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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
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.
From the Zoo to Wild is a book for entrepreneurs passionate about home services, looking to move away from corporate jobs. Chris Lalomia, a former executive, shares his path, discoveries, and tools to succeed as a small business owner in home improvement retail. The book provides the mindset, habits, leadership style, and customer-oriented processes necessary to succeed as a small business owner in home services.
especially 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 1:I 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 1:Welcome 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 1:Alan, 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 1:You 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 1:Those 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 1:And 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 1:And then you go up a little bit.
Speaker 2:You got to reinvest in your business and you go backwards to go forward, exactly.
Speaker 1:And 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 2:they're friends, we call them we got uzair and they're friends with everybody. Yeah, man come on.
Speaker 1:Everybody'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 2:Can you put a link down?
Speaker 1:below, 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 1:And 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 1:That'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 3:That could happen too. There are robots out there. Did you guys see the Tesla show?
Speaker 1:I did.
Speaker 3:What 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 1:I'm going to have that robot in my house.
Speaker 1:That'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 3:So 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?
Speaker 1:haven't seen it. Why don't you explain that one to us?
Speaker 3:So 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 1:it's completely there so that's chat, tpt plus. That's the one you pay like 20 bucks a month for a deal.
Speaker 3:Yeah.
Speaker 2:Yeah.
Speaker 1:I've got that.
Speaker 2:I'm going to go talk to it. You can talk over it.
Speaker 1:I'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 2:I 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 1:Totally right.
Speaker 3:That 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 2:I mean, I don't even call it.
Speaker 1:Oh 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 3:Yeah, 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 1:Plus, 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 1:My 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 1:It 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 3:I was like I should start a podcast.
Speaker 2:I'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 3:It's more like I just run right into it. I don't talk about my day with my ai.
Speaker 1:I 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 3:Oh, 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 2:Awesome, so like a business problem that you throw out and then you hash it out.
Speaker 3:Not business, more like history or just like philosophy or the way things are. I talk about those things right In terms of business?
Speaker 2:not really, not yet wow, because I've heard, because I've heard people who can use that all right.
Speaker 1:So 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 3:I'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 1:All 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 3:This is the same company Isn't Waze by Google.
Speaker 2:Actually Google bought Waze yeah.
Speaker 1:I know, but still.
Speaker 2:Every time I use Apple Maps, I just scold myself. Why do I reflexively go there? Because it screws me every single time.
Speaker 1:See all right, so there you go. It's a holy war and you just picked Satan Apple.
Speaker 2:Maps 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 1:Yeah, 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 1:I 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 2:I did that just yesterday going down to the airport we actually had all three going.
Speaker 1:Judy 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 2:Oh, I know, and you get to the end of the page and then they highlight it and you flip it.
Speaker 1:And 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 1:And 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 2:Uh, that my dad is probably wondering how did we even survive as a society?
Speaker 1:oh, we didn't have seatbelts bro.
Speaker 3:Yeah, 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 1:I 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 2:How do you do it?
Speaker 1:I 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 3:So 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 1:What's AMA?
Speaker 3:The car clubs towing memberships.
Speaker 1:Oh, aaa, yeah, we do, yeah, aaa, yeah, right, but what?
Speaker 3:I'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 3:And 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 1:Yeah go, I'm still listening.
Speaker 3:I'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 1:All right, so membership plan. So you did it for the automotive business.
Speaker 3:I did it for automotive HVAC and HVAC.
Speaker 1:All 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 3:so 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 1:That's his answer I know I'm going to ask chet tpt when I get in the car now ch.
Speaker 2:Chris just wanted an answer that would transform his business. I just wanted the easy answer.
Speaker 3:I 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 1:So you just said $97 for a year, but you just waived $180.
Speaker 3:No, I waived $34. Okay, all right.
Speaker 1:So you waived $34. Yes, dollars. Oh, I weighed 34. Okay, so we've all right, she weighed 34.
Speaker 3:you 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 1:It's a very rare very rare, okay, all right and it's up to 150 bucks.
Speaker 3:and 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 1:So 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 1:I 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 2:So 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 3:It'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 1:Our company is a member. We've changed it.
Speaker 3:so 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 1:Okay, 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 3:We bill it, I bill it annually.
Speaker 1:And I found that.
Speaker 3:I 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 1:But 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 3:They'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 2:I'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 3:Psychologically, 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 2:Sounds kind of like a scam. 97 sounds like a deal.
Speaker 1:Yeah.
Speaker 3:There you go.
Speaker 1:See 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 3:Everything 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 1:So 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 2:Three sounds like you really thought about it. You went down to the penny kind of a thing. Exactly right.
Speaker 1:So 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 2:Yeah, caulk has an L in it.
Speaker 1:Huh.
Speaker 2:Go ahead.
Speaker 1:No, 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 3:all 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.
Speaker 1:Oh, 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 3:I've got almost 4,000 cars 4,000. And it's. It was unbelievable how I the reason why.
Speaker 3:So 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 3:And 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 2:It'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 3:I 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 1:Wow, Dude, that's how about that?
Speaker 2:I 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 1:Yeah, 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 3:It was a Friday Night.
Speaker 1:Lights 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 2:You went to a Halloween party.
Speaker 1:On Thursday night.
Speaker 2:What did you dress up?
Speaker 1:as I was Jesse from the Righteous Gemstones. Do you know what that one is, Uzi.
Speaker 3:No.
Speaker 1:Oh, 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 1:I'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 3:So 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 3:All right, I have not been upside down on any of them.
Speaker 1:Um, 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 3:I 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 1:So 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 3:so for subscriptions, it would depend on what your um, what would work in your market. All right, so I got two.
Speaker 1:I got two units, so I got three units.
Speaker 3:Uh, 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 3:There'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 1:And 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 3:I do a unlimited warranty as long as you're a member on parts only.
Speaker 1:Oh 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 2:Maybe if he called me back on my smaller job you might get that one. It might be valuable to you, for the listeners.
Speaker 1:I'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 2:why I coming out?
Speaker 1:that'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 3:I 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 1:So 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 3:Yeah, 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 2:Isn'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 1:So 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 3:So back to. I mean, Uzi doesn't like that stuff. You seem flustered Me, yeah you do On the home hump.
Speaker 1:You 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 1:I'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 1:Right, 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 3:It 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 1:than me. Someone's got to pay for that. Model Y.
Speaker 3:Someone's got to pay for it, right. I got bills to pay, right.
Speaker 1:And I told my business partner.
Speaker 3:I'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 1:Are 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 1:I 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 2:Maybe 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 3:You 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 1:I like it.
Speaker 3:If 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 1:Damn 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 2:A lot. Yes, have you actually ever just walked into Costco and just bought toilet paper? No, every time.
Speaker 1:I walk out of there. You fill the cart.
Speaker 2:I do Every time.
Speaker 1:You 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 3:Sure, 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 1:You don't actually end up ahead.
Speaker 3:That'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 1:And 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 1:You 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 3:They 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 1:right.
Speaker 3:I wouldn't even question it, even though the stats show that it's actually cheaper to go to a local supermarket.
Speaker 1:I'm not doing it, I'm going to Costco, I love.
Speaker 3:I love it. This is all part of a brilliant business.
Speaker 1:I 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 2:You know why? Because you're a Costco snob. I am a Costco snob.
Speaker 1:And 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 1:This 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 2:Uzi, do you actually help people create a membership program?
Speaker 3:Yeah, 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 1:that's cottonwood automationcom.
Speaker 3:yep, yep everything like I did that. I'm working on a jingle right now I punched it up.
Speaker 1:I 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 3:It 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.
Speaker 1:I 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 2:I like it, I trust it, but I don't know what it does. I don't care.
Speaker 1:I trust it. I mean, what is cotton, what is wood?
Speaker 2:Oh, Cock wood deck. You know, I don't have deck.
Speaker 1:Cottonwood is a what it's a special tree. It's a tree.
Speaker 3:That's all it is. It's such a plain J name.
Speaker 2:You didn't know, cottonwood is a tree dumbass. You're in home improvement.
Speaker 1:I'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 2:Georgia, it's required to have a gun. In Georgia, I don't even own one.
Speaker 1:I know I'm going to report you. Yeah, you can't.
Speaker 2:We're going to report him too.
Speaker 1:Right Uzi, do you have a gun in your house?
Speaker 3:I have in front of me my license that I need to submit.
Speaker 1:Oh, 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 3:Same thing what I'm going there, you're gonna have the allen.
Speaker 1:I'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 1:Whoa, 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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