March 11, 2025 • 27 mins
What happens when your $3.50 breakfast sandwich suddenly costs $12.50? When your skilled workers demand $30/hour instead of $18? When your commercial lease jumps 50%? Welcome to the economic reality of 2025 – a landscape transformed by persistent inflation, potential tariffs, and permanently reset price expectations.
This candid, unfiltered conversation dives deep into the practical challenges small business owners face as they navigate today's economic pressures. We explore the "Overton window" concept – how yesterday's outrageous prices become today's reluctant acceptance – and what this means for your pricing strategy. Using real-world examples from construction materials to commercial real estate, we illustrate how inflation has permanently altered business costs across industries.
Most valuably, we share actionable strategies for protecting your margins without alienating customers. You'll learn why 30-day estimate validity periods have evolved from sales tactics to financial necessities, how technology adoption can create operational efficiencies, and why employees often resist price increases more strongly than customers do. We also discuss the looming influence of potential tariffs – and why they're already impacting pricing decisions regardless of whether they're ultimately implemented.
Throughout this discussion, we maintain a strictly practical perspective focused on business survival rather than political posturing. The insights shared apply across industries and business sizes, making this essential listening for anyone navigating the complex economic terrain of 2025.
Ready to strengthen your business against inflationary pressures? Listen now to gain concrete strategies for maintaining profitability while continuing to deliver exceptional value in today's challenging economic landscape.
From the Zoo to Wild is a book for entrepreneurs passionate about home services, looking to move away from corporate jobs. Chris Lalomia, a former executive, shares his path, discoveries, and tools to succeed as a small business owner in home improvement retail. The book provides the mindset, habits, leadership style, and customer-oriented processes necessary to succeed as a small business owner in home services.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
And so you have to watch it.
So what do we do?
Well, we make sure when we'repricing things, we're locking in
, we're actually holding firm onour 30-day estimates.
Now is that if you come back tome on day 35, I'm going to have
to relook at everything becauseI don't know?
Yeah, you told me that when youquoted my deck.
Speaker 2 (00:13):
I know, and I think that's fair, because people hold
onto those estimates for sixmonths or a year and they expect
you to.
Speaker 1 (00:19):
I had a guy here we are laying this down in March of
2025.
I had a guy.
I looked at his deck startingin September of last year and he
asked me if I could honor thatSeptember pricing.
And I'm like I have no idea.
I said, if you really want todo this, you just have to
understand.
I'm fair with you.
There's a reason you came backto me is that you know who I am.
You know who I'm about, but I'mpretty sure I'm going to have
(00:43):
to charge you more because theprice has gone up.
Speaker 2 (00:46):
So it's a great nugget for people who's you know
, 30 days on your estimate.
Speaker 1 (00:51):
Welcome to the Small Business Safari where I help
guide you to avoid those traps,pitfalls and dangers that lurk
when navigating the wild worldof small business ownership.
I'll share those gold nuggetsof information and invite guests
to help accelerate your ascentto that mountaintop of success.
It's a jungle out there and Iguests to help accelerate your
ascent to that mountaintop ofsuccess.
It's a jungle out there and Iwant to help you traverse
through the levels of owningyour own business that can get
(01:11):
you bogged down and distract youfrom hitting your own personal
and professional goals.
So strap in adventure team andlet's take a ride through the
safari and get you to themountaintop man.
I love that music and we havegot to rock this.
We're going to do this a littlebit different.
Al and I are going to be instudio together by ourselves.
Speaker 2 (01:35):
Don't sound so sad about it.
I mean, we have a good time.
Speaker 1 (01:37):
We do always, of course.
Well, cheers, We'll drink tothat.
So we're going to talk what thistariff thing and what the 2025
economy thing looks like andwhat's going on in my biz.
So as we do that, I'm going togive you kind of my thoughts on
this, and I've been on a coupleof other really cool podcasts
(01:58):
talking about what other peopleare thinking, and we're
listening to what's going on inthe world and stuff.
So let's rock into it.
Alan says he's got a lot ofquestions.
I started talking, he goes canyou just save that for the
podcast?
I'm like oh, all right, don'tleave it in the room, let's get
it going.
Come on everybody, let's gofigure out what the hell is
going to happen to us in 2025.
We don't have the answers.
Speaker 2 (02:20):
No, so we can drink our way through it, but this
conversation started because,okay, you claim to be a
southerner.
Now, right, you've got the badaccent and everything.
Speaker 1 (02:31):
Hell yeah, I got that bad accent down here in the.
Speaker 2 (02:34):
South.
Tell our listeners outside ofthe South what is on a breakfast
sandwich.
Speaker 1 (02:41):
What do we put on a breakfast sandwich in the South?
Speaker 2 (02:43):
Yeah, just, you go to some dump and you get a
breakfast sandwich.
What's on it?
Speaker 1 (02:46):
Well, you got to have a biscuit, you got to have
cheese.
You got to have a biscuit, yougot to have some cheese.
American cheese, by the wayit's always American cheese, and
you know what?
The processed American cheeseis still the best, and get it
plastic.
Oh, that's got to have bacon.
You got to have some grease,man, you got to have some
protein, as we like to say.
Speaker 2 (03:07):
All right, so how much should that breakfast
sandwich cost?
Speaker 1 (03:11):
Oh me.
Speaker 2 (03:13):
Well, what number comes to your mind immediately?
Three and a half.
Yeah, so I'm up to five.
I was talking to my businesspartner Chad this morning and he
went to breakfast with somebody$12.50.
Oh no, no, he wasn't even inlike a Ritz-Carlton restaurant
or something $12.50 for abreakfast sandwich.
Speaker 1 (03:32):
Well, I used to joke back before the inflation really
started picking up is that yougo to the Ritz-Carlton.
That's a great $20 hamburger.
But what makes that $20hamburger this is all before the
big boom of all those things a$20 hamburger.
Now I found out, theRitz-Carlton hamburger is $32 to
$37.
Speaker 2 (03:51):
Yeah, I mean right now, if I have lunch including
tip under $20, I'm like, oh, Idid a good job and so we've just
gone through I won't say anunprecedented inflationary time,
because you and I are oldenough to have gone through a
previous one.
But for most people listeningthey haven't seen this kind of
inflation and now the inflationrate is back down to almost a
(04:12):
normal level.
But the prices didn't go backto where they originally were
and it's kind of that Overtonwindow thing.
Do you know about that?
Speaker 1 (04:21):
No, what's the Overton window?
We're about to learn everybody.
Speaker 2 (04:24):
The Overton window is used mostly for politics.
It's kind of like what is anacceptable topic of conversation
and I'm you know you thinkabout what is normal discourse
in politics today.
We may not have talked about 20years ago because it would have
been crazy, and now it's normaland you can kind of apply that
(04:45):
to to gas prices, anything else.
So you know, gas prices for thelongest time around here were
two bucks a gallon, and if itwent up to 250, you were
horrified.
But then when it went up tofour dollars, everybody was
freaking out and then it droppedto three and you were happy,
right.
So it was kind of the newnormal.
We talk about it as the newnormal.
(05:05):
So I'm thinking about that.
When it comes to your business,my business, I'm in commercial
real estate but you havesomething that's immediately
impacted by the cost ofmaterials, the cost of labor,
and we've had a number of peopleon the show recently who just
say, well, just raise your rates.
You should just raise yourrates.
Speaker 1 (05:24):
Yeah, and it's not that easy just to raise your
rates, raise your rates.
So let's talk about thisinflation and what has happened.
My guys when I first startedback in 2008,.
If they could make 18 bucks anhour, they were happy, and a
helper who can make 12 bucks anhour, they'd be happy.
Those are the facts.
I was in industry average.
It was close to everything.
Facts I was in industry average.
(05:46):
It was close to everything.
Now my guys expect 30 an hour,um, and my helpers expect 20 an
hour, with no tools and notransportation.
So it's definitely gone up.
You know labor costs and youknow what I don't begrudge them.
When you think about this guys,you know they have to go buy
food and all the food priceshave gone up.
We just joked about the biscuitprices and then, well, house 50
cent an egg surcharge.
Speaker 2 (06:06):
I mean, my God, the sky is falling.
Speaker 1 (06:08):
Right.
So eggs, yeah Well, that's agreat example of what happened.
So what's happened?
They had to kill 10 millionchickens and so the eggs have
gone scarce and with scarcity,it's a pure example of supply
and demand.
When you have 10 million lesschickens, that's a lot of less
eggs, and now everybody wantseggs, or the normal amount of
people want eggs, and nowthey're being told you can't get
(06:31):
them.
Speaker 2 (06:31):
You know, I've seen people hoard eggs at the
freaking grocery store.
Well, suck on those eggs.
Speaker 1 (06:36):
I saw the same thing and I laughed because I went to
Costco just to get and I wasthere.
I said I'm gonna get some eggs.
They're gone.
I'm like, oh my God, this isbecoming the toilet paper of
COVID, these toilet paper youcan keep in your attic, so, but
it's again.
So the consumer mentality.
Clearly, we're lemmings,Lemmings.
Speaker 2 (06:54):
We are.
Speaker 1 (06:54):
We're totally lemmings.
Yeah, so, but I guilty.
When it went up to three bucksa gallon, I told my brother up
in Michigan.
I said well, I don't know ifwe're going to come home for
Christmas this year because gasis so much.
He said, so 50 cents more agallon is stopping you from
coming to Michigan.
He goes maybe you need to get anew job, buddy.
I was like, oh, that's a goodpoint.
(07:15):
So, but I had that mentality, Ifollowed it and people are doing
the same thing.
You know, I used to rip onboomers who used to, back in the
day, do it themselves and wouldgo when Home Depot wasn't even
a Home Depot.
They would go to Ace and gettheir stuff and take the five or
six trips and they would doeverything at their house
themselves and they'll sit thereand they'll tell you you know,
(07:35):
I used to be able to do this for$18.
I'm like, no, you didn't really.
You spent all weekend and youdidn't really just spend $18
because you forgot the fourtools you had to buy to be able
to do this.
So you know, I think everybodyhas a perception of where the
prices ought to be, and I'mguilty of this.
So how do you handle theinflationary pressures?
Is hard and I will tell you Areyour margins the same as they
(07:56):
were two years ago.
So my margins actually improvedin 24 over 23 because we did
react to it and we did raise ourrates.
I had to.
So I have raised my rates anddid you just?
Speaker 2 (08:10):
arbitrarily go X percent, or did you actually
think about it?
Speaker 1 (08:15):
Oh, I had to think about it a lot because I wanted
to figure out what wouldsomebody and we've had John Ray
on and John you know greatguests talking about the value,
generosity mindset and how toprice yourself.
You prove the value, you canget the price, and so I think we
prove the value now of what wedo.
We talked about that a lot overthe podcast is that when you
first start, are you really avalue play?
(08:36):
I mean, do you really know whatyou're doing, especially as a
handyman working all around thehouse?
But now I think, in our worldfor what we're doing, yes, so I
raised my rates.
My profit margins went up.
However, the things that alsohappened is materials did start
to come down Because remember,in 2020, not so long ago, five
years ago when COVID hit, all ofour material prices went way up
(08:57):
because of scarcity and again,hoarding and demand and
everything else going on.
So the example I'll use thatmakes, I think, the most sense
to me is if you go get a 16-footpressure-treated deck board
from a big box store, when Ifirst started in 08, it was $8
for 16 feet.
So that's do the math 50 centsa foot.
Go to 2012, 13, 14, right inthere it got up to just around
(09:23):
80 cents 90 cents a foot it was.
You could buy a board.
When COVID hit, a 16-foot board, which I told you started at
eight, got up to 12, was $13,went up to $32.
Oh good, lord Right, so has itcome back?
It has it came back, though, to$16 for a 16-foot, and you were
(09:44):
happy about that.
Speaker 2 (09:45):
I.
Speaker 1 (09:50):
So it moved.
It did yeah, yeah, so I'mexcuse me, I'm there.
So now the other thing we'reliving through is you didn't
bring it up, but I will DonaldTrump's now in office and he is
threatening tariffs.
So what did I do?
Well, I did what I call, andI've heard that told to me
before the three phases of truth.
(10:10):
First, I vehemently denied it.
No, not gonna tear if are notgoing to raise my rates, chris,
or a tariff's going to hit yourmaterial.
Material comes from overseas uh,so again, of course you're
treated boards.
You think they all come fromthe south, but Canadian lumber
mills also provide materials forus as well.
Speaker 2 (10:29):
We used to be friends with Canada, so three three
phases of truth.
Speaker 1 (10:32):
I messed it up first.
You.
You ignore it.
No, not going to happen.
You know Trump's just beingTrump, he's just bullying guys
doing his own thing.
It's negotiating time, yeah.
And then I had somebody say no,these tariffs are going to raise
your rates.
And you know you're being allconservative, I know you're a
Trumper.
It got all political.
I'm like whoa, whoa, whoa, dude, this is not political.
(10:53):
I can give two craps, when itcomes to my business, about
who's in office when I'm working.
I said, because I got businessto do and I've been through all
the administrations and I'vebeen able to survive and thrive
through all of them, so I don'tcare when it comes to my
business.
What I will tell you, though,is that I started, so I
(11:20):
vehemently denied it, man.
I got in an argument with theguy, and then I've now had to
accept it as intuitively obviousyes, tariffs are going to raise
the rates.
Now hang on.
Are the tariffs actually goingto be enacted?
I don't know.
Are they going to be pulledback?
I don't know.
Do I think they'll ever go in?
Personally, no, but do I thinkpeople are going to raise the
rates because of the threat oftariffs?
Yep.
So guess what?
It's intuitively obvious.
And, yeah, we're going to gothrough more of a material hike
and so I know things will againback to your.
(11:43):
What was your fancy termOverdue?
Yes, thank you.
So good, going back to it, Ithink we're going to see it up
and then we're going to see itgo back down and I I do think
eventually things will getfigured out.
Um, hopefully, a lot of the um,the the you, the um, world
discord will go away.
Uh, hopefully very shortly, andwe'll start to get back into
(12:05):
more normal.
Because, believe it or not,before the ukrainian war people
didn't know this, but a lot ofour cabinets actually came from
ukraine.
Yeah, the birch plywood, wewould ship it over there.
They would make it and bring itand send it back to us.
Speaker 2 (12:20):
It's still strong.
That's more cost effective, butyour labor rates are never
coming down.
Speaker 1 (12:28):
My labor rates will not be coming down.
Even if I went into a majorrecession, I don't know if guys
will be willing to work for $12and $18 an hour anymore.
Speaker 2 (12:41):
I mean, that would be again you can't make that
assumption, so that's baked inYep and then, with the Overton
window, change your cost ofgoods you know.
Speaker 1 (12:50):
So what can?
Speaker 2 (12:50):
you do.
You can cut costs, but nobodyever cuts their way to success.
You can raise your rates or youcan scale up and just try to
get some efficiency.
Speaker 1 (13:05):
So for me, it's the scale up and efficiency and
figuring out how to raise ratesmildly.
Another great example the rentthat I pay for my commercial
lease and I know you're in it.
You're in that world.
I'm in a five thousand squarefoot light industrial space.
Well, I signed up in 2019.
Well, in 2024, my lease camedue.
(13:27):
I am now paying exactly 50percent more than I used to pay.
And you're like, of course youare Chris, because you guys all
raised your damn rates.
Speaker 2 (13:35):
Alan Well, no, and that goes back to the interest
rates too.
So the people that own thatbuilding, their loan matures and
the bank goes hey, whateverinterest rate you had, we have
to test it against what the newrates are, and if it doesn't, it
could be that they call theloan.
It could be that they haveenough coverage to where they go
(13:57):
ahead and extend the loan, oryou have to come up with some
cash.
And so what is happening?
We've seen a lot of turnover inbuildings.
Or we've just seen hey, yourrates are going up 50% for your
lease rates.
Speaker 1 (14:11):
That's across the board.
Yeah, and so it's happened.
I'm not the only one, and Alanjust explained why it happened.
But here it is I now have.
So, chris, reduce your costs.
Well, my cost just went up.
You just heard my rent andyou're like, I actually actively
look to move and reduce my sizeand my footprint and I couldn't
find anything because the costof moving would have offset the
(14:32):
cost of the increase, right, andI couldn't find low enough on
the uh, no enough square footprice.
So that's again back to thecutting costs.
Speaker 2 (14:40):
I mean there's lots of ways you can do it.
None of them are pleasant, youknow.
There's head count, there'ssqueezing your vendors, there's
finding new vendors.
Speaker 1 (14:46):
I mean there's well you, you hit on one thing.
You said well, how can you usetechnology to help you with this
?
Did I say, that.
You did Well, you said itbefore we got in.
Speaker 2 (14:55):
I was going to say, wow, you gave me my mind.
Speaker 1 (14:58):
No, you said it before we got on the podcast.
You're right, you asked me thatand it stuck with me.
How can I use technology rightnow?
I'll give you an example All ofour suppliers.
So to back up in COVID, I Backup In COVID.
I used to get a supplierincreased notification annually,
annually.
After COVID it went monthly.
Speaker 2 (15:21):
Really.
Speaker 1 (15:22):
They were changing their pricing monthly and if you
ever shop at Depot which I do alot they did a really good job
of updating their app so you cansee exactly who has something
in stock and how much it's goingto cost.
And they were updating thatthing, allegedly, I'd heard,
daily.
So I don't know about that.
I can't prove that, so you cantake that to the bank.
(15:44):
Home Depot did it daily.
No, but they updated it up anddown, up and down, up and down,
and so you have to watch it.
So what do we do?
Well, we make sure when we'repricing things, we're locking in
, we're actually holding firm onour 30-day estimates.
Now is that if you come back tome on day 35, I'm going to have
to relook at everything becauseI don't know?
Yeah, you told me that when youquoted my deck.
Speaker 2 (16:04):
I know, and I think that's fair, because people hold
onto those estimates for sixmonths or a year and they expect
you to honor it.
Speaker 1 (16:10):
I just had a guy.
Here we are, you know, layingthis down in March of 2025 at a
guy.
I looked at his deck, startingin September of last year, and
he asked me if I could honorthat September pricing.
And I'm like I have no idea.
I said, if you really want todo this, you just have to
understand.
I'm fair with you.
There's a reason you came backto me is that you know who I am.
You know who I'm about, but I'mpretty sure I'm going to have
(16:34):
to charge you more because theprice has gone up.
Speaker 2 (16:37):
So it's a great nugget for people who you know.
30 days on your estimate, right.
Speaker 1 (16:41):
Put that 30 day out there.
It used to be for a nudge and asale, but now it's truly for
price conditioning and priceholding.
Back to your other point howcan I use AI in my world to help
me with technology?
You know I've got.
I had four ladies in the officeanswering the phones.
I actually now am down to three.
We had some attrition but wefound some synergy with our
(17:04):
phone answering system.
Speaker 2 (17:05):
Did she do code for whacking?
Speaker 1 (17:08):
No, she quit.
Oh, okay, yeah, and that was agood thing, because we also
found out she wasn't doing shit.
Well, it's that she was on herphone.
Speaker 2 (17:15):
I'm talking about efficiency.
Three people instead of four,yeah.
Speaker 1 (17:21):
Now, it's not because I have AI people answering the
phones.
It's that I've had people usingAI in my office to help answer
questions and we've actuallybuilt a database in our own
database.
Big word, but informationsharing on what we do and what
we can't do and how much.
Pricing is typically based onpictures, so when we see those
(17:41):
pictures they'll be able toprice them better out of the
office.
Speaker 2 (17:44):
So how does that work ?
Sorry, I mean, somebody sendsan, so when we see those
pictures.
They'll be able to price thembetter out of the office.
How does that work, Sorry, Imean somebody sends an email or
is this a phone call?
Speaker 1 (17:50):
So you call the office.
You're definitely still talkingto a human being when you talk
to us and we're going to say weneed pictures because I don't
know what your house looks like.
You know what your house lookslike, I don't.
I need to see what I'm goinginto.
So send me some pictures andthey actually, with one push of
a button now, send a textmessage while they're on the
phone with the customer, sends atext message to their cell
(18:11):
phone saying here's where I wantyou to send the pictures back
to.
We get the pictures back whilethey're there.
Then they can go.
Look at what we chargetypically for items all in our
database that we built.
Again, big word.
And that's just the first stepto how we're using technology to
help us price quicker and havethem answer the questions on the
phone and convert more sales.
And so at that point, there?
Speaker 2 (18:33):
well, actually, didn't you say you're actually
closing deals over the phone now?
Speaker 1 (18:36):
Oh yeah, a lot more, way more than I have.
I don't have a percentage on ityet because we switched
software last year and I lostsome of my data.
But what I do now I have isbetter tracking and I will tell
you.
I know where all the calls arecoming from, I know how long
they're on the phones, I knowwhat was the outcome of the call
.
So that has been really helpfuland given me a lot of insight
(18:57):
into my business.
And another reason, I think,when I say we went from four to
three, probably not technology,but really it was technology
because I was able to see thatand we figured out you didn't
feel like you needed to replacehim.
Speaker 2 (19:07):
No.
Speaker 1 (19:07):
I don't think we will unless we blow up.
I think this year is going tobe nice steady growth and I
think we'll be able to keep upwith it.
Speaker 2 (19:13):
So it had to have been a scary thing to trust
somebody quoting over the phone,because you know how it goes.
You get in there and it's acompletely different animal.
Speaker 1 (19:21):
So we've trained them on how to do that, because with
pictures it's hard and we dothe.
It depends.
A lot of home service companieshave gone to flat rate pricing
and so if you go to HVAC,electric or plumbing, it's one
call.
You know, hey, I need to get my40 gallon hot water heater
replaced, and they don't say hotwater, it says water heater and
that on.
But they all have a flat ratefor it.
(19:42):
First story, don't have to goup a second story.
It doesn't need an expansiontake it's going to be this much
and here in Atlanta the bigplumbing companies are all about
the same price.
Speaker 2 (19:56):
And so they know they've added a little bit of
fat to kind of cover theincident.
They cover the hiccups withthat.
Speaker 1 (20:00):
That's correct, Right .
So we've been more and morelikely to do that.
Plus, in the home servicesworld.
I was on a podcast and I talkedabout this more, More and more
and more people don't want tomess with this.
There is a reason Home Depotand Lowe's stock did suffer a
little bit last year because theDIY market is starting to
shrink again.
Because they're like do Ireally want to go out and buy
(20:30):
those four tools and spend allweekend doing this, or do I want
to spend time with my five andseven year olds?
And that's what people areseeing and that's true.
So people, peace of mind, knowwho they got.
They got a great company on thehook and they're doing the work
for them, are willing to spendthat money.
So that's been awesome as well.
Speaker 2 (20:42):
Now did you have to work with your sales team to get
comfortable?
I mean, I'm assuming you madesome pretty significant price
hikes.
Speaker 1 (20:50):
I have.
When I first started I wentback and looked at this.
I mean in any industry.
Speaker 2 (20:55):
It's funny.
It's really hard for youremployees, Harder for your
employees to accept the ratehikes than the customers,
because the customers don't knowdifferent much.
Speaker 1 (21:05):
I've had a lot of handymen come and go when we
first did this.
Our culture is pretty strongnow.
They'll know within a monthwhether or not this is a good
place for them to work now,which is why my average tenure
is up to seven years.
We just celebratedanniversaries this morning 13,
12, 11, 9, and 7.
Speaker 2 (21:23):
That's fantastic.
Yeah, that's been great.
Speaker 1 (21:25):
But in the beginning, when we started raising rates,
I'll give you an example we havehad the half-day and full-day
rates, half-day and full-dayhandyman going now for 13 of my
16 years, pretty consistently.
When I first started myhalf-day rate was 320.
My full-day rate was 640.
So you know it's easy, right?
(21:48):
So got it Even for me, Right?
And so then I moved them up to400 and 700.
And I had guys going no, Ican't charge that, I can't do
that, I'm gouging people.
We're not gouging people, we'redoing a great service for them.
Today our rates are 890 for afull day and 490 for a half day,
or 470.
Yeah.90 for a full day and$4.90 for a half day, or $4.70.
Yeah, $4.90 for a half day,$8.90 for a full day.
Why?
(22:09):
Because we can knock out somany different things that
people ask for.
I have to pay more for my guysto do the job.
But we continually train andagain back to John Ray provide
the value that people love andpeople now are thrilled when we
walk out of there and they'rejust absolutely just tickled
silly in writing us a $1,200check because this guy knocked
(22:31):
it out, and then they actuallyprovide him a review.
I've gotten more reviews perday in the last six months than
I've gotten since I started.
Does the sticker shock hit youremployees more than it hit the
customer?
A hundred percent.
I tell my guys don't write thecheck, let the customer write
the check.
You have no idea where they'recoming from, and it's not that
they're all full of money.
Where they're coming from is Iwould rather just pay you to
(22:51):
make this go away.
Please just make it go away, soI don't ever have to look at it
again.
Speaker 2 (22:55):
Well, and I think with anything there's sort of
that number in their head, likeI asked you about the breakfast
sandwich, what do you think itshould be?
And then all of a sudden youget this number that's a lot
higher.
Now, not $12.50, but if yousaid $3.50, but if you saw $6,
you would have just kind of gone.
I guess that's what it is now.
Speaker 1 (23:12):
Yeah, I would have paid $6.
Would I pay $12.50?
I'd be like no, because I'mthinking to myself I can go next
door to somewhere and I can geta full meal, which you can't,
but I know, but that's what youstill think.
I still think that because oneof the biggest enemies of my
company is me and my mentality.
When I'm pricing things, I'mlike, ah, it can't be that much.
(23:33):
Oh yeah, towel guys arecharging that much.
I'm like, well, that's crap.
Speaker 2 (23:37):
How quickly are you aware of whether or not your
margins are still good or not?
Speaker 1 (23:41):
Monthly, monthly, monthly 30 days in a row 30 days
, but I'm always lookingbackwards, never forwards, and
after 30 days I know something'shappened, but usually that
means 90 days of this has beenhappening.
I still say this For callscoming in, I use three weeks.
If I have three weeks where mycalls have declined, I have a
(24:02):
trend.
If three weeks where my callsare going up, I know we're
coming back into spring andthings are rocking, or if
they're not coming up like Ithought, I'm like oh, what's
going on?
So that's one for my pricing.
It takes about three months.
So I say monthly, we look at it, but it takes me three months
(24:25):
to make a reaction to it,because it's hard to react and
all the different things we do.
Yeah, you got a lot of parts.
Yeah, so I again.
I just kept on telling a guylocally he's got 250 trucks on
the road.
He's just, you know, got peopleeverywhere.
I said I wish I just didheating and air.
Speaker 2 (24:35):
I really do we established that on a previous
podcast yes, because what wereyou thinking?
Speaker 1 (24:40):
because he knows exactly where his prices are
going and they're coming fromone or two vendors.
So that's it.
I know we're going to wrap thisup.
You guys have listened to alittle bit of what to do, so
what are your takeaways?
You still listen to this thing.
Yeah, inflation is here.
The tariffs are going to impactyou, whether they ever happen
or not.
They're going to impact you.
Don't get political.
(25:01):
I don't give a shit about that.
You need to be able to react toit, because somebody's going to
raise rates on you and you'renot going to see it.
Get in tune with somebody who'ssupplying you parts, because
they're going to raise a rate,and sometimes they're really
good at telling you andsometimes they're kind of afraid
to tell you.
Right, and to Alan's point, doyou want to raise your rates?
Yeah, you might want to look atit.
(25:26):
Find a way, uh, but you alsogotta find a way to work a
little more lean to me and usetechnology to your advantage,
however you can in your business.
All right, man, we gotta keepgoing.
We're gonna rock and roll.
Man, I can't wait to talk toyou guys all next week, because
we got some great episodescoming up.
We've got some dynamite guestsand we're gonna go make this
thing happen.
Keep going up that mountain,because you know what, going up,
sometimes you got to go down togo up.
When you scale a mountain,sometimes it feels like it sucks
(25:47):
and you know what, if you guyslistened to a couple of weeks or
episodes ago, I was in a funk,but I'm back out of it, man,
we're in rock and roll.
So let's go make it happen2025,.
Look out, we're about to kickyour ass.
Cheers everybody.
And so you have to watch it.
So what do we do?
Well, we make sure when we'repricing things, we're locking in
, we're actually holding firm onour 30-day estimates.
Now is that if you come back tome on day 35, I'm going to have
to relook at everything becauseI don't know?
Yeah, you told me that when youquoted my deck.
Speaker 2 (00:13):
I know, and I think that's fair, because people hold
onto those estimates for sixmonths or a year and they expect
you to.
Speaker 1 (00:19):
I had a guy here we are laying this down in March of
2025.
I had a guy.
I looked at his deck startingin September of last year and he
asked me if I could honor thatSeptember pricing.
And I'm like I have no idea.
I said, if you really want todo this, you just have to
understand.
I'm fair with you.
There's a reason you came backto me is that you know who I am.
You know who I'm about, but I'mpretty sure I'm going to have
(00:43):
to charge you more because theprice has gone up.
Speaker 2 (00:46):
So it's a great nugget for people who's you know
, 30 days on your estimate.
Speaker 1 (00:51):
Welcome to the Small Business Safari where I help
guide you to avoid those traps,pitfalls and dangers that lurk
when navigating the wild worldof small business ownership.
I'll share those gold nuggetsof information and invite guests
to help accelerate your ascentto that mountaintop of success.
It's a jungle out there and Iguests to help accelerate your
ascent to that mountaintop ofsuccess.
It's a jungle out there and Iwant to help you traverse
through the levels of owningyour own business that can get
(01:11):
you bogged down and distract youfrom hitting your own personal
and professional goals.
So strap in adventure team andlet's take a ride through the
safari and get you to themountaintop man.
I love that music and we havegot to rock this.
We're going to do this a littlebit different.
Al and I are going to be instudio together by ourselves.
Speaker 2 (01:35):
Don't sound so sad about it.
I mean, we have a good time.
Speaker 1 (01:37):
We do always, of course.
Well, cheers, We'll drink tothat.
So we're going to talk what thistariff thing and what the 2025
economy thing looks like andwhat's going on in my biz.
So as we do that, I'm going togive you kind of my thoughts on
this, and I've been on a coupleof other really cool podcasts
(01:58):
talking about what other peopleare thinking, and we're
listening to what's going on inthe world and stuff.
So let's rock into it.
Alan says he's got a lot ofquestions.
I started talking, he goes canyou just save that for the
podcast?
I'm like oh, all right, don'tleave it in the room, let's get
it going.
Come on everybody, let's gofigure out what the hell is
going to happen to us in 2025.
We don't have the answers.
Speaker 2 (02:20):
No, so we can drink our way through it, but this
conversation started because,okay, you claim to be a
southerner.
Now, right, you've got the badaccent and everything.
Speaker 1 (02:31):
Hell yeah, I got that bad accent down here in the.
Speaker 2 (02:34):
South.
Tell our listeners outside ofthe South what is on a breakfast
sandwich.
Speaker 1 (02:41):
What do we put on a breakfast sandwich in the South?
Speaker 2 (02:43):
Yeah, just, you go to some dump and you get a
breakfast sandwich.
What's on it?
Speaker 1 (02:46):
Well, you got to have a biscuit, you got to have
cheese.
You got to have a biscuit, yougot to have some cheese.
American cheese, by the wayit's always American cheese, and
you know what?
The processed American cheeseis still the best, and get it
plastic.
Oh, that's got to have bacon.
You got to have some grease,man, you got to have some
protein, as we like to say.
Speaker 2 (03:07):
All right, so how much should that breakfast
sandwich cost?
Speaker 1 (03:11):
Oh me.
Speaker 2 (03:13):
Well, what number comes to your mind immediately?
Three and a half.
Yeah, so I'm up to five.
I was talking to my businesspartner Chad this morning and he
went to breakfast with somebody$12.50.
Oh no, no, he wasn't even inlike a Ritz-Carlton restaurant
or something $12.50 for abreakfast sandwich.
Speaker 1 (03:32):
Well, I used to joke back before the inflation really
started picking up is that yougo to the Ritz-Carlton.
That's a great $20 hamburger.
But what makes that $20hamburger this is all before the
big boom of all those things a$20 hamburger.
Now I found out, theRitz-Carlton hamburger is $32 to
$37.
Speaker 2 (03:51):
Yeah, I mean right now, if I have lunch including
tip under $20, I'm like, oh, Idid a good job and so we've just
gone through I won't say anunprecedented inflationary time,
because you and I are oldenough to have gone through a
previous one.
But for most people listeningthey haven't seen this kind of
inflation and now the inflationrate is back down to almost a
(04:12):
normal level.
But the prices didn't go backto where they originally were
and it's kind of that Overtonwindow thing.
Do you know about that?
Speaker 1 (04:21):
No, what's the Overton window?
We're about to learn everybody.
Speaker 2 (04:24):
The Overton window is used mostly for politics.
It's kind of like what is anacceptable topic of conversation
and I'm you know you thinkabout what is normal discourse
in politics today.
We may not have talked about 20years ago because it would have
been crazy, and now it's normaland you can kind of apply that
(04:45):
to to gas prices, anything else.
So you know, gas prices for thelongest time around here were
two bucks a gallon, and if itwent up to 250, you were
horrified.
But then when it went up tofour dollars, everybody was
freaking out and then it droppedto three and you were happy,
right.
So it was kind of the newnormal.
We talk about it as the newnormal.
(05:05):
So I'm thinking about that.
When it comes to your business,my business, I'm in commercial
real estate but you havesomething that's immediately
impacted by the cost ofmaterials, the cost of labor,
and we've had a number of peopleon the show recently who just
say, well, just raise your rates.
You should just raise yourrates.
Speaker 1 (05:24):
Yeah, and it's not that easy just to raise your
rates, raise your rates.
So let's talk about thisinflation and what has happened.
My guys when I first startedback in 2008,.
If they could make 18 bucks anhour, they were happy, and a
helper who can make 12 bucks anhour, they'd be happy.
Those are the facts.
I was in industry average.
It was close to everything.
Facts I was in industry average.
(05:46):
It was close to everything.
Now my guys expect 30 an hour,um, and my helpers expect 20 an
hour, with no tools and notransportation.
So it's definitely gone up.
You know labor costs and youknow what I don't begrudge them.
When you think about this guys,you know they have to go buy
food and all the food priceshave gone up.
We just joked about the biscuitprices and then, well, house 50
cent an egg surcharge.
Speaker 2 (06:06):
I mean, my God, the sky is falling.
Speaker 1 (06:08):
Right.
So eggs, yeah Well, that's agreat example of what happened.
So what's happened?
They had to kill 10 millionchickens and so the eggs have
gone scarce and with scarcity,it's a pure example of supply
and demand.
When you have 10 million lesschickens, that's a lot of less
eggs, and now everybody wantseggs, or the normal amount of
people want eggs, and nowthey're being told you can't get
(06:31):
them.
Speaker 2 (06:31):
You know, I've seen people hoard eggs at the
freaking grocery store.
Well, suck on those eggs.
Speaker 1 (06:36):
I saw the same thing and I laughed because I went to
Costco just to get and I wasthere.
I said I'm gonna get some eggs.
They're gone.
I'm like, oh my God, this isbecoming the toilet paper of
COVID, these toilet paper youcan keep in your attic, so, but
it's again.
So the consumer mentality.
Clearly, we're lemmings,Lemmings.
Speaker 2 (06:54):
We are.
Speaker 1 (06:54):
We're totally lemmings.
Yeah, so, but I guilty.
When it went up to three bucksa gallon, I told my brother up
in Michigan.
I said well, I don't know ifwe're going to come home for
Christmas this year because gasis so much.
He said, so 50 cents more agallon is stopping you from
coming to Michigan.
He goes maybe you need to get anew job, buddy.
I was like, oh, that's a goodpoint.
(07:15):
So, but I had that mentality, Ifollowed it and people are doing
the same thing.
You know, I used to rip onboomers who used to, back in the
day, do it themselves and wouldgo when Home Depot wasn't even
a Home Depot.
They would go to Ace and gettheir stuff and take the five or
six trips and they would doeverything at their house
themselves and they'll sit thereand they'll tell you you know,
(07:35):
I used to be able to do this for$18.
I'm like, no, you didn't really.
You spent all weekend and youdidn't really just spend $18
because you forgot the fourtools you had to buy to be able
to do this.
So you know, I think everybodyhas a perception of where the
prices ought to be, and I'mguilty of this.
So how do you handle theinflationary pressures?
Is hard and I will tell you Areyour margins the same as they
(07:56):
were two years ago.
So my margins actually improvedin 24 over 23 because we did
react to it and we did raise ourrates.
I had to.
So I have raised my rates anddid you just?
Speaker 2 (08:10):
arbitrarily go X percent, or did you actually
think about it?
Speaker 1 (08:15):
Oh, I had to think about it a lot because I wanted
to figure out what wouldsomebody and we've had John Ray
on and John you know greatguests talking about the value,
generosity mindset and how toprice yourself.
You prove the value, you canget the price, and so I think we
prove the value now of what wedo.
We talked about that a lot overthe podcast is that when you
first start, are you really avalue play?
(08:36):
I mean, do you really know whatyou're doing, especially as a
handyman working all around thehouse?
But now I think, in our worldfor what we're doing, yes, so I
raised my rates.
My profit margins went up.
However, the things that alsohappened is materials did start
to come down Because remember,in 2020, not so long ago, five
years ago when COVID hit, all ofour material prices went way up
(08:57):
because of scarcity and again,hoarding and demand and
everything else going on.
So the example I'll use thatmakes, I think, the most sense
to me is if you go get a 16-footpressure-treated deck board
from a big box store, when Ifirst started in 08, it was $8
for 16 feet.
So that's do the math 50 centsa foot.
Go to 2012, 13, 14, right inthere it got up to just around
(09:23):
80 cents 90 cents a foot it was.
You could buy a board.
When COVID hit, a 16-foot board, which I told you started at
eight, got up to 12, was $13,went up to $32.
Oh good, lord Right, so has itcome back?
It has it came back, though, to$16 for a 16-foot, and you were
(09:44):
happy about that.
Speaker 2 (09:45):
I.
Speaker 1 (09:50):
So it moved.
It did yeah, yeah, so I'mexcuse me, I'm there.
So now the other thing we'reliving through is you didn't
bring it up, but I will DonaldTrump's now in office and he is
threatening tariffs.
So what did I do?
Well, I did what I call, andI've heard that told to me
before the three phases of truth.
(10:10):
First, I vehemently denied it.
No, not gonna tear if are notgoing to raise my rates, chris,
or a tariff's going to hit yourmaterial.
Material comes from overseas uh,so again, of course you're
treated boards.
You think they all come fromthe south, but Canadian lumber
mills also provide materials forus as well.
Speaker 2 (10:29):
We used to be friends with Canada, so three three
phases of truth.
Speaker 1 (10:32):
I messed it up first.
You.
You ignore it.
No, not going to happen.
You know Trump's just beingTrump, he's just bullying guys
doing his own thing.
It's negotiating time, yeah.
And then I had somebody say no,these tariffs are going to raise
your rates.
And you know you're being allconservative, I know you're a
Trumper.
It got all political.
I'm like whoa, whoa, whoa, dude, this is not political.
(10:53):
I can give two craps, when itcomes to my business, about
who's in office when I'm working.
I said, because I got businessto do and I've been through all
the administrations and I'vebeen able to survive and thrive
through all of them, so I don'tcare when it comes to my
business.
What I will tell you, though,is that I started, so I
(11:20):
vehemently denied it, man.
I got in an argument with theguy, and then I've now had to
accept it as intuitively obviousyes, tariffs are going to raise
the rates.
Now hang on.
Are the tariffs actually goingto be enacted?
I don't know.
Are they going to be pulledback?
I don't know.
Do I think they'll ever go in?
Personally, no, but do I thinkpeople are going to raise the
rates because of the threat oftariffs?
Yep.
So guess what?
It's intuitively obvious.
And, yeah, we're going to gothrough more of a material hike
and so I know things will againback to your.
(11:43):
What was your fancy termOverdue?
Yes, thank you.
So good, going back to it, Ithink we're going to see it up
and then we're going to see itgo back down and I I do think
eventually things will getfigured out.
Um, hopefully, a lot of the um,the the you, the um, world
discord will go away.
Uh, hopefully very shortly, andwe'll start to get back into
(12:05):
more normal.
Because, believe it or not,before the ukrainian war people
didn't know this, but a lot ofour cabinets actually came from
ukraine.
Yeah, the birch plywood, wewould ship it over there.
They would make it and bring itand send it back to us.
Speaker 2 (12:20):
It's still strong.
That's more cost effective, butyour labor rates are never
coming down.
Speaker 1 (12:28):
My labor rates will not be coming down.
Even if I went into a majorrecession, I don't know if guys
will be willing to work for $12and $18 an hour anymore.
Speaker 2 (12:41):
I mean, that would be again you can't make that
assumption, so that's baked inYep and then, with the Overton
window, change your cost ofgoods you know.
Speaker 1 (12:50):
So what can?
Speaker 2 (12:50):
you do.
You can cut costs, but nobodyever cuts their way to success.
You can raise your rates or youcan scale up and just try to
get some efficiency.
Speaker 1 (13:05):
So for me, it's the scale up and efficiency and
figuring out how to raise ratesmildly.
Another great example the rentthat I pay for my commercial
lease and I know you're in it.
You're in that world.
I'm in a five thousand squarefoot light industrial space.
Well, I signed up in 2019.
Well, in 2024, my lease camedue.
(13:27):
I am now paying exactly 50percent more than I used to pay.
And you're like, of course youare Chris, because you guys all
raised your damn rates.
Speaker 2 (13:35):
Alan Well, no, and that goes back to the interest
rates too.
So the people that own thatbuilding, their loan matures and
the bank goes hey, whateverinterest rate you had, we have
to test it against what the newrates are, and if it doesn't, it
could be that they call theloan.
It could be that they haveenough coverage to where they go
(13:57):
ahead and extend the loan, oryou have to come up with some
cash.
And so what is happening?
We've seen a lot of turnover inbuildings.
Or we've just seen hey, yourrates are going up 50% for your
lease rates.
Speaker 1 (14:11):
That's across the board.
Yeah, and so it's happened.
I'm not the only one, and Alanjust explained why it happened.
But here it is I now have.
So, chris, reduce your costs.
Well, my cost just went up.
You just heard my rent andyou're like, I actually actively
look to move and reduce my sizeand my footprint and I couldn't
find anything because the costof moving would have offset the
(14:32):
cost of the increase, right, andI couldn't find low enough on
the uh, no enough square footprice.
So that's again back to thecutting costs.
Speaker 2 (14:40):
I mean there's lots of ways you can do it.
None of them are pleasant, youknow.
There's head count, there'ssqueezing your vendors, there's
finding new vendors.
Speaker 1 (14:46):
I mean there's well you, you hit on one thing.
You said well, how can you usetechnology to help you with this
?
Did I say, that.
You did Well, you said itbefore we got in.
Speaker 2 (14:55):
I was going to say, wow, you gave me my mind.
Speaker 1 (14:58):
No, you said it before we got on the podcast.
You're right, you asked me thatand it stuck with me.
How can I use technology rightnow?
I'll give you an example All ofour suppliers.
So to back up in COVID, I Backup In COVID.
I used to get a supplierincreased notification annually,
annually.
After COVID it went monthly.
Speaker 2 (15:21):
Really.
Speaker 1 (15:22):
They were changing their pricing monthly and if you
ever shop at Depot which I do alot they did a really good job
of updating their app so you cansee exactly who has something
in stock and how much it's goingto cost.
And they were updating thatthing, allegedly, I'd heard,
daily.
So I don't know about that.
I can't prove that, so you cantake that to the bank.
(15:44):
Home Depot did it daily.
No, but they updated it up anddown, up and down, up and down,
and so you have to watch it.
So what do we do?
Well, we make sure when we'repricing things, we're locking in
, we're actually holding firm onour 30-day estimates.
Now is that if you come back tome on day 35, I'm going to have
to relook at everything becauseI don't know?
Yeah, you told me that when youquoted my deck.
Speaker 2 (16:04):
I know, and I think that's fair, because people hold
onto those estimates for sixmonths or a year and they expect
you to honor it.
Speaker 1 (16:10):
I just had a guy.
Here we are, you know, layingthis down in March of 2025 at a
guy.
I looked at his deck, startingin September of last year, and
he asked me if I could honorthat September pricing.
And I'm like I have no idea.
I said, if you really want todo this, you just have to
understand.
I'm fair with you.
There's a reason you came backto me is that you know who I am.
You know who I'm about, but I'mpretty sure I'm going to have
(16:34):
to charge you more because theprice has gone up.
Speaker 2 (16:37):
So it's a great nugget for people who you know.
30 days on your estimate, right.
Speaker 1 (16:41):
Put that 30 day out there.
It used to be for a nudge and asale, but now it's truly for
price conditioning and priceholding.
Back to your other point howcan I use AI in my world to help
me with technology?
You know I've got.
I had four ladies in the officeanswering the phones.
I actually now am down to three.
We had some attrition but wefound some synergy with our
(17:04):
phone answering system.
Speaker 2 (17:05):
Did she do code for whacking?
Speaker 1 (17:08):
No, she quit.
Oh, okay, yeah, and that was agood thing, because we also
found out she wasn't doing shit.
Well, it's that she was on herphone.
Speaker 2 (17:15):
I'm talking about efficiency.
Three people instead of four,yeah.
Speaker 1 (17:21):
Now, it's not because I have AI people answering the
phones.
It's that I've had people usingAI in my office to help answer
questions and we've actuallybuilt a database in our own
database.
Big word, but informationsharing on what we do and what
we can't do and how much.
Pricing is typically based onpictures, so when we see those
(17:41):
pictures they'll be able toprice them better out of the
office.
Speaker 2 (17:44):
So how does that work ?
Sorry, I mean, somebody sendsan, so when we see those
pictures.
They'll be able to price thembetter out of the office.
How does that work, Sorry, Imean somebody sends an email or
is this a phone call?
Speaker 1 (17:50):
So you call the office.
You're definitely still talkingto a human being when you talk
to us and we're going to say weneed pictures because I don't
know what your house looks like.
You know what your house lookslike, I don't.
I need to see what I'm goinginto.
So send me some pictures andthey actually, with one push of
a button now, send a textmessage while they're on the
phone with the customer, sends atext message to their cell
(18:11):
phone saying here's where I wantyou to send the pictures back
to.
We get the pictures back whilethey're there.
Then they can go.
Look at what we chargetypically for items all in our
database that we built.
Again, big word.
And that's just the first stepto how we're using technology to
help us price quicker and havethem answer the questions on the
phone and convert more sales.
And so at that point, there?
Speaker 2 (18:33):
well, actually, didn't you say you're actually
closing deals over the phone now?
Speaker 1 (18:36):
Oh yeah, a lot more, way more than I have.
I don't have a percentage on ityet because we switched
software last year and I lostsome of my data.
But what I do now I have isbetter tracking and I will tell
you.
I know where all the calls arecoming from, I know how long
they're on the phones, I knowwhat was the outcome of the call
.
So that has been really helpfuland given me a lot of insight
(18:57):
into my business.
And another reason, I think,when I say we went from four to
three, probably not technology,but really it was technology
because I was able to see thatand we figured out you didn't
feel like you needed to replacehim.
Speaker 2 (19:07):
No.
Speaker 1 (19:07):
I don't think we will unless we blow up.
I think this year is going tobe nice steady growth and I
think we'll be able to keep upwith it.
Speaker 2 (19:13):
So it had to have been a scary thing to trust
somebody quoting over the phone,because you know how it goes.
You get in there and it's acompletely different animal.
Speaker 1 (19:21):
So we've trained them on how to do that, because with
pictures it's hard and we dothe.
It depends.
A lot of home service companieshave gone to flat rate pricing
and so if you go to HVAC,electric or plumbing, it's one
call.
You know, hey, I need to get my40 gallon hot water heater
replaced, and they don't say hotwater, it says water heater and
that on.
But they all have a flat ratefor it.
(19:42):
First story, don't have to goup a second story.
It doesn't need an expansiontake it's going to be this much
and here in Atlanta the bigplumbing companies are all about
the same price.
Speaker 2 (19:56):
And so they know they've added a little bit of
fat to kind of cover theincident.
They cover the hiccups withthat.
Speaker 1 (20:00):
That's correct, Right .
So we've been more and morelikely to do that.
Plus, in the home servicesworld.
I was on a podcast and I talkedabout this more, More and more
and more people don't want tomess with this.
There is a reason Home Depotand Lowe's stock did suffer a
little bit last year because theDIY market is starting to
shrink again.
Because they're like do Ireally want to go out and buy
(20:30):
those four tools and spend allweekend doing this, or do I want
to spend time with my five andseven year olds?
And that's what people areseeing and that's true.
So people, peace of mind, knowwho they got.
They got a great company on thehook and they're doing the work
for them, are willing to spendthat money.
So that's been awesome as well.
Speaker 2 (20:42):
Now did you have to work with your sales team to get
comfortable?
I mean, I'm assuming you madesome pretty significant price
hikes.
Speaker 1 (20:50):
I have.
When I first started I wentback and looked at this.
I mean in any industry.
Speaker 2 (20:55):
It's funny.
It's really hard for youremployees, Harder for your
employees to accept the ratehikes than the customers,
because the customers don't knowdifferent much.
Speaker 1 (21:05):
I've had a lot of handymen come and go when we
first did this.
Our culture is pretty strongnow.
They'll know within a monthwhether or not this is a good
place for them to work now,which is why my average tenure
is up to seven years.
We just celebratedanniversaries this morning 13,
12, 11, 9, and 7.
Speaker 2 (21:23):
That's fantastic.
Yeah, that's been great.
Speaker 1 (21:25):
But in the beginning, when we started raising rates,
I'll give you an example we havehad the half-day and full-day
rates, half-day and full-dayhandyman going now for 13 of my
16 years, pretty consistently.
When I first started myhalf-day rate was 320.
My full-day rate was 640.
So you know it's easy, right?
(21:48):
So got it Even for me, Right?
And so then I moved them up to400 and 700.
And I had guys going no, Ican't charge that, I can't do
that, I'm gouging people.
We're not gouging people, we'redoing a great service for them.
Today our rates are 890 for afull day and 490 for a half day,
or 470.
Yeah.90 for a full day and$4.90 for a half day, or $4.70.
Yeah, $4.90 for a half day,$8.90 for a full day.
Why?
(22:09):
Because we can knock out somany different things that
people ask for.
I have to pay more for my guysto do the job.
But we continually train andagain back to John Ray provide
the value that people love andpeople now are thrilled when we
walk out of there and they'rejust absolutely just tickled
silly in writing us a $1,200check because this guy knocked
(22:31):
it out, and then they actuallyprovide him a review.
I've gotten more reviews perday in the last six months than
I've gotten since I started.
Does the sticker shock hit youremployees more than it hit the
customer?
A hundred percent.
I tell my guys don't write thecheck, let the customer write
the check.
You have no idea where they'recoming from, and it's not that
they're all full of money.
Where they're coming from is Iwould rather just pay you to
(22:51):
make this go away.
Please just make it go away, soI don't ever have to look at it
again.
Speaker 2 (22:55):
Well, and I think with anything there's sort of
that number in their head, likeI asked you about the breakfast
sandwich, what do you think itshould be?
And then all of a sudden youget this number that's a lot
higher.
Now, not $12.50, but if yousaid $3.50, but if you saw $6,
you would have just kind of gone.
I guess that's what it is now.
Speaker 1 (23:12):
Yeah, I would have paid $6.
Would I pay $12.50?
I'd be like no, because I'mthinking to myself I can go next
door to somewhere and I can geta full meal, which you can't,
but I know, but that's what youstill think.
I still think that because oneof the biggest enemies of my
company is me and my mentality.
When I'm pricing things, I'mlike, ah, it can't be that much.
(23:33):
Oh yeah, towel guys arecharging that much.
I'm like, well, that's crap.
Speaker 2 (23:37):
How quickly are you aware of whether or not your
margins are still good or not?
Speaker 1 (23:41):
Monthly, monthly, monthly 30 days in a row 30 days
, but I'm always lookingbackwards, never forwards, and
after 30 days I know something'shappened, but usually that
means 90 days of this has beenhappening.
I still say this For callscoming in, I use three weeks.
If I have three weeks where mycalls have declined, I have a
(24:02):
trend.
If three weeks where my callsare going up, I know we're
coming back into spring andthings are rocking, or if
they're not coming up like Ithought, I'm like oh, what's
going on?
So that's one for my pricing.
It takes about three months.
So I say monthly, we look at it, but it takes me three months
(24:25):
to make a reaction to it,because it's hard to react and
all the different things we do.
Yeah, you got a lot of parts.
Yeah, so I again.
I just kept on telling a guylocally he's got 250 trucks on
the road.
He's just, you know, got peopleeverywhere.
I said I wish I just didheating and air.
Speaker 2 (24:35):
I really do we established that on a previous
podcast yes, because what wereyou thinking?
Speaker 1 (24:40):
because he knows exactly where his prices are
going and they're coming fromone or two vendors.
So that's it.
I know we're going to wrap thisup.
You guys have listened to alittle bit of what to do, so
what are your takeaways?
You still listen to this thing.
Yeah, inflation is here.
The tariffs are going to impactyou, whether they ever happen
or not.
They're going to impact you.
Don't get political.
(25:01):
I don't give a shit about that.
You need to be able to react toit, because somebody's going to
raise rates on you and you'renot going to see it.
Get in tune with somebody who'ssupplying you parts, because
they're going to raise a rate,and sometimes they're really
good at telling you andsometimes they're kind of afraid
to tell you.
Right, and to Alan's point, doyou want to raise your rates?
Yeah, you might want to look atit.
(25:26):
Find a way, uh, but you alsogotta find a way to work a
little more lean to me and usetechnology to your advantage,
however you can in your business.
All right, man, we gotta keepgoing.
We're gonna rock and roll.
Man, I can't wait to talk toyou guys all next week, because
we got some great episodescoming up.
We've got some dynamite guestsand we're gonna go make this
thing happen.
Keep going up that mountain,because you know what, going up,
sometimes you got to go down togo up.
When you scale a mountain,sometimes it feels like it sucks
(25:47):
and you know what, if you guyslistened to a couple of weeks or
episodes ago, I was in a funk,but I'm back out of it, man,
we're in rock and roll.
So let's go make it happen2025,.
Look out, we're about to kickyour ass.
Cheers everybody.
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