#239 How To Make Your Business Grow FAST

The best thing you can do is incentivize people to grow your business for you.

Yeah, everybody's moving in the same direction. The hardest part, right, of that is getting people who are all money incentivized. Big portion of this is having a really strong recruiting structure.

Yeah, that's the big thing that sets apart that $10 million business from like a $1 million business. You can't build a house on a weak foundation.

Yeah, exactly. Bringing on a salesperson drives sales because that's their only focus. That's going to be the backbone to everything. You can't drive any demand. Yeah, you're not going to sell anything.

Well, how do you expect to grow? How do you expect to add revenue? Someone Welcome back to Owned and Operated. I'm your host, John Wilson. I'm building a $30 million home service company in Ohio. And here on the show, I have Jack Carr from Jackquisitions, and he runs Rapid Response Plumbing, Heating, and Cooling in Nashville, Tennessee. Today we're talking about how to build a service company above $10 million a year. Make sure you like and sub. All right, John, so you're a big fan of service companies. We're going to be talking today about the 4 most important things along that journey.

Yeah, I mean, I think the obvious one to start is leads, right? You need demand, demand generation from somewhere. Um, and what I've kind of learned over the last few years is that is one of the biggest levers that you can pull, is how do I drive demand as an owner, and how do I just scale that up as quick as possible? Because that's going to be the backbone to everything. If you can't drive any demand, yeah, you're not gonna sell anything.

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Yeah, I was actually—

You know how you're driving leads, you know the successful like 1 to 2 channels, like you only need 1 to 2 channels Maybe a third to push hard to 10.

Yeah. And to take it back even a step further, right, as someone who comes from the acquisition side.

Yeah.

Like making sure you're actually choosing a business that has the ability to grow to 10.

Oh yeah. So yeah, like, are you buying a remote cleaning company? That's not going to be a $10 million business.

It can. It's just a different model where you're utilizing like multiple locations. Yeah. If you're doing a dog poop cleanup franchise, you're not going to get a one-location $10 million business or it's going to be very, very difficult.

Yeah. Like you could probably do it, but It's not worth it. I remember I did this program 10 years ago. It was 10,000 small businesses through Goldman Sachs, I think. And there was someone in there and he was a $2 million, $1.5 million cleaning company, commercial cleaning. He had 100 in team members.

Yeah.

100 for $1 million.

Yep.

That is not like, obviously everyone's part-time, no one's full-time, maybe a couple hours here, a couple hours there. Managing 100 people for only $1 million sounds like my, my personal version of hell.

But somebody has to do it.

I don't know that they do.

Like, somebody has to do it. There's going to be a large cleaning company at some place at some time. So I'm not, I'm not discouraging people from doing it.

No, no.

If that's your thing.

And I'm not either.

Just realizing it is harder. Uh, and it's playing on hard mode.

Yeah. You play hard mode. Yeah. It's playing on Because like to contrast it, and this is just like choose the game, choose your game. Like anything is hard, choose your game. In HVAC, you can hit $1 million with 3 people. So if I'm—

Not even.

Yeah, maybe 2.

Like, yeah, I've seen a husband and wife with a subcontractor do installs hit $1 million, $1.2 million in our area.

Yeah, which is wild. Totally. So I think just like, yeah, not dogging on cleaning, just pick the game.

I mean, I'm okay with you dogging on cleaning. Yeah, I'm just saying that somebody does have to do it.

Someone does that.

There's a reason there's like $10 million, you know, there's $10 million commercial cleaning companies out there that have tons of contracts. It's possible. ServPro?

No, they're like—

ServClean?

Yeah, maybe.

Something like that. There's a franchise out there. I've talked to a few of them. All right.

So at $10 million, we've got a locked-in marketing budget. We have a locked-in marketing strategy. We know how we're filling the board every day. It's not a guess. We're walking in with a plan every day. Our team is thinking about it. We probably have a marketing coordinator who's helping manage the agencies that we use. We're focusing a lot on reviews. We're using something like Big Reputation. We're responding, we're getting photos. So I think that's the big thing that sets apart that $10 million business from like a $1 million business. We have a plan, we're executing it, and we're, we're locked in focus. We know how we're going to fill the board every day. Yeah, we're at $1 million. We don't know how we're going to fit. It's a who knows how we're going to get leads today. At $10 million, you know how you're going to fill the board.

100%. Yeah. Second one I would say is people right now. You have the leads. Somebody has to go run them. Somebody has to sell whatever product you have and they have to do a good job at it.

Yeah.

So understanding that as you move and grow and scale, that that is going to be probably one of the biggest bottlenecks is finding, especially in today's labor market where everybody is going into tech and is going into easy businesses in the home service field, Finding those 100 people to clean those out of $10 million, 1,000 people to clean houses or the 30 or 40 technicians you're going to need to get there is a very difficult task because you have to find them, get them on, train them, and then keep them all the way through.

Yeah. Yeah, I agree. So yeah, $10 million. What we're, what we're focused on is we've got a good benefits package. We have clearly laid out compensation plans. We have people that know how they can win inside the business. So there's probably an incentive structure. People are on flat rate, there's commission, there's bonuses, there's something. You know, one, one of the first things I did when I bought the business almost 9 years ago was we put in an incentive plan. And it sounds so basic and like, I'm still astonished when I hear people not doing this basic thing. Like the, the best thing you can do is incentivize people to grow your business for you. Like that's literally it. Like incentive plans.

Are you referring to like commissions?

Yeah, commissions. Hey, if a technician is doing a great job, he should be rewarded for doing a great job.

Oh, yeah.

Yeah. So if he's installing a ton of stuff, if he's selling a ton of stuff, like if someone over the phone is selling a bunch of memberships and like if someone's helping you build your business, they should be compensated for that. And that's when this starts to snowball because you have, you know, you go from like 10 people at $1 million or, you know, a couple million bucks or whatever, and you start installing incentive plans, you start installing commissions. And these now people are more driven. You bring on people that are excited about commissions during your hiring and they, they literally start growing the business for you because they want to personally grow.

Yeah, everybody's moving in the same direction. The hardest part, right, of that is getting people who are all money incentivized.

Yes.

Because in today's day and age, there's people who optimize for work-life balance or they're optimizing for this or that. I found optimizing for people who are really driven by—

Yeah, you need money hungry people.

Money hungry people, Type A personalities that just want to compete and win. Yeah. Which has been great. And I think a big portion of this, even though it's not, you know, we'll talk about this later, but a big portion of this is having a really strong recruiting structure.

Yeah.

A recruiter really early on will absolutely help you find those people.

Yeah.

So that it doesn't fall on your back because it takes a lot of time to get those people into your business and then making sure you do an amazing job of it more so than we do. So, I mean, you could probably talk more about it, but the actual like recruitment process of bringing them in.

Yeah. And it's flipping the script. It's the same as marketing. Well, how are we showing up on the internet? Yeah. Is our compensation good? Do we have good benefits? When they come in, are they treated like a rock star or do we shove them in a closet until somebody can take the time to interview them? How do we think about the recruiting process?

Well, I mean—

And at $10 million, you're probably more locked in mainly because you're just doing it more. At $10 million, you're probably hiring one person a month. At $1 million, you're probably hiring one person a year. So you just have to get more locked. That's 12 people a year. You're going to have more of a process.

Yeah, exactly. And that's the process as you're going 1, 2, 3, 4 million that you're building through. What I, what I kind of like about it is that it almost flips the script. I think a lot of smaller operators are begging really good techs to come to them, whereas you set up a, a kind of atmosphere where it makes the tech actually want to work for you. You're offering them good incentives so they want to make money. You're showing them that this is a cool place to work. You're walking through your building, you're showing how happy everybody is, like you're treating them really well so that they want to work there.

They don't.

It's not you needing to go find someone and pulling them in.

Yeah.

It's a, you're building demand versus forcing the demand.

Yeah. No, totally agree.

Sweet.

Next up, sales.

Sales is a big one.

Yeah. What, at $10 million, I mean, really this probably starts earlier, probably in like the, you know, $3, $4, $5 range. Like you're bringing on salespeople and their full-time job is to sell. And that's a big move for a lot of businesses. I know it was Big move for your— like, took off for us. It's been huge.

It was our salesperson, was our third hire, because salespeople, yes, in general, and, and they move the business. They like— that's their job. Yeah, literally. Yeah, it sounds silly to say it so simply, but it really is that simple. Is like, yeah, you bring in a salesperson, their goal is to sell. Yes, you drive revenue. And if they don't, they don't stay there. They don't take anything from the business because they're usually commission-based.

Yeah.

So like, bringing on a salesperson drives sales because that's their only focus.

Yeah, but also, and not like you basically don't get to 10 if you're not in like sales. It's marketing, then sales, right? Like you need the lead, you need to sell the lead. So sales is this hyper important thing that I think when smaller contractors, they're like, oh, we don't want to sell.

I was just going to get there. We heard that 3 times. We did the workshop this week, guys. If you're just listening and I heard that 3 or 4 times, it's like, I don't really want to be that pushy salesperson. I don't want to— I don't want to be the sales guy who's in there.

Well, how do you expect to grow? How do you expect to add revenue? And I'm not saying someone has to sell pushy.

Yeah, but what I am saying is that the goal of a business is to generate revenue. Yeah, like that is the goal of a business.

What we're here to do, well, fix problems, to generate profit. But it starts with generating revenue.

Yes, a salesperson's job is to generate revenue. The business's job is to generate the profit on the back end, like to design the profit. Yeah, but point is, is you, you can't be a business without generating revenue, otherwise you shut down. Like, you have to have that revenue to be able to even start.

Yeah. So I think with sales, it's building a process, it's building some training. Like Nextdoor has been a great partner for us. So they have a like, hey, here's your— here's the greet step, here's the explore step. Like they have the 6 steps to like walk in and, you know, convert to a sale. There's other programs out there, but you— whatever program you're using, just use a program, I think is sort of like my mindset on this. Like there's a million different ways to sell. You can find a bunch of them. Just make sure you use one of those million.

Yeah.

Have a process, have it locked in, work on, you know, how are we offering options? How are we talking about financing? How are we exploring the home and asking open-ended questions? The sales process is, is like, basically that's, that's 5 to 10. Like hiring, that was sales.

That was 2 to 5 for us.

Yeah.

Like that, getting good salespeople. Our sales, uh, CA is going to do $3 million this year.

Yeah.

And then there is a sales portion where the technicians are selling the flip, right? So like there is more to it, but one good salesperson really can drive the business multiple millions and help you grow, you know, different levels.

Yeah.

So, um, but I fully agree because we're bringing on a second one next year. So yeah.

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And more so than infrastructure, I think it's just supporting functions. Like those 3 things need to be supported. They need to be supported by payroll, good payroll. Good HR. You need software stack, processes and software stack.

Yeah.

Fleet stack, understanding just all of the things that surround supporting those 3. But like at its most condensed framework, that's what a home service business is. It's problem drives lead. Lead goes to somebody who's going to run the call. Technician. Technician is the salesperson or goes to another salesperson who sells. And then you need to support all of those functions. With everything else that goes into it. And I think a lot of times what people get stuck on, especially in the like the $1 to $3 million range, yeah, is they really get stuck on, I need to focus on my infrastructure, I need to focus on my processes. And I think it's important to sell. It's important.

Yeah.

But at the same time, like you need to realize that the first, the first 2 are just as important as the 4th pillar. Like build those processes, but also get those leads, get those people. make those sales so that you can afford all that infrastructure.

Yeah, I've said this a lot on the podcast over the years, but I remember like I have friends who are just way more organized than I am and like better, like they just run like very clean process. Like it's very locked in. It's, you know, you know where everything is. And my business is like 100 times their size. I don't even think I'm exaggerating. And it, it's a first things first. Like, I'm bad at a lot of things, but I did put first things first.

Yeah.

Which is the lead, then the sale, then the people, then the infrastructure to support it. And like, if the first couple break, like, infrastructure doesn't matter. Like, it doesn't matter. And I could really make it—

Say it all the time. You can run the best warehouse in the country for an HVAC and plumbing—

The most organized. I could eat, you know, eat my lunch off the floor.

Yeah.

And my business won't grow a fucking inch.

You've never lost a single piece of inventory in your life. Everything is priced perfectly.

Yeah.

But it just sits there because nobody's selling.

You just haven't— Because no, yeah, I'm not getting the leads. I don't have the talent. They're not trained how to sell. Yeah, it's— I, you gotta put first things first. And it's— I think it's easy to get sort of this like, you know, heads down. I gotta fix and tweak and all that stuff. But like, you got, you, you know, It's important.

Mm-hmm.

Like, you can't build a house on a weak foundation, but you can build while you're building. You can like build infrastructure and correct as you're going. And you also don't need to overinvest that far. Like, we're $30 million this year. I'm not super concerned about having the right tech stack for when I'm 100. Like, I can figure that out at 80 to 90. Between right now and the next couple years, I'm aiming for how— what's the next 24 months look like and how do we make sure that I'm set up for that success? Am I set up at 30 to get to 40, 40 to get to 50, and so on?

Yeah, no, it makes total sense. Um, I mean, that's where we're at. So we're at 5, we are set up to hit 10, and that is the goal next year. And so all of our infrastructure is in place. And I think you'd be surprised when you're looking at us versus other companies that are in the $2 to $3 million range. They have big old buildings and they have all these offices, and you walk into ours and it's like, it's really Bare bones, like, just because we're very, very efficient with how we do things and we understand that it's leads, people, sales infrastructure.

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