Ep 206 - "Build It So You Don't Have to Be There"

0:00 Well, dude. Yeah. How you doing? Hey. Well, good. Good. Back at it. We had a lot of sun and now we're back to kind of the organ thing. Ah, jeez. I know. It's depressing. And I'm out of vitamin D, so. Yeah. That's all right. Well, hey, so we've got a banger of a show today though. We have Rocky Hensley back on. He climbed out of his corporate jet to hang out with us. His corporate jet. Stepped off the yacht. He took time from his boat's car. Oh, man. We joke, but... Planes. You know, what's always so fun about Rocky is the stories. I mean, he has... This is what is 13th exit.

0:40 Yeah, 13th, 14th, something like that. So those of you who don't know, Rocky Hensley, co-founder of One Tom Plumber, most recently. Also the founder and past CEO of Icon Restoration in Cincinnati. Yeah. had a very, very successful exit a year or so ago, I guess. Yeah, roughly. From that business. This most recent, well, anyway, we're going to get into it in the show, but this guy knows how to win. And he's always just like super cranked up and positive every time we talk to him. He's got a certain way about him that I think is just super magnetic. I'm still curious what a bad day looks like for Rocky. We haven't seen it yet. Never seen it? I'm sure someone has. But we get into a lot of really good stuff.

1:21 I mean, we end up talking about sales. We end up talking about, I don't know, we covered a lot of territory. Yeah, system standards. I mean, he tags a piece specifically around what you pay people and selection. Yeah. And selection process maybe is the right phrase. And you know what, man? I'm still chewing on it. It's one of those radical truths that it's easy to hear and say it's extreme or say it's not real. But we've been on the inside of both of the two more recent organizations, both ICON and obviously with one Tom. It's impressive. It works. Yeah. You know what his conversation reminded me of is a thing that my friend Paul always says.

2:03 He says, get two or three of the biggest things in the business right so that all the rest doesn't really matter. Man. And that strikes me as kind of how Rocky rolls with his approach to entrepreneurship is there's a handful of key things and we get into those key things that are sacred. Like, hey, you got to get these things right. And then it makes everything else irrelevant. Yeah. You know, so anyway, dig in. This is one to take notes on and probably share with your team. That's right. Wow. How many of you have listened to the Head Harden Boots podcast? I can't tell you that react how much that means to us. Welcome back to the Head, Heart & Boots podcast. I'm Chris. And I'm Brennan. Join us as we wrestle with what it takes to transform ourselves and the businesses we lead.

2:48 This new camera angle makes my arms look smaller than yours. I'm noticing that and I really appreciate it. I thought you did that on purpose. No, I don't. I didn't. And I am not happy with it. What's up, dude? Welcome back. What's up, big dog? Just silence my phone here. I'm ready to go. How's everybody doing there on that side? Hey man, life is good over here, but we have been watching the socials and the things and clearly there's some stuff happening on your end and you're the guest. So that's where we're going, my friend. Well, before we get started, I got to tell you, and I've had other people say this, you guys have the best background. I mean, guys who can't see this video, it's the most badass background known to man.

3:30 And I've had other people, we've actually had conversations literally about your head, heart, and boots podcast background. The background? Yeah, right on. Well, shout out to Jana Reese for creating that for us. Yeah, that's right. This is by far our most favorite. Yeah. So what's up? Well, man, I think, and you know, it's probably, maybe it's just Chris and I's morbid curiosity, but we absolutely have to know more about what in the heck just transpired between you and some PE. And as it relates to one Tom, we've got some other areas to go, but man, bring us up to speed. What just happened? Yeah. Tell us about the Eversmith deal. Okay, well, what ended up happening was we had a five star and we had a bunch of PEs kind of coming at us hard.

4:15 When we hit the 100 franchise mark, apparently that just like puts you in a different level. And we just had them coming at us. And so basically it became a little bit of ambulance chasing. And then we played them against each other because we honestly weren't trying to sell. But the money they're offering... was just like stupid generational money. So we started listening and then we got it down to three private equity companies. And we ended up going with Riverside, which is about a $14 billion company. Holy cow. And what they do is they put these pockets together of franchises, like we're mostly commercial. That was our deal with Icon on the restoration side. We were at 80%.

4:56 And one Tom Plummer is probably about 60% commercial. So they liked that. And they put us into this pocket called Eversmith. And we were the seventh brand that they bought under the veil of Eversmith, which is its own company. But it's ran and managed by Riverside, which is a big ass, you know. And they've been in business since 1982. And that's what they did. So, but the reason we actually... and I don't mind saying this, I'm sure I'm allowed to say this, but we took a $5 million haircut above somebody else. We picked them because we wanted to invest back in and Cameron and I took 30% of our money and, and went back into ever, ever Smith.

5:37 And well, we cut, we thought the upside that, you know, the next whatever was going to be way bigger. But the other thing they agreed to was they were going to dump $10 million into the one Tom Plummer brand and kind of take us to new heights, new levels, and just, Honestly, they're agreeing to do that and so on and so forth. But if they're going to do that and take care of our people, then we couldn't get what other people were offering. So the money was so stupid. It just honestly didn't matter. I can't even begin to tell you. I know I'm not allowed to tell you, but you can figure it out that it was just stupid, stupid freaking money. My problem became like I've already like increased the size, like I'm in the middle of buying a new jet, you know, just like that kind of stupid, you know.

6:21 So those are my big problems. Like how do I get this new jet painted and, you know, things like that, you know. So my problems have increased exponentially, obviously, you know, so. Holy cow. I was wondering, man, because honestly, when news broke, I seriously, like I remember kind of looking at Chris like, where the hell did that come from? Because I, you know, talking with you prior to that, I was under the impression that wasn't even kind of on the radar at all. So... Yeah, it wasn't. Honestly, I know that sounds stupid to say or condescending to the listeners, but it really wasn't. It was just the money that PE wants to pay for the future, you know, or that they're willing to pay.

7:04 And here's what I can tell you, too. They paid us an 18 times multiple based on what 2026 was going to be. holy cow, was going to be. Yeah, because we told them we wanted to wait. If we're going to sell, we're going to wait until the end of 2020. Gosh, what was the one in Virginia? I put it five star and the other one, I can't think of the PE company, but they do a ton of brands like ours. We're trying to get it. And we wanted to wait until the end of 2026 because we feel like we can get X, you know, and it was a lot of money. And they said, well, if you choose us. So that's what 18 times what we projected 2026 to be.

7:46 The funny thing is, it was still $5 million less than what somebody else was offering us. Um, and we went with them because we, we just felt like they were just a better fit for the brand. Now I wouldn't have probably swallowed the 5 million bucks initially if I didn't feel like there was a huge upside down the road too. Yeah. You know, I'm a good guy, but I don't know if I'm that good of a guy. You know, but we feel like the next sale, which, you know, who knows when that'll be, could be just as good. I mean, the numbers are saying that, you know, so this will probably happen again in three to five years. That seems to be their MO, you know. The rotate. Yeah. Now keep in mind too, like we're still an owner and part of what we negotiated was Cameron around the board because we still wanted to have say, this is our baby.

8:33 We've got a lot of people that are friends. I mean, I literally just went on a golf trip with five of the franchises. You know, we're still buddies outside of the franchise. Yeah. Things like that. So me and Cameron, my son own a stake in six of them and we're buying another one. Probably. I can't say that, but by the end of the month, we'll be closing on a seventh one. because I still love the brand. I still want to be part of it. And we still want to say in how the brand went. And they've done everything they said, truly. I'm not saying this because they might be listening. They've literally done everything they said and everything they agreed to, and then some. Like, couldn't be more happy with it. We closed on Black Friday, which Cameron and I have been calling Green Friday since then.

9:15 You know, so... And they closed in two and a half months. They closed so quickly. It was just shy of two and a half months because they thought we were going to change our mind and go with one of the other brands. Everything about that is absolutely abnormal. Yes. Just absolutely everything. I'm curious, and I don't know how much of this came up in your dialogue between suitors or not, but again, is this just part of that? They're seeing the writing on the wall in terms of the value of the blue-collar brand? ecosystem? What did those conversations sound like? What did you learn in this process in terms of why they're hypervaluing this stuff? In fairness, Cameron did 90% of the negotiating and the working through it and talking to them and getting it down to three.

10:02 I kind of came at the end when we're playing a little bit of chicken You know, because God love PE, but they always like find something they don't want to pay for. And we feel they should pay for it. So it's like two days before we closed, I got on the phone and I was like, you know what? Riverside will be just fine without one Tom Plummer. And one Tom Plummer is going to be just fine without Riverside. Well, wait, we can let's talk this through, you know, kind of deal. So and I'm just a little bit more like don't care. I guess you could say, you know, my give a shit meter was, you know, because we were making a shit ton of money. from one Tom Plummer and all the money that it was, you know, bringing in for water damage and everything else and this cool stuff. So, you know, and that's the thing you got to not care.

10:45 That's what I tell everybody. Like they're like, when do you know to sell your business? Okay. And I always say whenever you would buy it, like don't build a company to sell. I'm going to build it because this person, you know, might want it. I always say, when I want to buy that company, when I can go outside, look back in and say, damn, I want to buy that company, that's when you sell your company. What would that look like? Like when you're evaluating that, what are you looking for? That's a great question. And it's simple. so simple and people ask me all the time because this is my 13th company that i've sold is there two things honestly when i know i want to buy a company is when it's making 20 net profit net profit and i can show you i always say taxable because you cannot argue with me it is freaking stamped by the federal government i am making 20 boom and that's after you take your cars and whatever else you know that legally you can take as a business owner yeah you're still stamping 20 That's it.

11:44 When I make 20% taxable or government and I don't have to show up to me, that's a company that anyone would want to buy. Yeah. It runs itself. You got great people, you know, and that's where we were. In fact, it was a little better than that, but that's the same with icon and everything else. That's when I know I've got a business that I'd want to buy because it's profitable to this measurable and I can buy it and it's going to run itself. And that was the thing too. They didn't ask for one day. They came in about one Tom Plummer who Cameron was the president until, and about two months before we moved Angie up to president and Cameron to CEO role. And they didn't ask us for one day. Like they came in, they bought it, took it over because literally by the time they did due diligence, they realized that we were pretty much, if they brought us back in, we would have been a bottleneck in fairness, you know, other than Cameron brought a lot to the table, but other than ideas and, you know, some opinions.

12:40 They didn't need the money and everything else that I brought to the table. And we had a great team selling franchises by that point. So that's the key. If anybody's listening, focus on two things. One, build a business that makes at least 20%. I mean, and I did it at ICON to the point where What we did was we put a line on thing and anybody, anything that we did that made less than 60% net profit, a gross profit, we stopped doing anything that was above that line. We did more with the exception. I had a really tough time getting mold over 58%. And mold was a very integral part of the restoration business. So we settled for 55% gross profit with mold and, you know, it still made money and stuff like that, but that's what we've always done.

13:23 That's why one Tom Palmer, it's why it's, you know, emergency and service because that's, that's where the money is. Once you start bidding, you bid the profit away. That's all, you know, so it's our motto, a mantra. And that's the only way we could stay about 20, 20% net taxable. I'm, I'm curious, because you started to answer this already, just in terms of you guys are still integrated and all the things, right? But where is it now that you're still, if you're okay talking about, just invested in terms of the franchises, the cities? What are you still holding on to and engaging in? We've got four locally here. We've got Cincinnati, Northern Kentucky, Dayton, and Springfield, Ohio, which is about an hour and 10-minute drive.

14:04 That's our furthest one. And then I'm partners with my best friend since I've been 17 years old in Louisville because he got a golden parachute or whatever you want to call it from a high corporate Humana job. And always wanted to be his entrepreneur and said he would do it if I was involved. And they're killing it. They were our franchisees of the year. I had nothing to do with it. Everybody thinks I did, but I didn't. I swear I didn't even know until the day before that they won franchisee of the year. But having said that, and then me and Mike Wilson and Cameron are partners and Mike Wilson owns four of them. I think, and he was our very first franchisee. We went in partners on Asheville. Whenever the big floods happened and stuff, we just saw an opportunity there. We jumped in on that. And then there's one in Florida that I'm negotiating on that should close May 1st.

14:48 Wow, that's awesome. I love the brand. I love everything about it. And that was also something that kind of almost cost us the sale at one point because they wanted the Cincinnati, which is the flagship, you know, and they needed it to bring people in financially for the discovery days and say, Hey, this is what we're selling. This is what you want to be. And I had no interest in selling it, didn't want to sell it and wasn't going to sell it because I love being part of it. And I'm still like charging the money. I still do some stuff, you know, with it every day down there meeting with them for an hour today. I mean, it's just, I, what am I going to do? Garden? You know what I'm saying? I don't know. I've seen video of you enjoying boating pretty well.

15:28 So I still want to be part of it. I love being part of it. I've got great people. So I don't know if I answered your question or not, but I get sidetracked. So don't hesitate to bring me back. Yeah, no, we know you can get a little squirrely, but that's also why you've built so many businesses. It's hard to keep you contained, you know? So Cameron, so now he's sitting on a board and he's Mr. Board Member or is he still engaged? Listen to this. We closed in November, the end of November. He went to the Annapolis Boat Show, bought a 43-foot catamaran. It's got three bedrooms. It's beautiful. It's like three bedrooms with literally their own bathroom. And it's got an office in it. It's beautiful. It's a sailboat, plus it also has motors.

16:09 And he's been on it since January 3rd, and they're living on that boat right now. Unbelievable. Unbelievable. Yeah. And so he just, he's down. I literally flew in at 3.30 in the morning from, we went to the UFC fight in Miami that weekend. And then I went and got on the boat with him for a few days and just kind of hung out in the Keys, you know? And so he's, I'm like, what do you want me to tell people? Are you... I'm semi-retired. And he goes, I don't care what you tell people. Like, well, people ask. And he's like, well, just tell them I'm semi-retired. Because he's still, you know, from afar, gives his opinion and stuff on our franchise and stuff like that. And now he's like, I don't know if I'm supposed to say this or not, but he says my job is to just manage money.

16:52 Yeah. Yeah. Because we were partners in the one-time plumber. So he's 29 years old and he earned it though. Everybody, you know, he slept under the desk. He worked his 80 hours a week for literally seven and a half years. Yeah. He did what entrepreneurs do, you know, and sacrificed and didn't have a life, you know, one month out of college and he clocked in and for seven and a half years, he hardly would take a trip. If he did, he took a big trip, but then he started it. He's a two state plumber. What do you call it? Certified plumber or master plumber, master plumber. And he's going for his third. I mean, you know, he drove the trucks, rode in the trucks. He built the business up. You know, my job was to sell franchises and put in the money. And he did everything else. So, you know, all he was given was an opportunity.

17:35 And he put his own money in, too. He had six figures that he initially invested into one top. So. That's phenomenal. It wasn't nepotism. It was an opportunity that, you know, he was given, but he absolutely made the most of it. And again, he did all the negotiating with all the people. We had about 30, 32 people, 33 people, and he got it down to the three. And we literally flew out to each one and talked to them and saw the facilities, talked to some of their employees, things like that, because we wanted to make sure whoever was going to come in and take over one time was who they said they were. You guys had 32 suitors. I think it might have been 33. It was 32 or 33. Yeah. Unbelievable, man.

18:16 Yeah. And we can probably move on from the topic after this, but I'm so curious. So was it like one or two started and then it kind of started to frenzy up? Or was there just something as soon as you hit 100 franchises, those groups, they do their own due diligence. They need some work. Yeah. And then Cameron, you know, just like anyone, I think he was got a little burnout. And in February of last year, he had a baby, you know, his wife was pregnant, he wanted to be a dad. And I'm telling you, I'm not saying that he literally worked 78 hours a week all the time on Saturdays, like we'd go over and visit and he would come out of the office because he was working, you know, it was, uh, He was just a beast. And I think he got a little burned out and he wanted to be a dad.

18:57 And he's like, hey, I got these people. They're calling like constantly there. He actually used the word ambulance chasing. He goes, do you want to start talking to some of these people? Because I'd really like to, because I don't want to be a weekend dad. And I'm like, yeah, let's do it. And once he started talking to people, like you said, I think it was 32, 33 people that we started with. And then we got it down to those three. And then we went out and visited each one and just felt like Eversmith slash Riverside was by far the better deal all the way around. The other two were really, really five stars of top flight operation. And for whatever reason, I can't think of the third one, but they're all really great companies that we would have been happy with.

19:38 Eversmith just wanted us to be part of it. That was the thing. That's phenomenal. Man, congratulations again. Thank you. Sometimes it's better to be lucky than good. Well, and five years ago, before COVID, the plumbing business wouldn't have been in play at all. So timing has a lot to do with it. Now everybody wants to own trades because they're recession-proof for the most part. Yeah. Yeah. Yeah. Yeah. Yeah. I mean, just a lot of factors tie into it and we never planned on selling it, but we did. And, you know, people are like, oh, no, we really didn't. But somebody didn't offer us that kind of money. And then take 2026 proposed financials.

20:21 Oh, yeah. We're like, okay, cool. So what's the future hold? Where's your head go? You know, it's been what, five, six months or whatever since the transaction. What's coming for you? Great question. I've already bought a couple of into a couple of the franchises from Embersmith, which was one of them is called Seals, which the smaller franchise, like if you're a million dollar franchise, you're a big one. But it's a 70 percent profit franchise because you're just going around. switching out the seals and Kroger's and Whole Foods and restaurants because the Food and Drug Administration makes them so that they stay tight. So I bought two of those because we already have a base of customers from one time. I'm just going to tie two and gather.

21:02 But the other thing is too, we'll use that to get into ones we don't have at one time, you know, on the plumbing side. And then a hood fit cleaning company called Kitchen Guard, which is a franchise. We bought both the Cincinnati ones for the same reason. We have about 150 restaurants that we already do business with, with one Tom. So we can plug those in, but then there's a bunch of them we can't get into. So we're going to try and use that to get one Tom into the other restaurants and stuff too. So we just feel like they're, they're complimentary businesses. So we, we've already bought those and getting ready to launch. We are just launched one and launched the other one. Nice. Is Sonny engaged in any of these in any way, just locked in on one Tom?

21:43 No, those are all me. And Cameron, I invited him and he's like, no, I'm good. I just didn't want to do it without you. And he's like, yeah, man, I just want to be a dad. I want to sail and see where the world takes us. Oh, my gosh. Unbelievable. The funny thing is, too, he's got another one on the way. So he's got it. He goes about the middle of June. He's got to put the boat up because it's a little boy. Coolest name in the world, Atlas. He's got Oakland and Atlas. And he is putting the boat up about the middle of June and see where it goes from there. And I'm like, so are you going to get back on the boat? And he's like, I hope so. I was like, are you sure? No.

22:23 Good for you. You know, I'm like, I have a little more certainty, but he's a tumbleweed man nowadays, you know? So. Wow. What an incredible place to be is 2019. So question about the seals and the kitchen guard business. Sure. You know, I think this has been kind of a concept that I think is emerging in the services space, in the trade spaces, being a one-stop shop. Right. I mean, you see this, like, obviously, one Tom really built on that. Restoration companies extending out into plumbing and using that as a tip of the spear for sales and a source of leads for water and so forth. But of course, people have been getting into dryer vent cleaning and duct cleaning and some of these other accessory services.

23:05 Is that a vision that you see continuing to... scale out in services? Is companies doing all of the things relating to a commercial property or home? Yeah, absolutely. And I used to do it. I had three 1-800-Packout franchises that I used to use Icon, my restoration company. We did that. I think we got up to $8 million, $8 million something dollars and ended up selling that off. And then we had a board up company, which was 859 Board Up and ended up selling that off. Both of those we sold off when we got out of the rebuild business because it went under that line, couldn't figure out how to make 60% on it or even in the 50s. So once we got rid of the rebuild, I went ahead and sold those off too.

23:47 Yeah. All three went in together, you know, and then we had one Tom. So we basically had four companies. If it was water damage, one Tom would kind of bring it in and Icon would do it. Or if it was a fire damage or something along those lines, then they call the 859 board up. Boom. we'd take care of the board up, but then that's when we'd sell. And then once we sold Icon, then Icon would sell 1-800-PACK-OTS. So I saw that then and saw how that worked. And we were constantly talking about how can we help each other out? How can we send each other business? And when I sold, I'm like, okay, I need to get some other businesses that can help each other grow, you know? And the money's there because you guys know a lot of the expense, like one time is a great example.

24:29 Right now I'm paying $113 to get in somebody's house, $113. Okay. And a year ago it was 102, you know, and it's just going to increase. Well, if I got somebody that I'm making money from on the hood bin cleaning and I can get one Tom in for free, I just made $113 extra on every one of those jobs, you know? So it costs money to get that customer the initial time. And all you guys out there, you're entrepreneurs, you need to know what those dollars are. You need to know how you're spending it to make the phone ring because that's the most important part is sales cures everything. I'm sorry to get preachy, but I say this all the time.

25:10 I see my brothers in arms in the restoration business and I'm like, dude, you're running the business or you're trying to run the business, but the business is running you because you're stuck in operations. operations, you can screw stuff up and you get five more calls, you know, you fix it, you do the best you can to move on. But if you're not paying attention to the phone ringing and the sales, you're dead. You're just dead. You know, that's, that's what determines, in my opinion, highly successful companies as opposed to okay companies or just successful companies. And it's your, it's your own definition, but I'm doing the podcast because I'm giving my opinion, but my opinion is. It's sales, sales, sales. I mean, if you get back into someone's house, we've literally had someone hit the gas instead of the brake and go through someone's garage and into their laundry room.

25:54 I mean, we've screwed up in every way imaginable. We apologize. We fixed it. We made it better and we moved on. And that customer approach. probably will never use this again. But if we focus on getting five more calls, well, it doesn't matter. But if we don't, if we just so focused on fixing everything all the time and not on sales, you're just never going to scale. We're not going to be a big company. So that's just my philosophy. Everything is sales driven. Yeah. Are you a business that's under 5 million in sales and you're just now getting ready to try and scale your company up and hit some of those targets you've always wanted to hit, but now you've got to build a sales team? Or maybe you just hired your first sales rep, but you don't really know how to manage them.

26:34 Like how do you manage, lead, train, develop a sales rep? Floodlight has a solution for you now. So we can actually assign your sales rep a turnkey VP of sales that will help them create a sales blueprint, their own personal sales plan for your market. They'll have weekly one-on-ones with that sales rep to coach, mentor them, hold them accountable to the plan. And they'll also have a monthly owner's meeting where they'll meet with you or your general manager and review the progress of that sales rep. Their plan to actual results, what kind of performance improvement they're working on with them. Also let them know, hey, you might, they're doing really well. Maybe we should think of hiring a second sales rep. They're going to have that one-to-one advice for you as an owner or senior leader on the team as well.

27:15 How great would that be to have a bolt-on sales manager for your one sales rep and it's only $2,500 a month? If you're interested in talking more about that, reach out. Let's grab some time and let's talk shop. Our floodlight clients this last year in 2024 generated over $250 million in revenue. Supported by, advised by, an industry expert who's owned and operated a business just like you. So take action. Don't kick the can down the road. Start with our business health and value assessment. And let's unlock the next chapter of your success story. I'm curious on those lines right now, Rocky. In general, the industry is communicating and certainly FPs experienced it firsthand where the sales volume, the things, the strategies, the tactics that we were deploying, there's a heavy requirement for shifting and changing What are you guys seeing in your body of businesses and obviously within One Tom where a lot of your franchisees are owners of restoration companies?

28:16 What does some of that dialogue look like? What are you guys hearing, seeing? What are you doing? That is a great, great question, man. That has so many different complexities and parts to it, but I can give you a general overview. The problem right now, and as I see it, is the insurance companies are trying to do to restoration what they did to doctors and hospitals. And, you know, and that's dictate. I mean, basically what you're doing is going in and healing a house, you know, and now you can't do certain things because the insurance won't pay you, you know, and. And that's what I'm hearing the most is like, how do we combat that? And that my solution was go to commercial. So that's why we focused on commercial.

28:56 And how do we do that? Then that's how we kind of invented one top because that was our way in to get to get commercial accounts. But I don't know an answer for you as to how to, other than just nickel and dime the insurance companies, knowing that you're going to get a 10 to 15% haircut and move on. Everybody's like, oh, I don't want a nickel and dime. Absolutely, you do. Because no matter what, if you nickel and dime or not, adjusters never adjust up. They're not co-adjusters because they're adjusting up. That's true. Yeah. So that's the biggest thing that I see is just how do you transform your business in two ways as far as restoration is one. You know, you got old people like me that just are scared to death of AI.

29:39 OK, and how we use AI and how that's going. But you better get comfortable with it because that's the way the world's changed. It's just like when the phone book went away. And everybody was like online, oh, God, how do I get the phone to ring? You figure it out. And AI is no different. That's the direction it's moving. And then how do you maximize what you can get from the insurance companies if you're doing residential? And that's what I'm hearing people talk about is how scared they are of those two things and how they overcome those two things. What do you see in terms of, obviously, you knew when you were building Icon and things like that, what the value of a one-tom or that plumbing service line was worth. But right now, as you guys have been growing so quickly, in the midst of what the industry on the disaster restoration side has felt, definitely constricting, squeezing, shifting, whatever you want to name it.

30:28 Yep. What's happening with your guys' franchisees in terms of, is that one-time difference? Is it showing up? Are they experiencing some advantages in the midst of an industry that feels like it's been a little bit on a downward spin for a minute? Yeah, and I'm not sure you probably know better than I do what the percentage is, but I've heard that the restoration business was down almost 20% overall in the United States last year. But then there were like 14,000 new restoration companies that opened up. You know, so that's very telling that the restoration business is something people want to get into. But I have no idea what the 20 percent down or up means. I think it's just a lot of weather dependency.

31:10 But can you ask that question again? I'm so sorry. I got it. Yeah. It's okay. I'm just curious as to, you know, with so many in the industry talking about, like I just verified that actually some data from Verisk came across my dashboard this morning that they did identify they were down almost 20% as an industry last year. In the midst of all of that, you guys are still growing exponentially on the one-time side. Is it because people are seeing the benefit of that partnership? A hundred percent. Yeah. I'm not going to be naive or tell you what you want to hear rather than the truth, but about half of our franchisees push it and talk and get the two together. And like Mike's a great example from Greenville and who we partnered up with, he has barbecues in the parking lot.

31:55 because he wants to get the one Tom and his restoration company together. So they work it and we had to work it. We were averaging about four and a half calls a week from one Tom into Icon, but it got down to like two and I realized that we just weren't working it. So even though you own it, you tell them you still have to treat them properly. Like we gave them a salesperson, Leah, to go keep them happy, even though they're right next door, same ownership, same everything. So the people that work it get the results. The people that aren't or think it's going to just happen don't. And that's pretty much everything in life. So I can tell you that it's about half the people, best guess, that are doing really, really well with getting the commercial water leads.

32:38 And then the people that aren't working it are wondering why they're not. And I've had this conversation with them time and time again. But in everywhere in between. So, you know, the halfway people probably need to work a little harder and you have to 20 percent that are struggling with it. You know, so if that answers your question, but the owners that are active, engaged and working it are getting big results. Yeah, that synergy between the two initiatives just makes a ton of sense. I think that's been the push. I know at FP right now, we're just peddled down on commercial growth. There's just no other clear answer in terms of sustainability and independence. I couldn't agree more. I'm glad you didn't say that. Yeah, but it's hard.

33:20 You know, but I can tell you what commercial, I mean, for doing it 20 years before I sold, there's three things that commercial people want. And I treat this to my people over and over and over. And I can tell you what it is if you want me to go after that. First and foremost, okay, they're between a rock and a hard place. These commercial guys, they got the owner of the building. And then they got the plumbing company, the restoration, the service people that come in. Okay. They want you to make them look like a hero to both. Okay. So the way we solved that was we just sold Xactimate pricing and basically said, Hey, we're going to give you insurance pricing. And if you know anything about insurance pricing, they beat you down to the last dollar.

34:02 So let us come in, let us clean it. Let us do what we need to do. Let us dry the building. We're going to put it into the insurance exact debate. And you can tell I haven't done this for a while, but I used to have it down pretty good. And then it'll spit out a price, okay? And it's going to be what an insurance company would pay. And again, they're going to beat me down to the last dollar. If that's something that you're not okay with, just call. Just call and we'll work it through, okay? But the key thing is, let us get in there. Let us get going. That way we don't have to estimate it up front. And that's kind of the way we sold it. I'm giving you the short version. Yeah. And they just want to make sure that you're not going to gouge them. They've got something to tell the owner, hey, the owner, this is insurance pricing, so on and so forth.

34:44 So it kind of takes them out of the middle. But then once you get there, you've got to treat their tenants like gold. Okay. And we would always say we're selling the landlord. Like we would come in and go, Cushman Wings, but let's use this as an example. Like we'd go into a law firm or whatever that was the tenant. We would say like Cushman Wakefield wants us to bring in a bunch of equipment at night and take it down in the morning. Okay. So that you guys don't get interfered with, like we would be selling our customer, which is Cushman Wakefield to it so that they call Cushman Wakefield to go, wow, thanks for sending us icon. Thank you. You know, that was great. They were, they were there before we showed up, so on and so forth. So we were, we would always say constantly sell your customer to the tenant.

35:28 Okay. Okay. That's how we would do that. And secondly, they want you to be invisible. Okay. They don't want you coming in, you taking over elevators and being disruptive and then have things in there. So we, we would practice like, you know, especially in hospitals and stuff, making sure the fans were up against the wall, making sure the cords were laid down, making sure that if we would literally have a bunch of equipment and we would let their tenants go on to the elevator and we'd be like, Nope, we're in no hurry. We're going to be here all night. You guys jump in the elevator, you know, instead of making them take the steps and stuff like that. So we kind of looked at it as a selling opportunity. And then we would walk them through and tell them why we did this, why we put the cords, why we put the tape on.

36:09 Because we don't want any of your tenants, you know, this, that, and the other. And if you need us to, we'll put more down, more equipment, and then come in in the morning and turn them off. Okay? And we won't charge you for any more of the extra equipment that we put. So we would kind of sell that, that we're going to make you look good, but we're going to be as invisible as possible to your tenants. Okay. And three, they want you there. So that's why we always did, we did 59 minutes or less guaranteed or it's 5% off. Wow. Yeah. And that's every, you see our pens, paper, all that stuff. It always said 59 minutes. Now it's an hour, but it's a little gimmicky. It was 59 minutes or less and they'd laugh about it, but gimmicks work, you know? That's right.

36:49 Yeah. So those are the three things. And when we go into these commercial accounts, that's what we'd sell. We'd sell we're going to be there in less than an hour. We're going to be unloading equipment working. You're not going to have to need an approval for a dollar amount or anything else because we're going to come in, we're going to do it, we're going to put it into... An insurance program, we're going to spit it out, let you see it, make sure you're comfortable with it, see if you have any questions. And three, we're going to make sure that we're as invisible as possible to your tenants. We're going to disrupt them as little as humanly possible. And while we're doing all this great stuff, we're going to be telling them that you guys insist on it because you're a quality organization that wants their customers to be taken care of. That's how we sell commercial.

37:31 So Rocky, though, a lot of what we hear in the field and what Brandon and I have experienced is facility managers, property managers, ideally one deck to ring. They want everything. They want that restoration company to do all the putback as well. But you guys got out of the recon business. How did you handle that objection? You know, when you get done cleaning things out, tearing out the effective materials, but did you have a company you were referring to that would come in and seamlessly... Actually, it's funny you say that too, and I'm sorry to interrupt you, but we actually did do it. We would only do it for commercial. Okay. Yeah, we did it. We had four crews. We did about a million dollars a year. But what we did, we did it a little different because we wanted to make that 60%.

38:12 So we only did drywall, baseboard, and paint. That was it. That was it. Anything else that they needed, we would come in and do some tile. I shouldn't say that. But that's really what you want on a commercial side too. But we wouldn't pay our guys 40%. We would pay them hourly, but then that hourly would come out of the 40% and we paid the trucks and everything else. And we basically paid our, it's called a premium rate. That's the legal term for it. We would pay them 40% of whatever that was so that we always made 60% on that rebuild. So every PM was essentially a profit center. Yes. And they got paid on the profitability of their work, essentially. Yes. And they became way more efficient, too. And if they had a helper, that helper came off their 40%.

38:55 So most of the time they did it themselves, unless they had a big drywall job. But the other thing, too, is we kind of capped it at $20,000. Once we got past $20,000, it became a real project. We wanted to be in and out. And we were really good too at, while it was being dry, we had a team leader for that team that would be in there while it was drying, doing like the scope of work. Like his job was getting there while it was drying. So that as soon as somebody freed up, and it was rarely more than two weeks where we weren't back in there doing the rebuild. But again, it was easy because it was drywall, paint and trim. Yeah, I love it. Now, in a lot of those scenarios, were you guys doing a lot of work with carriers or was most of it just out of pocket based on the size of the projects?

39:38 Most commercial jobs, until it gets to about the $100,000 range, is almost always out of pocket because their deductibles are just so high. You know, they're 50, 75, $100,000 deductibles on a three-story office building, sometimes higher. So unless it got into six figures, it was a rare day that the insurance company was involved at all. Love it. So with those boundaries that you created around the 20,000, roughly 20,000 job size and the floors, trim and paint, how did you notice that affecting your collections speed? No great question. It wasn't floors. It was drywall, paint and trim. No floors. Drywall, paint and trim. Okay. All right. Yeah. We never did floors ever. And that's when they, we would.

40:19 They all had somebody that was the floor person anyway. So we never needed to do that. And a lot of times, too, they already had someone for the drywall paint trim. We would only do it if they needed us to. But we kept four crews busy all the time. But what was your question, I'm sorry? Did you find you were able to turn the money faster? You were able to get paid faster by that limited scope and turn times? Yes. Yes, but what we did too, but again, just use Cushman Wakefield. We probably wouldn't get paid for four months with Cushman Wakefield, but we always knew we were going to pay. When you get to those big companies like that, it has to go up the ladder so high for somebody to sign checks that… It takes a while, but you just know you're going to get paid and you kind of get the right people.

41:01 So I would say we were 90 to 120 days on things like that. But the smaller guys, it would be 30 days because we'd offer a 5%. If they would pay us within 30 days, we gave them a 5% discount. And if they went a couple of days, we would still honor the 5%, but that was the deal that we would do. So it either seemed like we got paid within 30 days or 35 days or we got paid in 90 days. There was very, very little in between. So great question. But it depends on the size of the company on how that's going to work. Yeah. There's a lot of variables is what I'm saying. But everybody paid. Wait till it paid great. Yeah. It just took forever sometimes because they're just such a big company and the people you talk to can't sign checks.

41:45 It's really the guy you never or a girl you never talked to. A lot of times they even start out at net 90. Like just you agreed at net 90 before you even move forward and then you lose them pretty easily to just back and forth and whatever things are. Yeah. Is it true to you, Rocky? I just want to make sure I got this right because I want to dig into this a little bit. Part of your motivation, when you determined Icon, for instance, wanted to do more commercial, you started leaning in on the whole plumber approach, right? But you were doing that through some partnerships prior to the establishment of OneTorps, right? Yeah. And when I helped, I don't know, guys, I know that Roto-Rooter is based in Cincinnati.

42:27 Okay. That's where I'm based out of. And they were a huge customer of mine. They wanted to get into the restoration business and it was like make a whole lot of something for a while and then a whole lot of nothing or make a whole lot of nothing. helped them get into it. That's when I realized, but that was back in like 2013, how much commercial work they were getting. And that's actually because of that relationship I had with them helping get into it. When I decided to go all in on the commercial side, because that's where the money was and the insurance companies were starting to put a little strangle hold. It was just starting to get a lot harder. That's why I decided to in 2016 to open up the one Tom was really just to help Icon here in Cincinnati because of what I saw with Roto-Rooter.

43:11 So I, in fairness, I had seen another company, I'd seen them and how much business they got for commercials. So when I decided we were gonna get into the commercial, it was just a no brainer. We had to start a plumbing company. You know, that's where I've seen it work. I know how it works. You know, I saw the inner workings and once my two year non-compete was up with Roto-Rooter, I was able to go balls to the wall. I love it too that you used that phrase. Oh, Naki. You know, the one thing we can count on if we're in a combo with you is you're just going to bring it about as real as the street can bring it. So thank you. I love that shit. Yeah, sorry. I'm 60, man.

43:52 I'm still trying to learn to be political. Hey, you know what? I love it. Filters aren't always necessary. Rocky, I'm curious to come back around to the future. And you're a guy that sold now 13 companies. You're a guy that has an instinct for seeing an opportunity, an unmet need, an underserved market, whatever. When you look at this trend of restoration companies and construction companies extending out into these other service lines, what are some of the other lines of service that you're seeing, you're noticing, and that you see maybe as a future opportunity you're watching? I'm curious. Oh, on the restoration side? No, I just mean other, you know, either home services or commercial facility services.

44:36 Like where do you also see opportunity? Just spitballing. Well, man, you're asking some really good questions today because now that I'm on the board of a private equity company, I get a lot more information. And what I'm seeing, at least the private equity companies are moving to, is they want to own a customer. And what I mean by that is a homeowner is a great example. They want, if there's a hood vent or a dryer vent cleaning, if there's a duct cleaning, if there's a roof that needs to be done, if there's a plumbing issue, an HVAC issue, we're going to have a house. They want one brand overall, like an Eversmith, that takes care of it. Like every single one of Eversmith's brands are commercial heavy, like U.S. Lawns, for example.

45:21 So they're getting these pocket, including one Tom Plummer, because they want to go into a Coachman Wakefield and say, we can do everything for you. OK, we're a one stop shop. Here's the different brands we have. And it's no different. That seems to be the move. You know, you saw it with the plumbing, HVC and electrical companies. I mean, you see that on the side of vans now. I guarantee you three years from now, you're going to see roofing. You know, you're going to see siding. You're going to see all these other. So what they're trying to do, these private equity is they want to own a customer. If a customer needs anything, they call this number and they'll get somebody out. Handyman services. You're starting to see handyman services pop all over the place because they don't want to lose the customer to somebody else.

46:06 So you're going to start seeing it one-stop shopping hard on residential and commercial. Just anything along those lines. I saw them on the residential piece. They just bought a home inspection because not only they think that's where it starts. When you buy the home, you're going to get the home inspection company. And then once you're in, you're going to need this and this and this. Yeah, dry rot, age of the pipes, all that kind of stuff, right? Absolutely. Yep. And they have that information up front so they know exactly what you said to sell them on. You might want to look at your pipes. You might want to do this. Your roof is only five years from now. You're going to need your roof. They know when to go after these guys based on the home inspection.

46:46 Literally, they're buying home inspection companies so they can get the customer when they move in the house. And they literally are going to see when they need stuff. It's kind of genius if you think about it. Yeah, it is. The question for me becomes, nobody knows who Eversmith is. Mr. and Mrs. Jones don't know who Eversmith is. And so it's like, you have all these disparate companies that are covering all of these needs of a homeowner. I really wonder in my mind, at what point do you have an FP restoration, for example, rebrand as FP home services? Right. Like at what point do some of these brands start to sort of coalesce into a single brand that owns that homeowner relationship?

47:27 And so the homeowner thinks, oh, something broke? Well, call Eversmith, right? Because they do everything basically for homes. I don't know if you have a thought on that or a reaction to that, but... No, absolutely. And I'm not sure I'm not smart enough and I don't have enough information to tell you how they're going to do it. But I do have enough information to tell you that it is going to happen. And maybe that's where the AI piece comes in. No, I don't know. But I can tell you that they're making heavy investments, heavy, heavy investments into AI and figuring it out how to best use AI and to be on the cutting edge as the new technology comes out. They want to be. on the cutting edge because they're seeing it as the future. And it's a lot of what we talk about.

48:08 I've only been to one board meeting so far, but it's definitely half the conversation on how we maximize, how we get in front of it, how we beat the competition to it, the AI piece. And that's for a commercial brand. That's not even the homeowner piece. But I would think that somehow, some way they're going to incorporate AI into owning the customer. And it could be as simple as what we said, like five years from now, they're going to meet every roof. So you start beating them over the head with phone calls and emails at year four, you know, like, hey, you know, do you want us to come out and inspect your roof? I'm not sure. I don't know. But I can tell you that four or five years from now, AI will easily be able to do those things. Oh, no question.

48:49 Yeah. Yeah. Are you guys doing much with SMS, text message marketing? Is this a thing within your brands and a trend that you guys are seeing that's effective? Yeah. Yes. But we're not doing a ton of it because, again, we're commercial. And commercial people don't put up with it as much. Oh, sure. You know what I mean? Yeah. It can alienate commercial. People more so than residential. Residential, it's just part of your everyday, you know, and you're just numb to it. So I think that the residential side, because like I said, Riverside owns multiple pockets of brands. Eversmith is just one of them and we're more commercial centric. I can tell you, I don't know about Riverside specifically, but... Definitely the residential piece is 100% moving to that more so than emails.

49:32 You know, it's people just aren't spending as much time on emails because they're just being overloaded with pressure to buy stuff. Yeah. In our market, I've been, I shouldn't say bombarded anymore. probably on a schedule of once a week, there's a particular company that is like a handyman company where I get a text message saying, hey, we're in your area, Chris. Would be happy to come by and give you a quote for bathroom remodel, new siding, painting, any painting projects you have, carpet. It's like throwing the gauntlet at me in terms of home services. And about every 10 days, sometimes a little more frequently, I'm getting a text message from this company with that messaging. I thought, huh, it's interactive. Here's one thing that I've seen that it's moving to.

50:15 Don't want to give away too much, but if you go to Home Depot now, it's not just that they'll sell you something because you went to Home Depot. They can literally track you to if you are looking at lighting. They know that you went into that Home Depot and looked at lighting. I don't know if it's. geo or it's through cameras or whatever i went into dicks the other day and opened up some coolers and looked at coolers never said cooler on my phone at all and literally from the time i drove home till i got home i had one or two cooler ads on my phone from social media because they knew that i was in the cooler aisle at dicks You know, I always thought it was because I would tell my wife, hey, we need a new cooler, you know, but I never spoke it.

50:57 Yeah. Just like while I was there getting some golf shorts, I walked over to look at coolers. Yeah. So that's a great thing. If you're a company, you can take advantage of that big time, you know, because it's about information. I mean, that's the one thing Google has always understood. Information is the most powerful commodity, most in-demand commodity there is. That's really freaking spooky to really think about. Like, okay, I mean, how could they have physically done that? So obviously there's something about the geofencing, but then it's like, well, how did they know you were looking at coolers? And that, you know what I mean? It's like really kind of boggles the mind on physically what has to be in place for that to be realistic.

51:37 Yeah. Yeah. And I know they can do it at water heaters because we just learned this on the plumbing side. Like if you go in and you're standing there looking at water heaters, we can send you water heater ads at one time. Yeah, it's great. We can set it up just a couple of clicks and start hitting you with four or five pieces of advertising and hope you didn't buy a water heater and you still need one. Yeah, I can see both sides of this as a consumer. Part of me is like, that's the exact kind of advertising I want. I don't want to be bombarded with shit that I don't care about, which is like yesteryear. It's like growing up, that was like 90% of the ads was just, hey, don't you need a new toothbrush? And it's like, no, I don't. Now it's like, I know I've got an issue with my water heater.

52:21 I don't mind so much being presented with ads about my water. Now, what is troublesome is how are they... You know, like, are they peering over my shoulder? But I think ultimately it does serve the client or the prospect that we're serving these ads that are just in time for a particular need or interest they have. Like, that's, I think it's a very interesting development, you know? And it's inexpensive. I know that it's like $8 a week, you know what I mean? To set that up. And I don't know how they do it either. I just know they can do it because, you know, and it's not just that, it's everything. Like I said, you can white it. Now, I don't know if they can get it down to, like, if you go in the toy section, like you were looking at the Tonka truck, but I guarantee you they can set it up to where you get some kind of discount for toys to go to the toy store at Walmart, you know?

53:06 And I can tell you that both sides of the aisle are coolers, and they know that... So they were tracking me in the cooler aisle. There's no question. Wow. What strange times we're living in. That's right. That's right. Yeti's quite hard. I got it. It was Yeti and whatever their main competitor is. I can't think it's like a freezer or something like that. Coming at you. There you go. Arctic. Probably Arctic. Arctic. That's it. Arctic. Yeah. I was getting... I got four or five, but it only lasted a couple of days and then it was gone. Yeah. Okay, dude. But it's guys out there. If you can take advantage of it and it makes the phone ring, do it. Yeah. Again, it goes back to what I originally said. It's about making the phone ring and creating a customer.

53:46 I've done this rotation several times now, Rocky, as you well know, in terms of my heightened interest in one Tom. It has ebbed and flowed a couple times just based on what's in front of me. But this kind of reignites this idea of being creative and finding those ways to create access to the client avatar that you want. And so, I mean, it's just, it's so interesting to see how some of these things can come together, especially in light of what's been happening with the industry over the last couple of years. But I want to honor and respect your time. I got two questions, kind of bring us to a close. And I got one, what is personally, okay, and I'll try to keep these tight. Personally, what is the one single challenge and or goal initiative that you're excited about pursuing still?

54:31 Yeah. And then two, business-wise, what is the most important thing you've learned during the PE transaction that if we didn't talk about it, we would do the audience a disservice? Yeah. The one thing, I'll do them in reverse. The one thing that I learned from the PE, and it is more of a validation than anything, I always say that good works down the street. I don't want good people to work for me. I want amazing people. I want the best people. I want rock stars working for me. It absolutely validated that the The fact that I'm not afraid to rotate out good and get great people and then pay them 20% more to where they literally have to take a pay cut.

55:11 If they left, that's how you build a business. It absolutely validates that. It's all about people and having the right people, you know, not settling for somebody who just shows up. Okay. So. Solid. Yeah. That absolutely validating. And the fact that they didn't want one day for me and Cameron, they basically wanted to hand us a check and go, okay, introduce us to everybody. Okay. It's people and getting the right people treated them great, but rock stars want to work with rock stars. Okay. And, you know, so that's the best thing that I can tell you that I learned from that is that we were doing a really good job of bringing in great people. No one's left. At either place, actually, Icon, which was over a year and a half ago.

55:54 Yeah. And when we sold that to private equity and at one time. So, yeah. Congrats. That's impressive. Yeah. It is, actually. And that's because we have great people in there. They value them once they get in and they understand that, yep, these are rock stars. We want to make sure that we keep them. Love it. Love it. Yeah. And take me back again. Sorry. I had the attention span. What was the first question? You definitely are one hell of a successful ADD guy. I know there was another question. I don't remember what the hell it was. Yeah, no, it's what is like the kind of the one endeavor challenge thing that's in front of you right now that you're super excited about? What color I'm going to paint my name, Jack.

56:38 I'm super excited about that. You know, it holds up to eight people. You know, I had an upgrade, you know, it's got its own bathroom. But truly, all joking aside, these two new companies, I think they're just going to make one Tom better. The fact that One Tom already has that foundation and we can just plug them in, bring over the One Tom customers. And then once that happens, we're going to use these new customers to bring in new customers for One Tom, you know, and make sure that everybody is like minded, make sure that everybody's helping each other, handing off the money. leads and those kinds of things. So I'm really excited. I think these are two great brands that are going to bring a lot to the table to help One Tom.

57:22 But more importantly, right now, One Tom's going to do the heavy lifting initially, but then there's going to be a transition to get these to bring in and add value to our One Tom franchises. Love it. Working the synergy. It's good. All right, my man. Well, shoot, dude. We appreciate you. It's always a fun conversation. We appreciate your time as usual, my friend. Yeah, right back at you, dude. I can't wait to see you guys out. Whenever we go anywhere, they always ask if you guys are coming. Our people love you guys. Outside of this, obviously you guys do a great job in training and bringing people more money and stuff like that. But anybody out there listening, find out where they're at. These are two of the most fun human beings, the best human beings in the world to just go hang with.

58:06 So make sure if you find out they're at a function, go up and introduce yourself. I appreciate that. Are you flying into Savannah? Are you coming to RIA, Rocky, or you got plans? I'm going to be out of the country or I would be there. I think RIA is probably the best restoration conference right now, unless you're part of a TPA and you have to go to the certain TPA one. I think RIA is like really every year getting better and better. So unfortunately I won't be there, but anybody out there listening, go, go to it. Yeah, I love it. Make sure you walk up to these two guys and say, Hey, let me buy you a beer. There we go. Yeah. There we go. Yeah. Who doesn't like a little beer at a conference? That's right. That's all I'm saying.

58:47 All right, Amigo. Well, thank you, sir. Be careful on your world travels. And of course, we always wish you the best. And we'll be paralleling you as you continue to build the businesses around you, my friend. Man, it's so good to talk to you guys. Be safe. You too, bro. See ya. All right, everybody. Hey, thanks for joining us for another episode of Head, Heart & Boots. And if you're enjoying the show, but you love this episode, please hit follow, formerly known as subscribe, write us a review, or share this episode with a friend. Share it on LinkedIn, share it via text, whatever. It all helps. Thanks for listening.