Matt Pincus, Owner of Pincus Elevator, joins BuiltForward for a candid look inside a 35-person specialty contractor. We talk skilled labor, cash flow, technology, and a deceptively simple operating goal: how do you take a job that requires 200 labor hours today and get it done in 150 with the same people?
Matt Pincus is Owner of Pincus Elevator, a family-owned elevator contractor founded by his father in 1953.
In this episode, Matt takes us inside the day-to-day realities of running a specialty contracting business. His biggest constraint is skilled labor: elevator mechanics take years to develop, experienced people are difficult to hire, and simply adding headcount isn't an easy answer.
That makes productivity increasingly important. Matt describes the goal in concrete terms: if a job takes 200 labor hours today, how do you get it done in 150 with the same people, without sacrificing quality or safety?
We also discuss what happens when customers who once paid in 30–60 days start stretching toward 90–120, why Pincus brought in a fractional CFO, and how quickly that changed decisions around collections, forecasting, and hiring.
And we get into technology and AI: where Matt sees opportunities to improve the business, why contractors can know exactly where their inefficiencies are and still struggle to fix them, and what it would take for new technology to actually change how the work gets done.
Topics include:
The skilled labor constraint in the elevator industry
Why developing an elevator mechanic takes years
Productivity when you can't simply hire more people
The 200-hours-to-150-hours challenge
Cash flow and lengthening payment cycles
Bringing in a fractional CFO
Knowing your operational problems vs. actually fixing them
Technology adoption inside a specialty contractor
Where AI and automation could realistically help
Running a multi-generational family business
Jason Jacobs: [00:00:00] Welcome to BuiltForward, the podcast exploring where construction is heading over the next decade, and how AI and other emerging technologies will and won't transform the industry. I'm Jason Jacobs, a longtime startup founder, investor, and the host. Let's get into it
Today's guest is Matt Pincus, second-generation owner of Pincus Elevator Company, a seventy-three-year-old independent elevator business outside of Philadelphia. Matt bought the company from his father in nineteen eighty-five when it was basically a two-person shop. Today, it has about thirty-five employees, services more than eight hundred elevators, and his daughter, Emily, runs the day-to-day as the third generation of the family business.
Matt also happens to be my wife's uncle, so I've known him for years. But until I started exploring construction and the skilled trades, we never really talked about his business, and it's a fascinating one. [00:01:00] Elevator technicians take four years to train. Qualified labor is incredibly hard to find, and Matt sees that labor constraint as the biggest limitation on growth.
So he's becoming increasingly interested in a different question. Rather than just finding more people, how do you make the people you already have dramatically more productive? We talked about how Pincus Elevator actually runs today, where knowledge lives inside a seventy-three-year-old company, how AI is already helping technicians troubleshoot forty-five-year-old elevators, and why Matt thinks there's an opportunity to bring the same kind of outside expertise to operations that he's recently gotten from a fractional CFO.
We also get into private equity, which has been buying up independent elevator companies around him, and why somewhat counterintuitively, that's been very good for them.
Okay, Matt Pincus, welcome to the show
Matt Pincus: Thanks, Jason. Happy to be here
Jason Jacobs: Or I should say Uncle Matt, since, uh, technically you're my wife's uncle, so I guess that means you're my [00:02:00] uncle too. So family
Matt Pincus: guess
Jason Jacobs: Yeah. Well, I've known you a long time, and our professional worlds have never collided before. Um, uh, and, um, yeah, as I've delved, uh, you know, started to delve into thinking about the, the future of construction and, and really like the future of, um, the built world and field services, it's-- I mean, it's a little broader, right?
It's these kind of physical industries that involve, you know, that are heavily human-powered, right? Um, you know, I've been looking at from the digital side, like how might technology, um, you know, change how, uh, these industries function, and how might not it, right? Because just because, just because it can doesn't mean it should.
Um, uh, and, and so yeah. So I'm, I'm grateful for you making the time to come on the show and help me sort through it.
Matt Pincus: Happy to do it. I'm excited because it's a, it's a topic for us that, uh, [00:03:00] is, I would, I don't know if it's in its infancy or not, but we're using it a lot more. And, uh, I think it's going to revolutionize, hopefully revolutionize what we do
Jason Jacobs: Um, well, maybe a good place to start is, um, is just give an overview of what you do. What, what is Pincus Elevator?
Matt Pincus: Okay. So Pincus Elevator Company is a full service elevator company. We have basically four disciplines. We do maintenance, repairs, modernization, and some new construction work. We-- My father started the business in 1953. I bought the company business in 1985 when I was twenty-five years old, and now my daughter runs the business.
She's third generation in the business. So we're seventy-three years approximately in business, and, uh, we're based in, in West Chester, Pennsylvania. We serve the Philadelphia area and Eastern PA, uh, North Delaware, and, uh, South Jersey areas. [00:04:00] And, uh, we are about a thirty-five person, uh, firm and, uh, run a fleet of trucks and, uh, service over eight hundred elevators
Jason Jacobs: Amazing. And those 800 elevators, um, uh, w- w- what types of buildings do they typically live in?
Matt Pincus: So we're, we're base-- Our biggest market is the multifamily. We're very big in the, uh, apartment industry, and we have been for a long time. We, we provide, uh, twenty-four hours, three sixty-five service. Uh, we're very responsive. We're, we're... When you call our office, you get a live person that answers the phone. Uh, we're very-- Everybody, any owner, property manager can have my cell phone number or, you know, any of our management cell phone number, and have a lot of the tech cell phone numbers. So it, it's a very, uh, close relationship, and they're able to c- uh, contact us and get communication, and that, [00:05:00] that's key to what we do
Jason Jacobs: Uh, and, and to become, uh, an elevator technician, uh, what does the, what does the process look like? Um, you know, is it certification? Is it schooling? Are there degrees? Uh, do you train in-house?
Matt Pincus: So we, we, yes, we do an in-house training. So we use something called the Certified Elevator Technician Program. It's a nationally recognized program through our, our National Association of Elevator Contractors who sponsors it. It's a four-year program. Uh, it's an online, uh, on job site based and testing. And how you do-- With us, it starts, once you start working for us, within six months, you have to enroll in the program. We pay 100% of the cost for the, uh, program, and you have to keep going through, uh, these, what we, what they call modules. So it's every three to six months that you have to kinda test out of a module, and we run a lot of [00:06:00] classes too in-house, and, uh, all the testing is done on our time. And, uh, it's a great program. Uh, you know, getting a free education for us for four years is like, it's not like a college degree, but it's similar to it, and it, and you can take it anywhere you want. It, it's, it's usable in all fifty states. So it's a great program. But most people stay with us. They wanna get through the program.
And as you get through the program, as you base every module with us, you, you increase in pay. So if you start out at a certain rate, and every time you, you increase, you move up, and that, that's the incentive, is to keep moving up. And then when you finally get out, you know, you know, our, our elevator technicians and mechanics make, uh, you know, a a very nice wage, and we have a very good benefit package included with all that also.
Jason Jacobs: And as, as you climb in modules and climb in [00:07:00] pay, um, what are the things that you are doing at these, um, subsequent levels that, um, uh, that, that help the business?
Matt Pincus: So you, you start out with what we call, um, an entry-level helper, and that helper can come, and sometimes they really don't have much experience, but th- they typically have some aptitude as far as they know how to use tools or they're, they're handy with their hands or they're- they have some electrical experience, and we kinda test for that before we hire somebody. And then once they start increasing in, in, in their CET program, they're able to do certain small tasks. Maybe they can mount a hall... what we call a hall station. That's the push button that you see in the hall, the-- and we call it a hall station. So maybe they're able now to set that into the wall, and l- and they learn to do that after six months or a year. They're able to maybe go out and do a little bit of maintenance, like clean an elevator pit or, [00:08:00] uh, you know, do those type of tasks. And as they, as they-- Once they pass their second-year program, they're also have the ability to go out and maybe run some service calls or to take on more, what we call, quote, mechanic responsibilities, where, where they can, they can help run wire, or they learn how to bend pipe, or they're, uh, able to, to do those type of tasks.
So, so as they increase, their responsibilities increase and, and we're looking for that. And it gives them qual-- It also teaches them leadership qualities and things like that. It's very, very important for some of these guys, because a lot of the guys that work for us really weren't gonna go to college.
They were looking for a career, and here they, here they are making more money in, in four years than most of their college friends that w- you know, once they got out. So... And they have a, a, a, an opportunity to, to keep increasing that as they, as they learn and their skills get better. So it's an exciting thing for... [00:09:00] exciting thing that we're involved with the CET. We actually-- We love it. It's a great program, and it's how we're gonna build-- It's really one of the ways we're building our next workforce. It's how we build our workforce is through the CET. As everybody gets a certification now, we have new technicians and mechanics that we can put out on job sites, and we can expand our business based on that. 'Cause that's our biggest challenge is, is workforce
Jason Jacobs: Uh, workforce being, um, uh, w- lack of quality supply
Matt Pincus: Yeah. The, the, it, we're, and it's in, it's rampant in every construction field, and especially in the elevators. We're, we, we are lacking, uh, qualified elevator mechanics and technicians. We don't, they're not, they're not there. We didn't train for them in, in the past. We didn't, we didn't promote... Like when I went to high school, I went to voc- we had vocational school programs.
Today, a lot of those vocational schools are no longer around, and those programs don't exist, so that's a challenge [00:10:00] for a lot of us. Like I, I went there for industrial electric, and that was a great background to learn how to become an elevator mechanic, and that's what I did for a lot of years. I was an elevator mechanic before I bought the business and transitioned more to, to a business owner. But we don't have that, so that's what the CET kind of takes that place of that vocational program. We wish we had that vocational program during high school so we could, once they become 18, we could hire them and they would already have some of those skills. And we're working with certain schools. We, we work with a couple schools that we're trying to, uh, institute some pre, uh, elevator, uh, apprentice programs there.
So we're really working hard to make that happen, but it's, it's a very challenging, it's very hard to do
Jason Jacobs: Uh, do, um, do trade schools typically include, um, elevator repair as one of the, um, types of skilled labor that they teach?
Matt Pincus: No, it's not. You- it's, [00:11:00] it's, it's electrical, like plumbing, electrical, carpentry, masonry. You don't really see elevators, and that's why-- It's part of the reason why... And I wasn't really involved at the, the, the start of the CET program, but the CET program was started as, as an answer. The, the unions had, uh, a, a training program called NEIEP, and we're-- Our National Association of Elevator Contractors and there were s-some really, uh, forward-thinking members thought we had to have our own program for, for companies that weren't affiliated with the union, and we're not affiliated with the union.
So that's how this program came about, and it's become the standard program, one of the country's top, uh, training programs for elevator technicians. It's-- So it's been very exciting and we're, we're excited to be involved with it
Jason Jacobs: Uh-huh. And the, the decision to be an open shop, has it always been that way? Um, uh, was, um, what's the [00:12:00] rationale, uh, behind it? Have you wrestled with it along the way? And what are the pros and cons? And you don't have to answer all those, but, I mean, t-t-take the question wherever you'd like, I guess.
Matt Pincus: we haven't wrestled with it, but my father, when he started the business, it was just my father and basically one other person, and he was a small shop, and he didn't see the need for that. He was a very ... My father was a very independent person in, in his, in his business career, and he basically kept it small f- like that for, for all the years that he had it.
And when I worked with him, it was myself, my father, and one other person, and, and that's basically, you know, his formula. So the unions kinda left him alone, and he didn't feel like he wanted to be. He liked the independence of, of not being part of the union. So when I took over, I ... That philosophy stuck with me, and I, I didn't think there was a need for it because when I took over, for the first nine years it was basically me and one or two other guys. It wasn't till about nine years in after I got [00:13:00] married that, um, I started to build the business. So I went from, you know, couple guys to 6, then 12, and then, you know, started to expand. And then I got involved in an association called Associated Builders and Contractors, and, and they're a merit shop organization, and they believe that, that, uh, all contracts and construction work should be awarded based on a level playing field, that it shouldn't be based on an affiliation with, with any organization, a union, any organization, that everybody should have an opportunity to work and run their business as they see fit. And, and I, and I believe in that philosophy, and I've been a long-term member of Associated Builders and Contractors, which goes under the acronym ABC, and it's a nationwide organization, and, uh, and we ... That's our philosophy. We think we've done a great job with our employees. We offer incredible benefits, you know, equal to just [00:14:00] about any company g- out there, from the largest elevator company to the smallest.
I think that benefit-wise and pay-wise, we're up at the top level anywhere in the country. So I, I work s- We're always proud of that, and we're proud that we have the CET training program, which is ... Which really offers these guys an opportunity that they don't normally get at other, other companies.
Jason Jacobs: Uh-huh. And, and that, that opportunity is the opportunity to get developed and raise in the ranks and take on more responsibility and, and, and earn more income?
Matt Pincus: Yeah. Well, I think that we're building the, the, the leaders of the-- for the future with us. Like, when you become an elevator mechanic and you're running your own job, it, it, it's a lot of responsibility, right? You, you, you-- It's more than just knowing how to wire, you know, an elevator controller or how to, uh, you know, install a hall station or, [00:15:00] or, or do a service call.
It's, it's about, you know, filling out the paperwork. It's about communicating with the site superintendent or the property manager or, or with the maintenance personnel. It's, it's about writing concise, uh, information back to our office that if something needs to be upgraded 'cause it, it's a-- it's forty-five years old and, and, and getting that information and the part numbers and, and what entails, you, you know, on the labor side of it or is it hard to get into the building?
Is it gonna be hard to deliver the equipment? Like, you're learning all those responsibilities and you're sort of even sort of a salesperson as you achieve these levels and I think it's exciting for these guys. I know some of them m-maybe never thought they would ever achieve any of that or maybe they thought they would just be work-- I don't us- like to use the word, but I will, working stiffs for the rest of their lives and, you know, in dead-end jobs.
But here they have an opportunity to expand and then we're very good about hiring from within. My construction manager and my [00:16:00] service manager both were in the field for a lot of years and we moved them up into those positions when we saw that they were-- they had the qualities to do that
Jason Jacobs: Uh, when it comes to the internal systems, the, you know, from the finance side to the, you know, the actual workflows to, to run the business from the, you know, from the bids through project delivery and payment and whatever the steps are. I'm still learning all the steps, but, um, uh, are you, are you guys largely a p- a pen and paper shop?
Do you, you know, do, do, do you have, um, uh, any, you know, kind of digital systems in place? What, what does that infrastructure look like today?
Matt Pincus: So we do. We don't, we're not-- It's, we don't produce a lot of paper, so we, we have systems that, or, um, I guess that's s- One of our biggest systems that is kind of an Excel-based system, it's called LiftKeeper, and it tracks everything. So every single elevator that we service is on there. Every single [00:17:00] proposal that we do ends up on LiftKeeper, and every single testing, uh, uh, there's testing required in the three states that we work, elevator testing, year, sometimes yearly, three years and every five years, and that's on there. And, and these are basically dropdown boxes. It's a great program, and that they've been a great company to work with because when we're, we, when we need to add something or we come up with an idea and say, "Hey, are you able to add this dropdown box or to add this to this page?" They're very willing to work with us to do it, and, and they, and they typically are able to do it. So I can go on LiftKeeper, and if, and if you, Jason, ask me, "Oh, can you tell me about 123 Main Street and what's going on there?" I can go in there and look at the history of it, almost from the day that we started working there, and I can tell you what happened last week, you know, when the next maintenance visit is gonna happen.
All those things happen. It's a really great program. And we don't have to produce paper. We don't have to print anything out. [00:18:00] You know, when, when I call the office and I don't have access to it mobile, you know, remotely, it's, it takes m- takes seconds almost for somebody to look up that account and give me the information on it, and I can call the owner back and say, "Yeah, it's a forty-five-year-old elevator.
You need to upgrade it. Here's the reasons why, because here's what my m- my technician found out." So it's, it's, we love that program. And then for accounting and all that, we use QuickBooks, which is pretty much, a lot of small businesses use QuickBooks, and we use QuickBooks Online. It's a good program. I like it.
I mean, there's are some things I wish that you could get some different reports. And then we have some other Excel, uh, based spreadsheets that we use for, uh, costing, for, for job costing and, um- Estimating, we use a program that we kinda developed on our own that, that I had a, a template from and I expanded on and we use that. And [00:19:00] then for our, um, you know, budgets and stuff, we have other Excel programs. There's so ma- it's not all integrated. Like with LiftKeeper, I think you can integrate all these things, but we don't use everything that LiftKeeper offers because we had some of our own, uh, stuff that we really like that's really elevator for us specific to what we do. We wish we had it at There are some totally integrated systems out there, maybe like FieldBoss or something, but I don't, we don't, we haven't investigated that. It's a sh- to go to a new program from where we are now would be very, very costly and a tr- tremendous amount of da- data transfer. I, I don't really even wanna think about that
Jason Jacobs: Yeah. No, I, I understand. Um, uh, it, it seems like-- You s- you still there, by the way? Yeah.
Matt Pincus: Yeah
Jason Jacobs: Okay. Um, yeah, so it, it, it seems like, um, I mean, as the [00:20:00] technology continues to evolve, um, that increasingly, uh, new kinds of experiences are possible. But in order-- like you said, in order to get from the-- not just the legacy system and data transfer, but also, like, all the workflows, right?
And all the kind of patching and duct tape and paperclips to kind of, you know, live within the existing workflow. It's li- it's like change would be chaos in a world where, you know, the ongoing treadmill of work, like I, I would imagine you guys can't really afford to... You know, there's never a good time to, to pump the brakes or, um, uh, you know, or, uh, um, or, you know, sto-stop the treadmill to, to do that kind of transition.
And then the unknown is scary.
Matt Pincus: Right. One of the things, like, we have a, a library of wiring diagrams that are-- uh, that we've uploaded into our cloud system, right? And that's another area that's not integrated with LiftKeeper. It would be great if I could go on LiftKeeper, right, and [00:21:00] I could see all my wiring.
Like, if I'm on a job and a, and a, and there's no wiring diagram physically at that site, our tech can go on his mobile device and pull that wiring diagram from the cloud, and then, um, look at it. And there's also, you know, sheets on there that... or data sheets that are from certain manufacturers or adjustment sheets. And it's kind of, like, it's kind of, um, not really, uh, feasible sometimes for us to go from LiftKeeper, now you gotta get out of LiftKeeper, log into the cloud system, find that data, pull it out. Like, it would be good if it's all in one area. And, like, that's a challenge. It's something that we think about, but how do-- but the, the problem is how do we make that transition?
Is there something available? I'm very... And we've had this con- we had this conversation the other day. I'm very interested in trying to... I use AI almost every day in my business career, right? I use it in some [00:22:00] way, form to help me with, if I have to analyze, uh, a document or a bid, or I have to analyze- Write a letter or an email, and I'm not sure, uh, of, of what I wanna say, I can have that help me do all that.
And I'm using it right now also to develop these training modules. I just finished a PowerPoint training module which AI helped me about inputs and outputs for elevator controllers, how to test them. So we would have that in our cloud system, and the guys can look at it if they get stuck, and they're not sure exactly how to test a certain component. They can pull that up and look at it. AI was instrumental in helping me. What would normally would take me a week or more, I got done in a day because AI helps me, you know, prepare the data for certain slides. I ask it to do that. "Here's the data. Make it concise for me. Do it over ten slides, and I need a picture of how to test everything."
And it provided that picture and that, and that [00:23:00] diagram. Instead of me having to go now find that diagram, you know, take a picture of it, scan it, upload it. Like, it, it saved me a tremendous amount of time, and it's... I-- But I just need to figure out how to integrate that to what we're doing. And I also need to figure out how to integrate that when, when we're on a service call, and it's an, it's... I have a lot of young guys work for me, so maybe it's a fifty-year-old elevator, right? These guys have never seen it, but they sh-- they need to be able to-- they should be able to go to AI, type in what kind of elevator it is. Ask the question, "Okay, it's blowing this fuse. Tell me why." And AI can tell you. You can do that now.
It's available. There are some general stuff out there on, on AI that will help you with that stuff. But that, that's to us where, where we need to go. I think that that's where the future is, not just for our industry, but anybody in the service industry. How do we figure out [00:24:00] how to make that happen? It ex-- It-- But it's challenging, right? To make sure the data is correct because just because you put it on AI doesn't mean that the data you're getting is, is, is the correct data, right? You have to make sure that it's right 'cause it, it picks up from all these different areas. So that's our challenge right now, and I would love to be able to kinda correlate that into one place, make it really simple, and our guys can use that data.
How do I do that? I'm not sure yet. Nobody's, nobody's doing it right now.
Jason Jacobs: Uh, you mentioned, um, keeping a system. So is, is, is LiftKeeper the, um, kind of the central repository to keep track of for each client, um, when it was last serviced, what equipment they have, um, what issues they had, what the resolutions were, what work you've done prior? All, all that stuff lives in LiftKeeper, is that correct?
Matt Pincus: Yes, that's correct. Yes.
Jason Jacobs: Who, who enters that data?
Matt Pincus: So it-- [00:25:00] I th- it's entered a couple of different ways. So when, when, when a guy's on a service call, he goes into there and he, and he writes out the time, the service ticket, because he-- before we used to write paper tickets and had to get them signed by the property manager, maintenance personnel on site. So right now he fills out that ticket on his mobile device, and the minute he's done, we have an email address associated with that to the property manager or maintenance personnel, whoever the company designates. And then when he's done with that ticketing and he says, "I had to, uh, adjust the, the first floor door interlock, uh, and, uh, checked everything else, returned elevator to service." He puts down any parts that were used, you know, this. Then he, he signs off on it, and then it-- the minute he closes it out, it automatically gets emailed to our service department and also to whoever the, the building personnel's designated email address is.
So they get... They [00:26:00] automatically get a copy of it. And so the-- And then that, that's one way. The, another way is that if my sales guy is doing a proposal, so every time he finishes a proposal, it gets uploaded into Liftkeeper. So now that proposal is related to one two three Main Street, can look at it and say, "Okay, we sent you a proposal a week ago to replace this, this worn-out piece of equipment. Uh, we need you to sign off on it before we can order the part." And it's right there. Anybody can look at it and see it. So, so it's different people doing different things, right? And, and, and we use it for all different departments. So if, if I'm on an, a modernization project, which is construction department, they're putting in different information into Liftkeeper. They might be updating it where, where the job is. We're three weeks into the job. We have another two weeks left. Uh, we had to do a change order because, uh, when we opened up the wall, we found that there [00:27:00] was, uh, this issue, and it wasn't included in the original scope. You know, things like that get uploaded up into there, and then when the customer calls, anybody can look at it and say, "Yeah, we sent you the change order for this.
Here's the reason why, why it's gonna cost you an extra five hundred dollars to do that." You know, so those are the things that it's used for, and it's a great system. It's-- It, it does have a lot of dropdown boxes, which is kinda, you know, you gotta sometimes click on a lot of boxes to get to where you need to go. But, like, that's who enters the data. It's not j- It's j- It's, it's... And everybody has a responsibility to make sure the data is correct and updated properly.
Jason Jacobs: Um, if, if you think about the overall business, do you, uh, you know, how often do you refresh your business objectives and, and, and what are they? For, for example, um, you know, do you set out at the, at the beginning of the year and say, "Our goals this year are we wanna grow [00:28:00] X percent, and we want to, you know, improve margins by Y percent," or, or something like that?
Or how, how do you approach planning in, in this kind of business?
Matt Pincus: understand? So just, uh, me personally, so I was never the, the, the greatest planner. I was kind of a shoot from the hip kinda guy, just kinda just went out and did my thing and, um... But Emily, who's running the business now day-to-day, is, is more of a planner, and she has set goals. I mean, she talks to her people. She sets a goal. We have a goal today of what, what, what, what she wants to increase revenues, and we do. We've always, for the last... You know, we've always worried about margins.
Like, we've always set a margin for every s- discipline that we do. So we have our four disciplines, whether it's the maintenance, repairs, the modernization, and new construction, and each one kinda has a different margin. And so we're, we're looking to, to make sure that on every single [00:29:00] job that we do, that we maintain those margins because if we don't, the job's not gonna become-- not gonna be profitable enough, and we don't wanna...
We can't lose money. We need to make money, so we're very conscious of that. And we sit-- Every week, we have a, we have a physical meeting. Like, with the construction department, they have a physical meeting to go over those goals, right? They meet every week to, to go over every job that's, that's going on in construction or modernization, and they go over the hours.
If the job was bid at two hundred hours, and they're fifty percent done, but now they're at a hundred and ten hours when they should be at a hundred, they, they talk about, "Okay, how are we gonna make up that ten hours? We have to bring this job in at two hundred hours. How are we gonna-- We have fifty percent more left, but only have ninety, ninety percent of the hours left.
How do we get that other ten percent?" They talk about those things because that's how we maintain the margin. We've always done that. It's very, very important for us to maintain the margins so that we're able [00:30:00] to, uh, make a profit because you know this because you've been investigating construction industry.
The margins are tight in the cons- in, in this type of industry. It's not that, that we're, we're, we're seeing these tremendous margins. They, they sometimes earn a f- in a couple of percentage points. You know, when a job is all said and done, after you pay your vendors and your labor and benefits and, you know, truck expenses, it, it, it's tough.
It's not easy to always, uh, you know, pull out double or double-digit margins. It doesn't really happen, or pro- or, or net profit. So it's very, very tough and, and it's unfortunate. We wish it w- they w- things were better that way, but that's just how th- this industry is, is, is how things are going right now.
And so we're very conscious of that. And we're always looking at those numbers
Jason Jacobs: Uh, in projects where you've missed historically, you know, whether it's been tighter margins or [00:31:00] even a loss, um, uh, w-w-what do the root causes tend to be? And, and, and do you retroactively go and, and, and try to identify them?
Matt Pincus: What are the root causes Yeah. So we, we know what some-sometimes it's vendor-related, which is unfortunate. We just had a job recently that we were, uh, the first company in the United States to do this new product they had that fits kind of a smaller elevator shaft size. And some of the equipment was coming from Italy and, uh, uh, I would say, I don't know, it was about thirty or forty percent of the equipment was coming from Italy, and then, uh, the other was all manufactured here, and it's a package put together for what we call new construction. It was going in an apartment building in Philadelphia. And the equipment was a couple months late getting here from Italy for whatever reason. And then when we installed it, there was a communication problem between the drive mechanism, [00:32:00] the drive, and the controller. So they, they finally figured out that it wasn't our problem, it was their problem.
They sent a guy out there, I think he was here for at least five days trying to get it all figured out, and finally got it figured out. So that job was way, way over for us in time. We, we got j-- the job done on time for the building owner. Like, we didn't-- we weren't past our date, but we had planned on being done, you know, a little earlier on that project, and we lost our shirt on it.
And it's been-- it's was very tough. But once we got all the bugs worked out, the elevator's been running very solidly. It, it really hasn't shut down at all, and I think it's a decent product. It's-
Jason Jacobs: And it-- is the lesson there so that it-- the next time that came up is the lesson to avoid that combination to-- for the communication problem or to factor in, uh, extra time into the bi- in, you know, in, into the estimate from a labor standpoint? Like, what's the key [00:33:00] takeaway to improve going forward?
Matt Pincus: I think the, the, the issue is that you just meant we can't, we can't put more labor on that. We're already... Every job that we bid is so tight as it is now. There's competition. We weren't low bidder on that job. We were given the job because the owner didn't wanna use one of the large major elevator companies.
He had experience with them in the past, and it was very, very bad. He was willing to pay us a few extra dollars more. I think the, the, the w- only way to achieve this is to have an understanding between us and the manufacturer that if we're gonna be the first kinda, quote, "guinea pig" on this, right? That, we already have the, that we al- already know that when we get to certain points, that there's gonna be one of their people on site, and we didn't do that.
I think that we were, we were confident that we'd bought equipment from them before, that this would be fine, wouldn't be any issues. And I think that, that we have to have a better understanding that if there are issues, you [00:34:00] know, who's gonna be com-- who's gonna compensate who for what, or who's gonna, you know, you know, take that hit? And, and what happens if we took the hit
Jason Jacobs: It-- A-and so that, uh, that kind of tuned antenna so that the next time this comes up, you say, "Oh, if we wanna have this combination this early in the process, like, we need to make sure that the vendor provides someone on site to sort through communications issues or whatever else unknown comes up." That's a, that's a piece of judgment that gets retained in your brain, and then the next time it comes up, you know, right?
But, um, but one challenge I've been thinking about is that that's a hu-hu-human judgment. That's not, you know, that's a-- that's you or whoever, you know, the, the service manager was on site, right? It's a-- That's in a human's brain. Does that get captured in the institutional memory? Like, does that become a Pincus elevator judgment?
So if whoever was on site for that project or involved in it leaves the firm or gets sick or something like that, that [00:35:00] the firm still retains that judgment?
Matt Pincus: sort of Yes. We, we, we, we, we look at, we, we look at every job, you know, individually, right? It's not that we just blanketly say, "Okay, let's just bid this, this, and this." We're-- Our goal is to, to look at the job and the complexity of it. And so if, if the same type of unit came up, and we are looking at a couple right now that are, that are these similar units. And sometimes we, we'll walk away from, um, from it depending on who the customer is. But if it's one of our existing customers, we don't wanna give it away, we wanna do the work for them, right? So we're, we actively look into this and, and we make notes, and we're, we're, we're talking to the vendor about it to make sure there's an understanding. Now, they're, they've had a-- they've corrected a lot of these problems because now we weren't the only ones. There's been many, many of these units installed now, so we're feeling a lot more confident about the ability to [00:36:00] provide, know, the equipment without it, it being more troub- without-- with it being trouble-free.
And I think that that would, that would be... We would be confident that we wouldn't have these issues again. But let me just say, the, the thing is that in our industry, there's new technology coming out all the time. Our vendors are always upgrading their, you know, their controls or, and new software that they're adding. So we're always seeing this, right? And, and it's a challenge. And I think every company, we're not the only company that deals with it, and every elevator company deals with it all over the country. And, and it, and it's, you know, you just have to deal with it. But it's, it's how the ven- if you have a good vendor and how they react to it is the most important thing to get things done quick and timely. Like, we-- If you have those relationships, and I think we have those. I think in this case with this other vendor, it, it was, it was just poor [00:37:00] communication, and I think they could have done a lot better in communicating certain things to us and things that they said didn't really pan out. But, you know, but we got the job done, and it works really, really well.
It's a good product
Jason Jacobs: Um, Matt, I wanna come back to something you said before about how labor is the biggest challenge that you face. Um, how do you think about adding labor versus making the existing labor more efficient, and how do you balance those two?
Matt Pincus: So it's a good question. Great que- great question The efficiency is-- has to be the number one thing that we can do. We need to get more efficient. How do we do that? That's again challenging b-because, uh, every time that you add a, a, a new technician, you've added another big cost where you have to get a truck, you have [00:38:00] to get all the tools, you have their labor, their benefits, and then you have to now go out and find that work. It's-- And you have to get that work at a certain cost because you have to cover their cost, plus you have to make the company, uh, profit. You have to be profitable. So that, I think that's the big, the-- That's one of the biggest challenges is, is like, do we need to hire more mechanics or technicians, or can we make the existing labor force that we have a lot more efficient? And I think we can do with the latter. We can make them more efficient. How do we do that? That's, that's the, that's the key question, and I think that there is technology available. I'm investigating it now. I think it's out there. Like, I'll just give you an example of, of a situation. I don't normally get involved in service calls, but my service manager's away on vacation this week.
So [00:39:00] they had an old forty-five-year-old elevator. I've used to work on those. They're very familiar with, it was an old Otis elevator. And the technician called me. And again, it's been twenty-five, maybe thirty years since the last time I was actually working on one of those, and I couldn't remember. He was telling me what the problem was, and I understood the problem, and I'm like, "I just..."
I tell-- I kept saying his name. It's Johnny. I'm like, "Can't remember, Johnny. Let me call you back." I just-- He sent me pictures of the wiring diagrams. I'm looking through them, and all of a sudden I, I say-- I go into my phone and I AI the exact problem on, on ChatGPT, right? And next thing I know, it's coming up. It, it lists everything of what this issue is, and then it just... So I'm like, "Yeah, that's it exactly. I, I got it." And so next thing you know, I'm, I'm looking at my phone while I'm talking to him and saying, "Okay, I want you to put-- I want you to check this rectifier. I want you to also, if the rectifier is good, I want you to check this." And then, then he found out the rectifier was [00:40:00] bad. He's like, "Yeah, the rectifier is blowing the fuse." I said, "Okay, call the office and get one ordered." They put it in and then boom, and it's working now. I completely had forgotten about that because it was been so long. I would... So what happens is that that's efficiency.
So instead of him being there all day on his own trying to figure it out, within fifteen, maybe twenty minutes, I had him-- I had the problem figured out. We knew what we needed to order. We ordered the part. Took a couple days. It's hard to find 'cause it's an old part. And next thing you know, he went back- 20 minutes later, he was done installing it, elevator up and running. I think that's where we need to figure out, can we harness that to make us more efficient? Are there techniques available that can help us m-be more efficient when we're doing a new ins- new construction job, or if we're doing a modernization, or when we're doing maintenance? Is there ways that we can use... Can I, can I put a [00:41:00] sensor? And there's a company, we talked about this the other day. Uh, are there sensors-- There's a company that, that had s- that put out something that was sensors that tell you, w- that tries to predict through AI, like, when an elevator's going to shut down, when, when it's going to need maintenance. Can we use that technology today in a way that really, really works? So instead of going to visit it every month, we only have to visit it every three months or every six months because that's all it requires because it has very low usage. And with, again, we're gonna save the customer money. We're gonna save our labor.
Instead of going out every month, we only now need to send twice a year. That, that's a huge savings. We can do more with the, with less, or more, or the same technicians that we have. And I think that, that's where it's a, there's a possibility, 'cause there's a shortage. We don't-- The shortage isn't going away for elevator mechanics tomorrow. It's gonna take m- maybe decades for us to get caught up at, at the rate that we're going [00:42:00] and the rate that people wanna come into the industry. It's, it's not that we have a flood of people coming into the industry that wanna be elevator mechanics. We need to now come up with something, you know, now. How do we address that? Because then it takes four... And think about it, it takes four years to become an elevator mechanic. Uh, uh, so the timeframe, it's not that they come in and, and within a week they're, they're, they're, they're doing these service calls. No. So can technology help us? Yes. How do we harness it? We gotta figure that out.
Jason Jacobs: Uh, so I-I-I'm gonna list two scenarios and I'm trying to understand which one better describes where, where you f-feel like, um, Pincus Elevator Company is. Um, one is, um, gosh, I have a, I have a top ten list or a top 25 list of like key areas that I know are inefficient that are like ripe to be improved and, um, uh, and I'm not sure the best way to improve them, but like, uh, [00:43:00] but I know which areas are like the, the most fertile ground, right?
And the other is, no, we have our way of doing things and I'd love to work more efficiently, but like, I wish someone would just come in and help me identify where are the areas where we could benefit the most and then figure out how to tackle it after that. Um, where do you feel like you are on that curve?
Matt Pincus: most effective Well, I think we're, we're somewhat-- we're, we're on the low end of that curve. Because I think we understand, we understand s- a lot of the issues. W-we-- I could probably sit down and have Emily sit down with anybody and go over the issues, and we know what they are. But the, the, the thing is, we're not doing anything about them sometimes, and I think that's the challenge. Like, Like, our guys are very skilled and, and they're hard workers and, and they-- they're just incredibly rel-reliable. But we, we need to build their skill base better. We need to get them to get-- Instead of spending an, an hour and a half on a service call, we need them to spend that f- be there forty-five minutes [00:44:00] and get out. How do we do that? We know that that's one of the issues, that they're there longer than they should be, and we need to figure out, like, how, how to make that happen, and that's also good for the customer. The quicker the elevator's up and running, the better they're able to serve their tenants or their, or their office people or their medical facility. Like, those are key aspects, right? So we know what the list is. I can go over the list and give you five, six, ten things, but our challenge is that how do we fix it, and do we have the right people that are managing those things? Are they, are they able to fix it? I'm working on it, like I told you earlier, you know, doing this, these training modules.
I think it's an idea. My staff likes it. They like to have that information available, so they can pull it up, or their techs can pull it up and look at that stuff and, and, and use that to help them. But is, is that the most efficient way? I, I'm not sure. You know, [00:45:00] it's-- We're testing it now. I don't know if it's the most efficient because it, you know, th-these things take time to read, and you have to go through them, and you have to, to, to learn them. So we, we just need to figure it out. I don't know what the answer is for us yet, but we're working on ideas.
Jason Jacobs: Well, um, another thing I've been wrestling with is, um, you know, uh, if you-- I mean, a knock on people like me coming in from Silicon Valley-type world is, gosh, like the software people, they build stuff and it looks, you know, it has a fancy demo and it, you know, and it looks awesome, but then when I use it, I can't trust it.
I need to rebuild everything in Excel anyways, and it's clear that whoever built this doesn't understand our workflows, right? Um, like, have they ever spent a day in our industry, right? Like have, have they ever been in a shop? Have they ever been on a call? Have they ever, you know, fixed an elevator? Have they, have they done any of the things?[00:46:00]
Like, no. So why would I trust them, right? Um, so like I get that, right? But at the same time, um, you know, if you have been doing things the same way a long time and the world is evolving so quickly around you, you know, outside of those walls, right? Maybe some fresh ideas could actually help, you know, uh, innovate in ways that could, you know, be more impactful than just tuning the way things are.
But how-- but in order for those ideas to be impactful, they can't just be like bolt-ons, right? It actually needs to evolve like the core machine, right? And so, like, how do, how do you, how do you think about that like, um, that tension between like the, you know, the, the long, the well-trodden path of how things have been done with, um, you know, with fresh ideas from, from the outside?
Is there a place for those or, or are they, are they just a distraction and the outsiders should stay outside and, and, uh, go somewhere else?
Matt Pincus: mean, is there a place for those, or, or are they just a distraction? Well, I don't think that we sh- they should go someplace else. I [00:47:00] think we should... everybody should be looking at that, at, at what, what they're offering, because maybe, maybe, not 100% of it is right, but maybe there is a, a, a, some percent of it that, that's usable.
And if, and if you can cobble it together from five or seven, 10 different sources. But I will say this, that the tried and true, the old method of the way we- we've done things, there's nothing wrong. If, if I, if I just stuck with that, if I decided that I didn't wanna, you know, embrace any of this technology, we would still be in business.
We would still do well. We would still be able to make, make a go. Would we be as profitable? Probably not. Would, would we have to have more staff to get it done? Probably. And those things, you know, are, are not what the future is because it's, again, like I've said before, we're, we're have a shortage in our industry, and it's not just the technicians, it's also office staff, it's also [00:48:00] engineers, it's also salespeople, it's also project managers.
They're so hard to find. You know, service managers. So, so the... You know, you stay with the tried and true, it's fine, but what we need to do is that we have ideas. I have all these ideas. I'm coming up with training modules. We have LiftKeeper, we have QuickBooks. We need to, we need to integrate all these things so that it's, it's a quick and seamless on a mobile device when a guy's out on a, on a service call, or he's on a new construction job, and he's gotta install something that he's never installed before, that he can quickly, within seconds, even not minutes, within seconds, be able to type in what he's looking for, have it come up, and there be concise, uh, picture or, you know, paragraph telling him, "This is how you do it," or, "This is who you call," or, "This is how you approach this." We need that, that availability. We need to [00:49:00] have sort of taking the training to the job site, because not everybody can do, not everybody knows everything, right? It's impossible to be, to be-- to know how to do every single task there is on an elevator. It's a... Nobody can do it. Not even I can do it. Nobody can do it.
So you have to have this ability to get that. And we ha- I think it's available today, but how do we... Again, like I said, how do we harness it? I wanna figure out how to do that, and I think we're going to eventually figure that out. But again, there's nothing wrong with the tried and true. We do it a lot. Guys go on a job site now, they have these paper wiring diagrams, and they're, they're sitting there poring over the diagrams. They're not on an electronic device. That's the old tried and true method, and it works. Nothing wrong with it. If that's what you like, that's fine
Jason Jacobs: When it, when it comes to growth, um, something I've been thinking about is capacity planning and, and that cuts two ways, right? It [00:50:00] comes to, can we take on this new project and deliver it, right? And it also comes to, can we make this new hire and commit to paying the salary, you know, without, uh, you know, without running into, to cash issues?
Um, for each of those, um, how do you, uh, go about assessing, um, uh, when it's time and, um, uh, and not cutting into bone and res- and with- and, um, and preventing growth without, you know, without going the other way and getting over your skis?
Matt Pincus: It, so there's, there's... For us, we, we have a good understanding of where tho- where that's gonna happen. So because it's the certified elevator technician program, the CET program, we know that certain guys are moving up through that CET program. And then once they reach a certain, once they reach the four years and do the final test, they become an elevator mechanic, right? And we know at that point that we wanna p- we wanna put them out on their own jobs. At that point, [00:51:00] they get to run their own jobs, so we get them a helper. So we know, we kn- we know through the pipeline what's coming up, so we know that we're gonna go out and find that sales for that.
We just had a guy that just moved up, and we go out and find that sales, and, and, and we, we move s- It's kind of a s- not, not... It's, it's very sustained growth. It's not that we're, we're, we're, we're jumping up in, in, in double digits, but we're, it's a very organic kind of growth, right? And we know because of that CET program, that's how we wanna do it. So, So, so, that's how we pick up new entry-level people. So once this guy needs a helper, we're either going to give him an experienced helper, and then our most experienced guy will get the brand-new helper, and that new helper within six months will start the CET. And then hopefully in four or five years, he will now be finished his CET, and we will get him out on his own project. So if we have, say we have, I'll just use any number. Say we have five teams going on right now on [00:52:00] construction. Every time we, we test somebody out of CET, we wanna go to six teams. So n- now we need to find that work, and if that work is, we'll say $200,000 a year to, to sustain that person, we'll go out and find that work. And, and that, that's how we do it. It's a, it's, it's a very organic growth and, and it's been working very well for us over the last few years, and I think we're doing a better job of it now than we ever have. It's just, it's just being mindful of that.
Jason Jacobs: So are the, uh, do the ra- you-- So it sounds like you have ratios of, you know, we know that for every, you know, um, ex be- you know, with like one senior and, you know, and, and, and two middle people and then, you know, three, three juniors, right? Then we can deliver, you know, X amount of business, right? And so you just have kind of ratios in your head and you kind of manage to those ratios.
Um, so one, is that right? And two, um, how consistent and predictable are those, are those ratios? Like [00:53:00] do they ever miss depending on the type of work or factors that, you know, that, um, you know, that you couldn't have known going in? A b- like do, you know, d- are the... In other words, um, is the scope predictable, uh, when you, when you look at a project in terms of knowing what resources you'll need?
Matt Pincus: So it is predictable because we, we have a certain, uh, area that we know we're good at, and we stay away from the areas that we, we- that we're not good at, right? So we're not gonna take on a certain, a certain type of project if it doesn't fit into our, our, our s- or the scope of what, of what we're good at. We know that we're good at the certain type of modernization projects where, where especially on these small hydraulic elevator units that are, that are 30, 40, 50 years old. We're very efficient, very good at those, and we can do them at a very, uh, competitive pricing, and we can get them done very, very, very quickly. So we know that's a really important wheelhouse for us, and we have some guys that are really good at that. So we keep those guys [00:54:00] on those type of jobs. They get them done fast and because typically those are elevators that are a single elevator in one building, so we know that that's a, a, a, a wheelhouse that we're very good at, and they need that elevator up and running as quick as possible.
Once we take it out of service, it might be out for four to six weeks, depending on how tall the building is, and there's no elevator service, so we need to get it up and running and as quickly as possible. So we know that we're very good at that. We know we're, we're good at certain, uh, I'll call, quote unquote, high-rise type modernizations dep- you know, in certain type of apartment buildings.
But there are certain other buildings that we wouldn't take, you know, that we-- that don't fit our wheelhouse, and we do the same thing for new construction, and we do the same thing for maintenance. Like, you very rarely see me take an old freight elevator under maintenance because that's not what we're good at, because w- we're just, we're not gonna be able to provide the service that that customer needs to keep an old freight elevator working.
Now, if he wants to modernize it, it's a different story. So we stay away from certain [00:55:00] things. So we know what, we know what we're good at and, and where, where we should be and what we should stay away from, and that, that dictates what we do and what we go after. And so I think, and I hope that answers the question.
Jason Jacobs: It, it does. Um, when, uh, when you think about resourcing, um, I mean, it sounds like you use some outside software vendors. Um, you know, anything else you use, uh, outside vendors for? Um, and, um, and I'm asking, for example, um, you know, is marketing an outsourced function or do you do it in-house? Is finance an outsourced function or do you do it in-house?
And, and how do you think about vendor versus fractional resources versus, you know, v- versus hire versus, you know, versus owner doing everything?
Matt Pincus: So I have lots of thoughts on that because when, when I was running the business, I pretty much did everything. I, I did the, the proposals, I did the sales, I did the project management, I did the ordering. So right now we have staff [00:56:00] that does all that. I'm really nobody... You know, everybody has a p- particular role, and we like to keep a lot of that stuff in-house.
But we're also learning that not everything needs to be in-house. We're not maybe large enough to have a full-time this or that person, and I'll give you example. Uh, we just started working with a fractional, uh, CFO. Like, we're not really large enough to, to have to pay that fee, to have a, a, a enough work for that person to be busy, you know, eight hours a day, five days a week. So we went out and we just started working with them. That, that's a, a resource that we got through our accounting firm, and it's something that they offer. And our f- first two initial meetings with the guy have been fantastic. Stuff that we hadn't thought about and, uh, and he's got us... Again, there were-- I think he sent us four Excel programs that he uses.
He, he has a history, a long history in the construction industry. This guy's a 45, [00:57:00] 50-year veteran in the construction industry and service-related industry, so he understands what we're doing. And we j- he just sent us that, and it's just data entry basically to get, you know, our, uh, you know, to get this, these cost analysis that he wants us to do, and projections and cash flow projections and all that stuff that we really weren't doing. And, and, and, and I think it's gonna be, for us, it's gonna be an incredible, uh, incredible deal for us and helpful to us. Because on the receivable side for us, he's predicting that he thinks that we're gonna have our, improve our cash flow by $500,000 to $800,000 a month instead of having a, a receivable out there. He, he predicts that we'll be able to bring in that kind of money instead of having more th- these over 90. We're gonna pretty mu- I wouldn't say eliminate over 90s, but we're going to, to really get to the heart of the things because we're gonna be watching it now [00:58:00] every single... Al- I wouldn't say every day, but almost every day. And, and I think that's important. We, we were focused on doing it a completely different way. We were focused- On bringing, we were gonna bring in a full-time collections person and pay them a salary and have them work on collecting money every day. After speaking with him, he says, "I don't think you need to do it."
He goes, "You have a really solid business, but I don't think you need to bring that expense in. I think you have a, in your, with- within your existing people, you have enough people to be able to collect, do these collections, and we're gonna work on getting that, figuring that out very shortly, and we're going to, to make that happen." And so we, we were thinking in, Emily and I were thinking in a totally different direction. He pretty much, we put a stop to that because... And, and already within two weeks, three weeks of him working with us, our collections, we've really gotten our 90s way, way down, and we're really... It's, it's an incredible thing when you [00:59:00] have somebody that takes a different view of, of what you thought was the right way.
I thought we had to go a diff- completely different direction. He put us in another direction which we hadn't thought about, and it seems to be working. It's, we know it's working
Jason Jacobs: S- s- so, um, so I have some friends that are doing, uh, fractional CFO businesses and, um, and actually, um, someone I've been getting to know is a cons- fractional construction CFO for ten to seventy-five million shops, and he's gonna come on the show soon. So that, that'll be... I'm excited for that one. But what I've been hearing from them is, um, that when they get in, they help with the finance stuff.
It's like, wow, there's a lot of low-low, you know, it's basically mirrors your experience. Like, there's a lot of low-hanging fruit and we can predictably, like, find meaningful savings and improve cash flows meaningfully and, and, you know, without like, uh, really lifting a finger because there's just a pattern recognition like you just know, you know, you know, like you, [01:00:00] you know, you know where the fruit is ripe, right?
You know where to look after you've, after you start doing a number of these engagements. But what they're also saying is that there's just as much opportunity in the operating workflows as there is on the finance side. Um, and I'm curious, um, you know, 'cause it sounds to me from what we talked about earlier in this discussion, that you feel similarly.
And I guess what I'm-- what that leaves me wondering is, um, you know, what if you had someone looking at the operating workflows the same way this fractional CFO is looking at the f- finance workflows? Um, you know, would that be of interest, and what would that person look like in, in terms of experience?
Matt Pincus: Yeah, and kind of like what would that person look like in their experience? Yeah, I mean, I, I think that that's, I think that that we would be very interested in something like that b- because we we al- I always say this to my staff, to everybody, that we're, we're really, we're elevator people. We're really good at, at that, that discipline, right?
But we're, we're, we're, yeah, our- There's new technologies [01:01:00] that come out, but we're not following it. We're following new technologies in our space, right? But there's workflow efficiencies or there's different way people are doing, uh, managing their people or their, the, the, or, or doing their sales, or we, we're not really looking at that because that's not what we do. And I think that's what this fractional CFO has taught us, is that we thought we knew everything. We really don't know everything.
Jason Jacobs: Um, don't, don't answer this if you, if you don't want to, but, um, but is it a strict, is it a strict retainer, um, you know, regardless of performance or is it performance-based? Like what, what's the, what's the business model for the fractional CFO?
Matt Pincus: is it straight retainer, uh, you know, regardless of performance or is it performance based? Like what, what's the, what's the business model to the platform? Yeah, uh It's, it's basically a retainer and, uh, you, you have-- you pay a monthly fee. After, after the initial retainer, they do an assessment. This is how this guy works.
He does an assessment, and then we decide if, if we need him how many times a month or, you know. And then, then we, he-- we pay a fee based on that, and then we have him available [01:02:00] for that, for that timeframe. And we're-- And believe me, we're gonna-- we would use him. We're gonna use him.
Jason Jacobs: kind of human-powered, or is there any kind of tooling that he's building in his wake to make you run more efficiently ongoing?
Matt Pincus: There is. He's already provided us with, uh, you know, these Excel spreadsheets and, and these things that, that once we start to fill them out, they pretty much calculate, you know, what, what our cash flow needs will be. You know, what, what it'll it'll do, particularly for our payables, it'll tell us what, you know, when we need to make payments, and also predictable when we have to do collections.
It's gonna now pop up in a, in a way that, that tells us, okay, this... Even though we're doing it on QuickBooks now, but it, it, in a different way, where, where we know we need to make sure that we're, we're, you know, having our people that are doing the collections will, will have more reminders popping up.
It's, it's just those type of things. It's simple, and stuff that we probably should be doing on [01:03:00] our own, but we were focused on selling elevators. We were focused on getting them up and running, finishing jobs. We weren't focused on the, like... And he's got us focused on, on that aspect of it, on the collections part of it, on all those things, on the finance side of it
Jason Jacobs: Wh- why now?
Matt Pincus: Because it cash flow, the-- right now, if you look at the Philadelphia area, cons- new construction is down probably eighty percent. Uh, financing's so tough right now, and it's expensive. Even private financing through s- some of these private financing, uh, areas, even some private equity, it's, it's tough.
They're, they're, they're, they're, you know, getting it. So we're seeing payments have slowed up. You know, wh-when guys were paying in the thirty to sixty-day range, we're seeing them out there at that ninety to one hundred and twenty range. And we call them, they're paying us. Uh, uh, the money's good, but it's [01:04:00] just slower getting in.
We need-- And that's what prompted us. We need to be better and faster. We need-- Instead of waiting it for it to get to thirty to sixty, I mean, to get to sixty and over, we need to be on it on day thirty-one on every single account, every single amount.
Jason Jacobs: Yeah. The thing I wrestle with on the workflow side is, um, it sounds like you're motivated by playing defense and improving your cash flows, right? Um, and it seems like the workflow side, and correct me if I'm wrong, but is more like playing offense, right? Um, where you're kind of looking proactively for improvements, but you're not necessarily in pain.
Um, uh, I mean, does it... Do I have that right?
Matt Pincus: That's exactly right. I, I would think that-- I think our f- our factional CFM kind of put it in those terms. It, it, it-- W- we do need to get more efficient. We talk about it all the time, but we are playing defense on the collection side, and we have to be. We, we should have been,
you know... We-- You wanna be there, but I think [01:05:00] on the offensive side, we can do a really good job.
We just need to come up with the plays. We, we need to sort of
Jason Jacobs: Yeah.
Matt Pincus: figure out what they
Jason Jacobs: but are you as motivated though? Like, I, I get why you're motivated to play defense, right? But, um, but, uh, like is... I mean, isn't it easier to kick the can down the road for the offense?
Matt Pincus: road for the outcome? It is. But we, we have something we instituted here, uh, that I kinda brought to the table. This was, I don't know, six or eight months ago. It's something called safety, quality, and productivity. I didn't invent it. This, another company that I know through ABC, this guy Barry, Barry Schlock, Schlock Contracting. He's a, he's a road contractor. He did a seminar on it, and it, and it changed a lot of my thinking. So what it means is that the number one thing you train people when they fir- first w- working for you is safety, to be safe and, and, and not get hurt, come home every day with all 10 digits, and, and, and, you know, and all that.
And then the second thing is you [01:06:00] teach them quality. How do you, how do you build the quality product? W- We, we believe in quality. We want, we want the job done right the first time. And then the last thing you teach them is productivity, and that's the innovation. That's the, the, the productivity. That's the work- the, the new...
H- How, you know, the, how you, how the company makes a profit, and I think that's the key. It, it, I, I love the idea, and it really, w- we seem to... We're embracing it. It seems to be working for us. It's a new concept for us, and, and I think once you get the quality up to that high level, then you, then you teach them productivity.
"Okay, normally it takes you, you know, f- 10 hours to do this particular job. We have a new way of doing it that'll cut it down to six. We want you to try it. I know you've been doing this way for 20 years. I want you to try this new way." And that's our goal
Jason Jacobs: S- s- so if, if someone were to, um, uh, come to you with a fractional model on the [01:07:00] offense side versus defense, uh, so workflows versus finance, right? Um, uh, w- do you have a clear idea-- Like, if you had to write the job description for the vendor that you're looking for, do you know what it would say?
Matt Pincus: would say? I don't. I, I, I'm not sure exactly what it would say, but I, but I think part of it would be that I want, I want to do the same work we're doing today with the same guys, but instead of this job taking 200 hours, I wanna get it done in 150. Like, that would be one of the goals
Jason Jacobs: So, so how can we, um, uh, how can we do more with less without compromising quality?
Matt Pincus: Exactly. And, and that's
the goal of safety, quality, and productivity. The more productive you get, everything tr- uh, translates in, that translates into getting jobs done faster and you can do more work[01:08:00]
Jason Jacobs: So when, when it comes to that retainer then, um, how would you measure ROI? Like over what time period? Would it just be doing math on like how many hours you would need to save and how much you pay per hour and then, uh, you know, and then, and then how long the payback would be? Or, um, yeah, like how, how would you think about whether it's worth it?
Matt Pincus: like, okay, how much you take and then how much you pay for that work, and then, you know, and, and depending on how long the data could be, or, you know, how you think about whether it's working. So I would think it's a different-- I think the, the, the goal model is different than a fractional CFO, right? The fractional CFO is there for advice, for counsel. I think when you're on the technology side and you're looking to increase productivity, there has to be an incentive base. So if I'm gonna hire this fractional, we'll say, quote, "technology guy," right? Like, I would think that it'd have to be goal-based.
Like, okay, I'm tasking you with finding me technology that, that, that lowers the hours it takes me to do a job. And if you make that happen, then I'm willing to pay you, you know, X to make that happen, right? But I'm al- But I understand that I'd [01:09:00] probably have to pay a fee or retainer upfront to get that person started.
They're not gonna work-- I assume they're not gonna work for free on, just on a straight commission basis. But I would say the majority of what I'm gonna pay that person is gonna be goal-based.
Jason Jacobs: Um, interesting. Well, that gives me a lot to, uh, think about. Um, Matt, what, what do you worry about the most, um, as it relates to the business? What keeps you up at night?
Matt Pincus: The number one thing is the labor. Like not, you know, getting the skilled labor that I need. Even w- even w- with us having the CET program, it's still a concern because, you know, if, if we get influx of work, you know, we need people to get it done, and that So that's my number one thing. I worry about it. I'm, I'm trying to do something about it internally, but again, it's a slow process.
I wish the, the process was faster
Jason Jacobs: And as it relates to that influx [01:10:00] of work, I mean, is that something that you have levers to turn up and down, or is it just kind of word of mouth and, and you just pick up the phone when it rings?
Matt Pincus: pick up the whole thing. It's, it's, it's not-- It's, it's, it's, uh, almost impossible for you to steal another technician or mechanic from another company. They very rarely ever make that change. It's so hard. It, there's not a, a pipeline or a flow anywhere. If you're not developing your own people-
Jason Jacobs: what, what, what about for new business? 'Cause you, you said, you know, w- if the new business comes,
Matt Pincus: What about your new business? Because you said the way new business comes. Oh, for new
Jason Jacobs: up with the labor.
Matt Pincus: I would say that eighty, eight- eighty-plus percent of what we do is referral work. Like, we're really good at that. And, and that's-- I think that's important. We do pick up a lot of new customers because in our industry, we've been kinda lucky over the last few years that I think it's eight or nine over the last three years of my competitors that were kind of family-run or, or locally run business sold out to private equity.
And what happens is that I've had this incredible, [01:11:00] uh, you know, uh, incredible opportunity to pick up all this new work because they're-- Again, they used to call the owner like me and say, "Hey, Matt, I got a job. Can you go look at it?" That's not happening anymore. So they're calling us now, and we're picking up a lot of that work. And it's, it's been a great influx, and business has been very good this year. When a lot of other companies have a-- are having a down year, we're having a very, very, very good year, and a lot of it has to do with that, picking up these new accounts
Jason Jacobs: And, uh, and, and-- Go ahead, finish your thought, please
Matt Pincus: That's it. I just, we just pick up these new accounts from, from these other companies that have sold out, that people are, are done dealing with their BS, so to speak, and wanna be able to deal with somebody that's actually available. That when they call, we pick up the phone, we're available, we're there, and we're gonna go out and do what they, what they ask us to do, and we're gonna do it at, at a competitive price[01:12:00]
Jason Jacobs: Uh, how, how do you feel about the fact that private equity is increasingly paying attention to your industry?
Matt Pincus: Well, I guess I go, kinda go back and forth about it. I, I think on one side of it, it's good. It's good for the people that have sold out. They probably got nice payout, but, uh... And then on the other side, it's really good for me in my business because it's now helping me grow the business. It, it gives me an opportunity that I never had before, but some of these companies were just as good as we were before they sold out. They did the same things that we were doing, so we were very-- And we were almost exactly the same on price, so there wasn't, it wasn't a difference. It wasn't that I was $10,000 and, and, and that guy was $20,000. It was that if I was 10, he was 10 five, or I was 10 five and he was 10. It wasn't, it, it w- it wasn't that-- There wasn't a big, uh, difference between us. But now we're seeing that difference because these private equities have to, they charge more, they have shareholders they have to deal with, they have to pay out dividends, [01:13:00] and we're privately he- held. We don't have to worry about those things
Jason Jacobs: So what I'm hearing from you is that in your view, private equity, you know, it's good to enable owners to have the exit if they seek it, um, uh, but that largely it's more about financial engineering at the expense of quality. Um, am, am I hearing that right?
Matt Pincus: Yeah. We- we're seeing it. But that's, that's my take on it. I can see it
Jason Jacobs: Yeah. I guess, I guess my question is, um, is there-- does that mean that there's never a scenario where one plus one plus one equals five in terms of combining shops and economies of scale? Or is it more that there is a way, but private equity is just not doing it that way?
Matt Pincus: that there's a number of scenarios in terms of combining jobs and economies of scale, because it's on that physically, but private equity is not really getting that right. I think there's a way to do it, and private equity is not doing it. Now, I'm not saying that every company that sold out to private equity is, is, is, is a bad company.
I'm just saying that in, in general, it, it's the model of how they wanna run everything, how they centralize everything. They, they sometimes they-- The [01:14:00] new-- The model has been they're keeping the local name. Like if they-- if a company sold out and it was XYZ, they're keeping XYZ Elevator Company. But they're moving now, instead of calling that lo- that local office, your, your now your calls are going to a call center. When you call about a question on an invoice, you're not getting the local person, you're getting a back office somewhere else, and, uh, 'cause they're doing that to cut the cost. They don't need a back-- They don't need any, uh, you know, collections and accounting and dispatch at every location. They have a centralized location.
So what I'm saying, it's hard for somebody to now get through. When you call our office, Stephanie picks up the phone and the customer says, "Hey, it's, it's, it's so and so." And she goes, "Oh, let me look you up." And she know- she doesn't even have to need a, a number or anything. She knows who it is. There's a difference, right?
It makes a difference in peop- in, in, in time and, and getting the information they need. And I think these are the kind of things. I'm not saying that they're doing poor work or anything. I'm just saying that-- and that, [01:15:00] that these are the things that c- that people want today. They want access, and we give them that access.
Jason Jacobs: Uh, is there, is there any pitch that an outside buyer could make that would, um, either make it interesting for you to sell or even in a world where you have no intention to sell, just at, at least feel like it would be, um, uh, it would put you in a stronger competitive position on the other side?
Matt Pincus: I do. I mean, I, I think if they just follow our model, I'm not saying our model's perfect, but i- if, if you follow our model, and I think it's, it's, you know, usable for any industry almost. If you follow the model that we have, and, and, and that's how, that's how you can do it. I think, I think the consolidating everything is not a good idea.
I think I get that part of it. I think there are some things that if you were... that, that you can consolidate, but I think there's certain things that you [01:16:00] need to leave, uh, in place. And I just think that that's all. There's, there's pieces to the, to the puzzle that work really well. Why would you wanna change that?
If the company's profitable and it's, and it's selling a lot of work, and the, and the people in that industry in that area like the what, what you're doing, and, and you're in a market that, that's kind of recession-proof, when you look at the multifamily market, right? And you're doing the majority, why would you wanna vary from that?
Why would you wanna move to another lo- you know, other areas when, when you already have that set up? And that's what they're doing, is that they're looking to sign some of these other type of work and contracts that, that don't fit their original model, and that, that destroys the business. I hope that makes sense.
Jason Jacobs: if, if, if you didn't have an Emily, uh, what would you have done when you, when you thought about, uh, succession?
Matt Pincus: I probably would've My, my succession plan would've been, uh, to, to e- I had [01:17:00] brought in somebody to run the business before Emily took over. That, uh, and w- that person, uh, left, and then Emily re- you know, took over that position. He was there for since, for about eight years, seven, eight years. And then my goal, after speaking with Emily after I had hired him, I had a conversation with her that she was willing to take over that position. And unfortunately, he left abruptly, but Emily really stepped up and, and I've worked, we worked very close together, and it's been a good relationship for us. It's worked very well
Jason Jacobs: Uh, what do you think of these, um, search funders, uh, uh, or independent sponsors who set out to, um, you know, to acquire and actually run a business who come in from the outside? Is that, is that a type of profile that could be successful in an industry like this or do you really have to grow up in it?
Matt Pincus: I think they could be successful. I get contacted by those guys all the time, and it's kind of funny, you know. [01:18:00] They really reach out to me. But it- listen, is it... Um, I- is it important that you have a background in elevators and know the equipment and understand it? Yeah, that's, that's important. It's important in any industry. But if you're a good businessperson, the elevator industry's changed. It used to be that you had to be a top elevator mechanic to run an elevator company. It was all about that. And even the guys that were running some of the largest companies, they were elevator mechanics originally. They worked their way up through the ranks.
It- that's how we always did it. But today, it's not that way. It's a business, and, and it needs somebody that has a, a smart business mind, that understands our business cycles and understands our business timeframes and how, how to coordinate these four different disciplines into one company and, and make it, make it all happen, and get done on time, and, and, develop new workforce, and all these things.
And if you're able to do that, I think you can be successful in it. [01:19:00] You can learn the basics of elevators and how they run. It's not hard. All right? The, the systems, you don't need to be... Y- just 'cause you run a business doesn't mean you have to understand how, how to wire up an elevator controller or how to, you know, adjust a door operator. That's not the point. You, you're hiring... You're, you're supposed to be delegating that to people that are better than you at it anyway, and you're supposed to be, you know, they're supposed to be the experts at that. That's why you hired them. It's why you pay them the big dollars, right? To do all that. And that's what Emily's figured out.
She's know- she has the quality people to do that. She just needs to un- have an understanding of what a door operator does and how it works, and where we buy it from, and who the vendor is, and, and if we need replacement parts, where to get them. That, that's, you know, that, that's... She doesn't need to know how to install it, 'cause she has people that know how to do that, and she can rely on them. And, and she does a good job of that. And I do the same thing. I'm, I'm not out there every day anymore doing it, so I rely on them. [01:20:00] I think there, there's a po- It, they, they, that could work
Jason Jacobs: Uh, la-last question, Matt. Um, I mean, if you think 10 years into the future in your dream world, um, what does Pincus Elevator look like and what have you achieved at that time?
Matt Pincus: I think that we're, we're... I wouldn't say we're double the size that we are, but I would say that we're gonna be, hopefully be the largest, one of the largest independents or maybe the largest independent in the area, and maybe we're-- And we've expanded our territory to more of Pennsylvania. We're working on that now.
We're expanding to the central part of the state, and possibly, hopefully one day be out in Pittsburgh, and, uh, maybe even back up. We used to do North Jersey at one time, but maybe we'll back up to North Jersey. I don't know if we wanna do that. It's a kind of very competitive market. But I think... And I, and I see revenues up by 40 to, to 60%. I think that [01:21:00] we-- that's achievable. I think we're, we're proving that, that our model works, and then I think that we can do that. That's where I think we are. I don't know where we are as far as... We'll hopefully be o- probably be over 50, take to achieve that, maybe 100 employees. But those present other challenges.
Once you grow past a certain, uh, amount of employees, it becomes even, uh, tougher to manage and presents other challenges
Jason Jacobs: Uh, well, this is such a wide-ranging discussion, and gosh, I learned a ton. Um, is there anything I didn't ask that you wish I did, or any parting words you'd like to leave with listeners?
Matt Pincus: Uh, I would just say that there's opportunity for everybody out there is if you wanna put the effort into it and work hard, and I believe for this discussion that my, my hope is that we don't, we don't put a, a, a, a stop or, or try to, to, uh, slow [01:22:00] the, uh, growth of AI. I think, in my opinion, that it's gonna be, uh, the future for us.
It's going to be tremendous to help us as small businesses to grow, that you're putting... They're putting restrictions on some of these larger companies, but whenever they make restrictions on larger companies, it trickles down and it kills small business. I'm a big advocate for small business, and I wanna, I wanna be able to have the same opportunities that they do. But if, but if you put restrictions on that stuff and it limits me, my ability to be able to use this technology, then you're, you're hurting my business. And, and I don't want that to happen. I want the technology to move forward. I want us to be the number one with the technology. And, and I want, you know, our politicians and our, our, you know, business people to understand that we're the engine, small business is the engine of what goes on in this country.
We [01:23:00] employ the, the majority of people, and, uh, we ha- we need access to that technology. Without it, we're not gonna be around, and I don't think that's what people want. I think they want us around. They don't want everybody to be an Amazon or a Walmart. They want us to be... They want small business to have a choice. So that, that's what I would, I, my parting words
Jason Jacobs: I think that's a great point to end on. And gosh, I, I'm so honored that you came on the show and that I had the opportunity to learn so much more about your business. And I'm, you know, I'm excited for everyone to listen, but I'm mostly excited for the family, uh, to listen. You, you might be the only way to actually get them to listen to my podcast.
Matt Pincus: I will send it to them, and I can guarantee you that my siblings and, uh, and all their, hopefully their spouses and everybody will, will, will watch it because I, I think it's interesting. And, uh, and I'm glad that I started following you and, and seeing what you were doing, so it was exciting. I still like your LinkedIn posts and enjoy all this [01:24:00] stuff 'cause it really got me going and made me reach out to you,
so I'm happy I did.
Jason Jacobs: I'm glad you did too. Thanks, Uncle Matt
Matt Pincus: You're welcome, Jason. I'll talk to you later.
Jason Jacobs: That's it for this episode of BuiltForward. I hope you enjoyed it. If you found it useful, share it with someone building in the industry and follow the show so you don't miss what's next. Thanks for listening, and see you next week