City Wide "Z" Calls
City Wide "Z" Calls
City Wide - Southern Arizona - Antonio and Roxana Rivera
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Good afternoon, hi Marcus. Hi thank you for joining. Hello, welcome to the call. Awesome. All right, y'all. Well, we have Antonio and Roxana here today, and they are going to kick off the call by telling you all about them. So as soon as they're finished, you guys can jump in and ask all of the questions that you want to talk about today. Otherwise, we'll let you guys take it from here.
SPEAKER_09Well, hello everybody. My name is Antonio Rivera, my wife Roxana. Uh, we've been uh with CityWise since 2018. We uh actually got a business that was existing, so we were the friends, the first to buy an existing franchise um back in 2018. So that was uh a different uh different challenge and uh than most. Uh what's going on, Marcus? I've seen you in a while, man. Yeah, it's been a while, man. I hope you're doing well. Yeah, same for you, brother. How's that portion?
SPEAKER_03You okay? We're we're doing it to DuckTame.
SPEAKER_01We're not talking about it. You got a nice porch. Oh put away for the winter now, but you know, we'll get it back out come summertime. There you go.
SPEAKER_09There you go. Uh so uh Roxanne and I uh we partnered with Dave and Trin up the trash, and um we got the territory. It's been uh it's been good for us.
SPEAKER_03We're southern Arizona, we're in two, son. Nice and sunny in the desert.
SPEAKER_09I mean I I don't know what else you guys would like to know. Um, that's great.
SPEAKER_02You know what I think I think is always a little bit a little bit helpful for people to know is what kind of background did you come in come in from? I think for a lot of people that are either listening to this call or that will be listening to this um on recording afterwards to kind of hear about specific people and um and where they what industries they come came from before serving citywide, it allows them to kind of relate to that person and then maybe reach out to them further uh to kind of get their transition story. So I'd love to hear about where you where you guys were before citywide.
SPEAKER_09Absolutely. Yeah, so I spent 10 years in the military, uh, was in the infantry in the 101st Airborne. After that, I got my master degree from uh Grand Canyon University. I worked for Citibank, uh, was a vice president of operations, uh, managing the Home Depot portfolio and the Costco portfolios, and then I transitioned to mortgage. And I was an asset manager manager uh for Mr. Cooper. And then from there I transitioned here. Um so my background is mostly in the default side of things, collections, and so that's me.
SPEAKER_03And I managed uh the office for a school, a charter school. Um, I did that for three years before citywide, and then I was a stay-home mom prior to that. So that that's me.
SPEAKER_02Awesome. Thank you guys so much. Um, you know, something really special about the two of them is they have been in the business for what, eight or nine years now and um are officially owners within their location. So this is their first time being a Z Call host, and we are extremely happy to have y'all. I appreciate you doing this for us. Um, all of that being said, you guys on the call, what kind of questions can they answer for you today?
SPEAKER_05Yeah, I'll go ahead and ask uh I'll ask the I'll ask the first question if that's all right. So uh there's a list of services that uh that you can that are provided, like accounting and business development uh at a minimum in your first year. So I'd like to hear some uh some examples of y'all's experience with the accounting services and uh business development. Uh how did it help you win? How did it help you establish uh your business, even though it's it was pre-existing, but how did it help you grow? Uh what pain points did it relieve?
SPEAKER_09No, that's that's a good question, Mr. Clayton. Um, so for us, when we came on board, we came into an existing book of business. Uh so it was a lot of managing uh what was under um on the bid and stuff like that. So as far as the accounting service is highly recommended uh for the first year, at least until you get the hang of how to cut checks, uh payables, ARs, you know, what is going to be your collection period, uh, what contracts, if you come into an existing one, we had contracts that went from net 30 to net 60 to net 90. So understanding you know how to build those fees. Uh for the business development side, it is beneficial. Um, Roxy started with sales, I started on operations. So I'll let her talk more about the business development.
SPEAKER_03Yeah, um, it was definitely very beneficial to have Holly, which she's amazing, um, making those call calls, especially that I didn't like to make the cold calls. I have no problem walking into a building and starting a conversation just on the phone was very uh hard for me, which is, you know, it should have been the opposite. But um, having the coaching from um, not only did she make calls for us, but I would call her and she would help me uh with scripts, she would help me and coach me on how to handle the the next touch. Um, sometimes we would do it together. Um, she shared with me emails that it was just, you know, putting the name on for the customer, easy, getting emails out. She the support was amazing on the BDS side and the accounting. Definitely highly recommend that. It helped me a lot when I transitioned to the uh other side of the managed books, man. And now I manage books, yes.
SPEAKER_07Thank you.
SPEAKER_06Hey guys, uh thanks for hosting this call. Uh a question uh that I had was you know, um, from you guys like previous experience before um owning a citywide uh franchise, like what what skills do you think were the the most like helpful and like transferable that that that helped you kind of really grow this um this this territory?
SPEAKER_09That's a great question. I'm sorry if I'm just not named uh Wacas? Yeah, it's uh Wacas. Wacas. Sorry about that. Yeah, uh so the bigger skills honestly is being a hunter. Uh so knowing out there, going out there, cold calling, uh touching base with all the customers, uh, organizational skills, knowing that you have to manage you know different customers, contractors, uh you have to deal with employees, um and and just having a good background on on managing the the cash flow. Um in this business cash flow skill, if you don't have the cash flow, it's gonna be very hard for you in the first couple years. Uh so learning how to manage that. So definitely know how to build, how to set the customers up for success. I think that's the the biggest skill is it's just uh for me it has been structure and um and accountability.
SPEAKER_07Thank you.
unknownMr.
SPEAKER_04Alex, you got a question, sir? Yeah, I did. My mic was off. Thanks for for acknowledging me. Uh congratulations on you guys' success over there in Tucson. Hey, hey, I got a question. I'm I'm assuming I could be wrong. Do you guys speak are you guys bilingual? Yes, Spanish? Does that help you guys out? Because I'm kind of in a situation where I'm looking at different markets and uh um that it's uh that could be possible for me. And that was one of the questions that I was asked the other day. Is that something that helps you guys out with your subcontractors or in your market? I know Tucson has a lot of Hispanics there. Is that something that benefits you or is it if you could kind of put some light on that?
SPEAKER_03I will absolutely. Uh definitely for us here in Southern Arizona was a major part because everybody spoke Spanish. And uh being able to, because besides doing sales, I was the IC recruiter and I dealt with all the ICs. Um a lot of them have been burned out by other companies. So they come to you without knowing who Citywide was or, you know, never heard of them, skeptical. So speaking their language was absolutely the best because now they they felt related. They felt like, okay, they understand me. They there's no language barrier. I can understand what she's saying. I can come back and say, hey, I did not get that. Can you explain that to me again? So that to me, I felt like it was a lot of comfort that that made help us build those relationships with them. And uh we translated everything that we could to Spanish again because we wanted to be crystal clear and nobody have that feeling of like, oh, are they gonna be here when I come and pick up my check or is it gonna be an empty building? So definitely having that person that speaks that language is gonna give you um a lot of uh certainty with in clarity because sometimes the scope of work they don't understand. And now if it's explained to them and it's in their language, it's absolutely gonna minimize complaints. So definitely have someone that speaks the language.
unknownOkay.
SPEAKER_09And it's for us, it's obviously necessary, right? The border is if I look outside my door, the borders, I can see the border from here, right? Uh so for us, it's it's it's a necessity. Uh, but I can tell you example of Phoenix. Uh, Mr. O'Donnell, uh, he manages everything, and and you know, you don't need to speak Spanish. It helps a lot to build the trust and the relationship. And whenever you're in a band, they definitely help you out. And and again, as she explains, for clarity purposes, having everything on both languages helps a lot.
SPEAKER_07Gotcha. Thank you.
SPEAKER_02On that same note, I was speaking with somebody earlier that was brand new to citywide, and it looks like they weren't able to attend live. But one of the questions that they asked, which I would like to send them the answers later today, is how the process works for pricing contracts. So I wondered if you could discuss that a little bit. Um, is it the IC that sets the price and then you put a margin on it? Is it vice versa? And it's the client that sets the price, and then you divvy out the certain amounts. If you could just explain that process to people, I think that would be really helpful.
SPEAKER_09Oh, that's a great, that's a great, great point, right? So when you first come on board, you're gonna learn that the cleaning industry is it's not as easy as it seems, right? There's a lot of uh areas that you have to know chemicals, production times, uh, load rates, etc. Right um in every specific market is gonna be different. I don't know where you guys are gonna be located at, right? Um, so external factors like minimum wage and labor loss, etc. But when you first start, it's best to find an IC that you can trust and you can build a relationship with. Um, I spent I don't know how many nights cleaning floors, cleaning toilets, doing the job myself so I can learn and understand why we're gonna gotta use an auto scrubber or a backpack vacuum with a battery versus regular, or why we have to do the different things. So when I go and put a bit and go do a quote, I know exactly the time that it's gonna be. In the beginning, the IC might be able to be able to set the time for you, might be able to tell you this is how much I charge. That's probably gonna last maybe six, seven months until you learn how to do the job, until you get that saying, like, okay, this production rate here is 2,500 square feet per hour, over here is 5,000 square feet per hour, over here is 3,000 square feet per hour, and then you guys set the price, but you gotta understand the industry first, right? You don't need to be a subject matter expert, but if you rely on a facility manager that you're gonna hire or somebody that knows the industry, they're gonna be able to set the price, right? You want to set the price and rely heavily on what we have built already on CDYU. Uh, the team, the learning team has developed great resources. Mr. Mitch has created a great program for uh the OS system, right? The all the services so we guys can bid, and you guys will learn as time goes what is gonna work on your industry and what's not. But the first couple months, the IC will set the price for you. It's just unless you you already know the industry, unless you already understand everything, um, they're probably gonna set the price for you. And and it's okay. It's okay for them, you know, to set the price. You build that relationship, and then a couple months later, it's like, all right, man, I know that it's not gonna take you six hours to do this, it's gonna take you two hours. Come on now, let's work together.
SPEAKER_07But but the beginning, it will be like that.
SPEAKER_08Thank you.
SPEAKER_04On that note, can you guys talk about a little bit about your margins? Like what's the average, typical what you smack on you know, put on top of that for on for you guys? I mean, can you guys cut cover that? I'm not sure if this is the call for that or no, no, yeah, absolutely.
SPEAKER_09Absolutely, Alex. So your margins of operations aren't gonna vary, right? Especially with um either sales, um, other services. That the sweet spot is 35%, right? You wanna do 35% margins. Um, that's gonna keep you profitable, and you're gonna be able to move you know the needle with that. Now, there's gonna be other services and bigger jobs that you might have to reduce that to land the job, you know, operate at 25-30 margin, and know that you're gonna lose 5% no matter what, right? That's royalties, they're gonna go away. So start operating into that 30%. Uh, but there's gonna be jobs, $150,000 jobs, $300,000 jobs that obviously you cannot put a 35% margin on it. So those jobs you're gonna operate different, right?
SPEAKER_07But for the most part, it's gonna be 35%.
SPEAKER_04What do you usually factor in for your employees for your nine? What do you usually factor percentage-wise in your model that you pay out um to your to your contractors?
SPEAKER_09They either um from 65 to 68 percent, they get paid. Um, again, I I I do a couple things a little different than most franchises just because of my proximity, proximity to the motor. Um, I have to bring a lot of like the other services in-house uh to be able to stay competitive, right? But um I think yeah, 65 to 68 percent is the sweet spot. Uh and again, uh, what's gonna work in your margin, right? I don't know what market you're in uh or or you're planning on acquiring, but you're gonna have to look at the minimum wage and everything in there and how it's gonna work. Um, but you know, you're gonna have to make that decision a chance like I have. But do I wanna keep the 35% margin or do I want to have a 30% margin or maybe 28% margin and you know, still make something instead of nothing?
SPEAKER_07Uh but that's that's gonna be your decision, right?
SPEAKER_09And uh my biggest mistake was learning the real difference between markup and margins. They're two different ones. So that that's one that that hurt me when I was doing the labor. Instead of margins, I was marking them up.
SPEAKER_05So yeah, well that's the next question. Thank you. So could you help me understand when you first came in uh your relationship with the Phoenix team and uh and how did you develop that and and how welcoming are your neighbors uh when you have your territory established?
SPEAKER_09Man, that's that's a great question, Clayton. Uh so when I came on board, this franchise has been operated for 10 years. Their book of business was $300,000 a year, right? After 10 years. Uh so we came in, we immediately lost 50% of that with the name, uh changing the name. And um I have no idea what I was doing, right? I thought that coming in here was gonna be, I mean, coming for mortgage, having my NMLS ID, managing, you know, my PL was almost two billion dollars. So I said, I can't do this, no problem. No, it's it's a different beats, right? Because you're an owner operator, so you have to actually work and do the jobs. So on my first couple weeks, I went out to Phoenix, I talked to Mr. O'Donnell, and I said, dude, I'm new, I'm struggling, I don't sleep. Well, what can I do here? And uh I can tell you from my experience that everybody in the franchise system is super welcoming, everybody is willing to share what they know and and how they do it, and you take that and you apply it to your margin, however you see fit. But uh as far as people welcome you, open arms, man. Open arms.
SPEAKER_03Even now, when we go to convention um and we sit at the dinners and you get to sit to different different people, you learn a little bit from everybody. Um you can the conversations, and they'll start asking you, so what do you do with this? And they're like, nope, you're doing that wrong. You gotta do this and this and this. This is what worked for us. So we come back from convention, we're like, oh my god, let's do this, you know, let's let's change what we were doing because we were learning from from people that are already successful, more successful. And then sometimes we give out tips ourselves, and we're like, wow, did we just gave out advice? So it's very cool to to come to convention and and feel that uh what we might be struggling with, we're not alone. People are struggling too, and then we can share what has worked and and we've learned from each other and come back and implement it.
unknownYeah.
SPEAKER_05Thank you. Uh, quick follow-up question there on what were some of your lessons learned between the difference of markup and margins uh when it comes to bidding?
SPEAKER_09Well, honestly, it was mostly on the labor. Um, so on on the other services, right, like floor stripping, uh power washing, you know, roofing, etc. Um when you do a markup, right? You multiply it and you get a number. But we were not operating at the margins, right? So on our system on field sales, you have the margins there, and you have to account for material, you have to account for labor. And so the material is a markup, the labor is I'm sorry, the markup is on the material, margin on the labor, and you have to do all those calculations, make sure that you're doing it right. Uh, so the biggest difference, I mean, is it's profit. I mean, that's the biggest difference, right? At the end of the day, is this what you want to look for net profit, right? Cash flow, like I said. So coming in, if you want to do a $150,000 job and you're not gonna get paid right away. Um, so how are you gonna manage it, right? So that's why you want to have those margins. So you have uh attrition, right? Coming in into a this business, know something, guys, and expect something, you're not gonna make money right away. It's just yeah, this is a grant, right? Uh, it took us about three years to be profitable. And uh I I am not a big proponent of outgrowing my operation, right? I I like slow, steady. We've been growing by a million a year since we started. Million, million, million. Slow, steady, keep the operations going. Don't don't uh overload, right? So one year I I I was like, I'm going out, I'm gonna I'm selling, and I sold a lot, but I also lost a lot because I didn't have the the team, right? Now I'm staff heavy, and as we're selling, my operations is able to handle everything, right? We got you gotta keep the the net promote score. You want to have this 75, 80 percent, you you want to have 98 retention, right? That that's the goal. You want to keep the accounts that you get. Don't piss it at the back of it. And um, and for that, you're gonna I learned the hard way when I started doing this. I came with the idea I was gonna make money. And so the first year I didn't account for for the bottom line, right? What's it gonna take to keep the building open? Cities, uh, city wide shirts, uh computers, uh, you know, everything that comes with owning a business. Um, you need to have, if you think you're gonna need $10,000, you're gonna need $30,000. Let me just put it that way, right? Because there's gonna be a lot of things, especially. Hey, I just sold 10 accounts for $100,000. Fantastic. Now you're charging $200,000. Well, guess what? You're not gonna see any of that money for at least 60 days. And that's just the reality of things, right? But guess what? You you still have to pay your electric, you still have to pay your mortgage, you still have to pay your employees, you still have to pay everything else. So my my biggest lesson was cash flow, right? Knowing when to walk away from a job that I don't, yeah, sure, I can do it, but not having the money to pay, or you know, getting in and debt with loans, all that it is is hard, man. So you just gotta understand that slow and steady, right? You have opportunities to explode. If you have the bandwidth, go for it. Um, I did. We made plant them, fantastic, everything was good, and um and then we started losing accounts because I didn't have enough people.
SPEAKER_07Thank you.
SPEAKER_06I was wondering if you guys could talk about uh a little bit more about um how you divvy up the responsibilities as being co-owners of the franchise territory, and if you could um possibly share a bit about how single owners of a franchise territory, how they deal with those responsibilities, do they handle them all themselves or do they look to um hire someone else? Or like I'm because for me, I'm so I mean I would be a single owner, so I'm kind of curious to see how how you guys deal with like the all owners' responsibilities and how it differs for like a single owner.
SPEAKER_09That's a fantastic question, sir. Uh so for us, it's been boots in the ground, it's been mean and care, right? Dave and Trina um provided the capital we first started, so they they never worked the business. Uh so we've been putting the sweat equity calling, right? So for us, I deal with operations and she was dealing with sales. Uh now I deal with operations and sales, and she deals with accounting and contract recruiter. Um, but for you, being if I was a single operator, I will handle the the sales and operations. My first hire will be a sales executive to help me grow. My second will probably be an iManager, so I don't have to stay up all night. And um, but single operator, man, you're gonna be working. Just just expect that. And it's okay. I promise you it's worth it. Uh, but uh for you, it's it's gonna be sales coming in, uh, lean heavy on the on the BDS team, on the support team, for them to make those call calls for you. Um, because you get one or two customers, you gotta visit those customers, you gotta be a facility manager. Um, so you are gonna be it. What's up? Sales manager, nine manager, only one. Awesome.
SPEAKER_00Raise your hand if you were not warned by Adria already. Raise your hand. Okay, they were warned, Antonia. They were told.
SPEAKER_09But it but again, it is it is a lot of work, but if you know how to manage it, you can move quick. Um, you we have a lot of support. You you have tons of businesses that have been started, and uh so we have performance groups and we share where our struggles are, what ideas are, how we can get better. So you're not alone.
SPEAKER_00So, what would you say? Those are kind of like from a struggle standpoint. What would you say was the year or the time that you can remember where it flipped? And you're like, okay, the engine's cooking, here we go. Like, was there a a day, was there a month, a year that you can identify?
SPEAKER_09It was probably the second year, about maybe three months into the year. I was doing a SWAT analysis for uh for the first quarter, and um, you know, I highly hire you know two FSMs, one nine manager, two salespeople, and it just clicked, right? It just like ah, I can do this this way, and I can be more profitable doing this way, and I can be um so just from experience learning and having the the staff, right? That hiring the right people is gonna be crucial, is not so much that you want to hire somebody that is hungry a salesperson, somebody that's gonna work well with you. Because remember, in the beginning, you're gonna be just you and that one person, right? And then and you have to find somebody that you work with and then that you're happy with, and that's what we did, right? We created a good culture so where everybody was happy to go to work, everybody was working 16, 17 hours, and nobody complained, and that's when it clicked for me. It's like, okay, we fire no cylinders, accounts are just coming in, we have 98% retention, we're not losing anything. All right, so you know, uh that's finally let go of some of the responsibilities, and I was able to focus on other things, and that's when we started growing. About two years, uh give or take, right? It was different for us, guys. So don't take that from me, right? When you I I wish I would have started at Franchise Room Zero instead of getting an existing book of business, because that was that was hard. It was very difficult for me because we had a bad reputation here, right? So coming out of the hole is that's why it took so long, right? We had a knee-generic reaction to try to solve, and we were very reactive instead of trying to be proactive, just to try to salvage what we had.
SPEAKER_02So when you talk a little bit about having the exit walking into what you what was the existing, maybe some bad relationships, how did you guys overcome that? Were you going out and meeting with those customers and trying to restart those relationships? Were you what what were you doing, or what did you find best that did resolve?
SPEAKER_09That's a great question. So for us, the relationships weren't there, right? Um, the business was like I said, everything was under bid. We're working at 10% margins on all of our accounts, and 5% went to citywide royalties, right? So we're working with 5% on $300,000. Um so the best thing that we could do was just be there, be available, do your do your visits, touch base with the customer, ask them, you know, hey, besides us, who's who else is giving you troubles? What can how can I make your life easier? And then just visiting the customers, uh asking them how we can help them, and uh try to fix their problems before they came in. We went from uh 8% MPS to 75% MPS in the first year. So that that really helped us a lot. Um we started getting Google reviews. Uh they're like, hey no, this guy's away some time that they help us. Um so that started building the trust again, and and that was helpful, right? Repairing the trust for them is what really helped us get out of the hole and start acquiring new business.
SPEAKER_08Thank you.
SPEAKER_05Mind if I ask the next question? Yeah, go ahead. Cool. All right, I wanted to talk about uh geographic spread of your client base. So um how far is your furthest client? Uh do you have a satellite office? And how far is too far for a prospective client?
SPEAKER_09That's a great question. And uh, I'm about to blow your mind, but we manage all of southern Arizona. So our territory, I don't know if you guys are familiar with Arizona, but we have Yuma all the way down to New Mexico and Casa Grande all the way down to the border. So our territory is probably the size of Arkansas, you know, and so what's too far? Um so we have accounts in Yuma from Tucson. That's a seven-hour drive, right? Three and a half there, three back. For me, that's that's just not the best. I don't have a satellite office because as much territory I have, or population is only 1.5 million people. So we we are very spread out, but we don't have the mass of people, right? Outside Phoenix with their 7 million people, we are the rest of Arizona is like very spread out, right? So what I would say too far is something that you cannot respond in say two hours, three hours, right? Um, as far as having satellites, I I would recommend once you start growing, but uh be very strategic where you want to place it, right? Because for example, for me, I wouldn't place uh an office in Yuma, even though it's the second biggest city I have, it's only like 250,000 people.
SPEAKER_07It's not a lot of business for me out there.
SPEAKER_05So would you pick a potential satellite office? Like let's say you uh let's assume that you don't have a satellite office, right? And you're starting in Tucson, and then you're you've you've gained your business at at where your established home, you know, home base is. And how would you what would go through your mind on selecting your first satellite office? Would it be the number of potential buildings over certain square footage? Would it be any sort of other variable? What comes to your mind?
SPEAKER_09Um for me, it's RPC, right? The revenue per capita. So what's it gonna be when I move there, right? Again, give you an example of Yuma. Yuma has a ton of buildings that are 50,000, 80,000 square feet. However, they're produce, right? Cleanable space in those are a thousand, two thousand square feet. So same in Tucson, we have a lot of warehouses, right? I mean, it's a hub city. Everything that comes through the mail, everything comes from Mexico, it's hub, and it goes out. So a lot of warehouses, a lot of big buildings. So if I had to put another, it would be for uh for RPC, right? So how many people live there? What is the ability for me to grow? Because it's not just us cleaning the buildings, it's it's offering the maintenance where where we can make most of our money.
SPEAKER_05And uh how far? So we did we we discussed Yuma, right? It's probably too far, uh, you know, being three and a half hours or seven hours round trip. But uh currently, uh, what's the distance to your furthest client? And uh, you know, maybe you have some concerns around a uh a client that's far away because you uh contractors may not want to travel that distance, right? Or how would you go about if a client is two hours away, so it's you know, let's say two hours is the furthest you want to go, um, how would you go about selecting a contractor or an existing relationship to conduct that work for you?
SPEAKER_09That's a great question, man. Uh so I have business that I do two hours away from Tucson um in uh in a border town called Sierra Vista. So in there, I spent well, she spent like two days out there uh recruiting contractors. Right? So we have our own pool of contractors out there. We have a nine manager, I have a it I call it Flex. It's a Flex Nine Manager FSM, and um that person managed the small accounts. So all the small accounts less than a thousand dollars, that person managed. And if she has to drive two hours to go see the customer, then that's what she does, right? Uh her book of business is super small, uh, to where she can do that. So for me, it would be uh first find the contractor before you start prospecting for business. Once you have the contractor in place, one or two of them, then start uh prospecting and getting the business in.
SPEAKER_03I would also add that um if if it's uh a way like that, um we started with a contractor that was well established, that had multiple crews uh that had the experience so that we knew that that was gonna be our point of contact and say, hey, can you be there in 10 minutes? We're on our way, it's gonna take us two hours. Um, versus a mom and pop that are just starting because then they call you and say, I don't know what I'm doing. So in another city, we started with definitely a more established contractor that knew and had experience so that they can help us refund right away while we were on the way.
SPEAKER_09Yeah, you might have to take a little bit less margin, pay them a little more, but basically supervising the account for you.
SPEAKER_07More self-sufficient. Let's put it that way, right? Thank you.
SPEAKER_02I like hearing y'all say that. You know, it is something that we talk about, I feel like pretty frequently is it the chicken or the egg. You know, are they finding the customer first and then going out and finding the contractor? Or are they filling the bench with contractors and then going and targeting the customers for those specific contractors? So we hear sometimes different people doing different things, and I like hearing the different perspectives. So I appreciate y'all sharing that.
SPEAKER_07Yeah, yeah, no. Uh again, if it's within your reach, go for it, right?
SPEAKER_09Don't wait for a contractor, you figure it out. But if it's something that you know is is a little far from your home office where you operate constantly, then trying to find a contractor first, right? If you have to travel 40 minutes and um you don't have a contractor, then you're gonna be you're gonna be in a pinch, right? Um one thing, don't ever make the same mistake I did trying to please the customer and they say, Yeah, I need you to start tonight. And I had a pool of contractors ready and none of them could start at night, you have to have to start. So I always tell the customer at least two weeks uh lead way before you before you start, or charge him a premium, which is what we do now. If they want us to start right away, we charge 50% in one month. So for me, it's contractor first, and then uh then I can go and prospect.
SPEAKER_03Yeah, we definitely started first in our backyard. The only reason we started expanding was because the customer that was so happy here had locations in Sierra Vista, so that's why we started going out that way. Um, and it started working out for us. So now we're like, okay, we have one location, let's get more business. So we spent some time recruiting ICs and at the same time knocking on doors uh to see what we could prospect since we were there.
SPEAKER_04I have a question. Can you guys uh like explain percentage-wise, like your accounts? Are they um I know we do citywide does everything, right? But basically, but what is the reality of your market? Is it like uh you know, 30% of your accounts is majorly just sanitorial stuff, or is it you know 20% is uh you know, flooring or whatever it is, right? I mean, if you could share some light on that.
SPEAKER_09Um, yeah, that's a great question. So you're gonna find the niche for your market area, right? For us, is I I focus on five things. Nobody's gonna be better than the in those five things. There's medical office buildings, schools, uh, car dealerships, um uh logistics, right? And uh Dakers. Right? If something else comes in, fantastic. As far as how the business goes, I want to say 80% of our business is janitorial. So we're building about 500,000 a month on janitorial, which still is my operation, and about 180 about 220 a month on uh on other services. The other services it breaks down onto what it's gonna be. For me, it's handyman service. I have four handyman on payroll, and um I do a lot of maintenance, right? So a lot of my is is handyman. Uh floor work is the second. Um, then after that is is roofing and and sweeping for me. But but again, every market is gonna be different. Like some markets of North that snow removal is gonna be the money maker, uh, window washing, right? So it's really based on where you're at. But expect about 80% of the business to be janitory, record.
SPEAKER_04Do you do you guys get a lot of competition then from the other large um uh franchise national players? Um, you know, your uh Gem Pros and the other companies, are they in your market as well? Do you compete with them a lot?
SPEAKER_09Yeah, absolutely. Absolutely. I mean, that it's just like anywhere else, right? You're gonna have uh the market competition. Um, but I can tell you after seven years of being here, seven and a half years getting Tucson, or market penetration is only 1.8%. So there's so much opportunity on any distance, right? But your biggest players, ABM, um, ISS, Janikin, Jampro, uh, they're gonna be everywhere, but they don't do what we do, right? They're really jan sad. So that they're gonna be doing the janitorial stuff, and we what we do is we just offer a facility solutions manager, a de facto person that's gonna be managing the business for them. So we're different, right? We're not a janitorial company, we're a management company. And once you do that, right, we're not even the lowest nor the highest, we're always in the middle. And but again, that that's gonna be where you add on your market, right? Uh, for example, I can tell you for Phoenix, the low rate is 29 bucks an hour. Lost your city, big city for us, it's 22.50 an hour. If I try to charge 28 bucks an hour, I'm I'm way too high, I'm never gonna get any business. And the competition is always gonna come low, but that's where you have to sell the the benefit of citywide. But competition is like I said, we live 15 minutes from the border, so everybody crosses the border, comes to work, and then drives back home.
SPEAKER_03Yeah, we don't have competition.
SPEAKER_04Do you guys uh uh you got those handymans there that that you guys keep in-house? Does uh I don't know, I forgot in Arizona. Do you have to get a contractor license or is the minimum bid or minimum job if it's less than whatever, you don't have to get a license, a contractor license to do what kind of you know the type of work your handymans do?
SPEAKER_09You want to get a contractor license because that's gonna open up the ability of things that you can do, right? Um, I have no construction background and I got my general contractor license. You know, it's just gotta burn the eyelids and study and and pass the test. Not complicated, but once you get the license, you know, the you'll be able to bid on everything. Um every state is different for uh for a registral complaint. So in some states it's five thousand dollars or less, some states it's a thousand dollars or less, you don't need a license. Um, but if you get your license, you can do you know up to a million dollar jobs. And uh and they come, man. Again, I I walked away from big jobs just because I don't have the cash flow.
SPEAKER_07But once you have a cash flow, you'll be able to do big jobs. The awkward silence. Come on, guys. Ask awake.
SPEAKER_09I know you guys gonna make a big investment, and I know this is this is something for your future, so I mean I'm I'm willing to tell you all my experiences, and again, it's I've got uh I've got a question.
SPEAKER_05So when it comes down to a challenging cell, right, and you really need to bring uh a client over to the citywide side, what is it, you know, now that you have your business established, you've improved the repu reputation of your services, um what is it that really tips that that that potential client over the edge uh to go with your with your business vice another?
SPEAKER_09So the main difference is gonna be you or your facility manager. Uh Is how we sell to them our responsibleness, right? Um, we are a proactive company, we're not a reactive company. So what really tips them over is knowing that they're gonna have somebody and having the peace of mind that they don't have to worry about it. That's that's the biggest thing, right? Because they can go anywhere else to somebody clean their building. And I tell you right now, we're about twenty twenty-five percent higher than other companies when it comes to beating. But it is that, right? It's like, are you gonna have to worry about your crucial and open night? Are you gonna have to come to a dirty building? No, right. That's the citywide security.
SPEAKER_00I want to just pop in on that. And um, Marcus, if you have an anecdote on this too, that would be um I think anywhere, either of you want to weigh in. I watched Jeff's um Jeff does and and owns the citywide location in Kansas City. And so he had a debrief on a couple of accounts that they lost in Kansas City and was chatting through with the sales executives. And I just thought it was like one of the best pieces of training that I and I again, I'm not on that side of the house. There's probably been a hundred thousand other meetings that look just like that, but this was the one that I happened to be part of. And so he did a really great job of talking with the sales executive. And this sales executive, after they walked through it, was really saying, okay, well, I didn't do a good job of articulating what my service was because he lost it. I think it was like a 5% difference in the bid. And, you know, really being able to talk through that um property manager and say, okay, listen, I can do that for that money too, but you're not gonna be happy with what you end up at that price. Are you okay with this level of service, you know, A, B, C, D? Because the reality is it all comes from somewhere. So, what service are you wanting? And how can we make sure that you're getting that appropriate level of service that you're gonna be happy with and that all of the employees in your building are gonna be happy with, and really articulating that unique value proposition. And so that was one of the things that I felt like, you know, kind of came from that piece of training that was really interesting. So I don't know if either of you saw that or you know have been part of a debrief like that, um, and just kind of what your thoughts around that look like.
SPEAKER_01Yeah, uh, I saw it. I'll chime in just for you guys uh um that don't know me. I am the director of sales for the Cleveland location. So been around a lot longer. I've been with Citywide for quite a while, and I'm going in with the Cleveland owners for a new venture for a new territory. So I've already signed the deal. Um, yeah, thanks. Thanks, Savannah and everybody. Uh I will kick off and start April 1 opening. So I'm I'm no I'm past the research phase. I've been sold on Citywide for years, so I can give some perspective being a little further down the road. Um, when it comes to how I sell us and how I teach my team, I have four now sales executives. Um, and then of course I'll be exiting the Cleveland and starting my own thing, right? Where I'll be the main salesperson and training new ones, but uh is we it's a value add proposition. It is not uh a uh we ask for a budget, but not just so we can meet it, right? I rarely meet a budget for citywide. I'm almost always asking people to bump their budget 10 to 20 percent because I'm worth it. So the value add, the describing why we're worth it is what sales is at citywide. Um, we don't go in and and ask for a budget and then say, oh, good, I can meet that, or oh, the uh, you know, the the other guy uh uh what's his price? I'll beat it by three percent, I'll beat it by five percent. We will never be successful that way because we we again the 70% of what comes into your coffers when you start uh a franchise goes right back out to your ICs. Um so you're you're independent contractors, sorry. Uh so if you if you aren't able to pay them enough or what the market bears, then you just lose accounts and you wind up treading water. And I'm sure you've heard Antonio speak to that. I've known Antonio for a good while now. We we hung out a lot last year at a conference in Vegas. Um, so I the point of what I'm getting at is going into any citywide sale, I am stressing, as Antonio said, he said it perfectly. We're not a janitorial company, we're a management solution. We sit on your side of the table, and the goal here is to save you time, not save you money. The goal is you got this building, and for me in Northeast Ohio, uh the windows need washed quarterly and the carpets get crapped on from salt and they need redone, and the floor needs strips and wax, like sometimes multiple times a year if you're in a production facility. I got a guy that can handle all that hands off and just float you the price. Once he's been there a year, he knows what your budget is. He doesn't even need to float you a price. He just does it when you tell him to do it, and you don't have to worry about it. You're sitting here talking to me. How much time are we wasting? So now you've invested walking me through your facility. You've invested sitting down with me because I've got a million questions, and I'm a good sales guy, and I'm gonna make you feel bad about how terrible they're doing right now. You've lost half a day talking to me already. Like I could we could have already solved all this. Your sink, you know, your sink into that might be depending on the size facility, it might be 20 grand a year or it might be six grand a year. Like, is it worth it to you? You have to make that call, dude. But I'm here to help you with that. Um, that is the the citywide sell. Uh, it is much different than our competition. You can get into the weeds with that though. So you really have to be, and again, I'm not gonna make this a wholesales meeting, but if any of you want a wholesales thing, I'll give you one. You can have these girls tell tell them my number and I'll I'll reach you can reach out to me whenever. Um, because I can fight against any of our competition. I can say why they're bad, uh, but that that doesn't really do it for most people. It's more about here's what I bring to the table. This is why it's valuable, and this is why I think you should use me instead. Um I that might have been a little bit of a rambling response. I I hope that answered a question. And I don't mean to, this is Antonio's time. I didn't mean to take over it. Uh, but those are just kind of my thoughts on, yeah. And I did say the thing, I saw the thing that Jeff uh that where Jeff was running through this, and I think in essence, it was just about asking better questions, getting to the root of issues. And if you're really fighting like a budget or a money game, like you're not gonna win that game. It's about projecting value right from the get-go. So I believe in this model. I mean, it another big one I always use, Antonio. Use this if you don't, is man, we tried doing internally staffing for 40 years and it didn't freaking work. We hit a ceiling, and then when we switched to and uh using contractors in our community, not only does it bump them up and make them more money, but it also made us more money in turn. It made everybody somehow was happy, which doesn't happen often. So I'm happy to be a company where that happens.
SPEAKER_00Yeah, happier clients. And I think that that was um when it was one of that kind of what I would say, you know, hair on your arm moments when I kind of saw him, you know, the sales executive, the light bulbs went on around how they can articulate, how they can solve that pain point. You know, Jeff was really doing um kind of a reverse mind game with the sales executive, like, okay, where did we miss? Like there was a dance step here, and we've lost this somehow because the reality is everybody has the same thing, right? Like you're you need the building cleaned and the market bears a certain amount of money, give or take. And so, really, what it's gonna boil down to is the account managers and their ability to cement those relationships and making sure that we're meeting those expectations and that we understand what they are and continuing to meet those expectations and continuing to understand what they are. So that was my takeaway from it. I thought it was um, I'm sure he does it all the time. And for whatever reason, this one just got sent out to us and I had the time to listen to it. And so um I love that.
SPEAKER_01I do want to I want to add one more thing that I just thought of that really I think sets us apart, um, which you guys, depending on where you are in your decision process, I'm just gonna throw this out there for your consumption. As someone who's chosen to do this and put, I moved my family, like we put a we put a lot into this, right? Um, the the regardless of the value add stuff, when we are trying to think how how to put this best, when we're stepping in front of a client who comes with their own problems, they've had their own crappy day, their own good day. Um, they are looking for a holistic solution. Most of them I talked to don't they they fell into managing janitorial because some dude left who managed it and they wound up with the responsibility added. Uh, some of them are business owners, sure. Some of them are tied around their coin purse, but for the most part, uh they fell into that position and they don't want to manage it. And so we just sit in a really nice place where if you can just get them to see that they don't want to manage it, it works out uh really well. Um, there's not really anybody that's coming, especially with the support that we have. Um, if you just follow the model that's already been given you, you really don't have to reinvent the wheel with most of this stuff. I mean, Antonio alluded a few times. Hey, we do it this way, Cleveland does it this way. I'm sure if you analyzed me versus Antonio, I'm sure I do stuff different than him just based on my personality. Like maybe he's probably maybe he's a better organizer than me. So he uses a different, maybe uses a different SaaS program that works better for him, right? But past that stuff, if you use these building blocks, the even the presentation that we give and our process for walking people through how to sign on with us is light years better than any other sales guy that's calling them. Like sometimes I go on these RFPs, these requests for proposals for these big companies, and they'll walk all the competition together. So I get to look at in the eye, I get to look at all my competition. There'll be eight to ten companies there. And like you have a on those, I like to go on them because I like to keep a beat on competition. They're also usually pretty price-driven, so I don't win them very often, but I like going on them because they don't want to pay more. They want, they don't even care how their building looks, they just want the cheapest price sometimes. But I love to go on them. And the uh I this is I'm sure this is recorded, but maybe it'll stay tight here. Like our competition is just dog water. Like, if you just show up with your shirt tucked in and like you have you walk in, you do a money call, you tell somebody where they're gonna be, you walk through a presentation that you've printed and present to them, you're already better than 90% of your competition, regardless of numbers. Um, the the but I do think that citywide on the corporate side has good training and can teach everybody a base level. You can still put your personality into it, but gives everybody a base level of how to be successful and present and sell citywide well. Like that training will be innate and come in. And then maybe you're just a good sales guy that likes to talk to people and you can you can expand on it. Great. But if you're worried about that side, I really and Antonio's kind of parroted this. I I wouldn't be worried about the sales side. The sales you have to pound the phone for sure and knock on doors, but the sales will come. It's more like first first and foremost is get good uh contractors to work with that can clean these buildings. Like that's your hardest, that's your hardest hill to climb. And once you have that, um, really it's it's very much set up for you. If you just follow the model that's given, like you'll be successful. I would I'll there's a last thing I'll say. I'm taking up too much time, but last thing I'll say. I was on the phone today, they're trying to set up my franchise, right? And they're asking me, where are you gonna be? What's the address? We want to make sure the place looks good. You know, they have these checks and balances. Like they want to make sure I'm not like saying I'm citywide and I'm in like I'm in a uh shoebox somewhere or like in a mobile trailer, right? It's got to be like an approved uh business address. And I was talking to them and I was like, hey, yeah, this is uh this is cool. I signed a two-year lease because I know I'm gonna outgrow this place. Like, I'll need more than four offices in two years. Like, I absolutely know that. And Antonio's saying that too. He he what is he saying? Oh, I was a little light on the people I hired. I had to hire more people. Now I'm ready to go sell. So I know his next two years. I think I was looking at the numbers. He sold a little under what a hundred grand in new JS this year. I think I saw it at 80, but probably got a little more than that. Um, that's a good benchmark. I mean, Cleveland, we sold 250 this year, so we added a million in in revenue, uh, you know, we or I'm sorry, three million in revenue just from our JS or our janitorial sales, not even our other sales. So Cleveland's much further down that road, but like we'll hit 20 million soon and then we will catapult to 30 million. If anything, I'm annoyed because I set them up for success, and then I'm like, okay, great, everything's great, guys. See you later. And now I'm I now have to go do it again. But it's that's for me.
SPEAKER_02And you are gonna do it again.
SPEAKER_01Oh, absolutely. Well, that was my point. It's it's a model that I have figured out and like it will be successful. I don't care what territory you put me in, like it works. So that's all I have to say. I'm sorry. Thank you. Thank you, Antonio, for the time.
SPEAKER_02Thank you so much, Marcus. And I'm excited for you to host one of these early next year. You're gonna be phenomenal at phenomenal at it. To wrap this up really quickly, Roxy, you said earlier that one of the things that you really loved about convention was that at one point in time you were the one getting the advice, and now sometimes you are the one giving the advice. Can you wrap this up with both of y'all telling us one piece of advice for them moving in to this rest of their discovery process?
SPEAKER_03Oh definitely build relationships with your clients because they will buy or stay with people they like. Um, I know that when we started, we had a lot of uh visits to build those relationships and a lot of Starbucks coffees that we brought. And that's how we we made presence with them. So they they started realizing, oh, okay, this is not the same uh that we used we were used to. So building that relationship with the customer, with the contractors, and with your team has really helped us grow and helped us understand our market better. Um, and then building those relationships with other city wives that you can call and say, hey, how do you guys do this? Or hey, um we are about to embark in this big job. Any advice? So definitely that relationship.
SPEAKER_02Yes, constant relationships. Awesome. Thank you guys so much. I really appreciate you guys doing this. This was a wonderful, wonderful call. And thank you all for having such great questions. Um, this was awesome. Happy holidays, everybody. We'll see you guys in two weeks.
SPEAKER_09Congratulations, Marcus.
SPEAKER_00We'll be getting together in two weeks, guys. Okay, happy holidays.