EP: 230 Michael Katz & David Katz w/ Trio Heating and Air - From Small Beginnings to Big Dreams: Our Journey to Becoming a National Leader

🚀 Exciting New Episode Alert: "David & Michael Katz" on HVAC Revealed🚀

We recently had the pleasure of sitting down with David and Michael Katz on our latest podcast episode. From their inspiring journey into the HVAC industry to the invaluable insights they’ve gathered along the way, this episode is packed with actionable strategies and wisdom for HVAC business leaders.

🔑Key Takeaways for Your Business:

1. Transformative Growth Strategies:

- David and Michael Katz shared how they grew their HVAC business by 56% during a challenging period through proactive strategies, creative marketing, and building strong partnerships.

2. Consistency & Customer Experience:

- Michael emphasizes the need for consistent advertising and strategic marketing efforts, coupled with a strong focus on providing excellent customer experiences. Success isn’t just about big budgets but creating true value for clients.

3. Risk Management & Decision-Making:

- Running a business is akin to an ongoing heart attack, as Michael put it. It’s about being quick to act on issues, constantly problem-solving, and most importantly, building trust and consulting with your team to navigate risks effectively.

Join us for this engaging episode where we dive deep into their incredible journey and the practical approaches that have led to their success.

🎧 Listen to the full episode now and gear up to take your HVAC business to the next level! 

#HVACRevealed #HVACIndustry #GrowthStrategies #CustomerExperience #BusinessInsights #PodcastEpisode #MichaelKatz #DavidKatz #BusinessGrowth



Find Michael & David:

On The Web: trioheatingandair.com
Via Email: contact@trioheatingandair.com
Instagram: instagram.com/trioheatingandair
Facebook: facebook.com/TrioHeatingandAir



Join Our Group: https://www.facebook.com/groups/hvacrevealed
Presented By On Purpose Media: https://www.onpurposemedia.ca/
For HVAC Internet Marketing reach out to us at info@onpurposemedia.ca or 888-428-0662

Sponsored By: 

Chiirp: https://chiirp.com/hssr
Elite Call: https://elitecall.net
Service World Expo: https://www.serviceworldexpo.com/
On Purpose Media: https://onpurposemedia.ca

Transcript

Michael Katz: 0:01

A business is an ongoing heart attack. It never stops. Every day there's something else happening. So you just got to be quick enough to, to act on it and share with your people and trust them, have them trust you, build it and they'll be there for you to support you in those times.

Evan Hoffman: 0:16

Hey, welcome back to another episode of HVAC Success Secrets Revealed with Thaddeus and Evan. We have good conversations with good people and any good conversation worth having. Cheers, my friend.

Thaddeus Tondu: 0:26

Cheers, buddy.

Evan Hoffman: 0:27

Super excited for today's episode. These are two guys that are running an incredible business out in San Francisco. We got David and Michael Katz they are brothers and they started the business in 2021 asking, getting asked if they could do some odd jobs around COVID and things like that. And so they started the business from that, but they took an approach of they were sales guys. And so they focused heavily on sales first, service second, and they have grown rapidly. In the three years that they've been in business now they're pacing 12 million this year. So hitting eight figures, they're doing an incredible job and not in a market where you would typically expect an HVAC company to just be thriving. This isn't Vegas. This isn't Phoenix. We're talking about San Francisco, the Bay area where you've got climate that is relatively mild and so there's a lot of demand that you've got to create when you're in a market like that. So I'm super excited to dive into that conversation. They were featured with Service Titan and Ari had them come up on stage at Pantheon, getting to, to chat with them in terms of their rapid growth and so they've been recognized on the national stage before. We wanted to have them on the show. They said that they are longtime listeners of the show and they even brush their teeth while watching this show. Always want to reward our loyal listeners and bring them onto the show, have some great conversations, shoot the shit and pick apart what it is that they've done right and what They would have wished they did a little bit differently.

Thaddeus Tondu: 1:52

I like that part of what they wish they would have done a little bit differently. But I know one thing we briefly chatted about before we got going was, what's holding people back and unpacking that part of things cause there's knowledge is everywhere and if everybody that has an internet connection should have the knowledge, but it's actually implementation of that. And so I'm excited to unpack that because they've been on a rapid growth of success lately. But of course today's show would not be possible without our sponsors. And in no particular order, Elite Call Chiirp Service World Expo and On Purpose Media. So join us for the most magical contractor experience at Service World Expo in Orlando, Florida from October 15th to 17th. Enjoy keynotes, breakout sessions, four hour workshops, social mixers, and exhibit hall with industry leading products and podcasts like ours. We'll be there. See you there. A network with other residential contractors near from some amazing keynotes, all designed to help contractors like you elevate your business. Register now and use promo code secrets 100 for a hundred dollars off at visit serviceworldexpo.com to register today and we'll see you there.

Evan Hoffman: 2:47

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Thaddeus Tondu: 3:13

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Evan Hoffman: 3:40

I love it. And when it comes to new customers, you need to enhance your online presence. And you can do that with On Purpose Media, your go to home service marketing experts for everything web design, SEO, PPC. They take care of your stunning, we take care of your stunning websites built to convert visitors into phone calls. Because a beautiful website without phone calls is a wasted opportunity. And of course, if you've got a beautiful website but no one can find it, that's a wasted opportunity too. Which is where the SEO and the PPC comes in. And we take care of all of that. Minimizing wasted ad spend. It's a huge push for us right now is making sure that every ad dollar is being used towards driving results into your business. So let us turn your online presence into a lead generating powerhouse. Visit onpurposemedia.ca to start your digital transformation today. Welcome guys. Thank you. Awesome. Why don't we start off with your journey? How did you get here? Journey into the trades? How did you find it? And then why did you eventually start your business?

David Katz: 4:39

I know Mike loves telling this story, so go for it.

Michael Katz: 4:41

Yeah, I already jumped. No, I was actually gonna say thank you guys for Evan and Thad for having us on the show. We're definitely big listeners to it and I do brush my teeth to it. That's not even a basically, it all started when David and I moved to the U S from Israel. It was like about eight years ago now. And mainly we just didn't necessarily, we're salespeople all of our lives, but we moved in here and We were looking for something that we won't necessarily have a cap to how much we can make. We're very driven, very ambitious, we wanted to do a lot, so we got into the installation industry, attics, crawl spaces here in the Bay area, and we got pretty good at it. David was actually one of the top sales guys in the company. And I started out actually being the worst sales guy in the company. I was actually about to be fired. And the manager gave me two weeks to give him a very unbelievable number, which was his way of saying you're going to go. And that was the time I went to David and told him like, what am I going to do? I can't sell. It's not my thing. I don't like to sell something to people, something they don't need. And he basically told me, just go in and give them good customer service and try to look out for their best interest. And a few months after that, I broke company record and after that, we just started breaking each other's record, became managers and competing companies and everything was awesome. It was really great. And for people to get the perspective, and this is part of the thing that I always want to do to really get people to understand that. HVAC industry and the trades in general is really a hidden gem. There are so many opportunities for growth and career and people are always looking at, doctor, lawyer, all these, or tech, we're in the Bay Area. So every second person here is working at the tech company making, I don't know how much, these crazy amounts of money, but in the Bay Area, in the HVAC industry, you have that too. So basically with us, in the trade, we were young 22 year old making 20, 000, 30, 000 a month, which, definitely affects the young kid. So we were able to, make some investments. We weren't necessarily, you know, really, done with our money, but we made some investment and we've done a bunch of different things and a real estate, open a restaurant, literally whatever. I remember there was this one year David came to, it was like, we got to do some investment. We just did five different investment at the same time, which was. the worst thing you could possibly ever do. But that's what we always do. We always like over, overdo it and then fix it as we go along. But anyways, everything was perfect, but it was very very boring to us on one side. And on the other hand, there was this one, one night that really brought the business about, because we were always thinking about opening a business. But, what's the point? I'm making 20, 30 a month. I'm working. At that point, it was like three days a week for four hours a day. That's how good we got at our craft and what we were doing. And it's hard to move away from it. But there was this one day we were sitting in San Francisco, we rented an apartment. And I was just watching the TV and, David walks by out of nowhere, like no, just out of nowhere. What are you going to do if you break your leg tomorrow? And I was like, I don't know what do you mean? He's if you're going to break tomorrow, like for money, what are you going to do? You're not going to drive to your leads, right? And I said I don't know. And he just took off. He just left me with that. And I ruined my show. I'm there for 15 minutes. I'm like, fuck, what am I going to do now? And I got to figure it out. I go to the bathroom, I come back out and I tell him, let's open a business. And he says, okay, cool. What do you want to do? And I say, we'll just do whatever is like the easiest thing. And we had a friend that just opened a duck cleaning business at that time. And, if you know the guy, I love the guy to death, but he's a very, He's a very lazy person. He likes to keep things very like simple. He doesn't like headaches. I was like, if he can do it, dude, I'm sure we can do it. And that's what we did. Later that day we opened the business. The website was live. I came up with the name Pacific Air, which was the previous name to Trio. And that's it. We were just doing a little bit of side jobs. And the real transition to HVAC took place later because that was a side hustle. It had. A guy in a van, and pretty much he was just driving to do jobs, and I was just on the phone, running the whole thing. There wasn't any, there wasn't any overhead, there wasn't anything. It was just a truck on a lease, and that's it. And what happened was, basically, right before COVID time, my cousin down in LA, he started telling me about heating and air conditioning. He said, you really got to get into HVAC. There's, the margins are amazing, you really have to do it. And I kept hearing it over and over again. And it wasn't until, COVID that came in and everything just blew out of proportion. Private equities were just buying companies all over the place. There was this massive growth. And there was this one video that he showed me that really got me into the trades. I can say it was, he told me he was down in LA. So NextGen was one of the biggest companies over there. At the time there was a big hype about it. And he sent me a video. He's take a look at this company, see what this guy's doing. And I looked at the video and I looked at the billboards and I'm seeing online and I'm like, who is this guy? What, how did he get there? What is he doing? And I started researching a little bit about, heating and air conditioning. And it was funny because this is how everything became together. It was a crazy story. Another friend of mine bought me a book, an audio book years ago. It was Home Service Millionaire by Tommy Mello. I was not like, Yeah, and I didn't understand anything about HVAC. I didn't know anything about the trades. So I was listening to the book. I almost finished it. I had two hours left out of eight hours, I think. But I didn't understand what a KPI was, what a P& L was what does it mean, the marketing span and SEO and all these things. I didn't understand it. And literally a month after I'm watching the Ishmael video, I'm seeing a podcast going live. For some reason, it jumped on my YouTube page. As a recommendation and it was Tommy Mello and Ishmael, both of them, talking about how he grew the business at 30 million. And that same day I went to David and I said, we're going into HVAC. Here's what we're going to do. I'm going to take out HVAC leads. I don't know what the hell I'm doing. I'm going to run those leads. I'll get some subcontractors. They'll do the job. We'll see how it goes. And I just went out for six months. Sold furnaces and ACs. Didn't even know how to open a thermostat. I was scared I'm gonna get shocked or something and I was just selling the jobs and every time the contractors the subcontractors would go do it I would just sit with them and ask them questions. But the problem is also that took a while because they're scamming You know, unfortunately, and these subcontractors that are not well established, they do some shady stuff sometimes. And I didn't learn necessarily the best way of doing HVAC. So it was a lot of, it was a lot of, trial and error until in 2021, July, we decided to really do it in house to do it right. We saw the wrong way of doing it. We wanted to do it the right way. So we did our first HVAC job, 2021. And yeah, from there, everything's just skyrocketed. And, here we are facing 1250 million this year.

David Katz: 11:11

It was such a crazy thing to do. Like when he came to me and said we're going into HVAC and I was like, I don't know what are you talking about? We know nothing about this trade. Like, why would we, like, why would you start a business knowing nothing, absolutely nothing about what you're doing? And as we went into this, we saw, First of all, the community of this industry is just so incredible. Like the people in the industry, the supply houses that you're going to, the customer technical support in the industry, just the people that work in this industry gives such a warm feeling of family like industry, and you go out and ask for help and people jump in and help you out, like to figure things out. And we realized, oh my God, there's a whole world. Here that we weren't even aware of like we've never felt this in either in any anything that we've done before not in the restaurant, not in real estate, not even in installation. And we've been working in, for years, doing this kind of things and. You got this warm feeling of I think I found my place. I think this is it. I think this is what I want to do. And I feel extremely lucky, extremely blessed to be in this industry. And we had to learn fast. I have so much respect for the people in this industry. It's such a hard job. And we knew we need to catch up. We started the first was July 2021. So exactly three years. We're looking at, right? And dude, Mike and I were just sitting, studying non stop, just sitting, watching people work on the jobs and understanding what they're doing, asking questions, watching YouTube videos. Through the middle of the night, like I would find myself just watching YouTube videos, just trying to understand things so I can catch up with these people so I can have, the terminology. And yeah, super blessed, super lucky to be, in this trade.

Thaddeus Tondu: 12:47

I love the humility part of it too. But I think that the part that I really like is that you said, Hey, let's start a business. And you bought the domain and basically launched the website within 24 hours. You're like, fuck it. I'm not going to wait. Done is better than perfect. And you're like, we'll figure it out along the way. And we can get into the what's holding people back because of that that I think, people say, I wanna start a business, and they talk about it and then they talk about it, and then they talk about it and all of a sudden it's five years. They still haven't started their business. So what is it that you, and either one of you guys can answer this, but what is it that you find is that thing that holds people back from actually going forward and just doing it?

David Katz: 13:22

I had a conversation with someone earlier today. One of our employees, I love this guy been with us since the very beginning, since we were like three or four three or four people in the company and it's going through some, through a hard time. So I decided, I'm so disconnected from the field now that I want to, proactively take these steps and kind of connect with my team. So I thought it was a bit down today. I took him, we just got into my car and told him, Hey, before you start your day, let's just take a ride. Let's just drive together. And I started asking him questions about how things are going for him and he's going through some pretty hard time and one of the biggest worries that, he shared with me and a lot of people are sharing the same issues when they're trying to plan their next steps in life is, yeah, but what if I lose everything I worked for? What if I lose everything I've worked for and I feel like this is such a common fear that I've seen You know with people are around me in my life since a very young age Like literally I've been trying to help my friends in everything friends and family in everything that they needed help with and You know the sad thing about it a lot of people are not even accepting help like they're not even accepting it, right? But it's mainly the fear. So I asked the question It's a very simple question. What is it that you're going to lose exactly? Like how much do you have? What is it that you're going to lose? Okay, let's say you have whatever 15, 000 in your bank account right now or you have this thing that you've been working on this thing. Like what is it? Are you losing a 10 million company right now? What are you losing that you can't come back from? What is it? Is it the life or death situations? I think that people just really take decision making a bit too seriously. As if, they're going to make the decision and they're doomed. Oh my God, I can't come back from this, right? This is it. If I make the decision and I'm wrong, like the, what if, right? What if, and what if, and what if, and what if? I was like, guys, listen, I promise you, make the decision If this wasn't the right one, you're going to find out and you can recover it from it pretty quickly. Like you're not losing 500, 000, right? It's 10, 000. It's 5, 000. It's 2, 000. Whatever it is. And I know people worked very hard for it. But the next question I asked them, if you do lose say half of it or whatever it is that you're risking that you're putting on the line here, how would it change your day to day? Like how would it impact your life? And it's funny because some, like majority of the time, the answer, it's not going to impact my life. I'm going to continue to live my day to day exactly the same way I'm living it right now, whether I have five or 10. So it's okay, if it's really impacting your life, if it's taking, presents, under the Christmas tree from your kids, that's a different story, right? Yeah, let's take it, let's take it in consideration. But most of the time, that's not the case. So I think just putting things in proportion, not every decision is a life or death situation, right? Not every step you're gonna make is a life or death situation. Just, you gotta give it a try. Yeah that's pretty much it.

Michael Katz: 16:10

I think, another thing that I'm noticing as a pattern, because it's funny, a lot of the people that, friends and people that we work with, maybe they see a post online, or maybe they heard from someone, or maybe they saw the wrapped vehicles, and they shoot me a text hey, I haven't talked to you in a while, how's everything going? And I always invite them to a shop tour and they take a look at it and they start texting me questions. How does this work? How should I do this? What's the best app? Should I do this? Should I do that? Do you know, should I start with a, this guy I found on Facebook for marketing or should I go with the established agency? So

Thaddeus Tondu: 16:39

On Purpose Media sorry.

Michael Katz: 16:42

That's right. That's right. They go about it as a grocery list, people think that opening a business is like a grocery list. So you're going to go and okay, so we need chairs and we need office space and we need this and we need a girl to do this and we need a shop guy and we need, and they started going through all these different lists when in reality. It's not really that, but and I understand it too, because they don't know what they don't know. So they're just basically grabbing what makes sense to them, right? They're taking pictures of office from their head, right? Pictures of office spaces they've seen or movies, and they start building it up. And it's actually not necessarily like that. In addition to that, they get really confused because they looked at a well established business. And sometimes they want to jump over their head or sometimes they see it as really far and they might hear about the struggle you're going through and they're thinking, Oh my God, what if that happens to me? What if something worse happens to me? So I can understand them before they even get a chance to, take a look at a ServiceTitan or Housecall Pro demo. They're already like, they have a million things running through their head. So I think we were blessed by, Not really aiming high in the beginning and just starting small because for the duct cleaning what I needed was an air duct cleaning machine and A van and that was it and as far as nowadays, we're talking like, years ago nowadays There's so many apps that came out there that you can literally open a business for free in a night there's a program and an AI that will do the website for you. There's, they'll make the logo for you. There's so many things out there. So I think probably the best recommendation I can give to anyone wanting to start a business is to not start a business, to start a side hustle and make it into a business when it makes sense, right? You take your side hustle, you make it your main hustle when it's time. But you really have to just start. Just put a guy, in a truck or go work for a company that's well established for a few months and figure out how they do it. And you really just need a website, a Yelp, Google page, And that's pretty much it. Even if you're, in the beginning, let me explain how wrong this was. Okay. You guys are probably going to feel this one.

Thaddeus Tondu: 18:41

I love when people have wrong things that they've done, that they've learned from.

Michael Katz: 18:45

Oh my God. So here's the thing. We've had the worst experience with marketing in the beginning. It was absolutely a nightmare. And we were actually paying this guy from a certain, I don't know, from a certain country to basically do the Google ads for us. And I'm like, I don't think this guy's doing anything, and money's just going away. So I told David, you know what, I'm going to do The worst part of it was I was doing better than that guy, but I didn't know how bad I was. Can you imagine a guy Like me just jumping on ads, Google, and just starting to budget and clicking numbers and Oh my God, Oh, we lost money. Okay I'll go make another sale. We'll figure it out. Thank God I was a sales guy. I could like, generate another sale tomorrow. And we're good because the overhead was like. It was the car, and we had money again. So we back in the time we saved up so much. We weren't that scared, but anyways, I think people should really understand. You need to start small. You need to just start with something small and you're not going to get all the answers, but you have to figure it out as you go along. You don't have to make a list and then start. You have to start, see what you're missing and then start adding it as you go. I think that makes more sense to me.

Evan Hoffman: 19:45

No, that's fantastic. And it's funny you mentioned the entrepreneur mindset of figuring, trying to sell your way out of any problem that you could possibly run into cause that's just a curse that we are all blessed with. I think anyone that gets into business has that. That mindset. It's just I'll figure it out and I'm just going to sell my way out of it.

Thaddeus Tondu: 20:02

And the reality the reality is that you don't need the polished office space to start. Think about the great companies that started in a garage, Amazon, Microsoft, big companies, good companies.

Evan Hoffman: 20:13

Trio. There you go.

Thaddeus Tondu: 20:14

Trio. And On Purpose Media. Going back to David's point there in terms of why there's inaction around starting or assessing risk and going through all of that. One of the, actually, I just talked about it earlier today too, with someone. I feel like a lot of times, and I'm guilty of this by the way. So this is not something that I'm pointing on anyone else. This is my own realization of myself is we create complexities in order to justify inaction. The more complex something is well, of course, I can't get started. Look at all these things that I have to do of course, I can't do that Instead of just chipping away at one thing at a time and looking at what is the most important thing that we need to do Right now we need to sell.

Michael Katz: 20:55

That's a hundred percent. This is something that I mentioned I used to have someone that was with us since the beginning and he always has a hard time to take action. I'm always noticing that it's a hard time for him to take action. But it was exactly like you were saying, he was making it so big that I had to break it down for him to levels that were just I'm actually shocked that we had to go down to these levels. But sometimes, every person and where they get this pattern and they're stuck with it and they just don't see the way out. But He gave me this, list of problems and I basically asked him, what's the most urgent thing? And he said, everything is urgent and I said, Oh, okay no, that's not true. So what is the most urgent thing? And you have to break it down, make them feel really comfortable so they can actually share with you or maybe something like what do you not know the most? What are you the most scared of? Maybe that's what it is but from there, you just have to really break it down. So what I told him is, you know what, we're not going to work on the problem. We're going to schedule a meeting to think about the problem. Then I'm going to schedule another meeting with you a week after that to talk about the problem. And then two weeks after that, or three weeks after that, we're going to start taking action and a month after that, we're going to start with it. I broke it down for him so for such a long period of time, but that was where his comfort was with how big the fear was. So because I did that, he actually came back to me earlier and started completing it sooner. So it's just a matter of where they're at. It's the same like you have to understand sometimes in your business, they do these personality assessments and every person has their own way to communicate. There's one person that you're going to go to ask them a question and they'll give you the answer. They'll just spit it out. There's another person you ask them the question, they feel like you're attacking them or they might feel like, you're putting them on the spot and they might get nervous. They might give you the wrong answer. But if you tell them, Hey, I'm going to come to you in about an hour, I'm going to ask you a question about this matter. Can you please have all the answers ready for it to make sure that we can, tackle it correctly. So you have to really understand people are in different comfort levels and people have different fears, but it is really important. You have to start small. It's like going to the gym tomorrow and just pumping, the most that you can and look the next day in the mirror and say, nah, see, it's too hard. I can't do it. You have to really start small and let it evolve from there.

Evan Hoffman: 23:06

Hundred percent. So with that thought, then something I'm curious on is, we talked about starting a business and taking that first step. Knowing what you know now and where you're at right now, how do you assess risk differently when there's so much more on the line? Like the amount of mouths is that you're feeding on a monthly basis within your organization, between your team members all of their families, all of their kids, everything. There's so much more that's on the line for you right now. How is the risk taking different and your risk tolerance different now versus when you start?

Michael Katz: 23:43

I think over time, so what a business does to you is really stretches you. That's probably the best way to explain it. Your problem solving gets better. Your ability to handle stress gets better. We have stress every day. When we're, you have to understand, it's like going into the water and you're trying to swim against current. We're always about growth, right? We want to grow and grow and there's a certain point that the market tells you there is no growth, there is no leads, there is no work and we're still growing like just now, beginning of 2024 was the hardest year in heating and air conditioning or in the trades for the last 20 years. And this is statistics from service tie in and a lot of like industry wide. And it's been the hardest year we've ever had too. We've never expected what, happened to us because we are responsible to families. In addition to that, there's a long term effect to the business by losing people if you can't provide them a full board every day. At the end of the day, they have mouths to feed. They got to figure out a way to make that. So I think it's really important to really understand that there's always going to be risks and over time you get better at these risks, but it depends on where exactly you want to go when you're calculating and thinking, where should I go with this? So we've made tons of mistakes and we do make mistakes every day and we have worked in companies that made mistakes too. I have companies not able to pay me payroll before. I've had companies that I oversold. And they weren't able to supply to the customer. So there I've experienced a lot of similarities and problems that we're facing here because running an operation is so difficult. There's so many small bits and pieces to it, especially when you're trying to grow really fast, your org chart changes consistently. Your processes change consistently. You implement the new app every Monday and Friday. So it's just really difficult. I think that when something happens, usually what we try to do is. We go back to our core values and culture, and we make sure to involve people in the problem. So the reason why we have DataCube over there on the wall is to make sure that people understand where the business is, people need to know where we're at, if we're, if we have calls, if we don't have calls, if we're profitable, if we're not profitable, and we share it with people and we say, Hey, here's the problem that we have right now, here are our options. What do you think we should do? And we consult with our management team. We really, ask them, what do you think? We've done probably. The stupidest thing we could have ever done in our lives. Going back into, I knew at the time it was a mistake and we still did it. I don't know why. That's just something that we do. I guess we decided to rebrand going into slow season. I can't even explain to you the conversation we had with the marketing company. They were sitting on the screen trying to find the right words to explain to us how stupid it is and how we're making the biggest mistake of our life. But we were waiting to do it for so long. There was never a perfect time. I was thinking like, there's never a perfect time to go to the gym. There's never a perfect time to eat healthy. Let's just do it. No, actually there is a perfect time and we made a mistake and it was the hardest slow season that the industry has ever experienced. Plus, we changed the name, rebranded, so no one knows who we are. So it was just, it was a risk. We didn't have enough calls on the board. But what did we do? As an operator, every time that there's a risk you have to assess, you have to consult with people, you have to see exactly if you can sustain it, if you can support it. What would you do worst case scenario? How do you make sure that you pay people first? That's the most important thing. In any risk that you have, the most important thing that you have to make sure is that Your people are paid, that people are taken care of, that there isn't anything, that your customer is not getting a bad experience, or you just don't pick up the call, or, you have to make sure that some pillars of the business, are still there. And I think that probably that's the most important thing. And at the end of the day, that's your job as an operator. You have to somehow navigate the, all the problems that are coming. You just have to figure out a way to work around it. So with us, you guys are sponsored by Elite Call, shout out to Travis and Leslie. They're absolutely incredible. They really helped us in the time when we were very low with calls on the board. They were calling customers and reaching out to them and you can imagine a customer is getting a call. He wasn't expecting to get about a name of a company. He's never heard before because we're a new company. So we've, we went through like layers and layers of, just horrible decision making that almost took the business under and it still happens every day and it will happen every day. The business is an ongoing heart attack. It never stops every day. There's something else happening. So you just gotta be quick enough to, to act on it and share with your people and trust them, have them trust you, build it, and they'll be there for you to support you in those times.

Thaddeus Tondu: 28:04

I love that running a business is like an ongoing heart attack.

Michael Katz: 28:07

It's an open heart surgery, it's a marathon, it's not for everyone.

Thaddeus Tondu: 28:11

It's fucking wild, man, it's wild.

David Katz: 28:13

Even

Thaddeus Tondu: 28:13

when

David Katz: 28:14

nothing is happening, like I'm telling like new business owners that are coming here to our shop and they're asking for help, advice and stuff, and I was like you can see that even when nothing is going wrong with their business, you get this feeling of I don't know how to say it like lack of peace like they're just uncomfortable all the time for absolutely no reason and it's just you have to get comfortable with this. This is how it's going to be.

Michael Katz: 28:35

You got to be comfortable being uncomfortable.

Evan Hoffman: 28:37

Part of it is just conditioning, right? Like at the end of the day as the owners, as the CEO, the operations COO, whatever, you are the last resort. The problems that everyone else on your team can't solve. That's what you get all day long, every day plus the other pile of shit that you know you ought to do, but you just don't have the time to do because you're so busy putting out fires and everywhere other place in the business. So of course you have this negative bias of course you think things are supposed to be going wrong right now because all you've done for the past three years is put out fires so yeah, it's.

David Katz: 29:12

And here is a good example. It might just, but mine just said like this. This year so far, the first six months were the hardest time for the HVAC industry and nobody had work and everybody was struggling. We grew another 56 percent during this time, right? So first six months of this year compared to, first six months of last year, we had a goal of 150 percent growth. We're going extremely aggressive. We made it to 56, this is what ultimately if the business is growing, the people in it are growing and we always have them in mind. We always we make sure not to lower our prices, during this time and, get freaked out so that we can make sure, these guys can still make good money. Being creative and reaching out to ask for help and finding great companies like Elite Call, like these guys did incredible for us. I'm so happy they're sponsoring this episode because it gives me the opportunity to talk more about them. We talked about, how hard it is to make decisions sometimes, but If this makes your decision easier, these guys, were such a huge help during this season, like a lot of credit for the success I would give these guys. They're just incredible service, incredible results. Super happy about it.

Michael Katz: 30:18

Also, I You know, a lot of industry leaders are not getting enough credit. I'm listening to a podcast and it brings me a few more millions every year and I'm listening to another podcast and it fixes my relationship with one of my managers and I'm listening to another podcast and, the, my marketing is great. I think a lot of people, need to really understand the answers are actually there. The answers are there. It's just that sometimes you're focusing on the wrong thing or you're looking to listen to the part of the episode that gets you excited about how this guy grew it to a hundred million and sold it and now he has a hundred million and he's partying in Vegas every night. It's something that you need to really, don't compare your chapter one to someone else's chapter 20. It's something that you really need to understand to start small and at the end of the day, shout out to, to, to Ishmael and Tommy Mello and Victor Encore and Tom Howard, and all these guys that are out there sharing so much information, they really, I don't think people really understand it, they paved the way for us, they paved the way for us. These are people that are out there sharing so much information, telling you what to do and how to do and what to be careful from and it's really something that you just got to listen. You just got to listen and focus on the one thing that, that would help you. And yes, there's always risk and there's always problems. You can't expect problems. It's not like you're having a bad day or you're a bad business owner. You just, it's just about the matter of how fast can you learn? And how much are you willing to also change yourself as a person? Because you on day one of the business is not you on month six and not you on year three. You have to change as a person. Your priorities change. Everything changes. So it's really it's a combination of a lot of things that have to happen together and we're experiencing it right now. I'm not going to say that we're a big company. We're ambitious. We're hungry. We're young. We are, this is our time to do it. We're interested in doing it. We're going to make sure to break any record out of no matter how long it takes. But we also understand that some things take time and yes, it's all on you and it is pressure. Like the pressure is on you got to perform you got to figure it out. It doesn't matter if you're david has this weird this i'm gonna call it this weird beyonce analogy that he always does. I fucking hate that thing But he's right when he says it. He's basically saying, he's talking about being a professional.

Thaddeus Tondu: 32:32

I thought you're gonna go with all the single ladies, but

Evan Hoffman: 32:34

I yeah, if you like it, then you put a ring on it, right?

Michael Katz: 32:37

But

Evan Hoffman: 32:38

what

Michael Katz: 32:38

he was saying is he was saying When she has a live audience right now and she's got to put on a show. Do you think she's going to take everything that's going on in her life? And everyone has something going on in her life. Her life is even more amplified than most of our lives, right? Do you think that she's going to let that affect her performance? So it's a weird analogy, but for the most part, you got to perform as a business owner. If something happened at home, someone died in your family, you're not able to pay rent or whatever it is that you're going through, but you have a sales meeting happening soon, or you have an all hands meeting with the entire company happening soon. You better be ready to give it your best show. So it's, that's what I'm saying. It's not for everyone. It's not comfortable. You don't get to call in sick. You don't get to, show up late. You don't get to do any of that. It's 24 seven, 365 plus overtime, 14 hours, 16 hour days, seven days a week. It's a lot. You really have to be a little bit crazy.

Thaddeus Tondu: 33:27

The mind doesn't stop, right? And that's the thing is that like I was on, I was camping this weekend with a friend and he's what are you thinking about work? And I was like, he's like, why? And he couldn't understand it cause his job was completely radically different. His day is done. I'm sure he probably thinks about it, but like we're always on 24/7 365. So I love that. So by the way, your boy's an Elite Call Travis Franchio. He actually texted me too. I said I'm like, you guys are showing some love. They said that we're here and they sent a screen. He took a picture and sent it over but no, one of the, one of the things, and a couple of things that I love from your rant there is that don't compare your chapter one to your chapter 20 and so we're sitting here saying, Hey, these guys were pacing for 12 million. If you're listening to this podcast and you're pacing for 2, 000, 000, don't think, Oh man, I wish I were them. No, that you're in a different season. You're in a different chapter. If you're listening to this podcast and you're pacing 22, 000, 000, you're in a chapter ahead of them, right? Also know where your chapters end, right? Just because they're at 12, 000, 000 doesn't mean that you need to be 12, 000, 000. Do what's right for you and your business and what you want. But I really love the part of the what got you here won't get you there. You need to change yourself constantly and adapting all the time. Very powerful things. But to go back to the start of 2024 in part of the most challenging things that you've done, and I don't think it's quite over just yet. Either in my opinion, I think it's, we're probably going to see it again this next fall and winter. What were and David feel free to jump in here too, if you're to look at, okay, what did you guys do?'cause people were going outta business, people were declining in their sales, people were going down in revenue, everything. But you guys grew by 56%. What are one to three things that you guys did differently that you can attribute that success to?

David Katz: 35:03

Yeah, I think that, one of the most important things is just to understand the client's needs, right? We are, anyone that's listening to this right now, if you have a service business we're talking about a need. This is an essential thing. It doesn't matter if it's HVAC, plumbing, electrical, if somebody's toilet is clogged, like they need to fix it and we just need to, give them what they need and one of those things was financing. We started utilizing financing this year, in ways that we've never done before and we've pushed it internally. We did a lot of training around this topic. We brought our financing vendors in house to, give training to myself, to the management team, to the salespeople, to the service technicians. And we all stepped in to make sure those repairs, those fixes, those upgrades are going to be possible for the homeowners. Not everyone is expecting, sometimes the technician comes to the house and it's an easy, 100 repair, 200 repair, but sometimes it's something major and not everybody has the money to do this on the spot, but they need their heating system. They need their cooling system, right? A lot of people work from home nowadays. They really it just becomes more and more essential now. So I think making it accessible for people is definitely important. If you're listening to this right now and you're not utilizing financing in your business you're really not giving a lot of your clients an opportunity to buy from you, which it's a shame. They really need you. Like they trust. Like it's on us to be able to deliver for them and give them solutions to everything, both to the actual repair, but also to be able to pay for their repair and many people, they don't have 2, 000, sitting in their bank account, just waiting for this. It caught them off guard out of nowhere. So making it accessible for people, definitely a big one.

Evan Hoffman: 36:38

How many, just to touch on that really quick here, David, how many financing options do you have? Like how many different companies are you working with?

David Katz: 36:45

So we're working with two companies right now and the main idea with working with two companies is just to, again, like you want to give a backup. So if a customer tried to get approved for something, they didn't get approved, we'll always have a backup for them. Something that can, help them get through the process and then other things that we did is contacting companies like Elite Call that help us, generate more calls on the board for our technicians, make sure, they have work to keep them busy. Chiirp is another great one that we use this year, just trying to automate the process. It helps us, reduce the loss of calls. When customer reached out to you, they left their information. You're trying to call them. They don't pick up the phone. Somebody else called them right in the moment when they were free. You could have gotten that call. Somebody else called them right in the moment when they were free. Just caught them on the right timing and they got the call and you didn't. So that's what Chiirp are doing like they make sure you have this automated process of follow up with people, whether if it's, messages, emails, whatever it is that you need, that's what these guys did for us. So for us, it was like pulling a bunny out of the hat, right? It was like a magic trick that we did this year that helped us make it successful without these companies, we wouldn't be able to do it. So I think those will be, there are a lot of things that are happening, but those will be three major ones.

Michael Katz: 37:58

I think we should actually dive into it a little bit to maybe even explain to people. So there are specific companies out there that will do the outbounding for you. So I think in slow season, as soon as we noticed that it was happening and we've, because of our relationship with some people in the industry, we've actually heard from some people that, something big is happening, 2024 is going to be really hard. And the explanation to that is something that people just don't understand because they think that it's just, It's not just the weather, the weather is not too different than what it was. It is a little bit odd, but it's not different. In COVID time, people were spending too much time at home. There was five to seven years worth of work done in a crunched two year period. So there is a little bit of an aftermath, which when it's going to take time, people already did everything they need to do in their house. They already fixed everything. They already spent all the money they had. And now with all the recession conversations and everything that's happening out there and interest rates. People are just holding on to their money a little bit. So it will take about maybe another year or so, maybe less than that, hopefully, or, thank God we're heating and air conditioning. If it's hot outside, people are picking up the call and your call center is going to get blow up with phone calls. But essentially when we noticed that it's taking, that route, what we started doing is we started doing, traditional marketing, you have to send magazines. If customers are not, people are always, you guys probably under, understand them more than anyone. People are always complaining to the marketing companies. I need more calls. I need more calls. I don't have enough calls. Put a higher budget. But you haven't used up your budget before. I don't care. Put a higher budget. No one is clicking your ad, man. What are you talking about up the budget? There is no budget. No one is searching for you online. So you have to get in front of them in those times. So a couple of the things that we did is we did the print media. We actually took out flyers every for every appointment that we go to, whether if it's service call or install call, and that is basically giving the customer a free tune up. Now, it's very strange to me if someone would walk into my house with a beautiful wrapped van, dressed in a nice shirt, knocking on my door and telling me, Hey, can I clean your air conditioner for free and be out of your head in about 30 minutes? I would be really shocked unless you look very unsafe, I would be shocked if someone would not want to take it. So we did that. We made sure to do outbound calls. We changed all of our bonuses for our calls center. We made sure there's different bonuses every week. Whoever has this many conversion or whoever does this many calls this week gets five dollars a booking. If you make 80 calls a day, everything that you book you get, five dollars. As long as you made the calls, everything that you booked you were able to get. There's all of that you can do. There's Chiirp, which is basically an app that allows you to reach out and there's a lot of them out there. It allows you to throw your customers into different buckets. So for example, You went into a customer's house and you sold them a repair, but you haven't sold them a membership. Great, that falls into the bucket of the membership and you start outbounding them with text messages every day. If you sold someone an install and you haven't sold a membership, same thing. If you sold someone a membership and not a repair, they fall into these different buckets. If a customer reached out to you and they didn't book with you, they get a video of us saying, thank you so much for reaching out to us. I noticed that you haven't actually booked the appointment with us. Please give us a chance to earn your business again. Is there anything else we can do? You have to get really creative and try things that people haven't tried before and it's all out there online. There's another thing that we started really trying to put our focus on, which was every time that you go to, I got this from that was from Ken Goodrich. It was in the last Pantheon. Basically, every time that you go to a house, there's a sticker on the furnace or a sticker on the AC. Call the number. Most of HVAC companies shut down within the first few years. Call that number. If the number is inactive, purchase that number. Transfer their calls over to you. Now you've got tons of phone calls coming in. So there's all these ideas that, that you can keep doing. All you have to do is just Go to a shop tour, go on, Facebook groups and just ask people, what should you do? There's so many people that are gonna be reaching out. I guarantee if anyone's gonna be walking into my shop and asking what do we do? I'll grab them, sit them with our marketing coordinator, sit them with a call center manager and just tell them look, this is what we're doing and you gotta understand, you gotta do the work. People got really comfortable in COVID time. Money. Just throw money at it. More money. Let's just put more money. It's not enough money. It's not just about putting money out there. You have to get really creative. You have to give your customer a good experience. You have to make sure that you did everything you could to preserve the customer for next year when you're going to be slow again, because it's happening again and you can't just wake up in the middle of slow season and say, I got to do marketing. I got to do print. I got to do, no, it starts before. Like we are people right now are enjoying like busy season when phone calls are coming in. We're not enjoying business season. We're saying good. Everyone have calls on the board. Let's talk about slow season. What are we doing next year? What are we doing next? What did we do that didn't work for us? So it's really important to make sure that you're ahead of the game and just ask questions don't try to reinvent the wheel and you can't be lazy about it. You're gonna have to do some work.

Evan Hoffman: 42:36

Yeah it's what moves you from being a weather driven business to a weather assisted business, right? You're in control of your revenue you and your calls, and your job board, year round, doesn't matter what's happening in the weather, we're just going to allow that to supplement whatever it is that we're doing. If we need to turn down our outbounding this month because it is reaching 90, 95, 100 degrees outside, fantastic, right? There's a hurricane that rolls through and we're going to get a bunch of insurance calls, fantastic, right? Shitty, don't get me wrong, but hey, let's face it, our, every trades business is supplemented by extreme weather conditions.

Michael Katz: 43:13

Another thing that people need to do also is to extend the range of the services that they're doing if the season is not there. We're not in plumbing yet. We're not maximizing HVAC yet. So there's no point in us getting into plumbing, but we did open plumbing by basic services, basic needs, whatever it's water heaters and tankless water heaters. And every, I like that every problem is an opportunity in disguise. When we were in that moment where things were being really difficult for us, we said, perfect opportunity to double down on training. Let's do two trainings every time that we have it. Let's do more of this. Let's improve the process. Let's implement a new system right now. We're slow. There's no calls. There's no day to day hustle. You have the time to actually sit down and do it. So why don't you offer an additional service? At the end of the day, what do you really need to do? You need to get in front of that customer with a smile, with a good attitude. Offer them all the services that you do. Ask them if there's anything they need help with. Make sure that you give them such a good experience and ask them if there's anything else you could improve in your work. I think you really have to take advantage of these moments when things are tough instead of just running around with a chicken with a head cut off and just start really micromanaging everyone in the business because the business owner loves to do that sometimes. Why don't we have call? And they go to the marketing company. Why is this not working? You have to understand that, there are gonna be times like that. You just have to understand there is a playbook for everything. It's not the first time. It's not the last time and people have been going through these little seasons since the eighties, the seventies, like it's, there is a playbook for it. You just don't know what it is. So you got to go out and get it. That's your job as the business owner to get the answers and implement them as fast as you can.

David Katz: 44:41

I want to emphasize, sorry Evan, I want to emphasize something that I think is really critical for business owners to understand over the next couple of years. Something that Mike said earlier, he said, there's been about six, seven years worth of construction done in a period of two years because people were at home, it was the perfect time for them to, take care of projects that have been holding on for a while, and now we're seeing the decrease of that demand, right? And so we need to, as business owners, you need to understand like one rule, one thing. That's that can be your North Star, something that you're making your decisions based off of and that would be, the game during COVID was labor. Whoever has the labor wins the game, right? Whoever has the most labor can pick up as many jobs as possible, make as much money. Everybody were winning. Everybody were doing well when it comes to service because there was such a high demand, right? And right now, the game is no longer labor. The game is marketing and it's very difficult for small businesses to compete, online with the larger corporations, that have the funds and, you 100, 150 on a click. When, a smaller operation might not be able to afford it. So what Mike mentioned there is really critical for businesses right now, go back to something that go back to traditional marketing, something that the price where the price doesn't change when the competition is not really, on the corporation level touching those areas because the magazine price or the flyer price or the mailers or all of those things, the price stayed the same and you're putting yourself in front of the customer, and that's one way of winning right now. So if you're listening to this and you're having a hard time, extend your range, the area of service a little bit, maybe try to offer more services go back a little bit to traditional marketing that can work really well during this season and maybe even change the mindset through instead of talking if you're an HVAC company, instead of talking heating and cooling. Which might not be the pain point or the need necessarily, it could be air quality, like talking about air quality in the house, cleaning your vans or installing an air purification system in the house. These kinds of things can be super, super useful during this time.

Thaddeus Tondu: 46:46

And I like the fact that the game is marketing and you look back since I started since the studies in like the fifties when advertising became a lot more prevalent, guess what happens generally every seven years in an economy? You go through booms and busts. Peaks, right? Peaks and valleys and they've actually done studies on this and and I have the data, it's a, I haven't looked at it and updated it in, I don't know, 10 years 8 years and so there's probably more on that but the, every company that has actually in the valley spent more on marketing has actually came out of their competition by 200 percent above their competition because people might not remember or might not need the services now, but if you're there. You're there. Now this creates staying power in your brand. They're like, Oh shit, this company is advertising. They must be successful. They must be strong. It must be a good company. I want to write it cemented and so that way, when it does come out of it, now they're going to remember that company who is doing more of the guerrilla type things, more of the traditional type things, more of the branding plays, because it's a super smart thing to be able to do. Now, when you do the branding and you have a good online, by the way, it actually helps augment your online and actually becomes and creates it stronger. When you got your traditional things that you're doing, and then you have a great company like On Purpose Media doing your online stuff, now you've doubled down and you're creating an even better pop for your business. So I love that. I love that.

Michael Katz: 48:00

And it's consistency too. It's consistency. It's people think, Oh, next gen has billboards up. Let me put billboards up and then they drive with their girlfriend in the car. Look how look how awesome I am. Look, I got a billboard up there. I'm a big man. It's not necessarily about just that. That is pretty cool. Yeah. Having a billboard up there is pretty cool. You're going to feel like the man, but at the end of the day, the billboard is not, what's going to get you the calls. I remember there was, I don't know who I talked to that there was a billboard up there of this company and it didn't have a phone number and the guy was laughing at him, look at them. So dumb. They don't have a phone number. They don't have a website. They don't have anything. How are people going to reach them? Who the hell is driving down the road looking at a billboard and jumping on their phone quickly to call the company? Are you kidding me? It's brand awareness. There's brand awareness, and then there's, the idea is, when they will need the service, and they will see your face online, they will see your logo online, among all these other companies, something is gonna feel more comfortable. Something is gonna feel more safe. Maybe they're even gonna say, Oh, finally, I can actually get to work with these guys. I didn't even know that's what they do, but I recognize them every time from and to work. So you do need to, like I said, just cement it over time. You have to make sure that you're everywhere and you have to make sure that you're consistent too. I have right now, some of the companies here in the Bay Area that I'm noticing and they started this billboard thing going up and I'm noticing them doing it in so many different areas too and I believe there's a better strategic way to do it. I think that if you throw one billboard and then 40 miles after you're going to throw another billboard. That's not necessarily going to give you the effect that you need. Why don't you do it in the same five miles where your trucks are driving to? To those people in that area, you can actually look like the biggest company out there. They can think, oh my god, you guys, they're so successful. They're everywhere. I see them everywhere. That's the reality. That's the concept. That's what they see. So you have to be really strategic about it and like David was saying about air quality and stuff like that. Did you know, you guys, you're going to laugh at this one. A company, I remember when there's a lot of people that came here to do a shop tour and we're showing them the operation and we told them, our plans for growth and everything. And, they're saying, how are you going to get through slow season and stuff like that? Now, all the mistakes we made, we're actually taking advantage of them right now. This slow season was the first time that we've ever sent. An email to a customer, like to a list of customers to advertise something or to offer them a service. Since the first day the company opened, we have never reached out to any of our customers to offer any service at all and it was just because we weren't aware of how it works. We just learned what's a tech turn process about, a year ago, maybe. We just heard about it, and then it's just we're getting these things over time, but it's something that has been there. If we would have talked to the right person, the right company, they would have told us what to focus on first. We would have probably done that. Yeah it's important. It's important. All of it. It's important. You got to stay consistent all the time. You can't just stop.

Evan Hoffman: 50:39

There's still so much room for growth. That's the cool thing. You guys have done incredible things so far, and yet there's still these things that to most guys is like, Oh, this is obvious. They're not even doing that. Who gives a fuck? Because you are out pacing them just based on effort. Now you start adding in all these extra things like getting Jack and Travis and the whole team involved at Elite Call. And now you're crushing that. And then you get Chiirp involved and now you're crushing that and you're filling in all these little holes. You're plugging the holes throughout the entire funnel. And I was on a podcast earlier today and it was part of the conversation there. It's look, if you're trying to grow 150 percent like you guys were trying to do to start this year, You don't need to grow your call volume by 150%, right? How can you plug the holes all throughout the funnel so that you grow each part of it by 6%, 7%, 10%, right? And over time, that exponential result is the 150 percent growth.

Michael Katz: 51:38

A hundred percent. No pun intended. It's, you have to what's your conversion rate right now? Some companies are out there with conversion rates of like 10 percent on marketed leads or, 70 percent in the call center. You don't need to spend more money. You need to do more training. You don't need to hire more people. You need to train your people. You need to maybe buy them a coffee once every few weeks. Maybe take them to lunch. Is this the best you can do? There's a sentence that I'm always saying to myself. Every time that I get a little bit unmotivated, every time I get a little bit lazy or comfortable, I'm always asking, So is this the best you can do? Is it the absolute best you can do? Is this the last thing you're going to do in your life? That's your last piece of work? You have to really invest more and make better of what you have right now. And what you mentioned here taps into the whole idea of how we grew and what did we figure out? Basically what we did was we went to Pantheon 2022. They invited us over. Initially, we didn't want to go. It was like a thousand bucks a ticket. I've never went to a conference in my life. I'm like, a thousand bucks a ticket? I'd rather go to to see, I don't know, like Jay Z or something like that. I don't want to pay a thousand bucks to hang out with some boring guys from the industry like us. And they basically said, you know what? We'll give you a free ticket and we said, cool, let's do it. It was down in LA. We'll see some friends and family. We went over there and our minds were just blown. This was just, we started talking to all these different people. It changed everything. We just asked them, what do you do and how do you do? And then the shop tour thing came about. A few different, business owners told us come to do a shop tour and, the first shop tour that we did, I don't know if it's a, do you think I should tell the story about the next gen, the first. Okay. So we basically, we did the first shop tour. We were like, we're going to go, we're going to go see next gen. There was this hype, I love listening to the podcast and I said, we're going to go there. We drove down to LA. We, our plan was to be there the following day, but actually no one knows this, but we went over there, and we were just getting into LA and we said, you know what, why don't we go see the shop right now? This was like 9 30 at night. It's let's go see the shop right now and I'm like, we told, what are we going to do there? It's 9 30. I said, I don't know. Let's just go see it. That's a company that gave us so much motivation. Let's just go see it and I see the big sign, the neon sign. I'm like, wow, there it is. And I walk in there and actually see people over there working. So I walked over to the guys and I asked them, what do you guys are doing? I see them like cleaning the van and they weren't really, they weren't really about it. They weren't really about to talk to me. They were not really interested, but little did they know actually speak fluent in Spanish. So as soon as I pulled out that card. They were like, Oh, he's a homie and they started talking to me and we started joking. We went for a secret tour at 9 30 PM. That guy would probably be fired. If anyone would have known that guy gave us a full tour of the operation, brought us into every single room, every single office space, every single one of them and explained to us the whole business. And we were just writing notes. We just wrote notes about everything. How did they do every single thing that they have over there in the operation? The next day we came to a shop tour and we basically had a very specific goal because we were strategic about it. We're not, let's just go to a shop where it's going to be cool. Let's go do a shop tour. What for call center, great sales, great service, great and we basically went to every owner, any manager of that department and asked them for the whole methodology, like everything that they have, just give me everything you have. And we wrote it down and it was hours and hours of work. We're there for 14 hours that day. We drain these poor managers like we were so nice to them. We bought them lunch and coffee and really helped them, Liz, she's absolutely awesome from NexGen. She definitely helped me a lot she was there so patient with me two or three times when I was there I went back again for more questions and she still answers every time I text her so she's absolutely awesome but you have to really focus on each department get the information, implement it, and then move to the next thing. And you just got to do it. So the same like marketing we're talking about and outbound call in and all these things focus on your marketing, get the methodology, get the information from someone, start implementing it one by one. It doesn't have to be perfect. It doesn't have to be amazing, but if you spread it out, like Evan said, just do 6%, 6%, 6%, it's compounding interest. It's just going to start, improving itself.

Thaddeus Tondu: 55:25

And that's just the mentality of next gen, right? Or really anybody the people that's the giver's gain, right? And they, when you want to give back to be able to do those things, it's huge now you're reciprocating that back to other people and when you, when people give to you, give back to others. And it's a super powerful thing. And I know that Ishmael has said that, yeah, I think he's he stepped down from the CEO role to focus on Nuve now, but, there's others that are inside the industry that will open their doors at any given time. Any Hour is a good example, right? I know that Any Hour will open their doors at any single time. For a shop tour and they're 100, 000, 000 per year. You want to see a bigger operation, but here's the thing that I like about what actually happened and the person probably wouldn't get fired, but he actually knew, they're there at nine 30 at night and he's doing new and clean events or whatever, he knows everything that's going on in the business. He knows everything that's happening because of the culture that they instilled there, right? That's the other part is when people are bought into your vision, when people are bought into your culture, people are bought into what you want to create, man, they get on board for it and that's a powerful motivator in humans. Gentlemen, we're up to the hour on things. I do want to thank you guys for coming on the show. We're going to drop a couple of things here in case anybody wants to get a hold of, a hold of you guys. Check you guys out. trueheatingandair.com is how you do that. Of course, if you want to follow them on Facebook, facebook.com/trioheatingandair Instagram, same thing trio heating and air, but if you want to get in touch with Michael, you can get a hit, hit him up on Instagram or a Lincoln at Mickey Michael Katz and if you want to get in touch with David, it's with, don't worry. We'll put these on the show notes after. Instagram, who is David David K and on LinkedIn, David Katz there and so gentlemen, thank you for taking the time to come to the show.

Evan Hoffman: 56:56

Go do a shop tour. Go see these guys.

Thaddeus Tondu: 56:59

Go do a shop tour. Yes. Reach out to them. Do a shop tour. Yes.

David Katz: 57:02

Yeah, guys, you are welcome. You're welcome to come in, talk to any of our managers. We're an open book. Anything that you need to just come in, talk to us. Like our first priority is just making sure we're paying people in our company as much as possible. We want to be as competitive as possible in the industry. That's going to be the main focus. With any conversation, customers and the people in your company will make it happen. Just reach out to us. We'll help you out with whatever you need.

Thaddeus Tondu: 57:27

Perfect. And of course, if you want to they've talked a lot about Elite Call as well as Chiirp. Been a big instrumental success to them make sure you check out Elite Call. Make sure you try code Chiirp. Tell them that you sent, that we sent you guys from this podcast. Everybody gets the credit on that. So thank you guys. But before we go, we have one final question. Who wants to take this one first? All right, David, what is one question that you wished people would ask you more, but don't?

Michael Katz: 57:48

David, I'll let David take it.

David Katz: 57:49

I think that the most common one that, many companies should focus on. I think that number one, most companies that I talk to, it seems to me like it's just a thing, right? Like people are pricing themselves based on the markets, based on what their competitors are doing. Based on what they say or based on what sounds okay, and there are some every business have their own expenses every business is different like you have to price based on yourself So I think if people would ask me one just what is the process to build your price book? That will be like one of the foundational things you need to do in a business because the one thing that I want to make sure it's happening here Is that we are going to like our guys here are getting paid probably the best in the industry like literally try to find a pay plan that's better than ours people that are making more money than our technicians than ourselves people you know that more than our management team it's going to be super rare, but it all comes down from that It all comes down from being priced right and at the end of the day you The customers are going to benefit from it. They're going to get a better service because you have a great company with people that are getting, 401k and vacation pay and great health benefits and great vehicles and great pay. And they're going out there and projecting this great service to the clients, but it all starts with. With that, you have to be priced right. You have to figure out your numbers and I'm happy to help with this. I hope more companies would focus on that first before they do anything else.

Evan Hoffman: 59:17

How often do you update your price book?

David Katz: 59:19

Ideally, we want to do this every three months. If you do this every six months or once a year, I would say at the very least once a year, and it's a big project, right? But once you do it the first time, it becomes so much easier the next year and the next year it's, yeah.

Michael Katz: 59:35

But you have to, we have to build it right the first time, because unfortunately one of the struggles we've had, and a lot of companies are going through it too, technicians and sales guys and installers and everyone are going to come to you and basically say, hey, we should add that hey, we should change this hey, what do you think of that? And we were, the victims of that. Like we were literally changing it every single day, restructuring it every single day but the one thing that solved it for us was the fact that just like I said, we did a shop tour. We went to a shop, we asked them to take a look at their price book, and we wrote down notes of how they broke it down and why they broke it down your price book is not just for the customer. It's for your technicians too find the item and be strategic about it find the item that is the most profitable for you and give them the most aggressive or the best benefit or the most value on that. and direct them to it. It has to be also user friendly. It has to be simple. So I think price book is like you said a really big thing as soon as we came back from Pantheon That was probably the most uncomfortable thing we ever done in the business. We just jacked up our prices We raised all of our prices. We thought everyone are going to quit the next day But we explained to them we show them the breakdown you calculate your expenses your profitability How much you want to make this year you want to make that okay? Reverse engineer that into the price figure out what the price needs to be so you can do it and when you do all these little things, it starts to add up. So the price book is such a big thing.

Thaddeus Tondu: 1:00:52

No, it's huge and that, that's another 10 minutes unpacking all of that. There's a lot of great tools out there. I think of the new flat rate. I know they're working on transitioning from menu pricing to more margin pricing and being able to build in some of those to be able to hit what you want to hit. As well, so shout out to them. They do great things there as well and in transition to you, Michael, what is one question that you wish people would ask you more, but don't?

Michael Katz: 1:01:12

I think probably for me, it would be just the question of the, what is the most important thing to focus on in the business? I think that sometimes people come with the agenda of the question about something and I think at the end of the day, what it should actually start with is, What is the most important thing to focus on in the business? And what I would tell them is What was the revelation to me? The cycle that I understood, because I always try to understand how do I track the best talent? How do I make sure that I'm profitable? How do I give the best benefits? And it ties to what David was saying. So the cycle is this, and this is what all these, large corporates are doing, all these companies that have been around forever. And probably what a private equity is going to do when they buy out your business, if they will, hopefully one day, what they do is basically they price themselves, right? They have a very specific structure. And they pay their people well and their pay process, at least for us, is so simplified to the point that people know how much they made the exact same second that they did it. When you have a perfectly priced price book, really the right price to you, again, not the market to you, not lower than the market, higher than the market. It's not about that. It's about what you want. Do you want vacation? Do you want a Hawaiian sent to the recorder? Do you want, what is it that you want a top performer awards? You want to buy them tools, everything that you need to do and the cycles begins because you pay your people, right? Because you pay people, right? And the process is working well. You're attracting better talent. You have more money to actually spend on preserving the talent and keep them with you and after that, We need to actually make sure that we give the best customer experience, best customer service to the customer. And the cycle just continues. A talented individual who is happy because he's making good money and he knows how much he's making, who's having a good smooth operation, the job is sold today, it's being installed tomorrow. That's our business model. When you have all of that, it's just a cycle that continues on and on. So I wish people would have asked me exactly, what to focus on and I would say start with that. Have the entire process simple. People ask me a lot of the times, how do I keep my top talent? My top sales rep is thinking about leaving or all these different things. You got to ask yourself a question. Is everything perfect in your operation? Is everything smooth? Our jobs being put on the board? Did the guy, does the guy know how much is being paid? Did we ever lose a payment? We make sure to pay them, right? Is there anyone else that can offer more? Is the culture affecting? It's just this perfect cycle that I wish people would really focus on. And you'll see at some point there is, I'll give you, I'll give you probably the best nugget I could ever give to any business owner. I've done this with David and it's, and I'll wrap with this. About a year ago, less than a year ago, it was like nine months ago. I grabbed all the managers in the middle of the day into the conference room, every single one of the managers. I just, had an idea. I put them in the room, I sat down and I started writing down everything. I wanted to know what to focus on. I was so overloaded with so many implementations and new systems that I couldn't handle it anymore. And David kept telling me, let's focus on one thing at a time. And I like to overload, with so many things to do. So what I did is I said, you know what, I'm going to ask the people that really know what we need to focus on. I sat everyone in the room and I started writing down on the board, customer service, installations, passing city inspection, marketing. I started writing every single pillar of the business and the heads of all the departments were there. Call center, script, customer experience, conversion, everything and I basically told them all of us together are going to get an average answer. of the grading from 1 to 10. How we're doing and where we're doing and as soon as we saw the numbers 4 or 5, everything that was 7 or above, it's an ongoing process of its own. It's gonna resolve itself. I don't need to put all my attention on that. But everything that was 5 or 4 or below that, those are the stuff we needed to work on. Our collection process. Our, when we finish the job right now, are we actually collecting on it? we made sure that we're focusing on those things. And it just from there, it just compounds and it becomes really smooth.

Thaddeus Tondu: 1:04:49

it's actually funny. You reminded me about something that I just did when I was last week or two weeks ago when I was down somewhere, they did the same thing. Like you list off the quadrants of your business and you rank them. In order. And so now you can actually focus on there. And so it's sometimes things that you think are bad, actually aren't bad.

Michael Katz: 1:05:05

Yes. Yes, sir.

Thaddeus Tondu: 1:05:06

It's something else and so having that group thinking that the department to be able to do that super smart idea, super fast super powerful exercise as well. I encourage everybody to be able to do that. Gentlemen. Thank you for coming on dropping a lot of nuggets and a lot of wisdom on today's show. It really was a good revelation and even some of these things for us and our business can be applicable as well. Thank you for that. So perfect. Awesome.

David Katz: 1:05:29

Appreciate it guys. Thanks for having us.

Michael Katz: 1:05:31

Thank you guys. Thank you. Appreciate it. Thank you.

Evan Hoffman: 1:05:34

And shout out to Jose too, for making all this happen, making sure that he could coordinate you too and get you in the room and make sure that we get this done. Cause this was great.

David Katz: 1:05:43

Jose is the best.

Thaddeus Tondu: 1:05:45

Awesome. Thanks gents and until next time. Well, That's a wrap on another episode of HVAC Success Secrets Revealed. Before you go, two quick things. First off, join our Facebook group, facebook.com/groups/hvacrevealed. The other thing, if you took one tiny bit of information out of this show, no matter how big, no matter how small, all we ask is for you to introduce this to one person in your contacts list. That's it. That's all. One person. So they too can unleash the ultimate HVAC business. Until next time. Cheers.