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How To Build A Machine, Not a Hobby – Tommy Mello Playbook for a Thriving Business

How To Build A Machine, Not a Hobby – Tommy Mello Playbook for a Thriving Business

How do you go from $50,000 in DEBT to a thriving $40 million business? Tommy Mello shares his story and insights that can help YOU grow your business. It’s all about a few key things, which you can read about below, listen to the audio or watch the interview:

  1. Hire an executive assistant and leadership team to help you grow and that can supplement your weak areas.
  2. Build systems and processes to scale your company
  3. Hire the RIGHT employees/team members
  4. Don’t hire from ONE pool of sources
  5. Read, listen to podcasts and educate yourself
  6. Do great marketing – solid website, tracking your advertising to the detail, an email list and more.

Video interview

Audio Interview

Who is Tommy and A1 Garage Door Service

Tommy Mello:

Yeah. I own a company called A1 Garage Door Service. I wrote a book called the Home Service Millionaire, and I have a podcast called the Home Service Expert. I love garage doors, they’re 40% of your curb appeal, and they are the smile of your home, so my life evolves around the garage door, believe it or not. I went to school, I ended up getting a master’s degree in business, all to do garage doors.

Ramon Ray:

I love it. And tell me something about garage doors, that the common lay person, like me doesn’t know. Since you’re the garage door doctor, give me one or two things that I can go, “Wow, I never knew that about garage doors.” Make me smarter.

Tommy Mello:

Well, what’s super cool about garage doors is Amazon just partnered with LiftMaster, its Chamberlain, and now they can deliver packages into your garage. But, what people don’t know, in Portland and San Francisco, they’re testing out leaving stuff in the refrigerator and the freezer in your garage. So, soon, you’ll be able to get all your fresh produce on a daily basis, delivered in your garage, right in your refrigerator.

So, that’s a big deal. And then, the garage door started pairing with all the smart home stuff, so you could open and close it from your cell phone. You could have it close, after three minutes, if you’d like.

And a lot of people don’t know this, but when you get solar panels, you want to insulate your garage door, because a lot of the ambient heat comes through there, goes in your attic, and makes everything work harder. And the last thing I’ll tell you is most, believe it or not, pest control companies partner with us, because a lot of those nasty critters, and reptiles, and whatnot, they come through the bottom of the garage, that’s the number one entryway where bugs get in. So, make sure that you got a nice tight seal on that bottom of it.

Ramon Ray:

I love it. We can just stop right there. I’ll just take your material and have the 101 guide to garage doors. So, tell me, give us a bit of the story of how it started. I know one, I’m sure there’s a lot of the angles, but one claim to fame that I have in front of me is, how I think you bought, or were with a business that had some debt in it, and then you’re able to grow that business.

And I think that’s one thing that’s really interesting. It’s one thing to work with something that’s already existing and running and doing well, but taking something that’s in the red or a negative and scaling it up, that’s powerful. Can you tell us what happened there? And especially what lessons can we learn from those today who may be running a very unprofitable, debt-filled business?

Owning A Job vs a Business

Tommy Mello:

Yeah, no, it’s a great question. I started in 2006, learned garage doors, I was painting them at the time. And me and another technician… I didn’t know the garage door industry, so it kind of was self-taught, and we went out there and just started a business, we didn’t know anything about marketing. We got into the yellow pages with [inaudible 00:02:54] when they were dying, got into ValPak, little blue mailer that comes in the mail-

Yeah. I did everything I could to try to make it, and we were really technicians trying to run a business, we owned a job. I mean, when the phone rang, I was at a movie, we were at the dinner, I was on a date, and I got sick of hearing the phone ring. I was the accountant, the marketing, the tech, the inventory guy, and my partner really, me and him, we just didn’t know enough about business. So, I decided to take on the debt in 2010, and be solo. He exited the business, we’re still best of friends.

Tommy Mello:

In 2010, I started reading a lot and learning about… I read the E-Myth Revisited by Michael Gerber. So yep, there you go. It’s a staple-

Yeah. I know, it’s an amazing book. And so, I read that, then I read The Ultimate Sales Machine, then, I read, The Richest Man in Babylon. My accountant kept giving me books. He’s like, “Read this one.” And I’ve learned to love to read. And in 2014, I got my integrator, which is Adam, because I’m a visionary, I’m a macro guy. And then, 2017, I got on the ServiceTitan CRM.

Ramon Ray:

By the way, before you go on about integrator, tell us what integrator means. And I believe some of that from Gino Wickman, I believe.

Tommy Mello:

Yeah, Rocket Fuel. Yeah, but that’s Gino Wickman, yep.

Ramon Ray:

Right. Tell us so those who don’t know why that word is so important, as we’re learning, teaching us as we’re going with your story. Why is that important?

Tommy Mello:

Yeah, absolutely. I took that as a skip over thing. So, the VI relationship is the visionary and the integrator. If you look at Walt Disney, he was an amazing visionary, but he couldn’t have done anything without his brother who knew everything. They are the more of the micro, they’re the guys that go and get it done.

So we’ve got a vision and a dream, but some of us live in the clouds, and we need these integrators around us to go get the work done. There’s people that have both of them, I’m not that person. I love to get stuff done, but I’m very good at calling out my weaknesses, and I’ve got a lot of them. I’m not good at time management, I’m not very good at organization, I’ve got all these people around me that handle it for me. Thank God, because I probably couldn’t pack my own lunch, because at this point-

Ramon Ray:

Tell me one thing before you go on with your story, which you didn’t finish yet. I interrupted you, but what is Tommy good at then? Let’s talk about what do you bring to the team? What’s your skill?

Tommy Mello:

Yeah, well definitely the visionary side of things. Like I’m a dreamer, and then I put the dream into a vision, and then I document it. And I kind of know where we’re going, but I’m really… Marketing and sales are my two favorite things in the world.

Tommy Mello:

I love marketing and I love sales.

Ramon Ray:

I love it. So I want to come back to that. But you were saying, you were with your partner, you went solo, read a lot of books, got a bit smarter. You got an integrator, that’s where you’re at. Go ahead, you got an integrator.

Tommy Mello:

Integrator, then 2017, we’ve got an amazing, we were on our fifth CRM and we found ServiceTitan. And it’s kind of like the salesforce of home service. It’s just, it’s got everything. And we were the first garage door company… No one would let us on the system, they said we only do HVAC plumbing and electrical, and I begged the CEO and he said, “Fine, I’ll let you in.” Now the company’s worth 8.2 billion, and-

Ramon Ray:

Their company?

Tommy Mello:

The ServiceTitan, the CRM.

Ramon Ray:

ServiceTitan, yeah.

Tommy Mello:

And it’s just crazy. But no, our business this year, we’re on pace. We’ve got 360 employees, we budgeted 84 million with a couple of acquisitions, I think we’ll be over a 100 million this year.

Tommy Mello:

And then goal is to do a billion. So, what I did is I wrote down, Grant Cardone 10 times. I used to have this number a 100 million, so then I wrote down a billion, and all I did is backtrack. I say at 500,000 a technician, I need 2000 technicians. Then I built that into a four-year plan, kind of hockey-sticked it.

Tommy Mello:

Built it into year by year, quarter by quarter, month by month, week by week. And I said, “I’m going to need a training center, I’m going to need full-time recruiters, I’m going to need full-time trainers.” Now you come look, I’ve got seven full-time trainers, four full-time recruiters. And this is what we do. We do garage doors, we do it really, really good.

Ramon Ray:

And are you building then, your own ecosystem. Any 17 year old guy, 21 year old girl, can come through your system, they know zip. I’m just repeating what I think I’m hearing. You will train them garage doors, then you’re going to hire them, and they’re part of your force in a good way, to service garage doors and more. Am I hearing that correctly?

Hiring Good People

Tommy Mello:

Yeah, a 100%. Most people say, where do I find people with good talent? And I say, “I just need a good canvas.” You’ve heard of BNI business that work international? You know a lot of people do a one minute 60 seconds, tell me what you are. So you stand up, and I basically say, “Hey, my name is Tommy. I own a garage for a company, we fix and replace garage doors, but that’s not why I’m here. I’m looking for amazing people, if you know somebody ambitious, that’s always smiling and wants to go get and earn a career, if you know someone who wants to learn from nothing, I don’t care, if they work at an Amazon Fulfillment Center, wherever they’re at, if they’re a bus boy, whatever they might be, I want to help train them and make them an amazing career that delivers six figures. We give a brand new truck, we give a brand new iPad, we show them the ropes, we can send them, right now, we’re in 17 states.” So, that’s the gorilla marketing, you need to be a nice side.

Ramon Ray:

I love that, man. So let’s go back into how-

Tommy Mello:

So many people market for customers. I market for employees.

Ramon Ray:

I love it. And as a leader, that’s probably your job. You have other people who can market for employees… So let’s go back then to that growth of between 2007, 2017, this 10 year, and how’s grown. What are some of the steps that you had to go through? Because you are losing money, you’re unprofitable, things were not going well, you hired an integrator, I got that.

Ramon Ray:

But walk us through some of those key pillars Tommy, that were the key to success to where you are today, I’m sure it didn’t happen overnight, and I’m sure you fell on your face maybe a few times on that journey. Talk to us about that.

Tommy Mello:

Well, there’s a lot of things that happened that some of the biggest things that happened was I met a consultant named Al Levi. He wrote The 7-power Contractor, and he came in and said, “Show me your manuals, show me your arbitrage, show me your depth chart. I gave him this big old dusty book. And he goes “No”, he goes “You got to teach your people how to win the game.” So we’ve created performance pay for a lot of the employees, that was a win… They made way more money than they were making… A lot of people quit, when they realized that they had a stake in the outcome, they didn’t really want to work.

Tommy Mello:

Our key performance indicators started improving dramatically. So that was a big piece, it’s just, really sitting back and saying, “Let’s design, let’s get a plan, let’s build each and every role, what’s expected of them, let’s teach them how to play the game. And then the key performance indicators are the score, and if you’re scoring well, you’re making good money. If you’re not, we’re going to work with you and coach you, unless you lie, cheat, or steal.” So that was a big piece of it.

Tommy Mello:

And then, what I realized more than anything is, I’m not good at a lot of things, so I’ve surrounded myself with everything I’m not good at. And I became a coach, I’m a cheerleader. I’m the guy that literally, will be talking about the core values of the company all the time. We talking about the mission vision, we talk about one-on-ones, and anytime there’s a carrot, there’s a stick, but I want to learn more about your family. I’ll spend 45 minutes and an hour, talking about dreams and ambition, and what our goals are in life.

Tommy Mello:

And the last 15 minutes, we’re probably going to talk about what you’re doing really good, or we’re going to have you help me train other people with your assets. And then we’re going to talk about maybe some things that we can work on together, and that’s our improvement plan. And even Tom Brady needs to be coached. I think a lot of the problems is, so many people focus on the bottom 20%, when they can take the top 20 and improve them by a 100%, and be doubling their profit a lot quicker, than trying to get that bottom guy to the top.

Tommy Mello:

I think the fact is too that, we’ve created an environment for winners, and a good employee… Don’t take this the wrong way, but I don’t really want good employees, I want great employees. Good employees, they stick around, they don’t really move the company. They’re okay, they don’t get noticed, but they don’t get yelled at. Bad employees get fired, good employees slow down the company, great employees accelerate. And so many times we find ourselves okay with okay.

Tommy Mello:

We’re okay because, the employees are hard to get right now. Employees are hard to get, because you put it out on Craigslist, and you expect them to come running to you. You got to create an environment where, they’re coming from every angle. Every single job applicant forum, every single meeting, every single… You know they’ve got job fairs, you should be on all social media, you should turn your internal team into recruiters. I give my employees 1500 bucks, if they find someone good that gets hired. There’s a guy that made 15 grand last quarter, and I’m like, “Good, you deserve it, you found 10 great people.”

Ramon Ray:

Wow, this is powerful. And then I’m curious Tommy, tell me about the garage door industry. For those who don’t know, can seem like “Garage doors? What are you talking about? Billion dollar company?” Can you help us understand the industry in our… Is this normal, what you’re doing in your industry? Or most of your competitors, they’re like, “Man, what’s this guy drinking, how do we get to Tommy’s mojo?

Tommy Mello:

We’re the largest garage door company in the United States, it’s not a franchise. I do think that most companies, they’re not prepared to bring on somebody and train them, it cost too much money. Each employee costs about 25 grand that we do that with. But if they’re making 500 grand, it’s a fart in the wind, really. But, it’s an investment. It’s not a cost. When you start viewing things as an investment versus costs, and you truly believe it’s an investment, is when you change your whole reality.

Tommy Mello:

I can tell you that, I learned everything I know by going out to garage door companies. I’m sorry, HVAC companies, plumbing and air conditioning companies. So I fly out to Michigan, Florida, Texas, I’m all over the place visiting HVAC shops, saying… See garage doors is where HVAC was in the 90s.

Ramon Ray:

Okay.

Tommy Mello:

No one has good books. No one figured out how to hire, the Association’s not very powerful. No one understands this beautiful thing called arbitrage. And I want to explain this to you and your listeners, because it’s amazing. It’s better than selling drugs, it’s the best thing on earth. Not that selling drugs is good, but-

Ramon Ray:

I got you.

Tommy Mello:

So, if I could buy, let’s just say there’s a $2 million company. So 2 million in garage doors, and let’s say, they’re bringing in 10%, so they’re bringing in 200 grand. Now there’s something important here, is that means, the company is bringing in 200 grand, and the owner’s still paying themselves a 100 grand, because if the owner’s not paying themselves, that’s really not the company making 200 grand. So 200 grand profit, we call it EBITDA, when you could add back other things, earnings before interest, and I won’t go into all that, but I might give them five times their profits.

Tommy Mello:

So I might give them a million. But the beautiful thing is, the day I buy them and get them under my CRM and my policies and practices, I’m worth 15 times. So I paid a million, I’m worth 3 million for what I just paid. So arbitrage is when you could buy something in one market, and it’s worth something else in another market. It’s almost like there’s a clipperish… There’s used to be clipper ships in the 1860s for the gold rush, and they take shoes and necessities from New York all the way around these fast ships, will go all the way to the gold rush in San Francisco, and that was worth six times more, what they paid in New York.

Tommy Mello:

Well, that’s the same thing, what happens with companies is I buy them up, I’m actually worth a bigger multiplier. And it’s crazy because it’s so much fun when you get to the point where you could start actually buying companies, you become acquisitions. I’m what you call a platform company. So I could take my platform and lay it on top of companies, that are worth a lot more money. So right now for me, it’s literally just so much fun. You might think, “Man, this guy, he’s got a lot going on. How does he sleep?” Well, I’ve got really nice bed, brand new pillows. Just kidding.

The Art of Scaling

Ramon Ray:

I love it. I’m curious, can you talk about the scalability part? How you’re doing, and when you buy the company, what are you adding, they didn’t have? Are you bringing, are you buying their five, 10, 20 technicians, Are you getting their client base? Talk a little bit about the Tommy system, how that works. What’s the advantage to you? How are you able to spin that up?

Tommy Mello:

Well, the way that a platform company works, is the reason why the higher cashflow you have of profit, the less it requires one person. So if I was to leave, for example, the company still runs itself. And the bigger we get, there’s not one or two players that’ll cause it to diminish. I’ve been through COVID, I’ve been through 2008, the housing crisis, we are sustainable, we’re what you call an essential home business, and I didn’t deem that on myself.

Tommy Mello:

We’re very fortunate to be able to have that, because there’s a lot of winners right now in this economy, there’s a lot of losers. And I don’t mean losers, just, they got the short end of the stick. And what I mean by that is hospitality, and the movie theaters, and it’s unfortunate. But what we’ve learned is, private equity is warming our way, capital venture list… There’s so many people that want our cash flow, what they’re learning is, you were part of software. You started Infusionsoft.

Tommy Mello:

And they’re learning that those multiples, just, they’re not sustainable. Then they’re going to come down, I think in software, because they’re burning money faster than they could make it, they never need to make a profit, and it’s because of an arbitrary profit and loss, and it’s just… The reason why that people want us is, we’ve got better key performance indicators, we’ve got a higher conversion rate. Average ticket cost per acquisition is lower. Very good at booking phone calls, but more importantly, it’s sustainable, it’s big, it’s bringing a lot.

Tommy Mello:

So they say, for me to go from buying 50 garage door companies, to them come on and give me 500, is a lot easier from a guy that bought two, going to 10, believe it or not. We’ve already got the systems in place to handle it, so they’re going and looking at this, how quick, and under a five-year term, could I get this valuation a triple?

Tommy Mello:

So they gave me 500 million, can we get it to 1.5 billion? They’re building it off the backs of our operations and us, the bigger we get, the faster they can consume. They look at it like, almost like a virus. How quickly can you go out, and get everything you want? It’s interesting, but what they got to do is, private equity raises money from anywhere, from school systems in districts, to even governments.

Tommy Mello:

Governments invest in private equity, there’s millions of billions, or billionaires, and there’s… Private equity gives you fast ROIs, and it’s much better than… It’s safe, somewhat safe, because they’re really… they’re going through doing quality of earnings, they’re making sure that it’s real cash going in, they’re making sure it’s good accounting. They’re doing an asset purchase only, so they don’t have the liabilities most of the time. And they’ll do background checks of every single main manager, it’s crazy what they do, but when you through, it’s a win-win.

Ramon Ray:

Got it. That’s powerful. And that’s the asset side, and the capital side, and industrial side, which is powerful. Talk to us a bit Tommy, then also about what is your message for smaller companies who want to emulate what you do? You’ve used the word system quite a bit, is that one of the keys to what you’ve been able to do, to be able to systematize, I’m guessing everything pretty much you’re doing, to hiring, see, clearly it looks like you have that dialed down, where your customers are at, looks like you have that dialed down. So talk about that systems a bit, if that’s one of the keys of your success. Yeah.

Why Companies Fail

Tommy Mello:

Well, I’ll tell you, there’s three reasons why a company fails at anything, you don’t have a system, is number one, You don’t have a system as number one. Number two is, you’re following the wrong system… I say these all the time, and I’m very-

Ramon Ray:

That’s okay. You know, how we shouldn’t have followed the wrong system.

Tommy Mello:

Wrong system, or-

Ramon Ray:

You need a system, you don’t have one at all, maybe.

Tommy Mello:

Yeah, wrong system, not following the system. So you’re not following, you’re at the wrong one, or you don’t have one. There you go. So, everything I do is, I come back and I say, “What can I do, and expect the result? So we’ve got two trucks now, we’ve got our service vans, and our install trucks. They look the exact same, we’ve got the same set of tools for every single employee, we’ve got the same… Every time I go into a new market, I go onto my little chart. I actually have a project manager that does it. It’s an Excel sheet. We order the same ping pong table. The same wall art, the same rugs, the same computers… We update the computer one every six months, but everything’s the same.

Tommy Mello:

So when I walk in, it looks and feels and smells the same. It’s the same company. The trucks look the same, the same uniform, the same tools. The more you to get an expected output, the better off you’re going to be.

Tommy Mello:

Okay. And does, that go with your hiring as well? Like when you hire people, do you have a kind of a template? Questions to ask, things of that nature. You’ve got to go and things of that nature.

Tommy Mello:

You got to go do a ride along, we’re looking at how much are you on Instagram? Did you take cigarette breaks? Did you show up on time? Did you smell like alcohol? Then you got 30 days to apprentice, and then we’re looking at everything, even at a finer microscope. Then you got to fly to Phoenix, we’ve got apartments out here, we’ve got 25 apartments. And there are two or three bedrooms, and the guys stay together at different ones. And we’re looking to see if they’re the material we want. So we fly them out here, they hang out with corporate, basically, it’s kind of like corporate for 30 days, we get a… It’s kind of like top gun, you’re good, we’re going to make you better.

Ramon Ray:

I mean, these are your technicians who are doing this?

Tommy Mello:

Technicians yep. We fly everybody out to Phoenix.

Ramon Ray:

Wow. Tell me about what the competition, does it just hire somebody, go figure it out, and here’s a truck and move, it could be dirty, could be clean. Is that or no? What’s the-

Tommy Mello:

Yeah, basically they say “Here, your used truck, you know what you’re doing? Not really. Okay. Go ride with this guy for a month.” And then you look at them and then they go… These guys, a lot of owners get so mad and they go, they’re literally angry when they get into work, “They’re like, these people just can’t do anything right.” And the best way to describe it-

Ramon Ray:

It’s the owners fault. It’s probably the leader’s fault.

Tommy Mello:

What?

Ramon Ray:

It’s probably the leader’s fault.

Tommy Mello:

Well, you know, I don’t have children yet. I want kids, and I’ll tell you one thing I will do, because I’ve got a niece and two nephews. And when I work with them on their homework, when they were kids, I said, man, I know what two plus two is, it’s a lot easier for me to answer those questions. Maybe just fill it out for Emma my niece. But I said, no, I was very patient. And it was hard for her. I mean the first time seeing math, or spelling her name, and were very, very patient. And we said, look, you didn’t do it right, but let’s try it again. And then when you teach them how to ride a bike first, you get to keep them riding on the back of your bike with pegs to their adults.

Ramon Ray:

I’ve ever taught bike riding.

Tommy Mello:

Or you can say, listen, we’re going to start out with a tricycle, then we’re going to get you on training wheels, then we’re going to take the training wheels off, and you will fall, but uncle Tommy is going to be there to help you, right? Okay. We’re going to make sure. And every time you make a mistake, you’re not going to make the same ones twice. And I’m going to show you, and I’m going to teach you, I’m going to be here for you, and I’m going to be very patient with you.

Tommy Mello:

Well, we don’t have that same thing with employees. We go, what the hell is wrong with you? I showed you how to do it once you should’ve done it right the first time. And they’re not leaders, they’re literally, they’re angry because they don’t have the time, because they’ve got more business coming in or not enough employees or whatnot. And they really don’t own a company, they own a job. And literally they should go work for somebody else. I hate to say that. But the fact is that they think they’re building their retirement up, but they’re not. They’re not that the company’s not worth anything. If they make $300,000 a year and the company makes zero, the company will sell for zero. I hate to say that. But the basically you take the profitability and you give it a multiple, you add back your daughter’s tuition and everything you paid out of the business, but that’s it. That’s what the company’s worth.

Why Charge a Premium

Tommy Mello:

And some people say, maybe I overcharge. And I say, the problem is you think you’re taking care of your customers, but you’re shitting on your employees. You don’t have health benefits, you drive old vehicles, you can’t afford to do a billboard, you can’t afford air conditioning, or a good CRM, you think you’re taking care of your customer, but you’re really not looking at your own home, which is your employees and your family.

Ramon Ray:

And to your own home. I get also, you’re not taking care of your own legacy personally, for Tommy, for Ramon, to build a profitable business for ourselves. I mean, this is why we’re in business.

Tommy Mello:

Exactly. And for me, it turned in, the garage doors, we are pretty, I say this… I think we’re beating a lot of people, there’s very smart people in the garage door industry, but we’re pretty advanced, we let software make decisions for us. Meaning that, the way we dispatch people, we dispatch the best opportunity… You put Tom Brady in, during the Super Bowl. And I use Tom Brady, because he won the last Super Bowl, you put Phil Mickelson on the fourth day on Sunday. How about that?

Ramon Ray:

I got you. For sure. I’m curious. You talked a lot about hiring and employees and things. What about when you have to let someone go? I know you talked about, if they kind of did something really egregious, really wrong, stole or was unethical or something, but is there any point where you’d say, “You know what Ramon, you’ve been with A1 Garage for five years now, you still can’t put a garage door together, we’re going to have to let you go.” When does that come up? When you say “Ramon, it’s been great, but you’re a good person, you haven’t stolen, you’ve been ethical…” But is there any time when that happens? Or very rare, pretty much a good person can be trained to do anything. When does that happen?

Tommy Mello:

For us? It’s your compensation will be very low, if you’re not hitting your KPIs. So you’d most likely quit, but if not, you’re going to be on, what’s called the performance improvement plan, and after the third one, if you haven’t shown any… The deal is Ramon, I’ll tell you this. If you got a will, I’ll find a way. But for some reason, there’s some stickiness here, that’s just, it’s not happening.

Tommy Mello:

So what we’ll allow you to do, is allow you to interview for a different position in the company, that maybe you can succeed in, but right now, you’re not doing us, or you any favors. You’re set up to fail. Last thing you want Ramon, is me and my other managers here talking behind your back, on how we’re going to try to get rid of you, that’s not fair to you or me. So let’s sit down here, and figure out a way to have a win-win situation, and right now you should never be surprised if, I’m going to do this. First of all, you should have known this was coming.

Ramon Ray:

Yeah. I love it. And a couple more questions Tommy, thank you so much for your time today. What about who supports you? Talked about leadership at the beginning of our discussion? Tell me who’s the leader? Other small businesses struggle with this, who should be on my team? Not those on the front line, clearly, who you invest a lot in. But who’s your leadership? Who’s the one who’s holding that torch of the purpose, values, mission beside the technicians, who else is part of that team, and what’s your advice to us, as we’re looking to grow companies with other leaders? What’s your talk about that a bit, other leaders in the team?

Tommy Mello:

Well, readers are leaders. I’ve got a COO, I’ve got my head of service, head of sales, and I’ve got my CFO. And then I’ve got my regional manager, we’re kind of the collective six, that really are the next level. And then there’s another layer of directors. And what I would tell you is, so many people get so tied up in the day-to-day, that they never get a chance to work on themselves, and to sharpen their own tool.

Tommy Mello:

And what I would tell you is, if you want to make it with a company like mine, a lot of the guys that got us at 10 million, couldn’t take us to 40 million. And a lot that took us to 40 couldn’t take us to a 100, and a 100 to a billion, is another step. You got to take that extra hour each day, and read, and listen to a podcast, and work on yourself, and work out and have energy and eat right, and whatever that looks like to you.

Tommy Mello:

And if you want to hang around with successful people. I say this, “You want to become a good dad, hang around with great dads.” I tend to visit companies that I want to become, and get out of my comfort zone. That’s the best advice I can give is, find out a company that’s much bigger, and I wouldn’t say better, but as very… The air is different, you breathe that air for a while, you start becoming that company.

Tommy Mello:

And believe it or not, they like to pay it forward. They like to help. You can sit down with a CEO… A lot of the times I had people doing walk throughs here every day, and I’ll give them a couple names of books they got to read, and they’ll call me up a month later and be like, You have no idea how much this has transformed my company.” And I’m like, “Well, that just happened to me already, and it still happens to me.”

Who Do You Learn From?

Tommy Mello:

It’s just, it’s just interesting because, Grant Cardone says, “Hang around with millionaires, probably become a millionaire, but when he hung around billionaires is when he started to make the fastest transformation.” And not everybody has a billionaire that could just call on speed dial, but you could read the books by billionaires. So that’s the way I’d started, is to get on audible, and have a conversation with him on audible.

Ramon Ray:

Ooh, that is powerful, that is a nugget. And finally, but again, I always like to leave space for anything I didn’t ask, but finally, let’s talk about marketing, a bit as well. How are you marketing? How are you getting leads in and customers in, and then two, what’s your advice for other small business owners? And it’s a broad question, but the marketing and sales is often tough for people. What is the Tommy way? How are you doing it?

Tommy Mello:

Okay, this is my forte, this is what I got my degree in, and this is everything. First of all, this is not my book. I don’t make anything for it, but you got to have a brand, Dan Antonelli and I, wrote a pretty good book. It’s called, Building A Big Small Business Brand, and it really is getting the right logo, being… So many people, I drive by billboards, I drive by vehicle reps, and I’m like, “What the hell does that company do? They mention they got BBB, Yelp, Angie’s List. They got pole, but it looks like a canoe, it should be very, very easy what you do. And then you should create a really nice website, and answer a lot of questions, come up with a lot of FAQ’s, create a lot of helpful videos. Google is god when it comes to most services, you’ve got four algorithms that run on Google.

Tommy Mello:

You’ve got organic. You’ve got, what’s called the LSA, Local Service Ads, you’ve got the Google My Business page, with the reviews, then you’ve got Pay Per Click. I want to be on all four of those, I want to own them. I want to be on [Houser 00:28:43] I want to be on Instagram, I want to be on TikTok. I think social is one side, and then there’s the search engines. Direct response is great, there’s a good book called No B.S, about direct marketing. I love marketing, but I always measure it.

Tommy Mello:

I have 4,300 call tracking numbers right now, 4,300 different campaigns going out there. And I track each one of them to find an ROI, and the fact is, I got everything systematized. So I can tell you, somebody could call me. Let’s say, you’re a rep from ABC Mallard company. And they say, “Hey, how are we doing?”

Tommy Mello:

And I say “Like crap, you’re a 23% ad spend.” 23% means I’m getting less than a five times multiplier, so if I spent 500, I’m literally getting less than 2,500 back, which is bad, I want to live around eight to 10%. For some people less, some people more, depending on what their service is. But I can tell you the facts, and you can’t argue with me. And I can say, “Here’s our client list.” And they could say, “Well, then, you got to give it a chance. And I could say, “No, you need to come down on price, or we’ll do a performance pay, and you can give me all kinds of free real estate, wherever you got it.”

Tommy Mello:

And they have those numbers, I don’t make decisions on how I feel, I make them on facts, but it starts with the brand, and then it starts with having… Google is kind of a delayed gratification. It’s going to take some time to start working for you. And I think a lot of people are short-sighted, but the best marketing you could ever do is referrals.

Tommy Mello:

Get your friends and family first, if you do garage doors, go fix, go work on 20 of your friends and say, I want you to leave me a Facebook review, I want a testimonial, I want a before and after, I want a Yelp, I want an Angie’s List, I want a Google Review, I want Next door. I mean, look, get them to do all of it, that’s what MLM programs do. MLM says, “Start with your family first.” And you just start with family, and friends, go do them a service, practice on them, and you’ll get it done and never remap… You know the number one thing you could do is referrals.

Ramon Ray:

Yep. Since we’re sharing books-

Tommy Mello:

Be really good at customer service.

Ramon Ray:

No, I love it. Since we’re sharing books here, you probably know this one already, but if not, I’m happy if you don’t know it. So you can do that is, They Ask You Answer.

Tommy Mello:

Are you kidding me? Marcus Sheridan.

Ramon Ray:

That’s your boy.

Tommy Mello:

Yeah, did my podcast, here’s his other book. Visual Sale.

Ramon Ray:

Yes, I love it.

Tommy Mello:

Yeah, no. He’s the one that got me interested in HubSpot.

Ramon Ray:

Marcus is good people.

Tommy Mello:

Oh man. No, They Ask You Answer, literally like building a buyer’s guide. Oh manual, it’s so funny, he said that. No, it’s amazing, he’s the only guy I know that outranks me on Google. Literally, he’s the only one I know has pool company.

Ramon Ray:

I love it. Tommy, anything I didn’t ask, anything you wanted to share, I know we talked about a lot of things, but I always like to give space, if there’s a nugget or something, “Man, I wished you would have asked me this, or here’s how I could help others.” Anything you wanted to share with me today now?

Tommy Mello:

I would say that sometimes, there’s… I was a business that was really set up the wrong way, and I had to take 10 steps back to take a million steps forward. I’m very good under pressure. I’m very good under a lot of stress. I don’t have any anxiety, I don’t wake up… A lot of owners become owners for the wrong reasons. I’m here to leave a legacy. I feel like leadership as a good quality that I partake in.

Tommy Mello:

I don’t think that every business owner should be… I am not trying to talk down to anybody, but there’s so many people that are so stressed out, and they’re literally aging 10 years a day, and they’re just frustrated, and they got to go home and drink themselves asleep, or smoke 10 packs of cigarettes, and I just would say is, some people got to ask themselves a serious question… I don’t want to leave on this note, I got some good motivating things too, but-

Ramon Ray:

That’s all good.

Tommy Mello:

Are you really working 80 hours a week to make a 40 hour salary? I just, I don’t know if that’s the best thing. I watched these companies, and I’m like, “Man, it’s so hard.” But, what I’ve done well, is really hiring a personal assistant [crosstalk 00:32:58] and she does everything. She got me ready for this podcast, she gets everything, Everything’s, I know where it’s at, she’s got everything lined up, you should see my calendar, everything, call my mom at this time, do this, set up this trip, it’s all down to a science.

Tommy Mello:

And I’ll tell you, hiring for your weaknesses, is the best thing I can say is, hire around your weaknesses, and watch how fast you can move, but know what your strengths are too. And I would say, most people say, I like to be well-rounded, I say, that’s BS. Be amazing at what you do, and then if you get a chance, read the book The ONE Thing, by Gary Keller, and understand that we get all these ideas that are entrepreneurs.

Ramon Ray:

I have that too.

Tommy Mello:

We want to do a little bit of everything, and the thing is, have tunnel vision on what you’re focused on. I used to say, “Put your eggs in a lot of baskets.” My buddy said, “Put all your eggs in one basket, and see how much it fills up into the other ones.”

Tommy Mello:

I did write a book called the Home Service Millionaire, and it sucks so bad, so I decided to get 12 co-authors, and I rewrote it to meet two years, and I feel like we did a pretty good job, to teach you how to hire A players, how to get a manual together, how to have a financial quick check meeting every single week, to know what’s in your bank account, to know what’s going on Profit First by Michael Michalowicz, that’s great book.

Ramon Ray:

My Friend.

Tommy Mello:

Look at this, look at these. We are the same. So, understanding your financials, I’ll tell you most business owners don’t understand any… Here’s a good one too, Double Double.

Ramon Ray:

I don’t have it, and what I’m going to send you as my gift to you is my own, The Celebrity CEO, how to build your personal brand. You already know how, but [crosstalk 00:34:32].

Tommy Mello:

Yeah, it was great. Yeah, and I’ll send you a copy of mine. Yeah, no, that’ll be great. I love these podcasts, man. I’ll tell you the smartest thing I ever did, was start a podcast, because it put me in touch with people, and let me… It’s almost like it’s not only networking, but it’s therapy for me. Sometimes, it’s kind of like when you train, have you ever trained with someone in the gym?

Tommy Mello:

All of a sudden you’re like a trainer, you’re like [inaudible 00:34:58], five more reps, and it’s so much better. Well, the best of me comes out on podcasts, and I really, I just enjoy the crap out of these things, and I thank you very much for letting me on.

Ramon Ray:

No, Tommy, listen, you do it so well. And one more time Tommy, give us your full name, and the name of your company. And if you want a website or anything, how we can reach you, if you don’t have a personal site, your corporate site, whatever you like.

Tommy Mello:

Yeah, well, I do have a lot of sites. Tommy Mello, M-E-L-L-O, there’s no W at the end. So, M-E-L-L-O. The book is The Home Service Millionaire, the podcast is Home Service Expert. I actually had Michael Gerber on, he actually came into my office, it was pretty cool. And the website is a1garage.com, it’s getting updated this week, so look for new things. But it’s important, anybody that’s out there, you go to H rafts, and check out your web domain authority, you can see it, it’ll show you all your back links, that’s an asset.

Tommy Mello:

And the last thing I say is, really think about what a cost is, versus an investment. A lot of people make that mistake, because they think they’re spending money on SEO, they’re actually investing in SEO, but you got to find good people, because a lot of people are just… They’re the middlemen, and they’re hiring virtual assistants to do everything, and those are not necessarily the best, but I enjoyed this very much. You ask a lot great questions.

Ramon Ray:

You made my day, Tommy. Thank you so much.

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