Monday Mar 31, 2025

13: The Michael Kaplan Episode

In this episode of the Huge Transformations Podcast, Gabe Torres interviews home service veteran Michael Kaplan, who scaled a failing three-truck carpet cleaning company into a multi-state, 200-employee enterprise generating over 17 million in revenue. Kaplan shares how he stumbled into home services after exploring other business opportunities (including franchising Jimmy John’s!), and how leaning into “low-reputation” industries can pay off big when you focus on professionalism and customer service. He explains the evolution of company culture—starting with a “frat house” vibe, then formalizing values as the business grew—and how protecting culture and nurturing genuine relationships were critical to long-term success. Kaplan also highlights how recessions reward lean, scrappy operators, and offers practical wisdom on scaling, culture-building, and the power of investing in relationships.

Show Notes

Transcrip

[Sid Graef]:
Hello, everyone. Welcome to the Huge Transformations Podcast. I'm Sid Graef out of Montana.

[Gabe Torres]:
I'm Gabe Torres here in Nashville, Tennessee.

[Sheila Smeltzer]:
And I'm Sheila Smeltzer from North Carolina. We're your hosts and guides through the landscape of growing a successful home service business. We do this by interviewing the best home service business builders in the industry, folks that have already built seven- and eight-figure businesses, and they want to help you succeed.

[Gabe Torres]:
Yep. No fake gurus on this show—just real-life owners that have been in the trenches and can help show you the way to grow profitably. We get insights and truths from successful business builders, and every episode is 100 percent experience, zero percent theory.

[Sheila Smeltzer]:
We're going to dig deep and reveal the good, the bad, and the ugly. Our guests will share with you the pitfalls to avoid and the keys to winning. In short, our guests will show you how to transform your home service business into a masterpiece.

[Sid Graef]:
Thanks for joining us on the wild journey of entrepreneurship. Let's dive in.

[Gabe Torres]:
Hey, what's up, everybody. It's Gabe Torres with the Huge Transformations Podcast. We have an incredible guest today who is a home service legend that most of you probably already know by the name of Michael Kaplan. But if you don't, you're going to be really, really happy after this episode because there's going to be so much value in it. So, Michael, thank you so much for joining us. What's up?

[Michael Kaplan]:
Thanks for having me—legend, that's a big word. No pressure, right?

[Gabe Torres]:
The one that was weird for me was to call you Michael, because I always call you Kaplan. And so, um, I think I'm going to stick with Kaplan, but to everybody else, it could be Michael Kaplan.

[Michael Kaplan]:
My mom gets my name wrong, so it doesn't matter.

[Gabe Torres]:
Where are you at currently? Are you home?

[Michael Kaplan]:
I'm just outside of Minneapolis, in Minnesota.

[Gabe Torres]:
And that's home base for you, right?

[Michael Kaplan]:
Yep, we're digging out from about ten inches yesterday, so we got a little bit of snow and sludge and all that crap before the home service boom in a couple of weeks.

[Gabe Torres]:
Yeah, before busy season. So, for those of you who don't know Michael Kaplan, give us the quick backstory rundown: how'd you get into the home service space? What did you get into specifically in home service?

[Michael Kaplan]:
You know, it was not on purpose; it was kind of by accident. I think that happens to a lot of home service entrepreneurs. But in 2006, I was looking at starting a business or buying a business, had run across plenty of opportunities, and really couldn't come up with a business plan that made sense with any of them. I hadn't looked at service at all.

Then a friend put in front of me an opportunity to invest in a carpet cleaning company, and honestly, I didn't know people cleaned their carpet. I was 26, and I started looking into it and thought, “All right, well, I can do that.” And the thing that really got me to pull the trigger, as dumb as it is—and this might get edited out, but it's true—was in 2006, I'm digging through the Yellow Pages to try and figure out who the competitors in the carpet cleaning space were. I'm flipping through, flipping through, and I came across one of the most reputable companies in town. They had a half-page ad with a little checklist of all the things they were awesome at, and near the bottom of the checklist was “We don't smoke in your home.” I was like, “I can do that! Is that where the bar is?!” Like, you know, we have to promote that we don't smoke in your home? So, I figured there probably aren't a lot of business people in this industry, I'll give it a go.

So I dug in and originally, I had three partners. We bought a failing three-truck, two-employee carpet cleaning company in Minneapolis, and we were running from there.

[Gabe Torres]:
Can I pause real quick and backtrack a little bit? Because, like you said, a lot of people's journey into home service is sometimes accidental, or they're looking in one direction and end up going another way. What were you looking at before the carpet cleaning opportunity hit your plate?

[Michael Kaplan]:
The first thing that really got me juiced up was I wanted to franchise Jimmy John's. I grew up in Minneapolis—St. Paul, actually—and there was one Jimmy John's in Minnesota. It's where you go to get a late-night snack, and it just became part of my culture. I was like, “Man, I went to college out in Maine and spent a lot of time in Boston, and there's nothing like this in Boston—it would crush!” So I spent like a year and a half pursuing that. Not because it was franchising, not because it was anything other than it made sense to me.

But the more I learned, the more I shied away from the opportunity because rent in the major metro areas, especially Boston, is just insane. If I were smart, I would open up 200 Jimmy John's in Minnesota, but I haven't been accused of being that smart. So that was the first thing.

The next thing I looked at that I got really serious with was a financial education program where we would get banks to sponsor us to go into high schools to teach financial literacy. It's an under-evolved part of education, and so many people make so many preventable mistakes because they just haven't grown up talking about credit or interest rates. But the nuance between the private sector, the public sector, and schools made it really complicated. It just didn't go anywhere.

[Gabe Torres]:
Okay, so all over the board. That's cool. I love that. I was just talking to a guy who has a DJ entertainment business, and he got a random, crazy idea to start a window cleaning company. He was like, “I don't know if I'm going out too far out of my lane.” So it's always interesting, because entrepreneurs are always looking for opportunities and will take a look at almost anything, right? So for you, it was becoming Mr. Jimmy John himself, the financial education opportunity, and then landed on buying a carpet cleaning company—was that the one in Minneapolis?

[Michael Kaplan]:
Yeah, I ran into the opportunity because a good friend was being approached to join an opportunity to buy the company. He had carpet cleaning experience. I, again, I didn't know it was an industry; it didn't appeal to me or jump out. I just started to learn about it and started to map out what it would mean, and I thought we could fulfill this type of responsibility, cater to the clients, figure out the money, and all that. The pieces came together.

But my real goal was—I didn't really have the vernacular for it, but I wanted to be in private equity. I wanted to be someone who buys and fixes broken companies. So there was a broken company in front of me, and I thought, “All right, to do this, I've got to start somewhere, and this one is small—how hard could home service be?” Well, it's really freaking hard, but my goal was to spend three years in the industry, working in the business, figuring it out, and then keep it or flip it. Success would be, instead of three trucks, maybe we'd have five, maybe we're doing a million or a million-two, and then I'd move on to the next thing.

Well, I ended up spending about twelve years doing it because the opportunity presented itself to keep growing. I was having a ton of fun, was still learning, and had more to prove. Also, I hadn't wrapped my arms around what leaving would look like, so I just stuck with it and kept running. We ended up in six states, had about 200 employees, just causing trouble.

[Gabe Torres]:
A couple more trucks?

[Michael Kaplan]:
A couple more trucks, yeah—maybe 80 or 90.

[Gabe Torres]:
80 or 90 trucks. At what revenue point were you guys at twelve years later?

[Michael Kaplan]:
17 or 18 million, somewhere in there.

[Gabe Torres]:
Jiminy Christmas, that's awesome. That's a lot of rug-sucking.

[Michael Kaplan]:
A lot of rug-sucking.

[Gabe Torres]:
So three years became twelve years, a couple of trucks became 80 or 90. One of the things that we always talk about on the podcast is obviously you've seen a ton through that amount of time, and you've done stuff beyond that carpet cleaning company, still doing stuff in the industry. But when you think back from when you first got into it to twelve years later, there's the big issues like: how are you going to get the work, right? The demand part. Then there's how do we staff up for it. Those get talked about a lot. One thing that had to have changed or gotten ingrained over that time is culture. I'm sure the culture from when you first got that business to twelve years later—did it stay the same? Did it change? Did it get ingrained deeper after twelve years of you guys hammering the culture? Was there no culture when you got it?

[Michael Kaplan]:
Well, there were no employees—there were two brothers, so there wasn't a lot of family culture. I think early on in a business, the culture is really defined by the leader. Eventually, when you're having success, you can sort of templatize it. I don't mean to downplay the need to work on it—it gets easier to reinforce, but harder if it gets off track the bigger it gets.

Early on, I was in there making egg sandwiches and pancakes and doing cookouts after hours. We were trying to drive business through postcarding, so we'd buy 6,000, 10,000 postcards and have licking-stick parties, literally licking because they weren't the peels. We'd just have a case of beer, and I wouldn't ask anybody, but we had maybe 5 or 10 employees. They'd come join me because I had a case of beer, and I'd be there until ten at night. They wanted to be part of something, so we gave them that community. Some of the driving forces behind competition within the business, spiffs, and things like that got them fired up about inching forward.

Service was one of our big rallying cries because the carpet cleaning industry is really not very reputable. People are not expecting you to kill them with kindness and care about the results. They assume you're going to screw them, so they get aggressive when there's a problem. We took the opposite approach and tried to say, “How would you want to perform in your mom's house? How do we templatize that and get people to pursue that type of service on a daily basis?” So we did it, I think. I'm all over the place, but we did a pretty good job at creating that rallying cry.

But it doesn't scale. You can't have a ten-million business that operates like a frat house doing 300 transactions—it's really freaking messy. So eventually, we realized the culture can't be based on the leaders and our rah-rah; it's got to be based on the team. We started using Patrick Lencioni's tricks and tips for documenting culture, putting it on the wall, and making sure we didn't have aspirational core values. We looked deep and tried to figure out what really makes us tick—what are the values that we run the business on, and which values can we hire and fire by? When you take it that seriously and you put them on the wall, it can be like a North Star that shows people, “We're going that direction, and you're never going to get hired—and you will get fired—if you're not going that same direction with us.” The behaviors people exhibit become meaningful. We'd take B-players over A-players if the B-player was aligned with our culture and the A-player wasn't. It's easy—maybe it's not easy—but it's not a Herculean lift to find new revenue if you had to fire someone producing a lot of revenue, but it is a Herculean lift to fix culture. So we were really protective of it.

[Gabe Torres]:
At what point did you realize that didn't scale—that the culture can't be on the leader?

[Michael Kaplan]:
We ran out of room on the grill for pancakes. The grill got too small. I always didn't have a job description early on, but down the road—when we were doing 5, 10, 15 million—I did have a job description. The top bullet point was always something to the effect of “I own the result of whatever our culture is.” I was the key ambassador for culture, but that meant I had to make sure policies and direction were aligned, not that I had to introduce the values and reinforce them with every employee, every time, at each step of their onboarding process.

Eventually, you're working on the business rather than in the business, so you need to make sure you've got the values articulated and cascaded down the ranks. By that point, you're deputizing the team and playing the role of chief repeating officer to a few people who then reinforce it with the masses. We were operating out of state as well, so there's a lot of repeating needed.

[Gabe Torres]:
I heard this while listening to a podcast on Steve Jobs, and they were talking about why he was so good. He said he just never forgot that people forget that people forget, and that you just constantly have to remind them. So I imagine that in itself could become a full-time job with 200 employees and key people in different states.

One of the things you brought up earlier was you said, “Starting a home service business—how hard could that be?” Then you said, “Man, I found out it was really hard.” But also you started in 2006, right before a great time in America. Right now, I'm starting to hear a lot of people talk about how the economy seems to be going downhill, inflation is through the roof, eggs cost—I mean, my mom calls me every week to tell me what she spends on eggs. For the business environment that everybody's operating in right now, you are somebody who has gone through arguably a much harder time than what we're seeing. How was that, starting up a home service business right before the Great Recession?

[Michael Kaplan]:
My story is probably a little bit different than the typical story because we started booming at the beginning of the recession. So September 11, 2008, we were operating five trucks, doing 1.1 million in ’08—on pace to do that 1.1—and we got some good press that day. We had pursued an article in the newspaper, and it got published, and boom, our business started taking off. That opened our eyes to the opportunity; it didn't reinvent the business, but it gave us confidence to reinvest differently.

But what happened is capital markets dried up, liquidity dried up, and anyone involved in property was getting their asses kicked. My business partner at the time had joint and several liability on 21 million dollars of real estate development—there were no tenants, no buyers. He had preorders, and they all evaporated because all the finance requirements changed. So he filed for bankruptcy at the beginning of ’09. Our business is booming; we're trying to buy trucks, and our capital guy evaporates. He filed for bankruptcy, so no one would give us any loans based on our guarantor.

What might be more relevant here is that while I think you need to carefully think through consumer mindset and the type of investments you're making when the world is rocky, most of the viewers of this podcast are smaller businesses. One huge advantage we had in growing during a recession was we didn't have a lot of bloated infrastructure—we were already pretty lean. The Stanley Steemer in Minnesota was one of the biggest in the country in ’08–’09. They were doing about four and a half or five million. Four years later, they sold to their franchisor, they had been running 25 trucks, they were running four and doing less than a million. Part of it was the recession, part of it was the employee bathrooms had gold faucets—it's also a second-generation company, and there wasn't that scrappiness.

Buffett has an awesome quote: “When the tide goes out, you see who's swimming naked.” That means, when the tide's in, maybe people are doing stupid things, spending on high interest rates or having too much excess capacity or too many employees. When it's boom time, they're not watching the budget. Then the tide goes out, the market gets harder, and it's harder to operate. So you find out real quick who's swimming naked, who gets their butt kicked.

We were a tiny tot running just a couple of trucks and started realizing, “Okay, everyone else is in the corner sucking their thumb, nervous about this recession—what if we get really freaking aggressive?” So we went from having a 6,000 monthly budget in marketing to over 30,000 within four months in 2009. Within a year and a half, we were spending close to a million dollars on media per year, and the opportunity was there. People liked what we were doing, and we had a model we thought we could run with, so we said, “Well, let's double down—get while the getting's good.”

[Gabe Torres]:
Yeah, and I think you laid that out perfectly because had you been bloated, spending 10 grand or 20 grand a month on a lease, you wouldn't have had the extra to go from 4 to 30,000 a month.

[Michael Kaplan]:
We were in a dirty garage that we were subleasing from a defunct cable subcontractor. They left town, had a little shop—maybe 7,000 feet—and we said, “Hey, can we lease a third of it?” They ended up coming back in the market and saying, “Hey, you’re leasing a third and using all of it.” That's true—but we were super nimble, and we were underpaying. Fake it till you make it, man. So many people I've run into have these vanity shops and spend all this money on warehouses before they really need it. Keep it down and dirty. Gabe, you can speak to it better.

[Gabe Torres]:
Our shop is inside something called Dolly's Grooming. I tell everybody, when you're going to show up for your first day, go to Dolly's Grooming—don't go through the front door, because that's actually the groomers’ side. We lease out two of the old doggie daycare spaces that they don't use anymore. We have a parking lot back there, and we spend 500 bucks a month for it.

[Michael Kaplan]:
People who don't get it might say, “Holy shit, what a slob.” People who know and make real money will say, “Damn, that's thrifty—I love it.”

[Gabe Torres]:
Yeah, exactly—so nice. Okay, so one of the last questions before we go, because the time is wrapping up, is the same question we ask everybody: if you were to go back and do it again, what advice would you give yourself, knowing now—almost 20 years later—if you could talk to 2006 Michael Kaplan, what would you tell him before he starts to take on that carpet cleaning company?

[Michael Kaplan]:
Before buying the business or right after?

[Gabe Torres]:
Right after.

[Michael Kaplan]:
You know, one of the lessons I've learned is about the value of relationships. I'd say there are a couple of moments where I can identify that I put near-term rewards ahead of building relationship capital for the long term. I think I've corrected that behavior, and I'm super focused on investing in people now. Most of what I do is building relationships, and I didn't understand how impactful or important it was because the right relationship can change your life.

There are times where I've not made an investment, where in hindsight, even if it wasn't the right investment, it would have been the right investment in the relationship. When I started doing that, my life changed. The partners I have today, the relationships I have today, they're both extremely meaningful to me and pay the bills. But for making some stupid investments in the right people—maybe for the wrong reasons—I wouldn't have some of these relationships. I know that's maybe a little abstract, but invest in people. Really find ways to double down on relationships.

People running a business, especially a startup or a new acquisition, feel like that guy on Letterman spinning plates—you're the dishwasher, the cook, the guy mopping the floor, the marketer, the finance guy. It's super overwhelming, and you're working in the business. It can be hard to step outside that role and recognize, “I need to invest more in this person because they're doing things I want to be part of.” Cutting relationships short can be a real hindrance to growth, personal and professional.

[Gabe Torres]:
Nice, that's a great piece to end on—value relationships over the short-term gains.

[Michael Kaplan]:
Yeah, I always talk about it as relationship capital. There's human capital, the people you work with and that work for you, there's financial capital you buy stuff with, but relationship capital has value too—it can be exchanged and traded, and it can create huge opportunities for you.

[Gabe Torres]:
Yeah, I mean, we're both obviously in the mastermind, and even just thinking about some of the relationships there—I had a situation that was a 50,000 problem, and a relationship there found me a 500 solution because they'd run into that problem before. Not to pitch the mastermind too hard, but being in a group like that is how you build those relationships. So many solopreneurs out there—good on you for watching this podcast and trying to digest information, but being part of the group and being there, all of a sudden you've got a 50-person opportunity to pick your board of directors, and they're experienced people doing cool stuff. That's a goldmine. You talk about a 50,000-dollar problem—there are people who've made millions, going from 1 million to 5 million, or fill in the blank. When you look at the Jareds, the people in that group, how they've evolved over the years—it's huge.

[Michael Kaplan]:
Yeah, absolutely.

[Gabe Torres]:
Nice. Well, thank you so much for carving some time out to be with us, Kaplan. You have such a cool story that I think people barely got a glimpse of here—we'll have to do a part two or something.

[Michael Kaplan]:
Well, thank you. We'll see how it edits out, because I don't know if I said anything that was too coherent, but it's fun to see you again.

[Gabe Torres]:
Yeah, we will see all of you next week. It's Gabe Torres at the Huge Transformations Podcast, and I hope you guys go out and crush the rest of the week. See you later.

[Sid Graef]:
Hello, my friend. This is Sid. Thank you again so much for taking your time to listen to today's episode. I hope you got some value from it. And listen, anything that was covered—any of the resources, any of the books, any of the tools, anything like that—is in the show notes, so it's easy for you to find and check out.

I also want to let you know the mission for the Huge Convention and for this podcast is to help our blue-collar business owners like you and me to gain financial and time freedom through running a better business. We do that in four ways:

Number one is our free weekly newsletter—it's called the Huge Insider. I hope you subscribe. It is the most valuable newsletter for the home service industry, period, paid or otherwise, and this one's free.

Next is the Huge Foundations education platform. That is—we've got over 120 hours of industry-specific education and resources for you, and every month we do a topical webinar and we do question and answer with seven- and eight-figure business owners. It's available to you for a 1 trial for seven days.

Next, of course, is the Huge Convention—or The Huge Convention. If you haven't been, you've got to check it out. It's every August; this year it's in Nashville, Tennessee. That's August 20th through 22nd in 2025, and it is the largest and number-one-rated trade show and convention for home service business builders. We've got the biggest trade show so you can check out all the coolest tools and meet the vendors and check out the software to run your business. We've got education—world-class education and educators and speakers that will teach you how to run a better business. And it's the best networking opportunity you can have within the home service business.

Lastly, if you want to pour jet fuel into your business, check out the Huge Mastermind. Now, it's not for everyone—you've got to be at over 750,000 of revenue, and you're building toward a million, 5 million, 10 million in the next five years. It's a network, mentorship, and a mastermind of your peers. We help you understand and implement the Freedom Operating System. We go into more detail, but you can get all the information on all four of these programs and how they will help you advance your business quickly just by going to thehugeconvention.com and scrolling down—click on the Freedom Path. Or, of course, you can find the links here in the show notes.

I'm sorry, I feel like I'm getting a little bit wordy, but I just want to let you know about the resources available to help you accelerate and advance your beautiful small business. So keep on growing, keep on learning, keep advancing. And if you like the show, please go ahead—take 90 seconds and give us a review on iTunes, then subscribe and share it. Man, it would really mean the world to us. It would help other people as we continue our mission to help people just like you and me. So thanks again for listening. We'll see you on the next episode.

Comment (0)

No comments yet. Be the first to say something!

Copyright 2025 All rights reserved.

Podcast Powered By Podbean

Version: 20241125