The Home Service Expert Podcast - Creating Predictable Profitability with The Four P's of Freedom

Episode Date: April 4, 2019

Farres Elsabbagh has been the President of the Canadian General Contractors Group since 2014, and is a part-time professor at Algonquin College of Applied Arts and Technology. He was also a member of the board of directors of the University of Ottawa Alumni Association’s Finance Committee, as well as the chief relationship manager for Vancouver's General Contractors.   In this episode, we talked about Marketing, Business Growth, Sales...

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. Welcome back to the Home Service Expert. I'm Tommy Mello. And this is another episode that

you're going to want to make sure you turn up the audio on your computer. I got Ferris El-Sabah here. And he is an expert. He's done everything from A to Z in a business, from marketing to the sales end to the recruiting to the customer service. He's the president of the Canadian General Contractors Group from 2014 to present, part-time professor at Algonquin College, which is Applied Arts and Technology, member of the board of directors of the Finance Committee, University of Ottawa Alumni Association, chief relationship manager for Vancouver's General Contractors,

and a sales manager and program director of S-TRIP. And you've helped expand the Canadian General Contractors group across Canada, including Vancouver. And then the 10 months, it says in the first 10 months, the Canadian general contractors, Calgary made $2.1 million of sales. So I'm excited to have you on. I heard great things. I talked to several people that said, I have to get you on here. And how's your day going? Day's going great. You know, couldn't be happier. You know, my team's happy,

business is rolling in, exciting times over here. Yeah. So tell the crowd a little bit about, you know, where this passion for the contractor's world came in because our audience is people out there looking to grow their home service business, whether it's services or improvements, home improvements. So let's tell them your story. Yeah, absolutely. For the last 10 years, I've been basically building design, build, renovation, and custom home building companies across Canada. And I got into the industry maybe a little different than most that might be tuning in today.

I actually didn't come up in the trade. As a matter of fact, even today, I couldn't really build you much. But what I did come up with a burning desire to be an entrepreneur. And an opportunity came my way about 10 years ago where I teamed up with a good buddy of mine. And we started a renovations company. But we've always been sales and marketers first. So we really built up a company based on the idea that it was going to be scalable and we were going to grow it.

So essentially, the last 10 years, we've been building the design, building businesses and growing the company as further challenges come as you grow a company. When you grow a company from a million to 2 million, you've got a set of challenges. And then a whole new set of challenges after that. And then you're trying to start managing high-level managers that manage your business. So basically, what we do is we're problem solvers. And that's what we've been doing.

Quick facts so you have an idea of what we do and who we are. We do about $20 million annually. Got about 100 employees and probably another 100 subcontractors. And yeah, and then that's basically it. Been for the last 10 years. That's awesome. So tell me a little bit about... So you started in the travel industry and you worked at a travel agency in Canada.

And then you got involved with the contractors. Tell me a little bit about how did that help your career? I'm just curious. Did the customer service then help that or what was the good takeaway from that? That's a good question, right? So it's 2007. I just graduated university and I needed a job. I had student loans to pay. But at the same time, I wanted to have some fun. And what I had at that time is I had a small little business where it was like an event management business. So I did proms and after proms. And then I got connected with these guys that were doing graduation trips. So they saw that I had a network of students. Naturally, they tapped into it and they saw that I had great sales skills. So then they started sending me to different cities across Canada to pitch their graduation trips. Fast forward two, three years later,

I'm expanding the company across Canada and then expanding them into Mexico, Dominican, and Cuba. And really the main takeaway that I have to this day, whenever I'm thinking about a new venture, I like to keep things very simple. Get sales, figure everything else out later. Because without sales, you don't have time to figure anything out.

And when we got into the construction industry, so there was the get sales, figure everything else out later. And then there was just the figure it out. When I was expanding this company across Canada, the student travel company, I didn't have a manager or anybody by me to guide me through getting sales. Or heck, I was selling million-dollar trips of trips, so 10,000, 20,000 students to Cuba without going to Cuba ever, without speaking Spanish. Heck, you couldn't even really conduct business there because you couldn't just wire money into Cuba. So I was flying down with briefcases of cash and exchanging them in bushes because it's a

communist country. You can't just do business. So what I learned was there is really nothing that's impossible. And the key takeaway from working in the student travel industry, and specifically just that example I gave you, was no matter what problem came your way, figure it out. There's an answer somewhere. If I didn't have that experience, I wouldn't have had the confidence to go and start multiple construction companies. You got to remember, I've never lifted a hammer in my life.

What gives a guy that kind of confidence to go and start multi-million dollar construction companies? And it was just simply the fact that I've been put in positions where my back is against the wall and I had to figure it out and I've overcome them. So in a way, I've been there before, but not really just in a different industry. Does that kind of all make sense? Yeah, it does. It's really all about... I think customer service and sales go hand in hand. I think sales help mask a lot of the problems. It's one of the things that I'm really realizing is you need to have sales and you need to have marketing. Those are like the two big ones because you can't have sales without the phone ringing. And I'm really good at sales and marketing and thank God,

because otherwise we'd be out of business a long time ago. But I don't love the day-to-day operations, the inventory, the clocking in, clocking out, all that stuff for the employees. You know, where, where do you see most businesses failing? You know what? It sounds like we have a lot in common because I'm the same way. I love sales and marketing and I hate the operations side of things. And I mean, I tell you I hate it, but that doesn't mean I don't focus on it

because that's kind of where you squeeze out your profit, right? But I'm a sales and marketing guy. And where I noticed that most remodelers, home service experts, custom home builders, to my advantage, actually underestimate the importance of marketing. And it's so funny because I'm a part of so many construction and remodeling groups. And I'm always telling people, Hey guys, you got to focus on your marketing. And nobody takes me seriously. And I think it's hilarious because that's where people like me that never picked up a hammer can come in and just take the market. You know what I mean? Or they might think that, oh, that's great, but I don't have the money for it. But yet you might have the money for all these tools and all these trucks and all these other things, but yet you don't put it in the right place. So they underestimate marketing or they do not invest their money properly.

And here's the other thing. They try to take on marketing themselves. But then again, I tell them, would you hire me, a guy that's never built a deck before, to build your deck? They'd say, hell no. So then why are you doing marketing and you've never done marketing before? You get what I'm saying? Oh, yeah. Yeah. And I think a lot of times contractors, they have a bad experience with an agency who does pay-per-click or possibly social, or they get into a money mailer or a ValPak or one of the big mailing companies and they say, oh, that didn't work. I tried it for two months. And then they say it failed. And they say, my question to everybody out there is, if it's such a failure,

why did Google do $110 billion last year? Why are people making their whole business off of pay-per-click? Why is organic Google still the best place to be? Why do reviews matter? Why are so many people paying for Yelp? A lot of people say that stuff doesn't work. Well, I think you either had a bad experience or you're not putting it in the right spots. And I wholeheartedly agree with you. What kind of marketing do you like to get started with? Let's say someone comes in and they've got a really good business. Word of mouth has been done well for them. And of course, referrals are the best thing, but that'll only allow you to grow so much. What's the next thing to get started with? Right, and that's a good question, right?

And I guess the one disclaimer is, I'll give them kind of like the one option if I only had one option, but to get the full optimal output, it's a whole ecosystem, it's a whole engine, it's a whole mix of things. But that being said, if you're looking today to get the best bang for your buck and start generating leads, it's Google Ads, just as you said.

Why is Google a trillion-dollar company? Because they have done something revolutionary in marketing. They've been able to collect a pool of consumers who have intentions. And that's the big word there. Intentions of buying your product and service. And they've given access to businesses who are willing to pay for it to get access to that pool. So if there was the one place to focus or get somebody to focus is Google Ads. But to get optimal output, it's a whole ecosystem that really revolves around Google Ads. Yeah. One of the things I'll tell you, I try to talk about my business in these podcasts a little bit as well,

just because we have our own issues. We're not like any other business. So we're still on the grind from day to day. We're in 12 states, we're in 19 markets. And I will tell you that I'm pulling back on a lot of my mailers and really going towards the paid side on the PPC and investing more in link building and SEO. And the whole reason is, is these mailers hit and you're slammed and then the rest of the month you're slow. So if if you get a couple big mailers, you might be busy a week and a half, two weeks. And the technicians get really disgruntled. So I think my goal would be do direct response as much Google as possible to the point of

diminishing returns, and then slowly add zones into the mailers. But you got to have a sales. I tell you this, my ticket average in my lowest cities around 220 and my best city, it's over 600. Now, when you look at that variance, the big cities basically takes the small city and averages out. It's really bad when you look at it like that. So I think there is an ecosystem, but I think you need to go after direct response. A lot of people say you need to spend a lot of money on branding. And I disagree until you're a certain size if you're trying to take market share. But you need to have a high ticket average. You need to have a good conversion rate.

Those are the things that people don't talk about. You need to have a good booking rate. A lot of people spend money in marketing. And then I go and look at their call center. And I go, you guys are not booking half of these calls. Well, that was out of our service area. Or that one was a parts call. Or that one was just an inquiry.

They weren't really serious. They don't even count that stuff. And they're like, oh, yeah, we're doing great, though. I mean, what's your experience with that kind of stuff, those other things that matter? So, I mean, I think it's hard to categorize all home service businesses under one umbrella, especially like remodeling custom home building, just because our ticket size,

like in our average service size is exponentially higher than most, right? So it's important to kind of keep in mind, most of my experience has to do with remodeling companies and custom home building companies. Like you said, exactly. Generating leads is one thing. But what's happening after that is probably just as important, if not more important. Because nothing's worse than investing all this time and energy and resources into generating leads only to have a crappy process to try to acquire those leads. Right? Well, I was just talking about how a lot of times we don't look at the call booking rate or we don't look at your conversion rate

or your average ticket on a repair. And I think by not looking at that, you're really putting yourself in a deficit. What is your take on some of those key performance indicators? Okay. So, you know, a few years ago, our main KPIs were, you know, I'd go up to a sales guy and

I'd tell him, you know what? I want 300 grand in sales for you. The month would roll on and then we don't get 300 grand in sales. And then I find myself asking him, why didn't you get me 300 grand worth of sales? And I remember reflecting and being like, wow, is that conversation so useless? Because by that time, it's too late. You can't go back in time and get that $300,000 sales. So what I did is I built behavioral KPIs. So behavioral KPIs that lead to sales. And then when I reflect back and I realized we are only getting sales when we meet with clients. So I created three sets of KPIs. In-office meetings, home consultations or site consultations, and project walkthroughs. So home consultations are

when we go out and meet with a prospect. Somebody that wants to do a kitchen renovation or a basement renovation will go and we'll meet with them. That's a home consultation. Afterwards, we always make sure that we get them into our office. So another key performance indicator is how many in-office meetings we're having. And then my third one is project walkthroughs, which is for really hot qualified leads or prospects that have gone through our process and are ready to commit to us to a six-figure project. And what we do is we show off one of our existing jobs.

And really, the idea behind that is, I realized the more I take up of my prospects' time, the less they have time for my competitors. Because homeowners only have so much time on their hands. So our KPIs were broken down by those three sets. And now all of our conversations are about, how do we get more KPIs? And because we've essentially built a system where we got almost to the point where it's unlimited leads, we can get high KPIs.

And the reason why we want high KPIs is because... Here's an example. We roughly average about 30 or 40 KPIs a week. So we're meeting with clients 30 or 40 times a week. Now you times that by four, you know, we're meeting clients at 120 or 160 times. So these are separate meetings. Actually, in some cases they could double up, but if we have 160 meetings, all we really need in my industry, my average job size is a hundred thousand dollars. All I really need is 10 of those to close and I got my million dollars in sales.

Does that make sense? Yeah. I really like the concept of you're taking up the customer's time, but not necessarily you're educating. You're creating a rapport, you're educating, then you're following up. I was looking at a company that does solar and it was a Facebook ad. And it said, on the whiteboard, it said, their first goal is to get them back into the office. And I like that concept. Tell me a little bit about how that looks and how that's an advantage for contractors to take advantage of. So, I mean, it's important to know who our competitors are, right? And then if you know that the majority of our competitors are guys who are doing all this free work, they're doing all these free estimates and they're poor quality because they're doing them for free.

And they barely have enough time to spend with the client because that time has already went to preparing that estimate. So they're rushing everything and they don't give enough time to the client. So naturally, what happens? They feel rushed. They don't feel like they're getting enough information. They don't feel like they're being enough information. They don't feel like they're being educated. And they feel like everything's rushed. So here comes one of my companies or one of my guys and they take time. And we're really great on follow-up. We're all over their face. So it becomes a no-brainer for

them to be like, Oh, you know what? This guy barely gave me time a day and this other guy is just all over me. It's just like a no-brainer at that point. Now, how that looks like when we get them back in the office, it's all about setting expectations. So when we take a call from a lead, we qualify them to make sure that they're a qualified lead. And then we tell them, we're going to come out to your home. We're going to take a few measurements. We're going to invite you back into our office and we're going to show you a project proposal. Now, you're going to invite me to your home. I want to invite you to my home. It's just as important for you to see where our office is and how we operate. And if they say, well, look,

I don't know if I'm ready to commit to an in-office meeting, then we won't even waste our time with them. If we're going to commit our time, they better commit their time. And that's the way we look at it. Interesting. So this is going to be a tough question and you don't have to have an answer, but at what point do you think that that makes more sense? Like solar is a $20,000, $30,000 investment and air conditioning might be a $10,000 investment. A garage door could be as cheap as $1,000, a $2,000 investment. Is there a general rule of thumb that you'd say that that makes sense to get them back in to show them that to build credibility? Or what would you say?

Yeah. Well, here's the thing. If we're talking about lower price points, then I think the competition is a lot stronger. Because you don't really need to invest that much time into let's say, scoping out a $1,000 product or service. Whereas for us, we don't do projects under $20,000. So I'm sure this model isn't really specific to anybody that does lower ticket sales. Just because if you say, hey, look, if you're not coming back to my office to talk about a garage door, well, I'm not going to work with you. But you've got probably 20 other guys that can go and give them a price right for their dorm expectations, right? So whereas for us, we really need to spend a lot of time

to figure out what the budget is for a $50,000 job or a $100,000 job. So it's like, we don't mind putting in the work, you know, a little bit here and there, but then also I've got a secret to making it look like you're doing a lot of free work, but not in charging for it. Anyway, that's another conversation. But really

what it comes down to is a commitment. And we look for a commitment. I think a lot of it that people are willing to pay for is perceived value and more than price. And the majority of people out there, especially in the home service niche, they think price is the end all be all. Well, they had a better price,

but I gotta tell you, when you show up in a wrap truck with a nice professional uniform and a smile, and you're using technology and you're building renderings in a CAD program, and you're showing them exactly what everything's going to look like, they're willing to pay more if the value is more. It's like Blue Ocean. Have you ever heard of Blue Ocean? Was it a movie?

It's like Blue Ocean. Have you ever heard of Blue Ocean? Was it a movie? It's a book. It basically says, if you're selling a blender, what are you going to get out of this blender? And a lot of people will sell the features, right? They'll say, hey, it's sharp, it can be dishwashed, it can handle cold or warm, it'll do ice cubes. But the Blue Ocean is, it'll make you live longer because it crushes all those essential vitamins and vegetables and fruit that you'll consume, which will enhance your life. You'll have more energy. You'll have more stamina, all the major essentials you need to live a better, longer life. And that's really what people want. They're either avoiding fear or they're avoiding the negative, or they're rushing towards the good. And most people, they try to avoid the bad stuff more

than they try to go towards the good. So when you're thinking about that, I try to take people down a pain funnel. So what didn't you like about this current garage door? What were some of the things that you would have changed? What was it like when you missed a day of work because of it? How cold is it out here in the winter? And how warm is it in the summer? And let them remember all that stuff. And then it's a lot easier to set them up to sell.

What's an important aspect of sales that we should have the people out there think about, especially when they're in an in-home consultation? Yeah. So specifically about pain points, and you're absolutely right. I mean, I'm sure that these prospects know that anybody can do a renovation, really, at the core of it. But what are they really worried about?

What are consumers really worried about in our industry? That's kind of known. They're worried about contractors that are going to take their money and run away. They're worried about contractors who are actually going to be reputable and honor their warranty. These are some of the core pain points

that consumers have. And we try to speak to those. And we try to speak to them. And that's part of the reason why we invite them back into our office. It's like, look, a lot of times I tell people, I collect a 30% deposit, whether it's a $100,000 job or $200,000 job. And they're like, they give you 30 grand or 60 grand a few months before you start the project? Yeah. Because they trust us. Because when they come into

my office, like in Ottawa, I got a 6,000 square foot office. They come in and it's professional, it's clean, they're greeted, they're offered a water and coffee, they come into the boardroom, we put together a presentation on the big screen, and they've got all their floor plans and their scopes of work. Trust is not an issue. And you know what? In most cases, we probably didn't even have to say a word. So speaking to their pain points and really understanding what is really on the top of their mind takes some really strategic sales techniques where you ask questions and you dig deep and peel back the onion. Starting questions off with words like, specifically, why do you want to do this? And then starting them off with exactly tell me how this will make your life better.

You'll get down to the root. And then when you speak to the root of their pain point, now you are on a whole nother level. Whereas our competition doesn't even speak to their pain points. They'll probably just rush in and out. And all they're worried about is pumping out as much estimates as possible. And that's all they're concerned about. Whereas we take the time to really figure out what their pain points are and speak to them with what we know. And usually, the pain points are all the

same. It's the same that everybody knows about. These aren't a secret. It's just how you position it and how you get that from the client and then how you propose solutions for that. That's the strategy part. So this is a good subject to switch to. Would you consider yourself one of the more higher ends as far as expensive, as far as price? Not even, actually. We have a competitor who doesn't want to do volume. So we do volume. We do about 120, 130 projects per office, which is about 10 a month.

My competitor goes for a lower volume, but a higher price point. So I wouldn't say we're higher end. But then you might get a guy that just has a pickup truck and a few tools. And sometimes we're more expensive than them. But that's, in my opinion, a whole different service. Yeah. And I like to be the expensive one because I want to be the best on time and I want to be the best on quality. Therefore, I might not be the best on price, but the value you're going to get is much better. So what do you consider a good closing ratio for you? What's a good fair amount? Now, you guys said you don't even bother going out to them. I'd still count that against your ratio. You won't go out to them unless they'll come in and back into your office. Not a big deal. I'm not trying to lower your number, but I'm just curious. I still think because people build these gray areas and say, oh, well, they weren't even

interested in coming back to our office, so we're not going to count them. I think that's lying about the numbers because I can make numbers look however I want. So what is the real close ratio from everybody that calls in for a remodel or a new bill? Okay. So that's a good question. I'm going to give you the number, but it's not fair or accurate. And I'll explain why. So the question is, is total leads comes in to what I close or qualified leads? See, I want to know the total, then we'll talk about qualified. Sure. So quick math and per office generate about 150 leads a month and we close 10. So whatever that is. But the reason why I don't know off the top of my head, because it's not an accurate reflection of what we do.

I got it. So qualified means that both decision makers will probably be there, that you show up to the house, they'll come back to your office. What is your close ratio? Define qualified and then what is your close ratio? Define qualified and then what's your close ratio for qualified? Good question. So what defines qualified is they're ready to go. They're not thinking about doing it next year. They're motivated. Okay. Yeah. Okay. And they've got realistic expectations. So they understand a kitchen is going to cost between $30,000 to $50,000 and not $10,000. They got cash on hand. They're ready to go.

Realistic expectations. And yeah, that's pretty much it. So our qualified rate from our total needs is about 35%. So from that 150, we're roughly talking about somewhere about 50 are qualified. Got it. Okay. And from that 50, we sell 10. So that's 20%. But it gets... In my industry, you need a little bit more clarity than what I just said to you. And the reason why is because as a design build firm, before I sell that $50,000 kitchen,

I sell them design and pre-construction planning for $2,000 or $3,000. So I compartmentalize my sales process. You get what I'm saying? Yeah, I like to do that. I like. First, let them become a customer for cheap. Let them make the buying decision. Get their checkbook on the table. Let the process begin. Wow them. And then they're in for that big ticket. Exactly. And it's a lot easier to ask for $2,000, $3,000 than to ask for $50,000 or $100,000. And now what you're doing is we're getting paid to organize their project, to build proper scopes of work, proper budget. And we're not doing free estimates anymore, which just consumes a crap load of time.

And it's only a poor quality anyways, because you're not going to spend 10, 20 hours putting together a free scope of work. It doesn't make sense for a business. And that's what most of the guys are doing out there. It's really interesting. Yeah, but then it changes. You can't trust a bid from a contractor because you're like, Oh, well, it's just as much the customer's fault because, Oh, I want better lights. Oh, I decided I want wood floors instead of the linoleum or whatever it is. All the time there's change orders.

The price goes through the roof. It's just what happens. And that's part of the design. I mean, it's not a bad thing. Which part? Like you're talking about the free work? No, no, no. I'm just saying it's not a bad thing that it always goes above what you started out as. I don't know anybody that starts a project that says, yeah, I got out $20,000 cheaper than I

thought. It's usually like, well, I decided I wanted a better alarm system and I decided I wanted built-in Wi-Fi or whatever it is. Yeah, for sure. But sorry, that's not what I was saying. I'm not really sure what got you to think I was saying that per se, but what I was just saying is that a lot of the contractors are expected to do free work. I don't know. I understand what you're saying. I was going off on another realm. What you were saying, correct me if I'm wrong, but you're not going to spend a week doing a free estimate. You're going to charge them for the CAD and a few grand for the design. And that's how you do the estimate. Exactly. Yeah. Yeah. You got it. And that's how you do the estimate. Exactly. Yeah. Yeah. You got it.

And I like that. I like that approach. It makes a lot of sense. You're absolutely right. If they're not willing to spend that little bit of money and what I find, tell me if I'm right, Ferris, but you've learned over time that the people that won't pay for that are the biggest complainers. They're the ones that leave one stars all over Yelp. They're the ones that want something for nothing and, hey, let's get a better deal. Hey, I want cheaper carpet. Am I right? Yeah, exactly. Because they're trying to dictate how my business should run. What makes them in a better position to tell me how I should run my business when I've been doing this for almost 10 years and they've never probably done a reno or it's their second reno.

So anytime a client tries to dictate the process, automatic red flag, we won't work with them. I just had to cancel a $200,000 project because the client took our work agreement to their lawyer and just put all this red mark on it. And they're like, you need to adopt this work agreement. And we said, we're not. And then so although she was willing to make concessions and follow our work agreement, the fact that she even brought that up made her red flag and I don't even want to work with it. Because when you start focusing on sales and marketing and you get to a point where you've got predictable leads, sales, revenue, and profit, you don't need to get desperate and work with whoever because it's these people that will drain your company and make you fork out money for their renovation. Like $200,000 jobs, heck, million dollar jobs used to get me excited because of the big number. But in my maturity and growing and learning, these big numbers don't mean anything at the end of the day because I've seen $600,000,

$700,000 jobs cost me money to perform for many different reasons, obviously. Oh, yeah. Yeah, we've all lost money on a job. And you guys got a good problem. You got enough jobs coming in where you could be a little bit more selective. What would you say to the small guy out there? Really, what I've heard is the follow-up is the poorest piece of small businesses, I think. And I can do better myself. I think we do a damn good job, but I always think there's room for improvement. So you mentioned a guy in a truck, right? Right. a lot of steps. What's the next step? Give me the next three steps of what you would do if you were that. The guy who's going out, he's got a truck of tools. He's got one good employee. He's pretty good at everything. He's not great at everything, but he's got a couple of subs that work for him

and he does pretty good work. What's his next step to build a business? Well, he's got to change his business model because if he's the guy that's working on the tools and working on the jobs, then he can't be a business person focused on his business. And depending on his goal, I'm assuming his goal is to grow his business, maybe to the point where he steps back, he's not on the tools, and to the point where he puts the right people in place so he can run the company efficiently while not having to work 14-hour days and pull hair out of his head. If he's on the tools and he's project managing or heck, even building as a finished carpenter or whatever, his business will never grow.

He has to step back. He has to focus on marketing. He has to generate a lot of leads. He has to perfect the sales process. And he has to work on his operations and put the right people in place to execute on his processes and procedures. So month one, right? We're going into January. I love what you just said.

I just don't think it's not really telling this guy out there that's listening right now. You told him what he's got to do. But step one is what? Put an ad out there step one is i mean you know these guys are we assuming he has no clients right now like are we assuming he had a few clients he's got some he's got some jobs going in so he's got some jobs going in they might be a little bit they might not have enough see a lot of these guys they'll go out and they buy themselves a job because they don't bid it high enough to make a profit for the company.

So let's just say he sold these jobs, right? He could get a few workers in there and he could step away. More as a checking in from time to time, like a part-time foreman is what he's going to do now. He's not working in the grind every day. What's the next step? So his next step is he's got to figure out his marketing. He's got to generate leads for himself.

Because if you think about business as a bunch of different compartments in a pipeline, like an oil pipeline, the first compartment is marketing. If you want to generate opportunities for yourself, you need to work on your marketing, get those leads, so that you can build up a funnel of

sales that will allow you to continue to grow your company. I agree wholeheartedly with that. And you know what? I'm just speaking from experience. I wasn't the guy that had the trucker. I wasn't the guy that really... What I did was we took $50,000. We put $20,000 or $30,000 into marketing.

So a bunch of things. The website, some SEO, some PPC. I got some listings and some home renovation directories. In Canada, we have something called Homestars. And we just started generating leads. And then when you start closing those leads, we're fortunate that in our business, you can generate cash flow really quick. You close one job, 100 grand, and you're collecting 30%. There's 30 grand right there for you. And then you can start hiring the right people in place to continue to grow your company, whether it's another salesperson or whether it's investing in more marketing so you can get more

leads. And then it goes back to what I said earlier, get sales and figure everything else out later. I've heard it all, right? Oh, well, your quality is going to drop. Sure, probably. You can't build a super successful business in month three or four. I feel like a lot of people give themselves excuses to why they can't grow. That's so interesting. I had a guy in here yesterday that's been using me for years and he's like, I keep bumping into different grocery guys. They tell me you're the most expensive. And I'm like, maybe. I'm like, are you here right now in my showroom? Did you talk to three different employees about getting your job done on time? They don't have that. They live at their own home still. Their wife

works for them. They don't have insurance. They don't pay their taxes on time. So it's kind of funny. It's like, hey, yeah, I'm a lot cheaper. Well, you don't even have a wrapped vehicle. You haven't paid your taxes and you're not even licensed, bro. So what's the doctor method? It's like, I think you're going to prescribe me something and you're going to ask me questions, but go through the doctor method. Yeah, well, you know, more or less, a lot of people try to prescribe before they diagnose.

Just like when you go to see a doctor, he's not going to prescribe you medication without doing a few tests or asking you a few questions. And part of our sales approach kind of goes back to what we touched on earlier, was really speaking to people's pain points. What are people's pain points? And by peeling back the onion and really asking a lot of questions, we are able to diagnose

and then prescribe. So when you really start peeling back the onion and start asking a lot of questions, all homeowners end up saying the same thing. Well, you know what? This is going to be a big project for us. And it's a big investment. And we want to make sure we're giving it to the right company because maybe they've been screwed in the past before. And then we got to start talking to how they can trust us and why we're a reputable company and all the great things that we've done around that. Or maybe it's because they want to add more space in their basement so that the mother-in-law can move in and she's got mobility issues. And we're probably the only company that started talking to them right off the bat about mobility, accessibility options and their design when nobody else has done that. So part of everything that we've touched on

earlier was finding out what those pain points are, really digging deep, spending that time and speaking to those pain points is what the doctor method is. Yeah, I love to ask questions and the questions kind of lead you in the right direction. I mean, if I ask how long you lived here, that's a great question. I just moved in last year. So you don't know anything about the garage or whatever, or whatever you're selling. And then how many plan on staying in the home is really important too. Oh, I'm moving next in two years. So I just want to do something to get me by. Questions are the way to get everything you're going to need to know. And that's how we can tell people's personality. And that's what can lead to more sales.

Right. And you know what? When the doctor method is executed properly, homeowners start pitching you to themselves. Where it's just like, Oh, I really want the right contractor. I had this other experience where the guy ran off with my money and it was a nightmare because I was very stressed out. I ended up losing my job and my wife almost divorced me and the kids were always upset. And then it became, well, you know, then what are you really looking for? Are

you looking for a company that has an office where you're always able to reach out to them? Are you looking for communication daily? So maybe like our client portal with a centralized place of communication with all of our team members? Is that something that would give you peace of mind? And if I think, yeah, that's exactly what I want. They started telling you that they need you. Yeah, I love that. And then have you ever heard of story selling? Tell a story to a customer and explain it so they listen. Do you ever do any stories? Not specifically, no.

One of the stories I'll tell them is if someone doesn't choose to get a certain part, I'll tell them a story about a customer in the last month or two. If I know one off the top of my head, or even a story about a customer that refused it a year ago. And I'll just run them through and I'll say, I had a customer that said the same exact thing. And unfortunately, here's what happened. I got a call around 8, 8.15. And I like the details because the details are what make a story. So it's the devil's in the details. So 8, 8.15 at night. And of course, the customer was not happy because we were just out there

in the previous month. And we looked up the ticket on the back end of our system. And we definitely recommended these parts. And just by telling the story, I find it really gets through to people more when you can tell a story like jokes and all that stuff too. But it's just something I like to do. So tell me about your four Ps of freedom. So what are most of the pain points remodelers or custom home builders have? And I know it's a specific mission to what most of your listeners are part of, but I'm going to speak to those guys right now. A bunch of them, their pain points are, they're working 12, 14 hour days, they're working six, seven days a week. Maybe they're making 80 or 90 grand. It's not bad. But at the end of the day, it's not enough for what they're putting in.

And they're wearing all the hats. They're the marketing guy, the accounting guy, the sales guy. And really, they got themselves a job, like I said earlier. They don't have a business. And what the four Ps of freedom does, allows them to gain their time back and put more money in their pocket. And it speaks really to those pain points. And what it is, is predictable leads get you predictable sales, which gets you predictable revenue and gets you predictable profit. And once you can predict all those numbers, now you can hire key employees so you gain your time back. As an example, all my companies have general managers that deal with the day-to-day of the business. It allows me to be on a phone call here today without having to get 10 phone calls or somebody storming into my office and dealing

with a certain situation. It allows me to gain my time back. And then when you can predict your profit, you can make key decisions on investments, tax planning, and future growth to allow you to make more money. Does that all make sense? 100%. Yeah, I love the word profit. It's almost obsolete to most people out there because you know what the difference is between most people and a real business owner and you're gonna like this ferris is profit is what's left over after you pay yourself a six-figure income so you should still make 15 to 20 profit after the owner makes 100 grand a year right exactly and it's funny right

most of them don't even realize that i mean mean, not too many entrepreneurs in this industry really understand that. Also, they're not taking into account certain things like their insurance or a certain person's salary. Or you know what? A lot of people make up numbers because they're just going off of what's top of mind for them. Nothing irritates me more than decisions being made based on judgment without data. Every time one of my team members, one of my managers comes up to me and says, oh, you know what? I think we've been getting a wave of crappy leads. Okay, show me. Show me how many leads did we get? How many site consultations were booked? And what does that percentage look like? And most often than not not it's exactly where it needs to be right and it's because people tend to ignore the data and just like to talk out of their butt if you know what i mean and that's what most of these guys do right like oh yeah i made a hundred grand profit last year okay well did you pay it like is that including your salary or not including yourself oh no like that's not including my

salary and most of these guys probably don't even have insurance or their contractor license or any kind of workers' compensation, right? Yeah, exactly. And you're absolutely right when it comes to the data. And I think that a lot of times the guys will go, well, my inventory was off again. Well, then we'll look at it. Well, you didn't enter the job correctly.

How am I supposed to give you the right inventory back when you didn't enter it incorrectly? So it's always human error. Right. And it's funny because I find that people that don't succeed have excuses. And they'll, like, for example, I'm not going to go on a diet until after the new year. And then they'll have a wedding coming up. Or I'm not going, stop smoking until my new year's resolution starts or, or I know we'll be successful after tax season because after tax season, people have money again. I am overly disgusted with excuses at this point and I can't take it.

I've got market managers, I've got technicians, I've got full supervisors, I've got CSRs, I've got dispatchers. And for the most part, I've got technicians. I've got field supervisors. I've got CSRs. I've got dispatchers. And for the most part, I've got amazing people. But the ones that come to me with excuses, I'm like, wow, you got a real problem. Do you think? So my goal as an owner is to remove their excuses. And I'll say this. I'll say, Ferris, so you're telling me that if I fix this and this,

that you're not going to come to me in the next three months. You're going to be able to be the best A player. You're going to exceed everybody. Am I right? Because you're telling me what's stopping you. So if I fix those things, you're going to be successful. Am I right? Because you're asking me to do something.

So I'll do it. But you got to commit to me that you're going to do something. Yeah, exactly. The objections to work, right? Everybody's got objections to work. And we just got to remove those objections. I mean, I used to be better at that. Now I'm a little bit more short with that. But I expect a lot about my team. And I'm fortunate because a lot of my managers are good friends of mine. So I'm able to freely speak to them. And they're all about growth and their career and within the organization. So they take it really in a positive way. So one of the things I like to do, Ferris, is I like to ask, well, number one, if the audience wants to hear more from you, they want to ask you some more questions,

what's the best way to get a hold of you? Yeah, so my email is ferris, F-A-R-E-S, at Ottawa, O-T-T-A-W-A, generalcontractors.com. My Instagram is at IamFares, so F-A-R-E-S. And yeah, that's probably the best way. Okay, so if you had to give three books, tell me about three books that really moved your life. It really helped you either emotionally, personally, or business-wise.

Oh man, when it comes to books, I really get inspired with others' lives, true stories. So I love reading Kobe Bryant's book. This guy was a 17, 18-year-old playing with men. And all the adversity and all the challenges he had to overcome to become one of the best basketball players in the world. Arnold Schwarzenegger, Elon Musk, you know, some of those were great books. Also, Kevin Hart's story was great too.

So like, I try to find inspiration and I find inspiration from other humans who I know are human, just like me. And I'm of the attitude that if they can do it, I can do it too. So that's why I like those kinds of books. I love it. And then one of the things I'd like to do right at the end is we might've not had enough time to dive into an issue, but you might have one last thought that you wanted to kind of go over with the audience out here. One last piece of advice, something to think about, you, but you might have one last thought that you wanted to kind of go over with the audience

out here. One last piece of advice, something to think about, something to get inspired by to take action. What would that last thing be? You know, I think the home services industry is changing and the old ways don't work anymore. So if they don't want to be left behind and they want to quote unquote future-proof their business, as some people have put it, well, they got to start thinking outside the box and thinking about what their marketing plan is going to look like, figuring out sales processes and procedures. But more importantly, if there's one thing, get some kind of information systems tool,

whether it's BuilderTrend or Co-Constructor or Salesforce, and really organize your business and bring it back to processes and procedures and be consistent with it. That's the most important. Doing the old way of just cowboying projects is not going to get you growth and it's just going to make you pull your hair out of your head. Go into it with a growth mentality. Really figure out how you're going to build this business as opposed to how you're going to just squeeze out of all that. I second that. Get yourself a system. And if there's a problem with an employee, there's a problem with the process.

Don't build the boxes around employees on your org chart. Make the box and make sure the people fit that box. Well, listen, Ferris, I want to get you back on here in a couple of months. I love you, man. This is great. And I love your perspective. I got a lot of good notes here. I'll sum up. Some of it is spend way more time with the customer. The more time you spend with the customer, the more you're eating out of

your competitor's time. When you don't prescribe before you diagnose, you want to peel back that onion, differentiate yourself. And I got so many good things. Think a lot more about profit when you're doing business. Don't think about as much as getting every job. Qualify your customers just like they qualify you. Start working with the better customers and charging more. You don't have to do as many jobs

if you charge a lot more and you work with people you enjoy being around. Your job will be a lot better. Thank you so much, Ferris. I really appreciate your time today. Oh, thanks for having me on the show,

man. I really had a, I had a great time chatting with this and yeah, I would love to come back. Let me know when. All right, my friend. Well, you guys,

you have a great day and a great weekend coming up and we'll touch base soon. My friend. Sounds good. All right. Thanks Ferris. Hey guys, I really appreciate you tuning into the podcast. Sounds good. how to buy the book. I poured two years of knowledge into this book and I had 12 contributors. Everybody from the COO at HomeAdvisor to the CEO of Valpak and of course, Ara, the CEO of ServiceTitan. It tells you how to have the right mindset and become a millionaire and think like

a millionaire. It goes into exactly how to turn on lead generation. Have those phones ringing off the hook for the customers that you want to be calling where you can make money and get great reviews. It also goes into simple things like how to attract A players. Listen, if you want a great apple pie, you need to buy good apples and you need to know where to buy those apples. And it also talks about simple things like knowing how to keep the score. You should have your financial check every week. You should know exactly what's coming in and out of your account. You should know when to cut advertising that's not working. Thank you.