← Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
#163 - From $7 Million to $140 Million: The Ultimate Blueprint for Growth
00:34:59
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- [00:00]
A
So when we set our first 10 year BHAG, it was $100 million.
- [00:09]
B
You cannot fix what you don't know.
- [00:11]
A
A CFO can literally only do their job if the books are clean and are trying to plan around Google no longer being the dominant search engine next year. Recently we've been experimenting with lead aggregators and one of the ones I'm most excited about is equivalent company called Modernize. So what Modernize does is they do direct inbound calls for home improvement. So it's a direct phone call booking which is way easier to book and has a much higher book rate than an Angie's List or something like that where you have to sort of recontact them and try to find that that customer. Modernize has a direct connection to our call center. So that's been a huge win. It also has some of the services that we've really struggled to get good leads for water heater replacements, H vac units and water damage restoration and water qual. Those ones have been challenging for us to get leads and Modernize has been a really great partner for us. So make sure you check out modernize.com.
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B
Welcome back to Own and what's going on, John?
- [01:13]
A
This year we're actually doing okay, I think probably a little bit better than last year. But today we were going to talk short and long term planning.
- [01:20]
B
Well, yeah, let's, I mean let's not skip over that because that's not a small item. Like what do you mean when you say long term planning? What are you planning and how are you planning? Like definition to start long term planning.
- [01:31]
A
Is just like what are we going to do? And it could be what are we going to do next year? Or is it could, could be what are we going to do next three years or five years or 10 years or 90 days. And I think developing a muscle around planning and then tracking against that planning has been a big win for us. It. We've gone through a ton of iterations. I remember I have this picture that she, she retired. But my old bookkeeper used to send to me like once a year because I think it shows up on our Facebook like feed or something and it was like me laying down on the floor. I was really tired. It was like being, you know, I was joking. I think I was 25 or something. I don't know. During our first annual planning session and we were like a 1.7 million dollar company and the way we think about annual planning now versus annual planning then pretty different.
- [02:23]
B
Yeah, I can imagine. I would love once you finish this, I'll explain, like, what we do, and then I want to see what you do.
- [02:29]
A
Yeah, I mean, I think, you know, it started off as annual, then we added. I don't remember when we added quarterlies. I think it was kind of early on, and I must have read a book or something that was like, do an annual. But yeah, I mean, you know, 1.7 million bucks. And I think the first one we did, we did a swat, which is a Strengths, Weaknesses, Opportunities and Threats. We're nine years or eight years into doing swats now. Like, we feel real comfortable with them.
- [02:54]
B
Do you find that valuable? Oh, yeah, yeah. I. I mean, we might. We might need to start that because, you know, it's one of those things where, I don't know. I just. I try. I see a lot of these. The corporate jargon, like, the swats. I'm like, oh, man, I'm not going to do that. Like, it's so corporate. It's so, like, that's why I got out of. I'm not working at a Fortune 500 company. I'm not going to do a swat. Like, we all know what everything is, but maybe it's. It's a size thing. Like, once you get to a certain size of business, like, they're actually become valuable.
- [03:24]
A
No, I think it's a focus. I think it's a focus thing, and I think that could be any size. So.
- [03:29]
B
Yeah, but I know who my, like, competitors are. Like, we all know who the competitors. I don't need to do a SWAT to know my competition. Like, we're in the business every day. I know who my competition is. I know what my strengths are.
- [03:40]
A
So let's. Let's talk about how to do a SWAT real quick. Swat. Strength, Weaknesses, Opportunities, and Threats. So what it is, is you do this cor. Do like a piece of paper or chalkboard or something. Like, you divide it off into four sections and you list it off. The idea is strengths just get you in the mindset. They're like, hey, these are the things we good at. Pure ego boost that. You literally do nothing with that section. You just. Like, I've done. I did. I remember this was like four or five years ago. And I was, like, really frustrated about this one thing. And I was like, we don't have a lot of time. We were in a quarterly. We only had like four hours for this quarterly. Like, we don't have a ton of time for this. So we're just gonna skip strengths and. And threats. We're just doing weaknesses and opportunities. Huge mistake. Yeah, like absolutely huge because. And like halfway into it I was like, God, you guys are really grumpy. And I was like, oh, it's because we skip the feel good part, the whole freaking exercise. So yeah, strengths is purely like pat yourself on the back. Here's what we do better. Strengths are internal. So like here's what we do better than that guy. So we're three trade. We have seven days a week, you know, whatever weaknesses are. What do you do worst internally than your competitors? So hey, we. Our retainment is bad or our training isn't what it needs to be. Our Google reviews are bad. You know, whatever. Find something that you're not doing as well as your competitors. Opportunities are things internal or external that you could be doing that you're not. We've had buy companies on opportunities, we've had launch electrical on opportunities. We've had a lot. And then threats is purely external economy. You know, like you literally can't control it. And that's why threats are sort of like what we use threats for is, hey, over a three year time period, I need to keep this in mind. And we're gonna, we're gonna be thinking about it, we're gonna dictate some strategy. So like one of our threats right now is search. Like Google Search. We sort, we expect and are trying to plan around Google no longer being the dominant search engine next year. And that's a big deal. That's a, that is an existential level threat for home service. I'm sure there's gonna be a replacement.
- [06:03]
B
But like how do you win the.
- [06:05]
A
Replacement Google Search becoming what it is today. I think most of the, most of these whippersnappers listening don't know this, but like Google Search the way it was today and like GMB, stuff that was introduced in like 2015 to the trades Y and before that you had giant companies surviving off tv, radio, mailers, all that stuff and gmb, lsa, ppc, all that stuff like driving real SEO traffic. That was what made the home service market today. So that l. That that was an existential threat, the addition of Google Search. And now everyone's used to it a decade in and that's being threatened. So I see this as much of a existential threat as I recognized 10 years ago was, hey, this is where incumbents get passed because whoever gets better at the new thing.
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B
Yeah.
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A
Is going to win definitely. That's the threat. So that's something that we need to be keeping in mind for the next 30 days and the next five years, because that's going to be a big top of mind thing for us.
- [07:03]
B
And so you're doing that quarterly or you're doing that yearly?
- [07:06]
A
Our approach to planning is right now we do a yearly and three quarterlies, and then we do weekly touch bases and we do daily pulses against those weeklies. So it is a. And now we actually just added monthly, basically budget reviews. And the, the bigger we've gotten and the more complicated we've gotten, the more, the more we've added to try to like figure out if we're on pace or not and then help catch problems if we're not on pace. All the way down to like every day. Like what's our, what's our net margin every day? What's our gross margin every day? Like we're looking at it every day.
- [07:43]
B
How do you're dictating everything though, off the yearly? Correct. Because like the way we do it is we start off at the end of the year, the very beginning of the year where we go through. And the way that we do it is we get the bookkeeper managers together and we, we set a goal point on where we realistically think that we will end next year. So if we say, hey, we want to do $6 million next year, $10 million next year, and then we work our way back, okay, $10 million is going to be what split based on our current split, how much plumbing, how much H Vac, and then we split that down even farther. How much h vac install vs how much h vac service? Well, if we want to get this many installs, how many flips do we need from our text versus how much marketing dollars do we need? And then we split that down. Okay, we need to actually hire 3, 4 techs to hit that. But we also, that would mean that we need to triple or quadruple or whatever our lead leads in, which cost us this much per lead. And so that's how we kind of work our way back. It's just like boom, boom, boom to get to the, the brass tax of it.
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A
Yeah.
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B
And then we, we, I think that's great. We split that up on a monthly based on historicals from a percentage base. So like February we talked about would get like a 10%, but we want to beat that this year. So we would say, okay, well, we need to at least shoot for break even. And that would be X amount. And that's, you know, instead of being 1 12th, it's probably going to be 1 18th or 1 16th. And then June July, August, obviously do better, etc. Etc. So that's how we are looking at it, is that. And then we, you know, hey, well let's make sure that we're calculating this based on efficiencies and on how much percent of labor we want each revenue to be like and so on and so forth. Is that how you guys are looking at it?
- [09:46]
A
Yeah. So like that's a combination of annual targets and like a budgeting process, which I think is great. And then like annuals was the first thing we did too. So when we first launched we're doing an annual and then I think we started a weekly huddle and that was like eight years ago. And then like it's fluctuated here and there. I feel like we have a really good cadence now. So the way we do it is we set a 10 year term and a lot of this is out of eos, if you guys are using eos. But we set a 10 year target and it's meant to be Vegas hell. And the 10 year target is just like, here's my, here's my BHAG, here's my big hairy audacious goal. It's meant to be scary, it's meant to be intimidating. You're not supposed to know how you're going to get there. So when we set our first 10 year BHAG, it was $100 million by 2031. So right now we're targeting 140.
- [10:42]
B
I mean that's not unachievable for you. I feel like, like there's a path there. Your big goal in 20 years wild.
- [10:51]
A
When we said that we were, it was 2021 and we finished 2021 at $7 million. So we had $93 million of a gap. We weren't even eight figures yet and we felt like we could do nine. So like pretty cool. It looks like we're on a path now, but three years ago when we said it was like we were like, I don't even begin now we feel like we. I still don't know but like I have a direction.
- [11:23]
B
I mean I'm with you on that one. Like we set a 20 million by 2030 in last year at 1.5. Like yeah, talk about a big goal.
- [11:34]
A
Like yeah, but I think it gets you thinking down the right angle. So you take this 10 year target and then that's static. So my 10 year target by end of 2032 is 140, 560 people, whatever other qualifications you want to put in there, then you do A rolling three year. And the rolling three year is like, that's sort of where the opportunities and threats come in a little bit more. So like that might be a new market, big acquisition, Google search being a problem. So you have this rolling through here that's a little bit more direct. So like, hey, I want to be 140 million down to I need to be in two markets or three markets. Then you go down to annual. And annuals are really similar to what you just described. Hey, in order, in order to be on track for a three year. And if we're on track for a three year, then we're on track for our 10 year. What do I have to do in the next 12 months? So you like bite size a little bit more. So like our, our budget for next year is $31 million. We set an EBITDA target, we set a revenue per employee target, we set a bunch of other qualitative targets. Like we want X amount of members, we want X amount of reviews, and then we add the budget on top of that.
- [12:47]
B
Well, can you, can you talk about some of those, those other targets? Because that's a good point. Like I haven't thought about that. Is, hey, how many reviews do we want to generate? Like what is our, how are we going to strengthen?
- [12:58]
A
When we first started, when we first started doing annuals, a lot of the focus was purely the qualitative. We didn't talk budgets at all. We actually just started talking budgets and numbers in our annuals. We would like, we would do what it sounded like you did, which is like, here's the North Star, here's what we're going for, 10 million bucks or you know, whatever, but not much of like a what else. So some of the examples would be like, hey, we got to do a deal this year or I have to figure out how to launch a new location or we need, we want to double our membership this coming year. We've talked about moving.
- [13:33]
B
Speaking of that project, big, big heads up, your boy secured an extra 4,000 square foot, 2,000 square footage of warehouse space and another like thousand square foot office space. Three, four offices and another thousand square foot of warehouse space. So we already. 6,000 square feet come January.
- [14:03]
A
That's great.
- [14:04]
B
So nervous about that though. Like that's, I mean that has shot up our like a percentage wise of our like real estate or like you know, rent.
- [14:14]
A
Yeah, rent.
- [14:14]
B
Rent to revenue ratio. But like we have to like there's no other way. And they're like right attached to our current building.
- [14:22]
A
So that's great.
- [14:23]
B
I'm so excited. Like, there's no moving necessary. We're gonna be able to like, lock down all of our inventory and tools, which has been a nightmare. And we have extra offices because we are tight. We are tight in office space right now. So.
- [14:37]
A
Yeah, more. That sounds like a huge one, dude.
- [14:39]
B
Big players.
- [14:40]
A
Yeah, that sounds like a huge win.
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B
I'm excited.
- [14:44]
A
But yeah, so like, something like that would go on our annual of like, hey, we're out of room. What do we do? We need a solution.
- [14:49]
B
Yeah.
- [14:50]
A
Sometimes it's buying trucks, sometimes it's launching a new trade, sometimes it's hiring a manager. It's like, what are the other aspects that we need to do this year in order to be on track for a three year? Which keeps us on track for a 10 year. Then we take the one year and we break that down into quarterly. So like, hey, in order to hit our one year, here's what I have to do in the next 90 days. I have to complete this project. I have to hire a purchaser. We have to perfect our financial reporting to operations. Like, these are some of our real rocks. We added some more real estate, so we have to get that online. So, so those are. So those are like the next 90 days. And then you do this weekly meeting us called Now 10. And you basically just, am I on track for my 90 day goal? You do a lot of other stuff in there too, but am I on track for my 90 day goal? Yes, no, yes, no, yes, no. And then it all sort of becomes this one cohesive planning unit. Now we're like three years into it. We're getting really good at it. And I think the addition of budgets, which is like, that's a totally new discipline for us, has made a real impact.
- [16:00]
B
Well, I can also imagine too, like, you guys have revamped your account. We've talked about this. This year you revamped your accounting. Like, you have more managers in place to be able to pull this data and like, it no longer falls. Right. Historically, it'd be like bookkeeper, manager. That's who's collecting all this data and making those decisions. Now it's like, hey, I have a mastermind within my business of really intelligent people who know their stuff and they're able to generate realistic goals and how plans to get there.
- [16:30]
A
Yeah, yeah. What I definitely didn't understand and I'm. I still don't feel like I do, but I think I'm like, it's conscious incompetence now. I had no concept of how much a strong accounting department would add to the business purely from just like acts like fast access to data. Like, I totally get it now. I don't think we're like fully dialed and locked in, but we are way better. And just to like give an example, like our gross margin right now, we're going to cap out. But like, over the past five months, as we've continued to dial in our daily, weekly and monthly reporting, our gross margin has gone up a percent to a percent and a half, month over month over month. Like, we just continue to get better. Material keeps going down, labor keeps getting control, we get closer to revenue, budget, I mean, and we just keep getting it.
- [17:26]
B
That makes so much sense though. Like, you cannot fix what you don't know. And without that good accounting partner department or at least good bookkeeper, like, every step in accounting helps you get to like, hey, yeah, we need to know. And we just don't because that's my. Our problem right now is we are trying to find these buckets, but these buckets are hidden behind like a layer of no accounting. And so the minute that you can do that, you can actually start like attacking rather than just blind attacking, because that's what we do. It's like, hey, well, you know how much. What percent of our job revenue is, is. We don't know. So how do you attack that? Like, you can go to your vendor and say, hey, can we get 1% off our thing or can we get a bigger rebate? And yeah, they'll probably do it, but is that the best use of time? Who knows? Yeah, when Your labor is 17 too high, like you should be attacking.
- [18:22]
A
Yeah. Wilson just wrapped up the year in the low 20s and we were pumped. I mean, most of the industry did not have that same level of success. And when I think about who was a huge partner for us, like top of the list was service scalers. We've been working with service scalers for a couple of years now, and they've helped us drive best in class SEO, best in class PPC and dominate LSA and GMB marketing. They've been a huge partner for us and we're really grateful for that partnership because it's helped us to take down 46% year over year growth. As we think about our budget next year, we're aiming for the low 30s. And one of our most strategic partners is going to be service scalers. They're going to help get us there, they're going to help us stay ahead of AI. They're going to help us Keep our SEO relevant. They're going to help keep us on the top, exactly where we want to be. So make sure you check out service scalers.com. sam and his team over there is just a bunch of killers. So thank you, service scalers, for your partnership. Yeah, I think we've. We've gotten better at Merge. But no, I mean, it's. I think it's real. And then we've added more stuff to it. And, like, the big thing now is, like, how do we keep it simple and how do we not, like, drown in meetings? Because you can't make an impact if you're drowning meetings. But, like, how do you also give the people the information they need? So we're, like, experimenting. We're. I think we're two months in now. I have a 20, 30 minute, like, departmental financial check every Monday with all four departments. And it's like, all right, hey, electric. Like, hey, here was your gross margin by tech last week. It was your revenue by tech. He was your closing rates. Who was your options. He was your revenue, your sales, like, the whole bit. And then it's like, hey, this guy, he didn't hit it last week. Like, what are we gonna do? And then we're gonna go do a ride along, or we're gonna respond with this training or, you know, we're gonna do whatever. And then that's been a huge win. And that's departmental. And now we're getting ready to add that on a senior leadership basis or like a cost center basis. And actually, this one I'm kind of excited about because it's like, we're going to do this weekly pulse check for call center and HR and marketing. It's like, how many leads do we need? How many did we book? What was our book rate? And just sort of this, like a more intimate accountability than a weekly or monthly meeting. And also, hey, this is the budget. Are we on track or off track? How do we correct it fast enough to make a difference? So if we're halfway through the month and we're 20% behind on calls, what are we going to do? Well, I don't think we're fully there, but, like, I feel like we're like leagues ahead of where we were even just eight months ago.
- [20:56]
B
Yeah, so I was. I was laughing while you're talking, and it was because, you know, some people are jealous of other people's cars or shoes, but, you know, you're a business owner when. When I'm jealous of your accounting department and your availability to data within your Own business. It's. I mean, yeah, you might feel like from your perspective, you're not where you want to be, but at the same time like everyone else. Oh yeah.
- [21:21]
A
I mean it's, it's leagues ahead of. It's leagues ahead of. Of where I want too.
- [21:25]
B
Cool though. So. And then all that data is helping you to drive this yearly, quarterly, monthly, weekly, maybe sometimes daily data.
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A
Right.
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B
That gives you the targets and lets you know if you're on track.
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A
Right.
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B
What's your advice?
- [21:43]
A
We know like real daily. It's not like a mystery to us of when we hit break even. Like yes, we go into a month with an assumption, but like no, we will actually hit break even today. Like this is it. And being able to confidently say that and being able to confidently make decisions is really helpful.
- [21:59]
B
Yeah. I mean we, we. I joked with you a few days ago about doing, you know, creating a little offshoot business that was for service CPAs or surface bookkeepers. Because you know, realistically that is numbers kind of difficult to get. It's kind of crazy. But yeah, we, we are so working spend working so hard to reach that. So I want to take it back a step. Right. So this all sounds like a lot for I'm sure a lot of people because it's, I mean it's a big deal, but there's also so much to be able to do that. At what point were you able? Like, I guess, what's your advice for somebody to start on this path of budgeting and like how do we dig in and say john, I have a bookkeeper. We kind of look at it on the yearly. Where do I start? We're a 3 million, 2 million, $1 million company. What should we focus on to get the most bang for our buck? Because we don't have this data.
- [22:55]
A
I mean it starts with clean financials. Like how clean is your QuickBooks file? And then how clean are you keeping data inside of service Titan? Like if I look at your closing rate, is it real or is that different?
- [23:09]
B
Get a good bookkeeper. Fractional bookkeeping in housekeeping.
- [23:14]
A
I think it depends on your size. Like the big thing that I'm learning from accounting. Accounting is obviously a cost center and our jobs are to reduce cost centers. But we've intentionally at this point over resourced accounting because accounting has been a pain. Like if you've listened for any amount of time, accounting has been like a 10 year pain point for me.
- [23:34]
B
Yeah.
- [23:35]
A
And the only reason that we're making significant progress over the past four or five months is we are over resourcing that department and that is purely payroll. Right. So we have an accounting manager, we have a controller, AP, AR payroll, five people. Everyone that I've talked to is like yeah, it's probably a person or two too many and I'm like I'm getting stuff done so I guess I just don't care.
- [23:59]
B
Yeah, I mean and for everyone else listening, there are some great over like these I, I know for, for John in your scenario, probably not. But for many other people like the ar, AP payroll, all of that can be outsourced to global talent. Won wonderful global talent that is extremely experienced with Fortune 500 companies. Even like staff accountants. I'd be very careful obviously just because of the rules, regulations giving access to bank accounts, things of that nature with somebody that's overseas and not in jurisdictions of the U.S. however, that being said from kind of like a lower end bookkeeping, arap bills.com management like overseas hires and global talent, there are some really great options and that keep your your well within your financial, you know, point. You could hire three or four of these guys and gals who can handle multiple positions at favorable rates.
- [25:00]
A
So our AP and AR are overseas.
- [25:02]
B
Oh awesome.
- [25:03]
A
For perspective, in house controller, in house accounting manager, in house payroll. Those felt like things. We didn't want to move overseas personally but I do have friends that have overseas controllers and it works great. I just want the ability especially because we're still like, you know, we're coming from a point of like not being strong in accounting. So I want that in person connection to be able to really like drive a difference.
- [25:25]
B
Also from what I found like having somebody, yes technically you can get someone overseas who would understand US tax law well enough that they as a CPA could help you out here. But you know, I feel like that's rare. Right. They're going to, they're not generally going to be U.S. tax experts.
- [25:42]
A
Yeah.
- [25:42]
B
Great bookkeepers though. Great accountants.
- [25:45]
A
What I think it depends on what you're trying to get.
- [25:47]
B
So who's rich has one.
- [25:49]
A
Like there's people that report what happened and there's people that report and can make an impact on what happened. And you're looking, you're looking for the impact. And I feel like it would be really challenging to make an impact on hey, if I missed my materials budget or my labor, tell me what happened so I can start figuring out what to fix like where, where was the problem And I really think that's the thing that you want because I don't think it's it's not especially hard to find somebody to like do journal entries. You just need someone that can be helped, be a partner when you go to fix the issue.
- [26:24]
B
Yeah, I'm. And, but to start though, right? To start, I think that where the starting point is even somebody just to do turn luxuries. Right. Somebody who you, you know, you can get data from and you can start to move in that direction because you're not, you know, you' building the pyramids in one day. You're just putting the first blocks down.
- [26:45]
A
Yeah. And I think the big, the big thing I would encourage everybody to do is like you, there's zero value in a fractional CFO if you don't have good day to day bookkeeping already. So like I will see people, I've done it too, try to hire this fractional cfo. They're going to take your money. Sure. They don't care, but you don't have an accountant yet or you don't have a bookkeeper or you don't have ap. So like your books are a total mess. Like a CFO can literally only do their job if the books are clean and their job isn't usually to clean the books. So you like step one is bookkeeping. Don't waste your money on some fractional whatever. Just get somebody to record the transactions.
- [27:28]
B
Good clean bookkeeping.
- [27:30]
A
And I don't, I don't even think we're totally there. Like we're not like we're still making improvements because I kept making that mistake. I'm like, oh, we'll do this and we'll build a team and you know, whatever. And it didn't work. But we started really moving when we got good clean bookkeeping. Yeah.
- [27:45]
B
So that, that's high recommendation early on.
- [27:49]
A
Yeah. But annual planning, like you can start anywhere with it. I think just with long term planning, what's the, what's the long or short term? Like what's my one year target? What do I have to get done this year? How's it going to impact? What do we want to hit revenue wise? Whatever. You can complicate it as much as you want or simplify it as much as you want. We have had a lot of success with our structure and it helps us like all keep moving. Especially like the bigger the company gets. You know, these, these teams start operating in silos and it takes a, like really intentional work to break down these walls in between the team. So like marketing and call center have to communicate in rhythm and install coordination and warehouse have to coordinate in rhythm Every single day. But they've got their own teams, their own team leaders, their own whatever. And this cadence of communication and this cadence of planning helps you connect the dots. What we've been doing recently, just because a lot of our team is like, we're still new to having fully developed support.
- [28:57]
B
Yeah.
- [28:58]
A
Teams. A lot of what we focused on this year during the annual was like, literally, what are you doing this year? Like, what are you. What's your team doing? Because from an OPS perspective, people move in different speeds. So, like, OPS is focused on today. Right now I've got a job exploding. I gotta go get out there and help my tech. Like, that's what. That's where OPS is at at any given moment. HR is focused on, like, a quarterly goal to increase retention. And, like, if you need help, if those teams collide on a project or on, like, a daily issue, they're not speaking the same language. Like, one is focused in the next five minutes and one is focused, like, six months from now. And you gotta connect them.
- [29:44]
B
Yeah.
- [29:44]
A
And. And it's a. It's a. It's honestly, like, it's a hard t. It's like my part. Big part of my job. We call it the great connector. But a lot of these planning sessions and, like, pulses help keep these teams understanding. What does this team actually do and when I need them, how can I use them?
- [30:03]
B
Communication is key, it sounds like, because each different team, as you start to grow, does different things at different speeds, at different cadences, and connecting all them together and then common goal on a common goal. And so that was what I was going to ask about your, you know, quarterlies or your yearly is right. You're setting these dates. But I think it's. It's also important you're going in behind that. Right. And saying, how do I get there? Like, what do you need to do? It's not. This is not a fluff exercise. We're not saying, hey, we want to grow $3 million next year. It's, how are we going to grow 3 million next year? Correct.
- [30:39]
A
It's tactical.
- [30:40]
B
It's very.
- [30:40]
A
It's really tactical. And that's the purpose. You know, back to our first thing. That's the purpose of the swat, is the SWAT helps you focus. So, hey, here's our weaknesses and opportunities. These are the things we have to focus on, because these are the things that are either going to trip us up or get us revenue. And these are the things that we have to focus on. Of the hundred things going on in our life that we already know every single day there's probably three that are the most important. And this is how you get alignment across five different departments of, hey, we have a really big membership churn problem right now, and that's a huge weakness. And that will prevent us from adding $9 million of revenue in 2025. We have to fix it. Yeah, that's going to take call center. That's going to take marketing. That's going to take every operations team. Like, it's going to involve a lot of people. How do we get on the same page on that, that one thing? So that's how swats tie in. Like, they are. They matter. It is a really helpful exercise.
- [31:35]
B
Yeah. Sound. I mean, it sounds like it. I know I give it some, some grief at the beginning, but, you know, if you're utilizing it as, as a framework to figure out how to reach things and where your opportunities are, then, yeah, you know, it can't hurt.
- [31:49]
A
Yeah. I mean, I don't do a lot of them, but, like, we might do one or two a year.
- [31:53]
B
Well, I, I say, you know, use them as an. In an intentful way once again.
- [31:57]
A
Yeah.
- [31:58]
B
I think if you're doing a squat just to do a swat, it's.
- [32:01]
A
Yeah. It is meant to give you tactical. Here's what I need to fix in the next X time period to get to my goal. So that's, that's how we use it and it works well and it, like, really gets us focused. Now, you can also add, like, voting to swats because, like, if you do weaknesses, like, you might have like 100 weaknesses. Right. 50. It doesn't matter. But, like, what are the four that we're going to build our yearly goals on? Like, what are the four most important ones that, like, will drive will literally stop this company if we don't fix it. So. And you pick them and you work on them.
- [32:35]
B
Awesome, man. I mean, this, this all sounds like we've really hit into the depths of yearly planning, budgeting on a yearly, monthly, quarterly, weekly, and even down to the daily. I love it. I love it.
- [32:51]
A
Yeah, I think we will. I'll report back in April. But our theory is we've gotten a lot better at this, especially the daily and weekly over the course of this year and the speed of our reporting. So we're expecting have a much stronger bottom line in Q1 because we're dialed in. Like, we are locked in on daily numbers. So, yeah, we think we can, like, I don't think it's going to be good, but I think it will be less painful because of how much focus we have on this.
- [33:20]
B
Yeah. I mean, what. What do they say? Focuses W. Oh, goodness, I lost it. Focus is where you. You drive the ball. It's where you really make the difference. Where you're focusing is where you go. It'll be interesting to see. I'm excited. And then, you know, I. My next goal is somewhere along those lines of starting to implement. You know, maybe it isn't, you know, driving deep, but it's. It's saying, hey, let's start doing quarterlies to. To keep up on how close we are to meeting these. Meeting this year.
- [33:49]
A
I think the quarterlies is the logical next step here. Like, hey, we set this target of 6 million bucks this year. Are we on track? Like, we need to do a million in quarter one. Do we do it? Yeah. No. Or a million and a half in quarter one. Whatever. Whatever it ends up being. And what are the other tasks? Like, what prevented us from doing it?
- [34:05]
B
Yeah. How do we get there? Because I think those are good pivot points on a monthly, right? You look at a monthly and you go, okay, did we win? Do we lose? Do we hit budget? Do we not? And then next month, it's like, okay, well, what do we need to change? But really, the quarterly is the point where, like, hey, we are on track for this or we're not. Like, where's the big pivot to make it?
- [34:22]
A
All right, well, thanks, everybody, for tuning in to the talk on budgeting and annual planning. Quarterly planning. Make sure you check out owned and operated dot com. Got another workshop coming up in April, I think, 15th to the 17th.
- [34:36]
B
Question mark, question mark.
- [34:38]
A
But check it out. This will be our third one. It's a lot of fun. I think we already have, like, six or eight people booked, so it should be a pretty good group. So, yeah, check it out. Owner, operated dot com.