The Home Service Expert Podcast - The True Competitive Edge In The Home Service Industry

Episode Date: January 28, 2018

Terry is a true home service legend, having been the national trainer of a NYSE-listed home services company ($900M+ in revenue before getting acquired) among other things. In this episode, we talked about hiring, KPIs...

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. Hey there, folks. I'm here with Terry Nicholson. Terry is, well, you just came from Florida to

Nashville, correct, Terry? That's correct. How's your day going? Well, it started really early in the morning, which is exciting because there's not a lot of competition at 4 a.m. at the airport. Yeah, that's true. I've been traveling a lot myself, and I got that TSA pre-check. It just gets me right through there. Yes, I'm a fan of that as well. So, Terry, tell us why. You know, I know a lot.

We just talked for a while on some of the stuff you've done, and you've got quite the resume. Tell the contractors and the business owners out there a little bit about what you've been through and the growth you've experienced since the 90s and your Tom Hopkins training. Where you've been and where you're going and what you're doing today. Okay. Well, I've been in the home service business now since the early 90s. And my first endeavor was with a organization called Contractor Success Group, which was headed up by Jim Abrams. And it was the first best practice organization of its kind, helping HVAC, air conditioning, heating, and cooling contractors how to be better business people. And out of that endeavor, we had this organization that would basically, when you join this organization, it's a membership organization. You would get management expertise. You'd get

marketing expertise. You'd get a group buying power by pulling all of our purchasing power across the United States, and we'd get training expertise. Out of that, Terabrums formed the first publicly traded heating air conditioning company in the world, and that was Service Experts, which is a publicly traded company. It ended up on the New York Stock Exchange, grew to be almost a billion-dollar company during its peak. By plan, after he took that company public, it was his intent to retire, which he did retire at the age of 50. And he retired to Siesta Key and started walking the beach in Siesta Key, Florida. And after about a year and a half of being retired, he said, I'm tired of being retired and I'm too young to be retired. I want to start another business.

And he formed a company called Clockwork Home Services, which I left service experts become part of that endeavor. It was a small startup company, and we launched that in 1999, towards the end of 1999. We started in the plumbing world with an organization called Plumber Success International, which we later formed a franchise called Benjamin Franklin Plumbing. Then we got into heating and air conditioning again and lost an organization there. And that became one of our heating and air conditioning franchises. And then we got into electrical and we formed an organization called Mr. Sparky. And we had some other business entities inside there, but that organization grew to be, I guess, roughly $220 million business. And we also had company-owned

retail operations where we were in the business. So we're not just consultants that are saying, here's how you operate your business. We were in the business teaching them how we operate our business and sharing our tools, our systems, our procedures, our methods with our clients. And we had approximately $3 billion of contracting revenue being done collectively within our organization if you put our revenue and our clients together. And we ended up selling that business to Direct Energy when they came from the UK to Canada to the United States, which is the utility company that wanted to be in the in-home service business.

It's been a long industry for me on that. We sold the business. Jim retired again. I completed a two-year agreement with Direct Energy, and then we got back into business again, and we now have two contracting organizations. One's called Praxis S10, which is a success college for contractors. And the other one is called PriceFixer.com, which is an internet platform that provides HVAC equipment to consumers where they can purchase online and they can use our professional installer-based network to install for them. And we're serving the consumers who like to shop online and disrupting the industry and doing something no one else has ever done before. So that's my story.

I love it. It's a great story, and it's funny because we probably know a lot of the same people. A guy named Dusty used to actually head up the call center for Direct Energy. I actually have Direct Energy as one of my clients for lead generation. Do you know Susie over at Call Cap? Yes, I sure do. Amazing. It's just a small world. We probably know a lot of the same people. The guy named Dave Schatz is over there at Direct Energy and I work pretty close. He's a busy guy. He's over about 1,400 people in their call center, but you've redone it. You know, people don't understand. I don't think once you've made it to the top, you could redo it. And I've seen this happen a lot where people will go to retire and then they'll come back and they can just recreate it. So, you know, you got Benjamin Franklin, the plumbing, Mr. Sparky. You've worked for these guys for a long time, James Abrams. So tell me a little bit about the Success College for Contractors.

What is that? What do you think that you guys do that's so important? And what what the guys would learn if they came and participated in that well we have an organization today that's unlike any other organization that has ever been formed and i and i say that with all sincerity because keep in mind jim abrams created the very first best practice organization of its kind in the contracting industry. And in our opinion, the systems and procedures we taught back in those days, the times have changed. And what I mean by that is we used to teach it's all about margin and managing your business by the margins. And so what that has led to is it's led to a lot of – and once again, I know we have a lot of industries on this conference call here, and I don't want to stereotype and I don't want to say this is your industry. But in the industries that we're predominant in, a lot of people have become better – and service companies have become better salespeople and marketers than they are technical delivery guys. And so where technical competency

was a key component of our formula that Mr. Abrams created back in the 80s, well, in the 90s, it started shifting in the 2000s. There's very little training spent on training technicians how to be technically competent. In fact, if you ask a service company, who's your best technician, the answer will be who sells the most stuff. Right. And therefore, they've continued to market as overhead has grown. What they've done is they've increased the price. So they've become better marketers and salespeople,

and the price has continued to increase to the marketplace, and they're not managing their business effectively. So Praxis S10 is the only organization that's putting a focus back on the contracting world of technical competency and on managing productivity. And what that means is we believe will be a huge, huge, huge competitive advantage for our members because they'll actually be able to bring the marketplace a lower price to the marketplace, to the consumer, and still make equal, if not greater money than their higher-priced competitors. Now, you don't have to be a rocket scientist to

figure this out. I mean, look at the growth of real estate, or not real estate, but companies that have grown. the top 10 retailers in the United States are all driven on a price model, providing a lower price product to the consumer. And I understand not everyone wants that, but the majority of people want that. And so if we can bring a better service or equal service for a lower price, the word of mouth spreads and they can still make huge profits. And because they decrease their advertising, they decrease their callbacks, they decrease their warranties, they're actually making more money. And we are the only organization that's gone back to old school, if you will, and say, we've got to put the technical back in technicians

in the HVAC world and focus on productivity. Yeah, I like that. You know, you kind of struck a chord with me there because we do think, I look at three things when I look at a technician. I look at customer satisfaction is first and foremost, and we've automated that through a text survey, just a yes or no, and then we go into a deeper one. But if you don't have that, you're not going to get repeat business. You've got to create what we like to call raving fans out of our clients. And then the next thing is close ratio. I like to make sure that you're going out and you're somewhere in the high 80s, meaning that you're earning the customer's business that we set up for you, as long as we do our job as CSRs and dispatchers. And then thirdly, I do look at an average ticket because I tell people all the time, you could go buy a $29 phone at Walmart, but you could also

pay over $1,000 for the iPhone. And guess what? The new iPhone sold out. So I know price is important, but I do think a lot of what you said is service too, and making sure it's done correctly, because I've seen some hack jobs in my day. Tell me a little bit about James, some of the stuff that you've learned from him over the years, some good lessons that you've taken out of all these businesses you guys are working on. Well, we could talk all day on lessons that Mr. Abrams has taught me, but I think the first one that, and since my understanding is everyone that's participating is probably a business owner. Is that correct, Tommy?

Yeah, the majority of the people that listen are business owners. Yep. The number one principle he would teach you is he would say your business is a vehicle to get you what you want out of life. Nothing more, nothing less. And the reason that becomes so important is some people show up and they work hard every day in their business, but they don't truly have a plan for what they want to accomplish with their business, where if you can stop and identify what it is that you want to accomplish in your life, in your personal life, and then you build your business around accomplishing what you want in your personal life, it makes it easier to do the difficult decisions and to do the disciplines that you

may not necessarily want to do. So that would be principle number one. And then principle number two would be, how do you put together and build numerous companies that focus on the consumers? And so in our life, and I say our life, in our business career anyway, I should say, we've done a lot of business. And obviously, we've made a lot of money as well. But we've never once went to a white board or conference room and said, how can we make money? That was never the issue. We always would go to the board and we would start with three questions. And the first question was always, can we bring to the consumer a unique product or something that is better or a service

that is better than they're receiving today? That was always question number one. All right. Question number two is, can we bring this product or service to the consumer more economically? And then question number three is, can we bring this product or service to the marketplace more conveniently for the consumer? And the exciting thing is, if the answer to one of those three questions is yes,

you probably have a business opportunity. If the answer to two of the three questions is yes, then you have an business opportunity. If the answer to two of the three questions is yes, then you have an incredible opportunity. If the answer is yes to all three, then the only thing preventing you from huge success will be your execution of the plan. And so let's take Price Fixer, for example, which is our internet platform. we're making it available for consumers to buy HVAC equipment online. Can we bring a HVAC system, a unique way of purchasing online to the consumer? Well, the answer to that is yes. And in today's world, most consumers cannot get a price on what a furnace or air conditioner costs

unless they're willing to have a salesperson come out to their house and listen to a two- to three-hour sales presentation. Right. I know. Because I taught that formula back in the 90s. Yeah. And I became very good, and I became famous in the industry for teaching salespeople how to sell that way.

So there's the first question. Is this unique product or service that you buy online? We said yes. Okay, looking good. Now we go to question number two, can we bring the product or service to the marketplace more conveniently? Well, it's more convenient to bill on the Internet any time of the day you want, 365 days out of the year, than it is to have a salesperson come out to the house on their schedule. So we think price picture is perhaps going to be the biggest business we've ever built based on those three questions. And everybody on this call could ask themselves these three questions. Yeah, I agree. You know, those are great things to go off of.

And you're right. I think you only need one of them. So you were working on a company that was listed on the New York Stock Exchange. And during the time you were there, they went from $68 million to $688 million. That's $600 million more. Tell me a little bit about the infrastructure and how you're able to build the machine like that. Well, that does sound impressive when you say it that way.

And I want to stress, it doesn't happen with just a few people. It happens because of a whole bunch of good quality people and all focused on delivering product and service and bringing it to the marketplace. Number one, though, to answer your question is it starts with a plan. And that plan happened because of a plan that was laid out by Jim Abrams, which is a lesson everyone on this call could benefit from, because it shows you Jim's foresight and his wisdom of building businesses. He built a business where he projected revenue growth even after he planned to retire. And so he laid out the model that would be a model that would be followed for years to come. And if there's, and I know I'm kind of regressing back to that last question on lessons, but Jim is the epitome of a planner. And he lays

out, you know, once again, if we go back to those three questions, once he lays out those three questions, we make the decision, we've got a business opportunity, we build a plan. And he always is famous for asking the question, if in the unlikely event we don't achieve the desired results, he always says, is it a poor plan? Did you build a poor plan or did you have poor execution? Now, you're a business owner, Tommy. What do you think the answer traditionally is when you don't achieve the desired results? You think it was a poor plan or you think the answer traditionally is when you don't achieve the desired results? You think it was a poor plan or you think it was poor execution? Well, you got to have an exciting goal, right? You got to know exactly.

And a lot of people don't believe in business plans, traditional business plans. But I truly believe you need to identify where you're going. And I talk about the E-Myth a lot. I almost overkill that book because it just talks about what you need to get, who you need to get on the bus and exactly what you're going to do. Policies, procedures, checklists to make the business go. So I think you're right.

It's the plan. And can I add to that, what you just talked about on getting the right people on the bus? Yep. Because I can tell you and I've read a lot of the same books. So that's Jim Collins' quote, right?

Yes, sir. Yeah. Well, that's where you stimulated me to think about that when you said the right people on the bus because number one is always hiring the right people. If you're going to build a big company, you've got to hire the right people. And then step two is you've got to train those people to do the right things. And then step three is you've got to superv the right people. And then step two is you got to train those people to do the right things. And then step three is you got to supervise the people. And supervising can mean

lots of different things. You know, supervising, I would put under there. Well, we could call supervising holding people accountable. Four, I guess you could call it motivating the people. And I think a lot of business owners fell in this step because motivation is we want people to come and love our company as much as we love our company. But the reality is they're never going to love our company as much as the owner is going to love the company. Or if you do have that individual, they're rare. So you've got to find out the motivation of that individual, why they come to work every day. Because I have found that people, they don't want to come to work for my business. They want to come to work for their reasons. And my business can give them the vehicle again, be the vehicle to give them

what they want. So you got to ask your people what it is that they want and what they want to achieve by working with you. And then five is the administration, making sure that they get paid and they get highly compensated and they're inspired to achieve their performance bonuses or whatever you have in place. But out of these five principles right here of building a big organization, of getting the right people on the bus, you know what's also a clever shortcut? I've found if you hire the right people and you train them to do the right things and invest a lot of time training them to do the right things, your supervision gets relatively simple. Because you don't have to supervise them very much if they're the right people and you train them to do the right things.

Yep. Yeah, that's true. It's happening right now in my business. And, you know, it's hard. How do you relate that to some of the guys out there? And, you know, I don't know. It's been probably decades. But think about a guy with three guys working underneath them or three gals. And and, you know, maybe they got some family involved in the business and it's struggling. You know, they're working every day. They're trying to keep up with the phone calls. And how do you take a step back and reset? And how do you recommend some of these people with not quite as big of you're building the company will accomplish phenomenal feats if they buy into your vision. And if they respect you, they love what they love to do,

they want to be a part of building something great, you will get phenomenal efforts out of people. And I still remember the story when Jim opened his first company and it was him and one technician. He would stand up in front of the group and Jim's a believer that when you teach, when Jim opened his first company, and it was him and one technician, he would stand up in front of the group. And Jim's a believer that when you teach, you stand up. So even though he's having his tech meeting with his one technician, he would stand up in that meeting and he would say, I'm going to build the biggest company in this town.

We are. And he said his technician would sometimes laugh at him. But he did go on to build the largest company in town. So it's by creating this vision. So that's where you get started is really know where you're going, you know, and setting goals. But I think that setting three goals is important. Set a really obtainable goal that you think is doable. Then have one that stretches your limits and then have one that's just way out there. And we talk a lot about goal setting, but you know, that's the, one of the most important things is really having the vision. So the guys out there and the gals out there that might say, you know, I love listening to this stuff from these guys that have been successful, but

first thing is, is really have that vision and then work backwards. What are your goals? How are you going to get there? What is the company going to look like? So I think that that's amazing advice. Terry, you wrote a book called Unleash the Animal in You, where you teach people the secrets of the animal kingdom and how to unlock their potential and basically achieve their goals. Tell me a little bit about that and the whole process behind that,

if you don't mind sharing some stuff on that. No, no, I don't mind at all. In fact in fact you know and i think everyone has to understand who they are and from my mind that so much of success comes down to your mental thought process and what you believe and is possible and what you believe is not possible you know will come to to be fruition so on unleash the animal in, one day I was playing fetch with my dog and he was the one fetching. I was the one throwing the stick. Just want to make sure we're clear on that, Tommy. All right. But it occurred to me that, you know, he's got jobs in life and there's lessons that we can learn. And so, you know, the way I would tell

the story if I was standing up in front of a group of a couple thousand people is I would share with them that, you know, Clifford is so excited and committed to his work that he will actually go to bed on my side of the bed. Now, that creates some conflict in my wife and mine's life because she thinks, you know, Clifford is her dog. The reality is he's my dog because he sleeps on my side of the bed, right? But no, I tell her, I said, no, he just wants to make sure that he's not late for work. And that's why he goes to sleep right up by my side of the bed. Now, what's amazing is the minute that I move in the morning, he springs up off of his little bed and he's already acting like he's had five cups of coffee. And if I move just slightly one more time, he runs over the top of the stairs, which is about 15 feet away,

and if I don't step up immediately, he comes running back. He's not allowed on the bed, but he bumps into the side of the bed with his chest, as in waking me up to make sure I get up. And as soon as I stand up, he takes off running to the stairs, and he's so excited he is literally doing circles. And when I get close to him, he heads down these stairs at Mach speed, and this is where it gets exciting, because at the bottom of the stairs it turns into a hardwood floor.

And he hits that hardwood floor and goes into one of these big, huge hyper slides. And, I mean, it's hilarious. It brings a smile to my face almost every day, you know. And I go to the front door and Clifford is so excited. He's doing circles at the front door. I have to lean over to keep from getting a fractured knee and open the door while he storms out. He flies open the spring door there. We've got about four steps. He flies off the four steps, lands out in the grass, and you probably think he's going out there to take care of business,

but he's not. He's running to the end of the sidewalk or towards the sidewalk, the end of the yard, and he picks up the newspaper, and he comes running back and drops it off at my feet. And that's his job. And every day he wakes up and approaches his job with full of enthusiasm and excitement, whether it's raining, whether it's snowing, whether it's sleeting, no matter what the day is, no matter what the weather is, he's excited to do his job. And so with that, I think that if everyone approached their job with that same amount of enthusiasm, even with the monotonous details, would they accomplish more in life? I think they would. In fact, if you are a co-worker

on this line and you want to impress your boss, just show up at bedtime with a little pillow and blanket and tell them you want to sleep next to the side of their bed and make sure you're not late for work. That'd be one way to get excited. And one thing that is nice if we want to continue on with the lessons of Clifford is almost every day he gets a pat on the, and he gets a big scratching behind the ears, and Clifford, you're a great boy, and I appreciate you getting the paper for me. But there's days when I've got to get to the airport. There's days when I'm busy, and I don't thank him, and I don't give him his pats on the head. But you know what I've noticed? He doesn't get upset.

He doesn't go lay down and pout. He doesn't go over there and say, oh, I didn't get any appreciation today, so therefore I'm not going to get the paper tomorrow. No, he gets up every day and he does his job to the best of his ability for his own internal pride and satisfaction. And I think that's a great trait that we all could aspire to be like, is if we just approached every single day with that amount of enthusiasm for every task and for our own internal pride, which I know most owners on this phone do, but that's not always the case with co-workers or team members, employees, they need to hear that. And so there's a very valuable lesson.

You know, there's another lesson here that we can learn from him. You know, on Sundays, you can't believe what happens on Sunday, Tommy. What do you think happens on Sundays? Church. Well, church happens, but the newspaper. Oh, the newspaper doesn't come, yeah. No, it comes. It's big. Oh, the big doesn't come, yeah. No, it comes. It's big.

Oh, the big newspaper. Okay, yep. Yes. Gotcha. There's two newspapers. So, can you imagine, you know, if Clifford went to bed on Saturday night and how sometimes we complain

about the little things in life, could you imagine Clifford laying down next to my side of the bed and go, oh, Saturday, Saturday night. It's horrible because tomorrow's Sunday. I got twice the work tomorrow. I got to pick up two newspapers, and they're twice as big. Look how bad I have it.

No, he never does that. He never complains. He knows it's Sunday. He goes out, he brings two newspapers back and he does it with pride and satisfaction because that's his job. And he does it to his ability every single day. So those are the type of animal lessons that I teach on Unleash the Animal on You. And there's more if you want to know more. You know, what I think we should do is I'll pick that up. I want to study it. I love learning

this stuff. And then we can maybe get you back on in a couple of months and just discuss that and go through a lot of it. Sure. Because I want to dive in. I mean, I've got at least another couple dozen questions, but I got to tell you, the biggest thing that I've noticed from everybody, the questions all over that I get is, how the hell do you get good people? And I was so busy working 12 hour days. And I was and I used to tell myself, you know, I was in my early 20s. I said, nobody's going to do it as good as me. They don't take the pride. And, you know, I think a lot of people tend to tell themselves that that are just getting into business.

And they say people don't listen. And then we call it the Fred Flintstone. The workers become, yeah, but, yeah, but never do. Yeah, yeah, but, yeah, but, yeah, but. And how do you get over that mentality of just saying, how do you step out of the business and stop working so much in it and start working on it? That's a cliche, I guess I say all the time is work on it. But how do you get to that point? Well, you know, I'm probably not the right guy to answer that question because I think if you ask my leadership team, they would say, you know, Terry, you have a

tendency to get involved in our business a little more than you should. But I guess in answering your question, the way I would look at that is, I think it all starts with an organizational chart. And most business owners, and especially small business owners, and according to the U.S. government, a small business is anything under $500 million in revenue. So I don't mean that derogatory because I'm a small business owner as well. All right. But if you do under $500 million, you're considered a small business owner. And yet so few want to operate with an organizational chart. And that's where it all starts. And a small business owner probably shouldn't have more than about five direct

reports is about all that they can handle. And if you look at an in-home service company, there's probably five positions that are management positions on the organizational chart. You probably have the ops position. You probably have a sales position. You probably have an admin position, which probably is accounting and admin. You probably have a marketing, and you may have a training if you're big enough. So those are really the five key functions of a service-providing company. And so that would be step number one. Now, as your company grows bigger, your direct reports as the entrepreneur is probably going to grow smaller,

which is even better, because once you get bigger, you're probably going to have a CFO. You're probably going to grow smaller, which is even better. Because once you get bigger, you're probably going to have a CFO, you're probably going to have a COO, and you're probably going to have a CTO. So the fewer reports you have, the better your company usually will perform if you implement the right principles, which principle one is develop your organizational chart. And I got to tell you, Tommy, working with contractors across the United States and Canada, well, other countries as well, that is one of the first assignments that I have to do with them when we sit down with them because they don't have one. That's step one. And then step two is take every single position on that organizational chart and create clearly defined responsibilities and performance standards, which a lot of people that do have an organizational chart haven't done this second step, which that means if you're the ops manager, for example, what's the responsibilities of the ops manager? Well,

I don't know if it's ops or sales in your organization, but earlier you said, I expect an average invoice. I expect an 80% closing ratio. I expect customer service, which is rated off of a very defined review process. Well, that to me would be an ops management clearly defined responsibility. My ops manager, I would say, out of all the technicians that report to you, I want our customer review rating to be X. I want our average invoice rating to be X. I want our call closing ratio to be X. And so now you've identified the responsibilities and you've clearly identified what their performance standards are. And once you have those clearly defined, it's the entrepreneur. And yes, it's challenging to do because the entrepreneur knows every single

aspect of the business. And they're probably better than the manager at that because it is their business. But you have to practice that hands-off where I will train the manager and I will let the manager train the technicians. I will train the accountant or CFO. The CFO will train the people that work underneath them. And until you really do that, you're never going to build a big organization. And you're going to find yourself running on the hamster wheel day in and day out. Yeah, that's amazing stuff. I really think that org chart is tough for a lot of people, but you just got to sit down and make that org chart and really define the roles.

And what I like to do is actually put a contract together of a want ad for the person you're looking for. And a lot of times when I write my ads, I really tell them about the culture of the business, what kind of person I'm looking for. And then but I really want to figure out what they're responsible for. And I figure out everything that I don't love. And I find somebody that is better than me at it. So I think that that's amazing advice and really being a company of processes. And so that's really well said. You know, I've made a lot of mistakes. I got to tell you, I used to hate that phrase. If I knew now what I, you know, what I, if I knew back

then what I know now, it would be amazing, but you really got to experience a lot of it. And I have, I've made a lot of mistakes. And I think that that's shaped a lot of the decisions we make today on drug test and background checks and making sure that we've got better trucks and better fleet management and better things for the customer. Tell me a little bit about some of the mistakes that entrepreneurs make when they're scaling their business. Some of the things that really stand out because you've trained, you know, tons and tons and tons of people. What are some of the things that we need to know about that you would say just come out of the blue and you see it happen a lot? Okay. Let's see. That's a wide open question as well. Some of the business mistakes that I think are repeated over and over and over again is we will be chasing opportunity profits instead of profits by plan. And what I mean by that is let's take an HVAC contractor that's an in-home

residential service provider. They build up a really great reputation. They provide outstanding customer service. They've got a great brand. People love them in the marketplace. They do a great job. And for whatever reason, they come across someone who knows about their quality reputation, and they say, you know, I've got this commercial contract, and I'd like to give it to you because I think the world of your company, and will you come over here and do this million-dollar commercial job? And the business owner is all of a sudden going, well, wait a minute.

A million dollars, that's a lot of money. That's a lot of opportunity. I know that's not my core business, but it's heating and air conditioning. How hard could it be? And so even though their core business was residential, they chased the opportunity for profit and jump over there and do a commercial job that's entirely different, entirely different business model, entirely different employees, entirely different percentages, and they get into it and they may even still be doing their work

right. But all of a sudden, maybe the commercial contractor who hired you doesn't pay his bill in a timely fashion. Maybe you've been floating the money 30, 60, 90 plus days. And now all of a sudden you've tapped out your line of credit. The small bank gets nervous, calls your line of credit. And all of a sudden, bam, your business is history and you can't do anything about it. And it was all because of greed motivation of chasing opportunity profit versus chasing profit by plan. And so that's where we started our discussion off of the plan. And yet so many business owners that I have to meet with that are in financial difficulty or

even forced into bankruptcy, almost always it's because they jumped out of something and went over by something that was not in their plan at all. And I think that's the number one mistake I see people make. That is so great. I just read a book by Gary Keller, Keller Williams Real Estate Company, and he, I'm trying to think, I think it's called like the one. But he, the first four chapters talks about ultimate focus. Focus, focus, focus. Narrow your focus. And like you said, sometimes we take on stuff. And as entrepreneurs, I call it the shiny light complex, right?

We look at all these directions. We start making money. And then all of a sudden we decide we're going to flip houses on the side. Or buy a second home at the lake. And we do this stuff. And I just I've been guilty of it. And until you have something running like a machine, an oil machine, I definitely recommend ultimately focusing on that. And I had a guy tell me a long time ago, Terry, I always said, I put my eggs in a lot of baskets in case one of the baskets falls and breaks. I want them to be spread out. And he said,

Tommy, imagine if you put all your eggs in one basket for one year, that basket would be overfilled into all your other baskets. And so it made me think about that. And I think it's exactly what you're saying is narrow focus, stay focused on what you're trying to accomplish in that business and don't get out of your zone. And great advice. I love that. You know, we talked about hiring and I think people always ask me, are you a people process or a product person? And, you know, we're all three of those. We're all three of those, but I believe you got to have the right process to get the right people.

So you need to define a process on how you're going to look for them, how you're going to background them, how you're going to check their references, how you're going to onboard them, how you're going to train them. So I believe great people, you know, sometimes you get a C player,

but with the right leadership, you can make them an A player really quickly. So tell me, what's the underlying philosophy or strategy that results in the best hiring process? Well, that's one of the things where technology has greatly improved the ability to hire the right people. I mean, today's world, you can do instant background checks on people. You can find out whether they're fabricating, you can find out where they really work there. And I know, so take this with a grain of salt, all right?

I know there's legal ramifications here, but so many people post who they are on Facebook and LinkedIn, so I want to stress. I'm not telling you to make a hiring decision based on what you see on Facebook and LinkedIn. But I am telling you, you can tell a lot about a person if you go on their social sites and see who they are and what they're promoting on there. All right. So that's definitely one thing that has helped as well as the once you can profile individuals in a positive way of identifying and the bigger your company becomes, the more successful you'll be at this, of taking profiles and taking your perfect, and Ashton said perfect, but your top performers and identifying what their traits are, and then processing those traits and then comparing that and making that part of your interview process in today's world. Now that we've talked about technology, let's talk about really the mental mindset again of recruiting. Because we as business owners never want to admit our flaws, including me.

It's very difficult to stand up and look in the mirror and say, hey, there's my problem. When almost always, whenever I'm having a business problem, all I've got to do is stand and look in the mirror and there's my problem. And it sometimes requires some hard discussions with the man in the mirror. But the reality is there's too many contractors who say, I can't find good help and it's not true. And the reality is if you're a very attractive company, then you can attract the right individuals. Now, in our organizations, when we had locations all across the United States and Canada, we had a lineup of people. We had people coming virtually every single day from the trade wanting to work for us. We did not have an issue recruiting and

hiring the right people because we had created this environment of outstanding compensation. And plus, it was part of our culture. You talked about establishing your hiring procedures of drug testing and criminal background checks and whatever other attributes that you put in there. Well, one of the things that we have down is we want to have the highest paid employees. Right. Well, when you make a culture and you say, I want the highest paid employees, then why wouldn't people want to come to work there? If you're treating them with respect, they're not going to come to work there if you're,

you know, abusing them for more money. But if you're paying them more money and you're treating them with respect, you're creating opportunities. And all people want to know a couple of things. Number one, is it a growing company? They want to know, is it a growing company? Number two, is there room for advancement and opportunity? Even if they don't want to advance today, they still want to go to work for someone in case they change their mind and decide they want to advance. And those are things that you build in there. And I don't mean this braggadocious, but I also mean it for what it is. I can go into any marketplace today and hire a heat and air conditioning technician when

every technician will tell you, well, every company will say you can't find good technicians? Because I'm sitting here in Nashville today. There's probably 500 heat and air conditioning companies within the metropolitan service area of Nashville. Can you really sit here and tell me out of 500 companies, there's not one technician or two or three or 10 that I couldn't recruit from someone else. No, you're absolutely right. Especially with that mindset of paying the most. I think that's hard to get right off the bat, but I wholeheartedly agree with that. I had a guy tell me one time, super, super wealthy, owned a bunch of car dealerships. And you know, car dealerships have the biggest turnover out of anybody. And I said, how the hell do you do it,

man? You know, I'm at a mansion. I was looking at a garage door over there. And he goes, I simply find the largest amount of pay in the industry. And I pay my guys 15% more and anywhere from 10 to 20% more. And I said, how do you afford that? He goes without turnover, my, it reduces my cost significantly, you know, training an employee, getting the right guys is, is, is a battle. But if you pay more, the turnover doesn't cost a lot of money. And he goes, I make one phone call at night and the guy gives me a report on my KPIs and that's it. So that's an amazing thing to realize is a lot of the guys say, how should I pay? I get this question all the time, Terry.

I'm a big fan of commission with some other things on there, like fixed pay on certain things. But the reason why I like commission is because people are incentivized to fix it right but you got to be very careful with commission because sometimes people sell stuff to people they don't need but the problem with hourly is there's no performance pay number one number two is they'll do the minimum viable product they'll fix the the little thing on there but they won't look at anything else so what are your thoughts on the way to pay can Can I come back to that question? Because I have one more comment on recruiting. Yeah, absolutely. That I think is very important because I know some people listening to this call will just morally, ethically say, I don't want to recruit from someone else. Okay, then that's fine. Then what is your action plan then to build your

tomorrow's workforce? You know, I'm sitting here today in Jimmy Hiller Plumbing, Heating, Cooling, and Electrical in Nashville. He's my business partner on Praxis S10 and PriceFixer.com. And he made the decision. Now, keep in mind, Jimmy was one of our first clients when we launched that company in 1999. At the time, he was a two-truck operator in 1999. He was in severe debt, was in a service truck, was on the verge of going bankrupt. In fact, he was probably technically bankrupt, but just didn't know it, so he didn't quit. He just wouldn't quit on himself. He began applying the principles and the lessons, and he's become one of the best students

we've ever had. Today, he operates a business that is doing $100 million in in-home service. That's all in-home service. That's residential service and replacement. All right. So it shows you what's possible. And just his growth goals alone this year, when he went into 2017 with a business plan, for the growth goals he had set for himself, he had 150 employees he needed to hire. 150. Now, I'm not telling you you're going to find 150 technicians per se out of 500 HVAC companies that are quality individuals. So he made the decision, I'm going to invest and I'm going to build my own training program. So he went out and acquired a training center and you can look this all up online. And it's a company called Total Tech, which is a plumbing, electrical, HVAC training center

that he operates on a wing of his building here. And then he went and he met with the governor of or congressperson of Kentucky. And there's a military base that is split between the Tennessee-Kentucky border. And he actually went and became part of the career placement program for the military base, which is Fort Campbell, Kentucky. And when soldiers are now getting ready to come out of the military, they can go through a career placement program. And he drives a bus up there. He doesn't, but he pays a person to drive a bus up to the military base every day. And he brings these soldiers down for training in his facility. And his commitment is, and it's our practice commitment and price fixer commitment across the United States,

any soldier who is graduating from the military, if they can pass the total tech, we will interview them, and we will be able to get them a job anywhere across the United States. So here's a gentleman, Jimmy Hiller, who runs a big business that says, I recognize there's a technician shortage. I'm not going to sit around and complain about it. I'm going to do something about it. And every person on this call, if they have a labor shortage, could go to work and do something about it and start putting in place a hiring mechanism to start building and growing your own in-home talent. It takes longer to do it, no question about it,

but when you apply the principles of I'll recruit by paying higher wages to be people for quick hire, and I'll slow hire and train for expertise here and homegrown them, then you can solve your labor shortages. Absolutely incredible. I love that. I'm actually going to listen to this several times. So that's just incredible. I'd love to talk to Jimmy Hiller, too, about that training process. It sounds absolutely phenomenal.

I love the idea of getting the military involved, too. It's genius. Because, you know, the average plumber, I've heard stat that is the average plumber age is about 46 years old. And there's there's a big shortage of new people coming into the home service niche. And that's just a genius way to get some of these millennials involved. So absolutely extraordinary notion on that. Tell me now if we could go a little bit into the pay on how you have learned the best way. Is it performance? Is it hourly? Is it a mix? What have you noticed seems to be the best over the last 30 years that you've been in this?

Well, I know we'll get a lot of anytime you start talking about compensation, there will be a whole lot of controversy. And what I will share with you, I've seen just about every compensation program over the years. And you are correct with your assessment of commission brings its own set of challenges. Hourly brings its own set of challenges. And there was once a time where, you know, we were straight hourly. And then it moved to hourly plus commission, then it moved to commission, and then the commission went to, if you will, piece rate mill work. And I believe we're back to a scenario again today that is entirely different in today's world. And let me preface what I mean by that is, I think we are back to that scenario again

to where it's back to where we opened our discussion on the passing our costs on to the consumer and not managing effectively. So we were big proponents of commission and hourly wage. Today, my belief is with Price Fixer, in fact, we're starting to tell the community and the world about it on how much commission that salespeople make. And many technicians are not even technicians. And I'm not saying that's true with every company because it's not. But I can go into virtually any marketplace and there will be multiple companies that are putting technicians that are not technicians.

They're really salespeople in disguise, and they're paying them commission to go in to tell the homeowner, I can't fix your problem. Your problem needs to be a new system. And their rationale is, hey, I'm only sending this salesperson disguised in a technician uniform to homes that are 12 years old or older or 15 years or their equipment is 15 years or older. But that still doesn't, you know, make me feel good because it's still ultimately the homeowner's choice on whether they want it repaired or whether they want it replaced. And so I think there's been a lot of abuse in the in-home service world today by paying commissions. So we're actually modeling price fixer towards a straight hourly wage, and it's a higher hourly wage than most individuals are being compensated with hourly and commission combined. And our rationale is, hey, why not just go out and hire the best people, track the performance, which today it's easy to track the performance. We've got proprietary software where we can press a button and we are tracking 40 productivity numbers on a technician. We can track how many callbacks they have.

We can track how many hours they were on the job. We can track how many callbacks they have. We can track how many hours they were on the job. We can track their labor productivity. We can track their parts productivity. We can track their accessory productivity. We're tracking all these different modules, and we just made the decision we're going to pay a higher wage. We're going to hold our people accountable to technical issues that are technical competency, And that's how we're going to go to marketplace. And because they have fewer callbacks, they make fewer mistakes, they can do the job faster. We can afford to pay them more. And it's a good scenario for the customer. It's a good scenario for the technician. It's a good scenario for the company. Because, and it's not your question exactly, but I'm on this tangent, Tommy, if I can keep rolling here.

Yeah, no, I love it. Keep going. I think too many companies put too much emphasis on our 100% satisfaction guarantee or 100% money back guarantee. And see, I think it's a cop out. And what that is, it's a way of saying, you know, I understand I have better salespeople than I have technical competent technicians. So therefore, I'm going to offer 100% money back guarantee. But I'm factoring in how many callbacks I have, how many dollars I have to give back, how many complaint dollars I have to give back, I'll factor that into my prices, and I'll just raise my prices even more. Where it's easy to give money back, it's not want to write as a consumer, they don't care that you give their money back.

They're upset that you did it wrong. They want you to come out, do the job, do the job right, and get out of their house. Not to stand behind your work and come back two or three times to make the repair right after two or three times you should have done right the first time. So we're putting the exact opposite back on technical competency and hourly wage and managing the process. Now, why do most companies not want to do that? Because managing labor is difficult. No question about it. And that's what's led to commission. It's what's led to piecemeal rate. It's what's led to commission. It's what's led to piecemeal rate. It's what's led to all this because you don't have to manage anymore. You just tell the technician, hey, you go generate $1,000, I'll give you $200 of it.

How much management goes into that? None. And we don't think that's right for the consumer anymore in today's world. And we're coming out with some very strong messages on educating the world that those people sitting technicians disguised as salespeople never pay a commission again. I think there's several takes. Like you said, it's very controversial.

I'm a big believer. This kind of throws me into the next loop of technology. I use, you know, I know in the HVAC world, successware is what's typically been the bigger one. But I use a company called Service Titan, and we're obsessed with it. We're on the phone several times a week. We're innovating. We're using all the new technology. And the fact is, I know exactly how long you pull up to that job. I know exactly every single thing there is to know, not because I'm spying on you. It's because we're going to be better at dispatching. I know my customer gets a Uber-like feature that shows

them where the technician's at. They get a picture of the technician. Our guys show up in a wrapped truck. I'm obsessed with the crm you know i just think you can't run a successful business without knowing your kpis i want to hear your take on that because i don't think you could run even your platform you're rolling out without having really good technology tell me a little bit about that well you're absolutely correct and we know a lot of the same people in fact uh i've got a conference call tonight with ara so you probably know him oh yeah yeah i'm in a podcast with him in january but i was just there with him two weeks ago so amazing guy yes he is so yeah we're we're using service titan as well and they've created modules specifically for our needs and individual purposes that you can't get if you're not in our

organization. And, you know, I can only go by R's words, but I know that when we sat down with him and we started formulating and laying out, he was sitting here scratching his head going, I can't believe this. He said, I work with virtually every big company in the United States that's a service provider. I work with all the best practice groups, and no one has ever asked us for the info you're asking for today. And I laughed, and I said, I'm not surprised. But today's operational business is not the same business we were operating 10, 20 years ago. And are you aware that Jim Abrams is the guy who created SuccessWare? I did not know that.

I know that it's the industry standard, though, and I know a lot of people, including Direct Energy, has been on it for a long time. Yeah, that was our software that we used back at the prior organization and service. Well, it started at service experts, started actually a contractor success group. And that was me and more dating myself. Now it started as a golf program. And yeah, Jim, when he was retired, the makers of success where it came down and that was back in the 90s and said, hey, I'll pay you $10,000 if you just meet with me, Jim, for one day. And Jim got excited about business that day, and he ended up designing and laying out what they should build Successware to be from a management perspective on how to operate a big business. And Jim, at the end of the day, said, you can keep your $10,000 if you want, and then I will endorse you

and I will make it part of my next group, but you're going to have to give our next members a very special price. Or you can keep, or I can take your $10,000 today. And they said, we'll keep our $10,000, Jim, and we'll take your endorsement. And that became our software of choice. Amazing. Amazing stuff. This is so fun for me. I love this stuff, Terry. But as you know, it's a new world and there's new technology that exists. And, you know, in our estimation, out of all the research development, we interviewed Jimmy Hiller and I interviewed virtually all of them.

And Service Titan ended up being the ones who could deliver what we needed done. Good stuff. So I want to add a concept because I understand what you guys are doing and I'm a big fan of it and the marketplace is shifting. The one thing that I will say is I invest, I consider myself a marketer by trade. I mean, I do search engine optimization. I work out pay for performance deals with Gannett and radio stations and newspapers and all kinds of stuff. And I don't think most people understand that this day and age, you have to do a lot of marketing because even if people love the concept of what you're talking

about, Terry, they need to know who you are and how to get that service. So number one, that's really, really important. Number two is I feel like I've differentiated A1 garage doors because parts on a garage door are rated on a cycle life. Each time the door goes up and down is one cycle. So most companies use between 5,000 and 10,000 cycle parts. Well, let me ask you this, and I really want to hear your answer to this because it's all in the eye of the beholder. You buy a 10,000 cycle spring for 200 bucks, two springs installed. Now, if I could offer you an 80,000 cycle LifeSpring, that's going to last you 30 years. You're never going to have an issue because it's 80,000 cycles. It's a mathematical

equation. It's powder-coated red. It's called Max Life. Now, I don't think I should charge you eight times that price. I don't think you should have to pay $1,600. But do you feel that I would and should be able to charge more for that product that no other company that I know of today is offering? Because I've differentiated. I'm selling you a product. It's like selling you an air conditioning that you guarantee will not break. But it's mathematical. It's mechanical.

It's not electronics. So you could really know that. What are your thoughts on that? Well, I'm a big believer that the marketplace determines what the fair value is in a market. So I do agree that you have a competitive advantage. You have a unique product. You have something they can't get anywhere else. So yes, that warrants additional money.

I agree with that 100%. I love this conversation, Terry. Let me ask you this. I've been learning a lot about acquisitions and I've acquired a company recently and I'm gonna plan on really growing my business through acquisitions because you said earlier, you get a training center, you steal your competition

and I believe you acquire good companies that you can make into great companies. I talked yesterday or actually two days ago to the COO and president of HomeAdvisor who just acquired Angie's List. And they've grown their company to an incredible, just enormous company by acquiring companies and affiliate marketing. So tell me what your thoughts are about buying out other companies to grow and acquire. It's growing through acquisition. Yeah, we're big believers in growth by

acquisition in fact uh jimmy healer and i we did a acquisition webinar for the goodman manufacturing people folks and so there's lots of reasons to do acquisition i mean first of all you you hit a very powerful reason, number one. If you're lacking technicians, the number one way to go get technicians is identify who's got the best technicians in town and go acquire that company. And you just gain their technical competency. So that's a thorn in your side and they're a worthy opponent or competitor, however you want to look at it, you just eliminate the competitor when you acquire a company. And sometimes it's actually worth it to overpay for a company to get a competitor to disappear out of the marketplace. And so there's a second reason to do acquisition. Number three, and most business owners don't think this way, but you talk about advertising, Maladon, and you've got to advertise the importance of it. Sometimes you can actually, in fact, not sometimes, the majority of the time, you can actually grow more through acquisition than you can through advertising. Meaning, if you took that $300,000 that you could go acquire a very small

competitor, and I'm just throwing a number out, versus if you took that $300,000 and put it in advertising, you will probably do more revenue off the customer base of the acquired company. There's a fourth reason. And I can't remember what the fourth reason is. I'll stop my head.

My mind went to Hawaii there for a moment. Yeah. Well, if you think of it, because I'm going to stick on this because I got a lot of questions and I'm learning a ton from you, Terry. And I really appreciate your time today. I just met with my lawyer yesterday. He does all my patent, copyright, trademark stuff. And he's been growing super quick. I mean, he's built a machine on acquisition and he pays nothing up

front. And I think in a blue collar industry like garage stores or HVAC or plumbing, I'm not going to say that it's a ton different than a white collar and I'm not belittling anybody, but I do think for the most part, people are more short term. They want to see what I could get today versus over five years. Now, the goal of an acquisition, if you're going to sell a company and statistically, I've heard that seven out of 10 baby boomers will be selling in the next 10 years. So it's an important stat because I think there's going to become more availability for more companies than there ever has. And you need to know how to do succession planning. And it's a huge topic. But he said what he does is he pays a percentage of the complete billing for two years at least. He pays a salary and he pays a percentage.

And then they'll go in and they'll make the company super powerful. They'll help them do all the billing, do all the other stuff. They do tracking, advertising, marketing. And it's a great program. And it makes sense for them because they can make more money than they've ever made. And then he also lets them keep all their accounts pay a receivable. So he says your AR is yours. You can collect it. So he does a lot of stuff like that. Tell me in your opinion, because what I'm trying to do, I'll roll out my plan real quick. I'm going to get in every trade magazine. I'm going to be promoting it all over the website.

I'm doing email marketing. I'm going to send a postcard to every garage door company in the United States. I'm going to do retargeting Facebook ads. I've got a whole list of about 10 different things I'm going to do that are actually quite affordable. And so first, they need to know that I'm looking to buy. Then they need to know how the process looks, right? We do a mutual NDA. I need your tax returns for the last three years. I need all your advertising sources. I want to figure out your biggest clients. You know, I'm not interested in Home Depot. I want to look at your website and some of the KPIs in that. And then I want your phone records. I want them to understand the

whole process and I want to have a plan behind it. So my goal is to have all these people inquiring. And a lot of people are just like, just take it. Like, give me this money for my phone number. I'm just done. Tell me a little bit about setting yourself up to grow by acquisition and some of the things you think that I need to be aware of and everybody else out there that wants to grow a business from 10 million to 500 million? Because you've done it, and this stuff is literally gold to me. Well, I think there's two factors that you have to look at because there's two types of businesses.

One I would look at as what I'll call a tuck-in acquisition, and then the other one is what I call a hub acquisition. All right. So let's start with the easy one first. You're in Phoenix today. There's probably a lot of guys that are in the garage door business that are probably getting crunched by you. Their profits are probably down by you. They probably don't know how to do digital marketing like you do. They probably don't have economies of scale, and they're probably reaching that point to where they're ready to throw in the towel. Well, you don't need another operation person. You don't need another operational office. You don't need another call taker. You don't need another accountant. You don't need

another office manager. You just need to tuck that business into your existing Phoenix location. Does that make sense? You understand? A hundred percent. So when you're looking at that type of company, you're not going to pay very much money for it because you don't have to, because that's always the decision that you as a business owner have to make. And I know, and it still happens. Every time we do an

acquisition webinar, somebody will call us after the event. Usually it's not somebody, it's a whole bunch of people. Well, just give me a standard formula. There is no standard formula. A business is worth what someone is willing to pay for it. If your house is a $200,000 appraised house, but you can't sell it for anything under or more than $100,000, then the house is worth $100,000, right? 100%. So the same is true with a business. So who's going to come by and give this small, struggling business much money? Not many people at all.

So therefore, you're probably not going to pay much money for that because you don't have to you could just probably target his customers his area and you could probably take his business away from him so anything that he gets is better than nothing all right so there's acquisition number one on the tuck-in. And that's probably asset value. And if there is some goodwill, meaning if you want one or two of their good technicians or you want that specific business owner to stay with you, then maybe that's a salary involved.

But as far as any money at all, it's really asset value. Now, the other one is a hub. It's an entirely different location. That's you're in Phoenix, and you want to go to Seattle, Washington, and you don't have a location. And you're looking for a place, and you're looking for a team that can operate and start day one and manage this business and implement your systems, your procedures, your method of doing business. Now, that has value because now you're opening up a hub location. Now, when you're looking at a hub location, now, there's two schools and trains of thought here. Based on what you shared with me on how your individual was that is structuring their deal,

they're structuring it for the lowest tax consequences it sounds like, which I'm in favor of that. However, there's also some word of caution on here. The majority of the time, and I can tell you from our past experience, and we've used acquisition in the service expert business, We used acquisition at Clockwork Business. We grew our companies through acquisition. We made the decision we didn't want the business owner to stay in the business. And with rare exceptions, the business owner was actually asked to leave the day we acquired the company. And the reason why is because this guy, you know, now let's go back to service experts days.

He's already been a successful business operator for 15, 20, maybe 30 years. You just line his pockets full of millions of dollars. Now, how are you going to motivate that individual to come to work and follow your systems and procedures, knowing that he's now an employee where he's been a business owner and his pockets are lying full of money. Very difficult to manage. So we wanted systems and procedures in place and we didn't care whether the business owner wrote off into the sky or not. In fact, in most instances, it was a blessing if he did or she, because now we were able to inspire the management team, and they were able to move up. We were able to put them on a management and CIMI program based off growth and profitability, and it was a way to inspire them to implement our systems and procedures.

And so with those, we would traditionally pay asset value plus a multiplier of earnings. And the multiplier of earnings, you know, it varied once again by how profitable they were, how big a company they were, what the market opportunity was. And, you know, it could be anywhere from four to seven times earnings. So EBITDA, the profitability, and I've heard different stats. I heard two if you're under $10 million. I heard up to seven if you're over $10 million. And I heard when you reach that $100 million, you could get 10 to 12 times EBITDA,

plus your assets. But what are your thoughts on that? Well, it's really we're back to competition again. Who's your buying competition? And in today's world, in the HVAC, I only know two companies that even look at acquiring a company or will look at acquiring a company. And they only want big companies. So if you're not doing 30, 40, 50 plus million, they're not even interested in acquiring you. So now that you have no competition in acquisition, there's not really a multiplier at that point in time.

And I don't know the garage door as well as you do, obviously, but I can't imagine there's a whole lot of acquisition buyers out there trying to acquire garage door dealers. Are there? No, there's not. And surprisingly enough, people have sold and they're getting some decent money. But you can't sell blood, sweat, and tears. And you can have this fictional number. And a lot of guys do. And their books just don't.

They say, well, I haven't really. I got my own cash books. They don't understand that their business is really not worth what they think it is because they've been working in their business. And if you take a salary of $100,000 a year that an owner probably pays himself or more than that even, and the little – the lunches, the cell phones, you add in all the stuff, the utility at their home and the kids tuition and you pull all that out of it. It's got some worth. But the fact is that a lot of people don't. The reason why I want to buy out of business is because of the employees and because they've been around for 30 or 40 years. They got stickers everywhere. They've made a good name in that town or they've got a killer website and I could pour a little secret sauce on it and make it rank number one very easily. But it's definitely not, hey, I want to buy your business. You're doing Valpak and Money Mailer and you're spending a fortune on advertising and you got a couple good technicians because I could build or I could just grow organically in that case.

So very interesting topic for me because I just had that meeting. And I think I definitely want to talk to you more in the future about that. I'd love to look at that webinar someday. But, you know, I'm obsessed with technology and my brother in law's a vice president. He's pretty high up at GE. He manages several thousand people. And he told me, Tommy, there's going to be no such thing as a COO soon. And he goes, I know this because I'm involved in it. And I said, what do you mean? He goes, CTO is what it's. both of those, the technology officer and the operations officer. But the technology is becoming so important to run operations that it's almost like without it, you're going to, and I hate to say this, but without a good CRM, I've got the ultimate advantage over you. If you're still on paper, I know where my guys are at. The customer experience is 10 times better. I mean, it's priceless. I mean, Service Titan's building an artificial intelligence. They're building in all this stuff to do accounting. It's going to

talk to the bank and reconcile stuff for you. I mean, there's no way the payroll takes a couple hours versus, you know, my payroll is 125 grand a week. So it's not easy to calculate everything. But with the systems, it does. So what are your thoughts as far as the people that are not using a system yet, and they're not using a CRM, and they're still stuck in the old school thoughts? I mean, how do you feel about that? And what would you say to those people that are listening? Well, knowing that I have a fond affection for any hardworking in-home service provider, it's, you know, I have empathy for them because I understand how comfortable it is to operate on paper. I understand that it's a process that you've been doing for years this way.

I also understand it's probably the relative or spouse that is doing the payroll and the processing of it. It's something that you trust. But I echo your sentiments. You're going to get left behind, and you're already behind. And you need to move into the 21st century because that's the century we're in. And you're at a very, very severe disadvantage if you're not capitalizing and utilizing technology to operate and run your business. And I've been there. I get it. I understand it. It's easy to look at and say, you know how much they're going to charge me per technician or per user? Right. But the one thing that you got to understand is that user doesn't ever call in sick on that device. Accountants

call in sick. Technicians call in sick. You know, and so you're going to pay one way or the other. You're either going to pay with higher labor rates to do things manually, or you're going to pay with fewer people and pay a little more on technology, but the technology will be more reliable. So it's just unfortunate, but you got to make the move i love it that's what i've been preaching for the last year or two is also i'll tell you this if people jump on the same crm i'm using which is service tightener there's a lot of good ones out there it makes it a lot more

appealing for me to want to buy you because i'm saying the guys are already using the ipads they already know how to use the system this should be a very easy transition for me. So I, you know, I endorse Service Titan. I'm trying to get as many garage door companies on there as possible. I'm trying to help out my competition. It might sound crazy, but in hopes that one day we could, we could either team up. And I say the word team up because if you're younger and you want to stay on and work in the business and keep a percentage of sales, I'm open to that as well. And I don't know, I'm going to talk to you a lot more about this stuff in the future, hopefully, of what you've learned over the last dozens of years acquiring companies. But I want to get to one more thing that I like to do. You've given me a lot of your time today. And like I said, I'm going to pick up the book and really dig in and learn a lot more about what you've done. And it's super impressive.

Let me ask you this. Most business owners, you're either growing or you're sinking. What would be the action plans today that you'd say really are going to make a big impact on what's going to happen over the next 10 years? You know, Google's getting bigger, HomeAdvisor bought Angie's List, Amazon's now in the home service game. What do you think we need to do as business owners to really have a competitive advantage over the other people in the industry to this day? And what's going to happen in the near future? Well, that is a big question. And no one really knows what's going to happen in the near future? Well, that is a big question. And no one really knows what's going to happen in the future except the one thing that we know for a fact is going to happen is change is going to happen.

And that's the only thing that we know for sure. I personally think that you're going to see a lot of commoditization take place with the in-home service products. And it's unfortunate. It's just the way the world has operated. And I know no one wants this, including me, wants to hear this conversation. But it's the reality of it. I mean, think about the automobile industry today. If you wanted to know what a brand new car, any model costs today, where would you go to find out the cost of that model? You'd go on the internet. If you had a five-year-old car with 60,000 miles and you wanted to see what the trading value is, where would you go? You'd go to the internet. If you wanted to see virtually anything, a price can be established on what it

is on the internet. All right. So if you look at the trends, you'll see that products have continuously decreased on in-home service providers. So that's why Amazon's doing it. You know, 10 years ago, well, let me go a little bit further than that. You didn't have to worry about it if someone wanted to know, well, if you were a plumber, so maybe 15 years ago, maybe 20, but if you were a plumber and you said, my cost to install this garbage disposal is X, you never had to answer how much was labor and how much was parts. When I used to sell heat and air conditioning equipment in the home, I got asked every week how much is the equipment and how much is labor. And I never had to answer it because they didn't have the internet. They couldn't go on there and find out the price. Once consumers start identifying the price, it starts the commoditization of that product.

So what that means is so many in-home service providers have relied upon the margin of their markup on equipment, and that's not going to be where you make your money in the future. You're going to make your money off of labor and the ability to manage labor effectively. And if you don't learn to manage your labor effectively, which means reducing callbacks, which means technical competency, which means the ability to install it faster. If you don't do that, you're not going to survive the future. And I'm sorry, that's just the way I see the world heading. And those companies who build a solid technical workforce of loyal, reliable technicians, and I do believe they're going to have to brand themselves. Branding still wins today.

They're going to have to mean something in the marketplace. So there's where I think the future is, because I can go on Amazon today and buy virtually any in-home service product available. True? Yep. Yep. That's where it's heading. And I don't have to pay a retail markup on it compared to what an in-home service provider is going to charge me. Yeah, yeah.

You know, Terry, I'd love to do this again. I think we just scratched the surface on a lot of things. And now that I spoke with you pretty deep, I think I could come up with some really amazing questions. I really enjoyed this. And I think you're right about the marketplace. I have my own problems with the Amazon and some of the things that is going on out there because the quality, a lot of this stuff comes from China. If you're comparing apples to apples,

the question I have is you're not just paying for the price because price is only the ninth thing that people care about, believe it or not. I mean, there's all kinds of studies out there. And that's one that I subscribe to. They care about, is it going to work? Who's coming into my home? Is it going to stay working? Because time, I think, is the most valuable thing in people's lives. If they can't get out of their garage, if their air conditioning breaks down every summer in Arizona, and it's 120 in the house, they can't get time back. And they can't take off work every day. So I don't know.

I'm going to think a lot about that, though. I think you've got a great thing you're working on and I hope you'll come back on. I've learned a lot. And was there anything else you wanted to cover right now? No, that sounds great. I appreciate giving me the opportunity to visit with you and your viewing audience here. And I think there's a lot of things that you and I should and can talk about in the future because there's some things that you're doing that I think I could probably help you with that perhaps we may want to explore together as well. All right.

Listen, I really appreciate you being on today. I learned a bunch and look forward to you coming back on. Okay. Thank you. Hey, guys. I just wanted to and look forward to you coming back on. Okay. All right. Hey guys, I just wanted to say thank you for listening to the podcast. And I wanted to talk real quick about the new book I have coming out in November. It's called the home service millionaire. And I discuss everything it takes to hire the right people, train your salespeople, how to get tax breaks. It talks about how to sell your company for the most amount of money. We've got a lot of great contributorships coming on.

Everybody from Paul Akers about how to go lean to how you do sales from enterprise, how to get the best write-offs in the industry and save a ton on taxes and actually make your company look more professional. I got the CEO of Service Titan. I got the CEO of Valpak. We've got great people on here that know everything there is to know about marketing and Google. And there's basically no secrets we left out of this book. Literally, there's people that have read it so far say,

I cannot believe you're giving all this information away. And the reason I did that is I just feel like you guys could just take each one of these gold nuggets and run with them. I mean, the ultimate goal of the book is to make sure that everybody is successful and makes money. If I could contribute to your lives, then that would be amazing. And I feel like it's the least I can do. And I really appreciate listening to the podcast. I hope you enjoy the book. Go to Home Service Millionaire. That's homeservicemillionaire.com and pre-order your book today. Thank you.