After 6 years and 1,000+ conversations…this is what separates $3M from $10M businesses

This month marks our sixth year in business of helping home service businesses grow. And over the years I've talked to over a thousand home service businesses. So I put together this reflection video of like what helps 7 and 8 figure businesses stand out versus other ones that are 1 to 3 million and might stall out. So how do I know what a stalled business actually looks like? Well, before starting the business, I worked at one of these stalled out home service companies. It was a $2.7 million home service business who had been there for the past three years. They, they had no trajectory of growth or didn't even know what to do. And when I came and worked there in the first year, they went from 2.7 to $4 million and ultimately scaled and sold to private equity. And that's now what we do and help companies grow. So in this video there's going to be six specific things that we've found that these seven, eight figure top performing home service businesses do. But before that, I want to share four things to look for. And if you I think I'm stalled, I don't really know if I'm stalled. These are the four things that we see with stalled businesses. The first one is you've had the same revenue for the past three or four years and you don't really see how you're going to go to the next level. The second one is that you're stuck in your business, whether that's as the number one salesperson or you're stuck as the actual COO or firefighter every single day putting out fires and trying to do things. The third thing is if you find yourself operating on a gut feeling and you don't have the actual numbers, you're just running off of revenue numbers year over year without any real growth or levers to pull inside of the business. And the last one four is that you want to grow, but you have no clear steps and don't know how you're going to grow. Those are the four things that we see when companies are stalled out, that business owners stuck in one of these four spots or all of them. All right, so here are those six things that high performing seven eight figure businesses do to grow. The first one is they get the infrastructure for the outcome. What this means is that a lot of people want to grow, but they're working in their business, they're stuck as a salesperson and they don't have the actual team that's going to grow. So what does the team to grow look like and what do we look like when we're partnering with companies that are ready for growth and it's this one. They have a CSR or admin team. They could have one csr, but that CSR is not just someone that answers the phone. They might also do other things in the business and they also have an admin team. Second, they have a director of operations. Not just technicians out in the field. They have like a tech manager and an operations person. What this allows them to do is to not focus on all of the firefighting of what has to get done from the work. They can have someone in place to manage all the delivery. The third thing that they have is, is a great marketing company. And obviously this is where we step in. And with the home search business, I was at this. Where I stepped in as a team member is because from a marketing perspective you have to know your numbers. If you don't know your numbers, you can't grow. The fourth one is sales. Now a good infrastructure with this is if you're at like 3ish million dollars, you're kind of capping out as the number one salesperson and on the only salesperson. So you kind of got to get some more salespeople in there. If you're going to be 7 million to 10 million, there's no way that you can be doing all the sales. You may be the number one salesperson for large commercial stuff, but you have to have a sales team in there. So that's the fourth thing is building out a sales team. A lot of people get stuck here because it's just sales. And as a founder it's just so ingrained because you have the conviction that you don't actually know how to scale a sales team or build a sales pipeline or build a sales army inside of your business. And people get stuck here because there's very little training on this piece. And then the fifth thing is management. So what we recommend doing is a lot of the companies you work with run on eos Entrepreneur operating system. Basically you have a visionary and an integrator or a owner and a coo, which you as a business owner can be in those seats. But then you want a director of sales and marketing, you want a director of operations and a director of HR finance. Those three pieces are what a management org chart looks like. And you want to not be in any of those three seats. You want to be in the CEO visionary role. So you'll be working your way towards that. That's what a great infrastructure looks like. Now we had a company that we started partnering with they were doing around 1.5 or 2 million and the business owner was the number one salesperson. And we literally told, hey, you're going to run into this point where you got, you can't be the only salesperson. And what happened was we started working with him after three months. He went from 70 estimates last year to 140 estimates this year. So we were generating a bunch of leads and estimate opportunities. The problem is he still only closed the same amount. Last year he closed 30 this year he closed 30 because he was the only salesperson. And a lot of people want the outcome without building the infrastructure. And that's why I mentioned a lot of people get stuck in the sales seat. The second thing that we found from these top performing seven and eight figure home service businesses is that they know their numbers based off percentage. Knowing your numbers is the number one way I would say to grow your business. Because if you know your numbers, it's just a numbers game. So they know their operating expenses, they know their payroll, they know their marketing is 3 to 10% of their revenue. They know their tax contribution, they know their profit margin. Because you need a profitable price book to even run your business and actually scale. If you don't have the numbers to pull the levers, you're going to be stuck. So I just gave you the percentage numbers. But there's other numbers that you also need to know on a monthly basis, year over year. This is what we look at as a consultant, but we highly recommend if you feel stalled out in your business, you need to look at these numbers. One is marketing, return on ad spend. I just talked to a guy, he's spending $10,000 a month on Google Ads and he doesn't know if he's actually generating money for his business or not. It's just a gut feeling that he thinks that he's getting these leads from what they send him, but he doesn't know the actual end result. That is not how you're going to grow your business. You have to know that you pull this lever over here and this one's not working. So let's solve that problem. The second thing is leads year over year. If you want to grow your business, of course just get more leads. But how do you know what more leads means? Let's say that last July you did 70 leads and this July you need 100 leads to grow 30%. Well, there you go. Then you just track your leads. That's the starting point. The second thing is jobs. Just because you get a bunch of leads so that's why you need to track your jobs. The third thing is quotes. Again, you get leads, you go on jobs, but if you don't generate any estimates or additional estimates, you're not going to grow your business. The fourth thing you need to know your close rate. Now most people would know this one because if you're going to actually grow your business, you have to look at your close rate, aside from total revenue, because you gotta look at total revenue. The fifth one is gonna be new customers. And most people, again, don't look at this. The reason new customers are so important is because if you're spending money on marketing, if you're spending money on ads, and you don't know how many new customers you have coming in the door, how are you gonna know if you're actually growing your new customer base or just returning customers coming back in? And how are you gonna know what your customer acquisition cost is? This is why you have to track new customer growth month over month, year over year. The third thing that I learned about these seven and eight figure high performing businesses is, is that the owners are actually really, really nice people. They go all in on their team members and they go all in on the partners that they work with. I used to think that, okay, these high D personalities are just very direct and they don't have any emotion and they just operate like a machine. When what I found was that it's actually the complete opposite. They are very direct because they care so much. A lot of times people confuse this. They think, oh, I need to get harder and I need to get more rigid and I need to be more direct. Not a bad thing. But I also, they don't understand that the top performing people, they care so much about creating these. Win, win, win, win for the business, win for the team members, win for the customers. And if you focus on that, there's no way that you can't create this flywheel of winning, you know, sent my team like, hey, thanks so much for helping us. Here's you know, this box of gifts for you for Christmas or something. Like people that care a lot, those are usually people that attract winning. And it's not just, oh, they're dictators and they just run their business like this. They actually care. So what does this mean for your business? So like building a culture inside of your business. For example, if you want to cap your team's performance, cap their pay. So they are building incentives for their teams to help them grow and make more money. And one, it shows that you care. But then Two, you can help them grow and everyone wins at that. So this is not like a super tangible one aside from if you don't do one to ones with your team, if you don't have these big goals for them to track on a monthly basis, if you're not meeting with them, if you don't know about them and you're just frustrated with them, I would recommend taking a step back and really diving in all in on them and then setting up some of these things in place. Because I'm sure as a business owner you can get very frustrated, you know, me included, get frustrated with your team and frustrated with stalled out growth. The solution is let me have grace and go meet them where they're at and see if I can actually help them get better, make more money to help us all win. The forward thinking business owners, they are willing to try technology, they want to do it, but they get stuck in the stalled phase of being the CTO chief Technology Officer in their business, trying to jerry rig all these technologies together to run a business, when really they should just be focused on running the business and having team members or partners that are helping them with technology and automation inside of their business. I actually met with their $40 million business, this was a couple of weeks ago. And they have 28 different technologies that the owner is trying to put all this stuff together and do all this stuff. They have a tool over here that manages their leads, they have a tool over here that manages their estimates. They have this tool over here that follows up with emails and then this one that does text and it's like all over the place. And he was, he felt stalled. I mean this is a $40 million business, but he felt stalled out because he had all of these technologies that he built or put together that now he's trying to manage and unwind. And when something breaks business and a team member's like, hey, this isn't working, they go to him. So what we recommend doing from a technology perspective when it comes to automation is one, having your departments own the technologies so the business owner can have the idea of the tech and maybe even get it 0 to 3. But then have the person that's responsible for it take it from 3 to 10 and then work with the owner on it. So that way they own the technology piece and it's not on the owner to get it from 0 to 10 and then deploy it. It allows them to have both buy in, but ultimately the team member that you're giving it to or the position that you're giving it to can own that technology piece to the next level. The fifth thing that we found is that seven and eight figure high performing home service businesses are strategic thinkers. What I mean by that is that they truly see themselves as owning the business. We always hear this phrase, you know, don't work in the business, work on the business. And I would say even higher than that is that high performing businesses, they believe that they own the company and that then they're deploying team members and their resources to make things happen. And really they're not doing the work. They are the strategic thinkers. Above, even below, supporting them. They're deploying their capital and the resources to help them bring the mission to life and grow the business. A lot of times stalled growth comes here where the business owner's like, no, like I get that I need to be working on the business, but I gotta step in here and fix this thing. It can be very, very, very difficult because you wanna do it right for your customers. But if you think about it like a kid, right, the kid's gotta grow up and you gotta let them fail and let them figure it out. And that's kind of the strategic piece of it is I gotta think of this as if I'm an investor in this business. And what would an investor do? Something that's helped me a lot with this is thinking about, okay, who's like the best business person that I know. I was sitting across from them. Really. We're looking at everything in my business. They knew everything. What would that person tell me to do? That's a strategic thinking piece. Because usually they're going to say, do this. And you're like, I know I should do that. That's the piece that a lot of people miss. So I mentioned before having those three pillar people, a sales director, an ops director and a finance director, hr, whatever you want to call it. But having those people, the strategic thinker has those people in place and can work through them. They strategize and say, okay, let's do this. Okay, if you need something, deploy this. I went through this exercise before with EOS Entrepreneur Operating System. And this might be a really good exercise for you because I think it helps a lot of businesses. And this is a strategic piece. If you were to redesign your entire business, let's say that your friend came to you and said, hey, I want to start a whatever business that you have. H vac business, gutter cleaning, whatever. How should I build this out? Redesign the entire org chart? Okay, you definitely need this guy over here. You need a project manager, then you need this over here and this over there and build out this perfect org chart for them. Then take that org chart and implement it in your business. And this is exactly the perfect org chart for your business. Because a lot of times you as a business owner are going to get pigeonholed in different things and you're going to have, you're going to say, oh well, I got Sally over here and she's great, she could do this, but she's really good over here. You want the perfect org chart and then you want to work and put people into that org chart. Very, very helpful for strategic thinking. And usually if you do something like that and you feel stalled out with the people that you have on your team and who's going to do what, that will help solve that. Okay, and the last one is that these business owners get full funnel marketing. And what I mean by full funnel marketing is that a lot of businesses just focus on one part of the funnel and that is visibility and new customers. Most people, when they think of marketing, they think of just SEO ads, maybe a little social media. That's it. They don't think of anything else when it comes to marketing. And when I talk about full funnel, there's three parts to it. There's visibility, so getting new customers in the door. And there's four ways to do that. You can create content with like SEO or social content. You can run ads. There's a million places to run ads. It's not just Google LSAs and Google search ads. There's meta, there's Yelp, there's thumbtack, there's homeadvisors, Angie, there's nextdoor. All these platforms you should be tracking return on ads before. The third one is you can do good old fashioned prospecting, right? You can go through your database and find people and prospect those people. You can go out and door knock, you can go out and build relationships. And then the fourth one is getting referrals, which is B2B referrals, which you talk a lot about on this channel. But B2B referrals, most people miss this. That's just visibility. The second part of the funnel is conversions. Leads come in, they need to be marketed to still. If you call them and they don't answer, so what does that look like? What's the automation then when you send out an estimate, those estimates need to be marketed to as well because they need to be nurtured. So that way they turn to a sale. And then the third part to this whole equation is with email marketing, text marketing, it's called retargeting. All the prospects, leads, customers that have come through your funnel, that you paid for those people is a gold mine for your business. I just talked to a business a couple of days ago. They've been in business for six years, 2,000 people in their database. Never sent them an email newsletter, ever. Once we had an H VAC contractor that was in the same exact boat. We sent out 12 emails over one year and they generated $253,000 in revenue just from those emails. So when I talk about this full funnel marketing, businesses that are growing, that care about, you know, getting to seven, eight figures, that are high growth businesses, they are implementing this full funnel approach. They're focused on visibility, they're focused on their conversion funnel, and they're focused on retargeting, getting people back into the funnel. All right, so I'm curious to get your thoughts as far as these high growth 7 and 8 figure businesses. What other things do you think that they do different than other companies that are sold out? Do you think it might be they have bigger ad budgets? Do you think they have better salespeople? Do you think that they do a better job than other businesses? What do you think it is? I'm curious. Drop a comment below and I'll see you in the next video.