How Randy Hurtado Built a $50 Million Home Services Enterprise

This episode features Randy Hurtado, Owner/COO at DT Companies and the Good Contractors List. We discuss:

- How Randy went from IT sales to operating a $50M+ home services portfolio
- Building complementary businesses under one roof
- Residential vs. commercial roofing
- Sales & marketing strategies for contractors
- Trends shaping the industry
- His newest role as COO of the Good Contractors List

Links:
Good Contractors List: https://thegoodcontractorslist.com/
DT Companies: https://thedtcompanies.com/

Presented by TradeGuard: https://tradeguardins.com/

Transcript

SPEAKER_00 0:01

American building has a raise and brick, one dream, building the American Woo.

SPEAKER_01 0:19

Alrighty, ladies and gentlemen, I am here with Randy Hurtado of DT Roofing and many other businesses. Randy, thank you for joining us today. Thank you for having me. So let's start like we always start with a little bit of background. In in my research with you, I kind of felt that there was three stages of your career. Going back to stage one, where you're 16 years old doing car audio installation services for your friends. Stage two is like, all right, now you're in the real world, you have a career with the IT security software, and then where you ultimately ended up, which is kind of stage three, as I'm putting it, uh, the roofing in the home services world. Can you just kind of give us an overview of each stage and how you evolved into where you are today, where you're doing you know,$40 million in revenue across all your companies.

SPEAKER_00 1:09

So uh as it pertains to the uh and it was 50 last year, actually, for all of them. There we go. Uh but uh I just uh that's that's more about consistency. So if other podcasts say 50, it's like, wait a minute, I thought you said 40, you know. So um when I was 16, I learned that uh I had an entrepreneurial mind in that I had a skill that I could uh bring a service to other people and make money doing it. And so out of my mom's driveway and out of necessity for needing money, because we were not uh we did not have extra growing up, um, I would invite any of my friends who did have vehicles to buy a radio and amp and you know things. Car audio was a lot simpler back then. Today you have to have an engineering degree to install them into cars uh just because of the uh the uh the cars themselves, the technology within them. But back then it was fairly simple to do. And so I had I would have friends, family that would bring cars over, they'd drop off the head unit, the amp, the speakers, and I'd say, All right, come back in a few hours and I should have it all installed. And uh yeah, and then they pay me for it. And then I realized I really enjoyed it, so I went down to the local office depot or stables, whatever it was, and had some business cards made. And I called the company Phantom Sounds. I don't know where I came up with the name, sounded cool. And I would just randomly pass them out and uh at school and what have you, and yeah, got myself a little job, and uh it it uh it it made me some good money for the time being. But um fast forward into my early 20s, I was working for uh a company called Frides Electronics, which you know it only didn't make it um very far east, but it was uh uh an electronics store similar to uh Best Buy, but um more in tune with the computer guy that understood how to build a computer instead of just here's a computer that's already put together. You know, they would sell those, they'd put together, but um, and and so I I I started there as a cash cashier, um, just needing a job. And uh I found myself quickly moving to the back where I could sell because I was going crazy at the register. And uh so they started me out really low, worked my way up, and in five years I was um ready to be a manager of the computer department. And uh lo and behold, a gentleman that was my customer for three of those five years um came in one day, and as he's doing some business with me, he asks, um what uh if I enjoyed working there. And I said, Yeah, I do. And he said, Well, what do you make? And I told him what I made, and he wrote on the back of a card, he said, I'll pay you that plus commission to come work for me. And I I mean, outside of this guy being my customer, I really didn't know the guy at all. And uh so I said, Well, um, let me let me do this on my lunch break tomorrow. Let me come out to your office and kind of see what your operation is and understand your business a little more, because this is a pretty big step for me at the time. I had uh two kids, and um, you know, so and I was married, obviously, and so I didn't want to make any decisions, you know, too quickly. Well, I went out there and I just loved everything it was about. He was willing to put me through Microsoft certification school, and he was a technology guy, uh, network security software. And so that was my uh my jump into the IT security software world, and I stayed there for over 20 years, and um yeah, it it gave me an opportunity to uh learn a lot of technology, and I definitely felt like it was uh you know my calling, and uh and so um yeah, I ultimately uh did that for that time amount of time, moved to Texas, relocated my family from California to Texas during that time. Uh went a 10 uh came out as a 1099 for that company because they weren't incorporated in Texas. And um through uh private equity purchases, uh found myself without a job one day. And uh my my neighbor in the office that I worked in uh out of uh was a roofing company. And I had become real friendly with the owner at the time. And so uh that was my job. I started selling for him in roofs and quickly realized I wish I would have started doing that 10 years prior because I really loved it. I loved working with the individual customers instead of you know dealing with the corporate, you know, approach. And um through a series of you know wise decisions, both on my side as well as my partner, we partnered up and it has grown into five companies total and uh 84 employees and a pretty successful enterprise.

SPEAKER_01 6:37

That's amazing. It's it's I love the I love the story because it was when I was kind of like I said, doing the research, there was these clear sort of marks in your career that ultimately helped you get to where you are today. And I do want to note one thing. You mentioned that you didn't go to college, and I'm just curious from your perspective, you know, what your thoughts are. This is outside of the world of trades and all that, but kind of somewhat related because I think a lot of people that go straight into the trades have a similar experience. What are your thoughts on the value of college, especially as it exists today? I'm curious if you have any opinions on that, having gone through or you didn't go to college and clearly made lots of success for yourself.

SPEAKER_00 7:19

Yes, I would say that college is for some people. Um it is for in my opinion, in this day and age, it's for people who are going into specialty jobs. If you want to be a doctor, if you want to be a lawyer, if you want to be an engineer, um, if you want to study psychology, you know, things of that nature, then education is very important. You have to understand how to uh treat your patients, you know, uh diagnose uh, you know, certain mental illnesses and what have you. And so there's gonna have to be studying that's done in that realm. For me, uh as soon as I graduated from high school, the last thing I wanted to do was go back to school. And um I knew that I wanted to get out into the workforce, whatever that looked like, and start building, you know, start start forging the building blocks for what my career is going to be, wherever that may land. I only learned that I had a knack for understanding sales, marketing, and ultimately technology, um, just through trial and error. You know, uh, you know, I I kind of skipped over, but the the job that got me to Fry's Electronics, I was a loss prevention officer for a sporting goods store. So I arrested people for shoplifting. And one day I'm on the cameras and I see a buddy that I was really good friends with years prior when I worked at Chuck E. Cheese. So yeah, I've had plenty of jobs and experience. Um, so I went down on the floor and I'm like, man, what have you been up to? You know this. And he told me he worked for this place called Fry's Electronics, and this is what they paid, and all that. And um, of course, at that time I'm just working jobs, right? I didn't have any sense of career. And so uh yeah, it just I I I found out through trial and error that, hey, I actually like this technology stuff. I love computers, I love you know understanding what makes them tick, and then ultimately that led to the software side. And so there is no real connection between the IT world and my now entrepreneurial, uh my serial entrepreneurialship, other than necessity. I I when when I lost my job after the company that I, my largest contract got purchased by private equity, I didn't uh know if I wanted to go back to IT security and continue my career there or try something new. And so I just kind of prayed about it and and you know, relied on God's you know, divine providence. And he led me down this path. You know, I always tell the story, it's kind of a joke, that my mom had four boys, three of them were in construction, and one of them was a computer nerd. And then and then I became a construction guy, and you know, part of construction. So, so we were all destined to get into construction in some way, shape, or form at some point in our life. I just took the nerd route first. Um, but but that that experience helped me uh understand business because, of course, when you're working in IT security, you're working with the Fortune 50s, the Fortune 500s, you know, I worked with the military or you know, all stages of government. Um, I've shared in the past, like it wasn't uncommon for me to spend a couple of weeks at the Pentagon with the Office of Secretary of Defense on a project on how to keep China out of the internal infrastructure of our nation. Like very interesting projects that um, you know, made you think. And here I am, I look back sometimes and I was like, I have these these, you know, people that have probably more education than I've been alive, and they're asking me my opinion on how to mitigate this risk for this compromise that happened at the national security level, you know. So it was it was very interesting. But um, I just I understood, I just I if I'm passionate about something, then I'll understand it. Meaning I won't give up until I understand it, I research it. I'm like that with my my faith. Like apologetics is very interesting to me. And so I study that ad nauseum and try to really you know understand, you know, the nuances, understand every little bit about you know what what the Bible teaches and and what people's hang up hangups are for why they don't believe and stuff like that. That's interesting to me. If it's not interesting to me, I have no interest, you know.

SPEAKER_01 11:47

And uh so Yeah, I mean I think the like I said, there's a lot of people who go into the trades who I think are in that experience where school is not interesting for them. School's not interesting for a lot of people, but education can take shape in multiple different ways. And you know, in my opinion, the best education is through a experience. Um and I think that's just the value of the trade. It's like you you get the best education on how to do it and how to succeed through the experience of actually just doing it. But let's dive back into the actual business. Um let's talk about your first sort of days at a DT roofing. So you came in with the focus on sales and marketing. The partner had experience on the actual roofing side of it. Talk to me about kind of the scale that DT roofing was at when you entered. Um, and then what were some of the things that you came in? If you could kind of boil it down to maybe two to three levers that you were pulling to really make an impact. Where was your focus on? Um, and then how I guess it's where was the scale when you came in? What were the levers that you pulled uh to get to the scale where you're at today?

SPEAKER_00 12:55

So when I came on board, the company was established. It was a great platform to build upon. It was just more like it was less about it was less a business and more a paycheck for the few employees that were there, including my partner, my now partner. Um, and that's how the business was kind of run. And that's not an indictment on my partner, it's just how he knew how to run things, you know, at the time. Um, the company was more reactive than proactive when it came to finding opportunity in business, which was why the the highest that they had ever achieved uh in revenue from 09 to 16 when I came on was uh uh just under$2 million. Uh in the roofing world, if you're established, you should be able to, you know, do well in excess of four to five million, you know, pretty easily if you're if you have systems and processes in place, if you're taking sales and marketing seriously, or at least have somebody on staff that understands it. And that's where I feel my partner didn't have. And so when I came along, I knew nothing about roofs, I knew nothing about I couldn't, I didn't know what a gable was or a ridge or a ridge van or any of the terminology. I just understood sales, I understood business, I understood need fulfillment and being proactive instead of reactive. And I had learned all that in my prior career. So it, you know, it goes to show how much wisdom or or knowledge is transferred in between industries, you know, oftentimes. Um and so my approach was less about uh what is traditionally used today in roofing, like door knocking and and what have you. I didn't or I didn't know anything about that concept. The only time I had ever knocked in my entire life was when I was uh 12 or 14 and I needed some cash, so I'd knocked all my neighbors to see if I can cut their grass, you know. Um and so it really didn't it it didn't take a lot to move the needle when it came on board because he kind of had a clean slate for me to work upon. He already had the the the talent and understanding of how to install a roof properly, and so it was just now let's get the word out. That's essentially what we did. And so um, through through my own sales efforts as well as our marketing efforts, we were able to uh grow the revenue in the first year under my leadership to 3.7 million. And uh that of course told us that we were in the right path. And so we started to put more and more systems and processes in place, technology in place, because you know, most of this was run off of spreadsheets and in you know um rudimentary approaches. Um and so we started putting in CRMs that were consistent with our industry and started to hire salespeople and put in sales processes, and you know, one of the things that we changed early on was I noticed that when my now partner would pay commission, it would be just like it would, I think it was 50-50 if it was self-generated and 60-40 if it was company generated. And I asked him um one day, I said, is there a reason why you're not covering your overhead in your in your commission structure? And he he's like, Well, what do you mean? And I said, Well, when you say 50-50, you're giving 50% of the profit to the salesman, and then you and then the company's keeping 50%. But what about all the costs associated with the business to begin with? So, really what you're getting is 50 to them and like maybe 25, maybe 30 to you to the company, because there's overhead. And so we started that kind of shifted on how we started commissioning, where we would put a overhead cost in on every job first, and then it would be 50-50 in whatever the you know the other one was. And we started to find that our cash flow started to increase, which allowed us to then put more marketing. I still remember the meeting with our four salesmen at the time saying, guys, we're gonna add this overhead fee to every job, but it's gonna allow us more cash to be able to then market to advertise more, and then that will drive more leads and more company uh notoriety, and and we'll be able to grow that way. And so, of course, the faces in the room were kind of like, Oh, you're taking my money, great, thank you. But none all of them, I think all of them are still with us today, and um they are they're all with us today, and I don't think they would have complained at all about where we've come and and their success. So um, so yeah, that's those are some of the early things that we changed that allowed us to grow pretty rapidly. Our second year under my my leadership, we did 5.8, I believe. And that's when I asked for equity. Um, it was at that point that I decided, listen, I already spent like 20-something years helping this other company grow only to, you know, not have a job at the end of it, and I wasn't gonna do that again. And so um my partner agreed, and yeah, we've since from DT Roofing, we grew four other companies and uh been pretty successful doing so.

SPEAKER_01 18:23

So I'm I have a specific client in the back of my head, and he's been on this podcast, and I'm I'm trying to I'm basically trying to pull advice for his business and all the other people that like his business. It's a residential roofing company primarily. He seller financed and purchased his uncle's business, where it sounds like a similar setup where it's all on paper, not a lot of good processes. And would you say because when you come into a business like that, there's kind of two ways to approach it there's hey, let's focus on marketing and increasing the sales, or let's focus on the operations and the systems. And based on what you said, it sounds like the the first focus should be on the operations, the systems, making sure that those are dialed in because that will result in higher margins that then you can then pump into marketing. Is that a fair assessment of how you would prioritize what to focus on?

SPEAKER_00 19:15

Yeah, I would say that's a fair assessment. Uh for the car guys watching, uh, a perfect analogy would be, you know, I I have a I have a 2009 Nissan GTR, which guys that are car guys are gonna go, ooh, that's awesome. I bought that, I bought that used so I can beat it up and take it out on the track because I've always wanted one. But if I put that uh power plant, if I just have that engine and you know it's making 650 horsepower or whatever, but I don't have a good frame to bolt it down to, it's useless to me. It makes a lot of noise in my garage and it does nothing. So you have to start with the framework first. And once you have your framework built, then you start pumping up the horsepower, right? The sales team, the marketing, you know. So your framework in this technology is the systems and processes. So what he had was he had a business that was more like a paycheck, like I was saying, because there's a difference. You know, if you have a and this the there's nothing wrong with that model for some, there's a lot of landscaping companies run on that model. Like I'm the owner, I'm an owner operator, I have a couple of guys that work for me. And so I my paycheck is living off the profit of the business. That's normal, you know. But if we wanted to scale, if we wanted to grow, that wasn't gonna work out. And so, um, so it worked out good for the size that he was. But then if you know, when I started talking with him, like, where do you want to go with this? Where do what do you want to do? Do you want to just pay your bills or do you want to, you know, send all of our kids to college and and create a legacy? And so obviously we chose the latter. And so I was like, all right, we'll gotta make some changes then because this isn't we can't sustain the growth that we're trying to reach with the way that the with it's grown right now. So, anyhow. Um so yeah, I would say absolutely systems and processes need to be put in place. If you don't know where to even start, then get yourself a good coach that can help you. Um, but yeah, that's that's where you'd start.

SPEAKER_01 21:16

Awesome. So I'm gonna take one little one little caveat. One little caveat. Absolutely.

SPEAKER_00 21:21

Don't upset the current sales you have coming in to do that. What that means for the entrepreneur or for the owner is you're gonna be working a lot of late hours to make that framework get all put in place while allowing the daily operation to still continue. Because what you don't want is you had sales and then you tried to interrupt the business by by setting it up for success for scale, and you did this, you know, and and you lost a bunch of people. So you have to maintain the status quo while you're building that, and then much like a uh an engineer does with a train that's coming, they want to change the tracks, then when everything's in place, then you kind of and now the trains. Starts to go down this path instead, and now you have you know trade and stuff. So don't upset the Apple cart just to provide that framework.

SPEAKER_01 22:09

Right. Okay. So you mentioned an another podcast, and this is just I wanna well, we won't spend too much time on this question, but you said I think it was about nine months ago. You said within 24 to 36 months that the companies, roofing companies who are heavily focused on the insurance-based sales are gonna have to start switching towards more retail relationships because of the increase in deductibles. And I'm curious how you've seen that play because that was nine months ago. So nine months today, has that continued to play out the way you expected it to? And you just provide a little bit of insight onto what you meant by that originally.

SPEAKER_00 22:46

It it has and is and will continue. Um and it's it comes down to one fundamental thing. It doesn't mean necessarily that insurance companies are gonna stop insuring homes, though that is a theory that some have come up with. That or that insurance companies are gonna stop insuring roofs, not homes, but roofs, um, that they're gonna make that a um, you know, a section on the policy that says that we're not insuring the roof. Um, but what it does mean, what's what is happening is um I'm sorry, deductible percentages are increasing. And so if you don't start running your business like a retail business now and putting in the the building blocks, the fundamental building blocks for a retail, this goes back to my analogy a moment ago. It's like, I'm not gonna upset the way the business is running now, but in the background, I'm putting in the framework and the structure to allow for this to be a retail business eventually. Because if insurance companies just say, we're not meant, we're not gonna cover roofs anymore, well, guess what? Storms are still gonna happen, leak roofs are still gonna leak, and somebody's gonna still need to be there to fix them. So if we don't set ourselves up for success now, and that includes offering financing, you know, most roofing companies, uh, when they are living in a storm market, financing is an afterthought because they're like, well, the insurance company is paying for the roof. The customer just has to pay for their deductible. Well, that was great when a deductible is a thousand bucks. Hopefully, people have a rainy day fund where they can pull a thousand bucks out, pay the deductible, insurance company pays the difference, and everyone's happy. But when there's three and four and five percent deductibles happening, now it's$7,500,$10,000 uh for your deductible. You have to have financing in place to help that customer make that happen. Otherwise, you're not gonna be the company they choose. By having financing in place, you're already setting your structure up for a retail business because retail companies that are listening to this know you're not gonna be successful if you don't offer financing, you know, because most people are not gonna be cash pay, just reality. Even if they have the money, they'd rather pay it out over time and keep their cash liquid than to uh you know lick, you know, liquid completely remove all their cash from their uh uh from their reserves. So so I I I still agree with that, and we are building our business around that model that eventually we may gear towards the fact that this is going to be a retail market, which I really believe is the reason why private equity got so heavy into roofing, because they realize they they much prefer uh much more prefer a retail model over an insurance model, um, and which is the reason why there's not a lot of a whole lot of roofing companies in storm markets that are being gobbled up. It's if you look at the trending, it's on the East Coast and West Coast, where they don't have a whole lot of um, you know, really bad like hail storms and stuff. Yeah, they'll have wind and what have you, but uh even in those markets, they're focused heavily retail. Like that's how they sell it is retail. Yeah, you got insurance from your company, insurance company, great. Well, here's my estimate. This is what it's gonna take to do it right. I don't know if they paid enough. I'm happy to look that over if you want and tell you where they might have, you know, missed some things so you can go back to them and ask for more money, but this is what our price is to do it. That's what you're seeing in a lot of markets right now, and where I think the market, the overall roofing industry will go eventually.

SPEAKER_01 26:17

I could ask you a million questions, but we only have a limited time. So let's start getting into the other businesses that came out of this venture. Could you just kind of walk me through the timeline, just an overview of how each one came to life, and so we can get an understanding of the full sort of portfolio?

SPEAKER_00 26:34

Well, I think it's important when you try to there's a couple of things we can unpack there. One, there was an intentional reason why our companies are individual companies and not DT roofing, construction, garage doors, gutters, and you know, fried chicken and oil change. It because we wanted to make sure that we were good at what we were trying to offer. And oftentimes when you try to pack too many services under one umbrella, um, a couple of things happen. One, you think that you're impressing your customer base by all the things you can do. And really, what the customer base is saying, seeing is this guy really isn't good at any one thing. He just tries to be the jack of everything, right? And so, and it's also not helpful when it comes to you trying to market your services. Because if I'm doing siding, I've used this analogy before. If I'm doing siding as part of all the services, it's very difficult to market that in SEO and everything when you're going against Al's siding, right? Because most homeowners are gonna go, I'm going with the Al siding dude. That's all Al does. He sleeps, breathes, and eats siding. And this DT roofing siding construction, fried chicken and oil change, they're trying to do everything. And I don't know what they're good at. I don't even know if I had to have them change my oil. And I'm certainly not buying their fried chicken because I don't know what oil they cooked it in, you know. Um, and so there was an intentional uh approach, and when we did start new companies to make sure that we started them as individuals because they have their own separate, they have their separate PLs. We're able to go over and make sure they're actually profitable, and they're not draining the companies that are doing well, you know, the profit profit from those. So the first one was our construction company. We first did a it doesn't mean that you can't do a venture first. Like what we did is we were DT roofing and construction, right? And I know that's counter to what I just said, but hear me out. That was a that was a um test bed to see if we should be doing construction, but we had to let our customer base know that we offer construction. So so it was DT roofing and construction. We got about a year into doing some construction projects, made an extra million dollars in revenue and said, hey, there's a business here. So we immediately whacked off in construction from DT roofing and started Kingdom Builder Construction. And Kingdom Builder Construction, a DT company, was immediately successful. Why? Well, we cut partially because we put a DT company under its logo for the first several years so that people would understand who was behind that company, because otherwise we're just a startup in the area, right? So we we wanted to take advantage of the brand value that we had created with DT Roofing. And so that DT logo uh was um prominent, even though it wasn't called DT construction. Um, and so that company over the years has done um, you know, it progressively well or better better. Um last year it it closed about 10 million in revenue and it continues to grow. Um, but we just now started focusing on building homes from the ground up. So most of our projects were remodels, additions, patios, pergolas. Why? Well, because part of our strategy for opening new companies has always been we're not just going to go out there and blindly open up a business or a service. We're looking for services that are underserved or poorly served in our area because we don't get into anything unless we can dominate. And so in this, in that particular, in this particular area, most of the builders just did ground up construction. They didn't want anything to do with, you know, scabbing on a room onto a house or you know, remodeling a 1977 house to make it feel feel like a 2026 house. They didn't want anything to do with it. And so oftentimes they would even send their customers to us. You know, they built a home for a customer eight years ago, customer wants to, you know, add something on, they're like, well, we don't do that, but call Kingdom Miller construction, they do that. So we started getting you know referrals that way. Um, with the garage door company, uh Patriot, that's actually the hoodie I'm wearing today. Um it was a matter of DT roofing. Every time hell uh come you know falls, the roofs are damaged, but also accessories on the house are damaged as well, gutters, uh garage doors. And we really didn't have any good choices in our area to serve our customer base. And what we've what we found was the customer would always have a great experience with the roofing side, but as soon as we had to send our garage door contractor out to do the garage door part, we'd get complaints from the customers about how the guy showed up looking like he just rolled out of bed, looking disheveled. He was really rude, he's smoking on the job, doing all this stuff. And we're like, that's not our way, that's not the way we do it, but we couldn't control it because they weren't our company. And so finally we decided we had uh um, you know, somebody locally that understood the garage door and service world. So he had the knowledge, we had the capital and the customer base. So we just decided to partner with him and start our Patriot Garage Door and Service. And uh within its first year, it was very successful. It did a million its first year, two million its second, and now it steadily does between three and three and a half million a year. Um, in fact, they just won a project. Tiger Woods is building a neighborhood by us that has a golf car golf course as its uh focal point, 600 homes. And we won the uh garage doors for all 600 homes. It'd be a three million dollar project over three years. So super excited about that, and that and our team over there. Um, we're trying to do the same thing with our gutter company as well with that project. But um so so again, it came out of necessity. That service was being poorly served in our area, so we felt like the way we run our businesses, we could probably dominate. Well, um, and then we created guardian seamless gutters, same situation. We'd have complaints out of our control on portions of the project that weren't our comp were not our company. And so over time, it was just okay, well, I guess if we can't rely on these contractors to do it uh, you know, professionally, then we'll do it ourselves. And we created uh uh Guardian Seamless Gutters and and for the last several years, in fact, every year that these companies have been in business, they have been voted the best of Hood County. Hood County is where our seat is, where our headquarters is. They've been voted best of Hood County in their categories because the citizens, you know, love our love those companies, you know. So um, and uh yeah, so each one was built, in our opinion, out of necessity to continue to serve our customers well and have and have just an absolute stellar experience by the end of the whole project being completed.

SPEAKER_01 33:24

Yeah. There was an interesting thing that you mentioned as well, the value of having these separate entities is that your competitors end up becoming your your referral partners or even sometimes your customers on that. Whereas if everything was you know looped into roofing, yeah, the competitive roofing company is not going to refer a client to another company.

SPEAKER_00 33:45

That's right. Like I have a great competitor locally that um he buys he he also does construction and he buys his garage doors from us. But if it was under DT roofing, you know, garage door or whatever, he wouldn't because he has a roofing company too. And uh so it wouldn't make sense. Uh conversely, for a while we were using he had a uh uh roll roll-off uh dump trailer or dump dumpsters. Um, we'd used his on our construction jobs when we were doing remodels and stuff. So it was reciprocation. You know, we were we were doing business with him, he was doing business with us, and the customers ultimately got served well because of it. So um, yeah. The other side of it on the insurance side is when you do have a roofing company who has sister companies in other trades that pertain to an insurance claim. Well, when you are the company that does everything, it's very difficult to request overhead and profit from the insurance company, right? But when you are able to provide individual estimates from the garage door company, from the gutter company, showing that what they paid was incorrect, whatever, and you ask for overhead and profit, both that trade gets paid properly through the insurance company and the roofing company gets paid overhead and profit for dealing with that trade. And so it increases the profit margin for the jobs as well because they are separate businesses and they're not all lumped under one.

SPEAKER_01 35:13

That's fascinating. What are some of the challenges that come with that? I mean, you have like just specifically for you, as you start to add this on, obviously it's like it just gets more and more complicated. What are two to three of the biggest you know headaches that come with scaling and adding new services on? And then how do you specifically overcome them?

SPEAKER_00 35:34

Well, anytime you're dealing with human beings, especially 84 of them, you're gonna have 84 personalities. So you know, that always plays a part, regardless of how solid our culture is, you're still dealing with individuals um and different personalities. So that obviously is a variable. Um, obviously, as we grew, we had to deal with things like, well, we're gonna need an HR department, we're gonna need to start offering benefits because you know, people don't want to come work for you if you don't have you know 401k and you know, you know, uh medical and what have you. So we started having to look into that. So as we scaled, those were some of the growing pains that came with it, um, which is a good problem to have. But I love the fact that we can not only provide a 401k for our staff, but we have a match, you know, on it, you know, that that blesses them, it helps them grow into their uh retirement future. And so um, but it does come with a lot of gray hair. So I mean you could see this, you know. So uh, you know, I'm 49 and uh last night I you know I'm going through this whole body transformation thing right now where I'm you know uh trying to lose some weight, trying to put some muscle back on. Because I used to be a firefighter, and uh when I was a fireman for 17 years, I was I was in better shape, way better shape than I am now. And uh, you know, so I'm going through that uh right now and trying to make sure that I can I can uh my body age last night on a on a device I was using said I was 69. And I was like, oof, yep, gotta gotta make this right.

SPEAKER_01 37:11

So that's a that that's a wake-up call. Those devices are good for that. Yeah, slapping you in the face a little bit. Well, I mean, there's a mil, like I said, there's a million different ways we could go, but I think we got a lot of great stories, important lessons. We'll just close out with you know, if you could give one piece of advice to the other trades business owners out there, especially the small to medium ones who are, you know, maybe they're a few use few years in, they're where DT roofing was when you joined. What would that advice be to them?

SPEAKER_00 37:40

Well, real quick before I do that, there was a part that you had brought up prior to us getting in on in the backstage that I think is a really important part for the roofing side, and that is separating residential from commercial.

SPEAKER_01 37:51

Yes, yes.

SPEAKER_00 37:52

Yeah, the reason why we did that is because they are although they have roofing in their name, they are in two entirely different businesses. And much like the reason why we separated construction from roofing and garage doors from roofing is you don't know you're good at something until you completely separate them and figure out based on the PL. And so we wanted to make sure that if we were going to provide commercial services, that it was gonna be a profitable venture. And so we started that about between 18 and 24 months ago, and it has been very successful. But the way that I pay the salespeople, the way that we pay our staff and everything is entirely different than the way we can on the residential side because of the time that it takes jobs, you know, the sales cycle and what have you is way longer on on commercial projects than it is on residential. And so if you try to pay salesmen on the or salespeople on the commercial side, the way that you pay residential, you're gonna run into a slew of problems. And so that's that's one. I mean, that kind of goes into a piece of advice, but overall, um, if it were to give home service companies a piece of advice, don't try to grow too quickly. Um, I like to say wear as many hats as you can until you can afford not to. You know, too many people make their first million bucks and then they hire a bunch of salaries, their overhead goes through the roof, and then they have a down season, and then they find themselves having to fire a bunch of people. And that cyclical uh approach isn't conducive to uh keeping your hair from turning this color. Um, and so and it it's just not goodwill for the people that you hired either. You know, every person that I hire, I want to retire here, you know, ultimately. And so if you think of it from that mindset, then you know, wear that hat until you can afford not to. And uh yeah, and then uh if you're a company that's been in business for at least three years, join the good contractors list. You knew that was coming.

SPEAKER_01 39:53

I knew that was coming. We'll finish with the final call to action here. Go ahead and get hit them with a quick explanation of what that is and where they can find you.

SPEAKER_00 40:01

So I can tell you I didn't need a sixth job, but last year when the good contractors list, who's been established since 2011 in the DFW market, reached out to me and asked if I would come on board as their COO and take the company nationwide, I absolutely jumped at the opportunity because my companies have been on the good contractors list since 2019. And what the good contractors list is, it's a a company that if you meet the requirements of the good contractors list, um we back every single job that you do with a$25,000 guarantee. What that does for you as a contractor is that gives your customer peace of mind at the point of sale. When you're trying to up, you know, sell the customer on your company, instead of just using the traditional tactics of this is how many reviews we have, how long we've been in business, all the certifications you have, which sounds exactly like the last two guys they had at their house, mentioning that a third party has vetted your company and is backing every single job you do with a$25,000 guarantee is a lot different than a company who's just giving you a grade, right? Because if I have an A plus rating, that's excellent. But what does that do for the homeowner when I walk off the job with an$8,000 deposit? Or if I don't do the job correctly, or if I don't follow the the contract to a T. What the good contractors list does is we come in behind a contractor who we thought was a good guy, who it turned out to be a bad guy, and we make it right on behalf of the homeowner. And it doesn't cost the homeowner a penny, and it's very affordable for the contractor. And so it's a closing tool to win more business, and it is exploding throughout the nation.

SPEAKER_01 41:39

Amazing. If you are a homeowner or a contractor, uh go check it out. Randy, thank you so much for coming on.

SPEAKER_00 41:45

That's thegoodcontractorslist.com. Thanks for having me.