Business | Learn How Clay Clark Helped to Grow SnowBearAir.com By 30% In Under 9 Months By Implementing Turn-Key Branding, Marketing, Sales, Service, Accounting, Human Resource, Workflow and Accounting Systems

My name is Mickey Mahalick and I own Capital Waste Solutions. Jumping out on my own was my biggest fear. I really love that corporate safety net of a consistent paycheck, knowing that we had the corporate background structure to stay there, the standard operating procedures. Everything had a book and a policy of how things had to be done. Unfortunately, that puts you in a box sometimes, and Clay helped me to release that and understand that, “Hey, go, take off, explore, find new areas.” It was really the confidence to jump outside the box.

Anytime you start something new or you have to reach out, I feel it brings a level of exposure by admitting, “Maybe I don’t know as much as I put off about sales or marketing.” When Clay came to speak with me, he said, “It’s okay to not know everything.” That really was a game changer for me.

Clay’s helped me probably the most with our graphic design on our website. That’s one thing that I do not claim to know anything about. In fact, I’m better off throwing the computer out the window than I am using it. What was nice about working with the guys at Thrive15 and working with Clay was, I could go in with a silly sketch on paper, pencil and paper, and I could say, “Hey, this is what I want to look like.” Or they’d make it so simple. They’d pull up my phone and say, “Hey, FaceTime with me real quick and point to what you don’t like.” They worked on my level instead of me having to meet them at their level. Not only that, but the upbeat atmosphere is fun. You come in and it’s all about you. It’s nice to be the one that gets to drink from the fountain instead of constantly pouring into someone else.

Why not learn something new? Why not admit to yourself that, “Hey, I can learn more. I can be better. I can be greater.” As a basketball player in college, I was nothing without the coaches that invested in me day after day after day, to help me work on a move or a play that I maybe I wasn’t the best at and that fueled me to be successful in our game. It’s those little battles that win the war, and when you have Clay Clark, it’s a coach, it’s a general that helps you through the battle so ultimately you win that war.

I know it’s exciting listening to a podcast where somebody is calling other people, but this is how it happens. This is how we go to do that phone technology, and we’ll know if he’s ghosting us if he doesn’t pick up.

No pressure at all. It’s just Stephen.

Here we go.

We’ll count the number of rings as it goes along. I say three. I’m going to put my money on three.

How’s it doing?

Good, man. How are you?

Doing good.

Hey.

Not bad at all.

Hey. Are the guys learning stuff down there in Amarillo?

Yes. They learned a lot. They learned a lot. It was a lot of fun having those guys. They’re a bunch of good guys.

I think we had-

I can see why you made Ben a manager over there.

Yeah, Ben-

He’s smart.

For the listeners out there that don’t know, we’re in the process of opening up a Snowbear Heat and Air in Tulsa, Oklahoma. I say we, John and I. I’m putting up 49% of the cash, John’s putting up 51% of the cash, so it’s his problem. The guys went down to Amarillo. We had Ben down there, Jonathan and Ty, I believe, right?

Yes.

You’re teaching him the dark arts of HVAC and we have a listener here today, here, Daniel. His name is James. James meet Daniel.

Hey, Daniel. How you doing?

Doing pretty good, James. How are you doing, sir?

Doing well. Doing well.

Now, James is a guy who has a business that’s doing well. James, can you explain what you do for a living and what your business does?

Yes. We’re electrical contractors, electricians to just put it simply. We provide electrical services for residential and commercial and soon we’ll be doing some industrial work as well.

Got it. You have a few questions here for Daniel. I’m going to let you ask Daniel any questions you have about, I believe we have a lot of questions focused on commercial work and invoicing and these kinds of things. You can ask Daniel any questions you want because he has become the master of working on commercial projects.

More so questions in the realm of the estimating on commercial projects that, as you well may know, the estimating on residential product projects is relatively simple but can get pretty complicated when you get into the commercial projects. How do you handle your commercial bids?

Well, the best practice for making a switch from residential to commercial is basically preparing to charge the customer 15 to 20% more than what you would charge for a residential job because the liability on it is a lot higher.

Higher risk.

Yeah, so you need to beef up your insurance and prepare to stay at those jobs a lot longer. The way I do it, I’ll tell you a little bit, the way I’ve kind of priced the commercial stuff was think of every possible job you could think of, put it on paper. Next, think of everything that would go into that one job from man-hours, material, office staff hours, and don’t forget to calculate your taxes in there. My CPA and myself, we put together a formula where we just plug stuff into an Excel spreadsheet. We went through each one of these jobs and that way we get a true net profit on each job. After you’ve done that, you put everything on paper, you put it in a price book. That way you’re not constantly thinking, “How much do I need to charge for this job?” You can just flip to it.

What we’re using now for, instead of a price book, we have a program called Field Edge. It’s a software and that helps the office staff stay on schedule. It has every job possible in that software. If one of the technicians is looking for a job, they just put in the keyword, condenser fan motor. In your case, it’d be like a plug or something or a switch or a breaker box and it pulls up the price for that breaker box so we’re never losing money. We’re making sure we’re getting about 35% net profit, a true net profit.

Right. That was going to be my next question. What is your range that you shoot for in terms of overall profit in the job? What’s the percentage on that?

You’re saying you like to go for what percentage of profit there, Daniel? Just so all the listeners can understand.

Residential, I like aiming for about 30 to 35% net profit.

Yep.

Like I said, on commercial, you want to charge 15 to 20% more because there’s a lot of things that can go wrong on a commercial job. We’re looking at 45, 55% net profit after on a commercial job.

Let me ask you this, I don’t know if you run into this doing HVAC, but dealing with a lot of these general contractors, you’ll have some kind of a change here or there. How do you deal with the change orders? A lot of these general contractors like to slip something in the last second. They like to say, “Oh hey, you know what, I need this over here too. Can we go ahead and do that?” How do you deal with that?

Well, again, that’s where our software comes in, comes into play. On that software, the customer has to sign off on everything that he’s agreed to pay for. He hasn’t signed off on it and told us it’s okay, we’ll have to get him to sign again. We’ll have to write him up another bid and get him to sign off on it again.

Right. Basically like a change order.

After he signs off on it, he has to pay for it.

Right, right. Yeah, I figured that. Dealing with general contractors, I’ve learned you’ve got to be super detailed with everything that’s involved in the job scope because I think general contractors, even just regular customers, will see what they can get added in after you’ve already done everything that you guys originally agreed to. But I was just curious to know how you kind of dealt with that. I mean, it sounds like we’re on the same page.

I put all the wordage and verbiage that went into that document where the customer actually signs to agree, of course to do the work. I sent that to the lawyer, which is Scott, and he signed off on it, said, “Yeah, that looks good. Go ahead and load that into your Field Edge software that way everything’s legal.” They can’t come back later on and say, “Well, you said we could, you were supposed to do this and you didn’t do it.” Hey, you signed off on it, and as soon as they sign off on it sends them an email right away.

Daniel, I want to make sure I’m breaking this down for the listeners so they get it. Dr. Breck, I want to get your take on this too.

Sure.

But what happens is, and then the name of your company, it’s ECS Electric, am I correct?

ECS Electric, yes.

What’s what’s your website?

It’s ecselectricllc.com.

How long have you been in business?

Since the beginning of 2018, January, 2018.

Are you growing?

Yes, exponentially.

Awesome. How much have you grown this year, as a percentage?

We did about 300% from, let’s see, the end of 2018, 2018 to 2019.

Okay. How long have you been been a client with us?

Not even a year yet.

Yeah. I want to make sure the listeners get this, because this is important. Breck, I want to get your take on this. We got so much wisdom here. I want to see if we can distill it all. One, is you right now. If you’re listening today, you’ve got to get serious about your pricing. Okay. Right away, let’s go ahead and do what Daniel said to do. Let’s sit down with our accountant this week, action item, and let’s properly price out stuff. Breck, for years, you wandered in the wilderness of very busy and unprofitable, as a chiropractor.

Mm-hmm. Yeah, absolutely.

Can you preach the good news to somebody out there who just won’t sit down and figure out their pricing?

Well, that was actually one of the first things I did with my coach, was to sit down and figure out where are we at in the market and what can be done differently than what we’ve currently been doing or historically doing. Our pricing was definitely something that was brought up. It stood out as a red flag pretty much immediately. He challenged me to call all of our competitors or a number of our competitors and figure out where really is the price point in the area because he knew that I wanted to still be economical and affordable and that I didn’t want to price myself out of reach for our patients. But at the same time, he felt like I was clearly leaving money on the table and he wasn’t wrong. We did that and it was time to make a change in our price structure. That happened two years ago now. There’s a little pushback on that. Anytime you make change, there’s going to be a little bit of pushback but overall.

About 10 or 15% of the because customers aren’t happy with it, maybe?

I don’t even think it was that high, honestly.

Okay.

There’s different things. Some of the things we did were, we had some different giveaways that we were doing on a routine basis.

Yep.

I would say the patients were more upset of how we changed the giveaway structure. There’s a certain entitlement.

Yep.

Once you’ve done something, there’s an expectation you’ll continue to do it that same way. That was inherited from a former partner.

Yeah.

I looked at that and said, “Okay, this isn’t really sustainable moving forward. We’ll just adjust it a little bit.”

Right.

That small adjustment actually made a bigger issue for the patients. That was where we give away a massage after so many visits.

Yeah.

That went from every fifth visit to every seventh visit. That little switch definitely ruffled more feathers than increasing the pricing.

Step one though, step one, we’ve got to meet with our accountant or our bookkeeper. Let’s go over the pricing. Daniel, what profit margin do you recommend, if you’re in the air conditioning business, what profit percentage would you recommend if you’re dealing with residential clients?

Residential clients, we’re looking for a 30 to 35% profit margin net profit.

Got it. Then step two, use the software, a software, I would recommend Field Edge, that’s what Daniel uses, or use Excel. I don’t care, but have your standardized pricing written down somewhere. What I would do, Mr. Cruise Missile, is I would always refer to a partner who is rigid about pricing. As an example, if I’m meeting with a customer and they go, “Man, you’re a lot more than you were last year.” And you go, “Well, I have a partner now I work with and he sets all the prices, and so I don’t have the ability to do that, but this is what…” Daniel, I want to get your take on that. Why do you have to be firm on those prices? Once you log those prices and you put them into your software, why do you got to be firm about those prices?

You want to be firm about the prices because we’re in it to make money. We’re not in it to lose money. I don’t give the technicians that work for me any authority to change the prices. They can’t go into the software and adjust those prices. The only people that can adjust those prices would be my office manager.

There it is. What happens is that the customer always wants to pay less money and the employees always want a pay raise.

Always.

Every employee wants to make more money and every customer wants to pay less. If you compromise on either side, pretty soon you’re not profitable. Now step three that Daniel just mentioned, he said you need to charge 15% more for commercial jobs. Daniel, please explain again in detail why you have to charge 15% more for commercial jobs and the potential liability that’s there.

Well, the liability on that is a lot bigger than it would be on the residential house. If you’re working on a residential house, one of our technicians may step through the roof and that will just cost me about $150. We’re working on a commercial job currently, and if the crane operator drops that air conditioner through the roof of that commercial building, that’s going to cost me thousands of dollars. Liability is a lot higher. You have to take into account if something does go wrong, you have to charge at 15 to 20% more just in case something does go wrong.

This is Nathan with Complete Carpet. We’ve got great business owners here. I want to throw one other little caveat in there for the people that are listening to this. Remember that it starts also with the value and the good quality work that you’re doing first. In the absence of value, price is the only thing that matters. If you are looking at bumping your price up a little bit.

Oh yeah.

Start off by making more value and more quality, and then when you bump your price up, your customers won’t notice that much. We bumped our prices up just like Dr. Breck did, and that helped us tremendously. I thought, oh, we will just… A bunch of customers run off. We lost almost nobody because everyone said, “Well, we’re not going to use anyone else and…”

Yeah.

“You’re still affordable.” We just became profitable.

Right.

It’s just really, really, really important that everybody out there understands, we’ve got to learn to price properly. We have this poverty mentality where we’re busy, but we’re not profitable. That’s a dangerous place where you can get stuck in.

Well, and then you talk about scalability and plans for the future. All of these different things, if your prices aren’t what they should be or they’re constantly adjusting, then those numbers are an elusive thing. They’re always moving. The target’s never the same. You can’t plan for next year when you don’t… The price was $45 a day and it might be 50 tomorrow. Like Daniel’s saying, I mean there’s a clear this box cost X and this is that.

Yeah.

Then you have the numbers to back up and actually project and know what is going on, what’s happening. I know exactly if I want to make a certain amount of money, I have to see a certain number of patients…

There it is.

Because we make so much per patient with the adjustment and we can factor that in and we can adjust and I can know, is it time to hire somebody? Can I afford to hire somebody? At what rate and at what position? We can make solid decisions without really wondering or being scared of it.

And if you’re thinking about dropping a commercial AC unit through the roof of a commercial building, this is just in, don’t do that. Now another question that the cruise missile has here is, how does schedule the extra time needed to tackle bigger commercial jobs?

That is a good question.

Can you maybe dive into that question?

Yeah, absolutely.

What you want to ask Daniel here? You can dive into that, what you wanted to ask Daniel?

Yeah. Obviously the commercial bids for me, they’re taking four times, five times the amount of time a residential bid would take. Obviously that has something to do with familiarity, but also just the complexity of them, at least in the electrical industry. What do you do to get through those commercial bids quicker and how do you make time for that?

We do use that software called Field Edge. That helps office staff stay on schedule along with all the technicians and helpers. In that software there is, every job is priced, so they can go through a commercial project and bid an air conditioner. That commercial air conditioner is priced in that software so all they have to do is check and see the size of the unit and then they can correspond that to Field Edge. Field Edge will pop up the price right away and we’ll know exactly how much time it’s going to take to do that, replace that commercial unit.

Right, because you can refer back to maybe some of your past projects too, and also kind of gauge off of that.

How much is Field Edge per month? Isn’t it like a thousand bucks a month?

It’s only $250 a month and then it’s $50 per device. Each technician has an iPad that they carry around with them. When all that software is loaded on there, they can take payments, they could send out quotes right away.

Yep.

All their jobs are on there. There’s so much it can do. It tracks them.

For all the listeners out there, if you are an electrician, a contractor of any kind, air conditioning, I recommend that you check out the Field Edge software because it’s going to take you probably, cruise, probably 20 hours to load in all the variables and it’s going to ask you for the price of this and that. You’re just sitting there putting data in it, but once you have it, I mean, Daniel, wouldn’t you say even on the most complex commercial jobs now, it maybe takes 10 minutes of clicking around to get a quote?

Yes, and I usually schedule about one hour per quote so they’re in and out quick.

Yeah.

I do have another question.

Less an hour most the times.

Daniel, I have another question. Kind of getting into residential, it’s pretty easy to secret shop and figure out what your competitors are pricing and whatnot. I’ve done it. We install generators. I’ve had other electrical companies come out and bid for generator install at a home and that’s easy. I can get somebody to do that. But when it comes to the commercial side of it, how do you price against your competitors? How do you know what the market is on these certain items or these different jobs? Have you been able to do any secret shopping? What would you say about that?

Yes, and that’s one thing we do just about once every year. This year we had, I have a lady technician and she called about 15 companies. Out of those 15 companies, maybe three or four actually showed up or even returned to her call and went and gave her a quote on the air conditioning unit. I kind of priced it off of the local contractors here. I’m still at my profit margins, 30, 35% for residential. We do the secret shopping.

Well, I’m talking more on a commercial level. Are you able to do any secret shopping to see what those other contractors are doing on a commercial side?

That I actually have not done. I just put my profit margins where they need to be and if the customer doesn’t want to go with it…

Let me…

We move on to the next job. I don’t need them.

Let me make sure the listeners get what he’s saying. What he did is he has definitely mystery shopped on the residential side.

Oh yeah.

Then no matter what, then he just takes his profit margin for residential and bumps it up by 15%. I can tell you that that is pretty much what most commercial people do. Now I can tell you what I’ve done for commercial stuff. If you want to go that level, I’ve done this. When I had DJ connection, I was trying to get into more commercial, doing Christmas parties for Southwest Airlines or Bama Pie or Boeing or whatever.

Big corporate events.

Big corporate events where instead of doing just private weddings. I actually would go as far as to book them. I would actually hire big entertainment companies to provide entertainment for my staff or for just random people. I would call a client who I knew who had a business and say, “Hey, you go book the other guys and I’ll pay for it. I just want to see how does that process work? How do they bid you? How do they quote you?” I was able to just get all the information that way. I’ve paid for many, many Christmas parties for people who are friends of mine in order to get them to use my competition to find that out. That’s one way to do.

It’s one way to do it. Yeah.

I got a super dirty move.

Oh, really?

We’ve used quite a few times. If you are doing the bid process or you’re going through it.

Yeah.

If you make a good relationship with the person that you’re going through, I have at least a dozen plus times, it’s how I end up getting the Tulsa Housing Authority contract, and a couple others. The person I was with, I said, “Hey, I want to do the best job for you. I want to do… What’s some of the other bids you’ve gotten here?” They’ll say, “Oh yeah. The guy who was just before you da da da company, they said that they could do the whole project for around this. These are the numbers.”

I’ve had them give me their actual quotes. I’ve had them forward emails.

Actually get the other. Yep. I’ve had that happen that.

Oh yeah.

I say, “Hey, I want to provide. I would love to come in and be your guy, so I’m going to see if I’m in the ballpark or maybe I can beat your guy.” They’re like, “Oh yeah, I’ll show you what it is. Can you beat this?” And I see their numbers completely.

Now, Daniel, I know you’ve got church here, so I’ve got you for 90 more seconds here. I got two final hot questions for you. Commercial contracting.

Okay.

What should your team consist of? Do you have a job site manager, a foreman, a journeyman? Talk about, I know know commercial HVAC is different from electrical, but there’s a lot of parallels and similarities. What should a commercial contracting team consist of?

A commercial contracting team, we have a lead technician, a technician, and normally two helpers. We’ll have about four people on the job at all times. Some of those units get pretty big to move around. As the guys, Ben and John and Ty, they kind of saw how big these units were. Some of them are just as big, about as big as a small house. Yeah, they’re huge.

Oh boy. You have to buy some insurance there.

Do you deal with these cooling towers?

You said-

That one was not a cooling tower, but they were package units actually.

Oh Wow.

Wow. You’re suggesting, or you’re saying that your team consists of a lead technician, then a technician and two helpers, is that right?

Yes.

I will say we have a great show we did where we interviewed the founder of one of the most successful pool companies in Oklahoma, called Pool Creations. We interviewed Jeff, and in that show, Jason could give it to you because it hasn’t come out yet. He explains how he does his jobs, but essentially the lead technician shows up on the job site every single day and makes sure that when people leave the job site, it’s clean, it’s complete, it’s finished. It’s just kind of having that person that goes onto the job site every day and actually physically shows up, keeps them from drifting. That’s the top pool company in Oklahoma. The final question was, should there be a separate role for commercial and residential jobs? Cruise missile, what do you mean by that? What does this question mean? I want to make sure we’re a asking Daniel the right question.

I’m not quite sure actually. I don’t know if I phrased it that way.

Oh, maybe I am mangling your questions. I’m a bad host.

Yeah.

Did you have any final question for Daniel while we have them here?

No, I think he’s covered it pretty much. My main questions were on the estimating side of it.

Got it.

Yeah.

Daniel, I’ve got my final question then I’ll let you take off here. You’ve grown Snowbear Heat and Air quite a bit this year. How much have you grown Snowbear Heat and Air over the past 12 months?

Over the past 12 months? This year we made about 350,000 more than we made last year.

Ooh.

We’re at 1 million, almost 1.2 million.

Up from 900,000 ish. Maybe 850.

Yes.

youu’ve been a client working with Andrew and myself now for how long?

It’s been about nine months, 10 months.

Why do you actually implement everything? What is wrong with you? Why do you implement everything? Because Pastor Brian told me, he said, “Here’s the deal. If you work with Daniel, I’m telling you he’s a diligent guy. He’s going to execute everything,” and because I met you through when I spoke at his church. That’s how we met.

Right, right.

What makes you an implementer? Why are you not just a hero of the words? Why do you actually implement?

Well, I would describe my weekly coaching meetings with you and Andrew as very productive from going over all the action items, looking at all the numbers, figuring out ways we can grow. Some of the things that you guys have actually helped me figure out, which I had no idea about, would be the systems on how to hire people was huge on doing the group interviews…

Yeah.

And firing people, not keeping them around longer than they need to be, so hire fast, fire fast, and how Google works. I had no idea before I started working with you guys how Google and how that helped you to generate leads and you guys building our website for us. That was huge.

Well, you are a diligent doer, and I’m not sure what’s wrong with you, but I wish that more people had that same problem. I think a lot of people, they hire a coach or a consultant and they want to know what to do and you tell them, “Hey, you need to do the group interview.” Then they go, “Okay, I’m not going to do that though.” I call that an ask hole and ask hole. It’s somebody who wants to know what to do and they’re like a hole of knowledge, you tell them what to do, they keep asking, all the knowledge goes down a hole and then they do the opposite of what you told them because of their pride, because of what their spouse is telling them, because of whatever they’ve been, whatever blog they’ve been reading or whatever TED Talks.

Could be brain damage.

I’m serious though, and it’s a tough thing when you have somebody who won’t implement, and I can tell you Andrew has loved working with you. I do too, and I’m so excited to be partnering with you to open up Snowbear Heat and Air in Tulsa, Oklahoma. I know you’ve got a head off the church and I really do appreciate your time and you’re just, you’re a great American. Thank you so much.

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