The Home Service Expert Podcast - Q&A With Tommy - Strategic Methods For Expanding A Business Sustainably

Episode Date: April 19, 2024

Tommy Mello is the author of Home Service Millionaire and Elevate, 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 investments, scaling businesses, CRM systems…

I love buying businesses. I think buying businesses work better. It's harder to greenfield and grow organically than it is to buy a business and fix it. But there's a lot of things that need to happen. You're buying into a different culture. There's a lot of things you need to fix. You can't teach an old dog new tricks. That's what they say. So I would say I'd probably start from the ground up if I don't have a ton of experience in home service. I want to make the mistakes at a smaller scale and take over a business. Unless you got great coaches and mentors, because you don't want to make mistakes with a bigger business. But the nice thing about an existing business is you got a customer database.

You've got people already working. You can take things from an outside view and look at this business and say, where's the biggest weak spots that I could work on and who do I need to hire? 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, N-O-T-E-S to 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, we are live for the March Q&A here. So let's get started. You guys know my book, the first one, The Home Service Millionaire. Hopefully you've read this. This is kind of the foundation. 12 co-authors. Still

very valuable book. If you want to learn more about systems, how to recruit A-plus players, then obviously the next book I wrote is really figuring out performance pay, elevating everybody around you. Your vendors get to win, your clients get to win, your internal customers get to win. And if you guys aren't on the Home Service Expert page, it's something where we're in the midst right now of hiring lots and lots and lots of people for the team. We're getting more videographers. We're getting more content writers. Really making sure we can answer questions in a more deliberate way.

There's so much content being delivered. There's about 11,000 people in the group, the home service expert. And my goal is just to be way more involved. So should have anywhere from 12 to 15 full-time people just helping with content. The plan is, if you guys seen what Gary Vaynerchuk has done, Alex Ramosi has done a fantastic job. Dan Martell is doing great. If you haven't read Dan's book, Buy Back Your Time,

it's a game changer. Got a lot of great questions today. So yeah, that's awesome. Lots of radio ads. Going to be doing a little bit of traveling. We got two hiring events. I'm headed to Charlotte for Sales Boost. Headed out there Wednesday. Then we got the moving retreat in Florida. And then I'm headed to Nashville for a hiring event. And then we're going HS for a home service freedom event there. It's going to be awesome. So that's coming up. I'll just talk a little bit about what's new. Just make a note here. So, you know, A1, one of the hardest things we're trying to realize is we're hiring a lot, a lot of great technicians. We're being very intentional with the technicians we're hiring. We're hiring A-plus players. And we're going through this kind of area of top grading.

One of the things I've done, and I've been thinking a lot about this, and it's not to brag or say, look at me, look what we're doing, but I started something called TommyCares.org. TommyCares.org for our employees. And the goal is that if someone's going through a tough time that we can support them and give them money and it's a grant. And the whole purpose of that is that they use it, whether they need to go on a date with their wife or their husband,

maybe they just need their house clean. Maybe they just need rent help for the month. Everybody goes through hard times. And this was really just to help. This is something we started a few months ago. But one of the things I want people to use it for is before they quit, they went through all the training, went through the ride-alongs. They got two and a half months worth of training. A lot of people, when you're growing as fast as we are,

you're trying to stop people from leaving. Even if they're bad performers, they just need polishing. We call it polishing. We want to train them more. It's been heavy on my heart trying to figure out a way to stop people. The great individuals, they made it through the recruiting and they made it through training. They're good human beings. I think a lot of people, they have a door where they're out recruiting, but they're losing people on the back end. And we're trying to solve that because it's not a huge problem, but it's something we're

trying to get in front of. I had dinner yesterday with a lot of HVAC plumbing companies, went to stake 44. And some of these companies have been around 20, 30 years. And I looked at some of their performance and they're sitting on a cash cow. Most companies that have been around 20 plus years, if you've been around 20 years, you've got a database. You've got a lot of reviews. Normally, it's just the systems. It's the standard operating procedures. It's the manuals. It's what Al Levy taught me. It's the seven power contractor stuff you need. And if you're not converting every lead to a booked customer, and you're not starting the work and getting that conversion, and you're not

getting a good opportunity job average with a five-star review, that's where you're broken. If your guys are running more than three calls a day, you're wasting money. You're literally wasting money. And certain businesses are sitting on so much money. And it's so exciting for me because A1's got the top KPIs in home service. I mean, we're not going to compete with HVAC or roofing, but an opportunity job average, but A1, we're just nail it and scale it, rinse and repeat, keep growing, keep hiring, keep adding leads, keep adding markets. And I look at some companies that would be more fun for me to go in and just turn a couple dials and triple it.

Within six months, I could triple a lot of businesses. And I just need to know what to work on right now. Some of you got a horrible brand and you've been putting off rebranding. Some of you guys just, you know, you got a problem in your call center, but you haven't done anything. Some of you, your technicians, it's just a really bad culture. The owner is not, the founder is not showing up. He's not at the meetings. He's not excited and full of passion and excited and wants people to win. What we're doing here at A1 is got a new dream manager starting in April. And I'll explain to you what their job is.

So you guys heard of the book Profit First. I'm going to explain how this could work for your coworkers, for employees at a company. Profit First basically says you take your paycheck and we help you come up with your dreams, your goals, buying a second house, buying a first house, going to Alaska on a cruise with your family. So we're going to put an Alaska cruise here. We're going to come up with the total. Let's say you want that in eight months. Let's say it's five grand. You split up your weekly

checks into eight grand and that's how much comes out into this bucket. Second bucket is a house. Third bucket is your kid's college tuition. It might be four or five buckets. So we're implementing that. We're getting credit repair for each and every A1 employee. We're working on getting a mortgage broker coming in. We're working on making sure.

One of the things I just realized is these guys didn't have a good tax advisor. Some of them were paying $500. Now they're getting back 18,000. How much does that mean to your employees to make sure you've got a great person to do their taxes? How many of you have thought about maybe your people do not have anybody good. Maybe they're using TurboTax

and paying a fortune instead of getting money back. You think those things would help them out? You think it would make a difference that they'd want to stay at your company? They'd have more money to spend on their family and what's important to them and their dreams. So these are important things that we're talking about. Let's see here. I appreciate this opportunity. What is a good price to pay sales guys? I have a guy that will help with starting. I will do the marketing and scheduling and my guy will do sales and possibly installing. How would you go about it and pay him properly? Abe, I've always thought performance pay, right? What's the stake of the

outcome? You want everybody to think like an owner. You want them to have a reason. One of the questions yesterday when we were eating dinner was, you know how hard I used to fight for calls? I mean, if it came in at 3 a.m. on a Sunday, I would go run it. I think we've all been in that spot where we know how much it costs to generate a call. We're not letting that person out the phone until we're showing up to their house. A lot of people, whether it's a salesperson, a CSR, a dispatcher, they don't have a stake in the outcome. They're not going to fight like you fight because they don't really care. There's nothing in it for them. What's in it for them? What is in it for them? That's the most important thing. So they should be performance pay. I think, you know, I don't know the business model,

but I'll tell you this, a good salesperson should be able to make 120 to 150 grand pretty easily if they're good. Great should be a couple hundred thousand. Not so great should be just under a hundred. That's what it takes. If they're showing up, they're working on your schedule, they're in a truck, they're driving, they're in hot and cold areas. When they're on the field, that's typically what it's going to take. A lot of people that want to leave the field ask me, how can I make $200,000? And it's very hard to do that when you're not in the field. It's hard to come up with that kind of money. They're literally collecting the money from the customer and they're taking a portion of that.

So that's kind of the ranges I would go for. I'm starting a mobile car dealing company and was wondering your advice on turning initial detailed customers to long-term maintenance wash clients for increasing lifetime value. Yeah, well, listen, anybody that's getting their car detailed, they're interested in getting it on a regular basis, right? And you know what I would do personally is I would say, you know, it's kind of funny cause I'm a garage door guy, but if they leave their keys in the car and they park it in the garage and you're willing to go out there on a Saturday or a Sunday, you just say, listen, open your garage. You don't even

need to be there. If you want to go out on the other car or you're on vacation, I will go pull your car out and I will clean it and I'll take before and after pictures. And I'll send that. I think with the affluent clients that get their cars detailed, I would do it at their convenience when it's convenient for them. And I'd make it super simple. So it's not a lot of work.

And weekends are going to be the best because people are at work during the week. And I would try to say, look, there's how much we charge per detail. Now we get it done on a regular basis, whether that's once bi-weekly or once monthly, those are the two plans I've come up with. And I'd save them more money the more often they do it because it's less work for you. So this is just a simple thing of saying, how long does it take? And car detailing, it's all about drive time. So it's just simple. Plug in the math, figure out how much gas and time you have,

and figure out what you could do for these different plans. And one of the things that Andy Elliott talks about is charging to get into this program. You charge $1,000 just to get the access to the membership. Because what would an extra $1,000 mean to you? You pay the $1,000, it gets you in for life. And now we'll get you on one of these plans. But the initial cost is just to get you into the program.

And a lot of people didn't think it was going to work. And everybody I've talked to that charges for that has been very successful with it. Working on the business, not in the business is a common saying. How can we balance that with being an involved leader with good energy who's showing up to meetings? Well, I think when you're a smaller company, you're always working in the business. You've got to make day-to-day work. You've got to make sure inventory and payroll's dialed in. You've got to make sure you're showing up to the customers. You're answering the phone calls and you're dispatching properly. Working on the business is more of an idea of what's our

long-term plan to generate more leads? What are we going to do with capacity planning? When are the hiring events? What are we going to do with capacity planning? When are the hiring events? What are we going to do to grow the business? More leads, higher job opportunities, more conversion rate, higher booking rate, move up revenue. So you build a team. When you're smaller, you're doing everything

and you're just working a lot more hours. You're making the day-to-day work. You're working in the business. Now, if you're still in the truck, you don't stand a chance. Because you're literally, there's no time. Even if you work nights and weekends, you're not going to increase booking rate. You're not going to increase the dispatcher and drive time.

You're not going to be able to coach the guys. So you got to get out of the truck or you're stuck in the business forever. First thing is, next turn will not take you on if you're still in the truck. So getting out of the truck is the first thing. The next thing is to hire people that run the operations of day-to-day so you as a leader and a founder or a manager could focus on the business

and look at the financial reporting's accurate and the KPIs are accurate and the CRM. And once those are accurate, you know what to work on. And hopefully you're working on the biggest thing that's going to solve the largest problem. Usually it's in the CRM. And once those are accurate, you know what to work on. And hopefully you're working on the biggest thing that's going to solve the largest problem. Usually it's in the call center. If not, maybe you need to talk to marketing and you need to talk to the marketing agency. I was talking to somebody yesterday and he's like, who do you use for marketing? I'm like, what do

you mean? Who do I use for LSA or GVP or SEO or PPC? They're all different companies. Who do you use for media buys? Oh, that's a different company. TV, radio, billboards is a different company. I use three people for my GMB optimization. Plus we have 10 people in-house. So I think we expect these marketers to be everything for everybody. And typically they're okay at a couple of things.

Who are you using for email? Well, that's a different company. We're literally probably using nine companies right now, plus 10 inside people. So marketing is a big deal. And I spent a lot of time in marketing. We just worked out a bunch of affiliate deals. We're going to have a pest control company on the back.

We're going to be on the front. We're testing that out. We're trying to get involved with other companies to lower our marketing spend and double the leads. Our plan is to double the leads by summer. What do you think about buying a small business that doesn't have everything set compared to starting your own business from the ground up? I love buying businesses. I think buying businesses work better. It's harder to greenfield and grow organically than it is to buy a business and fix it. But there's a lot of things that need to happen. You're buying into a

different culture. There's a lot of things you need to fix. You can't teach an old dog new tricks. That's what they say. So I would say I'd probably start from the ground up if I don't have a ton of experience in home service. I want to make the mistakes at a smaller scale and take over a business, unless you got great coaches and mentors, because you don't want to make mistakes with a bigger business. But the nice thing about an existing business is you got a customer database. You've got people already working. You can take things from an outside view and look at this business and say, where's the biggest weak spots that I could work on and who do I need to hire? It's not easy to just start a business from scratch. So you look at a business that's been around 20 years, you pick it up at a great price,

you turn a couple of knobs, it turns great. But if you don't do it right, everybody quits, the business fails, and now you got all the business debt that you paid to buy that business. So it depends on the unique experience you have in that industry. It depends on who you have helping you and how much money the business is and what you could do to fix it. We bought, I think, 14 companies so far. Every single one, the worst one we bought is 30% better than when we bought it last year. The best one is 217% better. So you do the math. It makes a lot of sense to buy if you're good at it. What company do you recommend to work with? I mean, look, Rhino does an amazing job. Camp Digital does an amazing job. Search Kings does an amazing job. I don't like to pick marketing

companies because when you... I like all those businesses. I think it depends on who you work with at the company. If you're a small company that never, ever talks to the marketing company you work with, you don't hold them accountable. You don't meet them on a weekly basis. You don't find out what they're working on, what they're doing to help your KPIs. They don't have a great attribution. They put their worst person with you in the company. Every single company I know, if you got their top people, their very, very top people,

and you held them accountable, they would do great for you. If you got their B players and you never call them, you never reach out to them, you're never working with them, you're not going to do so great. PPC is expensive. I'm a big fan of monetizing the hell out of your LSA,

ranking number one, and getting reviews and having your GVP or your Google My Business killing it. Those two are the best. Obviously, my website right now ranks... If you look at AHREFS, website checker, A-H-REFS, R-E-F-S, website ranker checker. You type in a1garage.com, you'll see it's ranked better than any other company I've ever found, except for River Pools and 1-800-GOT-JUNK. And we'll be ranking above them within the year. So I think organic is still a great way. PBC is just expensive.

I don't think anybody out there will ever get to great way. PBC is just expensive. I don't think anybody out there will ever get to the point where PBC is their cheapest lead source. It might be their best lead source. It might be consistent. It might be great customers, but it's going to be the most expensive. So all of these companies have the potential to do a great job. When to build versus scale? How do you discern the to and when from your perspective? Well, Matt, I would tell you, if you're not bringing home at a bare minimum on a build year, 10%, if you fall below 10% of profitability, you're going to have to focus on building more systems and getting more profitable. You don't try to scale when you're not uber profitable

until you can get to, in my opinion, we're hovering right now between 24 and 25%. We're still scaling. I think the biggest problem with small businesses is they're like, we're focused on growth. We're focused on growth. We're going to finally, you know what the private equity guys say is they say you could do both, but you got to have a great CFO. You can't be just testing the waters all the time. You got to decide when you got what's working and then you nail it and scale it. I don't think you try to grow when you're not making a profit in your current market or what you're currently doing. If you're not bringing in at least 10, 15%, why would you want to scale that?

Well, I'm putting it back into growth. Okay. If you got a great CFO and you discern that it's going straight into growth to hiring events, to getting more vehicles, to expanding your market into new marketing and taking more market share. When you answer the PE question of how much market share are you going to take this year? If you don't have an exact number, you don't understand how many more leads and how many more techs you're going to hire, you better not be spending money on growth. You better have a forecast and a budget for growth. A lot of people say, I'm just going to grow this year. How? What's the plan? What's written down? How many texts do you need to hire? How many more jobs do you need? A lot of people are just like, we're going to really grow this

year. They have nothing written down. They have no plans. They don't know anything about capacity planning. They have no knowledge. They didn't write a damn thing down. They don't have a weekly meeting about it. They don't know who's accountable for what. And they expect to grow. And it's just sheer luck that they grow without a plan, without an executable plan that's written down that keeps you accountable to each week, each month, each quarter. Good luck. When will you, when, when you will start a referral program within a business? Well, here's what I would tell you guys. There's a lot, a lot of low hanging fruit. If you're not doing anything on Google and you're not doing any social media and you're not putting yard signs out and you're not going any social media, and you're not putting yard signs out, and you're not going to B&I meetings. I think a lot of people are like,

more leads, more leads, more leads. But you're not doing anything. You have not taken your database and done anything with it. I don't think you build a referral program until everything on Google is maxed out, until you're running really, really, really creative radio ads,

and your campaigns are dialed in. I think a lot of people are like, how do I start this affiliate program? How do I do this? How do I do that? And it sounds great. Unless you're like really great at marketing, referral programs are tough. You know, you'll get a couple referrals here and there.

I'll keep the lights on. But I think there's a lot of other things you could be doing. Making sure your technicians are getting every single thing out of every lead they get. Making sure your CSRs are booking every job. So many people are worried about generating leads right now. But I look at their opportunity job average and their conversion rate and their booking rate, and it's garbage. It's like feeding a dead cow. It's like, why's like feeding a dead cow It's like Why would you take the time

When the cow is barely eating You're not converting, you're not booking Why would you focus on more leads I think a lot of people are like Man I need to talk, I need to get more leads You know what you need to do is get less leads You need to trim up the fat You need to get rid of the non-performers. You need to make

a stand. You know, we all say we're loyal to our people, but they're not loyal back. They're not. They're not loyal back if they're leaving with a zero. They're not loyal. They're not fighting for every single call. If you're not listening to your calls and hearing your CSRs fight like their life depended on it, then those people are not loyal to you. So why are you so loyal to people that don't care about you and your business and your company and your family? Why? Because you're loyal and they're not? What's the point of that? You're literally taking advantage of yourself and your family by keeping dead weight because you say you're loyal. I think that's the biggest mistake. You don't need more leads. You need to trim the fat. Get rid of the two CSRs that just don't give a shit. Get rid of the one technician that's

leaving with all the zeros with a low job opportunity job average. Get rid of the dispatcher that doesn't care, that always rolls their eyes when you walk in and always got an attitude and always get in a fight with the technicians or CSRs. Think about this. Get rid of the installer that gets 15% of the calls callback. Give them an attitude adjustment and say, if you don't come in with a smile on your face and start fixing these things, I'm going to go to war for you, but you got one month and you got to make a tough decision. And most of you aren't willing to make that decision. That's the sad part. You think they've got you held hostage. Let's face it.

These people that work for you, you do not, they don't work for you. You work for them. They call the shots. That's nowhere where I've been in that boat. I've literally sat in your seat and I hate that feeling, man. I can't let go of this guy because he's all I got. And that should make you angry and that should make you change. And that should have you literally figuring out a way to hire more people and train them the right way with the right attitude. I do not train technicians anymore that don't have a great attitude. I hire for attitude and sense of humor and for the smiles and the body language. And then I train them on garage doors. I own a foundation repair and waterproofing business in Charlotte, North Carolina. We

partner with a local family office minority stake to provide growth capital and aid and back office functions. We just partnered with Rhino SS to revamp our marketing. We partnered with Kick Charge to revamp. We're switching to Housecall Pro for our CRM. Trying to take your advice and implement. Any advice on growth over the next three to five years, greenfield markets, or eventually path to smaller acquisitions. Here's what I would tell you. You're doing all the right things. A lot of people ask me, what's the formula? Most people don't have systems. They don't have anything written down. They don't have manuals. They don't know their KPIs.

Their CRM is not dialed in. They're not branded correctly. They're not doing any outbound calls to their list. They're not sending out any mailers. They don't A, B, test, different type of marketing. I would say you're doing the right things by getting Dan Antonelli. You're doing the right things by pulling on equity because these guys are typically smart. But just realize when you have a bad month, they're going to be down your throat. I think one of the best things that PE

can do is get your reporting dialed in and get your CFO doing what their job is. The CFO's job is to forecast and protect the profit. And they're thinking about ways to work in the business to work better deals, to get your EMOD score down with your workers' comp. They're thinking about ways to have less insurance claims. They're thinking about ways to do better prices when you're buying your fleet from enterprise. All these things.

The CFO is figuring out ways to get more from your vendors. Not only better pricing, but get more co-op dollars. And I think a lot of people are not looking into their co-op dollars and holding their vendors accountable. Everybody raised their price significantly through COVID. And now they're not really lowering it, but your vendors are willing to do more. They're making a fortune right now. We're having them host a bunch of different work parties. We're having them pick up lunches for us. We just ask them. They sent us money for our pinnacle trip because you got to ask. Just like I said, you

got to meet with your marketing company at least once a week, hopefully twice a week. You should be meeting with your vendors too, quite a bit, but you're doing great. It's a great start. Touche, who is using your marketing for what? We've got 10 companies and 10 internal marketers. Well, look, I hate promoting people. I mean, I love everybody I work with and they give me the best, best, best service possible because right now there's 90 people listening. And the last thing I want to do is promote somebody, especially for marketing. And then they say, man, that Tommy Mello guy said to use this and they didn't do a great job. I think Lauren at Search Kings does a great job on LSA.

I mean, I have a whole team that we build backlinks internally. I use a whole team to do media buys. Sam from Larry John Wright does a very good job. I know the Wizard of Ads, Ryan Chute does a great job. He was just in town on creative ads. I'm friends with a lot of these companies. Camp Digital, Chris is amazing from Rhino. He cares. If your marketing company cares and you listen to them, that's all I care about. I'm not going to tell everybody to use all these different companies because I've done that in the past and they get different results. And, you know, I talked to a

guy yesterday that's used Scorpion, using Scorpion. I don't really care if you're getting leads and it's at the right cost, then it's on you. Look in the mirror. But I'm not going to go into detail on everything I use because quite frankly, everybody says, man, I do's on you. Look in the mirror. But I'm not going to go into detail on everything I use because quite frankly, everybody says, man, I do agree if you use Dan Antonelli and get seven power contractor manuals, those are two of the best in the country at what they do. They're the only ones that really do it. I mean, there's a couple other guys that do wraps to do a good job. There's nobody I know that does manuals like Al and puts together your org chart and your depth chart

and comes up with the performance pay, which we're coming out with a whole course about that. And also, there's a lot of great marketing companies that do different things. And I like to find specialists. I don't like a jack of all trades. I don't find that they work very well.

They're good at a lot of stuff. They're great at nothing. And they're bad at a few things too. I'm trying to come up with a performance-based structure for employees with mobile car detailing. I thought letting them keep tips, getting a kickback when customers leave a five-star, any ideas.

Jacob, I would do sold hours, right? So you build a pivot table and you figure out how long it takes. Your job is to have them maximize jobs, right? So I would do a few things. Number one is the more cars they could do in a day, if they do a great job, send pictures, the customer is super satisfied. You need to be there time heals all. So you can't just be there 30 minutes. So I'd say, listen, you need to be there at least an hour and a half. I'm going to pay you. I pay them a percentage of the job because you want a way to understand your profitability before you even start the month. And so paying them hourly is so wishy-washy. You say, this is how much I pay you on this vehicle. If it's this vehicle, I pay you this much. And it's a percentage of the total. So you can start calculating your total without having to worry about hours. Or you do sold hours. This job takes three hours. I'll pay you three hours if you get it done in two. Great. And then yes, letting them keep their tips. You got to let them keep their tips.

It's their tip for them. And number three, reviews is a great idea. And number four, I'd say if you go out and recruit a customer, a neighbor, if you're able to post yard signs or whatever you do, I'll give you the first... Obviously, growing customer base is important. They sign up for a membership and they get more than four details. I'll give you one of those details. I'll give you... Let's say you charge $150. I'll give you $150 to get that I'll give you, let's say you charge 150 bucks. I'll give you 150 to get that client. Your goal should be converting those into a membership. So you want them out there recruiting clients. And then another performance pay is

when they recruit a great person, one of their buddies, you'll pay them maybe a thousand bucks. I don't know what it costs you to hire somebody. Maybe it's less, maybe it's more. Maybe it's 200 bucks. Maybe it's, you take them to Topgolf and their entire family. Maybe you have a party. It depends on what motivates your people.

Sometimes it's money. Sometimes it's recognition. Sometimes it's just hanging out with you. And it's up to you to identify that. What have been the most influential books or resources? Oh, man. I mean, where do I start? Obviously, going to events is a big resource.

I'd say the number one resource to help me grow my business was visiting HVAC companies. If you go to TommyMelo.com forward slash shop, you can come to a shop tour. I think a lot of people, I answer questions, give them books. They tour our facility. A lot of people are taking advantage of that, but a lot of people say they can't leave their own business because they're trapped. It's kind of pathetic that they can't leave work for three days to go make their business better. Every quarter for three years, I went and visited a big business doing over 100 million. I learned more from visiting other companies than all the books combined to see it in action and talk to people that were in the fight that I was in.

Not consultants, but real companies that are doing what we're doing. Talking to CMOs, CFOs, COOs, talking to head trainers, talking to head recruiters. That's the game changer. And there are a lot of great books. I mean, depending on if you're looking for hiring or operations or sales, the E-Myth is obviously an important book. How to Win Friends and Influence People. Go for No. I mean, I can keep going and going and going on books.

They're all important. One of the books that changed my life was Who Not How? Buy Back Your Time. A really great book was The Ultimate Sales Machine, The Richest Man in Babylon if You're Trying to Save Money, Jim Collins, Good to Great, Built to Last, Gino Wickman, not EOS, Rocket Fuel.

Rocket Fuel is a great book. If you need to find a great number two and you're a visionary, it talks about Mark Winters. Mark Winters and Gino Wickman, Rocket Fuel. Those are some of the books I'd recommend. Hey, I hope you're enjoying today's podcast. I just wanted to let you know that the super early bird tickets for the Freedom Event are now available. This means 800 bucks off the elite or VIP tickets and 20% discount on general admission tickets. Listen, if you enjoyed freedom 2023, this year, we're taking the event to a whole new level. Jocko Willick, the Navy SEAL who wrote the

book extreme ownership is already confirmed as one of our keynote speakers. And there's still a lot more to come. So go to freedomevent.com forward slash podcast and get your super early bird tickets now. That's freedomevent.com forward slash podcast. Just make sure you do it before the prices go up on June 3rd. Now let's get back to today's episode. How do you hire a good SEO expert?

What questions to ask? How soon should you see improvements? So SEO is a long-term game. Most people don't understand SEO. First of all, it's built on the foundation of a website, right? And there's a site map. There's H1 tags. There's schema data.

And there's metadata. And you've got to have content is key. Rich content with videos and pictures. And it's indexed in a certain way. So if your site map's not built right, and it's not great content, the people don't stay on the page and the SEO is not worth anything. So the wrong website that's not converting doesn't really matter how much SEO you do. So after it's all done with the metadata, the schema data, and the H1 tags are correct, and the foundation is right, there's two things you need to keep adding. And that's content, great content, and that's backlinks. So I'm a contributor at Inc.com. I

write articles for Forbes and Huffington Post. You can search my name and search Forbes or Huffington Post or Inc. I put out a lot of... Each week, I put out an article on Inc. Magazine. And they're very good articles, I must say. So those are great links. Some of them are nofollow. Some of them are follow. There's two types of links, nofollow and follow.

A lot of the bigger articles are nofollow. PR Newswire. You want to do press releases. You want to have a blog and you want interesting, cool things on a blog. And you want to put outbound links and inbound links. The more time you put into the content, the better you're going to be because then other companies pick up great articles. And there's all kinds of things you could do for SEO. But it's really about getting great backlinks. There are certain tools you could use. I'm sure I get outreach all day long on LinkedIn and people say they want to write me an article

as long as I'll link back to them. First thing I would do is tell every single person you work with, your manufacturers, every single person, your payroll company, where you're getting your vehicles, every single thing, I'd write them a testimonial, make a video, and just ask them, if you're going to put this on your site, and I'd ask them to put it on their site, they link back to your website. And it says, let's just say it's Wells Fargo. Hey, I wanted to tell you guys, I work with John at Wells Fargo. These guys are amazing. They got the most locations in Phoenix. They've been there

when I needed my SBA. I'd say this in the testimony. They're a big bank. You think they don't give you great customer service, but you're wrong. You talk to my man, John, or you talk to Marissa over there. They do a fantastic job. This is everything they've done for me in my business. I highly recommend them. And they'll post that on their website and they'll link back to you. And that's a really important backlink. The bigger the company, the harder it is to get backlinks. Every time I give to charity, every single time I do a soccer league, I say, I'm not giving you the money unless you put this on your website. It doesn't have to be the homepage and it links back to our site.

That's another strategy. You could do a scholarship for $1,000. That's an EDU backlink. That's worth a ton of SEO weight. So that's kind of how SEO works. Yes, Tim, Hook Agency does a great job for the industries you work in. Jennifer, we're looking into moving to MBO structure for our employees, admin ops people, non-sales. Are there tricks to this, to non-tank employee morale and culture? Cutting base feels like a slippery slope. You know what'll happen? I've done this hundreds of times for companies. What we end up doing is

putting in a straight performance pay for a lot of the roles. You kind of want to move slowly into this, but typically a lot of people fall off. Certain people just like a high base, they're like high hourly, and that's the type of people they are. They don't want any skin in the game. They don't really like performance because they're not performers. So it's hard to take this person and put a round hole in a square peg. So you end up losing people, but you hire people that love performance, that don't like a ceiling, that want to make more money, that want to stake in the outcome. But if your paper of performance is done wrong and nobody can make more money. So here's what I recommend is I always start with one person. I start with the leader, the leader of the pack that holds all the keys to the city.

And I'll work with that person to get the pay perfect to where they're actually going to make more on performance pay. We'll work on that sometimes three to six months. And I'll test things. And once I got it locked in and I know they're making more money, but the company's making double off of that person, then they become the evangelist to work it on everybody else. And they hold a big paycheck up and say, look what we figured out. And that person keeps their mouth shut until you figure it out.

You give them whichever is more, the performance pay or the old way. And once it's locked in and you're happy with the structure, that's when they roll it out to the rest of the people. Let me get back here. I'm going to read some of these questions. David said, five years ago, I started a handyman business. I operate the business by myself. I'm a jack of all, master of none. I'm a slave to my business.

I've come to the conclusion I need to figure out one thing I like to do and become an expert in my area. After reading your books and listening to some of your podcasts, I'm inspired by what you do. I now understand I need to scale my business. I plan to start over. I'm in the process of starting a garage door business. I would like to build a business to do it right. What would be the first thing you recommend doing? Should I sell everything except one truck fully set up with tools and everything I would need for a garage door business to free up cash? I'm limited on cash right now.

Hopefully, the business will take off soon. Any advice to help me on the right path would be greatly appreciated. This is from David. Well, you know, garage door freedom is a great asset. Getting everything dialed in. Starting with the right brand. Yes, sell everything off. Get a bunch of cash. You're going to need cash for marketing. You're going to need cash to get

your brand. You're going to need cash to get your manual set up. Garage or business, I'll tell you this. I don't know of any company, and I'm not trying to be cocky here, that has been to more than three markets that just does retrofit residential. Anybody that does new construction, their multiples go. Anybody that does commercial, their multiples go down significantly. Commercial, everybody says commercial is reliable, except for you're short on cash. And sometimes customers don't pay. And you're cut into liabilities because something went wrong with a commercial job. So I'd say, David, Garage Door Freedom is a great resource. I get as much cash as you've got. I'd get branded correctly and get a plan in place.

I mean, going into an industry with no experience, you know, someone asked me yesterday, they said, if you could go back in time, what industry would you pick? I said, it's simple. I want demand businesses that you need to call and get it fixed. Number one. Number two, I want the highest ticket. So I just do my research. Roofing leaks, high ticket. HVAC goes out, high ticket. Hot water heater goes out, high ticket. I go into things with a high, high, high average ticket. And some people say, man, it's really tough. You don't know my industry and you don't know how much competition we have. Oh, really? There's 500 garage door companies in Phoenix. I love what people say. You don't know how tough it is in my market, my industry. I hear this all the time. I hear this from my own technicians. So I sent another

tech in their own market. One of my better techs from another market, our MAT team, we got market acceleration technician training. So I think you'll do great, David. I just would tell you this. Don't expect, just like I don't expect to start an HVAC company and do what Leland or Dave Geiger or Ken Goodrich or Ken Haynes did and end up with $100 million business. You want to make 200 grand a year for the next five years, just understand that when you have a business, it's going to take five to 10 years to start the fruits of your labor. It's going to be a lot of hard work.

The more you can spend time checking out companies that are kicking ass, the better you're going to be. I'd get out there and look at companies. I'd start going to these garage show shows, the IDA. I start going to WASA and all these the IDA. I'd start going to Wausau and all these different organizations and just be around the right people because the garage door business is just as difficult as anything else. It's easy to get into the business because you don't need to go to any school. You don't need to have much licensing. So the competition is crazy in this industry.

At least in plumbing and HVAC, good and bad. You need licenses and certain insurance and other things like that where garage door is a low barrier of entry. Brad said, with your tech bonus plan, do they scale up revenue from zero as based on waiting? Or is it a minimum revenue to be eligible for that KPI for $50,000 per month? So my guys start out, when they start out at zero revenue, they get graduated up to it. They're a junior tech, and then they hit $500,000 in revenue. Then they become a tech, and then wait a million dollars, they're a senior tech. That graduates them to the highest possible performance pay. And then there's other things that they'll have to focus on on their

scorecard. And quite frankly, we've got this theory now that if you're not focused on the main KPIs, like if you're not driving good, you don't have a job. When you're doing drugs, you don't have a job. You lie, cheat, or steal, you don't have a job. But if you're not having an eye conversion rate, you're going to go back into training. I mean, we put guys back into training for a week, then another week, then another week, then another week. Your KPIs, we have a lot of one-on-ones, but that's kind of how our performance pay works.

For an HVAC company that is around 1.3 million and wants to implement 100% performance pay, but at this level, there is not enough work during the shoulder season. What type of hybrid performance pay would you recommend to keep talented techs to stay with us and still have the opportunity to make money? We are working on our marketing to own our town. Well, $1.3 million, George, it's really tough, man.

I mean, I've got technicians in the garage industry that do more than that I mean if you're not doing 4 to 5 million dollars at your top guy there's an issue there I mean how much talent are you trying to keep at a 1.3 million dollar business I'm just being real I'm not trying to be negative here

but at 1.3 million dollars how many people are you trying to keep busy that's not enough money I mean, you got to have money for the shoulder season. You got to build your database. You got to spend money in marketing. You got to be able to have stuff in the shoulder season. So that's where I would start is figuring out why are you not making a lot more money? Because $1.3 million, how many people are you trying to hold during the shoulder season? It better not be more than one or two guys. If it's five, you got a problem with sales.

I mean, even if you sell your units at 12 grand, you're running 10 jobs a day. Half of those should be new units over eight years old. That's 60 grand a day. You work weekends at 336,000 a week. Right there puts you at a million a month. So there's something missing here. I don't have the answers until I know more about the business.

Waylon Dressel said, I own an HVAC business. I have zero idea about marketing. I'm in year three and I'm struggling to get my phone to ring. What tactics would you get? Many possible leads. It's interesting because we do a $29 tune-up and it's one of the best lead sources we've got. I think when you're small, you got to compete on price and learn how to build a ticket. Mailers work great to your existing list. B&I meetings work great. Meeting the people really helps. Trying to build a foundation of realtors and builders and people, handyman that use you regularly, That'll keep you busy. Those keep the lights on, especially when you're small. And then your marketing dollars are where you send your top guys to. So hopefully you got enough business coming in to keep the lights on that's

consistent. And Valpak works great for us. Clipper Magazine, Savvy Shopper, Welcome Home Arizona. I'm in every magazine out there. Some phone books still work, believe it or not. Like Albuquerque, where the 90s are still alive. The phone book works. In older communities, phone books work great. Josh Bennett. I'm having a huge issue between getting enough work and getting loyal employees because I don't have full-time work.

I have been going the contract route and working when I get the work, but there is no certainty to finding people and I have to keep my great reputation up. How do I automate this thing where I don't have to sell the jobs and do them on top of marketing, social media management? Joshua, it starts with getting one great employee and building a manual around that guy. It's putting your love TLC into that one person, making sure they're great, pay them well, have them know that they're going to be a leader, know that they're going to take that off your shoulder. So once they're doing it your way, they're doing it the exact same process and you've got a manual and there's a process and the next guy can learn the exact same way and the systems

and how he enters into the CRM, the way they close out jobs, the way they go and they call their next job. There needs to be a system. Every time someone calls you and they don't know what they're doing, it should be in your manuals. It should be in your systems. So I think you get one good person, your evangelist, your main person, and that person will take on the role of training everybody else. They need to be great. That's the fundamental. The first hire is the most important hire. Alex said, I watched one of Tommy's videos on YouTube. It was dissecting Grant Cardone's view on saving. In that video, he shared an example of it being wise to save and invest. He used an example of a self-directed IRA that he used to invest. My question is, why did he choose that investment vehicle over a traditional Roth or an IRA?

So traditional IRA, obviously you're paying tax when you pull the money out, right? Roth IRA, you're paying taxes going in. So the goal is that you're going to have, when you're young and you're putting money into a Roth and maxing it out versus when you're older, you're going to be paying higher taxes as you go through work and you get older. You're going to own more real estate. There's going to be a higher tax threshold. So you're paying a little amount of taxes going in. That's why I did a Roth. Now, mind you, I was 16 when I started my Roth. And then eventually I found really good investments. I put it into this real estate fund and it 5X'd in five years. And it's going to 5X again. So I'll have $3 million in a Roth by the time I'm 43. So when you think about

that, anything I invest that $3 million in, I can invest it in real estate. I can invest it in anything. And it's tax-free. So if I buy, let's say I'm able to buy the $3 million, I buy a bunch of $200,000 houses. I buy 15 $200,000 houses. And I use that money, that Roth money to keep buying houses. What ends up happening is all that money I get, whether I sell that house or not, it's tax free. So that's kind of some of the explanations why I did that. Matt said, I'm looking for a mentor accountability partner who is in management. Do you know any local groups here in the Valley? How should I go about finding one?

I mean, YPO. YPO is what I would get into. YPO is going to be great, Matt. I know a lot of people in YPO. I think that's where you want to be. I always like finding a company that's bigger than me, maybe in a different market. If you're in Phoenix, I'd go find somebody in Tucson.

Let's see if you can share ideas. But YPL works great for that. Let's see here. Tommy, as a metric of success and goals, I have solely concentrated on monthly chart on service time. But as we grow, I think I should be concentrating on the same smaller items and then the monthly chart. Any thoughts on other things to pay attention

to and improve on? Connor, I mean, look, we got our meeting here today with Cortec, our PE sponsor, and there's 200 pages. We've got two full-time FP&A people.

I mean, I'm looking at so much detailed data. Just our marketing is 20 pages. We've got two full-time FP&A people. I mean, I'm looking at so much detailed data. Just our marketing is 20 pages. We've got a lot of stuff we're working on. I mean, literally, the numbers, the way you dissect them, we started looking at, I took a deep ass dive in a conversion rate on service calls for door sales and just estimates. I mean, the data will set you free. I don't know your business perfectly, but I'm obsessed with data. But the most fundamental data is your call booking rate, and that could include Angie, HomeAdvisor,

any type of leads coming in through forums. Maybe there's a form on your website, maybe there's social media. So anything incoming, that's an important one. And then your conversion rate is super, super important. And then your opportunity job average and what does it cost you per lead per lead source? You get those four fundamentals down and you master those and make sure they're all great. You'll be killing it. You'll be making a lot of money. Then I'll tell you what to look at next. Yeah, great employees do not like lazy employees. They won't stick around for it. And if you're keeping lazy employees there, your company's

going to start falling apart. You got to make a decision and get them up or get them out quickly. What's step one to knowing my numbers? Step one, making sure your CRM is dialed in and making sure people are not cheating. I always talk about this one, but a lot CRM is dialed in and making sure people are not cheating. I always talk about this one, but a lot of times CSRs will not count an out-of-service area against them. Well, why are you getting out-of-service calls? You can't fix the marketing. So, you know, one of the things we've got, what's called the VRT team, and there's two full-time guys. There's going to be three full-time guys on that team. And what happens is when a customer courtesy calls in like,

my safety eyes, my garage door is not working. It could be safety eyes, GFI, manual release. There's five reasons why usually customers call in that we were just out at that are not our fault. And we've got this whole program. It's called WebEx that we look at the, we kind of, the customers got their cell phone and we look at it with them and fix it. Well, they weren't counting some of these if it really was the technician's fault

because they didn't want to be taking money out of the technician's pay. Well, Luke, our COO, found that out last week and he's rectifying it. Like the company loses money and you want to be nice. And how are you supposed to change behavior? If the technician doesn't know they're doing anything wrong, they can never fix it. And so you got to be very, very careful.

It's called data integrity. You got to make sure the data you're looking at has integrity. It's trustworthy. You could depend on it. So I think the main thing is focus on making sure your numbers are accurate and the CRM is doing its job. Have you listened to the podcast I had years and years ago with Ara? He said a lot of business owners, they try to make the CRM do what they want instead of what it's built to do. So this is going to require you to change the way you do things and conform with the CRM the way it was made to be.

And that means it might be an abrupt change in your culture, but now the CRM is working and the data is accurate and you can trust it. And it's, you know, you look at Service Titan, they have billion dollar companies that have built these best practices. Why is your little ass company, the way you pay more important than what thousands of great companies have done? It's just your inability to conform because you think you got to figure it out better. Well, we like to give a $5 spiff on this and then, oh yeah, well, if it's over this and we sell this, we do this. And then by the way, if the guy recruits somebody and does this, it's like, holy shit, I need a calculator to figure out.

Just do what ServiceSite, Housecall Pro, Jobber, Service Fusion, Sarah, do the way it was supposed to be paid. Build it exactly how they recommend and conform to their systems that they have tried and true processes of multibillion dollar companies. And don't be hardheaded on you've got the best way because you don't you don't have the best way these guys have already figured it out your stupid way of like the quadratic formula and matrices and i need a calculator and i got to round the nearest number and get the remainder and all this crap conform to what they recommend is what i would tell you my lead magnet currently is a free initial detail and info packet on how a car wash messes up your paint along with protection options of vehicles.

Any advice on my lead magnet? Jacob, I like it. I would just make sure, the first thing I would do is not give that to, I really want to focus on affluent clients, right? I want to go to the rich people that just want it done. And first thing I would do, I would partner with Mercedes. I would partner with Cadillac, especially the Escalades. I'd partner with, just think about all the high-end cars, BMWs. I wouldn't partner with like Ferrari or Lamborghini because you screw up that car, you get a chip on it, you're paying, you know, 10 grand. I'd find strategic partnerships and

then make it what's in it for the guy at the dealership. If they're feeding you leads, you say, listen, I'll come to you. I'll come to here and I'll detail your personal car and I'll cut you in a 10%. And if you got the managers, I'll detail, you know, you do all their stuff and you do it at, you don't charge them, but they feed you the leads. I'd rather do that. I want to go to the affluent clients that have a lot of money. They know the customer owns three BMWs. You want to go to a house that you could do detail two, three, four cars at a time, not one. So I'd go to the source and these people care about protecting

the paint. They've got a whole automotive area in there for repairs. They can feed you business for days. That's what I would do. Hi, Tommy. We are thinking to partner with Guild Garage Door Group. What do you think about their platform? Here's the deal.

I think they've got a pretty good opportunity out there. They say, we're just going to let you run the business as you see fit. Well, listen to my podcast with Ken Haynes. I don't know much about these guys. All I can tell you is you can't buy a bunch of different companies that act and walk completely differently and not have a plan to combine them eventually. And that means buying power, call center power, training power, buying truck power. Like everybody comes out

and says what everybody wants to hear. You know how many different PE companies we go against? And now we're paying the highest multiple in the industry. Anybody that wants to sell, get ahold of us, there's nobody that can even touch what we're paying right now. And there's nobody that has a better opportunity of rolling equity than A1. But I like competition. It makes us better. It's called capitalism. I would just be very careful. If somebody tells you everything

you want to hear, it'll only take two years. I can't wait for two years from now, the people. And I don't know nothing about the company. I'm sure they're great people. They've got family money. They raise capital. And they're saying out there, we're just going to do the right thing and let you keep running your company. Well, how do they get economies of scale? And they don't have the people doing the same stuff. They're going to let everybody just use a different CRM? And this is what Ken Haynes said on my original podcast with him.

And then everything changed. They're not getting better deals with insurance if you're not changing insurance. It doesn't change your payroll company. You're going to have to get on the same CRM. You're going to have to get on at least QuickBooks or Intact for the reporting. I mean, you don't get economies of scale. So these are the questions I'd be asking. And they'll say, oh no, don't worry about that. Everything's great until things aren't great. And you'll see these guys, they've got limited partners that invested in them or family money. They're not just willing to lose that. That's when they step in. I'd look very close at their contract and make sure you know what you're getting is all I'm saying. I don't know them. Can't say anything good or bad. Thanks for all that you're doing,

Tommy. Shout out for the Santana Brothers Plumbing in Pearland, Texas. What are your thoughts on Google Guaranteed? I think it's the best thing that's since sliced bread. I think there's a lot of fake shit out there, but that's going to get solved. Looking forward to Tennessee next week. I am too, Matt. Appreciate you. Barter group visited my shop.

What's your take on barter groups? I like them when you're small. You still got to pay taxes on it. I think if you use barter groups correctly. I love charging for service in barter groups, high service tickets, and then using it to buy, using it restaurants and things that I could buy that are goods. So I like to sell high service and get rid of, and then buy goods with barter. Okay, guys. Unfortunately, I've got to run. So any questions, I want you to go to homeserviceexpert.com forward slash questions. Write down your questions, copy and paste them into the thing. If you want to order my book, it's elevateandwin.com. And if you want the podcast

takeaways, go to homeserviceexpert.com forward slash bonus. And really appreciate you guys. I always have a blast doing this stuff. Hopefully you get some value out of it. If you're not a member of Home Service Expert on Facebook, join it. And do me a favor. You got three minutes. Go leave me a review on the Apple page. If you got Apple or any other place you listen to the podcast, leave a quick review, just like you like reviews from your clients. It means the world to me. Right now, we're number 14 in the country for business. One, four. One, four. One, four. We're 14 in the country right now for podcasts because of you guys. The more reviews, the more listenership, the better I get. I love bringing the heat. I love

answering questions. I love giving great guests. The better I do, the better guests I get on, the more information you get. And by the way, if you guys aren't subscribed to this, get your first three months. It's Secret of the Trades. This thing is packed with information. There's no advertising in it. It's the real i mean this this thing is and put my blood sweat and tears into this todd herman was in here sponsored in here um not sponsored but i highlighted him in here uh he had a great podcast he he trained colby bryant go to uh tommymellow.com forward slash news and get three free months and it's it's not even, all I charge is what my postage costs for the year. I mean, I got writers that help me put it together.

You got a format and all. So I think you guys will get a ton, a ton out of this. But I appreciate you guys. I hope you have a great week. Go out there, murder it. Do what you need to do. Focus on the big thing, the one thing. Focus, focus, focus.

You guys have a great day. 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.