Transcription
Welcome to the Stephen Jack Patterson [Music] show. So we've got a special guest today, Jack Patterson, uh, director of operations for Valley Christmas Lights, our fastest horse in the home service world. Now, we are 50-50 partners on the permanent lighting division of the business and the landscape lighting. And, uh, Jack and I met in 2021 at a pool party at my house for 4th of July that I had. At the time, Jack was dating my friend's little sister, and I was just getting junk removal and Christmas off the ground. And, uh, my friend was like, "Hey, I have, uh, my sister's dating some guy and he's like looking for a job or something like that. Maybe you should talk to him." So I was like, "Sure, whatever." Uh, four, five years later, now Jack runs the entire show, uh, is the absolute lifeblood of Valley Christmas and the businesses we're spinning off. And so with that intro, uh, Jack, welcome to the show.
Appreciate it. Yeah, I guess, uh, it's been a long journey to get to where we're at, and it's been a very fun journey, not a very orthodox one. So I, uh, I'm very blessed to be a part of this. Um, Steve's a wizard with what he does, and I've just been fortunate enough to hitch along for the ride and be partners now with this new, um, endeavor we're headed on. But yeah, it goes, it's a lot to go from, uh, being the sister's boyfriend to, uh, being business partners.
And lovers. And lovers. So yeah. In order, so you were employee 2021, employee with a little bit more responsibility 2022, then fully running the show in 2023? Yeah. I had graduated, got married. Well, no, not married yet, just graduated. Running the show. And then, uh, we had a really good year. It was the first year with new systems and actually running the operation the way we knew we could run it. Um, still obviously a lot to learn and all that jazz, but I think we learned a lot that year as far as what we could actually handle without doing it. We just did what we should have done in an efficient manner, still learning a lot. And then, yeah, this last year, we, uh, we did things right, I think. So yeah.
So let's give a little bit of clout to Jack to match this. So when we go over the now three years that Jack's been like fully involved, his first year as an employee, we did $350,000. Then the year he took over, we bumped to $500. It was like $498 or something like that, uh, in revenue in two months. So this is for the temporary Christmas business. And then now this year, when he fully had an entire offseason to run the business himself the way he wanted to on the operation side, we jumped to $800,000. It's like $88,000 in sales. And so we foresee that still growing.
So let's talk a little bit specifically on what do you think's the biggest jump that happened between when you were managing the show? Cuz keep in mind for everyone listening, I don't touch a bulb anymore because Jack says I suck at it. Jack says I'm a terrible installer, which, in hindsight's probably true. So again, I focus on my thing now. I manage the personalities, I manage the ads, I do the marketing, and I manage the sales people, and I do all of our systems. I do not touch any lights. I do not touch hiring crew members anymore. This is all Jack's responsibility. He's running the business on ground, keeping the warehouse dialed in, all that. So with that background, what do you think was the difference between the $498, let's just call it $500,000 for easy numbers, the $500,000 year and the $800,000 year-over-year jump? What's the biggest differences?
I think part of it for me, at least, was confidence. Like knowing that we did the $480 and just $498, $498, $500, get it right. Yeah. And then being like, "All right, that wasn't so bad." If we just did the same thing with more crews, with a little bit more strategic hiring as far as who's going to those crews, cuz I can only do so much. I can only sit there and I can, I'm our fastest worker now. That's debatable with Mason. Mason was an absolute workhorse this year. But I can only do so much. I can't will my way to a million on my own, not certainly in two months. So we hired two crew leads. Um, so it was three trucks running. And then just having reasonable, attainable goals that don't allow the crews to get burnt out. But then also, at the same time, you're hitting the numbers you want to be hitting. Like we did $800 this year much more comfortably than we did $500 last year, just because of the way we are able to delegate workload and knowing personalities and what they're capable of doing. Um, another thing is you got to be organized. We built systems as far as pick lists with the sales guys. I mean, there, there should not be a single question when you get on site on what you should be doing, where's power, does the customer know that we're doing blah blah blah to the roof, just color the right way. And the last thing you need is, "Voila, we're done." Come out and customers like, "Well, that was supposed to be a red and white roof, not red, green, and white." And you're like, "All right, yeah, there goes two hours."
We talk about this in Home Service Accelerator extensively with everyone. And like, I always say, the bigger the business got, the easier it was to run from a, like, sheer workload standpoint. And so one of the things you're talking about is like, it was easier for us with three crews, three trucks on the road, three separate things running at at the same time to do $800k than it was for us having like, really one and a half last year, uh, at the $500,000 mark. I mean, you were doing about 30 something percent less revenue per day last year. So with all that being said, what's the difference and why is it easier when you have three crews to immediately bump up to $800,000 and have you specifically working less?
Well, it's only easier if you set yourself up to do it correctly. Like, it wouldn't be easier if the guys didn't know what they were doing when they got on site, if they didn't have the systems in place. So it's easier when you're able to lead from the front and make sure, have very clear expectations, and give guys what they know they can do and the confidence to be able to do that. Having three trucks and delegating, that's a lot of our homes because our average ticket increased obviously year-over-year. For them, it's really easy to be like, "All I got to do is bang out this house. Like, I have one and a half houses that I got to do, and then maybe go do a service call." Mentally, that's so much easier for crews to say, "Dialed and do quality work." That's the important thing too. If we bumped up to $800 without going to that three crew model, and we're sitting there just white knuckling, the quality is going to go way down because, because you're working 10-hour days, yeah, and you're thinking, "Oh my gosh, I got three other houses I got to go do, and it's 12:00." Like, you're just slapping whatever you can. And like, not to be rude, I think Steve always thought he had things in front of him when he was installing because you go to some of Steve's tear downs and I was like, "What are we doing here?" But, well, [ __ ] you, but yeah.
You know, agreed. Agreed. So like having that mindset, like, "Oh, all I got to do is bang out this house." They see it, they know what they have to do. We're all set up in the morning. Like, every truck is dialed. They cannot make a mistake if you make it so they can't make a mistake. They're not going to make a mistake. Okay, right there. If you make it so they cannot make a mistake. Yeah.
Talk about that. You personally, Jack, can only do so much. So what we do is we build systems to make it so that when you train people, knowing that you were the best installer employee, we acknowledge that we're probably only going to get 70 to 80% of your skill set in employees that we train. So you set up systems, you know, CompanyCam for pick lists, pick lists in the warehouse, like checklists for the crew leads to have when they leave. Talk about specifically why that's so important because you know that you can remember everything yourself, but you can't expect new employees that just got trained to remember everything that's taken you four years to get in your head. So talk about, like, a little bit briefly about those systems and why that's so important as you get bigger.
Yeah, I think for me, to last year was a learning curve running the show. Like, I, I think a certain way, and I get pissed off if people don't think like I do. And that's something I've had to overcome and be like, "I mean, not everyone's going to think the way you do. Not everyone's going to remember." Like, that was a big, I think, turning point for us this year was, "All right, make it so they can't have a reason to not think like me because this is what my brain's doing every morning, right?" Like, this is so for them, it's whether it's staples, nail, all the little details with that pick list they have to go through when they have to come up to me in the morning, go, "Yes, I went through this. Like, my truck is loaded. If I forget anything, it's completely on me because we have a checklist style system." 100%. That keeps them accountable. Yeah, but also keeps us uniform. 100%. And then it just creates ultimate responsibility that if they do screw up, it doesn't leave it to, "Well, if it was this way, if it was that." Like, "No, you just screwed up on that." It's no biggie, we'll learn from it. But like, "This is why we have the system we do is because didn't do what we needed you to do that day for the pick list or whatnot." Perfect.
So if you're a brand new business owner, let's say maybe they have like one employee. When you go to make the, when you go to make these systems for the first time, you're like training somebody. What you're doing is essentially, you just went through your day-to-day and you're like, "Okay, this is what I do here. Let me write that down. Put in the checklist in the morning. Right now, I make sure that all of our bulbs are here. I make sure all of our clips are here in this part of the truck." So you just put all of the stuff that you're going through in your brain on, like, iPhone notes and then just started making a, like, a checklist that became essentially a training manual.
Yeah, that's what we did with the CompanyCam too. Is then we just went through and they had to select. Even with the sales guys, like, that's how we just implemented what you did with the sales team with their checklist. Like, "Hey, you have to check these boxes because if you don't, then you didn't do your job fully." So like, there's no option for them to fail. But it's also like, it's a continuous thing. Like, "All right, that I thought of on my own, but would they have thought of that? Even if it's not on the checklist, right? All right, we need to implement this, yada yada." Like, long arm heads or something else, random that you didn't think of in the moment when you're sitting there going through everything that you still just kind of randomly check. Trucks filled up, like, whatever it is. Like, it's an organic process that you have to like keep going through. And you'll fine-tune it. But you know yourself best, and you know what you want from yourself. So as long as you put that down on paper and make that into a system, people should be able to follow it.
Yeah, I, I think that's super important for people to understand. Like, as we got bigger, we completely acknowledged that simple scales. And so the more sales people you have, the more install leads you have, the more failure points you have in communication. So the sales guy sells one thing, and before, when it was just, you know, one or two sales guys and just Jack, they could just shoot Jack a text and be like, "Hey, do this on this job." But that doesn't scale. Like having so many unique little one-offs on each individual job doesn't scale. And so we had to, you almost, as the bigger you get, the more simple you have to make all of these processes. And so obviously, we're not perfect. We still have nightmare situations. But it's super important when Jack's talking about systems, he's talking about like, if I were to take that pick list and grab somebody off of the street, like the pick list being the thing that the guys look at before they load their trucks for the day, knowing that every possible thing that could come up during the day is in the truck, ready to be fixed or adjusted on the fly. When you have more and more and more systems and and more and more crews, you have to make that, for lack of better term, idiot-proof. Yeah, to make it so it's black and white. This is where it sits in the truck. This is where it sits in the truck. This is how I, this is how I actually take it out and implement it and make sure it works in person. That is what it helped us scale.
And so when you look at outside of that, what's changed gears a little bit to now we've got systems in place for the guys. What do you look for when you hire leadership positions? Let's start there. So like, let's talk about the crew lead specifically. We can take Mason for example. What do you look for in the crew lead, which is a little like, we, we call it like a middle management position. Yeah. What do you look for in him? Let's start there, and then we'll go into like, what you look for hiring because you're hiring 25. Yeah, we did 31 hires this year. Yeah. So what are you looking for in a middle management crew lead position, uh, when you're going out and hiring them?
Yeah, so like Mason, he was with us last year, the year before. And if you told him to do something, he was going to figure it out. And if he didn't know, he was going to ask. And he was just going to, he didn't take, he didn't give any slack. He was super hardworking. Like, and I don't know if you asked every 30 person, like, all 30 people within our crew, what they thought about Mason, boss, there was never a negative thing anyone could say because he was just a, like, team player. He made everyone feel good, but then he kept it on track, and he just busted his butt and was also the hardest worker. He was the hardest worker. He led from the front. 100%.
Yeah, and that's what's really interesting about the difference between like middle management crew leads and now you, and then me. Is like, you struggled a little bit with feeling like, "Okay, I'm so used to the last two, three years of just like white knuckling problems and fixing problems." That now you, you come back and you have people that you have to empower. And like, and by empower, we mean like actually let them know that you trust their ability to do that job. And then the amount of time you spent doing jobs was less. And it's almost like a mindset change for you. The same thing that happened to me two years ago, where you're like, "Okay, my job is not just brute force, get my hands dirty only now." So like, how's that transition been? Cuz like, you sometimes like would even tell me, "I don't feel like I'm working as hard."
Well, it's hard for me too, though. Because with a lot of different little things, I'm a perfectionist. Not every aspect of my life, but when it comes to detail-oriented things, like I have a lot of self-pride, like when it comes to my work. So whether it's just a simple roof line or we're wrapping trees or whatnot, like it was very hard for me to be like, "That's not exactly how I would have done it in my head." And then, but thinking back and go, "That tree still looks good. Like, that roof line still looks good. Mason did it the way he needs to, or whoever, middleman, like that crew did a good job." But to me, it's like, "I would have tweaked something." But it's like, "No, I don't need to tweak anything. That looks good. Okay."
Where do you draw the line though between like, what's like a non-negotiable? We obviously have quality. There is a standard that we have. 100%. And for me, all I do is stare at lights 24/7 all the time. So I can pick out any little stupid thing and I can become tic-tacky because that's just what I expect of myself. But what they're doing and the work they're producing is still so good, and the customers are still so happy. It would be a different story if we were hearing like, "Oh, getting callbacks." Like, when Natalie does her next-day calls, like, we didn't get that this year because quality was still good with that delegation, where it's just like, "All right, people are doing what they need to be doing." And I think it was very freeing being able to like, just trust these guys and know that the systems that we put in place are working and that they're doing what they need to do.
Got it. So like, the stuff that's in the systems, the pick list, the training manuals, the checklist, all that stuff, like, that's the stuff that's non-negotiable. But there's little tweaks, like the way they do things, the way they, you know, you want them to have like personal responsibility as well. Because if you don't, then they're just going to feel like you're hanging over their head with just waiting for them to screw up. And no one works good in that environment. And then because when they feel that, then they don't take action ever, and they call you a thousand times a day.
Yeah, so like, the more you micromanage these middle managers or crew leads or even employees, the more you like crack the whip on them and don't let them ever feel like they can think freely, the more your phone's going to ring throughout the day. And like, the whole point of hiring is to make it so your phone doesn't ring as much. And you empower people. People. Yeah, because I'm on my own projects too. So the last thing I need to be doing is trying to figure out something complex at mine and then getting a call because, "Guy's curious if I should go up this branch or not on a tree." Like, that's your decision. You're there to make that decision, and you're paid more to make that decision. So like, make the decision, and I trust you.
So now we're talking about management. And then now let's go to just boots on ground employees. Right. You hired, and this is what people need to have an understanding of. When we talk about the Christmas light business, we fit a year's worth of revenue into essentially two months. And so if Christmas was year-round, the operation that Jack runs does $400,000 a month for two months, essentially. And so if you think about that over a year, in reality, if we're doing $400,000 a month, it's a $4.8 million a year run rate business. So you're not managing a small operation by any stretch. Employee hiring, because of that, you have to hire, how many installers? Like 30? So like, 30 installers because we know the rules of attrition, rules of everything else. You hire 30, 25% of them don't even make it through the first week. Yeah, because they're busy watching TikToks and being youths and whatever else. Um, what's the, what are you looking for when you're hiring those guys? And I know this is like, might come off politically incorrect in some, in some portions, cuz we've had some bad luck hiring older cats. So obviously, we don't change the way that we hire. But give me some like breakdowns of what's worked for you specifically when you have to rapidly hire 30 people in a matter of a month.
I mean, you want camaraderie to come easy. Um, so with that being said, like, we pull a lot from the universities around us because people of that age group, like, it's pretty easy when you have similar things to talk about and be in a similar life, like cycle to create that instant camaraderie because we don't have much time. I can do my best to set a culture and like an expectation from the get-go as far as like how we're all going to interact and everything, but realistically, we're hiring in September, and we're just off to the races the second October comes, and we're there working from the get-go. It's not team, like, we do team building stuff, but you know what I mean? Like, there's not a whole lot of time to sit there and create that camaraderie with one another. It's a seasonal business, and we get some guys from the year before, but not a whole lot because they're graduated, because they're graduated or off to greener pastures or whatnot. So I think it's really important that you just get guys that you know aren't going to be, um, combative, I guess, with others too. You can kind of get that from the get-go, like bad apples. I mean, everyone like has their different personalities and whatnot, and you know pretty quick who to pair with who, who not to pair with who. Um, we run in crews of three, and it's a tight truck, so you don't want the guy in the middle to hit the guy to the right because it makes car rides a little bit awkward. So I guess you want guys that are going to work hard, that are high energy. We're fast-paced. We only got two months. I don't have a whole lot of time for anything else. So if you're not going to show up on time, I mean, that's the other thing too. With, I'm a lot more stern and I'm a lot more of a micromanager when it comes to those level employees because there's so many of them and they don't have that responsibility as the managers do, like Mason and the other guys. That if you don't nip certain things in the butt really quick, it can kind of get out of control because of that same age camaraderie too. So like cussing or swearing on the site, like that's a big. We're on multi-million dollar homes in these beautiful, quiet neighborhoods. If I hear someone yell an F-bomb off a roof, like, I live it. Like, that's just not what we do. Like, there's certain standards that we have because these people are paying a lot for us to do a good job, and we don't want our brand marked by horrible, untainted behavior. Which pulling from GCU helps us a lot. I would say that, get some good kids. For those for those listening outside of the State of Arizona, there's a Christian College that Jack and I both went to. It's Grand Canyon University. We get 90% of our hourly employees from there. Yeah, soft hands, but they're good. Soft hands. We, we rough them up a little bit. Yeah.
Okay. So when we're, when we're hiring, we obviously have hired every gender, every age group, everything else. So we obviously don't look for anything. It's just naturally kind of become that way as GCU employees constantly refer themselves. Why has it been so challenging to get good employees that aren't college kids in your opinion?
Well, the seasonal business is what's hard. Not being able to give them something that they can do the rest of the year. I mean, people have goals, and if they are goal-oriented, like they are going to look for something that they can sit there and sit in stone for a while. Now, that's why with like the mid-level, they have that responsibility and they're paid respectively, so that's what brings them in. But on those seasonal workers, it's really hard to get people that are in that age group too, like at a university, to come do labor because they're looking for their financial planning internship or whatnot, where you're getting those smarter cats that are trying to go and do bigger things. They're not going to necessarily get pulled towards a labor position. But we still get great guys too. It's all, it's a numbers game. You pull 30, you're going to get five or six just super good dudes or gals, and they're just going to do what they need to do. So yeah.
Okay. And then here's an applicable hiring hack for anybody listening that has a home service business. Um, once we find one or two good employees, we obviously have a little program to help them bring their friends. Explain what we do to them for that.
Yeah, so like, also this is big. If you've, no, they are a good employee. You don't want to put pressure on them to say, "Hey, like, like whoever they bring is no, what a, no form of reflection of who they are." People work so differently from each other that even if you're best friends with somebody, they might be a horrible worker. You have no idea until you've been around them. So it's very clear that you're like, "Hey, just bring us bodies. Let us figure out what if they're good, if they're going to be a good fit for us or not, because you don't know." Like, you could live with a guy for three years and shows up and he doesn't know how to tie his shoes and he had no idea because he wore Sketchers. So we give bonuses, like cash, to guys that find us people. So, "Hey, bring for every friend that you give, here's $100 or whatever it may be, here's a gift card, here's whatever it is." They'll, I mean, college kids are not on the wealthy side, so they're going to do everything they can for a little bit of extra cash. If that just means bringing their friend to come work with them, that's another thing that adds the camaraderie. You get these groups of guys that all come together, and it's like, "Yeah, I mean, that's pretty easy to build a crew out of people that already work well with each other because they referred their friends."
Yeah, and so action item-wise, this really, this really important that you understand the execution of how the referral program works. And so I learned this when Jack was still a student because Jack got me probably 10 to 15 employees of his friends from like the weight room at school and everything when he was still a college student. But what was funny is when I would first, first ask Jack, and you probably don't even remember this, it's like three, four years ago, whatever it was, I'd be like, "Hey man, I know you have buddies, bring them in." And you would not refer people to me for like a month or two. And I was like, "What, what's the deal?" And then eventually, we pulled back the lir and Jack was like, "I know these kids, but I don't know them that well." So it's like, you were afraid that you bring me a body and then I was like, "This kid sucks," and then I was going to be like, "Jack, what are you doing?" So Jack mentioned it briefly, but one of the things you have to do is you give the incentive. Like, "Hey, we'll give you a $50, $100 ahead for every employee you bring us." But on top of that, the next words out of your mouth are, "If they last for two pay periods." So once they get their second paycheck, we'll give you your money. And then the third thing is, you, your talk track has to be exactly what Jack said. "When you bring us your friends, it is not your job to vet them to hire. That's what we do. That's what our job is as employers. All your job is is to bring us bodies. We will get, we will choose whether to hire them and retain them or not. It is not a reflection on you as an employee." And the second you tell the employee that, that's when they go get their friends. Because like Jack was a good worker and a decent human being, still is. He's kind of a [ __ ] guy, but decent human being. He obviously has friends that are also decent human beings and good guys. It's a birds of a feather thing. And so once you get one or two employees, you can get off of like the Indeed hamster wheel of scheduling 20 phone screen interviews, where only 10 of them, of that 20, even show up. And then of the 10 that show up, half of them can't even pass a drug test. And so like, once you get a few good ones, that's how you capitalize on them. The same way, you know, you do the signage strategy we talk about with your A-frame and everything else. Once you get one good customer, they're going to have friends that are also going to be good customers. The same concept, just with hiring. That's what I always laugh like when we go to some of the expos or like the conferences and whatnot, where people are just talking about hiring, hiring, hiring. It's the hardest. I can't find any good labor. I can't find good work. And it's like, you know somebody, and you've had employees before. Everyone knows someone that's looking for a job or is in need of money. You're just not willing to pay or give them an opportunity to bring more people, or you're just trying to find a, like, needle in a haystack. And that's never going to happen. They're not just going to come apply at your small, like, home service business. Like, that's just not. No one's going to organically reach out to Valley Christmas and be a star candidate and then just want to work for us. Like, that doesn't happen. So like, you have to offer something and be fine giving out $100 to 30 people to find one employee that's going to do wonders for you. Like, you just have to be able to accept that.
Yeah, and the organic thing did happen once, and then he no-call no-showed Thanksgiving week. Yes. It happened. It just wasn't great.
Okay. So outside of that, we've talked about hiring, we've talked about scaling, all that jazz. Now we're getting into the permanent lighting business. Like, what do you see specifically as you scale up? Now it's year-round. We're selling off junk. We're done with that. I think we need to talk about why we made the decision to take junk into the backyard and shoot it. And so talk about what was happening to you running the junk removal business for essentially eight, nine months a year, and then getting that to a decent spot, and then also having to manage a business that in a matter of one week does two to three times what junk removal did per month. So explain to me why you and I sat down and had that hard conversation about, like, "Okay, we need to make a decision here."
Looking at the five, 10-year plan of where we're going, I think for us, like, we're all about creating like value. Like, the whole Christmas light thing is, I mean, people love Christmas lights, and they're willing to pay for it to be done right because there's so many people that do it horribly wrong, and it looks horrible, and you can see it from a while away. So there's like a true value proposition. With junk removal, you can be as like clean and sharp, and your truck can be as clean as possible when you show up to the job site, but this guy's taking your couch, and that guy's taking your couch. Who's cheaper? It's just a race to the bottom. As far because, I mean, there's 9 million people in Arizona that have pickup trucks and a Facebook account that are just going to not pay for insurance, they're not going to dispose of it correctly, they're going to throw it in a ditch, and they're just going to beat you out on jobs. Just the ticket doesn't make sense for it because there's no value proposition. It's two guys walking in your house to grab a couch.
And like, keep in mind, if you're a junk removal guy listening, it's an unbelievable business if it's the only thing you're doing. If you want to be an owner-operator and sit there and rip, you can do very well. You find cool stuff, you do good in business, and you can create relationships with people where you have that repeat business, obviously. But from a scaling standpoint for us, and then just we've found our niche with the lighting, like creating a valuable product that people find value in, and that's more scalable because you can hire with bigger tickets. You have the stomach capacity to hire the right talent, and then you can keep guys busy. The whole goal with this now is have that niche be the lighting world and then keep building crews to where you get more Masons, you get more of those guys because you're able to invest in them and create what you want to create with your employees. And so now that we're going into the permanent and landscape lighting side of it, what's going to make your life easier is now throughout the year, you're not just hiring one, two, three junk removal helpers. You're hiring people that will already be cross-trained for Christmas and finding leadership employees that you can now say, "Hey, this isn't just a three-month thing or a two-month thing for you. We've got a year-round opportunity for you." And it makes hiring and scaling with good talent a lot easier. But the other thing that's really interesting about junk removal versus Christmas is if we just had junk removal, we would be a lot more excited about scaling junk removal, correct? But we had this $800,000 gorilla, which was Christmas, that is like so much more profitable. The lifetime value of a, of a lighting customer is like mid four figures. And like, we have people that we have a $30,000 residential lighting job that's going to come back year-over-year. Like our average junk ticket was $300, $300 and some change per residential junk removal job. Yeah, like the amount of residential junk removal jobs and man-hours you have to do to hit $30,000 in revenue versus a one and a half day job with an eight-man crew to do $30,000 in a Christmas light business for us just made more sense.
Well, especially when you're sitting in the middle of the armpit of the United States, which is the Salt River Landfill, and it's 115 degrees outside, and you're going, "I just dumped that trailer, that's $800 worth of product." And all I would have had to do is wrap two trees or whatever it may be, a tree, to do that same level of work around guys that I want to be working with, and the customer's pumped. That's the key. The customer's, the customer perception of value in the lighting business is, there are a hundred times more people that sing our praises than junk removal. People are pissed to get rid of stuff. They don't care about. They have to pay to get rid of trash. They don't want it. It's not like you're giving them anything exciting. There was no perceived value to what we were doing. It was just like, and again, like, I'll always be forever indebted to junk removal. The other side that I think is really interesting about, yeah, we had a good time doing it. It was fun. The other thing that I think is really telling about junk removal when you look at scalability is we were running a, we were running like a truck-trailer combo, and we were just about to pull the trigger on an Isuzu dump trailer, all that jazz, to buy a new one. You're looking at a six-figure investment. And so what you also had to realize was like, in order to scale junk, you had to go buy a six-figure piece of equipment off rip, and you immediately have to start filling that truck schedule. So you couldn't just ramp up and be like, "Okay, now we give that truck like, you know, two or three jobs a week." It was like, you had to be so busy to go get that second truck that it didn't really pencil for us because of how scalable Christmas was. Like, we get a third crew, I had to go buy a pickup truck that was $29,000. That's it. My debt service on that for the business is $500 a month. Versus the debt service on a six-figure truck with the insurance was like $1,000 before insurance per month coming out on the business that was making less money. And that third truck can then just assist whatever trucks one and two are doing. If there aren't, there were jobs booked up for us obviously, but there was still so much value with that truck even if they themselves weren't doing jobs. There's service calls, there's all these things that they can be doing where the junk, like you would have to be turning down so many jobs per day to be able to justify getting a second vehicle because you're not going to be able to hire labor that's going to sit there for four hours a day and not get a job. It's impossible.
Yeah, it's, it's the phrase like, "run with your fastest horse." And for just us internally, Jack and I, it was very clear that our fastest horse was lighting. And the other businesses that we could bolt on to the lighting business, junk removal and Christmas lighting, was not even the same customer avatar. And so it was really hard to cross-advertise. We probably converted in three years, maybe two or three junk removal customers to lights because it's just a completely different thing. And so at a certain point, if what we were just talking about earlier is simple scales, there is nothing more complex than running two completely different home service businesses at the same time that don't share the same equipment, don't have a cross-marketing, really don't have a cross-marketing opportunity at all between the books, completely different clientele. Yeah. And so that's why we're selling it off. And somebody's going to be thrilled to, you know, buy our book of business and our vehicles and everything else. But we're excited about it going forward. That for anyone that's listening that's wanting to start out a home service business from scratch, if I look back in hindsight, knowing what I know now, I would choose a home service business that has a really good average ticket. Yeah, or has a monthly recurring revenue thing built in. And so if you think about home service businesses with really good average tickets, we're looking at like HVAC, plumbing, lighting, outdoor lighting. Moving companies have really good average tickets if they go cross-country. And then the other side is like home service businesses with a monthly recurring option because those have massive sellable opportunities. Like Valley Christmas residential is not a very sellable asset because it's seasonal, it's one-offs, no one's really contractually obligated. We'll maybe get one and a half to two times our net if we ever try to sell it. Versus if you're a window cleaner or a pool company or anyone like that, the window cleaners can sell all those MR ones. Those have an unbelievable selling opportunity. Like they have exit potential because if you're a window cleaner and your average ticket is the same thing we have in junk, what you can do as a window cleaner that we could not do in junk is you can get people on a quarterly plan, a monthly plan, or anything else to where now you're expanding the LTV, the lifetime value of the customer. Whereas junk, we just had to wait for our residential customers to have more [ __ ] to throw out. People don't get rid of couches every three months. Yeah, exactly. And so it was a tough combo of not a ton of LTV, a really high customer acquisition cost because there's so little barrier of entry into junk removal that every crackhead with a pickup truck can spray paint a piece of plywood on their truck tomorrow and become a junk removal company. And now, yes, and throw their trash everywhere along the I-17. Yeah, exactly. And now, yes, we had 169 five-star reviews on our GMB page, our ads were killing, like we were doing the stuff that we know worked, but again, the boat we were in mattered, and we were just in a boat that we didn't feel like five to 10 years would scale the same way pouring into a lighting business would.
Well, and then when you get to Christmas season and you're deciding between what you're doing with your labor and with your time, you're obviously not going to put as much effort into the junk as you were with the Christmas because you're looking at your two baskets and you're like, "That day is going to do what we did in a week and a half with junk." So it's like, why would I put, I'm going to put all my effort here because this is what's going to give me the most instant reward. So yeah.
So for perspective, because we're a numbers-friendly, uh, group here, so for perspective, Jack, during Christmas season, his crews install $15,000 a day, every day, sometimes more, but it averages out to about $15,000 a day with, you know, 50 something, comfortably with 50 something, uh, you know, in installed days a season, give or take a few. Junk removal, a good day for one truck was like $1,500 to $2,500. We were like, "Hell yeah." And that was a two-man crew working to death, which is good for any junk removal company, by the way. And which is like, that's a two-man crew working tooth and nail, 8 to 10 hours in the sun. But then on top of that, you're paying about 10% in dump fees, most of the time. Like, the dump fees were getting so crazy, got out of control after COVID. Yeah, after COVID, that, you know, it just became less of a pencil. It's a great business, but we had plans of, we, Jack and I, because both of us want to feed our families and our future families with the businesses we're in, at a certain point, you got to look at like, "Am I becoming the ice cream shop that's also trying to sell hot dogs? Or am I becoming, or do I want to become the ice cream shop that is known for selling the absolute best ice cream and continually pouring into that?" Neither of us wanted to say it for a while. And then we just randomly, I came over here, I don't even know why I came over, and we were just talking, and we both kind of looked at each other and just like, "Nah, I think you were feeling it more." "I'm tired, boss." "Yeah, I'm tired, boss." I think you were feeling it more because you were still doing the work, and I was still doing the marketing and all that. And I remember us coming in and me being like, "Dude, we just, let's just talk about it. Like, should we just take it in the backyard and shoot it?" Uh, you know, try to sell it, do whatever else. Um, I think that also is a testament to like our relationship and being able to, because like, you were probably feeling it, and we're like, "Dude, I'm about to go tell Steve the thing that we've been building for three years. I don't want to keep building." And I was like, "I'm about to tell Jack the thing you've been working six days a week on for the last two and a half years building. Let's get it out from under us and focus on a new thing." Yeah, it's a hard conversation to have. Yeah, but not with you. It's pretty easy. But we're a rare case, I would say, which that is a subject we should probably hit on a little bit. Um, having like, finding a Jack is extremely difficult. It's extremely difficult because Jack had to essentially bet on me as an owner when he was an employee. And I'm not saying that to, you know, pump my own pickle. I'm saying that is like, I had to sit there, I mean, it was a rough look at first. Terrible. It was terrible. The thing was messy. And so Jack was graduating college, and I had to have the conversation with him there where I was like, "Hey, this is where I think the businesses are going to go, and this is where I see you fitting into that building. I want to build the businesses to the point where you can feed your family, just like I am." And that took a lot for me because I was just, when I was a dumb, stupid business owner, I was just living out of the bank accounts because we weren't that profitable, and like, we weren't big enough for me to like pay myself a base all.
The time, and I was just being a stupid business owner again. This was three, four years ago. And so, what happened? When, like, if if your good employee tells you, like, "Yes, I want to hitch the wagon to the business and partner up," you then have a duty as an owner to build the business to make sure that you're not paying yourself so much that you can't even invest in grow it. Because if you think about, like, Jack's compensation with Christmas now, you make an extremely good living in two and a half months. Extremely good. I don't, I share my numbers, you don't have to share yours. We don't have to talk about it. Um, I would prefer not to, uh, but because I don't want to put you on the spot. It is so much, it's insane. I'm so rich. But it's a lot easier to compensate high-value positions when the business is making more revenue. And so it's like, I can't pay Jack what I pay him now when we were making $400, $500,000 in revenue in two months. It's a lot easier to bonus aggressively, pay aggressively when the entire chunk of change is, you know, three to four times what it was two years ago. Yeah.
And so that's the other side too, is like it takes more efficient too. Yeah. And that's the other thing too, is when Jack came in, he also made the business more efficient, meaning we were more profitable when Jack took control of that side. So there was also more piece of the pie left over when everybody was paid. Thus, your employees get paid more, they're happier, or whatever else. So that portion is extremely important. What do you think if a new guy is starting out? They just want to hire. They want to find their Jack. Which now, we went from employee to manager to director to now business partners in a separate entity. Like, that's the dream. Now, where like I'm like, I don't want to lose Jack so bad that everything I start now, I need to go 50-50 with him on something new because I don't want to lose Jack. Because I know what happens if I lose Jack. And you know, people listening can might say, like, "Oh, that's not a very strategic thing to tell your employees." Like, when you have a relationship like we do, you can have that conversation candidly, 'cause there's also trust there.
Well, and like, we also know, like, each other so well that I know what he's super good at, and he knows what I'm super good at. And there's never, like, a, uh, not never, like, we, we talk about each other's roles obviously all the time and go over what we're going to do with each other. I'm not saying that it's like 100% separate, but like, I don't touch anything Steve does with a 10-foot pole because he's way better at it than I am. And I don't want him touching a $20,000 residential install because I'm way better at that than he is. Like, it's just how, just say it. It's just how it goes. Just say I sucked at installing. Just say it. You have to, like, if you're trying to find someone else, you have to deep dive and go, "What am I not good at or what do I not want to do?" And find someone that you're maybe interested in, or they are working with you, they are an employee, and be like, "Are they good at that?" Or am I going to try and force them into that position? Like, you can't force someone to do something that they're not, I don't think, naturally good at. As far as leadership and like a growth standpoint goes, like, you knew from the bat that I one would be a workhorse and then the organizational point, like being detail-oriented and all that jazz, bringing you guys like that was what I was good at. And seeing how we could make whatever the sales guys sold into reality. Mhm. And I see how we go from $300,000 in sales to $800,000 in sales. So I go, "All right, obviously you're good at what you do." So it's like, I don't know, you have to be able to swallow a pill like, "I'm not good at that," but that's fine because they're good at that. So yeah.
No, totally. And I think that, like, I think having that level of trust and communication with leadership employees is super important. Because there comes a certain point where, like, there's things that we've talked about where, like, I vly disagreed with Jack on a certain way to do things. And there's things where Jack probably saw that I do is like, he vly disagreed. But because he owns that portion of the business, we can have that conversation and like, not take it personally. And I have had past experiences with leadership employees in all of my businesses where those exact conversations went a lot differently. And so that's incredibly important too, is like, if you're expecting to get guys to care as much as you do about your business, and then in the same tone, trying to pay them $15 an hour and crack the whip on them ever and not give them any creative flexibility, any empowerment, anything else, they're going to burn out. They're going to leave you. And they're not, and they're going to leave for the next best thing. 'Cause the second they get more than adept at the job, people will reach out to them to try to steal them. Like, we even have a competitor in our market that I'm friends with that always makes the joke, like, "Oh, I'm going to steal Jack from you." And I'm like, "Good [ __ ] luck. Like, you could try it all day long. Good luck." Uh, and I think that that's super important too, because you have to understand that we can be as good a friends at ever, we can have this crazy trust, we can have all this and the other, but if you're not consistently taking care of them. And being the conversation I have with myself a lot of the time with Jack, and then a lot of time with other leadership positions in HSA and everything else, is the one question I ask myself all the time: "If I was in that position, if the roles were switched?" So in Jack's scenario, if I was four or five years younger than I am now, now, and I was in that position, is this a good shake for me? And now, you know, Jack has a wife. Was this, would this, if I had a wife at that point, is this a good shake for me? And then I build all of my comp structures and all of the way that we compensate, give responsibility, everything else, in that through that lens. I think that's super important because you also have to understand, like, if you're willing to put that money into them, or if you're not willing to, someone else will. So like, Steve, I'm not trying to toot my own horn, but like, Steve knows that after college or whatnot, if I didn't feel like I was going to have value being a part of his, like, didn't see the future, didn't see what was in it for myself and my family, I would have, not easily, but I would have gone and found something else that would have, like, I would have been fine. You had, you already by the time you graduated, had acquired a very hirable and compensatable set of skills. Yeah.
Like, offre, I want to change gears here a little bit, because Jack and I have been in the trenches for a lot of years now. We have some funny stories. Uh, there's one from this year that sticks out to me. Tell us about the angry wife situation on the booked job with a deposit when you showed up. Start there. First of all, this is a third-year customer, I believe. So it's not like we, like, just a roofline. Third-year customer. I mean, it's about as cake as cake jobs come. Showing up, first job of the day. I knock, say hello to the husband. No big deal. Hear, like, a little screaming in the background, right off rip. And I was like, "That's odd." He goes, "I got to shower." Closes the door, goes away. Like, "All right, that's odd." We get up on the roof. Mind you, like, Christmas. Like, no one's mad that they're getting Christmas lights. It is the most joyous service you could provide somebody. They're all thrilled. Like, 'cause with junk, like, people get mad about price, whatever, because they don't have that value perception. Christmas, you're never on guard like that because, like, every interaction you have with people is always so positive. So we're up on the roof, and this Tesla comes ripping out of the garage. Ladies hanging out. "Get the [ __ ] off my roof. You don't touch a damn thing up." Just scream. Like, when I say, like, a bloodcurdling scream, but with anger. Like, it was the loudest scream I've ever heard in my life. And you were there with a full crew. I'm there with four other guys, 'cause, like, we had bigger jobs for the day. This was like a little one out of the way that we were just going to, I mean, this job literally would have taken 15 minutes, like, what it was already lined out. And like, I'm standing there in such disbelief at first, and like, like, "Hold on, what is actually going on?" Just starts, continues screaming. I go, "Hold, hold up. Who are you talking to?" I was like, "We're just here to throw on the lights. Like, you guys paid a dep." "I don't care what effing contract we signed, blah, blah, blah. Get off my roof." And I was like, "All right, have a nice day." I was like, I said something to the effect of, like, "We're people too." Like, just something stupid like that. And these guys, like, 'cause the kids with me are like, "What the hell?" And they're all just shaking their boots. So we get off. I go knock on the door. No answer. All right. So we just see later. And I remember Jack called me. It's like the dead now. Yeah. It's like the rare time that Jack called me on site. And he was like, "Dude, we got a deposit paid. Some lady just screamed bloody murder at us. We're leaving." I was like, "Just go, man." And the husband was so terrified that he didn't even come out and say, like, "Sorry." He just, like, hid inside when she left. Yeah. I knocked multiple times, heard stuff, and he was just probably so mortified that, or she killed him, but who knows. Yeah, one of the two. So yeah, that was the five years, couple hundred installs, close to 500 installs, 600 installs. First one we've ever been told to leave. First time we ever had that. Okay, that was a good one.
And then what was the other? Oh, um, so then tell them about. So for background, we're an ultra white glove Christmas light installation company. We do pro athletes, Fortune 500 CEOs. Occasionally the sales guys have to sign NDAs. Yeah. We have a high net worth client base. Scottsdale. Yeah. Scottsdale, Paradise Valley. It's some of the richest ZIP codes in the country. Um, tell them about the unfortunate firing we had to do of an employee a few years ago. Yeah, I mean, we're pretty lenient, right? As far as, like, second chances and all that stuff goes. Um, like, kids are dumb, whatever, people make mistakes. But, uh, this guy is a pretty prominent figure. Very well known, especially with our, uh, crew age group. And the customer, the customer is very well known. And, um, I don't even know how I saw it, but this guy decided he was going to post the customer's house on his Instagram story while on site. While on site. Saying his name, showing the house, showing address, all that jazz. And this is like a very good connection that Steve and I have, like, with this person and with what they're involved in. And it was just like, "Oh my gosh." So he, he docked a very high net worth, very prominent client of ours, home address and name in a single Instagram story. Is that what it was? Yeah. Yeah. And then, gosh, I don't, I think someone told me originally. Like, I think it was honestly, like, my girlfriend at the time, now wife, like, was like, "Hey, like, do you see blah, blah, blah story? Like, I heard saw you guys did this person's house today." And I was like, "Nope." And then so Jack got it first. He was like, "Steve, we got to can this guy." So I immediately called him and was like, "Hey buddy, like, appreciate it. We got to part ways. Like, this is just, like, this is not a teaching moment. This is just pure IQ. This is just not going to work out." Started balling. Yeah. Yeah, he cried a little bit, but it's part of the game. Uh, the other side was after that, we got it taken down, but the damage had already been done. And over the next, like, two or three days, I got like, two or three texts from connections I know that were expressing that he knew about it, someone showed him in one capacity or the other. Thankfully, there's still a customer. I had to apologize, go back, go go over there with a little bit of egg on my face. But like, those are the things that no matter how many systems and processes you can put in place, you put new systems and processes in after you get burned once. And so like, from there on now, Jack, with all the new guys, like, "Hey, shouldn't have to say this, but now I have to say this because it's happened before. We don't post customers. Do people." Yeah, we don't dox famous people. So that's a fun one. Other than that, it's been pretty kosher outside of a few things. We've, we've stayed pretty lean in terms of problems. The funny stories with junk really are just what you find and then, just looking at each other and just being like, "What the?" Like, that's a pile of bricks and it's 115 out. I get it. Counting. All right, 46 more wheelbarrows to this truck. It was more of a camaraderie, like, "Oh, we're in the, we're in the trenches right now." Junk was definitely a middle to lower class service too, a lot of the time, because we got hired by a lot of property managers, evictions, all that jazz. Yeah. The amount of pornography, like, like print pornography that we threw away in that junk removal business was from old, like, just old creepy dudes. Like, dudes who had garages full of porn. Yeah. And hoarders. Rooms, just gnarly stuff. Sex toys, you name it. Dildos were frequent, frequent. Big, frequent, big black dildos. Jack always insisted on throwing those away himself. He never let me touch those. Jack always wanted to do those. But yeah, outside of that, those are probably the craziest, the craziest junk stories. We had the eviction cleanouts were very depressing, actually. That was never fun.
Let's wrap it up. Jack, Jack, tell us about your new, your new baby. You've now officially got a warehouse. You know, we get places to park the vehicles now. We're getting the Google pin moved there. Tell us about what the warehouse changed and why we made that decision to essentially write a $2,000 something dollar check every month. Yeah, I mean, it just goes back to the system. Um, we always operated out of these two storage units that were right next to each other. They're big and they fit our stuff. They wouldn't have with this year's growth. Um, so one, we needed more space for growth. And second of all, being like, with that pick list, if everything's stacked on top of each other and it's blah, blah, blah, like, I might know where everything is in my squirrel brain, but the guys won't be able to clearly find stuff. So that was big for us, being able to have everything spread out, organized, very, very clear inventory. Is a lot easier when you can see it. Um, I feel like we ran into far less inventory issues this year for sure because it was just, we know what we have and it's very clear what we have. Um, and everyone could see it. So there's constant reminders of that. Um, and then yeah, I guess just peace of mind too, like having that organization is very nice. It takes a level of stress off of the mornings. And then also, like, when you hire that many employees, you want them to feel like they're stepping foot into a bus, not like a random mom and pop operation.
So how much of a difference maker was it for you on day one to bring these guys straight into like a warehouse dialed in spot dedicated where they could park their trucks versus like we used to pick them up from a Costco parking? Was it Fri parking lot? Yeah, different, couple different parking lots. Yeah. And then we would, we would, so Jack and the crew leads would like fill the trucks with the pick list for the day from the storage units in the morning. Yeah, early in the morning, they would fill up the trucks from the storage units, then go meet all the guys at like a Costco or Walmart or something parking lot, put them in the trucks, and then go there. Just, just bush league, which just burns us out more. Like, being able to just show up and have everything there and have the guys be there. Um, one, get a little bit later start to the morning, you're not wasting as much payroll, I guess. Earlier start to the morning because you're not driving to pick guys up, etc., etc. Um, and then just the standard to, like, you know, you're coming to like a warehouse, you're not coming to a guy's house or garage or a random parking lot. Like, you all have your uniform. Like, this is a business. Like, act accordingly. So yeah.
And so then if you think about it from my perspective, right? Like looking at a P&L, the way it was such a slam dunk for me because like Jack was very clear that we wanted that and I was of course on board with it. But of course, I'm the person that looks at the P&L and goes like, "Oh, $2,000 a month new, $24,000 a year bill overnight." The thing that really sold me on doing it and like feeling like we were in a good spot is I knew we were profitable enough to do it. That was one. But two, when you look at labor, when we were picking them up and coordinating that, we were essentially wasting an extra 30 minutes per employee getting them set up when they were meeting there. So if you think about it, if we have three crews running a day, and on those crews, we have a crew lead and then combined, probably what, with crew leads and everyone, it's about, what, 10 employees a day? Uh, we had capacity for 11. Yeah. So 10 or 11 a day, right? So think about, so 30 minutes a day across, let's just call it 10 employees, that's an extra five labor hours per day set on fire. Yeah. Just because we didn't have a warehouse. So if I looked at it over the course of, you know, 25 selling days a month or 25 installed days a month, it penciled very clearly why that was going to make sense. So that was the other thing too, is like, we've never been afraid to invest money if we knew that the investment on the front end was going to actually end up making making us more profitable and efficient on the back end. But that becomes a product of your systems. You can't just like buy something expensive and not change everything else. You have to buy the thing that's expensive and actually get the money's worth from it. Yeah. Like for this year too, tear down looked a lot different for us because you're driving straight to the warehouse with all of your guys. So unloading the trucks and keeping everything dialed was so much easier from an operational standpoint to where, like, 'cause this year before we spent probably what, three weeks getting to where we need to be. Like, it was still organized as we put things away, but just like, "All right, let's get this in tiptop shape to where we're going to be able to just hit the ground running come October 1st." This year, I mean, I can show up 30 minutes before season starts with the rest of the guys and that warehouse is ready to go and we're ready to install another $800,000 without changing anything else. Which was huge for me, I guess, as a peace of mind too. And saves us money with the, Oh, it definitely saved us money. Yeah. All right, Jack, thanks for coming out.