Owned and Operated #121 - Getting Off The Fence and Into Growth with Cassi Niekamp

Time To Get Off the Fence.
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In this episode of Owned and Operated, John and Jack welcome back Cassi Niekamp to the show, a home service entrepreneur who has significantly grown her business in the fencing business. Cassi shares her experience acquiring a 39-year-old home service business in Columbus, Ohio, and transforming it from a small-scale operation with outdated practices into a successful company with a revenue of 3 million and aiming for 5 million.

Episode Hosts: 🎤
John Wilson: @WilsonCompanies on Twitter
Jack Carr: @TheHVACJack on TwitterCassi Niekamp: @cassiniekamp on Twitter

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John Wilson, CEO of Wilson Companies

Jack Carr, CEO of Rapid HVAC

Owned and Operated Episode #121 Transcript

John: I'm John Wilson. Welcome to Owned and Operated. Twice a week we talk about home service businesses and if you're a home service entrepreneur then this is going to be the show for you. We talk about our own business in residential plumbing, HVAC, and electric and we also talk about business models that we just find interesting.

John: Let's get into it.

John: Thanks for checking out Owned and Operated. Wherever it is that you listen to the show, if you could take a second and give us a five star review, it helps other people find our stuff on the internet. Welcome back. To owned and operated today. We have Cassie knee camp on with us today. Cassie. Welcome back to the show.

Cassi: Thanks for having me, John. Jack, good to see you.

John: Yeah, good to have you. This is gonna be good. You were on like, it was, we just re kicked the episode, but it was about two years, maybe three years ago. And so this has been, it's been fun to re listen to like my friends that I brought onto the show years ago and listen to their stories At the time and then just think about the conversations I'm I have with them now.

John: So this is going to be fun with you. Johnny Robinson was fun. Rich Jordan was fun. Mike Botkin was fun. Just holy smokes. A lot changed in three years. Yeah, so I'm looking forward to diving in. So to help set the stage if somebody didn't listen to that first one, I think we'll plug it somewhere in the notes, but if you could give us a little bit of a intro here and then we can start diving into the.

Cassi: Sure. A little intro on what I bought and where we operate. Okay. Yeah, give us an origin

John: story.

Cassi: We purchased a 39 year old business in Columbus, Ohio. It was situated geographically. Awesome. The owner was 72 and looking to retire. He was doing less than a million in yearly revenue, about 750, 000. He had a good mix of About 50 percent residential, 50 percent commercial, but ran off a fax machine.

Cassi: His, I still find his writing like tucked in closets or tucked in and his writing was so beautiful. So I loved, the way he did business and kind of the slower pace that he operated. But we have since. Incorporated some software and some processes and done away with the Vax machine. That was three years ago now.

John: And then what was team size today or what was team size back then?

Cassi: Team size. He had one office person, one sales, an office administrator, a sales person himself did quite a bit of the selling. And then I think five field guys.

John: Okay.

Cassi: So pretty modest.

John: Yeah. And then could you give us an idea of where it says today?

John: And then we're going to talk about. The journey.

Cassi: We have 15 team members today. Most of those are in the field. We have two full time sales person, people, myself, the office administrator. And then I hired an ops person middle of last year, which has been groundbreaking, breakingly amazing.

John: Like an ops, like manager.

Cassi: Yes.

John: Oh yeah. There you go. That sounds phenomenal.

Cassi: Yeah. Phenomenal.

John: Yeah, that sounds great. It's always women. Like the majority of our leadership team is women. And I don't often really think about that. And then occasionally people remind me of it and I'm just like, yeah, I don't know what to tell you.

John: They get it done.

Cassi: The attention to detail the, this woman is like white on rice and I remember the hiring process and it was between two wildly different individuals, but she, like I am thanking my lucky stars. She was the right, she has taken so much off my plate. She's fabulous.

John: Yeah. That's wonderful.

John: That sounds like a big, that sounds like a big move. And what was revenue today?

Cassi: We ended 2023 at 3 million and we're growing towards five this year. Yes. Let's go. Let's go.

John: All right. Across that five. That's cool. That's cool. So obviously the ops hire and I, you probably said this, but when did you buy it?

Cassi: Oh June, 2021.

John: Okay. So we are about to hit three years.

Cassi: Okay.

John: That's a lot. That's a lot in three years. And

Cassi: I had a baby. I would like to add that. You had

John: a baby. Yes, you should, you deserve to add that. Okay. All right. So there's a lot to unpack there. That's fun. As you, I don't know if you think about it this way, but sometimes I do as you're thinking past the past three years or over the past three years, I would say an ops hire is probably up there on the list, but what are the other big unlocks that you've seen?

Cassi: Like

John: when you think about the pivots, pivot

Cassi: number one was the software that we incorporated called job Nimbus. And so we set all of our salespeople. It's actually a traditionally a roofing software. I don't know if you've heard of it. I tried to go with service Titan, but they were like, we don't have a fencing solution.

Cassi: So at one of our trade shows, they There was this JobNimbus software, and so all of our guys, our foremen in the field, along with our salespeople, can take pre photos when they walk a job site, and then post photos when it's completed. All of our documentation is there. If you can imagine, John, when I started, there was a long table.

Cassi: And everybody's packet of information was on this table and heaven forbid, like a gust of wind take, that all information would be lost. That's what

John: our office looked like seven years ago too. It was, oh my gosh.

Cassi: And then I'll never forget the day where we ever like short material. So sometimes on site customers change a slight layout or we just miscalculated.

Cassi: We made an error. So I couldn't actually know what we ordered for that job because the foreman had the paperwork on site. So I didn't even have any record of it prior to the software. So it was a huge thing. So everything is in job Nimbus. It's a CRM tool and project management tool. That was a huge unlock.

Cassi: The second thing was probably having my baby. And my business advisor and I were joking about that a couple weeks ago because it was a year to the day. She was born literally a year from closing.

John: Oh my gosh. We have

Cassi: brand new people.

John: Yep.

Cassi: We, and I'm like, guys, we have literally a due date, a timeline for you to feel jelled in your role and to make decisions without me here.

Cassi: Ross was filling in, trying to work two to three hours in the morning just to handle like high level decisions. And. For the

John: listener, Ross is her husband.

Cassi: Yes. Ross is the husband. Yes. He's also a nonpaid consultant. Financial.

John: Great.

John: I love those.

Cassi: Yes. I love those. So anyways, he was coming in and trying to work his full time job.

Cassi: Support me in the middle of the night because Recovery was so bad I couldn't even sit up by myself. So he's at one point he had a melting point of I can't wake up with you in the middle of the night anymore. You're going to have to do this by yourself. So I thought, okay, we have reached our limit.

Cassi: So to wrap that in a bow, that was a huge unlock because people were forced to figure out their roles very quickly.

John: Yeah.

Cassi: Gosh, have you

John: retained all the people that figured out their roles really quickly?

Cassi: All except one that was actually a big reason our Q1 didn't get started off at the pace I had hoped for a sales perspective.

Cassi: Our sales individual who had been with us for two and a half years had resigned in in February, which was a big loss to us. He had seen us through a lot of big changes and big growth and yeah, we were sad to lose him, but he resigned in February.

John: Yeah, that's frustrating.

Cassi: Okay,

John: so yeah, I can definitely see, we tried to do, Jack, I don't know if you've ever had to do anything like that.

John: Ours wasn't a baby. But we've done something for four years now, where we leave town for two to four weeks. And, Each time helps a little bit, but I'm still pretty dialed in. So maybe it probably doesn't help as much as Hey, literally I can't cause I have a kid. I think the same still applies

Cassi: though.

Cassi: Like you're not there. It's not as easy to reach you. You need to make decisions. Same philosophy.

John: Yeah. How long were you out?

Cassi: Six weeks.

John: Okay. And then a long

Cassi: time. Yeah. And then she came to the business with me

John: for

Cassi: the rest of the four weeks. So we had a little office up here. We have an upstairs loft that we renovated and she hung out with mom and she was just a really chill baby.

Cassi: So that was helpful.

John: Yeah. That's neat. Yeah. That's awesome. I can, yeah, I can see that being obviously personally and professionally pivotal. That is. You're the only woman that I know. And I knew this at the time, like when you were pregnant, but I'm like, I don't know anyone else that's done that.

Cassi: I wouldn't say it was like part of our planning, we had tried for years for fertility and God's timing is funny.

Cassi: It's such a gift. Anybody whose parents know what a gift it is and you gotta just hang on and enjoy that gift when it comes. Yeah.

John: Yeah, that's awesome. And then

Cassi: the third one would be our ops manager because I used to do all the customer communication, like all the calling, the ordering, et cetera.

Cassi: And it's just too much for one person, given our growth. And so one of the big focuses last year in 2023 was margin and customer service and that customer service play. Was a big part of that. So yeah.

Jack: Yeah. So with this ops manager how did you find them? What was the, was just LinkedIn or indeed?

Jack: What was the methodology that behind that?

Cassi: Good old fashioned. Indeed.

Jack: There you go. That's huge. Cause a lot of times I think this is a big problem for a lot of small companies is their first big hire, which is one of your ops manager. And so pivotal. Yeah. Yeah. And life changing if it goes right and so terrible if it goes wrong.

Cassi: Exactly. Yeah. What

Jack: were some of the qualities that you saw in her that you were like, besides like attention to detail that you were, that you said, this is the one.

Cassi: Her reference check was like, damn. I got a soldier, like this. She had previously worked for a roofing company in Florida and her reference check was like, if you don't hire this woman, you need to send her back to Florida immediately.

Cassi: She needs to come back to work for us. Like she is just so phenomenal, loyal. Dedicated, punctual to the T. Everything you want an employee. She's just really wonderful. And I was, this year I was trying to give her a bonus. So we said, Hey, we'll bring you in at this salary and then we're going to find a metric, right?

Cassi: John you're winning by this metric. And I couldn't find a metric for her. And I'm like, I don't know what it is. Okay. I just want to give you this bonus. Okay. You're doing phenomenal. Let's continue on. She's one person within our company that I'm like, you don't have a metric, but I, we know you're winning.

Cassi: So we want to go ahead and increase your stress

Jack: level is your metric. However stressed is the more stress, the less money you receive.

Cassi: Yeah,

John: that's wonderful.

Cassi: Yeah.

John: Does she have a direct oversight over field or is this all office?

Cassi: The field will oftentimes tell her what to order. And that actually was, my guys in the field are phenomenal.

Cassi: There's some of I could talk about them for a long time. They're wonderful. But they don't love change

John: and they're

Cassi: young guys, but they don't love change. And so dealing with a new person, it probably took them a solid six to eight months to go to her instead of me. And I knew that would be the litmus test of when success started happening.

Cassi: Go to a lease, go to a lease. And so I had to redirect some things.

John: Yeah, that sounds huge. So what I just want to dive into this a little bit more. What are the day to day responsibilities?

Cassi: So she oversees all customer communication, all underground utility markings for our team, all scheduling, which underground utility markings are huge in our world because you can't dig without that.

Cassi: For instance, right before we popped on. I got notification that we hit a gas line somewhere. Not only is that wildly dangerous but it's highly disruptive. We had to make sure all of our oops documentation was in line. We have to call that in, etc. Then she does scheduling. We, There is, oh, there is not one week that goes perfect in scheduling.

Cassi: There's weather, there's a homeowner, there's a neighbor, there's a tree guy who didn't show up, ahead of us. It's just wild. So we're always redoing scheduling, making sure people are we're flexing and weaving with that. She's doing a lot of our certifications. So for larger, we're trying to go up market, which I'd love to talk to you a big deal.

Cassi: Focus for this year is going up, marketing, working with larger GCs. So we're having to do like more certifications such as drug free workplace certification. By the way, I've never drug tested once until this month. Getting into,

John: so

Cassi: far so good. So which a side note, it's legal now in Ohio.

Cassi: Marijuana is legal.

John: Yeah. We've always had, we've always had a philosophy, non handbook, that if we find weed, we don't care. It's, cause every state around us, it's legal. So it's if you go to Michigan and do something, it feels very weird to penalize that. It's super weird. Now granted, if I find like cocaine, like we're going to have an issue.

John: But like weed, we haven't had an issue with for years just because it's legal in half the states. So I don't, yeah, it's it's funky.

Cassi: And then when you test for that, if they did it last weekend versus this morning, there should be a different level. I don't even know how that'll work, but I'm on the same boat, John.

Cassi: And then okay. So drug free workplace policy, and then. Edge certified and then women business owner certified is also, you know what I'm saying?

John: So she

Cassi: keeps on tack of all of our insurance COIs licensing. And I think that about covers what she does.

John: Hey, so just give me your email.

Jack: So just give me your email.

John: Every Friday, we drop a newsletter from owned and operated called weekly insights. And inside that newsletter, we talk about our business. We talk about lessons learned. We talk about projects that we're working on. So go to owned and operated. com, enter your email and get some drops every Friday.

John: Yeah, that's fascinating. I think what's really interesting about I think about this a lot from the people that we've moved up over the years but like the best equipped people to run a future business or the ones inside the office, not inside the field. Cause they have a much more holistic picture of what's going on inside that business.

John: So Allie runs our plumbing department and she's, hugely successful at it. And Jen runs our HVAC department and she's hugely successful at it. And they both worked. Allie with us and Jen at a different company, but they were like the call center person or the office manager through dispatch through all these like different roles of the business.

John: And then because of that, they ended up understanding the business very well. And we're able to lead it more effectively. So it makes sense. Yeah. Go ahead. You

Cassi: really see how it all comes together, why certain things are so important. Yeah, that's crucial.

John: Yeah. Yeah. So walk, like I was going to ask about this anyways, but I think one of the things that was probably Big for you.

John: And you didn't say it is like customer segmentation, how you think about it. Cause you seem to be more aligned. Yeah, there we go. You can hold on to that one. But you're obviously thinking about going up market. So you're seeing an opportunity there. And I think. When we talked last, you were really like really focused on commercial, but I don't remember what the percentage was at the time, but I think you've gone deeper commercial since then.

John: So how about you walk us through your customer mix and like why you're opting to go bigger?

Cassi: Cool. I think that there is a

John: I love it. Her phone's ringing in the background, which means that's your winning. Money's ringing. Sorry,

Cassi: listeners. Okay. So we have a When we joined, it was a 50 50 split pretty quickly.

Cassi: I saw that residential is very challenging and my hat is off to you. Plumbing and electric people who enter into homes like what a wild. What a wild turn of events. Yes,

John: it is. We answer. Yes. Every day.

Cassi: I have just been really shocked and dismayed about the fickleness of customer customers on the residential side.

Cassi: Not that we don't have bumps and bruises and customer interactions that don't go according to plan on commercial side. But there is just a real difference. And so pretty quickly I saw, Hey, margins are less and residential and my pain tolerance is more.

Cassi: So why am I going after this now? The real sincere answer is cashflow.

Cassi: Residential pays very quickly. It has taken us last year, we ended up about 70 percent commercial industrial. And this year I would love to keep the same mix. We are starting to, okay, this is actually going to be interesting for you, John. So up until this December, so December, 2023, I had been head down focused on growing the business and did not get out, shake hands, kiss babies for general contractors.

Cassi: To say we are the best kept secret in Columbus and I would like to bid on your projects. I started doing that in December and like worlds opened up and they said things like, we've never heard of you and we've been in business for 40 years. This will be 41 years in Columbus. We've never heard of you. We have no track record with you.

Cassi: And it is truly like there are four or five. Max old school fencing contractors in Columbus who all of the commercial people use. And I'm just like, hands down, like we are the better option. Like we are, we deserve a seat at the table. We deserve a seat. Like we have integrity. We do your project, right? We do make mistakes, but we will work our little tails off to fix them.

Cassi: I know that we deserve that seat at the table and I'm now going after it because I'm so secure in our operations. I think it would have been premature for me to do this sooner. The argument could be made like, why didn't you do that a year sooner? And I don't think we would have been ready.

Cassi: Fair

John: enough. I can definitely understand that. The. I think what I would love to dive into is like, why specifically that segment of the market? So like when I think of GCs, so I'm going to tell you a story from my day today. Let's hear it. Yeah. So I walk over into Brandon's office and occasionally I'm clean, no drug use over here.

John: I don't, I stopped drinking, a little over a year ago. Me too. It's great. It has been good. Mine's three weeks. Okay, yeah, I'm about I think I'm 15 or 16 months in. And so I stopped drinking. Occasionally, around the office, because people know me here, I feel like I have to really explain this before I say what I'm about to say.

John: I will crack just a wild drug reference. Hey, the day's going great. Let's go snort some coke or something. Just to keep things

Cassi: lively? Really?

John: Just to keep things, just, I don't know. Keep them on their toes. Certified good vibes. That's my job at the office. So anyway, so I cracked that joke and Brandon's Hey, funny, you should mention that.

John: And I'm like, where is this going? He pulls out a letter. The one of our customers who is a GC just went bankrupt after going to Thailand and going on a Coke bender for Either three or four weeks. And that that really dots the eye on like general contractors in my mind. Cause we've had nothing but bad experience.

John: So I just think it's this is a comical one, but I'm like, that's an interesting, like customer type to target. So like, how do you protect yourself? How are you thinking about the opportunity? How do you get cashflow right? And why is that the one?

Cassi: I think when I talk about general contractors, like these are multi million, multi billion dollar operations.

Cassi: This is not like a guy in his truck who does it, and you're like a little sideways. So I don't know if any of my GCs are going on coke vendors. I hope not.

John: We have to go to the courthouse in two weeks to like, try to get some portion of our money.

Cassi: Oh, geez. Yeah. That's not good. It's actually very hot topic for me because before we bought the business the former owner would ask for a 200 deposit for everything.

Cassi: And knee project. So you have a 14, 000 project, you put down 200. You have a 25, 000 project. You put down 200. And what was very eyeopening is like my first 60 days here, like two large projects backed out. Like it's just not enough skin in the game to feel committed or, what have you. So we, I remember the time we moved towards 30 percent deposit.

Cassi: Then I got brave to go to 50 percent and that's where we've lived since two and a half years. And that is really important for our business because what you have is that 50 percent deposit doesn't actually pay for the materials. I've got a net 30 on there. don't need that payment, then I actually need it for outstanding AR on jobs.

Cassi: We just finished that. I haven't gotten paid on yet. So it's a cash cycle thing that I'm actually solving. So hypothetically this just happened. So it's top of mind for me. And at 6 30 AM Pacific time, my dear business advisor, who is in Pase Robles, And it's beautiful. There's like vineyards behind her and the sun is rising.

Cassi: We had a 622, 000 project. We got awarded. There were two separate ones. So one is 300 ones, three and some change, they overlap. So it's like a total of 40 working days. So I'm not going to get paid on the first one because they do not offer any deposits before the second one starts. And I created this beautiful spreadsheet of our cashflow projections and what she gave me a nine out of 10 on.

Cassi: And I was fully prepared for her to say, do not do this. You need to run like, this is not a good idea to do both projects in this timeframe. After seeing the cashflow scenario, she was like, here are your risks. Okay. You think you can mitigate that? I think we should do it. Cashflow is a big deal.

Cassi: And I've asked for on these two specific projects, I've asked for 60 day net terms on my vendors. I'm going to have to dip into my line of credit more than I want. It's the cost of growth that I think is worth it. And there's a lot of complexities like complex billing software, certified payroll, there's more that is asked of me.

John: Yeah. There's a lot going on in that. Yeah. We did a 600, 000 product or five 50 maybe in the tail end of 22. And it took us most of the way through 23. And for us, it really we went the, our business is just the opposite of yours. We're like, we're not built to do this. Like we're built to change toilets.

John: It was a whole new world. Like we had no idea. We really learned a lot. It was interesting. A lot of different softwares, a lot of different terms we'd never heard of.

Cassi: Yes.

John: Yeah.

Cassi: And that's one thing, so my dad's been in the construction industry for years. Last week I called him in tears about it.

Cassi: I'm like, I want to do this project. I don't think I can. And I'm excited about it though. Like I'm excited if this goes well and I execute it the way I think we will. Or. No, we have to, then we are going to be in a great position to continue these, it's like the flywheel effect. You get a couple under your belt, four or five, and then you're set up differently to go then approach more mid market upmarket deals.

John: Yeah. And is this like a new bid? Like a new project being built, ground up, or is this rehab or what are the types of projects that you're getting into?

Cassi: It's actually the Ohio State Fairgrounds. So it's completely renovated. Yeah. Clearing out a fence line. Installing 10 foot tall plus one foot of barbed wire chain link.

Cassi: This certain GC doesn't allow ladders, so we have to have special equipment, boom lifts. It's quite interesting. And I think that's what excites me too, is like when our guys do a residential fence, there is a kind of a, okay, you've seen one aluminum fence, you've seen 30, but at a, at each kind of larger project, it's like we're building a construction company.

Cassi: Like we are meaningful. Your kids go to the Ohio state fair, they will see the work that you do, and that's cool to see different spots around town, new developments that you're have a hand in. That's really meaningful and fun.

John: Yeah, I would imagine. I would imagine that would be fun.

Jack: Yeah. I think you mentioned that you were obviously a woman run business and you're trying to get these larger projects. Have you ever thought about moving into government bids or government projects?

Cassi: Oh, lordy. I won one and it ha it was supposed to be performed last April.

Cassi: I'm really hoping. It doesn't go through. It's so tough through documentation. I don't even think it's something I want to touch. Honestly, we accidentally got a bid and I'm. Holding my breath, hoping we don't install it.

John: Yeah. John, have you ever done that over a year? No, but like my life has gone the exact opposite.

John: So I think the construction, I think this is a personality thing. So I'm going to, I'm going to dive

Cassi: deeper, John, deeper. I

John: think this is a personality thing. So I'll give you some businesses that I personally struggle with. So like we own some rental properties. I am not the person to like really touch those rental properties because you have a fixed amount.

John: And you have to maximize every penny. And I'm not very good at that. What I'm really good at is like exponentially growing the fixed amount. So I think that's why I like the residential so much. And we've really struggled with new construction for the same reason. Like all I can think about is maximizing top and maximizing gross margin and the whole company is built around that to be a marketing machine and a customer service machine so that we can continue to just expand and expand and expand and construction is almost like the complete opposite of that. So we struggle with that because it's just it's not me.

John: And it's not how we design the business. So it's not really our culture to do that. Like our culture is to upsell and to offer options and to, to execute work well, but yeah, it's just, it's totally different. And I think a lot of that is my personality. Like when I think about, cause obviously people do really successful work in construction and new construction and things that I don't like, but those are very The people that do well in those I'm thinking specifically of like track home plumbing.

John: So you're going to build a plumbing company and you're going to go drop plumbing into a neighborhood that has 50 or 100 new homes, and they're mostly the same. And you're a machine, right? You know down to the elbow the fittings that are going to go in that home. And so like you just build it like this, assembly line of plumbing and I'm just not wired like that way.

John: I'm just, I'm, I just wouldn't win in that game. Like they would beat me.

Cassi: Because you think it's boring or because you can't make money because their price so low? What is a volume game? No,

John: they make money. Because their overhead is so low, like their overhead is so much lower than mine because they don't need marketing and they don't need call center.

John: They need like an office admin and like some project managers. So like they make good money. Like we've looked at a lot of these companies, like new construction companies that are like 20 to 30%. But when I look into them, I'm Like, I don't think it would fit the way that I want to do stuff. So one, I'm like, I like to work on new things, so I just wouldn't be good at maximizing this neighborhood or whatever.

John: Thanks for tuning in to owned and operated. Make sure you tune in to the second half of our talk with Cassie on Thursday. Thanks for tuning in to owned and operated. The podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out.

John: You can find me on Twitter at Wilson companies. I'll see you next time.

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