Ep 138 - Brian Peters: From Franchise Support to Chief Encouragement Officer

Brian Peters: If you get into that rat race, you better build the right car or you're going to get smoked badly. Most of my competition still runs that rat race to this day.

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Paul Giannamore: Fat Pat, welcome back. 

Patrick Baldwin: Fat Pat is back from fat camp. 

Paul Giannamore: How did it go? 

Patrick Baldwin: Awesome. The food was great, that's all that matters. 

Paul Giannamore: You certainly don't look thinner. 

Patrick Baldwin: I don't. In youth camp, they don't have a lot of healthy options for you. 

Paul Giannamore: That was a camp that you go to get fatter. 

Patrick Baldwin: That's right. You feel good about it because it's a nice Christian camp. Don't judge me. 

Paul Giannamore: That’s the job of the Christians at the camp, they judge. 

Patrick Baldwin: I am coming back to judge you and Seth. What the heck did you all do in my absence? I listened to that. 

Paul Giannamore: I did not. 

Patrick Baldwin: I heard it, “Who approved Fat Pat's time off?” 

Paul Giannamore: I don't know. It's a good question. 

Patrick Baldwin: Thanks, Paul. 

Paul Giannamore: We have a local Texan who's joining us, a local Wacoan joining us who comes from the HVAC space. Let's talk a little bit about Mr. Peters. 

Patrick Baldwin: Brian and I go way back. He owns Evergreen air conditioning here. I see his trucks around all the time, I happen to see one right before we recorded. I'm sure he is happy. It's 103 degrees right now in Waco. He is making hay while the sun is shining if you will. Have you heard that one before, Paul, or is that just a Texas thing? 

Paul Giannamore: I certainly have. 

Patrick Baldwin: He does great. The thing that's always interested me is where Evergreen started and how it focused on residential and how it came out of a residential commercial service business. I was intrigued and wanted to know. In pure admitted selfishness, I wanted to talk with Brian. 

Paul Giannamore: He was a cool guy to chat with. I appreciate you bringing him on. 

Patrick Baldwin: For sure. What do you say we step into The Boardroom with Brian Peters? 

Paul Giannamore: Let's do this, Patrick.

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Patrick Baldwin: Paul, I got another one for you. You got Brian Peters here. Brian and I go way back. He’s got a residential HVAC business here in Waco. Brian, I saw one of your vans so I know business is good. 

Brian Peters: Yes, it is good and it is overwhelming but, at the same time, it is what we live for. Every technician and every installer knows this is the hay-making season and it's going to be sun up to sundown and that's where we're at.

Patrick Baldwin: My watch says it's 105 degrees right now so congratulations. 

Brian Peters: I normally would say we don't want your air conditioner to break and we don't celebrate when it does but we want to be the company that you call when it does. We want to come and fix it. We want to be the hero. We want to come in and get it to work again and get you comfortable so you can sleep, hang out, or just watch TV and survive the heat wave.

Patrick Baldwin: Brian, no one saw that big old wink you gave us, that was good. 

Brian Peters: That's right. 

Patrick Baldwin: It's funny where Brian and I last intersected at least in person, we were trying to figure this out. You were going from one job to the other and later that day, it turns out I was going from one job to the other. That's a culmination of where I got into pest control, making a change here and you were also making a change leaving. You had years at The Dwyer Group, that's where you got back into HVAC. 

Brian Peters: I started an enterprise rent a car in Waco and then I left that to get into air conditioning and then did that for four years and then got at The Dwyer Group for three and that was around the home services, the trades, and specifically in air conditioning the last 2 of those 3 years. Transition to join Jesse and David, who you know in the restoration business, and then got out of that and got back into air conditioning and then have stayed in air conditioning since then. 

Patrick Baldwin: We're going to have another episode. We're going to get Blake Howard in here and talk about Blackhill Restoration. These enterprise circles don't go far, it gets a little inbred at times. 

Brian Peters: They tell you that when you take the job, you're going to learn how to run a small business. A lot of people learned a valuable lesson about running a small business even in the trades to make it customer-focused and build your culture about taking care of people. When you do that, it's not a no-brainer, it's not an absolutely everybody's going to make it, but you're going to have a good chance of passing up your competition when you take care of your customers. 

Paul Giannamore: When you were at The Dwyer Group, now it's more commonly known as Neighborly, Brian, what were you doing at Neighborly? 

Brian Peters: I spent a year selling franchises for Mr. Rooter. It wasn't a good fit for me. I didn't like to sit in the office and I didn't like to be on the phone. I was looking at getting out. I was starting to negotiate with the local Mr. Rooter in Waco to see if I could buy his company. I went to my bosses and told them that I wanted to resign and they obliged and let me resign there a couple of months later. It didn't work out for the Mr. Rooter in Waco so I was without a job. 

For six months, I did some traveling. My wife and I moved to Mongolia for three months and helped some missionary friends try to establish a baseline for the business that they were trying to start. We came back and then I went back to work for Aire Serv as a franchise consultant, what they called a Sure Start consultant at the time. Every single new person that was acquiring an Aire Serv was put into the Sure Start program for 3 to 6 months depending on how long they needed to be in the program to get the transition. 

Most people were buying a franchise that had owned a business. There were a few that had come in for Blue Sky and Greenfield but most people were transitioning Peters Air Conditioning into Aire Serv Heating and Air Conditioning. There was a roadmap on what we were implementing first and what we were doing. I did that. I also did all the in-home sales training for the technicians and the salespeople. 

Patrick Baldwin: Did you find that the Sure Start was a more rewarding position or less? 

Brian Peters: I will say this, I love people so I love to talk and I love to encourage people. I love to galvanize people together around a certain common goal. That was very fulfilling to see, “The goal here is you want to be an operational Aire Serv in the next three months. Here's what we need to start to work on. We need to get your advertising in play. We need to get your van wraps. We need to get your people. We need to get your uniforms.”

What I was most fulfilled while I was at The Dwyer Group was doing the training. I loved doing in-home sales training for the guys, teaching them how to ask the right questions and get the right answers, and then build the right solutions. I got to travel around to do that. I got to see results, got to ride along with guys, and got to see people sell their first, at the time, $10,000 change-outs. System replacements were a big deal. 

Today, you would say there were $20,000. You tip that iceberg and you go down and you say, “These guys have never sold a $10,000 change out.” They don't believe it exists in Northern Kentucky or Eastern Washington. Wherever they are, they will tell you, “You can't do it in my hometown because of all these reasons.” You go out there, you do the training, you do some ride-along, and then lo and behold, somebody buys a $10,000 or $12,000 full system replacement and everybody looks like, “You were right.” That was rewarding and fun to see the light bulb turn on for guys to offer the right solutions. 

Patrick Baldwin: I almost come from the back side of the story of Evergreen, your business, in which Bobby and I knew Stefan at Capstone. There were even times when Stefan would bring us in and show us scorecards and almost like dashboards and race cars on the wall and how they're measuring things and peeking behind the veil there. I remember one day, Stefan said, “We're commercial only now.” Stefan is one of the first people I knew when we moved to Waco. He lets us know, “We're focused on commercial.” You would turn down business, are you crazy? Sure enough, that's where your start was.  For now, I want to pick up there. You were there at Capstone when that decision was made. 

Brian Peters: The storyline starts back in 2003 and I was good friends with Rick Tullis, Stefan's business partner. Rick and I were in the same life group at church, played a lot of basketball together, and Rick offered me a position to come on board with him at a company called Waco Systems. Stefan and Rick started there as engineers at Waco Systems doing all that. I left in the meantime. In all of that, they started Capstone in 2005, 2006, 2007, or 2008, I don't know the exact dates that they started. 

When I left the restoration company, Rick called and said, “Would you come back and help us at Capstone to solidify our residential division?” I did that. During those two years, it was obvious that they were committed and good at industrial and commercial HVAC and plumbing now. They were not focused or cared about residential. 

I normally tell people, “If you can understand baseball, it doesn't mean that you can play cricket. If you can understand cricket, it doesn't mean that you can play baseball. both of them use a ball and a bat. They have completely separate rules. They have completely separate understandings of the game and the excellencies inside the game.” We had those conversations over about six months to a year period. The funny part about that was I was recommending that they shut down the residential division and that we do a slow process of shutting it down, taking care of the customers we had, then I would shut that down for them. 

We'd eventually transition any of the technicians that wanted to stay in the commercial and then I would give them another year or two, however long that would take, then I would move on to whatever was next. They came back and said, “Why don't you just buy this thing? Why don't you just pay us and take the phone number and we'll keep you in business? We'll pass you all the residential business that we ever get and you can go from there.” That's how I eventually ran out on my own. 

When we bought it, we renamed it Evergreen Heating and Cooling and that came out of a conversation with our 9-year-old. We were driving and we asked him, we said, “Do you have any ideas for the name of our company?” We went through all this stuff and he was looking out the window and said, “How about evergreen?” We thought, “Works for us.” There's some symbolism in there that we like to say we like to be evergreen. The leaves don't die, they stay green, they offer shade all year round, and they offer comfort. 

Most of the time, if you're in the mountains or you're around evergreen trees, there's a higher percentage chance that you feel comfortable. It doesn't mean that if you're being chased by an ax murderer and you're by some pine trees, I'm pretty sure you're probably scared. We normally emphasize that mountain feeling of getting away and feeling comfortable. What we would like to do as a company is to provide that for our customers.

Patrick Baldwin: It's unique. I could promise you, you are the only thing that's evergreen in Waco, Texas because there are no evergreens. 

Brian Peters: That's right. 

Patrick Baldwin: You're trying to kill off this residential business, which is funny, but you see Capstone's got this commercial competency. They do all the big commercial projects, definitely known for that. How does that go from, “Let's bury this thing,” to, “Brian, why don't you just take it over?” 

Brian Peters: At the time, I was not considering buying or starting my own business in the air conditioning industry because I am not a service technician and I never have been. When it comes down to it, if you call me today and I'm the only person at Evergreen, you and I are both in trouble for fixing your air conditioner or replacing it. I would have to sub that out. I'd have to hire another company to come and do all the work. 

For that reason alone, I thought, “There’s no reason that I should own a company that I can't do the work in.” Clearly, I've changed my mind or changed my tune along that but I do think that there was an honesty in that that I felt good about that I wasn't going to represent myself as an air conditioning technician. At the time, I was young enough not to realize I'm a business owner and I want to be a business owner, and those are two different roles. 

As I got in there, they brought it to me and said, “Come on, you can do this. You're already doing it day by day. This isn't that hard. You already have a customer base. You're already building the brand and you're already building the internals of this. We live in Waco, Texas, it's selling water in the desert or oxygen.” 

At this point, there's no real opportunity for this to collapse unless everything collapses and then we're all in trouble. It doesn't matter what I was doing with my life from my work. As I started to think about it, I was like, “We can do this.” They made me an offer that I couldn't refuse. They gave me every opportunity to get out and build this thing without a huge debt load. There was nothing that needed to get out there and build this company. 

Patrick Baldwin: I'd always wondered in the back of my head if Rick and Stefan had stayed on as silent partners. 

Brian Peters: No, there was a very clean break and it was a very clean cut. I bought their phone number, customer base, two vans, and two trucks. I ran what was called Department 300. They departmentalized their business at Capstone, it’s still departmentalized today. I ran this Department 300. Every employee that was attached to Department 300 came with me except one technician who left and started his own business. He was going to do that anyway. 

The day I told everybody what we were doing, he came to me and said, “I was going to leave on January 1st to start my own heating and cooling business. I apologize but I'm going to do it.” We've parted and that was great. He's still in business for himself. I still help him and he helps me. They did not stay on it as silent partners at all. They didn't have anything to do with the business. We shook hands on January 1st and it was done. We'd talk all the time on the phone or text but they were free to go focus on what they were good at and I was free to focus on what we were going to become good at.

Patrick Baldwin: What did that do for you? A business owner going back to when Evergreen started, I'm guessing you had a non-compete not to touch commercial. 

Brian Peters: I had it. It wasn't very long for non-compete. Obviously, Capstone had a pretty big flywheel going at the time in Waco. Rick was involved in Baylor, the Chamber of Commerce, and the school board. Rick was a well-known guy in the circles. Anytime a person would say, “Can Capstone come and take a look at our air conditioner?” He would say, “Yes, but it's not called Capstone, it's called Evergreen. Call Brian.” 

He didn't go into a long discussion of why or what the transaction was, it was, “We can take care of it. Brian will come and do it.” I didn't have the technical capabilities to try to compete in the commercial space or the industrial space. It's still to this day, we get phone calls, we just don't go, and we tell them, “We don't do that. We aren't going to come out there and look at the M&M Mars factory.” We tell them that, we tell them to call Capstone. The same goes years later. 

Patrick Baldwin: What does that do in terms of your focus and being a specialist in residential HVAC? 

Brian Peters: I love to talk about this, especially with people inside the trade business. It allowed us to focus on the most profitable sector of residential heating and cooling. If I could build a business, if the three of us are sitting around the campfire talking about building a business that makes money, we're going to go to discuss and then do the due diligence to go through the systems to go through, “What makes the most money here?” 

It's no secret in the residential air conditioning space that unit replacement, system replacement, change out, or whatever they call it is for sure 100% the most profitable side of your business. If we were to go, “We want to set up a residential change-out business or residential equipment service replacement business,” everybody in our industry would say, “Yeah, so do I.” You have to do all this other stuff to get that. My belief was you didn't have to do that. 

I kept seeing times have changed, we’re not back in the 1960s when people were calling the Maytag man. When you think of the Maytag man, you think, “The was the service guy.” Their marketing is that you don't even need the Maytag man because of your systems. In the ‘50s, ‘60s, ‘40s, or whatever, there was like one trusted professional in the market and you trusted them and they would come over and fix it on their time. They’d take their time, they were honest, and they were fair. 

All of a sudden, we started growing and the business starts going. Now, there are 15 air conditioning guys, there are 30, there are 60, and now there are 120. All these guys are out here muddying up the water. At the same time, most of our competition likes to focus on the competition. How they're going to build their business or grow it is by focusing on their competition, which we were saying, “That doesn't make any sense.” 

I learned that at AirServe, a lot of training classes, “I'm going to focus on the customer. I'm going to focus on what does the customer want. What are they looking for?” When they wake up in the middle of the night and their air conditioner is broken, they don't think about the 120 competitors of mine. They don't give it a thought. They think, “I'm uncomfortable. Who do I want to call?” If they don't know you and if they've never heard of you, they want to look on Google, and they want to see some reviews. They want to see something on that website and they want to attach, “That's a professional website. I can trust them.” We then go out there. 

Whether or not I installed that years ago in that new construction house doesn't ever come up. That's the one thing where we got rid of all new construction because it was the least amount of margin dollars and that's proven pretty much everywhere across the nation. If you get into that rat race, you better build the right car to race in that race or you're going to get smoked badly. Most of my competition still runs that rat race to this day, they're still trying to get that new construction stuff. 

After the harvest season, if you think about this where you drive by and look at a cornfield, that corn was planted, it comes up, and we harvest it, there's nothing in that field for 6 or 8 months. It's the same thing with air conditioners. When we're done changing out air conditioners, we're done. There's not another field coming up in a month. There's not like, “If we send out this postcard, maybe some people will want to change out the air conditioner.” That doesn't happen. 

Most of our competition goes out starving to death and they start to sell off their souls for 1%  to 2% gross profit. They think, “This is great,” because they keep their trucks going, and they keep their guys employed. The summer comes and here it's 112 degrees and we're getting 20, 30, or 40 calls a day. There's no possible way we could do all those calls. We get to sift through them, “We want that one. We don't want that one.” 

Those go down the chain to the competitors and the competitors go out there. They're excited to sell a job but then they can't do both if that makes sense. They've sold all this new construction work and they've got these two guys going out to do new construction work and then they sell a system and they sell it for 45% or 50% of what the top five companies are selling it for. Let's use round numbers. If we go sell it for $10,000, they're selling it for $4,000 to $6,000. They look up and now both customers are wanting them there on Thursday. 

You have your new construction guy, you've already promised, he's beating your head in against the wall, and he's throwing out the whole, “I give you X number of houses. I do this.” Now you're a slave to him and the customer is saying, “You got to get here.” You choose to not honor the customer like the customer should be honored because you already know you're not going to make any money on either of them. That's where most of these guys are just spending their tires. 

There's a handful of great competitors that all do what we do so that's where we know when we get that phone call, “We got these three bids.” “You got them from those two guys.” “Yeah, we're all going to be about the same.” When we say we're going to be there Thursday, we come out on Thursday and do it. I did a huge rabbit hole trail there but that's what it did to us to allow us to focus on that niche and build the business to be a system replacement professional. When people are going to spend $10.000, $15,000, $20,000, or $30,000 replacing an air conditioning system, we want to be the first company they think of. 

Patrick Baldwin: What you said exactly, I've seen locally in the pest control space, which is funny about the new construction. In termite pre-treat world, that's where we seek new construction. There was a business, they're no longer a business, in which he would turn down his recurring quarterly customers. If a home builder called and said, “I need you here to spray the slab,” he’d drop his schedule for the day and go spray the slab because he's a slave to both. That's funny what you said. Going back to gross profit margin, you're doing system replacements, and not doing new construction. You're doing more than just new systems, there's got to be service in there.

Brian Peters: Absolutely. Along that, you're doing service and maintenance. You want to focus obviously to get the guys professionally ready to be the installation company of choosing. You have to do service. You have to be able to fix air conditioning systems in people's homes and then do maintenance. Both of those, they're not loss leaders by any way, shape, or form, those are good core businesses that you can build off and that you can say, “I only need 4 good technicians, 2 good installation guys, and 2 journeymen that are learning that side of the business.” 

You can do $2 million or $3 million worth of revenue with those eight guys and you can do it well. You can manage all of those numbers. We never pass up work on customers that we know we want if that makes sense. We do some background checks. Google Earth is a pretty good background checker. We know neighborhoods we want to work in and we know neighborhoods that we don't want to work in. Every business should do that. You're selling a cheeseburger for $20 and McDonald's is down the street selling a cheeseburger for $1.99. You don't get mad at McDonald's. 

You look and say, “Who's going to buy my $20 cheeseburger.” You figure then out how to sell it. It's pretty easy to tell somebody that needs the $1.99 to head down the road. No harm, no foul. The same thing with us, if you're looking for us to come out there tomorrow night at midnight and take care of you and your family for $29.99, you got the wrong company. We love you but there's another company out there that'll do that. You'll learn that they won't do that and you'll call us either now or later and you'll eventually have to get somebody to fix it correctly.

Paul Giannamore: Brian, you guys are focused on the install component. When I think about HVAC, you have the install component and then you have the maintenance component. A lot of the different HVAC companies that I've seen over the years are attempting to sell maintenance plans to get some recurring revenue component. How do you guys look at that? 

Brian Peters: There are a few customers that think they need a maintenance contract on their air conditioning system. I'm never going to change that narrative. I didn't want to fight that narrative, “This is a good idea, you should change your air filters,” and go through the whole industry speak. I wanted to go to, “What you need to know is that you're going to be treated like we're your friend in the industry, like we're your family, and like we're your brother, your uncle, and your friend that owns an air conditioning company.” 

When you wake up and it's not working or you come home and there's water all over the carpet or the floor, you're going to call your friend. Part of that Evergreen Comfort Club is we're not going to charge you a diagnostic and we're not going to charge you to come out to your house when you call us and that's part of the Comfort Club. Call us and let us know if there's something wrong and we're going to come out and help you take care of it. 

We'll diagnose it “for free” because we're going to do that 9 times out of 10 anyway because we roll up the diagnostic charge with the repair. You're not paying us $75 or $100 to come out and then a repair. That Comfort Club has been the focus of our guys to say, “You want to be part of our preferred customers. When you call, you get put into that list that we will be there and we'll take care of it. You also get a 15% discount on some parts and supplies.” 

If we do put in the installation, the Comfort Club comes with some parts and labor guarantees that are longer than we would for a normal customer. The reason we want that is because if we go to sell Evergreen, I want to have as many Comfort Club customers as I possibly can. As a business, if I can turn around and go, “I have 2,000 units under contract. That means those 2,000, I should be the first call. It doesn't mean I'm always the first call but I should be on those 2,000 units.” We build that from a whole team that we want to take care of our Comfort Club members. 

Paul Giannamore: Comfort Club for an HVAC company is probably pretty similar to an Amazon Prime-type subscription where it's not particularly expensive but you're getting your package in two days. Unless you live in Puerto Rico, it takes you two weeks but nonetheless. Over the years, I've seen a lot of other resi and commercial services businesses that have done things similar in pest control. 

I have seen business owners try to do some price discrimination and say, “Fat Pat here has the typical residential pest control plan. Fat Pat, you're on this plan, you got a problem, you call us up, and we'll be out within 24 hours.” They'll charge a little bit more and say, “Brian, you're in Comfort Club, whatever you want to call it, it's the concierge service, you're paying more for the quarterly treatment but you're not waiting 24 hours.” If you've got a problem, you're in front of new appointments, you're in front of current clients, and you're at the top of the heap. Do you think there's a lot of room for other resi and commercial services businesses to do something like that?

Brian Peters: Absolutely. I have a pest control contract on my house and have for years. One of the things that my wife talks about often is she loves the fact that she can call them at any point and say, “I saw some spiders.” They'll say, “We'll come out and spray again,” or, “We'll reapply.” Maybe we call them an extra 2 to 3 times a year. I'm pretty sure I pay $65 to $70 for my monthly service. I say all that because I never think about my pest control or that's not something I think about nor do I discuss unless I'm talking about it with you guys. 

The same goes for air conditioning, plumbing, and all of that. When you look at this and you say, “There's a huge need for us.” The two maintenances that come with that a year would be $90 a visit and that's going to be your maintenance. We'll change your filter while we're there. We'll make sure that the system doesn't have any major problems. Getting people to do that has always been a struggle because people just don't think about their air conditioner unless it's broken. 

We do an email campaign and we send out a monthly update. We've had pretty good luck with people that have stayed on it and I'm sure they delete it immediately. Two to three months in the spring and 2 to 3 months in the fall, our headline is, “Make sure you've gotten your systems checked. If you're on the Comfort Club, you've already paid for it so it's free. Let us schedule to come out and go through it.”
Most people have more than one system that is on that club. Most people have 2, 3, to 4 units in their home and that's when it benefits us greatly. To answer your question, most trade services are owned by trade people. 

That person, let's just call him Jim. Jim owns an electric company, a plumbing company, or whatever, and he goes home and his wife says, “The garbage disposal isn't working.” Jim's first thought and only thought is, “I'm going to fix it.” When my wife says, “Brian, the garbage disposal isn't working,” my first and only thought is, “I have to call a plumber.” That's my first and only thought. I'm not going to go mess with that or I got to call her father or somebody else has to come and do this because I'm not going to do it. Eventually, I’ll figure it out, I'm sure I could. It's the fact that those are my customers so that's like, “Wait a second, those are the guys I want. I want those guys.” 

Paul Giannamore: I thought you were a hand model, that's why you didn't want to do that. 

Brian Peters: That's exactly why. I can't risk these things getting damaged. That's where most guys do this whole buildup of the Comfort Club is like, “I'm doing what I would normally do at my house. These idiots out here can't even change a filter.” You shouldn't be looking at it like, “We only survive because these “idiots” don't change their filters.” We don't want them to learn how to start changing their filters because we have a whole business to change filters. 

Paul Giannamore: Brian, you mentioned something a little bit earlier in the discussion when you were talking about thinking about your competition versus thinking about the customer. What's your process for thinking about the customer and what insights have you come up with?

Brian Peters: It's helped me all the way back when I got into the industry when I left Waco Systems and went to work for a company called Air Control out of Temple, Texas. They subscribed to a training coaching platform called Business Development Resources. There was a guy named Barry and Barry did a ton of training. I went to see him live and this was way before the internet or the internet may have just been coming out, there wasn't all this online stuff now. 

Barry was an expert trainer on, “Define your customer. Who's your target customer?” I went to Dwyer Group and they were heavy in, “Define your current local customer. Who is it?” They even went as far as to say, “Everybody loves Raymond,” I forget the character's name, his wife, but that was our target customer. She was married, she had a house, and she had a couple of air conditioners. Raymond wasn't going to fix anything. We define all that. 

Going all the way back and then bringing that forward into Evergreen. My wife runs the company. She's very involved in Evergreen, involved in the day-to-day, and involved in all of the things running this business. We are our own target customer, which gives us a distinct advantage. We're going to sell to ourselves. What do we want? Currently, we want somebody just to text us back, “I'll be there between 2:00 and 3:00.” 

When they are on their way, they text us. When they show up, they take care of it. They might even text us pictures or a video, “We fixed it. It was the blower wheel and this is what it looked like and it's $878 to repair it.” I give them a thumbs up or an approval and next thing you know, they're out to my house. I've never even been there. I've never met them. They fixed it and went on their way. Targeting that customer. 

Now I'm like, “That's what they want. I need to have the technology. I need to have my text apps. I need to have my videos. I need to have my software. I need to teach my guys.” This is what they want. They don't want us to show up and haggle over price. They don't want to write us a check and sign it. They want to Venmo us if they could, that's how they want to transaction the business. Building it that way. 

We determined that we would put a picture up and we did our training and talked about, “This is your target customer. She's at home. She's got kids. She's got a couple of air conditioning systems. Raymond is not coming home to fix this thing. She needs you to get out there. She wants you to take care of her home. She doesn't want to be best friends with you. She doesn't need all these other things from you.” 

Paul Giannamore: Is she irritating to her husband?

Brian Peters: Yes. We defined that and then I took that set-up and took that into the training when I went back into Capstone. When I got to Capstone, I want to say roundabout numbers, we were doing a $1 million. Department 300 was doing about $1 million or $2 million in revenue and $900,000 was in new construction. On day one, we cut new construction. We committed to finishing any job we were on but we were not taking new jobs. I went personally around all the builders. I knew 80% of them personally because I had built a big new construction portfolio when I was with air control. 

Through all the years, Dwyer figured out, “That's not the target customer that I want to be in.” It's a whole different race and I don't want to build that race car. We went down to, “What would that be?” About $400,000 in revenue, doubling almost the size of the portfolio of the new construction that you get rid of and doubling it in the maintenance service replacement revenue mark in 18 to 24 months at most. 

When I talk to people doing $2 million in new construction in Dallas and they're like, “There's no way. I can't survive without this.” You're going to do $4 million in residential replacement, service, and maintenance in two years. I can almost guarantee it. If you'll make these switches, you'll thank me later. Back to the whole defining our customers, figured out my wife and I are our own target customers, and that has helped us greatly. 

I went on to say 90% of the trade businesses are owned by a trade person. They're not going home to call me to fix the air conditioner, they're messing around with it. They're buying a motor on eBay or wherever and they're putting it in and they're bragging at the party about how they saved $800. Even though they may be rich, get out. There are still the guys that are like, “I fixed my own air conditioners.” You're like, “Why do I spend any time worried about those guys?” I'm not going to ever get their attention nor are they ever going to call me. If they do, they're never going to like me. They're going to say that I'm overpriced and whatever. I try to stay out of their hair and I don't want them in mine. 

When you get down to it, you start to target, “I want that neighborhood and I want that neighborhood.” There are so many businesses in Waco, Texas I couldn't possibly do all those neighborhoods. When I just stay in my lane and I start to pick off those customers, that's the exciting part of building the home service business.

Paul Giannamore: By identifying yourself and your wife as the target customer, you guys are the exact type of people that you want to go after in your business. Outside of the neighborhood that you live in, how else does it help to identify the attributes of the end user? I always hear people talking about that, “Do a customer avatar. Who is it? It's a 60-year-old guy.” Folks oftentimes don't talk it through its logical end. How else has that helped you? 

Brian Peters: Number one, I would say any of our marketing, our Facebook ads, our Google ads, our newsletter, our mailing, and our handouts from our technician all go through my wife's hands. She sees it, touches it, feels it, and can give you a thumbs up or thumbs down immediately. There's no magic touch. You’re not going to make air conditioning some wonderful amazing thing that everybody wants to put on Pinterest. 

People aren't taking pictures with their thermostats, they won't now and they aren't ever. You don't try those stupid tricks and you go, “I want to communicate the same way on all these platforms. I want to make sure, what do they respond to?” They want a trusted professional, someone that they can trust in their home with them there or without them there. That's where everything we do is going towards that. If I'm going to give you my gate code to my house or my door lock code, I need to trust you. Everything you do needs to speak to that. 

When you do that, it's phenomenal the amount of growth and the gross profit dollars that you can make. When we sit in the room and dissect the sales of the week or, “This guy told us to go fly a kite and he told us that he could get it done for $300 and we were charging him $1,000.” That messes with a lot of people's psyche. Nobody wants to feel like we're ripping people off. When you boil it down to it, you're like, “How much did the motor cost? We were putting in the OEM variable speed motor, it was $487.” 

What did your time cost? What did the van cost? You break it down for me, you're like, “We're not ripping anyone off.” What did it cost us to make sure that you were background checked and drug tested and you weren't going to steal anything and you weren't going to break anything? If you did break anything, we were going to replace it. You go through all that and people start to go, “We are the professionals.” We are professionals. 

To answer your question, having a wife that everything is going to pass through is our target customer. She will get so mad at our marketing company when they put out flaky crap that she's like, “That bothers me. We're not that company. We don't want that in our email. We don't want that picture there. We don't want this there.” No one cares. They just want the email as a reminder to change their filter or call us when the next time they wake up and their air conditioner is not working. 

Paul Giannamore: You're trying to establish trust in the mind of your potential customers. How is it that you can communicate that via your marketing collateral? 

Brian Peters: Our logo has stayed the same for eight of these. Two years in is when we redid it. It's very simple, it's just a logo, a wrench, a tree, and Evergreen Heating and Cooling. We don't stray much. We use our colors. All of our vans are green. We own that green truck in the market. There's not a whole lot of other green trucks in the market. You know, you identify, “Those guys are out there working, they're doing air conditioning.” 

We aren't going to make air conditioning sexy ever. No one is bragging at the resort that they own an air conditioning company, “This is not what they do.” We have the luxury of having Magnolia here in Waco, Texas and that has been a phenomenal journey to watch. Magnolia is pretty awesome. People come here and take pictures of themselves at these buildings. They do all this stuff with Chip and Joanna and all these things. 

No small trade business is ever going to even remotely come into that stratosphere. Why would you ever consider that? That's not what you're trying to do. Your Instagram post is not trying to get 1,000 likes or 10,000 likes. Your Instagram post is simply, “Remember us, we fix air conditioners. We spray for pests. The next thing you see a scorpion, we'll come and kill it.” In my mind, it's very simple. It’s communicating that over and over and over and not getting out of your lane. 

Patrick Baldwin: Brian, all those years ago, you were teaching these business owners what to do and how to run a business. What are the things that you never knew as a SureStart coordinator that you then learned once you owned your own business? 

Brian Peters: I had a hard learning curve on, I would maybe say, the fragility of my business. I would say that what I would teach people in the SureStart coordinating process is, “Everything that we're teaching you matters and you need to put it in play and you need to try to follow the order.” At the end of the day, you don't make a mountain out of a molehill. You don't have to freak out over the one customer who gets mad at you. 

You don't have to freak out over the one time you get beat on a bid. This is a long game. This is a long process. I go out on my own and it's like, “I'm going to go into full meltdown mode when the customer is mad at me,” or, I'm going to go into full crazy, like, “I can't believe we're getting beat. We need to lower our prices.” The fragility of my business, when I watched and looked at it is a double-edged sword. If you do treat your business that every customer matters, eventually, you have an awesome business. I mean that. 

You wake up and you're like, “I treated every single customer as if they didn't use me, I was going out of business.” That is amazing. It’s not healthy emotionally, not healthy for your people, and not healthy for your life. When you get it, I finally learned like, “I need to take some of the training that I used to do, put it in play, and work my way back towards not caring.” I used to say all the time to business owners, “How can you not care?” There's that balance, there's that fine line. 

You need to care about that customer that's upset with you because he thinks that you're ripping him off but you don't need to let him dictate your day. You need to go investigate that. If you're ripping him off, you do the right thing, you turn around, you go apologize, and you cut him a check. You do whatever you need to do. You make it right. This isn't the end of the world. He's not going to ruin your business because he put a one-star review on your Google. You have to realize that you can't lose a whole lot of sleep over that. 

You need to do the right thing but you can't move on. It took me a long time, 4 or 5 full years, to finally get that to go, “I can move on.” Now, over ten years in, I'm like, “I feel like I got a pretty good handle.” Teaching and training our guys is the most important thing. They need to get a good handle on that. It's okay when a customer is mad at you, just let them be mad and do the right thing. Listen to them, acknowledge them, do the right thing, and move on. 

Patrick Baldwin: Do you feel jaded? Being in the franchise world, this is the Mecca or at least the second Mecca of franchises. We've had Gary Findley as a guest on here, big in the curves, and heydays. You had two cents at Dwyer Group. At one point, selling franchises and then at another point supporting them. What is your take on the franchise industry from your perspective? 

Brian Peters: There are amazing franchise opportunities out there and then there are some opportunities out there that get masked as a franchise that maybe aren't the best opportunities for you. We all know the McDonald's story. If you were able to buy a McDonald's as a franchise and do all that, it's an amazing opportunity because people go to McDonald's, you're not doing anything to create that. It's already been created and they're going to go there. 

You're going to buy a trade business that's a franchise. I haven't seen that there is a demand from the customer anywhere. If you're buying an existing franchise, you're just buying an existing business. If you buy a franchise that was in Des Moines, Iowa and it had 3,000 customers going to this certain customer name and it was a franchise, that's great, it's a great buy. There's an easier way to do it than to pay a lifetime 7% or 10% or whatever the royalties are. There's an easier way to do it. 

There are people you can pay hundreds of thousands of dollars to for coaching that will get you to the same place. Eventually, you can stop paying them the hundreds of thousands of dollars. As a franchise, you're never going to stop paying them the royalties. If that comes up, is it worth it or not? To me, it's simple. In year ten, is that franchise still delivering the customer to your door? If they are, it's worth whatever royalty they charge you. 

There are great franchises that are worth every penny but if they're not, if you're doing all the work, and if you're spending $250,000 of your own money in marketing, and you're driving all of that, all of a sudden, you look up and you're like, “If I changed my name from this franchise name to just my last name, Peter's Air Conditioning, pretty sure that same $250,000 is going to get the exact same amount of customers to come to me.” 

Whatever you're paying them on the royalty side is probably a little heavy-handed. That's just me. I'm pretty sure I'll take a lot of bullets from some folks on that but there's a reason in the trades that franchises are difficult. You guys would tell me better than I would know about pest control. I don't know if Orkin does. Do they franchise? Is that a franchise model? 

Paul Giannamore: They do. They still have some in the US but they largely do it internationally. 

Brian Peters: If you think about termites and you went to 1,000 customers, in my opinion, Orkin is going to be number one, maybe I'm wrong. Most people know, when they see an Orkin truck, what it does, they're like, “They do termites.” That's what they think, or, “They do pest control.” There's a value there. There's a huge value to the franchisee who's paying the royalties for that. You're going to get a bunch of phone calls from this moneymaker. 

If there was a franchise out there that when people drove down the street and saw Evergreen Heating and Cooling and they’re like, “Those guys install some amazing air conditioners.” If that's what they thought, I could charge out the nose for my royalties. I'd be like, “I'm delivering you $20,000 a ticket. You can give me $1,000 for that. Charge $21,000. I'm selling these things like candy and all you're doing is installing them and taking the money.” 

That’s a long-winded answer to tell you that service trades franchises can work. I don't think they work as often as everyone would hope they do. They were probably going to go bankrupt anyway. Peter's Air Conditioning could have gone bankrupt over five years and I joined a franchise and went bankrupt over two. You're like, “Here's the quality of time. You got your three years back.” It was worth it. 

Patrick Baldwin: That makes sense. Thinking about what they are to our group, they're Neighborly now, a world-class organization in terms of training and service. Are there things that you took away from there that you implemented in Evergreen? 

Brian Peters: Absolutely. I said this at the time and it's even more true now, I believe that there's nothing new under the sun. I believe that there's not anyone coming out with some amazing customer service training that nobody has ever heard of. I'm like, “This is pretty basic stuff, it’s just that we don't block and tackle very well.” We need to know where does your left foot go? Where's your right foot go? Where does your hand go on this? 

All the things that are blocking and tackling in your business, what do you do when the phone rings? How do you answer it? Does it ring two times? Does it ring three times? The Dwyer Group Neighborly has excellent world-class frontline service. You can take all that information, you can parse it out, and you can put it into play. They didn't create it. They didn't write that stuff. There's no copy. It wasn't something they created and all of us are copying them. 

It's like, “It's probably wise to answer your phone within 2 or 3 rings.” Nobody can copyright that thought. Nobody can copyright, “Don't walk into your customer's homes with muddy shoes and wipe them on their carpet.” 99.9% of the time, that's going to be a bad thing. Of course, I took a ton of stuff that I implemented from there. I developed my own way of presenting that to my guys. Some of it is close to what they do and some of it is not. 

If you went and came through and pulled my customer service manual, it's going to look similar to everyone. There are 5 to 10 different other coaching companies that would say I plagiarized them. I can say the same thing about my deal, I'd be like, “You plagiarized me.” You said, “Thank you for calling Evergreen. This is Brian. How can I help you?” I learned that at Enterprise. We're all trading trade secrets, it's just that people aren't doing them. 

I think about it in the sense I love college football and you watch Baylor football. I live in Waco. I'm close to the Baylor program so I watched them. In 2021, they go 12 and 2, win the Big 12, and have the number one rushing attack. I don't know the country but it was up there. In 2022, they returned most of the same exact offensive line and they don't have it. You're going to ask the question, “What happened?” 

There are a ton of variables but what if it was they just simply didn't put their left foot where it was supposed to be every time? That's very simple. What if you didn't answer the phone for two months until the sixth ring, I can probably tell you that you lost $100,000 worth of revenue. I'm down here. This is all blocking and tackling. This is simple stuff. If you don't keep coaching it every time, every day, every week, every month, and every quarter, you're going to find yourself like, “We used to have a good offensive attack and now we don't.” The market didn't change, you did. You can change back and start capturing business again. 

Patrick Baldwin: Brian, what interests me and I give you crap about it was you're not in the office 5 days a week and 8 hours a day. Good for you. Don't take my crap like that. How did you find yourself where you were able to work yourself out of being stuck in the office and tied to the job all the time? 

Brian Peters: I love to talk about this as well. At some point, I started to dive into personality, strengths finders, identity, personality testing, and all that. I dove into that probably mid-2000s. You go to the Dwyer Group and they use the DiSC profile. In Capstone, we use StrengthFinders. Right now, I'm working with Working Genius, which is Patrick Lencioni's company. I’m trying to figure out, like, “Who am I? Where do I get the most joy at work? Where do I get drained at work? Where do my batteries get drained and where do I get recharged?” That's how I would answer this question. 

I figured out a long time ago that I love to come in and do the rah-rah and encourage people and excite them. I don't like to do the work. I know that sounds funny but I don't want to follow through on the sales call. I don't want to go out there and look at it again. I get my batteries drained so I started figuring out, “What if I didn't have to do that? What if I got people to do that? What if I put into play the whole system that did this?” 

I wish I was smart enough to tell you that I did that on my own, I didn't. That is a benefit of being married to my wife. We've been married for over 24 years. She started diving in. She's an accountant by study and trade. She's a CPA so she's got all that knowledge, which is amazing and I don't want to downplay that, that's pretty impressive knowledge to take into a small business. She started to say, “Let's put some real processes in. You need to get out of this. You need to do that. You need to not do this. We don't have the money to hire a salesman so you still have to be the salesman until we can move it up to where our technicians can sell or we hire another salesman. It's our choice.” 

All of that to say, I started to learn, “I like this part. I will do this part.” Dwyer Group has a thing and I don't know what they call it now but it used to be called Design Your Life, it was a whole four-hour process. I was a trainer up there talking, “Write down what you want to do this year or this month, whatever your goals and your plans.” A lot of goal setting. 

I don't know if you know all this but The Dwyer Group is heavily connected to the Paul Myers crew. Paul Myers is huge about goal setting and you can do it. Their businesses, the profiles international guys came in and there’s this huge circle of influence over the ‘60s, ‘70s, ’80, and ‘90s, and now it's the 2000s and the 2020s. My belief is, “I designed it. I wrote it down.” I wasn't smart enough to implement it, I needed other people, my wife and others, to help me parse out. If you do this and this, you can do that. 

When I started making decisions, “Do you want to make $1 million a year? If that's what you want to do, you have to do this, this, and this. If you don't want to do this, this, and this, you're probably only going to make $400, 000 a year.” When you start to make those decisions, every human needs that decision because most of us go to, “You should make as much money as you can because that's a success.” That's a blind and lobbed-out grenade. “If you make a lot of money, you're successful.” 

I would contend that's not true. I know a lot of people who've made a lot of money and they don't feel successful. They have a lot of money, don't get me wrong. To have a lot of money is better than to not have any money. I'm not going to argue all those points. I am going to say there are dudes out there making $10 million a year who are lost as a goose in a hailstorm because they don't know which way is up. They're like, “I make a lot of money and I have everything I've ever wanted times 100 but I don't know what I'm doing. I don't have my purpose.” You find your purpose and your money. 

It's all a balance, you're pulling all this in together over the next 5, 10, 15 years, and then you build it out and you go, “For me, it's valuable to not have to work every day.” I didn't want to have to come to the office. I didn't want you to call me. When your air conditioner breaks, you can text me, and I'm just going to pass you off to the people who take care of it. I'm not going to say, “I'll be over there at 3:00 and look at it and climb up in the attic and fix it.” You don't want that because I can't do it but I didn't want to do that anyway if that makes sense. 

Patrick Baldwin: I love it. It sounds like you intentionally never went the trades route. I guess there's some licensing that you just decided, “I'm never going that way. 

Brian Peters: I know I have my license. 

Patrick Baldwin: You are somewhat qualified.

Brian Peters: Yeah, I am. I'm more qualified than I'm telling you. I'm not telling you that so you don't call me to come look at it. I am licensed. I'm a licensed contractor in the state of Texas. I've done all the work. I can fix your air conditioner if I had to. 

Patrick Baldwin: Did you do that to train and grow your employees or did you do that to de-risk your business? Why did you make that decision? 

Brian Peters: De-risk my business. I didn't get my license until maybe three years ago so seven years in the business without my license. I always had an employee that had it. The first couple of years, there was a guy who came in once a week and I paid him for his licensing expertise. After that, it was a guy who worked here that was a service manager and then I got mine. That's to de-risk it just because we are regulated by the Texas Department of Licensing and Registration. 

Patrick Baldwin: Our friends at TDLR. 

Brian Peters: Hopefully, they're not reading. 

Patrick Baldwin: The funny thing is when we spoke a few weeks ago, we were trying to figure out like, “Which expo did we end up reconnecting at? Which home show was it? Was it ‘08 or was it 2010?” All this stuff. Over the last fifteen years I've been in pest control, I brought you in because I'm wanting to know more about HVAC and Paul and especially the residential and the focus and all that. You're like,
“Tell me about pest control.” What's brewing there? You've got extra time on your hands. 

Brian Peters: Two things that I've been looking at are I believe that my business is repeatable and I believe that it's scalable. Because of the TDLR, if I go to Austin, if I go to Temple, or whatever, if I establish another office, I have to have a license holder so I have to go get a partner. When you look at that, I can do 1 of 2 things in this industry for air conditioning, to do that, if you have your license, you had a plan to get your license. Does that make sense? 

You didn't accidentally just show up with your license. Convincing that person, “I promise you, you're going to not only make more money but you're going to be happier. Your way of life is going to be much better.” I've got to go through the whole design-your-life process, which might take five years. That might take five years for them to figure out, “You're right, let's do this.” I've planted the seeds, I've continued to water those, and I've got a few relationships that are moving on five years that I'm like, “When you're ready, let's do this. We'll launch Evergreen Austin. You'll sit in that licensed seat. Here's what I foresee happening.” That's been a thought. 

I then started thinking, “The houses we go in, plumbing, electricity, pest control, and all that, why can't I find that young guy that wants to be the pest control guy and teach him, ‘I've got access to 2,000 houses.’” I'm not saying that all 2,000 will switch to me the day I start Evergreen Pest Control but I'd like to think 800 of them would. I'm proud enough of who we are that I would say these people trust us explicitly. 

We go to their houses at Christmas and we go to their ranches and they're not there. They trust us and if I told them, “I'm going to take care of your pest control needs at your house,” you got to trust the professional. We grab those customers immediately and then build on them as any other normal business would do it. That's when it perked my interest. 

It's funny because when we reached out, I had forgotten that's what you were doing. I was like, “This might work out. If I'm going to create this business and I've got incoming phone calls, the incoming phone call that I'm taking is, “There's something wrong with my house.” That something could be air conditioning, that something could be plumbing, and that something could be the grass is too long. I could get into lawn care. 

When you're taking that incoming call or incoming text, it’s, “Something's wrong,” and then I'm going, “I can fix it. Your garage door is broken, I fix garage doors.” It’s finding the right people that want to sign up for that. If you're in this long-term business, you know everybody can do it better. That ego gets in the way to where these guys would rather work a hundred hours a week and make $128,000 than work 50 hours a week and make $200,000 even though they're not the owner. It makes zero sense. Eventually, I'm going to find the right guys and the right path. 

Patrick Baldwin: You could stay with your current license in Waco and you could expand, you could do new construction, you could do commercial, you could do more repair, or whatever that is. You've already figured it out, it sounds like you don't want to go to Temple with Evergreen. You want to be in Waco and add other residential services. What got you there? 

Brian Peters: It's all about the right people. If we found the right person to go to Temple, North Austin, or whatever, I'd do it tomorrow. I would be like, “This is great. Let's do this.” I could tell you that I'm going to open up Evergreen, Austin. The truth is I'm going to open up Evergreen, Round Rock, East of 35 from this street to that street. That's what I'm opening. To say I can do all of Austin is ridiculous and dumb. 

Finding that guy that could be like, “What if I have fifteen of those guys?” What if you could franchise this model without it being an actual franchise to say, “We're going to build this brand that when people's air conditioners break, they call Evergreen.” At least for a quote, there's that market out there. That has just been proven difficult to find those people. I went through all the industries and I was like, “Pest control feels like the least risk.” 

If I'm plumbing and I flood that $3 million house, it's going to hurt. If I forget to spray your back bedroom and there's a scorpion in there next week, I come back and spray it. You can do some damage, you could drive over and you could kill somebody's cat, you can hit their mailbox, and you can do all that stuff. In the air conditioning, we're in a lot of closets and a lot of attics and we can do some damage and we can leak, we can create water. With pest control, you can screw up, I'm sure, but it feels like the least amount of risk long-term. With electricity, you can burn some houses down. That ends your business real quick or somebody gets shocked. 

Patrick Baldwin: You bought a property downtown. You got a mastermind group going. What's the idea there? 

Brian Peters: That's the next thing and that's where I probably don't have a whole lot of time to figure it out. 

Patrick Baldwin: I'm distracting you from doing pest control. What's this other thing? 

Brian Peters: We bought a building downtown. I love to talk about how we got into the business and I normally tell people it came down to two things, listening and obeying. I listened. Most people would say I'm a spiritual or religious man. I say that I love Jesus and I try to follow him. I try to ask him what to do. I feel like He speaks through the Holy Spirit and through His word and I try to obey whatever's next, like, “What do I do here? What do I do there?” I felt like I was supposed to buy this building. My wife led that charge. 

Several years in, I was working all the time. I didn't like this business. I was like, “I want out of this thing.” My wife was like, “Don't be an idiot.” I was like, “I cannot be an idiot. I am an idiot. You take the wheel.” We bought this building, which she spearheaded. We bought this building for $130, 000. It's 16,000 square feet under a warehouse. It was like a homeless shelter. We spent $15,000 cleaning it up, pushing crap in the dumpsters. 

We remodeled the front part and spent about $350,000 on the front part of the remodel and we have 11,000 square feet in warehouse and the front part is 4,000 square feet or whatever that comes out to. We get our first tax assessment, no big deal. Our second tax assessment, we're three blocks from the silos, and I get the second one and I'm like, “Wait a second, our appraisal is $900,000 and our property taxes are $15,000. This is crazy. What did we do?” It started turning into, “I won the lottery.” 

We could sell it but it's not something that we've entertained. We feel like Waco is a pretty cool destination right now. On top of that, we feel like, through my years at The Dwyer Group, there are thousands of contractors out there starving and needing a cup of cold water. If we can offer that through the training of what we named the company, Work Huddle, and create the small group mentality of trying to put people together that are doing relatively similar revenues. 

You don't want to put a guy that's doing $500,000 in revenue with the dude that's doing $5 million. You do want to put the guy doing 5 and 7 together and they're going to challenge and encourage one another. We're building out the rest of the 12,000 square feet to do a training facility. I'm pretty sure we'll quickly outgrow that, that's what's my thought as I launch this out and talk to different people in the industry. It's a no-brainer. 

Everyone I talk to is, “How'd you do that?” “What do you mean?” “What does that look like?” I'm not talking about getting stupid rich off of one client. I'm not going out there coaching these guys saying, “it's $60,000 for me to coach you this year.” I'm saying, “Can you afford $500 per month? It's $6,000. If you don't like it, you can leave after 30 days. If you hate it, I'll give you $500 back and we'll shake hands and high-five.” 

You're not going to hate it cause you're going to be in a group with guys that you're going to be like, “I don't know what I'm doing.” Somebody in there is going to say, “I used to do that too and it doesn't work. Quit sending that out. Quit giving Angie's list.” Sorry if you guys are sponsored by Angi's list. Quit giving Angie's list $5,000 a month, they're giving you nothing. Maybe they are giving you something and this is how you get some. 

There are those trade secrets that you don't have to go to a franchise to pull out. I'd pay $500 to be a part of that group. To go back to what I had said earlier, I'm going to build a training group that I would join just like I would build an air conditioning company that I would hire. If I do that, it's going to be a no-brainer. 

We're going to end up with 1,000 different companies that are all coming through here. Sooner or later, I'm going to probably design it around most of the meetings and training are going to be around things I love, which most people do. We'll go skiing in the winter and we'll go to the beach in the summer. We'll go to baseball and football games. We'll go smoke cigars and on the bourbon tour. You get a lot of people that want to do those things and it's a business expense, illegally. 

Patrick Baldwin: You've looked at all these different residential service businesses. Is there one that you would say, “I would never do that. I hate that business model.” 

Brian Peters: Not at all. All of them are similar. I go way back to the beginning. Baseball and cricket both use a ball and a bat. Residential and commercial and industrial are different animals in every industry. They might be more similar in some cases than others but if you're an electrician and you do both residential and commercial, you're losing margin dollars on one of them. You can't argue with it when you get down to parse it out. 

When your guy is mainly a commercial tech, let him be a commercial tech. Don't send him to Mrs. Lewis's house. He's going to offer Ms. Lewis the $4,000 solution when she would have bought the $12,000 solution. If you do that one time, you've lost $8,000 of revenue dollars and you do it probably every day, to be honest. Your technician is costing you $10,000 a week in revenue dollars. You're not going to propose to the secretary or the administrative assistant or the facilities director. They don't care. It's not their money. They just want it to work. That's where the commercial technician's going to go make it work. Charge them whatever. 

It's their house, “Did you ever think about adding this? Did you ever think about adding a freshwater tank? Did you ever want to collect your rainwater?” There are things you can do that people would never even think of. My point is we drive electric cars and people put $100,000 into a vehicle and then put a charging station in the garage and nobody thinks anything about it. The same thing to you want to cool your house down to 65 degrees, we can do it, it's going to be $100,000 to do it but we can do it. 

Patrick Baldwin: Don't judge me. 

Brian Peters: That's right, don't judge. That's how I sleep. I'm a unique case in owning a trade business. I got all my experience out with others and learned from them. My biggest mistake is not fair. I had twelve years to learn everybody else's. I made a bunch of mistakes for other people. If you said, “What's your biggest mistake?” I'd be like, “I bought a truck and the engine blew up,” and whatever, just bad luck. 

I can tell you I went out and sold $2 million worth of new construction work over eighteen months and probably lost $200,000. That would have flattened most companies had it not been that the company was a $23 million dollar a year revenue business that ate it and moved on. By the time we did the numbers, we were like, “I’m pretty sure we lost $200,000.” I couldn't do that today. I couldn't have done that at Evergreen. I would have been out of business. 

Patrick Baldwin: I'm curious as you cleave business like Capstone, “We're not going to do new construction.” You knew that going into Evergreen. Are there things that you did at Evergreen going in the first few years, you said, “We're going to stop doing this.” 

Brian Peters: For sure. Two different stories. One is we got into a very big property management group that a couple of good buddies owned and it had exploded around Baylor and they came to me and they were like, “We're paying out $300,00 or $400,000 in maintenance to air conditioning.” They had it categorized in their QuickBooks files that they came to me, “Don't you want this work?” I was like, “That's a lot of money. What if I hired a technician that all he did was live down here and work at Baylor Apartments?” We tried that and it was not a nightmare. 

I wouldn't say it was a nightmare but it was not a good partnership for me and it wasn't a good partnership for them. We realized it after about ten months, went to them, and said, “We're going to get out.” They were thankful. They probably paid us $500,000. They felt like they had overpaid. Although they were tracking numbers that were based on owning 1,000 thousand units versus owning 2,000 units. I was like, “You guys can't say, ‘We only spent $300,000 this year and now we spent $500,000’ when you own twice as many properties.” It wasn't good for us. Our guys hated it. Everything else, we quit that. 

We cleaved out $500,000 worth of revenue. All of a sudden, we grow $800,000 the next year. I like to say the numbers because you got all this training and these people talk about percentages and you're like, “What does that mean?” Most of us are dummies that do this for a living. How To Build A Business for Dummies, we're reading that book. When you go, “I lost $500,000 in revenue and I gained $800,000,” that's awesome. 

I have a little cheat sheet on my quick check we do a month. The number that I want to look at is the net profit. I want to go, “I went from 7% to 12%, it's pretty good. I don't care about the top. The top is just the top. You can go sell anything you want. It's about keeping that money to call yourself a business. We started doing business with this company that is exploding and we start by doing small projects that we know we can handle, “We need to replace this air handler.” “We got it.” We need to replace this system.” “We got it.” “We need to do this entire house.” “We got it.” We need to do this old barn and we're going to turn it into a family center.” “We might have it.” 

We didn't want to say no because we were doing it all. This thing goes from, “We're going to buy this huge warehouse. We're going to do this thing.” I started getting in the water I can't swim in, “I can't do this. This is going to be bad. We're bringing in some friends of mine from the industry. We’re bringing in Capstone on some projects. We're bringing in so and so.” We're just getting run-ragged. Again, $800,000 of revenue and you're looking down and you're going, “This is a monster.” 

When you take it out and you set it on its side and you go through it and you dig all the way down and you're like, “I'm fairly certain I lost money.” There's a margin in there that maybe shows, “I made 10%.” When you're like, “The margin here is plus or minus 20%.” I could have lost 10% here. When you do all that, then you go and you say, “Our guys were quitting.” We had technicians and installers quitting over this and they were like, “I can't deal with it,” every time I go over there. 

Here's why, they would go and do something and then it would get changed three times. They do something on Friday, they'd come in on Monday and go back to the job, and somebody would have torn their ductwork out, somebody would have moved the register or pulled it down and said, “We don't want it here. We wanted over there.” For the longest time, I was like, “I'm paying you by the hour. Who cares?” 

To them, they are professionals. They were like, “I did it and did it right. I asked you three times before, where did you want it? You told me there and I put it there. I come and you've taken my work and just cut it and you just made a mess of it.” When I started realizing that, I lost 2 or 3 good guys over the whole deal. I went through a year of all this turmoil. 

Finally, fifteen months before we exited this partnership, my wife said, “We need to get out of this partnership.” She said it non-emotionally. She said, “We need to get out of this partnership and there's a path to solving it fairly for everybody. We need to start down it.” I was so emotional. I'm not too proud to tell you that probably my biggest mistake, Paul, is that I'm a lot emotional. I tied myself to this thing. It was my worth and value, “I'm doing all this revenue. Look at me, I got this big company.” 

I started going down this, “I got to unwind all this. I got to cut the cords on all this stuff that I thought I built on this business.” The easiest way was literally to stop. On Monday, we did work for this company. On Tuesday, we didn’t. That was the easiest way. We'll do any warranty you want us to do or finish any project we're on but from here forth, we are no longer your air conditioning company. We did that. We doubled our revenue over the next eighteen months. 

You look at this and you're like, “How did that even work?” I can't tell you where those customers came from. I can't tell you by name. I can't tell you by this neighborhood. We didn't do anything different. We focused on what we really were good at and that was repair, replacement, and maintenance in the home. We don't do apartments. We don't do condos. We don't do rental properties. We don't do big buildings. We don't do barns that need to be a barn. We just don't do it. 

We're fine with saying, “We don't do that.” We don't know how to make money doing it. Most people are like, “It's all about money.” It is. We run a business. It is all about making money. That's not because we love money and we're greedy. It doesn't make any sense to not make money for a business. If you want me to start a ministry, I can consider it, I just need a lot of funders. They need to donate to this business to give you free air conditioning, which most people get, “There's no one that's going to do that.” You're like, “Correct, that's why it's business.” 

I would say that's the number one biggest mistake. The number one thing I learned over the years that I would love to teach inside Work Huddle is, “You're going to be okay, rip the bandaid off, and let's make a strategy to get you out of this mess.” Once I got out of the mess, now I look back and I'm like, “These last five years have been the best five years we've ever had. Freed up to grow, to build, and to do all the things we want to do. Our people are happy. People love to work here.” 

Of course, you have all the normal stuff. I have people that quit and yell at us and throw things and do whatever but it's not on the normal. That's a good way to end it. For me, this business has been great if you will. Don't get out of your lane, figure out what you're good at. Once you're good at it, the passion follows it. Some people say, “Passion, do what you love. You'll never work a day in your life.” I'm always like, “You can also love what you do.” You can do it the backward way. You can do what you do and love it and then you can learn to love it and then it all works out. The bottom line principle is if you're not doing something that fills you up and charges your batteries, you're going to take some lumps. 

Paul Giannamore: Success begets success. You can end up falling in love with something that you're ultimately good at, whether or not you had a passion for it to begin with. 

Patrick Baldwin: I’m Curious about your LinkedIn, Brian, you've got Chief Encouragement Officer. What encourages you though or who? 

Brian Peters: I do a ton of reading. I'm going to subscribe to the old adage. If you're not reading, you're dying, in my opinion. Maybe reading and listening now with podcasts or watching YouTube. Patrick Lencioni has been a favorite of mine for a long time. I’m listening to him and reading his stuff talking about team players and team involvement. You got Jim Collins’ Good to Great, I go back and reread his stuff. I go back and look at, “How did they do that?” I’m looking at my bookshelf, I got all kinds of Donald Miller and the story brand stuff. I enjoy his stuff. 

There are guys out there that I just enjoy going back picking up reading a chapter. Going to the CEO, I made that joke one day about all I do is come in and encourage guys like, “You can do this. You're built for this. You can do this. You're awesome.” I do a lot of sports analogies cause I love sports but if you built a sports team, you wouldn't want your left fielder to pitch. You wouldn't want your pitcher to catch. You wouldn't want your catcher to play third. 

If you had a football team, you wouldn't want your wide receiver playing center. You wouldn't want your center playing running back. These guys are built into these positions to where, “You're the best install tech we got.” Let's go after encouraging that. Let's encourage the office, “You answer the phone amazingly.” I subscribe to The Power of Words. You can think it all you want, if you're not saying it, they don't know it. 

Somebody quits and you think, “They were good at that.” You never told them. Go tell them every day. They're not going to work any less hard for you if they like you. They're not going to work any less hard for you if they're encouraged and they like their job. They're going to do the opposite. Go pick out something, the whole compliment sandwich, everybody likes to subscribe to management. You can go tell them things that you like about them and tell them the things they need to improve. That's for reviews. 

I do this often and it's funny. Turn around and walk back into the office and go, “I noticed how you just answered the phone, that is amazing that you told that customer this.” They're like, “He did listen to that.” You'll come back and you're like, “When you filled out that form, the fact that you didn't scratch all that, you went and got another form, and you put down this because that was important. I wanted that to get into the computer. I thank you for doing that.” They look at you like, “How'd you notice that?” The same way you guys don't have any hair but If I said, “I liked the way you comb your hair,” and I meant it genuinely, it means something. They go home and the next day or two, they're combing their hair thinking, “Brian likes the way I comb my hair.” 

Paul Giannamore: What about the way we shave our heads? 

Brian Peters: I do like the way you shave your head. 

Paul Giannamore: Very good. 

Brian Peters: The Harry's razor looks sharp, Pat. 

Patrick Baldwin: This doesn't feel genuine anymore. 

Brian Peters: That is the trick. It does need to be genuine. You can't flippantly say it but if you mean it, the Chief encouragement Officer, and I do, I love people, I want them to succeed. If it's not with us, I want them to succeed wherever they go and pouring into them. I feel like it always comes back a hundredfold and it was good principle to live by.

Paul Giannamore: Brian, what I wanted to say is I appreciate you joining us in The Boardroom. You've been an extremely interesting guest and what you're doing is cool. I love the way that you've balanced all sorts of things in your life. I'm super interested to see how this new project of yours is going to take off with regard to the group. What did you call it? 

Brian Peters: Work Huddle. 

Paul Giannamore: Patrick and I will be tracking that closely. 

Brian Peters: I'm excited. It's been burning for over three years. I feel like it's probably going to get launched here this fall of 2023. It's my passion to help people and I think that it will be well-received. In air conditioning alone, I did some research, there are 480,000 licensed contractors in the United States. I'm thinking 50% are interested. I don't know that 50% would pay but I do know 50% are dying on the vine. 

Patrick Baldwin: Thanks, Brian. Next time you swing through here, pick me up and we'll go smoke a cigar. 

Brian Peters: I’m going to take you out to TJ's Lounge. Paul, you ever end up in Waco, make sure we connect. 

Paul Giannamore: Absolutely. I'll return one of these days. I liked Helberg quite a bit. I'd like to go back there. 

Brian Peters: Helberg is amazing. 

Patrick Baldwin: Brian, you've got your places right across the street. 

Brian Peters: It is right down the road. Thank you for having me. I hope to catch you soon. Thanks again. 

Paul Giannamore: Thanks, Brian. 

Patrick Baldwin: Thanks, Brian.

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Paul Giannamore: Patrick, one of the things that I liked that Brian said is not so much focusing on his competition but focusing on his customers going to bed at night, not thinking about what the competition is doing, but thinking about what his customers value. Oftentimes, in a competitive market economy, people think about being at war with their competition but they're not, they're trying to create value for their customers. I appreciated that comment. 

Patrick Baldwin: Easy to say, hard to do. Hats off. He lives it. I can personally say that we thought more about the other pest control companies in Waco than we did about what's driving our customers to pick up the phone and choose us. It was always, “Why would they choose us over our competitor?” It wasn't just a one-to-one relationship with our prospect. Shame on me, Paul. Guilty as charged. 

Paul Giannamore: I also like his philosophy on advertising, it's not gimmicky. He's trying to get the professional image out there, which is an important aspect of a home services business.

Patrick Baldwin: Which was interesting about him and his wife like in the shoes of the prospect because he's not self admittedly not a tradesman. They're effectively selling themselves. It doesn't make it easier. 

Paul Giannamore: You're effectively selling to yourself. You're not particularly mechanical. Maybe you do change ACs. Do you do your own pest control?

Patrick Baldwin: I do my own pest control. 

Paul Giannamore: You do? 

Patrick Baldwin: I do. Is that okay? 

Paul Giannamore: Perhaps that's not so surprising. 

Patrick Baldwin: I have done an honest day's work, Paul. 

Paul Giannamore: Is that a violation of your non-compete? 

Patrick Baldwin: That is not, I checked it. I had to read my non-compete, the asset purchase agreement. I've got IntoCare in the backyard, it does a good job. Shout out to IntoCare and y'all can all judge all the other systems however you want, I don't care. I do my own pest control. I did have a plumber at my house so I know where my expertise lies. 

Paul Giannamore: What was your issue? 

Patrick Baldwin: Slow drains. I have four slow drains. I got that cleared up. Getting back to Brian, I like the Work Huddle thing. I'm interested. I want to see where that goes and who's bringing in and how they meet and also how he's worked himself out of the day-to-day. Good for him. He's built a team that can self-manage and he can come in there and be the cheerleader and that's what he's good at, that's what drives him. He talked about personality profiles. Brian, keep up the great work. Thank you for joining us in The Boardroom. 

Paul Giannamore: Brian's just a good dude too. You can tell that he cares. He seems to live out his philosophy and what he's done over there. I appreciated you getting him on. It was great to hear about a local Texas HVAC business. Thank you. 

Patrick Baldwin: My pleasure. Thanks for not holding it against him that he's from Waco. 

Paul Giannamore: I only have room to hold that against one person. 

Patrick Baldwin: Thank you. In other news, I will be going to Helberg on August 3rd, 2023 if you want to put that on your calendar. You can join me. 

Paul Giannamore: Fat Pat, it appears that perhaps I'll be traveling once again.

Patrick Baldwin: I tried. Also, Paul, thank you for joining us. We had an Ask Me Anything event with FRAXN Clients. We had you as a guest on there and great questions. Thanks for being there to answer those. 

Paul Giannamore: Patrick, I would have to say that with me keynoting this, it was your highest-attended webinar ever. 

Patrick Baldwin: What? 

Paul Giannamore: It's true. 

Patrick Baldwin: I know. In light of that, we do have another one coming on August 17th, 2023. Early notice to those reading The Boardroom Buzz, mark your calendars for August 17th, 2023. Paul, if you don't know this because it looks like you don't know this, you're keynoting my next FRAXN virtual event.

Paul Giannamore: I will do that. 

Patrick Baldwin: Thank you. That one's about the value of the business. Do you know what you're going to talk about? 

Paul Giannamore: I do not. 

Patrick Baldwin: Good. I'll surprise you. 

Paul Giannamore: I didn't know what I was going to talk about it today either and I did. 

Patrick Baldwin: Paul, are you traveling? 

Paul Giannamore: I have some domestic travel coming up in a few days.

Patrick Baldwin: Texas. 

Paul Giannamore: No. I'm going up to the Northeast. I have some international travel. It's the 20th of July 2023. In August 2023, back on the international circuit. The deal world keeps pumping along here. As Seth and I talked about it, it's a private equity game right now. Since Seth and I had a discussion, we now have two strategic acquirers who are in the game on acquisitions once again. They're buying things but relatively immaterial compared to what private equity is doing. 

Patrick Baldwin: Interesting world. It’s different than years ago when we were going through the process. 

Paul Giannamore: Very different. 

Patrick Baldwin: I would like to brag about my travel really quick, Paul. I'm going to Phoenix. Seth has this Pest Daily pop-up. We're doing an event in Phoenix with Metro Institute. 

Paul Giannamore: You guys are going to work in a food truck? 

Patrick Baldwin: Is that a pop-up joke? 

Paul Giannamore: I don't know what a pop-up is. 

Patrick Baldwin: We have a remote location. We're going to go show up somewhere and do a one-day event. He did one in Kalamazoo, Michigan not long ago. This is the second one that we're doing in Phoenix sponsored through the Metro Institute and sponsored by Pest Daily. There are over 50 people signed up for it. I pulled up the forecast, 113 degrees. 

Paul Giannamore: It's a dry heat, Patrick.

Patrick Baldwin: I don't know what that means. 

Paul Giannamore: I don't either. 

Patrick Baldwin: Paul, it's hot. That's what it means. I don't even know why you measure it. It should just say, “Hot.” 

Paul Giannamore: Safe travels out there, PB. How long are you gone? 

Patrick Baldwin: Two days. 

Paul Giannamore: Sounds good. I guess we'll see you once again next episode. 

Patrick Baldwin: See you, man.

Paul Giannamore: Take care, brother.

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Dylan Seals: Thank you so much as always for supporting us at The Boardroom Buzz. We know your time is valuable and the fact that you spend 45 minutes or an hour with us means the world. All the media that we put out from Potomac is meant to honor and celebrate you, the service industry owner. As Paul would say, “Yee who toil in the pest control vineyards.”

As part of giving back, we have this podcast, but more than that, Paul and I have been working our tails off over at POTOMAC TV. We've spent a tremendous amount of time, energy, and resources to build out that platform to bring you market updates, to bring you visual breakdowns of the merger acquisition process, and to tell stories and present information in ways that, frankly, it's not possible for us to do on The Boardroom Buzz.

Adding the visual element takes it to the next level. I want to invite you to go to YouTube and find us, it's POTOMAC TV. Potomac.tv will get you there. Go there and subscribe. Check out some videos and leave some comments. Let us know what you like and let us know what you don't like. Let us know what you want to see more of and we'll see you over there.