Buyers and Builders
00:26:19 · Sam Allsopp, Mikk
[00:26:19] S1: No. We try to keep that... So we have different metrics. We have, like, full blown hard cancellations. I'd say that's, like, 10% right now. We're trying to get it lower, and that's just kind of a a byproduct of doing this one call close model. I think we can definitely get it down. We track net close though, and it might... You know, some people I talk to, for some reason, it's not super relevant to their business, but in South Florida, there's a lot of hoops you have to kinda jump through to have like a clean deal. You have to have the HOA information, you have to have the permit docs signed, it has to be a wet signature in a lot of municipalities, so you have to have the title selection, right, so there's... Getting a contract signed is like half the work, and then actually having a net deal is the other half, so the reason I'm explaining this is at the end of the month, sometimes there's deals that are contract signed, they didn't cancel, they're they're going forward with us, but it... We're not gonna net it and pay the commission front to the sales team if it's not netted by a certain time in the month. So maybe that was more the number, you know, gross versus net that I was talking about. That could be another 5%. [00:27:23] S0: How much can we cover when it comes to when it comes to operations? Actually, building $50,000,000 worth of roofs. Like, how much do you want to cover about this? How how much have you learned on on this over over the years from your business partner, Andrew?
00:27:38 · Sam Allsopp
[00:27:38] S1: A lot. I mean, that's a lot of us just kinda figuring out as we go. Right? Like, neither of us came from a $50,000,000 roofing company. So, you know, you go all the way back to intake, right, like intake from the sales team to pass off to the back office. What does that look like? What are the SOPs? What information do we need to have? Who's calling the homeowner? What is the script when they call the homeowner? We're explaining the timeline, the timeline has to be specific to their municipality, their h... If they have an HOA, don't have an HOA, permit speeds, right, crew capacity, like understanding how far we're booked out, so and that's just one tiny piece of the puzzle. Right? So every single stage in the process has has an SOP, has a process that we follow. And the whole idea is just, like, we we can't keep these people in the dark. This is a big investment for them. They're putting a lot of trust into us to to do the roofing project with us. So how do we create just like a 10 out of 10 experience where if anything we're over communicating... This is more customer facing. If anything we're over communicating and they're like, hey, I'm good. Like, you you guys don't have to update me when, you know, this piece of paper comes back. Right? So... But I prefer that versus, hey, I gave you guys a deposit on a $35,000 roof and I haven't heard anything. Right? And that's that's a lot of the reason that a lot of companies get one star reviews or don't get referrals is just because they focus a ton on getting the sale and maybe they are really good at building roofs, but what does it feel like to be a customer from contract signed to actually starting to put the roof on. Right? So, yeah, how much I I can get into, I mean, we we break it out. Like, we have business services. That's our back office. That's all the work that has to get done before we can even go out and build the roof. Bunch of touch points with the with the customers. There's a customer success manager that gets assigned to your job. You know, they're keeping you updated with everything. We do have automation, emails, SMS that go out based off of different stages in the CRM. You know, any questions they have, they're welcome to call, and and we we get with them. We run it like a... I guess the terminology would be more so a conveyor belt. Right?
00:29:42 · Sam Allsopp
Instead of in the beginning, it was job passed off. This person takes it from job passed off all the way to production complete, even collecting the money. Now we've built out, like, there's different columns, and everyone kind of owns their state. We were only able to do this when we got to a certain size and kind of take that overhead on, but it's definitely more efficient, and I think it provides a better, you know, customer experience. So you have your business services all the way from intake to job scheduled. Once it gets to job schedule, it gets passed off to a project manager. Project manager is the one who's taking it, you know, from from job start to to final closeout. South Florida, have tons of inspections, engineering. You know, there's... It's there's... It's not like we can sell it today and go put a roof on tomorrow down here. Takes, call it, forty five to sixty days from contract signed, which is a big reason that it's a little bit more difficult to to roof down here, but, yeah, I mean, and then it was just building out the the teams that that do that. We have our field supervisors, we have our foreman, you know, who runs material, who calls if the homeowner hasn't made their payment yet, who, we forgot, you know, we need two more rolls of underlayment, or they left a wrapper on the... In the driveway. Right? Like, there's just... There's... We've built out if this happens, then what for pretty much every single situation, and then who's in charge of that.
00:31:02 · Mikk
[00:31:02] S0: How many times have have things break for you over over those years? You selling too many of those jobs, and then Andrew is saying, like, okay. Wait a minute. We are we are just not enough people to actually do those jobs, or there is an unexpected event happening, and then this messed up a lot of things for you. Like, are there any any stories like this and which which you can share?
00:31:24 · Sam Allsopp
[00:31:24] S1: Yeah. I mean, everything... Every single stage, every single year, something that worked in the past, like, breaks. Right? It's just it's just part of doing business. If you think that you're gonna go in and scale a company and you'll never have... You'll never break your your processes, like, you're definitely in for it. But it's a good thing. Right? And it's it's really... A lot of it is just, like, trying to look forward and maybe what we do is is probably hiring to fulfill more than what we currently have in our backlog or what we're producing and trying to look forward and say what are potential issues or what are potential, you know, gaps in the business when we get to this this is what we're budgeted to do and we're pretty good at executing on on budget. So a lot of it is kind of delaying gratification and building up your your staff and something that a lot of companies don't do. Right? They kinda wait for it to break and then they get a bunch of one star reviews and then they're scrambling. They've got this big backlog. So, yes, it might burden your profitability a little bit, but when you're growing as fast as as we're growing and, you know, some some other guys I've talked to that are... That they're growing, it's it's almost inevitable. You kind of have to try to look forward and fix things before they even break and kinda see where those constraints will be. That being said, no one's perfect. You can't always do that. So, yeah, it's a constant balance. It's like a bounce back and forth of production. Hey. We we need more jobs. We need more sales jobs. Right? Because they just told you that it was the opposite. So you kinda pull back marketing, pull back spend a little bit, and then, you know, sales is like, okay. We gotta sell more. We gotta sell more. And then production's like, HL out. You know? And then when we fulfilled that, they were like, hey. We need more. So it's it's a constant kind of Mhmm. Swing back and forth, but we've got pretty good... That not being as much of an issue anymore. It's pretty consistent.
00:33:07 · Mikk, Sam Allsopp
[00:33:07] S0: And how has it been the the the profitability over over the years? Because the growth has been pretty pretty rapid. How have you been able to to to finance the aggressive growth? [00:33:17] S1: We have been profitable every year. I'll say that. You know, a high growth doubling year over year and and investing a ton in the marketing and sales, sometimes that could burden your, you know, your profitability even a little bit, but... And it has. I mean, you know, we're not... We're... We were... We wouldn't quite be where we were if we were like, hey, we just wanna stay constant, grow five, 10, 15% a year. Like, obviously, we could be more profitable if we did that, but because we're growing so fast, we're constantly reinvesting into marketing that next month and kind of reverse engineering where we wanna land at the end of the year. So marketing spend and then just hiring ahead of of the curve is is is definitely important, and you gotta kind of decide as a business owner if that's you're comfortable doing that or if you wanna kinda just more so maximize profit and grow a little bit slower. We went the latter. But we've been profitable every year. This year, we're... We really doubled down on, alright, let's get this EBITDA to where we want it to be, and we've executed. You know, obviously, 36 to 50, not as much growth as we have in the past as a percentage, but we've been able to pretty much double our profitability and still still grow.