The Home Service Expert Podcast
Understanding the Complexities of the Commercial Landscape with Josh Young
Fri, 18 Apr 2025
In this conversation, Josh Young discusses the challenges and successes in the commercial construction industry, focusing on business growth, leadership, and the impact of private equity. He explores the importance of pushing team members to exceed their limits, learning from mistakes, and the complexities of navigating the commercial landscape. The discussion covers strategizing for scaling businesses, restructuring profitability for sustainability, and maximizing productivity through effective time management. The conversation also delves into the role of technology and AI in business operations, the future of autonomous vehicles, and the need for education and apprenticeship programs in trades to bridge the talent gap. Don’t forget to register for Tommy’s event, Freedom 2025! This is the event where Tommy’s billion-dollar network will break down exactly how to accelerate your business and dominate your market in 2025. For more details visit freedomevent.com Show Notes: 00:00 Transforming Challenges into Opportunities 09:57 Navigating Growth and Leadership 20:00 The Role of Private Equity in Business Success 26:42 Performance Pay System Insights 28:09 Customer Experience and Upselling Techniques 29:46 Building Trust and Relationships in Business 31:07 The Importance of Networking and Support Systems 33:51 Choosing the Right Circle for Growth 35:30 Exploring New Markets and Business Opportunities 37:43 Revenue Goals and Business Planning 39:12 The Importance of Profitability in Business 40:56 Lead Generation Strategies 42:31 Time Management and Productivity 45:20 Leveraging AI in Business 47:23 The Future of Autonomous Vehicles 49:06 Long-Term Business Strategies 52:54 Addressing the Skills Gap in Trades
Chapter 1: Who is Josh Young and what is his role in commercial construction?
All right, guys, welcome back to the Home Service Expert. Today, Josh Young is in the house. He's out of Chandler, Arizona, so he's my neighbor. He's an expert in contract management, value engineering, construction. He's the president of New Construction at Tempe Mechanical, where he's worked for more than 16 years.
Over the years, he has worked to develop customer relationships on large commercial HVAC and plumbing projects. Josh also specializes in several industries, industrial projects, hospitals, municipalities, schools, and hotels. What's up, dude? What's happening? Thanks, Tommy, for having me. That's exciting. I love home service, man. I love business in general.
Chapter 2: How did Josh Young grow his business from $8 million to $37 million?
And I love hearing businesses that are growing. You guys went from, what is it, $8 to $16 million in a year? Yeah, yeah.
So we've kind of gone up and down a little bit. But, yeah, when I took over, we actually spiked to about 16. Then we came back to about 10, and now we're up to 37. Really? Yeah, just in two years.
So that's a lot of fluctuations. Yeah. What happened? What's the good, bad, and the skinny on it?
Yeah, so we started—obviously, I became president— Two years ago, I was vice president for a little while. So my dad kind of retired. I took over the business and then I had to learn the business. Right. So he just kind of like dropped it and walked out and was like, hey, here's a you know, here's a 10 million dollar business. Good luck. Have fun.
Chapter 3: What challenges did Josh face when scaling his commercial construction company?
So I had to kind of learn, you know, what to do, what not to do. And of course, like anybody. Right. I wanted to run for the fences. So what I did was, yeah, I wanted to scale it, right? So the things that were going on at the time was a bunch of high rises. I'm like, hey, I'm going after the high rises. We weren't equipped. We weren't ready. We didn't have the manpower. I didn't care.
I just went running right into it. So we did our first high rise. We didn't, you know, it wasn't great. We didn't make a bunch of money, but we're like, hey, that was the whole point. Set us up on the first one. We learned, right? So we went into a couple more and just about crippled us.
The manpower, the resources, the cash flow that you need and the logistics behind it were just absolutely way more than I expected. Yep. So we took a step back and kind of reevaluated everything. And then after that, learned that high rises are not for us. So we said, what is for us, right? What works for our business and the people in it?
So we kind of put our plan together for marketing and the front end and just started, you know, doing what we know we're good at, right? What are you good at? So we like small, complicated projects. And I say small, you know, not $20-plus million projects. We like between a million and $10 million jobs.
And it's all HVAC-related?
Yeah, HVAC and plumbing.
Okay.
Yeah.
And it's all commercial?
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Chapter 4: How does Josh approach leadership and learning from mistakes?
The other bad part is you don't make the rules, right? Somebody else makes all the rules for you, and you have to abide by them, whether right, wrong, or indifferent. Half the stuff is against the law.
The bureaucracy and the red tape is ridiculous. And, you know, I'm building a place in Idaho, and I think there's three inspections required. You're allowed to build 47 stories tall on residential. I think that's almost—it's under— Like, there should be a little bit more guidelines for safety. But I will say I like this city a lot.
I don't think I'd... I have an opportunity where I can live wherever I want. I'm from Michigan. I really like Michigan, but I don't miss the winters.
Well, that's probably why we get along. My whole family's from Michigan. Really? Yeah, yeah. What part? Boyne City. I don't know if I know Boyne. Well, it's up north. You know where Traverse City is?
Yeah, that's where I just went on my golf trip last year. Yeah, so it's just east of there. So, just east of... So... this may or July we do a golf trip called the MacGruber open.
Okay.
My teams, I picked the team. My cousin picks the team. I'm undefeated. I just have to throw that out there. I'm also undefeated in my volleyball for my pinnacle trip to Mexico next week. But, um, uh, we're going just East of Traverse city. And I don't know, it might be the same city. Is it a golf area?
Not really. They're kind of on the lake. Um, In that, it's a very small town.
Okay, so it's probably near there.
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Chapter 5: What is the impact of private equity on business growth and leadership?
Paradise Valley. I'm moving to the north side of Camelback, northeast corner of the land. It's called Billionaire's Row. My neighbors are going to be the Waltons and the Disney family. There you go. I'm building my dream. It's a passion of love, but You know, we were going over the game room and I'm like this. I don't have any feedback on the whole house except for the game room. There you go.
This is where I need to be perfect. So it's going to be sick. But anyways, tell me. So you've kind of got to learn the business. What were some of the biggest mistakes you've made? Obviously, fast growth, you know, chasing revenue versus profit is probably one of the big ones.
Yeah. Yeah. So exactly. Chasing revenue instead of profits is big. Taking on stuff that, again, we're not good at. Right. Thinking that we were, you know, capable no matter what building we went into and finding out that wasn't the case. Right. And being more prepared, I guess, is something I've learned through this. Um, and also letting other people kind of help in the decision-making process.
So I think sometimes we get, you know, as managers or leaders, we think we have to make all the decisions, right? And all our decisions are going to be the best decisions. Well, I learned that letting some of my other leadership and even some of the people down even further down, uh, make some decisions and have some input, um, changed my views and, and actually what kind of projects we went after.
Um, you know, how fast we could get projects done, you know, bringing in that feedback. So I think, you know, a lot of that I learned going through challenges like taking on the high-rise building, right, taking on some of these projects that we weren't prepared for.
There's this saying that a mistake made more than once is a choice. So you got to learn from your lessons. And theoretically, I always say, like, hypothetically, I've got scars and bruises all over from all the mistakes I've made. And this experience, I believe, there's a lot of smart people that get master's degrees. I've got an MBA.
100%.
And a lot of people... They've got this authority complex. Like, I've got the knowledge. I've learned. But they lose the humility and humbleness. And they think because they went to a stupid school with a tenured professor that never made it in the real world that they're ready to make big boy decisions. And it's just not the case. And it's funny because private equity is getting into it.
But without great founders and leadership, private equity fails. If they could do it, then they would.
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Chapter 6: How does Josh use performance pay systems to motivate his team?
Yeah, by Adam Coffey.
Yeah.
Yep.
And so, you know, that's kind of the positive side of it and how you can, you know, use private equity to kind of grow and do all of that.
Well, you roll equity. So I rolled 50%, 49%. So the deal is, is this next deal, I'll be a billionaire on the next turn. But the fact is... Jeff Bezos owns 8.3% of Amazon. Mark Zuckerberg owns 14% of Meta. The way you build an empire is by getting cash infusions. Otherwise, you're reinvesting your living off of it. Now, here's the deal.
I'm going to write a... I'll give you my book when it comes out in September. It's called Pay Them What They're Worth. And it's about equity incentive programs, phantom equity, profit units. There's a lot of ways to skin this cat. But you want to give key players in the business, number one, it helps you recruit the A-plus best players in the world like Elon Musk does.
Number two, it keeps people from leaving. Number three, it has them run and sprint towards the same goal you are, which is build an equitable company. So the deal is they do not get the money until a change of control. So your second turn, you can make more money than the first turn. Parkinson's, good buddies of mine, Paul Kelly. Five turns. Sold the business five different times.
Pulling out chunks. Tens of millions, if not hundreds of millions of money each time. So my life, I had money. I had $12 million in my account before we did the deal. But now I'm like, I will say this. I'm taking my niece and nephews next month to Disney World. We're not waiting in any lines. We're getting VIP. And the money's a fart in the wind. I don't worry anymore. Yeah.
I pay for dinner every single time, and I don't ask anything in return because I worked very hard to be able to do this for my friends, family, and people that are important to me. And I will say, like, it's not that I didn't have money, but now, I mean, look, my house is the most expensive house in Arizona that I'm building. And I'm not cocky, but here's the deal.
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Chapter 7: What strategies improve customer experience and upselling in home services?
Have fun. Right. Yeah. So so I think I don't know that I would change anything other than shape to shape to you are in the decisions you make today. So I agree with that. Right. So, you know, other than that, I just think, you know, learning faster how to become a leader and being more humble and not being so stuck on, you know, the dollars. Right.
Um, and me like what's in it for me, what, you know, once I got over to that part, if I could have relieved that part of it, like long, long ago, I guess that would be the one thing is like being more humble and not doing it for me, doing it for the cause and for the people underneath me, I think would, you know, I would be in a lot better place today if I had learned that faster.
You know, I'm going to give you a bunch of books to read, but there's this new book called the courage to be disliked. And if your mind is set on the mission, you're going to break some glass getting to that. But the deal is, if everyone's focused on the mission, it changes everything. And it's what true leaders are. There's very few real leaders in this world.
They're not willing to do what it takes. I'll say this. I like to be liked. It's a flaw of mine. I don't fire anybody. I haven't fired in over 10 years. I like to be liked. I like to be the... my Glassdoor rating is 93% as a CEO. I don't need it to be. It's just a pride thing. And I kind of get bullied sometimes. And I got a lot of no people around me. I'll tell you this. Most of the...
Chapter 8: Why is networking and choosing the right circle crucial for business growth?
team will tell me to go f off and they respectfully but they say no um and i need that yeah because i'm a dreamer yeah and you know they're very they're very focused on the goal i mean look we hit last month 27 to the bottom line 27 that's awesome that's nutty yeah and i'm like i think we could hit 30 yeah But you can only bleed so much. You can squeeze so much blood out of a turnip.
Like the idea is you got to go revenue growth too. So we missed our revenue goal last year. We exceeded our EBITDA number. And so this year is going to be a heavy revenue growth year.
Yeah.
but I love this, man. I could talk about business all day. Like this is like people are like, how do you work so much? I'm like, I never go to work. This is what I do. Yeah. I don't know if you, do you love what you do just as much as I do?
Oh yeah. Yeah. Yeah. I love, I love, love business. I don't know that I love commercial construction as much. Yeah. Right. But I do love business. I love the financial part of it. I love going through, you know, an income statement or a balance sheet and picking out things. You know, how do we do this better?
Like I said, we were talking about, you know, well, how did you get, you know, get so good with the cashflow and making sure that you don't get behind on payments with these people, just, just figuring out those issues. I really enjoy and building the business, right. Building people up, pushing them to do things that they never thought they could do. Right.
I get a lot of enjoyment out of pushing people that said, I can't do this. There's no way. And then all of a sudden, you know, a year later, they're doing double what they thought they could. You know, I have an estimator that came in. He sold like $2 million, right? And now he's selling $15 million a year. You know, he said, there's no way I'm going to ever get there, right?
And I just kept pushing and pushing and pushing. And finally, you know, last year, he went above what he had set for a goal. So that's the kind of stuff that I love. And one of the things that I finally learned is I do need a leadership team. And I didn't know what that meant. And I can tell you, Vistage has helped me quite a bit.
I was going to ask you about that.
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