers. And they found that price was the number nine thing that people cared about. Cleaning up, drug tests, showing up in your home with your family, cleaning up, warranty, all these things came ahead of it to real customers. Now, I would say there's a small percentage of customers that really look at price, but I can tell you that a lot of people don't use Craigslist because they say, I don't want it done by some hack that's not licensed. One day I had a consultant come in. This was a couple of years

ago. He goes, Tommy, he goes, who's the most expensive air conditioning company in the whole valley of Arizona or whatever? And I told him the name and I'm not going to do it right now. And I said, maybe this one or this one. And he goes, now, who do you think's the biggest? And I said, for sure, the same two companies. And he goes, now, who do you think's the biggest? And I said, for sure, the same two companies. And he goes, do you think they're ripping customers off? And I said, no, I know these companies. They run like clockwork, but they charge a real price. They have a real office. They run real warranty calls. They run at night. You know, they deliver, they wear the booties. They make sure they drive wrapped trucks and they're always clean. And they're always,

they give the best insurance. They have the happiest employees. And it was a real eye opener for me because so many people say, oh, those companies are rip offs and they don't run a business. I mean, I guess the question I always ask an owner is if you left town for a month, would your company still run good or are you the business? Did you just buy yourself a job? I mean mean what is your thoughts on that aspect of it well yeah that's the that's the goal so ever since i started back out and you know i i'm a i'm a i consume content like a sponge and and i'm always listening to audiobooks and podcasts and my my goal is, I mean, I'd much rather have a business that runs itself than to have one that I have to run 24 seven and make double the money. You know, for me, you know, the fact that I can have an asset that actually produces revenue for me while

I'm on vacation is far more valuable than just being able to pocket all the money, you know, by being a one man shop. There's, by being a one-man shop. There's advantages to being a one-man shop, but the disadvantages to it far outweigh the advantages to having other people be able to do it for you. So I'm 100% in agreement with you on that, Tom. So there's a ratio that I want you to think about. I want you to think about every person that makes you money, and that means they're collecting a paycheck from the customer after they're turning a wrench. So if you've got a

salesman out there selling new construction plumbing, he's not, even though he is selling the job, he's not the guy that collects the check after all the underground pipes are in and everything else. So if you take your call center rep, your dispatchers, your management, your warehouse guys, and I mean, I know you're not a massive company, but one thing I want people out there to listen to is the ratio. So typically you want to have more earners out there than non-earners. And the perfect ratio is two to one or better, meaning there's two people that are grabbing a paycheck or a customer check or a visa or cash from the customer. And when you get off of those numbers, it becomes harder to do business. And I'm building a big infrastructure

right now, so my ratios are not where I want them to be. It's a one to 1.7 right now. But when you think about that, when you're doing the business and I used to do all the door sales, I used to install them, I used to answer phones. When my ratio was better than two to one earners versus non-earners, I mean, it was hard not to make money. I mean, it's really hard not to make money because literally everybody's kind of you eat what you kill type thing, right? I mean, it's a lot easier to pay people when they're out there earning money. So I would just advise some of the listeners out there to really look at their ratios, especially as you start getting bigger because you start creating roles for people that you really don't need. And I've had this happen in my company where I've made up a new role.

And I said, well, they'll be the customer dispute management director or some shit. And you just get these wacky numbers and you can lose money really quick. And I've done it and I just want people to realize that there are those ratios out there to keep an eye on. And, you know, you

grew pretty fast and you said recently, you know, as we were talking that you decided to take a buyout. Tell me a little bit about that, or is that something you could talk about right now? Yeah, yeah. Well, I closed down the business. I sold my business on May 1st. I put it up for sale, and I put a price on it that was worth me walking away from it

because the reason I did it is not that I didn't like being in business. I enjoyed it, but I'm a creative. I really like starting things. I like building a brand. I like building a reputation. And, you know, after we get things going and we're, you know, we got money rolling in every day, you know, I'm not necessarily 100% motivated by money.

I really was just not being able to see this getting much funner for me and what excites me. So, like I said, I put it up for sale. A large national company bought me for the price that I was asking for. They promised me a clean break. They promised that they would honor my warranties. That was very important to me that I wasn't going to sell if they weren't going to honor my warranties because I give great warranties. And they agreed to all those things, and it happened very fast.

And a lot of the local competitors asked me why I didn't offer them the business, and the reason I didn't offer them is because I knew that they would have just taken my customer database and my technicians and rolled into their company, and they would have forgot about the brand that I built. And for me being a creative, like I said, I built what I feel like is a great brand in the area that can be a household name for years to come. And I want to be able to see that grow under the new management. I'm really excited to see what they're going to do. So tell me a little bit about your mindset, because I think there's a lot of

people out there that have considered selling their business and they don't even know. First of all, blood, sweat and tears, unfortunately, do not sell. No, they don't. And a lot of people are like, man, I've worked my butt off for the last 20 years for this. I know it's worth a million bucks, but yet they've never made $80,000 take home. They might make that as a manager, the owner, as their salary, but the profit of the company's not there. Tell me exactly how you kind of established a price

and went about all that. Well, we established, there's a couple different formulas. There's profit times the multiplier. There's yearly gross revenue divided by a certain amount, and you can establish your price that way. You know, for me, I looked at the amount of money that I'd be able to put back. I looked at the amount of debt that would be paid off.

I looked at how much I would be able to have to start something else. And, you know, I'm fully confident that I'll be able to get another brand off the ground and sell it too. So that's, I'm looking at doing, but what the buyer looked for, if this may help some people, because like you said, Tommy, you know, blood, sweat and tears on yourself. This is what he looked at. He looked at my average ticket, which is around between four and $500. He looked at the gross revenue per year. He looked at how many jobs we did. He looked at the reviews. He looked at the gross revenue per year. He looked at how many jobs we did. He looked at the reviews.

He looked at the fact that we had a jingle in place that was trademarked. He looked at the fact that we had a trademark on the business itself. That was a unique selling proposition. He looked at the number one ranking of the website. He looked at all the reviews. He looked at company policies and procedures

that were already in place. He looked at all the and procedures that were already in place. He looked at all the technicians that didn't need to be trained in the company ways. You know, they do look at a little bit of goodwill, but he wasn't buying a company that had a bunch of customers that were used to paying $75 an hour. He was buying a company that had a customer database of people that were already ready and preconditioned to buy at a premium price for the area. And, you know, all those factors went into where my business was actually viable and sellable and where it was something that he wanted.

So did he look at EBITDA, which is just a fancy word for profit? Did he like take a multiplier of that or not really? i mean he gave me what i offered i would like i said it happened really fast i was surprised that there was no haggling there was nothing so i was proud of that you know they made it really easy and i mean and then now the guy i sold it to he's kind of the type of person that when he wants something he wants it you know he's already made up his mind so like i said there wasn't a ton of back and forth about it he had done his homework on the brand. He had done his homework on my books.

You know, I let him see anything and everything. I let him see the warts and the problems, too, the things that I felt like I needed to work on in the next couple of years. I was very transparent with that. And that's kind of how it went down. But, yeah, now he looked at the EBITDA. He wanted to see tax returns for the past three or four years. And the other thing he was looking for was growth. You know, was the company plateaued out or was it stagnant?

But we had year over year about 30% growth. And that was a good sign for him. So he knew things were on the rise. So that's an interesting concept. Tell me a little bit of things that you felt like you were definitely making progress but probably needed to work in the next two years. Well, you know, one of the things I had a talk with one of my guys before I exited a couple weeks before that because none of them knew that we were doing it. You can't tell your guys you're selling the business. You need to keep it a secret as long as you can and operate normally for the sake of the new owner.

But I told one of my guys, you know, I said, if I had 10 more of you, I would have 10 times more work to do. You know, so one of the things I really needed to work on was getting these people that worked for me, especially in the overhead category, is, you know, I didn't hire you to give me more work. You know, you don't hand me a pile of papers and say, handle this. It's your job to handle that. So for me, I really needed to toughen up

on people and, you know, work on those things. My guys were way too reliant on me being the easy button and they could just pick up the phone and have an answer right away. And I'm guilty of that myself. When I can't find something in the kitchen, I yell to my wife, where's the blender? And she'll yell at me, you know, you didn't't even look for it yet but it's easier for me to just ask her and i had a lot of that going on in my company but i was very you know like i said i was very up front with his buyer about those things and he felt like that was something he could work on and uh so i needed to work on that where they were a lot more independent and empowered yeah i think one of the things that i've learned over the last year is sop standard operating procedures to where if there's a common question on how something's done or where to order it or how to order it or what should I wear to work or what's the gas policy on the vehicles or when do I do a vehicle inspection?

All that should be in a manual for every single position. And if it's a question, you should just say, I can't answer that. Refer to page eight in your manual to the point where these people become self-efficient, self-reliant. And if it's not in there, you go back to the living, breathing document, which is the manual. And that's when you add stuff. So for me, I'm buying out companies. I'm in the middle of an acquisition right now. I'm hoping to do another acquisition in about a month. My goal would be to buy 20 companies a year, but I'm never buying any of them that have operational manuals. I don't want their manuals. I don't want them because you pay a premium for those type of companies. I'd rather

buy seven, eight, nine, 10 than buy number one and two in an area because you're paying for the infrastructure. You're paying for those people that answer the phone, which I wouldn't use them because I have my own call center in Arizona. You're paying for a lot of things that typically I really don't need. And people are asking a premium for that stuff. So but if a company wants to be worth money, I think you hit the nail on the head. You need to have copyright and trademarks. You need to have great reviews. You need to have an online presence. You need to have consistency.

You need to be selling home service agreements. You need to have some great marketing tactics. And more importantly, you said you're on Service Fusion, but it's nice to have a CRM. Because a lot of guys are still operating on uh you know they consider quickbooks to be a crm and you can look at certain things but that's no way to run a company and when i'm looking at people the hardest step for me is i look for them to at least be using a tablet because i know when we switch all the stuff over to a tablet this and that we're going to lose guys they're going to get flustered and they hate change.

And if they're already on a tablet, it really makes it easier for me to come in and get them over to Service Titan. So that's really big stuff. So I get what you mean, though. You just, hey, look, I'll take care of you. I'll give you the answers. They relied on you. What else do you feel like in your company? You know, I think you, from just us talking, you did a really good job,

but I can tell you 20 things that I need to work on. What other things do you feel like over the next couple years you would have moved towards as far as making the company stronger? I think better equipment. You know, I hate equipment failures, and I'm putting myself out there as a premium provider, and my guy's on a job, and the pipe snake that he has won't get it. It's not long enough, or it's not strong enough, or it won't make the bend.

So I was going to start investing more in the equipment that we had and really trying to solve those issues. I think if the homeowner calls you out for an issue, you need to have everything that you need to do that job when you arrive. And it's those type of things that I really needed to work on. I needed to work on truck inventory better. You know, we grew really fast, you know, a lot faster than I ever expected. And I didn't have a person that was over the inventory necessarily. My guys' trucks were self-managed, and that's a scary place to be in your company, having your guy manage the inventory.

And I looked at the tickets from the supply houses and stuff, but when you've got seven trucks on the road, it's more than one man can handle. Yeah, I think inventory is one of the hardest parts of business. If it's not managed, you don't lock up things. It's one of those things that can get away from you really, really quick. My CPA only has 10 clients, and he said, there's two things, Tommy, that I need you to focus on as you grow. And he said, your inventory will crush you.

And he said, number two is taxes. Make sure you're paying your local, state, and national taxes because those are the two biggest culprits of a company going out of business very quickly. Another one is when the economy hits a downturn, the first thing people do is cut their marketing and they hold on to all their staff. Whereas, you know, you got yourself in a position to sell. And the first thing I think when I would sell is I'd say, you know, who do I have here that kind of worked up the ranks

from a dishwasher to a, not really a dishwasher, but you get what I'm saying. Like they moved up and they're probably overpaid because of loyalty. Like I'm a really loyal person. And the first thing someone's going to do

is come in and they're going to cut the dead weight, right? They're going to cut the people that are making way too much for that position. And as an owner, these people you're loyal to, they're the last people you going to cut the people that are making way too much for that position and as an owner these people you're loyal to they're the last people you want to cut but literally you're robbing from peter to pay paul your company's going under you're cutting your marketing it's a death spiral in my opinion is cutting marketing and then keeping all your

employees you know and that's a hard one to grasp i mean have you ever got yourself into that position where you needed to let some people go that you believed in and loved but you had to make a strong decision well i didn't on round two but on round one i had to let about 40 people go so and i did it too late and yeah i learned my lesson and that's why i was you know i'm just i'm an obsessive marketer and i will not throw money into bad marketing but i I'm always doing something to make the phone ring. And like I said, I haven't had to do it on round two because we're on the rise of this bubble. It's going to burst one day. It might be part of the reason I got out is because, you know, get out while the getting's good.

But on round one of Devlin Plumbing, it was tough. It really was. And during that recession, it was just overnight. Like, there was no work. It was crazy. And, yeah, I held on to people way too long. You're right, Tommy. You know, and I hear a lot about that.

I hear a lot about the recession. Is it happening next year or the year after? And I'll tell you what. If you know your numbers, and you only need five numbers, you need to know certain things about your financial statements and certain things about sales and really who's making money and who's not. And I'm going to tell you, you need to shrink during a bad economy. I don't think we're ever going to see 2007 and 8. We'll see it to a certain extent, but not when your house is worth 350 and now it's worth 175 within a year.

I mean, there was bad loans, like really bad loans. And you don't see a lot of times in history where a house will completely devalue itself unless it was ran up with false. I mean, 2005 and 2006, the houses were doubling, especially in Phoenix and Las Vegas. So I know when we head for a downturn is when billionaires are made. When you could take market share in a depressed economy, it's when you come out and you've tripled in size. So I don't want a bad economy. I would never prey upon that. I would hate that. But we're going to hit some bubbles. And I think that that's a good time to position yourself to grow. And

that's what I would say is right now, a lot of people are leveraging themselves like crazy. And leveraging is good to grow. But realize that you don't want to leverage yourself too much before things turn around, because that's how people lose their businesses. And, you know, if you understand your numbers, I don't think it's going to happen as quick.

I think interest rates will start creeping up. People will stop putting so much in. But I really don't think with the policies and the things going on right now and the tax incentives that the economy is getting ready to turn in the next two years. But I could be wrong. But I think you should have the ability to borrow money and make sure your numbers, they look at all kinds of ratios. There's really three main ones they look at, but make sure your ratios are where they need to be to borrow money

because you can pick up companies for 10 cents on the dollar in a depressed economy. I mean, look, when you went out of business, how much did you get rid of your old trucks and tools and stuff for? I mean, probably. Oh, I had a yard sale. I paid $1,700 in the yard sale, and it was a lot more. There was a lot more there than $1,700 worth of stuff, but it was, you know,

you had to do what you had to do. And that's exactly it. I mean, you got to understand, if you're able to scoop up these companies, right now, the real estate market is equivalent to a business market. Right now, it's a huge seller's market, meaning the seller has a lot of control. When it's a buyer's market, you can negotiate down and you could get stuff for pennies on the dollar. And the guys that come out, the guys, you know, business owners, women at whatever, when they come out of this economy in a buyer's market, they could literally do 10 times the growth through a couple of years. And they know that they're still profitable because guess what? They're able to take somebody like yourself that had 40 people and say, this guy didn't let go of anybody.

He doesn't know who's profitable, who's not. He doesn't run a CRM system. He doesn't know what builders are paying on time because he you know i'm not saying that that was you exactly but i'm saying everybody was making money back then it was like you didn't have to try you were making money and the people that know they track their financials and they know what's profitable and they understand what it costs to keep a csr on those are the guys that'll make it through that economy and those are the guys that'll actually take a lot of market share. So that's just, I think that's an interesting lesson because you've been through it.

And I think some of the listeners probably have, and some of them haven't. So it's just a little educational piece. Yeah, and Tommy, you know what? In my observation, I've been in this trade about 20 years, in my observation, the guys that really scale their businesses don't know a lick about the technical side of, and it might not be, I know you know garage stores, and you've scaled it obviously, and some other guys have, but I mean just a ton of people, even the national franchises,

the biggest ones in the country, and the guy that's the biggest in our area, they couldn't change a light bulb if they wanted to, and it's because the only thing that they can look at is the numbers. They're not relying on their technical aptitude and ability to be able to grow that business. And I found that my technical ability has been a hindrance in my business life. And, you know, I'm almost inclined to go into a business I know nothing about in my next venture because for that reason. So I have no choice but to hire people that know how to do it. And I look at the numbers only and make decisions based on those numbers. And that's

it. Yeah, 100 percent. Most consultants I've met, they tell me the exact same thing. I got to get the owner out of my freaking way. I got to get this damn owner that needs to be on the phone and tell everybody and diagnose it over the phone and tell us CSRs. I hire CSRs that don't know shit. I let them go out with a technician one day. I want them to go out with a technician just to see the life of a technician. I don't want them to learn everything about the parts and this and that. It's not their job.

It's our job to get a professional background check, drug tested technician out who's a professional, who's one of our lead technicians. And this guy is amazing. He takes his family to North Carolina every summer. You know, we build up the guy out that's going out there and we just say, look, let him come by. He'll take a look. If you like what he has to say, he'll go ahead. He'll have the stuff on the truck. He'll do the work then and there. If not, you can send him on his way. But what we found is you get somebody that knows everything. And trust me, I sell leads. I've listened to thousands of phone calls. And I've heard the owners take calls.

And I'm like, dude, that sucks. Like you gave the customer the exact price before you even get out there. And, you know, what do you do when someone asks, you know, I got to let's say I got a drain that's backing up two of my sinks. How much is that going to cost? I mean, do you just tell them to come out there feeing an hourly fee, or how do you do that? Well, we do the same thing. Now, here's the difference, though.

I had to get somebody else to answer the phone because I knew too much. Yeah. And I don't like lying to people. So they call me and they say, how much is it going to be put in a faucet? I knew. I couldn't lie to them and say, I have no idea how much it's going to cost. So I had to get somebody else who didn't know how much it's going to cost. Because, you know, the only thing I would give them is the price.

You know, they would have the price to decide on it, as opposed to if we can get the guy to the house, if we can get him there in uniform, on time, establish some rapport with the customer, and then look at the issue and see if there's not any other underlying issues that actually caused that issue or that problem. And my CSR would tell the homeowner that, you know, we want you to be happy. And if I give you a price over the phone and it's different when I get there, you're not going to be happy. So just allow us to get our guy out there and take a look at it. And depending on how busy we were, there would either be a service fee or there wouldn't be. So I think that's one thing I think a lot of owners make a mistake on is you need to keep an eye on what the schedule looks like.

If you've got nothing booked for the afternoon, get a guy to the house. It's better than having him sit at the shop. Get him to the house, let him do his thing, and he's leaving with a check. That's the goal. I think that a lot of companies are way too rigid with that call out fee and i think the call out fee has its place where if you're you're busy and you could stand you got to qualify people but if you if you have a slow time you need to you need to get your guy out of the house and tell him to do his thing and work his

magic and make a happy customer get a good review and leave with a check yeah interestingly enough we just switched the same day scheduling about a week ago, which means I'm not going to give you a time. I'd say, Christian, absolutely, you cannot get out of your garage door. We understand how big of an inconvenience that is, and you are the next available appointment. I will be checking in with you today, probably in the next hour. We'll have somebody right out there.

When we switched to same-day scheduling, I was really worried. I'm like, we're not going to give them a time. I think that's just so strange. People want to know the time. We've had zero complaints. And what we're able to do is if somebody needs their remote reprogrammed or a car programmed or a bottom rubber put on, which has nothing to do with, they're not going to lose any sleep if they don't get it done today. We were getting 30 to 40 cancellations a day because we schedule anywhere from 100 to 200 calls. And we were losing those priority wants because they'd find somebody to get out there quicker. And I mean, you could just see the revenue flying up now because if they can't get out

of in or out of their garage, we're out there within an hour. And actually teaching the dispatchers and CSRs how to really talk to a customer to find out how big of an inconvenience it is because now we ask, there might be an old lady that really doesn't know much about garage doors that just says, I can't close my door. She doesn't know how to manually close it. There's nothing really wrong with it. Maybe the safety eye is just in the way, but you can't explain that to certain people. So that's a priority one, because she says, I do not want to leave this door up for the next hour. I need to go grocery shopping. So by asking the right questions, you know, I didn't think same

day dispatching would work as good as it does, but we've been learning from a lot of air conditioning and plumbing companies, and actually this podcast has taught us a lot. But it really does make a huge difference by finding out the priority. Like, look, if your sink's backing up and it's making a mess, get somebody out there. I don't need to charge you a service fee unless you're calling me at midnight. I mean, I think that's really what you were talking about, right, is understanding the urgency. Yeah, well, we always have an essential question. Is this something that needs to be done today?

And if they said yes, you know, you need to get on that call. You need to jump on it. You know, the drip and faucet may be able to wait until tomorrow, but somebody without hot water, you know, that's part of, you know, that's part about charging a premium price, too, is you could service them same day. I mean, they're going to pay a premium for that. It's, you know, and you get their best friend's uncle's boyfriend will come over and just tell you how we charge more than that. But, you know, he was three and a half weeks out on being able to even get there. So how can he even compare his service to what you got going on? And it's, you know, we're ready.

We wake up every morning. We don't know what's going to come in know, we're ready. We wake up every morning. We don't know what's going to come in and we're prepared. We're equipped to handle that issue that day. And that's worth something. And that cost me something. Yeah. Well, most business owners don't think that. They think I'm a one man shop. I don't advertise and I'm cheaper than everybody. And those companies ripped you off. But they're not registered contractors. They don't have insurance. They're not on the BBB because they can't afford it. Their wife and kids work for them.

I always go down this. It's just, I just still don't understand. And they say they're charging the same price that they charged in 1988. You know, in 1994, they had a Yellow Book ad and that's how they built their business. And they're just like, yeah, it's a rip off for that. And I'm like, when you go out of town, your business does not run. Your customers do not get any service. You can't run warranty calls because you're busy that day because you have a busy day. I mean, it's just it's not apples to apples. It's apples and oranges. And Google and I talk about

this a lot. The Google guarantee program is going to change it for everything. They're going to legitimize each business. They're going to make sure you have a licensing. You're paying your taxes. Everything's got to be up to par. And it's going to put a lot of people out of business. And these people are going to understand real quick of why we charge what we charge. And it just doesn't make sense to me. I mean, I could talk to 99.9% of businesses, especially in like, plumbing is a lot more advanced than garage doors. There's a lot of huge companies that do it. They couldn't tell you how much they pay per acquisition of a customer or overhead per customer.

They couldn't tell you how much their average ticket is. And even if they could, it's not accurate. And if you don't understand what your bills are and you don't pay your taxes on time and you're not actually building in profit into the job, then don't talk to me about what's a fair price or not, because they don't know. I've seen these guys sell their companies for pennies on the dollar and wonder why and say you overcharge people. And I'm like, really? Do you see me driving a Mercedes or a brand new Lamborghini? I charge enough to make a healthy profit for the company. But yeah, I just think it's ass backwards for a lot of people. And what I've learned is great customers, the customers I want,

they don't care as much about price as they do about great service, about somebody that shows up in a collared shirt that's tucked in, about our text messaging, the picture of the guy on the way, about making sure they have a legitimate warranty that's not a bunch of fake BS that'll actually get ran. I mean, all those things are more important, I think, than what most business owners think. And, you know, it's the mom and pops. And I love mom and pops. Trust me, I'm all about it. I just wish they would understand their costs a little bit more, you know?

Oh, absolutely. You know, the thing that we need to do as business owners, we can't let that 1% that actually brings that stuff up get us down. You know, we need to remember the 99% that are happy with us, that are using us again and again, that are referring us to their friends and neighbors. And we need to let that be the fuel in our tank because we can very easily let that little bit of head trash get in there and ruin our day and kind of bring us down and question what we're doing. And I've had that same issue. You know, we had an 85-year-old woman call us up during a freeze and we had to replace her main valve.

And, you know, we never get a complaint about the price from the actual customer because they're the ones that had the problem. They're the ones that didn't have water that day. So we changed out this lady's main valve, and we get a call a week later from, you know, the daughter-in-law. Oh, yeah. It's always the daughter-in-law. It's always the brother-in-law. Yeah, yeah. And I asked the lady, I said, so where were you?

Where were you? Because we came out within an hour. Where were you? I understand you think $400 was a lot of money, but let's go through this. Where were you? Where were you? Because we came out within an hour. Where were you? I understand you think $400 was a lot of money, but let's go through this. Where were you? Well, I was, you know, three hours away. Well, okay. Well, we weren't, we were there. I said, and then they tried to act like we took advantage of the 85 year old woman who's used Google, who called us, who was new how to use a computer. So we weren't taking advantage of her. She was explaining the price before we ever did that we told the daughter-in-law that and then she said well i know how much a valve costs and i know how

much insulation costs and i said well i agree you probably do because of google i said but one thing you don't know how much it costs you don't know how much it costs me to run my business i said i'm not in the business of ripping off old ladies. I said, I'm going to mail you some money back just in good faith, just so you feel better about the whole thing that went down. Because I don't want anybody thinking I'm in the ripoff business. I said, I'm not giving you this money back because I did anything wrong. I did nothing wrong. I gave her the price before we started. She was in her right mind.

But I'm going to mail you this money back because I care more about what this community thinks of me than I do this $150. So I mailed her some money back. And I got a thank you note for it. And so, yeah, you're right, Tommy. They don't know. And we can't let it get us down, man. We've got to move forward. And I don't. I don't let that, you know, pizza cost about 25 cents. You'll go to Hungry Howie's or Pizza Hut or any of these places, you'll pay $12 to $15 to $20 for the pizza. You don't see them saying, I know that that pizza only costs $0.25. I should be paying less. You don't see people negotiate at Walmart or you go to Sears or just a Macy's and buy a nice shirt for $80 that they paid $7 for. But for home service, because they could find, I'm not going to go to Amco Transmissions.

I could find a master kit for my transmission for under 200 bucks, but they're going to charge you 2,500 and they're going to warranty it. But the same people will find a spring on mine and I'll go, you think you're going to replace your own springs? Really? Okay, go ahead. And it's like losing an eye doing it. Yeah. And all these parts. And it's like, literally at the end of the day, I still think some people want you to come diagnose it and then they want to shop it online and it doesn't make sense to me because some business owners know how much it costs to be in business some business owners don't have that same type of business and that you know they're very

fortunate because they might have an e-commerce site or something like that. So, you know, it costs a lot of money. I will tell you, my payroll right now is 160 to 170,000 a week. And most of that is just overhead for CSRs, dispatchers and other things. And, you know, warehouse managers, I've got a custom line that the guys that build the custom doors, we've got a recruiter, we've got HR, we've got a million things going on. And I don't complain about that. But if somebody really wanted to see what it costs to deliver a really good service, they would shit their pants.

And you're right, I don't let that bother me. And we give customer money back all the time. And there are certain times that I feel like, you know, maybe we got a fixed price book, but there's certain times where they'll add in more labor or something. And then I got to call the technician and ask him why, like we had a pasture drywall and I'm like, okay, that makes sense. And there's certain things that, you know, I've got a hundred technicians. So certain things I'm like, wait a minute,

is that really called for? But at the same time, I had my best technician. he told me about four years ago he said Tommy he goes you've been right the whole time I said about what he goes well I went in just fixing the main problem every time I just fixed that same day's problem he goes but here I am working on really old springs old rollers old cables and all those parts are rated on a cycle life just like your tires are rated on like 40,000 miles and he's like they call back six months later then I'd fix the problem then I get a call back six months later and he goes dude my third fourth time they're wasting their whole day he's like I finally realized now why not give them better parts that we can warranty that fix it

for another 15 years and now he's not a shyster. He's a great salesman because he actually has gone through the steps. He believes it now. He used to fix only the problem. And now he goes, wait a minute here. These are weighted on the same cycles. That's like saying you got 40,000 mile tires. You got 40,000 mile brakes,

40,000 mile calipers, but I'm only going to change one tire out when you come in on 39,000 miles. It just doesn't make sense. Yeah, it's not fair. It's not fair. For the whole entire investment that the customer is going to make, it's better to do it one time. Let's just get it over with.

It's not worth it to them. Yeah, you're right. You know this. On the hot water heater, a lot of times there's a sticker with the dates it got serviced. The same thing with a garage door. If I see a company, I tell you, it's so funny because the guys that have this and they write with the marker, I'll see a date like June 6th, and then I'll see August 25th, and then I'll see the next year, January 31st. And I'm like, this company's been here four times in the last year.

And they're like, yeah, that's why we're calling you. We want this fixed right. And I'm like, okay. And then they're ready to spend whatever. Because you got this company, Nickel and Diamond, I'm for service calls and fixing the bare minimum. And those are the guys that should be working on home warranty companies because they just want you to fix the bare minimum and that's their whole game plan.

But, you know, I had a guy that wanted to work for us in Milwaukee. And he goes, Tommy, I'm going to be your be your best technician i go why do you say that he goes because i could run 12 jobs in a day i go yeah you're not gonna work for us that's ridiculous nobody could run 12 here's where things have gone wrong tommy this is why the guys are literally doing this it's one thing if you go to the garage door, you go to the water heater, we go to 15-year-old water heaters all the time, and their shelf life's only eight years in our area, right? And we look at it,

and here's what you have to do. There's one company that'll say, we can't fix this. You need a new one. Or there's a company like us that says, listen, we can fix this, but I don't think that's the best use of your money. I can give you a brand new one. We're going to warranty it. We're not going to be out here, you know, a week from now or anything like that. You could choose this. So it's about giving them

those options. But it's, you know, the guys that lie about it, they're the ones that have given us a bad rap. You know, it's about letting them know. And one of the most powerful statements that a technician can use is, if this were my home, I would do blank. The moment that comes out your mouth, that's power. Like, we need to use that. And, you know, I wouldn't put a penny into a 15-year-old water heater. And, you know, and they respect that. And we have the mantle of authority in the house.

We're the one in uniform. We've been doing it. We need to utilize those skills. And it's not lying to the people. You know, you're just letting them know that they have another option besides putting a Band-Aid on this thing. You know, it's funny because my manager in Milwaukee, his dad's garage door broke and his dad spends the winters in Florida. And he called me up and he said, Tommy, my dad's garage door broke. I wish we were out in this area of Florida.

We're in Tampa, but his dad lives around Disney World. And he goes, you want to know what I did? And I go, what? He goes, well, his spring broke. So I called the guy up and I told him, I want you to replace both springs, the cables, the bearing plates. I want you to add a strut

and an operator reinforcement bracket and change out the rollers. And he goes, I want you to do it all for 500 bucks. And the guy goes, OK, I'll do that. But if the parts aren't bad, I'm not going to change them. He goes, bullshit, you're going to add all those parts for that price. And that's what I'm asking you to do, because I don't want my dad. He's 83 years old.

I don't want him getting stuck out there ever again. And see, at our business, we believe in this stuff. And I tell customers, look, if this was my mom's i usually say my mom's door because they're like a lot of customers be like if this was your mom's door especially women when you're out there what would you do and i told my guys it's not about sales i said imagine this so i'd say this christian imagine the guru of plumbing i'm talking this guy's been through he's been doing it for 50 years. He knows everything there is to know. If he walked into your job right when you left, what would he say

you left out? Did you check every toilet? Did you check every sink? Did you check every nut and bolt on that hot water heater? Did you go through every pipe? Did you check pressure checks? Did you do this? Did you offer upgrades? Did you offer a copper upgrade for this or this? And I don't know a lot about plumbing, but if you think it's about sales, it's not what it's about. If the best guy walked in there and knew that you didn't want this to break into the next 10 years, what would he have offered? And if you could say that 100% that you offered everything that you would have offered, that

the same guy would have walked in after you, then you did your job right. And that doesn't make it about sales. That just makes it about doing the right thing, right? Yeah, well, people, you know, the other thing about sales, too, is that, you know, it's gotten a bad rap because of the lawyers, but people don't mind knowing what's available. They're going to get up on Saturday morning and they're all going to rush to the mall to see what's on sale. You know, people like to see what's available. Like, I go on Amazon all the time to see what the on sale. You know, people like to see what's available. Like I go on Amazon all the time

to see what the hot deals are. And it's, you know, I'm not offended by the fact that they put that on my screen. Like I went there to see it. So, you know, when it comes to things that are in your home, there's nothing wrong with letting them know that they have options, that they're not stuck to what you've offered them as an ultimatum for getting whatever it is repaired. And, you know, I had to teach my guys that. You know, we leave behind brochures and all kinds of stuff, and people aren't mad at us for doing that. They don't, you know, like I said, it comes down. And when the lies start coming out, you know, that's where we draw the line.

We're all about sales. It's what drives our company, but we refuse to lie about things. And, you know, you don't have to lie. That's what's so cool, Christian. I know guys that clip cables. They tell people stuff. They hold doors down. They tell them stuff.

You don't have to lie. You just need to say, look. No. Your springs are 10,000 cycles. How often do you use your garage door? Oh, about seven times a day. Well, how long have you lived here? 10 years.

We've used it that the whole time. Math tells me they're about to break. I could offer and I can put new ones on today, but I don't need to tell them your springs are completely failed. I just say, mathematically, this is when they break. This is what they're rated for. I'd recommend changing them out unless you want us back out here in the next year. And it only takes, I can't tell you enough how much times I wish I would have done it when you said so. So I've learned to use very, very good adjectives and I've used a lot of things to explain to people, which is people might consider that salesy, but you know, I know what I'm doing

now. And I say the last customer that told me that called me out within six months and was very, very unhappy that they didn't do it the first time. And unfortunately you you got to use fear, uncertainty and doubt because it's the truth, because customers aren't happy when you're out there servicing their door and a month later, something breaks. So I want to kind of wrap this up with you, but, you know, I get so passionate about this stuff. What's one customer strategy that you found that's never failed you? You mean for customer acquisition or just making customers happy?

Well, let me tell you, I know you give a customer back guarantee. Tell me how that's worked for you. Yeah, so, you know, accentuating on what your warranty is going to be. We offer a lot of warranties in the competition. That really helps us with the price differentiation and establishing us as a premium provider and moving us out of the realm of being a commodity that we're a premium provider by doing that. So you say you're constantly reading.

This is kind of what I always ask at the end of the podcast. You're always doing research, listening to podcasts, reading articles, listening to books. Tell me some good information that we could share with the audience or some stuff that you got a lot out of. Research, listening to podcasts, reading articles, listening to books. Tell me some good information that we could share with the audience and some stuff that you got a lot out of. I get a lot out of your podcast. Because, you know why? Because you're not in my industry.

So I get to learn to think outside the box. I'm not stuck. You know, I think we need to learn from people outside of our industry and steal their ideas and apply it. You learn a lot from pest control guys. They really got to keep a lot of trucks busy. So I listen to pest control podcasts. The books that I really like are Entree Leadership by Dave Ramsey.

Good to Great is a good one. Let's see, man. I'm listening to a lot by Jim Rohn now, who is Tony Robbins' mentor. And I find him to be as good, if not better, than Tony Robbins. And what those guys are really good at is breaking down the psychological barriers that are in your mind, the head trash that's there. stuff but you know just just identifying why i believe the way i believe and what for my past has actually conditioned me to have fear and limiting beliefs on what i can achieve is what they're really good at working out of you and i really like what i'm listening to by jim rohan that's awesome yeah there's so many good books out there i have hundreds and hundreds and hundreds

of them i i had a guy, Al Levy, who I had on the podcast, who's actually helping me out a lot right now. He told me about a situation where he said, Tommy, I was in the plumbing industry and he tells me all about it. He says, I was never home. You know, I was gone and I had two kids and my wife and my wife kind of looked at me one day and said, how long is this going to happen? And he said, if you really want me to get back, I need two years. And she said, two years for what? And he said, I'm going to make this business run itself.

So he went out and created manual step by step checklists, created these schedules for everything. And I just was so amazed because he said two years on the nose, because we were in, I forget where it was, I think Hawaii. And he goes, my phone only rang once the whole week. And he's like, we knew we'd made it because we put systems in place, checks and balances and manuals and checklists to create this whole process. And that to me meant more than any piece of advice I think I've gotten in business is how to scale a business with manuals, procedures, policies, and execution.

And basically, I talk about this a lot as a hierarchy in the org chart. So is there anything else, Christian? Because you've been great, man. I want to definitely get you back on. I want to hear about your next venture. And I know sometimes I run long, and it's a good thing because if I don't run long, that means there's not a lot to talk about. But is there anything else that you could leave the audience with in the home service industry

as something they might have not thought of or something that you've learned now that you've sold your company? Yeah, my best advice would be go visit another shop. Reach out to somebody that's not a competitor in your market. That's where you want to be, and go visit their shop. You know, reach out to somebody that's not a competitor in your market. That's where you want to be and go visit their shop. It's one of the best things you could do. It's the most educational thing you could do. And one day at somebody else's successful shop will change your life.

I love it. Well, listen, Christian, you've been amazing. I'm glad we kind of locked each other down and I appreciate you being on. And like I said, I'll be in touch. And hopefully you can come back on and tell us about your new venture. I'm looking forward to it, Tom. All right, Christian. Listen, we'll talk soon. Have a great day. You too. Thanks for having me. Later, buddy.

Hey, guys, I just wanted to say thank you for listening to the podcast. And I wanted to talk real quick about the new book I have coming out in November. It's called The Home Service Millionaire. And I discuss everything it takes to hire the right people, train your salespeople, how to get tax breaks. It talks about how to sell your company for the most amount of money. We've got a lot of great contributorships coming on. Everybody from Paul Akers about how to go lean to how you do sales from enterprise, how to get the best write-offs in the industry and save a ton on taxes and actually make your company look more professional.

I got the CEO of Service Titan. I got the CEO of Valpak. We've got great people on here that know everything there is to know about marketing and Google. And there's basically no secrets we left out of this book. Literally, there's people that have read it so far say I cannot believe you're giving all this information away. And the reason I did that is I just feel

like you guys could just take each one of these gold nuggets and run with them. I mean, the ultimate goal of the book is to make sure that everybody is successful and makes money. If I could contribute to your lives, then that would be amazing. And I feel like it's the least I could do. And I really appreciate you listening to the podcast. I hope you enjoy the book. Go to Home Service Millionaire. That's homeservicemillionaire.com and pre-order your book today. Thank you.