The 3 Systems You Need to Scale to a $5 Million Home Service Business

There are 3 systems to scale your home service business to $5 million in revenue. In this video, I'm going to show you what those systems are and how you can install them in your home service business in less than 90 days. Now, in case you don't know who I am, my name is Phil Risher. My company helps $1 million to $10 million home service businesses grow. And in the last 7 years, we've generated close to $47 million for home service business clients. I've also seen hundreds of home service businesses stall out around $1.5 to $2 million in revenue because they failed to build these 3 systems that I'm about to show you right now. There are really only 3 systems you need to scale to $5 million. So the first one is data. We talk about data. Good data makes good decisions, and a lot of businesses get stuck here because they have a CRM, but they don't know what numbers to pull. I'm going to walk you through the system. The reason that they get stuck here is usually you need like a CRO, Chief Revenue Officer, or a COO to go in and pull the data and build reports for you on a monthly basis. The second thing that you need is automations. Automations and data gives you infrastructure. Automations, think like lead nurture sequences, estimate nurture sequence, CRM, like lining up with your internal processes. All of these things need to work together. The problem is with automations, usually it gets stuck on the owner to try to figure this out, but this would typically be like a CMO, CTO, COO, again, doing all of these things inside of the business so that way it runs through infrastructure. And then the last system that we see is marketing. Usually at this point, they have some type of marketing that's happening. And when you have data and marketing, you have insight, so you know what to do. When you have marketing and automations, you have execution because things are firing on all cylinders and you want all these things to work together. The problem with marketing is that if you just have marketing alone without data or automations, you alone have chaos because you're just operating on gut feeling and you don't know what's working or what's not. And you feel like I'm just going to spend more money. But this is why you stall out and you don't get to $5 million because you don't have this interconnected web of systems. Usually your marketing is driven by an external agency or at $5 million to $10 million, you might have a CMO. All of these things are working together to get people to $5 million. The problem is, and this is the entire growth system, as you can see, the problem is, is that at $1 million to $2 million for a home service business, the owner has to be the COO. They have to be the CMO, the Chief Operating Officer, Chief Marketing Officer, Chief Technology Officer, Chief Revenue Officer. All these officers, aside with being the CEO and running the business and firefighting these jobs and being the number one salesperson over here and trying to do all this stuff. Plus building a team under them. So how do you do this? With these systems here, and I'm going to walk you through the systems and how to implement them in your business. All right. So the first one we talked about was data. So usually you would have an owner. The owner of this would be a CRO, COO, someone who's responsible for the data piece. And we look at data. There are specifically 3 data systems that you need inside of your business, and I'm going to give them to you now. The first one is year-over-year data. The way that I learned this was I was at a $2.7 million home service business. The first week I walked in, The owner, Tom, says, "Hey, we need to grow our business." And I say, "Cool, where's the dashboards?" And he's like, "We don't have those. What's that?" I was trained at Enterprise Rent-A-Car as an operator, and we drove everything through data. So year-over-year data, this is what it looks like for business, and I can link this up down below so that way you can have this as well. You just click File and make a copy. So essentially, the numbers that you want to track is leads, jobs, estimates sold, total sales, new customers. So when we look at leads year-over-year, we want to know in January, We had 50 leads this January, 160 leads. This will tell you, are your leads going up or down? Same thing with jobs run, same thing with estimates, same thing with sold, so same thing with total sales and new customers. You want all this data so that way you can make decisions off of the data, which I'm going to show you in a sec. So you need year-over-year data. Next, you need to do a monthly review of this data and make some decisions. For example, let's say you have 160 leads that came through. But you only ran 20 jobs. You got a decision to make. Either the leads are bad, go and follow up with the lead quality, or you have an intake problem. Your lead intake doesn't work. You don't have a call script, a lead nurture sequence, whatever it is. That's a decision. What is your booking rate? Next, let's say that you ran out and did 100 estimates, but you only sold 30 of them. That's a 30% close rate. We know you should be between 40% and 60%, so you're leaving money on the table here. Same thing with total sales. Your total sales are up or down. A lot of business owners just look at this number when these numbers will actually tell you what's wrong with your business, which is why you need a monthly review. I used to go to Chili's every single month with the office manager and the service manager and the owner, and we'd go through these numbers and I would tell them our leads are up, but our jobs are down. Our booking rate's down. Office manager, we need to work with the CSRs and we need to build out the lead nurture sequence. Estimates, sales team, we need to do this. This is what it takes. This is one of the biggest missing systems that we see in businesses. And this is why I started with data, because good data, good decisions. And when you have the data, you don't feel like you're operating on gut feeling anymore. You feel like I'm making smart decisions, which leads me to the last data system that you need, which is return on ad spend reporting. I can't stress this one enough. You probably feel this way. You spent money on marketing and you don't know if it works or not, and you just kill it after a couple of months and you feel like you got burned. I said it. There you go. Because I felt this exact same way. I was, I was director of business development and I was working with these marketing companies. They say spend more on ads and we even know if it was working. So good thing for you, we built this Google Sheet here. This is a Google Search Ads report, but you can use this for any platform. And essentially what you do is every single month you say, who were the leads that you got from this channel? And you put the email, phone number, all the information in here, and then you go into your CRM and you found what happened to them. So essentially you want to know that you spent $1,400, you got 16 leads, so your cost per lead is $87.50. You booked 7 of them, you converted 44% of them, you made $10,000 off of that, those 16 leads of the 7 that you booked, so a 7x return on ad spend, do more of that, okay? This is why I start with the data system, because if you know your year-over-year data like what I showed you, and you do a monthly review of it, and you look at your return on ad spend, this is a big pillar piece to growing your business. The problem is, is that a lot of business owners don't have a COO or an office manager that's competent to pull these numbers, and realistically, they would want their marketing company or their sales director of business development to pull this data and they feel stuck. So that is the data system that you need in your business. Data alone though can't do it all, right? You need to then layer in automations on top of it to build an infrastructure on the backend. And I'll explain the automation system that you need in a second. But usually you would need a CMO, CTO, COO, chief marketing officer, chief technology, chief operating officer to actually build out these automations inside of your business so that way you have the infrastructure in place. I'm going to give you the system that you need to build out. The first one is called CRO, conversion rate optimization. Huge opportunity here. Most people do not look at this, but again, if you want to get to $5 million, this is one of the big pieces that you need to look at. CRO, conversion rate optimization, is how many people go to your website and then how many people turn into a lead. The reason that this is an automation tool is because usually websites that we work with when we start working with them are operating at around 3% conversion rate. They get 100 people to the website, they convert 3 of them into a lead. RO is automations on your website that turns people from a website visitor into a lead. For example, let's say someone fills out this form. The automation would be fill out the form and get a text right away, go into your CRM, so have it dropped right into your CRM and have a text that asks them for pictures. So this is an automation tool on your website that converts leads. So like this website, for example, converts at 27%. They get 100 people to their website, They get 27 leads. This has nothing to do with spend more on ads or anything. It's literally the automation tools that you need to grow your business. And then you have data to tell you what to do. So CRO, conversion rate optimization, you need a chat widget, you need online scheduling, you might want to get an estimate calculator. All these tools are automation tools that when I talk to business owners, they want to build out, but they don't know how to build them out because they don't have a CTO or someone that knows technology to build out these automation tech stacks, which is why they feel stuck. All right, the next automation tool is call to actions into CRM. We see this all the time. This was at my home service business. A lead would come in and it would get trapped in an Outlook inbox or a call, and it would never make its way into the CRM. So when we look at this number, we actually didn't have a true leads number in our database. We didn't know the number of leads, which is why anytime a lead comes through our business, we needed to drop into our CRM so that way we remove the human error of getting it into the CRM. So that way we can truly track the number of leads that we want. And again, this is an automation. Web form, go into your CRM, make sure that it all works so that everyone's on the same page, and then it leads right into data. Notice how this is all infrastructure being built on the backend. Lead nurture. All right, can't stress this one enough. Time and time again, you're paying $200 for a lead and you get one shot at the lead. One shot. Someone fills out a form, you call them, they don't answer, and it's gone forever. Someone calls your business, you talk to them for 30 seconds, it's gone forever. This is why you need a lead nurture plan. Lead nurture plan is essentially this. Someone goes to your website and converts into a lead. They call you from Google Business Profile. They fill out a form on your website. They do something. You need to have an opportunity to follow up with them. So let's say someone fills out a form. You text them, you email them. They don't answer to your call. Then the next day you text them and email them again. And the third day and the fourth day. And usually we build these out for 14 days. That way, you paid money for this lead, you're giving it all the opportunity that it can to turn into a customer. Lead nurture sequences, I can't stress this enough. The other piece of this is having a call script, which this is going to be more internal process, but the automation tool is having a lead nurture system built out so that way, if you talk to someone one time, you put them into a text and automation, email automation, and now you have this lead nurture process in place. The next one is an estimate nurture sequence. An estimate nurture sequence is when someone sends out an estimate. And this is very, very important for like $1.5 to $2 million because usually the owner is still the number one salesperson in the business or they have some one good salesperson. But what they need is an estimate nurture sequence. So we had a company, they were $1.7 million HVAC contractor. They were closing at 47%. So not too bad. We went between 40 and 60%, but we added an estimate nurture sequence, which is, you know, you send out an estimate, Now you start an email and text drip sequence of adding value, asking, answering questions, asking if they're ready to move forward. And that company, their, their, their close rate jumped from 47% to 52%. So 5% increase. The beauty of this is that they were doing 100 estimates. So we, you know, you can see in their goal tracker, we can count how many estimates that they were doing back then versus now. And we can see the increase in how many estimates that they were doing. They were generating 100 estimates a month. They were closing at 47%. They went to 52%. So 5% more close rate. So 5 more estimates closed. Their average ticket was $3,000. So $15,000 a month in captured revenue. And notice we haven't even spent a dime on marketing. It's just good data, knowing what to do, and then automations. And I'm going to give you the cherry on top in a second, but I want to go through this one real quick. Retargeting campaigns. There needs to be automation in the business so that way when someone comes through your funnel, Or they leak out. Let's say they just ghost you after this, or they ghost you after this. They need to go into an automated email newsletter every single month to stay top of mind. We had another remodeling company we work with and they're like big jobs, right? So like they went through a 14-day nurture sequence for an estimate, ghosted them, friendly ghost, we call 'em Caspers. And then they were on our monthly newsletter every single month. 5 months later, we sent them an email about the process that we use on things. And they raised their hand right away, responded back and said, "Cool, can you send me over the estimate? I'm ready to go." It was $14,000. So this is why you need to have some automation on the backend for retargeting campaigns, not just for people that fall out of the bucket, but also cross-selling services. You might do HVAC repair, but you also do some plumbing, or you might do gutter cleaning, but you also do power washing or something like that. You need an opportunity to cross-sell services through an automation process. Data, automation's working together. I'll give you one pro tip on this. So with the data, remember how we talked about the booking rate? So if your booking rate is low, you got 160 leads and you booked 20 of them, the good booking rate is around 50-60%. ServiceTitan did a study that the average person is around 42%, the top performers around 62% of leads into actual jobs. So this example would be low, you know, 20, 10%. This would tell us that you either need to fix your lead quality problem and/or fix your lead nurture sequence. So data is going to help you go and fix the problem with your automation and your call script. Now, let's say that you generated 100 estimates, but you only sold 30 of them. We know that your close rate should be 40 to 60%. If it's at 30%, then you need to go and build an estimate nurture sequence. And this is where the data will tell you what to do from an automation perspective, and then you can track if that works or not. This is the second system, is automations. All right, and then the last one is scalable marketing. So when you layer in marketing on top of this, when you have marketing and data, you have insight, so you feel confident in what you're doing. When you have marketing and automations, you have execution. You're not just spending $100 one shot at it. You have execution to build automations to get the most juice out of the squeeze. Usually companies that are stalling out between $1 and $5 million is because they just have marketing and they're operating on chaos with these cookie-cutter agencies. They have an external agency and they, they really want to have a CMO who's running point on this. The problem is, is that it's not all working together. And this is the beautiful thing of having marketing, data, and automations all work together. Your marketing is driving insights from data. Your marketing is automation so that way you have good data inside of your CRM. It all works together. So what does scalable marketing look like? The first thing right now, the age that we're in, 2026, content for AI search. So there's a recent study that was put out from Neil Patel, and what he found was that this is the frequency of AI overviews by search query length. So in AI overviews, basically what that is, is someone goes to Google, they type something in, there's a little box that says AI overview. For 0 to 3-word phrases, 23% of the time you get an AI overview. So think HVAC repair in a specific city, that's going to be 3 words. Usually you're not going to get an AI overview for this, but if someone asks another question on top of it, So 3 to 5 word phrase. Imagine they say, how much does HVAC repair cost? That's going to be 3 to 5 words or even 6 words. So it's going to be a lot more likely to get an overview. And the reason that this is so important right now is because if you don't have a game plan to answer your customers' questions with content for AI search, you're going to be left in the dark. A lot of cookie-cutter agencies and even businesses that are between $1 and $5 million, they're relying on ChatGPT to write their content. And it's just regurgitated slop. What they need to be doing is taking their content, taking their call transcripts and turning them into content for their business because this is real questions that your customers are asking and now you're turning into content that's going to rank for these types of queries that your customers are asking online or on the phone. They're also asking them online. So that's the first part of the marketing piece. The second one, I stress on this a little bit about the return on ad spend, but ideally you don't want the data for the return on ad spend to fall on your COO. We had a $10 million plumbing company that we work with, and this is exactly what happened. It was literally the owner's job to go to the marketing company and give them these reports. The problem is, is that since the owner was the driving force of the data, they missed a huge opportunity. They were spending $2,500 on Google Local Service Ads, so they were spending $2,500 on this marketing channel and they were generating $12,000. So the marketing company said, cool, this is working. The owner said, cool, this is working. But what they didn't have was the insight between the two of them to say, we should do more than if it's working. So what we did when we started working with them, we said, let's double from $2,500 to $5,000. And that double didn't just go up 5x, it went up 8x. So they spent $5,000 and they made $40,000. So over the months of not working, of looking at this stuff cohesively in a system, they were essentially losing $28,000 every single month of revenue potential because they weren't doing the right stuff. They weren't having the data talk to the marketing. They had it in siloed components. This is why this is a whole system that works together. You need your data, your marketing, and your automations all to talk together so that it knows how to grow your business. This is how ad channels with ROAS works, return on ad spend. And then the last one is a scalable marketing referral system. Okay, can't stress this one enough. I was at a $3 million home service business, $2.7 million. We ended up going to $5 million and selling to private equity. About 1.5 to 2 million of that revenue was from a referral system. Every single person I talk to, when I say, how do you get most of your customers? They say, oh, just referrals, word of mouth. But no one has a system to get more referrals than word of mouth. Okay, so this is why this is one of the scalable systems that you need inside of your marketing bucket. Here's the system. If you do roofing, you find gutter cleaning companies to work with. If you do pressure washing, you find landscaping companies to work with, and you tell them, instead of giving my money to the Google gods, and praying for leads, I'm going to give you money for warm leads to come into my business and get referrals coming in. This is how you take referrals and word of mouth and actually turn it into a system. So you pull a list or find all the gutter cleaning companies and send them an email and say partnership in the subject line. Hey, I'm looking for a good gutter cleaning company to work with and wanted to see if you would be open to how a partnership would look. Let me know. Basically, you're building partnerships inside of your business so that you're not— worried about an algorithm change on Google or whatever. These are the systems that build up your marketing thing. Now, when all this works together, you have an effective growth system inside of your business. And this is exactly how I ended up building my company, was because I was at a $2.7 million home service business and I was the director of business development and I was working with a cookie-cutter agency. The owner had no data and he hired some recent college graduate to do the automations for him who had no idea about any of this stuff. And I had light experience with automations by, from my own experience of doing digital marketing. I had done marketing for about 4 years and I was built on as an operator at enterprise on data. So when I figured this out, our business grew to $4 million in 1 year, $300,000 to $900,000 in profit, and then $3 million and then $4 million and then the $5 million the next year. And we sold to private equity. The next business that I worked with was an HVAC contractor. They went from $3 million to $5 million to $8 million and then sold to private equity. And I see this time and time again with businesses. These systems grow home service businesses. Specifically, if you're below $5 million, this is what you got to do. If you would want the opportunity, we work with home service businesses. I'll put a link down below. You can schedule a time to talk. Hopefully this was helpful. Drop a comment. Let me know your thoughts on what system would make the most impact on your business, and I'll see you in the next video.