Owned and Operated - A Plumbing, Electrical, and HVAC Growth Podcast

#115 - Turf, Territory, and Scaling Your Business with Johannes Hock

April 23, 2024 John Wilson Season 1 Episode 115
#115 - Turf, Territory, and Scaling Your Business with Johannes Hock
Owned and Operated - A Plumbing, Electrical, and HVAC Growth Podcast
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Owned and Operated - A Plumbing, Electrical, and HVAC Growth Podcast
#115 - Turf, Territory, and Scaling Your Business with Johannes Hock
Apr 23, 2024 Season 1 Episode 115
John Wilson

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Today on the Owned and Operated podcast, the boys interview entrepreneur Johannes Hock, the Owner of an artificial turf company who lives in Austin, Texas. They discuss Johannes's background, how he got into the turf industry, the business model of turf companies, expansion plans, challenges of scaling, and the factors influencing the choice of new locations. If you’re looking to learn more about the world of self-funded search and small business acquisitions then your favorite electrical, HVAC, and plumbing growth podcast has exactly what you need.

Chapters
00:00 Introduction to Owned and Operated
00:34 AD - Transforming PPC Despair into Success
01:08 Deep Dive with Johannes Haack: From Track to Turf
02:54 Choosing Artificial Turf in Home Services
05:33 Exploring the Business Model of Turf Installation
07:57 Marketing Strategies and Customer Acquisition in Turf Industry
12:03 Scaling Up: Processes and Expansion Strategies
15:33 Vision for the Future: Aiming for a National Brand
19:11 The Operational Blueprint: Systems, Processes, and People
26:52 Expansion Strategy and Market Selection
30:40 Final Thoughts and Where to Find Johannes

Episode Host:
Jack Carr: @thehvacjack on Twitter
Guest Johannes Hock: @HockJohannes on Twitter

Special thanks to our sponsor: Service Scalers:
Looking to scale your home service business? Service Scalers is a digital marketing agency that drives success in PPC and LSA. Discover more growth strategies by visiting Service Scalers: https://www.servicescalers.com/

Check out Owned and Operated Weekly Insights: a newsletter that’s jam-packed with actionable growth strategies to level up your home service business. Subscribe Here: http://tinyurl.com/ownedopnews

Don't forget to subscribe!
Youtube: @OwnedandOperatedPodcast
X: @ownedoperatedco
SPOTIFY: https://open.spotify.com/show/10mwKIq35xzVz5qHcju3Kb?si=a2eb1f177053402d&nd=1
APPLE PODCAST: https://podcasts.apple.com/us/podcast/owned-and-operated/id1560999545
www.ownedandoperated.com

Contact us: info@ownedandoperated.com

Contact the Owned and Operated plumbing, HVAC, and electrical growth podcast

*Review us on Apple Podcasts*

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Show Notes Transcript Chapter Markers

Send us a Text Message.

Today on the Owned and Operated podcast, the boys interview entrepreneur Johannes Hock, the Owner of an artificial turf company who lives in Austin, Texas. They discuss Johannes's background, how he got into the turf industry, the business model of turf companies, expansion plans, challenges of scaling, and the factors influencing the choice of new locations. If you’re looking to learn more about the world of self-funded search and small business acquisitions then your favorite electrical, HVAC, and plumbing growth podcast has exactly what you need.

Chapters
00:00 Introduction to Owned and Operated
00:34 AD - Transforming PPC Despair into Success
01:08 Deep Dive with Johannes Haack: From Track to Turf
02:54 Choosing Artificial Turf in Home Services
05:33 Exploring the Business Model of Turf Installation
07:57 Marketing Strategies and Customer Acquisition in Turf Industry
12:03 Scaling Up: Processes and Expansion Strategies
15:33 Vision for the Future: Aiming for a National Brand
19:11 The Operational Blueprint: Systems, Processes, and People
26:52 Expansion Strategy and Market Selection
30:40 Final Thoughts and Where to Find Johannes

Episode Host:
Jack Carr: @thehvacjack on Twitter
Guest Johannes Hock: @HockJohannes on Twitter

Special thanks to our sponsor: Service Scalers:
Looking to scale your home service business? Service Scalers is a digital marketing agency that drives success in PPC and LSA. Discover more growth strategies by visiting Service Scalers: https://www.servicescalers.com/

Check out Owned and Operated Weekly Insights: a newsletter that’s jam-packed with actionable growth strategies to level up your home service business. Subscribe Here: http://tinyurl.com/ownedopnews

Don't forget to subscribe!
Youtube: @OwnedandOperatedPodcast
X: @ownedoperatedco
SPOTIFY: https://open.spotify.com/show/10mwKIq35xzVz5qHcju3Kb?si=a2eb1f177053402d&nd=1
APPLE PODCAST: https://podcasts.apple.com/us/podcast/owned-and-operated/id1560999545
www.ownedandoperated.com

Contact us: info@ownedandoperated.com

Contact the Owned and Operated plumbing, HVAC, and electrical growth podcast

*Review us on Apple Podcasts*

More Ways To Connect

John: I'm John Wilson. Welcome to Owned and Operated. Twice a week, we talk about home service businesses, and if you're a home service entrepreneur, then this is going to be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting.

Let's get into it.

Jack: Are you currently dumping money into the PPC pit of despair? That's how I used to feel. Before I started working with service scalers, I would waste money with two, three, four other agencies. Then I started working with service scalers and they were able to drive meaningful leads in my business. And now it's one of our cheapest paid lead generation platforms.

They specialize in PPC, SEO, and LSA management. So if you're looking to increase meaningful leads in any of those areas, I would give them a shout out and see what they can do for you. 

Welcome back to Owned and Operated. Today we have a great episode. We are talking with Johannes Haack, who is a Owner of a artificial turf company out of Dallas and Austin and Salt Lake and a few other locations that we will dig in today.

How's it going, Johannes? Good. 

Johannes: Thanks for having me. 

Jack: Yeah, of course, man. We're really excited to have you. John's in a emergency. He will jump on here in a few minutes and so we'll just get started with you. So we'd like to start off with your background. Tell us about where you came from, how you got into the industry you're in and what are the next steps for you?

Johannes: Yeah, happy to. So I was I was born and raised in Germany. Not sure you knew about that, but born and raised in Germany, came to the U S by running track and running track of the university of Texas. That's supposed to be an exchange semester. And here we are 10 years later. Started my career in, on the finance side, did banking and private equity, and then about three years ago my business partner and I, who I met at the private equity firm, got the search bug wanted to jump into the operation side.

I had worked with a lot of kind of family owned businesses, some in the home service space at the private equity fund and frankly saw a bigger opportunity there than staying on the capital provider side And after, you send a lot of big checks across the table. You wonder if you're sitting on the right side of it.

And three years ago, did it, did a self funded partnered search and found the, this artificial turf installation business in Dallas that we bought almost two years ago or a little over two years ago now. And yeah, it's been a wild ride since then we've expanded quite a bit open to new locations organically, and just closed our first ad on and yeah happy to dive in.

Jack: That's awesome. So let's start off with how did you choose artificial turf? When people think of home services, that's not one of the big, giant ones that pops out, but it's a definitely a unique one. How'd you end up there? Yeah, 

Johannes: absolutely. It wasn't an area that we were looking at. I think from our perspective, we started with characteristics more so than anything in terms of the business this, it, Businesses that we were looking for we had a pretty agnostic industry, agnostic approach at the private equity firm.

We're at we've done anything from technology, healthcare, home services all across the board. So we were much more focused on characteristics than specific industries. And so I think what stuck out to us about turf when we came across it was one it was a relatively new industry.

That's a part of why it's not, as much talked about landscape and kind of pet turf, which is what we focus on has only been around for about 20 years. So in a lot of markets, it's still very new and customers don't even know about it. And I think that the biggest factor was looking at reviews.

I think if you've done any, or if you've spent any time in home services, if you can get your Google rating over like a four, that's pretty good. There's always, the upset customers are the ones that write reviews and the ones that are happy are just glad to move on with their life.

And if you're a, if you're a 4. 5 rated turf company you're doing terrible. Like the whole industry is just like between 4. 5 and five. And that's across the country. And when we dug into that, it was like we probably don't have that much better craftsmen than any other home service industry.

So it has to be the product. There has to be something about the product. And did some market research, talked to a lot of customers and and started to figure out, okay why is this such a good market fit, probably market fit for a lot of people. And frankly, it's just most customers are, they're tired of not being able to use their backyard.

They've you wait a long time with what home prices are today to finally get out of an apartment or a condo and into your home, and then you have some trees there and it's a dirt pit or a mud pit. And it destroys a lot of the upside of being a homeowner and the dream of being a homeowner.

And so that's where turf comes in and we give people that, that outdoor space back that they thought they were buying when they got a home. It's really exciting. And I think in a lot of home services, you deal with the HVAC unit broke or the toilet isn't draining and.

Yeah you're providing a service, but it's never a customer that's excited to see you. Where it's like, for us, a lot of it is, you do shake a lot of very grateful hands when the job is done and 

True excitement in the eyes.

Jack: Hey, you, you want to talk about somebody who's been in a hundred degrees for three days. They are very excited to see you. That money is well appreciated when that toilet's overflowing and you're the one to come out and fix. I'm telling you right now. But I do see where you're coming from. Walk us through the business model a little bit more.

So for a lot of home service companies and even like B2B and other others, you see a maintenance service, large ticket sale, where they flow into each other, the maintenance has flow into services, the services, then our repairs, and then the repairs flow into these large tickets. Do you have any kind of reoccurring service behind the turf industry, or is it just more of a construction side where it's, Hey, you get a big job here, big job, their school.

And speaking of that, is it B2B or B2C mostly? Sorry, two questions. 

Johannes: Yeah. So it's no, it's good. Good question. We do have a lot of kind of B2B customers we work with, other contractors schools, playground companies, stuff like that. But also a pretty meaningful portion of just working directly with the homeowner.

And I think we're much more similar to a fencing, roofing, siding, decking type company, where it's part of the premise is that you're not going to have to deal with your backyard for the next 15 years. So I can't really walk in there and say, Hey here's the service plan.

Cause then you might as well, stay with your real grass and your landscaper. Although for a lot of people, it's just not an option. Like it's, we get a lot of calls that like I've resorted my yard three times. I'm just done with it. Fix it. 

Jack: The idea is to get rid of the landscaping service plan, right?

Johannes: Yes, exactly. And so I do think it is a little bit of a different underwriting when you look at the business and also a little bit different of, in terms of how you run the business compared to, a pest control or a lawn mowing type business where it's, yeah we have our routes and we, you look at route density and those aspects, whereas.

For us it's certainly a lead generation and more kind of macro environments and maybe not macro environments, but more so like the local environment. So one of the reasons we like Dallas a lot is because, people are moving to Dallas. We have a great underlying trend there in terms of new homes getting built.

You have a chance there, people moving to Texas. So that's a great underlying trend. We have the big adoption trend. So if you look at California or, Phoenix, Vegas those areas that have had turf for quite a bit longer than our core markets. You're looking at probably, 20 out of a hundred homes have turf.

When we bought the company in Dallas, it was like less than one in a hundred. And so you have that as a tailwind. So you have to look more at what are the demand drivers and what share of that revenue can I capture? Rather than it's not a recurring revenue business in the traditional sense, like software would be.

Jack: And so when you're thinking about those trends and you're thinking about marketing, you obviously opened up to multiple locations. What, in terms of some of the numbers, what does that look like? So you're spending. A hundred dollars customer acquisition cost, our lead generation cost, and then you're selling on average, what a 15, 000 ticket.

What does some of the numbers look like for our listeners out there in the turf industry? 

Johannes: Yeah. So I think it varies. A lot, depending on the market, right? I think you and it varies a lot depending on your company, right? So if you have, you were one of the early players in the market, you might have a website that ranks well and people find you organically.

You might have relationships that are well established versus if. You're the 30th, 40th turf company in Phoenix. You're probably not getting a lot of organic visibility. And you're going to have to spend a lot on paid marketing. And I think for us, it's I know John put out like a home service marketing guide, right?

That there's, we do a lot of similar things like that. I think all the regular, you Google my business listing your website. All those aspects are, an area that we're heavily focused on. Um, don't want to get like into exact margins, I would say. Yeah, no, I don't give away the secret 

Jack: sauce.

We don't want the secret sauce. Just the, just like very high level general. Yeah, no, 

Johannes: I think it's large ticket items, right? I think you're right in terms of 10, 10, 15, 20, 000 type jobs. And so you can have, customer acquisition costs of 500, a thousand, even 1, 500 depending on your market.

I think what's the area that people like should spend more time on or understand more is most people in our industry and probably frankly yours and across home service, don't know what their customer acquisition cost is. And I think that's a big factor. So for us, we spend a lot of time on making sure we know where it feed comes from.

So we have different types of call tracking. Like CallRail is one of those products that I think pe, every home service company should have. We have UTM trackers on any which way that someone can go through the web and find us, I want to know if you started out on Facebook, then went to the website, then submitted a lead form.

And think that was one of the big revelations to us. It's when people say, oh, I spend, 2%, 5%, 10 percent of revenue on marketing, that's not good enough. As an operator, like you need to know, I spend X amount of dollars on radio ads and I make X amount of revenue from radio ads and vice versa.

And whether that's different phone numbers or whatever it is, 

Jack: What CRM system are using to track that? So like we, obviously we talk about service Titan a lot and service Titan does an amazing job. We can dictate which phone numbers are generating which thing. And there's specific things for our call center to add and say Hey, this was from here.

This was from here. And so we're really easy. Easily able to do that. What systems are using for your, cause you're not really doing service or maintenance, so is it just like what services are available to you? 

Johannes: Yeah it's funny. We reached out to service Titan when we first bought the business.

Cause that's the one that I was familiar with too. And they're like yeah we won't even offer you. You're not a good choice. 

Jack: Yeah, 

Johannes: that was incredible. I never been like would you like my money? They're like, no, thank you. We're good. So they sent us to the aspire side, which is the landscaping side, but that's not a good fit for us either.

The system we're currently using is workies. I think people use house call pro people use job or I think all of those systems are fine. There's not really one that is solve all your problems. In terms of tracking, we do a lot of that. More manually, more in house.

So we, we have some automations that pull together reports of like essentially a database of here's all the leads. Here's where each leads came from. And then, we have a tracking field where I've, we taught our. Appointment centers and everyone to identify where lead comes from.

And then quarterly we go through and check those two databases against each other. So I look at what our internal system says and what our, lead Bible says, and then I make sure that's all updated. And that might, that probably sounds like a lot of work and a lot of like verification, 

Jack: Yeah.

So my next question was more so understandable. That makes sense. It's very easy to do. But moving now you're going from one location. And so we jump back in the time machine, go back a few years. Now you're buying a second, your third, fourth location. And now you're really thinking about this expansion.

How are you thinking about that Yeah. process as you move into expansion? Is it single location? Are you moving call center into a one, one giant call center? That's calling out or taking calls from all the locations. What are the processes you're putting in place now that you're growing so rapidly?

Johannes: Yeah. Great question. And maybe just for a quick background for anyone that, that isn't as familiar with our story. So we bought the business in Dallas about two years ago. And then we opened, Austin last year, Atlanta this year. And we're on an expansion course there of two to three new locations a year.

And we started also buying other installers as well. We're, this is a pivotal moment for us where we've had to think about, okay, we were, we built the process and the systems to a certain standard. And now we have to like, how probably every, operator eventually runs into that.

You build systems for a certain scale and then you reach that scale and then you have to retool everything again. 

Jack: We call it the oh shit point, the oh shit point in HVAC and plumbing is 10 million. You build all these processes to get up to 10 million and then the minute that you hit the 10 million mark, everything breaks and you have to redo it all over again to get to 30.

Is that what you're running into now? No. 

Johannes: Yeah, no it's exactly what we're running into. So we started, the good thing is we started building processes and systems from day one that were scalable for the individual location. So I think that's the first thing that, that people should figure out.

Like when we bought the business, it was, we were scheduling on a whiteboard and it was literally like, add two more crews and the whiteboard is too small. So the classic example and Like I think one thing that people always underestimate is like a lot of these like pen and paper and whiteboard type process that small business have are incredibly efficient.

Like people are like, Oh, how could you still do this in 21st century? And then anyone that's bought a business and gone in is Oh there's actually a lot of thought that like led into this being the system. And so that's why a lot of times, getting the first to the first step of actually having, some online system, something like that is, it can be quite painful to get there.

But so that, that was a good first step for us was make sure that the individual location can scale indefinitely. So that was the first part. And then once we started expanding to new locations, it became, okay, now we have to build a system for managing multi location. We started out building the shared service center that you mentioned.

We started out building the call center we're, integrating the backend in terms of accounting, payroll. Insurance, right? All the kind of admin and overhead type stuff. And so that's the process that we're in right now. So like we, we had the classic, our, a phone provider was like, you add a new location.

You're like, Oh you can't do that with the current plan. And now you're like figuring all that stuff. So we're exactly at the point that you're talking about. And then the second piece of that is one is on the system side and then the other piece is obviously on, on the people side.

And so it, it's always easy to feel like, Oh the extra crew that's just what, one extra thing for payroll and for whatever, and then they like but it turns out because it's a different EIN or a different like city, there's like a lot more work there.

And that's the other thing that we're working backward from right now is okay. Let's look three, four years in the future. What do you want the organization to look like? And what did we want? Like the location count and revenue to look like. And then work back and say, okay, let's build a system then.

So what is that? 

Jack: Are you able to say what is the pie in the sky goal that you guys are targeting for that five year plan? I know we spoke offline, so I'm cheating a little bit, but like, where do you feel comfortable telling us? What are your goals over the next five years with this business?

Johannes: Yeah. So I I think we can say that the goal is to get to 50 that's both through organic and acquisition. So I think that's also a piece where people, it's easy to say a big number and to just buy existing businesses that are big, right? So like that that, like that doesn't create any value, right?

Like just because you buy a business that's worth 10 for 10, you haven't created any value yet. And but that's the goal. I think we, we think that at that scale it becomes a different business than just like a local installer at that point. You have national brand, 

Jack: you got some enterprise value in that national brand.

Sorry, I don't mean to interrupt you, but I'm really curious. Is there, we've talked to, Kenzie who did, who had working on pool roll ups and there's HVAC and plumbing roll ups, which we all know about. Yeah. Are there roll ups in this industry, in the turf industry, or is it PE backed?

Is there any competition that you're looking at as you grow to that 50 million mark or at least becoming an acquisition target? 

Johannes: Yeah, I don't think at this point there is a national platform. There definitely isn't. Anything on the level of the typical PE platforms that, we all know that the Alpines of the world and that kind of stuff.

Jack: Yeah, you're the first. Is You're the first roll up, technically. That's neat. That, 

Johannes: yeah, there's, there certainly is a goal of becoming the, You know, the poster child for that, where it's okay, yeah. For anyone that's Oh, we like this industry. How do we make replicate that play in this industry to be one of the attractive targets for someone like that.

There is some local guys that, or like you regional guys where folks are doing some, something similar to that. But. I think it's mostly due to the industry just being young. Every year, like all the existing players are growing and it just wasn't a big enough market. I think historically to, to where it makes made sense.

But I think if you go five, 10 years in the future it will become that. And you have it on the manufacturer and distributor side. They're all very heavily PE owned. There's this kind of four big conglomerates that run most of the manufacturing and distribution. And so that's the same thing that happened in, in HVAC and in roofing, it eventually goes down from like the manufacturers to the distributors and then eventually into the installers.

John: Hey, this episode is sponsored by Service Scalers. So Service Scalers is actually a brand that I've used personally With our companies for a little bit over a year now they've helped us manage our digital advertising. Frankly, they did a lot better than our last agency. Leads went through the roof, and cost per click went way down.

Check out Service Scalers if you're a plumbing, HVAC, or electrical home service company. That's what they knock out of the park, and they did a great job for me.

Jack: Yeah, they want to own the entire supply chain and then move vertically into, to your industry. That's really neat. And so now that you, you're getting to a point where you're breaking the oh shit levels and excuse the language, but you're busting through these caps and now you have to rethink what as you move into your fifth or sixth or seventh market, what is your big driver to get to that next point?

Johannes: You're saying in terms of revenue or in terms of 

Jack: I'm saying in terms of what systems and processes are you thinking of right now? As you're a 10, company or 25 million company. And to get to that 50 million to two X, what processes are you putting in place now? People, systems, what are you focused on?

What's your, Big rock your boulder that you're trying to move. 

Johannes: Yeah. I think the one the most important question you have to solve when you're crossing that threshold is you have to start managing managers and coming up with a system that works well there where I think up until this point, any question that came up that there didn't need to be a meeting, they didn't need to be a standing, time because it was just.

Just call me, right? If something happens, call me and we'll figure it out on the spot. And so we're just running out of time for our day, for my partner and I, where you add another three, four or five locations. It just, there's only so many hours in the day. And so I think getting that part right where we have, we provide all the support that we can to each location while at the same time, not, removing ourselves enough from the day to where we can look at the bigger picture and make sure that each location is taken care of is probably the biggest problem we have to solve.

And so I think that comes down to one, you, it's a little bit different job now, right? Like now you're training people to manage people rather than training individual contributors. And so I think a lot of that is looking at, what in our current company the GMs that are really good the folks that are managing things that are really good.

What can we learn from them in terms of implementing similar, like systems processes, like rules with new locations and, other locations that we buy. So I think figuring out that side is going to be, if we can get that piece, right. That's going to determine, where we stand in three, four, five years.

Jack: And are you considering these people C level suite or how are you thinking about those positions or what, where are they coming from? 

Johannes: Yeah. So I think for us right now, the biggest thing is going to be one getting the GM positions, right? So we're running, each location is going to have their own GM.

True GMs, like 

Jack: P&L ownership as well as management or just ops management. 

Johannes: A mix. I would say true GMs in the sense of anyone, anything that happens at location is in their responsibility and authority. But then there's going to be some things like you can't pick a different field service management system, right?

You're going to have to run them on the one that we have as a company. So there's a couple of like company wide things. But I definitely want the, I think if you lose the local nimbleness, you're going to lose to the local guys. And we want to have as much authority and responsibility locally as we can, and then just use the back office to essentially enable those folks to.

Be successful in the market. So they're not C suite. And then I think the other piece is like, we, right now we still have a lot of responsibility on the, kind of like not operational side, but on the admin side, it's if we buy a new truck, we decide to buy a new truck and we buy the new truck.

And so I think it becomes, it comes down to what we need to find the people that are help going to help us in like insurance, truck management, all these things that used to not be real roles, right? Like when we bought the business, there was like five trucks. So I can't have someone that manages vehicle.

So then we, we want to set it up. So in, three, four, five years someone else at a sea level could manage the business. And it's not just like us that have, all the 500 passwords to 400 different things and that type of situation. Not saying that's necessarily the way we're going, but I think it's it's always good practice in business to, to make sure that you are, you even as the operator are replaceable and it's your job to optimize and improve the business to that place.

You, because you never know what's, what can happen. 

Jack: Yeah, that's neat. And it's very interesting. So there's a lot of similarities, right? We all have in home services, what we found out as we've interviewed, 10, 15, 20, a hundred people is that all the problems are linear in the sense that you start to grow beyond a certain point, you have a fleet manager, you start to, to have a marketing manager, you start to have this finance issue.

And so an HR issue and all these people go into the space. But what I find interesting about your business is that at each location, you're able to generate, I think, since you're just doing the installation. Do you know what the average what does your truck, what does a truck produce out of your company?

Just before I finish this thought. 

Johannes: It's not, we use a lot of subcontractors, so we don't really track it on that level. Thankfully we don't have a massive fleet. Every time I get an insurance renewal I'm grateful for every truck that I don't have. So for us, it's we look at it more on a crew level.

And then that again can vary very widely from, if you have seasonal, non seasonal, I think a crew can install anywhere from half a million to 2 million a year. So it's a really wide range. 

Jack: That, that's where the differences is. So you look at plumbing, HVAC, electrical, pressure washing.

Just across the board, most home service industries, each truck is, does about 300, 000 of service trucks will do 300, 000 a year. But since you not doing the service portion, your trucks are doing half a million to 2 million a year, or what we call it a truck, but a crew who's working in that truck.

So what is the revenue generation per. Group of people that you have grouped together. So when you look 

Johannes: for you guys, it's per truck is that's usually one tech, right? 

Jack: Yeah, I mean you can have a helper. But yeah So I think 

Johannes: that's I think that's the big thing like a crew a turf crew is somewhere between three on the low end to six on the high end.

So I think per head, it probably comes out to 

Jack: relatively similar amount. Yeah. That's that. I'm glad it does. Cause that makes me always feel better. It's this is a fact about home services is it will always do 300, 000, no matter who it is or what industry it is. And so when, as you grow these individual locations though, you could potentially, are you looking at it from a, I'm really interested because this is where we're getting to these same questions is, are you viewing this as a say, fleet manager, for example, is this fleet manager position going to be?

In overlooking the entire company, all locations versus individual fleet managers at the specific locations. 

Johannes: Yeah. So for us, like that's the goal of the shared service center, right? Is something like that should definitely be across the loca like across the company. 

Johannes: I think one big piece there for us is you can have an HVAC location in a major city that does.

50, 60, 70 million of revenue. There, there is not a single city in the country where a turf company could ever get to that size. 

Jack: Okay. It's 

Johannes: just, if you go to Dallas, there's 4 million homes and 4 million HVAC units. There's not 4 million backyards of turf. And so I think having the having that understanding is like, if you wanna do shared service at all you gotta have you, you have to generate revenue across cities and then centralize.

So those decisions. So I think for someone that like is that size of an HVAC location, it might make sense to have a local fleet manager because you know that's the same amount of vehicles or for HVAC it's gonna be five x, 10 x the amount of vehicles. Exactly. Yeah. Yeah. That that we have.

I think for me that the biggest thing that I want to have local is anything related to the install, anything related to the sale, like anything essentially related to the actual job itself. And then I think there is a lot of opportunity that the call center doesn't need to be local. The insurance, the admin, the billing, the, like all those things don't need to be local.

So that's how we separate the two. And that's also the only way to get enough scale to where a shared service center even makes make sense 

Jack: neat. so you're expanding you're trying to get to 50 million Next steps you're hiring a c suite have you targeted any specific cities nashville number one ready to go?

Johannes: Nashville is very high on the list. Or we'll be there sooner than 

Jack: how are you choosing? How are you choosing those cities? What is the driver? Is it like, Hey, it has to be in the South. It has to be a certain degree. No water. What are the driving factors for the next locations that you're choosing?

Johannes: Yeah. You're exactly on the right track, right? I don't think it's rocket science to figure out which cities make sense in that regard. We look at search volumes as well. We look at local competition. So I think it's the classic, you look at the demand side, you look at the supply side and you figure out if which markets make sense.

I think in general Turf is moving West to East with the exception of Florida. And I think generally that, East of the Rockies is our newer markets that are interesting. What I will say is that the landscape has shifted quite significantly, even from the two to three years ago when we got into the industry.

I think when we got in, it was definitely still quite a bit newer and it feels like the word is definitely out. So it's like rare, more rare that you find major cities that, don't have anyone doing it or don't have a local supplier or something like that. So I think it's gotten a lot more.

I think we got really lucky with timing on this one. I think if I was in the same spot today, like if I were to offer if I was offered to buy the company that we bought two years ago. At that size today, I'd be a lot more cautious. Better lucky than smart to a certain degree.

But yeah so I think expansion wise, it's yeah you'll look at exactly those factors that you talked about and then we we try to open two to three a year. And it's a little bit of a race to, to put flags into into cities for sure. 

Jack: Yeah. And so here's one, one last question regarding where you're moving to or where you're targeting in terms of market.

So in HVAC, there's always the, I get asked a lot, this question, it's, Do you want to be a big fish in a small pond or a small fish in a big pond? And does that what does that look like for turf? Do you need to be in a big pond because you need the extra volume or can you own a really small 60, 80, 000 household market?

Johannes: I think if you are a single truck installer, you can, but it gets really like you can't have, it's gotta be, you are the one who's selling and is doing the install. And so I think there, there's a lot of opportunity for that. There is definitely a lot of markets where if you're, one guy with your truck, you can make a great living.

You're never going to have any competition. You're probably going to do a little bit more than turf. You're probably going to do. Paver stacks and turfs or something like that. You're probably going to mold a little bit more into an outdoor living company, but I think there's a lot of places where that makes sense.

Where it doesn't make sense for us to go into, right? Like we're going to need to pay sales rep at least. We're going to need to pay the installers, all that stuff. And so there is definitely a level that we, of market that is too small for us, where the individual guy with the truck can still make a great living.

Jack: Yeah, that's neat. I feel like that's the way the home service industries in general are going. It's you get these really big guys or you get the really small ones in the middle ones are getting bought up by. People like you and me. It's an interesting movement. I'm really interested in this market mostly because like you said, it's a newer market.

So you're missing out on or not missing out, but it's just different in the sense of there's not the same like old generation that's retiring. And it's, if you started the business, 10 years ago, 15 years ago at the beginning. And you were 30. You're 45 now. It's not like you're in your seventies and you have to retire.

So it's an interesting market in general. So awesome. I appreciate you coming on today. I'm sorry, John didn't get to make it. He must have tripped and fell down some stairs or something. Where can people find you? 

Johannes: Yeah, a lot of places. So I'm on Twitter. That's how fun you guys, 

Yeah, exactly.

I do I write a blog sometimes it's called by small cell high, where it's not regularly, but anytime I have something interesting that usually it's something that didn't make sense to me initially. And then I had an aha moment and then I write it down so I don't forget about it. So I wrote a lot about our search process, how we found the business and especially on the early side of buying a business is on that side.

So that, that's a good way, obviously, LinkedIn, all the other platforms as well. Only other thing I would say is we do we do invest in a lot of other searchers. I said yeah I love the space. I love, I think the. Especially on the SBA funded side I think that signature is most of the, or one of the most important signatures other than your marriage certificate that you're probably ever going to make.

And so I like being part of those kind of high stakes moments. And I sit on the board of a roofing company in Miami and like those kinds of things. And so that's the, that's 90 percent of our time is spent on this business. And the other 10 is focused on that. So especially if folks are listening to this and Looking at making an acquisition or or further down the road or even early in the process that's something that, that we always like to do is get, give folks capital to get into the seat as well.

Jack: And so what's your Twitter handle. So I know on your Twitter, when I looked that you could find that newsletter what's the handle that people can find you at? 

Johannes: It's at Hawk Johannes, H O C K J O H A N E S. 

Jack: Johannes, I really appreciate today. This was awesome podcast. I had a lot of fun.

And so for anyone listening make sure to subscribe to Johannes's newsletter, our newsletter at owned and operated. com. You can catch us on the YouTube. We have some minis and shorts and fun stuff on there. So find us on YouTube as well as in June, I believe third to six, we are hosting our breaking 5 million conference.

Take a look at it on the website. We'd love to have you and have a good one. Appreciate y'all. Thanks for tuning in 

John: to Owned and Operated, the podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out.

You can find me on Twitter at Wilson companies. I'll see you next time.

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Introduction to Owned and Operated
AD - Transforming PPC Despair into Success
Deep Dive with Johannes Haack: From Track to Turf
Choosing Artificial Turf in Home Services
Exploring the Business Model of Turf Installation
Marketing Strategies and Customer Acquisition in Turf Industry
Scaling Up: Processes and Expansion Strategies
Vision for the Future: Aiming for a National Brand
The Operational Blueprint: Systems, Processes, and People
Expansion Strategy and Market Selection
Final Thoughts and Where to Find Johannes