10x thinking formula to grow your home service business and prepare you to sell with Bill Gallagher

Welcome back to the show. I'm your host, Phil Risher. And on today's episode, we're diving in to how 10x thinking can scale your home service business and prepare you to sell. Joining us today is Bill Gallagher, scaling coach and host of the Scaling Up Business podcast. Bill, thanks for joining us.

Thanks for having me on.

Yeah, I cut out the flub in the beginning because I love the 10x thinking mindset and I'm very excited to dive in with you. Bill is a business Coach who helps CEOs and entrepreneurs scale without losing their minds. And after 40 plus years as entrepreneur and executive, leading four companies as CEO and helping grow two others from startup to over $550 million, he now coaches leaders and teams in 39 cities across 18 countries. He's a former DJ and radio executive. Bill hosts the Scaling up podcast. When he's not coaching, he's probably surfing, sailing, skiing, flying, or diving. Basically anything that moves. He and his wife Lori have lived in the Oakland Hills for 30 years and raised two kids. A son who's a leading AI scientist and a daughter who's a creative director in music and entertainment. He's also a proud grandpa. So, Bill, thanks for coming on today. Can you give us a little bit, I know we talked a little bit about there, but our audience is like one to $10 million home service businesses. So can you give us a little bit of tease on what you do?

You know the. So the biggest problem I deal with a lot, I have so many friends who like, have like $7 million companies, right? And, and to be honest, you could get your company in that five to $7 million range. And, and you could have a pretty good income, maybe better than you grew up with and that kind of thing. And it can be really tempting to get complacent there. And it's fine, like, maybe that's enough and you're good. I think a couple problems happen, though. One of them is if you keep trying to think about, well, how do I get to say 10 million? Then it's a hard road. And the other thing is if you think about, well, I'm comfortable here and I'm gonna accept 10% a year growth. And kind of like then you encounter a thing where the exit of the company that's not planned by you is forced on you someday. So I don't want my exit forced on me and I don't want to have such a hard time growing it. So growth. Well, look, we're either. There's a few phases. One is you're growing, right? We're growing, we're striving, we're working on things. The other is you're kind of coasting. Coasting though is really only downhill. And so you're just kind of cruising along. But maybe it's a slow growth pace, it's kind of easy. And then there's times where you're contracting, where you're threatened, where you're under duress or you're like actively headed over the cliff. Right. So there are different phases. They're none of them fun and they never get any easier. And in truth, like, life includes challenge. It's never going to get easier until you die. Yeah. And so embrace it. But here's the thing is, when you think about, and I've spent time in my own life as CEO or as a division head trying to grow a business where I was thinking about like, how do we double this thing? And I'll tell you, it's all incremental thinking and it's hard work. It's hard work. It's a slog. You make small gains. There's very few breakthroughs unless they're sort of accidental. They happen to you, you're in the right place at the right time. It's great if you're well set up for it. The other one is I'm not really thinking about it. I'm just enjoying this. Maybe I'm raising my family right now. That's one that I did for many years. And so I'm not really working on a big exit or anything like that. And I can't imagine it yet. And that one, like the exit could be forced on you. And I've worked with a lot of people like that who suddenly found themselves getting a little too old or like, like that. So I don't want to have it either, forcing me and I don't have a slog of it. So thinking about my exit and imagining it and planning it, not to run this company for the rest of my life, but to like, well, in this case, I am thinking kind of like, how do I run this company for the rest of my Life? Because I'm 61 now, right? I'm grandpa phased. But that's not most of you, your listeners, my audience. So if you're thinking about that, or maybe you are, you didn't plan for it. We want to think about the exit. And if we start to think 10x or more, 30x 100x, our thinking changes. So if I was thinking about like, I'm running a, let's say I'm running a $5 million business right now, a home services company. If you start thinking about not how do I get a little bit bigger in the city I'm in, but how do I become 50 million, how do I like that's a more interesting conversation. I'll give you an example. I worked with a restoration company in, right. That's a specialty contractor business. But there is recurring and referral revenue involved. And they will do regular kinds of, they respond to emergencies, fire, flood, you know, water damage, but they could also pick up mold and some things like that. So 3,4 million dollars. I've done a couple specialty contractors that started at 3,4 million. But because we're thinking about we want to own this state, we want to be number one in the region, then those companies, we quickly got to 50, 70 million range because we were thinking about how do we get to 100 million from 3 or 4 million. We weren't thinking about how do I get from 3 or 4 to 10. So we started thinking about, let's perfect our operation playbook. Let's perfect our brand. Let's attract a great team. We're playing a big game now. We could attract a great team because we're playing a big game. We're thinking big and we build a brand that's suitable for statewide. And then with our brand and our core team and some playbook's starting to get good, then we go buy companies. So we go on the buy up. We're not the company, the three, $4 million company that's getting bought in, we're buying up and in this case some fairly small ones. We're buying up one $2 million companies and we're doing bolt on and bolt on and boom, boom, boom, boom, boom. We add complimentary services, we add geographic footprint, we add key people. Suddenly we find ourselves north of 50 million, having started at 3 or 4, 3 to 5 million in just a couple of years. Right. We're thinking really differently about building a business that scales. And so I think, look, get your execution right, like read your books about your systems. But if you just think like big about that makes a massive difference.

Awesome. So if I'm hearing you right, it's like, you know, run a solid business, get profitable and take that profit, you know, million dollars, 500,000 million dollars and then go out and buy other companies and bolt them into a really good system, have and build it.

Now. You don't have to take that million dollar profit to buy the other business. We can use debt to do that. Look If I have a good system, good playbook and that kind of thing, I don't have to use my own money to buy the other business. I can use a combination of bank money. Like an SBA loan is a really great favorable thing if you have a smart way to spend it. Don't spend it on something that is speculative. Spend it on something we know works and then. But you could also use a bit of seller money. So I could get you, Phil, to sell me your business and I could have you car some of the note. We could agree on a bigger number. But now you're going to hold some of that debt yourself and I'm going to pay you out over time instead of all at once. Those are really good kinds of deals to do if I know what I'm doing. But I have to have built a playbook and I have to have something differentiated. So in the case of these specialty contractors and service companies that I've worked with, in each case we're like, what's missing in this category of whatever it was in this area? So this category in this area there's something missing. We're solving a problem like oh, all the companies here are kind of mom and pop. They're kind of rinky dink, they're not very professional. They do things in a kind of half assed way. They don't have very visible, memorable branding like so in some cases it's as simple as creating a great compelling logo, polishing up the customer experience. So it's not quite so mom and pop. So we still it's personal, but now it feels elevated. Right now we could start like buying all these little companies and, and professionalize them.

Yeah, right.

The second piece there is the differentiation. So big thinking, thinking to exit. Now let's differentiate. So what's missing with all the past services in your area with the restorations, what's missing with all the plumbers or with all the H vac companies? Or like pick your category and, and figure out what's missing and then be different in some way. There's something unique about you, right?

Yes. Alex Hormozi talks about this where the, you know, your $5 million business, $1 million profit, whatever, and you're worth 3 to 5x. But if you roll this up into a $20 million business, it's worth a heck of a lot more as a bigger company. And it's probably maybe easier to run because you actually have people that you can do this stuff instead of you trying to figure out all these things. Have you Experienced that.

Alex, there is talking about size and scale and there is definitely a factor like, you know, if it takes me a certain amount of energy to buy a company, then looking at bigger companies and doing fewer deals is a, is a more profitable way. So you'll see investors in private equity focusing on little bit bigger companies, but it doesn't have to be. So you could do at a much smaller thing and even with less net profit and not multiple of profit, but you could focus if you do something different and unique and solve a problem. I mentioned when we were getting ready about another company that was $4 million that we got a $21 million offer on. Right. So that was profitable, actually nearly 50% profit on that company. But that wasn't what. So 50% on making 2 million on 4 million is a fantastic business. That's not probably sustainable and scalable. However, that wasn't what got them $21 million offer. What got him $21 million offer was a specific capability, a differentiator that they had that the acquiring company needed. So the acquiring company is much bigger and has cash and things like that, but the acquiring company needed to solve a problem that the company they were doing could solve. That's what we call a strategic sale. And it's worth way more than a, than a revenue or profit based multiple.

Awesome. So when you think about how are you going to exit or even just like position yourself in the market, it's not just how can I get to 5, 5 million or $10 million? It's like how can I be the dominant force in this area and be the unique outlier that people actually need this thing because it could position you strategically to be acquired, but it's also going to help you stand out from everyone else in the marketplace as well. So it's a win win on both sides.

You said in the beginning in my intro, my son's a AI scientist for one of the bigger companies out there. Right. He, he works for Claude. Today he built another business called Midjourney. So having him as my tutor in this world has been phenomenal for me and our clients. But look, here's the deal. You could go right now and describe your business. Tell your favorite AI. I don't care whether it's Claude or CH or Gemini or whatever, just pick the one you're comfortable using. Tell the, just talk into your thing. Tell your AI, your favorite AI all about you and your business. Well, my business does this. Our customers are that like if you want a shorthand for all the things to talk about pull out the business model canvas and then describe all those parts of the business model canvas that you may not know what that is. You could even tell your AI. Hey, interview me to help me create my business model canvas. Acting as my business coach, walk me through, ask me questions until you can build me a business model canvas. This is all just foundational. So have it ask you and then you could start to go take this. So I said, let's figure out what's different and unique. So now I want to tell my AI business coach, I want to say, great, these are my competitors. I compete with this company, this company, this company in these different ways. Ask me some questions till you can help me figure out what's unique and different about me. So I'm really interested to figure out and it's not going to be perfect. The first cut. Now I want to get a quick AI conversation. I want to figure out my unique differentiators in my operations, in my brand promises. So my public and private behind the scenes, back of the house, front of the house. I want to know how I show up different in the marketplace and how I show up different in my operation. So AI could ask me some questions, start to figure out what might be different. It could look at our, the competitors websites and my own websites. I want my AI to help me do all that. Now I want to figure out the great customers that I have. Who are the customers that you really love? Look, I can think in each sort of market segment, my sub million dollar company clients, my million to $20 million company clients, and my $20 million plus or what is great about those people. And then I can go out to them and I can say, hey, what's different about us? What's different about Bill Gallagher scaling coach versus any other person that's called on you that you worked with in the past and they will tell me interesting things. Now I can take what AI's told me and I can take what they tell me, especially if you capture verbatim answers. So either they write it to you or they talk it through you and you record it. What you don't want to do is I don't want to ask you, Phil, what's great and unique about me and then you tell me, but I filter it with my brain and I remember and I focus on the words that I want to hear or I'm comfortable or not comfortable hearing. Rule that out. Capture a recording of it in some way and then give the transcript or the email reply to your AI friend and have your AI Business coach. Take the work that we did with the business model canvas and your differentiation inquiry, looking at websites and interviewing you. Now with the customer thing. And now let's figure out what are my unique brand promises and how do I differ from the competition and what's different about my operations from the others. Right. That's super powerful. I want to figure out, I want to have a big goal, I want to plan to exit, and I want to figure out and double down on the important and meaningful differentiators.

So when you consider 10x growth.

Yeah.

What you're saying, yeah, 100x, right. Like this is your differentiator. Yeah. This is where you fit in the market. Then you could still use that same exact canvas to say, okay, how would I 10x this business and what would you recommend in the market?

What would it look like? So in my last business before I became a full time coach, 13 years ago. Right. I've been coaching for 13 years now, working across all these countries around the the world. And by the way, it sounds really good in the bio, but in reality, I took over 80 flights last year. I spent 150 days on the road and I went to some beautiful places. I had a good time. And it does create kind of like an awesome sort of braggy thing, but it also can be exhausting. So I'm not sure I recommend that to everyone. But working around there does give you some perspective, right. And you start to see after a while that there are some universal kinds of things that we can draw. And so 10x or better kinds of thinking starts to shift. You thinking broadly about that, getting input from our customers, all of that is really helpful, right. To start to combine it and that business model canvas is just a broad way of thinking. But now, like we did with my last company, the jewelry business, we asked ourselves at one point when I had spent years doubling the company, I'm like, God, what list got to be, I don't want to just double this, I want 100x. So in my case, I was thinking about how do I 100x this thing? I wanted to be a $500 million company. And so I started working on that. And the question was, okay, how do I sell ten or a hundred times at the same trade show with the same team? How do I ship a hundred times with the same team out of this office? Not like, how do I add 100 times the people, but everything a hundred times except like the physical space. I wanted to get more or people. Right. So how do I do 10x or better? With this same team in this same office with these same products. That was pretty profound because we started thinking about, well, if instead of selling a piece of jewelry at a time, even in small assortments, to wholesale accounts, what if we sold assortments and made people buy into packages at levels and refill in packages and we cut out the time of that. I'm going to choose this, I'm going to choose that. Like, oh, it was exhausting. Now we just sold assortments. We said, listen, you need something, we'll rebalance later. That brought it out. We said, okay. Instead of picking and choosing, like, physically grabbing pieces, we would sell kits. And instead of doing that in the United States, I would do that at the factory overseas. And so they would send me finished kits and I would send assortments to people. Now, I was shipping much more than 10 times, and my sales were. So I might have an opening order in those days would be typical wholesale opening order for a new B2B account would be fifteen hundred dollars. Right. Very small amount. Now, my opening order was going to be at least 15,000. In reality, it was over 20. Right. So I went from opening orders that would run like 1500 to 3000 to $25,000 opening orders. Boom.

Yeah. And in home service businesses, what you're referring to is like building your average ticket. So not just for a $200 service job, but building a $3,000 service job plus repair and having a checklist that they can go through. So that way each technician is producing a certain amount of. And also knowing your numbers from a lead perspective, because it's all good to say I want to go 10x or 100x, but what do I actually need to bring in the top of the funnel in order to get that and build that ticket? And in your case, you didn't necessarily need more leads because you built this B2B partnership. You just needed to build a bigger average ticket. And I think a lot of people, they just automatically say, okay, I want 100x so I need to do 100x more jobs. And it's like, maybe, but maybe you don't need to do 100x more jobs. You just need to have something that's worth a lot more to sell to people.

So I told you, AI can make it a lot easier. Right? But if you just have conversations with AI, it'll fill you with a lot of nonsense and things you can't do, and it'll give you too many things to do and. And it may tell you some complete horseshit sometimes of like, right so here's what it looks like and here's some things. You don't have to work with us to do this. You could. I'm going to give you the secrets. So our small company cohort, they meet every week. My small companies meet every single week with me or one of the others on our team and I talk to them a couple times a month and we use AI in most of those sessions. We use it at least once a month in depth with the working sessions and we reference it throughout the other things. So we're using the AI stuff, but we're using peers and coaches. So get yourself some peers that you could. Now you can't, you don't want to have another pest company in your same city or whatever. You want to have complimentary or friendly kinds of peers. So we, we mix up different companies in our cohort. So find some people like that. You could be in ours, you could be in another one and that can give you. And then find also some wisdom. So Look, I'm a 61 year old coach who's had and grown companies to enormous size and coach thousands across the world. Get somebody who can give you some feedback and perspective on what it is so that you take your AI, you take your peers, you take your coach wisdom, put those things together and then, and then work on your business every week. Now we can go, we can build a differentiated brand, a great playbook, a 10x vision, a plan to sell, and we can go to work on that. My companies come in, they're like, oh, I'm running five, $7 million. We're like, how do we get you $100 million valuation inside of three years? That's a different game to play, right?

Definitely. And I think for a lot of people I read the book 10x is easier than 2x.

Yeah, it's the same idea. We're all talking about a lot of the same ideas.

And the reframe for me, for someone who's listening as well, is like it takes the firefighting and the day to day minutia away and allows you to really conceptually think about big picture. What would this actually look like? And ask the questions opposed to just firefighting every single day. And it was a big reframe for me and I think for you guys, like every single week and you're having these big picture conversations. It's probably very refreshing for the owners that are just like stuck in the mundane every single day.

Hey, what if I told you I gave you a choice? Look, I'd like you to Spend the next two, three years with like lots of struggles and barriers and like that, you know, and insurmountable obs and hardship. Right. You'd be like, ah, that doesn't sound so good, Bill. I'm not on board. Right. But what if I told you we're going to learn to and go climb Mount Everest?

Exactly.

You're like, so it's the same pitch. Right. President Kennedy stood in front of the United States and said we choose to go to the moon and do these things not because they are easy, but because they are hard and it's not a good invitation. Right. But he said we're going to do something that's never been done before by human beings and we're doing it. We're choosing this goal because it's hard. Human beings love of challenge. But it's got to be framed as something interesting and worthy of our time. People spend a lot of money to go climb Mount Everest and they go through. I mean, maybe you're a lifelong climber, in which case it's a really obvious thing, but people with no real background like that spend a lot of time and money and effort at considerable hardship and some of them die along the way.

Yeah, exactly.

We're all going to die someday of something. Right. So I'd rather it be doing something that I really love. I'd rather. And pretty much in my business work, we're not killing people, but not like going to Everest. But take on like, let's make your company $50 million, let's make your company $100 million and let's build something and then let's get the hell out of it. And then, and then you could take a couple of years off and start another one.

Exactly. Yeah. It's fun.

And take some chips off the table, as they say. Set up your retirement, do the next business from a place of passion and not unless survival.

Yeah, I like it. So when, when the scaling up foundation, like Vern Harnish Playbook, that kind of stuff, are you coaching people on that? And if it is, can you give us like 100%?

So the, the core of my work is scaling up. So Vern is my friend and mentor. I work with Vern all the time. I speak on stage with Vern, I co lead events with Vern. We collaborate on our biggest program with the most companies in it. We have a lot of companies sub million dollars in a program that we run through the EO organization. So anyway, that's who taught me where I learned the stuff from. Originally we applied to a couple of different businesses and that's the core, but it's not the only thing. So I also work with people on their leadership and their leadership style. We work with people on their a little bit on their life plan. As a business owner, like how does this fit in the puzzle for you and what's your vision for yourself? Which includes the exit. A lot of times it's a big driver of the companies is setting up a powerful exit. And then we'll use things like the CliftonStrengths tools from the Gallup organization. So we will use other. We'll use things from the Lencioni table group. So there's a lot of different tools that we will bring to bear. But the core of them, the biggest set is the scaling up framework.

Okay, could you give our listeners like a synopsis of scaling up or like what the framework is or maybe like for one to $10 million businesses, this is usually the thing that's going to unlock growth for you or something.

Yeah. So people, strategy, execution and cash. So in every case right from sub million to a billion dollars and I've done about 13 companies now past 100 million and I've done exits and I've done three companies with valuations past a billion and I've got a fourth client who's approaching that now also. So a big range. I've also helped over a thousand companies get to their first million in sales. So a big range of clients across a range. But the key thing is differentiation and focus. So the book is people, strategy, execution and cash. In reality, strategy comes first and focus and differentiation. So let's be different but let's be clear and not just all over the place. Let's have a few things that we're focused on. Where are we trying to go to? What matters to us? How do we operate? What do we promise the world? There's like five things that we can nail very early on, even sub million dollar range that will help us to get to each thing from to a million. It's a lot about that focus and so on. But then from 1 to 20 million. Now we're building our team out, we're building a leadership team. The overall team is getting bigger, we're getting more, but still we have to be focused. And if we're not, look, you can get pretty big and not do some of these things depending on the market space that you're in or whatever, it's just harder. So the more we pick that focus and differentiation early, then it's easier to attract People now we have to start to level up our style of leadership. And then all the flow like above 20 million is really refining the growth path and getting really good at people. So when we go like one of our bigger clients, last two years we've hired a thousand people each year. Right. That's a different set of problems. Now in that problem, we're still working on the leaders, the ultimate leaders, business founders leadership style. And then down the second and third level of leaders, their leadership style, the way they work with people, the way they inspire and engage people, all that has to keep leveling up. Yeah.

So it sounds like 1 to 10, 1 to 20. A lot of it is the people side and make sure that you focus.

Sub million is 100% about focus and differentiation. Very often in the stage of companies you've got the one to 20. That's part of our cohort group of clients. Those companies still, there's something there, but they can't say it. So in the beginning of working with any of those companies, we have to use a couple coaching sessions and some AI stuff to help them figure it out so they can actually say it consistently. Because you can't go building your leadership team if you don't know who the hell you are and what you do. So it may actually be there, but if you don't know how to say it yet, it isn't written down, it isn't posted on walls, it's written on your T shirts. It's not going to work that well. One of those companies. I was just visiting a state again where I helped this company go from about three and a half to 70, just under 75 million in a few years. I saw one of their trucks pull up across the street from my hotel and it like had on those brand promise. I remember the first day in the investor's offices where we worked on the core values, the brand promises the company.

Yeah, boom, so cool.

Now you know, 10 years later it's still there.

Yeah, I think all that stuff can be foo foo, but it's not until you nail that and you actually build towards it.

If it feels foo foo it's because you wrote some BS business language. But if it's like your heart and soul words on it. And I'll tell you, I had a guy staffing business that hired me some years ago. We're still friends this day. He grew and sold his business eventually and he's like, oh Bill, I like you and I like your scaling up and all that and I trust you. But I bought this Business to make money. I don't think we have a purpose. Like a why a purpose statement. It's just, it's like it makes money, it does provides a service. I'm like, what is that? What do you actually care about? What is the emotional center? It's like, I don't think this is for us. I said, well, just indulge me. So we go through the exercise, we ask some questions. I send people out in pairs to go take a walk and ponder this together and take some notes and then come back. So they do all that. We come back, we make sticky notes of their ideas, we put them on the wall, we start moving the sticky notes around. And the words that emerg that fall out of this process are we keep the world working.

No purpose to keep the whole world.

There was an audible gasp in the group in the room like that.

Yeah.

And they're like, oh, we keep the. That's beautiful. Now some people related to it as we provide the staff for companies so they keep working. And other people related to it as we give people jobs so they can support their family. It didn't really matter both ways. It was like, we're, we. We help people be productive and we create a productive world. Now they put that on the back of T shirts. They wore it on the back. They grew that company and sold it. Right. The heart of and the driver of action and decisions and daily behavior was captured in that moment, in less than an hour of working with us. Right. So beautiful.

Yeah. You know, I love it. I think a lot of people struggle with that. The hustler has to die. The leader has to be born. And. And that piece that you just mentioned, the leadership piece of like getting out of the day to day fire and like why are we actually here and doing this? That's kind of what you're referring to, is that unlock that you have to make good stuff. Cool, man. Where should people go to learn about you scaling coach? What should their next steps be?

Oh, scalingcoach.com is where they can go find all of our stuff. It's not listed there, but if you send. And you can send an email to billcalingcoach.com and ask to do my Q20 assessment, a brand new thing and I will give you a link to a questionnaire with 20 questions on it. You can just answer top of your head and I'll give you a really cool growth assessment of different ideas and things you should do to do that. This is a new developmental product. We've just done it with not a huge number of people right now. We have stuff about our cohort program. It's called Navigator. That's there. It's complementary to the work that you guys do, so people could check out that there. But you know, I've got 650 podcast episodes and this Q20 thing is probably the most useful thing. Anyway, send me a Note, Bill, at scalingcoach.com, ask about Q20 assessment. Or just go to the website, check it out. That thing is not linked there, so they're gonna have to remember that and send a link for that.

Yeah. Okay, cool. Well, I'm gonna get it. Cause I'm gonna email you because I'm curious to hear what it says about me.

We will process you through that and give it back to you. That thing is still kind of going through some iterations, so it's a little bit manual right now, but it's. I'm digging it. I'm super psyched about it. So the insights are pretty useful.

Awesome. Well, thanks, Bill. I appreciate you coming on, man, and doing good work. Have fun in Greece. I know we're talking before this, but it's going to be an awesome trip.

For you this summer. Last year I went to Mexico and I wrote a book. The book title is Busy is Broken and it's in editing right now. And hopefully it'll come out in the latter part of the year. And then this summer, I'm going to do continuing research around the core idea of what are the best indicators of strong leadership. How do you know if you're a good leader or a bad leader? And what do you do about it? I'll be doing PhD research this summer in Greece and getting in some great wing surfing time.

Yeah. Well, that's awesome. I did not know you wrote that book, so I'll need to check that out, too. Sounds very, very good. Very relative. For 1 to 20 million. Busy is tough.

Busy is broken. Look, we're all busy people and you're never going to stop being that. But if you keep trying to solve every problem with more busyness, you will have a heart attack. Yeah.

All right, cool. Thanks, Bill. Have a great rest of your day.

Thank you.