Scaling Smarter | E14 – Hard Refresh – Live from ISSA’s Business Growth Strategies

So welcome to the the official show at Issa's headquarters. And we have Brad and Alex.

Yeah.

Airing in this one. And we are super excited. If you haven't listened to an episode, you've been missing out and you're about to find out why during this episode.

Yeah.

Okay.

And also, disclaimer. If there's any bad words, please don't judge us. Yeah, but, you know, sometimes they slip out.

Also, I thought they were going to have applause.

Yeah, please, Aaron, can we have applause? We really needed those.

Okay.

All right, so we're going to do intros first. So we're going to kick it to Alex and then Brad and then we're going to do the Two Truths and a lie.

Awesome. Alex Crowley with the Vanaken Group, based out of Peoria, Illinois. 3,200 employees. And my role with the organization is everything that my father tells me. A family owned business. I've. I've held positions with ops and HR and sales. Excited to be here and excited to be on my first podcast, Feel Famous.

I'm Brad Klein with Building Professionals of Texas, based out of Houston. We're about 250ish employees and one cranky old man that, that just. All I do is sign the checks and that's my job. I don't know how to clean a building.

I didn't get two truths and a lie.

Yeah, you're spoiling.

Oh, that's okay. Never mind.

We aren't going to remember anyways.

Okay, so we're going to start with Brad. Two truths and a lie. So you're going to say three statements, two of which are true, one is a lie. And then we have two guests.

Yes.

And I will tell you, my family watches the podcast and just to make fun of me because I'm terrible at this, but I come with such confidence. I'm like, oh, this definitely is a lie. Every time we're wrong. So no pressure.

Business or personal?

Anything. It can be anything.

Okay.

And I was a communication. 90 separate. 97 of communication is non verbal, so I'm going to be scanning your body language. No big deal.

I got a psychology degree so I can explain what. What you're thinking. So lay down and talk. Oh, two truths and lie. Okay. I am a sports junkie. I've been to every major league baseball stadium and every National Football League stadium. Two, I am also a bicycle rider. I ride my bike between seven and 8,000 miles a year. And three, my start in this industry was unloading cases of toilet paper out of railroad cars by hand. When I was in high school. Fun job. There you go.

Okay, that's pretty good.

That was really good. You did me in psychology. So super confident.

I know the first one is truth, right?

Because we just two level sports room that. So you're definitely a sports junkie.

I am a sports junkie.

Okay, well, you hold on. You have to let us guess first. Don't give us the answers.

Okay.

Second one was he's been to every single.

That was the.

No, no, that's the first one. That's the truth part of it.

I thought you were sports. Oh, you were following up with the comments.

Because I am.

But the third one. Unloading toilet paper off of the railroad.

All right, you go with your instinct.

I'll say the third one's the lie.

Okay, tell us, which one did you.

Say is a lie?

I'm gonna. I'm gonna decide with Kaden, it's the first one.

So I have been. I've been to every major league baseball stadium and I'm working on football and hockey right now, but I haven't.

It was the minor detail.

See, that's always next time.

I'm gonna go.

Okay, you go first and.

No, but I did. When I was in high school, my dad was in the wholesale lighting business and got me a job working for a distributor. And this is back in the late 70s. And a railroad car would pull up and we didn't know. We didn't know pallet jacks. And we had to take these cases. You want to talk about the summer from hell? So.

Well, they're trains.

Sweet and strong. All right, Alex, two truths and a lie.

Two truths and a lie.

Got it.

I've never put a side by side into drywall. Okay, I'm an attorney.

I want to hear that story.

Yeah, I'm an attorney and I'm a twin.

Okay.

It's not fair because I know you.

I know.

Okay. All right. I'm not gonna. I'm not gonna guess because I know the answer.

Well, obviously the third one's a truth.

Yeah.

Because I'm a twin and twins telepathically can know.

Okay, I didn't see that one coming.

I think the second one's a lie because.

No, that's wrong.

So you're not going to say anything unless he gets.

Why don't you just guess the answer?

He is a lawyer and he does have a twin. So the first one is a lie.

That is correct. Yeah, I was.

I was hoping there was a story to share between the drywall accident.

I was this close to using the drywall one, too.

Oh, okay.

That's pretty specific to not being.

Yeah, no, I. When. So I practiced for a couple years and then came to the family business and I started out as a cleaner and was in operations for two and a half years. I don't know why anybody trusted me with the side by side, but that was like one of like my first gigs to, like, learn the job. Yeah, it didn't go well. It wasn't just like a little. It was like all the way into the drywall. So I stopped and I was like, I don't know if this is for me, but here I am on the.

Podcast Segue into the Biz. Jiff, let's go. Okay, so we are. Do you have the questions?

Well, we got some events coming up from the Innovation of Technology Committee. This is Quick Control. So next two weeks from now, we are hosting the CLX event with Issa, and it's on robotics. John, are you in the room? There we are. He's. He's our headmaster of this one, this event, and we do them every quarter. The Innovation and Technology Committee's flagship event that we will be doing quarterly from here on out, and it ends in person each year at Issa in Las Vegas.

So.

So Register Registration's open June 24th, 1 3pm, something like that. One to three.

And June 24th, you still want. I'm supposed to control. No big deal. It's okay. Yeah. So CLX stands for Cohort Learning Experience. John is spearheading it and it's super cool because we spend time going through an actual tactical strategy or something that they're going to. Facilitators are going to teach, and then you apply it for the second part of the clx. So this topic is on robotics. Last time it was AI. And so we've gotten a lot of really good feedback and amazing facilitators like John. So check it out. It's online. Registration is open and there's space, limited spaces because we do four or five different sessions and we have seats. So check it out. And that's it.

That is it. So we're going to dive in. Hard Refresh is about switching your thinking. Like in a browser, you're going to hard refresh that. We're going to clear the cache, and that's what our main segment is today. So Alex and Brad are going to help us understand their processes and what they are doing to reset business thinking. And that's why we created this podcast with the committee. So let's dive in.

Go Ahead, I feel like we have to set the stage a little bit more for the what are you doing? Right. So tomorrow we're leading a workshop. That's what are you doing? And it's based on acquisition, retention and expansion. So one of the things I wanted Brad to talk about was from an expansion perspective, he has a really cool strategy when it comes to the divisions and how he positions his company. And so I wanted him to kind of explain the thought process there and how it's opened them up to scale the business segue.

Wow. So I think they were putting logos up here and didn't. But so you'll see mine, I've got my company, Building Professionals of Texas, but on my logos you'll see we have Dealer Clean, which does nothing but car dealerships. Educlean, which is schools and churches. And if I. If you're a direct competitor of mine, please ignore all this. And Mediclean, which is Medical Day by Day Porter Services. And these are all. These are all internal. As I said earlier, I got a degree in psychology. Perception is reality. So what people think is what is, is the truth. If they think their building's clean, then it's clean. If they think it's dirty, you know, you can do whatever you want, but it's still dirty. So we created these divisions because, just for example, I walk into your private school and you're the headmaster mistress, and I'm Brad Klein with Building Professionals of Texas, and I want to clean your school. Well, we're not taking bids right now, but when we do, we'll call you. And I walk out and they throw my card in the trash can. I walk into that same school. I'm Brad Klein with Edu Clean. We do nothing but clean churches and schools. We are the experts in churches and schools. We can get your church and or school cleaner than anybody else because we hire people that. That's all they do. You may or may not be looking for a new cleaner right now, but now my card sits on the side of your desk, and when you're ready, we get a call. And that's why we've created these, these specialty divisions so we have the ability to. To create our own perception.

What? I like that too, because I think it's strategic in personalizing the service that you're offering to that specific client. And I think one of the things that I've heard in the industry as of late is which BSCs are specifically trying to be the facilities management all in one. Right. We never want to say no. And so that's why kind of wanted Alex to go into their model and how it's the other side of the coin. It's really coming in, creating one brand, one strategy under one thing. And so how do you use that to leverage new customers and to retain customers?

Yeah, so it's, it's not the. I mean, I love this guy, but almost the opposite. When I came in the business, and again, just with my legal background, seeing that we had like legitimately five to six different corporations kind of under this umbrella, it was almost a disservice to, I would say, our internal resources. Right. Because everything was fragmented. How we ran PNLs, how we marketed ourselves, I mean, all those things. And it was almost like we kind of just want to stay under the radar.

Right.

And so with the help of my siblings, we strong armed my father to really say, hey, look, we need to lean into who we are.

Right.

We need to lean into kind of one brand with the understanding that not only would it help the back office, but then it would allow to be able to tell our story that, you know, when we're selling to bigger customers, hey, it's not Accent Services in Wisconsin. Right. It's been akin in Wisconsin and you got a plant there. So now, you know, let's look at your plant in Tennessee.

Right, Right.

So leaning kind of into this one brand, same provider for you, kind of across this 14 state footprint really kind of helped, I think, solidify who Vanaken is and what we do.

So complete brand new vacation strategy. How long did it take you to do that?

Oh, boy. I would say we started, I think early 23. And I think the process at a minimum took probably 12, 13 months. Was more. Yeah, it was more. So I think for us, we also refreshed kind of our core values and purpose statement when we did that.

Unified.

Yep, unified again. The. The business was started by my grandfather Jay. And so it was time at that point, I think look at everything, kind of pay homage to him. But here's the kind of the new chapter and. And one. Brandon. Yeah, so it was a long exercise. Had some outside facilitators help us with that exercise to avoid some kind of internal battles. Right. With maybe some people have been with this for quite some time and kind of the newcomers, but it was a great exercise. We learned a lot about ourselves.

Now, if I can, we're not as opposite as you think, because all of ours, these are all. No, I know, but these are all just. Just verticals that roll into the same companies. So again, to the outside World, we're all of this, but inside it's all the same. And all of our clients have, you know, our customer numbers are set up to where, you know, if we want to look at a vertical and see how are we doing in the car dealership business, you know, we just push one button and it pulls up those clients and so we can get numbers, but all the numbers roll down into one.

When I was going to ask that, from a vertical perspective, how do you know both sides, right? To grow, you can clearly see from this vertical, this is their potential growth here. Alex, from your perspective, how do you know where to target, especially with what's happening in the industry right now? How do you focus on the bill extras? The base contracts are like cleaning. Do I do subcontracting? Like, how do you. Is it all based on data? Is it based on customers?

What is it?

What is it? Tell us your secret.

Yeah, so we, we still identify our business into verticals, so we still align resources. Right. I mean, you know, to his point, we can still run pianos that way. But I think again, if we're talking about branding, it's one under one roof. I think where we could probably do a better job, if I'm just being transparent, is the marketing aspect, right. And digging into some of the content, the collateral by vertical. We've got that, we've started that exercise and it's, it's been worthwhile because, you know, to his point, the client wants to feel like we're the expert, right. And if we come and say, hey, well, we do all these different verticals and you're getting kind of general collateral.

Yeah.

They're like, right, I really need somebody that's, that's specialized in this so special like medical cleaning.

Right. You have to, terminal cleaning is the thing. You have to be able to speak to that. I think that becomes super important.

And terminal cleaning is, is important, but it's not. This coming out wrong. It's not essential for us to do that because most hospitals that have a terminal cleaning component to it have in house staff, right? Because they can't, their insurance companies aren't going to allow them more often than not farm that out because they have to be responsible for that. But yes, there's, there are different levels of clean and you know, and you can take the highest levels of clean that you use at each different vertical and incorporate that into the others. We now go around everywhere and say, not only do we disinfect, we use hospital grade disinfectant everywhere. You know, I mean, and all of us here. We all know that hospital grade disinfectant is probably is what 99% of us use. But they don't know that or get that. So when you tell them that, they go, wow, they're using hospital grade disinfectant. They must be better than that company because that's not how they're selling it.

Business in general is an emotional being, right? Sounds like there was some family things going on. And the branding unification factor. George, no George, we had him on the podcast and we talked about. If you guys go back and listen to the episode with George, talked about his family being Greek and just how that adds into the culture of business. Business is emotional. So when we have, when we have this moment of businesses needing to make these decisions, they're rarely left logically right. There's people's emotions behind them. This targeting and messaging scope. In fact, this is the first sub pillar of the acquisition arm that we'll teach tomorrow in the workshop. You have to decide and then just go all in. Right. Like you guys said, it's not necessarily that one is right versus wrong, but you've got to be consistent. You've got to develop some standard operating procedures of this is why we do it, this is how we do it and this is what the outcome looks like when we deliver excellence. And when you define that, that's when things start becoming repetitive. That's when things. When systems actually start growing and building to the success of business. Often someone's idea, it can be incredible. But if you don't have a go to market strategy or internal processes, it's. It's not going to happen. Right. So from, from the conversation, I just, I love that those aspects, you guys just got two very different ways to go about verticaling their business. I don't know if that's even a real world.

Yes, we're gonna make it a little worse.

It's my. Anyways. But that, that type of difference is, is the, the.

I think what I'm hearing too is like collectively to be all in from a culture perspective is really important. When you scale like you all have, and we talked about this with Channing and I love the graveyard example that she gave in the earlier session. But in order to really grow a business, everybody has to buy in. Whether you're doing the divisions or whether you're doing a unified strategy. If, if everyone does not align and agree because they're ultimately going to be those that are talking to customers or to your employees. You serve two people, right? You serve your employees and you serve your customers. If you guys all don't have that same marching order, it just can't grow. And that's something that I, I learned from Pioneer. Honestly, it was very con. We were very conscious of always having a unified sys team. Everything was, we were in line and it felt like even if it was an argument about the direction we were going, at the end of the day we all walked away with, okay, we're all marching in the same direction from a vertical perspective. Because I think this is really interesting. We in D.C. metro area. One of the things that we were like explain this is when I was at Pioneer and I'm happy to give the context later, but I'll start with when we were. This was 2023, 22, 23. Super focused on commercial, right? So we defined verticals. Commercial, medical, retail, family and commercial was booming. 80% of that business. But then every property team was getting pressure from ownership. 2023, no, 2024, getting property pressure from property teams to go back up to bid, right? Three to five years, everybody has to go back to bed and everything is about low bid. So then it's like, okay, change the strategy from a vertical perspective. Start exploring medical, start exploring industrial. So from your guys perspective, what do you see in your areas from Is it still your traditional, you're going to focus on that commercial or you focus more on industrial? Or is it like what, what's. Where are you putting your energy is my question.

I'll start with that. I mean first of all, and again, I'm not telling anybody in this room anything that they don't know. But third party managed multi tenant office we all hate. But you've got to have a certain percentage of it and so you're going to have that. But we made the decision early on. I mean we looked at our verticals. Where are we making the most revenue, which is important? When we're talking about your acquire, retain. I actually have that same thing, but it's called arm, acquire, retain and maximize. When you're trying to acquire or retain, you know, you've got those verticals and top lines important, but bottom line's importanter. So and you know, where are we making the most money? So let's use those verticals and let's grow on those verticals. So that's what we, we figured out how to clean car dealerships better than anybody in the state of Texas. We know how to do car dealerships, we know how to make the, the management of the car dealership happy as well. And the funny Thing is, is I tell when, when I'm selling it, you know, and you're talking to the controller, the general manager or the owner of the dealership. And I tell them, I said, this may seem harsh, but I really don't care what you think about us. Your opinion doesn't matter to me because you are not the profit center. I am going to clean the service areas, air locker rooms, their bathrooms, their areas, their break rooms, because those are the guys making you the money. And so if I can keep them happy and keep them working and keep them not looking at the dealership next door because, you know, for those of you that aren't from Texas, you just go down the highway and it's dealership, dealership, dealership. I mean it's, there's six, seven in a row. And you know, you see these, these salespeople and these operations, service techs may just go next door. You're being a jerk. I'm just going to go here. So what do we need to do? Because it's the same thing in our business. We have to keep our people, keep our people happy. So do they. So here's how we can do that. And that's, you know, what we focus on.

That's.

Did I answer the question or did I just go? I don't.

You did.

Because I actually forgot what the question was.

I can get from point A to point B. And as you learned in school, a straight line is the fastest way. I don't know how to do that. I can go this way.

I always say I go from A to M to L to Q. So we are on the same page. But we were talking about verticals. I feel like you, you hit it. Car dealerships, that's where you're focused.

Well, I mean, that's one of ours. We, we spend a lot of time on car dealerships, we spend a lot of time on banks. A lot of what we do came out of the pandemic honestly, because, you know, you had to, to figure out when the office building market shut down what that did to car dealerships because now they can't get their chips so they can't sell the cars. But medical, you still got to show up every day because people are still getting sick. And our day by day porter service doing high rise residential, well, people are still living there, but now they're there 24 7. So we got to get that place, that place. One of my clients said to me, he goes, I am the manager of a five star hotel where the guests never check out and that is how you need to treat this place. And so that was, you know. Yeah. So and then same thing with schools and you know, we just had to get them. Everything had to be cleaned like it was, like it was a hospital terminal cleaning. And as again, all of you know, everyone said this is the new standard, this is what we're going to go with. And the day they flip the switch on Covid, it's, we need to cut 25% off that budget.

All out the window, Alex.

Yeah. So I mean, you can go to our website. We're in a couple different verticals. Look, and I, I've walked into the business so I don't want to pretend like I've actually done anything. So this is all kudos to my grandfather and Matt stepdad. It's never been a fad for us around focusing on the, on the verticals. Right. Based out of pure. A lot of of our work has been predicated off of need.

Right.

And so I think at different times, we've got enough different verticals where if one's down to his point, the other one's probably going to be up.

Okay.

And so I think.

What do you mean by need?

Well, I think. Okay. During COVID medical cleaning. Right, right through.

Right.

Client need, your specific clients.

Yes. Client needs. Yes. Right. And so I think just if you can take on the risk to diversify the portfolio, I think that helps out with having some consistency in your business. Right. When you're hyper focused on a vertical where you're trying to pivot to the fad.

Yeah, right.

Because there's fads every five, ten years it tends to not work out because by the time that you're ramped up and you're specialist.

Right.

It's too late.

Right. So I, I think diversifying has helped us manage the waves of what I'll call business here in the States. Does that make sense? Is that fair statement?

I have a qu.

Another one. But you should have a question.

Well, but also you to, to. To just piggyback off the diversification. It's also, you know, diversifying kind of out of the general cleaning, you know.

Exactly.

Offering trash pickup, you know, doing the hard floor care and the carpet care and supplying them with, with walk off mats and, and consumables and window cleaning. Because you know, what we got to remember is the property manager had a bad morning and walks in and his trash hadn't taken out and he's so aggravated fire those guys. Well, now we've got five fingers in the pie instead of One. And they may be mad, but they're lazy. And that's what we bank on, is they are not going to want to find a new tr. Find a new way to buy their consumables. And, oh, now I got to deal with my windows. So. So, you know, it buys you extra chances.

Well, I was going to ask from a facilities management perspective. That's another thing that I've started to hear is instead of just doing janitorial, some companies are expanding into landscaping, security, ballet, all the things. And so how do you guys feel about becoming a true facilities management company? What would.

You're looking at me like I'm supposed to answer that.

I'm curious to see what you say.

Look, I'm gonna give my own personal perspective. I'm not gonna speak on behalf of the company. So is that fair? I. I think from that perspective, because we obviously deal with some larger clients, the person who manages the cleaning isn't always the person who manages the security and manages the lawn. It's nice when that happens. So you're dealing at that point with multiple different stakeholders. I also think, again, being confident in what you do, having enough diversification, but not going so off the rails that you're like, we do everything. Because I think that can expose you to a lot of liability. Again, that's the attorney ahead of me, I think. You know, even if you're cutting grass right, you got to have some certifications, wouldn't you say?

Sometimes you're getting the answer. You're getting the question regardless. Like, you're in the buildings that are asking, could you recommend a landscape or could you recommend a security. Could you recommend. And then what happens a lot of times, from my experience is we will subcontract that work out.

Yeah.

To the power washing company that we work in D.C. just. Brad, what do you think? Feel like you're.

I've.

I came to this last year and I'm here again today, and they asked every. Yeah, I know y' all are crazy. But the one word that I keep hearing over and over at every single one of these things that I go to is relationships. So that's the key. Number one of all is building these relationships. It almost doesn't matter if you can do all this stuff for them or not. If you can be a resource for them, they know that they can come to you for this kind of stuff and ask these questions. One of the things that I tell them when I'm. When I sell is that I'm big into that. I say a thousand Times a week. Highest and best use. You know, my highest and best use is not cleaning a toilet, it's running a business. Their highest and best use isn't sitting on the phone all day interviewing 10 landscaping companies. Let me help you find that. Let me vet these people. I know a lot of people, so I can do that. So let's be that resource for these people. Whether we do it or not, whether we're a facility management company or not, we know people. I had a guy call me last week, do you know a plumber?

Like, yeah, it's in Texas. You know everybody. To go back on the record, we do a lot more than just cleaning. So I do want to say that, and I think to Brad's point, it's about being a resource because on the.

Topic of like scaling, that's why I wanted to touch on it. Because I think everyone's trying to get creative of how to scale and how to grow. And it's getting harder and harder to compete. And so what do you do? Especially when you're competing with low bid, you got to, not only from a pricing perspective or the profitability perspective, but to go out to hit these RFPs with 36 buildings. If you can provide security and janitorial, it changes the game a little bit for them. And this is just on my experience in the D.C. market. But yeah.

So one thing I want to kind of dial in here in this conversation. When someone is scaling to just all of a sudden go full bore to the market can be a very dangerous move.

Yeah.

And so often when I'm telling a company and they have a question like, where do I go to next? And I say, do you know what I'm about to say?

Focus.

Yes.

Yeah, good. Yes.

That was a terrible advice. It's focused on follow on course until successful. And it's not ever it's until successful. So I gotta imagine that you guys did not do all of these things day one, launching the business. Right?

No. So it's also, you know, you gotta be careful. Jack of all trades, master or none.

But.

Right, exactly.

And so it's. It's that principle of follow one course until successful. And the reason is, is because you do need to master that craft. But like we've pointed out, at some point you can go to the next closest vertical.

Yeah.

So maybe if you are doing janitorial, maybe landscaping is the very next closest thing that makes sense for your portfolio. It may not make sense for your portfolio. It might be security ability as a business leader, as an owner, to say hey, I'm going to lead my team down this road. Listen, your dream as a, as a business entrepreneur is to make sure that your vision is big enough to encompass the vision of everyone who sits on your team. Well, if you have a vision that is so grand and so large that they can't see where they like play a piece in that, it is really hard for people to catch on to that. So when you mentioned that Pioneer 80% was commercial cleaning, well, they're not there to necessarily today, but at some point they had to get so dialed in saying, hey, we're going to do it this way. And so maybe the slight warning is when you hear someone else's successes and be like, I got to go copy Alex. I'm going to go back from the conference today, copy exactly what he's doing because he's succeeding. I would just, I would challenge that mindset of have you followed one course until successful because you might need to dial it back in, get in the lane, and then before you merge to that next lane, make sure that you were confident in the first.

Well, and two, I think you said something and it was super interesting in terms of the need. Right. One of the things that we did in Pioneer Service, a lot of class A. And so we did this concept of brand activation. So we were already at the building, we're already servicing them, and a lot of the tenants were law firms, high end buildings, and we were producing these events, these lobby events and doing an exquisite job. Like, we really did an exceptional job providing the experience. And so we were in the fitness centers and we, we came up with this idea of like signature line of products. And so we came in and activated the properties. And so we got tremendous feedback because there was a need there in that building. And then we were like, we're gonna do this as a company. Like, we're gonna take it to all the property teams and this is going to be incredible, incredibly successful. And it was not successful. Spoiler alert. Because only one company, only one property team valued that. And so that's kind of the, be careful a little bit. Right. Because there may be a need in one place, but you have to make sure that you actually carry through a strategy, understand what's possible, what's feasible, and what's worth your time.

Yeah, go ahead.

I would like to just piggyback off of that, what you were saying about these, these class A properties. We avoid the class A properties. This is great for the smaller companies out there, avoid the class A's like the plague because all the big companies want the class A's and they are beating the crap out of the pricing.

Yeah.

We go after the BNCs and our profit margins are so much higher.

I love a Class A Shocker.

Not Brad.

Wow, that's really. No, but you're absolutely.

I'm a Texas redneck. What do I want with a class A?

Like. No, no, but you're spit on the floor. No, but that happens in D.C. specifically. You have monster companies, the red coats, CRS, the Pioneer, competing over the same class A buildings. And every time, the line gets a.

Race to the bottom.

Yes. And in the saddest part about it is it affects the frontline team members. Those are the people that are actually affected that they have to. Instead of having six hours, they have four hours. Instead of have five team members, you have three team members. And that's unfortunate.

Instead of $10 an hour, it's $8 an hour.

Well, D.C. is minimum.

We work in Illinois.

It's a little bit different.

$10 an hour. Is that real life?

Yeah.

In Texas.

Yeah, that's what. That's what our frontline cleaners start at. $10 an hour.

If anybody's in Texas, you know, you know, Brad's at pay ones.

Hey, man. For your nighttime cleaners, are you paying more than that? Wow. God. We're gonna come bid your buildings.

Unbelievable open book.

So we're gonna open it up to actually some Q and A. But before we do that, I want to talk about briefly our employees. Because often in this game that we call business, they're the very bottom receiving end of leaders decisions. The ability to pay them more or not. Is your ability to capture more profitability or not? Right. So, Alex, I want to. I want to talk to you for a second on this question. With all of your employees, what's something in your experience that. And maybe it was before your time working in the business, but what had to shift, Right? What? Clearing the cash moment had to shift to manage as many employees as you guys have now and to retain them and to make sure they're happy and that they're your focal point as you've scaled to the level that you are.

That's a good question. I think I said this in the last. The last business growth strategy. So, you know, someone could throw out, hey, we do. We have 30, 200 employees. And Jason's heard me say this, but we don't subcontract anything. They're all our employees. I know people use team members, whatever, but I think for us, I would say middle management is the most important yet difficult thing to train up. Because the reality behind it is I could know some of the cleaners, right if I go out and see them. But being in 14 states we're not going to be able to, you know, see them and appreciate them. We do have some internal programs like that are specific to our frontline staff that help out with appreciation. Getting those frontline managers to, to really, I guess emphasize who Vanaken is and what Vanakin is is like paramount. And honestly, just full disclosure, it's the thing that we struggle with most because that typically is know a majority of the cost will come in, you know, for our organization. So I would say it's, it's really focusing on, on hiring the right people. We, we've changed some policies and procedures and some hiring practices that's been more, I'd say, culture focused on that frontline manager to help with some of the kind of think learning and development.

You know, I love that you asked that because for me being Hispanic, I, the frontline team member has always been my north star. My parents were cleaners, I cleaned buildings and I think we don't do a good enough job talking about the people and the people that are in the buildings. I think as business owners we're obviously super focused on growing and management and all the things which is super important. Right. That's how these people get jobs. But to be able to shine light on the people in these buildings and paint the picture to our customers and say when you bottom barrel it, it's not just about money in my pocket, it's taking away from those people as well and humanizing that because oftentimes there's so many companies out there that are doing our industry a disservice, honestly. And it's affecting the frontline teams.

I don't even know where to start. That could be an entire podcast day long podcast.

Well, keep it so, so $10.

But to Alex's point, that's exactly where we are is, is I tell people all the time, you know, you want to hire a new cleaning company that you can show my age, pull out the yellow pages, call 10 companies randomly, tell them to send 10 cleaners over so you can interview them. 10 companies, 10 cleaners. We're going to get 100 people. No, you're not, you're going to get about 60 because we're all pulling from the same pool. These are, these are the people. What are we going to do to keep them? What we do, I mean to start with, from the bottom up. Is every year at Thanksgiving, we give them. Every employee gets a $25 h e b gift card. That's our big. For those of you not in Texas, that's our big grocery store. And it's nothing. It's 25 bucks. Who cares? And so for the 6, 7, 8, $10,000 that it costs, you make these people happy. To the point where I have had people come in and apply for jobs, say we want to come work for you because we heard about the gift cards. But it's. We put our resources into the middle management because those are the people that are. They're reacting downward and upward.

Right.

So they've got to be able to go both ways. And we make sure that they are going downward and that they're focused on their people because without them, you know, then we're doing the clean.

When I think the companies that understand you serve two groups, your employees and your clients, have a much better shot, honestly, because it's so much about those to you might not be a lot, but for some of somebody to get a $25 gift card to buy the turkey, to buy the food is a huge deal. And so I applaud you for that. Thank you for doing that. Okay, we have five minutes left.

We're going to open it up to the audience. These are questions for Alex or Brad about how they're operating in businesses. Rachel, Management.

So I'm curious because you guys both do different verticals from an operational middle management structure, do you segment by client and or vertical? So I'm just going to give you a little background. So we need to have markets where, say we have a lot of retail and then, oh, we just landed a commercial office building and oh, we just landed, you know, a small manufacturing facility. So we've got that management overlap that's doing all of them. So I'm just curious, kind of like what you've seen. Success standpoint.

You want to take that one first?

Sure. In a perfect world, you've got a manager in a vertical to your point. Exactly. Is. All right, so you're going to manage these 10 car dealerships and then, oh, crap, we just got a medical clinic right next to one of the dealerships. I need you to handle that until we can build some. Some mass around that area or around that vertical. That's what you've got to do, you know, and again, it's. It's you as upper management that's working with the middle management, explaining to them why they don't mind doing anything if they have a why and that's what we've got to be able to give them a why that works for them, you know, not like our parents, because I said so.

You know, I love that one for us. So I would tell you that we started off where managers were just managing kind of everything in their area.

Right.

And then obviously as we got to a certain size and we're able to kind of peel it off, we have aligned managers with verticals. That said, when business comes and it's not feasible to add another specialist manager, we're not going to do that. We would just add that, that you know, mix of work. I think for us specifically, if you're cleaning commercial spaces, that's commercial spaces. Everybody can kind of do that. I mean for us in the industrial and medical, those are two totally different realms. We don't have a lot of managers kind of intermixed there. But typically the industrial sites that we're doing are self sufficient. They've got somebody on site. Right. So I think to Brad's point, if you're picking up new business and you've got some management there with some retail and it's a little, little lightly manufacturing, I folded into that manager's territory. But I think the bigger thing is why your guys company, that's what you should be teaching. I mean I'm not saying you guys are. I know you guys, you guys are great. So I know you guys are probably doing that. But our focus and I think the biggest hurdle is who is Vanakin and why is Vanakin and how can you communicate that to the customer? Because to this point we're going to mess up and we're gonna mess up. So if they feel like we got a good relationship with them. Yes, you did. You said yeah, you messed up.

We did.

Yeah, you did.

See I don't remember things.

Yeah, didn't she like five chances, hands on the pie or something like that.

You're like my wife. You remember everything that would be, that.

Would be my feedback.

Thank you.

Any other questions?

Oh, come on.

This is.

We're open books.

One minute. Look at us. We did a good job.

George's got. I gotta.

There we go.

Christopher.

Brad, when you said you got into trash removal, was it. Tell me a little bit about that. What does that look like? Well, so we created a vision called Trash Bros. And what we did is we started going to the republics and the waste managements of the world. You know, I want to take the trash out of your building and so I want to put a dumpster there. It's the only thing that I tell them. It's that the magic trash fairy comes in the middle of the night and dumps your can. And if it's empty, then it's working. So let's see what we can do and maybe save you a few bucks. And we hired a consultant that was in the industry for like 30 years. And so she goes to these places and she is getting these clients anywhere from 15 to 30% savings on their trash bill every month. And our margins are through the roof, which was, I was going to say, with these different pieces of the pie that you're going to add when. When you're adding those. It's because you're a trusted resource. They're rarely going to check your pricing, number one of all. So if you're not just screwing them blind, they're going to go with you. And the profit margins are a hell of a lot better than they are in the cleaning business. I looked. I looked into that. I. When I was in my prior business in the valet parking business, I bought a limousine. And if you buy a limousine, you are not in the limousine business because that thing will break down. Same thing with trash trucks. If you want to be in the trash business, you got to buy multiple trucks. And they cost about a 200 to 250,000 each. And then you've got to figure out all the dumping and all that. So. No, we did not. We just contracted out. We are. We're a sub for the trash companies.

So It's a Ford F150.

Yeah, yeah.

So. So I got a couple of places like that where we do hand like that.

So.

Yeah, get her done.

Yeah.

We had a question over here.

You said, I think Brad relationship.

Right.

So why you lose relationship?

So, yeah, it's. Everybody's got a cousin in Miami, you know, and so you've gotta. You've got.

What about this?

It's.

First of all, yeah, yeah.

That'S.

That's a line from a Jimmy Buffett song. But that's what we use is that. Is that everyone has relationships. So it's. How is your relationship compared to my relationship? You know, which one of us knows Caden better? You know, you walk into his office and you see a picture of him playing hockey and you start talking about that, and all of a sudden you're big buds. So you start talking to him about lacrosse and he's going to Helen's. Lacrosse.

I would do anything.

It's.

It's about building. It's psychology. I mean, it is. It's People ask me why I don't use my psychology degree and I use that thing every single day. And it is. But we lose business because you know what? And Chris Moneyshank, he will tell you that, that I am not afraid to say this. There are a handful of times that we suck. So. And you know, and we lose business.

But I think you can't lean on the fact that you just have the relationship. Right. You have to be strategic with that relationship. And what that means is you are invested in providing a solution for that relationship. Meaning I'm going to invest in my company from a technology perspective, from a human resources perspective, from an operations, so I can provide you the best service because somebody else is going to be in your ear. And I'm not just going to rely on the fact that we're friends and say, you're going to keep me. I have to bring you solutions, I have to bring you innovation. I have to make sure that I'm keeping up with the trends because that's a fruitful relationship, that's a strategic relationship.

But all things being equal, people would rather do business with friends.

I think the only thing that I would add to this conversation is, again, we've got just a slew of different sizes of customers. So you're asking, like, why you lose. What we've seen probably in the past 12, 24 months is, I know everyone's super hot on data validation and cleaning validation.

Don't dog my.

I'm not dogging it. But I think when you, But I think when you flip out the price, when you flip out the price, you know, to a customer, it's like, hey, look, I'm, I'm willing to bring this. I think it's, it's not the fact that you're bringing it, but the fact that you're at least bringing it up. You're. You're talking about solutions that are out there and to a certain extent, proving your value outside of just being the friends.

Well, and admitting you're wrong, too. That's. That speaks to your friendship or your trust. Like, you can say, messed up, we're really sorry will do it better. Instead of hiding and, or banking on the fact that you're friends and they're not going to fire you and we'll.

Pick up your trash for free this week.

Yeah.

In the ford, in the F150. But with that, this, the industry in general is pretty good at acquiring, but not so good at retaining. And I think a friend can acquire the relationship. Right. Hey, they brought a pocky I'm going to give them a shot. Right. It's operations that then were like, hey, you were cool, but I did have a need that needed to be solved. And you did not solve it.

The analogy.

Yeah.

Unbelievable. He's a huge hockey fan.

I am. So come talk to me afterwards if you want to talk about the Utah Mammoths. Anyways. But my point being is that you can get in somewhere, but retaining that is one of the industry's largest problems. And a relationship isn't going to keep that forever if you just keep sucking. So standard operating procedures have to be in place and relationships, then at that point, then fuel growth, because it's the top layer of something that's core on the operational level. So that is it, though. Thanks, audience, for joining our first ever.