City Wide "Z" Calls
City Wide "Z" Calls
City Wide - Lehigh Valley - Adri Osman
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Hello. Hi, Robbie.
SPEAKER_04Hi, Savannah. Hi Lisa.
SPEAKER_03Hi, Shane, Hunter, Shree. Hello, guys. Welcome. Thanks for joining us today. Great to see you guys. Um, let me make sure everybody's getting in real quick. Hi, Hunter. Long time no see. Um, okay, Adri, I think that I kicked you off, so feel free to jump back in. Um, you guys, thanks for all being here today. I know a few of y'all are brand new to the call, so thank you for joining. And then a couple of y'all have been here. You guys know the drill. Um, what we want to do today is let Adri start by just giving his background, tell us about your situation, how you got here, what you were doing before citywide. And then um you guys can all jump in and ask your questions. We have some people that are uh 20% operating partners. We have some people looking at resales, we have some people looking at new territories. So we have a little bit of a little bit of everywhere across the board, and I'm sure we'll have lots of different questions regarding all of those different pieces. But all of that being said, over to you.
SPEAKER_05Okay, great. Uh hi everyone. There's a good turnout here. This is good. Uh good to see everyone. Uh, good to see so much interest in in Citywide. This is this is great. So um a little about me. So I'm the owner of uh the citywide uh franchise in the Lehigh Valley, Pennsylvania. And um before I bought the franchise, uh I was actually in the pharmaceutical industry for nearly 25 years. Um I got to the point where I was ready to retire from corporate America, um, but it I wasn't ready to retire for good. And so um I kicked around some ideas, and um, I think it was my brother who recommended that I hire a franchise consultant. Um, so I hired a franchise consultant and and we went through a few different franchises. One of them was citywide, and citywide to me just stood out uh above all the other ones. Um and so, you know, went through the process and um, you know, um, you know, ended up meeting uh Jeff and and coming down to Kansas City. And you know, he interviewed me and I interviewed him, and he accepted uh accepted me into the family. So it's it's been uh it's been great so far. Um I have owned my market for about a year and a half, a year and eight months. Man, gosh, it's flying. Um it's uh November 2024 is when I bought it. Um it was uh previously running since 2013. Um, and so the previous owner was um ready to retire. And so I bought it from him. We had a six-month kind of overlap where he transitioned everything over to me and then uh he rode off into the sunset. So um it's been great so far. Um I've made a lot of changes um because I want this to be, you know, this is what's great about it is it's my company, right? So I take what I inherited, um, understood the way that he ran business, and then just made improvements from there. Um, as part of my background coming from pharma, I was also a consultant for about 15 years. And so process improvement and and um performance excellence and operational excellence and those sorts of things are uh are right up my alley. Um and so it's it's great to be able to take uh you know the smaller model and do those sorts of things. So along with the citywide model and then tweaking uh tweaking it from a local level, um, we're seeing some great results. So so that's a little bit about uh me and where I am.
SPEAKER_03That's perfect. Thank you so much. Sure. Um, you guys know the drill. Feel free to come off of Mike and Rodney. You can kick a kick it off.
SPEAKER_04Thanks, Savannah. Hey Andre, great to meet you. Rodney Reisdorf. I'm up in Buffalo, so not too far away from you in the Lehigh Valley. Um what does your team look like today?
SPEAKER_05Um, so when I inherited the business, I had one sales executive, one facility solutions manager, which is basically an account manager, and a night manager. And we had almost three million in sales. Um, and so that wasn't enough. Um and so we um I ended up hiring another account manager because we have so many accounts that needed to be managed. Um, I'm actually short-handed right now. So I hired one, lost one, so I have an open position for one. But it's two account managers. Once I get them on and onboarded, I'm gonna bring another sales executive on, and then I have a night manager as well. So um, so five plus me. Got it. Thank you. Yeah, sure.
SPEAKER_03Adri, can you tell us about your salesperson's um compensation and commission structure? We were actually just talking at Hunter and I were just talking about that. So I think that might be helpful for him to hear you talk about how you how you pay that person.
SPEAKER_05Yeah, it's it's interesting because um I've actually been working with Jim Huser. So Jim Huser is my corporate coach, um, which is another great benefit that that Citywide provides. Um Jim actually ran the Kansas City operation uh for I think eight years. And so some of the stuff that I bring to him are such small potatoes, he just kind of looks at me, right? Because he's used to doing it on a larger scale, but he's full of wealth and knowledge and he's really been helpful. Um but um so I'm gonna change the commission plan. But currently our commission plan is um, so he his base salary is is 60,000. Um it probably should be in the 60 to 65 range. Um, I like to make it a little bit lower, not because I'm cheap, but because I want to incentivize people to sell and bring in money for the business. And so I have the commission plan set so that the more you bring in for the business, the more money that you make. And so for the first six months, um, to give them some momentum and to give them um uh a little bit of traction, the the commission plan is um, I forget exactly what the numbers are, but for the first, I want to say up to five thousand dollars, um I want to say it's thirty-five percent. And then from there, uh between five and eleven thousand dollars. I'm sorry, it's seventeen and a half percent from five from five to eleven thousand dollars, it's in the you know, thirty percent range, and then above that up to twenty thousand dollars, it it's uh 75 percent, it's 70 percent. And so those percentages that I'm giving you are one month of contractual revenue. So 17.5% of contractual revenue for one month, 35% for one month, or 70% for one month. Now anything over $20,000, I break it down. So for the first $20,000, it's 70%, and then anything above and beyond that is 30, 36.
SPEAKER_03And one time you're not paying them on monthly contract, you're paying them for that initial sale.
SPEAKER_05Yes, and then I brought and then I pay them over six months. So we calculate what that number is, and then we pay them over six months. And then for the FSM, it's 10% of the revenue of the OS that they bring in.
SPEAKER_03Okay, I'm gonna break that down for everybody that doesn't know our um acronyms quite yet.
SPEAKER_05So J so JS is the contractual revenue. So we're paying them a percentage of one month of recurring revenue, but you're getting that contractual revenue every month, uh, which is one of my criteria of buying a franchise. I didn't want anything having to do with food. I wanted it to be B2B instead of B2C. And I wanted a recurring revenue model so that coming from the consulting world, every time you your time is tied to your dollar, every time you sell something, whenever you're not working, you're not getting paid. Or you have a project and you finish the project, now you have to go fill the glass up again. It's completely empty. So this recurring revenue model is something that I was really interested in, where we can sell a contract, we set it up to be successful, and then we can back away from it and have operations run it, and then we sell the next and the next and the next, and then we can grow, we can stack on top instead of uh instead of uh sequential, sequentially, if you know what I mean. Um, so that's so the genitorial is the contractual, the OS is all of the other services that we provide. So we want to be the one-stop shop for all facility solutions uh in the commercial uh building industry, uh in the building maintenance industry. And so it's anything having to do with window cleaning, um, you know, uh plumbing or electrical floor care we do a lot of, whether it's a strip and wax of floors or carpet cleaning. Uh we'll restripe the lines on the parking lot. We do exterior building cleaning, um, you know, any anything having to do with the commercial building. Uh so those are the OS. Um, so that OS structure, going back to the commission, is 10% of the the revenue for that OS sale, um assuming that the margin is 32%. So if they sell something for a thousand bucks, and it'll as long as we're making 320 bucks on it, they get a hundred bucks of that. And I'm gonna change that, I'm gonna change that too, because I've realized that when you make it a 32% margin incentive, everyone says, well, all I gotta do is make it 32%, and I get my 10% commission. And so I've that's we've incentivized that. So now I'm gonna change it, and it's gonna be based on margin that you bring in. So it's gotta be at least 32% margin, but it can be higher than that. And then you make a commission based on that uh margin that you bring in. And so if you make 50% commission, if if you if you can make 50% margin, you make a commission on that margin, on that 50% margin. I haven't decided what that's gonna be yet, which was why I haven't implemented it. It's probably gonna be in the 20% range. So, I mean that's the beauty of this. We can we have the guidance that tells us you know how you should do it, and then you can take it and tweak it and make it in your own make it your own. So, did that answer your question?
SPEAKER_03Yes, thank you so much.
SPEAKER_05Sure.
SPEAKER_03Addie, do you want to go next?
SPEAKER_02Sure, thanks, Savannah. Um, good afternoon, everyone. I'm Adi. I'm from Toronto and uh looking into a new um uh potentially new franchise. So um a couple of questions that I have, Adri, uh, and I know you came um you know pretty uh long after the franchise started. So um do you have like sales metrics uh from the early days? Like, you know, what does the average win rate look like? How many um, you know, how many contracts was it was the was the BD getting every month versus what how many you were getting every month? Uh and and if you don't have it from the end, can you share what you have right now? And then just you know, what does velocity look like across the stages, um average size of contracts and and so on?
SPEAKER_05Yeah, no, those are those are great questions. One of the things that um that was that you're concerned about when you're buying a new business is how am I gonna get sales? Right? I'm gonna I'm gonna invest and I'm gonna have this company. How how do I know I'm gonna get sales? Um, I can tell you that um for the first 14 months, 12 to 14 months, I was working 10 hours a day, seven days a week. Now that's not to scare anybody, but there was so much business and so much opportunity coming in, I could not keep up with it. Um between uh what NBD provides, what people uh between that and and when people are finding you online and reaching out, either calling you or emailing you. Um I have a business uh development representative at corporate who also helps me. She sends me leads. So there's so much, there's so much work to be had. Now, just because you're getting the opportunities doesn't mean you're gonna sell it, right? You have to position it and sell it the right way. Um one of the challenges that I had when I bought my business is the previous owner didn't follow the model exactly the way it should have been followed. And I will say that was that was a big mistake. And so one of the things that that I made it a point to do was really understand the model because this is a proven model, and when you talk to these other owners, I mean, these other owners are making some of them 30, 40, 50 million in revenue. Right? This guy had the business since 2013, he wasn't even three million. And so what why? What's wrong? And I didn't really know until I got on in there, so he wasn't following the model. One of the things he was doing is he was charging too much. He he could he wasn't able to dial in the market rate for uh for the uh the services that he was selling, and so we've been able to do that now. So when you talk about the early days and what it looked like, his close rate was probably less than 20%.
SPEAKER_01And then the ones that sorry, I was just gonna jump in. Is that 20% of leads or 20% of proposals?
SPEAKER_05Um I would say 20% of proposals that he put out there. He was losing four out of five of them because he was charging too much. Um, he wasn't following the model. We have a really nice calculator that's been put together by corporate where you break down um, you know, the area, the square footage, what the production rate should be based on some factors, and it helps you calculate based on other inputs what your loaded rate should be, what your percent margin should be. And if you put those those inputs there, and then it spits out exactly what you should be charging the customer. He didn't even know what that document was. He was doing everything manually. So when I came in, I learned about that, I started using it, and and we've been wildly successful with it.
SPEAKER_03Um it's never too late to follow the model.
SPEAKER_05You gotta follow the model. You're gonna hear everybody say that over and over and over again. And even when I was going through it, I was like, Yeah, yeah, yeah, follow the model, follow the model, right? And then you get in there and you think, wow, what how are you running the business like this? Um, he was an older guy, he did he liked to do everything manually, he liked to do everything on paper, and he got to a point where he couldn't grow anymore. He just couldn't grow anymore because he wasn't following the model. If you want to scale this business, you have to follow the model. Um, and so it took a while for me to restructure the whole thing and have everybody adopt the model. Well, the re the way I got people to adopt the model is I had to get rid of people and bring my own people in because you know, old habits die hard, old cultures very difficult to change. Um, so coming from corporate America, I know that I gave folks an opportunity to do that, and in the end, it just didn't work. So I gotta bring you got to bring your own people in and you gotta coach and mentor them from the start to use the model, use the CRM, use the bid uh tools to mark this up. Make sure that you uh, you know, you document everything, use the proposal templates, you know, use everything that the that the franchise provides to you, the franchise or provides to you, and you'll you'll be successful. Um there was something else I was gonna say about that. You're not gonna win everything. Um you're not gonna win everything. I'm running into situations now where um you have some fly-by-night companies that'll come in and bid and they'll just underbid you. Um, and because some companies just they look at janitorial services as a commodity, unfortunately, right? They're just gonna go with the lowest price. And so I've lost bids that way, I've lost contracts that way. Hey, we've decided to go in another direction. Hey, would you mind telling me why why? Oh, yeah, I got somebody that's coming in, you know, 30% lower than you. And I say to them, okay, I'll talk to you in six months. Because there's no way they're gonna be able to provide the level of quality that we are at that price point. Just can't. Um, so I get calls, calls back. I don't mean to be rude about it, but listen, you're gonna be calling me back because they can't, there's no way they can service it for that. They just want to get your they just want to get your business. Um, so you hear things like that. So I'm working on trying to figure out how to combat that, you know, try to explain things to people, providing a narrative for my folks to help explain those things to people, but I mean it happens. Um, and when when I first uh bought the business and you kept hearing we're 90% retention, right? 90% retention, and you think, why is it 90%? That seems low. Why aren't we 99% retention? Why can't we retain our customers? That's one of the big reasons why. Because you have other people out there that go, well, I can do this, and then they come in really cheap, and then they realize, oh man, that I can't service it for this. Right? Or clients decide to go in-house um and do it themselves, you know. So there's other reasons. It's not only quality or account management related. We lose them for other other reasons that are beyond your control. And so that's why it's 90%. But I think we're getting better. I think we're up to 91 now or between 95.
SPEAKER_0395.
SPEAKER_0595, really?
SPEAKER_03Yes.
SPEAKER_05Oh, that's really good. Yeah, that's really good. That's amazing.
SPEAKER_03Yeah, it's it's incredible. And, you know, I think that um you bring up a point about calling me back six months later. Um, I think that, you know, what sometimes you really have to drill into the client's head is that we are that extension of your facilities management team. Is your other janitorial provider providing you with somebody that's going to regularly check in and make sure your toilet paper is stocked and you're happy and that we continue to get the right trash can in the right bathroom? Or are you gonna be calling me in six months because you don't have that extension of your facilities management team? Nobody's checking in on it. And and that's what you might be paying a little bit for, where you're not you're not choosing citywide based on price. Um, that's not why you're gonna work the client is gonna win or we are gonna win the contract with the client, but we're gonna win because of that one point of contact and that extension of a facilities management team.
SPEAKER_05Yeah. Well, and it and it was running seamless seamlessly, right? So they just assume that the next one they the next company that they hire is also gonna run seamlessly. And the reason why it's running seamlessly is because of those, those other aspects that you talk about, right? We have a facility solutions manager that goes in either every week or every other week to inspect. They walk around, they build relationships with the folks that are there. And I coach my guys, hey, listen, while you're in there, we're not just looking for that one guy that signed the contract with us. Talk to everybody that's there. Find out if they're happy, find out if they notice anything, find out if there's anything that we can do better, and then you can continue to provide that feedback to our crew so that they can continue to improve. Um, and then the same with the night manager. Our night manager goes in while the crew is there to make sure that they're following the scope of work, they're doing what they're supposed to be doing, you know, they're not crapping around because sometimes that happens. Um, and so by having those two managers help manage that account on a regular basis, then all the noise and the operational complaints, 98% of them go away.
SPEAKER_03And your account manager, keep in mind for anybody that is not aware of this part of the process, um, the reason Adri was mentioning having commissions for that account manager as well is because your account manager is also selling. So while your salespeople, of course, maybe started with the janitorial sales, your account manager is managing that account monthly and selling additional services to that person to act as that one point of contact.
SPEAKER_05Right. So our sales executive just focuses on selling janitorial and they're only a hunter. So um their role is to go in, develop the relationship, tell them all about citywide and all of the things that we can do for them, not only janitorial, but all of the other services that we provide, understand why they're looking to change providers, and nine times out of ten, it's because of quality. And then it's their job then to find out okay, well, what about the quality? What are they missing? What is the issue? And then I created this um, I call it a new account insights sheet. I think we have something similar, but this is my own sheet. And I want them to go around and capture all of the nuances of the account, anything that they say, when they point out areas that that aren't being addressed, maybe they they show up when they want to show up or they they miss services. Document all of that. Um, because once once we have all of that, once they um issue the proposal, the proposal's agreed and signed, then we have a handoff. We call it a SOHO. So it's a sales operations handoff. So now we bring our account manager in, our facility solutions manager, and sales hands off to operations. All of that information is needs to be handed off so that it's a smooth transition. And then we bring the IC in, our independent contractor, in through the account. They're gonna have a scope of work and they're gonna have that new account insights sheet. So that way when they walk around, we can say, Hey, see that room back there? It's right here on this new account insights sheet. They keep missing the current crew, keeps missing that room. I want you to go in day one and do a Deep cleaning that room, number one. And you can't miss that room anymore. It's kind of hidden. They always miss it. And then the other crew, they they do this wrong. They miss this. They don't do that. They don't. It's all here on the account inside seat. These are all the things that you have to focus on. I'll put that and the scope of work in the janitorial closet so that it's always visible for them. Um, and then once we have the handoff, our sales executive goes back to hunting. They never talk to that client again. Now the client is managed, that relationship is managed by the facility solutions manager. And so that's how it works.
SPEAKER_03Perfect. Shri, you want to go next?
SPEAKER_08Yeah, sure. Hi, Auntie. Um, this is Sri. Hi Sri Sri I'm I'm from Texas, looking at uh secondary markets in Texas. Um yeah, a couple of questions. So good good that you uh also bought. Similarly, I'm looking at kind of buying existing one. Uh so you told when you acquired or started this, you already had one sales executive, one FSM, one night manager. So was that something that was part of the package, or you hired them?
SPEAKER_05No, they came, they came with the company. Um the the sales executive and the account manager that came with the company uh have since left. Um, but they came with the sale. Um I I came from a different industry, so I didn't know anything about the industry. I didn't know anything about the company, I didn't know anything about the processes. Um, so I kept I kept them on so that I could understand what was going on. And then once I realized what was going on, um, you know, we we try to bring them along and and try to adopt the changes and and the improvements and things that I want to make. Um ultimately it wasn't working out, and then then and then you have to replace them. Um the the account manager that I have. What was not working? I mentioned it earlier. It's it's um, you know, when when people have when people have developed bad habits uh in an in a role for several years, it's really difficult to get them out of that habit. Um, I would say the worst habit was not using the CRM. And so because the because of legacy ownership, he was understaffed. Um, you know, we had almost 80 accounts and one FSM. It doesn't work. Um, he was only going around to visit less than half of the accounts, so the other half of the accounts were basically managed by the ICs. It doesn't work. We need we need to be in those accounts, managing those accounts on a regular basis. And um, and so what the previous owner told my account manager was, or my facility solutions manager, don't bother putting anything in the CRM because you don't have time. You're only one person and you have to go around and make sure all the clients are happy. And really, what he was doing was going around and reacting to all the complaints that we were having, frankly. And that's all he had time to do. From the morning time he woke up in the morning, he would just travel around and and and address all the complaints that we are having. And he never put anything in the CRM. And so I said, listen, uh, first of all, we're gonna get rid of all these complaints by addressing all of the root causes. I won't get into all of that, but um our operations are stable now. We've very, very few complaints, and the complaints we do have are very high on.
SPEAKER_08So you also you also had ICs in place uh when you took it over and when you took this over?
SPEAKER_05Yes. We had ICs in place when we took it over, and those and we have we may have a third of those ICs left. I've replaced them as well. I've replaced them as well. Because part of the reason why we are having all these complaints um is because the ICs um they weren't they weren't properly vetted and onboarded, and so there were issues. So um again, you you gotta come in and you gotta identify where the root cause of the issues are and you have to fix it. And um, and for me, if it doesn't happen fast enough, I have to replace you.
SPEAKER_08And so that's so now you have hired two two ACs now as of date, uh, after you left.
SPEAKER_05I have uh uh uh a sales executive, uh, and I will be hiring another one as soon as I backfill my one uh facility solutions manager that just resigned.
SPEAKER_08Okay, how how did the hiring process go? I don't know, is it six months ago? Was it recent? The news SC that you hired?
SPEAKER_05Um, so I had so the the SE that I had um that came along with the business, I kept for about a little less than a year. Uh I had hired another sales executive, and there was an overlap of about three months. Uh actually, July, I think this month is gonna be his one-year anniversary. So I bought the business November 2024, hired him in July 2025, I let my original SE go in September 2025. So there was a little bit of an overlap there. Um and so, and it honestly takes time to build your pipeline. So I brought my new sales executive in. He had a couple of quick wins at the beginning, and then he kind of went through a lag. And so I had to make a decision am I gonna stick with him or am I gonna replace him? Um, and the more that we talked about it, it was, you know, he's doing the right things, he's making the contacts, he's doing door pulls, he's not afraid to afraid to pick up the phone. He had a pipeline, it was just things weren't coming through.
SPEAKER_08And so So the Hunter, the the Hunter is sorry, uh the Hunter is he was the one who was also building the pipeline, or you had a separate uh VA or somebody helping you with the pipeline.
SPEAKER_05Yeah, so he builds his own pipeline. I have a business development specialist at corporate, Holly Anderson, who's a rock star, and she helps find leads for us. Uh, and then I sell as well. Um, and then the facility solutions manager focuses on um just OS. I'll I sell OSNJS.
SPEAKER_08Okay.
SPEAKER_05But my sales executive focuses on JS, and then the the facility solutions manager managers uh focus on OS.
unknownOkay.
SPEAKER_05There's some ex there's some exceptions there, Shri. Like, you know, sometimes my sales executive will go do a door pull, um, and then they'll have a request for OS. If it's a small OS project where we've already created a template where they can just take it quickly and turn it around for the client, I'll have them do it. Um because you want to strike while the iron's hot. So if he takes that opportunity, sends it over to the facility solutions manager. Now the facility solutions manager who doesn't know this contact, has never met them in person, reaches out. Now they don't return their call, and now a couple days go by, a week goes by, it just falls through the cracks, and then and then we lose it. Now they're on to something else, the client's on to something else, and so we try to strike while the iron's hot. Um, the our turnaround time for proposals when I first got here was almost two weeks. Uh, and my goal is 48 hours. My goal's 48 hours. 24 to 40 hours for OS, if not same day. And for JS, it JS can be more complicated because there's a lot of information you need to get. You have to do building surveys, you know, that's a little bit different. But for OS, 24 to 48 hours.
SPEAKER_08So now that you've been running this for 14-15 months now, yeah, where is your where is your JS versus OS split?
SPEAKER_05Uh where is, I'm sorry.
SPEAKER_08JS versus OS split in terms of percentage revenues.
SPEAKER_05That is a great question. Our our split is nowhere where it needs to be. Um so I had mentioned that we had we had issues in operations when I first bought the business, and because of that, we had to replace a lot of the ICs. Um and so I mentioned that my FSM was running around fielding complaints. That was his main job. Who's complaining now? I'll go talk to him. Who's complaining now? I'll go talk to him. Well, it's difficult to sell OS in your existing customers when they're all complaining about your JS. Right? Absolutely. So the number one priority for me was to stabilize operations, find out what's going on, identify the root cause, fix the root cause. A lot of the root cause was ICs were not properly vetted. It was, oh, hey, you do commercial cleaning? Great, I have a building for you. Here's the address. Good luck. That was it. That's how it was done. Doesn't work that way. So now, any IC that wants to work with citywide, you know, they're like, hey, I want a building. Okay, great. Come in and meet me. Here's all the criteria. You need an existing business, you need current customers of your own, you need certificates of insurance, fill out the W9. Here's a contract, I'll answer all your questions. You need to meet me and you need to meet my team. We don't just hand anybody a building and say, here, go clean it. It's not the way it works. But that's the way it used to work. And it just the whole it's not sustainable that way. So you need to if you follow the if you follow the model, it works. Um, it might feel like it's extra steps, it might feel like it's it's a lot of work, but you put the work in up front and then it pays dividends on the back end.
SPEAKER_08Nice, nice. Hey, one last question. Sorry, I know I'm keeping others wait. Um, so when you uh entered the system and whatever was the um equity and the working capitals that you were uh planned to bring in, was that enough for you to run bay till now, or was it not sufficient?
SPEAKER_05Yeah, no, that's a that's another great.
SPEAKER_08Was there something missing?
SPEAKER_05So I used um I used a program called Rob's, which is rollover uh for business startup. Um and you can take an existing uh personal IRA and then use that to invest in buying the business. And so I used one of my IRAs that I had to um to pay the franchise or for the business, and then also to pay the previous owner for the business, and I made sure that I had working capital to start with because you need to you're because the because of the cash flows, it's the way that Citywide sets it up is we send proposal, we send invoices out at the beginning of the month before the service, which is great, it helps with cash flows, but not everybody's gonna pay right away. I have some customers that pay within the first week that they get the invoice. I have some customers that I have an outstanding invoice rate from May last year, right? So it's just you never know what you're gonna get. Um, so you need to have that working capital buffer because we pay our contractors on the 10th of every month following the service month. Um okay. So when I when I first got here, you know, some of the ICs, they weren't getting paid um uh on time every month, and there was some, you know, um, there were some issues there, right? So I said to them, listen, you know, as I bring ICs on, you're gonna get paid by the 10th of the month every month without question. Before I get paid, you're gonna get paid. You know, all you need to do, you don't have to sell it, you don't have to market it, you don't have to manage the account, you don't even have to field complaints. If there's any complaints, you let the facility solutions manager know we take care of it. All you need to do is show up, provide your subject matter of expertise, and go home. And we take care of everything else, and I pay you on the tenth. And for that, I need you to provide your A game every time. And that's what I ask of the ICs.
SPEAKER_03And I'll add to that because I do think that's why the cash flow model is strong when you, of course, get your clients to pay you on time, because in theory, you are getting paid twice before you pay your contractor once. So for your May services, you have billed your client May 1st, and you have billed them then June 1st for those recurring contract services. They should have paid you by May 10th if your contract is, of course, you know, net 10, and then they should have paid you by June 10th, and then you're not paying your contractor until the following month of that May service date. So you would have been paid, call it May, May 10th and June 10th to pay that contractor as well on June 10th. Shane, go ahead.
SPEAKER_07Hi, Audrey. Um, I'm in uh South Florida. Um what is from you know putting your consultant hat on seeing a salesperson that you had to inherit? And I assume while you took that over, this was a huge learning curve for you, right? So simultaneously you're you know taking on somebody that you already know this is somewhat of a delicate situation because you're a new face, your new owner. You're trying to learn as well. Now you got a new guy, you're he's he's basically about to round a year. What do you think is the number one thing that slows down a sales executive?
SPEAKER_05The number one thing that slows down a sales executive. Um sales executives are cut from a special sloth uh cloth. Uh I said sloth. Um, they're cut from a special cloth. Um, the hunter role is a unique role because you're developing in a relationship and then you're passing it off to someone else and you're not talking to them again. Where, you know, I I when I interview sales executives and I explain when I interview with the role and I explain what it is, and they say, Oh, well, you know, I've sold before, and then once I sell, I continue to, you know, work that relationship and manage that relationship. I said, That's not how it works here. We need you to hunt. Get your get your weapon and hunt and kill, and when it's killed, you move on and you kill the next one, and you don't and you don't dwell on it. So that's kind of the way we describe it. Um, so number one, they gotta be they gotta be okay with that. Um and we talk about touches. Um you need to you need to have a lot of touches. So it's phone calls, emails, and door pulls or or field visits. Um, and we talk about the the goal for that is about a thousand a month of total touches. And that doesn't include one email that's got 500 names in it, right? But it's it's it's that constantly touching and reaching out. Um, and then our CRM is really great because as long as you're putting everything in the CRM, excuse me, um, you know, you'll you'll reach out to somebody and then they'll say, Oh, you know, not right now. Um, you know, we're good. And then you say, Well, can I reach out in six months and see if see if everything's still going okay? And then they go, Yeah, that's fine. And you put it right in CRM. And then six months later, boom, you get a pop-up and it says, Hey, remember that guy you called six months ago? Check in with him. That's why it's so important to put everything in CRM and so important to follow the model. And then you follow up with him again. And just um, you know, Holly has been was with the previous owner for for years before I bought the company. And so now Holly will give me a lead and I'll go out and they rave about Holly. Oh my gosh, Holly's been calling me every six months for the last three years, and uh, she's always so polite and always so cheery, and she doesn't, you know, she doesn't get offended when they say no or they're not interested. She just keeps following up and eventually they go, Oh, you know what? That woman, Holly. And they go and they look in their email and they find it and they call citywide. And so it's just all about touching, touching, touching. And um, you know, so for you gotta be disciplined, you gotta, you gotta have your touches, you can't get discouraged, put everything in CRM, follow up with the leads, um, and and build your pipeline. And there's gonna be it ebbs and flows. Sometimes we get all of these requests all at once, and it's completely overwhelming. And sometimes it's crickets. Um, and then there's other times, you know, the certain times of the year is there's there's highs more or higher than others. Um, you know, around Christmas time, it's really dead. Around the beginning of the year, it's really active because a lot of people now they have fresh um budgets that they want to spend and they want to make changes, and there's new leaderships that are starting, and they want to make changes. And so the beginning of the year is crazy. Uh, right around now, floor care in schools is big because the students are leaving, and now these schools were to do all of these internal projects in their buildings. So floor care and window cleaning and painting and all that other stuff. So uh just knowing when those when those things are happening is um is really helpful. Um does that answer your question?
SPEAKER_07I kind of went off on a tangent here. I a little bit. I'm trying to I think about from like a salesperson's perspective. Like, are they are they getting bogged down in the the the database of like, well, you know, to Shrew's point, like who you know, is it's Holly and your sales rep, are they ever stepping on each other's toes? Right?
SPEAKER_05Like, are they ever yeah Yeah, that well, that's a good question. So they work very closely together. So we have a sales and ops meeting every week uh where everybody's on the call. And Holly and uh and my sales executive, they work very closely together to make sure that they're not stepping on each other's toes. But then also, if you're putting everything into CRM before Holly makes a call, she could say, Oh, he already reached out to this person, right? So um, so that's another reason why it's important to put it into CRM. Because then they're like, Well, why you know somebody just called me from citywide? Why are you calling me, right?
SPEAKER_07So it's gotta go into CRM. Yeah. I imagine the first six months feels like a drinking from a fire hose, right? Um, yeah, three of them.
SPEAKER_05Yeah, because again, it was a new industry for me, it was new people. Um the guy wasn't following the model, everything was manual, you know. He, you know, he he's printing out pages and handing them to me. And I'm like, why are you handing me all these pages? Just email me. Like, what are we doing? So, yeah, no, so it was it was definitely a a a big uh uh big overwhelming thing, but you know, you I knew what I wanted to do. I had a vision, you know, I know how to run a company. Um and so you just gotta believe in yourself and and power through. Um, you know, I have a lot of sayings, get stop saying, I don't want to hear why there's obstacles in your way. I want to hear how you took those obstacles and moved them out of your way. You know, it's like, oh, I can't do it because of this, that, and the other thing. All right, well, how are we gonna get rid of it? Let's talk about it.
SPEAKER_07Right.
SPEAKER_05Let's let's let's talk about how we get rid of this stuff.
SPEAKER_07I don't know if you know this. Um could be a question for you, Savannah. But what does a healthy business look like in terms of revenue of JS versus OS? Is there a is there a goal there? Like 50-50, 75-20. I mean, what is the is there any guidance on what what you all think is best? Savannah, you want to answer that?
SPEAKER_03Do you want do you want me to go? I I was gonna say, you know, ultimately janitorial sales, when you get to a point of maturity, we are expecting you to be 50 cents on the dollar of janitorial sales. Um, so for every dollar that you sell of JS, you're selling 50 cents of other services. Now, sometimes once you get past that level, we're seeing a dollar for dollar. Um, but I would say that the 50 cents on the dollar is more in alignment. Um, Adri, would you agree?
SPEAKER_05Yeah, that's that's the goal. And uh, and like I said, we're nowhere near that because we had to stabilize operations first. Now we're starting to upsell into our account. So that's our goal to get there.
SPEAKER_03Um And I just think that means you have a lot of potential too. You have a lot of a lot of potential for creating.
SPEAKER_05We have a huge amount of potential. And and I would argue that we have more uh industrial parks in the Lehigh Valley than anywhere else. So we have a ton of potential where we are.
SPEAKER_07Um what's what's typically lagging, the JS side or the OS side?
SPEAKER_03When you say lagging, what do you mean? Like what's harder to sell?
SPEAKER_07Or yeah, is it is it people are selling a lot of JS and they're struggling to get the OS up to that 50 cents on the dollar, or are they easily selling more OS and struggling to get their JS up to that dollar?
SPEAKER_03So I would say, I mean, we're leading with JS because for a number of different reasons, but one because of the contract revenue associated with it, but also because, you know, when you think about janitorial providers in general, it's oftentimes the first one that people are willing to, and Adri, please correct me if I'm wrong or if you want to say something different at all, but um, it's oftentimes the first one people will turn over. You know, um, they're they might be unhappy with their current provider and it might be an easier sell, whatever that might mean, but it's the contract revenue, really. And then, you know, once people get an understanding for our business model and if we're selling it correctly in the sense of we are that one stop shop, we are that one point of contact, then you should be doing three to four services within another year or two and adding on those additional services. When they start calling you because they have a rough leak or a parking lot repair, you know that you have done your job correctly as proving to them or showing them that you are that one point of contact. I wouldn't necessarily say one lags for a purposeful reason. I would just say we lead with janitorial because of that contract revenue. Now, some people do it differently. Some markets will go in and we will lead with one of two questions either what service is going out to bid next or what service is causing you the most pain or frustration. And that will be your way to get your foot in the door in general, because you know, when we use Be a janitorial company 60 years ago, we only had what one revenue stream to sell. And now we have that potential or that opportunity to get in with 25 different revenue streams. So lead where you can get it. Michael, I saw you jumped in. So go ahead if you want to.
SPEAKER_06Yeah, for those of you that I haven't met, I'm Michael Carp. I'm uh current president of the franchise or here in Kansas City. So what I would say is Savannah's right, uh, Adrian's right. Um janitorial has always been the goose that laid the golden egg for citywide, but that's because we think of recurring revenue in two very interesting buckets janitorial and everything else. And the truth is we have a lot more services that are recurring in nature, landscaping. Well, it's going to recur every single week in theory. It's not as sticky, maybe, as janitorial, but it's recurring. You could do window washing quarterly on a building. It's a contractual terms, it's recurring revenue. But right now, the way we think about it, the way our accounting system works truly is we have mostly janitorial. There are some other contracts and services that go into that. We are working on that here to kind of change the mindset of everybody, which is we do want to start where the customer wants us to start. When an SE goes in and we're working on comp plans that we have right now, where we're testing it in the ones that we own ourselves, in we call it the Total Solutions comp plan, where our salespeople go in and sell everything they can sell. They then turn it over to the FSM, who they then partner together, not compete with each other, not stay out of my account because I want to sell that. The FSM gets put on a book of business, and the book of business is what the FSM cares about. So if the SE adds something to their book that they have to manage, they win. The SE wins. There's no downside to the FSM calling in the SE on something that's going out to bid next, that's big, that we need a really good sales professional in because they're going to get paid either way. And the SE is just an added value to them. So we're working through that transition. But the truth is, janitorial has been the goose that laid the golden egg. It's recurring, it's sticky, it stays around for a while, and it opened up opportunities to sell other things. But it's it's not the belief going forward that that's the only thing we should. We want to walk into a customer and ask the two questions, like Savannah said, that is eventually after we rapport build and do all the great Sandler sales technique techniques, is we want to get to the question that says, Hey, most of my customers, I talk to them about two things either somebody who's causing them pain right now in their portfolio of services, or the next thing that's going out to bid. And I'd love to understand what that stuff is because, oh, by the way, you know, I've dropped off this little sheet for you a hundred times on your desk. We sell all these 20 services. I'm your management company. I'm not the janitor. We manage those services on your behalf. We're not the person cutting your lawn, cleaning. We want to help you manage those things. We want to save you time and solve problems.
SPEAKER_03Look at Michael pulling out props.
SPEAKER_06When you get that pitch down right, there is, I don't understand anybody who would not welcome you in the office and say, wait a minute, you can do all these 20 services. You can give me one invoice, you got somebody that shows up at night while I'm tucked into bed sleeping, worrying about it getting right. I come in, everything's perfect. You got somebody who shows up here once every two weeks and looks around and tells me what's broken. Like, where do I and you do it at my budget? Where do I sign up for this? Like, that's the message we want.
SPEAKER_05Sorry, you wound me up. No, you don't need I'm gonna go. I'll see you guys later. Um we do.
SPEAKER_03Thanks, Michael. He brought props, he brought yeah, I love it. Thank you very much. Um, Kurt, I think I accidentally lowered your hand by accident. I want to make sure I acknowledge if you had a question, if you wanted to jump in.
SPEAKER_00Yeah, I just wanted to jump in really quick on uh you were talking about your struggle with your IC roster when you purchased the business. Uh, and I know that you know that's where quality kind of starts. So when you started, you know, doing the quality process to get a good IC uh to start rebuilding that roster, uh whenever you uh assigned or reassigned a new IC to an account, whether it's a re whether it's a new start or whether it's a replacement, how long did you did you have something in mind about how long you wanted to have that IC on that account or a new account before you started giving them additional business?
SPEAKER_05Um your question is, did did I know how long I wanted to leave them on the account or no?
SPEAKER_00The question is how how long did you feel like you needed to judge an IC's performance over time before you started adding, you know, new new business to them or or perhaps you know having a a new IC that's kind of proven themselves in the first two, three weeks of an account to replace them over here where this IC has been, you know, we're getting uh low ratings over here. We we definitely need to change out the crew. How long did you did did you have something in mind uh uh like from a from an onboarding standpoint of how long you would you would vet them in in action?
SPEAKER_05Yeah, so um, so that's a good question. So when I uh uh again, when I first started, um I I wasn't familiar uh with the industry, um, and I inherit a lot of a lot of the legacy processes that just weren't working. And so we would have a complaint in an account, and and then I would say, well, wait, we're we're having complaints, what's going on? And then we would I would go and we'd investigate the complaints and I'd say, All right, we got to get this IC out and we got to put another IC in. Well, I don't know who the pool of ICs are, so I would go to my facility solutions manager and say, okay, who who do you feel is the right fit for this account? And he'd say, All right, well, Stacy's a better fit. Okay, let's work to move this IC out and move Stacy in. Meanwhile, Stacy's got problems of her own as well, right? And so we did this revolving door in all these different accounts while I kind of figured out what was going on. And then I started realizing, all right, well, listen, there's problems in all of Stacy's accounts. Stacy's got to go, but we can't just kick Stacy out. We need to figure out how to backfill her. So meanwhile, we're recruiting new ICs and having to onboard them and then starting to put them into these existing accounts that we have. Um it's painful, it's time consuming, um, it's difficult for the customer. You know, it's putting my tail between my legs and going into the customer and saying, just give me give me a week or two and I'll fix this for you. And by the way, we had 80 of 80 customers, right? So, and it was it was very, very difficult at the beginning. Very difficult. Um, and so you can you can't do everything at once. You got to do one by one. And so we would slowly um you know, onboard new ICs, bring them in, bring them into new accounts. I like to bring new ICs in and put them in a smaller account to kind of test them out if I can. Sometimes it's inevitable. You got to put them in a bigger account. But we provide, we'll then we'll provide as much guidance as we can. Make sure they know the scope of work, walk them through it, uh, and and go through every little thing. I mean, we do that with everyone. Make sure the night manager is there for the first week that they're there to make sure that they're following the scope, they know everything that's going on. Every everybody that's on their team, if it's a bigger account, knows what's going on. So, um, I mean, every situation is different. Um, some ICs are owner operators, so they're smaller. And so, you know, we'll say, okay, we're gonna put you in this account. Well, it's gonna be them doing the work. And then some also ICs have a team of people, and some folks on their team are good, some folks on their team are not. And so I've figured that out now in the last, you know, since I've had the business for a year and a half. All right, listen, I'm gonna give you this account, but that guy Joe, I don't want him in a citywide account. He's terrible. He messed up one of my other accounts, right? So all of this stuff takes time to really understand operations and the operational rhythm and who's good and who's not. And you know, you you try people out if they don't work, you would you adjust and and you move on. Um, I really don't know if an IC is going to be great or not until I get him in there. Um, some ICs are more expensive than others. My I have this one IC, he's great, he's expensive, but we have zero quality issues. The customer loves him. I wish I could put him in all my accounts, but he's just so expensive. So, you know, so you take the good with the bad. So um I just threw a lot at uh at you, but um but but yeah, so we you know we've had to go through a lot, and um you know, our onboarding now with our ICs is really robust. Um we bring them in, we sit them around the table, we explain everything to them. Um you know, there's a fee that we charge um, you know, to do business with them, uh for them to do business with us, which I think is important to charge because um we want to make sure people have skin in the game too. That was another thing that I ran into when I first bought the business. You know, we'd have ICs that didn't show up. How do you not show up? This is your job. They just didn't show up, and there was no performance deposit in place, so there was no accountability. They felt no pain by messing up a citywide account, so now you have to pay. And then if you mess up our account, if we if we have to replace you because of quality or we lose the account, god forbid, because of quality, you're not getting your security deposit back. It's like renting an apartment.
SPEAKER_03Following the model, I didn't even have to tell them to say that.
SPEAKER_06They yeah, and by the way, to that point, is you know, when that guy, your IC doesn't show up that night for work to do some work, and you got to call somebody at 11 o'clock at night and say, Hey, I need a favor, buddy. Can you get out there tonight? And by the way, I'm gonna overpay you on this one to get it done. It comes out of that other guy's security deposit. So when you know how to explain this to the ICs, they get it. And by the way, it's not foreign in the industry. If you're Janet King or Janna Pro, you're paying way more for every account they give you. So it's a completely different model that at some point we can get into also. Yeah.
SPEAKER_03I want to try and get both of y'all's questions, um, Addy and Rodney. So Addie, you go first and then Rodney will get you next.
SPEAKER_02Thanks. Um, I read, do you have any idea of what's the you know, sales executives uh run rate and uh and and you know typical contract size as well as uh tenure?
SPEAKER_05I don't know. I mean, I can't speak for across citywide what what their tenure is. I mean, Michael might have some of that information. Um and then account and then account size varies. Um, you know, I uh we're to the point where um I was I was open to any account when I first got here, and now I'm not. Um, you know, the smaller accounts we'll we'll have requests that end up being smaller accounts. Um and for those smaller accounts that I don't want to take, and you can draw the line wherever you want. Some some it's $500 a month, some it's $750, I'm about a thousand dollars a month. If it's less than that, uh I don't know that I would I would take it. And it's all situational. And the reason is because the smaller accounts, um especially, let me back up. So if it's less than a thousand dollars because it's uh a company that's operating five days a week, but they only want us to clean one day a week, it's probably gonna pass on it. And the reason is because there's gonna be quality complaints. We can't keep a place clean one day a week when you're there five days a week, right? Especially like bathrooms and things like that. You try to coach them through it. Um but uh you know, so so you so there's there's some of that, but you kind of gotta dial in your own territory and figure out what's what's the best fit. Now that said, I have some that are $500 a month and and they're fine and they're working great. Um so it all depends on the account.
SPEAKER_03Um yeah, system-wide, I think we're about $2,500 a month for your average janitorial sales.
SPEAKER_06Is that the average? Yeah, uh, we've got accounts that bill you know six hundred thousand dollars a month, also, like you know, Jacksonville, Jaguar Stadium, and other things like that. So they range all over the board on account size. And to Andrew's point, most people are running once they're mature. Everybody in the early days grabs what you can. We got to get revenue flowing, we got to get some ICs in here. We you know, if you're a duck and you quack, we're taking you. Like, let's go. But the vast majority of them are 1,500 is their minimum, some are up as high as $2,000 a month for their minimum. Um, average tenure for a sales rep, it depends. We put them into three categories. So there's offices like Tampa, which are sales machines and have 15 salespeople and multiple levels of management, and their tenure's gonna be a lot longer because they're great at teaching, training, and mentoring people. And then we've got brand new franchises who have one person who have never been a sales leader in their life, and it's gonna take them a while. They're gonna churn some of their salespeople. But typically we see we're getting about three years out of a good salesperson in a good market before we uh either have to promote them, find something else for them to do, or they're gonna move on to something bigger and better, which in any sales organization is great if you can get three years out of somebody.
SPEAKER_03All right, Rodney, bring us home.
SPEAKER_04All right, I'll end on a bigger picture question. Uh, Adri, coming into this industry, new to you, other than just jumping in and doing it, was there anything else that you use to familiarize yourself with it to get up to speed as quickly as possible?
SPEAKER_05Um, learn the model as much as I could. Um, I mentioned it before. Yeah, you got to learn.
SPEAKER_04I've heard that a couple times.
SPEAKER_05Yeah, it's it's really key. Um, and I made the mistake when I first got here of listening to the previous owner because I'm trying to understand his business. And so I wasn't only just listening to his processes, but I was also listening to the way that he was selling and the way that he was, you know, uh putting proposals and things together. And I quickly realized that he's not using the model properly. And so I had to pick and choose what advice I would listen to. Um uh the other thing too is um Citywide is great at building relationships with supply vendors and and other folks uh in the industry, um, and leveraging those is key too. So being able to, you know, some of the small, some of the ICs are small. I mean, a lot of most of the ICs are small, right? So they can't get preferred pricing on like backpack vacuums and equipment supplies and things like that. So we try to help them out as best as we can. Um uh that said, a lot of my ICs, they were using, you know, push vacuums and things like that, right? Not using using residential equipment for commercial uh accounts. That's not gonna work either, right? Because now they're they're spending way too much time um, you know, when they could be using commercial equipment and getting through quicker, quicker and then growing their business. And so it's kind of a short-sided thing. So there's a lot of little things that I learned uh early on that I wish I had it focused on early on, um, you know, earlier when I first uh bought the business. But uh, you know, every day you learn something new and and um and uh you know scaling is is uh is certainly possible. And you know, I didn't realize we had uh a stadium uh 600,000 a month. That's awesome. We don't have anything that's 600,000 a month. That would be time.
SPEAKER_03You've got time. You know, I think it's really it's really incredible. You were only on the other side of these calls nearly a year and a half ago. So for you to be doing this now, um, super, super exciting. We're excited to watch you grow and really appreciate you doing this for the first time.
SPEAKER_05Yeah, thanks for thanks for having me. I appreciate it. Um if anybody has any questions, you know, you know, let me know. If anybody sends a note to you, Savannah, and they have any questions, I'd be more than happy to help you.
SPEAKER_03I absolutely will. I'll c I'll connect, um, I'll connect you guys and then you guys, all of y'all that came, thank you so much for asking questions. It really makes the really makes the call go by. I hope you got a lot of information from it. And um, we'll talk to you next week. Have a great rest of your day.
unknownThank you.
SPEAKER_05Best of luck, everyone. Thank you.
SPEAKER_03Thanks, Sandry.