[00:00:02] Speaker A: Ramping up your business. The time is near. You've given it heart, now get it in Gear.
It's Passage to Profit with Richard and Elizabeth Gearhart. I'm Richard Gearhart, founder of Gearhart Law, a full service intellectual property law firm specializing in patents, trademarks and copyrights.
[00:00:20] Speaker B: And I'm Elizabeth Gearhart, not an attorney, but I do marketing for Gearhart Law. And I am the founder of Gear Media Studios, a full service podcast studio.
[00:00:29] Speaker A: Welcome to Passage to Profit the road to entrepreneurship where we talk with celebrities and entrepreneurs about their stories and their business ventures.
[00:00:38] Speaker B: So we're going to talk to Matt Tamayo now and he has SL advisors and it's SL advisors.net and he is going to tell us how he is helping other business owners. And it's really an interesting business model that he has. As he said earlier, he's the only one doing it. So Matt, welcome. Tell us what you're doing.
[00:00:55] Speaker C: Thank you for having me. I really appreciate it. And you did an excellent job by the way. Thank you. You really hit the nail on the head. And you know, I do something similar to her, but different space. I work with electricians, plumbing, H Vac contractors, security integrators, and I have clients in one of two buckets either five years or less, where they understand that reoccurring revenue is really the holy grail of their business. Or I have a client now that has hired me, has been in business for 50 years and still hasn't figured out how to really implement a service agreement program properly. Now, what is a service agreement? Right. So a lot of people want to be in the installation business. You want to be in the reoccurring revenue business for. For a couple of reasons. One is money, right? So a lot of people don't understand, like you said earlier, about how much money you get to keep. So say I install an H VAC system for 300 grand, which sounds like a lot of money, but. But it's not. You know, imagine what it cost this building and say my margin is usually around 40% well after it's installed. With margin erosion, it's probably closer to 20. And that's without any discounts or reoccurring revenue. On the other hand, margins are much higher and you're also getting paid for services yet to be rendered. So I have a lot of clients that get paid a year at a time, five years at a time, because we always start with multi year agreements. And it's not just about the money. It's about increasing customer satisfaction and loyalty, which A lot of businesses don't understand, right? So business is about relationships. You know, people aren't buying widgets, they're buying you. And if you only want a transactional relationship with your customer where you install it and you don't talk to them again until there's a critical service issue, you have an unhappy customer, a sourced out technician that was on his way to Applebee's to have riblets with his girlfriend. Now at 5:00 clock on a Friday, he's got to drive out to a customer site. And the worst part is he is not going to be able to resolve that issue. And the reason is they haven't been doing any preventative maintenance, which is a big part of service agreement programs. So I really love helping my customers build these programs because it really changes how they do business. And I only deal with ownership because if you can't implement this because it's a program, but the program isn't stressed out a long period of time, I always say to my customers, you know, a lot of consultants take off your watch and tell you what time it is.
So I'm a typical New Yorker, I have, I have zero patients. So I only meet with my customers a total of four times. It's eight hours. And then I give them a reference guide and then I coach them. And I'm very happy to say that all of my clients have sold service agreements during or shortly after training. And now my average clients 10xing my fee, usually within three months.
[00:03:13] Speaker A: That's great.
[00:03:13] Speaker C: And once the program is in place, it keeps building up. And to be frank, I was surprised. I'm like, I did this. Entrepreneurs, I think, deal with a lot of self doubt, right? You're like, is this going to work? Did I, did I pick the right thing? And that's why I said earlier, you know, I've fallen on my face a couple of times. And I thought I was going to be a security consultant because I came from the electronic security and AV industry. And then I have friends of mine in the industry like Matt, like, you know all about this reoccurring revenue. Can you help us? So I said, sure. And that's how service level advisors were born. And now I have clients all over the country. I'm a guest speaker, keynote speaker. I'm like, what? Like how did this even happen? But a big challenge for me is that the industry I work in is very old school. And what I mean by that is most of the owners are getting ready to retire and either they're going to sell the Business or their son or daughter is going to take it over. And the sons and daughters are the ones who literally, we have a conversation, and I'm usually hired on the spot. And listen, I'm not saying I'm the best closer by any means, is that they see the value of it. And then I'm like, if you don't believe me, go speak to my customers. You can hear how much money they're making.
[00:04:11] Speaker A: That's really the best thing. When we were talking before the show, you were telling us that you have really only been at this for a few years now.
[00:04:17] Speaker C: Two years. It's really the hardest thing I've ever done in my life. I work seven days a week, but I love it. And I love it because it's mine. And the harder I work, the faster the business grows. But I will tell you, if you're not willing to do things that a lot of people would be scared to do, it might not be for you.
[00:04:33] Speaker A: Give me an example.
[00:04:33] Speaker C: I'll give you a great example. I was in Atlanta last week. I was supposed to leave on a Tuesday, and I ate something and I got very ill, so I had to reschedule meetings. But because of that, I got an email that day while I was recovering, where someone I've been looking to meet now for a long period of time said, hey, Matt, let's get together.
And this guy is a sales trainer for the industry. Very successful guy. And I'm like, you know, we can help one another out through synergies here, right? So they ended up going the next day, and I was literally there to convince a central station company to introduce me to their customer base. I met with the owner, and one of the things you really have to do is you have to leverage relationships with other companies and kind of hit your. Your caboose to them. Because if you try to do everything on your own without. I call it forced multiplication. Like partnering with other companies where their customers are going to be your customers. The amount of time it's going to take you to build your business. So it was a day trip, and I literally, when I got out of the airport, the plane was late. When it landed, we were on the tarmac. I had to run to my meeting, and the cab driver was like doing 100 miles an hour on the highway to get there. Because imagine I'm meeting this business owner who's setting aside time for me for the first time, and I'm late. That's a big no, no. So I was texting the guy who set it Up. And then on the way back, the plane was delayed like three times. So I didn't get home till like four in the morning. And I had to get up and train a client the next day remotely. And it doesn't matter how you feel. If you have an appointment with that client, you have to whatever has to be done. And a lot of people aren't just willing to do that.
[00:05:54] Speaker B: That is so true. The reliability and consistency in building a business is so important. And customers always do have to come first. I mean, they're not always right, but they have to come first. Right?
[00:06:04] Speaker C: You know, it's funny, you say that my customers aren't right. And I always say to them, if you could do this, you'd already be doing it. And my biggest challenge, it's like, oh, so and so is already doing this. I'm like, they're not. So as I said earlier, relationships are ongoing. So service agreement creates a set of standards, right? So without standards, how can you meet or exceed expectations? And that's why Fortune 500 companies and Fortune 1000 companies have customer experience, managers, chief customer officers. Because if everyone's selling the same widget, what differentiates you? What differentiates you is your customer experience, right? And customer touch points. That's one of the things I do. I'm a fractional chief experience officer for my customers because I'm like, how are your technicians interacting with people? Are you doing customer surveys? How do you know? How do you know this is the right technician for that customer? Say there's this abrasion going on, this friction in the service relationship. You don't know it. Just because you're running a business doesn't mean that you can't improve upon it or do better. And one of the first things I ask my customers, I'm like, how much are you charging per hour for your technicians? 150 an hour. I'm like, well, what's your burden rate? They're like, what does that mean? I'm like, what does it cost you per hour plus to roll your truck to get that dictionary out the door? And like you said earlier, most of them are losing money and they don't even know it. Right? So one of the first things I do is that I have them raise their rates through the roof. And then another thing it does, it weeds out customers that aren't profitable. And then it also forces people to transition from time and materials, which is not profitable, to service agreements.
[00:07:26] Speaker B: Right. I think Rob has a comment or question.
[00:07:28] Speaker C: Sure, please do.
[00:07:29] Speaker D: Yeah, I was just curious in Your dealing with your clients, whether or not you ever have in the back of your mind telling your clients what they want to hear versus what they need to hear.
[00:07:39] Speaker C: Never, never in a million years. Because I'm doing my customer a disservice. You know, I'm a trusted advisor. I'm there to help them make money. Like she said earlier. And a lot of businesses owners understand your job is to make people with money more money. If you can do that next, the world's your oyster. And that's what business is all about. And my customer pain is they can't do this on their own. And it's not easy. And you know, that's where my writing background come in. So when I do my training, I have like a 65 point PowerPoint slide that I created from scratch that I keep updating over and over and over. And the hardest part is it's not that I run out of information to put in it. I have something called the rule of five. I don't have more than five bullet points in each slide. Otherwise the customer, it's too much information to digest. And that's why I keep my training usually to no more than two hours a pop unless I'm traveling like to California where I'll do like two four hour sessions because I want the customer to implement what we train them on the next day. And then a lot of my customers now are ongoing me for hiring me for ongoing sales and operations support because their employees are not sticking to the script. And then I'm like, you're leaving money on the table and it's a lot of money. Like, for example, like a salesperson might be afraid of losing a sale because the customer doesn't want the service agreement because it's always at the time of sale. And I'm like, just don't uncheck that box. I'm like, the sale doesn't start till there's an objection. I gave you the ability to answer every objection because I've heard them all. Customer says this, you say this. And you know, it's funny. Marketing too. It's like to get the customer to buy the way you want them to buy. Because when they might be buying from you now might not be profitable, if that makes sense.
[00:09:04] Speaker D: Do you ever face pushback from your clients on your directions?
[00:09:08] Speaker C: No, actually I've had them fire employees who didn't get with the program.
[00:09:12] Speaker D: Okay.
[00:09:12] Speaker C: So, you know, they're investing in me and they understand this is the future of their business. And why I'm sure you guys Know what EBITDA is?
[00:09:18] Speaker D: Yeah.
[00:09:18] Speaker C: So investors don't buy stale customer lists. They buy streams of recurring revenue.
[00:09:22] Speaker A: Right.
[00:09:22] Speaker B: Can you. Not everybody listening will know EBITDA say what that is.
[00:09:26] Speaker C: Earnings before interest, tax, depreciation, and amortization. Yeah, I think I'm pretty close to that. Right? Yeah. I did not go to business school. I could barely use a calculator. I just use it as a talk track because I tell them, hey, you know, say you're doing 10 million a year. What is your company really worth? But if you're doing 10 million a year in RMR, a reoccurring monthly revenue, you get a 20x, a 28x multiplier. And that's what people buy. They buy contracts. They don't buy stale customer lists. They don't care what you've installed. And as soon as you understand that as a business owner, and that's why I said, I have two buckets, young customers and older customers eventually want to retire. And they know that if they have that additional RMR coming in, their business valuation goes through the roof. Right.
[00:10:07] Speaker A: So what do you see for the future of your company? How would you like to take it to the next level?
[00:10:12] Speaker C: So the next level is, and I didn't mention this yet, is I license my program to my customers. I own it is its proprietary. Right. And they have to sign two hefty ironclad nondeclosure agreements. And I say, hey, you know, you're sharing everything with me but your books. You wouldn't be sharing your proprietary info with your competitors. Right? I said, well, I don't want you doing the same thing to me. I will not work with someone who refuses to sign it. And no one's had a problem with it yet because they understand it. But I'm going to license this just like EOS Entrepreneurs optimization system, where I want to be able to empower other entrepreneurs to start a profitable business where they can help people make money.
[00:10:45] Speaker A: That sounds like a real plan.
[00:10:47] Speaker B: Matt Tamao. How do people find you?
[00:10:49] Speaker C: They go on LinkedIn. I post there all the time. This is Matthew Tomeo.
[00:10:53] Speaker B: Spell your last name.
[00:10:54] Speaker C: It's like tomato without the other T. T, O, M, A. Okay.
[00:10:57] Speaker A: That helps the second T, not the first.
[00:10:59] Speaker C: Yes, correct. Or then go to my website, SL advisors.net and you know one thing this has taught me? I need to use more social media. I do. And you know what I realized? It could be a lot of fun and perceptions, reality. And if you think it's fun, it's fun. And seeing how these people use it and how excited they are. And having a social media person here, you know, my wife's my social media person. It enables you to tell stories and connect with people on an emotional level because people buy emotionally and they justify it logically.
[00:11:24] Speaker A: Passage to Profit is a nationally syndicated radio show appearing in 38 markets across the United States. In addition, Passage to Profit has also been recently selected by Feedspot Podcasters Database as a top 10 entrepreneur interview podcast. Thank you to the P2P team, our producer Noah Fleischman and our program coordinator Alicia Morrissey, and our social media maven Carolina Tavares. Look for our podcast tomorrow anywhere you get your podcasts. Our podcast is ranked in the top 3% globally. You can also find us on Facebook, Instagram X and on our YouTube channel. And remember, while the information on this program is believed to be correct, never take a legal step without checking with your legal professional first. Gearhart Law is here for your patent, trademark and copyright needs. You can find
[email protected] and contact us for a free consultation. Take care everybody. Thanks for listening and we'll be back next week.
