SPEAKER_06 0:14

Hello all.

SPEAKER_04 0:17

Thanks for joining us. You may have seen that the uh recording took you off camera and put you on mute. So if you wouldn't mind coming off camera and unmuting yourself, say hello. Uh we're excited to see all of your faces and spend some time with you this afternoon. Hi, Brett. Hi, Sean. Hi, Michael. Thanks for joining us.

SPEAKER_09 0:43

Hi, Lisa.

SPEAKER_04 0:44

Yeah, so Savannah is doing her charity work. She is, obviously, you all know, or some of you know this, she's a nurse by trade. And um she is the I would say the charity's main nurse for um a group of kids, and they are skiing. So she handles any of the bumps, bruises, and scrapes if if there's any of that kind of stuff happening. So um she's doing good things uh while she is not here with us today. So kind of cheering her on and excited to hear how that goes for her this week. But we've got Bubba Snyder, and Bubba is a multi-unit owner, he is a seasoned pro of the Citywide system and has been a Z host before. Some of you already may have listened to his calls in the past. So Bubba, thank you for being here. I'm gonna let you kind of talk about who you were before you came into Citywide, a little bit about your journey once you've signed, and we'll open it up for questions.

SPEAKER_01 1:47

Perfect. Um, good afternoon, all. So Bubba Snyder here, um, Edwin Snyder III. Um, so down here in Alabama, we get nicknames, as you all can imagine. And so uh I got stuck with uh Bubba at birth, so don't hold that against me. Um just ran with it for 55 years, so we'll just keep going. Um for 20 rough years, I spent uh different roles with Quest Diagnostics. Um and during COVID, things changed. Uh approached the 50-year mark and ready, was ready to do a little something on my own, if you will. Um for about, I don't know, half a year or so, did some consulting while I vetted out some options and then found uh citywide. Um early 22. Um met my partners. They had already um kind of found Birmingham, where I'm sitting, and uh joined a partnership with them. One of my partners is a is a St. Louis owner, and um we opened our doors May of 22. So Birmingham, we've been in business what a couple months from now, six weeks from now, really officially uh four years. And um about a year and a half ago, roughly, a little over a year and a half ago, we the three of us um uh gained coverage and and took the market in Huntsville north of us. So I'm a partner here in Birmingham running it as the operating partner and more of an investor in Huntsville. So that's kind of um the path I've taken from leaving uh a corporate job to becoming a business owner, um, just to kind of kick things off. So, Adria.

SPEAKER_04 3:37

Thank you so much for that, Baba. So y'all just hop in and start asking all those burning questions. This group I know has them, so let's go.

SPEAKER_06 3:53

I'll jump in and start. Hi everybody, my name is excuse me one second.

SPEAKER_08 4:03

It must be four o'clock, the school buses are outside, and the dog starts yapping. My name is Michael McIntyre and I'm Potomac, Maryland, just outside of Washington, DC. Um, and this is my first uh uh I'm joining my first call here. And so uh uh in a citywide uh environment, uh first question would be around a day in the life, and that's around uh sales versus uh uh managing current vendors. So what percentage, Bubba, uh of your day? I guess it wouldn't relate to the uh uh to the Huntsville area where you're just a I believe investor, but in your in your day-to-day, the uh what percentage of your time is spent uh um in sales versus managing your operation and current vendors and issues that you might have?

SPEAKER_01 4:51

Yeah, great question. Uh so when we when when you begin, you know, they'll tell you, I'll tell you, um, there's quite a few hats that you get to wear, right? Uh you're starting from the ground up, start up, if you will. So there's many hats you'll wear. Uh what we did here was obviously start as fast as you can in sales, but also we really spent our early days, call it at least the first 30, to build our network. You know, you can't serve a you can't go out and sell something if you can't service it. So my background coming from sales and ops, I had a uh blended role, started out in sales, ended up in operations. So I understand both sides of the fence. I took the approach of making sure I had a network or at least a startup network of folks that could service what we sold. So um from day one, opening the business, you know, you're finding your initial personnel, right? Sales team, finding your network of contractors to service you. And then you're wearing all those other hats. Um as the business takes off, based on how fast you take off, those hats will be, some will be worn more than others. Um, the key part of it is just making sure, in my opinion, you stay ahead of sales because it will bite you in the butt if you if you sell more than you can service. So, you know, you're representing, I feel like I'm representing a business model and a brand that's that's well vetted out. In other words, it works and it's been proven. So I didn't want to steer away from the model. So what I did was make sure my initial higher sales executive and then kind of an internal office person that helped me recruit contractors, the three of us, and I wore a sales hat, some. And then as we landed accounts and started new business, I wore that operations hat to, you know, to keep keep clients happy. So as you ramp up those hats, some hats will be worn more than others. So the first year, you're wearing them all. Um, and then after you get going and you start building your team, um, you're selling, you're building your account managers, uh, you're adding your evening quality control folks, your second shift managers, uh, things kind of start, you start kind of catching your breath. You can actually breathe a little better. Um so I don't know if that answers your question exactly, but it's based on how fast you take off, which we took off fairly quick, and things kind of settled after that. But the the point I want to make is this model is a great business model. You want to follow it as it's designed and not steer away from it. And um balance your time accordingly based on what you're encountering. So we started uh we our first, we opened May 1st of 2022. Our first sale, we were fortunate, put us about the five-month mark. So we kind of got a quick start, which was a benefit to us so we could spend more time on the operation side while we're ramping up. And then uh after that, um sales kind of took off from there, and then I built the operations team behind it. So, and then there's revenue marks that we've created that will help. Okay, this is the time to hire this person. This is the time to hire this. We've created those revenue steps uh in the model to help guide new owners too. So that's that's pretty cool.

SPEAKER_08 8:39

Thank you for that. Much appreciated.

SPEAKER_06 8:44

I could jump in next.

SPEAKER_08 8:46

I've got a laundry list of questions, so I can keep going, or if anybody else wants to uh to jump in.

SPEAKER_04 8:52

Alex, I'll let you take take a second shift here.

SPEAKER_00 8:55

All right, good deal. Thanks so much, guys. And Bubba, thanks for jumping on the call here with us. Sure. Um, one question that came up just in learning about kind of the process that you guys run in the business model. Um, I imagine or I know that the terms in which you pay your vendors is probably very different than the terms in which you receive payment from your clients. So can you just talk about maybe when you were first getting started out, how much dry powder, how much capital you figure you really should keep in reserves or budget for, and then maybe what the evolution of that might look like once you really start having revenue and receivables coming in on a on a more regular basis? Sure.

SPEAKER_01 9:41

So when we we began, we were fortunate. And um, as we took off, the revenue, you know, obviously was ahead of schedule. The downside to that, to answer your question, was we landed some accounts that were net 60. And we pay our folks. Uh, if you've if you've learned anything about our model yet, we pay our folks on uh the 10th of the following month. So we'll use January 1st. I paid everybody for January on February 10th, right? Well, I'm billing in January. If it's net 60, I'm getting paid for January and March. So having that capital is key based on what accounts you land early on. You know, if you can, if you're on the flip side and opposite of the way I started, you know, um, and you sell a lot of net 10, net 30s, then you know, cash flow is is much easier to manage. Um, we began, we went ahead and got uh uh capital funding for um right at 400,000. And I say that just to have that reserve, right? Because you're not you're trust me, when you go into a market, you're not gonna know what you're gonna sell until you sell it. And so in those terms, you know, your local, local businesses can be net 10, net 30. But if you get into a big nationwide company and their terms are set, then if you want the business, you gotta be able to float that money, right? Float that payroll. And so it, and then in in conjunction with that, and in in line with that, is your obviously your employees in your office. So as you ramp up, and by the end of 23, so after a year and a half, we were at uh 2.4, 2.5. I mean, we went pretty quick because in 23, we landed a big contract. And so, and to your kind of going back to your question, that contract, cards we were dealt, were was a net 60. And so we had to use some of the funding that we initially got, whether we needed it or not, to help support that and keep our um service providers um paid on time and happy. That way the quality of service obviously came from that. So the key to this business is when we use our subcontractors, the majority of them are small business owners. I mean small, right? And so they don't truly, they have not truly adapted to the understanding of being cash flow, um, you know, managing your cash flow, making sure your cash flow is in place. So they bill you, they want to try to get paid right away. And so our model helps them. That's one thing about our model that I enjoy is helping small folks grow their business because they may not have the experience and understanding of how to go sell, you know, their services themselves. So helping them is one of our cool features in our business that really helps the the community impacting lives, you know, here locally. So it's it's based on how you it's really a moving target because you really don't know until you know. And so um having some reserve is key just in case you need it.

SPEAKER_00 13:05

I appreciate it. Great answer. And uh it sounds like you started with 400 and working capital. You feel like if you were to do it again, that was a healthy number. Oh, yeah, yeah. You won't need more than that.

SPEAKER_01 13:16

You shouldn't need more than that, especially if you're able to really study your market and kind of what I did between signing the franchise agreement in February and finally, you know, 60 days later, whatever, 90 days later, opening the doors. I did my due diligence in my market where I've grew up, and I was already had uh targeted prospects, right? And so I kind of learned a little bit about the prospects to know, okay, is this a big box type company, you know, or is this more of a you know, one one building client, right? And so um if if to me, that's gonna drive your your net terms based on the type of client that you target. So um we just we landed our new business early on the way we did, so we had to uh support it accordingly.

SPEAKER_05 14:07

Thanks so much. Excuse me, this is Jim. I came in a little late. I'm sorry. Um can you expand on that a little bit? Um, you know, go go back to you know when you're when you first started out, um, you know, what did your sales pipeline look like? You kind of um addressed it right there, but what um you know, maybe extrapolate, you know, what a typical organization would you know hit the floor on? I mean, you know, cold calling, doing due diligence in your market. Um, you know, how did you ramp up from that? And you know, what kind of you know, how much time is spent cold calling versus um, you know, managing your existing customers as you got a little more mature. Sure.

SPEAKER_01 14:49

That's a lot. Yep. So when you start, you'll need a sales executive, right? So I I like to use the old 60-day, 90-day max ramp up time because you got to learn your products, you gotta learn your market, you gotta learn your prospects. So it takes the sales cycle, can sometimes take be as quick as less than 30 days, and sometimes it may be three to six months, just based on who you're who you're uh prospecting. And so when I say we were fortunate to start, I was fortunate to get a lead with a company and we started with the day we opened, because I was able to prospect them, if you will, unofficially, because I got introduced to them because they were already doing business with some other citywide markets. So I was kind of a little bit lucky in that aspect. But a month or two after that, that's when we started really seeing the the return on our our sales executives' efforts. And so uh that time I was spending, we already had built our network in the month of May when we opened. So we were ready to go to, we were ready to sell. So I was selling more, say, 60 days in than I was the first 30, because I was focused on making sure I had enough service providers. So it's kind of like you got to balance it based on what you sell. But if today, when I look back, uh even today in my book of business, we average about$2,200 an account uh a month. And I have some that I bill$45,000. No, I have some that I bill$45,000 a month, and I have some that I bill$600 a month. So it's just again, it's based on building your pipeline. Uh our industries, we we have a wide range of targets, but we really don't focus on really on restaurants, if you will, but I've focused on car dealerships, churches, um, some distribution type centers, um, medical, your medical, like your urgent cares, your smaller buildings, you know, our niche is the 10,000 to 50,000 square foot building, which will give you in return anywhere from two to$10,000 a month in business based on your normal five-day a week clean. So that's kind of how we looked at in terms of setting our pipeline or trying to establish our pipeline. And so back to my time, you know, once we got about 60, 90 days in, I was spending as much time selling as I was running the business, but also making sure operationally we were servicing the clients to to the level we were supposed to. So I don't know, Jim, if that helps um at all, but I'm just kind of going back in time and kind of thinking through what happened to us there.

SPEAKER_05 17:35

No, no, that was good.

SPEAKER_06 17:36

Thank you. I had a question for here, Bob.

SPEAKER_03 17:42

It's just uh Sean Fortier of Los Angeles, California. Um twofold. Earlier I heard you say something about five months before your first sale. I didn't quite catch that. And then secondly, the real question is can you are you able to or willing to share with us your annual year-by-year growth, like year one? I did two, three, et cetera, and then also what your net to sales percentage is?

SPEAKER_01 18:04

Sure, sure. So what was the last part, the third part right there? Net sales. Okay. Uh so the first month we opened, the first day I opened, I had$17,000 a month on the books. I started the day I opened with a$17,000 a month count. Again, I was fortunate. Don't use that as what's gonna happen, because it probably won't. But um, using that as an example, that gave me the opportunity to wear some of the other hats right away. From May 1st to December in 2022, we billed$615,000. And of that$615, around$400 of it was recurring uh janitorial type um accounts, and then the other was the extra services that we offer our clients. 23, I billed 2.9, and I grew about 2.2, 2.3 million. And then in 24, we'll we had um an account that decided to go in-house, do some changes internally that really didn't fit us. So we lost a little bit of those that we had on the books, but we grew another million, million two. And then uh that was 24 last year. We grew 1.3 million. So I build uh in these as of December few months ago, we closed out 25 at like right almost 5.2 million.

SPEAKER_03 19:28

So 4.1 in 2024? Is that what you're saying? 3.9.

SPEAKER_01 19:33

3. Right at four, right at four. In your first year? I missed that number, sorry. Uh yeah, so the first eight months, 615, 615,000 in 2023 is when we were able to secure, we were able to secure a large multi-location uh client, and that brought us uh about a$2.2 million growth in 23. And what are you tracking this year? We are pro we projected six and a half, uh almost seven this year.

SPEAKER_02 20:09

What do you think your ceilings at? Oh 50 million, easy.

SPEAKER_01 20:16

I mean that's good. Yeah, Alabama, yeah. So I'm down here in Birmingham. I mean um our business to me, uh based on now knowing competition, knowing the different industries in my market, I'm heavy with medical. I got UAB in my back door at my back door. I've got some event venues which are non-recurrent, but there's some large accounts, uh, plenty of car dealerships. You know, I'm in the south, so churches uh are good clients. Um and then I've got a little bit of manufacturing and distribution. Um, so I mean, I I want personally, I want to project my business here in Birmingham to grow at least two million a year. Now, you may have some setbacks and you hit 1.5. That's okay, right? My population is 1.5 million, but every year I want to try to be a minimum of$2 million a year in growth. Got it. And your and your net to sales? Net sales. Can you elaborate on that question just to make sure I follow what you're asking?

SPEAKER_03 21:25

Net profits. If you sell five million, you're 10% net, then you pocket$500,000.

SPEAKER_01 21:29

Right. So okay, that makes sense. So when you would based on how much capital you use to start, right? I'm operating right now with debt uh at about five and a half percent net, uh, bottom line profit with debt. My goal is once I'm completely debt free is to be operating over 10%, 10 to 12 percent at least.

SPEAKER_03 21:54

That's because that's because you borrowed money, correct? Yes, yeah, but if you're all cash, you think you'd be. 10% today? Yes.

SPEAKER_02 22:02

Yes. I could hit 10% easy today if I had no debt.

SPEAKER_01 22:09

Now remember, now remember, you could be more profitable than that, but as you grow, you got to put it back in because you got to hire people.

unknown 22:16

Yeah.

SPEAKER_01 22:17

You got to hire people to support that growth. Yeah.

SPEAKER_03 22:20

How many employees do you have?

SPEAKER_01 22:22

Um, I am sitting at two sales executives, two, three account managers, two night managers, um, admin for billing, accounting, and then a BDSO. Was it 10? I'm at nine or ten employees. Ten. Hell, I lose track. But I'm at I'm I'm right at 10 people.

SPEAKER_03 22:40

I uh I had a couple other questions, but I want to hog the call, so we can we can come back to me.

SPEAKER_04 22:47

Those were goodies, though. Bubba, tell everybody about your um big win this year with your racing score that you got.

SPEAKER_01 22:56

Yep, so in 20 last year we landed the a NASCAR contract out here at the really the largest track on the circuit, Talladega. And um that was it's a great ad for the company, it's also a great learning experience because it's a large piece of property. A lot of people attend that race, and um that was about 600,000 to the business last year. It's like 300,000 a race. And last Friday we met with them and renewed for three years. Um, so yeah, so we got a three-year renewal, and um that was a good that was a great win because we can now plan around it be and in our playbook. We've you know, you get better at what you do, right? So you learn as you go and you get better, and so we'll find more profit on the back end than we've had last year. So we're excited about making more margin on those. That now we're um working through changes here. There's a uh a road course for indie formula one, super bike, Porsche right here near my office. It's one of the top road courses on the circuit for those guys, and we're moving in there this year too. So we'll be out there next weekend for the indie race. Um we got minor league park here. We're going into our fourth season. Um we start them in a couple weeks from when baseball starts after April 1st. We've got theaters uh here, old um theaters that do use the facility year-round for different events. And now we're waiting. We could hear as early as tomorrow, uh, no later than maybe middle of next week, on um a local RFP that we participated in. Um that will get us the CD of Hoover. It's got a uh sports complex here that's got 11,000 seat baseball park, um, 100,000 square foot indoor facility for basketball and volleyball, uh, baseball, softball fields, football, soccer fields, tennis corps, and that would boost my business. That one account would hit us about 1.2 million a year. So um once you get in your market, focus on brand recognition, uh, get involved as you know, one of our core values, get involved in the community. Uh, I love to network. I talk to a lot of people every day. That's just what I love to do. And so there's a lot of things I do outside the office to try to stir up um new opportunities for us and me and the team.

SPEAKER_06 25:36

So yeah, hi Baba.

SPEAKER_09 25:44

Uh it's Brett Sewell. Thank you very much for your time today. Learning a lot. Um, you said you currently have about 10 people on payroll. Can you give us a sense for what what uh sort of compensation is needed for not all of them, but maybe two or three of these roles, like your your um your sales executive, maybe, and your um account manager, just as a couple of examples.

SPEAKER_01 26:10

Yep. So I'll start with sales executives. So to me, you want to you want to build a comp package that if someone performs and they can ramp up between a year and two, they could be making over$100,000. That's that's the objective from where I sit. Uh base can be anywhere based on experience and stuff from$60,000 to$80,000, but your commission uh and the rest of the package should get them, you know, uh easily to$100K. Um, and that just differs market to market. I mean, cost of living across the country changes, but I'm using mine and mine's, you know, I'm not in New York City. So um, so that's kind of where I'm on a sales executive account manager, similar. Account managers slow start off a little bit slower because you're growing your book, and our account managers, they'll max out between 50 and 60 accounts based on the value of those accounts. So we try to get our account managers managing um up to, based on how good they are, up to about$130,000 in contract business a month. And then they're able to upsell to that book the other services we offer. And if they can bring$170,000 to$200,000 a month to the business, then you're good to go. You'll make money there. Um, but that ramp up is key, right? So I've got um really two and a half uh account managers, and one account manager is really maxed out. He's got about$135,000. I call it maxed out based on the accounts. Um he can probably handle a little bit more. But as these guys and girls get experience, then you can if they you can add an account here and there, and they can and your fixed cost is covered, right? It's already, it's already in the in there. So I keep tweaking our territories where these account managers cover. And um, but the the objective is to get them, you know, to 170 producing, either managing or producing a to managing and producing a total of 170 to$200,000 a month when they get ready, you know, close to maxing out. And then those that go beyond that, that's um when you really score. So being only four, almost four years in the business, you know, we're still working on getting books full. And so as we go down the road, I'm looking forward to seeing some of these guys that's learned a business that they'll be taking on more business, and my cost is already there. So it really helps become more profitable.

SPEAKER_09 29:00

Okay, and you're you're full-time in the business too. Are you one of the ten?

SPEAKER_01 29:06

No. Uh wait a minute, I might be. I may have to count them again. But yes, I'm I'm in the business and I'm on payroll now, obviously. Yeah. So um, yeah, I pay myself, but it was kind of our agreement with me and my partners because I left a you know a pretty good job and got in this business. So it's based on however you build your business. It it differs across the the system. It differs.

SPEAKER_09 29:33

Any other um of your partners or owners who are working in the business or just yourself? Just okay, everybody else's arm's length, not in an operating role. Great. Thank you, Bubba. Appreciate it.

SPEAKER_04 29:44

They're just golfing, right, Bubba? All golfing and hunting.

SPEAKER_02 29:47

Golfing and hunting and doing whatever, yeah.

SPEAKER_08 29:53

And the day-to-day, Bubba, the you mentioned before RFQ submissions. Uh within the uh uh within the process and support uh from corporate because there are many diverse services and products, is it difficult um to pull together the information that you need to submit um a competitive uh RFQ submission? Or do we have a lot of the information and uh all templatized and priced? Uh we don't have to chase uh uh costing and final pricing. Uh how difficult is it to pull together?

SPEAKER_01 30:27

It's not difficult at all. You gotta remember our business model, and we speak to it when we're in front of prospects. We're not the cheapest in town. That's not what we come to the table for. You know, we're a management company, right? So we're not the cheapest, but we can pretty much uh ensure them we're not the most expensive. So we try to bring the quality piece to the table and with a fair price, right? So RFPs are typically not where we fit, right? But there are some RFPs you'll find where the entity is looking for quality service. So they'll be very vocal about we're not taking the lowest bidder or if we're taking the lowest capable bidder, or some language like that. And so we look for that language. We don't bid on all RFPs. I passed up one last week because I just it wasn't a good fit, right? And and you and you'll learn that as you get going based on your uh loaded rate in your market, based on where you are, kind of learning your competition. Some of the other models we compete against are employee models. So it kind of changes things. And a lot of times those models can go really dirt cheap on RFPs or you know, larger bids. And uh we we've learned to kind of look at that, look for those pieces of it before we you know spend time on it. So it's just something you just learn as you dig in.

SPEAKER_08 31:50

Terrific. And just as a little follow-up, how how reliable in a startup market, um, looking back at your early days, uh, what kind of reliability did you have with uh uh with securing uh competent vendors?

SPEAKER_01 32:05

That's a really good question. So when we interview uh folks to support us, you know, we we want to really do our due diligence. We want to know their history, the type of uh businesses they service, um, their um capacity, you know, how many, how big a how big a company are they? Um, you know, what are what kind of industry do they like servicing? We have found where some of our crews will work in medical, but they really don't want to try to keep a floor shining in a car dealership. I mean, they, you know, they it's just weird how you learn who these folks are in your market. Uh for us, out the gate, man, we loaded up on service providers from obviously janitorial to window washers, pressure washers, whatever, to painters, plumbers. Um we've got several uh roofers, we've got several parking lot pavers. Um, so as you go through all the services that we we present to prospects and and obviously clients, uh you build around that based on what your markets, what you're seeing in the market that you can compete with. Um the client relationship is a key. You know, we you know, if you read up on what we're doing, we go in and convince and ensure the client that we're there representing them. So if they put trust in you, then it's it's typically pretty pretty smooth after that. Uh building relationships, etc. So we've done very well in the non-janitorial space. Um having said that, we do have times where we think we're pretty good on price, and you know, somebody else out there is gonna go lowball it to get it. But um we learn from those situations, of course, too, so we can uh be better prepared as we go forward.

SPEAKER_02 34:04

Thank you.

SPEAKER_05 34:07

Um yeah, I my question was was like you answered part of it, uh, or you asked part of it around vendor management. Um, you know, how difficult is it to find and retain uh those independent contractors? You talked about vetting them. Um how many how many individual contractors do you do you engage with? I mean you must have uh you know thousands of accounts. So uh it's probably not one-to-one, but you must have a multitude of you mentioned several different industries, so that must be a a management prop nightmare in and of itself, I think.

SPEAKER_01 34:43

It is so it's not just okay, so let's let's pull back a little bit. So in our model, what we like to do is when we find a solid quality providing contractor, we'll go up to five accounts before we hit the pause button. And what that does is it obviously reduces your risk if someone says, I'm not going to do this anymore, right? But it also gives you an opportunity to see where they are in their business. So it's not to that level that you're describing. So I'm just sitting over here on my monitor and in uh last week, March 10th, I paid around 45 contractors, okay, for the month. And that varied from janitorial to a window washer to whatever, you're right, landscape or whatever. So when you take out of those 45, probably 35, give or take, were janitorial crews. And some of those have multiple locate, multiple accounts. So once you find your solid, reliable service providers in whatever service you're you're you're you're doing, then you that that'd be they become your go-to. So we have we have now identified at this point which ones we can rely on for certain things. And then once we get to that five account, we bring them in, we see where they are in their business. You know, if if they're learning how to grow as we grow, then they may have capacity to bring on two more accounts or three more accounts. Then you can exceed that five, but we try to cap out at five accounts just to protect our business uh and and reduce our risk. So it really depends. There's some there's some subcontractors in the city in the citywide system that that do a lot of business for a market. Um, and as your market grows, um, you're gonna you're gonna see them grow with you and they'll take on 10, 15 accounts. I mean, it just it can happen. So that so going back to finding them, we've used different different methods. We've gone through social media, we've gone through um different um advertising practices, referrals. I can't tell you how many crews I have because we started working with this group and they knew some others, they they start spreading the word for you. So we like to really go into business treating our folks the right way and show them that we can grow their business, pay them a fair wage or contracted price, obviously, and they'll spread the word a lot of times for you. So um it's been pretty pretty neat to watch that transpire here.

SPEAKER_05 37:40

Yeah. Quick follow-up on the on the opposite side of that scenario. Um, what happens when you have uh report of poor quality or you have to get involved and maybe you have to eject somebody?

SPEAKER_01 37:54

It will happen. It will happen. Um I think in about almost four years, we've terminated four to five contractors, whether it was poor service, whether it was some something happened in one of our buildings. And with the relationships we build, one of the things we're able to do is ensure our clients, hey, if something doesn't go right, we can pull the switch pretty quick, right? It's it's the contractor model, right? It's not an employee where you got to go through all those steps. So if we have an incident and it's to the point where they gotta be removed, we've we've got it designed where logistically we can place another crew in there immediately. Um and there's plenty of those takers out there if we need them. So yeah, you just that's just part of managing it. That's just part of managing the client, the service, um, and really falling in line with who you got in a building and making sure they're um gonna do the right thing. It's gonna happen though. You know, we it's the human factor. We're gonna have a bad apple pop up every once in a while in the bushel, so we gotta uh manage it accordingly.

SPEAKER_06 39:19

I think my hand stayed raised.

SPEAKER_08 39:22

Um I'm gonna take it down and give others a uh a chance.

SPEAKER_07 39:25

Alex, why don't you pop in?

SPEAKER_00 39:27

Thanks so much. Hey, Bubba, also just more hearing you, congrats on all the success. It seems like you're really just running the playbook and it's going according to plan year over year. So that's exciting to hear. Um quick question. So uh I'm in a current franchise system now, but we do this presentation of like where's the dollar go? And um, it'd be really helpful just as I'm trying to project out and do a pro forma for this to understand. I I mean, I appreciate all the information you've shared financially already, but even if you could just give us like what the franchise system tries to manage to for normalized margins, for instance, first 10 cents of every dollar is royalties, 50% goes to paying our vendors every month, 10%. Let me see if I can answer that.

SPEAKER_01 40:15

I think I get pretty close for you. Uh so for every dollar, five cents is royalty. All right, we use so the subcontractor piece can vary, and I'm gonna explain that for you. And down here, and a lot of markets do it, um we come in around 66% to the service provider, the one doing the work. You can go a little bit lower, meaning 64, 65. Just I like to say that as the be careful area because your quality may be impacted. And then we'll go as 68, 69. But where we try to target 66 is because we've implemented the chemical piece for standardization efforts. So we don't go in buildings and find fabuloso and pine saw and all these non-commercial type chemicals. We want to be professional, uh, use a quality gray chemical. And so we are involved in that piece. And by being involved in that piece, I can dip my subcontractor percentage and try to get a point back or so through buying and providing and supplying the chemical piece. They still bring the the mops and the vacuums and all that, but we've we're pretty much, especially on our clients that we service three or more days a week, you know, if we're in there a lot during the week, we want to bring our chemical with us. If there are once a week, twice a week, which are very rare, then you know, it is what it is. Um, and we just make sure through account management and night oversight that the closets are compliant or our janitor closets are compliant with the right chemical. So we try to shoot for that 66% mark. So if you got five and then your overhead, you know, the rest of it you try to squeeze out um, you know, early on, 5%. And then once you get debt free and your fixed cost are taking on more revenue, like I was explaining earlier with your account managers, then you're gonna find bottom dollars uh popping up for you then. So that I hope that helps. I mean, you're gonna the the middle piece, meaning that last piece of um what is that, 29, 29? Yep, that's where you're playing with your overhead. You know, how how big of a nice office do you want? How you know, your comp packages and all that stuff.

SPEAKER_00 42:53

So just real quick to dig one layer deeper, if I can, um, like your office staff, your 10 people, that fixed overhead. Do you try to manage that to a certain percentage of revenue? Yes, 10 to 12, maybe something like that.

SPEAKER_01 43:09

I think that's kind of the ballpark. And then sometimes kind of staying ahead. So if you see businesses ramping, you're like, you have an oh shit moment coming up, you may have to eat some costs to get people training ready for that ramp up. And so sometimes add a dip on a month or two. But the I see, you know, I'm always keeping the one, three, five-year vision going. And so if I see, okay, initially I got to put money back in to get to the next point in time, then we we do that. We're looking at the bigger picture, and you just got to take those steps to get there. So, um, but yeah, that's kind of on a dollar sixty six cents, uh five cents to royalty, and then the other twenty nine. And uh if you can get if you can stay, you know, within 20 cents of that, then at the end of the day, you're doing pretty good.

SPEAKER_06 44:08

Incredibly helpful. Thanks. Okay. My turn for a question, maybe.

SPEAKER_09 44:18

Um so Bubba, when you have your your ICs and you you're entering into the pricing with your ICs, I'm assuming that that's uh a fixed, a fixed amount per month as opposed to there's no hourly or anything like that with your ICs, right? That's correct. Okay, so you set so you set there, you set that price right about the same time you're setting the price of your contract, and that's that's how you can get to the 23%, 23% or so, 24% that you're looking for on average. Yep, yep.

SPEAKER_01 44:52

So one little neat thing about that step is when we sell a contract, our our account managers are gonna walk more than one of our crews through a new account. So they're going to see that they're kind of competing with another contractor for our business. And I preach it to our our network of contractors. I preach that I'm your client. I'm just putting you in my client's building, I'm putting you over here based on our agreement, right? And so you'll see a lot of them will um notice that, and then they'll be ready. So back to that 66%, they'll start understanding our model to where, okay, I can I can take on the work and not be at risk of getting paid because I'm getting paid on the 10th of every month. So I know when I'm getting paid. And if I can get two, three, up to five accounts, then these the smart ones, they'll figure that out and they'll say, Hey, you got any more business? Hey, you got any more buildings I can clean for you? So we see a lot of that after we got going. So that's a kind of a win situation if you find some of these folks that really truly get it. Um, but yeah, that's um that's pretty neat when we get a new account and we get ready for a new start that um, you know, we're able to share it with more than one contractor um and let them see each other so they know that they're not the only ones working for us.

SPEAKER_06 46:25

Yeah. Okay, yeah, thank you. I have a question for you again, Bob.

SPEAKER_03 46:34

Uh yes, sir. What does a day in your role now look like versus when you first started, more referring to uh the prospecting piece of it, the business to business, the selling.

SPEAKER_01 46:45

Yeah, that's a good question. So today's world, I am um with my team. I've um I got a guy that I just promoted to director of uh business operations. It's a little different because we're not really ready for the DOO role yet, but he's more in the project management roles because of the NASCAR contracts and stuff like that. So he's wearing a project management hat, but I've put the night management under him to take it off of me. So that reduces the direct reports to me, gives me back some time. And um, and it also gives him an opportunity for me to start building my layer of management and leadership as the business grows. So back compared to days of wearing all the hats, now out of the 12 hats, I wear the sales manager hat. I wear obviously the GM hat. I wear um the DOO hat, so the account managers report to me. And I uh collaborate a lot with my admin, which is now a controller, um, on billing financials, um, AR report review, stuff like that. So I think now compared to when we started, I'm probably instead of 12 hours a day, I'm now can really get my work done in eight, give or take. And there's some days that I can be done sooner. Um, I'm big um on time management and I'm preaching around here a lot. And I try to really be here for the team that's still, you know, kind of in the org chart is under me, but at the same time be able to collaborate and then get out of the office like I did today for a couple hours and do some networking and um go visit some folks. So it's a lot I breathe easier today, and that's just the norm. I mean, you know, start a new business, you got to be involved in every aspect of it. But three and a half, four years later, I'm I'm I mean, it's always been fun, but now it's really getting fun because I can go stir shit up outside the office.

SPEAKER_03 48:55

Right. So second question to that. So what what percentage in the beginning versus now were you actually beating, you know, pounding concrete, you know, out in the streets?

SPEAKER_01 49:05

Yeah, so day one, we basically had a sales executive, right? So I would spend 30% of my time selling, 30% of the time making sure clients were serviced, and the other 30, 40% on running the business. Um, so sales, ops, and the admin hat, the GM hat, right? And then as the business took off, I'll probably move sales down to 20%. Because when we get going, ops becomes about 80% of the business, if not more. Because your book grows, your client base grows, then you've got a lot more operational stuff going on than sales. You know, sales are being sales, but you if you bring on two to five accounts a month, well, you still got all these other accounts that you've got in your book of business. So it becomes more lopsided, if you will, as you grow. And uh so now I probably spend, yeah, way more time on admin and ops than I do sales because I'm a big, big believer in retention rate. I hate losing business. So I don't care if someone calls and says, hey, we're gonna go in-house, we're cutting cost, nothing against you guys, y'all great service providers. It still eats me up. So I try to spend really more time now operationally, even though I love the sales side of it. Yeah, understood. It's just based on yeah, it's just based on you individually and kind of how things evolve. Yeah.

SPEAKER_03 50:36

Yeah. Last part to that question is what percentage of your sales comes from knocking on doors versus, you know, my team, yes.

SPEAKER_01 50:45

They they're gonna get they're gonna get a ride at half half of their sales by going on an appointment that they scheduled, and next door down the street where they are, be smart with your time and your logistics and knock on doors and share with neighbors, if you will, um that you know, I'm servicing this business down the street from you. I'd love to give you a free quote, whatever your pitch is, you know. Um, yeah, knocking on doors is a big part of it, for sure.

SPEAKER_02 51:22

Knocking on doors. B2B sales is very important.

SPEAKER_06 51:26

Very important.

SPEAKER_07 51:30

What would you tell yourself five years ago that that you didn't answer on on this call?

SPEAKER_06 51:37

What did you tell five years ago Baba?

SPEAKER_01 51:42

The first be ready for the first two years because of all the hats, you're doing training, developing people, obviously hiring and all that part. But when you look back, I didn't I come out of the the corporate space, right? And I really had never rolled up my sleeves and been a business owner. And for me, looking back now and knowing what I went through, which I look back now and it really makes you appreciate what time you spent in the business because now I can get a return on that time. Um, if I had to look back, I would hopefully be a more prepared for what was coming. So, my advice to you guys if you jump into this, it's it's fun. Um, obviously it's um lucrative if you get in there and roll up your sleeves and put the time in, hire the right people, um, and go through all that workload and lift, and then it eases up after that. Um, but I I would have to look back, Adrian, and go, dude, get ready. You're you're you're making this decision, and it's not gonna be sitting behind a desk every day. You got to get out, you got to see people. Um, you may have to clean a toilet or two. It's just part of it, right? But I look back now, and I'm for May 1st would be four years. We opened the door, and uh, I feel pretty good about what what I sacrificed, if you want to call it that, to uh get to where we are. So um I'm excited about where we're headed.

SPEAKER_04 53:25

So would you just say get a really good night's sleep before you sign that franchise agreement? Because that's the last, last, last solid eight hours you're gonna get.

SPEAKER_01 53:36

100%. You're gonna be tired at night, whatever time it is.

SPEAKER_04 53:40

Yeah, yeah. Okay, one last question. Who's gonna take us home?

SPEAKER_03 53:45

How much how much do you answer to citywide?

SPEAKER_04 53:49

Listen, Sean, they all answer to me. I'll tell you that right now.

SPEAKER_03 53:53

That's a real that's a real question. We know who the boss is. That's a true question. As a franchisee owner, do you actually answer them or are you just talking numbers, or what's the what's the relationship like? Don't don't sugarcoat it. She's on the phone.

SPEAKER_01 54:06

No, I won't. We're partners, right? So we're in the local market, and when we need them, we have our path to go to wherever we need to get answers, right? IT, marketing, where wherever. There's there's we're a partnership. So they help us behind the scenes, making sure we have the the operating tools we need, et cetera. Um I've I've really enjoyed collaborating with those that I have for almost four years now, or right at four years. And um all the resources are there, you know, as as it comes, as it becomes relevant, you know, as you take off. So um the partnership is what I would call it. It's it's you know, you're running your business, you're a business owner, you're making your decisions every day where you sit. Um, but they're there behind the scenes as uh things take off because you're gonna need them. You're gonna need them.

SPEAKER_08 55:07

So can you double-click on that, Bubba? Can you give an example where corporate was able to come in and help you out of a difficult situation or a problem that you had where corporate was able to support?

SPEAKER_01 55:19

Yeah, last year I landed the NASCAR contract. My team is at that time six or seven of us. And I needed 20 plus people really to manage that property. So several of the guys from the home office or support center, they came in and we just figured it out, right? So they go to markets. Uh obviously, uh the different departments in Kansas City are there. Um and and you can you can collaborate most of it through calls like this, phone calls, emails. Um the visit to the office is just on, you know, situations or occasions where you need you need somebody here. But yeah, for the most part, it's it's a partnership based on um, you know, scaling your business and and having the tools in place and utilizing them properly.

SPEAKER_02 56:18

So it's all it's all been been a win-win situation.

SPEAKER_04 56:25

Bob, I can't thank you enough for your time today, uh, helping all of these candidates really evaluate the brand. You were fantastic, as always. Very grateful. Um, thanks everyone else for spending the hour with us. Let us know if you would like to be paired up with Bubba offline and and have some of those private conversations. Thank you, Bubba. Have a great weekend. Enjoy the next question. I think everybody's getting it.

SPEAKER_09 56:51

Bye, everybody.

SPEAKER_08 56:52

Cheers.