From Sales Freefall to $1.2m/Month

Summary

Podcast Summary: Acquiring Minds – Episode: "From Sales Freefall to $1.2m/Month"

Title: From Sales Freefall to $1.2m/Month
Host: Will Smith
Guest: Rick Adams, Owner of Rhino Shield of Florida
Release Date: July 10, 2025
Additional Resources:

• YouTube: Acquiring Minds
• Episode Summaries Signup: acquiringminds.co

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Introduction

In this compelling episode of Acquiring Minds, host Will Smith welcomes Rick Adams, the owner of Rhino Shield of Florida, to discuss his journey from facing a severe sales decline shortly after acquiring the business to transforming it into a thriving enterprise generating $1.2 million per month. Rick shares invaluable insights into acquisition entrepreneurship, focusing on sales process optimization and marketing funnel enhancement.

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Background and Acquisition Journey

[00:00] Will Smith:
"Today's guest was seeing sales at the business he just bought decline fast. He was within months of the precipice. In our conversation, Ryan Adams explains how."

[03:34] Rick Adams:
"Thanks, Will. Thanks for having me."

Rick's Journey:
Rick Adams transitioned from a decade-long military career, including eight deployments with the 75th Ranger Regiment, to business development roles in healthcare and energy before venturing into ownership. Inspired by his grandfather’s entrepreneurial spirit, Rick aspired to combine his operational expertise with business ownership.

Key Decision to Acquire:
Rick initially engaged in an informal search fund arrangement with investors but soon realized that pursuing a solo acquisition aligned better with his vision and capabilities. This led him to acquire his first Rhino Shield dealership in Jacksonville.

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Understanding the Rhino Shield Dealership Model

[03:48] Will Smith:
"Ryan, you bought a paint company, actually a dealership for a coatings brand. We'll get into exactly what that means, what that business model looks like."

Rick Explains the Dealership Model:
Unlike traditional franchises, Rhino Shield dealerships operate independently without centralized marketing or operational support. Dealers purchase products from Rhino Shield and are responsible for building their own marketing and sales infrastructure. This model offers significant upside as dealers are not bound by franchise royalties and can retain all profits generated from their sales efforts.

Notable Quote:
[24:37] Rick Adams:
"There's no centralized marketing program. You're going to buy your product from us and you figure out the rest."

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Initial Challenges Post-Acquisition

[16:12] Will Smith:
"So how profitable is the company? And... margins?"

Financial Overview:
At acquisition, the business was valued at approximately $3.8 million pre-COVID, with SDE (Seller’s Discretionary Earnings) margins in the high teens. However, post-acquisition, sales began to decline rapidly.

Key Moment of Realization:
Within seven months, Rick observed that sales were stagnating at around $1.1 million monthly, insufficient to sustain the business.

Notable Quote:
[12:08] Rick Adams:
"We had investment properties, things like that, some of that might have had to be liquidated or leveraged."

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Facing the Sales Downturn

Identifying the Problem:
Rick realized early on that while lead generation remained steady, the conversion rates were plummeting. Specifically, one salesman closed only 4 out of 25 leads, highlighting a critical sales execution issue.

[42:15] Ryan Adams:
"...you just have to spend more money, and then we'll sell more jobs. And I'm like, yeah, but I can't spend money when my benchmark... is going through the roof."

Financial Strain:
With dwindling sales, Rick faced a cash crunch, considering recapitalization to keep the business afloat.

Strategic Reflection:
Rick acknowledged that during due diligence, he overlooked the dependency on key sales personnel, leading to significant "key man risk."

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Turning Point with Expert Guidance

[50:26] Ryan Adams:
"...Danny is your lifesaver."

Introducing Danny Hoey:
Rick reached out to Danny Hoey, a seasoned sales expert from North Carolina, who became instrumental in revitalizing his sales strategy. Their extensive two-hour conversation laid the groundwork for substantial changes.

Implementation of Best Practices:
Rick adopted Danny’s structured sales processes, including standardized sales presentations and comprehensive lead disposition techniques, which significantly improved closing rates.

Notable Quote:
[55:47] Rick Adams:
"I couldn’t sleep the night I stayed at his house. I knew exactly what I needed to do when I got home."

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Revamping the Sales Process

Training and Accountability:
Rick revamped his sales presentations, ensuring sales reps used structured sales kits and adhered to standardized processes. He also instituted a robust feedback loop to monitor sales appointments' outcomes.

Incentive Structures:
Rick restructured incentives to align sales reps’ motivations with business goals, tying commissions directly to net sales rather than arbitrary metrics.

[62:19] Rick Adams:
"We’re paying them a percentage of net sale… they have ownership in that."

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Overcoming Operational Hurdles

[67:13] Ryan Adams:
"The best salesperson is not necessarily a good sales manager."

Staffing Solutions:
Recognizing that strong sales leaders are pivotal, Rick hired a seasoned Sales VP with 25 years of experience to manage and mentor his sales team, leading to a dramatic turnaround.

Notable Quote:
[70:37] Ryan Adams:
"...you can quote unquote, whether they're doing it or not, poach leads from their…"

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Scaling Through Territory Acquisition

Strategic Expansion:
Building on the stabilized sales, Rick pursued territory acquisitions, purchasing adjacent markets at favorable valuations. This strategy tripled his customer base with minimal investment.

[77:00] Rick Adams:
"...I purchased the Orlando and Tampa territories almost overnight, significantly expanding our market presence."

Territory Synergy:
The acquisition not only increased market share but also created synergies by overlapping leads, enhancing overall lead generation and conversion rates.

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Digital Marketing and Funnel Optimization

Hands-On Marketing Approach:
Initially, Rick took a hands-on approach to digital marketing, educating himself through extensive online resources. This enabled him to effectively manage and optimize marketing campaigns, ensuring alignment with sales funnels.

Challenges with Agencies:
Rick experienced difficulties with third-party marketing agencies that focused solely on cost-per-lead rather than the quality and conversion of leads, prompting him to develop an in-depth understanding of digital marketing himself.

Notable Quote:
[74:55] Rick Adams:
"Cost per appointment set is different from cost per lead because it ensures quality engagement."

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Lessons Learned and Recommendations

1. Deep Understanding of Sales Processes:

• Emphasize structured sales processes and standardized training.
• Implement robust feedback loops to monitor and improve sales performance.

2. Importance of Incentive Alignment:

• Align sales incentives with overall business goals to ensure team accountability and motivation.

3. Capital Allocation and Working Capital:

• Secure adequate working capital during acquisition to cushion against unforeseen downturns.
• Notable Quote:
  [47:26] Ryan Adams:
  "Working capital requirements… multiply whatever the number is you come up with by 5."

4. Strategic Territory Expansion:

• Leverage territory acquisitions to scale operations and enhance market presence efficiently.

5. Digital Marketing Mastery:

• Gain a comprehensive understanding of digital marketing to effectively manage and optimize lead generation funnels.
• Prioritize cost-per-appointment metrics over mere cost-per-lead to ensure quality lead engagement.

6. Leveraging Networks and Mentorship:

• Engage with experienced mentors and networks to navigate complex challenges and implement best practices.

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Vision for the Future

[88:26] Ryan Adams:
"So acute fixed here as a great business buyer fit for them."

Expanding Ambitions:
Rick envisions growing Rhino Shield of Florida into the largest exterior home coating company in the United States. Utilizing the Entrepreneurial Operating System (EOS) model, he aims to standardize processes and explore potential franchising opportunities to facilitate scalable growth.

Growth Milestones:

• Current Revenue: $1.2 million/month
• Target Revenue: $10 million by end of the calendar year
• New Territories: Expanding into West Palm and other strategic markets within the next six months.

Notable Quote:
[89:02] Rick Adams:
"...we want to be the largest exterior home coating company in the country."

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Conclusion

Rick Adams' journey exemplifies the resilience and strategic acumen required in acquisition entrepreneurship. From facing near-collapse to implementing structured sales processes and strategic expansions, Rick's story offers a blueprint for aspiring business owners in the home services sector. His emphasis on sales excellence, digital marketing proficiency, and strategic growth underscores the multifaceted approach necessary for sustainable business success.

Closing Quote:
[90:51] Rick Adams:
"...please connect with me, DM me. I'll help out where I can."

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Key Takeaways

• Structured Sales Processes: Implementing standardized sales techniques can significantly improve conversion rates.
• Incentive Alignment: Properly aligned incentives drive sales team performance and business profitability.
• Adequate Working Capital: Ensuring sufficient working capital is crucial to navigate post-acquisition challenges.
• Strategic Expansion: Smart territory acquisitions can exponentially grow customer bases with minimal investment.
• Digital Marketing Mastery: Understanding digital marketing intricacies is vital for effective lead generation and funnel optimization.
• Mentorship and Networks: Leveraging experienced mentors can provide critical guidance during business turnarounds.

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For more insights and detailed strategies on acquisition entrepreneurship, subscribe to the Acquiring Minds newsletter at acquiringminds.co.

Transcript

[Will Smith]

Today's guest was seeing sales at the business he just bought decline fast. He was within months of the precipice. In our conversation, Ryan Adams explains how.

[Ryan Adams]

He not only pulled back from that.

[Will Smith]

Precipice, but turned the business into a thriving machine. The business sells a premium paint brand, Rhino Shield, to homeowners. They also then do the painting. But as you'll hear, this is not a traditional painting company with tight margins delivering a commoditized service. The pricing, positioning and sales process are all different. What also feels different and surprising is that Ryan doesn't see it as a painting business. At its core, it's a marketing and sales organization. We spend a lot of time on how Ryan improved his sales process and and built an optimized marketing funnel. By doing so, he took revenue from a critical level of 1.1 million across seven months to 1.2 million per month. This point about being a marketing and sales org is key for a couple reasons. First, it might shift how you think about home service businesses. Whereas many people think of home services as all about managing crews and operations and that you should be drawn to that type of work to get into home services. Maybe instead ask yourself if you love digital marketing, if you're drawn to sales, and if so, home services could be a fit. Second point is about opportunity. As you know, the highest profile home services like H Vac and plumbing are competitive online. The digital marketing for those industries is already on point. But there are likely many other home service categories like Ryan's, where there's still not much digital marketing sophistication. And if you come in with a skill set to optimize a funnel and sales scripts, I'd guess you could grab market share fast. CF home services from that angle entices you. Here is Ryan Adams, owner of Rhino Shield of Florida Foreign welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs, and on this podcast I talk to the people who do it. The team at Aspen HR recently published a short white paper targeted at searchers Entitled A New CEO's Guide to Human Resources. It lays out the key items you should be thinking about as you transition.

[Ryan Adams]

Into CEO and owner of the business you bought. The link to download it is in the show notes.

[Will Smith]

Aspen is a professional employer organization or peo, run by a searcher for searchers. Search fund veteran Mark Sinatra runs the company, which provides HR compliance, flawless payroll, Fortune 500 caliber benefits and HR due diligence support for your acquisition, all for.

[Ryan Adams]

A Fraction of the cost.

[Will Smith]

Go to aspenhr.com or contact Mark directly.

[Ryan Adams]

At Mark aspen hr.com Ryan Adams, welcome to Acquiring Minds.

[Rick]

Thanks, Will. Thanks for having me.

[Ryan Adams]

Ryan, you bought a paint company, actually a dealership for a coatings brand. We'll get into exactly what that means, what that business model looks like, but.

[Will Smith]

Things went south early. You did 1.1 million in sales in.

[Ryan Adams]

The first seven months of your ownership. Not a lot, not enough.

[Will Smith]

For the last two months, you've done 1.2 million in sales in each month.

[Ryan Adams]

So you've turned things around. We're going to learn how.

[Will Smith]

Start us off.

[Ryan Adams]

Ryan, with a little background, please.

[Will Smith]

What's your backstory and how did buying.

[Ryan Adams]

A business come across your radar?

[Rick]

Yeah, absolutely. So, you know, I was in the military straight out of college. So that's like my, you know, main seven, ten years after I, you know, left college is what I did for a profession. I left the army, landed here in, in Jacksonville after, you know, my first couple jobs, and then was getting the itch to start my own business and, you know, bumped into a couple investors, another buddy, we kind of started doing a search fund kind of like thing that it was really like, informal and it, the search fund, like, wasn't on my radar at the time. And it started to become that over that six months. And then once, you know, we weren't finding deals that were interesting to the investors, but they were really interesting to me and I decided to go out on my own and, and found a deal that worked for me with my own balance sheet.

[Ryan Adams]

So, and so say just a little bit More about your 10 years in the military, why you left, and then also why buy business rather than start one from scratch? So first, first a little bit more on your background because you were at Anduril, which of course is one of the highest profile names in defense tech. So that's an interesting background. Give us a little more.

[Rick]

Okay. Yeah. So when I was in the military, I was an infantry officer and, you know, spent a lot of time in the regular army and most of my career in special operations with the 75th Ranger Regiment. I was a platoon leader and company commander with them. Did eight deployments, one to Iraq, seven to Afghanistan. So that accounted for approximately, I don't know, 40, 48 months overseas, something like that. Wow. And, you know, by the end of that 10 year career, I was, you know, looking to the next thing in my military career and I just, I was burnt out. You know, there was, there was a lot of combat time in there, a lot of stress on the family. I had two kids at the time, I now have four. And I was wanting to grow my family and I just, I was burnt out. Is, is really the, the main reason for, for getting out.

[Ryan Adams]

Thank you for that. So you were burnt out? Burnt to a crisp, I remember you saying in the pre call. So you, you pivot out. What's your first step before you truly get out of, of defense land altogether?

[Rick]

So I had, I had always kind of envisioned owning my own business. I didn't know how that would realize itself. My grandfather is a serial entrepreneur. He, he, you know, came, came over when he was 13 from Italy or 16 from Italy with his parents and, and by like 18 he had bought a small like gas station in northeast Pennsylvania, turned that into a car dealership. Like just started like going to auctions, buying cars, putting it on the gas lot, like, oh, I can use this extra space to like sell cars at the same time. And then grew like a big car dealership. They like very big for, for his area and bought real estate and did all this other stuff. No high school diploma, you know, no ged and just, just made it work. And he's a great guy and I look up to him for, for doing that. So I, I, I looked at myself as like having come from Notre Dame, you know, this special operations background. I've been given all these gifts and tools, you know, because of, you know, the work that he did early on in his life. And I'm like, if he could do that, I, I certainly am am kind of wasting some of this, you know, business school at Notre Dame, you know, operations understanding and, and getting after it and special operate. I can combine that into business ownership. Didn't know how that would manifest itself, but I did healthcare operations when I got out, and then I did project and program management for an energy company after that. And then I went into business development and sales at Anduril. So I kind of like, other than marketing, I kind of did like everything you could do like in, you know, in the corporate. I didn't do hr. Right. There's other, other, you know, other niche things, finance, but like some of the core business functions, I started to feel what that would look like. And by the time I was done with Andrew, I'm like, towards the end I was like, I just really, I think I have the tools to go do this. I also really missed the ownership that I had in my Ranger company or in my Ranger platoon and like owning that mission and having the agency to go out and execute, give Us just.

[Ryan Adams]

A little bit more on that kind of quasi search fund arrangement you had with investors and how that led to you ultimately buying a business solo.

[Rick]

Yeah. So a friend of mine from the Rangers, he was actually my company commander when I was in 1st Ranger Battalion. And you know, he was connected with an investor, a high net worth guy who was a partner with another high net worth guy. And they were like, hey, maybe you guys can find something. We acquire it and you guys go own and operate it. So it was like the reverse eta. Like, we weren't looking for eta, but they're like, hey, you should consider this model and let's go try this. So for about six, seven, eight months, we were kind of looking at deal flow for them. One night I was sitting here in Jacksonville, having looked at a couple good deals, and I was just like, you know, I really want to go just do something like now. I was so invested in these businesses we were looking at. I could see the scale and the growth that me or anybody else could, like, apply to it. And I started getting really invested in, like, I know how I would go execute this. I just got to figure out how to like, get this thing acquired.

[Will Smith]

Looking for an SBA loan to buy a business. Then meet Pioneer Capital Advisory, your team for getting an SBA 7A loan quickly and at great terms. The team at Pioneer has closed 81 SBA loans in just the last two and a half years, with an average close time well under the industry standard. Founder Matthias Smith and general manager Valerie stash both have 10 years of SBA experience and. And know the process cold. There are three analysts at Pioneer who build you a lending presentation that speaks the language of the bank's underwriters and gets them to. Yes, two account managers to guide you from underwriting to close as fast and smoothly as possible. And two sales associates ready to walk you through the Pioneer Capital advisory process. That's nine people at Pioneer. A real team.

[Ryan Adams]

To get you where you're trying to go.

[Will Smith]

New owner of a business. Go to pioneer capital advisory.com or click the link in the notes.

[Ryan Adams]

Okay, Ryan, great. So you decide that maybe this dynamic, informal though it was with these investors, wasn't going, wasn't really working out, wasn't coming to fruition. So, so then what, what's your next step?

[Rick]

Yeah, so the next step was like, kind of that day I had that realization where I'm like, I just, I, I want to try to go at this myself. I, I pulled together my personal balance sheet. This was like, in the evening, it Was like, in one afternoon. I was just frustrated. I'm like, all right, I'm just gonna pull together my personal. This, like, December 2022, pull together my personal balance sheet. I look at it, I go, okay, I. I've set my deal parameters, right? Like, I set my left and right for my deal parameters. I was like, all right, what funding source? I'd always heard about sba. So I kind of look. Dove into that, that afternoon, that evening, and I'm like, okay, here's the parameters for the sba. Like, did a deep dive, couple hours, like, understanding that, okay, here's my. Here's my parameter. Like, I can do this. I can basically do a full SBA, assuming that I have to put the 10% down for the, you know, five and a half million and. Or maybe there's going to be an opportunity to do some seller financing.

[Ryan Adams]

You said you thought you could do a full. Take advantage of the full 5 million from the SBA. Does that mean that you had enough balance sheet to do half a million bucks of equity?

[Rick]

Yeah, yeah, exactly. Yeah.

[Ryan Adams]

Okay. Okay, great.

[Rick]

We had investment properties, things like that, some of that might have had to be liquidated or leveraged. Like, I hadn't thought through that fully that evening, but I was like, I. I can figure this out, you know, based on. And I'll get to that point, you know, when I. When I get there. I also had Andrell with potential, you know, liquidation event coming up that. That spring as well.

[Ryan Adams]

So you. You look at the sba, you have the, you know, you. You. You figure out what you can afford, what your buying power is, right?

[Rick]

Yeah. So. So that night, same. Same night, so same afternoon, evening, I'm doing this math. I. I text the business broker that I had been working with on, you know, looking at other deals here in. In Jacksonville, and I was like, hey, here's my parameters. Here's what I think I could do on my own. And if I find something that works, right, like, I'll. I'll go out and do this, do it on my own. And he goes, great, I'll let you know. I think I have something. And, like, the next morning, he sent me rhinoshield coatings company, is what it said on the sim. You know, it didn't because, you know, selling your brand, your local brand there, you've owned it for 25 years, don't want your employees knowing about it. So it didn't say Rhino Shield. It wasn't super explicit what was happening inside of it. You know, did the. Got the NDA out there got it in. It's still, still didn't say rhinoshield under the NDA, but the, the numbers looked right and I was like, hey, I would love, I would love to meet with the owner. That was kind of my next step. I was like, I just want to meet with this guy and see what this is all about.

[Ryan Adams]

And what was it all about? So what is, what is a coatings business? Give us some bullet points around, around size, numbers, history, et cetera.

[Rick]

Yeah. So Rhino Shield here in Jacksonville is, is one of the oldest rhinoshield dealers in the, in the network there's a network of like 40 to 50 other dealers. And this one had been around for 22 years at the time. This is the end of 2022, beginning of 2023 is when I was getting into this deal. So yeah, the coatings company, it's a painting company. Like so just for people on the podcast, like we do do painting. We use a ceramic acrylic elastomeric coating that goes on someone's house. It's got a 25 year warranty. It's kind of meant for stucco and hardie board and cement and applications. It can go on other things as well. So it, it is a paint. We like to say it's not paint because paint doesn't come with warranty. Paint doesn't protect, paint doesn't reflect UV rays. Ours does. So we like kind of say it's not paint. But we're a painting company. It's just a really high end product with a, with great longevity and has a bunch of other value propositions compared to like just a Sherwin Williams, you know, one gallon bucket, you know, at Alpha Home Depot.

[Ryan Adams]

So, and so any I can get any color, then I can mix any color.

[Rick]

We do that in house just like our own mixing and tinting. You know, when Sherwin Williams mixes your color or Home Depot, we have those same machines at our, at our facility and we, we tint our stuff to spec and we can match.

[Ryan Adams]

So a premium paint product that has all this, all these protective characters.

[Rick]

Correct, Correct.

[Ryan Adams]

Okay.

[Rick]

So you'd ask about financials. Yeah, you know, I, I meant to look these up before the, I kind of know them off the top of my head, but essentially from 2000 or from 19, 20, 21, you know, it was like 3.8, 5.4 and then like 4.8 kind of in that order or 4.5 of total top line revenue. Right. And you're going through Covid. Remember like people haven't forgotten about COVID I'm sure on this podcast, like, so that was like the big Covid bump, you know, for the home service industry. This business was no different. So I'm aware of that. And so the 2022 numbers were missing from that because the year hadn't closed out yet. I don't even. I think it had, like, the first two months of 2022 or something, because the listing had been out there for a while, and it was listed at $5 million, by the way. We hadn't talked about that yet, so.

[Ryan Adams]

And Ryan, so that. That first of the three numbers that you just gave us, what was it? 3, 8. That was a 2019 number. So that was kind of pre. Covid.

[Rick]

Yeah.

[Ryan Adams]

Where the business, you know, if we. If we try to.

[Rick]

Yeah.

[Ryan Adams]

You know, carve out with a Covid effect, it's a $3.8 million business.

[Rick]

Yeah.

[Ryan Adams]

Is that. Is that one way to think about it?

[Rick]

Essentially, yeah. Essentially. That's kind of how I would look at it, you know, S. Yeah. And so I don't remember what the sd, the SDE values were. The seller discretionary earnings were on those numbers. I remember where it landed after the 2022 numbers came in. So forgive me for not knowing that off the top of my head, but when I guess I can get into, like, the initial discussion with Rick, which would be interesting. Who is the old owner? You know, definitely. But.

[Ryan Adams]

But can you give us how profitable is the company? And. And so roughly, margins. You said you don't have ste. I don't recall SD.

[Rick]

I don't recall it for the. For those first three years. I recall it in aggregate. Once we added 22, in which it dropped significantly, it basically went from like, I mean, basically 18 to 20% SDE margins to a bit less than that. So people can do the math, I guess. Yeah.

[Ryan Adams]

So it's a high teens net margin business.

[Rick]

Yeah.

[Ryan Adams]

Not including your own salary.

[Rick]

Yeah.

[Ryan Adams]

Okay, great. Super. Yeah. So tell it. So. So you meet the owner.

[Rick]

What.

[Ryan Adams]

What does that conversation look like?

[Rick]

Yeah. So, you know, met Rick. Great guy. Still talk to him, still text him all the time. You know, him and his son had started a garage floor coating business that was becoming like the next hot thing or these, you know, epoxy polyaspartic floors, you know, with the flake and everything on your garage floor. So they had started building this business and brand together as 50, 50 partners. And I think Rick was just looking to get out of the Rhinoshield business because, you know, Rick. I think Rick, 65 or he was 65 at the time, like early mid-60s, and was just kind of wanting to help his son with that business, but not wanting to like run a full other business full time separately from that and just focus on the garage floors and take his exit. So he was kind of just ready to be done and wanted to go focus over there, maybe play a little more golf. So he, when we met, it just, we just kind of hit it off. He's just a really good guy. He's a salesperson by trade, so he's just really, you know, easy to talk to. Um, he really liked my background, you know, that I wanted to make this a family owned business. And he, he just probably thought, you know, and he told me that, that I would be a great fit to take over this, his baby, right, that he's owned for 22 years. So I, I think that's critical. A critical point for people is like, you got to go meet the owner as soon as possible. Just going back and forth, you know, on price and Lois and all this stuff. Like, I think it's critical to est, if they're open to it, establishing that relationship early on. And I think that was critical to my success in being able to acquire the business early on.

[Ryan Adams]

Ryan, the. Was it not a bit of a flag that he has two businesses and presumably if an owner wants to focus on one, they want to focus on the more desirable of the two. So you are getting the lesser of the two businesses. Is that not one framing that somebody could have here?

[Rick]

Yeah, absolutely. You know, and I, and I thought about that like, hey, am I, you know, am I, am I getting into the, the wrong business here? But you know, I weighed his state in life. There were some other personal things going on in his life that I won't share, you know, here, you know, different health, things with family and stuff like that. That, you know, when I. And that's what I wouldn't have got having met him, right. So if I didn't meet him and so piecing all that together, it made a lot more sense why he was wanting to divest that and grow that other business with his son. So that whole story, that whole thing, and Rick was a very genuine guy on it. I think he's a high integrity guy. I took him at his word and I think it is true. And obviously I was able to do with the business what I was able to do with it. So it kind of all worked out. But it was a thought. But all the other pieces at play there, it made sense why he was leaving the business.

[Ryan Adams]

So I said at the top, the kind of the business model of being a dealer. What does that mean? So let's get into that a little bit. In contrast it as you, as you explain this to us with franchising.

[Rick]

Yeah, yeah. When you and I first talked about this, it was interesting conversation, right? Like, so I didn't realize this at the time. The difference, right, between a dealership and a franchise. So the difference really comes down to the platform that you have as a, as a franchisee from your franchisor. So franchise or comes in and says, hey Ryan, I want you to, to open up a, I don't know, chick fil, a McDonald's, right? And it's like we have the entire blueprint. We're doing all the marketing for you. We have the whole HR background for you. Insurance, all that stuff. You just need to go out there and kind of like own and operate it. Right. But we're going to charge you a royalty because our platform, we built it, it cost us something. So you're going to pay a premium to buy into our thing. You're going to pay a royalty on all the things we, that we're doing for you. And but you're going to get some of the upside with it. Right? So with the dealer model, in contrast is a lot of these dealerships don't have a platform at all. These are independently owned businesses. Rhinoshield was no different. Rhinoshield Jacksonville was no different. There is no centralized marketing program. There is no centralized call center. There's no centralized QA QC program. There's no like centralized CRM and automations and all these other like things that are going on in the background. You have to build all of that. You're just going to buy your product from us and you figure out the rest. So the biggest difference is one, that the second one, you can have a lot of upside because you're building the whole thing. You're not paying a royalty. You're just paying for product and that's it. And you can grow that business and take basically all the upside franchise. You're, you're sharing some, a lot of the upside with, with the. So you're a little bit capped in that way.

[Ryan Adams]

And so what are you getting? You're getting the exclusivity. You're getting a territory nobody else in the Jacksonville territory of Rhino Shield can sell. Rhino Shield, Correct?

[Rick]

Correct. So the manufacturer owns the IP for the product. They manufacture it, supply it. And I have the exclusive right to market and sell that product in my Territory which is loosely defined by like DMAs designated marketing areas. So Jackson, Greater Jacksonville, Gainesville area, Orlando, Tampa. Yeah, yeah.

[Ryan Adams]

And now. So your point about the. Contrasting this with a franchise system where the franchisor is giving you all of this infrastructure business in a box quote unquote, is something that we'll often hear franchises described as. But one of the big things you are also getting, at least in the, in the highest profile franchise systems, is the national branding, the golden arches. Of course, the canonical example, you know, you just open a McDonald's and the people will come is, are you getting that here? Are you, are you relying on Rhino Shield to like to do the marketing of the brand? Because otherwise, otherwise why sell Rhino Shield and not every other product as well? Why not just be a reseller of Rhino Shield plus Sherman Sherwin Williams plus plus. Plus.

[Rick]

Yeah, that's a good question. So no, the short answer is no, there's, there's no real brand, you know, marketing being spent on brand. Now they've spent money on, you know, the, the fonts and the brand guidelines and the icons and the logos and all that stuff. Like. Yes, so there is like a brand guideline. But yeah, each Rhino Shield dealer is responsible for doing their own brand building within their market area. So they, they don't really have that centralized marketing effort. They're trying to capture a lot of the lessons learned from dealers and sharing those with the dealer network to try to lift everybody up. But there's no like dedicated, you know, million dollar a year marketing, you know, national campaign marketing spend to do TV and all the, and billboards and all that stuff like that. That doesn't exist.

[Ryan Adams]

And so why would you not. So I assume you are bound to sell just Rhino Shield. You can't shell, can you?

[Rick]

It wouldn't benefit me to, to do that. Like I, I could sell Rhino Shield and my painting company. Like I could be a painting company, right? And like I have this Rhino Shield vertical within my company and then like interior, other exterior products. Like I could do that in theory. If you want to ask why, why I currently don't. I can answer, I can answer that.

[Ryan Adams]

But yeah, so, so why is this, why is kind of being a dealer model where you're just selling Rhino Shield superior to just being a painting company and offering your customers a portfolio of options, one of which would be Rhino Shield.

[Rick]

Yeah. So one, it comes down to focus, being really focused on marketing and selling one thing because as a home improvement home services company, if you are not treating it like a marketing and sales Organization. That's what we are. We're not a painting company. We are a marketing and sales company. That's what we do. We, we don't, we don't paint homes. We market and we sell rhinoshield now we do paint homes and we get a lot of five star reviews and we have really good delivery on, on everything we say in the sales process. But we treat our company like a marketing and sales organization because that's what we are and that's how you scale. I'm sure people have read the, you know, $100 million leads or $100 million offers from Alex or Mosey. So when you talk about high ticket, premium positioning, right, Scarcity, all those things, Rhino Shield, where it's priced and where it's positioned in its value on the market really aligns with, with that methodology in which I really fully believe in. And so trying to compete on price with all the other painters is not where I want to be. My margins and my ability to sell product at our high ticket level with complete differentiation from everything else in the market is what's allowed us to grow and scale as quickly as we have. And so that would be a distraction selling the regular latex paint. It would also be against everything we say in the sales process for rhinoshield. We essentially kill paint in terms of its quality and its, and it's cheapness right in our sales process. And then we're like, well, but we actually sell it over here too on the other side of our business. So it kind of competes with that, that whole value proposition that we're offering.

[Will Smith]

You know, that one of the most.

[Ryan Adams]

Common levers to pull in a target.

[Will Smith]

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[Ryan Adams]

How many employees are here and what is your manpower look like to actually deliver these projects?

[Rick]

Yeah, so we have basically seven full time or eight full time people. I have like a gm, I have a sales manager. Manager. I have a marketing person. I have call center people. I have three operations people. So maybe we're at, we're at 10 now full time. And then we have, we're up to nine independent sales reps. 1099 sales reps. So when I say FTE like you know they're 1099. So we have another. So call it 20 maybe full time people working on this. And then the paint industry is, is very 1099 heavy. So all of our crews are independent contractors. Many of them have been with us for I think the last time I did the average it was like eight years or nine years. They've been with us for a long time doing jobs with us consistently. And you kind of every week. And so we have I think 50. We did 13 jobs last week. I was just having a meeting about it. So I think we have 15 or 16 total crews in there. And so you sub out all the.

[Ryan Adams]

Actual painting work, correct?

[Rick]

Yeah. To our certified trained professional installers. Yeah.

[Ryan Adams]

And do they come with rhino shield shirts on? Do they arrive at the home?

[Rick]

They, they do, yeah. So they have all their own trucks, their own equipment. Right. But they, they have our shirts, our hats, it's all of our, our buckets and stuff. So they, of our product. So they show up with all that, our yard signs, they put all that out for us. And many of them go from our job, you know, one round of job to the next round of job to the next. On the weekend they might paint cabinets in someone's house. You know they, they do other jobs too for themselves. But their exterior, exterior painting work primarily comes from us.

[Ryan Adams]

And how do you quality control them? Because from the customer's perspective they're still experience, you know, their, their experience with the paint, the painters is going to be associated with you and your organization even though in your own mind, their subs. So how do you and, and so much of, you know, like you said, marketing is top of funnel all the way through to end of project. Really it's not, it doesn't stop at conversion. It goes all the way through to delivery and getting them leaving a good review for the Next person to your top of funnel. So how do you. And, and why. And just let me also preface this by the reason I'm pressing on this so much is again, Ryan, is because so many searchers look at kind of blue collar businesses, trades businesses like this, service businesses, and the hard part is the actual service delivery. And, and it just doesn't seem I'm getting the picture here that that's not something that is that much of a challenge in your business. And so how have you avoided the pain that so many other folks running blue collar businesses can't, which is, you know, managing the crews, making sure the work is actually done right?

[Rick]

Yeah, yeah, A lot of good questions in there. I'll try to hit all of them. It starts, it starts with people. It starts with hiring the right people. So the fact that I sit here know, so nonchalantly talking about how our marketing and sales organization is a direct reflection of how good my GM and my operations director are, my production manager, my service manager and all the crews are that are running that side of the program. I don't have to worry about that. You know, we've gotten 200, we had 88, five star reviews when I took over the business. So for a year, for the 22 years that Rick ran it, we average about five a week now. You know, so it's just a much different program. And, and it's, it starts with hiring the right people who care about that. And then it, it also, you know, it goes back to our core values. That's one of our core values that we write for the company that we talk about. I just, we just graduated a new sales class. I met them for the first time on Tuesday, kind of like towards the end of their sales training. And the first thing I did when I sat down is I handed them a printout of our core values. And that was the first, that was the first five minutes of my conversation. The first ten minutes was like, this is who we are, this is who I am. This is who I kind of expect you all to be. And so it starts with that. And delivery excellence is one of our core values, whether it be outward to the company, whether it be internal to some report, you know, we're providing each other, having a conversation about. So it starts with that, it starts with people, it starts with core values for that delivery. The next thing I would say, it becomes incentives. How do you incentivize those people to want to do those things to make sure they're doing those things? So the profit sharing that my operations people have, their KPIs are around five star Google review rates. Like, wow, that's why we get five or six a week now. Because I made it an incentive for how they're incentivized to grow their bonus structure and to grow our business. Right. So, so one with the leadership there and then on the crew side of things, how do I keep, how do we keep them incentivized? How do we keep them invested? Well, one, we pay them a percentage of net sale, the net sale price. I don't pay them a price per square foot. Like, okay, you make a dollar twenty a square foot on this, this job. No, they get whatever we sell it at. They get 20% of the net sale price. That's what they get. They're owners, right? Like they're not really. Right. But if you get a percent of the business, you are, you're an owner, right? You have some ownership in that. And 20 of net sale for a Rhino Shield job is a lot more than they're making from anybody else. They might get a lead, a lead from. So we're paying premium and giving them a percentage and they feel invested in that project. I'm getting a piece of Rhino Shield this job. I'm an owner, right? You get a percentage of something. Salespeople, you get a percentage of commission like you're an owner. It's different than equity, but it's, I, I consider it ownership. Right. And they do too, in a lot of ways. So there's that, that 20% of net sale is contingent on you having an 80% Google review rate. If you drop to 75, you're now at 19% of net sale. If you drop to 70, you're now at 18% of net sale. You drop, you get where I'm going with that. So like there's conversations weekly with our crews about the importance of that. Now that doesn't necessarily mean that they're doing it right. There's, there's a whole qa, QC side of this. That's, that's, you know, we got to talk about as well. But they're not putting the paint on so thin that the customer notices. And then they're not giving us a five star review. Like, they're doing a pretty good job. They're cleaning up the job site. They're doing everything we said on the sales process or else we wouldn't be getting those five star reviews. So it comes back to incentives with them as well. And then the constant conversation around that delivery excellence that we emphatically emphasize. All the time. And then as far as the QA QC side goes, you know, it's a part of our business that we're really trying to hone in as we grow and scale, you know, having more touch points with like back office people to get out and spot check, you know, wet mill thickness on the application of the process, you know, even if it's just taking pictures, you know, before, during, and after each of the steps of the application, because there's a priming portion of it, there's a top coat portion of it, there's a thickness requirement that we have. So part of that can be managed with the amount of paint that's going out the door or not. Like, how much paint they have left over at the end of the project. Could it have gone on too thin? We also use tools like hover, you know, which. Or eagle view, which people are familiar with, for measuring roofs and walls and stuff. So you can get really accurate measurements. So we know, like, very accurate how much paint should be used on a given project because of these accurate, you know, 3D renderings we're getting. And so if too much products being used, well, where's that going? Is it being stolen or, you know, if not enough products coming back or too much products coming back at the end, Hey, I had this left over. It's like, well, how do you have anything left over? We gave you the right amount to do the proper amount of coating on there. Did you go too thin in some places? So there's some checks and balances there, but when your territory is like seven hours from tip to tip, you know, it's. It's pretty. It's pretty hard to be on every single project. So you got to rely on good people and making sure that they're incentivized to do the right thing.

[Ryan Adams]

Always remind us again the terms of the acquisition or the. What it was selling for and how you structured the deal and then we'll get into the transition.

[Rick]

Yeah. So, you know, it was originally listed for 5,5 million. That was pre2022, know, end of year numbers. So this was beginning of 2023. So to not have those numbers yet was a pretty critical piece to the whether or not I was going to do an LOI or not for this business. So after I met with Rick the first time, it was like, hey, you know, I'd love to get an LOI. Like, let's. Let's get the 2022 numbers in. I'm sure you're going to be closing the books. He's like, yep, give me a week or two. And he did that, got the 2022 numbers in and they, they were, he wanted them to be, they weren't where obviously I was expecting it to be kind of returning back down. I think it ended up being 3.2 or 3. Like it, it really kind of dropped back down even below some of the, like the, the 2019 numbers.

[Ryan Adams]

Yeah.

[Rick]

And so waiting, weighting that, that new number against everything else, you know, I kind of landed at this 800ish SDE, like kind of weighted SDE I would call it. And for me, the multiple, I obviously wanted it to be under 3, maybe 2.5, you know, trying to figure out where that would be. And so landed at like 2.8, whatever. So it was 2.8 something. I forget you could do the math. So I don't do public math well, but 2.5 million was what I had in my head. Now for the new number of what I thought the business was worth, my broker comes back and goes, hey man, I'm so sorry. Like, yeah, that, that's just not going to work. I'm sorry, this deal's not going to work. I'll go find you something else. And I was like, I was like, well dude, I was like, he said.

[Ryan Adams]

Ryan, he said it's not going to work. The 5 million original purchase price.

[Rick]

He's basically saying, obviously this isn't worth 5 million. It's, it's just way off. And I was like, yeah, well have you asked, have we asked Rick like what his new number is? Like, he's a reasonable guy. He's definitely wanting to get out of the business. It's been on the market for 18 months and he knows what he has now. He understands it. So like just, let's just ask him, where does he think he's at now? And rick came back two days later I think and was like 2.5. And I was like done. I was like, I was right there. I was like, let's just do it. You know. That was kind of what I thought was fair anyway. I literally did the same math. He did the same math. He clearly was seeing the same thing I was seeing. And we had an LOI out within a few days, you know, and this was January, beginning of February 2023. And we closed June 9th, June 14th tomorrow, two year anniversary, so. Oh, amazing. In 2023. Yeah. Yeah, that's good timing. Not planned.

[Ryan Adams]

So you get the business for two and a half million.

[Rick]

Yeah. So we get into the business, you know, take over on the 14th or 15th was the first full day and you know, met all, met, met, met everybody, all this. We had two sales guys at the time, we had one ops guy, we had one lead setter and then we had you know, seven or eight crews and, and, and a service manager. And so you know, relatively small company. I'm like meeting, you know, now I have to trans because the marketing's turned on. So I'm taking over the marketing with the TV stations. I gotta get a new ad out maybe with me in it. Like there's all sorts of like. Because it was a marketing machine at the time, albeit all broadcast, you know, radio and TV and stuff that was kind of underperforming. And one of my core thesis was like I'm going to take this into the performance marketing age. Like I didn't know what that meant at the time. Like, but I was like I'm going to do meta marketing, I'm going to do TikTok, I'm going to do Google, like I'm going to get better on Google, YouTube. All the things that he wasn't doing, how to actually go implement that. I was going to learn that really hard lesson over, over the next, you know, six, seven months. But there was just so much to do on the marketing side to make sure that the leads were coming in that I totally discounted. And this is a big part of the conversation how important the sales leader of that organization is to running a marketing and sales business. Home service business. Rick was a 20 plus year Sears in home sales person. Like anybody who knows, you know the in home sales Sears guys selling siding and all that stuff back in the day, like those guys wrote the book on how to, how to do in home sales, right. And so for 20 years he just inherently either went out and sold himself, you know, wrote the sales program, held salespeople accountable, did the sales meetings, recoached, trained them, went out there. I had zero of those skills. Zero. I still have very little of those actual skills that go out and sell my own product. I have done it. It's kind of fun actually. But taking Rick out of that organization, taking Rick out of my company as the sales leader, he's effectively the sales manager. Replacing him with me was horrible for the business. So if you want to ask more questions off of that, I'm not quite going on a tangent yet but like that was the big, I'm like I'm focused on marketing, I'm going to make sure we're doing the right things that bring leads in I'm going to start pivoting that marketing from, from like the old school linear tv, radio, take some of that spend and I'm going to start like figuring out performance market. Like that was my focus going in. And sales just tanked. 16% close rate over seven. Over seven months. So.

[Ryan Adams]

And reflecting back, Ryan.

[Rick]

Yeah, well.

[Ryan Adams]

And reflecting back, what do you think the diligence miss was here? If, if, and if I'm being too harsh, but, but was it that you didn't, you know, was it one of these where like, you should have pressed harder on, okay, how does money actually enter this organization? And that would have uncovered his. Because he was. This is kind of a story of a key man. Keyman risk.

[Rick]

Yes.

[Ryan Adams]

And the key man in this case happens to be door too. Sales or not door to door, but home sales in person. In home. Home sales and, and underappreciating that key.

[Will Smith]

So.

[Ryan Adams]

So anyway, how do you look back? What, what questions should you have asked or could you have asked that would have uncovered this dynamic?

[Rick]

I, you know, I honestly haven't thought much about that, of what I could have done differently in due diligence to realize that because I don't even know. I, I don't think I fully understood. You know, maybe I could have talked to one of the other Rhino dealers early on. You know, maybe I could have asked for that because, you know, we'll get to the part of the story. In December 2023, seven, you know, six months into ownership, when Danny Hoey in North Carolina took me under. Under. And he'll watch this podcast, he took me under his wing and was like, you have a sales problem. I know how to help you solve it. You know, because he was a Sears and home sales guy. Like, all these guys came from the same, they were all cut from the same cloth. So, you know, maybe in hindsight, asking the dealer, right, because this is a dealer model. Asking the dealer that I'm about to enter into an agreement with. I bought Rick's dealership, but I also have to sign my own dealer agreement now with the manufacturer. Maybe what I should have done was had a more candid conversation around like the sales process in the organization and hey, could you connect me with a couple guys? And they absolutely would have because they connect people with me now, you know, so it's like, I should have been more like pushy. And that was one of my feedback to them, you know, years, you know, a year later was like, had you done this for me, I wouldn't have suffered or almost gone out of business or whatever. So now they're trying to push new dealers towards guys like me or Danny or Jim before the sale closes or as you know. So I think that's the real takeaway there. Especially since you had that dealer network. I can't speak for other business businesses that are just by themselves, but that was some, that was a miss, I think. And you're not being too harsh. Yeah, it is what it is.

[Ryan Adams]

The other thing is this would be, this would be a similarity to a franchise network before we talked about the contrast. But the similarity here would be that in both dealer businesses and franchise businesses, you have all of these other owners around the country that you can learn from and in fact talk, hopefully try to talk to before you buy the business and understand as much as you can, absorb as much as you can from them before buying the business. So there's this baked, this, this pre baked network of other owners that you can lean on both before and after your, your acquisition, which is a happy dynamic in both, I guess, dealer businesses and franchise businesses. Great, okay, so you get into the business and what, what in sales just start declining. What happens? Talk, talk to us about almost going out of business.

[Rick]

Yeah. So. Well, one, one key piece of like as you're transitioning and as we were closing, I think it was like five days before we closed or a week before we closed. My SBA loan officer, Jeffrey Tanner, great guy, really loved working with him at Central Bank Florida by the way. He, he, he came to me and he was like, hey, you know what? I was thinking about this. You should take 300k in working capital instead of, you know, instead of 100 or something. I forget what I had it at. I blocked it out of my mind because it was so stupid. And that's not being too harsh, that's being like kind of nice. I think it was like seventy or a hundred, right? And he's like, I think I would feel better if you took a 300k working capital. And I was like, oh, well, you, you'll give me that. And at that point I'm starting to think like I should probably just take whatever they'll give me, you know, on top of this loan. And so he's like, yeah, let's go 300K. And he, he kind of knows this, but like probably needed almost every single cent of that 300k working capital or else we wouldn't, you and I wouldn't be having this conversation. I wouldn't have gotten seven months down the road like so working capital requirements for Your business, multiply whatever the number is you come up with by 5 would be 3 to 5 would be my recommendation. You're being too conservative because you're thinking, oh, I don't want to take more money than I need. But you can't go get money later. It's really hard to get money later when your bank account's going like this. So you're in a position when you're buying that business at that time to like, whatever you can get, take it. And if you just pay it off early, great, you know, but if you can get more working capital to sustain you through any, any kind of bumps, take it. And that was a big lesson learned for me that, thank God he said that. You know, I, I thanked him for that later.

[Ryan Adams]

So anyway, yeah, no, it's, it's such a great point. It's such a great point, Ryan. Thank you for highlighting it. The working capital and being under capitalized is a. Well, managing working capital is so hard for first time business owners. And being under as a consequence or related to that, or maybe the reason that you find that you're cash constrained is because you don't have enough working capital to begin with. The businesses under capitalized also a problem. So great point to highlight. And then, and getting that extra working capital, that 300 in your case. So that comes with a monthly expense because it's basically more loan. But it's in the grand scheme of things, relatively small.

[Rick]

Correct? Yeah. When you're looking at a $2.5 million loan or 2 or 2.2 after my deposit, tacking the 300 back on to put it right back at 2.5 essentially is like, kind of makes sense.

[Ryan Adams]

Exactly.

[Rick]

It's not that big deal. Yeah.

[Ryan Adams]

Great. Thank you. Loan loan. SBA lender.

[Rick]

Thank you, Jeffrey or Danny. Thank you, Jeffrey. Jeffrey.

[Ryan Adams]

Jeffrey.

[Rick]

Jeffrey. Yeah. Thank you, Jeffrey. Cool. Okay.

[Ryan Adams]

All right. We still haven't gotten into the, the, the collapse here.

[Rick]

Yes, yes. So, okay. So first seven months, I, I'm obviously seeing that close rates aren't where they need to be. We're not generating sales. We didn't do over 200k in sales in any of those first seven months. In fact, one month, one of my sales reps went 1 for 25, 4. I think it was in the month of November. And that was when I was like, oh, crap, like this, like this is not good. And, and the other sales rep who was the better of the two, like took a two week vacation during that month. So this other sales rep that wasn't doing a Good job. Was getting even more leads than normal and was just doing really bad with them, really bad things with those, those leads. So, man, I'm smiling about it now. Never thought I would, but yeah, so, so bank account is, is, is dwindling down. You know, I'm, I'm gonna, I'm finding myself in a cash crunch. I'm doing the Runway. I like, I know how much time I have left at this pace. You know, basically end of January, if I don't fix something, or February, I was like, if I don't fix something, we're, we're done. Like, it's just not going to work. I'm gonna have to recapitalize the business somehow. Like I'm trying to figure that out. So I actually used, like, I actually used a QuickBooks, like short term loan during that time. Like I just looked at what kind of what can I get right now before the bank account goes down? Got, you know, like $100,000, like short term loan from them to tack onto it. Just to give myself a little more Runway. I was getting whatever I could into the bank account to make sure that I had enough to sustain as long as I could. And I now, like, the clock is ticking. I need to figure this out. So this is November 2023. About six months in, I know something's wrong. I reached out, I've been reaching out to amco the Ryan.

[Ryan Adams]

Sorry, let me, let me, let me interrupt real quick. Yeah, so when you say one of your sales reps, he basically had 24 leads. And these are warm good leads. These are homeowners who have raised their hand to say, I'm interested in your product. And he goes and visits them. Right. It's an in person sale and he just closes one of 24, four. So 4%. And that is not sustainable. That's quite disastrous. The good news is though, you know, you say to yourself, we got the leads. You know, if I can just, if I can move the 1 of 24.

[Rick]

To 3 of 24, anything but 5 of 24.

[Ryan Adams]

Yeah, you know, you can, you, you can, you can quickly claw your way way back to real revenue. But also, how are you thinking about this in terms of like, what's going wrong?

[Rick]

I knew we were generating leads, we were setting appointments. My lead setter was setting appointments. So those were, those were set appointments. Like they left the form fill, they called in, we scheduled an appointment at their house, set all the conditions for you to go out to the house and be there. And you know, you don't Close it. Right. I knew we had a closing problem. I knew we had a sales problem. And I had been so focused on generating leads. Generating leads. Generating leads. Um, and at that point, we're starting to get Facebook and YouTube leads. Like, we're starting to transition and. And. And even, like, more like we're getting. I'm. I'm, like, generating more leads and we're selling less. So I'm immediately thinking, oh, it's. It's lead quality. It's something I'm doing with the leads. Like, I started thinking about that, and I'm just like, you know, it's. It's not that we should be closing more than one for 24. So I knew we had a sales problem. Problem. And I mentioned that to the manufacturer, and they connected me with Danny up in North Carolina, and they're like, you should talk to Danny. So they gave me his number. I texted Danny, if you want to go there. I don't know if I answered your question about the.

[Ryan Adams]

Yeah, no, no, perfect. You did. You did.

[Rick]

Yeah.

[Ryan Adams]

Enter Danny.

[Rick]

Enter Danny. Yeah. So my lifesaver, I tell him that all the time. So I. They gave me Danny's number. It was a Friday night. I just dropped my kid off at baseball, and I'm just wondering. I'm like, did I make this huge mistake? You know, I put my family at risk to do this thing. It was a very kind of dark moment and just dropped my kid off a baseball. And I'm sitting in my truck, and I'm like, all right, I'm gonna text Danny. Text Danny, hey, man, I'd love to set up time to chat with you. And he's like, how's now? It was like 7 o' clock at night. You know, it's dark out. He goes, how's right now? And I was like, okay. So I call him, he picks up, and we talk for two hours right there while my kid's playing baseball about, you know, everything that had to do with the business. He started off with like, hey, what's your wife's name? What are your kids names? You know, how old are they? You know, getting a little emotional, honestly, talking about it, because he deeply cares about people in his life, and he didn't know me at all, and he wanted to understand me and. And understand who I was, who my family was before anything else. And. And. And that's a. That's a really good lesson for business owners. So then we got into the business, right? Like, okay, how are leads? What's the cost? What's up So I had all these numbers. And he's like, yeah, you have a sales problem. I'm like, yeah, I have a sales problem, you know. So he quickly identified that. We talked about benchmarks. He's like, okay, so your gross margin's good. Like you're delivering on the, the product and you know, you're doing all the right things there on the operation side. He's like, you just, you just have a closing problem. So he talks through his whole process, sales process that, that they go through, how they set appointments. This is just all on the phone in that two hour period. I'm taking notes, right? And by the end of it I was like, I was like, man, I'd really love to just come up and see how you guys are doing things. He's like, yeah, we'd love to have you. I was like, can I come up Monday? And he's like, sure, come stay with Lynn and I up here in Charlotte and, and we'll, we'll, I'll walk you through what we do. So I booked a flight there in my truck, texted my wife after I booked the fly. I was like, hey, I'm going to see Danny in North Carolina on Monday. I, I gotta figure, I gotta figure this out. And so I fly up there on, on Monday morning, first thing, he picks me up at the airport, we go straight to his Rhino Shield office and, and we sit down in his office and I just take notes for two days. He walks me through the sales process, shows me the sales kits that they used to sell. Our guys weren't even using these sales kits, right? Like, like things, products, things to show people in the house of like, who we are. It's like very obvious now. Well, what presentation are you using? I don't even think they're using the presentation, they're just winging it. Like all these things that were just like the blocking and tackling just wasn't happening in these, in home sales things, right? So he walks me through all that. I take notes on everything and I leave there. I couldn't sleep the night I stayed at his house. I couldn't sleep because like, I knew, I saw it, I saw the direction I need to head. He, he enlightened me and connected the dots. You know, he'll tell you he didn't do anything for me, right? He's very humble in that way. But like, I had to figure it out myself. But he connected the dots and I couldn't sleep that night because I knew exactly what I needed to do when I got home. To the business. After being with him for those two.

[Ryan Adams]

Days, what does he do?

[Rick]

What.

[Ryan Adams]

What do you come home and start implementing? And how does it turn around?

[Rick]

Yeah. So, you know, I looked at our sales presentation. I was like, hey, guys, are we using this? Yes or no? Like, okay, well, let's update it. Let's make sure it's got all the right information in here. This is a sales presentation. So, like on an iPad, like, hey, here's Rhino Shield here. Here's who we are. Let's add our Google reviews there. Let's like, let's fix it and make it what it needs to be. You guys using the sales kits? What sales kits? Like, now we don't use those. I'm like, well, we have two of them in the back here that I bought with the business. So, like, we're going to start using these. This is how Danny is. So I kind of retrained my sales staff based on what Dan. I now had this, like, feeling like I could kind of be the sales manager. And I was like, here's how the sales process should go. You're going to use the heat lamp. The heat lamp shows our reflectivity. It's this cool little demonstration we do in the house. You've probably seen it if you bought Windows. Anybody here on the podcast who. Who's bought Windows, I'm sure they busted out a little heat lamp to show you the. The xenon inside and. Right. And all that. So we do something similar with rhinoshield. So all these cool things that help us build the value in the home, they weren't doing. So implemented that right away started. We call it dispoing a lead. So telling me what happens after an appointment. Like, was it a demo? No sale. Was it a. You know, was it a no show? Like, what happened in the home? We weren't like, dispoing the lead in front of each other. So there was no, like, internal salesperson accountability to what happened on an appointment. Like, I would have to call the sales rep to ask him what happened at their 2:00pm appointment at 6:00 clock at night. Like, there was no internal feedback loop bad on me. Right. I feel. I feel stupid even saying that, honestly, at this point in my life. But that was one thing Danny was doing that I took back and, you know, close rates kind of came back up, like, pretty quickly. We're like, okay, we're selling a little bit. I was like, okay, I kind of know what I'm doing here. I grabbed a bag, I started going out and running that sales program and I sold a couple and you know, I was like a 50% closer for like the forge, the four I went out on, right. But I was like, I, I, I, I need to feel the confidence in this process. I need to take this, I need to be the sales leader. That's what I walked away with in December. But I quickly realized, you know, I'm not really long term the best fit to be the sales leader for the organization. I, I think I need to find a pro that can come into my business and go and, and help me build the sales team. So I put a job application out for, you know, an in home one call close sales sales professional. I wanted to get another guy and he wanted to get a third guy so that you could have some competition if I had two guys and the worst guy and the, I couldn't fire the worst guy because there were too many leads for the one guy. I needed three to be able to have some sort of like parody and like accountability. So I was going to hire this third person and when I put that job rack out, I got a bunch of guys in, started interviewing them, some good fits, some not. And then a guy messaged in and was like, hey, I'd love to do this position. But he was like sales VP in home sales. One call closer, 25 years experience. I was like, I don't need a sales manager right now, but maybe I do. And so I hired that guy even though he was like, yeah, I'll come in and be a sales rep. I'll just sell at first. And you know, if it, if, if I become your sales manager, great, I think I can, but like I'll just show you what I can do. And he came in and he, we, we talked a lot. We went to Arizona together so he could see the sales training program out there and what they were doing. And, and we came back, we revamped our presentation. This is in January 2024 now. And he's like, I got this. I, I know, I know how we're going to do this. And he went out and closed like seven of his first eight jobs at a much higher price than like we repriced everything. And he was selling them at like a really high price. And I was like, this is how Rhino Shield is sold, right? And so yeah, we got, I quickly promoted him within a couple weeks to the sales manager. I'm like, we need to revamp our whole process here. You need to help lead us to the promised land with these two other guys I have and and, and we need to, we need to turn this thing around. Uh, and we, and we did. And that's kind of where. Where it started to like, go the correct direction. And you know, within. I think by that April, that, that march, we did 700k in sales. Like that, that March, you know, there was like, very quick. And that's a busy season for us, right? So it was like, very quickly. We did like, a lot more sales. And that's when I was like, okay, here's how he, like, we're going to be okay. And so were you so excited? Relieved.

[Ryan Adams]

You're so excited that this. Relieved?

[Rick]

I guess. I mean, because I'll be honest, Will, like, you know, I'm looking at, you know, the Amex bill coming up. I'm looking at the working capital in the, in the business account and I'm like this. Give me tight, you know, like, yeah, making these payments, you know. And I'm sure other business owners have been there. You know, we've all been there, I guess. But yeah, it was, it hit right when I needed it. And it's. The bias for action is, is the takeaway there, the bias for action, man. Like, I can't thank Danny enough for just. He. He understood the urgency. He saw it. I explained it to him. And so when I said, can I come up Monday? He was like, you need to come up Monday. Like, he agreed with me. And then turning that into action as quickly as possible was what saved the business. So once you identify the problem, don't wait six months. Like, fix it now. Do it now, do it again. Yeah, yeah, yeah.

[Ryan Adams]

Ryan, just one. One of the things that we always consider when evaluating a business is, is how challenging hiring is for the service delivery. And as you've said here, this is a marketing and sales organization. And so your salespeople, as you, as you just finished describing, were really. Are really the lifeblood of this business. How, when I hear a home visit, what do you call, what do you call it? The one visit sales closer. What is that phrase you keep using?

[Rick]

A one call close. A one call close.

[Ryan Adams]

Yeah, yeah. And going into the home or whatever, I feel like that's maybe not a lost art, but it's done, like, less than it would have been done in the past, I assume. Although maybe, maybe not for home stuff. Anyway, how hard is it to find those people? How hard is it to. To. To find people who can go into a home and sell well these days?

[Rick]

Not as hard as you would think. Don't look for them on LinkedIn and don't look for them on Zip Recruiter. They are on Indeed. At least right now as of the time of this podcast. That is a lesson learned. I've spent a lot of time and money looking on LinkedIn and ZipRecruiter for these people. And for whatever reason in home sales, people are on Indeed. Um, so that's a really great way to find them. They come as soon as we put a job posting out. I think it was four days for this most recent round of people that came in. We found five in three days. Five really good quality in. In. In three days on an. On an Indeed thing. And Indeed has some things where you can search for what you're looking for. So like if we're looking for an Anderson Window guy or we're looking for, you know, someone who. Or like Erie or a West Shore homes guy, like other places we know, run the one called Krillo's program because we want that type of salesperson. You can go kind of target those people and try to pull them in and send them a message like, hey, saw you're on Indeed. Worked for Anderson. Would you consider applying for our thing so you can do some outreach too? So not that hard, to be honest.

[Ryan Adams]

Great. Ryan. Well, we have covered a lot. We're getting toward the end here. You. So just to round out the kind of the reviving the business and putting it on a growth path, you got to $700,000 in that, I guess that first month after starting to figure things out, I. At the top, I said, you've done 1.2 now for the last two months. So has it just been basically steady growth since coming out of the crisis?

[Rick]

Not really. I think there's been a lot of ebb and flow of that. Like we start off on the 700, you know, like 500, 700, 700. And then it dropped back down and then it just kind of. We never really gotten higher, high above the 700. There were a few months like that, but it was our average.

[Ryan Adams]

Because you said it was high season too, wasn't it?

[Rick]

Yeah. And then it kind of dropped off. And you know what? I. You really have to understand the point I'm going to make is you really have to understand all the levers in your funnel. And in a home service business, there's a raw lead, there's then an appointment that gets set, there's a lead that gets issued. So that's after the appointment gets confirmed. So that lead gets issued to the sales rep. The sales rep then demos it, which is when you go in the house and you put your product on the table and you try to give them, you give them price, and then they either close it or they don't. And so there's a lot of focus that gets put on the close rate. What is our close rate? What is our close rate? But what I failed to recognize for many, many months is that our appointment set rate was ticking down and down and down and down and down. So I was setting 19 appointments for every hundred raw leads that were coming in. That's not good. So I'm like, my cost of marketing is climbing, but my close rate's really high. And my net sale per lead issued, which is another really important metric, it combines your demo rate and your. And your close rate into like a, a number that's better than close rate. So how well is that sales rep doing? Is their net sale per lead issued? I give them a piece of paper to go to a house. What do they do with it? Do they find an excuse not to demo it or do they demo it and get the job done 40% of the time? You know, so the next problem that I had to solve in my business was my cost of marketing was going up. So my return on ad spend is, is, is going, is going down, right? So cost of marketing is like a percentage of your P and L, right? Roas is kind of how you look at it in the, in the marketing world, which is, if it's going down, that's bad. It's inverse. So my cost of marketing was going way off benchmark. So we were going like, it should be 15% for me in my benchmark. We were like, up over 20 and it was ticking up. And I'm like, I go to my sales manager, I'm like, hey, like, we gotta solve this worse. Our appointment set rate is going down, down, down, down. He was over qualifying leads. We were over qualifying people on the phone and only setting the best appointments instead of setting as. Not as many as possible, but like, opening up the aperture to get our guys more opportunities to sell. So we were really focused on this like 55% close rate. NSLI is super high. But I'm like, but my cost of marketing is continuing to climb. And it was because we were over qualifying leads and that appointment set rate was not where it should be. And so I'm looking at, man, great close rate, great nsli, I should be making more money. What's going on? Well, we're setting less and less appointments over time. We're getting too prescriptive. We're generating a lot of sales resistance on the, on the set call with people. We weren't using good scripting, and we weren't. We weren't willing to innovate and change. And so I ultimately made a change at the sales manager position because we kind of couldn't solve that problem. And I expect them to help me solve it.

[Ryan Adams]

And was he over qualifying leads so that he would show a good close rate?

[Rick]

Exactly a hundred percent. I will say, regardless of what his, you know, his intent was, you know, in the back of his mind, Ryan failed to set the appropriate incentives so that everyone was aligned in the right way to. To. To achieve the best results. And I fixed that is. Is how I'll. I'll phrase that.

[Ryan Adams]

And you fixed that by removing this person.

[Rick]

There were coaching conversations around it. There was some attempt at incentive tweaks that ultimately didn't. Didn't land well with this person. And so. And then there were some coaching conversations around this needs to improve. Because the mantra was, well, you just need to spend more money, and then we'll sell more jobs. And I'm like, yeah, but I can't spend money when my benchmark, you know, when the P and L line item for marketing is. Is going through the roof. You're making money. The sales reps are making money. Ryan's not making money. The business isn't making money. So it. After coaching conversations and trying to get it, the kind of the not broke, if it's not broke, don't fix it mentality was really shining through. And one of our core values is innovation. And so not broke, don't fix it, and innovation don't really meet well. And so it was kind of like a lack of core value fit at that point and the unwillingness to the lack of willingness to move the needle on those things because, hey, if it's not broke, don't fix it. Well, it is broke. Our definitions of broke are different. Your close rate at NSLI is high in your mind. But what really matters, the P and L, the bottom line is way off and it's broke. And the reason is because of the appointment set rate. And if you're not willing to work with me on how to fix that, I'm gonna have to find somebody who does. And that's ultimately what we did. And then overnight. Overnight we had the first $1.2 million month. The month. The month we made the change. So I was right. I was right. You know, we were leaving, and Jim Williams out in Arizona told me this, and it always resonated with me. He goes, I think you're leaving money on the table. Like that close rate in NSLI is too high. He's like, it's great. But he's like, it's just too high. Your appointment set rate is probably too low. He was telling me he's again, you're leaving money on the table. And I always thought about that for like a year until I finally made the change. And he was right. I was leaving money on the table. We were.

[Ryan Adams]

Ryan, I, I recall, I think on this point a line that you said in the, in our pre call, the best salesperson is not necessarily a good sales manager. Was that encapsulating this, this very thing we just talked about?

[Rick]

I think so, yeah. And also that a bag carrying sales manager doesn't necessarily have. I say bag carrying, like actually goes out and sells. As well as leading the team, the incentives aren't aligned well there. You know, they can quote unquote, whether they're doing it or not, poach leads from their, like they're incentivized at the end of a month to go out and just sell themselves to bring the business in as opposed to selling through their team that they're building. And so there's a lack of incentive there of like if the only way the sales manager makes money is if the team does well, that's probably good incentives. If the sales manager can still make money and the team's not doing well, that's probably not a good situation. And that's the takeaway. Yeah.

[Ryan Adams]

All this digital marketing, were you doing it yourself or had you, I think one of your team. Now you mentioned earlier when you said when you describe the org chart, there's a digital marketer. So was it always a third party hire or were you learning digital marketing yourself?

[Rick]

I did the thousand hours on YouTube and all sorts of different courses, Coursera and all that stuff to really deeply understand it myself. And I started my own campaigns inside of Meta, Facebook and Instagram on my own. Edited those videos myself with Cap Cut. Took the class on cap cut on YouTube, got it all edited up, Vertical Video, dropped them in there and started getting leads like crazy. People like seeing my face. People like the value proposition I put on there. I had fun writing the ad copy and, and the scripting and you know, I, after I did it and kind of proofed it out, I realized I was like, hey, I probably need to find a third party that can help me scale this and maybe has a little more, you know, time than I do to go after and figure that out. And I did. I've gone through a few agencies since then, landed on a really good one that I've been working with now. And, and, but yeah, I, I, this is my third agency. I've fired two, taken it back over myself, gotten it back to where I want it and then hand it, handed it back over a couple times. So I feel pretty confident in my ability in that realm these days.

[Ryan Adams]

Well, well, let me, and let me press you on that, Ryan, because like, like with anything here in our world, it's like you, you know, not only capital allocation, but resource allocation, your time allocation. Why did you think that learning all that stuff yourself, really getting in the weeds of marketing was a good use of your time rather than outsourcing it? Now we know the end of the story that you've outsourced it a number of times and they just haven't done.

[Rick]

A very good job. Part of the reason you didn't know.

[Ryan Adams]

But, but you didn't know that at the time. But you didn't know that at the time. And it's just, it's, there's a lot to learn today in digital marketing. It is its own function.

[Rick]

Yeah, I would, I would say this, I would say the biggest driver for me going out and figuring out myself was that the big dealers, Danny, Jim, the guys who are doing Arizona, you know, they were saying you can't sell Facebook leads. Or they're not, they're not high quality leads. They're tire kickers. They're whatever, they're, and so I'm hearing that and I'm going like, okay, I take that, you know, with a grain of salt. I just don't believe that. And so I know they outsourced their stuff. And I was like, maybe outsourcing it is the problem. Maybe they didn't understand what the third party was doing. You know, because when you're managing TV ad buys, like after doing that for 20 years, you understand, you know, oh, if, if I'm not, you know, doing it with the nightly news and it's like, you know, it's crap spots. Like, they can under, you know, they understand the nuances of buying media. Right. And so they can hold a third party accountable to like, hey, I'm not seeing, seeing, you know, I'm not seeing it when it should, like, what do the logs look like? Like, they understand all the internal workings of that. You need to understand the internal workings of performance marketing. You can't just rely on those people. You have to understand it yourself. And so I wanted to go understand it so I can hold potentially a third party accountable someday. To what, what I know and, and what I found is that every third party is just trying to get you the lowest cost per lead and they'll tell you they're doing a good job as long as they're producing you the lowest cost per lead. The lowest cost per lead is, is not the metric I hold all my third parties accountable to. Cost per appointment set. How much did it cost me in marketing to set an appointment? Because if I, if, if I, if I set an appointment, we've got them on the phone so we have good contact. So we've, we've talked to the person, they have a need, they have a want, they want our, you know, they, our, our thing can solve their problem and they're willing to set an appointment with us. That's a qualified lead. Right. And now I could potentially send a salesperson out on that. So if you're just driving to the lowest cost per lead and you have no idea what your set rate is or what your cost per appointment is, like what are we, what are we really driving towards? And so all of my agencies that I, that I use, I talk to them about cost per appointment based on the medium that work, which is, which.

[Ryan Adams]

Is a, essentially qualified lead, qualified cost per qualified lead.

[Rick]

On the E commerce side, it's really easy to track that. They're very used to tracking that. You know, with all the interconnections with what's, what's it called, like Shopify, like connects directly with meta. So it's really easy to see all the different steps. Your funnel inside a meta. With a home service business, your CRMs aren't connecting in a way that's, that's allowing you to see an appointment set a demo, a sale inside of the meta platform. You have to use other, other tools to be able to see it. Marketing agencies that are helping home service companies aren't used to seeing, aren't used to that requirement from a, from a business owner. And that is my requirement. So I had to help them solve that problem and figure out how do we, how do we see what our cost per appointment set is like? Is your CRM doing the right thing? Are we giving meta the feedback loop? Optimizing a meta campaign on a schedule event versus a lead event or a demo event versus a schedule event. It helps drive the algorithm to find more of the people that you want as opposed to just saying, hey, lowest cost per lead and you're not generating any sales off of it so a lot of, so many lessons learned there and I'm still learning.

[Ryan Adams]

Ryan, you know, the thing about you learning digital marketing is that as we have, as you emphasized before, you are a marketing and sales organization. So, so you are really the owner should have a very deep understanding of what the, the other lifeblood of this business is, which is the funnel optimization. So you know, in some sense it was an, an incredibly valuable use of your time, not something to be outsourced when function number one is funnel in this business.

[Rick]

Absolutely.

[Ryan Adams]

The other big lever you pulled, and we still got a couple minutes here. Ryan, you cool?

[Will Smith]

I'm on time.

[Rick]

Absolutely.

[Ryan Adams]

Keep it rolling because there's some, some, some great topics here to hit. Another big lever in your growth has been territory acquisition. Talk to us about how that unfolded and how it moved your numbers.

[Rick]

Yeah, so that was part of the core thesis as well. When I bought the business, one of the big ones was performance marketing, you know, transitioning to lead gen through that. That was one of the big core thesis. The second one was territory acquisition. So you know, when you buy a business at a multiple that you buy it at and you take a loan, like you gotta have some growth, you know, some, some, some growth aspirations if you want to be able to service that debt and maybe make a little bit of your own money. Right. So that was always part of it. I kind of set a 24 month goal for moving into an adjacent territory or growing into a new market. Didn't know which one it would be exactly. There was somebody to my south in Orlando that I knew was not doing a lot of business despite Orlando being like a 3 to 4 x size DMA relative to Jacksonville. And so that was kind of like in the back of my mind, like, hey, maybe I can buy that guy out or whatever that looked like down the road. And So I set a two, I set a 24 month goal for that. And you know, I ended up meeting that guy at a dealer meeting at the end of, at the end of my first year and started talking to him about it. We started texting because we're adjacent territory and just kind of struck up a relationship with him. Was really trying to stroke his ego like playing this like subversion game. My, my Green Beret friends would be proud of my guerrilla warfare on this guy, like getting him onto my team. Because when May came around, so less than 12 months after the acquisition, I had teed it up and gotten this guy so excited about like retiring and moving on to his next thing that he offloaded his territory to me for like pennies on the dollar relative to what I got Jacksonville for. And so In May of 2024 I bought that business for 250k. And you know, my manufacturer helped me out a little bit with, with that acquisition and, and yeah, and you know, kind of amortized out some, some, some earn out stuff over time and got into that for really kind of cheap. So I, I basically like 3x my customer base with a, you know, a 10% investment relative to my initial one. And that's.

[Ryan Adams]

Wow.

[Rick]

Yeah. And on top of that. Wow.

[Ryan Adams]

And, and on top. Well, sorry to interrupt. What was his revenue? I mean understanding that he wasn't, he wasn't, you know, he was not fully actualized there in his market.

[Rick]

Yeah, it was like, so what was his revenue? He had done like 3 million over two years or three years. Like I was buying a piece of paper. I wasn't, I wasn't buying like, I didn't buy any paint tinters, mixers from him. He didn't even have that. He was still having like a factory like do it separately third party. Like he wasn't running it like a real business. So I, I literally acqu. I like basically acquired nothing but a piece of paper. That was it. There was no, there's really no brand equity in that market either. He wasn't doing a lot of marketing. He was actually poaching a lot of my leads, which was a totally separate story. He was coming up into my territory and running leads that they were landing on his Google business profile because they were like closer to him. And he would just go run those leads instead of giving to me, which is what we're supposed to do as part of our dealer agreement. So there was all sorts of weird stuff going on and that was just, it was really an opportunity cost thing of just get them out of the way so I can get in there and start marketing there. And we've blown that market up big time. So.

[Ryan Adams]

Well, this is one of these, this is just one of those where it's like you had, at this point, you had the sales, the sales playbook dialed in. You had your funnel dialed in. It's just now it's just like let's turn on more acquire or turn on more markets and you can just rinse and repeat.

[Rick]

Right.

[Ryan Adams]

Or do I oversimplify?

[Rick]

No, you're not oversimplifying. That's, that's basically exactly what it was. And the funny thing was as soon as we did that almost overnight we were getting adjacent and spillover leads from the Tampa market because, you know, with performance marketing, you can't target like only people in that dma. Like if someone drives from Tampa over to Orlando and back that night when they're sitting, like, if they've driven anywhere along i4, that's to touch the DMA, like they're gonna get bleed over things. So we were starting to get leads in Tampa and so I called the manufacturer and no one owned the Tampa market at all. So I was like, can I just like ink that too as part of my new terror? Like, I mean, I'm already getting leads, so why don't I just turn it on over there and we just ink the deal. So I ended up getting Orlando and Tampa almost at the same time last June. So June 2024 and started marketing in both those places, hiring sales reps in both those locations. So.

[Ryan Adams]

So, Ryan, why for somebody listening here, you've given us, I mean, you haven't, you know, given the playbook in excruciating detail, but high level, what you were doing wrong, what you're doing right now, what Danny taught you, what you've, what you've taught yourself in marketing and funnel optimization. So somebody listening who is attracted to running a marketing sales organization, it's a good business buyer fit for them. Why should they go try to buy their local, their local Rhino Shield dealer.

[Rick]

Yeah.

[Ryan Adams]

And, or call the manufacturer.

[Rick]

It's pretty.

[Ryan Adams]

Call the manufacturer and, and say, hey, can I get a territory? What territories do you have that are available? Can I, you know, could I sign up?

[Rick]

Oh, man, I better get a finder's fee if they get any good dealers out of this, out of this podcast. Yeah.

[Ryan Adams]

So that, that kind of, that real and it's a serious question. Yeah.

[Rick]

Yeah. I mean, I, I think Rhino Shield's a great business. You know, when I looked at investing in a business, I wanted home service. I don't really know why. Like, I had invested in real estate. We'd done home flips. I was, I just kind of liked home services. I, I like, I like that idea. I wanted it to be, be high ticket. So I knew I wanted to be an expensive thing. Scarcity, you know, premium. Right. Premium positioning, like all the stuff that Heroi talked about. I had read the book, so I like wanted that and I wanted to have high differentiation, something that's different. And rhinoshield checked all those blocks for me to be able to market and sell. Like if I was just selling regular paint, you know, competing on price with other painting companies, that, that, that wouldn't be as exciting to me. And so those, those three things are what makes Rhino Shield a cool business. And there's probably other businesses out there like that, you know, selling high ticket, high differentiation home service products. And so any one of those, I think, could be great.

[Ryan Adams]

And how, Ryan, could somebody convince themselves? Because obviously the. This all hinges on there being enough demand in a market for Rhino Shield so we don't have to get into like, you know, what terms you're bidding on or, or what have you. But how can somebody get comfortable that there would be enough demand to turn on a digital marketing funnel and start getting leads in their market?

[Rick]

You know, that's a good question. You know, Jim's run the playbook in Arizona. Not as much with performance marketing. He's. He's like the radio, TV ninja. I don't know how he still produces the amount of leads he does from tv. Tv. Like, I've run almost the exact same ads just with Florida homes on it instead of, you know, Denver homes or whatever. And I'm just not nearly producing the same amount that he does. So it's, it's market dependent too. But the, the.

[Ryan Adams]

That's a key point that, that's a very important point that it is market dependent. So. So what works for you in digital marketing in Jacksonville won't necessarily work for me up here in Northern Virginia.

[Rick]

I mean, I hesitate to say that it's like gonna vary that much. Like the guy, the guys in Boston, their, their cost, their roas is through the roof. Like they're their performance marketing campaigns. Or I'm like, dude, how do I get cost of marketing that you guys are getting, you know, when they turn theirs on? So I think there's a messaging component there. I think there's a brand awareness component. Like they've been there for 20 years. So when they turned on performance marketing, like, people might have seen them on TV or radio, and now it was like, oh, there they are again. Let me, let me, you know, the call to actions there. So it's so nuanced. I think it should work and could work anywhere. It's really the ability to follow through. One, to track the data. Is it working or not? What is my cost per appointment? Is everything in my marketing spend and funnel aligned with the P and L line item and the marketing spend? Is it all lining up? One, and what is? And being able to like track that and say, see that quickly and make it, make a decision on that, and then two, the leads are going to come. You got to be able to sell it, you got to have your program in place. You got to have the, the sales program in place. You got to have your pricing locked in. You got to have good salespeople that know that, know what they're doing and know how to close, you know, at a, at a good rate, 40, 40%, you know, or, or higher. You can produce all the leads you want and you will in whatever business that you're trying to do. If you don't have a good sales program to follow through with those leads, you're, you're not going to make money, you know, and you almost go out of business like me.

[Ryan Adams]

One other thing that strikes me about Rhino Shield and, and your digital marketing here, Ryan, is that we hear in home services, particularly in the, in the hot and very crowded home services like H Vac Plumbing, that those are very competitive online, that everybody's just killing each other for, for leads and that those industries all recognize that it's. That, that it's all about a basically digital lead generation game. And so, and there's a lot of private equity in that space, so there's a lot of, there's a lot of money that can just outcompete you on, you know, bidding for leads online. Doesn't feel like, it feels like this is still a pretty unsophisticated market to compete on digitally. Which is happy for you.

[Rick]

Yes, no, absolutely. You know, and I would say that a lot of those, you know, you can leverage like a lot of demand, demand capture platforms like Angie and all those other things for, for potentially even H Vac and, and other things like, and bathrooms and doors and windows and stuff with, with our business. Those things like, don't really work because people are looking, people who are on those platforms are looking to compete on, you know, for businesses that are competing on price. And so we've positioned ourselves as like just something different. We do see other painters, like, doing the digital marketing thing and it's awesome. They're doing a really good job at it. So. But yeah, I would say yes, it's, it's relatively unsophisticated. Like, you'll see the, the big franchises are kind of doing it now and they have a little bit of a playbook for it. But at the end of the day, we have a different value proposition than them. So someone sees us, they're seeing the same painting ads, they're in the market market and they're going, wait, 25 year warranty. What's this about the insulation? Oh, you know, kind of weatherproofing, hurricane proofing Let me call those guys too, you know. And so it gives us a chance to get our foot in the door and show, show who we are.

[Ryan Adams]

Great. Ryan, close us out with the, the Vision looking forward. So where do you think you can get this? So, so let's first of all, 1.2 million. Understanding that maybe you're not going to do that every month from now until eternity, but that is what that would be 14 million, 14.4 million if annualized. If you hit that. So you're probably a ten million dollar business now. Fair to say.

[Rick]

Yeah, we're shooting for ten million by end of calendar year, but one million dollars kind of the floor now with our program. We're moving into West Palm next week. So excited about that. And we got some other potential like kind of minor acquisitions, other territories that I won't mention exactly where on, on the podcast. But we'll, we'll be in a couple new markets here in the next six months, I think. So I'm pretty excited about that.

[Ryan Adams]

And are you thinking, are you just thinking, you know, six months in a year ahead or are you thinking, do you have a grander vision here for five and 10 years?

[Rick]

I do have a grander vision. You know, I, we, we want to be the largest, you know, exterior home coding company in the, in the country. And so that's our 10 year vision. We run the EOS model. That's what's on our Vision Vision tracker organizer for that, for anybody who runs eos, that, that is what it says on there and how we get there, what that looks like, you know, do we franchise out our platform, you know, under the manufacturer? That's been an idea. I don't, I don't know. Or do we just bring it all in house? Like look at Premier home Pros. Those guys are, those guys are building a, you know, West Shore homes like behemoth like bank basically overnight. Right. Or so do we just figure out a way to keep it in house and I don't know, we don't know exactly how that's going to play out. We have some ideas, but it just starts with really hammering in on the processes. We just rolled out our brand new sales training process with our first class and you know, guy went out yesterday and he's one for one. He closed right away. Right. So like developing a repeatable process for training our people, whether it be in the op side or sales side, is like really what we're really focused on right now. And once we hone that in, that'll give us the ability to scale and so tbd. We'll see how fast we can move.

[Ryan Adams]

Cool. Well, really exciting the progress you've already made, Ryan, especially just having to go from a big decline and some fetal panic to figuring out what was broken and correcting it and being off to the races. Thank you for sharing it with us with such transparency. If people want to reach out is LinkedIn. Does that work for you?

[Rick]

Yeah, yeah, LinkedIn's great. We're happy to connect with everybody. I'm sharing a couple nuggets now and again, mostly on things I screwed up. So if you like hearing some of this stuff, I'll share some stuff on LinkedIn. But yeah, please connect with me, DM me. I'll help out where I can.

[Ryan Adams]

Super. Ryan Adams, thanks a lot for coming on Acquiring Minds. And congratulations again.

[Rick]

Thank you, Will. I appreciate it, man.

[Ryan Adams]

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