The Home Service Expert Podcast - Generating $2M in Sales Through Thumbtack

Episode Date: August 16, 2018

Josh is the founder and CEO of Direct Movement Group, a multimillion-dollar custom home building and remodeling business based in Florida. He is the first contractor to reach millionaire status on online platform Thumbtack, which matches customers with local professionals for projects. In this episode, we talked about leadership, sales, networking...

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. Tommy Mello here with the Home Service Expert Podcast. I have Josh Downing

on the line. He launched his business in 2014 and already is doing $8 million this year. He's got all their credentials I spoke of earlier. And I can tell you something, this guy's actually made it and he works his butt off and he's doing it. He's out of Florida. So listen, how's your day going, Josh? And talk a little bit about where you came from so the audience can get to know you a little bit.

I had an opportunity to go work for a bigger construction development company in town. And when I got there, they immediately were just extremely disorganized, but they were making money hand over fist. And granted, take it back into 2011, not a lot of construction companies at that time were making money. Actually, I can tell you very, very few were. And if anybody was even in construction, they were second guessing themselves. But these guys had a system that was just able to make a ton of money due to the misfortune of people being overextended. And one of the things that I saw them doing was they were building new construction homes. They were buying and flipping homes.

They were crushing tax auctions. And I just saw them just absolutely crushing the market at times. And I thought to myself, why couldn't I do this? Why can't I just take a little bit of each thing that they got going on and do it for myself, but do it in my industry, specifically in remodeling and focus a lot of that towards what I started with DMG back in 2014. So I did. I was there for about six or eight months and they called me in the office and just said, hey, man, you know, we're no longer going to kind of try to run this big operation at the time that 80 something employees. And I was the director of operations. And at one point was

the vice president of construction. And now today they've got four people over there. They're still very profitable, but, you know, they thought they had this big mentality of like, oh, I need a bunch of employees. I want to build this big empire. And it just didn't work for them. So I took a lot of what I'm doing today from them. And they know that those guys are young entrepreneurs, very successful in their own mind. And I was able to be blessed to work underneath them and take what I knew from them and try to apply it to my own business today. And so obviously starting off in 2014 with 50 bucks in a bank account and a wife and a young son at the time committed to the process, so to speak, of how much time it takes to get your business off the ground. We started.

We started and I used only Thumbtack as my source of lead generation. I think at the time I was spending anywhere between two and five dollars a lead. So it was very low cost to market. And I milked those things. I mean, I milked them to death because I knew if I didn't turn that one lead that I got into a sale then we wouldn't need and so I was relentless I did everything that you could obviously sales is my strong suit so I focused hard on that made sure I got the sale once we got the sale I knew we were good because obviously my partner was handling construction and at time. It was literally almost one job at a time. So that catapulted us into close to $2 million in sales in our first year. And we're now in our third year, going to be just under shy of $8 million. Again, we don't spend any money on marketing.

We now use HomeAdvisor very strongly. We're part of their Elite 360 team. And that's been a huge recipe for our success is HomeAdvisor has got a great setup and system that they have there and they're constantly refining and they just bought Angie's List. So they're set up, they get a ton of leads that come through their system and we are now be able to be on the front line, so to speak, of getting those. So I like when leads come to me and I have to farm through them. I hate that I have to go out and find them. And early on in business, you'll find that you have to go out and find those leads

unless you want to spend a lot of money. And money isn't, it wasn't easy for me to come by when you start out in the business. So that's a little bit about myself and about our journey. There's a lot more I could dive into, but I know we've got a long session today on the podcast. So I wanted to keep it short. No, it's incredible.

I actually had Craig Smith on here. He's the president and the COO. And I love Craig Smith on here. He's the president and the COO. Love Craig. Love Craig. He's a brilliant guy. We were talking a lot about the 360. I actually got a meeting with him in about an hour to talk strictly about HomeAdvisor and what we're doing with them because I like the process, too, and I like the exclusivity.

So it makes sense. It does. So Thumbtack, I've used Thumbtack and I'd like to know a little bit more about that because I get a lot of people in the home service industry that don't necessarily, and I don't not believe in anything. I believe in any lead provider

because somebody's using them and somebody's making money with them. So the one thing I don't like about Thumbtack that I've failed with, and I want to hear your approach because this is why we're doing this for the people out there, is typically you got to give them a price. And I have a hard price giving a price for something I've never seen before. So if somebody says I got springs, I'm like general assumptions but tell me the best way to beat that

as far as from your mentality and how you've done so well on thumbtack yeah definitely so i could tell you that people that do get discouraged from using thumbtack just know that there is success obviously i was declared their thumbtack millionaire which is the first guy to reach a million dollars in sales on the platform obviously it's a little bit easier for me, probably compared to a guy that's selling springs or something like that, because obviously our average job cost is going to be bigger. But nevertheless, I still have the same roadblocks that you would have. And so what I would tell you is, first off, I don't ever give a price out, right? I never associate a price.

And the way in which I word my response is how I found out that each time I would get more and more success. And I've got all the analytics into every response that I had. And I had it all written down and they flew me out to Thumbtack headquarters. And I actually was just out there two days ago. And they were talking about some stuff they've got coming up for the future. And they're only going to continue to push the forefront for technology there with what they've got. But I would tell you, diving back into the specific analytics of how I responded is I never gave a price. And I always tailored my response to be as easy and accessible as I could. So walking through just in my mind of one of my responses, kitchen remodel, right? Kitchen remodel can run you anywhere from just replacing countertops,

three, four grand to complete kitchen remodel, 50, 60, upwards of $70,000. So there's no way I can associate a price. And I can tell you that anybody in any industry will tell you the same thing. Like you said, you've got 70 different springs. There's no way that you can hone that in. And so by offering a no price, they immediately, okay, well, what does it say on the body? Well, I immediately wanted to categorize myself in three ways. I wanted to immediately validate myself as a legit professional. Without them having to go anywhere else, I would pull that up and something to the

tune of, hey, thanks for coming to Thumbtack to look for that response. I'm out here in Jacksonville, Florida. Hopefully, I see your zip code is close to mine. I'd love to see if I could come out and take a look at your project. Before I do, I wanted to just let you know that I've been declared the Thumbtack Millionaire. And even before that, before I was that, I would say, hey, you know, here's some articles we've been featuring. Or hey, you know, if you're not validated in your new company, then I would switch it even more up. So now I probably would offer up, hey, I'll give you 50% off. Because at the end of the day, you've got to get in front of that customer. You've got to grab that review.

And once you grab those reviews, it's almost kind of like money in the bank. I saw that the more reviews I had, the more success I had at landing the job. So going back to, okay, I didn't put a price in there. I tried to immediately validate myself as, hey, I'm a Thumbtack Man. I've been featured on CNBC, Entrepreneur Magazine. Here's some articles. Read these. Then right after that, after they know that I'm legit, I would say, hey, look'm a Thumbtack Man. I've been featured on CNBC, Entrepreneur Magazine. Here's some articles. Read these. Then right after that, after they know that I'm legit, I would say,

hey, look, can you walk out and take a picture of your kitchen, bathroom, your leaf springs, your paint job, whatever it is, whatever profession that you're going after at Thumbtack. Take a picture. Send it to me. Let's talk over text and I can give you a rough number. That way, you don't have to worry about, oh, he's too high. Oh, he's too low. He's too shy. I was able to immediately move them into the next phase, which is give me your phone number because on Thumbtack, they do a great job of disguising all that until you are connected. You don't get that phone number. You don't get the email. You don't get any of their contact stuff. You're just left to a message on their platform. So once they would text me, hey, I just got your response. And at nine times out of 10, I would just get random pictures. They wouldn't send a name or a number or anything.

And I would just get four or five pictures of somebody's kitchen. And usually two, three days later, and I'm like, what the heck is this? And so I would drive back in and I'll say, yeah, okay, great. You know, is this this kitchen remodel that I saw on Thumbtack? Oh yeah, so sorry. My name's Kevin. You know, you sent me a thing a couple of days ago. Sure. Great, Kevin. Well, this kitchen, you know, what are you looking to do here? And I've started that conversation of, okay, now I know what he wants to do. Now I've seen his kitchen. I didn't even have to show up. I've spent zero money. And now I'm going to go ahead and toss out a number that makes sense for me and my company. So I'd say, hey, if you're looking to do cabinets, countertops, and move

a couple of rows around here, you're probably going to be around 30, 35. Does that sound like where you want to be financially? Oh, yeah. No, that's actually great. That's actually lower than what we thought. I usually don't ever get those, but that's right around where we wanted to be. And so if that's where they wanted to be, immediately I know that I've got a legit buyer, a legit job, and I need to get out on site and put this into an estimate form ASAP. Now, if somebody tosses me something back that says, hey, man, yeah, I was thinking I was going to get this kitchen done for $10,000. Man, I didn't spend no money.

I didn't waste no time. I didn't spend no gas. All I have is a couple text messages back and forth, a couple pictures, and now I know this guy is not legit. He doesn't have any realistic clue of what this is going to cost. So, no, you're not one of my buyers. You're not somebody I want to do business with. Immediately close that out, go to the next one. That cost me $7, a couple minutes of my time that out, go to the next one. That cost me seven bucks, a couple of minutes of my time, and I go to the next one. And I did that religiously until I was able to continue to farm about five or six different categories on there that I knew I

could make money. So I've got kitchen remodel, I've got bathroom remodel, I've got addition, garage addition, new construction, and really just five or six of those things. I can tell you that they do a good job of literally covering every aspect of any industry you're in. It doesn't mean you need to be in that. We know as professional entrepreneurs in our businesses, if we try to cover everything, we're going to suck at a lot of things. And the things that we are good at, we're not even going to be that good at anymore. But if we hone in and focus on two to three, maybe four or five areas within our business, strategically set up our responses, because that's another thing.

You can set up your responses per those leads. So say a bathroom comes in, I've got a specific bathroom quote that I send to people. Kitchen comes in, specific kitchen quote. And again, going back to, you can text me, you're not going to see a price for me, but I can guarantee you I'm going to be better than the competition. And here's why. They wouldn't feature me in these articles and these magazines if I didn't know I was doing something good here. So hopefully that kind of sums up kind of a little bit about Thumbtack and how I use it. I've had extreme success there. I continue to

have success there. And I know that it's only by process of refinement though. With anything, you know, when I first came out, I got lucky lucky got a little kitchen that i hit out the park for maybe six or seven thousand dollars and that was it i made a little bit of money i said man this site is legit but i didn't get another lead that i converted for probably another 40 or 50 leads but then i landed a family that's a billion dollar family uh here in the local area of jacksonville that they just so happened that their contractor was taking advantage of them and they they went to Thumbtack. And they came to Thumbtack and said, hey, we're looking for a contractor that's not just going to rip us off

because they know we have money. And I said, I'm here to give you a fair price and do a great job. We're great friends with them still to this day, and they're a huge family in town. And from that family alone, they referred us probably four or five other jobs. I mean, I saw time and time again very successful, rich people come through Thumbtack. I don't know how, if it's the SEO or whatever they're doing to get these people,

but very highly qualified, well-off families or single people or whatever you want to call it, come through and literally look for work. And it was some of the best clients that we had to date. I know that that 2.3 was not all Thumbtack. It was literally referrals from Thumbtack. So it was the affiliate leads that I've gotten from them.3 was not all thumbtack. It was literally referrals from thumbtack. So it was the affiliate leads that I've gotten from them. So what I've learned to do is you can only compete on three things.

And it sounds like you don't want to ever compete on price, although a lot of guys and gals listening to this do. You can only do three things. I got price. I got the quality, the warranty, all that stuff, quality of parts, quality of installation. And then I've got timeliness, right? Those are the main three, like how soon you're going to get done. So I put all those three things.

I'd always say, listen, I could get right out there today. I guarantee apples to apples to be the best price. The key word there is apples to apples. And I guarantee you that I carry a great product. You know, we're not cheap about our products. And I've responded to hundreds and hundreds and hundreds. And it's very rare that I get anything back. And that's why I was wondering, am I doing the right stuff?

Because it's like, okay, I want to go after this one. And then I go online and I read this stuff. And HomeAdvisor, I mean, listen, I'm getting 20 leads a day off of yelp and i don't even pay for the majority of the cities in yelp i'm getting double that for home advisor and then it's just kind of like i don't know and like i said i'm not talking discrediting it because people in the southeast in particular i've heard super success from thumbtack and i don't know and just like you know yelp's headquarters in uh scottsdale ari California, they're in San Francisco. So I know Yelp's bigger on the West Coast. Thumbtack's probably bigger on the East Coast. So yeah, it makes sense. I just, I think I'm going to revisit it, start attacking that again. I think just like HomeAdvisor, before they were service magic, then they got a lot better. So I'm going to work on that. So what is a good close ratio

for you? I mean, I'm at least getting a hold of a client with your response. Yeah. So I would tell you that right now, I'm trying to pull up some notes here because it's been a while since I've visited all my statistics, but bear with me. I know with anything, obviously there is refinement. There is a process to trial and error, right? And so when I first came out the gate, I knew one of the big issues for me was, okay, since I've been using Thumbtack in 2014 in March, I've responded to probably 211 requests. Out of those 211 requests, 26 of those people actually responded, which is a less than a 12% response rate. So, you know, one out of 10, I'm going to get a response with an average lead costing me anywhere

between seven to $15. That's nothing, nothing in the scheme of things from those responses though, that I got. So when someone actually responded, I've been hired 20 out of the 26 times. That's a 77% close rate with my average total job being hired of around 100K. My smallest job that I got was $6,000, which is that first kitchen I was telling you about. And my largest job was a $900,000 custom home build that we got. So with those leads coming in and out of our hands, the beauty about their platform is that you are in control of what you get. So if you pick and pay for leads and you don't get them, you're not doing a good enough job reading through the request. I truly believe that. I felt that there was times where I was just trigger happy and I

would just boom, boom, boom, boom, boom, seven or eight requests. Didn't even read them. Just thought, okay, this is in a zip code I want to be in. No, you cannot do that. You will get frustrated and you will end up losing not a lot of money because it's still very, very low cost entry per what they charge. It's just wasteful spending. And I know that if you read through and see there's notes, I always was a big proponent of looking at the other. So there would be a tab in the other that would say, okay, I've done kitchen remodels before. I'm looking for granite countertops. I'm looking for a white shaker. Got a budget of, you know, $30,000, $40,000. Somebody that spent more time in the notes than they did

in the overall body of the thumbtack request. That's how I knew, okay, this guy is serious. He's ready to make a move at least enough to get me or warrant a response. Or you can get a guy that just fills it out perfect. He's got every single thing in there, even attaches a couple pictures, which they now allow you to do. And it just was absolutely a slam dunk for me. And again, when you're talking about the direct leads I get from the Thumbtack-based people generating over $2.2 million in a two-year period, and then with the affiliates, which

means I did work for a Thumbtack customer and they referred me to somebody else, it was over $4 million in a two-year period that I got just from that. And when you're talking about $4 million in a two-year period, and all we've done is seven in our first two years, four out of the 7 million was strictly Thumbtack

and Thumbtack affiliates. I love it. Yeah, well, man, I don't know. Me and you teamed up. I think you'd have too much business to deal with. But yeah, I love it. You know, and I do Porch, Yelp, Angie's List, Home Advisor. I do every lead source.

I am a lead source. I sell leads for different companies. And I, you know, at the end of the day, I don't have a problem with leads. We do about, yeah, 4,000 to 5,000 calls a month, depending on the month and the time of year. So but it's such a smaller ticket. You know, if I was getting 60 grand and just making 20 percent on that. So that'd be 12 grand. That would be great. I mean, but, you know, our profit margin is probably higher, but much lower ticket.

So I want to kind of go on to the next thing, because you said some stuff that really stuck out for me is I come from a background where I was working all the time. And I see this with a lot of business owners. They work so hard in the business. You know, they're every day they wake up and they're answering phones and their life doesn't end. And I got to tell you, even today, I was talking to my girlfriend and she is just, we've been talking on a personal level about is work more important to me. And I don't have a family yet. I want to have kids. And I think that we struggle to keep that balance and it's never going to be perfectly balanced. But, you know, she's like, I never get 100 percent of your time because I know someone calls at eight.

You're going to take that call if it sounds like it's an emergency. And I want my time back. And how do you deal with that? You know, because you said your wife was she had your back. And I know that. But they're know that, but they need time. They need affection. So tell me about how you're able to overcome that. Yeah, I mean, that's obviously a tough journey.

At the beginning stages of the business, she was all in. She was excited. It was new. She knew that it was going to be a journey and a ride. And I can tell you that I did not do a good job at balancing that. My biggest challenge was overcoming my fear of failure. It was driven into me by my father who consistently just told me, hey, look, I'm always going to make more than you.

You're not going to ever make more than me. And, you know, that's just it. And you just need to accept that. And lo and behold, that just was the total thing that motivated me to literally never, ever, ever stop of pursuing somewhat of a perfection, my own business, anything I could, just that's the sole force and drive that I had. And because of that, it drove me to be very narrow-minded at times because I was like, I'm not going to fail. I would just literally put my head down and just dive into business. And, you know,

I know for over probably the first year to two years, man, I was a horrible husband, absolutely horrible husband. And I didn't spend any time with my wife or any time with my young kids. I was more focused on the future rather than the now. And I can tell you, it cost me. It cost me a family. I now am a single father. I just recently went through a divorce and it was just because she said, look, I can't, it's DMG and me, and there's no way for you to balance that. And I see that. I mean, it's horrible. I mean, it's an absolute horrible thing. And I went through a time of depression. I mean, I really did where I thought, wow, what's it all for if you're standing there alone at the end of the day?

But nevertheless, I'm a religious man, and so I tried to work through that as best as possible. And I'm now probably four or five months into where I need to be mindset-wise. I'm in a good place. And so now I'm back on the horse, so to speak. But for the last year, the balance was absolutely horrible. Knowing that I was going through that and knowing that I literally worked myself into a divorce in some of the choices I had made was horrible. And so I would tell anybody that's out there today that's listening that is going through that, that is either getting ready to open a business and start that, be mindful that there's opportunity everywhere and that you don't have to be so singularly focused on just making it.

I could have paced myself a little bit better, right? I mean, our successes today, people look at it and go, dude, how did you do that? How are you not even, you just eclipsed three years in September, which is two months ago, and you're already doing $8 million. You've got a business. You go in your own building. You've got trucks on the road. You guys are crushing it.

I went into supernova. If I had it all over to do it over again, I would want my family to be there with me. I would want my wife to still be by my side. And I would want it to probably take its toll at a lot slower pace. What's wrong with $ one million, right? And then one million to maybe one and a half to two million, really focus on growing the business internally, setting up the systems and processes, rather than just me blowing through everybody and sales, just pushing so much through the line that that's how we got to where we are today. And so I would

say that's probably has been and was my biggest challenge and I didn't overcome it. I mean, it, it, it won, but I can tell you, I'm standing here still today. You know, I am a happy man. I've got three children, uh, and an ex-wife, uh, you know, that's currently, um, slowly working to become one of my best friends. And, you know, it's just going to take time with anything. And that's been the, probably the biggest thing for me is knowing and understanding that it is not an overnight process. It's not a year long process. It's a lifetime long process of perfecting your craft and business and just making sure that when you fail, you learn, and then you immediately try to cover it back up with success of, okay, this is what we did wrong. This is how we correct it. Let's, let's now implement this right away or create the systems

and processes you need to overcome some of that. Cause again, I don't, I don't want to consistently be failing because then you're just going to get discouraged and you're probably going to want to quit. I mean, that's the thing that I know that when we have made a mistake, it's an easy correction or it's oops. Hey, I, no one knew this was going to come, you know, wow, we should have, we should have hedged ourselves. Well, no one knew that. And you're going to hit those kinds of aha moments. And I'm sure you've hit many of them, Tom, is that, you know, once you get to it, it's like, okay, let's write this down. Let's Memorex this and never let this happen again. But always be open to still learning and understanding that.

So that's kind of me in a nutshell, man. I know it's probably not the picture perfect for everybody out there that they're wanting to hear, but, you know, that's life. I mean, sometimes you make it and sometimes you don't. And unfortunately my business did cost me my relationship. Yeah. Well, I appreciate you sharing that with us. You know, it really kind of hits the nail on the head for what I was feeling. And, you know, I think the biggest problem when we go into relationships,

especially whether you go into a personal relationship and then a business relationship or vice versa, is really decide which way you're going to go with it and set expectations on both of those. I think the loved ones we're around, you've got to set expectations of what you're able to deliver them because you can't say I'm going to be here every Saturday and Sunday and I'll be home by 3 p.m. and I won't leave till nine and I'll make it to every one of the kids. I don't think a lot of business owners are able to create a lot of time for their family, but first they got to put in the hours. And secondly, you got to make those same adjustments for your business. I think you got to say, listen, guys, this is the time I need

with my kids and family. And she said, you know, my goal right now is a hundred million in 1919. It gives us, or 2019, I'm sorry. And she goes, well, what, what, what happens when you hit that number? She goes, is that going to really make you happy? I said, no, I'll pick a different goal, but she goes, what's our goals. And I go, well, Hmm. I don't know what it'd be happy, but it's a tough one,, I don't know, to be happy. But it's a tough one, man. You know, I just try to tell the people out there, you're absolutely right.

You got to think about it before you go in it. One of the things that stuck out for me, Josh, is you did get a lot of PR. You got the 40 under 40. You got the Thumbtack Millionaire. You've been featured in CNBC. You're the top 500 qualified remodelers in the magazine. You've got a lot of good things going.

And my question for you is, how are you able to get that PR? Because I think that that's helped you a lot and you've leveraged that. So what was some of the ways you were able to get all that? Dude, I have got a crazy formula for success. I'm hoping all your listeners out there are getting ready to write this down because it is long, but I'm going to summarize it extremely quick. I wrote one email. One email that I wrote was to the CEO of Thumbtack. It was short. It was sweet. The subject line was, thank you for making me a millionaire. In the body of that email, one night when I was laying up, probably just finished an argument with my then wife,

I mean, I was frustrated. I took to the airwaves and just said, Marco, I'm sure you probably get tons of hate email and all kinds of other things that talk about Thumbtack being a scam. But I'm here to tell you it's not. And I want to let you know that you have changed my life and I have been forever grateful for the platform that you've developed. I have used your platform to turn it into over a million dollars in sales and not just one, but four. Four million dollars in sales over the past two years. And I just want to say thank

you. I thank you. I've got one heck of a story to tell. And I'd love to talk to you more about it. If you if you ever wanted to take some time to call me, here's my number at the bottom. Thanks. Have a great day. That's it. I mean, I can tell you, I used to send emails like that all the time to random people, you know, the Mark Cubans of the world, the Mr. Wonderful, you know, hoping that they read it and say, you know what, this guy might have something here. And then that's all you need is just one chance. Right. And so two months later, Marco responds, says, man, I appreciate this email. When can I get you on a conference call to talk more about this? I was like, that is all I needed. Got in touch with his, with his team. They put us on

an eight minute conference call. I was nervous as all get out because you're talking about a guy that essentially is ahead of a billion-dollar app slash website that is aiming to be the Amazon of Home Services. And they're going after a lot of work out there. So I was, you know, I don't want to say anything wrong. I don't want to, like, stumble. I don't want to say a lot of uhs. So I have my little script written up. And he got on the phone and just said, hey, man, what's going on?

I said, not much. I appreciate you taking the call. And he said, man, dude, that's one heck of a story. I'm going to keep this real short and sweet, man. I'd love to fly you out and have you meet our entire office at the Thumbtack headquarters. I think this could be really inspirational. And then I think you're right, man. I think we could build a story around this.

And I want to put my PR team around it to try to get some stories out there about this. So when can you come out? I said, man, you just let me know. I'll make it happen. And that was it. That was literally it from coming out there to getting their PR team to do the first story, which is Entrepreneur Magazine. Entrepreneur Magazine to CNBC, CNBC to all the national home building recognition, back into local PR that leveraged out from local news stories.

All of that stemmed from one email. One email that somebody just said, really? That's all you did? Did you write one email? I said, hey, you don't know what you don't know. And so that guy, Marcos, the CEO of that company, had no clue there's a guy out there that generated a million dollars off his platform. And he needed to know about it, at least so I thought.

And so that's all it took, man. I love that story. I think that's going to be one of the highlights of this podcast because sometimes it can be a lot simpler than people think because you've gotten a lot of exposure because of it. And it's amazing. You said in one of the interviews that anything you're going to be successful in, it's going to take time. And I definitely agree with that. I was every guy that I've spoke with, they're usually in their 50s, you know, the really successful ones. And I'm not saying that we can't be successful a lot younger than that. But what

I'm saying is they've taken time and they've dedicated that time to the business. Let's talk about cash management because we get it in. And one of the things that I've learned to do is go get the cash before I need it. So I got the banks ready to go if I get the opportunity to buy out another business. But talk to me a little bit about when it comes to time is cash management and over time and making sure we're doing the right things with it. Okay. Yeah. So definitely.

So this was, it was really big for me. I can tell you that getting into business, a lot of people just told me, Oh, you shouldn't do it. Hey, I don't think you know what you're getting into construction at,

at, in 2014 is still at a, at a low. Don't do it. But nobody in my industry said, Hey, make sure you got some cash saved up. Make sure you

understand that trying to grow a business is going to require you to have a lot of free cash. Nobody told me that. And so getting into it, I had to leverage my personal credit to its highest extent. And literally at one point in time within the 2014, we started the business. By the time January 1 rolls around, we didn't have one credit card. All we did was literally put money in the bank, and we spent all of our debit cards. And I knew that that wasn't going to allow us to grow. So I was looking for credit cards. Well, at the time, my credit was decent, and I grabbed an American Express early on.

And we started out with a $15,000 limit. It was a gold card, no big deal. Three months go by. We're maxing it out, maxing it out, paying it off every month. By the summer of 15, our average spending balance on that Amex went to $200,000. $200,000 every month, literally buying, paying off. And you're talking about a guy that had never seen a credit card bill over 8,000. This was huge. I mean, I was like, holy cow, we are burning through cash so quickly. And all I'm getting is 30 days on this Amex to literally float this. I said,

if I'm going to in order to keep up with 2 million, you know, our first year was, you know, just under 2 million in sales. If I'm going to try to keep up with this, I'm going to need a bigger corridor. I'm going to need credit lines. Well, you can't get anything unless you have two years of business tax returns. You can't get anything unless you have two years of this, two years of that. Everything is two years. And I didn't have two years. So I had to get creative. And I spent time Googling and trying to research.

And I found a great company called Cabbage. That's with a K, K-A-B-B-A-G-E. And Cabbage literally single-handedly saved our business. It's a tech company that bases everything off of analytics of your credits and your debits and your accounts. And so you log in, you log in your PayPal, your personal account, your checking account, your savings account, your business account. You log in every single account you can. And then it literally scans them all. And from the scans that it takes, within less than 60 seconds, it gives you a pre-approved

cash advance number. And this is a business cash advance. And at the time when they were in, I was one of their first few customers. They had just started the platform. They were only doing six month loans, but they would do it up to $50,000, six months. And you would have to pay it off. You would, uh, you would then get a six month payment to pay it back. And they would charge you anywhere between one and one and a half percent per month that you had the money out. Well, fast forward to now, they now give up to $150,000. They loaned it up to 12 months, and it is still at that 1% and 1.5%. But now I was able to, instead of spending $200,000 on a hammock, I was able to pull out another additional $50,000 to $100,000 of cash

to get some of these bank jobs started, to get some of these bigger jobs started that I normally would have to front the money and get paid in the rears in order to make. So that was another huge obstacle that allowed us to overcome that and push more sales to the bottom line. So if I could be precise with anything in that area, I would say, look, ask a lot of questions when you're getting into any business, but know that almost every business is going to require cash. Unless you're selling trinkets off the back of your truck or something off of eBay or something that doesn't require a lot of cash, I would tell you almost every business that I've found,

people have said that that's been a big hurdle for them is understanding and predicting how to get that cash because you're a new company. No one wants to help you lend. Nobody wants to give you that. So I had to literally go out and find it through different sources online. Yeah, that's a great point. I agree with that wholeheartedly. You got to have the money and you really, I do think most companies, you're very fortunate because you're

in such a high ticket margin. The overall ticket is just so huge that you don't need the amount of leads. But most people think, yeah, I'm going to get into business. I'm going to hire five guys. And most people say, I'm going to go from being a worker. I know how to answer calls. I've done it before. I know how to book it. I'm going to dispatch my guys. I know I can handle their inventory because I worked at the warehouse for a little while. They think they're going to go from being a worker to a business owner. And I don't think it's that easy. I think you got to think about a lot more things, especially with technology, CRMs, Google, pay-per-click, all these advanced analytics. So, but no, you're a hundred percent, get the money first and then figure out what you're going to

go with it. So that's great advice. So I'm always, one of the biggest things I just, just was in a new employee onboarding, which I always do. One of the first ones I go up and show them a slideshow about where I started, where I've been, where I'm going. There was about 12 of them in this class, mostly CSRs. There was a couple of technicians. And I just told them, I said, sometimes I'll take a C player, a B player because I could find them and I could give them the leadership as well. Well, mostly my team, my team's amazing, but they give them the leadership they need to become A players. And sometimes that means finding their strengths and moving them to another department. And my call center manager hates me because I always

steal people from them and move them somewhere. But my point is, leadership goes a long way. And your employees really look up to you as a leader, as the business owner. Tell me a little bit about what's changed from when you first got started in 2014 to what some of those things that might have popped out to you and really been an aha moment as you've grown. I would tell you that I had a little bit of a leg up starting a smaller scale construction company back in 2009 and 2010 when it was very cutthroat. If you had a chance to make another 25 cents a foot, you took it because not only was everybody

struggling back then, tomorrow wasn't promised anything. So I saw that and I saw that there was absolutely no loyalty. Didn't really transcend to me much. I just thought, oh, that's just construction in a whole. But when I started my company in 14, one of the big things that I wanted to really leverage was a controlled environment. And I know that probably sounds crazy when you're talking about construction because everybody will tell you,

dude, you can't control anything. I get it. But I wanted to try to control 80% of the 100. And by that, I knew it started with the subs and the trades and our employees. I knew that if I could literally build a loyalty within us, that I could predict a better outcome. And so one thing that I started doing was, you know, when we first started, it was me and my partner and his brother. And that was it. And when everything we tried to do was subbed out or we tried to perform it in house with just Jason and his brother. And so you can imagine we

couldn't do a lot, obviously just being a two man team. But as we grew, I knew that the more subs we had, the more exposure we were, we had to not meeting deadlines because, you know, a sub is going to come in and he's going to try to do the best that he can. Obviously, you know, if you're dealing with subs that don't want to help you out, then y'all don't even know why they're your sub, but they'll do everything that they can, but they're still going to have car problems. They're still going to have father-in-law problems. They're still going to have whatever problems you can think of, kid problems. And so those are going to be directly related to your job because they're a sub, a painter, a drywaller, a framer. They're going

to have those problems and then that's going to make you look like the bad guy. So I started to come through and comb a loyalty, almost kind of a loyalty points program within my guys. And I said, look, if you want to be here for the long haul, I always will make sure that I sell enough to keep you busy. I don't know how many guys you have on staff. I don't know where you're looking to go, but I can tell you, nobody's going to sell better than me. No one's going to sell more than me. And any industry in any field, I don't know where you're looking to go, but I can tell you nobody's going to sell better than me. No one's going to sell more than me. In any industry, in any field, I don't care if you hand me a fork. I'm going to be the best fork salesman you've ever seen, guarantee it. And so from that, they were like, okay, bet.

This guy's going to be technically a salesman for us is kind of what I presented to them. And through that, I had a painter, a drywaller, an electrician, a small-time plumber, literally buy into that concept and the rest of that i took guys that had their own companies and literally conformed them into technically employees for us now granted if you if you look on paper they're not they're a subcontractor but these guys literally eat sleep and breathe dmg and so at the end of the day if dmg can't provide them work well then yeah i can pick up the phone and call and say, Hey, look, I've got three guys right now that used to do tile for a living, but now that they run jobs for me, they're working superintendents,

but they have their own 1099. They were their workers comp exempt, but they're loyal to us. There's about 27 of those guys today that are now on our role. And I can tell you that 80 to 85% of remodeling in Jacksonville, when we step on a job is going to be controlled by DMG. We only have 15% that we can't predict. And usually that 15% we can't predict is still the only problems that we have on that job site. Like today, I get two phone calls from two different people that painters didn't show up. Big crews, we couldn't paint it in-house ourselves. It was too big. And my guy had three of his main guys get sick.

I guess they all got food poisoning, and they just couldn't meet the deadline. So two people freaking out. Up until then, they loved us. Everything was perfect. We crushed the job. But yet, because those painters didn't show up, we looked like the bad guys. They're freaking out. It's the last trade in the house to make sure that the painter and the paint punch get done. And then we roll into cleaning the house and everything's done. So I am literally trying to control every aspect of that. If there is a paint company out there that

is listening right now in the Jacksonville area, give me a call. I will sign you up. You can be our next loyalty member and we'll literally build this thing together. I mean, literally, that's been the biggest key for me is I went I went in to these companies, owners sat down with them, had lunch with them early on, literally once or twice a week. I always paid for lunch. I always listened to everything that they had any issues or obstacles. I helped them in their business. And through that, they literally are now like diehard for me. And I, and I tell you that to say, you know, if I picked up the phone right now and said, hey, Tony, Alan, John, I need you over here at this site today. I need you to just drop every single guy that you have on this site right now.

They would do it. And that's huge in remodeling, huge to have that leg up, to know that you can count on those guys to get that stuff done for you right away. Yeah, that's incredible. I mean, I like the approach. I don't know that fits my model exactly, you know, because I'm sitting here contemplating because doing a 1099 employee gives you a lot of tax benefits and a lot of liability benefits. So I mean, and a lot of my competitors don't do it, but I just feel like it's really hard to pass that test. There's all these stuff we look at to say, are they a 1099 or not?

And I just, I can give up a lot of control. I could make them not come to meetings. I could not make them drive wrapped vehicles. But then I found it a lot harder to get good people because I talked to another business owner who's actually bigger than I am in the garage during the street. And he says his biggest problem is turnover. And I don't have that problem. So I have other problems. I have inventory problems. I mean, not like we're getting stole from like crazy, but I'll tell you, there's always something right. The call center is if you're in business and you say I'm problem free completely, it's probably time for you to get out because you're not,

you're not being real to yourself. I mean, even the biggest company down the road, Direct Energy, who owns the biggest home service company in the world, they can't take my leads right now, not until after Christmas because they're having call center problems. So I don't care how big you are or how small you are, you're always going to have issues. And always think about progress, not perfection. But you mentioned something in one of your interviews, you should be taking someone to lunch every day. You talked about that briefly just now when taking somebody to lunch. And the reason I talk about this is because I agree with you, Josh,

I always am networking always. That's one of the reasons I started this podcast is, is to network and get to know people and really, really start to learn more about the stuff. Maybe I don't know and get this to everybody. There's no reason. If you're listening to this, you're already helping yourself. You're one of the select few. I could tell everybody what to do. Doesn't mean they're going to go do it, but how do you pick who you're going to take to lunch? Tell me the process because, you know, there's a million networking events that we could both go to and we got to pick and choose wisely. Yeah, I would say, you know, there's a million networking events that we could both go to. And we got to pick and choose wisely.

Yeah, I would say, you know, that is a loaded question. And really, for all the listeners out there, you really got to categorize where you're at in business. And what I mean by that is if you're in the stages where you are getting ready to start a business, you are in the middle of a business, like year one, year two, or you're three years going up to five years, because we know that's the magical number, five years or more, you're kind of over the hill at that point. But once you categorize where you're at, I think that's where we know there's different stages for everything. So an infancy is kind of what I call business owners that are just getting started, and that's usually zero to 12 months. You're going to do any and everything

you can. You're a baby. You're going to go after every single person. You're going to get a lunch with anybody that's even going to give you a time of day. You're going to literally spend all of your time networking, social events, after work events, before work events, big wigs, any and everybody you can get in front of. I truly believe this was a huge success for me early on. People just getting to know me. And they're like, wow, this guy is definitely going to do something. He's going to, he's on a mission. I like what he's got going on.

I want to align myself with him. Boom. Next thing you know, we've got four or five people I've aligned myself with. And I take that and move into the next quarter and the next quarter. And I mean, I literally didn't say no to anything. And my wife at the time will tell you, she was like, you're always networking. And she looked at it as me having fun. You guys out there that are listening, no, those networking events are not always fun.

You have to sit there. You got to listen. You got to figure out what's going on. Yeah, you might get a couple free drinks. But at the end of the day, it's boring. Would you rather just be sitting there on your phone at your house, hanging out with your kids and doing nothing, literally mindlessly watching sports? Yes. So it is not always fun. And I know all the wives out there that are probably thinking, yeah, right. It is fun. It's not. And I can tell you, after you move out of infancy phase, I move into what I call the teenager phase, which is like 12 to 24.

This is where I became a little bit more selective with my meetings. I pulled back. Business is running good, right? Those early networking and meetings that I had with everybody I was taking to lunch is now starting to pay dividends. And I've got to learn how to manage the business now at this point because I had, you know, two to three million dollars coming through our business in a year that I had to focus on that. So my meetings became more selective. I still did a lot, still went to a lot of lunches, still did some after work, but it definitely slowed down. I was more selective in what I call the teenager phase, which is about 12 to 24 months. And then adolescence, that's where I'm at right now. Just crossed over the three-year mark, and that is adolescence to infinity.

Literally, you're never going to outgrow this phase. This is where you understand that you've just become a young adult in your business, and now you're trying to find your rhythm of really people that help you not only grow your business, but more so fine-tune your business. And now you're trying to find your rhythm of really people that help you not only grow your business, but more so fine tune your craft. You as an entrepreneur, you as a whole, that's where I'm really focusing on right now is people that have, that are, you know, 50, 60 years old that have been doing this for 30 or 40 years, ran through the crash, still survive, are thriving better than they ever have. Those are the people that I'm now trying to get lunches with. I'm trying to network with.

I'm trying to align myself. Tell me about how you manage cash flow. Tell me about how you built your team. Tell me about how you perfected your craft in a time where people were shutting down. How did you manage? How did you hold through? What are some of the things that you did? How are you hedging for the future?

What are some of the things you're doing right now that's not working? Those are all questions that I'm asking and I'm soaking it up as I go to lunches with them, but I'm being very specific. I can tell you time and time again that when you get to this phase in your adolescence and kind of growing forward, and Dom, I'm sure there's tons of people that are out there that are like, dude, I can't, you know, let me take you to lunch, man. You did 30 million in garage. How are you doing that? I gotta, I gotta tap into this. And you're like, you know what? That's probably not for me right now. Where I'm looking at is the guys that are already have been there and how they can benefit me. And so that's where my mindset switches from, you know, year one to year two to year three. And you have to be direct

with those meetings because now three years into the business, if you don't put attention to it, it'll die off. You'll grow yourself out of the business. If you don't got enough cash on hand with the jobs on site and the things that are going on, if you don't have literally your thumb on the pulse, within three or four weeks, this thing could crash. So you have literally got to monitor like an EKG that's literally going, that does not mean that you have to sit in front of the computer or sit at your office 24-7, 365. That's the beauty of technology. I have found that now I have more freedom to myself than I have ever had and we're bigger than we've ever been. So there's a correlation with putting in that time early on, sowing the seed,

making sure that you're literally doing the things that you need to do that are progressing your company up. And now I'm working on it, on the business instead of in the business where the beginning embassy stages, you are the business. There's no other way around it. You can automate it and set up systems and processes quick and easy for yourself. But for me, I just couldn't do that. I said, you know what? I want to understand and know every single thing about my business and I want to be the business. Then once I know it inside do that. I said, you know what? I want to understand and know every single thing about my business, and I want to be the business. Then once I know it inside and out, I can systemize and train people to run it for me. So hopefully I did a good job explaining that.

I know there's a lot of information in there, but at the end of the day, you just kind of want to take away those kind of three keys of like, you know, look, break it down between, you know, year one, year two, and year three, at least for me, in my own opinion. Obviously, if you've been out there doing it longer than, you know, maybe one, year two, and year three, at least for me, in my own opinion. Obviously, if you've been out there doing it longer, then, you know, maybe you can stretch those timelines. Yeah, no, I agree. And I like your little analogy, the first year, and you said you had fun. You know, it's kind of funny because networking could be fun, but it's a pain in the ass because anything,

just like golfing could be fun too. Become a professional golfer. You don't become one unless you're ready to hit balls all day, every day. So, you know, what seems like fun to some people because they barely get to do it, you know, fun to you might be going and playing with the kids. But if you're, you know, your ex-wife or whoever it might be, if you're a stay-at-home mom, for example, I could say, man, I wish I had to stay at home all day and do nothing. Yeah, right. They work their ass off. It's like a full-time job for them.

So I think we look at sometimes we don't really understand what the other person has going on, but we're all trying to do better here. And it's a hard balance. It is. And it's fun to talk to somebody that's kind of, like you said, you're in your adolescence or whatever you want to call it, and you've been successful. It's good to see the new things you're doing and i gotta tell you i've done a lot of things i've i've trained under hundreds of thousands of dollars spent training on sales personality profiling how to hire the best and um nothing's been stronger than this podcast of just talking to people and uh i gotta tell you it's incredible what you're working on i i usually you know I usually run out of time, so I kind of wanted to talk a little bit about, first, I got, well, two more questions. Number

one, give me a few books that I don't know if you're a big reader, but tell me a few books that really stuck out to you in the business world, then I'll ask you the other one after that. Man, I would tell you, I am not a big reader. I am more of an audio book guy. So even at that, I was actually just talking with one of my friends that I said, man, I feel like I'll get halfway into an audio book and I'll be riding in my car. And the next thing you know, I'll be jamming out or so what feel like I'm jamming out to an audio book is because I am like that excited about music.

Like I just love it. So I'm like, I know that I've now lost my mind, but I do love a book and it's right on my desk and I'm grabbing because I try to read it as often as possible. The Entrepreneur Mind by Kevin Johnson is a great book. That's one of the ones that I recently have read. And I know that there's another book out there that I absolutely love. It's by, It's the newest one by Jocko. He's a beast. I love his motivation. I love how he looks about life in general and just how he assesses every situation.

I actually don't have that book in front of me, but it's like the military mindset or something. Jocko Willenick in his newest book is Discipline Equals Freedom Field Manual. That is an amazing book. It is not boring. This dude is a monster. Uh, he was a Navy SEAL. I'm sure you guys have heard about him. Anybody that's listening, if you haven't, go Google him.

Watch his YouTube video that says, uh, it's, uh, Jocko Motivation Good. There is about two minutes and 20 seconds that if that doesn't motivate you to be an entrepreneur or just overcome adversity and trials when you get into situations, then you just need to go work a nine to five. I mean, let's just be realistic. I mean, I could watch that every single morning, have an energy drink, and just be ready to attack the day. He does a great job of that. He's been featured on Tim Ferriss and a ton of other podcasts as well. But I love kind of

everything he has about the discipline of how he approaches every single day. You know, he always talks about, oh, you know, people are motivated. Oh, bull crap. It's not motivation. It's the discipline behind whatever you're doing that's going to either push you to success or push you to fail. And if you don't have discipline, you're not going to have anything i don't want to hear about this motivation motivation comes and goes like that is what it is and so he's he's really good at that i've read a lot of his books and then i would tell you uh there's one other one i can't think of it's like a humongous book by tim ferris oh yeah i have that It's called something, the Titans, something of Titans. Yes. Okay. Tools of Titans.

Yes. Tools of Titans. That is like my Britannica, my dictionary, my go-to when I just need a couple hours just to kind of unwind. I love how it's got little inserts of just so many good things in there. That's kind of where I take away from a lot of that stuff because I have ADHD to the hardcore extreme. It is hard for me to focus anything longer than 15, 20 minutes realistically in one specific area. But these books, they really captivate me because they're short and then you go to the next story. You're short and go to the next story. So I wish I was a bigger reader. I could tell you it probably would advance me farther in life, but it's been one of my Achilles heels. And so I try to do audio books, and where I can't read, I try to make up for that with in-person type events, something like this, you know what I mean?

When you said, hey man, I want to get you on the podcast, I said, heck yes, this is where I pick up more information that any book will ever give you of just in-person, hey, how'd you do this, how'd you overcome this, Listening to people, talking ways through it, finding out solutions and problems that people have, creating new solutions because you hear somebody struggling with something. You're like, hey, man, what'd you think about this? Have you ever tried this? No, I haven't. Oh, that's a great idea. And they're hitting you with the same information. So I am a big proponent of just in-person meetings. I love those. Like I said, I was just a couple of days ago, I was out at Thumbtack headquarters, sitting table side with the CEO and the co-founder, their PR team. And

dude, I was out there for probably two, almost two or three hours. And it felt like 20 minutes. And that's only because of the conversations that we had were so impactful, so meaningful. I mean, we're so awesome that, you know, time flew. Next thing you know, it's Thumbtack happy hour and we're having drinks. And next thing you know, I'm out the door. And I got there at 2.30. Interesting. So let me tell you this. This book is called Blue Fishing. And it's by Steve Sims. And Steve Sims is this biker dude that if you want to go and do something, he's the guy you call. If you want to go shoot basketball with Michael Jordan or go golfing with Tiger Woods or go hang out at the, you know, Virgin Island with somebody famous, he makes anything and everything happen.

And this book is simple. It's got some stories. It's got some life lessons. It's short, sweet. I read it on the plane on a three-hour flight. Recommend that. And then another book, and listen, I don't get paid by these people, by the way. I just, I just, it's just, let me just make it small. Yeah. I don't know. Commission or nothing.

This book called brain fluence. It's a hundred ways to persuade and convince consumers with neural marketing. And I've listened to it already. I'm reading it right now again with a hard copy because I bought it. And super powerful stuff on how to market and how to sell. So the last thing I do, and like I said, I'll be in touch with you after this. We'll send an email and try to get some time to hang out. Yeah.

But I just wanted to see, you know, is there anything else you want to add to this? You know what? I mean, I would say depending on where you're at as a listener today in business, just know that it's not going to be easy. It is going to be a journey. And just understand the commitment level it's going to take, whether you're single, whether you're married, whether you have a girlfriend, whether you have a ton of cash, whether you have no cash, just know if it was easy, everybody would do it. But I can tell you, and I'm sure that Tom, you can address this as well, is that at the end of the day, when you're sitting at home, I don't feel like I worked today. But I know I did. And it comes from you just love what you do. And it just almost overtakes you, and it doesn't feel like work.

And that's when you know you've found your goal. I believe in life is when I came into DMG early on, and I had bounced around, gosh, I want to say 10, 15, maybe 20 different jobs from 18 to 28. In a 10-year span, I'd probably done that many jobs. I just was complacent. I knew within that through the first three months that this was going to be the shift for me to ride out. I never felt like I was working. Yeah, was it long? Yeah, was it hard? Yeah, did we deal with problems? Yeah, of course. I mean, and still to this day, you still deal with all these things. But at the end of the day, when you're able to capture that freedom and know that the only

person you have to answer to is yourself, whether you are going to be successful or not is all on you. I just love that feeling, man. And so I would just tell the readers and listeners out there that I don't want to ever paint a picture of like, man, this guy, you know, three years, $8 million in sales. Oh, he's crushing it. You know, got it done together. I lost a family to that too. I mean, so, you know, with everything there is sacrifice, but just know that at the end

of the day, it is worth it. For me, it is worth it. I love what I'm doing right now. I love the freedom that it gives me. And I love the people I get to meet. I mean, especially, you know, a guy like you, I had no clue who, who you were, um, literally a couple, a couple of weeks ago when you guys reached out, I Googled it and said, man, this guy, I'd love to align myself with. Heck yeah, let's do this podcast. So thank you for having me on, man. Thank you for reaching out to me. I'm just a popular nobody is what I always tell everybody that's just trying to make his way.

Well, I'm super glad you joined. We're going to get you back on. Definitely check out, check you out next year. I'm going to come out and visit with you because I'll be there and really appreciate the time you took and see what we can do down the line here. Sounds good, Tom. I appreciate it. I'll be in touch.

Thanks, Josh. Yes, sir. All right. Bye-bye. This was the Home Service Expert podcast. Now listen up. Do you want to dominate your market, triple the profit you make without working those long 12-hour days, seven days a week?

If the answer is yes, my team and I are opening up some new time slots to help you solve your biggest business challenge. Just go to homeserviceexpert.com forward slash discovery and book a free 30-minute call with our team today. I will repeat that, homeserviceexpert.com forward slash discovery and book your free call today.