The Home Service Expert Podcast - Understanding the Complexities of the Commercial Landscape with Josh Young

Episode Date: April 18, 2025

In this conversation, Josh Young discusses the challenges and successes in the commercial construction industry, focusing on business growth, leadership, and the impact of private equity. He explores the importance of pushing team members to exceed their limits, learning from mistakes, and the complexities of navigating the commercial landscape. The discussion covers strategizing for scaling businesses, restructuring profitability for sustainability, and maximizing productivity through effective time management. The conversation also delves into the role of technology and AI in business operations, the future of autonomous vehicles, and the need for education and apprenticeship programs in trades to bridge the talent gap.   Don’t forget to register for Tommy’s event, Freedom 2025! This is the event where Tommy’s billion-dollar network will break down exactly how to accelerate your business and dominate your market in 2025. For more details visit freedomevent.com   Show Notes: 00:00 Transforming Challenges into Opportunities 02:06 Navigating Business Growth and Fluctuations 06:00 Understanding the Commercial Landscape 09:51 Learning from Mistakes and Leadership 14:10 The Role of Private Equity in Business Growth 17:58 Building a Legacy and Future Goals 21:55 The Importance of Leadership and Team Dynamics 27:43 The Power of Storytelling in Sales 30:04 Building Trust and Relationships with Clients 32:54 The Importance of Networking and Learning 36:12 Scaling and Growth Strategies in Business 39:03 Profitability and Business Sustainability 41:52 Maximizing Time and Productivity 44:47 Embracing Technology and AI in Business 48:00 The Future of Autonomous Vehicles and Its Impact 50:04 Education and Apprenticeship in Trades  

I get a lot of enjoyment out of pushing people that said, I can't do this. There's no way. And then all of a sudden a year later, they're doing double what they thought they could, you know, I have an estimator that came in, he sold like a $2 million. Right. And now he's selling 15 million bucks a year. Welcome to the home service expert where each week Tommy chats with world-class entrepreneurs and experts in various fields like marketing, sales, hiring, and leadership,

to find out what's really behind their success in business. Now, your host, the home service millionaire, Tommy Mello. Before we get started, I wanted to share two important things with you. First, I want you to implement what you learned today. To do that, you'll have to take a lot of notes, but I also want you to fully concentrate on the interview. So I asked the team to take notes for you. Just text notes, N-O-T-E-S to 888-526-1299. That's 888-526-1299, and you'll receive a link to download the

notes from today's episode. Also, if you haven't got your copy of my newest book, Elevate, please go check it out. I'll share with you how I attracted and developed a winning team that helped me build a $200 million company in 22 states. Just go to Elevateandwin.com forward slash podcast to get your copy. Now, let's go back into the interview. All right, guys. Welcome back to the Home Service expert today. Josh Young is in the house. House. He is a he's out of Chandler, Arizona. So he's my neighbor. All right, guys, welcome back to the Home Service Expert today. Josh Young is in the house. He is out of Chandler, Arizona, so he's my neighbor.

He's an expert in contract management, value engineering, construction. He's the president of New Construction, a tempi mechanical, where he's worked for more than 16 years. Over the years, he has worked to develop customer relationships on large commercial HVAC and plumbing projects. Josh also specializes in several industrial projects, hospitals, municipalities, schools, and hotels. What's up, dude? What's happening?

Thanks, Tommy, for having me. That's exciting. I love home service, man. I love business in general. And I love hearing businesses that are growing. You guys went from, what is it, 8 to 16 million in a year? Yeah, yeah. So we've kind of gone up and down a little bit. But yeah, when I took over, we actually spiked to about 16.

Then we came back to about 10, and now we're up to 37. Really? Yeah, just in two years. So. So what, that's a lot of fluctuations. Yeah. What's what happened? What's the good, bad and the skinny on it? Yeah, so we started. Obviously, I became president two years ago, I was vice president for a little while. So my dad kind of retired, I took over the business. And then I had to learn the business, right. So he just kind

of like dropped it and walked out and was like, hey, here's a, you know, here's a $10 million business. Good luck, have fun. So I had to kind of learn, you know, what to do, what not to do. And of course, like anybody, right, I wanted to run for the fences. So what I did was, yeah, I wanted to scale it, right? So the things that were going on at the time was a bunch of high rises. I'm like, hey, I'm going after the high rises.

We weren't equipped, we weren't ready. We didn't have the manpower. I didn't care. I just went running right into it. So we did our first high rise. We didn't, you know, it wasn't great. We didn't make a bunch of money, but we're like, hey, that was the whole point.

Set us up on the first one we learned, right? So we went into a couple more, and just about crippled us. The manpower, the resources, the cash flow that you need, and the logistics behind it were just absolutely way more than I expected. Yep. So we took a step back and kind of reevaluated everything, and then after that, learned that high rises are not for us. So we said, what is for us, right? What works for our business and the people in it?

So we kind of put our plan together for marketing and the front end and just started, you know, doing what we know we're good at, right? What are you good at? So we like small, complicated projects. And I say small, you know, not 20 plus million dollar projects. We like between a million and 10 million dollar jobs. And it's all HVAC related?

Yeah, HVAC and plumbing. Okay. Yeah. So it's all commercial. All commercial. And it's commercial, fond of like apartments. We don't do multifamily. No, no.

Another thing we're not good at. So, and we try to stay, you know, under five levels, right? So, like I said, high rises is not our thing. Once you get above five levels, it just gets way more complicated, right? Your logistics goes through the roof. It gets super complex. Huh. Interesting. Your logistics goes through the roof. It gets super complex. Huh! Interesting. Now, one of the things I hate about commercial

is the way they pay. How did you guys figure that out? Overbill. Overbill. Get ahead of it. So if you can get ahead of it, then you're not in such bad shape. But I agree with you 100%.

Every contract we sign is set up in a way that the contractor is going to benefit, right? We're always behind most of the time when it comes to payments, right? I mean, we're right now, we're 90-day pay, you know, on some of these contracts. So it is painful in that sense. But what I can tell you is if you get ahead of it and you can create, if you can create a billing or structure that you're able to bill ahead of it and you can get your money sooner, then your cash flow doesn't get affected, right? And that's kind of what we've done.

What is your goal, bottom line net profit? Net? Net-net. Yeah, bottom, bottom, bottom line. Yeah, so- What percentage of revenue? I don't know that I have like a goal for net profit. Be honest. We have a goal for gross. Gross profit? Is it in the 50s or the 40s or the-

30. 30? Yeah. We're lucky to hit 30. Yeah. Damn, I'm shooting for 70. Yeah. Well, we're in the wrong business. Well, you know, B2C is a lot more complex, but I wouldn't do it any other way. You know, people always say, why don't you get into commercial with me?

And I'm like, well, it's a different pay structure, different talent, different trucks, different OSHA guidelines, different accounts receivable,. It's it's not even in the same hemisphere And people are like why aren't you doing more acquisitions? I'm like because they do box stores. They do new construction They do fireplaces. They do front doors. They do commercial and when you're small, unfortunately you take on everything you can I Remember I did a commercial job and it still haunts me. I not only lost money, but I lost time, effort, energy, and a fortune. Um, it was a custom gate with solar power.

It was just stupid. And, uh, it was a buddy of mine, and I felt so bad. I lost my ass. I had to pay a company to go fix it. Like, that's how bad it was. The other bad part is you don't make the rules, right? Somebody else makes all the rules for you and you have to abide by them. Whether right, wrong, or indifferent, half the stuff isn't even is against the law. The bureaucracy and the red tape is ridiculous. And you know,

I'm building a place in Idaho and I think there's three inspections required. You're allowed to build 47 stories tall on residential. I think that's almost it's under like there should be a little bit more guidelines for safety. But I will say I like this city a lot. I don't think I'd. I have an opportunity where I can live wherever I want. I'm from Michigan. I really like Michigan, but I don't I don't miss the winters. Well, that's probably why we get along. My whole family's from Michigan. Really? Yeah. Yeah. What part? Boyne City. I don't know if I know Boyne. What's up north? You know where Traverse City is? Yeah that's where I just

went my golf trip last year. Yeah so it's just east of there. So just east of so this May or July we do a golf trip called the McGroober Open. Okay. My team's I pick the team my cousin picks the team I'm undefeated. I just have to throw that July we do a golf trip called the McGroober open. Okay, my teams. I picked the team. My cousin picks the team. I'm undefeated. I just have to throw that out there. I'm also undefeated in my volleyball for my pinnacle trip to Mexico next week, but we're going just east of Traverse City and I don't know if it might be the same city.

Is it a golf area? Not really. They're kind of on the lake in that. It's a very small town. Okay, so it's probably near there. But it's probably close. That's awesome, man. Yeah, the Midwest is the best.

I like this city because it's easy to get around. It's not hard if you want to go to Flagstaff or Sedona, you can get there. Not far from Vegas, not far from Kelly. It's a planned city. It's a grid. And it's just a lot of stuff to do. I'm not a big fan of the west side, Glendale. I'm not that yesterday we were at an event at downtown Phoenix. I hate downtown Phoenix, but I like Scottsdale Paradise Valley. I like Chandler. I like Gilbert. You know, I like the east side of Phoenix.

Yeah, that's the same for me. I grew up in the east side. I grew up in Tempe and then moved out to Chandler. So not far away. But yeah I love the side. I don't know that I would ever moved to the other side of town like you said Glendale not my place. No it's or downtown Phoenix not my place. I live there now you know they actually I will say North Phoenix my mom lives off Cave Creek it's okay up there and then I used to live off of 7th Street Bethany home. And there's an area over there that's all old trees and it feels like the

Midwest. That's a that's where my pastor lives. We go to Impact Church. Yeah, where do you live? I thought you last time we talked you were you're moving or you're building a house or something. Paradise Valley. Okay. And I'm moving to the north side of Camelback, northeast corner of the land. Yeah, yeah, yeah.

It's called Billionaire's Row. My neighbors are gonna be the Waltons and the Disney family. There you go. So, we wanna light it up. Yeah, yeah. But I built in my dream, it's like a passion of love, but we were going over the game room and I'm like,

I don't have any feedback on the whole house going over the game room and I'm like this. I don't have any feedback on the whole house except for the game room. This is where I need to be perfect. So it's gonna be sick. But anyways, Tommy, so you've kind of got to learn the business. What were some of the biggest mistakes you've made? Obviously, fast growth, you know, chasing revenue versus profit is probably one of the big ones. Yeah. Yeah. So exactly. Chasing revenue instead of profits is big. Taking on stuff that, again, we're not good at, right? Thinking that we were, you know, capable no matter what building

we went into and finding out that wasn't the case, right? And being more prepared, I guess, is something I've learned through this. And also letting other people kind of help in the decision-making process. So I think sometimes we get, you know, as managers or leaders, we think we have to make all the decisions, right? And all our decisions are gonna be the best decisions.

Well, I learned that letting some of my other leadership and even some of the people down even further down, make some decisions and have some input changed my views and actually what kind of projects we went after, you know, how fast we could get projects done, you know, bringing in that feedback. So I think, you know, a lot of that I learned going through challenges like taking on the high rise building, right, taking on some of these projects that we weren't prepared for. So there's this saying that a mistake made more than once is a choice.

So you got to learn from your lessons. And theoretically, I always say like, hypothetically, I've got scars and bruises all over from all the mistakes I've made. And this experience, I believe there's a lot of smart people that get master's degrees. I've got an MBA. You take my MBA at the age I was compared to my experience without an MBA, this guy's way smarter without the MBA

because of the experience. And a lot of people, they've got this authority complex, like, I've got the knowledge I've learned, but they lose the humility and humbleness. And they think because they went to a stupid school with a tenured professor that never made it in the real world that they're ready to make big boy decisions. And it's just not the case. And it's funny because private equity is getting into it. But without great founders and leadership, private equity fails. If they could do it, then they would. Yeah, yeah, 100%. So it was funny you say that because I was at a CEO group meeting

just yesterday. And there's a doctor that created a business and has been running it for I don't know, 15, 20 years. This young kid with an MBA comes in, super smart kid, right, gets to her to believe that he should be the CEO of the company because he's smarter than her. We basically showed her that like, hey, you have the knowledge, you're just doubting yourself right now. And by the end of it, she was like, yeah, what am I doing? What am I thinking? Like, just because this kid's, you you know showing me a bunch of cool stuff

You know and and house a bunch of new shiny objects. I you should put myself to the side What's the CEO group called? Vistage. Oh, okay. I've heard of this ditch. Are you in a CEO group? I'm in I'm in Joe polish's 100k genius network. I'm in a couple other things. I pay Dan Martell Cameron Harold. I've got a lot of coaches. Okay, but I'm not in like YPO or yo or any of this stuff I just it's a commitment and I don't like to tell people I'm gonna do something and not show up because I'm busy Sure, I'm sprinting at the next churn of the company the next equity deal You know, that's a great question. I had for you is, I think every business should be built to sell.

Yeah. What's your goals with this business? How do you look at it? What's your timelines? How are you manifesting the outcome? What do you see the business in three to five years? So my big audacious goal right now, my BHAG is a hundred I want to do in one year.

You know, that's kind of my 10-year plan. Hoping to be able to get it done quicker than that. We'll see. But I don't really have any plans to sell right this minute. I've got three other partners in it, right? My brother's a partner and so is my uncle. My uncle's only got about three years left and then we'll buy him out so it'll be me and my brother will, you know, but I don't, you know, I'm kind of playing the long game, you know, I see all these companies getting bought up by private equity and people kind of just, you know, getting out of the game and I think that's a benefit to us. I think we're going to be one of few small subcontractors or subcontractors out there that are family owned and I think that's a huge

advantage that we're going to have in the market. Yeah, you know, I'll tell you this, there's great stories and then there's the nightmares of private equity. I happen to, mine's a dream of mine and I'll tell you this, people underestimate what you do with the money they give you. But that money, I had a guy to come up to me yesterday. I was at an event and he's like, I'm doing a deal next week. I go, you idiot.

I go, you should have called me. I've got so much advice about this. But anyway, he found a great company. I'm really excited for the guy. But I really I didn't know my life was gonna be It's better I Will say like so explain because obviously I've heard it is both right. I've heard the same thing So I just read a book, you know building an empire. Yeah, I'm Adam coffee Yeah, Adam Coffee. Yeah. Yep.

And so, you know, that's kind of the positive side of it and how you can, you know, use private equity to kind of to grow and do all of that. You roll equity. So I rolled 50%, 49%. So the deal is, is this next deal, I'll be a billionaire in the next term. But the fact is, um, Jeff Bezos owns 8.3% of Amazon. Mark Zuckerberg owns 14% of Metta. Like, the way you build an empire

is by getting cash infusions. Otherwise, you're reinvesting, you're living off of it. Now here's the deal. I'm gonna write a, I'll give you my book when it comes out in September. It's called, Pay Them What They're Worth. And it's about equity incentive programs, phantom equity, profit units. There's a lot of ways to skin this cat. But you want to give key players in the business, number one,

it helps you recruit the A plus best players in the world like Elon Musk does. Number two, it keeps people from leaving. Number three, it has them run and sprint towards the same goal you are, which is build an equitable company company So the deal is they do not get the money till a change of control So your second turn you could make more money than the first term Parkinson's good buddies of mine Paul Kelly Five turns told the business five different times pulling out chunks Tens of millions if that hundreds of millions of money each time so my life I had money I had $12 million in my account before we did the deal.

But now I'm like, I will say this, I'm taking my niece and nephews next month to Disney World. We're not waiting in any lines. We're getting VIP. And the money's a fart in the wind. I don't worry anymore. I pay for dinner every single time and I don't ask anything in return

because I worked very hard to be able to do this for my friends, family, and people that are important to me. And I will say, it's not that I didn't have money, but now, I mean, look, my house is the most expensive house in Arizona that I'm building. And I'm not cocky, but here's the deal. Right now, there's five people staying at my house. My employees come to my house.

My mom's birthday party was at my house. My dad's birthday party, My niece, three years old. We have. Like I'm doing this. I can live in a thousand square foot apartment, but I'm doing stuff because I want to take people with me. I want to live the best life. I want them to enjoy this stuff. So for me, that was good. I'm helping, like I'm gonna give a ton of money to the church. Do you think though, do you think even, you could never have done that without, without those or without? Well, I'll tell you this. We went from 27 million this year. We'll do about 80 million net of EBITDA. I learned

way more going through the process. Ken Gooderidge with Kettle called me up. He goes, you're a badass home service dude. He goes, when you learn what these guys know, how to raise capital, how private equity works, how the money game works, the financial engineering, you're going to be an effing ninja. And he was right. And so everything they tell me, I listen, I have two ears and I write it down and I implement quickly. And now I'm like, I'll never invest in a business again

that's not gonna have an exit within the next five years. And I'm not trying to change your mind. And look, I just want you to have the full knowledge of like what I've been through through I think a lot of people They don't understand they're like, oh, I'm gonna lose a piece of my soul There's a book called shine by Gina Wickman that when you sell your business, it's a piece of your soul It's like part of your DNA for me. I'm like My face on the side of the trailer. I trust me

I'll have plenty to do. And like you said, I want to start going golfing again more often. I've never been married. I'm 41. I'll be 42 in March. Yeah, congratulations. No marriage, no kids. I'm engaged.

But I've had to sacrifice two decades and break the family curse of having nothing. My mom worked three jobs when I was a kid. My mom lives a really effing good life now but the generational curse had to get broken and Nobody should live the life I had to live and nobody should not be able to like I Sacrificed not getting married walking out of movie theaters and broken up with girl after girl after girl if a girl wanted to hang out With me that I was dating we were going to fix crossroads together. That was our time So people say I want what you got. I'm like, we were going to fix groggers together. That was our time. So people

say, I want what you got. I'm like, okay, don't get married. Don't have kids. Careful what you wish for, right? I'm an overnight success of two decades. I think, and here's the deal. Like, when you get this company that's guiding me, they don't tell me what to do. They just ask really smart questions and make me think through a different lens. and that's why it's good to have consultants Dan Martell got me to look through a different lens about things. That's why I hired a driver and a chef Yeah, that's why I go to Vistage same. Yeah, this is amazing. It's always Ypo I've heard is really good Tiger 21. I don't know if you ever heard of that

Tiger 21 is like They're very very wealthy all. All have an exit. Did you go to waste management open? Who's the guys that they wear the medallion and they run the whole tournament? Oh, geez. What the heck are they called? I forget the name, but it's something like that.

Yeah, with the green jackets or whatever. Yeah, they're like bluish. Yeah. I don't remember what it's called. If you could go back from the day you became the president, what would you have done differently? What would I have done differently? Obviously listen to your coworkers a little bit more, get their insight.

Yeah. Be honest, I don't know. I don't know that I would do a whole lot different. You know, like you said, I mean, you just, you have to go through it, right? You have to make mistakes. One of the things I told my dad early on, and the reason he kind of walked away from the company and sold it to me was because on the way back from a job site, I basically just looked at him and said, Hey, have you ever made a mistake in your life? Like let me make mistakes. I'm going to learn from them and I'm going to make things better.

I think at that time he was kind of like you get it. Have fun, right? Yeah So so I think I don't know that I would change anything other than shape to shape to you are in the decision you make Today, so I write that right so You know other than that. I just think you know Learning faster how to become a leader and being more humble and not being so Stuck on you know the dollars right and me like what's in it for me what you know once I got over to that part If I could have relieved that part of it like long long ago I guess that would be the one thing is like being more humble and not doing it for me, doing it for the cause and for the people underneath me,

I think would, you know, I would be in a lot better place today if I had learned that faster. You know, I'm gonna give you a bunch of books to read, but there's this new book called The Courage to Be Disliked. And if your mind is set on the mission, you're gonna break some glass getting to that. But the deal is, if everyone's focused on the mission, you're gonna break some glass getting to that. But the deal is if everyone's focused on the mission, it changes everything and it's

what true leaders are. There's very few real leaders in this world. They're not willing to do what it takes. I'll say this, I like to be liked. It's a flaw of mind. I don't fire anybody. I've never, I haven't fired in over 10 years. I like to be liked I like to be the My glass door rating is 93% as a CEO. I don't need it to be it's just a pride thing And I kind of get bullied sometimes And I got a lot of no people around me. I'll tell you this most of the Team will tell me to go f off and they respectfully, but they say no. And I need that. Yeah, because I'm a dreamer.

And you know, they're very, they're very focused on the goal. I mean, look, we hit last month, 27% to the bottom line. 27%. That's nutty. Yeah. And I'm like, I think we could hit 30. But you can only bleed so much you can squeeze so much blood out of a turnip blank The idea is you got to go revenue growth, too. So we missed our revenue goal last year We exceeded our EBITDA number and so this year is gonna be a heavy revenue growth here Yeah, but I love this man. I could talk about business all day. Like this is like people like how do you work so much? I'm like, I never go to work. Yeah, this is what I do. Yeah I don't know if you do you love what you do just as much as I do. Oh yeah. Yeah. Yeah. I love I love love business. I don't know that I love commercial construction

as much. Yeah. Right. But I do love business. I love the financial part of it. I love going through you know an income statement or a balance sheet and picking out things, you know, how do we do this better? Like I said, we're talking about, you know, how did you get, you know, get so good with cash flow and making sure that you don't get behind on payments with these people? Just figuring out those issues I really enjoy and building the business, right? Building people up, pushing them to do things that they never thought they could do, right? Building people up, pushing them to do things that they never thought they could do, right? I get a lot of enjoyment out of pushing people that said,

I can't do this, there's no way. And then all of a sudden, you know, a year later, they're doing double what they thought they could. You know, I have an estimator that came in. He was, he sold like a $2 million, right? And now he's selling 15 million bucks a year, you know, He said there's no way I'm gonna ever get there right and I just kept pushing and pushing and pushing finally, you know last year He he went above what he had set for a goal

So that's the kind of stuff that I love and one of the things that I finally learned is I do need it You know a leadership team and I didn't know what that meant. And I can tell you, Vistage has helped me quite a bit. I was going to ask you about that. Yeah, Vistage has helped me quite a bit in that sense. I should have joined a group a long time ago. Because you only know what you know, right? And if you're not meeting like you are with people

every single day or in your industry or different industries, you just don't know. You don't know what's out there. You don't know the people you can go to. So Vistage kind of opened my eyes up to that, and I was able to ask more questions to different people, and so I learned really fast the type of leaders that I wanted and then started going after them. And wasn't afraid to pay, like you said earlier, right?

Pay what they're worth. I mean, I wasn't afraid to- Pay the most possible you could ever pay, which means you got to raise your prices. But what means you start on time and you finish on time and you collect on time. Right. Everybody's happy. Yeah, and the clients are happier.

The clients that call us up, they're like, we've had a garage or company out. We've had three garage or companies out here in the last two years. We don't care what it costs, just fix it right. Because I'll tell you what, how much is your time worth? I don't always call the best deal. I want the best investment. And there's a big difference between paying the best value or paying the best price.

Hey guys, hope you're enjoying today's episode. You know what's crazy? I've noticed a lot of home service owners work their tails off while their team just coasts. Here's the reality. If your people don't know what's in it for them, then they'll never work as hard as you. So what if I told you there's a way to get your techs, installers, and everyone else to work harder and to care more about your company?

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Now back to the episode. So I'll tell you a story. My father-in-law just had your guys out to fix his garage door, right? That was a good story. So no, it was great. So I'm over there during Christmas, right? And he's telling me,

yeah, I got these guys to come over and do. I said, who was it? He's like, A1 garage door. I'm like, oh, Tommy Mello. And anyways, we're getting talked about. He's like, yeah, all I wanted was a new garage door, right? So the guy comes over and he said, this guy was super knowledgeable.

So he starts talking to him about the springs and about the rails and about the different things, right? Not necessarily trying to upsell him, just talking through things. Yeah, educating him, right? And he was like, by the end of it, I had not only garage door, but my rails were changed. The springs were changed.

The head was changed. He said he hooked me all up, got my iPhone working, you know, with the garage door. He was super stoked about it. And he paid like 15 grand, you know, he was looking to spend like five, you know, and he was excited that he spent more money because, you know, he had a story to tell. And I was just like, I'm like, wow. And that was, I mean, kudos to you, man. Like that's, that's huge, right?

Well, we train a lot on that, but the biggest thing that we train on is like, be a great human. Like, here's my number one rule. Would I go have a beer with this person and want to go on a camping trip? Like, dude, I want to like get to know you. Like, do you make great eye contact?

Do you smile when you work? Do you ask great questions? Do you tell a great story? Because that's like my litmus test if you're going to make it here. It's not if you're a great technician. I can teach anybody to fix a garage door. And I need to be able to trust you if I've got a wife and two young daughters at home

to be there with them alone. So that's a big deal to me. And here's the thing is my mom works three jobs. I love my mom and I tell the story to my clients and say I love my mom more than anything in the world and here's what I'd be doing for mom And this for mom Yeah, and I just smile and I look at them genuinely the blackest part of their pupils and I just smile and they say All right, then let's do that. But if mom's moving in two weeks, I just got to get a past inspection Do the right thing for mom. I'm not trying to like take advantage of you. And here's another thing that I'll tell you

Always give options. Because if you're not giving options to your clients, you're giving them ultimatums. They can only say yes or no. So say, if they say, wow, that's more than I was expecting to spend. Well, let's just do a more economical option then. It's up to you.

But you'll have 100% conversion rate if you give options. Yeah, I agree. We do the same in our business, right? Even though we're given a set of plans and specifications and told, -"Hey, this is what we want." -"Get them pregnant." Yeah, this is what we want, right? You get them to say yes. I've learned this about commercial.

Yeah. And I'm not even doing commercial. You get them to say yes, then you say, by the way, and then, what are those called? Not adjustments, add-ons or what? Yeah, we call them. Change orders. Yeah, we call. Change orders. Yeah, change orders. Yeah.

That's after you get the job though. You get the job. Yeah. We give what we call VE options, right? So value engineering options. So it's like, hey, if we do this a little bit different, we can save you a bunch of money. And sometimes they're like, yeah, we'll do it that way. And sometimes they're like, now we want it exactly how it is on the plan. So we call it value engineering or be. I love that. So one of the things I've learned

about myself over the last couple of years is I'm a seeker of knowledge. I'm curious. And I bring it back to the company and I got a team that helps implement it. What is Vistage? So it's taught you number one to get a good team around you. What other things have you taken from being around the best practices group like that? So, you know, don't be afraid to, you know, talk about things that are going on. I feel like some people, you know, they want to be the biggest and the baddest company out there, and they don't want to show, you know, you know, their dirty underwear, right? And that's what the nice thing is. Going to Vist you know, their dirty underwear, right? And that's what the nice thing is. Going to Vistage, it exposes that, right?

So it's like, hey, this person's having an HR issue. Well, so am I. And so is this person and so is that person, right? So it's nice to be like, I'm not the only one out there with these issues. And then you learn like, holy crap, everybody's going through this. You know, so I think, you know think that was one of the big things. And friendship, you're in these meetings, they get kind of deep.

I've made a bunch of friends through it. And when I say friends, they get it, right? They're a business owner, they go through this stuff every day. You can talk to them on a different level than your neighbor, right? Or your friend from high school that works you know, works a regular job. So I think some of that is also important.

And it gives you contacts, right? It gets you in front of people, again, business owners, contacts, you know, helps you, you know, kind of get a network of people around you that you can trust that will help you, you know, hopefully grow your business. You know, Bree hates it when I'm around somebody like you because I Enjoy talking about business, and I don't get a chance to talk to all my friends family cousins and stuff So she's like oh my god All you do is talk about business, and I'm like I know I don't get a chance to talk to anybody about this stuff

And you assures. I'll don't want to talk about it, so so I enjoy The discussions like my buddy Aaron Gainer has a massive plumbing company and he had an HVAC and electrical. Then he's in Columbus but he's out here his son's going to ASU so he comes out here we just dude he tells me something and I take notes and I'm implementing and he's like we text each other all the time and like it's nice because he's going to do 100 million this year. Man it's nice because I talk to people that like here's the deal, you hang out right now you're at Vistage. The best advice I can give you is you got to be able to adapt and change your circle quickly because as you're scaling it needs

to be I want to be the dumbest guy in my circle and that means I can't be in the circle because my goal is to win in my circle. I'm a competitive SOB. And then I gotta look over at this next mountain and say, huh, I gotta go back to base camp to start climbing this mountain. Who's the best, smartest person that's gonna get me up this mountain the quickest?

It doesn't mean I don't have friends. I have a lot of friends. It's just, I still, Dan Martell taught me this. He said, you can't pick your friends when you're in middle school and elementary school and high school it's like neighbors and but you can pick your friends as you get older and You know, it's not only about money either. It's about fitness and faith and and and fun and future self and the six F's I call it and So, you know if you want to be a better father or a better husband, you

need to like hang around with guys that don't go to the strip club. So really picking really great friends. And that that that's the time machine that'll put you 20 in six months, you can go 20 years faster. But just being around you want to become a better golfer, hang around with better three people that are better golfers when you go on your foursome. That's true. If you don't, you're not gonna play good and you're gonna drink the whole time and just get wasted. Yeah, no, that's good advice. I appreciate that.

Like that makes a lot of sense. Like I hang out with guys now at the Waste Management Open, I invited a lot of home improvement people there, not home service. Everybody there did over a billion. A lot of them were doing two billion. So I'm like, guys, I'm only going to do $320 million. Yeah, I heard you were talking about on one of your podcasts you're looking to get into

home improvement stuff. Oh, yeah, yeah, yeah, yeah, yeah, because my multiple is still two and a half times theirs. Well, you know, commercial, I mean, you can skyrocket in commercial. Well, I can't do it at 30% or something. The amount of dollars that are in that category. There is a lot of money My buddy is already doing 15 million in commercial. It's like I said, but you got Doc's leather storefront rolling steel You got all these different things and if it was just garage doors, I might do it

And here you like for example, if I just did firehouses in Phoenix, I can make a small fortune Yeah, I just it's something where I'm not going to dip a toe in and dabble. If I'm going to go in, I'm going all in. I'm hiring a whole team. I don't just go, oh, we'll just try it out and see how it goes. No, I'm going all in and I'm hiring a badass team to go, like, but, but here's the thing. Do we go into commercial? Do we go into water treatment?

Do we do front doors? So, I'm working on some cool stuff because my average ticket is about a grand, but I run 22,000 jobs a month. Wow. What if I get it to 5 grand? Yeah. Do you know what the company is doing now? That's what commercial does for us.

Oh, I know. The tickets are, you know, the project. Yeah, the tickets are massive. Yeah, so we have a service department as well. And same thing, right? Their service tickets are small, right? So it takes a lot more effort, a lot more jobs to get to that point where we can, you know, it's like, hey, we just secured a $10 million job yesterday, you know, one job. Well, as long as the profits there because if it's not bid correctly, you got the blue

book that you guys go to bid it on? No, so we don't, we try not to do hard bid stuff, right? So we've been around long enough now with 38 years, right? Everybody knows who we are business development Julia she kind of goes out and meets with all of our clients and brings in leads so it's all warm leads we rarely bid anything that somebody else is bidding on. Oh that's nice. So it's all negotiated work. And then you get to charge by the hour and so you can't lose money?

Not necessarily that but you get to work with them on the front end right so you kind of create the the budgets from the the beginning so it's not a surprise right so we come in we say hey this is a design we should do this is what it's gonna cost us right and then we bring in some engineers architects they design it as long as the price adds up it's like hey yeah everybody's happy because you told us this is what it was going to cost. We designed it. That's what it is. So that's what we like to do. And then they just sign us up and we move forward and everybody's planning. So what do you think an average ticket is? For us, probably around a million bucks. One million. So you need 100 jobs to hit 100 million. So, but I like to reverse engineer my numbers.

That's how you build a budget. And what I look at is here's my revenue goal. Here's how many leads I need. Here's my booking rate. Here's my conversion rate. Here's my opportunity job average or average ticket. So then I just look at the marketing side. And as long as those are good equations like good booking rate, good conversion rate, good average ticket. Sure. So then I just look at the marketing side, and as long as those are good equations, like good booking rate, good conversion rate, good average ticket, then you just pour gas in and get more leads, which means you need a higher right. Yeah. But that's the deal for me.

$100 million, what I start to do if I were you, $100 million is the goal. Here's how many leads I need. Here's how I'm going to bid it. Here's how I'm going to be an acquirer of great people to help run the business. And that way, it becomes a reality. And you share that vision with everybody in the company and say, here's the plan to get there,

and it's based on lead gen and conversions and collecting on time. And that way, you know, what's nice about $100M too is you start buying better. So you got to, like, negotiate with your vendors. Right. And that's a big part of HVAC Plumbing. Yeah, we're getting, and we're getting even at $50 million, I think, you know, like right now, there's already some guys coming in, right, and pottering and like, hey, how can we sign a contract or make a deal with you guys so you're buying, you know, straight from us and,

you know, not shopping it around? But yeah, agreed. You can leverage that, right? When you're buying a bunch of stuff, you can leverage that 100%. Well, I always say, look, right now, I'm spending $60 million this year, my manufacturer. Like, here's the old saying that I say. When you owe the bank $100 million, you got a problem. When you owe them a couple billion, they got a problem. You get to start calling your own shots. And that's what's nice about being in the garage door business in 20 states is I'm able to buy better than most companies. And they, you know, other, my competitors aren't very happy about it, but I'm like, just get bigger and buy more. Yeah. You know, it's not my fault we grew faster than you. And by the way,

I showed you and you're here trying to tell people how to do it, right? I tell them exactly what to do. I here trying to tell people how to do it, right? I tell them what to do. I'm trying to show you how to do it. I had 40 garage door companies come here about four years ago, and I said, how many of you guys charge this for a garage door and an opener? And they were shaking their head angry. And they were like,

how do you sleep at night? And I go, how many of you guys make sure your people can make six figures a year? You train them for three months. You give them the best PTO and insurance possible. They drive new trucks. You're allowed to be on billboards, TV, radio, like the HVAC plumbing guys. I want to you guys do all those stuff. I'll give you guys $6,000 worth of tools.

Any of you guys give you guys $6,000 worth of tools? Every one of them shook my hand that day and said, I'm going to raise my prices. Yeah, it's a way of thinking, right? Alex Ramosi said most people go into business. They find what's the average cost of this parts, how do I offer it for a little cheaper and to give a little bit more, not knowing that the people you're following are bankrupt,

barely making ends meet. You're not in business to make a living as a W2. You're in business to make prop, to make profit. And I think people forget that. Like, the number one goal of business is profit, or else you don't stay in business, your clients lose, and your vendors lose, and your employees lose.

Well, yeah. And that's the whole thing, too, right? Your employees are going to lose, right? If you're not profitable, and you're unable to grow, and you're unable to raise their wages, right? Yeah. You just stay in one place, right? And nobody wants to do that for very long. So, yeah, all your employees are going to leave, right?

I mean, you can't help them grow. How do you get leads? I mean, when you're going to meeting these people, these soft sales, is it just past clients? Or is it like, do you guys go to B&I groups? Or how do you get these soft touch points? Yeah, so all the above. There's events that we go to, right? Where, you know, people from our industry all get together, and you just kind of meet and greet, talk about it. We also are in a couple of associations. ABA, Arizona Business Alliance is one of them. They're- Is that good?

Yeah, they've helped us tremendously. So they do teaching and training, you know, like leadership training, project management training, stuff like that. But getting involved with them helps us because it gets us in front of our clients on a regular basis outside of the norm, right? Otherwise, Is the Arizona Business Alliance? Yeah. Okay. Yeah. And they're a good group of people. And the whole point of it is so we you have the unions, right? And the unions have their own training and their own things and their

own groups. And non-union guys don't really have a group, right? Right. So the ABA was created. It's AGC ABA. But they were created basically to help the non-union guys. Like, hey, let's get together. Let's talk about best practices. Let's help with the teaching and training, right? Let's help each other. There's 168 hours in a week. 168 hours. How do you make the most out of those 168 hours?

If you work 50, you sleep 50, you work out for 10, you still got 60 hours left. You can go on a date with your kids every night, you can take your wife on a date, watch your favorite Netflix show, read a book, and still got 20 hours left. So, people say, how do you find the time? I'm like, you get a good EA EA and you get your calendar budgeted correctly. Plan it. Yeah, plan it correctly.

And that's the equalizer. I don't care how rich you are. We still got the same hours. It's how could I compound mine more? I don't even, I don't know the password to my email. I don't look at email. Like, I've got a whole team now. I've got processes for this. Here's what I think everybody should do. Get an old-fashioned journal, you know, a calendar journal like the old ones that you write in, and literally every 15 minutes write down what they're doing. And then if they could hire somebody for less than they make per hour, which is an easy calculation to figure out, you highlight all that stuff and then that's the first hire you make. You got all this time back and you start making high-level decisions. And do you think Jeff Bezos is working 80 hours a week? You think he's working 40 hours a week?

He doesn't start his date till 10 a.m. He makes his important meetings between 10 and 1 p.m. He takes off weeks at a time This idea of butts and seats more hours equal more productivity is crap. I like getting my let but he says I work Seven days or you know three days to year one day. I don Ed Mylet, but he says I work seven days or three days to a year one day. I don't want to outwork anybody. I want to out delegate their ass. Yeah, I have a funny story about that. So I had a, when I was growing up in the business, obviously I worked for my dad,

but he had hired these project managers and it was funny to watch them because, you know, it was like who could outlast who the longest, right? And I remember leaving one night, you know, I usually stayed there till, you know, four o'clock and then left. Um, cause I always thought it was stupid. Like, why am I going to stay here even longer if I don't have any work to do?

Um, I just thought I was more efficient, right? I get my work done and get the hell out of there. Anyways, I'm on my way out one evening and there was a project manager passed out in his chair, right? Sleeping. And I wake him up and I'm like, what out one evening and there was a project manager passed out in his chair, right? Sleeping and I wake him up and I'm like, what are you doing, man? I'm like go home. You're not kidding anybody You're not just because you think you're working harder. I stayed here till 8 o'clock last night It's like if you if you got that work that I hated his wife. Yeah He didn't want to go home. Yeah, I just I don't don't understand the, you know, let's work my life away.

I will say unfair. I used to say, why aren't you here today? Like everyone takes Fridays now from home after COVID and it bothered me. I'm like, why am I here? No one else. And I'm like, you got to show face. And I still think it's important to see people in public and get to know them personal relationships. But now I'm like, I don't care if you work 10 hours a week.

I really don't, but I don't care if you work 80 either. Like if you're more productive and you're smart and you figured out a way to do things, like the biggest thing, we're taking a class, me and I've got two EAs and Bree helps a lot. So we're taking these AI classes because if you could input artificial intelligence, by the way, 50% of the top 10, they call it the Fantastic Seven or something about the largest seven, Apple, NVIDIA,

the biggest companies, 50% of all their money is going into AI. Like, if you don't start to learn it right now and start to get smart with it, that's another thing I'd fear just, you know, being a family business, is PE is at the cutting edge looking to all the technology. Yeah. And the bidding systems and CRMs. Have you guys implemented AI? And if so, what, like, what are some of the things that you're implementing now? So one of the things you feed in is you can feed in your income statement balance sheet P&L,

and it'll literally tell you, like, it could compare markets. It could compare, like, it takes all the online data, and it says, like, my buddy that I told you the plumber put his in, and it said renegotiate with your vendors because of the cost analysis of the supplies, which is the cost of goods. Wow. So, like, that's one way.

Another way is like I started using Chetch.BT just in emails, so I actually seem like I know what I'm doing. Yeah, yeah. And like I'll take books now and get the summaries. And just if I love the summary, I'll read the book. But if it's something that I like,

but the deal is, is I don't even know what I don't know. Like once, once, once you start using these tools, like AI right now, we built a software that listens to every call in the field. It's recording the call. This is a one person consent state. And it actually matches to our script. And then it tells you what they didn't do correctly, that was their voice inflection's wrong. It literally tells us in a snippet how to train them. Like this is the crazy thing.

It's like my call center right now, if I showed you Lace AI, it listens to every CSRS call. If they don't book the call and it automatically handles the disposition. I'm at 89% booking rate. There's some people at 75%. It tells me the objection.

It goes right to the call where the objection was and then it's got five trainings of people that overcame that objection for them to train on. Yeah. This is happening whether you like it or not and there's this exponential effect of technology will be compounding faster than human beings can keep up with it. Yeah. But just get ready. What do you think? What do you think about these autonomous cars like the no people driving these cars? Yeah, yeah, yeah. Well, look, it's going to change a lot because, you know, Lyft and Uber will be out of business. It's really big here. Obviously, you see them everywhere, the Waymo.

And whether you like it or not, you better either you're going to embrace it or you're going to get ran over. Well, just think, I mean, just think about like the autonomous cars. I have discussions with people all the time about this. I think it's going to be, so that's where it's going to start, right? I mean, who wouldn't, like for us, right? Get in the car, and maybe you have a driver so you don't need to worry about this for me.

I get in my truck like, I mean, 30 minutes to work, 30 minutes back. I mean, drive to meetings, you know? So, I mean, imagine how many, yeah, how many hours could you get back? And I mean, I could be on my,? So, I mean, imagine how many hours could you get back. And I mean, I could be on my, you know, my computer, on the phone. Why do you think Google's investing so much? Google's investing more money than anybody. You want to know why?

Because they're losing an hour a day of your ad spend. You could be clicking on ads. And TikTok's losing money on ad spend, and Instagram, and Facebook. So all these companies are saying, if we could get you in your car to be on social media and on Google, we get to make more money. and Instagram and Facebook. So all these companies are saying, if we could get you in your car to be on social media and on Google, we get to make more money. Yeah, not to mention we can bring down insurance costs

because, you know, people would be crashing into each other. Well, here's the problem. Listen, there's a lot of books about this, but what do you do? How do you think the police get funded? Through tickets? Through DUIs? Through parking tickets?

What do you think happens to all the parking lots? All that becomes usable. All the parking literally becomes usable real estate because the problem that I have with autonomous cars is why do you need a garage? That's the scary part. There you go. There we go. Is there any books that you've read that are like crazy, bad-ass like taught you a lot? Crazy, bad-ass.

Um, I don't know that there's any crazy bad-ass. I'm reading, uh, Simon Silek. Um, Cynic? Cynic. Yeah. Simon Cynic. Um, started with why? No, it's the infamous game or the infinite game.

Infinite game. There you go. So it's the infamous game or the oh, yeah the infinite game infinite game. There you go So it's kind of interesting Yeah, so his old deal is like it's it's it is infinite. It's it's never-ending Yeah, so you got to look at things people make decisions based on tomorrow, but you should make the long-term decision, you know Jeff Bezos says I don't care about the stock in the next five years Yeah, we're too focused on what this company is going to become and the client experience. So they'll spend money and even not make profits, but that's all tax plan. But anyways.

Yeah, that's what I mean. I feel that that's something that I'm looking at right now. It's like, you know, stop looking at the short-term, you know, duration. Let's look at the long game or the infinite game. If you want this company to run forever, right? Like you said, I mean, is private equity some part of the answer because it's like hey We need the money and the cash to you know build this and get the right training get the right people get the you know The right things in place for this thing to to run for forever

Yeah, well, I know that this company will be around for for a long long time at least a one and they had a P Company come visit me. They said what would you do with an extra hundred million I said I probably hire a few more traveling trainers and it would all go into marketing because they need to take more market share and I would start green fielding in a lot new markets like here's what's crazy at a check plumbing electrical the market cap is 200 billion the market cap of garage versus about 14 mm-hmm so like the opportunity in a check of plumbing theters is about 14. So like the opportunity in HVAC and plumbing, the problem is the sophistication of people is much higher in HVAC plumbing electrical because of that market cap.

So you're competing against, right now we take all of our data, we feed it into this, it's a data analytics model called Power BI. Okay. And I can load any outlier I want. I can load humidity. I can load in as data comes credit card scores. I can load in social media preferences. I can load in all these things to understand my avatar, which means I can create lookalike audiences and pixel people. And when you're dealing with this sophistication, like I say this sincerely and I feel bad for my competitors because how are you going to be able to beat me?

Like, you won't. Like, I'm making better decisions. I'm paying for more expensive software. And I say this, they ask me if I'm long-term greedy. I said if that means my family gets to win, my team gets to win, and my competitors got to join me if they want to survive, then yes I'm long-term greedy. How do people get a hold of you Josh? Like on a regular basis? Yeah well somebody wants to reach out chat

with you about commercial or this you know, Ben you're here, is there an email or find you on LinkedIn or what's the best way? Yeah yeah email's great jyoung at tempemechanical.net, you know, is probably the best way to get me. I'm always checking my emails. I live and die by email in my calendar. So I would say that would be the best. Lovely. And we talked about a lot of stuff here, brother. I'm going to have you just anything you want that we didn't touch upon. I didn't even use any of these questions. I know it's a great podcast when I don't use the questions. Yeah, no worries. I appreciate that. So one thing I wanted to touch on, so you talked about having people that are educated and smart in plumbing and HVAC. So we've kind of figured out there's a huge gap in our industry with talent, right? They just don't, nobody

wanted to be a plumber or an HVAC guy for a lot of years, right? Everybody went to college. So what we're doing to try and help with that is we're all, a lot of us are creating apprenticeship programs. So that's one of the things we're starting this year. And I think that's gonna set us apart. But really it's to educate and teach people because I'm sure as you know, people just don't wanna work on anything at their house.

They're afraid to. It's like, oh my God, my toilet broke. And you're like, well, lift the lid and look inside the plunger is broken. Like, I don't want to have to charge you $500 to come out there and replace your plunger when you can go to Home Depot and get it for 25 bucks. Like, you know, so, so that's kind of our mission and our plan is to, you know, kind of teach and grow the community, you know, even if they don't stay with us, you know, teach them how to like be better people and some of this stuff do it yourself.

Like some of the stuff is complicated. That's what we want to do, right? The other stuff, figure it out on your own, man. I don't know. That's my... I love that, man. I think, you know, teaching this younger generation, well, here's what we've learned is AI is gonna change. Unfortunately, Giseb might not have a job, our videographer, because AI is gonna change that. It's gonna change the way we develop code. AI is not gonna be taking over Groszner's plumbing

or HVAC or gutters anytime soon. So I already said, get into a good trade. And, you know, I did get an MBA, but I know a lot more. If I could go, you know, I got my MBA, I knew I wasn't going to use it to go into a profession. I just knew I was going to have kids one day and I wanted to tell them dad didn't skip out on school. That was my only purpose. And I don't know if I'd do it again. But no, Josh, you're going to be very successful. You got to keep keep in touch with purpose. And I don't know if I'd do it again. But no, Josh, you're going to be very successful. You got to keep in touch with me.

And I appreciate you jumping on the podcast, brother. Yeah, I appreciate you. Thanks, Tommy. Thank you. Pleasure. That's a wrap.