Episode #9: Saving Sunshine: From $1.1 Million In Debt to Positive EBITDA in Two Years with Susan Frew
Change Your Filter with Tall Paul
Key Insights:
- If you have an issue, be transparent with your vendors.
- Be aware of what the younger generation is looking for in an employer.
- Offer pricing transparency & information online.
It’s not what happens to you, it’s how you handle it that matters. Today’s guest overcame numerous obstacles, yet still finished on top. In episode 9 of the Change Your Filter podcast, we are joined by the Business Growth Director at Raincatcher, Susan Frew!
The Beginning
Growing up in New Jersey, Susan Frew soon found herself living across the river in New York City. She spent a good portion of her career working for AT&T. She climbed her way up the corporate ladder and took a promotion in the late 90s which landed her in Denver. While in Denver, Susan started working on the AT&T national team, launching into new markets. Her performance there allowed her to take a new role, stationing her in Saint Vincent and the Grenadines and Grenada in the Caribbean, where she was the GM for those two countries!
Upon returning to the US, Susan made the courageous decision to leave corporate America. She moved to Breckenridge, Colorado, purchased a business coaching franchise, and started helping businesses focused on the skilled trades. As of today, Susan has coached over 20 different trades. Through her work, she met her husband, the owner of a solar company in Breckenridge. She then moved back to Denver in 2012 and started Sunshine Plumbing & HVAC. She grew that company exponentially using her vast experience in coaching along with her knowledge of the skilled trades. All seemed to be going well until the unexpected happened.
The IRS is Knocking on My Door!
Susan will be the first to admit that she was not tending to the oversight requirements of running a business. At her new business (Sunshine), that lack of oversight eventually caught up with her.
What happened? Her primary financial employee was to receive a bonus every month if she stayed on budget. Unfortunately, to achieve this, the employee shorted money that was intended for the IRS & vendors, and instead showed that money as company revenue. This allowed the employee to receive her bonus, while simultaneously showing false revenue growth for the business. Susan had no idea this charade was going on.
One sunny afternoon while Susan was at home, the doorbell rang. She was hand-delivered an official letter from the US Government. The letter stated that her company owed the IRS $498,000, in addition to a $206,000 fine for not providing proper oversight of her financial employee. Furthermore, she owed another $175,000 in debt for the invoices that were not paid to their trusted vendors. Susan soon found herself in deep trouble.
How She Handled It
Many would sulk, look to blame others, or just have the business completely collapse. Susan took a more courageous route. She spent the next week writing letters to every single vendor, stating she’d pay them back, even if she had to work 3 jobs to do it.
Susan was then required to face her loyal workers. She promised her employees she’d get them out of this situation. Understandably, many employees left, but luckily a few core employees stuck with her. She put her team in the basement of the house and got rid of the fancy office. A few months later on the road to recovery, Susan purchased a much smaller shop. Within a year, she bought an acquaintance’s plumbing company, allowing her to merge two ServiceTitan customer lists together. Between the 2 lists, they had 30,000 new potential customers, and they started over, yet again.
All but one vendor believed in Susan. Most vendors were wonderful and agreed to work with her through the recovery process. In two years, she was able to proudly pay back the $730,000 she owed.
Susan’s Current State
Many years ago, Susan used to teach for the Small Business Association. She had a colleague (Marla DiCarlo) who would teach Susan’s money class for SBA students. The two stayed in touch, and Marla ended up becoming the CEO of Raincatcher! While Susan was going through her debt circumstance, Marla asked Susan if she’d like to do some contract work for Raincatcher.
While at Raincatcher, Susan coached clients and participated in some speaking gigs. One thing led to another, and after a year of being a contractor for Raincatcher, Marla asked Susan to become a full-time employee starting as the Director of Business Growth! Susan was obviously elated. In her current role at Raincatcher, Susan talks on a variety of different business growth topics and also participates in on-sites as well.
Susan notes that she was a “pretty good” coach before, but now she is absolutely crushing it due to all she learned through the unfortunate IRS debt experience.
How Sunshine Runs
Although Susan now works with Raincatcher full-time, she is still very involved within Sunshine. She has a meeting with the team every Monday morning. Sunshine also has a business coach (not Susan), and Sunshine even hired a new bookkeeper that is actually trusted. As you likely guessed, all employees were eventually moved out of the basement. They expanded the shop, and now Sunshine is more profitable than ever!
One thing that Susan harps on with Sunshine is competing on being “awesome,” as opposed to competing on price. Sunshine ensures that all employees do everything possible to ensure they provide the best customer experience. What does “awesome” mean in Susan’s eyes? Here’s one example: If Sunshine cannot get your issue fixed on a weekend, they will put you into a hotel!
Excited for the Future
There are many things that Susan wants to continue innovating at Sunshine. One is their service radius.
Susan understands that in the skilled trades, employee retention has a lot to do with technician “drive time.” Employees want to be working, not driving to the work location. Therefore, Susan’s business no longer advertises to potential customers outside a 12–15-mile radius from the shop. They will continue taking care of existing customers (including warranty work), yet they will no longer send technicians outside the radius they affectionately call “the happy zone.” If a customer is inside the happy zone, they don’t get a fuel surcharge. Customers inside the “happy zone” also get goodies. Customers love it and employees embrace it.
Susan has also started implementing new pricing as well. By using the new ServiceTitan price book, they can now get live feeds from vendors in real-time, ensuring they can update customer pricing quickly. This also allows Susan to ensure all trucks are efficiently stocked at all times.
Furthermore, the company is bringing the team into decision-making now. They have an EOS (Entrepreneurial Operating System) coach, allowing employees to contribute ideas, enabling them to feel “heard.” This also contributes significantly to Sunshine’s strong employee retention!
Building a Rockstar Team
Back in Colorado, Susan stumbled upon a coffee shop (offering minimum wage) that had a waiting list of 25 kids trying to get into the job training program. She couldn’t figure out why so many people were on a waitlist for a minimum wage job. She subtly started interviewing the kids to find out why they wanted to work at the coffee shop so badly. This is where Susan discovered the most important things individuals aged 18-25 are looking for in an employer:
- Community: They want to feel like they are a part of something bigger.
- Public Service: They want a company that stands for something good and/or donates/gives back.
- Respect & Individualism: They want to be heard and seen as a person, not just a number. They want their employers to really know about them and care.
- Flexibility: Modified schedules, sick days, and PTO.
- Mental Health: They want mental health to be treated like a real thing
The Future
Today Susan is working to ensure Sunshine will be the first completely online-digital-plumbing company. People want information, they want videos, they want price transparency, and they want to learn for themselves!
“In our industry, contractors are hesitant to give prices over the phone. Yet customers want to shop online and do their own research. They want and need full pricing transparency,” states Susan. Susan plans on bringing all of these deliverables (and more) into the plumbing world soon!
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Episode #9: Saving Sunshine: From $1.1 Million In Debt to Positive EBITDA in Two Years with Susan Frew
Change Your Filter with Tall Paul
Key Insights:
- If you have an issue, be transparent with your vendors.
- Be aware of what the younger generation is looking for in an employer.
- Offer pricing transparency & information online.
It’s not what happens to you, it’s how you handle it that matters. Today’s guest overcame numerous obstacles, yet still finished on top. In episode 9 of the Change Your Filter podcast, we are joined by the Business Growth Director at Raincatcher, Susan Frew!
The Beginning
Growing up in New Jersey, Susan Frew soon found herself living across the river in New York City. She spent a good portion of her career working for AT&T. She climbed her way up the corporate ladder and took a promotion in the late 90s which landed her in Denver. While in Denver, Susan started working on the AT&T national team, launching into new markets. Her performance there allowed her to take a new role, stationing her in Saint Vincent and the Grenadines and Grenada in the Caribbean, where she was the GM for those two countries!
Upon returning to the US, Susan made the courageous decision to leave corporate America. She moved to Breckenridge, Colorado, purchased a business coaching franchise, and started helping businesses focused on the skilled trades. As of today, Susan has coached over 20 different trades. Through her work, she met her husband, the owner of a solar company in Breckenridge. She then moved back to Denver in 2012 and started Sunshine Plumbing & HVAC. She grew that company exponentially using her vast experience in coaching along with her knowledge of the skilled trades. All seemed to be going well until the unexpected happened.
The IRS is Knocking on My Door!
Susan will be the first to admit that she was not tending to the oversight requirements of running a business. At her new business (Sunshine), that lack of oversight eventually caught up with her.
What happened? Her primary financial employee was to receive a bonus every month if she stayed on budget. Unfortunately, to achieve this, the employee shorted money that was intended for the IRS & vendors, and instead showed that money as company revenue. This allowed the employee to receive her bonus, while simultaneously showing false revenue growth for the business. Susan had no idea this charade was going on.
One sunny afternoon while Susan was at home, the doorbell rang. She was hand-delivered an official letter from the US Government. The letter stated that her company owed the IRS $498,000, in addition to a $206,000 fine for not providing proper oversight of her financial employee. Furthermore, she owed another $175,000 in debt for the invoices that were not paid to their trusted vendors. Susan soon found herself in deep trouble.
How She Handled It
Many would sulk, look to blame others, or just have the business completely collapse. Susan took a more courageous route. She spent the next week writing letters to every single vendor, stating she’d pay them back, even if she had to work 3 jobs to do it.
Susan was then required to face her loyal workers. She promised her employees she’d get them out of this situation. Understandably, many employees left, but luckily a few core employees stuck with her. She put her team in the basement of the house and got rid of the fancy office. A few months later on the road to recovery, Susan purchased a much smaller shop. Within a year, she bought an acquaintance’s plumbing company, allowing her to merge two ServiceTitan customer lists together. Between the 2 lists, they had 30,000 new potential customers, and they started over, yet again.
All but one vendor believed in Susan. Most vendors were wonderful and agreed to work with her through the recovery process. In two years, she was able to proudly pay back the $730,000 she owed.
Susan’s Current State
Many years ago, Susan used to teach for the Small Business Association. She had a colleague (Marla DiCarlo) who would teach Susan’s money class for SBA students. The two stayed in touch, and Marla ended up becoming the CEO of Raincatcher! While Susan was going through her debt circumstance, Marla asked Susan if she’d like to do some contract work for Raincatcher.
While at Raincatcher, Susan coached clients and participated in some speaking gigs. One thing led to another, and after a year of being a contractor for Raincatcher, Marla asked Susan to become a full-time employee starting as the Director of Business Growth! Susan was obviously elated. In her current role at Raincatcher, Susan talks on a variety of different business growth topics and also participates in on-sites as well.
Susan notes that she was a “pretty good” coach before, but now she is absolutely crushing it due to all she learned through the unfortunate IRS debt experience.
How Sunshine Runs
Although Susan now works with Raincatcher full-time, she is still very involved within Sunshine. She has a meeting with the team every Monday morning. Sunshine also has a business coach (not Susan), and Sunshine even hired a new bookkeeper that is actually trusted. As you likely guessed, all employees were eventually moved out of the basement. They expanded the shop, and now Sunshine is more profitable than ever!
One thing that Susan harps on with Sunshine is competing on being “awesome,” as opposed to competing on price. Sunshine ensures that all employees do everything possible to ensure they provide the best customer experience. What does “awesome” mean in Susan’s eyes? Here’s one example: If Sunshine cannot get your issue fixed on a weekend, they will put you into a hotel!
Excited for the Future
There are many things that Susan wants to continue innovating at Sunshine. One is their service radius.
Susan understands that in the skilled trades, employee retention has a lot to do with technician “drive time.” Employees want to be working, not driving to the work location. Therefore, Susan’s business no longer advertises to potential customers outside a 12–15-mile radius from the shop. They will continue taking care of existing customers (including warranty work), yet they will no longer send technicians outside the radius they affectionately call “the happy zone.” If a customer is inside the happy zone, they don’t get a fuel surcharge. Customers inside the “happy zone” also get goodies. Customers love it and employees embrace it.
Susan has also started implementing new pricing as well. By using the new ServiceTitan price book, they can now get live feeds from vendors in real-time, ensuring they can update customer pricing quickly. This also allows Susan to ensure all trucks are efficiently stocked at all times.
Furthermore, the company is bringing the team into decision-making now. They have an EOS (Entrepreneurial Operating System) coach, allowing employees to contribute ideas, enabling them to feel “heard.” This also contributes significantly to Sunshine’s strong employee retention!
Building a Rockstar Team
Back in Colorado, Susan stumbled upon a coffee shop (offering minimum wage) that had a waiting list of 25 kids trying to get into the job training program. She couldn’t figure out why so many people were on a waitlist for a minimum wage job. She subtly started interviewing the kids to find out why they wanted to work at the coffee shop so badly. This is where Susan discovered the most important things individuals aged 18-25 are looking for in an employer:
- Community: They want to feel like they are a part of something bigger.
- Public Service: They want a company that stands for something good and/or donates/gives back.
- Respect & Individualism: They want to be heard and seen as a person, not just a number. They want their employers to really know about them and care.
- Flexibility: Modified schedules, sick days, and PTO.
- Mental Health: They want mental health to be treated like a real thing
The Future
Today Susan is working to ensure Sunshine will be the first completely online-digital-plumbing company. People want information, they want videos, they want price transparency, and they want to learn for themselves!
“In our industry, contractors are hesitant to give prices over the phone. Yet customers want to shop online and do their own research. They want and need full pricing transparency,” states Susan. Susan plans on bringing all of these deliverables (and more) into the plumbing world soon!
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Chris H, Dick Hill and Sons Heating and Cooling“We have several subscription customers already. This just means recurring revenue for us with no additional overhead or managing.”
Jason C, Advent Air Conditioning