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-Have you ever wondered what the Thriver of the Month mentoring sessions look like? Well, Daniel McKenna here. And today, we are here with Clay Clark and the Thriver of the Month winners, AJ and Steve Hulsey. They own a window and glass service company specializing in window repair and installation.
In this training with the Hulsey's, Clay will go over topics like creating value for your business, managing time to grow your business, pricing your product or service, search engine optimization, and many others. Let's waste no more time and get into this mentoring session.
-You had e-mailed in this core question. And if I get these wrong, let me know here. But how do we move from working in our business to on our business? Also, how do we go from trying to just kind of get through each day to transition into being able to plan long-range plans to implement in the business? And how do we make a workable plan, mission statement, vision statement?
So I'm going to try to answer all of these in this first session. And so I'm going to use the board here to draw some stuff. And if you have any questions, let me know and we'll just work through it together. And the one thing is typically when I do business consulting, I work with the clients and I'll see them for one hour a week where we take kind of a time-out to do planning.
This is going to be an absolute fire hose, as Arthur Greeno put it, so just take as many notes as you can. But first we're going to draw here is we're going to draw this little triangle. And this triangle is not my own triangle. This system represents the system that's taught by Clayton Christensen. And Clayton Christiansen is a Harvard Business School professor who is known for really, really teaching the fundamentals of how to run a successful business.
If you went to Harvard Business School, this is what he'll teach you. So at the very foundation of your pyramid is this thing called values. And how many people work with your company at this point?
AJ HULSEY: Three.
-Three people, OK. And how long have you guys been in the business or in this industry?
STEVE HULSEY: I've been in the industry for over 30 years.
STEVE HULSEY: And the business started in November of 2011.
-OK, November of 2011. And what is the name of the company?
-Residential Window Service.
-Residential Windows Service.
-Without the S on the Window and the Service.
-There. Residential Window Service.
-There you go.
-So this company values. A lot of companies say when I get bigger, I'm going to document my values. We need to do that right away. Then on top of the values, we're going to have processes. Now, the processes are how we do it. This is how we do what we do.
Then the third thing is resources. Now at the top of Mount Awesome-- that's your triangle here-- Mount Awesome, OK. This is this one part that every entrepreneur likes to jump into. And we'll get to it today, but this is the part that like chaos will begin to occur if we don't have these in place.
So let me give you an example. Most entrepreneurs-- not you guys, but just me-- when I started my first DJing business, my first real bona fide company, we did entertainment for weddings. And I had this unbelievable passion. I had this massive passion. And I could just market and I could book a job.
I could be at a dinner party. I could book a wedding. I could be talking to someone at church. I never had a problem getting business. Perhaps, you had the same deal. You just kind of run into business and it happens.
But then when I would try-- once it got bigger, I would delegate it and then boom. And you're like, man, did we even make any profit on that wedding? And so it's this constant cycle of passion, boom, go, boom.
And this right here is called the failure cycle. And this is written about in the Harvard-- another Harvard book called "The Service Profit Chain." Great book for you to read. I recommend you have it at your business and just kind of refer to it when need be. "Service Profit Chain."
But what'll happen is, the failure cycle means this. You have basically poorly defined systems, poorly trained people working hard and then they fail, and you get frustrated, and they move on. Fail, frustrated, move on. We just ugh.
And so eventually, we do this thing where we say, forget it, I'm going to do it all myself and then we stay stuck at a small business. So my goal today is to help you guys build a business that can scale. And so our big goal today, our big goal of the whole thing is to build a system that is duplicable and scalable, meaning we can grow it over and over and over so you can achieve your goals. That's the whole thing.
So values for you guys. I'm going to go ahead and ask you guys to just write these down. And our program observer will jot them down here for you. What's one value that you guys have about the way you do business that's different from anybody else?
-Our customer service. We are highly motivated for customer satisfaction I would like to think that we provide 100% customer satisfaction, but I realize that in today's market that might not be a real--
-Now for you, and anybody else who might watch this, I highly recommend that you put your why on your mirror. This is an action item for you. You want to put this on the mirror in your bathroom. You want to put it on your car. You might want to just put, like, an auto wrap on the inside of your car, so you see it through the windshield and it's hard drive, but you can see it at all times. You want to put it everywhere, so this is your central driving force.
Most business owners I know, though, put other things in the middle of this center. So things I see-- don't put in the middle-- this right here, this is your why. Oh, Billy. OK this is your why. For anyone who wants to know who Billy is, Billy is the ambiguous thing I'm frustrated with at all times. OK so why, your why right here is $500,000, house, mortgage, parents, whatever.
Now your non-why-- this is not why, but I see a lot of business owners put this, and you have to remember this OK. This is not why you're starting a business. One, to create jobs. Who the freak cares if people have jobs if you don't have the money you need. You know what I mean. So, I see business owners all time like their business loses money every month but they're like, I just want to create jobs. I doubt that. The reason why you started a business is because you want to make some money, OK.
The other thing people do is they'll say, well, you know, I just want to make sure that everybody's happy. Well what if-- I see a lot of businesses where all the employees are happy except for them. So the employees don't want to wear the uniforms, the employees don't want to follow the systems, the employees don't want to make the sales calls. So you're why is not to create jobs. Your goal is not to make other people happy. Your goal is not to work 80 hours a week just because you feel this desire to work all the time and not get paid anything. Now, I personally love working all the time, that's my vacation. But at the same time, like you don't get a merit badge and get go to Heaven longer, or faster, or quicker just because you work all the time, right.
What are other reasons that are not why's-- you see people say well you know, it's my passion, my business is my passion. OK so I'll give you an example of-- this is not a why. I see somebody about five years ago, a person I know, who's been in the desert business. And what they did is they created a business they were passionate about. They were passionate about desserts. Well how long can you pay a mortgage using dessert items? I mean, if you didn't have any cash, I mean, how many mortgages can you pay using the passion of desert items? You know what I mean, so eventually you're like, frick, I need to make some money here.
Now it doesn't mean you're bad guy because you want to make some money, but you have to know how much your life costs. So specifically, this year, let's break it into a one year goal. So number one is make your big why. Action item number two is your one year goal. Would you want to make $100,000, year one?
-OK so let's put $100,000 down here. $100k, this is your why number two, OK. So $100,000. So how much money do you make roughly, profit, every time that you solve a problem. So right here you're solving the problem, right. The pain is, it's helping me save money, the gain is, you're making me more comfortable, right. How much money do you make, profit, every time you do a service?
-It varies because you can have either, like, just insulation installed, or you could have a furnace replacement. If you replace a furnace, you could make $5,000.
-Let's say option-- because remember I'm a third grader, going through life, just trying to not get hit by bus. OK so a, package a, the cheap package-- what's the least you could make on a deal, per customer?
-$2,000 is the minimum?
-So $2,000 is the minimum. And then what are you doing for $2,000, roughly?
-It would be just air sealing the house, yes.
-Air sealing valves. No one knows less about air sealing valves than me, but that's OK. Now b, how much can you make on that one?
-And what do you do for that?
-That would be air sealing plus blow-in cellulose, so blow-in insulation.
-Cellulose? I'm offended by that. OK how do you spell that? Is it c-e-l-l maybe--
-What does that mean? What does that do?
-Cellulose, that's in the recycled material that you feed into like the chopper--
---just you spray it.
-It sounds a little disturbing. OK now what's the next thing you do?
-It would be replace a furnace or water heater.
-How much profit do you make on that thing?
-Those you can make $4,500.
-OK so $4,500. I'm just going to put here because I want to make sure I'm accurate here. I'm going to put replace, technically speaking, stuff. OK so you have package a, b, and c. A, $2,000 b--
-Have you guys, in years past-- I know it's been 2011-- 2011 is when you guys started the business. But in your years in the industry, have you ever worked with somebody who you had different values than?
AUDIENCE: Oh, yeah.
-And it's hard to convince them to do anything. It mean-- good example, there's a builder that I got asked to do some consulting with years ago. And his name I shall not mention, and he was in Texas. That's all I can tell you. But he wanted to use the crappiest materials possible whenever someone wouldn't check.
So we're doing surveys of customers, and people found out there's no insulation at all in a certain part of their home. And he was like, well, you know, you've got to stick under budget. And he would just play these little games. Or he would tell somebody he would use granite, so he would use granite, but then he would come back and pull out of somewhere else to give them granite, instead of being-- and so everyone who worked for him had that kind of mentality. So he had lawsuits that were piling up, and you can't--
Now, another builder I work with right now, this guy has this mentality-- he's unbelievable. This guy has the mentality of like, we are going to offer standard with every home this, this, this, this, this. And we're going to treat you the way we want to be treated. And we have a warranty that we'll come out to your house within 24 hours any time you call, Monday through Friday, up to a year after you buy the house. Whatever. You know what I mean?
So, but I just want to make sure you have that. Can you think of any values that you have that are-- Let's say if we throw customer service out, not because it's not something we don't believe in, but what is something that you do that's just different, or weird, or unique, or something that would only relate to what you two do?
-We do free estimates within 24 hours of when they call.
-OK, so let's put that down. So I would say that's a deal. That's a free estimates within 24 hours of call. Now to me, that's probably-- if you try to expand it out one level, this is going to be-- are you guys closed on Sundays, or Saturdays, or what days are you--
-We are closed on Sundays, primarily. There have been Sundays where I've had to work, but--
-Yeah, and I get you. With my DJ service, I--
-Not to say that we're not at our shop on Sunday. Sometimes we are, but typically--
-Well if we expand it out, if we said Monday through Saturday 24 hour-- within 24 hour response. Maybe that's a value we offer. I mean, that's something we do.
And then we say-- what's another one? You say 100% satisfaction. I mean, I know it seems crazy, but there is companies to do that. QuickTrip does that. Where they say, if you have a problem with your gasoline, it caused an engine problem, you can bring proof of that, and we'll take care of it for you.
Other companies, like Walmart, has been really weird about that. You can buy a pair of shoes at Walmart, and bring them back a year later, and a lot of times, they'll take them back. So they have that return policy.
Now I know in your business, that would just kill you if someone did that. But could you have 100% satisfaction? Could you do that? Like you don't have to pay us the final payment, until you sign off on it being approved?
-We do that automatically.
-You do that already?
-Yes, we automatically do that.
-So let's put that in here. So that's another value. OK? Now all you're wanting to do is your values as your homework. OK? You need to have 10 values on one sheet of paper, 8 and 1/2 by 11. That's the biggest it can be, OK? And the reason why is because we have 4,000 values written in a big book, no one will read them.
Now when I come to work for you, though, you're going to say, Clay, you want to come work for me? I need you to read our values, sign off on them. I need you to explain to me what they are. And you use that as a compass.
So when you have those weird situations, like, well do we owe this guy a commission or not? Or should we refund the customer or not? It needs to be a value that everyone in the company gets. Make sense?
Now the second part is processes. Almost no small businesses I've ever worked with, when they first hire me, have any processes at all. So as an example, if you're a medical doctor-- I do a lot of work with doctors-- every doctor is required, by law, to follow certain processes.
So let's see an example, let's say I wanted to have a-- Let's say one of you guys needed to have some kind of spinal surgery. By law, I have to do step one, step two, step three, tell you're insurance, do this, do-- there's all these laws. But yet, when it comes to marketing the spinal surgery business, most doctors would have no processes at all. So they have a ton of systems for billing, and for-- but nothing for marketing.
You want to have a process for every aspect of your business. OK? A process. So let me just give you one example, kind of a fly out example you can take home with you, OK? So here's one. Here's a process.
Let's say that every job that you have-- so this is going to be-- we'll call this a job process. Maybe you want to have the customer signature, and you want to put the time for every job. So when I arrive at the job I work for you, I show up at the job site, I have to get the customer signature and I have to have the customer write the time that I showed up. Why? Because contractors have a horrible reputation for not showing up.
So maybe that's something you do that's a process. Now another process is maybe when you leave the job site, you have to have a photo of the job site when you leave and the customer's signature again. I'm not saying you do, but that's just an example of one. It's a process. You see what I mean?
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