No Ads. No Budget. How Home Service Leads Really Happen

If you're trying to scale up your home service business, this video is for you. I'm talking to a group of entrepreneurs that are trying to scale past seven figures in their home service business. We're going to be talking about moving into a new market and expansion, how to handle multiple locations and a general manager's compensation. We're also going to be talking about how to delegate sales, operations and admin. And in what sequence should we be delegating and handing those roles off to our employees. Lots of questions, lots of answers. Let's get started.

Hey Mike, how you doing?

Good brother, how you doing? Congrats on great location too, brother.

Yeah, thank you. Appreciate it. So yeah, I'm going to ask you about that location. So we've kind of done a soft launch. We've done some door hangers, bulk cleanup stuff and got a few customers, a few one time cleanups, some winter services. But we're really going hard in the spring next year. And I'm wondering for our service area, should we expand that to the entire territory while you know, planning it to focus on just a small kind of third of it with our door hangers and our marketing or should we reduce the service area to that third that we're planning to focus on?

Yeah. So whenever I've gone to a new market, I always will say, okay, this is the area I think I'm going into. Here's what I know I want to go after. The reason is because I don't want to say no to customers. And then all of a sudden like we've had a couple times where all of a sudden we start getting a bunch of calls from a certain area of town where no one else is ranking. We just immediately crushed it on Google. And I don't want to be saying no to them.

So.

So if I was you, Matt, I would take the, take the whole territory in your service area. But then where you market, just be more focused in terms of where you want customers. And then if down the road like a year from now you're like, okay, 80% of them are where we're marketing. Let's just leave the other part. You could do that especially in your market where from one side or territory other could be traffic, it gets crazy. And so I, I'm more of the opinion like leaving it open at the beginning just to test and see because a lot of times those areas that are harder to get to or people kind of disqualify and you don't market to are also places where you rank first on Google and all of a sudden you're just getting for, for nothing essentially. So I would do that service area, full territory. But then like where are we focused in terms of marketing on that more, you know, smaller radius.

Okay, that makes sense. Then if something comes in and you know, outside of that area I'm focusing on, then maybe we start doing door hangers around there and kind of try to build up a day or whatever it is a route.

Yeah, this happened to my location out in North Carolina. It was like, oh my. Oh, it would definitely be as close as possible to Charlotte. And then because we could not rank the first two spots on Charlotte in the first year, we all, everything was like on the north side and I was like, oh, okay, we're just going start focusing on that area. And now I'd say probably 70% of the clients are in that top north area because it wasn't being overshadowed by huge companies in Charlotte.

Cool, cool. Okay, just maybe another question. So I've got a really solid kind of technician that's going to be leading the, the field work in White Rock. He's also really good at talking to customers and you know, you know, he really cares about doing good work. He's one of my good buddies too, so I trust him. I'm wondering, you know, I'm hoping he kind of develops and earns a gm, working GM role. So, so what should my role be in year one and then what should I kind of plan to be in in the next couple years? Like should I be doing sales? Should I let him handle it? Should I? You know, and if he's doing a lot of that, what am I focusing on? You know, I feel like that's not a, a hundred percent full time job if I'm not actually out there doing that work.

Yeah. So there's first off a little bit of color coming to this next month for you, Matt. I would say in general, when you're growing a location quickly, I know you guys, that's your intention because your first location is already kind of busting at the seams. Like I would take on scheduling off of his plate for the first 90 days. Scheduling when you're getting 5, 10, 15 new customers every week is very hard on a working gm. And so what I would really encourage is you to actually be the person that kind of just like blocks for the GM while they. Because while the same as you're getting a bunch of new customers, you also have to be hiring a bunch of new people. And this is why putting a GM into an area that is a new location is so stressful for them because they might be great at operations like running the location, but when you start adding new customers every single day and new employees every single week, that's when they, a great GM can still fall apart because they're not, they're not a growth minded gm. And so if I was you, Matt, I'd have a very clear 30, 60 and 90 day window of okay, the first 30 days you just get out and do the work and we will give you employees that you train up. Day Day 30 to 60 you will start doing some of the scheduling. It's not until after day 90 that you will step away out of daily operations. And that gives you 90 days to just gas it on marketing and get them hopefully above a hundred recurring customers to where now when you step back, you turn off, you reduce the ad spend after spring rush when your customer action cost is going to go up organically. But now they don't have 20 new customers a week being added and another employee every couple of weeks. Do that as much as possible while you're hands on but have a very clear 30, 60 and 90 day of what that's going to look like so that you guys can compare notes after each of those checkpoints.

Cool, cool. And then for compensation, should I be doing like client number budget hours on the schedule, like bonuses for this guy or, or, or some like thresholds that we reach and then bonus him.

I would personally tie the, the incentives to 30, 60, 90 benchmarks being hit. That could be around number of recurring customers but really it's out of his control because you're doing instant quotes and over the phone and you're driving the marketing. So I'm really just focusing on the benchmarks of eventually you got to take over scheduling, eventually you're taking over hiring. Those are probably the two things you're going to do for him in the first 90 days. And once you take those things on and you step back, his pay should be higher. And by the time it's now leveled off there, now we're getting to where he should be in profit sharing. So I would probably do like a, based upon these things happening, that is you start doing the hiring and you start doing the scheduling, your, your base pay is going to go up. And then once I'm out of daily operations and you're taking over and we put this thing into profit mode, you, you will also have a profit sharing incentive as well.

Okay, awesome. Thanks Mike. Appreciate it.

Hey Mike. Central exterior cleaning, we do window cleaning and Pressure washing and some gutter cleaning. So what we're working on right now is actually I'm in a house you can't really see because it's blurred, but that's my right hand right there cleaning some windows. And it's pretty much just me and him. I suck at admin. I'm good at sales. But he has been doing really well on the sales side. He's getting us a ton of five star reviews on his own. Like customers just love him. And his close rate is actually I think just as good as mine, if not better. So I'm starting to wonder what my role should be. We've talked about bringing somebody in for admin in the spring because I'm disorganized and I can admit I'm not good at it. So we're just kind of like trying to figure out what's our move going forward. We do about 230,000 this year in revenue and we're aiming to double that next year just because our costs went up so much this year that we ate a lot of profit on the fact that we didn't really raise our revenue much.

Got it? Yes. Like, I think what I would highly recommend is like in the book you are in still the solo operator size, right? And you're moving into the working GM size. So 0 to 250,000, that's the solo operator in that size. You are trying to do the work as much as possible, be out in the field to produce revenue. As you move in the working gm, you're going to want to start, start delegating your lowest leverage task, which is admin. And I would do that in a fashion of ideally not using him. He sounds like he's a great person out in operations, crushes it on reviews, even on sales. I don't want someone that is really good at operations and sales to do a lowest leverage task, which is admin. And so I think that there are, there are cheaper, less qualified people that you'd be able to find to be able to do your admin. Whether you do a virtual assistant, whether you do a per minute call service, whether you have a part time person help you in the office. The likelihood of you finding that person is easier than replacing him in the field, let alone sales.

Okay, so another question for you on that. I know you kind of have, I kind of know your stance on debt. One of the things that's been big for us is we bought another business in July of 24. So we had that business for a year this past July I brought Josh on in June, so it was right before the one year mark. One of the things that I think hurts our overhead a lot to where I might have been able to make the admin move sooner is we pay about a thousand bucks a month or twelve hundred bucks a month for that business. So we've been looking at going through the SBA to get a loan to pay off the seller finance deal that we're doing there, as well as to use that to get another truck and some equipment. Because right now we've been kind of just doing it with whatever setup I throw together that works and, and that's gotten us pretty far. But we've had a lot of headaches and issues with that in the recent past.

Yeah. So you're basically trying to consolidate it with the SBA stuff. And what's, what's nice about it, even though you might pay a bit more interest right now, is you would get a longer term, I'm assuming you probably a three year term for the finance. Seller financing.

Yeah, we did a seven, a seven year loan, but it was a three year balloon. So, yeah, so it's, it's, it was for 70 grand, but yeah, we're paying about 1200amonth. And the way it's set up right.

Now, what you might want to think about doing is getting a micro SBA loan that's 50,000 that will, they'll get processed in less than half the time and usually has way less requirements. So as long as you can stomach the 20 grand at the three year balloon, you might want to just focus on a micro SBA loan. It's called. Okay, yeah, talk to, talk to your local credit union just like, hey, do you all do micro SBA? Because some banks won't, they'll just do a 7A or a 504. But if you get a micro, they can process sometimes within 30 to 60 days, which that is like way less than half of like a regular 5 or 4 or 7 loan.

Okay, thank you.

Awesome. Okay, so I have a secret just for everyone watching this video, but on February 17th, we're officially changing the name of co pilot CRM to Homeworks. So get ready because something big is about to happen. Next up. Seth. Go ahead.

So I do solo landscaping, lawn maintenance here in Phoenix area. So my main question revolved around like, so I've been doing it due to some Social Security reasons under the table here for about two years and I'm finally above board. This year I'm planning on launching. That's why I'm getting CRM and everything. So my main question is right now I have about 20 clients and I did my hourly. I'm looking at about $50 hourly rate which I'm trying to shoot for more this year. Around 75 to start and then ideally 100 from based on what I've heard. So I'm wondering like but since here in Phoenix is a lot more not grass focus is a lot more bush trimming. It seems like almost every service is almost like a mini cleanup. So I'm wondering how to price that for monthly, bi weekly, weekly services and how you suggest doing that. I know I noticed you had a.

Few Phoenix location so yeah so it's still same concept. You're still selling time, right? Ultimately we all get fancy with you know, different types of services but all of us sell time whether what kind of tools you use, level of experience required materials are added. We're still all selling time and we make the markup on time based upon us training our crew, having equipment, having the materials ordered, etc. And so I don't care if you're trimming a bush, pulling weeds, spraying trim like or mowing grass, you're still spending time on the property so you still want to use budgeted hours. And so it just so happens that your budget hours are going to look very much like our winter services which is we don't mow the grass, we turn the bushes, we pull weeds, we edge the lawn, we check the gutters, we do all these other things. And so what we've seen successful in in that market Seth is offering year round monthly contracts I say contracts with very loose just monthly cost and then a long list of things that you're going to do for them. Whether it be blowing off the walkways, picking up down branches, raking out the beds, pulling weeds. A lot of them will do the fire like burning out weeds. So get really creative with that list is and then do instant quotes once it's inside copilot and soon to be homeworks once it's in there. Use instant quotes as a way to sell small, medium and large for those full service quote unquote. Property maintenance. That's what I'd be selling as property.

Maintenance because I got a pretty good average is usually around two hours on the monthly what I spend on each job around for the maintenance and the property sizes I'm working on.

So yeah so you could do, you could do like a 129, 149, 179 as a small, medium and large and sell those like, hotcakes.

Got you. And then so for like a monthly contract, are you guys showing up once a month or like, do you guys have separate ones for like, if you want them to show up weekly or whatever, and then you just bill it monthly?

Yeah, so we show weekly and bi weekly prices and then always assume weekly. So when they accept on like our instant quotes, we assume always weekly. In your market, bi weekly is the most popular because they don't need weekly. So again, just take that into court. You said two hours monthly. I assume that you're spending about an hour per visit every other week. Is that correct? Yeah, yeah, yeah. So, so just hinge on that. Like, down the road you'll do instant quotes. But for now it's just like, hey, we come every other week. It includes all of these things. And you make that list good. Like, really think through all the stuff you can do in someone's property that might take 10 seconds or a minute or two minutes or whatever, but you can make that property maintenance list very long and actually sell just as much as mowing in that market. It's just a matter of getting creative with all the other things you can do that they're not even thinking of.

Yeah. And then one as extra one on that. And so then upsells then beyond that. So that's the thing. Since I'm doing so much of the cleaning, it's harder to sell a cleanup, a seasonal cleanup when I'm doing the cleanup basically once a month. So would you just upsell it in a different way and just not use that or just.

Yeah, Upsells in that market work well usually when you're removing landscaping. So, like, if they have a bunch of bushes, it's like, hey, we notice these keep getting overgrown. Some of them are dying. You don't have them irrigated. Would you like us to a remove them? That's going to cost you 380 bucks we can get next week. Or would you like to put some drip irrigation on it? It's going to cost you $600 and we guarantee they'll come back to life. Like, you can get creative with those upsells, but usually it has to do with removal or saving the the for like, the foliage.

Gotcha. Thank you so much.

All right, next one is Dan Irving from Irving Landscapes. Welcome.

What is your ratio when you hand out like 10, 20,000 flyer door hangers? What are you getting back? What should you be getting back? And do you always hit the same area year after year, or should you be Moving a little bit out of those areas or what?

Yeah. So we have seen as low as 1 out of 400 and we've seen it as good as 1 out of 50. And what's crazy is many times those will be the same areas really. The door hanger, especially if you're doing instant pricing on it, it mostly hinges on the timing and the weather. And so if you do door hangers in one area and they get one out of 400, you could very well go the next week. But now that the sun's out and there's not snow on the ground, it's one out of 50. And so timing is, is probably the biggest thing about door hangers we have noticed. And then it's about conversion of the door hanger. So that's why it's so hard to test door hangers specifically and know what's working and what's not working. You can't compare last week versus this week if the weather is different than this week. That's why we, we compare it on an annual basis. So like March, the first week of March, we compare to last week's first week of March, March, once we made a tweak or a change in the variable of the, of the door hanger. So I think with 20,000, you can definitely take approach where it's like, hey, let's do a scattered approach. And then the ones that are winners, let's just zero in on those and do a second or third round there. Because most of the time when you do your second or third round, it's not that they've seen you two or three times because the door hanger is, it jumps through all of that and gives them a price. Assuming you're doing instant pricing on there, it jumps through all of the, like, warm up and goes straight to like, will you marry me? It's like, here's the ring, do you want it? And so that's the nice thing on instant quotes in general. So that's why warming up, for instance, quotes is less valuable in my opinion. It's, it's just a matter of timing.

Perfect. Yeah. No, thank you very much. That's what I've been looking at doing. And you know, building a 20,000 flyers is not a cheap thing. And so we're really looking at probably as soon as the warm weather starts coming in April, beginning of April is what we're going to try, hand out these 20,000 in one week. And so thank you very much for your time.

You got it. One thing I'll say on that too is like, one week is pretty narrow. Just keep that in mind. I would probably do 10,000 in one week. And then that way if it doesn't do well, I'd probably wait two weeks and go again. Because sometimes that first week after snow is gone. Yes. Everyone's thinking about it, but their lawn hasn't started growing yet. And so sometimes door hangers work the best when there's actual pain, which is my lawn is too tall and I'm getting a letter from the hoa. Just keep that in mind. All right, next one is Josie. I think that's what it is. Go ahead.

Hello?

Yeah, it's Dennis. You kind of touched on it for a moment about GMs and stuff. So my question is, is how do you pay those guys? And I know you talked about profit sharing. And so I guess more specifically to like, like, what percentage of profit sharing for, like, GMs and then as well as like, kind of their roles and why I should expect.

As far as. And I do have the book.

Just.

Just got in the mail.

Just got it.

Oh, you got to read it. There's a chapter on compensation and like, their role warming them up. I think the big thing is if it's in a new. You'll see, like we call. I call it a sales GM and then an operations gm. Like if they're more sales oriented, they can grow a location from zero. If you're handing one off that's already kind of like locked and loaded in profit mode, then you can have an operational GM and then you can immediately start with profit sharing. And so this location, Dennis, is this a location that's already, like, in motion, profitable, etc. Or brand new?

We.

So we started right next to. So we have. So we're in Traverse City area. So right next to Benzie county, which we're also in Benzi Traverse, Bear Lake has just been kind of a natural growth area. Kind of what you were talking about with that one guy where we're just getting a lot of leads and so hence you guys do our. Our website as well. So we threw Bear Lake in there and it just kind of. We rank super well there. So we figured coming into this upcoming year, we'll get the employees to do it. So nothing really, no marketing besides just ranking really well in the area and get called based off of the ranking.

Well, yep. So then what I would probably do, if you're going to put a GM in the new area that says, let's say has 30 to 50 customers, I'm just making Numbers up. And you're like, hey, we know break evens at 80 or 100. I'm making numbers up. Then I would give comp to that person based upon the revenue or number of recurring customers and give them incentives to get to that level. But you know that at that level, you start going into profit mode and making profit, and then they would switch over to profit sharing. So when they're like, when growth is the goal because you're trying to get above capacity, that's when I'm going to send them on things besides profit sharing. But once I'm there, I don't want them thinking about anything besides distributable cash.

Okay.

Yeah.

Cool.

Good stuff. Best of lucky on that. We got Osborne.

Yeah, My name is Pete Osborne. Upstate South Carolina. My wife is 19 weeks pregnant and our baby has hypoplastic left heart syndrome. So we have to deliver at MUSC in Charleston, which is three and a half hours away. And so we're looking at being in Charleston probably until August. It's three and a half hours away. So I can jump back up here and go back down there when I need to, to put fires out.

Yeah, well, I would do. I would do. Dennis is first off, I would lean very heavy into estimate videos. Do you know. Do you know what I say when I, when I say that?

What I mean, not really.

Okay, that's fine. That's fine. So I talk about in the book, and there's, there's videos on it inside Copilot Academy, but basically it's when you make the estimate, you're going to take a video of the project before you leave the property that way. Okay, cool. So first off, I would say definitely use that new feature in Field Force, so that way it can be inside the app and that will help the crew be able to do the work without you there. Asterisks. I would make a list of all the services. You know that if it's being sold while you're away, is going to have problems. So, like, there's levels of projects, right? So, like, you know which ones are definitely going to require you on site or there's going to be big issues. I would just say if it's on the estimate, that has to be scheduled after. Let's just call it August 1st. The nice thing is when it comes to project work is people sometimes will wait 3, 4, 5, 6 months to get you to do the work. But then your admin staff, when someone calls in and say, hey, I want concrete work, just making something up, they'll be like, hey, just so you know, there is a six month backlog and as long as you're okay with that, we'll set up the estimate and then you're going to go do the estimate. You're going to make the estimate video. But now when that job is accepted, let's just say in February, you're putting it on the schedule in, in August. So that way it would reduce the amount of like huge changes you need to make in the business. I don't think you need to do that. I think it's a matter of like, what are the services that I think the crew can get done with just a video. Here's all the other services that I know I have to be on site and if I'm not, it's going to go bad. Just do not schedule any of those jobs from May 15 to August 1 or whatever it is.

Okay? Thanks, Mike.

You got it. And best of luck to you and your wife. Tony, you're up.

Hey, Mike.

How you doing?

Good, brother. First question.

What and, or how do you stay disciplined and not get to get distracted on working on the business rather than in the business? And then the second part is, when does it make sense to build your own software for the business to maximize it, maximize the business valuation to sell?

Okay, so let's attack the first one and that is staying disciplined. Because logically I know that it's the right thing to do. Once I'm over a certain size, everyone jumps into it too soon, in my opinion. And so people that should be out in the field doing operations, creating systems around sales, helping their admin person do SOPs, they're like, I'm working on the business. I'm going to do acquisitions. It's like, no, no. Like you still need to be in the business, but once the business gets over a million, million five, that's where it's like working on the business has a higher leverage because I can create systems that can, then 10 other people can do. And if I can say 5% of time, multiply 10% of the time, I create half an employee overnight. And so the discipline honestly just comes from knowing that that's the case and then convincing myself, using math, that my time, like, you can't. Once you grow the business to a certain size, you cannot, cannot outwork problems. And when you're a solo operator, when you have 1, 2, 3 employees, if there's a problem, you just work harder. You get to the point where that no longer is the case. You have so many budget hours on schedule. If something goes wrong and system their system failure, you can't step in and just solve the problem by working more hours. It's then that you are forced to work on the business. So I think this is a function of pain. It gets so painful of you tired of not being able to outwork the problem that you just realize I have to create systems that will solve this when I'm not there. To answer the second question, what specifically are you talking about? Because you're talking about valuation and software. Are you thinking like a specific widget or are you thinking like what software specifically and what, what are you trying to maximize for enterprise value?

So we consulted with Patrick David before and one of the things he said was when he was building his business and he sold it for 250 million was that when they became tech enabled, their valuation went up substantially.

Right.

And so that's just something that just knocks around in the back of my mind. You know, the goal at some point into the future will be to sell and as we're working on the business, just making sure that that's some, some something that's in our mind and that we're, we're focusing on just, just to make sure that we can maximize the valuation.

Yeah. So tech enabled is very different than being a tech company. And, and everyone thinks they can become a software company and then immediately increase their valuation when reality, if you went to the market they would look to you and value as a landscaping company. That so happens to have technology. But the landscaping and the metrics and the profitability of that is what you'd be actually measured on. Because you're a landscaping company. Being tech enabled should allow your landscape to be more profitable and be more efficient. And so I have learned this the hard way the past three years. Building software is extremely expensive and very difficult. And there's a reason why people get paid very well to do it. And the top 1% are the billionaires that we all know on the force 500 like top 100. It's extremely hard and it's a different business than landscaping. And so in my opinion, if you're really good at landscaping, use technology to plug things in to be able to make your landscapeness 10 times more profitable. And so whether that be automations AI transcripts on phone calls, like using RingCentral, using Ring Sense, which plugs into RingCentral to be able to have transcripts every phone call ranking every single phone, giving coaching to every single person on the phone, like these are the things that I think tech Enablement allows. And. But if you look at Patrick's business model, he was valued based on the insurance premiums that he was getting.

Right.

The tech enablement allowed him to scale the insurance company.

Right.

He did not build the software, he enabled the insurance company using technology. And so I would really focus on that because building software is like a completely different business. And I like learned that the very, very hard way a few years ago.

How do you identify high leverage activities? Like what's the best time, where you're spending your time set?

Yeah. You find the amount of time, resources and money. And so as a CEO, your only skill becomes is decision making as to where those are allocated. And so it is the high, the highest leverage thing you can do is make decisions. This is why like you hear Bezos talk about like, if he makes two or three good decisions a day, that was a good day. So ultimately, as you chunk up the amount of people you're managing, doing work actually has very little value. Making good decisions is the only thing that matters. The thing that is, what are the inputs that go into making those good decisions? Usually great people, great data, great technology to be able to make sure that things are accurate. And so usually as you're building up 1 million to 5 million and even up to 10 million, you're actually just trying to gather people, you're trying to gather the data and create accurate data layer to be able to then make good decisions. That then 10 million plus is usually decision making.

I appreciate it very much, Mike, thank you.