The Home Service Expert Podcast - Making The Most of Your Acquired Business' Assets to Maximize Your Investment

Episode Date: November 19, 2021

Tommy Mello is the author of Home Service Millionaire and the founder of A1 Garage Doors, a $50 million-plus home service business with over 200 employees in 9 states. Through HomeServiceMillionaire.com and the Home Service Expert podcast, Tommy shares his experience and insights to help fellow entrepreneurs scale their businesses.   In this special episode of the Home Service Millionaire podcast, host and A1 Garage Doors owner Tommy Mello answers your biggest questions about marketing campaigns and setting customer expectations, how to set up GMBs correctly, justifying pricing with customers, business partnerships, getting credit for your business...

you really got to get to the root of what the person loves and what they're passionate about. And there's no one size fits all. It's got to be a win-win and really find out, you know, I talked about this, but we're hiring a dream manager, someone that helps every single person accomplish their dreams. And if you look at a business owner, they're the same, they're human beings, help them fulfill their dreams and you'll be loved and you'll live a fulfilled life and you'll be happy.

That's all I can tell you. 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. Hola. This is one of the favorite things I get to do all week. So hopefully you learned something today. Let's get going here. This is the Q&A.

It just seems like God is looking out because the people I'm meeting all of a sudden, it's just, I don't know. Things are just falling into place left and right. We just switched accounting softwares. That's going amazing. Bought the building next to us, building a new training center. Just having so much fun. This is what life's all about, man. I wouldn't trade anything for the world right now. Good things are happening. We just passed 100 people coming to the event, which is awesome. I expect a lot more to come in last minute. Really working hard to get this into a full house. We can hold 250 people at Vertical Track. We're building out the website, building these relationships up and

ready to deliver tons and tons of value. What's up, Brian? So yeah, dude, it's going to be freaking ridiculous. It's game changing. And we plan on hundreds and hundreds of companies joining and a lot of partnerships to be built. And it just so happens that I just got introduced to a guy that used to run one of the largest buyers group in the country. And he's got an NDA, but not in the garage door industry. So I love not having to reinvent the wheel. It's just so

much fun. So this is going to be huge. And no one's really pulled it off yet. There was a company by Jim Abrams called Clockwork and a bunch of other things. And Terry was involved. And Al Arora used to work there. And Kenny Chapman knows all about this stuff. It's just crazy. And we think it's going to be something really, really special that no one else has so far. And this industry is just begging for something like this.

It's this new group of guys that we're training. There's over 20 of them. And I did my orientation yesterday for three hours, and it was the coolest thing that's ever happened. It was like, I can't even explain it, guys. It was the best quality. Every single one of these guys is just amazing, amazing people. We're building a lot of new reporting on a bunch of stuff. I'm building a whole new rehash system to save jobs and service and sales. I'm building an upsells process through text messaging, video messaging, internal texting to the whole sales team. I hired a guy named Jonathan Wistman. If you guys get a chance, read the book, The Sales Boss by Jonathan

Wistman, a freaking ninja. Yearly updates for tune-ups. I'm reactivating our list. We're working on geofencing. I'm going to geofence the largest call centers in the country and still the best agents from every call center around the country. We're getting huge into TikTok for recruiting. Things are just, it's fun. It's very, very fun what we're working on. So feel free to ask some questions. Travis Batey, B-A-T-E-Y. Travis, how are you? How long into tracking a marketing campaign do you declare it to meet or exceed expectations and start to double down on it? Well, there's what's called direct response campaigns. And then there's other campaigns that you're not going to get for about six months,

like TV, radio, or billboards. But what I like to do is find the best person in the country at something with guaranteed results. You know, if you do this every day, all day, you tend to be able to estimate where you're going to be in a campaign. So I like to A-B test. One of the things with ValPAC that we did, I renegotiated the rates because we're such big buyers of ValPAC. And then what I did is I changed every single ad, every 10,000 homes to be local to that area. So we put in like a local, maybe a sign there, a city sign or, you know, something that's big on that block. And I put Scottsdale's best or even the neighborhood name and our conversion

rate up went up dramatically. So just my main thing I want you to understand here is it's not always about the ROI. It's about AB testing, looking at ticket averages, understanding who your demographic is, advertising to the right avatar. And here's the deal. Some marketing makes your Google spike. So if you're not paying attention to the right things, for example, Ken Goodrich said in one of my podcasts, if you guys haven't listened to it, you should. Ken said, you see, when I started doing TV, radio billboards and wrapping my trucks and creating a unified brand, what happened is my click-through rate went from like 3% to 67%. So if you're not looking at the right things, it's really hard. You've got to be really, really good at marketing to be able to know if it's working.

Because sometimes one plus one equals five in marketing. Let's see. How many people do you have in your call center right now? I think Angela, she's got six more. It's in the mid thirties and it's absolutely phenomenal. I mean, our call center kills it. I have a whole big manual that she gives out. She gives sunglasses. She gives all kinds of cool stuff. I don't know how anybody's going to be able to keep up in the industry because we're innovating every single minute it's like it's starting to move faster than i can even keep up with there's so many projects going on right now and it's so much fun there's like 20 videos that got done today and i don't even know what they are yet

okay so let's go through some other questions here can you show us your orange chart we're building a new six-month orange chart i don't have it but it's split up everything leads up to me but there's departments that actually run themselves this is the playbook the csr playbook that angela made it's literally literally crazy badass like each person gets this get glasses. They get all kinds of cool things. So, here's some roleplay activities here. I mean, this thing, just she put this whole thing together.

I mean, the resources that's being created here is just ridiculous. We have been loving Tranual. Tranual is awesome. Are you guys doing YouTube SE? What is YouTube SE? I don't know if we are. I don't think we are.

Travis has got another question. Being my first year and in a small market, I found a way to strategically place a second GMB for cheap in a nearby much larger city that is in my coverage area. How much do you think a second GMB will help our marketing company maximize our SEO? Also, would it be frowned upon to send every past customer a review to the GMB to build reviews quicker? I'm a big fan of multiple GMBs, but what I would do is make sure it's set up as a showroom. Make it into a showroom. That way, if you ever have any issues with them overlapping, you can prove it. Make sure you got videos. make sure you got business cards, make sure you got cars registered to that, make sure you got appliance bills, everything to that second one. Usually you want to make it at

least one hour away from the other one. A way to get around that is to buy companies. And then you could have 10 in one area. If you've got 10 different companies, a great way to get reviews. Yes. Ask past customers, neighbors, friends, family, whatever you do for a living. The first thing I would do is go to a home show and have a soft opening of that location and do everything at extremely discounted prices and not just get one review on Google, try to get one on Yelp, try to get one on next door, try to get one on everything. Okay. You want to get a Facebook, you want to get a testimony, you want to get a yard sign, but yeah, I mean, past customers is a great way to do it incentivize them

you're not supposed to pay people for reviews but my trick around that is i want to pay you and i want to give you a gift card for your time i'm not asking you for a five star i want you to tell us how we did typically i know my happy customers so that's easy let's see can you give me some advice on the garage door maintenance program i have, but it's very hard to get customers. Well, any maintenance program should have a few things. Number one, you get a discount on future work. Number two, you go out and you service the door every single year. Number three is you make these people got to be non-commissionable.

That's one thing my buddy Keegan taught me is he goes, you can't charge commission on this stuff. You're trying to create a great environment. Number four is when you're finishing up the job, the last 10 minutes, you show them, you take the case off the opener. You fricking really take your time. And you say, listen, we're going to blow out the garage. We're going to clean everything. You show them the sticker. You run the door three times. You show them their manual, put their shield number in it. You show them how you hand tighten everything. You pull out, hopefully you got a magnetic level. You show it on the rails. You tell them what'll happen if something loosens up. You tell them that you need to do this every year. You take the case

off the opener. You show them the RPM sensor. You lubricate the gear. You do the worm gear. You unplug the unit, obviously. You spend a lot of time teaching the client how to do it themselves and say, listen, if you can't do this every year, we've got a program for you. I don't know if you'd be interested, but you're going to need a new door in the next five years. We're going to give you a discount because you're 15% off because you're a member. This program really pays for itself because I'm going to give you a hundred dollars off today's work. Now, listen, if you cancel within 10 months, because it's 10 bucks a month, we're going to charge back your card. And there's a contract that we put that in. But literally the whole goal of a membership is to build value, make the door

safe. And then eventually you're going to replace the door. And that's when you make the money. And here's the thing. These people are not price shopping. They're not going to any other companies. So that's some good advice. Hopefully that makes sense and resonates. If you're like my buddy, Ryan Davis here, he does a lot of epoxy jobs and a lot of flooring, polyaspartous, whatever. And the cool thing is, is I'm getting into that stuff. And so members, I'm able to sell more things to, and then when they sell their house, I can usually get the new person to buy into it if the person loves it. And then I get the next house. So there's so many cool things about memberships. I know companies that do $10

million a year in HVAC and spend $0 in marketing because they got that many memberships. I went out to Leland's company, Service Champions. He kills it. Kent Goodrich kills it. Anybody that's doing Josh Campbell kills it. Everybody I know that does an amazing job. In fact, if you're smart, you'd buy the book, The Home Service Millionaire, and you'd look at Jamie wrote a whole section about service agreements in here, Jamie DeMonaco and a freaking genius. And we talk about service agreements in here. So that's some advice. Let's see here. How did you transition from your cell phone as your only line to an 800 number?

So the deal is I go for a vanity number. Anytime you can get 800 versus 833 or 844, I got 844 A1 garage, but I use local numbers now. All the new vehicles have local numbers and service time gives me free numbers that are tracking. And I took advantage and I've got 4,400 now, but what you want to do quite frankly, is let everybody know in your contact list that you got a new cell phone number and forward that work phone number. That's what I would do. What an IVR is, it's press one for this, press two for this. I think you should get a new cell phone. That's my personal opinion.

You're still going to be getting a lot of BS calls. But all you do is you get the CSR to say, hey, listen, let me text you real quick his new number and just do me a favor and just put this in as the business number if you ever need anything, we're available. That's probably easier. In my opinion, I would just send a text message out. What I would probably do is I'd go on Google, log into my account, export everything, and then I'd go into a thing that text messages out and do a mass text. If you could do a mass text on your phone, just let everybody know to update it and use that now as a business line.

How do you build up business credit so you can max out your personal card? Here's the deal. I'm gonna give you guys a buddy of mine's number. If you ever need any help with anything building business credit, you take this number down, you text message this guy, please.

He's a busy guy. I don't know if he's going to like me giving out his number, but hopefully this helps him. His name's Jim Piccolo. 480-596-1111. And he'll teach you Duns and Bradstreet. What you do is you want to build up your business credit by using, first of all, a company card. Secondly, you want to get as many references to the using, first of all, a company card. Secondly, you want to get as many references to the bank as possible. So all your vendors that you've used, you want to get your card limits raised right now, because right now is a great time to get them raised. And you should have a plan for points. I do my payroll on a credit card. It costs me 2%. I use it for American Express. And what's really, really cool is it transfers over to Charles Schwab.

I buy a thing called Grayscale, which is a Bitcoin investment fund. And I'm up $400,000 in the last year. So I don't necessarily advise using payroll because you lose 2%, but the way taxes work, there's some advantageous things to do. So I could have a whole meeting right now all about credit card usage. I really like the Sparks card because you get 2% back cash. There's certain fees

and certain things that work better. I always thought about an app for your phone that actually you just, you put where you're at, Applebee's or what gas station, and it tells you what card to use. Because so much food, you get 4% back, some travel.

I think that would be a great app if any of you guys out there are app builders. So that's one way. So Josh said, I bought a company for the phone number, which will bring in work as it occurs. Not sure what to do with their customer list, email base and mail. Well, you get with the old owner first and here's what you do. You write a letter and it's from the old owner. And then you write a little section of it. And what I would use is there's great companies out there right now. Rick Elmore's on here. Rick's great with Simply Noted.

Dave Carroll does this too. They've got these pens with CNC machines that write handwritten letters. And it's right around a buck, 52 bucks. But it's a handwritten envelope. So it comes in and it gets open. And it says, hey, just to let you know. And you put parentheses around certain things like the date you were out there last. And it puts their first name with the last date you were out there. And you say, we'd love to come service your garage again. And you only hit these in certain areas at a

certain time. And you know, you can get to the job. You don't necessarily want to write the letter to everybody. And then I get something called Schedule Engine. And I've got good buddies over there. We were the first company, first home service company on Schedule Engine. And I would set it up in a way that it's called reactivating the list. And a buddy of mine, he's really, really good at reactivating lists. He's done some stuff for me. JodyUnderHill at gmail.com, I think is his email. If that doesn't work, hit me up. I just put it in the thing. JodyUnderHill at gmail.com. And Jerry said, do a video with the old owner. I've created a QR code. I made a really, really cool

card that went out to 1500 companies with a QR code on it that you can pull up the video. So ultimately, your goal is to reactivate that list. There's a lot of other things you need to be thinking about, but get all the Jody. I'll tell you how to do it. And also what else would I do? Send out the letter. I'd probably hire an outbound call center team to say, Hey, listen, your warranty is coming up on this date. We'll come out for 29 bucks. We'll check everything out for you, lubricated, just tighten everything. That's one of the things I would do. One of the other things I would do is I'm buying another company right now.

I'm going to get him another Google My Business page an hour away. I'm going to go to his past clients and get more reviews. I'm going to make sure his brand is on point. I'm going to reactivate his list. And then I'm going to freaking bombard crazy his SEO. I'm going to top grade and put a dashboard on for every one of his employees and make sure he's got the right CSRs, dispatchers, and technicians running each call. I'm going to teach them how to go from service to sales because not a lot of companies know how to do that. But he's already doing over 15%. So he's's gonna do around 8 million this year and he's just i'm a big

fan of this guy i can't really go into detail on who it is till it gets done but he's an amazing guy and i think i could take the business and most likely double it and get the margin over 25 so um that's cool luis felipe de cu Carmona said, can you please recommend a good PPC program? Thanks. Give me one second here, Luis. I'm going to give you a buddy of mine that quite honestly, he's getting too busy for me.

Forrest, F-O-R-R-E-S-T, at Forrest, F-O-R-R-E-S-T, Perry, P-E-R-R-Y.com. You know, they do a great job. There's a couple other companies that do an amazing job. I look for somebody that cares about the whole thing when they're doing pay-per-click. They care about your conversion rate. They care about how quick you answer your phones. They care about if your capacity is overrun.

You know, he does great for me in garage doors. There's a couple companies that understand capacity. I got to be hesitant. Search know, he does great for me in garage doors. There's a couple of companies that understand capacity. I got to be hesitant. Search schemes does a good job. I'm a little bit hesitant of people that are charging you a percentage of what they're spending because they're motivated to spend more of your money. And you just want to be able to track everything. I want a good report and somebody that communicates well.

That's the secret for a good pay-per-click. But anybody that knows pay-per-click knows LSA ads are much more effective and a sponsored gmb google my business so until don't do as much bbc until you're maxing out your lsa as local service ads for google it's a google guarantee until you're doing the sponsored gmb man i know a lot of i didn't realize how much crap i know do you do Facebook advertising in-house? I can tell you we almost have a specialist for everything, and then we kind of oversee it and come up with more content and A-B test things. But I don't do everything in-house, no.

I've got different companies that do different things for different types of Facebook ads. Let's see. Henry Kirsch said your online forum for A1 is really good do you get garbage through your form still i have an online forum and seem to continue to get spam there's spam blockers we get some spam but but quite honestly it's easy to identify i think that if you talk to a company like schedule engine they'll give you some tips on how to avoid spam. I'm good friends with the owner. So anything I ask him, he's pretty much done a good job of getting them lots and lots of clients. And we've come up with a lot of good ideas together. So great company. You definitely

want to get to know those guys. So we're creating a pretty advanced IVR that's trying to get the person to send out a small text code. And it's a really easy one to remember. And it costs a thousand bucks a month, but we're trying to get them to text this to go to the schedule engine. Because if I can get half of the calls to book online, those are the guys that just, the one thing you want to look at is if your drop-off rate, I don't want to lose a client because quite honestly, the call center doesn't cost a ton of money. It costs me right around $8 per book to call, eight or nine bucks. So I don't want to ever have scheduling to where it's packed, capacity packed, but it makes it easier to scale when you've got things in order like that. PPC management should be a monthly fee, Jerry said. Jerry's a really,

really smart guy that knows his shit. So to him daniel lukin luchen how do you deal with people who look at 47 igniter and can't justify a 400 invoice discount so they don't leave a bad review i can't continue like this especially after getting house call pro and outsourcing the phone service what do i do one of my buddies sean came into town the other day and he told me this story. And I think you guys are really, really, really going to love this story. So it's story time. So pay attention. He had an electrical engineer that was on a wheelchair, older fella, and he was out there selling. And he said, your capacitor, capacitor basically stores the energy to get the,

the motor going. And he said, before you talk to me about a capacitor, the last guy charged me $300 for one. And I went online because I'm an electrical engineer, and I found the part for $10. And he goes, well, let me ask you something, sir. Kind of rolled his eyes. He goes, what? Well, he goes, have you ever ate at, like, you know, Denny's or Applebee's or Chili's? And he goes, yeah. What's your point?

He goes, have you ever paid? What is it? Like 15 bucks for like, you know, burger and fries and a soft drink. He goes, yeah. Yeah. About 15 bucks. Okay. He goes, I'll play your game.

What's so big? He goes, I thought you said you didn't like to get ripped off. He goes, those patties don't cost more than a buck. He goes, the buns are almost't cost more than a buck. He goes, the buns are almost, they're less than 10 cents. The lettuce, tomatoes at the bulk rates they buy at are nothing. The fries, I mean, the soda is almost free. He goes, so you don't have more than two bucks into that, but yet you're paying 15.

You're paying seven, eight times what it costs because they have air conditioning in there. They have good menus. They've got staff with insurance. They have phones. They have a point of sale system. They've got to pay taxes. They've got to hire a CPA. You went in there because you wanted a meal that was cooked for you.

You know, listen, I used to make pizzas at Rookie's Clubhouse and we had this big machine and it was just a big mixer. And we put the flour in, we put in some other crap and some water and, you know, we'd make the dough from scratch. That dough didn't cost hardly anything. And then we take it with flour, we pat it out in the thing, we put a little sauce on there, we put some little bit of cheese, and then we put some pepperonis and a little more cheese. And then that thing, and then we sell it for 20 bucks. It costs less than a dollar. And you know, we had to pay for the box though. And we had to pay for the manpower. We had a

wood fired oven that costs money. And then we had to have lights for electricity. And of course, now people, they want insurance. And of course, employees want PTO. And now there's new tax laws coming out and tax laws are getting aggressive. And of course, we pay for fuel to get out here. And of course, you understand that we pay for the tools and they've got $3,500 worth of tools. They've got the torsion. People have gotten hurt and we've got to pay for unemployment. We also have a thing called workers' comp, and we've had four issues with that. And I can show you some of their instances that the truck payments alone are $1,000 a month. And now we have a wrap truck because we want to make sure, plus we do drug checks and background checks. And when you really go through these things, the customer, so here's the great thing about this story. And he goes,

listen, we don't pay $10 for a capacitor. We pay six and we don't charge 300. We charge 450. He goes, but that's the one thing. We also warranty our work and we diagnose it and we take it apart and we've got a sticker we've been around the business a long time we've got great reviews we're on the bbb we're licensed contractors and the guy goes you know what do it and then you know what he said i don't know what he did i don't know air conditioning but they sold 3800 of repiping and redoing some of the AC stuff. And he said, my margin on that is monster. And the guy said, no problem

because he took the time to educate the client. And if you take the time and you educate and you show them that we've got cell phone bills, we've got computers, we're available on Christmas day, Sundays, on every holiday, on the weekend, we've got a backup person that can run a call at 1am. And unfortunately, these guys don't work for free. So sir, you surely understand. And a lot of times, homeowners are business owners. You know, only 4% of the world are D type personalities,

but it's much higher as homeowners, because a lot of homeowners seem to be D-type personalities. And they might be in a hurry, but they understand things. So hopefully that resonates with you guys and you remember that. I bought the domain of a local competitor that went out of business and has been around since the 50s. Now what? Redirect to my website. Just one page of this is under construction. For immediate help, what do you think about buying a company name and doing a makeover like ken goodrich did thanks

buddy uh well first of all i'd like to see how much traffic they get all i would do is is say look we bought the company i literally a one time a long time ago i have different names for gmb's i had spartan garage door and um for michigan state in Lansing. No one cared that I showed up as A1 Garage Doors. If they're looking for that particular company, though, you just say, listen, we merged with another company, and hopefully you got a good CRM that pops up as that company name. What I would do is I'd rebuild their website and make it badass and do a bunch of SEO, and I'd make sure if it's been around since the 50s

is I try to generate lots and lots and lots of leads. I would buy the business name and I would do the DBA. I wouldn't have the shirts. I'd say, we're going to come fulfill it from a one, but yeah, absolutely, dude. I think that's great. We're trying to buy a couple of whole numbers right now. One of the things I found the biggest manufacturer of garage doors in Arizona. I'm not going to say their name because other people are going to steal this idea. And I made a whole page about this garage door type. And I took pictures and made it. And for 10 years, I got all the calls because they went out of business. So anytime you could do anything like that, it's almost like a little hack. It's a freaking lead

funnel is what it is. It's amazing. Jerry said, soft drink costs nine cents. You sell for $2.75. You know, here's the deal. People don't know this, but Starbucks changed the game. There's something called the Starbucks effect. So check this out. This is the coolest thing in the world. Starbucks came out and started charging $5 for a cup of coffee. Diners used to give coffee away for free. You come in, you get a million, as much coffee as you want because coffee is cheap. Well, the Starbucks effect made every other single brewing company more money. Everybody started getting busier because of Starbucks. I'm hoping that in the home service space, when I'm dead, they call it the A1 effect

or the mellow effect. It's all the home service companies start charging and making sure guys can make six figures and making sure they're homeowners and they got good credit scores and they can go on vacations with their family and they can put their kids in private school. And the A1 effect takes place all over the industry. That's what I hope. Power washing bros. Mitch, Mitch, Mitch. I love you, Mitch.

When using employee manuals do you stick to the enforcement of those manuals to a t every time if there's an issue that's a tough one i have a hard time firing somebody unless it's for a mistake you know if i say no tattoos on your knuckles and you go out and you sign a thing and you were very clear we read the manuals together and you get tattoos on your knuckles and you're a great employee i mean you kind of got to stay strict whatever you give leniency to to one person you got to do it to the next so you can't do it case by case when you're small you might be able to get away with this stuff you're asking for a lawsuit and it's an hr nightmare i mean it really depends on the situation there's certain things if you light you you're still you're going to get fired but if you make mistakes i don't

necessarily agree you need to get fired but we do a lot of write-ups man we do a lot a lot of write-ups we got a whole write-up form and and we call it corrective action because that's what told us to call it and we got a whole freaking notebook full of how we do it. And yeah, I stick to the manuals pretty heavily. And one of the things we talked about the other day is the manuals are not getting followed as close as they should be. And I think businesses go like this.

It's peaks and valleys. And I definitely think you should stick to the manuals and read them at least a couple of pages each week with each department. Let's see. Cody Johnson, my man. How many fault wrecks for your techs before they are fired? I assume it depends on if they are an A player or a C player.

So we track tech error reports in this amazing thing we built called the tech scorecard. And literally those jobs affect their pay dramatically. Cause I got sick of saying, yes, we're a commission shop. We're not commissioned. We're performance. We look at your callbacks. We look at your yard signs. We look at if you're not on a mojo call that counts against you. I don't really need to fire people. We micromanage the shit out of them until they quit or they get better.

That's what my advice would be. Let's see here. Hey, Tommy, just wanted to let you know that I absolutely enjoy your podcast and I have read your book three times. Thank you, Chris, Ravi. I'm getting ready to launch my business and have heard you say many times that you lease your vans. Is that a better option than buying them? I lease to own through enterprise. Lease to own. So at the end of five years, I own them.

Some of them at the end of 40 years, I own them. The process is I do what's called accelerated depreciation. So I get the entire write-off because you're allowed to do that on lease to own and then when after four to five years the wraps are looking like shit maybe three years and then i've got a full-time two people and there's a third one that actually works for enterprise that actually keeps track of the miles on the vehicles and then we swap the guys driving long distances we want to keep the miles around the same and then the plan is let's say the truck is fifty thousand dollars and they'll also pay then the plan is, let's say the truck is $50,000. And they'll also pay for the outfit. They'll pay for all the internal cabinets and they'll pay for the wrap. Now I own the wrap company, which is awesome because I get like four grand for the

wrap and we get to pocket that money. And then I get to pay through it through financing, which I pay more for it. But that gets to go into my EBITbida which is freaking awesome if it's over 60 so think about that uh i don't want to explain that in a detail because it's a pain in the ass but just try to comprehend here let's say after three years i want to turn in the van it's a hundred thousand it's warranted up to a hundred thousand miles i hit a hundred thousand miles the whole morale of the company changes they get a new van the guys aren't breaking down. The dispatchers aren't pissed. They don't see these shitty vans driving on the road. It's got a brand new wrap. It runs great. There's no issues. And here's the deal. I paid 50 grand for it. It's worth 20 grand. Enterprise sells it. They might get 16 grand because they're not going to get a retail price.

They're going to get a wholesale price. They're going to put that towards your next van. Now the deal is, since I depreciated all of it, there might be a point that I can't do as much depreciation on the next one, unless I go through the whole cycle of the depreciation, which would be the five years. But this is something you should talk to a CPA about, but I definitely recommend leasing the home. It's the only thing I own money on other than real estate. So that was that answer. Let's see here. How do you measure the financials of a truck? Do they have their own P&L and cashflow statement? That's not something to track. We don't do separate financials per vehicle. We do obviously per tech. We don't do financial statements. We treat it like it's its own warehouse, but I don't want 150 different P&Ls.

That doesn't make much sense to me. So you got to treat it as its own warehouse for inventory. But the truck is only a piece of it. You also have sales. You also have marketing. If you're looking at your cogs, cost of goods sold, the van's only a piece of it. Look, you got an iPad, you got other things. So I don't know why you would put that into its own P&L or cashflow statement. There might be a methodology behind

that that I don't know, but yeah. Let's see here. Thinking of selling a business, but in another podcast, you mentioned partnering with a local company to increase valuation. Can you go a bit into more detail of how a small company is evaluated versus a larger partner? All right, check this out. You're under a certain threshold. You've got a lot more problems. I know what my payroll is going to be this week within 5%. When you're small, there's so much fluctuations. There's so many things. There's too many key players. If your head of marketing leaves, you're screwed. If the CEO's gone, you're screwed. When you get bigger, private equity companies and other investors like hedge funds look at your business and they say, even if the owner walks away, the GM walk away, this company has the infrastructure,

the manuals, the power of systems behind it. And it's scaled to the size. It's a platform company. So you want to become a platform company. So if you're small, let's just say you're doing 3 million. And let's say you're doing 15%. You're doing 450 K. Now, hopefully you're paying yourself because here's the deal. You got to pay yourself at least 120 grand if you're doing that much money. Otherwise they're going to take 120 grand off that 450. Follow me here. So we're just going to use 450. I'm only going to give you about four times that for your business. So times four. So roughly that's 1.8 million. Now, if you're able to take a $3 million company and combine with a 3 million and a 4 million and a 5 million, so three, three, four, and five will use. So that's 15 million. Now, if you guys walk,

talk, and act the same, if you got systems and you got secondary call centers, it doesn't matter if you're branded the same. But now there's a lot of contingency plans. Now, if one of the owner leaves, I still got the company. I've got all the manuals. It's way less risk for me. So now I'm going to give you eight times. So now with my $1.8 million, I doubled that to 3.6. But you got to walk, talk, and act the same.

You got to have contingency plans. You got to have manuals. You got to have systems in place. So yes, I'm a huge fan of partnering with other companies. The problem is, is owners could be assholes. Owners usually get in the way. If I partner with another guy my size, I don't know how well I would do. I'm used to being in control.

I'm used to making a lot of decisions. And I'm very, very, I'd say, I like hearing other ideas. And I usually go with the other ideas if there's a valid point. But obviously, I think what we've done is pretty amazing. And what I would have to have is a mediator that came in and said, we're going to take the data points and the key performance indicators, and we're going to have to get audited by a third party. And we're going to take the best practices from both companies. And both of you guys are going to depend on me to pick that. And that way

it's fair. And I'm going to evaluate each and every employee. And we're going to give, I need to look at the facts. And that's the way that I'd probably run that because it's tough. But ultimately, your goal is to maximize shareholder value. That's the goal of any LLC, C corporation, S corporation is to maximize shareholder value. So by partnering with other companies, but if you're a small company, you don't have much leverage. I can't have a small company go to me and say, hey, Tommy, I really think we should partner up. That way I'm worth more money. What I would do is say, I will give you half of what I grow your

business to in the next year or two, because here's the deal. I'll get them from this $450,000 a year to a million. So I get them to a million, let's just say 900,000. I doubled them from 400 to 900 K. Now I took a four times multiplier. So I got them an extra 1.8 million. I want to split that with them. I'll give them an extra 900 grand. So that's a pretty cool deal. They just got a lot of extra money, but chances are I'll triple them. Now, if I triple them and they're at 450, now they're at 1.35 million. Okay. So check this out. If I split that with them, the gain of 900,000, they doubled their worth. And that's my plan is I want to tell these companies, listen, you know what I just looked up. This is going to blow your guys's mind. But if you don't freaking

think, if you don't think that Amazon's coming into the game and Facebook's getting in the game and Google's getting in the game and Apple's collecting your data and getting in this home service game, you're wrong. Those are the big four. And here's the deal. When they come in, they're going to Uberize our industry. Watch what happens. And I want to make you afraid because I want you to build your company as big as you can and take some chips off the table because here's what happened. I looked up what a New York medallion cost. A medallion is for taxis. Okay, listen to me real quick.

They paid a million dollars a medallion up to 2015. And then a little thing called Uber came in and Lyft. And medallions sell for $120,000. All of a sudden, the business deteriorated to 10% of what it was worth. If you don't think that they're collecting data, and right now, Chamberlain, LiftMaster just sold a Blackstone, a huge hedge fund. And guess what? Now LiftMaster actually know exactly when the garage door has an issue and it text messages the company that put it in, or it goes straight to Amazon. And then they're going to find somebody because eventually they're going to own the whole market.

And when everybody's got a lift master and a genie that report problems, they're going to own, and then they could commoditize the whole industry and take a piece of it. And it's better for the end user, less sales and more processes are better for the end user. So it's going to happen. And if you guys aren't having fear, uncertainty, and doubt about this stuff, you should. I hate to say that because they're always going to need the labor, but they're going to get rid of the CSRs. They're going to get rid of the dispatchers. They're going to make sure you've got a good insurance and you're able to fulfill it.

And it's going to be a commodity. You're going to go fix it. You're going to go fix it. And it won't pay the same. It just can't. It's just, this is the evolution of business. This is the facts. They still need us. They do need us, but they don't need our pricing.

They don't need our sales. They can diagnose it. We don't need any overhead. They want the one man army out there. The reason they're going to love me in this whole process is because I can make technicians. I can certify them. I've got the vans. They don't want to deal with outfitting of vans and inventory and everything else, but

they're going to make more margin and they're going to try to commoditize it. Look, you go to Vegas right now and you get in an Uber, you're paying 20 bucks to get to the hotel. You get in and trust me, this is the last year I get in a taxi cab. It's 45 bucks. The reason I go on the taxi is because Uber is a pain in the ass. And sometimes Amazon's a pain in the ass. And sometimes Walmart's a pain in the ass, depending on what you want to do but if you

don't think they're coming in you know what's going to happen autonomous cars are coming do you think you need a garage if the uber will come pick you up and it runs off of solar and you know batteries if they freaking could come pick you up you don't need a garage builders are already starting to build house without garages knowing that automated cars are going to come out look at the end of the day this shit's happening i'm sorry but it is and i think the first business it's going into is hvac is happening very very quickly i mean i think we still got plenty of years left i don't know but when it happens it'll happen quick because I'll tell you this. There's a company, a buddy of mine, there's a company called CB, S-I-B-I. They're selling

a five ton unit installed for $3,800 to hedge funds that are buying over a hundred million dollars of property. I mean, dude, if you guys don't see this shit coming, don't say I didn't warn you. Let's see here. I'm in the process of hiring an office admin. Would you suggest an NDA and a non-compete and a non-solicit? Absolutely have them sign. Anybody that comes into your shop should be signing an NDA and non-compete. I mean, especially that's working for you. They get to know all your crap. I mean, I'd have them sign tenable. Yes. And you know what? I don't need to use that and hold it over their head because most likely they can break that, but it's just something that needs to be done. And anybody would tell you that, I think. At what point do you abandon organic growth and use credit to increase marketing and service area. For me, as I'm looking like this,

a buddy of mine bought a garage door company and they're getting 30 free leads a day, 30 free leads a day. I don't think I want to grow organic anymore. I think I just want to buy companies that are getting 30 free leads a day and turn on all the, I'm going to create a one-page marketing plan. There's a great book. And I'm going to hit this switch called GMB, LSA, organic, PPC, rebrand. I'm going to do ValPak, MoneyMailer, Clipper. I'm going to click the switch over here and turn on all the other things. And I got about 80 more. And then we're going to be at a hundred jobs a day. I'm going to retrain their technicians. I'm going to get their booking rate up, get their average ticket, sell more financing. And all of a sudden that's a $50 million company that I just picked up for a few hundred grand to

buy a piece of it. I'm going to make sure the owners make out like bandits, like bandits, but there's nothing faster growth. I mean, look, these guys will have enough to retire. They're going to have better relationships. They don't have to worry about hiring anymore. They don't have to worry about the stupid relationships. They don't have to worry about hiring anymore. They don't have to worry about the stupid financing. They don't have to worry about audits. They don't have to worry about freaking recruiting. They don't have to worry about LMS and a service Titan. So the deal is, is I think JC was looking out and he said, Tommy, I'm going to create the perfect storm. I'm going to make it so no one else could hire and can't get parts. I'm going to make sure you can. And I'm going to make it so no one else can hire and can't get parts. I'm going to make sure you can.

And I'm going to have businesses begging you to sell them to sell to you. And right now I got to tell you, it's, it's the way it's looking. And I'm very, very fortunate because I can go there and I think their life a lot better, a lot easier and give them a six figure income to boot on top of making a millionaires. And I know a lot of guys out there will never be millionaires, but with me, I think they could be several million dollars, get a really, really good yearly income and get all their stress taken away. And we both win. You see, in a negotiation, here's a great book for you guys. There you go. The art of the deal. You got to have two winners. If you don't have two winners,

if you're in a negotiation, you can't have two winners. There's big issues there. James Millis said, should I keep building slowly, debt-free, or use a loan and dump money into marketing and hiring? Well, here's the deal. If I would have dumped money into hiring and marketing, I would have done exactly what happened. I had to close down four markets because I was overzealous and I didn't have my checks and balances in place. Now, you could borrow money at such a cheap rate. Are you kidding me? Shit, you could get an SBA loan backed by the government for nothing. Hell yeah, but you got to go slow.

A, B test. Try things out. Do not rush into this. Please do not rush into this. Make sure you nail it and then you scale it. Okay. Those are the famous last words. It's nail and scale because if you don't nail it and you start to scale, you lose a lot of freaking money.

But right now, money's free. It's cheap. It's cheap, cheap money. It's the cheapest it's been in 5,000 years. Dustin, you sell to me tomorrow. We'll make a deal. Let's make that happen. Have you purchased a company before

and had the owner as a manager? Yes. It just depends on the size of the company. I purchased four smaller companies and some of them stuck around. It really depends. Does the guy want to retire? What does he love to do?

Was he really, really good at garage doors? Does he like to sell? Some of them don't want to, some of them just want to be done. You really got to get to the root of what the person loves and what they're passionate about. And there's no one size fits all. It's got to be a win-win and really find out. I talked about this, but we're hiring a dream manager, someone that helps every single person accomplish their dreams. And if you look at a business owner, they're the same, they're human beings, help them fulfill their dreams and you'll be loved and you'll live a fulfilled life and you'll be happy. That's all I can tell you. Credit for the company and not personal. So if you're trying to build credit, I said a hold of my buddy jim piccolo i gave

you guys his number i think it was 480-596-1111 but you got to do all these things they're going to give you a whole hit list hey jack this is we got intercoms and this is how it works is i just yell throughout the office hey buddy how do we build our business credit uh through dun and brad street done in bad street what do we do i'm on there Through Dun & Bradstreet. Dun & Bradstreet. What do we do? There's like 40 people watching. Oh, well, I actually had a lady that handled it for me. A lady that handled it? What was her name? Let me grab it for you.

Don't worry about it. I'll send it to you guys. But basically, she just wanted to see company bills, company bills getting paid on time. So company bills getting paid on time. Took a look at our financials. Then they report that to Dun & Bradstreet. Exactly. And then what happens is, okay, cool. that that's a piece and that was true piccolo dunn bradstreet no that was piccolo was personal yeah but he gave us he referred us he referred us to that so yeah we'll get the we'll get the name i'll send it and text me the contact info

so the deal is uh you're gonna have to personally sign a lot of stuff. You know, here's the deal. They had my personal house on the line of all my loans. They had everything. They had the building, the apartments, my truck. Now my house is off. I'm taking one of the apartments off as we get bigger. And there's more and more, you know, there's a lot of money in the bank. They don't need personally backed stuff, but you're going to have to sign your life away. I had to go get an insurance policy. They took blood. I peed. I had to do everything. They literally did get an insurance policy. If I died at the longest paid off. So yes, no one said business is easy. If it was easy,

everybody would be doing it. And that 90% of people fail. So you're going to have to take some chances and calculated risks is what I call them. But yeah, you want to grow your business credit, but dude, you're going to have to personally sign your life away for a while. And then slowly lean off of that. That's just the nature of the beast. I'm sorry, but that's what it is. There are two local companies that failed and I'm basically buying equipment, but I want to put together a five-year non-compete. Should I just find a general document or have a lawyer write it? There's a lot of non-competes out there. I would go to a lawyer and have them check it out and make it very, very particular into your industry. A non-compete is a lot more easy to execute for

businesses that you're buying and equipment than it is for employees. So yes, I would get a lawyer to do that. I mean, look, you're looking at maybe two hours at 350 bucks. You're looking at 700 bucks, but you're crossing your T's and dotting your I's because think about the headache of them coming back into the industry. So yeah, listen, things are good. I think I answered everybody's questions. You know, business is a fun game. When you really, really take the time and learn and you understand key performance indicators and you get people to fill the voids of what you suck at, there's no telling what you can do. You know, Jerry, this is a book I contributed in. It's called the CBC Success Journal.

I think I got like 200 of these. And I wrote a section of here. He put together a lot of amazingly smart people. And my section is treat your employees as your internal customers, page 75. And well-written, a lot of people contributed to this book. So put in some secret sauce into here. If you guys get a chance, definitely pick it up. It's worth a read. It's not a big book. It's a quick read. He's got no sections in here. I think you can learn a lot from this book, but you guys let me know what you need. Listen, I'm here to give. I'm selfish in a way because I want you guys to be successful and say that I had a little pinky in helping. When I hear stories,

I love it if you guys could send me a message and I don't share this crap, it's not crap. Don't get me wrong, but I don't try to get it out there. I personally sleep better at night, hoping and praying that I'm moving people in the positive direction. It's something that literally has changed. My life has changed. My perception on everything. So if you guys want to come check this place out, listen, people that have been here understand

I'm not perfect. I've got plenty of issues, but we're growing at an astronomical rate. And the talent is just this talent pool. I say this a lot, but I'm standing on the shoulders of giants, the most amazing people that you'd ever imagine. And this team is just the elite of the elite. And I'm just proud to be in the position I'm at to have all these amazing coworkers that work with me. And they let me have freedom and they step in where I've got a lot of failures. And I'm a proud business owner and I want to give it back. I want to pay it forward as much as possible. And here's what happens is I was talking to this guy, small garage or shop.

This was a couple of years ago. And I talked to him, he's got five techs and I'm literally giving him play by play everything we do. I'm opening up, I'm telling him our revenue, telling him our conversion rates, how we do it, how we train answering every one of his questions. 90 minutes later, he goes, dude, he goes, I don't know how to repay you. I go, you don't need to, if you want to repay me, go out there and execute. And he's like, I will. And he goes, well, listen, I did do something. If you want to repay me, go out there and execute. And he's like, I will. And he goes, well, listen, I did do something. And I want to try. I know this doesn't mean much, but he goes, I looked up on LiftMaster Chamberlain store locator.

And I looked you up in all your locations. And you're like number 10. If you ask him, because of your sales, you could be number one. You could be kind of the top guy with all these little medallions, whatever it is. And he said, I get three or four calls a day from mine. Well, I did it and I get generated anywhere between 10 and 30 calls a day. And I didn't ask him for anything. He just decided to help me because I helped him. And it's amazing if you go out there and you put it all out there and you help people. My managers, Adams in the other room, Mike Bailey, these guys, they thought I was crazy for starting a podcast.

They said, dude, you've given away all our stuff. I said, dude, I'm real. I'm not out there to screw people. I want to see successful people. There's enough water in the ocean for everybody. And the deal is, is hopefully people become to know me and they hear my voice and they feel a good feeling and they trust me. And if there is ever a day we can partner up and I can make them a shit ton of money. Great. And that was never the case. You know, the podcast was kind of selfish. It was, how do I talk to people that would charge me $10,000 an hour to get their feedback? And slowly I started to retain the information and read more books and get obsessed with knowledge and business. And that's where we're at. You know, one of the things I've failed at

is I did this garage store. I did a network. It wasn't garage stores, but I did a network. And now I went with Gianni who helps me run this network. There's like 30 people and I was doing it all wrong. I was jumping on calls all the time, and I still do some of them. What I'm doing now is we got a coach, and I'm going to get several coaches that create accountability. And my plan is to start off with a little bit of a roadmap, like a map on what steps need to come first. And then I'm going to bring in experts. For example, Al Levy is an expert in manuals. So I'm going to use Al Levy because he's the best in the industry at it. Megan likes,

she knows how to do accounting for dummies and I'm a dummy and I need somebody like her to teach me how to create more profit. So I'm going to take my whole Rolodex and all we're going to do is jump on the phone each week and talk about progress and accountability. I want to do it for way less than a thousand dollars a month. And I want to take my complete Rolodex and help people quadruple their business at least every year. And I think that'll be an opportunity to repay the people that have helped me because literally without the people in my life that have done this, without Forrest's PPC and Al Levy and all these guys coming in here and Mike Davis with, who also wrote here, the CEO of El Paso, you know, I'd be up a creek without a paddle. So I get to help them. Gianni makes money. The coaches make money. To be honest with you guys, I've never taken any money out of that account. Personally, people ask me why I would do that. What do I get out of it? Just text me and tell me that I helped you. Just text me and say, maybe your business was

better because A1 makes enough money times a million for me. I'm doing fine. I don't need any more money. What I do want to do is change lives. So if you want me to help you do this for you, not for me, I don't care. If you don't want to do it, it's no big deal. And I didn't even want to talk about that here. Someone just asked me, do I have a program right here? Do you have a program that can help run our business? And I want to make it super affordable. There's three things that most businesses fail. They're shitty recruiters and trainers. They're shitty marketers, and they don't have leadership and culture. If I can fix those three things for you and make it rain I'll make your sales go up literally the

big thing that I was missing too is we weren't having events and having people get to socialize and I want to have two of those a year so that's where I'm coming from uh yeah it's in place literally you got the coach coming online and I got my whole Rolodex and we're getting everything going it's something that's going to be changing from what it was because I don't have the time to get on a call and go over, but I'm going to be talking to these coaches on a daily basis and working on the plans. And it all fits. It's the same formula. Basically you get the right guys with the right conversion rates for the right KPIs. You're the right place. You know, my buddy Jody, he knows how to do this geo-fencing stuff. He goes, Tommy, 10 of the companies we

use were fake. We found a real company that did the real job. Now, if you guys want to go find fake companies and do all the mistakes that I've had, then go for it. But if you want guys to get results that I can prove to get results and I can give you my Rolodex and help you stay accountable and get this shit done, you'd be surprised how many business owners I can give the exact recipe for success and none of them effing do it. They put the notes under their magic pillow and hope the note fairy will take it and make it happen. And so I just told Gianni, let's just create some accountability. That's it. So if you want to get ahold of him, he's a great guy. He's a smart

dude. You can ask him about it. But anyways, guys, I got to run. I really appreciate you guys listening. This is so much fun for me. I appreciate you guys very much. You guys make it a fantastic week. Go out there and snap some necks and break some necks. Take it easy, guys. Thanks. Hey, guys, I just wanted to thank you real quick for listening to the podcast. From the bottom of my heart, it means a lot to to me and I hope you're getting as much as I am out of this podcast. Our goal is to enrich your lives and enrich your businesses and your internal customers, which is your staff. And if you get a chance, please, please, please subscribe. You're going to find out all the new podcasts. You're going to be able to ask me questions to ask the next guest coming on.

And do me a quick favor. Leave a quick review. It really helps us out when you like the podcast and you leave a review. Make it four or five sentences. Tell us how we're doing. And I just wanted to mention real quick, we started a membership. It's homeservicemillionaire.com forward slash club. You get a ton of inside look at what we're going to do to become a billion dollar company.

And we're just we're telling everybody our secrets, basically. And people say, why do you give your secrets away all the time? And I'm like, you know, the hardest part about giving away my secrets is actually trying to get people to do them. So we also create a lot of accountability within this program. So check it out. It's homeservicemillionaire.com forward slash club. It's cheap. It's a monthly payment. I'm not making any money on it to be completely frank with you guys, but I think it will enrich your lives even further. So thank you once again for listening to the podcast.

I really appreciate it.