SPEAKER_02 0:07

Hello, everybody. Happy Thursday. Hey, Rodney.

SPEAKER_05 0:15

Hi, John Judson. Nice to see you guys. And Scott joining us as well. Welcome. You guys, we have John Rubel out in central Kentucky with us today. And he is going to be, hi Judson, nice to meet you. I'm Savannah. Thanks for joining us today. Um, John, I mentioned earlier, but we've got some people kind of all throughout the phases of the discovery process. So you'll hear all sorts of questions. But what I will have you guys do is let John give his background. Tell us, John, a little bit about how you got started with Citywide, what were you doing beforehand, what your market is, anything like that that can kind of give us that general introduction of you and where you are today. Um, and then you guys feel free to come off mute and just join right in with your questions that you want to get answered today. So, all that being said, John, I will hand it over to you.

SPEAKER_02 1:20

How are we doing, guys?

SPEAKER_01 1:24

Okay.

SPEAKER_02 1:25

Yeah, so uh good.

SPEAKER_01 1:27

So I joined uh citywide in 2013. Uh previous life, I ran uh a commercial interiors business. So I was VP of sales for most of those years. So kind of everything that would go into uh this building, a school, a hospital. So kind of knew the B2B uh facility type world. Uh when I came in uh to Cincinnati, uh very small at the time. We were about 3.9 million uh in December of 2013. Uh and then since then, my progression has been director of operations, uh general manager, vice president. Uh in the last two years, I've been president of Cincinnati. And then about three years ago, the owner of Cincinnati and myself uh joined together to open up Central Kentucky, uh, which is technically Lexington. And so I've really seen uh seen about everything in citywide, ton of growth. We went from 3.9 million in Cincinnati in 2013 to now uh finished last year about 32 and a half million, and we project somewhere in that 36 to 37 range uh in Cincinnati. And then in Lexington, uh three years in, uh we'll finish this year somewhere around 7 million.

SPEAKER_05 2:59

That's awesome, John. Congratulations. It's very, very incredible to see the growth that you've had within the company and what you've done for the organization. So we're excited to have you here today. I'm gonna kick it off by starting. I think one of the primary questions I'm sure everybody is wondering is when you started Central Kentucky a few years ago, what key pieces were really important for you to really kind of kick off your success, I think, quicker than normal in your central Kentucky? After having been in the company for several years prior to that, what did you first do to really accelerate that growth in the first year?

SPEAKER_01 3:42

Yeah, so the good good news is you coming into this, there's a there's a model that you just need to follow. Um, you don't have to reinvent the wheel. You know, bring some of your expertise from whatever industry you're coming in uh will be helpful, but really it's about sticking to the the plan, the model that's already established. Um that first couple key hires, that sales executive, uh, your night manager. Um if you're bringing another leader in at the same time, you know, is really getting the training from home office, um, working with a couple other markets that are established. I'm sure, you know, they'll introduce you to some markets like us and try to learn from them and the mistakes or you know, positive things that they were able to build off of from the very beginning. Um, but really there is a playbook that's already established. And if you follow that playbook step by step, um every market that I've worked with or that I know of that was really um committed to the model, all have had success early uh in the business by just you know being really committed to exactly what the playbook uh teaches us. So, and maybe to addition to that, we were a little bit fortunate in that coming from an established market that had been around for a long time, we did pluck one of our um leaders who was a director of sales, uh, to come into market into Lexington with us and operate that as a general manager. So we we were fortunate on that end. Um somebody that already you know had been operating for seven, eight years with us to come in and really just take exactly you know the fundamentals that we stress day in and day out in Cincinnati to do those exact same things um in central Kentucky.

SPEAKER_05 5:55

Awesome. Can you expand on that sales role a little bit with that being the key hire and somebody obviously you were able to transition? What kind of key components are you looking for in your successful sales executives? Have you found that they come from any previous roles or previous companies that can help people find the right salesperson moving forward when they start?

SPEAKER_01 6:20

Yeah, we from a starting point, um, we're really big with predictive index. So your PI, it's going to be your personality profile. Um, we're looking for certain traits for individuals, for candidates that fit that outside sales role. Um, so we want somebody that can be independent, go out, um, operate, uh high drive, high pace. So you might come across someone that has a really good background that doesn't fit the PI. Um, as much as I always like to convince myself I can make anything work or turn somebody into something. I've just seen it over the 13 years. The the PI is very um, very telling and it's it's very accurate. So I always start with the PI, the cognitive, which is like a wonder lick, um, also very important to make sure you know that they can keep up with the pace, um, they can work well in the field on their own. Um, so again, that to me is the starting point. But as far as backgrounds, I like B2B, you know, people that have been out talking to businesses, they understand those business needs. Um we we pull from groups like CentOS, Enterprise Rental Car, um places that have good training structure and they come to you typically with at least a couple years, two to three years of selling experience. So, especially, you know, kind of building this from ground up to take somebody that doesn't have much sales experience would be daunting for the owner or the leader of the business. So, really uh having some sales experience, but they need to have that, you know, entrepreneurial spirit, the hustle mentality, um very driven. You know, they want more, they want to achieve uh money motivated. You know, most businesses that are in our world, um, all those things that I shared are critical components of success. Um, obviously, as you're building a culture, you want to make sure that first hire is that individual is going to be a little bit of the person that sets the tone of what your culture is going to be like. Um, I've passed on super talented salespeople that I could just tell, you know, it was all about them, it was their way or the highway. Um, they weren't going to kind of help feed into or build a culture. It was really going to be, I'm going to go get mine, and that's just how it's going to be. I try to avoid that as much as possible. Um, I know early on, you know, you kind of have to take some risk that you might not have to take as the business is established. Um, but again, you're just always thinking culture first, um, because that's the foundation of the business. And you know, if you can avoid the me, me, me uh individual, I think you're gonna be in a much better spot as the years go along. Um yeah, just really any quality business-to-business salesperson, they're used to knocking on doors, they're used to making phone calls uh at a decent level. And even a high networker is also a big attribute. You know, somebody that wants to get involved with the chamber, you know, wants to build a network to share leads. Um, you know, that's that's an important element for sure.

SPEAKER_05 10:18

I think that's a great point. You know, I don't think we talk about the culture fit of a salesperson enough on these calls. I think we talk so much about their backgrounds and what we look for and what we pay them and all of those kind of all of those different pieces, but somebody that really adds to your culture and creates that strong culture that you're looking for is probably such a a piece that we should talk about more. And I I love that you mentioned that too, because those are the people that are gonna stick around longer, that are gonna have that career trajectory, that have something to work for, and being able to create that career stability will be will create successful owners too. So thanks for adding that in.

SPEAKER_01 11:02

Yeah, yeah. And it's um as much as this business is about uh selling and developing new opportunities, uh, just as big a part is uh retaining everything that you sell. And I think you know, you can probably uh sell quite a bit with some of those me mentality individuals, but really uh just the biggest element is retaining that opportunity for extended periods of time because that's where the real money is to be made, is that recurring revenue. We talk a lot about 54 months. So we we've gotten it up to the average account for us, stays with us for 54 months. Oh wow, and so you have to really work hard on that foundation, that culture, the ops side of the business as time goes along, so that you can retain that revenue for extended periods of time.

SPEAKER_00 12:04

John, would you mind to also now segue into the account management side? So once you get those accounts, now can you describe that other player, the FSM, so account manager for citywide?

SPEAKER_01 12:17

Yeah, so your facility solutions manager, aka account manager, another critical role. Um, we talk about it being operations, but really, you know, they have a huge selling element to their role as well. So bit of a unicorn, and that you know, we need them to be strong operationally to be able to retain the business, but also being able to sell the extra services. So your stripping wax, your handyman, your window cleaning, your consumables, um, some of the bigger project stuff like um parking lot resurfacing, uh, even I would say tenant improvement type work, so light construction. Um that's also another really uh critical role within the business. Um I would say it's a little bit easier to hire that individual than maybe the outside sales role, because again, there's just such a fight in every market to find a really strong outside sales person. Um but it's it's an amazing role. Uh really we've got 12 in Cincinnati, we've got three in in uh Lexington, and it is a it's an amazing uh opportunity for somebody to come in because they're gonna be working with a variety of different customers from medical office, you know, property managers, um, private schools, car dealerships. I mean, they got a really nice, diverse uh account base that they can kind of feed off of. Um and those individuals I I feel like are very special. Um people that are just got great attitudes. Um, you know, they also have that entrepreneurial spirit where they treat their account base like it's their own business. And um, it can really be the foundation of citywide because to me, I look at the contracts that sold is really what pays the bills. That's the recurring revenue. And then everything that the FSM does on top of managing and retaining that business, that's really where the icing is. It's really where you can make some money as a business is um through what the FSM does.

SPEAKER_05 14:51

And how much monthly contract revenue on average do your FSMs normally handle before you hire that next person?

SPEAKER_01 15:00

Yeah, typically somewhere between 130 and 150,000 in cover monthly contract revenue.

SPEAKER_05 15:06

Okay.

SPEAKER_01 15:08

And again, like follow the formula, the model. Um there's trigger points. Obviously, you're starting the recruiting process sooner than that. Um, getting them through the door, finding that perfect candidate, getting them hired, getting them trained, and by the time they're ready to take on their own route, that's typically around 90 to 100,000 in contract revenue. And they kind of build up from there. So you don't have to have somebody jump into a route with, let's say, 60 buildings, 130,000 in revenue. You don't want them to start with that much. You want to allow them to build towards it. Um, so that that way they can do it the right way. They can retain, they can learn how the role works, they learn how to sell within these accounts. And you know, within six months to a year, they have a full route and they're they're crushing it for you.

SPEAKER_05 16:11

Man, I hope nobody's cars or no nobody's motion sickness on these calls between between me, me pacing and John driving. I hope I'm not making anybody dizzy.

SPEAKER_01 16:30

One of our Lexington customers is having um they're having one of their gallas tonight. And so I'm following Nate, my general manager, and we're uh we're heading down to Louisville.

SPEAKER_05 16:44

Oh fun. Well, that's awesome. Will Doug be there too?

SPEAKER_01 16:50

Uh actually, he's gonna be at the golf outing on Monday. He's not gonna be uh for this galley, he's not gonna be here. Currently, he's not doing any work with them yet. Uh, but that's what we're hoping for with this uh golf outing. We're gonna make some introductions for him.

SPEAKER_05 17:07

Oh, awesome. Well, I hope it goes great. Um, Judson, I saw that your mic came off. You want to jump in and ask a question?

SPEAKER_03 17:15

Oh, uh yeah, absolutely. Uh, you know, uh first of all, how's everybody? Uh I'm not sure if you're familiar, but again, I'm Judson. I was uh looking at the um, I'm here in Alabama, I was looking at this uh Mobile Baldwin County uh territory. So uh, you know, hopefully I'll I'll be uh joining more on these calls. But yeah, one of the questions I had uh was the uh, you know, kind of, you know, with the the experience that you guys have had, um, owners, in that 24 months, um how did you guys fall as far as um um monetary distribution? I mean, were you profitable by that time? I mean, what how long does it take to become um profitable, I guess, uh typically uh with citywide?

SPEAKER_01 18:04

Yeah, um obviously being connected with Cincinnati, a larger, more established market, we were able to do some shared resources like accounting, recruiting early on. Uh, we were we were making a profit within 12 months. Um I would say without those shared resources, uh I would think probably 24 a month is completely reasonable. Um maybe even sooner, just it really depends on the strength of the owner, leader, uh salesperson, just obviously how much rent they generate the first couple years. Um if you come out of the gate strong, you know, I think you can can beat that 24 months. Um, you know, if it's a little bit slower pace and on the sales side, you might might be more closer to that that 24 month period.

SPEAKER_03 19:05

Okay, fantastic. Uh one last question, and I guess it's a little bit of a it's an important question, but it's uh as far as like the owner take home. I mean, what is what does that typically look like as far as percentages of the you know the revenue? What is what's the typical ownership percentage if you can go into that? I don't know if each each territory has their own, you know.

SPEAKER_01 19:27

Yeah, so I mean our ultimate goal, uh, we want to be at 10%.

SPEAKER_03 19:31

Okay.

SPEAKER_01 19:32

Um early on, I I think that's going to be typically hovering in that five to probably seven percent area. Sure. Um, but I think once you're established, um being in that nine to eleven range is is completely reasonable. Um I think there is times where you're making investments into the business that's going to help you grow for the future.

SPEAKER_03 20:00

Sure.

SPEAKER_01 20:00

Um so you might dip down a little bit, but really the ultimate goal is if you can hover in that 10% range, uh I think that's that's really healthy.

SPEAKER_03 20:13

Okay, absolutely. Yeah, those are good numbers. Yep. Uh that's all I had. Well, I I have a few more, but you know, we'll just, you know, I don't, you know, I don't want it to uh uh take up the whole uh meeting time.

SPEAKER_01 20:26

So and you and you're in a recurring revenue business, so everything's about you know selling it, but then you know, obviously the retaining piece being so critical. Um the better job you do with retaining the revenue you create, you know, it's just the compounding piece. So again, I mentioned the 54 months, you know, we want to get to the point where we're at 60 months. So we're able to realize um that revenue for that period of time is just um before you know it, you wake up in the morning, like in Cincinnati, we're close to billing, uh just shy of billing two million a month uh in recurring revenue. So we wake up the start of the month and we're at two million. Um it does take time, you know. It's it's just a you know gradual grind and build to get to that point, but you can do a lot of things when you're starting a month with two million dollars.

SPEAKER_03 21:25

Right, right, right, absolutely. Yeah, yeah, no, that's uh it's uh fantastic. And again, I don't know how much uh the team uh is familiar with my background, but uh I'm I'm an attorney, uh, so I'm used to trying to keep my clients and they keep coming back. So yeah, I mean I'm all for it.

SPEAKER_01 21:44

Yeah, gotta you gotta have that mindset here. I've seen guys that come in and obviously they do an amazing job selling the business, but their frustration really comes when they can't retain it, you know, because they're working their buttons. Off and they see it go out on the other end, and that's where the the big frustrations lie.

SPEAKER_02 22:06

Right, right, right. Go ahead, Rodney. Thanks, Savannah.

SPEAKER_04 22:13

Hey John, Rodney Reisdorf. I'm up in Buffalo, New York. Thanks for your time today. No problem. So I guess to kind of uh piggyback off that last point of retaining customers, have you found any any secrets or keys to success of finding really good independent contractors? Because I have to imagine that having really solid contractors and a network of them is going to be one of the you know the keys to retaining clients.

SPEAKER_01 22:41

Yeah, no, it's um it's a big part of our business. Um commitment to that early on is paramount. Um another element, if you go out and sell it and you don't have a great crew to do the work, um, that's a problem. You know, but there is a ton, you know, I know in our markets, I mean they're everywhere. Um even in the sales element, you're talking to somebody and they're really happy and they really don't plan on making a move. Well, the question is, do you mind asking who you're working with? And you know, we're always trying to grow people's businesses. If they're working, you know, with more of a small to medium-sized uh company, happy to talk with them. Um most people, if if they're happy with who they're working with, well what wouldn't care who that is. So you've already got a a reference or testimonial of somebody that's already really happy with the quality of service that is being performed. Um that's one element. Um, you get out, I mean, there's Facebook marketplace, there's cars driving around, there's, I mean, there's just so many places where if you spend time in it, you're going to find people out there doing the work. But the early stages is really figuring out who is quality and who is not. Um so I would just say as much as you're putting energy into selling opportunities, there's going to have to be equal energy put into identifying those independent contractors. And there's various sources. Like I could give you uh 20 sources that you can lean into to help you find those independent contractors. We started investing probably six, seven years ago in Cincinnati with um Hispanic Radio, and that was a great source for us of just you know, radio, uh social media, um, with the Hispanic Radio uh conglomerate up here. And we get we get fed stuff all the time. And it I mean in Cincinnati, we've got 300 independent contractors that we cut checks to each month. Probably 165 are in the cleaning uh world. Um we've probably got 45 to 50 that are on the bench awaiting work. Um in central Kentucky, we cut checks to about 55, 60 independent contractors a month, and we've got probably 15 sitting on the bench awaiting work. So, you know, they're there. You just got to put the energy into finding them, vetting them. Definitely recommend getting references, even going out and seeing and inspecting their quality of work. Um, because again, they're not willing to come let you come out and check their work, um, they might not be the right group to partner with.

SPEAKER_04 26:08

That's really helpful. Thank you. Just one follow-up to that. In um starting the Central Kentucky market, did you focus on either closing customers or building your contractor network more than the other, or did you just you know go at both of them as fast as possible? Because obviously, you know, you want to sell customers so that you can tell your contractors that you've got work, but you don't want to oversell customers and not have the contractors to be able to deliver the work.

SPEAKER_01 26:39

I'd say it was probably about 70, 30 getting getting business. Because again, it it takes a second to build it. You know, if you're putting 30% of your time into the independent contractor site, you'll find enough to get you through the early stages. It's really critical to get those uh new accounts started. So, yeah, really probably that 70-30 split is really where we spend our time in central Kentucky.

SPEAKER_04 27:10

Got it. Thank you.

SPEAKER_01 27:11

Welcome.

SPEAKER_05 27:13

Just so I can follow that too, make sure I I'm understanding. John, are you saying 70% of that is coming from your finding the contractor first, or 70% you're finding the business first and then finding the contract contractor after?

SPEAKER_01 27:30

70% getting the business. So selling opportunities and 30% effort going towards uh finding and bringing on those independent contractors.

SPEAKER_05 27:40

Gotcha. Thank you. That's a topic that comes up a lot on these calls. Is it's kind of that chicken or the egg. Am I selling the business first and then finding a great contractor, or am I putting some on the bench and then going out and selling the services that I found great contractors for? So it's interesting to hear all the different perspectives.

SPEAKER_01 28:05

Uh engaged in the recruiting process, everybody in our business uh is looking for independent contractors. We run contests for who can provide the most independent contractor leads. You know, if that's taking picture of, you know, a car that has uh a business on it, or you know, your local Sherwin Williams that has the board of uh contractors on it, you know, grabbing business cards at the core, your team always has to be funneling independent contractors back to be recruited.

SPEAKER_00 28:46

And John, can you also speak to how you um organize that on a weekly basis, how your office does? A lot of our citywide franchises organize it into a weekly meeting, making it a little bit easier to manage in that way. Can you speak to that?

SPEAKER_01 29:02

We're talking about like an operations meeting or like centered around the recruiting?

SPEAKER_00 29:07

Centered around the recruiting, the IC recruiting, and inviting them in to that weekly meeting.

SPEAKER_01 29:13

Oh, I gotcha. Yeah. So early on, I would recommend uh doing the one-on-ones with your independent contractors. Uh and the reason I say that is I think it gives you an opportunity to kind of practice just as much of a sales uh 30-second commercial sales process as it is in a new account. Um so early on, if you can, you know, uh you're talking to a new group, you invite them to come any schedule an appointment. Um, I think you want to work through the kinks so then when you do get to the small group, so having a once-a-week established time, let's say Thursday at three o'clock or three thirty, we're gonna have the independent contractors, the cleaning companies come in and you're gonna sit down and do a presentation with them. And so again, early on, work out uh what your process is on that. You know, sometimes we would do it through a PowerPoint, which you'll have access to PowerPoints on really the steps of getting set up with us. We actually like flip charts, and the reason is we just feel it feels less normal. Um, we take the tie off, we sit on the same side of the table. Um, we want them to feel really comfortable. We don't want them to feel like they're meeting with their attorney or their accountant, or you know, we want this to be a partnership and very informal. So we kind of get the flip chart out. We go through who we are, what we do, you know, how do you work with us, what expectations we have, um, you know, just those simple steps of getting set up with us. And you want to eliminate as many barriers as possible so that early on you can um get that opportunity to evaluate many crews. Um, because if you're just resting on a couple crews to do all your work, you're you're jeopardizing um really retention, quality of work. Um, you you want that number to be vast so that you really can pick the very best to kind of build your business around. Um, the trap is you'll find somebody really good early on and you load them up with too much business, and before you know it, um you know they fail you because you've