INSANELY CHEAP Strategies To Double Your Company | Coaching call with Claudine Ripert

There's not a single problem that exists in business that writing a check can't solve. Everything that you're worried about, everything that you're frustrated with, you can write a check to make it go away. Which means that all of your focus has to be around generating revenue and gross margin. If you've ever been to a stage, performance like Phantom of the Opera, there's only like two or three people on stage. Those are front stage, but there's hundreds of people backstage making the operation work, right? Sales, marketing, tickets, coat check, lighting design, costumes, all this stuff, right? But there's like three people on stage. The more that you end up working backstage, sure, you'll build a strong company, but you won't necessarily scale quickly. The more that you can stay front stage, sales, revenue, gross margin, everything, finding clients more gross margin, the more that you can then use that money to buy people and to pay for talent. What you're getting stuck on right now is kind of the sales and operations scissors is that you're trying to hire more people, but you probably can't really afford to pay the people you want what they need. So we're trying to kind of pay them a little bit less. And now we're getting caught in this whole inflation thing. And then you've got insurance that are paying you. They're not necessarily going to want to pay more just because there's inflation out there. So you kind of start getting caught in some of this. One of the things that I've always done in every business that I've built is, is positioned ourselves as kind of the FedEx of or the Starbucks of that space. That's kind of what we need to do with your business. And you know, as you say that, that Servpro might be the, the McDonald's of something. What's their pricing like versus your pricing? Is it the same? Is it lower? Is it higher?

Some of it is lower and some of it is just a little bit higher.

I think I hear where you're going with this, Cameron. I just want to say on the financial side, margin, revenue, that piece has been pretty. We're pretty healthy there. I think you touched on paying the right people enough, that sort of thing. I think there's more on that side than like necessarily the sales side of it because I think I feel more strong about.

Yeah, so on the, on the paying people more side, when I walked into 1-800-got-JUNK. And we also did it with Gerber Auto Collision. We also did it, frankly with College Pro Painters. And I've done it with, with clients all over the world since is we have to pay people in the 85th percent of the bell curve for anybody that you're looking to bring into your company, regardless of the role that they're in. Let's say that there's 10 jobs they could get. You need to be paying them at like the 8th or 9th of the 10, right? Like not the highest of the high, but you can't pay in the middle. And the reason you can't pay in the middle is you're going to be getting horribly average if you're lucky, if they're in the middle because somebody's prepared to pay them more. So, so right now what happens? And unfortunately you're kind of stuck in the Bay Area with part of this. But we used to be covered what with predatory pricing, companies could not go into a market and price so low that they could buy up market share. Governments prevented that from happening. Now what's really happening is the tech companies are almost predatory hiring. They're overpaying for every single role. Like they're paying 120 grand for a receptionist and we know you should be able to get one for 50, but they're paying 120. Well, unless you're prepared to start paying in that range, you're going to get the C players. The second part of it is life has just gotten way more expensive. And, and it's happened really quickly in the last two years that, you know, every time we go to a grocery store we notice that it's just, it's really expensive. Like remember two years ago when we were buying a latte, it was like 750 and it was like, that's a lot. Now it's like 950. It's like, how did, how did it go up so well, it's gone up 15%. Everything has gone up 15%. Which means our employees need to be getting paid 15 more than they were two years ago or we're not going to find them. So if you had an eighty thousand dollar person two years ago, that person today is ninety six grand the same person. And if you're not prepared to pay 96 grand, you're getting somebody way worse than you were able to get two years ago at 80, right? You're getting a $65,000 person. So you need to figure out what to pay for all of the roles that you're recruiting for and you need to be up at that 85th percent of the bell curve. Secondly is you need to give people the better kind of Life package around it all. You know, we gave every single employee five weeks paid vacation, including their sick time. And we figured out a way for the business to revolve around that because we knew that great employees, a players were not going to go work somewhere where they only got two weeks vacation. They just weren't the best companies out there. It's not about the free lunches and the massages and the yoga at work. Your employees aren't going to care about that. They're going to care about spending time with their family. They're going to care about spending time with their friends. They're going to care about being able to go on the one or two, you know, vacations a year, one vacation a year. They're going to care about having money to pay the bills. They're going to care about money to pay for basics in life. You need to get them there. And somehow it's going to come from more predictable work, more predictable work coming in that pays well. And I think some of it's going to come down to the predictable revenue of recurring revenue. Recurring revenue, recurring revenue. On the employee side, I think it's just you guys have to somehow figure out what to pay and make sure that you're paying at that level and create a better offer for them. I also would make sure that every job posting that you put out there is rewritten by chat, GPT or rewritten by a copywriter so that it pops off the page. You know, a job posting has to be like a sales letter. It has to be like a marketing letter. It has to be something that really attracts people into the organization. And most job postings, frankly, suck. Make sure that you only put on the job postings the things that are absolutely required, like stop putting down on the job posting. You need a university degree if you really don't. Right, because you're weeding people out that don't really need to be there. Next thing is make sure that you write your job postings in a way that they polarize. You want to push people away from the organization so you don't waste any time with them. You don't waste any time thinking about them, talking to them. And what I like to do is send off everyone who applies for a job. I auto reply saying, thanks for your resume. I'm not reading it yet. Please read the vivid vision of what our company looks like and feels like three years in the future. Send me a two to three minute video of why you want to help us make it come true and how you can Help us make it come true. If we love your video, we'll bring you in for an interview. What you want to do there is you want to get them to pre sell themselves on the business and you want to find out who the culture fit people are right away. But you want to push away the people and don't waste time with all the people that aren't really that interested anyway that are merely just sending out 100 resumes. That's kind of the starting point with it. The next part of this is what are the roles that you are most struggling to hire? What do they get paid?

I would say it's sort of a cross between our general manager and a project manager.

What would that person earn in a year?

The the PMs are running about total comp, about 110. GMs. Branch managers starting to branch probably about 130.

Okay, so let's call it 120,000. Yeah. I would turn to all of your current employee and by the way, I don't think you're going to find any good people for that much money. You're just not go and look at what you know, good branch managers or like. I think you have to do a comp review against others in the industry and against other similar roles outside of your industry to find out what to be paying. But that doesn't feel like a lot of money for, for really good, solid, you know, even B players. Right. I would be, I'd be looking seriously at that. But let's say that that's the computer. I would turn to all of your current employees and say here's the role that we're recruiting for, here's the compensation for it. It has to be in the job posting, but we're going to give you a $60,000 referral bonus if you introduce us to anybody who comes and gets this job. But we're going to pay you $12,000 a year for five years and it's going to be paid at the end of every year. At the end of year one, at the end of year two, at the end of year three, at the end of year four, at the end of year five, you're going to get another 12 grand provided you're still with the company and the person you refer is still with the company. If you're hiring a $70,000 person, take 70 divided by 5. If you're hiring a $100,000 person, make it a $50,000 bonus. But literally take whatever the comp is, divide it by two, spread it over five years, as long as that person is still with the company and the person they bring in is still with the company. Turn your current employees into recruiters for you. It sounds like a lot, but you're not paying it up front and you're not paying it unless both people are with you for that whole five year period and you're paying it at the end of each of the years. And the person you're paying it to is now making more money so they're happier and they're not coming in asking for a raise. I would put that kind of a bonus program in place. I would also be looking pretty carefully at how much does it cost you to go out and find a new commercial account and what's the commercial account worth to you over the next one year, three year, five years? Right. So what's in terms of gross margin that you're generating? So should you be putting more of your marketing and sales efforts to landing more of these commercial accounts knowing that they're going to pay off for the next 1, 3, 5 years so you have more and more of this predictable revenue? Not putting all your eggs in one basket, but I would be doing a lot of marketing and sales and business development around finding more and more of these commercial accounts, building relationships with the commercial accounts, getting to know the decision makers at those commercial accounts, getting testimonial videos from those commercial accounts know, getting reference letters from the commercial accounts, Everything you can do to leverage all of those commercial accounts into more and into keeping them happier. But in knowing that it's okay to go spend five grand because you're going to generate 50 grand or it's okay to go spend 20 grand because you're going to generate a hundred thousand. Think of it like an Internet company does marketing where they know what their cost of acquisition is, they know what their lifetime value is, and they know the cash conversion cycle treat it very similar. I would also take I haven't looked at your website, but when we were building College Pro Painters, one of the things we realized was our website was marketing for two people. It was marketing for homeowners who wanted us to get their house painted and it was marketing to students who wanted to become a franchisee. So when you went to the website it was like boom, right in front of you. It was split in two and it was like are you student looking for a franchise? Are you a homeowner looking to get your home painted? And then it took them down two funnels. Your website might be have an opportunity to speak to two very different Groups, but really make it obvious that when you come to your homepage that there's two different groups you could be landing on. Right? And it could be information for commercial accounts, and it could be information for residential accounts, but you need to make it really easy for those commercial accounts to find the information that they need to make a decision to go with you. And then you need to find a way to make the residential accounts, you know, make the decision on the residential account side. And I hear you with the insurance, because we did it with Auto Body, with Gerber Auto Collision and Boyd Auto Body in Canada. The insurance companies are always trying to kind of pay you less and they're trying to grind you on stuff. But we also know that it's up to us to be able to charge for all of the things that we fairly have to do on the job. And we need to learn to have the confidence to charge for those things. You need to make sure that you build all of that stuff into your billing with the insurance company and don't do anything for free and find ways to make sure that that's included in all of your bills with the insurance company on all the work that you're doing. Every single job that you do. I would run some kind of a mini profit and loss debrief on that job. You know, how much money did we get paid? What was our costs, what was our overhead? And then how much money did we really make in terms of margin per hour, margin per labor hour? What did we end up working on for free that we shouldn't have? Right. Because at the end of the day, you need to get paid for every minute that you're working on that claim. And the insurance company, if they're paying, needs to be the ones that are paying for that in the auto body space. As an example, every car that came in, we had to disconnect the battery so that when we did the work, it didn't blow up the circuit and blow up the computers and blow up the radio. Well, that took time to disconnect the battery. And then when we reconnected the battery, we had to go in and reset all the radio stations, which meant we had to take time to write down what all the radio stations were so that we could reconnect them and do it all properly. Every time we had to move the car on the lot, drag it out, let it sit for two days till the parts came in, bring it back into the bay, bring it back out to lot, all of those things, that was like 10 minutes here, 10 minutes there, 10 minutes here, 10 minutes there. Those add up. We had to find a way to charge for that. It wasn't a normal part of the bill that the insurance company would pay for, but it was actually work. So we had to prove to them we were doing all of this work. If your jobs require you to drive to a store and drive back, you should find a way to include that in your bills to the insurance companies, because somebody has to pay for you guys to do the work that needs to be done to bring the home back to or the business back to. I remember learning that when I was running my house painting business and a woman asked me how much it would cost to paint her front door. I was talking to her over the phone and I said, my minimum job is 150 bucks. That was 1986. She just about lost her. This is like 40 years ago. She's like, wait $150 to paint a door. I'm like, ma', am, I have to come to your home and do a color match and then go to the paint store, come back to your home and scrape and prime and then leave. Go back to your home the next day and do a first coat and then leave. Go back to your home the next day, do a second coat and then leave. Then come back to your home a fifth time to get you, to make sure you're happy and to give me a check. I'm not coming to your home five freaking times. That's $30 per trip. It's literally not even worth my time getting out of bed for that. So I said, I'll paint your garage door and your doghouse and your front door for 150 bucks. But it's 150 bucks is my minimum. When I explained it to her that way, she understood, you need to make sure that you're getting paid for the work that you're fairly doing. And that's what I mean by you spending time on finding revenue and finding gross margin. Spend your time making sure that you're getting paid fairly for everything that you're doing. Spend your time making sure that you're charging properly for everything you're doing. Spend time negotiating with your suppliers so that you can get better discounts or trade discounts or rebates or refunds or whatever it's going to be. Use credit cards to make sure that, you know all the purchases that you put on your credit card. You're getting 2% cash back on all those credit cards. So you're getting all that extra, you know, bonuses or margin. But I would be focusing around that.

Did you do performance pay to. You were talking about, you know, getting and retaining those A players and then I hear you coupling that with like really watching margins and stuff.

Yeah. So what we did was we called it piece rate. So what we did is we pay. I would say to somebody, look, I'm, I'm paying you 60 hours to paint this house. And if you, if it takes you 60 hours to paint it, you're getting paid 60. If it takes you 70 hours, you're getting paid 60. If it takes you 50 hours, you're getting paid 60. So here's how to be efficient, here's how to get it done quickly, but I'm paying you for the 60 hours. And then we guaranteed minimum wage that if they took longer, they were at least covered on the minimum wage side. But nobody wanted to make minimum wage. We had to then make sure that we were quoting accurately and training them properly so that they could actually get the work done and give them the tools to do the work.

Were you running performance pay on managers? Like management too? I'm assuming it wasn't piece rate or how did you guys structure that part?

Well, our franchisees had the full stake in the outcome. They were making all the profit. So that was built in, was performance in the trucks at 1, 800 got junk. We pay our guys in the trucks a percentage of the gross margin every day. So they're paid an hourly rate. Plus they're paid a percentage of the gross margin that trucks generates that day. So they have an incentive to get rid of stuff for free. So they take stuff to recyclers, they take stuff to metal recyclers. Metal recyclers even pay them for the scrap metal. But then we don't have to pay to get rid of it at the dump. And they have an incentive to go, oh, there's a pile of junk over there, let's stop and let's cold call and see what we can do it for. And let's just haul it away for a hundred bucks. Like to get more revenue. Right. So they were always incentivized to get more revenue and to cut expenses. We built that into the model. What does a really profitable customer look like? What's a really profitable job look like.

Somebody who's got like a property where there's either high liability to not doing it right. You know, so like they are, they're very risk averse. So it could be things like hospitals or you know, retirement communities. In those fields, they absolutely Want things to be done right. They want us to, you know, hold ourselves accountable. So we want to make sure we have an IH at the beginning, at the end that, so there's a third party checking our work. Those are usually companies that they're not super interested in having corners cut.

It's hard to find this stuff. Right. Because it's not like, it's not like somebody's out there trying to build. It's like auto body, frankly. Like no one's out there on a daily basis going, well, maybe I'll get my car repaired today. Like we need to get them right after they get the car accident. So it's all a brand building exercise. It's us making sure that we have the brand or the trust or like you said with the commercial accounts, you land them once, you know you're going to get them the next 10 jobs they get to. Yeah, I, I think it's all around landing more and more and more of these commercial accounts and building relationships with the commercial accounts. Building relationship with the commercial accounts. Really treating these commercial accounts well and having more than one decision maker at these commercial accounts. So that when Fred leaves or Fred dies or Fred gets fired and Bob comes in, you're not, you're not losing out that commercial account because Bob doesn't know who you are. Right. That's got to happen fairly frequently too, doesn't it?

Yeah, especially maintenance managers. There's, there's a pretty high turnover there.

Who else do you have relationships with at that commercial account? Like do you have it with their finance group? Do you have it with their CEO? Do you have it with their, their head of oper? Like is there anybody that you can.

Yeah, sometimes the general manager. But you're right that, that's something that I think we need to do a better job to have multi layer relationships just so that we can. Yeah. Influence and not have somebody who's just reacting, but we can actually drive different services. And somebody who can has a delegated authority limit that's a little bit higher because that way we can pitch, you.

Know, some additional things and some ways to like stay in front of them frequently. Right. So it's either going to be having, you know, customer appreciation lunches or going to be. But do you, do you do anything around remarketing right now?

Remarketing? No.

You know when you're on a website and then all of a sudden like for the next three months you start seeing that company's logos follow you around everywhere. Yeah. You know that the only time you're that they're paying for you to see that logo is if you click on that ad. So all of those impressions that they're getting don't cost them anything unless you click on it. You guys might do very, very well with setting up with Ad roll. Adroll is very easy to work with. Much easier than Google's remarketing. Do you see ads for the second in command podcast or my book, the second in command or the CEO alliance? I only spend 300amonth and the only people that see those ads are people that have been to my website. So all those impressions are free. What you want to do is have anybody who's ever been to your website see your ads forever for the next six months so that they're always seeing you. So set it up with ad roll. Get the ads created on, you know, chat GPT or you know, design packs or somebody to create some simple ads. You need five different sizes for your ads and, and have a budget of like 250 bucks or 300 bucks a month, something low and you can target so that it's only people that have been to your website who live within, you know, 20 mile radius or 50 mile radius of your offices. If they live in LA and they've been to your website five times, they never see your ads again. If they live in Chicago and they've been to your website a hundred times, they never see your web, you know, your ads again. You only want people around Sacramento and around San Francisco and the East Bay, wherever. So what you do is you geotarget them and you don't have to spend more than 250, 300 bucks a month. What you want to do is you want to create a way or a reason for all of these multiple decision makers that all of your commercial clients to come to your website. So it's creating some kind of a lead magnet or some kind of a blog or some kind of a video, some kind of a tool or a resource for them or a contest or something that gets them to come to your website once so that then they're getting ads constantly following them around. When we were targeting Home Depot, we were trying to land a big contract with Home Depot at 1-800-got junk. We couldn't get in the door of the executives at Home Depot in Atlanta. And we knew who the five main decision makers were. So we figured out where they lived. We found their house. Well, you know as well as I do if you live in Oakland and you have to drive to like downtown San Francisco, there's Pretty much only one route that you're going to take to get there. So what we did is we'd stand on both sides of the East Bay Bridge and we would wave at traffic every morning because we knew that they'd get to the office at 8am so we'd stand there from 7:40 in the morning until 8:15 in the morning, waving at traffic. We also put signs. We reversed the map from the bridge back to their home, and we put signs along the streets to the bridge. They didn't realize we were targeting their streets. No other streets for 12 blocks on each side of them were getting any marketing, but all of them, what would happen is. So these executives, when we started calling them, like, we see you guys everywhere. I've seen you every morning for three weeks, like, it's working. I see your signs all over the place. The only reason they saw our signs was because we had them along the path that they took. So what you need to be doing is make sure that your signs are around their offices, make sure that you have billboards around their offices, make sure that you have remarketing around their offices, make sure that you have branding, like anything you can do so that those people at those commercial accounts are seeing you and remembering you and caring about you. When I was running the house painting business, I was only 20 years old, and all the pros, all the guys that had been running house painting businesses for 20 years would get to the paint store to buy their paint. And I was always last in line. I'm like, that. That ain't okay. Like, I'm hustling. I got six jobs going. I need my paint quickly. I don't want to wait behind Marcelo because he's been your client for 20 years. I started bringing donuts two or three days a week. Donuts only cost me like 12 bucks to buy, like a box of donuts. And I would bring it into the paint store and guess who was getting their paint first thing every morning? This guy, right? I would phone in my order, I used to fax in my order, and I would show up and I'd grab my paint and I'd leave. And the guys didn't figure out what was going on. The paint store said to me, if you fax us your order in the morning, before all the Italians show up, we'll mix all of your paint. You come in, give us our donuts, we give you your paint, Bob's your uncle, you're out the door. I'm like, this is amazing. So now I wasn't Waiting at the store at all. What you guys need to do is put your time and energy around as these commercial clients, finding more, building relationships with more, getting to know more of the decision makers, getting more of their business. Asking like, do you have any idea how many jobs they're doing a year? And do you know how many of those jobs you're getting versus somebody else? Right.

No.

Right. We went into public storage one time. We were talking to public storage, and we said, you know, how much junk removal do you guys do? And they're like, I don't know. Like, could you find out? Like, yeah, we'll just ask our accounting guy and he'll tell us. So a couple days later they came back and he said, yeah, we do $1.7 million a year with junk removal. We're like, how much did you do with us? They're like 300 grand. So you did 1.4 million in junk removal with other companies. What would it take for us to get more? They're like, I don't know. Could we get a discount? We go, yeah, we'll give you a 10 corporate discount. They go, good, you can have all of it. We were in 78 of the markets they were in, so the next year we got 78% of the $1.5 million. So the only way you're going to get more of the business is to find out how much of the business is there and how much of it you can get and what you can do to get it. And then how do you treat them well? How do you care for them? It's going to be by spending time around that. Do the insurance companies in the. In the auto body sector, the insurance companies used to tell customers where to get the repair done. Do they do that in your space?

They do. And that's where ServPro comes in. So ServPro is pretty much in bed with them. With most of the. With most of the carriers, servpro's built.

Relationships with the adjusters or with the carriers. It's a really hard. It's a really hard game to get in. But what you want. What you want to do is, is make sure that your clients know that they're allowed to use anyone that they want. And you have to give them the tools to tell the insurance companies that they don't want to go to Serve Pro. They want to come to you. It's educating them that they have that ability to come to whoever they want. And then you're also giving away 10% of your margin, probably. And it's not worth it. But that can be, you know, videos that you send out to your customers and commercial base. It can be emails you send out to your customers in commercial base about their insurance rights, about their, you know, how they're getting taken advantage of by the insurance industry. So you don't want to slam the insurance industry, but you do want your customers to know that they can come to you. It's also going to be helpful just to go in and have coffee with them and talk to them and make sure they understand that kind of stuff. Right. Find out what's going on. One of the things that we did really well in the auto body and that was really hard in. And we did well in the house painting, but it was really hard. It got junk. When I joined Brian, he had 12 franchises. When I left, we had 330. When, when he had 12, he had a guy in San Diego, he had one in San Francisco, he had one in Chicago, he had one in Buffalo, he had one in Vancouver, one in Seattle. They were everywhere. Like they were all over the place. Like they were literally. There was no franchise. You had to take a plane to get to the next franchise. There was no economies of scale. You couldn't share resources, you couldn't, you couldn't all benefit from the same marketing dollar. You couldn't benefit from the same hiring plans or, you know, you couldn't pull all the employees together to ever do anything. I would only grow in between where you are now in Sacramento. I would never go outside of those two dots. I would literally draw like a ring around those two. And that's the only area you can grow until you know for sure that you're doing all of the potential work that you could ever do in that market. Because it's going to be easier to take one employee from SAC and have them help out in San Francisco and help out in Oakland and help out in San Mateo and help out. But you can't send them down to San Diego or down to la. It's going to be easier to share marketing resources and share hiring resources and share training resources and share, you know, company perks and company picnics and, you know, staff training events. If. Because Sacramento and San Francisco are, they're like 90 minutes apart, aren't they? But there's, there's a massive amount of population still around those two that you're not hitting yet. Then I would go down there and do sales calls, but I wouldn't, I wouldn't go down there and do try to open up locations, Walmart strategy was pretty brilliant. Walmart back in the 50s and 60s did not go after Los Angeles and San Francisco and Chicago and Seattle. They went after Grass Valley. They went after the secondary and tertiary markets. There's a lot of work to be had in these cities of 10,000, 20,000, 30,000 people. I would go after all of the commercial accounts that are in those markets where they're not. Where they're not serviced well, where everybody forgets about them, where they're only dealing with Fred and they want to deal with somebody who takes care of them and does their work properly. Where they're laughed at by their head office in Los Angeles. Right. But they still have a presence. I think if you focus on those markets, you could do very, very well. And labor's more, labor's less expensive in those markets. You know, somebody who lives in Grass Valley versus living in San Francisco doing the same job, you're paying them 30% less because life is 30% less. I would be spending your time doing the sales and marketing and remarketing and building relationships inside of SAC in San Francisco and I'd be going after that market for sure. And I think you're going to have way better results going after the secondary and tertiary markets versus the bigger parts of the bigger cities. How many jobs a year do you need to double the size of your company?

600 jobs a year.

600 jobs a year would double the size of the company?

Yep.

Yeah. So I would, I would put a plan in place for how you can find that in your local market. Is, is that possible in the market you're in or is that just. Is there not enough jobs that are there?

I think one of the issues we're coming up against is we've kind of placed ourselves as like the premium company in the industry. So a lot more like the Ritz Carlton, small slice of the, you know, the overall market. Let's go after the top five, maybe 10% of the market, I think in a 90 minute radius probably would be tough. We would probably need to expand a little bit, but there's probably maybe enough out here.

It's like everybody wants to go to the Ritz Carlton but they can't afford it. They want to have the Ritz Carlton service. It's like we were the Starbucks of junk removal. But there was a hipster coffee place that charged more. But there were also all the places that charged less. I would see if you can deliver that experience that you deliver to the Ritz Carltons and don't try to deliver it to like the Holiday Inns, but you know, deliver it to any hotel that is four star or better or four and a half star or better. Like in the house painting world, we didn't go after the mega mansions, we went after the upper class. Right, but we didn't go after the upper, upper class. We went after like upper middle class and upper class. I think if you can kind of drop down to the four and a half star, you'll win. They want to have what the five stars have, but they don't, they don't necessarily have the relationships. Nobody calls on them. They're served by the people that should be serving the Holiday Inns. Have you ever gone to a Michelin, like a three star Michelin restaurant? They're not that good. I've been to lots, I've been to lots of Michelin, three Michelin, two star. Like there are plenty of fantastic restaurants with fantastic food and fantastic service without a Michelin star. If you're only going after the Michelin star restaurants, you forget that there's gazillions of other restaurants out there that are fantastic that just don't have that Michelin star rating. I would be going after all of those other businesses and commercial accounts that are just really great but aren't necessarily the five star, you know, super elite. So we grew in what was called concentric circles. So when we, when we built Gerber Auto Collision, we just decided where to start acquiring shops. We would go in and we'd buy up that territory. We'd buy up that territory. And anyone in your industry that is 60 years old or greater, right, in terms of an owner is tired and doesn't want to have to keep running their business. They all have what I call the golf course number. They have a number that they want to tell their buddies at the golf course that they sold their company for, but they're not going to bother telling them the terms that they sold it for. So if you can go in and say, and here's the target price, one times revenue plus five times profit, it's the average of those two numbers. If you can offer them that price, 70% upfront and 30% paid over over three years, if you can get the bank to finance 70%, they're going to take the other 30% over three years. You get rid of their expenses, you get rid of their, their finance people, you get rid of some of their marketing people and you keep the people that you like, you keep the accounts that you like, you over service those accounts that they have. You could probably scale up and hire the people quicker by buying their companies than you could be by hiring people one or two at a time away from those companies.

So you think it would be faster than greenfielding even if these are like micro. So like we're looking at like micro offices that would do four to five million dollars a year kind of deal. Like not huge, huge enterprise kind of. Yeah, they could still be faster to acquire than greenfield.

Well, what's nice about it is that, that you can pick up how many of their employees do they have? 10, 12. Yeah, but now you can get 10 or 12 of their employees but fire three or four of them. So you end up with the eight really good ones. You get rid of their accounting department, you get rid of some of their office expenses, you get rid of all the CEO's expenses because he's, you're not running them anymore. And now you've got a business that cash flows itself and you're paying for 30% of it over the next three years. Plus you go out and find a bank that will consider that 30 as equity in the deal. You can buy these businesses with no money down, right? You can buy these businesses and, and all of a sudden be cash flowing yourself pretty quickly. Where most acquisitions fail is they want the owner to stay. They want there to be some kind of an earn out. You're trying to be aggressive in negotiating on price. So you're trying to buy 10 companies. You only ever buy one if you structure it in the way that I'm suggesting. You try to buy 10, you'll buy nine of the 10. The owner leaves day one. There's no earn out. It's, that's the deal, that's the price. Because he's not going to want to be doing anything anyway. You're also not going to want him to stay anyway. So just, and then if you need them, pay him three bucks an hour for some consulting once in a while. So now an owner is going, wow, I don't have to stay. There's no earn out. I get a good price, I get a chunk of it up front, I get a chunk of it over time, which is good for taxes. And you're going to keep some of my great people, okay, let's do it. And if you pay a price that's the average of 1 times revenue plus 5 times profit, the average of those two. It's usually a price that's pretty reasonable. And if you do two or three of those, all of a sudden you're doubling the size of your company. Quite quickly. And then you're able to then use that additional gross margin to build out the team and to build out the next stage of growth. We're trying to. You're trying to get to that next hurdle or get over that next hurdle. It also allows you to grow very strategically. Like you can actually say, I would love it if we had a location in this market. Well then go buy one or two of those companies that are in that market. There wasn't a lot needed because I knew I wanted to buy them and we knew we like the price already and there was no earn out. So it didn't matter as long as we agreed on terms. Get the hell out of my way. We're going to grow. This thing can be done quite quickly. So yeah, we were closing pretty quickly and we closed almost every deal that we wanted to close. Here was my sales pitch. I'm either buying you or I'm buying this other company. I would name them both or I'm going to open up in this market anyway. I would rather buy you. And here's the price I'm willing to pay. And by the way, there's no earn out. You don't have to stay. You get to walk away. Day one, they're like, really like you just take all of their objections off the table and make it real. They're like, this is interesting. And by the way, if you don't say yes, Bob probably will. But we're get, we're coming into Grass Valley. So I'm either buying you or I'm buying Grass Valley. You know, remediation. But one of the two of you is going to be our, our partner here. And I know you don't want to stay and keep working for me. You're an entrepreneur. You don't want to work for me, I don't want you to work. I don't want you to work for me either. Let's just go for coffee once in a while. I was 28 years old negotiating these acquisitions for the auto body and we did almost, I think everyone that I actually talked to, we bought them. That can be really interesting for growth, especially when it's tough on hiring the other. The last part is, is there, is there any way to charge the insurance companies more? Is there any way to increase your billable rate, Decrease the amount like the percentages. Is there any way to bill for more hours? Because your prices are going up. Right? Right.

Our prices are going up. I think that there is. There, there is probably a little bit of a play here. I Think that sometimes we don'. Hours, like internal hours like you were mentioning. Just like even the review, like our administrative hours aren't always charged.

You have to charge for every minute you spend on a job. For sure.

Yeah, exactly.

You're still in the weeds. It's.

I'm still in the weeds. Yeah. I'm really, really just way too involved in, in stuff and stuff that is just really tiny.

What was your take home pay like over the last 12 months? What do you pay yourself a year?

It's about 300 thou.

Okay, so 300,000 is 150 an hour. So do you have any tasks that you do on a day to day basis that are less than 150 an hour tasks?

Absolutely.

I would if, if I was on your board, I would fire you if I knew that I was paying you 150 an hour to do 20 an hour work or 30 an hour work or 40 an hour work. So the first thing you need to do is you need to get everything off your plate. That's below. At least use Dan Martel's idea of buy back your time where he takes the $150, divides it by four. So if you're doing anything that's less than $37 an hour, at least get that off your plate. At least stop doing it or delegate it. Get a virtual assistant. Get a full time ea. Get somebody based in the Philippines, wherever, but. Or just stop doing the work. But you should not be being paid $150 an hour to $37, $20, $50 an hour work. That's number one. Number two is delegate everything except genius. Find the two or three things you're really good at that you love doing and start delegating anything that drains you of energy so that you can show up with really good energy and with lots of enthusiasm. You can show up actually kind of willing to kind of take on the next thing. But if you're working on stuff that drains you, it's impossible for you to show up as the best person in the role.

Is there anything that you would focus in on like you come into the office or whatever and you did these five things every day?

Revenue, revenue, revenue, revenue, revenue, gross margin, gross margin, gross margin. Those are two. Right. And then, then growing people and, and the energy. So what are the things that I can do to be like the chief energizing officer? To grow the energy of the group, to infuse the group with positive energy. And then how do I grow people's skills? Because often we'll say Well, I can't delegate it because nobody can do it. Well, delegate it to them and then spend time teaching them how to do it. But we need to get everything off of our plates being done by people that are paid a lot less than us so that we can effectively work on the stuff that will grow the business, which is revenue and gross margin.