From Plumber's Wife to Industry Leader

Ellen's journey started when her husband Hot Rod (yes, that's his real nickname) had a plumbing, heating, and solar company in Park City, Utah with his partner Richard Yocks. Then Richard died suddenly at age 33. He literally worked himself into a health crisis. He wasn't very healthy and would just work, work, work. Stress kills.

It was a really tragic moment. Hot Rod and Yocks had been friends since they were eight years old. Then Ellen did what she calls "a really dumb thing." She quit her career in the restaurant industry and went to work with her husband.

"It was terrible, absolutely terrible. We hated on each other. We still have the scars from those days."

Ellen would say they don't have any money and Hot Rod would hear "I'm not good enough, I'm not working hard enough." It was a really rough time for them.

Then Ellen found mentors. Her most significant financial mentor is Frank Blau, who's now almost 100 years old, still kicking, still bossing people around. Frank taught her how to create, use, read, understand, and make decisions off financial reports. The balance sheet and the profit and loss.

She'd gone to college for this stuff and still never learned it or didn't know how to clean up a messy set of books, which is what most people's books are.

"That was like this life-changing, life-defining moment for me. How do people not know this?"

She raised her prices, started to make more money. Hot Rod and Ellen decided not to work together anymore because they had different goals and dreams. They're still married, but you don't necessarily have to stay in a business that doesn't suit you.

Money buys options. As they turned their company around and got out of debt, they had the wherewithal to make choices that aligned with what they really wanted.

The Itch to Build Something Bigger

Somewhere along the line, Ellen just wanted to see if she had the chops to grow a bigger business. She'd look around at other people running businesses and think, "I do that. I bet I could do that."

Hot Rod did not have that itch. He was like, are you kidding me? I don't want more employees. Ellen honors and respects that too.

"For anyone listening, I think what I learned during this time is, what do you want? What do you want regardless of what anyone else is doing, regardless of anyone else's hopes and dreams? What do you want and are you willing to commit to that?"

At the time Ellen had this itch to grow a big business and thought the only way she could do that was with her plumber husband. But he didn't want it. Sometimes you're just going in different directions and that doesn't make anybody right or wrong.

They sold their company to their employees and Ellen was lost. What do I do? How do I serve? What's the point? She just knew she wanted to grow a company.

She started sharing what she learned. Started teaching people how to read a balance sheet and a profit and loss. Started doing consulting for mom and pop companies. She felt honor bound to share because so many people had shared with her.

She was doing a seminar one day and after the seminar, Jim Abrams, who's a legend in the industry, came up to her and said, "How would you like to run the country's largest home service plumbing company?"

Ellen said yes. The only company she'd been involved in at that point was Hot Rod's company with four trucks. But when that opportunity happened, it was aligned with what she wanted. "I said yes, even though I was absolutely not qualified to say yes to that."

Jim Abrams invested in this new concept, Benjamin Franklin, the punctual plumber. Ellen didn't do it alone. But she had the opportunity to learn a lot about business and franchising in a very short period of time. There were some brutal moments, but every day she's grateful for that experience because of how much she learned.

The Three KPIs That Matter Most

Ellen is a numbers girl, and the financial area is where she feels like she has the most to share. On the financial side of things, the score, the three main KPIs or key performance indicators are sales, profits, and cash. Any business. And they come in this order.

"Sales, profits, and cash. Sell, sell, sell, sell, sell, get something up on the top line. Then you got a little breathing room, you got a little bit of money to finesse. Then pay attention to expenses."

Sales are offense. Managing expenses is defense. That's how you get profitability. As you gather profitability, and you want to get profitable as fast as possible, because if you don't, whatever cash you have, you're going to use and you're going to go into debt.

Business is not hard. If you get into debt, now you have to sell better at better prices, hone your skills, raise your prices, and then manage those expenses. Pay attention to what you're spending money on and how your money's going.

Owners can't take their eye off this. This is the game. "Your money, it's your job to pay attention, even if you have help. Your job is to pay attention to sales minus expenses equals a profit."

If you've gotten into debt, then you need a really big profit and you need to collect it today in cash so that your cash goes up. You can use some of that cash to pay down your debt and the rest of it to fuel your company.

The older Ellen gets, the simpler this appears to her.

The Brutal Truth About Pricing

I asked Ellen what to do if you're a home service business doing $300,000 to a million dollars a year and you're not profitable. You're barely making it. Maybe even in debt.

Her answer was immediate: "You're probably underpriced."

You're probably underpriced because if you're at that level, you're probably not paying yourself yet. Maybe your partner is working for free. That person can get resentful.

Here's what most people don't realize. Tommy Mello said only 5% of all businesses get to a million. That's how many micro businesses there are. At a million is where you might start to take some money out of your company.

Until you're at a million, and that's $83,334 a month, just get there as fast as you can. You may still not be making a lot of money, but it's the point at which you could.

Ellen's best advice? "Until you're priced right, you're not going to get there."

Then she walked me through the math that changed everything for me.

The Math That Changes Everything

Ellen asked me, if you were to start your own pest control service business and you were the owner, what's a reasonable compensation?

I said when you're just starting out, basically minimum wage so you can build up the business and reinvest.

She pushed back. Practically, that might be what you have to do. But we're dreaming right now. What is a reasonable amount to aspire to? What's fair for a person who deals with insects and chemicals and protects the health and safety of families?

I said at least $100,000 a year.

Ellen said, "You could make $100,000 a year working for somebody else, couldn't you? So shouldn't it be bigger?"

Let's suppose it's $200,000. That would be enough to leave your great job. You start your business because you want more.

Here's where it gets real. If you want to make $200,000 a year, what would you have to build into your selling price?

You have 2,000 hours a year. That comes from 50 weeks times 40 hours a week. For a really kicking service company, 50% efficiency is awesome. So of those 2,000 hours, you only have 1,000 that could be billable.

You would have to charge $200 per hour just for your salary. You haven't bought a pencil or chemicals or a truck or insurance or uniforms or any marketing.

"Can you see how fast you could get to a $400, $500 an hour selling price built into some kind of menu pricing? And if right now you're listening to that and you're starting to poop your pants, I will assure you that the companies who've gotten big have gone through this."

They decided they're going to get good enough at sales, at service, at operations while they're charging enough. Because otherwise how do you afford to do it?

That's what separates uber successful companies from that one or two truck outfit that's been there for 20 years.

If you aspire to something bigger, figure it out mathematically. Try and take the judgment or the emotion out of it and think, what would it take to do that?

You Don't Have to Go Big

Ellen made something really clear that resonated with me. You don't have to build a huge business if that's not what you want.

She knows some drain cleaners in Southern California who go surfing in the morning and then unclog drains in the afternoon. They do YouTube videos, they're adorable, they're living their dream.

If you aspire to something bigger, you have to charge more to build a business that involves other people and multiple trucks and different services.

As Jeff Dudan says (and Ellen quoted this), "Comparison is the thief of joy."

When you go to seminars and see Tommy Mello on stage or other successful people, remember that the game is to be the best version of you. Not everybody has all aspects of their business and personal life dialed in. No one does.

You get to decide what it is that you want to be and do and have. Ellen talks about being a billionaire and she has no interest in that. "That looks like a lot of phone calls and responsibilities. You have to be interested in what the game of being a billionaire would be. And it just doesn't ring a bell for me. However, a millionaire sounds darling."

You get to decide these things.

The Story of ZoomDrain

Ellen's journey with ZoomDrain is the perfect example of alignment and timing.

She and her best friend Al Levi (who I had on the show six months ago) would have yearly retreats to talk about their own goals and dreams. Al said he still had an itch to scratch. He wanted to be an investor and pass on the information he'd created, the systems.

Ellen said she wanted to franchise again. She'd learned to love the franchising model at Benjamin Franklin and wanted to do it again. This time as an owner.

Right at that moment, Al's phone lights up. It's Jim Cronetty saying, "I'm thinking about franchising ZoomDrain and wanted to know if you would help."

It was absolute kismet. They didn't talk to anybody else. They didn't look elsewhere.

Al in his infinite wisdom said they'd work on Jim's shop first for the next two years to make sure they were ready to go. "Al is methodical. He's a tree planter. He wants to get the systems dialed in."

That was 10 years ago. They're not the fastest growing franchise out there, and Ellen doesn't know that she would aspire to be that. There's always things you could do different and better.

As Brené Brown says, "If you dream big and dare greatly, you won't just fail, you will fly swat fail. You will fail hard."

You've got to decide if you want that. But failing hard isn't that hard. "It's not that hard to get back up again. Really it isn't. It's just like a phone call and apology. Unless you kill a man, there's really nothing you can't recover with some humility and vulnerability."

Personal Development Is Everything

One of the biggest insights Ellen shared is about what actually determines success in business.

Even with the very best system, and ZoomDrain's is solid, "It's probably not the systems and procedures that are going to get in the way of your success. It's going to be all about the personal development."

The grit it takes to keep showing up. The sales skills and communication skills with your teammates. You got to grow those. It's not just a matter of reading the manual and clearing the drain or doing the marketing.

"It's who you are going to become as the owner of a business that will determine the success of the business by your own yardstick."

ZoomDrain's values use the mnemonic GROW: Grit, Responsibility, Ownership, and Willingness. It's really all about leaning in, showing up every day.

What keeps you from doing that? What keeps you from going into the office or riding along on the truck or learning things that make you feel uncomfortable is really the relationship you have with yourself.

"The older I get, the more important I realize that is. It's not just a matter of getting the roadmap. It's that you got to travel that path if what you want is on the other end of the road."

The Brutal Moments and Money

I asked Ellen about the brutal moments she mentioned going through.

She said the brutal part is when you disappoint someone. You make a promise and it doesn't come out to look like that picture. That's why responsibility is one of their values. If it's in your hula hoop, you now own it.

As a leader, one of your jobs is to take the arrows. Somebody has to stand in front of the arrows. If you're the owner, it's always you.

The money thing is brutal too. When you're out of money, it is brutal. People have a misunderstanding that somehow money is what makes you. There's a lot of stinking thinking around money, like if you were a really good person, you wouldn't be bothered with the mundane aspects of having to deal with money.

"What I found is that the lack of money causes people to drop their integrity. So a good person might do something really bad when they run out of funds."

The whole premise behind Les Misérables is that Jean Valjean is broke so he steals a loaf of bread. This isn't a man who would go about stealing. He didn't have any money.

Or you might not pay your payroll taxes. Or you might not go back and fix that customer's problem because they didn't pay you enough in the first place.

"The lack of money, an abundance of money can allow you to maintain your standards in a way that no money puts you at risk."

That's why it was so important early on for Ellen to get priced right and figure that out. That became the mission of her life. If you're going to do this, you deserve to make a lot of money. Your team deserves it. And you're going to need it to survive the inevitable tough time that you don't even know is coming.

As Zig Ziglar says, "Money isn't everything, but it's right up there with oxygen on the gotta have it meter."

Ellen's Message to Home Service Owners

I asked Ellen for her final message to home service owners.

"You're in the best place ever right now. Best place ever. I am so delighted at the opportunities that are available for whatever you want to do."

Home services is going to be positively impacted by AI. AI is going to make your life so much easier. But at some point, somebody has to show up at your customer's home or their place of business and say, "How you doing?" And that is a really good place to be right now.

My Main Takeaway

This conversation with Ellen completely changed how I think about pricing. The math she walked me through is so simple and yet so powerful. Most home service businesses are underpriced because they haven't done the math on what they actually need to charge to pay themselves what they're worth.

The trap is thinking "I'm not going to make any money so I can charge less than that guy." If you don't have sales skills, you're depending on charging less to make the sale. And that's a path to poverty.

The three KPIs are everything: sales, profits, and cash. In that order. Sell first, then manage expenses to get profitable, then collect that cash to pay down debt and fuel your company.

And the biggest insight? It's not the systems that will determine your success. It's who you become as a person and a leader. The personal development, the grit, the willingness to keep showing up even when it's hard.

Thanks for reading, and if you found this valuable, make sure to check out the full podcast episode. Ellen drops even more wisdom and practical advice that I couldn't fit into this recap.

Head over to EllenRohr.com to get a free copy of her book "Where Did the Money Go?" Just put your name and email address and you'll get the PDF. If you're starting a business or want to grow yours, no bad thing comes from reading that book.

You can also follow Ellen everywhere at Ellen Rohr, and if you're interested in Service Titan or Field Routes for pest control, check out their platforms for managing and growing your business.