How to Scale a Service Business Without Franchising

I read through your form. Kind of got a general idea of what you're looking for. So let's just jump right in and hopefully we can help as much as we can. Cool.

Yeah, let's. Let's jump into it. So what, I mean, I guess so far, like, any question or, like, I can dive into the whole model, but, like, you understand the model probably better than I do. Do you want me to just dive into or do you have any questions with, like, what I typed out?

No, I know exactly what you're thinking, so just jump right into the questions. You know, obviously it's licensing, it's community, it's franchising. You know, it's which way do we go here? Right. And so, yeah, just jump right in.

Yeah. So I, I guess the initial thing is that is like, what are your thoughts on like a licensing community model versus franchising? Because we have our fda, we're like, we look down, going down that route. But there's a few things I don't love about franchising, and I, I like the community side better because, like, it's less risky on the brand side. And so I like that. And then I think window cleaning is a very unique industry where there's like, I mean, I'm sure it's similar to landscaping, but there are so many sole proprietors. I looked up, there's like 35,000 window cleaners in the United States, and the average one is like over 100,000. And so I'm like, would it be easier to use the community to leverage the people that already exist and get them to a point and then partner with them or, like, do the franchising route like you are doing. And like, obviously you have a lot more control. You. You don't have to, like, hope that they partner with you because they already did, like, stuff like that. So I guess that's like, where the basis of my questions lie. So I would love to hear your perspective because you're obviously very deep in it. And I'm curious, like, obviously you have the learnings on it, but, like, I don't think community softwares and like, the community movement wasn't as big when you first started franchising. So I'm curious, like, would you do it a different way now with the resources that we have? Or, like, just give me all your thought.

Yeah, like, it really comes down to what you want. Like, in your, in your form, you said that you want to sell the business. Is that still, like, the main focus is sellability?

I. I don't Know because we're not there yet. I want to build a business that you're that's able to be sold. But I also think that there's ways to leverage it if like if we had a community of a thousand like there's also the route of like you've done it like build a software or there's or like build a supply community that like supplies all like the window cleaning equipment and you leverage it and like now we're competing with WCR which is like 58 million a year. So like I think there's other ways to leverage it but I would like to build it, I want it to be an option. It's either like can I build the biggest window cleaning merger and acquisition of all time or business or do I leverage the community and do something else. But I don't know yet because we're not there. But yeah, I'd like to have the option.

Yeah like so my head goes for window clean a little bit different because it's so low cost of entry in terms of what is required to get started. I like the idea of doing more a commercial like or a corporate expansion because there's not a lot of capital required besides the lease of a vehicle. So it does look interesting to me if your unit economics are good enough to where you say hey look, you're 1099, you bring your truck, I get you all the leads, I do all the billing, you just go do the work but you're 1099 and you get a cut of all the revenue. That looks interesting because you can go into a market, know exactly your customer acquisition cost is, know exactly how much you have to spend to get one operator up and rolling and then copy and paste. And there's not a lot of cap capital expenditure for us. I usually spend a hundred to $120,000 to get a location started. And so like doing that would have taken me a lot longer to get the wheels rolling. So like franchising, you're tapping in the capital of the franchisee and then they take the vast majority of the profits. And so it, it really comes down to like the franchise model has, has a much higher multiple in terms of sale. So if you're going to sell a franchise, a good franchise, you can get significantly more multiple like three to four times the more the multiple than a licensing business. And that licensing is probably 3 to 4x the multiple on a education business and community. And so I look at franchising as just the ultimate community because it's like it's it's like dating versus marriage. Like everyone can date, I. E Do education and community, but like I'm in a contractual agreement with someone and like there's me times I don't like them and they don't like me. But we're going to figure it out. And so there's, there's a lot of hurdles in that relationship. And so it's like, which, which you know, dragon do you want to slay? Do you want to slay the one of constant churn which is community and it's no one, no one hates you, no one. Because they can just leave. There's like no tie whatsoever. Or do you want to deal with the quote unquote, the marriage part, which is like we are in this contractually together and it's a much slower business venture from a cash flow perspective. The education, the community is the fastest way, right? It's the most profitable. You can have one, maybe two employees doing content and media and have a million, $2 million cash flowing your business pretty simply.

Right? So, so question on this is like because my, my thought on the community side is I eventually it wouldn't be a franchise, but it's like can we test people out before we're married to them? And it's like, it's, it's. Window cleaning is weird, dude. It is a weird industry. But it's really cool. It's a cool opportunity where I'm like, cool, do we do the community? And Whoever gets to 500,000 then we partner with them and like we give them like maybe I didn't want to do a free franchise. Like if we did the free franchise route, which I think would be cool, but, but the problem is like they built a brand for probably four years and then rebranding could be a whole thing. So I'm like, could we do like a merger acquisition model to where everyone that hits a certain point within the community, we roll them all up and now we're all worth more. And then we do like, we do an exit that way. Like are you familiar with like any hour electrical? Like they're, they're right here in Utah and they're like crazy. And like that's their model, right? They did the private equity route, they did merger acquisition. They go in and buy a bunch of different brands but they don't rebrand them. They keep them like they own 4H vac companies in Utah and like no one knows. And so basically they built a monopoly. But like they have the front facing side of like support local but then like the corporate back end of like a powerhouse, right? And so like the idea with community is like, could we funnel that into a merger acquisition and get like. Because our constraint is talent, right? Like, to your point, like, capital is not the constraint. Like we can throw down a bunch of locations, but like getting a bunch of managers that actually know how to manage is tough. And so like, can we pull from like the group of people that are already in the industry and maybe just don't have the tools to be successful, but they're capable and just give them the tools, they prove themselves, then we partner at merger acquisition. Yeah.

The question is, once they've proven themselves and they've grown the business to say 500,000, why do they need you? That's what they're now. They're good. They're good, right? And so that's also the struggle. It's like, okay, they think they know everything now and why would they, why would they want to be a franchisee at that point, right? Because most, most the value to a franchisee is in their first year or two. And this is why the royalty structure I'm against is because like, as they grow in years 3, 4, 5 and 6, why are they paying more to the franchisor when the franchise is giving them less support? It's the first year, two years, they're like, they're on this like, rabbit, like, rapid iteration of like learning and like, oh my goodness, this is a huge system. After like three years. Like, okay, I got this. And so that's where I'd be careful thinking that, oh, if they grow, then they will convert into a franchise. You only could do that if you had leverage against them. So for example, if you gave them all of the leads and you controlled the lead flow, now you kind of have some leverage against them. It's also a weird relationship to enter into. Like, hey, by the way, I'm holding all your leads hostage. You got to join me as a franchisee, right? A bit of a strange, right? So I think like, if I was you, assuming that you, you, you have like a, a ten year term on this timeline, I would probably go community first. Cause it's high cash flow, it's low risk, and whatever you do with the community afterwards, there's like a wide variety of options. You can sell supplies, you could start doing lead gen. So for example, you could start doing, you could start doing web design. Like that's what we do.

I was gonna ask you about that too. Like, cause I saw you do like accounting. Not to like cut you off, but, like, would love to jump. It's like, you do accounting, web design, all that stuff. And I was like, oh, I could leverage this. And I went to your website. I was like, bro, Mike's a genius. He already does all this.

Yeah, so, so, so, like, once you have the community, you can kind of figure out where you want to go. I like, if. If making more cash was the thing, we wouldn't have franchise, because it took three years to equate the revenue of my first location in the franchise. And so, like, it's. Franchising is not that like a fast. It's a completely different business. It is not like community and training. It is, like, completely different. It's just like, it's literally dating versus marriage. It's a totally different ball game. And so I would, I would step into it slowly, do the community, and then like, we did long care before the franchise. Like, I started that. Okay, what's it like to actually have all of this data? Do people in my community trust me when I'm competing with them? I can prove myself a little bit there. So there's always ways to monetize a community once you've built the rapport and the trust with them. And so I would just focus on that part. Like content, like the stuff, the videos you're doing, you just. Just become the go to in your industry.

Okay. And then. And then use that. I like that because it's like, yeah, test it out. And then if the system, once the systems are like baller, then we can ascend to franchising. Or we could do other stuff, leverage it in a different way.

Okay, Yep.

Cool. So I, I guess another question with that would be like, what have you seen from your side? Did you just use, like, the leverage of like, web design and all that stuff as a way to get to franchising? Or like, what was your play with that? And like, how would you recommend getting into that?

We needed money. So, like, I wanted a whole team for web design for the franchise, but, like, we couldn't afford. You know what? I knew we needed to actually crush it. So I was like, okay, great, I'm going to hire them all and then we're going to simply offer it to the public as like a Alec Heart thing. So how I like to look at the franchising model is, hey, I have all these different things that I offer. If you just want to package them all together and say like 80%, just join the franchise. So what you can do is you could be like, hey, we have a Lead Gen service. We have a web design service. We have these other things. Oh, and by the way, if you want it all together, it's way cheaper if you just become a franchisee.

Gotcha.

Okay. That starts to make sense. And that's just a very long path. Like, it takes a long time to build out. Like, the best long, like, the best web design, like, the best account. Like, it takes a while to do that, but then it makes it very obvious to join as a franchisee versus more of a leveraged relationship, which is, for example, if you did lead gen is a great. I actually think lead gen would be great in your industry. Is, like, you control the lead flow. I would be careful with, like, holding that as leverage against an owner. So, for example, with us, if someone leaves, they take all their customers. That's fine. It is a weird relationship if you're holding Lead Gen over their head.

Yeah, yeah. No, that makes sense because that. Yeah, because everyone. That's like, their biggest thing, at least initially, is like, how do I get more jobs? And it's like, well, it's not that hard to figure out, but so, yeah, at first.

First is the sales and marketing game, and, like, that's all that matters. And then once they get two employees, it becomes a. You know, I got to train them on management, and then once I train them on management, I got to train them on capital allocation, so they do multiple locations. And so it's just like, you have to have all that training in place. Um, and no one's gonna run a franchisee franchise like. Like you do.

Right.

They just don't have that. That initial. The skill that you do.

Yeah. And I. I've been watching yourself. It's so funny. My business partner Ian, this morning, he's like, bro, did you see Mike Andy's thing? He, like, his location was losing, like, 500k a year. I was like, yeah. I watched this video, and he was like, shook. It was so funny. He's like. And he showed it. And I was like, yeah, because it's not per. Like, that's just the reality of. It's good people like that. So anyway, it's funny.

Yeah. So I think what would be interesting, if I was you, I would really consider the corporate expansion route. And that is like, you'd be going after 1099, folks. You'd be. What I would do if I was you is I would sell leads in an area until you had so much lead flow, you knew immediately you could get a 1099. And then I would switch it to Now I take the leads and I do the work once I find a good operator.

So why are you run me through this? Why are you 1099 the operator?

Because I still want, I still want to control the revenue. So when you go to sell, it looks much better if you say we are a business that does 50 million in revenue versus we sell 2 million worth of leads to other contractors.

Right, sorry. Not 1099. Like why are they. Because 1099 sub. So why are you subbing instead of employee?

Because I'm going to tell them, hey, you get your truck, you get your equipment, I'm going to give you the jobs and you do them whatever you want.

Do you give them branding at all or no?

Yeah. You say, hey, look, this, you know, in order to get these leads from us, you just need to slap this on the side of your truck and you need to wear this uniform.

Okay, so you're okay. Because like we have. So for example, we have our Vegas location. Run me through your thoughts on this. Is like we had a guy that grew here in Utah and then he's like, he's an employee and he was like a killer. He's like, I want another opportunity. So like, cool, we'll send you to Vegas. And then. But he basically, we just do a profit share model. But he's an employee.

But like, yeah. And you own the equipment. You have the entity.

Right.

We gave him the truck because we.

Had an extra truck. So we just sent him down with the truck. We pay for everything and he's just like the operator. But you think it'd be faster if we did like a 1099 and would that have more upside for that person as well?

You can scale it faster because the operator, the subcontractor, cares more about the customer because they're getting a rev share and they're responsible for their tools, their equipment, their transportation. You're simply the person facilitating all backend management. So you take the calls, you do the invoicing, you do the estimates. You do all like you literally just tell them, hey, you log into the app and we tell you what jobs they're supposed to be doing. And you can do them whenever you want and you can drive whatever truck, use whatever equipment, and then you just give them training. Do you give your subcontractors training? So I would look like heavily at like what Amazon does with their delivery drivers. Almost all of like not all of them, a lot of them are just subcontractors. Even though they drive a prime truck.

Do they buy the prime truck?

They usually lease it and then usually they're getting, they're paying licensing to use that, that like the branding. But they're subcontractors because of the logistics.

How would you recommend breaking down like the rev share versus like what they're leasing from us, paying it? Like, how would you recommend breaking that down?

Well, the only leverage you have here is that you do you bring all the leads. So it's like, hey, if you just were willing to work, we got you. So how you'd advertise is like, hey, you start is about how much you're going to make. This is a business opportunity and this is a good business opportunity for them. But you're governing all the revenue, all the revenue's flowing through you. Everything's flown through. Yeah. And like, so your leverage is the brand. So like a customer's not going to go to Joe Schmo and like, because what you, everyone gets afraid of is a customer going around you and going to the, going to this 1099 and just doing the work. Now on the side, you would pick up on that so fast and just cut them out of the system because you have all the leverage of leads.

Right?

So if someone started doing that, you just, okay, forget them, they're out. And then you can, you can gank them pretty quickly. But yeah, the problem with W2 side is you got to find the person. You got to pay them to like get trained. You've got to make sure like quality control is all your fault. Every, everything is your fault if they don't show up to work, your fault. Whereas 1099 is like, oh, you didn't show up to work. We're going to need another 1099 in another subcontractor.

So you just, so just go into a market, find someone that already owns a business or like that does window.

Cleaning or, or is willing to do window clean. May did it in the past, whatever. They don't have a business currently and they want to leave their nine to five and do, you know, be self employed. Like, I'd be going, I'd be advertising if the person wants to become self employed. Okay, so hey, you get 60% of the revenue, we take 40%. But you literally never talk to the customer. You never answer the phone. You can get your own employees if you want to. You could go manage the employee. Like get more employees. We'll give you more leads. And as long as you have the. Then it just becomes you are simply a conversion mechanism. And your goal is I get leads for a really good Arbitrage. I'm able to then figure out a system to give it to subcontractors, which, if you have enough leads, isn't a problem, because if you give them 60%, it's still going to be better than them trying to build their own back office and build websites and create marketing channels, et cetera, so it can be a win. And then they start to rely on you for those leads, and they don't want to go anywhere.

Okay, so where do you. So, like, with the. Like, the metrics of the business, Usually we run like, a 20 to 30% profit margin, depending on marketing, because our marketing, we spend 25% on the front end, but our goal is to get enough people on quarterlies to where it's less than 10% of arrow if we're running and we try to keep our labor costs under 30%. So if we're paying them more than the labor cost, is it almost just, like, break even to prove the model in a market and then once the market's proven, then we drop down. Or like, how do you make those numbers work? If you're like, 40, right.

Right now, say, on $100 of revenue, what's your direct labor? Like, 40 bucks?

50 bucks on $100? Yeah. It's less than. Including payroll tax, and everything is less than 30%.

Okay. So it's relatively low. And then. So other cogs, which are other. Like, so you're probably running a 40. 40% gross. No, 60% gross. Like, gross margin.

Yeah. Ish.

Okay. And then. Yeah, so you just have to figure out what number you're able to make. Make it work. But the thing is, like, what's costing you the most right now? Like, if you're running say, a 20, 25% profit margin, what's costing you the. Like, what's. What's the real cost here is the acquisition. Like, are you spending a lot of marketing then?

Initially, yeah, because, like, you don't actually make the money up front because you make your money back when they've done four cleanings. So, like, yeah, it's upfront. You're paying 25% of initial, which is a lot. So that's like, the constraint.

Yeah, labor's not bad, I would say, like, that. I mean, obviously there's other expenses, but to your point, like, they would be covering truck costs and all that. So you basically just bake that in.

Right. That's why I'd be looking at, like, somewhere between 40 and 60% you're probably giving to them, but you're really Going after the person that loves to work, hates to answer the phone, hates doing invoicing, hates software, hates marketing, doesn't know how to do a website. Like, you're going after that person. And there's a lot of people in this industry and that there's so many solo people because of that. But then you pitch this as you can get, employees you can grow, it's all on you. We will give you more leads. If you want them, we will give them to you. You just have to be really confident in your acquisition channel. I would probably also do a sliding scale of revenue share with them based upon how long the customer's with you. So because you know that you make, well, your money after, say, six to 12 months. Great. The first six months, you get 30%. After a year, like, if they convert for another year, you get 40%. You could have like, where you bake in retention into the dev share.

Yeah. And then. And then what would be like your ascension model after that is like, once you get to a certain point, you convert that to an actual corporate location, or like, what does that conversion look like? Or you just keep that model and just do it.

I just keep doing that model because. Because what that looks like in. In 10 years is you being able to say, we do $50 million in revenue, right? And you become the Uber, which is like, you actually don't own any trucks, right? But you are worth a lot because you have the. You have that distribution also. Then what you would do is say, for example, you're doing that much in revenue. You start doing things like rev share programs with processors, you start getting where you sell the materials to your subs, and they have to buy it from you. Because, like, you can do that. You can say, hey, you have to buy the stuff from us. And then, then, then you get cuts on that.

So what's the difference of that between.

Like a franchise, because the franchise, they are taking your brand.

There'S a legal binding agreement between their entity and yours. You can't just, like, cut them like a 1099 and then they're not a W2 because, like an employee, you pay all the payroll taxes. But furthermore, you tell them when to show up, what to do, where they have to store their truck and equipment, like, you insure the truck that they drive, et cetera. And so you'd want to be very careful about crossing the boundaries of W2 versus 1099. But in terms of franchising, think about it from the perspective, like, it's easier to date than it is to marry. And you can date a lot more people than marrying only one. It's like when it comes to franchising side, it'd be a matter of like, like someone, someone that signs up with their brand. So for example, they have 30, 40, you know, window cleaning customers. They're going to be like, I don't want to switch over. I'm saying this. 10 year agreements, long term. Great. We'll give you leads and we'll give you a cut of it. You have to do anything else. Just don't screw us over and take the customer.

So, okay, so do you run like, do you allow them to also have their own customers? And you're just giving that. You're just taking percentage of the leads that you're providing and that's it.

You could. I think that you'd want to create clarity around this. I think you'd probably also just do something like where, hey, if you, if you exclusively work from Mint, you get like.

Priority for the leads, for example. So if there's two people in a market, it's like, hey, we will split between the two of you. But if you want to view exclusively us, you get, you know, more. You get like lead first dibs on leads.

Gotcha Cab. And then, I mean, I guess you just. Yeah, these have like log into CRM, all that stuff. And they just do the jobs that are on the schedule.

Yeah, well, you, you would just set them up in your CRM as like an employee, like a user. Like, hey, log in and then they would see their information, they'd see all. Everything there.

Gotcha.

So it's just an option. And the only reason I think about this is because it is a so low cost. Like besides the vehicle, you don't need anything. I would have done this with Augusta if I. If we could have done a new location for, you know, five, ten grand.

Right. Okay. No, because that, yeah, that's why I think the benefit of the community is so high is I think window cleaning is one of the only industries that you can do the community that we're doing. Because you can get anyone. Like you can tell someone that doesn't have a business and be like, throw a magnet on your car. Like you can have a sedan and run a window cleaning. You don't need a truck.

Yeah. Like, I think if I was you, Gatlin, regardless of what you do, I think if you control the leads, you can kind of do whatever you want. Because if you control the leads. So for when. I mean control the leads. Like if you actually Go into markets and like, hey, we know customer acquisition in this market is this, which is how we spend, etc. You can start to start selling leads. So for example, you could sell like we sell leads that we don't use at gusta for 49 bucks. You could sell leads for $49. You get the lead for say 40 bucks or 30 bucks or whatever it is doing the ads. You get the lead, you sell it to people. Once you then have a concentration of a whole bunch of lead flow. You know, okay, I'm going to start a business opportunity. I'm going to go higher at 1099. Now I'm going to take the leads myself. But then you can prove the market out until you have enough lead flow and they sell those leads off, assuming you have a community to absorb those.

So I could sell the leads to people in the community?

Yeah, exactly. So you would start, you call mint leads or whatever leads, and then you're gonna sell these leads based upon you going to market, testing it out, doing ads. And like, there's gonna be some that are duds. And you're like, I cannot get leads for the cost. I need to. Great. I'm bouncing. But until then, I'm gonna sell these leads off to the community. And they're thrilled. Cause they're just getting a lead to their business. You generate that, you really refine it. Because this is the thing is like you become a sales organization, you become an ad arbitrage. So you've got to nail that. So I would use the leads platform as a way to n really refine it. Then once you get a marker like, oh my goodness, we're getting for 10, 15 bucks a lead. Great. We're going to start penetrating this market. We're going to go get 1099 in place and give them 100, 100 window cleaning customers tomorrow.

So what. How does that differ in your mind from like a, like a marketing agency? Or is that a marketing agency charging per lead versus charging per month?

It's a, it's a, it's. It is a marketing agency. And then, but what I'm then trying to do is I'm trying to convert my hottest markets into a 1099 where I control all the revenue.

But do you charge per month or.

Do you charge per lead for the 1099 side of things?

Like, like if I'm selling leads to people in the community or like to try out different markets, am I selling the lead for a cost or 1500 bucks a month for marketing?

Oh, I see. I do Flat lead. I recommend flat lead because otherwise you become a marketing. You got to convince people about their branding and the long term. It's like, you only pay per lead. And if you. If you want to sign up in our community, we have, you know, let's just call it 3,000 people in our community. Great. A thousand of them are like, yes, I want leads for $49, because I know after the first cleaning, I can. Great, just sign up here. We get your service area, the lead will come in, and we will give it to you, and you'll get charged $49. You'd nail that. Like, you'd probably spend a year, two years doing that. And you start to see where leads flow, what ads work the best in certain markets. Timing. You'd figure all these things out. And then, you know, okay, these are our hot markets. Let's go start three of these. We're at 1099 in place. And then we switch to the other model, which is probably a different brand. Like, I would. I'd be careful calling mint leads, and then, like, mint something else. You might even. This is something else. Like, you're more your community style. You get your lead stuff, and then you over here on the back end have so much data to be able to go penetrate certain markets. And then you offer. People say, hey, look, we're starting this new thing. You get X amount of leads from day one, and it's a 1099 position. You can sub it out, et cetera, et cetera, et cetera. And, like, you build that part out.

Interesting. I like that. Yeah, I. I like the. Cause that's something that we're struggling with in Vegas is like, our cost per lead is way higher than Utah. And we're like, oh, we're good to do it, because I think we can establish brand dominance pretty quick because there's no one there. But, like, cost per lead is like. It's a market that's not educated at all. And so we're basically educating the market on why they need to get their windows clean, which is expensive. So, yeah, it's not.

And then you'll find. You'll find, okay, like, which markets? Where's that? Like, is it because the hard water in Salt Lake, for example, Is it because the winters. Is it, like, do we need markets where they're good? They have extreme cold and extreme heat? Because then the expansion, like, so you would figure all this out, and then, like, okay, like, this is literally the states we want to be in. And then you go from there, and.

You would Obviously just run ads that are not like brand. They're not branded ads at all. Or like how. Because like we'll do it heavy.

Yeah, yeah, yeah. For the leads, right? Like, yeah, 100. And like that's where like there would be some validity to making then around Mint. So that way you have some brand equity being built even though you're just generating leads. So like, for example, you could say you could do like more like instant pricing for the lead gen and actually give, you know, people that buy the leads an actual like accepted quote essentially. That would be like the highest value to them. Did I lose you? I lost you. Yeah.

Right. When you start talking, you got cut off.

Sorry. I was saying. Yeah, like in the perfect world from the lead side, you would be trying to actually give them a price, like get a quote to the customer and then get an accepted bid that you give to this contractor. Something that they could really sink their teeth into and say, this is different than a lead a marketing agency. Because that's the differentiator between like per cost, per lead. Like this is why like Google local services, everyone loves it.

Right.

You just can't dump money on it. You can't scale it. And so you've got to figure out a way how do you actually get the lead for that low of a cost and be able to flip it to somebody else. And so, you know, I could debate both ways as to whether or not you should do Mint leads or like, like and make that a thing or call it like window cleaning. They all your leads go there and then you parse it out from there to your. Either your community or to your 1099s. That actually makes a lot that makes sense to me. It'd just be a matter of like even in your estimate request form, you could just make it clear like, hey, Mint does have third party contractors that we work with to get your job done at high satisfaction or whatever.

Right. And just they're like Mint partners.

Yeah. And then you get to determine does the lead go to my partners or down the road, does it go to my internal team?

Cool. No, I think that's. Yeah, I'm gonna, I'm gonna have to dive into that model. I think, I think that's a good thing.

I think the thing is like, regardless of what you do down the road, the lead part is really interesting. Cause you have so much leverage, right. If you actually look the contraindic window clean, it is getting the leads because there's so many solo operators. Whereas for us, as soon as you get a One or two influence. It's all about management. It's all about like route density, a whole bunch of other stuff. But for the vast majority of your audience it's gonna be like, just get me leads. Want to control that.

So does it change anything? Like because we're so like everything that we teach in the community is like re recurring rev or whatever. I always mix them up. Reoccurring.

Yep.

To get people on quarterlies does that like is there any drawback of that? Because then you're giving them the client, they have the client for forever and like they can establish more like brand dominance by the time we want to get into that market.

Yeah, I don't think that's.

We hold on to the contacts and we remarket to them. I don't know.

Yeah, I don't know if you can. I think I froze up on you and probably did I freeze up on you. Oh, here we go. You know what's happening today?

Sorry, I don't know what's going on here. Oh, he dropped out. Video. Oh, and we're back. There you go. Can you hear me?

Yeah. Did you hear anything that I said or.

No, no, I didn't. I apologize.

Oh, you're good. So I was just saying like, is there, do you see any drawback of like because we sell, we teach them to sell on plans, then they would have access to clients. No longer our client.

No, this is part of selling by the lead.

Right.

Because if you do a marketing agency anyways, once they get leads, you can't do anything about it. So the benefit though to you is I guess you get some margin in the lead because like you're doing an arbitrage of getting a lead for 30 and selling for 50. There's a little bit of margin, but more importantly, you're getting data like you're not in this to get sell leads. Selling that business is horrible. Like selling like a lead, you have no sellability. Same thing with Community. It's like nothing but you get the data required to have be the best window cleaning advertising company to then go into markets and take tenant do 1099 stuff.

Right. So it's just a data play. It's like just figure it out.

Yeah. And this is the thing. Even if you did that and then like down the road you have such good metric, you might go the franchising model still and still have enough leverage with lead flow to be able to say, hey, look, look, if you come to this market, we guarantee you X amount of leads if you become a franchisee like that becomes a real thing too. And it just becomes like. That's why I think just govern, get the leads. Because from there you can do so much.

Right? No, I like that. Okay, that's good. I'm getting my video guys calling me random. So I guess to like pivot because I think that kind of helps me understand. So go, if I understand correctly, go the community route, get the cash flow, build the leverage, build the marketing side, offer those leads to whether it's subcontractors or to people within the community. Once we have the data, like destroy the market. Just like there's so many things you.

Can go from there, right? Like you, you could go into web design and then you, you know exactly how to lead, drive traffic to it. You say, hey guys, you pay us 500 bucks a month, we will build your website and then you pay us a cost per lead and then you are going to just like funnel traffic of that thing and just explode it. So they're paying you five grand a month. You could do that. You could do where you go into the franchise model and you say, hey, we know how to get leads for X amount. We will show you how to do it. You'll be part of this franchise and you go that mileage slower, but you can do it. Or you have the licensing model say, hey, if you're window cleaning, you get access to the leads, you pay us a royalty and like you can, there's so much you can do there.

Yeah, okay. Okay. So to pivot from that, I have two more like that I'd like to go through. So the first one is. And this one doesn't need to be like a ton of time curious your thoughts on like leveraging franchising community for software development? Because you've obviously built two and like I've heard that building copilot was hell for like a year. So like is that you're like, that's a good model or you're like just use something that already exists and then like just build the, the build the business, not like build a software company.

Yeah. Like with a 5 to 10 year window that you have, I'd say avoid it because it will be distraction when you're think if you're thinking like 15, 20 years, it starts to become real. Like I'm doing this for robotics. Like I just knew I need the software as the platform to run the robotics. And so like my play is robotics. Say again?

Like landscaping Robotics.

Correct. Yeah. So like, so it's like, okay, like this command center will be the operating system to the robotics to be able to operate them out in the field. And so like I need this and the franchise for distribution. I need the software stack to then control the robotics. So it was needed. But from a business perspective it's a big distraction in the short term. And so I would say if there's, if there's a software that you can currently use that allows you to do everything we talked about without any friction whatsoever, I would just use that. I would only build software if you're like, there is a definitive issue with the current software packages that are out there that prevent me from doing what I need to do. So for example, you would really be looking at like multi location operations inside of whatever software you're using. So like for example, it's a big deal for us for like our operators to see the time zone inside of whatever location they're logged into. So when they're talking to a customer they could be three hours, five hours, a totally different time zone. And so little things like that is the reason you might do something or build an API on top of something else. But yeah, I don't know, I don't know if it becomes really clear if you need software. And we're back. Hello? Hello? Check, check, one, two.

Yeah, I can hear you. I heard the last minute. So okay, go. Like we just use Housecall Pro, so which is great. Housecall Pro works great for us because they actually have service agreements which is the biggest thing. The problem with is if we were ever to build our own, the amount of people that have service agreements with cards on file, there would be so much friction and switching that it's like we're, we're married to them, you know.

Yeah, it's less than you think. Switching it. Yeah, it's less than you think as long as you tie it to an invoice. Like, hey, on this invoice we need action required and you get their card information one more time. We usually get 90% of people to do it within two emails.

Really?

Yeah, it's not that bad.

Okay, cool. Because I was like, yeah, crap, that would suck. Yeah, I know.

We moved, we moved 150 locations over to Copilot and that was always the big fear. But like it's like just don't send it to all your customers saying, hey, we need your card information. No one will do it like 5%. If you, if you say on the first invoice, hey, this one's actually required. We need you to put your payment basically go along with it, it's crazy.

Cool.

Okay, so that, yeah, that helps because that's interesting because I saw like that's my. I mean you're obviously, you haven't figured out but like Pat, I do think we have like a five to ten year window before. I mean you understand this like before robotics kind of take over and same thing as like I think the window clean drone section is going to be that it's not even close to being there. But I'm like, can I put myself in a position where I have the capital and the distribution to be able to pull something like that off? But I didn't think about the software stack side. Like that's, that's super smart because yeah, there's no. We'd run into some problems with Housecall Pro. So yeah, software.

Software. Like the thing is if again like with software, even if you. The demand for that comes in down the road, having the cash flow from the community slash leads is important because it's so expensive to get like the actual good developers.

Right.

So like I went cheap at first and then like, oh, okay, yep, no good developers start a quarter million dollars.

Yeah. Okay, so that, that helps. That one, that was kind of a quick one. The, the last one would be like office. Like because that, that's one that we've messed around with a million different like models of office. Like we've had a customer service person do sales, customer service dispatch, all that. Now we have a salesperson. So we have customer service and sales and we've separated admin, which separating admin is sweet because we just hire a VA to do it and they do like all the admin stuff. But we have like this weird dynamic of like customer service and sales. Like sales, you can't get at least the salespeople that we've gone after. You can't pay someone enough because it's not high ticket and they're just churning through so many leads. Like no actual salesperson wants to do that. And so I'm curious like, because our customer service lady killed it with sales last year. She was doing customer service for 10 technicians and sold 98,000 in a month. Like it was like she like balled out, but she's like built different.

But it's like do you on your office side, like how do you divide the responsibilities with like sales, customer service, admin, stuff like that. And like what's. If it is separate? Like what's the personality types that you're looking after or going after to fill those roles?

Yeah, like I would try to automate as much as possible for low ticket. So it's like with software, for example, if you're not making more than $3,000 a year on a user, typically, like, realistically, more like 5000. If you're making $5000 a month or $5000 a year from a user and software, you should automate the onboarding process and sales. Right. It should be sales led or, sorry, it should be product led. If it's sales led, it means I have to book a call with someone, I have to go over a demo, et cetera. That's usually enterprise. It's got to be at least. At least $5,000 a year for you and I both with mowing and with window cleaning. We're not making $5,000 a year on customers. We're lucky if we make 2,000. Right. And so. And for window cleaning, I'm assuming it's like a thousand for the.

The average per year contract is like a thousand.

Yeah, yeah.

Christmas light. So they can be more.

But yeah, I would try to automate everything. Like instant pricing on websites. I would do over the phone pricing from. From a customer quote, unquote. Customer service person for us is our salespeople. So, like, all of them are going to answer the phone or do your.

Customer service people do sales?

Yeah, because otherwise when someone calls in and they're complaining, I need to upsell them. I don't. Like, like, for example, someone's complaining about their beds. Like, the grass is going into the beds. Like, hey, this is not an opportunity to do a support. This is an opportunity to upsell them into bed maintenance.

Right.

So, like whoever's answering the phone, the last thing I would say is like, yeah, let me solve this problem and forward you to sales. They're going to be clicking. So, like, I'm trying to make sure that you're. You train your customer service reps to be salespeople, look for opportunities to upsell.

And then I know you're big on like perfect. Like the perfect model. Like what we realized, like our. Because I watched that video. I mean, you talk about it a bunch of videos. I was like, dang, this is smart. We need to implement. This is like our perfect model is four trucks, six technicians. So we run four tens. We're able to run three crews with two trucks. All that jazz. And like the perfect is like four trucks, six technicians, one office person. It's like, that's. They can manage customer service and sales. As soon as it's past that, sales becomes a lot. But we're not automating to your point. Like we, we've tried. We did like instant quotes on our website and it worked really well. But conversions obviously were way lower. And so we did like our conversion was 10% on our website but we had like 80% of people would sign up for a quarterly. So like conversions to quarterlies on a website was incredible because it was really easy to show but our overall conversion was like 22%. And then we input. We took it off our website and implemented like phone sales, like all phone sales. And we're able to get like a 30 to 40% conversion because what we. Oh sorry, what?

It just comes down to your like your cost per lead, right? Because right now you're paying for the salesperson and like answering the phone and that whole process. So the question is if you took that and you just put it on ads and got more leads, then what's the equation?

Right?

Yeah, I'm not saying one or the other because like we do have a slightly higher ticket. We can convert people into like four or $5,000 stuff. So we do have a little more leverage there. And so I'm willing to pay usually a little bit more per lead. And it also comes down to like if you're in growth mode or profit mode, like if you're in profit mode you have a full six people or yeah, four trucks and six people. And you're likely probably going to shift more towards being online where you don't have the admin person. You can maybe get seven or eight people because you automate. So like it's also like what stage of growth are you in? Because if you're only getting a few leads a week, you're probably trying to get every single one and it's going to be on the phone.

Right. So do you like, because I know you guys do online quotes and stuff like that. Do you turn that on for certain locations and turn it off for certain.

Locations they have the opportunity to take it off if they want and like turn it off. Yeah. But for us the vast majority of them are okay with a slightly lower conversion and then they just juice the ads. So that way they. All the leads that are coming in they don't have to do estimates for. So for example, you know, for us we can maybe do 15 estimates in a day and then you're for a full time salesperson, I could just have those all automated and yes, maybe a couple less of them accept. But if I can all be out working all day late making a hundred bucks an hour, it Makes more sense to just take the $100 an hour and put it into marketing.

Right? Yeah. Cause yeah, we thought about going into that. Cause same thing with our sales guy right now. He's like, dude, I just can't even keep up with the leads. I'm like. I'm like, he can, but, like, he's having to sling like, 20 sales a day. And from like, an actual salesperson perspective, it's like they don't have the bandwidth. Like, they don't do that.

Yeah. My question always is like, okay, so like, let's say that person costs you five grand a month. Okay, great. Let's take them out. I'm just saying, for example, and either a. Put them in the field so they make 10 or 15 grand a month for us, or they are literally just kicked to the curb and we put that same money into ads and would we get more traffic to the site and just. Right. And then. But then reduce the complexity of the business. So, like, I don't want estimators driving around. I don't want to have to have an estimate at all. Right. And so I'm willing to take a lower close ratio, but then take the money I would otherwise be spending on the overhead and just juice the marketing, which is now a variable expense. And I can control it versus being like, a salary.

Right. Yeah, I know. It's something that we've been talking about, like, going back to. I'm just like, we built like a website, click funnels. And it was. It was decent. But, like, I'm. I'm curious to see if we actually built it well. Like, if we could increase our conversion online just by like, 10%, just by having a better flow. That's not like, clunky click funnel flow that I could.

You could split test it too. Like, you. You could even just do it where it's like, okay, when we're really busy, we're just gonna turn the site literally for those few hours a day. Like, he's like, man, I'm just overwhelmed. Great. Let's just flip, like, change the link. The form goes from a contact form into a instant price form, and we just use it as overflow.

Right. Or like, that way it's like turn on the weekends.

Yeah, yeah, exactly, exactly. Because now you're going to instant instantly instead of waiting for three or four days for your quote.

Yeah.

This is the thing, Gatlin. Like. Like, Angie just came out this, like, 70% of customers accept the first estimate they get from a home service provider. So, like, you just got yes, you're. You just gotta be the first one.

Yeah, yeah. Because that's how we first started. And that's like what blew us up at the beginning was like the year that we went, we went from like 300k to 800k. And that year was we implemented service plans and on the, on the website conversion. But then we're like, dude, we're burning through so many leads. What if we just had a person that could have a higher conversion rate? So then we switched. Right? But I mean, it worked. So. And it's. And like window cleaning, that standard is so low that someone sees that on someone's website and they're like shook.

Yeah.

Like, they're like the craziest thing. But.

And the thing is like, like what people always misjudge is like the cost of wages. Like, if you have someone full time doing sales, they're costing you five grand a month. If you spent five grand a month on ads, you know, much traffic you'd be driving. Like, that's insane. So it's like, yes, we have a low conversion, but we have three times as many leads. So.

Yeah, that's fair. Yeah, no, I like that. Cool, dude, you're giving me a bunch to work on.

Cool.

I mean, that. That was all my questions. Like, honestly, that's. You're killing it. So I appreciate it, man.

Anything on the community, Anything on the community side I can help with. I know you guys are just starting the YouTube and everything, but are you doing like a school platform or anything like that or what?

Yeah, so we're. I'll show you it. We're trying to do.

Let me give you access here. Yeah, one second.

So, yeah, we're doing. Where is it at? Dude, I have freaking million different tabs. Which one is it on? I like. Okay, here we go. So like, the idea is we're trying to give everything that we get. I'm trying to keep it simple too. So this isn't like it'll be cleaner than this, but yeah, we're basically building every. So like, it's a. How to build out CRM. So it's like literally everything. Screenshots of our account, videos, how to set up service agreements, all that stuff. And then it's like everything. Service, marketing, sales, like literally everything that we would give to a franchise we put in here. And then we also have. So we're trying to monetize it. We're trying to follow the school games model. A little bit of. Can I reduce churn by gamifying the window cleaning experience. We're also doing it for technicians. If they have access to this, they get access to the technician games. And this is our training program that we give to our technicians for like upsells, different cleaning methods, all that stuff. And then we would run competitions. I'm sure you saw this with P4P but like, like technicians don't believe that they can hit what you ask them to do until like someone actually does it. And so like our technicians, they do like fifteen hundred dollars a day per technician and they get, get like five reviews a day. And like no one believes that my technicians can do that. So in here we're going to do competitions to where like other like technicians can compete against our technicians. And whoever gets the most whatever per month, month will like give cash bonuses and stuff. So that way they can like elevate the standard of what their technicians believe they can do compared to like technicians that are already doing it, which is cool.

How, how has that uptake been with the technicians?

What was that like?

Are there a lot of people signing up for that?

So this isn't for technicians. It's like the owners get in the group and then they can invite, this is a free one. And so they can invite their technicians into this for free.

Got it. And how many like quite a few people using that though.

I mean all of our members, they're pretty small but like, I mean members wise they've invited. There's 14 technicians in this. We're not doing the game side of it until we have 25 users in the actual group. Got it. We only have 10 users in the group right now, but they use that for their training manuals. Our training manual costs like 10k to build. Like I have an in house videographer. Ian, my service manager did this. It took him like a month to build. So it was like a lot. Yeah, but yeah, we have like 10 users right now. The idea is get 25 users then actually start running like gamifying it because we'll be making, I mean I don't even know what it is for. We're charging 500 bucks a month, so 500 times. Oh cool.

How many people you got in that?

Just, we have 10. Cool. But we haven't like, I don't even push it. These are just people that like, like people that reached out to our YouTube. They, they just like book calls with me. I have a link in the YouTube description. They can book a one on one call and like we don't even do a hard call to action at all. But I have like all of these are calls just from our YouTube and we only have like a thousand subscribers. And this is just this weekend. Next week's booked out too. So basically I jump on a call with them, I do a consulting call, and they're like, this is not scalable, so I'm not gonna do this long term, but, like, job call, solve all their problems, and then like, so can you. Can I pay you to coach me? And I'm like, let me show you. I just do it.

Yeah, that's pretty cool.

But that's.

That good for you, man. Yeah, like, that's a good model. Like, it's a higher margin. And if you get all those people and then it's like, hey, look, maybe if you were part of the $500 a month club, you had a discounted leads.

Yeah, that. Yeah, because that's what I'm trying to do. Like, everyone that gets to 50k a month, they would be in like a different, like, call with everyone. And those are the people that I would like, focus on. And to your point, like, then I could. You could do a discount for the leads, but also you could like, prioritize people that are in this. So anyways, that's like, that's like the model of. It's like we're trying to gamify window clean and like, we obviously charge a little bit more. But, like, if I pitch him on, like, I was gonna sell a franchise for 50k and like, I'm selling this to you for 500 bucks a month, and if you want to leave, you can. But, like, I want to make sure that we can provide a value to where they stick.

Yeah, no, that's good. That's really good.

Yeah. Thoughts of that? I don't know.

It was really good. I did a similar thing before the franchise. It was called Pro plus, and I think I had like 15 people in it. It was 3.99 or 4.9amonth. And just like kind of figuring out, like, what does it look like? Exchange money for content, you know, daily, weekly, like, what's the cadence of calls, etc? So it's. It's good skill to have. And then if you build that up, you could just regardless, you know, because the leads, you could just make it. If you're in the 500amonth thing, you get like them for 49. If you're not, it's 69 and then it starts to become a math game. And then you get that more of like a residual recurring 500amonth, whereas the leads come up and down Based upon the year.

Right. No, that makes sense. How come you never scaled that? Was it just like we just went into franchising after that there's no enterprise.

Value and no one does what you say. Like you can tell them everything you want in the world like about paper performance. They just won't do it because you're just a consultant, a content creator. So they'll pick and choose what they kind of want to learn from and that's fine. But like in my opinion, like if you don't do P5P open book management and profit sharing, it doesn't really work. And so just no one does it. So unless like I can tell them they need to.

Yeah, that makes sense. That the thing is. Yeah they right now these first 10 like listen to everything that I say. But I guarantee like as soon as we scale it's like 50 like that.

That's.

I'm like if I wanted to help a hundred people do a million dollars a year, I think I need at least a thousand. Yeah. Which is like crazy I don't think. Yeah, I don't think we would need to scale.

But the thing is you can scale getting, getting leads. Right. If you figure out ads in these different markets and then, then it looks very interesting to the contractors in those areas and like hey, you can join, get leads. Don't. They're addicted to leads. You get them on the599,499amonth thing.

Right.

And then you probably make a premium package down the road to something like a franchise for example.

Yeah, I think I have to figure out like the Ascension model because yeah, there's definitely like a customer journey there that can be in work for sure.

Yeah, good stuff, man. Well, hey, stay in touch and if there's anything you need from me, let me know. Also you're recording this call here later today?

Heck yeah. No, I gotta. I got all on Fathom. So we're Sean. But I do, I do have a question. I said this in the thing. Would you are do any one on one mentorship at all?

I just do these calls as much as I can. So I usually open it up here and there. So as long as these are available, you can book. I don't guarantee they'll be around forever because I can't. I just don't have a lot of time. But I try to keep it open. The media team likes to cut stuff up and then it's also just keeps me sharp in other industries. So it's fine.

Cool, cool. Well let me know if you Ever want to explore like, like equity in something? Yeah, you're like, out of all the people that I've seen, like, I'll probably book more calls because you're the only person I've found that's like where I want to be in five years. That's like literally where I want to be in five years. Right. Like everyone else is in their thing. So you're like the one person that I would want to teach me how to do stuff so well.

Your content's looking good. Like cut, cut, make your cuts tighter. Like, so it's not as long and drawn out but like the quality. Your branding is really good. Your thumbnail and title is really good. So like just keep doing that. Like if you do content well, the community part kind of follows. Then whatever you add on to that and then whatever ascension in terms of like franchise or licensing, it kind of just flows. So because people just constantly want to be closer to you, they want to like do more with you. They want to get, they want to be a part of your brand. Like, what can I do to be part of Mint? Like, it just starts to come naturally if you just provide lots of value. So even like the thing you spent $10,000 on, I would chop that up, I'd make that content. Like if you get just Dr. People to the call with you right now, you'd probably get 10 or 15 more people to sign up for, you know, your 499amonth. And if you do that, then you'd be a Florida full time videographer. Like we have 10 people now on the media team. It's just because like, if you can do that, you can drive tons of eyeballs.

Right. So do you monetize? I mean, do you monetize on YouTube?

Yeah, yeah, yeah, we will see. I wasn't. And then they, they change it to where even if you turn monetization off, they'll still run ads and they'll like the money.

Gotcha. So. So I guess is that your. I'd be curious on your play on YouTube, is it just like a franchise play? Like you're just trying to get as much exposure as possible or you are you trying to be like the guy too?

It's just like, it's just like the shorts sorts are like very high awareness. No one cares about who you are. But your hope is that like 1 out of 100 click on a long form video. The long form video. Then they watch five or ten say turnarounds, like, okay, he's legit. And then they go look on my website, right? Like, that's like the. The journey. And then the website has free courses, and then by then, they're like, okay, I'll get the book for, like, 10 bucks, whatever. And so, like, that's kind of like the model, but the. The goal is, like, you take every single dollar and just put it back in the content.

But I appreciate you. Good.

Legit.

This is, like, really cool for me. You're, like, the one guy that I'm like, this is. This is where I want to be. So I appreciate you jumping on call. It's been cool.

Yeah, brother. You have a good one. Take care.

We'll see you, man.

Yep. Bye. Bye.

Bye.