Your Plan to $100M: 5 Steps to Grow and Transform Your Business

How to set a growth vision and build a strong foundation

The theme or chant often repeated at LB Capital is: “Build it to sell it.”

“One of the ways to keep team members engaged is to have a dynamic and growing company, and that's how you create opportunities for growth,” Rohr says. “Now, ‘build it to sell it’ is not always the goal, but there are some advantages to growing your company.”

Begin with the end in mind.

Bachmann suggests starting with the idea that you might sell the business one day.

That’s not how he started 1SEO Digital Agency, but it’s the lesson he learned upon selling it.

“I made the golden mistake everyone always makes: ‘I'm going to be the best at what I do. I'm going to be the best digital marketer,’” Bachmann explains. “Well, if I'm the best digital marketer, that means I'm not the best CEO, I'm not the best CFO, I'm not the best salesperson. I'm not the best at scaling my organization.

“So, I made a great living. And inside of probably five years, I was known as the best digital marketer in the country. ‘The Digital Lion’ spoke on stage about digital marketing nonstop, helping build over 100 employees. We had growth every year. 

“But the fundamental mistake I made was, I had offers for 1SEO six, seven years earlier. When I sold 1SEO 15 years later, I could have got probably about 25% to 30% more,” he adds. “The multiplier came down in that space. Private equity started going to other spaces. AI came in heavily over the last years. 

“So I tell people, ‘Love your business, but don't fall in love with your business.’ I fell in love with my business, it became my identity and who I am, and I cost myself millions.”

If you begin with the end in mind when building your business, you’re essentially planning a strategic exit. Bachmann says business owners typically exit a company in four ways: 1) owner dies, so company dies, 2) company goes out of business, 3) owner gives it to a family member to run, or 4) owner sells it to a private equity firm.

If you choose one of the latter two as your preferred exit plan, Bachmann says you’ll still need to build it to sell it. You don’t want to leave a headache for your children to take over, and private equity firms are paying top dollar for well-run trades businesses.

Building a strong foundation is the key to long-term success.

“The idea isn't to build a business that instantly collapses. The idea is to create a model that the business can continue to leverage,” she says.

Now, sometimes businesses fail. It happens. But Bachmann says you can’t let failures that happen along the way shatter your confidence. You just have to learn from it. He shared one example of selling an HVAC company in Pennsylvania to his general manager for $1, even though the business was earning $5.7 million a year.

At the time, Bachmann’s only HVAC business needed better leadership, while his roofing businesses were taking off, and he wanted to focus his efforts on those.

“I just made him a deal. I said, ‘Here's the company for $1.’ We had 15 trucks paid off. I said, ‘You take the company and when you sell it, I'm asking you to just give me back my money I'll lose. That's it.’

“Some would say that's a failure for me. The way I look at it, it was a learning experience for me,” Bachmann says. “What's my time worth? What's my energy worth? People were like, ‘You're crazy. You sold a $5 million profitable company for a dollar!’ Well I did, by making a lot more money over here.

“That HVAC company made up about 80% of my headaches and I just knew I had to go,” he adds.

After visiting LB Capital, Rohr says Bachmann’s strategy to build strong foundations at all of his companies is clearly working. She uses the word “energy” to describe the LB Capital vibe.

“People are moving. They're making decisions. They're making mistakes. They're catching each other. They're high-fiving, they're shaking it off. It’s a beehive of energy,” Rohr says. “You're not making every decision. You're checking on things, you're checking the numbers, you're touching base with the team, you're listening, but they're driving this. 

“How do you align the team with your vision and goals?” she asks.

Bachmann’s advice? You need assistance.

“If you want to build something great, you can't build it by yourself. So, you better have great people that care. Give them equity in your company,” he says. “The majority of my people get equity. Some type of ‘when we sell, you're going to get a nice chunk of change.’”

But pay doesn’t always equate to people willing to take on your mission.

“They’ve got to feel part of it,” Bachmann says. “I say to all my leaders, ‘The worst thing a leader could do is not make a decision. A wrong decision is still the right decision.’ I know that sounds crazy [but] I can always go back and fix a wrong decision. What I can't fix is a leader that makes no decision. So we give all of our people the right to make decisions constantly. 

“We're trying to build a strong foundation of companies that thrive and grow after I sell them. I need to have people who aren't robots in place. I need to have leaders,” he adds. “These guys are building this. I just have the privilege of being the front man.”

Rohr says LB Capital’s strategy is to find partners, build the business together, and then find an exit or the next investor. 

“I know acquisition's a great way to grow, but it comes with some headaches,” Rohr says.

Bachmann agrees that business acquisition is not for dabblers. He compares it to sending in a backup quarterback to win the game, everyone working as team players, and no one questioning the coach’s game-play decision.

“It starts with the team,” Bachmann says. “The mission is more important than you. And if you think you're more important than the mission, this isn't the organization for you. And when people understand that, I think you build great success.”

Ways to leverage the right technology

While it takes great people to grow a $100 million business, it also takes powerful software systems and technology, Rohr says.

And to be successful, it’s important to understand that your trades business is actually a technology and sales organization, Bachmann says.

“You're not a roofing company, you're not a roofer, you're not an HVAC company. You’re a sales organization, a technology company, and you need to have leadership to grow,” he says. “And I think that's the fundamental thing that people mess up.”

While running 1SEO and before LB Capital, Bachmann noticed how 90% of the big HVAC companies used ServiceTitan field management software to run their businesses.

“We represented so many HVAC companies around the country, and all the good ones were on ServiceTitan,” he says.

When Bachmann partnered to acquire his first HVAC company, the first thing he did was get the company on ServiceTitan.

“We went from $2 million to $12 million, to $18 million in two years when we sold it,” Bachmann says. “The only thing I did was put it on ServiceTitan.

“I managed by how many phone calls we needed to book a lead, to what our average close rate was, to what our average ticket was. And we just made sure our pricebook was in line with the gross profit,” he adds. “I know it sounds simple, but it was that simple.”

He did the same thing with a roofing company, growing it from $2 million to $12 million in one year, then selling it.

“I went and looked at other roofing softwares. They just didn't have what ServiceTitan has,” Bachmann says. “I want to see people grow their business. You have to be a technology company. I'm a technology company, and ServiceTitan is my technology of choice.”

ServiceTitan’s core product offers robust features and functionality, and Rohr suggests learning it, identifying someone in your organization who can dig into it, and looking for new hires with ServiceTitan experience.

“As you get people on your team engaged with ServiceTitan and they learn to love it, they'll drive implementation at your company,” Rohr says.

ServiceTitan also offers a menu of Pro Products, such as Marketing Pro, Dispatch Pro, Scheduling Pro, Sales Pro, and Contact Center Pro.

“I don't even consider these products. I consider these [as part of] the customer journey,” Bachmann says. “For me, this ain't a product. This is the journey of the customer. I'm going to have the best frictionless environment for my customer.”

With Marketing Pro, Bachmann not only improves the customer experience but gains greater insight into his financial data and knows which marketing channels produce a greater amount of revenue.

“I can see my PPC, my SEO, my GMB, my LSAs. It allows me to feed the funnels of money that I need to funnel more money into to make the machine operate more,” he says.

Utilizing Marketing Pro also pays for itself each month, Bachmann adds. 

“We know salespeople don't follow up. People love the one they’re with, not the one they just left,” he says. “So this follows up for you by email and text, and it gives the customer a great experience. I don't look at Marketing Pro as buying a product. I look at it as an investment to increase my close rate, an investment to know where my marketing dollars are going. Without this data, I wouldn't be able to drive my business and grow.”

While Contact Center Pro is still in beta, Bachmann is in the process of implementing it with all of his companies to ease the CSR call-taking load.  

“And to get people up to speed fast,” Rohr says. “This is really a game-changer for setting your customer service reps up to win.”

LB Capital also uses Scheduling Pro to capture every call.

“It does all the magic scheduling for you based on literally what your salespeople are doing,” Bachmann says. “It takes your average ticket, your average job at the close rate, what type of lead it is, and it spits it out to your highest performers. It takes all the guesswork out and the bias.”

And using Dispatch Pro is helping the LB Capital companies have record sales months in November and December. The companies also use Sales Pro and ServiceTitan’s Integrated Accounting software. 

“Technology never loses. People do,” Bachmann says. “I can't scale a manager scheduling jobs. I can scale technology, and that's where my team is.

“I would get a demo set up immediately for ServiceTitan and these products, especially Marketing Pro, Dispatch Pro, Scheduling Pro, and Integrated Accounting,” he adds. “This is how I build all my businesses. You won't regret going with ServiceTitan. It will change your business life.”