The Home Service Expert Podcast - Nailing Your Pricing Strategy With The "One-Truck Breakdown" Exercise

Episode Date: March 28, 2019

Allan Ferguson is a nationally recognized business consultant, and the founder of Service Professionals Australia, a service industry training company. He is also the founder and managing director of Omega Homes, Sydney’s leading plumbing, electrical and air conditioning company, as well as the founding partner of Leading4Growth, an online leadership platform that provides ongoing leadership training in both business and life.   In this episode, we talked about Pricing, Training, Business Growth...

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. All right, welcome back to the Home Service Expert. My name is Tommy Mello, and today I'm

here with Alan Ferguson, and he's out of Sydney, Australia. I want to do a quick introduction for him. He's the founder of Service Professionals Australia in 2010 to present. He's the managing director of Omega Homes from 1987 to present. He's the founding partner of Leading for Growth from June 10 to now. And Leading for Growth is an online leadership platform that provides an ongoing training on becoming a great leader, not only in business, but also in life. Omega Services in Sydney is a leading plumbing, electrical, and air conditioning company, offering customers the best solutions. Since 2004, Omega has developed from a team of seven doing plumbing maintenance to new focus in home services, taking the business to 80 staff

members in 2016. Omega Services now has 70 trucks on track to gross $20 million in revenue this year. I know that Alan is going to go to $30 million next year and the goal is $100 million. Alan, you were a great reference from Al Levy. And I love that you're on the show. And I think today's going to be amazing. How's it going out there? It's going fantastic, Tommy. And thank you. I really do want to thank you for inviting me to be on this podcast. Al is a great guy and he's talked about you. I really do want to thank you for inviting me to be on this podcast. Al is a great guy and he's talked about you. And I want to congratulate you on all your successes too. You're really rocking the garage door industry and no doubt your focus is the home services industry as I am. And you have now inspired me to add a garage door division

to Omega Home Services. How's that? Oh, I love it. That's amazing. That's great. I appreciate the compliments. Fantastic. So, you've been in the home service business

now over 30 years. Today, you help other entrepreneurs unlock their businesses, the full potential. Let me ask you this. Tell me a little bit about how you got into the home service niche. Tell me a little bit about the good, bad, and the ugly. I'll try to condense it to as short as possible. So I've really only been in the home services space since about 2004.

So yes, Omega now is officially 30 years old. The business started in my garage in around 1987. But I started off as a plumber, not a lot of knowledge of the industry except my dad was a plumber. And basically, our business did work for builders. We did some small renovations, some new houses, that sort of stuff. And I just followed my dad's footsteps and I grew that business to a whopping $600,000 a year by around 2000. So I didn't really have much growth, didn't really have much knowledge of that, except I knew how to plumb. So around 2001, 2002, things started to come crashing down for me and Omega. We were doing the sort of work we were doing. We had builders

that weren't paying. We took some big losses, put me in a really uncomfortable position where I had to pretty much I had to close the doors, declare bankruptcy, or just find my way out of the hole that I was in. Luckily for me, I'd accumulated some real estate along the way and fire investments. But unfortunately, the mess I was in required me to sell all my assets. So basically, paid down all the debts, cleared up the debts, and pretty much what I had left was Omega, the company, and my health, which is probably the most important thing.

My beautiful wife and two young daughters, we moved into my parents' place. And I then made a very deliberate commitment to not fuck up again and build a business that was based around the home services industry. So around 2002, I started to look for knowledge. And down in Australia, there really wasn't a lot of, there was no best practices groups. There was really nothing going on. So I started to reach out to the US of A. And I then come across companies such as Contractors 2000, which is now called Nextar. I met up with an incredible guy by the name of Jamie Leichter. He is the owner of Aptura. His product was Flatrate Plus. I started to get some knowledge from Jamie. We decided that to get our business to where I wanted it to go, I had to change the model,

get into home services. I stopped doing work for all the builders. And around 2004, we rebirthed Omega as a flat rate company. And we have had consistent growth since then. So, our first year of flat rate pricing, we did a staggering $1 million in annual revenue. And since then, we've grown consistently. Look, some years we've grown by 80%, others been 10%. But our growth over the last sort of 14 years has been probably close to 30%. So yeah, now Omega is a full plumbing, electrical, HVAC, hot water, drain cleaning company. And we're now expanding the business to all of Sydney. And Sydney is a big-ass city. There's over 5 million population. We've got a ton of growth potential in Sydney. But look, I suppose the

change in direction and the current growth trajectory and everything is due to me reaching out to like-minded professionals like yourself, Tommy, and others in the US that were willing to share their wisdom. So did you say James Lector was Aptora? Yes, he's a very good friend of mine. Oh, I used to use Heptora. I met with him a bunch of times. We paid for a lot of custom development with James. Yeah, James. James is a really, really smart guy and a lovely individual.

Yeah, he's super talented. He's a hell of a salesman too, I got to tell you. I think Heptora is great. We went into service time because it, a little bit more innovative, a lot more practical for this, you know. And I know even ServiceTite had its challenges, especially the first couple of years. And there's always challenges

when you pick a CRM. So I've been with plenty of CRMs and tried a lot of different things out. And I really like James. He's a great guy. He's in, what is he in Missouri? He's in Lenexa, Kansas. Kansas. That's right. And he was in the Midwest. He told me, last time I talked to him, he was just, it's always hard to find really good programmers.

But he's one of the first guys out there that had a really sophisticated CRM to be able to do things. He built quite a nice company. He has, yeah. So tell me a little bit about how you came up with the pricing model and what that changed for you when you were able to change that around a little bit. Okay. Back in around 2004, there was just a little bit of history. Australia is way behind the US when it comes to flat rate pricing. So, I know in the US, companies that transition to flat rate pricing, upfront pricing, standardized pricing, whatever you want to call it, was probably around the 80s. And I know Frank Blau was an early innovator, Ron Smith, there's a few others, but Australia really didn't have anyone doing flat rate when we were looking out there. There was one company here in Sydney that I decided to have a,

you know, have a crack and try their books. It was a frigging disaster. The guy was an absolute knob and he wouldn't release the software. He told us how much we needed to charge. We did actually have a small gain in the business, but it was frustration through that product that I then reached out to James. Before I actually met, I didn't meet James until around 2006, 2007. I purchased his product, Flatrate Plus. I said, James, do you mind if I build an Australian database or Australian for plumbing? And that's all we did at the time. We didn't actually add electrical to our business till after,

around 2007, I think. And we then set out to build our own price books, and it was a huge job. Anyone that is thinking of building their own price books from scratch, don't. It's a monster. And so we built something that took a ton of resources. And we implemented flat rate pricing basically through what James had taught us. And also, at that time, I'd have reached out to a fellow by the name of Charlie Greer,

aka Tech Daddy, and started to follow his business model via his videos telling you how to set up your books and all that. And then I thought, why not resell the books in Australia? And we, around that time, we decided to start another company called Service Professionals Australia and we started to sell a flat rate pricing books to the Australian market. I think since we started doing that, we've got about 140 companies. At one point, we had over 1,000 users of price books in Australia. So, that was it. And look, flat rate pricing or standardised pricing is, in my opinion, the only way to go. It's the only way you can effectively charge what you need to charge. When you know your numbers, when you crunch your numbers and see what your hourly rate

is, you think, oh my God, I can't charge that. Well, when you use a fixed price model like flat rate pricing, you can charge what you need to charge. And that's, look, that's all part of the learning and the education I've received from being a participant in groups like Nextar and Service Roundtable. I love it. Yeah, we created our own price book and it's a really big task to take on. I mean, service setting does a pretty good job of giving you the fields that you need to fill. But pricing is something that... We always come into this dilemma as home service professionals. I feel like knowing what the right price is to charge and then understanding the indirect cost. Because so many times, as a business owner,

we look at the cost and we say, this is how much the widget costs. Here's how much I pay my guy. This is the total. But we don't take the alarm system, the electric bill, all these other things that come into account. And then at the end of the year, we're left with nothing, really. I mean, as a business owner, you probably pay yourself a wage, but the wage is not the profit the company should be making. So how do you teach your guys that you need to charge the right prices, don't feel bad about giving people options, and you don't work for free? This is probably, you've touched on an area that I've found is probably one of the most difficult areas of most companies. I don't think I've met a business

owner yet that hasn't struggled in this area where getting your technicians to understand the prices, the price, what you need to charge. And I'm a big advocate of training and we train our technicians weekly, sometimes twice a week, sometimes three times a week, and we do a lot of training out in the field. So we actually are continually showing the guys the breakdown. Let's just presume a pie chart that shows marketing, the percentage of money you would spend on marketing, the percentage of money that goes into your direct wages, your indirect wages, your operating costs, your overhead and everything. And we show them that and show them for every $100

where that money actually gets chunked down to. Another thing that we've done, because if your technicians don't believe in the price, they won't sell. It's straight up. That's just the way it is. So it's really important to always be educating the guys on why we need to charge what we need to charge.

We do a little exercise, which is called a one-truck breakdown. And I got this from the US. And we get the guys to create an imaginary company. It doesn't take long to do, let's say 30 minutes, 45 minutes. And they have to put in all their own costs to run. It's a one-truck operation. They're going to be given a flat rate program. They have to put in all their costs. They have to decide how much they want to pay themselves. We help them through setting a little budget. And at the end of it, we actually come up with a sell price of what they need to charge if they were going to go out and work for themselves. Now, I've had sell prices just to, I don't like to talk about charge rates, but this was an

exercise. So I've had the lowest I've seen, the lowest sell price I've ever seen out of hundreds of contractors that I've done this with is around $250 an hour. The most expensive was about $680 per hour that that individual needed to charge to go out to make a profit. Now, Australia has got a completely different pricing model to, say, the US, and things cost a lot more down under. So the charges we charge here may be a little bit higher than what someone in the US would need to charge. That fascinates me. So run me through this real quick. So can we condense this into five minutes instead? I don't want to waste all your time, but I want to help the listeners understand this is the thing they could run their team through. So let's just do a quick scenario.

So I'll go through and I'll give you some expenses. So I got my advertising, which is my marketing. I've got my direct labor costs, which is just my CSRs, my dispatchers, my technicians. Then I've got my widgets, whichever I'm selling. Then I've got indirect costs, which are my alarm system, my service titan fees, my electricity. Then I've got my rent. And then I could go through, probably come up with 10 other quick ones, like my monthly bills for my cell phones.

I gotta buy an iPad for the guys. I gotta pay for gas. I gotta pay for the truck payment, their insurance, my taxes. So let's just say a simple 10 item thing, just to keep it simple. I take that. Give me some numbers

here so I can help people do this that are listening. Okay. So this is just to simplify it. And I haven't got this. If I had this in front of me, it'd make it easier. And Tommy, I'm happy to share any of this stuff with you, which might help make sense. So you take all your costs, your wages, your marketing, and everything you've mentioned, then the important part here you need to explain to your technician, all right, there's 52 weeks in the year. How many at the moment? My average guy works about 40 weeks out of 52. They get a lot of leave.

So you've got, say, 40 weeks you're going to work. Do you want to work 40-hour days, 50-hour days, 60-hour days? Are you going to work seven days? Oh, no, no, no. They say, we just want to work 40 hours. We don't want to do weekends, blah, blah, blah. So this is how many hours you have available. And I like to work with flat rate.

With a correctly set up flat rate company, you would probably build four hours in an eight hour day now a 50 efficiency rate is pretty damn good if you're set up correctly so that means that you don't charge that you're only charging the customer for the time on site you don't charge them for travel or go away or training you just charge them for the billable time. So let's say you're set up at a 50% efficiency rate. Then you've got X, so you might have, say, you want to work 40 hours a week and say 40 weeks in a year. You've got, say, roughly 2,000 hours available to bill. So then you need to divide that by your overhead. So you have to take it. Okay, you got 2,000 hours, but you could only, your efficiency rate or your utilization rate is half of that

because you're working four out of eight hours in the home. So you only have 1,000 hours available. You divide that by your cost of your widgets and all your labor, or everything, your total cost. So out of 1,000 hours, I got to think of the cost, a thousand hours, let's say, oh man, if you wanted it to be at $500, your total cost would be $500,000. Now I'm just doing the rough math here. That gets you to $500 by that thousand hours per hour. So if your total cost for the year are 500500,000, you divide by that $1,000 number,

you get the $500 per hour is what you need to charge. And you got to put the profit in there, right? Yeah. Look, that's all part of the calculation. So I will send you the sheet. We might just have to modify it a little bit. And maybe some of your podcast listeners might like to see an example. Yeah, no, I'll make it available for them. I'll have this on the website to make sure they can see this. And I think it's a great exercise because I've had people where that worked for me that said, I don't feel that selling people's stuff is ethical. And I said, do you understand what it runs to run a business? Do you know the cost? And they say, no, but the

last company sold it for a lot cheaper. And I said, do they have insurance for you? Did they pay for a truck for you? Did they cover your gas? Did they have cell phones? Did they have iPads? Did they use a software system to aggregate it all? No, they work from the guy's house. He did all the inventory. He never took a vacation and they didn't give him trucks. And there's nothing wrong with that. There's just different costs. We're a better service. We're faster. We're stronger. And we've got nighttime phone calls.

You call for emergency service, we're going to do that. And I decided I didn't want to be the cheapest. I wanted to be the best. And the best for me means we could come out anytime and we can deliver drug tested background check, wrap trucks, people you can trust in your home. And other people say, you know what? I just want a job.

Their reason for starting a business is because they didn't like working for someone else. And that's just not the right way to do it. But I love this drill. I got to tell you, Alan, I wish I thought of it, but it's a pretty ingenious thing to run your crew through. You've got to align the belief of the tech. If the technician doesn't believe,

if the technician thinks that, you know, let's say our guys get paid very well. If they're not the highest paid in Australia, they're pretty damn close. And, you know, I've got guys that earn north of 200k per year working for me, you know, there's salary and then there's commission. Why would they want to go and work for themselves at anything less? So the very first thing you need to do, decide how much you want to pay yourself because that impacts your hourly billable rate. But like I said, Tommy, if they don't believe in the sell price, it means they don't believe in the company and their ability to sell is limited. And look, I am a massive believer in sales and marketing. That's my life. That's where I live. 80% of everything I'm about is about

making the phone ring and having technicians that can maximize every call. And their belief system is so important. Look, when it comes to technician training, I've worked with the best in the planet and they all come from the US, by the way. I've had the best trainers, the tech daddies, the Kenny Chapmans. I've had Al Levy. I've had Joe Cunningham, Mark Madison. I've brought all these guys down to Australia. I've run events and I believe in training and all the guys, all the trainers that I've used, all the same thing. The belief system of the technician needs to be aligned with the company's goals. So, yeah. So the interesting thing is,

you know, Kenny Chapman's in Scottsdale too. So Al Levy's here. You know, I got Alan Rohr that comes out here all the time. It's amazing. You know, whatever. The lovely Alan. The lovely Alan wrote a book called,

oh, I'll tell you here. She wrote a lot of books like, How Much Should I Charge? She wrote another book called Bare Bones Business Plan. But the one, where did the money go? It tells you about all the indirect costs. But I gotta tell you,

you know, I had a guy named Darius Levers contribute to my book. His specialty is selling financing. He said the number one reason that your technicians won't sell is because of their disbelief. Let me read a little... Do you care if I read a little section of what he wrote? It's your podcast and I'm here for as long as you need me. So let's do this. He said, why technicians don't offer financing to your customers? Most technicians aren't comfortable with offering financing, even though it would tremendously beneficial them and

you. And here's why. Number one, they sell like they buy. The technicians thinks if they need financing, they would ask for it. It's only $800. They don't need financing or they have a nice house and a nice car. They can't afford it or Or they can afford it. I'm sorry. The next reason is change. Technicians get into a rut when it comes to selling and it's hard for them to change their process. The first step to approach the techs that you would be most open to change and turn them into financing ambassadors. So basically, pick one tech and make them an ambassador. The third reason is it's complicated. And the fourth reason is it's confused. But the number one thing that he really said here is they sell like they buy. They don't believe in it.

And that's a huge problem. A lot of my technicians go, I would never do that. Or I would never... I don't agree with that. And it's not up to you to decide the decisions of what you're going to make. Options help everybody. And Ara, the CEO of ServiceTang told me a story. He said, Tommy, he goes, I called one of my top companies to come fix my HVAC. And he goes, I wanted a new HVAC unit. So the guy walks in. I didn't tell him who

to send and the owner didn't come out. So they sent one of their good guys out. And I told them what unit I was looking at. It was a special unit, one of the best units they make, that Trane actually makes. And the guy said, oh, no, no, no, no. You don't want that unit. It's way too pricey for what it does. And he goes, I called the owner right then and there and told him to send out another technician. He goes, how is it right for this guy to say what I could afford, what I can't afford, and what's right for me and my situation? He goes, he should have gave me options and let me decide. And what we talk about is diagnose the person, then diagnose the problem.

And my favorite thing is sales training. I love it because I walk in with three questions when I talk to customers. I want to find out what's right for them. And to make assumptions is what screws everything up. So I think we kind of dived into that a little bit. But you're absolutely fundamentally right with the fact that the technician sells what he believes in. And if they don't know, they can't sell it. And it's part of our job to educate and not only educate the customer, but to educate the technician. And that's done through role play. And every single week is done through a lot, a lot of training. And what do you do to make sure that you're giving the right amount of training and making sure to hold your technicians accountable to that?

Okay, so what is the right amount of training? Now, I don't have an answer for that, Tommy. And I think it depends on how many hours you want your guys out there working. But I'll tell you an exercise that I did. It was with Charlie Greer, Tech Daddy, a few years ago. He actually, when he came to Australia, he spent a week with me and my technicians. By the way, Charlie Greer, for anyone that hasn't heard him, look him up, Tech Daddy, has amazing products that are relatively cheap. He's got a product called Who Answers the Phone?

That was actually, Charlie started to make that product here in Australia with our call takers. So, look, you've got to get the belief right. You've got to really hone in on the system, the sales system. Look, I don't know if I really have the answer, but I'm happy to go wherever you want to go with this, but get the technician to believe that is probably the most important thing. The amount of time is dependent.

Now, the exercise that Charlie took us through was he said, Alan, I believe you should be training your technicians daily. And I go, what? Daily? I mean, they'll never get any work done. He said, yep, I want you to bring the technicians in to our training facility here at Omega headquarters, and we're going to train them for two hours every day. And I will guarantee you that your sales will increase. I said, all right, Charlie, I don't know if I agree, but we brought the technicians in every day and trained them for two hours. And part of that training was the role play, review their numbers, review their close

rates, review the number of options. And actually, at the end of the week, we looked at the numbers and there was no increase to sales, but there was no decrease to sales. But guess what? My techs were only out there out of a five-day week. They spent basically a full week in training. So they were out there less and they did the same sales. So I don't know if that's giving away any secrets or anything, but the way we do it, Sydney's horrible to get around. It's very similar to say Los Angeles, New York City, and our guys have a lot of windshield time. To bring them in daily probably wouldn't be feasible, but we believe in training all of our technicians weekly for several hours. The technicians that are

lagging behind with their numbers, we'll bring them in and train them additionally. Plus, we do training out in the field. We have my training manager, my service manager, will actually go out and run calls with the guys out in the field. So what's the right answer? I think it depends on the company. So I think that one of the things that Al's taught me

is the apprentice through field supervisor program and to make sure that no person has more than five or six people in charge of another. Because I always say Jesus only had 12 disciples and that's like the God. So I think there's too many direct reports and there's too many people trying to manage. If I counted even my technicians in Phoenix,

that's 20 guys that one guy cannot handle. And I love just simple reports to keep people honest and to do a ride along here and there and make sure they understand that if they don't follow the exact manual and the procedures we have in it, they can't win. I mean, it's hard to win. We built this manual, not through me. I built it through 500 technicians. I mean, I've hired over 1000. I've asked a lot of questions. I literally ask questions every day. And you know who I ask the questions of? I don't ask the guys on the bottom of the totem pole. I ask the guys that are winning the best customer satisfaction, the best conversion rate,

the best tickets. But you know what? My tickets are from a price book. We don't have to lie cheaters still to give people options. And what I ask people is, do you want to see me again in the next year or two? Or do you want to see me in 15 years? And they say, I'd rather take the latter. And I say, okay, well, let's fix everything that needs to be done today. And here's why it needs to be done. Feel free to keep the old parts, take them anywhere you want, because they're worn out. It's just because your door is 10 years old. And a lot of people choose to go into better technology. They want the best lifetime warranty. When you go into a tire store,

they say you can get 10,000, 20,000 or 40,000 rated tires. Which ones do you want? And some people say, I'm selling my car soon. And people think sales is bad, but sales is actually customer service. And I'm so sick of that. I'm so sick of thinking, oh, no, I don't like to do that. That's just not my character.

I'm like, your character is to go broke then. You know, most people relate sales to the used car salesman, right? That's not sales. Sales, to me, and the process that I've found works the best, is you don't want your technician to come across in front of the customer as a sharp salesman. I mean, your customer called out to have a professional, a technician, and I find that the technicians that sell the best are the ones that provide the most options for the customer. And that comes through, like I was just saying,

it's a system. It's a sales system. You're going to have a checklist. You've got to provide the most options for the customer. And that comes through, like I was just saying, it's a system, it's a sales system. You're going to have a checklist, you've got to provide the customer options, genuine options. Don't ever try to sell the customer something that they don't want or need or won't benefit from. But the big thing for me, our company is primarily, it's a same-day response type of business.

You know, you call us today, you'll get someone today. You've got an emergency, we're the right company for you. And we don't go to any home for free. We have a $79 dispatch fee. And if you're not willing to pay the dispatch fee, you're not the right customer for us. And our technicians go out, they'll analyze the problem. The customer will, in most cases, allow the technician to do a complete inspection of the home and provide options for the repair that they'll call out for and anything else that jumps in front of them. And the beauty of having a home service company that's got multiple trades, and I can see you, Tommy, adding plumbing,

electrical, HVAC. Drain cleaning is something that if we've got a few minutes, I'd like to go deeper because that's where I believe the margins, the best margins in the industry hide. So, when you're dealing with someone that's got a serious problem, it's not that hard to sell them a solution. So, for example, if our technician gets in front of a customer and shuts them down on the whole home inspection, we'll at least give the customer, they called you out there for a hot water system that's leaking or not working, at least give them multiple options on that hot water system. So, for us, we'll give options anywhere from $2,000 for a real basic model to $15,000 for a heat pump and top of the line. So, at least give them something

to say no to. Always have something on your proposal sheet or option sheet that they can say no to, but give them options. Don't ever, ever try to sell them anything that they won't benefit from or that won't help improve their life. That's sales to me. Yeah, there's two things, right? There's two reasons people buy. To benefit and make their lives better or to avoid fear. And personally, when I do sales, I like to avoid fear because why did you call us out today? Well, you missed your day at work, didn't you? You were stuck.

So if you don't want this to happen again, I can say, hey, you'll never be stuck again. Or I can start talking about the fear of saying, you're going to be late again to work and this is going to continue to happen. You're going to continue to pay a service call. And it's just the way we're wired as humans to avoid the fear. And I don't talk so much about features. These are really quiet, and they're very nice, and they're powder-coated.

I talk about what do you get out of this? You want your door to be safe, don't you? Number one. Number two, you don't want to miss another day of work. You want it to be reliable. And here's the problem. This last company that was out here, they wrote the service dates on here. They were out here three times in the last two years.

Do you want to continue down this trend or can I just make it right this time? I love what we're talking about because you don't need a light sheet or steel to make money in the home service niche. And you don't have to feel bad about customer service, which is equal to sales. And a lot of these old time guys

that have been in the industry that hate guys like me, the reason they hate guys like me is because it used to be the yellow book. And they did this for 60 years the same way. And they had the double truck because they were around since the 50s, 60s. And their dad's dad did it. And they've been around forever.

And now all of a sudden you got Google, Yelp, Facebook, all these other things, Amazon. And guys like us are innovators. We're going in, we're changing the game, we're giving better customer service, faster response time, higher booking rate. We're evolving things like service time. We're pushing service time to the next level. And we're really pissing up a lot of people. These people are like, man, we used to have a stranglehold on this industry. And it's scary for them. And they want to do everything. The old timers are

trying to collude right now to figure out how to push us out. But it's impossible to happen. Because the yellow book's dead. Their whole way of doing business is dead. Reviews matter now. And I'm sorry, but you can't charge the same fee you charged in 1990 as today. We're 30 years down the road there. And they have a hard time with that. They think it should be the same as what they charged back in the day. And performance base is wrong. It should only be hourly. You should pay your people 10 bucks an hour and you should hope to do the best

because that's what they did. And there's just a huge problem with that, in my opinion. Have you noticed that, that some people really believe that? Oh, look, it's not just a US problem. It's an Australian problem. And most plumbers, I'll just stick with plumbing for now because that's what I am. I started as a plumber even though I own a substantial electrical air conditioning company. Most

plumbers enter the trade, they worked for the old time boss. And look, even the young guys out there, their thinking is very similar. They worked for a company like Omega used to be from 1987. They did building work. They had an hourly rate. Let's call that hourly rate $70 an hour, which seems to be about what most of them charge. We pay our technicians more than $70 an hour, by the way. Anyone that's listening that's still charging an hourly rate, get that into you. So when you know what your costs are, you know what you need to charge.

And you know that, you know, you're competing against not just the older plumbers, but the younger guys that have been, you know, they've come through the industry thinking that it's all about an hourly rate. And, you know, they will go out to a job and quote, say, for a day's work, they might quote 500, 600, 700 bucks, whatever it may be, where for us, we charge a lot more. And then the first thing they're going to do is,

oh, that bloody Omega's a ripoff. They're trying to charge $200, $300 an hour. That's not right. And there's some Facebook groups in Australia that are really like, I'm not going to bag them out. I'm not into that. But there's a group called The Plumber's Crack. And there's some really good guys on that group. But there's some bottom dwellers in there that just all they want to do is criticize and bag out the companies that are charging the right money. Now, it's my opinion and it's only my opinion. We're not expensive. It's just the competition around us is not charging enough cheap. And look, when you look at statistics and facts that in the plumbing industry or even electrical air conditioning, that 80% of businesses that are here

today won't be around in five years' time. It's staggering. It's not right. It doesn't need to be that way. But it's the way the plumbers and people from the trade, that's the way they're taught and that's what they know. And you need people like yourself, Tommy, and me, and there's others in Australia doing what I do. I'm not the only one. You need people that can show you the right way to run a business and not the old way, which is, I still think 80% of the businesses we compete against, they're not charging enough and they're not going to be around, but do 1,200 service calls a month and, you know, our average ticket is way over a thousand bucks and, you know, like we do a lot of calls, really good average tickets and, but we get so many other people criticising, how dare you charge that to the old lady? I mean,

that's a rip-off and it's crazy, but that's the way it is. So Australia has the same problem as the US. And I know they're out there. They'll be quick to criticise you, criticise me for what we're about. Look, all I want to see is the industry grow. I want what's best for the industry. I love this industry. And there's so much money to be made in our industry.

With exception to marijuana, I think legal marijuana, I think the service industry, the home services industry is the place to build a fortune. You know, here's the deal. Here's a stat I was on with a million dollar plumber. I was on a podcast two days ago. He said 95% of plumbers fail within the first year. Out of that, that make it 5%, 97% of them never make it out of the field, meaning they're still running the jobs day to day. And I just looked up something. In Texas, this is from tradesmans.com, the average plumber is 58 years old. So this is what's happening in these industries. No one is going, I want to go work as a plumber for $14 an hour and not get my own truck and have to be someone else's, you know,

the B word. But basically, everybody is so crazy that people are afraid to make money. And we miss the step that you need to pay yourself a good amount of money. Let's just say you pay yourself $80,000 a year. That's not a great amount of money, but pay yourself a good amount of money. Let's just say you pay yourself $80,000 a year. That's not a great amount of money, but that's a good livable wage. Now, the fact behind that is the company still should be making 15% to 20% profit. I know in HVAC and plumbing, sometimes it's 10%. I believe in garage doors, it should be 15% to 20%. The problem is, Alan, is there's some companies that blow it for everybody else.

They go in there and they charge crazy high prices for stuff people didn't need. And the thing that I like to do is leave the old parts there. Every time I talk to a husband and wife and the husband's not there, I get on the phone and I haven't been out in the field in a few years except for here and there. But I say, sir, I'm glad to leave the old parts here. And if you want me to put the old ones back on, you give me a call back. I'll come out at no charge. And you know how many times I've had a customer call me back for that? Yes. None? Zero. You're absolutely right. Because the parts are back and I give them options and I explain them the things. And so many people, especially on Facebook, they go, how could you ever charge that? It costs 50 cents for a pizza, but to have a pizza company within your area that

can make it on the fly, put it all together, bake it, put the coupon out there for you to hear about them, deliver it to your house, they're going to charge 15 to 20 bucks. Do people ever say I paid too much for a pizza? Here's the other thing. I could have paid more for a new garage door, or I could have paid less for a new garage door. If you got a transmission and you go to Amco Transmissions and you want a lifetime warranty on that transmission, you might pay $3,000. You could get a new transmission for less than that installed, but it doesn't come with the same warranty and it's not near the performance parts that we put into it. So I'm the biggest advocate not to rip people off. But people say you shouldn't spend more than 5% in marketing.

And I go, go on Google, find out what it costs per click. If you're going to spend 5%, you're not going to grow. You're going to start shrinking in size. And there's so many things I just disagree with. And it's important to have this podcast to be able to put our voice out there. And at the end of the day, I think we're preaching the same lesson here is we got to charge what it costs to be in business and you need to be able to make a profit. You know, let me ask you this. What was your largest challenge in business and what did you do to overcome it? I've had quite a lot of challenges, Tommy.

And probably the biggest one for me. the failures because I think in life, if you're not taking risk, you know, and anyone that gets through life without failure is probably, they're not trying hard enough, right? So, the biggest challenges for me is, and I identified this, I'll just share a little story. My beautiful wife, I've been with now for 20 plus years. Her brother, very, very successful entrepreneur who has built an electrical business to in excess of 200 million per annum per year. He sold it at a very young age. That business was bought by a company called Tyco. They killed it. He bought it back for two cents on the dollar. And I watched him take a business that was basically zero. It was basically on the verge of bankruptcy, build it back to a $200 million per year business in less than five years

and sell it again. And it's great to have mentors like Tony, but to me, it blows my mind how someone can actually build a $200 million business in a couple of years. But I said, Tony, what's your key to success? He said, Alan, I'm good with people. And I thought, shit, because I'm not saying I'm bad with people, but it wasn't a strength of mine. Being good with people wasn't natural for me. And that's the reason why me and my partner, Peter, started a leadership development company because I needed to improve my leadership

and people skills. So the biggest challenge for me was probably my people skills, my leadership skills, and knowing that I had poor people leadership skills and not completely horrible. Tommy, don't think that on a one to 10, I don't think I'm a one or a 2, but I'm definitely

not a 10. That was holding me back. I was able to grow the business, but getting the right people on the bus, which is a very important thing, was probably my biggest challenge. And I'm definitely improving. And the only way I'm going to get to a $30 million, $50 million, $100 million business is having the best people and having my leadership skills better than they currently were. That's probably my biggest challenge. Tommy?

Yeah, that's a great one because I think a lot of the people listening, they always wonder, you know what I hear a lot of? Nobody listens to me. I keep hiring these assholes. Nobody could do the job like I could do. And then I say, man, I guess I had a little bit

of that belief at a certain time. I say, maybe you're the problem. Maybe you should look in the mirror. Maybe nobody wants to work for you because you're never happy. Maybe you never reward the right stuff. Maybe you guys are making minimum wage. Maybe they'll never live up to your expectations.

When's the last time you told somebody they're doing a good job? When's the last time you gave that a boy and give them a little pat on the back? Because that needs to happen. If you're going to be around good people, you got to create that environment for them. So I love that you said that because I think a lot of the people listening, if they're listening to the podcast, they probably aren't good people that are looking to grow and grow their leadership and their culture. But the people that aren't listening, they'll never listen. They'll be on Facebook all day criticizing the people that listen to this stuff.

It's kind of funny. It's so fun to have you on here. You talk a lot on your podcast about achieving 10 times growth, which is what Grant Cardone talks about in his lot. Walk us through the process of what that challenges you to do and how to get there. Okay, I'm glad you've moved to this because I, just going back, you've asked me what my biggest fears, you know, my biggest challenges. Definitely my leadership, my people.

I had to look in the mirror to realize what the problem was, not just with me, but my business. I, back 10 years ago, I had a massive fear of speaking in public. And I knew that the only way I was ever going to overcome that fear was to actually get up on stage in front of hundreds of people and speak and do presentation. And I mean, my fear of public speaking was crippling. It was like, it was uncomfortable speaking to three or four people in a crowd. And I used to get anxiety and tremors. And so to overcome that was a big challenge.

That's part of my improving me to improve my business. So anyone out there that's got a fear of speaking in public, there's only one way to fix it. Go and get a course, go to a course, get out there and do it. So 10 times growth, right? So I actually, I work with an incredible company called Service Roundtable, where I actually met Al Levy and where I've met most of the legends of the industry. And Service Roundtable has a group called Service Nation, which is, it's very similar to, say, Nextar. It's probably a little bit bigger than Nextar now.

I think they've got several thousand members. So I actually, at an event, not last year, the year before, and I think that was the same event that Al was at, I actually did a talk called the 10X Growth Formula. And I have read Grant Cardone's book and I don't follow Grant a lot. I know he's into real estate and I'm into real estate. So, I'm not to his level. Please don't think that I am. So, I did a talk on 10x Growth. Now, what I wanted to do was in my presentation and I, by the way, I come in, Mike Aguilero, you've talked about Mike before, I think you know Mike, was on stage before me. And he basically said, Alan, I'm going to warm the room up for you. And he did. So I was actually on after Mike. And Mike's a great guy. Anyone that has not heard of Mike before is on my podcast, Pipeline to Profitability. I don't know what number, but it's definitely worth listening to.

And we actually had Mike down in Australia a few years back, did some stuff down under. So yeah, the 10x growth formula. I wanted to apply this to the service industry. So my talk was about if you can chunk down, and I do this the same when I train my technicians and give them goal setting. And I always try to do goal setting that's not just specific to the job. It's goal setting personal. And I recommend anyone that I've ever done goal setting with is to focus on real estate or some other way to generate wealth. So I talked about at my presentation at Service World Expo, I talked about the 10F growth formula and focusing on small chunks of growth. Now, anyone that's got a pen, write this down.

If you are to look at a growth rate of 2% per month compounded, you will get a growth rate of roughly 25% per annum, okay? So that means that you can double your business every 3.1 years and at that rate, at 2% per month, you can grow, you can 10X your business in 10 years, okay? For those that are a little bit more aggressive, and I know you fall into this box, Tommy, 2.5% growth per month compounded equals 30% per annum growth. Now, at 30% per

annum growth, a business doubles every 2.9 years. So, it takes you 9 years to grow by 10x. That basically means if you're a $1 million company now, in less than 10 years, you can be a $10 million company. Okay. So for those that are even a little bit more aggressive, and I know you'll probably blow this away, but 3% growth per month compounded is 35% growth per annum. So you can actually double your business in size every 2.5 years. It takes you 7.5 years to 10x your business. That was the basis of my, I think it was a 45-minute presentation. And yes, that's a very simple formula, which I love to share. I love that. 10x is a good goal. And it depends on what you're starting from.

I look at a lot of the businesses out there and I say, let's get you started on a solid foundation. Let's get your roots right. So Al Levy is a professional when it comes to manuals, the org chart, the depth chart, making sure that the 80% is there. And I think that's a good foundation. And I think the next step that I love, I absolutely am obsessed with, is marketing and sales. And I think the marketing part that people don't understand, and you correct me if I'm wrong from your perspective, but I'd say half of marketing is not to get new customers, it's to get the right technicians, CSRs, and dispatchers on board. Because the better you get at those, everything else follows

and the customers follow. And it's an amazing thing that we forget about marketing to new people. We think we can just put an ad on Craigslist and all these great people are going to just quit their jobs and go on to Craigslist and find your company and come running. But I think there's a big problem with that. What is your take on building a successful team using marketing? Okay. So my podcast with Mike and a famous saying, which I've used from time to time, but it's still, it's Mike saying, marketing is everything and everything is marketing, right? So this is relevant.

And look, you got me onto a subject that we could probably go on for hours and we'll cover about 1% of it. But this is something that got me thinking differently about my business. A very successful businessman here in Australia, Kerry Packer was his name. He was a billionaire and he was one of, look up Kerry Packer, he's one of the highest roller gambler at Las Vegas, the second highest. And he was mentoring another very successful business owner called Mark Burris.

And Kerry Packer asked Mark Burris, Mark, what business are you in? And Mark was in the finance business. And he answered the question like, I'm into finance. He said, no, you're not into finance. And look, this was years ago. I heard this and I can't remember what the exact answer was. But then I thought, so if someone said, if you, Tommy, were to say, Alan, what business you were in, and I was to say, I'm in the plumbing and electrical HVAC business, that's bullshit.

That's not the business I'm in. If you would ask me what business I'm in, I'm going to say I'm in sales and marketing business, or I'm in the marketing and sales business. Then I'm in, I'm going to say I'm in the sales and marketing business or I'm in the marketing and sales business. Then I'm in the people development business. So I think that's important to understand that sales and marketing will drive any company that gets serious with sales and marketing will drive forwards. The most important thing is, let's forget about all the medians and there's fucking billions of them. And I actually did podcasts on 50 ways to make the phone ring. There's more than 50 bloody ways to make the phone ring.

And being an advocate or a follower of Dan Kennedy, something that I learned early, you know, 15 years ago, I decided that marketing was going to be the only way I could grow my business. I realised that I had to find myself a mentor. That mentor for me was Dan Kennedy. Another fellow that I actually reached out to was Jay Abraham. And I've done some one-on-one work with Jay. Jay, he's an incredible guy. So is Dan. I've never actually met Dan or worked with him. But the worst number in marketing is one, right? So that's where you need to have many, many, many ways to make the phone ring.

But the most important thing in marketing, and your listeners won't need to write this down, but the most important thing is you've got to track. You've got to track every fucking call. If the phone ring, if you're using yellow pages, and I've never told anyone to stop using yellow pages because it's not to me, I still think there is calls to be made there, but you need to know your costs of generating a phone call. So the very first, if I go back to before I was even a $1 million company, I needed to track the call. So if that means asking the customer, where did you hear about us? And knowing that and knowing, let's say, for instance,

you spend 10 grand for a Yellow Pages ad and you get 100 calls. So that's 100 bucks or whatever. So knowing your numbers. And this is the biggest lesson I had when I transitioned from doing work for builders to home services company was I was thinking, well, all I need to do is have a bigger ad in the yellow pages than everyone else and I'm going to win. I'm going to kick everyone's ass. That wasn't the case. So what I realized that when I first started marketing and using the yellow pages, it's just a good basis for me 15 years ago. And it doesn't matter what you do, you need to know what it costs. So what I knew back when I first started to market, learn to market, that a yellow pages lead was costing me every time that phone ring, it was costing me about 300 bucks.

Because I knew my numbers, my average ticket was about $200. Well, that's telling me that's a good way to go broke is to spend $300 to generate $200. So then by knowing the numbers, we started to play around with the internet. And we were very early on the internet. I'm thinking around 2004. And I know the US was, you know, all my contractor friends in the US were big on yellow pages and the internet a little bit slower, not much, coming onto the internet. So knowing your numbers, knowing how much it takes to generate a call, knowing the conversion rate, your CSRs, is the conversion rate 30%, 50%, 70%? I know where it needs to be.

Then knowing what your dispatch conversion rate is. Now, that dispatch conversion rate is basically how many calls do you lose because the customer wanted the call done at a time that you couldn't get there. We have what's called capacity management, and we have to manage the expectations of the customer, otherwise we'll lose the job. And then knowing what your tech conversion rate is, knowing your average, your cost that you generate from every job you run. So I think it's not so much a marketing lesson, but to know your numbers and to know what it costs to generate a call.

As I said, Tommy, we can go into 50 ways to generate a call. But I think the most important thing is you've got to track everything. Okay. So I agree with tracking. I just don't agree with tracking with asking where the customer heard about you. I think there's not only a CRM, but if you can't afford a CRM, call CAP and you need to get tracking numbers and you need to own your own tracking numbers. Because if you don't own your own call tracking numbers and the marketing source owns them, I'm sorry, but they use that to sell to your competitors.

So I disagree with... Don't let other companies pay for that stuff. Now, I will tell you that I love what you said because I built this stuff out into a calculator for people that are listening. I don't know if they know about it, but if they go to homeservicemillionaire.com, they go to the resource page, they go to KPI calculator, and I put how much revenue do you want? What is your average ticket? What is your appointments that convert from the technician to sold? So let's say your conversion rate's 80%.

What's the appointment set from form fills and phone calls? That's your booking rate. And how much does it cost to acquire it? And it'll tell you exactly how much money you need to spend in marketing. But what's really cool, as you start playing with those numbers, you realize, wait a minute, if I can get your acquisition costs down to acquire a call,

and then I can get your booking rate a little bit higher, and then I get your average ticket a little bit higher, I just doubled your revenue. You know what's crazy is that most people don't know their numbers. And when they do know them, the one thing I'm telling you my number one goal is, and Alan, this is going to be huge going into this new year, is I'm focused 100% on what's in it for my staff to do the right thing. So a lot of times when people call in, they miss Mondays because it's busy and they're only making 15 bucks or 17 bucks or 20 bucks an hour. Well, the new way of paying them is to pay them a ton of money if they're booking a ton of calls with a high booking rate. So I'm matching up the key performance indicators with their pay and it's survival of the fittest.

So the bad people that don't book phone calls, that don't smile on the phone, that don't have good scorecards, they fall off. And the great people stay on. So my dispatchers, you go to capacity rate. My best technicians are acquiring. You said 50% is good. I want my top guys at 60%, my bottom guys at 30%, and to be working with the 60% guys

because they're running more jobs. So nobody makes money during windshield time. And then for my door department is how many jobs are you able to book? There's all these different KPIs and I don't want to confuse the small guys. And I don't mean small, I just mean you might not be this far into your numbers or business. But

I love when you talked about capacity rate because that's a foreign subject for most people. I know exactly what you're talking about and I love it, but I want to hear your definition of how a dispatcher is motivated to make the capacity board really good for the tech, especially the good top performers. Sure. Now just in regards to tracking numbers, we have tracking numbers for every single thing we do. We've got like 100 different numbers. We have a full digital phone system, so we know where the customer called us from. But this example, and this is why I think you're spot on. There's nothing I disagree with

you because it's perspective. So we do a lot of direct mail and we do mailers and that. So we send out a card with a magnet and it's got an offer and it's got a phone number. But the funny thing is, someone might get that magnet and then they want to go and check you out on the social. They want to go and check you out on Yelp or Google. And then they go in and they see your reviews and then they'll click on your website and they'll call you off the website. But they actually, they were prompted to you from your direct mail, if that makes sense. So that's why I agree 100%, Tommy, but we still like to know where the customer initially saw us. Did they see a truck? Yeah, we saw your bright green truck drive past or one of your yard signs, but they still, and this is where it gets hard to get an exact ROI on your marketing until

you know exactly what prompted them to ring you. And a lot of the times they ring you that, look, they'll even go and they'll click on a paid ad to bloody call you because they've checked you out, the reviews are fine, then they go to your website. So I just wanted to mention that. So capacity management. Okay. So with a business like Omega, 80% of our work that's on our board today came in yesterday and it'll come in today.

And we have capacity is really important. We need to keep the job board full, moving three, four days out. So capacity management is today. We want every truck that we have booked. Tomorrow, we want to have, say, and each of our guys runs about each of our trucks. We've got approximately 20 sales service trucks plus supervisors. Then we've got our projects division. So, we want our service guys to be booked out and we want to be at capacity. Now, in a situation where there's more demand

than there is number of trucks, you don't want to lose a job because the customer is expecting you between seven and nine and you can't get there. So, we have ways to deal with that. But on the other side, what happens when the phone's not ringing and you need to fill the board two, three, four days out and you haven't got the calls? You have to outbound, of course. And we have a big database of service agreement customers, home protection, we call it the Omega Home Service Plan, Home Protection Plan. And we will call and book return visits for our technicians if we don't have the demand call. So there's two types of calls that we have here at Omega. It's a demand call. Customer's got a problem, they want it attended. Then we've got a service call or a maintenance

call where we're putting our technician back in front of an existing customer with a service agreement just to go and maybe do a check of their drains, that sort of thing. So capacity management is about keeping the job board full, looking forward for three, two days ahead. So does that make sense? Oh, I love the capacity board, and I call that you're the efficiency of the technician.

So less windshield time. If he's at a two-hour window job, he finishes it in a half an hour. Your dispatchers need to be focused on getting that next job scheduled up. And also maximize each day. So call tomorrow, call the next day's job, try to get them on today to fill it up because you know how many jobs I've lost because we can't get out there right away. So now you're building more opportunity for tomorrow. And it's amazing because money in my pocket today is much better than assuming it's going to be there tomorrow. So you're absolutely right. And the scary thing about me and you

talking right now, Alan, is that we're pretty... We know this stuff. We've trained with a lot of the right guys. I've read a thousand books on just home service and understanding business. And I don't want to make it to the people listening, and this is my biggest fear, is sometimes we talk a little deep and I want to get it back to the core principles for one man in a truck.

What do you think the next step is going into this next year for him to kick ass and for him to get down to the basics and say, setting goals, really making sure he's top grading, hiring the right people, but where can he make a huge impact, let's say from January to March to get things right? Well, what's your good plan for him

with just going into the first quarter? One would be to service every customer as if they're your only customer. And sometimes the smaller guys, I've helped lots of staff technicians or plumbers, electricians that work for me to start their own business and they go out there and they don't have the marketing plan and they don't have the leads. And it's scary.

So the most important thing I think is to every customer has got to be treated as your last customer and that needs to apply. It doesn't matter whether you're at a one truck or a 200 truck like yourself or wherever you're at. So every customer is your last customer. Just because you're a small guy doesn't mean you need to charge as a small guy. You really do need to be charging as a big guy, okay, if that makes sense. So, you know, you might say, well, I haven't got the overhead, I can charge less, blah, blah, blah.

And marketing is about getting your charge rates right. So an example of that would be when a contractor is sitting down, a one-truck guy is sitting down budgeting his numbers and he's running from home, his own garage at home. And look, I've made all the mistakes that everyone else has made and maybe 10 times more, I feel, but is to put in your budget that you've actually got a factory or I don't know what you call it over there.

You need to budget the rent because you don't want your business, if you want to grow your business to sell, which should be everyone's goal, whether you're going to sell it or not, growing your business to sell is to actually, is working on the business and you've probably heard this a thousand times, working on the business rather than in it.

And that might take a few years to get to that point. But the small guy needs to be thinking as the big guy. And look, I can show you examples of small guys that have gone out there. They've done everything as I've told them to do. They've branded their truck, they've built a nice website, and they charge what they need to charge. Okay. So every customer you need to treat as your only customer and it very well may be. So some cheap ways to get the phone ring would be, I think yard signs are probably the most underutilized or undervalued way of getting a phone call. If you can get some yard signs, they're not that expensive to make them like 10, $15. And don't just put your business name up there.

You want an offer, a special offer. Do something that actually attracts a phone call. Get some yard signs up. Get on. And look, what I know is when I was a one-truck operation, and you were a one-truck operation probably not as long ago as me, you're the marketing manager. You're the sales manager. you're everything in the company

and, you know, like you still need to be thinking about marketing and you need to be finding ways to get phone calls. Referrals is another great one. Look, if you think that price is the most important thing, you're thinking you need to realign that. Price is not the most important thing that the customer looks for. I don't even know where it ranks. It's not number one. Number nine. Number nine.

There you go. You do a phenomenal job and ask, would you be able to recommend me to any of your family and friends? Because the job I've just done for you, I'll do a phenomenal job for them and maybe give them something, maybe a coupon for their next job or, you know, if you maybe offer a discount if they let you put a yard sign up. But look, there's so many ways to get extra calls without spending a lot of money. Look, I think when you've got, if you've got a website, highly recommend it. You've got a Facebook page, just as important. You might have to spend a few bucks a day on some AdWords just to get a couple of calls.

So it's not that difficult for me anyway. But I hope that helps, Tommy. No, no, it's great stuff. I love the marketing side of the whole thing. And looking here, I redid my book. You know, I went from version... Love your book, by the way. Great job, man.

Oh, thank you. So I was just looking. So the original book had a chart in it that showed that there was a blind study done on what garage door customers liked the most important thing. And customers care about you're showing up when you say you are. Their time has become the most important thing. Customers care about you're showing up when you say you will. Their time has become the most important thing. And then secondly, they care about quality.

They want it to work. You can be the cheapest to be out there every other day. And then they want to know that it gets cleaned up right. They want to know that you're safe around their family. You know, drug tested, background check. There's so many other things that they care about. And then price is like then price is relative. It really is relative to what's my opportunity cost of having to come out there every day. So I'm glad you brought that up because so many people out there focus on price and they

can do it for cheaper, but they make it all about price and it's just not the right way to go. So one of the things I wanted to really quickly discuss is when you know your numbers, you look at these Facebook and these Google and some of these pay-per-click guys and the biggest mistake you'll find, and here's what I want everybody to listen to out there, is when you're talking to an expert

about Facebook marketing or Google pay-per-click, if whatever company you're using, you say, what is my cost per click? What are we averaging? What is my cost per call? And if they don't have the numbers on the top of their head and they say, I need to look it up. I don't know this.

I don't know that. They're not interested in your company. And you're never going to kill it. I've got my own team that does all this stuff. And it's going to outdo any other team out there because I pay way less than 20% of my total spend, how most PPC companies do it. So make sure you learn your numbers and make sure the people you're working with around you know your numbers.

Because I can tell you, I've been paying too much for a lot of my marketing. And I knew I was. It's just the hard part is what's the opportunity cost of not paying? So what I like to do, Alan, is if I'm going to add a new marketing piece like TV, radio, or billboards, I like to take the status quo of where I was at the last quarter and see if those moved everything else up like my bell pack, my money mailers, my direct mail. Because there's something to be said about goodwill, which is how many people know about you. And if they've heard

of you before, 95% of us are thinking with our subconscious. So they go, I think I've heard of them, or I think I've solved them out there. And they'll be more attracted to the top line on Google, which will help our conversion rate. So there's a lot. And like you said, we can talk so long about this because it really is my passion. I love to talk about this stuff. So, well, let's just talk briefly about what kind of books out there do you recommend that maybe your top three books that everybody should be reading? I'll probably just go with the books that have impacted me the most. Okay. And this has been,

for me, an absolute game changer in my life and my business. I picked up a book. I was introduced to a fellow by the name of Gino Wickman probably five years ago through Service Roundtable. I think I may have connected with him. Then I read a book that he wrote called Traction. So then I thought, wow, this book's great and recommended there's another book called Rocket Fuel, which is along the same lines as traction and rocket fuel are all part of EOS, the Entrepreneurial Operating System. And then about 12 months ago, I found an EOS coach here in Sydney, a guy by the name of Daniel Davis, and we started to do the EOS course. And so that's probably the traction rocket fuel have probably

impacted me in my life more than anything else. Look, I've got, I've read hundreds of books and I'm not as much a reader as I am a listener. So I have Audible, my library of Audible is huge. I'll probably, I'll go and spend a little bit of time and pick out some of the best books that impact the industry more than anything else. The only other book that comes to mind straight off the top of the head is a book by my good friend, Matt Michelle. Their book is called The Power of Positive Pricing. Now, it's applicable to any industry. And I'd recommend anyone that wants to get a grip on pricing. And Matt Mischel, the owner and CEO of Service Roundtable, Service Nation, is a marketing guru for the industry.

Got some great ideas and wisdom. So his book, The Power of Positive Pricing, is great. But if you want to look at a really good book, like I just discussed, Traction, then Rocket Fuel. And it's more about business operating systems. So that's probably the big ones for me. Okay. And then we talked about a lot of stuff here, Alan. And this stuff is just... This is what I live for. My voice just kind of changes the whole inflection of... Because I get so excited about business. And I know we're helping people out there. So we might have not hit on something we discussed earlier

or you wanted to bring up. Maybe a last thought for the listeners. Do you have anything that you really want to go over that maybe we didn't discuss or one last notion for the listeners? I'm presuming most of your listeners are business owners, small business owners, maybe some bigger business owners

in the home services space, or maybe they're someone that's wanting to start their own business. And highly recommend it. It's probably, don't let the statistics scare you off. I mean, some of the statistics that Tommy's mentioned, it is quite scary, but you need to understand that, you know, in business you might go out there and you might fail initially,

but don't let that stop you from having a go. So for me, just a couple of things, finding a mentor is so important. Now, that mentor may be me, it may be Tommy, it might be someone like, you know, within the industry. But I recommend and, you know, I've met some incredible people that have built billion-dollar businesses. And to me, that's stretching way, way further than my belief system. If I was to sit down and talk to a billionaire about how he's built his business, I'm going, I'm a plumber and how can I build a billion-dollar business? And not saying I can't and not saying I won't, but find a mentor that's probably where you

want to be in the next 12, 18 months, 2 years. And I use, you know, Mike Aguilera was a mentor of mine when I first met Mike. I was probably 5 million. He was around 15 at the time. And that was a good mentor for me because I could see that with my growth formula, I could actually be a $15 million business within a couple of years. And I achieved that. So, find a mentor within your industry or maybe just outside of your industry. I mean, if you're a plumber, you might want to find a mentor from the garage door industry or the pest control industry or an electrical and get to know them. Now, most, I'm not saying all, but most successful business owners don't

mind sharing their wisdom and they don't mind letting you know. You can save so much time by finding someone. If you're a $1 million business, try to find someone that's a $2, $3, $4, $5 million business and just ask them questions about anything. You might have to take them out, buy them a coffee, dinner, or go for a beer, whatever. And they're happy to share that with you. So finding a mentor is really important. It can save years just by taking advice from someone that is where you want to be. So that's really important. And look, focus.

And this is one thing I've learned from my time with the EOS business system is focus and not being distracted by shiny objects. Letting go of the vine. I mean, now my company, my org chart, I've got one report and that's my general manager. And that's where Rocket Fuel actually talks about the relationship between the visionary, and that's me and my business, and the implementer or the integrator, the guy that gets shit done. And I never really had that right. So that's where these books and this coaching has gotten me focused. And look, 10 years ago, I just want to go back 10 years before I hand the mic back to Tommy. My goal was more about having

freedom and having a life. Because I'd worked for, say, 10 years ago. I'd been working for 20 years, hardly had any time off, was working 70, 80, 90, sometimes 100 hours a week, didn't have a lot to show for it. And I got to the point where I said to myself, if I'm going to do this, if I'm going to build and grow up a successful business, I want to be able to take one month, two months, three months away from the business. My focus, it took me several years to do this, but my focus was to build a business that ran without me. And that is really important if you want life. And look, some years I travel up to three months. I go to Europe with my wife and my kids. I come to the US sometimes. Some years I've been to the US six times. We snow ski in Beaver Creek, Colorado. So it's what do you want out of your business?

Set some goals. Find yourself a mentor. Try to get your business running without you. But everyone's got different goals. I know, Tommy, you're probably pushing harder than me at the moment. But that's okay, because we're all different. We all have different goals in that. But for me, lifestyle, being able to actually step outside my business and see it run without me. Hey, look, that was amazing. I have several coaches internally that I pay good money. I have a workout coach

because the accountability is what I need in my life. I need to be just as accountable as I expect everybody else to be. So I think that that's a great words of wisdom is to get somebody that holds you accountable, that you tell your goals to, and they actually make sure you're hitting them because a lot of times we don't see from outside the bubble. It's great advice. I've been going to church a lot more lately. And I love the fact that that's just powerful for my mind to devote my life to understand where I'm working for. So this has been amazing. And I definitely like what you guys are doing. Your goal is $100 million with your plumbing company. And now that's doing HVAC and electrical.

And what I love the most about this and to the listeners is his goal is $100 million without working more than... How many hours do you think you want to put in to get to $100 million a week? How many hours are you willing to dedicate to that? That's not an easy one because when I work, I work.

So I come to work, I don't fuck around and I'll get in and I might put in eight hours, maybe 10 hours, but then I like to have time away from the business. So when I take, if I take a month or two months or three months away, I want very little interaction with the business. I want to know that my staff are actually doing it. So look, when I work, I work and I know you'll be the same. I put in the hours. But I still find time to go to the gym and do stuff that I want to do.

So my average work week would probably still be 40, 50 hours, not as many as it was. But, look, you don't need to kill yourself. You've only got one life and I think you need to, you know, it's okay to be successful and have a multimillion-dollar business, but you've got to have some sanity. You've got to be able to step outside that business and live. And this is what I love about the travel.

When I come to the US, and like I said, six times a year, I'm meeting great people and I hope to meet you at an event soon. But when we travel and go around Europe, we get to meet great people. And my good friend Mark Madison, his simple philosophy in life is it's about the people you meet and the books you read. Hey, listen, you just said that. Listen to this. Rocket Fuel, the one essential combination that will get you more of what you want.

Rocket Fuel, the one essential combination that will get you more of what you want. Rocket Fuel, baby. I just ordered it and I'm up to 790, 790 books on Audible. But I like what you just said. You are about what you read. And sometimes you don't have the opportunity to hang out with billionaires, but you have the opportunity to read the books by billionaires and spend more time

instead of going out with that alcoholic friend that you're gonna do 20 shots with this Saturday. Take one weekend and listen to four books. Prioritize what you're going to get done. Don't be a person that listens to every new idea, but set a path on the projects that you need to hit to either save you the most money or make you the most. Put it into Basecamp or Trello. Focus on your top three, your top five, maybe even your top one. If the top one is big, split it into 10 different things so you can get there by the end of the month. And don't let anybody hijack your time.

I like what you said too, is when I go into work, I work. And you don't waste a lot of time. So a lot of us, we get hijacked. We take our time to look at email. That's three hours of our day. We're sitting down with vendors. That's two hours.

Focus on what's going to move the needle the fastest. Focus on those things this next year and you'll be successful. So I got to tell you, Alan, you are an amazing guy and I want to spend some time with you after this podcast just to go over a couple of things.

But I'm sure you help the listeners out a ton and I want to get you back on from maybe every few months if you're available. I'll make myself available. How's that? I love it. I love it. I love it.

Me too. I love to see this great industry grow and it's people like you. And look, to me somewhat, but that actually help the industry. And I'm, you know, something also from me, Tommy, is I love to show not just my staff,

but other business owners, what is possible. And there's another fellow, and I don't know whether you'd get him on a podcast, but a chap by the name of Ken Goodrich, who gets all the air conditioning. I think he's just, his business is at about 100 million. Now, there's a guy that has an incredible philosophy in business and life. And look, I'd love to come back on your podcast. I want to be able to add as much value as I can. I think it's something I said to you last week

when we connected or the week before. I just want to add value. But I don't want to just add value to someone starting out. Hopefully, I can add value to a business that's a mature business that's established and just wants to go to the next level. So whatever I can do to help Tommy, I'm here, my friend. So Ken Goodrich just bought 10 of my books.

He's a good buddy of mine. He actually sold the majority of a stake of his company. And he's a professional at buying and selling businesses. And yeah, he's local here. He's in Vegas, California. And he's actually in Phoenix. I just talked to him on the phone about a week ago. I yeah, he's local here. He's in Vegas, California, and he's actually in Phoenix. I just talked to him on the phone about a week ago. I'll get him on the podcast.

I haven't even really... Some of my closest people around me, Josh Kelly, some of these different guys haven't even been on the podcast. And sometimes you forget who's in your... Right in my own neighborhood here. So I will do that. And I appreciate everything and just stay on here,

but I hope everything's well. And I hope everybody out there took all this stuff and make good use of it. Thank you for listening. Appreciate it. Hey guys, I really appreciate you tuning into the podcast. I wanted to let you know that my book is available right now on Amazon.

It's called The Home Service Millionaire. That's homeservicemillionaire.com. Just go to the website. It'll show you exactly where and how to buy the book. I poured two years of knowledge into this book and I had 12 contributors. Everybody from the COO at HomeAdvisor to the CEO of Valpak

and of course, Ara, the CEO of Service Titan. It tells you how to have the right mindset and become a millionaire and think like a millionaire. It goes into exactly how to turn on lead generation. Have those phones ringing off the hook for the customers that you want to be calling where you can make money and get great reviews. It also goes into simple things like how to attract A players. Listen, if you want a great apple pie, you need to buy good apples and you need to know where to buy those apples. And it also talks about simple things like knowing how to keep the score. You should have your financial check every week.

You should know exactly what's coming in and out of your account. You should know when to cut advertising that's not working. And more than anything, you should know how to cut employees that aren't making it for you. Listen, you might have a big heart, but this book is going to show you how to make decisions built on numbers. I hope you pick up the book, and I really appreciate everything. I hope you're having a great day. Tune in next week. Thank you.