Selling My Business Broke Me | Dan Noll

[00:00] Cold open

Dan: Well, I've only started networking properly probably the last 12, 24 months, and that's because it hit the fan in the business.

Dan: There's not a second that goes by that I regret not using AI.

Dan: I always just assume that people don't want to talk about it, especially if it's in the same industry. I just always assume they'd be like, I'm not speaking to you about my business and what I run.

Dan: One of the hardest decisions I've ever had to make. I started it when I was 20. 14 years I had it. So letting go of that was a big fear.

[00:18] Introduction

Kane: Hey, I'm Kane Tyler Smith, the founder and CEO of Smartfix and Hypotential. This is Unlocking Business, where we have real conversations around business, leadership, mindset and personal growth. If you've been getting value from these conversations, please take a second to like, subscribe and follow our channels. It helps us reach more people, bring on more guests and share more stories. Now, let's get into this episode.

Kane: Today, I'm joined by Dan Noll, founder of T2U. Dan has spent years working within the trade industry and is now building T2U, a platform designed to bring tradespeople, suppliers and businesses together through meaningful connections and networking. His mission is simple. Make it easier for good people in the industry to meet, collaborate and grow their businesses.

[01:02] Networking and his mechanical services business

Kane: Thanks for coming on the podcast.

Dan: No worries. Glad to be here.

Kane: Do you think most business owners underestimate the power of their network?

Dan: 100%. I think my previous business was all networking. Because we were sort of tier 2 construction, we couldn't really grow our company with marketing, and Google Ads didn't really help. It was all relationships with consultants and builders and things like that. So I think it's a really important key to business, having those good relationships.

Kane: What does tier 2 mean?

Dan: So tier 1 construction is your hospitals, hundred million dollar projects, and then tier 2 is kind of like shopping centres and smaller hospital work and things like that. So just the tier of the value of the construction project. It was just larger scale work.

Kane: So you would do work for strata managers and property managers and stuff like that?

Dan: Yeah. Most of our work towards when I exited the business was brand new Coles stores, Woolworths work, we had hospital work. Just that larger scale sort of stuff.

Kane: And what was the business you sold? WTS Mechanical Projects, that's air conditioning, HVAC?

Dan: More so my background is refrigeration, cool rooms and freezer rooms, which I still do a bit of now, but the business became a mechanical services beast basically.

Kane: Right.

Dan: So a lot of BMS, building management systems. We were doing basically all the HVAC stuff. There's no end to the sort of stuff that gets thrown under the banner of mechanical services. We were doing medical gas, all sorts of stuff.

Kane: Right. And when did you exit that business?

Dan: Last year. Officially this year was when the paperwork and everything was done, but I wrapped up just before Christmas and haven't been back there this year.

Kane: Right. And how long were you with that business for?

Dan: I started it when I was 20 years old, so 14 years I had it.

Kane: Right.

Dan: So I had it from quite a young age. Then I was about six or seven years in and I brought in Chris, who's now the current owner. He came in and bought in half, and then when I exited he took over and now he owns it all on his own.

[03:12] Stepping away after 14 years

Kane: What was the emotion stepping out of your baby that you built?

Dan: Oh, one of the hardest decisions I've ever had to make. I think it's something that's just been constant in my life since I was a kid, so letting go of that was a big fear and it felt very risky. You don't know how things are going to go when you're first voicing that you want to exit, whether it's going to turn sour or whatever. So I was quite fortunate that we managed to maintain a good friendship and navigate our way through that process, which somewhat feels a bit like a divorce or something, I think.

Dan: So yeah, it was tricky and emotional. Yesterday I actually went to one of the wholesalers that faces the business and I had to sit there and look at the factory and just think, well, I spent so many years in there and now I'm just out on my own doing my thing. So yeah, it's been a bit of a journey.

[04:15] Life after selling the business

Kane: Was there any form of relief? Because obviously it's quite stressful running a decent size business.

Dan: Massive. Lifestyle wise, it's been huge for me. I've got a 9-year-old son, and the quality time I'm getting to spend with him has been really good. Time was just flying. When I was in that business, I was opening my eyes, rushing before work, bombing it down to Nangara, working for the day, getting home, sleeping, doing it again. And it started to feel like I just needed to make a change and do something different. It felt more like a job as opposed to an entrepreneur business.

Kane: 100%. That's a massive part. I felt like I became an employee.

Dan: Yeah. Obviously I wasn't, and there was a lot more flexibility than what an employee had, but it just kept growing and growing and there was no end in sight to the growth. During growth you've got to be in there, you've got to be keeping your finger on the pulse, and I can't see that thing stopping growing for a long time. It just keeps going.

[05:20] Project managers and subcontractors

Kane: So, did you have a big team?

Dan: Yeah. The business was mainly project managers. When I left there were five senior project managers, and each project manager generally would do about $5 million worth of work a year, which is less than some of the other MEP companies, but that's why we were able to attract project managers, because we weren't overworking them. But yeah, accounts people, technicians, service guys and stuff. When I left, I think there were 16 or something like that.

Kane: And would you use subcontractors a lot in that line of work?

Dan: Yeah, basically we would award contracts. We operated similar to how a builder would operate, where we would use our duct installers with their own team, electricians with their own team, refrigeration mechanics with their own thing as well. So we would just bring a whole project together and do the project delivery basically.

Kane: The project managers, would they be fridgies by trade?

Dan: Some are engineers, some are fridgies. One was a draftie who had worked his way up. So there's a lot of ways that they get into that position, but to be a project manager in mech services, you can't just be a normal project manager that comes into it. You've got to understand the business and how things go together.

Kane: You need experience in the trade with exactly what you're doing. So I assume it's bigger jobs, like you said, $5 million.

Dan: Yeah. Not residential air con, you know.

Kane: Yeah, that's right. Otherwise I think if you don't have experience in that, guys will just pull the wool over your eyes. You've got to know what you're looking at.

[06:24] What T2U is and how it works

Kane: Let's talk about the new business.

Dan: Yeah.

Kane: The exciting one. So T2U, does that stand for anything?

Dan: Trades To You basically. Yeah.

Kane: What's it all about? What problem are you trying to solve?

Dan: There's a long list of problems, but if I was to put something at the top, I would say it's giving clients a way of contacting a multitude of trades in one hit, as opposed to picking up the phone and calling one or two plumbers, for example. They post the job, it works on a location bubble, and if no one picks it up in that first bubble, then it moves out and goes to further trades until someone picks it up. So it's basically a system that allows clients to get in contact with a heap of trades, as opposed to just trying to find someone or calling around asking if anyone knows a plumber.

Kane: So you'd have listed trades that can join up to be a member with your business.

Dan: Yeah. We encourage trades to come on board. We've got a fairly heavy vetting process to try and keep out the guys that don't have insurance, and cowboys, I suppose. But we basically try and get everyone to come in, and if guys aren't up to scratch with their paperwork and things they need, we'll try and help them through that. So for the clients, they'll post a job, like I've got a burst pipe in my laundry.

Kane: Mhm.

Dan: They can lodge that on the app and that gets notified to the trades.

[08:30] How jobs are accepted and paid

Kane: Do you guys monitor if someone is accepting that job?

Dan: Yeah. We've got things built into the back end, and especially at the start I'm going to be really watching how quickly someone's getting there. If we're struggling to get someone there, I'll be picking up the phone and calling the client and saying, "Hey, we're working on this to try and get someone there as quick as we can." From the client side, we just want it to seem like a really seamless experience.

Dan: But basically, by the time the client has accepted the tradesman, so the tradesmen apply for the job, the client can go through and go off price, availability and how quickly they can get there, and make their decision on which trade they use. As soon as they've done that, they make payment for the callout fee through the app with Apple Pay or Google Pay. Then the money goes into a holding account. The chat box opens up so they can chat with the tradesman. The tradie comes out to the job, completes the job, and then gets paid from there.

Kane: Is that final payment for the work paid through T2U as well?

Dan: Yeah. But there's two avenues within the app. There's immediate or urgent works. If you just need to get someone there quick, then the payments for that generally go through the app. Then there's the other side of the app, which is quoted stuff, which no payments go through the app for.

Kane: Shouldn't that be bigger jobs?

Dan: Yeah. If you want to get a ducted system installed or your hot water unit needs to be changed out, you can get quotes from there and that's free for them to do, and we don't get involved in any of the transactions with that. So we're not clipping the ticket on bigger items for the trades.

Kane: Okay. So if a customer does put a job on, is the idea that they can get multiple quotes fast, or they're just going to get someone straight away?

Dan: Both. If they go through the urgent work side of it, that's to get someone there quick. And when they're doing the flow through a quoted job, it says, when do you need this done, or when do you need this quote by, and it'll say this week, next week or I'm not in a rush.

[10:34] The callout fee

Kane: Right. So that callout fee up front, is that based off what the business charges, or do you guys just have a set fee?

Dan: It's based off what the business charges. There's like a slider. I've set the parameters at what the industry standard kind of is for a callout, between 180 and 240 bucks. Depending on how far away you are, or if you're more keen to get the job because it's 2 minutes away from you, you can just go the lower end on that callout fee. I had to make that adjustable because not all businesses are the same. Some have bigger overheads, and for 180 bucks it's not worth them doing it. So we've made that adjustable so the trades set their callout fee.

Kane: It's a good idea. That sounds like a very good idea. How similar is it to hipages?

Dan: I suppose it's more of an advanced version, technology wise. Where I get a lot of feedback from clients is guys rocking up that don't have insurance, and the quality of trades. It's also pay per lead, whereas this isn't pay per lead. If you go for the job and you win it fair and square, it's yours. So it's like that, but I'm trying to bring a bit of quality into it and have decent guys rocking up with our system.

[11:39] Vetting trades and T2U Accredited

Dan: If their insurance lapses, they get locked out. They can't take on work until they send us their new certificates and things like that. So we're trying to keep our finger on the pulse to make sure guys are insured and up to date with everything. I think that'll be the biggest difference for sure.

Kane: Is that a vetting process? Because we've used hipages. We've used Oneflare, Service Seeking, Airtasker.

Dan: Yeah.

Kane: Obviously there's a lot out there.

Dan: I think that would be the biggest point of difference, the vetting process. At the beginning we try and keep it pretty frictionless for trades signing up, but I hope that they appreciate that vetting process being a bit longer and us asking for a bit more. I hope they realise it actually benefits them.

[12:43] What trades have to provide

Dan: We ask for two existing reviews. They send us two phone numbers from two existing clients, and that will be their first two reviews on our platform. And obviously there's all the insurance stuff, ABN, your tickets, and they've got to upload a photo of their logo themselves. It's not that hard to do, but that would rule out a lot of people. One thing I put in there is, send us your safe work method statement. I feel like if you can't even put together a safe work method statement, I'm trying to weed out people like that. If someone says, "What's that?", then it's a red flag.

Dan: I'm trying to bring in companies that are a little bit established. And if the guys are new, we're trying to help. A big part of this is to try and help guys that are going out on their own and getting started, because I've been there. We will help them through it and get them to a point, but I want it to get to a point where it's a bit of a bragging point that you're T2U verified. If you're verified, it shows that you've got everything in place you need to have in place.

Kane: So how would a tradie sign up? What's the process?

Dan: At the moment, we're taking pre-registrations, just getting everyone's details. It's a bit of a process, but we're doing a pre-launch form, which I've just nearly finished building now. They'll give us almost all of those details except for banking details, which is where the money goes into their account, and where they pay us for the app as well. So it's just getting them approved from a vetting point of view, and then when the app goes live we can put all of that information into the app and they'll just have to fill out the final bits and pieces, which is on a secure system for banking and things like that.

Kane: Right. So are you going to have to have a reasonable size admin team to run this business?

Dan: Yeah, I think I will. I've just taken on the first employee now. I've got a marketing manager starting with me full-time next week or the week after, because predominantly a lot of this is marketing. A lot of the systems we've built are quite free flowing in the app. It's just going to be the admin side of it, keeping up with jobs and making sure people are attending jobs, and if they're not, being able to pick up the phone and call the client, because it's going to happen. It's like if you order an Uber and it doesn't show up. We will do our best to get a trade there, but there's going to be scenarios where we can't get someone there, and I'd rather just pick up the phone and not leave a stale taste in the customer's mouth and say, "Hey, we did our best to get someone there," and maybe give them a discount code for next time or something like that.

Kane: So in that scenario, would you potentially attempt to get another tradie, or no? Because then that bypasses the whole vetting process.

Dan: No, I would ring around the trades that are on the app. A lot of them might not have seen it or they're busy, so I'd almost start ringing around asking for a favour. Hey, is there any chance you can go out to this job?

Dan: So we'll do everything we can first to get someone there, and if it's just not going to happen, then yeah, we'll let the client know.

[15:52] Launch night for 150 people

Kane: So you've got a launch party tomorrow?

Dan: Yeah. [laughter] Obviously doing a refrigeration apprenticeship didn't really prep me for doing public speaking in front of 150 people, but we'll have a go.

Kane: What's involved? I think it's about 150 people signed up.

Dan: Yeah. I think we'll probably land at over 150 now. I'm hoping we land somewhere around there, which is more than I expected to get. I was going to be pretty stoked if I got 100 people there.

Dan: It's hard to go into detail like we have just now on the app, of how it works, the ins and outs of it, over social media, which is how most of the trades have registered. So it's building a bit of hype around the app and getting people in front of each other. I get to meet a lot of the trades that I haven't met yet, and we're doing the prize giveaway at the end as well. But it's to go into a bit more detail of how the flow of everything works. I've got some real images of the app up on the screen so I can show them the flow of everything and answer any questions that people have as well.

Kane: Do you have any trades registered?

Dan: Yeah, I do. I had a target in mind of how many tradies I wanted for when I launch. I'm launching with plumbing, electrical and air conditioning, and then as the app goes further, we'll start bringing in other trades like carpenters and all sorts of trades. At the beginning I thought I wanted 20 of each trade to get started. But I've signed up quite a lot of companies that have multiple vans on the road. So one plumbing company with 20 plus vans on the road. And I don't want to cause an overcrowding effect either. So I've got to a point now where I think I'm pretty comfortable with the numbers I've got on trades. Obviously if people still want to sign up, we'd really love to have more people on there, but I've got to get to a point where I start turning the marketing around and it being about clients and bringing the work in.

Kane: And I suppose the more you get, then you can focus more on area specific, because someone puts a job on, you're going to limit it to a certain amount of people. It's not going to go to, hypothetically, 20 sparkies on there and a customer puts a job on that can't go to 20 trades, because that would just be a bit of a fight to try and get that job.

Dan: Yeah. For the companies that have more guys on the road, it would be the scheduler or someone in their admin team that gets that notification for the job. If it's a setup like that and you've got people scattered everywhere, you will get an automatic notification that there's a job, because you might have someone in the area that's finished early and heading back to the office, where you can say, "Hey, go check this out. They've got no power." Or something like that.

[17:57] Where the T2U idea came from

Kane: Right. And where did the idea come from for T2U?

Dan: I've always kind of had ideas for something, but I think it came from me wanting to get out of what I was doing and make a change, and then I started working on where is my knowledge base at, and what's something that I feel like I could make a change with. I was driving along one day and it came to mind. I was like, why not something that can create a network for people to be able to get in touch with more people? So yeah, it was just driving along, I had a thought, and then I put it into ChatGPT and said, is there anything doing exactly this at the moment in Australia? And there wasn't. So I was like, I'm going to go for it.

Kane: Was there nothing as close to what you're doing at all?

Dan: Not really. There's a few others that are starting to pop up that are similar, but all of us are a bit different in how we do it. With what I'm doing, I'm managing some payments on the callout fee and all that sort of stuff, so it's a little bit different. I suppose the selling point is going to be that point of difference, with what you just said. I think the vetting process is going to be like

Kane: The number one thing. So just thinking around trades, and

[20:05] Why T2U vets trades and how it's priced

Dan: Yeah. I've seen on a lot of the other ones you can put in your details and bang, you're accepted as a tradie straight away, whereas with ours it pops up saying we'll get back to you in 24 to 48 hours. So we actually get a bit of time to review, make sure the documents are real. It's not just going to be that anyone's going to be able to get onto the app.

Kane: And is it a subscription for the trades, or is it per job?

Dan: Subscription. We wanted to go away from that cost per lead type scenario. Essentially, if you end up winning work through the app, whether that be a whole house rewire or a hot water changeover, whatever, we're not taking any of that. Some other systems try and take a clip of that ticket, whereas with us we don't get involved in that transaction. We just connect the two parties and then the tradie takes it from there.

Kane: What about from the customer's end then? Do they pay a membership to have the app?

Dan: No. At the moment it's in the app that they do, to get a quote. I'm sort of sitting on the fence with this one and still trying to work out exactly how I want to do it. Originally the plan was to get the clients to pay a small $5 fee for us to give them three vetted quotes. The idea behind that wasn't so much financial, for me to make money. It's a way of trying to weed out tyre kickers and wasting trades' time. If you're thinking about getting a hot water unit done and it costs nothing, you've got no reason not to just click the button and waste three trades' time. But if you pay $5, I think it shows intentions are real and you actually really do want to get the job done. At the moment it is still in there that they pay a $5 fee, but it's kind of hard to come out into the market and tell people they've got to pay for quotes.

Kane: Yeah, I think it's a great idea, but I think you may need to have a bit of a reputation and backing first. And to get a T2U verified tradie, is it $5 per job or per

Dan: I suppose per quote.

Kane: Scenario. Yeah, that will weed out tyre kickers.

Dan: Yeah. At the beginning, just to get growth, I think it's going to be completely free, but down the line it could be something we'll bring in.

[22:12] Why networking matters

Kane: Do you think networking has become more important recently?

Dan: Yeah, I think it's always been super important. But with the way the world is going with AI and things like that, I think it's really important to keep those personal relationships. I think relationships are one of the cool parts of being in business as well. I've made so many cool friends. It wasn't a transactional relationship, they just became real friends, builders and consultants and things like that that I had relationships with. So yeah, I think you are your brand. I think it's important to be in front of people and represent yourself.

Kane: Do you think it's common among trades to know and understand the benefits of networking?

Dan: Eventually they do understand it, but at the beginning not so much. When you're starting out, you're so focused on delivering project by project that you're not stepping back and looking at the bigger picture and looking at your business as a project. And if you stand back and look at something like, this whole business is a project, then you can go, obviously if I want more clients I need to network and go meet people and build a bit of a brand. Even with T2U and what I'm doing, I'm doing founder content and stuff. I think it's important to not hide behind a screen, to represent who you are and put yourself out there.

Kane: And I think that's so uncommon in trades businesses, like we spoke about before. It's obviously pretty awkward when you first start doing it.

Dan: Yeah. I've only started networking properly probably in the last 12, 24 months, because it hit the fan in the business and I started asking questions of bigger businesses, specifically over east, and it was amazing how much information they would give you.

Kane: And the stories they would tell you that are very similar to what you've been through yourself.

Dan: Yeah.

Kane: So that's why we started Hypotential, which has a few arms off it. One is a private network for tradies, for that reason. We're finding it just hard to get people involved, because they're like, I don't have time, I don't really understand what's involved. So I think where there is none in WA, there's no

Dan: I'd like to know more about that, because I value it so much. I think it's so important. One is to get yourself around people that are in a similar mindset to you. I can't express that enough. It's being around other people that want to help, that want to grow and want to do things. I think that sounds like a really, really cool idea. Maybe I'd even want to be involved as well. I think I always just assume that people don't want to talk about it, especially if it's in the same industry. If I approached another electrical business, I just always assume they'd be like, I'm not speaking to you about my business and what I run.

Kane: It's not at all. Obviously some people are, but most people aren't. They're more than happy to share their stories.

[25:20] Passing on knowledge and business coaching

Dan: I've always been super happy to. I've had friends that have gone out and started their own air con businesses and I'm like, what can I do to help you? I learned things the hard way. I started when I was 20 years old, so the things that I learned the hard way, if I can save a mate going through that or bypass that mistake, then why not? It's definitely good to help. And I've had people pass down their knowledge to me. If you look at it like, we're all in the same industry, we're all trying to achieve the same goal. I think some people are just a bit funny with their ego, and it might not be for them, but I definitely get a lot of joy out of being able to pass on knowledge to people.

Kane: Did you have any business coaches that you used?

Dan: I did, yeah. In the early days I had a guy called Anthony. He came in for about 6 months and he helped set up a lot of systems. With him, we actually did a rebrand, changed our logos and completely changed the website, and we actually got a process in for sales to track them. This was a long time ago, probably 10 years ago. It was a lot of spreadsheets and things like that, but now there's client relationship management systems that help you do that. But even just being a tradie, understanding that there should actually be a system for this was really interesting. I was probably only 24, 25 at that time.

[26:50] Tech startup versus a trade business

Kane: How different has it been with a tech startup compared to a trade business?

Dan: It's different. I think the stress isn't there, as in it was big, because the projects go for like two years and things like that. It's really hard to time and keep good consistency for projects, because jobs get delayed by six months and you're like, "Oh no, I had that project manager lined up for that." So it was just a really stressful thing. But getting into what I'm doing now, I'm obviously in the deep end. I'm learning a lot and I'm just glad I've got the development team that's there helping me and guiding me along.

[27:26] Why he didn't build the app with AI

Kane: So, who's doing the actual build of the app?

Dan: It's an eastern states company called Appate. They're a bit more like a founders' startup coaching system, where they don't just go, "Here's your app, good luck." They basically guide you. They're the ones that are actually helping with marketing and everything at the moment. So it's a full plan to get it from when I very first started as an idea right through till launch. Their idea is that you do take off into the sunset. They're not trying to hold you there and keep you there. Their business model is to get founders established and started and then let them go.

Kane: How many people have said to you, why don't you build on AI?

Dan: Yeah, obviously I went down that path and looked at it, and one thing I can say is that I am super happy that I didn't. I can pretty much tell when I'm on an app now, within 10 seconds, if it's an AI app. For some things they are good. You can build a basic app with it. But for what I'm doing, the touch and the feel and the user experience of what I'm building, even what I've already got to touch and feel now, it's much better and smoother and seems a lot more like quality. Everything I'm trying to do in this business, I'm not trying to go cheap on. I want to do it right from the start and come out with a good reputation.

Kane: Yeah, I agree. I think that's a scary thing with AI. We're talking about it. We just built a new website.

Dan: Yeah.

Kane: I think the design was done on AI, and you can make the website through AI. Then as soon as there's a problem or you want to make changes, or the coding, I don't understand it as much as the team do, but there's just so many issues that can come up, especially with yours. It sounds like it's going to be complex with payments going through it.

Dan: Yeah.

Kane: Vetting trades, having their personal private information. It sounds expensive.

Dan: It is expensive. Yeah. But I wonder what would be more expensive is putting in all the work and building a business on a

[29:33] The cost of a cheaply made app

Dan: cheaply made app, and then getting to a point where, like you said, I think it's a similar thing with the website, where something goes wrong and then you've got to go back to the drawing board and build something from scratch from the start. So I think the app is the foundations of the business. If that falls apart when you've spent all this money on marketing and getting established, it could be a catastrophe. So yeah, there's not a second that goes by that I regret not using AI. That's how many people have said that to me, and I'm sure with the app you've built, you've probably heard that a lot as well.

Kane: Yeah. Like I spoke to you the other day, we have been building an app for like 2 years. It's been a bit of a fun project and very expensive. Our business, Smartfix, has changed so much that the app probably can't really be used unless we change it. But I'm not just going to pump another 50 to 100K into that. So it's a

Kane: Yeah, it's been a

Dan: No, it looks really good. I've had a bit of a play on it. Looks really

Kane: Yeah, it looks really good. We might use it one day, hopefully.

[30:35] Launching with plumbing, electrical and air con

Dan: I think even now, I've got a little bit of a background on your story from your podcast and stuff that you've been doing, but I reckon it still sounds like a really good idea, even if you've got fewer trades. You've got rid of one of the trades that you were doing before.

Kane: Back to only electrical and air con now.

Dan: Yeah. Okay. But it still works for that, doesn't it?

Kane: It would do. It would do. We haven't really got the time to actually test it. It's on the App Store now. To actually run through scenarios. So

Dan: Yeah. Cool.

Kane: Ours is obviously more, if our idea at the time was, we had 15 different trades and services, full-time employees within the business. While our idea was not, I suppose it's similar to yours in a way, that the customer will put their job on, but it's Smartfix does all of the jobs. So it's obviously very different, because it's just our app. It's just our business.

Dan: Yeah.

Kane: Now that we are back to the one trade, it's a bit like, would a customer download an app for one trade? I don't know. I think maybe, because it's electrical obviously.

Dan: Yeah. It's probably the most commonly used trade in the house, I assume. That's kind of why I'm launching with plumbing, electrical and air con. They're the most familiar trades to my background, and I think they're probably the most common for urgent fixes. If you've got no power

[31:37] Servicing air con before summer

Kane: It's not good. If you've got water coming out your ceiling, it's not good. If you've got no hot water, it's not good. And obviously it doesn't work in summer.

Dan: Air con in summer is probably the worst one. People really lose their minds when their air con stops working in the middle of summer.

Kane: Why don't people service their air cons before summer?

Dan: I know. I just I've never been able to understand it. Getting phone calls the second it hits 40°. "Hey, hey mate. How you been? I need to get an air con." And I'm like, dude, we've had the whole winter to get this sorted, and now it's like, need it done by the end of the week. "I've just had a new baby." And I'm like, my

Kane: That's literally the one thing I was going to say. It's always they've either got a baby, or it's an elderly person, or someone's sick. I'm like, service it beforehand. No marketing campaign we've ever tried has actually worked for "service it before summer."

Dan: It is cheaper to service it before summer. If you wait till summer and we're flat out, it is going to be more expensive.

Kane: Yeah.

Dan: It honestly blows my mind, but it's just something I had to get used to.

Kane: Why are you like this?

Dan: But yeah, with the app, a future development thing is if someone gets their air con serviced through the app, we want to build in reminders and things like that. It's been 6 months since you had your air con serviced, or if we know that that's an air conditioning customer, we'll try and send them things before summer. Not that they'll probably do anything with it, but at least we tried.

Kane: So from your expertise and your refrigeration experience, does it actually prolong the life of an air con if you service it on a regular basis?

Dan: Definitely. Yeah. Obviously it comes down to how much it's being used. I know people whose air con doesn't turn off all year round. They've got a big house and a lot of kids. My ex-business partner, he's got four kids and I don't think his air con ever turns off. He just said, "No, we just leave it on all the time." So I'm like, "Your power bills must be through the roof." But if you're using it a lot, then you've got to think, bad air flow is just putting more strain on the motors. You've got the fan coil motor, and it's just not good for anything, and your bills go through the roof because it can't do its job properly.

Kane: So it's overwork.

Dan: Yeah, it's overwork. Especially a pre-summer service. I don't know how many guys actually put gauges on units these days and check them. Maybe they're just checking pipe temps and things like that, or air off temps, so they're not having to connect gauges. But you should be able to pick up that something's not quite working right and look into it a bit further if you need to. So then when it does hit 40° on Christmas day, you're not left in a bad situation.

Kane: Hopefully we can change the industry with some more marketing out there, change people's mindsets.

Dan: Yeah, we're trying to do that. That was part of our app thing as well, those reminders. We do it now. Twelve months after we do an air con job, we call them and say, you're due for your service. This protects your lifetime guarantee with our work, obviously.

Kane: Yeah. It protects the manufacturer's warranty to some degree, whether it actually does or not.

Dan: Yeah. Manufacturers seem to obviously do what they want.

[34:45] Bigger isn't always better

Kane: Well, a lot of the time with the manufacturers, I find especially in the air con space, it doesn't matter how good a job you've done, they'll just try and pull your work apart.

Dan: Yeah. [laughter] I've seen it so many times and I'm like, man, that bit of duct strapping is not going to change the fact that your PCB is faulty, you know. [laughter] But I think obviously if they're keeping it up to date with service, there's no comebacks on the manufacturer being able to say that it was that.

Kane: What's one of the biggest lessons you've learned in business?

Dan: Bigger's not always better, I think. I've learned that getting bigger and getting more guys on can start to have a negative effect in business if you're not disciplined with taking on work, because you can quite easily get into the habit of trying to keep guys busy, and potentially dropping prices and things like that to keep guys busy. And then what comes from that is you have a whole lot more work, a whole lot more staff, and you're not making money.

Dan: So I think that's definitely a lesson I've learned in my journey, and where I've kind of got to now. I'm still building cool rooms and freezer rooms and stuff, and it's just me and there's no overhead, and I just take on jobs as they come in. I've explained it to a few people. Having a massive business was like having a bucket with a hole in the bottom of it, and you just had to keep pouring work into it. And now all of a sudden it's like, I pay everyone at the end of the month and nothing changes.

Dan: So yeah, there's obviously a balance point, and it depends what your overall goal is and what you want as a business owner, but definitely trying to be disciplined with not just taking on anything and making sure that you've got healthy margins in the jobs you're taking on.

Kane: So true. Saying no to things.

Dan: Saying no, that's been the biggest killer. The best thing for me was getting to a point where, and it was actually my ex-business partner that was really good at that, he was just like, "No, we just won't do it." And then quite often they'll still give you the job anyway.

Kane: Like you say, with regards to

Dan: Yeah, with pricing. "Hey, is that the best price you can do?" And normally I'd be like, "Oh, I'll look into it and try and help out." And then quite often you just say, "Yeah, that is the best price." And they go, "Okay," and take it anyway. So I think being really young in business as well, at the start you're kind of like, I'll take on anything, I'll do whatever. It's not a good attitude to have. I think you've got to hold yourself in high regard. And if you know you're doing good quality work, you'd rather sit at home than go to work and not make money.

Kane: It's so true.

Dan: Yeah.

[37:52] Shopping around on price

Kane: We literally had a phone call this morning. I was just covering in the office. We had a job yesterday, we quoted one for today. Obviously we've got a good reputation, and our pricing is, we're not the cheapest out there. So this guy had called around after we left. He paid us a deposit, and a few vans gave a cheap price over the phone. Then he called the office, spoke to the girls and said he wants to cancel, and I called, just wondering what's happened. Have you called around, because I know

Dan: Happens all the time. They'll call, "Hey, this is the price I've had from some other guys," and they're like, you're expensive. And they

Kane: Yeah. Long story short, I just said, "Well, they're going to undercut our price on the phone no matter what. We are one of the biggest businesses in Perth for residential trades." What is it? Is it the price? So yeah, it's like half the price. I'm like, "Have they been out to site? Have they seen photos?" No. I don't want to have any dodgy work done. Look, not everyone does the job properly. Some people do cut corners. And yeah, we ended up keeping the job for the same price. I did offer a discount, because I still do the same thing now. We've got two guys booked there for half a day. I'm like, that's such a nightmare if we don't do this job, so we can do a discount. Basically he ends up saying, don't discount it, just do the job properly.

Dan: Yeah, good on you. 100%. Everyone's like that though.

Kane: No, they're not. They're not.

Dan: But yeah, it's so right. If you go to another trade with a price, especially the guys that are probably in that mentality of needing to win work and they're desperate, they're just going to go, like, I've heard horror stories even in the bigger tier 2 game, where another competitor has gotten a price and said, "Whatever they're doing it for, take 100 grand off it. I'll do it for that."

Kane: 100 grand.

Dan: And they don't even know what our margins are. They don't even know what we've got in the job. So I'm like, that is just nuts to me. What if we had stuffed up our price and you're doing it for 100 grand less? Crazy. But yeah, I think you're always going to get people shopping things around. Obviously he sounds like a good guy, and good on him, because at least he's going to get the job done right and it'll save him in the end.

Kane: It will. And that's what you said, there will be people who shop around. I think people should shop around. I think they should get quotes if it's a high value job.

Dan: And that's what T2U is. You can get three quotes easily enough, because it is important to get something comparative. But I think it's really important for clients to know as well, if you've got a price for 15 grand, 14 grand, and one for eight,

[39:58] Educating clients on quote gaps

Dan: you've got to be a little bit educated here and know that something's missing or they're doing something wrong, or potentially they're cutting corners or they've missed something. So I think it's good to try and educate clients on that as well. Within 5 to 10% is pretty normal. If someone's just 20, 30, 40% less than the other guys, then

Kane: You need to be asking questions.

Dan: Don't just think, oh, I found a bargain, because it'll cost you.

[40:30] Quoting on site and residential work

Kane: So what's your opinion on quotes on site? I know some smaller jobs can be quoted over the phone. What's your opinion on going to site to quote jobs properly?

Dan: Especially if you're going into a residential home that someone's living in, I think you have to go there and have a proper look, especially for air conditioning, pick a good spot for the condenser, and even just go through what the client actually wants. I think it's really important. I never really did retail, ever. I did a lot of residential. We had a residential part of the business that was doing like 450 ducted systems a year at one point, but that was all new builds working for a high turnover builder. So we didn't really go to site for that, because they were all pretty cookie cutter.

Kane: Rough and smooth, those jobs for a builder. It is, this job's cooked, this one's easy. You can't charge more and charge less. It just is what it is.

Dan: Yeah. We would have a set amount of cable runs and pipe runs, and it was win some, lose some. Some jobs are longer, some jobs are less.

Kane: If you overcomplicate it too much, then in a high turnover, high volume model like that, you can't be wasting too much time on the nitty-gritty things.

Dan: Especially because the builder would just be like, I'll just get someone else.

Kane: Yeah.

Dan: And getting that company on board was a huge part of it. Even though in the last 3 or 4 years I let the actual residential arm of the business go, because I had my screens, I was working on tier 1 projects over here, and then I had someone complaining about a water leak on a wall over here, and I was like, the contrast is just too big here. So we ended up putting all our focus into the larger side of the business and let go of the residential. But it was a huge key to the growth, because it's what gave me consistency in what I was invoicing weekly, that enabled me to go, okay, the ship's kind of balanced here and now I can start looking into other avenues and grow the business again. But before that, it was just rough oceans out there.

[42:02] Juggling focus across two businesses

Kane: You dropped the word in there, but I was going to say, what are your thoughts on focus? Because what you just said, between looking at those massive jobs compared to the small job,

Dan: It's like two different businesses completely.

Kane: Yeah. So what are your thoughts on focus?

Dan: To be honest, at the moment it's a bit of a struggle of mine, because I'm building this app on one screen. On the other screen, I've got cool rooms and freezer jobs that I'm delivering and quoting right now. It is hard to segregate your time, because I'll be working on the app one minute and then a builder or a client will call me about the cool room stuff and then I'm back in that world again, and it is difficult. I kind of thought when I first started it, I was like, oh yeah, this will be easy, I'll do two days on that and three days on that, and it just doesn't work like that. So it is a little bit mentally draining and hard. I suppose it comes down to if you want to operate at that level, you've got to have good sleep and look after yourself from a health point of view as well, because you can't operate at a high level if you're not looking after yourself.

[43:05] T2U vision and launch timing

Kane: What's your goal with T2U?

Dan: Oh, the vision's big. National eventually. I think I've probably developed maybe one tenth of where I see the app going, and I've just got to get it to market, otherwise I'll just be in development forever and it will never actually hit the market. That's the thing.

Dan: Even now I'm coming up with so many ideas. I'm just building a list of, oh my gosh, that would be awesome to have, that would be awesome to have. But I've got to just stop. The only changes and variations that I'm making to the scope right now are what is non-negotiable. I'm like, "Oh, this has to happen. This has to happen." But otherwise, everything's just a wish list, and each month or whatever, I'll do updates as we're live. But at some point I've got to stop haemorrhaging cash into it and start trying to balance it out where it's at least covering itself.

Kane: I suppose the same thing. Balance the ship a little bit and then

Dan: Then look forward again.

Kane: When do you think you'll launch to the public?

Dan: I think it will be late October, early November this year. I should know in the next week or two and I'll be able to confirm that date. But I'm thinking probably first week in November.

Kane: Cool.

Dan: Yeah.

Kane: Good timing.

Dan: Yeah.

Kane: Before summer, Christmas. Everyone wants all their urgent jobs done before Christmas renovations.

[45:11] Summer demand and pricing

Dan: And we're never going to be able to get enough air con guys to cater for that.

Kane: No, you won't. But hopefully you can help fill a bit of a gap.

Dan: Yeah. You obviously have contacts and

Kane: Sometimes when we do these emergency jobs, people are waiting 6 to 8 weeks to get someone to come out and fix their air con, or even look at it, not fixing, just going and assessing the issue.

Dan: I think as well, on the air con side, with paying people urgently in summer, that is when you really do as a client put yourself at risk of getting ripped off. I would never have a summer tax or whatever, because I've always believed in just being consistent and honest. But I do know 100% there's guys out there that are so busy that they just chuck a big number on their price, and their attitude is, if they want it done, they'll pay for that.

Dan: And if not, it's not worth my time, which I get as well, if they're going to have to work a Sunday or something to get it done. But I think from clients, it's like, try and be prepared. Be prepared for summer. It comes every year. Try and get your system sorted before.

Kane: Yeah. 100%. Our business is interesting, because we have our pricing during the slower seasons. We discount quite heavily. Like you sort of said earlier, we still do that, where you do jobs cheap just to keep the guys busy, because there's so many guys. But then as soon as summer hits, we're so flat out that we don't discount.

Dan: Yeah.

Kane: So it is a bit like that.

[46:50] Retail air con installs and warranty

Dan: And customers have no issue paying. Sometimes it really annoys me, the big retail shops that sell aircons with a $600 install price. That really annoys me.

Kane: Oh, it's so bad. Because then they go to the shop, they buy the air con, get the information from the subcontractor, and the subcontractor's unavailable for like 10 weeks because they're doing all these jobs basically for free.

Dan: Yeah.

Kane: Then they come to us and say, "Oh, we've got an air con. Can you come install it?" Like, "Yeah, we can come install it." You're looking at a minimum of $1,600, because we still have to supply the back-to-back consumables, work and so on. They're like, "What?"

Dan: Yeah.

Kane: So they said 600. I'm like, "No, unrealistic." And the sad thing about that as well is a lot of clients get told, "Yeah, 600 bucks for an install." They go, "Yeah." And then the tradie gets there and that is for back to back, like no brackets, no feet, just as basic as it gets. And then a lot of these installers go, "Oh, that's an extra bend there. Oh, you need brackets for this. You need this." And then all of a sudden that price is no longer $600 and it's way more anyway. And then the tradie's on site, so the client's like, "I just need to get this done." So yeah, I think they definitely make it seem like it's going to be cheap and easy and quick, but it's not always the case.

Dan: Yeah, I think those shops shouldn't be able to quote prices. I think that's ridiculous. If you're selling the product, sell the product, but don't try, because it's not their tradies. If it was their tradies, okay, if that's your business model and they can employ guys to do jobs. But if they're shopping outside to the dodgiest subbies, that's ridiculous. And it causes, for the clients going to one of these places and buying the unit, there's no full ownership there by anyone really, because the wholesaler is going to be saying, "Oh, well, it must be an install issue." The installer is going to say, "Oh, I didn't provide the unit." No one's got any ownership of it. Whereas if you just go to an air conditioning company, get them to supply and install the unit, they've got ownership of it.

Kane: And it's one person to call. "Hey, the unit you put in is not working. Come fix it."

Dan: Yeah.

Kane: On that note, because we have that issue so often, it's like, yes, we're going to charge you 10 to 20% more for the unit because you're on markup, but as soon as there's an issue with that, we are coming out there, we're arranging warranty, we're doing all of that for you. It happens a lot, especially with the cheaper aircons, there are issues with them. But if the customer supplies the air con and we install it, yes, we go the first time to make sure it's not an install issue, but then it's like, you need to contact warranty now. You need to get the serial number, the model number, and the manufacturer comes out and blames the installer again, and it's just a nightmare.

Dan: It turns into an absolute nightmare.

[49:28] Using AI in operations

Kane: Technology is changing in every industry. How do you think that's going to affect T2U?

Dan: I think technology is really good from an operations point of view. With AI, I think if you can get AI to help streamline things as far as operations, it's great. But the industry we're in is still face to face. It's still customer facing. I think it's really important to still keep that as a high priority in a business. Presentable guys, you being the face and taking ownership of the business is still really important. But I think I've picked a good time to build an app like this, because there is a lot of things in the background that are, I'm already implementing AI into both of my businesses, but only from an operations point of view. I'll never let AI send an email for me, or contact people on auto follow-ups for newsletters and stuff. It's really important to me to stay authentic and keep personable with people, I think. But with T2U, it's definitely going to help me advance and potentially keep overheads down, because I'll be able to have AI monitoring things in the background and just giving me feedback, as opposed to me having to sit there all day watching what jobs are coming up and who's gone to what. I can have AI looking into that. I think like you mentioned earlier, if you're on an app, you know within 10 seconds whether the AI built it. Same sort of thing in business, if you do have AI

Kane: I actually saw a message this morning. I think it was some sort of business message on our Smartfix account, about a 5K run, and our AI bot had responded saying, "Oh, we're not going to be able to commit to this 5K, but if you need any electrical or air conditioning services, let us know."

Dan: Yeah. I was like, "Oh gosh."

Kane: You have to monitor that stuff more.

[51:05] AI monitoring emails in his cool room business

Dan: Yeah. In my cool room business, I've got AI monitoring emails. It doesn't send anything on my behalf, but a lot of the time it's pretty good, the responses it comes up with. I just had one the other day where someone came back and said, "Oh, this drawing doesn't have dimensions of the rooms on it. Can you send us the dimensions?" And it went back through the drawings and everything and got the dimensions of the room and put it in my drafts, ready to hit send. I saw it was in there as a draft and was like, how good's that?

Dan: I paid an AI consultant to do it for me, because I'm fairly technical, but that's a bit beyond my pay grade. So I paid a guy to come in and implement a lot of things into it, and they stick in the background. If you've got any issues, they help.

Kane: But there's a lot of AI consultants at the moment. How did you find one that you trust?

Dan: I obviously started getting smashed with ads on them, and I found a guy, and it was just what he said in a video that he put out there where I was like, "Oh, he's literally speaking to my soul right now." That's exactly what I need. And if he knows that, then he's obviously done a lot, maybe in the trades and services space. What he's implemented is really helping me streamline my tendering, how I tender for jobs.

[52:37] Checking the AI's numbers

Dan: So it's doing a lot of the admin side of that for me. It gets me to checkpoints and then I still have to review it and make sure that the margins are where I want and it hasn't missed this and it hasn't missed that. But it's the whole admin side of getting the prices back and putting them into a system, which is just a lot of data entry. It's doing all of that for me.

Kane: That email draft you just said before. Did you go and check those measurements?

Dan: Yeah, I did.

Kane: I was going to say, did you go and check to make sure?

Dan: Yeah, I did. And I still, I was actually up quite late last night pricing a job and I didn't have one of the prices I needed. I've got a tool that I've built in Excel to price it, but I used AI to help me. I was on Claude talking to it to help me get this number that I needed for the tender that I was doing last night. And when it spat it out, it was something in me, I just couldn't trust it. I had to double check. And it was pretty close. I think Claude said it was 30,000 and I worked it out to be 31. For a bigger tender like that, it was like, oh, that's fairly close. But that was pretty much just me talking to it saying, "Here's the drawings. I need this. This is how much it is for this," and it spat the number out. But I think it's definitely going to take a while to build that trust, and it's going to take a while for the systems to be good enough.

Kane: Yeah. Consistently. And then that trust thing is always going to be like

Dan: Yeah. That's why at the moment it's just operations, getting data. Every bit of the system that I've got, once it brings over, say, an electrician's pricing or the fridgie guy's pricing or whatever, it also has their attachment there so I can open it and still review what they've priced. I've got to go in and see if the electricians allow the lights in the cool room, or read through their stuff. There's only so much you can get it to do, but it's definitely streamlining things for me at the moment.

[54:42] What to do first in a new business

Kane: If someone was starting a business tomorrow and knew nothing, what would you tell them to do first?

Dan: That's a pretty tricky one. I think the first thing I would say to do is start putting yourself out there. You've got to get set up. I mean, the first thing you'd have to do, depending on what sort of position you're talking about, is get set up, get insured, get a logo. And then maybe start with some ads. Maybe join a networking group where you can get yourself around like-minded people. I remember years ago I did a thing called BNI, which I don't do anymore, but for a while there I was getting jobs out of it and doing bits and pieces. So probably start networking, I'd say, would be the first thing I would do.

[55:20] Networking groups like BNI

Kane: I think those groups, there's obviously pros and cons with ones like that. For me, when I'd done similar ones back in the day, I didn't really get work from it, but I met other people. I met my first finance broker in there, the guy that built our website. So it's good for that. It is obviously sometimes a bit lead-gen-y, a bit salesy.

Dan: Yeah, it is.

Kane: If you're cautious in that, you just

Dan: Yeah. I actually met a lot of people through it as well that weren't clients, but I ended up using, I'm pretty sure, one of my bookkeepers that I used for a long time was in there as well. Same thing. I'm pretty sure I got a website built from there as well. So it can put you in touch with people. But I did get work from it as well. There were a few builders and things like that and I did a few bits and pieces for them. But the one that I was in was pretty far away, and it got to the point where I was like, I don't think it's worth my time travelling that far to go to these things and then coming back. So I got out of it.

Kane: I think some of those BNI ones were like 4 hours long, I'm pretty sure.

Dan: Yeah, it's a long time. But I definitely think, maybe not exactly BNI, but some form of start networking. Start telling people what you're doing. Get your name out there. Get it out to your network that you've started a business and this is what you're doing. That would probably be the first thing I would do.

[56:45] Don't burn bridges

Dan: And also, when I started when I was 20, who I did my apprenticeship for was always like, "Oh, if you ever need work and you're quiet, you can just come sub for us for a day or two." So having something like that, if you've got a dead patch and you've got a mortgage, you need to be earning money, maybe try and have a bit of a fallback where you can go, all right, I've got Thursday, Friday, I've got nothing on this week, go do some subbing and just make some money, until you can build up enough of a client base to be out fully on your own.

Dan: And I think that's where networking is so important for exactly that reason, because even if they're in the same industry as you, that's what you want, because if you are quiet and they've got a big job, great. You can't just work with other trades or other businesses that are outside your industry. I think it's important, and that's why it's good, I suppose, to not burn bridges. Even with, he's actually coming to my event tomorrow night, so I haven't worked for him for 16 years and we're still friends, and he helped me get my business started. There's another guy that's also coming down. They would ring me up and go, "Can you give us a day or two here?" And if I could, I would, and that just kept me busy. So it's good to not burn bridges, because you never know when they might be able to help you out as well.

Kane: Yeah, 100%. Is there anything we haven't covered that you think is important?

Dan: Not really. I suppose I'll just say with T2U, for the launching or founding trades, it's free to pre-register and get on there. It's 3 months free. So it's a good time to jump on board and have a bit of a dabble and see how you feel with it. That's just for anyone that joins up before launch. Other than that, I've got to go stand on stage tomorrow and represent myself. So we'll see how we go. But I think we've covered everything.

Kane: Well, be good.

Dan: Yeah, we'll be right.

Kane: Just realised our Sundowner event has been rescheduled, so I reckon I better come down.

Dan: Oh, epic.

Kane: Yeah, that'll be cool. Awesome.

[58:50] Where to find Dan and T2U

Kane: Finally, where can people find you and T2U?

Dan: So, website, which is t-2.com.au. And then social media, Instagram, Facebook. If you pre-register as a client or a tradesman, you'll get emails just keeping you up to date with things as we go to launch. As the forms come out to register properly, you'll get them. So if you really want to follow along the journey, follow the social media pages and just pre-register as a tradesman or a client, and you shouldn't miss anything.

Kane: We'll link them below, but yeah, your founder content, we'll keep monitoring.

Dan: I'll keep doing the founder content as well. Hopefully giving some people a few laughs.

Kane: Cool. Thanks for coming on.

Dan: Awesome. Thanks very much, mate.

Kane: Cheers. Thanks for tuning in to this episode of Unlocking Business. If you've enjoyed this conversation, please take a second to like, subscribe and follow our channels. It really helps us to bring on more guests and have great conversations. If you'd like to connect with today's guest, the details are in the description below. I'm Kane Tyler Smith. I'll see you on the next one.