Green energy will be huge and insulation is a great way to help the environment.
Are you interested in owning your own business and helping the environment? The Koala Insulation is for you.
Nat and Pete talked with Scott Marr, the founder and CEO of Koala Insulation, about the company, what they offer, and how they help people move out of the corporate world and live life on their own terms.
Scott M.: I really fell in love kind of with the environmental aspect of insulation; you wouldn't really think about it from that standpoint when you first look at it. But then, when you really kind of break it down, insulation is one of the best things that you can do to reduce energy waste in a home or a building.
Pete: Welcome to the hire yourself podcast. If you're ready to take control of your destiny, build wealth and live life on your own terms, this is the place for you. Each week, Nat and I will talk about business franchising and personal growth to help make you more successful. All right, well today, we are joined by Scott Marr, founder, and CEO of Koala Insulation. Scott, just thank you so much for joining us today.
Scott M.: Yes, I appreciate you guys having me on.
Pete: We always kind of love to have franchise founders on the podcast, and we'd love to; maybe if you could take a couple of minutes and share a little bit about your story, how you got started in all this?
Scott M.: Yes, absolutely. So I've been in business and really been an entrepreneur since I was 15 years old. I started my first business in high school, just as a high school student, if you will, and started to scale of business as I graduated.
A few years into that, learned about the power of franchising and converted all corporate system to a franchise system, had a lot of fun with it. Scaled it nationally and decided that I wanted to do something a little different, and so we started Koala insulation, and here we are.
Pete: That's amazing. So like tell me a little bit about like what was your thought process between doing something, being successful on that, and then kind of jumping off and starting Koala from scratch? Or how did you get that idea even?
Scott M.: Yes, good question. So I had been in the truck washing space, my prior concept, Fleet Clean USA. I was in that space since I was really young, and it's just kind of to the point where I said, look, I want to switch gears here. I want to move into a little bit larger space.
The truck washing space is great, nothing wrong with the business. But just wanted to move into a space that had more potential. The insulation space really checked those boxes. So for me, I was looking for another concept. I really wanted something, either in-home services or commercial services.
So you look at insulation, it's a 50 billion dollar space, and then it's tucked inside kind of the home renovation space as well as general construction. Those are very large spaces like construction per years in the trillions. So when you really look at the space, it's pretty solid. Yes, so really just wanted to switch gears and move into a concept that was still mobile, that was still service, that was in a larger space with more revenue potential.
Something that's not so niche, if you will. And then I really fell in love kind of with the environmental aspect of insulation. You wouldn't really think about it from that standpoint when you first look at it.
But then, when you really kind of break it down, insulation is one of the best things that you can do to reduce energy waste in a home or a building. So I really liked what I learned, and here we are.
Pete: Why the name Koala? I'm dying to know, why did you name it Koala?
Scott M.: So we actually started the business under a predecessor name and through a number of focus groups and just internal sessions and things like that. We really wanted a mascot, but we didn't want a dog or a cat or a bear. We didn't want anything that was already really done.
We wanted something that was fun and unique. And somebody actually said, well, what about a Koala bear? And then later did we learn that they're actual marsupials, but not bears at all.
So then we took that, as a really a data-driven company, we took that logo that our in-house graphic designer drew, and then we really put a lot of different colors and fonts and typography things like that together.
Then we took that out to focus groups. We want to know who people wanted to buy from as it related specifically to a logo, and that's how we came up with Koala.
Pete: Good. So tell me it's an industry, it's a large industry, but it's fragmented, right? You've got some big players and a lot of mom and pops. But what separates Koala from all the competition? So what makes you guys special?
Scott M.: Great question. So we do a lot of different things. So one of the things that I'm really big on, I've done multiple renovations in my life on homes and done a lot of construction with commercial real estate and things.
And I've always had a challenge with hiring good companies to come in and do work. And so whenever we started Koala, I'm a really customer service-focused guy. So I said we're going to put together a really fantastic customer experience. That's a big part of what makes Koala special.
But then additionally, we do offer a limited lifetime warranty to our customers. And then, we also offer an annual insulation inspection program. So that's something that no other insulation companies doing. You might think, well, why would you need an annual insulation inspection.
And the reason why is so if a customer just came in and spent three, four, five thousand dollars having their insulation upgraded, because maybe they had a roof leak that they didn't know about. Or maybe they had some sort of pests or animals living in their attic that they weren't aware of. So in those sorts of situations, we can come in on an annual basis, check out everything, see what's going on in the attics.
And then, also use a thermographic imager, and make sure that everything is performing well. Maybe you had new cable provider installed. And when they go into the attic to do that installation, they're just going to dishover the insulation around and not really put it back most of the time.
So those are things that can ultimately cost a whole money. So for a pretty modest price, we can come in on an annual basis, do a nice 30-minute inspection, we write up a nice report, and then we provide that to the homeowner that they can then pass along whenever they go to sell the house.
Pete: So you come in, you do a energy study or whatever, to tell me how much more efficient you can make my house. What can somebody expect to save? Is it like 30 bucks a month, or is it ten bucks a month, or is it 50 bucks a month? What can somebody expect in terms of energy savings?
Scott M.: So it really depends on where they're starting from. So let's say they start out with an R10 in their attic, so that's how insulation is measured in terms of thickness, and so it's by R-value.
So if they're starting with an R10, and then we're going to bring them up to say our R38, then that's going to be a much more dramatic difference on their energy bill than if someone is starting with, say, an R20 or an R30 going to an R38.
Pete: That's good. So multiple different services in addition to installation. Back to the installation, I believe I read you have your own unique products, right? So tell us a little bit about your unique products that you have.
Scott M.: Yes. So we actually have a foam brand that we sell, and that's called Qualifoam. The product is good because with spray foam specifically, it's a two-part product, a part a and a part b. And when those products are installed, they create a chemical reaction to react.
So our product is designed with the latest and greatest blowing agents, so when that product is being installed, it off-gases with a lesser amount like lower VOC if you will. So not only is insulation inherently good for the environment because it reduces energy waste, but we also try to focus on the processes and procedures while the installation is happening as well.
Pete: Do your guys typically go out like one tech or two guys? Or what does that look like?
Scott M.: Yes. On a normal rig, and on a normal day, it's going to just be a lead and then a crew member. So two people per rig.
Pete: And who gets to go up in the attic? Do they draw straws for that, or how does that work?
Scott M.: No, well, especially during the summer, they have to switch out pretty frequently just because of the heat. So both of the installers are in the attic, and they really work side by side with one another.
Nat: You can create a weight loss program with that.
Scott M.: Yes, exactly.
Pete: Charge people to actually go do it, right? We got this insulation weight loss program.
Scott M.: I love that idea, actually.
Pete: So money-making. Tell us a little bit more about the customer experience, right? So you have a superior customer experience, tell us about that.
Scott M.: We have a great operations management software system. So when you go to Koalainsulation.com. So we're very educational in our sales style. So we have a learning center on our website, we also have vlogs.
So we're starting to produce like the various like video blog for each type of installation for the average homeowner or business owner that just doesn't know about the different types. And so for us, we really want to empower the customer so that they can choose what's best for them and their pocketbook.
So we start out with a very educational website. And then, from there, we have a great operations management system. So when a customer calls in, and they're wanting a quote, we can schedule that really quickly, they're going to get an alert with a confirmation so they can add it to their calendar to remind them.
Then whenever we're on the way to give that estimate, it's going to also send the customer an on the way alert, with a picture that says Jeff with Koala insulation of North Houston will be there between this time and this time. So that's really nice from that standpoint, and then we have the ability to photo document before and after so that the customer can see what things look like before and after.
And then, in terms of being able to make a proposal for the client, we can give them side-by-side comparison. So if they don't know what type of insulation it is that they're wanting, we can make multiple suggestions to them, and then they can just choose which fits their budget, things like that.
So just really methodical in terms of how we thought out the full-on customer experience, all the way down to the installation. One of the things that I've had done is installation, and whenever I've had the company come out and actually do the install, they leave my house typically a mess. Like they don't clean up after themselves. And so that's one of the things that we really put an emphasis on, is leaving the space as cleaner than we found it.
Pete: So you also have a cleaning service; Koala quality cleaning service too associated with this, right? Another revenue opportunity. So superior customer service experience, superior product, your belief, right?
So let's talk a little bit about franchisees. I think when we talked before, you said, hey, we're very particular about the type of franchise we're looking for. So tell us the type of franchisee you're looking, for Koala?
Scott M.: We're really looking for someone that has business leadership or just general management experience. So the business can be ran in a semi-absentee fashion or from an owner-operator fashion.
I don't really like the word owner-operator because that might give people the idea that they're going to be an addict each day, and that's not who we're looking for.
We're not looking for people to sign on to buy a job. We really want people that are going to work on the business and not in the business. So yes, we're looking for folks that really can build a team, manage a team, grow a team, and really scale and build an enterprise in their local market.
So typically, we're looking for people that want to be multi-territory owners and people that are really looking to scale into multiple rigs and build a really solid business in their area.
Pete: I don't have to have insulation experience?
Scott M.: No insulation experience is required. In fact, I didn't have insulation experience when I started this business. I didn't know anything about; I say I didn't know anything, I knew very little about construction in general. And I've been able to pick it up pretty quickly.
So we have a really great training program and knowledge transfer systems in place to be able to bring a franchisee in that doesn't know really anything about other than what they learned through due diligence of the opportunity; we could bring them in and really train them, and that's really what our training center is about at Koala HQ.
Nat: Hey, you mentioned Riggs a couple of times, so not to get into the wheat’s. But can you unpack that? Like what kind of trucks or equipment or rigs do they start out with?
Scott M.: Sure. So our opening equipment package consists of one pickup truck; typically, we recommend a Ford F-250 crew cab.
Pete: I love Fords.
Scott M.: And then it comes with two insulation rigs. So these are 16-foot trailers. Bulk insulation definitely takes up some space, so you have to have the ability to have cargo there.
So two 16 foot trailers, one is for the blown-in insulation and more traditional, so whether it be bats or loose fill. And then, the spray foam rig is the second rig, and that's where you can spray open and close cell foam.
Nat: So you don't necessarily have a box truck, but you have more like an F-250 that can tow the different trailer rigs?
Scott M.: Correct.
Nat: That's awesome. And speaking of box trucks, it's actually one of the things that we talked about in our department head meeting, is we're actually going to be doing a design and layout of a box truck set up here before too long.
Pete: Got it. What makes a franchisee successful? So as you look at that, what separates a good solid franchisee from an exceptional franchisee?
Scott M.: Yes. And I think this is not unique to Koala, what I'm going to say here. But what really makes a good franchisee is someone that follows the system, that's extremely important, so that's what you're buying.
It'd be the difference of saying going to a lawyer and then not taking the lawyer's advice that they give you. It's really important that people that come in that buy a franchise, they really soak up all the systems and processes that the franchisor has put in place. And then really focus on trying to stick to those and replicate those in their local market.
The other side of it is the ability to see the difference between what is an investment and what is an expense. So with new business owners, a lot of times, what I see is that people will come in, and they'll try to skimp, or they'll go with the lowest end estimate.
So if we say you really need to hire an operations manager from day one and a salesperson, because you're buying four or five territories, and then we see that they might only want to hire one, and then try to have that person do both roles. And those are just things that ultimately are going to end up costing you money.
So for us, it's really important to have people that really want to follow a process that want to build a big business and see the difference between an investment and an expense. Because you all know, I mean good people will definitely make you money, not cost you money.
Pete: Absolutely, right? Investing in your business. So one of the things, as we look at it, is that you get potential candidates from probably organic leads; you get them from franchise consultants.
Can you kind of say or tell us a little bit about what the advantages of somebody that's looking for franchises, why you use a franchise consultant? Why would you leverage a franchise consultant to explore franchises like Koala?
Scott M.: Sure. So I can really speak to this well because, in my prior system, we did not use consultants ever to build out our franchise partner base, and now with Koala, we are. The candidates that are coming through are, they're ready to follow a process because the process that consultants use; you have to be able to follow a process to get through it.
Once the candidate is introduced to us, they have to follow a six-step process to actually make it through. So I say that from a franchisor seat, the consultants do a really great job of matchmaking.
But then also, I think that they do a great job of getting them prepared to follow a process, that's really important from a franchisor's point of view.
Pete: So I want to touch on one last thing, and we're in this middle of this pandemic, this COVID-19, right? You picked a great time to start a franchise, right? A lot, a lot of headwinds, I guess would be the best way to say it.
So I'd like you to tell us a little bit about how you've helped your franchisees through the last 120 days, right? Develop leadership, but the benefits of being part of Koala as we went through this pandemic.
And then maybe a little bit about how they've done in terms of business. So tell us a little bit about how you guys have navigated these crazy days.
Scott M.: We saw this thing start to really come down early, well, mid-March. And then, from there, we kind of jumped in headfirst. So we have a PR firm that we work with. So we started, you know, preparing statements for franchisees to be able to use and share with customers. We helped to develop new protocols for being able to enter the home in a new way, things like that.
We started sourcing PPE very early on. PPE is a big deal on installation anyways. So we started sourcing PPE early on and starting to stockpile that so that it wouldn't become an issue for our franchise partners. Then beyond that, we really just, we were already doing a great job in my opinion with supporting our franchisees, but we stepped that up even more.
We actually hired an additional three people at HQ through the pandemic, one of those being a national recruiter. We saw that there was probably going to be some turnover which there was in our staff, and our national recruiter Megan Taylor was able to jump in and really help to make some new placements for those franchisees that experience turnover.
We also helped with paycheck protection program guidance and the economic injury disaster loan guidance as well. And we were able to help with making contacts.
And so we were able to support the franchisees, and we had 100% participation in the PPP program with our franchisees, and so they were all able to take advantage of that. So yes, so I feel like we kind of hit; we checked all the boxes and then some.
Pete: Yes. It sounds like you did a great job, especially being new. Going into a tough time, you invested in more infrastructure to support the franchisees. So congratulations on that. That's amazing.