Latest / Scaling Up with Fexingo: How Small Businesses Become Mid-Market Companies / How One Chimney Sweep Scaled to 10 Million by Fixing Seasonal Demand
Transcript
- Lucas: There's a moment every seasonal business owner dreads. It hits around mid-January. The holiday rush is over, the credit card statements arrive, and you look at your calendar and realize you have maybe four months of real revenue ahead before the phone stops ringing. Luna: Right — and for most service businesses, that's not a hypothetical. That's the actual shape of their year. Lucas: Exactly. And today I want to look at a company that solved that problem in a way I hadn't seen before. It's a chimney sweep in Minneapolis — started by a former high-school teacher named Dan Ostlund. He took it from a one-man operation to about 10 million in annual revenue, and he did it by fundamentally rethinking how he staffed the year. Luna: A chimney sweep feels like the ultimate seasonal business. People only think about their chimney when it's cold. Lucas: Exactly right. Ostlund's data shows that 60 percent of his annual revenue comes between October and January. That's four months. So for the other eight, he's carrying a team that doesn't have enough work. The typical move is to add services — gutter cleaning, dryer vent cleaning, maybe holiday light installation. And he did try that. But he realised the real problem wasn't the service menu. It was the labor model. Luna: What does that mean — 'the labor model'? Lucas: It means how you pay people, how you schedule them, and how you keep them from quitting in March when the work slows down. So Ostlund split his workforce into two groups. He calls them the 'winter core' and the 'summer swing.' The winter core is about 15 technicians — his best people, fully trained, certified on everything from chimney inspection to commercial boiler repair. They're guaranteed 40 hours a week year-round. The summer swing is about 35 additional technicians he hires in September, trains fast, and lets go after New Year's. Luna: So he's essentially creating a seasonal buffer — but the risk is that your best people get bored or underutilised in the summer. Lucas: That's exactly the risk, and that's where the second piece comes in. Ostlund cross-trained his winter core on commercial boiler maintenance. It's a completely different revenue stream — commercial buildings need boiler inspections and repairs in the summer, when residential chimney work is dead. So his top technicians stay busy from May through September on boilers, and they get a revenue share on that work. Luna: A revenue share — so they're incentivised to find and sell that work? Lucas: Yes. Ostlund gives them 30 percent of the gross profit on any commercial boiler job they bring in or execute. That changed the math entirely. Suddenly, his winter core had a reason to stay through the slow months — they could earn more in the summer by selling boiler contracts to the same commercial property managers they'd already met doing chimney inspections. Luna: That's clever — it turns the summer into an earning opportunity rather than a cost center. Lucas: And it does something else. It makes the winter core feel like business owners, not hourly employees. Ostlund told me that his turnover among the winter core is under 10 percent a year. In a field where the industry average is more like 40 percent. Luna: If these conversations have moved your work forward in some small way — maybe you've stolen an idea from this show, or avoided a mistake we talked about — the thing that keeps this show free and independent is listener support. It's a small thing, but it makes a big difference for us. Lucas: Yeah, and we keep it simple. If you find value here, you can toss something in the jar at buy me a coffee dot com slash fexingo. No pressure, no perks, just knowing that what we do matters to you. Luna: Thanks for that. So back to Ostlund — the revenue share model sounds great for the core team, but what about the summer swing? How do you staff 35 seasonal technicians without quality plummeting? Lucas: That's the hard part. Ostlund's approach is to standardise the training as much as possible. Every seasonal hire goes through a one-week boot camp in early September — safety protocols, basic inspection procedures, customer communication scripts. They're not doing the advanced work. They're handling standard chimney cleaning and simple inspections alongside a winter core lead. Luna: So the winter core essentially becomes the quality control layer. Lucas: Exactly. The winter core tech rides along on the first few jobs for each new seasonal hire, signs off on their work, and flags any issues. That keeps the customer experience consistent even when you're doubling your workforce in six weeks. Luna: I can see how that works up to a point. But does it scale past 10 million? At some point, you can't keep adding seasonal bodies without creating a management layer problem. Lucas: That's the question Ostlund is wrestling with right now. He told me he's at capacity with his current structure — 15 core, 35 swing. To go from 10 to 20 million, he'd need to duplicate the model in a new geography or add a third service line that uses the same labor pool. He's experimenting with a 'winter core plus' tier — technicians who are fully cross-trained on both chimney and boiler work and who can also supervise satellite crews in the suburbs. Luna: So he's creating a kind of internal promotion ladder that doesn't end in a desk job. Lucas: Right. The people who stay become foremen, essentially. They get a base salary plus a percentage of their crew's revenue. That's a different incentive from the original revenue share, but it's the same principle — tie the technician's income to the company's growth, not just the hours they clock. Luna: It's interesting that he's a former teacher. That background probably helps with the training-heavy approach. Lucas: It absolutely does. Ostlund said his teaching instincts kicked in when he realised he couldn't just hire seasoned chimney sweeps — there aren't enough of them. So he had to build a curriculum. He wrote a 200-page operations manual with photos and checklists. He films every training session and archives it. New hires watch videos of common chimney defects before they ever climb a ladder. Luna: That's a huge moat. Most small service businesses don't have the discipline to codify their knowledge like that. Lucas: It is. And it directly enables the seasonal swing model. If your training is reproducible, you can ramp up 35 people in September and not worry that quality will crater. The manual also lets Ostlund step back from day-to-day operations — he spends most of his time now on commercial boiler contracts and real estate. Luna: Real estate? Lucas: He bought the building his company operates out of. It's a former auto repair shop with a yard big enough to park 12 service vans. He said the real estate is his retirement plan, but it also gives him control over his biggest fixed cost. He's not at the mercy of a landlord raising rent every year. Luna: So the lesson here isn't just 'add a second service line.' It's 'design a labor structure that makes your best people want to stay through the trough.' Lucas: Exactly. The boiler business is important, but it only works because Ostlund created a compensation model that rewards technicians for sticking around and bringing in new revenue. If he had just added boiler service and kept paying everyone hourly, the summer would still be a drain. Luna: What's the one number from his story that you think matters most? Lucas: Turnover under 10 percent versus industry average of 40. That's the metric that unlocks everything else. Low turnover means your training investment pays off year after year. It means your customers see familiar faces. It means you can experiment with new service lines because you have a stable core to execute them. Luna: And the revenue share is what drives that low turnover. Lucas: That, plus the career path. Ostlund's winter core technicians know that if they stay three years, they can become crew leads with a base salary of 70K plus a percentage of their crew's revenue. That's a path to a six-figure income in a trade that typically pays 40 to 50K. It changes the kind of person who applies. Luna: I wonder how many other seasonal businesses could copy this. Landscaping, holiday decorating, tax prep — they all have the same shape. Lucas: I think the key is finding a counter-seasonal service that uses the same skills and the same customer base. For a chimney sweep, boiler maintenance is a natural fit because it's still heating equipment. For a landscaper, it might be snow removal — but that's not counter-seasonal, that's just a different kind of winter work. The real counter-seasonal play might be something like commercial property maintenance in the summer, or holiday lighting installation in the fall. But the revenue share piece is the part most people skip. Luna: Why do you think they skip it? Lucas: Because it feels like giving away margin. Ostlund gives up 30 percent of gross profit on boiler jobs. That's a lot. But he's calculated that the cost of recruiting and training a new technician is about 15K. If he loses five technicians a year, that's 75K. The revenue share might cost him 60K in a year — and he keeps his best people. Luna: So it's not really a cost. It's an investment in retention. Lucas: Exactly. And it's a bet that your technicians are capable of more than just following instructions. Ostlund told me his best boiler sales come from technicians who notice a dirty boiler during a chimney inspection and say, 'Hey, we can clean that too.' That doesn't happen if the technician has no incentive to mention it. Luna: Alright, so if I'm a seasonal business owner listening to this, what's the one thing I should do on Monday? Lucas: Look at your revenue by month for the last three years. Find your peak and your trough. Then ask: what service could I add that uses the same skills, the same equipment, and the same customers — but in the opposite season? And then figure out a compensation model that rewards your best people for helping you build that new line. Don't just add the service. Change how you pay. Luna: That's a good place to leave it. Thanks, Lucas. Lucas: Thanks, Luna. See you next time.