Transcript

Harnessing AI for Financial Insights with Mike Barnhart

From Home Service Expert · Episode page · Watch on YouTube

· 1 h 6 min · 14,172 words · 92 timestamped sections

This is the full, timestamped transcript of "Harnessing AI for Financial Insights with Mike Barnhart", an episode of Home Service Expert published May 9, 2025 (1 h 6 min, about 14,172 words). It mentions 11 people, works and ideas, including Eco Plumbers, Mike Barnhart, Aaron Gainer, Service Titan, Nibal Rabicant.

What this episode is about

Mike Barnhart, COO and CFO of Eco Plumbers, shares his expertise in financial management and strategic planning, highlighting the company's impressive growth trajectory from $1.9 million to a projected $91 million. He emphasizes the importance of data-driven decision-making, proper allocation of funds, and the need for clear financial metrics to ensure sustainable business success.

Key takeaways

  • Scaling success takes time; patience wins when financial acumen meets strategic initiatives.
  • Investing wisely isn’t just about the money; it’s about the right kind of reinvestment.
  • Greenfield growth offers organizational control, while M&A risk lurks behind shiny acquisitions.
  • Ambitious goals without past performance are just wishful thinking—validate your aspirations!
  • The grind for growth often means sacrificing personal time; align your goals and lifestyle wisely.

Who speaks in this episode?

What is discussed, and when

  1. – 10:00: Eco Plumbers, Aaron Gainer, Mike Barnhart, Cortech
  2. – 20:00: Eco Plumbers, Service Titan, Cortech, 1800 Got Junk
  3. – 30:00: Service Titan, Great by Choice
  4. – 1:00:00: Service Titan
  5. – 1:06:23: Nibal Rabicant, Unreasonable Hospitality

Notable quotes from "Harnessing AI for Financial Insights with Mike Barnhart"

  • All right, guys. Welcome back to the home service expert. Today is a special day. I've been trying to get Mike Barnhart here for three years. And we've been talking about just…
    about Mike Barnhart · at
  • He met Eco's owner Aaron Gainer in 2013 and officially joined the company in January 2015, helping Eco plumbers grow from 1.9 million to a projected 73 million. Mike is known…
    about Eco Plumbers · at
  • Business right now and I obviously under NDA, but it would cost us about $30 million to buy and Cortech, our sponsor, said would you rather put that money into marketing or buy in this business?
    about Cortech · at
  • Jewelry stores and then companies started using him for home service and home improvement. 1800 got junk I believe was one of the first ones and they're a monster and you know…
    about 1800 Got Junk · at
  • They're readers. but one of the things that we do in our business is, Jim Collins, he had a book called Great by Choice. Talk about bullets and cannonballs. And, you have you've got your I heard you on your podcast, you've got your four.
    about Great by Choice · at
  • Don't remember this. you called me and I'd only been at Eco for about six months and I'd kind of implemented Service Titan, built out the price book and all that within Service…
    about Service Titan · at
  • Time building your network both professionally within the industry and then I mean there's other like I'm part of a group called YPO that I've really enjoyed and I mean sort of…
    about YPO · at
  • The I always pick like a book from my favorite year. So like in 2022 I loved the almanac of Nibal Rabicant. You talking about wealth and happiness. 2023 I read this book called unreasonable hospitality. And for I mean.
    about Nibal Rabicant · at

Who and what is mentioned in this episode?

People

  • Mike Barnhart — Person · Main guest · 1 mention · first at
    Primary interview subject; discusses scaling Eco Plumbers, finance/ops KPIs, budgeting, incentives, marketing spend, and using AI for financial analysis.
  • Aaron Gainer — Person · Referenced leader / business partner · 2 mentions · first at
    Owner/leader of Eco Plumbers and key counterpart to Mike; repeatedly referenced for marketing leadership, growth strategy, and relationship with the host.
    He met Eco's owner Aaron Gainer in 2013 and officially joined the company in January 2015, helping Eco plumbers grow from 1.9 million to a projected 73 million. Mike is known for his.
  • Nibal Rabicant — Person · Referenced author (misnamed in transcript) · 1 mention · first at
    Mentioned as the author of a recommended book; the transcript likely refers to Naval Ravikant and 'The Almanack of Naval Ravikant'.

Books & papers

  • Unreasonable Hospitality — Book · Primary recommendation · 1 mention · first at
    Recommended for insights into customer service and business excellence.
    2022 I loved the almanac of Nibal Rabicant. You talking about wealth and happiness. 2023 I read this book called unreasonable hospitality. And for I mean so I'm always the…
  • Great by Choice — Book · Referenced work · 1 mention · first at
    Referenced for strategic planning and business growth insights.

Companies & orgs

  • Eco Plumbers — Company · Business focus · 4 mentions · first at
    Primary company discussed, focusing on growth strategies and financial management.
  • Service Titan — Company · Case study · 3 mentions · first at
    Discussed as a tool for financial and operational management in home services.
  • YPO — Company · Professional network · 2 mentions
    Mentioned as part of Mike Barnhart's professional development and networking.
  • 1800 Got Junk — Company · Case study · 1 mention · first at
    Referenced as an example of successful marketing and business growth.

Places & events

  • ASU — Place · Educational setting · 1 mention · first at
    Mentioned in the context of Aaron Gainer's son attending.
    Podcast originally. Turned Aaron on to me and little did you know that Aaron's son Chase moved out here to go to ASU. So Aaron's out here a lot. We share a lot of business…

Sponsors

  • Cortech — Company · Sponsor · 2 mentions · first at
    Mentioned as a sponsor and advisor in financial and strategic decisions.

Full transcript with timestamps

All right, guys. Welcome back to the home service expert. Today is a special day. I've been trying to get Mike Barnhart here for three years. And we've been talking about uh just how to get him on the podcast. He's a busy guy. He is acting as the COO, the CFO, shared services within Eco Plumbers. You guys know I hang out with Aaron Gainer quite a bit, but Mike started listening to the podcast originally. Turned Aaron on to me and little did you know that um Aaron's son Chase moved out here to go to ASU. So Aaron's out here a lot. We share a lot of business advice of what's going on good, bad, and ugly. Uh Mike's an expert in finance, strategic planning, performance management. He's located in Columbus, Ohio. He's worked uh quite a few places. Uh I know Victoria's Secret is my favorite one.

Uh he met Eco's owner Aaron Gainer in 2013 and officially joined the company in January 2015, helping Eco plumbers grow from 1.9 million uh to a projected 73 million. Mike is known for his strategic initiatives uh financial acumen and emphasis on datadriven decisionmaking. What's up, brother? What's up? I got I gota I got to fix one of those numbers. Uh we did 73 million last year. We're going for 91 this year. 91. You see, you know it's a CFO when they're like, "So, normally people say 90 or 100, you say 91." 91. So, what's a healthy bottom line on 91? Uh, usually people say 15%. Yeah. I mean, 15%'s a good one. If you can get to 17 or 18, you're doing even better. That's true.

What do you consider uh failing? Under 10. Under 10. in growth years. One of the things I've realized that I always used to tell myself before I got a great CFO is I keep put I always used to say I put the money back in. Hey, I put the money back in. I put the money back in. But I didn't realize unless it's going into marketing or strategic hiring uh or some type of like PowerBI analytics. I wasn't putting the money back in. I was actually wasting the money and I just lied to myself. You know, our strategy has always been in green fielding, but still like our Cincinnati location, we still lose money in it today, you know, and we're a year and a half in, but you know, our advertising spend is 35% of revenue right now. So, you know, you you're doing that because, you know, when you look at the success success story of it, like our Dayton location, we opened up in 2021. This year, we're doing $20

million in Dayton and it's super cash flow positive. It's actually the highest margin in location business right now in our business. So, you know, it's it is a little bit different as you're scaling and how that changes. I've got a business right now and I obviously under NDA, but it would cost us about $30 million to buy and Cortech, our sponsor, said would you rather put that money into marketing or buy in this business? And I'm like, aha. I'm like, I'd rather put it into marketing. So, you're going to give me that over and above what we spend today? It's, you know, me and Tom Howard are having a debate actually at Rhino about Greenfield versus uh or Greenfield versus buy and build or u you know, buy and build or M&A and he likes M&A way better. I I feel like you got to find the right company and then you got to there's a lot to be done on integrations, changing the culture, you lose a lot of the employees, but you're

buying the lead source. I don't know. You guys haven't done much acquisitions, but where is your if you had to pick and choose? I think Greenfield allows you to take your own shot, call your shot, grow whenever you want once you build that playbook. And I think it's worth more. If I'm going to buy your company, I'm going to say, man, these guys figured out Greenfield. Yeah, they could scale to any market at any time. It is, it is slower for sure. You know, and you talked to Tom Howard. I remember I asked Tom one time. I was like, tell me about, you know, a tuck in that didn't go well.

And he's like, they've all gone well. you know, so maybe some people are better than others, but you know, with green fielding, it's it's kind of crazy because yes, it does take three to four years to really adopt in the market, but once you've hit that kind of threshold, it's like you've always been there. It's like you've been there for 20 years, you know, even though like once people do pick up your name. And really, I mean, anything that we've ever I don't know if you've seen this, but anytime I've ever like made a change or, you know, we used to just be plumbing only, then we added excavation, then we added HVAC, we added electrical, we added other locations, like you have these like changing points within your business and they all from the minute you make them and you start to enact them, they all seem to take like 36 months to get some traction.

Maybe you're can make it a little faster than that with as many as good as you are, but like it always has taken me three years to really build something. Yeah. You know, that's the thing. People overestimate what they could do in one year, underestimate what they could do in five. Everybody wants it tomorrow. They're like, I I look at people's budgets and I'm like, wait, you're going to 3x this year? But you never 3xed? Like, why? Why this year? And they're like, well, you know, I'm focused now and you've proven it's possible. And I think some people unfortunately listen to this podcast are trying to live my dream and do what I did, but they don't know the sacrifice it took. I don't have kids. I'm not married. I didn't spend enough time with my niece and nephews. I don't know what your thoughts are, but you know, your goal should be to get to an exit that provides for you, your family, and takes

care of you, and hopefully get to roll equity and continue to We like to grow things. I mean, as as a COO and and part owner of Eco Plumber, I'm sure you're you're like, dude, you're enjoying the growth more than probably maybe trying to hit the finish line. What do you what mentally? How do you look at the growth of uh Eco? So yeah, I mean, you know, to to look at it throughout the years, I've been doing it for 11 years now. We've gone from 1.9 million to, you know, 91 million this year. It's been a really rewarding journey for sure. You know, you do have those kind of pressure points along the way where you do hit these parts of scalability that the field's really rough and then you kind of push through them and a lot of that's really comes down to the infrastructure that you build within your company. You have good people, you've got the right meeting cadances, you've got the communication rhythms. And for me, it's,

you know, I've never stopped being really curious about the business. Um, you know, for any CFO out there, one of the things that I do every Sunday, and I've been doing it for 11 years now, I send out an email to the whole management side and leadership side of the company of here's what I think about last week. And, you know, I go through about 20 different reports that, you know, I've got kind of flagged on my side. And I look at them and I look at them every Sunday and I start to see trends. you start to understand that business and then you become a really good storyteller and you know you're not going to do that if you're not curious but once you get able to tell that story like this year I was actually I went to the management team and I was like hey I think I'm going to stop doing this email I'm still going to do it for myself and they were like no you have to keep doing this email because it it really does

highlight out what is happening within the business where we have areas for opportunity where are there anomalies in the business and then you can you know I'm not the one that's most of the time fixing them these days but I'm helping people understand what's happening so they can address it. You know, Aaron was telling me you guys are playing around with AI chat GBT and you loaded stuff in and it said something like renegotiate with your vendors or something crazy like what exactly how are you as from a CFO COO perspective using AI? Yeah, I mean I mean at the basic level it's like why you don't have to it's you know the nice thing about like chat GPT is how easy it is to use. like I just load our PDF financial statements in each month and then I'll ask it questions about it and I'm pretty good at, you know, understanding the business, but it will pull things up that I didn't actually see within the business because you can

ask really specific questions like I could put January of 24 and January of 25 and I say and but it has every month in between. and I say, you know, compare this against the last quarter and compare it against January of 25 by location and I want to specifically look at the sewer department and it'll give you like a really, you know, detailed answer on on what's going on with that. And you know, you're I don't know why every CFO doesn't do this because it's the time it takes to do it is under a minute and you know, I was screwing around with Chad GBT yesterday. How do you you know I got the app that goes online and you log in but what's the easiest way to upload a document like a balance sheet income statement or P&L?

Yeah. So and that's that's the really intuitive thing about chatd. I do use the desktop version more than the app but you can you know you just load it right in there. It doesn't have to be in any sort of format like it knows how to go read it and pick up the the correct information and you can ask you know extremely detailed questions if you want to get in on it. So, do you have your favorite, this is supposed to be a very helpful podcast to people out there, so maybe you'll share, maybe you won't, but do you have like certain prompts you use other than comparing year-over-year?

Um, a lot of times I'll look at location differences. So, like I want to see how locations are scaling on margin. You know, as as CFOs, we definitely care about margin. And, you know, that's that's the nice thing as you you know, when you're green fielding a location, you can get to margin stability before you can get to cash flow stability. And you you want to keep focusing on how do I actually just ma make this a margin profitable business where you know some some people have gross margin of 50% some people are 55%. Really depends on what your trade is. You know if you're heavy HVAC replacement you're probably going to be lower than if you're an electric residential you know service.

Um but you know trying to manage that 50 plus% margin across your business is always going to keep you super healthy. Um, you know, I remember it wasn't that long ago. It feels like yesterday where uh Aaron came and he's like, "We finally hired Kick Charge." And it really was built out of the fact that you guys were going into so many other industries. It couldn't be eco plumbers. Eco the plumbers, you know. Yeah. So, what was that like, you know, redoing your brand at How big were you guys? What was the revenue? So, we we did the brand started in 2022. So, we were about 40 million.

That's about when I did it with A1. Yeah. And Oh, yeah. He just showed me that your uh your pickup truck wrap. That looked pretty good. I want one of those. But the um Yeah, we worked with them because we added HVAC and electric and we worked with Wizard of Ads on that and it was adding electric was pretty last minute decision. Um but you know, the brand is eco plumbers, electricians, and HVAC technicians. That's very intentional. It's not eco plumbing. It's not eco electric, it's eco plumbers, it's eco electricians. It's about the people. It's not about the service. And so we rebranded as that, you know, made it more focused on the eco. So it's a, you know, it's very in yourrface. And, you know, even this year, so we're almost up to 300 trucks now. And we realized like we don't need billboards in Columbus, Ohio anymore. We have 250 of them going around. So let's put that money into a different part of

marketing. That's interesting. You know, I did want to bring up Roy Williams, the Wizard of Az based out of Austin, Texas. I went and visited him for a day. Drank uh quite a bit of wine. Uh learned a lot about Don Coyote. And uh you know, a lot of people don't know this, but if you want to go visit him, it's not easy to get the invitation, but it's 10 grand. He'll take you out to the nicest dinner, educate you on his whole process of how he comes up with his ads. He was the original guy that really made uh Rolex take off in a lot of the jewelry stores and then companies started using him for home service and home improvement. uh 1800 got junk I believe was one of the first ones and they're a monster and uh you know you guys started using them and it's one of those things where you got to trust the process because you might spend a fortune for the first 6 n 12 months uh but you're trying to be able to build

this thing in like their hypothalamus their memory bank to like when there's something happens with HI plumbing electrical they think of you they remember your jingle they like you they trust you and they'll wait a bit longer to book the Paul, they'll spend more money with you. They're going to smile more because they like your story. Erin's been telling me about the hate email you guys been getting. Like you got you're sound like a smoker. Tell me about working with with uh Roy. Yeah. So, I mean, you know, I'm the finance side of the business and I do some ops, but um you know, I've always been super lucky. Like Aaron's always handled marketing and sales strategy, but uh Roy seems to really like me. He calls me Bear. Um, but you know the we have a good relationship with them and you know I think the interesting thing is the way I look at marketing and the way that Aaron and him look at marketing are way

different. So like every time I've had an idea, he's basically like that's a terrible idea, Mike. Because I don't think that like I look at it like, you know, maybe connecting with the logic or the value of a customer. And he thinks about marketing more about storytelling and being an entertainer and really just like, you know, taking a minute to allow people to think about something else from their day other than, you know, what's actually happening in their lives. And for that, it's been a really good partnership. We've definitely created a storyline that happens within the business and um you know he's done he's done a great job for other companies as well. Yeah, we were out to visit Morris Jenkins about six months ago and you know the crazy thing about Roy Williams is he doesn't like working with anybody but the owner maybe like a CFO COO because he hates PE.

Yeah. Him and Aaron still talk every week. Yeah. Well, the problem with that is eventually, you know, uh if you're working on getting to a deal, which I think everybody should be, if you're in business, I could say this because I've been through it and I've got well, I was missing a lot of hair cuz I got like what is that called when you lose your hair? Alipcia. Alipcia. I got that through the process. It was like stress and it was super high stress. And uh now going into the next deal, I'm so excited. Like everything's running towards the next deal. like built to sell grow your EBA like find the not next best partner but a partner that could take you to the next level and um I'm super excited because for some reason I still feel like anything could happen you know anything could happen in the economy anything could happen within an industry I know it was really hard for HVAC you hear HVAC plumbing

electrical companies 2024 was a hard year 2023 was a hard year I don't know are you hearing that within the uh just the echo chamber of like I know you guys work with NextStar you know I've heard it from certain companies at the same time we just didn't experience it much. Like we did 25% organic growth last year. We're doing on right now. I mean yesterday we had our largest sales day in company history at almost $600,000. Um it's just it seems to be moving in our direction the right way. But I have heard that some even some of those PE groups have, you know, been down year-over-year, you know, four to 5%.

Yeah. So I've got a theory that we're going to be experimenting with that we're going to pour whatever our marketing budget is now. We're we're going to it'll be 250% of what it is today. Really? So like if if 100% is called 12%. We're going to be spending close to 30. Yeah. And the way that our CFO is structuring that is more in a way that uh it's considered green field. You know, it's considered an adback because that's what you spent to grow. I understand. And I don't know exactly. I don't but he does and you do. Well, your your business is so different than, you know, mine in the fact that, you know, if you have a replacement, you're probably not going to see that customer for a long time or unless you have I don't know if you have memberships, do you? Yeah, we got 50,000. So, la 50,000.

Wow. So, last year we made a big push on memberships and um we went out we sold 10,000 memberships last year. So, I heard like you talk about some of your core tenants this year, call center and marketing. One of ours is actually membership fulfillment. Like we have 30 students in our HVAC school right now to become clean check maintenance techs and and get good at the turnover. What's that? Getting good at turning over equipment right now. Well, the these are green people that have no industry experience. We're teaching them and then we'll flip them to the LTO experience eventually. But you know, for me that's the biggest unpart unknown part of our business. Like right now our call volume is so high. Um, and you know, historically we've always had about 70% of our customers be net new customers and that's becoming 60 and 50. And you know, it's it's becoming more and more repeat customers. And I don't know what

the impact of selling 10,000 memberships a year really does for your future call volume. And I I think I have a different view on memberships than most people. Like we on average, we sell between or we create about two 200 250 new members a week. People are like, "How do you do that many a week?" And I sell we sell for the discount and then we retain them because we offer a good level of service. You do. Yeah. You got to give a discount up front and then get them in for the reoccurring. But almost you're going to sell you're going to sell your other indust like electric or you know.

Yeah. But all these best practice groups are always like, "No, don't sell it on the discount. Don't sell it on the discount." I'm like, "Why not?" Like if I'm if I if I end up in three years with 50,000 members, do you know how strong that makes me as a company? Well, here's the deal that every PE company, including our our partner Cortech, you got to be able to prove, and a guy like you could prove this pretty simply, but he goes, very rarely have I seen throughout the last decade of looking at HI companies, this is this is coming from the PE companies, have I seen them build a profitable model for service agreements. I have so many and we collect this monthly fee 13 bucks a month per membership but we have a really hard time like here here's our biggest problem two things number one you never Keegan taught me this never pay commission to a maintenance tech you do not want the client feeling like

you're out there just to sell them [ __ ] when they just signed up because you'll you'll burn them you get bad reviews number two um and your goal is just to build a fence around the client uh and number two we've taken technicians that can't make it in the real world and made maintenance techs. I think that that's a mistake. Uh you got to teach them how to be lead setters. Just say, "Look, I'm just a maintenance tech. I'm going to take care of you." We learning this from Leland. I had a 29 point tuneup. Now it's 151 point tuneup. Make sure it's long and you take stuff apart and you send pictures to the client. And this takes time to learn this stuff because you guys are newer at this, I believe.

So, so don't send commission. Take a long time to do it. Just have them be good at selling lead setting leads. But do not do not take your your guys that don't make it in the real world will make a maintenance tax. Yeah. Because the maintenance tax can make the most money out of anybody in the company because this client already likes and trusts you. You know what I mean? Does that make sense? I do. I mean, and as a, you know, CFO of the company, incentive plans have always been like one of my biggest things that I focus on. So, you know, our strategy has always been why can't we pay the best and be the best company at the same time, right? Um, but you know, for anybody that's not using configurable payroll and service titan, like start using it. It creates visibility for your technicians to understand how they're going to get paid, when they're going to get paid, what they're going to get paid every

single week. Um, and you know, you can really design pretty good incentive plans through configurable payroll. Ryan from Chir always brags about how he turned on a couple campaigns along with you and Aaron and and just murdered it on, you know, calls that abandonment calls. And as much as you guys get, Eron is like, "Look, we can't book out sometimes. We're too busy." We are. And uh that's a good problem. And then I I just got done showing Aaron Lace AI. And I do believe like I I really don't think AI is in the call center.

Like I don't want to talk to AI. Not when I have something broken. I just don't. Yeah. So I do what I would want to do as a client, but Lace is built just to train our call center to get to 90 plus% and reduce our cancellations. And you know, we're going to do 300 million plus. So every percent we book and every percent we reduce cancellations is $3 million. And that's the way I look at it. We we tested Lace AI and then we ended up adopting it in the entire call center because it it is a really good coaching, you know, it it teaches even the reps how to be better.

Um I did just hear from Service Titan on Friday of last week that they used to have this feature called um second chance leads. Yeah. Yeah. But it was only if you were on phones pro and they just opened it up to everybody. So, what are what are your favorite KPIs from your perspective? Gross profit, obviously, bottom line, EBA, but what do you really year-over-year comparing the same month? What are some of the uh what are some of the things you look at that are your favorite KPIs? Yeah, and some of them probably aren't financial to be honest. Some of them more operational, but definitely uh you know, always looking at the quality metrics. So, we're looking at recall rates. We're looking at how many members are we rebooking or cancelling. Um you know, how many canceled calls do we have?

Those are what I call like the quality metrics. You're looking at your reviews every week. You know, every week we get about 360 reviews right now. On average, we have about three that are under four stars. You know, you're addressing what those quality measures are up front. I heard you say you're going back to all your one, two, and three star reviews to try to fix them. I will say that some of them are more around our our radio ads. Um, so those get removed. They do get removed. Um but you know definitely looking at quality metrics and then looking at you know certainly in our business model that turnover percentage is super important. So bring that up every week. The way that we actually sold 10,000 and created 10,000 new members last week we talked about it every single week. So Aaron and I still get on a 7 a.m. call every Wednesday with the entire field staff across all locations and we talk about certain

things and you know for 52 straight weeks last year we brought up memberships. that was something we just weren't going to drop until it was really adopted within the business. Um, but uh, let me ask you, so we go through this budget and I got to tell you, budgeting for a guy like me used to be useless. I used to think it put me in a box. Um, and you know, back in the day, we were on a cash versus cruel. We didn't know what like look, I've learned a lot. I think budget, like first of all, I think everyone should have a budget. I think every single human being should have a personal budget. I think every single technician, installer, warehouse guy should have a budget, a personal budget. Uh, and I kind of talk about budgeting by just understanding how many calls do I need, what's my booking rate, what's my conversion rate, what's my average ticket. And when I understand that, I could really build a

really good budget of things to target. And I think Adrian thought I was nuts. He's like, "That's not that simple." And then Core Techch, without my guidance, said, "This is how we build our budget through these KPIs." The exact same thing. Yeah. So, when you're thinking about a budget, what do you think about to put it together? Is it through lead genen and hiring and capacity planning? I mean, what are the things you're thinking about? Yeah. So, I mean, I love budgeting actually. It's it's one of my favorite times of the year. And there's a couple things I always do is one, when you say everybody needs to have a budget, you're entirely right. If you ever look up, you know, the four steps of exe execution, we always call the five steps of execution. You got to have your mission statement. You got to have your KPIs. You got to have your visual scorecards of whether you're winning and losing. That creates accountability and

then you can celebrate it. If you don't have a budget, you can't literally do any of those things. So, that's number one. Another thing that I always like to do with the budgeting um cycle is reflection on the past year. You know, successful people, they do two things. One, they are they reflect on what is happening in their lives and usually they're readers. Um, but one of the things that we do in in our business is, you know, Jim Collins, he had a book called Great by Choice. Talk about bullets and cannonballs. And, you know, you have you've got your I heard you on your podcast, you've got your four cannonballs, you know, you've got your call center, your marketing. We do the same thing as as we look at throughout the past year. What are all these bullets that we fired and what are all the small things that we like tested out to see if they were going to work or not? and which one of those should we

actually dedicate a lot more traction to within the budgeting process getting at the budgeting level. I actually work with the GMs to build each of their budgets in each location and we start out at the department level at and you know your basic KPIs. How many texts do you have? How many calls per week are you going to run? What's your conversion rate? What's your average sale? And that should drive revenue. Um, we do budget a lot of other metrics on that, but you know, every time I do that with the GMs, like we did that this year, and our budget ended up at 91 million this year.

They created a budget about 115 million. So, you got to teach people like, hey, it's not so easy to drive these metrics up. You get something called budget euphoria where you start to, you know, I can just increase conversion rates by 3% and I can create, you know, an extra $80 on my average sale, but it's not that easy. Like, you have to tie that back to behaviors. Well, it's interesting. I'll tell you, the behaviors are definitely true, but this idea of top grading. Uh, we've really really taken this idea up of look, I'm going to have a conversation with you and uh, Mike, here's here's the two here's the fork in the road. Either you're going to train really hard for the next 90 days and I'm pulling you off the schedule. A lot of ride alongs. Go back to Phoenix. Uh we're going to have to enhance your efficiency dramatically or I'm going to write you a letter of recommendation and I'm going to get you know you you I'm

going to volunteer to go work at our competition. Uh my CFO Adrian amazing guy started to top grade his team and he goes, "Oh my gosh." He came to me like a few months ago goes, "I cannot believe how much easier my life has gotten." because he was micromanaging. One of the things Chad Peterman has said, if you find yourself micromanaging your direct reports, you got the wrong person. You shouldn't have to micromanage your direct reports. They should be able to report to you and get their tasks done and their projects done on time and on budget. What are your thoughts on uh top grading? I mean when you there's there's two kind of areas of top grading like especially it's happening our uh businesses right now is like one is people like you know when you find the right person it just all seems to work out like we just we just found an HR person in the past year that's really just clicked within the

business and she's done a great job and you know taking people to the next level taking recruiting taking onboarding all that stuff to the next level so that you know investing in people ahead of where you need them is always the right move especially like When you think about top grading right now at the size of our business, you know, we're about 400 people, you know, data scientists can be very helpful and project managers can be very helpful for like so, you know, very similar to you, we have our kind of six initiatives for the year and each one of those has to have a project team around them like is is like this is this is a team that is going to solve this for the year and they're responsible for a implementing that and then b communicating that out to our teams. So, but you need to have a project manager that's able to facilitate to make sure that project is staying on track throughout the year because they are

bigger projects. The other idea of you know top grading is is using technology today and you know there's certain things like you talk about yeah it is very hard to increase average sale but like lately we've been using a HVAC sales presentation software um and we've just seen the amount of add-ons go through the roof. We've seen our average sale pick up. We're in non- peak season and we're over 50% conversion rate on replacements. Like, we actually are really changing these metrics through a company that is really obsessed with the customer buying experience and providing a better buying experience through technology.

I love this. Um, explain to me, by the way, I think technology is one of the most important things that's underutilized. I always say we're a technology company that does garage doors. I mean, we're running like 25 if you include like your project management tools, your payroll software, the cameras in your vehicle, like I'm running 25 softwares. Yeah. I mean, all day long. Lace things like real. It's just it goes on and on and on. Um revenue per employee. Now, I heard Brandon Dawson um talk about this with uh Grant Cardone, you know, the Cardone team. It's uh he's like if you're under 275 whatever was thousand per per employee. I've never looked at it like that. Maybe it doesn't work because I I'll never be at that. Um what are your thoughts on revenue per employee? Is that something that you really like that metric? Yeah. Oh, I'll say I look at it once a month and just see how we performed on it. I um I do like the

metric because it it kind of just tells you how efficient you're being in your company. Like how much, you know, kind of fluff do you have? And to a certain extent should be able to tell you how profitable you are, you know. And it it is kind of weird about how every industry is. This isn't like our just our industry like kind of every industry. It kind of works out. If you do this and you take your revenue, you divide it by the total number of people, not technicians, but like you know, your call center, your admin staff, your finance team, everybody included. It works out to somewhere between, you know around $250,000 of per person. And you know, you have really bad companies that are operating around 160,000. You have really lean companies that are operating around 330,000. Um, that doesn't necessarily mean they're good companies. It just means they're lean. Um, and they're probably pretty profitable in doing so,

but they also might, you know, be stressed out. So, it's it's worth looking at because it's really hard to be profitable if you're not, you know, let's call it over that $225,000 mark. You're definitely not going to be at the profitability that you want to be at. I'll tell you something that might throw a wrench in this equation is we work with a lot of agencies uh from the media buys to SEO to PPC like we we've got the best of the best and then we've got people in house that coordinate stuff between them. Um you know when I look at for example I was out at one hour and they had about 40 people working in their marketing team and I saw a lot of them working on videos and a lot of stuff like I I don't want to bring all that in house. I want specialists that have the best software to do what they do are really like like you look at the marketing team. The question is do you bring inventory in house or do you have

like your vendor managed inventory, right? So there's there's all these different things that you know I've been to shops where they don't own any of their inventory that that's all sold to them and they handle that. Then they don't do any of their marketing. They might have three people on their marketing team. So how do you equate for that? Yeah. So I mean or maybe even a third party call center for half the calls. I mean Sure. I mean, the other like financial metric that you're really going to look at within all our businesses, a lot of people call it the big five, but you can call it whatever you want. You're managing your top five expenses, which in every one of our companies is direct labor, direct material office wages, vehicles, and marketing. You know, in the best of companies, that's operating 75% of your revenue, typically 70 to 75. In the worst companies, that's 90 to 100.

Um, and you know, you're looking at what those benchmarks are. You know, your labor should be around 24%, your material should be around 20%, your office wages should be around 11%. You know, if you can do it, marketing, depending on the market might be different, but as a total company, hopefully you're under 10%. And um, you know, your your vehicles, which typically range around 5%, but that's, you know, that's where you're targeting with a lot of those metrics. Interesting. Um, you said labor 20, labor 15 to fully burdened labor across the board.

Is that fully burn including sales, commissions installers service everything? Everything, office, staff, call center, uh, then office wages. So, those are COGS. Yeah. Okay. So, how much all in should labor be as a percentage of total revenue if you include CSRs, technicians installers warehouse staff, the the CFO, the the the every salaries, the commissions, everything. Yeah. I mean, the best ranked companies are probably around like 33. That's what I was thinking. Yeah. You know what happens with, you know, the problem I have with CFOs typically is is they're always looking at lagging indicators.

Sure. Um, you know, I look at what can we do to generate more calls. You know, I I think the good balance between me and my my guys, he's like he's he's behind corners and he's looking around the corner all the time. He's not just a, you know, maybe that's maybe that's a controller more, but but he's looking at the future as well and he understands growth. Uh, we got we got so good that there's months we're hitting 27%. Bottom line, and I think we could hit 30. I think if we really pushed, we could hit 33, but then we'd be kind of screwing ourselves on the marketing side because we'd have to start borrowing from marketing. And that's great. We we've learned from other companies that's great for about a year and then you begin to see the decline. It's an interesting question of when is too much when is it too much? Probably. Well, what what would be you know because I've always said if you listen to the podcast

three years ago I was like if you're making more than 25% either you're paying your people too less or you're charging your clients too much more. But I took I didn't take into effect efficiency. I never planned on booking over 90% calls. I never planned on the conversion rates being what they are. never planned out like like plus a great CFO like the way that he's able to do stuff like he's like you know what a great you want to know the best question of the world is when you ask a CFO what's one plus one you know what they say the best answer two no they say whatever you want it to be that's a good accountant that's a good accountant right there CFO two would be a good answer so what what do you feel about profitability uh when everything and you know this is really there's different industry ries and there's different competition and there's different private equity involved. So, I I don't think it's a

fair question because if you look at like Zoom drains, yeah, they don't have really a whole lot of material costs. They've got these expensive $200,000 trucks, but they're just they're going and doing drains only. So, I don't know. What are your thoughts though as far as profitability per home service companies? Yeah, I mean I think I think there's two things that, you know, we need to be careful of going into this year. One is you know if prices are changing we have to be ahead of that otherwise you know we'll lose oursel because you're not pricing yourself correctly. The other one is and I think this is our entire industry. You know I I talked that I really value data scientists and some of the people like that really understand statistics but there is I've yet to actually meet a company that's really heavily invested into pricing strategy whereas like you know my background is in FPNA and you

know I worked for a a medical uh distribution company for a long time. It was about 150 billion. Their goal was to get to 1% profit. They usually never got there, but they had whole pricing teams that are looking at elasticity, that are looking at ways to when they can target like more surge pricing, when they can do this. Like there's, you know, Amazon's doing this. There's no reason like we can't invest more into understanding what our pricing strategy should be as a business. And that's probably where you really maximize profitability. So that is actually something we're investing into this year. this year.

You know, I would debate you on that because you you put my top guy in in any market and I've proven this over and over again. He's going to continue. Good job, bad job. He's good. You put my se best CSR, best dispatcher, best technician, best installer, it's incredible. So, it goes back to better recruiting, better training. Uh the optimize the price it's just so hard for me to to get behind like but but the to optimize purchasing is completely different. But your best guy is probably going to get a yes from that customer if your garage door replacement is $10,000 or $12,000, right? Like he's probably going to do it, but there's probably certain there's other indicators that would make the customer more likely to say yes to a 12,000 if we're doing it around demand pricing. properly. That's a see the problem is you treat you, in my opinion, you're treating this like e-commerce instead of the presentation, the

timeliness, the idea of influence. Robert Chitty wrote the book. Uh I'd love to see what you come up with. And maybe I'm dead wrong, but I feel like look, you know what's weird at A1 is whatever gets focused on get kind of a resolution. Like we want to make this happen, we got to talk about it every day. We got to practice it and role play. We got to gify it and it'll work. But you're kind of robbing Peter to pay Paul cuz if you focus on this uh so we got to make sure we don't focus on too many things. We got to say okay uh like what's the best thing that we make money on? Uh number one is selling high-end parts. Yeah. Because we give options. We we got the hide cycle life. Number two is taking a service call turning it into a sale turnover. Those two things if we just did good those two. But what what's more important than both of those? Reviews and conversion rate.

Because if I'm not even converting, I'm not gonna talk about selling better parts. Like, why aren't you even earning the client's business? Yeah. And if we're getting bad reviews all the time, we won't be in business very long. Well, so those are it's like this pyramid of like this hierarchy of needs for home service companies. Yeah. Oh, I love this stuff man. Um, you know, I I was talking to Aaron about that. the way you guys are do the presentations and the way the pricing works and the way it makes it kind of pulls into effect the uh it includes the finance fees which is genius because why should I eat that cost? It's like if you choose to do this here's what it costs.

Yeah. as a CFO, you know, CFO is always like, "Hey, let's let's not offer financing plans that have any dealer fees, you know, because they don't want to pay the dealer fees. They want to control the margin better." And this takes that away. Like if it's automatically building it in, let the customer pick whatever they want because we're not paying for it anymore. You know, it's you've know Joe Chrisara is that ring bell. I know Joe book behind there. What should we do? Um he's always said to me, you know, you pick six options and say, you know, pick one you like. M but you you started at the best one is what I've always learned is you said look based on what you told me going to go over six options this would be something that I would say is going to be the best fit for you and your family. Uh and then we you know if that doesn't work hey that doesn't work pick one more economical pick one you like.

Yeah. But this way you're at least earning their business. And by the way each one of these uh you you know you've probably heard but the best profitable one for the company is probably option number four. Yeah. And that's where most people fall into. Another thing is putting and like if you want option five to sell the most, price it right, price it a little more than option five, but far less than option six and then put most the people's choice. Most people choose this, right? And we think about that a lot from the office side. I think it's probably hard to think about that while you're running the call. You know, I've got I know you have some really top- end sales guys. We've got one named Adam and I talked I know him well. He's presented to us. I I I talk to Adam all the time and I mean this guy's super passionate about sales and you know I remember I went on a road trip with him one time

and he spent four hours replaying his calls for me but you know he's got this saying that has we've kind of adopted in our sales team because we asked the question of like how do you stay excited doing the same thing like you know three four times a day every single day and he says when I knock on the door I say to myself it's showtime time. This is my show and you know I I start playing I start playing my role and you know I get excited for it because you you you know it's showtime. I like that. I like that a lot. Um I want to go you know you talked about revenue per employee. We talked about that for a minute. I want to go back. You know Alvi always taught me about ratios. He's like most people run at a 2:1 ratio. Meaning you got two people turning a wrench compared to the one support staff. really bad companies operate at one:1 where you've got all these support staff, CSRs, dispatchers,

warehouse guys, you got all these seuite VP director levels supporting like one one. It's really hard to make money. There's no efficiency. He goes when you get to 3:1 you're printing money. Uh I like that ratio stuff except it's still you what happens when you're doing all this hiring all these marketing companies and doing the outbound call. You know, you might have a third party inbound call center for nights and weekends. those ratios kind of get masked. Sure. What are your thoughts about different ratios like that? Yeah.

I mean, we are actually pretty close to three to one, but you know, you start talking about um certain ratios like Yeah. I mean, you can look at an income statement, but an income statement can be misleading. Like, you know, you asked me is, you know, is 15% that benchmark? Well, then really what's the benchmark of cash flow on that? You know, Carl Icon. Yeah, I know Carl Icon. He does hostile takeovers. Great. Sure. Mastermind. you know, one of his famous sayings is happiness is positive cash flow. And um you know, because that that's really what matters at the end of the day. Are we generating cash what we're doing and we're not just putting it you can hide stuff on an income statement by putting it on a balance sheet. You can't you can never hide stuff on the cash flow statement. It's really going to tell you the true story of the business. So that's that's one that we always look at. And you know, if

you're generating even if you're generating 15% of profit, you know, after you're paying taxes, after you're doing all the distributions of everything, you should still be looking to get 7 to 8% actual free cash flow at the end of the day. That's interesting. Yeah. I mean, we do, you know, Alan Roer taught us what a financial quick chat check quick check is, and we don't do it like we used to, but every week Adrian sends me just a quick text of here's what's going in and out of the bank. Here's where we sit. It's just for me.

And he just decided everyone doesn't need to know what's in our bank account. I really didn't care. We don't report that a lot of places. Do we we are transparent on our income statement, but you know, I don't think people are really going to understand like paying taxes and Yeah, that's true. I mean, look, it is none of their business when it comes to I agree with Adrian. Now, now that we talk manto man, eye to eye on a lot of things, he he and I see the same thing uh in a lot. Well, let me ask you, I know a lot of businesses the way they solve their problem for next year and a lot of times the problem is it works as they raise prices. U but there comes a point of uh diminishing returns. Uh obviously when we get a price raise from a manufacturer like the distribution center, we raise our prices at the same day. Uh and Tom Howard said the best is instead of doing two price increases a year uh do 1% a month uh

across the board. That way that no one really feels it. What are your thoughts? Because we're we're still doing two a year. Um I couldn't sell my team on doing 1% a month. So, I mean, I'm I'm actually kind of famous in in the company of uh not telling anybody when I change the prices or increase prices. Like, I don't usually tell anybody that's happening because I don't think it's the price is the price. Like, that that's this is what we need to do in order to be profitable. I don't think I actually need to communicate it out. And people ask like, "Hey, did the prices change?"

And I'm like, "Yeah, they did, you know, but that that should just be part of business. It shouldn't be really get a raise. You got a raise." But I guess there doesn't really need to be transparency. They don't need to know why. Yeah. this is you know I don't think that they're looking at you know that they're trying to understand the entire cost of the business of what our sold hour should be what our efficiency should be you know obviously we want to become more efficient as a company if we can we become more profitable but you're not going to like you're not going to plan on becoming more efficient you're going to plan on operating your business as it currently is I love that and you know what I get excited about is playing these podcasts very few and far between one out of maybe 30 to to my internal team this is one I'm definitely going to have them listen to. Um, so I'm going to ask some

questions that I think when I ask questions my team could get a lot out of, I think I'm actually doing a lot of justice for the listeners depending on the size of their company. Obviously, you know, if you're you're pre-10 million, some of this stuff is you're probably not ready for yet, and that's okay. uh when you said you leverage this technology that helps build the different pricing models um and it's a better demonstration to the client and it takes into effect these things like financing. What was the biggest thing that caused that software? Is it just the presentation or was it the easiness to adopt for the technicians? What what caused the growth and how much did you grow in conversion rate and average ticket? So, and add-ons in the HVAC. So, this is we're testing this. It's a product we're testing in HVAC sales right now. So, it's not across the entire business, but we are seeing some positive results. Um, and

you know, it's a third party company. So it you could you could sign up for it if you were selling HVAC systems. But they you know the way that they present to their customer is the way they present to the customer is it is you know very much a toggle method of like here's the options and but you can see very if I don't want you know this humidifier I just press a button and it toggles it back off and it the price changes and you can you can really you're putting that power into your customer's hands rather than you know service somewhat static like here's the estimate. Um the other thing is you know you're building the financing fees in another cool aspect of it was that you are anytime a cut like if you don't close right there and a customer re-engages with that estimate like they open it back up you know when they get notified and the salesperson gets notified so they can and it prompts the salesperson to say

like hey do you have any questions you want to ask about this or is there anything I can help you with so it's you know better communications it's better buying experience um HC you know it's a newer thing to us you know if you took it Heck, we've only been doing it for three years. I mean, uh, our conversion rates used to be like 25%, now they're, you know, pretty much 50% on a regular basis. So, we've been doing a lot better. Um, and then our average sales gone up, too. I mean, that, you know, that's the crazy part of our business.

Like, when you look at, if you look at a business that's going down this year, um, well, you know, in HVAC, well, we've got the 454 transition, which will probably raise your prices 10%. And then you've got tariffs which might raise your material prices 10%. If you're not Wait a minute. What was the first one? So in HVAC they switched energy efficiency. Yeah. From 410 to 454 but it raised equipment prices about 8 to 10%. If you're not growing 16% you're basically static to last year. That's what people forget. Yeah. So and they brag about growth but Yeah.

Yeah. So that's I mean that's one way to look at it. But another thing with that one is important like you you are having these things that are happening with your business like and Aaron knows this and he like I love to get a win in negotiating. Negotiating is my favorite thing to do but regularly just going back to our vendors and saying like are we going to accept these price increases and like are we going to have at least have a conversation about it because you can literally save like 10% across your business just by negotiating stuff. And I mean any like any piece of software out there is negotiated. I mean we've got one deal um that right now we have like our phone systems are basically being or iPads are basically being paid for for three years for switching over to this other company. You know Eric when me and Aaron were at the uh golf tournament Adrian walked up to me and he goes uh we got an extra 600 grand coming

back for our insurance something. and he's like, "I didn't even know about it." And he knows about everything. But yeah, I was like, "Cool." Like, I love this stuff, dude, because like I love negotiations, too. I think I pushed my vendors a little bit too hard. But I'll give you an example. Um, I was out of town, but Luke did a great job. They came in to uh give us a 10% increase, but our volume's gone through the roof, like dramatically. And they ended up when they left, they they lowered our price by 10%. He goes, "You know how much business you guys are losing? By the way, look at how much business we've given to this other company. He showed them and they when they left they like this is what's nice is by some people go all in on vendors and then they got all the keys to the city and you have no one of the things we've learned for private equity is like always have two vendors and don't give anybody everything. I

agree with that. Um you know I want to jump into this idea of hiring because I've always said hire slow, fire fast. Uh we we L L was a big seven power contractor. Taught us manual, standard operating procedure, steps of delegation. But the big thing that I don't talk a lot about is he taught me how to build technicians from the ground up. Yeah. Now I realize certain industries you need to be a journeyman. You need to be an apprentice. You need to work your way up. And I do think even if that was the case for garage doors, I would still do it because it's worth them to be homegrown to learn our ways. And it's it's a long it's a longer investment into people, but it's the best investment. What are your thoughts as far as getting the best technicians and installers now that you guys are multiple trades, multiple markets? Yeah, I mean, I got a few thoughts on I mean, recruiting across our trades is if you

don't have a dedicated recruiter, you should at any at $10 million, you should have a dedicated recruiter because it's that important in your business. Even if you're just recruiting students, back in 2019, we were booked out like three weeks in for plumbing services. So, we're like, you know, we looked at it and we said, we have to create a school. We got that launched up and we even knew when we launched a school, we said, you know, this first class is probably going to suck, but the but the 10th won't. And now we're on like 16th and, you know, it's it's a pretty good program that really brings people into the trades.

The other thing about recruiting is like you have to have, you know, whether you call them your core values, your guiding principles, you have to have the right fit of people. I don't know. I mean, you grew in your business from the ground up and I remember like a remember reading this book called Sapiens and it was I read it right around the time we were around 150 people and it was like hey once once a community hits 150 people it fragments into another community because that's about as many people as you can know. And so if you're not recruiting well like and right now we're at 400 people like yeah I have to spend most of my time walking around saying hi I'm Mike because I don't know the people in the company anymore. So you have to make sure that you are recruiting for those values um that you really think are important and that's where a recruiter a good recruiter will be worth their

weight and gold. The other thing that you know I will say about creating the own people in your trades and I know you have a great training center here toward through it. It's amazing is the then people don't think about this. It creates that alma mater effect. Like we've had people leave, you know, for whatever $5 more on the hour or something and they come back because they're like, "Well, all my friends are here. This is where I learned the trade. This is my school. Like this is my university." Whatever, you know, you call it. It's it creates an alma moater effect that you're at you're giving back to the trades, but you're also creating this kind of community of people that you brought into the trades. Yeah. Plus, you know, the fact is people say if you got a best friend at work, best friends don't happen. They happen outside of work.

They happen when you meet with your family, you break bread, you go to the bowling league. When you build a best friend at work, 85% of people say, "I'm not leaving because I have a best friend here." Yeah. Yeah. And that's the key. I I think that's true. Um, you know, I was uh I was at this group. I pay 100 grand to go to these three meetings a year in this big event and I really enjoy it. And I'm You should You should negotiate that. I should I probably could. It's it's Joe Polish's Genius Network and uh you know there's this guy that was training us the other day because this is just last week and he goes I think core values and mission and vision are way overrated. He goes because I've trained some of the largest companies on the planet whether it's Google, LinkedIn, he goes on and on. He goes I went to small companies. He goes I'll go up to 10 of your employees randomly and say what's your mission, vision and core

values. Yeah. And he goes nine out of 10 of them don't know. Yeah. Yeah. And he goes, "So, if it was that important, they would at least know them off the top of their head." You know, we we actually thought the same this past we around our budgeting conversations this year. We we had a similar conversation that our mission statement was too long, and we really just switched it down to one statement of to create great trades, people, advance their lives, and win big. That's what we want to do. It's it's not necessarily about the customer experience. It's about what we're doing for each other. We just made ours, you know, um it used to be to be the largest most trusted advisor company in North America. Now it's to make our people dream bigger than they ever thought possible and achieve more than they ever thought. Yeah. It's pretty simple. Um you know, you you start to talk Jack Tester used to be the CEO of NextStar.

Yeah. And I think he's a brilliant guy. I learned from him the one-on-one form where he basically said, "If you're a leader, your team should report to you. You shouldn't have to ask questions and lead the presentation on the one-on- ones. They'll present to you, right?" Uh, but I know you guys are working pretty closely with Jack. He's he's part of the business in certain aspects. What's it been like to work with Jack as a leader, and what have you learned from him? Yeah, I mean, Jack's Jack's on the team. He's on our leadership call every week. Um, he's been amazing to work with. One of the one of the you know we're going through the budgeting cycle this year and we talked about the importance of budgets and the importance of missions and um core values and all that stuff and one of the things that he talked about is that as leaders we are dealers of hope and he actually this is from like the King

Solomon Bible but and it and that there's this phrase without hope the people will perish and so we have to be providing hope for everybody that's part of our team. And that has sat with me since he brought up the concept. And literally like I don't think a week goes by that I don't think about that is that we are as leaders are dealers of hope so that our people don't perish. I love that. You know, you uh you came in here pretty prepared. You've got two pages of notes. Those of you not watching, uh, Mike, as a CFO, I think CFOs are just DNA is wired to prepare.

Uh, there's probably some stuff we didn't hit. So, what what do you got there in your notes, the things that you wanted to discuss? I mean, I mean, one of the things I'll just mention that I think I've always done pretty well throughout this, and I remember I remember when you called me back in 2015. You actually, you probably don't remember this. you called me and I'd only been at Eco for about six months and I'd kind of implemented Service Titan, built out the price book and all that within Service Titan and you called me and you were like, "Um, hey, I want to get on Service Titan. I heard you're on it because I think we were like the 30th customer." Ara pitched Aaron individually and you know you started talking to me about it and I know I know you got on to it so you know you were very persistent but I was like man this guy is special like and I was like Aaron you got to talk to this guy

and I know you and Aaron are now like best friends but you know I hooked you guys up to start talking but the importance of building your network whether you're a CFO whether you're a manager I just connected my GM and another GM from a company today that I thought that they should know each other um you you really just need to spend time building your network both professionally within the industry and then I mean there's other like I'm part of a group called YPO that I've really enjoyed and I mean sort of like you know your $100,000 group like it's uh you know you just building these relationships with people that are thinking about things the same way you are and those relationships tend to just open so many doors to help out the company and to help out everything I couldn't agree more it's your network is your net worth who not how meet the right people relationships are everything and Um, but

that's my plan. Literally, like you probably know I'm building a nice house in Idaho and I'm building even a nicer house in PV. And the plan is to be able to break bread, have people in there and build deep, deep deep deep to deepen relationships because I live fine in a thousand foot apartment. I can do fine. And it's not necessarily to impress them. It's a place because I can't fit very many people in a 1,200,000t apartment. I can't really have a party or have a social engagement. So, like I might be overdoing it a bit, but my plan is like, you know, people want to come stay the weekend. We never need to bump into each other. Bring your family, go in the lazy river, we'll go shoot some guns in the shooting range, play a game of bowling, and to build deepen and strengthen relationships. And I think this concept is so strong. Uh, I think the problem with most people have though is they'll

go to a meeting and they'll give everybody a card. I think what you should do when you go to a gathering is try to build one or two relationships and deepen those rather than try to get to know everybody. I agree with that for sure. I think that's a lot of people, man. And it's so hard to even keep up. I get people because this podcast is almost 400 episodes and they come give me a hug and sometimes like a guy rolled his window down yesterday, got a roofing, he's got a uh Tesla Cyber Truck and I was with Raul, my driver, but I was like, "Dude, I'm going to drive.

we're going to go to a restaurant and then we're going to go to a movie. He's like never drove with me where he's a passenger and uh guy rolls down his window and he's like do you know this guy I'm like I look over it's a rap truck roofing truck and I'm like no and he's like Tommy what's up he's like I knew that was you because the TRX. I'm like what's up man? And he goes how have you been? I'm like great. How have you been? He's like great. I was like hey it's great seeing you brother. I'll see you later. And he's like how do you know? I'm like I don't I don't know. I feel bad, but like dude, I like I didn't recognize the guy and it's like um it's a bad quality, you know? But if I had a dime for everybody that like gave me a hug or said what's up or saw him at the airport or I'm in Boston, I could be anywhere. Bumped into a guy. I was telling Aaron I bumped into a guy in uh uh Bora Bora. Really?

That's crazy. He's actually out of I he lives in um Ohio. Yeah. I mean it is it is actually strange. So I'm from Ohio and you know it feels like and the Buckeyes are big but wherever I travel I say people are wear and I'll be in the most random places and I'll see people wearing Ohio State like oh yeah Ohio State stuff like I was doing the running of the Bulls and the guys wearing Ohio State hat and I was like what we're in the middle of Spain you know that's that's awesome. You know you guys took us to an Ohio State game and we had the time of our lives. We're going to do that more often. That's one thing is trying to get back. I never heard anybody say man I wish I worked more.

for you. We've always heard that say saying of like I've never really heard anybody say I wish wish I worked more but I also never met anybody that looked at somebody successful and say they must have not worked for it. You know what I mean? So there's this happy medium of like if today was your last day well it's not my last day I don't think. So I got to work hard today and I'm going to take a little sacrifice put a little bit more in today so that my future self has a better life. What are your thoughts on that? You know, I I think it, you know, I have children and you think about what kind of life you want for them. Do you really want your children to be happy? I don't know that like I'm not sure that that I need them to be happy, but I do want them to live a life that has purpose and that they feel like, you know, I'm doing something that's important. I feel that way when I come to work every day. So, to me, it's

like this is something that I'm doing to show the appreciation that I have for my team that's out there every day. I mean, you guys have nice weather here. it was negative, you know, five degrees in Ohio yesterday. Um, so, you know, it that they're out there every day. They're working so hard. They're, you know, in these trades that are really helping their community. And I want to see people win big. And so, and I want to see people get celebrate things in their lives. And so, you know, as long as you're feeling content that you have a sense of purpose in what you're doing, it doesn't really feel like work to me.

Um, I've never been good at separating work in life. Yeah. I should be probably maybe somewhat better at it, but I really like both aspects of it. And I do travel a lot, so I like I like to get out and have fun, too. Yeah, I know you do. We've had a lot of fun. How do people get a hold of you, Mike? They want to reach out. They want to learn more about CFOing a $91 million company or just got some observations or questions. Yeah, the best way to get is my email. It's mikegetco.com. geo.com or hit me up on LinkedIn.

LinkedIn. There you go. Um, how do you spell your last name again? I have it right here. But Barnhart, B A R N H A R T. And if you had a couple books, not not the Bible, not the E-Myth, uh not the most common ones, the Napoleon Hill Del Carnegie, maybe some some books just that aren't so common. What would they be and why? Uh yeah, a few of them. Um you know, the I always pick like a book from my favorite year. So like in 2022 I loved the almanac of Nibal Rabicant. You talking about wealth and happiness. 2023 I read this book called unreasonable hospitality. And for I mean so I'm always the bougie one in the company right? I'm the one that like likes to buy you know crystalall to celebrate you know if we're winning a month or something like that. Like I like nice things. I like fine dining.

There's a book called Unreasonable Hospitality. It's really good. It's about 11 Madison Park, which these two guys got really obsessive about food and customer service and, you know, being the best at what they do. They were an unknown restaurant and they became the number one rated restaurant in the entire world for two years in a row and it only took them about seven years to do it. And that was a really cool journey of their story. Um, you know, if you ever just need an audio book, you can't go wrong with Green Lights. You know, it's just a just a fun one. Yeah.

All right. And uh we talked about a lot of stuff here. I mean, a lot of stuff. And I bounced around a lot, but I wanted to do this this way because I only had you here for a little over an hour, so I just wanted to hit a lot of topics. And we've been meaning to do this. We'll have to do a part two. But maybe something we didn't hit. Maybe there's something that the audience needs to hear. Uh you know, you've seen this company grow in the last 12 years from from a little over a million to almost a hundred million. Uh, it doesn't need to be about work, doesn't need to be about business, it could be about whatever you want. But I'll have you close this out.

Just my thoughts on Yeah, just anything. I We talked about a lot, but anything you want. Yeah. I mean, most often I've just feel a deep sense of appreciation. Um, you know, I've loved the partnership that I've had with Aaron. I've loved, you know, the partnership that I've had with a lot, you know, as you become bigger, it's really hard to build those relationships, but, you know, whether it's Jack or Elliot or Barbara or different people that have come and gone on the team, you know, just building those relationships with them has been a, you know, great experience. Um, and I I feel really proud of what we've accomplished. So there there's a real sense of pride and you know I don't really think necessarily about like I I have this abundance mindset I always have like I'm the eternal optimist. I don't really get like all right we need to protect it. I just think like like we're going to lose it. I just think

like what's next? You know what are we going to do next and how are we going to keep innovating? How are we keep like modernizing the home experience for the customers? How are we, you know, just going to stay on top of our game? Because like, you know, whether you're acquisition, whether you're green field, you know, the the world is ours to go take, you know, like there's no reason if for 100 million today, it can't be 500 million in five years or whatever it, you know, whatever you want to do is is possible if you're willing to put the effort in and do it. Well, that was a great closing, but I'm not going to close now. Um because what if private equity changes that? I mean, I know I don't know when that moment's going to come. It could be a year. It could be 10 years, but eventually like Built to Cell means that's real. Um, you hear the horror stories and you also hear my story, which I love our relationship

with the PE guys. Like, I really like Mike. I really, really like Doug. I really like the whole team over there. They still give me control. They give us, they ask us the right questions. But, do you still are you worried about potentially when that day happens down the road? Or it could be strategic. It could be anybody for all I know. But when that does happen, what do you think life's going to be like? What are your your kind of SWAT analysis? Well, I mean, I certainly agree with you that you should build your company to sell it. Like even even if you are planning a transaction, like you should never say, I'm going to operate my company differently because I plan on transacting in 12 months and I'm going to cut all this stuff. Like you should you should operate your company like you're going to continue to run forever, but it's going to become a profitable it's going to be a profitable company.

Like at any given point in the next if we want to sell sometime in the next 10 years at any given point of that time I should always be happy with where I'm at and to sell it be able to sell at any moment of any time. Yes. Yeah. I disagree a little bit with a couple things. The only thing I'll tell you is look if you're going into the 12 months of the rolling 12 you better have a conversation and talk to the team and get them especially if they have equity uh or or they have any type of P units or whatever it is. Have them push a little harder that year. Yeah. Because those that that that year counts the most. So, but but don't cut things. I agree with you. Don't cut things. Set yourself up for failure the year after it sells because that's a bad deal for anybody. But even when you look at the reports that are out there still, I mean, our both our industries are so heavily fragmented. You know, it's like

even with PE coming in, they still only own a very small percentage of the total. What do What do you see the percentage being? I'm just curious. I don't I haven't looked at that recently. Yeah. I mean, there's some reports that come out each year. You have to usually pay for them to get them, but they're usually pretty solid reports. And um you know it's about 12% in the HVAC plumbing electric industry. You know for us we have we we do have a little bit of different strategy like we know we're we're really good plumbers and we're learning HVAC and electric. Um so we have a little bit different strategy of how to grow there than maybe some other PE groups do but um you know overall I I just I just think that it's still a very open market to do whatever you want to do. Well, I've heard the uh HVAC Plumbing Electrical is about a two little shy of $200 billion market cap. So, that's why there's a lot of people getting into it.

It's just huge market cap. Yeah. And I heard your podcast like, can you open a company with $20,000? Well, probably not anymore. You know, you can, but you're going to spend 10 years trying to build that thing. You do need some investment and and these guys, you know, can provide great investment. Well, Mike, this was brilliant. Uh I'm sure you're going to get a lot of follow-up questions, but uh thank you for being here and doing that. Sorry you had to come to 76 degrees today. Appreciate you being here, brother. Thank you. Great job.

Questions about this episode

Who speaks in "Harnessing AI for Financial Insights with Mike Barnhart"?

Aaron Gainer (Host), Mike Barnhart (Guest).

What is "Harnessing AI for Financial Insights with Mike Barnhart" about?

Mike Barnhart, COO and CFO of Eco Plumbers, shares his expertise in financial management and strategic planning, highlighting the company's impressive growth trajectory from $1.9 million to a projected $91 million. He emphasizes the importance of data-driven decision-making, proper allocation of funds, and the need for clear financial metrics to ensure sustainable business success.

What is mentioned in this Home Service Expert episode?

11 people, works and ideas are mentioned, including Eco Plumbers, Mike Barnhart, Aaron Gainer, Service Titan, Nibal Rabicant, Unreasonable Hospitality. Each one on this page links to its own page with every episode that mentions it.

How long is "Harnessing AI for Financial Insights with Mike Barnhart"?

The episode runs 1 h 6 min; the transcript is about 14,172 words in 92 timestamped sections.

More from Home Service Expert

About this transcript: the episode's spoken words as captioned on YouTube, split into timestamped sections. Reclip.Me locates every person, work and idea in the text, keeps the time it is first named, and quotes the words around it verbatim. Last updated January 24, 2026.