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John Wilson talks with owner Brian Sloan from TR Miller to discuss the nuances of business management and growth in HVAC and plumbing. What was the process for Brian of transitioning from a hands-on operator to a business owner mindset, learning the intricacies of multi-location management, and finding the importance of strategic partnerships? Brian shares his experiences with TR Miller’s growth trajectory, the lessons learned from slowdowns and operational challenges, and the significance of maintaining a balance between customer service, employee engagement, and financial performance.
https://ownedandoperated.saganpassport.com
Episode Hosts: 🎤
John Wilson: @TheWilsonCompanies on Twitter
Jack Carr: @TheHVACJack on Twitter
Episode Guest:
Brian Sloan: @BSloan25 on Twitter
Learn more about TR Miller HVAC and Plumbing
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Owned and Operated Episode 142 Transcript
Brian Sloan: Are you thinking like an operator? Are you thinking like a business owner?
Brian Sloan: There's no one right to way to do anything is 95 percent of small businesses fail in the first year. That's going to be a huge focus of mine in the next one to two years is I just want to find good partners. Cause my goal is hopefully they run the department and they make more money working for me than they did with some skills are learned through just experience.
John Wilson: If you need help. with your overseas hiring let me tell you about my friends at Sagan. For years we have been hiring overseas team members in our call center, accounting, and marketing. We've typically run this discipline ourselves but the more we hire the more complicated it's gotten as we started to add deeper expertise hires like hires in accounting in AP and AR.
John Wilson: So we called up my friends at Sagan and we said hey here's what we're looking for how do you guys think you can help us and they were awesome. The thing that I like about their model is It is a monthly retainer instead of this giant 30 to 50% of the first year salary of whoever that person is that they hire.
John Wilson: So it's this monthly charge. They hire X amount of candidates a year, and it's been really good. We just hired our first two couple weeks ago and they've already been awesome. They're jumped into the accounting department. Check out Sagan Go, which is S-A-G-A-N go.com. Welcome back to Owned and Operated.
John Wilson: Today I have my good friend Brian Sloan with me from TR Miller. Welcome to the show. Thanks for having me. Yeah, it's been great connecting with you over the last month or two. I met Brian on LinkedIn and I almost, I haven't quite yet, but I've almost, Taken back every terrible thing I've said about LinkedIn over the past decade.
John Wilson: I've just started talking there more and I get to meet like amazing people like yourself and it has been a lot of fun. I hate how much fun I've had on LinkedIn.
Brian Sloan: Yeah, it's, and you learn so much too. So even like Axe Twitter, I've been following Chris Hoffman a lot on Axe and just the content you can get.
John Wilson: Twitter. Yeah,
Brian Sloan: his stuff.
John Wilson: Yeah. Yeah. I'm just a grade A bullshitter on Twitter. It's just a lot of people happen to follow, Yeah. All right. We're we're talking about TR Miller today. You guys run an awesome shop out in Chicago I can't wait to go head to head with you one day. I think that'll be fun Maybe I'll launch a pop up in Chicago just so we can Tussle, but how about you tell me a little bit about how you got into the business and give me some origin here on TR Miller.
John Wilson: It's crazy to believe I was sharing
Brian Sloan: this with someone the other day is I've almost been in the industry for 20 years already, which is crazy to even think about. So given that
John Wilson: you're 22,
Brian Sloan: that can't possibly be right. It might even be longer. Um, yeah it's been interesting.
Brian Sloan: It's been a journey. I was going to community college locally here in 2008. My dad had the opportunity. Even my great grandpa and grandpa were in the trades. And some, they were more on wholesale. But my dad had the opportunity to start T. R. Miller. 2008, housing market just crashed.
Brian Sloan: The gentleman he was working for decided he wanted to exit. It was new construction, housing market crash, bunch of GCs owed him money. Said, you know what? I'm 65 years old. I think it's just best that I retire and ask my dad if he'd like to buy his phone numbers and some trucks. So my dad asked he's Hey, you want to come with me on this journey?
Brian Sloan: And I really didn't know what I wanted to do. I was going to school for math. I just love math and didn't know what I wanted to do with it. So I joined my dad. I had a team of 10. That was 2008 ish. Started off just sweeping floors, sweeping floor, math guy trying to get into trades sweeping floors doing new construction.
Brian Sloan: And over the next six years went from, new construction, hanging ductwork to fabricating to residential install to service and commercial installs and just did it all. Like any good family business, mom was in the business, brother was in the business. Four of us out of the 10, the 12 team members we had around 2014, 2015 became a lifestyle business and still had around 12 people.
Brian Sloan: We didn't really have experienced any growth. We just maintained what we had. My mom exited the business. And my dad just wanted to go to, they were burnt out. The stress just burnt them out. And my dad just wanted to do sales from, nine to three, run a couple of sales calls each day and mom sent them out of here.
Brian Sloan: And so just left the company. It's me and my brother's hands and at this time, I, I finished going to night school, got my degree in accounting and business and then was going down to get my bachelor's. So I started digging the financials and I'm like now I see why. The, what the business has become, expenses have gone up and revenue has gone down.
Brian Sloan: Actually, it went down over that period of time. And so was it
John Wilson: because the cash was being ripped out or we weren't watching as close or what was the,
Brian Sloan: yeah, I think a couple of things is sometimes you get bad accounting advice from accountants and if you never owned a business and You're doing pretty good.
Brian Sloan: They were two and a half million, which is good size family, family business probably making after payroll and everything, a hundred grand on the bottom line. So accountants will say, Hey, like you're now, 35, 40 grand to the IRS unless you buy some trucks or spend some of this money on, on, on assets.
Brian Sloan: And so they did that. They went on they bought some nice personal vehicles they, they remodeled some things. And. I was just using the cash to help support their lifestyle based on some account bad accounting advice I think that they got so so that was a big contributing factor.
Brian Sloan: Also, I don't know if this is true for all everyone but sometimes when you're the owner having like Accountability self accountability is sometimes challenging. I think very challenging
John Wilson: Yeah, very, because it, because who, most people own because they don't want a boss, so then it's hard to whip, whip yourself into shape.
Brian Sloan: I think that's actually an interesting conversation, because it's true, right? Let's say I'm a service tech, and I don't like my boss because he's holding me accountable to certain metrics. And so then I go down to open up my own business and what I realized is you have to be more accountable to performance than you were before you opened up your own business.
Brian Sloan: Like you have to make sure you stay disciplined waking up every morning and digging into the numbers and not only holding yourself accountable, but you got to hold others accountable now. And I think there's a lot to be discussed in that.
John Wilson: Yeah, there is. There was a Facebook. I, I don't remember, I don't think it was our Facebook group.
John Wilson: I think it was like Tommy Mello's, but there was a Facebook like post in one of these groups and someone was like, yeah, I'm thinking about going out on my own. And then they gave like the why, and I'm like, dude, you are going to fail. Like I responded you're going to fail. Like the reasons that you're wanting to go out is you are a bad performer.
John Wilson: Like the best thing you could do is go get a job because you will fail if you go out on your own because if you're a bad performer, like now you're going to be so much worse when everything is on your shoulders. I don't know, like that's not the path.
Brian Sloan: Yeah. Cause you think about the additional, right?
Brian Sloan: And that's why maybe my parents got burnt out, in hindsight is, there's a real toll on you to be able to perform, the stress of. You have the stress of not only performing for yourself, but to keep the installers busy. And then you have obligations to any bank debt that you might have.
Brian Sloan: And then you got all the taxes on top of that. It's there, there's a lot of responsibility that comes with it that just, Yeah. You're not exposed to it and no fault to them. They're just, they just, it's lack of knowledge. Sometimes it's just a gap of knowledge, maybe.
John Wilson: But I agree. I think there's, I think there's a lot.
John Wilson: I think there's a lot there and people just don't get it. So
Brian Sloan: going on. Yeah. 2015, 2014 started to get more involved in I would say at that point I was wearing like the general manager or president hat really operating and managing the business meeting with legal and accounting and making sure day to day operations are going smooth.
Brian Sloan: First, step one was, we just came off a year where we lost money as I got in there in 2015 as my mom exited and my dad, we just kept. Rolled off of money or a year on the P& L with a loss and kind of forecasting a loss in 2015. And so step one was, how can we reduce our expenses, right?
Brian Sloan: And how can we drive sales? That was my, my, my goal, drive more sales And reduce expenses. So meeting with everyone from telephone vendors to garbage vendors, to direct cost vendors, with manufacturers and distribution, and how can I get product at a lower cost? And really the best time to drive sales is in the summer.
Brian Sloan: And so, God bless some of our team members where, what was nice coming through and work in every position is the respect you get from those team members is, you weren't just, you weren't It's just someone that, just all of a sudden became my boss. Like I had to earn that respect and earn that.
Brian Sloan: And so it was like, Hey guys, I really, we got to drive some sales this summer. And so they stepped up big time. Our team stepped up. So it was, they would do a furnace and air conditioner install, finish that and go do another AC install really in these peak months to drive top line revenue.
Brian Sloan: So that really got us, I think we finished that year at 30% growth. So really just, we reduced our costs. So like we had a, just a fantastic year, double digit profit that year margin was incredibly healthy. I think we were like 48 percent for really not knowing what that we were, that's an area we should be focused on.
Brian Sloan: So then we continue to grow joined Nexstar in 2017 they helped with some that our service process they help with financial, some financial, like making sure our GL accounts and our P& Ls were set up correctly, so our general ledgers and profit and loss statements. Continue to grow.
Brian Sloan: From 2016 to 2023, we grew anywhere between, I think, 30 percent of growth was a bad year for us. We grew 40 to, I think one of our best years was like 70 percent growth year over year for seven or eight years. In wrapped up last year, I think just shy of 25 million. It's where we wrapped up last year at.
Brian Sloan: So learned a lot of lessons the hard way and also alert. There's great people in our industry that are open, the don't buy into their shop and say, Hey, what would you like to learn more about? So super thankful
John Wilson: for those guys as well. Yeah, I was talking to someone about that's come up a few times recently.
John Wilson: Like our industry is so unique. And I think On one hand, you could say it's because we're all regionally focused. So it doesn't really matter if other people if if I site visit you, which like, you've welcomed one of my team members tomorrow, which I'm so grateful for, but we don't compete.
John Wilson: So it's I'm not negatively impacted, but it's also like time out of your day and it's time out of your team's day. And I think it's so unique in our industry that you can just do that. I was in Dallas a few weeks ago and I just sent a couple of messages and multiple companies were just like, yeah, sure.
John Wilson: Come on. We'll open up everything you want to see. And I'm like, this is crazy. And I really one I'm grateful, but two I was explaining this to someone the other day and they're like, that's the weirdest thing I've ever heard. And I'm like, industry, dude, I don't know what to tell you. Like we are all like this.
John Wilson: We'll just all open up the door.
Brian Sloan: And I think a lot of that credit goes to some of the early giants. And yeah, I would say, like I would, names that come off hand, like I think that are super welcoming is it probably starts a lot with to my knowledge, Jack Tester, Jamie D Domenico, Leland Smith, Dave Geiger, like all these giants who have been so welcoming and sharing information.
Brian Sloan: Over such a long period of time it's became in our DNA and our industry. So yeah, I think that's where a lot of that started from.
John Wilson: We have people in Chicago this week. You and I were talking about this before, but we have people in Chicago this week and yeah, Brandon's going to come visit you, which is amazing.
John Wilson: And Brandon's going to visit our usual friend Lucas. And it's this is great. This is amazing. And then, and you just get these. You get to see under the hood. Which is just so impactful. Because then you go home and get to change stuff.
Brian Sloan: Yeah. Yeah, and I know one of the things as he visits our shop is he's just curious on, how do I know you have a lot of experience as well with multiple locations and stuff like, as we continue to grow is, what stays centralized, what gets decentralized at the local level.
Brian Sloan: And just sharing, because I'm sure I'll learn a ton of stuff from him as well. So just how open everything is.
John Wilson: How about you walk us through I, the last two years, you've gone multi location. That was a big transition. You just clipped your first 3 million a month. You've got some big stuff cooking.
John Wilson: So how about you explain just what's multi location been like, why multi location? I, that's something that we've been really interested in.
Brian Sloan: 2022, I think we grew from let's say 16 million to 23 million. 2022, so I had, 7 million of growth in one year. So as we were going into 2023 and we have this history of growing 40s.
Brian Sloan: 50 60 percent year over year going into 2023, we knew we were just out of space in our current location. So we were only single location in 2022 and we grew up, we ran out of space. There's nowhere to park. We're in an industrial parks. We're parking at all our neighbors. We got roads, vehicles on the road offices, me and my brother sharing offices.
Brian Sloan: We're starting to have a lot of people share offices, share workspace. People are doing one on ones in the mechanical closet room. So we're just like out of space. And so we're like, all right, is we're in the we're planning all of this in 2022. It's like, all right, in 2023 we're going to have, we're going to move our office off site.
Brian Sloan: And we're going to open up a second location to better serve the Southern part of the Chicago market. So we're going to go from one, one location to three locations in 2023. What we didn't anticipate was a slowdown in both The global economy and in here in North America with GDP. And we didn't predict the slow down in just nationally in our industry.
Brian Sloan: With a reduction in equipment sales, we 2023 starts we move into a second location second operating branch in Southern Chicago. Yeah, we opened up a central shared office space, which we moved our call center, finance, marketing and a few other positions what we realized through 2023 is each month.
Brian Sloan: Each month since pretty much the beginning of the year, we started having slippage on budget and we started missing budget, but we're still, like we're still invested in proceeding forward as we go through 2023, we bring on like a, 10 technicians and our HVAC next tech program. We bring on some plumbing staff. We bring on the supports admin and support staff to support the forecasted revenue. And as we, we keep missing budget through June at this point of 2023, we still have all this overhead budget or expense and direct expense. We just have all this. Infrastructure to support growth, we're forecasted for 33 million, I think 32 million.
Brian Sloan: And as we continue to this budget at some point in July, it's at what point do we pivot? And we made the decision to proceed forward, cause it we're blessed. One, one thing we're blessed about in our, in the Chicago market is we get two peak seasons. It's a curse and a blessing.
Brian Sloan: So you get your first peak around like May, June, July. August is always a slow down, beginning of September slow down, and then it peaks again like October, November, December, January. And so we're like let's see how Q3 and Q4 go. And held on to all the infrastructure support.
Brian Sloan: So things like, dispatch teams and call center, no reductions there, warehouse, all the things to support a 33 million revenue target, and then also the technicians. And missed on. September, October and then finally decided that, there was some tough choices that were gonna have to be made over the next three to five months.
Brian Sloan: And what was nice though, is, one, one nice thing is, 2024 is a new year. So I'm not getting stuck in, in, in what happened in 2023, but all right, what do we learn in 2023 that will help for, make us, better operators, better business owners. And how can we rebound in 2024?
John Wilson: Can you walk me through like the second location itself? What did startup look like? How did you drive the first leads? How did that work? Yeah.
Brian Sloan: So as we went into that market, we looked at what our new customer acquisition costs were going to be. Like, what is each lead going to cost? And you already
John Wilson: serviced that market a little bit.
John Wilson: Like you already had some percentage of revenue there.
Brian Sloan: Yeah, we had some percentage of revenue. I think we had about 800, 000 of revenue in those zip codes. The goal was to, the original goal was to drive it to three million in year one, and then five million in year two. And what kind of marketing expense or marketing resources are going to be needed for that?
Brian Sloan: Who's going to operate it? The questions at the time was, are you going to do someone internal that's part of your operation, current operations team, or are you going to bring someone in from outside to run that location? Other things we were thinking about at the time is, what kind of space are we looking for? And also the question is do technicians on, our current location, are they, are we going to allow transferring, in the first year? Or what does that look like? What does support look like for that? So those were some of the early on questions with that location.
John Wilson: How did it, like you said, first year three, second year five, like how did you pace against that?
Brian Sloan: Yeah, it ended up first year two second year is like going to probably be around three, three
John Wilson: and a half. It still feels good. I feel, and what do you think the big, that's what you thought the challenges were going to be. What did the challenges end up being?
Brian Sloan: It's still something we're working through. This is new for us. So we, we didn't, one, we had to learn the skillset in the experience. Like some skills are learned through just experience. So I did, I'd say the things we're still learning is what processes make sense for our larger brand operating branch, which we'll do. 25, 27 million this year.
Brian Sloan: And then what processes make sense for a two because they're different processes that work for our larger 25, 27 million branch aren't going to be the same processes that work for a smaller 3 million branch. So that's something we're still working through, like not having selling techs and having comfort consultants.
Brian Sloan: Is it, is a proven model or proven process? For our larger location. But the question mark we have is it a proven process or a smaller branch of maybe three, three HVAC techs? Or is there something where a threshold where you need five or six service techs to support one consultant, like just working through.
Brian Sloan: Those like process changes. Other things we're thinking about is, like a larger branch, you have dedicated like warehouse people or dedicated dispatchers in the smaller location. You still need one person wearing multiple hats. This one person, Thankfully, she's amazing.
Brian Sloan: Katie, she's a dispatcher part time, she's a warehouse person part time, office manager part time. And so just certainly, identifying what processes, when to incorporate processes at what we, I guess is one of the things we're still working through. Yeah. One of the, one of the cool things that have come out of it is I would say last year we would have our smaller location run some of our larger location recalls.
Brian Sloan: We're this year at switch and so just the sharing of resources and technicians where hey, I have too many calls in the southern market Is there a chance you can send some technicians down to help cover these calls? Instead of rescheduling them or pushing them to the next day. We're able to be just more flexible With technician resources like that.
John Wilson: You've gone to two so you'll probably do more Yeah What do you think that looks like?
Brian Sloan: I think our current thought process is, let's shore up what we're already doing. So I think business units start to mature around like 3 million in revenue. And that's just my personal opinion. I'm sure people could argue it.
Brian Sloan: So I want two business units we're currently working on is our smaller location that I'm considering that one single business unit. So let's get our smaller location to 3 million. And then let's start to get those. Business those like HVAC business unit or plumbing business unit inside that location to 3 million.
Brian Sloan: And then in our larger location, we're working on getting our sewer. We do sewer excavating and sewer lining. Let's get that to 3 million. We plan on adding electrical. In the next six to 12 months, we'll be adding electrical as a line of service, and then hopefully by the end of 2025, we'll add a third operating location.
Brian Sloan: So for total location.
John Wilson: So we, we ran multi location and I've told you this, but we ran a multi location for a while, a little bit of a different game because we like bought these businesses and then we just kept their locations and then they basically ran their. for two to two and a half years each until we shut down those locations.
John Wilson: And each one was, like two million dollars to four. Obviously a lot of the same challenges, like leadership is a real challenge, process is a real challenge, multiple warehouses. It's all just like complicated and unnecessarily complicated. So we ended up consolidating. And when we think about Going multi location again, which we're thinking about the next like 12 to 24 months, the perspective is different cause we've done it.
John Wilson: So we feel like we got punched in the face a lot. I think like how I think about it is different. So I'm now thinking about that comfort advisor challenge. You just brought up a minute ago and Gettle runs a remote closing process. And when I think about why, I think half of the reason is this, I have a better way to describe this.
John Wilson: We hired somebody once a couple of years ago. And they were in the pet containment space and the pet containment space. It's dog collars and fences for your yard. They manufactured the product and they owned their distribution by launching locations where they put a dog trainer and like installers that would install this 3, 000 average ticket service in people's yards, the way that they thought about growth was just through Oh, I'm going to add another distributing location, which is like.
John Wilson: Basically for us, just the location in general. So they have the benefit of the upstream, whereas we don't. But I think that we're looking at multi location similarly, where how do we create almost like a chain of distribution? Throughout wherever we want to be and like, what's the minimum viable resources that we can put into that location and then support them from somewhere else, like Gettles remote closing sales process, like if you don't need a salesperson there and you can just close over the phone.
John Wilson: Like, why not do it? So you're spending a ton of money on marketing and you don't know if it's working. So my friends over at Service Scalers, they're dropping this special promo for a 99 digital marketing audit. So that's going to cover your PPC, your SEO, your LSA, and what they do is they just open the hood and they take a look.
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Brian Sloan: Yeah. Bye. I think it makes a lot of sense. This can be very generalized, but we can jump into like specifics.
Brian Sloan: It's I think a lot of processes that we have today get us to a certain level. But as we, as you scale, as you have to refine those processes. And it works at, Two and a half million in revenue or it won't work at 25 million. So there's just scalability. I think ghetto has cracked that specific, using that as the specific example is like they have cracked.
Brian Sloan: How can we scale with high? Because really it's about Benchmarking and performances. Like they know that they can easily scale. Like one of the challenges we have with the two different locations, I'll tie it back to the ghettos different close rates and different average sales is our close rates and average sales might be different at location one than location two.
Brian Sloan: Where by using that process is it allows that scalability where I'm sure the average sale and close rate aren't that fall off no matter where the location is. And so it's about, one, always getting better and creating consistency and like what scales and what doesn't. That's one thing I've really learned to appreciate lately.
Brian Sloan: And I probably, when we were growing so fast, it's probably something we just blew over that we're going back to fix today is like one of the mistakes I made early on was in call center is we were probably like 5 million, let's call it two and a half, somewhere in there. Is when you're smaller, you have to wear all these hats.
Brian Sloan: And I decided it was time to hire a call center manager, went to market, hired a call center manager on board of them. Not probably great. We didn't have a lot of like performance metrics in that area. And I said, here's the keys to the car, pretty much don't wreck it, no, did not show them how to drive the car, like best practices, resources, here's how to fuel the car up.
Brian Sloan: I just said. Here's the keys, you have call center manager experience and I expect you to do better than I did. And that was probably really the onboarding. And I quickly learned that things that were important to us as a company that wasn't, there was no tribal knowledge or any type of institutional knowledge transferred when doing it that way.
Brian Sloan: And so things like one on ones or weekly team trainings or meetings. Like a lot of that stuff was lost because it just wasn't as important to them, but I knew it was important to drive at least the current success we have. And so many times I would hire a manager and say, here's the keys to the car.
Brian Sloan: And they always want to come in, every manager, I shouldn't say every, I think that's very broad, but a lot of times managers want to come in and give it, put their fingerprint on it. They want to come in and do it their way, which what I've realized to, over the years is, in the first six months, share our way of doing it as a manager is, if you do it this way, with this call script you should have these type of predictable results.
Brian Sloan: Like I should be able to have this book rate, I should have this abandon rate. But I didn't have any of that, like that benchmarking. And so when they come in and say, Hey, I want to do it this way. It's cool, let me know if it's successful. But I should have said, here's our way to do it. Here's the result we can expect by doing it my way.
Brian Sloan: And then after six months let's try, let's do some testing and test it your way and see if we get a better result. Like I'm okay with them putting their fingerprint on it. But it should be at least get us a better result than what we're currently getting. And so I think, using that, tying it back to that ghetto thing is I think it's awesome to continue to try things to get a better result.
Brian Sloan: And obviously they got to a point and I'd have to imagine I could be wrong. I respect Ken So much. I think what he's done is incredible. It's, every operator like me, you're it's what we strive for. It's our goal. And he's, he, he cracked it like by doing it this way, I can get a better result.
Brian Sloan: It's like anything, just continue to try to get a better, try things and try to get a better result. And so I don't, I threw a lot out there. But that's how I've been thinking about things. It's let's try things differently, but I should expect a better result than what I'm getting today.
Brian Sloan: If I'm getting a worse result, let's go back to the way we were doing it.
John Wilson: How do you think about the experimentation phase?
Brian Sloan: Yeah, I think you should do A B testing. We've done things where it's we just go hard right at it. Where maybe we're not like doing it like shooting a bullet instead of we're shooting a grenade.
Brian Sloan: Yeah. But where it allows, we try to shoot a small bullet before we shoot a lot of, a large cannon or a lot of resources at something. But sometimes we just know if this is the direction we're going to go, we have to go all in and be ready to pivot right back out. That's how I think about it.
Brian Sloan: Things like call scripting you can do. You, at the end of the day is I'll use continuous call, call center, call scripting is like, here is, the call script to use, and we can expect a, a raw number. So 25 percent book rate of all calls by using this call script.
Brian Sloan: But you can start to make it your own and I encourage you to make it your own, but it hopefully gets a 27, 28, 29%. But if, if you're starting to dip in below 25%, we're going to go back to my way because I know it's going to give me this type of result. Yeah, like one thing, I think a decision we made is it's still early on to know if it's going to work or not, but we decided to bring digital marketing in house.
Brian Sloan: And that was one of those things where, Do you test it? Do you not test it? What do you do with it? And as we went into it we did a lot of pre work prep work. Like we did, three to six months of prep work on what it's going to take. We talked with a lot of different companies, but at one point we said, all right, we're going to bring PPC for sure in house.
Brian Sloan: What do we want to do with SEO? And other avenues. And we said, if we're going to jump, we got to jump all in. We just got to be 100 percent committed to go all in expecting a better result. That was one of my, my like I just wasn't gonna, I did not want to go all in on something and have a worse result.
Brian Sloan: So I said, we just got to expect a better result and we got to be ready to pivot if we're not getting a better result. And I also asked, what's one thing I also think about is what is our risk, and what's our risk tolerance is like, what's the worst thing that could happen?
Brian Sloan: It is a palatable are we worth, is it worth taking that risk, and what's the upside, is it worth taking that risk as well.
John Wilson: What does the team look like now in marketing? What disciplines are in house versus outsourced?
Brian Sloan: Yeah, in house we have a full time marketing manager in house.
Brian Sloan: We have social and community in house. And then we have fractional roles for like our, and I know a little bit but if there's anyone digital listening, they're going to probably correct me. We have a content writer that that's outsourced. We have a SEO optimization person outsourced. We have the PPC person outsourced. And I think most of them are working between 10 and 20 hours per week on our account. Like on us. But we're, it's a contractual, fractional type role. Can you explain the social and community? So my advice I got from another contractor, they'll do about a hundred million greatly respect the gentleman who shared the information with me.
Brian Sloan: I think he's one of the best marketers are in our industry. He shared with me that's what they had. And he said that, as you look to grow your marketing team, here's maybe some steps that I would. Yeah. And step two was a social slash community outreach person. So they do, obviously social that's the layout, but the community side of it is we try to do about 26 community events per year.
Brian Sloan: Yep. Everything from chambers of commerce events to park district events, anything in the community related, and they're the point of contact. And so we allocate. Here's your dollars for the community and they managed the budget for that role.
John Wilson: We ended up going the opposite, not the opposite direction, but like down the same vein, but the thing that we missed was the social side of it.
John Wilson: Where, so we launched this like in person event team and the idea was moat. And this is just, it's hard to do in person marketing. So that's a moat. What we've missed. We're trying to catch up on is like Okay, now we do it, but now we need to talk about it a lot more. Like we mish the social component.
John Wilson: So we got like the lift, and I would say that we did the hard part. It's just now we need to talk about it more. Which is funny. But that team is going from five people to nine people. Right now, like it's a big it's mostly something
Brian Sloan: I was picking. Yeah. It's something I was picking your brain on.
John Wilson: Yeah. It's yeah. So like that team for the listeners it's events. So we do three to four events a week and then we do door to door canvassing all through that same team. And most of the team is part time. There's two full time, the manager's full time and one of the canvassers like the lead canvassers full time.
John Wilson: It has been a fun. It has been like fun, what I want, and I, you have a better perspective on this than I do, which I appreciate, like I went into it from a, we're going to drive leads, which we did, but I think you've come at it from we're going to engage the community, probably also drive leads, but like you had a healthier perspective than I did, and which I appreciate the challenge, but that has been cool.
John Wilson: Like we did an event last week and it was like a neighborhood, like porch. Porch rock event. Like we set up our booth and people would drive by chanting our they would drive by yelling our jingle out the window. And and I was like, first off million dollars well spent and second that's fun.
John Wilson: Like that's, it's just an interesting way to engage with the community, like totally differently than anybody else we've met. We compete with
Brian Sloan: and what's interesting, John is meaning you share this when we first met is we always mean you've seemed to always get to the same spot. Just taking different routes to get there. Yeah, it is. And I think that the message there is there's no one right way to do anything. Yeah,
John Wilson: I think. And we have that with we have that with a friendly. So we have a competitor here that we have a lot of respect for. They're like we're genuinely grateful to compete with them because they make us better.
John Wilson: They're, I think, just a hair smaller than us. But they push us, which is good. And it's the same thing where they will they will execute on something. And we were iterating on what or like we'll execute on something and then we know that they were working on it and it is just it's funny how, yeah, we all end up in the same spot.
John Wilson: They're not doing events the way we're doing it, but they are doing events. And in a way that like, we wish we were doing it. But they probably wish they were doing it our way. And we'll probably all end up in the same spot, but it is yeah it's funny. We all end up on a spot. Yeah.
John Wilson: So how are you thinking about introducing a new trade?
Brian Sloan: Yeah. Electric, probably similar to the way we did. So plumbing, we greenfielded. Yeah. It's, we told ourselves, so we never done, and it's both a positive and a negative, we'd never done an acquisition for anything. And it's something we. So we've always done organic.
Brian Sloan: But it's something we told ourselves. Organic is very painful. I'm sure acquisitions are also as equally painful, maybe different types of pain. Yeah.
John Wilson: Yeah. We all tell ourselves that the other side has it better . Yeah. We're not acquire .
Brian Sloan: Yeah. We're like, we're gonna acquire electrical. And now we're like, all right.
Brian Sloan: Dang it. We're gonna greenfield. I think we're gonna greenfield it again. There's just not that many electrical companies out there. Yeah. So how we did plumbing originally is we. We really targeted, we, we brought out one or two licensed professionals. So we purchased the experience and then we said, how can we, keep them busy?
Brian Sloan: How can we drive calls? The most, the most affordable way to drive calls is through your existing customers and more specifically your membership customers. So we really the way we did plumbing is we called all of our plumbing memberships or our, I'm sorry, our heating, cooling memberships and said, Hey we now offer plumbing.
Brian Sloan: A lot of our members have been asking for it, when their water heater breaks we now have it. And so if you need anything, give us a call and, or if you're interested we can come out and do a free inspection, make sure, your water is not going to fail on your sump ejector. And so we really just targeted our membership members and and then when you slowly start to integrate like website SEO, slowly integrated it on our branding.
Brian Sloan: So updating wraps on trucks is slowly did it. And then once we felt we had a good base, we really started to turn it up. So we would, start to invest in things that are more expensive, like PPC, LSA. Things that just have more of a cost to it than maybe a phone call to a customer or a postcard in the mail.
Brian Sloan: So that's how we're thinking about electrical is, really just, getting one or two experienced individuals on the team and start to work with them on building a price book. Start to work with our marketing team on getting the brand updated, work with our call center on getting outbound calls to our VIP members, just no, Hey, we have it.
Brian Sloan: If you need it, give us a call. One of the, in, in now our plumbing team, we probably have close to 20 team members on that team. And we started it in 2020. So I have had a lot of great.
John Wilson: Yeah. That's a lot.
Brian Sloan: Yeah. I had a lot of great growth on that and super happy with it. I should have been a plumber.
Brian Sloan: I told myself, John,
John Wilson: yeah. Plumbing it it's good and bad, but we love it. Cause it's like very stable and it just like up and to the right. And it's just, machines, gross margin, whereas like we're plumbers launching HVAC, not even launching. We're, bigger now, but like HVAC is a tough nut for us to crack.
Brian Sloan: HVAC is tough. Yeah. It's you got to deal with seasonality six months of the year. Stacking
John Wilson: and purchasing is totally different. Like the way you think about like these vendor deals, like you, you don't do that with plumbing. You just go buy the water heater. You're not negotiating 3 million like vendor agreements with yeah, it's just a totally different game.
Brian Sloan: Yeah. Yeah. And that's how we're thinking about electrical. We're going to, we're thinking about greenfielding it. We, but we were originally going to do an acquisition which we're still open to like in, when I say that, like we want to partner with someone I want, I would love for in any of our business, like heating, cooling, plumbing, electrical, for someone to say Brian, I love doing electrical.
Brian Sloan: Like I love it. It's my passion. And I just need someone to help me with the office side of things. Like I don't like answering the phone when a customer calls, I just want to run out and do the job. So really, I want to find that's going to be a huge focus of mine in the next one to two years is I just want to find good partners.
Brian Sloan: Cause my goal is hopefully they, they run the department and they make more money working for me than they did. Cause Some people, that's something I realized. So I mentor some companies too. And what I've realized is that going back to how we opened up for the technician that would decide to go into business for themselves, this, the sad part about that journey is more often, I think there's a statistic out there.
Brian Sloan: 95 percent of small businesses fail in the first year. So it's something like crazy like that. Or in the first three years or two years, is that what happens and it's sad is They end up paying themselves less than they were making prior to leaving, and they get wrapped up in all this debt.
Brian Sloan: And it really is a sad story, so I would love to partner with someone that's Hey, partner You, I want you to focus, Brian, to focus on the business side and I want to just focus on going out there and making sure we're providing the best electrical service. Hopefully that falls in my lap.
Brian Sloan: That might be like the unicorn out there but I'd love for something like that.
John Wilson: Yeah. Do you, how much of your role right now do you think is identifying like that key partner or like that next opportunity? You're like, how much of your time gets spent that way? Not enough. To be honest with you. Yeah, I was having a conversation yesterday with a friend of mine, and we were talking about same thing like that's what my role should be and like how you act, what actually happens is can often be a different story.
John Wilson: And but I think like that specific problem and I've referenced this book like so many times, but it's been helpful, but like every time we have a problem. Like our brains are naturally wired to let's go attack this problem and solve it. And the issue with that is it usually doesn't scale beyond that.
John Wilson: And you're not building a new competency. You're not like building a team. You like that problem will crop up again because we're busy people. And so really focusing on who can solve that problem and then maintain that. Continue to solve that problem has been, I'm trying to get it to take up more of my time because as I see these problems, they drive you nuts when they're happening.
John Wilson: And then if whenever I like actually am able to take a step back mentally and Oh, I just need to hire someone that already knows all the answers. Or I need to go hire this unicorn electric person. And that's gonna take a lot of my time. And that's the solution. We've gotten further. But it's hard to you know this.
John Wilson: You go from one fire to the next. And it's hard to take that step and be like, Ah, I really need to be doing this thing. Which would advance. faster, further.
Brian Sloan: When you asked me that question, what I was thinking is I'm probably not only wearing like the president role, but like our COO hat. When we were seeing the location, it's common that you have a general, it's very common that you have like president and then you'll have an operations or general manager underneath you. And that's been a challenge too, is we went to multiple. The three locate, two low operating locations and a central is now I'm the glue in between those two.
Brian Sloan: And so it just got pulled back down in the operations, not wearing that, that president hat as much as maybe I should be, which should be, who is that where, it's like recruiting when people, say, Hey, I, I can't find good technicians out here for me. I, Hey, I can't find an acquisition.
Brian Sloan: It's what are you doing? Where are you doing with your time to find that? There's plenty of great technicians out there, but when we were smaller, I literally had to, when I was in charge of recruiting, I would put four hours on my calendar a week and say, all right, I'm going to, I'm going to go, comb through indeed.
Brian Sloan: I'm going to send out phone interview requests and schedule face to face. And I found good technicians and now we have a full time recruiting team where that's all they do is I'm sure it's like anything, there's plenty of partners I would love to partner with us. But I think the question is what am I doing to find those partners?
Brian Sloan: It's there's great technicians out there.
John Wilson: It is hard to know, like what's next. So Hey, as a leader, like on one hand there's guides and next star and peers and those are like helpful guardrails, but There's not really like a book that's, or like a map on Hey, here's exactly what you should be doing next.
John Wilson: Like step by step, like you got to figure it out and you have to figure it out day by day. And I think that like transitioning, like the thing that you just said of Oh, okay, I'm now I'm in this seat that I'm probably shouldn't be in. Because it's taking away from these things that I should be doing next and thinking about next.
John Wilson: What's yeah, it's hard to recognize it. And it's hard to know what the right thing is. Answer is one thing that
Brian Sloan: I have a better appreciation for and again, I have a ton of respect for Ken Goodrich over at ghetto and I sat on a podcast with him and when he said it I didn't understand what he was saying But that's why he's way smarter than I am is he said it was something along the lines of are you thinking like an operator?
Brian Sloan: Are you thinking like a business owner? Yeah. And I didn't know the difference between the two at the time. And what I've come to appreciate is I'm a good operator, but what I'm repositioning myself to is being a good business owner. And what I mean by that is like my job as a business owner and a shareholder is to maximize.
Brian Sloan: Our stake, maximize our stakeholders, which I ended up being one of those as well. It was like, am I driving more net profit or operating for our stakeholders? Because I happen to sit in, those seats. And so that's really how I'm thinking about things is are these decisions I'm making as president driving revenue or driving profits for our stakeholders is how I'm starting to think about things and making sure the decisions I.
Brian Sloan: Make a line with also the best decisions for our stakeholders are our team members and our customers. Like those are our stakeholders. It's our customers, our teams and the owners. And sometimes you make decisions that better serve for us. It was a lot of times our customers or our team members, but really as president is I have to have all three, three interests align.
Brian Sloan: And so even as we think about next year is making decisions to drive. More net profit so that our price, this whole thing, price per unit, price per share like making sure that's increasing by 20%, but also making sure that we're providing great customer service. So this year for us was a gross profit years.
Brian Sloan: That was our annual initiative this year was how could we get to a, how could we drive five points on our gross profit? How could we increase our employee retention? Where next year it's going to be how can we grow two more points on gross profit, but more importantly is how can we provide a better service to our customers is really going to be our giant focus next year is just, doing either NPS surveys surveying our customers, driving more Google reviews, but really putting the customer first and the technician first for next year.
Brian Sloan: So I went on this long tangent of what I'm thinking about, but that's how I'm thinking about what the next step is. That was
John Wilson: going to be the question. Was like how are you thinking about what's next? And then, yeah.
Brian Sloan: Because I think there's four quadrances. You have, I can make decisions that impact my P& L.
Brian Sloan: I can make decisions that impact my balance sheet. I can make decisions that impact employee engagement, right? I can make a decision that impacts customer engagement. And sometimes you make a decision where it maybe benefits one of those four pillars more than the other. But like, all right, what pillar of those four do I need to focus on next?
Brian Sloan: And we're thinking about really like our employee or just our people pillar is like how can we provide great customer service, get better at it but also provide a better service to our team members because this year, we had to get, we had to rebalance our budget. We had to increase our gross profit.
Brian Sloan: I think our gross profit is up 32 percent in dollars from a year prior. We went from a 40, 43 percent gross profit to a 48 percent gross profit and really figure out the revenue. So we're up, I think 15 or 20 percent year to date as well. So really just focused on my, as my finance guy says, it's like when you're on the plane, you got to put your oxygen mask on first before you use like water.
Brian Sloan: So like really this year was like let's focus on our financials and next year we're thinking about our people.
John Wilson: This was great, man. I appreciate the deep dive. I appreciate the conversation. If anybody wants to reach out and connect with you, where can they find you?
Brian Sloan: Yeah.
John Wilson: LinkedIn
Brian Sloan: is always a solid choice.
Brian Sloan: But if not linked in I always tell people to text me my, my cell is 815 830 0113. And let me know if you are. So one thing I've become passionate about is if it's another contractor is a hundred percent response immediately linked in and acceptance right away. But if I think they're trying to just sell me something it's usually a low conversion rate for them.
Brian Sloan: Like zero, if someone's trying to sell me something,
John Wilson: awesome. Thanks for coming on today. If you like what you heard, make sure you give Owned and Operated a five star review and check out OwnedandOperated.com.
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