#217 We Hit $1M Profit — Here’s Exactly How We Did It

Real talk, revenue doesn't matter. EBITDA is the value. EBITDA is how your business is valued. So when you want to go sell your business, or when you want to bring on partners, or when you do whatever your life involves, nobody's going to give you for a bunch of revenue and no profit.

You optimize for growth, or you optimize for profit. There's really no in-between. To get to your first million in EBITDA, what does that look like? What are the big steps to cross that threshold?

Here's the secret sauce.

I'm ready. Is this a welcome back situation?

Dude, welcome back.

Welcome back.

Appreciate you just welcomed us back.

Welcome back. Welcome back into studio for me and welcome back to owned and operated. Yeah, dude, I'm pumped.

Yeah, me too. That first second there reminded me of like Wayne's World.

Wayne's World all the time. Yeah, yeah. You're aging us.

Yeah, I am. Yeah, I am. Uh, 91, baby.

Dude, what's going on?

It's, uh, June.

Mm-hmm.

It's, well, you know, I think last time we talked last week, it was not yet hot as balls.

Correct.

It is now hot as balls. Specifically Satan's balls.

That is a term.

That's actually—

that's a term. That's a degree.

It's good. It's a degree. It's on the, it's on the thermometer. Satan's balls.

It's, yep. Right above like 90 degrees and humid.

Yeah.

I think it gets into that range and then for some reason it just absolutely destroys all HVAC units.

This first nut.

I love it.

It's incredible. The month is actually going okay. Like June started off slow, I would say slow, but like we're actually doing okay. Like we're gonna be within 5 points of budget.

Yeah.

Which felt pretty good. What we're finding, which is kind of interesting, is further we get, the easier, I'm air quoting if you're not watching the YouTube, but the easier it gets. So we did a $610,000 week last week and it just felt like a normal week for us.

Oh, because infrastructure was in place.

Yeah. Just good.

That makes sense.

So it's like, okay, just a little bit more, a little bit more, a little bit more. So that's been really interesting as the team has matured enough. And our manager said that too. Like our HVAC manager, like we had a blowout week last week in HVAC, like 50% more volume than, than the previous week. And he was like, honestly, it felt like fine. And I was like, yeah.

That's wild. 'Cause like we're on the other side of that where we're having great weeks. We're gonna, we're ahead of—

Well, you, it's Herculean.

We're ahead, ahead of budget. But like now we're—

Everyone's flush.

How do we—

Yes. Yeah. The, the crazy part too, that was just last year.

Yeah.

Just like we felt like everyone was pushing a boulder up a mountain. And now it's like, I think the boulder's rolling down the mountain. Like, it's just like, okay. If you've been listening to the show for a while, you know that we've been big fans of ServiceScalers. One of the things that they just dropped that we are really excited about is a pay-per-lead program. So what they help you do is they help you directly gain access to leads and scale up your lead partner program. Go to servicescalers.com and say we sent you.

Well, the cool part though is like we what did what where I will agree with you is like we've been focusing a lot on sales process and technician training and service, and so the sale process has actually gotten much easier for us. Our guys are doing flips better; we're converting better. But now it's that that like how do you handle all that data and afterward and get it to the installers? And how do you install quickly and properly and follow up? And like small jobs, big jobs—it's a lot. And so. From a capacity standpoint, that's where we're starting to feel it is just going, wow, we've gotten so good at this side of the puzzle. Now we have to figure out the other side of the puzzle, which is equally important, if not more important.

Yeah.

Right? 'Cause if you, you can sell till the cows come home, but if you can't install it, it's not worth it. Like it's more trouble.

Yeah. So I agree. So interesting. Good. Like I think the team's there, we're ready. The way our years have historically worked is The first 6 months of the year is 1/3 of our revenue and the back 6 months is 2/3. So July's next week. So we're basically getting ready for the actual money part of the year, which we're pretty excited about. June was—

I hope we do that.

Pretty close within, like, is it, it's not the same for you?

I think, I don't—

Ours is very—

I break it down by month.

1/3 in the first 6 months, 2/3 in the back 6. So like last year, 100% of our profit was driven from July to December. What's going to be fascinating this year is we're going into July at 1.7 of EBITDA. Yeah. Which like last year we went into July at negative a million.

So that's what I was going to say is the more interesting part is I'm looking at businesses, we're trying to acquire businesses as usual. Yeah. And I see businesses and I'm like looking at it with the most interesting take of like, this is a great HVAC company, it's doing $3 million or whatever. And you look at it, it's like, P&L on a monthly basis, it's loss, loss, loss, loss, loss. And then June hits or May hits and they make $800,000. Yeah, they make like $150,000, then $80,000, then $90,000, and then loss, loss. And then $200,000 and then $100,000. HVAC's tough.

They end the year— that's why I think HVAC's tough.

More months were losses than gains, which is crazy.

Well, we set out this huge target we set out this huge target that we, that we hit of 12 straight profitable months.

Yeah.

And if you're in HVAC, you know that that's not a thing. So, and we achieved it. So from, from May through April was 12 straight profitable months. And now we're on— so we're finishing up May, we're finishing up month 14.

Yeah.

Of like straight in the black, which is great. And like the number's been as high as 17 and as low as 5. But still hitting in the black every time, which is crazy. Totally crazy. I mean, it's been a huge win. But what we were going to talk about today was how to make your first million dollars, specifically making your first million dollars of profit, of EBITDA, not of revenue. Like make your first million dollars of revenue, like go get it. But let's talk EBITDA.

It's the harder number, right? Obviously, because that means that your business is probably, if you're HVAC, plumbing, electrical, your business is what, somewhere around that $5 million in gross revenue mark to get there, running at about what, 20?

I mean, that would be lean.

For first million? Oh, so that'd be like 20%. If you're at 20%, that would be what, $700,000, $800,000 then? My math is not going to be there.

I mean, I'm sure someone out there is driving a million bucks on $5 million of revenue. I have personally not seen it. No, I'm sure someone is.

We're only going to be at half of that. So you'd probably have to get double. So it's probably closer to 10, maybe a little bit less than 10.

I think 8 to 10.

8 to 10.

Yeah.

Because then if you're running a 10 to 15%, that's probably in the ballpark.

Now granted, we didn't hit $1 million in EBITDA when we were 8 to 10, but I think because of how we were growing, we bought our way from 4 to like 11, and then we were in J-curve. So J-curve is when you're investing back into your operations, and it can either be organic or I think it's talked about a lot, acquisitions. Like you bought something, you invest, you J-curve down in profit. So that's what happened in this case. So we bought 3 companies, we invested a ton, we J-curved down in profit. So we only hit $1 million EBITDA last year and that was at like 20-something.

Yeah, that's what I was gonna say. Like high growth, when you're in high growth mode, it's so hard to hit it because you're buying trucks, you're buying—

Well, trucks are CapEx.

CapEx, excuse me.

But still you're buying, Usually people investing in marketing and training, bigger facilities, facilities, leasing, not owning. So that stuff that would impact, you know, if I bought a building that, you know, that could artificially inflate my EBITDA, if, if we weren't investing in people that could inflate EBITDA. Yeah. Yeah.

So yeah, high growth. I mean, you're probably putting more into marketing than you need to be running, you know, 11, 12, 13, 15% if you really want to get there.

Growing like crazy right now. Apex down in Columbus, Sammy, he just did a show and I listened to part of it and they're growing like crazy. They're $40 million and they started like 5 years ago. They're moving quick. They're like top line, right? Yeah. And so it's awesome. He's doing a great job, but they're a $40 million business spending 15% marketing. Yeah. That's a lot. Huge. No matter what way you spin it, that's a lot. And that's probably most of their EBITDA and they're good with it. Obviously, like they're gonna eventually flip to optimizing for profit, but that is a sacrifice for the moment.

'Cause you get two, there's two really two options, right? You optimize for growth or you optimize for profit. There's really no in-between.

Well, about a year ago we switched from growth to profit and at the time kind of nerve-wracking. It's, you have to separate your, or I have to separate myself. Maybe other people are better at this than me, but I do really like ego out of the equation. Revenue doesn't matter. Yeah. Like real talk, revenue doesn't matter. I think on one hand it's like cool and it's fun and it's all that stuff, but like EBITDA is the value. Yeah. EBITDA is how your business is valued. So when you want to go sell your business or when you want to bring on partners or when you go to do whatever your life involves, Nobody's going to give you shit for a bunch of revenue and no profit. But if you're running $5 million of EBITDA, then that business is worth something.

If you run $1 million of EBITDA, that business is worth something.

Yeah. Yes.

I mean, that's generally like, I've talked about this before.

It's a threshold.

It's like, that's the big threshold.

Yeah. So it's 1, 2.5, 5, 10, 20 are the thresholds of big value. Where like once you cross those, you know, different level of buyer, different type of, usually another turn or 2 on the multiple.

Yeah, exactly. And so to get to your first million in EBITDA, I mean, we aren't there yet. What does that look like? What are the big steps to cross that threshold?

Yeah.

I mean, first, as much as revenue doesn't matter, revenue at some point matters 'cause EBITDA generally is a percentage.

Yes.

Like you don't really want 100% EBITDA.

Well, yeah, I think sustainable, Yeah. So something that, let's use that example of like the $5 million company running $1 million of EBITDA. That's not a sustainable $1 million of EBITDA. So if somebody approached me with that deal, I was like, hey, do you wanna buy this for an 8 times? I'd be like, fuck, like, go fuck yourself. Absolutely not. Like, you running at 20% margins at $5 million.

Yeah.

All that's telling me is you didn't invest in anything. Like, you have literally done nothing. And now I have to come in and that million is gonna turn into $400,000 real quick.

Yeah.

Like, oh, you're not driving leads or you don't have anyone in the office and AI runs it all. And, you know, like someone's going to have to get hired. So—

As much as people want to pretend that their business is really optimized, that the owner doesn't work and that they're getting $1 million EBITDA at 25%, it's like it's not real.

Well, you can. Now this is— here's the—

You can. I'm just saying—

Here's the secret sauce.

I've never seen it.

Here's the secret sauce.

I'm ready. I'm backing up.

Yeah, yeah. This is, this is good. And I think we'll talk about different layers at some point, but like, we're talking about $1 million of EBITDA today. But when you cross $5 to $10 million of EBITDA, you can again be at 25%. It's just this time it's real. Yeah. So like 25%, there's companies doing $40 million with a 25% bottom line.

But that, that makes sense in plumbing. But that makes sense because you have, you have buying power. That's— Yes.

So you outgrow your overhead, you have buying power, you might have like Geographic distribution, and you need almost no overhead at some of those new branches.

Economies of scale.

Totally.

Just absolutely nuts.

I mean, we outgrew our overhead last year. I think I talked about this a lot on the show. Hey, our overhead for quarter 1 was literally less dollars, and we drove $3 million more to the top. Like, that's crazy.

Yeah. And you've talked about this too. Like you're able to pull levers. Like, hey, I'm—

I've gotten— We call it turn dials now.

Turn dials now. Thanks, Jack, for telling Jesse and John that. Um, but turning— I actually think it is a lever in this case though. You're like, hey, the lever's weekends. Boom. My lever is this specific initiative that we're gonna do. And hey, boom, we pulled that lever and then out comes $5 million.

Yeah.

Like, don't— it's much more difficult than that. But like, the reality of it is I do think that there's more— there can be more focus on like, hey, we're going to tweak this thing and turn on weekends or start selling this additional product. And it just absolutely expands because there's no more overhead needed. Weekends, yes. But like adding an additional product line, not really.

Yeah.

Right. Outside of maybe some training on the new product and installation training. But realistically, like there are these levers you can start pulling Yeah. There's really tiny ones that I feel now and I'm like, oh, that was a lever. That feels so good. This is huge. Uh, and it like produces $100 extra K, but that's something. It's something. And that's how you grow. Yeah. So being able to see those levers.

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Yeah.

I think that first million is brute force. It takes so much more work for someone to cross their first million than for me to add another million of EBITDA now. Our budget this year was about $5 million of EBITDA. We are roughly pacing like $4.8 maybe, but we're feeling pretty good about it. So if I, next year we're expecting to go from $4.85 To like 7, 8, because it's just sort of like turning dial, right? It's like, okay, we're lean here, let's continue experimenting here. We think we can drop $100,000 of expense here, but that first million is just— it's brute force. The owner's gonna be carrying a lot of weight.

Yep.

You're gonna have a lean management structure, a lot of automation, and pricing jobs well. Like what we've consistently learned In our business is we're a gross profit business.

Yeah.

So when I was growing the under 10, overhead was always too high. Every metric I ever looked at, our overhead was like, I mean, there was years, not months, but years where old John over here ran a 45 to 48% overhead.

Yeah.

And gross margin was 50.

Yeah.

Like I had 2% years and—

I mean, that was like ours last year though. We grew 100%, but our net at the end of the year was dogshit. 5%. Totally. Which is great for growth, but man, does that hurt? Oh yeah. When you look at any other metric, if you look at like, hey, we lost this job because of X, Y, or Z to make up the loss on that job, a contractor doesn't pay because you're doing some GM stuff that you shouldn't be doing. Yeah. Like you miss out on the $10K that GC owes you.

Yeah.

To make that up, stupid. At 5% net, absolutely stupid.

Yeah. So I think—

sorry, diatribe.

I think get revenue big enough to be real is probably the first one. Because I think the danger of trying to optimize for EBITDA too early, I do think there's a danger. At $5 million, if you're running a million of EBITDA, like I said, you are just underinvesting.

Yeah.

So that's not sustainable. So when you want to go back to growing and make the business actually saleable, like a good thing to get, you know, move on with your life, who's gonna buy it at the multiple you're looking for? Because anyone's gonna look at that and say, it's too small and that million of EBITDA is actually $500,000. And like everyone knows it, you know, this is fake. So I think that's why it's brute force is you have to get to a more reasonable number. $8 million, $1 million of EBITDA feels really healthy to me. $10 million, $1 million of EBITDA feels like, okay, you're probably investing in growth right now. $10 million's a hard threshold. So I think the first one is brute force, get the company bigger.

And the easy way to do that is just to buy your way through it.

It's certainly faster. I don't know that I would say easier, but definitely faster.

I mean, there's huge step changes that come at that $5 million mark and $7.5 million mark just from management. And like you're saying, running 48% overhead at a 2% or 3% net just is so difficult. It's so painful.

It's tough. Well, and we contrast that now, our overhead's like 34% or 33%. On a strong month, it might be 32%, I hate that for you. And so it's sort of like we literally just outgrew it. Like we just outgrew it. It was fucking awesome. Loved everything about it. But yeah, so I think get big enough, brute force your way to getting big. I think you can optimize on the way up in stuff that like literally didn't exist 5 years ago.

Yeah, definitely. 100%. But that's an optimization for like, hey, I need more money to then put back into marketing or I need more money to pay technicians. It's not that you're not reducing expenses to—

You're just—

To increase. You're just shifting it somewhere else.

Yeah.

So it ends up not really mattering. Like, we, we, I mean, we talk about this often, is I shift off most of my labor in the office to international contractors.

Yes.

And all that money goes into marketing or into paying—

Totally.

Technicians more.

Yeah.

Because recruitment's so hard, like you have to pay the technicians better to bring them in, et cetera, et cetera. So like, how do we find that? And I think that's part of the brute force though, is just understanding that None of that money goes into my pocket. It all goes straight into growth initiatives.

Yeah, yeah. I think the next thing that we'll hit growth initiatives is there's a data component that we didn't dial in till like 2— now granted, it's dialed in now, but we should have done it earlier. And that was ROI of those growth efforts. Like, is the thing we're investing that hard-earned cash, Is it doing what we want?

I hate that you're saying that. Yeah, because I know it's something I don't do as well as I should.

Yeah, we're locked. Yeah, we are locked in on it. Uh, maybe after this I'll show you the spreadsheets, but it's really interesting. We got that locked in to the point now where it's like a SOP, like someone in the Philippines actually like, like, all of it, which is kind of amazing. Um, so I, I, yeah, I think really locking in like ROI on your marketing spend. Is it doing what I want? Yeah. Is this investment doing what I want?

There's a backside to that too, because like we do some ROI work, but the other part to it is actually having the individuals or having the systems and processes in place to turn on and off. Because I think, I think smaller contractors, a lot of the time they think that, you know, the more leads, the better. Yeah, but I've seen your team and they're animals. Absolute animals.

Marketing is a contact sport.

Your marketing team, I'm in love with the whole team.

Have you attended any of the huddles?

No, but I would— I go in there and just bug them and like, what do you guys do with LSA? What do you guys do with this? And they're like, oh, we turn this on and this off and we're modulating this and doing this.

And I'm like, it is really best defined as a contact sport. Like, it is a contact sport.

But they're very active in managing.

100%.

And so me as the person, I don't— $2 million budget.

So if we don't manage that, so we have the opposite problem that most people have. There's unlimited leads. We talked, we got in a heated discussion about this the other day.

No, don't bring this back up. Don't bring this back up.

But there are unlimited leads and all you have to do is find the different ways to get them, which I don't think is that hard. It's maybe challenging, but it's not that hard. Anyone can do it. So I think you can go out and you get We have 15 lead partners now.

Yeah.

That's a lot. Like most companies are like 1 to 3 channels, 1 to 2 channels. We were 1 to 2 channels until 2023.

Before people go out and get 15 lead channels though, I would say that probably keeping it to a manageable—

Yeah, yeah.

Keep it— Don't worry about that.

But my point is with 15 lead channels and they all have leads, you can go well past $2 million Very quickly. Yeah, so we agreed. You know, we've had errors where somebody leaves the lead budget on and we lose 20 grand in a weekend. We just lose it. Like it's gone to the ether. So we got that happened one time last year and happened a few smaller times, but it was $25,000.

Well, it's like we are in this heat wave right now. Yeah, we shut it all off. That and that was the thing is like we dropped all I but it's me because I don't have marketing people. So that's that's why it's so important is because it's I have to go into the system while I'm fighting fires. Yeah, I ran calls. this week. Yeah. So I'm selling units. Yeah. Uh, because we lost one of our top techs, so I'm, I'm stepping in. And you know what I mean? Like, it's a contact sport because you're also fighting fires at the same time, but you have to remember to turn them off, or at least turn them all the way down. And they're not always right. There's— you have 15 lead partners. We have like 6. Yeah. Which is a lot to manage. It's like multiple LSAs, PPC.

Yeah, PPC's a contact sport.

Aggregators. And if you leave an aggregator on, man, they got leads.

They got leads.

They're going to bill you and you're just not going to go anywhere with them.

Yeah.

You're not going to be able to service them. They're going to cancel or go somewhere else and you're just wasting money.

Yeah. I mean, so that for us is a million-dollar EBITDA gain.

Yeah.

Like that's, that was a really big deal for us was dialing in marketing spend.

Yeah.

Like we're, we'll do $2.5 or $2.6 or something million this month and I think we spent $170,000 on marketing. Yeah, it's locked in.

It's amazing.

Yes. What's that, 6%?

Yeah. And so I think you're right. That's a huge unlock to be able to—

What's the ROI?

Is knowing what the ROI is. You're spending. Yeah. Where it's the ROI, where you're spending. Because I know it's on my list of next things to do.

It took us a long time. So if that makes you feel better, it did take us a year to get to the point we are currently.

I still think though, That the timeframe, how long it takes or how difficult it is, is partially irrelevant to you needing to do it as a—

100%.

Most important thing. Yeah.

That was more of like, it's okay that you're not there.

Yeah.

But like, if you start today, it'll be done in a year.

Yeah. Because—

Not as cool as me.

The reason I say that though and bring it up is actually a compliment to you in the sense that we started talking about gross profit and figuring, because I know that's what the next, probably the next place you're going is like, Know your data, know your gross profit number.

It was going to be fast reporting.

Yeah. Yeah. And that was huge unlock for us. Like the reason that we're able to do stuff and make the decisions we are today is because we have this fast reporting system and it was hard. Yes. Like it was not easy, but it's been one of the best things to do for our company. Yeah. We went from like we talked about earlier in the episode, we went from loss, loss, loss, loss, win, win, loss, loss, win, win. And then that was our year. to now focusing on, okay, win, win, win, win. Our first quarter being in the worst, the first quarters are terrible. You won every month in that quarter. I think we lost maybe in April.

Yeah.

But January, February, March, win, win, win. April win or May win, April loss. And then June's gonna be hopefully a win.

Yeah.

But like, that's huge 'cause we're making decisions like we're wrapping trucks and we're spending this expense money on new uniforms and branding exercises. So like those are all based on having that good data so that we don't have losses. Like, well, I'd rather, you know, do one truck wrap every 2 months if it doesn't mean that I'm gonna lose that month, 'cause I don't wanna lose ever.

Yeah. So yeah, I mean, fast reporting and maybe access of data. Yeah. Even like transparency in data, it might be the right way to think about this. So what, you know, we were accomplishing this beforehand, but are we locked in daily on gross margin? And not just we as the owner, but like who else knows?

Yeah.

And how do we spread that information as widely as possible? I got really passionate about everyone needs to know the score last October. And it's, I mean, there's been like a few challenges with it, But we went open book P&L. I think I've talked about this on the show.

Yeah.

Which, I think most owners, that's like—

Scared to do that.

That's not a thing. And I think, one, I don't know that I cared. I was surprised at how little I cared because at a certain point, this is a $30 million business. There's 165 people in that building. No one thinks I'm ripping 2.5 off the Like that.

That's what I was just going to say is I think on those open book P&Ls, a lot of people are afraid. I'm not afraid because I don't take anything out of the business. Not a personal piggy bank. I think a lot of owners, they get really, really comfortable and they rip a little bit here, they rip a little, or their BMW or boat payments inside the business.

Yep. Yeah. We run a clean set of books and, and I also clearly communicate. So every month it's the 2nd Wednesday of every month. Open book financials. Here's what happened. Here's the wins, here's the Ls. We talk about cash up or down. Did we hit our cash goals? Yes, no. If we didn't, what happened? And often it's decisions I make. Hey, we didn't because I put $100,000 into CapEx and we bought a bunch of vans. And last month we had a debt paydown of $100 grand. So yeah, cash went down because that was $200,000. Yeah, exactly. And our net profit was In May, it was low for us, which I know it's a big number, but it was low for us. It was $187,000. So that's low. That was not a good month. So we had a net cash loss of $13,000. So we talked about that openly. And I think everyone has to know the score and you have to be able to spread it wide. And I think a part of the reason I didn't care is because for 6 months prior to that, I had been doing this open by department every day, labor, Material, like we have a daily gross margin. Yeah. And on there, we put days to break even. Our break even happens at $1.567 million every month, and everyone knows that we cross that, and our net profit is there on the sheet. Like hey, here's what we're pacing at: 200, 300, 400. So yeah, I think we just went really wide with it, and we got better at reporting. Yeah. And that locked us in. So when we knew our break even. To the day. Like, I broke even like last Friday, so I had like 7 freaking days to just rip. Yeah, which was amazing. Today's break is brought to you by Owned and Operated newsletter. Go to ownedandoperated.com and sign up for a twice-weekly drop that we send to 40,000 contractors with actionable tips on marketing, hiring, and growing your business. Join the 40,000 other home service contractors already signed up and learning. Enjoy the rest of the episode.

Which is huge. I mean, that, that's what opens that, and that's where I was actually going to go with that too, is The weird thing to me about being in this podcast space where we're talking with owners and owners are coming to me is, you know, a lot of these people who are MBAs and who have these, these, these like really, they come from consulting, they know these items, they know that they need to do that, but they just don't do it because they're too busy firefighting. And so it's really getting them to a point where they're like, okay, I need to focus back on What I know I need to focus on. And yeah, it's huge. It's business transformational. I think that those few items really are how to get to $1 million in EBITDA. It's drive revenue, make extremely good decisions about putting money back into the business.

And know where you're getting money back.

And know where it's coming from.

Yep. And then tight reporting. Tight reporting. I think my final one, and this one's pretty quick, we just talk about it a lot, but Invest in stuff that will save labor. Like most of your EBITDA, how are you driving profitable field operations? Is your office efficient? Like that's it. Those are the two things. So if your office, are you investing in AI? Are you on a CRM that helps you? And Service Titan is not the answer for everybody. Like we're actually switching one of our departments over to Field Pulse right now. I saw that. Yeah. Like Literally, it is a win. And why am I paying $300 a user on ServiceTitan when I can do this over here? Yeah. So are you investing in the right stuff? Are you overinvesting, which you might be? And that was the case here. We don't need all the bells and whistles for this department, so we're moving over to FieldPulse. Do you have automations? Do you have Zaps set up? Are you reducing that? Are you staffing overseas? How big of a part of Your company is your overseas staff. So I feel like obviously we spend a ton of time on the show talking about those things. But for us last year, a million of EBITDA came from really like tracking gross margin and like tight reporting. A million of EBITDA came from tightening office operations with AI automation and overseas. That was literally $80,000 leverage.

Yeah, you're 100% people leverage technology leverage.

And then my, my $3 million came from increased gross margin from tight reporting.

That's amazing. I mean, the only other thing that I would like to add that I've seen you do really well, as well as a lot of other bigger operators as we go, you know, do site walks and everything, is the heavy, heavy, heavy focus on technician retention.

Yeah.

So a lot of the— there's a lot of expense that goes and a lot of decisions are made. But I mean, what I didn't understand was there's a lot of decisions made that are all about technician retention that don't make sense necessarily from like a regular operation. So hey, overspend on your facilities, not huge overspend, but overspend to grow into, but also overspend to be in a nice area for marketing, overspend to be in a nice area so that people want to work for you versus your Headhunting and trying to get people to— it's like, you know, nobody wants to go to a dumpy old facility that looks like junk. So we just built out a brand new training room.

Yeah.

And spent a bunch of money, um, copied yours with the 2 TVs on the wall and brought in the desks and brought in sanders and painters and all this kind of stuff to build out this really nice training room and break room so that people want to work for us.

Yeah.

Which I think is a huge part because people are our business. Yeah.

100%.

Awesome, man.

That's how you make your first million bucks. You think you're going to hit it this year?

Next year.

Next year?

We'll hit it next year because we're on track. We're spending everything. We exited Q1 at like 15% net, which was amazing. It felt so good. It wasn't so much pain as normal with 24% growth. So we had good growth with good net. Q2 has exploded, best month ever in May, followed by we're going to beat it in June. Hopefully beat it in July and beat it in April or in August. That's the goal. But point being is I think we'll hit our goals this year. We'll surpass them. And then next year the goal will be $1 million in EBITDA. Yeah.

$10 million in top line. So yeah, that's amazing. I think we're—

I try to view myself as like 3 years behind you, 4 years behind you. Yeah. And then it keeps me going when all this shit hits the fan.

Yeah, I think you are. Yeah, I think that's kind of the fun thing about this industry. The numbers compared to what— I feel like such an old head when I say this shit, but the numbers are so different from when I started where a $2 million company then was 15 people and now is 4, 5, 3. It's just insane. And I think the scale and the pace you can grow at, I'm finding myself having to reset my own expectations just because I've been in the industry for so long. That, hey, $40 million is no longer like that big.

You heard that here first, guys. $40 million is no longer that big. You gotta go for that. What's, what's big now, John? Tell me, is it the $100 million mark?

I start, I start to, I start to be like, oh, they're a big company at, you know, $75, $80.

John is not disconnected from you guys. He completely Is just one of one of the boys. He's one of the boys. He knows what it's like.

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