201. How to Start and Grow a Service Business to $1M+ a Month

0:00Picture this, you're 17 years old. Most of your friends are stressing about college applications, maybe planning senior prom, maybe just trying to pass algebra. Meanwhile, you're standing in front of a house, truckies in your pocket, $1 ,600 in cash in your hand, all from four hours of cleaning out someone's junk. That was the moment Joseph Lambert realized maybe skipping college wasn't the failure everyone thought it was. Maybe it was the opportunity. Fast forward a few years and Joseph isn't just running a junk removal business. He's built a$1 million a month operation all before most people his age finished their first internship.

0:36I'm Ryan Atkinson and you're listening to the Outfit Podcast where we uncover the secrets of building and running successful businesses. Today, we're diving into exactly how Joseph did it, what it really takes to build a business that fast, that young and how an unsexy industry like junk removal might just be the one of the smartest plays for young entrepreneurs. So excited for this one, Joseph. Thank you so, so much for being here. So excited for the insights we're gonna have. Yeah, really happy to be here, Ryan. Thanks for having me. It's going to be so good. And before we dive into everything, let's just baseline.

1:05What is the junk removal business? What exactly are you guys doing? Yeah, it's very simple. People in businesses have things that they don't want anymore, and they need somebody to come take it away. Typically, they're going to lack one of three things. They're going to lack either the time to do it, the physical ability, or the means of transportation. They may lack multiple of those things as well. So they have one of those three problems and stuff they need out. They call us. I love it. And we're going to talk about that. So listeners, stay tuned. But let's rewind a bit. What was life like for you growing up?

1:34Were you always working? Did business come later? Would love to hear about your origin story before we dive into Joseph Lambert. Sure. So my story is oldest of five kids. We're all pretty close in age. So everybody's about two years apart. And kind of one of the big pivot points for me was when my parents got divorced when I was at age 12. And for me, everybody processes that a little bit differently. But for me, kind of like an outlet for me was getting to work. So I started in construction. 12 to 14 hour day was normal. So I learned quickly what working hard and hot conditions actually looks like.

2:09So starting construction, mowed lawns, did really anything, any home service somebody would pay me to do. So I experimented with most things under the sun. And then at 17, kind of fell into the junk removal business as you hit on in your intro. That customer who paid me$1 ,600 to remove stuff took us four hours. She's actually a former landscaping client of mine. So we did that job. And then I realized that this industry was a lot simpler and a lot more scalable than some of the other services I tried. So it went all in on junk removal. It was really blessed from a timing perspective that COVID hit not too much later.

2:40So our business grew tremendously throughout COVID. But we also had the privilege of really having some amazing team members join us in the years to follow. So we were able to build an incredible business because of that great team. And then in the last two years, we took the business really to the next level because we were acquired by a group called Allied Junk Partners, which acquired some other businesses as well. So now we're part of a larger group that's backed by private equity, which really adds a whole new element of sophistication and upside to the business. So very thankful to be on the ride personally, but also it's been a privilege for our team to get to grow throughout so many different levels of the business.

3:20Let's jump back to that$1 ,600 project that you have. I mean, take me through the emotions. They're handing you$1 ,600. It's like a light bulb moment going off for you there. Like take me back to that exact moment. I'd love to hear that. You know, the dollar amount wasn't what caught my attention. You know, I'd done other jobs before for a lot more than that. Now,$1 ,600 is still a lot of money. It's a lot of money to me today and it always will be. However, what really stuck out to me about that job was the simplicity and the speed at which we earned it. And that made me realize, you know, this is a repeatable process and it's also a very simple process.

3:53Why do those things matter? I can, you know, see a path forward for training a team that can do this over and over again and training them quickly. But also, you know, being able to hire really good people that are going to take really, really good care of our customers. I think that's going to be a lot more achievable because we're less focused on the skill to actually do the work. So I saw a lot of pros just because of the simplicity of it. And then, you know, that started their journey of jumping in junk removal all the way. I love it. Well, let's talk about that. Let's get actual for our viewers here.

4:22If you had to rewind the clock on your very early days of junk removal and had to tell someone that's interested in the same line of business, same industry, what would you tell them on like best practices to get started? What must they get right when starting a junk removal business? Yes, that is a loaded question. We could sit here for two hours and go through systems and processes. You know, I think a couple of things. First of all, you've got to get really good marketing and sales. You know, that's going to be the biggest challenge at the beginning is just how do you get cash in the door? The second thing is leadership.

4:52If you aren't a great leader, then, you know, you're not going to go, I think, very far really in any industry because if you can't build a team, you're never going to scale. So I would say, you know, learning marketing and sales, learning leadership. I would also say find a really good mentor. However old you are, I follow the rule of 20. Go find somebody that's 20 years older than you, that you admire and go ask them to spend a little bit of time with you, just sharing their wisdom. Especially if you're a young guy and you think you can just figure it all out, you're gonna fall on your face a lot.

5:18So find somebody who's a lot wiser than you. So mentorship, learn to be a great leader. You know, from a leadership standpoint, there's a lot of great books out there. I would read every book somebody recommends to you. That's my personal rule. Somebody recommends a book, I just buy it. That's my rule. And then obviously, you know, learn sales and marketing. That's kind of getting started. There's a lot more that comes on when you hit half a million in revenue, a million in revenue, three million in revenue. But those would be the starters. Let's like really zoom in on sales and marketing. That's what a lot of our audience cares about.

5:46So let's talk to them here to get your first few clients. What did you do and what would you now recommend people to do to get their first few clients in the junk removal business? What we did is we had this philosophy that the most important part of every job was not actually the job itself. So just to kind of set the groundwork here, you know, if we go out to do a job and that job is a$500 job for us, the most important thing is not collecting that$500. The most important thing is absolutely blowing this customer away with our experience and making it so that they're going to refer us to their five neighbors, families, and friends who might be able to use our service.

6:24That was really what helped us grow a lot organically in the beginning and now today. So how do we do that practically? There's a couple of things. So first of all, we try to get a review from every single customer. That's non-negotiable. We also give every customer a loyalty magnet that they can stick on their fridge. It's a billboard on their fridge. It's the cheapest billboard you can ever buy. And then also we do soft follow-ups every quarter with our entire customer list, just asking if there's any way we can serve them. It's not a hard sell. It's just keeping our name top of mind because everybody's going to need junk removed again in the next couple of years.

6:55So all that being said, every job we do, we try to turn it into five more jobs based by referral and repeat business. That's the key, especially early on, but really for the rest of, you know, the business's journey as well. Yeah. Just so people know, Joseph has 444 Google reviews and a 4.9 rating, which is like mind blowing good there. What is the secret to actually being able to deliver then to like really start the referral process? Is it showing up on time? Is it exceeding expectations? Is it over communicating. Sure, it's a mix of a lot of those things. I'd love to hear like really the secret sauce to 4.9 stars with 450 reviews.

7:31I got to maybe make a quick edit there. I'm bragging on my team here because they're the ones that get these reviews. But we've got a couple Google My Businesses and it's well over 2000 reviews. And all of them are rated at 4.9 or five stars. So the way they've been able to earn that is a couple things. So first of all, we incentivize our team to do it. We say, hey, if you get a great review, you're going to get a bonus off of that. So that gets them bought in. And then for getting the reviews, we just ask. It's the easiest thing ever. It's a no until you actually ask for it and they tell you no again.

7:59But a lot of people, if you do a great job, they're going to be willing to write you a review. One of the things that we do that I think helps as well is we have a competition every month to see who can get the most reviews. And then we tell our customers, hey, we're having a competition this month. I'm trying to win and it would really help me if you'd be willing to write us a review. would that be possible? And so many people are all in on that. You know, when you've got a young college kid rolling up to your door, it's super polite, treats you with respect. And then they ask for reviews so they can win a competition.

8:29I mean, come on, who's not going to do that? So that's kind of tools that we give them. But at the end of the day, it's just asking for it. Damn, I love it. Yeah, it's really good. So that's obviously organic. It's a great way to get your first customer's referrals really breaking the door. But if you really want to scale this thing, obviously, you need some Google ads, I imagine SEO yard signs, maybe even truck designs. What's been like the most effective, like paid strategy for you to actually grow? Yeah, I wouldn't say there's been like one strategy that's the most effective. But what I can tell you an effective strategy look like is you have to build your marketing funnel from bottom to top.

9:03So practically, what does that look like? I think like very, very bottom of the funnel is like, you have to have uniformed employees, you have to have clean cut shirts tucked in, you know, everybody's wearing the same pants, clean boots, like, you know, really clean uniforms, clean trucks that have been washed, all logo, they look the same. So starting there, then you're going to start with Google ads. That's really going to kind of like be the bottom of your funnel. That's going to like catch all of your leads. But then at the top of that middle funnel on the top, you're going to have all of your branding related channels.

9:35So, you know, yard signs is a good start there. You know, obviously building up like your Google, my business that can lead to a lot of lead gen. You know, the very top of the funnel, like billboards, TV and radio are really powerful ways to enhance your brand. Obviously, you know, there's a barrier to entry there, so you can't necessarily start there, but you really want to build this diverse funnel where ideally like 50 % is going towards those branding top of funnel type sources. And then you've got, you know, the rest of it's going to be split between stuff towards the bottom, like Google ads, SEO, web development, those types of things.

10:09But as you scale, you'll be able to do that more. You'll be able to build it up and pump more money in those type of funnel things. Yard's ends are also huge. All of our crews put out 15 a day. So it's a great way to spread the word. Most people spend months, sometimes years, just thinking about starting a business. But what if you could do it in just 10 days? That's exactly what the 10-day business launch plan is designed for. It's a step-by-step roadmap that takes you from idea to real operational business in just 10 days. Click the link in the description below and get ready with your business.

10:39We're gonna stay on marketing, but I'm gonna ask how you budget this specifically. You sell something for a hundred bucks, let's just keep it simple math. Is whatever going to payroll, whatever going to payroll,$15 going to marketing? Or how do you guys budget that? I'm just out of curiosity on how you do it on your end. Yeah, I mean, for us as a business that's north of$10 million a year, it looks very different than if you're a startup. So, you know, if you're a startup, I think the general rule of thumb is pay yourself as little as humanly possible and throw as much into marketing as possible.

11:07Don't be the guy that pays yourself 200 grand a year and then just kind of like, you know, squeezes as little into the business as possible. You know, once you're a more mature business, you know, your marketing spend is gonna usually be south of 15 % depending on market. So some markets are gonna be like, you know, 12, 13%. Some will be as low as six, seven, 8%. But it really depends on the market you're in. But, you know, I can tell you for me in the early days, when I was really growing the business, you know, years one through three, I was putting 20 to 30 % into marketing. Now, I was a really young kid who had cheap rent, didn't buy nice things, and I could more or less afford to do that.

11:41I didn't have mouths to feed and a family. But I would say general rule of thumb when you're starting the business, pay yourself as little as possible, keep overhead very low, and then pump as much into marketing and sales as you can. Really good. Seeing on that same thread then, I know you mentioned a bunch like billboards, obviously like, well, uniform people, Google ads, SEO. If you could only invest in one when you're starting out, is there one that you would only invest in to begin with? I would start with a website. You got to think of this though as building blocks. It's not like one of these is going to like do it for you per se.

12:14You know, I would say if you're going to invest in something outside of yourself, it's going to be a website. But to be honest with you, like you are the best marketer there is. And also your marketing is free. So it doesn't cost you anything, maybe except gas to go to a local networking meeting or to knock on doors or to put out, you know, stay on the side of the street and hold your yard sign and wave at people. So a lot of that is really what gets the business off the ground in the beginning. Also like leverage your personal network. I remember, you know, when I was starting out, I would text every single person on my phone and somehow I had like 2000 contacts.

12:47That's a customer list right there. So So you got to be really creative in the beginning. And a lot of kind of that scrappiness is going to just be creative ideas you come up with. It may not be like traditional marketing like you do when you're a more mature business. But by golly, just look for frigging opportunities and capitalize on every one of them that you can. Yeah, really good stuff right there. Another important part to your operation is repeat clients. Everyone wants repeat clients. It's really a key to like grow. It says here 35 % of your business is actually repeat clients, which is incredible.

13:17What are like the little things your team does, right, to make that experience so memorable where people want to come back to you? Give us some actual advice here for our listeners. Yeah, so it starts with who you hire. My rule of thumb is I would never hire anybody. I wouldn't feel comfortable sending to my mom's house. You know, so from an appearance standpoint, you know, I'll let your listeners read between the lines here. But, you know, you want somebody that's very presentable, somebody that looks professional. Think of, you know, a Chick-fil-A employee. That's who you want showing up at your mom's door.

13:47So why would you hire anybody else? I would not make compromises on hiring. We would prefer to be understaffed and overworked than to hire the wrong people. So it starts with who you hire. The next thing I would say is your standards on the people you do hire. So making sure they're adequately trained, making sure that, you know, shirts are always tucked in, they look presentable, guys are clean shaven, or, you know, they have a beard, that's fine, but it just, it needs to all look tight. I think those are two starting points. You know, I think moving on from there, when we get to the person's house, presenting price clearly.

14:17That's always going to be the question, everybody, what is the price? So present clearly and confidently. And then also, you know, at the end of the job, we talk about doing something for your customer that wasn't in the job description. So like some really like easy slam dunks is newspapers at the end of the driveway, bring it up to them. Trash cans at the end of the driveway, bring it up to them. If you see a hose around the house, it's just kind of all over the place. Put it all nice and uniform. We always sweep. Those are little things that generally nobody is expecting you to do, but it goes above and beyond.

14:45Afterwards, we send a handwritten thank you card to every single customer. Sending handwritten thank you cards isn't entirely unique. I think something we've done that is fairly unique is it's not written by somebody in the office. It's actually written by the guys who service the customer that day. And we have a huge emphasis on writing personal thank you cards that somehow highlight something about that job or like, you know, Mrs. Jones gave them cookies while they were at the job, which happens, believe it or not, quite a bit, then we say, Mrs. Jones, thank you so much for those cookies. It was such a joy to serve you today.

15:16If there's anything we do to help you in the future, just please let us know. And that's from Mike and Matt who actually came out to you that day. It's not just some generic message that we copy on a thousand thank you cards. So those are some of the little things I think we do to go above and beyond, but there's obviously the things you have to do. Like you have to show up on time, you have to be competitive with your pricing. You know, you have to be friendly over the phone. So those things as well. I love the handwritten note. I was reading on Twitter one time from Nick Huber. I know you may know who that is.

15:42You might know a lot. I think he's actually Atlanta based, but he was saying when you're starting off, like do things that are unscalable and handwritten notes are a great unscalable thing to do, but it just adds so much more to the experience. Love to hear like any other unscalable things that your team does that like really helps you stand out when it comes to giving that customer a great experience. I might push back on Nick with that. I think it is scalable. If it's not scalable, then you've been in the wrong business. But yeah, I told somebody yesterday, there's two things you can never do too much.

16:12And I said this in the context of family, but I think maybe using different words, you can say it a different way. But you can never say I love you and too many times and write too many thank you cards. And maybe in a business context, you can never say I appreciate you too much and write too many thank you cards. So it's a great philosophy there. Let's transition into revenue and growth here. Because at one point you scaled from four U-Haul trucks, about 60K a month or whatever, but realized it wasn't profitable. What did that teach you about growth versus smart growth? Yeah, it teached me, you know, that first of all, top line is for vanity.

16:49Bottom line is for sanity. Saying, well, we do this much in revenue. I really, I mean, congratulations, but what matters is how much is left of the bottom. So chase the bottom line. And how do you chase the bottom line? Because that's not an unheard of concept, but what does it really look like? You've got to get really good at managing your P &L. You got to understand what it is. you got to understand what your costs of goods sold are exactly what percentages those need to be at you've got to have a really good understanding of your overhead and how the seasonality of your business or lack thereof is going to impact your overhead can you afford your overhead you know just because you can afford it for us in july doesn't mean you can afford it in december so i think really good p &l management is really key and then honestly you know distilling your p &l down into clear kpis for your team is essential so you know we have like kind of like dumbed down P &Ls that guys fill out every single day.

17:36So when a guy moves into management, he already knows what labor and disposal and insurance and fuel, what percentages, you know, those should be in the business. So getting the whole team bought in on the numbers of the business and understanding them is crucial. You're not going to create a profitable business without it. Are you personally, I mean, as like the CEO president, are you tracking this daily as well, understanding exactly what you guys profited that day, what you lost that day? I would love to hear that as well. Because I think honestly, like knowing your numbers, we just had another podcast as well.

18:06Knowing your numbers is critical to growth. You have to know exactly how much you're making, how much you're spending, what your overhead is, if you truly want to grow. So I'd love to hear from Joseph Lambert. Like how much are you looking at like the P &L? Is it daily for you or what advice do you have there? Every day we have a report that comes out that's kind of like an estimate of that day, but it's not final numbers because sometimes you may have crews getting in late and that comes in around six o 'clock. So that gives like leadership kind of a snapshot of that day. Then the following morning, usually before noon, we're going to get a report from the previous day that shows all the costs we had for that day, the revenue that we brought in, a much more detailed report.

18:42Now that's not a true P &L because that's not going to account for our fixed expenses. It's just going to be really our cogs. And that just gives us a great snapshot of daily performance. And then in our weekly staff meeting, we're going to go over more in-depth numbers that are going to simulate much more of like a true P &L. But then to be honest with you, like you don't really get a full P &L until the books are closed for the month, just because, you know, there's accruals that have to go into that. You got a factor for appreciation, amortization, interest expense. Some of those things, it's just not truly feasible to look at those on a monthly basis or on a weekly basis, more so just on a monthly basis.

19:17But we basically figured out like, OK, what are the numbers we can control on a daily basis. And those are the numbers we need to see on a daily basis. You know, if our interest expense or our insurance is going to be the same bill every single month, then we know that there's no point in seeing that every. So for me, what I would advise guys to do is say, okay, what are the businesses you or the numbers you can control today that will make you successful? Follow those on a daily basis and then say, what are the numbers on a weekly basis you control? Follow those on a weekly basis. And then you can look at the rest of them on a monthly basis.

19:48Yeah. It's so important to like know your number. I was literally just for my own company. I ran our whole June expense yesterday and just gives you such a good idea about where you're ending up at. It is something truly like I should be doing weekly, but I do it monthly where you're throwing dollars at here. Something for you as well, balancing growth of a lean team because 1 million a month is obviously super impressive. You're at 150K and EBITDA. You care about profitability. I mean, how do you balance that growth of spending marketing, but also with staying lean? We've got a phenomenal finance team, our controller who leads that.

20:19I think he leads the charge with making sure that we manage our cash adequately. And then when we have cash, we can invest it. We're paying down our debt. So I think it really starts there and having a really good budget that's built out that we stick to. And to be honest with you, some of it's gut. Sometimes there's a certain market that we feel good about and we'll say, hey, we're going to invest a little bit in that market. We don't have a ton of data to back it up, but we're entrepreneurs and we just see the potential there. So there is an element of that. But generally speaking, everything we do is needs to be largely data driven.

20:53So we need to have some concrete reasons for why we do that. And at the end of the day, like, you know, I see my job is stewarding the team that we have in Atlanta and, you know, across all of our locations. You know, people are counting on paychecks every week for their families. So we need to steward our resources so that we can continue to operate this business and help them provide for their families. So, you know, we want to be aggressive, obviously, but we also want to be foolish. Yeah, it's really inspiring to hear like how much, I mean, a million dollars, a month in revenue is like just mind blowing.