The #1 Reason Home Service Companies Get Stuck Between $1M and $10M

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The Home Service Expert Podcast 1h 17m 3 speakers 8 chapters transcribed 4 months ago
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What is the main reason home service companies get stuck between $1M and $10M?

Tommy Mello 0:00
You can be successful, you can grind and you can hustle, but at some point it's going to break. The question is not how do I grind harder? The question is, what is the path of least resistance? You want to find what exactly is the lever that I want to pull? What do I want to double down on? Sometimes it's saying no to revenue to protect your EBITDA. Better decisions executed by top A class individuals equals profit. Before you make any big decision, pause. What you've built, version one of your business, doesn't need to be the version you actually scale. Your business now is very different than the business you started with.

How can companies identify their most profitable operations?

Yarin Gaon 0:34
Oh, way different.
Tommy Mello 0:35
You have to be intentional about creating these versions.
Unknown 0:41
Alright guys, welcome back to the Home Service Expert. Today I got Yaron Gaon with us. I pronounced that right?

What mistakes do home service companies make when diversifying?

Unknown 0:48
Perfect. It's Israeli. Correct. It's awesome. Love me some Israeli people. I'm telling you this, the people that I know are always hustling from Israel. That's right. They're just good people. Hustle is not a plan.
Tommy Mello 1:00
We'll talk about that.
Unknown 1:01
So you're an expert in scaling companies, growth advisory, operations, positioning, leverage, profit design, EOS. It's funny. I know Gino Wickman, Mark Winters, was just on the podcast. You're based in Salt Lake. Correct.

How does the 'path of least resistance' apply to business growth?

Unknown 1:14
And you just moved from Austin. Forex founder, started his first business at 14 SMS payments. Awesome. Built and sold Israel's largest military e-commerce platform. Well, let's rock, dude. Tell me a little bit about... Tell me a little bit about getting started at 14, your SMS payment platform, and just how you got started.
Tommy Mello 1:34
Yeah. How did I get started? I loved building stuff.

What role does profitability play before seeking capital?

Tommy Mello 1:40
I loved building stuff. So I loved building systems. At 14, if I take you, that was like early 2000. And text messaging, micropayment was just beginning. So you could buy a wallpaper by texting a number and pay for a wallpaper for your phone or a ringtone.

How do the best CEOs make decisions that lead to higher profits?

Tommy Mello 1:56
It was a whole... community or list of services you can do or you can have with text messages. And I thought that was a really cool thing. But being 14, I couldn't really monetize. I couldn't really do this. Meaning that I had a website. I wanted to start monetizing my website, but I couldn't do this. So I ended up building a platform for small business owners, for small companies that basically allows them to implement like a code inside of their website and start monetizing their own content.
Thank you.
Tommy Mello 2:29
That's what I did.

What is the importance of focusing on customer retention?

Unknown 2:30
Wow.
Tommy Mello 2:30
Yeah.
Unknown 2:31
And how did that work?
Tommy Mello 2:33
Worked perfectly. So I grew this.

How can a business effectively pause and redesign its growth strategy?

Tommy Mello 2:35
And then two years later, people came to me and said, we want to charge more than the highest ticket price. So in text messaging back in the 2000s, you can charge up to, I think, $4 or $5. People wanted to charge more. So I partnered with the second largest credit card company in Israel. And we built a payment processing with credit cards. So same idea. Instead of SMS, it became credit cards. And then I ran it for two years and I joined the military at 18. There's a mandatory military service in Israel and I had to close my businesses. And I drafted, I ended up being a combat sergeant. Wow. Yeah. Did that for about three years, learned a lot, experienced a lot.
Unknown 3:19
What were you making at age 14, 15, 16 years old before you got into the military?
Tommy Mello 3:24
10th of thousands of dollars. Not crazy amount of money, but it was a lot for a kid.
Yarin Gaon 3:29
Correct. Yeah.
Tommy Mello 3:30
I was very lucky. I had parents that enabled me to do that. Like my dad gave me a checkbook under his name and I transact cause I was too young. I couldn't even open a bank account at 14. My parents enabled me and that's what I was able to really play and experiment at such a young age.
Unknown 3:49
That's great. Entrepreneurial family.
Tommy Mello 3:51
My dad was an entrepreneur. Correct.
Yeah.
Unknown 3:53
Oh, that's great. And then you served the IDF's combat sergeant, commanding platoons. You know, is there anything you really took from the military that sticks with you today?
Tommy Mello 4:04
So many things stick with me today. can do hard things it sounds so cliche but it really like it just puts you in an uncomfortable situations i was a plush kid from a plush life and i got throwing into this mix that um was very different than the way i grew up different people different environment you just adapt and you

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