Sergei Kaminskiy stated his empire by taking jobs that he didn’t know how to do and then hiring a professional to learn from. Wow.
Dave Young:
Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us. But we’re highlighting ads we’ve written and produced for our clients so here’s one of those.
[Tapper’s Jewelry Ad]
Stephen Semple:
Hey, it’s Stephen Semple here, and yes, it’s unusual, I’m opening the episode. We’ve given Dave Young the week off because he’s been working really hard lately. And I managed to meet Sergei Kaminskiy. We had a bit of a brief conversation and I was immediately, “Dude, I got to get you onto the podcast.” There were so many things we talked about that were just really, really great lessons and he’s in the home services business. We’re going to be talking about handyman, but this is applicable to all sorts of different businesses. But the first thing that fascinated me was really how you got started in the handyman business before creating the franchise model. Tell me about the start, that was just a cool story.
Sergei Kaminskiy:
Yeah, I got married. I was really young, I was just 19 years old.
Stephen Semple:
Right there tells us you’re a little nuts, but…
Sergei Kaminskiy:
I look at 19 year olds now and I’m like, “You’re not ready to get married.” But anyhow, we got married and then about three months into it, we look at the bank account, there’s about $70 in the bank account. And here I am, I’m working as a framing contractor, I mean as a framer for a framing contractor and making $17 an hour. I went to the owner of the business and I said, “Hey, Jim, can I get a raise? I bought a truck, I bought the tools.” And he goes, “Sergei, you are already making pretty much at the top of what framers make.” And he was right, they were already compensating me fairly, but yet, it was not enough for us to make ends meet. My wife brought in a nice BMW into the marriage that we had to make payments on, and by the time we did all the things we had to do, we were running out of money.
So I told my wife, I said, “Listen, what I do know is that I can do a business on a small scale. I can do some handyman work, I can take on some side jobs.” Going to my parents and asking them for money was not an option. I said, “I have to figure out a way to make this thing work.” And so literally it was raining outside that day, and we went to the club room of our apartment complex. There was a little room with a computer and a printer. We didn’t even have a computer or a printer in our apartment, so we started our business with no computer, no printer, nothing. Literally went to the complex and printed out 25 flyers. I designed them on Microsoft Word and I had little palm trees around the piece of paper, and it says San Diego County.
Stephen Semple:
I bet you wish now that you had some old copies of those.
Sergei Kaminskiy:
I have a photo actually.
Stephen Semple:
Do you really?
Sergei Kaminskiy:
Yes.
Stephen Semple:
Oh my God, you’ve got to send that to me. You have to send that to me.
Sergei Kaminskiy:
It’s amazing, so literally printed out these flyers. It’s raining outside, we wrapped them real nice with the bow. And I’m running door to door as Elena’s driving in the rain, and she’s kind of following me as I’m running door to door. I pass out about 25 flyers and I’m like, “Oh, great, we passed out some flyers. Let’s wait for the phone to ring.” And sure enough, one guy called me. One guy called me and he said, “I need some service done on one of the rental units that I own.” And so I went and I finished my framing job, and then after that I went and did this project. What was so amazing about that experience, I remember at $17 an hour after I paid the taxes and everything else, I had to work 40 hours to clear $500, so my paycheck was $500. And here I was after work, I went and I did this job in about three hours and I made about $200, $300. It was $250, $300.
And it was just one of those light bulb moments where I’m like, “I want to do more of this. I want to do more of this.” And so we started waking up 3:00, 4:00 in the morning on the weekends and just going and passing out flyers. She would take one side of the street, I would take the other side of the street, and we would just go and pass out flyers door to door. We would do that for three, four hours every weekend and then we would just sit and wait for the phone to ring. And then I would go estimate, and then I started hiring people to do the work for me so that was the start. That was the start. I mean, it was literally from nothing, absolutely nothing. It’s pretty amazing.
Stephen Semple:
You’re in San Diego today, so was this in San Diego as well, is that where you started?
Sergei Kaminskiy:
This was in San Diego. This was in San Diego, absolutely.
Stephen Semple:
Yeah, nice.
Sergei Kaminskiy:
And we would just pick the nicer suburb areas and we’d be like, “Okay.” So we’d be driving, we would see a nice area, we’re like, “Let’s go pass out flyers there.” And so it was that, it was all throughout San Diego.
Stephen Semple:
Cool. And how long was it before you started hiring some people?
Sergei Kaminskiy:
Literally two to three months.
Stephen Semple:
Wow.
Sergei Kaminskiy:
Pretty fast, pretty fast. The way that it worked is I went and I did a couple job sites. Then one of my friends was actually in the window business, and then he referred a customer to me and this project was a little bit for me, it was bigger at the time, it was about a $2,500 job. And so I came to my superintendent at the framing company and I said, “Hey, Jim, I’m trying to start this handyman thing on the side.” And I said, “I need a couple weeks off because I got this side job.” I brought him my flyer, I showed him my flyer and he kind of looked at me. He goes, “Sergei, good for you.”
He really liked me, but he goes, “Sergei, good for you. One thing I’ll tell you, though, the work will come but good people are hard to find.” I remember that like it was yesterday and I back then I thought, “No, give me the work. I’ll find the people, give me the work.” But the longer I’ve been in business, the more true his words actually ring. Work comes, good people are hard to find. But that’s exactly what happened, man. I asked for a couple weeks off and I started doing some of these side jobs. And I remember there was this light bulb moment, another light bulb moment.
I put one of my first employees on the job, and it was redoing a patio cover. And so I gave him a couple gallons of paint. I laid out all the wood, plastic underneath, and I said, “You got to prime all this and you got to paint this.” And then I called my wife and I said, “Hey, let’s go take the day and we’re going to go have some breakfast and let’s go to the San Diego Zoo.” And so I remember we went to McDonald’s and I’m sitting there, eating their breakfast whatever, some burger, it was a breakfast sandwich. And this light comes on and I’m thinking, “I have somebody working right now. I’m here with my wife, eating a McDonald’s sandwich, and we’re going to go and enjoy the day in San Diego Zoo.” And I thought, “I’m making money at this moment. I’m literally making…” And so for me, it was a light bulb moment.
I thought, “I’m not there physically painting, but I’m making money.” And so I said to myself, “I want to do this on a bigger scale. I can multiply this, I can scale this where we could have somebody working in the field and me just managing.” And so from that point on, I just would go and estimate the projects, and then I would hire someone to do the work. And sometimes I didn’t even know how to do the work. If you were to ask me how to do it, I would say, “No, I can’t.” But I would find the right people to do it and literally, I would stand there and watch them and learn, but I’m making money at the same time. And that was the start of it.
Stephen Semple:
This is how you hang a door.
Sergei Kaminskiy:
This is how you replace a toilet, this is how you install baseboards. Yeah, absolutely.
Stephen Semple:
That’s cool. At the end of your first year of doing this business, do you remember what you did in revenue in year one?
Sergei Kaminskiy:
Yes, it was just over $100,000. It was just over $100,000 in revenue year one. We put a goal for ourselves, and this was one of the biggest kind of business lessons for me. It was around 2005, 2006, and my wife and I were very ambitious and we said, “We’re going to buy a home within our first year.” Back then, if you remember the housing crisis, everyone’s buying condos and buying homes and they’re making all this money. My friends are calling me, they’re like, “Hey, I bought a condo in Arizona. I made $60,000 on this condo, I didn’t do anything to it.” So I’m like, “We got to buy a house, we got to buy a house. Let’s hurry up and buy a house.” So we put a goal, we’re like, “Within the first year, we’re going to buy a house,” so we did.
I saved up $30,000, and so we went to Arizona, bought a house that was more expensive than what we could afford at the time. I came into it and I said, “Yeah, I could probably do a light remodel on this.” Because the goal was to buy it, fix it, flip it. And so I’m like, “I could do this remodel in about two weeks and it’ll probably cost me about $10,000.” A year later and about 70,000 into it, so this shows you where I was at with my experience at the time. We finally finished this remodel because I started doing a lot more than I was supposed to do. I wanted to make it perfect, right? I wanted to make it perfect. And so then the economy started to take a dive, and then I tried. I rented it, I did that. We ended up losing that house. It was the best business lesson I’ve ever had.
Stephen Semple:
What was the lesson you took away from that, if it was such a big lesson?
Sergei Kaminskiy:
Oh, man. First of all, don’t bite off more than you could chew. Always have an exit strategy, always have a plan B. Because if plan A doesn’t work out, you need to always pivot and you need to have a plan B. For me, it was more of like, “We have to do this, we have to do this.” You don’t have to do anything. The timing has to be right, the deal has to be right. Just taking the emotion out of the transaction helps you make the right decisions in business, and I’m talking about any business. I’m telling you, we learned so much from that. We learned so much from it.
Stephen Semple:
Okay, so you finished up the first year, you’re doing 100 and some odd grand, you’ve saved up a whole pile of money. At this point, are you still also working as a framer or have you now quit the framing job?
Sergei Kaminskiy:
No, no, literally within three months of being married, I put in my notice, that two-week notice, and then I called him. I said, “Jim, I’m not coming back.” Because I did that job, I did it successfully. And then I got a taste of it and I realized I can keep going, I can do better. And so that was it, we ended on very good terms. I’m a big believer in never burning bridges. Being in business now for 20 years, people leave on different terms.
And it always amazes me how some people leave very nicely exit, and then some people leave with slamming the door. I never understood that. I never understood it because for me, it was always like I actually stopped by the office and we talked with, he was the superintendent on the job, Jim. I went and talked to Dan, who was the owner of the company and thanked them for the opportunity, and just exited very nicely and gracefully and went into business full bore, man. Just went all in.
Stephen Semple:
Nice.
Sergei Kaminskiy:
That was something that was very important to me at the time, is to make sure that I thank them for what they did, was provide employment for me.
Stephen Semple:
Now, I know you also then went on to start the kitchen remodeling, which is cool. But the one I want to really talk about is what was the inspiration for creating the franchise, the Kaminskiy Care & Repair, the handyman franchise? Because that is cool, what you’re doing there.
Sergei Kaminskiy:
It’s super cool and here’s what happened. I started as a handyman business. Two, three years into this, our customers started coming to me and saying, “Hey, Sergei, I need to remodel a kitchen. Hey, I need to remodel a bathroom.” I was very intimidated by those projects, so I hired an estimating manager, who is an amazing guy, by the way, Sheldon. Came in and he’s done kitchen and bathroom models before, so he started estimating these jobs and I would just watch him in awe and I’d be like, “Wow, how is he doing this?” Because for me, it was intimidating. They were bigger projects. Fast forward a few more years, what I discovered is that it was so easy to do these kitchen and bathroom models, and there was really nothing to it.
I started taking on these larger remodels, and so our average project became $450,000 average project, so everything from a $50,000 remodel up to $3 million plus remodeling project. So I started chasing the big dollar ticket items and we became an award-winning remodeler here in San Diego for 15 years running. I have a business mentor, he’s passed away since and amazing guy. Every time we’d meet with him for breakfast or lunch, he would say, “Sergei, there’s something about that handyman business. There is something special about that handyman business.” Even though I was chasing these big ticket items, I was still always listening to his advice. He didn’t know what and how, but he knew because I met him through a handyman job. I met him through actually putting a flyer on his door. And then I went and did a handyman project for him so he saw the value in that business.
My dad was the same way. He was always telling me, “Son, don’t leave the handyman thing.” So for me, I’m doing these large remodels, but every time somebody calls in to replace a light bulb or a ceiling fan or replace their toilet, I would tell my front desk person, I would say, “Send out one of our guys to do it. Let’s not leave it, let’s keep it going,” so I always kind of maintained that. Come 2022, I’m sitting there and I’m thinking, “Man, what we have with this handyman is truly, truly special.” Because it’s a cash flow business, it’s small jobs, constantly money coming in. It’s a necessity item, it’s a recession proof business. And one of my friends from the Bay Area owns a successful car dealership, calls me and says, “Sergei, I want to get into your space. I want to get into the construction space.”
Dave Young:
Stay tuned, we’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Empire Builders Ad]
Dave Young:
Let’s pick up our story where we left off. And trust me, you haven’t missed a thing.
Sergei Kaminskiy:
And one of my friends from the Bay Area owns a successful car dealership calls me and says, “Sergei, I want to get into your space. I want to get into the construction space.” I said, “Okay, let’s do it.” I said, “Why don’t we open up an office there?” He goes, “I’d be honored to.” I said, “Let’s do it.” So we opened up a location and going through the process of teaching him, telling him kind of the pros, the cons, all of the mistakes that he can avoid and just educating him on this business model, I came to a realization that I can help so many people across the nation. I reached out to a guy that I knew, Olaide, and we’ve done a multi-location dental business together with him. I was one of the investors in that business. He grew the business, we’ve successfully exited.
But I called him, I said, “Hey, check this out. Here’s the vision.” I told him, he goes, “I’m in, let’s do it.” So I brought him in as a managing partner and we started developing systems and processes of how to create a truly successful business model, something that’s scalable. It was literally him extracting information out of my head and putting it on paper and saying, “Hey, how do you do this? How do you do that? How do you do this?” So it was 20 years of just experience. Everything that used to live just up here, we had to put it all on paper and create systems and processes around it. And so we’ve developed a truly robust business model where someone can come in with very minimal experience and start this business and be successful at it.
Stephen Semple:
One of the things that I talked about that is really interesting about the handyman business, and you spoke about it a little bit that makes it special, is yes, it’s these small transactions, it’s this regular amount of business. But the other thing is like you discovered, it’s easy to stand out, especially if you add some professionalism. Because it’s very fragmented, it’s hard finding handymen. And if you are, they’re like guys with a truck. You built these systems, but the part that I also really like is you’ve actually created something that makes it possible for a guy who’s a handyman, who even if he just wants to be himself, to do the business. Talk a little bit about the process you created for pricing and also what you’re doing with the call center.
Sergei Kaminskiy:
It’s very unique because we understand the weaknesses of a typical Joe, the handyman, we call him Chuck in the truck. Their office is their truck. They don’t want to have a receptionist, and nor do we want them to because it’s very expensive to hire someone on full time, especially when you’re just starting out. So we have a centralized administrative team that takes on every call as it comes in. They follow an exact script, they figure out what office you’re calling for, and then they’re able to route that call right to the franchisee, so they’re able to route that call right to the franchisee when the call comes in. And if the franchisee is on a job site, if they’re talking to a customer, if they’re in the middle of another appointment and they cannot take that call, we have a centralized estimation team that can actually take the call and sell the job on their behalf on a commission only basis.
The franchisee still gets the project, they don’t miss out on the opportunity. The estimation guy makes money too, and then the customer gets the service that they’re calling for, so it’s a win-win, win for everyone. We also take on all of the marketing, which is amazing because in the last 20 years, we’ve developed the effective marketing strategies that we know work. And so in business, everything is about customer acquisition and how low you can get the cost per lead and customer acquisition cost. It’s super important. We know exactly who our customer is, how to properly target that customer, and then we’re able to spread and stretch the marketing dollar further for our franchisees. And so all of those things are a huge value for someone who’s just coming into the business and starting out.
Stephen Semple:
And the thing that’s incredible is so many great handymen are people who are, well, that’s what they are. They’re handy, they’re good with their hands. They like building things, they like fixing things, but they don’t necessarily want to run a business. And here’s the part I shared with you that was interesting, because one of the things we’re always looking for here, or I’m always looking for with this podcast is this whole idea of seeing things that businesses have done and learning from it.
And it turns out there’s a model for what you’ve done that you weren’t even aware of. That was Brian Scudamore with 1-800-GOT-JUNK. And 1-800-GOT-JUNK has been a long-term client of my business partner, Roy Williams. When Roy started with Brian Scudamore, there was two things. One, all the calls are routed through Vancouver so it’s this same idea where there’s this centralized thing, we pick up the phone, we can book the call, all taken care of for the garbage collection.
But on top of that, the other thing that they put in place was a standardized pricing. I call and I go, “You know what? I’ve got an old refrigerator that I want you to get rid of, how much is it?” It’s this much money. And it made it then really easy for somebody to call and the stuff to get booked. What you’re telling me is the same thing. I pick up the phone, I call. I go, “Hey, I got a ceiling fan I want to install.” You probably ask a couple of questions and you go, “Yeah, it’s $150 to install,” or whatever. And I’m like, “Great, can you send somebody out?” You say, “We sure can.”
Sergei Kaminskiy:
Exactly.
Stephen Semple:
And look, it’s fabulous because it allows that single guy to have that business.
Sergei Kaminskiy:
Absolutely. And look, the beauty of this too here, Stephen, is that people are calling in with this honeydew list. It’s not something that necessarily they’re super excited about doing. On our design remodeling projects, I mean, people are like, “Yes, I’m going to get a brand new kitchen, I’m going to extend my living room out,” and so it’s kind of like a dream for them. This is probably like your wife nagging at you like, “Come on, Stephen, you to got to get these guys out here. You got to get this guy done, I’m tired of looking at that hole in the drywall and I want that ceiling fan installed.” It’s that kind of thing so it’s a necessity item, but the important part of it, it’s not a huge financial decision.
So what we realized, it’s a service-based business and the ticket items are small. And so the thing is we have to take care of the customer right away because if we don’t, they’re going to pick up the phone and call someone else. That’s why it’s so important for us to have someone ready and available at all times to be able to pick up the phone and then provide the price right away. Because I can give you a price over the phone for a few hundred dollars on a job, anything under $1,000 and you want it done. You’ll be like, “Yeah, come out and get it done. I’m tired of looking at this, let’s just get it done.”
Stephen Semple:
And there’s also, look, increasingly we have an elderly population that need these things. And also just doing these things on your own are also really difficult. It’s hard to hang a picture. So this is cool, there’s a bunch of things here. Somebody was sitting across desk from you and they’re looking to start a business, whether it’s in the home services space or not. Based on what you’ve learned, what would you share with them? What would be your advice to them?
Sergei Kaminskiy:
Well, first of all, it’s not a get rich quick scheme. I want someone sitting there, considering a business to understand that it’s going to be a lot of hard work. It’s going to be a lot of hard work that they’re going to have to put into it. It is a real business, but it is a real opportunity. It’s a real opportunity to build your American dream, it’s a real opportunity to leave a legacy for yourself or your family and it’s going to be work. It’s going to be work, but what I know is that whoever goes into this business, they’re going to learn a lot. They’re going to learn a lot and we have amazing strategies to teach them. The amazing part about this is that they don’t have to have a master’s in home improvement. They don’t have to be someone who’s been in home improvement for 20 years.
It’s a plus, but it’s not a requirement and we’ve proven this with our locations that we have. In addition to that, they don’t have to be an expert in business because that’s the point of buying a franchise model. We have the ingredients in place to take someone on and teach them the models and the systems that will help them be successful. But I always tell anyone that’s getting into businesses, it’s going to be hard work, it’s going to be a grind. For the first two to three years, you’re going to have to really commit yourself to be successful. There’s different emotions that we experience as being in business. I bring up the analogy of playing the game of Monopoly. I love the game of Monopoly. I do it because I enjoy playing it. I don’t get paid for playing the game Monopoly, but I do it anyways. But as I’m playing the game, there are moments when I experience great joy and I’m so happy, I rolled the dice very well.
Stephen Semple:
“Boardwalk, woo-hoo!”
Sergei Kaminskiy:
I made a good trade, but then I see somebody making a trade that’s going to hurt me or something is happening. All of a sudden I’m feeling a little bit upset, a little bit salty. So you’re going through these different emotions playing the game. And to me, business is no different. We do it because we truly enjoy it. We’re building something successful. But you’re going to have, you’re experience different emotions. Just like with any other game, just like with Monopoly, with chess, with anything else, you’re going to have good moments and not so good moments. You’re going to have to take the good and the bad, the pretty and the ugly.
But the point is you determine you have the grit and you’re like, “Okay, this is something that I want for myself and my family. I want to have the American dream, I want to be successful. I want to have the freedom, I want to build something. I want to provide good employment for others. I want to provide good service for other people, contribute to the community, improve homes for people.” And so when you have all of those things and you’re like, “That’s what I want to do,” you’re going to be successful. You’re going to be successful.
Stephen Semple:
Well, one of the things that I really liked that you brought to it, because I’ve seen lots of franchises, many of them are just like, “Well, here’s the system for doing the work.” And I get it, that’s somewhat important. But it’s funny, I always look at the coffee franchises and I go, “It’s not about the operations and it’s not just about the coffee, it’s also about building the business.” And what I like is you guys are really and truly giving people something that is turnkey from the perspective of, “We’re going to support you with the marketing and we’re going to support you with the sales effort, with the fact we’ve got this call center and all these other things going on.”
And I think especially what I’ve seen in the home services space, that’s the piece that’s been missing. They all come up with the, “Here’s the way to price things, here’s the way to do it,” but then they struggle with their call centers and they struggle with their marketing. And the fact you guys are running with that, I actually think you’ve got a winning business model. And I really believe that we’re going to be seeing your franchises all over the place. So if somebody was interested in learning about acquiring or looking at a franchise, how do they get a hold of you, Sergei? How do they reach out to you?
Sergei Kaminskiy:
Just go to Kaminskiy.com, Kaminskiy is with an I-Y on the end. Kaminskiy.com, and there you’ll see the Kaminskiy Care & Repair company. Click on that, it’ll take you to our website, and then you can go to franchising. And then franchising button on there, and then it’ll take you to our franchising page. There is a nice video on there, there’s some great information, some numbers. We have our item 19 proudly displayed on the franchising page, which not a lot of companies are doing, but we’re proudly displaying item 19 for two of our locations. You can see all of that on there. Also, Sergei.kaminsky is my Instagram, and so if anyone wants to get to know me a little bit better or send me a DM, feel free to do so.
Stephen Semple:
All right, awesome. And where are you looking for locations right now, pretty much everywhere or is there a particular-
Sergei Kaminskiy:
We have a lot of white space on the map right now, we have a lot of white space. Especially Texas, North Carolina, Florida, Idaho, those are all very hot areas, they’re going to do very, very well. But if you’re interested, reach out to us. We’ll do some market research, we’ll make sure there is enough home density there. We want every franchisee to succeed, so that’s something that before we bring a franchisee on, we want to make sure that their area is going to be able to support the business.
Stephen Semple:
Cool, awesome. Thank you very much for taking the time. I think what you’re doing is fantastic. And the part that I think is really interesting that a lot of businesses can lose sight of is big projects can be so glamorous, but sometimes the really powerful businesses are those day-to-day small item that people need, that there’s that gap in the marketplace. Hey, look, thank you. Thank you very, very much. I hope a few people reach out and have conversations with you.
Sergei Kaminskiy:
Yeah, I appreciate it, Stephen. Thank you so much for having me on, it was fun. Thank you.
Stephen Semple:
All right, awesome.
Dave Young:
Thanks for listening to the podcast. Please share us, Subscribe on your favorite podcast app and leave us a big, fat, juicy five star rating and review at Apple Podcasts. And if you’d like to schedule your own 90 minute Empire Building session, you can do it at EmpireBuildingProgram.com.
