The Home Service Expert Podcast - Scaling Your Plumbing Business The Right Way

Episode Date: February 28, 2019

Richard Behney is the founder of The Million Dollar Plumber. He was the President and CEO of AttaBoy Plumbing for 16 years, and now does consulting for plumbing businesses. An experienced figure in the plumbing industry, he regularly hosts the Potty Talk Live podcast. In this episode, we talked about plumbing, business management, digital marketing..

This is the Home Service Expert podcast with Tommy Mello. Let's talk about bringing in some more money for your home service business. Welcome to the Home Service Expert, where each week, Tommy chats with world-class entrepreneurs and experts in various fields, like marketing, sales, hiring, and leadership, to find out what's really behind their success in business. Now, your host, the home service millionaire, Tommy Mello. Welcome back to the Home Service Expert Podcast. I'm your host, Tommy Mello, here with

Richard Bainey. Richard, I'm going to do an introduction, but how's your day going? It's going great, brother. We're loving it. It's a fun day, fun day, fun day. That's what we always say here. You're the host of Pottyty talk live the founder of the million dollar plumber you were the president ceo of attaboy plumbing for 16 years you just got in out of that business about a year ago it looks like you're february 2017 the vice president of state review operations at BrowSafe. And right now you develop and grow specialized in plumbing, but this applies to roofing, garage doors, everything of the same principles. But you went soup to nuts from the beginning

for the kitchen table and grew a multimillion dollar, a lot of truck business, and now you're just consulting, right? That's what we're doing now. Yeah, you're right, Tommy. This kind of stuff does cover all the trades. But we really have, and I say we, my wife and I, we worked this together.

We grew the business together. But we just have a heart for plumbers and we love plumbing. We can't help ourselves. Oh man, this is exciting for me. I just love this stuff. So tell me a little bit about where you came from. Well, I was born in 1963. I'm not going to start back that far.

But no, I think I kind of like with plumbers, I fell into plumbing. You know, we were talking before the show here, how do we get into plumbing? And so where I came from, of course, you know, I had other dreams and aspirations and, you know, spent some time in country music and Nashville and that kind of stuff and time in the service and Navy. And, you know, we. And we get out, those things didn't work out. And I just found through a friend, I wound up working for a plumbing company. And I found myself in plumbing and fell into it. That's what we say. We just fall into plumbing. And that's what's common with literally plumbers all over the world. It's my privilege now I get to speak with guys all over the world, guys and gals.

There are a few gals out there doing it as well. We all seem to just kind of fall into plumbing and the same thing happened with me. And then I was pretty good at it and somewhat enjoyed it and, but did pretty well at it. And then I, you know, I got the bug. I've always kind of been an entrepreneur at heart and look back and look at different things I did, even with my music career. The first time I ever went to a concert, it was excited to see the band and all, of course. But I started counting seats and figuring out how much everyone paid for each seat.

So I've always been intrigued with the idea of making money on scale. And so I thought, instead of working for this guy, I'll start my own thing and I'll make more money myself. So here we are today. Yeah, I think everybody wants. I really didn't work for anybody in the garage drawer niche, but my partner did at one point. And of course, it seems the grass is always greener. Yeah, yes, it is. But it still needs to be mowed. You need to mow that lawn. And the thing is that back then, I just thought it was so easy. The marketing has always come easy to me. But you know, the one part that's so hard is scaling good people.

And what's your perception now that you can look back at the business you ran for 17, 16 years? What were the biggest hardships in your particular case? What was the struggles that you just, you don't miss it? Oh, yeah, right. Well, of course, starting out, you're exactly right, Tommy. We jump in these things and we're going to take over the plumbing world. And we think that we just get, in my case, we had a beater truck, a few hand tools, and plumbing license, and a plumbing dream.

And we think that we just get out there and that everything's just gonna go our way or come our way. And it's a whole nother reality. And so just even starting out, what we find is the plumbers were very good at what we do. And especially those who decide to even start their own business, very good plumbers, but we're not businessmen.

And neither was I when I started out. And so you're out there just scrounging for all the work that you can get. You don't know what you're charging or why you're pricing the way you're doing. You just basically take the price book from the last company you worked at and charge a little bit less.

Or you talk with guys at the supply house and figure out what the competition is charging and you just charge a little bit less. Or the worst case, what most guys do is we just pull it out of our ours and you know we did you charge this much last time so hey we'll charge this much again or i need to make this much this week so i'll charge this much so i was i was doing all those things as well and um really getting nowhere and just struggling and it's just basically you own your job i don't know if you ever felt like that tommy oh you own your job. I don't know if you ever felt like that, Tommy. Oh, yeah. Your name was on the truck, but you just basically owned your job

and just work it all the time. And that's how I and a lot of guys out there, how it's happening. Until one day, I finally got a mentor, a business mentor, and then things took off. And I started learning the business side of things. And that's when things took off for me. I think everybody needs a mentor.

Everybody needs someone to come in to be that exterior view of your business and be able to look down and slap you around and tell you you're not doing this right or that a boy, keep it up, you know. Half the battle is realizing that. Oh, exactly right. I think, you know, in the trades and certainly, you know, I speak from plumber, I can speak very comfortably being, you know, being in the plumbing industry and being around plumbers and being that kind of guy that, you know, we have a hard time.

First of all, if you started, you know, if you're in plumbing, you're kind of an alpha male, kind of a guy, I get it done, nothing's going to get past me. I got it under control. And then certainly when you start your own business, your own plumbing company, you think, hey, I can get it done. I got it under control. So it's tough for us to admit, to reach out for help. That sounds weak, but really that's wisdom and that's strength. And that's how most successful people do it, is by standing on the shoulders of others and learning from others. Yeah, I got to tell you, we talked about this earlier, but being a part of Service Titan, talking to plumbers, electricians, and air conditioning companies, it's almost like... We talked a little bit earlier

about Jim Abrams, and it's like they pioneered the financing, the service agreements. They put stuff out so long ago in the 70s and 80s, and the garage doors are just coming up to this, but every industry could use a service agreement. Every industry could use financing and some of these business operational things that we discuss. Oh, definitely.

Little things like that is learning those kinds of things too, you know, of having service agreements and putting financing in place. You know, that was one of the best things that I ever did was offering, we called it the attaboy assurance of having service agreements and putting financing in place. That was one of the best things that I ever did was offering, we called it the Atta Boy Assurance Program. And it just allows you to get that information to be able to communicate with those customers again after the fact, but to be able to get back in their homes a couple times a year

and provide some service, which usually creates other opportunity. I mean, service agreements are one of those key things you just don't think about or even know really how to put into place. You know, and certainly, you know, the financing and that kind of stuff. Those are key things to helping your business be successful. Absolutely.

And, you know, you recently, so if you don't mind me asking, 2017 in February, did you kind of give it to a family member? Did you sell your company? I don't want to know prices or anything, but... No, we wound up selling it. We were always having companies hit us.

When you get to a certain size and you set your company up in a certain way, and by the way, really, if you're looking, those who are looking to purchase your company, they're looking for two things. And that's, you know, they're looking for two things. And that's... They're looking for a recognized service brand in the market and a company that has systems already in place. So these things that you're mentioning about having service agreements and financing available, service tightened, those kinds of things, those are systems.

And so it's important to have those things in place. And so we certainly did. And guys will start... There are companies that start calling and knocking on the door and wanting to buy you. And that's what was happening. And finally, there was enough offers being made that the price was going up.. It was ready to move on. I was doing some other things. And just the timing was right. The right... We didn't sell out to the highest bidder. I sold out to... These happened to be local, but they had other businesses that were similar. And it would work with the culture that I had created. So I took a little bit less, but it wound up being better for what I thought was still my baby, our baby. And it's turned out to be a good thing. So that's really interesting to me because right now, 7 out of 10 baby boomers in the next 5 years are getting ready to get rid of

their business. Now, I've talked to a lot of guys that say the only way I can make the money I need to make for my lifestyle is to hire a really good general manager. Unfortunately, it doesn't work that way. So if you want to sell your business, let's talk about what they need to be thinking about and how to set up this next three to five years to be able to really get the most out of your business. So can you give us some insight into that?

Well, definitely. It's being set up with its systemized... That you have a system in place. Again, in my experience with everyone that was looking seriously at Attaboy Plumbing, we're attracted to two things. That was a brand that was very recognizable in the market. And so branding is very important. And then you had a system in place.

Basically, this thing was like a money machine. That's what they're looking for. Can they come in and just maybe throw a little bit more money at it, grease it a little bit more to make more money? And that's about as cold or as sterile as it really gets. It's those two things. And so definitely, I want to be making sure that you're creating a brand in your market,

an emotional brand too. Today, it's pretty important socially to be... Are you recognized socially? That's all part of it there. And then, of course, having the systems in place that could you... And one way you can tell if you have enough systems in place that could you... And one way you can tell if you have enough systems in place, can you walk away from the business for a month and it's still

going to run just fine without you checking on anything. And so those are the two things that are very important in my opinion and my experience. So I'm a little bit different in the fact that I would want to acquire a business without ServiceTitan, without these major systems, because I don't look at it as a cashflow machine. I look at it as a way to go into a market versus grow organically. As I push these systems in, the ROI becomes, I become very profitable because if I can increase the conversion rate, increase the average ticket, increase the service agreement, increase the financing we sell, increase the conversion rate, increase the average ticket, increase the service agreement, increase the financing we sell,

increase the booking rate, and really, like you said, kind of throw some gas on the marketing. And I've got good technicians. I'm really buying the good technicians and the goodwill of the brand. And then I'd convert it. But definitely, if I was to buy a company

straight for the cash flow, I'd want to make sure they've got manuals. I want to make sure they've got an org chart and that there's no key man that if this guy leaves, the business falls apart. So I think that's what you sold. And it's worth a lot of money. I mean, I know some companies right now are getting seven to eight times, which is a really hot $10 million plus company, but they're getting eight times profit. Yep. And you said something key, Tommy,

I want to hit on is, and we see this as, you mentioned not having a key guy. And a lot of these companies, we do have a tendency to start our businesses and our egos can take over. We start kind of started because of our ego and then being involved in it.

Our ego feels that we need to be on top of everything. Everybody needs to know that I'm here. I need to be on top of everything, that everybody needs to know that I'm here, I need to micromanage everything, one way or another, those kinds of things. But it's so important that you aren't, like in my business, it didn't need Richard Bainey. In fact, no one really even knew who Richard Bainey was. And if Richard Bainey was gone to Costa Rica with family

or we're doing whatever, business didn't care. No one else, vendors, no one cared. But they knew what Attaboy was, Attaboy Plumbing, and it was running on its own. So it's so important for the owner, the owner-operator to be able to position himself behind the scenes, to get himself out of the business to where he's not seen as being needed in any way, shape or form for the business. Yeah, and that's really difficult to do for, we talked earlier and I told you, it sounds really bad, but you said you love working with small guys

and I still don't love it as much just because sometimes you're speaking French. I feel like I am when I'm talking about KPIs and all these different numbers and really like how to recruit the top players. And they're like, dude, I can't even get one good guy. What are you talking about recruiting full time and all this stuff?

So it's really good to hear somebody that, I love people, so I can work with anybody. But the fact is that I just don't like to talk over people's heads and I'm not much, I'm not smarter. I just know I can impact people really, really fast on a CRM and I can actually show them that I'm bringing them huge value because I increased their booking rate, their average ticket, their marketing dollars dropped dramatically. And it's factual. You know, what do you find with the smaller guys that are still using paper invoices and don't have a pricing structure?

Yeah. Well, they're on the verge of having a heart attack. That's what they are. That's what I find. But I love, I don't, when I say I love to talk to all guys, you know, I'll correct that a little bit. I don't love talking to all small guys. I literally get called every day. I'm putting myself out there with Potty Talk Live

and with our academy that's coming up and that kind of stuff for teaching guys plumbing, the business of plumbing. And so I'm getting approached and literally talk to guys at least every other day that want me to coach them personally. Majority of everyone I turn down because they're not ready, okay?

But I love talking. It's so, I'm surprised by this. I never thought we sold the plumbing business. In fact, when we sold the business, we were done with plumbing and plumbers, okay? But we got back in with the consulting. We were asked to help and plumbers. Okay. But we got back in with the consulting. We were asked to help and do things. And so here we are today. But we found out that we loved it. I love talking with the guys that when a guy does have in his frame of mind that

he can say, I don't know these things, but I want to know this because I want to grow my plumbing business. That is so fulfilling to help those guys. I enjoy the big corporate stuff and the approach to do, to consult for big corporate plumbing and that kind of stuff. I have to admit, I'm a little bit of the opposite. That bores me because those guys,

it's just the money and it's, I just don't enjoy that. I just find it extremely fulfilling. We're taking where most guys are and where I came from to take the guy that has one truck, two trucks, can't figure out how to find the right guys, doesn't know his pricing, doesn't know what numbers to look at, doesn't know how to market, is doing everything on paper, but knows that that's not working and he's asking for help. I love that. The fact that you said the key thing and he's asking for help. I love that.

The fact that, you know, you said the key thing is they're asking for help. And the fact that they're asking for help, I mean, that alone makes you want to work with them. And you're right 100%. It's just the guys that have this I can't. You know that I can't attitude and the world hates me and nobody wants to work for me. And unemployment is so low you can't get any good people and all the guys steal from me. But they're not the ones asking for help, are they?

No, they're not. In fact, that's the first, that's the big thing out there. Just can't find any plumbers. My first question to the guy to see how he reacts is, well, why would anyone want to work for you? Just to see where it comes from. It's always been, I've been in the plumbing industry for 30 years and you've never been able to find good plumbers. It's always been, I've been in the plumbing industry for 30 years and you've never been able to find good plumbers.

It's always been that. There's always been, yes, there's less people going into trades. There was other times when there was less people going into trades. There is plenty of good plumbers out there. It's just, do you have a process in place that you're attracting

and then able to retain those good plumbers? You know, that's a process system that you have to have in place. So yeah, there's plenty of guys. And of course, we get that. And that's one of the reasons why 95% of all plumbing companies fail is the guys just get into it and then they just start pointing the fingers elsewhere. And they get fatigued and just upset and wore out. Sadly, I talk to guys, again, literally every other day, older guys that have just been run through the ringer

and they're beat up. It's a sad story. So, speaking of why would they work for you, do you love hourly commission or a hybrid? I love piece rate. Oh, perfect.

Piece rate's beautiful. Piece rate is the only way that you really can be fair to both the technician and to yourself, to your business. And it gets you out of a babysitting situation. It is the best way to go. Will your whole shop be piece rate? No, we talk about that, but we always try to work for, go towards piece rate. So piece rate in my definition of piece rate is commission.

I mean, it really is because commission is just a fancy word for it because either way, if you're selling it for this much, you've got a price book, hopefully. And you're making, if you get that in an hour, two hours, three hours, four hours, five hours, you're making this percentage. So no matter what, if you got the price book and you're making this much, I don't know what that percentage is and it might vary, but it's almost the same as commission.

And if P straight for a mechanic is if it takes six hours in the book to finish this transmission and you get done in three, you still make the same amount of money. So exactly. It takes six hours in the book to finish this transmission. And you get it done in three, you still make the same amount of money. So... Exactly. Well, see what... The thing with... The sad thing, at least certainly within the plumbing industry with commission, first of all, guys don't understand commission programs.

They don't. Majority of guys don't understand it. And then next, what happens is the owner starts messing with commission programs. What I mean by that is if they got guys starting to beat it, then they change up the percentages on this product or this service that we sell. It's this time for this amount of time or if you sell this many and all that. You lose the guys on that kind of thing. What I love about piece rate and what always worked for me for years is that just like you use the mechanic example, that's where piece rate comes

from. It's been there for years. But a guy gets an hourly rate. So if I'm paying a guy $20 an hour, say for a water heater, the water heater pays four hours to install. For this water heater at $20 an hour, the guy knows exactly what he gets, whether it takes him four hours, three hours, two hours. You ask most guys how long it takes them to install a water heater, an hour and a half. So you can see how they have more control of their situation and it's easier to understand. And so that's, in my experience,

piece rate was just always the best route to go. Now, not everyone was piece rate though, because there's guys that just need to know that they need, you know, I make this much a week. I need to bring $1,000 home every week. And some guys just want to know, I just want to know I make $25 an hour. I need to bring $1,000 home every week. And some guys just want to know, I just want to know I make $25 an hour. I want to make $25 an hour.

But piece rate was the best and simplest way that provided me as the owner of the business the most freedom and the most efficient way to audit and keep track of everything. Yeah, I agree. I think it's almost the same. And the thing that's tough about piecework for me is

we've got so many SKUs and even on a custom door, it's just really tough to... We do pay piecework. We pay a fixed cost if you install a door, a fixed cost if you install an opener. People argue about commission.

They say people on the 31st of the month are selling things too high to pay their rent and there's certain things. And there are people like that. That's why you have to have a price book. That's why you got to do customer surveys. That's why you got to make sure that they're replacing the bad parts. But I will tell you this, you come to my house and I got a toilet that was installed and the, I don't know what it's called, the flap goes bad and it's leaking. And Richard, you say, hey, Tommy, these toilets are all the same age. This house is 10 years old. This is going to keep happening to all of them. Now, let me ask you this, Richard, the flappers weren't bad on the other four toilets I have, were they? Were they bad at the moment? No.

No. And it's not disingenuous to replace those knowing that they've been flushed a certain amount of time, they're a certain age. So some people feel like this is the biggest problem in most home services, is there's the guys that say, absolutely, that's okay. You gave the customer options and they decided to do it. And there's other guys that go, if it's not broke, don't fix it. And I don't believe in it. But as a technician, what gives you the right to judge? Oh, exactly.

So Tommy, you hit my hotspot here. In fact, in the plumbing world, we talk about hack plumbers and about the work they do. If you're not providing customers option, you're a hack plumber. If you're not allowing the customer to make a choice, if you're just saying, hey, here's what it costs to replace this flapper, what you're doing is you're painting that customer in the corner. That's the only decision they have to make. You're not allowing them to understand what else is going on in their home plumbing-wise. You're not allowing them to make a choice on whether or not they want to hit it now or have to deal with it later. Or even to... We're talking about replacing fixtures and

that kind of stuff. What it would take to raise the quality of their life. They get to make that decision. So who are you as a technician to deciding that's all that I need to do? That's not professional plumbing. That's not a professional tradesman. Well, there's a lot of plumbers just like Roger guys, just like HVAC that go, I'm going to fix it for the cheapest amount and that's how I do business. And I always say there's three ways to do this. You're going to be the fastest, you can be the cheapest, or you can be the best at it,

meaning the best parts with the best value. But you can't be all three. And I chose a long time ago, I'm not going to be the cheapest or you can be the best at it meaning the best parts with the best value but you can't be all three and i chose a long time ago i'm not going to be the cheapest look we we had a lot of happy we we certainly weren't the most expensive in town we were our price what we needed for attaboy plumbing price there's there's a lot in what i just said there but we weren't the most expensive and we certainly weren't with the cheapest in town but our customers loved attaboy plumbing and uh And we provided a good service. I had guys making six figures, doing service plumbing, working five days a week, eight to five in Indianapolis. We were able to provide that by what we charged. And with full benefits and those kinds of things.

And it provided a good life for me and my family. Another, you know, 95% of all plumbing businesses fail within the first three years. Of the 5% that make it, 97% of those spend the rest of their lives just living paycheck to paycheck. So you can be proud, you know, all right, brother, that you're the cheapest in town. But I talked to guys again that are 55, 60

and on the verge of tears, literally every other day, Tommy, that have had a mortgage, they've had to put their families through schools, they've gone to Disney World, all that kind of stuff. And now they have nothing to show for it at the end of their careers and their lives. Yeah, it's amazing.

And that's the thing is they can't quit work. And I gotta tell you, my New Year's resolution, I learned this thing is called what's in it for me with them, right? Yeah. Learning about that for the other person. And right now, I've been a failure of not creating a common with them in my company other than for the technicians. So right now we came up with a new compensation program for the CSRs. And I want to share it with you

and I want to get your thoughts. We're basically going off of now certain key performance indicators and just, let's just call it metrics. So there's attendance, inter-department errors, shift differential. So if they come in, if they're working a late shift or early shift,

the quality of the call with a scorecard and the booking rate and the cancellation rate. So all these make up. So as a CSR, you have to book phone calls. Right. We found was you're going to love this. The current pay structure.

We have a gal that would have made 592 bucks at 15 bucks an hour. Yep. If she got paid for a call that she books based on this new calculation, she would have made $1,212. Now, what I love about this is seven CSRs would have made minimum wage. Instead of 15 bucks an hour,

they would have made 10 bucks an hour. So what it does is you reward the right stuff and all of a sudden she goes, wow. She goes, I'm making great money now. And the cream rises to the top. And people say, I don't like performance pay. It's not fair. These excuses of commission or, like you said, fixed work.

And if you could pay on this structure, and I'm working on getting it for dispatching, which I'm telling you, the biggest thing for me is that top producers with the best customer service rating, with the best conversion rate, are now optimized. That means if they're available 40 hours, they're working 40 hours. And that's how you can benefit with the dispatchers. And there's certain things.

But doesn't that make sense that the WIFM is now... If you book the phone... So literally, they get... So they get $1 if they're on time with their breaks. They get $1 for no errors. They get $1 extra if they're on an early shift or a late shift. The quality score is a dollar. And now if your 90% booking rate are better, you get five bucks on that call. So you got a total to make one, two, three, nine bucks per call that you book.

And that's why that girl made so much money because she's doing, out of 11 people, she's doing a third of the work. So by rewarding the right stuff, you get A players. Do you have any experience when it comes to a pay-for-performance model such as this for the call center? Oh, yeah. Definitely. And I love it. I agree with that kind of system, setting that kind of thing up. I also added another acronym, I guess, is that what that is, with them. I also went with the KISS method, which my thing was always keep it simple, stupid. Again, I'm a plumber, man.

So I'm a simple man. And so I come from looking at things that way. And so I did a similar kind of a thing where I still paid our CRM, and most I had was six, had six ladies answering the phones at one time. And so I did a thing where we were paying a base salary of like $12, not salary, but an hourly $12 an hour. Okay. Something like that. But we would pay $5 to $10 for every booked call.

Because that was our thing. We just wanted to book every call. Well, we got out there. We get out there. I got a plumber out there. We got the call. We had a 98.7% closing rate. Okay. We didn't, we didn't walk out of the house. We found that no one wakes up in the morning and wants to call a plumber. All right. Nobody, nobody wants to call a plumber in the morning. So if they called you, they want to get whatever done period. Okay. So you just need to find a way where it makes it possible where you, for you to do the work. Cause if you don't do the work, they're going to call Ben Franklin, a road router. So I knew if I got the ladies, we'd book the call to motivate them. And that's what you're doing with those kinds of things is to motivate them. So I agree with doing that kind of performance-based pay. But I kept it simpler

just because that just worked better for me. Well, it's easier. The problem with a complicated system like mine, which we're at the scale where we can do it is that it does take a long time to calculate this stuff and people need to understand the money that they're making. So what we did is we said last four weeks going over each call with them and explaining to them how they get paid. And it's pretty simple. Show up on time,

make sure street is not drive because that's going to send a guy from Anthem to Ahwatukee, which is an hour long drive if you make that mistake. That's right. It's not fair that the person that comes in at 5am can't make money. So we give them a shift differential. And then we make sure that you're smiling on the phone and you're like, Oh, absolutely, sir. So it sounds like a great call. But more importantly, the booking rate. Now they're incentivized to do the right thing. And I'll tell you, one thing I've learned about my technicians that increases closing ratios dramatically is you got to diagnose the person first and then you can diagnose

the problem. Amen, brother. Yep. So many people leave that out. And I told my guys, I don't ever want to hear that you got a customer. You made this huge sale. I told them even this morning on my morning mojo call, I want to hear that you got a customer. You made this huge sale. I told them, even this morning on my morning mojo call, I want to hear that seven things failed our 25-point inspection and the customer chose to fix the things that you failed right now. Because that way there's no sales involved.

It's simple. This is what didn't pass our inspection and here's why. Would you like to get this safe right now and fixed? And that way you're not hiring these fantastic, great salesmen. You can hire anybody off the street. And if they could go through our 25-point safety inspection and understand why parts failed, sales comes after that, right? Oh, Tommy, man, you're right on it. Because that's exactly right. Because a lot of guys don't want to sell. I'm not a salesman. I don't sell. You don't have to sell.

We always said, you don't have to sell. Just excel at serving the customer. So by providing that inspection and going through those kinds of things, you're just pointing out what's going on in the customer's home and allowing the customer to decide that's what's happening there. You're just notifying the customer what's happening and then they have to educate them a little bit about what that means. But you're allowing the customer to decide what kind of environment they want to live in. And that is service. And it sells itself.

You're so right. And it's so easy. We had one guy, it may sound a little coarse or a little shallow, but it's like shooting fish in a barrel. You don't have to sell. You don't need these pressure selling tactics. You just need to serve the customer. Well, you know, and I don't think sales is bad because I'll tell you what, every time I've met a girl or made a friend, I'm actually selling tactics. Just need to serve the customer. Well, you know, and I don't think sales is bad because I'll tell you what,

every time I've met a girl or made a friend, I'm actually selling myself. Oh, you're always selling. You're selling your kids. The kids are selling you. It's a sales world, man. Another thing, a little acronym like KISS. It's funny because some people say,

keep it simple, stupid. And other people say, keep it simple, Simon. But I always say rep build rapport educate the customer and then follow up because if you don't follow up that's how you lose sales and following up everybody leaves that one out though for some reason you know what i mean right well there's a nugget of gold that's what we say you know on potty talk live you know nugget of gold tommy you just dropped a huge nugget of gold there. And that's it right there. Rapport and follow-up. Sales and the follow-up. And that's service. True service is in the follow-up as well. And it's just the one thing that McDonald's has so great. And I talk about this in my book that

just came out is that their systems, that every kitchen set up the same way. They have a code you hit. It dispenses the soap and they know that each person hit the code eight times. And the problem with hiring sales stars is the day that the guy doesn't come into work, the day that guy quits, I just don't like the key guys. And of course we have better guys than others because they're better at building rapport and getting over objections,

but all that stuff can be trained. And we talk a lot about guys that can't get out of the seven-figure income and revenue. Why is that? What's stopping them? Because that's one of my questions I wanted to ask you. What came to mind when you first asked that, went right to it, is belief. It's just in my experience, and I'm talking about the guy, maybe I'm thinking about the one truck Chuck, you know, that's grown to two trucks and the three to get past into, you know, past that seven figure. I, in my experience, it's belief. It's just not believing that I'm not worth

it. That sounds a little silly, but there's lots of guys. I mean, it's just, that's a feeling. I'm not worth making a million dollars. Okay. Um, then we get into, I'm not capable. That's not who I am. I don't know how to do that. Those kinds of things. That's really where I think, you know, the foundation is the reason for that. Yeah. And you know, I was reading this book the other day. It's like the instant millionaire. And I don't want to talk good or bad about the book. I'm indifferent. I recommend a lot of books. I just, the one thing that he talked about is write down a number that you think is the absolute highest.

And I'm talking reach as hard as you could write it down. And then, you know, what I told my guys in my meeting yesterday is simply divide by 12, divide by four, then divide by five. That'll tell you what you need to bring in per day. Yeah. And if you're not at that day, you know, tomorrow you need to do a little bit better,

but it's not about, look, I'll sell a new opener when the customer doesn't even need an opener, because I'll say this, Richard, Richard, I noticed you seem like a guy. I noticed that nest when I walked in and I noticed you like to use your phone for different apps. I noticed a couple of things in the home and, uh, that we do have an opener. It's a lift master that you could actually close the door, open it from anywhere in the world as long as there's internet.

Is that something that you'd be interested in? And the fact is, I didn't lie to you or steal, did I? I gave you an option. Exactly. And people say all the time, there's certain people in my industry that think it's so bad. Look, if the spring's not broken, don't fix it. But let me ask you this.

This is a real question, Richard. How often do you use your garage door? I bet at least a dozen times a day. So 12 times a day. Let's just say you use it 300 times out of the year. Maybe not weekends or holidays. So use it 3,600 times. And I noticed, Richard, that you have a 10,000 cycle spring on your door. Now, what I do know about this, Richard, is here's why it's a 10,000 cycle. That just means up and down cycles is up and down, just like cars have mileage. Well, at 3,600 times, if the house is three years old, I'm roughly, you're 10,800. And I'm not saying it's going to break tomorrow because I'm not Nostradamus, but I am telling

you your cycle life's expired and it's going to break. The question is not if, it's when, and it's going to break. The question is not if it's when, and it's going to happen soon. I don't need to lie to you or your door is heavy and I'm not going to rewind an old spring, but so many people think, oh my gosh, you did something bad. You should have never sold that because it wasn't broken. And I'm sick of that mentality. And the plumbers, I'm sure are the epitome of that. Am I right? Oh, man. Yeah, it's an epidemic over in our industry. And that's part of our... I'll go back to it.

It is part of that belief. And that's why I kind of lean that way. It's that belief system that they aren't worth that, or they don't need that, or they wouldn't want that. That I can just fix that because they have the talent. And we talk about this all the time. I know how to fix my water heater. I can get that done in 15 minutes. And so I feel that's what it's worth. I believe that's what it's worth. Does that make sense?

100%. Your own self-beliefs. Ara's the CEO of Service Titan. I was on the phone with him and he told me, he said, Tommy, the funny thing is I. I was on the phone with him and he told me, he said, Tommy, the funny thing is, I had one of the air conditioning companies come out for my HVAC and Tommy, you know, I live in a nice house. It's a pretty big house. So he said, I knew the one I wanted. And I mentioned to the guy and he goes,

oh no, you don't want that, it's too expensive. One of the workers. So Ara called the CEO, the president or whatever, the owner up and said, dude, your guy, send another guy out here. I called the CEO, the president or whatever, the owner up and said, dude, your guy, send another guy out here. I want the one I want. And I know it's, but I want the features and benefits of it and I'm willing to spend the money.

And so many times, look, I'm not the type of guy to buy a lot of service agreements. I mean, if I go to Best Buy and they say, would you like that on this iPad or whatever? I'm like, nah, no. But just because I say no, it doesn't mean every customer says no. A lot'm like, nah. No. But just because I say no doesn't mean every customer

says no. A lot of people say yes. Exactly. And why is it my decision to decide that? Right. Exactly. It's a numbers game. It's that kind of a thing. Not every customer is a great example of using... I don't get all the best buy. I don't get the service agreements and all that. I'm not one that buys those kinds of things. I buy other kinds of things though. But I'm not the customer that's going to say yes, but at least was offered that. And I think that that's a key. You know, we get to that,

guys setting that up in their system. You know, a question back was about, you know, why aren't guys hitting seven figures? And that's one of the reasons, you know, they've set their business up to simply be a broke fix. That's the culture of the business. It's a broke fix. And you can't become a seven-figure plumbing business by simply being broke fix. It's an

extremely difficult thing to do. There's certainly no life here. It's not going to be profitable for you. No, you're absolutely right. And I do feel that, unfortunately, people are not charging enough to be able to afford advertising because they might have some sources like realtors. And there's certain things for real estate agents, home warranty companies. There's a lot of ones we get discounts to and we're very, very affordable. But the difference is most of the time they're just saying, make it work versus I'm going to live here for the next 15 years. Make it work for the next 15 years. And you know what? Let's talk about marketing for a minute because it's really difficult sometimes

for people to find new words. Like that's the opposite of my problem. I just, I need more. I think you probably hear it every day too is I need more workers, but you know, I got 120 guys and I got to tell you, I need about another 150

to keep up with the leads I could get. But how do people get more leads? What would you recommend? a one-man truck, the difference between a 25-man truck or 25 trucks? It's never been easier to get more leads, to get more customers call you. Today, if you're not getting leads, I mean, you're just not wanting to.

It is so easy today with the thing called Google. It is so, so easy. Back in the day, there used to be this thing called, they call it the yellow pages, that people would flip through and that's how they found their plumbers. It was expensive to be in there. I was paying 15,000 a month.

For a double truck? For a double truck, right. And you had to be in a double truck, okay? And so, because that's where the customers go. They turn to the double trucks. They don't flip back to And so, because that's where the customers go. They turn to the double trucks. They don't flip back to the other stuff, the majority of the customers. Okay. So you got to, you know how many toilet repairs you got to do for $15,000 a month? I mean, that's a lot of toilet repairs. Or doing TV, you know, I was doing $30,000 a month in TV,

$15,000 a month in radio. Okay. So to play that, it's an awfully expensive game, you know, to do that. So there is a barrier to entry. That being said, your customers pay for that, by the way. So your customers pay for your marketing. That's a concept that guys don't understand. Marketing costs, we're starting with guys. And just to do a decent Google AdWord campaign, you need to spend $1,500 to $2,000 a month. Well, just me. That's just to get started. Okay. But you work that into your price. Your customers pay for your marketing. Who do you think is paying for the commercials we see for Apple, the iPhone? We are. The customer, when we buy an iPhone, part of that price is we're paying for that marketing. Customers pay

for your marketing. Yeah. And if you're an aggressive, that's what causes your price to go up. You add up your widgets, you add up your hours, you add up your profit, and that's how you come up with the price and divide it by that. But the one thing that you mentioned that I guarantee you plumbers screw up, just like every other home service niche, and it took me a long time to realize this, is I make a salary each week, okay? But that doesn't count as the profit of the company. Right, exactly. So the company still needs to make a profit after I make my money. Right. Where most plumbers go, I'm making $120,000

a year, but they're still out doing the plumbing, and that's considered their profit. And then they go to sell their company, and they're like, yeah, hundred i'm making you know 120 000 a year i'm like i gotta pay another guy 80 grants you're actually only making 40 000 after it's all right if you're making anything so the people that are not listening just remember that you compensate yourself i need to replace you to handle your workload exactly over there is considered real profit so make sure you're adding profit into your pricing. Oh, exactly. You know, Tommy, you hit right on. In fact, when I work with my guys

and I have a calculator, it's called the honest hourly rate calculator. And one of the first line item is a salary and that's a salary you pay yourself. And the next line item is your plumber, okay? Well, that's, you're also the plumber. All right. But you got to pay yourself first because you're, you're the CEO of the company. And if I'm not paying for that, you know, if you're not doing that work, someone else,

I got to pay someone to do that work. Right. So it's that concept. You don't pay yourself out of the profits. Yeah. That's a hard concept. And I'm telling you, there's a gold nugget. There's another gold nugget for them. So give me some good marketing techniques that we don't really think of very often. There's Google, of course, pay-per-click organic. There's next door stuff. There's Yelp reviews. There's a lot. I'm in Valpec, Money Mailer, Clipper. I do everything. But tell me a little bit about some unorthodox methods that's worked for you. I think Facebook is a huge opportunity, of course. It's out there. But here's how the guys are doing. Certainly, the plumbers out there are posting pictures of the drain opening, of what they pulled out of the drain, or they're

showing proudly the pipework that they ran or the tankless water heater they installed. The consumer does not care at all about that kind of stuff. That's a waste of time. The opportunity with Facebook is setting yourself up as the expert or the guy in the community. They just see that this is the guy. They'll recognize you're the plumbing company, but you're doing a live at the local restaurant. You say, you lunch after. This is, I love this restaurant. This is Joe's restaurant.

And they got a great tenderloin here. Check it out. Come on in. And you even interview the owner of the restaurant, that kind of a thing. Doing those kinds of things and lifting your community up is a huge opportunity. And what that does, again, certain things that are credible, that aren't salesy, that are just like, look what we did for Mrs. Jones in this neighborhood. And it's educating and there's not this salesy aspect of it. And that's, you know, I just came out with my book and the truth of the matter is I want to build millionaires. I do. I want to make a lot of millionaires. And the truth is I send people my book.

I'm going to send you a copy of my book. I'll send you 10 copies, but. Hey, thank you, brother. Yeah. Yeah. I'll actually make sure that it's done. But the point is I never want to come off as this guy that's like, Hey, buy my book, buy my book, buy my book. It's like, I think you can get a piece out of this. The end goal is not for me. It's to coach people. And it's not even coaching. I've got, we built our first home service millionaire course that I'm like,

if I can't make you a hundred times more than the course costs, cause it's scalable and I want to help the masses, you know, like Joel Osteen, I'm not the Joel Osteen yet, but Joel Osteen, you know, he gets way more people online and on TV that watch him than actually that are in that huge church to make it scalable. But if you come from a point of sales, you're not really a good marketer. And that's why you send the before and afters to the local people there. Those before and afters are huge. They just, they help out a lot.

So I love the Facebook. I just haven't seen a lot of people make a ton of money on service through Facebook. Um, do you, do you recommend, you know, the paid ads on Facebook or organic or what's, what's the stuff that you recommend on that? Well, the paid ads, the only thing we recommend on paid ads is running the idea that you're always hiring. So that's a different avenue of going,

but you do that in a sense because also people, your consumers will be using you when I'm saying you're always hiring for plumbers, okay? But you word it in a way that also gives your company a good feel, a good emotion with the plumbing service consumer. So no, that whole thing with Facebook, again, it's not that you're trying to sell directly. Hey, we're running a special on this. That's a turnoff. What pays dividends is that they see that you were with to sell directly, hey, we're running a special on this, that's a turnoff. What pays dividends is that they see

that you were with Mrs. Jones and hey, we just installed this kitchen sink for Mrs. Jones. What did you think of your experience? And it allows, again, a third party, Mrs. Jones to say, oh, this was great. They were here, they were prompt, that kind of thing.

Let them brag and talk about those kinds of things. But no, it's a powerful tool and guys just aren't using it in the correct way at all and they're losing out. You know, one of the things too that my New Year's resolution is accountability and compliance. And I'll tell you, I was talking with my general manager,

one of my other, my service manager, and they both stated the obvious fact that we got all these reports. But the problem is, if I gotta go to 10 different sources to find out what's going on within my company, it's really hard to give verbal warnings. So I want the carrot and I want the stick, right? The both sides. But next year, going into this thing, we're building checks and balances on a daily basis to make sure the vans are washed, to make sure inventory is on, to make sure you call the manager before you left the job with a zero.

And the main thing is that when the cat's away, the mice will play, right? So if nobody's ever watching, I'm a big guy that I'm starting to become this guy that's just all about compliance and making sure the systems are incorporated. And there's somebody that's at least gas checking that maybe I'm not going to go out to every single job, but you better believe I'm going to go to two of them a month. And I want to make sure the wiring's right. Make sure you clean up after yourself, make sure there's no grease, but more importantly, arrange their pay structures this way so that you reward the right stuff and you

get the corrective action against the negative stuff. So what is your whole mentality? And I don't believe that people hate this about me that I say, people do what you expect, not what you expect. But the fact is that I just know that that's been true for me. So what do you feel? Generally people do the right thing, but I'll tell you what they do. What's called creative justification a lot of the time too. You know, this keypad came free and my mom needs one and And I drove extra for Tommy the other day anyway.

So it's really, I'm not stealing it. And I'm not saying that's not an instance that I've had, but I'm just making that inference. But what is your mentality against that? I'd love to hear your point of view. About being on top of all those things, making sure all those things are being done. Is that what you're asking there?

Yep. You know, trust but verify. Is that something you're going to go along with or not really? Yeah. My thing was, first of all, I i hired i was always looking to hire on character now i'm talking we're talking about plumbers okay and so i set the guys up with i believe and would expect them to do well that's one of the reason why i was a fan of peace rate because that has a kind of way of auditing itself we also you know we would have follow-up calls. So we called every service call after

and we had a checklist. Did we do this? Did we do that? Did we do this? You're happy with this? So we had a way of checking up with the guys and the guys knew that was happening. That was easy within our system.

The bottom line was I was all about freedom. I didn't want to babysit. If a guy stepped out of line, we moved guys on quickly too. I kind of mentioned earlier that I said we were always hiring. And that's one thing I always push is we're always hiring. So guys come in, there's always a low man on the totem pole. And it's not necessarily the amount of what he's selling. It's not necessarily a financial thing. It's on these things. Have we gotten some reports

that he didn't wear footies? Something like that. He hasn't kept the last couple of truck inspections in his cab. He has stuff up on the dash, okay? Which, you know, that kind of stuff. Well, we have a guy come in, he's low man on the totem pole, he's out. We replace him with another guy. So we always had a system running with that. That's how I looked at it.

And I get the KPIs and get in those kinds of things. You can become slave to your business in different ways. And I- Oh, it's the owner doing it. And I understand that because you can't run places at once. Right. And so that was the culture that I created

and was able to create. Did it run perfectly all the time like that? So I did have a trust and verified every so often, but the system we had in place verified as it went. Does that make sense? Yeah, no, it makes a lot of sense.

And it sounds like you did look at the trucks every now and then, probably not the same as I'm talking about. The IRS is the best example. I've never been audited, but the fact is that I make sure my stuff's correct because of the fact that people do get audited. And if you don't have those systems, just to look every now and then and know that there's going to be a punishment or a reward, because I like the carrot side of things, but you know, you talked a lot about gold nuggets, not a lot, but you mentioned, give me, give me some stuff that maybe you've had in the potty talk.

That was like just some gold nuggets that you think that maybe are unlooked at sometimes and just some really good things that you've noticed with your clients in the last, maybe a couple of months or looking back at this year, some breakthroughs. Well, I think, you know, thinking about breakthroughs, you know, the guys I talk to are the guys that in the truck, you know, working for someone else, you know, on Potty Talk Live. Potty Talk Live is meant to lift up the plumbing industry and plumbers. So I talk with on that, both the podcast and you can see it live on Facebook as well on the Million Dollar Plumber. And we do it three, four nights a week.

I'm talking with guys all over the world. They're either in the truck, working for someone else, or they've started their plumbing business themselves. And look, in the plumbing side of things, I think what's come out of this, and it's even made me more so I can sit here and I'm talking to your listeners. And if they're in the plumbing side of things, I think what's come out of this and it's even made me more, so I can sit here and I'm talking to your listeners and if they're in the plumbing side of things, that it is clear, we love all kinds of plumbing. Building's great, commercial's great,

doing the maintenance and insurance, you know, it can be great. But if you're a plumbing business owner, okay, you're in the plumbing field, if you're doing residential service,, okay, you're in the plumbing field. If you're doing residential service, you are sitting on a gold mine. And it's never been a better time to be in the plumbing industry.

Computers aren't gonna take away our jobs. Robots aren't gonna take away our jobs. You're still gonna need the plumber to go inside the house. And on the residential service side of things, and you're doing the residential service business, you are sitting on a goldmine. And I think it may not be a gold nugget in itself, but it's certainly a goldmine. And that's what's been clear in this past year. We started Potty Talk Live. It was February. It was Valentine's Day. It's 2018. And so we've had

over 100 episodes. I think we're about 120 episodes. And through that, again, talking with guys all over the world, both in the truck and out of the truck, residential service plumbing is a goldmine. Yeah. I want to add on one thing because I'm on Google Home Services. So when somebody orders a garage door opener or spring, they can say, they can request that it gets installed. Now, they're measuring a lot of things. First of all, they do a background check. Secondly, we got to be certain to check our insurance,

just like Google Guarantee Program. And then now they're capturing if we show up on time with a selfie of the tech. So my prediction is this, within the next three years, maybe up to five, is no longer will the certain things on your toilet, anything, plumbing, anything to do with your house, everybody's going to be going to institutions like Google, Facebook, Amazon to order it. And then what's going to happen is they're going to verify that you're a good company. So I'm simply going to say, Siri or Alexa or whatever, send me a good plumber from this time to this time.

And it's going to be like an Uber service where you go claim the job. It knows how good you are. And if you tell somebody they should do it on all five toilets, they're going to go, okay, I know exactly what I should pay for that. Because this is how much Amazon charges for it. That's what I'm willing to pay. And Amazon will take a piece of that. And I told my guys, they're going to want to know where you're at. It's going to tell, just like service time tells the customer when you arrive. And I do believe that the commoditization of most industries is coming and we got to be prepared for it. And jump on, head first.

Take advantage of these Amazon Home Services today. Today, right now, exactly. Get used to it. Get your guys used to it. Start doing background checks. It's going to change the game. And they're collecting... Artificial intelligence is just the sum of a lot of data and the probability that this will happen this way.

And that's all it is. So literally, they're carrying certain things. They know the probability of you showing up on time after they get thousands of records from you. So it's very, very important. There's a good book called The Raving Fans and creating amazing customer fans of your business. Because if not, I just feel that the rules are changing.

There's not going to be anything that has fake reviews anymore because they're verified and there's pictures and they know geographically you were there because my phone I'm looking at right now has a GPS in it. So they know you were there. I just think the game is changing and jump in head first and be prepared because if you don't, it's kind of like having a website. I know a lot of guys that say I don't have a website, but these days you kind of do, right?

Exactly. You got to be involved in those things. Amen, brother. I agree with you a hundred percent. And you know, if you're not Google verified, get Google verified. You don't, if you don't understand Google, understand Google it's happening. And so just to say that you're, you know, I don't understand or don't know how to play that game or don't know what it's about. You just can't afford to do that. Or sell fast because it's changing and it's getting really,

really every year that goes by is just another year that you're worth less and less. Amen. Yeah. Amen. Amen. But what is, uh, you know, the last thing I'd like to close with is two questions.

Number one is if you had to give me three books that you enjoy or, or audible books or whatever, what are three books that really stick out to you that some of the listeners want to read going into this new year? Oh boy. Good, good question there. But my go-to is what I'm reading right now,

and this is The Science of Getting Rich. Just as a weird title, okay? It's The Science of Getting Rich. It was written back in the early 1900s. It's the grandfather of all these kind of, you know, how to look at wealth and how successful people look at wealth and all those kinds of things.

It's an easy read, even though it's kind of that little English from the early 1900s, it's a little weird, but it's a simple read. I have mine marked up. I'm reading it again. In fact, I've got a mastermind group and we're reading it there,

head with plumbers, plumbing companies, that kind of thing. So I really recommend that and how you can create your own life, okay? A book that really affected me. And again, this is old stuff, but it affected me. And I'll still pull it out and read it is In Search of Excellence. And it's the idea of building a company with excellence. Okay. And how everything, how you look at everything in an excellent manner. And so those are two books that I've read recently here.

And I've read many times and then brought back. A book that I've read recently, and this is a sound just because I've just been intrigued by it. I've seen this guy online, Grant Cardone. I know you've heard of him, I'm sure, probably. He's pretty big out there. But I just read, and I'll admit, I just read his 10X book.

I just was intrigued by that. And I just was his 10x book I was intrigued by that and intrigued by the guy as I'm watching some of his stuff and of course he's put out some other books I just read his 10x 10x is great you know what it is about 10x that I love it causes you

think about 2019 and how you're going to do 10 times this year because what happens is extraordinary growth because you got to think of different ways. It's not going to be... I'm not going to 10 times. I mean, I spend hundreds of thousands of dollars a month on Google. There's so many things that I can't do more. So what can I do? There's 3 ways to make money. Get more customers, charge your customers more money, or keep them coming back for more. So my thing is now, I know I could be really big if I started selling storage solutions

because I'm already in the garage. So I don't need a light shooter still either. You reminded me of a book called Think and Grow Rich. It's a really old book and a great book. And there's a book that was written after that recently called Three Feet from Gold. I recommend it kind of goes along with that Napoleon Hill book. And then lastly, if we can leave the listeners with one good thought,

one thing we might've not touched upon, what would it be? I think I'll leave it with this, how I close out my potty talks, that you were purposefully and wonderfully created and you were created to do great things. So when you're out there doing your thing, as always, plumb like a champion. Nice. Well, I got to go potty here pretty soon.

I really appreciate you jumping on. What state are you in? Indiana. Indiana. Beautiful. Midwest. I love it. Oh man. I appreciate being on the program. It's been fun. I appreciate it, Tommy. Thanks, man. Hey guys, I really appreciate you tuning into the podcast. I wanted to let you know that my book is available right now on Amazon. It's called The Home Service Millionaire.

That's homeservicemillionaire.com. Just go to the website. It'll show you exactly where and how to buy the book. I poured two years of knowledge into this book and I had 12 contributors. Everybody from the COO at HomeAdvisor to the CEO of Valpak and of course, Ara, the CEO of Service Titan. It tells you how to have the right mindset and become a millionaire and think like a millionaire. It goes into exactly how to turn on lead generation. Have those phones ringing off

the hook for the customers that you want to be calling where you can make money and get great reviews. It also goes into simple things like how to attract A players. Listen, if you want a great apple pie, you need to buy good apples and you need to know where to buy those apples. And it also talks about simple things like knowing how to keep the score. You should have your financial check every week. You should know exactly what's coming in and out of your account. You should know when to cut advertising that's not working. And more than anything, you should know how to cut employees that aren't making it for you. Listen, you might have a big heart, but this book is going to show you how to make decisions built on numbers.

I hope you pick up the book, and I really appreciate everything. I hope you're having a great day. Tune in next week. Thank you.