The Koerner Office - Business Ideas and Deep Dives with Chris Koerner - From DoorDash to $81K/M With This Overlooked Business - Ep. #332

Episode Date: September 4, 2026

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Transcript
Discussion (0)
Starting point is 00:00:00 So in August, we did 81,000 in revenue. Holy crap. Your third month. And how long have you been at it? 85 days. And the crazier part is as we're sitting here, September has just begun. We have $54,000 on the calendar for September. That's wild.
Starting point is 00:00:17 I never had a internship. I never got my degree. I had no work experience. I had really nothing. I was driving DoorDash and I don't want to be in that situation. $500 of setup and we were ready to go. That was a one-man show. The thing I get personally most excited about, we are in a time period right now where
Starting point is 00:00:36 there is an ever-diminishing amount of skilled laborers. Way more people are retiring than there are people that are starting. You have so many service types that have a market rate that is just completely made up by whoever the five people that offer the service are. There's no reason that that cost $10,000. And no one's thinking about it. No, and it will always be overlooked because people, they don't understand it.
Starting point is 00:01:03 They think that it is harder or more complicated than it really is the way I wanted to run this. I'm not a license. Just have them handle the install part of it, right? And when you do the math on what they're gonna make then, they do 16 jobs each and they make an average of 500 bucks a job. I mean, that's a really good setup for them as well. They're gonna make an extra $8,000 a month.
Starting point is 00:01:25 Do you ever go there or touch it? I go there twice a month. My guest today as a 25-year-old went from delivering for DoorDash to making $80,000 a month and he started this business less than three months ago with less than $500. He subcontracts out all the work. And in this video, we cover everything you need to know to launch this business. And at the end, we talk very specifically about how to find customers for cheap. Also, how to find the right subcontractors on the right platforms because that's the whole
Starting point is 00:02:00 business here. You don't need experience, you don't need a college degree, you don't need much money. You just need to watch this episode and actually do what Parker talks about doing. This is legitimately one of the best episodes I have ever filmed. Please enjoy. So what's your background? So I am originally from Chicago, was a Division I soccer player and then was a professional soccer player. Wow, what school? Northern Illinois. I played semi-professionally in Michigan with a team called Kalamazoo FC. Okay. And we lost in the national championship, and I was ranked like the number four player to watch under 21 in the league. And I got an opportunity to go pro.
Starting point is 00:02:41 And I was like, this is my chance. So left, went and played pro soccer for one season. At the end of that season, had a small knee injury that really just got worse and worse and worse. And then kind of decided that I had really scratched the itch of playing soccer and that I was ready to just wrap it up. You know, I had the goal of being a pro soccer player my whole life. And I got there and it really wasn't as glamorous as I had hoped for. Yeah. And so I decided I was done.
Starting point is 00:03:06 That was right as my girlfriend at the time was graduating college, gave us a chance to finally move in together. We got engaged. And then that was kind of like my point where it was like sink or swim. You know, I never had a internship. I never got my degree. I had no work experience. I had really nothing. I was driving DoorDash and just trying to do something.
Starting point is 00:03:28 ended up taking a loan from my girlfriend for $3,000 to start a cleaning company in 2023. So your girlfriend graduates college. What puts you on to a cleaning business? Yeah. So it was not my first choice. I mean, it was like my 10th choice, right? You know, I had tried a dozen other things. I tried to be a fitness content creator.
Starting point is 00:03:49 I tried to launch a white label supplement brand. I did everything, right? And at some point, I was really just, I had exhausted my runway. You know, it'd been like six months since I had worked. Now I'm engaged. I've got my fiance who's working as a civil engineer on construction sites like in the 100 degree heat working 10, 11 hour days. And she's coming home and I'm like sitting at my laptop trying to edit a fitness TikTok
Starting point is 00:04:13 and hope that it goes viral. And I'm like, all right, I need to do something. And even if she doesn't say anything, you're just like. And her mom was saying stuff, you know. That thing's even more. Yeah. And, you know, I didn't know at the time, honestly, but you get the feeling. Yeah, yeah.
Starting point is 00:04:26 And you just also like, I'm a prideful enough person where I don't want to be in that situation, you know. And I actually saw a TikTok video of a guy talking about he had a cleaning business, a remote cleaning business. And I was like, this is cool. This is tangible. Makes sense to me. I went to my girlfriend and I said, I don't have any money.
Starting point is 00:04:45 You know, you're the one paying the bills right now. Like, can we do this? And she said, yeah, I'll loan it to you. And the guy let me pay like in installments. And we started the business and I started cleaning myself. I would sell jobs. I went to Walmart and spent $100 bucks on a vacuum and a swiffer and a bottle of multi-purpose and went and cleaned college apartments.
Starting point is 00:05:03 I was billing myself out at like $40 an hour, which was way better than DoorDash. And then slowly learned the business, like how to actually delegate and how to not be the means of production, but rather be the person running the business. That was end of 23. And I ran that business for just about two years. that kind of skill set was what helped me start my holiday lighting business, which I still own and still run at the end of 24. Similar type of thing, I started just putting the lights up myself, you know, found some installers pretty shortly thereafter. And once I knew the business, we ended up kind of taking off with that.
Starting point is 00:05:41 And I sold the cleaning business at the end of 25. That was my first reel, like giving myself a little buffer. You know, honestly, probably it was undervalued when I sold it. But to me, you know, as someone who had zero dollars to their name, 18 months prior, it was like I could get multiple six figures for it. And that was life-changing money at the time. It really just bought me the flexibility. Yeah.
Starting point is 00:06:04 And then it was January of 2020 or February, 26, we finished the holiday lighting takedowns. Cleaning business was sold. I was like, what am I going to do now? You know, like now I've got nine months until we're looking at holiday lighting again here. So I kind of went back to scrolling and looking for other things that people were doing and stumbled across, you know, several people in like a three-day period talking about water filtration and never heard anything about it. Where did you come across people talking about?
Starting point is 00:06:33 Just Instagram, TikTok, you know, and there's a guy Anthony Jory, there's Rob the Bank. He made of it. And he's like a, doesn't never talks about blue collar stuff. And it was a, I never see his content super obscure video. He's like the most underserved business. model in 2026 is a water and I was like what is this guy talking about and then a good friend of mine posted that he was starting something on an Instagram story he made he's like I'm starting a water business like let me know if you guys want a water system and I was like wow this this can't be
Starting point is 00:07:04 coincidence that I've never heard of this and now in five days I'm seeing three people online all talking about this so I was like let's just jump right away on it and sorry you always see waves on different home service industry oh yeah pressure washing bounce house I mean house painting home cleaning, windows, gutter cleaning, gutter install. Absolutely. And so you were just seeing all those signals for water filters. Yes, same thing. I was like, people that don't talk about blue collar stuff are talking about this.
Starting point is 00:07:31 You know, it's like when your barber starts talking about Bitcoin with you and you're like, all right. We're at the top. Yeah, you're like, I need to start selling. Well, this is kind of the opposite where it's like when people that know nothing about this start to talk about it. Yeah. And it's just a quiet murmurings. Then you're like, all right, we're early.
Starting point is 00:07:47 Like there's something here. And we just moved really quick. Thankfully, this was my third time doing it now. So I knew like really quick how to pop up a website, set up a scheduling platform, set up a payment processor. What did you do specifically like what did you use to build a website? Yeah, so website we had, I actually used Claude. Okay. Yeah.
Starting point is 00:08:05 And that was my first time doing that, which was very fun. I'm a big Claude fan and getting to like actually do end to end like development. You know, it's kind of funny to call it that as we don't know what we're doing. Yeah. You're just kind of watching and clicking a lot. and you know going from there but I built the website on Claude classic like Google workspace domain GHL white label snapshot for a CRM a jobber for a scheduling platform and I was like all right that's my tech stack right email phone scheduling CRM and then sorry did you use
Starting point is 00:08:37 go high level for a phone as well yes yep lead connector so go high level for your CRM customer relationship management lead connector and then job for scheduling specifically Claude for the website. What did I miss? Google Workspace for the email and domain. Email. Yeah. Okay. And exactly what I would have used basically. Yeah. And I mean, that whole tech stack is 300 bucks a month maybe. I mean, depending on what you pay for the snapshot, maybe even less. Yeah. And then we got a general liability plumbing insurance policy, which I think was about 180 a month, something like that. And that was it. We were alive,
Starting point is 00:09:11 you know, $500 of kind of setup and we were ready to go. But the thing people overlook is actually because of the nature of like the way I wanted to run this, I'm not a license point. I don't really know this stuff that well. I wanted to partner with private plumbers and just have them handle the install part of it. Right. And you got to know enough to really be able to hold a conversation with those guys. Yeah.
Starting point is 00:09:34 It's actually easier with the customers than it is with the plumbers. Yeah, because they don't know anything about waterfields. No. Most customers are very, very naive to it. They basically just know whatever they got in a pamphlet or I can always tell when a customer is regurgitating. like chat GPT, you know, and they're asking me a follow-up question. I'm like, you don't even really know what you're asking me.
Starting point is 00:09:53 Yeah. But the plumbers, you get on the phone with them and they're like, well, what type of pipe are we using and what's the fitting and what's the bypass size and what do you do about this? And in this area of town, all these people have crawl spaces, but they're only, and you're very quickly like over, I'm in over my head. And your business lives or dies on the plumbers. Yes.
Starting point is 00:10:11 They're doing all the physical. Yeah, absolutely. The customers, that's sales. Yes. Right. That's marketing and sales, which you've done before. The plumbers is like, I have to know enough about this industry to not sound like an idiot. Because if I don't have good plumbers on my team, I don't have a team. Yes, absolutely. And then the second thing was I just old fashioned way went, took the plumbers out for coffee or a lunch, sat down man to man face to face and just had a conversation. Hey, this is what I'm aiming to do. This is what I've done in the past. I don't know everything about water softeners and plumbing and water filtration right now. But I'm a quick learner. And 30 days ago, I didn't know, like, I didn't even know what a softener was. So why don't you explain to people what it is? Because it's kind of regional specific.
Starting point is 00:10:54 Yes, a little bit. In Texas, like I have under my sink reverse osmosis filter just for taste, but that's it. I have friends and other places that have a whole house. Like, what is exactly? What are you selling? Absolutely. So the main kind of bundle that we sell. It's a three part.
Starting point is 00:11:08 So the first part is a resin softener. That removes hardness or a GPG grains per gallon from your water, which, The easiest way to think about that is there are mini rocks, not visible, but very, very tiny rocks that float around in the water, depending on where the water comes from. That just beats up your pipes, your appliances, your hair feels dry, your skin feels dry. Some areas have super hard water. Some areas have no hardness at all. So that's the first component is a resin softener. Hard water equals more rocks.
Starting point is 00:11:39 Yes. Okay. Harder water, more rocks, more damage, more dryness, you know, more bad. Okay. Now, then you look at the second component, and that's a whole home or what we call P-O-E point of entry, which just means the water gets filtered at the point that it enters the whole home. Main.
Starting point is 00:11:55 Yep. Exactly. Right at the main. Yep. And it's on the private property, but it's like right where your central shutoff valve would be for where your water comes into your house. Okay. Now, then the second element is carbon filtration.
Starting point is 00:12:08 Carbon filtration, again, is a point of entry system. So it's for the whole house. And that is what removes the, the, the, the, the, the, the, the, the, the, the, the, the, the, contaminants, we'll call it. The stuff that you don't want in your water, not rocks, but things like chlorine, chloramine, chloroforms, halo acetic acids. Those are all just buzzwords for stuff I don't want to be drinking. Yeah. Or on my body. Yeah. Or on my body. Exactly. The stuff that I, you know, imagine in your home, showering in pool water every day. You get out of the pool and you want to shower because you've got chlorine all over you. And then you go take a shower and you're in just as much
Starting point is 00:12:41 chlorine in your shower water. Yeah. So that is what a carbon block or carbon filter does. So we, our flagship system is resin and carbon to soften and filter all of the homes water. And then we also couple that with what you have, which is a point of use system, reverse osmosis. And that is either a tank or a tankless system that just goes under the sink, draws water through it through a reverse osmosis membrane, which is the best form of filtration. And then pushes it out a small dedicated faucet, directly for drinking water. And that's like an upsell.
Starting point is 00:13:16 Yeah, we like to sell it as a bundle, and it kind of becomes our unique value proposition is like, hey, we charge the same or less than other people for a whole home system, and we include the drinking water system. And that's just part of our bundle. Yeah. So that's kind of how we sell it. Make your close rate go up. Definitely.
Starting point is 00:13:35 Okay. Yep. What are your price points for these packages? So we sell our flagship, which is a single tank, a 10 by 54 tank, so 10, inch diameter, 54 inches tall, a single tank that has both resin and carbon in it. It's a mixed bed system, which just means it has both. That tank with the RO or reverse osmosis drinking water, we sell that at 2699 installed. Okay. Taxes included, install included, everything included. Is that in the ground, like at the main? It is most often installed in the garage
Starting point is 00:14:08 and tied directly just into the water line. Okay. So we can bury them. We can do, you know, whatever. So the water main at the street comes in right where the shutoff would be, it comes to the garage or whatever, and it goes there first? Yes. Okay. Yes. It looks like a tall skinny water heater. Yes. Okay. Exactly. Okay. It's just a tall black cylinder. And then there's a small little like almost garbage can looking black tank that's called a brine tank. Okay. And you put salt in that. That helps the resin softener function properly. Okay. But 20, and 2,700 bucks. Yep. Okay. How much of that goes to hardware, plumber, profit, etc. So at a $2,700 install, we will pay about $950 for all of the, we'll call it heavy machinery.
Starting point is 00:14:52 So the brine tank, the control valve, the actual tank that has the carbon and resin in it, and then the RO system. So those are all your main components, about $950. From there, we'll probably spend about $100 per job on miscellaneous stuff, like just pipe, fittings, you know, salt, insulation, if you're in a cold climate where you need to insulate the pipes, things like that. So that puts us to, what, 1050. And then we'll pay on average, I would say, about $500 in install. So the plumber. To the plumber. Yep. And that could be as low as 400. That could be as high as 600, 650. And sometimes we'll add a little bit of markup on top if the install is
Starting point is 00:15:33 very difficult or we need to bury a system underground. Like that's a lot of labor. So, but on that, that classic system, I would say probably 450 to 500 to a plumber, 1050 for all materials. And how long does it take him to do? About four hours. Okay. And so you're shooting for like 40 to 50% gross margin, give or take? Yeah, yeah. I would say, you know, about 40% gross margin.
Starting point is 00:15:57 Okay. So let's say you said 2,700, right? Yeah. So 2,700 minus 1,500. So call it $1,000 in profit, gross profit. How much of that is like marketing costs or sales costs? Yeah. I mean, we're right now acquiring clients for like 175 bucks a client, which is really, really cheap. I don't expect it to stay like that. Quite frankly, it's, it's, that's,
Starting point is 00:16:21 that's uncommon from what I've seen. But I mean, I even feel that a client acquisition cost of 300 or 350 is very justifiable. I mean, you're still running a three X return on whatever you're spending. Yeah. Because that puts your net margins closer to 30%. Yeah. Which is amazing for any business, especially home service. Yeah. Okay. So what are your, Well, before I asked that, what are the geographical areas that need this the most? And where physically is your business? Because I mean, you've been South Florida, Chicago, Wisconsin, Raleigh. Yeah.
Starting point is 00:16:51 Yeah. So the business is in Raleigh. I did want to be able to have a hands-on element to it. I think there's a there's something nice for a business like this of just having the option to step into the field, shake hands with a plumber, a customer. So that's in Raleigh, North Carolina. And to your first question, I've had a little. bit of a mixed experience with this. I would have thought that, you know, the areas that have
Starting point is 00:17:13 the worst water would have the most demand, but they also have the most people that have already been doing this, right? Yeah. So, you know, you go to an area like, let's say, I mean, here, right? Dallas, Fort Worth, like this area, this is going to be, there's, there's hard water here. Like, there, there's absolutely a need. You look at maybe a Salt Lake City, absolutely super hard water, huge need, right? But there's a ton of companies that have been selling softeners and filtration for a super long time, which isn't necessarily a problem. But I think what like a market like mine, Raleigh, we don't really have hard water. We sell people buy the softener because it kind of comes with the combo. But there's not a lot of need. There's a lot of need for the carbon
Starting point is 00:18:00 filtration because they dump so much chlorine and chloramine and other stuff like that into our water. So what my market might lack in demand, it also lacks in competitors. So there's, there's a lot fewer businesses that are selling this type of service. Mainly it's plumbers that are like, yeah, I could also do a softener if you want me to do a softener. Yeah, yeah. But they're not running Facebook ads. They're not like really trying to acquire these customers. You're busy doing other stuff anyway. Yes. So your plumbers aren't your competitors. No. And Raleas has a good economy. It's got, It's got like good average income. So I imagine a lot of what you're selling is kind of fear.
Starting point is 00:18:37 Like they're just like, yeah, or like they can afford it. They're like, yeah. Why wouldn't I? If I've got $2,700 bucks and I want my kids to probably have better drinking water, that's a good investment. Yes. And that's a lot of what it comes down to is a lot of people, they look at the price.
Starting point is 00:18:52 And what we do that's unique about our kind of marketing angle is our best performing ad. We closed our first deal on $41 of ad spend. And it was just a static image ad. that was a photo of our unit and it said 2699 installed. And that was it. That was it. What was the headline or text or? I mean, everything was just like whole home plus drinking water, 2699 installed.
Starting point is 00:19:17 And the entire angle, the entire thing we try to do is pick up the scraps left behind by the billion dollar companies like Culligan's, Connecticutco, leaf home water, where they come, they do this big in person sales process. It's a really elaborate thing. They test the water. Yes. And the price point is $6,000, $8,000. Yeah.
Starting point is 00:19:39 For honestly a very comparable system. And we just kind of, we're like following in their wake, like picking up all the people that just got completely priced out. Yeah. You know, because there are plenty of people that can afford that $8,000 system and they'll go with them because they're a hundred year old company that has been doing this forever. And they know they're going to get a certain product and a certain experience. Yeah. But there are so many people that just purely cannot afford it. Or don't want, like I can afford $8,000.
Starting point is 00:20:08 I wouldn't pay that. No. To me, it doesn't have that much value. Nope. Right? It has to match the value. Yes. And a lot of people are just, the analogy I always love to use is like we opened up a Chevy dealership
Starting point is 00:20:20 next to a Ferrari dealership. And it's price anchoring. Exactly. They're doing your heavy lifting. They're anchoring. So if you put $2,700 in the ad, you don't need a killer sales guy. No. Which is great because we don't at all.
Starting point is 00:20:33 A sales guy 25% commission. Nope. You know, we are more like order takers, if anything. You know, we've set it up. So, you know, our whole angle is like, imagine you just need to get to work every day. And work is far and you're tired of walking. And the only place in your city that sells cars is Ferrari. And you just, you can't afford a Ferrari.
Starting point is 00:20:53 So you've just been walking. Yeah. The walking sucks. And you would love to just get a Chevy. Yeah. You'd love to just get a Honda and just get to work and get home. know a Chevy existed. No. Until you see a Facebook ad. Yes. And in a lot of cases, in some markets, Chevy did not exist. There was no Chevy dealership. And I said, wait, why wouldn't we open a Chevy
Starting point is 00:21:11 dealership here? There's plenty of people that would buy a Chevy if they could. And, and, you know, now it's just genuinely just getting awareness. Because once people know about the product and they have a conversation where they can feel confident that this will solve their problems, which again, in my area, they don't have crazy water problems. It's a pretty easy sale. So what are the where this is an established industry, there is hard water. So you said salt lake? Yeah, I would say Salt Lake. Denver is going to have really hard water. At west in general. Yeah, a lot of out west. You know, you go closer to the mountains and just in general, they do. A lot of markets in Texas do. Florida has notoriously hard water. And, you know, it's a little, it's a catch-22 because you go to a
Starting point is 00:21:53 market like, let's say, Orlando. And every single home in Orlando has a water softener. Every single home. Are they built like that? They're not built like that, but it's just standard practice. Like the water is so hard that you just thrash your appliances and your skin and your hair. And so they just don't do it. Nobody doesn't have a water softener. And so with that in mind, like while those markets are definitely more competitive, they're also the tam is 100%.
Starting point is 00:22:23 Every home needs it. Yeah, yeah. In Raleigh, we have 3 million people, probably less than a million of those people have a water softener. I mean, you know, if there's a million households, probably less than half of them are even interested in that as a product. Yeah. How did you land on that price point? I think, you know, it was two things. The first thing was that I always wanted to target when I made this step up, I said, I want to target a thousand dollar net margin. That's my ideal price point to be it. Can I make a thousand dollars in that? And that gives me a lot of wiggle room for promos, for, you know,
Starting point is 00:22:56 bulk discounts, for referral programs, for a lot of things. And then the, the, you know, the other thing that I thought is why wouldn't I just sell as many as I can at this price point? And my two options are either it's working phenomenally and we just keep going or if it's working well but the margin isn't strong enough, then we can just raise price once we have a reputation that allows us to do it. So I just said, what's the cheapest I can go where I can still target making $1,000 a job? And then I can inch my way up from there as I have a review that or like a A reputation that allows me to do so. Yeah.
Starting point is 00:23:33 What percentage of your customers are you getting from Facebook ads? 95. What about the other five? Referrals? Yeah, referrals and Google Business profile. Yep. We have 52 five-star reviews in 80 days. I think today is 85 days since we turned on ads.
Starting point is 00:23:50 Wow. So I am like a psycho about Google reviews. Like if we do a Google review for or we do an install for a client and I've been speaking with Zach, you know, after the job's done, I'm going to say, Zach, hey, do you mind leaving a review? I'm going to get Zach to do it. I'm going to say, hey, Zach, I'm going to be in the area actually later this week. I would love to come by, drop off some extra water softener salt for you guys. Would you mind having your wife leave a review? Would you mind having your brother leave us a review? Pogrosity, right? You're saying like, here's some free salt. Yes. Can you do me a
Starting point is 00:24:22 favor? And it's not a, if you do this, then I'll do this. Yes. And that's okay. Absolutely. And I feel like the higher ticket your home service, the more you have to be a maniac about begging for reviews. Because if I'm a landscaper doing $50 jobs all day, like whatever, I'm doing 100 of these a week. But if it's a $3,000 ticket, a $3,000 item, then you're only going to do so many of those. Yeah. Right? Few a week, 10 a week, whatever. So you've got to get more reviews.
Starting point is 00:24:49 Absolutely. And we are on the east side of Raleigh where our GBP pin is located. So I guess like where our physical location is. We are the number one ranked water filtration company. Like if you look up water filtration in Raleigh and you are on the east side of town, we are number one. And how long have you been at it? 85 days.
Starting point is 00:25:07 Oh, all right. So let's start. So what day did you start the business? June 8th. June 8. And that's when you, or you probably,
Starting point is 00:25:15 like you built the website that day or before that. That was like go live. That was go live. That was told the world that you existed. Yes. That was. A website isn't really doing it. No.
Starting point is 00:25:25 No. You know, it's, I could have built the web. I think I filed the LLC maybe on like May 15th or something. And then I spent three weeks like just getting everything ready. That was those coffees with my plumbers and getting them onboarded and comfortable. That was building out my website, building my first ad creative, setting up my ads manager, little things like that. June 8th was the day we said, we're live, right?
Starting point is 00:25:51 And that was ads on. Plumbers were eagerly waiting work. you know, and that and that's kind of what I consider our first day one. Okay. Who did your Facebook ads? I did. Okay. Yeah.
Starting point is 00:26:02 And you had experience with your other businesses. Yes. Okay. What, how many ads did you launch with? Like one, that static image, multiple. Three static images. Okay. No videos.
Starting point is 00:26:12 Nope. What were, what are like your tips and tricks for making Facebook ads successful for this industry? I think in water filtration specifically, you either have to sell like informationally. like providing a client value as to why they should watch the video or read the text or whatnot. Or you just have to compete on value. And that's what we did. Everything was just price oriented.
Starting point is 00:26:36 System quality at a low price. And we were again just trying to pick up scraps. We didn't want to go compete with the established companies and try to say our product is better or, you know, we didn't want any part of that. We wanted all the people that they left behind. So one approach could be, hey, let's educate the market. Hey, if you have hard water, do this. Here's a test.
Starting point is 00:26:56 And you're like, listen, we want the people that are already educated. Mr. Algorithm, go find the people that already know that it's cost six to eight grand from the other guys. We're just going to tell them we exist. This is what we cost. And we almost withheld information on the ads because we only wanted an educated customer. I didn't want the ad to attempt to educate someone. I wanted somebody that would see the graphic and immediately know, oh, that's a softener,
Starting point is 00:27:21 2699. I just got quoted last month, eight grand. I better call these guys. And that was like, no one calls us and says they don't know what we sell. No one calls us and says that they need an explanation. They call us and the only thing we have to be prepared to handle is one, a comparison to the other system they've been quoted on, a genuine, honest comparison and how that is relevant to their water.
Starting point is 00:27:47 And then we have to be ready to, if like, use that, the, the discounted rate as our crutch without leaning on it entirely. Because you can't say, yeah, pick us over Connecticutco because, you know, we're going to do something better or not. We're going to do something. We have a better system. We won't. We don't.
Starting point is 00:28:09 It's really just we're going to do the same. As far as you're concerned, you will get the same and you'll get it at a lower price. Yeah. And that was just our whole angle. And it really sold quite well. So do you use Advantage Plus for targeting? No, we, we, we, I turn most of that stuff off. In the beginning, we actually started with just a broad targeting, just geo targeting.
Starting point is 00:28:31 That was it. Like code or cities. Yeah, we did kind of radius. Yeah, more, more like radius. And the way that Raleigh is laid out is it's, it's very sprawling, kind of similar to a DFW where it's all one metro, but it's, it's big. Yeah. So we kind of expanded out that way.
Starting point is 00:28:49 We set a couple focal points and then expanded radius. is around those focal points. And then over time, we've just now actually trained a pixel and now we can actually do a little bit of retargeting and we can create lookalike audiences and things like that. But before, were you saying Facebook, you know, we want 30 to 60 year old homeowners? Or did you just say, this is the radius? You go. Raleigh, 30 to 60.
Starting point is 00:29:13 Age? Yep, that's it. Not male or female. Nope. Just not homeowner. Nope. Okay. And now you're still doing that, but with the pixel that's trained, but with a look
Starting point is 00:29:22 like audience of people that have clicked or called or purchased. Correct. Exactly. Okay. Well, it's interesting that you're, are you still using static images only? Well, not only. We have, we have videos, but I'll tell you, statics are the best performers. It's, it's almost frustrating for me to like carve out a day to shoot a bunch of video ads and then the statics just take all the spend because we'll put them on, you know, a campaign where effectively meta just decides how to spend. And it always, picks to statics. Yeah.
Starting point is 00:29:53 Always. Are you using AI to make the static images or not? Yeah. Yeah. Yeah. We, I'm a huge fan of Dolly, Chatsy BT. You know, I think that for images, for images, I really do think it is. The only thing I use it for.
Starting point is 00:30:07 Yeah. And if I want to put myself like a person, then I'll go for like a nanobanana or something that can do a little higher level. But if it's just product on backdrop with price and text, Dolly, every time. And what type of conversion are you optimizing for? We're optimizing for leads. So lead and then we just go direct instant form. Instant form.
Starting point is 00:30:29 And then it just drops it right in our CRM and we're on them right away. Interesting. So you don't send them to your website at all? No. Interesting. No. I've heard the opposite for like higher ticket home service because they need to get more educated.
Starting point is 00:30:41 But you said, right? It's our thing. We don't. That's so interesting because you're telling the algorithm without telling them. I only want people that are interested. Yeah. And I'm going to optimize for. people that give me a lead. So if I don't tell them too much information and they fill out their
Starting point is 00:30:56 lead, then they are interested. And they're educated. Yep. Yeah, they're already educated and they're interested. And so we're just kind of taking out a lot of the, it's, it's low skill advertising is really what it is. We're taking out a lot of the skill and, you know, probably I would say by October, we will be rolling out like a VSL, like a classic funnel. They go to a sales video of me, the product and all of that stuff. I think we will probably sprinkle that in, but my objective is to use that on Google because Google we can't train the same way.
Starting point is 00:31:32 Google, we can pick our keywords like lowest cost softener or we can target to sell for certain keywords. And then when they click, dump them right into a funnel with a VSL of me explaining the product because I'm gonna assume that the buying intent is gonna be lower and the education is gonna be lower on Google then it will be on meta with the way that we're advertising. So you're not running Google ads at all right now?
Starting point is 00:31:55 Not at all. What about not LSA either? No. So for LSA, it's very hard to target water filtration specifically. So you'd almost have to do plumbing general, which then you're just going to, I'm going to get a lot of stuff we just don't want. And I think the cost per lead is too high to justify.
Starting point is 00:32:12 Is it still relatively new? Yeah. And there's a thousand categories that could be on there, but there's only hundreds, right? Yeah. They're just kind of rolling out more over time. Yeah. And they don't have water filtration or water softeners.
Starting point is 00:32:23 They don't have those as categories. Okay. So that's just still like blue ocean for you. Like no Angie, Thumbtack, Home Advisor, none of that. We just, we honestly, we haven't been operationally ready for it. Yeah. We're selling already the maximum amount of jobs that we can fulfill. So I just partnered with a third plumber who's now ready to start taking jobs.
Starting point is 00:32:43 He's actually doing his first job right now. I was like, good luck because I'm going to be unavailable for a little while. But I'm sure he'll be fine. And really the constraint for us has been having product in hand and being able to fulfill it. And really that that's been it. Or people not knowing their homes very well, which is kind of something I didn't expect to deal with. But I ask someone, do you have a power supply in your crawl space so we can install in the crawl space? Yes.
Starting point is 00:33:12 No, they don't. And because we don't do an in-person sales appointment, my plumber shows up and says, Parker, there's no power in the crawl space here. So we've been running into a little bit of that and then we have to push out three weeks because they have to get an electrician in and at the outlet and then we come back. And so, you know, we really, client acquisition has not been our bottleneck at all. Yeah. So I'm not too excited about I just need to add more client acquisition channels because we don't
Starting point is 00:33:37 really need it. Well, every business has one or two bottlenecks. Fulfillment sales. Yep. And in my experience, sales is usually the bottleneck, right? So I would rather solve for sales and figure out fulfillment because to me it's a lot easy to figure out for that. Absolutely. So June 8th, first day, what do you do in sales and profits in June? So in June we did about, I think it was five installs. Okay. We sold our first job on June 8th.
Starting point is 00:34:03 Second lead we ever got. We installed on June 10th. Yes, on the phone. Super nice guy. David was his name. And he was like, yeah, I want your classic flagship system in my garage, easy install. I just moved in yesterday. I just want the system in. And I said 2699. He said, great. When can you come? And we said, you know, two days. So we came out, we installed on Wednesday. We ended up selling, I believe, fulfilling four more jobs that month. So 10 grandish? 15.
Starting point is 00:34:30 Okay. Yeah. Because I think we had one that was about 4,000. It was like a well system. And then the rest were all around 2,700. So I think it got us right around 15. So 15 grand in sales your first month. How much profit?
Starting point is 00:34:42 Well, I mean, if you're looking at operating profit, it was probably about $800 a job. but if you're looking at real profit, it was zero because I front-loaded inventory and, you know, reinvested everything. So, but I'd say operating profit probably probably about $3,000. Okay. And then July. July, we did just under $50,000 of installs. So we did, it was 16 jobs.
Starting point is 00:35:08 It ended up being like 498, like just shy of 50,000. And again, our, I would say our operating profit. it would have been slightly lower than that first month because we were kind of figuring out some of the sales side. And I was struggling because I was a one-man show, I was struggling to follow up with leads. And the big thing that was different about this industry was, I mean, we have a 25% true closing rate, which is very high. Once you get them on the phone? No, or true closing rate, like 25% lead to close, 25% super high. Yeah. But the problem is we don't get. a client on the phone normally within the first like four or five touch points.
Starting point is 00:35:52 So we've got to call them for a week before we even get to speak to them. Once we speak to them, we close at an extremely high percentage. Like we're closing probably 35% of the people we actually speak to. Wow. But I was only speaking to a very small percentage because I had to call them when they opted in and they didn't answer and then the next morning and then the next evening and then the next morning and the next evening and we had automations running but I was just getting inundated with leads too many leads I didn't have the time to call everyone so our cac went up because
Starting point is 00:36:23 we were overspending we had too many leads in the pipeline and people weren't dealing with them but still probably let's say 650 I would say is probably a pretty good 12 grand in profit yeah I would say something something around there probably 11 to 12 and what were you paying per lead to meta it's always ranged between 30 and 40 per lead yeah okay it is crazy because I have a like a backyard sport court business and then a tree trimming business. And those instant form leads can be so weak. Yeah. Like sometimes you call them like, who are you what? I don't know what you're talking about. And you're like, bro, this was you submitted this 45 seconds ago. Yes. Speed the lead is everything, right? What do you do about that? You just keep calling? Yep. Yep.
Starting point is 00:37:03 Remind them. We, we will we live by a mantra in my business and my, my operations manager, Jack could attest to this until the lead either opts out of conversation or says leave me alone. Yeah. It's, it's incessant. Like we, we are, we are ruthless with follow up. Because if you filled out my form and you tell me that you didn't fill out my form, fine, whatever. We'll remove you from the CRM. There's 10% of meta leads. That's just how they are. I don't understand it. It's got to be an algorithm problem. But we get that all the time. We call and they're like, why are you calling me? I'm like, you filled out a form yesterday. And I've just been trying to get a hold of you. I never filled out a form. I don't know what you're talking about. Yeah. That's not even my name. I'm
Starting point is 00:37:45 like, okay, sorry and have a nice day, you know, but everyone else, it's a yes or a no. We don't take not answers. That's, that's not an option. But there is a correlation between how many times it takes you to follow up with someone and the chance that they'll ever actually answer, right? Of course. A month from now, the likelihood drops way off. But what we saw, and I looked at my numbers before coming on here so I could be well educated as we talked about it. When I brought my operations manager in, I brought him in on like the third of July, or of August because July I got overrun. I was like, I need to bring somebody in originally brought him in just as a sales guy.
Starting point is 00:38:21 It was like, just follow up with the leads, call the leads and sell jobs. It didn't really work very well in that regard because there was too much disconnect because he had to also, you know, have conversations with the plumbers about special installs and scheduling and, you know, get service agreements or things like that. And I was like, okay, I'm going to have, you're going to be an operations manager and you're going to just own it end to end. Right. Lead to job completed. You need to own that process.
Starting point is 00:38:46 And that's worked much better for us. So I gave him the first two weeks. He basically just called old leads. We didn't really spend anything the first half of August because we had so many old leads in the pipeline. And I wanted him to get his feet underneath him. August 15th, we go back to $200 a day of spend. I meant to ask, what were you spending per day in June and July? June, it was probably $100 a day on average.
Starting point is 00:39:10 You spent two grandish? Yeah, something like that. And then in July, it was probably $300 a day for the first 10 days, then $400 a day for the middle 10 days. And then like nothing for the back half because I was just overrun with leads. It worked too well. Yes, exactly. And so I bring in Jack. And he starts August 15th is when I consider his first reel like he's.
Starting point is 00:39:36 in the big leagues now. Leads are flying. Everything is we're going. And we're at, we're at full steam ad. $200 a day of ad spent. He just sent me the read out from August 15th to August 31st. So about 17 days. We got 89 leads. Those are fresh leads, not old ones? Yes, not old ones. New leads. 89 leads. All right. So we're talking like four leads a day or three, three to four. Yeah, something like that. Yeah. Four, even five some days, you know, and, and you know how much. meta is some days it's two and then it's eight and some I'm sure we're duplicates but let's say 89 was the actual number on the meta ads manager we actually connected with 70% of those leads so 30% of them we never got a hold of texting phone do you count a text is you know we actually
Starting point is 00:40:24 prefer text are they as effective I think that text is just as effective because so many buyers are so averse to calling that our intro is not speed delete immediately call okay it's Speed delete immediately text. When is a good time for us to talk? Okay. So you're setting up a call, but texting first. Yes. And so always, they opt in and it'll be,
Starting point is 00:40:46 Hey, Kevin, this is Jack with Raleigh Water Pros. I got your form. When's a good time for us to chat for five minutes so I can get you a quote on a whole home system? And is that automated? Yes. DHS? Yes.
Starting point is 00:40:56 Okay. So as soon as the new leads created that message gets automated, sent out. And then the majority of our customers will text and respond and say, let's say 50% of our customers will text and respond and either say now or in a week or Monday or who is this. I don't even know what you're talking about right. And then we'll schedule the calls from there. Then we have another flex 25% that don't respond to the text and then they just go into the call cycle. We're just calling and texting them trying to get some form of life from them. So on your follow-ups, are you texting them over and over until they respond to get them on a call
Starting point is 00:41:32 or do you text them once and then you start calling? Then we start calling. Yep. So we text them and we'll give them about an hour to respond to that first text. And then they get called and texted after that point. And the call is manual. Yes. Okay.
Starting point is 00:41:44 You're getting a trigger and GHL or whatever. Then a human's picking up the phone. Yes, correct. So we're doing that. And then so we had about 70% connection rate. So 30% of leads we never got a response from. Text or phone. Text or phone.
Starting point is 00:41:57 Or they just opted out immediately. Right. Of that 70% we closed. 20% of the full 90 of them. So I think that would be, it was 18 leads out of, what would that be 60? So, you know, it was a good percent, about 30% of the leads that we actually closed.
Starting point is 00:42:16 Okay. That we got on the phone with. Let's say hypothetically, between August 15th to 31st, you got 100 leads. Of those, you connected with 70. And then what was the next step down the funnel there? So the best way would be we got 90 leads.
Starting point is 00:42:30 We connected with 60 of them. And then we closed 20 of them. Wow. Okay. So you close, yeah, I mean, a quarter of all of your lease. Yeah. What you said a few minutes ago. Yep.
Starting point is 00:42:40 At an average ticket of 3,000? 3,300. Okay. Yeah, because we sell a lot of, a lot of people are eager to buy the upsell when they see how valuable the main is. Yeah. They're like, wow, I was really about to pay five grand for this. So now that it's $2,700, sure, I'll buy the $500 upsell thing.
Starting point is 00:42:59 No problem. So what were your August sales then? So in August, we did 81,000 in revenue. Holy crap. Your second full month. Yes. Or your third month. 81,000.
Starting point is 00:43:10 And the crazier part is as we're sitting here, you know, and where September has just begun, we have $54,000 of installs on the calendar for September. That's wild. And that's all from August to ad spend. Yeah. Yeah. Right. So of the 80, $81,000, how much was profit?
Starting point is 00:43:29 So 81 installs was generated. by about 25 jobs, roughly, and 25 jobs are net margin. It went up because we did better with the cack, but it went down because now I pay Jack for every closed job. Sure. So Jack gets $200 per close job, not a percentage of sales because I don't want him selling product that people don't need, right? So he gets $200 flat plus his base salary.
Starting point is 00:43:53 So the gross profit per job kind of ended up back around like $750, 800. Yeah, beautiful. Yep. So, so 27 jobs. $1.15 grand. Yeah. Give a take. Something like that.
Starting point is 00:44:06 Man. Yep. Your second full month. But again, we didn't take any profit. I haven't taken a dime out. Because you're growing it. Yeah. And we're buying so much inventory.
Starting point is 00:44:16 Because one of the biggest bottlenecks that we really faced in the third week of July and in the second week of August. And that 81 grand that we did was with zero installs in the second week of August. Because we didn't have product. We were waiting for. inventory to come in. And that has been a recurring issue for us. And so I finally was just like, I'm done with that. I'm done with that game. I want to have way more than I'm going to need of every system that we're going to sell so that it's too expensive. It's way too expensive to not be
Starting point is 00:44:46 able to install it. Where do you store it all? I have a 10 by 20 storage unit and it's 50 a month, 200 a month? Uh, 125. Yep. And it is remote access. So my plumbers, I have a smart lock on it. Every plumber has their own access code. And then they all have the gate code. And my delivery driver has his own access code. We do all of our freight LTL and it's, we had the same driver. And do you ever go there or touch it?
Starting point is 00:45:10 I go there twice a month. Yeah. And I just, and honestly, the only time I go there is to break down deliveries because they come in pallets and they're shrink wrapped and all that. So I go spend a couple hours sweating out in the sun and breaking everything down, getting it organized,
Starting point is 00:45:24 clearing out all the trash that the plumbers are leaving behind. But other than that, that, there's really not much. Where do you get your hardware from? So we have two different distributors that we buy from. One is actually here, and then one is based in Indianapolis. But they're just like OEMs. They're just manufacturers of systems.
Starting point is 00:45:42 I mean, really the important thing to the end customer is the valve, which there are two main brands of valve that we install. One is Hank's craft, and then one is Clack. And then the actual material or the media is what we call it. inside of the tanks, which that's the resin and the carbon and the gravel and because that's really it. Otherwise, it's just a fiberglass holding tank and you just screw a valve on top and you fill it up with media. So what matters is where did the media come from and what brand is the valve. It doesn't really matter who assembled the tank. We could buy the product
Starting point is 00:46:17 from anywhere. Commodity. Yeah. So that's why my reverse osmosis tank tastes like resin the first time. Yes. I needed to flush it out more. Yes. Absolutely. And it definitely had a Most of the, most RO systems are either five or seven stage. And one of them is resin softener. One's, there's normally two carbon blocks. And then for taste, you definitely have one that does something called remineralizing, which means this is a little bit of, I'm a water snob, like I can taste it.
Starting point is 00:46:43 So it's delicious. Yes. And a little bit nerdy science for you on it. Let's say the average, what we call TDS or total dissolvable solids. These are the micro, micro, micro particles in the water, right? There are some that are good, like electrolytes, right? Those could be deemed TDS, calcium, magnesium, things like that. And then there are some that are bad, like PFS or Forever chemicals and that micro, microplastics,
Starting point is 00:47:10 that type of stuff. So that's, unfortunately, that's, it's indiscriminate in an RO filter. The RO just says, hey, if the TDS is 100, it means there's a hundred mini particles floating around in this unit of water. I'm going to try to get that to zero. Yeah. What ends up happening then is your water tastes flat. It tastes off.
Starting point is 00:47:29 It tastes wrong because it doesn't have the stuff you're used to, which is trace sodium, calcium, magnesium, these minerals that you are used to having in your water. So the good RO systems will then remineralize the water. And the last stage before it comes out your faucet is it actually passes back through a membrane that adds the minerals back in, but only the ones that you want after the ones that you don't have already been removed. Gotcha. Okay. When it comes to plumbers,
Starting point is 00:47:55 How does someone find a good plumber? This is a, you know, my experience has been more straightforward than I think most people would. What I did, I went to Indeed. I made a sponsor job post. I said, hey, I'm looking for a plumber. I'm looking to pay between 75 and 125 an hour. And I need you to be licensed independently, have all your own supplies and be ready and willing to take at least two jobs a week. And this is what you're going to do.
Starting point is 00:48:18 You are only doing whole home softener, carbon filtration and point of use drinking one. That's it. And I ran that as a sponsored Indeed post, $90 a day budget for four days. I got four qualified leads. I hired three of them and I was done. So not a lot of leads, but good leads. Yes. What types of people are these?
Starting point is 00:48:37 Are they business owners? Are they employees? They're all private business owners. They all own. Like Chuck and a truck. Yes. All of them. They're all, you know, Kevin's plumbing company.
Starting point is 00:48:47 And maybe they have a website. Maybe they have a van with a cool decal on it. And, you know, but they just can't stay. busy enough. Yeah. And we, I personally am not a fan of hiring people that are in a place of struggle. And I know that could sound insensitive,
Starting point is 00:49:03 but it's just the reality. I don't want to hire the plumber who is like, hey man, I'm like about to get evicted. I can't get any work. Yeah. But I don't, you also can't hire a plumber that has busy seven days a week.
Starting point is 00:49:15 300 five star reviews. Yeah. It's never going to happen. A bunch of wrapped trucks, a bunch of crews. No, I need a guy who's really good at what he does. and he's busy 30 hours a week,
Starting point is 00:49:25 but he'd love to be busy 40, 50 hours a week. And the way that I view it, I mean, we'll do, in September, we better do 150,000 plus, which will be call it 47 installs. That's, I think, the number we've set out for. 47 installs, that's two and a half plumbers. I mean, that's not even full capacity for three plumbers.
Starting point is 00:49:45 Yeah. And when you do the math on what they're going to make then, let's say it's three plumbers, they do 16 jobs each, and they make an average of, 500 bucks a job. I mean, that's a really good setup for them as well. They're going to make an extra $8,000 a month. No, nothing impeding on their schedule. You know, they don't have to do anything outside of a comfort zone. They don't have to buy new equipment. They don't have to
Starting point is 00:50:09 stock inventory. They don't have to run ads, sell jobs, do estimates, none of it. I mean, if I'm a plumber, I'm going to do this exclusively, right? And many of our guys come in and they start to trend towards that. Yeah. The first guy that we hired, he was like, yeah, you know, I can maybe take two or three a week. He does like nine a week for us now. Because it's better than fixing a toilet. Yes. He can't get better work. I mean, he makes on average $100 an hour working for us and I keep his schedule as full as he'll let me. Yeah. How many competitors do you have there? It doesn't seem like really any at this point. I know we do have them. Yeah. Yeah. It's strange because I think I almost don't consider like an eco water or a coagan or
Starting point is 00:50:50 Connecticut or leaf. I don't even really consider them to be a competitor. Because he just run such a different business. It's opt-in-form. We need to come to your house, elaborate sales process. Like, it's all that, right? And they sell to a very specific high-income demographic. Or like Eco Water, for example, they do, I would guess, 80% of their revenue is from Costco, right? So they're a competitor of ours, but they're just sitting in Costco and people just, it's just laydowns. And that's the nature of their business. So the people that do what we do. In my area, there's probably five legitimate businesses that aren't a chuck in a truck and that aren't a Kulligan, Connecticutico, billion dollar company. And of those five,
Starting point is 00:51:33 are they on Facebook ads? Some of them are. I honestly am not the type to really go sleuth around. You don't need to. Yeah. If my cost per acquisition went way up, then maybe I would start looking and say, hey, are these guys running my same ads or what's going on? But in the meantime, I'm just honestly trying to get ahead on reputation because that's the biggest thing is everyone in my area they're all pretty similar newness maybe they were started in 25 maybe but nobody that's selling at $2,700 price point has been around for five years yeah so it's completely up for grabs in terms of who becomes the gold standard at our price point yeah and that's what our sole focus has been how quickly can we get to 500 reviews I almost think this could do even better in in a market where
Starting point is 00:52:20 everyone has hard water, right? Because, like, I had a name for it. I can't remember what it is. But, like, if I wanted to start an amazing five-star barbecue restaurant, I would go to Austin, where all the best barbecue restaurants are. If I wanted to start a dessert shop, I would go to Provo, Utah, where all the dessert shops are. Because that's the culture. That's understood.
Starting point is 00:52:37 People want to try the new thing. And they're already educated, right? Back to education. Like, I feel like the ads could do even better there. But it's encouraging to me that you're in what might be a harder market and crushing it, right? So this is, this really could be done in any market. I 100% agree. I think the only thing that you have to be aware of is, um, it's, it's labor availability and it's the number of, you know, people that are, are advertising, right? When, when I do a competitor analysis,
Starting point is 00:53:06 I don't look at how many companies sell the service that I sell. I look at how many people are actively, legitimately advertising, because those are my only competitors. If you're not advertising, you're not my competitor. Yeah. You will get your market share and mine will be totally different. Nobody that was going to buy from me is going to buy from you instead. And nobody that was going to buy from you is going to buy for me instead. Yeah. You know, the referral based legacy companies, they will have their market share forever.
Starting point is 00:53:34 And they'll slowly bleed it out, you know, from a pinprick. But they'll be fine. I'm looking at the new school companies that are doing something similar to what I am at a similar price point with a similar customer experience. Yeah. What are you seeing in the industry? how people are acquiring customers that are not called Facebook ads. Like what are some other good acquisition channels for this industry?
Starting point is 00:53:56 I think Google ads will be phenomenal. I think it's really just all about not fighting for the densest keywords because that is where your big billion dollar companies, that's where they pump all their money. You know, if you look up water filtration Raleigh, like it's going to be Coligan, Connecticutco Leaf, Eco Water, it's going to be all the big boys, right? But discount water softener, right?
Starting point is 00:54:19 I think there are backdoor keywords that are still 100% up for grabs. Make hard water soft. Yes, yes. Like I had a guy that does forest remulching and his competitors were bidding on forest remulching. But what consumer knows that phrase, they want their kudzu removed. Yep. Right? Because in that part of Ohio, everyone had kudzu.
Starting point is 00:54:39 So he started bidding on kudzu removal. You need forest remulching for that. He crushed. Yeah. So a lot of it is like, what would people actually search for? not what is my industry called. Yeah. You could do chlorine removal, P-Fos removal.
Starting point is 00:54:53 You could do-plastic removal. Yes, microplastic removal. Like whatever somebody might think of or, you know, drinking water system. You know, that could be one that's bid up, but there's a lot of different backdoor angles with AdWords. So I think that's definitely one. I think a huge one is a referral game. You know, we, it's interesting.
Starting point is 00:55:13 But because we are a discount service line, we sell to a. a lot of Asian and Indian customers, right? And that's just, it just is, they're looking for a good discount rate, right? I think we can all agree on that. And they're also huge referral communities. I mean, I have had a singular customer come in and they, they, they might haggle me for a good price, but when we do it and we nail it for them and we gave them a great price that they couldn't get anywhere, they are itching to tell everyone on their street.
Starting point is 00:55:43 You're the guy for the community. Absolutely. And oftentimes they all live. live in the same neighborhood. We did three on the same street. Yeah. In July, we did three on the same street. Two in one day, one the day after.
Starting point is 00:55:54 And it was literally boom, boom, boom. We got a Facebook ad from one of them, haggled me. We went back and forth for forever. I finally gave him a great deal on it. And he was like, all right, both of my neighbors want the same thing. And I was like, all right, great. Now you made it worth my while. Yeah.
Starting point is 00:56:08 But referrals, I think are huge. We have also started, and this is something I'm toying with the idea of. We have started to do like little, freebie packages when we do an install. I think it's a high enough ticket to justify it. But I'm looking at maybe a nice like insulated cup or mug that has our logo on it when you get your drinking water,
Starting point is 00:56:28 when you get you when you make your beverage and you think of us. Because the other thing people forget is while this feels like a one time service, it's really not. It's in every five to 10 year service, which young people like myself, they think 10 years from now. That's basically a one time service. It's really not. Yeah.
Starting point is 00:56:46 You do good work and you see. stay in business, you will get a lot of customers. And once you hit year 11, you will now have an endless supply of reinstalls based on the work you did over the first 10 years. So you just need to swap it out every 10 years? Yeah, a lot of the systems just, they just don't last forever. And it really depends on how hard the water is. It really depends on how much wear and tear on the system it makes, but they don't last forever. The valves go, the media just gets used up, right? And over time, they need to be swapped. Can you not just swap the filter on these?
Starting point is 00:57:19 So it's not a filter in the traditional sense. There are filters that need to be swapped. Right? It's the tank itself is filled with resin and carbon. And the water flows down through it and then back up and out of the tank. Eventually, every, every gallon of water that goes through the tank uses up 0.001% of the carbon. And so over 10 years, you will use up 90% of the carbon. and now your chlorine levels are going to start to rise
Starting point is 00:57:48 and they need more carbon put in the tank. So either that's a tank refill or in a lot of cases, we have such a good price point that they'll just get a whole new system. Because if you just do a carbon refill, your valve could be super old and that could be close to a mechanical failure. So why wouldn't we just do a refill or do a whole tank swap for you? Yeah. I know what you're doing is working brilliantly.
Starting point is 00:58:12 I would be so curious to see what would happen if you, A, B, tested ads where one of the ad advertised like a free in-home test. And you actually sent someone in there to do a test just because the visual of like your water sucks. Look at this little strip is so powerful. And I think you could offset that cost more than that cost with a higher price as well. We, we 100% could. I think for me, it just becomes an operational weight. Sure. It's like how many guys do I want to manage? How many people do I have to train and babysit and fire and, you know, things like that. It's not a lever you need to pull now, but eventually all markets get more saturated. Absolutely. And in time when once again, it's a part of the reason why I love our advertising
Starting point is 00:58:53 strategy, over half of our customers already had that experience. Connecticutco already came in their home, showed them the test. You didn't have to pay them. And I didn't have to pay anyone, you know? And they already know they have a water test. And they're like, look, I saw how bad it is. I need this fixed, but I can't afford it from them. Do you have any data on specifically what percentage of your previous paying customers had someone in their home? I don't have the exact number, but I could very confidently say it is over, over 35%. Wow, that's wild. Just anecdotally, based on what people are saying.
Starting point is 00:59:27 Just based on the pure number of people that send us a water test, which you don't just have a water test laying around, right? That means somebody came and did a water test for you. And we always say on the call, do you have a water test? Did you get one done? and then if they say yes, we say, great, send that over. And then now we're on even terms with Eco Water or whatever it is because we have the same information in front of them.
Starting point is 00:59:49 They already had the shop. Even if we don't see their pricing, but we know exactly what Eco Water knows. So there's no knowledge gap. And now the in-home visit has no value. They already had the shock value, which we can piggyback off of. And we have the test results. So there you go. Now we're on even terms with whoever already quoted them and our price is cheaper.
Starting point is 01:00:09 or if they say no, we didn't have a water test done, can you come and do a water test? If it's a private well, we will do a water test or send them to someone else to do a water test, like a third party, the county, whatever, because wells are a little bit more intricate and you don't want to prescribe the wrong well system. But the majority of our customers are city water systems, in which case I can say, you know what, you might have been told by someone that they need to come out and test your water. That's really just kind of a sales gimmick. I'm not a fan of that personally.
Starting point is 01:00:39 I'd rather save you your Saturday afternoon and save you the cost of a sales rep. Just pass that savings on to you. I can pull up the EWG water report, public government database, and I can tell you exactly what's in your tap from the second that it left the water treatment center. And people love that.
Starting point is 01:00:58 They eat that up. So it's a great sales tool, but can you do anything with previous test results? Like, what does it change about your operations? Are you putting a different system in there based on what it shows? It's just system. prescription. It's just me being able to say with absolute certainty, I see the numbers in front of me
Starting point is 01:01:14 and I know with 100% certainty this system will solve your problem. Versus if there's no test, I can say based on publicly available data, it's just not as strong. It's just not quite as strong. And if you already got the test, why would I not sell on the authority that that test builds in? Yeah. What have you done wrong in this business that you could have done differently? I wish I had more inventory. You know, that's been a bottleneck for us. endlessly. And it's a good growing pain, but it's still a growing pain. That's definitely the first one. The second one I would say, I probably, I probably would have focused a little bit more on the back end and the recurring side of the business. Up to this point, we haven't sold a single
Starting point is 01:01:53 backend client. And this one, I'm in filter swaps annually, salt services. A, if you get a UV disinfection, which is like a light bulb, that bulb needs to be changed annually. Pre-sediment filters need to be changed every six months. There are small, low ticket things. And this one I'm in a bit of a rock and a hard place with because I think it's part of what causes us to sell at such a high clip is that we advertise not just as the cheapest front end system or one of them, but also the lowest cost to maintain because we are not going to nickel and dime you.
Starting point is 01:02:26 You can change your own filters. We're not going to pretend that you can't, right? You can do your own salt. We're not going to pretend that you can't, whereas so many companies will also sell hey, it's $5,000, but it's also $500 a year for us to come out and do all your filter changes and flush the system, even though the system flushes itself. So, you know, and that was a big selling point for us is, yeah, we're cheaper on the front end, but we also have a system that you can totally self-maintain. You don't need me involved at all. And I'm not going to charge you anything
Starting point is 01:02:59 unless you call me and you tell me you want to add something on or you no longer want to handle a service. Now we're at a point where we've sold 100 jobs, you know, we're closing in on 100 jobs sold and we don't have a single penny of recurring. Yeah. Where maybe if I would push filters a little bit harder, we probably could have sold on just upfront price and then matched competitor recurring pricing and built a little bit more value in our book. But that's really probably the only other thing. Have you ever had an install that just went completely off the rails. I wouldn't say completely off the rails. We've had installs that it's taking us four tries to do it. We just had one where we went out. We planned the install. We went to do everything and then the
Starting point is 01:03:45 outlet wasn't working properly. So we couldn't do it. And the customer was like, well, can you just leave it set up and I'll just plug it in when I get the outlet fixed? No, we can't do that. So we had to pull out a lot of the components. Let them get an electrician in, come back. We come back. All, it's still not working properly. Now it's short. It's short. when we're plugging it in because they hired some cheap handyman electrician. Pull our stuff again. They get a real license electrician. We come back a third time.
Starting point is 01:04:12 So we've had some jobs like that that just like get drawn out for weeks and they're just like painful for the plumber and for me, hurt margin, you know, things like that. But we really haven't had anything go completely sideways and it's part of the reason why I love the model so much. And it's because these plumbers, it's not that they just really care about me and really care about my reputation, it's not my reputation, it's their reputation. It's their license. It's their insurance. And, you know, they understand that a bad install will reflect much more heavily on them than it will on me. Yeah. Yeah, I'll get a one star review from it. But they're going to get
Starting point is 01:04:49 the insurance claim. They're going to get the infraction against their license. Like, these guys take this work very, very, very seriously. How can people avoid the most headache when starting this business or accelerate their success? I think accelerating your success, if you're going to sell jobs and you're not going to have inventory, take a deposit. It'll stop people from walking if your inventory gets delayed. Okay. Do you take deposits? I do not because I have inventory. So I just install right away. Okay. Like if you said yes today, I'd say, can we come tomorrow? You know, that's how we operate. Yeah. But if you're not going to have inventory on hand and you're going to get a customer to say yes, sign a service agreement and then you're going to order inventory, wait for it to ship in,
Starting point is 01:05:35 all that, which a lot of people want to do if they want to cost in the beginning, ticket deposit. It stops the customer from just walking because they get bored of waiting or because they got a better offer from someone else, right? That's the first thing. And then the second thing I would say is do not stress at all about any of your sales or marketing data until you're at least a month in. We actually looked at the numbers of that closing of those eight,
Starting point is 01:06:00 18 jobs that we closed, only one of the 18 jobs from that 90 leads we talked about earlier, only one of them was closed on the day that they opted in, opted in on their first call. Yeah. One. That doesn't normally happen. 17 of them were closed at least one additional touchpoint. Okay. And 10 of the 18 were closed outside of three days after their first touch point.
Starting point is 01:06:29 Okay. So keep following up. Don't be depressive. They don't pay on the first day because most people won't by nature of how expensive this. Yes. And even like getting the first touch point actually with them. Like understand you might have to contact a lead eight times before you even get the conversation.
Starting point is 01:06:44 And then the timer starts then. Yeah. So it still could be two weeks until they pay after that. Our longest lead to close cycle so far was 49 days. Wow. And there was probably two dozen touch points in there. Most people are going to quit on them by then. Most people are 100% quitting on them by then.
Starting point is 01:07:02 And when you do the math, quitting on them makes no sense. Even with that customer that we waited 50 days and had 20 plus touch points, the average touch point costs you 60 seconds. You know, a non-answered phone call, a non-answered text costs you 60 seconds. Yeah. So 20 minutes of time plus let's call it three real lengthy conversations of 20 minutes. It's an hour and a half of your life to close that one customer and we made a thousand dollars on it. Yeah.
Starting point is 01:07:33 Like it still makes a lot of sense. People just get very discouraged. And it's almost why I don't like saying I one call closed my second lead on $40 of ads. It's not realistic at all. Yeah. And we have one call closed like five customers since then. Yeah. We have two, three, 10, 20 call closed five times as many.
Starting point is 01:07:54 Yeah. Before I asked you, before I ask you. Before I ask you where we can find you, is there anything I should have asked you about what I didn't? Anything interesting about this industry? I think the most interesting thing is the fact that the model has nothing to do with water filtration. That's, I think, the thing I get personally most excited about. We are in a time period right now where there is an ever-diminishing amount of skilled laborers and people that are really, really talented at what they do.
Starting point is 01:08:24 I mean, way more people are retiring than there are people that are starting. And what's, what's happening is effectively between that and the giant PE entrance into this space, you have so many service types that have a market rate that is just completely made up by whoever the five people that offer the service are. Yeah. Like the fact that the going rate for this service was $8,000 has nothing to do with water filtration. Yeah. I guarantee you if you spent a weekend, you could find six to 10 more services. You know, if you want in the electrical, like an MPU, a main panel upgrade, you know,
Starting point is 01:09:04 that I guarantee you that has a $10,000 price point. There's no reason that that costs $10,000. And no one's thinking about it. No. And there's just a shortage of good electricians and people that can bring leads in and, you know, make it make sense for a customer. I think there's so many of these opportunities that exist in the trade. in HVAC, in electrical, in plumbing.
Starting point is 01:09:27 And it's not a, this isn't a water filtration business model. Water filtration is the product and the service, but it's not the water filtration that made it special. It's that gap that exists in so many of these high ticket, very skilled trades. Well, Jeff Bezos used to say, your margin is my opportunity. That's kind of what you're saying. Yeah. And I always say on this podcast, there's over a thousand home service industries,
Starting point is 01:09:49 but you're saying like the industry is the product within the industry. So if any given industry like plumbing has, let's be conservative and say five, like higher ticket offerings within that water heater install. I know a guy that only does water heater installs. He's not a plumber. He subs it out to plumbers. Then there's 5,000, 10,000, 20,000 sub industries industries of just offering one high ticket service within a bigger industry. And how many entrepreneurs out there are even have those on their radar to compete with you? No one.
Starting point is 01:10:20 They're vibe coding apps. Yes. And so you're saying like, cool, that's cool. I vibe code apps too, but the more people that are doing that, the more opportunity there is for stuff like this. Yes. And this is, it will always be overlooked because people, they don't understand it. They think that it is harder or more complicated than it really is. And I think they think that they don't understand how high margin some of this blue collar stuff is. They think all the margin is in tech. They think all the margin is in, you know, these fancy new school businesses, SaaS that has a
Starting point is 01:10:53 100% margin. Yes, you're not going to do water heaters at 100% margin, but that $8,000 water heater is 70% margin. You can come in and not really even be very good at sales or marketing. Yeah. Just put your price in the ad. And just wedge the market on price and deliver a good service with a high quality, especially if you can do a licensed installer. I mean, and that's a business and it's really not. It's a website and a chat GPT ad and a decent sales script and then just enough product knowledge to, you know, hold the conversation with an installer. Yeah. I think for me personally, one of the biggest takeaways from this is just putting the price in the ad for a high ticket home service and finding the people that are already
Starting point is 01:11:38 educated. I'm sitting here wondering, like one of the first things I do after you leave my house is I'm going to log into my meta ads manager and I'm going to go to my backyard fun house, Facebook ads where we sell sport courts and pools. And I'm going to make an ad that just says it has, it'll have a picture of a sport court painted with pickleball and basketball, and it's going to say $29,000 sport courts. And I'm only going to find those random people that know that that's actually a $40,000 sport court. I'm going to call that guy. Yes.
Starting point is 01:12:05 Like, why wouldn't the same principle apply? Fewer people that need a sport court? Of course, but there's still people. Meta can find them. Absolutely. I mean, that is exactly, I think, the thing that was so mind-boggling to me because I think a lot of people know that home services advertising is either founder focused or offer focused. That's what I've found works, right? It's either about you and the brand and your locality
Starting point is 01:12:29 and all of that or it's about the offer. Buy one, get one free, you know, a great price, etc. Why try to force a good offer in an ultra competitive niche? Just go find a niche that is lacking people with a great offer. And then that is the sales and marketing. The whole is the offer. Yeah. That's brilliant. Parker, this has been amazing. Where can people find you and or your businesses? Yeah.
Starting point is 01:12:54 Parker J. Smith on everything. So that's Parker J.A.Y Smith, Instagram, LinkedIn, TikTok, Twitter, X, whatever, and then at Parker Home Services on YouTube. And I upload twice a week on YouTube, post every day on short form and everything else. And I help people start home service businesses, grow existing ones. And I love them. I've been constantly building my own for three years. I plan to keep doing it for another decade.
Starting point is 01:13:17 another decade. Beautiful. Thank you, Parker. Absolutely. Thanks for having me. Hey, guys. If you're still listening to this, it's probably because you haven't had a chance to take your AirPods out.
Starting point is 01:13:26 You're still mulling the lawn. You're still driving. What have you. If you're still here with me, I would really, really love and appreciate a five-star review on Spotify, Apple, or wherever you get your podcast. It would mean a lot. If you want to go the extra mile, share this episode with a friend that might have an interest in starting a business.
Starting point is 01:13:43 It would mean a ton. Hope you have the best day of your life today.

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