#161: From 38% to 55%: How David Mayster Mastered His HVAC Margins // Next Level Pros Podcast

Today we've got something that's going to hit home for a lot of business owners out there. I sat down with David Maester. He runs a successful HVAC company out here in Seattle and we got real about the numbers. We dig into the difference between thinking you're running a 55% gross margin business and realizing that you're actually a 38% and how to get those numbers locked in so that you can actually scale. Plus, we dive into his personal journey from Ukraine to overcoming addiction, turning to his faith and building a thriving business. So if you're looking at getting your pricing right and find a bit of inspiration, you're in the right place. So if you're looking at getting your pricing right, and find a bit of inspiration, you're in the right place. What's up everyone? Super excited to have David Maester here today with us. David is an entrepreneur in the HVAC space. He owns a shop, Maester, Heating and Airs. That's the right. Cool. Maester Heating and Air over in Seattle, Washington. Right. Is that where you guys are, Baster? We're South of Seattle. We're in Lakewood, Washington. Okay. Lakewood. You know, us Eastern, Washingtonians, like we think it's all Seattle. I know. That's what I'm going to ask. Hey, where are you at? I'm out of Seattle. South of Seattle. South of Seattle, dude. So he's at the West Side, a little bit strange over there, not quite like the sea sideers. But definitely has a cool story, has been building the HVAC space for a while, family moved here, when you were younger from Ukraine. It's cool. We actually have several different people that have like a Ukrainian background in our community. And just cool to see like the hustle, the grid, like the first generation wealth building, and just a lot of fun. So give us a little more color to the story. And then let's dive in. We're going to be treating this like a live console, diving into the numbers and figuring out like what's working, what's not working, and hopefully we got a good game plan from this. Yeah, I love it. Well, first of all, thank you for having me on here. This is a privilege. This is my first podcast ever. Oh my goodness. Let's get him around of applause, ladies and gentlemen. What an honor. So it's really an honor to be here. I do want to say that my journey has been very unique just because we moved countries. Yeah. I was born in the United States of America in 2001. I was eight years old. Nice. There's nine kids in our family. Wow. Where are you at in the peckin order? I'm number seven. So the perfect number. Yeah. That is the perfect number. So at the bottom bottom end of the peckin order. Correct. Correct. Seven sisters. One brother. Wow. Yes. Cool. And your brother is your business partner. Correct. Yeah. It's interesting if you guys ever have a chance to meet David. So like you came here when you were eight and your brother was 13. Yeah. And he's got a pretty thick accent. And you basically can tell you're from somewhere else. He has a funny story because he was kind of like a bad kid in school. So he didn't do any kind of, that was a bad kid too. But I think he went to truck driving for 11 years. So he was just in the truck with his wife. And you don't really talk to a lot of people. But he ended up like the way that he improved his English was just because he started watching movies in English, changed his phone to English language, and with subtitles. And now we have like a lot of refugees coming in from Ukraine right now. Yeah. And he's like, this is what worked for me. You got to do the same thing you want to learn English. That's cool. Why did your family come originally? So we just kind of are everybody started moving from our family down here. So first my uncle and aunt came in like 93 or something 92. And then they were just one by one. And then why Seattle? We don't know. I don't know. You know, one thing I've never quite understood is like when people move from maybe like a poorer situation, which happens, you know, a lot, whether it's from like certain like southeast or Asian countries or you know, Latin countries, and they come and they move to a big city. And it's like, dude, that's the most expensive place. And like I've never understood why, you know, it's like, you know, you got like these people that literally came from nothing that are living in New York paying $5,000 for an 800 square foot apart. Yeah. It's crazy. I think I mean, people that come from other countries that don't have nothing, they know how to work. Right. And if you know how to work, America, we reward you for that. Yeah, for sure. I think that coming here just, you know, there was a big Slavic movement in the early 90s. And a lot of people came in as a big Slavic church down to coma. It's cool. Kind of what, yeah, kind of very family oriented. Right. I know you guys are very like faith-based. You got to have a family yourself. Absolutely. A wife. A couple kids. Yeah. So I have a beautiful wife, Natalia, and I have a son Solomon. He's six years old and a 40-year-old daughter in Abigail. So cool. Family is, yeah, so much. I mean, really the purpose of why we do this whole thing, right? Yeah. I mean, they God bless them. Yeah. Yeah, for sure. It's a sacrifice. In the end, you know, it's rewarding because when you stick through it, you know, you'll be able to reap the fruit. Hey, guys, it's Chris. If you're finding value in what you're hearing, go ahead and like and subscribe. That way, people just like you can find this content for free here on YouTube. Now, let's dive back into the show. Let's talk about Maester heating an air. And so you guys just specialize in HVAC, right? Yeah. Right. Yeah. Cool. Plans to expand into like plumbing and electric, anything like that. Probably plumbing, but definitely electric. Yeah. Definitely on the electric side. Currently, are you carrying like any 0102 electricians, which are for those that are outside of Washington state, that means like a commercial or residential journeyman electrician? Yeah. No. So we subcontract all our electrical work and, but the goal is to bring that in house. Love it. Love it. Love it. And how long have you been running Maester heating an air? We started in 2019, March. I actually started the company two days before my son was born. So we had two babies at once. And the company name was simply efficient, heating, air conditioning, LLC. You were what? 26 at the time? Yeah. 26. So young, hungry, passionate, you know, could do everything in the world and why do you want to start your own business? I dare really want to start my own business, to be honest, whenever I had my life transformation back in 2013. I really wanted to be like a pastor or an evangelist. And I mean, I am an evangelist, to be honest, but I wanted to be like a missionary guy or something involved with my faith because I used to be a drug addict and a drug dealer. Oh, wow. Tell us more about that. Yeah. I'd love to. That's my favorite story. All right. So, you know, coming from Ukraine where we're super poor, we lived in the village, like village city type area and coming to America, it, my favorite thing that was like, hey, my mom can't spank me anymore. You know, because I was a bad kid. I was like, the black sheep. And I started wrestling with the wrong people and, you know, parents are always wrong and my friends are always right. And then in high school, like for, you know, middle school, you started dabbling some unique stuff. And then in high school, I went into heavy drinking and cocaine and high school. High school. Yeah. Wow. I didn't realize cocaine was like available. I mean, anything was available. I went to Foss High School. So Foss is boss, you know. And I was there at the skate park. I mean, if you know Foss High School, you know the skate park. That's where all the putt heads and everybody was that. And the coca addicts were hanging out, I guess. That was on the low, but yeah. That's whatever. But basically, it ticked me down a path where I thought I was free, but a cigarette controlled my everything, my life. If I was hungry and I had 10 bucks, I'd go buy a pack of cigarettes. And I would start smoking cigarettes. Oh, as Daniel for cigarette was actually in Ukraine with Daniel. When you were eight. Yeah. Wow. Wow. And you liked it at that age. I don't know what I was doing. But I mean, and then later on after like middle school, you kind of, oh, this is cool. You know, someone bought me and my buddy a couple packs and we smoked it until we threw up. You know, sounds fun. It was just, but anyways, so high school went into the crazy and about, you know, so on our culture, actually, there's things that you don't really do because we're conservative, Slavic culture, Christian. So you don't like move out and move in with a girl. And that's what I did. You know, moving out, living with a girl just with your current wife. No, no. So it was a shame to the family kind of thing, you know, but God had his plans and he had his hand on me from that time because my mom prayed for me for years. And my mom was like a prayer warrior. So she would pray until the wall sweat. You know, she would just go in and she did not let the devil have his way, even though my friends were dying and getting girls pregnant and all that kind of stuff, you know, kind of ruining their lives. But there was a time where I became real with myself and it was about six months before my life really transformed. I just said, you know what, if the world tells me that this is what life is about, I have it. I had money, you know, I had a really, oh, say a good looking girlfriend, you know, how were you making money and dealing drugs? No, no, I actually started to work. But I actually always worked, but I started to work in hardwood flooring and then I got into HVAC in May, 2013. So you were 20 years old, 20 years old. Yeah. And but that's when more money came in because I actually got into a trade where you're making good money, you're making overtime. So guess what? You could spend more money. And what did I like to do? I like to work and I like to party. And that was it. But then, you know, I tasted that party life, the freedom kind of having whatever you want. And I was just, you know, this is, this is like a lie. Like this sucks. And I became, you know, the Bible says there's a heart that's a cold heart. It's better than a warm heart. You know, and I became cold and I said, I'm not a Christian. I don't read the Bible. I don't go to church. I don't even pray. But I believe in Jesus. And I became real. And that's when I hit like the low point. And I broke my finger. And I don't know what to do except that was a home and board started using it home. And that's when I got into ecstasy, Molly, cocaine, all that stuff. And there was a time on December 16th, 2013. I was high in five drugs. And I was gone. This is huge. I mean, this girl broke up like four times a day. You know, it was that bad. Yeah. I remember I did some of that. Never thought I would have seven sisters. And, you know, I just kind of like pushed her into a wall that I would never do that. And I realized that something's inside of me that controls me. And that's not me. That scared me because the Bible had, it's a clear answer in the Bible. It says, if you do sin, you're slave to sin. Yeah. So hold on. I'm not asleep to the devil. But yes, I was because all my fruit were all about lust, pride, you know, just be me. I became my own God in the sense. And I was desperate and I became like that night. I became suicidal. So I'm not going to live like this anymore. And I had one little string of hope left that there's a God that still might help me. And that night came to my room. I actually had a, I totally had a broken finger. I came to my room. I fell before my bed and I said, God, I wish I could come to you. Clean, white, pure, but I'm coming to you as I am. I have nowhere else to go. So then if you don't help me, I'm not going to do this anymore. And God knew that I was real about that. And he encountered me in that room. It was December 16, 2013, about 7, 20 something, 23 in the morning. I cried my heart out to God for two hours. I confessed anything and everything I could. Anything came to mind. I would just go, I'm so sorry. I don't want to be this person anymore. Please help me here. And I ran out of words. So what I said was, amen. That's what you say at the end of the prayer. And I didn't know that there's such a presence or a love or a wholeness out there. And I was seeking that every single thing. And what happened was when I said, amen, I just started to get up because I was done prayer and praying. And I literally felt chains ripping off of me. So if you imagine the darkest ball and just cracks and then this light coming out of it, that was me being born again because the Bible says, if you're born of the spirit, that's when you're born again. And from that day, I never used drugs. I never had to go to rehab. I'm talking about I was picking up like cocaine would fall off. I would pick it off the carpet type thing. I was that bad. And nobody knew. And I was using in Daniel's apartment. He had no idea that I was going through this. So when I tell you that God had mercy on me, God had mercy on me. And like Bible stuff started happening to me. Like there was a guy that always invited me to church. I don't care about Jesus. Like, I don't want to go to church. I want to part. I'm going to go hand my friends. You know, we're going to go fast. You know, whatever. You're going to get drug or you're going to just do dumb stuff. When I encountered Jesus, that's the first person I thought about. And I was looking for his number on my phone. And I would kind of flip phones in high school to make some money. I'd flip. It's kind of what you do. You just flip stuff. And I never saved his number because it wasn't important to me. So when I was looking through the phone, trying to find his number, I couldn't find it. I said, I'll see you in my church because I want to go to church. So on Monday, I give my life to Jesus. By the way, my finger got healed. That broken finger. They take my cast off that day, a month and a half early. Well, the doctor checks my cast. So your finger is fine. You don't need to sing more. So my finger gets healed after I've become completely sober, which I shouldn't have been because I was high in five drugs. On the next day, you know, us slavics, we love the sauna. Like, that's our thing. So after my cast was gone, I was able to go to the sauna now, which by the way, it was a great tradition. Yes. And then I love the big, big fan of a nice slavic spa with an ice bath. Yes. Yes. It's great. So on Tuesday, I go to the YMCA where my dad works and I come home. And this guy, Tim, that I was looking for or I wanted to meet, was at my house. Wow. And he told me, Hey, David, I know it's going to be hard to believe, but I haven't a message for you. And he said, I want you to know that God sent me to you. And I want you to know that God heard your prayer. Wow. Because scripture is absolutely 100% accurate because what was going on in my life that Tuesday, only God knew. And I was dealing with doubt. Like was I just tripping? Was that I mean, counter God? Was this just as crazy high? You know, the Bible says that there's a seed that falls on certain soil or on rock, or shallow, and enemy wants to come and pluck it out. And that was happening with me that Tuesday because I was doubting the sole situation. But when Tim just shows up and he's like, you're alive by the prayers of your mom. So cool. And all that doubt just shattered. And I said, no, I'm telling everybody about Jesus. So for me, like, not ashamed, I don't care who I'm in front of, I encounter Jesus. I love it. And ever since then, like, my life changed. But I wanted to be in ministry. Didn't really care about business or money at all, actually. Because I was, I became so, how can I say, freestyle with money? Right. That God had to, hey, you gotta be a steward of this. You can't just be giving it away. And you know, people start to use that and all that. But that's later on. Well, dude, thanks for sharing with us that that's a remarkable experience. I mean, coming out of that, you know, I've never had, you know, had to face that kind of pits of despair in my own life. But very powerful. Yeah. Oh, yeah. So that's awesome. Thanks for sharing that. Yeah, that's a good story. So you go from there and you wanted to be a minister, but eventually you stuck in the trades? Yeah. So basically, I found passion and just doing good and whatever the gift I got gave you. So when I saw that, hey, this is actually a place where we can serve people and because HVAC is a very unique trade, you know, you're there underneath houses, you're in the attic, there's stuff disconnected and done incorrectly, which could damage people's health and life and all that stuff. And I just loved doing the right thing. Yeah. Like, that to me, that was just like, I know that I know that I did my best. That to me satisfied me. But what really took me away from the path of ministry to business was I was looking at all these evangelists and crusade, you know, but Ryan Harb, Bonkey, Daniel, Kalinda and all these big boys. And I loved how they were bringing like thousands and thousands of people to the kingdom of God. But I think I know personally that was more for me than for God. Right. Yep. So that was my idol, not really like, oh, I'm going to be a great evangelist, all this stuff. So then I went to a different church and I went to a church called the church for all nations. We still go there. I went there, started going there in 2016. I'm a wife in 2017. Pastor Bill Wolfson, shout out to Pastor Bill Wolfson, amazing pastor. We have an incredible pastor, Dan right now. Pastor Bill Wolfson was the pastor and he showed me him and Dave Ramsey showed me that money has power and power needs to be respected. Absolutely. And you can do a lot of amazing things with money. Yeah, I'm a big fan of, you know, money being the great magnifier of who we are, right? When our heart is dark and not in the right place, money can do some terrible things, right? And we're going to go with lives and when our heart is in the right place, money is the great magnifier that can, you know, spread his word, can give back to communities, serve, impact a lot of different lives. So, you know, that's one of the things I'm most passionate about with next level pros is getting people to a very highly profitable position and teaching them how to be great people and use that money in the right way. And so, yeah, I think obviously, you know, your experience has been the same with learning from your pastor and whatnot. And so, that's awesome. So then you fast forward, you start this company in 2019, you initially, do you have business partner at the very beginning? Yes. So, me and my brother and I are a lot of partner together. He's the one that actually trained me in HVAC. I was his apprentice, he was my lead. So, 2019 was awesome. You know, 2020 COVID hit. Like, if you had breath, you had work. Yeah. So, I think that was a big plus for our company and why we were able to hang through it because I didn't know about, I just had to do installs. Right. I didn't know there was like, you know, what to charge, what to pay. Yeah. For sure. For sure. For sure. This price, I'll do it for this. Great. Yeah. You know, it's interesting in the trades. You know, a tradesman becomes a business owner, sometimes out of necessity, sometimes out of luck, sometimes just like wanted to, but really doesn't necessarily know what they're doing, right? Right. They get in, they learn through a lot of mistakes, you know, it bumps and bruises along the way. What was like, you know, those first few years, what was like the biggest mistake that you could pinpoint? Partnership. Partnership. You have to be partnered with your brother-in-law. What was the difficult part about that? Mindset. Yeah. And motives. Yeah. And what do you mean, like give me more depth there, like mindset and motives, what does that mean? So I've always believed in buying your time and gaining freedom, especially if you're going to be on the line, it's your business, it's your responsibility, you take all the hits. Yeah. If I want to, you know, we can make great money being installers or sales guys or whatever, or actually salesmen, they make stupid money, but they don't have to carry the burden to make a mistake. Okay, we'll take it off my, whatever, right? Next job. But I was always focused on buying my freedom and that was not the same kind of mindset from my business partner at that time. So how do you mean, like he was more committed, like, hey, we need to be in the few, doing the work you can't hire hired out. So yes. So basically he who works hardest should get paid the most or deserves just as much. No, he said, hey, I just, we have work, we have, you know, we have money, like we're good, you know, I just want X amount of month and I'm cool. I'm like, that's not cool. Yeah. I want free. I want to be able to be anywhere anytime. We want to be able to grow. Yeah. That's the difference. And that is when I'm being a little bit sensitive because I get it. You know, we're still in the process of the, what do you think he would have said about you? Like, and like, what was the, because it's, it's easy to say the friction was one sided, but what do you think he would say about you? You know, that's such a good question. No one asked me that before. I really like that. I think that just because I've been with him for many, many years, what I mean by that I was like a Ukraine when he was dating my sister. I was the little kid that to take with me, so make sure they're not kissing and stuff. Yeah. That's a snitch. The snitch. That's right. So he would probably say, you know, he has, he had thoughts about me as well, which he didn't like, but I'm sure we do love each other and respect him and want the best for one another. But what would you have said? You probably, oh my God, that's a really good question. Like at that point, when we were, yeah, exactly. As you're starting to feel the friction of like, this isn't going to work like, well, he said, you probably want to say, I should have listened to my friend. His friend told him like, once you guys start seeing money, you'll see that, you know, David's going to change. Get rid of you. That's what his friends said. But that's not the case. I mean, but eventually you, you did buy him out and you treated him very fairly in that way. I mean, I talked to Ken Goodrich. I don't know if you know who Ken Goodrich is. He sold his company for what? Half a billion. And he said, yeah, you paid him very well. Right. All right. Especially the fact that if I remember right, you guys weren't making a whole lot of net profit at the time. No, we did so much work. I mean, we won the sales award for Bosch in 2022. But we did like two million, two million because you were selling all your units. It's five grand or something. No, not five grand. I'm joking, but come on. Yeah. Four. I'm getting it. You said four. That would have been a, we would have made money at five. That's, that's funny. Yeah, I think one of the hardest things, I don't know if you agree or not, but like just when you have experience as a technician, just even knowing where to price yourself. Would you agree? Absolutely. Yeah. Because you don't take an account like what really goes into run a business. Right. And the thing is about when you're starting out, you don't really focus on marketing and just kind of go on Angie's list or something. Yeah. Yeah. When you start out, marketing is not considering expense, right? Because you're not doing it. Right. Right. Right. Only word of mouth, referral. Right. So I don't have a zero marketing. So that means I can charge less. Right. So it's you and your business partner, maybe one other staff or two other staff. And so you price based on how big you are today, not how big you want to be. Correct. Right. Not for scale. Yes. And so these are like a lot of the classic mistakes. Would you agree that you made those same, those same mistakes? Absolutely. And we did so many of those just because you're exactly right. When we looked at a job, we were like, oh, well, here's a job that we can make X amount. At least we're making money. That's right. And then you go at the end of the, you know, at the end of the month and you're looking you're like, no, we didn't. We didn't make any money. Yeah. Is it fair to say to like, there's times where you are pricing things just by gut feel all day long. That's how it was. So you got to feel like we could make some. You know, one of the things that I think would be, you know, really beneficial for school is to teach how to understand numbers better. Yeah. This is just math. Like, I don't remember anything about any other letters and stuff. But like, this is not that hard to understand. You know, what does it cost, especially if you have a good CRM. Yeah. And that too, we didn't have, we didn't have a, we didn't have like a very simple basic to see another cost like 40 bucks a month. But now you're on service Titan, right? Now we're on service Titans. Yeah. But it's probably gut pricing all day long. Yeah. That's how a lot of business owners start. Is there just like, there's no system. There's no process. There's no thing to follow to know how much you should charge for what thing. Yeah. No structure. And so let's talk about today. So I'm assuming there's still some mistakes being made today. Absolutely. All right. So, but you know, I love to maybe dive in and like see, okay, where we can help right now and just diagnose like some of the potential issues and what improvements we could potentially make. They're going to help you even be better at the numbers because ultimately at the end of the day, business is ran on numbers and people, right? Right. If you got right people and the numbers make sense, now you got a profitable business, right? Yeah. And so, and much of it's rooted in the structure and not pricing correctly, not paying correctly, you know, not strategically planning, right? There's a lot of different things. So a few of the things that I always love to dive in is understanding like, well, one, how are you currently pricing a project? So if you roll out to a home and you just have like a standard offer, like what's your standard offer if you want to do a whole home replacement? So if we're doing a given example recently, actually just close the job this morning. Okay. So feel great energy, Zon. Yeah. Let's go. And the way that I came into the house identified what the needs are. I looked at presented options on what system would work for them. You know, asked about air quality, all that stuff. That location, it's a full new duct system. Yep. It's a small house. It's not like that much, but it still has good amount of detail. So the way that we look at pricing is we look at our cost all the way down to labor, all that. And then we divide it by 0.45. So we get a 55% gross margin. So right now we're working on being at 55% gross, but there's other things that I'm not taking in account. Like we're not utilizing financing. So I need to add that into my price. So everything's cash right now. Pretty much. Wow. Pretty much. Yes. But we are offering financing, but 0% through our programs. We're not really. There's a difference in having financing available and offering financing. So that's why one of the things that I really appreciate with the phone call with Alex was like his business was basically built on financing 100% and he showed me like dude, even though you think that you want to be with this kind of income level. I don't know because these guys have cash and they kind of play with you. Someone that has a need and you can serve them and help them, but they're not making X amount of money, but they still qualify. You can actually help them to buy better in their life with a better system. Yeah. Absolutely. And financing, I think is the key to volume. And frankly, it opens up your ideal client profile. You're right. What we refer to as an ICP. Right. Like if you're going in and you're expecting somebody to pay what's like what's your average ticket? We're at right around 14,000. Okay. So if your average ticket's $14,000 and you're going into a home expecting them to put a charge half up front in the cash deal. Yes. $7,000 down and then figure out how to pay another $7,000. It's something. The the the stats are like ridiculous. Like 80% of the population doesn't have more than $5,000 sitting in their bank account. Right. And so if right out of the gate, you're only being able to market to 20% of the population. And you know, out of that 20% how many of them are willing to put their whole bank account into an HVAC system. Right. And and of course, like when you're dealing with a customer, there's there's a lot of psychology that's going into this. Right. The psychology of the consumer of like one, they have a reputation to uphold. Everybody's got a reputation, right? They owe everybody wants to feel important, look good, feel good to other people, even if they don't know you. Right. And so one thing they don't want to express to you is I don't have the money for that. Right. Like nobody wants to say I'm poor. Right. Yeah. Regardless of it's true or not, nobody wants to admit that. Right. Right. Right. And so when as an HVAC professional or anybody in the home services, like if your product is more than a thousand dollars, if your product is more than a thousand dollars and you are not leading with financing, you are making people say I'm poor. And also sometimes calling them poor. And this is in this is what I mean. Like if I'm sitting there across the table from you and I show you a hay of $14,000 system and instead of saying, hey, yeah, all of our people we call if I'm for zero down financing is just 98 bucks a month. Right. If I don't present that it's $98 a month or $150 a month or $200 a month and I only present $14,000. And you in turn tell me, I need to think on this or whatnot. And then I'm like, oh, by the way, we have financing. Even if they want that financing by them by them taking it, they're admitting, yo, I'm poor. Yeah, I don't have this. I don't have the $14,000 and I need this. And so you want you basically want to eliminate that friction. Yes. But the customer admitting that they're poor. Right. So that's one of the biggest things that change and I begin to move towards this way was understanding like people don't have that money. And no matter how you say, if you had a Dave Ramsey past or you know, we personally, I took it really serious, canceled credit cards. It does affect you. No matter how you do it, that's why I was like, man, forget to finance me. I don't want to have people screw over their life and all that stuff. But the truth is people need to have incredible HFAC systems. They're going to better their life. This is the way I justify it. I mean, they're going to go by Jordans or HVAC, you know, whatever. But the truth is if you can save on their energy, they come home, even if they had a terrible day, something happened at work, they can hope to a comfortable AC home, right? Or they will have a way better experience or they can come home having an amazing day and their house is extremely hot. They'll get mad at the kids, mad at the wife, you know, it's just the, I mean, dude, the reality is no matter how you look at it, whether it's a tool like what you're talking about, like it's, it's elevating their life, right? From a tool standpoint, allowing them to be better fathers, mothers, sisters, brothers, better providers at work, what not, like that's a tool. And the straight asset aspect. If a home doesn't have a working HVAC system, it's worth less the cost of the HVAC system, right? And this is an asset, right? Like an HVAC system is an asset to a home. There's also psychology piece two of like that we've learned in solar is you present the HVAC system at, you know, 15 grand, 14 grand, even if they can buy cash, you mentioned that Alex is talking about like, dude, you actually don't want these customers at this upper bracket because if they can pay cash, they immediately have to think this is an investment. Whereas if you just present the 98 bucks a month, that's not an investment for them. And you get to mitigate that, that objection later because they don't have to perceive this as an investment. I gotta go talk to my account. I gotta go talk to this and the other. It's just, this is what happens. It's just 98 bucks a month. I can do that. It's like having a cell phone bill, right? Having an HVAC system is a cell phone bill. It's a tool. It's a, it's a utility cost, right? Versus a debt that's being taken on. And actually yesterday we got off the call with Goodleap and finally we got our integration done because of our name change. That's right. Yeah. And so we're going to be able to present proposals with the private monthly costs. Love it. And that to me is like one of the tools that, because when you go into a certain house or you know, you say, hey, it was all, it's only $99. Yep. What do you mean $99? This system costs, yeah, 99 bucks. It's nice to insane. It's 14,000. Yeah. It's completely different psychology. So on top of that, so right now you're, you're pricing your stuff at 55% gross margin. What about negotiation? Customer says, hey, I can't afford this or can you do it cheap or so and so is doing down the street. What are you saying? So let me tell you this. Okay. I got to show, I got to show you guys a full picture. I went back into sales about a month ago. Yep. And I haven't done actual like face to face customer sales. Yep. And I'm very long time. I've done construction sale, custom homes, all that stuff. So for me, I've just been facing stuff like this. And I'm like, what is going on? Because I'm so used to saying this can't, sure. I'll do, I'll beat that price. And unless I did run it to somebody, I'm not going to say his name, but somebody told me I just win the job, which whatever, the guy ended up going lower. And but what I say now is I go back to my CRM service time and I say, hey, let me see if I can make something work. And I look at it and sometimes it does make sense. If I can pull some triggers other times, I just say no. Right. It doesn't make sense to me. What about, so I know you've had a sales force. Do you currently have a sales force right now as a Jiss you? So I just brought it on the way up here. I just got a guy that left one of an awesome company. I mean, they're struggling on market, but he's going to come on and he's starting on the 23th. Awesome. But previously you had sales guys. So what did you allow sales guys to do? So I paid them on gross profit numbers, not total jobs. So if he was going to go, so I had one sales guy and he would go below 50%, he'd get 5%. I'm just asking. Can I give you some feedback here? Absolutely. Okay. One, one of the best things you can do is eliminate negotiation. Like, when you give room to negotiate, it does two things. One, it tells the customer, like when you're willing to negotiate, it tells the customer, hey, I was trying to screw you to begin with. Okay. Right. Wait, why didn't you present me the lower price to begin with? You're willing to drop it now? Why didn't you do it before? Right. Right. That's psychology number one. Number two is it also prohibits the salesperson from having perfect confidence in the price. And so because they know that in their back, they can negotiate and that previously they negotiated and they got a deal, then what does it do? It creates a cyclical error of constantly. So one in my companies, we do not negotiate. We cannot drop prices. Prices cannot be dropped. The only exception to that is a promotion that is done by the company and decided upon by the company. All right. And that's not done in the moment either. Right. Like, it's like, okay, if this is our price and we're running a promotion for the rest of the month, then the promotion is for the, and so it's just, it's the price is what it is. Right. But at the, every time whatever is presented to the customer, I am not, like, we are not going to drop from that. Okay. So it solves those two psychology. And in turn, what it, what it encourages with the salespeople is actually to be better sales people. Right. Because when, when a customer says, hey, can you lower the price? And even if you respond like the way you're just saying, like, hey, let me, let me, let me check on it. But that, that is, whatever you're doing here is not a good sales practice. Right. It's not using sales skills to convince them to buy at that price. It's your, you're trying to negotiate on price. And the same, the, the same psychology that navigates price is what navigates pay with employees as well. Right. And so, just understanding that you can get great employees by not paying the most in the market. And you can get great customers without being the cheapest in the market. Right. And so it's the, it's the same type of thing. But like, then it allows us to up our skills, say things like when, when the person is like, hey, are you able to go cheaper? Right. Like if a customer is like, hey, can you drop the, the price at all? My, my, I have a couple of different responses I love. One would be Mr. customer. Yeah, I can drop, I can drop the price. But I'm going to have to cut corners. Which corners would you like me to cut? And immediately, what, how do you respond to that as a customer? You don't want the corners cut. Yeah. Yeah. And I want to, what corner cut? Like, and basically, you, you come to this realization of like, look, who, the, our price is what it is. And we, we put in, we're going to bring the best equipment, the best value that, right. And then one of my other favorite ones is, he's like, ask me, hey, why are you $5,000 more than, than the other company? Why are you $5,000 more? Yeah. That's a great question. David, why is it important to you that we're profitable? Well, I know why, because I don't have business, but I want you to, you want to honor your warranty. But yeah. So as a, as a customer, why, why is it important to you that me as myster, or myster, a, a, a, a, a, a, a, a, why is it important that myster, he, and his, a, is profitable to you? Because you give me warranties and guarantees and I want you to be in business if something goes wrong. Exactly right. And because of that, we refuse to drop price. If you want to go with ABC down the, the street, you're more than welcome. But I'm assuming this isn't just a short term investment for you. Yeah. Right. And so like, here's the reality is that a customer has never been asked those questions. I think, go ahead, sorry. No, I was just saying, think about it. Like, so have you as a customer ever been asked by someone trying to sell you something why is it important that we're profitable? I'll tell you like, one, one of another big thing why trade guys don't think about this kind of stuff is because the business coaching part of the trade, you don't, you don't get that being in the field. Right. You don't, you know, you don't understand how to negotiate. You don't understand of saying you kind of like, you know, you, so I'll say I got an air conditioner or mind is broke. You just go there and help them out when you're writing for somebody else. But when you actually start looking to the business and understanding how numbers are supposed to be ran and how you're supposed to look at them, you're thinking like, no way. I don't know. I just spent 20,000 on gas. Right. I had no idea. Yeah. I don't know that my, you know, building payment is six and a half thousand. Oh, it's only six and a half thousand. What is that? And then at the end of the year, you're like, oh my goodness. So if you're looking at percentage wise, it does make sense. Right. Not having that kind of background because you're in the field and you're just kind of, oh, this is a lot of money because I make this much and now I can make this much. I'm like, you know, way more twice as much or whatever. And that's kind of mindset I had. I'm like, period. And here's the beauty of you to me. You don't have to be a business owner to receive this kind of train, right? Like, like one of the most important things you can do as a business owner is to train your people on this level of psychology and help them understand, right? Like, like, when we talk about business priorities, there's, there's three priorities in a business. And the way that they're prioritized is very important. So most, most companies prioritize the customer first, the employee second and the company third, right? And the exact inverse needs to be true. The company needs to be first, then the employee, then the customer. And that is the only way that you can serve the customer. And the reason is if I am profitable, if I am priced correctly, profitable in business long term, I can afford to take care of my employee, pay them right, motivate them, right, build the culture that's going to last keep great talent around, provide opportunity for them to learn and grow and intern. If I do that, they will take care of the customer, right? And that is the best, that is the best way to serve your customers, actually putting them last. And it seems counterintuitive, but it's the reality. It makes total sense. And like, and educating our team members on this and educating our customers on this, right? Like, if you can, if you can teach your salespeople like, look, the company needs to make a lot of money. If the company makes a lot of money, we can provide you a lot of opportunity. You can learn, grow, you can develop, you can be in management opportunities, we can expand locations, you can be a general manager, you can do all these things, but only if the company is profitable. And if that, then we can take care of the customer, right? So now they can sit down with the, with the customer and have a conversation of, hey, Mr. Customer, why is it important to you that we're profitable? And the customer, as all of a sudden, is going to start selling you on what? Why? They should go with you versus ABC, you know, heating in there down the road. The confidence your employees have in the business gives them like the value to sell, you sell better to the customer because a lot of the times pricing is not the actual objection. Right. Like, it's just a value proposition that needs to be readjusted because if it, regardless of the situation, if their HVAC was completely out, they would probably be willing to pay any price to get it fixed if the value was correctly set up. So like, like another great objection of ways, like I noticed Mr. Customer, you've got an Apple watch like on your wrist. Why didn't you just get like a s'ms on it? Why didn't you get that on your wrist and set just to tell time? Yeah. No, I mean, there's so much for me, you know, I can go on the walk, so it tracks my steps. Yeah. And you have an iPad too and I assume you probably have an iPhone. I do have an iPhone. Why don't you just get like a flip phone? You know, I just, I like Apple. So I say the value and I'm willing to pay them. I'm willing to weigh over pay. I feel like that is so important what you're saying because if you're, it's also a process right. So if you're coming in and another thing that I want to kind of backtrack, it's so hard to change a mindset of a team or a culture of a team. If you yourself are programmed that way, and that was one of the reasons why I had to separate myself from people in my business. Yeah. And I'll tell you, I'll tell you one other quick story. I believe it was at the end of 2024. I set up prayer like God. Please. I want to, you know, people say it's your team, it's your team as a God. Please help me to build an amazing team. And if there's people that need to be here, bring them on. If there's people that need to be gone, take them out. Well this year hit me that really good. And I'll tell you that. Like I have a whole new team, which is nice because now like we might have never done something before. And I'm like, this is how we do things here. Yeah. And they're like, okay. I like today on the way here. I hired a new service technician and he's was an installer. I told them, dude, you're going to sell. It's you have, you have the path to the customer's heart because the sales guy comes in all nice and everything. You're just a tech. You're here to help them. On the way here, this guy closed an $11,000 job. Too many splits like, awesome. Like, you know, I said, dude, that's amazing. And because changing a mindset of a company is so hard. And that's why changing people and just not, I mean, not in a bad way, but because they're, you know, it's not a good fit or they just have their own dreams and goals. So for us, we're doing it now and being on the right CRM, knowing your numbers better and just making sure you're making money. Yeah. If I could have one more thing to that too is like, you think we start hiring these sales reps and technicians and we give them these powers to negotiate thinking like that's what they want. But I promise they don't want that because now they have to think about numbers. When before they could just think about if you take that power away from them, they all have, they have to do is think about value, sell objection handling. But now because you give them this power to negotiate, they got to start calculating. How much am I going to make on the back end of this? Do I want to give them half and then have to save some wiggle room? A case I need to go down again and then continue to objection handle. Like they don't actually want that power. You want your employees to have the easiest path of success and it's by doing less, like just standardize it across the board that we never did discounts. Unless it was a company forward facing discount. So I've got, I got some numbers here in front of me. Yes. So we got your to date financials. And I want to, so, you know, one of the old adages that I love is that numbers don't lie people do. And so I think and the beauty of when we accept the lies that we've told ourselves and accept the truth for what it is, that's the only way that we can make change. Right. You agree? Absolutely. Like you shared your story earlier of you coming to God and basically putting it on on the table and basically what that represents is everything in life is done based on truth. When you own the truth, expose the truth, then you can change. Right. And the same thing goes for running a business. Yeah. It's the exposure of the sins of the business that allows us to make change and sins of the business. The sins of the business because man, I'll tell you what, there's some sinful things here. Help me Lord. But yeah. So what we got here just to be like specific with the numbers, we got 2.11. So 2.1 million this year. So 2 million, $117,882 a year to date. That's through July 31st, close. So first of all, what's your biggest year to date up until this in revenue? So we did 3.6 last year. Okay. Cool. So right now you're on pace to outgrow that a little bit. So I don't know if we're going to do because it's not. Well, not only that, we are focusing more on structure and versus just top line, yep, which yes, profits are sanity for sure. And so let's, let's talk about that. So right now you're 2.1 top line. This next line is one of the most important things that most business owners fail to understand is their gross profit. So like right now you shared with me, Hey, we build all of our stuff at 55% gross margin. Right. Your numbers here would say otherwise. That's right. And so right now, right now, we're at 700. And in 99,000 dollars of gross profit. So if you take that divided by that, that million, we're at a 37.7% gross margin. Yeah. So basically, if you, if you want to open the link I gave you, it has the percentages on the right side too. Okay. So it's cool. Super easy. Love it. Love it. Pull that guy up. 100% and then there's no justification. I know that. So to me, all that says is one, you're either one not pricing correctly up front or two. There's too much negotiation going on. Right. Too many special deals, side deals, everything like that. And so the hard part with, so a standardized offer is one of the best things I could get for you. And the standardized offer is basically like we sell mainly one solution at one price. Right. Like, and, and I know it's very common in the HVAC world to give choice. Like good, better best, good, better best. You know, have options. We'll customize it to you. Right. Right. The, the problem with customization or the problem with optionality, optionality creates a confusion, right? And a confused buyer doesn't buy. And that's so true. I just listened to a guy named Sean Mitchell. He, he's over 8 million with a company down in Seattle area. Yep. And he, he actually says that I do not give too much options because then they got to think about it. Yes. They got to think it creates confusion. Yeah. Right. Like whenever there's more, because here's the reality. Most customers. So there's a range of customers. And if you, if you haven't, dive into my course where I talk about this. And in a literally talks about like the different levels of, of questions or knowledge that a customer needs to buy. And the lowest common denominator is like Billy Bob, right? So Billy Bob, when, when he calls up, master, he needed an air. He just knows he needs a new unit, right? And he needs it now, right? And so when we go and we give Billy Bob too much information, Billy Bob doesn't want to admit to you. They has no idea what you're talking about, right? And so in his mind, he's like, well, I didn't think that there were other options. I didn't think about multiple warranties. I didn't think about this and the other. So instead of admitting to you that he's confused, he's like, David, can I just have some time to think about it? Can I give you a call back tomorrow? When really if Billy Bob, would you have been like, hey, you know, hey, Billy Bob, this is what you need. He's like, man, you know, just needing me. So may say, I didn't realize there were so many options. That's how they sound in liquid. Right. And it's so like the less options, the less options, the better and the more standard, the better. And when you are standardized, you have predictability, right? So if we are consistently always out of 55% gross margin, now I can make decisions as a business owner. But if I think of my amount of 55% gross margin and reality, I'm at a 37.78. Since it's really hard to run a business. It is. And I'm feeling that pressure. And that's why for me, you know, I reach, I'm reaching out to you guys actually, you know, my goal is to grow and learn and understand. How can I better myself as a business? And a lot of the things that we just don't know because no one does this. Right. And the thing is we can go and blab and everybody lies on their numbers too. But so that's when you look at this stuff. It gives you the truth. Yeah. Now it put me in a unique position because I took, I looked at this. This was recently, we did a call with our CPA and he said, you're materials and supplies are quite, you know, it's 33%. Yep. You know, H.O.K. is expensive. But that's a lot of money. Yep. You know. And another thing is like our direct labor, it's not bad. We're at 20%. That's, you know, you got to pay to have a good talent today. Absolutely. Kids want or not kids. Guys want to be on, not in the crawl space or in the attic at 130 degrees. So if you want good integrity work to be done, you're going to reward that. But it has to be built into the price. Now another thing where we're struggling a lot in is marketing because we're not going to the right customer. Just like we said, hey, we're like, we're actually selling to a higher end person, you'd say in a society. Because that's where we grew as a company. And it was easier to go there and say, oh, these guys got cash, they'll pay, boom, boom, whatever. So can I give you the straight truth here? Yes. Cool. So the reason you're struggling with marketing is because you're not spending enough. And the reason you're not spending enough is because you're not priced right. And so, and, okay. And really every single business starts with the offer. Okay. If your offer to the marketplace isn't structured the right way, it doesn't matter how good you're at marketing. Doesn't matter how good you are at sales, doesn't matter how good your installation process is. If you're pricing and offer is not structured correctly, you're scaling a piece of crap. Right. And so like if I'm looking at this, I have to see a consistent. So for me, I'm building my heating air company at a 60% gross margin. Okay. Not 55, 60. And I'm not six. I think it's 60, but it's going to show up as 60 here, which means I've got to go through and see how my labor is actually being priced in, how my equipment really is, what happens when we have to eat certain things? Like because you guys ever have to eat something with a customer that you didn't properly quote it. Yeah. What are what are examples of that? Sometimes, you know, let's say like we're doing something in the attic drywall. Yep. We've got to repair some drywall that happens. How often does that happen? Not often. I would say, you know, out of a hundred jobs, maybe two, three. And how is that cost? Oh, it depends. Right. Yeah, it depends. It's so like, let's say that an average drywall repair, we're out of like maybe 600. $300 to repair a drywall paint. Right. So so this is like, and here's the reality is like right now you're pulling that number out of your butt as far as how often it happens. Like you think you know, so what? I mean, pretty much yes. I mean, you have a gut feel about it, right? Right. Because of what I do is because I don't actually really look at this. Hey, we had a damage on the drywall. So it was called Victor. Right. And then, you know, so my point in this is like, you've seen it happen. You know what happens, but you don't know exactly how often and how much. Right. And so this is an example of knowing your numbers and how you have to make sure that you could price it in correctly. Because somebody got to pay for that. Right. And so for me, the way I like to price in certain things, so like, for example, if I know something happens one in four homes, and I know that one of that thing is going to cost me $400. What do I do? I'm going to put a hundred bucks into everything. I'm going to, yeah, average. And so because so I protect my margin, right? And so that when I do have to eat $400, no problem. It good. The law of averages keeps me at that same. And right. And so if I'm properly creating that that offer, my gross margin is going to only vary one to two percent maximum, right? Based off a little mistakes or whatnot. But like right now, you're thinking it's your price at $55 and you're actually coming in at 37. That's a huge variance. Right. Imagine an additional 18% to the bottom line. Right. The coolest part about baking that price into like one of every four homes is, you know, if you got to go fix a drywall one out of every four homes is when that happens or a mistake happens by one of your technicians, the customer's like, Oh, well, what the heck is supposed to happen? But we'll take care of it, Mr. customer. Don't even worry about it. That was our mistake. It's already done. Don't worry about it. And it's the value stack of the company becomes so much higher of perception of value just because you're like, Oh, and we need to change out your electrical panel. We'll do that for free. Don't even worry about that, Mr. customer. So yeah, that's the example is, is like even when it wasn't our mistake and it was actually the customers home mistake where you should be able to go back and build them for it. Like they need a new electrical panel upgrade or whatnot. If you're baking that in, you now can offer like you're basically giving them something incredible without having to come to the market. Because think about how many other companies that are in your industry send them a change order and be like, all right, it's okay. We'll upgrade your electric panels. We're going to cost you $2,500. Don't worry about it. Then now you've created an opportunity for me to cancel. And so now the less opportunities you give them to back out because you had to change something, you've already baked into your price, the more you can just bowl those your way through the rest of the process. And it's nothing to you as the company or to the customer and it's completely seamless. Because there's two ways you're going to increase your growth profit margin. Lower your cogs or increase your price. And it's a lot easier to increase your price than go through line item by line item of like, so I should change my this or that. So what one like 100% I agree with you. That's why we're when we're focusing on like you said it. We're not marketing enough. We're not. And the thing is what I'm figuring out is, okay, how are we supposed to do marketing? Because I've never done this before. We did some flyers recently. We did, you know, this unique stuff, but still where do where do the most customers come from? It's going to be Google. Yeah. Like that's your best customer here today. I'm on my like fifth digital marketing company. Who you guys using right now? So this guy that we just got he started in July and I went to us. I went and dropped all these cool big names that were just in the background. I went to a small company. Who'd you use previously? Oh, come on. All right. Dang it. Who do you use? Camp digital. Who else? rival digital. Okay. Who else before that? Oh, so sad. High boo. Okay. It's like the yellow pages, I guess. Man. So so couple, couple of things, couple of things here. Like let's just look straight at your numbers. Yes. If you were actually hitting a 55% gross margin, that would have an 18% more to drop down. Right. And then if we so right now you're spending 5.77% on your marketing. That's not enough. You need to at least be 10%. So marketing is one of those interesting things. If you're spending too little, it's a it's a stab. If you're spending too much, it's a stab. Right. Like meaning like you're spending too little, you're costing yourself revenue. You're spending too much. You're just doing it wrong. Right. And so this number has to be 10% 12% max. And and so what that's doing because this is directly correlated to the amount of revenue that you get. Right. Like if you like typically if you're at 5% if you double your spend, you should get double the customers. Right. Now you have to have the operational capacity. Not only that, you have to have the the proper business model because even though it says 5%, we actually spend 1% 5% because a lot of this revenue comes from new construction, which is the repeated builder. We work with or remodeling company. So if we take down so we're about 60% retro like replacement service. And then 40% new construction. So and we only do marketing for retro service. We do zero market for new customers. So I mean, so the reality is you are probably like 10, 11% for your new for your new business. Right. Your new retro business. Yeah. Yeah. Totally totally understand. But like even then, how are you pricing your builder stuff? So we the way that we do it, we try to do it. So that's a, that's going to be hard on for you to answer because there's so many details, but our average project is around $30,000. And that's, that's a higher ticket for a new construction or a remodel. But I have, it's, it's a very unique path, but I have everything built out by systems and what it is like we go by the heat duct. So for example, do you know your gross margin on that 30,000? No. OK. Very vital, very vital. And so this is the only thing I would say that potentially. So on new construction, I still like to be very high margin. And at most, I only want to reduce it by the cost of marketing. You know what I can do is I can see if I can work this out. And that's fine if you don't have those answers. We don't, we don't need to solve that on, on this. But this is, this is my philosophy on new construction is if you're going to reduce it because you have that repeatable business, only reduce it by the cost of marketing. Right. So basically your difference between a new construction and a retro should be about 10%. And and now I understand that may cost you business in certain aspects, but the problem is like most business owners, they make the decision like, well, if I make a dollar, it's a dollar a wind of had. Well, but it's also a dollar that you couldn't focus on a different channel with, right? Which is more and highly profitable. And at your current spend, you know, it will take the, the 5.77% with the grain of salt with with your new construction. But to me that highlights, if you're not spending on marketing, well, marketing is a casino. Okay. Mm hmm. As you walk into a casino, the casino will always have the edge on you, right? If you sit down on a blackjack table, you get one hand up with you. And if the dealer is showing a strong hand and you've got a weekend, you've got a hit. But the problem is sometimes you'll still hit and you might still win, but sometimes you'll bust and you might lose. But the problem is you only had one hand. And if you're not spending enough on marketing, you're not able to figure out what with data, how many more hands you could do to find the winner because you're going all in and hoping think you're, you're trying to get a lottery ticket with 5.77% and unfortunately, most of the time as marketing, most of your ideas will fail and most of your ideas won't work. Yeah. So you have to spend enough to test so you can find the ones that work and scale that to the moon. And at 5.77% you're not testing enough. And of course to your point, you got to have the right, you got to have the right group. You got to have somebody that's running your, you have to have a right systems, right, which starts with generating the lead and then having the proper CSR that is going to convert that lead to a book, right? And from that appointment to a close, right? Like that system has to be constantly fine tuned, trained up and, and delivering for the marketing to be worth it. Right. That's, that's very true. And that's what and with marketing, like another big area where business owners just don't ever get learned, never talked about it. You know, and what we're doing trying like social media stuff, we just like, I thought I was going to be such a cool video. We got, you know, I thought I was going to get like a bunch of views and stuff. I threw, I dropped the unit off my roof. Like it was supposed to be pretty cool, you know? No, and I was, I was given away a free heat pump. In the month of July, can you believe that? And nothing happened. Zero entries. And by the end of the month, I said, take it down because if one person entered, I'm screwed. That's a good thing nobody got in. So and it's like, it's like, okay, what? So this is a classic marketing mistake is that we think we are better than the data at like determining what's going to work, right? Right. We see something viral. We're like, hey, let's recreate this. It's got to work. You go all in, you do this high production, you freaking bust a system, you do whatever else and then it doesn't work. And then on the opposite, you got a few of your employees doing a Christmas TikTok dance, right? And it's generating your highest leads and converting. And this is reality for us just so you know, like, like one of our highest performing ads ever was five of our female employees just doing a Christmas dance with Christmas music that continue to run through the summer. Yeah. And like, hold me that. That continue to run through the summer and it was our best performing ad, right? Like, like at the end of the day, Levi's going to say we're scientists, right? Like we're we're not these great artists or whatnot. Like marketing is a science and you've got a test and you can't go, you can't go all in on one hand, right? You've got to be diversified and you've got to take whatever's performing and add more money to that, rather than going this big giveaway that you broke a system on that you thought was going to break the internet, you know, I also want to add to like we think as small business owners all the time, the more discount slash free things, slash giveaways I can do, it will probably like who doesn't want a free heat pump. I'm going to tell you this right now as an uneducated HVAC customer, I don't even know why I want a free heat pump. You know what I'm saying? Like if I'm not properly educated on the pain of why it should have a new free heat pump, I don't even know why the value of free heat pump is because you're like in your brain, dude, you can't be how to nobody enter a giveaway for free heat pump. But if I'm sent as a customer and I don't know even know what a heat pump does, why would I enter it? So that also goes to not even just specifically you, but anybody watching is like structuring your offer and you're scripting and you're creative of don't just keep stuffing and doing more discounts and giveaways, identify a true pain and educate your customers. Those would be the best customers to sell the ones that you teach those things to. The sad, the sad reality about whatever your product is, nobody knows as much as you do. Nobody cares as much about your product as you do. And frankly, nobody probably even knows what your product is. Right. That is the sad reality. The truth and the happy reality is people just want something that works and gets them a result to solve the pain that they're in. That's it. And so like at the end of the day, we sometimes we get hung up on like, Oh, this is the best XYZ product with the best warranty and the best everything. When nobody cares, right? And nobody knows that that's a cool thing. In fact, I was sitting with a fencing company the other day and they were trying to tell me about this cool product. They want to carry this product and they drop the name. And I'm like, what's that? And like, you don't know what that product is. I was like, no, why would why would I know that brand of fence? And like everybody knows what that I'm like newsflash. I'm your customer. Nobody knows. Like it. And so just like getting in the head of the customer and understanding like who we're selling to. So when I rebranded, I started to attract better talent. And like these other companies, they're not selling these. They are selling some of the top of the line stuff, but that's so true. The brand or whatever company or system or whatever that you're using your material, doesn't matter. It's truly about who you are. And that's why we shifted the focus and doing more like social media stuff about who we are. Love it. And we know that right there actually put me a look at these numbers actually put me in the room with some amazing people. And they understand like, Hey, I'm looking for a incredible product. I'm going to take care of my customer. Yeah. I'm not even though maybe the name is not there, but I need it to deliver. Yeah. And if you guys got my back, or reliable product, yeah. Then for sure, that customer wants a something that works and solves their problem. They don't care about the brand. They don't care about like all the fancy, whatever. Yeah. Right. The stuff that we get hung up on. The only reason they think they care about the brand is because they can trust that brand that it will deliver the results or hope that it delivers. And so like this is what I learned recently in the past. Well, basically I had the business for two years. That's why I started focused on the CRM on the brand name systems of processes answering the phone call, looking through, you know, making sure the leads are being booked. It's what we went through today. It all has to make sense because even if you say like your sales process might be really cool, but then you're dropping the ball on like discounting or whatever structure. Yeah. Sales guys are promise maker. The installers are promise keepers. Yeah. If you're installed guys suck, absolutely. The whole wheel has to be round. Right. And then that's from like getting the lead, booking the lead, getting the sale and fulfilling it. And then get referrals and then get referrals. And that's where we're at. We're figuring all that out because it was just a discount game. And one thing that frustrates me the most is, you know, I, my ad spend on Google LSA is not small. Right. But my Google is broken. I'm not getting calls. Yeah. And to me, I'm like, what is going on? And that's why I hired a smaller company that I can reach out to hate that we got Google. Just gave me this thing, whatever. Just figure this out. Yep. And overall, it's a process. So couple, couple of items of homework that I would give you. Okay. One, let's create a standardized offer that's going to consistently get you that 55 to 60% gross margin. Because right now you're not, right? The 37% that alone, if we just shifted that additional 18% all the sudden you're business. Right now you're operating just over 10% net, right? So on the 2.1, you've made 200 and, you know, some 219,000, which is great. And it's respectable, right? But imagine that number with that's more than double, right? Oh, yeah. This, this number could easily be a 25% net. You could easily be over $500,000 today if we can standardize that offer up front. So the standardization of that offer we can get that to, let's just call it a 55% and then dial in the marketing to a full 10%. I don't care what like where you're at. Like if you can average 55% across commercial residential, everything and get the total spend up to 10% and of course it's got to work, right? Like the phone's got to ring. The, the, the appointment's got to be set. It's got to be booked. You got to have an 80% booking rate and everything like that. Like fix those two things. Your business will look drastically different this time next year. And again, you're in a good position. A lot of people are in much worse positions. All right. Like, like you're profitable. You've got a lot of really good things going on. You got a great name. You've got, you've got some good people. You've just recently hired another salesperson, right? Like, and then now with these new people structuring it in a way. And this is one last piece I would give to you. Do not pay the, the sales rep on gross, gross profit. Pay them on a percentage of revenue, total revenue because they won't have control over the gross profit. Okay. Now they just get paid. So that's interesting that you say that because a lot of times people say, you know, if you're looking at the gross profit, that's the accurate way to pay. So the reason why people say that is because they negotiate with price and they want the sales rep to be tied to their negotiation. Okay. And they give them the opportunity to take like, hey, look, if you drop gross profit, you're going to drop too. Look, you can't drop because you're selling it. Like if you, and you have a unique opportunity right now, you're starting with new sales people, build it the right way. Yeah. And I promise you this is the right way. And you know, it's going to, it's going to give you so much more power. It's going to, you're going to train your people so much better. They're going to sell the right way. And ultimately they'll make more money. Yeah, I think that I know that that's, that's a huge, marketing has been such an opportunity for us. It's just we need to figure that part out. And I'm willing to invest, but when, when I'm not seeing the fruit, it's, you know, it's a little hard because you're like, man, why am I spending back, you know, three grand on Yelp a month. And we looked at the revenue and it's like, it doesn't make any sense, you know, or whatever the case, the matter no matter what. So, but I like your, even though I'm not into like gambling or just, you know, but you say, hey, you know, it is, it is a chance. You got to kind of, you know, shoot and see what works and dropping you and off the roof. I think a, I think a better analogy is like the stock market. You can either try to go all in on one stock, hoping it works or you invest in a mutual fund. Yeah. In a mutual fund, you know, eliminates a lot of your risk and basically shares your, you're going to be successful. So I wanted to ask you a question. I heard, I was listening to your story on the way up here. And man, you have a crazy story. I was shocked. Like I, you know, I heard you on a podcast with Tommy Mello. Yeah. And you recommended a book that I actually listened to twice. James Clear. Oh, I'm in Cabot. It's shout out. Yeah. Jimmy Jim. So that book just completely changed. Well, that's why I drink water. I don't have Celsius in my man and you know, because you make, you adjust your life. But you were at a point where like you thought you were making money. You made all these investments and you got all these, you know, or you got all this money from family and whatever. When did numbers really just like click for you and how did you get to the point of like, man, this is where business is. It's not all motion or, you know, exciting. That's a great question. So I think one, I have been fairly naturally gifted with numbers from the beginning. So I've got eighth grade shadow eighth grade state champion, Washington State champion, Matt team. But, but even then, even though numbers made sense, like to your point, I did make a lot of emotional decisions that were more emotionally driven. And frankly, winded it all shift was once I started getting the right room with right mentors and I saw the importance of having the KPIs and the numbers and everything in your face constantly and not just numbers, but like knowing the meaning behind the numbers and the story that they're telling. Right. And so like, again, when I look at your, when I hear what you're saying, I see your numbers, I know exactly what the truth is, right, what the real story is. And so like that's, it's a process of education. And I've spent a lot of my education, 1.3 million in personal development, being in the right room, being with the right mentors and whatnot. And so, and then of course, just, you know, bumps and bruises to men. Yeah, I think that's where you, I think the, the spending the money, you have to spend the money because you know, but that's how you actually get to the people that, hey, let me show you what I went through here in my numbers and like you get those connections and they call you or you call them now they call you say, hey, and another thing that stood out to me was you done by your bankruptcy. And you said, please, please, please reach out for help. I think that right there is another big opportunity for the trades. Yeah, because we feel stupid when we don't ask questions. And I failed. Oh, we feel super when we do ask. Yeah, yeah. So we don't, we feel stupid. And that's why we don't ask questions. But that, the wise person, the Bible says, it's so amazing. Scripture is so powerful and true. But a fool is wise in his own eyes, right? And then a fool cannot get instructed. Amen. You know, so that to me was those like things like, stood out to me. I was like, man, this is where my life really changed. And then it was I when I began to ask for help. And that's why I came to the decision of moving away from my situation with my partner and working on the brand and getting on the CR Ram and eventually coming to this place and working with you guys. Yeah. Well, David, dude, we appreciate you trusting us being a part of the next level community, sitting down with us going over your numbers. Dude, you have an incredible opportunity here. Like you build a great brand. I mean, this is this is something that if you can dial in these numbers, the scalability of it, right? Like I mean, you've seen as the people that have gone before you like in the HVAC space, this is something that could be scaled to 50 million, a hundred million, 200 million dollars a year. But the only way we get there is we have to have we have to fix the foundational stuff that allows it to scale. And so you have some incredible opportunities. Look forward to working with you on it. Thank you. Appreciate you being here today. Guys, if you haven't, make sure that you subscribe to the show like and comment the favorite takeaway that you had from from today's episode. Let us know what you're struggling with, whether it's financially different numbers, other podcasts or titles and things that you would like us to cover in the next episode. Until next time.