Paul Kelly is President and Owner of Parker & Sons, out of Phoenix, AZ. Parker & Sons is a 210 million dollar company this year, and that is from a single location in a single market. Read that again. 210 million from a single location, in a single market. Sounds crazy? Sometimes, Paul and his team feel the same way! Really, though, it’s no magic trick. There’s no smoke and mirrors here. Paul and his team have simply done the right things, kept it simple, and enjoyed success.
In addition to being an owner of a successful home services company, Paul is also now an author, recently publishing his book Tricks of the Trade to Success: The Magic of Creating Your Ta-Daaah! In Business and in Life. We sat down with Paul to understand his backstory, the journey of Parker & Sons, and why creating a successful business isn’t a magic trick at all.
Paul was born and raised in Cincinnati, OH. He was part of a large family in a small house, with plenty of brothers and sisters running around. His father was in the heating and air business, and worked for the local utility company. Paul would go on to attend college at the University of Cincinnati, earning his degree in accounting as a CPA.
His start was as a CPA for Roto-Rooter. Paul would later venture into marketing, and started up an operation out in Columbus, OH. What Paul discovered was that the further away from accounting he got, the more he enjoyed things. He liked bringing the money in, not just counting it! Paul went on to work for Service America, who had been acquired by Roto-Rooter. Then, he found himself working for Blue Dot. As many of our listeners will know, Blue Dot went through a bit of a bumpy road and sold off their assets. While Paul was helping sell off Blue Dot companies, he purchased Parker & Sons from Blue Dot in 2004.
When Paul acquired Parker & Sons, they were at $7M. Parker & Sons had been around since 1974, but was a smaller company back then. In fact, they were really at about $2.5M, but they were combined with two other companies around the Sun City area that together made up that $7M number. Originally, the company was just HVAC and plumbing and mostly did residential service.
Recently, Parker & Sons acquired two other companies in Phoenix that will position them to finish 2022 at around $250M. Again, this is all in a single market, and operating out of a single location.
After Paul took over, Parker & Sons went from $7M in 2004 to $8M in 2005, and then in subsequent years reached $11M, $17M, $23M, and then $30. A snowball effect started to happen, and growth sped up exponentially. In the early days, Paul focused on just making more of the business they already had; their existing customer base. Once they got good at that, they moved onto advertising, and got good at that as well. Today, Parker & Sons can take as much as 6,000 calls on a busy day and has 430 trucks in their service fleet. They drive a combined 26-27,000 miles a day. Considering that the Earth is about 25,000 miles in circumference, Parker & Sons drives around the world every single day!
The thing to note about this growth is the exponentiality of the year over year revenue increase. At first, you’ll see small jumps such as the 2004 to 2005 years. Then, you see larger jumps. After Parker & Sons hit $30M, they started to see annual revenue growth of $20-30M.
What caused Parker & Sons to start jumping $20-30M a year? First and foremost, Paul credits this growth to his people. Namely, his leadership. Paul hired on Daryl Bingham, who was working as Vice President of George Brazil. Daryl had a similar skillset as Paul, and came on to help run operations. This allowed Paul to start focusing on other things, and their 1-2 punch combination freed the company to start thinking bigger and growing faster, including rethinking how they approached marketing and advertising.
A good leader is never cheap. Business owners may find themselves unwilling to justify the cost of adding on expensive talent. Still, we hear it time and time again at To The Point: growth starts at the top.
See, Daryl was ready to leave George Brazil and wanted to start an electrical department at Parker & Sons. Paul has the same fears any business owner would have. How much would Daryl cost? What would Daryl be doing? Still, Paul was determined to hire him no matter what. It wasn’t just Daryl that Paul added on, either. Parker & Sons started grabbing talent for all throughout the company. That’s when they really started to accelerate year after year.
You have to grab talent when you have the opportunity. There is a war on talent, and not just at the technician level. There are only so many Daryls and Leland Smiths out there in the world, and you have to grab them when you can because they can and will transform your business.
Paul notes that many people assume there was some grand vision at Parker & Sons, or that Paul had this lofty goal of building a giant company. In reality, Paul was just trying to make payroll. If you’re seeing that $210M number and feeling like you can’t relate, stop yourself. Parker & Sons isn’t some complicated beast that is entirely different from any other size of contractor. They face the same problems that a $1M contractor does, just with a different size and scale.
According to Paul, the reason Parker & Sons is so successful is because they keep things simple. When you get down to the core of what truly makes something work and you forget the rest, it makes everything easier to implement. Instead of creating massive 20-step processes to everything, they focus on simple, 1-step solutions and build from there. Anyone can implement a 1-step solution, and if you can build on that, you’ll see growth in leaps and bounds before long.
As we know, doing the right things and hiring the right people is how one grows a business. Still, is there more to it than that? How did Paul and Parker & Sons grow so rapidly and to such a large size in a single market? First, let’s provide some background on Paul Kelly and his “magic career”.
Even as a child, Paul loved magic. Who doesn’t? When Paul was in his early 40’s, he decided to take a course on magic at Mesa Community College. He enjoyed it so much that he asked the instructor for private lessons. Every weekend, the magician would teach Paul two tricks. Paul was continuously amazed at the simplicity of the “secret” to most of the tricks. He would be asked to perform the tricks in front of the magician, and once Paul was performing them well enough, the magician would teach him two new ones.
Paul was sucked in. He was practicing his tricks on planes when he traveled, performing for strangers at the bar, and often for his family. After a few years, he was pretty good at about 25-30 tricks! What he found is that magic and business aren’t so different. When we see a good magic trick, the first thing we want to know is how it’s done, right? The lesson that Paul learned was that magic isn’t really so much about the way a trick is performed, it’s about the practice, preparation, and eventual performance.
His book, Tricks of the Trade to Success, is geared around this magic theme for that very reason. Paul correlates magic with business as well as personal life. Everything can be broken down into one thing–the “trick”–and simplified. If you can get good at that thing, you can really amaze people. Our business is really a series of “tricks”, or things that we do that others don’t know how to do, or maybe that we just do a little bit better. Paul shared a few of these “tricks” he’s learned over the years, but we encourage you to get the book so you can learn it all!
In one of the chapters in his book, Paul talks about him not being a big goal type of person. He has trouble wrapping his head around big goals. While he may not be able to reach for the stars, he certainly can climb a ladder. He can grab that next rung and pull himself up, and then repeat that process. Big goals are still a good thing, but you have to break them down. That’s your roadmap! Paul focuses on getting a little better everyday, and small goals are how he gets there. It’s no different in business. By setting smaller goals that are easier to accomplish and repeating the process, you will get in the rhythm of achieving your goals and start to see big results towards that ultimate goal.
Paul had fish growing up, and enjoyed having something to take care of. It was relaxing. What he learned about fish is that they will grow as big as their environment allows. They will also grow in size depending on how many other fish are in the tank. Companies and humans are the same way, Paul has learned. In fact, Paul can often guess with fairly good accuracy the revenue of a company simply based on the square footage they are operating out of. There are exceptions to this, of course, including Parker & Sons, but generally speaking your “tank” can prevent you from growing.
Your tank isn’t just the size of your facility, either. The physical tank can be how big your parking lot is, or how many service vehicles you have to utilize. There are also other types of tanks we find ourselves in, and these can be mental instead of physical. Perhaps we don’t have the knowledge needed to grow. The way we expand our tank is through things like attending seminars, listening to podcasts (To The Point, we hope!), visiting other companies, and joining peer groups.
Growth is also restricted by the number of fish in your tank. That doesn’t just mean the number of competitors in your market, either. Paul believes the number of fish in your tank is really the number of problems you are dealing with everyday. A technician calls out sick, someone needs the answer to something, an angry customer needs to be calmed, and a computer just stopped working. When you’re inundated with all of these problems, there is no way you’re going to grow. Sometimes, we need to place ourselves in a different tank altogether so we can think differently and not limit ourselves to dealing with these day-to-day “fish” in our tanks.
Another chapter in Paul’s book discusses making more of what you already have. In the early days of Parker & Sons, Paul focused on their existing customer base instead of acquiring new customers. Every contractor has a certain amount of business already, but most of them aren’t maximizing their opportunities within that group. It all starts with answering the phone.
Sometimes, we lose as much (or more) as we make just by not answering the phone. It could be a misdial, it could be a maintenance ticket, or it could be a huge installation lead. You simply don’t know, so you can’t afford to leave that phone ringing. It’s also about booking the call, and being good when you actually perform the service. Further still, are we doing the best that we can in terms of selling accessories, asking for referrals, and all of the other basics that will increase our average ticket and promote growth? This is low hanging fruit, and none of it requires you to go out and spend a bunch of money on more advertising and marketing.
Paul has traveled to over 100 companies in his lifetime, and they all want the same thing: help growing the company and making more money. We all want that! The first thing he does is go into the call center. Are we answering the phones? What is our booking rate? Even a small increase of 5% to your booking rate can result in hundreds of thousands of dollars over the course of a year.
People have a hard time wrapping their heads around what Parker & Sons has accomplished. $210M in one market out of one facility seems like magic, but it isn’t. When you reach that size, you do start to think differently, and that’s part of what Paul’s book is about. It’s getting people to think differently. When you think differently, you do things differently, and that’s what makes a difference.
There will be a part two to this episode, so stay tuned. In the meantime, why not visit Paul’s site and grab his book, Tricks of the Trade to Success to learn all of his “tricks”?