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The Small Business Safari
Have you ever sat there and wondered "What am I doing here stuck in the concrete zoo of the corporate world?" Are you itching to get out? Chris Lalomia and his co-host Alan Wyatt traverse the jungle of entrepreneurship. Together they share their stories and help you explore the wild world of SCALING your business. With many years of owning their own small businesses, they love to give insight to the aspiring entrepreneur. So, are you ready to make the jump?
The Small Business Safari
Scaling Your Business: Real Stories, AI Innovations, and Membership Mastery
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Ever wondered if you could scale your small business without the fairytale of overnight success? Get ready for a light-hearted yet informative journey through the handyman business world where we break down the real challenges and triumphs of growing a business. With our special guest Uzair, affectionately known as Uzi, we share humorous anecdotes, tackle the myth of instant success, and emphasize the importance of gradual growth and reinvestment. Listen in as we offer insights into stepping away from the daily grind and finding inspiration in thoughtful conversations.
Explore the transformative power of AI in our lively discussion on ChatGPT Plus and NotetakerAI. Discover how these advanced technologies are changing the way we communicate and learn, from engaging voice interactions that mimic human conversations to creative educational applications that turn mundane class notes into podcast-like dialogues. We delve into the playful side of AI, imagining personalities that can discuss everything from history to logic, making them the ultimate brainy companions.
Unlock the secrets to stabilizing your service-based business with effective membership programs. Drawing from personal experience, we discuss the benefits of crafting a membership model that suits your specific market—one that offers ongoing value and builds customer loyalty. With an emphasis on creative pricing strategies and retention techniques, we talk about transforming one-time customers into dedicated members. With a sprinkle of humor and practical advice, we wrap up our episode by encouraging continuous personal growth and improvement.
Thanks to our sponsor Smart Hire Solutions LLC!
Navigating the Small Business Safari
Speaker 1especially in the handyman business. I don't know. You know I got two tubes of cock. You know two tubes of cock right now, uh, would run you 14 dollars your cock has an l in it huh go ahead no, not the cock.
Speaker 1I talk about what? Uh, hey, if you don't use your finger to smooth it out, uh, at the end it ain't right. I've, I've already, hey, I've trained all my handymen. We have potty talk once a year, and then we have cock talk, and we talk cocks and I'm like, look, they all come in different sizes, different size tubes. Size doesn't matter, okay, they're all different colors. There's black, there's white, there's sanded. Oh my God. But you know, what you got to do is you got to always make sure you crack the tip. And then, when you crack the tip, you got to make sure it's oozing out the right way, because you got to have constant flow.
Speaker 1Welcome to the Small Business Safari, where I help guide you to avoid those traps, pitfalls and dangers that lurk when navigating the wild world of small business ownership. I'll share those gold nuggets of information and invite guests to help accelerate your ascent to that mountaintop of success, of information. And invite guests to help accelerate your ascent to that mountaintop of success. It's a jungle out there and I want to help you traverse through the levels of owning your own business that can get you bogged down and distract you from hitting your own personal and professional goals. So strap in Adventure Team and let's take a ride through the safari and get you to the mountaintop.
Speaker 1Alan, it's always a good day when I get to sit with you, For those everybody out there listening getting to hang around a little bit. Somebody asked me hey man, does this podcast really? Is it making money for you? I'm like, well, I don't know. Does going to the bar drinking beers with your boys that make money for you? And I tell you they talk about this adage.
Speaker 1You are the average of the five people you hang out with every day and I just was on a podcast and the guy brought that same thing up and I said you know what's cool about doing the podcast especially getting a chance to get together with Alan is I get to get out of my day-to-day and the grind of running my biz and start to talk a little bit about things that could be. And you know what this is fun, this things that could be. And you know what this is fun. This is like going to have a round of golf, which you still aren't going to be able to come to, my course, but we'll in fact we had a chance to play today and I said I'm sorry, we're busy, we're podcasting.
Speaker 1Those guys are like come on, you can play golf with us. And they said we had an extra spot. I'm like no, I'm definitely not bringing Alan because I guest today, because my swing is too good. It was, you know, it is smooth as butter. I like it. But no, but you know you talk about uh, you know you guys. And um, it's happened again. I had, uh, two more people uh in the last week alone contact me. Yeah, one um is a guy who says, hey, I've got this screen door product and I'm trying to figure out how to make a market for it and you know how to push it, and so I pinned his. I flagged him because I'm going to have to really look into it, because just right off the rip I said, well, in your email, I don't even know what your website is, so I don't even know how to go look at it. So send me that back and then I'll get started.
Speaker 1And another one I talked to him for about 45 minutes. He is a young man trying to scale a handyman business and was picking my brain about scaling. He goes Chris, I'm going to go from three to 10 in a year. And I'm like, yeah, and I know he's listening yeah, it's going to be really hard AKA, nice try, but I think you want to think about the scales and how it works. And then I got another guy's podcast and he starts telling me about a guy he took from zero to 14 million in four years. And your eyes light up, right, you're like, oh, I want to be that guy because I've been doing this for 16 years and I'm up at 6 million. I was like, oh, I said, but you know what everybody hears when they hear that Zero to 14 is that you're on a hockey stick, you're on just a total incline. The whole way I said and that's not what I have found when I talk about scaling is that we go up a little bit and then you go down a little bit. Maybe.
Speaker 1And then you go up a little bit.
Speaker 2You got to reinvest in your business and you go backwards to go forward, exactly.
Speaker 1And so that's the part about scaling. People don't realize that it takes a lot of little things to make that breakthrough, overnight success, and it just took me 15 years. You're doing great, though, thanks. So all right, guys, we have a problem and we are gonna be right back after these messages. All right, spaz. All right, spaz is back from his mental attack. All right, don't touch the computer while you're talking, because you got too excited because let's introduce our guest. We have had uzair on before, but he says uh, my friends call him uzi, but I like uzi. Well, we gotta ask him are we friends?
Speaker 2they're friends, we call them we got uzair and they're friends with everybody. Yeah, man come on.
Speaker 1Everybody's happy. So we're doing this, we're getting it going. Uh, I'm working on some things here on the, so if you're watching on youtube, you'll figure out what we're doing here in a minute. But we got uzi back on because he came and talked to us and blew our mind about what is really going on with ai and he actually said something, uzi, you didn't know. This is coming. I was saving this one that I keep talking about is that, uzi? I mean, we're not going to do his background. You got to go check, go check out his pod from a couple of episodes.
Speaker 2Can you put a link down?
Speaker 1below, Of course I will. Link's going to be down below in the notes. Just scroll all the way down. So here's what he said. He said you know, I'm running a mobile mechanic business and it's working, you know, and I'm doing good, but I can't scale it. I can't scale it. I can't scale to where I want to be, where I can take my hands off the wheel.
Speaker 1And really and he was like next level, thinking about what he was going to do and he said so I'm going to get into developing a process and a system for HVAC companies that utilizes AI, but not just going to give you a system.
Speaker 1That's AI I'm going to reinvent. I'm going to tell you how your processes ought to work so you can go and then I can scale that business and hit different multiples. And I was like man, that thought process is just amazing, because you can say, hey, I'm just a handyman, but what I'm going to do is I'm just going to add two guys and you're like in Uzi's mentality. And actually I thought that the same way, I'm like, no, I need to add like 20 people, but I need to have my hands off and have managers doing things, because I've been truly going to scale it. I've got to make it simpler, I got to be able to leverage some technology, but I got to have the right processes and that is just a great lesson. So, Uzi, thanks for sharing that one with me and thanks for coming back on and hopefully I got it right, because by the time I got done telling the story AI stuff I had people cleaning houses with robots.
Speaker 3That could happen too. There are robots out there. Did you guys see the Tesla show?
Speaker 1I did.
Speaker 3What did you think of that? I have a Model Y right now and I love it so much that I'm going to get another one with the exact same cars, because it drives itself and it's moving so fast. Every update that comes along, I'm thinking like three years.
Speaker 1I'm going to have that robot in my house.
Speaker 1That's crazy stuff, man. So three years, you've said that when you were on and it's been about a year since we had you on talking about the AI and you said you know, I got about. I think you said two years and this one and you're like hey, man, you just gave, you told, tools right before we got on. Dude, it went even faster than I thought. Six months, you said. So why don't you talk a little bit about what you developed there? Cause we're going to talk about subscriptions and how they can work in your business and get into that methodology for a little bit, but talk a little bit about what you built.
Speaker 3So when we're back in the day, we talked about the AI voice chat that picks up the phones and talks to you and there was, I'm like you can still tell it's an AI and it gives you a little bit of a lag and whatever. Right, with that latest chat, gpt advanced voice mode that came out. Did you guys see it? I?
Conversations on AI Assistance
Speaker 1haven't seen it. Why don't you explain that one to us?
Speaker 3So if you have a chat GPT plus, you can click on the voice mod on the bottom right and you can talk to it and it's almost it. It's perfect like I shouldn't say it's absolutely perfect. You can make it speak to you in any language and you're having a proper conversation with it. You can talk over it, you can talk through it and you can change it. It's a it's, it's there, man, like I don't know, you guys gotta try it out. Would you see it for yourself?
Speaker 1it's completely there so that's chat, tpt plus. That's the one you pay like 20 bucks a month for a deal.
Speaker 3Yeah.
Speaker 2Yeah.
Speaker 1I've got that.
Speaker 2I'm going to go talk to it. You can talk over it.
Speaker 1I'm going to talk over it. So we've had some other. Ai folks on talking about how you develop that, get the branding, get the build. We had Stephanie Davinskas on talking about that as well. But Uzi is the one who really blew my mind with having that chat. Yeah, that it was working, it was going back and forth and it actually told the customer, said I want to talk to your supervisor. Well, as a matter of fact, I am your supervisor. I was like dude, that's like next level shit.
Speaker 2I need to have that well, when the ai refunded money and when that wasn't part of what it was programmed to do because what the customer said made sense is when I just went that's amazing, but now I'm really scared, right.
Speaker 1Totally right.
Speaker 3That was version 0.1. Now it's like it's gone to the level of it's perfect, like it's a human. Now, like you can have a full, I have on my car. I just put on the advanced voice mode and I have full on conversations with it. I don't even call my friends anymore.
Speaker 2I mean, I don't even call it.
Speaker 1Oh my God you're just talking to us. Hey, how do you think? Oh, that's so funny. He just went. He gave that embarrassing. I don't even call my friends anymore. Yeah, are you married? I've had, I've had. Well, yeah, I know.
Speaker 3Yeah, like sometimes I want like a hashtag idea, like look at history and be like why they do certain things a certain way and just like go through the different thought processes in my head. I'm like let's talk to ai about it. It's like I learned so much more. It's like having a super smart friend so, all right, chat, gpt.
Speaker 1Plus, I need a super. You know what? I think alan's gonna become ai alan pretty soon. Yeah, you need to replace me right now. Oh, my god, all right, so check, so check this out.
Speaker 1My daughter is in a physician's assistant school PA school and she's going to school to help people and and be basically a you know, a minor doctor or whatever they call them. So here's what she does she takes notes on her iPad. She has one of the iPad pros. She takes notes, she sends it to notepack, notetakerakerai and it creates a podcast. That that actually isa conversation, like alan and you and I are having right uzi, and she sent it to me and my wife and we're listening to it in the car. Now.
Speaker 1It happened to be about thyroids, um, which we're not going to get into that conversation, but I felt like at the end of that I was sitting there listening. I'm like, oh, I get it, the r4, the r3. Now when you go to the doctor, they talk about the different. But here's how it went. She took her notes and the guy would say, so, this thyroid, what's the thyroid doing? And all of a sudden, a lady's voice would pop in. Well, that's a great question. Here's what the thyroid does, does. It regulates your hormones in your body using different enzymes. And here's the enzymes. They're like l4, l3 I'm probably getting all wrong and the guy goes wow, really, so you're telling me that, like, if I'm a little too warm, it's going to tell me to cool down. And they're doing all of this and I'm like, oh my god, all off her notes and this is notetakerai notebook notebookai, that's it.
Speaker 3I was like I should start a podcast.
Speaker 2I'm like forget about it so you jump in the car and you're like I don't know if you have a name for your AI, but it's like you know I'd have a hot girl name for my AI, I guess. And then you're like, what is your hot girl name? I gotta think about it Mercedes, amber, that's too stripper. Maybe Tiffany, I don't know. Tiffany, oh Tiffany, I've had such a bad day. And then Tiffany goes. So tell me, uzi, tell me about your day. Is that how the conversation starts?
Speaker 3It's more like I just run right into it. I don't talk about my day with my ai.
Speaker 1I don't need it for the part, because, because you guys know each other so well, you're like, hey, everything about me, and then there's no foreplay with your ai no, I I'm not. I'm not trying to have you seen that movie her yeah, yeah, that's what I was thinking the whole time you're talking.
Speaker 3Oh, I know, I know you guys are thinking that I don't need that for my ai. I just need them to tell me hey, what is the logical, what is, how is this in a logical statement? And I say the statement. And then I'm like, okay, tell me, walk me through this idea Like, what could I do here, what could I do there?
Speaker 2Awesome, so like a business problem that you throw out and then you hash it out.
Speaker 3Not business, more like history or just like philosophy or the way things are. I talk about those things right In terms of business?
Speaker 2not really, not yet wow, because I've heard, because I've heard people who can use that all right.
Speaker 1So I've tried a couple of those things. Yeah, it seemed very generic to me. I mean my first shot at chat, gbt, um, when I said like hey, give me a business outline for uh, oh gosh. I'm trying to remember what it was now, but it was very generic. You're like you do this. I'm like, well, those are the five easy steps. I mean I'm time, I mean I need next level shit. But now that I can talk to it.
Speaker 3I'm gonna start saying that and you can start like hashing out, but yeah in terms of business advice, I find that business is like it's it's you can talk about it, but at end of the day, it's about figuring out what works for your market and works for your business. You're a scientist at the end of the day, right? And just because they tell you this would work, this would work, that would work doesn't mean it's going to work. You just have to figure it out for yourself.
Speaker 1All right, so let's go back to the car. I know, Alan, you're dying to find out what else he's talking about. Maybe he's asking what's the best way to get directions. How about that? No, Do you use Google Maps or do you use Waze? This is a holy war, by the way.
Speaker 3This is the same company Isn't Waze by Google.
Speaker 2Actually Google bought Waze yeah.
Speaker 1I know, but still.
Speaker 2Every time I use Apple Maps, I just scold myself. Why do I reflexively go there? Because it screws me every single time.
Speaker 1See all right, so there you go. It's a holy war and you just picked Satan Apple.
Speaker 2Maps is the worst. It is the worst, it is 100% the worst, and I don't know why I keep doing it. And then I'm like, oh, I've got to remember to go back to Waze.
Speaker 1Yeah, but then there's sometimes little bit of a backup. It'll take me through a neighborhood that has the eight-foot speed jumps or humps, whatever you want to call them. I call them jumps because I'm not really slowing down, I'm just getting air in my pickup. So when you see the trusted toolbox coming through on two wheels just think Duke's a hazard.
Speaker 1I am flying across and I'm like come on Waze. So I actually now I'm so bad at this, this is how bad it's getting. I actually do ways and google maps because our crm of course you do, we use google maps. Then I put ways on just to see with, or both jiving with each other.
Speaker 2I did that just yesterday going down to the airport we actually had all three going.
Speaker 1Judy had one on her phone and I had two see, and you're like, oh my god, technology has made it harder, because if I was blindly just following the old AAA triptych, I just would have followed it.
Speaker 2Oh, I know, and you get to the end of the page and then they highlight it and you flip it.
Speaker 1And Uzi, this is probably before your time Way before your time. We used to have to do trips. I'm from Michigan and we go to triple a and say we're going from jackson, michigan, to fort myers, florida, and they would print out a triptych for us and we'd come back and get it two weeks later and it would be the spiral mound, uh, six, or with five no, four inches by eight or something and it would give you the road and you would say and then you'd have to, you get to the end of the road and you flip it over.
Speaker 1And you get to the end of the road and you flip it over. You're going down and say you know it's a 24-hour trip or whatever.
Speaker 2Uh, that my dad is probably wondering how did we even survive as a society?
Speaker 1oh, we didn't have seatbelts bro.
Unlocking Membership Plans for Business
Speaker 3Yeah, we weren't even doing seatbelts, no I'm almost 40, like I'm not that young oh well, yeah, but we're almost 80, that's what I said, a friend didn't say hey man, great for 74 and he goes, man, you look great for 60.
Speaker 1I said 54, jackass, he goes right now. I'm like you're not helping. All right, you do look good for 60, though for 60 amazing.
Speaker 2How do you do it?
Speaker 1I did I'm six years younger. Let's have a 60. I'm not gonna make it so All right. So, uzi, we brought you back on. We've been chatting about AI and I think, honestly, there's some great gold nuggets that we just figured out just from AI alone right here about what it can do. So go out and check out. For $20 a month, you can start talking to ChatGPT+, and I think that's a great idea. But let's talk about this idea. You said hey, chris, I don't know if you'd like to have me back on, but I really want to talk about subscriptions in business and how subscription models can work in a business. So, before we get into that, why don't you explain what subscriptions are for everybody, and then we'll start talking about how we can implement them?
Speaker 3So the way I look at memberships is you have it's sort of like how you have AMA in a way, or what do you guys have in your place?
Speaker 1What's AMA?
Speaker 3The car clubs towing memberships.
Speaker 1Oh, aaa, yeah, we do, yeah, aaa, yeah, right, but what?
Speaker 3I've noticed, is that so with our business, my mobile mechanic business, right? So we always used to struggle with the seasonality of the business and this work never coming Like we just an average struggle that every business would have. Like sometimes it's really busy, sometimes not busy at all, and every month felt like a grind. And then in 2020, we said, okay, we need to figure out how to get reoccurring revenue that no matter what we do in a month, we're still going to make the same amount of money or more, like we have at least a baseline coming in.
Speaker 3And then we tried everything from like prepaid services which would be like maintenance plans we do tune-ups to selling pre-services package services in advance to what we settled down. There was just a membership where you paid x number of dollars per year and you would just get discounts and you would get maybe a free inspection as you as needed, you get free towing if we couldn't fix your car on site, and just a bunch of other like small benefits, and that made the biggest difference in the world. Four years later, we went through a cycle of up only where it was super busy because remember 2021, 2022, when everyone was making a lot of money, and then the downturn and we survived it just fine because we had all this money coming in every month regardless. And then I realized Go ahead.
Speaker 1Yeah go, I'm still listening.
Speaker 3I'm digging, that digging, and I was working with some of my clients before in the last two years and the first thing I implemented with them was a membership plan. And then I realized I'm like, as things slowed down for them, they were like the most amazing thing that they worked on, like the thing that saved them pretty much was a membership plan. Like they had money coming in every month and they were so grateful they did that.
Speaker 1All right, so membership plan. So you did it for the automotive business.
Speaker 3I did it for automotive HVAC and HVAC.
Speaker 1All right. So in the biz, you go to a homeowner or a car owner and they could be both Sure All right, thank you, you can sell two memberships, right? So you go to them and say if you buy this membership, if you put your credit card on file, you get this. What is this that makes this compelling for them to say yes?
Speaker 3so it depends. That's the. That's the secret code that you got to find for your business. Like everyone thinks that that's going to be this.
Speaker 1That's his answer I know I'm going to ask chet tpt when I get in the car now ch.
Speaker 2Chris just wanted an answer that would transform his business. I just wanted the easy answer.
Speaker 3I know you guys want the easy answer. I can't give it to you because I've tried this so many times and I'm like what works best for your market, what works best for your customer base, right, like, what would work for me might not work for you. Like, for example, when I sell memberships for my mechanic business, on the phone I say, hey, our call, our diagnostic fees $180, um plus a $35 service call fee. But if you get an instant make prime membership, it's going to, we're going to waive the service call fee. It's like what's instant make prime membership? Oh, it's a membership for $97 a year and you get um, wave service call fees 15% off, repairs, free towing if your car can't be fixed on site and a bunch of other things. But it's a very good value. On paper it sounds like a really good value All right, so let's talk about that for a minute.
Speaker 1So you just said $97 for a year, but you just waived $180.
Speaker 3No, I waived $34. Okay, all right.
Speaker 1So you waived $34. Yes, dollars. Oh, I weighed 34. Okay, so we've all right, she weighed 34.
Speaker 3you get 97 on the year but now you gotta tow their car. In the event that you only gotta tow their car if you can't fix it on site, which is a very rare possible.
Speaker 1It's a very rare very rare, okay, all right and it's up to 150 bucks.
Speaker 3and then you, if you're towing your car because you can't fix it on a site, you're taking it to a shop where you're making an even bigger job out of it. Right, you're making more money.
Speaker 1So I think the reason I think a lot of people struggle with the membership is the fact that you know, for $97 a year you're like but yeah, I could have got that service call fee and get the one and I could have got the whole thing. I would have had a $400 ticket. Now you're saying I get $97 for the whole year and I don't. I don for the whole year and I don't.
Speaker 1I don't see the value, and so that's where you got to unlock this for us, because I I've talked to a lot of people about this and and that's what everybody says all the time it's like well, why would I do that? Because I could made the money can I jump in on this, yeah yeah.
Speaker 2So what I immediately thought of when uzi was talking about this is this isn't necessarily an upfront cash grab. What to me it is is it's a loyalty program. So for a nominal fee you get all this stuff which you actually may be upside down doing, but what you have is a completely 100%. They're never going to call anybody else. They're calling you for everything that they need. So it's a loss leader.
Speaker 3It's not. You guys are getting it all wrong. All right, that's what I want. Yeah, exactly, I know. No, I'm right.
Speaker 1Our company is a member. We've changed it.
Speaker 3so our business is a member business now, where if you don't get a membership, the cost is so high that it's a no-brainer to get the membership. That's it, the initial cost for the repairs, and everything is designed in such a way that it actively penalizes you for not getting membership. And then you get a membership and then you're like, oh, this is like you get a slightly better market rate, but not much better.
Speaker 1Okay, so it's slightly better 15% off your services, which again, I think we can all afford that and do that deal. But you're saying 97 and you have to put your credit card on file and we bill it annually.
Speaker 3We bill it, I bill it annually.
Speaker 1And I found that.
Speaker 3I also found that, um, but it is for four years now that if they're going to cancel, they're going to cancel right before the first year.
Speaker 1But if they don't cancel, they, they pretty much don't cancel, like it's like years become members for years and because they're part of your program and they're getting your emails once a month and you know they're in your, your top of mind for them.
Speaker 3They're coming to you for all their automotive services and the thing too is afterwards the initial diagnostics fee didn't pay for right, but then I do free diagnostics after that because I want them to have no qualms of calling me I gotta know uzi is so thoughtful about absolutely everything.
Speaker 2I'm sure that he had this hashed out in his chat with his ai in his car. But 97, let's just call her tiffany tiffany. So you're talking to tiffany about 97 versus 98, versus 99? I mean there has to be a strategy on the 97.
Speaker 3Psychologically, the price people do. When it was some psychological thing that I read back in the day where it's like the price people are most likely to buy at because it feels like it's a deal 99.
Speaker 2Sounds kind of like a scam. 97 sounds like a deal.
Speaker 1Yeah.
Speaker 3There you go.
Speaker 1See you didn't want to answer the question, but Alan forced you to answer the question. I just wrote down all my membership fees are going to be 97.
Speaker 3Everything at 97. It was just a thing that came. I read about it in a long time in a business book and I was like, listen man, it doesn't hurt to be 97 bucks.
Speaker 1So check this out. I actually just got done landing two monster remodeling jobs. No monster remodeling jobs. No wonder you didn't call me back on mine. Well, your job is certainly a little small, that's all right, don't worry, I'll take care of you. Tiffany's going to talk me back into it, but on my $180,000 basement remodel and deck I should have done $179.97. But no shit, I will tell you this. I actually must have read the same thing you did, uzi. I tell all of my guys, when we price things and we price materials, we do labor and materials. All of our material numbers end in threes and sevens.
Speaker 2Three sounds like you really thought about it. You went down to the penny kind of a thing. Exactly right.
Speaker 1So it's a precision that we don't have, especially in the handyman business. I don't know. You know I got two tubes of caulk. You know two tubes of caulk right now would run you $14.
Speaker 2Yeah, caulk has an L in it.
Speaker 1Huh.
Speaker 2Go ahead.
Speaker 1No, not the caulk. I talk about what? Hey, if you don't use your finger to smooth it out, uh, at the end it ain't right. I've, I've already, hey, I've trained all my handymen. It's we. We have potty talk once a year and then we have cock talk and we talk cocks and I'm like look, they all come in different sizes, different size tubes. It doesn't size, doesn't matter. Okay, they're all different colors. There's black, there's white, there's sanded. Oh my god. But you know, what you got to do is you got to always make sure you crack the tip. And then we crack the tip, you got to make sure it's oozing out the right way, because you're going to have constant flow. So you know what?
Speaker 3all my handyman listen and I got oozy embarrassed, don't worry, tiffany all I'm saying, all I'm thinking right now is, if you were a politician, how that that could be taken out of place.
Maximizing Membership Programs for Small Businesses
Speaker 1Oh, it's so bad and actually no, there's no way I can run for office and actually I've got a TikTok out there about that whole cock talk. But it's a different thing. It's all clean, all right. It's really not Back to this. You got me off on the cock, all right. So memberships at 97. So membership memberships at 97, but I do, I do sevens and threes. So I love, I love the idea. 97 is well thought out. So you've been doing this since 20, that's four years. How many people have you been able to sign up on that?
Speaker 3I've got almost 4,000 cars 4,000. And it's. It was unbelievable how I the reason why.
Speaker 3So I told you guys I've been kind of like hands off my mechanic business, right like right and when I said hands off, I didn't even know the numbers of my business for six months and I looked at them like how are we still in business? And I realized because our call volume dropped so much. I looked at the numbers like how are we still in business? I'm like, oh my god, we have so much money coming in from prime revenue. And then I talked to the guys. They're like, yeah, we pretty much only do prime customers. And I'm sitting I'm like, oh my God, we have so much money coming in from prime revenue. And then I talked to the guys. They're like, yeah, we pretty much only do prime customers.
Speaker 3And I'm sitting here. I'm like we're effectively membership business. Why can't? Every other business should be a membership business? Cause we had this thought process back then and you know what it is. It's like I just and there's probably a mindset thing to it, and the other thing is it feels like such a long-term thing that they just don't feel invested into it. I don't know. I feel like it solves all problems.
Speaker 2It's interesting because I remember on our last time we spoke, the auto business was actually kind of driving you crazy, if I remember correctly, and the HVAC seemed easier, more lucrative. But with using this membership model, suddenly you're kind of all excited about your automotive.
Speaker 3I just didn't look at the numbers for a while. I was so detached from it. I've been so detached for like four or five years now, right.
Speaker 1Wow, Dude, that's how about that?
Speaker 2I can't wait to say that Like yeah Well, how would it well cause you're very detached anyway with all your trips to Vegas and stuff. How nice would it be to just sort of forget about a business for six months and look at it and go oh speaking of that week, what are you doing?
Speaker 1Yeah, so I'm not going to Vegas, I'm going to the Rose Bowl, which you helped me figure out where the seats are, and then I'm going to SoFi. So we're doing a boys trip to watch a lot of football. And I can't even talk about what I did over Halloween, because I'm still recovering and it's a week later, but that was a Thursday night, halloween.
Speaker 3It was a Friday Night.
Speaker 1Lights it was a Thursday night. Halloween it was a Friday night. Lights it was a Saturday night. South Carolina-Tennessee game. I get up at 530 in the morning, drive back to Atlanta and go to the Atlanta Falcons game. Oh yeah.
Speaker 2You went to a Halloween party.
Speaker 1On Thursday night.
Speaker 2What did you dress up?
Speaker 1as I was Jesse from the Righteous Gemstones. Do you know what that one is, Uzi.
Speaker 3No.
Speaker 1Oh, All right, they make fun of Southern preachers. All I'm saying is little kids coming up to get candy might have heard. I've just turned water into wine.
Speaker 1I've just turned water into wine. All right, so back to the subscription idea, the membership program. So you figured this out in the automotive business, but you've been working with a lot of HVAC companies, so talk to me a little bit about how you implement it for the HVAC companies, cause I've heard a lot about this program and actually I'm also a member of one here because I have my own HVAC company. Does this for me?
Speaker 3So when it came to HVAC companies, I made the mistake of including tune-ups in the membership program. Right, and now I learned that if you include, like I this was a mistake that I made before too, with my initial membership program, where I pre-sold oil changes and stuff like that you didn't actually make money, you just have a liability on your balance. You just borrowed money ahead of time. So it's not a real membership program. That's just like you borrowing money from customers. A real membership program is one where you get paid but you don't owe anything in return. There's no services, I guarantee. There might be some promotions and offers that I guarantee and you know what, if someone uses every single one of them, you might end up upside down. But I can tell you from the 4 000 ones that I have, I've I don't think I've been upside down any of them, all right, so I want to.
Speaker 3All right, I have not been upside down on any of them.
Speaker 1Um, I wish I could say that about my business um I've never lost money with any. What's your retention rate? Yeah, that's, that's actually exactly what's that.
Speaker 3I gotta look at that, but I think it was close to like 60 60 if they and that's if they can't, if they don't cancel. In the first year that moved up to like 80%, like it was something stupid Wow. So, the first year is the most scary part, and I have to now figure out a strategy for that.
Speaker 1So let's unpack this. Like, can I do that? Look at me, I like the smug. Look on your face. When I use the word unpack, all right, so what's the subscription service for hvac?
Speaker 3so for subscriptions, it would depend on what your um, what would work in your market. All right, so I got two.
Speaker 1I got two units, so I got three units.
Speaker 3Uh, hypothetically I have three units okay, I have three um, so I would do like, hypothetically I would do. First of all, it doesn't matter per unit, you want to keep it as simple as possible okay, all right, so you don't do by units, okay because, my guys do it by unit okay I don't do by unit because I don't want to over complicate it.
Speaker 3There's no tier packages, there's no gold premium, whatever. It's just here's a membership program and here's what it includes. Okay, so might be a free service call fees. Call us when anything goes wrong with your unit. We get 15 off repairs, you get a priority booking, um, and then you can do something like this you can be like hey, if we inspect it or we can increase your warranty, like, instead of having a, we double the warranty and all the work that we do, um, and then that's an easy one too, because, um, a lot of times what we say in our world, in the handyman thing, is we do one year on workmanship, um.
Speaker 1And I've had guys who said, uh, I've actually talked to other handyman. They're like, oh, I do 10 years. I'm like, um, you got to be kidding, right. I said, if you replace a window or or, you know, do some trim repair and they don't paint it after 10 years, that's not your problem. So you can't, you know. But back to uzi's point. If you said, hey, I offer a one year normally, but if you join the membership program I'm going to give you a three year. Three years I'm fine with you know what I do.
Speaker 3I do a unlimited warranty as long as you're a member on parts only.
Speaker 1Oh nice, because you guys see, that's the other thing. I go back to this. I just had somebody ask me the other day would you do this all over again? I'm like, no, what I said? No, I wouldn't start an HVAC. I mean I would have bought or started an HVAC company, because in HVAC you can't DIY it anymore. You can't because you can't touch the Freon, you can't get your hands on a condenser coil. You know you can't. But in my world anybody can go to Home Depot, lowe's Menards, any of the big box stores. They know exactly how much the part I'm providing to them is and they're like, well, why am I paying more? And we say, well, you're paying because my guys are going there and picking out the right stuff. They know what to pick out, you don't have to worry about picking it out and you can make that happen, so suck it.
Speaker 2Maybe if he called me back on my smaller job you might get that one. It might be valuable to you, for the listeners.
Speaker 1I'm actually going out there to warranty his door, because nobody in my company seems to know how to fix his door, so I'm going out to figure out.
Speaker 2why I coming out?
Speaker 1that's it. Fix my door. I'll tell you what my father that by the time that thing's done, that door's swinging and opening and closing like butter but judy wants it makes so much sense to be like the small back. Oh good, oh, I'm coming see, we're gonna talk decks now. Huh, yeah, that's a whole nother conversation. Decks and cock. Well, you know, honestly, I don't have deck envy.
Speaker 3I would say unlimited warranty for a handyman business does make sense as long as you're a member. They're paying every year and you're the first guy they ever call for a small reason.
Speaker 1So what you do is just warranty out your labor by charging for the parts. Yeah, exactly, and you're giving money off the parts, right. Yeah, I will tell you, though, you're right. We do have a warranty program, and I've actually honored things outside of one year, of course, because I'm in a business for 16. You gotta, it's your honor, right, but you know, when you go out there, what happens you get more work.
Speaker 3Yeah, I just want whatever membership plan. I have to make sure that these guys keep calling me back, so they're actually paying me for the privilege of me being their first guy. And then, on top of that, if you're super smart, like I just take that money and I pay myself.
Speaker 2Isn't that what I said at the beginning? It's a loyalty program. Yeah, that's 100% of what I said. I know, but I'm so, I was right, all right.
Speaker 1So I'm acting like a lot of people, but actually I'm part of a mastermind group and I would tell you we've kicked this thing around because I have the Home Hump membership program. I think I'm overpricing it, right now Did you say Home? Hump Home Hub. Oh Please, oh my God, tiffany, we're back to the strip club, aren't we All right?
Speaker 3So back to. I mean, Uzi doesn't like that stuff. You seem flustered Me, yeah you do On the home hump.
Speaker 1You can't tell if I'm flustered or not. He actually does have a good face. He's got a good face. I did get him with the cock talk, but we'll go back to this. But I like this because, guys, I will tell you that I'm part of a mastermind group. You guys have heard me talk about the group I'm in in Atlanta. I got another call about that one asking how they could join. I'm like, well, you got to be in Atlanta because we're not virtual, but anyway, we've talked about this.
Speaker 1I've watched. In six years I've watched three companies exit. Two of them who have exited realized that the value of having a membership or recurring revenue model turned their values that they could they're basically their multiple up enough to where they went. Hey, because in home services, if you don't know what your net is, uh, you gotta figure that out. If you think you're going to sell it, you're really only going to sell it for three net if you're lucky and everybody here listening you just heard that nugget for me, three net if you're lucky. Go ahead, email me, ch me, chris, at the Trusted Toolbox, tell me why you're better than me, because I'm telling you I've watched it all happen. But guys who had recurring revenue, membership programs, subscription programs, they were getting twice and sometimes two and a half that multiple of the three that I just talked about oh, so much easier for a buyer to look at that and go, yeah, I want that.
Speaker 1Right, exactly right. So a great business to run, but also a great business if you're thinking of an exit down the road because you've got that, but the other thing you've got uzi. You just talked about that and I and I talk this about this all the time. You have repeat customers and they know how to work with you and it makes it so much easier for all of your technicians or your craftsmen to good point.
Speaker 3It solves all business problems. You can hire technicians because you know you have work coming in. You have money coming in, no matter what right, and if you're really smart and entrepreneurial, you'll take your membership money and you'll reinvest it into marketing right away, leverage it up and get even more work from it. Like, I'm not the smartest businessman, so I take that money and I pay myself with it. But if you were better?
Speaker 1than me. Someone's got to pay for that. Model Y.
Creating Compelling Membership Programs
Speaker 3Someone's got to pay for it, right. I got bills to pay, right.
Speaker 1And I told my business partner.
Speaker 3I'm like this will keep us incentivized to just focus on the business, because if our membership rates go up, our salaries go up, right. But you could reinvest that into marketing and use your existing customers money to get even more customers and more money in the door right and grow your business, you guys.
Speaker 1Are you guys seeing what I'm saying like yeah, no, it's a perfect thing in my mind you're big, well, yeah, well, I know, but but you and you're way smarter than we are, um, but no, I totally get that because he did say 4 000 customers at 97.
Speaker 1I can't do that math, but I could do a hundred times 4,000 and that's definitely more than 4,000. So you're dizzying. So but think about that number. Just on the annual revenue. Um, I just, I just did the same number with somebody else, but I know, alan, you want to make a point, so I'm not no, I actually want to ask a question.
Speaker 2Maybe you can help our listeners if they're thinking about doing something like this. Walk through the thought process on it, because you have to have a price that's compelling, you have to have an offer that's compelling and it ultimately has to be profitable. And what are some of the things that you need to think about? Because it could be that you think you're adding a throwaway to it and all of a sudden, you get upside down and people have signed in for this thing and oh my god, I'm actually not making money on this so, um, my process is this first thing, you have to decide that you're going to remember business like a membership business, like it has to be like an all-in decision.
Speaker 3You can't just do it half-ass. Number two you have to look at your prices and be like, hey, what's the bare minimum I need per job? And then you have to increase your prices by an X number and that's going to. So the bare minimum you need I mean the number that you're happy with is going to be your new baseline number and you're going to add to that as your non-member price. So that way you'll never be upset with the price you're going to get paid. So your members will still pay a rate which you're happy with and your non-members are now going to get penalized for not being members. That's part of being a membership business, right?
Speaker 1I like it.
Speaker 3If you don't give people a choice, it's a very different conversation to be having versus. You're like oh, do you want a membership plan to get this discount? But like you don't even care about it that much, right. But now you're saying well, we're a member only business. We care about our members the most. If you want to be part of my family, you'll pay this price, which I'm happy with. If you're not, you're gonna, I'm gonna penalize you for it by paying a super high premium oh, he did it again.
Speaker 1Damn it. What's that? I'm gonna keep talking about this one over, I know, when I sleep on it because I need to sleep, because I'm old, um, and then wake up, go to the bathroom and sleep again. But anyway, back to this. He said it. Yeah, hey, you want to be part of our member program? Then great. If you don't, then you know, go take up jack Legg. Hello Costco. How many times have I gone out of my way to go to Costco just to get toilet paper and get gas?
Speaker 2A lot. Yes, have you actually ever just walked into Costco and just bought toilet paper? No, every time.
Speaker 1I walk out of there. You fill the cart.
Speaker 2I do Every time.
Speaker 1You know, when you walk in there and they have the little special buys on the right, you're like, oh it's a special. And then I follow. You know, of course, the food samples. Oh yum, yum man. Oh my God, it filled me up and I'm like oh, you know what. And then I feel guilty because, oh, I like that one, so I go buy it. Have you ever done that?
Speaker 3Sure, whether you're going to buy it or not, but I do it anyway. Right? Are you a Costco member? I am, and there was a study that was done where if you shop at Costco, you actually spend more money on groceries than go in the grocery store directly Shit.
Speaker 1You don't actually end up ahead.
Speaker 3That's the best part about Costco. They give you this illusion that you end up ahead, but a study was done that showed that that's not true.
Speaker 1And that's why it I think more of a brilliant, I mean this stock, it's the most up only stock in the world because they know that, right, dang it, man, I knew I should have bought that one. Um, you know that the, the ceo had a new board come in, or whatever had a board said we have got to raise our rates on, uh, the hot dog and their coke price.
Speaker 1You know their hot dog is about 50 yeah and he goes no, and they're like I guess it was a knockdown, drag out, which you could understand. Right, they're not losing money but they're not making anything on those hot dogs and drinks. But people flock into there and you watch it at my Costco. They'll get one slice of pizza, but their cart will be runneth over. I mean, sometimes they have two carts.
Speaker 3They paid for that pizza over and over and story you just told. You're going to tell people that story, right, and now we're going to go Costco. They're still care so much about keeping our prices low and it just adds to the lore of Costco, right?
Speaker 1right.
Speaker 3I wouldn't even question it, even though the stats show that it's actually cheaper to go to a local supermarket.
Speaker 1I'm not doing it, I'm going to Costco, I love.
Speaker 3I love it. This is all part of a brilliant business.
Speaker 1I don't even go to Sam's Club. We actually are about to get a free Sam's Club membership and I'm like I'm not going there.
Speaker 2You know why? Because you're a Costco snob. I am a Costco snob.
Speaker 1And I go in there and it's the best food ever, it's the best prices ever, and when I see clothes I'm like yeah nice uzi.
Speaker 1This has been awesome man. So membership, subscriptions, whatever word you want to use, recurring revenue is a definite unlocker, not only in business, if you want to stay in it, but if you're thinking about selling it. Another idea to talk about but how you do it, how you structure it. He gave you those tenants. You had to look at what is the value of your customer? What value can you provide back to your customer and then go offer that number that makes it so compelling that they have to do it Right?
Speaker 2Uzi, do you actually help people create a membership program?
Speaker 3Yeah, I do help people do that. So if anyone's interested, they can just go on my website and just reach out to me and I can. I can walk them through it. Uh, the different processes that I've done Drop the done, drop the drop the website big guy cottonwood automationcom.
Speaker 1that's cottonwood automationcom.
Speaker 3yep, yep everything like I did that. I'm working on a jingle right now I punched it up.
Speaker 1I did. I'm punching it up. I'm working on the jingle right now. Cottonwood automationcom. I just came up with that name randomly. I mean I need to change that name.
Speaker 3It means nothing, I know, you know. You said that last time I was gonna, I was gonna bang on Cottonwoodautomationcom. I just came up with that name randomly. I need to change that name. It means nothing.
Prepping and DIY Tips
Speaker 1I know, you know you said that last time I was going to bang on you for that one, because I was like it's so wholesome.
Speaker 2I like it, I trust it, but I don't know what it does. I don't care.
Speaker 1I trust it. I mean, what is cotton, what is wood?
Speaker 2Oh, Cock wood deck. You know, I don't have deck.
Speaker 1Cottonwood is a what it's a special tree. It's a tree.
Speaker 3That's all it is. It's such a plain J name.
Speaker 2You didn't know, cottonwood is a tree dumbass. You're in home improvement.
Speaker 1I'm in home improvement. I know cottonwood is a tree, yeah, and you know what? I'll say it right here on the podcast. Stop listening to who don't even own a gun.
Speaker 2Georgia, it's required to have a gun. In Georgia, I don't even own one.
Speaker 1I know I'm going to report you. Yeah, you can't.
Speaker 2We're going to report him too.
Speaker 1Right Uzi, do you have a gun in your house?
Speaker 3I have in front of me my license that I need to submit.
Speaker 1Oh, so you're going to get one. Yeah, he's over. Yeah, alan's over here, stocked up for the end of the world. I know where I'm going. If, if, if we ever get invaded here in the us that's what my friends tell me too.
Speaker 3Same thing what I'm going there, you're gonna have the allen.
Speaker 1I'm the allen you're gonna load up you want to be the allen. You do want to be the allen of the scenario because you don't want to be the chris? No, hey can we talk about this for a minute she kind, she kind of looked nice and juicy.
Speaker 1Whoa, don't kill. Whoa, whoa, where are we going? All right, everybody, don't forget, if you're going to use caulk, you've got to make sure you're not finishing unless you wet your finger and stick your finger in that crack to smooth it out. All right, everybody, been a great episode. Uzi, you dropped it again. Go out there and take a listen. Take a listen, hey, um, don't forget to tell your friends, don't forget to uh, go out there and check us out. If you stay this long, that means you're somebody who wants to get better what you're doing. Let's all get better. Let's keep going up that mountaintop. We're out of here. Cheers everybody.
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