June 9, 2025 • 51 mins
In this episode of Local Marketing Secrets, host Danny Leibrandt sits down with Al Levi, a renowned business strategist and author of the bestselling book, The Seven Power Contractor. Al, a third-generation contractor who transformed his family’s plumbing and HVAC business into a thriving enterprise, shares his proven strategies that have helped thousands of trades businesses systematize their operations for less stress, more profit, and sustainable growth.
Danny and Al delve deep into the Seven Power Framework—covering planning, operations, staffing, sales, sales coaching, marketing, and financial systems—and discuss how businesses of all sizes, from startups to multimillion-dollar firms, can implement these principles effectively. Al highlights common pitfalls contractors face, the importance of continuous learning, the power of effective delegation, and how systematization can dramatically increase your business's valuation and attractiveness to investors.
Whether you're running a pest control service, plumbing, roofing, or any other trade-based business, Al’s practical advice will help you transform chaos into calm, maximize profitability, and set the stage for lasting success.
Al Levi, Founder of 7 Power Contractor:
LinkedIn: https://www.linkedin.com/in/7powercontractor/
Facebook: https://www.facebook.com/AlLevi7PowerContractor/
Website: https://7powercontractor.com/
Danny Leibrandt, Founder of Pest Control SEO:
Facebook: https://facebook.com/DannyLeibrandt
LinkedIn: https://linkedin.com/in/dannyleibrandt/
Twitter: https://twitter.com/DannyLeibrandt
Website: https://dannyleibrandt.com
Pest Control SEO: https://pestcontrolseo.com/
Local Marketing Secrets Platforms:
YouTube: https://www.youtube.com/@LocalMarketingSecrets
Spotify: https://open.spotify.com/show/1TCL0LhZbsJS6mzanqnnT1?si=224075c9fbda42f5
Apple Podcasts: https://podcasts.apple.com/us/podcast/local-marketing-secrets/id1741176782
Amazon Music: https://music.amazon.com/podcasts/e0bb5254-5d6c-4940-8211-085157cc1239/local-marketing-secrets
Podcast Chapters:
00:00 Introduction to Al Levy and His Journey
02:41 The Importance of Systems in Contracting
05:20 Lessons from Mentorship and Authenticity
10:57 The Seven Power Framework Explained
19:39 Implementing Systems in Small Trades Companies
25:31 Marketing as a Key to Business Growth
29:26 Navigating Information Overload
32:23 The Tommy Mello Success Story
39:10 Financial Strategies and Performance Pay
43:35 Long-Term Thinking for Business Success
48:15 The Importance of Systematic Growth
#allevi #7powercontractor #tommymello #localmarketing #localbusiness #homeservicebusiness #homeservicemarketing #homeserviceadvertising #localseo #localadvertising #seo #marketing #podcast #business
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey there and welcome back to Local Marketing Secrets.
I'm your host Danny Lebrandt andtoday I'm with Al Levy.
If you don't already know Al, he's the third generation
contractor turned a business strategist who wrote the best
selling book, the Seven Power Contractor.
He also Co founded the rapidly growing Zoom Drain franchise and
created the signature operating manuals and staffing systems
(00:21):
that thousands of trades businesses rely on every day.
After scaling his family's plumbing and HVAC firm to 70
plus employees and retiring at 48, Al has spent the last two
decades helping contractors around the world run their
companies with less stress and alot more success.
In this episode, we're diving into his famous 7 Power
framework so you can transform chaos into calm, free up your
(00:43):
time and boost profits starting right now.
Now, with all that being said, Al, welcome to the show.
Thank you so much. Really appreciate the
opportunity to speak to people that follow you here.
And before you go, what does this guy, plumbing, heating,
cooling have to do with me? The fact is, we are all
contractors. I've worked with condo builders,
I never built a condo. I've worked with kitchen
(01:06):
cabinetry, garage doors, I've worked with painters and pest
control people and all of these different things because all of
contracting really is pretty much the same.
You can protest all you want, there are subtleties to what you
do, but it's pretty much the same.
And if you don't have systems, good luck.
It's so funny because we were just talking about this before
(01:27):
the show, that every single trades person, even though I'm
mainly pest control specific regarding digital marketing,
I've still worked with a lot of these other industries.
Like I said, roofers, pool services, garage door, whatever.
And everyone thinks they're so unique, so special.
It's completely different acrossindustries.
But with digital marketing and also like you do of systems and
manuals and such, it's all basically the same stuff.
(01:49):
It's like 80 to 90% the same, maybe even.
You need, you need the same platform exactly like I said,
it's like 80% and then there's atweak to it better fit whatever
segment you're in. But it's not a totally this will
never be standardized or never could be done or you don't know
what it's like in my business. And my my father trained me and
my two older brothers when we were very young to be serial
(02:11):
entrepreneurs. We, we owned a chain of ice
cream stores. We owned, you know, liquor
stores. We had multi state real estate
and you know the IT was a lot ofrunning around and hustle, but
the businesses were basically the same.
You know, you have to be able todo those kinds of things.
We always made sure one thing though, my father's mantra was
(02:33):
you can't kill the golden goose.And all that he meant was that
our plumbing, heating, cooling, electrical business was the
central part of our business. Yeah, definitely.
Yeah. So talk to me about your
background a little bit. So you were the third generation
business owner, at least had some equity in the company.
What was that like coming into the family business?
What was your role and really actually how did that lead up to
(02:56):
you starting Seven Power Contractor?
Yeah, So literally born into thebusiness and my my friend have
told me that I was born with a silver spoon.
And I said yes, except mine was covered with fuel oil because
that was the business we were in.
By the time we were all like young, we were either sweeping
up, you know, in the office or cleaning out toilets or riding
(03:18):
at night and, you know, doing stuff.
So ask about when you joined thebusiness.
I would say the day we were bornin the day they put a wrench in
our crib. But we did, you know, obviously
drive trucks do a lot of different things.
Helpers. My father, strongly believe that
you should never ask anybody to do anything that you yourself
haven't done. And when I was young, I didn't
(03:38):
like that, but I saw the wisdom of it pretty quickly because
it's true, you know, you don't have no authenticity.
And so, yes, that was really kind of it.
I did go off to, you know, to school and college and whatnot,
but my college days were, you know, I got my engineering
degree, of which I never practiced today.
But while I was going to school,I was also working six months a
(04:01):
year in the business. There was no such thing as a
spring break in a company. You know, just that's really
kind of it. And when I came back home and I
was still young, I was probably early 20, and I was the last of
the brothers to join. And my father said, listen, I
owe you an opportunity, not a guarantee.
And you're going to start here and work your way up.
(04:21):
And by the way, you're not reporting to me.
You're reporting to the people that head your department.
And they have full frame, you know, full reign to do what they
feel best. So good luck.
And as it turned out, you know, I had, I was very lucky.
I had some really great people mentors at my own company that
really took me under their wing because I wasn't, you know, born
(04:41):
to tech. I had to learn a lot of this
stuff, really good patient people.
And I also had some people that were very hard lessons at a day
when you could be abusive to your voice.
And so, but that's really what Iwas.
And I had basically would have had him out to a drill Sergeant.
His name was Tommy and he was tough.
But I will tell you one thing, Danny, I never forgot any
(05:05):
lessons that he ever taught me. Tommy, people go that's great
and go well, you didn't listen to why said because it was
humiliating enough to do it once.
You never wanted to ask twice. You paid really strong attention
to what it is. But I also was lucky.
I had a lot of great mentors allalong the way, even as I started
to change the business. You know this idea that I'm a
(05:26):
self-made man. Whoever you are, if you're
honest with yourself, and I hopeyou are, no, you're not.
If you read a book and it influenced you, you're not
self-made. Now if you took the actions that
helps you become more self-made.But you know, there is no such
thing as a born leader or all self-made entrepreneur.
(05:48):
Absolutely, I agree. I mean, I'm consuming content
all the time and like I was talking about Tommy before and I
know he said this as well. He's like, I have hundreds of
mentors because I've read all ofthese different books and I've
talked to all these different people in person, even really
me, every single person I have on the podcast, you're like a
mini mentor to me right now. This is like a almost like a
coaching session. I I get to kind of pick your
(06:10):
brain and learn from you. So it's it's not like you
achieve everything on your own. I think this might be a fault in
the home services space is that I feel like there's a good
amount of pride attached that everyone wants to say they're
self-made and they did it on their own and that, you know,
like the pest control guys. I know like, oh, I left Orkin,
I'm the big man. I'm going to do it on my own.
But like, you do have to be humble to an extent and be
(06:34):
willing to learn from others, right?
Yes, and you also have to, you know, my opinion, really just be
credit to your mentors. I credit to my mentors and the
list is long. One of them, luckily it was my
dad, yeah, and also my uncle. But yeah, I've had mentors all
along the way. You know, it's that really
transformed it. And I was lucky, you know, when
(06:55):
I started to write for trade magazines and and things of that
nature. I had a really great mentor and
great friend that really helped steer me through a lot of
things. And he really, he was a
specialist in what is hydronic heating, which just means
radiators and stuff, stuff like that.
But really he was, you know, really helpful with sales and
(07:17):
marketing. And you can't necessarily have
the objectivity to look at your own business the way you need
to. So what do I mean by that?
When my brother Richie and I would go out to look at other
shops that we didn't compete around the country because we
were net worth. And it was amazing how we could
walk through somebody else's door and immediately know what
was really good, what was reallybad, what we never want to do.
(07:39):
And the reason is we had emotional distance, the hardest
thing for us as owners, because like you said, we're we're
wearing blinders as we look at our own child.
And so it's very hard to see thethings.
And so I really have to get myself in a mindset where I can
look at my own business objectively or you won't see it.
(08:01):
So I trained myself as my business began to come out of
the dark ages and we came out ofthe chaos and we really cleaned
up our act in terms of all what our place looked like, where it
was located, how we dressed, howwe went to work, all of these
things. I knew that it's easy to climb a
mountain, then it's very easy tofall down a mountain.
(08:21):
And so I would stop as I was entering my door to my home
business and said to myself frequently, every pretty much
nearly every day, if I just arrived at this place and I
wasn't the owner here, what would I see?
And as I walked through the door, I see boxes in the hallway
that should have been put away, a light bulb that was out,
(08:43):
something wasn't right in the bathroom.
It's amazing how you can see this if you free yourself.
Now, part of what you mentioned before is one of the reasons we
ascend to ownership or we left this past company.
Now we're there, Hotshot is because we applied ourselves.
We got really good. Got to be an expert at it.
Really practice whatever it is that we do and be become the
(09:07):
last call, the last person that they go to in this if everybody
else has dropped the ball. And that gets you into an ego
mindset that I'm indispensable, which is a dangerous place to be
or really a place that's going to hem you in as to where you
can grow. Because if you're the only guy
who can answer the phone the best, or dispatch the best, or
(09:28):
be attacked the best, or pay your books the best, then you're
already of issue. The goal is not what you know.
What can you train others to know?
So quick story, when I spent 150,000 of my family's money
creating the manuals originally,and basically they're a fraction
of what's in the program today. But in the absence of nothing,
(09:49):
they were great. We're all the difference.
We paid that off in two years because of the chaos at our
company. We were blowing opportunities.
We were dropping the ball all the way along the line.
We were running back callbacks all the time instead of being
able to go to new work, and we were leaving a ton of profit.
Plus we had way more calls because we were good marketers
(10:11):
and we couldn't convert them. So we would go back to old work
before we can get to new work and that was really a big
problem. So there's reasons for this and
what I was sharing with Danny before the show, I was really
great at sales and marketing andmy team was really great at
blowing it up. So that's how I became the
operations, the staffing guy, the planning guy, you know, all
(10:35):
of these other things. I really had to systematize all
of it. So it's planning, operations,
staffing, sales, marketing, sales, coaching and financial
are those 7 powers that you really need to do.
So think of it as the building blocks or foundation under your
company. And if you want a strong
company, it's good to have a strong foundation.
(10:56):
Would you build a beautiful homeon top of bad ground or a bad
foundation? I hope not.
And so that's really what you really want to think about.
Whether you choose to scale or don't want to scale, or you want
to scale really big, life gets awhole lot easier when you have
repeatable systems that people are trained on so that they can
do the work and your job is to check on them and just praise
(11:18):
them as much as they can when they do well and correct when
it's not behavior that they should know because it's
objective and they've been trained on it.
Absolutely. So it seems like at least from
what I've seen that entrepreneurs that they're
usually because, you know, maybeyou're a little bit smarter, a
little bit more ambitious, you're pretty good at all sides
of things. Maybe you're not insanely good
(11:38):
like the finances or the managing or the hiring, but
you're pretty good at everything.
And at least that's enough to start.
But a lot of them struggle with handing off those tasks.
Do you have any advice there? Yeah, So in my book, I talk
about I never made progress. Why don't we talk about mentors?
One of my great mentors, this fellow Dan Hollahan, was an
industry giant. And I was lucky enough to have
(12:00):
him in my truck. That was the guy I was talking
about was great in sales, marketing, but that really was
what he was known for. He was known for being this
great heating guru. And so we're driving along and I
go to run a call and I'm in get back in the truck.
And this is ancient, guys. So hang with me because the
technology has changed. My my beeper was going off.
(12:22):
That was on my waist. My 2A radio and my big giant
cell phone were all ringing at the same time.
And he looks over at the passenger seat.
He looks at me and he goes. You think that's normal?
And. And for a second, I thought to
myself, yeah, yeah. And I hate it.
And then a second later, I thought to myself, Danny, look
(12:45):
how important I am. I'm indispensable.
And that was when I really firstdug into what I talk about, the
three personalities that I had to get hold of or nothing was
going to change. I liked being the rescuer, you
know, like the Calvary coming. All these guys failed.
You know what, step aside. I'll show you how it gets done.
Whatever position that is. The other one I used to like to
(13:08):
be is a fireman. There's a fire out there.
I've got to put it out. And you, all of you have failed.
Step aside, I'll get this fire out.
Here's the sneaky one on that. If there was no fires,
unconsciously I was setting themup to create fires.
Really sneaky stuff. And the last one was I liked
being the guru. So my brother Richie and I would
(13:30):
go to the highest level trainingbecause we did residential,
commercial and industrial. I forgot that point.
We didn't do just residential. So we would go to this high
level training, but none of the other people who were out there
and we had shifts, people on call from, they were out there
not sitting in their truck or sleeping from 7:00 to 4:00,
(13:50):
eight to five, 6:50 PM, two to 11:00 PM.
And then in the dead of winter, 5:00 PM to 2:00 AM were shifts
that people were rotating through and they were useless
when they would get to these bigthings.
And my brother Richie and I wereupset at them.
But when we finally stopped being upset at them, we realized
that we had the girl guru systemof we never sent them to that
(14:13):
training. We never gave them any aids.
We never put them through training to get this thing done.
So they were entitled to call and wake myself or my brother up
and ask a question. And so ultimately, when we
finally systematize that 50% of our calls, those wake up calls
went away. So watch out for rescuer Fireman
(14:35):
Guru. And I talk about that in my book
7 Power Contractor. It really makes a world of
difference because if you don't address those three things,
you're going to hang on to everything, which is what you're
asking. Now, once I created an org chart
that works with my brothers and you knew 4 things off the org
chart because I had a New York City union shop.
(14:56):
What they wanted to know is where am I today?
Even if I don't like it? If you're offering me a career,
not a job, which was our mantra,where can I go with you?
Then who is really my boss? Because one of the things we
hate is we walk around this often was everyone feels free to
yell at me. And then the last thing is, if
it's not in my manuals and the associated training and there's
(15:16):
a question, who can I go to ask that question without being
yelled at? And that really was the turning
point in the arc of our company.Interesting.
OK, yeah, no, that, that makes sense.
The those three personality types.
And honestly, I, I feel like I can find myself falling into all
those three sometimes. It's like, you know, I I want to
(15:37):
be the person who rescues like, Oh yeah, I see this with all
kinds of other entrepreneurs too.
So it's I, I don't think that's like one person.
Oh, it just happens to be Joe inArizona.
Like, no, I, I think it's every entrepreneur, right?
It is every entrepreneur or otherwise we would have never
made the entrepreneurial seizuredumb moment and got into
business. Yeah.
Or even stepped into an existingbusiness because dad wanted to
(16:00):
retire or whatever. Yeah.
And, and so you get that way andyour company trains you that way
because every time there's a mishap, who do they send it off
to is owners and managers to come fix this instead of
training them to work on items that should be within their
sphere. Yeah, definitely.
Awesome. So I I want to jump into the
(16:21):
seven power framework, but firstI I want to understand like how
did you come up with this? Well, why is it 7 powers versus
10 or five? Like, did you have an epiphany
one day or how did these come about?
Yeah, it was kind of evolution and an epiphany.
So it's chicken and the egg really.
Can't answer which one went first, but really what I knew
was the operating manual was really the biggest turning point
(16:43):
I needed. Who does what, what is the
reporting order? And that was really starting
with the org chart because you can create what people loosely
use it, mix up the terms they call SO PS.
So those are basically to me like checklists.
And in the absence of nothing, checklists are always better.
But if all you write is SO PS and they're all random, it's
(17:05):
like post it notes all over a wall.
There's no structure to it. So, SO PS are not operating
manuals, which is what I talk about operating manuals is when
you have an org chart. Now we have a place of
discipline. And the question is which of
these boxes is this an activity that goes on 80%?
And So what you're creating is aplaybook for you.
(17:27):
If I brought you on board that you could be the accounts
receivable person, accounts payable person, the CSR, the
dispatcher, the service tech, the installer, you follow all of
those things. There's a playbook that we go
over and over and over again, which empowers you to handle the
80% steps of delegation is not delegating what you do all the
(17:47):
time. It's delegating special projects
or habits that have to get in and that needs a system to a
written system. Basically in writing, what is it
that you want objectively stated?
What why is it that you want it?What happens if I do it in a
good ways? My whiff them or bad, you know,
(18:09):
what do I have as resources to accomplish this?
What is the time frame? And there's where owners get
upset because they delegate something, a project or have it
because they've heard that they shouldn't be doing everything
themselves. So they're going to delegate
something to you. Danny and I, I need you to clean
up the warehouse and get it straightened out in a month.
No pictures, no discussion, no minions and Macs, nothing.
(18:33):
Go straighten it out like you'rea mind reader.
And a month later I come back out there and it's nothing like
what I wanted, if it's even starting.
So one of the other things in this list of steps of delegation
is a weekly meeting or breaking it up in multiple meetings so
that you're finding out you're not running through this over
and over again. And what happens is in the first
(18:55):
week. So Danny, how are you doing?
Straighten out the warehouse. He goes, oh, you know, I meant
to get started. But, you know, then I got on to
this project that happened. And then I look at him and I go
totally hear it. So now, Danny, you have three
weeks. Tell me how you're going to
catch up, because I'm not takingit back.
Yeah, that's. Some help or some other things,
but the point of this learning how to delegate is a very
(19:16):
important skill. But you can't delegate
everything you need to have helpthem understand what it takes
80% of the time to fill their box and then delegations done in
writing steps delegation. This process helps them and
helps you, and once the both of you get used to it, everybody
(19:36):
seems to love it. Awesome.
And then for trades companies that are just starting out,
because that's that's usually the bulk of companies.
I think it's, you know, only I think it's.
Actually a lot of older operators.
A lot of, a lot of them are under $1,000,000.
So who should be the first hires?
Like how? Because assuming they're fairly
small, how can they start to implement this?
(19:57):
Because I'm sure they're, you know, they, they might have
started the company recently or they're not seeing too much
success. So how can they start to
implement these systems and start hiring the right people?
Yeah. So there's a couple of different
paths to that. One is that you, there are other
owner operators out there in thesame boat as you.
And if they're 506070, by the way, I'm old, so I'm not age
(20:18):
Presidents, you're reaching the end as an owner operator because
your body is just talking to youin ways that you can't believe.
The work just wears you out. And so they're right to be
acquired. And there's a lot of different
ways to do that. But then they may still want to
work and you can scale and grow.But guess what you need is
marketing. Marketing is really the key
(20:40):
thing. So marketing is organic
marketing and acquisition. It's not one or the other.
And acquisition you're thinking of, you have to have tons of
money in the bank. It's not true.
These little companies that I'm talking about, they either close
the door, but there's nothing there so that you can work for
what we called LNA mailbox money, which is when the calls
convert, I'll send you a check. And so that's kind of the way
(21:03):
that it can be done. There's a spectrum of
acquisition that mixed with local marketing and referral
marketing and online marketing and there's a bunch of different
things you can use. But in marketing, it's a system.
Marketing is a written system that you have to have a
marketing plan or who no matter which marketing your vendor you
work with is absolutely going tobe sabotaged and you're going to
(21:26):
be bother blaming them and then the next one you hire will be
exactly is disappointing unless you have your house in order.
So marketing plan basically defines where you want to go.
What is your goal, all of its objective, Then what services
you want to do today, what services you might want to add
further up. Where does your describe your
target audience? Because you can say, well, I can
(21:48):
sell it to everybody and here's what I can tell you.
No, you can't. And what I was told by my
marketing guru so many years ago, say something to someone or
you risk saying nothing to everyone.
And I never forget that phrase. So in my case, I had a couple of
target audiences, but the way I,I looked at it and defined it in
(22:08):
this marketing manual was who isthe person that I love the most?
And if I had the power to clone,that would be my target
audience. And now I put it descriptively
so others can see the same thing.
Where do they live? What do they respond to?
What is, you know, they're ticking things, Where do they
hang out? Who is their referral marketing
source that I could even use? All of that really strengthens
(22:31):
it. And the reason why I start with
marketing, you're saying I'm already exhausted, I can't do
any more work. I get it.
But the question is, are you charging enough for that work?
And that's where learning how todo budgeting.
And if you don't know what budgeting is or you're not
understanding, you're not great at financial.
There are two books that are still great today and
contractors everywhere still read it.
(22:53):
It's Ellen Rohr ROHR, she was myCo consultant, your Co franchise
partners. We work together a lot.
Basically, it really takes financial from this sticky,
messy accounting thing that you're looking at and puts it in
plain English because there's a difference between tax
accounting and real world accounting.
(23:15):
Tax accounting is what your accountant does and their main
job is to keep you out of jail, let you know that where you are,
and then also, you know, to be compliant, which is all great,
but it does not help you run your business.
Real world accounting helps you run your business and every day,
every week, every month, you need to know where you are.
And so if it's not in the budget, and one of my great
(23:37):
customers said to me, I finally get it about budgeting, I go,
what do you get? He said, if it's not in the
gradient in the pie, it's not going to be in the pie when it
comes out of the oven. So this is where you put all of
your stuff into this budget. And so the book that I'm talking
about first and they're read in order, where did the money go?
And then her second book is how much should I charge?
(24:00):
The reason I'm going through that and tying it to financial
is this is where you create the money to fuel the gas tank for
the marketing because your car is not going very far.
Even if you plug in like I do for electric, if you don't plug
in, your, your electric car is not going anywhere.
The point of it is, is that you need listen to this carefully.
(24:21):
The best way I came to describe marketing and it is because of
my plumbing experiences. Imagine yourself trying to fill
a bathtub. You're trying to fill the
bathtub with the right amount ofcalls from the right customer at
the right time. And if the drain is wide open
because you can't answer your phones really well, that's the
CSR. But the goal is not to just fill
(24:43):
the tub. It's to overflow the tub.
Because once you have more demand than you can do well, you
get to decide what you charge, what work you do and where you
will do it and what you don't want to do.
But it also creates the pressureto move out of this owner
operator and start moving to oneto three trucks, 3 to 5 trucks
and anywhere else you want to go.
(25:03):
Hey, man, I love that analogy and I'm glad you brought up
marketing because this, this podcast is mainly about
marketing. So that's your, because you're
talking that is like kind of what we need to be looking at
initially of implementing marketing strategy in terms of
the seven aspects of the framework.
Would you say that overall, likeacross all the companies that
(25:24):
you look at even like $1,000,000multi, $1,000,000 companies, is
it mainly marketing that they struggle with or like what?
What is everyone missing here? It it, it comes in all flavors.
So let me just stretch again. Planning, power operating, power
staffing, power sales, power sales, coaching, marketing and
finance. Many of these companies have
already grown. They got great referrals.
(25:45):
Customers love them. Depending on where they're
operating, it'd be a lot of depending on how much
competition they're banging their heads against and what
they do. So some of them really don't
know what to charge. What I was just talking about,
they don't understand the financials.
And they think that, well, I'll just bring in a, you know, an
accountant and they'll make it all work.
And the answer is not likely. You're just going to make it
(26:06):
more complicated and they're certainly not going to get you
the real world budgeting. The other thing is if you don't
know what's going on with the money and you don't have to do
the work, but you need to know that you can trust and verify
what your accounting team is giving you or it's only a matter
of time before they take your money from you or become your
unwanted partners. And that's fortunate.
(26:27):
It's a very sad, often repeated story.
So that's another reason why those books that I talk about
with Ellen are really helpful. You're always going to be in, in
my work chart, you're actually the financial manager.
You're also the marketing manager because if you don't
take hold of the marketing manager box, anybody on the
marketing team is sabotaged because you don't have it.
(26:47):
So this marketing plan that I was talking about really comes
down to the next three elements is marketing budget, which
typically is a percentage of sales.
And you're not even aggressive until 10% of sales is going to
marketing. And then you have to define what
is marketing, what's not. So for example, you want to put
a beautiful wrap on your truck. Is that a truck expense or a
marketing expense? And it really depends on what
(27:10):
you call it, but ultimately thatstays in that column.
And then the next thing is what are your three main drivers or
three-way, three main ways you go to market.
There is only a billion ways to go to market, but if you just
spend all a little bit of everything all over the place,
it's a shotgun approach and nothing's going to get hit.
So what are the three things that are going to give you the
gross sales you desire and the gross profit?
(27:33):
And the last one, they all missed any because I missed it
as well. You're busy, busy, busy.
And all of a sudden the phone goes dead.
And there were times I picked upmy own phone to go, what is the
phone broken? Really?
We were so busy that we forgot that we have to always be doing
marketing. So marketing calendar is you
populating through the backwardsthrough the year, what
(27:56):
activities you must be doing. So example, if you wanted to do
an oversized postcard campaign, well, you have to get a
testimonial. And testimonials are very
critical to any marketing, even SEO marketing, which we were
talking about. If your brand is not great, if
you're not responsive, you don'thave the Google five star
reviews, you're not great on allthese other things.
(28:17):
Customer testimonials is what makes all marketing better.
I mean all marketing better. And if you don't think that's
true, I travel all over the country and I was in Canada and
places like that and I used to ask the owner like where should
I eat? And then I stopped.
I just go to Yelp and I'll watchenough reviews, get a good sense
(28:40):
of it, go to Google, I'll figureit out.
And you do the same thing. So guess what your customers are
doing. That's why you need to get great
customer testimonials Augment. Love that.
Something that I'm collecting here is that it seems like just
overall, kind of just as a general principle, you have to
(29:02):
be an avid learner. You have to especially like
across these 7 fields, you have to just learn about finances,
find the top people, learn, you know, read their books, watch
the podcast that they're on. Like you just need some
foundational knowledge in each of these fields.
Otherwise it's like you don't know who to hire.
Like how can you hire someone for that role or how can you
(29:22):
make systems around it if you don't know anything about it?
It's true. And I think the thing that I
want to be clear is because you mentioned it before, I worked
with some great companies like Tommy, but also other great
companies. There's nobody that's a 10 out
of 10 in all of those, but you cannot be a zero in any of them.
(29:43):
That's really the difference. And then you have to be compared
now reading a lot, podcasting a lot, there's tons of information
on the Internet. And now, of course, to make it a
little more interesting, there'sAI information which is both
good and both bad and it's been from day one on the Internet.
The question is, are you listening and following a genius
(30:03):
or an idiot? It's really hard to know.
And so that's where there's multiple people attest, again,
testimonial to the, oh, I did this and it's great.
These are things that point out the better direction.
I would say to be careful because it's easy for you to
pull a piece from here and a piece from here and a piece from
here. And the analogy I use is that if
(30:25):
I gave you the power to create your dream car, would you have a
Ford chassis, Toyota engine, Hyundai seats?
Of course not. But that's what we do when we
build our businesses or we're going to pull pieces from
everywhere. You have to have this framework
and then you have to judiciouslypick what pieces fit so that
(30:46):
we're not making this jalopy rather than a dream, dream car.
Yeah, absolutely. No, that that's why I like
running the podcast and interviewing experts like
yourself is that one of the manybenefits I see from it is that
I'm pulling consensus across thepeople that I interview.
So it's not just oh, well, Al Levy said this, so I'm going to
do it now. It's not like a knock on you,
(31:06):
but like I want to, you know, almost like the trust but
verify. I want to hear from all the top
people. It's like Ding Al said it,
Tommy's saying it, Brigham saying it, like everyone says
this. OK, I know it's true now.
Maybe, yeah, just if just one person says it, but everyone
kind of debates on it, then, youknow, maybe be a little bit more
hesitant there. That's that's true.
I think that's a pretty good wayto kind of say that everyone
(31:28):
tells you that you're not going anywhere without a written
marketing plan. And other than me just saying it
right here. And if you don't put the
elements that I was talking about in it, it's still not
going anywhere. And if you don't execute things
like the, again, the marketing budget, the three main drivers
and then the calendar, I'm sure,you know, there's people out
(31:49):
there, they may express it differently, but I know that it
is. And you never have to take my
word for anything. Number one is I've already done
it myself. So it's not like, oh, you know
what, this is a good idea. Let's see if Danny will have
success with this. The other thing is I've worked
with contractors for two decadesand their success stories are
all over the page on my website and in my programs and things of
(32:12):
that nature. I never asked any contractor to
be a Guinea pig to something that you know is you want to
know. OK, who else has done this
besides myself? Absolutely.
Well, relating to success stories, this is a great
transition. That's arguably your top success
story, or at least maybe the most well known is the the Tommy
Mello story that he came to you or he had you on his podcast and
(32:36):
you guys ended up being the samecity.
Talk to me about how you originally met Tommy Mello and
what that was like implementing your systems and such for his
business. Yeah.
So it was 2017 and I was still doing 1 to 1 consulting and
Tommy just starting his podcast and I was one of the first
guests and he called me to before we're going to go live.
(32:58):
And I looked down at the my phone and it's my area code and
I go, So where do you live, Tommy?
He goes Phoenix, he goes, where do you live, Al?
I go Phoenix, he goes great. When we're done, we'll have
lunch together. So we have lunch together, we're
talking and then he hands me hisbook and he goes, I want you to,
you know, do me a favor. Would you read this?
Be brutally honest. They go, well, don't give me the
book if you don't want brutal honest because I will tell you.
(33:21):
And then I met back up with themand I go, this is not a book,
it's a ransom note. It's just so all over the place
said you need her editor. So I gave him the same editor
who would help me with my book. And then he said, great, you're
hired. I said hired for what?
He goes all I need everything that's in your book and what
you've talked about at my shop. He said we are 15,000,000 in
(33:43):
sales and we're losing money every day.
So my first job in 2017 was to get them to break even and then
from break even to start making a lot of money.
And then we're at we're startingto rock'n'roll.
And Tommy comes to me one day and says early says we're going
to be 100 million. And I had already known Tommy
and I go absolutely no doubt that we will.
(34:04):
But the, this time when we buildit, it's not going to be chaos
because you're had been relying on people to magically solve the
problem versus systems that people learn so that they can
scale and get the system to where it is.
And the, you know, today is probably 230 million in like 19
states. The real test of systems is when
(34:28):
you can expand beyond your main hub shop to other locations.
So in my case, we had a main hubshop and three satellite shops.
And they the way we learn how tomake it run is you need these
kinds of systems that people aretrained on, not just go find the
magic person who makes it work. Interesting.
Yeah, OK, that makes sense. OK.
So when you are expanding locations, it's starting to
(34:50):
really grow. That's that's the actual test
because it's I would assume I haven't done it myself.
That's the acid test to how goodyou know what it is.
Yeah. Matt Rachman be running a
workshop on that real soon. Awesome.
Because I think so many people are really awful at it.
Yeah, no, I'm, I'm sure. So talk to me like, let's get a
little bit more practical here. What?
(35:11):
Like what actually changed in his business?
Was there like one thing out of place?
You know, was it his finances? Was it everything?
Yeah, you know what it was all of the things along the seven
powers except 1. He was already good at sales and
he was pretty good at marketing.But it was marketing was just
like wake up, fall out of bed and mixed.
Hottest thing. You know, if you throw enough
money at it, you can get away with it, but you will go broke
(35:34):
in the process. So he did planning, operations,
staffing. We didn't do sales because he
liked the sales system. We did marketing and then Ellen
did the financial and the rewardprogram with him.
And talk to me about like the transition there and like what
was. Started with all my 1:00 to 1:00
(35:54):
clients would be planning power and planning power is really all
the projects and habits that every one of your people in your
company have in their heads thatyou have in your head is just
like be like. And, and I watched Tommy do it
like every other contractor. He's walking down the hallway
and he goes, hey, Danny, would you take care of this?
(36:15):
So it worked. Tell them it was not delegation,
it was dumping. And I know because that's what I
used to do. And I said, you're not going to
like what happens. And he says, I don't, well, then
we need a plan. So think of it as a funnel.
The top hundred 3550 projects and habits you want to get done
in the next three to five years,they go there to live.
(36:36):
So every new idea and if you're listening to this podcast and
you're thinking, well, I'm goingto get done with this right
away, well, where does it fit inthe priority?
So it comes down the funnel witheither fixing your biggest
problem, challenge or greatest chance to grow and be
profitable. And it gets to the top 30.
And that's what you will do in one year.
And then no one can work on 30 things at one time.
So you take the same strainers, fix the biggest problem,
(36:58):
challenge the greatest chance ofgrowing profitable and get down
to your top five. And the top five is your promise
to yourself and to your company because you put it out there
where everyone can see it on a whiteboard to this day, yes, I
know you can digitize it, but that's not the point.
It's out there for them to hold you accountable.
So on the board, it's what is itthat we're doing those five
(37:18):
things? Why are we doing that?
And then where's the status? And if they see no activity,
your team knows same old thing. Because what you do every day
is, you know, I really need you to work on this thing.
You know what? The next day you walk in and go,
I know what I said yesterday, but this is really important.
So pretty soon your team learns to stand still because whichever
(37:39):
way the wind blows is where you're going next.
That is the essence of getting you to work on the right project
and have it at the right time inthe right way.
So that's what got him on the right track first.
Then it was the org charts, the manuals, the training that goes
into that. Then it was how can he stop
trying to find willing techs with great skills because
(38:01):
there's only so few of them. And they were really telling him
what they would and wouldn't do and they were messing up and he
wouldn't fire him. So I said, yeah, because you
don't have your own farm team, which is taking willing
apprentice with no skills to willing techs with great skills.
So we took the manuals, built the right hands on training
(38:22):
center, which was modeled on theones that I've created, got them
to be better trainers in house, learning how to train right,
training curriculum for it. And that's really the flywheel
effect of being able to take apprentices to junior tech's,
junior tech's, senior tech's. And then as you grow and hub
out, you need field supervisors.But they're not guys you
appoint, they qualify, they compete and they train.
(38:45):
So that's staffing. And then from there, sales.
My sales process was 5 steps. They had their own.
That was 8. And then there's marketing.
And if you're not good at sales,I'm going to tell you right now,
your marketing is compromised. Why do I say that?
Because if you don't know what makes your ideal target audience
(39:07):
tick, how can you sell to one 100 or a million of them?
You can't effectively do that. So the better you are at sales,
the better you are at marketing.They kind of reinforce one
another. And then marketing, as I was
discussing before about a systemin writing, really taking the
stuff to work this all the way through.
(39:28):
That's kind of the necessary things that I was being doing.
Financial was Ellen getting you to do real world budgeting so
that you knew where you were every day, every week, every
month and quarter. That's what you did.
Sales coaching is basically a fancy name for your reward
program. And ultimately there's three
ways to pay straight hourly salary, which is what I was born
into with the union. And you got more money the
(39:48):
longer you were. And I broke that up to where you
got paid, the more you could do.Even then it was
dissatisfactory. So we went to the second pay
system, which is salary for whatyou do.
And if you bring the jobs in on time, there's money built for
going above or you can sell and do more money above.
So that's the nature of that second one.
And the third one, which is popular now, pay for performance
(40:12):
where people think, well, I don't pay you if I if you don't
perform. And the answer is no.
Yeah, the government wants its money, and it's very different
everywhere you operate and how you operate.
So don't go with a loan here. And if you're going to go down
to pay for performance, you really need a good HR person to
(40:33):
know what it takes to be compliant.
And here's the bad problem. Sounds bad.
The government may not catch up to what you've been doing for
two to three years. And once they do, the penalties
are going to rack up like you can't believe.
So you want to make sure you're always staying in compliance.
Yeah, definitely. Wow.
OK, so you basically changed around everything in Tommy's
(40:54):
company, it sounds like, besidesthe sales.
And that's crazy because a lot of people in the space look up
to Tommy and they think he's like a genius.
And not saying that he isn't, but just, no, he's yeah, he's
very smart. He's a genius and, and an
incredibly hard worker, but he'salso, he was really unfocused.
(41:15):
Yeah. And I'm not saying anything that
he hasn't said publicly over andover again.
I really had to get him to sit down, put his phone down.
And I threatened to walk out on him.
Literally. I I told him, put your phone
away. It was a bucket that we were all
doing. And finally I just got up and
said, I'm leaving because where are you going?
I said, I told you to put your phone away twice.
(41:36):
My time is valuable. If you're not going to spend
time with me focused on this, I'm leaving.
And to his credit, he put his phone away and we got down to
work. Dang no I I was not trying to
badmouth him or anything I was just saying that like everyone
looks up to him and even there were so many problems with his
business so I'm sure with other people's it might even be.
(41:57):
Worth it made him great. Danny though, it's not that.
His business from day one was perfect and nothing ever has to
be changed. He knew it was broken, but he
wasn't going to stay broken. Wow.
Yeah. OK, so, so I guess for those
bigger companies, so we're actually because I'm, I'm just
trying to think about this from like a full, full perspective
(42:17):
because we talked about the smaller guys, but it's the same
issue with the bigger guys there's they don't have anything
unlocked either. I've worked with the small.
One of the smallest companies typically was when I was doing 1
to 1 consulting. It was a chimney guy up in
California. And when I say small, he and I
(42:38):
were working at his dining room table.
His wife was playing with the grandchildren next room over,
and she was the accounts payablebookkeeper.
His best friend was in the garage being the CSR and
dispatcher. And he had one tech, his son.
We scaled that business to be 12techs, 2 locations, and he sold
(42:58):
it. So yeah.
And it's the same systems that there's a condo builder of
85,000,000 works same idea. I, I love what you're talking
about earlier of relating it back to an exit.
And really it seems like over the course of what you've been
saying and what, what I've listened to you off of this
podcast is that you have to be avery long term thinker.
(43:20):
When you are hiring people, you are creating careers, you want
them to be with your company forever.
When you are building your company, it's not just, OK, how
can we survive the next month, but how can we hit that crazy
exit or how can we pass it throughout the family?
So you need to be a much longer term thinker.
And I, I want to go a little bitdeeper on that, you know,
exiting and such with your company.
(43:41):
What, what have you seen in terms of that, that you get like
a higher multiple or there's just less stress or it's more
attractive to investors? There's there's no shortage.
Depending on where you're hanging out, you're going to
hear about all these phenomenal numbers from PE companies.
They're not interested in owner,operator, one to three truck,
three to five trucks. Frankly, you're probably not on
anybody's radar until you scale to about 5 million, if you're
(44:03):
talking that way. But there are other companies
out there that might be interested.
As I mentioned, you could be theacquirer, but there's sometime
you can choose to to exit and sometimes you can do employee
buyouts like Ellen did with her plumbing heating company.
The the employees bought the company from.
There's a lot of different ways to go, but nobody wants your
job. They want to buy a company, they
(44:26):
don't want your job. So you have to, you know, make
it run without you being the thing that makes it all work.
That you are running the business.
The business doesn't run you. Right.
Yes. Yep, sorry.
I I remember hearing you say that on a podcast.
It's so true. And also the thing of.
And and don't be, don't be deceived by scale because we
were 17,000,000 already and you think because you're big no,
(44:49):
that business was just more gasoline to a fire.
Yeah, that's what I was, that's what I was getting kind of
confused by because I do talk toa lot of these small business
owners. A lot of times it's pest control
guys and I, I just know they're like all over the place.
They're they're managing everything.
It's fires all day long. But I would think that the
company is 1 to 10, even like 20-30 that they've kind of got
it dialed, but no. All that they have is the
(45:12):
ability to throw more bodies in front of an oncoming bus that
will never stop. Sorry for being morbid, but
really, that's the best example because that's what I felt like
We were just taking people off street, just throwing them from
the bus to slow it down, not stop it.
And we never got to stopping it until we created this, you know,
(45:33):
foundational pieces, got people trained up, and then we could
really turn on building our own staff from scratch instead of
always trying to rewire people. Yeah, it's exhausting.
So I'd like to get actionable here, like after someone listens
to this podcast, what do they need to do?
They need to read your book. They need to read Ellen Rohr's
(45:53):
book. Like what can they implement in
their business? I.
Would say, yeah, my book, it's avery short read.
When I worked with my editor, I,I had already been writing for
years and years. And she goes, well, why do you
need me? I go, I have 250 children in the
audience and they're all tellingme to pick me.
I said that would be a mess. But more than that, I only want
(46:14):
to have a book that a contractorlike myself, because I'm not a
fast reader, could read in two to four hours.
But the goal would they would read it over and over again and
absorb more and more as they go.So that's how it's designed.
And that is the Seven Power Contractor, which is on Amazon
paperback, pretty easy read e-book.
And if you like this voice, it'sinaudible.
(46:37):
So yeah, there's no excuse not to do that.
Ellen's books, if you want it. And I reckon before you go out
and get somebody on your financial team or you have
people on your financial team, go read those two books and read
it in the order. Where did the money go and how
much should I charge? And remember, it's ROHR.
(46:57):
It's a lesson and. Then there are other books.
Any other resources? Oh, there's a ton of them.
Look, I still think Good to Great is a great book.
One of the shortest books that always goes people don't get who
move my cheese was one of the things about change because all
of us struggle with change. Your employees struggle with
(47:17):
change, you struggle with changeand I still keep it above my
desk. I have a thing.
It's like Asians for those you could see it's still here
because it reminds me how much am I adapting and changing and
flowing with the change that goes on.
So without confusing you with anincredibly long reading list,
(47:37):
these short, well written books are really a good foundational
piece so that you're not just all going to read and read and
read and read and read. OK, well knock yourself out.
But then what you will have doneis give yourself another 8
billion ideas. Yeah, definitely.
And to to close off the show, Aland by the way, great
recommendations. I'll make sure to read those
(47:59):
books to close out the show. I'd like to give you the stage.
What is your like, definitive message to these local business
owners that you know, they mightbe starting out or they might be
trying to grow? What is your message to these
business owners? You can grow big.
It's, you know, there's ways to do that, but really the idea of
(48:21):
just growing big without being systematic is an invitation to
chaos. It's basically going to end up
like all the others, which is anuncontrollable fire that you
keep putting gasoline on each and every day.
So when people ask me when is ittime to put systems in place,
the answer is what I was told years ago by my friend Ellen,
(48:42):
which is she asked me one day I she says to me, when's the best
time to grow an oak tree? And I go, I'm from New York
City, so we don't know from oak trees.
So why don't you just tell me Ellen?
And she goes 10 years ago and today because if you don't plan
it today, 10 years from now, you're going to wish you had.
So that's really my answer to that.
(49:03):
And then be you have. Once you have a structure, then
you can start judiciously addingpieces to help yourself grow.
Amen. So start implementing those
systems today. Go get Alice book.
Go get Ellen's books, go Start learning, get that foundational
knowledge that you can apply allof these different 7 powers.
(49:23):
Al this has been an absolutely great podcast and I, I love the
way that you think about things.I feel like very few people are
thinking so systematically and it shows because all of these
home services are made, made. All these home service companies
are majorly struggling with the systems.
And I see it myself. I'm I'm more so on the marketing
front, but still they're more marketing.
System, just like you heard me rattle off before.
(49:46):
Don't delude yourself. It's, it's a complete mess.
Every single company that I walkinto, even the ones I I've, you
know, done some consulting with $100 million companies and they
still don't have a dial. So this is really a big
opportunity for all these businesses.
And it was an honor to talk to you, Al.
So to close this off, where can people learn more about you find
you on? Social media, best place to go,
(50:06):
Danny, is to my website, which is the #7 Power contractor.com
#7powercontractor.com. There's a lot of information.
I've been writing blogs forever.You can search a lot of it.
You'll get some really good information.
There's videos, there's things of that nature.
It's all free, Jumpstart guides free.
And if you're interested in products beyond the book, then
(50:26):
click on the product page. You'll see the two main
programs. Signature Operating Manual
system is where you start. And then that leads you into the
second program, if you're interested, is Signature
Staffing System so that you too can take willing apprentices
with no skills to willing text with great skills.
Awesome. So definitely go there. 7 Power
contractor.com that will be in the description below.
(50:49):
And then where can people connect to you on social media
and anything else you'd like to plug out?
Yeah. So, yeah, if you want to reach
out directly to me on my page, there is connect with us, you
can do that. And so that's a really good
place. I am out there on social media
because everybody wants to listen to an old guy come on and
on, but no actors. Trust me, I only, I'm not
(51:10):
putting pictures of my dogs and my kids or anything else of that
nature. It's all about what I've learned
along the way. That's what I share on my social
media platform. So either is Al Levy or Seven
Power Contractor. I'm primarily Facebook, not a
lot on Instagram. And so those are really the the
big places to go. Awesome.
Well, thank you so much for sharing your information
(51:32):
throughout the industry and particularly on this podcast
today. It was such an honor to have
you, Al. And yeah, thank you for coming
on. Thank you for the invitation.
Appreciate it of. Course.
Hey there and welcome back to Local Marketing Secrets.
I'm your host Danny Lebrandt andtoday I'm with Al Levy.
If you don't already know Al, he's the third generation
contractor turned a business strategist who wrote the best
selling book, the Seven Power Contractor.
He also Co founded the rapidly growing Zoom Drain franchise and
created the signature operating manuals and staffing systems
(00:21):
that thousands of trades businesses rely on every day.
After scaling his family's plumbing and HVAC firm to 70
plus employees and retiring at 48, Al has spent the last two
decades helping contractors around the world run their
companies with less stress and alot more success.
In this episode, we're diving into his famous 7 Power
framework so you can transform chaos into calm, free up your
(00:43):
time and boost profits starting right now.
Now, with all that being said, Al, welcome to the show.
Thank you so much. Really appreciate the
opportunity to speak to people that follow you here.
And before you go, what does this guy, plumbing, heating,
cooling have to do with me? The fact is, we are all
contractors. I've worked with condo builders,
I never built a condo. I've worked with kitchen
(01:06):
cabinetry, garage doors, I've worked with painters and pest
control people and all of these different things because all of
contracting really is pretty much the same.
You can protest all you want, there are subtleties to what you
do, but it's pretty much the same.
And if you don't have systems, good luck.
It's so funny because we were just talking about this before
(01:27):
the show, that every single trades person, even though I'm
mainly pest control specific regarding digital marketing,
I've still worked with a lot of these other industries.
Like I said, roofers, pool services, garage door, whatever.
And everyone thinks they're so unique, so special.
It's completely different acrossindustries.
But with digital marketing and also like you do of systems and
manuals and such, it's all basically the same stuff.
(01:49):
It's like 80 to 90% the same, maybe even.
You need, you need the same platform exactly like I said,
it's like 80% and then there's atweak to it better fit whatever
segment you're in. But it's not a totally this will
never be standardized or never could be done or you don't know
what it's like in my business. And my my father trained me and
my two older brothers when we were very young to be serial
(02:11):
entrepreneurs. We, we owned a chain of ice
cream stores. We owned, you know, liquor
stores. We had multi state real estate
and you know the IT was a lot ofrunning around and hustle, but
the businesses were basically the same.
You know, you have to be able todo those kinds of things.
We always made sure one thing though, my father's mantra was
(02:33):
you can't kill the golden goose.And all that he meant was that
our plumbing, heating, cooling, electrical business was the
central part of our business. Yeah, definitely.
Yeah. So talk to me about your
background a little bit. So you were the third generation
business owner, at least had some equity in the company.
What was that like coming into the family business?
What was your role and really actually how did that lead up to
(02:56):
you starting Seven Power Contractor?
Yeah, So literally born into thebusiness and my my friend have
told me that I was born with a silver spoon.
And I said yes, except mine was covered with fuel oil because
that was the business we were in.
By the time we were all like young, we were either sweeping
up, you know, in the office or cleaning out toilets or riding
(03:18):
at night and, you know, doing stuff.
So ask about when you joined thebusiness.
I would say the day we were bornin the day they put a wrench in
our crib. But we did, you know, obviously
drive trucks do a lot of different things.
Helpers. My father, strongly believe that
you should never ask anybody to do anything that you yourself
haven't done. And when I was young, I didn't
(03:38):
like that, but I saw the wisdom of it pretty quickly because
it's true, you know, you don't have no authenticity.
And so, yes, that was really kind of it.
I did go off to, you know, to school and college and whatnot,
but my college days were, you know, I got my engineering
degree, of which I never practiced today.
But while I was going to school,I was also working six months a
(04:01):
year in the business. There was no such thing as a
spring break in a company. You know, just that's really
kind of it. And when I came back home and I
was still young, I was probably early 20, and I was the last of
the brothers to join. And my father said, listen, I
owe you an opportunity, not a guarantee.
And you're going to start here and work your way up.
(04:21):
And by the way, you're not reporting to me.
You're reporting to the people that head your department.
And they have full frame, you know, full reign to do what they
feel best. So good luck.
And as it turned out, you know, I had, I was very lucky.
I had some really great people mentors at my own company that
really took me under their wing because I wasn't, you know, born
(04:41):
to tech. I had to learn a lot of this
stuff, really good patient people.
And I also had some people that were very hard lessons at a day
when you could be abusive to your voice.
And so, but that's really what Iwas.
And I had basically would have had him out to a drill Sergeant.
His name was Tommy and he was tough.
But I will tell you one thing, Danny, I never forgot any
(05:05):
lessons that he ever taught me. Tommy, people go that's great
and go well, you didn't listen to why said because it was
humiliating enough to do it once.
You never wanted to ask twice. You paid really strong attention
to what it is. But I also was lucky.
I had a lot of great mentors allalong the way, even as I started
to change the business. You know this idea that I'm a
(05:26):
self-made man. Whoever you are, if you're
honest with yourself, and I hopeyou are, no, you're not.
If you read a book and it influenced you, you're not
self-made. Now if you took the actions that
helps you become more self-made.But you know, there is no such
thing as a born leader or all self-made entrepreneur.
(05:48):
Absolutely, I agree. I mean, I'm consuming content
all the time and like I was talking about Tommy before and I
know he said this as well. He's like, I have hundreds of
mentors because I've read all ofthese different books and I've
talked to all these different people in person, even really
me, every single person I have on the podcast, you're like a
mini mentor to me right now. This is like a almost like a
coaching session. I I get to kind of pick your
(06:10):
brain and learn from you. So it's it's not like you
achieve everything on your own. I think this might be a fault in
the home services space is that I feel like there's a good
amount of pride attached that everyone wants to say they're
self-made and they did it on their own and that, you know,
like the pest control guys. I know like, oh, I left Orkin,
I'm the big man. I'm going to do it on my own.
But like, you do have to be humble to an extent and be
(06:34):
willing to learn from others, right?
Yes, and you also have to, you know, my opinion, really just be
credit to your mentors. I credit to my mentors and the
list is long. One of them, luckily it was my
dad, yeah, and also my uncle. But yeah, I've had mentors all
along the way. You know, it's that really
transformed it. And I was lucky, you know, when
(06:55):
I started to write for trade magazines and and things of that
nature. I had a really great mentor and
great friend that really helped steer me through a lot of
things. And he really, he was a
specialist in what is hydronic heating, which just means
radiators and stuff, stuff like that.
But really he was, you know, really helpful with sales and
(07:17):
marketing. And you can't necessarily have
the objectivity to look at your own business the way you need
to. So what do I mean by that?
When my brother Richie and I would go out to look at other
shops that we didn't compete around the country because we
were net worth. And it was amazing how we could
walk through somebody else's door and immediately know what
was really good, what was reallybad, what we never want to do.
(07:39):
And the reason is we had emotional distance, the hardest
thing for us as owners, because like you said, we're we're
wearing blinders as we look at our own child.
And so it's very hard to see thethings.
And so I really have to get myself in a mindset where I can
look at my own business objectively or you won't see it.
(08:01):
So I trained myself as my business began to come out of
the dark ages and we came out ofthe chaos and we really cleaned
up our act in terms of all what our place looked like, where it
was located, how we dressed, howwe went to work, all of these
things. I knew that it's easy to climb a
mountain, then it's very easy tofall down a mountain.
(08:21):
And so I would stop as I was entering my door to my home
business and said to myself frequently, every pretty much
nearly every day, if I just arrived at this place and I
wasn't the owner here, what would I see?
And as I walked through the door, I see boxes in the hallway
that should have been put away, a light bulb that was out,
(08:43):
something wasn't right in the bathroom.
It's amazing how you can see this if you free yourself.
Now, part of what you mentioned before is one of the reasons we
ascend to ownership or we left this past company.
Now we're there, Hotshot is because we applied ourselves.
We got really good. Got to be an expert at it.
Really practice whatever it is that we do and be become the
(09:07):
last call, the last person that they go to in this if everybody
else has dropped the ball. And that gets you into an ego
mindset that I'm indispensable, which is a dangerous place to be
or really a place that's going to hem you in as to where you
can grow. Because if you're the only guy
who can answer the phone the best, or dispatch the best, or
(09:28):
be attacked the best, or pay your books the best, then you're
already of issue. The goal is not what you know.
What can you train others to know?
So quick story, when I spent 150,000 of my family's money
creating the manuals originally,and basically they're a fraction
of what's in the program today. But in the absence of nothing,
(09:49):
they were great. We're all the difference.
We paid that off in two years because of the chaos at our
company. We were blowing opportunities.
We were dropping the ball all the way along the line.
We were running back callbacks all the time instead of being
able to go to new work, and we were leaving a ton of profit.
Plus we had way more calls because we were good marketers
(10:11):
and we couldn't convert them. So we would go back to old work
before we can get to new work and that was really a big
problem. So there's reasons for this and
what I was sharing with Danny before the show, I was really
great at sales and marketing andmy team was really great at
blowing it up. So that's how I became the
operations, the staffing guy, the planning guy, you know, all
(10:35):
of these other things. I really had to systematize all
of it. So it's planning, operations,
staffing, sales, marketing, sales, coaching and financial
are those 7 powers that you really need to do.
So think of it as the building blocks or foundation under your
company. And if you want a strong
company, it's good to have a strong foundation.
(10:56):
Would you build a beautiful homeon top of bad ground or a bad
foundation? I hope not.
And so that's really what you really want to think about.
Whether you choose to scale or don't want to scale, or you want
to scale really big, life gets awhole lot easier when you have
repeatable systems that people are trained on so that they can
do the work and your job is to check on them and just praise
(11:18):
them as much as they can when they do well and correct when
it's not behavior that they should know because it's
objective and they've been trained on it.
Absolutely. So it seems like at least from
what I've seen that entrepreneurs that they're
usually because, you know, maybeyou're a little bit smarter, a
little bit more ambitious, you're pretty good at all sides
of things. Maybe you're not insanely good
(11:38):
like the finances or the managing or the hiring, but
you're pretty good at everything.
And at least that's enough to start.
But a lot of them struggle with handing off those tasks.
Do you have any advice there? Yeah, So in my book, I talk
about I never made progress. Why don't we talk about mentors?
One of my great mentors, this fellow Dan Hollahan, was an
industry giant. And I was lucky enough to have
(12:00):
him in my truck. That was the guy I was talking
about was great in sales, marketing, but that really was
what he was known for. He was known for being this
great heating guru. And so we're driving along and I
go to run a call and I'm in get back in the truck.
And this is ancient, guys. So hang with me because the
technology has changed. My my beeper was going off.
(12:22):
That was on my waist. My 2A radio and my big giant
cell phone were all ringing at the same time.
And he looks over at the passenger seat.
He looks at me and he goes. You think that's normal?
And. And for a second, I thought to
myself, yeah, yeah. And I hate it.
And then a second later, I thought to myself, Danny, look
(12:45):
how important I am. I'm indispensable.
And that was when I really firstdug into what I talk about, the
three personalities that I had to get hold of or nothing was
going to change. I liked being the rescuer, you
know, like the Calvary coming. All these guys failed.
You know what, step aside. I'll show you how it gets done.
Whatever position that is. The other one I used to like to
(13:08):
be is a fireman. There's a fire out there.
I've got to put it out. And you, all of you have failed.
Step aside, I'll get this fire out.
Here's the sneaky one on that. If there was no fires,
unconsciously I was setting themup to create fires.
Really sneaky stuff. And the last one was I liked
being the guru. So my brother Richie and I would
(13:30):
go to the highest level trainingbecause we did residential,
commercial and industrial. I forgot that point.
We didn't do just residential. So we would go to this high
level training, but none of the other people who were out there
and we had shifts, people on call from, they were out there
not sitting in their truck or sleeping from 7:00 to 4:00,
(13:50):
eight to five, 6:50 PM, two to 11:00 PM.
And then in the dead of winter, 5:00 PM to 2:00 AM were shifts
that people were rotating through and they were useless
when they would get to these bigthings.
And my brother Richie and I wereupset at them.
But when we finally stopped being upset at them, we realized
that we had the girl guru systemof we never sent them to that
(14:13):
training. We never gave them any aids.
We never put them through training to get this thing done.
So they were entitled to call and wake myself or my brother up
and ask a question. And so ultimately, when we
finally systematize that 50% of our calls, those wake up calls
went away. So watch out for rescuer Fireman
(14:35):
Guru. And I talk about that in my book
7 Power Contractor. It really makes a world of
difference because if you don't address those three things,
you're going to hang on to everything, which is what you're
asking. Now, once I created an org chart
that works with my brothers and you knew 4 things off the org
chart because I had a New York City union shop.
(14:56):
What they wanted to know is where am I today?
Even if I don't like it? If you're offering me a career,
not a job, which was our mantra,where can I go with you?
Then who is really my boss? Because one of the things we
hate is we walk around this often was everyone feels free to
yell at me. And then the last thing is, if
it's not in my manuals and the associated training and there's
(15:16):
a question, who can I go to ask that question without being
yelled at? And that really was the turning
point in the arc of our company.Interesting.
OK, yeah, no, that, that makes sense.
The those three personality types.
And honestly, I, I feel like I can find myself falling into all
those three sometimes. It's like, you know, I I want to
(15:37):
be the person who rescues like, Oh yeah, I see this with all
kinds of other entrepreneurs too.
So it's I, I don't think that's like one person.
Oh, it just happens to be Joe inArizona.
Like, no, I, I think it's every entrepreneur, right?
It is every entrepreneur or otherwise we would have never
made the entrepreneurial seizuredumb moment and got into
business. Yeah.
Or even stepped into an existingbusiness because dad wanted to
(16:00):
retire or whatever. Yeah.
And, and so you get that way andyour company trains you that way
because every time there's a mishap, who do they send it off
to is owners and managers to come fix this instead of
training them to work on items that should be within their
sphere. Yeah, definitely.
Awesome. So I I want to jump into the
(16:21):
seven power framework, but firstI I want to understand like how
did you come up with this? Well, why is it 7 powers versus
10 or five? Like, did you have an epiphany
one day or how did these come about?
Yeah, it was kind of evolution and an epiphany.
So it's chicken and the egg really.
Can't answer which one went first, but really what I knew
was the operating manual was really the biggest turning point
(16:43):
I needed. Who does what, what is the
reporting order? And that was really starting
with the org chart because you can create what people loosely
use it, mix up the terms they call SO PS.
So those are basically to me like checklists.
And in the absence of nothing, checklists are always better.
But if all you write is SO PS and they're all random, it's
(17:05):
like post it notes all over a wall.
There's no structure to it. So, SO PS are not operating
manuals, which is what I talk about operating manuals is when
you have an org chart. Now we have a place of
discipline. And the question is which of
these boxes is this an activity that goes on 80%?
And So what you're creating is aplaybook for you.
(17:27):
If I brought you on board that you could be the accounts
receivable person, accounts payable person, the CSR, the
dispatcher, the service tech, the installer, you follow all of
those things. There's a playbook that we go
over and over and over again, which empowers you to handle the
80% steps of delegation is not delegating what you do all the
(17:47):
time. It's delegating special projects
or habits that have to get in and that needs a system to a
written system. Basically in writing, what is it
that you want objectively stated?
What why is it that you want it?What happens if I do it in a
good ways? My whiff them or bad, you know,
(18:09):
what do I have as resources to accomplish this?
What is the time frame? And there's where owners get
upset because they delegate something, a project or have it
because they've heard that they shouldn't be doing everything
themselves. So they're going to delegate
something to you. Danny and I, I need you to clean
up the warehouse and get it straightened out in a month.
No pictures, no discussion, no minions and Macs, nothing.
(18:33):
Go straighten it out like you'rea mind reader.
And a month later I come back out there and it's nothing like
what I wanted, if it's even starting.
So one of the other things in this list of steps of delegation
is a weekly meeting or breaking it up in multiple meetings so
that you're finding out you're not running through this over
and over again. And what happens is in the first
(18:55):
week. So Danny, how are you doing?
Straighten out the warehouse. He goes, oh, you know, I meant
to get started. But, you know, then I got on to
this project that happened. And then I look at him and I go
totally hear it. So now, Danny, you have three
weeks. Tell me how you're going to
catch up, because I'm not takingit back.
Yeah, that's. Some help or some other things,
but the point of this learning how to delegate is a very
(19:16):
important skill. But you can't delegate
everything you need to have helpthem understand what it takes
80% of the time to fill their box and then delegations done in
writing steps delegation. This process helps them and
helps you, and once the both of you get used to it, everybody
(19:36):
seems to love it. Awesome.
And then for trades companies that are just starting out,
because that's that's usually the bulk of companies.
I think it's, you know, only I think it's.
Actually a lot of older operators.
A lot of, a lot of them are under $1,000,000.
So who should be the first hires?
Like how? Because assuming they're fairly
small, how can they start to implement this?
(19:57):
Because I'm sure they're, you know, they, they might have
started the company recently or they're not seeing too much
success. So how can they start to
implement these systems and start hiring the right people?
Yeah. So there's a couple of different
paths to that. One is that you, there are other
owner operators out there in thesame boat as you.
And if they're 506070, by the way, I'm old, so I'm not age
(20:18):
Presidents, you're reaching the end as an owner operator because
your body is just talking to youin ways that you can't believe.
The work just wears you out. And so they're right to be
acquired. And there's a lot of different
ways to do that. But then they may still want to
work and you can scale and grow.But guess what you need is
marketing. Marketing is really the key
(20:40):
thing. So marketing is organic
marketing and acquisition. It's not one or the other.
And acquisition you're thinking of, you have to have tons of
money in the bank. It's not true.
These little companies that I'm talking about, they either close
the door, but there's nothing there so that you can work for
what we called LNA mailbox money, which is when the calls
convert, I'll send you a check. And so that's kind of the way
(21:03):
that it can be done. There's a spectrum of
acquisition that mixed with local marketing and referral
marketing and online marketing and there's a bunch of different
things you can use. But in marketing, it's a system.
Marketing is a written system that you have to have a
marketing plan or who no matter which marketing your vendor you
work with is absolutely going tobe sabotaged and you're going to
(21:26):
be bother blaming them and then the next one you hire will be
exactly is disappointing unless you have your house in order.
So marketing plan basically defines where you want to go.
What is your goal, all of its objective, Then what services
you want to do today, what services you might want to add
further up. Where does your describe your
target audience? Because you can say, well, I can
(21:48):
sell it to everybody and here's what I can tell you.
No, you can't. And what I was told by my
marketing guru so many years ago, say something to someone or
you risk saying nothing to everyone.
And I never forget that phrase. So in my case, I had a couple of
target audiences, but the way I,I looked at it and defined it in
(22:08):
this marketing manual was who isthe person that I love the most?
And if I had the power to clone,that would be my target
audience. And now I put it descriptively
so others can see the same thing.
Where do they live? What do they respond to?
What is, you know, they're ticking things, Where do they
hang out? Who is their referral marketing
source that I could even use? All of that really strengthens
(22:31):
it. And the reason why I start with
marketing, you're saying I'm already exhausted, I can't do
any more work. I get it.
But the question is, are you charging enough for that work?
And that's where learning how todo budgeting.
And if you don't know what budgeting is or you're not
understanding, you're not great at financial.
There are two books that are still great today and
contractors everywhere still read it.
(22:53):
It's Ellen Rohr ROHR, she was myCo consultant, your Co franchise
partners. We work together a lot.
Basically, it really takes financial from this sticky,
messy accounting thing that you're looking at and puts it in
plain English because there's a difference between tax
accounting and real world accounting.
(23:15):
Tax accounting is what your accountant does and their main
job is to keep you out of jail, let you know that where you are,
and then also, you know, to be compliant, which is all great,
but it does not help you run your business.
Real world accounting helps you run your business and every day,
every week, every month, you need to know where you are.
And so if it's not in the budget, and one of my great
(23:37):
customers said to me, I finally get it about budgeting, I go,
what do you get? He said, if it's not in the
gradient in the pie, it's not going to be in the pie when it
comes out of the oven. So this is where you put all of
your stuff into this budget. And so the book that I'm talking
about first and they're read in order, where did the money go?
And then her second book is how much should I charge?
(24:00):
The reason I'm going through that and tying it to financial
is this is where you create the money to fuel the gas tank for
the marketing because your car is not going very far.
Even if you plug in like I do for electric, if you don't plug
in, your, your electric car is not going anywhere.
The point of it is, is that you need listen to this carefully.
(24:21):
The best way I came to describe marketing and it is because of
my plumbing experiences. Imagine yourself trying to fill
a bathtub. You're trying to fill the
bathtub with the right amount ofcalls from the right customer at
the right time. And if the drain is wide open
because you can't answer your phones really well, that's the
CSR. But the goal is not to just fill
(24:43):
the tub. It's to overflow the tub.
Because once you have more demand than you can do well, you
get to decide what you charge, what work you do and where you
will do it and what you don't want to do.
But it also creates the pressureto move out of this owner
operator and start moving to oneto three trucks, 3 to 5 trucks
and anywhere else you want to go.
(25:03):
Hey, man, I love that analogy and I'm glad you brought up
marketing because this, this podcast is mainly about
marketing. So that's your, because you're
talking that is like kind of what we need to be looking at
initially of implementing marketing strategy in terms of
the seven aspects of the framework.
Would you say that overall, likeacross all the companies that
(25:24):
you look at even like $1,000,000multi, $1,000,000 companies, is
it mainly marketing that they struggle with or like what?
What is everyone missing here? It it, it comes in all flavors.
So let me just stretch again. Planning, power operating, power
staffing, power sales, power sales, coaching, marketing and
finance. Many of these companies have
already grown. They got great referrals.
(25:45):
Customers love them. Depending on where they're
operating, it'd be a lot of depending on how much
competition they're banging their heads against and what
they do. So some of them really don't
know what to charge. What I was just talking about,
they don't understand the financials.
And they think that, well, I'll just bring in a, you know, an
accountant and they'll make it all work.
And the answer is not likely. You're just going to make it
(26:06):
more complicated and they're certainly not going to get you
the real world budgeting. The other thing is if you don't
know what's going on with the money and you don't have to do
the work, but you need to know that you can trust and verify
what your accounting team is giving you or it's only a matter
of time before they take your money from you or become your
unwanted partners. And that's fortunate.
(26:27):
It's a very sad, often repeated story.
So that's another reason why those books that I talk about
with Ellen are really helpful. You're always going to be in, in
my work chart, you're actually the financial manager.
You're also the marketing manager because if you don't
take hold of the marketing manager box, anybody on the
marketing team is sabotaged because you don't have it.
(26:47):
So this marketing plan that I was talking about really comes
down to the next three elements is marketing budget, which
typically is a percentage of sales.
And you're not even aggressive until 10% of sales is going to
marketing. And then you have to define what
is marketing, what's not. So for example, you want to put
a beautiful wrap on your truck. Is that a truck expense or a
marketing expense? And it really depends on what
(27:10):
you call it, but ultimately thatstays in that column.
And then the next thing is what are your three main drivers or
three-way, three main ways you go to market.
There is only a billion ways to go to market, but if you just
spend all a little bit of everything all over the place,
it's a shotgun approach and nothing's going to get hit.
So what are the three things that are going to give you the
gross sales you desire and the gross profit?
(27:33):
And the last one, they all missed any because I missed it
as well. You're busy, busy, busy.
And all of a sudden the phone goes dead.
And there were times I picked upmy own phone to go, what is the
phone broken? Really?
We were so busy that we forgot that we have to always be doing
marketing. So marketing calendar is you
populating through the backwardsthrough the year, what
(27:56):
activities you must be doing. So example, if you wanted to do
an oversized postcard campaign, well, you have to get a
testimonial. And testimonials are very
critical to any marketing, even SEO marketing, which we were
talking about. If your brand is not great, if
you're not responsive, you don'thave the Google five star
reviews, you're not great on allthese other things.
(28:17):
Customer testimonials is what makes all marketing better.
I mean all marketing better. And if you don't think that's
true, I travel all over the country and I was in Canada and
places like that and I used to ask the owner like where should
I eat? And then I stopped.
I just go to Yelp and I'll watchenough reviews, get a good sense
(28:40):
of it, go to Google, I'll figureit out.
And you do the same thing. So guess what your customers are
doing. That's why you need to get great
customer testimonials Augment. Love that.
Something that I'm collecting here is that it seems like just
overall, kind of just as a general principle, you have to
(29:02):
be an avid learner. You have to especially like
across these 7 fields, you have to just learn about finances,
find the top people, learn, you know, read their books, watch
the podcast that they're on. Like you just need some
foundational knowledge in each of these fields.
Otherwise it's like you don't know who to hire.
Like how can you hire someone for that role or how can you
(29:22):
make systems around it if you don't know anything about it?
It's true. And I think the thing that I
want to be clear is because you mentioned it before, I worked
with some great companies like Tommy, but also other great
companies. There's nobody that's a 10 out
of 10 in all of those, but you cannot be a zero in any of them.
(29:43):
That's really the difference. And then you have to be compared
now reading a lot, podcasting a lot, there's tons of information
on the Internet. And now, of course, to make it a
little more interesting, there'sAI information which is both
good and both bad and it's been from day one on the Internet.
The question is, are you listening and following a genius
(30:03):
or an idiot? It's really hard to know.
And so that's where there's multiple people attest, again,
testimonial to the, oh, I did this and it's great.
These are things that point out the better direction.
I would say to be careful because it's easy for you to
pull a piece from here and a piece from here and a piece from
here. And the analogy I use is that if
(30:25):
I gave you the power to create your dream car, would you have a
Ford chassis, Toyota engine, Hyundai seats?
Of course not. But that's what we do when we
build our businesses or we're going to pull pieces from
everywhere. You have to have this framework
and then you have to judiciouslypick what pieces fit so that
(30:46):
we're not making this jalopy rather than a dream, dream car.
Yeah, absolutely. No, that that's why I like
running the podcast and interviewing experts like
yourself is that one of the manybenefits I see from it is that
I'm pulling consensus across thepeople that I interview.
So it's not just oh, well, Al Levy said this, so I'm going to
do it now. It's not like a knock on you,
(31:06):
but like I want to, you know, almost like the trust but
verify. I want to hear from all the top
people. It's like Ding Al said it,
Tommy's saying it, Brigham saying it, like everyone says
this. OK, I know it's true now.
Maybe, yeah, just if just one person says it, but everyone
kind of debates on it, then, youknow, maybe be a little bit more
hesitant there. That's that's true.
I think that's a pretty good wayto kind of say that everyone
(31:28):
tells you that you're not going anywhere without a written
marketing plan. And other than me just saying it
right here. And if you don't put the
elements that I was talking about in it, it's still not
going anywhere. And if you don't execute things
like the, again, the marketing budget, the three main drivers
and then the calendar, I'm sure,you know, there's people out
(31:49):
there, they may express it differently, but I know that it
is. And you never have to take my
word for anything. Number one is I've already done
it myself. So it's not like, oh, you know
what, this is a good idea. Let's see if Danny will have
success with this. The other thing is I've worked
with contractors for two decadesand their success stories are
all over the page on my website and in my programs and things of
(32:12):
that nature. I never asked any contractor to
be a Guinea pig to something that you know is you want to
know. OK, who else has done this
besides myself? Absolutely.
Well, relating to success stories, this is a great
transition. That's arguably your top success
story, or at least maybe the most well known is the the Tommy
Mello story that he came to you or he had you on his podcast and
(32:36):
you guys ended up being the samecity.
Talk to me about how you originally met Tommy Mello and
what that was like implementing your systems and such for his
business. Yeah.
So it was 2017 and I was still doing 1 to 1 consulting and
Tommy just starting his podcast and I was one of the first
guests and he called me to before we're going to go live.
(32:58):
And I looked down at the my phone and it's my area code and
I go, So where do you live, Tommy?
He goes Phoenix, he goes, where do you live, Al?
I go Phoenix, he goes great. When we're done, we'll have
lunch together. So we have lunch together, we're
talking and then he hands me hisbook and he goes, I want you to,
you know, do me a favor. Would you read this?
Be brutally honest. They go, well, don't give me the
book if you don't want brutal honest because I will tell you.
(33:21):
And then I met back up with themand I go, this is not a book,
it's a ransom note. It's just so all over the place
said you need her editor. So I gave him the same editor
who would help me with my book. And then he said, great, you're
hired. I said hired for what?
He goes all I need everything that's in your book and what
you've talked about at my shop. He said we are 15,000,000 in
(33:43):
sales and we're losing money every day.
So my first job in 2017 was to get them to break even and then
from break even to start making a lot of money.
And then we're at we're startingto rock'n'roll.
And Tommy comes to me one day and says early says we're going
to be 100 million. And I had already known Tommy
and I go absolutely no doubt that we will.
(34:04):
But the, this time when we buildit, it's not going to be chaos
because you're had been relying on people to magically solve the
problem versus systems that people learn so that they can
scale and get the system to where it is.
And the, you know, today is probably 230 million in like 19
states. The real test of systems is when
(34:28):
you can expand beyond your main hub shop to other locations.
So in my case, we had a main hubshop and three satellite shops.
And they the way we learn how tomake it run is you need these
kinds of systems that people aretrained on, not just go find the
magic person who makes it work. Interesting.
Yeah, OK, that makes sense. OK.
So when you are expanding locations, it's starting to
(34:50):
really grow. That's that's the actual test
because it's I would assume I haven't done it myself.
That's the acid test to how goodyou know what it is.
Yeah. Matt Rachman be running a
workshop on that real soon. Awesome.
Because I think so many people are really awful at it.
Yeah, no, I'm, I'm sure. So talk to me like, let's get a
little bit more practical here. What?
(35:11):
Like what actually changed in his business?
Was there like one thing out of place?
You know, was it his finances? Was it everything?
Yeah, you know what it was all of the things along the seven
powers except 1. He was already good at sales and
he was pretty good at marketing.But it was marketing was just
like wake up, fall out of bed and mixed.
Hottest thing. You know, if you throw enough
money at it, you can get away with it, but you will go broke
(35:34):
in the process. So he did planning, operations,
staffing. We didn't do sales because he
liked the sales system. We did marketing and then Ellen
did the financial and the rewardprogram with him.
And talk to me about like the transition there and like what
was. Started with all my 1:00 to 1:00
(35:54):
clients would be planning power and planning power is really all
the projects and habits that every one of your people in your
company have in their heads thatyou have in your head is just
like be like. And, and I watched Tommy do it
like every other contractor. He's walking down the hallway
and he goes, hey, Danny, would you take care of this?
(36:15):
So it worked. Tell them it was not delegation,
it was dumping. And I know because that's what I
used to do. And I said, you're not going to
like what happens. And he says, I don't, well, then
we need a plan. So think of it as a funnel.
The top hundred 3550 projects and habits you want to get done
in the next three to five years,they go there to live.
(36:36):
So every new idea and if you're listening to this podcast and
you're thinking, well, I'm goingto get done with this right
away, well, where does it fit inthe priority?
So it comes down the funnel witheither fixing your biggest
problem, challenge or greatest chance to grow and be
profitable. And it gets to the top 30.
And that's what you will do in one year.
And then no one can work on 30 things at one time.
So you take the same strainers, fix the biggest problem,
(36:58):
challenge the greatest chance ofgrowing profitable and get down
to your top five. And the top five is your promise
to yourself and to your company because you put it out there
where everyone can see it on a whiteboard to this day, yes, I
know you can digitize it, but that's not the point.
It's out there for them to hold you accountable.
So on the board, it's what is itthat we're doing those five
(37:18):
things? Why are we doing that?
And then where's the status? And if they see no activity,
your team knows same old thing. Because what you do every day
is, you know, I really need you to work on this thing.
You know what? The next day you walk in and go,
I know what I said yesterday, but this is really important.
So pretty soon your team learns to stand still because whichever
(37:39):
way the wind blows is where you're going next.
That is the essence of getting you to work on the right project
and have it at the right time inthe right way.
So that's what got him on the right track first.
Then it was the org charts, the manuals, the training that goes
into that. Then it was how can he stop
trying to find willing techs with great skills because
(38:01):
there's only so few of them. And they were really telling him
what they would and wouldn't do and they were messing up and he
wouldn't fire him. So I said, yeah, because you
don't have your own farm team, which is taking willing
apprentice with no skills to willing techs with great skills.
So we took the manuals, built the right hands on training
(38:22):
center, which was modeled on theones that I've created, got them
to be better trainers in house, learning how to train right,
training curriculum for it. And that's really the flywheel
effect of being able to take apprentices to junior tech's,
junior tech's, senior tech's. And then as you grow and hub
out, you need field supervisors.But they're not guys you
appoint, they qualify, they compete and they train.
(38:45):
So that's staffing. And then from there, sales.
My sales process was 5 steps. They had their own.
That was 8. And then there's marketing.
And if you're not good at sales,I'm going to tell you right now,
your marketing is compromised. Why do I say that?
Because if you don't know what makes your ideal target audience
(39:07):
tick, how can you sell to one 100 or a million of them?
You can't effectively do that. So the better you are at sales,
the better you are at marketing.They kind of reinforce one
another. And then marketing, as I was
discussing before about a systemin writing, really taking the
stuff to work this all the way through.
(39:28):
That's kind of the necessary things that I was being doing.
Financial was Ellen getting you to do real world budgeting so
that you knew where you were every day, every week, every
month and quarter. That's what you did.
Sales coaching is basically a fancy name for your reward
program. And ultimately there's three
ways to pay straight hourly salary, which is what I was born
into with the union. And you got more money the
(39:48):
longer you were. And I broke that up to where you
got paid, the more you could do.Even then it was
dissatisfactory. So we went to the second pay
system, which is salary for whatyou do.
And if you bring the jobs in on time, there's money built for
going above or you can sell and do more money above.
So that's the nature of that second one.
And the third one, which is popular now, pay for performance
(40:12):
where people think, well, I don't pay you if I if you don't
perform. And the answer is no.
Yeah, the government wants its money, and it's very different
everywhere you operate and how you operate.
So don't go with a loan here. And if you're going to go down
to pay for performance, you really need a good HR person to
(40:33):
know what it takes to be compliant.
And here's the bad problem. Sounds bad.
The government may not catch up to what you've been doing for
two to three years. And once they do, the penalties
are going to rack up like you can't believe.
So you want to make sure you're always staying in compliance.
Yeah, definitely. Wow.
OK, so you basically changed around everything in Tommy's
(40:54):
company, it sounds like, besidesthe sales.
And that's crazy because a lot of people in the space look up
to Tommy and they think he's like a genius.
And not saying that he isn't, but just, no, he's yeah, he's
very smart. He's a genius and, and an
incredibly hard worker, but he'salso, he was really unfocused.
(41:15):
Yeah. And I'm not saying anything that
he hasn't said publicly over andover again.
I really had to get him to sit down, put his phone down.
And I threatened to walk out on him.
Literally. I I told him, put your phone
away. It was a bucket that we were all
doing. And finally I just got up and
said, I'm leaving because where are you going?
I said, I told you to put your phone away twice.
(41:36):
My time is valuable. If you're not going to spend
time with me focused on this, I'm leaving.
And to his credit, he put his phone away and we got down to
work. Dang no I I was not trying to
badmouth him or anything I was just saying that like everyone
looks up to him and even there were so many problems with his
business so I'm sure with other people's it might even be.
(41:57):
Worth it made him great. Danny though, it's not that.
His business from day one was perfect and nothing ever has to
be changed. He knew it was broken, but he
wasn't going to stay broken. Wow.
Yeah. OK, so, so I guess for those
bigger companies, so we're actually because I'm, I'm just
trying to think about this from like a full, full perspective
(42:17):
because we talked about the smaller guys, but it's the same
issue with the bigger guys there's they don't have anything
unlocked either. I've worked with the small.
One of the smallest companies typically was when I was doing 1
to 1 consulting. It was a chimney guy up in
California. And when I say small, he and I
(42:38):
were working at his dining room table.
His wife was playing with the grandchildren next room over,
and she was the accounts payablebookkeeper.
His best friend was in the garage being the CSR and
dispatcher. And he had one tech, his son.
We scaled that business to be 12techs, 2 locations, and he sold
(42:58):
it. So yeah.
And it's the same systems that there's a condo builder of
85,000,000 works same idea. I, I love what you're talking
about earlier of relating it back to an exit.
And really it seems like over the course of what you've been
saying and what, what I've listened to you off of this
podcast is that you have to be avery long term thinker.
(43:20):
When you are hiring people, you are creating careers, you want
them to be with your company forever.
When you are building your company, it's not just, OK, how
can we survive the next month, but how can we hit that crazy
exit or how can we pass it throughout the family?
So you need to be a much longer term thinker.
And I, I want to go a little bitdeeper on that, you know,
exiting and such with your company.
(43:41):
What, what have you seen in terms of that, that you get like
a higher multiple or there's just less stress or it's more
attractive to investors? There's there's no shortage.
Depending on where you're hanging out, you're going to
hear about all these phenomenal numbers from PE companies.
They're not interested in owner,operator, one to three truck,
three to five trucks. Frankly, you're probably not on
anybody's radar until you scale to about 5 million, if you're
(44:03):
talking that way. But there are other companies
out there that might be interested.
As I mentioned, you could be theacquirer, but there's sometime
you can choose to to exit and sometimes you can do employee
buyouts like Ellen did with her plumbing heating company.
The the employees bought the company from.
There's a lot of different ways to go, but nobody wants your
job. They want to buy a company, they
(44:26):
don't want your job. So you have to, you know, make
it run without you being the thing that makes it all work.
That you are running the business.
The business doesn't run you. Right.
Yes. Yep, sorry.
I I remember hearing you say that on a podcast.
It's so true. And also the thing of.
And and don't be, don't be deceived by scale because we
were 17,000,000 already and you think because you're big no,
(44:49):
that business was just more gasoline to a fire.
Yeah, that's what I was, that's what I was getting kind of
confused by because I do talk toa lot of these small business
owners. A lot of times it's pest control
guys and I, I just know they're like all over the place.
They're they're managing everything.
It's fires all day long. But I would think that the
company is 1 to 10, even like 20-30 that they've kind of got
it dialed, but no. All that they have is the
(45:12):
ability to throw more bodies in front of an oncoming bus that
will never stop. Sorry for being morbid, but
really, that's the best example because that's what I felt like
We were just taking people off street, just throwing them from
the bus to slow it down, not stop it.
And we never got to stopping it until we created this, you know,
(45:33):
foundational pieces, got people trained up, and then we could
really turn on building our own staff from scratch instead of
always trying to rewire people. Yeah, it's exhausting.
So I'd like to get actionable here, like after someone listens
to this podcast, what do they need to do?
They need to read your book. They need to read Ellen Rohr's
(45:53):
book. Like what can they implement in
their business? I.
Would say, yeah, my book, it's avery short read.
When I worked with my editor, I,I had already been writing for
years and years. And she goes, well, why do you
need me? I go, I have 250 children in the
audience and they're all tellingme to pick me.
I said that would be a mess. But more than that, I only want
(46:14):
to have a book that a contractorlike myself, because I'm not a
fast reader, could read in two to four hours.
But the goal would they would read it over and over again and
absorb more and more as they go.So that's how it's designed.
And that is the Seven Power Contractor, which is on Amazon
paperback, pretty easy read e-book.
And if you like this voice, it'sinaudible.
(46:37):
So yeah, there's no excuse not to do that.
Ellen's books, if you want it. And I reckon before you go out
and get somebody on your financial team or you have
people on your financial team, go read those two books and read
it in the order. Where did the money go and how
much should I charge? And remember, it's ROHR.
(46:57):
It's a lesson and. Then there are other books.
Any other resources? Oh, there's a ton of them.
Look, I still think Good to Great is a great book.
One of the shortest books that always goes people don't get who
move my cheese was one of the things about change because all
of us struggle with change. Your employees struggle with
(47:17):
change, you struggle with changeand I still keep it above my
desk. I have a thing.
It's like Asians for those you could see it's still here
because it reminds me how much am I adapting and changing and
flowing with the change that goes on.
So without confusing you with anincredibly long reading list,
(47:37):
these short, well written books are really a good foundational
piece so that you're not just all going to read and read and
read and read and read. OK, well knock yourself out.
But then what you will have doneis give yourself another 8
billion ideas. Yeah, definitely.
And to to close off the show, Aland by the way, great
recommendations. I'll make sure to read those
(47:59):
books to close out the show. I'd like to give you the stage.
What is your like, definitive message to these local business
owners that you know, they mightbe starting out or they might be
trying to grow? What is your message to these
business owners? You can grow big.
It's, you know, there's ways to do that, but really the idea of
(48:21):
just growing big without being systematic is an invitation to
chaos. It's basically going to end up
like all the others, which is anuncontrollable fire that you
keep putting gasoline on each and every day.
So when people ask me when is ittime to put systems in place,
the answer is what I was told years ago by my friend Ellen,
(48:42):
which is she asked me one day I she says to me, when's the best
time to grow an oak tree? And I go, I'm from New York
City, so we don't know from oak trees.
So why don't you just tell me Ellen?
And she goes 10 years ago and today because if you don't plan
it today, 10 years from now, you're going to wish you had.
So that's really my answer to that.
(49:03):
And then be you have. Once you have a structure, then
you can start judiciously addingpieces to help yourself grow.
Amen. So start implementing those
systems today. Go get Alice book.
Go get Ellen's books, go Start learning, get that foundational
knowledge that you can apply allof these different 7 powers.
(49:23):
Al this has been an absolutely great podcast and I, I love the
way that you think about things.I feel like very few people are
thinking so systematically and it shows because all of these
home services are made, made. All these home service companies
are majorly struggling with the systems.
And I see it myself. I'm I'm more so on the marketing
front, but still they're more marketing.
System, just like you heard me rattle off before.
(49:46):
Don't delude yourself. It's, it's a complete mess.
Every single company that I walkinto, even the ones I I've, you
know, done some consulting with $100 million companies and they
still don't have a dial. So this is really a big
opportunity for all these businesses.
And it was an honor to talk to you, Al.
So to close this off, where can people learn more about you find
you on? Social media, best place to go,
(50:06):
Danny, is to my website, which is the #7 Power contractor.com
#7powercontractor.com. There's a lot of information.
I've been writing blogs forever.You can search a lot of it.
You'll get some really good information.
There's videos, there's things of that nature.
It's all free, Jumpstart guides free.
And if you're interested in products beyond the book, then
(50:26):
click on the product page. You'll see the two main
programs. Signature Operating Manual
system is where you start. And then that leads you into the
second program, if you're interested, is Signature
Staffing System so that you too can take willing apprentices
with no skills to willing text with great skills.
Awesome. So definitely go there. 7 Power
contractor.com that will be in the description below.
(50:49):
And then where can people connect to you on social media
and anything else you'd like to plug out?
Yeah. So, yeah, if you want to reach
out directly to me on my page, there is connect with us, you
can do that. And so that's a really good
place. I am out there on social media
because everybody wants to listen to an old guy come on and
on, but no actors. Trust me, I only, I'm not
(51:10):
putting pictures of my dogs and my kids or anything else of that
nature. It's all about what I've learned
along the way. That's what I share on my social
media platform. So either is Al Levy or Seven
Power Contractor. I'm primarily Facebook, not a
lot on Instagram. And so those are really the the
big places to go. Awesome.
Well, thank you so much for sharing your information
(51:32):
throughout the industry and particularly on this podcast
today. It was such an honor to have
you, Al. And yeah, thank you for coming
on. Thank you for the invitation.
Appreciate it of. Course.
Host
Danny Leibrandt
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