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TAP S2 1 | Growing Your Business

 

Brittany Johnson and Laura Johnson aren’t afraid of dirty work as long as it means that they get to grow their business. Their normal business operation, based in Middletown, New York, focuses on fire and water remediation – but COVID-19 added a whole new dimension: disinfection of surfaces. The shortage of PPE combined with significant uncertainty around the spread of the virus made 2020 an extremely challenging year for their business transition. Because of this, the Orange County Chamber of Commerce recognized SERVPRO as the 2020 Business of the Year. JGS’ Michael Garofalo and Rob Unger speak to the Johnson sisters about their work during the pandemic and the accounting services JGS provides them.

Listen to the podcast here:

Johnson Sisters Grow SERVPRO Franchise In Orange County With Brittany Johnson And Laura Johnson

We’ve got the Johnson sisters here with us from SERVPRO in Orange County and we’ve got Rob Unger, a partner at JGS. We’ve got a good discussion.

I’m Brittany.

I’m Laura. Thanks for having us.

Thanks for being on. A real cool background with SERVPRO and JGS is we met through the Orange Chamber of Commerce, where Rob Unger was an ambassador at the time. It was a great example of relationship-building. It’s not like we came in and we immediately started working together. We were familiar with each other for several years.

When I graduated college in 2013, we started networking and everything together. As the business continued to grow, we chose to look for an accountant and Rob was the first person I thought of because we’ve networked so much through the past several years.

Rob, you had been an ambassador for a while now. Is that right that you were a Chamber Ambassador with Orange County for a while?

Yes, for several years. I’ve probably been on several committees for the chambers. I transitioned out as an ambassador. As Brittany mentioned, it’s been several years that we’ve been doing chamber events together. I can remember plenty of times when Brittany was with the young professionals as well and they had that committee. We did plenty of events together.

I’m an Ambassador of the Orange County Chamber now. It’s like switching all the reins here.

On that exact note, congratulations to both of you. I read the press release from the end of July 2021 and you won the 2020 Business of the Year Award.

Yes. Thank you so much. 2020 was a very interesting year for everyone, including our business here. We did a lot of disinfecting as businesses started to close or a lot of the businesses that stayed open and still had employees there every day. They had active cases on a regular basis, unfortunately. We truly wanted to give back to the community because the hospitals were getting food deliveries, but there were also all the first responders, the fire, the police, and the EMS. What exactly can we do for them? We chose to offer free services for disinfecting, both their stations and also all of their vehicles. It was about over 800 vehicles we ended up doing for free of charge. That’s what we were able to give back.

What size staff were you working with at that point when you were doing 800 vehicles?

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It was interesting because what happened with a lot of people is they didn’t feel safe being out. Our job is to go into people’s homes and businesses every day. We had a few technicians who decided not to continue working. We were down to a much lower staff level than we had hoped for at the time, but our project managers, marketing staff, everybody stepped up and said, “I’m here. I want to help still.”

Luckily with the business that we’re in, we have the PPE because we need it for the other jobs we do. We had the masks, Tyvek suits and we had the product. We had disinfectants. We used it every day on water damages and mold jobs. It was transitioning into a different service line, which we could do all along. It is just nobody knew to ask for it before. We weren’t getting the normal water damages and fires that were happening before because everyone was home.

The pipe wouldn’t break during the day when they were at work and not discover it until 5:00 PM when they got back. It was like, “It broke. Turn off the water. We’re here now,” and then it wasn’t an issue or people didn’t want us to come to their house. There was a lot of fear and unknown. I’m proud of everyone on our team who stepped up and they went out there. We looked like Ghostbusters coming in with backpacks, sprayers, Tyvek suits and respirators, but we did it too. Brittany and I were out there doing it too. It was an interesting year.

If you Google SERVPRO, you’re going to see the primary services like fire and water remediation, but you mentioned during COVID , the need for disinfecting, which we’re equipped to do. Can you just touch on what typical services are provided and then how you transitioned a little bit during COVID? What was new, different and challenging? You said it yourself. It was challenging for everyone. Maybe you could just touch on particularly how that affected SERVPRO?

We had all of that personal protective equipment, the Tyvek suits, but it was a little different because you’d go into a building where you knew there were several COVID cases. When you walked in the building in March and April 2020, you didn’t know if that meant that you were going to get COVID or what level of protection even you needed yet. We would go in and it was a little different because you disinfect. Meaning we would apply the antimicrobial and the disinfectant product that we had. We would mist it to all the surfaces and then we’d go and we’ve wiped down things like doorknobs, countertops and cabinets where people would be touching all the time.

We’d leave and we’d take all your personal protective equipment off. Once you got back outside, then that was garbage. We throw it away. We didn’t know if anything was reusable. We didn’t know the impact that it would have. Even on our normal service lines, like water damage and fire damage, while they weren’t happening as much because of people being home, we were still doing it. Now jobs where you just walk into someone’s house normally in your standard uniform would expect us to come in in that same condition.

We were going through Tyvek suits and respirators very quickly in a time where it was very hard to get them. Brittany’s role transitioned into a supplies hawk. She would be online on Amazon and on every website trying to find things. You’re competing at the same time for supplies that hospitals needed and first responders, but we were out there too. We never stopped working. We never had anyone work from home. This has been consistently the same since before COVID happened, just a lot more PPE and a lot more masks.

Those are a lot of unanticipated costs. Rob, this would be an interesting point to bring you in. You could generally speak to probably a wide base of clients that have a similar situation. What’s that like when you’re looking at these statements. Try to make a one or several-year comparison and you’re seeing, “This is such a different year. It’s such an anomaly.” There are so many unexpected costs that accrued. How do you look at that statement and derive value from it?

As you mentioned, 2020 being an anomaly is not comparable to anything you’ve had in the past and hopefully not in the future. You’ll see a jump in your certain expenses. The good thing is that this is the first year that we’re working with SERVPRO. With the transition in the business, they decided to bring us on and the business has experienced tremendous growth. One of the things that we’re doing here at JGS is assisting in the bookkeeping and that’s been a painful and arduous process, but we’ve got it to a point now where it’s going to flow smoothly from here on forward.

We’re helping them with tax planning and also with the transition of the business. We’re doing some succession planning and we’re also doing a business valuation, which is very important as well when you have a transition to the business. A lot of times, people look at a business valuation when they’re looking to sell their business, but there are other uses of it, especially when you’re transitioning the business as is the case with SERVPRO here.

There are a few different ways to perform an evaluation. What are some of the main key factors you’re looking at when you’re trying to create value there?

TAP S2 1 | Growing Your Business

Growing Your Business: 2020 being an anomaly is not comparable to anything you’ve had in the past and hopefully not in the future.

 

You look at the underlying assets in the business, and then you look at how the company is performing. What’s their free cashflow? What are their earnings before interest taxes, depreciation and amortization? What value do you have on the business? Typically, it’s in a sale, but you try to look at what a buyer is looking for. What is a price you could put on that somebody is willing to pay? What’s the true value of the business?

Brittany and Laura, I was hoping to get a little bit into the weeds of the real practical aspects of your business. I was trying to do a little homework and research and picture what you guys do. I was just wondering, what’s that safety gear like? Not just during COVID, but fire and water remediation is in many ways a hazardous activity. What’s that safety gear like? What’s your mindset going into an unknown situation and wondering what you might encounter?

It’s something different every day is the first thing I can say about what we do. We’re going into homes and businesses after they’ve had some of the worst damage or event happen to them that’s ever happened. A fire can be anything from a small kitchen fire where maybe one of the cabinets is burnt and they need a new vent hood up to we’ve had to rebuild a house from the foundation up. Something like that where it’s a lot more aggressive structurally.

We maybe bring engineers in that need to evaluate. We’ve had contractors where we’ve had to bring some of our vendors in to put different support systems in to even just get some of the items out of the house first. Water damage can quickly turn into a mold issue if left unattended. We have some water damages where maybe they don’t have enough power to support drying equipment where we’ll have to bring in generators to run everything or larger drying equipment that maybe we operate separately on our own generator from their building itself

Water damage can compromise electrical systems. If it’s come from above, we’ve had some losses where it’s a sprinkler system that went off on an upper level and came down through walls and ceilings. The lights are filled with water and outlets are dripping. You can’t just plug in equipment to that. There are a lot of different avenues of assessing the risks once you’re onsite. It’s one of your first steps.

For any project we have, a project manager goes first, except for some of those smaller residential water damages, but we have some technicians as well that are trained to also assess the risk when you get there. See maybe, “This isn’t totally safe or we need to have the electrician come out and check this first and see if we can plug into it or whatever the case may be. There is a lot of risk assessment that goes into this as well once you’re onsite at some of these projects.

Water damage can be pretty insidious because it’s not something you necessarily can always see with the naked eye. You might see all the sheetrock is a bit wet but it can be difficult to determine the extent of the damage. Can you talk a little bit about that process of figuring out what you’re looking at?

We have a few different tools that we use for something like that. Our most commonly used is we have a moisture meter. It has two different uses it. One is a non-invasive method where you just hold the meter up to a surface. There’s also a more invasive method where it has two prongs that you can poke into a material like drywall. Something that’s a little more forgiving than concrete or a wood floor, but it will tell you the moisture content of that material. We know there’s a standard dry level for materials like drywall or wood floor tile that you want to reach that says, “This material is dry.”

The meter will tell you what the level is when you arrive. Sometimes it may ping all the way up and it’s fully saturated. We know we need to put drying equipment in there or in some cases, we need to remove that material because it won’t dry fully. We have that. There is a lot of technology around an infrared camera where it reads the temperature differentials on a material. If something is wet, it may look that it’s colder and show as blue on your infrared camera.

You may find other issues along a base of a wall where water is coming in from outside. They maybe didn’t know where it was and you can see more than just what you can with your eyes or with a moisture meter. No one understands that there’s a whole science behind drying. The classes and certifications that we’re required to have is a three-day class with a test that you have to get over 85 or above to even get the certification. There’s a whole science behind it. A lot of people don’t realize we do a lot of paperwork. We do daily moisture readings of all the different materials in the home. We do the readings of the relative humidity in the house, so there are a lot of different things that go into just average water damage.

Those strategies and tools are things that you’re familiar with right now, but also that you’ve probably known for several years even before you were in the business because you’ve transitioned from your parents right into this business. That’s something I meant to bring up earlier and I got off track talking about the Chamber of Commerce. Can you tell a little bit about the origin of your parents’ interest in SERVPRO and you picking it up and moving forward with it now?

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Both of my parents are from outside of Philadelphia. My dad always knew that he wanted to own a business or be an entrepreneur, so he was looking into different things and he played football in college with somebody who was a director for SERVPRO in New Jersey. When he was looking into SERVPRO, he found an area in New York that would be growing in years to come and that was many years ago now.

They both moved up here from Philadelphia right after they got married and built the business from the ground up. We even joke about it. We’re born and raised in the business. In the first year of business, we had a house fire. My parents were the ones that were going in to clean it. My dad would clean one room and then put Laura in her car seat in the middle of that one room that they cleaned while they cleaned the rest of the house while she was napping. From the ground up, they had built a team and then we ended up moving to the location we’re at now in ’96 and then have continued to grow from this building in Middletown.

They started the business out of our house growing up. The basement was the office and the other part of the basement was our playroom. Most kids play school or house. We played SERVPRO office. We have old checks or estimating sheets that we would use and play office. I grew up and I always wanted to be in SERVPRO. My eighth-grade home and careers project was to make your future office or business. I made a SERVPRO office. It is still in my office. It’s pretty cool to see where not only where our parents came from, but even once we moved to this building in Middletown in ’96, what’s changed. It was the first part and then we did two more additions. We’re over 20,000 square feet and we have plans to grow more.

You also have the solar on the building as well.

When we did the last addition a few years ago, Brittany had met with someone through networking who got her ear at the right time and was interested in what we did and learning about how he could help us. When we started doing the addition, we said, “We’re going to put solar panels. What do we need to put in here to calculate the usage correctly?” He was great about it. We knew what type of heating and cooling we were putting in. We knew about the equipment we used and the warehouse we’re cleaning. He honestly calculated how much usage to get those solar panels to run our whole building. We upgraded all of our lightings to be more energy efficient. A lot of changes like that we had never thought of before, but it gave us the opportunity to be a lot more energy efficient here too because we do a lot and a lot is running here every day.

You definitely noticed considerable savings on the utilities as well.

We’re hopeful for sunny days.

It’s great that the business networking has worked out so well for you because for a lot of people who are new to it, but even for people maybe who have done it for several years, you can almost get into a rut where you think, “It’s either going be I go to these events and I get nothing from it or I go to these events and I’m afraid I’m going to be sold to.” You’re giving at least two examples of situations where you went out there and you built good relationships and had good things come from it. Did that come naturally or did you have to work on that skillset?

When I started with SERVPRO, I graduated with a Business Education degree. I wanted to be a teacher in the business world, in high schools mostly. The opportunity presented itself to come back to SERVPRO because I kept catching myself calling here asking to see what’s going on. I came back here and about two months after I started, our marketing manager left for another opportunity. My dad looked at me and goes, “Here’s the marketing department. Good luck.”

I built all of my skills by myself and through a wing of a lot of different professionals in the area teaching me the art of networking, which is a weird way of putting that, but it is where it’s learning how to listen to people. You’re not always going to be sold. You never know who knows who, especially in our business. We’re an emergency service. No one is just going to be like, “I had water damage.” Very rarely that ever happens. It’s building relationships to where people will know me and think of me, if God forbid, something happens. A quick example is we just had one. The guy met with my manager and he said that he met me through a networking group and I would do all these presentations every six months in this group. He would be like, “Who the heck would use them? This doesn’t even make sense.”

How often do they even get jobs? He just couldn’t have fathomed that it even happened.

TAP S2 1 | Growing Your Business

Growing Your Business: A lot of different things go into just an average water-damaged house. You have to check the daily moisture readings of all the different materials in the home. There’s a lot of paperwork.

 

That was a few years ago and then this backup happened.

It was a sewer backup. Your septic tank backs up into your home.

He was like, “I’m not cleaning this leak. There was this girl, Brittany, in my group that does this,” and that’s how he called us. It was so funny that he thought, “I’ll never need her,” and then he still remembered our presentation a few years later. It’s a little networking tip. You never know. I hate networking, so I won’t be shy about that. I’ve always been the shy one. I’m fine talking about this. I’m fine talking about what I know if I’m talking about SERVPRO and what we do, but going out and walking up to someone who I’ve never met and trying to tell them what we do gives me little butterflies even thinking about it at this moment.

I saw Brittany doing all of this and I’ve gone to many events with her. I will never be Laura. I’m always going to be Brittany’s sister. I’ve accepted that, but it was great to see the connection she’s made and there are so many people. Even Rob, too who’s like, “We’re going to this event. Ride with us. We’ll go there together.” You just do it. You get to know so many people and all of these things that happen so much later down the line where you’re like, “We need this or we need a person that does this,” and someone will always know someone who knows that.

For anybody new who may be nervous about getting into networking, just remember that everybody had a first day in networking when you go to these things. Everybody remembers what that was like when they started doing that. If you can harness that energy and be like, “Everybody was here already,” or find an open person that will take you under their wing. I was forever grateful for several people that did that for me. I’m always open arms to help anybody. If anybody’s reading or interested, feel free to reach out to me. I’d be happy to help.

Thank you for the offer for all the readers out there. That’s a great opportunity to segue just a little bit and I’ll ask one final question. If someone is reading and they’re thinking, “I should remember this. I should remember that SERVPRO is out there. I might need them,” is it safe to say you’ll do residential, small and large businesses? What’s your target market?

People ask us that question and anyone can be our customer. It’s whether you rent an apartment, you may need us for something if there’s a fire in the building. If you own a home, anything can happen, water, fire or mold. If you own a business or a building or if you work in a building, you could be the person who’s at the office when a sprinkler pipe breaks and you know where you’re going to need help and reach out.

If there’s a building, a residence and a commercial building, anyone could need us at any point in time when something like that happens. We can do anything from small residential properties up to large commercial facilities. That’s the beauty of SERVPRO as a franchise system. We have a network of franchises all over the country. We had a large loss a few years back, a fire at a commercial shopping center and multiple stores were affected and we needed additional equipment.

We needed to extract water from sprinkler pipes that had gone off. We had another neighboring SERVPRO who came over and helped us at 11:00 at night to help get the job done because they know if it were the other way around, we would help them too. At the end of the day, it’s SERVPRO. That’s what people know. They don’t remember SERVPRO in Middletown of Brittany and Laura. It’s SERVPRO as a brand. There are no limits to what we can help someone with if it were to happen.

What’s the best way for someone to find out more about you or to potentially reach out if they have a need?

Our main website is SERVPROOSU.com, and then our phone number is (845) 342-3333.

Thank you. We’ve had Brittany Johnson, Laura Johnson and Rob Unger on the show. Thank you all for being with us. This was a great one.

Thank you.

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