Ep 382 | Surge Pricing for Services, Buying Out a Partner, and Breaking Company Silos
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Ep 382 | Surge Pricing for Services, Buying Out a Partner, and Breaking Company Silos
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- Dynamic Pricing: John is developing a dynamic pricing model to replace a static one, using levers like job type (e.g., acrylic vs. California stucco), customer difficulty, and seasonality to maximize profit.
- Partnership Buyout: John bought out his business partner, Brady, in a healthy negotiation. He now owns 83% of the company, with his wife Tricia holding 17% for tax efficiency (dividends, capital gains exemption).
- Company Operating System (COS): Austin is leading a project to document and standardize workflows across 13 siloed departments at Rydel, aiming to eliminate communication breakdowns and improve performance tracking.
- John is replacing his static pricing model with a dynamic one, inspired by the hotel and airline industries.
- Problem: A static markup applies the same margin to all jobs, regardless of risk or complexity.
- Solution: A framework using several levers to adjust pricing:
- Implementation: A spreadsheet will provide reps with a baseline labor rate for each job type, plus multipliers for other factors.
- John bought out his business partner, Brady, after a mutual agreement that their goals had diverged.
- Growth: The partnership grew the company from ~$1.5M to ~$3.8M in revenue.
- Negotiation: The exit was a healthy negotiation focused on mutual satisfaction, avoiding conflict.
- New Ownership:
- Rationale for Tricia's Ownership:
- Future Goal: Increase the value of the 30% personal ownership stake for a potential sale to an outside investor in 2+ years.
- Austin is leading the COS project to standardize operations across Rydel's 13 departments.
- Problem: Departments are siloed, using different processes and tech stacks (e.g., CRM, Google Drive). This creates communication breakdowns and makes performance tracking difficult.
- Goal: Create a unified company workflow that maps all inter-departmental touchpoints.
- Phase 1: Each department head is creating a "Who, What, How, and Where" document to detail their operations.
- Phase 2: Austin and Kevin Bollier will use these documents to design the integrated workflow map.
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