The Home Service Expert Podcast - Q&A with Tommy - Fine-Tuning Your Business Operations with a Robust Financial Roadmap

Episode Date: October 27, 2023

Tommy Mello is the author of Home Service Millionaire and the founder of A1 Garage Doors, a $200 million-plus home service business with over 700 employees in 19 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 Expert podcast, Tommy answers your biggest questions about the performance pay models, franchising strategies, lead generation, marketing, hiring technicians…

Three things that I think every business owner needs to be good at. You got to understand financial literacy. You got to understand if you're making or not making money. You got to understand how to look at numbers. Number two, marketing. An owner, if you're not good at marketing and you're not good at networking, I mean, you're the face of the company. You got to hire a great person and they're going to own you when you hire this person. And number three, you got to be a really, really honorable person. You got to commit to what you say you hire this person. And number three, you got to be a really, really honorable person. You got to commit to what you say you're going to do. You can't tell people I'm going to get you a raise at the end of this quarter. I'm going to give you a guarantee and then change it.

When you say stuff and you look at somebody and you shake their hand or you sign up on something and then you don't keep your word, There's so many business owners out there. They just fly through people. Nobody trusts them. Very few people. They get lucky. They keep burning people. There's a show called American Greed that shows who these people are. Keep your word, understand your financials and understand marketing and networking. Those are the three things. 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. Before we get started, I wanted to share two important things with you. First, I want you to implement what you learned today. To do that, you'll have to take a lot of notes, but I also want you to fully concentrate on the interview. So I asked the team to take notes for you. Just text NOTES to 888-526-1299. That's 888-526-1299. That's 888-526-1299. And you'll receive a link to download the notes from today's episode. Also, if you haven't got your copy of my newest book, Elevate, please go check it out. I'll share with you how I attracted and developed a winning team that helped me build a $200 million

company in 22 states. Just go to elevateandwin.com forward slash podcast to get your copy. Now let's go back into the interview. All right, Q&A, here we go. We are in Flagstaff with the entire management team, all of the market managers right now. There's 18 that a lot of them manage multiple markets. And very, very exciting times.

We are setting our budgets for next year. We're going through every detail of what the market managers can affect. Discount rates, not running the credit card through the machines properly, special order parts. And basically, my message to them is, there are certain technicians that we cringe when we look at the phone. They call all the time. They tend to be a lot of work.

And they tend to be sometimes they're a fungus. And I hate to say this, but sometimes certain technicians, they literally ruin everything around them. They call everybody in that market. And'll talk about, they just cause drama. And it's one thing I want you guys to really stay away from. You know, recently, about 60 days, I've been focused on health, nutrition, sleep, water, protein, all the good stuff. And I'm on four peptides. I might have probably mentioned this several times

now, but I feel amazing. I'm lifting more weight than I did since my early twenties. And I'm so much more focused. I can't tell you guys. Dr. J did my blood test. He did my saliva and urine. And I just got off a call with him. I'm going to go get stem cells by the end of the year. I got knee braces because I'm starting to do more with my legs. My knees aren't bad, but I want to get everything full body in shape. So that's what's new with me. Hopefully you guys have read Home Service Millionaire.

And the next book you guys got to check out is elevate and if you're not in the home service expert group yet get into the group just submit it's free and bring up a lot of great questions i just got done with pantheon what an amazing event great people you know what i get about pantheon is not only meeting great people finding out what their struggles are where they're winning but i get to talk to them about you know who they contact what they're doing for marketing and more importantly i get to know all the service titan team and find out how to really move the needle so i went in with a plan it was successful got to see a lot of good friends and speaking of which we got the Freedom Event coming up, which is going to be hands down the best event of the year, I believe, by far. It's November 1st, 2nd, and 3rd. It's freedomevent.com. I'll have the DeLorean there done up like Back to the Future. I'll have Kit from Knight Rider. You're not coming to see cars, but it's going to be pretty fun, cool pictures.

Lots of entertainment, great place to bring the family, but just come with a notebook and an open mind. And I promise you, you'll leave there a new leader of your company. Got a lot of questions. So let's just dive into it. Can you talk about going from yourself to hiring your first employee? How did you do it? How did you keep them busy? Yeah. You know, this is all going all the way back to 2007, and it's bringing back, it's been a long time. First and foremost, I recommend Al Levy understanding the manuals and making the changes in the manuals you need to make. I got really frustrated 10 years into the program, 10 years into my business career with garage doors. I met Al Levy and he did five ride alongs. And he said, do you realize none of

your guys do springs the same way? Do you realize nobody changes rollers the same way? You don't have any SOPs. So when you're out there by yourself, you should be thinking about what's the safest, most effective way to do this. Timely, safe, efficient, no warranty calls. Building that tech manual is very, very important in creating SOPs and checklists. The next thing is the mindset of nobody's going to be as good as you. And a lot of people get the misconception of, why don't they work as hard as me? They don't own the business. They're not managers. They don't have bonus structures like that. No one's going to be as good as you. When you hire

a lot of people, you're going to find people that are better than you at certain aspects of the business, I hope. I hope you're the dumbest guy in the room eventually. I hope you got technicians that supersede any of your expectations. Well, right now we're coming upon 800 employees. And if they do 70% of what I could do, that's 56,000% of what I could create. You could do the math. I just did it. 57,000%. So you got to be okay with people learning on their own and making mistakes.

And it's so hard for a business owner to accept that. Well, did you create a system? Let me see the system. Is the system being followed? Is it the right system? Because most of the time it's not, or it's not being followed. And there's no checks and balances. The biggest thing an owner's got to do, first of all, is get a hold of their schedule

and make sure they're not a firefighter getting distracted all the time. I said in my Pantheon speeches, the hustler had to die. I literally had to let the hustler die and become more sophisticated in the way I think about things. I start delegating properly. When I hired the first guy, I spent a lot of time training, and they didn't come close to my numbers. And I had to accept that. The next guy did a little bit better than the couple 1099s.

But when I really learned how to train and build curriculum around training and a learning management system, which was way later, I made a lot of mistakes. Going back to know what I know now, I would have done it completely different. I think the biggest problem with a one-man shop is normally they're not funded.

Normally they don't have enough money. They've got to go back out and do the work themselves. They've got to make that extra hundred grand they'd be paying somebody to pay the bills because their price book's not good. Their brand's not done right. And if your brand's not right, I said this at Pantheon, you know, I used to think 20, 30 grand to build a brand, that's outrageous. That said this at Pantheon. You know, I used to think 20, 30 grand to build a brand. That's outrageous.

That's a lot of freaking money. But then I said, wait a minute, the brand and what Dan Antonelli did for me after I met Al Levy and he recommended Dan Antonelli was I got to charge more. My PPC costs came down dramatically. I created the stickers, the billboards, the yard signs that all look the same. The website looks the same. You go to a1grouch.com and it still needs work. So what I would tell you is get the brand right if you want to charge the right price.

A lot of guys go, I don't need branding. I'm getting enough phone calls. Look at your customer base. You can't charge the right prices if your brand doesn't look 100% and you got somebody that shows up in a wrap vehicle with a uniform that's got a big smile on their face with a good software-like service site and the text message is on the way. What does a brand do? It allows you to charge more prices, raise your price book. It allows you to recruit easier. It allows you to lower all your marketing costs. It allows you higher

click-through rates. It allows you better reviews. Brand recognition. I can't explain how important that is. People don't call it a tissue paper. They call it a Kleenex. Kleenex is a brand. They did an amazing job branding. So people always ask me, what's the most important thing? And I didn't realize this till the last couple of years when i'm looking at our numbers going man what if my what if i didn't wrap my trucks could i still stay busy was i still making money yes but the opportunity cost is way too strong to build a brand where people say oh yeah i remember a1 garage for service maybe they didn't even type in a1 garage maybe they typed in Garage Door Repair Phoenix and then boom, total recall. They remembered my name.

A lot of people just go, I'm just going to cheap out on this. And I did the same thing. I went through four wraps. I went through five CRMs before I did the right thing. And a lot of people say, I'm just not ready for that yet. My question is, why did you go into business? And I realize this is expensive to do these things. It's expensive to get on a CRM and

build out a training center and get branded correctly. But by kicking the can down the road, how much does that cost? How much does it cost to not do these things is my question. To be the lowest price in a market is a race to the bottom, period. So hopefully that answered your question. I went off on a little tangent there. Jared said, I own a tree service in Atlanta and have been in business for five years. I'm in a very comfortable market and I have a problem getting full-time work. My GMB is great. My website needs help and SEO. I have tried ads, HomeAdvisor, Thumbtack, Yelp, Facebook. They all don't seem to be doing anything for their own reasons. How do I get my phone to ring consistently? I'm considering pulling out yard signs as the next test. What is the best

all-around campaign to get full-time work? Well, I'll tell you this. There's nothing better than relationships. B&I meetings still work. Now, here's the question. A lot of people say, I'm not getting the leads I was getting a year or two ago. You can call your marketing company and try to get a hold of Google and try to do some stuff. But ultimately, are you the highest paid company in your market? Are you converting every lead? Are you getting a review on Nextdoor, Yelp, and Google on every call, getting a yard sign, getting the HOA president? If you're not, why do you need more calls? Are you getting service agreements? If you're a tree guy, are you getting maintenance on the trees? I look at this and I say, are you getting video testimonials and having the customer post those on Facebook?

It's easy to call your marketing company and say, do a better job. I'm not getting the same amount of leads. But what are you doing in your control? You can blame everything on Bidenomics. You could blame it on Ukraine versus Russia. You could blame it on whatever you like. But what are you doing that you could control? And here's another thing I'd say.

You tried, and Jared, I'm saying this with big heart here. I'm not trying to criticize, and that's not what I'm doing at all. Home advisors, Thumbtack, Yelp, and Facebook, every one of those work, every single one of them. But you got to be willing to spend the money. And I guarantee you, if you go talk, you talk to the Angie rep and say, who's the number one provider in another market? I'm calling that guy up saying, what's working for you? How are you doing it?

What technology are you using for Angie? The number one guy you see on Google when you type in HVAC, call that company, find out who they're using. Success leaves clues. Why not pick up the phone and ASK my favorite three letters and ask? What's stopping you? So many people have too much pride and they're afraid to change. Every Craigslist still works.

It doesn't attract the right clients. Home warranties still work. It's not my clientele. I used to think everybody with a garage was my client. And then I realized I was way wrong. People call A1 when they want peace of mind. They want it done the same day. They want a great warranty. Our parts are unmatched. People say I got the same springs. No, they don't. I doubt they went 80,000 cycle. And

I appreciate the people that copy. Everybody in Grounds Door Freedom, I told to do what we're doing. We trademarked our parts. Doesn't mean you can't get a quality part of the same caliber. Apples to apples, I always say I sell oranges. I'm going to go to all these questions in a minute. I just want to get through. Well, let me just elaborate a little bit more on Jared's question. LSA, GMB, organic, make sure your website kicks ass. Answer the FAQs, invest in Google, I always talk about that, and double down on relationships. Take advantage of the clients you have. Have them introduce you to the HOA president. Go to the B&I meetings.

Do the simple guerrilla marketing. If you don't put yourself out there aggressively, it's hard, hard to make an impact in a market. I will tell you guys, Phoenix would not be the market it was. I just booked three calls earlier, personally, that came through Facebook because people know who I am because I'm always posting on social media. I tell all my market managers, I'm going to make the phone ring. But there's nothing. I explained to these guys, I got a guy, Ryan Ford, that went to Northern Arizona six years ago. It was our worst performing market.

When he got done, there was two technicians there. Now there's nine. He talked to every foreman, every builder, every real estate agent, every inspector in that market every day. And single-handedly made it the best market we have. Number one market in A1 Garage vs. Northern Arizona. Great group of guys. He didn't tolerate second best.

He recruited and he sent a guy home. He didn't tolerate second best. He recruited and he sent a guy home if they didn't show up on time. You know, marketing is a function of sales without sales conversion rate and getting these things that I talked about. Marketing is the most important thing of a company. But if you don't convert every single lead, if you're not answering your phone, if you're not open nights and weekends. You don't answer your forms ever. Speed to lead. You're never going to win. And in this day and age, you better be damn good. People say I'm not open Sundays. Some people love to work Sundays. You got to find those people and hire them. You know, some people celebrate religion on Sundays. That's great. Doesn't mean everybody does. Doesn't mean your customers do. I don't understand that. You don't pick when

something breaks or when you want a tree installed. Carlos said, I've been running a business for the past eight years and I found out that a plan is the key foundation to great businesses. Could you tell me how you created a financial plan in your company when you were what you call in your book firefighter? You know, a lot of people are like, man, you talk about Al Levy all the time, but he turned the lights on. I was good at business. I was a hustler. I knew how to make the phone ring. I knew how to do sales, but without having the financial plan. So he hooked me up with Alan Rohr. Um, and Alan Rohr came in and coached us and taught us a lot more how to read financials in a home service company al's not the best at everything he admits that so he the people that i trusted

i asked for the most help i'm in a group right now with cristiano ishmael tom howard just a bunch of great guys chris hoffman um travis ringy and we lean on each other. And it's an amazing group. Chad Peterman, Aaron Gaynor, I'm leaving a couple guys out. But once you get a trusted advisor, they know other great people to use. How I created the plan is first I got systematic, standard operating procedures, checklists, manuals. When we partnered with Cortec, the PE company, they gave us a set of PowerPoints that we needed to create, and most of it's financials. And these guys are the most advanced people I've ever seen. They took our margin from 17% to 23% very quickly. We did a lot of work, but I've always said, hire the most amazing CFO, get a fractional CFO, know your known financial

position. When you know your known financial position and you see, is my discounting too much? Where am I losing money? Is my price book wrong? Am I taking advantage of the tax laws? Am I doing accelerated depreciation? Am I taking advantage of the tax laws? Am I doing accelerated depreciation? Am I using the Augusta tax rule? The right CFO is so important and the right controller. Some people just have no control of spending. Actually, most businesses don't. They're growing when they shouldn't be, and they're taking the foot off the gas when they should be shouldn't be like the cfo handles all of that and to expect somebody like me or you who probably don't have listen i think both of us could be good at anything we put our mind to but why would we want to master a craft that's not we're not passionate about or we're not great at we don't

have a lot of experience when you're gonna have somebody come in and teach you all of these things, that's got a track record, that's going to spend 20 hours a week tops for the first two months and down to five hours a week. They're going to build in the systems, the bill pay, the APIs, the automatic reconciliation to really know where you're at. The numbers don't lie. You know, I showed everybody earlier, I did an hour and a half. I went two hours, actually. I said, no one quits their job. People quit their managers. People quit their leaders. People quit their mentors that are in their office. And I know that's off subject here, but the fact is that if you're not nourishing your people and going out there finding the answers you need, and you don't make the, if you commit to getting more leads

and you don't come through, you're a liar. They're going to stop following you. Period. I'm sorry. I'm not here to blow any smoke and help you guys feel good about yourselves. I'm here because I want you guys to do better. I'm here because I've learned a lot and I'm continuing to learn a lot. I like to be the dumbest guy in the room, but I'm not going to tell you guys stuff you want to hear. I'm going to tell you straight up that when you lie to your people or lie to yourself, if you tell yourself you're going to quit smoking or get in shape and you don't, it's very, very hard for people to take you seriously. When you get a new idea and it doesn't get followed through, no one in that company gets excited to come into work and work for you.

When you read a book and say, we're going to do a book club or whatever it is, I haven't been perfect. But when I make mistakes, at least I can reflect and say, I need to do a better job. I failed at so many things. The first thing I said, when somebody's got a bad drug problem or alcohol problem or whatever it might be, porn addiction, what's the first thing they need to do? Admit they have a problem. Most people, they don't think they have a problem. They say right now it's a lead problem or no one wants to work or these millennials don't try as hard. Instead of saying I have a

problem with me is my leadership skill my culture is broken my brand is not right those are the facts we're going to talk a lot about this stuff at the freedom event ross said how do i integrate a fair bonus structure for all staff across different parts of the business you know we just went through this in garage door. The first thing you need to do is find the one person in each department that's the top producer that everybody looks up to. Your cheerleader. And you need to take their last month's pay and work with it in Excel and put, how do I help them win when I win? How does this help the company and the profit and the morale? And how do they get to win?

And the bigger that I win, the bigger they win and vice versa. And then you say, listen, we're going to roll this out. I'm going to work with you one-on-one and here's the deal I'm going to make with you. We'll call him Paul. Paul, I'm going to pay you. This is not a definite plan. I'm working on it. The way that I look at it, I want you to help me break the plan. I want you to take advantage of it. I'm going to pay you it, I want you to help me break the plan. I want you to take advantage of it. I'm going to pay you whichever is more, your old pay or your new pay. And I can't tell you your burden costs. And you need somebody good at Excel.

And you need to run through what's important. And here's the secret that Al taught me. You need to be able to go home and explain it to your wife how you get paid. It can't be take the denominator, put it in the quadratic formula. If I get an extra review, it's an extra three bucks. If I recruit, it can't be quantum physics. Make it simple. Keep it simple, Simon. Amon said, how early do you start the recruiting process for a salesperson? We will not need a new salesman until two months from now, but would really want to have them fully trained by then. Well, it takes two months to go through to recruit.

Somebody usually takes a month and they got to go through two months of training. I always am hiring. I don't hire when I need somebody. I hire the people that are going to be five out of five, that are going to be the little drama, that are going to go above and beyond a network and go to a B&I meeting and do everything they can do. They'll go out there and they'll pretty much do anything that I need them to do as long as I'm holding up my end of the bargain. The best time to get a great person is when they become available. We just recruited an amazing all-star, Amy Spence. She called me first, and I let her interview with me, then Luke, then Jim, then Doug at

Cortec, and he said, pull the trigger. They're amazing. She's going to do amazing things. I wasn't looking for anybody. She came about, and we nabbed, we got her right away. Always, always, always be recruiting. I don't say always be closing. I say always be recruiting. Jason said, how involved are you in the Christmas light installation company

or other investments on top of A1? Listen, I did the math of A1 when we do a process, another process in 2026. And the math would be, you know, it's starting to be a million bucks a day is what I'll make if I hit my goals. What could I do to even come close to that? Now, I hired a team at Tommy Mello Ventures that can work on other things and investments for me. And the team is getting dangerous. They're amazing people.

They can do things I can't do. And I'm a money guy now. I put money into companies. And yes, you know, I'll meet with these guys, talk to these guys. I do shop tours for free. I'm always willing. I go speak at events. That's what I need for my nourishment.

My meditation is literally this stuff right here that I'm doing. When I'm taking notes, when I'm listening to podcasts, when I go get to speak, I'm learning about new ideas. I'm learning what's going out there. So I'm involved with those, but I can't let those take. It's 99% A1. I bleed A1. If I don't bleed A1, I'm letting down 800 people. I see a lot of people that are like, I'm starting a restaurant. I'm going to invest in this club. I'm going to do this. I'm going to do that. I'm going to do this. First of all, you're letting down your people. Secondly, you've got to do the math. What's my best investment? What do I love to do? And yes, you could be successful at anything. I see so many freaking great entrepreneurs get

sidetracked. So many, you know, my buddy Dave Carson said, if you put all your eggs in a basket, it will fill up into other things. Mine's starting to fill into other things. But A1 is my passion, man. My face is on the side of the truck. I got the caricature, caricature, whatever it's called, character. Tim White said,

I'd love to switch my team to performance pay. How did you do it? And did you test it slowly or use tech employees to spark interest from others? You need to celebrate, say, listen, when you get that one success story, and just, you gotta be able to build a budget into the future of how much you're gonna make.

And just understand when you're doing performance pay, especially for technicians and installers, it literally has a direct correlation to the price book that you make. And every time you raise your prices, the technicians and installers get a raise. You could never take back. Once you roll it out to everybody and you lower it, you look like an asshole. Start low, make sure they're making more than they would have made hourly or salary or however you have it. And then say, I could always move up.

You ever heard that expression? What is it? No good deed is unpunished. When the government gives away certain welfare projects, Social Security, whatever it might be, Medicare, there's no way to take it back. It's almost impossible to lose votes. So I always say, start small and grow. You've got to start thinking about what am I going to need for my infrastructure, right? I'm going to need four more trainers, five times, four more recruiters.

I'm going to need this person. I'm going to need, we got a market acceleration technician trainer program, traveling techs. We've got virtual product specialists. We've got lead techs. We've got all these different positions getting created so when you budget these things having a good financial person on your team is so important because they could start to put out the model they could do a modeling to show you how profitable you'll be and get your orange chart dialed in first to know what heads you're going to have to add to make this work as you start to grow. Steven said, when you're looking at buying out a company,

the asking price is right. EBITDA is good. Net is great. But say their service pricing is way lower than yours. Would you still move forward to buy the company out? Example, my company's average ticket right now is $791. The company I'm looking at, their average service is $150. Their average AC install is $4,900. And my average install is $14,000.

I've never bought a company before, so looking for advice. I'll tell you guys the secret formula right now. Grab a pen. You look at their average ticket. You look at their conversion rate. You look at their booking rate. You look at their conversion rate. You look at their booking rate. You look at their closed out any nights or weekends. And you overlap your key performance indicators to those. You look at their cost per acquisition. Normally, I bet you, Stephen, this company is getting enough business without spending hardly anything in marketing.

So there's a couple of ways to do it. You're going to want to buy companies that are worse than you because you know you can simply, boom, turn all those KPIs up to your level. But you can't do it with a crappy brand. So either you roll it up in the years or you rebrand them and get them dialed in. Because I guarantee you the $4,900 average sale, you're probably going to need to clean house, make those guys installers, make them maintenance techs. I don't know. But you're going to have to be able to recruit all stars quickly, first and foremost. And I'd have them brewing in the process right before the

paperwork sign and the check goes to this new company. Those are the best companies to buy, things you know you could affect the outcome and change those KPIs. It's wonderful. You'll find that, let's say you pay them eight times. Let's say you double their conversion rate, double their average ticket. You just brought that eight times down to two-year payback. Normally, it would take eight years at their current. So you look for things that you could pull down the multiple you gave them. I hope that makes sense.

Comment from TikTok. How does one approach finding oranges to sell in an Apple market? How does one approach finding oranges? Okay, I'll give you guys an example. When you guys open up your Valpax or your Clipper magazine, or you go look at websites, you'll notice most of them say $75 off, $100 off, or this much for a tune-up. That's an apple, apples to apples. How do I sell it? What's an orange? I don't want to do $29 tune-ups. So I'm not going to go down if I see a $29 tune-up. The old Tommy, the hustler, would have said $19 in this market. Now I say, how do I build the value and put a kit together, a surge protector, an operator bracket, a MyQ system, anything that delivers more

value that no one else has, then they'll start to copy you. And then you do new ones and you're the one creating the marketplace. You're not copying them. You're saying, how do I pack more value into this to get me out to the home, to give me an opportunity to be able to... There's other things on the door or the HVAC unit or the plumbing that, you know, you go out to a water heater, you better be doing a checklist on every single toilet, sink, P-trap, garbage disposal, looking at everything outside of their plumbing. I mean, there's a million things you should be doing. You're looking to get opportunities and you do that by offering oranges. Lori said, do people who refer work get referral checks if work is done? Absolutely. It's called employee

generated leads and it's called affiliates. And affiliate marketing is one of the best ways in this day and age. You get powerhouse social media influencers. Anybody that does that, as long as you have a great way to know it came from them. And that's called attribution. And attribution is difficult. So make sure you invest in a system and have ways to track it. Because the worst thing you want to do is tell people, I'm going to give you credit. And a lot of times they'll say the neighbor called because of my job. Well, unless you gave them a trackable phone number or a link, you know,

it's very hard if you don't have real attribution to be able to narrow it down to that person did this. So what I would say is if you talk to the neighbor, make sure they fill out your link, right? And it's called affiliate software, affiliate tracking software. All right. I answered those questions. Let's go here. There's a lot of things here. Hey, Tommy, you're a master networker. How do you approach networking and meeting people you admire and wanted to get to know?

Well, I started a podcast. And when people listen to me, they know one thing. I'm passionate. They look at me and they say, man, that guy, that guy is excited about life. That guy is the guy that's moving and shaking things. That guy is willing to give back 10 more than he's willing to receive. So typically, one of the things Alex Tremose just said is, the thing that sucks is what can I do for you?

Hey, listen, I just met you. What can I help you with? What do you need? Oh, I'm I just met you. What can I help you with? What do you need? Oh, I'm glad I met you. Here's everything I need. No one's going to answer that question. Read the book, How to Win Friends and Influence People. Listen, genuinely listen. Take notes when people are talking. Say, oh my gosh, it's a great idea. Can we jump on a meeting and get my teammates to listen to this? People love when you're interested in them. Use their names. Read that book. It'll help change everything. Hey, Tommy, I appreciate you live streaming again. Is right now a good time to start a garage door business? And what would you recommend me to get started? There's never a good

or bad time to start a business. I would say what you need to get started is you need to have a savings account. Most people I know do not have enough money. Therefore, they're stuck in the truck for the first five years. They quit their job. They had a bad day at work. They hate their boss. And they say, I'm going to go start my own thing. You need to be well-funded or you're going to have to put in a lot of time, effort, and energy in working in the business. So well-funded is the first thing. Number two is if you already have a job, start the business now. Start doing SEO. Start getting reviews from your friends, neighbors, and family doing very affordable tune-ups. Get the reviews. I think people start,

you should have a good stream of income coming in and start the business unless you're well-funded. I think anytime is a good time to start a business because right now I think a lot of businesses are not hitting their quota. They expanded too quickly. They hired too many people during COVID and they thought, oh my gosh, I'm going to build my budget on this demand, meaning I'm going to get as many calls I'm getting today. If you didn't make it in business during COVID, when the phones were ringing off the hook, we were considered essential and we were getting stimulus checks, then you should not be in business.

I'm sorry. The hard truth. Go work for somebody. Be an entrepreneur. If you didn't make a freaking killing during the best time we've ever seen in the history of mankind in home service? There's problems. Maybe it's you. Maybe you're not ready.

I know I go off on a tangent. I can't help it. I would say anytime's a good time to start a business if you're the right individual that's self-motivated, that knows how to network and reach out to people for advice. Problem is most people say, I can't come to the Freedom event.

I got too much going on with my business. You can't afford to leave. How are you going to grow? How are you going to grow? They say, you know, I'm doing some technician training for everybody involved in Freedom. And they say, I can't afford to send any of my texts.

I got too much business. Most of the guys that came to my training have doubled their average ticket. They've got a higher conversion rate. They get more reviews. They're happier at work. They make more money. They got less turnover. How could you afford not to? That's the question. Mind boggling. But yes, I think it's a great time to start a garage door business. If I were going back into business, I'd be looking at roofing and I'd be looking at HVAC. HVAC, there's a lot of people in it. I think roofing is a great industry. I think gutters are a great industry. I think there's a lot of opportunities right now. I go now, and I've talked to a lot of people about this. I run 15 to 18,000 jobs a month.

If I was doing that in roofing, I'd be doing $5 billion a year. The average ticket and window washing is less than garage doors. Garage doors is less than HVAC. Garage doors is less than plumbing. Garage doors is less than roofing. Garage doors is less than windows. Garage doors is less than aluminum siding.

I know everybody says, man, Tommy did this. I'm just a dude from Detroit. I didn't have a lot of money growing up. If Tommy could do it, I could do it. But here's the deal. Why make your life harder? I promise you on everything I own, everything wholly, if I had a restart and I didn't know anything about an industry, I would be going into an industry with a high average ticket. The competition is the same. People say HVAC, there's a lot of competition. If I started an HVAC company, I'd do 20 million in the first year, but I'm well-funded and I know the marketing. I know

the recruiting. I know the sales. I don't need to know everything about an industry to make a lot of money in it. Thank you guys. I appreciate the compliments. What's that pantheon last week in your seminar? Great job looking toward November two. We're implementing several things since last week, like you said, to implement fast. We're also looking at having an in-house marketing coordinator to drive leads, build brand, and still work with our digital marketing campaign. Do you recommend this position and what time is it needed? What are the biggest pros and cons to this position?

I got a guy named Robert, my new VP of marketing. I still have Chase, amazing guy, hardworking, amazing team. You know what he told me two days ago on the phone, which was a Sunday? He said, you're not holding our partners accountable. He said, no agency will be successful without you keeping your head or your foot on their neck. He said, if you're not pushing, if you're not asking questions, if you're not working on the creative, if you're not getting reports on the phone three times a week, asking them what else they could do, ASK, you're losing the game. They'll kill it the first 90 days and then they're going to do shit. And the owners over here working on hiring a guy when marketing is everything. If you don't have your eye on marketing and

financials, another thing Al Tommy, then you're crazy. Those are the two things you need to master. Marketing covers recruiting. It covers getting clients. It covers acquisitions. And the financials tell you exactly what direction you need to focus on today. So you absolutely need somebody in-house. channel angie home advisor yelp anything will ever work without you working on their system and getting feedback and finding out what the kpis need to be of the best of the best and how to push them and motivate them and say what's in it for me to work with me harder i tell my marketing companies i'm gonna get you a lot more clients if you kick ass i tell i get their three-year plan their five-year plan i do, I'm going to get you a lot more clients if you kick ass. I get their three-year plan, their five-year plan.

I do things that are going to help them grow. I give them testimonials. I'll make a video saying I believe in this company. They'll put it on their website. I make sure there's something in it for them. What is the best way to pay for performance for a marketing coordinator? You know, it depends on the size of the company. I mean obviously

The problem is with just leads generated I had a PBC company A decade ago that got me more leads Than I knew what to do with The problem is most of them were remote control They wanted to buy new remotes And they were so happy They're like we generated triple the amount of calls

Whatever I'm like but they're not turning into money So the marketing Let me show you guys how to build a budget. Ready? How much money do you want to do? 10 million. You divide that, and I've done this a million times on this, divide that by your average ticket. Divide that by your conversion rate. Divide that by your booking rate. And then multiply that by your conversion rate, divide that by your booking rate, and then multiply that by your cost per acquisition. That's your marketing budget. And what we care about is, did you get the right amount of leads and were they the right leads?

So in the beginning, when you hire a market coordinator, you want to base everything off of budget. And they cannot help now never ever ever when you're building performance pay allow something to be affected in that position that you're bonusing them on that they can't affect they can't affect the average ticket or conversion rate but you know for beyond a shadow of a doubt when you're tracking attribution the marketing campaign that it's no good every technician is failing at this lead. So it really comes down to leads per budget. But what I would do in a new position is say, here's what we're going to do for this quarter. We're going to get KPIs dialed in. And if you hit, here's the leads we got, here's the average

tickets. I would just do it on straight leads. you don't have a great budget. And say, if you're able to up the leads or lower the cost per acquisition, both of those are very valuable, I'm going to give you 10 grand. I would do something to put their skin in the game. But here's the problem. Most people are hiring marketing directors and bringing in people that aren't very great. They never worked in the home service industry. They don't have contacts. I doubt very many people on this, and I'm not trying to talk down,

but can afford what it takes to get an amazing person at that role. So sometimes it's best to outsource, but you need that person to hold your people accountable. So in the case that I'm talking about for the director, how much more juice could they squeeze? I'm getting ready to ask one of my vendors that does our media buys

for every market we green-filled into to not charge us for the first 90 days. And they're going to say, listen, we've got to pay our bills too. And I'm going to say, I'm paying your bills with the other 40 markets, but I need something to be able to grow and take market share. I want to reinvest that money, which allows you to spend a lot more money long-term. Are you my partner long-term or

do you want the short-term win? Before we continue this interview, I wanted to remind you about something important. We're a few weeks away from the event that could change your life. Do you have a clear plan for your business in 2024? Do you know who you need to get on board to achieve that plan? Do you have the connections to turn that plan into a reality? If not, the Freedom Event is your opportunity to change that forever But every day that passes, this opportunity is fading away And I don't want you to regret not being here

Because hundreds of other business owners have already made up their minds And got their tickets They've made a decision to step up and learn from the brightest minds in the home service industry. Not just learn, but also build a network to help them turn their notes and their notepads into actionable items. I'm talking about the opportunity to connect with the same people who helped me build my $200 million garage door repair and installation company. So which side of the fence do you want to be on? The one side looking from the outside or the one joining us in shaping the future of the industry.

If you're ready to elevate your business, create more freedom for yourself and your family and make a bunch of money in the process. I invite you to join us at the freedom event this November, go to Tommy mellow.com forward slash freedom and get your tickets today. That's Tommy mellow. T O M M Y M EL-O.com forward slash freedom. Don't sleep on it because tomorrow might be too late. Now let's get back to this

awesome interview. What's good, Tommy? Can you tell me a little bit about employee ownership program? So there's what's called phantom stock. There's profit units, there's equity incentive programs. There's another thing I just learned about in the last few months that just says a set amount of money. And you can put it four years vesting and say, I'll get you a hundred grand, but you got to pay it then. My mentality towards business now is never own a company for more than five years from today. If you don't have a five year plan to exit, you could still roll equity. You could still be an owner, but so many business owners say, never sell your business. Keep that cash flow coming in. That's bullshit. Bullshit. I promise you, you build a company, even if you don't sell it, you build it to sell.

You build it in a way that's positioned right, that it's going to look attractive to buyers. Because somebody is going to walk up and say, I want to pay you more than you're worth for your company. And if you have an identity crisis, when you go to sell, is this your only life? You're going to sign a non-compete for five years in that market. You can go out to another market. You can do a million other things. If your life is so wrapped up in this one company, listen, I'm always going to be here day one. I'm always going to be here. Even if I have zero stake, zero equity, I'm staying at this company, but it doesn't mean I'm not going to do more things. So you build a company to sell.

And the employee ownership, typically, it's going to be your C-suite, possibly director level. You want to have a stake in the outcome. You want them to run at your goals you're trying to do. And when you pick a date and you set how much EBITDA you want, it's very simple. You could make equity based on time. You can make it based on performance. You could make it based on accomplishing one task. You get with the right lawyers, and I got a lawyer if you want.

You could make it based on anything you want them to run at before it vests. And guess what? Vesting doesn't even mean you need to pay them anything until the company sells, until there's a change of ownership, more than 50.1% or 50%. Roger, my man, what's going on, brother? I was just out. If you guys don't know Roger Wakefield, he's got one of the best channels of plumbing of all time. You can look him up. He's doing a fantastic job. He's in Dallas, Texas.

An amazing guy. I'm learning a lot from him. He's an open book. He's willing to help. He got out of this plumbing business because he's such a big influencer on social media that he said, I'm going to keep doing this and I'm going to grow this. And there's an intrinsic value to growing the following and other plumbers want to know him. I mean, he just introduced me to an amazing lady that has a pest control business in California that I talked to and just really good person. If you guys don't know who he is,

I can't get a customer to get service Titan tags set up so that I can call their last leads on 100% commission and it's been a month. Well, sometimes here's the deal. Knowledge is useless. Until it's implemented. You know, some of the companies that we've purchased, some of the NDAs and LOIs, letter of intents we put out, none of these business owners have the ability to do all the diligence to get all this stuff. So we're just going to send somebody there and do it for them. So what I would say is, Casey, why don't you fly out or go to their shop and help them do a screen share and just say,

let me do this for you so I can save you money. Business owners don't have the time. You think you're a high priority. You're not. People always say, hey, man, you think you're getting all your recycling or did you know a truck was driving the other night? I go, guys, that's the least of my problems. I'm going to flag that.

I'm going to get the right department. But my mom and stepdad used to literally cry and be like, you're getting stolen from over here. I go, yeah, I know. They go, doesn't that bother you? I go, no, no, no. I'm worried about making payroll this week. This is well over a decade ago. But for a business owner, you got to understand priorities. And because a vendor wants you to help do something, do you think we will open up every one of the emails from service day and they send us a dozen a day and all the reports? It's

impossible. We focus on the stuff that we need to do today. Leads aren't the issue. People are the issue. That's correct. I'd like to know how you apply your concepts to a micro market. Micro markets are easy. There's not as much competition. You stand out. You get involved in the community. Everybody knows who you are. You get involved in the community. You're at the big fair. There's certain things that you could stand out. My sister's father-in-law, so my brother-in-law's dad, was a huge, massive attorney, divorce attorney in Whitefish Bay, Wisconsin. And he became the largest, biggest in that community because he was so involved. He was on all kinds

of boards and get involved in the community, the church. You've got to get involved in the community, big or small. It's easier in a micro market. Roger wants to be my CMO. Good. I've got some really good protein. I'll put the name of it on the HSC,

but this one has like four different things in it. I'm on like several different shakes and different things. As you grow, I know my company will increase the net profit. My pay structure for individual techs stays the same, correct? Yeah. I mean, listen, you don't mess with people's pay very often. You could do it a couple of times a year. You could change your scorecard and the scorecard dictates their pay.

And I know that sounds kind of crazy, but my scorecard is what puts them at different levels. So you add to your scorecard, but you don't keep adding to the scorecard. You take something away. You can't have them do 10 million things. Also, does your health benefits and retirement match your 401k get figured into a quota of what it takes to run the business. I hope I asked that correctly. I ask as I pay my guys hourly plus commission and our commission comes from producing above quotas. I mean, you got to figure out your total burden cost. I was listening to the three automotive companies right now that have the unions going after for more pay.

And listen, I'm going to stay out of politics on this. I have my own point of view. But a burden cost to them right now is $65. That means with all those other benefits, $65. Now Tesla's at $40 because they're non-union. How is on EV cars, how are they supposed to compete if you give a hundred? That's basically saying Tesla, we're all going to have to have your software in our cars to even compete. And that's what's going to happen, period. So you have to figure

out your burden cost. You have to. And a lot of employees, you're not attracting the right people. First of all, they just want straight commission and be 1099. If they don't want any of the benefits, they don't care about their family. They don't care about their future. I found that it attracts the right people to give great PTO 401k, you know, the sick time, the new trucks, the latest technology pay more. Like we get $1,500. If you recruit somebody. We do tech generated leads. Now, some companies pay more. Here's what I find with the companies that pay more. Number one, they're never making money. Number two, they're not driving enough leads. Guys come back to me

and they say, yeah, I was making more over there, but I was only getting a job a day. You guys give me enough jobs per day because you could afford to market. Yeah, I was making more money over there, but I had to pay for my own insurance, my own gas, my own truck, my own tools. And by the way, I had to pay my own taxes. I'm telling you, the grass is not greener. What is your secret list of all the softwares you use and for what? I got 25 softwares our company uses. Read the book. If you get a chance, by Nick Sonnenberg. It's called Come Up for Air, and it's about getting unified on the software you're using.

Best book on delegation. You know, the Checklist Manifesto was pretty good, but it wasn't really on delegation. If you get a chance, Al Levy's always willing to take 30 minutes with anybody at no cost. I think he's still doing that. Talk to him about delegation. You know, you got to have a certain appetite for Al. He's probably listening. He's going to tell you how it is.

He's not going to beat around the bush. He's from New York. It's just like it is. Okay. So if you don't like it, then don't get on the phone with him because he's not going to tell you. It's not going to be all peaches and roses. You've got to understand he's going to give you the hard truth and help you understand the eight steps of delegation.

I might have to write a book on delegation, actually. And, you know, when I write a book, it's not going to be only from me. I'll bring Alan to it. Then I'm going to go find the top 10 CEOs in the world at doing it. And it'll be a hit because guess what? I know I don't have all the answers. I know I can learn. I know I'm a student for life. And I'm genuinely curious on what people do. Jack Tester is a really great delegator too. He was the next star. Can you recommend an affiliate software for new roofing? Well,

I don't like any affiliate software out there personally, so we're creating our own. We're investing in software because the worst thing you could do is have somebody that's driving business not getting paid the same day. I met a guy, had to be five years ago, and he taught me some stuff. He said, if you don't pay affiliates out the same day his name's saeed with ali sean rugs and he's in scottsdale we rented a small center from him and he said the worst thing you could do is not pay people the same day the money comes in the day they see the money and it's completely transparent is the day you'll be set free because

they'll work 10 times harder they know you're're honest. You know, any people I know that I've done deals with that didn't pay out, I don't really care because I believe in what they do, but they just, anytime I get involved with any affiliate, if it's a person famous on Instagram, or it could be an employee that has a huge network, you have to pay. It's the dumbest thing. The people that are feeding you, you do not commit what you said you were going to do. And you might say, well, I couldn't track it. Well, it's either your fault or they fault that you didn't get that system set up. But when the system is set up correctly, I know a gal named Amanda Tress. Look her up. Micro influencer. She's got a Forbes article. She's doing $250 million a year in all affiliates.

You know, a fancy way of affiliate marketing is B&I groups are affiliate marketing. Anytime an MLM, I mean, send out cards is affiliate marketing. There's so many things that scale with affiliate marketing. It's very important. What size should you bring on a full-time trainer and what should they make? As much as a tech, less because it's easier, or more because they are better? Well, first of all, a trainer should never be the top technician. Very rarely, being a trainer means you're listening, you're empathetic, you have patience, you're willing to invest in the time and the LMS. It's a completely different skill set than a top performer. Now, I'm not saying you can't have great trainers that

also perform well, but very rarely does it work you take your top guy out and make him a trainer. Completely different animal, completely different type of person, personality traits, completely different. Number one. Number two is I think a great trainer should be able to make six figures. But here's the deal. There's no pressure. The problem is a top salesman will make more than a CEO. They will. My top guys make more than me. They do. Still today. I have equity in the company. I can take owner withdrawals. That'll be way more than them. But the top sales guys, top technicians in a company, if you're anywhere near where you should be, they should be making a couple hundred grand, your top guys, or more, 400 grand, 500 grand.

Not uncommon. Or you don't have the right guys. Or you're not charging enough. Or you don't have the right marketing. Or the right branding. No trainer's going to ever be able to make that. But they're going to get a lot of benefits. They're going to get a nine to five.

They're going to get PTO. They're going to get vacation time. They're not going to have to eat what they kill. Versus, you know, performance pay, commission pay, whatever. You know, they're different things. But if you come up with a great performance pay, it's really, really hard to do that with a trainer. There are ways to do it. And what you could say is when the performance breach is this, but then they'd have to be the recruiter.

What is a trainer going to say when things aren't going good? You're not giving me the right talent to train. So you've got to make sure it's something they could affect. Can you repeat that, Tommy? Or retype the 1,000% acquisition? Ask the question. I'm not sure what that was. No.

I had a garage door business that currently does 3 million in sales, and we have sold two franchises. We have three people looking at the FDD to purchase more franchises. What should I be focusing on right now? Well, you're not going to like what I have to say, Jen. I'm just going to be completely transparent. There's nothing to do with me being in garage doors. Franchises need a lot.

Franchises need the marketing, the standard operating procedures, the manuals. And if I was going to buy into any franchise, then I'm going to start franchises later in life. I need three success stories outside of my own market. Franchise owned. You want to sell the shit out of franchises? You better have the best call center. You know, the franchises that say, I just want to franchise my business. And I'm not saying this about you. Don't take this personally. I know so many people that don't make money. They make a hundred grand a year in their business. They say, oh yeah, I'm going to start a franchise. Why? Why would anybody listen to you? Unless you're

making multi, multi millions of profit and EBITDA and several markets, and you got something that's scalable and you're willing, people look for a turnkey business that you have all the systems built in a box for them to acquire, and then they go do it. And I promise you, I'm not insulting you. This is just a general statement. If you want to succeed at a franchise, you got to have the best marketing. You got to have a national website. You've got to have a great CRM. You got to have scalability. You got to have it proved out in free markets outside of where you live. That's the best way to scale. If you want to sell hundreds of franchises, but if you want a nightmare, a headache, stress, anxiety, then you start a franchise without having

the best of the best in every department. And you start, when you get in the franchise industry, you're no longer in whatever you went into, garage doors, locksmiths, whatever it might be. Now you're in the people business. You want to talk about a nightmare? Talk to somebody that's not successful that just invested 50 or 100 grand. You want to talk about your phone ringing and cringing when they're not successful? You think it's good for the short term but long term? So I would say scale it in several markets, franchise or. Work out all the bugs on yourself with your own people that you can control, and then you can scale it. But if I hear another person that's not successful that wants to franchise their damn business, and once again, I'm not talking to you. I want you to understand that if you ever want to come to Phoenix to a shop tour hangout, I'd be more than happy to have you.

I'm not trying to be a douchebag. I'm really not. I just hear every other, I'm going to franchise my business. How? You don't make shit. It's like a guy saying, I'm going to go be a coach and a trainer and a spokesperson and get on stage. You don't have a business that's successful. What do you want to duplicate? The shit? I'm going to get kicked out of this hotel. Jen, I think you're going to be successful. I have no idea what your franchise. I'm not talking down to you.

I'm just saying those are the next steps. Make sure you've mastered the call center. You've mastered how to get leads. You've mastered how to recruit and train people. You've mastered how to get inventory. You've got an edge on everybody else. Because you're a franchise, you should be able to get better pricing. If I was a franchisee and I saw that I could buy the price, buy better parts for cheaper, I'd be very, very angry. Sorry to go off on a rant.

If you are performance pay or commission, how do you give PTO? Pay time off? I just do the average of what they make and give them, I don't even know, I think we do three weeks plus they get a week sick. And I think we've mandated, I don't know what it is. I think we do three weeks, plus they get a week sick. And I think we've mandated, I don't know what it is. I think for a while we would say 500 bucks a week. Then we went to like a thousand. I don't know exactly what the policy is.

I'm not as familiar with where it was five years ago. But you just say, I'm going to pay you to take time off. And it's the best thing in the world. You want all your people to use it. Insist they take PTO. Insist it. Because when they come back, they're fresh. They spend time with family. They're loving life. They're going to have their best performance. Insist your people do PTO. Hey, Tommy, best book or advice for a third generation HVAC business owner. Been in the business 25 years and a succession is a major challenge. You know, I'd read the book, John Warlow built the business, 25 years and a succession is a major challenge.

You know, I'd read the book, John Warlow built the cell. And what I would do is just make sure you're not overpaying for the business. And I would probably do an asset purchase from your family and just have a notes payable to them. So you don't have any of the liability and they can pull an insurance policy against it. What I would do is go to some of these events, Pantheon, Freedom, you know, Victor's got an event coming up, Profit Rocket. Get around the right people that are successful. Julian runs a great thing, Nextar. Get involved, go visit shops like I did, visit 20 successful shops, bring new ideas, learn how to work with millennials versus the baby boomers,

which are great people. But you've got to do things differently because what got you here won't get you there. And I think I could have a full conversation with you on this, and this would be a great call. And I'd love to maybe have a session that we do on Home Service Expert, or we just talk about it if you're open to it. And if not, we can just have a private conversation. But I don't have a one size fits all answer for that. Hey, Tommy, we started our company from the ground up. We invested up front, Dan and his team to create our name and brand. Our biggest issue is cash flow to start paying for marketing and all the things we need to do to get new customers. What are your top two or three things to get people calling in? And I kind of discussed this earlier. It's go out and meet the people. Build the relationships.

You can't do too much networking. You can't do too much meeting people. You can't do too much asking. You need to put yourself out there and be the machine. You didn't start with enough money. Either did I. So I had to be the machine. I had to not take weekends off. I worked nights. I worked holidays. If everybody wanted to be in business and thought it was going to be successful, the chances of failure is so significant that most people won't do it. It's taking a chance. I ran all the jobs. Every job that came in, it was me for the first year. I mean, I hired a couple of people, but I ran the majority of the calls. So what does it mean? You got a good brand. You got to go out right now, go to your church,

talk to your friends, talk to the neighbors and start doing tune-ups, start doing stuff for free, get reviews, get your name out there, get three reviews, get a yard sign, go to a B&I meeting, put yard signs, get testimonials, post them everywhere. Post them on Twitter, YouTube, LinkedIn, Facebook, Instagram, and TikTok. Everywhere. You need to start working on your SEO, but you could do that yourself. You could get a VA to edit videos for 500 bucks a month. Be smart with your money because in the beginning, it's so critical. Tommy, I quit my job too soon.

My business assembles furniture, play sets, and exercise equipment. I want to get out of the field. I don't have enough leads. What would you do? You know, cash flow is such a big problem. If it were me, I'd get a second job. Personally, I'd get a second job, and I'd be working on that. I'm a relationship guy.

I fight. You put me between a rock and a hard spot, I'm going to fight my way out. You put me in a lot of tension, I win. You put me in an environment where I'm losing, I come back. I practice harder, I show up more. F-ing figure out a way. When nobody else sees the light, I stare for the little crack, the little beam of light coming out. I make my own luck. I don't depend on others. I don't play victimhood. I say it's all about me. I entered into this. I'm going to do this for me and my family. I will succeed. I look in the mirror every day and say I'm a badass. No one's going to let me fail. No one's going to let me lose. So you got to decide right now. Are you all in? And if you are, don't wait for luck to find you. You go find it. I know this is harsh, but sometimes we got to hear it because great great friends tell the truth, even when friends don't want to hear it.

The ones that will die for you will be honest with you. They won't let you ruin your life. They're going to be honest. They're going to help. And that's what I'm trying to do. There is a way. You go find the most successful person doing what you're doing in another state. Fly out there.

Be humble. Ask questions. Bring a notebook. Smile. And say, listen, I, ask questions, bring a notebook, smile, and say, listen, I am coming to you as a humble person. I am here to learn. Success leaves clues everywhere. All you gotta do is ask.

Can you recommend a good resource to find industry benchmarks for gross margin or net profit for residential commercial service and install? We have a construction division that does design, build commercial HVAC and plumbing work. I really had a hard time understanding if our team is pricing correctly. There's great resources out there. They sell companies for a living.

And they get all these, they're called SIPs or SIMs. They know exactly where they need to be. They look at gross profit. They look at gross profit. They look at gross margin. They look at EBITDA. They look at all these different factors, and they got these decks. They're not going to go tell you what a company does, but they'll tell you the industry average. Look for a broker.

I've got guys at Cowen that are great buddies of mine. Eric Van Dam and Rob Parker. If you need help, send me a message and I'll figure it out. These guys know everything. Brian Cohen, you know, there's resources out there. Brian Cohen, there's a lot of people that do this for a living and they know exactly where you should be. You just got to know the right people to go to. That's why I always say millionaires work their asses off. They get up, they cold plunge, they go to church every Sunday. Billionaires know who to call when. So reach out to me and I'll get you the right information you're looking for. I bought a franchise before and the owner blamed the regional master franchisee

for it being financially terrible. So many companies are trying to start from scratch and have no experience in the service industry, and they think they could just brand their company and everything will just come. Read Tommy Mello books and others to see that it's a lot of other things that will actually drive the business. Good luck. Yeah, you know, business ownership is very interesting. I think I was always good at driving leads building relationships and doing sales if me and adam would have known about a decade ago when he started that we needed a good cfo we would have been 10 times larger and if we would have known i mean hiring firing manuals everything that goes into business.

It's not for the faint at heart. People go, I just want the freedom to start a business. What freedom? What are you kidding me? You think you're going to start a business for freedom? Most business owners I know would have been much better off taking a $200,000 job a year. They would have put their work jacket on when they left home and put it back when they came home. You think starting a

business is going to give you freedom? Maybe in 15 years. Do you think I'm working harder now or 10 years ago? Now, I'm working with my brain and relationships and acquiring knowledge way harder than 10 years ago. Was I working more physically 10 years ago? Yes. Yes, I was. But if you think that I'm going to sell part of my business to a partner and they're going to expect me to bring the kids to school and go to church on Sundays and just screw off. Now, listen, you could do a lot of that stuff, but you've got to have your time management dialed in and you're not going to work less hard. You're going to work 10 times as hard when you bring on a partner.

If you want to be a great partner. I'm on one today. It's the peptides. What is your top three keys you would want a small service business to be good at? Or you would want to see? I run a residential irrigation repair business in Arizona. Three things that I think every business owner

needs to be good at. You got to understand financial literacy. You got to understand if you're making or not making money. You got to understand how to look at numbers. Number two, marketing. An owner, if you're not good at marketing and you're not good at networking, I mean, you're the face of the company.

You got to hire a great person and they're going to own you when you hire this person. And number three, you got to be a really, really honorable person. You got to commit to what you say you're going to do. You can't tell people I'm going to get you a raise at the end of this quarter. I'm going to give you a guarantee and then change it. When you say stuff and you look at somebody and you shake their hand or you sign up on something and then you don't keep your word, there's so many business owners out there.

They just fly through people. Nobody trusts them. Very few people. They get lucky. They keep burning people. There's a show called American Greed that shows who these people are. Keep your word, understand your financials and understand marketing and networking. Those are the three things.

Not everyone is cut out to run a small business and may be better off working for someone else. The dream is awesome, but the demands and financial responsibility isn't for everyone. Sometimes you might be happier and make more money joining another team. 100% agree.

Do you speak about all these same topics in your podcast or is there another video we can find another time? Ask me anything you want to talk about. There are several things I podcast about. I had a great person about a CHRO. I talk about marketing. I talk about software. I talk about taxes.

I talk about interviewing some of the best business owners out there. Sometimes I bring on best-selling authors. Generally, I talk about business. interviewing some of the best business owners out there. Sometimes I bring on best-selling authors. Generally, I talk about business, specifically most of the time home service businesses. We talk about things that most podcasts don't. I try to bring on people that are way smarter than me at their knowledge level, their subject matter. So if you want to know about anything, I'm happy to help.

So I want to be somebody you guys could lean on when there's no one else out there. I don't need your money. What I would appreciate is your friendship. And if you guys learn something or have a great question or come upon something, I'd appreciate it if you share it with me because that's how I learned. So this is so good for me. You guys asking questions, being interactive, being on here. I really appreciate it. I really do. If you come to Freedom, I'd appreciate that.

I got some mind-blowing things I'm going to talk about, and I think it'll be worth your while. If it's not, I'll give you your money back. November 1st, 2nd, and 3rd in Orlando. Bring the kids. Oh, good. Access the podcast, Home Service Expert. Pretty much on anywhere you look for a podcast. If you plan on selling your business to Brian Cohen, a couple years you plan on selling it. He can coach you and show you how to get the most money for your business. Yeah, you know,

I think there's a lot of great people out there. I worked with Cowan. Eric Van Dam came on my board of advisors, worked with me for a couple of years and helped me build the business of what it was today. You know, I got to bring up some names internally, Dan Miller, Luke Martin,

Adam, I mean, Angela, Brian, Travis, Adrian, so many people internally. My board was my brother-in-law, Brian, Tom Howard, Ken Goodrich, Eric Van Dam, Aaron Evans built a board to lean on. Al Levy, Dan Antonelli, Jonathan Wisman, Jody Underhill. Without those guys, I wouldn't be who I am today. Without Service Titan Partnership, without the great deal I got worked out in Mexico, the way I get my trucks, without some of the other software I use, without Jim Leslie, without Gianni helping me get this podcast started. I mean, the list goes on and on without my mom and dad and my stepdad and my sister's support. I can't attribute to one person, but I'll tell you this.

I tend to be at the right place all the time. And that's because I keep my word. I'm honest and I don't lie. And that's all I want. If you say you're going to do something, come through with it. Follow up. So many people, they like to dabble. I'm going to try this out.

I'm going to try radio out for a month. That doesn't work. I'm going to try Angie out. Hey, I tried that Angie stuff. It doesn't work. You know what's so funny is people say performance pay doesn't work. People say I don't need to get a rap. People say Angie doesn't work. People say I don't need to get a wrap. People say Angie doesn't

work. People say I can't get Google to work. And I'm like, hold my beer. All this shit works. You don't have the patience or the understanding or know how to ask the right people. You think if you called Angie right now, you think if you called Thumbtack right now and you said, who's the number one person in another market that's killing it with you? Can you introduce me? Because I want to spend 10 grand a month with you. You think they would be afraid to give you a testimonial or recommendation and you think those people wouldn't know where you're coming from? The reason I do this podcast to do these Q&As is because I know what it's like to be on the other end, to not have anybody. I'm hoping that I can be a support stream for you guys.

But there's support all around you. All you got to do is ask. Roger said, I love this, Tommy. If you can ever do anything to help you, if I can ever do anything to help you, your community, please let me know. You're doing wonderful things. Roger, I love you, buddy. Go subscribe to Roger Wakefield's, all of his channels, specifically YouTube.

Do you have any experience with ESOPs? ESOPs work okay. There's a few creative programs. I got a buddy of mine named Jim Dew. If you're going to do an ESOP, you need to talk to Jim Dew. I can make an introduction. ESOP means a company owned.

There's some really good things. You know, I had a guy working for me that was in an ESOP for 17 years. He got 500 grand paid over the next five years. Under me, he got 1.2 million for working for a year and a half. So I think ESOPs have their purpose. Do I like them for home service? Yeah, yes and no, depending on your situation. Nah, they're not for me. I'll tell you that. What's your opinion on the advice Mike Andes gives? He talks a ton about performance. I like Mike Andes. Smart guy. You know, he's landscaping. And I don't know every single industry. I couldn't tell you how to do every single industry, but I'll tell you this. I've pretty much spoken at most home service events of different industries. And like I said,

I could call Mike right now. He'd probably take my call and he'd give me his input. He'd tell me the pros and cons. He's looked at enough landscape companies to know there's a lot of good people I know in the landscaping industry. Whatever industry it is, don't just take what I do in garage doors. just know that performance pay always beats non-performance pay people say oh well that person only cares about selling well they care about giving options they care about fixing it right all an hourly guy cares about is milking the clock doing shit half-ass and making their pay no matter what. I'll go to war on this battle all day long.

And you know what? A lot of people, I had a guy message me earlier that I talked to this garage. I had a B&I group. They hate you. He goes, they never even met you. I go, you know how many people hate me? You know how many people don't like me? They don't like the thought of me. You know how many partnerships I've made of people that said I couldn't even stand you before I got to meet you? And I'm okay with that.

I'm okay being hated, especially by somebody that's never even met me. It's lonely at the top. Don't start a business and plan on being the industry leader if you care about what everybody thinks about you. The first thing you need to do is love yourself and be okay when someone doesn't like you. I don't need to please everybody. You should see the comments on TikTok, Instagram, and YouTube about this guy's a fake, this guy's a bullshit. I don't care though. I don't need to combat all those stupid things. I love it. I was on Grant Cardone's podcast yesterday. And he's like, what is your advice for me? Because I have so many freaking haters.

And he goes, what would advice if you follow me? I go, Grant, the only thing I would say is you say everybody's going to be a billionaire if they follow you. That's like me saying, hey, here's my cheat sheet to a great body. Buy my cheat sheet to a great body, and you'll have a six-pack. You know, there's more,

it's six times easier to become a millionaire Than to get a six pack in the United States And he said I was hoping for better Advice I said Grant I don't even know your Analytics I don't know your click through rate I don't have access to any of the back end data I'm sorry I can't solve your social Media issues but he did say I have

More haters I have more haters than People that like me and I said how do you Think Tucker Carlson feels that's okay We're all okay with that. I'm okay having haters. Anyways, I get excited. I have a lot of fun. I appreciate you guys. I've got 18 managers downstairs and this is very, very important to me. Those guys are working and gals are working. And this is so important that I made time for this because I get so much out of this. So if you guys need anything, just reach out. This is what makes me stronger. This is what makes me a better leader for my people.

This is what I get excited about. I need this in my life. I need you guys. And I need you guys to interact and continue to ask questions. If you guys have any questions for the next session, go to homeserviceexpert.com, write this down, homeserviceexpert.com forward slash questions. And if you want to order my new book, it's elevateandwin.com. And if you want the podcast key takeaways, my team sums it all up and homeserviceexpert.com forward slash bonus. Ooh, I feel like I just worked out, man. You guys got my adrenaline going. You know, I'm going to go work out later. We already went on a long walk. I did 110 or 120 pushups today. Proud of myself. I lifted 225, 22 times. I'm sure you guys probably seen that,

but lots more work to do the The best I've ever been, the worst I'll ever be. Tomorrow's going to be a little bit better. I'm always working on me. I need to become closer with God. I need to get my body right. I need to make sure I'm doing the right things for me. I admit I have a lot of problems. That's the first step. And I got to continuously work on myself. I'll never be perfect. You know, they say, don't meet your heroes for a reason. Because when you do, they'll let you down. I'll tell you this. I'm trying to be the best version of myself.

I'm trying to be the best version for you guys. I'm trying to be the best leader for my coworkers. But I'm going to make mistakes. I might not have all the right answers, but I'm going to be honest. And I'm always willing to help. I appreciate you guys. And if you need anything, be sure to ask any questions. I'll see you guys later. Very fun today. Thank you guys.

Hey there. Thanks for tuning into the podcast today. Before I let you go, I want to let everybody know that Elevate is out and ready to buy. I can share with you how I attracted a winning team of over 700 employees in over 20 states. The insights in this book are powerful and can be applied to any business or organization. It's a real game changer for anyone looking to build and develop a high-performing team like over here at A1 Garage Door Service. So if you want to learn the secrets that helped me transfer my team from stealing the toilet paper to a group of 700 plus employees rowing in the same direction, head over to elevateandwin.com forward slash podcast and grab a copy of the book.

Thanks again for listening and we'll catch up with you next time on the podcast.