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HVAC Experts Share Their Hiring Insight

HVAC Experts Share Their Hiring Insight

Posted by Alexa Greenberg

May 11, 2021

Group of people standing together in workwear with arms crossed looking at the camera

HVAC Hiring Interview with Brandon Brown

Brandon Brown is the owner of Browns Heating and Air located in Lynchburg, Virginia.

Brandon [00:58] Hi, I'm Brandon. I am in Lynchburg, Virginia, it’s central, right in the center of Virginia. I am 39 and I started my business in 2006, so we're going on our 15th year of being in business. I started HVAC in high school with the program we have here at our local high school and community college. I would spend half a day in college doing heating and air and the other half in high school. So I started back in ‘98 doing heating and air. I worked for a couple of companies and then decided to start my business in 2006, just myself, in a truck. Now we're up to 22 guys in the field and we have three people in the office.

Lillie [01:37] So, if anyone knows hiring, I think it’s you.

Brandon [01:43] I hope so, I hope so. It’s definitely the hardest part of owning a business.

General Hiring Questions

Lillie [01:50] Do you enjoy the hiring process?

Brandon [01:53] I do, and I think I enjoy it too much because, you know, I started the company myself, so I'll take on a lot of the company stuff.

I've got a couple of supervisors in place finally, and my office manager and they try to tell me not to come to work because I'm so involved - and I’m not worried, but once you start something and you're building it, you know, it's a lot of stress on you that you want that thing to keep rolling the way you built it.

It’s not that I don't trust the people in place. It's just that it just feels different when you're involved. So for the first several years I was involved the whole time, start to finish, and I made the decisions and we're finally at the point now I've got two guys that are in place that once we post the job opening, they do the interviews, they do the screening, and then I just do the final sit in interview and meet with them to pick the people.

Andrew [02:50] As far as your company structure goes, what are the different job positions/ titles within your company?

Brandon [03:00] Now that we're at about 20-22 people, I do have an office manager - my wife. Last year, she came on board full-time and she actually took to another office position more, so she now handles my marketing, my billing and stuff.

‘Cause I, you know, for a while when I was growing, I was doing it all. I was dispatching, I was estimating, I was working, I was hiring and I was doing it all. So it just gets to be too much, and then once you get too many people... I do have two people now, a residential kind of supervisor, and a project supervisor that have recently, this year, kind of taken the role over those groups of guys and they're growing in that position to take the load off of me to do more concentrating on the, the bidding and the broader, you know, the bigger picture.

Lillie [03:49] Which is nice, it’s so good you have that support.

Brandon [03:53] Yes, definitely. You’ve got to have support once you reach, I think once you reach so many people, you know, I was doing okay by myself with about 8-10 people. And actually at that time, I was a paid fireman here in Lynchburg for about six years of that. I was doing heating and air and fire, but, you know, once the company got big enough, I had to make a decision, you know, one or the other.

So luckily I was able to just say, heating and air only, and that's been continuing to grow. And once you get over 10, I think 10-12 people, you've got to have someone in the office, you've got to have another person for them to call. That’s the biggest downfall. If not, you're on a vacation sitting on the beach and your phone's ringing the whole day.

You don't really enjoy your vacation. So you've got to have someone else that you can trust to make decisions so that you’re not bothered the whole day.

Lillie [04:52] Right, right. In regards to hiring, what is something that you know now that you wish you knew when you were hiring your first employee?

Brandon [04:59] I think having goals for your employees and knowing what your expectations are. When I first hired people, I was young. I just, you know, kind of hired quick. I didn't do a lot of vetting and didn't really give the guys that I first hired something to work towards. So you know, I lost a couple of employees and I learned from that, ‘cause we lost some people along the way that would take on better job opportunities.

And most of that was because we were growing, I didn't have the benefits and stuff that they needed. I didn't have a, you know, a plan. Now, when we sit down and bring in people, we tell them our goals, you know, this is what we're going to expect of you in the next year or two if you want to do heating and air and you want to stick with it.

We tell them, “we want you to get your certifications and we're going to help pay for it. We're going to train you.” We give them a five, you know, not a five-year pitch, but we give them a pitch or something to work towards. And I think the younger kids now need that. It's way different now.

It's crazy how I'm only 39, but when I started in 2006 compared to now, the candidates you get for each job... it's just night and day. So I noticed that a lot of these kids want something to work towards - knowing that each step they can go, they're going to earn more money, they're going to earn more benefits and they're going to move up in the company.

And that's something that I learned now that you have to offer to, you know, really get the good applicants.

Andrew [06:34] Do you feel like a lot of the candidates now are candidates that want to stick around for awhile, or do you feel like they’re bouncing around a lot?

Brandon [06:47] It's funny now and it's kind of sad. I mean, I do have a lot of good young guys, and later, when you ask some of your questions, we’ll get to the topic of how I find the good guys. That's different, but it's funny now because out of all of the applicants we get, you know, I'll get 30 applicants and literally, maybe two will get to where I want to interview them. I think it's the way they're raised now. They don't have the drive that we used to have when we were growing up. It’s the drive and then sometimes you can just tell right away that it's just not heating and air, or getting down and dirty in these attics and these crawls, and basements, it’s not going to be for them.

So yeah, it's a different ball game now. So it's a lot harder. And I think my expectations for an employee as well, whether they have experience or not, kind of gets in the way because I hold my standards high. We take pride in holding a 5.0 Google review star rating, you know, so if the people who come in aren't like me, the way they care for every customer, like family, the way they care for the jobs...they can be the best technician for 20 years, but if they come in and they’re not dressed right, they're just smoking everywhere, or just the way they talk and act... you just know they're not going to fit into your realm of people.

It's more on me than that, but I just hold a higher standard sometimes on that.

Andrew [08:25] That's a good thing. That's why you're still in business.

Lillie [08:28] Yea, and have 22 employees!

Brandon [08:33] There’s a lot of competition here too. We probably have about 30, 35 heating and air conditioning companies around us that are competing.

Lillie [08:45] Do you have a hiring philosophy/ ideology? (i.e. heart over skill, experience, culture, etc.) and how has it shaped your business?

Brandon [09:02] That kind of fits into my last point. A lot of mine... especially when we hire now, we would rather them not have the skill, not have the heating and air skill, because we want to teach them our ways. So a lot of it is the heart over the skill for us - and looking at their experience in life, you know, what they've done, you know, where they've been, you know, where have they been in different businesses... hands on. Are they the construction type? Do they love building and making stuff and installing stuff? So a lot of it goes back to the heart over the skill for us because if they have the heart and the willingness to learn, we're going to teach them. Then if they want to do it, then we can turn that from just the heart and the love of the job to a really great technician or installer.

Andrew [09:48] Do you believe in always being in hiring mode, or only when your business has the need? (How is this impacted by seasonality?)

Brandon [09:55] We basically hire as we need it. I've always wanted to make sure I keep, cause I've I never want to lay anybody off, you know? Except for the first year, of course, I went into business and then about... always at about the midpoint of your business, you’re up and down with business, you never want to get so slow enough or know you're going to be so slow enough that you've got to lay people off because you may not get them back. We’ve got good guys and you don't want to do that. So I'm slow to hire. I'd rather get to the point where we're so stretched out that the guys are working 50, 60 hours, but they never complain because they love the hours, but when we get to the point where we need more people then we, then we start looking.

But we've been blessed the last few years that we actually have not had a slow time. So we base our work off the guys we have and the projects we have, and then the more projects I know that are coming, then we'll hire, or start advertising for those different positions.

Lillie [10:52] Yea, there's different things I hear people say - so you just mentioned that you’re slow to hire, quick to fire. Then other people will say that they're always hiring, which I'm sure in a way you are always kind of keeping your eyes peeled.

Brandon [11:06] We always take applications. We never turn them down. We always like to keep them. You know, if someone comes by, we can go through them again and have a file of applicants if needed. So you can call them quick and then get an interview set up if needed.

Job Posting / Application

Andrew [11:33] How do you let people know that you're hiring? Where do you share the information?

Brandon [11:38] We do a lot on Facebook. If you have a business page, you go to jobs, they have a lot of pre filled out jobs. It's really easy to create your template there. We've done Indeed. We've done some others to get your resumes. We've done posts and friends and word of mouth.

A lot of times people get here and work and they're like, “Hey, if we're ever hiring, I've told my friend, or whoever, about this company, and they want to apply.” They'll give me applicants and the applications, even when we're not hiring, so just from word of mouth.

Facebook has been a really great one. You can promote a job for a couple of weeks, it’s really affordable and you get a lot of applicants.

Lillie [12:26] Nice. How do you do that? Do you post it on your business page or is there like an actual section?

Brandon [12:31] Yeah, on our Brown's Heating and Air page is where we'll post it. Well, we'll make it in the job section and then make that as a post and we’ll get everybody to share it or even pay to promote it for a week in the area.

Lillie [12:54] How do you form your job description? Do you guys have a template that you use?

Brandon [12:59] Yeah. Yes and no. Indeed has helped us create some before, and Facebook, so we'll have one for a helper, we'll have one for lead service, and lead sales. We kind of use generic wording on there, but we'll also add different things about us and what we, you know, different qualifications or experience or things that we would like to see if it's an experienced position or helper position, we just like to see, you know, are you licensed? You know, no criminal record, background checks, stuff like that. And so we put some of our own stuff in it, but there are a lot of pre-built templates that are really good to use online.

Andrew [12:39] And what kind of information do you provide? Like about your business? Like, do you talk yourself up in the job description? Do you, or do you kind of wait for the interview for that? Or do you like to see if they research you?

Brandon [13:52] Yeah, most of our information is just basic Brown’s Heating and Air. We do a little summary - we've been around so many years, we have this many employees, and this is what we're looking for. So we do some information on what we are and who we are, and hopefully they research or have already heard about us and know what we do and what we're about.

Andrew [14:16] Yeah. It sounds like a lot of it's word of mouth so that’s probably the case.

Lillie [14:26] What do you want the employee to know about your business from your job posting?

Brandon [14:33] We want them to know that we take our customers and our business very seriously. We don't like to play any games.

If you're going to work for us, we expect you to be here on time. We expect you to treat everybody with respect and dignity, no matter who’s house you’re going in. We interview everybody. We don't single people out.

We don't single a group out. We interview everybody. The heart of the person is the heart of the person no matter where you’re from, what race you are, what ethnicity you are - none of that. We do our due diligence and we investigate people.

I mean, unfortunately, most everybody that applies has a Facebook, and we get a lot of applicants and you'd go back through and if I see they’re, you know, posting pictures of just stuff you really don't want your company to be about - whether it's drugs or hanging out doing this, or they’re supporting this, you know, some kind of violence or something, you're not gonna get past the interview process. And it's just something that I look for. I value my business so much and what we stand for that - and even like, guys that work here, you're allowed to have any kind of social media you want, but they know to always be respectful. You know, don't post stuff with your work uniform on, that you wouldn't want people to see because people know you and they’re gonna meet you on the jobs. They're gonna look you up as well. People want to know who's coming to their house, you know, so that's why we're really careful on who we hire. And I tell people all the time that are young, you know, if you're gonna get a good career now, you need to think starting in high school, what you post and what you do because in 10 years from now, people can go back and see all that and if you want a really good career, sometimes a post or something, a dumb decision you make now at 20, 25 years old may cost you a job over somebody else because people are going to look for that. People are who they are and it's America, you do what you want to do, but everything does have consequences.

I always tell my guys, if you want to be something, you know, and you want to go places, just always be careful what you do - not even just at work, in public too because people see it and it can affect you in the long run.

Andrew [17:02] I mean, I've seen a post here in our community of like, yeah, we interviewed this person, they checked all the boxes and then we checked their Facebook and it was like, they're not a culture fit. Like we can't have this person here. So it's definitely something hopefully over the years now, we're teaching these young people to really watch what they do there. Because it can cost you a job, and it could be years ago when you're not that person anymore.

Andrew [17:36] How do you stand out as an employer, amongst your competitors in the area?

Brandon [17:41] I think our culture and the way I treat our employees stands out a lot and people know that. This year alone because heating and air and the trades are dying off so much, you didn't have it as bad before, but now you're starting to have competitors call or see our guys in a supply house and are like, “Hey, we're hiring. Do you want to come over? We'll pay you more.” And I've had two or three guys, my guys tell me, “Hey, this company offered me five, $6 more an hour and I turned it down because working for you is worth more, you know, the way you treat us and the way we do things is worth more than a $5 raise cause I know what those companies are about and how I will be treated.” And that, that means a lot. I mean, it really does ‘cause I've had two or three top guys get offered by different companies raises and all kinds of stuff just to get them there.

And then, you know, are they going to keep their promises? Probably not. Our company always stands behind our employees and treats them, and gives them what they need, whether it’s bonuses or time off when they need it. We're really caring about their needs and family time. I don't push. A lot of companies here are working six, seven days a week. We rarely work a weekend. When we get busy and we need it, I put it out there. There is never a weekend if I need them, that they don't jump in and I get a crew “Hey, I'm ready to work.” And then I give them extra hours, but I never schedule anything on Saturday and Sundays unless it's an absolute emergency. Their time off and their holidays off mean everything because you need that time. I've had people call me that worked for competitors and they're like, “man, when you hire, please call me first. I've heard some of the guys before that have left other places and they were telling me how much they like working for y'all.” So a lot of how we operate in the community gets out and these people see it and they hear about it from our employees. So that helps bring in the applicants as well, that kind of feeds itself.

Lillie [19:50] Oh, yeah. You guys have set the bar. Yea, that says a lot about how you run your business and treat your employees. Brandon, when you're posting about your job, do you share whether you guys offer salary... hourly?

Brandon [20:10] We do hourly, but we don't really put a price. We usually leave a range. We always base it on experience and stuff, and once we interview we can kind of figure all that out. Now, when people enter, they come in and turn in their application and resume, and we tell them the job...we can tell them, “usually this job is 12 to 15 an hour. This is 15, this is what it usually ranges starting up... and you will move up and then we let them decide, you know, do you want to move on?” Then we offer an interview and “if you're okay with that, we’ll go ahead and schedule the interview.” I've had a ton of people apply who have never done heating and air before, or know nothing about it and they put on there, “I want $30 an hour.” Well, you’re not gonna get $30 an hour right off the bat just being a helper if you’ve never done heating and air, but if you’ve got to experience, you could. So we always leave that kind of open so you’re not kind of trapped into something.

Lillie [20:58] Right. Yeah. Yeah. That's something we were so curious of - If you do give a set price right out the gate, or you do a range, so that’s helpful to know.

Andrew [21:10] It always does seem to be like an awkward thing to give out or to talk about, like before you’ve even talked in person.

Brandon [21:20] Right, right, because as soon as you post, and a competitor's hiring, they're going to post a dollar more an hour or $2 more just to get that applicant over us.

Andrew [21:31] Now you’ve mentioned, I know you've already mentioned some things you would put into a job posting, you know, like the benefits and the experience and whether they can pass like a drug test and a background check and all those.

Do you do anything additional, like, do you have them answer a question or anything like that, that they send to you ahead of time so you could field that? Or do you literally just take all applicants and interview everybody and just really try to gauge it that way?

Brandon [21:56] The one good thing about Indeed.com and some of them, if you pay for the subscriptions, you can pick a ton of automatic questionnaires or exams. There's a mechanical type, just a general mechanical exam. There's a general personality exam. It’ll attach the results to the application and they'll fill it out so if they say they do have some experience and they take the mechanical exam and blow it out the water, then you know that they do have some general mechanical knowledge and you can work with that. So there's some exams that you can take and attach. And that's the one good thing about Indeed.com and some of those hiring ones. Yeah it costs you some money to get applicants, but you can kind of vet through the ones you want to interview if you can attach those types of exams. And one other thing you can do is a personality exam. You know, those things do a lot of good. You answer them and they tell you exactly what kind of person you are - you know, the A/B kind of person or personality and how they would fit working with others.

Andrew [23:00] That's awesome. I didn't even know that, that's great that they offer that.

Brandon [32:01] It's a lot of questions, you know, “would you do this or this in this situation?”

And at the end it gives you a “you're this personality _, you work well with others, you have a good attitude, blah, blah, blah.” Or they could be, “this personality wants to be alone, leave them along, they're not a morning person.” I mean, you learn a lot. It gives you a full summary of this a-typical or b-typical person, and that kind of helps you to pair up people and teams, you know, do you want an A and B working together? Well, probably, you know, once you look at their personality, you think they're not gonna work well together...it’ll probably take two weeks and they're gonna be fighting.

So you've got to pair that team up so that they get the most done for you with the best finish of jobs and customer satisfaction.

Lillie [23:45] You know, even just having them complete that questionnaire, that's a hurdle they have to jump through and you probably vet some people out that way.

Brandon [23:56] You can, you can easily, yes.

Interview Process

Lillie [24:26] What's your interview process from start to finish - and how many interviews does the applicant go through?

Brandon [24:33] We post a job and we try to get all the applications and resumes together, kind of go through them and get their history. Luckily online, there's a lot of free court websites, so you can type in people's names or bring up their picture, and if it matches, you can see if there's any felonies and different things, or if they're okay -because a lot of times your insurance and different automobile insurance stuff for driving, won't accept them anyway, your rate goes through. So you kind of get down to a single, you know, group of people to call. And then my two supervisors will call them and I let them line them up now. I was doing it, but the last couple of times I let them line them up. They sit with them, they kind of go over the job, what we're about, what we're doing, what we're looking for, what they've done previously. And then we go through all of them. If they narrow it down to a couple, we'll bring them back and then I'll kind of go over some certain things and feel them out as well.

And then after that, once we pick somebody, we'll call them and say, “we really like you, this is what we can do.” We share the offer over the phone with them, and “if you like that, you know, give me a start date.” For every applicant, everybody we hire, I would strongly recommend you have a handbook - an employee handbook that you get them to sign before they start, but have a 30, 45 or 60 day, depending on your state laws because like in Virginia, once you work 30 days, you have to put them on unemployment or your workers' comp and unemployment you have to cover.

So I give them a 30 day trial period. We get in it within 30 days, if it's, “Hey, this is not for me,” if they want to leave, they can. If you leave, there's no negative reviews. If a company calls us, we say, “Hey, they tried their best, they just didn't like heating and air.” There’s no issues with that at all.

If they stay, then you say, “all right, after the 30 days, then you're good.” Then you can start because then you can start offering the health insurance after 30 days anyway, and stuff. So we always do a trial period because I've had a lot of people coming here saying they can do anything heating and air, blah, blah, blah, to get the job.

And then within 15 days, I know they've never done heating and air or they just, they're not as good as they should be with all of that experience, you know, so you can tell that. I put them with my supervisors for 30 days. We let them work with them. We get a fill out and make sure they can do it. Or if they have no skills then they really, you know, are going to enjoy the job and then they stay on.

Lillie [27:00] Yeah. And that's something that you all are transparent about when they’re hired?

Brandon [27:05] Right up front. It's a 30 day trial. You know, if you don't like it, you can tell us, you know, it's not for you. Go ahead. And then after 30 days, we sit down and have a review. If they're going to make it, “Hey, you're doing good. We're going to keep you” or they're doing good, but “this is where you want to improve,” because I know it takes time to get used to people and, and new companies and stuff.

So you don't want to give someone just a week, you know, you come in and you're nervous, you know, you're learning people, plus you're learning the job. So you gotta give them the benefit of the doubt. You know, it takes people time to adapt to new jobs. So we like to sit down with them, give them the pros and cons and say, yeah, you know, you're doing good, let’s stay on, and then after a year, we'll meet again and see where you can get some raises.

Andrew [27:45] I love that. I love that you lay that all out at the beginning so they know what to expect and they're not like wondering if they need to go ask you at some point. And it's very important to do that. That's always been a lot of the jobs that I've taken, like when they lay it out that way, you know when those milestones happen and when you can ask.

Now you kind of already discussed when you talk about pay. So you probably don’t really talk about it too much during the interview, maybe just a range, and then you do discuss it when you’re like, “ok, we want you, this is what we’re going to offer you.” Do you find that people want to talk about rate? Is that like a thing for you? Like if someone comes in right off the get go, like, “yeah, how much am I getting paid?” Is that like a red flag for you?

Brandon [28:44] I guess we kind of throw that into when we're sharing what we're doing, this is the range of what you’re going to make.

And then once we offer, they know, but then we tell them, “you're going to have another meeting in probably a year, maybe less if you're doing really good. If your goal was to improve and we can see improvement over the next eight to 12 months, you're going to get a raise.”

“We’re going to tell you what you're doing good, what you're doing bad, or what you need to improve on. And if you need us to help you let us know, we'll do training. We'll do extra training.” That's how we’ll get you there. We want every one of our guys to make the maximum amount they could ever make.

So if they're doing good that means we're making more money, we're doing more business, then I'm going to give it back. I want them to be happy so I want them all to know, “you're not going to be stuck at this rate for a very long time. You determine if you make more or not.” It gives them a drive to work towards instead of just saying (in regards to a raise), “Oh, well, they'll give it to me in a year, no matter what so I'm going to be late or I'm going to be on my phone during the day.” You determine that. If a supervisor comes to me and says this boy, you know, this helpers on the phone all the time, or he's slow, or he's not listening. You're gonna pull them aside and say, “look, you're not getting that raise. You may get written up,” you know, if you get so much, you may lose the job in the six months. So I think it makes a big difference in knowing they have something, definitely a goal to work towards. Don't give them just a blank “come work” and nothing to work towards because I notice now the more younger they're getting, these kids, if they don't have something to work for, they're already looking the first day they come here, they’re looking for somewhere else to apply. They’re just getting a paycheck for a couple of weeks, then they're going to go somewhere else. So you know, you’ve gotta give them some responsibility to build on their own and not hold their hand, and learn because they're not going to be able to do that their whole life.

Lillie [30:50] What is your favorite hiring question? We got some really, really good questions from our Facebook community so I’m eager to hear yours. What is your favorite hiring question?

Brandon [30:59] I guess my favorites are the ones that kind of tell me a lot about them, like “what do you do when you're not at work? What do you like to do? What’s your family like?,” you know, “do you like to stay home? Do you like to go out and mingle?” Nothing that really stands out, but I like to know what else they like to do. What other things they like, like do you like sports and stuff? That builds up a lot of information for me to know, too, when it comes to different bonuses and gifts and stuff throughout the year, you kind of build up what they like so you get them stuff that they're interested in and not just something that they don't want. I think that, and then maybe just, I like to know their history of where they worked and how that went. That's tough because we don't really ask anything out of the ordinary.

Andrew [32:05] Yea I think that’s probably like a lot of people, just getting a feel for them with those types of questions. It’s also very comfortable for them to be able to talk about that - or, if it’s not very comfortable for them to talk about then it could be an issue too. I was wondering too, just from reading a lot of these job postings and talking to some other HVAC companies too, do you ask any questions around, like, are you ready to be learning forever in this job?

Brandon [32:30] Yeah. We love to ask, “What do you want to do?” I mean, we get a lot of 18 to 25 year olds. “What do you want to do for a living? Are you looking for this just to learn it and you want to go to school and be an engineer, or do you want to do this for a living?”

Because you can make, with the trades dying, we tell them you can make really good money in the heating and air, plumbing, and electrical trade because it's so hard to find people. And I really recommend one of my favorite places to go to find applicants, which is our local schools that have a career day.

Every one of them have career days. You can go set up a booth and you meet people. Some of the best employees I've ever had have farming experience believe it or not, because, I mean, if you think about it, farming experience in this area, you're raised with your grandparents, your parents, you getting up at five in the morning to work until dark - you're in the heat of the day, you're in the cold of the winter. And a lot of the shop classes that are around. the agriculture classes, or the farmers association have these people and the kids that grew up doing that. And those have been some of the best employees I've ever had because they don't know anything about heating and air, but they're going to show up and give you 200% and do anything you ask, because that was the way they were raised.

So these school fairs we'll go to, we'll sit at and we'll just meet the kids and see, you know, what are you doing in the summer when you're off? What do you do? Do you just sit around at home and the guys will tell you, “no, I gotta get up, get the hay, I gotta work cows. I gotta…” I say, well, can you interview tomorrow?

Cause you're the one I want to hire, can you give up farming for a little while and do heating and air? Because typically those types of mechanics and farmers and stuff like that... those hands on where you've just learned growing up from a baby that you're going to get up when the sun's up, you're not going to be in the bed and you're going to work.

So whether it was this trade or not, those have just been typically some of the best candidates I've had. Either the farms have closed or just, you know, cause it's off and on, they don't have farming anymore, but they have that background and that's really made a difference.

Lillie [34:48] Yea that work ethic. You can’t teach that.

Brandon [34:52] You can’t teach it, you can’t replace it, it’s just natural and they’ve already been through it and it just flows to whatever position or job you give them.

Lillie [35:00] Right, quick to learn whenever they’re working with their hands.

Brandon [35:03] Definitely.

Andrew [35:05] Yea my cousin's husband is in HVAC and he got a job fair job like that when he was in high school and he talks about that all the time how he was so worried when he was going through high school, “like, I don’t want to go to college, that’s now what I want to do” and it was great to have someone come and say like, “hey there are other things you can learn.”

Lillie [35:33] Yea we gotta keep and get more people involved in the trades. Brandon, what are your interview red flags?

Brandon [35:44] Criminal backgrounds. I mean, some little things, like misdemeanor stuff doesn’t bother me, but some of the different felonies and different things you have to look at, those are the red flags.

One, if it's driving incidents, of course your auto policy might not let you even hire them, and two, if they have a history of stealing and this and that, you just, you're not going to trust them. So that's a red flag.

Andrew [36:16] Is there like a limit to that, or I guess if your insurance would not put them on their insurance that's already..

Brandon [36:24] Yea, and I'll follow them. When we know we're gonna hire somebody, before I call them, I'll call my insurance and ask them - I just say, run it, if there's a driver's license number, this and that, are there any red flags on your end? And they call me back the same day and say “oh you're good to go” or “no, this one I would stay away from.”

Andrew [36:42] You do hear a lot of guys who have been able to get into the trades as like a second chance by having you know, a sorted past or whatnot, but I can imagine how tough that is when it comes to insurance and all of that. I mean, they’re a liability, so it’s a rough one to look at. You’ve gotta be pretty cut and dry.

Lillie [37:15] And at the root of it, you’ve gotta protect yourself and your employees and your business.

Brandon [37:25] Right, exactly. Someone asked, “How do you handle holidays and bonuses?”

Brandon [37:30] My setup is - after six months they get holiday pay. After a year, I start building vacations. I give them 16 hours of PTO time a year. So two sick days, and I give them from one to like three years. This is all in my handbook. I actually went to Rocketlawyer.com. You pick your state and it helps you build a handbook for your profession from start to finish for like 30 bucks and it's yours. If you don't have a handbook, go to that and use it. It's amazing. It builds all your holiday policies, your cell phone policy, anything with uniforms, they have to sign it. So you're covered because if you ever fire somebody that's against your policy and you don't have that signed, they will win the unemployment case nine times out of 10.

Because you need a policy in place signed. If you just do it by word of mouth, they're going to go with the employee and I learned this from experience during my first five years when I fired somebody that was late all the time and lied to a customer, he got the unemployment because I had no policy.

But they get the holidays. As far as bonuses go, depending on how long the employee has been here, I kind of do a scale. If they’re here a year or less, it may be a hundred. I've got a couple of guys that have been here seven, eight years now. I think they're making around a thousand for a Christmas bonus.

But we also have a big Christmas party at the end of each year. We couldn't this year because of COVID, but I'll do a dirty Santa, but we do great gifts. We wrap up TVs and gift cards. All gifts are good. And when we let all the employees draw numbers and play dirty Santa rules, everybody leaves with some kind of gift during the dinner banquet.

The guys really look forward to it. And like this year you did the post with me a couple months ago. You know, this year we actually just had a boot truck show up. The guys didn't know anything about it. They showed up to work and I said, “y'all go in the boot truck and pick out a pair of boots. It's all on me.”

I think that has been the best response I’ve had. I see the guys walking around and some of them have had boots for a long time, and I know you get comfortable, but you just, you know what, so they all picked a pair of work boots from the Red Wings truck. The truck showed up and they picked a pair of boots and then we all let them pick a turkey or ham for Thanksgiving. So some of those things add up, but I'm going to tell you what, it may not sound like a lot, but it means the world to some of these guys.

Lillie [40:10] Oh my gosh, yea. Yea I think that’s so awesome. What was the name... Rocket lawyer?

Brandon [40:12] Rocket lawyer.com. You can build I think handbooks, you can build like your business articles stuff, different things. They offer a ton of stuff and you just pay for each one. So I did rocket lawyer and I picked the employee handbook in Virginia. And it actually goes through like 40 or 50 pre determined questions in Virginia that already had the law.

So it'll ask you, do you offer vacation time? Yes. When? A year, and then it'll build you a paragraph. So once you're here a year, you get this, and then it builds you a full book where you can have a PDF or you can print it. It'll have whether you take your 30 minutes for lunch, your uniform, your Facebook posts, you know, if you're on Facebook or social media throughout the day and you’re caught, you can get written up.

So there's a lot of stuff there to protect you. So if you fire somebody or have to write them up, your policies are in place - they have to sign that when they start. Because the uniform policy, if you do quit or get fired, if you don't bring your uniforms back within so many hours, you don't get your paycheck. Well, in Virginia, if you don't have a policy on that, you have to pay them the paycheck and you gotta pay for the uniform.

So as long as it's signed, you're covered with a lot of stuff you would never think about. You have tool policies, any money they owe you, I'll have a tool account, they'll go get what they want. And I'll take out $10, $15 a week and get them the drills and stuff, their gauges, etc., but if they leave and owe me $500 in tools, you’ve got to have that signed policy so you're covered - either you keep their paycheck till they bring them or you get the tools.

Lillie [41:49] When do you typically get them to sign that?

Brandon [41:52] The first day they start working.

Andrew [41:55] So that's definitely a part of your onboarding process then, right?

Brandon [41:58] Yeah. Everybody has to, I have a signature from everybody on file.

Andrew [42:02] Nice. Now you talk about tools and all that...Is that all part of onboarding too? Like if you need this tool, we can get it for you...that kind of thing?

Brandon [42:09] Yea, we’ll find out if they have nothing. A lot of times, honestly, within the first 30 days, we won't do it. In the initial period where you're just testing them to see how they're going to do. After 30 days, if they still want them, we’ll offer them, “Hey, I'm not gonna let you get a thousand dollars of stuff, but hey, at least your basic hand tools and tool bag, we'll get that paid off. Usually by four or five months, alright you need some drills, we'll get that, and we'll pay it off a little at a time. You don't want to get in a big hole, but not for the first 30 days. We give them 30 days and we let them use the tools that we have and then when we know they’re going to stay, we’ll start offering them some of that.

Andrew [42:47] Well, that's great. So they get to keep those once they pay for them though. So it's an investment and..

Brandon [43:00] It’s theirs, theirs for good. And they really like that, because you know, stuff’s expensive, and they break and, and I don't want them to have to say, “man, I just got a new job and I have no money, but now I’ve got to buy about a thousand dollars worth the tools. We have a tool program, so I'll deduct it - $5, $10 a week. So they're still getting paid, without missing that money.

Lillie [43:19] It looks like Brandon Stowe in the group asked, “What about second chance programs? How do you feel about them?”

Brandon [43:23] Oh, I've never worked with any, I actually, I've never had anybody call about it. I would probably entertain it. I mean, I've always believed in second chances, so I would never steer a good worker away because of their past, like I said, people learn and people grow up and do better.

So they all deserve second chances. I've never really had anybody ask or call. So that'd be a new one, but, I definitely wouldn't just turn them away.

Andrew [43:51] Yeah. It might be something we'd have to talk about down the line. ‘Cause I know Brandon Metcalf, actually, he's one of our Pros and he deals with second chance programs and he actually came from one. Now he owns his own business and he's, he's like all around that.

Brandon [44:24] That’s awesome. I do know that places, like jails and stuff give these straight programs. You get a certificate when you're done. I have heard that. I've heard of people saying they're taking heating and air, that they give the classes in the jail so they get to leave with a certificate. So that's great. They've already invested their time to try to learn it. So definitely would be worth entertaining if it came about, came up.

Andrew [44:33] And if anybody is interested in that, I know it's a state-by-state thing and there's stipends, there's money that they'll pay you guys to pay your guys that are in the second chance programs too, so there's definitely some cool programs out there that I think is just state-by-state for sure.

Onboarding

Lillie [45:04] So let's say you've gotten them through the interviews. You've picked your person...now what?

Brandon [45:13] Like I said, the first day they come in, we put them with some lead guys. We might bounce them around between installs and sales... service, not sales, not for the first one, but, service and installs for a while, just so the lead guys, whoever needs the help can see, and feel them out for the 30 days. You can see how they do, and after 30 days, we kinda can. Within 30 days you can tell if they're going to fit. You can tell pretty quick, you're going to get, I'm going to get the feedback from the guys that have been with me the most. I'm gonna get the feedback.

If they're not going to be a good one, I'm gonna get the feedback by day three or four. They have the patience and their teaching them, but they've got the same gut instincts. They can tell, like, immediately if they're gonna make it or not, or, or stay on because it's hard work and it's not for everybody. We get a lot of people that come here and they don't find out that they're scared of heights until they're up on a ladder working in the attic or claustrophobic until we’re in the tight attic working with snakes and stuff or in the crawl and we’re in there working with snakes and can barely get out.

Then they’re like dude, this isn’t for me. You can find out pretty quick if they're gonna want to do this or something else.

Andrew [46:33] Now you say that that's just like the process. Like, you can tell that in three days. Do you have any kind of checklists where you're like, okay, he's going to go out with this guy to learn these kinds of things or see how he is with these kinds of things. Do you send them on certain jobs?

Brandon [46:50] 99% of the time, if you come into heating and air for me with no skills or no background, you're going to be an installer helper for awhile. You need to learn the basics of a system and how it's installed before you move up to service where you learn to repair it.

So my normal process, they're going to be installing for a while, whether it's on big projects where we need the help, or old jobs or new houses, they're going to learn and help install from start to finish. You're going to be in that for a couple of years is what I like, because then you're going to start learning the service and the troubleshooting side, as you learn how things are installed, because you can't just jump in and start troubleshooting something if you don't know how it goes together. So that's our normal steps anyway. So they'll help the installers and projects.

Andrew [47:46] So basically they're never alone. They're always going to have someone grouped up.

Brandon [47:51] Correct. Never alone.

Andrew [47:53] That's probably good. That's good peace of mind for them if they have the questions, they can ask them and not feel like they're going to mess something up.

Lillie [48:03] Totally, and then your employees can give you feedback. Do you kind of go to your employees for some feedback too? Like how was the job?

Brandon [48:10] Yeah. I like to do that. I like to do that normally once a week anyway. Different days, depending on the people coming in, and it’s like, “how's this job going? What do you need to make it better next time? or how're the people doing?

Who needs help with what? ‘Cause we try to train at least once a month. So we want to, you know, even the people that have been here awhile, what are they needing help in? Is it wiring? Is it duct work? Is it brazen? So we can come in here and kind of concentrate on that area when the time comes for training.

Lillie [48:45] It’s so important to keep tabs on what's going on with your people, especially once you hit the size you're at now.

Brandon [48:55] Yeah. Yeah, it gets hectic. That's why you need help from people in positions that can lead those jobs without you having to worry about all of them.

HVAC Hiring Interview with Ismael Valdez

Ismael Valdez is the owner of NexGen Air Conditioning, Heating, and Plumbing headquartered in Anaheim, California.

Roland [00:01] Tell us about NexGen, how long you’ve been in business, how you have grown, and what are your goals for 2021?

Ismael [00:10] Okay. So NexGen started four and a half years ago. We were still in a garage actually almost five years ago in California. We did three months, almost four months, in my garage before we got our first shop.

We did, I want to say we almost did almost a million, a million and a half, almost $2 million in our garage. And then, 2016 January, we got our first shop. First year in business, we did $9.8 million in revenue, second year we did 18.1, third year we did 23.4, fourth year we did 30. And then this year we're going to end with like 34 - right around there.

We were going to pace for 40 million, but we slowed down the growth on the top line revenue and we focused on other parts of the business, like our management team, our recruiting, and our revenue, and our net profit is what was probably the most impacted this year.

Roland [01:13] Yeah.

Ismael [01:14] Next year, 2021, our budget is already set for $52 million dollars.

Roland [01:16] It's going to be insane. Insane. Going from 34 to 52 is almost, you know, $20 million a jump. I've done a $10 million jump. It's pretty fun, but I've never done a 20 million. So I just want to try and see, see what it feels like.

Roland [01:29] Are you going to expand geographically to be able to hit that, or are you doing that and lifting your marketing budget?

Ismael [01:35] I haven't, no. I have enough clientele in Southern California. It's not like other parts of the region where they're limited to people. We have, I think like 19 million people in SoCal that we could cater to.

So no, all I did is expand the operation and we're going to expand our marketing to a different region. Just do more of what's working. That's all. That's all we're doing for 2021.

Roland [01:59] Yup. Yup. Are you more focused on the top line growth or are you trying to keep net profit, like stable?

Ismael [02:05] So our first four years, um, sorry, yeah, our first three years we were focused on the top line, just growing, growing, growing. And then this year is the first time we’ve focused on the net profit. We're going to end almost with 18% net profit this year. Which is, yeah, it's really good. And then next year we're probably going to hit the net profit.

We're not going to make as much, but then we're going to increase the top line. And then the following year, we're going to stabilize the company again. Focus on the bottom and then just keep growing, not growing the top line revenue.

Roland [02:38] Yeah. I feel like you kind of go back and forth, like grow, cleanup, grow clean up.

Ismael [02:45] Yeah, it’s like a game. And look, contractors their whole life, they've been taught to just grow steady, right? With net profits. So they're always trying to maintain the 18%, 20%, but grow at a five, 10% rate. Which is fine, there's nothing wrong with it. But like, if you want to make a ton of money quick, then you’ve got to grow the top line and then let your net profit catch up. Right?

Roland [03:08] Yup. Totally. It’s easier to clean up later than it is to, I don't know. I feel like it's easier to get the efficiencies once you've got that revenue, but without that revenue, it's harder.

Ismael [03:18] Nothing matters.

General Hiring Questions

Roland [03:18] Yeah, totally. So let's talk just like general hiring questions. Do you like the hiring process? Like, how did you build it? How do you think about it?

Ismael [03:30] Okay, so up until like the first four years of our business, I've been doing all the hiring, like, literally there's nobody in this company that hasn't met me or hasn't signed in front of me before they got in here. This year is the first time that we built a management team so they could take the onboarding process for me, because it was taking a lot of my time, and it wasn't letting me focus on the business. So this year we built a management team. Now the office manager hires the CSRs, the sales manager hires the salesmen, right? And the service managers hire the technicians, the production managers hire the installers.

And then I hire the managers, or sometimes I'll step in for the sales guys because, obviously it's a big deal if you're gonna pay somebody that much money, I’ve got to make sure that it's the right person for us. But mostly I focus on my managers now and I focus on making sure that we're hitting our goals, right? And they focus on driving all of the little KPIs and the revenue.

Roland [04:25] Yeah. So you talked about some of the titles, so you've got your operations managers, your service manager, your installer or your production manager, you've got your office manager. So those are kind of like the four, the four main branches, so to speak. Are there others? And if so, what are they?

Ismael [04:47] So I can actually send you a picture of our org chart. Our org chart is bada**. It's like a big 10 foot by 10 foot sheet metal thing. And then we have everybody laid out from top to bottom. So we have our COO, we have our operation manager, we have our production, our general manager, everything, and then it just trickles down.

Roland [05:06] Do you have that on the wall of your office so everybody can see?

Ismael [05:09] No, so it's in the cube. So, “the cube” I call it, is the dispatching center. It's right there on one of the walls. It's huge. So everybody knows what to do. So if they have any questions, they just go to the org chart and they say, “okay, cool. I'm supposed to call this manager for this.” Or, “Hey, if I have a question about financing, I call the accountant.” Right?

Roland [05:29] That's cool, that’s cool. And then there are just the phone numbers. They just dial them up. They go directly to the source. That's good. That's like full transparency. And then when you do promotions and stuff, you move people around on it and you probably celebrate it.

Ismael [05:41] Oh yea, that is probably one of the biggest things that we did live this year, because we were so focused on just hiring more people, hiring more people, hiring more people and putting them right at the top this year we changed it and it helped us tremendously.

This year, what we did instead of hiring technicians and putting them right to be a technician, then a sales guy, then a project manager or whatever, we started promoting the installers that were good communicators that knew the mechanicals behind the system.

We taught them technical skills. So we start them off as an installer. If they survive installers, then they go to the technicians. Then the technicians have three steps - level one, level two, level three. After the level three Technician, which is, a level three has to generate over a million dollars in revenue.

And then after that, then they go to a project manager. So they are basically retiring their tools and they're out there communicating with clients and the project managers are actual sales guys.

Roland [06:30] Cool, cool. So do you call them comfort advisors? Do you call them sales guys, like what do you call them?

Ismael [06:36] Project managers.

Roland [06:37] Cool. Yeah. I feel like there's a lot of different religions there. You know, when people are like, what do you call them? Some are like, no, no…

Ismael [06:43] They're trying to hide them. They’re sales guys, bro.

Roland [06:45] Yeah, exactly. And some people are like, oh no, they’re our selling technicians, but they're technicians. It's like, okay.

Ismael [06:52] That's good that we go into that, Roland. Talk about the different levels of technicians, and talk about when the installer gets promoted to be a technician. Because there are key points that you have to have. There are key ingredients that you have to have as an installer so you could promote them as a technician, right? You're not going to promote an installer that doesn't know how the system works. You're not going to promote an installer that doesn't know how to communicate with clients because when you're a technician, 80% of the tech is communication and 20% is an actual presentation of what they're going to do. Right? So it’s good that we talk about that.

Roland [07:31] Right. So what's something that you know now that you wish you would've known when you hired your first employee? What's it like for someone that's like, alright, I need, I need to hire my first mini me, you know, like I need to hire my first person.

Let's say you were going to do NexGen in Texas, like, you're going to hire your first person. What do you do? What would you do knowing what you know now?

Ismael [08:03] So knowing what I know now… it's kind of hard because we grew so out of control because I was able to hire so many people and put them in front of me. Now that I know that, I could replicate that, right? So, like if you're in a stage where you're trying to grow, the first thing you gotta do is, anything that diverts your attention, you’ve got to put somebody in front of you, right? So I'm not a sales guy. I'm not a technician. I'm not an installer.

I'm not a warranty guy. I'm not a CSR. Right? So anything, any position that you need, so you can accumulate growth, put that in front of you. So in the beginning, and I'll give you a perfect example. The beginning I was running warranties, I was delivering parts. I was pulling permits. I was doing sales calls.

I was doing everything. Slowly but surely I knew that I had to let those roles go. So I hired my first delivery driver so I could have more time to focus on whatever I needed to focus, right? If I needed more sales guys, if I needed more installers, if I needed a warranty tech. So anything that takes up your attention, you have to put somebody in front of you. So if you're out there delivering parts, get a driver, pay him 12 bucks an hour, let him do the deliveries so you can focus on the business. If you're out there doing warranties, get a warranty tech so you can focus on the business.

Anything that diverts your attention from focusing on growth and the business, you have to put somebody in front of you. So another thing, so that was when I started. I knew that I was doing deliveries, I was doing warranties, I was pulling permits, all of that.

So I knew I needed to get people in place so I can focus on the business. Once it got to that point, I had a warranty tech. I had a delivery driver. I had installers, I had all that. The costs started coming in. So the installers would call me for everything.

So I got a production manager to get in front of me. So now they're calling the production manager and then he filters everything that if it's a major problem, he calls me, if it's not, then he can handle himself. So time and energy and attention. Anything that takes your time, your energy or your attention, right?

When you're starting the business, you have to notice that. If you're out there selling right now and people are calling you and you're on a sales call, and it's an emergency, or they need your attention, they need your energy. They need your advice. You need to put somebody in front of you.

If you're out there selling and there's 20 missed calls, once you’re out of that sales call, you need to get a sales guy to handle that. If you're doing the installs still, and you have 20 missed calls cause you're in the attic crawling, guess what? You need to get an installer over there.

If you're out there doing permits or whatever, and people are calling for an estimate. Guess what? You need a CSR so she could book all the calls for you. So anything that diverts your attention, energy, or mind, put people in front of it.

Roland [10:46] I like it. Yeah. I think there's a lot of stuff out on the internet, which is like, look, put your time value at a thousand dollars an hour. Anything that's less than a thousand dollars an hour or 10 cents, whatever your number is, find someone else to do that for you. Because the work that you're doing is valued so much higher than the delivery driver or than the CSR.

It's not that they're not a big part of the team. Everyone's a big part of the team, but like, you've got to scale it your way. So. I think you're right. For a lot of Pros, you've got to see what's taking your time, what's taking your energy, or what’s taking your attention. I like those three.

Ismael [11:16] So what we should do is put this in car terms because I love cars and everybody loves cars and everybody, like most contractors, knows them.

Right. So you're the driver in this car. If something is wrong, you cannot change the tires, you can not do tune ups on the car, you can not change over the radio. You can not do anything but drive.

Right? So being an owner is being the driver of that car. That's what you got to tell the Pros. You need to get somebody to tune up the car. You need to get somebody to change the tires. You need to get somebody to tell you where to go. Your controller is your GPS on the car.

And these gauges right here are telling you exactly what's going on in the car. That's what the data cube or Housecall Pro or Service Titan or whatever CRM you're in. You need to know exactly what's going on inside that car. That's your gauges inside. That's your CRM, that's your, whatever.

Roland [12:14] That’s a great analogy ‘cause you're sitting in a race car seat and you’ve literally got the gauges behind you. It's like you're, you're living it. Plus also I think the other part of that analogy is good too, like, you could change your own tire. You could change your own oil.

Ismael [12:30] But guess what? You're going to have to slow down, pull over to the side, do it yourself, then get back on the road when you can be driving a hundred miles an hour. That's what growth is. If you're not focusing on driving and pressing that gas pedal, you're doing something else. Guess what? You're slowing down the growth.

Roland [12:42] Yup. Yup. I like that. That's a really good one. So let's talk about philosophy.

What's your philosophy? Do you hire people that are just good people? They have a good heart and you teach them the skill? or do you hire people that have skill and you try to teach them people skills? Do you value soft skills? Like what's our philosophy?

Ismael [13:05] That's an awesome question. Ready for this? It depends on the position. Like my general manager, my right-hand man, my dude Tony, he's been with me since the garage. I trust him with my life. So my general manager, I don't care if he knows anything about air conditioning, I'm going to teach him everything inside of the operation. But I gotta be able to trust that dude.

I got to be able to trust him. My accountant, same thing, right? She's going to be going through all our financials, all our bank accounts, all that I got to be able to trust her too. Who cares if she doesn't know anything about air conditioning? So those two positions, your controller, your accountant, or your general manager, your right-hand guy that’s going to eventually take the whole operation away from you so you can focus on more marketing, on more leads, on more conversion, more funding. Those two people gotta be trusted. Now, a technician, they gotta have people skills. Right? Who cares if they don't know air conditioning?

You cannot teach somebody to be charismatic. You cannot teach somebody to be a good communicator. You cannot teach somebody to have that, that impact on people. When they go to their house and the customers feel the energy from them. Can't teach it.

You know what I could teach? Heating and air conditioning. All day long. So depending on the position is the philosophy that I would tell them. If it's a technician, you've got to make sure that they're charismatic. You've got to make sure that they know how to communicate. You have to make sure that they know how to pay attention and listen.

Because 80% of their job is going to be that - listening, paying attention, being charismatic, earning people's trust, right? Same thing with the sales guy. For an installer, guess what? They better know how to install. You don't need communication skills. You need to know how to weld, how to purge.

Yeah, it depends on the position for the philosophy that I would tell people. For office personnel, for CSRs and dispatch and all that, they gotta be happy, joyful people on the phone. When they answer the call, you grab people's attention right away. You don't want somebody answering the phone, [in a drab voice] “hello, thank you for calling, this is Shannon.”

What do you need? Uh, I'll call you back later.” Because then that experience is going to start on the wrong foot. So it depends on the position on what you're going to look for, but we could go through every single position. I don't mind telling you guys, but what I look for in important positions is trust.

Technicals and all that you can always teach them.

Roland [15:30] Yeah, totally. I think that's a really good differentiation. Yeah. There's lots of different things you look for in the different positions, but in general, you're looking for the trust. Are they happy people? Are they good communicators? Are they someone that you want to be around? And then the technical side, you can always train them.

You know, if they're good on the phone, selling HVAC is no different than selling anything else really. You're just good on the phone.

Ismael [15:58] Do you know what helped me out a lot too, and I'll never forget what Gary V. said? Hiring is guessing. Firing is knowing.

I don't know if you've ever heard Gary V. say that. Hiring, you're guessing, you don't know if they're going to be good or bad. Firing, you know, that dude was bad. So hiring is guessing, firing is knowing.

Roland [16:19] So that's actually a good question. I hear people say hire fast, fire fast. I hear people say hire slow, fire fast. What's your combination?

Ismael [16:32] I hire people fast, right? Because of the growth I'm going at. If I would hire slowly, my growth would slow down. So I hire fast, but I fire faster. Why? Because of my goals. So if you are trying to get to $5 million, you're going to stay at $5 million.

You don't want growth. You just want to have a perfect $5 million contracting business with a perfect life to go home and enjoy your kids and all that. That's fine. There's nothing wrong with that. So when we're talking about these interviews and we're trying to give people advice, the number one thing that they got to know is what, where are they in life? Like me, I want to get to a hundred million dollars faster and healthier than anybody in this whole fucking industry. So I'm going to be hiring and firing fast, right? If you're a $5 million contractor, or a 4 million contractor and you're trying to get to $5 million and you just want to stay there, then hire slow, look for the right person, take your time, give them a chance, train them properly, go all the way through.

And then fire slowly, too. Because then you're going to stay around the same gross revenue. But if you're trying to grow fast, guess what? If you're hiring slowly, you're not going to grow. Bottom line.

Roland [17:38] I feel like that's great advice because a lot of people, they always say,no, it's always one or the other. But what you're saying is a little more clever, which is depending on what your goals are, they should match your goals.

Ismael [17:49] It's just like the philosophy thing. It all depends on the position. The same thing with the hiring process, all of that, it all depends on what you want to do.

If you’re trying to be the 800 pound gorilla, dude, go to Parker & Sons, go to Verizon, go to Service Champions. You don't think they hire a sh*t ton of people? Yeah, because they're trying to satisfy all those calls, right? You don't have calls. Why are you going to hire people?

Roland [18:12] That makes sense. So what do you believe in, is NexGen always hiring people or do you just wait until you need somebody? Like, are you always looking for good people?

Ismael [18:27] Always. Always hiring people. And it goes back to one of the videos that I made when I, I think it was the first video I've ever put on social media.

I think it was called ‘The founder video’. And my marketing company came up with a concept of just saying who we are, who I am, who the company is. We're always hiring good people. Good people, plus marketing gives you a good company. That's it. If you have really good technicians that care about their customers, that do the procedures, that give a five star experience, you're going to have a five-star company.

So we're always hiring. Nex Gen Air is a hundred percent always hiring. Now, we might slow down depending on positions. Like I'm not going to hire 10 controllers, we only need one. I'm not going to hire five general managers, we only need one right now. But like technicians, installers, sales, project managers or CSRs, were probably always hiring. Like right now, I need to satisfy 25 trucks that are getting delivered this week. 10 of them this week, 10 next week. We're getting 25 trucks, so I need to fill those trucks. I need technicians or I need project managers and installers. So we're always hiring yes sir.

Roland [19:31] Yup. Yeah. I feel like a lot of Pros fall in the trap of like, “Oh, I don't need a guy yet. I'm gonna wait. And then all of a sudden the calls start coming in and then it's like, how can I hire? And it's like, now I gotta pay them 25 bucks an hour and I can't find them, and then you have a problem.

Ismael [19:49] Roland, so that's a perfect example. I'm going to say something about that. So what happens is.

We are always hiring, so we are always pretty staffed up for the demand of calls that we have. If I tweak the marketing knob and I start putting more marketing money, it’s going to equal more marketing calls, right? So we're always hiring based on the demand of calls that we have.

If right now we have, you know, 46 or 47 technicians. We are keeping them busy. If I add more marketing money, I'm going to need more technicians. But if I wait until April, May, June, July, when it's a hundred degrees outside, everybody's got a job and now you're going to have to over pay for them.

Now you're going to have to tell them “here's a $5,000 sign-on bonus. Come and help me.” You know what I'm saying? But if you're always stacked up and you're just increasing the marketing spend, the marketing calls, and always satisfying the clients with technicians then you're good. You're always going to have growth.

Roland [20:39] Yeah. I think that the hand in hand that you're talking about is, like you have the ability and you know how to turn that marketing dial and you know what that's going to generate, so you know you need to get 20 trucks and, you know you need to fill those 20 trucks.

Ismael [20:49] So Roland, it goes back to your reporting, right?

It goes back to having good data. It goes back to making sure that your CRM is satisfying you on that. If you know that you spent $10,000 this month on marketing and you have three technicians. And the technicians are getting two, three calls a day. They're satisfied. We're making money on that.

What happens when you add $20,000 in budget? Well now you’re going to need six technicians. In this business, as unpredictable as it is, it's a formula. That’s all it is. If I spend a hundred thousand dollars in marketing a month and I have 40 technicians, guess what happens if I put $200,000 in marketing? I’m gonna need 80 technicians, right?

Roland [21:29] Well, I think that's what you were telling me earlier. The goal, like, look, if

you're going to grow the business by 20 million, you know what marketing spend you need to spend to get to 20 million. So if you add that on top of the funnel, then all of the rest falls into place. Which, you know how many technicians you need to produce 20 million more in revenue, especially on installs.

Ismael [21:47] And especially right now, like most Housecall Pros are doing, they don't have a general manager, right? They don't have the sales manager, all of that. So they have to do it themselves. It's okay. Dude, trust me, Nex Gen Air is an amazing company, but it's not like it was always this perfect, structured management team that I have now. Dude, I was doing the hiring.

I was interviewing CSRs, I was interviewing warranty techs, installers, technicians. There's nothing wrong with that. You know what I'm saying? It just gets to a point where I got overwhelmed. So I put people in front of me. And started doing the management team.

Roland [22:20] Yep. Yeah. I think people sometimes never get started. I mean, because they fall into that trap. And then it's really hard to get out of it, and then you're constantly behind and then everything piles up, and then you feel like you can't grow, that you can’t unlock yourself from that.

Ismael [22:35] Dude. Don't wait. Don’t wait because from day one, I always knew my goals. And like, it goes back to the question that you asked me. I always knew I wanted to grow.

I always knew that I wanted more and more and more. So even if you don't want the tremendous growth that we're having right now, dude, if you just want to grow, spend more marketing money, hire more people, then don't wait till it's a hundred degrees and then you're stuck with all these calls.

You always have to satisfy the demand and that's how you grow. If I waited, remember, I'm in California. I have nine months of shoulder season. Nine months. Nobody in the nation has that. Nine months of shoulder season, of perfect 74 degree weather and three months of demand. Now, if I base my company on those nine months, I would never grow.

I always base it on the three months of demand.

Roland [23:26] I think that's a really good point, that's like a mic drop. ‘Cause I don't think people think about that, you know, especially on the shorter season part. ‘Cause we are unique here in California. I'm in San Diego. I’m right by the beach, it’s always 69 degrees. It never gets hot, it never gets cold.

Job Posting / Application

Roland [23:57] So you're always hiring, where do you let people know you're hiring? Like, are you doing Indeed.com? Were you sharing this? Are you going to like Starbucks, you know, and handing out business cards? Like, what are you doing?

Ismael [24:08] So, when you're hiring, and this is kind of cool too...

We have ads on Facebook, we have ads on Indeed, we have ads on ZipRecruiter - and it's funny because we'll get installers from like, Craigslist, and we'll get technicians from ZipRecruiter, and we'll get CSRs from Indeed, and we'll get sales guys from Facebook and we always have all those avenues open. There are times that I know, like right now, I know that January I gotta hit a certain number.

So I'm going to need a certain amount of technicians and project managers on it. So like we put an ad on TV right now and all the regions across Southern California - hiring now. Always hiring. So. If I want to speed up the hiring process, it's TV/ radio, right? Because it just amplified through the masses.

But you always want to have a steady stream of hiring, which is like Indeed, ZipRecruiter, Craigslist, Facebook, all that - always have that open. ‘Cause you're always going to have, you know, like we have maybe five to 10 people coming in a week for different positions, but if we want to get like 20, 30 people in, then we just amplify it through a different marketing source.

Roland [25:18] Yeah. So it sounds like you've got a steady system for a steady flow and then you've got another system when you need like blasts, broadcasts for hyper-growth. I like it. So, what about, in terms of like job description, do you use the same job description... that template, like all the time across the board?

Like, have you found the one that's like your unicorn job description or are you always tweaking it and changing it?

Ismael [25:41] We're always tweaking it based on the position. The core is there, the core message is there. We want a good attitude. We want people that have good moral values. We want people that actually care about their jobs.

So the core message is there in the description, but we're always tweaking it. Like if I need somebody right now, I'll put, “$2,500 sign-on bonus” or “sign on bonus available,” or, you know, “401k,” all of that is in there. But if I need something now, then I just put an extra message in there and that's fine to do.

But our core is good people. If you're going to come in and apply here, if you're a good person, one of our managers is going to notice you and we're going to hire you right away. Oh, one more thing. Roland. Dude. This one is for the Pros. Okay. Cause this is a big nugget.

If you find somebody, do not let them go out the door without a contract... without, “Hey, when can you start?” Don't let them. Dude, this is the one thing I tell my manager. Ready? If it's a CSR, technician, an installer, a salesman, whatever it is. And they have an interview with them and they're a rockstar.

They are not leaving that door without a contract signed or without some kind of bonus or some kind of “when are you starting?” Because if you let them go and life happens to them - whether they’ve got soccer practice or they’ve got another interview - you cannot let good people go.

And this is why it's helped us a lot: If I see something that I like, done! Hire them on the spot. Don't give them the option, ask them what they want. Obviously it has to be reasonable, right? It’s gotta be within our boundaries. But like, if it's an amazing CSR, she's got an amazing attitude and energy, everything that we're looking for, like, “Hey, how much are you looking for?”

“Well, 15 bucks an hour.” “Cool. We'll give you 16. When can you start?” Don’t let people go out the door.

Roland [27:33] Yeah, we do something similar at Housecall Pro where we interview and then we throw a number. So one through five, you know, one is a waste of time. Five... if you throw a five on someone, that means don't let them leave the building without an offer.

And you can never vote three. You can't be like, “maybe yeah, maybe no,” it's either it's either a yes or no. If it ends up not working out, you're hiring fast, you're firing faster. So the risk is low.

Ismael [28:00] But to that point, Roland, at least you know. Right?

Like this is the one thing about marketing too, about people in general, people in marketing and all that. At least if I hired that person and they did amazing, good for us, we got a good team member, but if they did horrible, we let them go. You know, “you're not what we're looking for.

It didn't work out. I'm sorry.” And then they go and look for another job. Right? Same thing with marketing. Try the source, make sure that it works for you. Because everybody that contacts me on Avengers or asks me for advice, they’re always like, “hey Ismael, what's the best marketing source so where I can get leads?”

That's a dumb question. The things that happened to work for me, does not mean they’re gonna work for you - because of your region, because of your demand, because of your operation, because of your customer experience, because of your...everything. Right? So it's try it, track it and go.

Roland [28:54] Yeah, I think that's right. Because a lot of people are like, “Oh, Yelp is so shi**y, but it's like not, not in the West coast, you know? It's amazing.

Ismael [29:00] Bro, there are times where we're like getting 16 ROI on Yelp.

Roland [29:05] Yep. Totally. And so I feel like, maybe because you're unfortunately in the middle of the country and Yelp is not as big, it doesn't mean that you shouldn’t try it. So I think that's the message. Try it, measure it, and then choose if you want to keep doing more or less of it. What are you doing to differentiate yourself from all the other competitors? Because there are so many HVAC shops, especially in the SoCal area - they're everywhere.

What are you doing to set yourself apart from the rest? Like what's your advice there?

Ismael [29:35] Branding. The one thing I did from day one, we branded ourselves in the market where nobody else did. So why we grew so fast is because we branded the NexGen logo, and put the NexGen logo on billboards, on the Angel stadium, on TV - on everywhere.

We differentiated ourselves just by our logo. People saw that ‘X’ or saw that NexGen and they're like, “Oh yeah, that’s heating and air, let me call them.” And that's what I saw in Southern California, there wasn't that one company or couple of companies that people actually knew, like everybody had to look for the company that they wanted.

Like if they needed an air conditioner, they would go on Google, Yelp, or whatever they did to look for a company. But nobody really knew the companies like Nike or Target. Everybody goes to Target for certain things. Everybody buys Nike shoes. That's what I have done since day one. I branded my name everywhere.

So people actually know our brand. Like, “Oh yeah, I’ve seen that company, I've seen them here. I know them. They're a good company. I've looked them up on Yelp.” So we branded ourselves super, super well since day one. So that was one of the things.

Roland [30:40] Yeah, you've got a cool logo too. It's all the right colors. It's super recognizable. Even from a distance. I feel like sometimes people try to put too many words in a small box and you're like, what is that? It’s like just try using ‘PRO.’

Ismael [30:57] And then also, the name doesn't mean anything, but if you Google it, we pop up right away.

Like I'm not, you know, Hernandez Heating & Air, or Perfect Heating & Air. There's like a hundred different things. Google is going to identify ‘Perfect’ and ‘Climate’ and NexGen is like perfect for Google - we're going to pop up first. Right? So that's the one thing that I knew from day one is I wanted to differentiate myself from my competitors, making it easy for customers to Google us to get in contact with us fast by them knowing who we are. We started on our logo.

And then the last thing is our customer experience. We perfected the customer experience, like if you go on Google, if you go on Yelp, we ride on 4.9 stars on Google, and we ride on like four and a half, five stars on Yelp. And for a company our size that touches 200 to 250 customers a day. A day? To maintain that good reputation, it all starts with the customer experience process. So we worked on that, we worked on our branding, and we worked on our logo.

Roland [32:00] Yeah, that's good advice. I think that what a customer, like a homeowner, may see when they Google you is the same as someone looking for a job.

They're like, “Oh, this is a cool company.” No one wants to work for a company that's got bad reviews. So customer reviews are important, not just to get more customers, but to also get new employees that are looking at you because they're going to decide whether they want to work for a company or not based on that.

Ismael [32:16] Review based customers is the future, Roland. And I've said it a million times. Review based customers is one hundred percent the future. Sorry, review based contractors. Everything's reviews. I guarantee you, you put NexGen with three stars and NexGen with five stars next to each other, everybody's going to go to the five stars, right?

Well guess who's going to spend less marketing? Guess who's going to make more money? Guess who's going to have longevity? Not the three stars, the five stars.

Roland [32:45] Yea, and you can charge more. So it's like sure, you can find cheaper than us. Sure. You can go look, but you're not going to get that five star experience. You're not going to get the NexGen experience.

Roland [33:04] How do you feel about, in terms of salary, are you doing hourly? Are you doing commission? Does everybody know what everybody's making at NexGen? Are you really transparent or is it different? Like, what do you think about that?

Ismael [33:17] So when we hire somebody as part of our onboarding process, depending on what position they're getting on board for, everybody has a contractor. So it's never, “well, he promised me this, he promised me that, he told me this, he told me that” - everybody knows that this is your contract, this is how you're going to get paid. Is there anything wrong with it? Nope? Sign off on it, I'll sign off on it. It goes to payroll. And then if there's any discrepancies, we always go back to that contract. So that's probably a huge nugget that you guys want to jot down for companies who are growing.

That's one of the things that I could improve, Roland, from day one to now, I wish I would have put everything in contract from day one. Because at the beginning, I didn't know how huge it was going to be and how bada** of a company we're going to have.

But I was like, “yeah, I'm going to pay you 15 bucks an hour to come over.” And then it's like, “well, you told me you I was going to be making $20 an hour.” And it's like, at the beginning, I wasn't doing that. I wish, from day one, I would have started what we have now, which is a whole onboarding process. Day one is this, this is how it's going to go on day two, day three, day four, day 30, day 40, right?

This is exactly what's going to happen. And this is exactly how you're going to get paid. And then there's no problems because there's a ton of contractors that have gotten in huge problems. Let's knock on wood. NexGen hasn't done that. But they got into trouble because they promised this, they promised that, and they never delivered them.

So put everything on paper. And get it signed, get it signed.

Roland [34:43] Yeah. That's good. And then on your job postings, are you posting like, “Hey, 75k installer?” Like, are you posting the dollar ranges on the job descriptions? How do you think about that?

Ismael [34:53] Yes, sir. So we’ll put, depending on which source we're using, but like if it's a project manager, you know, we'll put “up to a hundred thousand dollars,” or “making over a hundred thousand dollars” because we know, based on the position, how much the lowest project manager or the highest project manager or the lowest installer and the highest installer gets paid.

So we always start them off at the base. And then obviously they always have time for growth here. So yes, it's important. Yes. It's important to communicate that because you don't want somebody that's expecting $150,000 to show up to your interview and you can't afford them. Because then it's just a waste of time for you and them.

So make sure you're transparent with them.

Interview Process

Roland [35:31] Are there any other things that you ask in the application process that you think is like unique, before they even get to the door? Like as a way to screen all the resumes? ‘Cause I bet you a lot of people want to work for NexGen, so you're probably getting a lot of inbound?

Ismael [35:50] Okay. So what we do now is management does the first interview, right?

Depending on which position, if it's a CSR, technician, whatever, management does the first interview. And then if it's a really good person, they'll text me and they'll be like, “Hey, when could you meet with them?”

Most of the time I'm here in Orange County, or in my Inland Empire branch. So if it's a really, really good person, I'll make it happen the same day or the next day. So they get filtered through our management, after management approves them, then I onboard them. If it's an important position, if it's a CSR, and not saying the CSRs aren't important, but if it's like a high caliber position in the company, then it's probably going to go through me.

But if we're just hiring a technician, installer, another CSR to the team, they get onboarded and then I make sure that I train my managers on what I look for. The main, main thing I look for when I'm talking to people is I literally have a 10, 15 minute conversation about them. Like, I just want to know who they are before they come into my house.

Right? Like obviously NexGen is our house. Right? And we got to protect it by all means. So, if you're going to let somebody in there, you kind of want to know who they are like morally, do they have family? What are their goals in life? I always ask them like, “Hey, you know, how long have you lived in California?

You know, how do you like it here? Did you go to high school here? Are you married? Do you have kids?” Like it's more of a friendship, little conversation, instead of interrogating them like, “what do you know how to do? And how long have you been doing this?”

We’re like, dude, we know you know how to do that. Like, who are you as a person before you come in here? Because we make it super clear, Roland. And this is another nugget I'm going to tell you guys. We make it super clear here at NexGen, that if you get one, one star review, right? You get suspended right away.

If you get two, one star reviews, you get suspended for the first one for one week, the second one for two weeks, and if you get a third one star review, you're gone. You're out.

Roland [37:40] I mean, that's really, that's a harsh golden nugget, but I think it helps you retain the right people. I think a lot of people are just scared to fire people. And so they're like all, “but they're really good..” Nope.

Ismael [38:01] Guess what Roland? If they were really good, they wouldn't be in the position to get fired. So we give him the benefit of the doubt.

It's not like their first bad review we fire them, obviously, if it's something major, then obviously yeah. But if it's a, look, first bad review, I make it really clear to my management. And then management makes it really clear to staff. Like dude, one bad Yelp review, it's a slap on the hand, you're going to get suspended.

Two bad Yelp reviews. You're going to get suspended for two weeks. And the third one you get fired. Why? Because it sets the standards high for all the technicians, all the project managers, all the installers - that we don't tolerate bullsh*t here. Our customers mean everything to us and our customer experience has to be perfect.

Yeah, are we going to have bad days? Yes. Is the technician going to do something they're not supposed to do? A hundred percent. It's what we do with it, that differentiates us from the rest of the people. The rest of the contractors.

Roland [38:50] Yeah. Yeah. ‘Cause you can see, even on some of the reviews, you know, if it's one star, you'll see, ”Oh, they tried to make it right.”

And then it's like a three star or four star, you can always see what happened in your reviews where it's like, oh, but then they comp the system for something free? It's like, Whoa.

Ismael [39:05] That is the key right there. What you just said is the key to review is a review based contracting is making sure you communicate with those clients and get that updated.

Don't get it deleted. It's going to hurt every rating score. Get it updated because another customer's going to see that. And it's going to have one star there. Either, “they overcharged me there” but, hey, “managers call me. They made it right. They're an amazing company.” You know how many customers have called us and said, “I looked at your reviews.

They're amazing. And I saw a couple of bad ones, but you made them right. And that's why I went with you.”

Roland [39:35] Right. Yeah. I feel like that's a real good golden nugget.

Roland [39:48] Are there any big red flags, that in the interview process that you hear somebody say where they answer your question somehow? Are there any like big things where you’re like, “ooh, they said that and that's my trigger. And you're like they’re out like, Nope.”

Ismael [40:05] If I interview somebody and they're too focused on the money - If all they're caring about is money. “How am I going to get paid? When am I going to get paid? How do I get paid? Am I getting paid to this? Am I getting paid to do that? Am I getting paid?”

Paid, paid, paid, paid, paid, paid. So if that's all I'm hearing. They're here just for money, I don't want them in the team. So, if they're asking the right questions, say, how long has your company been around and what do you guys do? What's your star rating on Yelp? And if a customer's pissed off, what do you guys do?

If they care exactly about what's going on inside the company, that's a perfect star for us, right? If all they care about is pay, we're not the company for you because we pay well, but we pay well based on performance and based on customer satisfaction. Right? And if you're too worried, too distracted by your pay, you're never going to worry about my customers and their experience.

Because all you're worried about is your pay. Because 90% of our conversation was pay.

Roland [40:57] I'm thinking, from like an interview question perspective, do you have a favorite question that you like to ask or that you ask in each one, besides the, “Hey, tell me about your story..or life story,” like Google, in the tech world, interview questions are shared all across the internet and, you know, “how many marbles blah blah blah,” or, “you’re sitting in a car and then blah blah blah,” they have all kinds of funny things. Do you have any favorite interview questions that you really want your people to ask? What are the ones that you ask?

Ismael [41:32] I always ask them, like, what are you doing in your spare time?

Is there something that interests you a lot? If people have hobbies, goals, like we have technicians that are here in the daytime, and then at nighttime, they go to school because they’re trying to become an engineer.

I love those kinds of people, because then you know that they're obsessed with growth. Then you know that they want to become better. But if you ask somebody, “what are you doing in your spare time?” Or like, “whenever you're not working, what is it that you like to do?”

“Oh, you know, I like to hang out at the bars and pick up girls” or, you know, “I like to drink with my friends and get drunk.” Those are the kinds of things that I want to know outside of work, that you're a good person, because if you're a good person outside of work, you're going to bring that good person into your work environment.

And it's always going to make our company better. Right? If you're just worried about going to the bar and getting drunk and all that, it's probably not going to work out. I always like to know what they do with their spare time.

Roland [42:40] Yeah. And so are they passionate about something? I've seen some of your guys, they do like, custom tricked out lowriders and they’re mechanics on the side and they’re involved in really cool stuff. And they show that off, you know, that's their hobby and that's cool. Yeah. And you embrace it, you embrace it.

Ismael [42:50] That's what makes them special. That's what makes them, them, right? Like, I love old cars. I have a technician that's really, really good...actually, he's a project manager... and he plays in a band on the weekends and he gets paid for that.

He loves that shit. And why does he do it? He's like, “Hey, it's extra money for me and my family to enjoy,” you know what I'm saying? That tells me, he cares about his family. He's got passions about something. He loves what he does. Right? So he's only going to bring that into our NexGen environment.

It's only going to make our company better.

Onboarding

Roland [43:20] Yeah, no, that's great. I think company culture and just like that openness and sharing, that's huge for sure. In terms of like onboarding, so you've picked your person, you gave them an offer. Are you negotiating with them? Or you say, “Hey, uh, what's your number?”

And then you give them a counter number or did they negotiate? Or it's just like, no, here's what we pay. Here's how you can get from here to here. Here's how the commission works. So if you want to make this, all you gotta do is sell X. Like how do you do that?

Ismael [43:48] So when we do the onboarding process, number one, we make sure that their pay is super clear. If they impressed us, like if it's a five and they're asking for a couple of dollars more, a hundred percent, we're always going to hire.

But if they’re like two, and they're asking for more, then we just say, “Hey, maybe we're not the right company for you.” Fours and fives, we're always leaning towards. If they're an amazing person, you can tell by the way they're speaking to you, their energy, you know what I'm saying?

We never let them go outside of the door. And as long as it's a reasonable thing, right? If we're offering 20 bucks and they want 25 bucks, and they're a five, we're probably going to make the deal. But if it's somebody that we don't know if they’re going to fit in and they're asking for their extra five bucks, we're probably going to say no.

But we always tell them, “look, this is where you're starting. There's some CSRs that make this, there's some technicians that make this, you can always grow your way into it.” So come in here and show what you can do. And then your performance is gonna dictate how much you're gonna make.

Roland [44:45] Yeah. And so how do you do the performance reviews? Is it annual? If someone's a rockstar, like if I hired Lillie and I was like, “Oh crap, I didn't pay her enough,” like one month in I'm like, no, you're going to get a raise right away. How do you structure those cycles?

Ismael [45:00] So they do a six month evaluation on everybody.

Like after they get hired and then they get their first raise. And then after that, everybody has monthly bonus plans. So if they all want to make more money, there's no cap to their bonus plan. Like if they want it, if it's a project manager and they're having a kick a** month, it's unlimited to the amount of bonuses they can make based on their performance. If it's a CSR that's starting, they're getting their hourly wage, but they want to make more, well, guess what? Answer more phones, book, more calls. Right? Get your KPIs up. And then you get paid more and there's no limit on that because why would you want to limit good performance?

Roland [45:33] Yep. I like that mentality a lot because ultimately the more they sell, who cares? Pay them unlimited anyways, because it doesn't matter.

Ismael [45:45] As long as it makes sense for everybody, then everybody should be happy.

Roland [45:46] Yeah, that makes sense. And then do you have GM's that you're evaluating on like a net profit basis? Not just top line, but you're like, you have to hit this number at this net profit number, or are they untied? How do you do that?

Ismael [45:58] So my management team gets paid on goals, on revenue. Right? And, and like my general manager he's on a Saturday and then he gets paid on bonuses if we hit our goals.

So everybody is driving the same way. So my sales manager, my general manager, my service managers, my operation manager, all the top management, what we call upper management - there's about 10 of us. We have two meetings a week, and it's the most important meetings there are.

They get paid on performance and goals, right? So if we hit the $34 million with this on the bottom, then everybody gets paid an extra bonus. But everybody gets paid their hourly rate to be compliant by California because everything has to be hourly here. You can not pay a hundred percent performance and then everybody gets paid bonuses on, on performance.

Roland [46:50] That's cool. Yeah. So everyone's sharing the same goal and if everyone does well, everyone gets a bonus. So that drives it.

Ismael [46:55] This is what I tell everybody, if the company does well, everybody does well, if the company doesn't do good, nobody does good, right?

Roland [47:02] Yup. Yup. Yeah. I think too often I see Pros, they have like, custom compensation structures by individuals. And it's like, it's not just individual goals. It's a team goal. From the booking of a call, setting the expectations on the phone call to the sales tech, to the installer, to the QA crew, you need to have that whole thing lined up.

Ismael [47:27] Everybody has their individual goals, but upper management all are driving towards the same because they're number one. They're the ones managing everybody, right? Yeah, so everybody has their individual goals. And then they get meshed into management and then management drives forward.

Everybody is a team, if we all do good then everybody in the management team gets a bonus.

Roland [47:41] I like it. So how many people started at the bottom of NexGen and then worked their way up to that, like GMO spot. Like, what are the levels, you know, you start them off as helpers or do you not do helpers?

And then you go from installers to sales, like how does that work?

Ismael [48:05] So on the installer side, they start off as a helper. I mean, sorry, an apprentice, then a helper, then a lead installer, then a level one technician, level two, level three, and then a project manager. If they want to go there. I'll give you a perfect example. My general manager, Tony, he’s my right hand. And I talk to him. He knows everything about the company inside and out. He started as a parts delivery driver and now he's been here five years with me. He's proven his loyalty. We've done, you know, everything. He knows everybody in the company. So he started as a parts runner. Now he's my general manager.

Oh, yeah, five years. He works just as hard as me. He works just the same amount of hours as me. So he gets compensated for that. What else? The CSRs too. They get their booking numbers to enough, right? They get their outbound calling first and then they get inbound and then they could go up to a management position and then they go from there.

Roland [48:58] Yup. What about equity? So in the startup world, you know, everyone wants that IPO, you know, to cash out cash on equity. So how do you think about equity in the company? Do you have people on profit shares or equity, or do you think you're just compensating them really well with the bonuses and those things and you don't do that?

How do you think about that?

Ismael [49:18] Not yet. So I am a hundred percent pro equity. Like I want everybody to have a piece if possible. And that's what we're going for in 2021. In the next couple of months, everybody's going to have a little equity share on the upper management team. They have to have been here for a long time, number one. And number two, they have to have been with us through the good and the bad, right? Not just, anybody's gonna walk in and be like, Oh yeah, I own two shares of NexGen a hundred shares of NexGen. Right? Like all the upper management team is probably going to have a share because if they're pouring their heart into it, Roland, like it's only right for them to own a piece of it.

It's not like I knew when I started NexGen if I was going to do good, I was going to bless everybody with it. Like I never intended for NexGen to be all about me, me, me, me, me. It was always about my team and my family. So a hundred percent by 2021, there's going to be a lot of shares getting spread out to NexGen and who knows, maybe a year from now, two years, five years from now, if we ever do a franchise or if we ever sell to private equity.

If we team up with a private equity firm, they could get their fair share of, of money too.

Roland [50:29] Yeah, totally. And I think that's the real way to wealth. You know is company creation and equity - it's not just trading your time for hours, but obviously when you need to work your way there to get it and to earn it.

So yeah, in the startup world, you know you have a one-year cliff and four-year vest you don't just get it all at once. You have to earn it, you have to really get it. And it's a great retention tool too, because from the perspective, people know, Hey, if I leave, I'm going to lose out on this much equity and how do you keep them engaged with the company?

So I think not a lot of Pros are thinking about it in the way that you are. And they should

Ismael [51:06] If people like my management team, once they get their shares, right?

Not only like obviously their hourly and their bonuses, their hourly, they're going to come to work, their bonuses, they're going to try at work, their shares in the company? They're going to protect the house. They're going to make sure that nobody is doing something wrong. They're going to make sure that every customer gets taken care of. There's a difference. You're going to pay them their hourly wage so they come to work, you're going to pay them their bonus so that they can try at work and they perform at work. And then you're going to give them some shares. Now they're going to love working here. Now they're going to stay in, now they're going to have a passion. Now they're going to, if they see something wrong, they're going to fix it right away instead of letting other people do it. That's the different stages of what's about to happen here.

Roland [51:39] I like it. Let's talk about something, a little taboo. I think what's important to know - when it comes to company culture, how do you think about religion? Do you build that into your house? Do you not build your house? Do you accept all, like, how do you think about that in differences in cultures? SoCal is a mixing pot and between LA and San Diego, I mean, there's a lot of diversity. So how do you think about that from a company perspective? How do you deal with that internally?

Ismael [52:01] We don’t hammer people on religion here. Everybody knows that I'm a believer. Everybody knows that I have God in my office. I have him everywhere. I have him on my body. I have tattoos of him everywhere. So everybody knows that I'm a believer. You know, if you a hundred percent, you're in a different religion. To me, it doesn't matter. To NexGen, the main thing that we all care about here is making sure you're a good person.

If you have a different religion, belief, if you’re totally different from anybody, we don't care about that. As long as you're a good person, you're going to have a position here. You know what I'm saying? As long as you care, you're trying, you're a good person.

We care about people's values/ cores. If they happen to be whatever other religion, as long as they're a good person, they're always going to have a home here.

Roland [53:13] Yeah. I feel like there are some Pro companies out there that are very outward facing and very Christian and only hire Christian or like, you know, in Salt Lake City, or Mormon or that.

But then there also in California, definitely boastful, you've got such a wide variety and diversity. So that's definitely something that people shouldn't shy away from. They should embrace it. And I think you guys are embracing it.

Ismael [53:33] You never, you never want to lose a good employee or a good performer or a good person because of whatever they believe or because they're a certain way or they like a certain thing or whatever it is. My job as an operator owner, I'm going to hire good people. So my company can be a good company. Whatever they, whatever they believe in to me, it doesn't phase me.

Roland [53:56] I like it. We’re way over time. So I appreciate you spending extra time. I know your phone's buzzing off and all that kind of stuff. Do you have any other words of wisdom for Pros out there that are looking to get to where your, your status is at? You know, sometimes it's hard.

You look at someone you're like, how the hell did they get all the way up there? You know? What types of tips do you maybe have for them specifically in regards to hiring and onboarding or culture or people or things that you just believe to your core?

Ismael [54:27] The one word of advice that I could give everybody, like it goes back to, to find out what you want.

If you're trying to be a hundred million dollar monster, if you're just trying to, and, and it's all going to depend on the point that you are in life like me, I'm young, right? I'm 33 years old. I have a beautiful wife that supports me and my growth. But if I'm older and I'm just trying to make a living and I'm going to try to enjoy my family, I'm trying to do retirement and all that.

Like, obviously you gotta find out where you're at in life, what goals you want and then start striving for that. And the number one thing that people don't do, Roland, that I've noticed in this industry. And I talked to hundreds, probably thousands of people, contractors about this - Execute, man.

Execute. Don't just take what I'm telling you and be like, Oh yeah, I heard the podcast or I heard he's doing this. Like one thing why I grew so fast, why we've been successful? Number one was God. Number two was everything that I knew from other companies. I tried it myself.

And I measured it and I made sure if it worked for us, boom, we kept doing it. And if it didn't work for us, we let it go. But at least I knew inside me, the marketing source didn't work or that one employee wasn't part of what wasn't going to click with us.

My hundred million dollar process is I don't want to not know and always doubt myself, like what would happen if I would've tried that one thing? Or what would have happened if I would have hired that one employee, right? That really, that I should have hired or, or maybe I didn't, because whatever reason, right?

I don't want to not know. I want to know, so I could keep going. Yeah. I like it goes back to that Gary V. quote as well, you know, which is like, you want to know, but also more than that.”

Roland [56:26] I feel like a lot of people, they hear things, they see things, it's even laid out. Like you laid out to a T like you just, you just gave the playbook, you gave away the NexGen playbook. You just gave it away. And now it's on the Pros that go do it.

Ismael [56:36] So it's like, you know, a lot of people are like, well, what's the secret? It's like, there's no secrets. There's execution. Execution. That's the secret. Marketing people. That's how you get people. You get marketing and you put a process together.

Guess what you start growing. The secret is the people. And if you want to grow up and put fuel in that car, the fuel is the marketing, right? You want to grow more, put more for you in there. You want to grow faster, put more fuel, step on the pedal. But there's no secret to it man, just execute, execute.

And when you hear something or when you want to try something, if we want to grow, go ahead and do it. Stop double thinking. Should I hire, what about if I don't give them, what about if we don't have enough calls for him? What about this? What about that? What about. What about you winning the lottery tomorrow and you get to retire, right? You never know.