Starting your own home service business can be challenging. There are several issues to overcome before starting a business, and our guests in this episode will tell you how. Hosts Tersh Blissett and Josh Crouch sit down for business insights from Ellen Rohr from the Zoom Drain Franchise Company and Drew Cameron of Flow Odyssey. Ellen and Drew discuss how they started their service businesses, the challenges they faced, and how they are scaling and growing. Want to learn more business tips from Ellen and Drew? Then tune in!
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Overcoming Issues In Your Home Service Business With Ellen Rohr And Drew Cameron
We have Ellen Rohr and Drew Cameron. We’ve been talking for a little while now. It’s one of those things where the more you talk, the more you find out information that you want to talk about. That’s the way it goes. I’m a naturally inquisitive person. What would happen if we did this? That’s probably why I have so many companies and different exploratory ideas and stuff. I’m super thankful for all of you to come and spend some time with us. You all have a jam-packed schedule. I know you all do. We’re so thankful to all of you for coming on the show. With that being said, would you mind introducing yourselves, who you are, and a little bit of background?
I’m Ellen Rohr. I’m the President of Zoom Drain Franchise company. I’ve been in this industry for a long time. I married a plumber, a guy named Hot Rod, once upon a time. That’s how I got introduced to this great industry. I like to think of myself as an industry champion. I love dirty jobs and the people who do them. I think they deserve to make a great living. We aim to create careers, not just jobs, in our franchise company. I’m excited to visit with your audience, so thank you so much.
What is the franchise? What is it called or all of that?
It’s Zoom Drain Franchise. We’re the drain and sewer experts. Our promise to our customers is that we’re going to be fast. You got to get there fast if the drains are clogs. We’re focused. All we do is sewer and drain. We’re experts like what brain surgeons are to general practitioners. It’s all we do and we get it fixed. Even if we’re not the guys to fix it, if we have to bring in an army, we’re going to stick with our customers and make sure that the job is handled. Those are things that customers are looking for. For our franchisees every day, we help them get calls, techs and trucks. It’s a very simple and elegant process, and I’m excited about what we’ve accomplished so far and what’s to come.
I have questions about franchises because I get questions all the time about joining franchises, “Is it a good idea? Is it a bad idea?” It’s like having a business partner and people are like, “Should I bring a business partner on or not? Have you had good experiences or bad experiences?” I have tons of questions for you.
I’m happy to have those conversations.
How about you, Mr. Drew?
I am Drew Cameron and I am the President of Flow Odyssey, as well as Energy Design Systems, that’s a small software company that we own. I’m also one of the founding members of EGIA, which is putting on EPIC2021. I’m happy to be here for that and sit down with all of you and my good friend, Ellen.
We love each other.
We stole you guys before you guys got busy.
It’s a great lineup at EGIA. This is very exciting.
What got you into the industry, Drew?
Like Ellen, I’ve been in it forever. I started at age twelve, so I have many years in the game and family business. I have two brothers and a sister. My dad and mom are all on the business and I’m the last one left.
Does everybody says, “No, this isn’t for me?”
[bctt tweet=”If you are interested in starting a business, you got to learn how to do the business.” username=””]
Unfortunately, I lost both my brothers. They are of different ages, but they were both in the industry up until that point. My sister, mom, and dad retired from the industry. The three of them are still with us. I grew up in the industry and I worked in every facet of the HVAC business.
What are your whereabouts, geographically?
I grew up in the Philadelphia market, just outside of Philadelphia. We were in Chester County, Delaware County, New Castle County, Delaware as well, parts of Jersey and Maryland.
I have a buddy of mine that’s in Maryland who does plumbing, electrical, HVAC, and it’s wild. That DC area right there is where he is. It’s crazy how fast he’s growing. If you provide good customer service, there’s so much potential in that market.
Everything is like an hour away. All these metro areas are an hour away from DC.
That’s where I went to school too, at the University of Maryland.
What questions do you have because I’ll sit here and ask questions all day long?
Back on the franchise, I was thinking because everyone wants to start a business. Everyone is like, “I’m the best tech here. I want to start a business.” They go start a business and they realize it is not what they think their boss does every day. Where would a franchise come in for somebody that’s a technician and wants to get into this business?
Before we got on the call, we talked about the audience here. You talked about business owners and managers, and what piqued my interest is that service tech who might want to be a business owner. If I could answer or explore that conversation from that perspective. If you have service technicians, one of your responsibilities could be that if I don’t find a place to keep these people engaged, and create careers not just jobs, then they are going to leave.
The fizzy ones are going to go start their own businesses. What I know from being in this business for a long time and from personal experiences is that the likelihood of that business is going to be terrible is very high. The phone rings all the time. You maybe even enlisted your wife to work with you. I don’t work with my husband anymore because early on, when we were in that mom-and-pop shop, it was brutal.
You can take that home with you. The boundaries are very easy.
Now the business, a lot of times, can be out of the home. You don’t even get to leave the office and separate from your life the whole time.
We weren’t charging enough like it took me 30 seconds to get to this. What do they say? “To the man with the hammer, everything is a nail.” This is my nail because what generally happens is you don’t make enough money. When you run out of money and you run out of options, it gets very stressful. I would say to my husband, the plumber, “We don’t have enough money.” He would hear, “I’m not good enough. I’m not working hard enough.” We did so much damage in those early days. I like to bring them up.
Are you guys familiar with Frank Blau? Are you old enough to know who he is? You might have known him throughout the industry. He’s an old-timer. I wrote him a letter. He wrote an article in a magazine, that article came out in 1989, about how much should a contractor charge. He does this little breakdown which you probably have done and I’ve done like what is a one-man band. What are the actual expenses? He does it in the magazine. I’ve read the column. I wrote him a letter and it went like this, “Dear, Mr. Blau, please help me. My husband and I are hating each other. We don’t have any money. We’re dead into our eyeballs.”
I spend two pages telling him why none of that is going to work for me, “You don’t understand my cheap customers and crappy guys.” Now in my life, sometimes I sound like a bossy person. Tomorrow, I’ll probably insult someone because I have little tolerance anymore. I’ve made every stupid decision and mistake that you can make. It started with being chronically overpriced and very committed to it. I have a Degree in Business Administration. I thought I knew something and I got humbled.
Frank called me up after I wrote him this letter. He told me where my head was, first thing. I’m listening to him on the phone and I’m like, “Who is this guy? He’s just a columnist from the magazine.” I hung up on him. I was like, “I’m not having it.” Hot Rod comes home that day and I told him, “That guy made me cry and told me where my head was.” Hot Rod was like, “I think you got to call him back.” I did and I’m tear-stained. I ended up joining Contractors 2000 when they first started. I wasn’t a founding member, but I went to the first super meeting. This is going back to the early 1990s, but that’s when I got a clue. I know you’re asking about franchising, but what I did is I had to learn how to run a business.
You weren’t in a franchise at that point.
The contracting industry wasn’t around at that time. Was it?
Mr. Rooter was there.
These are the foundation for that.
They have been around for a very long time. For us, as a trade association, a group like EPIC and one of the greatest affinity groups, if you are interested in starting a business, you got to learn how to do the business. In fact, probably the best thing I ever did was never learn how to do the work.
I’ve said that so many times before. I’ve had conversations with a buddy of mine. It was an HR Expo several years ago. We were up on stage and having a round-robin conversation. We got onto this topic of, if I’m an accountant and I purchased an HVAC company, I see a lot of success with that because I’m not the person out in the field. You can’t call me and ask me how to diagnose this capacitor. I don’t have a clue. You have to hire talent in that aspect but you have to trust people too. If you’re going into that route like, “We are an HVAC company.” I know that you are big on staying in your lane like plumbing and you stay there. If you’re an HVAC company and he’s good in plumbing, you bring plumbing on.
I feel like the fact that you don’t know plumbing is probably an advantage to you. You can hire people, but then you have to trust people. We’ve had people that we interviewed that are really good, but they’re horrible in the field. How would you go about doing something like that with you and not having the experience in the field? You had Hot Rod that could weed through the BS.
I’m going to give you a very collapsed version because I want to hear from Drew here too. When we raised our prices, we just made more money, paid off debt, and had some freedom. Step one in any business, if you are running it out of your garage or whatever, is to get priced right. You can do the math or you can triple or quadruple your prices and see if that doesn’t help because it will. Once you get a little bit of cash and you pay down that debt, then you have options. The next thing that happened is I turned to my husband, Hot Rod, the plumber. I said, “We’ve got four trucks. We’re getting about $1 million in sales. We’re in Park City, Utah. We’re going to Salt Lake. I know where all the rich people live. I’m all set.”
I asked him, “What do you want?” He says, “I like working all by myself.” Every day, I was either getting fired or quitting. We were not very well. Now, as I look back at it, it’s funny but it was traumatic at that moment. That’s such an important question. I know we’ve already brought it up now. It doesn’t matter what anybody else is doing. What do you want? Do you want to work all by yourself? You could charge a lot of money. You could find some boutique niche. You could do the whole West Coast chopper model and get in line, and you could be very successful doing that, or I wanted minions, people, development and careers.
I love technicians. I’ve been on 189 ride alongs. By this time in my life, it should have been 1,000. No bad thing comes from strapping yourself into shotgun position, and go and see what happens because most of what we think up in the office makes no sense at all until you go out and go, “Do you like this?” They go, “That’s the most stupid idea ever.”
“This form is ridiculous.”
“This one that we do over here already in three different times, those were always my great ideas.” Going into how do you trust them? What we did is we decided not to work together. This is when I went through my Nexstar phase. I was deeply and positively impacted by that group being around other contractors and going to visits.
You are the five people that you surround yourself with.
I never knew. It was such a mind blow. Even at that time in the early 1990s, we’ve lived through this. There was this big wave of consolidation. This brings, “Will you play with others? Could you play with others? Is there some advantage in that?” It’s part of the question behind a franchise. If you don’t want to play with others, I don’t think that franchise is for you.
You can’t just be like, “I’m going to pay my franchise fees, and I’m going to stay over here in my corner.” You can’t do that.
Long story short, I ended up being wooed by Clockwork. I went to work at Benjamin Franklin. I was the only employee. I called myself president. You can do that. We grew on my watch. We got to 47 franchisees and it went fast. It was a brutal few years but I learned a ton. I knew I loved the techs but now I love the franchisees because of the dynamics. A healthy franchise works like this. You’re interdependent and you’re pulling on each other. The franchisee is going to go, “I don’t like that.” The franchisor is going to go, “What would you rather do?” If you have this dynamic, then the franchisor is in charge of documentation, dissemination, maintaining the brand, coaching, and connecting the dots. Typically they say about franchising, “You’re in business for yourself, but not by yourself.”
If that appeals to you, franchising can be a good model. There are a lot of very successful franchises, but it was with Benjamin Franklin that I learned to love that model. If you don’t play a good enough game at your company, franchise or not, those techs are going to leave. I want to hear from Drew but I want to come back to what kind of counsel we could give to that young at heart person who’s thinking about maybe going out on their own.
[bctt tweet=”If you wanted to start a business of your own, learn everything you can at the job you’re at and make your opinions known.” username=””]
It’s important to know your numbers, but you also have to make the sale. I think it’s more along with Drew’s experience.
If you can do this at $50 an hour, we wouldn’t need Drew.
You come to find out that most contractors are underpriced. You’re underpriced and undercapitalized. You can’t sell and most of them can’t market. That’s all the business side of things. What happens is most of these technicians jump into the business. They become an owner and operator. You need to get out of being that operator as quickly as you possibly can.
What do you say to people who have “successful company” and they are still in the van? I’ve seen a couple of people like Greg Fox comes to mind. He’s a friend of mine. We’re not like buddy buddies but he’d done a very successful job out in California of staying in the van. He got tons of technicians. He also has people in the office who are very successful. I feel like that’s probably the reason he’s able to do that. For me, whenever I talk to anyone and they’re complaining about anything to do with growth, I’m like, “You got to get out the van. It’s the first thing that you’ve got to do.” I feel like that’s your stall.
They say in business, you’re either the leader manager, the artist creator, or the entrepreneur. You have to become an entrepreneur. At the first, you’re all of it.
That’s like in the E-Myth.
Working in the business and they own the business. There are all these little mantras out there but you’ve got to replace yourself, whether you be in the truck or you’re the salesperson. You have to get in and work on the business. You have to be at the helm. I equate it to if you’re a salesperson or a technician, you’re working on the engines and the boiler room and there’s nobody captaining the ship.
You don’t know where you’re going. That’s a great point there. As you said, the technicians are starting their own business? If I’m making $25 an hour working for the plumber down the street, and then I start charging $50 an hour, in my mind, I’m banking. We’re golden. At this point in the realm of things, can you see time and material being successful? For me, I feel like if anybody asked one of my guys, “How much is it going to cost us?” “It’s going to be $650.” “How long is it going to take you?” They’re like, “It should take about an hour.” “Do you charge $650 an hour?” I’m like, “No.”
That’s what you see in the bad reviews. It’s like, “You’re $600 an hour. What did you do?”
What would you say to the technician about their numbers when it comes to that? How do they even know what to do there?
I’ll keep my answers short because we have the numbers lady with us. You have to know your numbers. At first, time and material are probably how you get out of the gate. That’s how you’re going to start, but the thing that you’re not taking into consideration on time and materials is overhead. The average contractor who starts out of their house thinks they don’t have overhead. That’s the mistake. You do have overhead. A portion of your house is your overhead.
Even if your truck is paid for it, you have to buy another one in the future.
Also, your cell phone and your tools. You have personal insurance, and then you have to take out your general liability insurance. You have the same cost structure. When someone says, “That $10 million business has way more overhead than I do because I’m working out of my garage.” Dollar-wise, they do but percentage-wise, no. Percentage-wise it’s about 200% to 300% of labor. Whatever your overhead is, it’s going to be about 200% to 300% of your labor or 30% of your business, in most cases. You can look at it in a couple of different ways. You have that in your garage and you have that if you are a full-fledged large contractor, but let’s turn to the numbers lady.
My area of expertise based on my own personal experience was I got a handle on the numbers. I try and keep it super simple. It’s not complicated. You got to understand a balance sheet and a profit and loss if you want to go into business for yourself because it’s your money.
Do you have to know that before you get started?
If you don’t, you’ll hit a rock and then you’ll figure it out. Is that the worst thing? No.
Find an accountant that can explain it to you.
It’s maybe all of that. I didn’t have a business plan when I started a business. At some point, you run into the rock of not having a plan. Wherever you are is where you are. There are drain cleaners down in Southern California that surf and clear drains. They seem happy. If you’re happy, that’s great. What can happen, and this is coming from an older person, is you can’t do it forever.
Eventually, your knees give out.
The backs, the knees, the shoulders, and stuff gets a little bit rough in that. When you hit a rock, sometimes that’s a time to assess. You and I talked about health crises before. Those rocks in your life are these moments where you take an assessment and think, “What do I want to do differently?” The point of power is if you’re happy now, it’s great. If you want to change something, a plan and knowing the numbers help. Along your lines too with the overhead, a bigger company has so many billable hours over which to distribute that overhead.
That’s what I was thinking about when you said that. We’ve gotten to the point where we have enough technicians where it’s like, “We have a lot of vans but I don’t feel the pain that I felt at 1 or 2 vans. I felt that pain.” Now you have twelve vans and it’s like, “How can I afford twelve vans?”
You lose a guy and you’re losing a twelfth of your sales. You lose a guy and you lose half of your sales. That’s going to hurt. Now you’re doing it full-time again. Whatever you want to do is fine. If you do aspire to grow, you come to a point where you think, “How do I act as if I’m a bigger company? What do bigger companies have?”
George Brazil, once upon a time, told me that his theory was that most companies stay at three or fewer trucks. From what I can see, that’s 80% of all the contractors out there. It’s a very fragmented industry. They stay at about three or smaller trucks because that is as many as you can keep your hands on. You can micromanage.
We’ve talked about this all the time. It’s crazy that you said that because it is so accurate. It’s like, “Would we put up with this person if we had 50 employees? We’re putting up with them now but should we put up with them?” We have a bleeding heart syndrome over here where it’s like, “I don’t want to fire him. He’s got a family.” He’s not hitting his KPIs. He’s not doing delivering what he’s promised. We’re delivering on our end. If we were a larger company, would we be able to do that? Should we be limiting ourselves because we have a bleeding heart? We don’t want to get rid of this guy.
Are you being nice or are you being enabling? I believe everybody has a place. As a consultant, I know you’ve seen this and I think it’s brutal. I show up and somebody says, “That’s Susie. She’s the owner’s daughter.” There’s this black cloud over a desk. It’s like an archeological dig. The whole thing is a hot mess. I once had an experience where this guy said, “I can’t fire my sister. I bought the company from my dad and he said, ‘She’s unhireable, you got to keep her on the payroll.’” She’s not doing anything. I’m like, “Why don’t you pay her to stay home.” You’ve probably given that advice too. “She’s not doing anything so pay her to stay home.” He did and came up with the contract. Two weeks later, she had a great job at which she was going to be much more successful, and she still was getting paid for two years. I’m like, “Good for you.”
When she was there, she was adversely affecting the culture.
Your assumption that you’re being a bleeding heart, you’re enabling someone to chronically lose. I don’t think that’s ethical. I’m talking to that technician. If you wanted to start a business of your own, number one, learn everything you can at the job you’re at and make your opinions known, “I want to start my own business someday.” Your boss is on notice that you’re going to go or he has to up his game or she has to up her game to keep you. “That’s fair. Let’s talk real to each other. Come into the office. I’m doing the budget. Let me show you how I do this,” even if he or she goes and starts their own business.
How often do you see that happening? We do that. We’re an open book. Whenever I ask, “What do you want to do with your future?” “I want to own my own business.” “Okay.” I’ve had several technicians that have come in and said, “I want to own my business” There was Lance. He’s become one of my best friends now. He said, “I want to own my own business one day.” Two years later, he’s like, “Screw that. I see how much you’re doing.” Now he’s a TM for train. He was like, “I go this route.” We were an open book and I said, “This is how you balance,” and all this other stuff. They’re like, “I’m not interested in that. I just wanted to get rich.” I was like, “You know how you become a millionaire? Be a multimillionaire.”
Be an influencer. There are a lot of ways to play.
[bctt tweet=”You have to embrace the technology that’s out there for whatever aspect of it that you can.” username=””]
With that being said, peer-to-peer groups. We mentioned this earlier, “You are the five people that you surround yourself with.” I found that things when I first started my first business in 2014 that I thought was impossible. Now it’s like, “That’s a piece of cake. All you do is X, Y and Z.” It’s because I can ask any of my friends that I meet with every Friday. With that being said, why start EGIA? How did that come to fruition?
It was a nonprofit organization that worked with utilities out of Sacramento, California. When a utility has a rebate program or any type of campaign, more often than not, they’re not running that. They hire some third-party entity to handle the fulfillment of that. EGIA was doing that for many years. In order to finance those projects that people would do businesses and homeowners would do, they found that the contractors that they partnered with, the utilities were pushing the work through to incentivize customers to make these energy efficiency upgrades so that the customers can afford it.
They started a financing platform. They said, “We’ve got the financing platform. We’ve got the utility side going. What we should do is start a vendor group where we get the preferred vendors in, and we get group purchasing power of these vendors for our contractor network.” They had about 25,000 contractors that they were partnering with out of the California area. When they decided to start that, I said, “Why don’t you also start an education entity. I can find you the guy that can get you into that business.” He runs the vendor model as well as the university. I think it was in 2016 when we had that idea to start contracting university.
You guys have an array of videos for everything from financing to sales, to marketing. You guys have industry leaders that have been doing this for a long time. It’s pretty cost-effective to start. That’s the thing too with all these training groups. There are trainers online and everything else. It’s a huge upfront expense for someone that wants to get in the business and learn. Drew, maybe you can talk a little bit about what that looks like from a membership perspective?
We’re up to about 1,100 members right now nationwide and in Canada. Many of them are all over the trades but were primarily focused on HVAC and sewer. EGIA’s mission is to promote energy efficiency in the marketplace across the United States and Canada. That’s what we’ve got going. What we decided to do is we assembled this huge talent pool of the best of the best minds in the industry, sales, marketing, business, pricing, organizational structure. Ellen was part of that initial group that sat down. We had about 17 or 18 of us there at that meeting in Scottsdale when we first met. We decided to build a platform where we would have live classroom training, virtual training, videos, as well as online content that was recorded and downloadable content.
Everything that you can think of for any learning modality is available through EGIA at a very affordable cost. It’s only $499 a month because we’re a nonprofit. All the other best practices groups are out there and there are some good ones doing some good things. They tend to be quite a bit more expensive because they are a for-profit business. They have to make that engine run. EGIA already had the infrastructure to run. All they had to do was bring in the talent.
Honestly, what I can tell you from my experience was your guys is fine. Because you guys are so large and you have many partnerships, we were able to use a finance partner. With our equipment manufacturer and stuff like that, we paid for the membership more than what it was worth, plus we had all the free assets that we could go and watch anytime if we want to go deep into a topic. I think that’s the power of a group like this where it pays for itself based on what you sell. You’re getting free training by selling these products and using the financing programs and stuff like that that you guys have. I know that EGIA, in a very short amount of time, is going to be announcing a new finance partner and program for everybody as well.
The nice thing about it is it’s very accessible to any contractors. We’ve been talking about the contractor that is a technician who wants to go into business for themselves. Even that person can afford this organization because they can get access to everything. They don’t have to go to the live classes. We do virtual classes and we have all this recorded content. It’s Google for your HVAC business. You can find anything you need.
This is what came up for me when you said that that’s affordable and because we can have these buyer’s programs. That’s awesome and here’s what I would want you to watch for. What we see in this industry, and what my mentor, Frank Blau, talked about, is a lack of self-esteem. We have a service technician who when the boss comes up with a price and it seems exorbitant. They’re going to charge $25,000 for the system that creates weather in your house and it seems too much. This guy goes out on his own and his thought is, “If I cut corners, I can charge less.” What will happen is the manufacturer rebate comes out or the discounts on these products, and they don’t even keep it. They give it to the customer.
I went to Italy. I went to a manufacturing plant there. My husband works for Caleffi. They make hydronic and solar components. It’s unbelievable and beautiful. They test everything. Dan Holohan tells a story about a copper elbow and its journey across the world, just about how interesting a copper elbow would be. When he told me that story, I was thinking about all of the families that are responsible for bringing these products to the contractor’s door, and then the contractor is responsible for making sure the whole chain of distribution gets paid what they’re worth. Unless they learn how to sell and unless there are systems and procedures for operating at a solid level for getting the job done the first time for making good on the promises of the salesperson, you made everybody in that whole distribution take the hit. The customer is often the richest person in the whole line.
You’ve undervalued everybody in the process.
Part of it is because I don’t know how to do any of these things. I’m not a technician. I’m so appreciative of someone who can do it like lightning wranglers or electricians. Solar guys turn the sun into energy. What could go wrong with HVAC? We have the gas, electrical, fire. That should be expensive. That’s how I feel about it. Your team should make a good living doing that work.
A lot of people were like, “I don’t know as much as people think I know.” It’s like, “I don’t want to charge what they’re charging because I think they know more than I do.” In reality, they probably don’t. There’s a chance that you might know more than they do about this, so you should be charging more than them. I’ve seen that before where junior technicians are saying, “$600 for a condenser fan motor. It only costs $89.”
They don’t know their numbers and the other thing is they don’t know their skills. You’ve seen this too. A talented technician has a lot more confidence in the sales process. They’re not going to sell something they don’t know how to do. This is where my buddy Al Levi comes in and the real influence that Al had on my life first off is he’s my best friend forever. If you haven’t read The 7-Power Contractor, please do so. It’s good.
What Al did is he said, “What we’re going to do is we’re going to teach these guys and gals to get good.” That comes down to that painful process of writing down your systems and procedures. Now this involves Google Docs, videos, Trainual and some more updated ways to deliver this information. When you said trust a guy, trust him to do what? The game is we create a procedure that now serves as your training curriculum, your accountability measurement, and a resource for this person out in the field to access. Otherwise, they’re going to YouTube which is helpful.
We even have videos on YouTube. I’ve had a customer say before like, “Your guy was watching YouTube while he’s putting on this condenser fan motor.” I was like, “Who was the YouTube of?” It was like, “It was a YouTube of you.” I was like, “That’s my point. I had him going back because it wasn’t a normal condenser fan motor. It was a special one-off so I had a YouTube video of me doing it.” He gave me a hard time about that.
We use interplay learning also for the same thing. I’ve had guys in the attic with a blower motor, heat strips or stuff like that and they’re going back through a course that they know they’ve already gone through before. They’re like, “I just want to refresh. I want to make sure I wasn’t making a mistake and all this other stuff.”
He’s not calling you.
That’s the other thing.
There’s your key to freedom. That’s the impact that Al had on Zoom Drain and that he’s had on so many companies. I met him once upon a time because he was a Contractors 2000 member. Al and I have known each other for many years. That book is valid and getting you on the path of understanding those areas of your business that you need to document and disseminate, so that people know how to do things so you don’t have to answer every question.
We had Al on the show. He was great. Al also says to tell Drew, “Hey, Drew.”
Al is an influencer now, who knew?
We’re glad to have Eddie McFarland as well.
I was out in Ohio with Eddie at the Copeland Scroll Factory, the Copeland Compressors. They are great people. The program that you have and that you’ve created, what’s the backstory on creating something like that because you were in the industry. You were in HVAC because in my mind I’m thinking, “How did you transition from plumbing to low energy design?”
Energy Design Systems is a company that we ended up buying. I have two co-owners with that. We ended up buying it from my friend’s widow after he passed away. Phil Jeffers was the genius behind this. He built it several years ago. He was selling elite software, RHVAC, which was a residential load calculation program. He’s selling that and teaching it. When I left my family business after we sold it, I got into working with him selling load calc software and teaching load calc software. Basically, it’s a sales tool. I’m a sales trainer so we were using that as a tool.
He decided to build his own platform. He figured, “I don’t need to build a standard tool. I can build a sales tool where I can differentiate salespeople in the home and tell a story to homeowners at the table with a load calc.” Most contractors do a load to get the result that they already know, and they gamified the software. You can take a process like ACCA Manual J and most contractors gamify it to get the result that they want.
[bctt tweet=”The technology doesn’t lie. It’s math, facts, science, data. It is not opinion. ” username=””]
He saw that and he said, “Why have a tool like that if we can develop a simpler faster tool that will allow us to be more effective at selling?” What I come to find is when I teach load calculation software classes or even sales training classes, I’d ask everybody, “How many of you do load calculations?” Every hand goes up. I say, “On every single home.” Every hand goes down. I said, “What if you had a tool that would allow you to do that in five minutes?”
I’ve talked to people before and they’re like, “I’m going to spend an hour and a half. I’m going to measure every single room. I’m going to find their insulation R-value inside their walls and everything else.” They’re going to say, “You’re too expensive.” I’m going to take your heat load calc. I’m going to ask this guy to give me a price on that same thing. I don’t do a heat load calc until after I sold the system or sold the job. You sell one that’s a half-ton too small, and then you’re going back to them and say, “I have to charge a couple of extra $100 or $1,000 because I priced it wrong because I did a heat load.” How do you have that conversation? What do you tell a sales guy or a company specialist that feels that way strongly?
As a sales trainer, it’s that time in the home where I get to walk around the house. I get to see every supply and return. I get to measure all the windows and the doors. I’m seeing what they value, how they live, and what’s important to them.
You’re making sure that they come with you. What happens if they want to sit in the living room or they want to go back to their home office and they’re like, “Just get me when you’re done?”
That happens. You roll with the punch if you have to. More often than not, if I explain my process to the customer like, “Here’s the process that we as a contractor have to go through, and you as a homeowner should go through when making an investment of this magnitude.” I walk them through what the process is. I’m going to have a lot of questions. You’re going to have a lot of questions. I’m going to have you take me on a tour of the house. We’ll turn the system on if we can and if it’s running, but I’m going to have you show me the location of each supply and each return. We’re going to measure the house. We tell them in the process, so if I set expectations, more often than not, they come along and play.
Even in the attic?
More often than not, they will go in the attic but that’s where you can go. If you have to, you can go virtual. If you want to dial a customer in, you take a video or you bring pictures back to the customer.
I remember back when I was in that realm in 2005-ish, we had the click the talk phones. We didn’t have the fancy stuff. We had little cameras that are cheap now, but they weren’t cheap back then. We’d videocam cord up in the attic and bring it back down so people could see it, or even pull a blower wheel and be like, “Your blower wheel is already out. Are you sure you don’t want me to clean this?” Then we stick it back in. These are small devices that we keep in our pockets. They are a tool that’s under-utilized.
I call it the life management device because you can run your whole life and business from that device.
We’re a living example of it. Between this iPad and the phone I had or this MacBook, we’ve run our business virtually and remotely.
It’s also a big distraction.
What do you have? We were running up on our hour here.
This goes so fast.
Josh, did I miss anything?
This was great. I think CJ is going to probably try to get us into the next event next door. For me, it was great to meet people who have paved the way industry-wide and to have programs like this that have helped us run companies more profitable and stuff like that.
He’d like to know what you guys think the future of sales is within our industry. Are we going to go virtual or are we going to go remote like a contactless sale?
Is it going online, which is something that we’ve talked about more frequently?
We use lots of programs out there and Schedule Engine. It sets us up for that virtual sales. What do you all feel is going to happen?
I am grateful that in drain cleaning, we’re not at the point. You got to go. However, even things like prices and the whole experience and stuff that I would have thought I would never do, I think you have to be open to how consumers are buying things because I’m old. I want to set up an appointment. I want to do everything. I don’t want to talk to anybody. If I’m on my phone doing it at 11:00 PM, I certainly don’t want to call. We have to be open to this, but certainly in the HVAC world, from what I understand with the Schedule Engine, in a big company on a busy day, it could help you triage calls and not go to calls that are going to be the “Turn the breaker back on,” or something like this, “I think you got to look here.”
You have to embrace the technology that’s out there for whatever aspect of it that you can. Schedule Engine does what it does and ServiceTitan does its thing. Weldon has a program called Rehash Leads. There are all kinds of tools that are out there. That’s exactly what they are in my opinion. I say, “Own your value.” When you own your value in person, that’s where you show up your strongest. You might start the call and triage it somewhat virtually. As you said, “You don’t know until you go.” I don’t know whether or not that system is adequate. I don’t know whether that chimney is safe. I don’t know about the pre-existing conditions and code compliance issues that are in that home.
That compliance is a big thing because most homeowners have no clue.
The codes have changed and their safety issues. We have a gentleman here from a Building Performance Institute, Larry Zarker is the President. He’s on our foundation board and we had our meeting a little bit earlier. He says the same thing, “You have to get into the home to see how this system performs.” If I just go ahead and sell you high-efficiency equipment online to replace your low-efficiency equipment, but I put it on a low-efficiency duct system in a low-efficiency house, you’re wasting energy more efficiently.
The duct was too small. It’s all flex ductwork and you have one inch of static pressure all the time, then all your energy efficiency has gone out the window because that blower motor eats it up.
Let me think about it this way, during the pandemic people got into the whole virtual thing as well with these virtual service calls. There’s a portion of that that can go so far. Think about even the virtual doctors. At some point, when the doctor is on the screen as you’re going back and forth and you said, “I got a pain.” “Where is it? Left side, right side?” “It’s on the right side.” “Where is it about?” “On my stomach.” “Lift your shirt, let me see what’s going on there and push right there.”
The doctor can’t feel it. The doctor doesn’t say to you at this point, “Push on it. I think you have appendicitis.” You say, “What should I do? Should I go to the hospital? Should I go to the emergency room? Should I call an ambulance? What should I do?” “Here’s what I want you to do. Go to your kitchen drawer, get the sharpest knife. Get the bottle of vodka and we’re going to take care of this right here.” You’ve got to get in person. You’ve got to lay your hands on that stuff. We don’t own our values. We’re allowing technology to co-opt our industry. I’m not saying it’s a bad thing but you got to say, “Where does the true value come from?” You’ve got to show up.
I want to add this piece to it too. On your website, in your interface with your customers, before you show up, that’s where a great video of you talking real to people. If they were to see you before you show up like, “I’m going to send over one of my technicians and here’s what we do to make sure he or she is ready to go.” If you can set the stage with technology so that you start to build that relationship before you get there, I think that’s leveraging the best of both worlds.
That is a great point. We have clients all the time, Julie mainly gets them because people don’t call me. They don’t want to talk to me. They’ll say, “What program are you using?” We had the complete bio of the service technician, a photo of them and everything. They’re like, “I want to use that for my business.” We have a lot of friends who have businesses as well who are like, “I want to use that.” I’m like, “It wouldn’t work for you but it’s a great program. Thank you for valuing that.” We get that all the time. Our guard was down because we knew the guy and we had a story. Most of our bios are really funny too. They’ll add a little sense of humor to it because it’s a stressful situation. We did it 100%.
It’s one of those things where it’s like disarmament. My whole thing with ServiceTitan was I knew I wanted to be a virtual company. I wanted to be remote and I wanted some automation built-in because we’re automation junkies. Josh and I love Zapier. One of those things was sending out that text message beforehand and that email. It now seems very normal but it wasn’t in 2018. It was not normal at that time. It’s crazy how fast technology changes.
If we’re not careful, we can allow that automation to just be like, “We have done that. We don’t have to worry about it anymore.” We don’t have to worry about building that into our culture anymore and that pre-report call. Because now they have this, we feel like we don’t have to do the pre-report call anymore. The pre-report call is massively important because that’s the call whenever they’re asking, “I’m going to stop by the gas station. Do you want me to pick you up some coffee? I’m on the way to pass by Starbucks.” Whatever the case may be, that’s how you have that voice interaction.
For us, if we did do that, we relied on technology. We don’t have to worry about the pre-report call anymore and the “Where do I park” questions and stuff like that. We could tell with our clients that were not good. We went right back to the pre-report call and it makes a massive difference in our business anyways.
I think with technology, you got to blend it with the onsite. On a marketing side, get them in a funnel, get them interested in, get them to buy the way they buy, but you still got to go onsite. You still got to look at the duct system. You still got to look at the house and make sure there are no problems. I think there’s still a way to embrace the technology and bring it full circle with the in-person visits, then you can close the sale. Honestly, there are probably things that they see these other options on Amazon like when Tersh picks out his latest podcast equipment, which is crazy.
He sees all these options but you don’t necessarily know what all these options are like UV lights, electrostatic filters, and all these other things. You go and say, “You can show them what it is after they’ve already said yes once.” They said, “Nobody else had their upfront pricing online. You guys, I trust you more. You’re in the home now. Now I can offer you some other options to keep your family safe.” Jerry Rollins said, “Virtual sales are the future in HVAC residential sales, and the future is now.”
People feel strongly both ways, but I agree based on what we said here.
You’ll get in the house but at some point, you’re going to have to make the housework. We’re going to end up pulling out flow hoods and I highly recommend that you do.
Is that part of your sales process?
[bctt tweet=”If you aspire to greatness, you can’t tolerate mediocrity.” username=””]
I recommend it because you’re taking the blood pressure of the system. It’s all theory and concept on the ductulator and tape measure. When I can tell you, “This is blowing an X amount of air and this is blowing a Y amount of air.” The customer is going, “They are the same size so they blow the same amount.” “Is this room uncomfortable?” “As a matter of fact, it is.” The technology doesn’t lie. It’s math facts, science, data. It is not opinion. Those contractors have opinions.
I love what you said there about using the flow hood. We could have a 3-ton system here that we’ve turned it way back, or the ductwork is strangling it so much, or the blower wheel is a fifteen-year-old system that never had a filter change, and the blower wheel is impacted completely, so we put in a new system and it blows your old flex duct apart. It’s a great point.
We were talking before we started here about your two businesses. You have a Neiman Marcus business and you have a Walmart business, but you can’t have both. You cannot be the same. It does not work. You can be anywhere in between on that spectrum, but what happens to those people is they also ran. They are dime a dozen. That’s everybody else who’s in the game. If you aspire to greatness, you can’t tolerate mediocrity. Therefore, I agree. If you want to go that route of going all online, I think there’s going to be that line of people that’ll go that direction. It’s already happening. There are also going to be people that are going to be boutique contractors.
Ask Ellen if she agrees with this nerd airflow discussion.
I was thinking, “I have no idea what they are talking about.” I’m just smiling sweetly.
Ellen and Dew, thank you all so much. This has been a complete honor for us. It’s been great to be able to interact with people online too.
Thank you guys because we talked about hanging out. Now, we get to hang out with you and all the cool guests that you bring. If you are looking to expand your business understanding in a short way, this is a great place to be.
Where can they learn more about each of you?
Thank you all so much for coming to the show.
If anybody has any questions, don’t hesitate to reach out to me or Josh. We’ll get you connected with everybody. With that being said, there’ll be more shows coming up. Be safe out there.
- Zoom Drain Franchise Company
- Flow Odyssey
- Benjamin Franklin
- The 7-Power Contractor
- Al Levi – past episode
- Copeland compressors
- ACCA Manual J
- Schedule Engine
- Rehash Leads
- Building Performance Institute
- Neiman Marcus
About Ellen Rohr
Ellen Rohr The Business Makeover Expert® teaches the few things that make all the difference to your business success: Easy financial cleanup, profitable pricing and powerful business planning.
Ellen is a columnist for Huffington Post, PHC News, and a contributor to many business journals and trade magazines. She provides “in the trenches” insight that business owners can relate to.
About Drew Cameron
A life and career filled with a vast amount of education on a myriad of personal and professional topics in order to strive for my potential and frame my understanding of the meaning of life and living life to the fullest while leveraging what life has to offer for it’s maximum benefit for myself, my family, my friends, and my clients.
Specialties: Personal and professional development of individuals and teams to breakthrough barriers to success and eliminate self-limiting beliefs in order to achieve desired goals, objectives, life-balance, and improved communications and relationships while living life to the fullest, being alive and realizing true happiness and your life’s potential fulfilled.