← Unemployable with Jeff Dudan
Unemployable with Jeff Dudan
Can You Build A $10 Million Dollar Business Without A Team? #140
00:53:06
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- [00:00]
Jeff Duden
Good day, everybody. This is Jeff Duden and we are on the home front. And today we have Zach Tanner, who is the founder of Painter Bros. Welcome, Zach.
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Zach Tanner
Hey, Jeff. Thanks for having me, man.
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Jeff Duden
Yeah, man, looking forward to it. We've been talking about this for a while. So Zach's story is one of grit. Growing up in government housing, moving around every couple of years, finding his foundation in sports. He was a quarterback in high school, had offers to play in college. But after an ankle injury derailed things, he moved to Utah and jumped franchising. He hooked up with somebody in another business doing painting. And then he said, I think I can improve on this model. And at the age of 19, started Painter Bros. To help franchisees become real business owners and not just stuck inside of a painting business or running a job. And then he has been very successful in creating partnerships with Fortune 500 companies. A real feeder for his franchisees. There's a lot to learn today. Zach, welcome to the Homefront.
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Zach Tanner
Thanks, man. Great introduction. I appreciate all that.
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Jeff Duden
Is all of that right?
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Zach Tanner
Yeah, I mean, it's as close as it gets as the memory can recall.
- [01:12]
Jeff Duden
Yeah, that's right. Well, hey, why don't we go back because you had an interesting early life experience. Can you share a little bit about your family and how you grew up in home service?
- [01:22]
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- [01:53]
Zach Tanner
Sure, man. Yeah. I mean, as a kid, when you're, when you grow up poor, you don't really know you're poor. That's probably the best way to start it out. So growing up, I go, I go visit places when I was a kid and realized, man, that's not what I remembered. So I always remembered a super, you know, happy life growing up, slippers for Christmas, going out on walks, going, hanging out, the neighbor kids. So my mom was a single mom from the time I was, I don't know, eight months old until the time I was about five. So this is my brother who's a year older than me, myself, and then my mom, and we actually started here in Utah, believe it or not. So started here In Utah. Then we moved to Oregon. She got remarried out in Oregon. I think I was five or so. Moved over to Florida for school, for employment, moved to Las Vegas. And this whole time I was like the only white kid that I knew. So anything about places where I lived, I was always. I was, I was a minority. Sports were something I, I really was drawn to. And I was usually the worst kid at sports growing up, so I was always competing. I wanted a seat at the table, I wanted to play. And so most of my, my childhood, I was outside playing. We didn't have cell phones back then. It was just such a different time compared to what people have right now. A lot of basketball, a lot of football, got into high school. And Southern Oregon was where I ended up for high school. Right. So population like 200,000 in the entire Southern Oregon place. And so it was easier for me to shine coming from. From Fort Lauderdale, Florida, Las Vegas, Nevada. Big schools, big metros, lots of competition. So I made Southern Oregon at home, and I still call that my home to today. We ran the spread offense, which was a ton of fun as a Chip Kelly time. I don't know if you remember when he first started in.
- [03:51]
Jeff Duden
Oh, yeah, yeah, absolutely.
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Zach Tanner
Yep. So that was. He came in and so we started mirroring that and I. I was the same size in high school as I am right now, So I was 6, 2, 2, 25 right around there. So it worked pretty well until it didn't hurt my ankle, which is never fun. Road recovery is actually my second time hurting my ankle. So first time it happened, I was like, I know, problem. Second time I thought, man, I'm going to be slow. So I took a moment, kind of rethought life, talked to God a little bit, and decided it was time to change paths and bet on myself. So I moved out to Utah right after my football season was over. So I was 18 years old. Football season wrapped up, moved out here, worked with my uncle's business partners at Five Star Franchising.
- [04:47]
Jeff Duden
Kind of.
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Zach Tanner
Yeah, I guess the rest is history. After they sold to DWI Group, I. I parted ways and yeah, Zach, so.
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Jeff Duden
Many people hang on to dreams long after they're dead. They chase around a vision of themselves that they had, but it's been clear for some time that it's not going to work out. You didn't do that. I mean, I'm sure you could have found a way to get your ankle rehabbed and you could have gone to community college and, you know, continued to refine your skills, get your Ankle back and then take advantage of some of those other opportunities that you might have had to go play Division 1 sport somewhere. But you decided that there was a different path for you. And I'm interested to know what the factors were in that. Was it economic at the time, like you didn't have enough support to do that and you needed to pay bills, or were you able to really get a clear view, which would be unusual at somebody at that age of, look, I know that here's one alternative path, but here's something else that I could also pursue. And then you were able to make a decision to pursue that. What was your thinking of what led into those decisions that you were able to make?
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Zach Tanner
You know, honestly, growing up in a small town, being the quarterback, being kind of the life of the party, I would say, generally speaking, I was making poor choices. It was really easy to make poor choices. It was really easy to have a bunch of fun. And I kind of hit a wall. And I just looked at myself one day in the mirror and I thought, you know, what am I, what am I doing? I. I can do so much more. So it was one of those come to Jesus moments where it was literally like, what am I going to do with my life? How can I use my life in a good, positive way? So I actually entertained going to college. So I moved out here to Utah. I applied for uvu and I was waiting for that application to process, and then I did kind of what you mentioned. I just, I got out. I think it was probably a napkin or a piece of paper. I started writing down, like, well, if I started my own business, I might make this much. If I go to college, I'm going to have this much debt, this and that, and I was on my own, so I was paying for it. So it's probably a mixed bag.
- [07:03]
Jeff Duden
Yeah, I think, you know, I, I was. I gave a talk this weekend out in San Diego, and one of the things that I shared was entrepreneurs get into business for solving different types of problems. Sometimes it's retirement or education for their kids, or they want a job they can't get fired from. There's all these different reasons, or maybe they just see an opportunity. But, man, so many of us are kind of screwed into existence because we don't have resources and we can't. You know, we, we. We just can't find another way to make it work. So we've got to figure out a way to, to make everything work. It was like that for me when I started my painting business in college. I had a scholarship and that didn't cover me over the summer. And food service on top of a mountain in Boone, North Carolina at the time was going to pay me $3.15 an hour plus tips. I just, I would have been living in my car. So I, I didn't see another choice but to try to go out and, you know, hustle and do a side hustle and it sounds like you had a very similar experience.
- [08:05]
Zach Tanner
Yeah, I mean, I, I, I didn't make it as far as you with sports, but yeah, as far as the work goes, absolutely. It was, it was kind of feast or famine, sink or swim, and, and you learn fast.
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Jeff Duden
Did you have other side hustles growing up?
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Zach Tanner
Yeah, man. I, I started a pool, pool cleaning and a lawn mowing company when I was in like sixth grade.
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Jeff Duden
Okay, so you, you shoot the clippings into the lawn and then go charge them, give them an up charge to clean it. Is that what you did?
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Zach Tanner
Exactly. I would charge my mom to clean the pool now. No. So I went around the neighborhood with my lawnmower for the most part, and I would just knock on people's doors and see if, if they needed their lawn mowed once a week. And I got a little customer base and I was in fifth or sixth grade. That was the first one.
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Jeff Duden
Yep. Early entrepreneurial experiences are indicators of future entrepreneurial success. Okay, so now you've, you've, you've got exposure to the painting business and probably in a great place because I know Scott Abbott out there at five star, runs a good company, you know, very values forward. He probably, you probably saw a lot through Scott and the way that company was run that maybe informed some of your thinking today. Things that you like to emulate, maybe a few things you like to do different. What was it like? What was the decision criteria at that point in saying, okay, I've seen this painting business. I'm just going to go ahead and cast a big vision and just get after it.
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Zach Tanner
Well, I mean, spending time with, with Scott, Chad and Conrad. So Conrad's my uncle. Scott and Chad married my uncle's cousin. So it's kind of like this. Okay, find the family the connective tissue now.
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Jeff Duden
But yeah, that's new information.
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Zach Tanner
Yeah, so, so yeah, I got, I got to know them all pretty well. Kind of saw what they were doing. And yeah, I just, I, I thought probably like every entrepreneur thinks, which is, I can do it better. You're doing it wrong. I've always been a terrible employee because I have a tendency to tear something down and rebuild it. And so I, yeah, I did that and I didn't know what I didn't know, so I didn't even really understand fully national accounts at the time. It was just. I think that there's more to this, that I could do better and when.
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Jeff Duden
So you built it as a direct business first before you franchised it?
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Zach Tanner
Yeah, so I, I built it to franchise it, you know, fundamentally speaking. But it was my, my personal business. I started. I was the painter, I was the guy in the truck. I was painting houses, I was painting buildings. Yeah. Started from ground floor.
- [10:56]
Jeff Duden
What types of things do you feel were going to be different about painter bros? When you, when you first started putting pen to paper and thinking about what it could be.
- [11:14]
Zach Tanner
I thought that we had a really good core culture to begin with. When I sold my first franchise in 2017, I sold a couple like in 2017 and just word of mouth referrals locally. And I thought that the culture was going to be the differentiator. It was a differentiator, but it wasn't everything I needed. I sort of face planted in that effort initially.
- [11:43]
Jeff Duden
So what were some of the lessons you learned early?
- [11:46]
Zach Tanner
Yeah, I learned that you need good tech to manage a process closed loop to help manage growth and scalability. And then I also learned that you needed, we call like the bread and butter business, like the reoccurring revenue that you can depend on, that you can share with people they can build a business off of. I was missing those two things in a, on a large scale. I had a little bit of both, but not enough to, to make it really special.
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Jeff Duden
Yeah, it's difficult to invest in those types of things early. Share with us how you, you know, how you went about at least the software side of the business.
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Zach Tanner
Well, I, I wanted to get to 3 million bucks in revenue when I was 23. I was like my goal.
- [12:47]
Jeff Duden
I said I wanted your location.
- [12:49]
Zach Tanner
Yeah, I've been stuck at 1 1.2 million for a couple years, and the only way I could get there is by hiring salespeople. Right. Because I kind of hit that ceiling of what I could sell and manage myself, or if I hired someone to manage it, what they're able to do. So I kind of hit a ceiling. So my very first iteration of my tech was, was purely an estimation tool that allowed a customer to click, I approve an estimate. And then from there all hell broke loose because there was no management. But at least it got that part taken care of.
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Jeff Duden
Okay, and then what?
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Zach Tanner
So I spent, I spent the money I had on it. From there I learned that there's a whole payment processing side of a business that's pretty important and having that integrated with your estimation tool is paramount. So over about, I guess I'm 30 now, so seven years. I've been building pieces every year essentially to add to this platform. From automated royalty drafting, we own the payment processing portal to cost per customer acquisition. That's creating a closed loop. So it tracks every dollar spent with every customer from a point of origin.
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Jeff Duden
Right. So very customized to your business model. Yeah, yeah, yeah, yeah, yeah. Do you have plans to offer that to other customers? Other independent customers as so running a software business? As a software business, yeah.
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Zach Tanner
I, I hope to share it with people. I think one of the most overlooked metrics that I don't think really had a label quite yet is the cost per customer acquisition. It's the one line item on your P and L that I really think that as a business owner you can manipulate and work towards decreasing a cost on, but you can't really do that if you don't know what it is in real time. So I hope to share that part with people. I think it's going to help a lot of people's businesses grow and diversify.
- [14:56]
Jeff Duden
With marketing, it's often measured wrong because people just with a broad brush, they take their total advertising spend and then they, they divide it into their total revenue. Yeah, well what that doesn't, that doesn't take into account is repeat customers and recurring revenue and things like that. A customer that you've acquired previously that now you're getting additional revenue from on an ongoing basis really shouldn't be in that calculation for new lead generation, things like that. So, you know, getting the ability to get a true number, people are going to say, well you should spend 8 to 10% of your revenue on generating customers. But if you're 50% referral based in terms of revenue or repeat customers, you're actually spending 16 to 20% of new customer revenue. And that's a big difference. And it drives different decisions. And then the other thing is, if people don't understand their true cost of customer acquisition and they don't understand the different value of the different lead sources in terms of average dollar per lead. And so for every lead that's generated from this particular type of lead source, on average, what do we convert into business? So for me that's one of the core metrics is average dollar per lead. And you can only get average dollar per lead if you get accurate data on basically what it Costs to drive customers from those different, from those different types of lead sources. So it really, if you, if you're unclear about which advertising dollars and marketing dollars are working, then it kind of gums up the entire, the entire calculation. And that calculation, in my experience, the conversion calculation of about seven different things all the way from lead through one proposal and the seven steps in between is something that I see small business owners, once they understand it, they're able to scale because now they understand that if the machine works, meaning the work gets produced, the salespeople are being managed, average dollar per lead. Now it's just about saying marketing is not an expense, advertising not an expense, it's an investment. And if I generate twice as many leads and the rest of the machine doesn't break, I'm going to do twice as much volume or, and then you got to look at the different mix of leads. So it's really this very simple math equation. And I've watched business owners over a decade and you know, they'll be doing a million or a million five or a million six and they'll be growing very slowly and incrementally, maybe a couple hundred, 300,000 a year. But when they get this and they've solved all the scale problems in their business, I see them go 5, 10, 15, $20 million. It's pretty amazing. And it's actually simplifying things, slowing down and reducing variables to go faster, bigger. It's pretty amazing. So that's a lot of the coach. We're getting ready to have our second homecoming here at Homefront Brands. And we'll have, I mean, it's our second annual meeting. We had 265 people last year. We're expecting about 475 at our second meeting. I mean this is, this is a company that's, this is a company that's three years old, five brands in the market, number six launching next month, number seven under contract launching in the second quarter next year. And it is very easy for us to get incredibly complex and confusing around things. So, you know, my, my entire 90 minute state of the Union is going to be around clarity, simplification and understanding, you know, what each person in the room needs to do to be, to be doing just, just the right things and nothing extra, you know, so anyway, it's, I use a football analogy called don't get dirty eyes. I don't know if you played any defense, but dirt Dirty eyes is when you're, when you're a safety or a linebacker, a corner. It's like when you're looking, if your eyes are in the right place, reading the right keys, it'll bring your feet to the right place. You'll maintain your angles, your leverage and your responsibilities. If you get dirty eyes and you get caught peeking in the backf when it's man to man or you know, you're, or you get, or you get fixed on an under route, when it's a zone and you're really not reading the quarterback, then you know you're, you're going to be in the wrong place and, and you're going to lose. So I coach our franchise owners to, to make sure that they don't get dirty eyes. Hanging out with the wrong people, looking at the wrong things, reading the wrong metrics, focusing on things that are not going to help them grow. So it's, hey man, all life translates back to football in, in my world anyway.
- [19:44]
Zach Tanner
Mine does too, man. I say the same thing. It's whether you're putting people in winning positions in a company. And I always tell people, are you going to put a lineman as your wide receiver? Someone where they're going to be the most successful. And yeah, I love the football analogies. I think you nailed it with, with some of the things you were saying, especially based around simplifying something. It's, it's really basic math when you break it down and just focus on the little things. I like that.
- [20:15]
Jeff Duden
Yeah, man. First things first, second things never. Zach, what would people say your leadership style is?
- [20:24]
Zach Tanner
Gosh, I haven't asked. I would say I, I am a free spirit for sure. I think my, my company is a place where people can be the best version of themselves and I think everyone is better than me at something, if not multiple things. And I work really hard to find what those things are and give people a huge Runway. So yeah, being free, I guess to do it your way.
- [20:59]
Jeff Duden
Yeah, yeah, man. Give people a huge, I'm like, you give people a huge yard to run around in, but it's undergirded by your values. So what's in, what's out, what's tolerated, what's not. The boundaries of the fence are things we run scaling up. I know a lot of companies run traction. We're scaling up more of a Vern harness strategy method. But everybody knowing their numbers, everybody understanding what the priorities are this quarter. We're actually, I don't know, I have never heard this, but we, we publish by brand our rocks, which are 90 day goals to our franchise owners that we do at the home office. So you know because franchise owners are like, you know, I'm having this experience, I still need this to be fixed or better. So it's important that, like, if, if you're truly, radically transparent, I mean, you could be no more transparent than saying, this is what we're working on this quarter. These are our rocks. And do you agree with them? Do you not agree with them? But, like, this is what we're working on. So they can basically take that and so say, okay, so they're going to be addressing these things right now and, you know, some of these other things, maybe it's going to be in the next quarter. But, you know, we're radical transparency, whether it be in the numbers and the dashboards. I mean, we'll, we'll create a dashboard and maybe, you know, the performance numbers may not be flattering, but at the end of the day, we have to push them out into the marketplace, into the franchise owners, because it's the same, it's the same way that Elon Musk launched rockets. I mean, he would launch rockets. You know, he knew that he needed to launch rockets every day or even every hour to supply Mars. So my son, who is all bought into this stuff, he would, you know, every few weeks he would bring me a video and show me of a, of a rocket taking off and then just going bananas and exploding. And I'd look at him and I'd say, are there people on that one? He'd go, no. Okay, good. But I mean, you know, what he was doing was he was failing fast. Elon Musk was just saying, we're going to learn from our failure, so let's fail as fast and as often as possible. And it's the same thing. Like, if you truly can develop trust with your franchise owners and they believe that everything that we're doing is with the best of intent and in their best of all towards their outcome, it's, you know, I am hyper focused on our franchise owners achieving the outcomes that they have worked for, that they deserve, and maybe even better than they thought. And, but to do that, to go fast with that, we got to have trust. You can't be managing community like, okay, we're pushing this dashboard out. It's not perfect. Here's what we like about it, here's what we don't. But we've got numbers running through it. Let's collaborate and let's get this thing buttoned up and dialed in. And, you know, that's, that's an adult workplace. And quite frankly, I'm too old, man. I Don't want to. I'm too old. Well, you know, I'm, I'm, I'm, I'm too ex. I've been doing this too long, let's put it that way, to be dealing with, you know, overly managed communications between adults. You know, like let's, the work is the work, let's get to the work. And sometimes you get hurt with that. They'll, you know, the wrong type of people will use it against you. The right time of people will go like, oh, this is a, this is a no bullshit place. Like we're just, you know, and, and with franchise, you, you got to have, you got to keep the locker room with franchise groups. You got to have that relationship equity and you know, them knowing how hard you're working and that, you know, it's never going to be perfect, but we're going to try, you know. And perfect is the Emmy of good, is something that, you know, I think good franchise companies find a way to do. Let me ask you about your experience in franchising. I mean you were exposed to a big network and you were that, you know, there are fundamentals in franchising that I think are timeless. And if, when people ignore them, that's when they get in trouble. But then it's also a new time, new technology, lots of AI. So there's new things. What do you think about kind of the old versus the new? How much stuff do you, do you think can, can be changed within the franchise model? And then what are other things that, that you think are, you know, fundamental to good, solid franchising?
- [25:24]
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- [25:58]
Zach Tanner
Oh, I like the question. First of all, we say something in my office. We say compared to what? Whenever someone has a good idea or has something that they think about, the number one follow up is compared to what. And so I like the question. So I think that tech and some different levels of AI are changing the landscape in a big way. I think that automating Data creation through KPIs is huge. I think that that's something that really wasn't there. The way it is now. I also think that the needs of human beings have changed and evolved over time.
- [26:43]
Jeff Duden
Okay.
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Zach Tanner
And there's a new generation of individuals who have, who've taken different seats, who feel appreciated in different ways. And so 98% of my business is B2B. It's, it's relationships, relationships, relationships. And so what I've noticed is, is driving those, those kind of parallels between our people and their, their customers has been fun because you can now talk about things on, on a different level. And we have zoom now. We have, we have teams, we have. Right. Like there's a lot more personal time that you can spend with people that I think is changing the game. I think that, I mean, early 2000s, I guess before Google came out, you had a lot of direct marketing agencies. And then Google came out and it kind of pivoted into digital marketing. In the beginning, even when I started this, I was cleaning house on digital marketing. I was making a ton of money on lead gen. I could buy a home advisor lead for 13 bucks. You know, now not so much now you can buy a home Advisor lead for $200. And, and luckily it's just like yourself. You track that climb, that rising cost, but your cost per job doesn't climb at the same rate. It starts to deconstruct a model. So I think pivoting away from some of the digital marketing has also been a little bit of a challenge because franchisees that, that we have, we have a widespread demographic type of individuals from, you know, 30 year old to almost 60 year old. Right. And everything in between. And that digital marketing component to them is like, well, if I press a button, I should be able to make money, right? Yeah, if I pay money, I make money. And you're like, you know, it works every time. So yeah, yeah, it's, it's, I don't know, I've had, I've had a lot of fun with it, getting to know people. And the world's changed, the landscape's continually changing.
- [29:04]
Jeff Duden
There's a subset of careers and companies that make money in an upturn, they make money in a downturn. They make money whether you make money or you don't make money. And one of those is lawyers, right? If everything's going great, they've got lots of work. And if everything's going to shit, they've got lots of work. If you're, if you're signing new deals, they've got work to do. If you're getting in lawsuits, they got work to do. So they're Billing, no matter how your business is changing or performing. But the other one is really, it's the digital ad platforms. It's Google, it's Facebook, it's Instagram, it's TikTok. You know, they, I mean, can you imagine if all you had to do in your business is walk in one day and say, you know, I'm going to tweak this algorithm just a little bit and people are going to spend, there's going to be a bump of, you know, $400 million that's going to get spent by advertisers before they figure it out and trying to figure it out. And that's just going to be more revenue for us. And the customer is getting no more or no more, less value for it. Getting less value. They're getting no more value. The ad cost is going up where everybody's trying to figure it out. And then all the consultancies around it are, you know, are making money too, because everybody's calling each other to try to figure out how to do it. And all they did was, you know, they just changed it just enough. So I mean, think about that. Like that is, I mean, and by the way, they have our eyeballs that we need. So, you know, this, you know, I had a great business coach and he shared one of the things he said with me that stuck is your job as a, as a CEO and as a leader is to constantly be disintermediating any intermediaries between you and your customer. So, you know, if you can get customers directly and you're not having to go through a broker, a consultant, a Google, an ad agency that's placing ads on an ad platform or a third party lead generator like HomeAdvisor, Angie's List or those types of things. Like those are, all, those are people that are extracting heavy tolls on your customer acquisition journey. And it's, and it's hard, man. Like they've, you know, they've, they're pretty smart from what I understand. And they've, they've figured it out and they make it very difficult for people like us to be able to create new games in new places. But I think some of the things that you're doing, I'd be interested to unpack a little bit your view on national accounts. So with, with my business, my restoration business, I built at Vantaclain, we had national accounts. We were U.S. government, so we had schedules with the U.S. government. So we were a heavy duty government contractor. We did a lot of that. And then we had Big box retailers where we handled emergencies for huge contractors, insurance companies. So we, we did have a lot of national accounts. That being said, you know, you know it was, it was always. We did everything we could not to middle our franchisees and have to do anything for that because then there's a toll to pay there. So. And sometimes you're forced to and it's the best way for it to work. But you know, generally I liked franchise owners keeping as much of the margin as they could. I'm interested to know what you've learned about national accounts because I know it's a big part of your business and you've been very successful with it on behalf of your franchisees.
- [32:36]
Zach Tanner
Yeah man, I mean it's a big question to rewind a little bit. I've been, I've been building this part of the business for about seven years and I started working for companies like Jones, Lang, LaSalle, CBRE, Cushman, Wakefield, M Core and what I noticed all these companies had in common was they weren't doing millions or hundreds of millions, they were all doing billions. And I thought there's a lot of money in national accounts if these guys are all swimming in billions. So I, I understood their kind of org charts on a level during COVID they all went into extreme panic mode because no one wanted to work for them. We, we got super popular and so I learned a lot really fast. Learned how they managed accounts, learned, learned the customer acquisition side of it, the biz dev and I thought to myself and most people don't know us about the business but I thought to myself why not just franchise the account management side of the business? Most, most people think that I get national accounts then I just send the work down to franchisees to do right. That kind of seems like a no brainer but what I actually do is I connect franchisees to manage their own national accounts. So I wanted to build was our own ecosystem where we're cross pollinating all over the country with just Painter Bros. Franchisees. So I've got my, my franchisee in Fort Worth. I'm flying out there next week. He's onboarded with a bigger company and the in the dollar tree range, I guess you can say nationwide. And so he's running the dollar tree account for us and he's sending that to franchisees all over. I've got a franchisee in Denver who's running the federal accounts. He's sending that all over my personal franchise I own. We, we run a few larger ones as well and that's that's really the, the fundamental core of the business is franchising account managers to run interesting national account and leverage the franchise platform for execution. And so yeah, that's, that's generally it.
- [34:52]
Jeff Duden
And then, so then you've worked out the economics and people seem happy with it.
- [34:57]
Zach Tanner
Yeah, yeah. I mean it's, it's, you can always take as much as you can try and take or you can come to an agreement and say that hey guys, this is going to be our price book, our pre agreed upon pricing for X amount of years and let's make the most of it and let's make sure we maintain relationships. And that's really what it's about. It's relationship maintenance. Doing what you say you're going to do, being the same guy tomorrow that you are today. And the wheel keeps going around.
- [35:25]
Jeff Duden
Nice. Yeah. And I think, you know, one of the things about national accounts because national accounts are very attractive to prospective franchisees. They like to see the big names and they, oh well, they've got work with this company and that company and all of that. So it actually helps to attract quality franchisees to the system. On the other hand, you know, you got to decide what kind of lions you want in your system. Do you? Because you know, do you want zoo lions, right that are going to sit there and they're going to growl at you until you put of some, until you slide a stake under the door or do you want hunting lions that you know they'll eat, they'll be opportunist and they'll eat but like when they're not being fed, they go right to hunting mode and they don't complain much about it because you know, one of the things that happens, and we did see it with us when we would have a lot of national accounts hit a franchise owner that was brand new. So for the first year they were just doing national account work. Well, when that project was over and it was the end of that national account, they had not learned how to hunt. They hadn't done the, they hadn't done the exercises of going into the marketplace and with their origin story, well rehearsed meeting the 100 people that they need to know that are going to turn into 20 customers referring them business on a regular basis, one or two jobs a month. I mean you can, in our business you could back with the restoration business. I mean 12 referring partners of a certain categories could give you a million dollar business for you know, you don't, you don't need a lot of people. You just need the good ones that are consistently, you know, you can work with and that are consistently be giving you opportunities and, and putting you into jobs. So you know, it's, it's always interesting. I mean you don't, you know, while franchising is a distributed network for the production of work, I mean that's what we are. So we do need lots of locations here at Homefront Brands and we do need. Because once we have national coverage then we can hold ourselves for national accounts. Our temporary walls business is particularly collaborative between the franchise owners in this because we're working for builders like you are that are doing, you know, major contracts and all that kind of thing. So we actually created a technology environment, a CRM that they all share and we were able to. Yeah man. So they're all in it. So it's like they're all, you know, they're all, you know, 70 different salespeople inside of that but everybody has visibility across the network. And then you know, we've just got the math worked out how it works where, when jobs, wherever jobs land and what the deal is and it's going exceptional. Again, radical transparency like give grownups the, in all of the information and the tools they need to be successful and they'll, you know, they'll figure out the game if you make the, you know, if you, if you make the game, you know, stupid or, or un confining or, or you know, what happens is, is then the, the model doesn't get velocity. Yeah, I mean you really need to take all of the friction out of the process so people feel, you know, trustworthy and incentivized to go out and make great plays and they can trust that wherever the play happens that the right thing is going to happen. So again, it's not easy to do. It takes, it takes for us it took a little bit of. It was a really interesting rethink about national accounts based on our first experience running national accounts for Advantaclean building that business. So I noticed in an article, Zach, that you mentioned something about pre developed markets. What does that mean?
- [39:07]
Zach Tanner
So in markets where we don't have coverage per se with franchisees, we self perform. So like in the Midwest this year I didn't, I didn't have franchisees in Missouri, in, in Kansas, Nebraska. And so it turned into self performing and so so you know, I think history maybe did 3 or 4 million dollars of revenue without having franchisees in those areas. And so we do that kind of all over the place. And so that when franchisees do plug In I would say somewhere between 80 to 90% of the time, they have their first job scheduled before they've come to training. And their very first job is a national account job because we've already been doing work in that area.
- [39:59]
Jeff Duden
Awesome. Yeah, we did that as well. We, and it was very powerful. You know, we have a big long term national account going at this VA hospital or this medical facility and it's in the, it is in the market that you're looking for. You have to be careful with earnings claims. You can't promise them any kind of revenue. So we didn't, you know, we actually, in our, in our sales process, we never talked about the national account piece. What we did was. Yeah, I mean, and what. But during validation, they would hear about it from the franchise owners and they would ultimately come back and ask questions sometimes at Meet the Team Day and said, well, you hadn't really talked about national accounts, but all of this stuff is going on. We'd be like, look, you know, yes, national accounts are a great thing, but you know, the very highest percentage jobs, the ones that are going to keep you safe and build a great business are the ones that, that you get in your local market that are, that you source directly. And national accounts, you need to look at the gravy on the top, like build a great business and you know, the gravy on the top, but the peanut butter doesn't always spread evenly. So you might get a million dollars in national accounts this year and you know, might not get any next year. So you can, you can't just, you, you got to build your business to keep yourself safe and then, you know, when, and of course we were disaster response business. Right? So anybody that wanted to travel for a disaster, I mean, we had call center protocols set up so we could, we could take tens of thousands of phone calls and we had the ability to isolate the biggest, best opportunities. So we would, we would have crews on the ground from corporate that would set up a command center and then as the franchisees would come in, they would take work orders and they would go out. And then we had the mechanism inside our franchise agreements that of disasters that met certain requirements. The territories would open up for 30, 60, 90 days and then we would declare it closed so the local franchise owner doesn't, you know, because by the way, I mean, if you get run over by a hurricane and you're, you're a two or three million dollar business and now there's, you know, six billion dollars of work to do, you can't do it all. So, you know, we, we would let people eat, but we also, you know, we would turn to pineapple upside down and we wouldn't let them overstay their welcome. So you can't, you can't set up a shop in somebody else's territory, but you can certainly come and we would manage those things. So those, those were other unique scenarios that are unique to the disaster response business that were fun and profitable for the people that were willing to show up and do it. And, and yet they didn't have to create fixed overhead, long term overhead to participate in these things. They could take what they had. We had relationships where they could, we could rent equipment in excess. We had really good rates. So they could show up, bring their crews, do the jobs, do some extra rental equipment, make a good whack, and then don't overstay your welcome because your overhead's burning every day. Like when, when a disaster's over, like it's over and the mistake some people make is hanging out at the prospect of a couple more jobs and then you've just spent 10 days of overhead and you should have left. So we, we got very attune at like when the warning signs were clear, if you were willing to listen to them. So when you start, you know, you would be getting thousands of phone calls a day saying, can you get to me? Can you get to me? And then as soon as you're calling back your list and people are saying, no, I've got somebody. No, I've got somebody. No, I've got somebody, like, it's time to start thinking about finishing what you got and getting out of there.
- [43:35]
Zach Tanner
Interesting. How did you guys, out of curiosity, how did you guys manage the, the float time for cash? Because most of your guys's work was probably, it was insurance money, I would imagine.
- [43:49]
Jeff Duden
Yeah. So a couple of different strategies. If it was a, if it was a commercial project that was, you know, going to be insurance paid, I mean, what we would do is we develop the ability to create daily billing.
- [44:10]
Zach Tanner
Yeah.
- [44:11]
Jeff Duden
So, okay, so, you know, we showed up at the Hurwitz Mintz furniture store. Good owner. We were referred in by almost a family member to them. You know, they had coverage, but they also third generation, they had tons of money. So they're just like, we're willing to pay to get our, to get back open first because, oh, by the way, everybody in New Orleans is going to need furniture. So we want to get open. We, we want it, we want you to start right now. So, you know, we created A billing, I don't know. And they had a, we did four of their facilities, I think, but this, this was their big one. And you know, several floors, hundreds of thousand square feet. I'm like, all right, well you know, we're going to, the first day we're going to do this, it's going to be 26,000. The next day it's going to ramp up to 50,000. Next day it's going to be 65,000. And we would just build a seven day rolling budget out of what we were bringing in and say this is what it is. So, you know, we need a check. And we would get checks, you know, maybe we would get a startup check and then we would reconcile the bill and present it to them and say this is what actually happened versus the budget. So we're only billing you for what happened. And then if you're upfront with people like that, they'll pay you. If you're going into a residential place, I mean, it might be like you've got to give me a deposit and pay me when we, when we pull off the job. But we will give you all the insurance paperwork that's required. But we're not going to be chasing around your insurance company for 120 days to get paid because you will run out of cash now. Oh yeah, yeah, if, now that was our recommendation to our franchisees and you do the best you can with it. For us, with some of our corporate stuff, I mean we would get into, you know, it just government stuff in particular. It's not going to work that way. They're not going to be writing you checks. They're not going to have an adjuster writing you a check on the hood of a car. I mean, I've gotten a half a million dollar check on the hood of a car. That's awesome. Start up a project, you know, and it's just like, okay, you know, you know, but we had a relationship, but still, you know, we just have a, we had a one page signed work authorization and we, you know, some rough estimates of the cost and they said, all right, well half a million dollars, get you started. And the guy whipped out his checkbook and that's the half a million dollars. And, and we got after it. But, but we would end up carrying some pretty corporately for us, our work. There would be different circumstances where, I mean, we've had receivables as high as like $4 million, you know, from a storm event. And you know, and we've. And you're paying right I mean, by the way, you're paying food trucks. You're, you, you have a 55 gallon drum full of rice, a 55 gallon drum full of chicken. You are feeding hundreds. I mean, we would have 800 people working in a day sometimes. And you had to feed them. You had to, you had to, you had to keep them safe. You had to outfit them with PPE and protective equipment and you also had to have somewhere for them to sleep. So all of those things. I mean, running a disaster was like, it was like running a military operation. It was, it was a blast, you know, and, and done, done right. Also very lucrative. And you're helping people that need it because we always followed through there. There are scoundrels that respond to these things. And, you know, so I always felt good, even though we're asking these people to pay us, like, I knew that we would follow through on the work and give them a good value.
- [47:32]
Zach Tanner
No, I like that. I, I was curious. I hear a lot of different ways that people manage that, that part of the business. And one of the ways, maybe some of your viewers will find it beneficial. I work with a factoring company. I don't know if you're familiar with that. Probably.
- [47:50]
Jeff Duden
Yeah.
- [47:52]
Zach Tanner
And it's just, it's really changed the business in general because they, they do a lot of our AR now. They'll go, they'll go handle that component of it. You get 24 hour prompt pay and, and then they also educate your brand on, hey, this is, this is what your cash flow analysis looks like. This is your forecast. This is called, you know, and so I, I found that super, super beneficial and I'm trying to turn a few folks onto it at least at some of these conferences I go to when they're, they're struggling with, well, I can only do one job at once because of this. So hopefully that helps people as well.
- [48:35]
Jeff Duden
Yeah, I mean, you know, and generally factoring in my experience is, you know, if you did a, if you did a $10,000 job, they're gonna, they will pay you, maybe not all of it upfront, but they'll start to make payments to you. But like they're gonna take 8% or some, some number like that and it's gonna be a fixed fee. And, and you know, it's like, okay, well you're gonna get 92% of your revenue. And so sometimes it's worth it, especially because, look, cash is like oxygen, man. Like, you don't really realize how bad you need it until you don't have.
- [49:10]
Zach Tanner
Any amen to that, dude?
- [49:13]
Jeff Duden
Yeah. And then everything stops. Your heart, your, Your head, your brain, like your business, like every, like, yeah, like it's, it's your, it's your oxygen, man. And, and, and, yeah. So. Well, cool. Well, hey, Zach, what, what can you share with people personally about yourself, what you like to do, any family stuff you care to share? Yeah, I'm doing. You're not working when.
- [49:42]
Zach Tanner
I mean, I'm always, always working on a level, but I try and do things that make running a business seem easy. So I do a lot of. I'll do, I'll do a lot of elk hunting. I'll go pack it in 10 miles, camp out there for a week, come back and running a business seems super easy after you do that for a week and you pack out a 500 pound animal. I do a lot of fishing with my kids. I've got two little kids, Bo and Oakley, and I love spending time with them. I love being a dad.
- [50:15]
Jeff Duden
You say Bo and Oakley?
- [50:17]
Zach Tanner
Yep.
- [50:18]
Jeff Duden
Okay. Those are outdoorsy names, man.
- [50:21]
Zach Tanner
Yeah, they blend in out there. Yeah. Bo just turned 2, Oakley just turned 6. But time flies. I mean, a lot of, a lot of my decisions now are geared towards how can I spend more time with them. And it's because I have so much fun doing the outdoor stuff. Outside of that, I'm not a huge city person. I mean, I, I take a night under the stars in a tent over a night on the city any day. So I'm pretty. Pretty basic, I guess. Pretty simple.
- [50:52]
Jeff Duden
Nice. So you're 30 now?
- [50:55]
Zach Tanner
Yeah, actually I turned 31 tomorrow and everyone keeps reminding me I'm not 30 anymore. So. Yeah.
- [51:01]
Jeff Duden
Well, happy birthday. Thanks, man.
- [51:03]
Zach Tanner
Yeah.
- [51:04]
Jeff Duden
Yeah. All right. Well, we're, we're, we're October 28th recording. So that's the, the 29th is your birthday.
- [51:11]
Zach Tanner
That's right. That's right.
- [51:12]
Jeff Duden
There you go. So you've had a lot of success and you've traveled a lot of miles early. One of you started early, you know, you started at 19, correct?
- [51:25]
Zach Tanner
Yeah. Yeah, yep.
- [51:26]
Jeff Duden
So you've, so you have the experience now of building a very successful business both direct and inside of the franchise space by the time you're 30, what, what will be. And this business is going to run its course. You know, you might run it for another 20 years, you might run it for another. You might merge it with somebody. Like there's lots of different options for people that build good, stable businesses with great franchisees to give the franchisees more opportunities. And, and so you, you've got a. You've, you've put some cards in your hand now and you've got some optionality on how you play it. But is there, you know, do you have a clear vision for who you want to be going forward into the future from a business perspective?
- [52:14]
Zach Tanner
I mean, fundamentally, I'm always just going to be me. But the me side of it, I, I want to leave a lasting impression on, on, I think the economy, I guess. I think that with painting and national accounts, that was a big step. I get a lot of phone calls of people saying, man, that's, that's really cool. You've opened my eyes to doing this and that. I felt good about that. I think my next, the next big thing I want to do is. Is reverse engineer the, the outflow versus inflow of digital marketing and customer acquisition. I've got some pretty cool things in the pipeline right now that I think it's going to be really good for blue collar America. That's probably the best way to say it. And so, yeah, I think, I think the next, next thing in my life that'll be a big step.
- [53:07]
Jeff Duden
Is that awesome? Well, fantastic. I know that you will do great things with it. I've got a last question for you here, Zach. If you had one sentence to make an impact in somebody's life, what would that be?
- [53:21]
Zach Tanner
Just be yourself.
- [53:24]
Jeff Duden
Just be yourself. All right. Yeah. It's hard to do, isn't it, when you, when everybody is. When, when, when you, when you're trying to manage yourself to other people's expectations, you end up living other people's dreams and it never works out.
- [53:39]
Zach Tanner
Amen. Yeah.
- [53:41]
Jeff Duden
All right. Well, this has been great, brother. Anything else you. Anything else you that I missed?
- [53:47]
Zach Tanner
No, I mean, I just. I sincerely appreciate it. Thanks for taking some time and have me on the show.
- [53:52]
Jeff Duden
Yeah, man. Thanks for coming on, everybody. Zach Tanner with Painter Bros. Fast growing company. Check it out. And this Jeff duden with Zach. And we have been on the home front. Thanks for listening.
- [54:10]
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