The Home Service Expert Podcast - Uncomplicating Accounting to Take Control of Your Business' Future

Episode Date: May 24, 2019

Ellen Rohr is the President of Zoom Drain, LLC.  She is an expert on organizing your business and franchising, specializing in accounting. Ellen is a successful franchisor, helping launch a plumbing franchise to 47 locations and $40 million in sales in under 2 years. In this episode, we talked about accounting, motivating employees, franchising...

Before we get the podcast going, I wanted to let you guys know that the Home Service Millionaire book is available now at homeservicemillionaire.com forward slash success. And it's for free. All you got to do is pay for shipping. It's homeservicemillionaire.com forward slash success. And it's a hardcover copy. And I put a lot of extra things in this book. So please be sure to order your book. And I also made it available on audio. Go to homeservicemillionaire.com forward slash audio and download your own audio book. Thanks. This is the Home Service Expert podcast with Tommy Mello. Let's talk about bringing in some more money for your home service business.

Welcome to the Home Service Expert, where each week, Tommy chats with world-class entrepreneurs and experts in various fields like marketing, sales, hiring, and leadership to find out what's really behind their success in business. Now, your host, the Home Service Millionaire, Tommy Mello. Welcome back to the Home Service Expert. My name is Tommy Mello. Today, I have a guest that's already been on the show. Super excited. She's awesome. She's my hero. Her name is Ellen Rohr, and she specializes in accounting. She's in the plumbing business is where she started with her and her husband, and now she owns a company that specializes in plumbing. It's called Zoom Drainage.

And I'm really excited to have Ellen on. She knows everything there is to know about organizing your business. She knows about franchising. It's going to be fun. All right, let's get going. So Ellen Rohr, we got you back on the podcast here. And I've got a chance to work with you since the last time you've been on. Yep, yep. You are an amazing lady. Tell us a little bit about time you've been on. Yep, yep. And you are an amazing lady. Tell us a little bit about what you've been up to lately. Oh, I've got so many exciting projects. I'll move fast.

One is Zoom. You know, I'm growing a franchise with your buddy Al Levy and Jim Crenitty and the Crenitty team in Philadelphia. And we're up to 11 locations. Our next big milestone is 100 million in sales. We're not near that yet, but we're on our way. I love the team members that we have.

And so that's exciting and it's taking a lot of time. I'm also working with a friend of mine, Howard Partridge, who I think would be such a good person on your show. Have I introduced you to him? You have, you've mentioned him several times though. I'd be awesome. He's just got a dynamic personality. And I work with him and his group.

And I've been doing some webinars. I also work with Joseph Harp Correctional with a bunch of inmates who are growing businesses from inside the institution, blowing my mind. So I'm doing a webinar series with them. And do you know I'm going to speak at Pantheon this summer at Service Titan? Oh, I didn't know that. Yeah. I'll be there.

Yay. Well, of course you will. Pantheon is a really great event. In fact, we're going to make a Zoom event out of it. I had such a good time last year and I'm very happy to have them as partners and I know you are too. So I've got a lot of stuff cooking and not the least of which is podcasting with you, amigo. Thanks for having me. Yeah. I've learned so much since last time we had a podcast and you actually came in with your sister, Gail, and taught us how to do a financial quick check. And I think for me, I hate going to the doctor, not because I don't like the doctor, but because I might not like the outcome, you know, like I'm pretty healthy, so that's not a big issue. But at the same time, I hated looking at a balance sheet,

maybe not because I hate balance sheets, but because I spend more money than I even know. And tell me a little bit about how to come over that and what you've taught me over the last, I guess, six months. Oh, you know what? You are not alone in that. And I wasn't either. Let me just start with my journey with this. Once upon a time, this is going way back. I quit my real job. I went to work with my husband, the plumber. I had a lot of business experience, a lot of work experience.

I'm a smart chick. I graduated at the top of my class with a degree in business administration. I thought I knew something about business and finance and accounting. Then I got seriously humbled. And I'll tell you what happened to me. First of all, the books were a mess.

When I jumped in and took over, they were a mess. And in school, they don't start with financials that are a mess. They start with financials that are assumed right. So even if you think I could go back to school and I could take an accounting class, that's not how I figured it out. I loved college. I don't want to dismiss higher education. But the path I went through is I had to jump into it, find out my books were a mess, and get over all the emotional crap that was going on that kept me avoiding it. That I'm too creative, that I like to have fun, I'm dyslexic. They didn't use the word in those days, but now I'm self-diagnosing. I just did not want to do it. But we were starving. Once I left my real job,

went to work with my husband, we didn't have my salary. We didn't have my benefits. All of a sudden, the two of us are trying to take money out of this company and none of us are making any money. So luckily, I met a mentor. And that's why I'm honor bound to help others and to be on your show and be of service to you and so many other contractors because this is such a common problem. But my mentor is Frank Blau. My first great business mentor was Frank Blau. And he's the one who taught me that I had to figure out my asset from my elbow, Tommy. And I didn't want to do it.

I am so relating to what you're saying. I didn't want to do it. Can't somebody else do this for me? Why do I have to do it? I'm not good at it. But in my case, unlike you, in my case, we were so broke that I couldn't afford anybody to do it for me. So the bad news, good news of that was, the bad news is I had to handle it or it was not going to get handled. And the good news of it was,

it wasn't that hard. Once I stopped fussing about it, once I just sat down with the primer that you get with the accounting program, like there's a quick start guide to the accounting program. That's how I learned what double entry accounting was. I started to study up on it. I found people who knew what they were doing. My sister, Gail, who is an accountant, was super helpful to me. My accountant was really helpful. I had some really great people.

Frank Blau showed me his financials. We went line by line through him and he taught me, this is your asset, this is your elbow. Defined the words, used his own financial reports to teach me the basics. So once I got my arms around it, two really cool things happened to me. And this is what I hope, this is the path I hope you're on.

Number one, it is not that hard. It's just a course of study. It's easier than golf. It's easier than marketing. Oh my. It's not that hard. There's some weird words and you need some help, but figuring out the money is not that hard. And number two, because I did, because I went through that path, because I went line by line down every account in my balance sheet and profit and loss. I will never be bamboozled. You cannot bamboozle me when it comes to financial reports because I will ask the question, what is this?

What do you mean? It's gotta be an asset liability, equity, sale or expense. There are only those things. I just will ask the questions until someone explains to me what that is. And that has been worth millions of dollars to me. Yeah, it's massive for what it's done in the short period that I've cleaned up my stuff. And I don't think it's perfect yet. But we're in 12 states, 20 markets. So it makes it, I don't want to say complex

because it's not, because what you do is make it so simple. But- Yeah, and even in those 12 states, like the basics apply, it gets bigger, but it doesn't have to get fancier. You know, a balance sheet is a balance sheet in any country in the world,

in any dollar, in any language. The balance sheet was crafted by Luca Pacioli in the 1400s, friend of Leonardo da Vinci, this monk who just figured out the basic accounting equation, assets equals liabilities plus equity. He figured out debits and credits. It hasn't changed at all since the 1400s. Once you get the basics down, what's cool is they always apply. And that's why I feel so strongly that I won't be bamboozled. I should be careful, never say never. Somebody could probably pull the wool over my eyes, but only if I stop paying attention. I stop paying attention. And so if you pay attention, if you learn the basics, you're going to be a better financial manager. And Tommy, whose money is it?

Whose money is it? It's my money. It's your money. So your responsibility is to know where it is, where it goes, where it comes from. And all of that is found on the balance sheet and the profit and loss. There's only really two reports.

The other reports are all subsets or mashups. That's easy. So I'm looking at this nice book right here and I got your beautiful face on it. That's my high school graduation picture. Yeah, it says, where did the money go? So I bought all your books. I've got where did the money go?

How much should I charge? And then bare bone business plans. And, you know, I'm in the warehouse business right now, but I'm exiting the warehouse business because we don't. Oh, that sounds like Al Levy right there. Well, yeah, it's totally. I didn't realize, you know, and I've been talking about this a lot is

I was paying for a warehouse in 12 states, 20 markets. I was paying for theft insurance on the warehouse. I was paying for all the bills that came with that warehouse. I was paying for an employee to run the warehouse. I was paying for their truck to go pick up parts. I was paying for insurance, health insurance, theft, shrinkage, spoilage, batteries die in the summer. You know, I didn't have any idea. I thought if I bought a thousand pieces at a time, I was saving money. And I think that I've grown. I don't necessarily believe everybody should exit the warehouse business, but tell me a little bit about that because I spent a lot of money that I didn't even realize I was spending. Well, this is a complicated... Well, none of this is super

complicated. This is probably if figuring out your balance sheet and your profit loss, getting the chart of accounts, if that's finance 101, I would call inventory finance 102. And I'm always trying to get finance 102 down to 101. And inventory is a good topic for that. So one way to handle inventory on your accounting is to buy it, like you said, house it, call it an asset. And then as you expense it, you're gonna move it to the profit loss. You're gonna move it from an asset on the balance sheet

to the profit loss. And as we've talked before, that makes it more complicated. That flow of data throughout your accounting system makes it more complicated. Add to that, throughout your accounting system makes it more complicated. Add to that, that there's a lot of different parts and a lot of different part numbers, and it's easy to confuse things and it can get wrong quickly. So I'm not a big fan of trying to create real-time inventory as previously discussed. Over my life, here's what I found as an easy solution. And it sounds like this is the

direction our conversation is going. I have found some really great opportunities to partner with people who are in the warehouse business, like your suppliers or manufacturers. So if you can partner with them and have them do the housekeeping of where the materials are. And then you can get those materials delivered as needed and where needed. Then you can simplify the accounting. And there's two things. Your customer pays for everything. So the costs are what the costs are. However, if you partner with a really progressive, aggressive manufacturer, supplier, or combo. These guys want people like you who are going to buy a lot of material and you'll probably get some good pricing anyway. So where are you in this process? I mean, I just kind of gave an overview of what you could do,

but where are you right now? So I met with the largest distribution center in North America for garage stores and garage door parts. And we had to make a lot of concessions. We carry, for example, an inch and three quarter springs. We're switching to two inch springs, different types of rollers, different types of bottom rubber. But overall, they came in on a lot of items lower than I was already paying. And I met with the president, the vice president, they came to play ball and they came in way better than I could have ever imagined. So we've rolled it out now in three states. It's going nationwide. So now we're going to be driving to every state and picking up all

the inventory and bringing it back to Arizona to get rid of. So it's amazing though. It's saving us so much money and I'm out of the warehouse business. Well, let me point out something cool that you're also doing. Just because I know, because I've been on this journey with you a little bit. It takes a big man, it takes big people at your company to change direction like this. Because I know a lot of time and money and energy went into the previous way you were doing business. And so often I see this, like my friend Howard Partridge was saying the other day, why do you think people fail to implement? How do they get stuck? And I think one of the reasons we get stuck is that we are so invested in either a thought or an action or a process.

We have made it a struggle for so long that for us to set that baggage down and go in a new direction can feel like, did I just waste all this time? And I am here to encourage you that sometimes it takes doing just that. You know what, if this is that hard, why don't we look in a new direction and try something that's just completely different from

what we're doing right now? It's got to be simpler than a constant struggle. And that is, it's a big person who can do that. It says a lot about you and your team to be able to do that. So kudos to you, amigo, and to the rest of the A1 team. Yeah, no, it's a big step. I remember distinctly, I'm looking at the conference room right now. And listen, you looked at me dead straight and you said,

if you're going to fight me on this, I don't need to be here. So, and you were almost. I did? You did good. That sounds so tough. Am I that tough? You did good. That sounds so tough. Am I that tough? It's tough love.

It was tough. Well, but here's the thing. And I said this, you know, this is how I am anymore. I used to be a lot bossier than I am now. I think I'm starting to get a little... It doesn't really matter if we go the long way or the short way. If what you were doing was going to work, we both win. If what you were doing wasn't going to work, it would become evident.

So what difference does it make? But I just, I share my opinion, but it doesn't mean I'm always right. Only Al's always right. Only Al's always right. And you know what? Disgustingly, he is. That's what makes us crazy. Yeah, Adam fought you a little bit more than I

did, but I just knew even with service tight, it was kind of a battle because that's a big change at CRM. And I just said, I can't, I'm not excited anymore. I don't have the right reports. And as bad as the diagnosis was on the financials, we were able to turn it around so quick. When I knew we were losing money in Denver and Dallas, and I could go on and on. But here's the crazy thing. We're doing 36% in Milwaukee. I mean, that's crazy. And that tells me we can get there with the rest of the company. We're doing 31% in Phoenix. And then what I mean by the percentages is just profitability. And the numbers are pretty good now that we're digging in. And it's amazing when you know what's going on, what you can figure out. I mean, I thought I was booking 80% of the calls and service time doesn't do a really

good job of reporting on bookings because they've got some issues. So we uncovered that and that really helped out too. But talk to me about the known financial position. And what we do on Fridays now is we have your, what is it called? A financial quick check? Yep. Yep. So let's go into that a little bit. All right. Well, let's start with the known financial position. And just as you were talking, I had a couple of like little points to make. What we wanna look for, known financial position is this, that your financials are current, up to date, and my standard is once a week,

pretty darn good once a week, that everything is entered and you can look at the score on a weekly basis so that the financials are current, balance sheet and profit and loss are current, accurate, they're right, and that you understand them. That's what a known financial position means. And it's a journey. You're not going to be there immediately necessarily, but that's your path. You want to

move from, make decisions from a known financial position. So how do you get there? You start ask, ask, asking. So Tommy, what I did with you and just demonstrated for you as the owner of the company, if you're like me and kind of dyslexic, take a ruler or a piece of paper and go line by line down your balance sheet. Cash, you know, your checking account, your operating account is going to be the first asset on the balance sheet.

Is that number right? How do the numbers get there? How do we know that number's right? You're going to ask, ask, ask for every account. And some accounts are going to be right. A little smiley face next to them. Some accounts are going to be wrong. Put a frowny face next to them.

And some accounts, you won't even know what they are. What is this? I don't know. It's been there since 2008 when Susie used to work here. Remember Susie? Nobody does. There's going to be this weird stuff that you go through and you hammer out because everything on that balance sheet can be verified. Your assets can be verified. How much cash do we have? Well, if you don't know for sure if it's

right, go to the bank statement and see what they say and use their balance for starters. Later on, you may be able to find a mistake that the bank made, but in my experience, the bank is usually pretty good. And so start with their balance, go through the assets and verify those with your account, with your beam counters. Keep asking, how do we know this is right?

How's the information getting there? And then when you were talking about the reports from the individual locations, is it right is always the question every week. Wow, that looks really good. Is it right? Do we know it's right? Did we make a mistake? Is it terrible? Do we know it's right? Make sure that the accounting is right and you're following the flow of information from Service Titan to QuickBooks. There is a path of debits and credits that goes from whatever dispatch

and information software you're using, we love Service Titan, over to QuickBooks. And if that path isn't structured properly, the numbers are going to be bogus. It's a path. If your books are a mess right now, I would set a goal... If one's books, not yours, but if one's books were a mess right now, I would set a goal of having it tight and right by the end of this year.

Give yourself a little breathing room and just keep chipping away at it a few hours a week, sit with the bean team and keep nailing things down until you get it right. It doesn't have to be done instantly. You could move faster than that. But if you got it really great this year, that would be awesome. Yeah. Does that answer your question? I felt like I kind of got on my soapbox for a minute. No, no. This is going to be super valuable to the listeners because, you know, a lot of people ask me, the smaller businesses, you know, a couple trucks, they say, Tommy, when I talk to the bank and I talk to people, you guys talk about top line, bottom line, and all this gibberish. And I want to go into that because, and this is going to bring me into a compensation program. And I love talking top line, bottom line. So can you explain when contractors are talking

or you're going to sell your business, what that means? Oh gosh, there's so much to unpack here. I love that cliche anymore. Unpack, let's unpack this. First off, if you're talking to a banker, a banker can be an excellent resource for you learning about your financials. There's a great book out there called The Great Game of Business by Jack Stack, another one of my mentors. I love, love, love him. But he learned how to read a balance sheet and a profit loss through the process of getting turned

down for loans at his company. And he just started asking, why are you saying no? What are you looking at? What are these ratios you're talking about? Define your terms for me. So your banker can be a good resource.

Caveat, sometimes bankers are like 28-year-old kids who don't know anything. So don't be surprised at that either. Ask to talk to another one, right? Until you get someone who seems to know what they're talking about and takes your questions seriously. But a banker and your accountant and other business owners, these are folks who can help you decipher the language of accounting.

So for instance, in plumbing, you know, that's my world, there's an elbow and there's a 90 and it's the same thing. It's a right turn of a piece of pipe. You see where I'm going? Yeah. Okay. So a right angle of a piece of pipe. So in accounting, there's all kinds of different words for the same thing, like income and revenue and sales are essentially the same thing. Profit can be called profit or net profit or earnings or current earnings. So you start to think, are these different?

And they're not really. So you need someone to help you. You know, in the book, Where Did the Money Go? I put a little glossary together for just this reason to help you start to make sense of these weird words. So the top line is another word for sales, revenue, or income, just to make it confusing. And the bottom line is essentially profit or earnings. So just more definition of terms. So let me say this about business. So once you get your scorecard established,

you've got your balance sheet, you've got your profit and loss. When in the business of business, according to Warren Buffett, another hero of mine, in the business of business, your job is to grow the assets, get more stuff. Your assets, it's cash, it's accounts receivable, it's promise to pay cash. It's inventory that you can sell

and create profits in cash. It's equipment, it's land, it's stuff. Your assets is your stuff. And in business, we want more stuff. And we can use that stuff to make even more stuff. It's awesome. Now, there's three ways that you can grow assets. One is you borrow money. You get a truck. Assets

goes up and then the loan for the truck goes up. You borrow money to buy the truck. Okay. Or an owner puts money in your company. Either you or Barbara Corcoran from Shark Tank gives you a million dollars. Cash goes up by a million. And now Barbara Corcoran owner investment or paid in capital goes up. Balance sheet grows through other people's money, either a loan or an investment. Now, the third way to grow your business and the way that can fix everything is when you charge more than it costs for stuff and you create a profit. Just let this sink in on you a minute. This changed my life.

When you sell stuff for more than it costs, you create a profit and you manufacture money. It wasn't there, it's there now. And without strings, like when you borrow money, you gotta pay the money back. If you have an investor, they're gonna want their investment back. But when you create a profit, it to pay the money back. If you have an investor, they're going to want their income, their investment back. But when you create a profit, it's the company's, it's yours.

It's from nowhere. I mean, do you see how exciting that is? So if you're in a lot of debt, if you have a problematic balance sheet, the way to fix it is to create a really big profit and take that profit in cash. And so often, I mean, you may, one may have to declare bankruptcy. That's not the worst thing. They don't cut off your arm in this country, which is nice. But if you had to declare bankruptcy, you'd learn something from that too, because you have to get to a known financial position to even do that. But if you are on your way and you start operating from a known financial position,

and you decide to get really profitable, you raise your prices. That's what Frank taught me. You raise your prices. You control your expenses. You play offense and defense, and you create a lot of profit. And you take that profit in cash. You just might fix your business and you could create a fortune. It's so easy. That's why I'm on this podcast. That's why I preach like this. It isn't that complicated. I felt like when I started to figure out business, it was like emperor's new clothes. That's all there is? How come people aren't calling it like this? I mean, it's not that complicated. This is really quite easy. But we make it fancy. We get bamboozled.

Sometimes there's accountants or business experts who delight in fogging things so that they can look more important. I don't know why, but it happens. So your job as the owner is to learn this well enough that you ask great questions and you figure out where the money comes from, where it goes, and you're operating from a known financial position. Then you can make good decisions. Like you said, Arizona's doing well. And what else? Denver? Milwaukee. Milwaukee. First off, you make sure what you're looking at is right. Do we have

the numbers right? And if we are, then you go, wow, let's do more of what they're doing. Let's do less of what we're doing at the locations that aren't working. What are the few things that seem to make all the difference? And let's do more of that. Yeah, it makes a lot of sense. And it's, I will say this, you kind of avoid it till you get thrown into it and you have to start learning this stuff. But when I, I was, I went to Florida and met this guy, Keegan, he does a $50 million best home services, amazing guy, um, met his whole family, got to hang out at his business. And he was showing me his compensation programs and the way that they work is he goes off of top line, which is

a company's total revenue, gross sales. And they're mostly sales managers. So they can't affect how much we're spending on our electricity and how much we're spending on a lot of the stuff. So my financial guy I hired is more of a bottom line bonus structure. And that's how he does his as well. So he taught me a lot of, look, that way they got some skin in the game and he goes, they pay them on what they can affect. So my compensation program right now for my managers, so we're changing it, was $100 per guy you're managing plus a percentage of gross less parts. And it was not a win-win. When they want, they win if they get more technicians, but they don't care if their technicians are producing or not. So I had a really tough time. And I get this question a lot is how much do I charge and how do you know? And then how do you come up with compensation programs

that motivate people? And I'd love for you to talk about this because I know you've come up with several ways to reward the right stuff. To reward the right stuff. Well, let's talk about selling prices for starters. And I'm gonna make this very simple. And this might be a whole topic for another podcast to dig into this a little bit more. But essentially, what Frank Lau taught me

to do the Frank Lau selling price method is this. Add up all of your costs of doing business and divide it by the number of widgets you sell. And if your widgets are billable hours, then okay. And if you're not sure how many, you're gonna guess. How many billable hours do I have? Well, I going to guess. How many billable hours do I have? Well, I'm going to guess. So if you have a service, a company, very often, you're going to hear the number 50% efficient or out of 2,000 hours that I pay a guy a year, I could have maybe 1,000 billable hours.

All right. So I'm going to add up all of my costs of doing business and I'm gonna divide it by 1,000 hours per guy and come up with a break even and then charge more than that. Okay, that's Frank Blau's method. Add up all your costs of doing business, divide by billable hours and charge more than that for profit. Then materials are gravy

and that's what you were saying in Frank Blau's method, materials are gravy. Now at Zoom Drain, one of the good things and bad things about drain cleaning is there are no materials, which makes it a really elegant, awesome, scalable, profitable endeavor if you price it right. But what we don't have that you would have,

say with your garage doors, is that I can make more money on materials if I sell nicer materials for the same labor hour. But the way Frank taught me to price is to make sure that even if there are no materials, that for the skilled, essential, dangerous, awesome work that we do, we're going to make money. So we don't throw away the labor hour and try and make it up on the materials. We charge the right price for labor and the materials are gravy. Did that make sense? I kind of threw that down fast, but does that make sense? Well, you know, you co-authored the book and I've got it open right now. And you just say,

but be very, very nice to yourself. Keep the A's on all summer. Get the nicer computers. Have new trucks. And don't skip out on quality. And I think that's important because a lot of us, when I got into business, I bought a bunch of used trucks. And I'm like, I'm just going to wrap them. They'll look new. And then one day, true story, five trucks broke down the same day.

And it was, here's what happens with bad trucks. And I'm not going to go very deep into this, but some of my best employees were sitting at home because their truck was broke down. And the morale was very, very poor at the time because five trucks in a day. Well, I was not happy because two of them were, we blown the engines. One of them was a tranny. The other two issues were pretty simple. And all this stuff, I'm just thinking about, I really, now we're a sales machine. I mean, we don't take advantage of people. We've got a price book, which is so important for a company, by the way. And I'll tell you, with what you've taught

me with working with Gail is understanding where we're at and how to make a profit. So we started studying where are we making profit? And here's a cool thing. And I'm going to share something that my managers would kill me if I said this. Uh-oh. But we make a ton of money selling garage doors. We make more money selling garage doors than there's a lot of garage door companies that listen. But they don't sell many doors.

They'd rather sell service. So what I found was, and this is something I want to talk to you about. This is a good question. Okay. Way more per house by selling a door, but the margins are not as high. So let's say I'm making, let's say my cost of goods up just on the door, just the material cost is 35% versus a service call is only 9%. So I make a bigger profit for service, but 30% of $2,000 is 600. So I'm actually, without the labor, I'm making 1,400.

Okay, this is huge. This is a really good awareness. And I tell you what, in the HVAC industry, I feel like so many people miss this. The HVAC industry of all the dirty jobs, just to go to the trades in general, and what their average gross margin and stuff is. But margin is sales minus cost of goods sold, which is basically labor, material, and subs. Okay. So sales minus cost of goods sold or cost of sales, and it's labor, materials, and subs. Those are the three big rock expenses, right? And they're going to be variable to the job. This is how you're going to construct your chart of accounts. So sales minus cost of goods sold expressed as a percentage is called profit margin.

Expressed as a dollar is gross profit. So there's profit dollars and profit margin. So there's gross margin and gross profit. This is the middle line. It's the top line is sales. The cost of goods sold section comes next. And then we have gross profit and gross margin. And gross profit is dollars.

And gross margin is percentage. And what you're describing, I think, is like compounding interest. I think it's one of the great wonders of the world. Think about this, that even though the gross profit percentage may be lower when you have a lot of materials, that gross profit dollar... So the gross margin is smaller, but the gross profit dollars are bigger. So it's both. You got to pay attention to both. And ultimately, what ends up at the bottom line, that's after all and the percentage will be higher if you're paying attention to both gross profit and gross margin. So dollars and percentages matter. So for instance, let's look at an example. I have one guy for eight hours working on a job. And he just does a repair, so there's no materials. And my gross margin percentage-wise on that job is, say, 90%.

Now I have the same guy, same number of hours, but he puts in a really nice door. Say he puts in a $20,000 door during the same time period. Well, my gross margin on that guy's day may be 20 but the gross profit dollars are like 18 000 you see where i'm going i'm kind of making this math up as we go but there are dollars in there generated from the material that will affect that gross profit dollar and margin and you want to pay attention to both i wish wish I had a dry erase board right now. Let's leave that for questions. You can write me, ellen at ellenroar.com, and I'll answer your question. That makes sense, though. Are you following that? Does that make sense to you?

No, it's perfect. You're on the right track. So I'm just giving you the words to describe the phenomenon you're talking about. Even if the margin is smaller, the profit dollars can be worth it. Yeah. And there's a thing. So we started studying. What I do is I love a bell curve and I love looking at outliers. And I love studying the right side, which is the successful side. And we have probably five main things that we sell that are completely outliers. And one of them is my max life springs. And what we started to notice was our top performers, what they do and why they make so much profit. And so we started to coach

around that and it changed. I mean, this is on the last year. I mean, we've been, I will say, fairly successful over the last 10 years, but this last year has become extremely just by knowing our non-financial position and studying what makes this person or this market so, so great. And, um, we started seeing that there's something like, I'm sure for you, you know, for example, in air conditioning, like you said, you used to work for direct energy, but before it was direct energy, right? Yeah. So they have the largest service company in the world. And, you know, it's pretty cool that you got to see that work with Jim Abrams. A lot of people know that company, One Hour Air, Mr. Sparky and Benjamin Franklin. Is that the three that they? Yeah, that was, I was the president of Benjamin Franklin, the punctual plumber. And I did get a world-class education working with those guys and did learn a

lot from the HVAC crew too. I can ask you, so I can sit on this podcast for 10 hours and not even look at my notes because there's so much knowledge. We love each other. Yeah. Well, it's great. And I'll tell you, I do love you. You know, I met Alan Ferguson through Al. Oh, I love him. And he's one of the Australian guys that just started Flatrate. He was one of the first people to accept Flatrate. And tell me a little bit about, because there's a lot of people. There's people from Christmas lights. There's people that do plumbing listening, people that do gutters, roofing. Tell me a little bit about, because there's a lot of people. There's people from Christmas lights. There's people that do plumbing listening, people that do gutters, roofing. Tell me the advantage of switching over to flat rate. Okay.

All right. So flat rate, if you're not familiar with it, now it seems like most people do it. But basically what it is, is giving a bid for every job, even a small job. Most people are familiar with bid work in contracting. You know, they're going to do a house or remodel. They're going to give a price to do that work. Well, flat rate is applying that concept to service or to smaller jobs. It's sometimes called upfront pricing or menu pricing. But here's where I come from. I mean, essentially, I come from the housewife's perspective. If you come to my house and you say,

well, there's something wrong with your toilet and I charge $100 an hour, my next question is going to be, what? I charge this much an hour, there's something wrong with your toilet. What are you going to ask me next, Tommy? Well, yeah, how much, right? How long? I charge $100 an hour. Well, how long do you think it'll take you? It might take me two hours. It might take me three hours. Well, chances are good I heard the two hours. And now there's like a stopwatch going. And if it goes beyond that, I'm going to think, well, how come he said two hours if he can't do it for two hours? Does he not know what he's doing? So like what I want to know as a housewife, as a consumer is what am I getting into here?

I may say yes or no based on that. But if I don't know, even if it's $10 an hour that you're charging me, I'm going to be watching. Are you smoking a cigarette? Did you go somewhere? Are you leaving? How long are you go somewhere? Are you leaving? How long are you gone? Am I getting charged for that? I don't know. And it makes us anxious.

So the number one reason to charge flat rate is that your customers are more comfortable knowing how much it's going to cost them. Now, in some cases, and you may run into this, we do too, sometimes we don't know what we don't know. So we may have a flat rate for a more involved diagnosis. I'm going to cable this line and we're going to send the camera down. And at that point, I'll be able to see what the problem is. So to do phase one of what we need to do today is going to be this much money. And if we're lucky, that's all it's going to be and we're ready to rock. You're good. If I see that there's an additional problem, you've called the right place. I've got the equipment. I've got the know-how and we can take it from there. So you're setting your customer up that there may be more to today's story if you don't have all the evidence you need to make a certain diagnosis. So that's what training is for. That's why we use Al's sales power system. That's why we work with our service

techs on diagnosing the situation and presenting prices and options in a way that the customer is keeping up with us. That we're in as good a communication as we can about what we're going to do. But flat rate is good for giving the customer what they want and de-emphasizing that labor hour. What is the quote? It's not how much you charge, it's how much value you bring to that hour. And for that, you deserve to make a lot of money, in my opinion. Now, the people who do the dirty jobs in this country, who handle the infrastructure, who power the internet and wrangle lightning like the electricians, the garage door, you know, your garage door provides security, value to the home, safety. People used to get killed by garage doors, right? They probably still do.

So each element of the infrastructure industry provides safety and does an essential, often dangerous service. I believe tradespeople deserve to make a lot of money. And that's why de-emphasizing the labor hour, being willing to charge what you need to charge, and then doing the right thing by your customers and your team. Buying nice trucks, giving the team members insurance, doing the right thing for your customer is all going to add to your selling price. Did that help? Yes. You've got choices for menu pricing. You can make up your own book. You can buy a book. Service Titan has a book you can edit, or you can up your own book. You can buy a book. Service Titan has

a book you can edit, or you can incorporate a different book. In any event, you and your team are well-served to come up with the top 20 tasks. Don't make a thousand-task book. You know how I feel about this. Come up with the top 20 tasks and get started. And then you may expand a little bit as you go. Most jobs, most trades could get 80% of where they want to go with 20, 25 tasks. Well, you know, one of the things you've always talked about is don't count the pieces of bread and this is towards inventory, but count the loaves and make it simple. Because if you start micromanaging every number, you end up confusing everybody and not getting any useful data, right?

Well, it depends on what you want. And it also depends on your personality. Before we got on the recording, Tommy, you and I were talking about Flag Pages. And it's a personality mapping, a motivational mapping app that's awesome because people are different. Now, my personality is I don't sweat the small stuff. I'm not a details girl. I'm a big picture visionary person. I like to have fun. I don't care that much about details. Now, luckily, I've partnered with people who do. So we're better together. I'm not saying details aren't important. It's just my personality. But for me, if I can keep track on the chart of accounts, if I can keep track of sales, cost of goods sold, of labor materials and subs, if I could have a no more than one page list of the operating expenses, I'm going to watch those numbers. And then assets,

liability and equity, I'm going to keep it as pared down and as simple to what I have, what I owe, what I own as possible. And I'm going to watch those numbers. And if I'm making a ton of money, I'm good with it. I'll try and identify what's working, what's not working.

I'll try and go to convention and learn some new things. When it comes to marketing, you're going to get your butt kicked if you're not paying attention. But overall, I'm going to watch those big rock numbers. And then if one of those numbers looks weird or isn't lined up with my budget,

which is a complete made up goal that I want to achieve, if the numbers look weird, I will go talk to the people who are making the decisions involving those numbers. Or that's what I'll encourage my franchisees to do. So instead of getting 84 more metrics, I'll go talk to somebody. Why do you think labor as a percentage of sales is so high? Is it right? Is the number right? And then you go talk to the guy and he goes, well, we sent everybody to training and we didn't have any sales for three days. Oh, okay. Well, now it's like fourth and 40 in football. You have a few days left of the month. You are not profitable. You took this big hit on your labor. What are

we going to do to make money before the month is over? That's kind of my style. And it has everything to do with my personality. Now, for those people who are more detail-oriented, you could get a little more involved in metrics. But my caution would be that you sit in your office and try and figure everything out from the metrics as opposed to going and talking to people. Because your frontline people will solve everything if you let them in on the game. Which leads to another topic that you and I wanted to talk about today,

open book management. So open book management is really just get the balance sheet and the profit loss rock and write. And you can show them the score while you're getting it right. You don't have to wait till it's perfect to share this with them. But I would share the relevant numbers with your team. So for instance, if you have a salesperson, their sales is a relevant number. If you have a sales manager, the sales and the cost of goods sold for their location or their department

are relevant numbers because they're making the decisions that affect those numbers. And they will fix it for you is what I have found over and over and over again if you let your team in on the game. So Tommy, that seems pretty straightforward. What do you think is a barrier to people moving in the direction of sharing financial information with their team members? For me, it wasn't really... Here's the biggest thing that I'd warn against is if you're going to share the numbers, make sure they're right. Because I've given guys the wrong numbers because we didn't do our work good enough and I'll call it corporate. And you really look bad if you don't share the

right number. So for me, and I'm an easygoing guy, I don't open my own mail. I don't open my own email most of the time. I got somebody screening everything. So I'm a pretty trusting guy. For me, it was just, if you're going to tell them how they're doing, make sure that they're facts. Make sure that these numbers are reliable. But I think most people are like, they're guarded and they're going, I don't want anybody to know how much money I make and that's my business. And I don't think that's the way to lead. And I don't think, you know, it's neither there nor here. If you can't trust the people, why are you in business? I love how you're saying this. I think too, daddy, in my family, daddy taught me never to talk about the money. Now, this ended up being a big problem for my dad and the family fortune, FYI.

The vibe, the more, the norm used to be that you just didn't talk about this. And a lot of people feel really uncomfortable when I make this suggestion, just going back to how they were raised. So it is an emotionally charged topic for sure. And you can ease yourself into it. You don't have to share every number, but I love what you said, Tommy, about whatever you share, make sure it's as true as you can make it and let them know where the voodoo is. For instance, a budget is voodoo. A budget is voodoo. We don't know how much things are going to cost. We don't know what we're going to make for sales. It is an agreed upon set of

goals. That's all. And you can change your mind. So even as you're going to reward the right stuff, suppose you want to put a compensation and bonus program in place, it makes good sense for you and say a few key people, the managers at your company to start playing with the actual versus budgeted for a while, for a quarter or two, until you make some decisions as to how savvy you were about your budget, how realistic in terms of could anybody hit these numbers? And then make sure you get the rocks out of the road with getting to KFP that you figure out, well, that number can't be right. Or wait a minute, we're coding this guy over here

and he should be over here. You give you and your managers a chance to get some eyes on this information before you go and offer a whole new way to pay. I've seen that happen a lot where in an effort to get the team in on it and to start rewarding the right stuff, people move too fast because they're not operating from a known financial position yet. And then they have to backtrack and that is an awkward place to be. Yeah, and I've done that. I've made, I'm very, very careful on how I do compensation programs. Cause I don't, it's kind of like giving somebody social security and taking

it away. Yeah. One of the things we've done that I, uh, I had a little problem with two weeks ago. So we take every job. So let's say Phoenix is a thousand jobs a month. And let's say we've got 500 between Vegas and Milwaukee, just for example. So 2,000 jobs. One quarter of the overhead expenses, all the management, my pay, corporate warehouse, everything gets divided into every market. So let's say it was 10,000, they'd be paying 2,500, would get applied to that market. Because we take all the phone calls here, we do all the dispatching here,000, they'd be paying $2,500 would get applied to that market because we take all the phone calls here. We do all the dispatching here, service, Titan fees, all that stuff's divided

equally. That's the best way to do it. But what I found is Phoenix didn't even have a manager. So we were taking every single manager and dividing that into the other markets. And I felt like it's not fair to the other markets. Phoenix should take a bigger burden because we all manage in Phoenix. So it's just interesting when you know the numbers and you could talk about the stuff and you familiarize with it. It's not so bad. Yeah. And that's a voodoo number, right? Who said that that's how you have to do it? Nobody. You just made that up. And that's fine as long as you admit that. You see where I'm going? You just say, hey, I didn't know how else to do it. This seems reasonable. So we're going to add this all up. But now I think about this and we didn't have the manager, so I'm going to change

my mind. Having those conversations is essential so that your team members know what's real. Like this is how much our total payroll was. That's real. That's not voodoo. But how much we're going to split among the different shops, there's an element of voodoo there. I love the word voodoo. Yeah, I use voodoo a lot. And I'm sounding like such a know-it-all right now.

Everything I share comes with scars. I have made all of these mistakes. Either I made them personally or I recommended them to a client or a franchise and watched all hell break loose. So it's like I am not judging and there is more than one way to do this. I do know that getting the numbers as real as you can, weekly basis, and then putting a budget together, heavy dose of voodoo, and then comparing actual to budgeted on a weekly basis and being willing to comb through those numbers, make it as simple as you can

for you and your key team members to go through those numbers and get your managers or would-be managers involved in the game, what will happen is they will tell you why there's problems. They will say, well, the reason why inventory isn't working is this. And you're like, oh, I didn't even think of that. But they're living it every day. Your frontline people know why things aren't working. And as you start to connect the dots with the score and their input, and then they start to see evidence that making a decision based on the data and their input

changes things, it's a game that is irresistible. And then you'll find ways to reward them for it. For the most part though, Tommy, I think people jump into actually changing the way they pay a little quickly, maybe a lot quickly. Yeah. And that's why down a little. Yeah. Okay. Going to other shops and talking to people is, you know, I'm glad we got a lot of listeners on the podcast. I think we're up to 10,000 downloads a month. What? That's awesome. Well, the cool thing is we get people like you on the show all the time. And it's so good to hear how other people are doing things. And the biggest mistake that, well, I will say this, when I did start sharing the financial information,

we found some problems, obviously, and we fixed it. And we said, this isn't concrete yet, guys, poke a hole, please. And they did. But the crazy thing is the managers go, oh my gosh, I didn't have any idea how much this costs to do this or why I'm running this forklift for this. This doesn't even make sense. I didn't know I was hurting the market this bad by doing this. Or radio is a lot shittier than I thought it was. It's $15,000 a month. That's not really doing as much as I thought it would. So it's pretty cool what happens.

And you have a franchise. And how many, you're up to 11? 11 locations, yeah. So that's amazing. I love this business. And I don't want to go too deep into, I don't want to have everybody go start a drain business here. but, uh, Oh, I do. Give me a call. Your franchise. Yes.

And there might be someone listening that maybe is a part of your franchise, but what do you find makes a successful, because I have almost many franchises, even though I don't have franchises, they're there each location. We kind of got like a corporate headquarters like Phoenix. So what do you think it is that really defines the success rate of a franchise, a franchisee?

Oh, this is such a great question. And it's one we obsess over. First off, like your business is very similar to mine in terms of a multi-shop business. A franchise is a business model. You could also do it with corporate-owned stores. And at some point, we will evolve into corporate-owned stores as well, franchises and corporate-owned stores. But I love the idea of going multi-shop because, to me, it can help me make good on this promise that if someone comes to work for us,

that the sky is really the limit. Either as a franchise or as a team member, if we can continue to grow and scale and be profitable, there is a lot of opportunity for all of us. I'm very motivated by creating careers, not just jobs, and empires, not just boutique businesses. And drain cleaning is just one way to do it. And I love, love, love it. So you want, you know, with a system like ours,

we work to make sure we're solving the problems that drive people crazy. Like how do you find great people? Well, with Al Levy's help, with the Trinity's help in Philadelphia, my partners and the headquarters we have in Philly, the idea is that what if we looked for people with no experience and took 100% responsibility for

training them? And that is really the solution to this most common problem. How do I find great people? Well, you have to develop them. There's lots of great people out there. This is a second chances kind of thing. This is a kid who couldn't afford to go to trade school or a young guy who doesn't have experience yet or hopefully some more women. I'm embarrassed by the lack of women techs that we have right now, but we're working on it. But if you can say, all you need to be is willing and capable, and we will take responsibility for your training, that puts you in a whole new level of scalability. Then the other thing is marketing. How do you get the right number of calls from the right people who want to pay your prices? We don't do $49 any drain

and it's clear kind of marketing. We don't play that game. We are premium price, premium service. And so we have to figure out and we're better together trying to figure out those things in marketing that work. And marketing is a hundred times, thousand times more challenging than the financials, right? Marketing, once you think you have it dialed in, it's gonna kick your butt and a whole new world is gonna open up. I mean, we had yellow pages five or six years ago.

And now what? Who even talks about that anymore? Now it's pay-per-click and Google Local Services and is SEO even a thing? I mean, it changes all the time. So if we can help with that piece of things, then great. So getting the right number of calls, getting the right people to solve the problems

that you have as a contractor. But here's the thing that makes or break any location and any franchise is the fizzy person who's in charge. The fizzy person, the person with energy and grit and willingness and a sense of humor. This is why I love you so much. And this is why, Tommy, it's okay if you make a mistake or two. That's what goes in the book. That's what goes on in the art, right? It's just that you're the kind of guy who's not going to stay down if you get knocked down. And that is what makes a

great business owner, franchise owner, department head is a gritty, ambitious, fizzy guy. I use the word fizz to kind of... That's the stuff that really makes all the difference. Now, if you're a fizzy guy and you need the system, then I've got a great opportunity for you. But even the very best systems without the energy and fizz of the person in charge, it's not going to go anywhere. And you probably... Can you relate to that as a business owner? Absolutely. I mean, I look at my successful markets and I say it's hard to teach people to love people because I actually love people.

And boots on the ground, I could do ValPak, SEO, pay-per-click, retargeting, pixeling, everything from Phoenix, but I can't go create relationships unless I'm on the ground. And I look at the guys that are super successful. Unfortunately, I don't have any. Right now, I don't have, I've got a lot of women in the corporate office,

but not out the heads of any market. But I would absolutely hire somebody if they come along. We're not getting many applicants from them. That's a whole other topic. I am embarrassed at how few women, frontline people, you know, in the office, it's a girl's world, but in the field, I'm feeling neglectful. So there's more to be done there.

But, you know, going back to loving people, and I know we're close to wrapping up time-wise, but can I tell you a really great story about that? We got as much time as you need. Go ahead. Oh, you're so, we, well, you and I would be on all day, but I don't know if our listeners can see that. You can run to the bathroom, put us on pause, run to the bathroom. But this is one of my favorite stories. And this has to do with my

partner, Jim Creneti. When I first started to work with them, they were working with Al. So Zoom Drain, once upon a time, were clients of Al Levy's, clients of mine, and then they evolved into our franchise partners. And it's just been an amazing journey. But when I first met Jim, I called him up and I said, Hey, I'm in town. So what time do you want to pick me up tomorrow? He asked me to come and work on their financials like you and I did. So what time do you want to come and pick me up? And I'm not a real early morning person. So I'm hoping he doesn't say 6.30 because this is an early morning industry, right? Yeah. And he says, how about if I come and get you at 2.30 in the afternoon? And I'm like, well, okay, that's unusual because we're going to miss the guys, right? Am I going to be able to see any

of the team members? And he says, I hate my guys. I hate them. This is a true story. He says, I go in at 2.30 because they're gone. But I have had it with them. All I see is they're sabotaging my success. The place is a mess. I cannot stand the people who work with me. And I've never had anybody tell me this. It's pretty candid. So I say to him what I say to most clients and all of my franchisees. So what is it that you want here? Why am I here? What do you want? And he says, I want to fix this company good enough to sell it because I've had it. I said, okay. It's up to the owner to decide what they want. And I serve at the pleasure of the president. So I show up and we start working together. Now he's working with me. He's working with Al.

We're getting the numbers lined up and scorecard. Al's getting his operations organized, his manuals in place. And one of the things that Al and I both insist on is that he engages team in writing the manuals. And so he has to ride along. He has to spend time with them. This is like a non-negotiable when we work with you as clients, right? You gotta go ask these people what's happening. And what happened is, as he started,

oh, I'm crying and talking about it. This is just, this makes me so emotional. He said, what happened is that he realized it was never them. It was always him. He had never made clear what was good enough for him. He had never put any kind of standards in place. They would do something, he would hate it,

and they would think, well, why do I even bother? It was always him and never them. And once he started to ride along and take responsibility for how he had failed them, he fell in love with them. You know, he finds out this one kid is like 17 family members or depending on this one kid for his paycheck.

And he finds out that this kid, you know, has a family member who has special needs or, you know, that he married his high school sweetheart because he finally had enough money to pull it off. Now, everything... Jim came 180 degrees on this. The reason we franchised is absolutely because he said, these great people are going to go elsewhere. I want them to have careers. I want to find a way to really scale this thing because I love my team. And that's what's possible when you dive into it. So you said, what does it take to love people? For Jim, it was spending time with them

and coming to that really brutal realization that his team isn't sabotaging them. His team is just fine. It was him all along. Now, I'm not saying some of your team members may not leave and not everybody's going to work out that you hire. But while they're on your watch, if you could create a sane place where you keep score and there's logical consequences in this absolutely crazy world that we live in, this community that you create with your company could be the family that they always wanted, could be the home that people never had. My friend Howard Partridge talks about the power of community, and that's what we have the opportunity to do with these businesses. And that's why I love my partner, Jim, so much, And we decided to work together with this franchise. Yeah, Jim's a... I've met Jim now probably four or five times.

He's a very, very cool guy. And I love the business. I have not had the chance to go golfing with him next time he's in town, but... Oh my gosh, you two are the most competitive people I've ever met, the two of you are. I am not going with you when you go. Yeah, he's a great guy.

You know, when Al walked in here, he came in and he said, hey, I'm going to be brutally honest. And he said, I could use your own forklift to steal all your inventory. You wouldn't even know. He said, why are there counters on the wall, for God's sakes? This is the new millennium. wouldn't even know. He said, why are there calendars on the wall? For God's sakes, this is new millennium. And he basically was not shy about everything we needed to do. He says, why do you have 10 different color shirts? I remember he said, Adam, what's your biggest

struggle? And Adam said, well, Al, I spend a lot of time trying to develop my employees and I tell them all the time what to do and I'm sick of it because they don't get it and they're not they're just not bright and Al said this he said how often have they demonstrated back to you that they understand and they have the right input to know exactly what you're talking about and make them sign off acknowledging the fact that they do it right and they know and uh we both looked at each other never we've We've never done that. And that's so powerful. When I had people start signing up and they knew how to do stuff

or the steps of delegation when they do things, oh my gosh, the results were staggering. I mean, it was nuts. And then I started to tell people, I started having fun again, coming back to work, making a difference, enjoying the good stuff. And I will say, Adam is a very good bad guy.

And people hate him, a lot of the people, because they go, man, Adam is just so mean. But I asked him several years ago, if you come in, you got to be the bad cop because I'm going to be the good cop. And I tell you, Adam strikes me as a guy who cares. He is playing. I mean, that's a really, really powerful. He is willing and capable.

This guy wants to win. That's Fizz. You've got really great people on your team and Adam is absolutely one of them. So yeah, I mean, so that, you know, that's what I like going back to flag pages too. People are different and weird. It's not millennials are like this

or old people are like this or men are like this and women are from Mars or whatever. That's not it. It's that we're all different and weird and wonderful. And I like disc mapping. We use something similar called flag pages. Disc is a little more popular.

That's why I'm bringing it up. It's like the Coke and Pepsi of these kinds of personality mapping. Just what are your motivations? And we're not all motivated by the same things. And I think that's another really great valid tool for getting your team to feel honored and respected and to help them play. And when it comes back down to the money, let them in. All the financials are the scorecard for the game of business.

And I am happy to help with that piece, amigo. I love you, Tommy. I've so enjoyed this. I was looking forward to this. Yay. Now it's great. Tommy Mello today. So I always ask two last things.

Okay. Have you read any good books lately or any good recommendations that you think, it doesn't even have to be, it could be fiction, but something that maybe changed the way you look at things or just something that's a must read for the listeners? I have been way into podcasts, but this podcast guest led to a book

that was just recommended and I just started it and I'm all in and it's called 30 Days with the Navy SEAL and it's by Jesse Eitzer. And he's married to Sarah Blakely who owns Spanx. They're like a real high powered couple. But the Navy SEAL is this guy named Dave Goggins. Now, Dave Goggins is just an intense dude. He's a Navy SEAL, a retired Navy SEAL and Army Ranger. Could that get more extreme? And then he became an ultra athlete. But his mission in life is to explore the capacity of humankind.

Like how much can a person do? And as a result, I find him extremely fascinating. And he is the Navy SEAL who spends 30 days with Jerry Eitzer and 30 days with the SEAL. And I just started it and it's fun. It's funny. There's a lot of swearing

if you're not into that. But I got that recommendation from one of my franchisees, Sam Marciso, and I'm loving it. So Dave Goggins as a podcast guest, look him up and then 30 days with the seal as a book. Perfect. And then, so I'm going to, I'll be buying that. And then the last book club, you know, the books are just crazy,

but I get through them. I, you know, I'm pretty good about it. Readers are leaders. So tell me, is there anything that we didn't talk about? I don't know if it's financially or just in business in general. I think we covered a lot of stuff, but is there anything last words of wisdom you'd like to leave with the audience? You know, I don't know who said this

and I use this quote a lot. I didn't make it up, but I love it. And it's, the progress is made from fixing the mistakes that are made in the name of progress. It's going to be messy. You're not going to do it all right. It's not a straight line. I don't care how much you read or how many seminars you go to or how much money you spend. There's going to be highs and lows and you take two steps forward, one step back, and it's going to be delicious and wonderful. And one of the things that I'm going to leave you with is when Clockwork sold, I worked with them and then I left, but then they sold a few years later. And I know that they started the

whole thing with $4,000. This is part of the story of Venvest and Clockworks. Jim Abrams and John Young started this new company. They had lots of success in business before this, but they started this new company with $4,000 and they sold it 10 years later. Allegedly, I never saw the papers, but I heard somewhere around $200 million. And there were dozens of things wrong with that company. It's okay.

Like it doesn't have to be perfect. Just make money, take it in cash, and figure out how you can scale it and you can create an empire. It's not going to be perfect. It's just going to be awesome. I love it. You give me goosebumps. Yay. Okay. Yeah. I'm not the oracle. I'm just one woman spouting off. You'll be fine. Keep score. Envision what it is that you want. Take some aligned action and then measure your results. In the armed forces, they call this plan, execute, debrief. Plan, execute, debrief. That's it. Just, you know, pick something, a point on the horizon. Get clear about what you want just

because. You get to pick. And then you're going to take some action and you're going to measure those results. Am I making more money? Do I have more cash? Do I have more time? Do I have less headaches? Do my customers like me? You measure these things and then you make some other decisions and you do it all again. Why not? I love it. Yeah. And it's fun. It is fun. It's fun, fun, fun. And thank you so much for the soapbox.

I love the long format of podcasting is awesome. So thank you for spending time with me today. Thank you. Hey, listen, we should do this every three months or something because you're so powerful. You work with so many people and you understand some stuff that I don't think a lot of people do in business. So it's fun for me.

I always get a ton out of it. And anything I could ever do for you, you just let me know and I'll do it. We are BFFs. Okay. And if somebody cancels last minute, just let me know. I'll be in.

Okay, cool. Well, thank you very much, Ellen. Love, love. Thanks, honey. Bye, Tommy. Hey, cool. Well, thank you very much, Ellen. Love, love. Thanks, honey. Bye, Tommy. Hey guys, I really appreciate you tuning into the podcast. I wanted to let you know that my book is available right now on Amazon. It's called The Home Service Millionaire. That's homeservicemillionaire.com. Just go to the website. It'll show you exactly where and how to buy the book. I poured two years of knowledge into this book, and I had 12 contributors.

Everybody from the COO at HomeAdvisor to the CEO of Valpak, and of course, Ara, the CEO of ServiceTitan. It tells you how to have the right mindset and become a millionaire and think like a millionaire. It goes into exactly how to turn on lead generation. Have those phones ringing off the hook for the customers that you want to be calling where you can make money and get great reviews. It also goes into simple things like how to attract A players. Listen, if you want a great apple pie, you need to buy good apples and you need to know where to buy

those apples. And it also talks about simple things like knowing how to keep the score. You should have your financial check every week. You should know exactly what's coming in and out of your account. You should know when to cut advertising that's not working. And more than anything, you should know how to cut employees that aren't making it for you.

Listen, you might have a big heart, but this book is gonna show you how to make decisions built on numbers. I hope you pick up the book and I really appreciate everything. I hope you're having a great day. Tune in next week. Thank you.