Understanding the Complexities of the Commercial Landscape with Josh Young

The Home Service Expert Podcast
Host: Tommy Mello
Guest: Josh Young, President of New Construction at Tempe Mechanical
Release Date: April 18, 2025

In this insightful episode of The Home Service Expert Podcast, host Tommy Mello engages in a comprehensive conversation with Josh Young, the President of New Construction at Tempe Mechanical. With over 16 years of experience in the home service industry, Josh shares his journey, the challenges of scaling a business in the commercial sector, and the strategies that have driven his company's remarkable growth.

1. Introduction to Tempe Mechanical and Josh Young

Josh Young introduces himself as the president of Tempe Mechanical, a company specializing in large commercial HVAC and plumbing projects across various sectors, including industrial facilities, hospitals, municipalities, schools, and hotels.

Notable Quote:
"What's happening? Thanks, Tommy, for having me." – Josh Young ([01:53])

2. Revenue Growth and Business Fluctuations

Josh outlines the volatile revenue trajectory Tempe Mechanical experienced under his leadership. After taking over as president, the company's revenue spiked from $8 million to $16 million, dipped to $10 million, and then surged to an impressive $37 million within two years.

Notable Quotes:
“We went from, what is it, 8 to 16 million in a year?” – Tommy Mello ([02:06])
“Yeah. Just in two years. So.” – Josh Young ([02:22])

3. Challenges of Scaling: The High-Rise Experiment

Josh recounts his ambitious foray into high-rise projects, which initially stretched the company's resources thin. The lack of adequate manpower, cash flow, and logistical support led to significant challenges, prompting a strategic reevaluation.

Notable Quotes:
"We kind of went up and down a little bit, but yeah." – Josh Young ([02:06])
"We went into a couple more and just about crippled us." – Josh Young ([03:37])

4. Strategic Pivot: Focusing on Strengths

Realizing that high-rises were not their forte, Josh and his team refocused on smaller, more manageable projects ranging from $1 million to $10 million in value. This strategic pivot allowed Tempe Mechanical to stabilize and then accelerate growth.

Notable Quotes:
"We like small, complicated projects." – Josh Young ([04:02])
"High rises are not for us." – Josh Young ([04:18])

5. Financial Management: Navigating Payment Structures

Josh discusses the complexities of commercial contracts, particularly the extended payment terms that can strain cash flow. To mitigate this, Tempe Mechanical implemented billing structures that allowed them to invoice ahead of schedule, ensuring smoother financial operations.

Notable Quotes:
"Every contract we sign is set up in a way that the contractor is going to benefit." – Josh Young ([05:40])
"We're always behind most of the time when it comes to payments." – Josh Young ([05:55])

6. Leadership and Decision-Making: Embracing Team Input

Highlighting the importance of collaborative leadership, Josh shares how involving his team in decision-making processes led to more informed and effective business strategies. This approach helped avoid past mistakes and fostered a culture of continuous improvement.

Notable Quotes:
"Letting some of my other leadership and even some of the people down, even further down make some decisions and have some input, changed my views." – Josh Young ([10:26])
"I think Vistage has helped me quite a bit in that sense." – Josh Young ([25:07])

7. Private Equity and Long-Term Vision

Tommy and Josh delve into the role of private equity in business growth. While Tommy shares his positive experiences with private equity, Josh expresses a preference for maintaining a family-owned business, focusing on long-term sustainability over immediate exits.

Notable Quotes:
"My BHAG is, is 100 million I want to do in, in one year." – Josh Young ([13:48])
"I don't really have any plans to sell right this minute." – Josh Young ([13:57])

8. Performance Pay and Team Motivation

Tommy introduces the concept of performance pay as a tool to enhance team engagement and productivity. He emphasizes the importance of aligning employee incentives with company goals to foster a motivated and dedicated workforce.

Notable Quotes:
"If your people don't know what's in it for them, then they'll never work as hard as you." – Tommy Mello ([26:02])
"The biggest thing we're taking is these AI classes because..." – Tommy Mello ([45:31])

9. Embracing Technology and AI Integration

Both hosts discuss the transformative impact of AI and technology on the home service industry. Josh highlights how AI tools are being utilized to analyze calls, improve customer service, and streamline operations, ensuring Tempe Mechanical stays ahead of the competition.

Notable Quotes:
"We're taking these AI classes because..." – Tommy Mello ([45:31])
"It's a data analytics model called Power Bi." – Tommy Mello ([51:02])

10. Talent Management and Apprenticeship Programs

Addressing the industry's talent gap, Josh outlines Tempe Mechanical's initiative to establish apprenticeship programs. These programs aim to educate and train the next generation of technicians, ensuring a steady pipeline of skilled workers.

Notable Quotes:
"We're all creating apprenticeship programs. So that's one of the things we're starting this year." – Josh Young ([52:14])
"We want to educate and teach people, because... do it yourself." – Josh Young ([53:39])

11. Work-Life Balance and Time Management

Tommy shares his perspective on maximizing productivity within the limited hours of a week. He emphasizes the importance of delegation, efficient time management, and leveraging tools to reclaim time for high-level strategic decisions.

Notable Quotes:
"There's 168 hours in a week. How do you make the most out of those 168 hours?" – Tommy Mello ([42:01])
"Get an old fashioned journal... and then that's the first hire you make." – Tommy Mello ([43:30])

12. Closing Insights and Future Outlook

In the concluding segments, Josh and Tommy reflect on the continuous evolution of the home service industry. They stress the importance of adaptability, embracing technological advancements, and maintaining a clear long-term vision to ensure sustained business success.

Notable Quotes:
"I think it's going to start... imagine how many hours a week." – Josh Young ([47:42])
"If you're not meeting like you are with people every single day... you just don't know." – Josh Young ([31:07])

Key Takeaways

• Strategic Focus: Aligning business projects with company strengths ensures sustainable growth.
• Financial Prudence: Implementing effective billing structures safeguards cash flow amidst challenging payment terms.
• Collaborative Leadership: Involving the team in decision-making fosters a culture of trust and innovation.
• Embracing Technology: Leveraging AI and data analytics can significantly enhance business operations and customer service.
• Talent Development: Investing in apprenticeship programs bridges the industry's talent gap and nurtures future leaders.
• Work-Life Balance: Efficient time management and delegation are crucial for maintaining productivity without burnout.

This episode serves as a valuable resource for home service entrepreneurs aiming to navigate the complexities of the commercial landscape. Josh Young's experiences and strategies offer actionable insights into scaling a business, managing financial challenges, and fostering a motivated and skilled workforce.

For more detailed strategies and real-world examples, listen to the full episode of The Home Service Expert Podcast.