The Home Service Expert Podcast - The Secrets Behind America’s Most Successful Roofing Franchise

Episode Date: June 23, 2023

Kevin Newton is the founder and CEO of Honest Abe Roofing, America’s largest and most successful roofing franchise that focuses on consultations, installations, and repairs. He recognized the importance of operating like a retail business, emphasizing advertising and customer service as key pillars for success. Kevin’s leadership and innovative mindset have shaped Honest Abe Roofing into a trailblazing force in the industry. In this episode, we talked about franchise models, business systems, management strategies…

and the right motives, the right person with the right motives, the right persistence, the right disciplines, and all those right things are measurable through the personality and their track record of what they've done in life. Think about when you get married to anybody, and we're getting married to franchisees as a franchise, or if you got married to a partner, you're not marrying them today. You're marrying them however long they've been alive. Maybe they're 30 years old and you're 34 and they're 30 or whatever. It's 64 years of history you bring to the table. And what's in that history?

So that's the things that I would have and going back and fixing, spending more time on the historical data of a prospect, doing a better job researching their track record, because most people, unfortunately, like a dog, they return to their vomit. So if you want to predict the future, you create it. It's really easy. You don't create it. Your habits do. So show me a person's habits and I can can take exactly how much is in their checking account. Every time.

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 my team to take the notes for you. Just text NOTES 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, go check it out. I'm going to 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 get into the interview. All right. Welcome back to the home service expert. You guys know me. I'm Tommy Mello. Today's going to be super fun. Very rarely. Last guy I got that owned a pretty large franchise was Kevin Wilson. He ended up selling to Neighborly, Mosquito Joe's, fantastic guy. Today, I've got Kevin Newton. He's at his private hangar. It looks like he's got his plane in the background. Kevin is an expert in customer service

management and sales training. He's based out of Indiana. He's the president and chief executive officer at Honest Abe Roofing. Kevin Newton is the founder and CEO at Honest Abe Roofing. Kevin Newton is the founder and CEO of Honest Abe Roofing, America's largest, most successful roofing franchise that focuses on consultations, installations, and repairs. Drawing inspiration from successful businesses and other industries, Kevin embarked on a mission to transform Honest Abe Roofing into more than just a roofing company. He recognized the importance of operating like a retail business, emphasizing advertising and customer service as key pillars for success. By adopting this mindset, Kevin was able to scale the company and expand its operations, allowing for the hiring of more employees. Kevin Newton's leadership and innovative mindset has shaped Honest Abe Roofing

into a trial-blazing force in the industry. Kevin, I really appreciate you making time to do this today. That's awesome. Thanks for having me. I flew in just for this, so thanks for your patience. Yeah, so listen, really appreciate this. Probably, since this is live, there might be some questions, but I just like to hear the story about yourself, what the story behind Honest to Abe and about you becoming a successful business leader. Oh my, that's like three questions in one. Which one do you want to break down the quickest

or the easiest for you? Me or the franchise or leadership? I think they kind of moved together i mean what's your story before you started it and then what was your goal and where are you guys at today well i'm 45 years of age i've been around the sun 45 times i'm only 46 strips so i'll be 46 in july and back in 1996 i was in high school graduating and i was in a building trades course here locally in indiana and i was somewhat intrigued with the we built the house actually in school all the students came together in the school system and there's three high schools here locally and all the kids would

come together on the first and last part of the school day. I guess we call it a three-hour course. So the last part of the day, you'd be at the trades, or the first part, you'd be at the trades. Anyway, so actually, the school system would build a house with kids, and they would sell the home at the end of the school year. A lot of times, the house is pre-sold and pre-planned, a lot of fun stuff. It's made a lot easier. But it was fascinating to see the process and shoot i was 17 i didn't know really anything about construction and so on and so forth but one day they brought in a union trade rep the carpenters union trade rep came in and spoke to us most of the class was all boys at the time and i think we had one lady in the class and he was kind of a rough fella.

You all are probably going to be the last group of kids that's going to be left in the building trades industry in the future. At the time, everybody was fearful about everybody to be working computers, technology. This was back in 96. And they were concerned about the pool of talent in the future to be able to let humans in America to be in the trades. That's an interesting opportunity to

me as a 17 year old kid i like the way that sounds because if it's not a lot of competition i mean who likes competition i don't like you like competition tommy i don't like competition i prefer to dominate i don't want to compete with nobody and i knew that when i was a kid and that's interesting so anyway long story short the next day 17 year old kid here well i guess being the terminology we use is entrepreneur. And I was always cutting grass, doing things of that nature around the neighborhood, knocking doors, and just trying to pick up an extra buck or two here or there. I thought this would be great. I could do this.

I just went through this class for a whole year. This is towards the end of the semester, my last year in high school. I can surely do this. And I put an ad in the newspaper. Basically, Jack, of all trades, And I put an ad in the newspaper. Basically, Jack, of all trades, master of nothing was kind of the deal. And of course, that was the advertisement for the most part. If you want to build, you build. I can build it. If you want to fix your dog door and your back door of your home, I can take care of that too, which I really couldn't do either one of those. But I definitely perhaps stretched the truth on that. That's how

it all started. I started right there in high school. I've never had a chance to be employed by anybody else. I've never filled out a job application. So I don't know what it's like, which is somewhat, this is a future conversation, perhaps later we can talk about. I'm not sure what it's like to be on somebody else's team or to understand the stresses and the burdens potentially as a team member on working for a different company. But that's how it all started. And for a decade, I I worked my butt off for 10 straight years. I was working so hard on a job. I'm sure everybody watching, yourself, Tommy, you know what it's like to work hard.

Most people, I would say, in this country do work hard. That was the biggest failure I had was working hard on the work. And I realized, man, I'm working so hard. I grew the business, don't get me wrong. It's a general construction business. I was, once again, jack working so hard. I grew the business. Don't get me wrong. It's a general construction business. I was, once again, jack of all trades. I was doing everything.

I mean, light commercial, light industrial, building homes. It was crazy. And you know what? It's like usually a successful business yourself. And think about all the trades you need, skill sets for each team member if you're running multiple disciplines inside the organization. I was doing HVAC, wiring, plumbing, drywall, foundations, concrete. If you name it, we were doing it. I had it all in the house. Finding people, first and foremost, was difficult. I kept remembering

what that carpenter rep said from the union back in the high school. He's so right. Anyway, at the end of that first 10 years of being a general contractor, I was about 26 years of age. And I was telling you, I was flat broke. I was miserable. I mean, it was here around me. It was this bad. I was working every hour you could on the job. And long story short, there's a lot more, too, if it was for the audience's point of view and for time's sake.

Let's get to where we're at today. So 10 years went by wore out exhausted broke perhaps that story sounds familiar and you're working hard i'm sure you had parents tell me that told you work hard and i saw a guy in florida earlier i came from and he was like man just gotta work hard i was like hey man yo the slaves worked hard they weren't successful like how do you measure success if i'm measuring it on ability to control my environment and do what I want to do when I want to do it, I'm not successful. Yeah, I'm working hard, but I'm not getting the fruits of what I was told from my parents. Work hard.

It's not working. So I had to refocus on the work. I had to start working harder on myself and becoming a better version of myself and improving myself. Until I did that, I couldn't become. If you want an extraordinary income, you have to become an extraordinary person. And I wasn't that. I was just a hard worker. If you knew me then, like that guy's a hard worker. But I wasn't working hard on the right thing. So finally, after a decade of that, I had a friend that switched his business model. We were speaking about pre-show and he was a plumber, general contractor plumber, little jack of all-all-trades plumber, doing new construction, doing rough-ins and all that stuff.

You know, bid work, bidding for it. So when you're bidding for work, you're most likely the lowest bidder, and that's highly profitable for sure, being the lowest bidder, which puts you in a position of trying not to lose. I'm not sure about you, but who wants to try not to lose all day? I'm trying to win. And when you're operating on bid and lowest bid and price wins and a lot of crap, you're in trouble. That's what I was doing for a decade. He finally told me, hey, listen to me. You got to stop it. Quit trying to do everything. Get singular. Focus on one thing. I have no idea what the one thing is, but you need to figure it out. I'm doing this now. I'm

a residential plumber. I've joined this franchise and it's going to be amazing well he just started and i'm like then you're so crazy that's never going to work you know i was the typical naysayer mr dream stealer taking all his dreams from him that you're nuts you how dare you leave the fold of misery and so i went with him to one of his meetings and i was like holy cow that's just so many lights went off or they didn't go off lights Lights were turned on. I was like, man, I'm doing it so wrong. So I went back and built a van. This was 2006. The plan is to start a business that was singularly focused in a residential space where Paul and Mary Lunchbox lives.

For I can serve them because that's the only place you can have marginal success, I feel, at a high level. And it got real singular. I was in a roofing space back in 2006 and 2007 i launched the concept of what we're doing today which took longer than i hoped i think lobs get stuck in trying to perfect things i kind of got perfectionist in me and i got off track a little bit so it took me a little longer and i wanted to start a company with the idea of franchising creating a vehicle that could take allow somebody who had certain attributes and skill sets but didn't know where to deploy them in, but they wanted something more in life. It's like this plane behind me, this Honda behind me.

There's a TBM back here. There's an old Warbird in this hangar. These are all different vehicles. They all do similar things. They have different missions. And what I was doing, the roofing space, as we all know, and Tommy, you know for sure, roofing and really all home service businesses today are highly fractured. I don't care which one it is. They're all pretty fractured.

There's no market leader. You took a survey of every American that owned a home that there wouldn't be a common name coming up. Maybe, but very few that I could think of across all the service brands. Anyway, so I got Singular. The idea of starting a company what's create a franchise system we did that took a little longer than i wanted to just because i was scared i'm not afraid to admit it i'm not sure it's going to work a lot of doubt there and it's all this legal stuff you have to do fdd's and sec and all those requirements and certain amounts of monies and

blah blah blah this is crazy serious. It's pretty crazy serious. And so I did it. 2018, we launched and sold our first franchise. And he's still up and going and highly successful. I mean, his first year, he did $3.6 million. He's up to four years into it. He's up to, I think he's going to clear, he's contracting $13 million this year in a single location.

So pretty cool to watch our vehicle help people become what they wanted to be and truly that's that's kind of the high level there tommy i apologize for moving fast and that's 15 17 or 20 what's that 20 plus years of history they're pretty like in 10 seconds or 10 minutes now it was great no it gives us a lot of context i'm just curious now going back to uh i mean i mean, I guess it was 2018, but you took 12 years to kind of design this platform if I'm right, 2016, 2018. So if you could go back and talk to yourself in 2017, before you launched, was there any things you would have done differently with the franchise model still be the way you got the FTC? You got the SEC? There's all kinds of things that could go wrong with the way you do things and pulling franchises away and legalities. Would you still do a franchise

and what else would you do differently? Yeah, that's a great question. I've had this conundrum mentally, internally in the past of would you do it again? And there's days I would say, no, I wouldn't franchise. But there's two reasons. We have to go back to the whys of why we do things. And money, for me, is not a driver. And money is a bad driver anyway. If anyone's trying to do something because of money, you're never going to get it. You're wasting your time. So let's go and quit. And money's not everywhere. So if you want it, just go get it. But if that's the goal, it's kind of a weak goal. The thing for me was developing a platform so other people could become what they wanted to do with their lives and give them the fuel, the rocket fuel.

It's like we all need gasoline for our cars. If you have a car that's on gasoline, this jet needs jet fuel. But I don't like jet fuel. You probably don't like gasoline. I don't dream about gasoline. I don't dream about gasoline. I don't dream about jet fuel, but I do dream about where it gets me. So cash is the same thing. I need money to get me where I want to go. So this is a vehicle, our franchise is a vehicle to do that. But that being said, that's one of the reasons, one of the whys I did it. The second reason why

I did it was to be able to scale rapidly without having to use my own cash flow or capital. As you know, if anybody here listening has greenfield locations, new locations and new territories that you have no penetration in, then my goodness, you know the financial burden that takes potentially. You can do it at different structures, different levels, don't get me wrong, but if you're going to go in greenfield location, new location, let's say we go to Coeur d'Alene, Idaho, and we're going to go green field on his A1 doors, and we're going to open a new location. If you have a certain structure in place on square footage, the number of trucks and humans and core peoples and all

these nuances that you know it takes to operate at the level you want to operate in that location, there's a certain amount of money it takes to do that day one and then to support it until it becomes cash flow positive. So taking that in consideration, it made a lot more sense in my financial state at that point in time to allow somebody else to take that burden on. I took the risk and the financial burden of doing all the things we spoke about in the background, the FDD, the SEC filings and registrations to all the states, all those nuances. But it's far less expensive doing that than it was to buy a hundred vehicles and then either doing leasing or you're going to lease them and lose the depreciation you're going to buy

them and gain the difference like figuring all this out and they're going to lease property buy property to a different young corporation restructuring all that so i figured how do we do what the bible says and the bible tells me that the borrower is slaves the lender i like the way that sounds if i'm going to be in that structure i'd rather be a lender and you'd be my slave you're thinking though but that's talking about money it is or is it it's also talking about anything you lend somebody i'm lending the system the procedures the skill set the knowledge the insights the track record and a ramping to get you to where you want to go right more rapidly you could do by yourself so i'm lending that out and of course that earns tax back or a payment or a royalty, we call it, the franchising.

So I used to get a small part of the action, or I could greenfield it and get a large part of the action. But truly, you're not getting a large part of the action. You may get a touch bigger, but not really. Just because you had – I could do $500 million in revenue and that's great and be in charge, have that cash flow to live out of or through, but truly that's working capital. It's great to have that. You can show that

for different opportunities if you want to lend or borrow against it, but that's a whole different story. Anyway, so yeah, so we live on the other side of the structure. We get paid for knowledge we provide people to create the structure and lifestyle they want for knowledge we provide people to create the structure and lifestyle they want using our platform. So we lend that out and they borrow it. They borrow it for seven years and they pay a royalty on that. And if they want to renew,

they can renew to end the seven years and keep moving. So it's worked out well. But to answer your question, going back, would I do it differently? Some things definitely would do a little different different but not when it comes mechanically to how we go to market because the technology wasn't there then you and i surely know of some technologies today that weren't available 10 years ago and it would be a fair situation to say not really fair or right situation because it wasn't there so we couldn't really utilize those things but definitely some choices on people and on franchisees and things of that nature. Definitely some legal decisions that were made

I would have done differently for sure. Don't be the guy who's responsible for all the financing. Don't be that guy. So that could cost you. If a franchisee goes sideways and they're riding on your coattails, that could be bad.

I wouldn't do that again. We're in that lesson. So definitely some lessons, but definitely I would franchise again. And we're excited about offering new brands in the future in the home service spaces and some other spaces also that we believe people are interested in. And they just need some help in the structure. And so many people have the talent and the skills, but they have some fear. And they just want somebody to come alongside them and help them through it and give them some instruction and book on how to get there.

And we're excited about that. And that's what we do here. So I look at a lot of franchises and I mean, I know a lot of them. Sure. And I don't think a lot of the people, I meet a lot of people. I speak at a lot of shows. We have a couple of shows ourselves. We've got a new one in November in Orlando called the freedom event.com. And I just, a lot of people go, I want to franchise my business. And I look at them and I go, how big are you? What percentage

bottom line are you making? And do you have the SOPs, the CRM, the chart of accounts, the hiring processes to scale? And I look at a lot of businesses and now that I'm in 36 markets, all ran on the CEO of it. I think I understand what the franchise model takes. You know, I had Michael Gerber on here who basically, he talks about every business being a franchise model, set up the systems and let the systems build the business. I think there's a lot of hard work that goes into it. I mean, you could probably tell us some of them because I'd love you to kind of explain to everybody listening who thinks they could possibly franchise what some of the hardships are. Number one, the legality. You're going to spend a half a million,

I think, on an attorney at least if you're going to do it right. Am I correct? Yeah. If you're going to do it right. You can spend a quarter million and do it wrong and then pay another 500. So now it's three quarters of a million. So it depends on when you want to spend it. So it's going to be less of a burden to do it early to find the right people for sure. And what else are you thinking about

if somebody's out there saying, I can franchise this? Yeah, sure. Michael's on point. His point's valid. It's every business is aises at the end of the day, because every business, if it truly is a business, is a repeatable process, which anybody should be able to walk in and follow the procedures. But in reality, that's not the case. That is the case in the mind of the owner, and it's all they are.

They're a prisoner inside their own prison. They're the warden and the prisoner in the prison that they own and you know those people i can never go on vacation there's no way i could leave here if i leave for the place we won't run blah blah blah but i'm gonna franchise it i'm like what you're gonna do what oh it's amazing that the ideas are great my marketing's on point i'm like okay. So what exactly are you franchising? I make cupcakes. I'm confused.

Like, what's the business model? Cupcakes. I'm like, okay, I got really good cupcakes. I'm sure you do. I'm sure they're amazing. But I don't understand the business model. Walk me through it. You sell cupcakes.

People love cupcakes. You do birthday parties. I get it. So what's your POS system like? What's that? That's your point of sales process. Walk me through that. How is it automated to what's your POS system like? What's that? That's your point of sales process. Walk me through that. How is it automated to the point to where I could hire a high schooler to run the company? There's no way that would work. You can't franchise yet. Oh, but my ideas

are on point. I'm sure they're on point, but you don't have the systems and procedures figured out. You know, for us, we're moving towards no humans left. There won't be any people left. There'll be the owners of territories and some back office people, but there won't be any in-home people ever. That's the model for us. I could be hurting people's feelings, but it's not 1990 anymore. It's ancient fractured market. I mean, it's embarrassing how people operate today. And they still operate the same way they were operating when I was in high school, doing estimates, going's embarrassing how people operate today. And they still operate the same

way they were operating when I was in high school, doing estimates, going to people's houses and stuff, like sitting down with Paul and Mary Lunchbox, trying to hard close them, sharpening them. I mean, if you want to sharpening my clothes, I can give you a lesson. I can close every deal, no problem, easy. Like, I'm your guy. And that's what we did for years. And we still do it. And it's still part of the process. But how many deals can you close today? I'm off the rabbit shell here, Tommy. Let me finish the point. Let me get back to your question. But how many deals today can you close? You've got 15,000 team members and 10,000 go to houses. You can only close if they go run, they do two calls a day, potentially could sell 20,000 opportunities. They sold all of them.

And what are the odds that's happening? The average close ratio of professional communicator in our country in the home improvement space is 10%. So it's not real good. Now, some companies have 30%, 40%, we've got 60%, whatever. But we're outliers. Your group's probably an outlier, too. You're just doing better. And by the way, you've got the right system, procedures, and plates.

You've got the right training. You've got support. But most companies don't have that. They don't focus on any of those things. And that's the biggest part of franchising. Back to your question, what does it take? and why do people think they can do it i think they have a novel idea that is a good idea like they got a good thing i got a good widget and sometimes the widget is franchisable but perhaps the person can't do it themselves but a true franchise and

that's michael gripper was saying to you in your audience the widget's not important to me like the widget like who cares of the widget you know this i'm sure perhaps you'd agree with me i don't know if you would or not but if you're running multiple disciplines in a similar vertical the process and systems are all pretty similar it's the widgets like it can be overhead doors or plumbing it doesn't really matter there's's humans, there's trucks, there's processes, systems, KPIs, there's CRMs, there's POSs. All this is very relative. And once you have a system in place that functions well, you should be able to navigate that from afar without being in the business every day. And that's a true thing that most entrepreneurs or one-openeurs are wanting

from a franchise system. They say things like this. I want more time. They come see me. I want more time in my life to do the things I want. Like, okay, you might as well have a kid. What? Yeah. You might as well have a kid because you're crazy. Like you can't start a business and have more time. It's like having a kid. You don't have a kid to have more time. That's stupid. So it takes a huge amount of time to run any kind of business. I don't care if you have system procedures and all the things in place or not. Like you said earlier, it's not

hard work. It takes a lot of discipline and persistence to operate successfully in any space, if you have systems or not. But definitely we see throughout the marketplace in any business, most franchise businesses, not most, truly all franchises in totality, operate at a higher success level of staying engaged in the marketplace longer than single-owned locations. I mean, 80% fail in the first year of personal businesses in this country, and the numbers are much stronger for franchise systems. So anyway, I see those people, and most of them are living on a pipe dream. It takes a huge amount of work. You do have to have the process assistance in place. And

Michael was correct once again, but most people don't have it documented. They can't train. If you can't take a simple person and your processes can't allow them to do what you can do, can you face it, Tommy? I bet you're, come on, man. You're probably highly skilled in all areas, more so than most people that you come across. You probably have very few friends that are true friends. And when you meet new people, you're guarded and you don't let them into your life because you value your time. Because you're not going to waste time with somebody that doesn't have the same outlook, core values, belief systems. And you're not going to sit around and small talk.

You want to talk about big things that change direction, increase success, or whatever you're trying to measure. And that's the challenge with people. You've got to get the system procedures in place. And most people can't do that when it comes to, I've got a franchise idea. Yeah, cool. What is it? And you start working through it with them. You can take ideas, or you can take an idea and help them to really turn it into process and systems. But the measurable for us, going back down the memory lane to really finish off your question, and I do apologize for bloviating, is we had to make it stupid simple, where, let's just face it, you and your listeners, I'm sure, we can only attract people to us that are just almost as good as we are. We're not going to attract people who are eons. It's pretty

extreme. There are levels above us in skill set and talent, communication level, insight. You may meet them and get to know them. And maybe probably for most of us, they become mentors. And then we may move up to that level and at some point we can work together. But in your current structure, we're only going to attract people almost as good as we are, a little bit below us. In the franchise world, if you're bringing in average people out of middle management, the owner franchise, that person as a leader is only going to attract people as good as them or a little bit less. So think about that as a system. We're not putting you as CEO, Tommy. We're putting Jim, who is managing a regional location from

walmart and had three territories under his belt and he's dealing with a lot of people but he was dealing with supplies and people not coming to work and all good stuff but different discipline can definitely be utilized but the focus of raising a child is a little bit different because what business is if you ask me so anyway you look at like chick-fil-a and i think they've done a really good job but these companies have been around a long time they didn't just come about two years ago but they get more applications for their franchise but it's almost like a lottery it's really hard to become a franchise owner there i think they do a great job painting the picture and showing them the life they're

going to live, but it's going to take hard work. My buddy Lance always says, dude, when you sell and we partner together, it doesn't mean you get to drop your kids off at school if that's not what you did before. You're going to bust your butt. This is going to be hard work. I tell people it takes five years to build a decent business, even if I give you all the formulas. You've got to show up. You've got to be involved in the community. You've got to work nights and weekends. You've got to give up some relationships that make it tough. Business is not easy, especially if you're growing.

But what do you think Chick-fil-A does so good? What do you think some of the biggest franchises? All your problems are within four walls at a restaurant. Whereas ours are everywhere. 100 miles away. So what do you think that a good franchise does well? That's a great question. Those, when they're inside your own walls like that,

definitely have more control. I'm sure like yourself, you dream of having an operation like that. We do. I mean, you have inside folks, administrative staff, you have technicians that could be 80 miles away from the home base or out in these mobile warehouses on wheels that could crash into a kid and kill them. So there's a lot of things going on across the country when you have technicians and vehicles and so on and so forth. I'm sure you've

experienced that. Hopefully not to death, but just crazy things happening. And when they're inside your own walls, you definitely have more control over that for sure. On that question about QSR, I'm not an expert in that space. So everything I would say would only be my personal opinion, which is probably not worth much when it comes to QSRs. What little I know about the Chick-fil-A model is hopefully if they're a list, they can email me at kevin at onsiteroofing.com and give me some hate mail.

That'd be fine. They're enslaving an owner to be a full-time employee who doesn't get reimbursed ethically. You're basically enslaving a human. You tell they get part of the action, but really they're getting $110,000 a year to run a $3.8 million operation. I pay my receptionist more than that.

So I don't understand that model. And maybe I'm wrong on the model. I don't study it. But from what I hear, I know a couple of those guys and they say they call themselves owners, but they don't own anything. They don't own their real estate. They don't own the building. So what exactly are they owning other than imprisonment and full-time slavery? That's just my personal opinion. I don't think it's a good model. I think it's a terrible model. I think it's a great model for corporate, for Chick my personal opinion i don't think it's a good model i think it's a terrible model i think it's a great model for corporate for chick-fil-a i think it's a terrible model for the individual personally now here's what i like about it if i think it's a great model for the right person who doesn't want the responsibility of doing all the things

you'd have to do in maybe a typical franchise or in your own business because you have the financial backing going into the deal with everything's fronted for you and paid for you're just committing to being a full-time overseer of all the processes i don't know the back end structures for that i apologize i'm sure i'm out of term if anyone's still with chick-fil-a i'm you're upset then you can email me we can talk about it but i am probably ignorant on it but from people i do know who own things here locally they love it they do love it but i'm like man really like that's to me it sounds like prison i don't really want to go to prison that's just me there's some qsrs though that are highly successful and i think the different models they're similar models to how you operate

our franchise it's you're in control of it you obviously have to follow system procedures and stay pay attention to the brain itself and keep the integrity of the system intact in the marketing standards and all these nuances but the chick-fil-a thing baffles me so i'll get off that point i don't want to offend anybody i i don't understand it so maybe you do tell me you can correct me i just don't quite get it it's like the stake the staking check is that way now. They advertise and become a franchisee for $10,000 and earn $100,000 a year. Make a $10,000 investment and you'll earn $100,000 a year.

That, okay. I mean, if that's all you want to earn, you think that's all you're worth is $100,000? Whatever. You know, that's not my decision. But to me, like $ grand well i think it may i look at mcdonald's on the other hand and i like their franchise because you go to the school and i've never met one franchise owner at mcdonald's usually they own one then they own two then they own three then they own four yes they got to be able to do the work because they

got to be able to understand what you go through but But I think the main goal, like you said, you've got one hundred and three territories. You've got nine major owners. Tell me. I'm curious if you could go back in time, how much more emphasis would you put on making sure you get the right owners versus just who's ever willing to pay the fee? Yeah, that's probably the best question anybody could ask in business in general and really every walk of life that you're a part of throughout, first of all, starting relationships. How about the right friends? How about not good friends, the right friends? Because good is not right. And then how about the right marriage with the right person and then the right business team members. And then the right franchisees.

Good franchisees are good, but good, once again, is not right. And when you want right, you don't want good. The good's not good. Right. You want right. And right has to be based upon measurable, based on desired outcome, based on target that we're all shooting for. So once you have distinguished what right looks like. So to answer your question, for us, we were, and for me, this is my fault.

It's not really a fault. It's just like you don't know what right is out of the gate. I would tell you right was me, but I'm not a franchisee. And I wouldn't make a good franchisee. I'm not. I'm not a franchisee. I'm a franchisor. I wouldn't be a good franchisee. The right franchisee has a target mind revenue generation-wise.

It's maybe not grandiose. It's just it could be $110,000 a year, but most of my people all want seven-plus figures of net money after taxes, which is more like it. And the right motives. The right person with the right motives, The right person with the right motives. The right persistence. The right disciplines. And all those right things are measurable through the personality and their track record of what they've done in life. Think about when you get married to anybody. And we're getting married to franchisees as a franchise.

Or if you got married to a partner, you're not marrying them today. You're marrying their however long they've been alive. Maybe they're 30 years old and you're 34 and they're 30 or whatever. It's 64 years of history you bring to the table. And what's in that history? So that's the things that I would have going back. You asked earlier, like, what would you change? Having a better now knowing and going back and fixing, spending more time on the historical data of a prospect, doing a better job researching their track record. Because most people, unfortunately, like a dog, they return to their vomit.

So if you want to predict the future, you create it. It's really easy. You don't create it. Your habits do. So show me a person's habits now i can take exactly how much is their checking account every time so that's the thing today if i could try to dissect and understand what person's habits are in an interview so take some time i would spend more time going backwards on getting to know people in a way in which we could see more

their habits to ensure that they'd have a better future because we create our own futures, but we do that through our habits. So that leads to an insight, I would say, on that topic. Yeah, I would say that I do a better job recruiting than I do hiring, meaning that I pull people from another job and I teach them a skill. They've already got their mindset. They've already got the right habits. They've already know how to smile, eye contact. They enjoy life. They might not do a perfect morning routine, but they're hard work and they enjoy what they do. They don't hate Mondays. And you get that right person on a, but i've had plenty of bartenders bus boys amazon

people people at hotels i like finding people in the hospitality industry that just they're sincere they might guy contact you take those people and you put them into a career and i do think a franchisee is more of a career than an ownership but what's great about it if you do it right there's a lot of hard work but you're taking a proven track record. You don't have to go and start from, okay, for example, Chick-fil-A, they've got their menu. They got exactly what it needs to look like. If you were to go do this greenfield, like you said, it's really, really hard to make a lot of money your first few years, unless you've got a lot of money to invest and you've done it before. But if you're going to go out there and make all the mistakes that I made my first decade,

that's why I have this podcast. I tell people, listen, all my mistakes I'm sharing with you, it's not because I'm good or bad. It's because I've made these mistakes. I don't want you to make the same ones. Pick a great CRM, get the right trucks with the right wraps and make it a standard truck. I learned a lot of this stuff from Al Levy, but I think that a lot of it goes into just like we've hired a lot of people. If I was going to do a franchise, I'd make sure you understand the good, bad, and the ugly. You understand what this is expected.

This doesn't mean it's a nine to five Monday, Tuesday, Wednesday, and you're going to take four day weekends every week. And it's front loaded. It's a lot of hard work. And I do think a franchisor should really help with the hiring process and the training. We've got our own training school. We recruit 20, 30, sometimes 50 people a month. And you got to go through, as a technician, two months of training before you're even allowed to step foot in a garage. And we give you your tools, your vehicle. You've got a market acceleration trainer. You've got all these resources. You've got manuals. You've got video training. More importantly, you've got

on-the-job training. You're riding along with some of the best in the industry. And you're seeing it. You're understanding what personality you adapt to the most because not every person is the same. Some people are a little more introvert. Some people are really talkative. We teach them disc assessments. We go through a lot, a lot of training. And one of the things I had a buddy of mine, actually the CEO of Nextar, he came in and he said, your hardest part about your growth is going to be developing leaders. Because leaders, just because you're good at sales doesn't mean they're going to be

a good manager. And I'm sure you know that. That's a big mistake. People take their best salesman and say, manage these people. But yeah, I think you're dead on with just, you got to be able to, I don't know how you do it. The hardest part is don't hire somebody that's broke, especially for a franchise. Say, hey, I don't have any money. I don't own a house.

I don't have really a whole lot of obligations. I know that sounds really bad, but if they barely got enough money to get into the franchise, what habits have led them to that? Right, that's the lesson. That's the lesson for, I would say, every franchisor,

really every business owner has to understand. I talk to a lot of P&E groups every week, and they're always asking these questions because all i care about what's it look like in 16 months where can we rampage what's a waterfall event blah blah blah blah yeah cool great i don't care i don't know here's what i know you're you're all wrong you know i know what you're focusing in the wrong spot i get it though i understand the model but you don't understand the concept so but your point is valid and that goes back to high school and we spoke with that union rep that came in there's not

going to be trade people in the future and you nailed it you've got your own university you have your own curriculum you're doing the work yourself because society can't produce your people that you need to run your company successfully you've got to take responsibility to do that. Very few people are disciplined enough to develop teachers, leaders, people who are motivated and inspire the right people. There's no sense hiring a fool and training them. You just have a highly trained fool or a highly motivated fool. You've got to have the right people. I don't care what business you're in.

If it's a franchise, if you're selling cheeseburgers, the right people do the right things at the right time for the right purposes. And that's the lesson that everybody has to hear and focus on in any business, no matter where you're at. If you're a single operator, there's 20, what, 26 million businesses in the U.S.? 23.5 million of them have one team member, the owner. So if that's the case and you're getting ready to scale to two people, get the right person. Don't make the mistake, no matter what level you're at, of getting another person in there just because you want some burden off your shoulders. It may

cause you more grief hiring the wrong person. It could be a good person, but good's not right. But you have to ensure yourself and know exactly what the right person looks like. And Tommy, you've done that. You've got the system, you have the procedures, you've got the training. So if someone's listening, they want a job, they should want to come work for a person like you because you can make them more than they are today. To have more than you have now, you've got to become more. And hiring a company like yours or other groups that can do that, make those people more valuable for our society, for our country. And really, that's the only thing we can do for our country. The biggest service that we can do as owners of businesses and operators

is increase and make our people better. You got to develop people. You got to develop people. I mean, I look at it and I look down my hallway at a lot of executives and I'm hiring my third assistant, so I have three. And one of the things I've noticed is people say they'll outwork me. And I get a lot of people, a lot of the best-selling authors, everybody on stage says, I work hard. And I say, well, I'll outdelegate you. And that's why I work so well with people to help me because, first of all, I recognize my weaknesses.

And I'm very good at the delegation. I've been really working hard at it and giving people the right expectations. I cannot go to my assistant, go book me a ticket to Michigan. That wouldn't be fair because she might book a Southwest flight with three stops and don't put my TSA number in, you know? So I need to be very specific on my expectations and go through this and delegate properly. And I look and a lot of people can't hire an assistant. And if you can't even hire a really good executive assistant to start out and learn how to delegate, learn how to give SOPs, build a manual for success. Someone was in here. We did a big shop tour today with about 15 guys. And he goes,

how do you pay? He goes, I'm in California. And he goes, how do you pay? He goes, I'm in California. He goes, how do you pay? They had a, uh, an HVAC company. And he said, if you pay for hours, so that's how we pay. We pay billable hour to our installers. He said, how's that possible? If they have 70 hours and they finish in 30, I go, well, my price book is set up on bill. How do you price if your price book is not set up on hours? This is how long this job should take, just like a mechanic. This, on average, for a pretty good tech, a 7 out of 10, this will take 3 1⁄2 hours. If it takes him 2, he still gets 3 1⁄2. It takes him 4.

Now, that is more than time and a half. Everything I do is paying, the average person here is $85,000. So you're going to make, we don't have anybody even close to minimum or hourly rates. But I said, your price book is built on, he goes, well, what if they're running like electric? And I go, well, you're billing for that. So you're charging the customer for that. So you can pay for that. Well, how else do you build a system that's got a predictable outcome? If you don't have your price book set up for billable hours, and there's a lot of different ways to get here. You know, you're measuring in squares.

There's a million ways to get here. But I just, I think the best franchise model, which is a great business, should have expected outcomes. And unless you're working really hard on your performance pay, pay structures that match the price book that have a scorecard, and you're putting the time, effort, and energy into those, and you're constantly training, and everybody knows where they sit at every day, every minute, they've got access to that data. And they can look at themselves versus the mean. I want to know who I could call to have a higher conversion rate.

I want to understand a higher average ticket. I want to understand who could sell better service agreements. I want to understand the best market in the company and who I should be talking to because my secret sauce is going and visiting the best of the best. I find companies that do better than me in a different industry. I go, I call it R&D, rip off and duplicate and apply it to garage stores. Why not go to the smartest, most successful, But I don't go to $10 billion. My next step is I go to a billion-dollar company because that's where I'm going for. But I know I can't go from $10 million to $10 billion because there's no way to get there. I just can't see the future.

It was a good one, though. Your most successful franchise owner, you said you got the one doing $14 million. What are his attributes to make this successful? Well, you read in the intro some bullet points there, which are definitely factual. But our process today in the franchise system is heavily weighed on marketing and sales conversions. He came to the franchise with a background of in-home sales communication skills. He understood the processes and he had the core competencies to train and lead sales teams. And that's a very important part of any business, especially starting out. You've got to move, you got to take your leads and convert them especially starting out. You've got to move, you've got to take your leads and convert them to opportunities. And then you've got to take those opportunities

and convert them to revenue generating agreements. And he had that skill set. So that's the core competency that he had and came in with. And he functions really well in that space. Now, some interesting things there are the things that you made note to is now he has to keep pouring into himself. That way he can pour out into other people in new areas that he has to turn into an actual leader and learn how to delegate and trust people to do the things which he's been doing in order to continue to scale and grow new territories. He purchased two new territories throughout the Kentucky region. In order to replicate himself and his people he has to trust the process the systems that we have he also has to trust the

people to do it if anyone here has kids you may know what that's like to let him go to school for the first time or to go to high school for the first time or go to college for the first time or to get married and leave the house or whatever That first time they leave, you're truly just thinking, have I done my job developing this person to be able to go out into the world and hunt and prepare the food for themselves? And I think every business owner goes through that. That's why I see owning a business is like having a child. You go through all the stages. If I had a kid, you would know exactly the stages I'm referring to. And a business is just like that. You mentioned earlier, a business in the beginning is a lot of work. And so is an

infant. They're always crying and pooping and peeing. And they always need something. Mommy, mommy. And most of that is crying. And business is the same way. And it's just like seasons. We're surrounded by four seasons. And a business has four seasons. Your life has four seasons. And once you understand the seasons, you definitely start to navigate. And I believe I have a better understanding of your business and how the business should operate. I like your point on delegating. And when a person has a core competency or a strength in a certain area, they have such a hard time giving it up. I've noticed that in the franchises. We have strong production people and we have strong salespeople and who are owners and strong

administrative financial people who are really good at finances they try to save themselves the success you're just trying not to lose in that scenario like you're going to try to win you got to quit trying to save seven cents like let the staff accountant worry about savings you need to worry about the top line and the bottom line but let the staff accounting or the accounts worry about the middle lines that stuff's not important like it doesn't produce that profitability i know everybody's gonna argue with you it does it doesn't without top line the bottom lines the middle lines don't matter you gotta have top line first you gotta focus on that it's the first line you gotta look at but back to the delegating that's a great topic that you could probably have if not sure you have to show the future on

what that looks like to be able to become a different version of yourself, improve yourself. That way you can keep pouring into people and scaling your business. You should always be trying to get out of your current job. If you're an owner of a business or in the franchise system, it doesn't matter. If I'm currently doing, I'm the owner and I'm running sales meetings. You need to get out of sales meeting role and hire a sales manager as soon as possible. You said it earlier, good salespeople don't make good sales managers. No,. You said it earlier, good salespeople don't make good sales managers. No, they don't. No, good salespeople make good salespeople. Keep them selling and find a good coach who loves coaching Little League or something and let them coach

good salespeople because they're good at teaching and caressing and patting people on the back and tell you're doing a great job. Keep it up. You're going to knock it out today. You need people like that to coach great salespeople. Great salespeople don't make good sales leaders. That's for sure. I'm sure everybody who has some strong salespeople know they're all divas, and they're very great and gifted at what they do, and they need to keep doing that. And most of them don't want to lead because they love being the center of attention. Anyway, delegation is a great topic. I love it. And it's one that's probably the most underestimated and undervalued in all business because people are scared to grow. They don't know how. At the end I haven't, I don't know, don't get angry at me, but I haven't been at work all year.

I don't go to an office ever. I still run my business just like everybody else. Why would I need to go to a location? What value, I devalue my team members who have been deployed. Like, we don't employ anybody here. We deploy people to accomplish the mission like soldiers. I don't see the general Sherman on the field. That's not his core competency.

And we can get your owners or owners of businesses. They get that adopt that mindset of delegation, but also transitioning out of what they do daily, which is tough because we're all habit-formed humans. We're stubborn. It's hard for us to change our habits. So anyway, I digress, but that's a great topic, Tommy. I mean, you can go for hours and create a whole show on that one. Well, the problem I have, I'll just tell you this. I was speaking with a buddy the other day, and it's the same thing with employees or owners or managers, but specifically small business

owners is they come into this thing saying, listen, we're trying to build a life for our family. That's their core thing, right? That's their why, is for their wife, their kids, their parents, whatever it might be. They want to be able to do what they want when they want with who they want. And the first thing they do is they go out and they make a hundred grand. They're working their tail off. And then they hire a few good employees and now they're making 200 grand, but their lifestyle's moving along with it. All of a sudden they moved to a nicer neighborhood. They got to buy that new SUV. And Hey, listen, I want a Harley. And plus I want to play. I want to be at my kid's soccer games

and I wanted to go to the best soccer training. You know, you got all these things in now of a sudden you're making 300 grand, but you can't afford to hire that great person because you want a great person that's hungry like you that wants to make money. But he just says, I want to be an entrepreneur. She says, and you're going, I can't pay you that because now you're going to ruin my lifestyle. So they become a prison to their own business. Yeah. Yeah. And it happens all the time. I see this all the time where they're like, man, but we're going on that vacation. If I hire this person, I'm barely going to make payroll. And it is a true obstacle to try to have delayed gratification and not buy all those things and say, I'm going to pay it back to the source that's paying me because I'm going to 5X this business.

And then I could make whatever I want and just living a little bit below your means. And it's so hard for people because they're like, well, we deserve this. We took all the chances. We worked hard for three years. We deserve this house. We deserve those vacations. But now I kind of flip it. When I wrote my new book, Elevate, I'm like, you deserve your people to win first.

Your dream has got to be so big that everybody else's dream could happen within yours. And if you're set up correctly, you can win. And I just, it's so hard for people to understand that concept because they go, well, they didn't put anything on the line, but now people have, they have options. What makes me want to work for you? And I don't think it's necessarily the money. I think a lot of it is, do I feel appreciated? And, you know, there's, I interviewed a guy that wrote the five languages of the workplace and how people want to be felt and how they want to be just recognized. And I think everybody's a little bit differently. Some people don't want to be at the front of the room. Some people want to be, some people like trophies, some people like hugs. Some people just want to, for me, a lot of

people want me to be their dad in a lot of ways. They want to say, good job. They want to say, listen, you know, blue collar, we didn't have, not all of us had the greatest upbringing and we're looking for support. We're looking for a family. And I think it's important for me to show up as much as possible and congratulate people and just see them and just be seen.

But I digress off of that. I'm just curious, you know, we can finish up. I just got a few more questions. Franchise or owning franchises. A lot of times you hear that that's the franchisors locations. What are your thoughts on that? I'm confused when they don't have a operating location of at least one. I know some brands in the space, in home improvement space, that don't have any locations and didn't have any. And they've sold locations.

It's like, wow, that's a little confusing to me. Like, what was the test model like? There wasn't one. You sold that to somebody? Yeah. Dude, congratulations. How's that working? What's the measurable? I don't know.

Good question. What's your measurable? They're paying us royalties. Okay. I guess that's it then. That's confusing to me. Now, some start and have locations. Obviously, they sell the P&E and they don't have any more locations. They just become a franchisor. And that makes sense. But we hold locations for petri dishes to ensure we continue to sharpen the skill sets, number one, and we can test the opportunities that we come up with. You know, people call things problems in America. And another language is that word doesn't exist, the word problem. The word problem means a math equation in reality, which means it has an outcome. And, you know, I hear people saying all the time, like, they don't have any money and they think it's a problem. Like, not having money is not a problem. Like, what are you talking about? That's an outcome of you not doing anything.

So fix the problem. Not having money is not a problem. That's you not doing anything. So become productive, become valuable, and money will be attracted to you. You're chasing money, you'll never have any. You have no value. You bring no value to the marketplace. So what value will you ever receive from somebody? None, because you don't give anything. If you don't give, you keep the seed. So we give to our franchisees through developing processes and improving systems daily in our locations to ensure they have the best outcome.

That way, they don't have to call and complain or have issues or we should do this or that. Like, yeah, we're on that. We got that. Here it is. We're working on that. That's in beta. So on and so forth.

So I think for me personally, just my personal opinion, of course, and all this is that we've shared today, is I believe it's really important. If I was a franchisee, I'd want a franchisor to be operating something that I know they're improving the system for my benefit, not me being a lab rat and watching me fail and, oh, let's fix that. That's problematic, I feel, in business if the franchisees are the ones fixing the problems are coming up with the problems and then financially having to pay for the problem.

And then, oh, my goodness, let's put a system together for that challenge. That doesn't seem right. So I'm not saying it still can't happen. It can still happen. problem. And then like, oh my goodness, let's put a system together for that challenge. That's not, doesn't seem right. So I'm not saying I still can't happen. It can still happen. Well, I think what you're saying is there are mistakes even within our 36 markets and the people that come forward and you reward mistakes in a certain way to say, thank you for realizing that that wasn't on our checklist. So we're going to give you a thousand bucks. And I mean, literally at the end of the day, it's never perfect. I'm not perfect.

We're not perfect. It's a living, moving organism, this business. But rewarding, it's one of the things I've learned in the lean process is finding, who knew the assembly line better than Henry Ford? Probably the workers. I'm sure one day a guy said, listen, I'm doing the

wheel and the bearings and the rotors. I don't know what a Model T had back then, but he said, I could probably go triple the speed if I only was doing the rotors. And hopefully Henry said, okay, listen, we're going to get a specialist in this role. And, you know, first it probably started out as three people on the assembly line. Then it went to seven, then it went into 12, then it went to a hundred. And I think that the assembly line. Then it went to seven. Then it went to 12. Then it went to 100. And I think that that's important. Now it's more robotics. But yeah, no, listen, this is really, really great information.

And you're one of the few people I've had that own a franchise. I'm glad it's doing well. You made a comment earlier that I just wanted to come back on. You said there's some that you're going to do within the home service space and some out of it i'm just curious is there something you like or don't like about a home service franchise or you because you said both right and maybe there's advantages uh yeah so i'm sure you get the question to ask to yourself quite a bit about your businesses do you guys do new construction?

Do you do commercial? All that stuff. And the answer for us is no to both. Anything that you have to be potentially thrown into a pool of bidding and the outcome is to be the lowest common denominator obviously becomes very difficult to operate marginally successful, I feel, in a way in which we want to operate. I want to control, like my whole existence operates in a foundational belief of

I control my dominion, my environment, it's up to me. And I'm going to work at a 55 gross margin at a minimum of 19 net money after taxes and if i can't do that i'm i'm not going to do it and if the franchisees can't enjoy that i'm not like we're we're not going like it's not a good system so i love the home improvement space today because of paula mary lunchbox there's eight needs every human has you were touching about you know you're talking about the five love languages or the work languages of team members or whatever and but truly there's eight basic needs that every

human has to have met in their lives if you that's like people talk about love love is important but love is not doesn't keep a relationship together one way relationship stays together in any type of relationship franchisee franchise or team member, husband, is by the other party meeting each other's needs. And as soon as that quits happening, the relationship falters. It starts eroding. And we start looking for somebody else to fulfill those needs elsewhere. So today, the homeowners, I don't know. I don't know all your numbers or what you do exactly in every space. For that, I do apologize. But if you have a business in a home improvement space today of any kind, it doesn't matter, and your average ticket was north of $5,000, and they have a problem when they called you.

Ring, ring, ring. Hello, home improvement people. Awesome. I have a problem. Great. We can fix problems. You come out. You fix their problem.

You tell them today's problem. The solution to today's problem is $5,000. They're like, uh-oh. I solved the problem. I gave them the solution, and that's what they want. But my solution, their problem, causes a new problem. They don't have $5,000. So that comes into unsecured financing. And I'm telling you, folks, if you're operating unsecured financing like 90% of us do, it's going to go away real soon. And it's going to be a real problem for our home improvement sector. This is why you see the P&E firms buying up the retro companies, because they operate out of the only money that's going to be left in this country. And that's going to be the insurance proceeds from storms or fires or floods.

It's guaranteed revenue because they're forced to pay for it legally through having homeless insurance. So they're forced to pay for it legally through having homeowner's insurance so they're forced to pay into something legally and then they know that's going to guarantee revenue back to the p and e firms through those only proceeds left in the marketplace in the next 60 months there will be no more unsecured money they'll be it'll be there but it won't be unsecured and when that changes i mean you're already seeing it happening if you pay if you're in that space i'm in that space i do do hard money lending, so we know the space. And it's going to be interesting.

So when I say I like it today because we have the ability to do unsecured notes, and when that goes away, how will Paul and Mary Lunchbox pay for the $37,000 average ticket I have for their roof? How are they going to pay for that? The average income in this country is 60 what 64 000 households average income for all the country 64 000 how they gonna pay for a 37 000 roof they're gonna well the only way that i know is there's programs in a lot of states so when you're adding energy because right now the whole country's on a huge energy kick is when you're able to take an

equity line now if you have no equity and plus the rates are going up so the equity loan can you afford the payments if you don't have the equity ratios it is kind of a conundrum um but this is how big companies are going to get bigger because if they've got the flex and the funds to be able to loan and put liens on the houses and i don't know how long we've got but you see some things the fed has come out and said there's it's going to be a pretty weary road ahead of us but they think there's certain ideas and things that will prevail. But you're right that this is a question that I can't answer. I'm not in charge of how much money we print and getting control of inflation and making sure that middle class still stays prevalent. So we don't. But you're going to see it widening. You're going to see the rich get richer and you're going to see the poor

get poorer, unfortunately. But, you know, my brother-in-law's in india right now and he's seen like 10 kids in a van and they're singing and they're having their best life ever and they don't take a lot to keep happy totally no and so happiness is not how much money you have i just no but it's gonna be you're gonna be unhappy when you can't pay for your roof or your, your heating system's not working in Colorado Springs and you can't buy one. I'll tell you what you can afford. You can afford a small home roof. I don't know what's going to happen to some of these houses, but I guarantee you black rock and blackstone will be there to buy them all up

and rent back to you. Yeah. Yeah. So that's a whole different. So we know you, obviously, you surely pay attention to it as well. 60% of the homes in the country today are owned by a corporation. 60% of your homeowners are the homes that you would service are owned by a major corporation. Which tells me only 40% of the market are owner-occupied. That's the problem. So the markets get smaller every day of owner-occupied homes that buy services

from my company. So our model is Paul and Mary Lunchbox, who owns their home, has a blue-collar job, earns $64,000 a year, and wants to make a payment for 220 months on a roof 240 months so that's what we do 99 bucks a month sign here have a great day thanks for having us and that's the same model for if i was doing overhead doors same model five dollars a day keeps the garage doorway or whatever i don't know it doesn't matter but just it's all going to be what can they afford out of their free cash flow and when that dries up and the credit markets dry up there's going to be a huge problem the home improvement space and the p and e firms are going to be stuck holding a lot of junk you're like crap but whatever and so if you got p and e firm calling you right now i go and please sell your businesses because get out while you can

you won't be able to in a few years there'll be no market left but i just it's all cyclical though it's all going to come back. Everything does. Everything has a season to it. There's good times and bad times. There's okay times. Either going into a problem or coming out of one. Or you're in one.

That's how life goes. And it'll come back, but the question is how long do you want to be in it? I don't know. We've seen this before. This is not the first resetting of things. And I'm sure, Tommy, you went through it and your listeners have been through it. You went through the recession, went through COVID and whatever that's all about. It all puts strain on businesses.

And you have to be able to keep persisting because you have a goal in mind that you want to get to. Because the purpose never changes. How you get there may change, but the purpose, destination never changes for us and for you. But we have to be flexible enough to be able to change the changes. And changes come in in the financial markets. And the changes definitely happen in technology and how people interact with businesses and how we need to interact. We keep trying to teach people how to buy phones. We're not listening to how people want us, how we should be selling to them.

We're trying to force them to buy the way we want them to buy. And it's ridiculous. I mean, I see so many companies sitting down at the table for two or three hours doing long, harsh, sharp closes and pitches for two hours. All decision makers present. It's just laughable. I think it's hilarious. Isn't that so cool? It took you two hours to sell one job. If you're lucky, 10% of the time, I sold 110 minutes with AI.

So it's all going to change quickly within the next 36 months. And then whoever has the funding pool to go fund Paul and Mary will win the day. And then the third part of that will be who owns the labor pool. And no one's paying attention to that, but that's all we focus on is the labor pool. We're gobbling up the labor. And if I own the labor, then I own the space. So that's what we're looking at is who's going to do it, who's going to do to labor and if i own the labor then i own space so that's what we're looking at is who's going to do it who's going to do the work and when i own the workers it doesn't really

matter anymore not as a strong word saying owning but when i have all the opportunities for them to come do the work and people become very loyal to that i'm sure you see that as well your people are low because you reimburse them properly where else do do they want to go? If I can earn $85,000 a year working with your company, helping people solve overhead door problems, that's a pretty good living, I'm sure, in that space. I don't know, but it sounds like a pretty good living.

Do you want to talk a little bit about selling estimates with AI? I just got a request. Yeah, sure. Yeah, so I have our whole development team. So I don't service tighten that stuff. We own the CRM.

We own the company. We own the, we own all, I do all in-house. So we have, I have our own developers. We've been developing that for over 60 months. I mean, we saw the writing on the wall 10 years ago and we started 10 years ago it's just machine learning wasn't there at least for me to it was there it wasn't available to the market so it took us about 150 000 roofs to get the machine learning down to be able to measure

instantly any home anywhere in the country for window siding gutters roofing doesn't matter sidewalks i can do it all through a buy so and i can have a consumer for us right now can buy a roof within seven minutes on our platform it's not launched yet but all the beta and seven minutes fully funded and they can schedule install when they want it installed and they walked into the whole entire process and how interact with that how that process works so is everybody going to do that? No, no, no. Because Paul and Mary today, our average consumer, still is 50 years of age. And that goes back to what I said earlier.

We're going to retrain somebody how to buy from us. I don't want to do that. And the market's already doing that. But I'm sure most people today are buying things from Amazon or online. This plane behind me, I never saw it before I bought it. I'm not bragging, but I got a lot of fancy stuff. Never saw any of it. Just bought it, delivered it, unloaded it from a semi-truck, put it in the garage.

I bought homes in the Bahamas. Never saw them. I do think you're right about a lot of this stuff, but I don't think the world is ready to get commoditized in home service yet. Because they want somebody to show up and look. Because if I diagnosed your car over the phone and it's more complicated, I definitely don't know, unless you've got technology that tells you, how does the wood look under the roof? Yeah, you should. You should have that. I hear this all the time from people. This isn't the first time I've had this conversation.

And most people are scared. Here's what I like about business. 99% of business owners are full of fear. They can hardly function. They say things like, what if it's got four layers of roofing on it? I need two dumpsters and they all need three decks. I'm like, yeah, so what's your point, man? I don't

understand your question. Well, you're going to lose money. Why did I lose money? I still don't understand anything you're saying to me. It makes no sense. Well, like, I charge $300 a square. Well, that's your first problem. Like, what day does that make sense? Material costs $280.

So why would you be cutting off $300? First of all, why do we even have this conversation? Who are you? Who are you talking about? So all the haters who operate in fear and ignorance, they can't make sense of anything I'm saying. The market has no idea what a roof costs the market. I agree that if you're asking...

Go ahead. Yeah. Paul and Mary have no idea what the cost to fix their Mercedes or their Buick. It doesn't matter. Like, here's what it costs. Here's what's in the cover. Here's the program.

It's this much per month. Here's a DocuSign. Sign it. Pick your date you want to install. It doesn't matter. So all the small print and all that stuff is really important. And for us, our model that we operate has dozens. So, for instance, if Paul's house, Paul Lunchbox, he has a 35-square roof.

So for some reason, our technology mismanaged the outcome to the algorithm. So we figured it was one layer and walkable, but it was non-walkable, three layers, it needs redecked. And it should have been $80,000, but we only charged $50,000. Then that's a problem, for sure. But for me, it doesn't bother me because we're pricing things in a way which covers some of that. And also the backside of all that AI has open book to all the public information when the homes are built.

So it's a lot of things that we take in consideration on that equation on how to price it correctly based on the information we can obtain from the marketplace. Right. The first thing, obviously, is foundational is the measurement. That's simple. That's the easiest thing. The second thing is grabbing the legal data from different municipalities and counties and tax records.

Yep. We do a pretty good job of that. That's something that you can take a lot of advantage of. So it's all there. You know, there's so many systems today and companies that do that to be able to mine that data. But being able to crunch it within a few seconds has been the most difficult thing. But we've got that down.

Like I said, you can do the whole process in seven minutes if you're fast. Like, you don't really care about seeing your home digitized or not digitized but in the uploading the photo which you have to do you can shoot a street view but a lot of things are grainy so if you upload your own photo then you can you can have a better idea of changing most people in the test market are spending about 20 minutes on choosing different products in our model and so the average time consumer day going to the closed process is still about 47 minutes, believe it or not. But it's going to spend a bunch of time messing around and looking at different things, and you give them the opportunity to do so.

So my goal was trying to streamline the revenue generation down to 10 minutes. Think about revenue generation today. Any of your companies, anybody listening, you get a lead, however you digest it or take it in. It doesn't matter. I don't care. However, whatever first point contact is. And then what do you do with it? Do you send a person out to talk to them? What's the schedule like? Is it tomorrow? Is it today? Is it two weeks from now? And then once that's done, let's say it's two weeks from now and you sell it, what's your install schedule like? Is it today, tomorrow, three weeks from now? So we're going from first contact to maybe eight weeks from revenue generation.

That's insane. I mean, why would you want to wait eight weeks to get money? That makes no sense to me. I went like eight minutes, man. So the whole improvement sector is so operating in a stone age. It's just insane. Most of them, most of it. I think we can say it.

Most of it in totality is operating in the Stone Age. Yeah, for sure. I mean, literally. I'm not saying you are. No, I agree with you. Most people don't have any idea how to read an income statement, a balance sheet. Most people have no idea what they're making money on or what they're not. They're not priced accurately, whether it's too much on one aspect or too little on another. And most people

just, they're just trying to make a living instead of building a business that operates without them. So I think you're dead on. Yeah. They own a job, don't they? At the end of the day, a lot of them. I mean, yeah. If you got to show up to work, it's a job. I enjoy my job. I enjoy what I do. If I didn't, you know, I hired for all my weaknesses and I've delegated everything I don't like. So I get to come in. I mean, I'm on a podcast for an hour and a half. And I do that all day. And I get to learn.

And I get to train my brain and learn great ideas. And I got a lot of notes off of this. So, you know, I think I'm. That's not a job, though, Tommy. That's your work. And you can never quit your work. You can never be fired from your work. That's like, that's your, that's your passion. Now the job you can quit the job you can be fired from that your work, man, you can never lose that. That's what's so cool about what you're doing. Cause you, you truly enjoy it. I would

never call what you do a job. I think that's your work. And that's what you're, that's what you were made to do to impact and train and inspire people.'s like you probably get energized from that i'm sure of it and you probably it feeds you and keeps you going so that's your work that's not a job a good job people hate well they work your work you love your work hope you love your work i bet you do yeah sounds like someone uh if someone wanted to reach out to you what's the best way to contact you no i'm like they can call me they can i look to the west at 3 p.m eastern time every every day for smoke signals and or they can email me at kevin at honest abe roofing.com it's pretty simple but long but since kevin at honest abe roofing.com was there easy switch so kevin at honest abe roofing.com what is uh what's a book other than

like the e-myth and the you know i could probably go on 10 of them you know robert kiyosaki rich dad poor dad but yeah is there a book that really stood out to you that really helped you yeah there is and it's where people get real creepy on me like oh he's one of those guys i'm like i am one of those guys there I'm like, I am one of those guys. There's a library of books. There's 66 of them in this library that are just fascinating. When I first found them, I was confused. When I first read the first one, and I read it like 20 times,

this first book in this library of 66 books, I was amazed on how the actual, finally I found the roadmap, the owner's manual for life. And when read it was so simple it's this book called the bible in the first book it was called genesis and in genesis god gave man the five steps of success and the cool thing is i'm watching you do it right now his first mission statement to the minute well not the first one but one of them was being fruitful and then multiply that fruit and then replenish it think about business right now fruit like what's your fruit in your business your people how do you multiply yourself your fruit inside you right and then what do you do to replenish it then it says subdue subdue it now subdue means like

management control organize it and then and it says have dominion over. Now, you've got like 35 locations. You're getting close to a billion blocks. It's sick, man. That's what we call dominion. You've been fruitful. You've multiplied it. You've replenished it, which means you've got system procedures, so on and so forth.

You've subdued it, and you've got dominion, ownership, management, control over your own empire. And that's what every person was given if they read that basic manual. And all through that book, that manual for life, the basic instructions before leading earth, B-I-B-L-E, gives you all the content you need to be successful in business. That's God's first five steps to business was be fruitful. And by the way, the fruit, he didn't say be seedful. He didn't say produce seed. He said be fruitful, which means way the fruit didn't say be seedful but he said be like produce seed he said be fruitful which means the seed already inside you the seed the fruit of your

idea that's the fruit that you've been given to give to life like i don't go to an apple tree for the tree i go to the apple tree for the apples i don't care about the apple tree i want some apples baby and give me some apples that's why people come to you and your business because you've got fruit growing out of you fruit of 85 grand a year on average come on dog let's go ahead and give yourself a high five because how many jobs have that type of pay in home improvement industry you know it's not very many that's some huge fruit and then you're developing people you're replenishing it you're subduing it you've got management over and you've got your dominion all up in there that's right there in chapter one in that book so if i was going to say anything i could just grab the owner's manual for

life and read it first that'd be my first lesson and then when it comes to human books written by man for business man there's so many good ones and you've already named a couple i'd have to get in my library there but michael river obviously the e-myth that's a great book and that's it the way he put that book in story format i think is was brilliant amy and everybody in the the revision of that all good stuff i love jack welch and the ge way i believe that book is if you go through that and the things, it has a lot of personal notes in there, depending on how you want to digest it. Obviously, the audio version is good, unabridged, or just get the book and read it. There's a lot of cliff notes from him personally.

He was America's CEO, so a lot of great lessons there. I mean, can you imagine running a multinational business and all the things that that person would have seen and had to interact with and how he dealt with managers and then the tool they built and i forget the city where it was at and perksville or something i can't forget but it's been a few years that's amazing book as well and so many others got my phone and grabbed the library because i love i do listen to my fly i don't recall the titles but one of my other favorites this guy's more of a real estate guy but i i do appreciate grant cardone i i believe he's got a lot of good content out there as well and depending on where you're at in life but the 10x rule i believe is a today's version of Think and Grow Rich.

If you ask me, I believe it's just kind of a spiff or a spin on Think and Grow Rich from Napoleon Hill. And Napoleon has several books too that I believe that haven't been fully appreciated. One of them is Outwitting the Devil. I think that's a phenomenal book. I love the writing of it and how it's written. There's a lot of backstory there, but we won't go into it for here. But those are good books.

Obviously, I think the holy grail for business always, as we just said earlier, we had mentioned maybe, was Napoleon Hill's book, Think and Grow Rich. I've been through that thing a gazillion times. I think Grant kind of just redid that for today's world in the 10X rule. And Outwitting the Devil from Napoleon Hill also, Outwitting the Devil, though, from Napoleon Hill. Also, Outwitting the Devil. Really pretty cool read. Very important. I think, for me, I like it very biblically, with biblical principles in a weird sense,

on how so many people just drift through life. And Napoleon speaks a lot about the drifter drifting. It's difficult to hit something when you're shooting at everything, but for anything so i see a lot of people doing that so that's an interesting book if you kind of feel lost and you need some help and some guidance outwitting and that will be a good place to start kevin i got a lot of notes man this has been excellent thank you for landing your plane for this podcast i really got a lot out of it and i got a lot of notes, man. This has been excellent. Thank you for landing your plane for this podcast. I really got a lot out of it. And I got a lot of great comments here.

They really enjoyed your show. There's 26 people still on, but this usually, we just passed our millionth download. So once it hits the podcast, probably in the next three weeks, you'll probably be getting a lot of emails. So this has been great, brother.

Awesome. Well, thanks for having me. Anytime you want some more gas, if you need me to come back, I'd be more a lot of emails. So this has been great, brother. Awesome. Well, thanks for having me. Anytime you want some more gas, if you need me to come back, I'd be more happy to do so. Yeah, no, I really enjoy this. And we'll definitely get to know each other in the future. And I got your number here, so I'll be in touch. Sounds good. Thanks, everybody, for paying attention.

Be great. Thank you, buddy. We'll see you. 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.