August 27, 2025 • 39 mins
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I sat down with Wrex Lindsay to talk about one of the best opportunities I’ve seen in a while, the subcontractor model in home performance. What makes this so interesting is you don’t need a crew, a big shop, or tons of experience to get started. You can dip your toes in with simple offers, use subs to handle the work, and still land high-ticket jobs worth $10K+. Wrex breaks down how this model can scale to $1M a year, why the timing is perfect to get into this space, and how anyone can take advantage of the opportunity.Connect with Cozy Pros on Instagram at https://instagram.com/cozypros and on Facebook at https://www.facebook.com/CozyHPS.
Enjoy!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Using the subcontractor model, you can make over $1,000,000 a
year of net profit. Yes you can.
The fastest way to start making some good healthy profits is to
subcontract. It insulation machine and all
that. You don't even need to own that.
No, they have their own equipment.
It's a 30 minute install, but you can sell those for $1200.
If we focus just on every home selling in a scrubber, we could
(00:20):
sell a million a year. OK, now we're talking.
There's a lot of money in ductwork if your toe in the
water with duct binning and it could branch into to something
where now how you're looking at $10,000 tickets.
Our average ticket is right around 10 grand.
You're kind of selling fear a little.
Bit right, Yeah. It's energy savings, comfort and
indoor air quality all together.All right, you asked and I
(00:46):
answered. Every month or so, I e-mail out
a poll to my newsletter with about 30 different niche
business ideas, opportunities, etcetera.
And I ask you guys, what should I dive deep on?
What do you want to learn about?And over and over you kept
voting on vent cleaning, insulation, ductwork.
I don't know why, but you guys wanted it and so I brought it.
(01:07):
I have a friend named Rex. He lives in Phoenix and he has a
7 figure insulation slash vent cleaning slash home performance
as he calls it business. And if you liked my forestry
mulching episode a month or two ago, you're going to like this
because it's just as tactical but a different vertical.
What's his Facebook ad strategy?How much does it cost to
generate a lead? What types of markets do these
(01:27):
businesses work best in? How to find subcontractors in
unique places to do all the hardwork for you.
What your offer should be, How you should charge, What angles
you can take within the home performance industry to start a
business that doesn't cost all that much money.
This episode is jam packed with all that stuff.
Please enjoy and share with a friend.
Is insulation your big kind of money maker?
(01:48):
So insulation removal and then obviously re insulating, I mean
we're both those services we're at over a million on, on the
year. And then duct aero seal, duct
sealing is our third biggest. So, but naturally we're going to
get up in the attic, we're goingto see how old their AC unit is,
and then that's when we'll come down and sometimes offer a new
(02:11):
AC unit. Are you using like tools to see
if like cool air is leaking out in the attic and like infrared
stuff? Yep.
So all of our sales Rep have theinfrared cameras and.
I love stuff like that 'cause it's, it provides such a perfect
visual. And you're like, listen, don't
listen to me, Just look at the data, you know, show them the
picture of, like, the glowing red and yellow.
And they're like, Oh my, they just see like their money, like
(02:32):
burning up. Yeah.
Right. So we do.
Every single one of our sales guys has an infrared, even our,
you know, project managers and stuff have that.
We'll have them turn on the AC unit right when we get there or
the heater depending on the timeof year.
And then we'll go get some images of the ductwork.
We'll even pull aside some insulation and we'll see through
(02:53):
like their Cam lights and some of the areas of their leaking in
their attic. We'll show them the thermal
imaging of that as well, so theycan actually see like the cold
air coming up through their house, right?
Or the heat coming up through their house into their attic.
So help people understand how their house is leaky and how we
(03:14):
do grow up nice and tight and save them.
So what is like an average prescription look like, you go
in there, you go to an average attic, not too crazy either
direction. What do you prescribe them?
What does it cost them? What does your margin look like
on something like that? When we go to a home, the most
common thing that we do and we push it right is removing all
(03:35):
their insulation so that we can seal the attic, right.
So we'll come and seal up all the leaking areas of the the
attic. Once we have all the insulation
removed, we're going to add R49,which is about 17 inches of
insulation. OK.
And what do people usually have?How much of an upgrade is that
typically? So here in Phoenix it's the
average home, probably has 6 inches of insulation.
(03:57):
Pretty much every house here hasold cellulose insulation, which
is like made of cardboard and newspaper.
That stuff gets breaks down. So they when they process that
insulation, they have to add fire retardant to it.
And especially here in Phoenix that that fire retardant like
activates with the heat. It starts basically
(04:18):
disintegrating the insulation when settling.
And so you'll get up in attics, it's super dusty.
It's it's gross acted. So we'll remove all of that.
We'll seal up their attic will add a lot more insulation than
what they had and then a lot of homes, almost every ticket that
we sell has some sort of duct sealing.
Most, most of what we do is aeroseal.
(04:40):
You've heard of aerosol, right? I haven't, no.
So Aero seal is it's cool. It's a, it's a technology that
you block off all the registers in the house and then you, you
hook up this machine to the ductwork and this machine turns
this sealant into like an aerosol.
And so you're basically you're pressurizing the system, all the
ducts, all the vents are blockedoff, you're pressurizing the
(05:03):
system. And so when you're sending that
sealant through the duct ductwork, it's not coating the
ductwork at all, but it's that those little air sealant
particles are traveling through the air and they're going out
the holes and they start accumulating out the holes and
sealing up the ducts. Interesting.
So it's the best way to seal ductwork.
(05:23):
It's it's a lot more expensive than sealing it by hand.
It's going to get all the cracksand holes and even the the
little holes that you can't see.It kind of reminds me of like
the fix a flat right? You spray it in your tire and it
just. Yeah.
So that's kind of the a lot of people relate to the fix a flat
concept or they, they have a certain product like that to
(05:46):
seal up a radiator. So a lot of people relate with
it that way. They.
Oh, OK. So that's like the more
expensive version of like manually like taping, but it's
more effective as well. Correct, Yeah.
And we and we really build a lotof value in Aerosil.
In fact, Aerosil consults with us a lot 'cause we we're kind of
one of the only companies that'sbeen able to figure out cause
(06:09):
cause a lot of people that sell Aerosil, it's kind of an add on
service to what they're already doing like and I guess that's we
kind of do that too, but but we will go sell Aerosil on its own.
It's like a main course for you guys.
Most people treat it like a sidedish or an appetizer.
Correct. So Aero still likes to to pick
(06:29):
our brain a lot on how how we'reactually selling Aero so long
because a lot of the companies that sell it don't know how to
do that. Right now.
So you go into an average house and what do you usually quote
them for? Just an average job.
Our average ticket is right around 10 grand.
OK, what size house might that be?
3000 square feet. The average home is probably
(06:50):
about 2000 square feet. Usually that includes removing
insulation, sealing up the attic, adding R49 insulation and
then sealing the ductwork. And a lot of times they'll
include a a duct cleaning as well 'cause we package that with
aero seal. So 10 grands are cash value
'cause we use a lot of financingand financing has fees and that
(07:12):
added to it. And so we strip that out and we
want the true cash value of thatjob.
With the fees, we're probably closer to 11 grand.
OK, I got to think that taking all that insulation out is just
a pain. Use like a massive vacuum.
Yeah, just a big. Like just like this big around
and. It's a yeah, the, I mean, you're
looking at a six inch hose, at least 6-8 inch hose.
(07:35):
And you know, the one we're using right now is a diesel
vacuum. It's got tons of horsepower.
I can't remember how much wood it has, but but yeah, I just,
you just go start sucking it out.
Yeah. Do you have to like dispose of
it in a certain way or can you just toss it?
We just take it to the landfill.So.
(07:55):
And there are some landfills that, you know, don't like to
take it, but we know all the ones that will take it.
And so when we end the job, we'll head over and dump it.
And are you replacing it with blown in insulation just like
the Snow White stuff? Yep, that's what we do.
That's blown fiberglass. We can do foam, spray foam.
(08:17):
I have some, I have my own issues with spray foam.
It's it's a great insulation, but there's some downfalls to it
too. And so most of what we sell is
blown fiberglass. So on a $10,000 job, how did the
unit economics breakdown on yourside?
Like what are you allocating to overhead versus ad spend versus
COGS, labor and all that? So 10% ad spend is kind of what
(08:40):
we factor of our revenue. We want to keep, you know, ad
spending to about 10% or less. Commissions, same thing we pay
about 10% and then overhead we want to keep around 10% as well.
So we have 50%, it's actually like 52% margins of all of our
products. We want to keep 15 to 20%.
(09:02):
Well, that's all said and done. So 52% gross margin, 15 plus ish
net, yeah. Our target's 20, but we're
satisfied with 15. Yeah, yeah, 'cause you got to
pay aero seal, you got to pay for the the insulation, you got
to pay labor, your insurance probably isn't probably a
(09:23):
substantial. It's not cheap.
Insurance is not cheap ever. Yeah.
So, you know, and, and, and sales commissions with overrides
and everything, we're about 12% there.
That's where the 52% margin comes in when we pay out all
commissions. And then, yeah, on a, on a
really bad month with our ads, we'll get 8 or 9X.
(09:46):
But on a good month, we'll get 15.
Yeah, we'll get 15. It should put your net closer to
20. Yeah, last month we were at 15X
on our. Nice.
So what is like a big job, like a really good profitable job
look like for you? We've done jobs as high as 30
grand. Is it usually bigger homes or
homes with more issues, more leaking?
(10:07):
A. Little bit of both, right?
So single level homes like your house, that's going to probably
be a pretty big ticket because it's going to have a big attic,
right? So there's more square footage
to, you know, two-story homes. They don't have as big of
attics, so there's not as much square footage to to remove or
to replace. Where we make it up with
two-story homes, though, is mostof the time they have multiple
(10:30):
AC units. So we'll get 22 duct seals out
of it rather than one. So we'll make up a little bit of
that on, on the two-story. Some of our sales reps they sell
air scrubbers, they sell duct cleaning, they sell HVAC unit,
you know, and we'll get big tickets.
I mean, we've, we've, we've had jobs where we, they've needed
(10:51):
everything and we, we've had jobs over 30 gram, 40 gram,
yeah. You know those are those are
always fun jobs to to do. What are air scrubbers?
It's a simple install this, There's a lot of money that you
can make in air scrubbers. So it's a device that goes and
you can install it on the supplyside or the return side.
So all your AC units have a supply side and they have a
(11:12):
return side, but it's just a little device that has like a a
cell that goes into it. And so as air's passing through
it, it's basically ionizing or atomizing the air and it's
charging all the and as it comesout the ducts, it's goes and
attaches to all the dust and pollen and.
(11:32):
Allergen. So it's like an like an
electronic air filter, like a high-powered air filter.
Yeah, and I mean, it'll kill viruses, it'll kill mold, it'll
kill so but you just put it intothe into the plenum sealed up
really good and plug it in and it's it's a 30 minute install,
but you can sell those for $1200.
And what's your cost on that? $400.00 for the product and then
(11:55):
$50.00 in labor. Yeah, Dang, you just plug it
into the wall as long as there'san outlet up there.
You can plug it into the wall, that's an option.
Or you can just they make these adapters that will plug into
your the actual area. And on that one that's kind of
like a pest control cell you're,you're kind of selling fear a
little bit. Yeah.
Well, and especially with with there's a lot of people out
(12:16):
there that have asthma or, or they're just bad allergies.
And so a lot of that's coming from their attic and their
ductwork. So by putting one of those in
there, it's gonna help a lot throughout their home.
So I have two installed in my house.
How much business do you do of that per year of the air
sealing? Air scrubber we have.
(12:39):
Air scrubber. Yeah, we're at year to date
56,000. Dang, OK.
Is there, is there a business tobe had of someone just doing
that like that alone, driven by Facebook ads door to door, what
have you? I believe so, yes.
Yeah, no, it's a big issue. A lot of people especially, I
mean, if, if there was a couple,if there was a good thing that
(12:59):
came from COVID, it's people's awareness.
Awareness. Allergens and viruses and things
like that. There's a big health push in, in
our culture, you know, a lot of it's fitness and food and toxins
and stuff like that. And so that helps drive the need
and the want and the desire for the air scrubber for us is kind
(13:21):
of an afterthought. It's kind of a side dish, a
little bit of an appetizer. If we focus just on every home
selling air scrubber, we could sell a million a a year.
OK, now we're talking. I don't think people are going
to start caring about toxins less, right?
I see that as only growing. Have you heard of those
companies that come in and they'll like diagnose your home
(13:43):
as far as like toxins are concerned?
Like they'll look at the air quality and then they'll give
you like they may charge you like a few 100 bucks and then
they'll give you like a, a laundry list of things to fix.
Do you work with companies like those?
Do they refer business to you oris that still pretty early?
That's still pretty early. We haven't worked with any
companies like that. And I don't know, I don't know
of any companies here in Phoenixthat do that.
(14:03):
I'm sure they're all. But I know a guy in the UK doing
it really successfully. Yeah, it's a big business.
Just the air purification industry is several billion
dollars a year. It's like $10 billion a year
just in the US So there's a there's a lot of money to be
made just focusing on air quality.
Can homeowners install those themselves, like if they were
(14:26):
handy enough? Or is it pretty technical?
Yeah, they definitely can install themselves.
So it's a simple install if you have any sort of low voltage
electrical knowledge and, and you know how to cut a hole and
patch it up and seal it up nice and you can install yourself.
So, and the nice thing about that business just just in the
(14:49):
air scrubbers is there is a reoccurring revenue, you know
side of it because those cells that are in that air scrubber,
they'll last two years, 2-3 years.
So you can go and sell them a new cell every two to three
years. You can sell them whatever you
want every two to three years. You get your foot back in the
door every two years. Yeah, there is a good business
(15:11):
if and I've I've thought about just starting a business that
just focuses on ductwork and airscrubber is going to be like a
really it was going to be one ofthe main courses of that
business. All right, so for a 2000 square
foot home, 10 grand, what kind of monthly savings could the
homeowner expect? Like what would their power bill
go to roughly? So according to the Department
(15:34):
of Energy, if we're doing like the whole package, they can
expect 25 to 30%. But we've had homes where I mean
the attics are just completely, I mean no insulation or half
their attic that has 0 insulation, their duct works
disconnected. Those homes were going to are
going to completely transform their lives, right?
(15:57):
We love those homes because, yeah, it's going to make a
massive difference. They're going to feel it like
the the next 10 minutes after it's done.
But 25 to 30% on a typical home,on a lot of the older homes, you
can get probably more of that, more than that.
We don't, we obviously we focus on energy savings.
(16:19):
That's a that's one of the benefits of doing this.
But we look at it from a holistic, hey, you want to be
more comfortable, you want to have even temperatures, this is
your home, invest in it, live inyour home, be happy in your
home. No one wants to have a home that
has a room that they don't want to use because it's
(16:39):
uncomfortable. So we're, we're really focusing
and then the health aspects of it.
So it's, it's energy savings, comfort and indoor air quality
all together. And that's the value that we're
selling, right. So it.
It took me so long to flip that switch in my brain because I'm
inherently cheap. And so I would like keep the AC
at like 77 in the summer. And then one day I was just
(17:03):
like, what are you doing? Like this is miserable.
Like you're going to spend an extra 40 bucks a month to be
comfortable. Like is that I think that's
worth it. But.
That's so when we first moved here to Phoenix, I tried to live
that way the first year. And I told my wife I was like,
if we're going to stay here in Phoenix, I'm going to pay
whatever power bill I need to pay.
(17:23):
Just be comfortable. Yeah, I don't care.
On a 2000 square foot home, what's an average like summer
power bill in Phoenix? 4 to $500.
So they can save 2200 hundred 5200 bucks, right?
Yep. So they'll get that money back
in four to six years, give or take.
Yeah, there's a lot of tax rebates.
(17:44):
And so I mean, the the tax credits going away after this
year, but a lot of utilities aredoing rebates.
So one of the utilities here in Phoenix is it's called SRP.
They get $400.00 just for duct sealing and then they'll they'll
give $600.00 for insulation. And there's other little rebates
(18:06):
they give as well. So we we take advantage of those
as well. So yeah.
All right, you know, I'm always talking about data.
The numbers that actually matterbecause you need data to grow
and you need to grow to make real money.
Beehive is the newsletter platform that I've used for over
a year and a half because of their data.
Well, for multiple reasons, but especially because of their
(18:27):
data. Yes, most platforms will tell
you someone opened your e-mail. Cool.
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Engagement drop off, which linkspeople ignore and which ones
they click again and again. What keeps readers scrolling.
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even predictive analytics measures.
(18:47):
It's like having your entire subscriber base give you
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sequences, welcome emails, re engagement campaigns, all based
on that behavior. Because the truth is, if you
can't measure it, you can't improve it.
And Beehive shows you what's actually happening.
So head to beehive.com/chris for30% off 3 months.
(19:09):
That data will change how and what you write.
If we were to look at 2 variables like if someone wanted
to get into this industry, either vent cleaning or air
quality or insulation. The two variables being like
quickest path to good net cash flow per month and like barrier
to entry. If we were to take both of those
(19:29):
into consideration, what opportunities in this space do
you see for people? I think it just depends on on
how you want to do things right.Because I remember when I first
started this business, I wanted everything in the house.
I wanted to do everything in thehouse.
I wanted to have my own crews. I wanted the the trucks, I
wanted everything right. And obviously there's going to
(19:50):
be a big investment because insulation machines are not
cheap. If you want a good insulation
machine, you're looking at 15 to20 grand.
That's just for one machine. Can you finance them?
You can, you can. That reduces the barrier to
entry. And then you know, insulation
removal machines, you're lookingabout 10 grand for one of those
machines for a good machine. And if you want to get into duct
(20:13):
cleaning that you're looking at 5 to 10 grand for a machine.
So that's how I used to think. I wanted everything in the house
and I invested a lot into building all that.
You know, we have over 100 employees or close to 100
employees and we were doing everything in house.
I've since changed my thought process.
(20:33):
I've since changed, you know, the way I think and the fastest
way in this business to cash flow and to start making some
good healthy profits is to subcontract it.
You know, there's a lot of, there's a lot of small companies
that need the work that don't invest in that marketing that
are just basically labor and that's all they want to be.
(20:56):
And you find the right subcontractors, they'll do
whatever you need them to do. Where do you find them?
Facebook Marketplace. The best way to find really good
Subs is through the suppliers. How we found good Subs is go, go
utilize our connections with thesuppliers because now we have,
you know, someone that's has first hand, you know, knowledge
(21:18):
of how that sub is and the work they do and how much they're
buying and just who they are as people.
So that's where we've had our best success finding
subcontractors is. People selling you equipment
and. Yeah, yeah, selling the smart,
the insulation suppliers, aerosil, you know, calling them
and finding the best aerosol companies, that's the best way.
(21:42):
But we found, we found several subcontractors just through
Google and searching online for insulation companies or we've
even found, we found one of thembecause we had a competing quote
with one of our customers from them and we we saw what they
were charging them. We're like, geez, I need to go
(22:03):
talk to these guys. We'll pay you that, we'll pay
you that, and we'll take this job.
Exactly. So yeah, that's how we've
traditionally found our Subs. It's funny, 'cause people think
of starting like a home service business and they, they're
minding me. That goes to our, I need to
learn how to perform this service.
I need to learn everything I canabout our values and insulation
and all this. When really it's like you need
(22:24):
to learn Facebook ads, right? Like if you can just learn
Facebook ads and you're going tobe ahead of most of your
competitors and they're not going to be your competitors,
they're going to be your partners.
They're going to pay them to do all the work for you, right?
And I love it. Like one thing that I, I always
had a fear of quality, right? I always had a fear that like,
if we sub it out, quality is going to go down.
(22:46):
And we've had issues with Subs and we don't, you know, we let
them go or we don't send them any more work and we get it
fixed. And, you know, I'm not saying
that every subcontractor has been awesome to work with, but
we like the small local companies.
That's the thing we like to workwith, you know, the owners
usually on the job site, he cares.
He wants to continue to receive our business.
(23:07):
They're gonna do a great job andyou're gonna, they're gonna have
great quality because they care about their business.
They want more work from us. And, and so that's one of my
switches that have changed in mybrain is like quality to
actually, you can make an argument that it goes up if you
have the right Subs. And then we always have a
(23:28):
project manager. So we always have a project
manager that's on site to deal with the homeowners.
And so we're still managing the product, we're project, we're
still very hands on. It's still our project and the
way we want to do it. But we just find people that
already have the help and, and the labor and want the work and
you know, that's, that's how we do it.
(23:49):
So are you pretty much subbing everything out today?
Pretty much, I mean we do some small things in Oz, but for the
most part we sub it all out. So on a $10,000 job, how much of
that goes to your sub on average?
Well, so we usually have our Subs pay for the product too.
That's kind of the changes we'llmake in the future is we'll
procure the materials. So about 50%, forty, 8%.
(24:12):
It's just like, I mean, that's the tree business.
That's what we do. We mark it up 1, you know, 2X.
Basically also general liabilitygoes down because you can, you
know, require them to have general liability.
So now you're, you're a different type of general
liability that you have to carry.
And so there, there are a lot ofsavings that come with subbing
(24:34):
it out. Also another thing, if, if they
step through the root or step through the ceiling, they're
responsible for to fix it, not us, right?
If they have a machine that breaks down, they're responsible
to fix that, not us. And so there was one point when
we had everything in house wherejust on rental equipment, we
were spending 15 grand a month just because we have machines
(24:56):
break it down or whatever. So that's a savings that we have
just by subbing things out. So you don't even, you know, you
talked about the the insulation machine and all that.
You don't even need to own that with the subcontractor model.
No, they have their own equipment now.
Insulation Subs are a little harder to find than like a
landscaping Subs or but. More specialized.
(25:17):
It's more specialized, it's a higher investment up front, but
they're out there and they want the work.
Yeah, now a lot of people hesitate to hire Subs because
they're like, oh, they'll, they'll take my business or
they'll show up in a a differenttruck with a different logo.
I explain like the homeowner 90%of the time doesn't notice or
care. It's a non issue, right, 'cause
(25:38):
it's pretty commonplace. And what about like stealing
your business? It, it does it just work for
this because it's not really recurring thing.
So you manage the payment. So we have the project manager
on site and if once again, if you have a good sub that I mean
we one of our, our main subcontractors, I mean we keep
them super busy to where I 90% of their business is from us,
(26:02):
they're not going to do anythingto mess that relationship.
And it takes time to find them and to vet them right.
It probably won't be the first sub you find that's that good.
Yeah, yeah. And and you know, we've had our
bad ones, but for the most part we haven't had any issues with
that because we we still controlthe project.
I think where you have the issues is if you just like sub
it out and then don't have oversight, right?
(26:25):
We still want to control the communication.
We're still there with the homeowner, walking him through
the project. We're not just handing it off.
And I think that works. There's a lot of big companies
that just hand it off, but we don't want to do that.
We like to have a little more control over it, so.
What is like your project manager to job ratio?
(26:47):
Like how many jobs is your project manager overseeing at
any given time? Here in Phoenix, we do about 60
jobs a month. And we have one project manager,
one of our Subs, you know, the one I was just talking about, we
trust him implicitly. So if if that project manager is
is out for that day or can't make it to the job, then we
(27:09):
don't worry about it. And so there are those cases
where, you know, calls him sick or is on vacation and you know,
we still are communicating with him, but we might not have a
project manager on on site that day.
Yeah. OK.
So it's not unreasonable to assume that in one Metroplex,
using the subcontractor model with a good Facebook ad
(27:32):
strategy, you can make over $1,000,000 a year of net profit,
right? Yes you can.
You got dialed in systems. You're paying your salespeople
Commission. Facebook ads are cranking.
What types of services are you selling with your ads today?
Most of our ads are targeted towards insulation and duct
sealing. So we'll do like a free attic
inspection. So our ads is really just a
(27:52):
pitch, a free attic inspection. Obviously we're bringing up some
of the pain points in our ads, you know, just kind of some of
the things that people might be experiencing that kind of
elicits the the response to get an attic inspection.
And then we'll go do an inspection and then we'll come
down and after we inspect the attic and some of the things
that are going on up there, we'll come down, sit down with
(28:14):
them, present the solution. That's where we'll add on, you
know, if they're having allergy issues or dust issues, will add
on air scrubbers or duct cleaning or you know, sealing
ductwork is big for allergies and dust.
So that's where we kind of once we do the attic inspection.
So really our ads are really just focused on providing a free
(28:35):
attic inspection. And once we do that, then we
kind of know the solution to Taylor for that homeowner.
So that's been like your most successful ad offer is get your
foot in the door with a free attic inspection, ask the right
questions, feel them out and seewhat kind of direction you need
to point them towards. Right.
OK. I assume you're using mostly
(28:56):
video ads. Usually my face in in an attic
or somewhere talking about insulation and to you know, then
they have a good call to action.Have a good offer?
And you're going to. Get people submitting their
information. Now you have once.
Once that happens, you have to have the appointment setters and
and the automations in place. And that's not hard to set up,
(29:19):
but you know, to keep everythingorganized and to make sure that
things aren't falling through the cracks.
That's an important element of doing.
What does your like tech stack look like?
Are you using a high level or HubSpot?
We use, we use high level, you know, for our marketing for our
leads to come in. But I've been developing and I
think you and I have talked about this before, I've been
developing my own CRM for five years now, six years.
(29:44):
How's that going? It's good.
I even have it connected with high level, so all the leads are
coming through high level go through it.
OK. So what about vent cleaning?
Do you think there's that could be a stand alone business and if
so, how could people tackle thatif they wanted to?
That clean definitely can be a stand alone business with
Facebook ads. You want to have a big enough
(30:04):
ticket to to make it worth because I don't you could be
selling a cheap product or an expensive product.
Your your leads are going to cost roughly the same.
We spend about each lead that that we get in is about $75 a
lead. We need to sell a ticket, We
need to sell something, a service that's going to recoup
that investment plus put some money in our pocket.
(30:28):
You'll probably have a higher close rate with it with a
cheaper product. So you probably able to sell
more duck cleanings. Your close rate would probably
be a little better, but like a typical duct cleaning standard
2000 square foot home, 12 vents,you look about $800.00 for that.
Once you're in doing the duct cleaning, there's, there's the
(30:49):
additional services that you canupsell like the air scrubber,
right? You can do some duct sealing,
right. You can even even if you don't
want to invest in the aerosil system, you can go and do manual
duct sealing because the one of the big reasons why dust is
getting into the ducts in the 1st place is because of leaky
ducts, right? And so that could be an up
upsell is duct clean or duct sealing and you can charge 4 to
(31:11):
$500 on that and then just otherduct services.
But that duct cleaning could be the kind of the lead horse and
then you can upgrade that, you know that service from there.
And that's kind of how we do it.I think there's a couple
different words for this, but I've heard people call it like
self liquidating ads in your case, like you don't really make
(31:31):
anything unless you close a lead, right?
Like you're offering a free attic inspection, but you know
that you close right? Once you're insight is going to
be X percent. But with this model, they could
be, you know, our offer is not afree attic inspection.
It could be a duct cleaning for $800.
That way, like when you get yourfoot in the door, you physically
get to their house, you paid forthe ads and ends time, you're
already profitable. But then you can bring your
(31:52):
average ticket from 800 to 1800 because one in four people buy
an air scrubber or one in four people get a $10,000 job, right?
Is that kind of what you're saying?
And it averages out. Yeah, and and with, with duck
cleaning, that's something you can sell over the phone.
You don't even have to go and look at it.
I mean, a duck system is duck system.
You, you asked the the right questions.
(32:15):
You know, you could sell that over the phone without even
really going and seeing, you know, the, the property.
So that's obviously there's somesavings there.
And as far as converting someoneto a customer And then, yeah,
like you said, the self liquidating offer, you can, you
can come up with this like really good offer on the front
end to bank on some of the upsells.
(32:35):
And then when you're in the house doing the service, then
you can. OK, we, we noticed that your
ducts are super leaky or you have a disconnected duct, you
have allergy issues. Let's sell you an air scrubber
and you know there's a lot of things that you can do once
you're there doing the service, once you've kind of sold them
that you know you've made your money back from the ads and
(32:55):
that's you make the profit at all the upsells.
Is there enough margin with ventcleaning only to sub it all out
or would you want to do it yourself and if So, what kind of
equipment would you need? So vent cleaning, that's if I
was just to have a vent cleaningcompany, I'd have that in house
1 because you don't need a lot of, I mean, depending on the
(33:17):
type of duct cleaning you do that.
So there's a couple different types of equipment you can get.
There's there's what's called a a brush and vac where basically
it's just long brush and there'sa vacuum attached to it and as
you're scrubbing it, it's. Like spins around.
You really only need one guy to do that.
The downfall of the the brush and vac method is you know,
(33:38):
that's usually designed for residential and light
commercial. So if you wanted to do anything
bigger, you're kind of limited to just that, you know, part of
the market. The other type of duct cleaning
machines is it's a negative air machine and that's where you're
blocking off the AC unit. You're connecting the the vacuum
(34:01):
up with the air handler and thenyou use these like air whips to
break break up the dust. You see those in like the TikTok
videos? Yeah, 'cause it's very visual.
Yeah, they're very visual of breaking up the dust and it's,
you know, it's sucking it into that negative error machine.
That is, in my opinion, it's a better duct cleaning method.
(34:22):
But it's you're probably going to have two guys to do that
work. And that's a little bit longer
set up. But the the upside is you can
get into bigger jobs. You can do industrial duct work,
really start to get into those types of jobs.
So duct cleaning, I'm not sayingyou can't sub it out, but the
average ticket is probably about800 to $1000.
(34:45):
There's not a lot of margins. That might be something that
you're, you, you want to take inhouse.
But so for a machine, so if you're just doing a brush and
vac machine, a good machine that's going to last and you
know that's going to do a good job, you're, you're looking at
about a $46,000 investment negative error.
You're 8 to 12. There's cheaper machines out
there and it might not be a bad idea to to go a little bit
(35:08):
cheaper to start, but you're going to probably have to
upgrade, you know, later on where if you just kind of invest
right up front into the better machines, those those will last
a good while and they'll do a good job for you so.
Is this as good of an opportunity in colder climates,
or is it best in places like Phoenix?
(35:29):
I think anywhere where there's extreme weather, I mean, the
insulation's great in colder climates.
I mean, in fact, usually the thelevels of insulation you want
to, you want to install are higher, right?
Like so like in Minnesota, instead of going to R49, you'd
want to probably install R60. Probably get a little bit more
money on that ticket just being in the colder climates.
(35:51):
But yeah, I think extreme weather is where you're going to
get the real demand for it in places like San Diego.
There would still be a demand inSan Diego, but it's the same
temperature all year round. For the most part.
You're not going to have people suffering.
What I think the biggest thing is like the difference people
feel from winter here versus summer, right?
(36:12):
Winter, they're pretty, you know, content.
They're, you know, they're like,yeah, this life's good.
It feels good here. And then also in the summer it
comes and then they start realizing, you know, all the
areas that you know of their home that are not comfortable or
they're not getting any flow or whatever.
So with that logic, like Phoenixmight not even be the best
(36:32):
market, right? Like maybe a Salt Lake or a
Dallas that gets really hot, really cold.
We love Dallas because it has both extremes.
Here in Phoenix, we still get a lot of winter work because we're
we're really selling the summer.Hey, do this now so the summer's
better. But in Dallas, you get a lot of
pain in the winter and you get alot of pain in the summer.
(36:54):
Same with Salt Lake. Same with, you know, So yeah,
anywhere where you kind of have pretty hot summers and pretty
cold winters, you're going to, you know, business is going to
be good. Yeah, but in Dallas we get like
9 days of perfect weather per year, so don't dog on it too
much. Yeah, I mean, Dallas is a great
market. The only thing that sucks, and
(37:14):
we've had this happen in Dallas is all the the ice storms where
we can't do anything. Yeah, go slide off the road.
Is there anything that's interesting about this business
that I forgot to ask you about? I don't think so.
I think you asked some good questions.
What I'll say is there's a lot of things that you can do in
this business, in the home, I call it the home performance
(37:36):
industry. And there's a lot of things that
that relate to others. I mean, you could at some point
your business would go to do roofs because roofs actually
it's something that come up, comes up quite a bit with us.
Hey, can you fix my roof while you're doing my attic?
So there's a lot of areas you can branch into just starting
off with whether it's insulationor duct cleaning like you know,
(37:58):
I mentioned earlier with duct cleaning, you could eventually
run a full blown duct business. And there's a lot of, you know,
there's a lot of money in ductwork replacing ductwork, you
know, adding returns, you know, cleaning ductwork.
New builds. Yeah, new builds.
So you can kind of dip your toe in the water with duct cleaning
(38:19):
and it could branch into to something where now you're
looking at $10,000 tickets 15,000 cause ductwork is 1.
It's not cheap, nobody wants to do it and there's a there's a
lot of intricacies with it. So you can really charge for it
and be fair too. So that's kind of how I look at
businesses, like how can I get in at the, you know, the lowest
(38:42):
barrier to entry and like grow into.
The upsell from there. Yeah, so.
Yeah, beautiful. What?
Where can everyone find you, Rex?
If they want to find you or yourbusiness or.
So our Instagram page is our handle is at Cozy Pros Same with
Facebook. OZYPROS.
And my name's Rex Lindsay, so you can find me on Instagram and
(39:04):
Facebook. Cool.
Thanks man. Yeah.
Thank you. Hey guys, if you're still
listening to this, it's probablybecause you haven't had a chance
to take your Airpods out, you'restill mowing the lawn, you're
still driving, what have you. If you're still here with me, I
would really, really love and appreciate a five star review on
Spotify, Apple, or wherever you get your podcast.
It would mean a lot. If you want to go the extra
(39:25):
mile, share this episode with a friend that might have an
interest in starting a business.It would mean a ton.
Hope you have the best day of your life today.
Using the subcontractor model, you can make over $1,000,000 a
year of net profit. Yes you can.
The fastest way to start making some good healthy profits is to
subcontract. It insulation machine and all
that. You don't even need to own that.
No, they have their own equipment.
It's a 30 minute install, but you can sell those for $1200.
If we focus just on every home selling in a scrubber, we could
(00:20):
sell a million a year. OK, now we're talking.
There's a lot of money in ductwork if your toe in the
water with duct binning and it could branch into to something
where now how you're looking at $10,000 tickets.
Our average ticket is right around 10 grand.
You're kind of selling fear a little.
Bit right, Yeah. It's energy savings, comfort and
indoor air quality all together.All right, you asked and I
(00:46):
answered. Every month or so, I e-mail out
a poll to my newsletter with about 30 different niche
business ideas, opportunities, etcetera.
And I ask you guys, what should I dive deep on?
What do you want to learn about?And over and over you kept
voting on vent cleaning, insulation, ductwork.
I don't know why, but you guys wanted it and so I brought it.
(01:07):
I have a friend named Rex. He lives in Phoenix and he has a
7 figure insulation slash vent cleaning slash home performance
as he calls it business. And if you liked my forestry
mulching episode a month or two ago, you're going to like this
because it's just as tactical but a different vertical.
What's his Facebook ad strategy?How much does it cost to
generate a lead? What types of markets do these
(01:27):
businesses work best in? How to find subcontractors in
unique places to do all the hardwork for you.
What your offer should be, How you should charge, What angles
you can take within the home performance industry to start a
business that doesn't cost all that much money.
This episode is jam packed with all that stuff.
Please enjoy and share with a friend.
Is insulation your big kind of money maker?
(01:48):
So insulation removal and then obviously re insulating, I mean
we're both those services we're at over a million on, on the
year. And then duct aero seal, duct
sealing is our third biggest. So, but naturally we're going to
get up in the attic, we're goingto see how old their AC unit is,
and then that's when we'll come down and sometimes offer a new
(02:11):
AC unit. Are you using like tools to see
if like cool air is leaking out in the attic and like infrared
stuff? Yep.
So all of our sales Rep have theinfrared cameras and.
I love stuff like that 'cause it's, it provides such a perfect
visual. And you're like, listen, don't
listen to me, Just look at the data, you know, show them the
picture of, like, the glowing red and yellow.
And they're like, Oh my, they just see like their money, like
(02:32):
burning up. Yeah.
Right. So we do.
Every single one of our sales guys has an infrared, even our,
you know, project managers and stuff have that.
We'll have them turn on the AC unit right when we get there or
the heater depending on the timeof year.
And then we'll go get some images of the ductwork.
We'll even pull aside some insulation and we'll see through
(02:53):
like their Cam lights and some of the areas of their leaking in
their attic. We'll show them the thermal
imaging of that as well, so theycan actually see like the cold
air coming up through their house, right?
Or the heat coming up through their house into their attic.
So help people understand how their house is leaky and how we
(03:14):
do grow up nice and tight and save them.
So what is like an average prescription look like, you go
in there, you go to an average attic, not too crazy either
direction. What do you prescribe them?
What does it cost them? What does your margin look like
on something like that? When we go to a home, the most
common thing that we do and we push it right is removing all
(03:35):
their insulation so that we can seal the attic, right.
So we'll come and seal up all the leaking areas of the the
attic. Once we have all the insulation
removed, we're going to add R49,which is about 17 inches of
insulation. OK.
And what do people usually have?How much of an upgrade is that
typically? So here in Phoenix it's the
average home, probably has 6 inches of insulation.
(03:57):
Pretty much every house here hasold cellulose insulation, which
is like made of cardboard and newspaper.
That stuff gets breaks down. So they when they process that
insulation, they have to add fire retardant to it.
And especially here in Phoenix that that fire retardant like
activates with the heat. It starts basically
(04:18):
disintegrating the insulation when settling.
And so you'll get up in attics, it's super dusty.
It's it's gross acted. So we'll remove all of that.
We'll seal up their attic will add a lot more insulation than
what they had and then a lot of homes, almost every ticket that
we sell has some sort of duct sealing.
Most, most of what we do is aeroseal.
(04:40):
You've heard of aerosol, right? I haven't, no.
So Aero seal is it's cool. It's a, it's a technology that
you block off all the registers in the house and then you, you
hook up this machine to the ductwork and this machine turns
this sealant into like an aerosol.
And so you're basically you're pressurizing the system, all the
ducts, all the vents are blockedoff, you're pressurizing the
(05:03):
system. And so when you're sending that
sealant through the duct ductwork, it's not coating the
ductwork at all, but it's that those little air sealant
particles are traveling through the air and they're going out
the holes and they start accumulating out the holes and
sealing up the ducts. Interesting.
So it's the best way to seal ductwork.
(05:23):
It's it's a lot more expensive than sealing it by hand.
It's going to get all the cracksand holes and even the the
little holes that you can't see.It kind of reminds me of like
the fix a flat right? You spray it in your tire and it
just. Yeah.
So that's kind of the a lot of people relate to the fix a flat
concept or they, they have a certain product like that to
(05:46):
seal up a radiator. So a lot of people relate with
it that way. They.
Oh, OK. So that's like the more
expensive version of like manually like taping, but it's
more effective as well. Correct, Yeah.
And we and we really build a lotof value in Aerosil.
In fact, Aerosil consults with us a lot 'cause we we're kind of
one of the only companies that'sbeen able to figure out cause
(06:09):
cause a lot of people that sell Aerosil, it's kind of an add on
service to what they're already doing like and I guess that's we
kind of do that too, but but we will go sell Aerosil on its own.
It's like a main course for you guys.
Most people treat it like a sidedish or an appetizer.
Correct. So Aero still likes to to pick
(06:29):
our brain a lot on how how we'reactually selling Aero so long
because a lot of the companies that sell it don't know how to
do that. Right now.
So you go into an average house and what do you usually quote
them for? Just an average job.
Our average ticket is right around 10 grand.
OK, what size house might that be?
3000 square feet. The average home is probably
(06:50):
about 2000 square feet. Usually that includes removing
insulation, sealing up the attic, adding R49 insulation and
then sealing the ductwork. And a lot of times they'll
include a a duct cleaning as well 'cause we package that with
aero seal. So 10 grands are cash value
'cause we use a lot of financingand financing has fees and that
(07:12):
added to it. And so we strip that out and we
want the true cash value of thatjob.
With the fees, we're probably closer to 11 grand.
OK, I got to think that taking all that insulation out is just
a pain. Use like a massive vacuum.
Yeah, just a big. Like just like this big around
and. It's a yeah, the, I mean, you're
looking at a six inch hose, at least 6-8 inch hose.
(07:35):
And you know, the one we're using right now is a diesel
vacuum. It's got tons of horsepower.
I can't remember how much wood it has, but but yeah, I just,
you just go start sucking it out.
Yeah. Do you have to like dispose of
it in a certain way or can you just toss it?
We just take it to the landfill.So.
(07:55):
And there are some landfills that, you know, don't like to
take it, but we know all the ones that will take it.
And so when we end the job, we'll head over and dump it.
And are you replacing it with blown in insulation just like
the Snow White stuff? Yep, that's what we do.
That's blown fiberglass. We can do foam, spray foam.
(08:17):
I have some, I have my own issues with spray foam.
It's it's a great insulation, but there's some downfalls to it
too. And so most of what we sell is
blown fiberglass. So on a $10,000 job, how did the
unit economics breakdown on yourside?
Like what are you allocating to overhead versus ad spend versus
COGS, labor and all that? So 10% ad spend is kind of what
(08:40):
we factor of our revenue. We want to keep, you know, ad
spending to about 10% or less. Commissions, same thing we pay
about 10% and then overhead we want to keep around 10% as well.
So we have 50%, it's actually like 52% margins of all of our
products. We want to keep 15 to 20%.
(09:02):
Well, that's all said and done. So 52% gross margin, 15 plus ish
net, yeah. Our target's 20, but we're
satisfied with 15. Yeah, yeah, 'cause you got to
pay aero seal, you got to pay for the the insulation, you got
to pay labor, your insurance probably isn't probably a
(09:23):
substantial. It's not cheap.
Insurance is not cheap ever. Yeah.
So, you know, and, and, and sales commissions with overrides
and everything, we're about 12% there.
That's where the 52% margin comes in when we pay out all
commissions. And then, yeah, on a, on a
really bad month with our ads, we'll get 8 or 9X.
(09:46):
But on a good month, we'll get 15.
Yeah, we'll get 15. It should put your net closer to
20. Yeah, last month we were at 15X
on our. Nice.
So what is like a big job, like a really good profitable job
look like for you? We've done jobs as high as 30
grand. Is it usually bigger homes or
homes with more issues, more leaking?
(10:07):
A. Little bit of both, right?
So single level homes like your house, that's going to probably
be a pretty big ticket because it's going to have a big attic,
right? So there's more square footage
to, you know, two-story homes. They don't have as big of
attics, so there's not as much square footage to to remove or
to replace. Where we make it up with
two-story homes, though, is mostof the time they have multiple
(10:30):
AC units. So we'll get 22 duct seals out
of it rather than one. So we'll make up a little bit of
that on, on the two-story. Some of our sales reps they sell
air scrubbers, they sell duct cleaning, they sell HVAC unit,
you know, and we'll get big tickets.
I mean, we've, we've, we've had jobs where we, they've needed
(10:51):
everything and we, we've had jobs over 30 gram, 40 gram,
yeah. You know those are those are
always fun jobs to to do. What are air scrubbers?
It's a simple install this, There's a lot of money that you
can make in air scrubbers. So it's a device that goes and
you can install it on the supplyside or the return side.
So all your AC units have a supply side and they have a
(11:12):
return side, but it's just a little device that has like a a
cell that goes into it. And so as air's passing through
it, it's basically ionizing or atomizing the air and it's
charging all the and as it comesout the ducts, it's goes and
attaches to all the dust and pollen and.
(11:32):
Allergen. So it's like an like an
electronic air filter, like a high-powered air filter.
Yeah, and I mean, it'll kill viruses, it'll kill mold, it'll
kill so but you just put it intothe into the plenum sealed up
really good and plug it in and it's it's a 30 minute install,
but you can sell those for $1200.
And what's your cost on that? $400.00 for the product and then
(11:55):
$50.00 in labor. Yeah, Dang, you just plug it
into the wall as long as there'san outlet up there.
You can plug it into the wall, that's an option.
Or you can just they make these adapters that will plug into
your the actual area. And on that one that's kind of
like a pest control cell you're,you're kind of selling fear a
little bit. Yeah.
Well, and especially with with there's a lot of people out
(12:16):
there that have asthma or, or they're just bad allergies.
And so a lot of that's coming from their attic and their
ductwork. So by putting one of those in
there, it's gonna help a lot throughout their home.
So I have two installed in my house.
How much business do you do of that per year of the air
sealing? Air scrubber we have.
(12:39):
Air scrubber. Yeah, we're at year to date
56,000. Dang, OK.
Is there, is there a business tobe had of someone just doing
that like that alone, driven by Facebook ads door to door, what
have you? I believe so, yes.
Yeah, no, it's a big issue. A lot of people especially, I
mean, if, if there was a couple,if there was a good thing that
(12:59):
came from COVID, it's people's awareness.
Awareness. Allergens and viruses and things
like that. There's a big health push in, in
our culture, you know, a lot of it's fitness and food and toxins
and stuff like that. And so that helps drive the need
and the want and the desire for the air scrubber for us is kind
(13:21):
of an afterthought. It's kind of a side dish, a
little bit of an appetizer. If we focus just on every home
selling air scrubber, we could sell a million a a year.
OK, now we're talking. I don't think people are going
to start caring about toxins less, right?
I see that as only growing. Have you heard of those
companies that come in and they'll like diagnose your home
(13:43):
as far as like toxins are concerned?
Like they'll look at the air quality and then they'll give
you like they may charge you like a few 100 bucks and then
they'll give you like a, a laundry list of things to fix.
Do you work with companies like those?
Do they refer business to you oris that still pretty early?
That's still pretty early. We haven't worked with any
companies like that. And I don't know, I don't know
of any companies here in Phoenixthat do that.
(14:03):
I'm sure they're all. But I know a guy in the UK doing
it really successfully. Yeah, it's a big business.
Just the air purification industry is several billion
dollars a year. It's like $10 billion a year
just in the US So there's a there's a lot of money to be
made just focusing on air quality.
Can homeowners install those themselves, like if they were
(14:26):
handy enough? Or is it pretty technical?
Yeah, they definitely can install themselves.
So it's a simple install if you have any sort of low voltage
electrical knowledge and, and you know how to cut a hole and
patch it up and seal it up nice and you can install yourself.
So, and the nice thing about that business just just in the
(14:49):
air scrubbers is there is a reoccurring revenue, you know
side of it because those cells that are in that air scrubber,
they'll last two years, 2-3 years.
So you can go and sell them a new cell every two to three
years. You can sell them whatever you
want every two to three years. You get your foot back in the
door every two years. Yeah, there is a good business
(15:11):
if and I've I've thought about just starting a business that
just focuses on ductwork and airscrubber is going to be like a
really it was going to be one ofthe main courses of that
business. All right, so for a 2000 square
foot home, 10 grand, what kind of monthly savings could the
homeowner expect? Like what would their power bill
go to roughly? So according to the Department
(15:34):
of Energy, if we're doing like the whole package, they can
expect 25 to 30%. But we've had homes where I mean
the attics are just completely, I mean no insulation or half
their attic that has 0 insulation, their duct works
disconnected. Those homes were going to are
going to completely transform their lives, right?
(15:57):
We love those homes because, yeah, it's going to make a
massive difference. They're going to feel it like
the the next 10 minutes after it's done.
But 25 to 30% on a typical home,on a lot of the older homes, you
can get probably more of that, more than that.
We don't, we obviously we focus on energy savings.
(16:19):
That's a that's one of the benefits of doing this.
But we look at it from a holistic, hey, you want to be
more comfortable, you want to have even temperatures, this is
your home, invest in it, live inyour home, be happy in your
home. No one wants to have a home that
has a room that they don't want to use because it's
(16:39):
uncomfortable. So we're, we're really focusing
and then the health aspects of it.
So it's, it's energy savings, comfort and indoor air quality
all together. And that's the value that we're
selling, right. So it.
It took me so long to flip that switch in my brain because I'm
inherently cheap. And so I would like keep the AC
at like 77 in the summer. And then one day I was just
(17:03):
like, what are you doing? Like this is miserable.
Like you're going to spend an extra 40 bucks a month to be
comfortable. Like is that I think that's
worth it. But.
That's so when we first moved here to Phoenix, I tried to live
that way the first year. And I told my wife I was like,
if we're going to stay here in Phoenix, I'm going to pay
whatever power bill I need to pay.
(17:23):
Just be comfortable. Yeah, I don't care.
On a 2000 square foot home, what's an average like summer
power bill in Phoenix? 4 to $500.
So they can save 2200 hundred 5200 bucks, right?
Yep. So they'll get that money back
in four to six years, give or take.
Yeah, there's a lot of tax rebates.
(17:44):
And so I mean, the the tax credits going away after this
year, but a lot of utilities aredoing rebates.
So one of the utilities here in Phoenix is it's called SRP.
They get $400.00 just for duct sealing and then they'll they'll
give $600.00 for insulation. And there's other little rebates
(18:06):
they give as well. So we we take advantage of those
as well. So yeah.
All right, you know, I'm always talking about data.
The numbers that actually matterbecause you need data to grow
and you need to grow to make real money.
Beehive is the newsletter platform that I've used for over
a year and a half because of their data.
Well, for multiple reasons, but especially because of their
(18:27):
data. Yes, most platforms will tell
you someone opened your e-mail. Cool.
But Beehive tells you everything.
Engagement drop off, which linkspeople ignore and which ones
they click again and again. What keeps readers scrolling.
You get real time subscriber insights, AB testing results,
even predictive analytics measures.
(18:47):
It's like having your entire subscriber base give you
feedback live. And you can set up automated
sequences, welcome emails, re engagement campaigns, all based
on that behavior. Because the truth is, if you
can't measure it, you can't improve it.
And Beehive shows you what's actually happening.
So head to beehive.com/chris for30% off 3 months.
(19:09):
That data will change how and what you write.
If we were to look at 2 variables like if someone wanted
to get into this industry, either vent cleaning or air
quality or insulation. The two variables being like
quickest path to good net cash flow per month and like barrier
to entry. If we were to take both of those
(19:29):
into consideration, what opportunities in this space do
you see for people? I think it just depends on on
how you want to do things right.Because I remember when I first
started this business, I wanted everything in the house.
I wanted to do everything in thehouse.
I wanted to have my own crews. I wanted the the trucks, I
wanted everything right. And obviously there's going to
(19:50):
be a big investment because insulation machines are not
cheap. If you want a good insulation
machine, you're looking at 15 to20 grand.
That's just for one machine. Can you finance them?
You can, you can. That reduces the barrier to
entry. And then you know, insulation
removal machines, you're lookingabout 10 grand for one of those
machines for a good machine. And if you want to get into duct
(20:13):
cleaning that you're looking at 5 to 10 grand for a machine.
So that's how I used to think. I wanted everything in the house
and I invested a lot into building all that.
You know, we have over 100 employees or close to 100
employees and we were doing everything in house.
I've since changed my thought process.
(20:33):
I've since changed, you know, the way I think and the fastest
way in this business to cash flow and to start making some
good healthy profits is to subcontract it.
You know, there's a lot of, there's a lot of small companies
that need the work that don't invest in that marketing that
are just basically labor and that's all they want to be.
(20:56):
And you find the right subcontractors, they'll do
whatever you need them to do. Where do you find them?
Facebook Marketplace. The best way to find really good
Subs is through the suppliers. How we found good Subs is go, go
utilize our connections with thesuppliers because now we have,
you know, someone that's has first hand, you know, knowledge
(21:18):
of how that sub is and the work they do and how much they're
buying and just who they are as people.
So that's where we've had our best success finding
subcontractors is. People selling you equipment
and. Yeah, yeah, selling the smart,
the insulation suppliers, aerosil, you know, calling them
and finding the best aerosol companies, that's the best way.
(21:42):
But we found, we found several subcontractors just through
Google and searching online for insulation companies or we've
even found, we found one of thembecause we had a competing quote
with one of our customers from them and we we saw what they
were charging them. We're like, geez, I need to go
(22:03):
talk to these guys. We'll pay you that, we'll pay
you that, and we'll take this job.
Exactly. So yeah, that's how we've
traditionally found our Subs. It's funny, 'cause people think
of starting like a home service business and they, they're
minding me. That goes to our, I need to
learn how to perform this service.
I need to learn everything I canabout our values and insulation
and all this. When really it's like you need
(22:24):
to learn Facebook ads, right? Like if you can just learn
Facebook ads and you're going tobe ahead of most of your
competitors and they're not going to be your competitors,
they're going to be your partners.
They're going to pay them to do all the work for you, right?
And I love it. Like one thing that I, I always
had a fear of quality, right? I always had a fear that like,
if we sub it out, quality is going to go down.
(22:46):
And we've had issues with Subs and we don't, you know, we let
them go or we don't send them any more work and we get it
fixed. And, you know, I'm not saying
that every subcontractor has been awesome to work with, but
we like the small local companies.
That's the thing we like to workwith, you know, the owners
usually on the job site, he cares.
He wants to continue to receive our business.
(23:07):
They're gonna do a great job andyou're gonna, they're gonna have
great quality because they care about their business.
They want more work from us. And, and so that's one of my
switches that have changed in mybrain is like quality to
actually, you can make an argument that it goes up if you
have the right Subs. And then we always have a
(23:28):
project manager. So we always have a project
manager that's on site to deal with the homeowners.
And so we're still managing the product, we're project, we're
still very hands on. It's still our project and the
way we want to do it. But we just find people that
already have the help and, and the labor and want the work and
you know, that's, that's how we do it.
(23:49):
So are you pretty much subbing everything out today?
Pretty much, I mean we do some small things in Oz, but for the
most part we sub it all out. So on a $10,000 job, how much of
that goes to your sub on average?
Well, so we usually have our Subs pay for the product too.
That's kind of the changes we'llmake in the future is we'll
procure the materials. So about 50%, forty, 8%.
(24:12):
It's just like, I mean, that's the tree business.
That's what we do. We mark it up 1, you know, 2X.
Basically also general liabilitygoes down because you can, you
know, require them to have general liability.
So now you're, you're a different type of general
liability that you have to carry.
And so there, there are a lot ofsavings that come with subbing
(24:34):
it out. Also another thing, if, if they
step through the root or step through the ceiling, they're
responsible for to fix it, not us, right?
If they have a machine that breaks down, they're responsible
to fix that, not us. And so there was one point when
we had everything in house wherejust on rental equipment, we
were spending 15 grand a month just because we have machines
(24:56):
break it down or whatever. So that's a savings that we have
just by subbing things out. So you don't even, you know, you
talked about the the insulation machine and all that.
You don't even need to own that with the subcontractor model.
No, they have their own equipment now.
Insulation Subs are a little harder to find than like a
landscaping Subs or but. More specialized.
(25:17):
It's more specialized, it's a higher investment up front, but
they're out there and they want the work.
Yeah, now a lot of people hesitate to hire Subs because
they're like, oh, they'll, they'll take my business or
they'll show up in a a differenttruck with a different logo.
I explain like the homeowner 90%of the time doesn't notice or
care. It's a non issue, right, 'cause
(25:38):
it's pretty commonplace. And what about like stealing
your business? It, it does it just work for
this because it's not really recurring thing.
So you manage the payment. So we have the project manager
on site and if once again, if you have a good sub that I mean
we one of our, our main subcontractors, I mean we keep
them super busy to where I 90% of their business is from us,
(26:02):
they're not going to do anythingto mess that relationship.
And it takes time to find them and to vet them right.
It probably won't be the first sub you find that's that good.
Yeah, yeah. And and you know, we've had our
bad ones, but for the most part we haven't had any issues with
that because we we still controlthe project.
I think where you have the issues is if you just like sub
it out and then don't have oversight, right?
(26:25):
We still want to control the communication.
We're still there with the homeowner, walking him through
the project. We're not just handing it off.
And I think that works. There's a lot of big companies
that just hand it off, but we don't want to do that.
We like to have a little more control over it, so.
What is like your project manager to job ratio?
(26:47):
Like how many jobs is your project manager overseeing at
any given time? Here in Phoenix, we do about 60
jobs a month. And we have one project manager,
one of our Subs, you know, the one I was just talking about, we
trust him implicitly. So if if that project manager is
is out for that day or can't make it to the job, then we
(27:09):
don't worry about it. And so there are those cases
where, you know, calls him sick or is on vacation and you know,
we still are communicating with him, but we might not have a
project manager on on site that day.
Yeah. OK.
So it's not unreasonable to assume that in one Metroplex,
using the subcontractor model with a good Facebook ad
(27:32):
strategy, you can make over $1,000,000 a year of net profit,
right? Yes you can.
You got dialed in systems. You're paying your salespeople
Commission. Facebook ads are cranking.
What types of services are you selling with your ads today?
Most of our ads are targeted towards insulation and duct
sealing. So we'll do like a free attic
inspection. So our ads is really just a
(27:52):
pitch, a free attic inspection. Obviously we're bringing up some
of the pain points in our ads, you know, just kind of some of
the things that people might be experiencing that kind of
elicits the the response to get an attic inspection.
And then we'll go do an inspection and then we'll come
down and after we inspect the attic and some of the things
that are going on up there, we'll come down, sit down with
(28:14):
them, present the solution. That's where we'll add on, you
know, if they're having allergy issues or dust issues, will add
on air scrubbers or duct cleaning or you know, sealing
ductwork is big for allergies and dust.
So that's where we kind of once we do the attic inspection.
So really our ads are really just focused on providing a free
(28:35):
attic inspection. And once we do that, then we
kind of know the solution to Taylor for that homeowner.
So that's been like your most successful ad offer is get your
foot in the door with a free attic inspection, ask the right
questions, feel them out and seewhat kind of direction you need
to point them towards. Right.
OK. I assume you're using mostly
(28:56):
video ads. Usually my face in in an attic
or somewhere talking about insulation and to you know, then
they have a good call to action.Have a good offer?
And you're going to. Get people submitting their
information. Now you have once.
Once that happens, you have to have the appointment setters and
and the automations in place. And that's not hard to set up,
(29:19):
but you know, to keep everythingorganized and to make sure that
things aren't falling through the cracks.
That's an important element of doing.
What does your like tech stack look like?
Are you using a high level or HubSpot?
We use, we use high level, you know, for our marketing for our
leads to come in. But I've been developing and I
think you and I have talked about this before, I've been
developing my own CRM for five years now, six years.
(29:44):
How's that going? It's good.
I even have it connected with high level, so all the leads are
coming through high level go through it.
OK. So what about vent cleaning?
Do you think there's that could be a stand alone business and if
so, how could people tackle thatif they wanted to?
That clean definitely can be a stand alone business with
Facebook ads. You want to have a big enough
(30:04):
ticket to to make it worth because I don't you could be
selling a cheap product or an expensive product.
Your your leads are going to cost roughly the same.
We spend about each lead that that we get in is about $75 a
lead. We need to sell a ticket, We
need to sell something, a service that's going to recoup
that investment plus put some money in our pocket.
(30:28):
You'll probably have a higher close rate with it with a
cheaper product. So you probably able to sell
more duck cleanings. Your close rate would probably
be a little better, but like a typical duct cleaning standard
2000 square foot home, 12 vents,you look about $800.00 for that.
Once you're in doing the duct cleaning, there's, there's the
(30:49):
additional services that you canupsell like the air scrubber,
right? You can do some duct sealing,
right. You can even even if you don't
want to invest in the aerosil system, you can go and do manual
duct sealing because the one of the big reasons why dust is
getting into the ducts in the 1st place is because of leaky
ducts, right? And so that could be an up
upsell is duct clean or duct sealing and you can charge 4 to
(31:11):
$500 on that and then just otherduct services.
But that duct cleaning could be the kind of the lead horse and
then you can upgrade that, you know that service from there.
And that's kind of how we do it.I think there's a couple
different words for this, but I've heard people call it like
self liquidating ads in your case, like you don't really make
(31:31):
anything unless you close a lead, right?
Like you're offering a free attic inspection, but you know
that you close right? Once you're insight is going to
be X percent. But with this model, they could
be, you know, our offer is not afree attic inspection.
It could be a duct cleaning for $800.
That way, like when you get yourfoot in the door, you physically
get to their house, you paid forthe ads and ends time, you're
already profitable. But then you can bring your
(31:52):
average ticket from 800 to 1800 because one in four people buy
an air scrubber or one in four people get a $10,000 job, right?
Is that kind of what you're saying?
And it averages out. Yeah, and and with, with duck
cleaning, that's something you can sell over the phone.
You don't even have to go and look at it.
I mean, a duck system is duck system.
You, you asked the the right questions.
(32:15):
You know, you could sell that over the phone without even
really going and seeing, you know, the, the property.
So that's obviously there's somesavings there.
And as far as converting someoneto a customer And then, yeah,
like you said, the self liquidating offer, you can, you
can come up with this like really good offer on the front
end to bank on some of the upsells.
(32:35):
And then when you're in the house doing the service, then
you can. OK, we, we noticed that your
ducts are super leaky or you have a disconnected duct, you
have allergy issues. Let's sell you an air scrubber
and you know there's a lot of things that you can do once
you're there doing the service, once you've kind of sold them
that you know you've made your money back from the ads and
(32:55):
that's you make the profit at all the upsells.
Is there enough margin with ventcleaning only to sub it all out
or would you want to do it yourself and if So, what kind of
equipment would you need? So vent cleaning, that's if I
was just to have a vent cleaningcompany, I'd have that in house
1 because you don't need a lot of, I mean, depending on the
(33:17):
type of duct cleaning you do that.
So there's a couple different types of equipment you can get.
There's there's what's called a a brush and vac where basically
it's just long brush and there'sa vacuum attached to it and as
you're scrubbing it, it's. Like spins around.
You really only need one guy to do that.
The downfall of the the brush and vac method is you know,
(33:38):
that's usually designed for residential and light
commercial. So if you wanted to do anything
bigger, you're kind of limited to just that, you know, part of
the market. The other type of duct cleaning
machines is it's a negative air machine and that's where you're
blocking off the AC unit. You're connecting the the vacuum
(34:01):
up with the air handler and thenyou use these like air whips to
break break up the dust. You see those in like the TikTok
videos? Yeah, 'cause it's very visual.
Yeah, they're very visual of breaking up the dust and it's,
you know, it's sucking it into that negative error machine.
That is, in my opinion, it's a better duct cleaning method.
(34:22):
But it's you're probably going to have two guys to do that
work. And that's a little bit longer
set up. But the the upside is you can
get into bigger jobs. You can do industrial duct work,
really start to get into those types of jobs.
So duct cleaning, I'm not sayingyou can't sub it out, but the
average ticket is probably about800 to $1000.
(34:45):
There's not a lot of margins. That might be something that
you're, you, you want to take inhouse.
But so for a machine, so if you're just doing a brush and
vac machine, a good machine that's going to last and you
know that's going to do a good job, you're, you're looking at
about a $46,000 investment negative error.
You're 8 to 12. There's cheaper machines out
there and it might not be a bad idea to to go a little bit
(35:08):
cheaper to start, but you're going to probably have to
upgrade, you know, later on where if you just kind of invest
right up front into the better machines, those those will last
a good while and they'll do a good job for you so.
Is this as good of an opportunity in colder climates,
or is it best in places like Phoenix?
(35:29):
I think anywhere where there's extreme weather, I mean, the
insulation's great in colder climates.
I mean, in fact, usually the thelevels of insulation you want
to, you want to install are higher, right?
Like so like in Minnesota, instead of going to R49, you'd
want to probably install R60. Probably get a little bit more
money on that ticket just being in the colder climates.
(35:51):
But yeah, I think extreme weather is where you're going to
get the real demand for it in places like San Diego.
There would still be a demand inSan Diego, but it's the same
temperature all year round. For the most part.
You're not going to have people suffering.
What I think the biggest thing is like the difference people
feel from winter here versus summer, right?
(36:12):
Winter, they're pretty, you know, content.
They're, you know, they're like,yeah, this life's good.
It feels good here. And then also in the summer it
comes and then they start realizing, you know, all the
areas that you know of their home that are not comfortable or
they're not getting any flow or whatever.
So with that logic, like Phoenixmight not even be the best
(36:32):
market, right? Like maybe a Salt Lake or a
Dallas that gets really hot, really cold.
We love Dallas because it has both extremes.
Here in Phoenix, we still get a lot of winter work because we're
we're really selling the summer.Hey, do this now so the summer's
better. But in Dallas, you get a lot of
pain in the winter and you get alot of pain in the summer.
(36:54):
Same with Salt Lake. Same with, you know, So yeah,
anywhere where you kind of have pretty hot summers and pretty
cold winters, you're going to, you know, business is going to
be good. Yeah, but in Dallas we get like
9 days of perfect weather per year, so don't dog on it too
much. Yeah, I mean, Dallas is a great
market. The only thing that sucks, and
(37:14):
we've had this happen in Dallas is all the the ice storms where
we can't do anything. Yeah, go slide off the road.
Is there anything that's interesting about this business
that I forgot to ask you about? I don't think so.
I think you asked some good questions.
What I'll say is there's a lot of things that you can do in
this business, in the home, I call it the home performance
(37:36):
industry. And there's a lot of things that
that relate to others. I mean, you could at some point
your business would go to do roofs because roofs actually
it's something that come up, comes up quite a bit with us.
Hey, can you fix my roof while you're doing my attic?
So there's a lot of areas you can branch into just starting
off with whether it's insulationor duct cleaning like you know,
(37:58):
I mentioned earlier with duct cleaning, you could eventually
run a full blown duct business. And there's a lot of, you know,
there's a lot of money in ductwork replacing ductwork, you
know, adding returns, you know, cleaning ductwork.
New builds. Yeah, new builds.
So you can kind of dip your toe in the water with duct cleaning
(38:19):
and it could branch into to something where now you're
looking at $10,000 tickets 15,000 cause ductwork is 1.
It's not cheap, nobody wants to do it and there's a there's a
lot of intricacies with it. So you can really charge for it
and be fair too. So that's kind of how I look at
businesses, like how can I get in at the, you know, the lowest
(38:42):
barrier to entry and like grow into.
The upsell from there. Yeah, so.
Yeah, beautiful. What?
Where can everyone find you, Rex?
If they want to find you or yourbusiness or.
So our Instagram page is our handle is at Cozy Pros Same with
Facebook. OZYPROS.
And my name's Rex Lindsay, so you can find me on Instagram and
(39:04):
Facebook. Cool.
Thanks man. Yeah.
Thank you. Hey guys, if you're still
listening to this, it's probablybecause you haven't had a chance
to take your Airpods out, you'restill mowing the lawn, you're
still driving, what have you. If you're still here with me, I
would really, really love and appreciate a five star review on
Spotify, Apple, or wherever you get your podcast.
It would mean a lot. If you want to go the extra
(39:25):
mile, share this episode with a friend that might have an
interest in starting a business.It would mean a ton.
Hope you have the best day of your life today.
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