B (3:50)

Yeah. And tell me a little bit about this roofing endeavor.

A (3:55)

Yeah. So when I sold the business to ODX back back in 2022, I retired. I stayed on with the business for a while. I stayed on as, as the president got frustrated what was going on with the private equity involvement. Retired out of that and said, you know what, I just need to retire. I don't need to work anymore. There's no point. Let me just, you know, do some consulting, help some other businesses, which I still do. And then I was approached by Mark Burch from formerly from Service Finance and Rob Camacho from TWG Global. And I've known Mark for a very long time, obviously through the business. And we've always talked about doing something because he owned prior national direct to consumer type businesses. And so he approached me and he said, listen, you know, we, we've got the funding, we've got the backing and we really want to come out and build something different and something unique and build it from the ground up rather than trying to do the acquisition model where, you know, that has its own challenges when you're trying to, you know, integrate different cultures, different systems, different profile processes. That's a very long process. And road and doesn't always work. So they came to me and said, listen, let's do this. What do you need to do? I said, in order to do this, do it quick, do it effective. I need to tap some of my former friends, slash business owners that also had sold their businesses or worked in very large businesses and have them come help. And so we did. We approached five people, five regional presidents, and we just sat back and really built a very strong, aggressive model designed with the end in mind and reverse engineered everything. And that's kind of how time proof came to be.

B (5:36)

You know, I love the playbooks when I see really good greenfields rolled out. And I really want to take a deep dive into this, if you don't mind. Yeah, I want to go one other place real quick. So renovo Black Rock. I've had a lot, a lot of discussions. There's a lot of talent coming out of that. And from what I understand, they were still making healthy ebitda. I think it was one of the places, one of the cases that they just put way too much debt on the business. And it's very, very hard. Private equity, if you kill it, you do very well and they take out a ton of debt. The it's so much better investment, but it's really hard to grow. It's very hard to grow when you're having to make all these payments on the debt. When you want to buy companies and you want a greenfield and you want to get the best executives into the business and maybe you could talk a little bit about the mistakes that go on and it doesn't just need to be with that company, but just where do, where do we go wrong with.

A (6:41)

So, you know, and I think for a lot of the younger businesses out there, they don't really understand the private equity involvement and what that means for their business. You know, I learned a lot. You know, I got a crash course in private equity. You know, I never even heard the word bips until I actually sold to private equity and had to learn all the terminology and the way that they operate. And the model that was used to acquire, Reborn as well as the other six businesses was a leveraged buyout model. Right. Where they take a lot of debt, they put it on the balance sheet, and their intent is that they can overcome the debt, the servicing the debt, continue to grow the business and then flip it and be able to make a margin on it. Right. It's not a buy and build. It's literally a strategy of short term harmonized systems, harmonize Processes build, add more value and then flip it. The challenge we saw was we were part of the, you know, the, the leverage buyout or debt infusion of private equity in our space when interest rates were very low and the business was on an upward swing. So you acquire debt that's inexpensive, but then it flips to being very expensive. This was on an arm, right? Yeah, exactly. That wasn't planned that. What, there was no contingency factor for that. And then you tackle, you tack on top of that, you know, we were all experiencing increase in marketing costs. We all experienced a little bit of a slowdown a few years ago. You know, it's coming back now. And so you put those together and you have a perfect storm for a hard to manage business. And what happened in our case was literally the debt service became too great and ultimately the senior management didn't know what to do because they weren't from the industry. They didn't understand this business, you know. You know, this business, this business is like playing the slots. You gotta be willing to walk up to that slot machine when times are rough, dump 100 bucks into marketing, pull that lever and hope you get a return. Right. You do it strategically, but you hope you get a return. But when you're fighting excessive debt payments, that extra hundred bucks isn't available. Right. Nobody wants to go out and add another hundred dollars. So that creates a very hard position to be in. And that's ultimately, you know, in a quick nutshell, what I experienced with the whole Renovo slash BlackRock. And, and for your listeners out there to understand, BlackRock did not own Renovo. BlackRock was the senior debt lender, lender to audax. And essentially BlackRock repossessed the business when Audex failed to want to put more funding in to support the debt.

B (9:25)

Okay, Right.

A (9:26)

So there's a lot, there's a lot out there that says, well, BlackRock owned the business. I, you know, I sold the BlackRock. No, I didn't sell the BlackRock, I sold the Audax. Odex borrowed the money from BlackRock.

B (9:37)

Yeah, the senior debt holder. That makes sense.

A (9:39)

That's right.

B (9:40)

You know, I'm, I'm in the midst of greenfielding myself and you know, the first thing that I do is I go and call the guys that I know that have been uber successful with Greenfield.

A (9:54)

Right.

B (9:55)

And it's very hard because I've got such a low ticket average. Right. So I'll tell you some of the fundamental things that I'm starting to pick up on is you Advertise four months in advance, coming soon on TV and radio. You don't even have a Google location yet. But you're doing that as a recruiting. You want people to start to hear your name and, and you've got to blast top of the funnel. You've got to show up big with as much PR as possible. In fact, we're trying to do a massive PR move each week where we get the news and we get the press involved and you got to show up. It's just it br. It reminds me of what I did when I grew the business that I don't do anymore. I, I'm pulling out the yard signs again like the, that I haven't done that I, I kind of grew out of. I'm like, I've kind of graduated. And then I realized now I'm spoiled. Now I got to go hunt again. And you got to have this guerrilla marketing mentality. You got to have a door knocking team. You got to have like, you got to go back to grassroot things that work. I'm just curious. And by the way, you got to be willing to lose money for 18 months.

A (10:57)

Yes.

B (10:58)

I've never heard of a company just, I've heard of some window nation was able to get profitable within like six months. But if you really, I'm not trying to build popsicle stands. I don't want like a $1 million EBITDA company after 18 months. I want to have something where you're, where you're a few million, you've taken market share. And by the way, I love acquiring small businesses along the way once we have Greenfield, because now we've got. Yes, now, now you're picking up all that old customer base. But what, what is, you know, and I don't want to reveal your whole strategy, but what are some of the things that you find to be extra effective when going into a new market? And I get this question all the time. I'm ready to grow. I'm like, well, do you have market share in your current markets? Do you realize that you've got eight players? Do you realize you're Robin Peter to pay Paul. Oh, by the way, we pay $50,000 to relocate a guy. Our top 20%. If anybody wants to relocate, we will pay $50,000 to put them in that market.

A (11:54)

Yeah. So I, everything you said, I align with we. You know, we, we've learned that number one, you have to, to your point to start with growth and, and addition of Greenfield has to be additive. It can't be lateral. You know, a lot of businesses, I talk to a lot of the smaller guys who are getting into expanding, put so much focus and time and energy on their greenfield that they lose the focus on their existing business and net net, they maybe only grow 2, 3, 4, 5 points. But the group, but their current market and their current business is going down.

B (12:30)

Yeah.

A (12:31)

And you know, before, as you said before, you even think about wanting to go out in greenfield, you have to have a very established good portion of your current market share and everything else. And it has to be self sufficient and running, right. It has to be the kinks have to be worked out, it has to be chugging along successfully. Then you can go and look at opening another branch in another market. And to do that you have to have the playbook down first. You know, it's, this can't be a, you know, fire aim ready scenario. Right. You have to be having everything in advance before you do that. You know, how are you going to launch these branches? What are they going to look like? How are you going to address the culture in that branch? How are you going to make sure that you have continuity across the way the business operates in a new branch? You have to define all those key things prior to just saying, let me go rent a building, let me throw some ads up, let me see what happens. And I agree 100% with your marketing strategy. You know, a lot of things, what we've even done is we'll go out and we'll burn recruiting ads in advance, right? So we'll go out there, we'll run recruiting ads, we'll test the market. Is there a pool of candidates that we can even hire to get into our business? We'll test marketing. Can we actually sufficiently generate the leads before we get to the market? So we'll do a lot of those tests which burn capital. And you have to be willing to have an existing strong business that's turning off cash and positive profit so you can do those things. You can't be strapped. You can't do this and say, you know what, I'm going to do it on a budget. You have to be willing to spend and invest the capital.

B (14:09)

You know, in a dream scenario, I could get to more than one in a month and I'm probably two years out from that. Because if you look at, it's really hard to compete with a company like ours because not a lot of people are like, yeah, I'm willing to go deep into the red for 18 months. And you're doing it very, very fast. And I'm sure you're getting a lot of investment dollars and the payout's going to be absolutely phenomenal. But what are some of the. How could you go to that? You're trying to do a lot, a lot at once. And I'm sure you've got a great team.

A (14:43)

We opened three states last week simultaneously on the same day.

B (14:50)

Is that, is that what's going to generate the, the vast amount of the lease? Is it the door to door side or what. Or is it the leads on the market?

A (14:58)

Some door to door, some traditional, some aggregator? It really depends on the market. And you know, we, you have to be able to, as you're. If when you're breaking into a new market, you have no brand, so you have to be prepared to go exactly like you said is go back to, you know, how we started our businesses way, you know, a million years ago, which was grassroots out there, knocking on doors, beating down, you know, people and generating leads. And, and a lot of what I think has happened in our space over the last 10, 15 years or I've actually since COVID was we be. A lot of our businesses became weak marketers. You know, we relied a lot on the aggregators because they came in flux. Leads were plentiful, leads were easy and a lot of businesses got weak and really take or make type marketing, right, going out there and actually generating leads. And that is what we have to go to these new markets as is the old school, generating leads. And once we can get that down, then we can be successful in these markets. And you have to have the team, you know, to your point of relocating people, you know, we've tried the grass, you know, the greenfield from scratch. Nobody from the corporate, you know, business, everybody hired from scratch. And we found that doesn't work because for us, the number one thing we wanted in all these branches is a consistent culture. And we wanted to make sure that we didn't have, you know, 50 cultures, but one business culture, one business process. So the best way we found at my former business that was established was to your point, relocating somebody, taking a plant from the core business into that new market, putting them there and having them be the stronghold of the business culture, the business processes, and then growing it off of there in this new endeavor with Timeproof, we didn't have that because everybody was hired from scratch. Everything started from scratch. So the key to that success was starting with a base executive team that actually wasn't new. So we brought in, you know, several, like I mentioned earlier, several people that I have worked with for 10, 15, 20 years that we shared similar business practices, we shared similar cultures, we worked well together. So that essentially was like our plant into all these markets.

B (17:22)

So I'm going to ask a personal. Which you're probably not going to feel comfortable and that's okay. You said you reverse engineered what you wanted to get to. I'm sure you've got a plan of five years or less. In a perfect world, everything works. What is the EBITDA goal?

A (17:45)

Up up to 15% or north of that.

B (17:48)

15% on revenue?

A (17:50)

Yes.

B (17:52)

And what could each market do you have like a goal of like 10 million per market or.

A (17:56)

Yeah, we do. So our strategy was to look at the available market, the markets. First of all, we isolated the radius for each branch. So when we designed this, we designed it in mind of what's the perfect scenario. And for us, the perfect scenario because of our sales coverage was to have sales reps work within a 50 mile radius of a branch so that we could run end to end, which essentially would be 100 miles from appointment to appointment and not, you know, exhaust their driving time. So that was key. Number one, let's put enough branches out there, focus on, it's not the same everywhere in the country, but focus on a 50 mile radius. What's available in that 50 mile.

B (18:37)

So you might have multiple branches in one state in Atlanta or in like a. Yeah. Or Texas of course is like, you might have multiple in Austin.

A (18:47)

Okay, that's correct. That's correct. So that was step one. Where can we put the branches? Step two was, okay, now if we have this branch, let's figure out the best zip code to put it in. Right. And that was a lot of analysis. Obviously, you know, homeowner count, you know, age in our scenario, age of roof, you know, single family, homeowners, et cetera, et cetera. So we did all that analysis, found what we thought to be the best branches, the best locations and then it was okay. What do we think is realistic that we can do out of that branch? And at a very high level, because we're doing so many branches on a very short period of time, we just really made two simple decisions. Is it a 12 million dollar branch or is it a 24 or 25 million dollars branch? What is the ability? You know, if you take a branch in an Orange County, California, the home density is so tight, you can do 25 million in a 50 mile radius. You take a branch in, you know, maybe I'll just throw a state out there, El Paso, Texas, you Know, it's going to be hard to probably do 25 million in a 50 mile radius, but you could probably do 12. So that's kind of how we said, we said, okay, here's all the branches at a very high level. It's a $12 million branch, $24 million branch. Now let's build the staffing and the lead gen models around that.

B (20:05)

So each branch will get you anywhere between 1.8 to 3.6 million of EBITDA in a perfect world.

A (20:10)

Correct.

B (20:10)

And how many branches are you shooting for?

A (20:14)

Well, it's grown because we were able to bring in a lot of talent. So the original model like you said earlier, was 50 and 30 states. Now we're close to 60 branches. Now the reality is some of these branches won't make it right. So in order to counteract that, we went with a what you might call a hub and spoke model as far as the way the business operates. Whereas much of the back office business is at corporate and the branches are very low overhead. Essentially you could think of a branch as franchise operations. Right. And a sales branch and not any of the other infrastructure.

B (20:55)

That's exactly how I run mine. I mean everybody's. In fact, the future of this business is very, very light. You got a warehouse guy, you've got an area manager, you might have a second backup. Even the one on ones are going to come out of the corporate office.

A (21:11)

That's right. I mean the branch could be literally, you know, 12 to $20 million branch could be 12 to 15 people. Yeah.

B (21:18)

Now what about plus installers?

A (21:19)

Plus installers.

B (21:20)

Now what about inventory? Are you, are you just going straight to the DCs or are you actually bringing it into the warehouse?

A (21:29)

So it depends on which area, which area of the country we're at. The, the primary model is from the dc. You know, roofing is a little unique because you can get job site deliveries from your DCs and you can.

B (21:42)

So is it all subs?

A (21:45)

It's, it's mostly all subs, depending on the state. But yes, the majority of it is going to be subbed installation. Yes. Which makes roofing a very unique business. Same with windows. Right? Windows and roofing are very unique because there's not a heavy inventory overload. You know, when we were in Bath, we carried, you know, 60,000 square feet buildings of inventory because we needed to have it on stock ready to go because it wasn't, it wasn't an easily available product.

B (22:12)

You know, I ran into Matt Esler and it's amazing what he's done in the. For Anderson, I mean, he's like, I kind of figured out, like, I think to me, it's pretty outstanding, the playbook that they've created. And that's the other thing that I really am not good at is this events you look at, and I haven't seen really many, many companies do what Anderson's been able to do, where you go to like a horse show. They're at the horse show. You go to a high school football game. They're at the high school football game. I mean, they're running 3, 400 events per market.

A (22:45)

Yes.

B (22:46)

Is that part of the strategy?

A (22:49)

Yes, because I've come from the mindset that, you know, and so do you. We're in a direct response. Make leads happen. I mean, that's what the business we're in. We're, you know, the product we offer and the product we install really is secondary to what we really do. And what we really do is generate leads and sell shit. And the product can be anything. So the majority of all of our businesses are focused on, really on marketing. And. And conversely to that. You make your money in marketing in these businesses. Right. You don't make your money on the cost of goods, on your gross margin. You don't make your money on your, you know, you know, reducing sales expense. You make your money on effective marketing and the spending of your dollars for marketing. You know, moving that market, you can move that marketing return up, up and down five, six, seven points a month. And that's where our month. That's where we focus the majority of our effort.

B (23:44)

Yeah. I think a lot of people miss that. They think there's a lot that could happen. I will say this. The marketing dollars don't go very far. If you're not booking the appointment, following up right away, have a rehash. Yes. If you don't have really good conversion rates, if you don't, we have a zero line. If you don't do all those things correctly, like in this business, there's a very high tension between operations and marketing. And it's built by design. I want the fingers being pointed, but then I always go back to the five dysfunctions of a team. And we got to go back to every two years to remember we are going to be uncomfortable with each other, but we're still working as one to get to the same goal. And that's why our pay structures are designed mostly on growth and ebitda.

A (24:31)

Right. And that's a whole nother thing on comp structures. I work with a Lot. And I'm sure you do talk to a lot of smaller businesses and they base these comp structures as percentages of volume. And that is in my opinion, the absolute worst, worst comp structure you can have. It's not scalable and it really doesn't create what you're trying to get. I mean, our businesses are around target attainment. Right. And margin, but really target attainment. And if we can focus our teams and get them all aligned on target attainment and not just putting dollars on the books, then you can really start to get everybody moving in the right direction.

B (25:11)

You know, I want to pivot a little bit because I happen to know Mark pretty well and he's a straight to the point type guy. He doesn't really mince words. He gave me kind of a clinic. He sat down with me, my co, my CFO and told us that we kind of suck at financing. He said you could do way, way, way, way, way more. And I really appreciated the conversation. He did text me and email me and say that he thinks we're very good at what we do. But how much would you like as a percentage of revenue to be through financing or I call promotions.

A (25:52)

70%.

B (25:54)

70%. And let me ask you this, do you care about the dealer fees at all or you just build that into the price?

A (26:03)

No. No. So, and this is an industry right back and forth tug of war, you know, do we, do we build the dealer fees or the cost of financing into our pricing cost structure or do we not? And then do we have our rep choose which plan they want to offer because it's going to affect their commission. And the philosophy I come from is you build a base cost into your cost model. So whatever you're going to want to offer as an average, all the time. And then you have those promos, you know, maybe you'll offer a 24 month. No, no, that costs you nine points, you know, but maybe built into your pricing structure, six points. So you're going to take that three point hit. What I don't really agree with is having your sales team participate in the cost of that financing program. Because then essentially what you're doing is you are, you're basically telling your sales team, don't sell it because it's going to cost you money. And I want my sales team to go out and be free to do whatever's best for the customer and not always think about what's best for them.

B (27:13)

So you're, that's kind of how we do it and I really appreciate that. Because a lot of companies, especially in H Vac, they're like last resort. They like the no dealer plans, of course. And by the way, if you're smart and you got the right the software available nowadays, I could fluctuate between 10 different options. And it just changes the price real quick for the client, but it doesn't change it a lot.

A (27:38)

Right.

B (27:39)

And I think that's the way technology's.

A (27:41)

Caught up finally for our industry.

B (27:44)

I love talking about this stuff. I, you know, I just listen to a podcast and I want to hear your take on this. Because it they interviewed 50 CEOs and PE companies and the minimum at these companies had was a five times MOIC. So basically, if they borrowed 500 million, the minimum they got back was two and a half billion. And they said there's five components that make every one of these companies five and five only is what they figured out. And they spent millions of dollars on research. Strategic clarity. What does winning look like? The vision and the path to get there was number one, number two, scalable talent. Not just eight players, but do you have eight players that you could build lined up below them if somebody were to leave? The next one was relentless. Focus. What are two to three value creation models? The next one was discipline, execution, and the last one was energized culture.

A (28:48)

And.

B (28:48)

Those were the five. And what's interesting is we spent a lot of time with our project manager, our PMO, that that like we're picking the top 10 to hit the North Star, which frustrates a guy like me. I'll be honest with you. Because I'm like 20. Well, no, I'm like, well, does that mean we don't get our inventory under control in the warehouse? Does that mean that we don't do the checkouts for our vehicles? Like these small things really go into it. I'm like, I think you should have three or four per department because some of these don't even interrelate. Like marketing, of course, has a lot to do with operations, the capacity planning and everything else. But I'm like, what about the call center? Are we working on getting that extra 3% and waiving the service fee if we have to when we don't have capacity in that market. And it's frustrating because I'm wondering how you look at this, because each department should continue continuous improvement. And although you've got your 10 North Star, because I didn't come from a corporate background, you know, I ended up getting a master's degree, which meant nothing, by the way. I Could wipe my ass with it. But, you know, I didn't come from GE and some of these major corporations that have this Six Sigma, you know, this crazy mentality. So how do you think about when you're really trying to scale, of getting the whole team behind you and running?

A (30:09)

So alignment and focus is key. We have to make sure that everybody's very, very clear on the responsibilities, especially at the level of how fast we're launching and that it is very, very clear to everybody how execution is done. The playbook to how you mentioned on one of those five items is absolutely critical. And what I find, even in this business that we're launching and also in other businesses, is that a lot of things are done off the cuff or, you know, let's make this process and everything's verbal and things are pushed down manually and there's really never a clear playbook that's modified and, and adjusted and, you know, value creation. In my opinion, to go to market a business, to your point, as you said in those five things starts with do. Does the business have a successful playbook, a proven ability and can. Is it repeatable? Right. Can they do it over and over and over again? So we made sure that we made that playbook and that we focus on that playbook or that North Star of how we're going to do it and that it is how we're doing things that was. That was critical. I also agree with, you know, your last one, which was culture, and I'll put that first. I believe that the culture of the business is how you make your money. You know, if you think about, you know, product and service and even marketing, we can be experts at that. But if our team isn't giving us, you know, at least 100%, and our goal is to try to get 105 or 110%. Right. But if they're not giving us 100% because they're frustrated with the business, maybe it's hard to get commissions calculated by the audit team to get people paid. All those little things work negatively against the culture. So we want our culture to be first and foremost before everything else.

B (32:09)

Hey, I hope you're enjoying today's episode. Just wanted to share with you why I'm so excited about 2026. The next three to five years are the best chance you'll ever get to scale your shop fast and build generational wealth. We're entering the perfect storm of opportunity with three massive changes hitting at once. First, private equity. You can get the biggest payday of your life by partnering with them. Second, baby boomers are retiring, so you can 2 to 5x your revenue by buying their shops. And third, AI, there are now so many tools that can increase your average ticket and lower your lead costs like never before. But listen, the window of opportunity is already closing as more and more people rush into home service. That's why you've got to come to Freedom 2026 and meet owners who already built $100 million shops and learn what they're doing now to win in this gold rush. Check out freedom event.com to grab your ticket at the exclusive pre sale price by February 15th. It's freedom event.com now back to the episode. This is something that came back with a bunch of 360 reviews is some people feel like they don't get recognized as much. And my answer to that was, we're not a socialistic company. We believe in capitalism. And you know, if I'm a kid, let's just say I had five kids, I'm gonna take the kid out the dinner that got a 4.0. But also, I think it's fair to say we dispatched for dollars and you should have a few different brackets of leads and, and say, hey, you ran this type of lead, you're the best at this, so you're hitting all the way down. But you know, recognition is so important, by the way. It's not just the highest ticket average or the highest conversion rate or the highest membership rate. It could be you went above and beyond and help somebody and you just got to have this, this. There's a lot of other things. You had perfect driving, you have perfect attendance. So how do you feel about making sure everybody's involved? Yes, of course. Team meetings, team outings, getting the families involved, making sure they understand what the goals are of the whole household. There's a lot of things you can do, but in your opinion, a healthy culture. I feel like we hire so much. We just had 50 guys graduate. Unfortunately, 25. And people say this is wrong. 25 of the people, the first day they go to 10 below in Minnesota, they've never ran in this career. They're gonna go F this and there's nothing I could do about it. And the first day someone in Arizona goes to 140 degrees that the garage is the hot air stuck in there, they're going to go, this isn't for me. So. But how do, how do you make sure everybody feels involved and gets recognized and gets out of boys?

A (34:48)

Yeah. So. So to unpack a couple things, I want to touch on the recruiting too, but discipline, number one. So discipline meaning that. So even with our business only being, you know, a few months old, we already do monthly town halls with all the team members promoting those that. So we focus everything on our core values. We want our core values to be first and foremost and not just be something that's on the wall. So what we do is we do a monthly town hall. Managers can submit, we promote a different core value every month. And then teams can submit people from the, from the team that have excelled at that specific core value in that month. And we recognize them across the entire company. And we want people involved. You know, now there's. When you break that down a step further and you start getting into departments. Yes, there's, you know, salesperson of the month or, you know, ran the most leads or who installed the most revenue. All the different departments have that in their little silos. But from a corporate level, we do want people to feel like they're being recognized and we're, we want to stay disciplined, to not lose sight of that. You know, there's so many moving parts in our business that a lot of businesses get overwhelmed with the today fire. And then those key critical parts of their engine, like recognition of team members gets overlooked one month or gets overlooked two months, or they cancel that meeting or they don't do this. And you have to keep those consistencies. Us as, as executives, it's our responsibility, in my opinion, to make sure that our teams are holding true to that discipline and then just to quickly touch on the recruiting. Another area where I feel that a business in a high growth mode or, or have may have, you know, a little higher than normal turnover is in recruiting. A lot of these businesses that I talk to don't focus on recruiting like they do on every other area of their business. We believe recruiting is no different than lead generation, that you have to build a super strong recruiting lead generation conversion, get sales, get people into interviews, model just like we do of getting leads and getting people out to people's houses.

B (37:02)

So marketing's 50, 50. 50% get the homeowner. 50% get the right person to go to that homeowner.

A (37:08)

Yeah.

B (37:10)

So when do you decide? And this is something I've really spent a lot of time on. As I always say, if there's a will, I'll find a way. Like, I don't care if you're the bottom performer in the company, if you're showing up with a smile and you want to learn and you're making progress. But when's the right time to top grade.

A (37:28)

So I think it depend. It depends on the business. So you know what I've learned, and I'm sure you've learned this is business is rise plateau, rise plateau, rise plateau. Right. You go through and you can probably think back of your business and say, Yep, it was $10 million was the first plateau, you know, $30 million with a second whatever. It's different for every business. But you go to these plateaus and then you're at these plateaus for a while because your existing business structure, leadership really can't get up to the next plateau. Right. They've, they've reached their capacity and we all want to keep all of our people involved all the time. But there is a reality the. And, and I'll touch about that on a second. The other side of the coin is when we are smaller and younger in the business, we usually hire for what we can afford, not for what we need. Meaning, you know, we can only pay someone $90,000. So we're really going to get somebody that's been doing what I'm doing today and they're not going to have experience of where I'm going tomorrow. But then once you reach a plateau where your profit's better, your cash flow is better, you can invest in the talent of I want to hire the person that's been where I'm going.

B (38:47)

Right.

A (38:48)

Not where I'm at. Right. You can top grade. So we look at that and it varies on where we're at with the business. In my former business, you know, we had to unfortunately bring and top grade the executive team down like three times, you know, where we had to replace executives because those executives that we had had reached their plateau and we could not get to the next.

B (39:11)

Well, let me ask you this real quick just on that note, because what are some of the signs when you feel like somebody's plateaued is a burnout? Is it just their, their demeanor? Is it just, you see the results are not increasing. Their KPIs aren't getting better. Like what exactly? Because if you did it three times, you probably know exactly. Like this is exactly by the second time, we realized this was exactly what we needed.

A (39:36)

Yeah. So usually you, you can, for me, I can usually expose it when we're talking about the next level, like where are we going next? And there is no input from that person of, you know, that they can't see their path to that. Right. Where if I look at some of the other executives we've had involved in the business, they Know, like, these are the actions we gotta take to get to 100 million. These are the actions we gotta take to get to 150 million. It's clear in their mind the path to get there, where those that are reaching a plateau, they're going, I just don't understand how we can get there. I don't have the answer. And that's kind of how we gauge it. Or they remain static in their department's performance. So we might look at a department and say, you know what? We want to reduce labor by, you know, half a point. You know, we really want an action plan to reduce our labor cost to half a point. And everything they come back with is static. They can't get that reduction. They just can't see it. And what we're often forced to do is not necessarily let that person exit the business, but we level above them. So we might bring in a new position above them because they're such a good talent. They're committed to the business. They've been there a long time. You know, they're. They, they're. They're. They're not, you know, negating their responsibilities. So usually higher above them to give them guidance. You know, it comes down to, if you read Maxwell's book, law, the lid.

B (41:09)

Yeah, yeah, yeah. You can only go as tall as your lead.

A (41:11)

Yeah, it really is. It's a little off the lid. You know, B players are only going to hire B players, and C players are only going to hire C players. They just don't understand what it takes to put a C player over a B player. Where the right executive is like, I don't care if I have to pay. If that person makes more money than me, I don't care. It doesn't matter to me. I want the best person on my team.

B (41:32)

Yeah, I agree with you. And that, that's. That's a hard, hard. There. There becomes, unfortunately, a lot of animosity as the company grows at the speed in which we're talking. It's very unhealthy. I mean, I will say that because, look, most people I know, like Warren Buffett, became a billionaire at, I believe, 53 years old. He became a millionaire at 32. And then all of a sudden, but. But it took him a long, long, long time. If you look at any great story, it takes time. And now with this pe, they're like, you got to do it in five years. And all of a sudden you're in this. You're kind of on a speed train, and you got to make quick Decisions, you got to live with those decisions. And part of that, what I was just telling you about is I think a lot of founders in particular, they feel this loyalty, like, this person did a lot to get us here, and I agree with that. But they'll never look beyond what they have in their four walls. And I think you've got to pull in talent from other places. You have to. That have been where you want to go. You said it perfectly.

A (42:41)

Listen, we have a hard position as the CEO of a business, right? We're the ones that get to make the tough decisions. That's best for the direction of the ship rather than the best for the people on it. And we've got to make those decisions, you know, that are very, very tough, where there's a person that's been with the business for an extremely long time that genuinely is a very good, you know, participant in the business. But we've got to look at what's best for all of it and not an individual. And, you know, we also have to be, to your point, be very, very quick. You know, I use the kind of, you know, the way I kind of manage myself is I look at, you know, I got to make 30 decisions in 30 minutes. You know, they got to be able to make yes or no, yes or no, yes or no. Because I can't. At the speed our business operates and at the speed it can go south so fast, we've got to be quick. We can't mull over these things. We can't. And so what I try to do is make sure that every area of the business performance isn't subjective. It's objective, meaning that everybody in the business understands what doing a good job means. And so that we're not just creating the rules as we go. You know, these are what it looks like to excel at your position. And that way, when we're making these hard decisions, we're not. We're taking the. We're trying to take the emotion out of it. We're trying to put ourselves away from the decision and have the objectiveness of the role and the objectiveness of the targets help to set that decision.

B (44:14)

I agree with you. And usually that's. It doesn't have feelings. It's numeric. It's. It's trackable. You know, Yes, I read these books, and they're counter. They kind of. They don't agree with one another. Like, if you look at certain companies, they appreciate tenure. They say, that's a great business. Then you look at Jack Welch saying, I need Fresh blood. I need to. No matter what, I'm going to replace 20% of this workforce every year because I want. What's, what's your take on that?

A (44:47)

So. Well, if the business is, is, is static and not on like your business or, or the business we're doing on an extreme trajectory where we're adding an immense amount of people all the time, we're bringing in that flesh, fresh blood all the time. If it's a static business, You, you do. People don't know what they don't know. Right? So I don't know what I don't know. And I don't purport myself to be the smartest guy in the room, nor do I ever want to be the smartest guy in the room. I want everybody else to be smarter than me. My job is to just pick the best ideas and get them from everybody else and then make them part of the business. So, you know, you need that fresh blood and you need that fresh talent. Especially now, because in our space of home services, home remodeling, whatever you want to call it, the influx of technology and features and the way we go to market is changing so fast that if we don't bring in that new talent that is exposed to those new things, we will be left in the dust as a business. So I think you have to bring in, I don't know if you have to cut necessarily 20% of your workforce every time just to keep bringing in people, but I do think you have to be exposing your business to what is new and innovative out there. You know, the guy that's in the rate the car that's in the Indy 500 or in NASCAR, that's in the front. He has the hardest challenge, right? His challenge is to stay in the front. Everybody else is catching him. We got to look at our business that way.

B (46:29)

Yeah. And I, I highly recommend you look as much as you could through the windshield instead of the rear view mirror, because it's important to know what's going on. But you got to have a plan about the future and stay innovative. You know, I look at our cfo. He's getting trained all the time. He's the one that sent us the podcast. My CEO COO is just amazing, always raising his lid. We brought on Young, our growth officer. She is like, brought the window nation and so many great things. And they continue to raise their lid and I just hope everybody wants to continue. It's tough though, because here's the problem with guys like us. Great job yesterday. What's what are we going to do tomorrow?

A (47:05)

Yeah, exactly. Yesterday. Doesn't matter.

B (47:08)

Yeah. And by the way, our partners, they're like, great job. Let's go into what, what we need to talk about now. I mean, that's just. That's just the way it is.

A (47:17)

It is. And, and you know, I think the one thing that I really love about this business, and I'm involved in a lot of other businesses, and I'm sure I know you are as well, is the one key to this business is the willingness of even your competitor to share knowledge. Right. The fact that in this business, it's really the only business where you can actually sit down with other businesses and they will give you the answers or to the questions you have. You know, it's really like a very small click. And everybody's willing to share and learn because, you know, high tide rises, all ships, so the better we make the industry, the better everybody gets. And I don't think you experience that in every industry. And I want to encourage, you know, those that are listening to your podcast all the time is go out and reach out to those other guys and ask them. You know, I'm friends with, as I'm sure you are, all, you know, the businesses, you've all mentioned, all the great businesses. I'm on text threads with these guys, right. I can ask them anything. Hey, man, even a billion dollar business, how are you improving your gross margin? They'll share it. You know, they'll share that knowledge. So I think that's a very unique thing about our business in our industry.

B (48:31)

You know, I was talking to Luke, our CEO yesterday, and I was like, you know, I don't have any fear in my business, like, someone's going to leave. I mean, obviously I do care a lot about, I do care about every single individual. I really do, especially our C suite. But at the same time, you got to think is like, to recreate this. You know, what makes our team so strong is our camaraderie. We know how to talk to each other. We understand. We work long together. Like you said, I needed to bring my team back to make this possible. That's what you told Mark. Because we work together, we've got this camaraderie. We know how each other think and execute. And I think that people think, like, if you asked me to go to be the CEO of another company, I'd probably be a little bit helpless. I go, yeah, well, I don't know how any of these people operate or what their capabilities are or how they think or how they get stuff done or how they make decisions or how much they're willing to work or what their family situation is or, you know, by the way, I think vacation time is probably the healthiest thing you could ever want. I think a lot of CEOs and founders are like, great, they're going on another vacation. I'm like, yeah, but they're burned out. They're going to come back with a fresh new outlook. They're going to be. They're going to clear their brains. And a lot of people get anxiety about that. I'm like, take as much time as you want. Like. And they always figure out a way to get their stuff done.

A (49:41)

Right. And you need to. Because this business, first of all, it never turns off. It's 24 7. Right? It happens all the time. And every single. I mean, we're not selling coffee cups to the, to people walking into a store. You know, we're, we're creating, converting, installing new every single day. And so you gotta be on your toes. So it demands a lot. And to your point, it demands a lot. So, you know, we've always used the motto, work hard, play hard, right? I mean, I know it's used and abused that, that saying, but I believe that, you know, we got to work hard when we're working and we got to play hard when we're not working so that we can, you know, get that out of our system and come back refreshed. And I agree with you 100%. You know, we don't, we don't. For the majority of the, the leadership, we don't track vacations, right? You don't get weeks a year. You have vacation, take it when you.

B (50:37)

Need it or even work when you want. You know, if you, if you want to work from home. Because the people, you know, what's so nice is an equity incentive or profit units is like, we're all sprinting in the same direction. We realize the outcome for our families, all of us.

A (50:52)

That's right. And we, and the right people don't need to be micromanaged. The right people know what needs to be done and when it needs to be done. And you have to trust that they're doing what they should be doing because they're committed to your point. We're all kicking the ball on the same goal.

B (51:09)

Well, Chad Peterman once told me, he goes, I found myself micromanaging my direct reports. Then I realized I had the wrong direct reports.

A (51:16)

That's right.

B (51:17)

If you find yourself like, sit down with me, I'm gonna Basically do your job. We're gonna think through this and I'm gonna do the majority of the thinking. And that's the 1, 3, 1, right. What's the problem? What are three possible solutions? What's the best one? How are we gonna run with that? If they don't have the ability to do that, then maybe it's the wrong person or maybe it's the wrong seat on the bus.

A (51:36)

100%, man. I, you know, I tell my direct reports, I don't need to have one on ones with you once a week, you know, I'll support you, do whatever. You know, we'll have, you know, we'll have once a week exec team meetings. We'll get together, we'll, you know, we'll talk about what's going on, what needs to be done. But I am not going to sit down with you every week and go over what did you do yesterday, you know, what are you doing tomorrow? You know, I don't want to micromanage people that way. I want people that are aligned and are marching independently towards the goal and they appreciate that. Right. I'm accessible. I'll be there whenever they need anything. But I'm not going to force my agenda down their throat.

B (52:12)

Yeah. Cameron Herald wrote meetings suck. And you find yourself, and I do see like we do about 150, 170 pages of our main meeting. And I find that a lot by the way, these meetings with the data, a lot of it, like I wouldn't change a thing for the world but there's so many meetings that it's like, when do we get time to work? And look, I remember my, my brother in law was a CIO at GE for 25 years. He goes, Tommy, meeting after meeting after meeting after meeting after meeting. And here's the deal. Every quarter you gotta shave, you know, cause they need the stock to go up. And they don't like the corporate world because it's like there's different levels. That's why it's called corporate. These guys need a stock to go up the middle management and there's, it's just, it's tough. Listen Vince, I want to ask you some closeout questions here. Number one, this is important one, you know you sold the business in what, 20, 22 originally?

A (53:05)

Yeah.

B (53:06)

And you're sitting around probably a little bit going well it's kind of cool. But now what, what would you say? A lot of people sell their business and they feel this emptiness, this void. What's a way to avoid that?

A (53:21)

So, yeah, and I hear that from a lot of guys. You have to, you have to have a plan, right? You have to have a plan and that, and that plan can be anything you want. You know, one of the things I did, I started collecting cars, right? I started collecting real estate, started remodeling homes. So I filled it with that. Another for me personally was I really felt driven to give back my knowledge to other businesses. So I did a lot of consulting, you know, and I would just share my knowledge not for, not for, you know, money, but just more of self fulfillment, of helping others grow. So you have to come to that exit with an intention of what you're going to do next or you will be lost. Because these are our babies. I mean, we've lived these businesses for the majority of our, all of our adult life. And you rip that out, it's like ripping out, ripping away from a spouse or a kid, right? There's a huge void. So you have to be intentional on how you're going to fill it.

B (54:15)

Give me one good book that everybody needs to read.

A (54:23)

I would read. Actually, you know what I would read, if they haven't read it is I would read E. Myth.

B (54:27)

Michael Gerber, baby.

A (54:29)

Yep, Gerber is a very easy book to read. And the basics and the fundamentals of building a repeatable business are in that little tiny book.

B (54:40)

Vince, if somebody wants to reach out to you, what's the best way to do that?

A (54:44)

Oh, yeah, they can feel free. They can use my. You want me to give you my email? Yeah, yeah, my, my personal email is v.nardo12outlook.com Happy to answer any questions any of your listeners have, any time.

B (54:57)

I love it. And I'm just going to let you close this out, brother. I've learned a lot. I got a lot of notes. I'm going to give you a buzz here the next week and we got to hang out. I mean, we're not, we're not far from each other.

A (55:08)

Well, listen, man, I really appreciate you having me on. It was fun.

B (55:11)

I loved it, man. I, I literally like, I'm, I'm rooting for you and I know you're going to pull it off. You've got the, here's the deal. You've got the experience and most people don't have that. And you might have all the knowledge in the world, but you've been through this and I know you're going to, you're going to do amazing things.

A (55:27)

Appreciate it and thank you and congrats on everything you've accomplished. It's incredible. I watched you. I remember when we came back to came to your office a million years ago with Sean.

B (55:37)

And guess what? Sean's an amazing guy. And I'll tell you, these networks make us stronger. And the more we could communicate and share, the better off we're going to be. So I'm definitely going to follow up with you and I really appreciate your time.

A (55:50)

Thanks, man. Appreciate you.

B (55:51)

All right, Vince, Appreciate you.

A (55:53)

Bye Bye.

B (55:54)

Hey there. Thanks for tuning into the podcast today. Before I let you go, I want to let everybody know that Elevate is out and ready to buy. I can share with you how I attracted a winning team of over 700 employees in over 2020 states. The insights in this book are powerful and can be applied to any business or organization. It's a real game changer for anyone looking to build and develop a high performing team like over here at A1 garage door service. So if you want to learn the secrets that help me transfer my team from stealing the toilet paper to a group of 700 plus employees rowing in the same direction, head over to elevateandwin.com forward/podcast and grab a copy of the book. Thanks again for listening and we'll catch up with you next time on the podcast.