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Welcome back to Callahan’s
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Welcome back to Callahan’s corner, where you ask the
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corner, where you ask the questions we answer them live
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questions we answer them live right here on Facebook. So what
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right here on Facebook. So what are the questions submitted
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are the questions submitted this week? Mike I’m going out
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this week? Mike I’m going out and building a business and um
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and building a business and um it was actually young gentleman
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it was actually young gentleman or lady uh we giving away who
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or lady uh we giving away who it was. They wanna know how do
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it was. They wanna know how do I build value in my service
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I build value in my service business so whether it’s lawn
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business so whether it’s lawn care home cleaning pest
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care home cleaning pest control, there’s certain things
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control, there’s certain things in my opinion that we could do
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in my opinion that we could do to vet um drive the value of
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to vet um drive the value of your business up. There’s
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your business up. There’s certain things that can
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certain things that can actually start pulling down the
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actually start pulling down the value of your business so a lot
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value of your business so a lot of times when most service.
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of times when most service. Especially in lawn care go to
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Especially in lawn care go to sell their business or retire
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sell their business or retire All they have left is a book of
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All they have left is a book of business and a lot of beat-up
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business and a lot of beat-up old used equipment and
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old used equipment and basically they’re just selling
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basically they’re just selling their contracts that face value
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their contracts that face value and um their equipment for
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and um their equipment for whatever that market value is
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whatever that market value is and let’s face it lawn care
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and let’s face it lawn care equipment uh even though no
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equipment uh even though no matter how well, it’s taking
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matter how well, it’s taking care of it, the value of that
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care of it, the value of that when you go to sell it um is
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when you go to sell it um is not gonna be that high if you
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not gonna be that high if you have a lot of equipment. so
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have a lot of equipment. so what I’m gonna do is basically
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what I’m gonna do is basically kinda go in and take a look at
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kinda go in and take a look at it outside of the equipment
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it outside of the equipment aspect or maybe the financial
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aspect or maybe the financial investment of maybe property.
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investment of maybe property. You’re running your shop out of
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You’re running your shop out of what can you do in your service
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what can you do in your service business to raise that value?
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business to raise that value? uh when you go to retire or
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uh when you go to retire or sell your business so first
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sell your business so first thing I wanna look at is the
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thing I wanna look at is the difference between one jobs and
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difference between one jobs and reoccurring jobs so that annual
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reoccurring jobs so that annual recurring revenues that’s
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recurring revenues that’s basically uh when we look at
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basically uh when we look at its annual recurring revenue or
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its annual recurring revenue or Mr Monthly recurring revenue.
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Mr Monthly recurring revenue. so that’s where if I’m going to
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so that’s where if I’m going to rebuild a business from day one
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rebuild a business from day one is I’m going to go in and
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is I’m going to go in and create a select amount of.
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create a select amount of. Services it can be sold over
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Services it can be sold over the phone. Those are gonna be
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the phone. Those are gonna be your lawn mowing fertilization
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your lawn mowing fertilization um something that quickly can
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um something that quickly can be measured off a satellite
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be measured off a satellite imagery and and sold over the
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imagery and and sold over the and they are reoccurring
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and they are reoccurring services. They’re not one time
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services. They’re not one time spring cleanups or fall
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spring cleanups or fall cleanups. These are reoccurring
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cleanups. These are reoccurring services in a basically a
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services in a basically a maintenance package that
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maintenance package that contracts gonna run forever to
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contracts gonna run forever to the cancer the customer cancel
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the cancer the customer cancel so what you can do is go in and
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so what you can do is go in and show the value of the
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show the value of the reoccurring revenue. You don’t
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reoccurring revenue. You don’t have to go and resell that
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have to go and resell that every time now the. Thing that
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every time now the. Thing that I’m looking at is how can I
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I’m looking at is how can I take that reoccurring revenue
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take that reoccurring revenue from my gateway services? the
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from my gateway services? the original services? How can I go
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original services? How can I go out systematically up-sell and
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out systematically up-sell and some of the customers that work
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some of the customers that work with simple growth have been
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with simple growth have been extremely um diligent and uh
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extremely um diligent and uh well versed in this is what
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well versed in this is what they’ve gone in is that if they
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they’ve gone in is that if they own a fertilization we control
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own a fertilization we control uh company that they’re going
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uh company that they’re going out not only doing the
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out not only doing the fertilization we we control,
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fertilization we we control, but they’re getting additional
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but they’re getting additional to do perimeter pass our fire
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to do perimeter pass our fire ant control. so what they’re
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ant control. so what they’re doing is taking a one stop for
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doing is taking a one stop for the property. Continuing two or
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the property. Continuing two or three different services they
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three different services they can do while they’re there
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can do while they’re there already so they minimize that
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already so they minimize that non billable um drive time and
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non billable um drive time and literally ratchet up the client
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literally ratchet up the client lifetime value or that annual
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lifetime value or that annual recurring revenue. three four
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recurring revenue. three four times X and they’ve you know
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times X and they’ve you know isn’t lowered their overhead as
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isn’t lowered their overhead as well. So that is the first
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well. So that is the first approach that I’m taking when
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approach that I’m taking when I’m going out to drive value in
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I’m going out to drive value in building a business, whether
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building a business, whether whether it’s existing or
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whether it’s existing or consolidate the services create
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consolidate the services create services it can be sold over
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services it can be sold over the phone easy. Then a process
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the phone easy. Then a process to up sell to double or triple
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to up sell to double or triple um that annual recurring
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um that annual recurring revenue now we’ve got a process
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revenue now we’ve got a process in place now to go in and
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in place now to go in and create a uh a
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create a uh a subscription-based model
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subscription-based model basically because we’re going
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basically because we’re going out and selling that service in
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out and selling that service in basically, there’s no contract
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basically, there’s no contract in place. It’s gonna run
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in place. It’s gonna run forever till they cancel now
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forever till they cancel now some states like New York may
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some states like New York may require a signed contract on
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require a signed contract on file for d or pesticide laws uh
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file for d or pesticide laws uh but the idea is that’s gonna
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but the idea is that’s gonna auto renew um every two or 3
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auto renew um every two or 3 years um you may have to get a
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years um you may have to get a new sign contract based on the
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new sign contract based on the new laws, but with the ideas
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new laws, but with the ideas it’s it’s set up as an auto
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it’s it’s set up as an auto recurring. So when you go out
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recurring. So when you go out to value that business, we’ve
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to value that business, we’ve created a book of business that
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created a book of business that is significantly more appealing
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is significantly more appealing because the new business owner
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because the new business owner isn’t risking um that sure or
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isn’t risking um that sure or cancellation because they need
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cancellation because they need an annual contract renewal and
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an annual contract renewal and we’ve we’re basing around
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we’ve we’re basing around mostly around in recurring
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mostly around in recurring revenue. Now you may have a
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revenue. Now you may have a one-time aeration overseeing
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one-time aeration overseeing spring and fall cleanup of the
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spring and fall cleanup of the ideas We wanna focus on the
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ideas We wanna focus on the recurring services first to
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recurring services first to drive uh basically a
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drive uh basically a subscription model. so the next
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subscription model. so the next thing I’m looking at then is
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thing I’m looking at then is what. Is the values are you
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what. Is the values are you building and buying a list or
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building and buying a list or right now you’re going in
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right now you’re going in creating value through uh the
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creating value through uh the client base. That’s a
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client base. That’s a reoccurring revenue model now,
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reoccurring revenue model now, in addition to that as we grow
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in addition to that as we grow and scale the business uh a
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and scale the business uh a valuation point that I would
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valuation point that I would look at if I was going out to
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look at if I was going out to acquire businesses do they own
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acquire businesses do they own their own marketing list So
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their own marketing list So whether it’s top of the funnel
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whether it’s top of the funnel the bottom of the funnel we got
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the bottom of the funnel we got cold, warm and hot leads are we
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cold, warm and hot leads are we going out as a business owner
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going out as a business owner and owning those leads so if
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and owning those leads so if you’re going out through.
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you’re going out through. Facebook or Google or YouTube
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Facebook or Google or YouTube and trying to get these
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and trying to get these subscribers you don’t own that
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subscribers you don’t own that list. you’re you’re borrowing
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list. you’re you’re borrowing that list so when the algorithm
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that list so when the algorithm of Google ads um change or they
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of Google ads um change or they have the certified service
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have the certified service providers now or Facebook
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providers now or Facebook changes their algorithm, you
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changes their algorithm, you are at the mercy of that
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are at the mercy of that platform. So let’s say you’re
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platform. So let’s say you’re not into digital marketing yet
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not into digital marketing yet but uh you’re relying strictly
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but uh you’re relying strictly on referral um word of mouth
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on referral um word of mouth referral once again, that
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referral once again, that isn’t. You own you’re relying
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isn’t. You own you’re relying on people to refer you out so
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on people to refer you out so when you go to value a business
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when you go to value a business and add more uh value to it as
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and add more uh value to it as the business owner, I don’t
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the business owner, I don’t wanna be reliant on third
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wanna be reliant on third parties to go out and grow and
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parties to go out and grow and scale a business cuz that’s not
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scale a business cuz that’s not a book of um business or equity
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a book of um business or equity that I can literally say here
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that I can literally say here is this an asset. This comes
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is this an asset. This comes with the business so what you
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with the business so what you wanna do is create your own
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wanna do is create your own databases and there’s several
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databases and there’s several ways of doing this so
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ways of doing this so Callahan’s lawn care we went
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Callahan’s lawn care we went around literally with a notepad
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around literally with a notepad uh near the end of the. And
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uh near the end of the. And during the winter, we wrote
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during the winter, we wrote down the address of every lawn
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down the address of every lawn being commercially mowed you
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being commercially mowed you can tell in our market, which
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can tell in our market, which was being commercially modern,
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was being commercially modern, which wasn’t and in the winter
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which wasn’t and in the winter residential snow plow if they
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residential snow plow if they have piles of snow at the end
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have piles of snow at the end of the driveway, that was a
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of the driveway, that was a good indicator that was a
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good indicator that was a commercially plowed or
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commercially plowed or basically a professionally
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basically a professionally plowed driveway. So we went and
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plowed driveway. So we went and created a database of people
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created a database of people already using our services went
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already using our services went and measured online and create
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and measured online and create a property specific pricing and
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a property specific pricing and built a database of over 10000
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built a database of over 10000 people use. The services we
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people use. The services we sell in our local markets and
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sell in our local markets and now I’m not reliant on the
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now I’m not reliant on the algorithms of Google or
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algorithms of Google or Facebook. I have a database of
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Facebook. I have a database of customers that I can rely back
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customers that I can rely back on to grow and scale that
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on to grow and scale that business now if as we’re going
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business now if as we’re going in and we’re grabbing things
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in and we’re grabbing things off um your website or social
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off um your website or social media bots or lead magnet off
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media bots or lead magnet off your website. We’re also
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your website. We’re also capturing first name last name
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capturing first name last name email at a bare minimum, but
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email at a bare minimum, but usually the service address as
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usually the service address as well and we’re creating a
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well and we’re creating a database of people that can be
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database of people that can be marketed to. When Google
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marketed to. When Google changes or Facebook changes, we
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changes or Facebook changes, we still own that list, we’re not
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still own that list, we’re not borrowing it um through a
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borrowing it um through a pixel, they’re targeted
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pixel, they’re targeted audience cuz that Pixel the
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audience cuz that Pixel the target audience is only gonna
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target audience is only gonna be there for a certain amount
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be there for a certain amount of time now. if it’s on
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of time now. if it’s on Facebook, that’s probably gonna
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Facebook, that’s probably gonna be 180 days. you’re borrowing
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be 180 days. you’re borrowing that list of people have
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that list of people have interacted with your website or
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interacted with your website or social media. now what you need
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social media. now what you need to do is in those 180 days in
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to do is in those 180 days in my opinion is drive them to a
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my opinion is drive them to a landing page and get them to
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landing page and get them to give you their information so
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give you their information so we can build our own list and
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we can build our own list and on that list and then continue
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on that list and then continue to nurture and then up-sell.
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to nurture and then up-sell. But the value is in the list
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But the value is in the list that you own. it’s not in the
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that you own. it’s not in the value of the list that you’re
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value of the list that you’re borrowing from Facebook or
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borrowing from Facebook or Google. So the idea here is we
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Google. So the idea here is we wanna go in and create a
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wanna go in and create a process that we can sell
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process that we can sell quickly for reoccurring service
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quickly for reoccurring service and we wanna go up sell
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and we wanna go up sell additional reoccurring service
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additional reoccurring service to break up or add to that uh
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to break up or add to that uh and your recurring revenue or
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and your recurring revenue or um if you’re looking at monthly
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um if you’re looking at monthly Mr monthly recurring revenue
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Mr monthly recurring revenue and then we wanna build a list
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and then we wanna build a list have a list that we’re
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have a list that we’re borrowing for Facebook or
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borrowing for Facebook or YouTube or Google, but a list
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YouTube or Google, but a list that we own that can be part of
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that we own that can be part of the. Asset and that is um in my
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the. Asset and that is um in my opinion, one of the secrets to
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opinion, one of the secrets to building a true value in a
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building a true value in a service business. so when you
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service business. so when you go to sell your business or
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go to sell your business or you’re going to retire, you
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you’re going to retire, you have an asset, they’ve actually
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have an asset, they’ve actually sold and valued up and above
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sold and valued up and above just your broken down equipment
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just your broken down equipment uh Robert says. uh were those
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uh Robert says. uh were those lines um just an area where. Or
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lines um just an area where. Or those your lawns, or just the
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those your lawns, or just the lawns in area who are getting
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lawns in area who are getting lawn service by professionals.
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lawn service by professionals. so Robert what we did is these
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so Robert what we did is these were loans that we weren’t
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were loans that we weren’t servicing these were loans that
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servicing these were loans that are competitors were servicing,
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are competitors were servicing, so we drove through every
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so we drove through every neighborhood that we were in
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neighborhood that we were in and wrote down the addresses of
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and wrote down the addresses of every address that appeared to
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every address that appeared to be having commercial lawn
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be having commercial lawn mowing and then we went into
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mowing and then we went into the neighbors or the
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the neighbors or the neighborhoods around and in
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neighborhoods around and in between the areas that we’re
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between the areas that we’re already servicing and wrote
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already servicing and wrote down every law that look like
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down every law that look like with being commercially mowed
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with being commercially mowed and then we went back in the
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and then we went back in the winter. uh when it wasn’t
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winter. uh when it wasn’t snowing we. Wrote down the
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snowing we. Wrote down the address of every driveway that
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address of every driveway that had a pile of snow on it and we
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had a pile of snow on it and we sent out uh basically envelopes
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sent out uh basically envelopes and audited literally, said
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and audited literally, said Lawn mowing customer or snow
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Lawn mowing customer or snow plowing customer and those
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plowing customer and those things opened um we had huge
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things opened um we had huge response the first few years
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response the first few years before he started to deplete
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before he started to deplete that list um but that gave us a
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that list um but that gave us a database of people actually
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database of people actually using our service in our area.
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using our service in our area. We didn’t have to go out and
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We didn’t have to go out and cast that digital net and hope
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cast that digital net and hope they used our service or wanted
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they used our service or wanted to. we knew that these people
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to. we knew that these people are already engaging with the
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are already engaging with the professional. For that service,
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professional. For that service, so it allowed us to have
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so it allowed us to have significantly better uh return
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significantly better uh return on investment and uh far as an
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on investment and uh far as an acquisition, plan or retirement
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acquisition, plan or retirement plan. Now, we have a book of
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plan. Now, we have a book of business and a database of
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business and a database of people using the services there
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people using the services there and even if maybe the person
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and even if maybe the person going to buy your business
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going to buy your business doesn’t want that you can go
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doesn’t want that you can go out and resell that to another
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out and resell that to another competitor or business in the
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competitor or business in the area because that book of
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area because that book of database has significant value
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database has significant value and it doesn’t um it takes a
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and it doesn’t um it takes a while to get it. I mean it’s
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while to get it. I mean it’s not forever, but this was a
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not forever, but this was a process of survivorship series.
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process of survivorship series. We kept building in updating
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We kept building in updating that database and that allowed
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that database and that allowed us to go out and. And make our
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us to go out and. And make our marketing significantly more
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marketing significantly more efficient, um any other
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efficient, um any other questions while I’m here at
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questions while I’m here at Callahan’s corner, ask some
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Callahan’s corner, ask some questions We have some live
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questions We have some live right here on Facebook um uh
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right here on Facebook um uh business owner basically wrote
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business owner basically wrote and said. Hey, how do I go in
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and said. Hey, how do I go in and create more value to my
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and create more value to my business? if I wanna use that
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business? if I wanna use that as a retirement tool, if I ever
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as a retirement tool, if I ever wanna sell that business um and
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wanna sell that business um and that’s that reoccurring revenue
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that’s that reoccurring revenue and building a database in a
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and building a database in a list that you own and be able
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list that you own and be able to work at systematically and
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to work at systematically and selling that with your
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selling that with your acquisition or to somebody else
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acquisition or to somebody else afterwards. So Robert Great
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afterwards. So Robert Great question I appreciate hanging
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question I appreciate hanging in here um drop your questions
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in here um drop your questions any other questions. Around the
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any other questions. Around the service business, Callahan’s
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service business, Callahan’s corner, you ask the questions
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corner, you ask the questions when it’s live right here on
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when it’s live right here on Facebook. We’ll see you again