How to Build a $3M Exterior Cleaning Company (Coaching Call)

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In this video, I'm going to give you a case study of a home service business that's going from $1 million in annual revenue to $3 million in annual revenue.
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And they're using all the playbooks that are contained inside of my book, Copy and Paste Millionaire.
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This is actually going to be a coaching call, a one-on-one call with Zach from Downspout Exterior Cleaning, where they do pressure washing, house cleaning, soft wash, gutters, as well as Christmas lights.
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And,
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And we're going to be figuring out how we can take his business from a very profitable GM run location with him kind of juggling everything to actually delegating roles around sales, operations, and admin.
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So he can grow to $3 million at his one location, but then make it the hub to the hub and spoke model where he copies and paste $1 million locations around the East coast without any further delay.
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Let's get the Zach from downspout exterior cleaning.
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So to be honest with you, Mike, like...
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I'm at a stage in the business right now where I wrote out a business plan about two years ago.
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And I didn't think I would be this good at calling my shot, but I've kind of called my shot.
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And we're at a million bucks.
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I have a general manager who has honestly taken over a ton of the role of admin.
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He's sold like about a quarter million bucks in sales this year.
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and manages a great job managing the schedule.
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And I'm at this inflection point where I feel like, all right, how do we get to that next step?
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So honestly, I put together that briefing to kind of give you an idea of where we're at.
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But I wanted to share with you my goal in order to get to that 3 million mark and then on to 5 and then 10.
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I get a lot of advice from a lot of people.
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I'm very fortunate to have an awesome core group of guys that I can refer to, guys that own that roofing company.
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They do like $10 million a year.
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And I think they might have gone a little bit past that this year.
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My friend started a franchise called Launch Trampoline Parks.
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I don't know if you've heard of them, but their total network value is around $100 million.
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Now he sold that, and now he started the fencing company, like doing installs and whatnot.
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And I have another friend of mine who built up a PT practice that now he just goes around and buys other PT practices and does like a corporate roll-up model.
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So therein lies a perfect example of like the roofing guys doing more of a corporate grow organic model, franchise model, similar to like what you've done, and then the corporate roll-up model.
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Yeah.
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I feel like I'm in this span.
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I want to make sure that we get all our systems and processes really dialed in before I start to say, okay, let's get to 3 million because that won't happen per your copy and paste book if we don't have everything dialed in.
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So I wanted to see, I wanted to get your eyes on the P&L if that's possible.
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I have it up here.
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And I'd honestly like you to kind of like ask questions and be like, hey, what's going
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what's up with this and like poke holes and things.
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Cause that's where I get my indecisiveness is where I don't know where to put and allocate funds.
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Like, um, when I take distributions, when we can hire and properly maintain good talent, like I've been working through my GM's, uh, compensation plan all this year, all this past like couple of weeks over the holiday.
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So that's just me throwing a whole bunch of stuff at you.
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I know we don't have a ton of time, but I figured I'd just start with that.
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Yeah, totally.
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And so are you are you set on a specific scaling strategy?
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Like, are you like, I'm doing corporate or I'm going to do franchising or do multiple locations or do like a 10 and 15 million dollar?
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Like, do you have a specific path you already want to travel down?
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Or are you kind of open to possibilities right now?
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I'm honestly open to possibilities.
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Like I just finished your book, copy and paste millionaire, like probably last week, love the hub and spoke model.
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That's honestly how I was kind of trending as I was building it out.
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And when you laid it all out on the line, I was like, oh, wow, this makes like perfect sense.
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But I mean, my lifetime goal is to get to like $100 million company.
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Like that's my lifetime goal.
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Right now, within the next five years, if I can get to like eight figures, like doing $10 million a year, short term goal is to get us to $1 million in EBITDA, which I think we can do between $3 and $5 million in top line revenue based on our margins that we're seeing now.
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The biggest decisions I have to make right now are like hiring a sales rep and then hiring an admin because I don't have an admin.
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Dan has been doing a phenomenal job doing admin.
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He's definitely underpaid and overworked at this point.
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Sales rep, I need to get out of the residential sales and focus on the bigger ticket commercial sales.
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That's where I think I need to be.
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Open to suggestions on how to grow and scale and open to suggestions on when to hire those people too.
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Yeah, you're definitely like that $1 million to $3 million phase is like the most precarious because you're still involved a little bit in lots of aspects of the business.
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And so finding those key people early is going to be the thing that like you lock those whole departments down.
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So like the thing I don't really talk about in the book is a big reason why we franchise is because I knew I'd lose my best admin, my best salesperson.
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And I was like Lee and Liz, if we do something, if I didn't challenge them.
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And so I think.
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You're profitable enough.
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And if you're okay with having a year where, hey, we don't make more profit, but I go out and get two like absolute killers that can just take these departments away from me.
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That would probably be my recommendation.
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And it sounds like you have a really good network too that you could also tap into and be like, hey, I want like the best admin person you know.
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And then your current admin person, or you move your current admin person up into that role.
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Like they move up and they're going to have to learn new skills of management, be able to take their admin skills and duplicate them.
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And you'll create an LMS learning management system for their admin team.
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Same thing with the sales side.
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Like you don't want to have to be trained the salesperson down the road.
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You want them to step in and be like, oh, these are like 10 different ways you can do it better.
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And then by the way, I can train a whole team.
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When you have those things taken off your plate, then you can scale.
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Because I see a lot of people, the reason it won't get past $3 million is because you're the best salesperson.
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You've got to teach everything to that person that you hire for sales.
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And then you get an admin person, you've got to teach them everything about admin.
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And then they get people coming along and they have no idea how to manage.
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So you've got to teach them how to manage them.
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And then you're actually managing their direct reports.
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And so that's where people stall out around that $3 million marker.
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So either investing into your current business.
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admin guy and finding an excellent salesperson, that would be the unlock.
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And you have the profit margin to do it.
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But if you were able to lock those two down and then go after an operations person, probably like next year, that's probably gets you to 10 million.
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Just getting three solid people.
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Yeah.
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Now, do you think that 10 million, I don't know if we, I mean, here's the other thing is too, is like Rhode Island is a very interesting market because it's super consolidated and we have massive amounts of people in homes and also very high end.
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Like I just did the, I just learned that the per acre Rhode Island is the highest per acre cost in the United States, 385 grand.
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So like we have like this, almost like this triangle of wealth between Boston, Providence, Rhode Island, and then all the way to, you know, Manhattan basically.
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So yeah,
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you know, at what point do you say, okay, Rhode Island's tapped out.
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Like, can Rhode Island get to 3 million?
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I don't know.
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Can I get to 2 million?
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Or now we go move into Connecticut, you know, like that was kind of my plan for next year is like slowly start to matriculate into Connecticut because we already serviced part of it.
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So we kind of have a book of business over there.
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But the other part of that is like getting our recurring revenue here so that I feel like we can then copy and paste that over into Connecticut.
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So like, how far is the drive over there to
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Our shop is perfectly centralized where it's 30 minutes to Connecticut, and it's actually around 30 minutes to Providence, Rhode Island.
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It's honestly like we can either stay in Rhode Island or we could go to Connecticut, and time difference really doesn't matter.
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Yeah, if you can lock down the operational side, like sales ops and admin have a solid person at each of those, that's when your whole mission is just either A, copy and paste, like multiple locations, or especially the first hub, going straight into Connecticut.
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Would you be going to Milford area?
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uh we probably stick like new haven and then east okay okay yeah so like you would just start moving into that market like you'd focus on all the aspects of growth in those new areas but if you're able to get the first location to say three to four million by going into connecticut that's when it starts looking really interesting can you start breaking this off at like million dollar locations because like four to five employees with a gm is like the perfect model for the
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Now, the thing is, you've got to create the hub.
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Like, the hardest part about the entire book is creating command center.
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And that's why, like, your admin person, if he's a savage, I would lean into that and give him a very clear outline of, like, here's what it's going to look like.
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We're going to do multiple locations.
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You're going to have to create an admin team below you.
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You're going to have to hire them.
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You're going to have to train them.
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You have to create – like, that's the unlock.
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because you have a very high margin service.
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And if you can do it with four or five employees, do a million dollars, like that's a model that now it's not like, let's move into this market.
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You would just be like, okay, this is an hour away, but I don't want to drive.
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I know immediately I lose all my margin.
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So I'm going to just plop a location over there.
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And you just have this like rollout strategy of like one at a time.
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That looks really interesting to me, given the margins that you've been able to give a good brand.
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Like, it's really good.
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Like, it's actually pretty rare that I would be as, um,
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as positive about someone being able to actually do the copy and paste method as what you have here.
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And so the thing is, like, I think there's value in building that hub.
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And that's why I'm encouraging that part for the next couple of years.
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But I think the current model is actually what you want to copy and paste.
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Because if you notice, as you started saying, hey, we're going to go above a million, your margins started compressing.
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And just simply because now I need a salesperson.
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Now I'm going to need to build an admin team.
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If you can just build this one hub, and maybe it only does 20% margin because you have a full office, you'd have to really build it out.
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But then when you plop these an hour away, an hour and a half away –
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Yeah, exactly.
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You get a cheap little shop space, throw a GM in there.
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You have a launch strategy to spend $30,000, $40,000 in marketing.
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You immediately get up to a certain amount of recurring revenue.
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All of that's being done over the phone or through your office so they don't have to worry about it.
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We kind of do where it's 90 days with the owner's hands on.
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And then the whole objective of that is to get the recurring base high enough to where we get above breakeven.
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Then it can start moving a little slower because if you throw a new GM into a growth system,
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location that is just every single day getting two, three, four new recurring customers.
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Like it's just, they usually can't handle it.
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But if you can do it for 90 to 120 days where you get in there, you scale it to that point, then you hand it off to someone and then it starts growing a little bit slower.
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And if that location can do a million dollars in its second year with 25, 30% margin, like
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You're off to the races.
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Yeah.
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When it comes to, because like that's one thing that I've been hard to crack is like the recurring revenue model in this space.
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Like mowing, I get it.
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Grass grows every week.
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Like you got to go cut it.
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But like here we've been trying to do with windows to kind of lock that customer in.
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But what tends to be the issue is like windows is low margin, you know, or it's just like low ticket, I should say.
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It's just like mowing.
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We don't make any money on mowing.
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Oh, really?
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So you guys are like the fertilization stuff is like where you guys are making your money.
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mulch, bush trimming, leaf cleanup, like all that stuff is 60% margin, but everyone thinks they need mowing and that's what they search.
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And so I think it all comes down to your upsell process, both before and during and after the window cleaning and any other service, really any service.
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But because windows is so like, do you guys usually go inside too or just outside most of the time?
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We've tried inside, inside is a nightmare.
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It's a nightmare.
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So like most of the time your clients are home, right?
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Yeah, I'd say 80% of the time.
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Cool.
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Yeah.
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So like I would create a really solid upsell strategy with your crew out in the field.
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And like package all the other services you know you make money on with the Windows services.
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So you'd have like your Windows – do you already do this?
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I'm assuming you probably do.
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Sort of kind of upsell.
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I, we upsell like all the time.
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My techs haven't sent buys, like they get 5% commission on whatever they upsell when the customer is, you know, if we already bought the customer.
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So yeah, we do some of that, but we haven't packaged it in product.
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That's like where I've struggled.
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Yeah, you can just make a really solid offer to where any upsell the tech gives is overshadowed by a package that is just killer.
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It's like, here's all these things, and maybe you have three or four things you know you're always going to be able to give them as an upsell.
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By the way, if you just wanted this monthly subscription that we do, you can make the cost look so different.
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when in reality, it's just the frequency of service is so much greater.
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And then you just package, bundle up, you call it something really cool.
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Like you just integrate your, you'd have your downspout package, which is basically like everything above.
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Like you could really make it like a one, two, three.
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It's 99, 149, and 199 a month.
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Here's the things that you're getting.
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Here's the guarantees that come along with it.
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Or you do want a $500, you just paid us 500 bucks.
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What do you pay a hundred bucks a month?
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Like you can make it really a slam dunk offer.
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And then you just make your texts like, be like, hey, present these first.
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And then your downsell is this thing.
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And then if they accept one of these, be like, oh, by the way, we have this promotion.
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And then we'll save you even more money.
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Does it sound crazy?
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Cause I've thought about the, so if I use pay, let's pay.
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like a 1200 bucks for the house wash. Like that's typically our average ticket is like four is like 1346.
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That's good.
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Really good.
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Really good.
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Thanks.
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Yeah.
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I mean, I think that's why you have good margins.
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Most of the time that's not the case in soft wash. A good one.
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Good job.
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No.
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Yeah.
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No, the 12, 1300 are not common.
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Like you're also in a higher market, like it's a larger houses, et cetera.
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But, um, you know, I, I see way too many soft wash guys going at five, 600 bucks.
204
00:13:47.909 --> 00:13:48.830
Now it's, it's crazy.
205
00:13:49.610 --> 00:13:51.752
Oh yeah, we're not leaving the shop for that.
206
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No.
207
00:13:54.114 --> 00:14:08.046
So if you had a $1,200 house wash, like house windows, the whole shebang, and you just paid $120 a month or $100 a month for the year, I mean, is that crazy to try and sell that?
208
00:14:08.406 --> 00:14:12.029
And then at what point do you start to, at what point do you add that in?
209
00:14:12.069 --> 00:14:15.052
Because now I'm also worried about cashflow.
210
00:14:15.272 --> 00:14:15.452
Right.
211
00:14:15.492 --> 00:14:19.016
Like we're so used to having those twelve hundred dollar tickets come in every single month.
212
00:14:19.056 --> 00:14:20.778
But now we're only having one hundred twenty bucks.
213
00:14:20.818 --> 00:14:24.022
And yeah, that looks great over when you amortize it out.
214
00:14:24.483 --> 00:14:26.064
But initially it's going to kind of hurt.
215
00:14:26.885 --> 00:14:27.086
Yeah.
216
00:14:27.286 --> 00:14:30.209
The thing is, if someone washes their house every year.
217
00:14:31.114 --> 00:14:33.496
Like they don't need it, like correct me if I'm wrong.
218
00:14:33.536 --> 00:14:35.257
Do they need to be cleaning their house every year?
219
00:14:35.497 --> 00:14:36.118
No, not at all.
220
00:14:36.538 --> 00:14:38.079
Right, and so that's what you're going after.
221
00:14:38.239 --> 00:14:45.885
You're going after the fact that the second, the third, the fifth, fourth visit is a fraction of them at a time and that every time you show up you're selling them another thing.
222
00:14:46.105 --> 00:14:55.111
And so what's so nice about this service is it probably needs to be done every three to four years like to look really bad, depending on obviously like the property.
223
00:14:55.552 --> 00:15:00.195
But if you can get them on once a year, in their mind you can compare annual versus the monthly.
224
00:15:00.495 --> 00:15:05.981
In 2026, we're trying to give away 100,000 copies of the copy and paste millionaire book that I recently wrote.
225
00:15:06.301 --> 00:15:11.586
It's the blueprint from getting from zero to $3 million in revenue for any home service business.
226
00:15:11.987 --> 00:15:17.953
Now, as part of the 100,000 book challenge that we're trying to give away, we have two ways to be able to take advantage of this.
227
00:15:18.273 --> 00:15:20.736
One, you can get the free audiobook, e-book, e-book.
228
00:15:21.176 --> 00:15:29.439
the course, and a physical copy of the book sent to you for free without paying shipping if you go to mikeandies.com slash CPM course.
229
00:15:29.979 --> 00:15:33.721
Now, if you're like, I don't want to take a course, I just want the book shipped to me right away.
230
00:15:34.141 --> 00:15:37.942
You can go pay for the shipping at $6.50 for a $35 book.
231
00:15:38.323 --> 00:15:39.283
I'll cover everything else.
232
00:15:39.523 --> 00:15:41.924
Just go to mikeandies.com slash 100K.
233
00:15:42.624 --> 00:15:46.866
Our goal is to get this book in the hands of 100,000 home service business owners.
234
00:15:47.782 --> 00:15:49.383
And so you can be like, hey, you just paid $1,200.
235
00:15:49.763 --> 00:15:49.983
Great.
236
00:15:50.283 --> 00:15:52.043
Let's do $99 per month.
237
00:15:52.103 --> 00:15:52.964
It's $1,200.
238
00:15:53.324 --> 00:15:55.925
It'll save you $200 a month, even the payments out.
239
00:15:56.005 --> 00:15:58.065
And if you do that, you get this other thing for free.
240
00:15:58.625 --> 00:16:04.987
You're going to have this other thing for free being so good and so juicy, which you know is like 90% margin and just takes your time.
241
00:16:05.007 --> 00:16:06.488
And you just do it when you're there already.
242
00:16:06.708 --> 00:16:16.075
And that would assume we just want to do it around the soft wash. Like I would be really interested in creating another bundle around like, hey, we do your lights.
243
00:16:16.175 --> 00:16:16.935
We do your gutters.
244
00:16:17.195 --> 00:16:19.337
We do your soft wash. We do your windows.
245
00:16:19.357 --> 00:16:19.997
We do everything.
246
00:16:20.138 --> 00:16:21.418
That would be interesting to me as well.
247
00:16:21.438 --> 00:16:26.102
And that's like your $99 package is like the very simple, hey, you just paid us $1,400.
248
00:16:26.162 --> 00:16:29.544
Why don't we make that $1,200 a year just even out the payments and you get this thing for free?
249
00:16:29.964 --> 00:16:32.066
Second option, $1.99, but you get lights.
250
00:16:32.086 --> 00:16:33.147
You get all this other stuff.
251
00:16:33.767 --> 00:16:36.689
And that's the one where you start to make probably more margin on.
252
00:16:36.869 --> 00:16:43.574
But the thing is, the nice thing about having the first one, even if you got $1,200 for a service that you get $1,400, first off, you get them for the second service.
253
00:16:43.654 --> 00:16:47.937
And in my opinion, the whole objective is get them from one time to just a second one.
254
00:16:48.498 --> 00:16:52.741
And then if you can do that, you just double at least their lifetime value.
255
00:16:52.981 --> 00:16:55.262
Yeah, it's really the scheduling aspect.
256
00:16:55.423 --> 00:16:58.605
You're able to have way more schedule flexibility when you get them on this annual thing.
257
00:16:58.845 --> 00:17:01.626
Because right now they all come barreling in in Spring Rush.
258
00:17:02.087 --> 00:17:03.407
And then you've got to figure things out.
259
00:17:03.727 --> 00:17:07.129
When they're on an annual subscription, you can just be like, yep, this is going to be your date.
260
00:17:07.149 --> 00:17:12.232
And you'd actually just move all your subscriptions out of Spring Rush, thereby increasing your annual capacity.
261
00:17:12.872 --> 00:17:13.972
Yeah, yeah, yeah.
262
00:17:14.032 --> 00:17:16.213
So you can put more money into one truck by that.
263
00:17:16.234 --> 00:17:16.514
100%.
264
00:17:16.954 --> 00:17:17.334
Yeah.
265
00:17:17.614 --> 00:17:26.218
So you might give them 20% off against a one-time visit, but you're able to move them outside of time when you're otherwise basically turning away leads.
266
00:17:26.278 --> 00:17:26.479
Yeah.
267
00:17:27.559 --> 00:17:28.499
Yeah.
268
00:17:28.519 --> 00:17:30.580
Do you know of anyone that's done this model in this space?
269
00:17:30.800 --> 00:17:31.580
There's quite a few.
270
00:17:33.260 --> 00:17:34.361
Not right off the top of my head.
271
00:17:34.401 --> 00:17:35.961
I'm talking to, oh, what's his name?
272
00:17:36.221 --> 00:17:36.861
Give me one second.
273
00:17:36.881 --> 00:17:37.882
I can actually find a name for you.
274
00:17:37.902 --> 00:17:42.543
I'll try to connect with a guy that's local that does this and they do a great job.
275
00:17:42.743 --> 00:17:44.663
But I think it would 100% work.
276
00:17:44.783 --> 00:17:48.824
It's all about how you train your upsells, like your technicians on that and how you incentivize them.
277
00:17:49.164 --> 00:17:54.126
But I would, like, if the one fear that you have is like, I'm putting a $1,400 ticket down to $1,200,
278
00:17:55.366 --> 00:17:56.247
I'm losing my margin.
279
00:17:56.547 --> 00:18:00.532
I would think of it as one, I'm locking, there's doubling of lifetime value.
280
00:18:00.672 --> 00:18:06.419
But more importantly, you have scheduling flexibility, increasing the amount of revenue you can do per year per truck.
281
00:18:06.659 --> 00:18:09.803
Like I would just be like, okay, these four months, I know I'm getting crazy amounts of leads.
282
00:18:10.283 --> 00:18:11.705
None of my subscriptions are going in there.
283
00:18:11.805 --> 00:18:13.307
I'm pushing them all off later in the year.
284
00:18:13.467 --> 00:18:15.889
Yeah, it's kind of like the early bird Christmas light installs.
285
00:18:16.229 --> 00:18:18.450
Like if you install in September, great, love it.
286
00:18:18.731 --> 00:18:24.635
Yeah, I mean, and then, you know, what's funny, Mike, is like I thought about, well, you could just literally copy and paste just the Christmas light business.
287
00:18:24.755 --> 00:18:26.456
I mean, that's almost like its own separate thing.
288
00:18:26.956 --> 00:18:34.902
So part of what I was thinking about in terms of scaling and tell me if I'm crazy is like, we actually, we added a fourth truck this year.
289
00:18:34.922 --> 00:18:38.624
I'm sorry, a third truck this year, just by renting one for like 2,500 bucks.
290
00:18:38.804 --> 00:18:40.626
And then we sold like 70 grand into it.
291
00:18:41.066 --> 00:18:42.467
And then I just like turned it in.
292
00:18:42.667 --> 00:18:43.227
It was great.
293
00:18:43.267 --> 00:18:44.128
I put a lot of rack on.
294
00:18:44.168 --> 00:18:44.688
It was awesome.
295
00:18:45.128 --> 00:18:56.033
Like this coming spring, this coming fall, the plan would be to go and drop a truck in Connecticut with, I have a friend over there that said he'd be willing to kind of manage and he's a sales guy by trade.
296
00:18:56.213 --> 00:18:57.374
So I think he'd be able to do it.
297
00:18:57.814 --> 00:19:00.215
Drop like one or two trucks over there, test the market.
298
00:19:00.615 --> 00:19:04.177
And then when we go to move into Connecticut, we already have that book of business there.
299
00:19:04.677 --> 00:19:07.319
I mean, is that like a crazy way to try it or test it?
300
00:19:07.379 --> 00:19:08.599
Or is that kind of like a waste of time?
301
00:19:08.779 --> 00:19:10.140
Or did you just say focus on Rhode Island?
302
00:19:10.160 --> 00:19:10.380
Yeah.
303
00:19:10.774 --> 00:19:11.815
I wouldn't say it's a waste of time.
304
00:19:11.835 --> 00:19:15.377
I would say I get some concern leaning on a system of like, I have a friend.
305
00:19:15.777 --> 00:19:18.719
Because when you do the second, the third, and the fourth one, you won't have that.
306
00:19:19.139 --> 00:19:23.042
So duplicating it there or proving the model there doesn't do you any good.
307
00:19:23.122 --> 00:19:25.103
Because you have a friend in every market.
308
00:19:25.523 --> 00:19:32.988
And so I would do the harder work of like, I've got to not lean on that system in order to be able to figure out the back end.
309
00:19:33.028 --> 00:19:37.011
The hub needs to work on the back end without that being the case.
310
00:19:37.191 --> 00:19:39.772
So that when you do it in second, third, and fourth, you already have the playbook.
311
00:19:39.812 --> 00:19:40.653
You just couldn't.
312
00:19:40.673 --> 00:19:41.314
copy and paste it.
313
00:19:41.754 --> 00:19:41.934
Yeah.
314
00:19:42.375 --> 00:19:59.612
So this year, I guess my big, what I kind of want to take away from this call is like, where should my focus be if the goal is like 1.82 million, where do I need to be like right now in order for me to get there and then scale into 3 million like in the next two years?
315
00:19:59.992 --> 00:20:00.733
Yeah, I would say...
316
00:20:01.814 --> 00:20:05.335
The most basically anything on your plate that's not sales needs to be delegated.
317
00:20:05.556 --> 00:20:09.717
You have the margin and as you get to that full time GM level, you have to do that.
318
00:20:09.977 --> 00:20:15.299
A lot of times that's what people stall out on one to 1.2 is there's too many admin and operational tasks on their plate.
319
00:20:15.760 --> 00:20:19.621
And so I would solidify, it sounds like you have a really all-star admin person.
320
00:20:19.661 --> 00:20:20.661
I would solidify their role.
321
00:20:20.681 --> 00:20:21.942
I would create a ramp for them.
322
00:20:22.302 --> 00:20:26.924
So like you can retain them over the next five to 10 years explaining the direction of the business.
323
00:20:27.344 --> 00:20:37.311
But like really emphasizing the importance of what the command center needs to look like, what they need to be able to do for training, creating an LMS, hiring admin staff underneath them.
324
00:20:37.331 --> 00:20:38.552
And like they are – it's all them.
325
00:20:39.172 --> 00:20:43.315
And like that includes giving them like a budget for development.
326
00:20:43.515 --> 00:20:49.139
So they might – they would go get coaching from people that have built like call centers or admin.
327
00:20:49.199 --> 00:20:51.781
Like there are people out there, LinkedIn, whatever, or go to a conference.
328
00:20:51.801 --> 00:20:53.181
It's like they got to learn how to hire.
329
00:20:53.362 --> 00:20:55.043
But you can't think about admin at all.
330
00:20:55.523 --> 00:21:01.268
And it sounds like you got someone that's kind of like, just needs to have like the, their pay ramp and like the bit of a vision to go do that.
331
00:21:01.709 --> 00:21:03.170
And then operation, same thing.
332
00:21:03.491 --> 00:21:03.971
Right now.
333
00:21:03.991 --> 00:21:08.135
I kind of have, it's my guide does like ops and admin.
334
00:21:08.575 --> 00:21:08.896
Got it.
335
00:21:09.096 --> 00:21:09.596
The sales.
336
00:21:10.137 --> 00:21:14.501
And I'm like, he's, we're losing things at this point because it's just too much.
337
00:21:14.701 --> 00:21:19.008
Yeah, so like the delineation of those three roles is the most important now.
338
00:21:19.028 --> 00:21:22.192
Like whether he's admin or operations, like you'd have to figure that out.
339
00:21:22.273 --> 00:21:24.015
It honestly would come down to whoever you hire.
340
00:21:24.035 --> 00:21:29.323
If you hire a strong, strong admin person that's just like absolutely A+, he might be like, hey, I'll move into ops.
341
00:21:29.904 --> 00:21:31.525
And then just like we need clarity around that.
342
00:21:31.565 --> 00:21:35.767
And I would have the conversation with him be like, hey, do you prefer one of these two roles?
343
00:21:36.347 --> 00:21:38.308
Because the one that you don't want, I'm going to go higher for.
344
00:21:38.388 --> 00:21:40.689
And if you're completely indifferent, I'm going to go hire somebody.
345
00:21:41.029 --> 00:21:42.269
And it's going to be one of these.
346
00:21:42.370 --> 00:21:44.430
And then we're going to create some delineation here.
347
00:21:44.911 --> 00:21:46.051
And then you're going to focus on sales.
348
00:21:46.151 --> 00:21:48.032
If you do that, you'll get to 1.5 to 2 million.
349
00:21:48.092 --> 00:21:52.674
Like if you just do that one thing, like just delineate the roles, find two all-stars that you can lean on.
350
00:21:52.894 --> 00:21:54.315
You have the margin to pay them well.
351
00:21:54.555 --> 00:21:58.937
And then give them a ramp that's very much dependent on being able to make the hub work.
352
00:21:59.737 --> 00:22:08.580
Because that hub is going to be where you train people, like your operations, and it's going to be where you also do all the admin side so that you can copy this $1 million model elsewhere.
353
00:22:08.880 --> 00:22:13.782
But we've got to build this hub to like $3 million just to make it worthwhile to keep that office in place.
354
00:22:13.822 --> 00:22:14.443
I got you now.
355
00:22:14.583 --> 00:22:15.603
Yeah, that makes a lot of sense.
356
00:22:15.823 --> 00:22:17.484
You have to scale in order to do –
357
00:22:18.484 --> 00:22:20.605
drop and do million dollar markets.
358
00:22:20.645 --> 00:22:24.328
Because, yeah, otherwise what happens is people are like, I'm going to start copying and pasting $1 million.
359
00:22:24.468 --> 00:22:31.232
And now they have three shops doing a million bucks, but because they have an office just anchoring it all down with overhead, they don't make any money.
360
00:22:31.592 --> 00:22:37.275
I want that one location to be at 20% to 25% margin at $3 million, but it has a full office.
361
00:22:37.636 --> 00:22:44.780
It has a training center, like basically a room where you can train admin, or sorry, train operational people, train GMs, et cetera.
362
00:22:45.180 --> 00:22:47.682
And then you just start going to new markets.
363
00:22:47.702 --> 00:22:48.543
Like, where's the new market?
364
00:22:48.763 --> 00:22:52.126
Can I get a really cheap lease in a good, like very centralized area?
365
00:22:52.446 --> 00:22:53.366
Find a great general manager.
366
00:22:53.667 --> 00:22:54.107
All right, great.
367
00:22:54.327 --> 00:22:56.489
You go to training and my ops guy is going to train you how to do it.
368
00:22:56.769 --> 00:22:58.310
And you do all that during your off season.
369
00:22:58.851 --> 00:22:59.071
Yeah.
370
00:22:59.091 --> 00:22:59.231
Right.
371
00:22:59.251 --> 00:23:03.014
So like, this is going to be something you will probably be chomping at the bit to do this time next year.
372
00:23:03.394 --> 00:23:05.176
And it might be the year after you actually do it.
373
00:23:05.196 --> 00:23:05.396
Yeah.
374
00:23:05.636 --> 00:23:15.439
But that is you will bring people, your GM prospects to your, you train them up, you got admin coming in, and that person is training up and it puts all at the hub.
375
00:23:15.959 --> 00:23:24.862
And the spokes is where you spend all your time on, which is like, I want to ramp this thing up, bunch of marketing dollars, ramp this thing up, hand it off to GM, ramp it up, hand it off to GM.
376
00:23:26.162 --> 00:23:32.724
How do you go about, cause like right now we finished the year off like 170 grand in the bank cash.
377
00:23:33.204 --> 00:23:37.906
I've been taking a $70,000 salary just to like, and I have a rental property.
378
00:23:37.946 --> 00:23:40.687
So like that house was paying for a bunch of stuff.
379
00:23:40.747 --> 00:23:41.907
Like I'm fine.
380
00:23:42.007 --> 00:23:45.969
Like I'm a very, I try and stay pretty frugal during the summertime every once in a while.
381
00:23:45.989 --> 00:23:47.129
I'm a boat captain by trade.
382
00:23:47.169 --> 00:23:50.770
So I'll go run a yacht for someone and I'll make like three grand.
383
00:23:50.810 --> 00:23:51.711
I'll be like, okay, cool.
384
00:23:51.891 --> 00:23:55.092
I don't have to, you know, think about all the other ancillary bullshit.
385
00:23:56.053 --> 00:24:01.039
But I'm really trying to like this year focus fully and like get all the distractions away.
386
00:24:02.841 --> 00:24:04.323
I bought that property a long time ago.
387
00:24:04.503 --> 00:24:07.367
So it doesn't I mean, that's things like runs on its own.
388
00:24:08.048 --> 00:24:10.611
But how do you get through that?
389
00:24:10.811 --> 00:24:11.011
Like.
390
00:24:11.732 --> 00:24:24.416
almost like that fear of like, all right, there's 170 grand in the bank, we have to allocate XYZ, like I just bought another truck, because with three trucks, we can get to that 1.5, 1.8, maybe 2 million, depending on where we are with gutter installs.
391
00:24:24.676 --> 00:24:25.456
How do you get through that?
392
00:24:25.496 --> 00:24:28.297
Because margins are now going to go down, right?
393
00:24:28.857 --> 00:24:29.397
I hate that.
394
00:24:29.957 --> 00:24:36.842
Like that's a pit in my stomach, you know, like I'm, I'm happy with that 22 to 25% margin that we're at right now.
395
00:24:37.563 --> 00:24:41.906
And I don't necessarily like to hear that, but I know it's just the reality of it.
396
00:24:42.467 --> 00:24:51.474
So like, how do you deal with that in terms of like when you're building, well, what was Copilot at Homeworks and, you know, for the longest time, like watching your content and you're like, we're not profitable.
397
00:24:51.854 --> 00:24:52.054
Right.
398
00:24:52.655 --> 00:24:58.079
Or going through those first like locations with Augusta, like what's your, what's your strategy, I guess.
399
00:24:58.099 --> 00:24:58.199
Yeah.
400
00:24:58.439 --> 00:25:09.842
Yeah, like that's why if you look in, I think it's chapter six or whatever in the book, it starts with 90% of people just stop here, which is one location, 20% to 30% margin, let's go.
401
00:25:10.242 --> 00:25:16.083
If you're going to hold your breath and go to the next level, that's where you're going to see compression, and that's where it does get scary.
402
00:25:16.383 --> 00:25:28.166
I think you're in a spot, though, from a cash perspective where how I would rationalize this is you have cash in the bank to be able to justify hiring two solid people paying their entire salary for the entire year and being okay.
403
00:25:28.966 --> 00:25:36.349
And if you do that and you get two solid people consuming the right people, when you wake up in a year, you'll have a business that's twice as big.
404
00:25:36.749 --> 00:25:37.909
The valuation of that.
405
00:25:37.929 --> 00:25:41.470
And yes, you will be cash poor, but your net worth will have doubled.
406
00:25:41.870 --> 00:25:46.352
And you have created the playbook to 10x the thing.
407
00:25:47.052 --> 00:25:50.674
And so the holding of your breath from one to three is why most people won't do it.
408
00:25:50.714 --> 00:25:55.516
Although like venture into 1.2 and then come back back to one is like, forget this.
409
00:25:55.536 --> 00:25:58.658
Like I just don't wanna be at 15, 12, 8% margin.
410
00:25:59.058 --> 00:26:04.200
But like, that's why if you just focus on one location getting to 3 million, I do think you can still be at 20% margin.
411
00:26:04.300 --> 00:26:09.183
It's just that one year where you're gonna have to go a bunch of overhead in the form of a salesperson,
412
00:26:09.483 --> 00:26:11.524
an operations person and an admin person.
413
00:26:11.704 --> 00:26:20.147
Is the infrastructure required for then, for Zach, to be like the guy that you just go start locations, finds great general managers, pops them back to the hub, trains them up.
414
00:26:20.407 --> 00:26:23.829
Like that creation of the model is expensive.
415
00:26:24.629 --> 00:26:26.932
And so it just depends on like what size plate.
416
00:26:27.012 --> 00:26:34.421
When I say, when I hear, you know, 10 million and 100 million, and like you're comparing yourself to these people who are doing that size of thing, they're like, I'm gonna do that.
417
00:26:35.102 --> 00:26:36.103
That's what's gonna be required.
418
00:26:36.323 --> 00:26:40.468
There's no way you're gonna be like, this one location we're gonna do a million dollars and somehow we're gonna make 10 million in profit.
419
00:26:40.488 --> 00:26:41.930
Like it's not gonna happen, right?
420
00:26:42.170 --> 00:26:44.311
So there'll be a bit of a chasm there.
421
00:26:44.391 --> 00:26:56.178
And the next year, year and a half to two years, as you build up the hub, will be very boring for you because it'll be mostly just doing the same, more of the same, and then finding two to three really solid people.
422
00:26:56.498 --> 00:27:08.345
But if you do that and they come in and do what you're not even thinking of, which is what a great hire will do, that's what sets you up to probably do, I think it's probably your strength, which is going from zero to a million.
423
00:27:08.545 --> 00:27:11.087
And you just keep doing that one action over and over and over again.
424
00:27:11.427 --> 00:27:15.071
What people do too often, they'll read the book and like, oh, I should just start doing it now.
425
00:27:15.571 --> 00:27:22.859
And then their margins go completely to zero because they don't have the hub being profitable once you start adding the admin and everything.
426
00:27:23.039 --> 00:27:28.145
So I want you to be able to build that out and make that profitable and then start copying around that.
427
00:27:28.789 --> 00:27:35.951
When you say hiring that admin, how much of that role is almost completely autonomous?
428
00:27:36.091 --> 00:27:41.652
I have a tendency where if I hire someone, I train them up as best as I can.
429
00:27:41.672 --> 00:27:46.013
I always give people a good amount of leeway and be like, hey, make this role your own.
430
00:27:46.113 --> 00:27:47.533
And then I'm just like, that's done.
431
00:27:48.013 --> 00:27:51.534
I'm going to come and check in, but I'm not going to be over you.
432
00:27:51.714 --> 00:27:55.055
And that's kind of sometimes it's bit me in the ass, but most of the time it's worked out.
433
00:27:59.076 --> 00:28:03.880
That's just kind of the role of the board that we've been using to encapsulate his role is like he does a little bit of sales.
434
00:28:04.380 --> 00:28:12.967
He does all inbound, all the outbound, dispatching trucks, making sure collections are done, scheduling the guys like he's got a lot on his plate.
435
00:28:13.407 --> 00:28:25.337
So right now, as we're sitting like January 5th, would you say go go find that admin, train that person up and then delegate all of Dan's role off?
436
00:28:25.637 --> 00:28:47.037
to him or her and then go hire that sales rep or would it be sales first and then admin so i always want to start from lowest leverage task up right so admin first then operations and then sales and so if i was talking because what's funny is like you and him are kind of doing basically together building business right like you're basically yeah that's where i would just both sit down like hey
437
00:28:47.637 --> 00:28:53.161
We know that this is working, but we're hitting up against the fact that, to your point, you said some things are starting to slip through the cracks.
438
00:28:53.501 --> 00:28:55.883
I think he's probably pretty frustrated by that.
439
00:28:56.143 --> 00:29:04.589
If he's a really great operator, there's nothing more frustrating than little things slipping through the cracks because you know that it's just simply delegation and role definement.
440
00:29:05.010 --> 00:29:06.251
So if you just take –
441
00:29:07.051 --> 00:29:11.152
We're going to sit down and we're going to write everything in admin, operations, and sales that we both do.
442
00:29:11.572 --> 00:29:12.912
And you just start categorizing it.
443
00:29:13.312 --> 00:29:18.134
And then you simply say, we've both got to choose one of these categories, and then we're going to hire for the third one.
444
00:29:18.274 --> 00:29:20.634
And then he's going to be like, no, I really like working with the guys.
445
00:29:20.654 --> 00:29:21.654
I like training them.
446
00:29:21.694 --> 00:29:21.914
Great.
447
00:29:22.035 --> 00:29:22.875
Your operations.
448
00:29:23.075 --> 00:29:25.415
That means everything in admin, I'm going to go hire someone to get.
449
00:29:25.835 --> 00:29:29.136
And then you both come to this agreement that, like, which of these three roles are we going to let go of?
450
00:29:29.716 --> 00:29:36.618
I happen to believe that it is easier to hire an all-star admin person than an all-star operations person.
451
00:29:37.238 --> 00:29:39.299
because it's simply because it's a high leverage task.
452
00:29:39.319 --> 00:29:48.864
So if he's doing sales, operations, and admin, I feel like probably the most common path is you in sales, him in operations, and then you go find an admin person.
453
00:29:49.485 --> 00:29:52.126
Because the admin person just needs to have skills of admin.
454
00:29:52.166 --> 00:29:53.827
It's very cross industry.
455
00:29:53.867 --> 00:29:58.049
Like they just need office experience and they need to be like a high level executor.
456
00:29:58.130 --> 00:29:58.770
Like that's it.
457
00:29:59.050 --> 00:30:03.053
And then that way, it's very clear in terms of like the things that they do that Dan does.
458
00:30:03.153 --> 00:30:03.613
Or is it Dan?
459
00:30:03.713 --> 00:30:03.933
Sorry.
460
00:30:04.293 --> 00:30:04.754
Dan, yeah.
461
00:30:05.034 --> 00:30:06.115
Dan does not need to do.
462
00:30:06.555 --> 00:30:09.477
And the things that he is going to eventually get off of his plate.
463
00:30:10.097 --> 00:30:12.219
And you just be like, hey, it's going to take a three month ramp.
464
00:30:12.419 --> 00:30:14.060
But eventually all these things will be off your plate.
465
00:30:14.100 --> 00:30:15.000
You can focus on the team.
466
00:30:15.461 --> 00:30:19.183
And then by doing that, you now have operations and admin off your plate.
467
00:30:19.543 --> 00:30:20.704
You go focus on selling.
468
00:30:20.744 --> 00:30:22.185
That's how you can scale it up.
469
00:30:22.265 --> 00:30:24.447
And then at what point do you say, okay, go hire a sales rep?
470
00:30:24.707 --> 00:30:26.368
When you're going to start doing multiple locations.
471
00:30:26.748 --> 00:30:27.369
Oh, so right.
472
00:30:27.509 --> 00:30:30.911
So like this year you would say, Zach, you're still doing all the sales.
473
00:30:31.411 --> 00:30:31.992
I would say so.
474
00:30:32.072 --> 00:30:32.232
Yeah.
475
00:30:32.532 --> 00:30:32.712
Yeah.
476
00:30:32.892 --> 00:30:33.052
Yeah.
477
00:30:33.072 --> 00:30:36.395
Like at that size, you're not going to go get a salesperson yet.
478
00:30:36.915 --> 00:30:43.740
And because you've been sharing it with someone else, like, I feel like there's going to be a whole bunch of juice to squeeze once you get in the role and just start thinking about sales.
479
00:30:44.500 --> 00:30:49.684
I think you could easily get to two to 3 million with that model of you sales, great operation.
480
00:30:49.704 --> 00:30:52.426
You like, they should be calling into him when they're sick.
481
00:30:52.806 --> 00:30:55.128
Everything's rehandle operation and training, everything from him.
482
00:30:55.308 --> 00:30:57.310
You should hardly know anyone before they're hired.
483
00:30:57.670 --> 00:30:59.512
And then admin side, same thing.
484
00:30:59.532 --> 00:31:02.914
Like they should take every system you give them and just make it 10 times better.
485
00:31:03.355 --> 00:31:09.620
You give them all like very much incentives around the, like when you do multiple locations, they should be pushing you towards that.
486
00:31:10.020 --> 00:31:12.723
But then you go like, we've got to hit these operational and KPIs.
487
00:31:12.903 --> 00:31:20.790
Like when you hand the admin off, for example, having the KPIs of every little thing that you and Dan agree on is the part that allows you to step away from the role.
488
00:31:21.370 --> 00:31:23.371
So when you say, hey, answering phones, okay, great.
489
00:31:23.791 --> 00:31:25.612
What does a good answering phones look like?
490
00:31:26.032 --> 00:31:30.995
Number of answered calls, what's the wait time, what percentage of them have a booked appointment?
491
00:31:31.195 --> 00:31:40.499
Like figuring out those KPIs next to the role is a thing that then you can then step away with confidence and actually go focus on sales and then down the road and copying and pasting locations.
492
00:31:41.079 --> 00:31:46.682
It's the KPI part that you will probably have to flesh out a little bit because you and Dan have just been juggling it together and doing a great job.
493
00:31:46.882 --> 00:31:47.062
Yeah.
494
00:31:47.222 --> 00:31:47.362
Yeah.
495
00:31:47.382 --> 00:31:48.523
I feel very blessed to have Dan.
496
00:31:48.543 --> 00:31:59.832
I mean, we wouldn't be like, I mean, we've been in business for less than two years, you know, I mean, technically the LLC has been open for a little more, but less than two years, like million dollars in rev and then profitable at the end of that.
497
00:31:59.892 --> 00:32:01.993
I feel like it's pretty, I feel good about it.
498
00:32:02.233 --> 00:32:03.895
I thought I figured you were going to say like sales.
499
00:32:04.355 --> 00:32:06.837
But that's where my mind immediately goes, like the next time.
500
00:32:06.857 --> 00:32:07.737
Like hiring a salesperson?
501
00:32:07.757 --> 00:32:07.937
Yeah.
502
00:32:08.057 --> 00:32:09.398
Well, I think you're really good at sales.
503
00:32:09.579 --> 00:32:12.821
I think it's harder to find a really good salesperson than it is a really good admin person.
504
00:32:13.081 --> 00:32:15.122
And it sounds like operationally Dan's solid.
505
00:32:15.342 --> 00:32:18.885
And so I think that unless you went to Dan, he's like, I just love sales.
506
00:32:18.925 --> 00:32:19.645
I love talking to people.
507
00:32:19.685 --> 00:32:20.606
I just want to do that.
508
00:32:20.626 --> 00:32:20.786
Okay.
509
00:32:20.906 --> 00:32:23.188
That's when you might adjust a little bit from what I said.
510
00:32:23.208 --> 00:32:23.888
I feel like doing some sales.
511
00:32:23.948 --> 00:32:24.769
I feel like doing some sales.
512
00:32:25.369 --> 00:32:32.776
Yeah, I think the clarity, I think the thing that he's going to like, because he probably likes, I'm just guessing, he probably likes having a little variety.
513
00:32:32.937 --> 00:32:34.718
It sounds like he's pretty entrepreneurial.
514
00:32:35.139 --> 00:32:40.904
The thing is he's also extremely frustrated by the fact that things fall through the cracks simply because he has so many things on his plate.
515
00:32:41.545 --> 00:32:44.088
And so you just be like, hey, I'm giving you first dibs.
516
00:32:44.288 --> 00:32:46.009
I will adjust to whatever you want.
517
00:32:46.730 --> 00:32:53.713
And so which of these three roles, now we've clearly defined three different roles, do you want to fully exclusively focus on as we scale the company?
518
00:32:54.114 --> 00:32:58.256
And so you can just dominate this thing and I can create KPIs for every one of these things that we've talked about.
519
00:32:58.456 --> 00:33:04.819
Because same thing with admin, you're gonna do operations, like efficiency score, you know, number of completed on time, number of upsells.
520
00:33:04.839 --> 00:33:09.401
Like you're gonna have all these things from an operational perspective, you're going to be measuring as well.
521
00:33:09.801 --> 00:33:10.782
But I think he would like it.
522
00:33:11.162 --> 00:33:14.325
And if you bring him in the conversation early and just be like, hey, it's up to you.
523
00:33:14.466 --> 00:33:21.032
Like which of these three we're going to get someone to fill the third role so we can all like dominate in our individual categories.
524
00:33:21.817 --> 00:33:21.997
Yeah.
525
00:33:22.257 --> 00:33:22.638
Interesting.
526
00:33:22.818 --> 00:33:23.078
Okay.
527
00:33:23.459 --> 00:33:28.644
In your, in the book, you mentioned that you should, or actually not, it was in the book.
528
00:33:28.664 --> 00:33:29.985
It might've been in the book.
529
00:33:30.045 --> 00:33:31.707
I can't remember when I'm on your podcast episodes.
530
00:33:32.068 --> 00:33:36.152
You were like, when you're in grow mode, which correct me if I'm wrong, but I feel like I'm in grow mode right now.
531
00:33:36.732 --> 00:33:42.658
Base the GM, which pseudo Dan off of percent of top line.
532
00:33:43.399 --> 00:33:45.720
versus instead of being bottom line profit.
533
00:33:46.121 --> 00:33:59.368
So I built out his, I built out his compensation program and then I based it off of 1% of top line revenue with a base salary of 70,000 and then his ability to sell and get a 5% commission on anything that he sells.
534
00:33:59.948 --> 00:34:04.550
I mean, does that sound crazy or does that, would you rather see it based off of profit?
535
00:34:05.982 --> 00:34:10.046
Yeah, I don't think this location is in growth mode now it's past a million.
536
00:34:10.066 --> 00:34:11.267
You're optimizing it.
537
00:34:11.547 --> 00:34:17.312
Also, he doesn't have full control of – if he's not going to do sales, he doesn't have control of top-line revenue.
538
00:34:18.233 --> 00:34:26.721
And so that's where when we say GM, I'm saying someone who runs a four- to eight-person location and does what is happening now.
539
00:34:26.901 --> 00:34:28.082
I would say he's a GM now.
540
00:34:28.803 --> 00:34:40.169
But he's not going to be a GM if you start getting a two, three million and you have an admin person and he's going to have to choose one of these roles because you're just never going to be able to have where you both of you are just juggling all three until three million.
541
00:34:40.229 --> 00:34:41.130
Like it's just not going to work.
542
00:34:41.470 --> 00:34:42.671
I think he would recognize that.
543
00:34:43.051 --> 00:34:49.715
But what you want to be careful of is giving him the role of like you are operations, but you're getting revenue or money based on top line revenue.
544
00:34:49.995 --> 00:34:51.736
Well, now it's just based on how you sell.
545
00:34:52.895 --> 00:34:54.076
It's based on how you price.
546
00:34:54.536 --> 00:35:04.863
And so as soon as someone does not have full control, like an actual GM, like what you just described is definitely what I would say the past two years would be a great comp model for him because you've been growing really fast.
547
00:35:05.243 --> 00:35:07.384
And it's like, you know, just pedal to the metal.
548
00:35:07.444 --> 00:35:07.985
Let's go.
549
00:35:08.085 --> 00:35:09.245
He's been involved in sales.
550
00:35:09.406 --> 00:35:09.626
Cool.
551
00:35:10.126 --> 00:35:16.050
That model, what you just described, will likely work down the road when you copy and paste for the first year compensation model.
552
00:35:16.730 --> 00:35:19.852
While you're in growth mode, you're buying trucks, you're doing a bunch of marketing, et cetera.
553
00:35:20.333 --> 00:35:24.376
Once you're past that, though, you want them on distributions, like distributable cash.
554
00:35:25.076 --> 00:35:28.699
So if I was you, I would probably look at Dan and even the person you hire in the admin side.
555
00:35:29.059 --> 00:35:33.843
I would probably give them a piece of distributions, but then just say, hey, I know we're expanding quickly.
556
00:35:34.383 --> 00:35:41.128
And so I'm going to put some incentives around us getting to one and three locations, like a second location and a third location.
557
00:35:42.485 --> 00:35:42.905
Interesting.
558
00:35:43.045 --> 00:35:47.868
Because then they have to create the systems for an admin assistant.
559
00:35:48.148 --> 00:35:55.191
Creating the curriculum to hire general managers would be Dan's role if he becomes the operations manager.
560
00:35:55.511 --> 00:36:00.294
And so they should be incentivized on the multiple location thing, the same way you are from a net worth perspective.
561
00:36:00.894 --> 00:36:08.858
But then they need that extra layer because you doing all this infrastructure building is going to cost the main company a huge margin compression.
562
00:36:09.473 --> 00:36:18.475
Right, so then how do they, I mean, how do you articulate that to someone where they're like, well, we're not gonna be as profitable right now, so therefore I'm not gonna get paid as much, right?
563
00:36:19.615 --> 00:36:21.915
Or did I not read you right on that?
564
00:36:22.496 --> 00:36:22.836
You're fine.
565
00:36:23.096 --> 00:36:34.298
So I would say I would give them a higher base than what you might be thinking now, and then I would give them, their base would jump based upon when you have first or second location and a third location.
566
00:36:35.363 --> 00:36:36.484
Those would be base jumps.
567
00:36:36.684 --> 00:36:38.665
So that's a strategically long-term.
568
00:36:38.685 --> 00:36:39.965
They just want to get there.
569
00:36:40.506 --> 00:36:46.829
Then I would give them a piece of the hub in terms of profit sharing, call profit sharing, distributable cash.
570
00:36:47.369 --> 00:36:48.409
I would give them a chunk of that.
571
00:36:48.990 --> 00:36:55.513
And ultimately, I don't really care how much I give to them in terms of like a lot because I know it's going down, the percentage.
572
00:36:56.093 --> 00:37:01.175
And I know that like my net worth is wrapped up in the multiple locations, not in having one big location.
573
00:37:01.195 --> 00:37:01.956
No one cares about that.
574
00:37:02.156 --> 00:37:04.557
You're saying because that's the more sellable, having multiple locations.
575
00:37:04.969 --> 00:37:09.390
Yeah, like all your net worth is tied up in can you do this 10 times, not if you can make one location to go to 3 million.
576
00:37:09.771 --> 00:37:09.971
Right.
577
00:37:10.971 --> 00:37:14.532
And so you give them the base, like, directionally, we know where we're going.
578
00:37:14.592 --> 00:37:18.173
We want to start copying and pasting the model that we had built in the first 24 months.
579
00:37:18.593 --> 00:37:23.415
We know we can do that over and over again, and we can use the GM model, which is finding more dance.
580
00:37:24.015 --> 00:37:24.275
Right?
581
00:37:24.395 --> 00:37:25.575
We can do that more often.
582
00:37:25.836 --> 00:37:26.056
Great.
583
00:37:26.336 --> 00:37:29.477
We know that will work when we're an hour away, two hours away, an hour and a half away.
584
00:37:29.517 --> 00:37:29.737
Great.
585
00:37:31.188 --> 00:37:36.034
We're going to incentivize base pay for those top two people on getting to the second or the third location.
586
00:37:36.474 --> 00:37:41.380
But on the hub, that main one that they can actually tangibly feel, and you can pull up P&Ls.
587
00:37:41.440 --> 00:37:45.065
I don't know if you saw that video I made on Saturday about on-target earnings.
588
00:37:45.105 --> 00:37:46.547
I would heavily rely on that.
589
00:37:46.727 --> 00:37:48.649
Yeah, so on Wednesday.
590
00:37:49.430 --> 00:37:52.332
Yeah, we kind of show how we do it with ours.
591
00:37:52.753 --> 00:37:56.856
I would highly recommend that for these two people because you have a PL with good.
592
00:37:57.116 --> 00:37:58.017
Yes, exactly.
593
00:37:58.497 --> 00:38:07.485
Okay, whether you're giving them 8% or one of them 12% or whatever it is, you're going to show last year's numbers and be able to give a very good idea of what the hub is supposed to make.
594
00:38:07.925 --> 00:38:08.205
Hmm.
595
00:38:08.766 --> 00:38:13.550
How do you, because one thing that I've been learning is, you know, leadership has like become a huge component of this.
596
00:38:13.710 --> 00:38:16.472
And I like, I don't know if you know, well, you're a gym guy, you know, Sorenex.
597
00:38:16.512 --> 00:38:17.293
You ever heard of that before?
598
00:38:17.814 --> 00:38:18.034
No.
599
00:38:18.354 --> 00:38:18.834
Sorenex?
600
00:38:19.135 --> 00:38:19.575
Sorenex?
601
00:38:19.855 --> 00:38:19.995
No.
602
00:38:20.256 --> 00:38:20.856
Oh, you'd like them.
603
00:38:20.876 --> 00:38:21.917
Check them out.
604
00:38:22.317 --> 00:38:25.880
So Sorenex exercise equipment, they're all made in the United States and Flexington, South Carolina.
605
00:38:26.321 --> 00:38:30.424
And I got tied in with them because a buddy of mine is Zach Brown, the Zach Brown band.
606
00:38:30.484 --> 00:38:32.226
He's the COO for Zach Brown.
607
00:38:32.626 --> 00:38:38.528
So he invited me to this event and it's all outdoors and there's like shooting and guns and like tactical stuff.
608
00:38:38.568 --> 00:38:39.228
And it's just fun.
609
00:38:39.348 --> 00:38:39.568
Right.
610
00:38:40.148 --> 00:38:47.751
But like the co-founder of Kip Fulks, the co-founder of Under Armour has been there like they and it's all like you're just sitting around a bonfire with these guys.
611
00:38:47.931 --> 00:38:49.251
You know, so I get there the first year.
612
00:38:49.271 --> 00:38:50.632
I'm like, what the hell am I doing here?
613
00:38:50.712 --> 00:38:53.613
And honestly, I don't think if I went there, I would have created downspout.
614
00:38:53.713 --> 00:38:54.753
I don't think that would have happened.
615
00:38:54.993 --> 00:38:59.598
So anyway, long story short, like I'm going to this event come the end of the month.
616
00:39:00.219 --> 00:39:02.461
And, you know, I guess the question is like,
617
00:39:03.432 --> 00:39:13.694
Dan is a great GM, but he doesn't have that like wanting to get better, like personally better type of mentality.
618
00:39:14.134 --> 00:39:15.495
He's really good at what he does.
619
00:39:15.595 --> 00:39:17.455
He's excellent at thinking through problems.
620
00:39:18.015 --> 00:39:22.136
But for me, I'm always something like I create, like, I, that's why I booked the call with you, right?
621
00:39:22.156 --> 00:39:24.797
Like I crave this kind of type of stuff in order for me to get better.
622
00:39:25.097 --> 00:39:26.517
And it comes out on the backend.
623
00:39:27.197 --> 00:39:37.643
So when you have someone like that, like when do you know to, I guess, change that person's role or if that person continues to grow with you or like when do they start to kind of fall off?
624
00:39:38.683 --> 00:39:38.863
Yeah.
625
00:39:38.903 --> 00:39:40.084
So two things.
626
00:39:40.364 --> 00:39:43.206
One, there is definitely a time when you outgrow people.
627
00:39:43.826 --> 00:39:49.989
I also think that there is a huge benefit to having people that don't need new things.
628
00:39:50.149 --> 00:39:52.351
They just are like happy doing exactly what you tell them.
629
00:39:52.431 --> 00:39:53.471
Give me the list, boss.
630
00:39:53.611 --> 00:39:54.452
I will knock this out.
631
00:39:54.772 --> 00:39:56.573
And you just confidently know it's taken off your plate.
632
00:39:57.040 --> 00:40:02.644
There's this notion that a lot of us buy into and it's just like, you need to have leadership and management in order to be able to move up inside the company.
633
00:40:02.664 --> 00:40:08.289
You wanna be careful of that because there are individual contributors that are extremely valuable.
634
00:40:08.629 --> 00:40:18.937
Evidence of this is recently how Meta's been paying billions of dollars for basically engineers, individual contributors, not even managers, not leaders, just like you are incredible at doing the work.
635
00:40:19.498 --> 00:40:25.983
And so I think the thing to be careful of is always as you scale, you basically incentivize people to just keep managing other people.
636
00:40:26.263 --> 00:40:32.290
is what leads to bloat in terms of management layers is just the fact that it's like, oh, like if you manage a lot of people, you get more money.
637
00:40:32.470 --> 00:40:35.693
So I would say that, yes, you can like motivate them.
638
00:40:35.713 --> 00:40:37.655
Like Jocko's event would be really good for Dan.
639
00:40:37.695 --> 00:40:40.919
I feel like leadership training tactics would be a good book for him kind of thing.
640
00:40:41.179 --> 00:40:43.902
But like, there's also times where like, they don't really, they don't want to change.
641
00:40:43.962 --> 00:40:45.524
They're like, hey, like I'm happy where I'm at.
642
00:40:45.684 --> 00:40:46.104
And like,
643
00:40:46.665 --> 00:40:47.406
I always execute.
644
00:40:47.686 --> 00:40:55.514
And that's where I think why I kind of pushed him in operations, because I kind of thought he would be like, whereas like sales, you need to be on the hunt, you're going, you're growing.
645
00:40:55.934 --> 00:41:05.763
But if you can just be like, hey, you might need to help him create the checklist, create the systems, but if he's a great executor and he like, hey, I'll make the 1% optimizations, but you've got to give me the framework.
646
00:41:06.144 --> 00:41:07.405
Great, you can work with that.
647
00:41:08.146 --> 00:41:09.387
He just has to be in operations.
648
00:41:09.427 --> 00:41:10.828
He cannot be in sales.
649
00:41:11.349 --> 00:41:11.509
Right.
650
00:41:12.421 --> 00:41:12.621
Yeah.
651
00:41:12.661 --> 00:41:12.821
Right.
652
00:41:12.841 --> 00:41:15.665
So I think you can work with them to combine someone's skill set.
653
00:41:15.685 --> 00:41:21.171
And then I'll also say that if you get five or 10 locations, there's a good chance you have a sit down with them.
654
00:41:21.231 --> 00:41:26.417
OK, either A, I need you to step up or B, do you want me to hire you're going to help me hire your boss?
655
00:41:27.212 --> 00:41:33.718
So someone that can develop curriculums, hire multiple GMs at the same time, travel out and go start their location.
656
00:41:33.998 --> 00:41:42.225
I need someone that's that level, and if you don't want to, that's fine, but that's going to be required in probably 12 to 24 months as we've started to do multiple locations.
657
00:41:42.865 --> 00:41:43.105
Right.
658
00:41:43.626 --> 00:41:45.608
Do you open up one location at a time or do you multiple?
659
00:41:46.699 --> 00:41:47.260
One per year.
660
00:41:48.001 --> 00:41:48.581
One per year.
661
00:41:48.741 --> 00:41:50.563
Start that as your cadence until you have a solid team.
662
00:41:51.585 --> 00:41:57.010
So I usually say from one to six, when you get your first regional manager, you're going to do one per year.
663
00:41:57.911 --> 00:42:04.679
So that usually looks like you being there for three to four months, being very hands-on, then slowly merging off the GM.
664
00:42:05.640 --> 00:42:08.183
You're really focused on ramping up to where it's above breakeven.
665
00:42:08.663 --> 00:42:16.130
Then handing off to them, probably doing 50 to 60,000 a month in revenue, them getting it to 80 to 90 to 100 over the next following eight months.
666
00:42:16.510 --> 00:42:17.991
But it's a slower growth curve.
667
00:42:18.632 --> 00:42:24.597
And then assuming, too, the reason I like the one per year for the first six is you don't have a regional manager in place.
668
00:42:24.677 --> 00:42:29.882
And if someone goes down, you're going to have to go right back to square one, which is finding a general manager, scaling up.
669
00:42:29.902 --> 00:42:33.886
So I bake in there that you're going to have a GM churn per location.
670
00:42:34.626 --> 00:42:59.888
right so like you're gonna get someone up in two months they don't work out you're gonna get someone else great you're just gonna have to stay there longer um and be more hands-on with that location gotcha i know we're kind of tight on time right now but when it comes to i guess the one concern that i have pay for with pay for performance is people will never know how much i make how do you get over that hurdle p4p or open book management you mean
671
00:43:01.514 --> 00:43:01.874
I'm sorry.
672
00:43:01.914 --> 00:43:03.815
So I guess like if like Dan, right.
673
00:43:03.835 --> 00:43:07.277
I want to be like, Hey dude, here's where, here's where the profits at.
674
00:43:07.337 --> 00:43:07.978
Here's what we're doing.
675
00:43:08.498 --> 00:43:11.860
Like, is that indicative of saying now, you know what I make?
676
00:43:12.400 --> 00:43:13.280
Here's where we're going.
677
00:43:13.681 --> 00:43:15.642
Like, does that, does that ruffle feathers?
678
00:43:15.682 --> 00:43:18.143
Does that make things awkward?
679
00:43:18.203 --> 00:43:19.083
Like, what do you think about?
680
00:43:19.123 --> 00:43:22.645
Like, how, how have you overcome those types of situations?
681
00:43:22.685 --> 00:43:22.965
I guess.
682
00:43:23.686 --> 00:43:23.946
Yeah.
683
00:43:24.006 --> 00:43:25.127
Like, um,
684
00:43:26.168 --> 00:43:35.154
I can guarantee you he already – he has a pretty good idea of how much you're making, and usually that number is higher than what it actually is because they'll look for proof like new trucks, et cetera.
685
00:43:35.594 --> 00:43:38.856
So when you open up the books, you have to give them a piece of the pie.
686
00:43:39.837 --> 00:43:45.921
And so that's why I would rather you go after distributable cash because if he starts looking at the bottom line when you show him a P&L, he's like, ooh, $250,000.
687
00:43:45.941 --> 00:43:46.581
That looks juicy.
688
00:43:46.621 --> 00:43:49.223
And you say, oh, OK. Well, yeah, you're going to be getting 10 percent of that.
689
00:43:52.024 --> 00:43:53.465
Do you really think he wants that number to go down?
690
00:43:53.565 --> 00:43:53.765
No.
691
00:43:53.945 --> 00:43:54.565
He wants to go up.
692
00:43:55.266 --> 00:43:55.526
Right?
693
00:43:55.746 --> 00:43:57.667
And so you just got to give him a piece of the action.
694
00:43:57.947 --> 00:43:59.448
If you're doing good, you want a piece of the action.
695
00:43:59.508 --> 00:44:05.792
If you're doing bad, it's like the rallying cry, middle of the halftime game show situation with the coach, pep talk.
696
00:44:05.812 --> 00:44:08.074
But when you're doing good, you just got to give him a piece of the action.
697
00:44:09.414 --> 00:44:14.597
And so if you walked into him now and be like, hey, we're going to figure out which of these three roles we're going to – it sounds like he's going to do operations.
698
00:44:14.917 --> 00:44:16.358
So you let him come to that conclusion.
699
00:44:17.639 --> 00:44:19.560
And then we're like, great, I'm going to go find an admin person.
700
00:44:19.840 --> 00:44:23.722
By the way, your new comp model is going to be from a bonus perspective.
701
00:44:23.802 --> 00:44:26.023
You're going to get X amount of whatever is on the bottom line.
702
00:44:26.043 --> 00:44:27.344
You can see last year's – this is the P&L.
703
00:44:27.544 --> 00:44:30.886
So on-target earnings, if we do exactly as last year, here's what your pay would be.
704
00:44:31.626 --> 00:44:32.687
and have a scaling spreadsheet.
705
00:44:32.707 --> 00:44:36.668
So if we grow and this is our margin, you just have a few variables, like the one on Saturday, the video will show you.
706
00:44:36.869 --> 00:44:39.470
You just gotta have a few variables that you could change and he could quickly do the math.
707
00:44:40.610 --> 00:44:44.352
Like, okay, if revenue goes to this, our margin goes to this, okay, that's our distributable cash.
708
00:44:44.612 --> 00:44:46.333
Boom, I'll get 10% of that, whatever it might be.
709
00:44:47.013 --> 00:44:55.498
Once that's in place, then it's just a function of his base pay being tied to the direction of the company, which is when we do a second location, your base pay goes up.
710
00:44:55.818 --> 00:44:59.980
Also, the reason you do that is because he's gonna have to take more off your plate and he's gonna be much more involved in the hub.
711
00:45:00.640 --> 00:45:03.707
And so you want him to have a piece of that action because you're going to be out gone.
712
00:45:04.348 --> 00:45:04.529
Yeah.
713
00:45:05.350 --> 00:45:06.773
How do you determine what that distribution is?
714
00:45:07.195 --> 00:45:08.415
You want it to be meaty, right?
715
00:45:08.435 --> 00:45:12.976
Like he's not going to wake up every day and give a discretionary effort over five grand.
716
00:45:13.636 --> 00:45:16.837
And so I'm just going to like, let's say he's making 70 grand or 80 grand now.
717
00:45:16.857 --> 00:45:21.258
Like I'd be trying to get him to a hundred grand with the distributions.
718
00:45:21.678 --> 00:45:27.640
And again, you can run the math pretty quickly and know like, you're like, well, what happens if, if, if we decrease in margin?
719
00:45:27.660 --> 00:45:28.980
Well then it's going to decrease in his pay.
720
00:45:29.000 --> 00:45:33.241
Like, so you need him and the other person that you get in admin, always thinking about the bottom line.
721
00:45:33.361 --> 00:45:33.661
Like that's,
722
00:45:33.801 --> 00:45:34.542
That's all you need.
723
00:45:34.782 --> 00:45:41.066
So anything besides distributable cash gets very tough for you to go focus on a location because you need them guarding the hub.
724
00:45:42.447 --> 00:45:47.310
From an operation and admin perspective, like you'll get it in a year and a half, two years to where sales is pretty easy there.
725
00:45:47.370 --> 00:45:48.871
It's very much on autopilot.
726
00:45:48.891 --> 00:45:51.113
You've dialed in all the systems because you'll have full time on it.
727
00:45:51.333 --> 00:45:54.435
You'll get a lot of it online, a lot of it going through the office, et cetera.
728
00:45:54.835 --> 00:45:56.997
And so that will not be as difficult.
729
00:45:57.177 --> 00:46:00.219
It's the operations admin you need to unlock when you leave, right?
730
00:46:00.659 --> 00:46:07.348
And the only way to do that is distribute cash where you can share all the numbers and they really have a vested interest in like the rent, the insurance, the fuel, every little thing.
731
00:46:08.269 --> 00:46:08.469
Yeah.
732
00:46:08.710 --> 00:46:10.913
So open book management really is the best way to scale.
733
00:46:11.553 --> 00:46:19.715
Yeah, and if you're like, I want to decrease, you could always tie your compensation up higher into wages and just roll it all into wages and increase your pay.
734
00:46:19.855 --> 00:46:20.455
You could do that.
735
00:46:20.775 --> 00:46:22.736
You could say, hey, you're probably underpaying yourself.
736
00:46:22.776 --> 00:46:22.996
Great.
737
00:46:23.236 --> 00:46:25.336
Let's give yourself $120,000 salary.
738
00:46:25.597 --> 00:46:28.737
That's now in wages, and that's just all lumped in with the other $400,000.
739
00:46:28.757 --> 00:46:29.237
You could do that.
740
00:46:29.257 --> 00:46:29.378
Right.
741
00:46:31.698 --> 00:46:32.759
I generally don't.
742
00:46:32.859 --> 00:46:34.280
I don't mind my team knowing my salary.
743
00:46:34.300 --> 00:46:36.122
But if you're a little bit cautious, totally fine.
744
00:46:36.142 --> 00:46:36.802
Just throw in the wages.
745
00:46:36.862 --> 00:46:38.083
No one will ask you a single thing about it.
746
00:46:38.984 --> 00:46:41.586
And then you can absolutely warrant the fact that you're worth $120,000 as the CEO.
747
00:46:41.606 --> 00:46:41.766
Right.
748
00:46:44.122 --> 00:46:44.302
Yeah.
749
00:46:44.743 --> 00:46:45.123
Interesting.
750
00:46:45.763 --> 00:46:46.024
All right.
751
00:46:46.424 --> 00:46:48.786
I mean, I don't, do you offer any other coaching?
752
00:46:49.126 --> 00:46:49.607
Not really.
753
00:46:49.647 --> 00:46:49.947
Sorry.
754
00:46:50.007 --> 00:46:54.431
I do this mostly just for like, I know people like you, like, you're like, Hey, I can't do a Q and a and call in show.
755
00:46:54.651 --> 00:46:55.772
I need like some little more time.
756
00:46:56.232 --> 00:46:57.313
Um, that's really why I do it.
757
00:46:57.353 --> 00:46:59.375
I just don't even know how long I'll be able to honestly.
758
00:46:59.415 --> 00:47:08.362
So if I developed like a, is there anyone on your team that if I developed like a comp plan, like someone I could like pay to like have a look at it and like, be like, Hey, this looks good.
759
00:47:08.683 --> 00:47:08.723
Or
760
00:47:09.617 --> 00:47:15.239
Yeah, well, I would usually recommend is like, when you're at this point, like I think you pretty much have the road net for 2026.
761
00:47:15.259 --> 00:47:23.661
And what you're gonna need, like finding the people, creating the comp model, getting to the point where you get to that two to $3 million marker, you focusing on sales will do that just by itself.
762
00:47:24.141 --> 00:47:27.062
But to do focus on sales, you need the admin operations role.
763
00:47:27.262 --> 00:47:30.803
Like that's the actual thing that gets you to the next level, is you focusing 100% of your time on sales.
764
00:47:31.204 --> 00:47:33.204
To do that, you got to get these two solid people.
765
00:47:33.684 --> 00:47:36.705
If you do that next year, you're like, okay, I'm ready to copy and paste.
766
00:47:37.065 --> 00:47:38.086
Like what's my next step?
767
00:47:38.326 --> 00:47:39.166
Just book another call then.
768
00:47:39.606 --> 00:47:42.107
That's what I would say is like you just need marching orders for the next little bit.
769
00:47:42.588 --> 00:47:44.189
You sound like you're really good at executing.
770
00:47:44.569 --> 00:47:48.851
And so that's how coaching should be is like you just need to know what do I do next?
771
00:47:48.971 --> 00:47:52.093
And then you go do it and you come back for more instead of like, yeah, what about this?
772
00:47:52.113 --> 00:47:54.334
And you can go get five other people telling you to do something different.
773
00:47:54.354 --> 00:47:55.995
It's just like what's the actual –
774
00:47:56.455 --> 00:47:57.116
Yeah, yeah.
775
00:47:57.156 --> 00:47:59.737
So it's just like that's the part where it's like execute on this.
776
00:48:00.478 --> 00:48:03.260
Hey, if you wake up in a year and a half, you're like, I don't even want to do copy and paste.
777
00:48:03.300 --> 00:48:05.161
I'd rather just keep going bigger with this one location.
778
00:48:05.441 --> 00:48:05.702
Great.
779
00:48:06.002 --> 00:48:07.183
You have a $3 million business.
780
00:48:07.703 --> 00:48:08.424
We can make it happen.
781
00:48:08.724 --> 00:48:11.466
But if we get there and like, hey, Dan needs more.
782
00:48:11.706 --> 00:48:13.027
He's hungry for more now.
783
00:48:13.547 --> 00:48:15.268
And this ad person is super great.
784
00:48:15.549 --> 00:48:16.870
How do I take advantage?
785
00:48:16.890 --> 00:48:17.390
I'm like, great.
786
00:48:17.430 --> 00:48:19.131
Get you out of there and let's go copy and paste.
787
00:48:19.151 --> 00:48:21.033
And I'll give you much more tactical around that part.
788
00:48:21.253 --> 00:48:24.015
Like we kind of glanced over that part because that's still a little ways down the road.
789
00:48:24.535 --> 00:48:25.777
But just book a call then.
790
00:48:26.137 --> 00:48:26.517
That'd be fine.
791
00:48:26.758 --> 00:48:26.958
Yeah.
792
00:48:27.459 --> 00:48:30.763
What about your course that you come out like the two-day in Washington?
793
00:48:31.433 --> 00:48:33.054
I think it would be helpful.
794
00:48:33.155 --> 00:48:35.036
A lot of what we talked about here is what we talk about.
795
00:48:35.957 --> 00:48:36.978
Would you gain something?
796
00:48:36.998 --> 00:48:38.819
Yeah, seeing the command center would be helpful.
797
00:48:39.960 --> 00:48:43.363
I've been pretty prescriptive with you though, in terms of like, hey, this is the stuff you need to get done.
798
00:48:44.364 --> 00:48:46.466
That's basically what I'm trying to get most people when they come here.
799
00:48:47.026 --> 00:48:48.788
And so would it be beneficial?
800
00:48:48.808 --> 00:48:53.572
Probably to some degree, even just seeing the team, hearing from my people that do those tasks.
801
00:48:54.353 --> 00:48:56.394
But I think you probably got 95% of the good here.
802
00:48:57.778 --> 00:48:58.018
Okay.
803
00:48:58.438 --> 00:48:58.658
All right.
804
00:48:58.879 --> 00:48:59.099
Sweet.
805
00:48:59.539 --> 00:49:02.060
I don't know why my screen did my, my video freeze on you.
806
00:49:02.280 --> 00:49:02.741
No, you're good.
807
00:49:03.041 --> 00:49:03.301
You're good.
808
00:49:03.321 --> 00:49:03.461
Okay.
809
00:49:03.481 --> 00:49:04.481
Mine froze on my own.
810
00:49:04.501 --> 00:49:05.122
What's up?
811
00:49:05.302 --> 00:49:05.522
Weird.
812
00:49:06.342 --> 00:49:08.203
Um, no, man, this was awesome.
813
00:49:08.523 --> 00:49:10.745
Like I super helpful.
814
00:49:10.765 --> 00:49:12.786
Like I'm, I'm very, I'm a very coachable person.
815
00:49:13.246 --> 00:49:16.848
So as soon as someone's like, go do this, like I can get far with that.
816
00:49:16.948 --> 00:49:19.109
And then I just, I need another like reset.
817
00:49:19.869 --> 00:49:25.072
Um, if you had to like, I don't know, leave me with anything in this journey, what would you, what would you say?
818
00:49:25.917 --> 00:49:28.600
Yeah, like long term, you know, kind of generally what you want.
819
00:49:28.940 --> 00:49:31.122
The challenging part is there's so many ways to get there.
820
00:49:31.463 --> 00:49:35.106
So instead of focusing on like that, I would just focus on the next 12 months.
821
00:49:35.607 --> 00:49:43.375
And like, regardless of how you get to, let's call it 10 million or whatever down the road, you know, you'll have to find two solid people.
822
00:49:43.895 --> 00:49:45.135
So that is the constraint.
823
00:49:45.495 --> 00:49:50.117
It's like finding those two solid people with a great comp model for them and you focusing 100% of the time on your sales.
824
00:49:50.177 --> 00:50:01.000
If you do that, the world will be your oyster in a year when the business is twice the size and you have role clarity and you feel like you've actually nailed sales because that will be the determining part.
825
00:50:01.280 --> 00:50:06.902
The reason I need you to focus on sales is because that's the determining part of how quickly you can scale to a million at the locations in the future.
826
00:50:07.262 --> 00:50:10.624
Because operationally in admin, like the blocking, tackling, you know how to do that.
827
00:50:10.984 --> 00:50:15.306
Getting from zero to a million as fast as possible at those other locations is the bottleneck.
828
00:50:15.646 --> 00:50:22.049
Once you start, like, because you could start doing two locations a year, three locations a year, all dependent on and hinging on how quickly can you ramp them.
829
00:50:22.229 --> 00:50:23.469
But that's like a different topic.
830
00:50:23.509 --> 00:50:27.131
And like right now it's like get these two people, get role clarity.
831
00:50:27.451 --> 00:50:28.872
That role clarity is what's needed.
832
00:50:28.952 --> 00:50:31.553
Even if you like stopped at three million, you're like, I just want to get profitable here.
833
00:50:31.753 --> 00:50:33.033
You still need those two people.
834
00:50:33.053 --> 00:50:36.315
So I would just like just focus on that one constraint.
835
00:50:36.943 --> 00:50:43.116
And then in terms of like the model, would you just hinge more on the subscription stuff rather than just one-offs?
836
00:50:43.443 --> 00:50:45.484
I would look at it as a percentage of revenue.
837
00:50:45.544 --> 00:50:57.691
So I would be looking at as the location matures, I want to move more and more of my revenue percentage towards the recurring stuff, knowing that when you start a location, you might, might have 10% to 15% of revenue being recurring after three months.
838
00:50:58.312 --> 00:51:02.834
But that in year three and four, I want that number being 50, 60, like the higher the better.
839
00:51:03.154 --> 00:51:07.297
Because the higher that number, the less I have to do in marketing and the less volatile my schedule is.
840
00:51:07.917 --> 00:51:14.125
And that's ultimately what you can copy and paste and hand off to a GM is a less volatile schedule, revenue that's more steady, and cash flow that's steady.
841
00:51:14.626 --> 00:51:23.436
And so that's the objective, but you create benchmarks for year one, two, three, and four of what percentage of revenue is from recurring.
842
00:51:23.456 --> 00:51:23.937
Yeah.
843
00:51:24.397 --> 00:51:30.860
And so by you getting 100% of your time in sales, you're going to start nailing what's the package one, what's the package two offer, what percentage can I convert?
844
00:51:31.200 --> 00:51:34.021
If I text them 60 days after, can I convert more?
845
00:51:34.642 --> 00:51:36.943
What's the follow-up look like to my upsell?
846
00:51:37.223 --> 00:51:39.224
You'll nail all those things.
847
00:51:40.024 --> 00:51:43.465
But I'm pretty confident in saying that you might have 10% to 20% the first year.
848
00:51:44.906 --> 00:52:00.520
25 to 35 percent the second year your goal is to get that like 50 to 70 percent though of recurring revenue over the course of time because that is so easy to hand off to a gm scheduling is easier it makes operation like training and hiring easier that's a model that you can really replicate
849
00:52:01.190 --> 00:52:01.390
Yeah.
850
00:52:01.810 --> 00:52:10.236
And when it comes to the like the offseason right now, most of our season spent with takedowns because we have to do takedowns.
851
00:52:10.917 --> 00:52:16.981
But gutters is kind of offered gutter cleaning with the occasional washes because we live in an environment that's like not soup.
852
00:52:17.061 --> 00:52:22.945
It's I mean, it's cold, but it's not like, you know, it gets about 40 like we're fine and no other companies out is open this time of year.
853
00:52:23.126 --> 00:52:24.667
So we kind of have that advantage as well.
854
00:52:25.347 --> 00:52:29.829
Would you say offering another service like air duct cleaning is something we should do?
855
00:52:30.109 --> 00:52:37.091
Or I just don't want to get too far out of the sphere and then all of a sudden start to like branch off and create a whole other brand.
856
00:52:37.111 --> 00:52:41.753
Because if you're offering air ducts cleaning with January, February, you have to offer for the rest of the year.
857
00:52:43.462 --> 00:52:46.185
Yeah, I don't think air ducts would be the move.
858
00:52:46.626 --> 00:52:49.550
It's going to follow a similar seasonality curve.
859
00:52:49.950 --> 00:52:59.261
And honestly, the air ducts is the same thing in which the whole objective would be to try to get them on a recurring service that then you can push the air ducts to a time you know you want it.
860
00:52:59.542 --> 00:53:00.943
But they don't think about it then.
861
00:53:00.983 --> 00:53:01.724
They think about it.
862
00:53:02.565 --> 00:53:03.507
And during the spring, too.
863
00:53:03.987 --> 00:53:06.811
And so you just increase your spring rush.
864
00:53:06.851 --> 00:53:09.995
If you add that service, I think it could get interesting.
865
00:53:10.015 --> 00:53:14.441
We add other stuff to your recurring package so that way you can do it.
866
00:53:14.501 --> 00:53:19.007
Like basically any service that you can do during your offseason could be in the recurring package.
867
00:53:20.228 --> 00:53:20.448
Right.
868
00:53:20.588 --> 00:53:24.550
So, for example, you might offer air duct cleaning to if they that might be the freebie.
869
00:53:25.071 --> 00:53:29.693
It's like, hey, if you sign up for this annual thing that you just paid fourteen hundred dollars for pay nine ninety nine bucks a month.
870
00:53:30.714 --> 00:53:31.274
Twelve hundred dollars.
871
00:53:31.294 --> 00:53:32.175
So you save a little bit of money.
872
00:53:32.295 --> 00:53:32.895
We do it every year.
873
00:53:33.095 --> 00:53:35.937
And by the way, when we come out, we're also going to do your air ducts.
874
00:53:37.003 --> 00:53:37.183
Right.
875
00:53:37.503 --> 00:53:38.844
That starts to look interesting to me.
876
00:53:39.144 --> 00:53:42.045
Or you put all your air ducts during the cold season when there's no snow on the ground.
877
00:53:42.065 --> 00:53:43.006
You're like, we can still do this.
878
00:53:43.926 --> 00:53:44.926
That looks very interesting to me.
879
00:53:44.946 --> 00:53:53.030
I just wouldn't offer it as an incoming service because it offers no value to get more leads when leads are already pouring in during that time of year.
880
00:53:53.928 --> 00:53:54.148
Right.
881
00:53:54.588 --> 00:54:02.694
Now, on top of that, $99 a month, would you also offer like a quarterly Windows subscription, a part of that, like to keep the guys going?
882
00:54:03.474 --> 00:54:07.557
Yeah, I do like, yeah, I would do like the one that I tried to like the $99 package.
883
00:54:07.597 --> 00:54:10.920
And like, you know, the pricing stuff like either $149 or $199.
884
00:54:12.000 --> 00:54:15.162
And in the package, like Windows in there, I'd package other stuff in there.
885
00:54:15.503 --> 00:54:18.685
And then that way, if someone does Windows, you have a package to sell them.
886
00:54:19.045 --> 00:54:21.066
If they do gutter cleanouts, you have a package to sell them.
887
00:54:21.086 --> 00:54:25.849
Like you always are trying to get these people into this like full package, like full service packages.
888
00:54:27.230 --> 00:54:31.132
And whether that be like package one is really this annualization of revenue.
889
00:54:31.392 --> 00:54:35.034
Like you're just trying to spread it out and you're trying to give them something in exchange for better cash flow.
890
00:54:35.334 --> 00:54:38.636
Package two is I'm trying to double or triple their annual customer value.
891
00:54:39.317 --> 00:54:39.537
Right.
892
00:54:39.917 --> 00:54:40.037
Right.
893
00:54:40.057 --> 00:54:44.700
But packaging other services in there and then me knowing that I can put those services during my off season.
894
00:54:45.200 --> 00:54:45.420
Mm-hmm.
895
00:54:45.860 --> 00:54:46.281
Makes sense.
896
00:54:46.721 --> 00:54:46.881
Yeah.
897
00:54:46.901 --> 00:54:55.085
So like right now, would you say if we offered Christmas lights, like we have a whole book of business, go to them, be like, Hey, we can do a subscription.
898
00:54:55.185 --> 00:54:56.786
You're going to save X amount of dollars.
899
00:54:57.226 --> 00:54:58.207
We already own the lights.
900
00:54:58.707 --> 00:55:04.970
So now starting from January, you know, February 1st until basically it's 200 bucks a month.
901
00:55:05.451 --> 00:55:08.712
Like, would that be a good play to kind of kick off that subscription type model?
902
00:55:09.172 --> 00:55:13.395
That way you have some annual, like some revenue percent already attached to that 10% goal.
903
00:55:14.255 --> 00:55:14.535
Yes.
904
00:55:15.175 --> 00:55:18.776
I think the packaging of the packages is so important.
905
00:55:19.216 --> 00:55:23.137
It needs to be where you just know cold, what they all include.
906
00:55:23.637 --> 00:55:25.938
It's very clear the value proposition between the three.
907
00:55:26.478 --> 00:55:29.819
And I think level one is basically annualization of revenue.
908
00:55:29.899 --> 00:55:33.680
It is you get one freebie for the fact that you commit to this on a monthly basis.
909
00:55:33.940 --> 00:55:35.681
We come back in 12 months, you get a little bit discount.
910
00:55:35.921 --> 00:55:40.262
But you know that's a solid plan for you to be able to move the schedule accordingly.
911
00:55:40.922 --> 00:55:43.764
Package two is like we add maybe one or two extra services.
912
00:55:44.284 --> 00:55:49.488
Package three needs to be the thing that is your price anchor, which is probably like a $3.99 per month package.
913
00:55:50.068 --> 00:55:52.950
Like what can you do for four or five grand?
914
00:55:53.270 --> 00:55:54.491
Like that's your price anchor.
915
00:55:54.751 --> 00:55:55.932
And you would offer that first.
916
00:55:56.032 --> 00:55:58.994
Like, hey, by the way, for $4.99, we do like Christmas light install.
917
00:55:59.314 --> 00:56:00.134
We will do your vents.
918
00:56:00.375 --> 00:56:01.135
We will do your gutters.
919
00:56:01.355 --> 00:56:02.336
We will do wash your house.
920
00:56:02.356 --> 00:56:03.176
We will check your roof.
921
00:56:03.196 --> 00:56:05.258
Like you just layer that bad boy on.
922
00:56:05.638 --> 00:56:07.660
And then you downsell into $199.
923
00:56:07.720 --> 00:56:10.983
And then everyone should be walking away with $99 a month afterwards.
924
00:56:11.003 --> 00:56:13.125
Because they just gave you $1,400.
925
00:56:13.706 --> 00:56:16.769
And for some reason with Housewatch, people think they need it every year.
926
00:56:17.049 --> 00:56:17.530
It's just great.
927
00:56:17.550 --> 00:56:20.192
Because you can just annualize it and make it look like a good deal.
928
00:56:20.833 --> 00:56:21.053
Right.
929
00:56:21.493 --> 00:56:22.274
That's a really good idea.
930
00:56:22.294 --> 00:56:22.454
Yeah.
931
00:56:22.474 --> 00:56:22.755
So I think –
932
00:56:23.728 --> 00:56:23.968
Yeah.
933
00:56:24.208 --> 00:56:31.231
Hiring those two people while moving Dan into his role, hiring the admin, prioritizing and packaging sales.
934
00:56:31.251 --> 00:56:32.512
You'll do because you'll have sales.
935
00:56:32.532 --> 00:56:33.792
You'll be 100% on sales.
936
00:56:34.392 --> 00:56:36.413
I know you're smart enough to website stuff.
937
00:56:36.453 --> 00:56:38.554
How do we start making that instant quote stuff?
938
00:56:38.574 --> 00:56:41.195
What's my process look after a job is complete?
939
00:56:41.215 --> 00:56:44.957
How do I incentivize the technicians on the upsell?
940
00:56:45.117 --> 00:56:46.577
How do I track the upsell stuff?
941
00:56:46.938 --> 00:56:47.818
You'll figure all that stuff out.
942
00:56:48.078 --> 00:56:48.339
All right.
943
00:56:48.379 --> 00:56:50.744
I feel like I got my marketing orders now, which is helpful.
944
00:56:50.784 --> 00:56:51.105
Let's go, dude.
945
00:56:51.506 --> 00:56:52.107
Good stuff, man.
946
00:56:52.267 --> 00:56:53.731
Well, best of luck in 2026, man.
947
00:56:53.751 --> 00:56:54.472
I really appreciate you.
948
00:56:54.753 --> 00:56:54.973
Yeah.
949
00:56:55.014 --> 00:56:55.495
Thanks, Mike.
950
00:56:55.555 --> 00:56:56.377
Really appreciate you.
951
00:56:56.838 --> 00:56:58.541
The content's awesome, so keep it coming.
952
00:56:58.662 --> 00:56:59.524
I'll keep consuming.
953
00:57:00.025 --> 00:57:05.236
And then hopefully this time next year, I'll book another call, and we'll be like, all right, how do we open the first location?
954
00:57:05.697 --> 00:57:06.078
Let's go.
955
00:57:06.219 --> 00:57:06.639
You're the man.
956
00:57:06.960 --> 00:57:07.582
You have a good one, brother.