SPEAKER_03 0:10

Hello everybody, happy Thursday. We've got a full house today. Nice to see you guys. Thanks, Sam, for being here today. So glad to have you. I see we've got uh several people in the lobby joining us right now. Hi, John. Good to see you. Um, let's see, we've got Suscott, we've got Tim, a couple people just joining as well. Some Sam, some of the candidates here have been on have been on several calls, and some this is their very first time. So we've got all sorts of questions probably coming out of us today. I will let you get us started though with giving us um a little background on yourself. If you could introduce yourself to the group and um tell us a little bit about what your background is in, how you got to Northern Virginia, what your data DNA, your team looks like, anything you can share with the group before they start diving in with their questions.

SPEAKER_09 1:10

Sure. Um, so yeah, I'm Sam Ross, uh, been with Citywide, uh, going on nine, nine and a half years now, um, different roles. Um so I came from the industry before uh about 10 years ago. I did work for 10 years for a facility company and um was exploring opportunities and ran across citywide, similar to how you guys probably ran across it, you know, saw some ads, talk to people or whatever, um, and had some conversations with my past partner and um decided to um kind of start this endeavor. Um it's been a great, uh, great uh almost 10 years, almost uh 10 years for me. Um so we did um start by operating one citywide that had been in business about six years, five five and a half, six years when I started. Uh so um got into that um market, um, was able to turn it into a platinum market within the first 10, 12 months. Uh we decided to open our second market, so we opened up Greensboro, North Carolina. Uh that one also hit platinum market, they both did the next year. Uh, we decided to open to buy Wilmington and um Fayetteville market, so we bought a third. Um, that one was doing really well, so we decided to open up another one. We opened up Norfolk. Uh, it also hit platinum market, they all three did at the same time. So the last year I was in that partnership, we opened up Las Vegas. So we had four, five that we had purchased in five years I was there. So um after that, you know, they were all doing really well. Um, I did decide to change my role and move to Northern Virginia uh and become a corporate partner with um the corporate partnership group here. So now I'm a corporate partner in Northern Virginia, which is the DC Metro. Um it had been here for I believe it was like 13 years, 14 years. Uh, was not doing that well um when we took over as the partnership. Um and um after you know being here for a while, we were able to definitely over the last two years, we've doubled, almost tripled our numbers here. So um, you know, so I'm super happy about this uh market I'm in now. Um and um, you know, working on a lot of things with uh the initiatives within the corporate.

SPEAKER_03 3:37

So thanks, Sam. I think that's really helpful for everyone to know, just to give you guys um also some additional context. Like Sam said, he's he's opened several markets, so um all across the the coasts from new from gosh, North Carolina to Las Vegas and now in Virginia um has been a part of several startup markets from scratch and is now a free and ch in a market that has been around for a while. So he has a lot of different perspectives, which I think is really valuable for every different stage that y'all are at today. Um, but just wanted to provide that additional context so you guys can frame your questions. So, all of that being said, who wants to go first?

SPEAKER_05 4:23

Uh hey guys, I was on the last week too. So uh curious to see, Sam, how how your answers might uh vary. But uh curious to hear about how your experience was coast to coast, right? Like how what were some major differences you saw between different markets, or was it generally the same hurdles or challenges that you uh overcame? And just kind of curious to hear your perspective on the different markets.

SPEAKER_09 4:48

Yeah. Um they all they all pretty much operate the same. Um, you know, you have the same kind of staffing, you have the same sort of pay structures, you know, it may vary a little bit depending on the market. Um the the contractor pay is very, very similar. Um, you know, it fluctuates 10-20 percent depending on the market. Um you know, um you know, between Vegas, Raleigh, and uh Northern Virginia, I think the hourly rate may vary two or three dollars an hour. I mean, it's not a ton, you know what I mean? Um it really depends. Um I would say of all of the markets that I am in now, uh, or I have worked in personally, um, the DC has the highest wages. So it it is a higher wage market uh as far as our employees go. Um so um, you know, we definitely have had to pay higher salespeople, higher FSMs, um, not tremendous, but on the higher end. Um and um all of our other markets, the Vegas, the Wilmington Newport News, I mean Newport News and all that, they were pretty pretty standard across the board uh as far as pay, I see pay, you know, expenses and things like that. So there wasn't too much of a variance there. Um so does that does that help answer question?

SPEAKER_05 6:10

Yeah, and then like what what do you think were key differentiators that brought you success over the last couple years in uh the Virginia market?

SPEAKER_09 6:19

Um well in Virginia it was a resale. Um so you know, we we purchased a market that was not doing well. Um my first day I walk in, I I immediately go, let me get the book we bought. You know what I mean? Um so we bought the we bought the book, How to Run a Business and How to Make It Successful, and like implemented the process, right? So, you know, that's all I did. Um, I don't I wish I had a magic wand, I could make it happen, but uh we did grow. Um we we grew, we doubled our numbers the first year I was here though. Um, and that was you know um pretty outstanding um as a group. Um it was it was literally going back to the basics, you know, the managers run their route every day, they visit their clients every 30 days or every two weeks. They, you know, you do an inspection, you ask our score rating. Um, the salespeople do 50 to 100 activities a day, they get three to five appointments a day, you know, and it's all written in the playbook. Um and the team, the team, it was it was it was retraining everyone, you know. Um, we lost a couple people. Oh, yeah, there Michael's got the book. Uh just follow the book. You know, follow the book. Um, and and and you know, and and that has been anytime anybody asks me what they should do, I go, Well, are you doing what the book says? You know, like do you have two FSMs at this volume? Do you have three salespeople? Are they getting a hundred activities a day in the system? Are they, you know, if if you if you're not doing the stuff, it's not gonna work, you know. Um, we've been here 60 years. Um, all of the, you know, we're growing, hit a billion, almost hit a billion, about to hit two billion in a couple of years. Obviously, we know what we're doing. Um, and you know, um it just follow the book, you know. Um it is a it is a pretty good gauge. It tells you at what level to hire another person, it tells you at what what pay ranges you should be looking at hiring the people at. Um, I know um the HR team, Alisa was helping with all that too, to get all that together, you know. So we have a lot of guides um there. And um it's it's a pretty easy, pretty easy thing to follow. I mean, you got you have the grant, you have to get in, do the do the work, you know, and and you have the customer service and all that, but just follow the book.

SPEAKER_03 8:36

And I didn't even have to pay him to say that.

SPEAKER_07 8:41

No, it makes sense. I mean, that's the purpose of franchising is right.

SPEAKER_06 8:45

So go ahead, Alex.

SPEAKER_04 8:52

All right, I'll go ahead and jump in. Sam, thanks for hopping on here with us and uh appreciate uh hearing from your perspective, launching three markets. Um maybe just to dive into that playbook a layer deeper, can you give us like the first two chapters, maybe, right? We're just going to market, doors are open day one. Where what's the low-hanging fruit? Like, what's the go-to-market strategy thought process? I'm sure it's in the training, but if you could kind of help us think about building out our business plan and what we should be focused on.

SPEAKER_09 9:24

Sure. Um, well, first the first part is to define if there are any or figure out if there are any national accounts in your area, because we have a national account team that that is rapidly selling national business, signing MSAs, working with customers on a large scale, um, not CBS, but yeah, as an example, CBS pharmacy. Um, so some go under MSAs where we can prospect locally, but it can go through the national team as far as billing, which is makes it easier on collections if it goes through the big payment instead of an individual, right? Um, they they also could have pre-existing business in your market. If they do have pre-existing market money and the market revenue monthly, I think that I think we you can tell them how much that is or whatever. I'm not sure if they can or not. Um, but um that becomes yours, I think, um, if you want to purchase it from them for a really low sum. Um, I think our ours sells it five times or whatever, um, and I think it's one and a half times or something to that effect. I can't remember the exact numbers, uh, but it's really low, and you do it over 12-month pay anyway. So when we we had we had um a new market open that I had business in um six months ago, um, they they automatically took over those accounts and they started paying us um 12 payments of the of the revenue. It helps them get started, right? Um, I I believe we we have um accounts all over the country, so there's very few that don't have any. So um, you know, check with Lisa or Savannah, I guess, and see. Um so that that is just automatic revenue. It's automatic clients you can approach. Um, and then also just you know, going out there and and trying to do both service, you know, lands um, you know, uh janitorial landscape and also project sales. Uh the project sales are really quick. Um, the contract sales take a little longer, you know, and just kind of do a mix of it all um and just kind of get out there and and and go. Um, you know, Alex.

SPEAKER_03 11:24

I'm gonna jump in real quick just to talk about the chapters, Sam, if you don't mind. Um I'm gonna share my messy inbox. So excuse me, but let's just be transparent here and show you guys what you're looking at. The book is something you will read through and through. I can guarantee if you have six, if you if you follow the book and read the book, you will get yourself off to a great start. One of the things that we do is send you out emails that follow along with the book. So it likes to talk about your first couple of weeks. Your first activity or your first week is do the activities. Um, we want to get you started there. There's gonna be an article that talks to you about deeper in depth the importance of the activities, the amount of activities, and we're gonna walk you through week by week, chapter by chapter, um, all of the different pieces of the puzzle, attracting the right contractors, what our UVP is, and how you represent that to the client, so on and so forth. So this is gonna go every single week, your first year, but you're also gonna get that in a book. So it's gonna give you, like Sam said, the playbook, but your initial couple of chapters are really focused on doing the activities and finding the contractors.

SPEAKER_09 12:39

Yeah, finding the contractors, um, doing the activities, like she said, a hundred activities a day, you know, trying to get three to five appointments, uh, getting some staff hired, um so that, you know, and getting them trained on doing the activities, everything comes from the activities, um, and and then just kind of um you know starting to run from there. Hiring the contractors is a big piece, can't do the work without the contractors. So, you know, getting in there and and and really recruiting ICs. Um, there's a couple tools you can use. Um go ahead.

SPEAKER_03 13:13

I was just waving. You can go ahead.

SPEAKER_09 13:14

Oh, gotcha. Um sorry, um there's a couple of um tools uh are workable or onboarding platform or recruiting platform has has templates to help recruit ICs. Um so you can use that um resource, uh, bring them in, meetings, you know. Hey, we just want to partner with you, we're gonna try to pay you fast. Um, you know, we really want a partnership here, you know, uh let's grow this together. Um, you know, we're stronger together, and just start onboarding contractors, even if you don't have the work yet. Um sometimes you can onboard contractors from you know other markets near you or or whatever to help in the beginning as well. Um, so yeah, that I mean that's the the beginning, like she says, is you know, figure out what you have, the low-hanging fruit is always the national stuff or or the referrals of other customers, you know, other things that have sold and national things that you can see on our sales announcements that come out, um, and then activities, getting in that routine, getting in that rhythm, you know, making sure 100 a day, um and um you know, always asking the question, you know, what's next with the clients, you know, when you're visiting a client, you know, hey, the cleaning's good. Okay, what's next? Can I cut that tree down with jet out front? Can I, you know, what can I do? Can I can I fill that pothole out front? Um, you know, and so forth.

SPEAKER_07 14:34

Great. Look forward to reading the book. Thanks.

SPEAKER_06 14:39

Go ahead, Rodney.

SPEAKER_02 14:42

Thanks, Savannah. Sorry I'm late, everybody. I was actually talking to Bob Summers in Boston. Um Sam, great to meet you. Uh, Rodney up in Buffalo, looking at potentially starting the uh citywide market up here. Um I was actually just talking to Bob about the same thing, but I'd love to hear your perspective. And Michael, feel free to yell at me because I know I just asked you about this earlier today, but I'm kind of trying to get my head around how a citywide franchisee either competes with or partners with some of the smaller kind of regional local um property management companies here. I mean, here in Buffalo, you know, we have um several. Um, is that an opportunity or uh seen as kind of a competitive threat to a citywide franchisee?

SPEAKER_09 15:24

It um uh it depends on the it depends on the conversation and how you get there, right? Um, so they do feel like sometimes we're taking their job. So you got to get past that conversation. I believe on the in the book, I'm gonna go back to the book. I think in the book it says property managers are like last on our list as far as target goes, because you know, they they are always looking for the cheapest price. They're always looking for somebody they can beat up and get free stuff for, yeah. You know what I mean? It's a very difficult thing there because they're also not loyal at all. Like for$10, they'll switch tomorrow and fire you. Um, so you know, it's not really your target. Um, you know, your target is the you know, owners of a building that have a dental office downstairs and they rent out upstairs their hair salon and they don't have time to manage it, right? That's our target. Um, maybe a you know, medical building, a dialysis center, restaurants, you know, stuff like that, um, 20,000, 30,000 square feet, 50,000. That's a that's our target, like bread and butter, right? Um, the property managers, you will win, you will develop relationships. And um it takes networking, it takes going to IRUM, which is um international real estate management uh group that you can join and go to their charity functions and meet and greets and things, you know. Um, and you can get in there. Every property manager more than likely is gonna bid it out. They're always gonna pick the lowest bidder. Um, we're not always the lower, we're usually middle bidder because we do provide better management. Um, and you can't be uh you can't provide a better service and be the cheapest at the same time, you know. So it just doesn't work in the in the in the market. Um you you you will get, I mean, I tend to here in Virginia um get a lot of NJS or OS project work from property managers. Um we have more resources than they do, so it's kind of funny because they'll lean on us. So um CBRE Colliers, um, I was talking to JLO yesterday with Steve, our national account. Uh we actually have a meeting with them to sign an MSA for some of their buildings with JOL. And so there's they're there they are leaning on, they lean on us, right? But um Colliers International, we do service about 200, 2,000 locations, small, tiny locations across the nation for like um break fix stuff, like maintenance repairs like on demand for one of their customers that's a really small medical facility. Um, and and that's what Collier said. Like they said, we don't have the manpower that you guys have, so we really need your help with this stuff. And it could be hang two pictures on the wall in Utah tomorrow, and then over here in Texas, they have a roof leak, you know. Um, you know, so so so you can get the business from them. You'll win some janitorial agreements and you'll win some landscape agreements. I have about probably about 20 landscape agreements out right now for property managers. Uh, we are we are, you know, and again, it it it just depends on on the bid and the number. Um, so I mean, uh, you know, I hope does that answer? Yeah, Michael.

SPEAKER_02 18:28

Thank you, Sam. Go ahead.

SPEAKER_00 18:31

Sam summed it up really well, but it's funny because I just got an email from our national account team. Um, Amazon uh has got an opportunity, and it came to us through CBRE. So they've got about 10 different sites right now that big distribution centers that they need help with. Um, it literally came in through a marketing lead, which is really interesting because we've been doing a lot of interesting marketing stuff. And then we um we just won another opportunity. Um, well, we're close to winning an opportunity with Bob's department stores that came through JLL. And we just recently got into a portal for uh one of the big property managers. So you can play with them, and Sam's right. Sometimes they see you as a threat, but if they really understand our business well, we get to, you know, you know, we we get to take a lot of the work off their plate that is a distraction to them. They don't want to manage the 20 different trades that we're managing. They've got bigger fish to fry and bigger real estate issues to fry. And if if we can be seen as a good partner to them, then it's it's it's a win-win for them and and they love it. Um so it it just depends on which door you enter. I think if you enter in as a uh management company servicing a bunch of trades, I think it's actually a lot easier than if you come in and try and take one little piece away from them, then you look like a competitor. So that it just it just really depends on the situation.

SPEAKER_02 19:53

It's exactly what Bob said. Bob's advice was don't go in saying you're building facilities management, go in with janitorial, because they're always gonna sell out the janitorial, and then you can get into that crack, hopefully.

SPEAKER_00 20:03

I I actually I'm actually saying the opposite. And sometimes Bob and I disagree on things, which is okay. And Bob's Bob's a monster in the system, so he's usually right and I'm usually wrong. But I actually think the way Adam's going in right now on the national account team, he's selling it as no, we are the management company, but we're doing these things. You're doing these things. We're just better at these things than you're at. We've got, you know, uh the whole value of our system is obviously our night managers and our FSMs. And they don't do that. Like, so so we make them look good on those things and they focus on the bigger fish that they have to fry. So just different, different, different approach. Not everybody's approach is going to be the same to the same question. It just depends on which market you are, where you are in your life cycle. Um, it varies greatly. Some are very heavy, heavily focused, like Sam, on landscaping, and he's done a great job with the system. Others haven't touched landscaping yet, and they don't use that door. So it really depends on the people you're talking to, which is the beauty about the system. There is a model to follow, but it can come in different flavors.

SPEAKER_03 21:16

Sam as a multiple-time platinum market winner, I'm curious to know. Obviously, you've had this success with both the RPC growth and also their retention. So, what kind of objections do you hear with clients and how have you previously overcome those?

SPEAKER_09 21:39

Objections. Um I mean, a lot of the objections are price, you know, but it's always price no matter what we bid at, you know. Um and you you do have to um just talk to them about the management piece and and and make them like you. You know, people do buy from who they like, you know. it's only 10%, they're they're not necessarily not gonna buy from you. Um you know, um talking about the management, um our CRM, the follow-through, the FSM, the night manager, um you know, the inspection piece, and also how they become a priority for all of our extra services for emergencies and things like that. But it it does tend to make them want to navigate towards citywide. There's very few of our competition that can assist if they have a broken glass door at four o'clock in the afternoon where their building's exposed that can clean the building but also get the door repaired before six o'clock. You know what I mean? There's just not one person. And so they're calling people in Google, having to pay on their credit card maximum pricing and all this you know stuff and we can have it done in 10 minutes for them. So it it is always the the value proposition we offer you know we're gonna we're gonna we're gonna manage better than anybody out there and we're gonna sit at the same side of the table as the customer and be a be you know their thumb of their management team. You know, we're gonna be part of their part of their business organization and put a put a manager in place to manage their facilities for them. So you know we we definitely um you just have to get through that um you know retention you mentioned I mean you know we normally run between 92 and 96% retention rates um you know constantly I have for 10 years. You know even if somebody's about to fire us they're not happy if you just go see them or talk to them and you're just really honest and you know just hey this is what I need man you're not paying me enough you know you know what I mean let's let's find a yeah a solution here I've had those conversations probably four times this month um and and they all came with a positive outcome right um they're like wow I'm so glad you said gas prices are affecting your landscaping you know I mean yes it is um you know gas is double right now so you know we we definitely could use a little bump there and you know this and that but but they they do they do really um you know and the system averages I believe 92 93% every year since I've been here so you know and I know um you know that that is really high in this in this industry to be in those in those high numbers for retention and if you can maintain the business and continue to sell it just compounds and compounds and compounds you know so um yeah thanks Sam go ahead Tim I was on mute there.

SPEAKER_10 24:38

Um trying to figure out how to get it off. So thanks for the time Sam and sorry I can't be on the video as I'm driving between customers right now. But I had a question more on the lines of when you're doing like bigger bids and the customer needs you to get three quotes right and I was listening to the call from last week and he said and Jason was saying you just you give them three quotes from three different vendors. But at least in the world that I'm in now they're they're gonna want to see three different names on the three different quotes not just citywide because then you can just kind of manipulate the numbers for yourself.

SPEAKER_09 25:14

So how do you work through that with the customer where you're getting them the multiple bids but they all are through citywide sure um so that happens sometimes um sometimes it does not happen right uh so so I mean I don't think CBRE would accept three bids from us for one building you know what I mean um I I do have clients though um HOA groups um um apartment complexes sometimes um sometimes smaller doctor's offices where the doctor owns the building and things like that where they don't have time to do the three bids so they do ask us to shop for them as their management company uh because you know we again we're not the worker we're the management company we usually submit them on one quote but it says vendor A, B, and C. We don't release their names or whatever. And we we do we do that quite often. The HOA groups um find it um very valuable that they're not having to spend their free time for free going out there meeting vendors and things and we can we can supply them with with those things. They can also sometimes meet our three vendors with us. So the manager could go meet them with vendor A, meet them with vendor B, meet them with vendor C, walk the property, and then we submit all of the bids in so we can do that. It really just depends on what the company or what the person that's asking for the proposal if they want that or if they won't accept those. You know what I mean? It really depends on a case by case.

SPEAKER_00 26:41

Yeah I I think to add to that I think Sam's right. I mean again this comes down to how the account was sold what the relationship is with the client you know we have plenty of people in the system and Sam can attest to this where you know they went in and sold that we're the better janitor. I think some of you heard me say this on the last call and that's not what we want to be. Now look sometimes you just gotta you just you just got to sell a deal and you get the deal done and later on you try and clean up the mess you might have created by selling it the wrong way. Because you know at the end of the day let's be clear we want to stop the burn as quickly as we can and a deal cures all um but if we sell it the right way up front and they truly understand that I know this sounds cliche and it's in the book you'll read about it that we represent the client that if if we are truly their facility service manager or their facility solutions company then you know they're happy to share their budget with us because we're gonna go find the contractor to do the work at the budget they budgeted. That's our job. They trust us to do that. So if they really trust us all the way on the other side then they know we're gonna go talk to multiple of our ICs that we've already vetted that we know are good. That's what they're buying into and we're gonna bring back to them the best one the most competitive one the one we think will do the best job and then we're gonna manage that relationship and if they fail and they're not following the scope we're gonna replace that person with one of our other contractors and it's seamless to the client. Now but if they if they really want to see the three bids we have a brand new national account that I've been dealing with and he literally gave us a list of 20 services that they do in their buildings and said here take all these please I don't want to deal with these people anymore and he also gave us all 20 of his vendors and he admittedly said on a call and I hate most of these guys but if you want to use them and you want to manage them and you can get them to service me better I'm all for it. I don't care. That's like the ideal customer by the way he called me the other day and said hey I know you don't do this but we've got cranes in our buildings because they big big trucks they build heavy machinery in big trucks and he said and you know we need those cranes uh calibrated every month and it's a requirement a state requirement that we get them certified he goes can you do that and I said well I don't think our guys do that today he goes I know but now you'll get to change all your brochures and say you you you know you now provide 22 services he goes but please take it and here's all my vendors that I use again I hate half of them but that's your problem now so it just depends on what door you enter whether you can get away with saying I'll pick the best one for you trust me I got it it's at your budget you shouldn't care I'll manage it on the other side um or if they want to talk to multiple people and to Sam's point we often will walk through a building when they're giving us a job and walk through every one of those ICs and they'll get to meet them too. So you know it it's it if you can get to that nirvana spot with clients it's a great relationship. Did I get any did I get any of that wrong same no you're good.

SPEAKER_09 30:04

No I I have several clients like that I have the one I can't say their name a big aerospace client um that did the same thing they came to us and they said look we're tired of managing these 25 vendors here's all of our vendors on board them we know you're gonna charge us 30% management just take them all bill us for everything and you handle all of the maintenance for all of our building um and we do all of the non-secured uh services meaning like ballot repairs security gate repairs um landscaping services snow removal um all their PMs of their gym equipment all their kitchen repairs and PMs of all their equipment there um window cleaning it's a 20-story building um and and they gave us all their vendors what they're paying the vendors and said charge us 30% more and just take the contract um and they gave us a three year contract they just renewed it for a five year uh so they without going to bid they said we're not we don't have to bid we're not we're not government we're just gonna give you a five year extension we're gonna give you five percent a year increases on all the contracts and they just issued a new po the other yeah a couple months ago for five years so we're good there um but they don't they don't want to manage anybody um and um you know once in a while a vendor sent you know them an actual invoice by mistake and then they would call us and say put your 30% on and send us back you know and things like that. So you do get that good relationship with the clients and they do they really do appreciate us. We're not a janitor service you know we're not a we're not that person. We don't want to be that like Michael said um I'm you know I'm not necessarily we're gonna manage the the cleaning better we're gonna manage their facility better we're gonna do the best cleaner's not doing good we're gonna replace them with somebody else you know within 48 hours um you know but again we want to be their their we want to be their favorite vendor best partner. Sam can you talk to us a little bit about your sales executives how you compensate them how you incentivize them what their day-to-day looks like um the salespeople um they get a base pay um a guaranteed base um and um then they get a a car allowance monthly um based you know we we do 650 here in Virginia um the sales base um I think the the range is you know 60 to 80 somewhere in that range uh for around the system I believe um and um then they're paid um commission uh based on their sales for the month um so we're on a plan that pays them uh 40% of what they sell um every month based on paying them out over a three payment plan so if they sell 10,000 this month they get 4,000 we split it over three months um to help them equalize their pay um and then once they hit their goal for the year which would be uh I think it's like 82,000 um it's uh is that 82,000 in net gain that's their goal 72,000 in net gain once they hit that we bump them to 80% for the rest of the year uh because we want them to try to get to that 72 really quick um and then once they hit the 72 the rest of the year they get 80% of the first month split over three months. And then we give them a quarterly bonus if they make their um quarterly goal. And then they kind of a new new program we're doing they they they actually get commissioned for one-off jobs now so we've we've recently changed that uh we're running test models right now with all the corporate locations so um where the salespeople can sell projects to um and they get 20% of the profits as long as it's above uh 36% uh I believe it is of uh uh margin um so um they get paid a couple of different ways um and the the on-target earnings for a salesperson selling 60 to 80 000 a year in contract revenue and maybe 5,000 and or 10,000 in projects is probably around 100 12000 you know what I mean all in um and you know it's pretty fair pay for them doing that.

SPEAKER_00 34:33

Sam when you when when you just for clarification for their purposes when you say 80 000 that's monthly uh recurring that's monthly recurring revenue correct and so it's really you know the full year they sold 80 in that January it's the rule of 78.

SPEAKER_02 34:48

So you're multiplying that 80 times 12 for the next year assuming you're keeping them so salespeople pay for themselves pretty quickly they do yeah they do um and then another 120 120 to 250 in contracts i mean in non-contractor like project sales on top of their their uh recurring revenue so awesome running thank you thanks Sam um yeah kind of a two-part question on sales exec so it's 40% commission up to quota and then 80% as an accelerator over quota.

SPEAKER_09 35:20

Yes um is that once they hit once they hit their annual target now this yeah um a lot of the different citywides have different pay plans they're all similar um in somewhat uh we just switched to this plan uh like very recent this is a a new a new initiative we're doing the previous plan uh we paid 25% of the first month for the contract sales um and then when they hit their monthly goal of um I want to say it was like 5,000 then they went to 50% and then once they hit 7500 it went to 60% of the first month but it reset every month the new goal is they're at 40% until they sell the 72000 in contract sales for the year and then it goes to 80 at that point for the rest of the year. And that would be a a diamond player right so if the diamond player is going to be the ones hitting the 80 those are the ones you really want to keep um every you know the other ones you know 50 to 800 50 to 8000 they would be at 40% for the whole year. So you know it it they won't hit the target to go over that. Okay. And then they used to not receive any project sales commission for project sales. So they only could earn income from contract sales. So every office right now is kind of testing different things so um a lot of them are moving more toward the can the salesperson can sell anything. So um that's where the the kind of changes are right now. Is the commission paid on just the first year's contracted revenue or is that paid in perpetuity as long as the client is a client of the franchise so the way we do it is I mean and I you know I've there's different companies pay different ways my old company paid a really small commission every month for you know ever but it was like one percent uh we pay a lot up front so it's only based on the first month uh that's all and it's paid out over three months um our locations we did um and we still have it right now to where if they hit their goal I think it's it's 130 I'm sorry I don't have the exact numbers I'm I don't always know all the pay pounds but um if they hit 130 for the year then the following year we pay them like a I think it's like a five percent of everything they sold for the year as like a residual for next year. And every year they continue to make their goal of like 130 we would compound that year after year for them. But if they miss a year it resets to zero right so we did that as like a way to like give them an added incentive I had two people hit it two years ago but last this year they did not hit it. They missed it by just a little bit so they all reset to zero again. But that's a new plan. I think they've only had that plan for about two years like a residual kind of trial plan. And you know it's five percent of the of the you know um I think 13000 so maybe six thousand and we split that over six months so a thousand a month you know um would be if they hit that and if they hit 135000 you'd be really happy to give them six grand you know what I mean so um that that that was another piece to the like kind of um trying out different ways okay and then just one more follow up question one I see your hand up so I'll I'll shut up after this but um what what's uh what's the DNA of a sales exec where do you find them what do you look for in them? Well I mean we have um we have a recruit uh recruiting system workable you have access to um uh it goes on Indeed and Google jobs and I mean all the platforms um you know there is that uh the word of mouth um LinkedIn you know all those all that stuff um we have three surveys that we send every applicant um one's the cognitive ability uh one is um kind of like their um personality profile and then one is like a sales assessment um the sales assessment is an hour long it's pretty in depth uh but it will say recommended or not recommended it's pretty pretty good got guide to follow you know um if they don't have a uh recommended score we do not move forward with them as far as our locations go um unless they are recommended for sales for sales um and then there's certain profiles we look for in sales with the other surveys um there's like captain profile I'm a persuader uh I'm good um and uh so that would be a good one um and then um there's a couple other ones that fit sales um so we have a lot of tools to kind of find those kind of people um but you are looking for outgoing personalities uh we don't usually like to hire people from the industry I think I'm the only person in the whole company that's ever been hired from the industry I seriously think that uh but you know you usually you don't want to um they have bad habits they weren't they weren't trained anything other than janitorial it's kind of really difficult to kind of get them onto our plan um and and our way of doing things so you know but you are looking for people from CentOS or people from enterprise or people that have done door to door you know hard door you know door to door business to business sales.

SPEAKER_03 40:30

Okay thank you and then Savannah if you see me coming again I got to take the rest of the call from my phone so I'm gonna come back in I will say enterprise just uh for you guys' also understanding they have a great management program I'm sure you've heard about it too but we do have a lot of our top sales executives come from that throughout the system. Um go ahead nice to meet you by the way I have not yet met everyone nice to meet you hi Sam uh yeah my my question is kind of the same line that you were uh you were saying same same um so what what is the role of the owner within that sales team what is the role of the owner with the in the company um not in the company we within the sales team you are one of the sales guys you are um the main head of sales what's what's the role of the owner within the sales team in the beginning the owner is going to be one of the salespeople for sure in the in the beginning of the first couple of years you're wearing a lot of hats you're being the the salesperson you're being the FSM the facility solutions manager account manager and then you're oftentimes even being the night manager and you're being the independent contractor recruiter now over time our goal is to one take several of those hats off of your head but you also get to a place in which you're able to afford to hire people at certain contract revenue like Sam was mentioning that can begin to take all of those different roles.

SPEAKER_09 42:06

So now Sam where you are at within your tenure what does your day to day look like as it relates to your sales teams my my day to day today um we're um is I I have a director of sales so I have um um a leader in the sales department with three salespeople uh three sales exec one caller and then two sales execs um and then I have a director of operations and she manages the managers so um she has uh three FSMs and three night managers and then I have a um office manager here um that does coordinating between sales ops me they help me out with things administratively or you know sales team ops team she's just kind of all over the place um we we we um utilize citywide for accounting um and for um HR and recruiting and um everything so I have no zero office duties I don't oversee any of that here um which I believe every new person has to do for at least is it a year Savannah is it still a year um that's really valuable everybody just saying just I don't want to keep that um but um it um and so it takes a lot of that off of your plate and lets you focus on sales um so every day you know I I just coach the team I go if it's for the large customer or some problem or training um at this point when I first started um both of the directors got promoted this year so um but before if you'd asked me in December or before I was the director of operations I was the sales manager I was the I was all of the above there um because we were still below six million at that point Now we're trending between eight and a half to ten million this year. So we'll we'll hit somewhere in that range. And when I when I started here, it was two and a half years ago, we were at 2.9 million. So you know we're definitely growing fast. And that's kind of the structure I have today. And then as you grow, it just it just um you know it just grows from there. Uh the office manager does our recruiting as well for our contractors. Uh we we use uh citywide uh HR for our recruiting for uh employees um and in-house employees. Now when you start though, like Savannah said, you know, you would be kind of doing sales ops, managing the buildings, and it's really important you do that so you just learn how to do everything. Um, so you you know every role um and things like that.

SPEAKER_01 44:52

Makes sense. Thank you for on that. Um and the last one that I had from your experience, what do you think is the hardest part of the business uh during the first 12 months, maybe? The sales part, uh the contractor's part, what what do you think is the hardest part?

SPEAKER_09 45:16

Um there, I mean, the hardest part is always gonna be sales because you're you're trying to get to your break-even, and then also 100 people a day tell you no, right? So you gotta you gotta figure out how to navigate that. Um, recruiting contractors when you don't have a ton of work isn't hard. It's just you know, it's a little more difficult, right? Um, so you know, I would say definitely getting in, trying to learn the sales role. Most owners start with sales, hire an FSM, I'm pretty sure. Um, at least a lot of the ones I know that have started, started that way. Um, and then pretty soon hired a salesperson, you know, a couple a month or two in. I'm not, I can't remember the exact times. Um, but sales is always that. You gotta learn what we're selling. Um, you know, you you have to learn how to sell it, you gotta learn who's gonna do the work. You know, there's a lot of that kind of going in. Um and um so you know that that that that is the hardest sales.

SPEAKER_07 46:17

Think of some yeah, sure.

SPEAKER_05 46:22

So so when I think about this, I mean maybe it's because I have a sales background and I'm naive, but I I foresee it the and you're obviously Sam a beast, but like I foresee the management of the initial relationships with and management of con subcontractors being a really difficult part. Um so curious to kind of hear how you've navigated from ground zero uh around vetting and managing contractors and in scenarios where maybe they don't show up or they do a poor job.

SPEAKER_09 46:57

Sure. Um so we have a couple of um you know um things in place to help you know make sure that doesn't happen. Um uh so the way we do it here in Virginia is the way I've done it in every market, no matter if it was a brand new market or if it was an existing market, is every Wednesday at 11 we invite contractors into our office to have a group meeting kind of like this about how they can join our network. Um so we don't really um and we do it in a group setting on purpose so they realize that there's other people that want to join, right? They're not the only one, we're not desperate to have them, right? We want them to join, we want them to be a partner with us, um, but we do it on the group setting. Um, the presentation takes about an hour. Uh it's it's it's provided by corporate, and you might change a couple of the of the numbers or rules, but overall the presentation is developed and on our platform for learning. Um, and you just go through the process, right? Um, most offices uh to join our network costs money, right? Because we want the owner to be be vested into why they're here so that they don't not show up for work, right? So we do charge them to join our network. Um, different offices charge different amounts of money. Um, I think down to some of them charge$700. Um, some of them charge more. Uh, we charge um$1,450 to join our network here in Virginia, and that's the flat rate. No one can work for me unless they pay us$1450. Um, we do finance that for them, uh, no interest or whatever. Uh but we do a down payment of$250 down, and then we do$100 a month for a year off their checks once they start working. So they have to pay me$250 to start. Um, and then the$250 goes toward their vetting, their background check. We give them two uniform shirts. We kind of get the ball rolling with setting our expectations. Um, once they start working the first job, we take performance deposits from every account we give them, which is 50% of the first month, and we hold it in our account, and we do not ever give it back to them unless they give us a 30-day notice to lose the account, to give up the account, and they do good work to the very end. If we take the account from them or we lose it due to quality, or they don't show up, we take their 50% performance deposit from them. Um, in my 10 years of citywide, there may have been three people that didn't show up. Uh, brand new contractor, first contract. It was a really small$200 one. But most of the time that doesn't happen because we're we're making them pay to join, we're telling them how serious it is. We're we're we're holding bonds against them, we have their money in the bank. Um, so I have one contractor, we pay her$80,000 a month. Um, I have$40,000 of her money in the bank. So her employees are going to work tonight. And if they don't go, she'll be at the building. You know what I mean? So, like it helps us kind of secure that relationship. Um, it is important that you kind of get those processes in place because they're all kind of in place for those reasons to protect the service, to make sure people show up, to make sure the owners are vested and joining. Um, you know, not everybody's gonna want to pay us, you know, they're gonna think we're selling franchises or blah, blah, blah, like to a sub-franchise, like other, like some of our competitions sells franchises below the original, like regional franchise. Um, and we explain to them, you know, we're not, but it doesn't work with every contractor because some of them don't want to do that. That's fine. We're looking for good fits that fit good with us that want to be good long-term partners with us. Um, so the contractor part has always been really easy for me uh and my team. Um, you know, we do bring them in once a month in person to the office on the 10th to pick up a check in hand for anything they did the month before uh for the whole 30 days. So anything they did in um in April on May 10th, they're gonna get paid in hand a check by us. And our checks are 99% accurate. There's hardly ever any errors or issues. Um, and when they're here, they're meeting with you and their managers to talk about their business, what they could do better, uh, any complaints they had uh about how they're ready to grow their business, or are they not ready to grow their business? And so you're actually helping them develop their business and grow their business. So they do, they're very supportive of us, um, and they really do appreciate our assistance in helping them grow. Um, so you know, there's a lot of things in place to help with that. Um, did that kind of answer your question?

SPEAKER_05 51:43

Yeah, I know that's actually super interesting. Is this something? And I know you said maybe the numbers change a little bit, but it sounds like this is something that's implemented system-wide.

SPEAKER_09 51:51

Yes.

unknown 51:51

Yeah, yeah.

SPEAKER_09 51:52

Yes. Um, some of them do monthly forever. Uh we do not. We only do 100 for 12 months. Um, we do charge, um, you know, they pay for their uniforms, you know, we don't pay for the citywide gear for our contractors. Um, they do they we do require that they wear our citywide shirts, um, but um we deduct it from their checks and so forth. Um and it just helps with branding, right? So um, you know, we we just yeah, and and that's all in the um standard operating procedures, um, you know, how to onboard a contractor, how to do the performance bonds, how to do the initial fees to join. Um, and and you know, there there are different different ways to do it, but you can always change how your office operates. Uh, in North Carolina, my five offices, we charge$5,000 to join all my four offices before. Um, and we did a$500 down payment, and then we did like$50 a month for five years or something like that. Um, and we because we were trying to make the contractors hold them more accountable and make them like really um have more skin in the game. And when we changed from$1,200 to$5,000, we didn't see any difference in the amount of contractors we were onboarding. They just kept coming, you know what I mean? So um, and uh so and and that becomes a big part of your PL if you know 50 or 100 ICs paying you$50 a month or$100 a month toward their onboarding, you know. Um, it it just it's it's it goes straight to the bottom of your PL, right?

SPEAKER_05 53:23

Um does that does that differ per like you know, I I guess I call it the more project-based jobs versus like the janitor, I imagine.

SPEAKER_09 53:33

Yeah, good question. Um, so yes, it depends on your office. We still charge them$250 to join and$100 for 12 months, regardless of who they are, unless I need them in the um if I if I need their service, right? Um, the example Michael gave earlier, I can't remember what it was, of the crane person. I don't have a crane person either, but I can do crane work. So if somebody calls me, I'm gonna figure it out. But if I need the contractor, I'm gonna waive it to get them in the system. But if they're coming to my Wednesday meetings at 11 wanting to join our network, they're still gonna pay me$1,400. Now, projects, they don't have deposits and they don't have like administrative fees or whatever. Um, but I do still charge them the$14.50 to join our network because I do still want them to be um part of our network. Um and it just depends on you know where you are. I'm really strict with our contractors. So if you want to be an electrician for me, we will only pay you$75 an hour during the day. That's a flat rate. We do not pay anybody but$75. Um, and we make all of our electricians fall in line with that price structure. Um, and we charge our clients$110 an hour. Um, we do the same with HVAC and plumbing. We and we set the rates and we we onboard contractors and tell them this is what we will pay you. Um, and then sometimes we, if it's a big remodel project and we need a GC, we don't set pricing, of course. But like if it's something we can set, then we do set pricing. Um, with electrical um plumbing, you know, um HVAC, it took me a couple of months to get five or 10 vendors on the program when I started here three years ago. You know, at first a couple said, no, heck no, it's$500 an hour, you know. And I said, Well, that's great for you. It's not gonna work for me, though. You know, now I have 10 of every trade that's agreed to our pricing. So now we can offer value pricing to our clients, you know, um, and uh, you know, just roll with that. Um, but it it just takes time, it takes time just just getting the relationships and finding the people.

SPEAKER_05 55:34

Yeah, yeah, yeah.

SPEAKER_09 55:36

That makes sense.

SPEAKER_05 55:37

I guess you're selling you're selling them too, so yeah, it makes sense.

SPEAKER_09 55:40

Yeah, they don't have any collections costs, they don't have any uh bad debt to write off because we pay it every month, they don't have any marketing costs. All they have to do is answer the phone and do our work and we pay them, you know what I mean? Uh so it definitely saves them a lot of fun money they would have to pay to grow their business.

SPEAKER_03 55:57

So hey Rodney, I know we're coming up on time, but I saw your hand was up. Did you want to jump in and ask the last question?

SPEAKER_02 56:06

Yeah, that's okay. Um, and I do want to be respectful of everybody's time. So um, Sam, kind of just to your last point that you mentioned, what have you found to be the most effective sources or ways to recruit contractors?

SPEAKER_09 56:20

Um we we do um LinkedIn posts, Facebook posts, and then use our workable platform. Uh, we get 90% or 95% of our contractors from referrals from other contractors or from workable. So we don't put a ton of outreach um effort into outreach. Um we we use our our uh workable by posting an ad in every city, every major city, because I I'm over Arlington, Fairfax, you know, um, I don't know if you know Virginia or not, but Quantico, right? So all the major cities, we post an ad saying looking for janitorial independent contractors, looking for landscape independent contractors, looking for electricians, looking for plumbers. And then we refresh those. My office manager refreshes them about every 60 days. And then three days a week, she logs into workable and sends a mass email to every person that's applied or showed interest. And the it the email is automated through workable that says, Hey, every Wednesday at 11, we do open open discussions about joining our network. Please feel free to come any Wednesday, no appointment needed. Here's the address. We would love to discuss our our um our uh opportunities we have to grow your business. And then so we don't actually say call us, text us, email us. It's every Wednesday at 11, our doors are open. Any any of y'all can come by, see us Wednesday at 11. Um, and um, so people come, if they come the wrong day, we say we're really sorry, but we're on a strict time frame. You have to come Wednesday at 11. Um, and we because we try to do it um on a on a set time. Um I've found that if you do it all over the place, then you're shuffling papers and you never can get organized with anything. So, and it distracts you and it distracts your office. So we're really strict. It's Wednesday at 11. Um, it takes about an hour, hour and a half. Um, but that that is workable is um and you know, um, I worked on that with Lisa getting that whole uh workable uh recruiting um software thing through workable, and it's really good um um as far as um its capabilities to get people.

SPEAKER_06 58:22

All right, listen.

SPEAKER_09 58:24

Got it. Thank you.

SPEAKER_03 58:25

Thanks, Sam. All right, y'all. Well, this was a great hour of questions. I really appreciate all of you coming prepared with questions. It makes the hour super beneficial for all of us, and I hope that you got a lot out of it. And Sam, thank you so much for your time. It's really incredible to see the growth that you have had within the organization, but also in Northern Virginia and how much you have grown that d dramatically over the last couple of years. So, congratulations to you and thanks for giving us all your advice.

SPEAKER_09 58:53

Thanks to you guys. Thanks, everyone. Thank you everyone.

SPEAKER_05 59:00

Lisa.