Where there’s smoke, there’s $$$
Hey Contrarians,
Are you a sucker for stories about sticking it to the man?
This one’s for you.
Today’s tale: a couple of undervalued, underestimated employees who struck out on their own – then 3x'd profits in just two years of sweeping chimneys.
If this breakdown stokes your fire to buy a biz of your own…
Next week, I’m hosting a free, live masterclass where I’ll share the exact 10 steps I’ve used to purchase 20+ cashflowing businesses over the past decade. (Seats are limited, so sign up here before they’re gone).
Let’s dive in.
Today in 10 minutes or less, you’ll learn:
✔️ A contrarian framework: Don’t be the 85%
✔️ How 2 guys became chimney repair moguls
✔️ What they did to scale profit by 30%
✔️ How you can replicate this
A Contrarian Framework:
Don’t be the 85%
85.4% of small business owners wish they’d started sooner.
None wish they’d read one more book.
None regret not spending $100k on another degree.
None pine for a life with a safe job in a safe industry and a safe 40 years until the false freedom we call retirement.
Most people never take a real risk in their lives.
But the owners?
They only wish they’d done it sooner.
If you’re gonna take the step…
Take it now.
How 2 guys became chimney repair MOGULS
It’s 2018 and two ex-Marines, Matt and Billy, work at a chimney repair company in Roanoke, Virginia.
Need a chimney cap installed, worn mortar repaired, or flue buildup removed? They’re your guys.
For a while, things go pretty well… Until they suddenly don't.
First, paychecks are late. Then they bounce. The guys’ ideas are tossed in the trash. And to top it off, they're given the boot.
So they stick up two middle fingers, team up with Matt’s younger brother Mitchell, and start their own company.
The three founders scrounged together $8,000. Just enough to cover licenses, uniforms, a van, flyers, and business cards.
With that, Patriot Chimney was born.
Crunching the numbers
Repairing chimneys sounds great and all, but how profitable is the business?
It depends on who’s running it...
Year 1: Patriot Chimney did ~$21k a month, totaling $212,000 in gross revenue at 8% net profit.
That’s about $17k total profit for months of work. Almost enough to make you think this chimney biz won’t catch fire.
But remember – it's a new company run by three first-time business owners: we’re bound to have bottlenecks.
Year 2: Average monthly revenue rose to $45,394, at 38% profit.
Year 3: By 2021, Patriot Chimney grew to a full operation with 3 vans, 5 full-time employees, and a warehouse.
After raising prices from $85 to $250 per inspection, the owners hit $463,000+ in revenue – 30% more than they made in 2020.
Now we need to break down exactly how these guys pulled it off.
What they did to scale profit by 30%
1. Division of labor
”Too many captains sink the ship.”
I’ve seen too many businesses where everyone wants to row in a different direction. Especially in companies with 2+ founders.
But you can get around this with the right division of labor.
Since Matt and Billy were the ones with industry experience, they were heavily involved with product and order fulfillment. Their knowledge base also made them the company's first salesmen.
Mitchell, on the other hand, was the one with a marketing degree, which made him the designated 'tech' guy.
With a $500 monthly budget, he ran the company's digital campaign.
He hired an SEO agency to create blog posts 2x a month while he handled email marketing, social media, and Pay-Per-Click (PPC) ads himself.
That’s right. Facebook ads for birds in your chimney. There’s a first time for everything on the internet.
2. Building a sales program
Don’t get me wrong, digital marketing is the #1 cheat code for successful small businesses.
BUT, there are certain industries that can’t do away with the touch of a good old-fashioned salesman.
Patriot Chimney realized it was in one such industry and sprang for door-to-door sales early on. They got old-school with flyers, door hangers, and postcards left directly on folks’ porches.
Billy and Matt created a custom sales flowchart complete with specific instructions on things like ‘how long to wait before follow-up’ and ‘what % discount to offer’.
Building out this SOP completely took the guesswork out of their sales program (increased close rate from 40% to 56.8%), while consistently feeding leads into their pipeline (increased AOV from $333 to $508).
3. Rely on systems
Truth is, systems build a business. Handling everything manually eventually leads to $$$ slipping through the cracks.
Today, Patriot Chimney uses 11+ tools for its systems alone.
From tracking door-to-door sales to sending follow-up postcards to asking for reviews… Most of the business operations happen on auto-pilot.
Switching to Jobber the second year alone made a $200k difference in rev.
How you can replicate this
STEP #1: PICKING A NICHE
Home repair is a great space to own a sweaty biz. There’s one vital principle to keep in mind: recurring revenue.
When choosing your industry, consider verticals that regularly get return customers in a fixed timeframe.
- Your concrete company might not need to pay a visit for another 10-15 years.
- Your plumber could come today and still get at least one more call from you before August.
So how about your chimney service?
Local fire codes recommend homeowners get their chimneys checked yearly. Which means in a 5-year window (with some expertly-timed marketing reminders), you get to charge the same customer at least 3 times.
STEP #2: THE BORING STUFF
In construction-related industries, always factor in licenses, permits, and insurance. No one wants an electrician who can’t prove they know which wire to cut or a tree trimmer with no insurance.
Chimney biz’s, though, are a surprisingly grey area.
Your location may or may not require certain certifications. But for marketing’s sake… Get all the training and badges you can. Make the choice easy for your customer.
Visit your local SBA to learn exactly what you need to know about the licensing body, process, and insurance near you.
STEP #3: REFERRAL PARTNERSHIPS
Strategically partnering with other companies is some low-hanging revenue fruit.
Patriot Chimney realized chimney leaks usually manifest as roof leaks. So, what do you do with that?
- You go to the local roofers, and you strike a deal: if a roof leak ends up a chimney issue, they’ll call you. If a chimney issue is being a leaky roof, you’ll call them.
- You go to the local chimney suppliers, and you make sure they’ll send you customers as long as you use their parts.
- You get to know the gutter cleaners, the power washers, and anyone else who might need to “know a chimney guy.” And you become their guy.
Relationships are the 20% of effort that yield 80% of results in business.
STEP #4: DON’T BE THE BEST
Think you need to be the best on the market to succeed in business?
Noble, but counter-intuitive.
The truth is, you don’t need to be better than everyone else… You just have to be better than the guy selling next door.
Matt and his co-founders knew this, which is why they obsessed on their competitors’ Yelp reviews. Every negative review for the competition is a chance to prove why you’re the better choice.
Don’t learn from your mistakes.
Learn from someone else’s first.
This is what it means to be an owner. To have skin in the game.
- Codie
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Ready to become part of the Contrarian Crew?
There are 2 ways to join:
✔️ Small Business Acquisitions Course: A step-by-step framework on how to build freedom and passive income through SMB acquisitions.
It's like a mini-MBA, but one you'll actually use (and at 1/100th of the cost!)
✔️ Work closely with us in the Unconventional Acquisitions Mastermind to buy your first, or next, business if you have a minimum of $50k to invest!
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