Hardy Farrow: Perfection. The enemy of good, like I feel like a lot of building a business is failing and you have to be really curious about like why you're failing. I think getting from zero to one, you just gotta be really gritty and just have almost no social qualms about just like literally doing whatever you gotta do, get the company to one. It really just comes down to sales. If you can sell things and you can market things, everything else will take care of itself. I feel like entrepreneurship is like taking onion and you're just unpeeling it constantly and you're like, I think I got to the core. Then you realize actually there's eight more layers to this.

Austin Gray: Hey, welcome back to another episode of The Owner House podcast. I'm your host, Austin Gray. In this episode, I have Hardy Farrow from the Long Acre Company. Hardy bought this business. They offer multiple services and plumbing, HVAC and even bathroom remodel. So we got deep into the weeds on how he thinks about going and hiring and recruiting great talent for home service businesses.

We also kind of got into marketing and Facebook ad strategy at the end, so stick around. Had a lot of fun getting to know Hardy on this one. Uh, he is a great operator with a very, very detailed approach, so I'm excited for you guys to listen to it. We've been having a lot of fun with this school group. So if you are a listener, we have a free school group. If you are working on building a local service based business, you can check that out@school.com. That's skool.com/ownrops. skool.com/ownrops. Without further ado, let's jump into the episode. 

Hardy Farrow: The same, you have to adapt it for what you're doing? No. Through the recruiting, the data, stuff like that. The financials, I don't know. I just like the grind. I don't know how to explain it to people. Sometimes you either love it or you don't. Right. You've had a couple exits under your belt at this point. Why do you keep coming back? I think about my life in 10 year challenges or five to 10 year challenges, and I don't know.

I feel like it's really fascinating to like take something from like it's infancy or toddler stage, like teenager kinda adult stage, and what are all the systems you have to build? What are all the processes, like? How do you unpack the customer base? Yeah. I don't know. Like I, I guess I just like the idea of just thinking through like how do you put all these chess pieces on board and then move them over a couple years span and I don't know. I find that more interesting when navigating corporate bureaucracy. You're trying to play the game to get promoted somewhere. I don't know. It just, it seems a little bold of me to do that. 

Austin Gray: That's something I think about a lot because, well actually I don't think about it a ton, but it does cross my mind consistently, I think is a better way to say it. There will be these times where you do this consistently and there will be the times where you feel like you're just literally grabbing the boulder at the bottom of the hill and starting to push and you're like, it really would be so much easier just to go the corporate route.

Hardy Farrow: Do the eight to four W2 thing when like you're done at the end of the day. And I feel like even at Sunday, at 10 30 at night, I'm like, my mind is just thinking about things, even if I'm not like actively working, I'm just like, okay, what are we about to do this week? Let me think through it. And I just never stops and I acting like that. 

Austin Gray: I do, but it is hard to explain it sometimes my wife will be like, where's your head at right now? And at this point I'm just like, where do you think my head. 

Hardy Farrow: I'm always growing. 

Austin Gray: Yeah. Do you have a family now?

‍Austin Gray: I recently got back from launching a land clearing business down in Austin and this last winter I launched a snow shoveling business alongside Bear Claw. And in both businesses I've implemented jobber as a way for us to efficiently manage quoting, job schedules, and invoicing and even collecting online payment. Why? Because it's worked so well for us in Bearclaw and it's saved us a ton of time and headache. So if you are looking for a software that can help you manage the backend of your business, look no further than Jobber, you can visit go.getjobber.com/ownrops O-W-N-R-O-P-S. 

Hardy Farrow: I've got a fiance and a little dog but, I would say that is like one of the most undertalked about things. I feel like on all these podcasts and different things I read on Twitter and stuff is like picking the right life partner for like your entrepreneurial journey is, I would say like one of the top three things you have to go through and like I just learned so much through my different businesses of the different people I dated along the way and who wasn't probably like the right life partner for me as I was going through my entrepreneurial journey. 'cause you have to have somebody who's like super independent and like a shirt, like very confident in themselves. 'cause you're just working constantly and they have to be like your emotional champion in a way when no one else believes in you. I don't know, I just think it's interesting how these things happen. 

Austin Gray: It is super interesting and I'm bound to go down that route. Like we just had our second kid, she's four weeks old as of yesterday. And congrats. My wife is just crushing it as a mom and I tell her every day, I'm like, everything that you're handling right now is amazing. And it truly is because you know, I goes when you're building a company like your head never pulls out of it. Of course I love those little girls and my wife to the ends of the earth and back. But from a work perspective, it's okay. We had a kid, I don't, maternity paternity, it does not exist. Doesn't exist, right. Leave the business. Yeah. Working in the hospital after like those hours that we got. Where it was down. Like my laptop was there and I'm consistently just thinking about it and I enjoy it and I love it that way. Right. But it never stops. 

Hardy Farrow: No, it doesn't. And yeah, I feel there was some story I heard of Marissa Meyer when she took over Yahoo and she was about to have a baby and then she had the baby, I think within a week. She had set up a crib in her office and was like bringing the baby in while she was running Yahoo basically. And it's just like in a place like Google or something, you would've been out for nine months if you were working at the large company and year was the CEO. Just, I'm gonna bring the baby do at the same time.

Austin Gray: Yeah. I have a friend who worked for when it was Twitter and he's, yeah, gotta get nine months. Oh, I'm like, you kidding me? That's, that's a insane time. 

Hardy Farrow:I would go crazy after like a couple weeks. 

Austin Gray: What would you, what do you have to quit your time at nine months? 

Hardy Farrow: Right. 

Austin Gray: So anyways. Yeah, it's either a blessing or a curse. I love it. I wouldn't have it any other way. Sounds like you're the same? 

Hardy Farrow: Yeah. Yeah, I, I agree. I think I, I don't think I'm like the person who's, I wanna retire by like a certain age. I think I'll just be perpetually working on something forever until I just can't, 'cause I just like doing it. 

Austin Gray: I'm curious to hear, like after your first, let's take like your last exit before jumping into Home Services, did you take any prolonged time off or did like, how long did it take you to jump back into the next project?

Hardy Farrow: So I went to work for, so after I sold it, I went to work for like another tech startup. So I probably took a month and a half off. And then I worked at that tech startup for, I think it was around six months. And then they did like massive layoffs basically. And within five days I jumped into the S&B search looking for a business to buy. And I had been like part-time thinking about it and looking, but not seriously looking. I was like, maybe this is like a sign of destiny. A third of the company gets laid off. I'm one of them. I should just go full-time in the searching for a business. And that's what I did. I don't know, I never really. Do these long, prolonged absences. I'm always like, okay, what's the next project? What's the next project? And I just get intellectually bored if I'm just like sitting around and not really doing anything. I would say. 

Austin Gray: Something you said early on whenever we jumped on here is every business senate is basically either the same or just similar. You have to just figure out how to build the teams, how to recruit, how to build the systems. Like how do you think about building a business, like when you come in it's like no matter what the industry building blocks. Yeah. What are the building blocks?

Hardy Farrow: I would say like the biggest thing is like who are the right types of people for the stage of the company you're at? And like the biggest things I look for are people who have an inherent drive and like a motor. Like you can't teach motor to people no matter how much you try. Either they're gonna have this constant desire to succeed or they're gonna be just like checking boxes. That's one. I look for people who are really intellectually curious, like I feel like a lot of building a business is failing.

And you have to be really curious about like why you're failing. And if you're not, then you can struggle to troubleshoot through like how to grow a division or like how to grow a team with underneath you. And I think that's where when I've mishired in the past it's been people who are more cookie cutter, like plug and play type people and then when they've ran into obstacles, they couldn't really get around it. And then I would say like the biggest thing that I've learned from the previous companies is sequencing problems. Like I think when I was initially doing my first and second company, I would just try to tackle everything, like literally everything. And now I'm like, okay, this problem is the right problem for this year and then this problem's gonna be like the right one, six months from now.

And I don't like over tackle things. And that will lead to a little bit more simplicity within the company. It helps people drive towards goals faster, I think, versus just running around with the chicken with your head cut off basically. Yeah, aff it's a lot when you're growing companies. Yeah. I dunno. I think the sequencing has definitely improved a lot over the iteration of the companies.

Austin Gray: That's interesting. So would you say that you just have to be okay with some things are gonna be going wrong while you're focusing on that, that one problem to solve?

Hardy Farrow: Yeah, and I would say this is the biggest thing that I think corporate people kind of struggle with if they added in like entrepreneurs a lot is when you're at a corporation or you're trained to get something going, 99% right when you're building it because you wanna look good internally to the other people that you're working with. When you're building a startup or building like a small business, you wanna get to 85% right? And then just move on to the next thing because it, that difference between 85 and 99 takes a really long time to refine and perfect.

And most of the time you just need to build out like a basic recruiting infrastructure. You need to build out like basic accounting, you need to build out like basic operational data. And then you eventually bring in specialist who will refine it, but like otherwise you're gonna be like nitpicking very tiny little things and it's not very productive when you're actually trying to just become profitable or grow the company.

And yeah, I think that's one of the things I had that very kind of MVP type mindset, like similar to tech. Just get the thing out, just get it done. Like betters, what is, what do they always say? Perfection is the enemy me of Good. So I try to have that kind of mindset when I'm building thing. 

Austin Gray: Did you buy Longare? Did you start it? 

Hardy Farrow: I bought it. So it's very interesting. It's a 103 year old company, which you don't run into a lot. I know. Um, so it's around a long time and unintended I guess. And, but yeah, I mean it, three generations of family owned it and they were ready to sell the last generation. They've been around for 40 years. The two owners who've been running it and they were brothers. I, I always wonder what it would've been like if I bought something a little smaller. It was 40 employees when I took it over. So there was, it's kinda like moving a battleship at times versus just do true startup type stuff. There's some things that I think have been more challenging than others with dealing with a company of that size.

Austin Gray: And what specifically of those things. 

Hardy Farrow: I think culture change takes a lot longer 'cause you have a lot more people involved. I also think just ripping apart systems, like you don't wanna rip 'em apart so bad that it crumbles the whole company. So you have to be careful about, okay, which divisions am I gonna focus on? So I almost pick like a division at a time that I'm gonna unpack and then rebuild back up to what it needs to be versus just I'm gonna change everything all at once. It goes back to that sequencing thing that we talked about. And then I would also say just like even basic things like the pricing changes you have to do, resetting up your accounting in a way that would kind of works.

Like setting up ServiceTitan was like a huge thing for us. And I feel like if I only had three or four people at the company, it would've been like much faster probably. But once you get it set up, I mean it really hums like a machine because it's so large. 

Austin Gray: Which one did you do first? 

Hardy Farrow: Let's see. I would say about three months in, I set up ServiceTitan, so that was, and it probably took us about six months to really get to a good place with it. In terms of the divisions? I would say track Service is probably the one that I really started focusing on initially, just 'cause I knew it was gonna be a major growth engine for the company. I left Kitchen and Bath and Electric kind of alone for quite a while 'cause they were already pretty large. So I started with some of the smaller divisions and started building those up from the ground.

Austin Gray: The last two companies you built, you build from start to finish? 

Hardy Farrow: Yeah, they were built from scratch. So one was built while I was a teacher in my classroom and it just started as like a project I was doing with my students. Then it spun out of that and then I recruited all these other schools and then like school districts and stuff. And then the other one was like a pure tech startup that I was just building straight up from the ground up. 

‍Austin Gray: So how, what are the differences right now that you're seeing buying a company with 40 employees versus building a company from scratch? From a personal perspective, do you think that there's an archetype of an entrepreneur, like the zero to one type, then the one to 10 type?

Hardy Farrow: Yeah, I do. I think that, I would say the one common thing, um, like across both of them is you have to be really good at distribution. I mean, I think that was the biggest thing I learned initially was when you're initially building a company, you just obsess over the product a lot because you're like, I want this thing to be perfect. And you think about all these little things like how do people even click things on your website and all this other stuff. But as you get deeper into it, you're like, it really just comes down to sales. If you can sell things and you can market things, everything else will take care of itself. So I would say you're smiling 'cause I think you realize this as you go through in your own journey.

Yeah. So half of my time now, maybe three quarters of my time is I'm marketing and sales. And I would say with my first startup it was like 20% and that was me being my first startup and first business. But to answer your question, I think like it requires like more consensus building and like communication skills. I think the farther you get along and also being really good at picking managers. As you get farther along, I think getting from zero to one, you just gotta be really gritty and just have almost no social like qualms about, just like literally doing whatever you gotta do to get the company to one. And that just takes a certain type of gritty person. I, but as you get along further into it, you gotta learn how to navigate and actually set up systems and structures.

Austin Gray: I'm really interested in this 'cause I was talking with my friend Nolan, he's been on the podcast, Nolan Gore, if you're listening, he's with a company called Top Choice Lawn Care down in Austin. And he and I, the first time we ever talked, he's, I'm the one that's in Guy. I get down do the zero lawn base. Whereas in my mind I'm like, man, I love the zero to one phase. I love just the messiness of it. I love it. And I think it's because I'm inherently a procrastinator. So having that pressure of this thing is breaking right now and I have to go fix it under this timeline and having that, the adrenaline that comes along with, until I fix this.

It's gonna be broken. And that is affecting our company reputation. Like I, I love that. And I'm curious to hear if coming into this company, like you still have that level of adrenaline, like these things are breaking, or if it's more so just like a, hey, this is baseline, we're still servicing it at a certain level, but I just have to be okay with that while I focus on this problem. Can you just talk about if there are any differences there or if they're actually similar? Just on a bigger scale? 

Hardy Farrow: I would say it's like you almost have to develop this muscle to tell yourself man, to not, like, I'll give you examples. So like the past couple weeks I, I've been like hyper-focused on like our booking rate when people call in. And it even got to the point of me like going through every single call and like thinking through, okay, what are the different like levers that are unblocking things to get us to a higher booking rate. And then as I got deeper into it, I almost had to say, stop. Like I need to now just delegate this out.

Like I need to not obsess over getting from 82 to 85 and I need to focus on a higher level system that I need to build. Like at the end of the day, moving from like 82 to 85 can be a more gradual thing. Like it doesn't have to literally happen right now. Like me figuring out how we're gonna get four new vehicles in the next month.

‍

'cause enterprise is being difficult, is much more important than that particular problem. So I feel like I'm constantly having to just think through for the next week, okay, what problems are actually really most important and what am I like uniquely qualified to do that like other people can't do within the company. So I think versus like with my first company, I just would've kept literally beating my head against the wall until I got it to 85. And it would've been fine, but like then I wouldn't have focused on probably what was as important. And I think those things change as you get larger, you just have more problems. You have to reprioritize and think about. 'cause there's more people and more systems and more divisions. 

Austin Gray: Do you follow your gut and just take action or do you have a process? Like when you're saying it's 10 30 at night sometimes and your brain's just going, do you have these aha moments where you're like, this is what I need to work on, this is what I'm doing, and jump straight into it? Or do you have a methodical process of here's my Sunday, I'm planning out what the big problems are this week, listing 'em out. 

Hardy Farrow: It's more methodical. So like the biggest thing I learned in tech that's held me is I do like sprint planning. So what I do is I ease notion and like whenever I have anything I have to do, I have a big backlog of tasks. So I'll put it into like the backlog. And in the beginning of each week I plot out like this is how many hours I have in the week that I'm gonna work. And then I basically take stuff in the backlog and they have like hours per task basically. And I'm just like putting 'em into a sprint for a week. And then at the end of every day, I'm basically pulling out okay, from that sprint what I wanna work on that day.

And what I'll intentionally do to get to your question is I'll be literally say, here are my top two focus areas. I want that to take 70% of my time. And then I'm literally gonna pick the administrative stuff that like is gonna make up that other 30%. If it doesn't make the cut, then I'm not gonna work on it this week. And it's almost forcing me to only work on a certain amount of things versus just, right now I've got 230 things in my backlog. There's no way I'm gonna do all 230 things right now. But I could obsessively go after every little thing, but it's just not a good use of my time as a business owner. 

Austin Gray: Is that your personality? Have you always been that way or is that learned the sprint planning?

Hardy Farrow: Which part of it? 

Austin Gray: So this is going down on a rabbit hole, but, and I'm always curious to hear how other entrepreneurs are just inherently wired versus is this a skill that you need to learn? Because the way I'm, I'll give you an example. The way I'm wired is I've noticed that I perform best when I just follow the energy, right? If I get the energy and I think that's something that I need to go tackle, as long as I go tackle it while I have the energy and it's there. Hmm. It's gonna get done. But if I like think through and try to backlog and go sit down and plan it all out, it just kills it for me. Interesting. Whereas for you, what you're saying is okay, you're very methodical about it, and I'm curious, are there certain things that are just inherent to your personality that you have to lean into and pour gas on that fire? Or as an entrepreneur, do you need to go sharpen your sword on your weaknesses?

Because I'm telling you right there, if you made me do that, like it wouldn't happen. No. And I would have to consciously think about, okay, this is a weakness of mine. I need to get put in the reps to get better. So my question for you is specifically, is that just naturally how you're wired, or was it something where you were building the last two companies where you're like, I just need to get better at this and I need to put a system in place for myself to have a backlog of tasks and then take it in a very methodical manner. Is the question that for sound. 

Hardy Farrow: Yeah. So like I would say the things that are very inherent to me are like, I guess like I can't fail things. Like I just won't let myself fail at it. So I have very much a mindset of whatever I gotta do to get there. I never have to convince myself to work. It's like I always just, every job I've ever worked at, I'm working 70, 80 hours a week. I don't know why. I just, that's what I wanna do. And so I've never really had to inspire myself to work more. I would say like the things that I've had to teach myself a lot is like people management that doesn't come very naturally to me. Like I'm very direct and want typically, and sometimes I've had to think about like, how do I get someone to like self-reflect when I'm about to give them my criticism?

Like how do I like coach someone around like they're struggling with this skill versus me just telling them directly what to do. Like how do I coach them in a way that will resonate with them? I think other things like culture with the company, I have to be very intentional about setting up time to think about that because I just focus on like function and like technical and what do we need to do.

And sometimes I realize that like people like doing other things besides those things. And like team meetings have a purpose beyond just being like highly functional. So like I have to build processes and I learned that through like burning people out at previous companies or just the way I manage people and maybe not jiving with them. So I would say like there are different things I picked up from working at other places that I think have made me like a stronger leader and stuff. But I don't know. One of the things I, I always think about is like, but I'm using my time, like what can I uniquely do that is like 20% better than anybody else in the company?

And if it's not, then I need to be delegating it out. You know? It's like a good example right now is recruiting. Like I can do it significantly faster and I can choose people better. And that's one of the reasons why I'm so heavily involved in it. 'cause I think it makes such an impact on everyone else in the company 'cause of who I pick.

And I've always heard stories of places like DoorDash where I think like the CEO was interviewing people until they got to a thousand employees. Same thing with Stripe. And you're like, wow, that's a lot of people to be involved with. That they cared that much about the people that they brought into the company and they wanted to have that much of a, like a thumb on it to actually influence the quality of the people that were at the company.

Austin Gray: So can we dive down deep and like, why are you so confident that you are 20% better? Because I'm in agreeance with you. It's like I consistently try to think about that. What value can I bring to this company and what can somebody else do just as good if not better than me? 

Hardy Farrow: So I think the recruiting thing is a weird, unique thing because my first job in college was, I was a recruiter for Teach For America for four years. So I had to convince these college students who wanted to go into finance and like consulting to go be public school teachers. And most of 'em did not wanna do it. And I had to get really creative with how I talked to people and understand people and empathize with people and source people. And sourcing was probably the biggest thing that I had to learn is like, how do you find people? How do you find out information about them? How do you reach out to them in a compelling way? And then I would end up working in like recruiting analytics at Google for a bit. So I had to analyze like how they found software engineers. So it's almost like I had all these life experiences that led up to now.

Now when I delegate it out to someone to hire, it might take them a couple weeks, but if I really need someone I can flip a switch. And I hired electrician within 48 hours once and I was like, I'm gonna literally go on D, I'm gonna source, I'm gonna reach out to 25 people knowing like six are gonna reply and then I'm gonna interview them and then I'm gonna get someone hired. And it's almost like that basketball switch in like the fourth quarter when you gotta turn it on. I don't know any other way to explain it. I know when I need to do something, like I can flip it with recruiting and I'm trying to figure out over time how do I teach people. Also with the selection process, that's something where you just have to have a lot of reps, have they interviewing people to see what people are like BSing you. 

Basically. And when they're not, what they say they are and how do you ask the right questions to figure out like how curious they are. If you ask someone how intellectually curious are, they're gonna just tell you what you want to hear. So you almost have to ask them certain types of questions to get them to really truly be honest with you. Then you can assess them compared to other people. 

Austin Gray: Can you take us through from the start your process and how, whenever you're in fourth quarter game mode? ‍

Hardy Farrow: Yeah, sure. So what I do is for every role I have, I've always got like a, you always gotta have a job description and like the key traits you're looking for. And then what I do for home services is I go on Indeed, I use their smart sourcing and I'll go in and I'll look literally for people within 25 miles of us that have been active within the past six months. And then I create different templates for each job description. And the key to getting people to respond is you gotta have a really kind of sexy first sentence.

It's gotta be something like, I'll give you an example. Like one of the things I did in my first year was I picked the biggest private equity company in our area and I said, we are the anti private equity company. And people would always reply, oh, this is interesting. What do you mean? It would start a conversation because they get like tons of Indeed messages every day because it's like, how do you stick out and actually have a conversation with people?

So I would do that. And then the other thing I would do is I just got really creative on how to get in contact with people. I would, if I found someone's name on Indeed, I would look 'em up on Facebook and I would message 'em. I would find 'em on LinkedIn, I would find 'em on Twitter if I could. Most of the time they weren't.

I would ask around if they knew anybody. So once they actually replied, it was like I would text them, call them and email them. 'cause I had all three of those things. And I would do it probably within an hour. And then I would try to get on the phone, do like a 15 minute phone interview, and then set up like an hour long in person interview where they actually come in. I get to meet them, get to know them and see if they're a fit. 

Austin Gray: What are some of those KPIs, or excuse me, the metrics that. You mentioned that you said you just lightly threw around, reach out to 25 6, we're gonna reply. Do you have those metrics dialed in? 

‍Hardy Farrow: I wouldn't say it's like super well defined. It's more in my head, but generally I know like when I reach out to people, like at scale, like maybe 15 to 20% will reply, and of those maybe like half will actually be qualified, maybe a fourth depending on the role. So you gotta think, okay, if I need to hire a couple people, you have to backwards math it a little bit. And then the other thing I think a lot about is like how much does compensation play into the role? How much of it is like about their values? Like how much of it is about growing into something? I would say the number one hiring mistake I've made in the past is hiring really qualified people that I really liked, but that were not the right time, right role.

Like they were either too early for that role or way too late for that role. And they weren't that right person at that right time. I'll give you an example. Like I, my first HVAC service manager that I hired would've been perfect now like two years from now, but at the time I needed him to be a little bit more okay with system building a little bit more, okay with things just being really messy, really good at the people management side and the culture building side to get people from a paper-based system to ServiceTitan. Now we're fully live on it. We're operational for two years. Like I need someone who could coach the data coach to actually like each individual invoice, like actually build that out and he would've been perfect at this particular time. But because I liked him and his experience and everything I brought him on and it was something he struggled with in those first six months. And I think that's something that you learn as you get more reps at it, is like, how do I bring in the person who can grow with the role at that time? 

Austin Gray: How the heck do you figure that out? 

Hardy Farrow: You'd mess up a lot. Then you, I mean, there's no way to be perfect at it initially. And I feel like as you get more into it, you really think through what is this person particularly trying to achieve in their career? And is that align with like, where I'm headed? And one of the things I talk a lot about my general manager is every person who joins the company has like a central why. And they won't always even know what it is, but it really, it's one of three things. Typically it's, they wanna make a lot more money, they want a lot more work-life balance, or they want to become like, get to a certain job title or a certain position basically.

And then sometimes you have people who just are really passionate about a particular craft and they just wanna get really good at that craft. And what the key to like finding the right person is like how do you make sure that you are coaching and building a system for them to get to their why? Um, so if you bring in someone and they're like capped on what they can make and all they care about is making more money, it's not gonna work probably between the two of you.

And you have to identify that right off the get go. Same thing with the work life balance. If someone really just wants a lot more work life balance and wants to get outta the field, so they're not on call all the time, but then they get in and they're like leaving every day at three 30 or three and they're not really checking their email after that, they're not gonna be probably the right person for the role if they're in like a service manager role where they gotta be reactive constantly. So you gotta think through what is driving them towards this decision making and like, how do I build the right systems and is it the right time for that type of person? 

Austin Gray: How do you identify that in your interview process? 

Hardy Farrow: Sometimes I just try to ask them straight up and I'm like, here are the four most important things. What do you truly care about? And most of the time they won't say money. And then you have to really push them and you gotta ask things. Like I always ask people, what fought through your past three jobs? Why did you join it? Why did you leave it? And as you talk to them about it, you'll start noticing some patterns. Sometimes they're not patient, they're constantly trying to get to the next thing. They always think the grass is greener. And you might notice, okay, this person is just like perpetually ambitious. Or you might notice, hey, this person is not maybe good at communicating with people, or they're overly opinionated as they're going through it.

And it's almost like you can identify why they make the decisions that they do and how rational they are sometimes, especially as you deal with collar people and how they think through things. But I would say that question and then also like, why did you get into this particular trade in the first place? Or why did you get into this career? And you could understand, was it just happenstance? Was it something they were truly passionate about? I got a plumber, but when I asked him that, he like started describing how when he built his first tree house and he was like 11 or 10, he was trying to build the plumbing for it and then he went through, he started like fixing cars, like vintage cars.

And then it was emails like vintage plumber. And as I started talking to this guy more, I was like, this guy just loves plumbing. He is super passionate about plumbing. He just wants to plum all day long. And I could tell like that type of guy is gonna be like, I wanna teach myself tankless water heaters. I wanna teach myself water softeners. I wanna teach myself this additional thing. Versus maybe some guy who just comes in as I was at this place for a year and a half, they didn't really value me well enough, but like I didn't get that much of a pay raise at this thing. And I know to my, in my head, this guy within a year is gonna be like constantly wanting more and more, which is fine depending on the role, but you just have to understand what drives people and if you're the right place for that person.

Austin Gray: Okay. So talk me through those two examples that you just gave. Like how do you, 'cause your head when you're interviewing those two different people is probably strategizing where they could potentially fit inside the business, correct? 

Hardy Farrow: Correct. I think it depends on the size of the division. So like, for example, you want someone. He's more gritty and can adapt like disorganization when you're like only a couple people in the division. And I think as you get larger, you want to bring in more specialized types of people that maybe are like, the example would be like right now we have probably five guys in our HVAC service division. I brought in a guy who's just really good at refrigeration and that's all he does is refrigeration versus maybe if my first or second hire would be someone who could do a lot of things, like 80% well, but not one thing, like close to a hundred percent. That was like the types of customers we were dealing with.

But as you get bigger, you have to also think through, if I want to go after more specialized refrigeration jobs, like I need a guy who can specifically do something like that. But that type of guy might have a very different mentality about work than the guy who's gritty and willing to roll up his sleeves, but could become more of a bull in a China shop sometimes. But he may not always be great at perfecting things, but he'll get the job done. 

Austin Gray: Yeah, I remember I had John Wilson on. With the Wilson companies last year. And something that when I went back and listened to that interview that stuck with me that he said was your role as an entrepreneur, one, it's ever evolving, like you're continually reshaping yourself and who you are and fire yourself basically. And then the second thing he said that was, that stuck with me was, your job is just to take generalists, turn them into specialists, or keep the generalists in the generalist phase or whatever, division his generalist, and then go find the specialist to specialize in the specific things. And so I've just consistently thought about that for, 

Hardy Farrow: Yeah, and I think it's also like when's the right time to bring in the specialist is hard. Like sometimes I brought in specialists too early, like I talked about earlier. And then sometimes like I felt like I waited too long. I guess it depends on the division and the problem, but. Sometimes it's hard to sequence when to do that and when not to do that. And how do you balance overhead with those decisions?

Austin Gray: And that's where the art comes in a business building. There's really no exact science. Like you, you have to have the internal pulse on that. 

Hardy Farrow: Yeah. I would say one of the things I like, uh, I think a lot about is like, when do I focus on things versus like revenue producing things with the company? And I always lean more on the revenue producing side and I'll figure out the operational side as I go. But getting back to that kind of unique 20% thing, like one of the things I'm working through with my general manager right now is we know we need to get our average job ticket size up with our technicians. And he has this 10 year career of like training and coaching and like working with technicians.

And right now he splits a lot of the administrative stuff with us. So one of the things I'm thinking about this next quarter is maybe I'm gonna take 80% of his administrative burden onto me so that he can literally do four ride alongs a week and do more group sessions and do more coaching with the texts. And like at the end of the day, could I delegate all that stuff out and hire more people so that I have more time? Yes, I could, but is that the right thing at this right point company? If I'm an administrative sponge and I can just do everything super fast and efficiently, but that frees him up to go do the thing that I can't do as well as he does, is that the right thing for the company?

And that's where my head is probably leaning, is if he can do the ride alongs and do the group sessions and do that stuff, he's much better at than I am. Like that will propel our company more forward than him doing like pay basically. And sometimes you have to, I feel like a lot of first time entrepreneurs, you have this ego about, I wanna do the sexy things in the company. It's no, that's not really what you need to be doing as like the leader. You need to often do the most boring and sexy things so that the people that you're hiring that are really good at specific things can focus on them. So you need to just soak it up constantly and unblock them so they can really focus on what they're supposed to versus like the bull crap stuff.

Austin Gray: Interesting you bring that up. I'm curious though, to hear your perspective on why don't you hire and delegate that administrative stuff. 

Hardy Farrow: So part of it is like more accounting and just like EBITDA and just thinking through is this the right time for me to spend money on this particular thing that it's like non-revenue producing, you know, like things get more automated, it's easier just to automate it. Not even have to really bring on additional overhead. But I dunno. One of the things I think a lot about when I'm like outsourcing versus delegating things is like, should this be an internal function or like an external function? So a good example is like when you're building out your accounting infrastructure. One of the things you eventually reach from the company is you need like an internal bookkeeper. Like you need someone who can do time cards. You need someone who can do checks. You need someone who can process the payments, deal with the credit cards, but then at a certain point you're like, okay, now like I need actually like to have a CPA firm involved in order to prepare my financial statements. But like how involved do they really need to be? Like how much money do I need to be really outsourcing? Like I could outsource everything I do in my accounting at CPA firm, but I would spend a lot more money doing it. So it's like what point do you use them versus not? And I feel like as I get deeper into company building, I just get a lot of reps at this is when I need to use a lawyer.

This is when I need to use an accountant. This is when I need to use like a marketing agency. And then when should it be internal versus external? I would say marketing is the thing that I should have delegated more out and I try to do a lot of it in house. And that has been somewhat challenging. And I think in retrospect, I probably would've spent more time finding the right agencies in the past year and a half if I could go back at it.

Austin Gray: Have you been handling some of that yourself? 

Hardy Farrow: Yes, I do like local service ads. I do the Google reviews in terms of applying to them and stuff. I would say about a year and a half ago I brought in someone to build out a website for us, and I've used them repeatedly now. Same thing with like Google Paper click ads, like outsourcing that part, mailers I outsource. It's like we don't even have a full-time marketing hire internally, but I've always had in my mind, build out a marketing department when you hit 10 million in revenue, basically in my industry. But I know some people do it a lot sooner than that. So I don't know. One of the things I struggle with marketing is it's very specialized.

Like you're either really good at PPC or you're really good at websites, you're really good at like social media and you know, as like an owner. It's like you're doing eight things at once all the time for fashion marketing. So if you bring in someone who's in-house, they're not really good at the seven other things, they're really good at one thing. So it's hard to justify the salary typically because you're like, I need you to be good at eight things and you're really probably not gonna be good at eight things and you're gonna perpetually feel like you're failing and putting a lot of pressure 'cause we gotta grow. So that's where I try to do those things at 80% and then I'll bring in like experts to get us closer to the hundred. But I guess there's different ways to approach it. That's just the way I've done it. 

Austin Gray: How did you do it at your other companies? 

Hardy Farrow: Tech is different because I was doing like B2B, so I mean everything in home services, like I'm mostly residential, I do a little bit of light commercial, but building like an enterprise sales cycle is just a whole different ball game and like figuring out, okay, these are the a hundred customers that I could sell to. Let me figure out like how I'm gonna sell them over like a six to 12 month period. How do I build the right product? How do I do the right pilots of them? And I learned that through just working at startups that were like B2B and then I like adapted those practices. But it's definitely interesting just even in home services, just thinking through how different we deal with like commercial customers versus like residential.

Like it's so relational. It's very much like you take the guy out to lunch, like you get to know them, you get to continue building the relationship, they'll continue using you 'cause they just like you basically and they like dealing with you versus like on the residential side, it's like very operational. In marketing, if you lose five customers out of 2000, it doesn't make a huge difference. But if you lose five out of 20 commercial customers, like it can make a pretty big in your company. So it's just you have to be much more intentional about who are the types of managers I bring in, what relationships do they already have versus are they just really good operationally at running this division and reacting to things constantly.

Austin Gray: Yeah, definitely. I'm glad you brought that up as well. But it's something I've been thinking through.

Hardy Farrow: Residential or commercial?

Austin Gray: Yeah, we have both. Like I run, I view our residential funnel just completely different than our B2B commercial funnel. And exactly what you just said, there's a small pool of contractors and developers here and you burn one bridge there and you can lose a quarter of your pipeline if you have four main GCs or developers. Right? And you lose one of those relationships, it could be 25% of your, of your commercial pipeline. But then I look at the B2C completely different, which is where I love spending as the owner. And like I get really excited about marketing funnels and building B2C, targeted advertising and then take the customer through the sales funnel. Whereas the other side is exactly what you just mentioned. It's like an enterprise sales function. Like how do you put the right person in the right seat to go develop long-term relationships with. The B2B clients. So we have two, two functions of our business. 

Hardy Farrow: But I like living. Do you think that's, do I go back to what you said earlier? Do you think that's like the delayed gratification for procrastination thing you talked about with your personality, like where you're, you have to have this constant like immediate thing to go after and with like B2B, you could be going after someone for nine months and it's like you might have to wait a month to even make your next move. In terms of the relationship is that what's been hard as you've been thinking through your business is like, how do I do these super long term strategic plays versus B2C? It's like funnel every week you're examining and it's this constant urgency to improve and iterate. Is that where it's been difficult as like a business leader to think about?

Austin Gray: I don't, I've already made the decision, like I have a great sales leader in place and he handles all our B2B relationships. But in the beginning, like to answer your question. I love living in the B2C funnel, right? I love thinking about how are we gonna go drive traffic to a specific landing page or an offer capture that, take them through a really buttoned up sales process. And this is where I felt like whenever I went back into like a local services that the opportunity was, because if you go to a tent company or take a marketing agency, for example, and if you are reaching out to a marketing agency in an inbound funnel and you don't get a call from a salesperson, you're probably just going to the next three to 10 people.

Hardy Farrow: Yep. 

Austin Gray: What that company who calls you immediately, you're going to immediately have some sort of perception about them. And I think home services is the exact same. We can build a sales funnel or a marketing and sales system that's really buttoned up and polished. Then we have a leg up over the competitors in our industry. And so that's what I get really excited about. I love building the relationships as well. Just to your point where it's how do you think about putting yourself in the area that you have specific expertise and knowledge in, and then delegate the other areas to people who, and do the other things as good or better than you.

And it just so happens that the guy we have in place not only does it as good, he does it way better than me. 'cause he's patient with people mean he really, he does all the trap shoots, like the golf tournaments and trap shooting and all that good stuff. And so he's really good at that. Whereas I just wanna be dialed, like looking at our different metrics and, okay, this ad is working, it hidden really well. How do we go create another variation and replicate that in another market? Right? Those are the things that just exciting. 

Hardy Farrow: It's plus for data centric, I would say like a B2C, like I feel like a B2B. It's kind of like. You could do it. You're like, this is the amount of customers we reached out to. This is the mouth that we're trying to cultivate. But it's not like you can get into the weeds of like clicks and like time spent on page and like conversion rates and then like average response time. Like it's just, I reached out to that guy this week and he responded and either liked us or didn't. I don't know. It's not as complicated as I think B2C is or intellectually stimulating in some ways.

Austin Gray: Yeah. So how have you thought about it from your perspective? Which side do you like better? 

Hardy Farrow: I like B2C better now that I've gone deeper into it with this company. I think the whole Google reviews and like getting thumb tech needs user reviews, like fascinating, like how do you incentivize your guys correctly out in the field? Like how do you build the right, like review automations for a long time Initially, like I was. Yeah, like at the end of every day I would go through all of our invoices and ServiceTitan, it would take 10 minutes a day and I would just copy and paste their email, personalize it, and send out like, Hey, you could help our small business with a quick review coming from my email got like a much higher hit rate than when I Do you the like review automation, which was interesting 'cause it would just come from like a marketing long or something email and they're like, oh, okay, here's another review email.

And I've gotten like 15 of these in a day versus me like personally sending it out. So I know that was one of the things that just understanding like the psychology of like why people leave reviews and how they leave reviews was pretty interesting. And then things like Thumbtack and Angie's, I tried the first year complete failure. We like turned it off. And then this past winter, I mean we got it up to I, we were doing like three XROI on the spend versus immediate value that we were getting on it. And we were booking almost like half of our jobs through Thumbtack and ES at one point now, which was great. And I think it was just really, I feel like entrepreneurship is like taking onion.

And you're just unpeeling it constantly and you're like, I think I got to the core. Then you realize actually there's eight more layers to this. So like with Thumbtack, we realized only specific job types in our area would convert at a high enough level. So we turned off a lot of them and then we realized like if we only do it at certain times of day, it's much more effective. And then there was like additional layers that we kept peeling and peeling to figure out like how do we really make this specific marketing channel work? And like why will it work for us and what spin level will work for us? And I dunno, I find that stuff like you said, like very, I could just spend like all day on it if I wanted to.

Austin Gray: It's fascinating to me, it's probably a really good word for me to listen to from you. Like something you said earlier on was push really hard to get to 85% and just know that last 85 to a hundred percent is going to come the way I heard you say it is. As the entrepreneur, you likely need to hire someone else who can come in and take over it at 85% and just know that the 85 to a hundred percent is going to come with time and rep. And if you're the entrepreneur, once you get it to 85%, like you can add so much more value to a company by taking whatever's at 50 and getting that quicker to 85. And so I think it's a really good word for me to listen to because like right now I'm absolutely obsessed with our B2C funnel, like obsessed and likely letting areas, even just recruiting just fall when in all reality like I should actually go build a system for recruiting.'cause right now it's just, oh, we need somebody. Okay, sweet fourth quarter, let's go play ball. Let's go. 

Hardy Farrow: And I think one of the things I think a lot about is like when should you bring in that specialist? So I'll give you a good example. So like right now, I would say the way we do payables, it's probably like 85%. Like I've got a system like everyone uploads, receipts and like purchase orders. We match them. We do payables once a week. We use bill.com, we send them out. I know I could have a much more automated system and we could get from 85 to a hundred and it might save us an hour and a half a week. When we do payables, our team spends maybe three to four hours to send out the payables at the end of the week.

But when I think about what is the cost of doing something like that comparative to figuring out like how do we get our HVAC service division from the 80 K peak month to 120 K peak month, and what goes into that? Should I put us into Next Star some other training program? Like how do I make the right investments into something like that? It's learning and teaching myself this thing is important, but not right now. I can get by with where it's at and when it eventually becomes such a burning on my fi like head problem, that's when I need to actually go out, fix it in the rest of the company from literally doing what it needs to do.

Vehicles is a good example. Like I feel like I'm not passionate about vehicles at all. Like when I listen to some people, they're like, oh, I've got like Mavericks and I've got this whole like system set up and I'm like, I wanna spend as little time and as little money as I can on this, and I wanna make sure my guys can always stay out in the field and do what they need to do. But I'm not gonna get passionate about leafing structures of enterprise. That is not my thing, and let's get it to the bare minimum we need to do so that I can focus on the other stuff that's really important. 

Austin Gray: Stryker Digital specializes in SEO services specifically for local service businesses. Bodie and Andy, the two co-founders, have helped me get Bear Claw Land Services to the number one search result on Google inside my state for my specific search term. If you wanna learn more, visit stryker digital.com. That's S-T-R-Y-K-E-R digital.com. 

Austin Gray: Something I do want to ask you about before we wrap up is, as I was going through your website. You've got different service divisions. Something I've been thinking about a lot, especially as it relates to your marketing strategy. Do you have to look at each different division as a business of its own and a marketing strategy of its own? Or do you think about creating a funnel that gets people in on the front end and then creating an upsell process along the way, or a cross sell process? 

Hardy Farrow: So it's more specialized by division, I would say 75%. It's specialized by division and then 25% upselling. So I'll give you a good example. So like with Google and like GBP profiles and Google Local surface ads, one of the things I've figured is I've gone through two years of this, is you can really only advertise two services, high level services really well when you get to three and four, Google just does not prioritize them.

Good examples, like when I just took over the company, electric was our main category and I was like, there's just not a electrical work, so I'm gonna make it plumbing and then I'm gonna focus on hvac. And now 80% of my leads on Google are like plumbing and HVAC and electrical is getting a lot less than it used to. And I have to build out a very specific strategy for electrical 'cause I know it's never gonna get the same attention. Same thing with kitchen and bath modeling. That's completely it. It's like a want versus like a need. So I have to think completely differently. Like I have a whole separate website. I have a whole separate GBP profile for it. I do my mails differently. Like I have a whole different customer persona that I'm going after with it. But to the upselling and the cross-selling, I think some divisions and some services are very natural with one another like plumbing and kitchen and bath. They're working in the bathroom, they see something, they talk to the customer very naturally.

They're like, oh yeah, I wanna redo my floor in here. I wanna redo the tile back flash. And then it like naturally feeds into then referring it versus like HVAC and kitchen and bath. I don't know, someone's after and they just want AC to work, and you're like, oh, do you want like a kitchen and bath too? And like sometimes it comes up organically, but not as often, so it's harder for them to upsell, stuff like that. But yeah, I often think of it more as like, how do you build out the specific funnels? And then the thing I've been focused on the last six months a lot is how do I really retarget my customer base a lot with those additional services and really squeeze out every last bit of use with them in terms of the interactions we have, the maintenances we have, doing those free plumbing inspections, just how many touch points can we have with someone in a year you build relationships with people. 

Austin Gray: Yes. And I truly believe that's where a ton of untapped potential lies. Especially if you're a local service business doing any sort of ads. If you're getting Google business profile views, you're capturing them on the front end. Sure you go provide a service. But I do just see so much opportunity that if you create and track a database and tag them properly with the services that are provided. There's so much untapped opportunity, especially if you offer multiple services to go create targeted email campaigns. For example, if, sorry, this is what I've been nerding out recently.

Hardy Farrow: Go for it. 

Austin Gray: Yeah, so the party he were to get people in on his funnel with plumbing, and then even a year later with the right nurture sequences on HVAC or on electrical, could turn that customer that's already in his database into another paying customer again and increase the lifetime value without having to go spend dollars on the front end to acquire them into the database. And this is, I think this is where a lot of opportunity is in home services right now. 

Hardy Farrow: And I would say like the two things to extrapolate on this, that if I'm thinking back about the past couple years of the marketing. Like the two things that I think I made the biggest mistakes on, or things that I learned the most from were your location matters a lot more than you realize. Like I was like, oh, I can outmarket this problem and we're in a very rural area and there's a thousand people in the town, and then the nearest fast food's 15 minutes away. And what I've realized now in retrospect is like the 10 mile radius around your business is incredibly influential. Like you could literally have everything wrong, but if you pick the exact right location for your business and you get the basics right with Google reviews, like you will be, you'll do very well.

And it's almost like we're pushing this boulder up a hill constantly with something like that. And then the second thing I've thought a lot about is like initially when you start a business, you're like afraid of annoying people and you're like, oh, I said this thing. They must have gotten it. And as I get deeper into building businesses, I'm like, it takes people hearing something like three or four times for them to actually even really understand it. If you're changing your pricing. And you said it once, I guarantee you 99% of people did not even look at the email. And that's why like we're not doing my email newsletters or I'm doing my Facebook post. I'm bringing up stuff once every two months and I'm like rehashing it. And I'm reiterating it. And I'm not afraid anymore about just annoying people because like most of the time, people 99.9% of their lives are not thinking about your business. Literally only thinking about it when they interact with you. 

Austin Gray: Yeah. They're not thinking about their business, they're not thinking about you. They're not thinking about what cool equipment you have. They don't care. That cool wrap that you put on your equipment, nobody sees it. Nobody cares. Unless they see it like seven to 10 times, like it may stick in their mind. But yeah. I'm so glad, and I'm gonna go off on a little rabbit hole here, but people are so distracted these days. They are just scrolling like crazy. So if you're doing any sort of social media marketing and like a lot of people. Have asked, how did you get over the fear of being on camera? 'cause we run a lot of, we were on a lot of Facebook ads where I'm just like, Hey, it's Bear Claw Land Services.

If you wanna get your force cleaned up, click the link bullet. Mm-hmm. And it's like, in the beginning I'm like, man, this kind of feels a little cringe like, but at the end of the day I'm like, nobody actually really cares. Nobody does. And you know what, whenever they see it three or four times, then they're, then it remembers, they're like, oh hey. It's funny, like you walk around town, people are like, I think I saw your ad right. And it's, I know that they've seen it like 18 times at this point, but in their head they're like, I think I saw your ad. Right? Because it takes so many times for people to see something, for it to actually stick. Especially in this day and age with attention span.

So just 'cause you send out this, sorry, this is a big, this is a soapbox rabbit hole. But just 'cause you send out one email or do one Facebook post about some offer that you have, most like parties, just 99% of people don't ever see it. And they definitely don't remember it. So it's gotta be this consistent. If we actually really wanna sell a service in this local area, we have to be showing up consistently with something that is adding value to these people. 

Hardy Farrow: Do you go after like specific zip codes? Oh yeah. I can tell you how my process of how I like analyze it, they'll taught me through. How do you think about like areas of expansion versus do you just pick really dense areas and you're just like, we're gonna go after four and we're gonna get a certain percent market share and then we're gonna move on to the next ones. Like how do you think about shotgunning versus density? 

Austin Gray: I'm actually in this right now. I had to just shut off my ass because of our lead flow. And so our business is unique because we're in a mountain town, we're surrounded by mountains. We have to go up and over a pass if we want to get to another service area two hours away. So not only do we have to do that, we've got about half a million bucks of equipment in our main service. So if I wanna replicate this thing, I've gotta invest in equipment, another crew, another recruiting strategy, build another sales project manager, right? Which is totally fine and doable. But the way I think about it is I look at it more from a perspective of here's my crew, here's the main service we do.

I want to have equipment fully paid off before I go replicate again. Because one that's doing two things, one's decreasing debt, and then two, it's validating that we have something that is repeatable and then it's gonna take a lot of effort and energy and time and capital to go replicate that elsewhere. So I focus a very specific zip code, and I only target our service area that is easily accessible with our crew and equipment.And purely from geographical constraints, right? Like we're not gonna hold three pieces of heavy equipment up and over a mountain pass two hours each day to go do jobs in another service area. We're just gonna do as many as we can here and then go build another crew. Does that answer your question?

Hardy Farrow: It does. It's interesting. Like I approach it somewhat similar. I like. One of the things I do is, so I pulled like every zip code within our service, I think it was like 80 zip codes. 'cause we have our service area and basically what I looked at was like how many customers do we currently have in that zip code? Then I looked at a couple key kind of like things. I looked at how many people have bought homes in that zip code in the past 12 months, what is the median home value in the zip codes? I looked at like average income level and then I looked at renters versus like owner occupied. And what's interesting is like a kitchen bath, it makes a massive difference because the odds of someone doing a 50,000 or $75,000 remodel is like very different If they're median home values at 750,000 versus like around our location, it's like 250,000.

So like I am almost going after these zip codes that are 45 minutes away because I know that's where the density of marketing will work. But then on other things, I think about what are the age of the homes like with plumbing, the hvac, like if there was a huge home expansion during the nineties or two thousands, I know all those HVAC systems are about to go outta business. Probably not work anymore basically. So then I'm like targeting my marketing towards that. So I would say one of the things I kind of wish we were smaller at times is because of our size and the amount of jobs I have to produce, it almost is kinda like what you said earlier, where I want to go after 15 things at once and I have to focus myself into a couple areas because I could just spend unlimited marketing dollars if I don't focus myself into Sergiy.

Austin Gray: I'm with you. I'm with you. And we offer multiple services as well. Reason we built the dirt crew was 'cause it's like a natural upsell to our clearing side of the business. Mm-hmm. Our forestry side of the business. But what you're doing is impressive. I mean, thank you. Appreciate it. Crew felt like running four different local service businesses all in one. And they all have, to your point, they all have a different marketing budget and a different strategy like. I feel like my mind is overwhelmed with just targeting the specific area. Thinking through what are the pains of these homeowners in the zip code? 'cause that's all it is. Just solving their problems.

To your point, identifying strategically what homes were at that age of that HVAC system, likely going out, hitting them with the red mailers. We're doing the same thing or a similar thing here, right? It's like the problem is that homes have a bunch of dead wood lying on the ground from beetles that came through. Our forest killed trees in the early two thousands. Now they're all laying on the ground they need cleaned up. And so it's just like strategically thinking about people's problems in the zip code, but the fact that you're doing it with four different services in different target areas is mind blowing.

‍Hardy Farrow: I did something better than others. The crazy thing is when I took over the business, they were doing like almost half and half commercial residential with all four. So it was almost like you had eight and I was like, we gotta get out of like new construction, heavy commercial. 'cause like we can't do that really well and residential really well. Like it's, we're stagnating and that was the biggest ship I did with the companies. Like our electrical was on the ball, new construction and like we've lost a lot of revenue in it. And I made that a very intentional decision 'cause I was like, I can't spend half my time meeting with general contractors but also spend half my time like focusing on marketing.

Like I gotta be really good at one thing, you know? Yeah. And I feel like sometimes what happens with a lot of businesses when you're in that one to 5 million stage is you get these sexy things coming your way. You're like, I can do that. Like we, we got the guys to do that. And then you look up like a year later and you're like, we're doing like eight things now and like we're only good at two, but like we're making kind of money at it. But then you can't really get good at all eight and then you end up plateauing 'cause you can't get anything like larger. So I've been very intentional being like, we're not gonna do this thing, we're just gonna say no. Well, we're gonna shrink this thing down because like we, we gotta get really good at the core things that we're trying to do with the company.

Austin Gray: Well, a new construction throws so many curve balls because you're in front and behind, you're behind another subcontractor, right? And you're at the mercy of their schedule. And then you're in front of somebody else who has already been promised the time slot on the schedule. So it's, if you really want to build the great relationships with the GCs, you have to be at the mercy of their schedule to a certain extent. And that throws an operational, not one, but like 18 operational curve balls at any given time. 

Hardy Farrow: And it's hard when you're in the moment. 'cause like new construction's, a lot of revenue. Like I would get like $300,000 checks or $250,000 checks and it was great 'cause then I could spend 'em on vehicles and I could spend all this other stuff. But when I looked at it in a larger perspective, I was like, how do I grow this company at 20% gross profit in new construction when I'm waiting four months to get paid by general contractor? And if I even bring up getting paid, they get pissed off basically. Versus resi where it's like a much higher profit margin, faster cash flow conversion cycles, it takes longer to build it out, but it's gonna be more durable and sustainable for the company. So that gets back to that sequence thing I talked about earlier. Like I didn't rip off the bandaid right off the bat. Hey, I had to think about when did I get my resi up to a certain place to be able to make enough revenue to deal that loss in the new construction. 

Austin Gray: Yeah, and you could probably coach me up on this right now. So our project manager was out this last week, so I filled kind of project management and the sales role. Two of our guys were out, and I immediately jumped back in and we had four calls in one day from general contractors or developers who said, Hey, it was, what was this last week? June 27th or something? Mm-hmm. It's the last week of June. We're breaking ground the third week of July, or the fourth week of July, and we need this cleared before then. And I'm just like, our crews are literally booked into September at this point. I can't do this. I don't know what to do here. And so it is funny to jump back into actually answering the phones and jumping off the page because I'm just seeing the constraints that we're running into right now. And it's almost exactly to your point. Like you have to decide which route you're gonna go. Are you gonna service residential clients? Are you gonna service commercial or are you gonna build two crews? There are a couple decisions that need to be made right there. 

Hardy Farrow: Yeah. And I feel like it just, it's really hard to be great at multiple things and you gotta pick your lane. And I feel like John Wilson talks about this a lot with like why if they went down that residential service kind of route and they got really good at it. And then I noticed some really good new construction firms and that's all they do. But I think it's very easy to get sucked into multiple things when you're trying to just to get to that next revenue stage. And you gotta almost be like, I'm not gonna do this thing. I'm gonna intentionally say no, I, it's hard in the moment 'cause you're like, this is a lot of money that I can.

Austin Gray: Yeah. And like how many times do you feel like you have to say no in your entrepreneur? Let me ask this better. Since you got into long Acre, how many times have you had to strategically say no to something like that?

Hardy Farrow: The biggest example I can think of right off the bat is we brought in a plumbing manager and he was like, Hey, I've got this guy who owns all the major, like there's this major grocery store network in our area and he owns all the relationships for the jetting, for the plumbing, for it's like a million dollar account and he's owned it for 10 years and he's willing to come over to the company if we can make it work for him. And I was thinking to myself like, wow, a million dollars would be great. It's like this consistent like lead flow for our customer base. Like I could keep the guys busy, we could buy a jetter, et cetera. But then I thought about it more. I was like, what happens if this guy does a leaves in six months? Like boop, there goes a million dollars of the account.

What does that look like with my revenue base, that's now 20 or 15% of my revenue. Like it just vanishes outta thin air. Do I really wanna make that one large bet on that one large grocery store network? Or would I rather build up my jetting gradually with a lot of like medium sized companies and get it to a place where then I eventually maybe bring in a larger national account versus just starting off with that one large account And it's, if they call me at 1:00 AM I gotta go to it. It's like I am literally like their minion just to maintain that thing. And so I was like, no, I don't think we're ready for this. And I just told him straight up like I, I think he was a great guy, but not right now. And like, I think maybe a couple years ago, or if I was still doing tech, I would've been like, oh, sexy opportunity. Let me go after, let's go and figure it out later. But I dunno, I think it could've really defocused us on the wrong things at the time.

Austin Gray:  It's not easy to just, especially like once you get into business and once your SEO and user kicking off, it's like the phone starts to ring. That's not the issue. It's where do you actually focus to grow. I feel like I'm right in in that phase right now. 'cause we could just go so many different ways with the company and I just need to make a decision on what are we gonna specialize in and be known for. 

Hardy Farrow: Are you thinking about like acquisitions versus like territorial expansion? Like how are you thinking about building it versus just buying it and bringing it into the fold?

Austin Gray: It's interesting 'cause like the service we do is fire mitigation. Mm-hmm. With forestry cleanup, right? Mm-hmm. Ton of dead wood all over the forest. That exists everywhere in the Rocky Mountain, United States, and even in the western United States as you get over into California and whatnot. That's interesting because like it is an active problem. There's  a lot of growing demand and need for it, especially with pressure from the insurance companies. So it's not like I can go buy a bunch of existing fire mitigation companies. Right now we're in this unique phase of tree service companies are acknowledging that there is an opportunity, so they're shifting their models into being more of a forestry cleanup company or you're seeing excavation contractors be like, oh, I could use my equipment and go clean up.

Hardy Farrow: Interesting. 

Austin Gray: Yeah, so it's not like I could just go to Veil and there's veil fire mitigation. I could just go buy 'em. Whereas, so if I want to replicate and grow, I have to make the bet that this thing is gonna continue being an opportunity over the next several decades, and then I either have to go build it or I have to create some sort of licensing structure to work with other either existing tree contractors or excavation contractors to be like, Hey, we've built the model. Here's the system. 

Hardy Farrow: How do you think about building a brand though? The interesting thing about buying the company that I did was they've been around a hundred years and I would say like within 10 minutes of us, three quarters of the people probably have heard of us or made up their mind about us at this point. And it's like when I'm thinking about the brand aspect of this, it's like I had these 2000 customers already used this a year, and they knew our brand. And then I have to build it out in these new geographies. And when I'm thinking about growing, I'm constantly thinking about like even if I were to bring in a new service to this particular like company, if that brand has already been there for 20 or 30 years, like how long would it take me to literally build that up in that particular little 10 or 15 minute pocket?

Like how much money would I have to spend versus navigating that? But I don't know how deep of a rabbit hole you wanna go down with acquisitions, but I feel like I always run into two things with him when I look at them. Like I either have this mom and pop shop where this guy's never thought about it until literally the past six months and then he's got a retirement number in his head and you come to him and you're like, your business is actually worth this. And he is. I thought it was worth 10 times that. And it's not even a conversation starter. And then you've got these people who are like, I want private equity money. And you're never gonna compete with those people 'cause you just don't have that kind of money to compete with the private equity companies. So it's like how do you find the people in the middle that are actually realistic about their company but are large enough to like have value to you? So, I dunno. It's something I'm still trying to figure out. 

Austin Gray: So can you unpack that though? Like you're thinking like you are going to grow through acquisition eventually?

Hardy Farrow: Yeah, we haven't yet, but yes. 

Austin Gray: And your reasoning there is because you have brand loyalty in that specific geographic region as opposed the acquired company? 

Hardy Farrow: Yes. Like what I've found is like most people, when they're thinking about local services, they have a couple brands within 15 minutes of them that they're very loyal to. It could be like a food place, it could be like a home service type thing. I'll give you a good example. There's a town that's 30 minutes east of us in Quakertown, and there's this one HVAC company that I swear to half the business in Quakertown. They don't do it anywhere else, just literally in this one little town that they are just, they are the dominant HVAC player.

They never grow beyond it though. And what I think about a lot is like, how long would it take me to chip away if their market share with marketing. Like, I've seen all these other companies try to do it and they have not gotten through their market share. So is it better for me just to go acquire them, have that brand, bring in my systems and operational infrastructure versus there are some areas where I feel like there's so many new people moving into it that there's not a lot of brand loyalty yet.

Especially like resort type places where people maybe are more transient sometimes and they're coming and moving in. Like it's easier to do that versus places where there's not a lot of population growth happening. Like people are gonna use who their parents used and their grandparents used. And that's like why people use us is like, I have people who've used us for 50 years. You know, like we'd have to severely mess up for them to move to another brand. And that's why no one's been able to get into our market share. They let market constantly and we just, for the long acres, we've just been around for like a hundred years. And I think about that a lot when I'm thinking about do I really wanna drop this much in marketing spend versus acquisition spend, and how do I balance this too?

Austin Gray: Yeah, it's interesting. And I believe, like, I'm so confident in our marketing funnel, like I can flip ads on and then I've just got the system dialed at this point, right? And so I think my perspective is a little bit different than yours, and it's because of a, a complete difference in services and then multitude of different factors playing into geography, right? Whereas I don't necessarily think in my industry it's as much about brand loyalty. And maybe I'm naive to this, so I'm gonna put some thought to this that I definitely will be challenged by this Hardyy. So thanks for challengeable. I don't necessarily think it's so much as brand loyalty, as much as it is, Hey, here's a problem right now, I need to solve this problem.

Like the insurance company is actually telling my HOA that if we can get certified as an HOA, that this insurance company will insure all details and if not, we might be screwed sort of thing. So it's like. How quickly go one time service basically type meeting. Yeah. Yeah. But the way I'm thinking about it is like, how can I craft our marketing funnel to go build the database, right? And then offer an up upsell services, right? 'cause we do driveway repair. A lot of these homes have like gravel driveways, right? So it's almost like how do you build a database, get them in on a high ticket service in the beginning, then remarket to them later to do upsells? And is that model profitable enough to scale?

So that's where I'm at. And I think where I'm at right now, if I had to answer this question is like there's not, you don't have that like long-term brand loyalty with a tree service company that you would with a plumbing company who's come and done a residential service call for the last 13 times that you've needed a plumber over the last 50 years and your family as well. I'm looking at it more as, here's a problem right now, this needs to be solved. Who do I search for? But if there's an ad right there that comes through on my Facebook where it's get your property cleaned up, that's how we acquire the customer. That's my current thoughts right now, and I could be completely wrong on it.

Hardy Farrow: Do y'all do a lot of recurring service or like a maintenance type stuff in your industry? Or is it more like you said, just all one time type stuff? 

‍Austin Gray: It's one time, and that's why I've looked at how can I bolt on additional upsell services with the same equipment, right? So our fire mitigation equipment is a subset of specific equipment. What can we do on that property or that home with that same equipment for upsell opportunities? And there's a couple different services that we can bolt on with the same equipment either while we're there or remarket to them in the future with the database. 

Hardy Farrow: Interesting. Huh? So it's like how do you get a higher average ticket size base and how does your revenue per day basically and stuff like that.

Austin Gray: Yeah. Simply just like how much does this, this acquire, how much does it cost for us to acquire this customer on the front end? What's our average ticket size for that first job? And then what's the LTV if we bolt on additional services. 

Hardy Farrow: The metric I think a lot about is like touch points per year with the customer. It's like, how can I get these magic customers that use this for remodeling electric plumbing and hvac, like the four. It's almost like I wanna throw a party for them when they do it. You wanna bring them in for barbecue or something? You used all four in a year. This is amazing, Phil. It is interesting though, as we've been doing more like cross marketing and like targeted marketing and stuff, like I am seeing, we used to have like kitchen bath was its own thing. Like it never interacted with anybody. And now I'm having those people actually buy HVAC systems from us. They're buying generators from us. They're doing like excavations and digs of plumbing and stuff. So it's like how do you build that natural communication layer between these different divisions and the guy's enough to.

Because it's hard when you're like a plumber and you're like trying to just get better at plumbing. You're like, okay, let me teach you about what do we do in electric? What do we do with generators? What do we do with kitchen and bath? Do they repair things? Do they only do installs? I don't know. Sometimes it's a little bit of information overload, so you have to think about like, how do you dumb it down and simplify it so that they can understand how to talk about people. 

Austin Gray: Do I have your business model correct in the sense that my assumption that Home re or bathroom remodeling is your highest ticket service?

Hardy Farrow: Yes. We do about 2 million a year in remodeling, and then the services are the rest, we're around seven overall as a business. But yeah, they're typically like, we'd go as high as like 200 K in terms of remodeling projects, but most are in that 25 to a hundred K range, I would say. 

Austin Gray: Yeah. And then what's average ticket size for plumbing?

Hardy Farrow: Depends on how well we're fit a month, but we shoot for around a thousand, 1,500. It's much more like a volume game. If we have five or six really good projects in a month with kitchen bath, we could do pretty well at it versus I'm constantly thinking about like how many completed jobs do we do in a month with plumbing? Okay, what was our average ticket? What was our close rate? It's much more like we talked about the marketing funnel. It's much more kind of in the weeds on the data and unpacking. Are they selling differently to Thumbtack and Angie's people? Do they do better with certain types of customers or certain types of estimates?

Like I even got down the level of with ServiceTitan, I could pull our flat rate price book and it's got like thousands of items and I can look at by tech. Are certain techs better at selling certain items than others? And like why is that? Why is one guy selling at 80% for capacitors, but another guy's at 20% is that he just doesn't know how to talk about it? Is it a technical gap that he needs to be educated on? Is it he doesn't know how to like explain it to a customer in terms of being a necessity versus a want. Like it's very interesting unpacking that and really thinking through like how does that influence my coaching? How does that influence my training programs and technicians? And that's what I love about the services is you can get like really in the nitty gritty with it. Yeah. And really unpack it. 

Austin Gray: Is your bathroom remodel in the same service area and separate? 

Hardy Farrow: Yeah, it's the same one hour area. I would say like we typically travel a little farther for the bathroom and contain remodels than we do the services just because not as many people needed it every year. So you have to kinda be more selective about who you go after. But like we're not, one of the things we're trying to work on right now is we're thinking through, do we need to be more selective in our sales funnel? Because right now the interesting thing about kitchen bath is you literally get, everybody reaches out to you about handyman stuff. Like I had a guy reach out to us about making like a wooden. Like glove for like Thanos, like the Avengers movie, like with the rings. And he's like, can you create something like this? I'm like, I'm not like a wood shop. Like what? What are you talking about? And then like I'll have people reach out about repairing like a deck.

It's like we're not really a deck company, we can do it. So it's like how do we get more selective in our funnel so I can focus my sales people, what really matters. But one of the interesting things I'm finding is I go through it though, is we're really good. And when someone comes in and they're like, I wanna install vanity in my bathroom. My two kitchen bath guys have been in my company for 40 years. They started there in high school and then they're in their late fifties and they will talk someone from a vanity into doing like a $90,000 kitchen and bath. And so it's like I could have told no to that vanity. 'cause it's a really small project and there's probably like 10 of 'em that are not a good use of our time. If I get that one that ends up being like a $90,000 project, should I just keep doing it? So it's like how do you weigh what types of things can lead into bigger things versus like they're complete waste of your time to go out and quote the size you're at and it's hard. 

Austin Gray: Have you seen any trends in similarities between that ideal customer profile of that person who does end up doing a $90,000 product?

Hardy Farrow: Typically people who've used this in the past, if they come in with something small, it can still lead into something bigger because we have a relationship with them. I'll tell you the most interesting part is the spousal dynamics. Oh, most of the time what happens is one of the two will come in and they really wanna do the remodel and the other one is really cheap and they don't wanna do the remodel. And it's that person trying to convince the other person. But if you come in and they're both pretty aligned, massively influences that upselling at average ticket 'cause you're not having to fight this internal battle. Like they'll literally come in and look at samples and one of 'em is, I don't know if we should do this. I don't know. I don't know. And like those will typically never become bigger 'cause they're constantly just fighting over price internally when you're talking to them. So that's one of the things we look at is like, how involved are the two decision makers in this? So like how opinion are they? And they talk to each other about the remodel.

‍Austin Gray: Talk me through your funnel, like when somebody reaches out on the bathroom, is that just through your website? Is they call? 

Hardy Farrow: It's either they call us or website. I do some PPC ads for it. I do some mailers for it. We've done like community events and stuff. But then we like will take it and our customer service team will book an appointment in ServiceTitan for the salesperson to go out. They go out, they quote it typically within a day or two, and then they have to come into the showroom to look at samples. And then after that they'll sign a contract basically. So typically it takes anywhere from one to three months to actually sign with a large remodel something. 

Austin Gray: I've been playing around with is thank you page and thank you page videos. And then also just like the application process. So like how can we further qualify this customer because like right now, lead volume is not our issue. I realized that I was taking so much of my sales guy's time with calling unqualified leads. Mm-hmm. And yeah, we're basically like, we have just enough friction on our landing page to grab enough information to where it's not just like a, Hey, get your name, phone, email. And then after we capture that, we direct them to another form that asks for some more information with some qualifying questions. And something I'm really interested in taking come from the digital marketing world is like, how can you embed thank you page videos with either those people who have been in the company, who are great at the sales process, driving that.

And then getting that next piece of information that tells you, okay, this is the type of person who meets the requirements of the last people who had bought $90,000 projects. And it sounds like where my head, whenever you're talking is that how could you figure out if both spouses are aligned in that application process so that you know early on that would be interesting to me.

Hardy Farrow: I feel like often it's the why. If you ask them why they want it, it's really interesting. Like they'll say it's just time to do it. Or they'll say things like, or we'll ask them like, what other projects are you thinking about this year? And if they're like, well I'm thinking about doing this whole like new deck on my home and this remodel, I'll think to myself, okay, we got two conflicting projects happening. They're gonna have to sequence 'em. Like let's think through strategically like how much time we place into this kind of funnel. But I know I feel like we're remodeling. It's very like. You have to like almost craft this like overwhelming want in them and it's a very visual trade so you have to build this uh, I call it almost like the 10-year-old dream where a girl is like laying out her dream home and she's like sketching it out almost.

And you have to like evoke this imagery of what is the dream kitchen that you've been thinking about since you were a little kid? What is the dream bath? And it's, you have to create this sense of nostalgia and want in someone versus like with services, it's like you said like with HVAC is out like we gotta get out there fast. They don't really care how sexy it looks or like what the equipment looks like. They don't care about any of that. Even though we try to talk about the technical parts, they really don't care. It's fixes problems for me now that I can have AC in my house. And I dunno, it's been interesting just thinking through like the marketing funnels and stuff, but one of the things I think a lot about the remodeling that I learned from tech is, and it goes back to your thank you page video thing, is how do you create moments of delight and magic?

Throughout your process. Like one of the things Gusto does for like our payroll is whenever you're running it in between pages they have this dancing pig and he's like wearing a different outfit every time. And I always thought that was like, I laugh every time I see him, this is stupid. Like why is this payroll thing have this dancing pig? But it makes me smile. And then when they send their emails when I'm getting paid, they got the confetti emoji. Yes. And it like, it's these little psychological things that like make you just warmer and happier as you're dealing with them. And I think there's a lot of little things you can do as you're thinking through this.

Like with your thank you page video, there's like a bank I use and when you click on the wrong link and they haven't linked it, it shows, hey, we're sorry that this link doesn't work. Here's a game you can actually play. They built a little game on their little website link that doesn't work and then it keeps them on the website and then they end up just staying on there and using it anyway. And it's like little things like that, it's like how do you build engagement and retention? Like it's loyalty with somebody. 

Austin Gray: You're the second tech founder I have talked to who has specifically mentioned Gusto and the confetti, and I do, I agree. They do an amazing job of just making it feel fun.

Hardy Farrow: Payroll's not fun. No one likes doing payrolls, but it's like, how can you make it something that like you don't dread when you're doing it every week? 

Austin Gray: And it's as simple as like those pages where it's hooray, you're getting paid today and it's, yeah, hooray, I'm getting paid today. So it's like, how can you build that on for your website visitors? It's hooray. You're, we're here to clean up your forest. Or like, Hey, how about the vision? What vision do you have? Our goal is to take you from, you have a vision in your head of what you want your property to look like. We're just the intermediary. We're here to take you from what it is to your ideal vision.

Tell us a little bit about your vision, right? And then we try to ask some specific questions to get clarity on that. And essentially it's just telling us everything that they've thought through about different services we offer and. It's further qualifying now, so if they're building that out after the initial lead form, that lead is super hot. When we get that second form film in, they're ready to go based on the qualifying questions that we've asked her anyway. It's like my head is up at the market. I'm going to just, man, how do you have the thank you page worth? Okay. Picture your dream kitchen or your dream bathroom out of the three. Which one resonates most with it, right? Yeah. Or the design styles, and it's like they're clicking through the funnel and you're just capturing and like almost walking them through what it can look like at the end. 

Hardy Farrow: Yeah. There's two things that work like that I want to do more of. One, I know a lot of companies with ServiceTitan, they'll take like team pictures and do a little biography, and then when they do the job appointment confirmation. He'll send it out. Rick is coming out to your plumbing today. It's got his picture and it's got his biography and it's like his little hobbies and interests, and that's humanizing this plumber that's coming out. And then the other thing we've been doing a lot that's been helping the kitchen bath is I taught my managers how to use like chat GPT, and they'll take a picture of the kitchen, asked the homeowner to describe what they want it to look like, and then they'll show them literally the image live in the first appointment.

And they'll be like, is this your dream kitchen? They're like, oh, I actually want it in this different color. Then they'll change it. And they're like, yeah, like that's what I want. But it's like they're seeing magic happen in front of them and it creates this visual marker that they can ground them in what they're trying to do with you.

‍Austin Gray: This episode is brought to you by dialed in bookkeeping. Ben and his team provide bookkeeping services, job costing reports, and accurate financial information for the home services industry. If you're looking to keep your books up to date, visit dialed in, bookkeeping.com/owr ops. When you use this specific landing page, you'll get your first three months 50% off.

Austin Gray: Definitely. Well, and the possibilities of where we're at with tech right now, there's so much low hanging fruit in home services, but as you further build out the process in the system, I love the concept of, Hey, here's Rick. He's coming to your house today. One, it just humanizes it, like you said. Two, it reduces this anxiety that a lot of people have when it's my wife's at home by herself today, I'm at work, right? We have somebody coming. I don't know anything about the company, but we needed our house sprayed for pest control today. Like I got two daughter young daughters at home. Like it reduces this anxiety whenever you can humanize that. Right. And I think that's a big piece for a lot of people. Yeah. Hardy, this is fond. We could probably go on for hours here, but Saturday morning and I know you gotta get to the rest of your day. So yeah, thanks for being on. This has been super fun. 

Hardy Farrow: Yeah, and I love to connect offline about just Facebook marketing and it sounds like you've been pretty big on kind of that, and I've failed miserably at meta advertising. I, I'm better at the Google side than the meta side, so it sounds like you've really mastered those kind of video ads at Legion stuff, so I'd love to talk more about that. 

Austin Gray: Cool. Yeah, happy to do so. Anything else you'd like to share with our audience before people who are building home service businesses?

Hardy Farrow: No. If you wanna find us, we're just long acre company. We're in Valley, Pennsylvania near Allentown and Mainline in Philly and our website's just longacre co.com. 

Austin Gray: Yeah. Fantastic. Listeners, thanks so much for listening to another episode of the OWNR OPS podcast. Every week we publish an episode about home service business owners building great businesses and their local communities publish episodes on Fridays, and then we send out a newsletter with a summary and a recap of the high-level learning lessons and bullet points that we discussed in the interviews. Send that out on Saturdays. If you haven't signed up yet, you can sign up for that  newsletter at ownrops.com/newsletter. That's ownrops.com/newsletter. Thanks again for listening. Don't forget work hard, do your best, and never settle for less.

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