Chase Hazelwood: The best system for us has been one where we make it nearly impossible not to do what we tell you to do, the way we tell you to do it, and then we reward you for doing it.
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Patrick Baldwin: Look at us, Paul. We got another guest on The Buzz. What's it been, 12 months or 13 months?
Paul Giannamore: We did a repeat guest, as a matter of fact, somewhat of a repeat guest.
Patrick Baldwin: I want to call it a cameo. Chase Hazelwood, welcome back to The Boardroom Buzz.
Paul Giannamore: I appreciate you getting Chase on. I know that you've become close to him over the years. He is a badass. Chase is a cool guy. We were out there in October 2020. Back then, he was doing less than $10 million in revenue on the pest side and now he's doing north of $25 million. He's grown the heck out of that business.
Patrick Baldwin: The Mexican goes around telling people, especially me, that I suck at life. I feel like I suck at life because I've not grown my business as much as Chase has grown his business in the last few years. I don't know if anyone's grown their business as much as Chase has the last few years.
Paul Giannamore: The guy is dialed in, that's for sure.
Patrick Baldwin: After we wrapped up, he and I still spent almost another hour catching up. Paul, you can see the notes I took. This part of the paper is from the notes I took after you end up having to take another call or we finished recording and I wish I've recorded it. We definitely have to get Chase back on. I ended up even texting him in the afternoon and was like, “Chase, did you do any door-to-door sales?” He’s like, “No, we haven't done door-to-door in a couple of years.” They're killing it. Everyone, you've got a lot to learn. If you don't like this episode, there's something wrong with you, that's what I'm saying.
Paul Giannamore: As far as I'm concerned, this is one of the better discussions we've had in a while with somebody who's out there doing it. Anyone who is serious about scaling a resi services business at a rapid clip, I'd say get the notepad out, you're going to need to take some notes for this one.
Patrick Baldwin: Let's check it with Chase.
Paul Giannamore: Let's do this, Patrick.
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Paul Giannamore: Chase, it has been a while, my friend. The last time we chatted, was it in person up there in North Carolina?
Chase Hazelwood: It might have been.
Paul Giannamore: It was years ago. It was during COVID. I remember it was in the heart of COVID. We were wearing masks. Fat Pat was enamored by your Tesla. I remember being in the parking lot somewhere and you had the door swinging open and Fat Pat was like a little kid watching it.
Chase Hazelwood: He was dancing. Now, you got one.
Patrick Baldwin: I might've made a mess in your car because you took off from the side of the road and I didn't see it coming. Thanks for getting me hooked on the Tesla crack.
Chase Hazelwood: It's fun.
Patrick Baldwin: It feels like welcoming you back to The Boardroom Buzz. You had a little cameo way back in the Jeremy Kreer episode many moons ago.
Paul Giannamore: We did that in a cafe somewhere. We were in Starbucks doing that. That was random but I do remember that.
Patrick Baldwin: I'm looking like, “How long ago was that?”
Paul Giannamore: It was the fall of 2020. Did we not see Mike and Debbie out there that weekend?
Patrick Baldwin: Yeah.
Paul Giannamore: That was October. It was a couple weeks before the election in 2020.
Patrick Baldwin: That's good, Paul. It was published November 5th of 2020, Episode 28.
Chase Hazelwood: What an amazing memory, right?
Patrick Baldwin: He's got an incredible memory. We were talking about family business back then with Jeremy Kreer’s episode. Chase, are you a 10th generation pest control guy over there?
Chase Hazelwood: Third generation. Yes, I've got the fourth on the way.
Patrick Baldwin: That's why you had four kids?
Chase Hazelwood: Yeah, just to make it four times as big. Bring them all in and send them off in different states or something or different divisions. The family business has been a growing up point for me because I'm crawling crawl spaces at 12, 11, and 10 years old. I never thought that I would be in pest control. No way I was going to do what my dad did. Thirty years later, I'm here doing it and loving it. It's every day. It's amazing. What an incredible industry we're in.
Patrick Baldwin: No more crawl spaces?
Chase Hazelwood: It's been a minute.
Patrick Baldwin: When's the last time you crawled a crawl space?
Chase Hazelwood: It had to have been over 4 or 5 years. That's a shame. I should go out and crawl one this afternoon.
Paul Giannamore: You absolutely should.
Patrick Baldwin: Let us know.
Chase Hazelwood: I'll put a GoPro on and you guys can hear me breathing.
Patrick Baldwin: How did you end up getting suckered back into pest control? Your parents sent you off to college and you couldn't get enough. You had to come back to the business.
Chase Hazelwood: When I went to school, I majored in small business entrepreneurship at UNC Charlotte, which is pretty early and that becoming something you could major in. My professor, at the time, when I was graduating, you had to present what you were going to do. I had a job working as a sales guy at one of these companies that sold airplane parts for GE, airplane engines.
I said, “I'm going to go do this. It's great money. This is what I'm going to do.” He said, “Doesn't your parents own a pest control company?” I said, “Yeah.” He's like, “You're an idiot. You should get into pest control, it's an incredible business. This is how the market looks.” He set me down. I remember telling him, “I don't get along with my dad.”
Paul Giannamore: Even better.
Chase Hazelwood: He said, “Who cares? Go in there and kiss his butt.” He said, “You're going to work for some guy you don't like at some point. You're going to have to be able to figure that out. If you can't figure it out for somebody that you love, how are you going to figure it out for somebody you can't stand?”
It was a great kickoff and I came back and my dad did not believe it. When I first came out, I spent a year as a termite technician and he paid me $10 an hour and no overtime. If I didn't get done in 40 hours, it was over. That was the deal. He was like, “You're working extra. You're getting $400 a week, that's it.” I had to prove my dedication to him. It was a great start. I would change some things but it's an amazing outcome.
Paul Giannamore: What year was that, Chase?
Chase Hazelwood: That was 2004. I worked as a technician all through the calendar year of 2004 as a termite tech. Somewhere between ‘05 and ‘08, I took over the management of the company, stepped up through. At the end of 2012, I bought the company from my parents. From 2013 on, it's been my baby. We were about maybe under $2 million in 2012. Now, we finished the year right around $25 million. What is that, a 10-year or 11-year run? 12X, something like that.
What’s funny is I didn't realize how much different I ran the company when my dad was here versus when he wasn't. It was wildly different. I thought I would do things differently but I didn't realize how much different it would be. Some of those changes were awesome and some of them were hard and lonely. When you become that CEO of that small business, you're sitting alone at the top. Going through that, we changed so much about the company and we exploded. Certain times, we grew a little bit too fast.
Paul Giannamore: Let's talk a little bit about some of those changes. Your old man ran it as a mom-and-pop family business and you stepped in. I want to talk a little bit about the trajectory. You take this thing over. What changes did you make?
Chase Hazelwood: The very first year, I was unbelievably conservative and I didn't do much. Within a couple of years, we started going hard after sales. We went into routing software and we ended up getting into FieldRoutes, that's the software we use now. Any of them would do it but we got into the software and started route management and took back the control from the technicians.
We used to give technicians a hundred tickets at the beginning of the month and whenever they finished them, they were done, and it was like a benefit of the job. Technicians were making maybe $30,000 back then and we were struggling to compete in the hiring market. We were able to double their income pretty quickly and take over their calendars, take over the management, and reduce a lot of stress on the technicians by having them rock out what we had out there for them.
We started selling bait systems as our primary methodology for termite control. They were tremendously stickier. There were lots of situations where we didn't feel they provided enough control or put us in a position where we felt comfortable at the speed in which it was going to get rid of the termites. The vast majority of jobs that we wanted to treat were preventative. Preventative with Sentricon or a baiting system is profitable if it can keep it sticky like that.
At that time, we had maybe a thousand. We'd been around for 64 years in 2013 and we had about a thousand termite renewals and now we have 13,000. Bait systems are a lot stickier. The customers understand what they're getting. It's easier to sell and it's easier to install. We made all our pricing baseline pricing. We tried to be cost effective. Previously, we'd been a premium brand or premium price service. We got a lot more cost competitive.
At that time, we went after a bunch of commercial work and won it all and won a bunch of work. The main thing was teaching our people to sell and teaching our technicians to be vastly more productive. When I say vastly, I mean we went from an average of 6 stops a day to an average of 16 stops a day today. We're then able to work on customer retention and all those types of things.
Pest control, we often pay a commission. We think, “We're going to pay this guy 20% of the revenue he brings in.” If I hire another one, he doesn't cost me anything. The reality is that's not true. They cost you the vehicle, the gas, the health insurance, and all this other stuff. I had that misconception working for my dad all the way up. This is going to sound ignorant but what happened is we had no need for all these people.
We implemented all this routing software, everybody started speeding up, and we started looking around going, “We don't have to hire anybody.” We didn't hire anybody for two years. At the end of that two-year run, I was making a ton of money. I had to reverse engineer how that extra money got created because it wasn't all in fuel savings. The reality of it is that each employee costs us some money, even if they're a production employee.
We pass that down now to our managers, this is a silly and simple round number, but we tell them it costs $1,000 a month for you to hire a commission-only employee. That's the cost plus the commissions of keeping a person employed and it probably costs a lot more than that. What it will do is it'll have a simple form of communication so that your management team has the ability to conceptualize, “If I overhire, it's going to cost us this much money in a simple way.” If I have five people too many, that's $5,000 a month. All of those changes were made probably from 2013 to 2019.
Another thing is I joined a group called Vistage, a CEO group. I encourage any business owner to join some kind of peer group like that. What happened with Vistage was these guys were like, “You're not making any money.” They would challenge the crap out of me, “Why can't you grow and make money? Why can't you grow as fast as these big door-to-door companies and also make money and also do this?” To get down to the nitty gritty of the changes that we made, a lot of them were driven by being challenged and trying not to think inside the box of what's been done in pest control and get a little bit more outside the box.
Paul Giannamore: You've also done some deals over the years. In fact, Fat Pat and I were out in North Carolina a few years ago. I remember you had either acquired something or in the process of acquiring it and you have done more since. Let's talk a little bit about your deal engine.
Chase Hazelwood: I have a person and she does a lot of things for me. One of the things she does is she's constantly looking for deals. She's connecting with all sorts of pest control owners in a company that is not tied to me, it's a separate company that she works for. She will call on pest control owners, connect with them, and connect anonymously. Sometimes she won't share the business name with me, for example, but she creates these connections and relationships.
I had done a couple of deals. I had bought a couple companies here and there but they were all just my connections. One of the deals we did in 2021 was we purchased a company that had been a door knocking company and they had built the revenue up to several million. It was $4 million or $5 million dollars. They were having trouble getting all the work accomplished and we acquired them and we absolutely killed it.
The month before we bought them, they did $240,000 in revenue. The next month, we did $500,000 and it never slowed down. We crushed it and it kept going. We have exploded, which is not normal, honestly. A door-to-door company, you're expecting cancels to be through the roof, and they were pretty high but we were able to backfill. We went, “Wow, acquiring companies is a good deal.” That was bank financed, it was when the banks were throwing money around for nothing.
I bought two more companies and one of them was distressed. I got your opinion on it, Paul. They never made any money. We ended up buying that company and we bought another company that was making a ton of money, just printing money. The crazy thing for us was we were tremendously better off on the deal with a company that wasn't making any money. We offered more value to those employees and customers and the seller.
We offered more value to them. Probably our niche is good companies that have a strong reputation for quality. Maybe not even that but at the very least they're not making a lot of money and we can come in and introduce some operating systems, some stability, and then turn them into profit machines. We've opened branches. We have thirteen branches now. My COO, Dennis, has the latitude to open branches under a pre-set cost structure that he can just open a branch if he wants. He doesn't have to get my approval to do that. He knows how much money I'm willing to spend to open a branch. We opened one in Roanoke, Virginia, and I didn't even know about it until after I got the first rent payment for the office.
Patrick Baldwin: That's empowerment.
Paul Giannamore: Let's go back to that door-to-door business. I remember when you were looking at it and I remember talking about some of the economics of that. We did talk about the attrition. A lot of times, on these door-to-door acquisitions, some of the attrition is related to the fact that these guys can't service the accounts that they put on.
They sign up for an account and they just can't get a technician out there and then the account disappears. A lot of these door-to-door businesses will do pure-play general household pest, which provides a tremendous amount of cross sell opportunity for a firm like yours that can go out and do baiting and a variety of other things. How did cross selling work for you guys on that particular acquisition?
Chase Hazelwood: That was huge. When I say huge, I mean that was the majority of how we made it work. They had sold us some mosquito work but none of it was even sold to the current pest control customers. It was kind of like they'd gone door-to-door, they sold them pest control, and if they didn't buy pest control, maybe they would buy a mosquito. We went out, they had several million, $5 million or $6 million-worth of contracts on the books but they were only doing less than half that in every month of getting the work done.
The first thing we did was we went out and got all the work done that was backed up and then we changed a lot of their billing structure and everything else. We brought in technicians. I rented hotel rooms and brought in technicians from branches and said, “There's a gold mine up here. Do you guys want to go up here and sell?” I had technicians from other branches come up and sell and they'd sell two upgrades a day and make $10,000 or $15,000 grand in a month and work their money through Friday and then come back home.
The other technicians that were there started seeing it and they were like, “Whoa. This guy has got to be making a lot of money.” Some of them got involved and then those people that got involved stepped up into leadership. We found that by the cross selling of termite sales and mosquito, we would combine mosquito into the pest control account. Cross selling that, we probably sold one for one. We lost an account overall and then we would cross sell an account to a current customer.
We went back and we developed a cold call plan to our canceled customers, did outbound sales back to those customers, and we still picked up quite a few of those. We had our technicians go to the homes in the neighborhoods that were canceled where they had an account that they were servicing and they just stop in and go, “We used to have an account. Could I offer you a special?” They would pick up sales from that.
There is an incredible trove of information. The big thing you're buying is you're buying all this information and all of these people were willing to buy a pest control service from someone who stopped at their house. We had a few people that were irate about some situation that happened before we got there. However, the vast majority of people that were ragingly upset, it was easy to solve. We were like, “We're a new company. We're going to make it alright. How about we service your account for free? Let's do this and let's do that.”
I will say we had an advantage. We have a customer retention team in my call center. Their entire job, that's all they do, is deal with anybody that wants to cancel due to quality of service or a complaint. They have empowerment to do anything they want to do. You can send the customer money. You could do anything you want. You have to keep the customer at the end of the month, we review all your actions, and then how much it worked, how much it cost, and whether or not we made good choices. They are sweet, Southern, sit-down-and-sip-some-tea-with-me women here in the office that are fantastic. We had a good time with it.
When I say we killed it, we never in our wildest dreams. In fact, the way our deal was structured, we had a retention earn out and it was huge, “If we retain this much, blah, blah, blah.” We had hit the revenue retention earn out three months early and had to freaking pay them. I was like, “Holy smokes, I can't even believe that we did that.”
That only counted revenue to the customers we bought. It didn't count any customer that we sold from marketing, which was additional sales, additional opportunity. The great thing is if you have a reasonably good sales engine and you dedicate yourself to it, you're buying tons and tons of contacts, customers, cell phone numbers, and all this stuff. It's a treasure trove to data mine that and then go communicate with them.
Paul Giannamore: It sounds like a lot went right with that particular deal. Did anything go wrong?
Chase Hazelwood: Yes.
Paul Giannamore: Let's talk about some of those learning experiences you had.
Chase Hazelwood: I'll tell you a couple of them. My COO was running the acquisition and he was working there 3 or 4 days a week. He is driving down the road and he sees a van with the old company's logos in a parking lot with all of the windows busted out. He goes and pulls in and he’s like, “It's our van.” When we had gone to them about the acquisition, we got their balance sheet, and that's how we worked from their balance sheet to figure out what vehicles they had.
It turned out there were five vehicles that they didn't have on their balance sheet that they had gotten through a lease that were a part of the lease deal that we had agreed to take over. We were just paying the lease payment and we never thought to count whether or not we thought it counted to see if we got all the vehicles.
One of them was in an impound lot, it had been stolen and involved in something. One of them, all the windows are busted out. The other three were sporadically placed across the city and left in random places. We ended up finding them all eventually. This sounds so naive. It never occurred to me that someone wouldn't know where all their vehicles were but that's how fast they grew. They just exploded. They went from $1 million to $5 million in two years. They didn't have systems for tracking all that stuff. Another one is we had 31 employees who came on and 90 days later, only 6 of them remained. That was like, “We were not prepared for that.”
Paul Giannamore: Why was that?
Chase Hazelwood: Being specific about that company, they had hired guys to come on to handle new starts for door knockers. Those were different people than ongoing service technicians.
Paul Giannamore: Those were their start techs.
Chase Hazelwood: That's right. They had tons of start techs and few that we would call recurring technicians. Now, there are four that are here today out of that six. There are four that are straight up A-player superstars. Those guys are moving up, one is a regional manager, and two of them are branch managers. They're awesome. The mentality was, will you show up and work until we tell you that you can go home? If you have that attitude, you got the job and you're staying here.
A lot of these guys didn't want to make money, they wanted to work by the hour. They wanted to make $12 an hour, $9 an hour, or $10 an hour, and our people don't make that little. We came in right away and said, “We have a $15 an hour minimum wage. Everybody gets $15 an hour. That means you got to be worth it.” Some of these guys just had no intentions of being worth it. That was a problem.
Another one was they had a lot of freedom and we didn't give them any. That's a tough transition. When your company is being bought out, you should have the expectation that you're going to lose whatever freedom you have, and then you have to earn it back. If you have that mentality, you're going to make it just fine. The reality was we gave tons of freedom but whatever freedoms they had, maybe we didn't like it the way it was. They could leave at 4:00, we don't let people leave at 4:00, or they could show up whenever they wanted to the office, we don't let them do that. There were several things like that, that people just didn't mesh well with our culture.
People say that all the time, culture. The biggest thing, if I was going to explain it, is this. We have this high performance, fast-walking, go-make-six-figures but as a tech culture. We put the high earners on a pedestal. We talk about it, we put all their numbers in front of everybody all the time, and we push. People that want to relax show up at work, work their hours, go home and clock out, it doesn't feel that comfortable to be here because you're surrounded by people who are booking it.
Some of it was they had loose time off policies and we wouldn't allow certain types of time off in certain situations and things like that but all of that accounts for it. It hurt us in those 90 days but if I was giving myself advice, I would have been like, “Absolutely, do not hesitate. Get it done and replace them because the culture fits, it's not going to work with these few.”
The people they cared about, the sellers, the people that they talked about and they cared about, those people are still with us. They're making big money and they're doing great stuff and they're moving up in the industry. That was pretty interesting to see that acquisition because it was one where the structure of what we did, every single one of those people got a raise. Not one of those people made less. They all made more money. They're quitting or getting fired fast, several a week. We've acquired a couple of other companies since then and nobody got fired. A few people quit and it's worked out.
The biggest thing that I would say is that a small portion of the people, when we acquire a company, are ready for it. They're like, “I can make $80,000.” We're like, “You can make $80,000 no problem.” They jump all over it. They jump at the opportunity. People hate change. Change is difficult. You have some group of people that are like, “I'm not looking for that. I'm not looking for this. I'm looking for a different culture, a more laid-back kind of thing.” We have people call in sick and don't show up on the Monday after the Super Bowl and co-workers will call them out and are like, “I'm making up for you today. I hope you enjoyed that Super Bowl.”
That cultural change, that's a big deal. One of the things we do is we try to insert a few people into every company we acquire. We take some culture champions. They don't have to be high performers but they're culture champions. They've been here for a while. We'll give a $10,000 bonus or we'll give something and we'll move somebody or we'll pay them to relocate. We'll move them into a branch so that they can start the beginnings of what it means to be part of the Go-Forth family.
The most successful companies that we have purchased added a new service area, number one. Number two, we created a lot of value with our structure. When I say create a value, they weren't making as much money and we made them make a lot more money. Our sweet spot is buying a company that was already making a killing, making 40%. I'm not going to do it again. I've done it and I've learned my lesson. I didn't bring anything. That company is still making great money but it didn't bring anything and I paid for all that profit.
Patrick Baldwin: I thought you said if someone calls in sick for work, you're going to show up at their house that day and check on them. That’s what I pictured. You're always surprising me with things you say. I said you have three technicians making six figures but that number has risen. How much can your techs make and how do they do that?
Chase Hazelwood: The median payroll for a residential pest technician in 2023 was $72,000 and the average is much higher because a few technicians make a lot more. Ten technicians make a hundred plus. The way that they get paid, I'll go through the whole thing. When they get started, we give them a handout and every single person gets a handout. It shows every production-based pay for every position in the company.
What's cool about that is sometimes people will say, “I'm a better fit over here because the way that you compensate for this position aligns better with my values.” I don't necessarily think they say it that way but that's how it ends up. We pay a base commission and it starts at 18%. You get 18% when you finish your first registered technician, RT, whatever it is, the first certification, and it'll bump up to 20%. I could be off on the numbers, up or down or 1 or 2 points, because of how different states do different stuff too. You get another 2% points if you get certified in your state.
We then offer some more stuff if you get licensed. That's just a percentage of production. We offer 15% sales commission as the cash comes in. You sell a service and they pay $100 today and they pay $100 every month. For the first year, you get that 15%, you get $15 a month. We pay a multiple on every recurring sale you make. It's a scalable thing. If you sell 20 or more as a regular technician, then you get $35 a sale so that's $700. I have people that sell 60 in a month, 100 in a month.
What happens is we believe in a batting order. We don't believe in fairness. Fairness is not real. We believe in the batting order. Who do you put up first? You put your best hitter up first. Maybe you bat them clean up but whatever. In the real world, you need to get on base first. When leads come in, our branch manager, who makes great money, is the first one that runs the lead. When the branch manager is overworked, then it falls to the next up in the batting order. The batting order is handed out to all schedulers and it goes out to every single person in the organization. They know where they stand and it's based on close rates and number of sales.
If you want to move up in the company, you will start out at the bottom. By the way, nobody makes less than $50,000. No technicians make less than that. It's not like the bottom is you're broke or something. You start out as a residential pest control technician. Generally speaking, they're going to make $60,000 a year. You go out and you sell the minimum that we would allow you to get closed in a month, four. If you sell less than four recurring services a month, we bring you in for coaching and you continue to get coaching on a daily basis all the way down to auditing and your sales attempts. We send people out with you to watch you do it, listen, and then coach you up. We give you classes. It goes on and on.
The guys that sell 100. If you were to sell 100, how in the world would you do that? The way you'd start with is you sell a high percentage of your accounts. You're selling them an additional service, some kind of upgrade and, as Paul said, some kind of thing. What will happen is the branch manager is compensated on his sales and on the branch's growth. What he's going to do is he's going to send you and he's going to sort your route to where it has the greatest opportunity for up sales.
Let's say you're doing sixteen stops today and what if all sixteen have not bought everything we sell? Whereas you go to the bottom salesman on the totem pole, he does 16 stops, and 13 of them already have termite service and there's only 3 that don't. In order for you to work your way up, you will close more and then have a higher close rate.
We do the same thing in the office. If you call in and you say you want to buy a service, the person who answers the phone has the highest closing rate percentage available that was available at the time. It's like that 100% of the time. We have people that sell $150,000 or $200,000 a month over the phone. Everybody sells a decent amount but you have some real amazing people that sell incredible volumes and their closing percentages sit up on a board.
We have like these 75-inch TVs and they sit up on this board all the time and they're live. If somebody gets a call and then gets off the phone and doesn't close it, they'll go, “Boop.” Their sales rate goes down and somebody will go in and edit the phone system and reorder the batting order. Some people, the high performers, by the way, think this is very fair. When you run into people that say it's not fair, we're like, “We're not creating a fair environment. We're creating an environment full of productivity and rewarding highly productive people.”
The other thing that we do is we provide an incredible amount of oversight. Most of the people reading this podcast probably will say, “That's like micromanaging,” or, “You don't trust your people.” I don't trust my people. They don't trust me. We're not in a trust situation. We're in a situation where I said I was going to pay you, I do everything I can to pay you, and you got to make sure you got paid too. I got to do the same thing on the other side. I told you to go do this stuff, you said you were going to go do it, and now I got to make sure you did it.
Everybody is GPS-upped, they get audited, and they get an audit based on their performance, once again, based on a batting order. You get audited more often the newer you are and the lower performance that you have. When audits come back failing, it's a pass fail. When audits come back failing, you go in for coaching. My top performers come in once a week at the most. My bottom performers come in every single day. They'll have a finished phone call at the end of the day where they've got to review it all.
Paul Giannamore: Your audit is the exact opposite of the IRS. The IRS audits the most productive members of society whereas you audit the least productive.
Chase Hazelwood: That’s right. I was at a conference and I gave this talk incentive versus rewards. We talked about how we try to create this financial incentive system at Go-Forth and it works sometimes. For the highest performers, I do think it works. Realistically, the best system for us has been one where we make it nearly impossible not to do what we tell you to do the way we tell you to do it and then we reward you for doing it.
For example, they have the monitor on their computer that monitors how productive they are. I was super skeptical of this. In the beginning, I was like, “These people are going to hate this.” Except, do you know who loves it? The most productive people. They love it because they all got raises. In order to work remote, you have to have the OverSight app engaged on your device. If you don't want it, generally, they're allowed to work from the office without it.
If you're a bottom performer, there are lots of metrics to go into that. Every stop on your calendar gets reviewed, every word you wrote, every chemical you used, every single thing, what time you checked in, and what time you left, everything gets reviewed one-to-one with your branch manager or your team leader if you're in a big branch. They have team leaders in big branches. I'm going to be honest, I don't even know how anybody does it any other way.
I know it sounds dumb but I don't even understand how companies stay in business. You hire a tech off the street, you train him for a month, and then he goes out and does whatever he wants. I don't even understand how that doesn't result in chaos. Even if you believe in the best for the technicians, it would still be chaotic because they have such a short span of time and narrow influence, they're going to have wildly variant results.
Patrick Baldwin: These guys that are getting into one-to-one coaching daily, do you see them moving up your batting order or are they moving their way out of the business?
Chase Hazelwood: Both. It's probably 70/30 moving their way out or 75/25 about a quarter move their way up and then they become competitive and they can get into competition with the people that have been here. I would say three quarters of the people leave. Not everybody would tell you these are terrible. When you talk about turnover, it's expensive and everything but it's also profitable because you're getting rid of people that are not producing if you're doing it right.
A few people leave us to go work at some other pest control company, that's extremely rare. I don't even know if it's ever happened. People do leave all the time because they are not productive. What we would like to do is create an environment where unproductivity is unwelcome that you walk yourself out the door voluntarily. It's just socially unacceptable. It is unacceptable from your relationship to the manager. Honestly, you feel guilty about being here, taking up space, breathing our air, and not being productive.
Paul Giannamore: Would you argue that, of the other pest control companies you've seen floating around out there, management often doesn't incentivize the workforce at an appropriate level?
Chase Hazelwood: 100%. When you use the word incentivize, I want to make sure I would clarify. I agree but I don't think it is always the carrot dangling incentivization. The majority of incentivization that is necessary, especially for young people, are guardrails, bumpers. An employee knows for a fact that if they go home in the middle of the day on their own and it's non-productive or goes and does some non-productive thing, they're going to have to have a conversation face-to-face with a manager, explain themselves, and have to deal with the fallout of not working. They're going to be dramatically less likely to do it.
You also get rid of the people that have the inclination to do those things. The majority of our incentives are the guardrails and the oversight. It’s like saying, “The incentive is you don't have to do a one-to-one.” You start from your house and you drive straight to the customer's house. You did not have to come in. You didn't have to go through your day. You didn't have to go one-to-one. You didn't have to look at anything. You didn't have to get any coaching.
A few people want to sit with their boss and say, “This is how I made all my decisions yesterday. By the way, do I think it sucks? Absolutely, it sucks.” As soon as somebody moves into that productivity realm, this job is amazing. Everyone they work with is also amazing and productive. They're never cleaning up other people's messes. They're never showing up at a job site that somebody didn't do their work right because the rest of the people around them have been forcefully selected into that pool of people that are willing to do the work and willing to do it right.
I believe that most managers think their job is putting fires out and we are like, “Absolutely not. Your job is to coach your people and have powerful conversations.” That's what we tell them all the time, “Your job is to have powerful conversations. It is not to make a bunch of decisions.” If you're having to make a bunch of decisions, what we ask our managers to do is to write all the decisions down so that we can create a framework for making those decisions where it could be done by a robot, someone looking at a checklist, using AI, or whatever.
They don't even have to think, “What do I do next?” It's already done. That's the most fun part of being a manager, intrinsically rewarding, “The guy has a flat tire on the side of the road. What should I do? I'm going to try to get more stops on this guy's calendar today. How do I manipulate that and do that kind of thing?” That's the most intrinsically rewarding with the least consequence. We don't want our people wasting their time on that stuff.
We let AI do the scheduling and then we have a system that every single employee is trained on, “I got a flat tire, this is what I do. I document it but it doesn't bother my manager. My manager knows about it but he doesn't even have to solve it. This is how it's solved.” We literally write down all those decisions those people have to make and then we go through them all and say, “How often does this happen?” If it happens often enough and it's consequential enough, we make a training and a program so that they don't have to make those decisions.
We try to free our managers up to just have powerful conversations, which a powerful conversation is exactly the incentive, “Why are we not here? What are your commitment levels? What are you committing to me to do?” That's probably the number one thing that I stress when I'm doing management conversations and when I'm teaching people. Ask your employees what they're willing to commit to do and then hold them accountable to that. Most of the time, if they do that, they're going to be awesome. We just don't hold them accountable to do it very often.
Patrick Baldwin: When you talk about the acquisitions and the new employees that are coming over, they are going to lose their freedoms and earn it back. That's the same mindset you have or method you have with new hires as well. Years ago, when we spoke about this, “Day one of a new hire for us was hunky dory, flowers, butterflies, rainbows, and taking you to lunch,” painting this big, beautiful picture. You're more like, “This is going to suck. You're starting at the bottom. You're a grunt. You're a no one. These are all the restrictions you're going to have.” They're earning the rewards as they go and they're like, “I never want to go back to that.”
Chase Hazelwood: That's right. I have been softened on my day one. HR has won me a little bit. Day one, there is an introducing and all that, but there's no evidence that it works, by the way.
Patrick Baldwin: You're testing it.
Chase Hazelwood: Yeah. Nobody is more excited to go to work than they are on their first freaking day. I'm like, “This is as bad as it's going to get right here. We're going to go out.” We don't make it awful, I wouldn't say. We don't make them do the hardest thing physically, necessarily, they're going to do it. It's not like we try to kill them. What we do is we smash them with information. We tell them they got to study at night and they got to come back the next day and pass a little quiz.
We press them with information on their first six days. It is push, push, push, push, and stressful. We only make it stressful so that it feels easier the first day when you drive off in a car by yourself and you're getting ready to ring that doorbell. That feels less stressful because you've already been through a little bit of stress in those first seven days. That's our mentality about it.
When I was coming through, I went to visit other pest control operators, my dad would send me to visit them, and a lot of them do a lot of pest training. They're like, “This is a box odor bug and this is a cigarette beetle.” That's great. Do you realize how rare these guys run into this? They run into ants, roaches, spiders, mosquitoes, and whatever else is rare. We train the crap out of them on ants, mosquitoes, spiders, and roaches. We give them categories like stored product pest and then we tell them, “You don't have to remember any of this. You just need to be able to identify that it's a stored product pest and then grab this material to reeducate yourself when it's time to go.”
When we're training, we're focusing 100% of our energy on customer conversations, sales, customer service, how you speak to a customer, how you communicate with a customer, and not, “What is this bug?” That's important. Somebody, at every branch, better know what this bug is. It's just rare. You're doing thousands of houses before you run into a Mediterranean meal moth.
Patrick Baldwin: Did you just make up an insect?
Chase Hazelwood: No. That's a real insect.
Patrick Baldwin: When you're hiring this very high-performance culture, are you looking at personality profiles? How are you getting technicians to get to sell and make six figures? Is there a checklist or do you know that this guy or girl is an athlete and is going to crush it?
Chase Hazelwood: You say those things and I am like, “I would pay an incredible amount of money if somebody could do it.” We have hired multiple people or firms to try to give us the profiles, it's been extraordinarily difficult. The way that works is you hire 100, you push them hard, you hold them accountable, and you get 50 and then you go higher another 100 and you get the other 50.
That works. There's no other way that I've seen that works that's provable. We are trying everything. We do DiSC, personality profiles, and Culture Index. We're doing all of it. We do it in different branches to compare it from branch to branch. We are doing everything. I've got a big HR team and a big recruiting team but I haven't found that secret sauce. It's grit. Everybody says they have grit. How do you find someone with good judgment? Go ask them, they all do.
Patrick Baldwin: At the end of the day, a lot of people have a hope and a prayer. Paul and I spoke about this right after the WorkWave conference, it’s like, “Your 2024 plans and strategy is a hope and a prayer.” You have everything boiled down to a system and a checklist and text message or whatever that is. Is it not all just, “We're well-documented and everything,” and then knowing that if you execute on that, you're going to grow it whatever you set your heart to.
Chase Hazelwood: Yes. Every single phase of the company is required to be broken into checklists that have measured productive inputs and outputs and return on investments, HR, our pay-per-click campaigns, and our internal marketing. Every dollar we spend and every minute of time is required to be measured and then compared against how that returns. We do a good job. We hit our numbers almost every year. It's very predictable.
My number one argument with all of my managers and myself for the last twenty years is that I refuse to solve any problem. I refuse to let them solve it until we have figured out how it happened and how it's not going to happen the next time. If I had to get involved, it was obviously big enough for me to be involved, then it's going to happen again or it's a big enough deal that we never want it to happen again. I force them and they're like, “This thing is on fire. We have to put it out.” I'm like, “No. Is everybody safe?” “Yeah.” “We're going to go figure out how it happened and we're going to prevent it from happening.” Have you read the book about the pilots doing checklists?
Paul Giannamore: The Checklist Manifesto?
Chase Hazelwood: There you go. That changed everything about the way we did everything. We basically went, “The smartest people on the planet perform better with checklists.” Certainly, Chase, the owner of a pest control company, would perform better with a checklist.” Everybody has them. My VP of HR and my COO all have checklists about what they're going to accomplish every day, every month, and every week, and how they handle each thing. We systemize the crap out of everything.
My goal and the way that I represent this, because it is controlling in some ways, is that we are trying to eliminate that stress and we're trying to free you up to have a great time at work. When you have to freak out about, “How do I handle blah, blah, blah…” It's so much more stressful than, “This happened. Therefore, grab the checklist and then go.” We're in a stressful world. How do I eliminate that stress for me and my managers and down the line? That's how we pitched it across the board.
I used to tell all the managers that there were two types of managers, there were the micromanagers and then there were the ones that were about to get fired. The entire pitch is like, “I don't want to hear about this.” Micromanagement is only a bad thing if you somehow get in the way of people's performance. My experience in the pest control industry has certainly not been that and it has been making sure people do things consistently is extraordinarily valuable. Therefore, it can't be outweighed by whatever tiny time that you inhibited somebody from being creative. We're not an art factory. This is science. We should be doing things by the book. We should be technical and direct.
Patrick Baldwin: When you talk about branch managers, I'm thinking, “Here's what you have to do, a little bit of sales, answering the phone, working collections, and doing some commercial sales out of the office.” There's a box that I think about when I'm thinking about branch manager and then bringing that to pest control, it's probably being in the office, overseeing the CSRs, looking at work orders that came in, and making sure that your office manager, service manager, and sales manager are doing their job.” You have a totally different perspective on your managers, don't you?
Chase Hazelwood: I'll lay out our org chart. We have me, the COO, the VP of HR, and then I have three regional managers. Those are the only people in the organization that are not producing or selling pest control or don't produce something. I have an AR person, accounts receivable, and an AP person. I have two AR people and I have customer retention specialists but they all have jobs that are linear and specific.
The branch managers fit in right below the regionals. The regional managers handle 3 to 5 branches. They will handle almost all the things that you mentioned except for sales. The branch manager is our lead salesperson. Out of the branch, they're expected to have the most sales in the branch. They handle all the leads. They have to do around 150 stops a month and that includes sales stops and they have to do it every single month. It also includes training stops so they go out. They're not supposed to be training people in the office. They're not teaching technical classes.
There is no sales manager. There is no service manager. There are team leaders. A team leader is a top technician who makes $70,000 or $80,000 a year being a tech and then makes another $5,000, $10,000, or $20,000 a year being a team leader. He does the full-time job of a technician. On top of that, he leads a team, which is several hours a week. The branch managers, some of them handle scheduling, and some of them do not. The ones that handle scheduling, they do it because they want to. They get there at 6:30 in the morning and schedule everybody's stuff.
Once the guys leave for the day, the schedule is not getting messed with all day. All that pretend work that branch managers pretend to do where they sit in front of a computer all day and be like, “I'm going to make sure that the bills get good and put in the bank,” they don't do that. They don't have to worry about the trash. They don't have to worry about the building. They have to manage the trucks. Specifically, they get told what to do about a truck.
A regional manager oversees all the vehicles, facilities, and everything with regard to that. My COO and I oversee the call center, which handles all accounts receivable, all accounts payable, and everything related to that. We make it to where a branch manager's job is just to grow that branch and then make sure we're adhering to the standards but that's it. They don't mow the grass. Some of them ask to mow the grass and we're like, “No way. Your time is way too valuable.”
Patrick Baldwin: Can I clarify the branch manager? When you say they handle every lead, do you mean leads that are not getting sold over the phone and they're out doing inspections?
Chase Hazelwood: Yes. We sell almost everything over the phone. Commercial leads or special bug or whatever, the branch manager will end up going out so they go out on those leads. Termite swarms and things like that, they're going to go out on those leads. The majority of what they do in terms of stops is not leads because you can't get 160 estimates a month, that's crazy. The majority of what they will do is go with a technician to a house and service the house with the technician. That could be a training situation. It could be we failed and the customer is complaining and we need to go teach the technician how to make it right. You got to get your branch managers out of the office.
We have a call center director who's over the call center. We have a project manager who oversees every project that we have like an administrative person that just oversees projects. We don't have the traditional office manager role either, I don't know why you need one, and I don't even know what they do. I can't figure it out. If there's nothing left to do, I don't know.
During COVID, we made a training video on how to replace the toilet paper and we sent it out and we're like, “If you're the last one to use the toilet paper, this is what you do. Please help us out. Do this.” The problem just went away. How hard is this? Why would a branch manager make $60,000 or any amount of money and replace toilet paper rolls all day? I've interviewed them and been like, “You seem talented. You seem super charming. What is it that you did? What did you do for that company?” It's like office space where they're like, “I'm going to deal with the people. I've got personality.” All the stuff he says, “It's important, I promise.”
I've more or less had the mentality to reduce the people that don't produce anything and then get your technicians a bunch of money. You get technicians a bunch of money and the great ones have low consideration for leaving. When they leave, they're so awesome that they're getting some awesome freaking job and you're cheering for them. You're like, “Hell yeah. You're going to go make $200,000 a year. That's incredible.” You stay connected to them forever because they are super happy and you're super happy for them.
Patrick Baldwin: A while back, you said that you have someone doing anonymous M&A and she's just making calls. The weird thing you said is she won't even tell you who she called.
Chase Hazelwood: The deal that she makes with the people that she calls on is that she gives them an NDA that she won't share anything with me before they agree to it. You can't get people to open up. She doesn't tell me anything, literally. She doesn't tell me who she's calling. She doesn't tell me who's on her list. Sometimes I'll say, “I want you to try to reach out to this company. This is an opportunity for us.” She does it completely cold and until they're ready, she doesn't share it with me.
I get reports that say, “Company A,” and it doesn't have a location. It may not have the revenue. It might just have stuff in there that they wanted to tell her that they were willing to let me find out about. She tells them, “We have a buyer and he's a pest control owner.” We have an NDA so we won't be sharing anything with him. Before you're ready, you can tell us exactly what to share. People are way more receptive. I get involved in a lot more conversations because of that. Yes, it has pissed me off before.
Patrick Baldwin: You begged her? You're like, “I signed your paycheck.” You don't threaten her?
Chase Hazelwood: No, it's never gotten quite to that level. There has been one where I was guessing the name and she was like, “Chase, this is the deal. I signed an NDA with these people. You told me to do that.” I'm like, “Yeah, I know. You're good.” Now, our cadence is she doesn't let me know about much of the deal. She knows what I'm looking for so she works a huge portion of the deal and builds a lot of comfort with the business owners before I get involved. Usually, I'm going out and selling myself to them once we've established that I'm in the ballpark on the pricing and the valuation and some general things like that, if that makes sense.
Patrick Baldwin: It's interesting.
Chase Hazelwood: People wouldn't share real information with me. I was like, “Maybe I can get them to share real information with her.” She kills it. She's amazing. She's been a part of a lot of the deals that we've made in the last couple of years so it's been good.
Paul Giannamore: Speaking of deals, Chase, last time we got together, we were having a little bit of a chit-chat about the stuff that you're doing outside of pest control. Pest control is not your only game.
Chase Hazelwood: We've acquired an HVAC, electrical, and a plumbing company. We acquired an IT home theater. They do small business IT and high-end home IT and home theater like TVs and speakers and stuff like that. That deal was interesting. This guy came to me and was like, “I've done work for you before.”
He talked about the people in my office and he said they walk with a purpose. He was like, “I want to be a part of that.” I was like, “I don't understand what you're saying.” He's like, “Everybody looks like they're doing something so important and I want to be a part of that.” That was his opening salvo to sell me his company. We've gotten into all that.
I took some money off the table in 2023 and I didn't sell any of my company, I just took some cash out. We bought into a venture capital firm that I'm partnered with another guy on. We bought a data analytics company. We bought seven Makos. We bought a bunch of different stuff. I'm working over there a little bit as well. That's pretty exciting. All of that stuff put together is roughly 2/3 the size of the pest control company.
Paul Giannamore: What does the data analytics company do?
Chase Hazelwood: We do a bunch of different stuff right now because we're throwing spaghetti at the wall and seeing what sticks. For Go Forth, what they do is they listen to our phone calls, develop an AI summary, develop a pass-fail on sales calls and an audit of all of our sales calls that give score rankings. What we're using it to do is to make sure that our training is being followed and that close rates don't artificially somehow, short-term, give us the wrong opinion about an employee or their performance or how they do things. They do all that.
They do employee ranking metrics. They take all the data from our employee performance stuff and they will rank all the employees, give them outfitted scores, and those types of things. They do business intelligence. They do all the stuff from Power BI or Sigma or whatever where they show you your revenues and your sales and cost per sales.
The biggest thing they do is our return on ad spend. When we spend money to acquire customers, we track it all the way from the dollars that we spent all the way till it makes a sale in our system. It uses AI and analytics to figure out what lead that came from like what pay-per-click campaign or what ad was online. It allows us to create an evaluation of that pay-per-click ad to determine which ones close. The traditional metrics around like pay-per-click or click through rate, none of those things matter at all.
I'll give you an example when you advertise for your company's name, it has an incredible click through rate, low cost per click or whatever. All the data shows that it's a wonderful thing to do. Except, as soon as you track sales, you don't sell crap from that. The data is inexcusable. Few people are going to buy your service by searching your name and then clicking on the pay per click ad for your name. It is incredible, compared to the number of people that will search your name and then click on it for marketing.
They're trying to market to you or sell you something or they're a current customer. You can spend tens of thousands of dollars wasted and never even have a chance to sell anything. For example, years ago, we had one IP address and it worked up to $12,000 in pay per clicks. We couldn't figure out what this was so we blocked the IP address.
My guy kept thinking about it so he sent out an image to a bunch of different pest control operators and he said, “Can you help me identify this bug?” When they open the image, he pulls their IP address and he finds out it's another pest control operator who is opening up Google search every day and clicking the crap out of paid ads. We took all the IP addresses that we gathered and we blocked them from being able to see the ads. You could be wasting thousands of dollars on salesmen or on another pest control company or whatever. I chuckled, “We've gotten to the point now where people are trying to sabotage us. That's fantastic. I'm excited.”
Paul Giannamore: You're worthy of being sabotaged, Chase.
Chase Hazelwood: Yes, that's right. That's exactly what I was thinking. The thing I'm probably the most excited about right now is we're building out through an API the ability for every sales call to have the summary automatically dropped into the customer card. The ideal scenario would be that a person takes a call and they don't take any notes.
They're talking to the customer and the notes are coming up on the screen while they're talking and it's documenting it through AI. They can just give that customer all of their attention, all of their focus, and then move on to the next call instantly. Cool down time on calls is pretty significant. If we could get that cool down shortened, it'll allow us to hire a few less people and then let our best people talk to more customers every day, which would be great because that means I can pay him more money as well. It'd be a win-win for everybody.
Patrick Baldwin: Where did this high-performance model come from? Is it from some sports team or Moneyball?
Chase Hazelwood: You get influenced by Moneyball. You watch that and you get influenced by it a little bit. Realistically, we weren't making any money and I couldn't figure out why. We started at $75, I pay the guy 20% or whatever to go service the account, where's the other $60 go? I just couldn't figure it out. I tried a hundred different things.
In the end, I ended up measuring each person. This is when I had maybe twelve total employees maybe. I tried to figure out if they were profitable or not. Realistically, it was wild that my top people were extremely profitable and the bottom people were so anti-profitable that they were dragging all of it down. The other piece was the top people weren't just profitable, they also were the ones the customers wanted. We did a series of interviews and they wanted to be surrounded by people that were like them. We went, “What if we did that? What would happen?”
Our fear was that we weren't going to be able to find them and that we would effectively slow down our growth but it was the total opposite. Obviously, it didn't work out that way, and it worked out the other way. We have 150 people, roughly. I have three full-time recruiters and a full-time behavioral analyst who does our wellness program. We have an employee wellness program as well. She is a phenom recruiter. She will step in any time we get under a certain pressure and do recruiting as well.
We have four people that can recruit full-time. The other part of that is I made training and onboarding fast. A residential pest control technician is fully up to speed servicing accounts at a pretty prodigious rate in 8, 9, or maybe 10 business days. Commercial is a little different, it’s a lot slower, to be honest, and it changes various different situations. Residential pest control is the one that you end up recruiting the hardest for.
Our new office has a daycare, a gym, a coffee shop, and all kinds of cool stuff in there. What I want to do is create an environment where people can't imagine leaving. I remember my buddy had a master's degree in engineering and he's talking to me about how his company is treating him like garbage. I'm like, “Why don't you leave? You're so highly sought after.” The first thing out of his mouth he said was, “I could. I have to change my cell phone number because my cell phone is for work.” I'm like, “What?”
I thought, “Let me make it unbelievably inconvenient to leave. I’m going to give them cell phones. Let's give them iPhones, that's even better. Everybody gets an iPhone. What else? You can drive your truck home. You can drive your truck to and from work. You can do this.” I kept trying to make it to where it was convenient to stay. You wanted to stay and you wanted to work hard and you wanted to be here. We kept making it more convenient to stay I think. Everybody that you ever hear interviewed says this.
When you get people to the very top in the leadership positions and then you acquire another group of people around them and another group of people around them and they all share that work ethic and that goal, it's a whole different ballgame hiring the new people and putting them in because they absorb it from everywhere. It feels weird to be non-productive and to be lazy or to complain.
Another thing we do is we have a wellness program and we do all these wellness classes, financial wellness, nutrition, workouts, and all this stuff. One of them we do is what we call job wellness and it's like a mental health thing and it's how do you do the job that you do and keep your stress extremely low and feel empowered and feel in control? We teach them all these techniques like gratitude journal. We have Thank You Fridays and Thank You Thursdays and people go out and tell somebody else in the company that they appreciate them or anywhere that they appreciate them.
These things give people a sense of empowerment and control. Also, hopefully, we are a source to their mental wellness. They look at it and go, “Chase cares. The company cares about me being a better person.” It makes them stickier and we're going to stick it out. When we've had a bad day, instead of telling him to buzz off, we're going to be able to move on and put this day behind us and bounce into the next day and forgive the company, truly forgive them for putting me in that situation where I had this bad day.
They have the company beach trip and they pay for my whole family to go to the beach and obviously they're spending all that money. They care somewhat. Because today went bad, we're going to give Chase and the team the benefit of the doubt. That's where our head is and our heart luckily is able to follow or maybe it's the other way around.
Patrick Baldwin: Any downsides you see to this high-performance we're-going-to-call-you-out-for-being-unproductive culture?
Chase Hazelwood: Yeah. It is way harder to hire, especially management because not only do they have to be productive people but they also have to be willing to be socially uncomfortable telling someone else that they have to be productive and have what we call care-frontations or powerful conversations. The concept is you've got somebody who thinks five minutes late is acceptable and you got to go talk to them and be like, “This isn't okay at all.” You have to find a way to do it in a compassionate way.
Young people today, I don't mean to be young people like, “I'm an old fogey or whatever.” Young people have not been dealing with a lot of confrontations about anything. They're getting away with all kinds of stuff. When you go and confront them, they respond back and they're like, “I was only seven minutes late.” You're like, “On time is late.” It's a totally different mentality so you have to have people that can speak that language and can get through to those people.
Also, they have to be compassionate enough to not overreact but then they have to react and that is unbelievably difficult to find. I found it's better to be like, “I'm going to pay a lot of money and I'm going to hold these people to a high standard.” It's all selfishness on my part. I wanted to work with high-class people and I wanted to work with awesome people.
I wanted to hire people that would be my friends and in order to do that, I had to pay more money. I was like, “How do I do that? Let's do this and let's have them get more done and let's make it easier to get more done and then let's do this. They don't want to work with crappy people and they're my friends so let's get rid of all the crappy people.” Honestly, that sounds dumb but it was selfish. I wanted an environment that I loved going to work every day so I manifested it.
High productive people do the same. I will say, the biggest negative is hearing a certain percentage of people flake out and say, “This isn't for me. I can't do this. I'm not interested in this,” or whatever. You question, “Am I doing the right things?” These people have their feelings hurt. A woman that came to me for a technician was very young and I said, “Has anyone told you that anything you've done is not good enough before me?” She was like, “No, of course not.” There's your problem. Your entire life, nobody has said that? I don't know how you guys are but that's mind blowing to me.
We do attract some former athletic people, people that played sports, and people that understood that competitive environment. At the end of the day, if I had a secret sauce to tell you which ones are going to work out, I'd be making even more money. I'd be doing that and nothing else because it'd be so profitable. Right now, the only way I've got it is to try to match values and try to match personality. One of the things that we talk about a lot is the worst mistake you can make is hiring an F player today.
Hiring a bad fit is the worst mistake I can make. Hiring some person who's going to feel victimized by every single thing that happens around them, going to make it all about them, a narcissist, some megalomaniac, or anything could be torturous on everybody else. That's the worst mistake you can make. You asked if there was anything negative, the negative is those people don't consider me or the management team to be the nicest people.
We do a class every year and it is why it's not our job to make people happy or why it's not a job to make our employees happy. It goes through this process of thinking of saying, “Happiness is on them and it's not on us.” The absence of misery is on us. We cannot introduce miserable conditions. It goes through specifics and generics about what I expect out of our managers and how they treat people and how they talk to people but reminding them that happiness is not an achievable goal for 100% of our people.
We have a satisfaction score and it's how many employees achieve this certain level of positivity on this metric that we run every year. Our goal is 80% and everything above 80%, we are concerned that we're creating an entitled culture. I've seen it at some of these other companies that I own. The employees are like, “You guys got rid of these snacks and I am pissed off. I'm not coming back to work until you get my snacks.”
We got rid of beer at one company, they raged at the office and refused to come in, “I'm working from home until you get beer again.” If you get above a certain level, we think that there's a little bit of detriment to it. Our target is 80% on the nose for that measurement, for how they measure it, and everything.
Patrick Baldwin: I wish people could see how you mimic people with the head. I haven't seen them side-to-side in a while. We've had a lot of phone calls over the last few years. I always walk away learning. Not just a little, I learned a lot every time we talked. You're killing it, a phenomenal business. I love having you on. I learned a lot. I'm inspired. Thank you.
Chase Hazelwood: Yeah.
Paul Giannamore: If we were out there in late ‘20, you weren't even doing $14 million back then. You've almost doubled in size.
Chase Hazelwood: In 2019, we did $7 million. We did just under $25 million in 2023 in the pest alone. That includes Christmas lights but not HVAC, plumbing, and all that stuff. All that stuff, we run a separate set of books and separate financials. I'm hoping to do $3 million to $5 million on that stuff this 2024. The pest control, I'm hoping to do $30 million this 2024. It's all achievable. I've got to keep my work up. A lot of that falls on me and me hitting my checkboxes every week.
My COO and my VP of HR, we are a freaking team. They hold me accountable. I was spending a little extra time away at the other businesses and my COO said, “You need to show up here. This is what I need you to do. I need you to be here more often.” I reengaged. In the first week, I'm here 40 hours or whatever, and he's like, “This is awesome. This is great.” The second week, he's like, “We had enough. Maybe a little less chaos. Maybe scale it back just a little bit.”
The best thing about it is the three of us have a relationship. We call each other out. We hold each other accountable. It's extraordinarily high-performance and it drives the performance down into every level of the organization. I'm extremely proud of my team. I'm proud of the company that we built and how we serve the community. I'm excited to keep it going for the next 10, 20, or 30 years.
Paul Giannamore: How are you allocating your time nowadays in general?
Chase Hazelwood: In general, I own a wellness facility. You can't tell because I've been growing horizontally as much as I'm growing vertically. I own a wellness facility that we're moving into.
Paul Giannamore: You do have a nice pinkish hue with the cheeks. I like that you glow.
Chase Hazelwood: Yeah, I glow. I put a little Vaseline on there. I've got the wellness facility and I spend about 5 to 10 hours a week there, organizing, and keeping the wellness facility. We provide supplements and we have a coffee shop there. The coffee shop is a money pit right there. If you want to find a way to lose some money, open a coffee shop.
My goal is 32 hours a week at Go Forth Past divided into 10 hours a week into marketing and the rest into strategy. When we say strategy, I want to include recruiting. A CEO's number one job is sales and number two is recruiting and that's kind of sales. My main objective is to drive recruiting, orient recruiting, and keep the senior top team organized properly. I spend a little bit of time on cash management and stuff like that because that's another part of my role. A lot of that stuff is in system form and I don't have to deal with it. It's not like it's some kind of big part of my job or whatever.
When I say strategy, let me dump in acquisitions. I probably spend a quarter of that time on acquisitions. My COO runs everything. Day-to-day-wise, if I went away for two months, three months, acquisitions will get pushed off, strategic stuff would get delayed, but nothing would happen. I could just literally turn my phone off and be gone for three months and everything would be fine. That's the cool part of where we've gotten to.
Paul Giannamore: My final question to you, when was that inflection point in the life cycle of your business where it got to the point where you can turn your phone off for three months and not everything would happen but the business would run?
Chase Hazelwood: There's a revenue point that's pretty easy to identify and it was $17 million or $18 million. The more difficult to pin down was having the COO and VP of HR in a position to where they had a level of authority and autonomy and the right guide rails. We use no lines, hard lines, and guidelines. Every time I speak to anyone in the organization about anything about the business, I have to tell them, it's my job to tell them if I'm saying, “Hard lines, guidelines, or no lines.”
If you say something, if you utter something out of your mouth, they're going to think it's the hard line, better do that every single time. We have guidelines in place and we've got the hard lines in place. Once I got that done, it ended up being a relatively easy process. We could have done it earlier. When I say $17 million, I had the capital to pay my COO a lot of money and to pay the VP of HR a lot of money and to let them build a team around them and whatever they needed. That was a critical moment.
I also would say too that when I give advice to other business owners of any type, your bookkeeper is more important than you think it is. Generally speaking, people have a budget bookkeeper or they have some lady that's been in the office for a long time. I have an extremely smart, sharp, and badass controller bookkeeper and she makes it possible. There's four people in that team, me, the COO, the VP of HR, and the controller. All of that came about probably in the last eighteen months ago.
Also, I have a set of consultants that help me set these things up for success. I have a lot of external forces that go into this. One of them is someone who helped me develop a plan and a program for my COO. He has a checklist. He's got 30, 60, 90, or 180. He's got quarterly goals. All of these functions are listed out in what his expectations are and how he develops into this role. The same thing goes to the VP of HR and the controller. That's a big portion of my once-a-year job, writing out these developmental programs about how they're supposed to develop this year, what I expect out of them, and what we're going to develop into.
I'm relatively flexible. Sometimes you create these programs or these goals and they don't work. I'm willing to change them and go in another direction. A lot of smaller companies, somebody could go away and the company would quit growing or whatever. Go Forth could keep growing if I went away for three months. We'd make the exact same money if I disappeared. By the way, if you want to be successful and grow fast, you better get that accomplished because the amount of work it takes to manage a company growing 20% or 30% a year at 10s or 20s of millions is incredible.
I said I hadn't crawled a crawl space in a long time but I'm looking at bank balance, spreadsheets, talking to banks, and setting up meetings with sellers or companies or anything. That's a whole new process. If you want to keep growing fast, you're going to have to keep pressing hard. In order to do that, you got to get rid of all the daily stuff.
Paul Giannamore: I have no doubt about it, Chase. Our friends and readers out in the industry will demand an encore from you.
Chase Hazelwood: Thank you, guys. I appreciate it. I love the show. You guys are leaders in the industry. I got hit by the bus, call Paul. If I get hit by a bus, that's what my wife does. I love listening to the show and I love being a part of it. This is awesome. Thanks, guys.
Paul Giannamore: Sounds good, brother. I'm going to be out in the Carolinas. I'm going to look you up. You got lunch last time, dinner is on me this time so let's get to a good place. It's got to be healthy though. You're in the wellness business so let's do it.
Chase Hazelwood: We'll go get some cigars. You like cigars, right?
Paul Giannamore: 100%.
Patrick Baldwin: Thank you, Chase.
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Patrick Baldwin: I've got my Checklist Manifesto. I’m going to do the Kindle version, at least. Yes, I'm checking it with Chase.
Paul Giannamore: That's good.
Patrick Baldwin: As the CEO, if he's having to give input more than two times a year, it needs a system. His COO, which is a little more involved in the business, if he is involved at one time a month, they're debating between one time a month and one time a quarter, then it needs a system. Everything is getting documented and systematized. He's measuring not just what you do, but the data that you measure. There's even a system for holding that accountable. It's like a system of a system of a system. Derivatives of systems blew my brain. Incentives with Chase, I don't know of any companies that have a way for technicians to get into the six figures like he does.
Paul Giannamore: It was the biggest thing that struck me when we were having barbecue with Chase a couple years back when he was talking about how much he pays these people and I was floored. He keeps it open ended on the top. If you're willing to come in and bust your ass, you're going to make a lot of money. Clearly, the people over there at Go Forth are driven because he's grown the hell out of that business so he's doing something right.
Patrick Baldwin: The other thing, and how he does things so differently, is trust. He talks about trust multiple times, almost the antitrust, like, “Check me.” Inspect what you expect or trust but verify or whatever you want to call it. Why should you trust me? That's hard for me to put my head around because when I think of business, there is a lot of trust that goes that way. He's like, “This isn't really a trust relationship.”
Paul Giannamore: You talk about high-trust organizations and then of course the opposite. His rhetoric is different from what you hear from a lot of folks. To his point, when they made that acquisition of that company, they didn't even know where the vehicles were. There's a lot of that. There's a lot of trusting too much out there, so to speak.
It comes down to striking the balance and he clearly has. The next time we get back out in North Carolina, I want to dig a little bit deeper into what he's doing. We had that discussion with him. PB, when we head back out there, I want to hit up a couple of his offices and see how this works in practice. I might even pull some of his team members, that's what I might do.
Patrick Baldwin: It sounds like a great field trip, get out in the field, and do a little research. He was moving out of his office. They had a great building and great location and he's moving into a bigger location where he has room to expand his call center. He's killing it. I love it.
Paul Giannamore: He's also an interesting character where pest control is not his only shtick. He's got those Makos. He's got the data analytics business and wellness center. He goes to the wellness center after the barbecue, I guess.
Patrick Baldwin: Yes, with your smoothies, your coffees, and all that. I do want to ask you this though, the anonymous M&A. I can see people doing this poorly. If he has someone that's calling on companies doing the NDA and then they have that firewall between her and him, I don't want anyone doing a backwards way of doing that, saying that you have an NDA and then feeding your back channel back into your CEO. I see that going poorly if it's not done correctly. It's hard not to tell your boss who’s signing your paychecks what you're doing during the day.
Paul Giannamore: That seems to work for him. My perspective remains the same, if you're going to focus on doing M&A, you own a pest control business, and you want to go out and make some acquisitions, if you've got the time, there's nothing better than building the relationship with potential sellers out there.
Sure, they not want to tell you a lot of things and that's probably true. I also think there is something to be said by having that actual relationship where if something happens, you're the one that's going to get a call because they're like, “I met Fat Pat, he's a great guy. We go to breakfast every once in a while.” You can go out and see these guys a couple of times a year at breakfast with them and slowly dig in.
When you put the anonymous party in between, the problem that I would have is when somebody calls me up and says, “My name is so and so. I work with a buyer who's interested in your business.” My first question would be, “Who's that buyer?” “Don't worry, Paul, we're not going to provide any information to the buyer.” Who are you working with? I would really want to know who that is.
To me, it would feel less than transparent if I didn't know that. Now, maybe that woman is saying, “It is Go Forth.” I don't know, we didn't ask Chase that, maybe she's saying that. “By the way, it's Go Forth. We're not going to provide any information to the company, we just wanted to check on things.” If you're going out and attempt to do some deals, the old-fashioned way of spending time with the folks in your market is probably the most effective way to do it.
Patrick Baldwin: It's more subscribing to the Bill Hoffman method.
Paul Giannamore: Yeah. The Bill Hoffman method is a great method to do. He's been very successful with that.
Patrick Baldwin: Interesting, to each his own. Chase, in this case, where we know he's doing Makos, picking up some of these other resi commercial services, I don't think it's just pest control and I don't think it's just his market. He's opening himself up and probably able to scale differently that way.
Paul Giannamore: He probably doesn't have the time to go out and wine and dine all of these local guys. If you can get somebody else to do it, it's a good way to make himself more efficient. We'll dig into that a little bit more when we get out there, PB.
Patrick Baldwin: I feel like we're just scratching the surface with this guy. Chase, thank you for hopping on The Buzz with us. I have a lot more to learn from you and getting you back on soon. We're doing our researching.
Paul Giannamore: Chase was fantastic. Thank you, Chase. Until the next episode, PB.
Patrick Baldwin: See you, Paul.
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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.
Chase Hazelwood
Jeremy Kreer - past episode
The Checklist Manifesto
