The Home Service Expert Podcast - Unlocking Financial Success in Business with Ellen Rohr

Episode Date: June 23, 2025

In this engaging conversation, Tommy Mello and Ellen Rohr discuss the critical importance of financial clarity in business, the value of mentorship, and the strategies for choosing the right business to invest in. They explore the significance of understanding financials during business transactions, the dynamics of team success, and the role of effective communication and leadership. The discussion also highlights key performance indicators for growth, leveraging technology for financial management, and the personal journey of entrepreneurship. Finally, they touch on future endeavors and the importance of community engagement.   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   00:00 The Importance of Financial Clarity 06:02 Mentorship and Learning from Experience 11:47 Choosing the Right Business to Invest In 17:51 Understanding Financials in Business Transactions 23:42 The Role of Team Dynamics in Business Success 29:41 The Power of Communication and Leadership 35:59 Key Performance Indicators for Business Growth 41:49 Leveraging Technology for Financial Management 47:43 The Journey of Entrepreneurship and Personal Growth 53:47 Future Endeavors and Community Engagement  

If your financials are a mess, a buyer will discount your company and not tell you. Like as soon as I see that the financials are a mess, there's no way that company should get top dollar for that 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. 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 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 is an awesome day because I have a wonderful lady. She comes on the podcast quite a bit. She's a big mentor of mine. She came in a one and helped me out a ton with her sister Gail. I got the amazing Alan Rohr on the home service expert podcast today. Hey, I love you so much, Tommy. I love being here. And you know, you feel like my son.

I have a son and I know what it feels like. And you're another one. You're a bonus. You're a bonus boy to me. So thanks so much. I mean, we go way back. Ali, he's the one who said you got to meet my boy Tommy. And I'm like, okay. And then I meet you and I'm like, nope, no, not having it.

I think you were more that way against Adam in the beginning because you know, it was just like I, I, I kind of had it up to here with dragging people through the process. I think it was, you know how you always project what you're dealing with? And when I met you, I just thought, I can't take someone or I have to convince or drag through or whatever. And you weren't like that at all.

So Al made me go back in there and we we took off like a rocket and Adam was great and you were great. It was you know really I think me just dealing with the fact that it gets very frustrating. You might relate to this too. When you share tips someone asks your opinion and you share tips and strategies and tactics where you've done something and then you just get resistance and you're like well then why am I here? Like what's the point of all this? So I think that's where I was at that point and I've been there many times in my life and I try to just keep going in because you know, Tommy, once upon a time when my mentor Frank

Blau tried to, he called it make me take the medicine, I resisted too. I resisted too. Like, well, that won't work. My guys won't buy it. My customers won't do it. I can't raise my I did all those things myself. So over the years, I hope I've mellowed a little bit. But sometimes I get a little frustrated. It is frustrating because accounting and finances is very hard to learn. You know, it comes second nature to you because you've been in the dogfight.

But you know, Al came up to me several times in our relationship and said, listen, I may not be able to work with you because I don't want you studying anybody else's stuff, not till you get your manuals done, not till we dial in your order chart and your depth chart. He's like, you know, I love that you're a learner, but there's information overload too. And he goes, yeah, let's get these things dialed in and then I'll be open to hearing other ideas. So Al, who says who is the cojones to say that?

Oh, he doesn't care. He, he, he will just tell me like it is. That's what we know. So great. And he's been, you know, not just such a great mentor to us, but our best friend. He's, and he's disgustingly right, Al. I know you'll be listening. You're always right. So, I didn't come to it naturally though. Like I am kind of dyslexic. I have a lot of energy. I'm easily distracted. Things you can relate to, right? Yeah. And back in the day, we didn't diagnose

Right. Yeah. And back in the day, we didn't diagnose us. I was just considered kind of a, a low attention span. Let's say that. But that really like, I wasn't geared up to look at numbers. I still don't see things quite right. Columns blow my mind. Spreadsheets are hard. I use a ruler or color code stuff. I mean, it still doesn't come easy to me, but what I found is if I can learn it, literally anybody could when the, when the compelling, why is there, which in my case was I was so tired of being broke. I didn't want to do this anymore.

I just had to fix it or I would go out in flames. Like I was okay going out of business, but I finally just said, okay, Frank was the guy at the time. I'll learn how to read a balance sheet, profit and loss. Thanks for your help. I'll stick with it. Had a couple of great accountants. I don't know how I lucked out with that. Gail was a huge help to me. And once the lightbulb started going on for me, I was like, I was like born again. Like, how, how, how does not everybody know this? I need this

in my life's work now. Like that's the impact it had on me because the balance sheet and the profit and loss, it's hard until you realize there's a technology to it. It's based on an equation. It's not a limitless course of study. It is something you can figure out. And if you're a plumber and you know drains and vents,

that's an equation. For every action, there's a reaction. These are equations. And that's all we're dealing with here. And that it really like my whole world opened up and I've been on this journey ever since, trying to communicate in ways that people can get it, learn it, and we're still doing that right now.

Yeah, no, it's a struggle because we go through this firefight of you gotta get the right brand, you gotta renegotiate with your vendors. I wanna, you know, I was with Ken Goodrich recently and back in the day he was having a conversation with Jim, who you worked with. Babe. Abrams. Jim Abrams. Yeah.

And it's interesting, I wanna hear your thoughts on this because Ken said there's one thing and he said by the way there were times in my life where he rubbed me the wrong way so regardless of the person that just this notion he said Tommy the things that he told me were be the highest price and pay the most. That's something that stuck with me be the highest price and pay the most to get the talent to keep the talent. What are your thoughts? Because this is where it comes in. Your whole, if I could shorten your lecture, it's raise your prices, raise your quality. Charge more to make a profit.

I mean, where did the money go? All these things kind of talk about the same thing. So what are your thoughts? You know, just to give props to Jim Abrams, he's a, he's a tough guy. Like there are moments, right? And, but what I learned about all my mentors is that, you know, take what you need and leave the rest, like an AA meeting, pull it through your filter. To Al's point, you can listen to multiple voices, but at some point you have to pull it through your own filter and discard that which does not align, right? And, but Jim Abrams taught me so many things that

of all the mentors I have, probably the voice in my head the most is Al, of course, and Jim, because Jim was so meat and potatoes. One thing he also told me, those are things are both right. You have to be the highest price and you have to pay your people better than anybody else. I want to get into that a little bit more because there's more to that than just paying them the most, a whole lot more. But we can come back to that. But another thing that Jim Abrams taught me, and this is so

good, so deceptively good, a couple things. One is make money with the sales you have today. Make money with the sales you have today. Make money with the sales you have today. So that means if you have a goal to do 20,000 this month or 120,000, whatever, that's your budget, that's your goal, and you only have 60,000 this month, don't spend more than $59,999. Don't spend more than $59,999. Don't lose money in a month. And this is such a cool concept. If you're paying attention week by week, which is my standard for the balance sheet and the profit and loss, pretty darn good, every week, it's not impossible.

In fact, it's easier to do it this way. But you run the balance sheet and the profit and loss, you look at them weekly and you're getting, you're narrowing in on it like the third week. Don't lose money. And there's a little leapfrog there, right? Like some of the payroll may be from the previous month. There's a little bit of leapfrog. But if every month, whatever you book for sales and whatever you book for expenses, if it's a positive number, you don't lose money for the year. You're okay. Like just get there. So if the three main KPIs, and this is all Jim Abrams, are sales, profits, EBITDA, and cash, first thing you got to do is sell, sell, sell, sell, sell, sell, sell, sell,

sell. Even if it's messy, even if you're, you're going to just eat it, but just get the enough heft up there that now you can work on profit. You've got to get enough in sales to cover basic costs. And then you can work on profit. And then you take those sales in cash and you pay attention to cash. So sales profits in cash, because if you operated a loss for too long, you have to go into debt. There's no other mathematical outcome. If you operated a loss to the point where you run out of cash, that's your only option. Business is really easy when you think of it like this. And this is,

this way Jim, Jim Abrams was so, is so brilliant. It's just, he focuses on the things that really matter, sales, profits, and cash. And let's get those straightened out. And you won't know where you are unless you understand the balance sheet and the profit loss. This is what changed my life. Yeah, I'm fortunate that I'm in a demand-driven business that

is not super seasonal. that is not super seasonal. It's not super seasonal. So I see specifically HVAC, which is a great industry. There's a few months where they'll go at a negative. But it doesn't need to be that way. You know what business, we want to talk about this too. If you were to buy a business, I'm all about making things easy. I tell you what I wouldn't buy. I never say never,

but what I'm not looking for is an HVAC business. And you know why? They're so good. Those guys are so good anymore. Like to be able to outspend outthink, you talk about it in your blogs. These guys are so good, so big. Why? I like, and this is why I love drains at Zoom Drain. Like the drain empire, gosh, we can take them. We can literally take anybody in any market. Like I feel like I better move faster because somebody else is gonna figure that out. And power washing. I love what Jared Williams is doing. You know these these kind of micro niches, there is a place to just kill it. Landscapers, I you know my

landscaper is good but I am I told them I'm gonna help you become great because you got the right stuff here but you're good and you're crushing it. If you get great, there's this guy's the limit for you because the bar is so low in that industry overall. Does this make sense? Yeah. Let's start here. So we'll start with me and you are both going to invest in an industry. I would say my first lesson would be I'm going to look at the market cap of the business and I'm going to say discretionary versus non-discretionary income, which power washing is discretionary just like epoxy floors. So I'd want to be something where when it breaks,

you have to get it done. You got a broken pipe, whatever that drains, you know, whatever it is, your garage door is busted, I would make sure that I can make it through a really nasty recession and that's by being non-discretionary income. How would you, and that's just one thing, but I want to go back and forth here. Yeah, well I love that, I love that too. So there'd be a couple of things we'd check off our list, right? One is, are there guys killing it in the market already? Do I want to go up against those guys or could I do so in a different way? Like you could go against Walmart, but you would have to go to a Trader Joe's model. Like you can't go be Walmart.

You'd have to be something that people don't like about Walmart and find that. So there may be a way to go into those markets like that. But I like what you say about non-discretionary. I mean, our close rate for drains, shouldn't it be 95%? Who's going to turn a drain cleaner away? Like, what are we doing that would make someone turn you away if you showed up and there's a clogged drain in your house? That's like to me, drains are so wonderful because of the ultimate

need notant service. You got to get that done. So that would be one of the tips. And the other would be, you know, just like the big guys, if you're buying a company, learned a lot at when I was working with Benjamin Franklin and at Zoom Drain and with all the clients I've worked with over the years, including you, I've, I've been either involved in or tangentially aware of a lot of acquisitions, either companies selling, right, or buying. And that is a really great way to grow your business. So I would also look at, I'd look at their financials. But here's the thing, Tommy, if I were buying a company

But here's the thing, Tommy, if I were buying a company and the financials are a mess, I wouldn't fix their financials before I bought them. I would think that's a way I can add value to this company. Is that making sense? So like anybody who's buying a company is looking like, how do I get back what I paid? Where's my ROI for buying this company? And one way is to understand the financials well enough to think, could I fix this company's financials and scorekeeping and then take it another, you know, quantum leap up? So I would look at the financials and I'd be able to tell if they were good or bad, but I would not necessarily

to tell if they were good or bad, but I would not necessarily fix them before I bought the company. So the tip here, dear listener, is if your financials are a mess, a buyer will discount your company and not tell you. Like as soon as I see that the financials are a mess, there's no way that company should get top dollar for that business. No, no. I mean- you see where I'm going? That's why we do audited financials now. I mean, if you're, we're involved with private equity, as you know, but you have to get audited financials. Yeah, but that's a different game than what I'm talking about. No, no, no, you're right. You're right. But I'm saying that, you know, I talked to a lot of people and they're like, look, at least reviewed financials. Like you should have that because if you ever need to get money,

like if you could put a buck in and take a buck 25 out, you should put as many dollars in that as possible. So I always say, get the money when you don't need it. Get on a cruel accounting, not cash, eventually, and get audited financials because you cannot get a loan from the bank with poor financials. It doesn't work like that. So that's advice to the person who's trying to sell his company? That would be advice for anybody that... Look if you wanted to raise capital to buy companies, you would need great financials.

Now look, I want to just get back to picking the company here. There's home improvement and then there's home service. Home improvement, I'm amazed kitchen remodelers, pool companies, these people could go windows. They don't have any leads. They go out and get it like they're door knocking, they're going to events, they're doing outbound calls. And I'm trying to learn that piece of the business because I think garage doors fall into both home service and home improvement depending on if you're selling a

new door or not. But I'd be curious to see. So you do a deal, obviously, the upside of any person going to do a deal, including private equity, is there's more room to grow. We got to grow this. We got to find more profit. We got to expand. We got to do greenfield, organic, buy and build. So what would be the size you, you know, and I know this is relative, but let's just pretend it's 10 million, 10 percent. So there's a million to profit. You'd probably want to buy in at a better multiple. And what would be your first few moves? Well, I think when you go to 10 million though, it's, let's talk about it in in that gradient, because like there's

a spectrum of buying companies and one end of the spectrum is you grab their phone number and their website, they go out of business, they're old, they die, you know, stuff happens and that is a tuck in. And then the next notch on this spectrum, point on the spectrum might be a young person who started their own company. It sucks. They didn't know what they were getting into. And now that person wants to work for you, brings their calls in. You give them 5% of sales, 10% of sales, plus a great job. And you move on. Like, so it goes all the way over to like the 10 million over is over here. There you have to have the audited financials. We're talking about EBITDA. For a minute, let's

just consider a company with no EBITDA. These are the ones that everybody's looking at that $10 million guy. But there's a lot of opportunity for the $1, $2, $3 million guy, maybe a few of them. You identify the market area and the niche, and then you can get a few of them. This is what Al Levy taught me a lot about, these napkin deals, where this person doesn't have any equity partners coming and knocking on their door, but they're going to exit their company. Al calls them the Ds. They're going to die. They're in debt up to their eyeballs. They're getting divorced. They're sick, diseased. Those those things change everything and there's so much opportunity for that. I'm interested in that. Now, I would invest with other partners who know what they're doing on more equity, you know, on the 10 million or bigger companies for sure.

But if you were to grow a company from Greenfield, I would be looking at those. In addition to marketing and branding and Dan Antonelli and everything else you need to do, I'd be looking at those tuck-ins right out of the gate for talent. People who want, you can't buy people that slavery, but for talent, someone who might want to come work with you as well as the ringing phone, the active website, the Facebook pages that are delivering those kinds of things. There's so much opportunity right there. Yeah, I agree. Those probably have crappy books.

Now, I just, I know I'm bouncing around, so help me stay on track, which is an interesting thing for me to say. The two of us trying to stay on track here. There you go. No, it's good. Look, ultimately, I want to work through these things. We got to still a lot of to talk about, but I want to point something out to you. Darius Livers and I were at dinner about a year ago,

and, you know, he's really good manager. I mean, he's a smart leader. And he goes, Tommy, if I buy a business under five million Aviva, I have to remove the owner. Because they are literally the sticking point. He's like, they think their way is better. So once you start getting to a certain threshold, they're very good operators, they've seen 2009,

they've seen COVID, they keep them. But I've noticed like in Quartet, the private equity, they're like, a small deal takes almost as much time as a big deal. It just depends on how much money you want working for you. You can make massive improvements on these small companies by moving a few things. But then again, I guess you gotta ask yourself,

how much is your time worth? Because let's say you take a $2 million company, don't get me wrong, you get it to 4 million, you get it to 20% now you got $800,000, maybe you get a 7X, it's real money, it's a five million dollar, it's a great return, but you know like Apex, KKR, Blackstone, they won't buy small deals because they got to put their money to work. So yeah, but you're in rarefied air now, most of your listeners are not there.

And so like the way to get there is this path. Right. And you also then keep your teeth on deals that aren't as risky, aren't as scary, don't involve so many lawyers or deal. Like there's where I'm going with this is, is kind of the, this end of the spectrum, there's opportunity all along it, but your personal interest right now, I might suggest is like, this world that's opened up to you the last few years. It's crazy.

And you're thinking it's crazy, get bigger and bigger and bigger. You're looking right now and you said, Look, I might be getting involved with some stuff. And you said landscaping, you love drains. Obviously, you're involved with Zoom drains. But what are the ones out there that excite you? People ask me this question all the time. I'm just curious what yours are. I think any home service business where you're not gonna do it.

I'll tell you, there's a big movement right now for home improvement versus home service. I'm still very cautious about home improvement. I like base hits and doubles. I don't like home run jobs. So unless you're a big company buying a new construction company or especially now with like what material prices are doing, it's Zoom drain other than the trucks and the jetter, which we'll probably see price increases, it's a labor only job.

It's a skilled labor job. It's a lot less volatile than a job with garage doors or something that depends on metal. So those are some thoughts. It also though, and you've talked about this before, if you don't have materials, you eliminate that variable. Materials allow you to leverage the labor hour. So for the same labor hours, you can sell big tickets in the same amount of time,

which is pretty sexy, but it's a little more volatile. But overall, I like I like base hits and doubles and not, you know, I think that unless you're big, unless you're really good at financials, operations, at marketing, moving into new construction or big install work, I've seen so much heartbreak there. Now, Service Titan is a big proponent of expanding into the commercial and construction arena. And the primary reason is that there's companies who are doing it and doing it well,

and ServiceTitan wants to service them. I wouldn't take it as an overall endorsement that you too should become a new construction contractor. Do you see the difference there? Yeah, I know, and I do, and it's funny because I wrote down on my sheet big tickets because I'd look and say, non-discretionary and big tickets. I got to run 23,000 jobs a month and I'm proud that we're able to do this and my team's amazing but you know if I was running a fraction of that and roofing in solar and the solar is to subsidize but in

a track plumbing electrical there there's a lot of things you know right now with this race to AI, I heard this stat come out that they need 500,000 electricians and a ton of commercial HVAC to build the grid, this AI grid. And I just think there's a lot of opportunities, man. I love the world right now. I love the game that we're playing. And yeah, I mean, it sounds like so would you do a lot of deals now that you're thinking about going in on some stuff? Are you looking for a couple to really focus on? Are you going to say, look, I'm just going to basically consult them and come in and try to get 20 to 30%? Where do you see the best opportunity? For me, and this might be, you know, this might

spark some interest for other folks. I like working with the team. So I'm gonna look for folks who are doing deals and then I can be the lieutenant, not the general. This is something I've learned about myself over the years. You're a general, I'm a lieutenant. Like I like, if there's no leader in a situation, like if we're on a lifeboat or something,

if no one's stepping up, I'll step up. I can't be without a leader. But I really prefer to be in a situation where there's a team and there's someone whose vision I love and I like to align myself with that person. Now that's because I've become self-aware over many, many years. I'm an older person. So one of the things to consider as you do this is do you wanna be the CEO? Do you wanna be the king or the queen? I have been, and I've had tremendous successes in my life,

but I'm also like, eh, let somebody else do that where the heavy, heavy, heavy is the head who wears the crown. I like to support and facilitate and work with other people. So that's something that I'm looking for, are great partners. I'll never be the CEO of another company. I like what Warren Buffett says. I'm still enjoying this path that I'm on, but I started to realize Richard Branson, he doesn't, he's not the CEO of any of his companies. He just hires the best and lets them build a team, you know, and I think that's super powerful. I know.

There's and there's people who have that itch to scratch. Let them scratch it. Yeah, like I don't really. You know, like it is, it's a lot of work, a lot of stress. Well, there's there's adventures to be had. I like supporting people. I like mentoring. I like doing what I do. And the piece of it that I can help with is this financial literacy piece. I'll do that. Love it. Well, I wanted to talk about your working on the signature financials.

And obviously we worked together for a long time and I know the known financial position, the money in the bank. I'm not doing it the same way we did, although I get a whole report daily and weekly. I know what's in the account. I took what you gave and I modified it to our business a little bit, but it's still the basic things. Like I know my month by the second of the next month, which is crazy, but we've got FP and a people. We've got a big finance department. It's not big, but it's bigger than it was when you were here. We were really not set up for the size

business we were. Well, you upgraded too. I mean, and it doesn't make people worth less just because they got you to where you are, but then you need someone who knows more. You've just been willing to upgrade your team as you go. Hey guys, hope you're enjoying today's episode. Quick reminder, you only have a few days left to grab your Freedom 2025 Early Bird ticket before the $5,246 in bonuses and 20% VIP discount go away. And when you add in flight and hotel prices that keep going up, procrastinating could end up costing you thousands more.

So why should you come to Freedom 2025? One word, results. Here's what one past attendee said about coming, this changed our family tree. My kid's future is different now. Another attendee, after applying what he learned from us, went from 500k profit to $3. million dollars in just 12 months. Kevin O'Leary said it best. That's why he's inviting you to Freedom 2025, the number one event for home service owners. So there you have it. Freedom 2025 is where 10 million to 500 million dollar owners, including myself, break down

the exact strategies that are helping us win even in brutally competitive markets. Don't be the guy who waits and regrets it. Go to freedomevent.com now and lock in your spot. That's freedomevent.com. Now back to the episode. Top grading. We got a meeting next week in Milwaukee and you know they called it the Keepers Test at Netflix and the question I have have for you, Ellen, is, you know, this is basically if you were a manager is, who would you be willing to bet the future of your family's life on? And if you're not, then why are they still here? I mean, trust me, there are people that don't sell a ton, but they show up every day.

They want to learn. They're eager. They come with a smile. I'll never give up on those people. And then there's top performers that are cancer. So the Keepers Test is something I think everybody should do. And, you know, sometimes I found in my past, I've kept guys, typically technicians that could sell well, but were cancer. And I learned the hard way that, uh, let me add to that too, because there is this very egomaniacal assumption in that I'm doing them a favor by keeping them that, you know, I shouldn't let go.

Like why? Because that person would never be successful without you How many times has that person left and gone on to do? Great things at a company. That's a much better fit, right? Just like we're not the only path To to greatness. I think I think most people keep it's good. They keep these performers I don't think it said they don't think that I think it's that they're not, they don't like giving up the profit. Especially when you're small. But I would say there's actually in my experience, there's more of this loyalty. Well, they've been with me for 20 years, they've always shown up. And but at some point,

if they're not performing, and you know what, this happens a lot is when someone moves into like service manager. Now they're not in the field every day. They're at the desk and they really don't have enough to do. And so they're there may be a glorified dispatcher at this point, but they're a good person. You have to watch for that person has to either grow or go. And that can be really tough. Grow or go. I love that.

Is it you've heard of the law of the lid? The law of the lid. or go. And that can be really tough. Grow or go. I love that. Is it you've heard of the law of the lid? The law of the lid. The law of the lid is. It's John Maxwell. What he explains is the chief, the leader, the CEO or founder typically becomes this threshold of where the company will grow.

So the lid, think about a jar that's tiny. There could only be so much water in that. But as it grows, the lid goes up, the whole company. So my job is continuous learning and continuous improvement. And then I started taking guys like Luke and Leanne and all my guys to Pantheon. And we started going on shop tours together. It's so funny. What I've realized, Ellen, is I was allowed to dream, but no one else was.

I was allowed to get these ideas and do shop tours. And now that they're involved, they're just loving it. They got ideas. It's their ideas. And I always got a word in them. I'm like, we're not changing a lot. We'll take one thing from each company or one thing from Pantheon. But we are very successful. So let's not rebuild the ship. It's a pretty good ship. But you know, they're so involved now. And it doesn't need to be my ideas. In fact, if they are my ideas, I told,

I don't know if I told that I'll leave you this or I told somebody recently, I said, if it's my idea, it's gonna fail because the team doesn't really mind it. If it's their idea, they're gonna run hard. You know who taught me a lot about this topic is Jack Stack who wrote the great game of business. I don't know if you've read it.

Yeah, no, you told me about it. I read it. Yeah, and I just love him so much. What I've learned over the years when you say shop tours, go to see someone shop. Go once a month. Wyatt Hedward's story is the shop tour. He and Destin took off on the Good to Great Road trip and just went to see some shops and blow their minds.

They could do it, we can do it. You know, that kind of thing after being in business for 50 years, 20 years under his helm and why it starts these shop visits changes everything. Shop visits ride along side by side. You got to walk among the troops to see what's actually happening and where the problems are. And what I found over and over again is your team knows what's wrong and they will help fix it.

Sometimes they don't have either the house dialed in or the construct. This is where planning power comes in. The construct, how to run a project to get a project done. But oh, I'm getting goosebumps when you connect the dots with this, the great idea and planning power. Now, these guys are just taking it and run with it. It's so exciting. But you got to spend some time, you don't got to do anything.

But I'm yes, me on I'm telling you what I think. The the shop, the shop tour, the ride along and the side by side. Are you always your job? Abraham Lincoln was losing the Civil War so badly. Up to 750 people, Americans, brothers, killed each other in this horrible war. And he knew it had to end.

And so what he did is he just started going to the battlefield and talking to the soldiers about their leaders. Are we gonna get this done? Do you know what you're doing? Do you know what the cause is? And this is where General Grant, I'm super simplifying the story,

but basically General Grant was considered a leader. Yeah, I don't know if it was Ulysses S. Grant. I don't know. I don't know. We have to fact check. But he was drunk. He was considered by the higher ups to be a not great leader, but his men

Loved him and and his team believed in him and that's how we identified Okay, it's you and me. We got to end this war and that's that was really a turning point again I'm oversimplifying history and that's what happened But the inspiration is your team will know who the leaders are, what the steps that we need to take. They won't know how to do a project. So this is where planning power or EOS, Gina Wickman, Trackman, something, some formal way of then empowering whoever

you go to Pantheon with, and they come back with that one great idea, that will turn into ether unless there's some formal project management. Yeah, I know 100%. Ideas go somewhere to die. Al taught us the top five, the top 30, the top 100. I just brought on a very, very high level. I've been working with her at the family office. She just came on full time as a project manager day one. And my brother-in-law, she used to work at GE under him. He managed 800 people.

He goes, you know, Joan could handle 50 people in her sleep. He's like, she will hit. She's so good. She starts out with going, what's the end goal? What's the priority? Is everybody rolling in the same direction? Because these projects at my level, they don't just live in marketing. They live in Operations they live in the finance department. There's got to be this

Unsiloing and here's what here's what happens You'll know exactly what I'm talking about. And this is the most frustrating thing is a manager We're in 40 markets 22 states. They'll call the marketing team and they'll go we need more leads, but yet they're getting zeros They're not getting reviews. The conversion rate's not where it needs to be. So now I'm like, no more. I know we live, die and breathe by our budget, and we love our budget. But in certain markets, we're not going to hit our budget.

And in markets, we're going to exceed our budget. Don't worry about that. Even though everybody's bonuses depends on it. If you do not have your key performance indicators dialed in, we're not going to overspend, period. That's where I'm at now. That's what Jim Abrams spent about make money with the sales you have today. The budget is terrific, but you've got to start living on what you're making on a monthly basis in order to survive long enough to start playing a budgeting game. And at the beginning, you really don't know. There's so much guessing that goes into a greenfield or something like that. So absolutely. You know, if we want to get into this a little bit too, like if

I was going to look at a company, big or small, I would suss out whether or not they know what they're doing when it comes to accounting. And can I give a couple of tips about this? Because I felt like when I was getting ready for this, I thought, this is what I've learned recently. And these might be some really hot tips. You're looking at a company and they give you their financials and you're like thinking, okay, are they any good? Are we going to be able to improve them? Is it true? Like I always question, we never know if it's right unless we audit the financials, never know. But you as the owner like Ali, we will say that ultimately, there's two managerial positions you can't

give up to remember this marketing and the finance. Exactly. And what he means by that doesn't mean you're not going to have a CFO or good bookkeepers or an accountant to to help you with your tax strategy and all that. You'll have all that. But you manage them. If something happens with the money, they don't go to the pokey. You do. You are ultimately always responsible for the money. So adopt that stewardship, you know, lay claim to that, I'm going to pay attention. And that's really all it takes. Because you can ask a lot of questions. So my tip is that when you go through a set of financials, and I only look at two reports to start, if these are crap, then I don't go any further. But the balance sheet and the profit and loss, every other report is a subset, including your statement of cash flows. It's a subset. It's how these two interface. But the balance sheet and the

profit loss, only two reports and everything else is a subset of that. So you're gonna go line by line, start with the balance sheet and start with cash. Is it right? How do you know it's right? And then what I would do is read the right side by side with the accountant, or if I knew how I'd do it myself and I do go into the report and see when was the last time cash was reconciled. Like it says, there's a date, there's a stamp. Like you can check this stuff out. And if cash is right at a company, this is going to sound super nerdy, but if debits equals credits,

that for every debit we have a credit, if cash is right and more than 90% of all transactions end up going through your cash accounts, then half of all your transactions are right. It's a big deal for cash to be right. And if cash is wrong, if I'm buying a company, a smaller one, one that doesn't have any kind of real, right there, I can't trust the EBITDA, like if the cash is wrong, everything else is suspect. So just knowing that cash is right adds value if you're trying to sell your company,

make sure cash is right, or it gives you an opportunity that, hey, there might be a way I'm going to discount the purchase price of this company because it just got riskier. But there might be a way that I could add some value here by getting the financial straightened out. And you're just going to go line by line as a our right. AR is almost always wrong. If I were a betting man, I bet every time it's wrong. Same with AP. Same with inventory. inventory is never right. I bet it's not

right at your shop. I that's how certain I right. I bet it's not right at your shop. That's how certain I am. No, it's not. Inventory is one of those hard things, but I'll tell you, AR, one of the big magnifying glasses we put on to the business after we transacted was why is your business 6.2% AR? When you collect the money then in there, we dug in just, you know, because these financials actually give you insights and the installers were not collecting. They said, well, the homeowners weren't home. And how, what kind of recourse do we have when the, once the door is installed to collect? We can't just go repo the door. So we did a pretty

good job, but this was a two year assignment. I mean, it was, and now we, you don't get paid. You do not leave that job. You do not leave until, you will not make any money on that call. Like we used to pay them if they ran the call. Well, this, I'm getting excited about this because where the problems with accounting usually emanate, so cash is wrong, undeposited funds has never been connected. You're bringing money in from the bank and from ServiceTitan and all of a sudden

we have 5.8 million in undeposited funds. Like things like this happen. But the problem emanated at the call taker, the dispatcher, the service tech, the price book. Like that flow of information, part of the auditing is you have to be willing to look at business units and job types and are the business units pointing where you think they're gonna go

and are there just a few classes or a few departments? Like the balance sheet and the profit and loss should give you the summary information because you get the detail from the additional reports and there's so much detail in Service Titan. I don't know, this is not going to be an appropriate conversation for you, but if you're listening, touchless journal entry integration with Service Titan, especially for a smaller company, one that isn't imminently going to private equity right this second, I'd do it in a heartbeat. I'd do it in a heartbeat because it

insists that the bookkeeper, the controller, the CFO consider that the Service Titan software and the accounting software are one system. Yeah, right. They reconcile. Yeah, they wreck it because so often, and this is one of the reasons why the books are so messy, Service Titan data is going on over here. There's a hot mess with the accounting. It hasn't been reconciled in forever and we're just driving blind and that's happening a lot and it's the owner's job to nail it down and it's a project. That's what we talked about at Home Service Freedom last year. Yeah. Make it a project. Yes. I, you know, you're different than I am, but you got so

much more experience with financials. I know my CFO would have a field day. I would just say, look, is your service time today to accurate? And I can see that very quickly. What's your booking rate? What's your conversion rate? What's your average ticket? What's your cost per lead? Those four things are how I build the whole business. And I'd say, look, it's so simple. You look at their cost per lead and you say, could I get more leads? And then you say, could I increase booking rate? Could I increase conversion rate and increase average ticket? If that's the case, typically you could triple the company very quickly. And then on top of that, there's arbitrage, which is my favorite word. It's on my license plate, arbitrage.

And people don't understand that. And Ishmael gets mad at me. He's like, quit explaining that pool to people. It's too complicated. I'm like, it's not complicated. If you buy it for five and it's worth 10, you double, that's five turns of arbitrage. You know what I mean?

Now tying that together, what you just described, and it's the tech close rate, the CSR close rate, your cost per lead, and what's the last one? Your opportunity job average, your average ticket. So your average ticket conversion rate, booking rate, and cost per lead. Okay, and I'm 100% agreeing with you. Now where your CFO will get excited is you do that and your sales, profits, and cash should go up. And so unless those are dialed in, we won't be able to know that. And now we don't have the

evidence to go to private equity. Like that's the dovetail point of your stats and the three main stats is that we've got to pull those into the biggies, which is the balance sheet and the profit and loss. And then, you know, the statement of cash flows is really just like, well, how did that profit make it through the balance sheet? So we can, we can get a little more detailed there, but the, the importance of the stats you just talked about, those are the driving stats. Those are the ones that'll impact it. I could just say to someone, you need more sales. And I can't tell you how many times I've been given that advice. Duly noted, we need more sales.

But the four you just described are how you get more sales. And those are all coachable moments. And they're involved the frontline team. That's it. That's the connection. You're helping a lot with Service Titan. I'm having so much fun. So Service Titan, by the way, the listeners need to understand that if you're helping a lot with Service Titan. I'm having so much fun. So Service Titan, by the way, the listeners

need to understand that if you're not on Service Titan, the home service space, there's going to be a discount given on the company. I mean, it's weird that like I don't have anything against Jobber or Housecall Pro or anything else. But it almost shows that you're less sophisticated. It is like Service Titan is the machine that gets you a premium price.

And by the way, this is what I do is I go into the company, just real quick, I'd renegotiate with all the vendors. I'd buy absolutely all new trucks with Dan Antonelli's logos. I'd appreciate it all, you know, because there's a lot there with just culture and the perception of the clients. Oh, so true, so good.

Yeah, sorry to interrupt. Yeah, well then I'd go to Service Titan. I'm underlining now. There's a lot of things, a lot of pro products at Service Titan. I'd get on in tech because it's easier to get on that tool than wait for yourself to outgrow QuickBooks, because I believe that no matter what company I was invested in,

I'm really good at generating leads and attracting talent. And I think that's both in the marketing realm. And, you know, just these fundamentals, people are like, what do I do today? And I'm like, well, I had one guy, he heard a podcast. He went and hired Dan Antonelli, spent 30 grand and he goes, now I don't have enough money for inventory. I go, dude, I didn't, there's an order of operations. If you're broke, by the way, if you're broke today,

don't quit your job. You're gonna have to be working 80 hours a week. I'm sorry, it's called sweat equity. And don't go get a big loan from the SBA either, cause you'll lose it. You wanna make these mistakes small. Yeah. And you will work a lot, but this is another thing.

The good stuff is the hard stuff. When you write the book, that's the story that goes in it. You know, backing up to, Service Titan is going to add value as you go to the P.E. market. There's no doubt about it. Moving to intact, it's because that's the language spoken there and good on service Titan for getting there and they deserve to.

And Aura and you know, I'm big fans of the founders. It's why I'm here. I love them. And when I went to the party in Glendale celebrating the IPO, did Aura tell the story of the days that went super smooth? Like you came in at nine o'clock and things went well and everyone was happy and you went home.

No, he told the stories of the day that everything fell apart and the bank was calling the loan. And this is because those are the good moments. I think there is this understanding like what is hard. Jim Rohn says that easy is something you can do. And if you can do it, is it one more phone call? Is it, it's usually one more phone call. It's one more relationship. It's one more connection and none of it's that hard. Is it?

Like being a single mother with nine kids, I would say that's hard. But like some of the things that we call hard I think are just like that's really the good stuff. That's the thing you'll talk about in your book. That's the story you'll tell when you go public. You know, these are the things that make it fun. I don't know. I've just got a different perspective about it but I'm always looking around, that's that hard? You had to put an Indeed ad together? Oh my God, how do you get through your day? Yeah, you know what real hard is? Hard is last week, I went out to a client's house

and their daughter is in remission, but five years of cancer. She was at Ronald McDonald. And I was crying profusely. And we gave him the door and opener. The family, I mean, you should have seen. It's just devastating. But she's OK. I mean, thank God. But all I pray for is I'm going to be a little bit of an older dad, but you

know, health is such an important thing. Like, you go to like a third world country, we got it made, man. Like if our heart is, are we going to make 150 or 200,000 this year as a business owner? It's like, you know, jealousy and envy of trying. It's the worst thing is when you look at people and I do it too. Robert Dirkovich or whatever the Shark Tank guy goes, man, when I got a G4, all I wanted was a G6. When I got this, I wanted because comparison is the thief of all joy.

And he goes, now I can figure it out. I just want to say that everything in my power. On my deathbed, like I went for it and I failed a lot, but I you know, the failures are who make us. It's not when we tell this story, it's definitely try triumph over these these they're just speed bumps really. It's just some people stay in that course for 10 years. I see them 10 years ago and they're still in the same place. Well, I think a lot of it comes with how we talk. We you know, thoughts become things, words have power.

In the beginning there was the word and the word became flesh and that's the end of my Bible quoting because I will burst into flames if I continue on that path. However, that is how the universe works, right? That's that we think about something if you're going to create a garage door, somebody thinks about it, and then they draw it and they talk about it and then they write out, then it becomes something. So when we talk about the last 20 years and how it sucked or how your mother ripped you off or, you know, if we continue.

And I believe in therapy and I think there's places to get that out. But I am not your therapist. And so I will suggest you get therapy, but when you're in my presence, and my team members will attest to this, I will say, watch your words. Don't speak into power, those things that you do not want, because don't we hear this over and over again

of how hard it was or where we are, how long it took, and the reason we're here? None of that matters, because the point of power is now. Jim Abrams' partner was John Young, and John Young taught me something really powerful. He said, if you're going this way, and you want to go this way, all you have to do is do that. It's just one, it's like just one step. It's not from there to there. It's just one step. And, and if you're really, really clear on what you want, maybe it's your first million, maybe it's 10 million, maybe you want to buy companies, maybe you want to sell your own. The clearer you are, this is where Jim Abrams geniuses, I tell you this, I would never bet

against Jim Abrams because Jim Abrams taught me the clarity, the power of intention. He, that is what he's going to do and it may take a different how, but by God, he will get there. And you have that. You have that. You're getting clearer and, and why not just for the game of it, even if you fail, just for the game of like, this is the vision and who wants to go on this journey with me? That's worth thinking about what is it that you really, really want. And then speaking of that, not of what you've got. Optimistically, the way we talk to ourselves matters. I always find a way to say yes on a lot of things.

And so many people, you know, my buddy Joe Paul says, it's got to be elf, easy, lucrative and fun. Nothing's easy, but you know, I was on a podcast. Is there something you can do? I was just on a podcast with a guy, his name's Ivan. He started BNI 40 years ago. Oh, I know him. I met him with Howard Partridge. He's amazing. Yes, phenomenal. And he goes, let me leave you with this, Tommy. He said, and I believe in this,

and I don't think this is authentic to him, but he said, you don't need to do a thousand things great. When you look at business, sometimes we think we need to do a thousand things great. He goes, you need to do five things a thousand times great. But you don't need like if you get good at the call center and I go back to my stuff, you knock on the door, you earn your business. You are in the client's business. You make offers. You know, what should we do? Joe Crisara, you know, get the right offers out there. And you just learn a lead gen.

I'm hearing that people are not getting good leads right now. Not every industry, not every company. I mean, you know, I talked to Aaron Gaynor this week and he's murdering it. But there's a lot of people that there's a lot of uncertainty in the air. And they always go, I need more leads. I'm like, your booking rate better be through the roof. You better be calling customers back. Zero abandonment rates, zero cancellation rates.

You know, do more with what you got first before you pay for more leads. Well, when we get a bad lead, who would call a drain cleaner if they didn't need one? Who would ever pick up, who would search it? I would rather, I'd rather slit my throat and I'm in the business than deal with a drain problem today.

Like just like no one wants to call an HVAC company. So if they've called, there's something there. Now you may not be able to help that person, but it's a chance to practice. And there are shops, there are technicians, God bless them, who look at every opportunity as a chance to practice their craft. I'll go. Warranty calls, I'll go.

The best calls can be warranty calls. Now you did what you said you were going to do. Oh my God. And there's just, there's, there should, the close rates should be minuscule. The dog got out and the customer went after the dog and so I didn't get it to sale. Like that should be the only reason. But when you ride along, what you realize is,

first off, techs often don't know why they're bad. And I want to compliment, who was the guy on Ishmael's mastermind? I was on one day and he was the star and I was listening in and he was so good and he's your trainer. Is it Mike or Matt? Who's like the? He's talking about Brian Burton. Oh no, John. No, John. Yeah, John is one of my trainers. Yeah. John was on Ishmael's mastermind and I'm going back at everything he

said. Just he's a guy who has refined his craft now you could aspire to be that good but you could be 80% of good that John is and still close 95% of all your calls he was just so like when you ride along when you go to a shop don't always just talk to the owners here's another tip I wrote down right along with the tech and watch him. What's he saying? What's he doing? So often they don't say a lot.

I know some really great techs who are really quite introverted. Customer talks. They have a lot of confidence in their technical skills. And then they say, how would you like me to proceed? And they shut up. Customer thinks about it for a while and says, let's go with the gold grandiose

premium platinum package and they go great you've made a good decision here's what happens next I mean it doesn't have to be that complicated now John was so good because he wouldn't use all those tools if he didn't need to a guy came to my a guy came to my door knocking on doors which I love somebody gonna Somebody gonna knock on the door, I'm gonna be nice to him. Knocks on my door, I open up, there's two kids. They're looking at each other like, are you gonna go? I'm gonna go. And I'm like, oh, I can't wait to see what happens here. So the one kid, you know, gets brave and he says, you know, we're gonna wash your windows and Barb signed up. My neighbor signed up. I'm already, Barb is the best person in the world. If she signed up like

that was testimonial like that, I'm already like, okay, Windows washed. Yeah, my other guy wasn't that great. Let me do it. I'll say yes. And then I said, yeah, when are you going to do Barb's? Tuesday. Okay, you could stay and do mine. And then he started talking about price. And I said, I'm going to tell you something that'll change your life. I've sold millions of dollars of intangible assets in my life. Here's something, when your customer says, yes, stop talking. Yeah. You can undo it. You can undo it. You can undo it. That's where John was so good because he's reading that.

Why is that person saying that now? Maybe I should ask him a question or they said, yes. Okay, great. Here's what happens next. I'll let you know. How would you like text or email text? Great. And the whole time I'm on the phone. I'm on the phone with Howard Bartridge thinking, oh, I shouldn't have put it on mute. He would love this conversation right now. But this is like, you can get guys good if you have a system, if you know the stats and then you engage them in why they would want to be good. And I think that's one of the things that I want that I see when I go down to your shop is that the meetings,

you have a lot of communication that happens on the tech, on the trainer, on the service manager level. Like it's not just people coming to hear from Tommy Mello, they can get you on stage or in podcasts. But that moment where, that's why Pantheon's so great. Bring your team. How many people do you bring to Pantheon? 20.

20 people. So you can talk to Tommy, of course you can. But I would find John, I'd talk to John at Pantheon. I talked to the, you know, who's in charge of the call, talk to the people actually doing the work every day at a company that's crushing it. And you're going to come up with that one idea that you can go home and pitch your boss on. You know, I'll go ahead. Oh, are we over time? I love you so much.

We're going to close out here. I just wanted to tell you one thing. I interview a guy each week, one of the top performers, and he came up with this line. And it's, you know, the garage door is the number one ROI in the home. It is. It's 194%.

So when you ask me how much is a new garage door, his response is, it just depends on how much you want your house to go up in value. And it's been working so good. So the power of the team of 500 guys out there learning from each other and trying new things and then sharing it with the group is so powerful. So Ellen, let's just let's close out here. So we've got signature financials coming out.

We've got Pantheon. We've got some stuff in Australia. Talk to me about what's coming. Yep, yep, yep. Pantheon, Tommy, thanks for bringing up Pantheon. You're such a great ambassador for, you're a super ambassador for Service Titan. And it's because you're just a great person for Service Titan to work with. I'm now their brand and marketing lead, which means I'm in charge of setting up this brand ambassador program, shining a light on people in the trades who are doing really cool things and who have the personality to share their thoughts, their visions. And so I was happy to be able to reconnect with you in this role. Like yay, Tommy can be on my

team. And it's been really fun to, to get to visit with you along the lines. I know we're going to, are you present? You're presenting at Pam? Yeah. Yeah. I think me and Hoffman are doing something actually. Oh, fun. Chris Hoffman. Yeah. Oh, what a company. What a guy, what a family. They're absolutely amazing. So why would you come to Pantheon? This is my endorsement of Pantheon. I have been, I'm old. I've been to thousands of trade shows.

This is the one. This is the gold standard. You're gonna meet people, I think five, 6,000 people are gonna be there. Players are gonna be there. Folks who can help you get to the next level and you're going to have fun and you're going to learn stuff. And certainly you'll get a good look at the software, how to use it better. Bring your whole team because you can divide and conquer. I love Pantheon. I'm super excited to be there. And

I can't wait to give you a big hug when we see each other there. It is, you know, my first year was 2017, 2016, 2017. First Pantheon, I met Tom Howard, he had his backpack on. I met all the guys. I met all the guys I'm buddies with. I got introduced to Ken Goodrich, I met Ken Haynes, Darius Livers was speaking. And I don't think people understand that community and what you can do with it if you treat them right.

They'll give you everything, including myself. Did you want to just real quick for those Australian listeners? We're going to come to Australia. I don't have all the details yet, but hang tight. That's what I'm going to say. Hang tight. And Tommy, you and I will let our Australian friends know the details of our adventures in Australia, but you have business there and you're going and I really want to leverage that opportunity. Yeah. And Tom Howard will go for sure.

All the Down Under friends, what's up? Yeah, I love them so much. And then signature. They swear down there. I love that. Signature, the signature financials. Do you want to just give a brief overview, then we'll wrap it up? Well, you said moments ago that you don't have to do a thousand things right.

This is what Ivan said, you just have to do a few things right. That's really Al Levy's concept with the seven power contractor. There's seven areas of your business. And if you just do the basics in each of these areas, you've got a good chance of being very, very successful and you your evidence of that. So with Helena and Xavier and your team, what we're developing is Al Levy's seven power construct. And it's called the Signature Power System, I think. Now, I, Al always deferred to me on the financial piece, and that's something I'll do the rest of my life.

So I put together a program, we're gonna be launching it this summer, where you can learn your asset from your elbow, financial basics, and they did such a nice job with that product. And then Al and I are gonna connect to do sales coaching power, which is combining a better way to pay your team,

simple accounting methods for making sure they trust and believe you when their paycheck comes out, having it be productivity based, some kind of compensation program that rewards the right stuff, as well as then how do we keep score with the guys with Service Titan, with job costing, with those great features that we have

at our fingertips now with Service Titan, it's gonna be really exciting. So thanks, I'm so happy. Thank you for asking me to play. I love your team. I love you. I love you too. And let's do this again. I got 20 things we didn't even talk about here. We're great. No, I'm looking forward to seeing you and you have a fantastic day. I appreciate your time today. All right. I love you. Bye guys. Thanks. Hey there. Thanks for tuning into the podcast today. Before I let you go, I want to let everybody know that Elevate is out and ready to buy.

I can share with you how I attracted a winning team of over 700 employees in over 20 states. The insights in this book are powerful and can be applied to any business or organization. It's a real game changer for anyone looking to build and develop a high performing team, like over here at A1 Garage Door Service. So if you want wanna learn the secrets

that help me transfer my team from stealing the toilet paper to a group of 700 plus employees rowing in the same direction, head over to elevateandwin.com forward slash podcast and grab a copy of the book. Thanks again for listening and we'll catch up with you next time on the podcast.