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We're going to be talking about GM plus versus multiple locations.
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This has come up already multiple times in the Q&A.
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So I want to talk about this specifically and give much more clarity as to should you grow to that $3 million size?
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using the GM plus model, or should we do multiple locations and copy and paste the G the working GM model?
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That's what we're going to be talking about right now.
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So this is the org chart for the sole operator.
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There's someone doing between using zero and $250,000 in inner revenue.
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The sole operator is going to do all three aspects of the business because there is no one else.
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They're going to do sales, they're going to do operations, and they're going to be doing admin.
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Now, for the working GM, the GM is at the top of the org.
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We could also put slash owner, but I label this as GM because that's the role the GM is, the owner is playing, potentially as the operator is the GM.
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The GM is going to do sales.
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The GM is going to do operations, but they're going to try to delegate as much as possible on the admin side.
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But I don't want to go get a fancy shop space and a full-time office admin person because immediately at this size, if I do that, I will barely break even.
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If you're doing $500,000 a month, sorry, $500,000 a year, and you hire a full-time office manager and go get a shop space for three or four grand a month, all of your profit is gone.
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And so at this size, I am, as the owner, in sales, doing all the sales, I am also doing operations out in the field doing the work.
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I am trying to spend as much time as possible actually producing revenue.
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The determining factor of whether or not you're profitable at this stage of business, at this leadership hat of the working GM, comes down to how much revenue you produce in the field yourself.
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And that's not fun because especially you get to five, 600,000, like, man, I just want to get out of the field.
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I want to get off the truck.
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I'm tired.
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I'm done working out.
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I understand.
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But if you go from producing 150 grand in annual revenue in operations, doing the work, and then you become overhead, you can wipe out your profits immediately.
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You'll be very careful at the size to make sure that you stay in operations as long as possible.
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Okay, and then usually when you start hiring, as a working GM on the operational side doing the work, you're going to hire technicians.
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Okay, full-time GM.
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This is now where you're going to do full-time sales.
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This is when you are, quote, off the truck.
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You no longer are doing operations, and you're usually going to have to hire an operations manager.
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Okay, so now I've hired someone in the office doing admin.
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I've hired someone in operations to help train the crew.
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They're responsible for big projects, et cetera.
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And then I am mostly just doing the sales.
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All right.
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Now, as you pass $1.5 and $2, $3 million in annual revenue, this is generally what an org chart looks like in home services.
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We've got sales, operations, and admin, but not all three have a manager.
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Now, those green, the ones that are labeled green there, like estimators under sales, a mechanic or an assistant operations manager in operations and office assistants, those start becoming a real reality once you get close to $3 million and beyond.
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That's what starts to grow.
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If you really start like $10 million business, it's like, okay, I have a sales manager with three or four estimators.
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I have an operations manager with the operations assistant.
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Some would call them like crew leaders.
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There's more hierarchy that starts to get built out here.
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And inside the book, even on the admin side, you have office assistants.
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And then you start actually would silo people as you get to like $5, $10 million and start really scaling the business up.
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You just silo out your office assistants.
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Okay, so at this point, the GM is on the top of the org.
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They're not actually doing anything in the business.
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This is when you are out of daily operations, quote unquote.
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You could leave and your sales manager would get the work.
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Your operations manager would do the work and your admin would make sure, admin manager would make sure that the work gets paid for.
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So this is when you are out of operations.
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All right.
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So the big hairy question is, should I stay in growth mode and continue to go to become a GM plus?
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Like I want to go 1.5, $3 million in revenue, or do I take the working GM model where I'm at 750, 800?
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I'm going to profit my raised price at 850, 900, a million in revenue.
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I have six to eight employees.
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Like which way should I go?
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Should I copy and paste multiple locations around that 800,000 to a million?
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Or should I be more going the GM plus route?
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which is up to 3 million at one location, getting middle management involved.
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So let's go over the determining factors.
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Number one, this is when it makes sense to stay GM plus.
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So growing one sized out more.
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If you have a lot of one-time projects and no recurring revenue, it's just better to stay in one location because the ups and the downs, the amount of skilled labor that's required, your oversight is required more, movement of materials and equipment is more often.
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You've got to stay more centralized.
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This is why like HVAC, et cetera, where there's very highly technical, that's why usually these companies will grow much larger and they're willing to travel two, three, four hours driving because you've got to stay centralized.
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Every job is custom and complex.
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Remember, there's the opposite of simple and standardized.
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When we talk about the grid of creating systems, I'm trying to simplify and standardize everything.
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I'm trying to avoid complex and custom.
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But if every job you do is custom, changes, it's ever always different, and it's complex, very skilled labor, hard to train, you probably just want to do the GM Plus model.
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If you struggle to manage managers, this is a real skill.
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And the cool thing about knowing that it's a skill is that it can be taught and you can learn this skill.
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However, it is going to be a difficult skill to learn for many.
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It's very hard to learn how to manage managers.
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It's a very different skill than learning how to manage technicians.
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So just because you manage eight or ten employees as technicians does not mean you're going to be able to manage managers.
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Very different because as a manager...
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I'm going to be thinking very differently about my role.
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I want autonomy.
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I want to be able to manage my team.
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And I don't want you micromanaging me as the owner.
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So if you struggle to manage managers, this is another reason why maybe just staying centralized because it's harder once you split up your team, once you have diversification of location and you can't be in both spots, you need management.
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And they need to be able to run without you around.
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And so I see two different problems with this.
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One, a very strong owner, very strong presence and personality that is very difficult to work with as a manager.
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I see the other side where...
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They can't even get technicians to stay with them long enough to be able to move into that GM side, like into management.
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So they struggle with retention of technicians that can move into that operational GM role.
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And they struggle with once they have a GM managing them without that manager feeling micromanaged.
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Or people blow up over stuff.
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They make a big deal out of everything.
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No one wants to work for you.
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You're not going to be able to have multiple locations.
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It's going to require you to be in one location in the business all the time.
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And you might grow it to the point where you have managers that can fill in while you're gone.
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But because of your personality and the lack of skill and leadership, that will keep you from ever having a manager that operates the business 100% without you.
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All of the time.
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And so if you have the personality where like, I have to be involved in hiring.
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I have to be involved in if projects go wrong.
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I get really mad or agitated when someone does something that I train them not to do that.
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And you start to micromanage people when they're trying to sell and their close rate drops for a week.
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And you jump in and you try to tell them what to do.
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Like, trust me, this is the hardest thing in growing a business.
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So the thing I hated most about this title...
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is it sounds easy.
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Copy and paste is an easy function on a keyboard.
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Very difficult to do in practice because of this one thing.
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You'll have to become a better leader.
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And a lot of poor leaders...
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A lot of poor leaders in home services skate by by having one location because they're such strong personalities and they micromanage so well.
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They juggle things so well.
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And they are so good at their job.
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They can build a $3 to $5 million business being a micromanaging manager.
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And never delegating fully.
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Always having their hand in everything.
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Knowing every little thing in the business.
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Looking over everyone's shoulder.
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Not being able to retain managers for more than a few years.
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Because everyone gets burnt out working for them.
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That happens.
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And it's a mess.
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Four or five million dollars.
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How could you say that they're not successful?
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Ultimately.
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It's because their lack of leadership that doesn't allow them to be able to do the copy and paste method and potentially groom managers up, be able to give them places to be able to succeed inside the organization and not lose management because people just feel like you're just doing their job for them.
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And they feel like every little thing that you see in the business is a big deal.
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And so managing managers is a very different skill.
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It takes a lot of time, longer than anyone thinks.
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Like, well, I got a very successful business.
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I'll just like put this manager in place.
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As soon as you leave and they actually are the general manager, the dynamic between you and that employee will change.
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And that's not a bad thing.
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They are now responsible for your business.
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You will have to treat them differently.
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I see this mistake all the time.
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And that will be the biggest hurdle to doing the copy and paste method.
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is the ability to manage managers.
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All right, another reason why you should just say one location and grow it up massively is the business struggles when you are gone for two weeks.
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So one really quick way to test this is go on a vacation for two weeks and see if your business actually is systematized enough, is simplified enough, is standardized enough, and see what breaks and just keep fixing that every few months.
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So go six months, leave for two weeks.
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Okay.
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We had these jobs went bad.
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This service did not work out well.
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So-and-so didn't show up to work.
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Okay, great.
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Let's just cut that service out because we're never profitable on it.
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And that was the one thing I got text about while I was on my trip.
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Okay, great.
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Cut out that service.
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Oh man, that means it cuts out 15% of revenue.
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Okay, great.
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Let's spend a little bit of time on developing our lead system and our sales process to be able to make up for that 15%.
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Okay, great.
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Now let's go on a vacation again.
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What breaks?
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Oh, all of a sudden, the transmission keeps breaking this one certain type of truck.
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Get rid of the truck.
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Okay, we're going to upgrade the trucks now to make sure it's more simple for someone to be able to dispatch without me getting involved and having a bunch of breakdowns.
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These are the type of things you will tweak to make multiple locations and someone else running your business.
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a lot easier.
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It's time to lock in before the spring rush.
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And when it comes to locking in, you want to be able to rely on something to hold your business strong, just like this chain.
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That's why at Homeworks, we have the logo of the chain because it's the three links in every home service business, sales, operations, and admin.
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So before the spring rush gets super hot and you have leads coming in like crazy, make sure you're set up inside of a software like Homeworks that can take your business to the next level and allow you to scale this spring.
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Go check out today,
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works all right if you have an expensive office lease or mortgage uh just stay with one location
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You're paying three, four, five, six grand.
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See people that eight, nine, 10, 11 grand a month on an office space.
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There's not a lot of point in copy and pasting because you just double a very large expense by copying the location.
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So if you're immediately, you're going to go get a $5,000 a month lease for five years on a property and you already have one of those, you probably should just stay at one location.
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So for reference, my location, um,
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It was at a farm, and I think they paid $500 to $600 per month for rent because they had the trucks parked there and a storage container.
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It was just parked at a farm, $500, $600 a month.
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That you can copy and paste.
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You can find them easier.
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You're not locked in long-term leases typically.
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If you can do that, copy and paste starts to make more sense.
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If you already have an office team or your spouse is in person doing all the admin side, another reason why the GM Plus makes sense.
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Because if you have a very strong person in admin, like your spouse, who has inherent equity in the business, they're going to run it amazingly.
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And so why split that up?
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Like just keep growing that one location.
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I think that there are inherent...
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risks involved with doing that am i having a key person risk of having one admin person being the reason you build the whole business model around and so that's what i want to be careful of because if you're like well we're good great we're going to go to three million i have a solid my spouse is there with an assistant awesome you better make sure that assistant knows everything in the admin they're gonna be a little expensive but you better make sure they know everything because of something like if you go on a vacation and your office manager is now going
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And now it happens when phone calls come in and that person calls out sick.
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Like we would start creating redundancy just to make sure that if your spouse is out that we can cover.
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But if you have a spouse, like it's just so much easier to grow.
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It's like having a partner in the business doing the admin side.
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And so that's a huge hack.
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And if you already have an office team, why split them up?
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The alternative to this, though, if you wanted to copy and paste, is you could make that your hub, and then the spokes be the smaller locations.
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So if you already have an expensive shop space, and you're like, hey...
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I'm tapping out this current space.
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I would rather just have satellite locations and I have GMs over them.
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Maybe this location is already doing two, three million.
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I would rather just, as I break off sections of my service area and they'd grow to 800,000 a million, one GM that's operationally driven.
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I automate the sales.
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I have admin being handled at my hub and then operational GMs just do those service locations in smaller shop spaces.
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They don't need an office because the hub of the hub and spoke model is doing the command center stuff.
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Very cool.
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So when copy and paste the working GM model makes sense.
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Now, the working GM model is between $250,000 and $750,000 in annual revenue.
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Some people will get confused when I say $800,000 to a million when I reference this.
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The reason I say that is because if you're growing between $250,000 to $750,000, you're in that range of working GM.
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But at $700,000, you're past the $500,000 marker, which is where we talk about going into profit mode.
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And when you go into profit mode, you raise prices.
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You hit capacity, you raise prices.
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You hit capacity, you raise prices.
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And so when we raise prices, inherently, we will start sliding past $800,000, $900,000, a million.
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Like my location, both of my locations that I had this year and my current one location will do over a million dollars in revenue, but we didn't buy more trucks or hire more people.
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We simply just raised prices to the point where now what we would have been doing a few years ago at like $600,000 or $700,000 is now a million dollars because we've been raising prices.
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And so assuming that you keep optimizing your website, optimizing your sales process, you should be increasing the number of leads that are coming in and the number of customers that want your service.
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And if that happens, that means you have demand is higher than supply.
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And if demand is higher than supply, you can raise prices and continue to grow past 750,000 and become very profitable.
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And that is what I would love for every, almost every home service business owner is a business that does $750,000.
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They put that thing into profit mode and that same sized business makes a million in two to three years.
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not hiring more people, not buying more trucks, just doing a million dollars based upon raising prices.
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That's a 20 to 25% profit margin business that runs without you.
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And that's what the whole book is about.
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So if the majority of your revenue is recurring or reoccurring, then you can do the copy and paste working GM model.
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Okay?
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The reason is, is because if you have recurring revenue, I don't need a superstar salesperson to sell big jobs.
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If it's reoccurring, so recurring is it's on a weekly, biweekly, monthly cadence.
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It's scheduled.
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Reoccurring means it happens more than once and periodically, but it's not on a schedule.
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For example, fall cleanups, Christmas lights.
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These are reoccurring services that I don't schedule necessarily your bush trimming for the next three years.
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I'll put it, okay, we're going to come monthly.
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But you know generally that someone's going to have you trim the bushes three to four times a year.
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I'm just going to use an example.
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If a majority of a revenue, i.e.
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over 50%, is this type of revenue and not one-time jobs, I would give you the plus, the go-ahead.
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Does that mean you grow slower?
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Yes.
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I could grow a million-dollar business in one year, no problem, if I did projects and commercial work.
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I also know that commercial work will prevent me from going into profit mode because they're not going to take a 25% price increase.
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They're more price sensitive.
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And I also know that big projects are going to keep me from having recurring revenue that allows me to leave the business and not need a superstar general manager or salesperson.
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So that's why I'm looking for the majority of my revenue to be recurring or reoccurring.
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Second thing, copy and paste working GM model makes sense if every job is simple and standardized and the business can run without you for two weeks.
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So sales, I'm trying to automate.
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As much as possible.
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Instant quotes.
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I'm trying to get as close as possible to automated.
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Operations.
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That's what my GM focuses on.
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I try to create systems for them for hiring, training, onboarding, etc.
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Admin.
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Completely handled outside of the GM.
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The GM is not responsible to answer the phone.
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The GM is not responsible to run payroll.
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Everything on an admin perspective is either handled by my command center in the hub and spoke model where I'm doing a whole bunch of multiple locations down the road or
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on your first and second location, especially just have someone remotely doing this for you.
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So you don't need a big shop, fancy office space.
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You're not locked into salaries during the off season.
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Like if you have a great office person, you pay them during the winter to stick around and do nothing because you don't want to have to retrain someone during the spring.
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Crushes you financially, crushes you.
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So third one, you have a great employee that you want to promote.
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This is the most fulfilling thing I have ever done in my career.
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is see technicians become general managers, and then at Augusta, we allow the general managers to become owners.
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The most fulfilling thing I've ever done, it's also the best attraction tool for talent.
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To be able to look at people on the wall and say, oh yeah, that GM, he started exactly where you were at six years ago, worked in the field for a few years, and now he's a general manager.
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At Augusta, we say, oh yeah, and then these are all the pictures of people that now start their own location and went from general manager to owner.
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Yeah.
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But even if you just had, hey, that person moved into the estimator role, that person moved in the general manager role, like we're all moving up here.
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Like that's the best attract talent attraction tool you'll ever have.
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And if you have a great employee and you know you'll lose them if you don't do multiple locations, because if you as the owner are there, it doesn't make sense to now have another person involved, another body, another overhead person.
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It's like, hey, great.
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This person likes being in the field.
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They're excellent.
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They may be getting a little older.
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Maybe they would like to be able to spend some of their time doing sales or some of their time doing the maintenance on the equipment or some of their time hiring, or they really care about the team.
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Great candidate for a general manager.
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Okay, next, you want to create upward mobility for your team.
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We talked about that.
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You enjoy sales more than management.
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So as you scale past the working GM, most of your time will be spent on managing people.
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If you're in daily operations, most of your time is hiring, creating systems for your team, training them up.
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There's going to be some churn.
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If you start going to $3 million, you have 20, 30 employees.
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Every week someone's quitting or someone needs to be retrained, etc.
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That's just how it is.
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If you enjoy sales and you would rather go to door knocking and door hangers and run ads and that's your specialty, then copy and paste makes a lot of sense because the hardest part is getting it up to profit mode.
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They get it past $500,000, find a GM, put them in place, and then you walk away from that operational and that management side and you focus on selling.
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So if you love sales, if you love the hunt, if you just love doing follow-up phone calls and the chase of a new job is the thing that turns you on, you might just want to stick with doing copy and paste so you don't get wrapped up in daily operations as the GM at a facility that's not growing to 1.5, 2 million.
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You're trying to train up your sales manager, trying to train up people in the office, create systems for an operations manager.
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You just get to two and a half, 3 million.
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Like you might rather just not deal with that.
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automate sales, delegate admin, and then find a GM that can run six to eight employees at one location just doing operations.
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They don't have to be a unicorn, know how to sell, how to do a whole bunch of other things, how to be able to do QuickBooks and how to answer the phones.
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You don't need them to do those things.
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You just need a great technician that cares about the team, is self-motivated, is money motivated, and knows how to manage their schedule.
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Okay.
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Last one, when copy and paste working GM makes sense.
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If you're able to create a remote command center for admin.
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So when I say that, you don't necessarily have to do it yourself.
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This also means you could, like I said before, one of the callers that came in is you could take your accounting, your taxes, your payroll, and go get home service CPA to do it.
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You could contact, there's lots of companies like Jill's Office, Ruby.
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Oh, what's the other couple?
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Call Boss.
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There's a whole bunch of other companies that will just take your calls at like $2 a minute.
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Like, that's so expensive.
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That's $120 an hour.
305
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No, you know what's a whole lot more expensive?
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It's paying someone $20 an hour where I know that 75% of their day is not actually doing work.
307
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It's just all the time in between when they do work.
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20 calls a day, average call time, four minutes.
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That's 80 minutes.
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What are you doing for the other six hours?
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What?
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Seven hours and 40 minutes.
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No, sorry, six hours and 40 minutes.
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Like, that's like 15% of your day is actually spent on the phone.
315
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What are you doing with the other time?
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Like, and it's hard to, you know, tell them what to do when it's off season.
317
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There's no calls coming in and I've finished the inbox.
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And you're still paying them.
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And so I do not think that having someone remote charging by the minute is a bad move until you get to 1.5, 1.6.
320
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1.8 million in revenue, and you can actually keep someone busy full-time all the time year-round.
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That's when I would give the okay to actually go get an in-person office person or pay someone full-time.
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I'm willing to take the hit on the off-season because I want to keep them during the spring.
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But if you have a remote command center, i.e.
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your admin is being handled by someone that is remote, you don't have to get a fancy office space, you don't have to pay someone's salary, they're remote, then I'll give you even more, far more.
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far more latitude to go ahead and copy and paste your model.
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That's the hardest part.
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I talk about automating sales as much as possible.
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Instant quotes, we'll talk about this more later today.
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00:23:39.725 --> 00:23:42.105
Instant quotes, I want to automate sales as much as possible.
330
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I want to get over the phone estimates as much as possible.
331
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Admin, I'm trying to get remote.
332
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I'm trying to get permanent rates.
333
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I'm trying to delegate to specialists like an accountant or a bookkeeper.
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I'm trying to get rid of all that stuff so that I can narrow the focus of my general manager to just hire good team members and make sure they get the work done efficiently.
1
00:00:00.391 --> 00:00:03.195
We're going to be talking about GM plus versus multiple locations.
2
00:00:03.215 --> 00:00:05.659
This has come up already multiple times in the Q&A.
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00:00:06.039 --> 00:00:15.152
So I want to talk about this specifically and give much more clarity as to should you grow to that $3 million size?
4
00:00:16.940 --> 00:00:24.667
using the GM plus model, or should we do multiple locations and copy and paste the G the working GM model?
5
00:00:25.187 --> 00:00:27.149
That's what we're going to be talking about right now.
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00:00:27.509 --> 00:00:30.011
So this is the org chart for the sole operator.
7
00:00:30.352 --> 00:00:34.415
There's someone doing between using zero and $250,000 in inner revenue.
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00:00:34.875 --> 00:00:39.840
The sole operator is going to do all three aspects of the business because there is no one else.
9
00:00:40.868 --> 00:00:44.510
They're going to do sales, they're going to do operations, and they're going to be doing admin.
10
00:00:45.150 --> 00:00:48.752
Now, for the working GM, the GM is at the top of the org.
11
00:00:48.792 --> 00:00:56.697
We could also put slash owner, but I label this as GM because that's the role the GM is, the owner is playing, potentially as the operator is the GM.
12
00:00:57.677 --> 00:00:58.778
The GM is going to do sales.
13
00:00:59.893 --> 00:01:05.136
The GM is going to do operations, but they're going to try to delegate as much as possible on the admin side.
14
00:01:05.196 --> 00:01:14.261
But I don't want to go get a fancy shop space and a full-time office admin person because immediately at this size, if I do that, I will barely break even.
15
00:01:15.021 --> 00:01:25.287
If you're doing $500,000 a month, sorry, $500,000 a year, and you hire a full-time office manager and go get a shop space for three or four grand a month, all of your profit is gone.
16
00:01:26.741 --> 00:01:36.806
And so at this size, I am, as the owner, in sales, doing all the sales, I am also doing operations out in the field doing the work.
17
00:01:37.406 --> 00:01:41.088
I am trying to spend as much time as possible actually producing revenue.
18
00:01:41.328 --> 00:01:53.795
The determining factor of whether or not you're profitable at this stage of business, at this leadership hat of the working GM, comes down to how much revenue you produce in the field yourself.
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00:01:54.933 --> 00:01:59.076
And that's not fun because especially you get to five, 600,000, like, man, I just want to get out of the field.
20
00:01:59.456 --> 00:02:00.357
I want to get off the truck.
21
00:02:00.397 --> 00:02:00.997
I'm tired.
22
00:02:01.037 --> 00:02:02.198
I'm done working out.
23
00:02:02.278 --> 00:02:02.899
I understand.
24
00:02:03.539 --> 00:02:13.486
But if you go from producing 150 grand in annual revenue in operations, doing the work, and then you become overhead, you can wipe out your profits immediately.
25
00:02:14.907 --> 00:02:19.691
You'll be very careful at the size to make sure that you stay in operations as long as possible.
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00:02:21.652 --> 00:02:28.179
Okay, and then usually when you start hiring, as a working GM on the operational side doing the work, you're going to hire technicians.
27
00:02:29.220 --> 00:02:30.782
Okay, full-time GM.
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00:02:31.283 --> 00:02:32.944
This is now where you're going to do full-time sales.
29
00:02:33.004 --> 00:02:34.806
This is when you are, quote, off the truck.
30
00:02:35.167 --> 00:02:40.372
You no longer are doing operations, and you're usually going to have to hire an operations manager.
31
00:02:41.328 --> 00:02:44.253
Okay, so now I've hired someone in the office doing admin.
32
00:02:44.373 --> 00:02:47.578
I've hired someone in operations to help train the crew.
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00:02:47.678 --> 00:02:49.561
They're responsible for big projects, et cetera.
34
00:02:49.902 --> 00:02:52.085
And then I am mostly just doing the sales.
35
00:02:53.507 --> 00:02:53.788
All right.
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00:02:55.503 --> 00:03:02.745
Now, as you pass $1.5 and $2, $3 million in annual revenue, this is generally what an org chart looks like in home services.
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00:03:03.085 --> 00:03:06.126
We've got sales, operations, and admin, but not all three have a manager.
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00:03:06.687 --> 00:03:20.851
Now, those green, the ones that are labeled green there, like estimators under sales, a mechanic or an assistant operations manager in operations and office assistants, those start becoming a real reality once you get close to $3 million and beyond.
39
00:03:21.431 --> 00:03:22.412
That's what starts to grow.
40
00:03:23.772 --> 00:03:28.055
If you really start like $10 million business, it's like, okay, I have a sales manager with three or four estimators.
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00:03:28.335 --> 00:03:30.176
I have an operations manager with the operations assistant.
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00:03:30.216 --> 00:03:31.757
Some would call them like crew leaders.
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00:03:32.198 --> 00:03:34.519
There's more hierarchy that starts to get built out here.
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00:03:35.440 --> 00:03:38.602
And inside the book, even on the admin side, you have office assistants.
45
00:03:38.622 --> 00:03:43.365
And then you start actually would silo people as you get to like $5, $10 million and start really scaling the business up.
46
00:03:43.385 --> 00:03:45.207
You just silo out your office assistants.
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00:03:45.852 --> 00:03:49.175
Okay, so at this point, the GM is on the top of the org.
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00:03:49.195 --> 00:03:51.577
They're not actually doing anything in the business.
49
00:03:51.797 --> 00:03:54.219
This is when you are out of daily operations, quote unquote.
50
00:03:54.900 --> 00:03:56.902
You could leave and your sales manager would get the work.
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00:03:57.022 --> 00:04:03.668
Your operations manager would do the work and your admin would make sure, admin manager would make sure that the work gets paid for.
52
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So this is when you are out of operations.
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00:04:07.772 --> 00:04:07.972
All right.
54
00:04:09.022 --> 00:04:16.784
So the big hairy question is, should I stay in growth mode and continue to go to become a GM plus?
55
00:04:16.804 --> 00:04:24.865
Like I want to go 1.5, $3 million in revenue, or do I take the working GM model where I'm at 750, 800?
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00:04:24.885 --> 00:04:28.566
I'm going to profit my raised price at 850, 900, a million in revenue.
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00:04:28.906 --> 00:04:30.026
I have six to eight employees.
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00:04:30.046 --> 00:04:31.326
Like which way should I go?
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00:04:31.927 --> 00:04:35.527
Should I copy and paste multiple locations around that 800,000 to a million?
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00:04:35.987 --> 00:04:38.608
Or should I be more going the GM plus route?
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00:04:39.453 --> 00:04:43.394
which is up to 3 million at one location, getting middle management involved.
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00:04:43.795 --> 00:04:45.875
So let's go over the determining factors.
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00:04:46.275 --> 00:04:50.657
Number one, this is when it makes sense to stay GM plus.
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00:04:51.597 --> 00:04:53.318
So growing one sized out more.
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00:04:54.557 --> 00:05:08.966
If you have a lot of one-time projects and no recurring revenue, it's just better to stay in one location because the ups and the downs, the amount of skilled labor that's required, your oversight is required more, movement of materials and equipment is more often.
66
00:05:09.326 --> 00:05:10.947
You've got to stay more centralized.
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00:05:11.307 --> 00:05:23.595
This is why like HVAC, et cetera, where there's very highly technical, that's why usually these companies will grow much larger and they're willing to travel two, three, four hours driving because you've got to stay centralized.
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00:05:24.972 --> 00:05:27.473
Every job is custom and complex.
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00:05:27.793 --> 00:05:30.655
Remember, there's the opposite of simple and standardized.
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00:05:31.315 --> 00:05:35.397
When we talk about the grid of creating systems, I'm trying to simplify and standardize everything.
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00:05:36.258 --> 00:05:39.019
I'm trying to avoid complex and custom.
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00:05:39.239 --> 00:05:48.404
But if every job you do is custom, changes, it's ever always different, and it's complex, very skilled labor, hard to train, you probably just want to do the GM Plus model.
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00:05:49.923 --> 00:05:52.845
If you struggle to manage managers, this is a real skill.
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00:05:54.126 --> 00:05:58.769
And the cool thing about knowing that it's a skill is that it can be taught and you can learn this skill.
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00:05:59.210 --> 00:06:02.492
However, it is going to be a difficult skill to learn for many.
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00:06:02.952 --> 00:06:05.354
It's very hard to learn how to manage managers.
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It's a very different skill than learning how to manage technicians.
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00:06:08.976 --> 00:06:15.461
So just because you manage eight or ten employees as technicians does not mean you're going to be able to manage managers.
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Very different because as a manager...
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I'm going to be thinking very differently about my role.
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I want autonomy.
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I want to be able to manage my team.
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And I don't want you micromanaging me as the owner.
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So if you struggle to manage managers, this is another reason why maybe just staying centralized because it's harder once you split up your team, once you have diversification of location and you can't be in both spots, you need management.
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And they need to be able to run without you around.
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And so I see two different problems with this.
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One, a very strong owner, very strong presence and personality that is very difficult to work with as a manager.
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I see the other side where...
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They can't even get technicians to stay with them long enough to be able to move into that GM side, like into management.
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So they struggle with retention of technicians that can move into that operational GM role.
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And they struggle with once they have a GM managing them without that manager feeling micromanaged.
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Or people blow up over stuff.
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They make a big deal out of everything.
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No one wants to work for you.
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You're not going to be able to have multiple locations.
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It's going to require you to be in one location in the business all the time.
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And you might grow it to the point where you have managers that can fill in while you're gone.
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But because of your personality and the lack of skill and leadership, that will keep you from ever having a manager that operates the business 100% without you.
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All of the time.
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And so if you have the personality where like, I have to be involved in hiring.
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I have to be involved in if projects go wrong.
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I get really mad or agitated when someone does something that I train them not to do that.
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And you start to micromanage people when they're trying to sell and their close rate drops for a week.
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And you jump in and you try to tell them what to do.
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Like, trust me, this is the hardest thing in growing a business.
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So the thing I hated most about this title...
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is it sounds easy.
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Copy and paste is an easy function on a keyboard.
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Very difficult to do in practice because of this one thing.
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You'll have to become a better leader.
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And a lot of poor leaders...
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A lot of poor leaders in home services skate by by having one location because they're such strong personalities and they micromanage so well.
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They juggle things so well.
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And they are so good at their job.
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They can build a $3 to $5 million business being a micromanaging manager.
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And never delegating fully.
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Always having their hand in everything.
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Knowing every little thing in the business.
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Looking over everyone's shoulder.
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Not being able to retain managers for more than a few years.
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Because everyone gets burnt out working for them.
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That happens.
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And it's a mess.
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Four or five million dollars.
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How could you say that they're not successful?
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Ultimately.
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It's because their lack of leadership that doesn't allow them to be able to do the copy and paste method and potentially groom managers up, be able to give them places to be able to succeed inside the organization and not lose management because people just feel like you're just doing their job for them.
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And they feel like every little thing that you see in the business is a big deal.
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And so managing managers is a very different skill.
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It takes a lot of time, longer than anyone thinks.
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Like, well, I got a very successful business.
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I'll just like put this manager in place.
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As soon as you leave and they actually are the general manager, the dynamic between you and that employee will change.
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And that's not a bad thing.
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They are now responsible for your business.
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You will have to treat them differently.
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I see this mistake all the time.
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And that will be the biggest hurdle to doing the copy and paste method.
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is the ability to manage managers.
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All right, another reason why you should just say one location and grow it up massively is the business struggles when you are gone for two weeks.
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So one really quick way to test this is go on a vacation for two weeks and see if your business actually is systematized enough, is simplified enough, is standardized enough, and see what breaks and just keep fixing that every few months.
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So go six months, leave for two weeks.
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Okay.
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We had these jobs went bad.
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This service did not work out well.
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So-and-so didn't show up to work.
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Okay, great.
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Let's just cut that service out because we're never profitable on it.
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And that was the one thing I got text about while I was on my trip.
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Okay, great.
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Cut out that service.
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Oh man, that means it cuts out 15% of revenue.
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Okay, great.
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Let's spend a little bit of time on developing our lead system and our sales process to be able to make up for that 15%.
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Okay, great.
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Now let's go on a vacation again.
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What breaks?
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Oh, all of a sudden, the transmission keeps breaking this one certain type of truck.
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Get rid of the truck.
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Okay, we're going to upgrade the trucks now to make sure it's more simple for someone to be able to dispatch without me getting involved and having a bunch of breakdowns.
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These are the type of things you will tweak to make multiple locations and someone else running your business.
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a lot easier.
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It's time to lock in before the spring rush.
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And when it comes to locking in, you want to be able to rely on something to hold your business strong, just like this chain.
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That's why at Homeworks, we have the logo of the chain because it's the three links in every home service business, sales, operations, and admin.
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So before the spring rush gets super hot and you have leads coming in like crazy, make sure you're set up inside of a software like Homeworks that can take your business to the next level and allow you to scale this spring.
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Go check out today,
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works all right if you have an expensive office lease or mortgage uh just stay with one location
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You're paying three, four, five, six grand.
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See people that eight, nine, 10, 11 grand a month on an office space.
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There's not a lot of point in copy and pasting because you just double a very large expense by copying the location.
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So if you're immediately, you're going to go get a $5,000 a month lease for five years on a property and you already have one of those, you probably should just stay at one location.
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So for reference, my location, um,
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It was at a farm, and I think they paid $500 to $600 per month for rent because they had the trucks parked there and a storage container.
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It was just parked at a farm, $500, $600 a month.
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That you can copy and paste.
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You can find them easier.
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You're not locked in long-term leases typically.
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If you can do that, copy and paste starts to make more sense.
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If you already have an office team or your spouse is in person doing all the admin side, another reason why the GM Plus makes sense.
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Because if you have a very strong person in admin, like your spouse, who has inherent equity in the business, they're going to run it amazingly.
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And so why split that up?
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Like just keep growing that one location.
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I think that there are inherent...
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risks involved with doing that am i having a key person risk of having one admin person being the reason you build the whole business model around and so that's what i want to be careful of because if you're like well we're good great we're going to go to three million i have a solid my spouse is there with an assistant awesome you better make sure that assistant knows everything in the admin they're gonna be a little expensive but you better make sure they know everything because of something like if you go on a vacation and your office manager is now going
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And now it happens when phone calls come in and that person calls out sick.
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Like we would start creating redundancy just to make sure that if your spouse is out that we can cover.
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But if you have a spouse, like it's just so much easier to grow.
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It's like having a partner in the business doing the admin side.
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And so that's a huge hack.
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And if you already have an office team, why split them up?
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The alternative to this, though, if you wanted to copy and paste, is you could make that your hub, and then the spokes be the smaller locations.
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So if you already have an expensive shop space, and you're like, hey...
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I'm tapping out this current space.
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I would rather just have satellite locations and I have GMs over them.
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Maybe this location is already doing two, three million.
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I would rather just, as I break off sections of my service area and they'd grow to 800,000 a million, one GM that's operationally driven.
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I automate the sales.
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I have admin being handled at my hub and then operational GMs just do those service locations in smaller shop spaces.
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They don't need an office because the hub of the hub and spoke model is doing the command center stuff.
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Very cool.
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So when copy and paste the working GM model makes sense.
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Now, the working GM model is between $250,000 and $750,000 in annual revenue.
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Some people will get confused when I say $800,000 to a million when I reference this.
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The reason I say that is because if you're growing between $250,000 to $750,000, you're in that range of working GM.
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But at $700,000, you're past the $500,000 marker, which is where we talk about going into profit mode.
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And when you go into profit mode, you raise prices.
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You hit capacity, you raise prices.
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You hit capacity, you raise prices.
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And so when we raise prices, inherently, we will start sliding past $800,000, $900,000, a million.
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Like my location, both of my locations that I had this year and my current one location will do over a million dollars in revenue, but we didn't buy more trucks or hire more people.
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We simply just raised prices to the point where now what we would have been doing a few years ago at like $600,000 or $700,000 is now a million dollars because we've been raising prices.
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And so assuming that you keep optimizing your website, optimizing your sales process, you should be increasing the number of leads that are coming in and the number of customers that want your service.
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And if that happens, that means you have demand is higher than supply.
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And if demand is higher than supply, you can raise prices and continue to grow past 750,000 and become very profitable.
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And that is what I would love for every, almost every home service business owner is a business that does $750,000.
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They put that thing into profit mode and that same sized business makes a million in two to three years.
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not hiring more people, not buying more trucks, just doing a million dollars based upon raising prices.
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That's a 20 to 25% profit margin business that runs without you.
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And that's what the whole book is about.
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So if the majority of your revenue is recurring or reoccurring, then you can do the copy and paste working GM model.
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Okay?
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The reason is, is because if you have recurring revenue, I don't need a superstar salesperson to sell big jobs.
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If it's reoccurring, so recurring is it's on a weekly, biweekly, monthly cadence.
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It's scheduled.
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Reoccurring means it happens more than once and periodically, but it's not on a schedule.
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For example, fall cleanups, Christmas lights.
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These are reoccurring services that I don't schedule necessarily your bush trimming for the next three years.
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I'll put it, okay, we're going to come monthly.
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But you know generally that someone's going to have you trim the bushes three to four times a year.
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I'm just going to use an example.
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If a majority of a revenue, i.e.
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over 50%, is this type of revenue and not one-time jobs, I would give you the plus, the go-ahead.
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Does that mean you grow slower?
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Yes.
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I could grow a million-dollar business in one year, no problem, if I did projects and commercial work.
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I also know that commercial work will prevent me from going into profit mode because they're not going to take a 25% price increase.
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They're more price sensitive.
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And I also know that big projects are going to keep me from having recurring revenue that allows me to leave the business and not need a superstar general manager or salesperson.
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So that's why I'm looking for the majority of my revenue to be recurring or reoccurring.
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Second thing, copy and paste working GM model makes sense if every job is simple and standardized and the business can run without you for two weeks.
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So sales, I'm trying to automate.
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As much as possible.
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Instant quotes.
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I'm trying to get as close as possible to automated.
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Operations.
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That's what my GM focuses on.
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I try to create systems for them for hiring, training, onboarding, etc.
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Admin.
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Completely handled outside of the GM.
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The GM is not responsible to answer the phone.
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The GM is not responsible to run payroll.
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Everything on an admin perspective is either handled by my command center in the hub and spoke model where I'm doing a whole bunch of multiple locations down the road or
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on your first and second location, especially just have someone remotely doing this for you.
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So you don't need a big shop, fancy office space.
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You're not locked into salaries during the off season.
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Like if you have a great office person, you pay them during the winter to stick around and do nothing because you don't want to have to retrain someone during the spring.
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Crushes you financially, crushes you.
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So third one, you have a great employee that you want to promote.
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This is the most fulfilling thing I have ever done in my career.
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is see technicians become general managers, and then at Augusta, we allow the general managers to become owners.
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The most fulfilling thing I've ever done, it's also the best attraction tool for talent.
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To be able to look at people on the wall and say, oh yeah, that GM, he started exactly where you were at six years ago, worked in the field for a few years, and now he's a general manager.
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At Augusta, we say, oh yeah, and then these are all the pictures of people that now start their own location and went from general manager to owner.
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Yeah.
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But even if you just had, hey, that person moved into the estimator role, that person moved in the general manager role, like we're all moving up here.
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Like that's the best attract talent attraction tool you'll ever have.
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And if you have a great employee and you know you'll lose them if you don't do multiple locations, because if you as the owner are there, it doesn't make sense to now have another person involved, another body, another overhead person.
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It's like, hey, great.
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This person likes being in the field.
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They're excellent.
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They may be getting a little older.
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Maybe they would like to be able to spend some of their time doing sales or some of their time doing the maintenance on the equipment or some of their time hiring, or they really care about the team.
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Great candidate for a general manager.
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Okay, next, you want to create upward mobility for your team.
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We talked about that.
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You enjoy sales more than management.
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So as you scale past the working GM, most of your time will be spent on managing people.
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If you're in daily operations, most of your time is hiring, creating systems for your team, training them up.
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There's going to be some churn.
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If you start going to $3 million, you have 20, 30 employees.
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Every week someone's quitting or someone needs to be retrained, etc.
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That's just how it is.
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If you enjoy sales and you would rather go to door knocking and door hangers and run ads and that's your specialty, then copy and paste makes a lot of sense because the hardest part is getting it up to profit mode.
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They get it past $500,000, find a GM, put them in place, and then you walk away from that operational and that management side and you focus on selling.
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So if you love sales, if you love the hunt, if you just love doing follow-up phone calls and the chase of a new job is the thing that turns you on, you might just want to stick with doing copy and paste so you don't get wrapped up in daily operations as the GM at a facility that's not growing to 1.5, 2 million.
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You're trying to train up your sales manager, trying to train up people in the office, create systems for an operations manager.
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You just get to two and a half, 3 million.
289
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Like you might rather just not deal with that.
290
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automate sales, delegate admin, and then find a GM that can run six to eight employees at one location just doing operations.
291
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They don't have to be a unicorn, know how to sell, how to do a whole bunch of other things, how to be able to do QuickBooks and how to answer the phones.
292
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You don't need them to do those things.
293
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You just need a great technician that cares about the team, is self-motivated, is money motivated, and knows how to manage their schedule.
294
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Okay.
295
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Last one, when copy and paste working GM makes sense.
296
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If you're able to create a remote command center for admin.
297
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So when I say that, you don't necessarily have to do it yourself.
298
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This also means you could, like I said before, one of the callers that came in is you could take your accounting, your taxes, your payroll, and go get home service CPA to do it.
299
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You could contact, there's lots of companies like Jill's Office, Ruby.
300
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Oh, what's the other couple?
301
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Call Boss.
302
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There's a whole bunch of other companies that will just take your calls at like $2 a minute.
303
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Like, that's so expensive.
304
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That's $120 an hour.
305
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No, you know what's a whole lot more expensive?
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It's paying someone $20 an hour where I know that 75% of their day is not actually doing work.
307
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It's just all the time in between when they do work.
308
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20 calls a day, average call time, four minutes.
309
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That's 80 minutes.
310
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What are you doing for the other six hours?
311
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What?
312
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Seven hours and 40 minutes.
313
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No, sorry, six hours and 40 minutes.
314
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Like, that's like 15% of your day is actually spent on the phone.
315
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What are you doing with the other time?
316
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Like, and it's hard to, you know, tell them what to do when it's off season.
317
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There's no calls coming in and I've finished the inbox.
318
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And you're still paying them.
319
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And so I do not think that having someone remote charging by the minute is a bad move until you get to 1.5, 1.6.
320
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1.8 million in revenue, and you can actually keep someone busy full-time all the time year-round.
321
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That's when I would give the okay to actually go get an in-person office person or pay someone full-time.
322
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I'm willing to take the hit on the off-season because I want to keep them during the spring.
323
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But if you have a remote command center, i.e.
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your admin is being handled by someone that is remote, you don't have to get a fancy office space, you don't have to pay someone's salary, they're remote, then I'll give you even more, far more.
325
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far more latitude to go ahead and copy and paste your model.
326
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That's the hardest part.
327
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I talk about automating sales as much as possible.
328
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Instant quotes, we'll talk about this more later today.
329
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Instant quotes, I want to automate sales as much as possible.
330
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I want to get over the phone estimates as much as possible.
331
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Admin, I'm trying to get remote.
332
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I'm trying to get permanent rates.
333
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I'm trying to delegate to specialists like an accountant or a bookkeeper.
334
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I'm trying to get rid of all that stuff so that I can narrow the focus of my general manager to just hire good team members and make sure they get the work done efficiently.
