How to Build a $40M+ Home Service Business: Cash Flow, Sales & KPIs

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Rule number one, never run out of cash.
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Rule number two, don't forget rule number one.
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Today we're talking about cash flow.
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I'm John Wilson.
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I'm the CEO of Wilson.
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We're around 40 million in revenue with roughly 200 team members across Ohio, Indiana, and Nashville.
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Now, cash flow is a big broad term, but we're going to try to break it down in a way that makes sense.
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And why focusing on it, aside from the obvious, is the important thing to do.
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Your accountant has just filed your taxes and you get a call saying, Hey, you had a great year.
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Here's how much you owe in tax.
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Well, that amount of profit that you're telling me that I earned isn't in my bank account, but yet I still owe tax on it.
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Somebody walk me through what happened.
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Most businesses feel that way.
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You can be profitable and still be broke.
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Most businesses are profitable, but still broke.
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There's a lot of layers to it that we're going to be solving today, but this is essentially the cash flow problem.
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Cash flow is a pretty simple core concept.
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How much cash is in my bank account versus how much cash leaves my bank?
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Are you paying bills?
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Are you paying debt?
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What are you doing with the cash?
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It's how fast you get paid, how fast you have to pay out, how much you get to keep, and how much of it can you reinvest into new equipment or marketing campaigns or staff members.
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Before we dive too deep, let's talk about what does not show up on your books.
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That way you know like what will impact cash.
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Accounts receivable.
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If people owe you money, you don't have that cash.
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So if you had a million dollars of profit, but you have a million dollars of accounts receivable, you might have nothing in your bank account, despite having a million dollars of profit.
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Your accounts payable, you might actually have more cash in this case because if you've received all your cash, but you haven't paid your vendors yet, you could have an excess of cash, which could be a problem if you don't know that and understand.
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Maybe you go buy a new car or new truck or something, and you didn't realize that, hey, I still owe all this money.
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This cash really isn't mine.
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Debt touches cash, but doesn't touch net profit.
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So if you're paying off auto loans, if you bought a business, if you bought a new building, if you have a line of credit, those are decisions that absolutely impact cash, but do not impact profit.
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There's a ton of these examples, but the core concept is net profit does not equal cash, and EBITDA does not equal cash.
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So we have to install some systems into our business to understand what is cash, where is it going, and how's it coming in?
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That way we can truly understand cash flow.
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As a big example, there was a company for sale in our industry two or three years ago, and they were doing$12 million of EBITDA, which is a way to measure profit.
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Now that company was losing$2 million of cash flow a year.
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How on earth was that company doing that?
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And it's honestly not that complicated.
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They had some auto debt, they had some MA debt because they were buying companies, they had some real estate debt.
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Lo and behold, it happens really fast.
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Most marketing agencies will show you clicks, impressions, and maybe even traffic, but none of that really matters if the phone's not ringing.
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And that's why we partner with service scalers.
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They are built specifically for home service companies and they focus on one thing, which is driving real, high-quality calls and book jobs.
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This is a no-brainer.
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They're offering a 60-day money-back guarantee on LSA management, Google Business Profile Optimization, and website builds.
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If you don't get more visibility, more calls, and better leads, then you don't pay.
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If you want more book jobs without the marketing headache, click the link below and book a free strategy call with ServiceScalers.
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We self-funded our growth.
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We're called a bootstrapped company, which means that we took no outside funding to get to where we are today.
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We started at a million of revenue and today we sit at around$40 million of revenue 10 years later.
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That was bootstrapped.
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We took on some debt, we reinvested all of our profits, and we learned most of the lessons that we're going over in this video the hard way.
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We learned it by living out the failure.
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We learned by buying too much equipment and not paying enough attention to this or buying a ton of inventory, but not having the cash when we needed it.
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So most of these decisions we learned in the tough way, the school of hard knocks.
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And what we learned over the past decade is that nearly every decision that we make comes back to cash.
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If I buy inventory, maybe I can get it 30% off, but I also have to buy it, which means my cash shrinks significantly.
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Okay, can I buy, can I cover payroll?
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Can I pay for marketing?
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Will I be okay for my debt payments?
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Will I be okay for my payroll?
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Hey, that software, it requires an annual upfront payment versus monthly.
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Well, can we do that?
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We have to be focused on our cash flow, not just the price.
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And this is the difference between your cash flow and your profit and loss statement.
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On your profit and loss statement, those two decisions are great decisions.
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If I get to buy inventory at a deep discount and then cost it properly, well, that's amazing.
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Because on my on my profit and loss statement, I will show even more profitably.
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But on my balance sheet, I'll have no more cash.
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You don't want to be in a situation where you have no more cash.
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Here's a couple other examples that can impact cash.
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Pricing to customers, pricing from vendors.
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Cutting or renegotiating vendors should add more cash as you drive less cost.
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The timing of payments that can be really important.
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Is payroll every week?
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Is it every two weeks?
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How often are you paying your vendors?
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How long do you have to pay your vendors?
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Marketing can be a huge cash suck.
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If you're doing broadcast media, well that might take 12 months to get a return on.
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Whereas if you're doing Google, it might take a day.
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So be thoughtful for what you're investing in because broadcast will probably work, but it takes a big investment before it starts spinning off new cash.
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Rebates, credit card returns, how to buy vehicles, all these things impact cash in a big way.
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Cash flow is a million of micro decisions.
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Every single day, all of these micro decisions add up to your actual cash flow.
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If we're running a profitable business, we're paying taxes to our community, we're creating new jobs, we're creating growth, which creates opportunity.
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We are creating for our team and our community.
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In order to run a profitable business, we need to be cash flow positive.
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Businesses don't actually go bankrupt because they're not profitable.
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They go bankrupt because they run out of cash.
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You can be not profitable for a very long period of time, but if you have cash flow, you can be net profit negative forever as long as you still have cash flow.
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And there's tons of businesses doing it.
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As CEOs and operators of our businesses, we are active investors.
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It is our job to take the incoming cash and allocate it to whatever the best return for that cash is.
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Maybe that cash is a hire, maybe it's inventory, maybe it's a marketing channel, maybe it's an acquisition.
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I don't really know for your scenario, but that is your job as the CEO of your business is to allocate capital.
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The smaller the business, it's probably just you thinking about this.
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You probably don't have a CFO, you probably don't have a real thought partner in this.
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It's just going to be you.
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And whether or not you make the right decision is basically going to determine what happens with your business.
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If you make the right decision, like MA or a marketing channel that works or effective buying decisions on your vehicles, your business can continue to grow and grow and grow because you have more cash flow to invest into marketing and people, and you have a you'll be able to create a safety net so that you can scale.
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But if you don't pay attention to this, then you're just going to get stuck.
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The best contracting businesses out there actually grow cash faster than they grow their core business.
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Because if they get paid a customer deposit, they get paid upon completion, they pay payroll two weeks later, and they pay their supplier 30 days after that, you're actually getting paid to grow your business.
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You're getting all of your money up front, and then you're paying out costs on the back end.
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So the best contracting businesses out there are self-funding their own growth because they're prioritizing their cash flow and they're dialed in and focused on it.
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And then they're paying their costs in 14, 30, 60 days.
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And that's allowing them to fuel themselves as they scale.
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Now, this one might be a little bit controversial, but I think over the last few decades, we have been served up metrics for what is good in our industry.
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Good might be 50% gross margin, 40% overhead, and 10% net.
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But today in 2026, I don't know how right that is.
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As an example, today we're running in a mid 20% EBITDA margin, which is a lot for a business our size.
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Now, 24% is a big difference from 4%, which is our industry average.
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The way that I like to think about this is the cost in your business something that a customer would care about?
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If you remove that cost with the customer care, if you added a new cost, would the customer pay more for your service because they like your service better because of this new cost?
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And if it's not, then you should probably work to eradicate.
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But if you're overpaying for your office or you're doing some other luxury spending, but you're skimping on your call center, well, the customer is probably going to care a lot more about the call center.
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And when they call in, will they get served than they did about the fancy office?
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My firm belief is if you are benchmarking against 20 years ago KPIs for profit, you're measuring against the wrong thing.
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Most contracting companies today, I believe, should be between 50 and 60% gross margin with a mid 20% profit.
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I think in the next few years, with all of the AI and automation that is coming out, I think we will start to see at scale contracting businesses in the 30% free cash zone, which is absolutely unheard of.
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If I was back at 1 million, here's a couple of things that I would do.
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One, I would start tracking cash weekly.
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This isn't complicated.
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We still do this to this day.
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We call it our cash out, and it's cash in, cash out.
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Two, I like separate accounts.
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I always love the book Profit First.
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And in that book, there's a profit account, we call it our capital account, where every day or every week or every month, we just automatically transfer money to that account.
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And then we use that money as our profit account.
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Uh, maybe we buy some vehicles, maybe it's a distribution for the owners.
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Three, can you pull cash forward?
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How do you get paid faster?
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How do you make it so easy to pay you that you get paid immediately?
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The back half of that is delay your payments.
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Negotiate terms with every vendor that you can possibly negotiate terms with.
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If you're buying goods, if you're buying services, push for terms.
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The difference between getting your cash and paying your costs is cash flow.
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Just doing those four things, if you did them for a month, you would understand your business better than 90% of contractors out there.
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You'd know where you're hurting, where you can cut, where you could optimize, and how to drive more cash so you can keep scaling your business.
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The way I like to think about this and the way I talk to my team about this, is this is less cash flow and this is just control.
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Do I have control over where the cash is coming in and where it's going out?
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Do I feel like I'm in control?
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Or do I feel like I'm held hostage by whatever cash reality is happening in our business?
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For the first six, seven years of my career, I felt like I was hostage to the business.
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And it was only after the we installed some of these disciplines that I feel like I'm in control.
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That's the difference of a$1 million plumbing company and a$40 million plumb county.
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If your checks aren't selling high ticket, it's probably not their fault.
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Most owners, when they look at their numbers, they think that they have a sales problem, but really they have an organizational problem.
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Maybe their training's bad, maybe they're solving for the wrong thing, or maybe how they present it is just not in a way that a customer would buy.
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Most businesses are just solving for the wrong pain point, and they're solving for the pain point that isn't valuable enough.
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I'm John and I'm the CEO of Wilson Plumbing Heating Cooling in Ohio.
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And we run a$40 million plumbing, HVAC, and electric business.
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Over the years, we bought 14 companies, and in most of those businesses that we're acquiring, we notice the same problem over and over again.
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And it's that people are solving the wrong problem.
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And when they solve the wrong problem, they're not getting enough value for the solution that they're there to solve.
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So a few examples.
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One would be in HVAC.
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There's a lot of companies out there that believe that the best way to service their customer is to repair that system until the end of time.
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And for some customers, that is the exact right thing to do.
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But for others who don't want to keep paying tax to a problem, they would rather put in a new system that's more high efficient, that would save them fuel costs, and that they can finance over time.
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So you'll find that people are fixated on the wrong problem, which, hey, every customer wants to save money, and not, hey, every customer over the long term might be better suited with this solution.
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And the difference is humongous.
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The repairs might be a few hundred dollars, the replacement might be fifteen thousand dollars.
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They're just focused on the wrong problem and they're presenting the wrong solution to that customer.
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You see it in the way they market, they're chasing these low-value jobs with the hope that over a long enough period of time, someone will accidentally realize that, hey, I do need this bigger solution.
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So that way the company doesn't feel like they have to bring it up or try to upsell it or offer it as solutions.
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A lot of companies out there get sort of weirded out by the concept of sales, but at the end of the day, we we're all in sales.
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Everyone is in sales every day.
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In order for our company to run, in order to cover payroll and rent and marketing, we have to sell something.
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Someone has to sell something and someone has to pay you for that thing.
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As you're focusing on your business and what your average ticket is and what your average sale is.
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And if you want to drive it higher and improve it, you have to start with where you're at now.
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What are the solutions you're trying to solve inside your business?
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What are the solutions you're offering to your customer every day, right now?
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And how are you packaging it in a way that makes sense to them?
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One of the most important concepts in high-ticket sales is are you solving a high value problem?
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Is your problem going to spare someone some inconvenience?
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Is it a small issue or is it humongous?
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As a couple examples, I'm going to use DocuSign and I'm going to use an attorney.
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So DocuSign, I think I pay$100 a month for DocuSign and it allows me to sign contracts.
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I can also use Chat GPT to create contact contracts, and maybe that's great.
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For another$100 a month, I could potentially replace an attorney by having ChatGPT draft me a contract and DocuSign to sign it.
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I'm probably not solving big deals.
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I'm not going to be buying a company with the help of ChatGPT drafting my contract.
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I'm not going to be doing something meaningful.
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I might be drafting a small agreement for a small problem.
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Maybe it's a few thousand dollars, but it's not going to be tens of millions of dollars.
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That is too valuable of a problem to trust to too cheap of a solution.
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So you pay an expensive attorney.
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You're working with somebody that's$2,000 an hour.
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High ticket sales is solving high-ticket problems.
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So I would expect to pay my attorney hundreds of thousands of dollars on a deal that's worth tens of millions of dollars.
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And I would expect to pay DocuSign almost nothing for something that's not that valuable.
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Take the same prompt to your own business as you're thinking about what problems are we here to solve.
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For us, we're a plumbing HVAC and electric business.
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So I the last example was HVAC.
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We'll use uh sewers for this one.
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We go in and someone has a backed-up drain.
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Backed up drains are an unpleasant experience.
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There's water in their basement, there's potentially damaged walls, damaged carpet, damaged stuff that they were storing down there, and it has sewage all around it.
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Pretty like unpleasant experience.
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What a lot of companies do is they go in and solve the immediate problem.
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There's a lot of pain, but they just go and here's the$300 solution, which is the band-aid, but it doesn't actually solve the problem.
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The valuable problem is hey, drains aren't supposed to back up at all.
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So we have a high value problem, which is there was property damage, there was discomfort, there was pain, there was inconvenience.
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And most people are attacking it with the low value solution that they will have another problem if that's all that you offer them.
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As you're thinking about the high value problem and the high value solution, the way you want to do this is you want to create a value ladder.
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So inside home service for HVAC, a value ladder is hey, here's the reason I came out.
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And maybe that's the repair, maybe it's the annual tune-up.
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The next one could be a repair or an upgrade.
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So, hey, I came out here to do this thing and you need this other thing.
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Maybe you want this other thing.
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And then the highest rung is the big job, the big pain point solve, the big valuable part for you and the customer.
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And that's the top of the value ladder.
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So as you're thinking about setting up your offering, you want to be able to have this value ladder that lets you come in at the bottom and be able to offer a stack of solutions to whatever that customer wants along that value ladder.
00:16:30.240 --> 00:16:31.360
Now we look at our team.
00:16:31.440 --> 00:16:33.200
And there's three different ways to look at this.
00:16:33.360 --> 00:16:35.679
So the first one, are we tracking the data?
00:16:35.759 --> 00:16:41.200
I'm always amazed at how often I find companies not even knowing their average ticket or their close rate.
00:16:41.360 --> 00:16:43.600
Well, how are we going to improve if we don't know where we are today?
00:16:43.759 --> 00:16:45.679
Our second one is how often are we doing trainings?
00:16:45.840 --> 00:16:47.679
How good the training is is a part of that too.
00:16:47.759 --> 00:16:49.039
But hey, are we training at all?
00:16:49.200 --> 00:16:50.159
Are we training every day?
00:16:50.320 --> 00:16:51.279
Are we training once a week?
00:16:51.440 --> 00:16:52.720
Are we training once a month?
00:16:52.879 --> 00:16:54.879
And then are the trainings quality?
00:16:55.120 --> 00:16:57.039
Are you bringing in outside professionals?
00:16:57.200 --> 00:16:59.919
Do you have a curriculum that you've sort of worked with?
00:17:00.080 --> 00:17:02.320
Are you doing role play or practice?
00:17:02.480 --> 00:17:05.200
And finally, are you doing ride-alongs?
00:17:05.359 --> 00:17:06.960
Are you seeing it in the field?
00:17:07.119 --> 00:17:12.319
Are you watching as your team offers the value ladder to help coach them to improve?
00:17:12.559 --> 00:17:16.960
The best operators out there have a pretty sophisticated sales setup.
00:17:17.119 --> 00:17:23.599
They have a great offering that solves the immediate problems as well as the big valuable problem.
00:17:23.680 --> 00:17:30.480
They have consistent training to teach their reps to bring people up the value ladder to the profitable big average ticket.
00:17:30.559 --> 00:17:32.640
They're doing regular one-on-ones.
00:17:33.279 --> 00:17:36.400
They're regularly training and enhancing their sales model.
00:17:36.559 --> 00:17:40.000
And they're doing ride-alongs to see reality and then scorecarding.
00:17:40.160 --> 00:17:44.880
The best way to think about this is there are inputs and outputs.
00:17:45.039 --> 00:17:50.319
And most of us, when we're looking at measuring our reps performance, we're only looking at the output.
00:17:50.480 --> 00:17:57.039
We're looking at the sales number or the closing rate or the average ticket, but we're not looking at all of the things that went into that.
00:17:57.200 --> 00:18:01.359
The offering, the ride-alongs, the trainings, the scorecarding.
00:18:01.519 --> 00:18:04.799
All of that is input that you expect to drive a greater outcome.
00:18:04.960 --> 00:18:09.200
But you have to look at both in order to understand where you are and how to improve it.
00:18:09.440 --> 00:18:11.680
The way we started this was kind of easy.
00:18:11.839 --> 00:18:15.759
We sat down and we said, hey, what are our best jobs?
00:18:15.920 --> 00:18:17.680
What are our most profitable jobs?
00:18:17.839 --> 00:18:18.880
Our biggest tickets.
00:18:19.039 --> 00:18:24.319
If I could only do one or two or three jobs every single day for the rest of my life, what would those jobs be?
00:18:24.480 --> 00:18:29.200
Maybe it's replacing water heaters or generators or sewers or furnaces, whatever it is.
00:18:29.440 --> 00:18:32.079
But we picked those and we called them our core service.
00:18:32.160 --> 00:18:38.079
And then we made it our mission to drive as much of our revenue through those core services as possible.
00:18:38.319 --> 00:18:42.480
As you think about building around that, what's the materials that we're going to put out for marketing?
00:18:42.640 --> 00:18:44.400
How do we talk about this on socials?
00:18:44.559 --> 00:18:46.720
Are we putting in an email and SMS?
00:18:46.960 --> 00:18:50.079
Are we training our techs to help support that one thing?
00:18:50.319 --> 00:18:52.079
Are we paying attention to leads?
00:18:52.240 --> 00:18:57.119
Are we making sure every opportunity can have the ability to turn into that one thing?
00:18:57.279 --> 00:19:07.839
That is how you build a higher average ticket is you get the team fully aligned on the lead, the sales, the training, and just a cycle over and over again.
00:19:08.000 --> 00:19:11.200
And finally, we want to install some just basic cadences.
00:19:11.359 --> 00:19:16.319
We want to be reviewing our job tickets, we want to be doing monthly or quarterly ride-alongs with our guys.
00:19:16.400 --> 00:19:23.359
And we want to be doing it at a minimum one training a week, ideally two or three, because that is where you're going to see performance improve.
00:19:23.519 --> 00:19:28.160
In closing, if your average ticket is low, if your average sale is low, it's probably not just your text.
00:19:28.400 --> 00:19:29.440
What's the offering?
00:19:29.599 --> 00:19:31.920
Are you solving a valuable enough pain point?
00:19:32.160 --> 00:19:33.279
How often are you training?
00:19:33.440 --> 00:19:34.720
How often are you riding along?
00:19:34.880 --> 00:19:38.559
And is your company set up to succeed around this idea?
00:19:39.119 --> 00:19:42.400
Most home service companies don't stall because of demand.
00:19:42.480 --> 00:19:44.559
They stall because they run out of good people.
00:19:44.720 --> 00:19:48.880
Finding solid help fast is hard, especially in this industry.
00:19:49.039 --> 00:19:51.039
And that's where Quick Staffers comes in.
00:19:51.200 --> 00:19:57.119
They help home service companies build reliable virtual teams that actually understand how the trades work.
00:19:57.200 --> 00:20:05.920
Quick Staffers provides vetted, remote staffed who are already trained on Service Titan and use proven SOPs, the same as the ones that I use at Wilson.
00:20:06.000 --> 00:20:13.599
These are VAs you can plug in from day one to handle customer service, lead follow-up, scheduling support, and a ton more.
00:20:13.680 --> 00:20:17.440
They've been a huge help in scaling my team without the usual hiring headaches.
00:20:17.599 --> 00:20:19.519
Check them out at the link below.
00:20:20.000 --> 00:20:23.359
Most owners are trying to fix problems that they can't see.
00:20:23.440 --> 00:20:26.880
Like they're just guessing and shooting at the dark at whatever the problem is.
00:20:27.039 --> 00:20:30.000
In a home service business, there are basically five numbers.
00:20:30.160 --> 00:20:37.119
They're gonna tell you how you're doing leads, booking rate, average ticket, closing rate, and number of options.
00:20:37.279 --> 00:20:42.160
And those five numbers are going to tell you most of the problems that you have inside your business.
00:20:42.319 --> 00:20:44.799
We're running a business, so let's focus on what we can see.
00:20:44.960 --> 00:20:49.920
If you take that philosophy to more of your business, it'll start helping you unpack it.
00:20:50.079 --> 00:20:59.119
Things like how you organize your field service management software, how you organize your financials, how you do job postings and marketing management.
00:20:59.359 --> 00:21:05.119
Everything ties back to you have to know the fundamental numbers that run your business.
00:21:05.279 --> 00:21:11.279
You have to know what drives it because when something breaks, you need to know that that one thing broke.
00:21:11.359 --> 00:21:12.319
I'm John Wilson.
00:21:12.400 --> 00:21:16.960
Over the last 10 years of my life, I've spent it building a$40 million home service company.
00:21:17.039 --> 00:21:19.039
On this channel, we break down how to build your business.
00:21:19.119 --> 00:21:19.920
So let's dive in.
00:21:20.000 --> 00:21:23.839
These numbers show the whole customer journey, which is why they're so valuable.
00:21:24.000 --> 00:21:25.759
How many customers are contacting us?
00:21:25.920 --> 00:21:27.279
Do they like our call center?
00:21:27.359 --> 00:21:28.079
Are they booking?
00:21:28.160 --> 00:21:30.240
How many of them are trusting us with a sale?
00:21:30.400 --> 00:21:31.279
That's our closing rate.
00:21:31.440 --> 00:21:34.480
Are they trusting us with a big number or small number, average ticket?
00:21:34.640 --> 00:21:39.759
And did we do a good job presenting to them and building trust, which is number of options?
00:21:39.920 --> 00:21:47.759
It walks you through the whole customer journey, and then that's going to get reflected later in your financials with rising revenue and strong gross margin.
00:21:47.920 --> 00:21:53.519
Pinpointing these five numbers also helps you identify which part of your business do you need to fix.
00:21:53.680 --> 00:21:58.319
If I know I need 20 leads a day and I'm at 10, I know that I have a leads problem.
00:21:58.400 --> 00:22:06.559
But if I'm getting 20 leads a day, And revenue's still not moving in the direction that I want it to be, then I probably have a closing rate, booking rate, or average ticket problem.
00:22:06.640 --> 00:22:07.920
You just start solving from there.
00:22:08.160 --> 00:22:10.160
Is my average ticket lower than what I expect?
00:22:10.319 --> 00:22:12.400
Is my closing rate lower than what I expect?
00:22:12.559 --> 00:22:14.799
What you expect can just be your average.
00:22:14.960 --> 00:22:20.079
It's always a good rule of thumb to ask your peers, research and find what should my average ticket be?
00:22:20.319 --> 00:22:21.839
What should my closing rate be?
00:22:22.000 --> 00:22:29.200
You can also just use your own history for the last 30, 60, 90 days to inform you on what your average ticket should be.
00:22:29.359 --> 00:22:31.359
This should be easy to find.
00:22:31.519 --> 00:22:37.599
We had people come in for our breaking five workshop here a few weeks ago, and we gave this simple assignment.
00:22:37.839 --> 00:22:42.400
I want you to go find and tell me how many phone calls you got last week.
00:22:42.559 --> 00:22:47.119
Half of the room could not find how many phone calls they had in an hour.
00:22:47.279 --> 00:22:48.640
This should be easy to find.
00:22:48.720 --> 00:22:50.319
It should be hitting you in the face.
00:22:50.480 --> 00:22:58.640
And if it's not, then what you need to be thinking about is do I have the right technology in my business so that the information is easy to access.
00:22:58.799 --> 00:23:01.680
You have to know this information immediately.
00:23:01.839 --> 00:23:05.440
The owner thinks it's one problem, but the numbers say it's something else.
00:23:05.599 --> 00:23:09.039
Someone saying, Hey, like I'm actually going to go bankrupt in 30 days.
00:23:09.119 --> 00:23:10.400
Like this was a real call I had.
00:23:10.640 --> 00:23:15.359
Turns out his guys were extremely busy, literally could not have handled more leads.
00:23:15.519 --> 00:23:20.720
But leads is the first thing that people go to because it's the thing that's outside of their control.
00:23:20.960 --> 00:23:23.839
But really, it was something totally different.
00:23:24.000 --> 00:23:29.279
We found out his average ticket was$300 and it should have been 1200.
00:23:29.440 --> 00:23:32.720
He was fully within his power to fix this problem.
00:23:32.880 --> 00:23:37.759
And they got up to 800, which was a huge improvement in a very short amount of time.
00:23:37.920 --> 00:23:41.759
Another area that I see is, oh my gosh, we need more leads.
00:23:42.000 --> 00:23:46.640
And what they say is, well, like we're getting all these calls, we just don't have enough on the board.
00:23:46.720 --> 00:23:49.920
So we start diving in a little bit more and hey, their booking rate's bad.
00:23:50.000 --> 00:23:55.839
The first thing I have them do is I want you to go listen to 10 calls that came into your call center.
00:23:55.920 --> 00:23:57.440
They call me back a few minutes later.
00:23:57.599 --> 00:24:00.480
They don't have a leads problem, they have a booking problem.
00:24:00.559 --> 00:24:02.720
They're getting all the leads that their business needs.
00:24:02.880 --> 00:24:04.720
They're just choosing not to book them.
00:24:04.880 --> 00:24:07.599
Again, very liberating, very within your control.
00:24:07.839 --> 00:24:10.720
KPIs help drive the business every day.
00:24:10.880 --> 00:24:11.759
How many calls do we get?
00:24:11.839 --> 00:24:12.960
How many calls did we book?
00:24:13.039 --> 00:24:14.000
What was our average sale?
00:24:14.079 --> 00:24:15.359
How many do we sell in the field?
00:24:15.519 --> 00:24:16.720
What was our number of options?
00:24:16.880 --> 00:24:23.920
You should be running a daily huddle with your team where you talk about those five things every day because that tells you what do we have to get done?
00:24:24.079 --> 00:24:24.799
What's the mission?
00:24:24.960 --> 00:24:32.720
With KPIs, as you start tracking more and more inside your business, an easy thing to overcorrect on is tracking everything.
00:24:32.880 --> 00:24:37.440
So you have to make sure you're tracking the right thing that gives you the most information.
00:24:37.599 --> 00:24:40.319
Something like marketing ROI over the last 30 days.
00:24:40.480 --> 00:24:43.920
That is like five different measurements rolled up into one, summarized.
00:24:44.000 --> 00:24:44.799
And it's kind of beautiful.
00:24:44.960 --> 00:24:50.319
So make sure you're tracking the things that actually matter and you're not just creating noise inside your organization.
00:24:50.480 --> 00:24:53.680
A big question we get is how often should you be checking these numbers?
00:24:53.920 --> 00:24:57.920
One is you need to be able to check it within 10 seconds at any time.
00:24:58.079 --> 00:25:05.200
But two, you should have a daily meeting and talk about yesterday's numbers and month-to-date pacing.
00:25:05.279 --> 00:25:07.839
Once a week, you should be talking with your leadership team.
00:25:08.000 --> 00:25:15.119
And every week you deep dive for 30 minutes on those numbers and check the health and work on how we can make them better.
00:25:15.279 --> 00:25:21.599
If you only look at these numbers monthly or quarterly, that's too much lag in between performance and improvement.
00:25:21.680 --> 00:25:25.839
If last week was bad or trending bad, then I can make a difference right now.
00:25:26.000 --> 00:25:30.960
And if I track it week over week and day over day, then I have a lot of data and suddenly I can start to see trends.
00:25:31.119 --> 00:25:35.039
So you can solve real business moving, needle moving problems.
00:25:35.200 --> 00:25:41.359
As you develop your scorecard and you're measuring these five to ten things, it is important to help share that throughout the whole organization.
00:25:41.440 --> 00:25:42.559
Your score should be on the wall.
00:25:42.720 --> 00:25:44.160
Everyone should know what the target is.
00:25:44.319 --> 00:25:46.880
They should know what they're contributing to that target.
00:25:47.039 --> 00:25:50.000
This should be a publicly displayed scoreboard.
00:25:50.079 --> 00:25:54.400
You should be sharing your dashboards and sharing your KPIs and coaching to them.
00:25:54.559 --> 00:25:56.400
We're expecting a thousand dollar average ticket.
00:25:56.480 --> 00:25:57.359
You're at 300.
00:25:57.519 --> 00:25:58.720
How do we help you get there?
00:25:58.880 --> 00:26:06.079
And this is how you start building a real business is you start measuring the things that matter and holding people accountable to those things.
00:26:06.240 --> 00:26:10.240
One of my favorite metrics is number of options.
00:26:10.400 --> 00:26:16.799
Because what number of options tells you is it's roughly going to tell you if average ticket and closing rate are on track.
00:26:16.880 --> 00:26:20.079
That one number can summarize a ton of information.
00:26:20.240 --> 00:26:22.079
Is the manager leading good training?
00:26:22.240 --> 00:26:24.640
Is this team member receiving the training?
00:26:24.799 --> 00:26:26.880
Are we running an effective sales process?
00:26:27.119 --> 00:26:30.079
Are we running a good process inside the home?
00:26:30.240 --> 00:26:34.880
All of that information is wrapped up inside number of options.
00:26:35.039 --> 00:26:47.119
I think the most valuable metric for field performance and manager evaluation is how many options on average do you present and how many options does your team present on average?
00:26:47.279 --> 00:26:53.759
So you have to open up the dialogue so you can discover the pain point and present them with the options to solve that pain point.
00:26:53.839 --> 00:26:59.039
That one metric, number of options per opportunity, is one of the most valuable in your business.
00:26:59.279 --> 00:27:03.920
KPIs and leading by the numbers are how you stop building a business based on your gut.
00:27:04.000 --> 00:27:08.880
And it's how you start driving the business forward basing on the fundamentals of the business.
00:27:09.039 --> 00:27:14.559
And this is how you hire people, hold them accountable, and build a$40 million business.
00:27:14.720 --> 00:27:20.880
Early on in our journey, we drove scorecarding in from the book traction and we drove average ticket and conversion rate.
00:27:20.960 --> 00:27:22.000
We started measuring that stuff.
00:27:22.079 --> 00:27:27.039
I could probably still find it from eight or nine years ago because we were measuring it very early on.
00:27:27.200 --> 00:27:33.119
And it was us measuring it so early that helped us get control of those numbers instead of them controlling us.
00:27:33.279 --> 00:27:38.880
We took control of it, we took control of the training, we improved those numbers day after day, year after year.
00:27:38.960 --> 00:27:46.640
And 10 years later, we 40 times the business because we understood the things that drove it and we continually beat them in.
00:27:46.799 --> 00:27:51.359
The real goal for KPIs as you drive it in is to solve problems fast.
00:27:51.519 --> 00:27:53.200
I expect this number to be X.
00:27:53.359 --> 00:27:54.880
If it's not, let's go solve it.
00:27:54.960 --> 00:27:57.920
If booking rate drops, I know that I'm going to struggle in the rest of the business.
00:27:58.000 --> 00:27:58.960
So I have to go attack it.
00:27:59.039 --> 00:27:59.759
I need to go.
00:27:59.920 --> 00:28:01.039
That's not a leads problem.
00:28:01.119 --> 00:28:04.400
That's a scripting problem or a call center training or maybe technology.
00:28:04.559 --> 00:28:05.759
There's something going on there.
00:28:06.000 --> 00:28:11.839
But if what if I thought it was leads and I spent a week trying to solve a leads problem, but really it was call center training.
00:28:12.000 --> 00:28:16.079
The more you measure of the important stuff, the easier it is to isolate that problem.
00:28:16.240 --> 00:28:19.039
And the faster you can isolate, the faster you can solve.
00:28:19.200 --> 00:28:21.839
If you like what you heard, remember to like and sub.
00:28:22.000 --> 00:28:25.359
And if you want more of my thoughts, check out ownedandoperated.com.
00:28:25.440 --> 00:28:26.400
We've got a great newsletter.
00:28:26.480 --> 00:28:27.279
We have a podcast.
00:28:27.359 --> 00:28:30.880
I'm active on LinkedIn and X, where we share this stuff all the time.
00:28:31.039 --> 00:28:34.079
Links to all of those and more are inside the description below.