Scaling a Generational Business | Podcast Ep. 127 | Toolbox for the Trades

Jason Rich, you are the partner and GM at Paradise Air Conditioning in Broward County, Florida. I am so excited to have you on the podcast today. Welcome.

Thank you so much, Jackie. I really look forward to joining my fellow service titan partners here and service titan associates to chat through some. Some current topics.

Yeah, I'm psyched to have. You are in great company. I want to dig into your story as much as we can, but we're going to kick off the show the way we do every single one, which is how did you get into the trades?

Cool. So for me, it all starts with dad. At about 17, my dad entered the trades and he quickly climbed his way up the ladder within his local businesses. Went from, you know, running parts to becoming an apprentice to being a field supervisor or foreman on his projects. And quickly he knew that if he didn't find his way into his own space, creating his own business, that he felt like he was going to hit a limit. And so flashback myself. 15 years and first day of summer rolls around as a young boy, and dad walks in the room and he looks at my oldest brother and then he looks at my middle brother. And after seeing crickets and wondering who would come to work with him that day, he pointed over at me and said, hey, you're going to come with me. And so it was really cool to just as at a young age to be involved with my dad and in the family business and get a feel for what the trades were all about. And so for me, that turned into a little bit of a domino. I then found love for it. I wanted to be there every summer. I wanted to be there when I could after school. And so I quickly got involved in all those different areas. And so as I got older and as I finished grade school, I knew that I wanted to go to university, but I, I felt that the trades had a lot more to offer. And so I took a stab at university and quickly made a switch and a commitment to say, hey, I'm going to go back and finish out my journeyman's license and I'm going to become a licensed tradesman within the plumbing field. And I want to continue to make an impact.

Nice. So you actually gave college a try, university?

Yep. I went to Florida Atlantic University here in Boca Raton, just outside of Broward county. And I went there for about six months. And I quickly said, hey, I'm going to switch gears here. I want to jump over to Atlantic Technical College. I want to finish out my journeyman's course within the plumbing trade, and I wanted to continue to apply all the knowledge I had, you know, back at, back at the business at a young age, I had entrepreneurial mindset. I really wanted to work whenever I could. I was working whenever I could at paradise during the summers. I would go there two to three days a week after school and I was working at the local grocery store. Whenever I couldn't be at Paradise, I just, I was the type of guy that just always wanted to be working. I knew if I was working at a job and putting money away and investing that I, I could make it to, you know, where I wanted to be and accomplish the things I, I did.

Yeah, you and I have that in common. Actually. I was the same way. I, the minute I could work, I started working. I didn't have a family business to go on to, but I wonder if that's why you and I got along like peas and carrots when we first chatted. So I'm so happy that you brought up dad because when we first spoke you told me this incredible story about how you connected really with Service Titans family. And I was wondering if you could share that again with the audience here and tell me a little bit about that.

Yeah, awesome. Cool. So like we talked about, I was part of the family business, I was working out in the field and I didn't have too much involvement in the internal operations yet in my early career at Paradise. And you know, you flashback about two years ago and the software we were using as a business was sunsetting. They were getting ready to go ahead and they had exited. Another company had acquired them and they were going to offboard us off the software we had used for 25 years as a small company. And now we had a decision to make. And so we sought after many products. We looked for many different platforms that would meet our needs. And Service Titan's industry leading recognition and ability to just provide all ends really drove my decision to take this platform on and say, hey, this was going to be the future support to our business. And so we took on Service Titan in September of 2021. We got it built out, we got boarded and everything was very pleasant once we went on board. And so Service Titan sent us off to Pantheon. That was their conference that they have each year. And I got a chance to listen to one of the partners and owners, which Zara speak about his story of his dad. And, and it really hit me. He talked about how he would watch his dad leave for work each day and come back each day. And once he got done doing all the physical attributes of this tough job he would then have to do, you know, the business side, he had to figure out the paperwork and he had to figure out all the different ways to send out the estimates. And he had a, you know, just a burden for dad to say, hey, I want to make this a better place. And so, you know, watching my two older brothers not flying find an interest in the family business, not really want to be there. That really led me to want to be there for dad. I always told my dad, hey, you gave me everything, you put me through, you know, private schooling, you brought me up in a good family. I want to give it all back to you. And so I actually ran into Ara while I was at Pantheon and I told him how my story, you know, was similar to his and how his impacted me. And he was so awesome. He said, hey, let's chat. I want to talk further about this. And so we got a chance to just talk to each other and spend some one on one time. And Ara has been nothing but amazing in communications availability and truly wanting to help our business grow within his platform. Service Titan has just really been an awesome experience for us.

I just love how you had that connection with Ara's dad. Ara's dad. Comparing that with your dad and how your relationship with him, because that's also one of the reasons why I work at this company, right, Is because I'm so that founder story. For anyone who doesn't know, Ara and Vahe are founders, both of their fathers were in the trades, they put their sons through incredible school opportunities. They were planning to get jobs in tech and book, whatever, and Ara and Vahe met at a Armenian student ski retreat or something, and they decided, hey, before we go off and do our own tech thing, why don't we build software for our dads? Blows my mind how emotional they still get about that origin story. And I think a lot of our customers resonate with it. So when you told me that, I was so excited to get the chance to talk about it on air. So thank you for sharing.

Yeah, no, I really, you know, there's such one thing we talk about a lot right now is what is our why? Right? And we're in our offices and we're in our meetings and our get togethers with our techs and we, we really challenge everyone to say, hey, what is. What is your why? You know, and we don't necessarily publicly portray it or we do and. But it really just gives us all a chance to remember why we're doing what we're doing, why We've pushed so hard and so you know, just super awesome to watch not only you know my alignment be with my dad and him being a real big of my why, but to be able to watch ARA and build just such an amazing platform and that be the driver is just to me just so awesome.

He is, he's your, he's part of such a big part of your why. And all of last year 2022 you look to partner with private equity to give your dad the gift of stepping back from the business. So I would love to learn a little bit about that journey and what made you chose, what made you choose to partner with your current partner, legacy partners. How many times can I say partner in one sentence? Sorry, go ahead.

Yeah, so you know as, as you mentioned Jackie, we after 31 years of being in business and actually really just pushing it and watching my dad build the foundations coming along his side and you know my mid years in junior management and then senior management, we really wanted to create a legacy opportunity. We wanted to be against the statistic. We wanted to produce a second generation business. We wanted to get him to see his finish line and that's what I had partnered with him on. And I made a promise to my dad that said hey, in 2020 we're going to make a five year plan that by 2025 we're going to get you to the finish line and we're going to make sure that we carry on this, this great name not only for your customers, not only for the families but the employees and everybody else that's been along for the ride. So what really drove me about legacy is one from the get go they came in person, they sat down, that, that was very important to me. It was a face on conversation but it wasn't your traditional equity partner Legacy purposes to leave the operational partner should it line up with both parties goals at the local level. And it was prior, you know, prior to the transition and I'm just going to back up real quick. Legacy purposes to leave the operational partner at the local level that was there prior. They do not insert an operational gm, they do not take over and change the way the business is ran. And so that was very something we were very fond of. We, we wanted to create a world where I could still feel like I was making that second generation impact and keeping it as a, as a medium sized family business. And we didn't want to disrupt our customers experiences. We didn't want to disrupt the 55 families we had working for us at the time. And you know, we really wanted to preserve that. A couple of the other things that I really am fond of about the Legacy team is we have a power team of really like minded individuals. It is a carefully selected partnership. Each time a new partner is chosen, the values of the partner at the local level and Legacy have to align to really want to preserve culture, customer experience, business experience. And so all of these values really lined up with what me and my dad wanted to accomplish. And so I really look forward to the opportunity to carry forward, you know, my dad's legacy along with Legacy service partners and, and create a, you know, a second generational and hopefully onward to third and fourth generational, you know, local business one day.

Awesome. So the big draw for you with Legacy, they were going to let you stay in the operations seat. They weren't going to just bring someone in and have them disrupt everything that you had already built. Because you get 10 million. I know you're at 10 million now, I believe. Right. Or when you partnered with Legacy, you were at 10 million.

We had, we were doing about 10 million top line when we partnered with Legacy. This year we'll be on track for, I think we'll clear 12 and a half million. We might see 13 to 14 coming just the year after close within the first few months. Really pushing hard for another big growth year. But yeah, it was really, really important to us to find someone that would allow our employees to not feel like they had just received, you know, a large shift that would allow me to continue to lead this company to the, to the areas that we're headed in, the areas we're growing within, and really to, you know, preserve that family culture, feel and experience as we grow and go into the future.

Yeah, you know, this kind of goes very nicely into my next question because PE is such a hot topic. I think I'm talking with almost every guest about PE right now. So what changed?

Yeah, for sure. So I think the business has improved in a lot of ways. You know, ultimately the first initial is, you know, a little bit of a concern, you know, drawback to say, hey, you know, what's going to be different here? And for me, I just, you know, really bullet pointed a few of some high level positive. And I think foremost and first and foremost for me is we have clear defined direction of where the company's heading and what goals we want to accomplish. And so I think that that one alone is just so important. Right. Legacy came alongside, I said, hey, this is what you're capable of. You're a $10 million or $20 million company producing 10 million in results. And we can flip that quickly. Let's get our direction set, let's figure out where we want to be on a 1, 3, 5 and let's really start to set out the path. Obviously that's pretty high level. Just to get a little more granular. The platform they have really designed streamlined process for improving accounting hr, vehicle and equipment acquisition and retention, credit cards and fuel management is another big issue we deal with within the trades as we scale from reducing our cost within software, even at the service titan level, to other levels to increasing benefits and reducing costs within our equipment, which is a very popular conversation right now as SEER 2 is being introduced and as there's obviously a large increases with inflation and increased rebates and reduced costs within consumer financing. And so whether we look at the really large buckets from really cleaning up our accounting system, helping us accomplish accrual based accounting the way it should be done, really making sure that we're maximizing our opportunities within the accounting realm to switching over to new and better health insurance plans, to getting to new benefit packages, to being able to acquire vehicles. I know that's a tough one right now for a lot of people. They, they provide seamless solutions there and, and they've really just, they've come alongside and they've provided a lot of the support that us as contractors struggle with. And so that's what's so awesome about this partnership is we are operationally strong and we understand how to maximize the use case of our teams and the outcomes we got to produce. But when we get into the business administrative side, it's, it can get tough for some of us. We don't always come from that background. And so we're excited to have them there partnering with us to make.

This is a theme that comes up in the show all the time, is I was a tech, I was a plumber, I was an H Vac guy, I knew how to do that trade. But now the business admin side of things, and especially if you have these big lofty goals to grow like you do, getting that extra support is something that can be really just kind of make things a bit easier, wouldn't you say?

Yeah. And one of my favorite things is when we get into these owner operator roles, we have all these different divisions within our companies and they're all looking for a leader and they're all looking for someone to help them grow and take their career forward. And so it's been very exciting to watch our accounting team Go from relying on management and myself to deliver them growth opportunities and kind of pave the their career path to there being an 8 to 10 person accounting team with a VP of accounting to a director of accounting, to, you know, local regionalized controllers. And so now, you know, you look at my accounting team, they have someone to call, they have someone to, to reach out to, someone to learn from, someone to grow, you know, from. And so you look at each area of the team and one thing that's been super exciting is they feel that they now have a stronger resource, you know, to grow with. And I've even had some of my team members come back and says, Jason, it seems like we've made a light years jumps ahead overnight. And so when I hear those type of feedbacks, you know, obviously it definitely makes us feel like we made a win decision. And I think the, the partnership as a whole wins when, when we all see it like minded.

All right, so I want to rewind a bit and go into your role because your other brother said no. And you were working with your dad at paradise since you were a teenager, started at the field level, eventually made your way to the internal operations. The first things you sought to enhance was your company's marketing efforts. So tell me a little bit about that.

Yeah, and so just like you said, I, it started off, you know, young teenager years, working with dad in the free time to going into after work and you know, working the weekends to coming out of college and jumping right into that full time involvement. I always knew if I could make my impacts internally that naturally I could get, you know, out of the field. And whereas my dad comes from a, you know, a wrench turning background, I loved data, I loved marketing, I loved computers and technology, I loved all of the framework of what really unlocks a business. I knew that we had a rocket ship, it was just waiting to take off. It was, it was on the fueling grounds and it needed to get fueled up and whether, you know, I would refer to as a gold mine that just hadn't been tapped into yet. And there was so much just opportunity. And so I, I really started to make an impact by saying, hey, let's start to tap into the marketing. For 25 years, the company spent under 1% of its gross revenue on marketing. And so it was growing business. But it was strictly, it was word of mouth, it was referrals, it was not an Internet driven presence, it was not a marketed driven presence, a branded driven presence. And so I came, you know, we come forward to, you know, 2021 and we look at these years growing at 25 plus percentiles year over year as this company really starts to grow and we've pushed this marketing budget into closer to about the 4 or 6 percentile. And so we've really got to enjoy watching where being a really wanting to brand this business and being a leader and a known player in the South Florida plumbing and H vac market. When we came into the business we found that there was no online presence within Google. We were not synchronized across all platforms within the web. We weren't doing any pixel tracking, any email target marketing, we weren't text messaging marketing customers. We didn't have the subscription model set up yet. We were missing a lot of the pieces. It was really an enjoyable time because right around 2010 to 2012 Google my business was really in a boom state. Google Local services wasn't out yet. GBM was really such a foundational piece and a lot of players hadn't mastered it yet. And so it was really cool for us to come in and get onto some of these movements at the early stages. Acquiring Google Reviews was always important but we hear about it more now in these last two to three years. But 10 years back maximizing Google Reviews was like you were the foundational setter. And so like it's just been really an awesome experience to not just within just marketing from an external presence, but to just bring technology to work towards our favor in this entire business. From inventory management to vehicle tracking management, to updating the CRM to really just enhancing the way we do marketing and branding as a whole. All of it really was the framework of what allowed us to get to this point. And I think that really just opened up such opportunity for this business to scale because the foundations of it were really built off reputation. It was built off delivering 100% customer satisfaction. And so when we fueled that fire, the reputation still to this day is near perfect. It's 30 years A plus rated, it's 1500 five star reviews. It's going to have zero complaints filed against this business. And so when the foundation is clean and you got such a strong brand and logo and story, I think marketing just naturally becomes that much easier and that much more exciting watching the successes.

Incredible that you had so much business coming just from word of mouth and just from referrals before you really started gunning the marketing engine. And you know, on one level you could see it as oh, we weren't taking advantage of all these things. But just like you said, we had that really solid foundation of a good reputation. We know what we're doing operationally. So that way, when you revved the marketing engine, I don't know why I'm making a car metaphor, you were able to really take advantage of that. Another big part of where you see yourself. Right. Like where you things like many guests on this podcast, you believe in. So what are some data points that you're most focused on as you seek to grow the business from 10 million to. I think you said 50 million the last time we chatted.

Yeah. And so I think at a high level, right. We all have service titan at our fingertips. That's what makes this conversation, and this, just this conversation even possible is we have made a choice to choose the industry leading software. The industry leading software knows that data is king. And so it's provided you every avenue of data that you could have access to. And so here at home in 2023, we really are putting a return and strong emphasis on the call center. The call center is the heartbeat of our operations. It's measuring the results that flood in from marketing. They flood into the call center and then we are ensuring the output of the results is obviously hitting par, achieving above. And so as we come into the call center performances this year, we're really looking into whether it's most calls taken, most booked calls, whether it's most membership sold or whether it's call average handling time. And you know, obviously producing a five star experience each time at a whole. We just want to really make sure that we haven't lost sight of the call center. A lot of people are focused on, hey, where are the marketing funnels at? What are we spending on marketing, where are we spending it? And those are very important. A lot of people are focusing on, hey, what is a technician's revenue and what does his outcomes look like. But we really got to stay true to that. They're that first experience, they're going to be the first and in our world, the last. And so they're really going to be the one to set the framework for a successful conversion for our technicians. And without the call center, we are dead. And so, you know, we're really, really, really putting a lot of, of heart, a lot of focus and a lot of our time from a leadership standpoint into making sure our call center is focused. Our marketing spend and outcomes are very important as well. You know, what marketing platforms are providing the best results is definitely a conversation that's highly discussed right now from gls, PPC being a leader to Facebook or Yelp being A leader. There's a lot of different opinions there. I think what type of marketing is relevant in 2023 is really an important conversation. I think there's, you know, even been another shift. I think we really gotta be paying attention to how are people using social, how are the younger generation tapping into who they're finding and what is their market? I was introduced over the weekend to the concept of short, short play video, short play ads. We're all getting introduced to ads all day long as we're watching little videos and as we're scrolling through, you know, reels. And so I think making sure we're maximizing the shift is really important before we look at the, you know, the everyday ones that we hear about cost per lead and cost to acquire a new customer and retention, retention and life cycle of a customer. So I really think in marketing specifically we're, we're looking at, hey, what is providing the best results, what is relevant and where do we need to shift right now to be at the forefront of what this next generation is going to need when picking their home service provider. And then on the technician side, service titan does just such a great job of showing you revenue averages, conversion rates, customer satisfaction. They really are doing just such a great job at keeping that data at the forefront, accessible to the technician, accessible to leadership. And so you asked me as a whole, hey, what is data is king and what data points are you focused on? And so I hope that just some of that framework help set the picture of if we focus in these areas, I truly believe we can take any company from whether it's 1 to 5, 5 to 10, 10 to 20 or 10 to 50, and I truly believe we'll get to, to be a, you know, just an example of walking out.

That recap your phenomenal answer reels. A few episodes ago I had, I had Armando from Plomero in Phoenix who has gone viral on TikTok and thinking about how we can use them in intelligent ways to capture this new audience, this new generation of homeowners. Sorry, I don't want to mean to put you on the spot, but as you're thinking about reels, as you're thinking about these short form videos, what are some things that are coming to mind? Like what are some things that you and your team are spitballing?

Yeah, so I mean, ultimately, first we want to make sure we're given a basic branding presence. We're making sure that we have intros to the company interest to who we are and what services we offer and that we're physically there to begin with. I think that's really important is, you know, they say violently, they executed today is better than perfectly planned and executed tomorrow. And so we need to get started. Ultimately, I challenge everyone, you know, hey, we got to get started. And so it's not going to be perfect at first, but let's get something out there. And then ultimately we want to get into. Right now there's a big conversation around tax and energy savings as costs go up and CO2 is present. We want to make sure that we're informing our customers that now's the right time that they could get obviously a big reduce reduction and a large savings if they make decisions. And we want to be informative on what they need. Are we, you know, are we making sure we're offering information that's relevant, that's quick, that's concise, that they can, you know, receive and hopefully make a decision and then obviously ending with some sort of call to action, you know, just trying to pull them back in, you know, on the short play video. So we are right now doing our end to try and figure out, you know, hey, Is that a YouTube present? Is that a Facebook presence? Is that a Instagram and TikTok presence? You know, and there's lots of different ways to, to make this short play video ads, you know, impact. And so we're, we're definitely trying to figure it out and make sure that if not just in that area, that we're at the forefront of any shift in how consumers are making decisions.

I must ask, I have another question for you after this. It's a bit of a fun one, but you're still really young. How have you collected all of this business acumen and know how, like, what has been your process to learn as much as you can about the service side, about the operation side of the service business, so you can create paradise into the company of your dreams.

Yeah, so I think a lot of it came from while I was traveling through, you know, my career. I joined the books of paradise in 2009. And so over my 14, 15 years, throughout this process, naturally whenever someone exited this company, there was always that quick turnover from dad that said, hey, I need you to fill in. And so I definitely think there's a piece of it of over these years, I feel like I've sat in a little bit of each role. I've gone from, you know, obviously an external field helper to technician. I got to come internal and assist the accounting team and learn the payroll processes and how we would Process bills and you know, AP and ar. I got to live in the inventory and warehouse side of things for a while. And we had, you know, a team member exit at one point where I would take on permitting and I would learn those functions. And over time the call center became a realization to me that needed to be a focus. And so I took a role into the call center and eventually went and sat as the manager in the call center. And at the time we had one or two reps and at my exit and today we're up to, you know, seven or eight reps in that team. And so there's been a little bit of involvement in all of these areas. Another area I always loved is I was always a big fan of meeting with as many people as I could, hearing everybody's pitch and approach out and then just really making sure I went back and maximized, utilizing the information I received and putting it to practice. And so I think from just naturally going to all the different areas of the business, really having a love for what I'm doing, it really has just opened up so many doors. You know, I want to make a difference in the people's lives here that work here. I really want to make every single person have a better opportunity going forward. And so I think just when we're pouring our heart and giving 110% into the people that are making it happen and then the customer's experience that, you know, naturally we're just, we're gonna, we're gonna get naturally, you know, directed in the way that we need to go. And, and so I truly believe paradise has just had an awesome opportunity to do that. I was led out by the best role model I could have asked for. And so I had big shoes to fill and I, and I knew I wanted to outgrow them. And so every single day I just purpose to come to paradise, give it 110% and, and try to outgrow those shoes.

And I mean, it really just goes to show like if you're coming in as a second generation owner, which you are, the importance of sitting in all of those different seats and really getting the feel of all these different roles. I mean, that's such invaluable experience. So thank you so much for sharing that answer. I have a final question for you, which is one of my fun icebreaker questions and I thought this would be a good one for you. I'm testing out new ones this this season. How would you change your life today if the average life expectancy was 400 years?

Alrighty. So I'm not gonna lie. I was privy to the question, and I don't know if I'm allowed to say that, but I use ChatGPT for a little help here. I don't know how much you guys are using AI to answer some of your questions, but I was stuck here. So I did use a little AI to help me, and I really liked the results I got. So here we go. Some of the examples that I really liked were pursuing more education, taking on more long term goals, investing in more relationships, exploring the world, and focusing on health and wellness. And so at a high level, I think if I had the opportunity and a life expectancy was 400 years, I'd want to make the most of the time, you know, I'd want to pursue my passions, I'd want to invest in as many relationships as possible. I'd really want to take some time to explore. It's something that I haven't done a whole lot of. I haven't left the country too much. I do like being here in South Florida and I really love being a part of the family business on the day and doing all that while taking care of my health. I think about podcasts of my own, I think about blogs, I think about books. I think about all the ways that I could tell even more of the story, more from a, you know, a personal, you know, standpoint and the struggles and the challenges I climbed through while, you know, preparing myself to one day you know, managing and run paradise as a company and, you know, grow a family here in South Florida and do all these other things. And so, you know, I. I think it would be just the most awesome experience, you know, being able to live 400 years. I think there's so much we could do, but hopefully we're maximizing each day as it's our last. And whether we have one year left or 400 years left, we're just given 110% and really just trying to hit it home.

And also, no Worry about using ChatGPT. I love it myself. It has made my life a lot easier. So I'm excited to dive deeper into it on a neck on a later episode. Jason, thank you so much for spending time with me today. This was a great interview and I really appreciate your time. Thanks for joining Tool Box for the trades.

Thank you and look forward to listening into more podcasts.