Why This $1.2M Business Can’t Afford to Grow

Hey everyone, it's Mike Andes and today is going to be a one on one coaching call that I had with a business that has over $1.2 million selling garage doors, doors and windows out from Canada. But this is a great call because I actually had a call with him last year and he was in a very commoditized business where he was selling wholesale to manufacturers and dealers and other contractors. He's been able to move now into much more of a retail, direct to consumer model where he's able to charge a much higher price and was able to raise his prices by 25%. Is a great coaching call. I think it'll be a lot of good takeaways for you. I look at your site, make made some really good changes. Maybe just kind of fill me in since we talked last.

So I guess at the time the question was about hiring the technicians and stuff for the garage doors. Right. So originally I was gonna go ahead and order both tech or hire both technicians, sorry. And you know, bring them on board and you know, execute the way we had talked and stuff. But then I guess something fell through and one of the guys that was working for his dad, I guess his dad and his brother, they were working on trying to get the business back on track and were able to iron some things out. So he ended up just stay the family business. And so I ended up just getting one of the technicians, which was actually good because we didn't grow as fast as I thought we would and we didn't have the proper team in the office. So things have been good. But since then we grew, we've done decent, been a pretty good year. And I just recently brought in a very experienced office manager that's going to run the show, tell us what to do and runs part of our marketing and all that stuff. So that kind of clears up my hands for, for sales and operations and all that stuff. And that's kind of, kind of where we're at right now, you know, just, you know, working on growing and stuff. And you know, with the big overhead that we have, I noticed that overhead is quite big. And since we do manufacturing and installs and service work, I'm having a hard time figuring out how do we split up the overhead, like how do we split the overhead into each division to make sense? Because what I've noticed is in the garage door service side of it, we've got like all the local companies, their overhead is nothing compared to ours. They've got a little office, a little shop, and their overhead, like the Building is paid for. Their only overhead they have is their guys, is payroll, then their trucks and maintenance and stuff. Right. So at the end of the day, I'm not terribly concerned. I know we can brand and we can, you know, present ourselves more professional than they can. But just, you know, at the end of the day, basically, I've been really struggling kind of going back and forth. How do I split up the overhead for the manufacturing? Because most of the overhead that we have is in the manufacturing side of it. Right. Or like we use most of the space that we have for the manufacturing and then also, you know, for the install team. And we also do quite a bit of wholesale in Windows. You know, how to, how do we split that up and, and then also, yeah, kind of go from there because obviously the profits that I would like to make right now seems like it's not really working. Just because our overhead is so big, we have to grow, bring in a bigger team. So the overhead gets split up in between more people, right?

Yeah. Like is most overhead wages or is it like a fixed expense of the shop?

No, at this point it is. The shop is a big one. And then the overhead team. So we got three people in the office right now, so that's kind of the big one. But we kind of have to have the team in the office that we have to grow to the next level. But you know, when it really comes down to like, even if I get rid of one of the, one, one of the guys in the office, you know, we're still, we're still in trouble. Right. We need the team that we have in the office right now to grow to the next level.

Yeah. So like, there's two part question. I think the, the, the, the part we'll focus on is like, basically we need to grow. Right. It's like from a lead gen perspective. But then in terms of accounting for the overhead, what percent? Like can you could just do a time analysis and like figure out what percentage of their day is actually spent on the service versus the, the manufacturing and then just do like a journal entry. Do you have different QuickBooks accounts or like accounts for manufacturing versus service or is it all blended?

It's all blended. And I've got a team for like my shop team stays in the shop and my field team stays in the field. Right. So, so I mean we're doing, you're.

Trying to determine like, okay, these three overhead people, were their wages, are they considered overhead for manufacturing or for service? Is that like your, your main problem?

Yeah, yeah, kind of yeah. Just. Yeah. Trying to figure out. Yeah. Where. Where the overhead goes and how to kind of split that up. Because I kind of know my, my, my big number and what they're overhead is a month and it's ridiculous. I just, yeah. Kind of need some insight on how to kind of split that up and kind of, I guess help create a structure for growth to where it makes sense.

Is most of the growth going to come on the service side?

No, I don't think so. No. Because since I guess since November, we just launched a website and we were talking about going straight to the public with our product. At the time it was kind of between, kind of back and forth. We've launched, we're 100% to the public now. We got rid of most of our dealers. We've been very successful with it. It's just now we get quite a bit of leads on the window and door side of it. Quite a bit of leads on the windows and doors and then the garage doors and stuff.

Yeah.

And it's just seem, you know, majority of the sales, majority of the stuff that we get like that we quote, we sell. But it's still. There's quite a bit of quotes that we do like, you know, what price are just too high and it, you know, turns out the competitor down the road is less and just trying to, I guess, finding a way to justify, you know, lowering the prices and see how that would make sense.

Okay. Yes. Like if the growth was on the service side, you know, and because you're going straight to the manufacturing. Because you're not installing the doors, are you?

We are now. Yes. We're. We're selling and installing like we're selling it to the homeowners, installing and everything. We don't really have any.

From revenue perspective, what percentage of the sales, what like are like installation and service versus the manufacturing from a revenue perspective.

Just think here. Manufacturing versus versus like the installs. Well, for every door that we make, we basically install too. Right. So like it kind of goes a hand in hand.

Got it. Okay, cool. Then I would not worry too much about splitting up your overhead between manufacturing and service. If you're basically making it and then you're going and installing it, I think that like if you're not. If you're not also just selling the manufactured door by itself without installation, I would consider that all the same process.

Yeah. Yeah, I guess. Okay. I guess kind of thinking back now, I guess. Yeah. So I guess there's some wholesaling stuff like the. For new construction projects where we do supply only, and I guess that's where we just do, you know, make the doors and have the delivery where they would pick them up. And that's all we have to do with.

So I guess.

And that's kind of where it gets sticky because there's companies on here do higher. Higher volume than we do, so we can afford to sell for less.

Got so lower margins when you don't install, but you're just producing the door.

Yeah.

And do you think that's like, what, 20% of revenue that you're just doing that?

I would say 20 to 30, yeah.

Okay. I wouldn't be too concerned about splitting up the overhead, like, in terms like, okay, this is like overhead for manufacturing, this overhead for service, because 70% of your revenue is coming from something where that's going to be very, very murky. Like the handoff from, like, when is this manufacturing versus when is this installation? Until you got to the point where you had, like, the departments are so split, you'd have different teams for admin. Right. You have different teams for, okay, you guys get the door made, you guys get the door installed. But I think it's probably you double or triple the size of the business before you actually have different teams for those two different admin functions. So I wouldn't be too concerned about that. I think the big question is, how do we grow the business to the point where the three people in the office make sense? Right? Yeah. Okay, cool. And so what's the growth been like in terms of revenue? What's the margin like, give me a little bit of numbers so we can then focus on, hey, what's the. What's the growth strategy?

So in terms of numbers, growth and stuff, like I said, we basically restructured the business at the end of last year. All the customers that we used to have, that brought us up to the million dollars in revenue, we don't really have much left. Those customers, just because of the unique economy, they all went for a lower product, lower quality product. Right. So in terms of numbers, we're still like, last year I think we did 1.1, and right now we already did 1.1 so far this year. So we're on track to do about 1.4, 1.5.

Got it. So.

And then as far as, like the bottom end, honestly, you know, we keep, you know, hiring people and stuff, so the overhead keeps growing. So far, at the overhead rate that we're right now, a lot of the projects that I've been selling, we've been. We've Been able to sell them at a, like a 30, 30 to 40 net depending on the client. Sometimes we got to trim it up a little bit or whatever, but that's kind of where we're what we've been able to do.

And it's the over that's killing you because at the end of the day like the bottom line. Okay, got it. Okay. And what's the goal for the business? Are you trying to like take this to 5 million? Are you trying to just make this more profitable at 2 million? What's, what's kind of the goal?

I haven't really looked at. I guess at the end of the day goal it is basically what I've, what I've realized is because we basically have two business, right? We do the manufacturing and the installs. There's not many companies around here that do that. They do either one or the other. We're doing both. So with a team that is required to run this business properly, I think we're going to be, we're going to have to be right around the 3 mil mark to be, you know, have like, be like good and profitable. That's kind of the goal to get to that. And with the team that we have right now, we got eight players in every division. With everything that we do from there, we can just hire helping hands and stuff. I'm fairly confident that that's reachable in about, I would say about two years. We, we should be able to hit that.

Okay, cool. All right, well, I got enough context, so if you feel free, if there's some specific questions we can dive in, whether it be, you know, marketing channels or whatever. But yeah, that's great. I have full context now. So. So from your opinion, is it most just lead gen, like how do we get more leads in the door?

Yeah, so yeah, we're working on that. We haven't really done much in like advertising Google Ads. We've been getting quite a bit of lead.

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We started the Google Ads just because I hired another person and overhead is, you know, she's very experienced so it's quite costly to bring her in. But it's a good, good investment. I'm happy, and I'm confident that we get to the next level. Right. So, yeah, leads isn't one thing. And it's just I've seen companies, they. They blow up and grow fairly quick. Right. And I know their numbers are, you know, they'll blow everybody of the park when it comes to pricing and stuff. And for me, I have a hard time justifying that because, you know, at the end of the day, what we do is we offer lifetime warranty on the product and workmanship. So I just have a hard time, you know, trimming my prices down so far. And the other thing is. So the other thing that I've been looking at is once we get more efficient, we have a bigger team, most of the overhead that we have right now gets split up between another two or three people, and now we can afford to sell less and so have it. Have a healthy profit margin. You see what I mean? That's just because I see you guys are probably doing something very similar in the lawn care business. Right. And that's just kind of. I guess I need some insight on how to. How to justify that side of it, because I know if I drop my prices, we can do a lot more. But it seemed like, you know, we're not really going to profit much until we get a bigger team and we get busier. Like, does it make sense? Like, is that justifiable?

Yeah. Like, what's the close ratio right now? And what percentage of your jobs that you give a bid are accepted?

I would say we're probably.

60, high 60s.

I'm inclined to raise your prices. I know you don't want to hear that.

Yeah. So raise prices.

But if you're trying to become profitable, if you raise prices by 10%, you would probably double your net profit on the bottom line. And I think if you raise your prices, you'd probably go from high 60s to high 50s.

Yeah.

But again, the extra margin also give you the money to, like, really focus on marketing.

Yeah. And the other thing is, we're not a capacity yet. I don't know if that makes it. If that changes it.

Well, it just depends. That's why I say, like, the goal. If the goal. If the business is cash constrained, then I would push in the direction of raise prices and cut one person to get to capacity. If you're like, hey, we're. We got plenty of cash and I just need to grow this thing and I want to keep everything I got. Like, do not hire one to fire, lay anyone off Great. Then we're going to market like crazy, fill the lead hopper full and not be very profitable for this year, and then do exactly what we talked about, raising prices next year. It just comes down to like, the cash position of the business. If the cash position is healthy and like, hey, I got a month worth of revenue in the bank. No problem, we're good to go. Then I would be okay, great. Like, let's just go focus on marketing and drive more leads in and figure out, like, what can we do there and, you know, close 70% of jobs. Great. But at 70%, I just know if you raise prices by 10 to 15%, you would hardly see an impact in your close ratio. Maybe 5% and, and doing that would double your profit margin.

Okay. All right.

So it really comes down to like, risk tolerance and then cash position because you have high risk talent. Go ahead.

Yeah. As far as like the cash situation, we're not in greatest shape just because we spent a lot of money to like the showroom and all that stuff, you know, upgrading our website and we've done a lot of SEO work and all that stuff. So we are in a bit of a tough spot and we have to, you know, grow and get to the next level with the overhead that we have right now with it, with the admin. Because for me, the admin side of it and like the office side, bookkeeping, all that stuff, it's. It's my weakness and it's a big mess. We're getting that all sorted out right now. And with the person that I have in here, like Lynn, she's going to get this all sorted out. Then we just have to make sure that we all stay busy as a full team. So we don't all of a sudden. No. Sit around and do not a whole lot.

I think we can do both. Right. So I personally believe if you raise your prices by a minimum of 15%, lose some customers in terms of your close rate. Like, first off, I don't know if we know our close rate. Like, I think we need to actually dig into that and what is that number before we move forward so we can actually track then the future. I would also look at what your close rate is like last August and September, because, like, it's seasonal to some degree too. So I would really know that number. Then I would raise my prices and I would say, okay, where's the close ratio land after that? I. I can almost guarantee you it'll close. It'll will not drop more than 10%, but you will double your Profits, you're like, well then, well how? Like we're not capacity. We're going to take half of that extra reven that we're generating our extra profit and put into marketing. So we generate so many more leads and our close ratio is going to drop marginally but we're going to be able to double how much we spend on marketing. And so now your, your strength like sales going out in marketing, you focus on that. You then have the margin to cover Lynn on the admin side. So things get dialed in and then because you focus on the sales, you will drive enough leads to be able to keep your crew busy. Yeah, but at 70% like assuming it's 70% in terms of a close rate. I don't care what anyone says, I don't care. Your competition is you high priced?

Yeah, yeah, yeah. Based on the value that we bring to them. Right. Because we've got a lot of guys in the area that you know that are less than half the price and we are, it's just, but we, I.

Know the value every single time, every time you give them an estimate to ballot and they're just like yes, we are willing. And if 70% of people are willing like you are not overpriced. So like I think the, the fastest lever in this business to make it profitable and then have margin to go grow is going to be raise price of 15%. And and and then you just did dedicate in his mind, okay, maybe I need two months of that to give help my cash flow a little bit, bring margins up. But then I'm going to take a big ch. This I'm going to go start marketing and drive in way more leads. Because if you're able to double the lead flow because of better marketing but your close ratio drops by 10% because of higher prices, that's a really good thing.

I see that. And by, by doing all of that it's also going to get busy and bring in more people and the fixed overhead is going to get divided because we're going to have more generating revenue guys in the shop.

Okay.

Yeah. Now as far as, yeah I guess as far as like the marketing and stuff like that, what would you, what would you suggest doing there?

Well like this kind of leans into like why last year we talked about moving into this market is because they are going to be less price sensitive than those, the dealers and like all that stuff. So like this is why we did this, that this hard transition is that you like the whole goal here is to be able to raise Our prices and you've delivered enough value where 70% of people say yes, we should be raising prices. And so we do that. We get enough margin now to be able to then spend money on marketing. And then it just comes down to okay, right now, where are the leads coming from?

Where are they coming from? Now is like all Google is it people walking the door. Where are the leads coming from?

Now there's Google, there's walk ins. Some come through our social media that we have like we do, we have a team that does that creates contents and posts and everything. They shoot the videos and all that stuff. And there's yard signs, door hangers. Like whenever we go and sell a job, we set up a yard sign. We do 10 to 15 houses a neighborhood literally with our trucks driving around. Just, just a mixture of everything right now.

Yeah, like so like the first thing I, I think Lynn will probably bring up is su and admin is probably like we need to know the referral source for every single because we don't know where they're coming from. We don't even know where to spend the money once we have it to deploy. If, if, if everyone's saying they, they saw your yard signs, all of a sudden once you get an extra ten grand a month in profit because of the price increase, you're going to go spend half of it on more yard signs. Right. But we don't, we don't know what that mix is right now. We don't know how many are actually coming from Google, how many are actually coming from walk in Facebook, Am I actually coming from the door, from the yard signs? And if without that we are flying blind. Especially because you have that in per you have the physical component of walk ins that, that's like, that is very difficult to then know. Like to be able to.

Know where that's coming from because they might see me on Facebook but then they walk on the door. I need to know that it can't like I'm still going to attribute that to Facebook. So I know that's where I need to spend more money.

Yeah, 100%. Okay. So as far as like running Google Ads and stuff, what's your experience? How long does it usually take till you actually see Google Ads something it.

Should be pretty much instant because you're searching intent based marketing. So if someone searches in this area, garage doors, windows or doors, like I should be popping up. So that should be relatively instant. And what's nice about Google is you can track how many people actually do submit a form. So it's like the easiest form of like tracking. That's why online is so much easier than in person. As soon as you move in, in person, people walk in the door. Everyone needs to, we all need to know where that person come from. Like, I will not say like, oh, we just saw you. Like, no you didn't. Like, did you see my truck? Did you see my yard sign? Did someone tell you about us? Like your contractor? Tell us like you got to know. And I think once, once we have that data, we can move forward. But like from, from Google's perspective, I should be like, if I run an ad within a week, it should zero in pretty quickly on my keywords. I should be able to give it negative keywords that aren't useful for me. I should be able to track that very, very quickly.

Yeah.

Do you have some doing your ads now for Google?

Yeah, Lynn is doing that.

Does she know how to put like a Google tracking code on behind your lead form and stuff?

Yeah. So what she did is like she, she used to run Google Ads for a dealership, which is probably about 10 years ago or so. So everything has changed. So what she did is she was on the phone with, with a rep from Google Ad. They walked her through everything, they tracked everything, you know, they fine tuned everything and for now she just copied and paste the rest of it. So you have to track and everything is, it's all dialed in.

Do you know what your customer acquisition cost is right now from, from Google?

Well, this is, we're literally on week, week one. Like we, we just all launched ads about a week ago.

Oh cool. Okay. So like the good thing is within a matter of hopefully a week or two, we should be able to see, okay how many people clicked, how many people converted and then what were the value of those conversions. Right. So we should be able to have that, those numbers here pretty soon. And then if it's a really good customer recruiting cause like we just put more money on it. The thing with Google is there's only so many people searching in your area for those keywords. And so you might, you might threshold there of like I can't spend more than $50 a day or a hundred dollars a day before it's like we're tapped out. And then we have to figure out, okay, do we go Facebook, do we go yard signs, do we start disruptive marketing instead of intent based marketing, which is great from Google?

Yeah.

What are you spending per day on that?

So we have, the Google Ads are specifically for every town. So we got probably six ads, because we, we got a pretty good area around us. We're doing about 15 to 20 bucks a town per day.

Okay, that's pretty good. It's around 1500 bucks a month. Yeah, that's pretty good. And I think it's a function of, you know, if, if you run this for three weeks and now you have customer acquisition costs and it's 20 bucks, we're like, okay, great, let's put more money on this. 5 more. $5 more per day per city. So you should know within a week or two, like getting some good data, assuming that tracking code is set up correctly, you should start having some pretty good data on that.

Okay. All right.

The same thing is true with Facebook. Facebook is disruptive marketing, which means I can throw more money at it. But the same thing is true. Like you can put a Facebook pixel behind that, track that, that lead form and know exactly how many people are actually submitting estimates and then see how many of them convert and what the value of that is. So that's the nice thing about doing it online is you will get a very clean track.

Yeah, yeah. The other thing is, like speaking of Facebook and Facebook marketing and stuff, there is a couple of big players in the area that are higher priced than we are. Actually, one of the companies I used to work for, how do we stand out from the crowd and how do we stand out and attract people to us? Because if we start running ads, if crazy thing is they offer 50% off in their product or a thousand bucks off the door and stuff like that, we are not that high priced that we can afford to do that. How do we kind of stay up with the big boys? I mean, or should we even worry about that?

Well, this is, this is why they're the big boys is because they figured out, okay, we go premium. And then when we need to get people in the door, we always have room to move down. Right. So this becomes a very much a game of, okay, well, maybe we don't raise price by 15%, maybe raising by 25%, knowing then we have margin to move down in terms of making offers. We can use scarcity, we can use urgency, we can use the date, you know, a holiday to be able to say, hey, everything's 10 off or 100 off this door. So, you know, there's a reason why they're big. And that is like when you go, when you go premium, you now have the margin when needed to be able to move down and make an offer and get people to move.

Yeah, well, I Mean, for me, I personally thought that we were already at a premium with, with a 40% net because, I mean, these are not low ticket items. Like, you know, there's three doors and we're about $10,000, right? So. And I know these, these other companies, they're worse. But the biggest problem with them is when they go and sell, when they go and quote a project, they would probably be right around 20,000 for those three doors. The moment they see a customer freak out or not, trust me, whatever, they would almost instantly drop the price by 50% in their face right there. That's, you know, that's, that's the kind of conversation that everybody's having in the area about those companies. And that's why I kind of like what they do to a point. But I also don't like it because, you know, they like us because we're like a family business and those guys are monsters, right? They're just, you know, doing crazy stuff.

So, so here's what I would do. I would make it where, let's just call it the $20,000. It includes crazy offer. Like, it's crazy good stuff. So, for example, we come back at month six and, and month 12. We do a tune up, for example. I'm just making stuff up. You build tons of value that they don't even offer right now, like return service, maintenance, repairs, guarantees, warranties, whatever. And then you always have the ability to take stuff down in terms of scope of work. And those guarantees, warranties, et cetera, to get within the price range of the customer. And so for like right now, you have workmanship guarantees, right? And what is that exactly? Like, if you install a door is like, hey, if it ever breaks, we'll come fix it. Like, what does that, what does that look like?

Yeah, I mean, literally, if, if in this case here, I mean, there's hinges and there's seals and stuff that go, that go eventually, right? When that day comes, we come out, we come and replace them. Right? You know, that's, that's kind of what we had to do. And that's why it got to the closing ratio where we're at. And also we're able to raise our price because we're selling more now than we did before with charging 25% less because, just because of value we brought to them, right in the way we speak. So, you know, there's a bit of.

The same thing again. You do the same thing and we raise prices by 25%, we figure out more ways of adding value, right? And so I think, like, if. What else could you do if taken to the extreme? Like, if someone paid you three times as much for a door, what more could you do in terms of ongoing service, warranties, guarantees? Is there staining? Like, what other things could you mix into that? Last year at Augusta Lawn Care, the average location grew revenue by more than 27. And we're on track to beat that this year. If you want to see why, go to augustalawncare services.com franchise and watch over 50 videos and case studies of different owners that took their independent lawn care business and turned it into Augusta Lawn Care. Like garage doors, do you install those?

Yes. And so, yeah, I guess until now I've mainly just been focusing on the man doors and windows. Garage doors is one of the other things. And that's. So the garage pricing itself, there's just good margins when it comes to service work. It's. It's not as good. But what I was thinking on the garage side of it is because nobody offers the lifetime workmanship on garage roofs around here. They all offer one year and that's it. Nobody offers lifetime parts replacement like springs and cables and weather stripping. We have a product, we have a supplier that offers 25 years warranty on the panels and certain parts so we can make that door bulletproof. The only thing that we'd have to do is if something goes haywire, if it's spring breaks or something, we go out and replace it, which cost us 50 bucks, but something we can sell for 400. Right. So that's kind of what I'm thinking of doing on the garage side of it. But I want to wait until I have a little bit more time. I want to keep putting fire on or putting gas on the windows and doors, because that's where leads are coming in right now. Focus and then eventually go and sell the garages back to your customer. Because I realized that if. If I want to, you know, change the way we sell at garage doors and what we offer in the garage doors, I gotta, you know, have a unique package and be ready to throw this out on the market. Just go heavy on it because. And I'm just not ready. And I don't really have my team ready because I don't want. I don't want to be the bottleneck too. So, like, if a customer calls in and I don't have somebody in the office, I can answer all these questions, then it doesn't make sense for me to do that. So I got. We're planning on sending the guys out for Some training and stuff in January. After that we'll be able to launch for next spring. And that's kind of the goal is to offer lifetime warranty on the product and labor on the garage side of it. And that's, we're going to stand on the garage door side of it. But the garage door market and the window door market is two different markets in our area. Garage doors is a very low margin window and door. It's, it's a very high margin but it's because of the value that they bring.

I think both of those you can always create an offer that's very high, very expensive and has a ton of value that is easy to downsell into your regular offer. Right. So for example, with the garage door, like yes, it's quote lower margin but I can make if all of a sudden they pay me 50% more because I showed the value of what a lifetime warranty looks like. And it's like, look, this is like maintenance, this is repairs. If anything happens, we're coming out here and we're going to fix it. That all of a sudden become a 50% margin business. If I'm able to sell the, the ongoing maintenance and the warranty into the, in the and in my own honestly to be like hey, maybe you don't sell at the higher price, maybe you sell at the regular price, but you sell a recurring package. So it's like hey, on an annual basis we come out, we change the, the we tighten this up, we change this, we look at the tracks we got do the guy you could create that list and basically now you have a recurring stream of revenue from that same customer and that recurring revenue is 40, 50, 60% profit margin. And so I think there definitely ways that either a you Inc. Make a grand slam offer that's super, super valuable. And we get. Some people are going to say yes. Like some people are going to say yes to a 50% more expensive door, window or garage door. If you say here's all the extra stuff I'm going to give you that no one else is going to give you. And just you saying hey, everyone in our market gives a one year warranty. We give lifetime or we give 10 years and that's this and that's why it costs more. And the reason because on average every five years you're going to need to do a repair. It's going to cost you a couple thousand dollars right now. This is going to allow you to be able to like forget about that. We come every year, make sure everything's on track. Everything's, you know, doing good, whatever. But I think the same thing is true with doors and windows. It's a matter of just getting creative with like, what are the problems that they hit around year three, five, 10, trying to solve those upfront and giving them a really, really good offer that it warrants a 50% price increase. Like I think tomorrow we raise prices by 15% and nothing but good things happen. But what is the 50% increase and what value would we have to provide for that? That's the real kicker.

Yeah, for sure. Yeah. No, that's, that's a good thought. And I, you know, and I think it just goes back to what we just did this spring, right? Because I mean like I was giving, like I was selling doors basically at cost just to keep my guys busy. And also I'm like, you know what? Heck looks, I'm tired. I'm tired of playing this game for free. We're gonna raise our prices, we're gonna, you know, change the value that we bring to them. And it just, at this point they can't compare us to the small guys. Right. All the customers that come to us right now, or most of them, they appreciate what we bring to the table.

So.

And I guess to a point, I think in one way, you know, like you mentioned selling, like when you sell garage doors, you sell them like a care package or something where we come in every year. I think one way is better to do that than to offer a lifetime because there's nobody maintaining the store. Right. If we come in every year or so in like in general, we're always dead slow. So if we have, we have the team out in January coming out to inspect everything, make sure everything's good, then we're in better shape and smaller, the smaller chance of something going wrong there.

Yeah. And the warranty, a lot of times people are just like used of lifetime warranties. Doesn't mean anything. But if you say, hey, we guarantee this is always going to work and to do that we come on every 6 or 12 month basis. Now there's real value you're offering, you know, that's a 10 minute visit to them. That's like a lot of value that you could raise price by 20 to 50% on them.

So to sell them at a premium price, would you charge them a fee to go or would you have that, all the, like the fees factored into, into the price so where the inspection is free and whenever they need parts replaced and stuff that would be extra.

So you could do it Two ways you could say, hey, look, here's the price, the door, and if you visit the package, I'm just gonna make up numbers. $10,000. That's our full package. Our gold package. Our gold package is we're going to come here every single year as long as you own this house. We will come here, we will inspect this thing, we will fix anything, lifetime, whatever. It's too expensive. Okay, great. We can, we have two other options. One, we can sell you the, the $5,000 package, which is we install this and that's it. We also have, by the way, the add on to the $5,000 packages. You can have us where every year we come back, it's 299 per visit and we come out and we do all of these things. And if you don't want to pay the 10,000, you can pay the 5,000 with this add on. So you have the premium offer, the downsell and then the add on. The add on being, hey, if you, if you want to be cheap about it, but you also want to be on this 200, 299amonth subscription or 299 per year subscription, we'll come back and do all of these things. Right. So like you could. And those numbers are just made up. You would figure out what the numbers are for your, your industry. But then it builds value in the big offer too. It's like, hey, do you really want us to be coming every single and doing inspection that does not include repairs? Then just buy this other big package includes repairs and the actual visits coming to your house.

Yeah. And. Yeah. I'm not sure if you answered. I'm not sure. Maybe I didn't catch it. But. So would that be just like the, the labor side of it or would it be the, the parts as well?

I would probably do it where it's like, hey, it's an inspection, like the annual inspection. And then your grand slam offers like everything gets fixed. That includes every. You will never have to pay anything else. Right. And so you also know that people move every five to seven years typically, so you're really only warranting it for that long. But I would tie in little stuff like what gets annoying about like say your garage door is like my batteries die or my kid plays with the little thing and it stops working the remote or someone pulls the lever and it gets off the tracks, like all the little things. And then I would tie it back to like warranties, for example, like within 24 hours, if this door doesn't open, we will be Here like those are the type of things that like in their brain make sense to you. It's like, well I got a grease and I gotta tighten the chain. They don't care. It's like, look, if you have a problem with this or if this does not. If this you click this button, it doesn't open. I'll be here within 24 hours. If you either buy this Grand Slam one or this the subscription, like so I think it just matter of like what's that value to them? And then realizing that let's only 10 or 15% of people go after the big package. Great. You now have something to downsell into which is your current pricing. Right?

Yeah, that makes sense. Just going to take some notes real quick, see what else are we here? And I guess in that. And that would also include, let's say, I mean if, if, if something goes haywire on the door, let's say the door goes off track and gets destroyed, the panels and everything, everything would have to get redone. Then that would all kind of be included in that in the grandson package there.

And you could just run, you could just run the math from like hey if this ever falls off the track and this all crumples up, that could be a $3,000 fix. Like that one thing just paid. Paid for most of what I'm giving you for the rest of your life. Right. So you just have to run some quick math for them.

So yeah, that's cool. Now in terms of incentivizing like setting up a pay structure for this, I haven't. So I. The company used to work for. We got paid piecework which was. It's a pay for performance right now in our company. I guess I've got, I've got one crew that's doing the garage installing garages right now and the windows and doors. How, how do we, how do we set them up to incentivize them? Like since there's different things and you know, we're not quite. I guess that would also break it up to more being more efficient too, right. If we like it some incentivizing the work and they'll find them to be efficient.

Do you already do piece work?

No, not right now. The company used to work for, they paid us. So I have an idea what it works but it's just we're not consistent enough and it just makes it a little hard.

Yeah, like the, the end goal is like trying to tie tie in this product equals this number of budgeted hours. Like you're basically doing already probably with pricing, it's like, hey, here's our product cost and then here's how many hours it takes to install. And then they get a percentage of the revenue ultimately. So I think like Lynn coming in, like organizing things will be the unlocked down the road being able to do something around piecework. And then what I would do because the technicians are, the have the ability to upsell is I would be tying incentives to. Okay, did they get the premium package? Did they get the add on? I would really, I'd just be incentivizing them. It's like, great. If I have an extra 50% margin, I'm definitely happy to give 20% of that away to the team. And then all of a sudden they have like huge bonuses that they can get if they're making these upsells for you.

Yeah, that's the next thing a team currently, they're, they're, they're, they're friendly, they're nice, but they're, they're not the people kind of person. They're not, they're not sales people. Right. Like the, the more the customers leave them alone, the happier they are. Right. So, so there's no. But it's like I said, we've got a solid team now. In the next hire that I'm going to do, it's going to be someone that's, that's able to do the upsells.

And stuff like that.

So that's a solid.

Now I hear a lot across a lot of different industries. They're all talking, you know, if you can do 20 to 30% net, that's gold. And like, you know, everybody's living a high life at that point. You know what's. At the end of the day, do you just see what the market bears or do you have like a certain target on what you, what you're happy with and just, you know, just, just kill it?

Well, it's a function of like, like what you said before, you're like, hey, it's 40%. We're making 40% net on this job, for example. Like there's nothing to say that you can't charge more just because you have 40% on job. Like Microsoft makes 95% margin on their stuff. They're not like asking for forgiveness. They are still raising prices. So like there's nothing wrong with making more money. And so I think the biggest thing is you could get there tomorrow just by raising your prices. Like, I genuinely believe you raise prices by 15% and you probably that 20% camp pretty quickly. So it's just a function of when you slow down growth and you're willing to take profits and actually maximize those by raising your prices to point where you stop growing. Like you're still going to grow like a big chunk this year. And so I, I believe that you raise price by 15%, you hardly see a dip in close ratio and your profits do get to around that 20% margin spot. It just like easily you could do 20% tomorrow. You just got to raise prices.

Yeah. Okay. All right.

If you can get to that 25% marker, that's usually where you now have enough margin to be able to hire a general manager or like someone else will take a lot of the stuff off your plate. And that becomes, then you become, you can make it more passive. Right. In terms of like, hey, now I got someone that's like actually incentivized on the bottom line. They're expensive. So maybe I only take 10% as distributions in the business, but. And it's running at 20, 25% net, but I'm giving a big chunk of that away to a general manager so they can run it while I'm gone.

Yeah. And that's, that's kind of the goal to do that in the long run, not in a near future. But yeah, I guess, yes, we'll see what the future holds. But I mean, I think overall, I think we've come a long ways in the last couple years, especially considering we redid everything last year. Year because we have like, I hear of companies closing almost every month. You know, like companies are the similar, similar industry than us. They're, they're closing their doors and right now it's actually, that's perfect timing for us to hire because a lot of companies laid off their A players and that's when we go in. Indeed. And we, you know, bring them in and stuff. So that's, that's been working out really well. Okay, well, that's, that's all the questions I have. I guess at the end of the day, you know, you've seen the website and is there any other recommendations, anything you have for me?

No, I think you're moving in the right direction since we last talked. Moving away from the dealers towards something that's much less price sensitive. And now we don't have the blurry lines of like their dealers and they're kind of like our partners slash or competitors. So. Big fan of the website. I would probably cut down a lot on amount of text on your homepage. And so if I look here.

There like I Would probably cut a lot of this text out. All I need to know is we do windows, doors, garage doors and on in Leamington, Ontario. That's like all I need to know. So I would really reduce this amount of text. Unless I see this up top here, which is your storefront, I don't know what your service area is. So I would really reduce the amount of text here. All we want them to do is click this button. So like, let's just like reduce the amount of text. All they need to know is doors, windows, garage doors in this area, service area, Click this link like that's it. This is great. This is really clean. But if they want to get all this text, they can get it down here. But at the very top there, I'm just trying to say, okay, these are the three things I do. Like this is it precision door. I don't want to use it. I just say doors, windows and garage doors serving. I'm guessing Leamington, Ontario. Like that's up here. The button then gets clicked more. So that'd be my only thing in terms of online. Because if you're driving traffic to this site from say Google, we already know they need a door, we already know they need a window. We just need them to click this button. And so the likelihood of clicking that button is much higher with the less text. I would also say. So like let's just walk this through. So for example, example, they get to your page, they kind of. Okay, all right, I'm in the right spot because I see this great, oh, quote, boom. Okay, great. Let's start with a. 1. Have a product of mine. 2. Fill out the form below 3 or okay, I think that is like a given. I get a quote and I get the job done. And also I gotta scroll all the way down here. I would love it to see, I would love to see that this text all goes away. I say it says elevate your door with, with doors, windows and garage doors serving linking to Ontario since 2015, whatever it is. And then off the right hand side here I have the form condensed down to one third of the screen that has all the information they need to put in. So they don't need to scroll, they don't need to click, they don't have to switch to a different URL. They just can submit their information right here. Because especially if you're driving from Google, they already have intent to buy. They already know what they want. They're just looking for a quote. And so if I can get it right here the likelihood you will double your leads versus them having to click, see all of this text, scroll, go down here and then now there's like, like an entire page worth of a form. Shrink this down by 80% and make it where it's a third of the page.

Okay, that's, that's fair.

And what we've also done is for every page, let's say for Windsor for an example, we have a separate landing page for Windsor with all the information and stuff on there.

Cool. So this is great because now, now when you're targeting that area, it'll, they'll get to the page and say serving Windsor, it's like, okay, this is for me, the only thing you need them to know what they click on a Google Ad is do they do my service and do they serve my area? That's all I need. And if I can't quickly check those box, there is a drop off happening.

Yeah. Now when you run Google, like Facebook ads and stuff, let's say with a promotion offering 20, 30% off Windows and doors, do you think that it's important to have that same promotion on your website? Or, or is it, or is it good enough if we just like run the ads on like Facebook and Instagram and you know, they just see it right there and they can just go and request a code from there.

It just depends on like what the offer is. I would, I would prefer that it crossed the whole system. Like your whole business has a certain offer this time of year. Any traffic that's coming through regards to their walking the door, Facebook. And no matter what they get in this offer, that's the easiest to track. And I don't think you're of size yet where it's like, okay, we are going to make an offer for Facebook or make an offer for Google. We're going to make an offer for people who walk in the door. Like, that's just going to get confusing. So I would probably just be like, make it much more time like, hey, for this weekend, the Memorial Day weekend or whatever, you know, Canada, boom. Like this is the offer. Okay.

All right. That's cool. Yeah, that's good.

So I think some of the takeaways I'd say like right off the rip is like, definitely some changes to the website could massively improve your conversion rate in terms of reducing, reducing the text, getting the form on the first page, making it very simple. Like, these are, these are what we install. This is the area we serve. And then another takeaway I think is raise your prices immediately. 15% easily. I would first, the only thing I would ask you to do is check with Lynn and get an actual close rate number and then track that over the next few months. So like, okay, our close ratio last month, our close ratio year to date, if it's 65, 70%, raise prices immediately, indiscriminately raise prices, you will not affect the business. And then if it's like 40% because we, we don't know, then maybe we pause the breaks a little bit because we don't want to cut that down to 20%. But I, if you're pretty confident, high 60s, I'd be raising, raising your prices.

And you never get concerned that by raising prices too much it wasn't going to go down the drain. I guess that's probably kind of. That's why it's nice to keep track of, of leads and stuff. Right. And just. Or I guess your closing ratio and know where it's at and adjust accordingly.

Yeah. I just don't see you in the commodity business anymore because you're not selling to dealers, you're selling to customers. And so the goal is to sell on value and not price. And so when 70 of people are accepting the bid, they're saying that value is, is far above price. And so by raising your prices 15, you might see a 5 to 10% drop in close rate. And if it dropped 20, which I don't think will because you're not a commodity business anymore, but if it did, you always just change it back. Yeah.

Well, that's cool. Okay. That's awesome. No, that's good. We'll definitely get this all implemented and we will see what happens and we will go from there.

You're the man. I'll be watching from afar. Take care.

Sounds good. All right, thank you.