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Two companies.
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I don't know if it's better to, they essentially, they do the same exact thing, just different names.
3
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And they're two unique businesses, technically, but I don't know if we should combine them or not just to I don't know if it's possible to like differentiate them at all.
4
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So outside of the name being different, what is different about the businesses?
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Nothing.
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Okay.
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Okay.
8
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Yeah.
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Why don't we combine them?
10
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That's something I got to figure out.
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It's my father's business.
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And then we just ended up buying this other one.
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And so instead of merging them, right now, confusing.
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Yeah.
15
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Yeah, totally.
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100%.
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I think regardless of how you do your software, let's talk more about the business side.
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So what's revenue for both of them?
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For SOMAX, the original one, it's like 1.9.
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And I think SMART is around like 1.5, 1.6.
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Okay.
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And are they serving the same service area?
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Yeah.
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Um, roughly, roughly we same services, rated same services, except they have hardscaping and, uh, commercial snow plowing.
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How much of that business of the 1.5 is those two services?
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Most of it.
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Got it.
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So you could make this two different, keep them as two different businesses, have the one being just these two services, and then this other one being a different company, for example.
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I would probably take the other one and make it a division of SOMACs.
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Right.
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So to make the brand transition easier, I also think like in general is assuming now you're combining this is a merger.
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I would I would change the brand over to one.
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Also, from a valuation perspective, did you acquire the other one theory or like is that just like he's given it to you?
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Like what's that look like?
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No, no.
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My father still owns both of them.
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He just bought smart recently a couple of months ago.
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Got it.
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Okay.
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So smart was outside.
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Your father now has bought this other business.
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Okay.
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Got it.
44
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Okay.
45
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Correct.
46
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Is it a lot of commercial, the smart one?
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Smart does have a substantial amount of commercial in not too many.
48
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Yeah, not too many residences.
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Right.
50
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And is Somax mostly residential or similar mix?
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Somax is a lot of recurring customers every year sign up a good amount of things in their contracts.
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And so, yeah, mainly residential.
53
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Okay, I would really encourage trying to bring it under one software.
54
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Even if you did like SomaX, smart like a division of SomaX in the logo, for example.
55
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But like I would go to the short term pain of switching all the contracts over and the branding, et cetera.
56
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So that way when someone picks up the phone, they don't have to split between two, like it's a pain in the butt.
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The reason I know like this very well is we did three different softwares before switching to Copay.
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for Augusta.
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So we have to look at a location, like which one are we going to?
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And it was a pain in the butt.
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So I would really recommend going through the pain of bringing the brand together.
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I also think from a valuation perspective, a $2 million business gets a very different valuation than a $4 million business.
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And so immediately by doing this merger, you will likely create about $300,000 to $500,000 of enterprise value just by doing the merger, like actually bringing them together under one entity.
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So I would strongly recommend that from a business perspective because when you start talking about multiple millions of dollars in revenue…
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your play is bringing those together, then you have economies of scale.
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You don't get the economies of scale if you don't bring the brands together because you're gonna have two different software subscriptions, different payroll services, two different entities, two different bank accounts, everything becomes multiples.
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And so I would recommend trying to like merge the brands and then bring one into one software.
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I would, I don't care if you use Copilot or not.
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Like I would just recommend that from an operational perspective.
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Yeah, I'm at a point to where I'm in year two doing this full time.
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I'm getting way more customers.
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I'm turning people away.
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And the biggest hurdle I'm facing right now is I just don't know what to do to hire the first person.
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There's two things.
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One, if you're doing so many leads that you're turning people away, I would highly recommend massively increasing your prices.
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So at least you can capitalize on profits of the existing state of the business.
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Now, going forward to unlock more growth, you're gonna have to hire someone.
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In terms of finding out how to do that, ChatGPT is your friend, your state or where you're at.
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I'm doing this service, what do I need to do to hire someone?
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It'll give you the exact list.
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You know, something like QuickBooks or Gusto, you're gonna pay like nine, $10 a month per employee, plus about 50 to $100 for payroll.
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So I would start there.
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They'll make it really simple for you to click through and like add in an employee.
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But this is a function of just finding the information.
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And Chat2BT is like dialed for this.
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I was just wondering like what would be the best way to like kind of figure out what the best marketing method would be in my like area based on like the customer acquisition costs and then like the churn rate of the like person that I get from certain marketing.
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Yeah, like the second part is the hard part, like figuring out and testing different marketing channels and figuring out the customer acquisition costs simply comes down to just tracking, right?
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Like what's the lead source?
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Where did this person come from?
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And I track them over time.
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The second part that you mentioned is harder because now I have to actually track them for some period of time and determine their turn.
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Right.
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That part is difficult.
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I wouldn't focus on that if I was you, Ethan.
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Honestly, it is a valuable KPI.
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But I think what I would focus more on is getting the customer, understand the customer cost and then as a whole fixing my my onboarding.
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Right.
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So it's like I'll just use this as an example.
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Like when you get a new customer, the same way I'm talking to all my quote unquote new customers to all of you, there's an onboarding roadmap.
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I would dial in your onboarding roadmap.
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Right.
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Like what happens after a customer accepts the estimate?
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What happens a week later?
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Do they get a survey?
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When do I ask them for review?
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When do I upsell them?
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Because I know when I upsell someone, it's like, I'm making more money.
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No, I'm trying to serve them more and solve more of their problems.
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And by doing that, I will reduce churn.
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It's like, instead of asking, like, I want to measure every little aspect of who churned and what lead source did they come from?
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I'm just focused on getting more leads.
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converting more of them, and then reducing churn as a whole.
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Because I know if I do that, it'll make all of my numbers better.
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I would focus on that first.
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When you get down the road, like we're talking a million plus dollar business, then start thinking, okay, and now I'm going to track where the lead came from and how long they stick with me.
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I just know that the benefit to the business will be greater if you just focus on overall how do I reduce churn.
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I sell them more things, I make my product and service more sticky, I have better customer service, I have better quality, I communicate with them faster.
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Boom.
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I would focus on those instead of tracking who did this churned client come from as a lead source.
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Okay, yeah, that makes sense.
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And then when I'm putting money into certain marketing things, should I streamline and just go for one marketing thing or should I try to diversify the money that I'm putting into certain things?
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Yeah, like if you have a very clear way of tracking every single channel, I would do them all at the same time.
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The challenging part with that is most of us don't.
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Like you usually don't have a different landing page for people on Facebook, a different landing page for people that scan a QR code from a door hanger, a different landing page or form.
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Like most of us don't.
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We send them to our website and then they're filling out forms or they're calling us or they're leaving a message or whatever.
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So like…
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I usually like to go one at a time, but you got to be careful when you do one at a time because now you're actually affecting the seasonality.
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So if I did door hangers last month, I don't know how I'm going to crush it.
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And I switch over to Facebook ads this month and it drops like, oh, Facebook ads don't work.
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No, last month the grass was growing and now it's not.
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So I would be very careful if you're going one-to-one-to-one to be very mindful that seasonality is the biggest driving factor of your customer acquisition cost.
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It is not the channel.
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If you do a really bad ad for mowing grass, when the grass is growing at like four inches a day, you're going to sell stuff.
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That same ad could absolutely underperform and be 10 times more expensive in terms of customer acquisition cost a few months later.
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And so seasonality is the biggest driver.
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Yeah.
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Asterix, I need to know which one's working better.
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So just be careful with the way you're tracking.
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The best way many times I find is if you can segment.
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So for example, if you have a QR code on a door hanger, I do a whole bunch of door hangers.
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At the same time, I'm running Facebook ads that are driving to my website.
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And on there, I can track the UTM or I just simply look at where they come from and you can track it through your pixel.
144
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So the more you can track, the better.
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But I would say as a whole, people get so into this tracking thing, they end up never actually just doing the thing, which is like, go deliver the door hangers, go run the ads.
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So I would look at a blended average if you need to, Ethan, if you were going to do like five different channels, look at a blended average of your customer acquisition costs and ask every customer, where'd you come from?
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You're going to get a pretty good generic, at least idea of like, oh, everyone's saying they saw me on Facebook.
148
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Okay.
149
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That seems to be working.
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When I run a formal test next year, maybe that's what I'll test first.
151
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All right, everyone.
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It is 12 o'clock my time, and I hope you all have a fantastic rest of your afternoon, a great Memorial Day if you live in the United States of America, and we will see you next time.
1
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Two companies.
2
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I don't know if it's better to, they essentially, they do the same exact thing, just different names.
3
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And they're two unique businesses, technically, but I don't know if we should combine them or not just to I don't know if it's possible to like differentiate them at all.
4
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So outside of the name being different, what is different about the businesses?
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Nothing.
6
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Okay.
7
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Okay.
8
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Yeah.
9
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Why don't we combine them?
10
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That's something I got to figure out.
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It's my father's business.
12
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And then we just ended up buying this other one.
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And so instead of merging them, right now, confusing.
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Yeah.
15
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Yeah, totally.
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100%.
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I think regardless of how you do your software, let's talk more about the business side.
18
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So what's revenue for both of them?
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For SOMAX, the original one, it's like 1.9.
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And I think SMART is around like 1.5, 1.6.
21
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Okay.
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And are they serving the same service area?
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Yeah.
24
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Um, roughly, roughly we same services, rated same services, except they have hardscaping and, uh, commercial snow plowing.
25
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How much of that business of the 1.5 is those two services?
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Most of it.
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Got it.
28
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So you could make this two different, keep them as two different businesses, have the one being just these two services, and then this other one being a different company, for example.
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I would probably take the other one and make it a division of SOMACs.
30
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Right.
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So to make the brand transition easier, I also think like in general is assuming now you're combining this is a merger.
32
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I would I would change the brand over to one.
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Also, from a valuation perspective, did you acquire the other one theory or like is that just like he's given it to you?
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Like what's that look like?
35
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No, no.
36
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My father still owns both of them.
37
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He just bought smart recently a couple of months ago.
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Got it.
39
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Okay.
40
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So smart was outside.
41
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Your father now has bought this other business.
42
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Okay.
43
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Got it.
44
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Okay.
45
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Correct.
46
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Is it a lot of commercial, the smart one?
47
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Smart does have a substantial amount of commercial in not too many.
48
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Yeah, not too many residences.
49
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Right.
50
00:02:12.595 --> 00:02:15.636
And is Somax mostly residential or similar mix?
51
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Somax is a lot of recurring customers every year sign up a good amount of things in their contracts.
52
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And so, yeah, mainly residential.
53
00:02:25.722 --> 00:02:29.804
Okay, I would really encourage trying to bring it under one software.
54
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Even if you did like SomaX, smart like a division of SomaX in the logo, for example.
55
00:02:39.187 --> 00:02:43.849
But like I would go to the short term pain of switching all the contracts over and the branding, et cetera.
56
00:02:44.109 --> 00:02:48.451
So that way when someone picks up the phone, they don't have to split between two, like it's a pain in the butt.
57
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The reason I know like this very well is we did three different softwares before switching to Copay.
58
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for Augusta.
59
00:02:54.294 --> 00:02:56.835
So we have to look at a location, like which one are we going to?
60
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And it was a pain in the butt.
61
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So I would really recommend going through the pain of bringing the brand together.
62
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I also think from a valuation perspective, a $2 million business gets a very different valuation than a $4 million business.
63
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And so immediately by doing this merger, you will likely create about $300,000 to $500,000 of enterprise value just by doing the merger, like actually bringing them together under one entity.
64
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So I would strongly recommend that from a business perspective because when you start talking about multiple millions of dollars in revenue…
65
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your play is bringing those together, then you have economies of scale.
66
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You don't get the economies of scale if you don't bring the brands together because you're gonna have two different software subscriptions, different payroll services, two different entities, two different bank accounts, everything becomes multiples.
67
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And so I would recommend trying to like merge the brands and then bring one into one software.
68
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I would, I don't care if you use Copilot or not.
69
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Like I would just recommend that from an operational perspective.
70
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Yeah, I'm at a point to where I'm in year two doing this full time.
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I'm getting way more customers.
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I'm turning people away.
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And the biggest hurdle I'm facing right now is I just don't know what to do to hire the first person.
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There's two things.
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One, if you're doing so many leads that you're turning people away, I would highly recommend massively increasing your prices.
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So at least you can capitalize on profits of the existing state of the business.
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Now, going forward to unlock more growth, you're gonna have to hire someone.
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In terms of finding out how to do that, ChatGPT is your friend, your state or where you're at.
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I'm doing this service, what do I need to do to hire someone?
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It'll give you the exact list.
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You know, something like QuickBooks or Gusto, you're gonna pay like nine, $10 a month per employee, plus about 50 to $100 for payroll.
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So I would start there.
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They'll make it really simple for you to click through and like add in an employee.
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But this is a function of just finding the information.
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And Chat2BT is like dialed for this.
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I was just wondering like what would be the best way to like kind of figure out what the best marketing method would be in my like area based on like the customer acquisition costs and then like the churn rate of the like person that I get from certain marketing.
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Yeah, like the second part is the hard part, like figuring out and testing different marketing channels and figuring out the customer acquisition costs simply comes down to just tracking, right?
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Like what's the lead source?
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Where did this person come from?
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And I track them over time.
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The second part that you mentioned is harder because now I have to actually track them for some period of time and determine their turn.
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Right.
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That part is difficult.
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I wouldn't focus on that if I was you, Ethan.
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Honestly, it is a valuable KPI.
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But I think what I would focus more on is getting the customer, understand the customer cost and then as a whole fixing my my onboarding.
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Right.
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So it's like I'll just use this as an example.
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Like when you get a new customer, the same way I'm talking to all my quote unquote new customers to all of you, there's an onboarding roadmap.
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I would dial in your onboarding roadmap.
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Right.
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Like what happens after a customer accepts the estimate?
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What happens a week later?
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Do they get a survey?
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When do I ask them for review?
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When do I upsell them?
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Because I know when I upsell someone, it's like, I'm making more money.
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No, I'm trying to serve them more and solve more of their problems.
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And by doing that, I will reduce churn.
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It's like, instead of asking, like, I want to measure every little aspect of who churned and what lead source did they come from?
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I'm just focused on getting more leads.
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converting more of them, and then reducing churn as a whole.
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Because I know if I do that, it'll make all of my numbers better.
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I would focus on that first.
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When you get down the road, like we're talking a million plus dollar business, then start thinking, okay, and now I'm going to track where the lead came from and how long they stick with me.
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I just know that the benefit to the business will be greater if you just focus on overall how do I reduce churn.
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I sell them more things, I make my product and service more sticky, I have better customer service, I have better quality, I communicate with them faster.
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Boom.
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I would focus on those instead of tracking who did this churned client come from as a lead source.
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Okay, yeah, that makes sense.
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And then when I'm putting money into certain marketing things, should I streamline and just go for one marketing thing or should I try to diversify the money that I'm putting into certain things?
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Yeah, like if you have a very clear way of tracking every single channel, I would do them all at the same time.
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The challenging part with that is most of us don't.
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Like you usually don't have a different landing page for people on Facebook, a different landing page for people that scan a QR code from a door hanger, a different landing page or form.
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Like most of us don't.
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We send them to our website and then they're filling out forms or they're calling us or they're leaving a message or whatever.
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So like…
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I usually like to go one at a time, but you got to be careful when you do one at a time because now you're actually affecting the seasonality.
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So if I did door hangers last month, I don't know how I'm going to crush it.
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And I switch over to Facebook ads this month and it drops like, oh, Facebook ads don't work.
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No, last month the grass was growing and now it's not.
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So I would be very careful if you're going one-to-one-to-one to be very mindful that seasonality is the biggest driving factor of your customer acquisition cost.
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It is not the channel.
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If you do a really bad ad for mowing grass, when the grass is growing at like four inches a day, you're going to sell stuff.
135
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That same ad could absolutely underperform and be 10 times more expensive in terms of customer acquisition cost a few months later.
136
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And so seasonality is the biggest driver.
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Yeah.
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Asterix, I need to know which one's working better.
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So just be careful with the way you're tracking.
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The best way many times I find is if you can segment.
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So for example, if you have a QR code on a door hanger, I do a whole bunch of door hangers.
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At the same time, I'm running Facebook ads that are driving to my website.
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And on there, I can track the UTM or I just simply look at where they come from and you can track it through your pixel.
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So the more you can track, the better.
145
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But I would say as a whole, people get so into this tracking thing, they end up never actually just doing the thing, which is like, go deliver the door hangers, go run the ads.
146
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So I would look at a blended average if you need to, Ethan, if you were going to do like five different channels, look at a blended average of your customer acquisition costs and ask every customer, where'd you come from?
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You're going to get a pretty good generic, at least idea of like, oh, everyone's saying they saw me on Facebook.
148
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Okay.
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That seems to be working.
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When I run a formal test next year, maybe that's what I'll test first.
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All right, everyone.
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It is 12 o'clock my time, and I hope you all have a fantastic rest of your afternoon, a great Memorial Day if you live in the United States of America, and we will see you next time.
