The Home Service Expert Podcast
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.
00:09:36 · Tommy Mello, Becca Erdmann
[00:09:36] S0: Harder here. Yes. [00:09:37] S1: Which I would have never guessed. I would have thought Chicago would be so much more difficult, but everything apparently is... It's just different here, so it's not... I couldn't have expected it, the people we talked to here kind of made it seem like it would be easier, but it's just taking forever. So all my numbers are behind because we couldn't produce the revenue I planned due to not getting the permits on time. [00:09:55] S0: I think AI is going to help with the permitting. You know, it just hasn't caught up, but permits can be a pain in the butt. So how does it work? I mean, you're raising two boys. You're doing business together. Hopefully, there's still, you know, there's marriage, there's parenting, there's business, And sometimes those three things don't all mix.
00:09:55 · Tommy Mello, Becca Erdmann
[00:09:55] S0: I think AI is going to help with the permitting. You know, it just hasn't caught up, but permits can be a pain in the butt. So how does it work? I mean, you're raising two boys. You're doing business together. Hopefully, there's still, you know, there's marriage, there's parenting, there's business, And sometimes those three things don't all mix. [00:10:21] S1: Well, mean, I think the good thing is that we've been together for about thirteen years. So before we even had kids, we already had a very solid relationship. So we're really good with communication. We're best friends. We're partners. We're partners in life. And I think that matters more before we even started getting into business together. Or it's the same mentality you have to have going into having kids. You're managing something together. You have to be on the same page and you communicate. Have So whether it's kids or a business, it's all kind of the same. And we're just really great at communicating. We've already had gone through. We've grown and developed together personally and professionally. So I think taking that into having kids, like it's just a different... It's the same, but it's different. Like it's just a different part of the day that you're both managing together. You both have to be aligned. You both have to communicate. Both have to be on the same page. At the office in front of employees or at home in front of the kids. So, I mean, I think it works great.