The Home Service Expert Podcast
Harnessing AI for Financial Insights with Mike Barnhart
Fri, 02 May 2025
In this conversation, Mike Barnhart, COO and CFO of Eco Plumbers, discusses the essential role of hope in leadership, financial growth strategies, and the importance of curiosity in business. The discussion also covers customer retention through membership models, the importance of incentive plans, and effective budgeting practices. Additionally, Tommy and Mike delve into team development, the use of technology for efficiency, and managing expenses for profitability. The conversation also highlights the role of technology in improving sales processes and the necessity of effective recruitment and training to build a strong workforce. Don’t forget to register for Tommy’s event, Freedom 2025! This is the event where Tommy’s billion-dollar network will break down exactly how to accelerate your business and dominate your market in 2025. For more details visit freedomevent.com 00:00 The Role of Hope in Leadership 01:43 Introduction to Mike Barnhart and Eco Plumbers 02:11 Financial Growth and Strategic Planning 03:00 Greenfield vs. M&A Strategies 06:55 The Importance of Curiosity in Business 08:41 Leveraging AI for Financial Insights 10:54 Rebranding and Expanding Services 12:20 Marketing Strategies and Storytelling 15:13 Navigating Economic Challenges 16:40 Membership Models and Customer Retention 19:51 Incentive Plans and Employee Engagement 20:57 Key Performance Indicators in Business 23:06 Budgeting and Financial Planning 26:10 Top Grading and Team Development 28:55 Utilizing Technology for Efficiency 30:43 Revenue per Employee and Operational Efficiency 32:42 Managing Expenses and Profitability 36:13 Navigating Pricing Strategies for Profitability 39:20 The Importance of Reviews and Conversion Rates 41:20 Sales Techniques and Customer Engagement 46:09 Leveraging Technology for Improved Sales 51:05 Recruitment and Training for Success 55:07 Building Relationships and Networking 01:00:59 Work-Life Balance and Purpose in Business
Chapter 1: What role does hope play in leadership?
As leaders, we are dealers of hope. And there's this phrase, without hope, the people will perish. And so we have to be providing hope for everybody that's part of our team. And literally, I don't think a week goes by that I don't think about that, is that we as leaders are dealers of hope so that our people don't perish.
Chapter 2: How did Mike Barnhart contribute to Eco Plumbers' growth?
Welcome to the Home Service Expert, where each week Tommy chats with world-class entrepreneurs and experts in various fields like marketing, sales, hiring, and leadership to find out what's really behind their success in business. Now, your host. The home service millionaire, Tommy Mello.
Chapter 3: What are effective strategies for financial growth?
Before we get started, I wanted to share two important things with you. First, I want you to implement what you learned today. To do that, you'll have to take a lot of notes, but I also want you to fully concentrate on the interview. So I asked the team to take notes for you. Just text NOTES to 888-526-1299. That's 888-526-1299. And you'll receive a link to download the notes from today's episode.
Also, if you haven't got your copy of my newest book, Elevate, please go check it out. I'll share with you how I attracted and developed a winning team that helped me build a $200 million company in 22 states. Just go to elevateandwin.com forward slash podcast to get your copy. Now let's go back into the interview. All right, guys, welcome back to the Home Service Expert. Today is a special day.
I've been trying to get Mike Barnhart here for three years. Three years. And we've been talking about just how to get him on the podcast. He's a busy guy. He is acting as the COO, the CFO, shared services within Eco Plumbers. You guys know I hang out with Aaron Gaynor quite a bit, but Mike started listening to the podcast originally.
Chapter 4: How can curiosity drive business success?
Turned Aaron on to me, and little did you know that Aaron's son, Chase, moved out here to go to ASU. So Aaron's out here a lot. We share a lot of business advice on what's going on, good, bad, and ugly. Mike's an expert in finance, strategic planning, performance management. He's located in Columbus, Ohio. He's worked quite a few places. I know Victoria's Secret is my favorite one.
He met Eco's owner, Aaron Gaynor, in 2013 and officially joined the company in January 2015, helping Eco Plumbers grow from $1.9 million to a projected $73 million. Mike is known for his strategic initiatives, financial acumen, and emphasis on data-driven decision-making. What's up, brother?
What's up? I got to fix one of those numbers. We did $73 million last year. We're going for $91 million this year.
Chapter 5: What are the benefits of leveraging AI in finance?
91.
So what's a healthy bottom line on 91? Usually people say 15%. Yeah.
I mean, 15% is a good one. If you can get to 17 or 18, you're doing even better.
That's true. What do you consider failing? Failing.
Under 10.
Under 10. In growth years, one of the things I've realized that I was used to tell myself before I got a great CFO is I keep putting, I was used to say, I put the money back in. Hey, I put the money back in. I put the money back in, but I didn't realize unless it's going into marketing or strategic hiring or some type of like power BI analytics, I wasn't putting the money back in.
I was actually wasting the money and I just lied to myself.
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Chapter 6: How can membership models enhance customer retention?
Our strategy has always been in green fielding. But still, our Cincinnati location, we still lose money in it today. And we're a year and a half in. But our advertising spend is 35% of revenue right now. So you're doing that because when you look at the success story of it, like our Dayton location, we opened up in 2021. This year, we're doing $20 million in Dayton.
And it's super cash flow positive. It's actually the highest margin in location business right now in our business. So it is a little bit different as you're scaling and how that changes.
I've got a business right now, and I'm obviously under NDA, but it would cost us about $30 million to buy. And Cortec, our sponsor, said, would you rather put that money into marketing or buying this business? And I'm like, ah-ha! I'm like, I'd rather put it into marketing, so you're going to give me that over and above what we spent today.
Me and Tom Howard are having a debate, actually, at Rhino about Greenfield versus buy and build or buy and build or M&A. And he likes M&A way better. I feel like you've got to find the right company, and then there's a lot to be done on integrations, changing the culture. You lose a lot of the employees, but you're buying the lead source. I don't know.
You guys haven't done much acquisitions, but if you had to pick and choose, I think Greenfield allows you to take your own shot, call your shot, grow whenever you want, once you build that playbook. And I think it's worth more. If I'm going to buy your company, I'm going to say, man, these guys figured out Greenfield. They could scale to any market at any time.
It is slower, for sure. And you talked to Tom Howard. I remember I asked Tom one time, I was like, tell me about a tuck-in that didn't go well. And he's like, they've all gone well. So maybe some people are better than others. But with greenfielding, it's kind of crazy. Because yes, it does take three to four years to really adopt in the market. But once you've hit that kind of threshold,
It's like you've always been there. It's like you've been there for 20 years, even though once people do pick up your name. And really, I mean, anything that we've ever – I don't know if you've seen this, but any time I've ever made a change or we used to just be plumbing only and we added excavation and we added HVAC, we added electrical, we added other locations.
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Chapter 7: What are the best practices for budgeting?
You have these changing points within your business. And from the minute you make them and you start to enact them, they all seem to take like 36 months to get some traction. Maybe you can make it a little faster than that with as many, as good as you are, but it always has taken me three years to really build something.
Yeah, you know, that's the thing. People overestimate what they could do in one year, underestimate what they could do in five. Everybody wants it tomorrow. They're like, I look at people's budgets, and I'm like, wait, you're going to 3X this year? But you never 3X'd. Like, why this year? And they're like, well, you know, I'm focused now, and you've proven it's possible.
And I think some people, unfortunately, that listen to this podcast are trying to live my dream. and do what I did. But they don't know the sacrifice it took. I don't have kids. I'm not married. I didn't spend enough time with my nieces and nephews.
I don't know what your thoughts are, but, you know, your goal should be to get to an exit that provides for you, your family, and takes care of you, and hopefully get to roll equity and continue to... We like to grow things. I mean, as a COO and part owner of EcoPlumber, I'm sure you're You're like, dude, you're enjoying the growth more than probably maybe trying to hit the finish line.
Mentally, how do you look at the growth of eco?
So, yeah, I mean, you know, to look at it throughout the years, I've been doing it for 11 years now. We've gone from 1.9 million to, you know, 91 million this year. It's been a really rewarding journey, for sure. You know, you do have those kind of pressure points along the way where you do hit these parts of scalability that feel really rough, and then you kind of push through them.
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Chapter 8: How do technology and recruitment impact operational efficiency?
And a lot of that really comes down to the infrastructure that you build within your company. You have good people. You've got the right meeting cadences. You've got the communication rhythms. And for me, it's... You know, I've never stopped being really curious about the business.
You know, for any CFO out there, one of the things that I do every Sunday and I've been doing it for 11 years now, I send out an email to the whole management side and leadership side of the company of here's what I think about last week. And, you know, I go through about 20 different reports that, you know, I've got kind of flagged on my side.
And I look at them and I look at them every Sunday and I start to see trends. You start to understand that business and then you become a really good storyteller. And, you know, you're not going to do that if you're not curious. But once you get able to tell that story, like this year I was actually I went to the management team and I was like, hey, I think I'm going to stop doing this email.
I'm still going to do it for myself. And they were like, no, you have to keep doing this email because it's It really does highlight out what is happening within the business, where we have areas for opportunity, where are there anomalies in the business.
And then you can, you know, I'm not the one that's most of the time fixing them these days, but I'm helping people understand what's happening so they can address it.
You know, Aaron was telling me you guys are playing around with AI, ChatGPT, and you loaded stuff in, and it said something like renegotiate with your vendors or something crazy. What exactly – how are you, as from a CFO slash COO perspective, using AI?
Yeah, I mean, at the basic level, it's like you don't have to – the nice thing about ChatGPT is how easy it is to use. I just load our PDF financial statements in each month. And then I'll ask it questions about it. And I'm pretty good at understanding the business. But it will pull things up that I didn't actually see within the business. Because you can ask really specific questions.
Like I could put January of 24 and January of 25. But it has every month in between. I say, compare this against the last quarter and compare it against January of 25.
by location and i want to specifically look at the sewer department and it'll give you like a really you know detailed answer on on what's going on with that and you know you're i don't know why every cfo doesn't do this because it's the time it takes to do it is under a minute and you know i was doing all the chat gbt yesterday how do you you know i got the app
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