How Tommy Mello Built A1 Garage into a 250,000,000 Business

See, when you ask for help and you get the wrong direction, it'll take you down. Like, I look at everybody, I go, wait a minute, Jeff Bezos, why not me? Like, he's just—he's got 24 hours in a day. What makes him better? I'm going to always ask questions, stay humble, and I'm just going to always be that guy asking questions, always be curious. I can—I said, listen, you could have a bad hour, maybe a bad day, but you can't have a bad week, a bad month, you can't have a bad year, you know, otherwise you're just—there's something wrong with you mentally. There's a time for that. If you could live below your means for about five years, you'd be surprised what can happen. And you know, here's the thing: very wealthy people, they don't think about making money, they think about keeping money. What's recurring? How much am I going to make in compound interest?

Well, a couple things. Number one is I think I was way more humble. So I asked for help, and I always ask for help, and I got lucky—I found a few of the right people, a lot of the wrong people. See, when you ask for help and you get the wrong direction, it'll take you down. But if you ask the right questions to the right people, it'll get you there way faster. But number two, a lot of people just want a lifestyle business—they don't dream big. They're like, oh, if I did $2 million, I'd be happy. I'm like, you know, I look at—I look at Elon Musk and I go, why not me? Like, I look at everybody, I go, wait a minute, Jeff Bezos, why not me? Like, he's just—he's got 24 hours in a day. What makes him better? In 2000, he had to borrow a million dollars for 20% equity in Amazon. It was in 1996. Like, why not me? So, so this whole question of like, they're not better—like, I hold myself up to the highest regard. You know, there were times that I didn't, but now I do. And so I—I've stayed humble. I don't care how wealthy I become, if I become 6% body fat, if I become, you know, perfectly aligned with Jesus Christ—I don't care what it is. I'm going to always ask questions, stay humble, and respect people the same way, because people helped me out a lot, but they walked all over me too. So I just—I feel like I—I'm just humble, and I'm just going to always be that guy asking questions, always be curious.

Yes, so right now we're just passing $250 million, but I'm more proud of the fact we're at 25% profit. So a quarter of that money, of course, is profit. The hardest part was not doing the work yourself, because I learned how to do the work—I learned how to be a technician. Even though I started my own company, I made a lot of mistakes, and then I needed to trust somebody else, and they never did as good a job as me. The days that I got off the phone, the booking rates dropped. The days that the jobs were done, the sales would drop. So hiring your first few employees and knowing they're never going to be as good as you is hard, because you're like, I lose money by giving you some of the jobs. But 80% of what you could do, and getting a thousand of those people—think about it: if I got a thousand people to 80%, that's—that's—that's 800 of me. Yep. So I had to come to that realization.

When I first started out, I think the one thing that made me different is I got obsessed with marketing. Like, all I thought about is how to make the phone ring, how do I make leads come in. I think most people are like, how do I do a good job at work, how do I recruit, you know, how do I sell better. All I focused on was making the phone ring off the hook, and I did that through having the best reputation. Most people ask for one review—I ask for four. You know, I say, can you leave me one on Google, Yelp, Nextdoor, and if you do this, can you do that? And then I'd find out the HOA president's number, then I'd get both neighbors and I'd go knock on the door. And so people always ask, are you the best salesman in the company? I'm like, well, you worked for me, so I sold your ass. And then number two, I say, you're going to outsell me in the beginning possibly, but I'm also going to get—I'm going to get the brother's number that lives down the street, I'm going to get the HOA president, they're going to give me the whole HOA because I'm not afraid—I'm not afraid to ask. But yeah, then there's different levels, and you got to start delegating more, trusting more, having checks and balances. A couple things changed over the years, like paper performance, getting dialed in with your numbers. You know, at $20 million, I knew how to make money in revenue, but I didn't know how to keep it. A lot of people are so focused on revenue instead of profit, and it's hard to be focused on both because it's kind of like working out—you're trying to gain muscle, you're trying to cut up, right? So when you're trying to cut up, you're trying to focus on profit. When you're trying to gain muscle, you're focused on revenue. It's hard to do both—gain a lot of muscle and get ripped at the same time—it's hard. So you got to kind of go into this year saying, I'm going to focus. And let's say if you're not making at least 10%, focus on profit. If you're over 10%, you're trying to grow and take market share. Just don't fall below 10%.

I had a couple—couple really tough moments. I wouldn't say years. To have a bad year would be—I can—I said, listen, you could have a bad hour, maybe a bad day, but you can't have a bad week, a bad month, you can't have a bad year, you know, otherwise you're just—there's something wrong with you mentally. You know, someone dies, I get it, that could be a struggle in your life personally, but you can't have a bad year of business. So a couple bad times: when I had to break up with my partner in 2010—I knew that the business would never grow, there would be animosity if I tried too hard because he just didn't work as hard as me. He was lazy.

Yeah, 50/50. 2007 we started, 2010 we were—we were losing money. So I said, you could take the business and take the debt, or give me the business and I'll take the debt. That was very hard—my best friend, my roommate, my business partner.

You know, we—we took on Yellow Page ads and we owed on that, and then we had paid marketing, we were paying for like our rents and car payments, and like—I wouldn't say we were losing a bunch of money, but you know, we were definitely—we owed people money and we just weren't making a very good profit. Because I mean, we ran all the work too—we didn't have a lot of employees, we had a couple guys that would install doors for us, but we weren't like losing tons of money. So I just said, listen, man, whatever you want to do. And he said he understood, and he said, I want to move to Montana anyway. So another hard time was when my buddy came in and said, you got to close four of your markets because you're bleeding. That was a really tough day. Another tough time was when I told my GM we were switching to ServiceTitan, and he was pissed off and he cussed me out. He didn't want to talk to me for the week because he had worked really hard to set up the old CRM, and I said, no, this one's better. So he almost thought I was on all of his hard work, but it wasn't—I just knew it would be better. But with these tough conversations, these tough days, they define your character. And I think people don't understand: the better you get at flexing the muscle of fierce conversations and the tough ones, the better you're going to be. You know, my company's not a family—we're a high-performance team. If they were family, you know, for your business, you don't love everybody like Mom and Dad. You can't say it's a family because when you fire somebody, you don't fire family. I mean, sometimes you have to, but you're going to like take care of them and figure out a way to pay for their stuff still. So I say we're a high-performing team and we got to work well together. And I had to change that because I used to say we're just a family, and they're like, well, you don't really fire family—not often, at least. So business is going to be tough, it's going to be hard. Only 4% of the population are hunters—most of them are just good farmers. They want to plant their seeds and just, you know, if I make 100 grand a year, I'm happy. And I tell a lot of people, you don't—you shouldn't be in business. You should not be in business. Look at your life—it's falling apart. You've been doing this 10 years and you're not making any money. You're making a good living, but you don't even get to take—you go to your son's baseball games, but you don't even watch them, you're on your phone, stressed out. You work weekends, you never really go on vacation. Like, go somewhere that you could actually put your work jacket up. Because listen, it's hard—business is not easy. It's not.

Yeah, well, the problem is I'm growing too fast, and I tell them this. I tell a lot of my core people, I'm like, you might not be around because I'm growing too fast. I'm reading too many books, I'm podcasting too much, I got too many consultants. You're not asking me—'What book should I read?' You're not listening to the podcast, staying behind. So the problem is I'm outgrowing you. My lid is going so much further than yours. So unfortunately, I've worked people way too many hours for them to grow. You know, I've had people that have to work 70 hours a week to keep up. So how are they supposed to work on themselves? Now I tell people, what would you like? What courses do you want to take? Whatever you want, I'll pay for it. What kind of coaches do you need? At least my highest-level management. And I tell my technicians, I give them performance pay. If they make Pinnacle—Pinnacle gets harder every year—but you could earn equity in the business, and I let them know that this is going to change your life. It's going to change the destination of your entire family. Think about this: if you're a technician and you could get $400,000—it's going to be in about a year and a half—what would a $400,000 deposit into their bank account do? It doesn't sound like a ton of money, but these guys, some of them make 300 grand a year, but they're living paycheck to paycheck. My job is to try to teach them how to manage their money more. I mean, a lot of lawyers, a lot of doctors in this country, you know, they go to school, they go to work, they make great money, they never, ever save anything, they have debt.

Yeah, well, it would really depress the economy if we didn't go spend the money. Why do you think the government gives a stimulus check? Why do you think they call it a stimulus check? They give everybody money—they know you're going to go spend it. And if you go spend it, you're turning over the economy, you're actually turning dollars over. But you, as a business owner, you tell them, 'Hey, here's your check, save it, put it...' No. I say, look, here's your check going into your business account or your personal account. Yeah, you could afford—we look at the amount of money: this much goes out into your retirement, this much goes into your first house you're going to buy, this much goes into your vacation, this leftover money is what you could spend. This is how much it takes. It's called delayed gratification. It wasn't that long ago I owned an apartment complex, 19 units. I got another one, 12 units—not big. I moved into my apartment complex for four years to be close to my technicians that were training. I drove a Nissan Titan, 2012, salvage title, 300,000 miles on it. I owned seven other houses. I could have bought—I could have bought a Ferrari, I could have lived in a mansion. I don't care. People would come to my house and I'd be like, yeah, it's 900 square feet, come stay with me. They'd be like, why do you live here? I'm like, 'cause I don't—I don't freaking care. I just don't care. I'm not here to impress you. I will say, living in a big beautiful house, if you want to make a lot of deals happen and you're buying companies and you want to entertain people, it's good. But there's a time for that. If you could live below your means for about five years, you'd be surprised what can happen. The problem is all these guys—they want the nice watch, they want to dress in the nicest clothes, they want the fame, they're going to buy a brand new car. You know how many people in Scottsdale live with their mom and drive a Porsche? It's just that you're trying to impress other people, and I've never had to do that.

But I explain what depreciating means. And you know, here's the thing: very wealthy people, they don't think about making money, they think about keeping money. What's recurring? How much am I going to make in compound interest? And it's all—I have these meetings once a week with my entire staff, and I do these interviews and I explain to them my philosophies, and I tell them all, you could be rich and wealthy too. First, you got to define what wealthy means to you, because a lot of people want these crazy, outlandish stuff, but why do you want that? But first of all, figure out what you want in life, then let's reverse-engineer how to do it. And the way that I motivate my people is say, you told me you wanted this, and all I'm giving you is the KPIs at work to be able to accomplish it. So you can't teach it to everybody, but what it takes is constant reminder. If I constantly was telling you something and proving it to you, eventually you start catching on, you start agreeing with me, because after you wake up and you still have no money, all we'd have to do is sit down and say, let's just do this little financial thing for a month. You're spending $40 at Circle K—you're buying a Big Gulp, you're buying a pack of cigarettes, and you're buying two baloney sandwiches. If you go to the store, you get that done for 15 bucks. Like, we just got to plan out where are you spending this money. One guy says, I got to give my wife a boob job. I go, you're making 200 grand a year, your rent is $1,200, you don't have a retirement account, you don't have any savings. I'm going to give you the next two days off—I'm paying for your little two days off. You're going to go start a Roth IRA. This is before we had a 401k. And I said, Eric, there's no—dude, you're making more money than I've ever thought possible, and you don't have any savings because your wife needs a boob job. And I'm like, then get her a boob job—not till you get 20 grand in the account. Like, some people, they want to make money because they're trying to figure out how to spend it. See, my rule has never been make more money to figure out how to spend it—that's the wrong way to think. Like, if you want—people say, oh, if I won the lottery, and they think about all the things they would do, that's why they go broke.