David Loria:  This was the most terrifying change I've ever made in my life. It sounds crazy to say that, but like my staff were so hesitant to make way of people threatening to quit. I think we had someone quit before we made the change. We didn't tell 'em that We weren't afraid. We said, Hey, we're just as afraid as you guys.

This sounds scary. We know it does, but I cannot do this for you guys 'cause No, it's working out better for other companies. We had like almost immunity on our hands. They convinced me and instantly, the business is better, higher profit margins, and the staff makes more money. It doesn't even seem possible, right?

But what's happened is that this new program, we're able to get way more revenue done with less employees. So I have less employees than I had last year, and we'll do about 30 or 40% more revenue with our same staff.

Austin Gray: What if you could grow your business without adding more team members? In this episode, David from Squeaky's Cleaning is going to break down how he uses production pay to increase performance, pay his team members more, and grow his business. Let's jump right into it. So David Luria, thanks so much for being on. Welcome to the OWNR OPS Podcast. 

David Loria: Yeah, thanks for having me, man. 

Austin Gray: Yeah. So tell me about Squeaky's Cleaning. 

David Loria: Yeah, so we are a home cleaning company in the metro Detroit area. We do all the fun home, CL cleaning company things. 

Austin Gray: All the fun, home cleaning company things. How'd you get into it? 

David Loria: So I started the company seven years ago. I used to own a marketing company and that was miserable. I call it a company, but it was myself and one employee. We were selling websites, we were doing digital marketing, we were doing all sorts of things, and it felt like I was on a treadmill. I couldn't get off basically. So I was out selling things to customers.

I was trying to deliver the work. It felt like I didn't own a business. I felt like I had a really busy job. Basically, I wanted to start a new business. I read a book called Built to Sell, where they talked about a marketing company owner. All the struggles you go through, it really hit home. And they talked about converting your marketing company to something you could sell that you could easily replicate, like just do logo design or just build websites.

I was like, you know what? This whole industry is soured for me. I wanna go do something else completely. At the same time, I had been creating a lot of leads for service companies, and so I'd met a lot of service company owners and I decided to jump in. So that's why I started Squeaky’s. 

Austin Gray: You started before it even got it got hip to start a cleaning company on Twitter and on YouTube, huh?

David Loria: Yeah. It wasn't cool when I started it. At the time I was dating a girl and we were like, I was thinking about buying a house. I said I'm actually gonna hold off and start a cleaning company. And she thought I was totally insane. She probably still does. I ended up right, I broke up with her so I'm sure she doesn't like me too much anymore. But the cleaning company stuck though and it wasn't cool at the time. No, 

Austin Gray: That's awesome. That's so cool. So why cleaning company at that time? 

‍David Loria: So I knew I wanted it to be a service business 'cause I had gotten so good at doing the marketing for service businesses. The only thing that was cool or hip, I dunno if Rohan, the guy who started launch 27, big cleaning software.

He had posted a Twitter thread, I'm sorry, a Reddit thread explaining how he started the cleaning company. I was like, you know what, this seems the lowest hanging fruit as as far as service businesses. That's why I picked cleaning Launch 27.

Austin Gray:  Is that what you're using to run your business? 

David Loria: No, we started off with that. He ended up selling Launch 27 for a pretty penny. It was bought by some credit card processing company or something, and then Booking Koala, which you might be more familiar with. Yeah. Uh, is it's just a clone of Launch 27. That's where they got the idea and the. I mean the bones for booking Koala, basically, I think really. 

Austin Gray: What software do you use now to manage your business?

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 cloth. 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 dot get jobber.com/owner ops O-W-N-R-O-P-S. 

David Loria: We use Made Central, I dunno if you're familiar with that. Yeah, I've heard of that. Yeah. Made Central's the big one. So I think like it's, I think we're paying like a thousand dollars a month for it right now. 

Austin Gray: It's interesting because in our stuff we're using jobber, which is really suited for early stage companies, especially in the outdoor service space. But then even like the HVAC and electrical guys.

So once they get up above a couple million in revenue, everybody is saying ServiceTitan. Is really optimized for, especially for HVAC, electrical and all that stuff, like $5 million companies. Why made Central and why does that make sense and why does a thousand dollars a month make sense for you?  

David Loria: Yeah, it's probably saving us $50,000 a year, if not more Made central do. I could gush about them all day long. Made Central does everything, so like our payroll is done in Made Central, our like price increases, like they have so much data, it's so well optimized for cleaning companies. Cleaning companies on Twitter, like the big hip thing is to do remote cleaning, which is totally fine. Totally cool. We have all W2 employees and there's a lot of, you know, compliance type stuff that becomes a problem later on and they handle all that for us. But also Made Central is its own little community of all the big players in the cleaning space, for the most part are using MidCentral and even being in that Facebook group is worth probably a thousand dollars a month to us.

Austin Gray: Really? 

David Loria: Yeah. Yep. 

Austin Gray: Just because you have access to other owners who are thinking about the same things. 

David Loria: Yeah. I mean, I mean our business has grown so much just being in that community and a lot of 'em are just my friends now. 'cause we talk all the time and we're in the Facebook group and we see each other at events and things like that. It's funny because I started before it was cool. People think of successful cleaning companies on Twitter. Those guys aren't doing anything. I know an old lady in Texas who's doing more than all these people. I mean, and I think I met those people on Facebook and like, that's where all the real big players are 'cause they're, they're all in their fifties. They're not young guys on Twitter trying to be cool. 

Austin Gray: That's awesome. So you've seen a lot of value of jumping in and being able to just make friends. It's just funny. It's like. I was just on the phone with Christian Ruff, or we were texting back and forth. I don't know if you know him yet.

He's with Uncommon Elite. He was former 160th division night stalker in the military, flew helicopters and whatnot, and now he's placed in special operators in these small businesses. And uh, we were going back and forth, like we'd jump on probably once a week and end up calling each other. And it's just funny how his entrepreneurs, of course we have friends here locally, but you don't talk about business stuff with most of the people. And then whenever you finally meet those people who can challenge you to be better, that's pretty cool. 

David Loria: It's funny you say that. I think I'm the opposite. Have you? I'm always looking for, I have a hard time, uh, being close friends with people who are business owners. I think. I think I'm always looking for a release. I think I'm always looking to stop thinking about work, but I will say like being a part of peer groups, going to these events. Every time I leave I'm like so energized and I'm like, ah, I'm gonna go do this. I'm gonna go do this. I'm gonna do this. That's, I know, it's like medicine for me. I think I, I know I need more of that. I'm not out looking for it. 

Austin Gray: Yeah, absolutely. But you did say it's worth a thousand bucks a month. Yeah. To be a part of that. 

David Loria: That's true. Yeah. 

Austin Gray: And I think that's where I was going with, it's like whenever you meet those people who within the workday, and I hear you on that. I hear you. Yeah. Like it's after work. Totally relate with you. It's hard enough to pull out of it. Yeah. But during the workday, it's like the goal is to get better. I'm curious to hear like why you think that's worth a thousand bucks a month to you there? 

David Loria: There's no discounting the pragmatic benefits of the software. The software is just super powerful. It does everything but the networking aspect to give you like a really concrete example. I imagine you guys probably talk on this podcast about production pay or you have in the past, like versus hourly pay. 

Austin Gray: No, but I saw that in your notes coming in. Oh, I definitely want to dive in.

David Loria: Okay. For sure. Yeah. Okay. Production pay is becoming a big thing in the pest control space. The cleaning company space, the HVAC space, people call it different things. You might just know it as a different name, but basically all it is paying your employees, uh, by the job, not by the hour. So it changes the incentive structure so that you're no longer punishing people for working fast.

Right? Because before my employees, they had a quick day, they got their jobs done early, they were making less money, right? And people aren't stupid. People figured that out pretty quick, right? And then alongside that, there's all sorts of different benefits of it, right? And I had these people in this group and the MidCentral group telling me like, you're not doing production pay.

You're crazy, man. Why are you still paying hourly? And I was like, yeah, I know, but my staff likes hourly, whatever. And so whatever they convinced me and instantly business is better, higher profit margins, and the staff makes more money. It doesn't even seem possible, right? But what's happened is that this new program, we're able to get way more revenue done with less employees, right?

So I have less employees than I had last year, and we'll do about 30 or 40% more revenue with our same staff. And as, as I'm sure, and people, finding people is the most difficult part of most of these businesses, right? So. That's an example of a thousand dollars a month saved hundreds of thousand dollars a year with that change. You know what I mean? Uh, and that's something I'd never even really heard of before until I was hanging out with these people who are so much further along.

Austin Gray: 30 to 40% more with the same team. 

David Loria: It doesn't seem possible, right? Yeah. So before we were working in teams of two hourly, and those teams of two were getting three jobs done a day. I would say on average, maybe four. Now we work solo teams. Production pay and solo teams are getting two or three jobs done a day. Uh, so our job time cut basically in half. I just couldn't believe it. It was just astronomically different. And people who own these, like remote cleaning businesses, like the with independent contractors that go clean, they're already seeing the benefit of this, right?

Because they're not paying their people hour. They're already paid by the job. So we were actually behind for all this time in a huge way. And it's just because of the incentive structure, right? 

Austin Gray: Can you break this down for us? Because I'm sure whenever you wanted to make the change, there was some sort of hesitation like, ah, that's not gonna work. I can't do it. Oh, yeah. Because of X, Y, or Z. 

David Loria: Yeah. This was the most terrifying change I've ever made in my life. It sounds crazy to say that, but like my staff were so hesitant to make this change, right? So we're telling these people, so people who wanna be a cleaning technician, right? They're looking for one thing every day, and that's consistency.

Right. That's why people like these jobs 'cause they're consistent. They know what to expect every day. And you're saying to 'em, Hey, I know you like your job, but we're gonna change everything, right? We're gonna make it so you don't have coworkers that you're working in the houses with. Your pay is gonna be confusing and mystical.

You're not gonna know why you're making what you're making, but we think it's gonna be more. Right? And so I would push back on all these people in these groups. Liz Trotter, if you don't know that name, Liz Trotter is the single smartest person when it comes to cleaning anything. Cleaning. Liz Trotter, she's a consultant, but she had helped us a ton with this messaging.

Right? I spent six months with her just preparing to make this change just 'cause I was trying to figure all the pieces of it, right? There's a couple different aspects. There's the employee side, so moving from hourly pay to production, pay duo teams to solo teams. Then there's the client side. Hey, we're gonna be sending one person to your house.

Now times might be double. So we had to figure out, hey, how we're gonna turn this into a positive for our clients? And there was a great positive in there we'll get to. So trying to remember all the things we did. It's like overwhelming to think about. The big thing was that we got all of our staff into a room and we said to them, Hey guys, we're thinking about making this big scary change.

And we didn't tell 'em that we weren't afraid. We said, Hey, we're just as afraid as you guys. This sounds scary. We know it does. I can't, I cannot do this for you guys, right? 'cause I know it's working out better for other companies. I know their staff are making 20 to 30% more pay, which for us ended up being more than that, which is crazy. And so we started taking questions like where we were thinking about doing this. We sat everyone down. We had a big whiteboard like this. I wrote on everyone's question. We said, we're gonna come back to you once we know the answer, but we wanna figure these things out too. So we did that. Uh, we had people threatening to quit.

I think we had someone quit before we even made the change. We had a couple people quit before we made the change. We had like almost a mutiny on our hands. Right? Uh, we tabled it a bit. Talked to our consultant Liz, and we ended up going to the ISSA event, which is the International Sanitary Supplier Association, uh, in Vegas, which is basically just a cleaning company conference. And I brought one of our key employees with us, like a, a head trainer with us and put her in a class. There's a cleaning certification class. We put her in. Just by the grace of God, she was sat next to the employees of a company who had just made this change. Shout out to Brielle and her husband at Home Plus cleaning.

'cause their employees ended up gushing about how they were like, we made, we were making 15 an hour, making 25 an hour. It's crazy, right? They were telling 'em how much they liked it and that was just like a, a little miracle. 'cause then I was like, okay, cool. This is not coming from me. They have no reason to not believe these people. We went back home and I was like, Brie, tell everyone what you heard in Vegas, right? She's telling everyone, and we got like a little glimmer of excitement from people on this finally, uh, and we just started making the changes. We answered everyone's questions. We started putting the pieces together. Made Central was built for companies to be able to pay production pay.

So they have all these levers you can change. Okay, this person's gonna make this percent of each job type of thing. And so. We did a test run with two employees. We moved them to solo at the same time, we explained to the clients that, Hey, because we're moving to solo teams, our consistency is gonna be way better. Meaning you're gonna get the same person at your house more often on a regular basis. So you know you're getting the same technician. We explained to the staff, Hey, here are the benefits. You're gonna make more money 'cause you're gonna be able to get through houses faster. It's gonna seem like magic.

You're not gonna understand why you're getting through 'em faster, but you're gonna be alone. You're gonna be motivated, you're gonna be incentivized. We're gonna help you guys work more efficiently, basically. So we cut some things out of our checklist to like our cleaning service, basically. Really minor things, but it was mostly to show them, show the staff that efficiency was gonna be a key part of this program. So did the test run the first week, it wasn't so good. Second week we had two people doing it and they made, I think their average pay was like 17, 18 an hour, and they made about 22 an hour that week. And we were like, okay, we struck goal, we can do it. So. Once we saw they could make more money, we started getting everyone onto it. And then I think we had one person quit again. We were able to take on so much more business that we survived. 

‍Austin Gray: So from a high level numbers perspective, how do you break this down production pay? 

David Loria: When you say, how do you break it down? Do you mean like our growth with our revenue? Or you're saying like the nuts and bolts of how it works? 

Austin Gray: The nuts and bolts of how it works as an owner going into this. You probably had some sort of target in your mind that if I could hit this certain percentage on my labor cost, then this would make sense. 

David Loria: You're exactly right. Yep. So our goal was to be at a maximum of 40%. If you're much lower than 33% labor to revenue each week, you're gonna have unhappy staff. So you don't wanna be lower than 33%. Liz actually recommended that we go between 35 and 40, so we just took her advice basically at face value. What we did was we basically took our staff, we took how long everyone's been there, how much they make currently, and we transposed it between whatever their hourly rate was to a percentage, somewhere between 35 and 40%, right?

Some people making 36.5%, some people making 40% whatever else, and they just straight up make 40. It's really nice 'cause the labor costs become so reliable at that point. 'cause hey, this person costs me 40% of each job and that's really the only pay they make. So we still do reimbursement for mileage and such, but now because they are driving directly from their home as a part of this, they also take their supplies home with them from the h, from the office, right?

So they now go directly from their home to the drops. So we've already cut out one drive of the day, which is between the office to the houses. The first drive of the day is considered the commute to work. You don't reimburse for that. The IRS won't let you cut out some drive time, cut out a bunch of BS time in the office that wasn't needed.

They come to the office once a week, get supplies. And basically now you've hard coded your revenue to payroll across all your staff. Right? You have a number and, and your overall revenue to payroll should be the average of all of your staff's percentages. That makes sense. 

Austin Gray: So you knew that if you could be at 40, then it would make sense.

David Loria: Yeah. And before we would hit 40 sometimes, but we'd hit 35 sometimes and we'd hit 60 sometimes if we had a bad week with bad scheduling. And as you grow a business and as they get more employees trying to figure out like. Whether you got people all over the city cleaning, right? And they go to jobs and they go to the next job, and it's like, how do you make sure that they're not like sitting in a Starbucks parking lot between the two jobs?

And it's, you don't, you can do it when you have four employees. You can't do it when you have 25 employees. And what you do is you just create an incentive structure where if they wanna do that, they can, but they're not getting paid for it. And you make the incentive structure so good that, that they're excited to get to the next job.

And we have people who, who previously were like. I just wanna get out at three o'clock every day. And now they're saying, Hey stuff, another job in my schedule I wanna make, see if I can make $28 an hour this week. You know what I mean? And that hourly rate we're talking about is not the, it's not the job hour, it's the clock hour.

So it's the whole day. So it's a pretty awesome gig for the people that are doing the job. 

Austin Gray: Can you break down an example of a cleaning job? Just what a typical cleaning job looks like, top line revenue wise, and then what you're looking to hit from a labor perspective. And then since all your employees are W2, you're providing all the cleaning supplies, correct?

David Loria: Yep. Yeah. And cleaning supplies shouldn't be expensive. People, I think, sometimes are afraid to buy the supplies. Cleaning supplies should only be about two, two to 3% of your revenue each year. 

Austin Gray: Wow. 

David Loria: Uh, yeah. Now. We're messing that all up. We're doing a bad job of it right now because electric shouldn't messing it up. But when you, the big cost difference in, in moving from duo teams to solo teams is you have to double all your equipment then. So that was a big expense. And then of course we're trying new things, so we bought vacuums that everyone's said, Hey, we don't like these. We're like gone. So that was a, A big expense.

Austin Gray: Scrap those sink. 

David Loria:Yeah. Yeah. And now we have the little Frankenstein set up. We have some people using things and some people not using things. It's just a whole big mess. But we're getting there and that's just like we, we made this change in March, so it's still pretty fresh. But I was excited to talk about it 'cause I'm just so amped up at how well it worked.

Austin Gray: Cool. Yeah, let's keep rolling on it, man. I can tell you're excited about it and I think this is gonna be beneficial to a lot of people in multiple different industries. Even where my head is going right now, as I listen to this, I'm like, how, what would this look like in Trees and Excavation? I don't know if we can do it, but let's explore it in my head. So keep rolling. 

David Loria: Pest control is one of the big ones, and HVAC are both. HVAC's kind of always done that I think in some aspect. Same with plumbing. A lot of companies have done that for a long time. But pest control, all these PE companies that are buying up pest control companies. I have a friend who works at a big private equity place that buys up pest control companies. He said 90% of what they do is they just bypass pest control companies and just convert them to production pay, and that's like their whole gig. So that tells you a bit about the power of this. I apologize. I'm looking at my camera too much. I'm pulling up a job just to give you guys a real world, real world explanation or a real world case study here, so yeah.

Austin Gray: That's great. That's great. 

David Loria: Yeah. Here's a job. We bill $309 every four weeks, and we have it set for six labor hours, which is incorrect. I dunno why we have it set for six labor hours. We should be billing at 60 an hour. That's like the going rate for cleaning in our area. My laptop moving too much? Sorry.

Austin Gray: No, you're good man. Take your time. Okay. Our listeners too have, man, when I started this, I was literally in the corner of my garage. I was on Google Meet, I didn't even have a microphone and Oh, that's awesome. I'm a firm believer that done is better than perfect. So I think most people who've listened to this are fine with a little bit of like silence or shaking or whatever.

David Loria: That's good. Okay, so our allowed hours in this job should be 5.15 hours. I don't know why it's in here at six. But either way, staff was there for four hours. So 3 0 9 staff was there for four hours. To put in perspective, let's go back. Before we were doing this production payload suit, our times were hours, 6.7 hours.

Oh man, what is this? We have a 12 hour job in here, took 12 hours, three people, four hours, because we sent a trainee. So we had a person training there. But even still that, that's just crazy. So. From 12 hours, let's call it eight hours even. Let's not include the Chinese time, from eight hours to four hours.

That's a 50% drop between those two jobs. Now we don't get that revenue, that extra money that we saved on the time difference necessarily. 'cause we're paying a flat rate now. But what we get is we get the opportunity to, we reduce our risk a ton, right? So we don't have these days where it might take eight hours ever.

And again, our goal is to be at 5.15. That's where we make money, is 5.15 and below. So we have it billed for 5.15 no matter what. Now, basically, 'cause the employee takes home 35 to 40% of the job, where our promise to our employees is we're gonna bill appropriately, we're gonna bill a job that is around 60 hour.

And if they undershoot that, then great. If they get it done faster than great. Uh, so we remove our risk. We don't make a bunch of extra money because they got it done faster. But what happened is, Susie, let's call her, is done at one o'clock instead of three o'clock with her job, and when she's done at one o'clock, she can say, Hey, gimme another one.

I want more of this. Let's keep it rolling. And then we've packed out Susie's schedule and she's doing double the work. She's doubled. She's doubled herself as an employee, basically. Right? Austin Gray: Definitely. So whenever you're bidding your jobs, I think it would be helpful for listeners to understand your business model. When you go estimate a cleaning job, how do you do that? 

David Loria:Yep. So it's all over the phone. In our business, our. Stuff is low ticket enough, and this is most cleaning companies. It's very rare you find someone that on the smaller side, when you're getting started off, people will go do in-person estimates, you'll learn very quickly.

That's not a sustainable thing, right? If, if you're going to quote $30,000 jobs, it makes sense to go out in person and go try and win the bid. But if you're doing residential cleaning, job might be 200 bucks a month. Uh, it might be $600 once if they want a one-time cleaning in the end. That paired with just the sheer volume of leads you get.

We get probably 150 leads a week and half of those we can book over the phone if we book 'em right away. I never have the staff to be able to book that many people in a week right now. I wish I could add that many more clients right now, but so all over the phone and basically what you're trying to figure out is you're trying to figure out what do you wanna bill.

So you go call every cleaning company, every cold call every competitor in the area. Go figure out what roughly what they're billing per hour. See if you can get that info outta them, or just be friends with people I'm in that made central group. I've got two other companies in my area. We talk once a week basically, right?

And our thinking is, Hey, we're the best. We're the best for the client in the area. We're the best for the employees in the area. Let's all just keep in touch and make sure we're all doing the right things right? And I find out that they're charging 60 an hour. We're charging 60 an hour. We gotta go figure out what the price would be for a flat rate if we wanna bill it 60 an hour, right?

So we go say, okay, we think this job will take four hours, four times 60 is whatever. We just have that built out now, so we just have just a quoting tool that salesperson fills out all the details of the home and then it populates the price. 

‍Austin Gray: Is that part of the software? 

David Loria: Oh yeah. Yep. Yeah, that's a big part of it too. The really cool thing about Made Central is that it's not like data in a vacuum, right? It's not hot vacuum. It's a little cleaning pun for you, but it's not like data in a vacuum. It's not like the data is sequestered for the quote. 

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 

David Loria: versus the jobs, whatever else. Like what we do once a month on Made Central, which to me this is worth it alone for the software, is once a month we'll go in there and we'll say, Hey, give me a list of all the people that we have, all of our clients that we have, how much they're paying, and how much they should be paying based on the amount of time we're there on average.

And then it goes even a step further. It says, Hey, give me all that data, but based on how fast each employee is, right? So May Central knows how efficient my staff are and how, what their production times are. And so it will say, Hey, Kelly's kind of slow. So even though she takes longer at that house, she takes longer everywhere, right?

If you use the normalized average of it all. Here's what they should be paying, right? Because if we send a different employee, we don't wanna be like, people are price sensitive, especially right now. People don't take kindly to a 30% price increase typically, but we'll, so we'll do these every month. We'll do it price increases every month on a rolling 12 month basis, right?

Signs up in June, next June. They're getting a price increase if needed, right? Based on the time we're there for and all that stuff. And MidCentral makes this as easy as, like before MidCentral, we had to go create this crazy Excel sheet. We were spending weeks doing this. Made Central, we push a button and it shows us here's how much they should be paying.

You click a button, it has an email already in there saying Hi. So due to the cleaning times, your price will, your new price will be this next month. And that's just an awesome example of like why the, why having all your data in one place is so important. Having the quoting tool, being a part of it, having cleaners check into the job and then the system knows, hey, they were there for this long type of thing.

And this is the kind of thing that we've used jobber in the past. And jobbers great, especially when we're getting started. Also, it's great for other industries, but for cleaning the, you have tight margins and it's all about payroll to revenue, right? That that's the whole business. If you can get that right, you can.

You're not gonna go broke. Buying supplies, typically, I could go make the vacuum mistake of buying the wrong vacuum three more times this year, four more times this year, it's not gonna be noticeable. Right. Yeah. It's a very long, convoluted answer to how we do our. How we do our pricing. 

Austin Gray: So they just have an AI assistant inside the tool where you can just go chat with it and say, Hey, gimme this insight.

David Loria: Oh no, sorry, I was being, I was speaking funny there. No, you go select the stuff that you want. So it's like a report basically. Yeah. Cool. Um, but they are adding AI for all the communication. So like when you go to send that letter to people in the next version they're releasing is push the button and it will write it out for you, which is nice, but 

Austin Gray: I'm sure it will have some reporting insights Right at some point. 

David Loria: What do you mean? 

Austin Gray: Because I've seen other softwares do this where you can go, where you can go chat with the AI inside of your tool and say, Hey, oh, interesting. On these insights. So it should theoretically, and I'm just taking a wild guess. You should be able to go in a couple future updates. Yeah. Chat with an AI assistant and say, Hey, based on these employees production. What is their average rate That I need to be billing what you were just saying. Yeah. What's the rate I need to be billing for their jobs to make sure that we hit these 40% margin or less, or excuse me, 40% labor less. Yeah.

David Loria: Well, if they don't have that, I'm gonna send this video to Tom and tell 'em he should have it. The owner made central, I'm saying. 

Austin Gray: Yeah, yeah, yeah. I'm sure they're already thinking about they, they have to be. It's, it's a fun time to be. In service business using software like that, especially with all the data you've put into it.

David Loria: It's intimidating, man. It's, I talk to people who are using AI in so many different ways and I'm like, I don't even, they're using it in ways I can't even think of a use case for sometimes, but I get like paralysis by analysis sometimes of all the different things we could be looking at. It's hard. It's signal versus noise sometimes it feels like to me.

Austin Gray: Um, you seem very focused on your, on what's important in your business. 

David Loria: Yeah, that's 'cause I was doing it wrong for so many years. It becomes easy to be focused on it when you're losing money. Yeah. I think that's like the, I think owning a service business is like the best MBA program you can go through. You have to be so good, especially like in cleaning. You have to be so good at so many things to make money. Like you have to be good at talking with people. You have to be good at really understanding your numbers and like what the KPIs are that actually move the needle and stuff. And when you start, like when you start a business, right, and you go from, let's say you make your first a hundred thousand dollars in revenue, you're like, oh, I'm the man.

Like I, everything I touch turns to gold. It's like you just feel like you're on top of the world and then it's like the what is Darting Kruger effect where you're at Idiot Mountain I think they call it or something like when you think you know everything and you don't know anything like that was the last seven years for me is just now realizing how much I don't know it feels. And I think that, again, going back to the meeting people and speaking with. Business owners, it's like that's how you find that stuff out. You have to have one, the humility to say, Hey, this person's smarter than me, which when I started the company at 25, I didn't have that humility. And then also you have to be willing to put in the work to then go learn from them or go try and recreate what they're doing. And I think that's, I don't know if I could have learned that any other way other than just doing it the hard way and doing some things wrong and all that stuff. 

Austin Gray: Yeah. Those learning lessons are so deeply embedded after you make the mistake, huh? 

David Loria: Totally. Yeah. And I think that I get frustrated. I used to be like tweeting all the time, and I like really liked having a following. I think I've lost some followers because I don't really do it much anymore, but Twitter is the land of, Hey, look at me. Everything's great. Especially like in the hot, trendy cleaning company space, it's everyone's talking about how much money they're making. Everyone's talking about everyone's got a course they're selling, right?

Whatever else. I was like, at 25, this stuff would've spoke to me. And when I, not like I'm so old and mature now, but I'm just saying like when I was on Idiot Mountain, I'm like, this is awesome. And as I get better, and by better I mean realize how dumb I am as I realize how stupid I am and have some humility, it's like that stuff isn't helpful to me.

I don't care if someone's making money. I wanna know what problems you're going through. And also I'd like, I don't believe any of it. I know you guys have bigger problems and maybe you guys don't even know it yet. The people on Twitter and so talking to. Have you ever heard the Jerry Seinfeld joke? He's of Jewish descent or whatever, but the joke is that two Jewish business owners walk up to each other and say, how's business?

The other guy says It's terrible or something. That's the whole joke. And apparently the idea is that the Jewish culture is so humble and stuff that that's always the answer is like, things are terrible. And I always laugh at that joke because I think that that's how most business owners should communicate a little bit is like when I talk to an Hay's business, oh, it's awesome, man.

We're crushing, we're hiring people, whatever else. I like when people say to me, things are terrible. Here's what I have going wrong, here's what I'm trying to work through. You know what I mean? Because that conversation does so much more for both parties, I think, is, Hey, here's this problem I'm trying to solve.

And so I think being with these groups of people who have been doing it longer, those are the conversations I have with these people. It's not here's how great we are. It's, here's everything that's wrong. 

Austin Gray: I do wanna dive deeper into that, but I'm gonna ask a higher level question. So what is your goal with your business?

David Loria: Yeah, it's changed a lot of times. When I started it, I'm like, I'm gonna take this thing national. We got awesome branding. We'd kill it as like a franchise. And then I was like, I actually kind of as least as possible and just having a good life and see by family of getting married in two weeks and stuff like, 

Austin Gray: oh, good for you.

David Loria: Uh, yeah. Thanks man. 

Austin Gray: Congrats. 

David Loria: I think right now my goal is to, it's funny, every time I'm, I'm at a place in my business, I'm always like looking at the next big revenue number I want to hit and the next big milestone I want to hit. And I'm like, once I get there, then I'll be good. Then I'll just start relaxing. So I'm gonna say that again, that my goal is to get us basically 50% bigger and then I wanna calm down, hire maybe like a CEO or something and step out a bit. But I'll be surprised if that actually happens. I wouldn't be surprised if the goal posts change at that point again. 

Austin Gray: Yeah, it never seems to change. It either changes in number or it changes in some sort of other intrinsic value. At least for me It does. 

‍David Loria: Totally. Yeah. Yeah. Yep. Yeah. I also, I built a, so a year ago, or no, a couple years now, it's two or three years now. I was talking to a buddy and I was complaining about how hard it's to manage our supplies at the cleaning company. And he's an engineer at Magna, big automotive supplier. He was like, you need an inventory management software. And I was like, yeah, I know, but there isn't one that would work for us, right? And so we ended up building one in Google Sheets, like this really rudimentary thing where you'd have barcodes and you'd scan 'em and they'd work through Google Sheets and stuff.

And so we ended up posting it in the MaidCentral group with all these big cleaning companies, and we had 150 people reply that, I want this yesterday, dude. And so spent the next. Year and a half making A-A-M-V-P whatever, minimum viable product. And lemme tell you, it was minimum, it didn't work very well.

Paid some, got Upwork to make it for us. And then had some people, we, the little beta test, we had 10 users. And then just this past year we partnered up with a friend of ours who's a developer and made the real version of the software. And now we're outselling that software too. So part of my future for Squeaky's might be, maybe it is hiring the CEO or someone to run it for me and then shifting focus to the software thing. 

Austin Gray: Yeah. And I wanna dive into that. So you said that, man, I'm gonna be really vulnerable here on the podcast, and it sounds like this is something that you. Could be open to as well, because you're saying the most important thing that you can talk about with other business owners is, Hey, what are you actually dealing with right now and what are you actually thinking about instead of, oh dude, we're crushing it.

Leads are good. Like Facebook ads are ripping sick. Right? Let's talk about something real. Where is that balance? And I'm asking this because I'm in a very similar state, like I've built. My business, we have a team in place. I see opportunities to help other business owners with things like building software systems, sales and marketing systems, right?

Like things that I get really naturally excited about and actually want to help other people with. But then there's always that thing in the back of your mind of, is this just another shiny object as a business owner that I'm losing track on what I should be focusing on, and everybody, every entrepreneur's gonna have a different opinion on this.

And I'm just curious to get your opinion because it does sound like you saw an opportunity to go build a product for your actual business, and you did shift some focus there, which regardless of what you, and I think, oh yeah, everything's gonna still run. You did take energy away from that and shift it somewhere else. And I'm aware of that too, if I do that in my own business. Where's the balance there and how did you think through that? 

David Loria: Yeah, I think that's probably like the great kryptonite for a lot of us, right? I think business owners I talk to are like, yeah, I've got my business, but I'm thinking of this really cool thing I want to do. I feel I'm still struggling with that, with this whole thing, right? Because I pays the bills. It's like Mo, like my identity is, I'm the owner of Squeakies, right? But I see that the growth potential of something like a software company is, provides a lot of value to people and stuff. But it's also, it's like really difficult.

Like we, we built the software, all those people wanted the software and then it's, you go build it and it's okay, we're ready for you now. And you don't have 150 people sign up that day. Even though they all want, said they wanted it. They don't sign up that day. Unfortunately, we just got the software built.

We spent all that time and then now it's, I feel like I'm at the fork in the road, right? Which we, what do I do where I spend my time? Do I hire people for the software to help me run that? Do I hire people for Squeaky's and help me run that? To answer your question, I don't know. I was hoping you would know.

I think the other hard part too, is that I feel a responsibility. They say that like when you have a business, it's not like you don't have a boss, you just have more of them. It's all your employees, all your boss. Right? And it's, I have a responsibility to all these people here. I can't just be like, Hey, I'm gonna do something else.

Good luck guys. Yeah, it's difficult, right? And then even now with these two things. I'll come across something else and you'll hear about all these awesome things people are doing, and it's, oh, maybe I should get into that. But it's like you're constantly having to tell yourself like, no, stay the course. Rome wasn't built in the day type of thing. 

Austin Gray: So whenever you, what do you have in your mind of Squeaky's? What's the vision right now? And I'm not trying to use the cliche terms, but seriously, if you had to pick the perfect way for Squeaky's to be remembered, like what's, what is it doing in revenue? What is it serving? From an employee perspective, like how are you making their lives better? What are all those things that are bouncing around in your head right now? 

David Loria: Yeah. Yeah. So I think in a perfect world, we would have a leadership team that allows me to be totally outta the business if I need to be, right? So I'd love to be the guy that comes in once a week to check on things or once a month check on things. I have most of the day to day covered. Right now I can not be here for a week, but we're not growing unless I'm here making decisions and changing things and things like that. I think in a perfect world, I'm taking home 400 grand a year or something, 300 grand a year. The business is doing four or 5 million a year or something.

Those numbers maybe don't work out exactly right. It should be at like closer to 20% profit margin, but. Important thing for me would be taking home a, a big boatload of money so that I can go try other things and I, and this is running stable enough to where I can, you know, not feel guilty about working other things. And I can come check in and move the needle slightly or steer the boat slightly. And then paying for my staff, I think that the ultimate goal would be have an office need and like a, a management need large enough that we could off offer more opportunities to a lot of our field staff. We have a lot of great people that work for us, but we only have so many spots and so many ways people can be helpful right now.

So we have two full-time people in the office. We're hiring a third. If I don't have any field staff that have skills working and scheduling, there's no growth opportunity for them here. So if we get bigger, maybe we hire someone who works in the office and they are doing training and recruiting full-time.

I think I have a lot of field staff to be good at that because they understand the business, they understand what kind of people we would need that would do well here, things like that. So that would be like my, my, my dream scenario would be create really good jobs and like clear paths for growth for people that work here currently and give them even better opportunities than they have now.

Austin Gray: Where is the business currently? Can you share where you're at revenue wise? David Loria:Yeah. We just passed the monthly mark that would put us over a million. So I think we're doing like 85 a month right now. 85,000 a month. Uh, which in a lot of businesses, like cleaning companies, residential cleaning companies. Only get to like three to 5 million. That's a huge residential cleaning company doing three to 5 million like the, some of the biggest cleaning companies. And that's with multiple locations often too, like some of the, like the two biggest I know of, and maybe I'm wrong on this, would be like Alpine Maids and Better Life Maids.

Shout out to Matt at Better Life Maid, but I think they have two or three locations in 50 to 70 employees. And I don't know what I'm getting at. Sorry. Yeah, well we have long ways to go. We're doing just over a million. We think we'll do this year. 

Austin Gray: Cool. Cool. I'm curious to hear your perspective on this. Once you hit that goal, is that when the focus, like is that when the opportunity opened up in your mind? Like, I've achieved something that I set out to do, so therefore I would be open to building something new? 

David Loria: No, I think actually it was the opposite. I think what happened was. I'm not recommending it. I think what happened was I had lost, yeah, I don't recommend doing this. I think I had lost motivation. I think that I had built the software two or three years ago and we hadn't, things weren't going that right. We were making money, but it didn't feel like I was taking a lot of it home and I was like, I want to do something else that's gonna get me money quicker. I didn't say it that stupidly, but I think looking back, my alligator brain was like, oh.

This will make me a millionaire overnight. And so I think it was truly shiny object syndrome. I think it actually, it, it maybe wasn't the right time to even do all that. Luckily the that part was just like, Hey, I'm spending two hours every evening. Building the software now is where the actual work starts with it now is like we have to actually go out and get customers and do marketing and build systems and hire people and do all these things.

But I think that, I think I just felt frustrated and I was looking for another, a plan B, if you will. 

Austin Gray: Interesting. Now, how has your mindset changed, if any? Now that you're, you're on track to do a million a year. 

David Loria: Yeah, I think now, I think because we did all the hard work of fixing all the big problems our company had. Hopefully the most of 'em are done. I don't know. We'll see. But now that's done. I think, uh, I feel so much more, like my business is so much more stable now that I won't feel as con, like I, I won't feel like I'm, if I'm spending time on stock, while I won't feel like I'm jumping ship or like I am neglecting Squeaky’s.

Right. I think that. Squeaky's has a lot of, a lot of staying power and like it's got people below me that know what they're doing now, which is really great. And I think I just actually opened up more opportunity to work on it now to work on stock while now. 

Austin Gray: Yeah. Yeah. So are you gonna allocate time to building this software?

David Loria: Oh yeah. Business. Yeah. Yeah, we are. It's also just hard, it's just so different from what we do at Squeakies and it's like the opposite problems we have at Squeaky's, right? So at Squeakies there's nothing but demand for our services, and it's all about figuring out how to provide the, mm-hmm. Provide the work, right?

Starting software is the exact opposite problem. It's like you're one of millions of people trying to get people's attention right now and saying, Hey, we have this new thing. You have this really cool thing. You want to try it, right? We really have to develop a plan to do that, right, and that we don't have that plan yet. So we're trying to work through that. 

Austin Gray: And where's the business right now? Is it pre-revenue? Do you have paying customers? 

David Loria: We got paying customers. We have 11 paying customers. It's not nothing huge, just bringing in like just under a thousand a month right now. 

Austin Gray: And what do you think the TAM is for that, or what do you think the potential is for that business in your mind right now?

David Loria: Yeah, so we, we built that originally because we knew cleaning companies would like it and we thought that other service businesses would like it. We found out pest control companies really like it, probably even more than cleaning, which is exciting. Uh, so that broadens our horizons a bit. We had thought that HVAC and plumbing would like this, and we found out they actually don't as much as we thought they would, they have different needs.

So I think part of it, we're still defining the market, right? Every day we talk to companies and we're like, oh, you'd use this. I'm surprised, right? Like we had someone who was interested in it at an event we went to, she runs the laundry department at a hospital. She was like, I would love this software 'cause we could keep track of our towels, how many clean ones we have quickly and all like other things too.

But, so depending on the scope of how large our target market is, it could be pretty big. Our goal is to get recurring monthly customers for it. Right? Software sells off. We, we'd wanna exit the company, we'd wanna sell the company at some point. So our goal is to get a thousand users and if we can do that, we could sell it for $10 million or something.

Austin Gray: So is that the. Is that the number you have in your mind that's like the next thing you're pushing towards is a $10 million exit? 

David Loria: Yeah, I think a thousand users is what we're pushing towards, for sure. Truth be told, it'll depend on how hard this journey is to get there. If we get, and it was a lot of work, 10 million might not sound like very much between three people and employees and all that stuff, I don't know. But yeah, right now it's a thousand users, what we're pushing towards. 

Austin Gray: Cool. And then how are you splitting up your time right now? 

David Loria: Well, not very well. My, my time right now is, and for the past six months has been wedding planning at 20%. Trying to, everything else done. We also bought a house last year and it's just been one thing after another, but that's life more seriously. We actually just, we just moved offices. Some, I'm in my new offices at Squeakies. We moved to a bigger building. We outgrew our last one, so I had to get that done. And then that was like a whole six month ordeal, finding the space, moving in, building it out, all that stuff. So now I think now I'm at a place where after I get married here, the next two weeks I'm gonna sit down and say, okay, what is my time split gonna be?

How am I gonna do all this? You know what I mean? I've been burning the candle at both ends for the last six months here. I'm not sure. Not sure how it's gonna shake out. 

Austin Gray: I'm excited for you. I think it's cool. I think what you're doing is awesome. I mean, it's the typical thing that we all go through as entrepreneurs, and I wanted to talk about it because it's the, It's a real dilemma, right? You build a business up and the other opportunities you get to make the choice. Do you go invest time there or do you keep building the one thing? And yeah, listeners, if you're listening, you guys know that, that we're pretty open with what we talk about here. And yeah, this is just the real dilemma. And David, I appreciate you being open and willing to share where you're at with it. 

David Loria: Yeah, absolutely man. 

Austin Gray: Is there anything else that you'd like to share with listeners before we wrap this one up? 

David Loria: The big thing would be if you have a service business that you need to track any kind of supplies or equipment, give stock while a look, basically. It just allows you to track all those things really easily. Lets you do it all with a simple Chromebook and like a stock room basically. It's way easier than any other ERP system or any other confusing inventory system, and it works a lot better than using like a, just an Excel sheet or something. So check out stock while, all right.

Austin Gray: Fantastic. And then where can people find you online? 

David Loria: I actually don't even know anymore. Lemme look at my, I think my Twitter profile is at David w Luria. Just, just find me@stockwell.com. I don't even tweet much anymore. I'm boring nowadays. 

Austin Gray: You hang out in Facebook though? You hang out in those Facebook groups.

David Loria: I do. Facebook groups. Yeah. Yeah. You can go find me in the Made Central Facebook group. They have a public one. Look up mate Central on on Facebook. You'll find me in there. David Loria. 

Austin Gray: Cool. Cool. That sounds good. All right, listeners, thanks again for listening to another episode of the OWNR OPS Podcast. Once again, David Loria with Squeaky’s Cleaning. Thanks for being a guest on the show. David and listeners, thanks again for listening. 

Austin Gray: Stryker Digital specializes in SEO services specifically for local service businesses. Bodde and Andy, the two co-founders have helped me get Bearclaw 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: If you are enjoying these podcast episodes, we would sure appreciate a five star review on Apple and Spotify. And then if you're listening on YouTube, unsubscribe to the channel would help us out a lot. If you're receiving value from it, we ask that you take 30 seconds to go do that right now. Just like building a local service based business where you're getting five star. Google reviews is really important. It's the same thing with a podcast, so if you're getting value out of it, that's my only ask here. So my deal right now is I'm in a similar boat that, that David is in, and I want to help guys who are in those early stages of solo owner operated Mode a hundred to 500 K. So I've started a school group and I'm posting a lot of things and materials that helped me early on, and so we've got a bunch of video classroom series. We've also got like video trainings from other smart people like David teaching on topics that they're really good at within their business. So if you want to go join and, and just grow your service business alongside other people like David's doing in the Facebook group there, our skool group, you can join school.com/owner ops. That's skool.com/ownrops, and that's the free group. You can jump in, anybody can jump in there as long as you're building a service based business. So we're gonna wrap this one up. Don't forget, work hard, do your best, never settle for less.

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