Transcription
If you own a contracting or home service type business of any kind, you should consistently be able to look at your month over month or year-over-year growth and see a trend in this direction in both profit and revenue, not just revenue. Revenue is the vanity number. Profit is the sanity number. We want to focus on profit.
>> How are your profits?
What's really important is you have to be able to see that your job changes at every single tier and milestone that you continue to hit in the business. So, I'm going to break down each stage of my business growth and each stage of your business growth and tell you how your responsibilities as an owner should change as the business grows. So, let's dive in.
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So, we have a common rule in Home Service Accelerator and everybody that I talk to that owns a home service business and it's pretty much universal across every home service or contracting business. You can get from zero to about 10 to 20k a month off of just pure piss and vinegar and hard work. And so what that looks like specifically is you're doing every single job yourself. You're the salesperson, you're the marketing person, you're the install person, you're the service person, you do every single thing in the business yourself to get from zero to about 10 to 20k a month. And that is an amazing stage of every business owner's growth because they also make the most profit at that moment or you should make the most profit at that moment because you don't have employees, your insurance costs are pretty low, your vehicle costs are pretty low, etc. And so annualized that means you're going to get to about 100 to 250k a year off of just piss and vinegar.
And then the next stage is when your business gets to that first six-figure mark and then you're somewhere between 100 and 250k a year depending on your trade. I say depending on your trade 'cause if you're a residential contractor that's doing like remodels, your average ticket's going to be a lot higher. Your profit's going to be lower, but that's why there's a range in revenue between like 100 and 250k just for everybody watching. But in that tier to get to the next one, what you have to understand is the things that got you to 100 and 250K are not the things that get you past that next tier. And so if piss and vinegar and hard work and just doing all the fulfillment yourself gets you to the first stage, the second stage is typically a sales and marketing problem. And so what usually happens with businesses is the owner is selling everything and he tries to do one of two things. He either a) tries to keep hitting that next tier by continuing to sell more, market more, and then do all the fulfillment himself. Maybe in this scenario, you've brought on a helper or two. But what you have to understand is as the business grows in that sense, so do your expenses. So the second you bring on a helper or something, you need to get way higher on the revenue number to offset that new expense. And so typically when you start to outsource sales and marketing or even outsource fulfillment or something like that, every business is going to be a little bit different, but in that tier, that's where you can see some monumental growth. But in my experience, this is the hardest stage to jump to. So jumping from an owner-op to a business with outsourced operations or outsourced sales and marketing to employees is the hardest thing for business owners to bite off. We're going to dive into this more in a second, but I'm just going to go over the next tier as well.
And so this tier is typically roughly between 100 to 250k is like the starting point depending on your trade all the way up to about 500 to 750k in topline sales or topline revenue. This stage is where you outsource some parts of things but you don't have everything outsourced to where you could just sit at your office all day and not do anything. The hardest part about this stage is paying for that labor but also scaling the topline revenue number. We'll go more in depth about this in a second, but I'm just going to cross over to the next tier.
And this is the tier that I'm currently in. After you get to that stage, the next tier is that 750 to 800K mark all the way up to about $1.5 to $2 million in topline sales. That's the stage that I'm currently in as a home service business owner. So, what that looks like for me in the current stage is I don't do anything on the ground. I don't do anything operational. I don't touch a light bulb. I don't hire employees to be installers. I don't do any of that. I don't do any of the customer communication now. I have office staff and everyone that does that for me and then I don't do any of the sales either. Now that doesn't mean when we get into a big commercial opportunity that's like 50, 60, 70 grand that I'm not consulting with the sales guys and showing face in those scenarios. But if you take like our 200 and something installs we did last year in the peak season, I'm not doing any of that customer communication. And so in the stage I'm in now, I'm managing managers and then I handle our marketing. That's pretty much it.
So every business owner situation and your business is going to be a little bit different. But this is a pretty good universal law for how I chose to offload all of the busy work and how you can probably do the same thing in your business to reach that tier. And then after this tier is the tier I'm not even there yet, but that's where you get into the multiple millions, the eight figures, the nine-figure businesses. And that's like a completely different game where you're hiring top talent in every position. Like these guys are going out and headhunting the best marketing person in the world, better than most marketing agencies or anything like that. They'll bring them in-house at that stage because they can afford to pay them two, three, $400,000 salaries plus commissions or anything else. So that stage specifically I'm not qualified to teach on because I'm in the middle of getting to that stage. But for the sake of this video, most of you, if not 99% of you aren't there either. So we'll stick to these first three tiers.
You have marketing, you have sales, and then you have fulfillment. So marketing in this scenario would be who's doing your social media, who's setting up your Facebook ads, your Google ads, Google LSAs, anything like that. Who's handling the inbound, paid and organic traffic. And sales can either be telesales, in-person quoting, in-person follow-up, remote follow-up for quotes that you've given out, all that jazz. That's another huge piece that takes a lot of owners' time that can be outsourced. And then the third thing is the most important one, which is the actual jobs being done, the fulfillment of the jobs.
So if you take these three things, this is what I did first because I felt like this was the highest leverage opportunity for me to buy back my time and go focus more on revenue-producing activities like sales and marketing. And so what I did is between year 1 and 2, I offloaded all of the operations, all of the fulfillment, the actual installation of the jobs, the stuff that's being done at the homeowners' houses or the businesses that we are being paid for. And so I went out and I hired a staff, a crew of people to do that. And so what happened was, if you look at the difference of my day-to-day between year 1 and year two and three is year one, I was selling jobs, marketing, and then I was actually doing the actual installs myself. The problem with that is as I was doing the installs and as you're doing the fulfillment yourself, the issue you run into is you're going to be a terrible sales rep the busier you get doing the fulfillment. And so this is the problem and this is the part that drives every business owner crazy is when you're not busy, you're a really good marketer and a really good salesperson. But the second you get busy with jobs because your marketing and sales was working, your marketing and sales starts to suffer because you're on-site six or seven days a week doing fulfillment. So now you're not closing as many jobs as you should because you're too busy doing fulfillment. And so your business starts to bottleneck there because you're not following up nearly as much as you can. You're not paying as close of attention to detail on quotes you're sending out as you would if you weren't doing fulfillment because you're getting done with work at 5, 6 p.m., getting home, you're dog tired and then you have to do the sales and marketing. And so that's what happens in most of these scenarios is the operations gets busier because the sales and marketing is working. And then your sales and marketing starts to suffer because your operation is working. And so then you're in this stage where you're incredibly busy. You feel like you're working 50, 60 hours a week, yet you're not growing anymore. You'll have some big wins. You'll close some big jobs, but you stay at like that anywhere between 10, 15, 20, 25k a month, and you're not seeing like crazy growth. You might have an outlier month where you do 30, 35k, and then the next month you'll go down to 20 or something like that. And that's because you have a bottleneck in the business.
And so for me, when I offloaded the operations and the installs, it cost me a lot of money. So, what should you do when you go to offload the actual fulfillment of the jobs? Whether you're a window cleaner and you're paying somebody to clean the windows, or you're a pressure washer, you're paying somebody to wash houses, or you're a roofer and you've started to get more crews to come help you do the roofing. What you have to do in that scenario is you pay for the labor and you train them properly. And we can make an entire video about training. It's a whole different ballgame. But best-case scenario, you come in, you work with them for about a month or two while you train them to do your job. And then you slowly peter yourself off of being on every job and you start giving them more responsibility and then you start giving them smaller jobs. Then eventually they start doing bigger jobs themselves. You don't have to be there. But this is the most important part of this scenario. If you're going to pay people to do installs for you, you have to make up for that by doing more of the sales and marketing. And so this is what happens to a lot of guys is they start to see like, wow, this is amazing. I have crews doing the fulfillment for me. I can sit around today and not do anything. This is where the business becomes very vulnerable because you've added a new expense, which is payroll and insurance and workman's comp and everything else, but you're not going and doing more of the marketing and sales.
So what I did is when I looked at an 8 to 10-hour workday in the previous set of when I was doing everything, it was about five to six hours, maybe even more, were spent actually doing the fulfillment. Three to four to five hours, maybe give or take, were spent on marketing and sales. The frame change that I had to have in that scenario was I had to go take that same amount of time and effort and channel it into way more sales. So when you get the ops taken care of, then what you need to do is you don't just like sit there and do the same thing on sales and marketing. You double, triple, quadruple down on the sales and marketing effort. You get more dialed in on your sales process. You get more dialed in on your follow-ups. You crank Facebook ads, Instagram content, everything a lot more. You go out and you spend more on ads to make up for the fact that you have more availability for crews and everything like that. And so what happened to us was our first year we just barely hit 100k in sales. But that was me just pure white-knuckle piss and vinegar going. The second year we jumped to 250K in sales because now I was selling at a higher rate. I was following up at a higher rate. My marketing got better because I wasn't doing the fulfillment. And so that is scary. I'm not telling you that it's just an easy thing to do. But if your goal as a business owner is to create a sustainable business that doesn't rely on you 24/7, 365 to run it, that is the first step. I like to offload ops first. I like to offload the in-person work first because that is going to be the highest leverage buying back of your time. In my experience as a business owner, it was easier for me to train people how to do the job than it was to train people how to properly sell and do the marketing. And so I offloaded that first and then I brought on salespeople in year three and year four.
So if you look at my business, year one I did everything. Year two I offloaded the operations, the installs, everything else. Year three, I brought on sales teams. And so now I have more availability per day to go out and sell jobs. We can go in-person at a higher rate because I don't have to remote quote everything because I had the bandwidth and the ability to do that in my business. Now, if you're a business that does quotes remote, all this means is that you can just crank marketing way harder and then sell way harder remotely. So now in this scenario in my business, we went 100k year 1. We jumped to about 250k in year 2 and year two was when the operations were offloaded and I was doing the sales and marketing and you know, customer management, everything like that. Then year three we bumped to 350k a year and that was when my sales guys came in and so what happened there was my sales guys were able to do a lot more volume. They're able to spend a lot more time with each customer, with each prospect, with everyone else and they're able to follow up better. And so then me as an owner, I was able to go chase higher leverage opportunities, commercial jobs, go explore different marketing avenues, get better at content, all of that thing, and then streamline all of our systems and processes, stuff like SnappyLead, Jobber, things like that. I was able to be more strategic in the business because the business was largely running without me. And then year four was when things got really fun.
So now I had a sales team, an operations team, and an office staff that was managing all customer interactions and processes. So when the phone rings, I don't answer it anymore. When a customer needs a quote, I don't go out and quote it. When a job needs to be installed, I don't go out and do the install. And when a problem happens after the job was installed or a customer has a complaint, I'm not the one going out. That doesn't mean as an owner I don't ever do it. Like there's scenarios like even last season in year five where we did $800,000 in two months. There was a moment where our highest paying residential customer had an issue at like 9:00 p.m. and they were having a party or something that night and all of my crews were back at home. I went out and fixed it. So I'm not saying that as an owner you're just lazy in this scenario. I'm saying you have the tools and the proper infrastructure in place to make sure that that's super rock solid. But at the end of the day, it's your baby. It's your business. You got to go do the stuff that other people won't do. And so in that scenario, I went out and fixed it. Even though I had the processes and fulfillment that it could have been fixed tomorrow, but we're the best company in our area for customer service. So, at the end of the day, if the customer was upset and it happened to be one of our largest customers, I'm going to go out and fix it myself.
This tier was when the business was operating as an actual machine. And so when everything was offloaded and every person had a specific responsibility and they weren't overlapping. So the people doing installs don't touch anything on sales and the people doing sales don't touch anything on installs and the person doing marketing, which is still largely me, I don't get involved with doing the sales and fulfillment. I don't get involved with doing the installations. I don't get involved in any of that. I stay in my lane and then as the owner I manage the managers. And so now in this scenario, when we have 30 employees at peak season, all of the employees aren't calling me with issues. They're either if it's an HR or payroll problem, they're calling Natalie who's in our office. Or if it's an install schedule thing, like that problem, they're calling Jack or they're calling Mason or someone like that in that world. And if it's a sales problem, they're calling Kyle, my head of sales.
This is the easiest way I can make the math make sense to you. In year 1, let's say I worked 50 hours a week. In reality, I was probably working closer to 70 or 80, but let's just for easy math, let's call it 50. If I was working 50 hours a week, let's say I spent 20 hours doing installs, 15 hours doing marketing, and then 15 hours doing sales, that's fantastic. I worked really hard. But marketing only got 15 hours a week dedicated to it. Installations only got 20 hours a week dedicated to it of my time, and sales only got 15 hours a week dedicated to it. But if you fast forward to now in our scenario, sales is getting 40 to 50 hours a week dedicated to that itself. Marketing is getting 40 to 50 hours a week dedicated to just marketing. And fulfillment is getting 40 to 50 hours a week dedicated to just fulfillment from our leadership positions. And so what that does is now we are optimized and spending so much more time on each individual facet of the business and not me wearing three or four different hats doing a C-minus job at everything. And so now we do about a B+ or an A-minus across the board on all these things and we get better and better and better as the years go on.
And so if you're fast forwarding to this year, 2025, with our permanent lighting business and our temporary business, we estimate that we're going to do about 1.4 to $1.5 million in sales this year. And in that system, every single aspect of the business is offloaded to a leadership position who has employees operating under them. So Natalie is our office guru, operations, internal operations guru. She's managing the people who are managing the phones. We have a few ladies this season that are managing the phones. They answer up to her and then she manages that. She owns that aspect of the business. You move over to sales. This year we have Kyle who's our head of sales and he's also a salesperson and then the sales people under him answer to him. And so then he answers to me for the performance overall of the sales team, not just his individual performance. Those salespeople under him answer to him on that. And then he answers to me on the entire collective performance of the sales team. And then Jack, the director of operations for the temporary business and my co-owner for the permanent business, he manages all of the managers under him. So in that scenario, Jack's up here on the org chart. We have three to five install leads at any time during the year. So those three to five install leads answer to Jack. And then under those install leads are all of our installers. And so each one of them answer their manager. Their manager spends a lot more quality time with them. They answer to Jack. And then Jack answers to me on the temporary business installations. And then we collaborate on the permanent ones on exactly like, did we hit our goals? If our goal this year is $18,000 of revenue a day installed, are we hitting that? What's breaking? What systems do we need to make? All that jazz. And so that is why the scenario gets really interesting as an owner because I can be in a foreign country now and the business operates itself. I want that to sink in for a moment. The business at the stage it is in now and this is relatively new for me. So I'm not trying to flex. I have to have a lot more self-discipline as an owner to make sure the ball is being moved forward in the right direction. And this is the best way I can describe how my life has changed personally in this stage. There is no problem that comes up now that I have to immediately go white-knuckle and fix myself. The problems I have to solve are much more high-level. They're much slower to be fixed and they're much more analytical. And so the amount of decisions that I make per day are less in volume than they were in previous years, but they're much more high-impact. And so for example, four or five years ago, customer calls, I'm going out and fixing it. Now I don't do that. Now, my problems are like, okay, we're going to implement SnappyLead as a CRM. We need to make sure all of the automations are working properly. We need to make sure all the systems are working properly. Our sales guys understand how to use it. It can work at scale. It doesn't break the second we get busy. All that. Those are problems that I fix that aren't immediately impactful overnight. It's like a lot of the things that I fix and tweak now, I don't see the fruits of my labor, the fruits of that fix immediately. I see it a day, a week, a month, or even sometimes a year in advance.
So, for example, in the temporary business right now, I'm making a ton of new systems, new marketing campaigns. I brought on Jake, a full-time videographer, to help us scale content and everything else. And those are things that don't immediately bring money back into my pocket or immediately fix problems or even immediately work out overnight. So these tweaks that I make now take a little bit longer to see the fruits of that labor work out, but the impact that they have is monumental. Look at this YouTube channel for example. When we started making YouTube videos 6 or 7 months ago, I had a couple hundred dormant subscribers. Now we've made two long-form videos a week talking about the Christmas light business, talking about Home Service Accelerator, talking about everything else. And we're just now starting to see the organic reach take off where as we're filming this right now, I think we have like 1300 or 1400 subscribers. But you guys are awesome and you're super high-intent subscribers, which is exactly what we want. And you're here because the production value of our YouTube videos are better. We're educating you better. Our content in our actual businesses is better. The businesses are performing better. So that way I can come on YouTube and talk about what's working for me because I've invested in those businesses and they're working really well. Therefore, I can come here and tell you exactly what's working, what's not, what tweaks we've made, all that. And then you keep showing up.
The thing that I've really struggled with as an owner, and this is something that everybody runs into, is I could have taken a lot more profit a lot earlier on and not invested back in the business. Bringing on a videographer, bringing on editors, bringing on more salespeople, bringing on more install crews, buying more expensive systems, buying more expensive technology, all of those things. I could have just kept the money when we were doing 400k, 500k a season and been happy making, you know, low to mid six figures a year, but my goals for the business were a lot greater long-term. Therefore, I had to go reinvest in the business. And that's something that takes a lot of discipline for me because I'm somewhat of a bougie and it would be tempting for me to go take an extra vacation or two a year. It'd be tempting for me to take all those profits, but the growth happens with the excess profit. And that's the thing that's really, really tough to swallow when the business starts hitting new tiers. So when you hit 100K and then you hit 400K and then you hit 500K and then you hit 800K, the temptation is to feel like you made it. And when you feel like you made it, maybe you pump the brakes a little bit on growth and you start taking more profit. But then what happens in that scenario is you're going to be stagnant. And so I've been really tempted to go buy an extra house or buy a really nice house or buy a fancier car or go take lavish vacations more often because the businesses on paper have more profit and more money in the bank accounts than they ever have before. But I've chosen to steer the ship in a direction where we know where we want to go. We know we're not happy at a million. We're not happy at 2 million. We're content with the day-to-day work that we're doing and constantly growing to new heights and breaking records year over year over year in our business. I'm not just here and my employees aren't just here to grab a few extra bucks and then be happy with stagnant growth. Like, we're all here because we want to steer the ship in the right direction and become a wagon in our market and everything else. You can't do that if you're taking every single cent you make in profit and pocketing it yourself so you can drive a fancier car or so you can live in a fancier area. And that's been extremely difficult mentally because that changes over time.
When I think about myself and there's YouTube videos you can find from four or five years ago where I was celebrating $1,900 sales weeks in junk. It's on this YouTube channel. You can go back and look at it. If you go back to me in that moment and you tell that version of me like, "Hey, by the way, in year four you guys are going to do half a million dollars in sales and you're going to be at about 25 to 33% margins." That version of me back then would have been like, "Oh my gosh, I'm rich. That's awesome. I can net 150, 200k a year personally and then I can go do whatever I want. That sounds great." But if you fast forward to now, I was celebrating $1,900 sales weeks in junk 4 years ago. But now in the Christmas light season, in peak season, there are days where we do $18 to $20,000 of installs per day. Think about that difference over four years. Celebrating $1,900 in sales in a week. Four years ago, thinking that was an amazing milestone to three and a half, four years later, we're installing $18 to $20,000 a day in the business. A lot of time because I've gotten better as an entrepreneur because I don't care about some vanity number. I care about the business growing every single month, every single year over year. And the new problems that come up, they change as the growth happens. The problems get bigger, they get different, and they get harder. But as we conquer those problems and we fix systems and we keep optimizing the business and everything else, that becomes a new rewarding thing. And so that version of me four years ago probably was just motivated on hitting half a million or hitting, you know, 400k or whatever it was and just making sure that I could pay rent again or something like that. That version of me now, the business is a large pirate ship and we're just constantly trying to conquer, conquer, conquer new things. I don't have a number. I don't have something that I have to hit here that I'll be happy. I'm happy with the day-to-day inputs and the constant growth because then what happens with the constant growth is yes, we're all in this to make money, but now I can do things like bonus my employees when we have really profitable years. Some of my employees can go buy houses with the commissions that they make from the business that I created that I was celebrating doing $1,900 weeks four years ago. There was not enough money in the business for my employees to buy houses when the business was doing 10K a month.
So, if I have all of these employees that are hitching their wagons to my businesses and me steering the ship, how do you think my employees would feel if I was driving around in a supercar while they're getting base salaries and small commissions? They're probably going to turn over pretty quick. They're probably going to be like, "Well, this is a boss makes a dollar, I make a dime scenario." All of this jazz. And they're not going to be bought into the vision. You can see across the board in Home Service Accelerator and Valley Christmas Lights and Valley Premiere Lighting that everybody is mutually on the same path. Everybody knows what the goal is. Everybody knows that the bigger we get, the more that it's going to trickle down and everybody's going to be able to support their families. Perfect example here. I'm filming here with Jake. You can't see him. He's behind the lens. But we're going to the huge conference because I'm a speaker at the huge conference in Nashville this year. Jake and I are going there. The company is paying for me to have a room and for Jake to have a room. And Jake was like, "Hey, can my wife come?" Absolutely. Your wife can come. Absolutely. We'll get a separate bedroom. Jake and I don't need to bunk. If the business was doing a hundred grand a year, we would not be able to afford to buy an extra hotel room or something like that to give back to our employees, whatever else. Make sure their wives are happy they work for us. Make sure they're happy they work for us. Obviously, as an owner, we're leading with value to our employees. We're pouring back into our employees, everything like that. But in return, when the employees know that, they're excited to come to work. They're excited to build this wagon. They're excited to be a part of this. They're feeding their families with this. They know that as the business reaches new heights and higher revenue numbers and higher profit numbers, that also means that they can get bonus more, they can get paid more, we can hire employees under them, put them in more of a management position, and then in turn, their families get to accomplish whatever personal and financial goals that they have.
But to wrap it up, as an owner, I have to understand that what got me to 100K is not what got me to 500K. And what got me to 500K is not what got me to a million. And what got me to a million is not what's going to get me to two. And what gets me to two, I can promise you, is not going to be what gets me to five. And so on and so forth. Look at interviews on this channel of guys like Jason who does, you know, $13 million a year roofing and Andy Hobika who does $8 million in personal sales in an HVAC company that's doing like 20 to $30 million a year. You can tell pretty clearly that if your goal is to have a massive company, you can't do it alone. And so if the opportunity is not able to be executed on alone, you have to execute on it with a team. But in order to get a team to buy in, you cannot be a greedy bastard as an owner. You cannot take crazy amounts of profits year over year over year and not give back to the infrastructure of the business and in turn give back to the employees. And so that's the stage that we're in currently and that's the stage that I want to make sure I convey to you guys is as you're going through in the different tiers, you have to audit yourself. Am I doing the same thing at 30 and 40k a month that I was doing at 10K? If you are, it's time to hire. It's time to outsource. It's time to be a different entrepreneur. You have to grow into the new version of yourself and your business to get it to those next tiers. My job is harder now, but it's different. It's not as hard physically now. It's harder mentally and emotionally. And that's the change you guys have to make.
So, if you want to see more videos about this, feel free to subscribe to the channel, hit like on this video, and then you can also follow me on Instagram, @steve_hunsaker, and then you can click the links in the description of this video if you want to book a call with Home Service Accelerator or you can join the Starter School which is $97 a month. I don't mind if you consume all of this YouTube for free. That's what it's here for. But if you want a little bit more hands-on help, we have those two options in the description. I'll see you guys on the other side. Thanks for watching.