Transcript

Let's talk about TPA for a second because that's one of the, you know, kind of, I don't know, taboo words. And you know, some of the these buyers, mine, right, they're like, oh, that we, we don't want any TPA. And then some others were like, yeah, we'll take it all the way up to 50% of the revenue. Where do you stand on that? So I am probably one of the biggest pro TPA and Lance, a contractor connection would get bad at us for saying TPA manage repair. But I would tell you, I think anyone who can operate and manage repair is a great operator. They have the most stringent rules, they have the most guidelines, they have the most oversight, most restrictions whatsoever. If you can operate a profitable business doing TPA or managed repair, you can operate and get your work anywhere else. So I would say. Thinking someone who doesn't do manage repair and bringing them into an ATI where we do a fair amount of it. Is probably not going to be a good fit. So if someone who's anti someone who's modifying Christ and is not going to be a good fit for us, so be a good fit for someone else. I want someone who's following the most stringent roles, most diligent. They are going to have a really tight operation that's going to fit really well with my business. Yeah. So I always find it interesting because you are the common complaint for, you know, business owners that I ask about. Hey, are you doing TPA? No, I don't want to pay the 5% of the referral source or what or referral fee. And I go, are you paying plumbers? Yeah, we're paying plumbers. What are you paying plumbers, $1000 a lead? Yeah. What's the difference? Right. So you're going to get this influx of leads and move by and large, GPA is good volume work. And I just, I mean, obviously there's a downside, right? They can cut you off if there's an issue. They're going to cut you off for X amount of months or X amount of weeks, whatever the case may be, but. I just think that every business should have some component of this TPA work unit and I'm just surprised at how many buyers find it as a non, non starter. They just don't want to be a part of that, that industry at all. No TPA work is best. So I think the whole misnomer of the see, like I don't care how you get, I don't care if you're playing Palmer plumbers exclusively, you're generating it all through business development. If we go into Google and doing SEO optimization, there are multitude of ways to do it and you're gonna end up paying. 4 to 6% while those two a plumber as a TPA it's online or you're hiring business developments. So to me, I look at it one and the same 4 to 6% we we as an industry, I believe can afford to spend. I think as you're spending more than that it's it's not sustainable long term. And so plumbing referrals. We've done the math we don't do it, but it's about four cult 4 to 7% went to a TPA fee would probably not as many cooks in the kitchen reviewing your. Probably still higher margins so you are going to have pinch margins and TNTP air manage repair work that you may not have elsewhere because of all the checks and balances. But I think every the best restorer has a diversified portfolio. I don't want to buy someone doing 100% TPA. Same point. I wouldn't buy someone who's doing the 100% plumbing referral. I'd rather someone be doing 15% here, 30% there. That way if you lose your customer, you lose the the plumber. You get kicked off a USA or nationwide or any major carrier. You're fine. The business can can fix itself. Yeah. And you're never gonna have to worry about a TPA provider becoming a competitor. I see this far too often to where plumbing companies say, wow, this restoration business is pretty lucrative. Why don't we just go start up our restoration company and now we're a competitor to the restoration company that we've been providing work to like that you you've lost that lead source. And if you know and and Mark one example of my 40% of your revenue coming from 1:00. Plumber, you just lost a lot of revenue. I know Mark 1 wasn't receiving them from from a plumber per se, but using that as a the example high risk there as well. But I love the TA work and I just it's one of the interesting topics in the industry. And I think if you look at referral fees like TPA work, it's a flat fee no matter how big or small your wife, you look at it a plumbing business, a local, even a national. Like if you're paying $1000 a lead if ATI wants to go in there and wants to spend 1300. Powers lead we are now just stepping on each other's toes because ultimately that plumber is going to take the largest referral source. Even if you've been a customer for 15 years, money to their bottom line is money to their bottom line. Where TPA it's all on performance. It's the same across the board. So they got plumbing referral business can be a slippery slope because there's always someone that's going to be willing to pay more. Absolutely. And I I did a a sale of a business in Virginia, all water mitigation company. 7 year old company. Initially, yeah, They they're they're heavy on plumber referrals. They get about 70% of their leads come from plumber referrals. So when they first started, he said. How much were you paying for plumber referrals? Nothing, yeah. OK, how much were you paying a year 23250 when we sold the business, they were paying $1100 per lead. So you're going from a zero to an $1100 per lead in a matter of seven years. And you know, flash forward seven more years, what's that be going to be? And, and at some point there's a breaking point, but just want to take it out for sure. It's a slippery slope because you're right, plumbers going to take any, any referral source, right? If if you're paying to play, they're going to. Obviously play with with person that's paying the most amount for those fees.