The Home Service Expert Podcast
00:02:05 · Kyle Erdmann
[00:02:05] S2: I mean, my dad founded the business as you said. Worked in the business since I was 12. I swept floors. I was a truck driver. Eventually, I learned how to frame and that was for the first iteration that built custom homes. When I came back from college, we had started an exteriors business, which my dad and I, similar in a lot of ways, which means we butted heads a ton as business partners. But I'm a sales and marketing brain, and he was a guy who liked to put things together, but neither of us were business brains. So, we kind of just puttered around at about a $5,000,000 business until we couldn't figure out how to get past it. We tried organizations, nothing really helped, and little did I know the person I lived with was gonna be the catalyst to really push us past. So I gave Becca the best birthday present ever on her thirtieth birthday was her first day with us. But yeah, she had a background in commercial interior design and the pandemic affected her industry a lot. She was taking care of our oldest kid at home and I was super busy. And I was still doing renderings at the time for every customer and she picked up the Slack for me, did the renderings for me and realized she had a knack for it. So, in June, she joined the business as a designer. She spent a couple years as our design manager, putting together beautiful projects for customers. Then in 2023, we had the idea of splitting off this beautiful outdoor living business that we started as our passion project. That's all this was supposed to be, was a passion. We were doing siding, roofing, windows before. So, and our passion project has now spiraled. 2023, we gave her... We started giving her more responsibility or really, she took the responsibility. She isn't one to wait around for things, so she took everything. Took the bull by the horns and just said, I'm gonna I'm gonna turn this baby around. Taught herself P and Ls, taught herself budgeting, pro formas, and 2024 was the first year that we operated the business together, and my dad took a little bit of backseat. So you wanna talk about from 2024 on?
00:04:10 · Becca Erdmann
[00:04:10] S1: Well, think to back up a little bit, I came in, yes, 2020, and there were zero systems, zero processes. So I didn't have any background or really knowing what to do, but it was just very apparent. Customers needed to be communicated with, people weren't applying for permits, There weren't any pictures of job sites. There was no social media or talking to the marketing company. So I just took on all these additional tasks myself, and I created systems and processes. And then I would hire and train the person to do each job and get it off my plate. And that's kind of how we started growing and scaling and getting all those different positions going. And then, yeah, 2023 is when I read Charlie Gandel's lessons learned booked and lessons learned too. And that's really what taught me everything. And then I just called him and I was like, look, Charlie, like, don't know what I'm talking about. I didn't... I don't know what a P and L is. I don't how to read this. I have no pride. Can I call you and ask you questions? So he he would answer my calls. I set up calls with him, that's how I taught myself everything. And then from that point on, yeah, I started managing and running the business, looking at the numbers, creating KPIs, all the things. So that's the background of the beginning.
00:05:19 · Tommy Mello, Kyle Erdmann, Becca Erdmann
[00:05:19] S0: Yeah. That's interesting because I remember when I was 5,000,000, it was 2013, the middle of twenty thirteen, and it's just my average ticket was much lower than roofing, siding, or windows. And like those tickets are like massive in comparison. Like my ticket was like 800, and those tickets are like $15.20 grand. So that... But they're more complex jobs, obviously. [00:05:46] S2: Yep. That was that was where we struggled was, I mean, the dynamic between my dad was I I sold whatever I could and he just figured out how to put it together, which naturally brought together a great great relationship between production and sales when sales is just winging it and production has to pick up the pieces. [00:06:05] S1: Well, nobody is looking at the numbers and none of it was making any money. So, when I started tracking the data, and we separated the companies, it was very apparent that outdoor living, just a deck or just a pergola, we could be profitable on and we can control that. But when there's siding, roofing, windows, doors, front doors, garage doors, fascia, soffit, gutters, we were building porticos. We had to be masters of everything, yet nobody could be 100% expert on anything. And so that business, when you look at the data, it was never profitable and it was never making any money and there was no point in doing it. So we finally got rid of it. Well, we're finishing getting rid of it. [00:06:40] S0: So just outdoor living. [00:06:42] S1: Correct. Now we're growing and scaling just the outdoor living business.
00:06:42 · Becca Erdmann, Tommy Mello
[00:06:42] S1: Correct. Now we're growing and scaling just the outdoor living business. [00:06:44] S0: Which comes with the design you got the background and I mean, designers. So there's the ASID out here. And that's like huge designers and tapping into that network could be, I mean, every designer, I work with a lot of designers and they just, it's crazy how much money they could charge. I mean, I think it's a dying industry just because now so much more transparency with LLMs and just like you can take a picture and find out how much it costs. [00:07:07] S1: Yeah. But [00:07:08] S0: there are still people like the rug store always shun rugs. I mean, you could buy the rug for 10, they're selling it for 25 to their client. It's like almost like a scam. I'm not saying everything is, but I'm like, oh my God, like don't get me wrong, it's a talent to be able to see what this room could look like. But what, like I like flat services. Me you want to make 15% and be completely transparent. Whatever. Tell me you want to make 25%, but you're still saving me 20%. Yep. And then your design skills. But man, I... So outdoor living. Outdoor living. Outdoor living. So give me an example of like what a big job would look like.
00:07:08 · Tommy Mello, Kyle Erdmann
[00:07:08] S0: there are still people like the rug store always shun rugs. I mean, you could buy the rug for 10, they're selling it for 25 to their client. It's like almost like a scam. I'm not saying everything is, but I'm like, oh my God, like don't get me wrong, it's a talent to be able to see what this room could look like. But what, like I like flat services. Me you want to make 15% and be completely transparent. Whatever. Tell me you want to make 25%, but you're still saving me 20%. Yep. And then your design skills. But man, I... So outdoor living. Outdoor living. Outdoor living. So give me an example of like what a big job would look like. [00:07:43] S2: So, we have our company really narrowed down to three main scopes. So, we build deck still, but our main revenue source would be structure pergolas. So, we build motorized aluminum louvered roofs. So, we build pergola systems that open, close, the tops do, and then we do motorized screens for the sides. So, we do misting systems though, heating systems in them, lighting, you name it, we can turn them into like convertible rooms really. [00:08:10] S0: And then what made you guys wanna expand past, you you know, why not take more of the total addressable market in Chicago? Why expand to Phoenix? And why Phoenix? [00:08:19] S2: So, it's a it's a funny story. So, last year, we had the... Or we were fortunate enough to to meet Brian Gottlieb. [00:08:25] S0: Oh, such an amazing human.
00:08:25 · Tommy Mello, Kyle Erdmann, Becca Erdmann
[00:08:25] S0: Oh, such an amazing human. [00:08:27] S2: He became one of our best mentors. Beyond the Hammer was a book that changed the way I wanted to lead and help help me open my eyes to leadership more. But... So I had met him at a conference. She met him at a different conference. We did a phone call with him. Luckily, she was on it because she came very prepared, whereas I don't really prepare for much. And he just said, you guys have a lot of good questions. Why don't you guys come down and, and hang out? So, we went... We came down to Arizona. We hung out with him, and we'd always vacationed here and said we'd like to eventually have a place down here. [00:08:59] S1: That was our dream. [00:09:00] S2: So, we, when we were down that time, we said, hey, in like twenty years when the kids are away at college, we should get a second place down here. Yeah. And then fast forward two months later, our manufacturer called and said the dealer down here is failing, we'd like you to open up down here. And we we, being opportunistic people, we believe the universe operates at a certain speed, and who are you to fight what the universe is asking you to do? We said, you know, we'll never... Are we ready for it? Probably not. Can we get ready for it? We can be ready enough. So we we opened up down here in February. [00:09:28] S0: And how's that going? [00:09:29] S2: It's great. [00:09:30] S1: Everything's great except for what I couldn't predict was getting permits is a pain in the ass. [00:09:36] S0: Harder here. Yes.