Austin Gray: I’m so excited about this! I was actually just about to do a tweet here and see if anybody had any specific questions.

Nikola: Yeah, go ahead. I actually just listened to the last episode, which was awesome. What an impressive young lad!

Austin Gray: Yeah, he's a baller, man. Just, it’s so inspiring to see the wide range of people that are attacking the industry for sure. What is your handle?

Nikola: Oh yeah, there we go! So you go by Nick, right?

Austin Gray: Yeah, my full name is Nikola. So my dad actually immigrated to Canada when he was 134. He grew up in Croatia, and so definitely have the blue-collar genes in our family, that’s for sure.

Austin Gray: That’s awesome! What’s in this tweet right now?

Nikola: I want to do this like, “Hey, we're going live on the podcast episode,” and then I’ll keep it open in another tab and just see if anybody has any specific questions.

Austin Gray: Love that! Dude, you’ve grown this business fast, man! You are growing it fast!

Nikola: Yeah, it's been crazy. Just a little bit of context, obviously, you know I’ve been an entrepreneur for the last 13 years, and for the last maybe six or seven I had seen an opportunity in kind of blue-collar spaces, thinking, you know, a lot of these are under-marketed and under-operated from a customer experience perspective.

Nikola: So I took a few kicks at the can on starting some things maybe six or seven years ago. My brother-in-law and I started a company called The Art of Rock. It was a hardscaping company, backyard landscaping. He had done it for many years and had become quite talented at it.

Nikola: In a week and a half, we had about 180 grand worth of quotes closed from launch to 180 grand. Started out of the gates so hot, but then learned some things pretty quickly. Unfortunately, he just wasn’t able to go full-time, and just delivering the type of service and quality needed wouldn’t have been possible on a part-time basis.

Nikola: So I learned really quickly, and fast forward six years, my childhood best buddy—who has been a business broker for maybe four or five years now—came over to a partner's place, and we were all just shooting the breeze a little bit. He mentioned, “Oh, you know I have this business you guys might be interested in. It’s a little bit smaller, but I’ve been working with this OWNR OPS. He’s a great guy. From what I see, the business has a lot of potential."

Nikola: It had only done, you know, on its best year, 420. It was really unique because the OWNR OPS actually ran a landscaping company in parallel, so he would basically use the same crew and machinery and flip-flop between basement waterproofing and backyard landscaping.

Nikola: Which was interesting and presented unique challenges for us because he relied on that side of the business to keep the lights on and keep the crew of four working all the time. What he also did was shut down in November for four or five months until March.

Nikola: So it’s one of these businesses where we were coming into it not knowing necessarily if the basement waterproofing could sustain the core four guys as much as both businesses did. And then second, having no idea what December through March would look like.

Nikola: So, flying blind a little bit. But we met the OWNR OPS—a great dude—and it took us about 50 days from meeting the OWNR OPS to closing.

Austin Gray: That's incredible! Okay, you mentioned you're an agency founder, right?

Nikola: Yeah! So out of university, actually, in my first year, my dad eventually got into kind of the financial services world and estate planning. That was always a potential path for me, but I kind of had the itch, you know, at 19. I was like, “I want to get started.”

Nikola: I want to get started! He’s like, “No degree, you know, no life experience. It’s very hard to bring you into the financial world when you graduate. You’ll have a place here." So I figured, okay, I want to find something to kind of get my feet wet.

Nikola: I was playing football at the time for the university I attended, so that was about 40 hours a week plus school. But I just knew, you know, I wanted to get something done. So with three buddies, we co-founded a video production agency just literally out of my partner’s mom's basement.

Nikola: This was 2009-2010, so video for business was super early. We were still kind of in the first few years convincing people why video would be an important part of the marketing suite for all different types of businesses and organizations.

Nikola: Sure enough, we were really on to something. So that business is still running to this day. I’m not operationally involved in the business on a day-to-day basis, but I still have my co-founders in that business. They run it, and we meet on a monthly basis to kind of check in.

Austin Gray: Incredible! What’s the name of that business?

Nikola: It’s called Waterbridge Creative. So it's been going since 2010. We’ve worked with all different types of clients: government agencies, big banks, done stuff for Burton, done stuff for all different types of businesses along the way.

Nikola: We ended up doing other things, you know, “Can you do video? Can you do websites? Can you do e-commerce?” Over time, we learned quite a bit. We’re in Ottawa, which is actually where Shopify was founded. So, for lack of a better term, we were pretty close to the mothership. We got heavily involved in the e-commerce space for quite a few years there as well.

Austin Gray: Wow, incredible! Now, okay, so let's go back to you buying this business. You closed in 50 days. You must have had some sort of conviction that you could buy a business in the blue-collar trades or services and, with what you've learned from entrepreneurship up to this point, you knew you could grow this business. What was that conviction early on?

Nikola: So it was two parts. One, my partner is an awesome dude. He’s been a good friend of mine for the better part of seven or eight years. He’s a little bit older than I am; I'm 33, and he’s I think 38 or 39, so just a little bit ahead.

Nikola: But he’s a CPA by trade, so obviously a really talented individual. He had come from the startup world and raised hundreds of millions of dollars, private equity, managed funds, and done all kinds of pretty extensive due diligence that would make this due diligence seem really small by comparison.

Nikola: So he was kind of our secret weapon when it came to this. Now we both learned that due diligence for small business is very different than due diligence for big business, right? Small businesses usually operate on seller discretionary earnings.

Nikola: So what that looks like, understanding what we can peel back, what’ll come back into our pocket, that kind of thing was a little bit unique for him. But, you know, based on his ability to really understand things, his due diligence capacity, his affinity with numbers, he was really well positioned to help do that.

Nikola: Where I kind of filled the gaps was just on the marketing side, the operational side, the kind of human management side of things, the HR side of things. Together, we formed this really unique team where he kind of takes care of a lot of the back-office commercial facilities, making sure all our equipment, inventory, all that kind of stuff is in order.

Nikola: Whereas I’m a little bit more on the day-to-day. I deal with our employees and customers, all of the quotes, etc. So we balance each other out really well. Honestly, I would say after probably 30 days, we knew, okay, we’re going to do this. We just need to iron out some semantics.

Nikola: We were supposed to close at the end of April, but we realized if we closed at the end of April, we’d miss what could be a really big month in our industry when the snow melts. So we asked the OWNR OPS, “Hey, can we fast-track this? We’d like to close at the end of March.” And sure enough, he was more than willing.

Nikola: The business had been on the market for two years by the time he met us, so by this time, he was really motivated to sell, and he could tell we were serious. I remember reading that the business was at like 420K of revenue, right?

Austin Gray: Right.

Nikola: Yeah, which included 50K in cash, which he took in the business. So to us, you know, it can be hard to account for, but in good faith, we credited him with that 50K. So it was really 370 plus the 50 in cash, so 420 was his last year, and also his best year.

Austin Gray: Can you take us through the deal structure?

Nikola: Absolutely! So we obviously didn’t want to put a lot of money down. The more money down, the more risk. Another thing we knew was that he was at a point where he was willing to shut down the business. He had been on this business sale rodeo for the better part of two years, and no one really too serious had come to him.

Nikola: So he was really motivated, and he could tell we were the guys that could take it somewhere. So how it ended up working is we put a little less than 10% down. We put 25K down. We agreed on a 280K valuation, and he would finance the balance on what works out to being like a 42-month term.

Nikola: So we had a six-month no payment, which is up now obviously, and then we had two promissory notes: a 12-month and a 24-month. So it works out to six months with no payment followed by a 12-month term at 8% and a 24-month term at 8%. So effectively, we’re paying for the business over about three and a half years.

Austin Gray: And when you say 8%, that’s interest, right?

Nikola: Exactly! Three years ago, that may have been expensive, but today it actually feels pretty good.

Austin Gray: So you've got two different notes there: one 12-month for a specific amount and one 24-month after that.

Nikola: Exactly! For us, it made complete sense, especially with our belief in our ability to grow the business. The OWNR OPS is willing to finance a vast majority of it; we’ll put the 25K down. Once we own the business, there’s cash in the business. We’re able to kind of pull that out.

Nikola: So we were able to actually pull that out three or four weeks after we acquired the business. Effectively, we’re 0% down, but we have all the risk.

Austin Gray: Now, you set it up in two different loans because of...?

Nikola: I'm actually not confident enough to speak to the exact details on why my partner wanted to do it with the two promissory notes, but I think he just wanted to break it up to keep it as simple as possible versus having kind of that extended one. I think there’s a half percent increase on the back end if I’m not mistaken, but I know six months no payment, a 12, and a 24 is how it’s structured.

Nikola: The first 12 months—like is the way the amortization schedule is set up—like that’s a lower monthly payment for that?

Nikola: Actually, we do quarterly payments! So, yeah, every quarter we cut him a big old check. What we also did was offer him an opportunity to keep quoting for a sales percentage. He wants to keep busy, just doesn’t want to be too involved. He’s in his mid to late 70s, so he wants to remove himself from the day-to-day, but he doesn’t mind being on the road a couple days a week.

Austin Gray: All right, so we've got the deal structure in place. Now the fun part begins! Like, I’ve been seeing your tweets; you’re generating some revenue right out the gate. What the heck are you doing?

Nikola: So honestly, the craziest part is, you know, learning the business has been definitely a curve, right? I kind of grew up working in trades businesses in high school, like at a couple different landscaping jobs. I would do odd jobs and that kind of stuff, but I wouldn’t consider myself a tradesman by any means, right? I’m on site with the team a couple times a month; a lot of my work is constantly calling clients, setting up calls, scheduling, and doing all that kind of stuff.

Nikola: So for us, the big thing out of the gate was really we made two changes. One is we feverishly attacked the pipeline. We're answering within minutes—seconds sometimes. We’re picking up the phone, seeing them for quotes really quickly, and turning around quotes really quickly.

Nikola: I had a client tell me last week she only got a reply from one of our competitors a week after we had already completed the job. It took a competitor four and a half weeks to make the first reply, and we had already quoted one, completed, and received a review from that client.

Nikola: So what we really did, was just obsess over that pipeline. That’s something the old OWNR OPS just didn’t do—more so send off the quote, and if he hears from them again, great, if not, oh, they’re not interested.

Nikola: A lot of the time, it really comes down to just making them feel more comfortable and helping them understand what the service entails and what you are doing for them.

Nikola: What’s really interesting for us is that we’re in a needs-based business. You know, you’ve got two inches of water in your basement. It’s not necessarily perceived in the same way as a bathroom you might want to renovate or a kitchen you might want to redo.

Nikola: We’re very much in a space where people are stressed. There are added health risks when your basement is wet, so it’s just a compounding kind of stressful issue for these clients. Being in the needs space was really big for us.

Nikola: The second thing we did was that we started using Jobber literally out of the gate. We had Jobber on day one. It helped us create that one source of truth. It helped inform our employees right before us; they were going off what they’d hear from the OWNR OPS that morning at the yard.

Nikola: This was a way to keep our team informed of what’s coming. You know, let’s not show up and figure it out today; they’re informed well ahead of these projects. In fact, as soon as they’re closed, the team is informed of the project and all the details.

Austin Gray: Did this business already have inbound leads?

Nikola: So it had legacy—it was founded in 2008, right? It was about a 16-year-old business when we bought it. Although when we bought it, there was nothing booked, so zero projects were booked.

Nikola: Another thing that the old OWNR OPS kind of neglected or didn’t care about as much was the servicing aspect. We offer a lifetime warranty on our services—our system is sureproof.

Nikola: But in order to maintain that warranty, they need to service their sump pumps with us once a year, right? It’s the only way we can ensure that the system will be effective because if it’s the single point of failure and no one serviced it, ultimately someone’s got to be liable for that.

Nikola: So that’s one thing that the OWNR OPS never really cared too much about—kind of hunting down those servicing opportunities. For us, that was another big thing: going through literally boxes of paper. Nothing was digitized, so we’re going through boxes of paper, digitizing old clients, calling them, “Hey, we’re digitizing our records. Can you remind us how many pumps you have? When was the last time you got serviced?”

Nikola: So it’s been a bit of a slog to kind of bring it into this decade, but it’s been really good so far.

Austin Gray: That is awesome! I remember when my business partner and I bought our first business, we did the same exact thing. We were like, “This piece is so fun! Let’s get old records and see what sort of opportunities this is going to bring up.”

Austin Gray: So my question for you on that service side: Is that a recurring revenue stream right there for you guys?

Nikola: It is! So right now, we price them as one-offs, and that’s something we want to work towards—maybe getting our clients just on a subscription and making it a little bit more predictable.

Nikola: We charge 395 plus tax a year to service these pumps, and the tricky part about them is that our geographic area is kind of so wide and far that we’ll sometimes go jobs two hours away. So it wouldn’t make sense to go service a single pump two hours away.

Nikola: So we get into this scheduling matrix where we have to stack services in the same area on the same day, but also do that at a time when we’re not busy taking on larger projects where our team is a little bit more occupied.

Nikola: So that part is really tricky, but I think over the next year or two, we’ll get to a point where we have probably 150 to 200 clients who are servicing with us on an annual basis.

Austin Gray: That’s so cool! The opportunities that are there because you have a one-time in—the repair fee, I guess—is the best way to put it.

Nikola: Yep! So it could be kind of one of three things: our core work—on the lower end we have, you know, we’ll come in and fix a wall crack or a number of wall cracks. That’s our base fix.

Nikola: Then we have what’s called an encapsulation—using a wall wrap, it’s an antimicrobial, antifungal wall wrap where we kind of wrap the basement. It looks like something out of Dexter almost; it’s literally all white, fully clean, fully dry.

Nikola: And then kind of our big system—our patented system—is like, think of it as a water. It’s literally called the WaterTrek system. We take the jackhammer, we core out maybe, you know, if it’s rock or stone, depending on how hard the boys work.

Nikola: But we basically dig a trench, drop our track in there, and the track feeds to the pump, which discharges out of the house. Through the process, we’re able to catch every single drop of water and keep the basement 100% dry. That’s how we’re able to fully warranty all our work.

Nikola: Those are kind of the three service level buckets, the full system obviously being the larger fix, if you will.

Austin Gray: What’s the average ticket job size?

Nikola: If you look at my Twitter, I’ve been updating—I’ve done two months of updates, April, and May. You’ll see I think 15 or 17 jobs in those months, but it brings down the average because I’m counting service jobs in that average, which are only $400 tickets.

Nikola: But you know, our biggest job has been 70K; we’ve had a couple 50Ks. I would say the average is probably around 15 to 20. That’s something we’ll be looking at once we hit our 12-month mark—just breaking down all the services, how many of this, how many of that, what’s the average here, what’s the average there.

Nikola: But I would suspect probably around 15 grand or so.

Austin Gray: Nice! But definitely above 10K?

Nikola: Oh yeah, definitely! And again, it looks lower on Twitter, but that’s because I have a handful of jobs at $400 at least in each month. Whereas, you know, last week we did a two-day job for 22 grand.

Nikola: We aim for around 7,500 a day as kind of our sweet spot.

Austin Gray: And how big is your crew size?

Nikola: Four. So that was one of the biggest things for us, especially with the nuances of like, okay, we’re shutting down the landscaping business. How are we going to keep these guys busy enough? These are the core guys who have been with the team.

Nikola: Our foreman has been with the old OWNR OPS—he’s a Scottish fellow—awesome man. He’s been with the old OWNR OPS since before he even founded this business. He’s been around for 16 plus years.

Nikola: He’s seen everything under the sun; he was our true key man. There are three other guys—two of them had been there over eight years, and the last guy had been there for I think one and a half, two, and he was the old OWNR OPS's nephew.

Nikola: The interesting part is the entire team is quite a bit older than me, so that was an interesting dynamic coming into this, understanding what motivates these guys and how we can do our best to retain them and create that mutual respect.

Nikola: The old OWNR OPS was definitely a my-way-or-the-highway kind of guy. I think giving them that space, you know, within reason, has been really good for our relationships. We gave everyone raises, got them phones so they could do everything on Jobber, and we got our foreman a truck.

Nikola: We do a quarterly profit share with these four key guys. We want to incentivize them, you know, a little bit of agency theory; we’re all working towards the same goal. So we really flipped it on its head in terms of the relationship between the company and these employees and what they were used to.

Nikola: I think they were really grateful for that, and had we not done that, I have a feeling we may have lost one or two just because there were a few—notably September, for example—was our worst month yet.

Nikola: That was essentially a quiet month, so we couldn’t guarantee these guys hours at the time. That was a pivot point for us. Up until then, all four guys had been on hourly. At that point, we put two guys on salary, locked them in, and we’ve since locked the other two guys on a part-time salary just so they can continue to maintain hours regardless if we have a quiet week or not.

Austin Gray: Can you share your profit bonus structure?

Nikola: We give 1.5 to 2% to the foreman, 1.5 to two other guys, and one to the last guy. This is on a quarterly basis. We don’t want to lose these guys; they are super key.

Nikola: This is really grueling work—it’s hard, dusty, musty work. Sometimes you’re literally on your knees or on your belly all day long. There are different issues that can occur—all different types of stuff.

Nikola: So it was really important for us to show these guys upside in a place where they weren’t shown upside in the past. The profit share definitely helped that for sure.

Austin Gray: That’s great! Okay, so you attacked the pipeline, axed landscaping, and went all in on this foundation waterproofing. You’ve put up some big numbers recently—big months! What have been the key drivers to that?

Nikola: First and foremost, I don’t want to discount that there’s a level of weather dependency to this business, right? When it rains, we get calls every single time. No matter what, if it’s a dryer period, we’ll get fewer calls; if it’s more frozen, we’ll get a few less calls.

Nikola: That’s why certain times in the summer or times like now—even if they do have issues, they may not see it because everything’s frozen—that can be difficult. So I don’t want to discount the fact that last winter we had a record winter in our area from a snowfall perspective. It was an obscene amount of snow, so the melt was insane.

Nikola: That’s one thing. Second, we did start Google AdWords, and we got set up with LSA. That’s been really, really good to us. We spent about a thousand a month; it’s nothing crazy. We’ll be transitioning that, I think, into the organic side of things this coming year because that’s something I really want to focus on.

Nikola: I’ve picked up some great tips from some of your past episodes that have been really awesome, so I really want to leverage organic SEO. But really, it’s been about a thousand bucks a month on Google AdWords, and just picking up the phone right away—every time; like, if I see something come in, I’m calling them, texting them, emailing them, literally within minutes.

Nikola: They noticed that, you know, we went from three reviews when we bought the business—I think three or maybe four—and we’re at like 49 now. So I’ve been really aggressive on that, and if you read through our reviews, I get mentioned by name a lot.

Nikola: A lot of the time, it’s like, “I don’t know how he answered so fast!” One guy was like, “I thought it was an auto-reply. It was like 10:30 on a Monday.” But if I see it come through, of course I’m going to answer right.

Nikola: I’ll answer right away because, again, we’re in a needs-based business, and people want to feel like they’re being taken care of. If you don’t answer for days or in some cases weeks, they won’t take you seriously.

Austin Gray: It’s so awesome! Like whenever you get the “Oh my gosh, that was fast!” you're like, “Yeah, we’re professionals!”

Nikola: Literally! It’s the best feeling, you know—seeing reviews. I’m giddy for reviews! I love when a project goes really well. I’m like, “Okay, now it’s my time to solicit this review and try and get the best out of this review!” Because you can’t write it yourself.

Nikola: You know what you’d hope they would say, and you can maybe plant little seeds, but ultimately it’s up to them to write it. When I see, “Oh, the OWNR OPS, Nick, communicated so fast! He replied within minutes!” It’s numerous times now.

Nikola: That shows really well especially when people see our reviews and then they contact us, and they have the same experience. It just creates a consistency for prospects. I think I would be shocked if that wasn’t helping us convert. We convert probably around, I’d say close to 50% of our quotes.

Austin Gray: Wow, that’s incredible! So far, I mean, there you have it! For those of you who are listening, take notes on what Nick is saying because this stuff works. In a world where people are either—I feel like it’s like one of two things—right now, the successful businesses in my area, in most local markets, are held by people who are 60, 65, 70 years old, and they get work simply by word of mouth because they have delivered a great service day in, day out.

Austin Gray: But oftentimes, that OWNR OPS is still in the field, and they don’t get back to customers right away. They have the mindset that, “Our team is busy; we have more work than we need right now. I’ll call that customer whenever it’s convenient for me.”

Austin Gray: As a new business or as somebody taking over a business, if you just answer your phone quickly and get them a quote, it pays off. I mean, listen to what Nick’s saying—he’s closing 50% of these leads!

Austin Gray: The second thing that I see a lot—and you’ve kind of come from, you know, the tech world or video marketing world—you’re familiar with the concept of deep work, right?

Nikola: Yep!

Austin Gray: A lot of people have read that book, especially in tech or the digital world, and a lot of people are putting their phone on “Do Not Disturb,” getting in the zone, doing deep sort of writing work or whatever that may be.

Austin Gray: But the reality is in this service business, somebody has to be quick on the phones. Until you find that someone to be as aggressive as you will be as the OWNR OPS, you and I share this belief. I’m filling this role in our business right now when I have the Google My Business profile directed straight to my cell phone.

Austin Gray: When I get a call from an unknown number, I’m answering every single time—in seconds! You know, actually my partner and I—the same partner—have a couple of Airbnbs in a ski town about an hour north of here, and we’ve done pretty well over the last few years.

Austin Gray: You know, super host, five-star rating, over 100 reviews—done really well! These are luxury cottages that sleep 12 and 16. But it’s part of kind of what trained me for this because when you’re a host, there’s no getting back in a couple hours. If that happens, A, they’ve already booked elsewhere, and if they’re staying with you and it takes you a couple of hours to reply, that’s not good!

Austin Gray: The likelihood is they’re asking you about something or they have an issue, and if you’re not quick as hell, you’ve lost them! All of a sudden you’re at risk.

Austin Gray: In that world, the reviews are even more pertinent to success because a four-star can crush a listing almost single-handedly. So that part was big in training for me, and, you know, I do a lot of the marketing work, write some of the blogs, direct a lot of it.

Austin Gray: But if I was to do deep work for two, three hours, and someone contacted me in the first minute, I’m now replying three hours later than I would have otherwise. So hearing that ping, it’s like, “Okay, I got to get after this no matter what I’m doing.” That comes first because then the client feels taken care of.

Nikola: Man, it’s so awesome! I resonate so much with your thought process and your value. I know you’ve been following my journey too and engaging and whatnot. You know that I’m more of the start-from-the-ground-up opportunity, but I see you as someone who shares that same start-from-the-ground-up mentality even though you bought a business that was already existing. It had a crew in place.

Nikola: I have so much respect for the approach you’re taking to this. What are your goals with the business? Where do you want to take it?

Nikola: That’s a great question, Austin! So, you know, first and foremost, having a lot of fun. I definitely am a build-from-the-ground-up person. I have a few successes and many failures in all different types of businesses.

Nikola: They’ve all been from the ground up, and so I’ve learned a ton, uh, from sticking the shovel in the ground with the first stroke, if you will. So this one has definitely been different, although my past life has brought a ton of advantages to understanding how to build and grow this business.

Nikola: So for us, I think you know growth is inevitable. It’s just how much can we grow, and how quickly can we grow, and how can we maintain employee happiness. Beyond that, scale past this current crew.

Nikola: So this current crew, if we added, you know, a fifth guy, we suspect we could probably do 1.5 to 1.7 with that single crew. So that’s really powerful; we have some room to grow there.

Nikola: After we finish this first 12 months, we probably break a million, and then we’ll be looking at another 50% growth. We think we can get there and maintain it with the crew. After that is when we’ll need to kind of, you know, add that second crew.

Nikola: I’m sure you know these phases of growth come with different challenges and different burdens and different types of commitments. The next step is that 1.5 to 1.7 milestone, and then understanding what it’s going to take to go to three and a half, four, like double the business again—after four or five-exing it.

Nikola: What’s it going to take to double it financially, emotionally, time commitment-wise? What does that scaling actually look like? Understand that here’s how we go from 1.4 to three or four. We’re doing pretty well for ourselves at 1.4 to 1.7, and we’ve found a good sweet spot.

Austin Gray: What do you think some of the biggest challenges are? I know you mentioned that each phase of growth presents its different challenges. What are the main challenges right now?

Nikola: Oh, that’s a great question! So there are always little things that come up. For example, right now, we have a Freightliner, an International, and a cube van. So we have three vehicles with the company.

Nikola: The International and the Freightliner were purchased to be kind of hybrid vehicles between the two companies—the landscaping and the basement waterproofing. Technically, they’re kind of overkill, and the issue is they’re over the 4,500-kilogram weight limit.

Nikola: So in Ontario, and I think it’s in Canada if not only Ontario, there’s something called a CVR—a special license when you’re working with a vehicle as heavy as these. The issue is it has to be the OWNR OPS who has the license, and there are all types of maintenance requirements to keep up.

Nikola: It creates this disconnect in the situation where do we really need these vehicles when we could have something under that 4,500-kilo weight do exactly what we needed to do and not worry about the CVR license? So that’s kind of an interesting random challenge that’s come up for us.

Nikola: We’re asking, “Okay, should we sell these vehicles? Buy something else and continue to push forward?” But our biggest challenges are just to, A, increase lead flow. I think that’s a really big one.

Nikola: Especially during down months, again these were months that the company was completely dormant, so there’s no historical anything from these months. We’re just kind of figuring it out for the first time, and B, just continue to make sure our employees are happy!

Nikola: You know, continue to have those open lines of communication. Like this morning, my partner and I had a great breakfast with our foreman—caught up, you know? We’re nine and a half months in, asking “Where do you think we can improve? Where can we continue to support you? Are you happy? Where do you need help? What needs changing?”

Nikola: The whole thing. This is an audience that the foreman may not have had in the former regime, and I think he’s really appreciating that. You can tell he’s a company man; he cares about the company, he cares about the profits, he puts the company first.

Nikola: Those would be the two biggest things: increasing lead flow, which will come with good marketing, and making sure we keep the employees happy. If we can do those two things, the 1.5 million is very, very achievable.

Nikola: Remember, these projects are for the most part in and out. Our longest was seven days, but usually, they’re two, three, maybe four days. We’ve had a couple of five-day jobs, so by nature, we get in, do the work, and get out. It's very efficient that way.

Nikola: It’s just about having the right amount of lead flow and closing the right amount of deals and making sure that these quieter months—December, January, February, March—are able to not only help us break even but put us in the profit zone and start to push up and out.

Austin Gray: How do you do that? Do you push harder and stay focused on foundation waterproofing, or do you consider adding an offseason type service?

Nikola: So definitely, for us, we’re going to continue pushing on the waterproofing. One of the kind of maybe unique aspects about us is we actually only do our work from the inside. So a lot of our competitors do exterior foundation repair, which is much harder to do in winter up here.

Nikola: Like today, it’s -30 Celsius, and there’s snow on the ground. Nothing’s moving, right? You’re not digging too efficiently here, so we could actually work through the winter, which is great.

Nikola: Not to say the winter doesn’t affect us, right? Materials get harder, the stone clumps up and is rock hard, and the guys have to run in and out of the property to get demo and new materials—the whole thing, right? So it makes it more difficult, but it’s completely doable.

Nikola: So for us, we’re definitely going to focus more on basement waterproofing and foundation repair. But we do want to expand our services a little. You know, we want to understand what it would look like to do exterior work at some point, right?

Nikola: Some prospects come to us and they’re convinced that no, exterior is the only way this will be fixed or the only way I’ll assure that I’ll never get a drop in my basement is by doing the exterior work, which is not actually the case.

Nikola: You just can’t convince them otherwise, and so in those situations, we’d be able to say, “Okay, well, interior solution x, exterior solution y.” But there are different services, like radon gas mitigation—this type of stuff that we want to start to introduce into our service line and expand a little bit more.

Nikola: The last thing is that the old OWNR OPS never cared about kind of remediation. So when we come into a finished basement, we have to do a lot of demo to install our system, and the old OWNR OPS was just like, “Okay, we’ll do the demo, and by the way, you’ll need to find a contractor to come in and put your framing back up and get the drywall and the insulation going.”

Nikola: Now we’re starting to offer that! Our second in command is an experienced carpenter, the old OWNR OPS’s nephew—super experienced, awesome guy—who used to run his own business, so he just gets it.

Nikola: We can now become that one-stop shop for clients and say, “Hey! We’ll install our system, but then also we can remediate for you. You don’t have to go find another contractor or another quote; you don’t have to go through that whole process. Our guys will wait the extra day while the cement dries, and then we’ll be in there the next days to finish up the basement.”

Austin Gray: That’s great! What is the difference in a slow month and a busy month? Can you give us examples of your numbers from your slowest month to your best?

Nikola: May was our best, and that was in the 170s. I think it was 177; I just posted about it. I think that was our best month so far, and our worst was September, which was 35K.

Nikola: You know, based on standards of the past, 35K is still solid, but for us, it’s not a break-even point. Our burn is probably around 40 or so—maybe a little bit more; it fluctuates depending on what we’re doing for marketing, one-time costs, ongoing costs, etc.

Nikola: That fluctuated quite a bit, although the kicker was in August. Until August, the old OWNR OPS had been doing pretty much 100% of the quotes. We would send guys with him to learn, and we have another quoter now but have made sure our foreman goes with him to learn because obviously, he was ready to transition out.

Nikola: In August, he had a medical issue, and he just kind of stopped quoting but didn’t tell us. So for two or three weeks, we were kind of in the dark, if you will, and that played a major role in our slow down and our ability to close.

Nikola: We’ve since kind of shored that up; he hasn’t even quoted since then, and as I mentioned earlier, he may do a couple days in the spring. But that transition period really, really hurt us but was a bit of a blessing in disguise as it made us stronger for sure.

Austin Gray: Where is the next strategic investment—like the most pressing? Is it vehicles, IT personnel, new crew, or specific service technicians?

Nikola: Great question! I’m laughing a little because my partner and I had this conversation this morning. I don’t even want to call it a debate; we’re both super passionate guys. We had this conversation this morning about where we need to invest; the phone's going to be ringing off the hook.

Nikola: Until that time comes, we’re kind of flying blind a little bit. We want to make sure we’re investing strategically. In my opinion, it's 100% in organic SEO—a huge opportunity for us.

Nikola: I look at our competitors locally, and I see the type of business they’re doing. They have numerous trucks, numerous crews, so I can do basic math, at least, and they’re doing very well from a numbers perspective. But their marketing, their online presence, the whole thing is just stuck in the early 2000s.

Nikola: You know how it is; you look at competitors and can kind of tell what decade they last took a good look at their marketing—especially coming from the marketing world.

Nikola: For us, organic SEO is going to be absolutely huge. I know for a fact that three, four, five, six, seven months after we start, it’s going to create a lead pipeline that will be astronomical.

Austin Gray: Absolutely! And I mean, at the end of the day, it’s going to be a rather small, you know, 10 to 25 grand over the whole year, right? And we’re talking tickets of 15, 20 grand, right?

Austin Gray: So like a single job that wouldn’t have otherwise come is going to pay for a whole year’s worth of organic SEO. We rank incredibly terribly despite having our domain for 16 years. Our domain authority is like six, and we’re way down the list on maps. We’re nowhere near the first page, and that’s still kind of a primary source of leads for us.

Nikola: I know that when we get up to that kind of upper echelon of rankings, the leads are just going to flow like crazy. We’ve got to be ready for that, and that will be a challenge as quoting all these leads—because of how wide our area is—we could be driving four hours a day for leads, you know, plus behind the wheel.

Nikola: We’ll go as far as two, maybe a little more than two hours. When that happens, we have to put the guys up in an Airbnb, etc. We have to be really conscious of that, but yeah, SEO—organic SEO all the way.

Nikola: A big part of that has been your episodes, man. They’ve been awesome! There have been a few guests who have really hammered that home, and I always knew that and always saw it as an opportunity.

Nikola: It’s the part of the under-marketed aspects of some of these businesses. They don’t understand SEO; they don’t understand organic SEO, and it’s hard to tell them, “Hey, you’re going to be investing for three to six months before you really see any returns.” That part usually blows the top off from what I’ve seen.

Austin Gray: 100%! And you and I share that same mindset! I mean, I look at it the same way: I can spend about 12,000 bucks to go all in on it this year, or if you really want to ramp it up, spend double that.

Austin Gray: At the top end, you’re looking at 24, 25 grand and whenever you can say, “Okay, that could literally be recouped with several jobs—easily!” Especially with the type of job. I mean, you know some of our highest jobs so far were 70 grand, so like that pay—you know, if that’s a job that comes in from organic, that pays for numerous years of service, right?

Austin Gray: As you know, organic’s kind of the gift that keeps on giving because it compounds. You don’t have to necessarily pay for every click and every single lead that comes. In an ideal world, we would have a small sprinkle of Google Ads and just be hammering organic.

Nikola: We did do some radio as well. It was a legacy contract the old OWNR OPS had. It’s really interesting—maybe 1,500 bucks a month. We’ve since paused it, but we’re debating whether or not we should bring it back on.

Nikola: The thing is, the towns we’re doing radios in are small towns—not big places where people are cruising with Spotify. You know, the radio station is on in the hardware store and the grocery store. In 90% of vehicles, people are listening to the radio.

Austin Gray: Yeah, really interesting! Cool! I actually just checked X—I still have a tough time calling it X; it still wants to come out as Twitter, unfortunately for now.

Austin Gray: So I just checked the tweet I did, and it looks like Casey asked, “When growing fast, do you focus on hiring more staff and then filling up the work to meet that supply, or do you build up the demand and follow by hiring staff to fulfill it?”

Nikola: This came at the exact time of the conversation we’re having real time. So what’s your answer to that?

Nikola: Great question! For us, because we have the capacity with our current team, it’s all about filling that current team out. I think we would get to a point when we hit kind of that 1.5–1.7, which is where we anticipate to kind of stretch it a little bit.

Nikola: Once we do that, I think is when we would start to look at, “Okay, what does filling another team look like?” Understanding, “Okay, how are we going to shuffle the vehicles? Who's going to be that second foreman?”

Nikola: We already know that it would be our second in command, but now we’re kind of splitting the crew. Do we send one of the old crew? Is it two guys and two guys? And then both crews are filled with two new guys, right? To kind of split the experience across the crews.

Nikola: These are questions we’re already asking ourselves, understanding, and trying to get to a place where we have a firm belief when that time comes.

Nikola: Because we have so much capacity with our team, we just want to book up as much as humanly possible to get to that revenue stretch point. We’re in consideration; we’re in a really unique business so far—like all our businesses book like three weeks out.

Nikola: We haven’t had a huge…I think our longest lead time was like twelve days at one point. We had twelve or thirteen of the next days booked out completely—it’s a quick shuffle, and people make their decisions yes or no usually fairly quickly.

Nikola: So my hope is when we get there, we can book out a couple months in advance, and then have that comfort— that base layer of saying, “Okay, we can hire another two guys full-time because look, we’re booked out for three months, and we know we’re going to continue to drive the revenue.”

Nikola: It’s a little riskier when you’re selling a job for two weeks from today.

Austin Gray: But I wanted to ask, when you go to build up your crew, how are you going to recruit staff?

Nikola: Funny enough, and I don’t know if it’s the economy or the marketing or a bit of both, but we receive quite a bit of inbound for work—probably like three to four individuals a month reach out, send resumes, “Hey, looking for work, looking for work.”

Nikola: Now, I don’t yet know what that kind of conversion looks like for us. We haven’t been through a hiring cycle. It’s really hard work—it’s really grueling work, long hours, messy, dirty so my guess is not everyone would necessarily stick around or be reliable enough.

Nikola: But with that being said, you know, we do get a lot of inbound. So a lot of opportunities to test people, and we have a couple of young guys—17, 18, 19 years old—our yard is in the country. So there are a lot of blue-collar, hardworking individuals, and these kids have been great; they can’t drive yet, but they’ve been great fifth individuals to the crew.

Nikola: We’d open it up on the regular stuff like Indeed. I would hammer the Facebook job boards, find a contractor—these types of groups that are in the different cities and areas that we service, I should say.

Nikola: Network, you know, a bunch of friends are in the space, and just having these conversations. I don’t anticipate it being easy, but I think we’ll be able to make it happen when that time comes, and we’re probably about, I’d say, a good six months from being there realistically.

Austin Gray: Man, I’m excited to watch you grow this thing! I think you're going to have people reaching out to you left and right. The reason being is because you and I share a core belief in the sense that, dude, I don’t want to just create a business for the sake of creating a business.

Austin Gray: What drives me a lot is creating a business where people want to come to work and want to work on a team together, and we’re all motivated toward one goal. I think that starts to show over time, and the reason why I can speak to that is because we’ve gotten several calls recently from other people who have worked for other businesses.

Austin Gray: “Hey, you know, I’ve seen you guys; I like what you’re doing.” Whether it be interacting with them through other contractors or general contractors or rental companies, whatever it may be—showing the level of professionalism and the fact that the team members are taken care of. Other people naturally just want to be a part of something like that.

Austin Gray: Man, I’m excited for you! I really do believe that you’ve got something really good going because, one, you’re so committed to delivering that level of five-star service.

Austin Gray: It’s like when a customer calls, you’re calling them within seconds. I think those sorts of little details translate down into the team. If they see you filling up the pipeline like you’re filling, it's like, “Holy crap! Nick is hustling!”

Nikola: Definitely!

Austin Gray: And then when the energy is high on the field side and people are excited about work, then other people see that, and other people want to come and be a part of that too!

Nikola: Yeah, and I can see it! You know, my foreman, Steve, he’s an awesome man, but he always makes a joke: “Holy, you’re fast, because I’m answering the phone, and it’s not even one ring and I’m picking up. What’s up, partner? What do you need? How can I help?”

Nikola: I think that’s really important because I’m not in the field on a day-to-day basis, and it’s important for them to see that I’m always accessible—day or night, no matter what day of the week it is. Always accessible!

Nikola: I’m really reasonable in making sure that they’re taken care of, checking in, you know: “How’s the family?”—having these conversations, I think, are really important to show them that I may not be in the basements with them every single day, but I’m in the trenches with them every single day.

Nikola: I’m driving this every single day; I’m making the calls, having the conversations, and doing the marketing things. I share the reviews with them, which they love to see. Oftentimes it’ll mention them, their great work, their politeness, their professionalism.

Nikola: It shows, “Look guys, you know, for 16 years, we had three or four reviews. And you know, in nine months, we now have 49 or 50 of them!” They understand that takes work. So sharing with them what it takes on the back end has been enlightening for me but also for them to understand that this doesn’t just run itself.

Nikola: The quote-unquote passive ownership—doesn’t exist if you want to grow the business or make anything substantial of it.

Austin Gray: Yeah, and it’s just no fun either! I think the 4-Hour Work Week just completely ruined a whole generation of very talented entrepreneurs.

Austin Gray: It’s funny; I’ve talked about this on the podcast before, but the people who have achieved the 4-Hour Work Week status early on in life—in their 30s or especially late 20s—it’s like people have openly shared it’s led to depression, right?

Austin Gray: There’s like nothing to wake up for! Being an OWNR OPS, like it’s way more fun to just be in the business and with the crew—working with a team on growing something together.

Nikola: Well, because you see the cause and effect, right? The things that you do have an impact—whether it’s short-term, medium-term, or long-term; at some point downstream—good and bad. The things you do for the business have an effect on it, right?

Nikola: There’s a tangibility to it, and you’re right, man! I love golf; I probably play maybe 30 or 40 rounds a year. My partner is a big golfer, so we’ll get out at 6:30 in the morning. We’ll start our meeting on the golf course; we have our conversations, and then we head back and get things on paper, if you will.

Nikola: I absolutely love golf, but if you told me you could retire with whatever money you want right now, but you can never work again and you’ve got to golf every single day, I would get bored!

Nikola: There’s a part of the chase that’s really important. You see it with PE folks who are retired. Unfortunately, after you retire, your life, health, and wellness seemingly start to go downhill a little bit. I think this type of work has a purpose, for sure, and it’s absolutely necessary.

Nikola: It feels really good when you deliver a great product or a service to a customer who actually needs your service. It really, really does!

Nikola: Especially in our field, too, right? When it’s such a need and such a concern for people, when we come in we give them the confidence and we solve their issues—they’re just so happy.

Nikola: You know, I tell friends and family, “Oh, we acquired a basement waterproofing and foundation repair company,” but the looks I get are like, it’s not sexy, man! There’s that bit of confusion— a bit of, “Oh, cool! Congrats!” You know, they don’t fully understand it.

Nikola: Some people who are closer to me get more of a look under the hood, but you know—the acquaintances in the circles—there’s a weird fit here! Like “Aren’t you a marketer? What’s going on?”

Nikola: For us, on the day-to-day, we’re just always hustling, always grinding, always looking to grow the business and take a new approach to it.

Austin Gray: Well, I can feel you on that too! You know we have definitely gotten the weird looks like, “You’re so—are you a logger now? What?”

Austin Gray: And in the last episode, you were mentioning a little bit about how you and your wife are grinding it out and building things, etc. It’s that kind of stuff that’s the pilot light that keeps us going, you know?

Austin Gray: Jumping out of bed every morning at 6:00; and that’s another thing—before this, I could kind of wake up whenever—sleep until 7:30, 8:00, no problem.

Austin Gray: Well, can’t do that if my boys are up at 6:00, in the yard at 6:30. I got to be—if I’m not there with them, it’s got to be a one-ring pickup no matter what, no matter every day.

Austin Gray: So I wake up at 5:45, get ready, hit the gym, bring my phone with me. If they call, I pick up any time of day. It makes a difference!

Austin Gray: It can be taxing, as I’m sure you know that—it has difficulties on relationships if you’re always on call. But finding that balance is really important and making sure the people around you understand why this motivates you and why this is so important to you, letting them in on it a little has been really helpful for me from a personal relationship perspective.

Nikola: Yeah, definitely. I’m so excited that you joined us for an episode on the OWNR OPS podcast, Nick! Your values and your approach to this are pretty cool to see, and I’m so glad we get to share this with our listeners.

Nikola: Because man, this is the message and the reason why I started the podcast. It’s like, once you accept the fact that you do like—work can be enjoyable, and also like growing the business and being inside the business can be fun—at least for me, that’s when things started to get a lot better, you know?

Austin Gray: Just from a numbers perspective, right? I think you can say the same thing with your recent results.

Nikola: Definitely! I just want to thank you, man. I love your podcast. It’s the first time in a really long time where, on a weekly basis, I’m getting excited for the new episodes, listening right away or within the first 24 hours.

Nikola: It’s really great to see that there’s a community of us doing similar things in different verticals under this home services umbrella, but all coming at it from different points of view and different life experiences, different past careers, if you will.

Nikola: It makes me feel less alone for sure and, you know, the community you’re building is special. I love your content, man. I love everything you share. The guests you have on are awesome, and I think what you’re building here is really, really special. I appreciate the opportunity to come on and talk to you about it, and hopefully come on in some time, and we can talk about each other's growth.

Austin Gray: Yeah, absolutely! Well, thanks for the kind words. Let’s have you back on in a year or so and see where Wet Basement Solutions is at that point!

Nikola: Love it! Yeah, man, I would love to be on, and I really, really appreciate you, man. Thanks again!

Austin Gray: Cool! Well, listeners, thanks for listening to another episode of the OWNR OPS podcast. I’m your host, Austin Gray, and this is Nick with Wet Basement Solutions. If you haven’t checked out any of the other episodes, make sure to go back and check out the last one we had with Garrett Williams from Minnesota GM Outdoor Services.

Austin Gray: He’s a 23-year-old who just grew the business year over year, and I think this year they were right at 5 million in revenue. So check him out on YouTube; I’ve learned a lot from building my excavation and land clearing business from him.

Austin Gray: But once again, Nick, thanks for being on the OWNR OPS podcast. Appreciate you being here, and we’ll chat soon!

Nikola: Looking forward to it, Austin—thanks again!