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- [00:00]
R.J. McGee
I think it starts with culture. Culture isn't pizza parties. Culture is a group of people that come together for a shared vision. In that shared vision, there is a high level of accountability within the organization.
- [00:11]
Tommy Mello (Host Intro and Outro)
Welcome to the Home Service Expert, where each week Tommy chats with world class entrepreneurs and experts in various fields like marketing, sales, hiring and leadership to find out what's really behind their success in business. Now your host, the home service millionaire, Tommy Mello.
- [00:31]
Tommy Mello (Host Interviewer)
Before we get started, I wanted to share two important things with you. First, I want you to implement what you learned today. To do that, you'll have to take a lot of notes. But I also want you to fully concentrate on the interview. So I asked the team to take notes for you. Just text notes, N O t e s to 888-526-1299. That's 888-526-1299. And you'll receive a link to download the notes from today's episode. Also, if you haven't got your copy of my newest book, Elevate, please go check it out. I'll share with you how I attracted and developed a winning team that helped me build a $200 million company in 22 states. Just go to elevate and win.com podcast to get your copy. Now let's go back into the interview. All right guys, welcome back to the Home Service Expert. Today I got R.J. mcGee. He is a expert in operations, leadership, business development. He's actually based here in Vegas. He's the CEO at Sierra Group, a leading home service company based Las Vegas, Nevada. With over 15 years of experience in operations leadership and business development, RJ has played a key role in scaling Sierra's success. A graduate of Texas Tech University with a degree in finance and an MBA from Syracuse University, he combines strategic vision and hands on operational expertise. RJ is passionate about developing people, building sustainable growth and redefining what excellent looks like in the trade. His leadership has positioned Sierra Group as one of the most respected names in the industry. Thanks for being here, brother.
- [02:04]
R.J. McGee
Yeah, thanks for having me.
- [02:05]
Tommy Mello (Host Interviewer)
Well, listen man, let's just start out, you know, how do you got in the trades and what's gone well, what you're looking forward to?
- [02:11]
R.J. McGee
Yeah, second generation in the trades. My dad was a new construction guy. He started a company out here in Vegas, Sierra Air Conditioning. And I used to come out here, work the summers. I actually grew up in Texas, but I'd work every summer out here being a tech business, been in sheet metal, doing all the grunt work and then ended up going to college out in Lubbock, met my wife. We moved out here in 2010 and then I got involved with the business and been doing it ever since.
- [02:38]
Tommy Mello (Host Interviewer)
And what's going well, what are you looking forward to? So you're 15 years in the game.
- [02:44]
R.J. McGee
Yeah, it's been a fun ride. We partner with private equity. We've been able to build a really great company here. And we've got five other partners in other markets as well. It's been fun working with the other teams, learning about the other markets, helping them grow and develop those companies. You know, 2025 has been a challenging year with a lot of headwinds, but I think what's been exciting about it is the team's really figured out how to adapt and overcome and make the best out of a tough year.
- [03:10]
Tommy Mello (Host Interviewer)
What is. Did you acquire those? Did you Greenfield, how did you guys get involved in all the other markets?
- [03:17]
R.J. McGee
All of them have been acquisitions. A lot of them were, you know, former owners that were ready to retire. So we did went in and partnered with the former owners, helped them kind of build out their succession team and their succession plan in those markets. And then we've then brought in some of our nexstar coaches or their former nexar coaches. They work for us now. They go in and really help redefine or rebuild the operations and really focus on sales, marketing, all the key needle movers we know that help those businesses grow.
- [03:50]
Tommy Mello (Host Interviewer)
Now, I told you previously, I kind of got out of Portland, and there's nothing wrong with Portland. It's just a hard city to work in. Lot of politics, lot of makes it tough for business owners. Similar to California. You're in Seattle. What are some of the challenges in some of these markets? I'm pro employee 100 through and through. But when it makes it hard and lawsuits come through the yin yang and it's hard to get labor, what are some of the challenges in a market like that?
- [04:19]
R.J. McGee
Well, I think one of the hardest things is really competing with some of the pay plans that are prevalent in those markets. We're very much a performance pay shop. We believe in performance pay and getting, you know, getting the existing tech base to buy into performance pay plans and how they can make a big difference in their paycheck long term. That's. That's been a struggle along with just, you know, a lot of these companies are used to doing things a certain way. So it's making sure that we're explaining to them, like what, what makes sense, how to, how to train their people. How to really build experiences in the home, whatnot. But I would say probably the number one thing is really just teaching them how to change up the pay plans and getting their people more motivated from the performance pay, commission, pay standpoint.
- [05:09]
Tommy Mello (Host Interviewer)
Yeah. Stake in the outcome changes everything.
- [05:11]
R.J. McGee
Yeah.
- [05:11]
Tommy Mello (Host Interviewer)
Every business you could go into when they got a stake, you know, I always say hourly people, not the best pay structures. No, no one's got an incentive to do the job the right way the first time. To build a client for life, to build a relationship. They don't see a reason to really. I mean, we, we take it all the way down to equity to the technicians and installers, which is hard to do. Yeah, equity. But then you get people that really, really try hard and they still got to get five star reviews. And it's crazy. The top 10% of the company in sales also gets the most five star reviews. Also up to the meetings, on time, also has a big smile, also becomes a mentor to the other guys, also is recruiting, handing their cards out at gas stations. Is that what it is for you?
- [05:55]
R.J. McGee
Yeah, definitely. We want to, we want to motivate the, and drive the behaviors we want through the pay structure. So we, we definitely build the pay structures around that and then really just educating them to understand that like they have, you know, they have full control of their pay and their destiny. We don't believe in seniority. We don't believe that you have to work for us a certain amount of time before you can reach a certain pay level. We want you to come in and hit the ground running and you can grow as quickly or as slowly as you want within the organization.
- [06:23]
Tommy Mello (Host Interviewer)
No tenure, meritocracy. So what did you know? I got an MBA from University of Arizona and I learned a couple of cool things, but hindsight, I'm like, didn't really help. The relationships I built were probably the best thing. Do you think your MBA changed the way you look at business?
- [06:44]
R.J. McGee
No. I mean, it was a cool experience to your point, you know, learn different ways to look at things. At the end of the day, I could have learned it elsewhere. I think college is great to teach you networking, teach you how to build relationships, how to meet new people. Outside of that, I, looking back, I don't see the value of it that, you know, a lot of people put on college. I, I have three kids right now, and that's a conversation that my wife and I talk about a lot. Is like, do we think we should send our.
- [07:15]
Tommy Mello (Host Interviewer)
How old are they?
- [07:16]
R.J. McGee
They are nine, five and four.
- [07:18]
Tommy Mello (Host Interviewer)
You got Nine years to have that conversation with the first one.
- [07:22]
R.J. McGee
Yeah. I can't imagine how much it's going to cost then. So we'll see.
- [07:26]
Tommy Mello (Host Interviewer)
I don't know what this world. Bill Gates came out and said in seven years you won't need a job. Which is a hard world to believe. But if you add up Alexander Graham Bell invented the telephone, change the game. And then IBM was one of the first people that created a computing, real computing power. Then you've got the handheld cell phone, you had the industrial revolution. You add all those things together times by 10. It doesn't even come close to what the world's going to be like with AI, no question.
- [08:00]
R.J. McGee
It's going to make a massive impact.
- [08:02]
Tommy Mello (Host Interviewer)
And when you insert AI into machines, which Tesla's market cap right now is 5 trillion on autonomous cars, when the robots come out near the end of next year. 25 trillion. That's 20 trillion. And he was able to negotiate a really nice bonus for himself.
- [08:19]
R.J. McGee
Really nice.
- [08:19]
Tommy Mello (Host Interviewer)
But he's got a, he's got a 4x the company which as a shareholder. Right. Love giving him that because if you're not incentivizing the leadership team, they're not going to do it. But it's, it's a new world that's coming. What do you think AI machine learning obviously starts in the call center dispatch. Anything monotonous that happens over data entry could be HR related. But what are the other things you anticipate with AI?
- [08:46]
R.J. McGee
Well, I think it's going to redefine everything. I mean call center for sure they won't exist pretty soon. Logistics, dispatching, it'll replace that. I think accounting is another area. Repeatable processes. AI has got to come in and systemize all of that very, very soon. So I think it's going to eliminate a lot of positions. But I think just like any industry, it's going to create a lot of positions as well and a lot of opportunities for those people to go move into new careers and new sectors.
- [09:19]
Tommy Mello (Host Interviewer)
I forget the stat, but it was an astounding amount. Back in the days when there was phones and they have to put in the. And it was like a crazy number of women that had that career and then that went away and they got another job. There was still a need. They just got to learn how to train a new skill. I think humans are going to work really well with AI.
- [09:41]
R.J. McGee
Yeah, I mean I look at refrigeration, it's the same thing. We used to sell ice to people. Right. Then refrigeration came around. All those people lost their job. But then a whole new other industry was created.
- [09:51]
Tommy Mello (Host Interviewer)
Yeah, wagons went to automobiles. There's a lot of examples of that. You know, one of the ratios we're paying attention to is the guys in the field versus all the indirect. And I'm indirect. I'm not in the field collecting checks anymore. That ratio of technicians, installers, the people out there doing the work versus not needs to start growing that, that there should be way more guys in the field and that number should go up dramatically with the help. So we're building our whole org chart and saying what's the automation? It doesn't mean we're gonna get rid of everybody. It means we're going to go on a freeze. What are your thoughts on that?
- [10:29]
R.J. McGee
Yeah, I think, I think it's smart. I mean I think your typical like next star certain pass they used to coach like three to one, four to one. I, I think it's very quickly going to double your office to field ratio. You know, I think the way to not scare your, scare the staff and the team is to basically say like we're going to continue to grow, but we think we can grow without adding a lot of bodies. We're going to use AI to help enhance your position within the company and make you more valuable than we are to just come in and eliminate it.
- [10:59]
Tommy Mello (Host Interviewer)
Yeah, you can make a lot more money if you work well with AI and machine learning and AI are two different things. One of them is historical. Grabbing data, making the best assumptions. One of them's kind of looking outward. So you've been doing this for a while now. What are some of the pivotal things from project Manager to CEO? Looking back, what are the pivotal lessons you've learned?
- [11:21]
R.J. McGee
I think the most important thing is recognizing like your people are really important and you've got to put people first. You got to be a servant leader. You've got to make sure that you're there to support them and give them the tools they need to be successful. Learning how to communicate and be patient. And we're all people. We're all humans. We're messy, like all humans are messy. And so we have to make sure we understand that people are going to make mistakes. And our most important job in the organization is to be the Chief Repeating Officer, not whatever other title you think it is. I see where we don't have a lot of grace with our employees and we expect to just tell them something one time and they're going to remember it. And like I guarantee you there's things Right now that are happening, that you're forgetting and that I'm forgetting. And yet we expect our, our team and our employees to be able to remember everything we've taught them.
- [12:14]
Tommy Mello (Host Interviewer)
Yeah, that's where manual, standard operator procedures and checklists come in. And getting it and then having them initial each page, we go over in October, how to request pto, because Thanksgiving, Christmas is coming up. And like we, we recite it, we go over it, we go over it, we go over it. And it's a constant thing because we're hiring so many people. It's just. You're right. We repeat. What is your leadership philosophy and how has it evolved over the years?
- [12:41]
R.J. McGee
Well, I think at first it was very much just like gritty and work hard. Like, I think just like anybody that's come up, you know, with an entrepreneurial background, it's like I just have to work harder than everybody else and I'm going to get where I need to be. And then as the company continued to grow, you start to learn that, okay, I can't do this all on my own. I've got to really start investing in people, investing and helping them grow. So that's where I think like being a servant leader comes in, is that you have to be willing to put like your people first and give them the tools they need to succeed because it becomes less important about you succeeding and more important about them succeeding because you can do a lot more through people than you can just by yourself.
- [13:22]
Tommy Mello (Host Interviewer)
Zig Ziglar, you could have anything you want if you helping other people get what they want. How much percentage should we be spending.
- [13:28]
R.J. McGee
Of revenue on marketing across our portfolio? We average about 4 1/2 percent.
- [13:35]
Tommy Mello (Host Interviewer)
So low. You're lucky.
- [13:36]
R.J. McGee
Yeah, we're really lucky. We've got some really mature brands in some really mature markets. We have a new construction background, DNA that really helps us from a branding standpoint. We've got thermostats in every home with the sticker on the thermostat. So that drives down our marketing costs significantly. Just here in Vegas alone, we've install over 220,000 homes here in the Vegas market. All those have Sierra stickers. They, they call us. That's the first place they go when their AC breaks down. And then we're able to leverage that and lean in and cross sell through plumbing as well.
- [14:13]
Tommy Mello (Host Interviewer)
When did this market start for Sierra?
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R.J. McGee
1987.
- [14:17]
Tommy Mello (Host Interviewer)
1987. That's why I love it. You know, Sierra's become a standout name in H vac and plumbing, not just for Growth, but not just growth, but consistency. What do you think has been the key to maintaining momentum while keeping your company culture intact?
- [14:36]
R.J. McGee
I go back to the new construction. One thing that new construction teaches you is process. You have to be really efficient. And we were able to take what we learned in new construction and build that into a home service model. We used to go to conferences all the time and we were trying to learn how to be good at service. We had no clue, like, we spent years asking and asking and people would be like, how are you good at new construction? And we were like, well, it's easy because we built out the systems and the processes. And so as we started to learn how home service works and the interactions and the experience, we really focused on process and efficiency. And I think that's really drove a lot of the success there.
- [15:20]
Tommy Mello (Host Interviewer)
You know, I. We've got home service freedom and we did a Q and A two days ago. And there's all these $10 million companies asking tons of questions. It's hard for me to go back. So the question for you is, what's the difference between a $10 million revenue versus $100 million revenue company?
- [15:38]
R.J. McGee
You know, the thing I tell all the GMs is the team I had at 10 million, isn't the team I had at 20 million, isn't the team I Had at 40 million, and isn't the team we have at 100 million today? And so I think it's making sure that the people that you're surrounding yourself with are people who want to continue to grow and want to continue to raise their lid within the organization. We're big on John Maxwell law of the lid. And so that's one thing is just at some point, some people just decide they can't grow anymore. And that's okay. It's okay. You know, those are tough conversations to have, but we still need to have them because we can't allow leaders to become what keeps us from growing.
- [16:19]
Tommy Mello (Host Interviewer)
Yeah, they're tough conversations, but it's only fair to cut them loose and say you're going to go do great somewhere else. And I've had to do that several times. It's never an easy conversation, but you got a lot of families depending on you to make those decisions. Other people within the company. I want to get back to marketing. You were talking a lot about, well, you don't do a whole lot at four and a half percent, but still it's a big number. It's millions and millions of dollars. What do you think the best investment is? For a large company right now. Is it radio, tv, is it. Obviously we've talked about a little bit about LLMs in the studio. Some people just do straight PBC. I don't know how they make money doing straight PPC.
- [16:57]
R.J. McGee
I think Mass media is obviously important. I don't think you can say from a mass media standpoint you should do this or that. You need to really pay attention to your marketing pro through service site and figure out where your organic traffic is coming in. Is it coming in well? Okay, that means our mass media is working pretty well. If not, let's make sure we're paying attention to Google, Yelp. I think if you're just starting, Google's where you have to live. SEO, ppc, lsa, those have to be the three that you're optimizing for right out of the gate.
- [17:29]
Tommy Mello (Host Interviewer)
And the GDP?
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R.J. McGee
Yeah, absolutely.
- [17:32]
Tommy Mello (Host Interviewer)
24 7. It needs to say 247 instead of 9 to 5 Monday through Thursday.
- [17:37]
R.J. McGee
Really making sure you're getting the reviews, making sure you're getting reviews with pictures. Anything that will help improve that gdp, help improve that lsa, that's where I think the most important place to live is. And then once you get those dialed in, that's when you start leaning into the Yelps, the thumbtacks. That's not where you should start though. I think I see a lot of people start with thumbtacks, start with Angie, start with Yelp. They don't prioritize the reviews, they don't prioritize the pictures. And then all of a sudden they're a slave to the lead aggregator.
- [18:10]
Tommy Mello (Host Interviewer)
Yeah, that's not a good place to be. I mean, I was just at a home improvement conference and these guys, it's all lead ad companies and if they decide, hopefully one day you could buy the lead act company if they're doing that well. But if they decide to, someone's going to pay more for lead. Luckily, I've always said whoever could pay more per lead will always win.
- [18:30]
R.J. McGee
Yeah, that's, that's why private equity is doing so well right now.
- [18:33]
Tommy Mello (Host Interviewer)
I was going to ask you about private equity. I mean, what are the good, bad and the ugly?
- [18:39]
R.J. McGee
I think with anything, you know, for us, we have a small family office that we work with. They're very hands off, which is very much can be a blessing, but also can be a curse. Sometimes there's a lack of direction and vision. It's good because it challenges us to step in and fill that role. So it helps us raise our lid. But I think also having A middle market PE or even a larger PE company. They come with a lot of resources. Um, whether it's recruiting, whether it's marketing, whether it's HR resources, it resources like PE does bring a lot to the table, you know, but as they bring a lot to the table, everyone has to recognize, you know, to those who are given much, much as expected, like, there's a level of accountability that comes with that. And they're going to ask questions that you've never been asked before, and they're going to challenge you and make you think in ways you haven't thought before. And that can be, that can be overwhelming at times. And so really making sure you vet the PE group, you, you reference check who you're going to be partnering with, I think is really important for anybody that's thinking about doing it.
- [19:45]
Tommy Mello (Host Interviewer)
What are some of the mistakes you see people doing with acquisitions? Because everybody and their brother's like, I'm just going to go buy like you do. And I'm like, we've grown mostly organically or Greenfield, but I think the first.
- [19:55]
R.J. McGee
Thing is getting rid of the founder.
- [19:56]
Tommy Mello (Host Interviewer)
Like you, especially if they're under 5 million of EBITDA.
- [19:59]
R.J. McGee
Yeah, like they'll, they'll hold you up.
- [20:02]
Tommy Mello (Host Interviewer)
Yeah.
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R.J. McGee
We were looking at a company in, in Texas, and it was a husband, wife shop, and they had grown from 0 to 10 million in four years. Like, really amazing growth. But they wanted to walk, and it was just them. And that whole company would walk with them if they walked. And I think PE sometimes just sees. That's a really attractive EBITDA number.
- [20:25]
Tommy Mello (Host Interviewer)
Oh, you're saying keep the founders.
- [20:27]
R.J. McGee
No, I believe that for a point in time, you got to make sure that there's a really good succession plan in place.
- [20:33]
Tommy Mello (Host Interviewer)
I agree with that. I think Darius Livers. You familiar with Darius?
- [20:36]
R.J. McGee
Not familiar.
- [20:37]
Tommy Mello (Host Interviewer)
FH for. He's like the first thing, if you're buying a company under 5 million of EBITDA, you got to figure out a transition plan. Because I look at it, buying a company as a marketing source, sometimes you get great people along with it. A lot of times you do, sometimes you don't. Yeah, but you get the name, you get the brand, you get the stickers. There's a lot of things you get. You get the GVP's with a bunch of reviews. I can make technicians. We've got a good leadership team that kind of sits on the head of everything. Integrations are harder than most people think. Like, we, we got the same price book in every market. We buy it from the same vendors in every market, same benefits in every market, same truck setup in every market. Even if it's a different name of the company. Like we are holistically, one CFO, one CEO, one COO, three VPs of different regions. But a lot of companies haven't done that. They have not properly integrated.
- [21:27]
R.J. McGee
No. And you're never going to be, you're never going to get the top multiple if you don't fully integrate the way you're doing it.
- [21:32]
Tommy Mello (Host Interviewer)
Is that what you guys have done?
- [21:34]
R.J. McGee
It's. We're still in process. I would say that we're getting a lot closer than we've ever been, but it's, it's a grind. And if the founders are still involved, it can become more challenging.
- [21:44]
Tommy Mello (Host Interviewer)
They hate a product. They say, we'll never carry that. They, you know, because 20 years ago it was a bad product. And, and then obviously vendors could change the OEM manufacturer could get better or worse.
- [21:56]
R.J. McGee
And that's where I think if you are going to have a founder that's staying on board, you got to really make sure that you're, you're selling the vision and they understand the future direction of the company. Also, you want to make sure that if they are staying on, they're, they're rolling so that they have a stake in the game as well with you, and they want to succeed just as much as you want to succeed.
- [22:17]
Tommy Mello (Host Interviewer)
What's one leadership mistake or misconception that you see a lot of owners make?
- [22:24]
R.J. McGee
I think just again, expecting that you're, you know, your communication with your people, thinking that you only have to tell somebody how to do something one time. I think that we, we just have such high expectations for, for whether it's techs, frontline managers that come out of the field. We don't set them up with the right tools, the right training to be successful. We don't give them 30, 60, 90s. We don't give them job descriptions. We just say, like, hey, you're a service manager now, you're an operations manager now. And then they stumble and they fail. Not because they weren't ready for the position, because we didn't properly prepare them for the position.
- [23:03]
Tommy Mello (Host Interviewer)
Yeah, the orientation, the onboarding process, the training, that's got to continue to evolve. Training never ends. It's got to be something that's the DNA of the company.
- [23:11]
R.J. McGee
We got to give people a roadmap. You got to give them a vision. You got to let them know, like, where we're going, how we expect them to get there. And if we don't do that, then and they fail, it's not on them, it's on us as a leader.
- [23:23]
Tommy Mello (Host Interviewer)
I like the idea of a roadmap. When you think about the team you've built, what do you look for in people beyond their skill set?
- [23:34]
R.J. McGee
For us, it's attitude. Attitude's really important. Of course I want people that are smarter than me. Like, I want to be the dumbest person in the room all the time. And so we, we target people that really have been around, have been in the trades for a while, have worked for PE in the past, but still can maintain that connection with the operators. I think that's really important. I see some of the other PE companies, they bring in outside resources which are extremely smart. I do not discredit that at all. But I think they lose touch for what the plight of a GM is, what an operator is really going through the grind, how to communicate with technicians, how to communicate with sales guys. And we lose a little bit of that, that blue collar feel. And I think for the organization to stay successful, you got to keep that blue collar feel within it.
- [24:24]
Tommy Mello (Host Interviewer)
The family feel like that's not massive corporation. What's changed the most about the customer or the industry in the past few years?
- [24:34]
R.J. McGee
Well, I think from a customer standpoint, they're not nearly as patient as they used to be. I think you take Amazon, you take all the technology, you take Uber Eats, DoorDash. We've created an instant gratification society. And so we have to make sure that we're adapting as a, as an organization. From a sales delivery perspective. There's. We should be either doing same day installs or at minimum next day installs on everything that we do. And that's so that we can continue to, you know, the millennials are coming up and they're becoming the largest part of the workforce and those are the ones we need to be catering to the most. And they want things done right now. They want to make quick decisions and they want to move on with their life.
- [25:17]
Tommy Mello (Host Interviewer)
Yeah. What's the myth? I love working around Millennials, Gen X, Gen Z. I think they just want to be more involved and they want to see a path. They talk about work, life, balance, which baby boomers don't. What's the difference between because your dad was in the business and he had partners, what's the good and bad about that?
- [25:40]
R.J. McGee
Well, growing up, like with my dad and his partners, it was. You didn't ask why you did what you were told. If you didn't do what you were told something was getting thrown at you. It was, you can ask questions when we say you can ask questions and we'll explain the why when we think that you're ready to know the why. So you just had to go and do it first. Which it worked for a really long time. I was actually, I was talking with our COO about this this morning and that, that, that reinforcement, that old school reinforcement of just like do what I say right away like that, that used to work really well. It doesn't work now. With the like millennials, the gen zers, you can't just like yell at them, you can't scream at them. You have to really make sure that they understand what we're doing, why we're doing it, how we're doing it, why it impacts them, why it impacts the customer, how it's impacting the team. Like they need to know all of that and then they need to know the big picture of where we're going so that they like buy in and do what you want them to do. So I think the old school mentality of leading while was effective, it's just, it cannot continue to be effective with the new workforce that we have.
- [26:46]
Tommy Mello (Host Intro and Outro)
Hey there. It's Thanksgiving week and I have a quick feel good story for you. It's about a guy named Lewis who drove over 14 hours to tour my.
- [26:54]
Tommy Mello (Host Interviewer)
Shop about a year ago.
- [26:56]
Tommy Mello (Host Intro and Outro)
His whatever it takes attitude really impressed me. So we made sure he got everything he came for and more. A year later he posted. When I met Tommy, I only had one technician and one vehicle. Today, exactly one year later, we have three technicians, four work units, two secretaries and our income has quadrupled. Here's the deal. You don't have to drive 14 hours to figure out how to scale your shop. On December 12th, Jim Leslie, my right hand man, is doing a one day boot camp in Dallas where he's teaching the same six systems we use to grow a one to $250 million. If you're planning next year's goals, bring them. Jim will help you map out exactly what it'll take to hit 10 million, 50 million or even a hundred million dollars. Check it out@homeservicexpert.com Bootcamp. B O O T C A M p. That's HomeService. Expert.com Boot Camp. Enter Dallas at checkout for 50% off only 90 spots. All right, back to the episode.
- [27:55]
Tommy Mello (Host Interviewer)
What do you define success now that you might have thought differently when you were younger?
- [28:02]
R.J. McGee
Well, for me, like success used to be my Own like personal growth, right? Like how was I going to grow within the organization? How was I going to make more money? How was I going to support my family? Like to me now success is like helping others. Like how do we, how do we help others grow? How do we help our technicians, you know, buy homes? How do we help them achieve their goals that they're setting? You know we've got sales guys now that are buying rental properties, buying investment properties. We've got 20 something year olds that are being able to buy their home when they're seeing their counterparts that are still in college, taking them to college, can't, can't buy a home, living with their parents. So I think that is where we really see success. I love it when people say they want to go start their own company. Like we're all about that. Like here, let me help you, let me, I'll sign off on your contractors board license. Like I want them to go and do it. I also warned them like it's not as easy as you think it is but we, we don't, we celebrate other people succeeding and growing within the organization and that really like fulfills me.
- [29:04]
Tommy Mello (Host Interviewer)
It's, it's hard just knowing what we've been through to say go do this because you're what, one in ten chances of succeeding? You're going to lose hair relationships, you're going to lose your health. Not all the time, but technicians specifically tend to think, well I know how to do the work but do they understand what a balance sheet income statement is or how to recruit or understand accelerated depreciation or understand how to make the phone ring or understand what happens when a sale someone doesn't come in or understand when, especially the lead gen side of it. And there's so much more understanding leases and workers comp and the EMOD score and the right type of insurance and benefits. The technicians, I work for the technicians and the installers. But there's a lot of other things that happen in the background even beyond my scope today. It's like dude, I, I don't even know a return to work policy, I never even heard of that. You know what I mean?
- [29:58]
R.J. McGee
Yeah, no, absolutely. I mean it's owning a business. It's, it's not for the faint of heart, that's for sure.
- [30:05]
Tommy Mello (Host Interviewer)
Not a lot of people can pull it off. And when you do, it's a team that gets you there and I think bringing the team up with you. What's something you've learned about yourself as a leader that surprised you?
- [30:22]
R.J. McGee
I think Just through my life, you know, I was. I've always been a very driven person. I've always been, you know, motivated by success, motivated by, you know, growth of myself, you know, and doing better. I think. You know, I've had some life experiences. My wife and I, we lost one of our children in 2019. And that really, like, gave me a moment. Yeah. But it really brought a lot of things into perspective of, you know, you only get one life, right? And you only get so much time to spend with your family. You only get so much time to spend with your kids, to be a dad, to be present. You know, a lot of people have asked me, like, well, why don't you just go start your own thing now? And it's like, well, I got young kids and I got a family, and I built a really amazing team, and, you know, it hasn't been without a grind. But, you know, I used to want to be a billionaire, and I used to want to have hundreds of millions of dollars, and now, like, don't get me wrong, I still want to make a lot of money over my lifetime, but it becomes less important, right? It becomes way more important. Are. Are we showing up at home? Are we bringing our leftovers home? Or are we. Are we showing up as the dad and the husband that we need to show up as? And so I think that, for me, has been the biggest change from, like, a leadership growth perspective is not only recognizing myself, like, hey, what's really. And I have to remind myself all the time, like, being a good dad, being a good husband is actually way harder for me than being a good leader in an organization. Like, I can do that. I love business. I love home service. I can do it all day, every day. I could do it 18 hours a day and be the happiest person in the world. It's hard to be a good dad. It's hard to be a good husband. It's hard to prioritize that over your job and your people and your team. So I think that perspective has been really, really good for me.
- [32:15]
Tommy Mello (Host Interviewer)
Let me ask you this. You get $100 million. You know, let me. Let me just clarify. I have a lot of people going, man, I want to do what you did. I want to get. You know, I'd love to have 100 million, $200 million. I'm like, why? Like, are you gonna help out? Your parents are trying to set your kids up. Like, what are you gonna do with the money? And, like, I don't know. It's just like, dude, it's a big goal. It's a bhag. I'm like, yeah, but what would 100 do that 20 wouldn't? Like, what's the. The. Why the Simon Sinek why behind it? So you get 100 million. What's the plan? What's the bucket list? What's happened with that money?
- [32:53]
R.J. McGee
For me, it'd be setting up generational wealth for the kids. We're in the process of, you know, setting up our own little, like, charity right now. We want to support, like, we're big on, like, water safety now. That's our kid passed away, was a drowning accident. So we're big on, like, infant swim rescue, sponsoring families who can't afford it and helping them be able to get their kids in there and, you know, educating people on just how important water safety is for their children. And so, like, for us, it's more about how we can use that to not only, you know, better our family position, but also how can we help and influence others. We're really involved with our church, you know, we'd want to help there wherever we can. So those are the things that I think matter a lot more, because at the end of the day, whether you have 100 million, whether you have a billion, 2 billion, 10 billion, can't take it with you when you go, right? Like. And as far as I'm concerned, it's. It's really not ours anyways. Like, I think it's all a gift from God. And so it's our job to steward it in the way he wants us to steward it. And so more importantly than the money, it's how. How does God want us to really use that money to the way he wants us to use it, right? Because these businesses that we own, the. The money that we have, like, it's all just because he's allowed us to steward it right now, you know, I.
- [34:11]
Tommy Mello (Host Interviewer)
Was with my dad. I took him to Idaho.
- [34:12]
R.J. McGee
And.
- [34:15]
Tommy Mello (Host Interviewer)
He'S a big scripture guy. I mean, you name a scripture, he'll tell you the story. He probably remembers the scripture. And he's walking through this new house we're building in Idaho, and it's a. It's a pretty big house. It's a beautiful house. And he goes, you know something, Tommy? He goes, I don't think you know this, but Jesus and you know our God, he wants you to have this. He goes, you might not seem that way. And I said, what's upon this conversation, dad? He goes, well, some people think that God wants you to just give everything away, but you Build relationships and you show up for people. And we talked about it for a while, and I'm like, dad, can we just kind of live in the moment for a second? Because he'll go straight Jesus on you for hours.
- [34:55]
R.J. McGee
Yeah.
- [34:55]
Tommy Mello (Host Interviewer)
And he's at that age where he's turning into my grandpa, where he's just. And it's great. And I love the time, because you know what? Tomorrow's not promised. He almost died in Covid. He's 72 years old. And I don't know. I'm hoping I got 20 years. I'm hoping I got 50 years. Who knows with modern medicine? But you don't know.
- [35:11]
Tommy Mello (Host Intro and Outro)
How do you.
- [35:12]
Tommy Mello (Host Interviewer)
You know, I've never been a father. I've been a son. How do you qualify time with your. Your.
- [35:18]
R.J. McGee
I don't know.
- [35:19]
Tommy Mello (Host Interviewer)
You haven't talked about mom much, but, yeah, my. My wife, or I guess your dad.
- [35:26]
R.J. McGee
Oh, my dad. I mean, I didn't grow up with. I'm really blessed. Like, I grew up in Texas with my mom. My mom and dad split when I was really young. She got remarried to my dad in Texas. I call them both my dad. I got two dads, two moms, as far as I'm concerned. I had a great dad in Texas that was there for me all the time, was at every sporting event, always just there to take care of me, help me through all of the stupid stuff we do when we're young. And then I didn't have the greatest relationship with my dad that was out here in Vegas. He was building a business, and he was working really hard out here to build what he felt he was doing to support his family. Right. And so, you know, as I got older, I really started to develop my relationship with him later in my career or my life. And it's been amazing to have, you know, two dads that have been able to be there with me throughout different phases of my life and help really support me throughout those different phases of my life. And that's what I want to do for my kids, is be there, be consistent, help them wherever it is. Like, you know, who knows? Whatever they want to do. I just want to be there to help support them and guide them and keep them on the right track. I know they're going to do stupid stuff we all do, right? Like fail forward, hopefully.
- [36:42]
Tommy Mello (Host Interviewer)
So.
- [36:43]
R.J. McGee
But, yeah, just being that good father that supports whatever their dreams and ambitions are. And also, if. If it's maybe not the best direction, helping them, guide them right in the back. The right direction.
- [36:54]
Tommy Mello (Host Interviewer)
Yeah. You know, did you have any idea when you were wondering where your biological father was and he was building the business out here in Vegas? Did you ever think when you got in the business maybe three, five years in, like, now I get it.
- [37:09]
R.J. McGee
Oh, 100%. Like, it's. I think it maybe not. It was probably more when I really got into. Cause I started in like, accounting. I was been in sheet metal. I wasn't dealing with the people the way he was dealing. He. They had companies in Sacramento, they had companies in Reno. He was traveling all the time. He was. They had, at one point they were about 550 employees here in Vegas.
- [37:32]
Tommy Mello (Host Interviewer)
Holy shit.
- [37:33]
R.J. McGee
Oh, eight hit. They went from 550 to 70 in the matter of 90 days. So I mean, the stress he was going through, everything he was building and doing, I totally got it and I appreciate it. Like, it's what his sacrifice that he made early on is what's allowed me to be in the seat I'm in today. Right. And so, you know, doesn't mean it wasn't without the, you know, trials and tribulations, but everything happens for a reason. And you just got to kind of.
- [38:03]
Tommy Mello (Host Interviewer)
Trust the process, you know, your. Your dad started in 1987, is that right?
- [38:09]
R.J. McGee
That's when he started here in Vegas. He actually had a company in Texas before that that didn't do do great. So he moved back here and started Sierra.
- [38:16]
Tommy Mello (Host Interviewer)
So I was four. It's been around for a long time. How old are you right now?
- [38:20]
R.J. McGee
38.
- [38:21]
Tommy Mello (Host Interviewer)
38. And if you could go back to your very first year at Sierra, what advice would you give yourself?
- [38:31]
R.J. McGee
Be patient.
- [38:33]
Tommy Mello (Host Interviewer)
People overestimate what they could do in one year. They could do it 10.
- [38:36]
R.J. McGee
Delayed gratification, right? Like it's below your means 100%. Like, just when we came out here, I mean, I was making $32,000 a year. My wife was. She came out in 2010. She wanted to be a realtor. Vegas market wasn't great in 2010 to be a realtor. She didn't do a traditional sale for the first three years as a realtor. It was all short sales bankruptcies. And so we just. We were patient. We grinded it out. We learned how to scrap. You know, there were days we were wondering if the debit card was going to pay for the McDonald's that day. And that's all right. Like, it taught us how to be scrappy. But I think, like, I got ahead of myself, wanting more and getting a little impatient at times throughout that process. And I think I would just tell myself like, enjoy this moment right now because you're gonna, you're gonna miss it. You're gonna miss how simple times were.
- [39:30]
Tommy Mello (Host Interviewer)
Yeah, I missed that probably in middle school when life was just like, it felt like. I'm like, I can't wait to get older. I'm like, man, I go walk around my old neighborhood in Michigan. I'm like, those were the days, man. Like, I had to do a couple little homework assignments, go hang out with my buddies. You know that we, me and Brie have been talking this a lot. My fiance is like, money of like, my mom worked three jobs and my mom and dad got a divorce. And I just think back of like, I was like, I had to go shovel snow and molans and get a dishwasher job when I was 12 under the table. And I'm like, that kind of created this DNA inside of me to just, I'm. I hustle, I grind, I. And I'm afraid that like, hey, go get the jet ready, Tommy Jr. Let's get that thing. You know, like, it's like. But also, you don't want to make them suffer if they don't have to. So I don't know the best way to do it. I'm curious your advice.
- [40:27]
R.J. McGee
There are a lot of people out there in the world that probably had a much further head start than you did. And look at where you're at today. Right. And so from a father standpoint, I'm going to give my kids privilege and I'm going to give them a head start. But how I teach them to utilize that head start is what really matters.
- [40:44]
Tommy Mello (Host Interviewer)
It's like Billy Madison had to re. Go through school. What's one business mistake that all entrepreneurs should avoid when scaling their business? And there's probably several. I got a lot.
- [40:58]
R.J. McGee
Hiring too fast.
- [40:59]
Tommy Mello (Host Interviewer)
Yeah, hiring too fast and scaling too fast. They're scaling revenue before profit.
- [41:05]
R.J. McGee
Yeah. Bringing people in just for the sake of bringing people in and not making sure you bring the right person in. The right person can offset three mediocre hires easily.
- [41:19]
Tommy Mello (Host Interviewer)
Yeah, I think sometimes we hire out of desperation and you don't do the best interviews. You're like, I just, I'm drawn. I just come in here and see what you could do. And that'll take a company very quickly. That's probably some of the best advice is hire slow. Like, get the right people, learn how to interview better. Maybe even get people for a three month payment is a 1099. That's what Kevin O' Leary talked about is like, he, he's the subcontractors and says, look, I'll pay you more. You come on board. We see that we both love each other. We do. We say what we're going to do with each other and I think that's a big opportunity. What else do you think is there's so many mistakes. I know 10 times more mistakes than.
- [41:59]
R.J. McGee
I know what went well, 100%. I mean and I had three great mentors that taught me a lot. And I still make a ton of mistakes every day. Hire slow fire fast is one that I always say to everyone. Making sure that you're really systematizing everything you do within your business. Don't just train for the sake of training. You have to have a reinforcement plan for all of your training. That's one mistake I've seen throughout our portfolio is, you know, we gotta, you know, I've been down to your shop, I've seen your training facility. It gave me a lot of inspiration. And so we built out a great training program. We forgot the most important part though which was making sure that we had reinforcement behind that training to where when our techs left the training we had a way to one, measure the effectiveness of the training and two, measure the manager's ability to reinforce that training once the training was done.
- [42:56]
Tommy Mello (Host Interviewer)
I love that. What or who has had the greatest influence on you and led you to help make the right decisions?
- [43:09]
R.J. McGee
There's been so many people along the way that I've been blessed to be mentored by some certain PATH coaches Early on, Bill Weaver was huge. Nexstar coach Scott Brinkley was huge and teaching me a lot about the business. My dad and his partners taught me like the gritty side, the process side of the business. We work with a consulting company called MAP and our MAP coach is phenomenal. Yeah, he just, he pushes us. He's got, he's not from the industry. He's.
- [43:43]
Tommy Mello (Host Interviewer)
What's his name?
- [43:44]
R.J. McGee
Pepe. Pepe.
- [43:45]
Tommy Mello (Host Interviewer)
Pepe.
- [43:45]
R.J. McGee
Pepe Charles. Yep. And he's, he's from food distribution and he asks us questions that we've never even like thought of asking before. And I think that's really important. We all get so caught up in Nexar Certain path, whatever industry, best practice group is out there, which they're important, everybody should join them. I believe in that full heartedly. But you also need to look outside the industry. You need to look for innovation that comes from different industries that you can bring into this industry to, to better your company and organization. Because if everyone just goes the next are certain path, whatever the, you know, practice, whatever's out there, we're all just gonna be doing the same thing. So you gotta find ways to differentiate yourself.
- [44:27]
Tommy Mello (Host Interviewer)
I got a few more questions. So you're. This has been great, by the way. Your dad has had partners in the past. I had a partner. It's not easy. What. What lessons could you tell me? Partnerships. No partnerships. What are your thoughts?
- [44:47]
R.J. McGee
It's a marriage, man. Like, it's. It's. You're with those partners more than you are with your wife, your kids. A lot of time, like, communication is so critical. Like, vision is so critical. I think most partners stop or start out of necessity because you need extra equity, right? And so you say, hey, let's do this together so I can hedge my risk a little bit. And I think if you guys don't spend enough time really plotting out the vision of where you want to go at some point in time, you're gonna. You're gonna come into a roadblock. I think my dad and his partners were really lucky. They all brought different strengths to the group. Somebody always kind of emerges as the alpha when there's partners. And I think where my dad and his partners did a good job is they recognize who the alpha was within the group and who was kind of the face and allowed them to lean into that. And then the other partners were able to complement where they needed to be complimented. So if you are going to have partners, make sure that they are complimenting you and not the exact same mold that you are.
- [45:49]
Tommy Mello (Host Interviewer)
That's true. You know, right now, I started building out my life at 45 and 42. So I put a lot of things in there where I want to go. I'm starting to manifest. Reverse engineer, make sure, because I'm not going to wake up in one day, oh, I'm 45. It's like it's going to take time, effort, energy, and money to become that. What do you want by the time you're 45? Where do you want to go? What? Family trips? If you could have any car, where do you want to build another house? What kind of things are you thinking about?
- [46:16]
R.J. McGee
You know, we're. We're. Me and my wife are pretty simple people. We, you know, we just want our kids to be happy. We want to. Here's the thing. I want to make sure that whatever I'm doing, whenever the day comes where I got to meet my maker, that he's not disappointed. Right? And I think that's what's most important. You know, I can have all the dreams and Visions I want. I just got to make sure they align with what his. His dreams and visions are for me. So for me, it's really just making sure that whatever we are pushing for, because you got to have goals, right? Like, you know, my wife and I, we want to have $100 million, you know, at some point in time, we want to own rental properties. We want to, you know, start a charity that can support people through the ISR stuff we were talking about. I think those goals are all important, but I think more importantly, like. Like, I've got good plans, but God's got way better plans than I've got. Yeah.
- [47:08]
Tommy Mello (Host Interviewer)
Give it up to him.
- [47:09]
R.J. McGee
Yep.
- [47:12]
Tommy Mello (Host Interviewer)
Leadership in the trades often requires balance, balancing empathy with accountability. How do you hold people to the highest standards without burning them out?
- [47:21]
R.J. McGee
I think it starts with culture. I think a lot of times people think that if you have a good culture, you can't have accountability. And I think it's the exact opposite. Like, culture isn't, you know, pizza parties. Culture isn't, you know, dinners. Culture is a group of people that come together for a shared vision. And in that shared vision, there is a high level of accountability within the organization. And we want to make sure that, you know, iron sharpens, irons, that it's competitive, that we're pushing each other. And so I think that that's what's most important, is that you breed that culture. But when everybody talks about culture, they know that one of the core values of that culture is accountability.
- [48:04]
Tommy Mello (Host Interviewer)
What's the goal as a company? And I'll just kind of tell you my thoughts on this. A goal of any company other than a 513C. What should it be? What's the one underlying thing that every company should be focused on?
- [48:15]
R.J. McGee
Ebitda profit.
- [48:17]
Tommy Mello (Host Interviewer)
So, and why is that?
- [48:19]
R.J. McGee
It's the most important, important metric we have. I mean, that's what creates growth. That's what allows the organization to provide for the employees. Again, when. When we create abundance, we're able to share abundance.
- [48:34]
Tommy Mello (Host Interviewer)
And that's why I think profit units, eip, equity incentive programs, enhancing benefits, newer vehicles. Believe it or not, the questions we get, do I get a new vehicle or is it used? That's one of the first questions. Another one is, do we pay weekly or bi weekly? Now, bi weekly was awesome because people save money easier, but a lot of people want weekly. It's just crazy because never once has somebody been like, tell me about the dental plan. Or, like, you know what I mean? Or, no. No one's ever like, man, I really need the best health insurance unless they got a, you know, an underlying issue. Most of the people were hiring the average age like 27. So we're not. Health is not this massive thing. The benefits package are great. I think they can get better and they always can. My new HR gal, she's amazing, but she's like, we need to be. I'm like, dude, we're not Silicon Valley. Like, we're a garage door shop. Like, like, look at this. You're like, well, I'm like, I want to have the best, but the best in home service, home improvement amongst my peers. I can't compete. Like open AI is given a $100 million sign on bonus to, to one of like 20 people that would come on. But I'm like, you got to compare Indus within the industries. Yeah, it's, it's hard for people to understand that from. That don't come from the industry. And I'm like, well listen, if you're willing to chip in 10% of your paycheck, we could probably do that. I'll chip in from mine. What are some books that have changed your lives or your life?
- [50:05]
R.J. McGee
Rockefeller's 38 letters to his Son is a really, really good book. Like Rockefeller was ruthless. But also you can learn so much about business through reading his letters to his son. I think that was just a very, you know, when I first saw the book I was like, who wants to read a bunch of letters and then you start. I like couldn't put the book down. I was just fascinated by it. And I love studying like historical leaders. I think another one that I love is off balance on purpose. Yeah. I think that helping people of Thurman, helping people to understand that work life balance is a bit of a pipe dream.
- [50:47]
Tommy Mello (Host Interviewer)
No. You go all in on certain phases of your life.
- [50:49]
R.J. McGee
Yeah. It's. You're going to move a lot faster if you are intentional about where you're putting your time and your resources. I think like rich dad, poor dad. Obviously everybody's read that. Automatic Millionaires. I think a book that every technician should read.
- [51:04]
Tommy Mello (Host Interviewer)
Did you hear my latest podcast with him?
- [51:07]
R.J. McGee
No.
- [51:07]
Tommy Mello (Host Interviewer)
That's so funny. The David Bach was just on my podcast.
- [51:14]
R.J. McGee
Okay.
- [51:14]
Tommy Mello (Host Interviewer)
It hasn't even come out yet. That's so weird that you mentioned that.
- [51:17]
R.J. McGee
I think it's an amazing book.
- [51:19]
Tommy Mello (Host Interviewer)
Pay yourself first let compound interest do its work 100%.
- [51:22]
R.J. McGee
You know, pay your mortgage, you know, a couple extra times a year. Just look really simple concepts that can help people get ahead so quickly in life.
- [51:35]
Tommy Mello (Host Interviewer)
Somebody wants to get A hold of you, rj. What's the best way to reach out?
- [51:39]
R.J. McGee
Probably best way is my email, R.J. mcGee. That's M A G E E@SierraCoolSLV.com you.
- [51:47]
Tommy Mello (Host Interviewer)
Should open a bar called McGee's. That's all I'm saying. The Irish Pub. And finally, I'm just gonna let you close us out. Whatever. Final thoughts, whatever you want the listeners to listen to. I really appreciate our time and there's a little bit of time and confusion, so. So thanks for hanging out for a bit.
- [52:01]
R.J. McGee
No, this is great. I really appreciate it. I think my thing is just remembering that not every day is promised. Like you said, be really intentional with your family. We're all really business operators. We're really driven entrepreneurs and that's great. I think sometimes remembering that's the easy part of our lives and making sure we show up as good husbands, good fathers, and, and really investing in that future is a lot, a lot of times more important than maybe that extra phone call you want to take or that extra meeting you want to book that day.
- [52:38]
Tommy Mello (Host Interviewer)
Well, not being a father, you know, everybody's like, get it out of the way early. I'm like, I was stupid. I didn't have any money. I don't. I mean, it's fine. But I'm like, now I'm just going to be an old ass dad.
- [52:49]
R.J. McGee
So that's all right.
- [52:51]
Tommy Mello (Host Interviewer)
Rj, this has been a blast, brother. Thank you very much. Appreciate you.
- [52:54]
Tommy Mello (Host Intro and Outro)
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 20 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 podcast and grab a copy of the book. Thanks again for listening and we'll catch.
- [53:31]
Tommy Mello (Host Interviewer)
Up with you next time on the podcast.