Business Stages with Tommy Mello

Come on What do I put this is George G and the time is right welcome today’s guest strong a powerful Tommy mellow, Tommy, you ready to do this? Let’s do this, George. Let’s go welcome. Tommy is the founder of a one garage doors to $50 million plus home services business with over 360 employees in over 17 states. He’s a regular contributor to inc entrepreneur and other business publications and topic of entrepreneurship and small business. He is the author of Home Services millionaire again, Tom excited to have you on. Tell us a little about your personal life’s more about your work and why you do what you do.

Tommy Mello 0:47
I, you know, I don’t know. It’s sorry to sum it up in a quick sentence. But I started a one garage for a service in 2006. And it’s a fast growing company. We’re pretty big here in Arizona. I’m from Michigan, we expanded into Michigan and my sister lives in Wisconsin, we went there. But I’m obsessed with business. And I made every mistake in the book. The reason you should listen to me is because I’ve made so many mistakes. I don’t want you to make the same mistakes. And you name it, I’ve done it I’ve recruited I’ve done handled all the marketing, I’ve worked in the warehouse. I was the guy fixing garage doors for a long time. Also got a master’s degree in business from University of Arizona. So eller and then, you know, I realized in my master’s program, it really wasn’t about the knowledge I gained, it was more about meeting people and learning how to effectively speak to people and build a nice little group of, of people, trusted advisors around me really learn how to get to know people, I hung out at a table that all we talked about was search engine optimization, and pay per click on Google. And that’s what really helped the business get going as marketing. And like I talked about earlier, George’s I look at it now as marketing is really a piece of recruiting. And we’ll get into that here in a little bit.

george grombacher 2:12
Thanks. I appreciate that very much. So you started the company in 2006. Yes, sir. And when did you do your MBA?

Tommy Mello 2:20
I got I finished school in 2012.

george grombacher 2:23
Okay, so you were you had some pretty practical business experience under your belt? Yeah,

Tommy Mello 2:29
you know, it was the first few years were now very successful, to say the least in 2010. Me and my partner kind of decided to go part ways with one another. And that was for the best. He’s doing really well in Montana. Now. My mom and stepdad moved out here from Michigan, to Phoenix, and they helped me out a lot while I was getting my master’s. And I’d say it really got ignited in kind of a catalyst year was 2014. I had what I call my integrator come on board. And he helped do the things that I wasn’t good at. And lots of things have happened. manuals, we created SOPs, KPIs, the right CRM, I know these acronyms probably don’t mean much to people, but customer relationship management system and key performance indicators and really learn how to build a manual. And make sure when someone started, they knew what success look like and how they would be graded. Al levy from the seven power contractor taught us a lot about that. And we’ve hired a lot of coaches, a lot of mentors. We go see different, successful businesses a few times a year, I’m always out of town, checking out big companies and kind of emulating what they do well, and I talked to a lot of businesses and tell them it starts with an org chart. It starts with the depth chart, it starts with get your marketing figure out what it’s going to look like a big thing that we talked about is brand, like having the right brand the right website that matches your trucks that matches your your yard signs that matches your stickers that matches your mailers. And a lot of people they miss that piece of their website looks like crap. And their stickers look different than their their wraps. They’ll stare into their billboards and there’s no symbiotic relationship there.

george grombacher 4:10
Nice. So that’s a lot.

Tommy Mello 4:15
Yeah, there’s a lot of stuff here. I know. Yeah.

george grombacher 4:17
How. So? You’re Are you an EOS company? You mentioned integrate le

Tommy Mello 4:24
we did some we did quite a bit with EOS. I had. Gino Wickman. On the podcast, my podcasts actually home service expert. Geno’s, a great guy. I like the EOS process, but we’ve done a little bit of Eos. It’s not something we practice every every month. But we’ve taken things out of that. And I say my core competencies are marketing and sales. That’s what I do. I’ve got a whole financial team. But yeah, we we set a lot of things a lot of different coaches.

george grombacher 4:55
Nice. So when you’re saying that you go into You you check out are you visiting other businesses is that because you have a reciprocal kind of a relationship where you’re inviting people to come check out your company too, because I’m sure that you’re very busy. And so that takes you time to leave. And then your people your are you’re talking with are kind enough to give you their time.

Tommy Mello 5:18
You know, I’ve read a lot of books, I’ve had a lot of these guys on my podcast. And typically I’ll just say, Hey, man, the CEO of another company, could I come by your business, hang out a little bit with your CMO, the Chief Marketing Officer want to talk to the CFO want to see how you guys train people? talk a lot about marketing, talk about recruiting and training, understand where their biggest financial mistakes are. And a lot of times, I’ll make that into a podcast. And it’s, it’s a pretty cool thing, because I could ask any questions I want. And, you know, this year we’re budgeting 151 billion is our budget. That’s what our goal is that it does not include consolidation of other companies. So we’re trying to buy some competitors out as well. So I’ll come up. And I gotta tell you, when you’re on the plane getting out of town to go to a place like this, it’s incredible, the questions you come up with, and just to walk in there and see a way that they do things. And a lot of times, it’s air conditioning companies, I’ve been to a lot of roofing companies, plumbing companies, one of the ones I want to go to next is at Tulsa, I want to go to Kwik Trip to their corporate office, because when you walk in a quick trip, it’s amazing how these everything. It’s so coordinated, everybody’s working. And it’s the recruiting process, they got to registers their powerwashing outside. And I’ve always been impressed. I just love to see where are their successes, and where could I maybe skip a step in the process to not make those mistakes.

george grombacher 6:48
Nice. I appreciate that. So do you have a favorite question or a couple of questions that you always ask?

Tommy Mello 6:57
Like, it really depends on the company. Typically, I find out I love marketing so much, because for example, I’m in this thing called 100 million mastermind I pay $100,000 a year to go to three events. And there’s this gal I met named Amanda tress. And she went from a million to 65 million in one or two years. And it was all through what they call micro influencers. And so just that conversation with her spot, a whole new marketing campaign we’re working on for influencer marketing. When you learn what influencer marketing or affiliate marketing is, you just heard this is all about diet and supplements. And but she kind of coined it into a way that is more about saving lives and diabetes and stopping cancer, for the food, you eat whatnot. It’s amazing to see, it’s hard to decide what company you got to talk to about what like sometimes companies are known for their training, sometimes companies are known for their culture. So going into different companies, I typically want one main thing when I go there to talk to one main person about different things, but there’s nothing I won’t look at. I went to a company that does about 600 billion, called Service Champions in Southern California. And it was amazing, I got obsessed with the way they do this batching. And they had three monitors up and they were just kicking butt. So I get to ask a lot of questions on that.

george grombacher 8:21
Nice, I appreciate that. So it sounds like you’ve got and I’ve worked really hard to create great systems and processes and platforms and and all that good stuff. And it strikes me that probably a lot of companies lack in those areas. And then they’re curious as to why they’re not having success with recruiting and I know how important recruiting is 10 your organization but I also know that so challenging right now, how has that been going for you?

Tommy Mello 8:51
It’s great. I gotta tell ya. It there’s a lot of things that go into recruiting. Number one is people say what can you do for me? A lot of times people expect you number one, you got to offer more than the other guys, right? You got to have benefits. You got a PTO, you got to have a new truck for them. And I’m service at least but here’s what’s crazy. A lot of people just don’t go to job boards like CareerBuilder and indeed, and monster and LinkedIn and Glassdoor and I could keep going there’s a million of them. Zip recruiter but they’re they’re looking for they’re finding a job passively through a friend or on Facebook or on Instagram. You know my avatar is typically it’s a male technician that’s out in the field. We’ve got women technicians, but it’s a typically they got to be able to pass a physical be able to kind of keep up up and down a ladder. So I’m not discriminating but typically they’ve been between 20 and 30 year old males so what do they hang out on? They hang out on Tik Tok. They hang out on Instagram and Facebook. So one of my buddies called me six months to go, Vanessa and her husband, Jodi, Jodi, his name’s Joe. But he goes by Jodi. And she’s like, we’re killing it for recruiting truck drivers. And I said, truck drivers are impossible right now. Like, there’s so much going out of the pandemic and just truck shortages and just impossible to get truck drivers. It seems like no, we figured it out. We got this whole system, we post on social media, we do a video interview, I mean, it’s absolutely lights out how well they do for recruiting. And I said, let’s give it a shot. So they flew out here. And my class have never been better. Just a players, I always say one, a player equals three B players. And the reason I wanted their help was because we’ve got a whole training facility here, we’ve got our own apartment complex, people come here to train for a full month outside of their area. And I walked upstairs for my training class, it was only 10 people and I need like 20 to 30 a month to keep this engine going. I have seven full time trainers and three full time recruiters now. And so I asked for their help. And they just, they’ve really got a nice system, that the average person takes 40 days to onboard and hire somebody, we needed to cut it down to 10. And 10 is still too high for me. But 10 is actually getting results. And their company that they started is called Rapid hire pro comm they’re doing a ton of stuff in home service, but very, very impressed with the way they’re doing things. And then my buddy, I’ll leave you with the seven power contractor, he got me involved in manual. So when someone comes on, they’ve got a whole thing that they’re expected to go through and know and understand it shows what they’re graded on tattoo policies versus if your car breaks down, what happens if you crack a tablet like an iPad? How do you deal with that all these things are discussed now. And the combination of both of them. And some other great managers have done just wonders for the business.

george grombacher 11:53
Nice. So you talked when we got started about how you made all the mistakes, was was was was one of them trying to do everything by yourself.

Tommy Mello 12:03
You know, believe it or not, I did do a lot by myself. And obviously one of the best books of all time is the E Myth revisited. People work in their business, not on their business. I’m the first one to ask for help. And then there’s things that I hate. I know Excel pretty well. But I don’t want to live in a Excel sheet all day or a pivot table. I’m not very into the financing side of things. Although we do have a financial quick check once a week that I’ve heavily involved that I, I didn’t do a lot, but it was more out of necessity. I started with no money. So the minute I got enough money. After I made an orange shirt, I said I hate this and I circled it. I said this is the first person I’m hiring. This is what I hate number two, and I want to hire this one. So I’ve always hired for my deficiencies. I’ve got an assistant. She’s time manager. For me. She’s also my organization factor like keeping stuff straight, putting it in files, making sure it’s easily obtainable. And I’ll tell you, you know, I’m not anything close to Warren Buffett, but he talks about his assistant, just as if without her, he’d be useless. And I’ve got a lot of those people around, find out what you’re really good at. And focus on that and get better rather than trying to be well versed in everything, I think that’s the best advice I could give just to that kind of work on the business versus in it is just really look to find out what you’re great at and continue to get better at that. Because why would you want to be good at accounting, if you’re never going to live in accounting? You know, and I think that’s the owners biggest mistakes, because they don’t trust anybody. They literally want to open their own mail. I don’t open up my own email. Like I’ve got people that open up my own email. i It’s kind of a I don’t do a whole lot as much as I used to. But I’m still in the driving force of growth.

george grombacher 13:56
Yeah. Well, I think that that’s awesome. So you’re finding what’s working for you and getting to focus your attention on the things that you are doing best? And I mentioned that that’s the main reason that you’re successful. Where are you screwing up right now?

Tommy Mello 14:13
Oh, well, there’s a lot of things. I say. Part of my worst thing right now is there’s opportunities that find me left and right and part of being an owner is you got a little bit of the shiny light. So I definitely learned how to say no a little bit better, but there’s still things I need to say no to. I thought I was a pretty good delegator, but there’s certain things that I think are slipping. I’d say we’re kind of right now. We’re retooling for more of the executive suite. And it’s sometimes people that can bring you here can bring you hear, and it’s tough. And I’m not good at firing people. I’m not good at having these conversations. So we’re kind of reinventing ourselves because you pass this 100 million dollar plateau and it’s It kind of turned into a valley for us. Because we’re in the midst of that right now of like, you can’t be the same company, you were with the growth, we grew 80% last year, and we’re gonna grow over 100% this year. And it’s a machine. And it takes really great leadership, great delegation, great culture, great communication, everything. But that might only get us to 300 million, and then we’re gonna have to retool again. So I think that sometimes people don’t realize, they’ll get to like 5 million, and then they’ll say, Man, this software doesn’t work anymore. Like I want it. Now I’m gonna have to get new software. So I recommend using technology in a way that somebody will say, Well, that’ll this will get us by for a couple months, or a couple years. I’m like, no, just go to that better one. So you won’t have to try to switch during growth periods. People say, You shouldn’t grow more than 10% a year. But I don’t think that that is with technology, that doesn’t make a lot of sense.

george grombacher 15:57
And obviously, it’s not working for you when you’re growing 80 and then 100%.

Tommy Mello 16:02
Is challenges. Trust me, it’s not it’s not healthy to grow that fast. But I welcome the challenge, because I think we’ve got a good thing here. It’s not that hard. It’s residential garage doors are the largest single young graduate company now in North America. And we’ve done some pretty cool things for our employees with profit incentive program, like basically phantom equity, and Eric, all of us are rowing in the same direction. So it’s pretty cool little thing we got going on. And we think we’re gonna, hopefully, get into Canada and grow exponentially, we started this best practices program for other grassroot companies, and we’re hoping that some of them will want to partner with us. Because there’s this crazy word that I’m going to share with you called arbitrage. And I could buy something for maybe five times profit, which is like EBIT up, which is profit. So if somebody is making 100 grand a year, I could buy him for 500 grand. And I’m worth about 2 million today, I buy that company, cuz I get about 20 times EBIT, da, actually, my buddy just sold his company Gadol. And he did 21 times EBITDA, which is in the tune of $550 million. Pretty cool, little payday.

george grombacher 17:23
Super exciting. Yeah, love it. Well, Tommy, the people are ready for your difference making tip. Even though you’ve already given us a bunch, what do you got?

Tommy Mello 17:31
You know, here’s the deal, readers are leaders, you got someone that took the time to write an entire book, they put all their stuff into a book, I’ve got a lot of books, because it’s kind of funny. I haven’t read through this yet. But it’s hacks for tic tock, this is a great book called The coaching effect. It’s a really, really great book. I’ve learned to read and read and read and read. And I gotta tell you, it changes the chemistry of your brain, I think. And there’s audible, I’ve got, I think, about 1200 books now on Audible. And I’m not listening to every one of them, because that’d be nuts. But I’ve listened to a lot of them. And I was doing pretty fast. But start talking to people and find out what books changed people’s lives. And you know, you usually you add up the five people closest to you add up their incomes divided by five, take the mean, and you’ll find out that you’re within 10 or 20% of that. Start changing the people you hang out with it. You know, a lot of people they hang out in this this group of people and sometimes they don’t realize that it’s it’s a cage, it’s holding them back. You know, I watched Morgan Freeman the other day, he was talking a lot. This was an older broadcast. And Don Lemon said something like, Well, what happens when you can’t get out of the way? You know, the ghetto, or whatever you think is what Morgan Freeman goes, well, there’s buses that come all day, every day, just take a bus out of there. What do you mean, you’re stuck? And I think a lot of people, sometimes they feel stuck. And when you start reading and you change your environment and you change who you’re with. It’s amazing what can happen. But it’s all about belief. I know that was a long statement. But I think that that’s a profound one is reading and changing your surroundings will really really help people get out of their cage.

george grombacher 19:22
I think that is great stuff that definitely gets cut. I mean, thank you so much for coming on. Where can people learn more about you? How can they how can they best engage with you?

Tommy Mello 19:32
Yeah, I wrote a book to home service millionaire. I talked about how I went from $50,000 in debt to at the time $30 million company and the Home Service expert and Michael Gerber Mark winters, Gino Wickman, lots of cool people on there. All about business. And I’ve started up a new podcast called Ask Tommy it’s a lot to do with people have questions about a lot of stuff and I generally don’t have all the answers, but I go out and get them. That’s why people like to ask me questions because they’ll get really good people that come on and kind of answer stuff. So that’s probably the best way.

george grombacher 20:09
Love it. If you enjoyed this as much as I did, so tell me your appreciation and share today’s show with a friend who also appreciates good ideas pick up a copy of the home service millionaire wherever you buy your books, check out the home service expert podcast and also check out the Ask Tommy podcast as well. Thanks again. Tommy.

Tommy Mello 20:29
Thank you, George. And

george grombacher 20:31
until next time, keep fighting the good fight. We’re all in this together.

Transcribed by https://otter.ai