MBA2362 Guest Teacher - Tommy Mello - How to Grow and Scale a Business from the Ground Up

0:09Heyo! Welcome to the$100 MBA show, practical business lessons that pack a punch to help you build your business. I'm your host, your coach, your teacher, Omar Zinhome. I'm also the co-founder of Webinar Ninja, an independent software company I started back in 2014. And today's episode is a guest teacher episode where we bring on an expert to teach their area of expertise. And today we got a very special one, Tommy Mello. He's going to be teaching you how to grow and scale a business from the ground up. I absolutely love Tommy Mello's story. He's a self-made multimillionaire. He's built a$220 million business with over 700 employees in the garage door repair business.

0:52I love this. I love the fact that he's niched down and he's built an incredible business. But he started from zero, like all of us. And he's learned incredible lessons along the way. And he's going to show you what are the most important things you need to focus on as you're trying to grow and scale that business of yours. He's now one of the premier home service experts because of the business he built and has built the Home Service Expert brand, which includes a podcast, a Home Service Expert podcast, as well as a Home Service Millionaire book and the Home Service Millionaire club. So it's a huge, huge privilege.

1:26And we're really lucky to have him on the show today to teach us what's important, what really matters when it comes to growing that business and thinking big about how to do it. This one is a good one. Let's get into it. Let's get down to business. Today's guest teacher lesson by Tommy Mello is special because it's practical. It's real. And you're going to walk away not only feeling better, but knowing you can do better in your business and how to do it. Listen, some of us, we get a little nervous. We get a little bit scared when it comes to thinking about growing and expanding your business and dreaming big.

2:02But that fear is holding you back and stopping you from looking in the mirror and saying, how can I get better? Why should I be successful in the first place? And how will I attract people to build my business with me that are smart, intelligent, hardworking? So many gems in this lesson. So I'm going to pass it on to Tommy, but I'll be back to wrap up today's lesson. But for now, take it away, Tommy. Hey guys, my name is Tommy Mello. I own a company in Phoenix, Arizona called A1 Garage Door Service. Started in 2006. So I've been doing this 17 years. and the Lord knows I made a lot of mistakes.

2:37We are going to do over 200 million this year in revenue. We acquired eight companies in the last 12 months. More importantly, our profit margin is above 20%. I've always said revenue is for vanity and profit is for sanity. We learned how to recruit A-plus players. We learned how to build manuals. We learned how to brand correctly. But I did this all by making mistakes, getting back up and fighting and bettering my best every day. I write down my goals and I figure out a way to hit them. We're great at marketing. We understand key performance indicators. We've got the best CRM. We've got everything kind of dialed in.

3:10And I believe this company will be doing a billion in three years. And take it from me, I'm here to tell you some of the mistakes I've made and some of the things that I know could help your business grow much faster. And really my goal for everybody that I work with is to elevate their mindset, get them to write down goals, spend more time with family, Just live the best life and have a goal, have something they really want to do. Maybe they want to buy a second house. Maybe they want to take their dad to Alaska to go fishing. Maybe they want to take their grandma to Hungary because that's where she grew up.

3:43Whatever it is, my goal is to help you get freedom to do what you want, when you want, with who you want. So I hope you're going to enjoy this. I'm going to talk through some of the business lessons I've learned and some of the things you're going to want to make sure you don't run into the same pitfalls that I fell into. So let's get started. Today, I'm going to be teaching you how to grow and scale a business from the ground up. So the first bullet I want to talk on is really mastering the art of scaling companies. And what's the main ingredient? It's people, and it's people that are trained, and it's expected outcomes.

4:14So having standard operating procedures, checklists, a great CRM, automations, AI, these things are a necessity. Ten years ago, you could go without them, but setting a business on a predictive model for profit. And what does that mean? I can break it down very quickly. You've got to figure out your conversion rate, your average ticket, your booking rate, and how much it costs you to acquire a customer. And once you figure that out, it's a great, amazing equation. It's an amazing formula where you just pour gasoline for more leads and you start to predict the outcome. And as long as you've got your marketing where you're thinking about recruiting great people, 50 % of my marketing comes from recruiting great people.

4:51I want to find people that aren't on the unemployment line. I want to steal great busboys, great Amazon workers, get A-plus players that have the right attitude, the right canvas, and then I'm going to teach them the trade. My training center next door can handle 200 technicians in a month. The most we've had is 50. But as we start to scale, you've got to be able to make great people, CSRs, dispatchers, technicians, and installers. You do that correctly, you'll have a scalable business. And that's how I've been able to get into over 20 states, over 700 employees, and bottom line of over$40 million.

5:23That's something to be proud about. And scaling a business is like scaling anything else. It takes time, and it takes focus, and you got to know what you're doing each day. I think for most business owners, they're problem solvers. They turn into firefighters. They go in and fix the biggest problem. If you recruit great talent, you use an equity incentive program, you hire people that are better than you at a focused area, whether that be a controller, it could be a CFO, it could be a CMO for marketing, but get people that really are strengths for your weaknesses and dream a little bigger. Most entrepreneurs, they have these goals and I'm like, what do you mean 5 million?

6:00Why? Why is that the goal? Why not push yourself a little harder? In this day and age, I could have a pooper scooper company worth 300 million. So I think just dream a little bit bigger, have a goal and understand what you're doing each day, each week, each month, each quarter, then each year. A lot of people say I'm going to do this each year, but they don't know what they need to do each day. Small bite-sized goals end up to big, big goals. Yeah, look, at the end of the day, I'll tell you the secret sauce is when you go buy a company, integrate properly, keep the employees happy, and fix things.

6:33Like their booking rate, conversion rate, average ticket. You systematize it, and we've done that. We've worked so hard to systematize this business that now I'm just out there buying every company I can get my hands on and retrofit, repair, and replace garage doors. And the formula is not very difficult, but it takes time to get there. You've got to know what you're focusing on, and you've got to take baby steps. But now we've scaled. Now we've got it. So you could go, it's going to be easier for me to go from 200 million to a billion than it was to go from 10 million to 20 million. Because the system's done.

7:03It's what I call nail it and scale it. Yeah, so the culture of A1 was really built upon the thought process of what's in it for them. You know, why would someone want to work here? So the story goes something like this. I read a book by Darren Hardy, and he wrote down 100 things that he wanted in a woman. He put every single attribute, the motherly features, you know, how she smelt, all this crazy stuff. And he read this letter of everything he wanted and said, there's no way I could pull a girl like that. So he said, these are the hundred things I would need to develop within myself to be worthy of somebody of that just pedigree.

7:39So when I read this book, I said, my culture wasn't that great. Why would somebody work for me? So I wrote down 30 reasons. I didn't get to 100. But I had to write down a lot of reasons why. who I would need to become to attract the kind of people I wanted to work for me. And as that list progressed, great communicator, somebody that pays attention and actively listens and gives credit where credit's due and listens, so on and so forth, people actually started coming and they started hearing about our company. And they said, we want to work for somebody like you that acknowledges the good stuff, a place that we can move up in the company, a place where you're actually looking out for us and our family.

8:15And that's what it is. Once you start saying what's in it for them, it changes the whole dynamic of everything for your culture. And what I can promise you, if you don't plan on your culture, your culture will build itself. And usually it's not a good culture. So have a plan to build a great culture, 360 feedback, know what's going on. Everybody feels like they've got a goal they're communicated with. It's competitive, and you're going to find yourself winning a lot more. You know, I remember the day is bad culture because people were stealing toilet paper. Guys were getting in car accidents. People were stealing gas.

8:48People were walking out, CSRs on the job. People would show up hungover from the night before. It was harder to recruit great people because no one really wanted to work there. The office didn't look good. It wasn't very clean. They didn't drive new trucks. I didn't provide great training. And as I worked on these things and really made people feel special and made them feel valued, they took the time off to come work for us. They are dragging their whole family with them. They depend on this. when you start valuing where they're coming from, what's in it for them, their point of view, it changes everything.

9:19But I've been through the worst of the worst. And if I could do it, anybody could do it. So if you want to uncover the secret to finding amazing employees, I want you to think about this. Where do people go when they're looking for a job? Typically, they go to Glassdoor and Indeed. So make sure your happy employees are leaving you reviews there, just like we look for consumers to do Google and Yelp and Nextdoor. Number two is you don't go fishing when there's 100 people fishing in one spot. Like Indeed, Glassdoor, ZipRecruiter, LinkedIn, Craigslist, so on and so forth. Social media. And if you realize, a lot of times our best employees come from the guy's wives.

10:00The technician's wives see a great ad and they say, you should think about working here. They pay better. It comes with all the benefits, so on and so forth. And that's another thing. We give new trucks. We pay weekly. Those are the two biggest things that technicians care about at A1 Garage Service when they apply. Number one, they care about the new truck because they had a bad experience in the past. And number two, they want to get paid weekly. But we also offer 401ks and PTO. We also give insurance. All these things add up to a great place to work. And it's one of those things where it's performance pay.

10:32So if you're willing to work hard, learn, push out of your comfort zone, you're going to make a lot of money with us. Here's three proven strategies if you want to build strong leaders. Number one, I tend to find somebody in the past that was a leader. Maybe they ran a baseball team. Maybe they were the captain of the football team. Maybe they had the symphony for the trombone players. I tend to find that people that already had some small role of leadership does well. Readers are leaders, period. So the top leaders within my company are reading constantly. They're listening to podcasts. They're educating.

11:06I kind of had this aha moment when I kept going to all these events and learning and networking and meeting new people. And then I decided to try it out with four of my managers. And I sent these guys to different shows and events and all these different places. And all of a sudden, they started to grow. They started to get better at management. They started to have the ideas of their own, and now they're addicted to it. Now we're sending these guys to different conferences. Sometimes they're speaking at them. So I think it's great to feed in your people. Just like you need to feed yourself, all your people need to be learning.

11:36going to events, building relationships, networking. Very, very good tip. And number three is I think you need 360 reviews. I think people need to understand how they make other people feel. And a lot of times I hire people for IQ, but what I've learned about managers and leaders is you're hiring them for EQ. You want people to say, what if I was in the same shoes? You want people that motivate the cohort they're working with through the people's goals. So when I'm having a conversation with you, Hey, Joey, listen, you told me you wanted to do all these things. You wanted to buy a house. You wanted to put your kids in private school.

12:09I've got a path for you to get there, and I'm going to give you all the support you need. What if you just had a leader that reminded people of the goals that they want, and you used those to motivate people? You could go a lot further in business. There's a few strategies I have for creating an accountable culture. Number one is we report on the numbers. We have everybody knows if we're making budget. They know exactly where they sit every day, every week, every month. We've got four major meetings a month. One of them is called Bring the Fire, where they find out what's going on in the company.

12:39The other three, we know their stats. They're ranked, one through 300 for the technicians. We have a morning mojo call every day to talk about the big wins. We have two one-on-one meetings each month with each and every one of them to go over their scorecard. So we've built really great scorecards that focus on the things that the technicians could influence, and then we rank them on that, and then we always are pairing different ones together so they could learn whether that's turnovers, service agreements, higher conversion rate, five-star reviews. There's always something that a guy's doing well that could teach another guy.

13:12So we double down on training, double down on communication, double down on investing in these people, and the outcome is phenomenal. You know, if you want to unleash your inner leader, the habits of success, what I would tell you is success leaves clues. My secret hack to making lots of contacts and making lots of money was going out to successful companies and other home service niches, meeting with the owner, the founder, the CEO, meeting with the COO, meeting with the head of training, the guy that ran inventory. I've talked to every piece of the company from the CFO down to the janitor. And what I found is they're willing to open up.

13:54They're willing to tell me what they've done. They're willing to tell me how they've grown from 10 million to 100 million. So what I would tell you is first and foremost, make sure you're going to companies because they're always willing to pay it forward. Make sure you're learning, you're getting yourself out of your comfort zone. Number two, very few companies do, very few owners, very few founders is implement. They get all these great ideas when they go to another business or an event and then they come back home and then the nightmare starts. They can't get anything done because they were gone for three or four days and now they got to fix everything.

14:26They got to deal with the customer, the inventory issue. And I think a lot of that comes from they never wanted to hire somebody that's smarter than them. So they're always the smartest and they go, I can't get great people. The problem with saying that is you can't attract great people because you're not great yourself. Any great leader knows they could get great people that are better than them. It's the people that say I'm the best and I'll never find anybody better than me that have that broken, really, really bad mindset. So I would just say, make sure you're able to say what your weaknesses are and hire for those as quick as possible.

14:55Because you'll start enjoying Mondays more. You'll start having more fun at work, and you'll start being happier. And people are going to see that. They're going to want to work for you. Yep. Guys, we went through quite a few things today, but it comes down to some core principles. You've got to be a recruiting machine with A players and build systems with CRM to get an expected outcome. You've got to have great leadership that inspire people to want to work hard, not force them to work hard. You've got to be a talent magnet. Attract those great players and make sure they're motivated. You've got to have a great culture where people actually are recruiting.

15:26They're talking at a gas station about your company. They're prideful of where they work. And you just got to continue to always be ready to learn. Never feel like you've made it. Always understand you're in the fetal stages. There's a lot more to go. Because if you ever think you've made it, that's the day that usually most people fall. All right, guys. Thank you so much for watching the show. I hope you took some golden nuggets out of it. If you want to find more of videos like this, just go to Home Service Expert. I've got hundreds of podcasts with some of the best home service experts in the world.

16:00Join my Facebook page, Home Service Expert. It's free. And if you want to learn more, just reach out. Thanks a lot for joining me. Now let's get back to Omar. Revenue is for vanity and profit is for sanity. I absolutely love that quote because profitability is really where it's at. what you actually put in your pocket. Tommy touched on the fact that, hey, we need to think bigger about our businesses. We need to think a little bit wider. This reminds me of a must-read episode we had a couple of weeks ago, 10X is Easier Than 2X by Dan Sullivan. And maybe for you, it's not the revenue. Maybe thinking about having a hundred million or a billion dollar company doesn't really attract you.

16:41Maybe it's the impact you make. Maybe it's the amount of lives you change. Maybe it's the number of customers you serve. Maybe it's the innovation that you implement in your industry. Find out what makes you want to go for it and make that your goal. I also love how he really gets honest about, why would anybody work for me? Why would they be attracted to work for my company? If I want to attract the best people, I've got to be the best place to work for. I don't get people to be proud of where they work, where they tell their spouses and their friends and everybody that they know, hey, I love where I work.

17:14I want to work there forever. Have you ever had the privilege of having a job like that? I've had a job like that in the past when I was in teaching, where it's like, man, I want to do this forever. I love this company. I love working here. I love my colleagues. It's great. Why? Why do people have these experiences? Because of the culture that was built there. And it's all intentional. I know because I became a manager at where I was working and realized, wow, all this stuff was intentional. All those good vibes were manufactured by design. And you need to do that in your business so people love working for you and never want to leave.

17:48You want to attract the best talent. You want them to be happy and stay there and recruit their friends and recruit their family and say, hey, this is the place to be. Thanks so much, Tommy Miller, for that great, great guest teacher lesson. If you want to check them out, don't forget, go to homeserviceexpert.com. A lot of great content there. And of course, you can search him on YouTube, home service expert Tommy Mello. You'll absolutely love his content, just like today's episode. Speaking of today's episode, thank you so much for listening to today's episode. If you love what you hear, leave us a rating and review on Apple Podcasts or Spotify.

18:21It means a ton to us when you listen and you review. It gives us more exposure and it helps grow the show so that we can continue to give you great content. Before I go, I want to leave you with this. The beauty of being an entrepreneur. One of the biggest perks of starting your own business and growing your own business is that you can create your own world, your own utopia. I learned this from Derek Sivers, who wrote the book Anything You Want. That book is really what it's all about. It's about you can create your own utopia when you create your business, your own standards, your own rules, your own culture, the vibe, who you want to work with, everything.

18:58It's like creating your own little clubhouse up in the tree when you were a kid. You create your own world where you can create the best work possible. You can create the best jobs possible for everybody at work there, including you. So don't forget that. That's one of the best things about having a business. You can create the environment, the place, the culture that you love showing up to every day. Thank you so much for listening, and I'll check you in Wednesday's episode. Until then, take care.

19:33Thank you.