Hey, welcome back to another HVAC Success Secrets Revealed with Thaddeus and Evan. We are still at Service World Expo, and we are live with Billy Stevens. Billy is a legend within the space. He owned and operated his own company in the Dallas market. He sold that eventually started the wrench group as well, left that, and now he is running Sera systems and he has his demo company for which he runs Sera through called BillyGo. Which is now approaching, I think, 15 million.
They will hit by the end of this year, maybe 14 and a half, he says. But truly a tremendous company. They're doing unbelievable things. And Billy has been around for a really long time. He's been through the market influxes, the ups and the downs, the recessions. And he knows a thing or two around running a business through tough times. And at the end of the day, one of the things that we talked about in this episode is slowing down to go fast.
And getting really, really good at what our processes are and how can we become more efficient? So I love that part of the conversation. I think you will as well. Enjoy the show with Billy Stevens.
Welcome to HVAC success secrets revealed a show where we interview industry leaders and disruptors revealing the success secrets to create and unleash. Ultimate HVAC business. Now your hosts, Thaddeus and Evan.
Hey, welcome back to another episode of HVAC Success Secrets with Thaddeus and Evan. I'm Thaddeus. That's Evan, the man that needs no introductions Billy Stevens with both BillyGo and Sera. So thank you for taking some time. Been a minute since we've had you on you guys have been up to some fun shit.
Yeah, it's been a heck of a ride.
Oh man. I guess let's, talk about where you guys are at. What's happening? What's rocking and rolling?
Wow. So obviously we're here at a service world expo and we have us a nice little booth here that we're all sitting in and we did we met a lot of new friends today. Had a very good turnout. This morning we, did a conference for about 45 minutes. We talked about four things you can do to separate yourself from your competitors. and it was a standing room only deal. I think we had 110 people that were in the room that probably could only fit about 70 or 80 we escaped the fire marshal. But anyway.
I started off really good considering the fact that I probably didn't get home until about 1:30 last night or to my hotel, wind down and go to bed. Yeah. So I fell asleep and woke right back up. So I'm pretty tired right now. I'll be honest with you. Probably look tired, but you know, makeup's a little smeared.
Well, I appreciate you taking the time at the end of the end of a long day to sit jot with us. So, I'm curious. What are the four things that somebody can do to separate themselves from their competitors?
Obviously yeah, so that's a great question. So this morning what we really talked about is it's just really standing out. We're in an industry where it's ever changing. It's never going to stop. It's changing every day faster than it did the day before. And, we have all of these things that we have to compete with. Back then, back in the old days, you competed with your, competitors in your area. And we were all uneducated and you just did the best you could.
And now you have, P. E. Firms loaded with lots of money. You have utilities that are buying companies that are interested in being involved in our space. We have, Angie's list, home advisor, things like this, all this competition and we're getting lost in the shuffle. And so I really would like to focus on how do we stand out. And a lot of times to stand out, we got to just do what other people just aren't willing to do. And that's really what it comes down to.
But what are they not really willing to do is the question, right? We need to identify those things. And that's what I help people do today is identify what will make you stand out. And one of the things that I really talk about, I'm always talking about memberships and memberships are very vital, important part of your business and something that you need to do to grow in today's world.
You gotta own your backyard with memberships and you need to condense your service area and get better service. So standing out is slowing down to go fast. and so one of the ways we do this that I like to tell these folks is, people expect instant service in everything we do. You have this computer in your hand and you can get food at your house and 30 minutes or less.
Where we used to have to go drive and get it or whatever, or you wait till your kids drive and you're like, all right, finally, we can get someone else to go. But and so our industry just hasn't figured this out yet. And so that's one of the things we started doing. Very first thing we started doing at Sera was being able to open up the, get rid of the friction between us and the customer and get back to actually serving the customer because we have lost that art. All right.
That art has been lost. We all say we give great service. Our customers love us. But in our world, great services. I don't know when we're coming. We're gonna do our best to come today. We're very busy. Just book with us because I've been told I need to book this thing you book them and then you're on to the next thing. Not one time during that entire conversation. Did anyone even think about this person having 100 degree house? They may have a baby, whatever their circumstances are.
They're not, we're not thinking about the customer anymore. We say we are, but we don't. We're thinking about the opportunity. Is this, how old's your system? We need to ask these questions. We need to know this. We need to take advantage of the opportunity. But, if you want to stand out, you've got to think about the customer. And if you start thinking about the customer, they're going to come to you because no one else is doing it.
And this is the easiest way to do it is actually thinking about them first and foremost, and then offering them easy ways to do business with you. We've been told for years and years and years that if a customer won't pay a dispatch fee, then they're not a good customer. How in the world is that possible? Who came up with that?
Someone was looking for the opportunity, yeah.
And so what we've done is we put up this wall to keep from doing business with you. I'm going to charge you 79 to come out. Okay. Well, I don't want to pay 79. Well, I can't do your business today. What? You're judging it by a 79 fee. So we've got to get away from that. Zero dispatch fees. Four and a half years. I've been running a plumbing HVAC company that I've started since my retirement.
We've never charged a dispatch fee company's gonna do over, almost 14, 14, over 14 million, almost 15 million this year. Maybe more. We have a good fall. In Texas. what time of the year it is for us because we stand out. We never slow down. We're packed today. I think it's very cool today in Dallas for Dallas standards. And we had a full board all day and we'll have a full board tomorrow. And it's because we really do want to make a difference for the customer, right?
that is really the most important thing is let's get back to the customer.
Well, and I think a lot of times people just get mirrored in, the next, the next job, the next thing. But customer experience is the new battleground. And when you look at what you can do without being the new battleground and new forefront of things. And if you take that really to heart. You think about it yeah, your people matter on, on your internal side, but your people matter on the external side, which is your customer.
And if you're missing that customer experience piece, you're actually letting them down. Do you want to treat them with the white glove service so that they leave you a great five star review and you get referrals or you just wham, bam, thank you, ma'am, I want to work with every single person in the city once.
Yep, that's absolutely true and slowing down, taking care of these customers, arriving close to when we say we're going to arrive. And keeping them informed is really all you need to do. Get rid of the barriers. I promise you, people that don't want to pay dispatch fees are usually people with money. People with money don't want to waste money.
It's funny, I was listening to a client call because they called us and were like, Hey, something's going on. We're not getting the calls on the board. And so I, of course, first place I go is, to their calls. And listen to them. Sure, sure. I get the first one that I listen to. Hey, we want to completely redo all of the plumbing in our home. Can we get someone out to do an estimate? They're like, yes, it's 99 for us to come out and do an estimate.
Guy said, no. This is going to be a 20, 000 to 30, 000 job, and you don't want to come out and do a free estimate? They said, no.
Every time. Every time. Every time. And then what does the employee do? Let them go. Yep, they're gone. booking rates hovers guys on the phone with the next guy so that
blows my mind that people actually charge for an estimate Like I just had I just had three quotes on my rental house in my furnace because I needs to be replaced And I not a single person You know, change that. But there's only one company that had that hey, your tech is on the way. It was actually a picture of the tech in a little story about, what he does and how long he's been with the company for and his backstory and everything. I'm like, wow, that's actually pretty sweet.
Like I haven't luckily in my household, I haven't had to utilize a lot of those services, but that little bit, that little extra thing from that company went a long way for me as a consumer.
Yeah. Yeah, and they didn't do that much, but it stood out, and it's just a little things.
That was an automation. Yeah. Yeah. the comfort advisor clicked on my way.
Yeah. And I'm wondering why everybody's so surprised by this. It's it's let's wake up and let's stop doing what we're doing and rethink this through because you can't compete with a PE firm. They have millions of dollars to out market you. You can't. There's no way. Well, you can compete with them. But not on money. Not on a money for money basis. Correct. You can't. No. And so you have to be smarter than they are.
Yes. And so they're going to turn that estimate down because they wouldn't pay the 99 fee. That's what they're going to do. Or they're going to go in there and they're going to have a really inflated price because they have to cover all their overheads. And so this is where you have room to take advantage of this opportunity. waste is your reward. And so let's get back to what we're going to do. Whatever it takes to do business with you, Mr. And Mrs. Customer.
And if we do this, it doesn't matter what the economy's doing. I promise you. my business was running. My first business was running during the home crash of 08, 09, and 2010. And businesses were failing all over the place. We were growing a hundred percent a year during that entire thing. 100 percent per year. We'd never grown 100 percent a year until that happened. Because everyone else failed to do the simple thing. It's take care of the people that still needed to be taken care of.
Just because the economy failed and we, and the house crash happened, doesn't mean water leaks quit happening and air conditioners quit breaking. It always happens. It's who was available to get the job done. And so the opposite effect of that is, is we overbook. Now let's talk about the opposite of this. So we overbook. If I overbook on a busy day and it's in summer, every other business that you compete with is overbooking as well. So we pay on the average.
I'm just going to use an easy number. 100 bucks for this call. Someone clicked on your ad and it cost you 100 bucks, but you're overbooked and you can't give them a firm time firm time to get there. So what does that customer do? Move on somebody else. They confirmed with you. You booked it. You got your 25 spiff that you were promised because you booked the call. But that customer didn't like Your assessment of their situation because you were very vague. You're like, we're very booked.
We're going to get to you. We don't quite know when we're going to get to you yet because you've been told to book it at all costs, save that customer so no one else gets them. That customer is already clicking on another hundred dollar ad.
Absolutely. They're going to move on until they get that person today.
And so how many concrete time? Yeah. How many times did they click on a 100 ad until they got what they felt was the best outcome? Yep. Or maybe they never got the best outcome, but they improved their odds. If I click on six different ads and book at six different places, somebody's gonna come up for air. Sooner or later. And I don't care who it is. It's going to be one of those six. But now, those companies are going, yes, their booking rates up. I'll give them all 25.
But yet they never got the call because five of you lost, one of them got it. And that is the problem with overbooking. And that is what I'm trying to make people understand. We need to do better booking. We need to understand what our capabilities are. We need to know that we can only do so much every day.
And if the ones that we can do, if we can do them in a timely manner and follow up and not get so crazy that we can't finish the call all the way through all the way through payment, all the way through emailing them and telling them thank you and all that stuff because we're so busy and we can't do all those things by overbooking. But if we book at the right amount, you're going to make way more money and they're going to remember that experience and they're going to tell someone else.
I tried five different companies, but when I called this one, they said we could be there at two o'clock, between two and three. They're going to tell everybody. And that's what we experience at BillyGo and all the folks that are on Sera this is what we teach them. And by doing that, these companies have grown tremendously. Call count's not up, but revenue is. And that's what matters. And that's, really what we talked about this morning.
Well, and not just revenue being up, but through margin pricing. Hopefully profits are up as well.
Profits are up as well. Because if you give a superior service, people will pay for it. Absolutely. if they wouldn't, then we would all be driving around in Chevrolets and not in Porsches and Cadillacs and Buick, upgraded cars, Ferraris and all that, right? It's still a four wheel, four tires. Engine, metal. Yep. One costs 30, 000, one costs 300, 000. Yep. It's the experience, right?
So on the flip side of overbooking, so now we're booking the right amount. We're making sure that we're getting out to true customers appropriately and we're taking care of our people. The term dispatching for dollars obviously comes to mind and prioritizing calls. that are coming in. So what is it that you teach at BillyGo and teach your your customers on Sera when it comes to making sure that you're getting to the right calls at the right time?
Well, obviously we have a system inside Sera that grade calls. And so the only levers we have today is we ask how old it is, right? That's really the only information we get. If we get it, we hope that they get that information, right? And it's accurate if they do give it to you. Yeah, they don't know. thEy don't know the age. They're guessing. Oh, I've lived here 7 years. It must be 7. That doesn't work.
And if you have customers that use you over and over because you have great service, you have all this information. Correct. And You can use that information to prioritize calls as well from your past and your new customers coming in. Obviously, we want those new customers because that's how we build our business. But we still need to take care of the ones we have because there's lifetime value with those customers as well. And that's where the memberships come in.
And that was one of the other one of the four is memberships and owning your backyard. Yep. And this is very important. And we do all this stuff through efficiency. So that we can create cash flow. And that's really what, what matters, right? We're running businesses and we're not thinking through the entire situation, the way we run businesses. Now we've been taught to do some things that are just very counterintuitive.
and so one of the things that really resonated this morning, I said, well, let's look at the three meetings that we have every week. So the first meeting is your CSR meeting. And in that CSR meeting, you're like, Okay, everyone, I want you to book every call. I'm going to pay you an extra 25 SPF if you get all these calls booked. I need you to be above 75 percent booking rate. I'm going to listen to every call you do. We're going to make sure we get it. And we're going to judge you on that.
We're going to pay you extra, blah, blah, blah. Okay? Book them. That's the bottom line. Book them. Then you go to your dispatcher meeting, and you go, Alright, we're going to fill this board up. and I need you to get all these calls off the board. You need to work the board, you need to work the guys, you need to stay on 'em, see how much more time they're gonna be so we can talk to these customers the best we can. Try to get some idea when we're gonna get there.
And so all day long we're bugging the technicians and sit allowing 'em, do their, job. And then we have our tech meeting. And in the tech meeting, what do we tell the techs, guys? Slow down. Show value. We need higher average tickets. How can you do that? If you're stacking all these calls on me every day, I want to go home at some point. So I'm going as fast as I can because I know there's more waiting because you overbook every single day. And so I can never slow down.
I can never do that because I will never get anywhere. I'll never get home. I have a life too. We're not even thinking about that. And so we have two sides, two thirds of the business saying, Get it all you can. Go, go, go, go, go. And then you have one third where the money is made saying slow down. And so we're opposing each other immediately. Now we have all this division. We have all this, friction inside the business. And so culture suffers because we're all button heads.
We all have a different objective. Yep. and so until we can get cohesive and everybody on the same plane doing the same thing with the same objectives. We're never going to get that maximum amount of profit in the company. We're never going to get the culture the way we want it. and it's always going to be a struggle to hire people. You want to do more calls? Let's get more people then. Or let's make the people we have more efficient.
And if you make them more efficient, then you don't have to do more calls. But if you still want to do more calls, how are you going to get more people if you don't have a good culture? Because they're only going to come for culture. That's really the difference. They want to go somewhere where they feel like they're heard. They feel like they're supported, out in the field, out in the field is a lonely place to be.
And when every time you need help, think about, I'm going to bring up blue on right now. How come blue on even exists is because no technicians wants to call and ask for help because they're going to get yelled at. Yeah. Because that guy's stressed out too, that they're calling. And so they don't call. Because they don't want to feel like they can't do the job. They won't call because that guy that they call is going to bitch him out.
If he does, call him or he's going to be thought of as a lesser tech. Oh, this guy doesn't even know how to do this. Didn't you call me about this last week? Shouldn't you know that? Or whatever. All these things keep happening and this creates bad culture. they get 170, 000 techs on their platform because they don't want to make that call to their own people that they work with. So that right there should be enough to tell you we have a problem. We have a big problem in our businesses.
The way we're running them today. And the way we're being coached to run them. And we need to stop it. We need to simplify it. And we need to slow down. Get everybody on the same page. And get everybody working together for maximum efficiency. And that's really what we need to be doing. If you want to stand out. If you want to be successful.
Nope. I love that. the two of the four that we've gotten through so far Getting lost in the shuffle, so how do you stand out? Memberships. Gotta get to three and four. But you mentioned something before we went into memberships, was when you had your 08, 09 2010 with the business that was happening there and look, we're coming into a economic slowdown, recession, downturn, whatever you want to call it. Some people think there isn't one. Some people think there is one.
How much of that was also related to your mindset that you're still going to succeed no matter what. And so like the four tips are amazing, but you also have to have the mindset that, hey, you know what, it's actually not going to affect me as much as it probably would. So how much of that was related to that? And if and if obviously you had the right mindset, what do you say to somebody who might be struggling with that particular mindset, especially with what we're dealing with right now?
Great question. So the mindset obviously has to remain positive at all times, even though we're in a very stressful industry, our businesses are complicated. It's hard to stay positive at all times. Everybody gets off on their negative side. and so I always look at opportunities when it goes bad. When everyone's thinking it's bad, I'm figuring out how do I make it great. If everything's going great, I'm looking at the underlying cracks and seeing where the problems are.
and so positivity is very important in this space and it's very hard to do after a long stressful day, day after day after day. It's very hard to keep that going. And so... what makes me excited and what I try to teach folks when I'm talking to them about this particular thing is always challenge yourself to do something more every day. And if you build yourself around challenges instead of the easy times, you'll always win.
You'll always win because when you 20 years from now, what are you going to remember? Your triumphs or the things that taught you how to be better? You're going to remember that low times that you made it through or even if you didn't make it You're definitely going to remember that. All right, you're going to remember the things that the struggle You're not going to remember when it was easy.
And so we have a short memory in this industry when it's good We forget about it being bad and then when it gets bad it surprises us and so to answer your question in a different way I'm always preparing for the What's coming. Not what I'm doing. I'm already taking care of what's going to happen today. Build my businesses to take care of what's happening now.
Now I'm working, instead of working in the business, to work on the business, you need to be working on what's going to be in three months when you enter the shoulder season. What do I need to do to make that transition and not fall off? And keep yourselves from falling off when you transition from summer to fall. There's a, expected letdown, correct? Well, there doesn't have to be. There doesn't really have to be. And how do you prepare for that? It goes back to the memberships.
It goes back to, the more of those you have, the more you can start calling people to make sure you have work to do. and take, The good times to work on what's coming because we got to turn these AC businesses and plumbing businesses in the 12 month businesses. We pay people 12 months a year. We pay our bills 12 months a year. Why aren't we earning money 12 months a year? Our margins don't suffer in September, October, November when the shoulder season is here. Our margins do not dip.
In fact, they actually go up. Revenue may go down slightly. But the margins come up. Why? Because we're slowing down on purpose, right? And now we can do what we've been trying to teach them to do all year. Let's do all these things, let's slow down, and then we get busy and we throw it all out the window. Mm hmm. And now we're slow again and we start using those techniques again, why do we stop using them right when we need to be using them in the busy time? It's like we just stop.
I had this conversation with a client this spring It was a chillier spring than normal, right? We didn't get the big rush of heat. You're like, yeah I'm just trying to maximize every call right now. I'm like How is that any different from any other time of the year? I know.
Why? Why? Why now? You're too late.
Exactly. Continue to implement that strategy. Continue to have that belief, that mindset that every single call matters. It's the only one you have.
There may not be another one. So treat it like that. Yep. And do your best in it. And even in the summer. So if you're overbooking, are you going to be able to think like that? No. Of course not. Nope. Nope. I'm telling you, if you can get your booking right and you can get there on time and provide a superior service for that customer, they're going to remember that in the off season.
They're going to book that tune up that you need to keep people busy because they had a great experience in the summer because they know no one else can get there and your business will just grow. We do very little marketing. In our business just continues to grow and grow and grow.
You treat people the right way. That's the thing. Yeah. They come back there stickiness.
So we need to focus on margins, not top line. If you focus on margins, your top line is going to fall in line. It's going to do what it's supposed to do. And if we change that mindset from top line to margin, your business is going to run much smoother. There's going to be more money. Every single business out there is making a 25 percent profit. But unfortunately, that 25 percent gets lost in all the inefficiency. And so efficiency is one of the four pillars to success as well.
And in my opinion, efficiency rounds them all up. You get efficient in all of these areas. And then you have an overall efficiency improvement in the business. And efficiency means a lot of different things to different people, but every single aspect of your business. Has to be improved through efficiency and what I mean by that is, just for instance 30 touches by four different people for one service call is extremely inefficient. it is.
And a lot of the touches come from what we talked about earlier, when you're calling to see how much longer they're going to be, because you're overbooked. You're trying to figure out how to get these calls done, right? So every time you call a technician, that's a touch. That's another touch that you've done that kept you from doing your real job. and so these are the things that I'm talking about. And you need to have a, software system that actually knows how long they're going to be there.
Because you have the data from all the past jobs to tell you how long they're going to be there. And once you have that information, this guy's got a four hour job that he just sold. At one o'clock, he's available. sO the software can say, I've got availability at one o'clock. Yep. Just like that. Because we have taken it down to the minute. And that's what efficiency does. You start driving things down to the minute and start figuring out how to quit wasting time. And so that is a very big one.
And I can go in a million different directions on how to improve your business and efficiency. Obviously we don't have time for that.
I think we had a previous podcast with you where we talked about a lot of the efficiencies as well. And so I'll hit on that just a little bit but Every aspect of your business can be more efficient. It's just the way it is. The way we pay people is so inefficient. It's, no one understands how they're being paid. You're getting a commission for this. Oh, but it's a different commission if we have this guy do this. Then the commission we'd give you if he wasn't doing this.
And then we're going to give you SPFs on top of that. Oh, and then we have another bonus thing that happens with this thing. Well, all you've done is confused the person earning the money. And so now there's a trust issue because they need to make sure that they didn't get shorted on their paycheck. Yep. But what you've done is you created this payroll company inside your business that there's been.
Every minute with their hair on fire trying to get all this figured out so they can make payroll by Friday It's not a way to live week after week after week It's really not and this is what ends up happening is by default we make our businesses more complicated the longer we own them and We try to solve problems and create three more why That's the question, right? Why? Why do people do that? Yeah, because I think that we listen to a lot of people telling you the wrong thing, right?
I think that's really what it is. I think that I think that we have a lot of people that are just not coaching the right stuff. And This is what's causing the problems, right? Not one time in history has a SPF been a good idea for the business owner. This is not a good idea. It's too expensive. You double the pay rate. You're just basically doubling your pay rate, or the cost of employing someone. When they should do the job already, right?
So if you had simplified stuff in process, and you're an efficient business, and you coach and you teach, You don't need a spiff. They'll earn way more than a spiff if they're handled correctly. Yep. but you're just increasing your cost. and I see this over and over and over. That's why labor rates for COGS labor or direct labor has gotten over 30%. And so when you're COGS labor, direct labor is over 30%, there's nothing left for you. There's nothing left. It's all been eaten up.
Think about it one third of every dollar coming in goes to COGS labor. what's left over for you? What's left over for the company to invest? To grow the company. To grow the company. What's, there's nothing left over because now you're looking at a, a gross profit and, under 50%. And your overhead cost is 50%. Oh. That's a negative number. Mm hmm. And this is, these are the problems. That's the why. It's just, we've been in this situation with finding technicians now for, I want to say forever.
It's always been an issue. It's always been an issue, but it's gotten worse, right? Because less and less people, when they stopped doing trade schools, we had less and less people even looking at this industry. It's trying to come back now that they pay so well, but the problem with that is, in my opinion, is. We've lost control of our businesses. We're not long.
We're no longer leading because we don't want to shake the apple cart because if we make a technician mad or a group of technicians mad, they're going to leave us. But really and truly all they want is someone to lead them. That's really what they want. They want you to be a leader and then we need to start taking our businesses back and leading these businesses. That's really where the problem is. And that's where we got to 30 plus percent labor. I'm not saying lower on a text pay.
That's not what I'm saying at all. In fact, I'm saying increase it, but do it efficiently. So it's 20 percent instead of 30.
Well, and if you simplify it, like you said you make it easy for them to understand how it is that I get paid. You make it easy for your payroll staff to be able to calculate it. Now you're becoming more efficient that way. You have clear objectives and goals for your employees. Everything gets more efficient.
Absolutely. Payroll shouldn't take more than an hour, right? Shouldn't take days. Correct. Should take, take an hour or two.
Yeah, you don't need a calculus degree to figure it out.
I know. Yeah. And we figure, we put calculus into everything. It seems like in this industry.
Well, and I think this comes from not, like you said, not leading, where you don't understand your people and what it is that actually drives them. That's right. What they're excited about, what their goals are and their dreams are and their aspirations. You just think throwing money at it is gonna get them to do more of the right things. But it's complicating everything.
It is making your life miserable. and we have to stop. We need to stop these spiffs. We need to stop all of these crazy commissions. And we need to look at how to simplify the pay system so that they can make maximum money and you can too. My labor rates around 18 and a half percent and I promise you my technicians are paid more than yours. It's just all up front. Is that the idea? Or are you doing commission as well? No commission. No commission. No, we pay by the hour. Gotcha.
But it's a a variable rate. So as they do better, they make more per hour. And the more per hour goes up extremely high. It's not uncommon for a technician to be at 100 an hour during the week.
And when you say do better, what is that based off of? Is that off of the efficiency score?
Off the efficiency score. Absolutely. When we built job time efficiency, it was all about improving our tech's performance, right? And they only know how, how well they're performing if they're measured. If we don't measure it, we don't know.
Performance modern is performance gained.
Yep, and there's been studies are done, that says we're around 35 percent efficient in our industry. So that means 65 percent of the time we're not billing for the work that we're paying for and for the time we're paying for. And so the whole idea behind job time efficiency when we stuck it in Sera was to go, look, we got to start measuring this so we can improve it. I was just showing a couple of people that are coming on Sera.
They wanted to see here to show showed it several times today And so I pull up my company, Billygo and I'll pull up other companies that are on Sera and show them as well. So they just don't think it's me. That's the whole idea. I could show you my stuff, but I'm going to show you other people's stuff. and so for the year, 10 months and four days into this year Billygo is at a 79 percent efficient rate. And that includes all zero ticket calls. That includes all callbacks.
That includes all warranties. So basically, for every minute of everyone's time, I'm getting 71 percent of that money back. And now, when I go into this report, and I pull out the zero ticket calls, and I'm just looking at the calls we actually sold, we're at 99%. Almost perfect. Literally perfect. So that means we know how long it takes to do work, and we know how, if we do the work. And so the efficiency drops on the zero tickets, or the free tune ups, or whatever we're doing.
and so by doing this now that we're measuring it and we can show the technicians that we're measuring it, we no longer are the best friend with the guy that brings in the most revenue because it is the most profitable because now we can measure his efficiency out in the field. Maybe he's selling 2 million worth of air conditioners, but how many customers am I blowing through to get this done? And so it creates training moments.
You have more vision into what's happening so you can get him to double his efficiency. And once he understands his own efficiency, he's going to do whatever it takes to not be at the bottom of the pack because he's used to being always at the top, right? And so we pulled up one of our guys. In fact, he's the highest guy.
I think he's around two and a half million in sales this year, selling techs, what I have no, salespeople and I individually can pull down his efficiency and his efficiency for the year was one hundred and two percent So literally by inner introducing that I've taken a thirty five percent efficient Technician and turned him into 100 percent efficient triple it.
Yep, and guess what happened with his pay triples triples Or almost triples yep, and it's a win win and It's just like me hiring three guys Instead of the one right because I got him from a third To three thirds right 100 percent and now I've got three techs from the old way but I'm only paying one right and so I share that with him.
Yep. Well, I think it goes even one step further It's a win win win and that now the customer is also winning. Yes. Yeah, because they're getting their time back By you making sure that you're delivering a superb customer experience in the time that you allotted for. Yep and you're taking care of them and they're not getting any callbacks.
That's exactly right. Yep. Yep. And you only do this through efficiency. Now I know efficiency has been thrown around out there by a lot of my competitors. Of course. and so now that's become the word that everyone's using. But if you can't measure it, it's just a word. Exactly. That's all it is.
Well, it's a sexy word to talk about. Yeah. But at the end of the day, when you talk about, being a more profitable business, there's two ways to do it. You increase your prices or you get more efficient. Yep. So let's talk about efficiency because we don't want to price ourselves out of the market.
And at the end of the day, what's happened in the last few years, a lot of technicians have decided to open up their own business and they're just undercutting prices because they're a one man shop, two guys in a truck, that kind of a thing. So they can afford to cut costs a little bit and they don't know about margin pricing. They don't know about flat rate pricing. Or if they do, they can still undercut because their costs are so low.
hoW is it that we as, companies can compete with those businesses or PE firms that can cut costs because they can buy equipment for so cheap? Well, we got to get more efficient. We got to get lean.
We do. We do. and so the way you compete is by being efficient and then you can get your pricing correct. So if I can bill at a hundred percent. I can go in the market or much cheaper because I had to be higher when I was billing at 35%. Correct. And so I had to compensate for that, that big Delta of efficiency. And so the only way to compensate is through price increase. And so we, definitely do not worry about what our competitors are doing.
We're setting our price based on the margins we want to make, and we're trying to create efficiency so that we can get these margins that we're trying to create. And so our market price, actually goes to market at a much cheaper rate than people that can buy it cheaper or people that just start business and can do it cheaper because it's just them. We are actually competitive all the way around because now efficiency has allowed us to lower our pricing, but increase our margin. What a concept.
Lower your price to make more money. And that's what efficiency does for our business.
I love that. We've talked about the three. What's the fourth? Do you want me to remind you of the three ones we've talked about so far? We talked about,
efficiency, memberships.
Yeah. Margin and cash flow. That's the four.
Well, margins and top line. Efficiency, memberships, and getting lost in the shuffle. We blended the two together into one.
Well, cash flow is a major part of this, right? Cash flow is the blood in our veins. When it comes to business without blood, we don't exist. And then we need that cash to exist. We need cash to reinvest in the business. We need cash to invest outside of the business. We need cash to be able to pay like we should and to implement these all these things that we try to do to, to make our businesses better. And so cashflow is a very important part of what we do. So with margin pricing.
We can zero in on what our financial statements are telling us we need to be charging, to be cash flow positive. With memberships, we create lifetime value and customers use us over and over again. So therefore, we have more cash coming in, so that we have more cash flow. And then also, through efficiency, we create more cash flow. Back to cash flow, to everything that we do, we want to create cash flow. We stop thinking about the revenue. Cause I hear this from almost every contractor.
I'm a 3 million business or I'm a 5 million business. If I can only get to everything will be fine. Yep. That is not true. It's just 10 X harder. You just created bigger problems. Yeah. It, the revenue doesn't fix the business at all. It doesn't. And I can help you make more money at the number you're at today. Then you will, if you went to 5 million from, 3 million to 5 million in one year, in one year, I can help you make more money if you stayed at 3 million.
Then if you went to five million on your own and have less problems and less headaches So I'm curious and I know we got it We should probably start thinking about wrapping up here at some point so we can get on with the rest of the turn the lights oh,
everything is cleared out of here
That is left so And this is actually from, some from our business and we've had been having some conversations with some of our coaches on our side with our marketing company and making sure that our numbers are also correct. And we had that call on Monday it's oh you guys are actually in a pretty good spot because again, I'm trying to focus on our, on our numbers on the backend, not necessarily top end revenue.
But one of the conversations I had with somebody is okay, well, how much cash should you have in the bank? On hand to be able to cover your business expenses. Some people say three, some people say four, some people say six months, some people say an entire year or somebody will have well, we call it our get small budget. And so if we need to, we get small and we have enough for four months on that. What's, I guess your philosophy on that particularly for a trades business.
All right. Well, there's a lot of different ways to look at that. And so we all hear me talk about P and L statements a lot, and that's your report card on how your business is doing. But your balance sheet is the health of the business. And so my opinion on that is if you have a positive equity in your balance sheet, then you're fine at whatever that number is. But unfortunately, majority of businesses are negative equity.
So it doesn't matter if you have some cash in the bank, if the balance sheet is negative equity. And so we need to look at the equity within the business. And if it's in positive territory, then you have more flexibility on what type, how much cash you want to have. Is there a ratio? What do I do? Honestly, I don't keep very much in there, because kind of business are we in? We're in a cash business. I'm gonna replace it tomorrow. So why am I leaving it in there? I'm gonna put it to work.
How do I put it to work? A lot of ways. I started a, my own, my own lease company. buy trucks. This is a way to get wealthy in your own business. I'm telling you. I start my own lease company. I buy all the trucks through the lease, through the, through my company and then I lease them back to the business. I lease them at a much higher rate than I'm paying if I don't pay cash for them and I get a return on my money. I'm something that we're paying, all paying for.
Every month you're sending this money to the bank to pay for these new vehicles, right? why won't you just send that money to yourself? Go finance these in your own entity. Lease them back to the business at a higher rate. my rates are leases. You can hide rates, all that stuff, This is exactly what they do to buy it. So think about it like this. If you had a company that had a million dollars in positive cash flow, you could go buy five times.
You can go borrow five times that money yourself and be your own private equity company. And make the payments. The company gets tax write off for making the payments, paying the interest. But you got the five million dollars in your back pocket. And the company is paying the debt. Just things like that. That's all PE firms are really doing. They're just taking that cash flow and they're financing a multiple on that, paying you some.
And then they make the money off the cash flow that comes in based off of what they pay. And why don't you do it yourself? You need five million dollars for your business? Well, how about take the 5 million and keep it if you want to? It's just I'm just pointing out the obvious here. And so our company is just I think we'll finish just under 15 million 14 to 15 million is where we're gonna be.
Maybe we'll hit 15 But the thing is is we have 28 percent cash flow and when you do the math on 14 million I think that's around 3. 9 million dollars So I have 3. I could actually go get a loan on at three X or four X right now and put it all in my back pocket if I wanted to and let the company pay the debt. And so this money, when I say you're already making enough money in your business, you just not getting it to the bottom line. This is what I'm talking about.
This is exactly what I'm talking about. So if you've got a 3 million business and you're just barely getting by, Somewhere along the line, you're losing it. Yep. and that's a lot of what I try to help businesses do. I don't really want them to, take advantage of it. The reason why so many people are interested in these, in these companies, in our industry, is because of the cash flow. These companies can generate a ton of cash. And that is what we're all after.
We're after that cash, that cash flow. And they expand their empire based on cash flow. So do it yourself.
Well, it's incredibly tax efficient to be able to do it that way.
Oh, absolutely. Absolutely. But you got to get efficient to create the cash. Yes. So then you can take advantage of the system. Like what Trump told everybody when he was up there with Hillary. Well, you wrote the system. I just use it.
Yeah. I'm playing by the rules.
I'm playing by the rules.
Or lack thereof rules, depending on how you look at it.
And so you could be your own private equity firm if you wanted to make sense. Yeah.
Well, our other recording is almost done our batteries flashing on us. So I'm not gonna ask our Trademark patented last question because I feel he's had that enough times already. Lots of great information. Look, we can keep talking. We know this already, right? The wealth of information that you bring to the industry and to the events and everything that you do is insurmountable. So I just thank you for also being a kind, genuine, down to earth human being. Thank you.
I value our conversations all the time and I value our friendship. Thank you for everything that you do for the trades and for the industry.
Appreciate you. Thank you.
Yes. Perfect.
Thank you. Thanks, Billy. Yep. And until next time. Cheers.
Cheers.
Well, that's a wrap on another episode of HVAC Success Secrets Revealed. Before you go, two quick things. First off, join our Facebook group, facebook.com/groups/hvacrevealed. The other thing, if you took one tiny bit of information out of this show, no matter how big, no matter how small, All we ask is for you to introduce this to one person in your contacts list. That's it. That's all one person. So they too can unleash the ultimate HVAC business until next time. Cheers.