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Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
#249 How to Build a National Septic Pumping Empire (The 2025 Playbook)
00:58:40
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- [00:00]
A
Septic is a black box to people. They have no idea what they're looking at. They don't know anything about it. We see very few people try to fix stuff on their own. And so that is your lowest hanging fruit.
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B
Well, the pumping is like easy money.
- [00:10]
A
It's easy money. Anybody can do it. And then you have the install side of it. That can range from $12,000 one day job up to $2 million job. It's going to take about two years.
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B
That's crazy.
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A
In Austin alone, just in Travis county, they'll do about $200 million worth of septic installs this year.
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B
Wow.
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A
If you find any legacy company in septic, they're a seven figure company. They do not do advertising. They just don't need to.
- [00:33]
B
Yeah. The cost per lead for septic is probably 10.
- [00:35]
A
If you do not have some type of background in scaling, attract and retain top employees, this probably isn't for you.
- [00:47]
B
Welcome back to Owned and Operated. I'm your host, John Wilson. I run a $30 million home service company up in Ohio and today I have a really fun guest on. We don't get to talk about this industry very much. I have Micah Findlay from home field who's building a first national septic. Welcome to the show.
- [01:05]
A
Thank you for having me, man. Really excited to be here.
- [01:07]
B
Yeah, this is, this is fun. Septic is like, it's a funny business. Yeah. It's getting seemingly from my perspective, getting more and more attention, more and more energy. And it found you on Twitter and you're, you're building a, like a network of septic businesses. So I would just love to hear more about you and your story.
- [01:29]
A
Yeah. So, yeah, I'm from Waco, Texas, born and bred. I've been there. I'm like fourth generation from there. My dad's in franchising, so that's where I got my franchising background.
- [01:39]
B
Yeah.
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A
And then my business partner and I started up a landscaping company when we were like 15. Did that through college, sold it, went to college, and then I got out, did banking for a little bit, but I got right into franchising in the home services space. Neighborly had just bought the grounds guy. So they had launched that. Yeah, they were looking for a couple of young guys who had college degrees in business and had done landscaping before and that they could pay pretty cheaply. So they found my, my partner Jay and I. So we both went to go work there pretty much at the same time.
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B
Okay.
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A
So we spent about five years helping them bring that brand down from Canada. And so we really learned about supporting franchisees and we did everything. We did the training, the onboarding, the marketing, we did bids for people, we did all that type of stuff. So I really learned how to build out systems and support for small business owners and then got the opportunity to jump over to a restoration company. Did that one for about five years. We took that one from 15 locations to about 250. We were doing about 150 million in, in total revenue there.
- [02:38]
B
Yeah.
- [02:39]
A
Built out their national accounts department. That was fun. And then after about four or five years, we got bought out by a private equity company. Stayed on there for another couple years. I'm probably not a great employee for, for, for, for businesses like that, we like to move fast and kind of break things. So private equity came on. We stayed around for a few more years and then left. And then just wanted to get back into home services. Wasn't planning on getting into franchising. Just really wanted to find a cool industry to get back into. And so started doing some research, Found a guy who was trying to franchise a, a septic company. He was having some struggles. So that's how we really got into the industry. And we a year learning. So we went to all the big conferences, started getting our licenses, talking to anybody in septic who would, who would hold a conversation with us. And yeah, about a year ago we launched Home Field to be the nation's first septic franchise. But more than a franchise really, a national septic brand. As you said, a lot of people are getting interested in septic. I think the market has changed. We kind of did a thesis for our investors whenever we got into this game.
- [03:45]
B
Yeah.
- [03:45]
A
And couple things about is Covid pushed a lot of people outside of city limits. So you're seeing a lot more people build in not rural areas, but on the outskirts of towns where there's not sewage hookup. So you're seeing a lot more septic just come on board. And the demographics of who own these homes and businesses are much different than it was 20 years ago.
- [04:03]
B
It's not farmers, it's not rural. This is wealth.
- [04:06]
A
Yeah. No, everybody I know that's in Texas that built a house in the last five years. I mean it doesn't matter whether they built a half million or two million dollar home. They're all on septic.
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B
That's interesting.
- [04:15]
A
And so the demographics has really changed and. But the industry itself hasn't kept up with that. Most businesses you see are either. Our big joke is everybody in septic has a million dollar business. Because it's very easy to get a million dollar business. You buy you a couple pump trucks and you got a million dollar business. Not a lot of businesses have hit the 7, 8 figures in it because to be able to do that, you either have to be in a really high growth area, very dense and do a lot of pumping or you have to be able different lines of services. Which as you know, takes a very specific kind of business owner to be able to do that. And so we just didn't feel like the kind of the legacy owners out there were really meeting the needs of what the consumers are looking for. And so we said how do we take our expertise as helping people build and grow businesses and add on capacity and do that. But we need somebody on the Septic side. So we went and found two amazing partners. They're co founders with us. Both of them have been at septic for 20, 30 years respectively. And so we put all that together and a year ago launched. Launched Home Field.
- [05:17]
B
Yeah. Are you still running your business on pen and paper or a clunky software? FieldPulse is the top rated field service management platform that saves you five to 10 hours a week. It syncs with QuickBooks and it puts scheduling, invoicing and more all in one place. FieldPulse users grow 78% a year on average. Book your demo today using the link in the Description and get 15% off an annual plan. Field Pulse, a field service management software for those who need more. And today there's how many locations, branches, brands.
- [05:50]
A
So we have two area developers. So. And I'll keep kind of talking about how we're a little bit different than normal franchises.
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B
Yeah.
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A
So Septic is like a lot of franchises. You know, they hand you a playbook and say follow this playbook to a T. Don't change anything about it. Right, right. Septic isn't like that. Every market is a little puzzle that you got to put together. You have to understand what their licensing is, what the regulations are, where you're dumping at, where you're getting your supplies from, all those different of go into it. So what the. Every. Every region has a little bit different barriers to entry into it. And so what we did is we have regionals so that have already built out the exact model that we want to build in that region. And so as of right now we're focusing on Texas. And then next we're going to kind of the southwest, which is Arizona, Colorado, Utah. So we have our two regionals who are also co founders with us. They Own the franchisor with us. And then we have three open locations and we got our fourth one coming on board. They'll be, we just got their Google plus on like yesterday. So they're left. Their website will go live here in a few weeks. So by the end of the year open will probably have right around 10, which is what we wanted to do in our first year. We're really big on support so we can't put on too many in our first year. So about 10 is the number that we're comfortable with. Next year we hope to get about 15 to 20 on. And again that's most franchises in the home service industry, you know, they want to do 100 or so in their first year or two. We've, because we've done support for so long and we know what it really takes to be able to get people off the ground. We're really slowing that growth back and make sure that every, every individual location we get launched gets to that cash flow, gets over a million dollars and starts bolting on the other services there.
- [07:29]
B
Yeah, yeah. Can you explain like, so we, we have a septic department. We bought it with a business for your like mid-2021. So we've owned it for a little over four years. Okay. And so I'm pretty familiar. But how about we dive into like what is the septic industry?
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A
Absolutely.
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B
What are the different components? Like what do we actually do?
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A
Yeah, yeah. So yeah, most people, as far as they know a septic is just a box in your yard that collects all the waste that comes out of it. It's actually a bit more complicated than that. And where the nuance really comes in is, is the region that you're in. So the type of system that you're on and depending upon the type of system that you're on, whether you're on a conventional gravity fed or like an aerobic system, it's almost two different business lines because they're so different. But the main thing that every single septic company has is a pumping side. So the generally we say that every system has to be pumped three to five times per year. Every three to five years. So yeah, that's just, that's your bread and butter, right? That is that, that is your lowest hanging fruit. Every septic system, it doesn't matter how well it works, is still going to have about that three to five year pumping. So, so that's what we start off in. And again depending upon our region, sometimes we drive non CDL trucks. Some regions we have to drive bigger Trucks, depending upon where they're dumping at. But that's probably what people think about most whenever they think about septic is just the pumping side of it.
- [08:52]
B
Yeah.
- [08:53]
A
Most septic companies out there today, that's what they do. That's what they focus on. And they don't do a lot of the other services, which is crazy for me as entrepreneur and a business builder. The pumping is that one is. As a business owner, it's really hard to be able to really show the customers. Any differentiators between you and the other guy. Right. If I call you and you show up and pump it and it's about the same cost, I have no reason to call you back other than, you know, you came and were able to do all that. Where you're able to separate yourself from the competition is all the other stuff that goes along with it. So in septic, you're going to have repairs just like on H vac plumbing. Whatever you look at the difference, I would say, between septic and, you know, some of the other license trades out there is some. We call them like the Home Depot dads, right? Yeah, the dads that like to fix things themselves. You know, like when I have a plumbing issue, I like to see if I can fix it myself first. Septic is a black box to people. They have no idea what they're looking at. They don't know anything about it. We see very few people try to fix stuff on their own. And so you have a lot of issues because it's not. It is regulated, but not nearly at the level that H vac plumbing electric is. Is regulated at. You have a lot issues with these systems where they put in correctly, are they being used correctly, all those different types of things. So that's probably the next biggest bucket that comes out of that is just the maintenance side of it. So you have all kinds of issues. And then in Texas, we're on aerobic systems. So we've got. We've got pumps, we've got aerators, we've got distribution systems, whether that's drip or spray irrigation, all those different types of things. So, yeah, so a maintenance company. But what we're really focusing on is service agreements. So just like on the plumbing and H Vac side, service agreements is the best thing you could possibly do for anybody that owns a septic. You can normalize their cost, cost of actually owning it. We have different agreements in different areas because what we're trying to do, because what most people do is, you know, they wait until their septic starts Overflowing or their stuff backs up to call somebody. Right. And then they're paying an exorbitant amount to somebody who only does pumping just for that one thing. And they're not thinking about it again until something goes wrong. And so you have that side of it and then you have the install side of it, which I mean that can, that can range from, you know, a $12,000 one day job up to, I mean we do commercial ones. We've. We're in the middle of one right now at one of our Texas LOC. It's a $2 million job. It's going to take about two years. It's 158.
- [11:13]
B
That's crazy.
- [11:14]
A
Oh yeah, yeah, it's crazy. And so, so, so you get into the install side and the commercial side of it too, which nobody really talks about. But I mean in Austin alone, just in Travis county, they'll do about $200 million worth of septic installs this year.
- [11:28]
B
Wow.
- [11:29]
A
Yeah. So all that's here. The great thing about septic public information.
- [11:34]
B
Yeah, that's the craziest part. It is, it is homeowner's, namely public.
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A
Their address, the type of perm thing. So yeah, it's.
- [11:43]
B
We, we thought that was like the wildest thing just for like generating more customers. It's like, it's fantastic. It's all right there.
- [11:49]
A
Yeah.
- [11:49]
B
And so you know exactly who to target. Yeah, yeah, I, I remember.
- [11:52]
A
And we know if it's a good market before we ever go into it. So if anybody is, is interested in market, first thing we do is just. So I've got somebody interested right now up in Lebanon. So the first thing that I started like Ohio. Yep.
- [12:03]
B
Oh, nice.
- [12:04]
A
Yep. So the first thing that we did is there are four different counties around there. So we just start blasting off public information requests to all the different counties and health agencies around there because we have to understand what the market potential is before we go into any new market. So that's the very first thing that we do.
- [12:18]
B
That's hilarious. Yeah, it is. I remember finding that out and we're like, what do you mean? Yeah, yeah, because it's, you know, like there might be some information out there for wells. I don't think it's as thorough. It really is the septic side.
- [12:34]
A
Well, just because, just because it's all permitted and. Yeah. And depending upon the area that you're in, some of it's very accessible. You can literally just go on and pull list and do all that. But yeah, that's the Great thing about it. So we can understand not only types of systems, when they were put in, any permits that have been pulled since then. And so like, one of the things that we're doing right now is because I talk to people all the time that have septic systems and they don't know anything about it. They don't know, you know, they've never seen the designs, they don't know the permits on it, they don't know the last time that it was pumped. So one of the things we're doing right now, we just got our test flight, so we launched an app so that we're able to log all of our stuff in there. So we use a couple, we use Service Titan and House Call Pro. That's one weird thing about us as a franchisor. We don't shoehorn into one software depending upon where you're at, the types of services that you're offering. But either way, we're hooking our app back up to that so we can pull customer notes, videos, when's the last time it was pumped, and then anything that we can find from the city or the county, permits, schematics of any of the diagrams, when it was actually put in, the engineer drawings, we're doing all that just because again, customers, they know it's out there, they'd rather forget about it and pretend like it's not there. And so, and then within that app, we're actually. So you're seeing a lot more systems have mechanical parts to them now. So yes, like I said, in Texas we have the aerobic systems, but even here in Ohio, in different states, you're starting to see more complex systems where they're moving the drain fields further away from the actual tanks. So you've got these pumps on them now. So one of the things we're doing is we're manufacturing our own control panels that hook up to WI fi. And so you'll actually be able to see live. So us and our customers will be able to see live. Is all their systems running? And then they'll be able to get alarms. Hey, if your pump goes out, if it gets overflowing or whatever, you'll be able to get a yeah. Notification right there on your app.
- [14:23]
B
Yeah, yeah. So for the industry, most of them are a million bucks. So if I see a million dollar septic pumping, all they do is pump. Like they're probably not going to do other stuff normally.
- [14:34]
A
So, like the way it was back in the day. So if you think about just a conventional septic system, it Is literally.
- [14:39]
B
It's a concrete box.
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A
It's a concrete box and it goes out to some type of distrib field. So most of all, you have a three by three trench. You got a perforated pipe in there covered with gravel. You got a distribution box that tells it where to go. Sometimes you can change where the actual distribution goes. So there's not a lot of maintenance that goes along with those. So back in the day, you had your pumpers and you had your installers.
- [14:59]
B
Yeah.
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A
And if your system didn't work anymore and you really couldn't repair it because there wasn't a lot of repairs to do, you just installed a new one.
- [15:05]
B
Yeah.
- [15:05]
A
So for the longest time, you had installers and pumpers. Nuts. And again, the pumpers, you know, they did the pumping. The installers were a guy with the backhoe. And like I said, the demographics are completely changing. There's a lot more of these things out there. They're a lot more complicated. They have mechanical components to it now.
- [15:19]
B
Yeah.
- [15:20]
A
And so what customers are looking for, say, because I know people in Texas. I'm not making this up. Guy in Waco that, that I know called to have his system pumped. The guy over pumped it, messed it up, had to call somebody else to be able to fix it. Because that guy didn't do repairs.
- [15:34]
B
Yeah.
- [15:35]
A
Long story short, went down the road a little bit, figured out he needed a whole new system. Had to call a complete other guy to be able to fix it. Right. And so what we've seen is that kind of these legacy companies, they've really stuck to what they know. So like a lot of the installers, they'll actually start manufacturing their own tanks. They have excavation companies. Right. They really stick to the install side and they don't do a lot of the pumping. And so because when you start offering multiple lines of services, as you know, it becomes a back office nightmare. They don't have the tech. So, like in Texas, pretty much every aerobic system has to be inspected three times per year. You have to document it, you have to turn it into the county.
- [16:10]
B
Yeah.
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A
Some of these counties, you literally have to hand walk in their pieces of paper.
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B
Yeah.
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A
And so a lot of people just say, we just don't like dealing with the back office side of it.
- [16:17]
B
Yeah.
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A
But which is crazy because.
- [16:19]
B
Well, the pumping is like easy money.
- [16:21]
A
It's easy money. Anybody can do it. There's most places, there's no licensing involved with it. Problem with that though is that most. So most people who just do pumping since that's their only source of revenue.
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B
They.
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A
And you're always going to have your guys who are going to do it for less. You're going to have the guy that drives his truck himself and it's a lifestyle business for him and he's charging his. His only differentiating factor is that he can charge less than everybody else. Right? Yeah. So you have that and then you have the guys that are really big, some of the PE backed companies that have the infrastructure. These guys own their own treatment plants. Right. So they're trying to get their prices down. So anybody who's in the middle, it starts becoming hard to be able to compete with the guy who's running it out of his backyard or the private equity company that actually owns their own wastewater treatment plant. Right?
- [17:07]
B
Yeah.
- [17:08]
A
And so the only way to really grow that is to add on these additional services. But again, these guys don't like to do it right. Because again, if you're, because you've gone from one single service to four now in each one of these things is a complete.
- [17:19]
B
I mean, as you know, they're totally different business.
- [17:22]
A
Installing a septic system is completely different. A pumping business is a logistics company. Right. I've got to get the point A to point B in the, in the fastest way possible. And then on the repair side, that's when it gets tough too because I have to have technicians that can show up on jobs, diagnose a problem and be able to fit, be able to educate the customer on what it is. Right. Then be able to fix it and be able to get on to the next job. Well, in electric plumbing, H vac, I can go hire really good technicians who have already been trained, who are already licensed to do that. You're not getting that here. I'm not going and poaching other people's employees. And so you have to be able to get really good guys on and be able to train them from the ground up.
- [17:58]
B
Up.
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A
Well, there is no like I've taken all the courses in, in Texas for septic licensing. Yeah, I knew less coming out of it. So what we had to be able to do is be able to build out our own training grounds where we could actually bring technicians in and train them the right way to do it. So in Texas all of our guys go to our area rep there and they spend about a month, I mean literally a month their training. We put them on the install side, we put them on the inspection side, the pumping side and the maintenance side. So you have to be able to train four different sets of services and then be able to cross train all those people. And then you're getting. Because we use our pump trucks as our lead driver. Right. So we show up and then. And the cool thing about septic is there's not upselling in like, because I was in plumbing too. So when we were in plumbing, you know, you try to do the whole home diagnostic.
- [18:44]
B
Yeah.
- [18:45]
A
Talk about tankless water heaters and reverse osmosis and this. Whenever we're talking to customers about things that they need to do. One, it could just be a legal or regulatory thing. You're not up to code. You have to have risers on this thing. Here it is right there. So we're just educating the customer. Two is that it could be an actual. Some type of environmental thing. Right. Or then three, you need to fix this now so it's not costing you more money down the road. And so we, we, we're striving to be able to get technicians on that are able to slow down, talk to customers, diagnose problems, educate them on what they're doing. And then our goal is septic customer. Right. Because we are an all service. We do everything. We're a one stop shop. If we can build that trust with the customer and not just do one service and leave them and you just got to call the next guy. It's. It allows us to kind of get that longer term relationship with the customer. And then again with the service agreement side, people are now paying us to be their, their sole provider of all these other things.
- [19:46]
B
Yeah, yeah. What's a normal. Like what's a good amount of service agreements? When you see.
- [19:50]
A
Oh man. So yeah, like one of our locations in Texas. So get this. So it. And it's done by county. But the majorities of counties in Texas mandate three times a year. Some are even higher, some you have to do three.
- [20:03]
B
Crazy three.
- [20:04]
A
So if you're in like.
- [20:05]
B
Yeah, I think it's two here.
- [20:06]
A
Okay, two. Yeah. So if you're in like some of the areas like the Lower Colorado River Authority, I think that's four times per year. And they mandate that you have a ringer on there. And the ringer says if something goes wrong with your system, it automatically notifies the city so they can send somebody out there. But we have a location, one of our founder locations in Texas, they have about 2100 service agreements and that generates around 60k a month in revenue. If you look at that from the business side, they have one guy in an F150 that's generating $60,000 a month in revenue. And those customers are 95% of our of our customer base. So most of our work comes from there. So that location, I'm not making this up. They have not spent a dollar on advertising in 10 years.
- [20:49]
B
Yeah.
- [20:50]
A
Because they've built up that base of customers. So he only has one non CDL pump truck, but he mainly only pumps for his customers. Most of the repairs are for his customers. Yeah. And so in the Texas area with these mandated ones, 2000 is about where we like to see that at. Yeah, but I mean, shoot, there's companies in Texas that have over 10,000 maintenance.
- [21:10]
B
Crazy. Yeah, I think we're 800 or something.
- [21:12]
A
Okay. Yeah. So that. So anytime. Because anybody that's looking to get into the industry or looking at home field, first thing we do is just a market analysis. Like I said, we go in, we understand, do you have to have service agreements? What's included in the service agreements? And then we actually look up into a heat map. You know, we go pull the numbers in there and throw it out there. And we say, okay, if I know that my business model in this area, especially in Texas, is to pick up service agreements.
- [21:35]
B
Yeah.
- [21:36]
A
You know, and I know that I want, you know, five years from now, I want 3,000 agreements. Well, if I look in there and there's 70,000 systems inside one territory, we know that's good. Right. I only have to get a few people points of that market. Yeah, yeah. In order to be able to get as many as I want.
- [21:51]
B
Yeah.
- [21:51]
A
If that makes sense.
- [21:52]
B
That makes sense. What are you doing? Like, I mean it sounds from. We talked about pricing a little bit, but like maybe that was pre recording. Like what's average ticket. Yeah. For like a pump.
- [22:01]
A
And so again it's going to really depend upon where you're at. So just to give you an example, because a lot of people don't think about it when somebody pumps your tank, they have to go drop that off somewhere. Yeah, right. So most people in their mind it goes away and just gone somewhere. So like we talked to a guy who is in Kentucky who's paying 2 cents a gallon to get rid of his. We talked to a guy up in Spokane, Washington who's paying 34 cents a gallon.
- [22:25]
B
I think we're at 14 for 14.
- [22:26]
A
Okay. Yeah. So it's kind of. Most places in Texas is about 8 to 10 cents a gallon.
- [22:31]
B
Yeah.
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A
If you're disposing of it. So that's your biggest driver there. So you have fuel cost, labor cost, and then your Dumping fees. So in areas that are cheaper, like some areas of Texas, for a thousand gallon tank, which is most tank sizes, you're probably 600 bucks somewhere in there.
- [22:48]
B
Yeah.
- [22:49]
A
You get into states like Washington that have higher cost on everything. You're starting off at, you know, 800 to 1,000 bucks for a thousand gallon pump.
- [22:56]
B
Have you gotten into a low cost state yet?
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A
Texas is pretty low cost.
- [23:01]
B
It's so Ohio like market is like half of that.
- [23:05]
A
Yeah. Okay.
- [23:06]
B
So. And it could be that there's a. It'd be interesting to get the data on that. So we're highest in market and like it's a challenge. So. And like we're highest in market, like 350 bucks. Are you really per thousand gallons?
- [23:19]
A
Okay.
- [23:20]
B
Yeah, yeah. And that's like a price problem because you know, like, like you said, there's not a lot of differentiation. So like where we differentiate is like, hey, we can be plumbing H vac. You know, we do have a full suite of stuff.
- [23:31]
A
Yeah.
- [23:31]
B
We can do repairs, we can do maintenance contracts. The only thing we don't do is replacement.
- [23:35]
A
Gotcha. Yeah, but you got to get those mixed margins in.
- [23:38]
B
Yeah.
- [23:38]
A
In there. Because again, you can make good money if you're just matching your. Because again, it's really hard to be a hyper by a high price competitor on the pumping side. And so we.
- [23:48]
B
There's still guys in the twos.
- [23:49]
A
Oh yeah, absolutely.
- [23:50]
B
Like close by. Yeah. It's kind of wild.
- [23:52]
A
Yeah.
- [23:53]
B
So yeah, we get price shopped pretty. I'm. I don't know.
- [23:56]
A
I don't know how.
- [23:56]
B
You know, I don't listen to the phone calls, but it, it is interesting.
- [23:59]
A
Oh yeah.
- [24:00]
B
So yeah, we're trying to like figure out like dumping fees are only rising. Like how do we, you know.
- [24:05]
A
Yeah. And so we have a lot of different ways that we're looking at doing that. And so I, I should probably kind of go back and say the difference between us and most franchisors out there is we're looking for people that are going to build out infrastructure around to be able like vertically to be able to try to manage their own cost where they can. So we literally have franchisees right now who are looking to build out either dewatering plants or get land application or.
- [24:30]
B
Or, or yeah, one of those guys is land app.
- [24:33]
A
Yeah. Okay.
- [24:34]
B
And like, you know, it cost them nothing, I guess.
- [24:36]
A
There you go. Absolutely. And so that's the problem if you're.
- [24:39]
B
How about. Let's explain what that is for.
- [24:41]
A
Yeah. So the dumping.
- [24:43]
B
Dumping fee is A significant part of the cost of goods.
- [24:46]
A
Yep. Right.
- [24:47]
B
Like on a $50,000 a month truck, you might have five to $10,000 a month of dumping fees.
- [24:53]
A
I would say. Yeah. On. And if you're doing about an average number, let's say 50 to $70,000 per year that you're going to be paying in dump fees per truck.
- [25:01]
B
Yeah, yeah. I think that, I think that resonates. We run two and a half trucks and it's 12 grand a month.
- [25:06]
A
Okay. Yeah, yeah, that's about exactly right.
- [25:09]
B
Right. Yeah.
- [25:10]
A
Yeah. So. So, so, so it's a little bit over that. So. And so I don't, I don't think people realize what's going on. Like in Texas, where we're getting our trucks registered at to dump. They're telling. And this is like the Fort Worth wastewater treatment plan are saying we're about to stop accepting new trucks and you can't bring it in from outside counties.
- [25:27]
B
Yeah.
- [25:27]
A
So we're looking at this very, very closely. And a lot of the private equity owned companies are smart enough, they're actually buying up their own wastewater treatment plants because they're seeing actually what's going on out there here.
- [25:36]
B
We've had the same issue here.
- [25:38]
A
Okay.
- [25:38]
B
Like a lot of like, tightening up. So like, let's explain what this is. So someone goes and pumps a septic. You have to get rid of it. So all of our trucks are somewhere between 3, 500 and 4200 gallons.
- [25:49]
A
Okay.
- [25:50]
B
Like bigger trucks. And you fill up a truck with 4,000 gallons of sewage. It's got to go somewhere. Yep. So you take it to. You can, you can do what's called land spread, which is like literally spreading.
- [26:02]
A
On, literally drive into land. You open it up and you drive that thing up and down until it's all out. Out.
- [26:06]
B
Yeah. Which is funny. So you can do land spread. You can. Like the most common way is a treatment plant.
- [26:13]
A
So like the most city, county cities.
- [26:15]
B
Sewage plant, you go drop it off. It's a giant concrete box. Basically. You open up the end and it just dumps. And.
- [26:20]
A
And they hate septic trucks.
- [26:22]
B
Yeah.
- [26:22]
A
Just so you know, because, like, if you think about it like those plants, I mean, it's a giant aerobic plant. That's it. Yeah, that's all it is. And so they're designed to take in so much sewage. And so the, all the waste coming out of your house is like, I don't know, 95 water. Right. Showers and everything like that. A septic truck is 95 solid waste.
- [26:40]
B
Yeah.
- [26:40]
A
Right. So every time you're going in there, you're like supercharging there. So they actually don't even like it. Yeah. And so every. Literally every area we're going into right now and we're registering new trucks with those pumps, they're regulating or they're limiting the counties that we're. So they're saying it has to be in one of these three counties. And we have manifest and we have to show them. They're saying that. They're saying they're just about to straight up stop accepting new trucks or they're saying that any new trucks are going to be literally triple the price. So we're at 8 cents a gallon. Some of them saying, you know, any new trucks they're bringing on after January 1st are going to be at 24 cents a gallon because they're trying to limit it. And so that's one of like these puzzle pieces that anytime that we have to go into place, the very first thing we do is start calling around to all the wastewater treatment plants. Just. Yeah, because that's. But again, fortunately for us, that's not our only source of business. That's our lead generator. So for us, we're trying to be competitive and we're trying to be profitable on that, but we're not trying to hit our licks from pumps. Because I'm trying to get. Because what the whole goal here is is if you look at a septic, like a residential septic customer, and you look at them on like the lifetime value of that, we're at like, I don't know, 500 to a thousand dollars per year. So if you add in the pumps, the maintenance, the repairs, and then eventually these things fail and you either have to get your field replaced or your whole tank replaced or. Or the entire thing. So if you look at that over about a 10 year, it's about a thousand dollars per year there. So our cost of customer acquisition is lower than any other business that we've been in. So for like digital, I mean, I think we're 10 bucks. Oh, yeah, Yeah. I think our cost per click is like.
- [28:17]
B
Yeah, well, it's a highly. It's an unsophisticated industry.
- [28:20]
A
Absolutely.
- [28:21]
B
So, you know, the fact that you would even market at all is like.
- [28:24]
A
What do you mean?
- [28:25]
B
So to most of the industry. So I remember signing up for it and getting $6 leads and being like, oh, yeah, what?
- [28:30]
A
It's nuts. So like the guy that lives across the street from my dad, right. When my dad moved there, this guy's got the nicest house in the neighborhood. Went over there and started meeting him. I said, what do you do? He goes, I own septic company. Started realizing he's the largest company in the town that I'm from.
- [28:43]
B
Yeah.
- [28:44]
A
And I went to go Google him. Doesn't have a website.
- [28:46]
B
Yeah.
- [28:47]
A
Couple year later, I invited him to breakfast just to go learn more about it. And I said, man, why don't you have a website? He literally, like, no one's ever asked him that he thought about. And he said, don't need one.
- [28:56]
B
Yeah.
- [28:56]
A
He said, you know, daddy got us in the yellow pages in the 80s. Yeah, yeah, be working, you know. And so we go in. Most of these guys, if they have a website, it is very, it's a wix website. They don't do. They're not Google guaranteed. They're not on local service ads. They maybe have seven or eight reviews. So it is the absolute lowest bar that we could even imagine on that side of it. And so that's what we do is on the pumping side, we're able to go in and grab just because we're the only ones showing up. I mean, within six months, we're, you know, we're, we're, we're lsa, we're pay per click. We're in the map pack and we're in the top three. I mean, from our websites. I mean, we, we go really down the rabbit hole on the SEO side of it. So within six months, we're pretty much covering 90% of the top. And so we can get the phones ringing. So we have to figure out how to make sure to take that and be able to turn it into a full customer relationship. Because if I can get a new lead for 35 bucks. Right. And we don't roll any vehicles without charging something. Right. So.
- [29:53]
B
Oh, yeah. Okay, walk me through that.
- [29:55]
A
Yep. So, so on the pump trucks, we're getting a credit card before we're ever rolling. So we let people know. And this is where the confusing part comes in, because we have to tell people, hey, it's X amount up to a certain amount of gallons. Well, they don't know how many gallons it is. We don't know how many gallons it is. So we, so we really have to educate the customer on that side of it. What a lot of guys love literally will do is, hey, it's so they'll, so they'll advertise 300 bucks, right? They get out there, oh, we don't know where your tank is. $150 locating fee, call the customer. Okay. Oh, well, then we got a dig fee. Right. Then we got to do all that. Next thing you know, you're paying over $1,000. And so. So on the pumping side of it. Yeah. So if you call, you want to send a pump truck out there, we're getting a credit card on file. And then for any of our service vehicles, I would say, on average, it's about 95 bucks for a service call, which includes up to about a half an hour worth of. Worth of a technician's time. So I look at a lot of other, you know, just home service businesses or franchises. I saw some guy on Twitter the other day, said something about, you know, the quickest way to lose money is to get a $40 LSA click and somebody to call just to tell you that your price is too high on something.
- [31:07]
B
Yeah.
- [31:08]
A
So we're trying to avoid that completely. Right. And so before we. Before we roll any truck, we're getting a credit card on file, and you have some type of service fee that goes along with that.
- [31:19]
B
That is interesting.
- [31:20]
A
Yeah. Yeah. Because I'm not. The only time that we'll actually send somebody out there without something like that is on a new install. You know, we'll send one of our estimators out there to actually get that. But even then, we're giving them a price over the phone very quickly. Right. In this range, you know, it's normally 10 to $15,000, but we won't know that until we get engineered plans back, so. So, yeah, even on the inside, I.
- [31:40]
B
Think that makes a ton of sense, man. So when we first bought it, like, AR and Septic was one of the biggest pain points ever. And it was sort of like a ridiculous pain point because, like, why would we have AR for $200? So it'd be like 50 grand at a time. And we're like, this is crazy. Why aren't we just paying? And then I ordered a dumpster for my house to go do, like, do a model in my basement, and they wouldn't come out to my house without a credit card. And I was like, well, that makes total freaking sense. So then we did that, and, like, AR was.
- [32:04]
A
Yeah. Our DSOs for most of our companies are five days.
- [32:08]
B
Like.
- [32:08]
A
Like, there is everybody. And even on our installs, I. I mean, we're getting paid 50% up front before we do anything. So. Yeah, that's. That's much different from me coming from restoration.
- [32:18]
B
Totally.
- [32:18]
A
You know, we had negotiating for payments later. Some guys, literally, their average days to pay was like 90 days.
- [32:24]
B
Yeah, yeah.
- [32:24]
A
And we're like, yeah.
- [32:25]
B
And we've gone through that. We have a restoration brand here and we've gone through that. You're great at fixing broken shit, so why not fix your lead flow? Well, Modernize gives contractors predictable, high intent leads without the big marketing gambles break out of the feast and famine cycle and expand into new markets with a steady stream of homeowners ready to start jobs. Now, Modernize is trusted by founders like myself because it actually delivers over $4 billion in homeowner projects started here in the last 12 months. Visit the link below to get started. Okay, so we talked industry, we talked septic business. I want to talk a little bit about home field. Yeah, yeah. What are we doing?
- [33:02]
A
Yeah. The best way to try to describe this is because like we were talking about earlier, most franchises are, here's your playbook, follow it, stick to the plan.
- [33:12]
B
Yeah.
- [33:13]
A
Because we know that the bar is really, really low to get the phone ringing. What we're looking for is capacity builders, so. Meaning that if I can get your phone to ring. So here's something that we really miscalculated whenever we started off is the amount of work we were going to start off with in the amount of installs that we were going to have just from digital advertising. So our very first and new location started up and I think they had 12 installs in their first six months. Yeah. Which is what we were, we were not planning on doing that. Right. So, so what our, what our real model is is start off on the pumping side, do the repair side, build your capacity there, get cash flow coming in, sub some stuff out, do what you can, and then slowly build out from there. So if you look at that, you have to, because, I mean, Jay and I literally took us probably a year and a half before we ever even started thinking about selling. Our first, first one to say, all right, step by step when we bring people on, what challenges are they going to run into as business owners and how do we kind of combat against that and how do we build out the, the support in order to be able to get them through that? So, so that's our business model. So I'm not our typical or our, our ideal owner is probably not a first time business owner. I know a lot of franchises out there, especially in the service businesses, say that they're good for, you know, kind of first time entrepreneurs. If you do not have some type of background in scaling, in being able to recruit, attract and retain top employees, this probably isn't for you because again, we don't most franchises or just most businesses in general, you start up a home service business. The first bucket that you have to get past is getting your phone to ring, right? Yeah, we kind of skip past that step and go straight to, okay, can you get good people on that are able to do this work and do it well and be able to show up for the customers every single time? Those are the people that we're really, really looking for. Because what we're telling people is, listen, we can get your phone to ring 100%. We're going to set up all the technology and get it all to you. But you have to answer the phone, you have to impress the customer and you have to actually get out there and be able to do it. So the way that we built Home field is. So the very first thing that we do is we have a full internal marketing team. We don't do anything. We have outside people, kind of contractors build our websites, but other than that, the people that run your LSA campaigns for you, run your pay per click campaigns, run your social media. Those people sit in my office. So I don't trust any digital agencies out there 100%. I just don't trust them. So we do that 100%. So whenever you come on. So the very first thing that we do whenever somebody comes into the system is one, we have to understand their market. So like I said, we go do all the public information requests.
- [36:05]
B
How many systems?
- [36:06]
A
How many systems, that type of stuff.
- [36:08]
B
I feel like 10%, 8% is like a good, like if 70,000 systems is the number you gave me, like, is that a target? Like what's good?
- [36:17]
A
Yeah, so that's a good question. And it really depends upon, it's harder to nail down in areas that don't have service agreements because you know you're going to have your pumping, your repairs and your installs. So it's kind of hard to know exactly. But yeah, I mean, if you have 30, 40,000 systems there and you're looking at 10%, but you really kind of have to break those numbers down. It's, it's a lot easier to do where there's service agreements because if you have X amount of service agreements, you know, you're going to get so much work out of that off of there. But yeah, we Normally target minimum 30 to 40,000 systems in an area. Our FDD says it's based upon population. Population really doesn't matter. Yeah, like the one we just did.
- [36:55]
B
Number of tanks. I mean, New York City has all all the people notice.
- [36:57]
A
There you go. Right. Same thing like we just did. Collin county, which is north of Dallas, which is McKinney. I mean, it's growing like crazy up there.
- [37:04]
B
Yeah.
- [37:04]
A
I think that territory is like 1.2 million people, but 800,000 of them are on sewer, so it really doesn't matter. So. So it's a number of tanks. So minimum, we like to say about 30 to 40,000. But looked at, like, there's one county in Texas that literally has 70,000 systems. That's a lot. Yeah. So first thing we do is we have to understand the total addressable market there. How many systems are in the ground? Then we move on to licensing.
- [37:26]
B
And this is just septic. This isn't like grease because there's a lot of other things you can pump.
- [37:32]
A
Yes. So our location in Phoenix does. So she is very heavily into commercial. Yeah, we're doing.
- [37:38]
B
We're doing Greece, too.
- [37:39]
A
It's. It's an interesting business, but it's a whole nother business.
- [37:42]
B
It's a whole other business. But, you know, when we bought this thing, I thought this was like. Like, it was crazy because there. Some of these businesses, like, some restaurants, if you're bad. Yeah, right. If, like, there's. If you're not doing a good job with your internal grease, like containment or how you rinse or whatever, like the sewage. The city knows who's dropping grease in their sewers. They know exactly who's driving. There's no freaking question. So they'll come and hunt down the perpetrator of clogging their city sewers.
- [38:11]
A
Yep. And everybody knows exactly who it is.
- [38:12]
B
Oh, yeah.
- [38:13]
A
It's wild.
- [38:13]
B
And they'll make these guys pump like. Like twice a week.
- [38:16]
A
They will.
- [38:16]
B
Once a week. So we have contracts that are like $100,000 a year. Like one business.
- [38:20]
A
What do y' all dump it at?
- [38:22]
B
Yeah, they get the grease. Yeah, the grease gets really hairy.
- [38:25]
A
Okay.
- [38:25]
B
You. Like, one place will accept grease around here.
- [38:28]
A
Do you know who owns it?
- [38:29]
B
No, I think it's the city, but.
- [38:31]
A
Okay. Well, in certain areas, just so people.
- [38:34]
B
Yeah.
- [38:34]
A
If you're thinking about getting into this and we look and, like, because our. The location is in Phoenix.
- [38:39]
B
Yeah.
- [38:40]
A
Fantastic. I mean. I mean, there are homes right in the middle of the city that are on septic because they do vertical trenches there. They do vertical pits. So they do. They'll literally do us four or six foot wide pits 60ft in the ground. And so they're able to do it on a lot less space to be able to do it there. But they do a lot of grease. But the only place to dump grease at in Phoenix is owned by Liquid Environmental.
- [39:01]
B
Yeah.
- [39:01]
A
Who is their competitor out there. Right. And so they have to take 20% of their grease from outside companies. So of course they set their price right at where. Where they're still going to retain 80% of the market. It.
- [39:12]
B
Yeah.
- [39:12]
A
And so Greece is becoming a. Again, if you want to get into it.
- [39:16]
B
It's hard.
- [39:16]
A
It is very, very hard because a lot of the times the place that you're going to take it to is owned by your competitor.
- [39:21]
B
Yeah. Yeah.
- [39:22]
A
So yeah, so we do that.
- [39:23]
B
We actually didn't get to talk about that, but I do. I'm going to plug that for later. Like I want to talk about like the infrastructure of building out the treatment plants.
- [39:32]
A
Yes. And so that's. Yeah, we do. We, we need to talk about that because I mean we looked at this. Yeah, it's a. And so that's, that's.
- [39:40]
B
How much, how much is it? Like I'm in Ohio, like what should I expect? 100,000?
- [39:45]
A
A million? Oh, I would say over a million. It's not. So like our partner in Texas, he is. And so like this is what's weird about septic. There's not a septic store that you go buy your parts from. Right, right. Very few places have actual. And whenever you do, you're paying really high retail prices for it. Most of the time you're buying it from a distributor who is one of your competitors.
- [40:08]
B
Yeah.
- [40:08]
A
Okay. So our partner in Texas, he's the, he is the infiltrator distributor. So if you go build a wastewater treatment plant, you could literally buy it from. From infiltrator. He knows how to do all that. The problem is, is the environmental side of it. So you have to get sign offs from the cities. You have to do ecological surveys. You have to do all that to actually build one of these things. Yeah, maybe a million dollars. But all the other stuff that goes around it probably I shoot it could be up to $5 million. And then it depends. Some of them can process grease, some of them can't process grease. So we look at it on a spectrum and say on one side you have land application. That's the easiest, lowest cost thing to do there. On the full other side you have a full on wastewater treatment plant. It's like a mini version of like what your county uses or something. Then you have a lot of different things in between there. But the people that we're bringing in, we're Telling all of them, we need to be looking at this and you need to be thinking about how you're going to keep vertically integrating and if you need to buy your own land to do your own land app or that type of stuff, you need to be thinking ahead of this right now because these are barriers that you're going to keep facing up against as you keep growing. Because where you're going to dump this stuff out is one of our major concerns out there.
- [41:13]
B
Yeah, I mean I think the obvious, the obvious problem with septic is what you just said, like the capex requirements to do this. I think it's a good like if I look at, hey, why has this industry been ignored? Yeah, like that's going to be it, right? Like PES has historically. Like there's a Wind river or Wind River. Yeah, yeah, yeah. And like, yeah, they bought a, they bought a lot. There's the environmental thing. They, you know. Yeah, totally. There's a few consolidators but not much.
- [41:43]
A
There's a handful of.
- [41:44]
B
And it's because the trucks are $200,000. I mean maybe you can go if, if you're going on the small ones and you're just like doing small grease traps or like porta Potties or something you can do. I mean you're 100 grand but like yeah, this is some real capex. And then you're adding in like hey, let's go buy some land.
- [41:59]
A
Absolutely.
- [41:59]
B
Go buy like let's go build a million dollar facility. Like this is real cat.
- [42:04]
A
And, and you're talking about CDL drivers and stuff there. And then if you're on the install side too. So like in Texas, man, if you're doing install installs, you need to have probably a 12,000pound excavator.
- [42:14]
B
Right.
- [42:14]
A
Because you got to have a rock hammer.
- [42:16]
B
Oh yeah. Ours was crazy. Yeah, we got rid of it because we stopped doing the installs. But yeah, it was, it was a lot.
- [42:20]
A
So you know what it is. And so, and so that's what most guys are using now is most guys are using an excavator and a skid steer. So now are you going to bring those on two different trucks? Okay. So now I've got two F350s and two, you know.
- [42:30]
B
Yeah, I mean our, our septic department, you know, when we were doing installs had 400 grand of equipment. We sold it all off.
- [42:38]
A
Absolutely.
- [42:38]
B
And now we just run three pumpers. But each of those pumpers is $220,000.
- [42:43]
A
So you can imagine why it's hard to get. And again, just not. Every franchise is just not made for everybody. So if you take somebody who is, you know, they were in marketing last year and they have, you know, a couple hundred thousand in a 401k that they're going to do a rollover, this probably is not for them because of just the capex requirements. So we do everything that we can keep.
- [43:02]
B
How does this roi? Like, walk me through the math. So you're gonna be like, hey, this is gonna ROI for you.
- [43:07]
A
Yep.
- [43:08]
B
Like you need to spend a million dollars on a treatment plant.
- [43:11]
A
Yep.
- [43:11]
B
So a million dollars on four pumps.
- [43:13]
A
That'S like a five year. So we're kind of doing two different things at once. We, we want to start off as small as possible with this little capex. Right. So that's literally one pump truck. Yeah. So like our location in Phoenix, she subs out all of her installs. They pretty much do installs just for her. But they own their own equipment.
- [43:30]
B
Equipment, yeah.
- [43:31]
A
So she's at about four and a half million dollars. And she owns three pump trucks, three mini excavators. And when I say mini, I mean like KXO 8.
- [43:38]
B
Yeah, yeah.
- [43:39]
A
Like little ones. And I think they have one service truck.
- [43:41]
B
Yeah.
- [43:42]
A
So she does not have a huge arsenal of assets there. And so what we're trying to do is get people in because we're all about roi. Right. So, okay, how much money am I actually going to have to put into this thing? So normally your truck starts at about 180,000. If you get a smaller non CDL truck, all the way up to 250,000 for about the, you know, 3,500, 4,000 gallon trucks. You need that and one service vehicle to get started off on the treatment plant stuff. What we're talking about is five years down the road. Right. But we're not saying anybody has to come in and build their own treatment plan or do their own land application site. But we are bringing in people that are thinking, okay, what are my costs right now? And eventually how do I get those costs down? Can I pour my own tanks? Can I treat my own waste? Those type of things. And so whenever we look at a region. So like we were talking to a guy in Kentucky. They're paying 2 cents a gallon to be able to get rid of this stuff.
- [44:33]
B
Amazing. Yeah.
- [44:34]
A
He doesn't need. And he's got four different dump locations. He doesn't even need to think about it. We're talking to a guy up in the pacific northwest. He has four different dump stations, two of them are open 24 hours. They're not super expensive. He is not thinking about that. Certain areas of Texas, same thing. Other areas of Texas, like the county below us, which is Bell county, which holds Fort Hood, which is a massive army base down there, Their sewage plant will not take any waste from anybody. So those guys are literally hauling their waste to different counties.
- [45:01]
B
Yeah.
- [45:02]
A
To be able to do that. So when we open one up in Bell county, we're going to have to think, are we doing transfer stations? So, like our location in Phoenix, her issue is that the dump station there takes forever. So if you're thinking about a pump truck, what we don't want that truck doing is not moving and not pumping. Right. We want it pumping, and we want it pumping as much as we can. Well, if it's taking you two hours at your dump, it's not. The actual cost per gallon is that high. It's waiting there for two hours every single time that they go. So for her, what we're looking at is buying some land, doing. Do you know, like, frac tanks are.
- [45:37]
B
Yeah, a little bit.
- [45:38]
A
Yeah. Just big mobile kind of holding tanks. So we're looking at doing those so that her guys can. Can pull up, blow off, and just keep on going.
- [45:46]
B
That's what we do. Like, you probably passed our tanks.
- [45:49]
A
Okay. No, I didn't even see him. I didn't even know that y' all had a septic company until. Until he told me.
- [45:53]
B
Yeah, we. We have.
- [45:54]
A
Have.
- [45:55]
B
We used to run, like, five tanks. I think now it's like three.
- [45:57]
A
Okay.
- [45:58]
B
But, yeah, we inherited that system from the company that we bought it from.
- [46:01]
A
Okay, nice. Yeah.
- [46:02]
B
And most of it's, like, grease loading. You have to dump off the grease, and whoever's gonna make the grease.
- [46:06]
A
Right, you go. Yeah. Because certain places will accept them mixed together. Certain places won't. And so there's all that. And so, yeah, it's just a. I'm. I mean, we have one guy right now who's going west side of Austin. And I mean, we've been working through this for six months.
- [46:19]
B
Yeah.
- [46:20]
A
Because of. Land is expensive there. Where's an office out of the dump station is on the other side of Austin. So you're literally driving through Austin traffic every time that you want to get over there. And so the way that we look at it is every single area that you go into, there's these little mini kind of barriers everywhere that you go. But if we can get past those four or five small barriers, we're immediately going to Set ourselves apart from the competition. And so that's what we're thinking about. So we kind of run it in two different areas. One is what's the, what's the least capital that you have to inject starting day one in order to get this thing up off the ground and cash flowing? But at the same time, what are the things, you know, you're going to be running into two, three, four, five years down the road and how do we start doing that right now? So our company in Georgetown, same thing they are. They're already meeting with the city and figuring out, hey, what are, what are different options for land application, that type of stuff there. So that as we continue to grow and they say, okay, we know that one of our problems is we're sitting at the dump for too long. How do we go and build some land and build a transfer station or, or, or something like that? So it's not the ramp up you can actually get in. I mean, for a couple hundred thousand dollars, right. It's not that much. You finance your truck, you're putting, I don't know, 30, 40,000 bucks down, you get another truck, you're putting, you know, maybe $15,000 down on that $50,000 franchise fee and then another, you know, 100,000 in working capital. Yeah, that's just to get you up and started. But like I said, we're trying to get, get that pump truck going, get the cash flow coming in, get it over a million dollars and then from there, do I want to go into Greece? Do I want to go into portables? Do I want more install? Do I want to go into the commercial side?
- [47:52]
B
Yeah, kind of a nuanced question, but you, you use the word capacity builders. Do you have anybody running like a 247.
- [48:00]
A
Kind of something we think about.
- [48:03]
B
A lot is, hey, I invested a quarter million dollars in this truck. Yeah, it should be probably running 24 hours a day like it should.
- [48:10]
A
We're literally working on that right now for our Phoenix location because it's just.
- [48:14]
B
Like, like you've already made the investment. Let's just staff it up.
- [48:17]
A
And so that is what. And so when I say everybody has a million dollar business, that's they get two or three trucks, they run, you know, eight to five, five days a week. So in Phoenix, that's what we're looking to do right now is how do we actually run a crew during the day and then a crew to go do Greece at night so we can just keep those trucks running. So you hit the nail on the Head you have a $250,000 truck. How do I keep that thing doing nothing but pumping and pumping as much as I possibly can? So because she does a lot of grease, that's how we're looking. Can we do nights, weekends, that type of stuff? Put, put those in there.
- [48:50]
B
A, you know, 4:00am to noon, noon to 8. Even like a two shift.
- [48:53]
A
Yep.
- [48:54]
B
Because you can still pump people septic at eight. Like they don't.
- [48:56]
A
Absolutely. Yeah. Most of what we're trying to do on that site is the grease. And then we do have some, we do have some weekend stuff. The last time I was in Phoenix, somebody called the owner there and said that they just had a fire and water. All this stuff came in, something happened to a septic and it was, I don't know, 7:30 and they need to get it pumped. She has guys that are on 24 hour call. So she called him and they were out there in about an hour and a half. Half in Texas though, since they don't do a lot of grease. No, they are pretty much eight to five over the weekends. There's, there's, there's not a lot of emergencies other than I can't flush my toilet right this second. We can send a pump truck out there, but it's not a lot. But yeah, we're trying to. On the capacity side of it, it's really about how do we keep those trucks moving constantly. And that's one way that we're looking is just more shifts on 100.
- [49:44]
B
What is a piece of advice for somebody interested in the septic industry? Like they just spent 40 minutes listening to us. Like how can they get started?
- [49:52]
A
Do your homework. That is, that's just the number one thing. So first of all, like I said, put out your public information request, understand what your total addressable market there. Start calling your competitors. What are they pricing for pumps, what are they pricing for installs, what are they pricing for repairs, all that type of stuff. Look at the, at the licensing requirement. It is different state by state. Texas, it's much harder to get your license than it is here in Ohio.
- [50:15]
B
Ohio was easy.
- [50:16]
A
Ohio is very easy.
- [50:17]
B
It was like a 30 minute test I took on a Thursday.
- [50:19]
A
It is open book test. And you're, and you're like in Texas to get your full installer license takes about a year or two years to be able to do that.
- [50:25]
B
Oh wow.
- [50:26]
A
And you have to be able to train underneath somebody else. Like in Texas.
- [50:29]
B
That's crazy.
- [50:29]
A
So when I talk to anybody about septic, I'm like, okay, first I got to sell you on the industry, right? Just that. And then I have to sell you on why home field, right? Because, like, I don't look at. I have a lot of people that call me that are interested in buying franchises. You know, like, I had a buddy who called me, hey, I'm interested in buying the golf simulator franchise. And I was like, okay, just full stuff. Stop.
- [50:49]
B
Yeah.
- [50:50]
A
I go, this is the way you should evaluate any franchise. Evaluate the business model yourself in your area, in your region, strengths, weaknesses, do a SWOT analysis, put together a business plan, and then see if the franchisor is a force multiplier on top of that.
- [51:03]
B
Yeah.
- [51:04]
A
Does that make sense? Instead of just saying, hey, this franchise, and kind of going down that route?
- [51:08]
B
Yeah.
- [51:08]
A
So that's what I tell everybody first is understand the market, understand the regulations, the licensing, total addressable, all that type of stuff that goes in. But then from there, and this is where most people that would just go out and buy a pump truck and try to get into it, really understand the business model. So before we ever even think about signing an agreement with anybody, we have a very detailed pro forma budget that we put together that, I mean, we budget this thing out for five years and we know where every dollar of cash is going. We do a cash flow calculator and we say, okay, if this is your. If this is your reserve cash, when are you going to run out of it? How are you going to replace that money down the road where you're going to have to make more cash capex investments there. So it's just the business planning side of it. And so because every market is different, has its own nuance to it, being able to sit down and come up with that business plan before you ever even start. Because the business plan dictates everything else, right? So, so if I look at this thing and I say, okay, I know my fixed costs are going to run me about 10,000 bucks a month. And then I go through and I say, okay, on average, between these different services, let's say I run a 50% margin on. On that. All right, well, what do I need in order to be able to produce that? So in every area, it's different. What size truck do I. How many service trucks do I need? Do I need a mini excavator? Do I need any of the other stuff that kind of goes along with it? So understand your total addressable market, understand the regulations and the licensing, and then build you out a very, very solid business plan where you can Literally go through and lay out and say, I mean we have, if you go through our modeling, I mean we literally get down to month one, what does your org chart look like? What is your splits between all the different services going to be? What are the assets that you need to be able to back that up? And then we do it at month six, we do it at month 12, we do it at month 18, and we just keep on going like that. And so we build out these plans and so we are absolute numbers geeks. So we track everything. We track every single phone call, where every dollar in marketing goes. We set up everybody's chart of accounts, we mirror them across everybody. And so what we're really big on is building out the business model, building that budget out, out, and every single month drilling back down and saying, did we hit our KPIs or did we not hit our KPIs? Because as a franchisor, what I have to do is I have to take a limited amount of resources and be able to turn that into an uplift for everybody, right? And so the only way that I could possibly know that is I have to have very good insights into every single location's numbers. And that's what, as you probably know, it gets very difficult to hook all these systems up. And so that's, that's where I would say another one of our strengths is just besides marketing is the underlying technology. So just to implement Service Titan is one thing. To be able to get all the way from your call tracking and call attribution and get all the way down to your ROI tracking and then get that all the way pushed back over and have seamless end to end tracking. That is kind of a major piece of it there. So that's probably the last thing is where does the technology come in at in order to run this thing efficiently? How do you implement your call rail? How do you get that hooked up with service Titan? How do you get that into a chart of account? So that's probably the last thing that I would say is really understand your number numbers. And because it's business owners and you know this, and I tell everybody this, being a business owner is getting up every day and making the best decisions you can possibly can about where to where to allocate resources in time. If you don't have where am I going and you don't have that scorecard, it's very, very hard to do on a single location, much less as a franchisor, where do we spend our collective resources in time at? So it's having people in your corner that are able to help you build out. Because most business owners don't have that capacity on the technology side to be able to build and connect all this stuff. So understand your numbers, have a game plan and constantly check yourself against that because as a business owner you get pulled in a million different directions. And so you can always convince yourself where you're spending time and resources at. Normally it's a place you'd like to do it. That doesn't mean it's the best place you should be doing it. So it's just that accountability. So if you're not in a franchise or you're not in an accountability group or a small group or something like that, you need to be able to hold yourself accountable. And to be able to do that, you have, have a good plan and be able to check those numbers.
- [55:09]
B
Yeah, yeah. In the trades. Every wasted minute costs you supply. House.com makes it easy. With over 280,000 products from 500 plus trusted brands, plus exclusive perks to their Trademaster program like better pricing, free shipping and priority support. Get 5% off your first order. Supplyhouse.com with code OOF. I V E Supply House. Real people, real service. Thanks for coming on today. This was a fun deep dive into septic. I mean I walked away with some notes of like, like I got to double check a few things when I slide back over to the other building. But yeah, I think yes, it's a fun business. Like it's fun, it's high cash flow. It's currently like under discovered. But I think it, I think we're about to see a trend.
- [55:51]
A
Yeah. And, and, and just one other thing that I was going to say and it just hit me because we were talking about this as we were on our way over here.
- [55:57]
B
Yeah.
- [55:58]
A
Anybody who's thinking about getting into any home service business, I can go on a, on a, on an absolute soapbox about good and bad ones to be able to, to get into. But the number one thing I like about this industry is who am I competing against?
- [56:13]
B
Oh yeah.
- [56:14]
A
If you get into plumbing, electric, H Vac, there is a Wilson company in just about every good sized market.
- [56:21]
B
Yeah.
- [56:21]
A
So if you get an H Vac, right now I'm competing against you in every single market.
- [56:25]
B
Right. Unpleasant.
- [56:26]
A
It, yeah, it is unpleasant.
- [56:28]
B
Five years ago that wasn't the story. You know, five years ago in plumbing it was like, look who you're competing against. It's the fax machine. And now it's like, no, you're Competing.
- [56:36]
A
So that fucking business, that's where we still are. Right. And so it's like, I'm not trying to compete against guys. Like, do you know how long it would take me? I mean, just even, not even just to try to catch up to you.
- [56:47]
B
Yeah, yeah.
- [56:48]
A
It's insane. And I have a lot of friends that own, you know, 8, 8 figure H vac plumbing, electric restoration companies. And I'm like, I don't want to compete against them because they will eat my lunch every single day.
- [56:59]
B
You got to be good.
- [57:00]
A
Yeah. Absolute. So if you're looking at the septic industry, it's like the plumbing H vac 10, 15 years ago. Right. Where it was really mom and pop people. So if you're able to.
- [57:10]
B
Average business is a million bucks. It's beautiful. It does remind me a lot of plumbing.
- [57:14]
A
Yeah.
- [57:15]
B
15 years ago.
- [57:16]
A
Absolutely. So if you're able to do the things which is you're able to charge at the top of your market because you have the right people educating your customers, doing the right things and they're calling you back over and then you're able to really, really get good on your margins and understand those. And I would much rather compete against the Legacy 100 company than I would against the Wilson company.
- [57:34]
B
I mean the, the, the leading indicator is what's a cost per lead? Like a cost per leads. $80. We're in a competitive industry. The cost per lead for septic is probably 10. Yeah.
- [57:42]
A
In restoration, man, cost per leads, 500 bucks.
- [57:46]
B
Yeah. We spend $500 a lead in restoration.
- [57:48]
A
Yeah. Our average cost per click, I think right now is like five to six bucks. Our just over the last six months off of our first three that we launched. Launched, our average LSA first time qualified lead is running about 35 bucks. Yeah. And we're at minimum charging $95 out there. And we're the only person in the map pack. We're the only person out there. So. Yeah.
- [58:08]
B
If it's a funny game.
- [58:09]
A
Yeah. So if you're looking to really get a force multiplier on and be able to, you know, because even some of the bigger guys around, even some of the seven, eight figure ones are still pen and paper. They don't have to do marketing.
- [58:20]
B
Like I said, we just don't have to. You just literally don't have to.
- [58:22]
A
Yep. If you find any legacy company in septic that's been around for 10, 15, 20 years, they're a seven figure company. They do not do advertising because they just don't need to.
- [58:33]
B
Yeah, yeah. It's a. It's a funny business.
- [58:35]
A
Yep.
- [58:36]
B
Well, thanks for sharing.
- [58:37]
A
I appreciate coming on today.
- [58:38]
B
This was.
- [58:38]
A
Thank you all for having me.
- [58:40]
B
Awesome.
- [58:40]
A
All righty. Thank you.