Welcome to Close it now, the podcast that's revolutionizing the H Vac and home improvement trades industries.

Get ready to dive deep into the world of heating, ventilation and air conditioning.

We're turning up the heat on industry standards and cooling down misconceptions.

And we're not just talking about fixing vents and adjusting thermostats.

It's about the transformative movement that's reshaping the very foundation of H Vac and home improvement.

We're the driving force, inspiring top performers who crave excellence not only in their professional endeavors, but also in fitness, nutrition, relationships, and personal growth, proving that we can indeed have it all.

This is Close it now, where excellence meets excitement.

Let's get to work now.

Your host, Sam Wakefield.

Well, hey, everybody.

Welcome back to Close It Now.

Sam Wakefield here.

I am stoked to have this guest on today.

This gentleman and I have known each other.

We connected a couple years ago, actually through some.

Through the podcast and through social media.

And it's been a really, really cool staying connected with this gentleman, watching him get his company started, looking into his history.

We're going to talk about all of that today and we're just excited to introduce my guest today.

His name is Damon Lilly.

He is the founder of Quality NC Quality Air in Wilmington, North Carolina.

And excited to have you on today, man.

We're going to chop it up, cover some really exciting stuff.

Yeah, thanks for having me, Sam.

I'm excited.

It's been cool to connect with you over the year.

And then I just found you kind of off of an Instagram thing and then saw your podcast, listen to a few episodes and at the end you gave your email at one of them, I think, and I messaged you and I was like, hey, let's, let's jump on a call.

I think it'd be cool.

But yeah, myself and my two neighbors, we founded NC Quality Air and just three really close friends that started a business together.

It's been really cool.

Nice, nice.

I love it, man.

So many interview podcasts start with like, hey, give us your history.

And I did that for a long time, but I realized that's kind of boring.

So let's start with something else.

Let's talk about what is.

So I'm going to hit you with a rando question.

I like unexpected questions.

Questions.

What is the number one thing that you're most excited about in life right now?

Well, we're having a baby in January, so I said that's probably number one.

Wow.

Congratulations, man.

Yeah, thank you.

First one.

So that's Boy girl.

Do you know the girl doing a reveal or.

Yeah, little girl.

So we're excited for that.

My wife and I are.

Are thrilled.

And then outside of that, I would say that the H Vac journey is probably the thing I spend the most time on, most energy thinking about.

And I think this is probably the most exciting between NC Quality Air and Quality Pro Services.

I think that the combination of those two are definitely what I'm spending my most energy on.

Nice.

Nice.

I dig it, man.

That's cool.

We're definitely going to dive into the NC Quality Air and Pro Services.

We'll touch on both today.

So give us a little bit of a rundown on.

You don't come from the H Vac space.

No.

You're pretty new to this world, so you don't have the classic story of.

So like my story is like I was an attic rat 20 years ago pulling ductwork, right?

Yeah.

And I was a helper and then a service and then I got into sales and I've owned and been all these different things.

Yeah, but your history is different.

One of your so from our conversations and one of the things we're going to cover today, everybody is I'm really excited to have Damon on because what of your zone of genius, your strong suits is recruiting and training people.

So that of course, that's a little bit of bit of your background there.

But how in the world did you find H Vac and why H Vac?

Why did you even choose?

It's way different and much more complex than a lot of other industries.

Why in the world would you try to tackle this beast?

Yeah, I guess kind of that's part of the reason why you and I connected is my experience over the last 10 years is really in door to door sales.

I kind of came up from doing pest control sales door to door for one of the largest pest control groups out there called Aptiv.

And I started there right out of college, kind of to pay for myself to go to school.

And then I grew it to where I was managing about 700 salespeople.

We did about $150 million in my organization over the nine years that I worked there.

We were doing about $35 million a year in top line revenue between my sales organization and the service pros and people that I was managing whenever I left there last year.

And I guess that's kind of how I came about your podcast is I was looking for a way to tie in H Vac and door to door and that's kind of how I came across you.

How I got into the H Vac stuff is kind of really by chance.

I. I moved to Wilmington or Wrightsville Beach a couple years back.

One of the first people that I met a couple houses down for me is this guy named Paul Mills.

And Paul is like one of the goats of H Vac.

He started off on a truck, built his own business, sold the truck, sold the business, and then, you know, worked with the private equity group and did the whole helping them acquire other businesses and rolling them up, and was involved in just like, kind of all aspects of a really successful H Vac career.

And he was my neighbor.

We'd always go boating together, go to dinners, go on vacations.

Paul and I became really close friends.

His next door neighbor is one of my other best friends.

And we were always in Paul's ear, like, Paul, let's start another H Vac company.

Like, you've been ultra successful, lol.

And I really want to do one.

Like, let's do it together.

Paul was like, man, I love you guys, but I love being retired, you know, he's like, I don't want to do anything else.

You don't understand the workload yet.

Yeah, Paul was telling us that he had, like, you know, one phone call a month with the private equity group.

And he's like, that was even like, more than he wanted to do, you know, like, he was tired of doing anything, just wanted to enjoy life.

And he deserved that, obviously.

So after enough time of Lowell and I bugging him, eventually he was like, all right, fine, let's do something.

He kind of, you know, gave us all the tools and the framework, and we've been running with it, three of us now, for just over a year, and it's been pretty successful.

And that's kind of how I got into the.

The H Vac world.

Despite boating with somebody.

Boating with association.

Yeah, pretty much.

Just kind of becoming really close friends with somebody that had been ultra successful in it.

And part of the other reason I wanted to go and do pest control after I left Aptiv, I was planning to start my own pest control company.

You know, sell locations to friends and family members and people that would, you know, want to own their own pest control group and kind of, you know, manage it that way.

But because of my non compete, non solicitation agreement, it, you know, would push out a couple years before I could do that.

And so in the meantime, I was like, well, what could I do?

And I love the service industries, and I think H Vac is even better than Pest control, really from a, you know, a growth standpoint, a ticket, you know, the average ticket size is way bigger in H Vac and then the multiples are obviously much better versus pest control as well.

Sure, sure.

Oh, I dig it.

So this is actually a really cool episode because there's so many people that listen to this show that are actually.

Before I intro this part, give us a quick snapshot of how long the company has been in business and what your revenue was.

What we were just going over with me before the show because I want to use that as the frame and context for this next few questions that I want to ask you here.

Perfect.

Yeah.

So we went from $0 in revenue last year in October when we opened, we just finished up our first 12 months and we did just over 2.2 million in top line revenue this year.

Nice, nice.

And congrats.

That's definitely.

No, no small feat for sure.

So we've got a lot of things moving, obviously.

So there's so many people that listen to this show that are real close to that revenue mark.

Some of them have been in business for a lot of years, some of them been in business for a little years.

And there's of course also plenty of people who are considering starting their own businesses.

So I'd love to give a.

Now that you just finished up year one, we're 13 months in, like you said.

What are maybe your top two, three, four, five things that you wish you would have known before you got into the business?

Things that would have made your first year go a lot smoother?

Yeah, I guess for me, coming from outside of the H VAC industry, my things that I didn't know, I didn't understand how technical the business is.

Like how much you actually really need the training and to have the technical expertise to be able to run a successful H Vac business.

But then on the other side of that, I think the other part of is you want to.

You won't want to be too technical focused.

If you're not focusing on sales and how you're going to generate revenue, then the tech side doesn't matter because you're not getting the calls anyways.

And so I think that one thing I was kind of surprised on is like Paul really has focused on teaching us to run a sales driven business where you're selling iaq, you're selling change outs, you're doing really good repair versus replacement analysis with customers in the home.

Like not selling somebody something they don't need, but making sure that they understand that they do need a lot of the things that they didn't know about and showing them why it makes sense financially.

And then also just having really good financing and different things that allows customers to do, you know, those bigger purchases easier.

And so I think those are all things that I didn't really grasp coming into it upfront, but definitely been instrumental in our success so far.

Nice.

I like that.

Yeah, that's, that's one thing I talk about so often is, you know, we, any trade, any home service is a sales organization.

But everyone builds their company upside down because we're so good.

You know, we're all.

Most people start from the technician perspective.

I think that's why you're seeing such success, because you weren't a technician, you're just like, hey, we know how to sell stuff.

When you come at it from that angle, of course we get the things in order.

You have to think about your business in the order of the flow of what's the customer journey like?

Well, they're not starting with getting their thing fixed.

They're starting with or repaired or replaced or whatever.

They're starting by having a conversation with somebody that says, hey, maybe this is the right company.

And then the next conversation is, hey, tell me more about the company and more about what you do.

Can you solve my problem?

Which is the sales piece?

Right.

So we've got to take the flow in the right order.

So I love it.

So I know there's going to be a lot of questions from people you know, all over.

Of course you're in actually a really pretty cluttered market of heating and air companies in your area.

You know, I've trained, personally trained several companies and several people over, you know, scattered around your whole area.

And so I have a good feel for it.

But what have you know, to go from zero to, I guess two part question.

What are the things when you say treat your company like a sales organization, what do you mean by that?

How does that actually break down when you start thinking of it like that and looking at it that way?

Yeah, I think it has to be.

You can't have your technicians just be solely focused on the repair.

Right.

Like they have to be thinking like, okay, part of their job is also turning over leads to the, you know, comfort specialist to go out and actually do closing meetings.

You have to have your CSRs be, you know, setting up appointments.

They can't just be saying, hey, yeah, this is an eight year old system, it's not working.

But you know, we can send a technician right now.

They also need to be, you know, prefacing the fact that it's probably going to be worth it for you to sit down and listen to, you know, one of our comfort advisors go through a repair versus replacement and like, yeah, we can obviously replace this or repair it for you, but it might be worth having this conversation as well.

And they're kind of preemptively putting that stuff out there and just setting up the, the meeting so that when you do show up to that, you know, appointment, it's not a, hey, we have to, you know, fix this.

It's like, okay, what else could you do?

And they're, they're open to other ideas.

I think just shaping the whole business around that mindset that, you know, obviously the replacement does make a lot of sense for people most of the time, especially with the refrigerant changes and the tax credits and all the things that, you know, you know, make that a benefit to them.

Just having the opportunity to explain that to as many people as possible is kind of, if you focus the business around that, then you'll get a lot more sales.

Whereas if you have that technician that's just really, really good and he loves fixing every single job, then like, he's not going to want to sell as much stuff as, you know, the guy that is maybe a little bit more sales focused or just understands that that's how the business operates and grows.

And so I think just kind of having that be the mindset of everybody that works inside the organization and then it just kind of trickles down from there.

Sure, sure.

Gotcha.

So what do you, so what do you say to those technicians that are, they're great at fixing stuff, but they, they have that feeling of, you know, I didn't sign up for this to be a salesman.

I don't want to come across as that pushy salesman because that's obviously, it's one of the most common things that I hear from technicians when I'm training.

So how do you handle that?

What do you, you know, what would you say to that person?

I think that, you know, it's a mind shift thing.

If, if they actually sit down with Paul or myself or one of the, you know, people that are pretty good at explaining the repair versus the replacement analysis.

And you see that over a three year or five year period, like they do in fact spend more money replacing or sorry, repairing the system every year and spending 800 to $3,000 every year, you know, on some sort of repair versus if they replace it now, like, what's the Overall, you know, spend look like on that five year period, they do come out ahead if they just replace it.

And so it just makes sense for most people in that position if there's somebody on fixed income and they can't afford it and they can't get approved for financing, I'm not saying like, hey, we have to sell this person a system and it's the worst thing for them.

Right.

Like, it needs to make sense for both of us.

Like it needs to make sense to them financially and it also, you know, has to make sense for the system and the position that they're in.

But I think if the technician sits through one of those presentations and still doesn't understand it, then I think there's still a position where they can go and be someone that's just really technically savvy and just be handling a lot of the really harder repairs.

And obviously, you know, when you're getting calls dispatched into the office, if it's someone saying, hey, I have a nine year old system, how soon can you get here?

Like, we're sending Alex and we're sending him today, like he'll be there in an hour.

Right.

Like, if it's someone that says, hey, I have a three or four year old system, you know, maybe you send your guy that isn't the, you know, the best at selling equipment to those calls.

And so that way you're, you're dispatching according to the actual call, not just whoever's next on the queue, you're sending them out there.

And so I think that helps too, to make sure that you're giving yourself the most opportunities, but also you're keeping your people happy because they're doing what they like to do.

For example, like Alex loves selling stuff.

He loves the commission he gets from doing it.

Like, you know, some of the other guys, they don't, you know, focus on that as much.

Gotcha.

Yeah, absolutely.

Got strategic dispatching.

Yeah.

You know, we don't just, we have to be intentional with our business.

We don't just let it happen to us.

We choose what happens in our businesses.

Right.

Yep.

That's another thing I think Lowell and I have been learning from Paul is just being ultra intentional on all the little aspects of H Vac.

Yeah, yeah, no doubt.

So let's.

I'm super curious because I know a lot of questions will also come in from listeners about what in the world have you done to start from scratch, start from zero and put up 2.2 on the board in the first 12 months and we can talk about this as well, but you come from a door knocking background, but that's not how you've really gone to business with this company.

So what have you guys done?

What are you really seeing success with as far as your advertising, your marketing, your offers?

Are you in the community?

Are you doing guerrilla marketing stuff?

What all are you doing?

What's that mix look like?

Yeah, all of it.

You know, if somebody was, you know, somebody's starting, like, what, what would you give them a priority list of, you know, how, how to sort that?

Because you can't do it all at once.

Where, where do you start?

How do you stack it in?

Yeah, absolutely.

I think, you know, I'd love to connect to anybody that's getting started as well.

If you follow me on Instagram, my Instagram is just at damonlilly Underscore and you can kind of follow my full journey from pest control through this.

I've kind of posted everything that I've done.

But you said something like, what helps you kind of get into this?

And I think what's helped me a lot is I, as I was doing the pest control thing, I was earning really good money, but I was living really, really cheap and I was investing all my money that I was making into real estate.

And so I've accumulated about 156 rental properties over the course of the nine years of doing that.

So then that kind of investment backing has allowed me to kind of come at this from more of a, an investor type focus or sales atmosphere.

But like, kind of looking at this as like a business investment.

And so I think that's helped.

Whereas if I was maybe starting as a technician, just going out and fixing things, my mindset might be totally different.

Starting my own company versus where I'm at today.

And so I think that framework kind of helps you understand a little bit of it, but pretty much, you know, some of the things that we've done to grow it, we've utilized all of Paul's experience in direct mail SEO.

We're doing meta, we're doing like literally everything that you could possibly do.

Like, we're in the Chamber of Commerce.

Like, you know, we're doing all the things, we're going to Home Depot, we're trying to get into Lowe's.

Like, we're doing the Duke Energy program.

Hopefully, if we can get in there, like, we're trying to do all these little things that you could potentially do to, to be, you know, able to generate as much business as we can.

One thing that's been instrumental for Us is Paul has a really good relationship with Linux and so Linux has been a phenomenal partner for us where they've helped to cover some of our advertising spend.

They're getting us into a Costco this year, which will be great.

Like there's a ton of things that they have helped us with just from, you know, their training platform as well.

I think that relationship with Paul's background and relationship with them has been instrumental for us as well.

And they've just given us really good pricing which we've been able to, you know, obviously increase our margins and still win on price with the customer all the time.

Yeah, I like it man.

That's good stuff.

So it sounds like one having a bit of Runway and not having to completely bootstrap it has really helped you guys to have the capital to invest into the different avenues, Facebook and Meta and PPC and all the things.

So let's flip the coin on that.

If you didn't have that now that you're a year in, how would you do it?

Yeah, so I think I have a fairly good answer for this actually.

Just from the quality Pro services side, we've been really diving into what it would take take to open a location for somebody that doesn't have a huge financial backing.

Like what do you actually need to start an H Vac location and then like what can you expect to earn from it?

And so we've done really deep research with it and basically what we found is you need about 150 to $275,000 over the course of the first year.

But don't get scared by that because over the next half of that first year you're going to recover most of that.

And so we expect most locations, if they open in the first year, they pretty much break even.

If they do it right, maybe they make a little bit of money in year one and then by year two you're making a multi six figure income off the business.

And so it's really lucrative.

I don't know any other investment.

I don't have any real estate deals where I've put money and I've gotten all my money back in year one and I've made a six figure return in year two.

Right.

If you see any of those, call me.

But I think it's a really cool process.

And so what we've kind of seen is that upfront, you know, you're getting one technician, you can maybe have a helper.

Like that technician can also be the guy that does the install.

Like he kind of is multi faceted in his training, can do both.

And then, you know, you have somebody answering the phone who also can do some of your bookkeeping, where they're doing data entry for you, they're managing the calendar, but they're also doing some of your QuickBooks stuff, like just kind of making all your roles be a little bit of everything up front.

And that way you can keep your costs way lower.

But as far as, you know, like what you'd actually spend to generate business.

We started off with a marketing budget, I think of $10,000 a month.

And that was split between, you know, direct mail and, you know, our online stuff.

And I actually, I questioned Paul in the beginning.

I was like, does direct mail even work?

Like, you know, Paul's a bit older than I am.

I'm thinking, you know, I get these mailers all the time.

I just literally throw them away.

I never even look at what they are.

Yeah, it's like, let's put that.

Make sure to get an ad in the yellow pages.

Yeah, I'm like, you mean, you know those, those big coupon book things?

He's like, no, no, like those big cards like this that say, like, you know, whatever your advertising is.

And so I was like, all right, so we try it and it takes off.

Like we get calls every month as soon as those things hit mailboxes.

And Paul's really strategic with that as well.

Right.

Like where we're hitting specific zip codes at specific times and looking at certain demographics on houses and making sure that we're doing little things that make those more effective.

But I think, you know, all those things you can get going with the business and get it off the ground pretty quickly.

And then what you'll see, I think, is as you start doing a couple of change outs every month, quickly become profitable.

Whereas if you were just going and focusing on all repairs, then it'd take you a lot longer to become profitable and you would need a lot more capital to really build the business.

We've been helping people get SBA loans or using line of credits or there's another really cool.

I was gonna ask if.

Yeah, SBA loan sounds like a really great opportunity.

You know, even a, you know, say I'm a technician that's been in the, you know, I've got, got my license and I'm ready to go out on my own.

Yeah, maybe a good avenue to go with that.

Absolutely.

So we've gone and gotten like the Quality Pro services side approved as an SBA approved franchise business.

And so what that Means is it makes it easier for anyone who's applying underneath our umbrella to get approved for an SBA loan, which has been really cool.

A lot of our guys are in the application process right now to open their locations and what we've been told at least by the SBA department is they'll usually get about 100 to $200,000 loan, the terms are really good and then, you know, they can use that to get their business off the ground.

Hopefully by the end of year one, they've paid down a loan and they can keep it open if they want to, to use for, you know, future growth.

Maybe in year two, they need to.

Buy more trucks so they can leave it open as a line of credit at that point instead of just a term loan.

In addition to that, we have another connection that we found that one of our VPs of franchise operations found a company that specializes in like one and two year loan programs for service based businesses.

And they've been super helpful and they, they seem to move really fast.

Like we'll have people apply and get approved within the first, you know, five to 10 days and they get funding within the first 20 days.

So it's been really fast and they have a lot easier approval process than the sba.

But a lot of our groups are doing both, you know, just to have short term capital if they need it.

And then they have the SBA for the kind of longer term stuff too.

Yeah.

So, so super quick for everybody that's listening, because I know that once upon a time I had no idea what this meant.

So quick, glossary.

SBA is Small Business Association.

That's what that stands for.

And that is not necessarily who's funding this, but what they do.

It's a nationwide organization of small businesses and there's a loan that most lending institutions, most banks will do.

An SBA loan, it just has to go.

There's a certain set of criteria for, and it's specifically for starting small businesses, hence the Small Business Association.

So for everybody out there, that is something that's very available and it usually has a bit lower barrier of entry to as far as what the requirements are to apply for this loan as well as it usually has some really great terms as far as what the interest is on it and what the payback terms are and those types of things.

And so in fact tied together with this, because I've applied for those, I've gone down that road before.

One piece that I don't even know how, if you're advising your people on this but the Small Business association actually has.

They have national chapters, they have actual also business mentors that come free as part of this process that people who've been successful had exits, grown, big businesses that volunteer their time to help coach people that have gotten SBA loans and how to grow and run their businesses.

So that's actually a really cool feature of that for everybody listening.

If you have gotten or considering that type of funding, there's some good benefits that come with it.

Yeah, one thing just to piggyback off of that, too.

Sam.

So here in Wilmington, the university actually has an SBA office, and it's primarily focused for students who are trying to start a business.

They can go in there and get advice.

Right.

But what we found is that most of the students aren't opening businesses, and so there's a lot of free time for those people.

We went in there and met with them and they were like, more than happy to help us get set up for ourselves as well as, you know, they've been instrumental in meeting with people that want to open franchise locations with us and being able to advise them on how to get their SBA process started.

And then, like you said, once you do get approved and get through the process and they transition you over to a business development team, it's actually coaching you and helping to give you other insights on business from the SBA department, which is kind of cool, too.

Yeah, yeah, absolutely.

It's like literally having so having a free business coach that comes along with it.

It's wild incubation center almost.

So you've mentioned this a couple times, and I would love to dive into this because there's a.

In fact, there's a guy named Alex that.

Alex Stelling, shout out to you, brother.

He's over in Utah, him and I.

He's been bouncing a franchise idea off of me for the last probably six months now.

But this is, you know, it's an idea stage there.

And I'm sure he'll be wildly successful with it as well.

He's got a lot of history there.

When we think of franchises in H Vac, most people, their mind goes to maybe not necessarily a good thing when they think of franchises.

Of course, we've got plenty of people who understand the Ben Franklins and the 1 Hours and the Mr. Sparky's.

That's a really well known one.

We've got, you know, your ars, those types of things.

But those come at a cost, a serious cost.

And typically that's why they have.

It's so polarizing.

They have great rapport with a lot of our, you know, sales and technicians and all of our.

A lot of people.

And then there's a huge portion of the industry that thinks they're a bunch of ripoffs and cheats and scammers and you're just out here to take our money.

Yeah.

So it's such a polarizing conversation when we start thinking about franchising.

Tell us a little bit about how you guys are going about this franchise model and how it's different.

What's going on here that makes it different?

Because you've had some pretty serious adoption even in only one year of your business, but you already have quite a few people that are on your franchise platform already, is that correct?

In fact, I'm.

Let me.

Scratch that.

We're not going to use the word platform because there's some organizations that are giving that word a horrible black eye right now, and I do not want to be associated with them.

So let's come back around a little bit.

This model, what makes you guys different with the way that you're going after the franchise process here?

And where'd that idea even come from?

Yeah, so we didn't get into the H Vac world, obviously, to go and start a franchise company.

It kind of came from us just wanting to help out some friends and family.

Family.

We had one of Lowell's best friends and one of my good friends now Max, wanted to open a location with us.

And he was always in our ear, like, kind of like we were to Paul, like, hey, I want to be a business owner.

I want to own this thing with you guys.

Like, let me own part of it and you guys tell me what to do.

And we were like, you know, if we're going to tell one person how to do this, we might as well see if anybody else out there would be interested.

And so kind of just through word of mouth and Instagram, we put it out there that we were going to have an interest call.

And if you're interested in owning a service based business and H Vac world, like, jump on this call.

We had a surprising amount of people get on the phone call.

And then from there a bunch of people signed letters of intent and we were like, wow, there's, you know, 20 to 30 locations that we could open really fast.

So we went back to the drawing board, you know, got really serious about coming into the franchise thing, getting all of our documents in place, making sure everything was buttoned up, getting our, you know, operations manual really dialed in, hiring people on an executive level to like run the franchise side of the business with us.

So I guess like the other part of that is we didn't get into it thinking like, okay, hey, this franchise thing is going to be like, you know, where we make a bunch of money.

We got into it thinking like, hey, this is going to be where we help our friends and people that are, we're close with, you know, build a business alongside of us.

Yeah, it'll be mutually beneficial for everybody.

But it's not like, you know, we don't have 10 royalties and some of the things you see out there on the other franchises.

Right.

Like I know one of them, like the one we were talking about, at least when we were looking at it years ago, you paid 20% of your top line to them.

Yeah, I mean this is back if you're hoping to operate at a 20, 25% net mark, way, way back.

But yeah, if you're hoping to operate at 20, 25%, right.

And someone's charging you 15, 20% like there's nothing left for you.

And if you have a bad year, like you're upside down and so, you know.

Yeah, that's why you have to, let's add it on top.

And your prices go so dramatically.

Of course at this point it'd probably be the same as a lot of the PE owned companies where they set their prices up.

Sorry for, for no apparent reason.

But yeah, so I mean we're, we're way cheaper than that and it's because it's focused towards on, you know, friends and family.

But basically, you know, we're only charging a 6% royalty, you know, way cheaper up front to get on board with us.

And then we're literally doing like everything with these people to help them get going.

It's not like you sign the franchise agreement and we say, hey, we'll have a monthly call and tell you what to do.

Like we have like daily training.

We have a full manual.

Here's a manual.

That's the luck.

Yeah, exactly.

Like it's not like that at all.

I mean we have two full time people that are making great salaries that are in the office every day and their sole focus is on growing and training and managing, you know, these franchise locations.

They're helping them hire their general manager, they're helping them get their bookkeeper on board, they're helping them interview technicians and service pros and you know, literally everything that, that you would need to start your business, like they're involved in that process.

And so I think one the community that you get from that is really cool.

And we've enjoyed, you know, having people that we like hanging out with and.

And also, you know, want to work with, being a part of it.

And so I think that's been cool.

And you're not out there just starting it on your own by yourself, wondering, like, hope this is what I'm supposed to be doing to make this successful.

Like, there's actually someone you can ask and look at, you know, the track history of everything else.

Yeah, no doubt.

You know, that's so interesting, especially in business.

There's.

I wish there were better roadmaps, and there are.

We actually just talked about the SBA association, you know, Small Business Association.

Small Business Association Association.

The sba.

The Small Business association having the coaching and training and of course, local.

You know, a lot of areas have incubation centers and business coaching, those types of things.

But, you know, for most of us, we start our companies and we're like, okay, now what Crap.

I've got to get a. I didn't know that I needed to register with my state with a franchisee license, or I didn't know that I needed to.

How and when do I file taxes?

They don't just come out of my check now.

And how much is it?

And what are those documents look like?

And how do I build business credit, not just personal credit, so everything's not run under my own name.

And so I think it's really awesome to have people that already know that and have a roadmap to.

Okay, here's what has to be set up first, here's the type of business cards you want to get for your business credit and all the things so we don't fall into those pitfalls and end up with, yeah, we made a lot of money the last three years, but now I owe twice that to the tax man.

Right, exactly.

Because I forgot to pay my taxes.

And I think that's something that would have deterred me personally.

Like, if I. I would have never gone and started an H Vac business on my own.

Right.

Like, there's all those things you just mentioned that would have scared me away from it.

I would have done pest control or just stuck to real estate or done something else.

And I think, like, Paul's experience and his expertise.

And then my other partner, Lowell, I'd shout out to him, he is an extreme operator.

Just the guy is the most type a person I've ever worked with.

But, like, he is so on the ball with every single little thing like that and making sure and following through that all those things are getting done and then yeah, like we've built out exactly what we've done in a plan that people could follow and that we will hold people accountable through the executive team that we have to make sure they get everything done that they need to, to be successful.

I think so far it's been a really cool process.

I like it.

So there's a couple questions because I want some clarity around this because yes, there's some people out there that are literally robbing people of their businesses by all this type of platform conversation where it's been ongoing in the industry for a long time.

When somebody says, hey, you know what, I like this idea.

Let's talk about a franchise.

Are they.

So bit of a two part question here.

Are they giving up equity?

And part two is do you take any type of voting rights?

Do you take any, you know what, what does that look like?

Yeah, so when they, when they connect with you.

Great question.

So on the first part, their 6% royalty is also 6% when they go to sell.

And that's the only thing that they're paying to us outside of the franchise fee up front to kind of onboard them.

Once they get on board though, they're just paying the 6% in perpetuity until they go to sell and then the real benefit.

So that 6%, when you say 6% royalty, is that coming out of top line?

Is that out of net?

Where, where does that, what line does that pull from?

Yep, top line revenue, 6%.

And here's kind of how we came to that.

Basically we were looking at it thinking, okay, if you started a first year business in H Vac, you probably do between 1 and 3 million is probably pretty average.

There's some less, some more obviously, but somewhere in that range, right.

And so if you're doing that, you know, 6% off of the top line isn't massive.

It's way under what most of the competition charges.

And then we're saving them or way more than that, right?

Like just our connection alone for just easy conversation stuff.

But on Linux for example, we're getting pricing for them somewhere 20, 25% less than what they would be getting on their own.

And so they're already at a net, you know, 14% or more after the 6% comes out of the savings.

And so the way we're doing that though is, you know, Paul has an extensive history with Linux.

We're kind of piggybacking on his purchasing power from the previous companies that he's been a part of and owned and operated.

And so we're able to get them, you know, really good pricing.

So that's going to obviously benefit them.

We're getting them better pricing on all the, you know, parts and just everything that they're going to be purchasing there, we're getting them hand holding them on whenever they go to negotiate their leases.

Like we're saving people way more than 10% just negotiating their leases and helping them with our real estate background.

Lowell's background is in commercial real estate development, so he's really experienced there as well.

And so we're able to help people save on a ton of different platforms.

And so it negates the, the 6% by all the savings but obviously allows us to be able to, you know, pay for overhead and build something.

Second to that is when they do go to sell, if you just even ask chat GPT like, hey, how much does one H vac location doing 3 million a year sell for?

You know, based on today's multiples, it'll tell you the multiples.

I think it says 3 to 7x or something.

And if you're like, if I'm a part of a.

Sorry, go ahead.

I would say, yeah, that's pretty average.

Can confirm?

Yep.

So then if you say, hey Chad, GPT, tell me what the multiples are on an H VAC location doing the same revenue but as a part of a group that has 10 plus locations that all sell together, it's like, oh yeah, the multiples are 10 to as high as 16 in some cases.

And so like when they do go to sell, yes, we would get a 6%, you know, cut of whatever they sell for.

However, if they sold for double or triple what they would have otherwise sold for, it's still mutually beneficial for them.

Right.

And so as far as control, they have full control.

Like we're giving them guidance.

We're saying, here's what we think you should do.

Here's the ads we think you should run, you know, draft of what we're running.

We encourage you to also run this.

They don't have to.

They could choose to go in a different direction.

They could, you know, choose to not run any ads this month.

Like they want to take December off and go on a trip.

Okay.

Like I don't suggest it, but they could, like they have a full control on their, their side of what they're, you know, doing.

And yeah, I love this.

Okay, so this is, this is, this is a great conversation.

It's opening up lots more question.

So let's go Back to the brand for a second.

If somebody said, you know what, I hate Linux, I don't want to use them, are they locked into that?

Can they use whatever else, install whatever they want?

We have relationships with everybody just from Paul's experience too.

I mean trane and carrier and literally everybody.

I mean we're doing good min and rental properties for people.

Like a little bit of everything even just on our own location.

Linux has just been a great partner for us and given us, you know, the access into Costco's and being, you know, a premier dealer for them just comes with a lot of different stuff.

We've been able to get, you know, really good terms with service finance and things that, you know, otherwise we maybe wouldn't have been able to get into and have as much success with without them.

However, if someone's like, yeah, in my area, Linux has a bad reputation, let's say, for example, and I want to use, you know, Goodman.

Sure.

Like we'll go help them negotiate the terms with that, make sure that they're still getting good pricing, still being just as involved as if we were, you know, using Linux.

But for the most part on the, you know, 19 or so locations that are getting going right now, pretty much everybody has gone with the, the Linux connection.

But if someone has a different idea or let's say we have one group that's kind of going back and forth with us right now about kind of coming in under the umbrella.

They've already been in business for three years.

They're doing like 800k a year and they're like, hey, we know you guys could provide us a lot of support, leadership and just, you know, things that we might be missing that we are not growing right now.

And you know, we like using our current branch that we have to switch, we're like, no, like you can continue to do that.

We'll still help you guys.

We'll still.

The accounting side.

Their accounting is a mess.

We can provide a lot of value outside of just the Linux connection.

Interesting.

Okay, I like this.

This is really fun.

So yeah, that's super helpful.

So let's go back to one thing you said because I understand that the huge conversation right now in H vac and all the trades, all the home services.

One of my business partners has a roofing company that he's moving towards exit.

Another one has a digital marketing company that he's.

Well, I can speak for him there.

I have no idea what that's going on.

But so many things, anything that touches home services in the Trades.

So many different companies are looking towards exit or at least as part of the conversation.

So something you mentioned was the multiples multiply when they're connected to a group that sells at the same time.

But what if I don't want to sell?

Yeah, you don't have to.

You know, so being franchise, this is, you know, some of the other, you know, the other plays are, hey, we're getting this to all sell at the same time to get that.

But this sounds like it's not nearly as controlling and a little more freeform.

And so what happens if, you know, you've got 20 or 18 locations, like you said, you have 18 locations now and three want to sell or one wants to sell and nobody else does?

Yeah.

So, I mean, is that the way it's set up?

Does that conversation go out to everybody, be like, hey, I want to sell.

Does anybody want to go in on this?

And let's, let's partner up and do this together.

That way we can get more of a multiple.

Or what does that networking look like within the organization?

Yeah, let's say that, for example, you come on board with us and three years from now, you have a, you know, an $8 million business and you want to go and take it to market and see what you can get, and you come to us and say.

Hey, if I came on board three years from now to have a $20 million, even better.

So let's say that you're about to go and take it to market and see if you.

What you can get for it.

Right.

You come to us, say, hey, this is my plan.

I want to sell it.

We have first writer refusal, but it's based on, you know, current valuations.

So we look at all the current valuation, go through and see if we want to buy it from you personally, which, you know, we go through that.

After that, you're like, all right, cool, I'm still going to go sell it.

You're like, do you guys want to sell right now?

We're like, ah, we're loving holding ours.

It's, you know, doing really well.

Everybody is growing.

I think we're gonna wait.

You can still have the freedom to go and sell on your own.

If you wanna do that, fine by us.

If we come to you and say, hey, we're planning on selling the overarching, you know, quality pro services as well as anybody who wants to participate in this sale is encouraged to.

Do you want to participate?

Then you then have the option to kind of opt in or opt out, whether you wanna hold your business or sell with us in the group, that's up to you.

Got it.

Okay, cool.

I. I love this.

It's more so sounds like it's actually two way conversation instead of just one way, force it down your throats type.

Of conversation is like when we were building this out, like I said, we didn't start off being like, we want to own a franchise company, right?

Like, we started off being like, hey, we're gonna do an H Vac company and we want to work with our friends and family.

And so like, if you're, you know, somebody that's really close to us, we don't want to have these horrible conversations five years from now where we're forcing them to do things that they don't want to do.

Or like, yeah, maybe it's still lucrative for them, but it's not a fun experience.

Right.

It's like we wanted it to be where it can be mutually beneficial.

Everyone gets to enjoy the ride together and we also can all benefit and profit at the end of it.

No, this is cool, man.

It's always great learning about new models.

You know, the reason I keep harping on the control and forcing it down your throats is, you know, from my vantage point, I've worked with and seen, you know, inside and outside of a bunch of different, say, private equity groups and the different coming together platforms and stuff.

And I can't really think of more than maybe one or two out of a few dozen that are worth a damn that actually care about anybody other than making a dollar and at the cost of humans and at the cost of the client and at the cost of the homeowner.

And it grosses me out so much that people have lost the humanity in this business because we are a service business and service based industry.

And so it's really refreshing to hear a different perspective on this that is much more like, hey, let's all win together instead of, yeah, you're going to make a lot of money, but you're going to destroy your client base along the way.

Because that's what normally happens with a lot of these organizations.

And so it is refreshing.

Let's turn the corner a little bit actually before we do, let's take a quick second.

Give every.

There's want to add some value here at the end because Damon is a beast at recruiting and training.

So I want to make sure to give value for everybody that you can immediately implement because right now in the fall when this date of recording is November 6th.

So this episode will come out sometime in November, in 2025.

Recruiting is, you know, something that always we talked about.

I can't.

I need to find more people.

I need to find more people.

So I want to get to that.

But first, how does everybody get a hold of you and introd, you know, give the contact for if they want to know more about, you know, what the fight, the franchise looks like and, you know, might be considering something like that or if they're considering, you know, taking on PE companies, those kind of things.

They just don't like that model and maybe want something a lot more along these lines.

How do they get a hold of you and to have that conversation.

Yeah.

So you're welcome to email me.

My email is just damon lily212ahoo.com so just my first name, underscore my last name 212ahoo and then also go ahead.

And spell it out for everybody, if you would.

Yeah.

D A, M O, N, L I, l, l, y212ahoo.com and then also my Instagram.

Is.

Is that your high school email?

I've had it forever.

You.

You would laugh.

I'm so OCD.

I have like probably 150 folders on that email that I've stored, like every single email for forever on all my rental properties.

Everything's in there.

I can never change it, but that's fine.

And then on my Instagram is just Damon underscore or sorry, Damon Lilly underscore for my Instagram and you can message me there and I reply to everybody.

So, yeah, reach out to me.

I'd love to help.

And those will be in the in the show notes for everybody.

So if you're driving your Drive Time University, just make mental note, once you get stopped, be safe.

You'll be able to get the copy those out of the show notes for this episode.

Perfect.

Yeah.

Whether you're an existing business and you just want to have a conversation on whether we could help you grow, we're happy to do that and see if there's value from your perspective with joining us.

And if not, if you're someone that's just starting and wanting to get into this world, then, yeah, reach out to us.

We'd love to have a conversation, see if it's a good fit.

Cool.

Like it, man.

Yeah.

Good stuff.

I've got a couple ideas for you too we'll talk offline about.

So let's turn the corner a little bit because as you know, you've listened to enough episodes.

We always make a really solid point in the close.

It now world to give value that's immediately actionable for people.

So especially right now in the fall, in the conversation, this is the time to be recruiting or actually maybe let's start this question.

Is there ever a right and wrong time to recruit?

Yeah.

So this part I think I'm really excited in this.

Define the difference in hiring and recruiting.

Okay.

Yeah.

So I think that this part I'm really excited to talk about with you is that I think your audience is really focused on, you know, the sales side.

And a lot of the guys are trying door to door projects and just getting things going on that.

That avenue.

So that's like where my.

I built my business in the beginning, you know.

So I think that's where I could provide a lot of value is I did a lot of different things that helped me recruit and train.

And one thing, for the first four years when I worked at the pest control group, they always used to say there was sales season, which was the summer.

Cause that's when the bugs are out and people buy pest control.

Then there was recruiting season and something that I kind of, you know, implemented and we all started stopping to do is saying recruiting season versus sales season.

Like it was just always recruiting season.

It was always sales season.

You could do both simultaneously all the time and have more success.

And so I think that that certainly helped us to kind of shift our mindset and to grow more.

And you know, throughout the process, we did a lot of things.

Like I made these little yard signs that said like, I don't know, $18 an hour student work, or depending on where I'd put them, It'd be like $20 an hour flexible hours.

Message me for information and then have my cell phone number at the bottom.

And I would put them up all over town.

They kind of look like those political ad campaign signs.

And I had great success with those over the years.

Just generating a lot of new leads for people that we would hire that would go out and be really successful in door knocking.

And then some other things that I did that were kind of creative.

I would go to the universities and speak in classrooms.

And then I also.

Let's see.

Sorry, I froze.

Then I also would go and speak to fraternities and I would offer them like a scholarship almost if they come and work with us.

And.

Or we would call it some type of like fraternity dues towards the.

The chapter that they would be joining or paying for.

And we'd offer some sort of, you know, payment to them if they completed 90 days.

And so a lot of them are struggling to pay their dues or they need some sort of financial assistance for college.

And so this would allow them to.

To get the benefit of that by working with us and still go and make, you know, 15, 20, 30,000 in, you know, doing the sales part of it.

And so I think there's tons of benefits there on those things that you could really do to grow.

But, yeah, I don't think that there's a specific time of the year where you'd have to recruit versus sell.

I think you can do it all year round.

And I think recruiting is like, you said, recruiting versus hiring.

Hiring is to me is like you're putting on an ad on.

Indeed.

Someone's applying, you're interviewing them, you pick somebody.

That's like hiring.

Recruiting is like you're an evangelist for your business.

Like, everyone that you talk to, you're like, yeah, here's what I'm doing.

There's a fit for you in this role.

Would you be open to a further conversation?

And that can be like your person.

That's your clerk at the grocery store.

That could be your person.

That's the, you know, your waiter at dinner.

It could be anybody.

Yeah, I love it, love it, love it.

That's.

I knew you were.

I had a feeling you were going to answer that way because that's my mindset as well.

There's no such thing as, you know, like, we have to have a culture in your whole organization of always be recruiting.

You know, it's.

It's absolutely.

If we're not doing that, then, you know, I know.

Reference Tommy Mello for everybody who knows who that is.

You know, that's his mantra.

We're always recruiting, we're always hiring, and so we're always looking for great people.

So let's apply this.

Absolutely.

And of course, you know, as most people, if you don't know, I'm building out a new company.

We're called Door to Door Institute, where we're bringing canvassing to H Vac.

So we're in the process.

I'm living it right now in the recruiting phase, so.

Which is really fun because we're taking teams to your location to put appointments on your calendar.

But outside of that, let's shift the corner a little bit because that's one level of recruiting.

Now let's think about recruiting for your technicians and for your salespeople and for your office and.

And those types of things.

How would.

How are you approaching that in your businesses now?

And how are you.

Of course.

And then by extension, Training the franchisees for that type of.

That.

That type of content, that type of mindset.

Yeah.

So I think for me, when I was recruiting for pest control, it was primarily like, word of mouth.

I would recruit somebody and then they would start having success, and I would say, okay, hey, like, I wouldn't bring it up right away.

I would wait until they were being successful and then say, like, hey, like, I'm sure you have two or three buddies that are similar to, you know, let's get them in here for a meeting.

Like, let's kind of explore your personal network.

How can we grow this thing through your, you know, connections?

For hpac, I think it's a little different, especially on the, you know, technician side.

They obviously have to be licensed and have all those requirements.

And so for that side, you know, we primarily recruited the first few people through.

Indeed.

Or just through word of mouth once we opened.

A lot of times, you know, if your office is in a visible location, we have people stop in every week that say, hey, I work at this company.

I'm interested in what you guys are doing.

I've heard about what's going on.

Like, we'd love to learn more because we've had success just from that.

But we've also had a lot of success telling our guys who are really good, like, hey, who do you know that you would kind of vouch for?

That would be a great hire for us.

And we've been able to hire really good people through that as well, and I think there's tremendous value there.

Thanks.

So do you give any type of a recruiting bonus or.

If somebody stays on for 90 days, it's a couple thousand bucks.

The only time we've done that is during the summer.

We were growing really fast, and we needed a new install crew, like, now.

And we offered somebody some type of referral bonus if they could bring in somebody that we hired, and they ended up earning that.

Outside of that, if you're what another benefit of our program is we've been able to really track how many calls you're going to get through the marketing program.

And, like, based on that previous data that we have and Paul's experience, we know, like, all right, by this point, we should be doing this much and in service calls, this much in installs every day.

And so in order to do that, we need this many trucks, we need this many people.

And so we've been able to kind of project and hire accordingly.

So we haven't really been behind the eight ball on that stuff most of the time.

Whereas this one time in July, we were, we were getting close to it and we needed someone fast.

Outside of that, we haven't really had to hire any, you know, in quick time employees.

So.

Yeah, what's the, the, the, what's the main thing?

So people can get so bogged down or so cluttered, especially when they're starting and they don't have a plan or a, an actual agenda of what's my marketing calendar look like?

All of these things aren't organized yet and we can get bombarded with a million different people.

Like, could you use 35 appointments on your calendar this week in our inbox.

And TV and radio and the local newspapers and how do they organize that?

Where do they start?

Give us your thoughts around all of this.

Yeah, I think you really need to kind of.

It starts with your budget.

You build your budget and then you gotta really stick to that.

And if you've never built a budget, you need to find someone who has that can help you build your budget and then go off of that like that's your roadmap basically for your business for that whole year.

Yeah, you can pivot a little bit, but you don't want to be like, I'm on my budget, I'm on my budget.

All of a sudden Sam calls me or and says like, hey, you should do this program over here.

You're like, okay, I'm gonna go 20 grand in that direction now.

Outside of what I was doing, like, I think there's just, just you got to really stick to what you're supposed to do and then just really see that stuff through.

Otherwise, like you just said, there's so many distractions.

And I mean I get voicemails every day that are someone's like, hey, you should be trying this for, for NC Quality Air.

We have this credit line you could apply for, for 30 grand.

We'll have it ready for you Friday.

Like it's every day there's someone trying to like chatter at you and there's, you know, you have to just block out all those distractions.

There's some value, I'm sure in some of that stuff.

But for the most part we've found success just doing, you know, what we set out to do.

Spending our energy on that stuff and then just really making that our bread and butter.

Nice.

I love it, man.

Thanks for that, that tip.

Because that's it.

Sticking to the budget.

You know, that may be a great idea, but it's not this quarter, you know.

Yeah.

Okay, let's put it in back in the hot.

Build that in for next year.

Yeah, let's build it.

It's going to be Q1.

It's going to be Q. I've got things I'm already planning out for every single quarter next year.

But I know we're not going to be ready for them until then, so why try to force it it, right?

Exactly.

Love it, love it, love it.

Well, give everybody how they get ahold of you one more time and then we're gonna sign off, man.

Yeah.

Awesome.

Sam, I really appreciate you having me on, man.

It's been great following your story over the years and congrats on your success.

You're crushing it.

But so yeah, my Instagram is amonlily underscore and then my email just damonlilly212ahoo.com so yeah, reach out to me.

I'd love to connect with as many people as want to have a conversation.

It'd be awesome.

Love it, love it, love it.

So Damon Lilly, everybody with NC Quality Air is the Atrac company and then the Quality Pros.

Is that the Quality Pros services?

Both those have websites, obviously.

Yeah.

What's the website for?

Quality pros.

Yeah, qualityproservices.com.

you can go on there and send us an inquiry and we'll get back to you that way as well too if that works better.

Got it.

Quality Pro Services.

Not plural.

Correct.

Exactly.

So Quality Pro Services.

Cool.

Love it, man.

Well, for everybody, thanks.

So thanks for being on again, Damon.

For everybody else that's listening, thanks for joining us on this Drive Time University.

I appreciate every single one of you.

If you've gotten value from the podcast, this podcast or any close it now podcast, I would ask you to take five seconds of your day and leave me a five star review.

Just go to Google and search for Close it.

Now you can go to Apple Podcasts and now Spotify has a place to leave comments.

So I would love a review comments on all of those and that helps me grow, helps me have better guests on and helps this podcast grow to reach more people, to help more people.

So thanks for that.

Also the last couple quick announcements.

If you haven't gotten your copy of the Guerrilla marketing guide how to have consistent flow of leads around without spending a dime online.

That is my free gift to everyone.

You can go to Door two door Institute.

That's D O O R the number two D O O rinstitute.

That is my free gift to you.

And if you want to know more about how to take that not necessarily a detour but we do have a proven method now to put, you know, 40, 50, 80, 100, 120, 150 appointments on your calendar in a week's time.

Reach out to me and we have a door to door method that is working across the country.

In fact, this last couple days I spoke at an event called Services Summit here in Austin and I met an owner of an H Vac company and he's in across three different states, Utah and Idaho and another one or two of the states up in that area.

My geography mind fails me and they are doing 70 million a year and a huge portion of their marketing is through canvassing.

So it is definitely effective.

It's growing companies like crazy.

So we're bringing it at scale to every single company who would like to have that conversation.

So reach out at Door to Door Institute and get on our list to have a conversation.

We have about six to eight locations actually locked in our beta tests, which means we only have two to four beta test spots left available of those first 10 locations that want to be the first to market in your area using canvassing.

So reach out about that.

You have the opportunity to lock in those last spots because we're collecting all this data.

It's going to blow your mind as soon as we put it together to announce it to everybody.

But yeah, be a first mover there and own your Dominator market.

So that's my announcements for today.

Thanks for everybody for listening.

I hope you have a fantastic day.

Go crush it and remember every single day, work to be 1% better than you were yesterday.

When you compound that across a year, you are 37 times better than you were when you started that year.

And that is how you become somebody worth buying from.

You've been listening to the Close it now podcast.

Our passion is to dive headfirst into the transformative movement that's reshaping the very foundation of H Vac and home improvement and at the same time covering fitness, nutrition, relationships and personal growth, proving that we can indeed have it all.

We hope you've enjoyed the show.

If you did, make sure to like rate and review.

We'll be back soon, but in the meantime, find the website@closeitnow.net find us on Instagram at thereal Close it now and on Facebook at Close It Now.

See you next time.

It.