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To The Point - Home Services VIP Room Podcast
Peak Season Strategies to Maximize Your Revenue This Year
01:09:46
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- [00:00]
Chris
You weren't some miracle guy or some miracle company then it just keeps destroying everybody. Is still a privately held company just doing his own thing.
- [00:09]
Chad
Five years in the Marine Corps, I led interrogation teams and developed informants. That doesn't translate right into maybe an HR or something. That translates. We had a run where it was 7 plus years of 30 plus percent organic growth. Right. But now that we've surpassed 100 million in that market, we've realized like, we can't sustain 30% growth in a market like St. Louis. Once we're at this scale, 30% becomes a lot harder. Right. Add a $30 million chunk to your business in a year. So that's part of the reason we went to Nashville. That's why we acquired in Denver. We got 130 team members up there. So we said, how do we get into these markets that have wind at our back where there's a ton of population growth, there's a lot of favorable dynamics in the market. So that's where we want to start are the things that are high impact, low effort and then we work our way down that list to the high impact but high effort stuff. And so. And sometimes. But we got a balance because at the end of the day you only got so many change points. I can't go this into business and blow up a hundred things at once. Right.
- [01:02]
Chris
Because it's not some secret sauce. You're just like go mode constantly. This is to the Point a Rhino experience voted one of the top home.
- [01:15]
Chris Hoffman
Services, marketing and operations podcasts.
- [01:18]
Chris
Cutting through the and getting to the point. Hey, it's up to the point listeners. It's your boy, Chris. How you like that intro? Just something about looking at the screen and seeing Chris Hoffman just makes me want to talk like this.
- [01:37]
Chad
The hairline, it does it to my wife too.
- [01:40]
Chris
I mean, you can dock a couple boats there, buddy. I like it. I mean that's, that's the gift that keeps on giving. We are excited to have our friend Chris Hoffman on the podcast today. I. I am. It's guys, it's an exciting day. I know you guys know this because we have, obviously we're buddies, we have personal relationship. Today's a good day in the rhino world. Now though, this is coming out, you know, at the beginning of June. Today is actually May 7th that we're recording this and the official announcement that my gorgeous, smart, intelligent wife is the president of Rhino Strategic Solutions and taking over all of day to day operations to lead us to the promised land. And I am so pumped for it and I. And I appreciate your guys's support because, you guys know, incredibly talented she is. But it's a good day to be a Rhino. I'm excited for her to take control and. And lead us. Like I said to the Promise, it's exciting. I'm glad it's not your boy. It's. It's Anna. She's doing all this stuff, which you guys already know.
- [02:41]
Chris Hoffman
Really.
- [02:41]
Chris
It was her that ran it before. So having her step back in and being able to take over leadership is a big deal. And we're excited about that. So I flew in here, like, not literally, but I drove in here really, really fast because I was over at a conference before I got. Have you guys ever heard of. I hadn't never heard of this organization until, like, maybe a couple years ago. Have you guys heard of Blue collar success group? Chris Crew? Kenny Chapman? Have you heard of those guys? Okay, I didn't. I didn't know who they were until a couple years ago. And then they have. They're having an event here over by the Cardinal Stadium. And so I just went over there to. To meet with Chris and Kenny and introduce myself, say hello, and. And watch Ryan Kettering speak, who's the CEO of Prolific Brand Design, who I was able to just partner with. So I was able to acquire 60 stake of the business. And I'm excited about it because at Rhino, we've probably used them. 30 or 40 different customers of ours have been super successful. And then Chad and I leveraged his branding for our roofing company, Redbird Roofing, and the drone business I've used them for. So, like, not only am I a. A user of Prolific, I'm a fan of Prolific. Okay? So I thought, why not just, you know, pull a Ken Goodrich and buy. Buy the business? And. And so that's exactly, exactly what I did. So it was exciting to kind of go and be a part of it. And as being there as Prolific versus Rhino, a little bit weird, but it's exciting day, boys. It's exciting day.
- [04:10]
Chad
And congrats to Anna. That's huge. That sounds exciting. Sounds like it'll be a great, great next chapter, dude.
- [04:15]
Chris
So pumped for it. You know what? Chad's gonna be really disappointed today, Chris, because part of me coming in here last minute was I forgot my damn dad jokes.
- [04:26]
Chris Hoffman
Oh, thank God.
- [04:27]
Chris
So I. I don't have them to share, which is unfortunate because I know how much you love them, and I just disappointed you today. So there's my one black eye for the day as I forgot my dad jokes. Unless Hoffman's got some. I'm sure he's got it, but I don't know if he could actually tell him on air.
- [04:42]
Chad
No, I love dad jokes, but I don't have a good roll of necks of them.
- [04:45]
Chris Hoffman
Yeah, I always wanted to be that guy who could. Like everybody knows that guy who just rolls jokes off like the tip of his tongue. My, what a good friend of mine, his dad was always that guy. Hey, I got a joke for you. I got a joke for you. I was like, how do you remember all this stuff?
- [05:01]
Chris
Oh, Pete, you jokester. Well, we're excited. We got our buddy Chris hoffman On here, CEO of Hoffman Brothers over in St. Louis. Nash Tucky. How much time do you actually spend over there, Chris? Do you go over there very often over to Nashville?
- [05:12]
Chad
Not a lot. I've got. So that there's some great ops leaders there and, and they work directly with my brother Joe. So I'm probably down there once every other month or so meeting with the team and. But really I think they like me out of their hair. They're doing a great job running that thing.
- [05:28]
Chris
You said hair. And I gonna let that one go this time. Okay. It was a nice little segue for me. So you're staying pretty much in the. In the loo. And by the way, I mean, listen, you got a farm you gotta take care of too, so like that shit's a lot of extra work that you didn't necessarily. You knew it was gonn work, but did you really know it was going to be this much work?
- [05:43]
Chad
Yeah, yeah, yeah. It's still, unfortunately, still a lot of travel, but just not, not to the. The Nashville operation. But I actually ran into your guys, GM at Redbird. We never got a connect.
- [05:53]
Chris Hoffman
We.
- [05:53]
Chad
We happened to be in Florida at the same time in Miami. And he shot me a note when I posted something and we were staying at the same hotel and he goes, he goes, if you've never met before, you're not gonna believe this. And he sent a picture in the hotel lobby. He's like, I'm here. And we couldn't end up connecting. But that's kind of funny.
- [06:07]
Chris
Small world. That is random. I'll be damn.
- [06:11]
Chris Hoffman
Small world.
- [06:12]
Chris
Chad, who the hell did you run into when you were down in Mexico? Who was. I forget?
- [06:15]
Chris Hoffman
Trey McWilliams. We're in a trip, we're in a pool and I'm like, I feel like I know that guy. But this would be really awkward in Mexico at a random resort to go up to somebody and think I knew him. So we made some, like, awkward, like, con. Like, eye contact, like, kind of sizing each other up, like, I think we know each other. And then, yeah, they ended up being at the same place randomly. I was there on my wife's work trip, of all of all things, like just some random trip that we were taking.
- [06:45]
Chris
Work trip at the nudist colony.
- [06:46]
Chris Hoffman
That's right.
- [06:49]
Chris
Trey, it's cold in here, buddy.
- [06:51]
Chris Hoffman
Yeah.
- [06:51]
Chris
Okay, let's get after it. So a couple things we're gonna hit on today. And. And listen, I'm gonna give credit where credit is due, because I was. I've been a little busy these last few weeks. A lot of things happening, and not that all of us aren't busy, but today, you know, typically, you have a time. I do some prep for this podcast, and because we're all buddies and we have a lot of these conversations, like, this should be a pretty easy one, but usually I prep better than I did. And I said, chad, Chad, need to tap you in, buddy. Because I have not prepped at all for this particular podcast. And Chad stepped up and he has helped us figure out what we're going to talk about today. So, Chad, by all means, kick us off. Just let the listeners know, man, what we're going to hit on today, and then we're going to jump right into some topics.
- [07:32]
Chris Hoffman
Yeah. So I think we're going to talk, you know, this. We think this episode will release kind of early June. So I think, you know, talking about how we're. How people are preparing for the busy season. I think in most. Most areas, or at least the ones that Chris and I are in, is Memorial Day is kind of the kickoff to all. All things busy season. So we'll kind of talk about that, like, what our thinking is. What. What, what. What we're making preparations for. I think talking about. Chris and I were at a roofing conference. What was that? Looking at my calendars a couple weeks ago. Three. Three weeks ago. Ish. And we were talking about just kind of overhead and where that goes and what we can be looking for as we get bigger. Obviously, there's a lot more moving, a lot more plates spinning that we've got to keep track of. So talk a little bit about that. And then the last one would be kind of just how we view training. You know, I think Chris and I started kind of the. Our training academies are roughly about the same time. Ish. We'll call it kind of 2020 ish around there. And so I want to talk a Little bit about that. I think that they're. I think the landscape has changed a touch from back during COVID when it was just hire as many people as you possibly could and how are we going to train them and so on and so forth. So I guess before we get started, though, and Chris may or may not know that I heard this conversation. So we're at this roofing conference, we're at this dinner, and he ran into another gentleman who I believe was a veteran, maybe not. Maybe had just done some. I think. I don't know. He did. He was doing some mission work, like over in Iraq or Afghanistan. I can't remember Afghanistan, somewhere like that. And I, like, overheard Chris telling these stories about kind of the military and his experience there and all of this stuff, and it just floored me. Like, I was just like sitting there like, oh, my God, like, the things that our armed forces have to go through from training to actually being there, and different stuff like that. And so I guess, Chris, the question I would ask you, because I know that there's a lot of people in the trades that are former, that are veterans and have served and all of that stuff, like, what is you, like, from a leadership perspective? Like, what. What did. What did the military kind of teach you? Or probably better said, like, what are those things that, like, as you're going through your day to day and facing challenges that you, like, look back and like, I remember. I remember where I learned that. Like, that was like a first, you know, that was my first introduction to that principle or whatever it was.
- [10:14]
Chad
Yeah, yeah, it's a good question. Thanks for bringing that up. That's why I don't have any hair those five years in the Marine Corps. You know, I think a lot of veterans who transition, whether you're leading a business, whether you're a technician, I think a lot of people struggle with translating their, like, hard military skills into sort of this. This civilian career path. Right? Because the reality, like, I led interrogation teams and developed informants, that doesn't translate right into maybe an HR or something that. That translates. But I think the things that do translate really well. I mean, what are the things we want in our team members and our leaders and our business? We want people who are reliable, who freaking show up on time, who are prepared, who, like, want to execute it at a high level. Right? Who can. Who can communicate really well, Right. Who can rally around, like, being part of a team and wanting to, like, deliver. Deliver something that. That, you know, deliver on something that's better than themselves, bigger than themselves. So I think people don't put enough emphasis on, like, a lot of the soft attributes that. That veterans learn being a part of that culture. And I think you should take a lot of pride and in those things because as we all know, leading businesses, it's sometimes it's hard to get people to do the basics, the showing up on time. Right. The looking clean and presentable and shaving your face and. But veterans seem to have a lot of that stuff dialed in. Right. And I think that stuff. It matters tremendously whether you're a leader in a business like ours or whether you're a field pro out there, individual contributor, those skills are incredibly value valuable no matter what role you're in.
- [11:43]
Chris Hoffman
Yeah, no, I think that's super insightful as far as, like, how do we translate that? And I think that goes for not even military, but, like, what are your other experiences? You know, we've all had instances where we brought someone from outside the industry. You know, that's kind of the big buzzword. Oh, you got to bring people from outside the industry. And it's like, well, what are the skills that we're actually looking that will translate really well? Like, yeah, you're smart, but, like, what are the other things I always look for? For me, it's like emotional iq. Like, can you, like, get in a room especially can you. Can you talk with. Maybe at a very high level, but then also sit down with a technician and relate with them and figure out what's going on and they understand that you're there to help. And I think for me, that's been the biggest thing. I feel like people can either talk on. On one side of the fence or the other, and those people that can jump back and forth and have a con. Be able to relate with people is hugely impactful.
- [12:39]
Chad
Yeah, no, I think that's right. And I think even if you're not in a leadership role, like, even for our frontline team members, taking that same analogy about being able to communicate and sort of flex your style? Same thing with customers, right? Like, how do you take something that's inherently complex and difficult, and how do you make sure that you're communicating in a way that they can understand? I mean, it's amazing. In four years in the Marine Corps, you get the experience that, like, some people don't get the chance to have until they're like, in their 30s or 40s later in their career.
- [13:07]
Chris
Right.
- [13:07]
Chad
You're leading teams, you're getting big budgets, a lot of pressure. You're responsible for gear that's really expensive. Like those are just all, all things that a lot of people in other walks of life just don't get the opportunity to do, right? Where you could be leading a fire team of people and you're over in a combat zone and you're executing a mission and you've got sort of your own, all these different things people are relying on you to do. And I think it's just a great pressure test, right, for these young people. And I think you just get, you get 10 years of experience in four years, right. And I think that's really useful for you.
- [13:38]
Chris
So moral of the story is don't hassle the Hoffman because he is certified badass. But it is, I love, I always love, like I, I, I love whenever you tell some of your stories from, from over there, at least some of the ones that I've heard. But it, but you know, one thing we kind of skipped past though, and all this stuff plays right into it. And that's, you know, you guys are, you guys are both leading big businesses. But this discipline, like how you, you know, communication is, is key. Making sure that you've got, you know, consistent communication across your team, your leaders. Everybody's kind of marching to the beat of the same drum. Like all these things are important as you're scaling these companies. And Chris, you've been scaling like crazy. Like, no matter what, every time I talk to you or we, or we're all in our group chat or whatever, you're always talking about like these, you know, you just have this constant growth that's happening for you and it's just like you're in, you're in St. Louis like, and you, you know, you have, or you're in Nashville, St. Louis, but you know, the biggest chunk of your business is there in Missouri. St. Louis. How the hell you keep scaling so much? Like what you weren't some miracle guy or some miracle company, but yet you continue to grow and people are, you know, and you kind of like just do your own thing. Like for those who don't know, yes, we, you know, we have our peer group of guys and Hoffman's like the rogue dude that does his own thing. It just keeps destroying everybody. Is still a private, you know, privately held company just doing his own thing. And, and I love this about you, dude, because you could, I don't think like, like nothing distracts you. You're just like go mode constantly. But what are you doing, man? How the hell is Hoffman just keep scaling so much. What are you like, what is it, that you're doing because it's not some secret sauce.
- [15:11]
Chad
Yeah, it's funny, the, the LinkedIn and Twitter posts, Chris, they make it all look great. You know, that's, that's the beauty. You know, like any good business, if you look beneath the surface, it's, it's controlled chaos, right? Like, like most businesses. But a couple of things. So actually I got a call yesterday from a leader in one of the big consolidators who operates a lot of brands in the Midwest. And he was asking this question because they have a brand in St. Louis and a lot of people are asking this question is like, how are you doing? Because they want to know, like, it's hard. In some markets people are still experiencing a lot of growth. In other markets their brands are shrinking. But so I got that call from a leader of another one of these, these home service consolidators. And, and he was asking, because we're all asking the same question. It's not useful for me to compare my business in St. Louis to somebody operating in Phoenix or Scottsdale or to somebody operating in Dallas and say like, oh, well, they're growing. And I'm not. Right. Because there's different weather patterns, there's different economic conditions, all these things. And so it was, you know, and I share that because like St. Louis is a market that candidly, population's not growing right there. We have headwinds, right. It's complex. The licensing dynamics are a pain. And the reality is our St. Louis brand right now, year to date, is now only growing at upper single digits year over year. Right. Which is not huge growth. We had a run where it was 7 plus years of 30 plus percent organic growth.
- [16:33]
Chris Hoffman
Growth.
- [16:33]
Chad
Right. But now that we've surpassed 100 million in that market, we've realized like, we can't sustain 30 growth in a market like St. Louis. Once we're at this scale, 30 becomes a lot harder, right. To add a 30 million dollar chunk to your business in a year. So that's part of the reason we went to Nashville. That's why we acquired in Denver. We got 130 team members up there. So we said, how do we get into these markets that have wind at our back where there's a ton of population growth, there's a lot of favorable dynamics in the market. And then as a small business, I think it's really easy to capture share, right. Stick out your elbows and compete against the guys that are there. And, and that's what we're doing. So we're getting the Bulk of our growth now in markets like Nashville and in Denver and in roofing where they're I think a lot less sophistication among sort of the competitors in that, that world. So I think that's what's driving our big growth today. Organically. It's not our core Hoffman St. Louis brand. We've reached a point where I think that's going to be, we're going to hit singles and doubles in there, but that's not going to allow us to drive consistent double digit growth for years.
- [17:29]
Chris Hoffman
Years into the future.
- [17:30]
Chris
Got it. So, so I actually forget that you're in Denver until you had just mentioned that, that. But when did you do that?
- [17:37]
Chad
Because that was, that was October of last year. Yeah, Good, good business. 27 million, about 130 team members. Great, great family owned operation and looking for sort of that next, next transition. And I've known him for six years and so we, we connected, realized there was a ton of alignment and that's a business where, my God, give me, you know, 2026. I think that business can, I think that can be a 40 or 50 million dollar brand. So much opportunity, such an awesome brand. And we're excited to sort of bring a lot of our experience to bear on growing that business. Is it multi trade, H vac, plumbing, electrical?
- [18:10]
Chris
Yep, the holy trinity.
- [18:11]
Chris Hoffman
Chris, when you go into these markets and obviously the majority of listeners aren't buying a $27 million operation, they may be buying something smaller, whatever it may be. And so I think your, your advice can be, you know, maybe tailored to them. So let's just say you go in and you buy a $5 million business. Like where are you looking when you say add value? I know we've talked about this but like when you say hey what, what are the, when I'm looking at actually buying it. And then you know, day one through, you know, eight, ten months down the road, like where does your team attack to drive value?
- [18:48]
Chad
Well, I'll say this, the playbook's different business because the reality is every business is going to have different needs. They're going to be strong in different areas, weak in other different areas. And so what we do, here's the approach we take when we, when we go to partner, we put together an integration team. So we say on our existing team, who are our rock stars and really great pros in our business that, that we can plug into this business in each of each of our different functional areas. We get somebody from marketing, somebody from the people team, right? We get somebody from Accounting and finance. We get ops leaders. We now have created an ops and integration leader, both a VP and a director level leader who really drive a lot of this, a lot of the integration work. But they've got this integration team behind them and then we're just very. So we plug into that business and we're there to learn. Initially, we try and do as much as we can during due diligence. We actually call due diligence operation head start. Right? We're getting in there and we're learning so that we know when we close, like, where are we starting to drive? Where we start to, like, where's the rubber hit? Meat in the road and where we start to drive improvement right away. And so, and sometimes. But we got a balance because at the end of the day, you only got so many change points. I can't go into this business and blow up a hundred things at once, right? So what, what that integration team does under the leadership of those ops, Ops and integration roles is they'll prioritize everything that they see that we might want to change, whether it's pay plans, whether it's our profit pricing method, whether it's installation or quality standards, or whether it's equipment pricing that we can go negotiate better, or whether it's their marketing team. Maybe they're not with Rhino, maybe they're with the worst, worst agency. And we need to say, hey, we're going to take that over because we see bad results in the marketing bucket or maybe it's call center ops. So we're looking at all those things and we're just learning. And then once we've got that list of all the things that we say, man, we need, we need to do some change here. We prioritize them on two dimensions. So each of those items we say, if we fix that or change it, what is the impact of that change? Right? And then the second dimension is what is the effort required to deliver that change? So good example is maybe equipment cost. That's super high impact. In that case, we saved almost a million dollars on day one just from our negotiated national equipment pricing. That was high impact, right? Immediate high impact. We could push in place. And it was really low effort, right? So that's where we want to start are the things that are high impact, low effort, and then we work our way down that list to the high impact. But high effort stuff. That's going to take a little bit heavier of a lift. But that's our methodology. And we got to bring the leaders and the team along with Us, Right. They have to see and understand that the reason we're driving these changes is not only to make the business better, but once the business is made better, we can drive improvements in their compensation and benefits. A good example of how that worked out. Right. With Ferguson, they knew that we had free 100 paid health insurance at Hoffman Brothers for our team members. So nobody pays any premiums. Almost $20,000 per employee we play. So they really wanted that. So as we're driving all this change, asking them to do all these things differently, they were bought in because they said, hey, this business is going to stand by their commitment to invest in me. So here we are, we bought that business in August of 23. So almost two years later and we've gone from a $12 million business to a $30 million business doing a million two on the bottom line to being able to do north of three on the bottom line. And now they have free health insurance. Right. As an example. So driving the change in how we do it's important, but also connecting the dots between why we're asking the team to do these changes and our ability to take better care of them. Does that make sense?
- [22:06]
Chris Hoffman
Yeah, I think that's such a powerful point, is always the, well, what's in it for them? Like, change is hard, change is difficult on any level. But like to your point, if there's something reciprocal like, hey, we're going to do this for you, yes, we know change is difficult, but at the end of the day, we've done this before, we have a pretty good idea that this will make everyone's lives better, you know, and I think like negotiating equipment. Well, the only way to pay for your health insurance, all of it, is to renegotiate our equipment pricing so that we have the dollars to actually pay towards health insurance as opposed to 20% more on that furnace that we're putting.
- [22:47]
Chris
In a question for you. You're talking about, you talking about high impact, like high impact, high effort, high impact, low effort. Like that whole like pecking order of things that you're accomplishing. Are you doing something like that? Like in the main bit? Like, probably not like that, but some variation of that. Just in the main business too. Like, what's the frequency? Like what are you doing? What's the frequency if you do that?
- [23:09]
Chad
Yeah, well, I think that lines up with our strategic planning process for our core businesses. So we, we have goals which are sort of three to five year targets and then we have strategies which are like one year targets that are. And all of this cascades, right? So our strategies are aligned to our goals and then we have initiatives that are aligned to those one year strategies and initiatives are three to six months in length and those are like must do, can't fail, project based work that we're going to deliver. Like an example is we have a price book overhaul that we're going through right now and we have to get it right. We're improving the quality of descriptions, improving the photos that go in there. We're categorizing all of our tasks into low perceived value, medium perceived value, high perceived value. And then we have different billable hour rates associated with like the customer perception of value across those task codes. So whole price book overhaul, but that's an example of like a three to six month project with maybe, maybe there's a second phase or second project depending on how we, how we scope it. But yes, when we go through that strategic planning process and we're picking initiatives that are aligned to those strategies, on our list of initiatives coming out of strategic planning, there are like 25 flipping things on there that we wanted to do. But the reality is I can't come into our team and say we're doing these 25 things in Q1, so we only pick five, right. And they're three to six months in length, those initiatives. And now they can vary by business. Some of them might be the same, like price book is affecting our whole footprint. But like Ferguson Roofing may have some different initiatives that aren't necessarily the same as Hoffman, St. Louis, Hoffman, Nashville, Blue sky and Denver. But any business is not going to have more than five because we want to make sure that. I think the trap that businesses fall in is they, they deliver a whole lot of stuff, but they do it all in a very mediocre way. And my approach now going into this year is we're going to the things we say we're going to deliver on. I want to pick less, but I want to deliver them in a very high quality, high impact way.
- [25:00]
Chris Hoffman
I think that makes a whole lot of sense. I'm going to ask a selfish question here because what you said just piques my interest because we've talked about this, but you framed it a hell of a lot better. Which is usually the case. The high medium or high medium low perceived value with different billable rates. Tell us more.
- [25:18]
Chad
Man, I should take this one offline. This is the secret people doing well, here's the reality, right? So we go to a customer's house and it's a customer supplied ceiling fan. Their perception of what they should be charged to hang the ceiling fan in a bedroom, right. Whatever it is, is, is, it is different what they think they should be charged per hour for that task than what they think is reasonable to be charged to replace a whole electrical panel service entrance. Right. Those, they perceive one as complex. You can't mess it up, it affects the whole house. There's safety considerations. They perceive the other as, hey, I could find a guy on Craigslist and have him hang my fan, right? And I don't want to chase off my customers by taking the same billable hour rate, the same rate that I charge for a panel and apply that same billable hour rate to hang in a ceiling fan. So some of my task goes, the math we did is that my net price to the customers based on the weighted, the weighted average of like the weighted value of each of those task codes. So we did the math before. After these price shifts, we want the revenue to be the same. But now we're getting more revenue on high perceived value tasks and we've accepted lower for low perceived value tasks. Because I'm trying to avoid price complaints too. I mean, that's part of what you get is if you go out to do those low value tasks and someone's. And then you might chase off customers because they may be like, oh, look what they charge me to replace this outlet cover. There's no way I'm going to charge them or ask them to do my panel. So it's kind of like, hey, we accept lower gross margins and lower values on these smaller task codes, but in return we look to recoup that on the higher perceived value type work.
- [26:51]
Chris Hoffman
Yeah.
- [26:52]
Chad
Does that make sense?
- [26:52]
Chris Hoffman
100%. I mean, we looked at this. It was something that I looked at. I was like talking to customers. Every now and then I'll have like a customer complaint that I'll deal with. And I'm like, when you're sitting there going, oh shit, I don't know if I would pay that to do just something very simple. And it makes sense. Like that's how we've all been taught, right? Well, make sure your billable hours, right? Make sure you cover overhead, so on and so forth. And I think that what you're doing and we've done something similar, not to that degree, which I'm going to go back and take a look at, but like these lower things, like especially for your membership base, like you want them to think, ah, crap, I just call this guy and you know, they'll take care of it we just added to our membership, free drain clearing across the board. I got the idea from Bancroft out at Morris Jenkins, and I was like, so tell me about this. He's like, well, like, it's a great perk to the membership because everybody has a slow drain. And not as many customers these days associate the regular maintenance on their H vac system as value. So they're like, they're probably thinking, I got to take a day off work. Like, if it's working, it's working. I don't really give a shit, whatever. But everybody has a slow drain. And so we added that perk to the membership to again, add value add. It's a lower perceived kind of thing of like, oh, I kind of need this, and hell, I'll join the membership. I'm gonna probably have you out twice a year to clear a drain. And we know that, you know, a lot of times you're just clearing a drain. There isn't a whole lot of like, you know, selling them extra stuff or whatever it is. It's like, my sink's clogged in the bathroom. Please fix it. Thank you. Talk to you soon. So, yeah, I think that you're spot on with that. I think that's something that listeners can definitely take a lot away from if, especially if you're getting like, complaints on the pricing. Like, you know, you can only stand behind the, the cost of replacing the flapper for so long before you're like, that is a little salty, I think. Yeah, yeah.
- [28:53]
Chad
Even like small ones, like smoke detector batteries, like just what's a flat? What are you trying to. 50 bucks. You know, just like, not a huge deal, but it's like a, a quick value add that you're in there with a homeowner. Maybe they're elderly, maybe they can't access it. Just like, especially for your members. Yeah, those are things that, like, we should just do when we're in the home and not, not try and charge the same billable hour rate.
- [29:13]
Chris
You know, I could, I can imagine right now people thinking because you're, you're basically talking what Tommy. Well, Tommy will say, long term greedy. You're thinking like, hey, like, I'm doing this right now because it's proving value. Proving value. And then when it pops, they're going to be like, oh, God, these guys always took care of us. They didn't. Right. Because. Yeah. So I can imagine people listening right now thinking, dear God, how am I going to figure out how to price change pricing on put, you know, installing an outlet or A outlet cover or a light cover. And by the way, I should know the answer to this because in Chad's room at casa de llano, I had to change out the light switch because he couldn't figure it out.
- [29:49]
Chris Hoffman
I slept. I slept one night with the lights on because I could not figure out how to turn the damn thing off.
- [29:56]
Chris
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- [31:21]
Chris Hoffman
That's right. Yeah. But I think, to answer your question, I don't know how Chris would answer this, but like, for me, it was literally just going through with my customer.
- [31:29]
Chad
Hat on.
- [31:30]
Chris Hoffman
A great person to ask is your cfo. So, like, my CFO actually unbeknownst or probably different from most, he's pretty handy. And like, so I just like started like asking him, like, reading off the task and being like, would you pay for this? And he's like, hell no. I go, okay, well, that's the task right there. I said, okay, let's go to the next one. Would you pay. Would you pay this dollar amount for this task? Oh, absolutely not. Would you pay for this? Well, yeah, probably. I don't know how to do that thing. Whatever. Whatever it was. And I think really you can kind of almost dumb it down to a certain. I don't know how you guys went through the process. Chris. It's kind of figuring out what tasks were. But that was a very simple way for me. I was like, yeah, that doesn't seem right.
- [32:09]
Chad
Yeah, no, that's exactly right. We, we did that and we grabbed some non technical people in our business and we gave them the description, what it was. And then the best way to do it, I think, is have like a field pro there who can also explain. Because the reality, the perception of its value, think about it. Not from us sitting in an office and reading the description. Think about it like you're sitting in the basement and you're with a customer and you're looking at the electrical panel and they're asking you about, oh, so you're going to do what to my panel to replace that breaker? Right? Like, think about the value that they're going to perceive through not only the description, but what the field pro is relaying to them. And so having the field pro there as you march through all the tasks to answer those questions and present what that looks like, then allows them to say low, medium, high. And so you go through, grab some people that aren't technical by background and go through that process. And it's not perfect, by the way, the other way. So after you built it and you put it in place and you're rolling it out and doing that work, then you can set like a good leading indicator for whether your pricing maybe is in the wrong bucket, is your conversion rate. Are you seeing a lot of single tasks? For one type of call that you're seeing, you're converting really low and you're like, oh, shit, why am I trying to charge 280 bucks to swap a light cover, you know, whatever it is.
- [33:20]
Chris
Hey, I want to impress you guys real quick. Are you ready?
- [33:22]
Chris Hoffman
Oh, boy.
- [33:26]
Chris
That doesn't sound very encouraging, Chad, since we're talking about electric. And I actually was thinking through this and I started, I have my homeowner hat on. I'm thinking like, would I pay, you know, what would I pay to have somebody come and install a breaker in my house?
- [33:38]
Chad
House.
- [33:38]
Chris
This is like real life. Like real life stuff that happened here at the Yano house. Okay? I. I go out to the garage and. And Mason's got his electric bike, My son's got his little electric bike plugged in. And I'm like, this thing's not charging. Like, what's going on? I'm like, wait a second. Trying to open the garage door. Garage door. Don't know. I'm like, what in the hell's going on? Like, that side of the garage doesn't work. Out Chris way. My house is laid out. I've got, you know, two separate garages. And it wasn't working. So I was like, something's wrong. And I'm like, I'm looking for the gfi, you know, I'm like, oh, it's good to go. I'm like, so it's got to be a breaker problem. So I open up the old panel, you know, because, you know, I'm a troubleshooter, Chris. I go to the panel, open up, and the breakers tripped, and it won't reset. So I'm like, oh, bad breaker. Because, you know, I'm an electrician. So I'm like, this can't be that difficult to change a breaker. It's one wire. I'm like, so your boy said. I asked Jamie, I started my assistant. I said, hey, we just. We see what the, you know, they're gonna charge us to come and swap out this breaker goes like, I don't want to deal with it.
- [34:38]
Chris Hoffman
It.
- [34:38]
Chris
And it was like two. Something like 200, like 240 or something like that. And I was like that. I went to Ace Hardware, I bought the breaker, I came home, I undid it, I installed it, popped it in, and it cost me, what, 18 bucks, $20, whatever the hell it was. And so if. If they'd have come to me, though, and said, oh, this thing's gonna cost you, you know, 100 bucks to do it. I honestly probably wouldn't even. I'd just be like, yeah, that's fine. Cool. 100 bucks. You come and do it and change it. And I just saved myself 15 minutes. But the thought, you know, for me, it was like, 200. Seems like a little aggressive, man, for. To swap out a breaker when it's literally, you pop one wire out, you pop the wire out, put it in, pop the sucker back in. I mean, as long as you don't electrocute yourself, you're good to go. Like, I guess there's life at stake, you know, I guess if you don't know how to change a breaker.
- [35:21]
Chad
But yeah, yeah. The other layer of complexity I would add to price book that I think is useful right when you start. Start playing the price book game on advanced mode. Beyond just flat rate everything the same billable hour rate is like how you then construct your bundle pricing. So, for example, if someone comes out and they're replacing their breaker and we have to charge more for that first task code because, like, that's all the drive time, right? If we're just running around doing single task Tickets, right? Then, like, that's not super efficient. Versus if I have an average task per call of three or four or five or six or seven, whatever it is, then what I need to charge per billable hour per task goes lower. So having dynamic pricing that can allow your pricing rules to allow you. When you have those multiple tasks and bundle, allow that billable hour rate to come down, and then you'll get higher tickets. Because to your exact math, if you're already out there and you've done a repair, whatever it is on a separate panel, and then you got a bad breaker, it's like, think of your time. It'll take that. That electrician 10 minutes, 5 minutes to pop in the new breaker. So you don't need to charge 280 bucks. You could charge 100 bucks, you know, whatever it is.
- [36:21]
Chris
And I try to think through. I try to think through, like, you know, because I'm in this business, too, and I understand when you roll a truck costs money. Like, so I'm thinking about that, but I'm like. Even at that, I'm like, shit, well, if he comes here, you better do something else. Like, that's where my head goes to. And like, okay, well, I know that I have this other outlet, you know, by the pool pump that needs to be replaced. So, like, maybe let's. Let's have them change that one while we're here, too. But if you start charging me the same billable hour, you know, to do those two simple tasks now, I feel gouged, right? And I'm like, okay, I'm never using this guy again.
- [36:46]
Chris Hoffman
Well, I think the good thing about that, I mean, a ton of great price book stuff. I think more importantly, you know, what you said at the top, Cristiano, when talking about Anna taking over as president, I think what this conversation has lended itself to is Anna now knows, as president, where she can place your talents, and that may be the rhino handyman instead of something maybe more. A little. A little bit more important right now. Breaker comes up, bathroom needs clean, whatever. May be she has her man in more ways than one. Oh, my God.
- [37:22]
Chris
Chad's got jokes.
- [37:23]
Chris Hoffman
Yeah, I was just saying. I was just. I know she doesn't listen, but if she does or happens to stumble upon this episode, you know, there's just a little tip.
- [37:32]
Chris
That's right. This is gonna be the one text message where he sends and he's like, already got the video clipped, right?
- [37:39]
Chris Hoffman
Like, I've never gotten one of those from you. Yeah.
- [37:44]
Chris
Well, thank you for that, Chad. I appreciate it.
- [37:46]
Chris Hoffman
No problem.
- [37:47]
Chris
Usually coming out of his shell, we transition. We're like a little over half hour into this thing. Should we transition into a another topic, Chad? Rick?
- [37:56]
Chris Hoffman
Well, I mean we haven't talked about any of the topics that I said we were going to talk about, but I think we've really dove into some really good stuff here. So that's good. You know, one of the ones was kind of busy season. Like when you think about going into busy season primarily on H Vac, like what are, what are you guys at? Hoffman? Like what are you thinking about? Obviously probably it's a, probably an April and kind of push to get everything situated. Like what are some of the things you're thinking about that maybe others aren't thinking about as they go into the season?
- [38:25]
Chad
Yeah, and I'd love to hear your, your thoughts on this too. But I'll start with. It is really easy in like February, March, April when things are slow to like downsize your workforce. Right. Because that's super easy to get into that mindset. Like on the contrary, I think that's the time where you lean in and try and pick up the really the best installers who maybe aren't getting work. And if you have to carry people that maybe aren't as productive as you would like them to be because you don't have the work, I think those costs that you incur by carrying maybe the right size team during the shoulder season, I think those costs are more than recouped by having the capacity you need when the weather turns when summer hits. Now that being said, I think some of the things we do to expand our capacity heading into summer that can help a couple of things. So one, we have what's called like this is a very tactical thing. I think people could apply right away. We have what's called like a six day volunteer bonus. So say you're an install crew and you've already installed system five days a week. If you volunteer for that sixth day on a Saturday, there's a significant spiff and incentive that goes to both the lead and the apprentice to then go and put in that additional system on a Saturday. And we call that, we call for that six day bonus which is really lucrative for them. Gosh, I think it's almost like 300 bucks per guy plus they're getting time and a half. So these are like thousand dollar plus earning days for them. The each like the installer and the apprentice. But for them that's, that's great. And we bite off, we do that When I see we're like two or three days backlogged, I activate that six day bonus, try and bite that back, keep that backlog as low as you can when the weather turns. And then the second thing we do is we prepare what's called flex crews. So I have a lot of my service department's a lot bigger. Right. And, and the reality is we also put in place blackout days during for maintenances so we won't run low priority functioning maintenances during certain peak months when the weather changes. We just say we're making room for just demand. And then the other thing we do is we activate these flex crews where we've cross trained some of our service pros who were a lot of them former installers, and we'll provide incentive for them to do this to then form two person flex crews that then if we're at say 15 crews in St. Louis, I can flex up to 20 crews by putting 10 service pros together when my backlog gets backed up. And the reason I really like flex crews is it's I don't have to carry those extra install crews all year like because the shoulder season gets painful. If I have 25 crews in the shoulder season, even though I can keep them busy during summer, I don't want that in February. But having the flex crews where I can take folks and mobilize them into additional crews is a great way to keep that backlog bitten down. And at the end of the day, two service guys putting in an install system for 15 grand is going to be more revenue and a better outcome than the revenue that two service guys generate running calls in a day.
- [41:13]
Chris Hoffman
Yeah, I think that's a great point. I, I would think one of the things that we actually just ran across is we staff up for summer. I was having a conversation with our service manager here in Indy and you know, we were talking about like, hey, I'm gonna go, we're gonna go find you like three or four more techs right before the busy season hits. I want to get three or four. And his response was, well, explain that to me because like right now we're, you know, it's kind of, it's mild, ish, it's beautiful out, 75 and sunny. But it's going to get up into the 80s next week. And the one thing that I think is important for either the business owner or your service manager to understand is there we know that we're going to be busier. But his comment was, well, we already have more than we had last year. So aren't we good for growth? And what I explained to him is I was like, the one thing that you never see is you don't see all the calls that we didn't book because we couldn't get there in time. And he's like, oh, I've never really even thought about that. I was like, yeah, you think you're busy right now? Because one, we're only called our capacity states. You know, it's reflective of how much staffing we have. And yes, if we add two technicians, that's another, you know, eight to 10 calls that we can run a day, which is great. But what I told him is I go, I'm looking at all of our missed opportunities where someone wanted me there either today. And we couldn't get there because we were full. And when I'm looking at that in 75 degree weather, I'm saying, hey, there's more demand on the horizon that's going to be there that a lot of your frontline managers have no idea is there. But you do. You realize that, hey, we don't even have to spend another dime in marketing. I just have to have the capacity to go handle this in a timely manner. And that was like eye opening to him. He's like, oh, I didn't even, didn't even think about that. Nor should he. It's not like he has purview into the call center and what we're not booking and different stuff like that. But it was kind of a good lesson and I decided that next Tuesday we're going to talk about this and give people a bigger scope of here's how the business kind of works and here's where we're missing out and here's why we're scaling up and so on and so forth. Because I think, think sometimes managers can feel like, oh shit, he's just adding a bunch of people to me that I got to go take care of and this, that and the other, and what am I going to do? And yeah, I want to hit my budget, but I think I can hit my budget here. And it's like, dude, throw your budget out the window. Like if we've got, if there are calls to be ran, let's go run them and we'll just blow the budget out the water.
- [43:51]
Chad
I think you raise a really good point because. And I think like, naturally my install leaders, like, they love it when there's a two, three, four day back. Oh yeah, let them like get their equipment ordered, be in their groove. You know that that's got like no urgency to like get the next one set up the next day. But to your point, like if you can maintain, you know, nextar talks about this next day availability, it is super hard. But that's why like with the Flex cruise and the six day bonus, like we try and bite down that backlog as soon as we can. Because to your point, Chad, if, if you can say if you're in a customer's home and they don't have H Vac and it's like you can say, oh I can put this in tomorrow and it's 100 degrees outside, like that's a going to be a very different closing rate than if you say I can put it in in three days or four days. Like three days with no AC in July in St. Louis is going to be a problem. Right. I think to your point, there's that hidden demand where if you're at next day, right. If you have that extra capacity, I think you're going to win those marginal jobs that you would otherwise be two, three, four, five days out on.
- [44:46]
Chris Hoffman
Yep. So one thing that here's another tip for, for listeners just to kind of piggyback on this. So this is something I learned from Dave Geiger. I was out at his shop, it's been a couple years ago now at this point, but, but I was out there and they were running this thing. Like I saw on their like website and on their ads they're like, next day install guaranteed. And that was the first question I asked him. I was like, Dave, tell me a.
- [45:10]
Chris
Little bit about this.
- [45:10]
Chris Hoffman
Like there's no way that I know you've been in this business a long time, I know you're super smart, but there's no way that you have gauged how much capacity you need to put in one every day. The next day he goes, yeah, but it gets us in a hell of a lot more homes when customers think that we can and oftentimes we can put it in next day. But he's like, if we don't then we just give him a discount like, okay, we already gotten the home, we won the job. I'm sorry, Mr. And Mrs. Customer, we are completely jam packed for tomorrow. What if I take a little bit of money off this job and we'll put it in the next day? Well, they're getting something for it. You're getting in the door of a job that you typically wouldn't have got into. So we run that all year long. Like even in the summertime, like it's next day Guaranteed. And if we don't, then we'll give the customer like 500 bucks. Okay, here you go. We'll take this off the job. At the end of the day, what's it to us? We got another job on the board. We book it, we're ready to roll.
- [46:08]
Chad
I really like that.
- [46:09]
Chris
Yeah, just bring in a couple oscillating fans.
- [46:12]
Chris Hoffman
Yeah.
- [46:14]
Chris
Just blow the humidity all around there. Yeah. Mrs. Jones, what do you want? Huh? Here's an oscillating thing.
- [46:22]
Chris Hoffman
And at the end of the day, if you can get in the door, you got to think too. Your competition is in the same predicament. And as you get bigger, they're in a lot worse predicament than you are. They're booked out. If you're booked out three days in St. Louis, they're booked out three weeks. And so if I can just get in there and I could put you in three days, not next day, then I still win the work as opposed to. Well, I'm already, I'm not looking anymore because I'm already on the schedule. And I guess I've, you know, come to grips with the fact I'm gonna have to wait three weeks to get this damn thing put in.
- [46:52]
Chris
Hey, so. So when you're, when you're carrying. We're just gonna. When you're carrying the teams before you get into the busy season, waiting for it to come. Is that the time when you guys are this. I guess it's probably for both you too. Is that the time when you guys are starting to like double down on some training and stuff like that? Like in that slower period? Is that, are you playing it that way so they're not just kind of sitting there like twiddling their thumbs or you're sending them home or whatever. Like what are you guys doing to like to offset that?
- [47:14]
Chad
We'll do. We'll do a couple things. One, like, it's just, I kind of think of it like I want a minimum floor for hours that we're going to get. It's probably not going to be 40 hours, but maybe it's 30. Right. When we get in that shoulder season with them. The other thing. So absolutely, yes. Run training. The other thing we'll do is take our H VAC field pros that have extra capacity in the shoulder season, the installers and cross train them to run maintenances on functioning less than five year old systems. Right. Because that's where things are not going to be broken. Heck, have them do it on ones that you installed because then they're going out and running the maintenance on the systems that they've installed that we know where it was done. Right, Right. So they're not worried about troubleshooting and it's something where they just made a buying decision. So there's not like opportunities to upsell as many accessories or other things. So cross train them, have them focus on less than five year old functioning systems that you installed and then that gets them hours too, where they're also revenue producing.
- [48:09]
Chris Hoffman
Yeah, so we do ours. We used to do ours where we did that very same thing. We did training. We still do, obviously training. We don't do the cross training thing. But I wrote that down because I really like that. Especially for like apprentices who may one day want to get into service anyway. It's like, all right, let me take you in. And I like your idea of doing it on the equipment you installed is they put the shit in and it's the brand of equipment that they work on every single day. Like they should know what's going on there. What we pivoted to here at the beginning of the year is we pivoted to a new pay plan. And so that pay plan essentially pays. That pays the installer and the apprentice a percentage of the job that they install. So my guys can make probably 30 to 40% more than they could on hourly by just installing like three days a week. And what it's done is it's helped level out our labor. So like we would see labor swings, you know, in the summer when you're full tilt and running, your labor's running really low, but in the, in the off season, you're, you know, you're just eating it. You're up 12, 13% labor on installs because you don't have the revenue to cover it. So what our thesis is on this is if I can pay you more per job, you're going to make more in the summer, which you're going to hopefully look back and say when you're a little bit slower and you only work maybe two days a week in September. Well, shoot, I've got all this money that I made during the summer when the, you know, when the getting was good and so on and so forth. And I think that we, we tried to do that on hourly, but the hard part was like, well, I was still banking on working 40 hours a week every week for the full year, even though they've been in the business. And it's like, well, why don't we just shift this to where we just pay them a percentage of the job. Like, I've got guys that, you know, installers that will make very, very good money. I've had guys that were trainers or field supervisors go back into the field. They're like, hold on a second. Like, I know how to put this stuff better in better than anybody on our damn team. I'm just gonna go do this and make a ton of money. Like the heavy lifting isn't that big of a deal. I'm gonna go make it while I can. So that helps in the slow season when you don't feel the guys don't feel it as much because hopefully now there's some financial training that goes into this. But, you know, hopefully they've made more money than they ever would have in the busy season. And now in the slower season, they're like, oh, this is great. You know, the weather's nice, I'm hanging out with the kids or doing whatever, taking care of stuff around the house, whatever it may be. So that's something that we pivoted to. I got again, you'll see a common theme. I got that from Jonathan out at Morris Jenkins. I was like, how do you pay these guys? Like, how do you, how are you able to staff for this? And he told me about this pay plan and we moved to it. And we're still, you know, this is month five of it, but we haven't had really any complaints. It's helped in recruiting because guys can see like, it's easy to map, like pencil, like, hey, if you work three days a week, our average ticket is, you know, 12,5. That's this percentage of the job. If you put in three jobs a week, this is how much you're making. And they're like, like, oh, what? I'm like, yeah, it works for me, but I'm not paying you when, you know, I don't have work.
- [51:28]
Chad
I really like that. The other thing I really like about that is the, the incentive to get the job done faster, right? I think if you, when you pay hourly, right, there's really no incentive to get it. If you, if you have a two day job and you think you get it done in one, like why, right? You just gotta bust your tail for it. Whereas if it's summer and you've got a backlog and someone sees a two day job, they can get it done in one. And if they get it done in one, they're still getting paid the same as they were going to get if they got it done in two. I remember when you were telling Me this Chad, when we were in New York together, but my gears were clicking. I sent an email to the team with your, your plan. But I like it for that reason. That's one of the bigger motivators to me is like, if you pay hourly, you get hours, right? If you pay on that, that sort of percentage of the job, you're going to have people that want to get jobs done. You're going to get jobs.
- [52:13]
Chris Hoffman
Yeah, it's worked for us on two sides of the coin, so that. Exactly. So I actually just heard an example from our install manager or that like one of our field, one of our trainers went back in the field, he put in two complete systems last Friday. It was still done by like six, seven o' clock at night and was happy as a hog. He's like, I put in. He put in like over $100,000 worth of equipment in a week. And he made, I think he makes like 6% on that job. He's like, dude, all day long. And the other caveat or the other piece of that puzzle that we looked to solve was warranty recalls. And so what we do is if you make a certain percentage, we hold back a percentage for 60 days. So you get, if you made six, we pay you four, we hold back two for 60 days. And then at 60 days, if you have, if there hasn't been a warranty or recall on that job, then you get your extra kicker on that job. So what we've seen is recalls and warranties have went down because they're like, hold on a second, I've got money tied to that that I'm going to be getting. So I want to make sure that this is done right. So yes, I want to do it efficiently and I want to get it done fast. But I also want to make sure all my T's are crossed and my eyes are dotted because I want that extra. I want that extra 2% there. I mean, I've got a guy, I've got an installer, I think he said this week that will, we will pay him like nine grand, like for the work that he did, plus his like bonus kicker from. Because he didn't have any warranties or recalls. And like, I'm thinking about this installer and I'm like, this dude has got to be on cloud fricking nine. Like, hey, honey, look what I found right before Mother's Day. Look at me. I got this.
- [53:58]
Chad
Yeah. That's amazing. That's awesome.
- [54:00]
Chris
Is that common? Is that very common? What to do that hold back like.
- [54:05]
Chris Hoffman
That I'm not sure if it's com. I can't remember if Jonathan does the holdback or not, but that was like, I think he does because I think I just took what he did. I mean, let's not change it. He knows what he's doing. But. But yeah, I think that they had like a piece. There's different ways to track it. Like, I know some people who will, like, if there's a warranty or recall, they'll charge them like a hundred dollars per recall. So, like, if you had a recall, then like, you may see your check less. You know, if you had two recalls less, 200 bucks for that recall. We found that that way a little bit difficult because, like, well, who's in charge? Was it the apprentice? Was it the lead guy? And so right now it's just like, hey, lead guy, your apprentice is your responsibility. If you know, if it was having something to do with the outdoor unit and he said it and all this stuff, well, you should have checked over his work. You should have made sure it was good, whatever it may be. So I'm not sure if it's. If it's super common, but it's. It's worked. I mean, there again, we're five months in, so let's take it with a grain of salt. But at the end of the day, I think our installers are happier than they've ever been. They're making more money, we're getting more jobs done. And, you know, I think the only thing that we haven't seen, and this just may be from switching over to the program. I think we'll see it in time. We haven't seen the urgency for guys to volunteer, like, oh, I want to get another. I want to go get another job. Like, there's some that get it, but not everybody. And I think that's somewhat of it. Like a generational thing. I mean, we've all dealt with whatever generation they are. Z. Is that what they are? The 20 to 25 year old, like, they. They value their free time a hell of a lot more than they value, like going and do it. Like, I'm gonna work, but I value my free time more, which is fine. Whatever. Right it is who we are. Install is a young man's game. So we're gonna have to adapt to what the. What the young man wants. That is for sure.
- [55:58]
Chris
I'll not be doing installs anytime soon. So even though I have hard work, high IQ on my electrical skills, H VAC installations is. Is not on that.
- [56:07]
Chris Hoffman
Yeah.
- [56:07]
Chris
List so, yeah, you know, the podcast goes so much better when it's just you two talking. This was great. Like, this last little 15 minute stint is like a dream. Like, you guys were on one. That was great. And for the listeners, that's pretty much how our conversations go, at least when we're talking about business.
- [56:28]
Chris Hoffman
Yeah. And the best part is, is Chris and I have been together for shit. We were in New York together. We were in. We've had like our own. The weird part, the funny part is, is like there were other people that were supposed to. Well, you were supposed to come to Dallas, Aaron was supposed to come to New York, and it just ended up being me and Chris and we had a ball. We just hanging out, we working out together, hanging out, talking. It was great.
- [56:52]
Chris
I mean, you guys, our workouts are.
- [56:54]
Chad
Now like walking on the treadmill after doing.
- [56:56]
Chris Hoffman
Yeah, we're old. We're old. But walking on the treadmill turns to one person, pulls an earbud out. Hey, I got a question for you. And then an hour later, we're like, yeah, okay, well, I think we're done with our workout. We got some work done too. This is good.
- [57:10]
Chad
At this stage, I don't think I can run and talk, you know, that wouldn't go well.
- [57:15]
Chris Hoffman
Absolutely not.
- [57:17]
Chris
Not very well. Hey, when you guys were down in. When you guys were down in Texas for that roofing event with Transform and Ryan Gro, you were on. Chris, you were on one of the panels with Tommy. Were you. I think I saw you on the panel with Tom. You guys were on some panels with Tommy and then. And then chat. Who were you two on it? Were you two on a panel together too, or.
- [57:39]
Chris Hoffman
No, no, we both. Both spoke individually and then we're each on a different panel.
- [57:45]
Chris
Different panels. Okay, one. Was there much. Was there, like, though it's, you know, typically a roofing conference. Was there much like home service, other home service guys there that you guys ran into, or is it pretty much all roofing people?
- [57:56]
Chad
I think it was mostly roofing. My vibe was it was mostly roofing.
- [58:00]
Chris
That's pretty much what he. I mean, that's what. That's really what that group goes after is roofing. But I knew he was trying to bring in some more, you know, home sir. He's trying to, like, break his way in there a little bit and know how well it would go. Ryan's super sharp dude. I think the world of him. He's a good dude. Good guy. Ryan gra. OWNS Sales Transformation Group. Some of you guys, we have some roofers to listen to this. I just was curious like, was there something down there that you guys were able to take away from that that you heard that was like, oh, maybe I should consider that in our business. I mean, I don't know what it would be, but is there, was there any sort of like takeaway from that event that you know that you guys like that was a discussion or anything like that? In home services, speed to lead is everything. Chirp stands out. By transforming your communication strategy with Chirp Excel, accelerate your lead response time with instant sms, text messaging, email and ringless voicemail automation. Chirp's cutting edge technology ensures you're the first and the most persistent, helping you close more deals than ever. But that's not all. Say goodbye to missed opportunities with Chirp's incredible follow up system. Keep your leads engaged and moving smoothly through your sales funnel without lifting a finger. And with Chirp deep integration to with top CRMs like ServiceTitan, Housecall Pro and Jobber, you can launch laser targeted campaigns to connect with the exact right leads at the exact right time. Automation creates efficiency. Efficiency unlocks scalability. With Chirp, you can automate speed, delete, estimate follow ups, rehash abandoned call follow ups, cancel job follow ups, review requests outbounding to your list, annual reminders, membership expiration follow ups and so much more. So stop chasing leads, capture them, connect faster and close more deals with Chirp. Contact Chirp today and elevate your communication game.
- [60:02]
Chris Hoffman
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- [60:51]
Chad
My thought, like I left there realizing I don't it's a different business and I realize there's a lot I don't know about roof roofing right where like you know, when it comes to hi plumbing, electrical, I feel like I got the playbook we're fine tuning. We got it dialed in, like, even, like, door knocking. Like, we had this perception where it was like, oh, no, we're just going to be a. A retail inbound demand. Like, kind of like we were above door knocking. And then I hear some people like, no, that we should totally be door knocking. And they explain this honey hole method and how to do it in a good way. And I'm like, I'm like, we're doing this all wrong. We should absolutely be door knocking. And there's people that are. One of the guys I talked to went from like 5 million to 50 million in, like 30 months. And, like, he had a door knocking operation. And I'm like, holy, yeah, we need to start knocking on doors.
- [61:34]
Chris Hoffman
Weirdly. Weirdly, that was the one thing that, like, I'm. I've been so curious about. Like, my team hates me because I'm like, hey, I got this great idea. Like, I think we're gonna, like, knock doors and we're gonna create this team and it's gonna be wild. And they're like, you have literally lost your mind. I'm like, no, no, it works in roofing. And like, that was. We had dinner with Ryan one of the nights, and we were talking about this and, like, going into it, and my wheels were turning. I'm sure, like, Chris's were as well. It's like, okay, hold on a second. Like, I think I can figure this out. And like, I've talked to ever since, I've like, thought like, oh, this is a great idea to produce cheap leads or cheaper leads. They still cost money. But, you know, like, I've just thought about, like, I know that I can't remember his name, but he's out in California and he started like, a plumbing water quality business. And all they do is door knock. And, you know, I've met with, like, painters here in Indy that are doing like 9 million of revenue just painting. And I'm like, well, how do you produce your leads? And, like, we just knock on doors. And I'm like, well, that seems super simple. Why are we making this so difficult? I'm like, there's got to be a way to figure it out. So that was one of the takeaways. I mean, you know, I'm with Chris. Like, it's just. There's a lot of. There's a lot of different things, but there's also a lot of similar things, I feel like, within the two, but it is definitely behind H vac, plumbing, electrical. And I think that's why it's so smart. What Chris has done is like, hey, let's take all this stuff that we've worked so hard on and just sprinkle it on a roofing company. And oh, look at us compared to all our competition.
- [63:11]
Chad
The other thing I would add, totally agree. And I was, I was looking at my, I was trying to find my notes. I. So that was a bunch of notes myself with all the stuff. The other thing I like, you know, for like the Greenfield and roofing, it's just so much more attractive. The Greenfield and H vac plumbing, electrical within bound demand like the traditional method without sort of the storm events at your back. That's just hard. I mean to get to where we are today. We're like just now cash flow positive in that market. Always been positive gross margin. But we had to build a big overhead body. You're buying market share. Your marketing as a percent of gross revenues was too high initially because you don't have any revenues when you start. So you know we're five plus million dollars cash out to get into Nashville. And like I look at a roofing and I'm like, oh my God, the infrastructure investment needed is so much less. It's just marketing, sales. And then you need a production management function which you can centralize, right. And then you have, you just need a network of independent contractors, high quality independent contractors. So it's like a totally different ball game. And even Veritex, right? Who's the sister company of Apex, probably one of the biggest roofing consolidators to date. One of their senior leaders told me they were greenfielding 12 roofing brands at once. Right. Which nobody was doing that in H vac. Why can you do that in roofing? It's a different game and I think that's like super exciting and attractive. And our gears right now in the middle of 2025, we're sitting here asking that question around. Should we reprioritize our growth strategies and should we shift Greenfield and roofing a little bit higher in our stack?
- [64:40]
Chris Hoffman
Yeah, absolutely. I 100 agree. I mean I think the issues that we run into in our Greenfield locations is finding talent. Like you've got to find an H Vac tech, you've got to find a plumber, an electrician, an installer. You got to find all these things where in roofing I just got to find sales guys like and in like from a back office. Like I can do that centralized really damn easily. And then to your point, I find a production manager. We've got the crews Go sell roofs, spend the money on marketing, and let her rip. Like, yeah. I mean, I think Greenfield and roofing, like, you could do that all damn day long and it would be pretty. Pretty seamless. I think the vertex that the biggest piece that I took away from them that I was, like, so jealous of is they're like, yeah, we've created a university for training salespeople. And I'm like, well, that seems a hell of a lot easier than training technicians to work on a piece of equipment that is different in every application. Like a salesperson. Here's what you're going to do. This is great. Awesome. Awesome. Yeah, I mean, it's just. There's a lot of. Lot of Runway there, for sure.
- [65:53]
Chad
If anybody's listening from Bear Tax, please send me a copy of your curriculum. Chad and I would love to take a look at it.
- [66:01]
Chris Hoffman
Yeah.
- [66:01]
Chad
And we'll give you our opinions, too.
- [66:02]
Chris Hoffman
Yeah, exactly. We're here for feedback. Feedback alone. And, you know, we may rebrand it and use it. So we'll see.
- [66:10]
Chris
Without that, guys, I mean, we got some room at Pierman Brothers. There's a good training facility there that we can, you know, we'll go and give it a go. Yeah, the old college try. See if we can make it work. If it works for us and, you know, you've got something good.
- [66:20]
Chris Hoffman
Yeah, exactly.
- [66:22]
Chris
All right, boys, listen, we are over an hour into this thing, okay? This is that. We're having a good time. I can see, you know, Chris's face is getting a little red. Head's a little shiny, got a little sweat going. Chad's on one right now because he's not drinking Mountain Dew today. Excuse me? Diet Mountain Dew.
- [66:38]
Chris Hoffman
That's right.
- [66:38]
Chris
Today.
- [66:38]
Chris Hoffman
Got to keep it, I don't know, keep it trim.
- [66:41]
Chris
I don't know what.
- [66:41]
Chris Hoffman
Summer's coming.
- [66:43]
Chris
Summer's are coming. The old summer dad. Chad bod. He's got to get working on it.
- [66:47]
Chris Hoffman
That's right.
- [66:49]
Chris
Well, boys, always fun, man. I appreciate. Hey, Hoffman. I'm glad we made this happen. Like, I always, like, whenever I can just text you randomly and you're like, yeah, let's do it. And I'm happy to move it because I wanted to do it today, so. But I appreciate you boys coming on here and just, you know, just shooting the, you know, we actually covered quite a bit of stuff from the high impact, high effort, you know, conversation to the six day. The six day bonus. The flex crews adjusted billable hours. We've learned that I am. If anybody is looking for a electrician in the Phoenix market, I am available a part time. You know, as long as it's a flex schedule, I can probably make it work. And also, most importantly, is often. Why are you laughing, dude? Like, I'm skilled labor, bro.
- [67:34]
Chad
I believe in you. I believe in you.
- [67:38]
Chris
I'm gonna share one quick story to. To let you guys laugh at me, okay? Because I feel like you deserve this because I pick on everybody so much. Previous house. I was in chat on the Chad, do you ever go to our. My. The other house? No. No.
- [67:52]
Chris Hoffman
Okay.
- [67:53]
Chris
So we built a pergola back there. And. And I was like, I'm gonna wire this one. Like the pool. The, you know, the pool panel was maybe 30ft away. Okay. So, like, I'm gonna wire this one. So I run into the little trencher, you know, a little stinger thingy. I'm out there trenching it and I'm running the pipe, I'm pulling the wire. I do. I'm. You know, I got my little junction box. I'm running the. You know, I got. I'm putting the TV in there. A fireplace, you know, the ceiling fans, all the lights. Like, I pulled the wrong size wire. I wired it all myself with the wrong gauge wire. So I end up having to hire electrician to come and yank it all out and listen to that dude talk about the electrician that did the job.
- [68:36]
Chad
You didn't tell him you sat there?
- [68:40]
Chris Hoffman
Wasn't me.
- [68:42]
Chris
Like, that was the one time the billable hours. I was just like, yeah, yeah, it's okay, man. Whatever. Whatever. I was like, please just don't tell my wife.
- [68:51]
Chris Hoffman
Please hurry up and get out of here before Anna comes up.
- [68:56]
Chris
I was like, why is this thing keep. Why does the breaker keep popping? What the hell's going on? And then he's like, I used PVC when I should have used. Or the metal pipe, whatever it was. I was like, ah. So maybe if you're listening, you need a electrician in Phoenix. Maybe don't consider me okay? I should just stick to my job.
- [69:15]
Chris Hoffman
Yeah, he's just the breaker guy. If you need a break or replace, he can do it. Other than that.
- [69:22]
Chris
An outlet. If it's like a 110 switch, simple on and off, and it doesn't have to connect to something else. I'm your guy. You know, just give me, you know, give me a call. I'll do it. I don't want nothing to do with ceiling fans like that stuff. You gotta hold that thing up there and hang it. I ain't doing any of that stuff. But Hoffman, real, real talk, you know, for years, you've missed miss years. That's more than one keeps having kids. Rhino X because you just keep pumping out babies. Okay. What. I feel like Rhino X 2026 is gonna have to be in the end of February. That seems to be what works best. But I'm going to reach out to you specifically to look at your calendar to make sure that I pick a date that you are actually available.
- [70:11]
Chad
I want to know because I. I've been blocking everything. I got freedom blocked on the calendar this year, so I'm going to be there. I know I missed that twice, but right now, nobody's pregnant.
- [70:20]
Chris Hoffman
Yeah, we should be good. Chris, Yana. If we can clear July. I'm looking at my calendar here. We got to be able to clear July, and you should be good for February. That's nine months away. So what's. Once we're in July, I think you can pick a date, and we'll know. He's gonna be good.
- [70:40]
Chris
So if I can just go and get that place now, maybe you'll be a little bit thoughtful with your extracurricular activity. You can make Rhino X 2026.
- [70:49]
Chad
That's the debate. I want to keep going, but my wife's holding the line here.
- [70:54]
Chris
Building his own army. Well, listen, you got that farm. You're gonna need a lot of hands, dude. Take care of that damn thing. All right, boys, Listen, I know it's kind of getting a little bit later on the East Coast. I appreciate you guys. This was fun. We got to keep doing stuff like this and getting the group. We got to do another one with our whole crew again, that was fun. That was a good time. So, you know, to our listeners, like, this is the stuff. I love you. Being able to hear is like, you know, we're. We're all buddies. We're all running businesses, and we all get to have these conversations and have fun with it. And so this is just another little glimpse into, like, what our, you know, text groups and our conversations look like. But you always find a lot of good out of this stuff, too, so. And even, like, every once in a while, even Chad puts in something that's smart.
- [71:32]
Chris Hoffman
Yeah.
- [71:33]
Chris
Something good. And he made fun of me today. He made fun of me today.
- [71:39]
Chris Hoffman
Oh, he gave me a compliment.
- [71:42]
Chris
Yeah. I don't know that I took that as a compliment, but I appreciated the joke. It was the effort that matters. Right. That was one of the things that, you know, the two dimensions that Hop was talking about was impact and effort. And you definitely did both of those things in that comment, so thank you. That brings it full circle. All right, boys, we're gonna check out of here. Chad, you want to close this out, buddy, because you're so good at. Or maybe we should. Oh, wait, Hoffman's gonna it up. We better just let Chad close it out.
- [72:06]
Chris Hoffman
Yeah. So I. I think in closing out, I mean, a lot of great stuff here, especially as gearing up for the. For the busy season. I think a lot of great ideas, you know, if. If you've got questions. Again, I think the biggest thing. If you're looking to grow and you want to, you know, you want to make improvements. While some of the ideas that we talked about may be like, well, there's no way that we could do this, There's a way, like, you just have to think a little bit outside the box and you can make it happen. But, you know, how can you incentivize your team to help you grow your capacity? I think that's the biggest thing. Chris talked about it. That's what we've done with our install comp is like, how do we incentivize guys to want to do that? And I think if you can set yourself up for success for the busy season, obviously, we know a lot of money is made in June and July and August. Hopefully September.
- [72:58]
Chad
September.
- [72:58]
Chris Hoffman
That'd be great. We'll hold out for some. For some warm weather. But again, as my good friend, I got two Chris's on here. I keep. Keep. Keeps getting weird because I'm like, chris, Chris? Who's Chris? But as my good friend Chris says, you don't got to do everything, but you got to do something. No. Zero days.