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#21 Your company's budget is lying to itself

#21 Your company's budget is lying to itself

This issue covers the discipline of honest budgeting, why overhead commitments deserve more scrutiny than most operators give them, and how smart technology configuration is turning lost calls into booked jobs. We also look at what PE-backed competitors figured out about financing long before most independents did, and why Pantheon 2026 belongs on your calendar. The through-line across all of it: the gap between good operators and great ones is usually found in the details they choose not to ignore.

Christopher Hoffmann
April 15, 2026 • Estimated Reading Time: 10 minutes

In Today’s Newsletter

The budget that lies to itself
Things you should do…
The event I am attending in 2026
Overhead doesn’t care about your revenue
The text we send when the call drops
What PE knows about financing that you don’t
Favorite Tweets from the past week

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What’s on my mind?

The Budget That Lies to Itself

We missed our 2025 revenue budget by $13 million. Then we set 2026 targets 17 percent higher.

I want to sit with that for a moment. Because it's not unique to us. It's one of the most common patterns in privately owned businesses… and it deserves more honesty than it usually gets.

The psychology behind optimistic budgeting is real. When you're a growth-oriented company, a budget that assumes last year's performance feels like giving up. So you project forward. You assume the new market matures faster than it did. You assume the new hires ramp quicker. You assume the slow months don't hit as hard.

And then reality shows up. And you're behind before February is over.

I've been thinking about a more useful framework. What does the budget look like if we assume we are exactly as good next year as we were this year? No improvement. No growth initiatives paying off. No new markets turning the corner. Just this year, repeated.

That number is your floor.

Now ask: what has to be true for it to be better? Not what do we hope happens — what specifically has to happen, and how confident are we that it will? That's where the honest conversation starts.

The gap between your floor and your target is a set of bets. Some of them are good bets. Some of them are hope dressed up in spreadsheet formatting.

Knowing the difference is one of the most important things a leader can do.

A budget that lies to itself doesn't just create a financial miss. It creates a leadership problem. When the team is managed against a number that was never realistic, the wrong people get blamed and the wrong lessons get learned.

Honest budgeting is an act of leadership. It requires the confidence to put a realistic number on paper even when the realistic number is uncomfortable. And then to close the gap between realistic and ambitious through execution, not assumption.

We're working on that. The $13 million miss taught us more than a clean year would have.

Turkey season starts in 1 week!

With a few back-country hunts on the calendar, I decided to knock out a long-range shooting course.

These views at the farm don’t get old!

Is it any surprise that her favorite is the mini?

Family business meeting :)

Things you should…

1. Pull last month's dropped calls and find out how many you followed up on. If the answer is none, you have a system problem, not a people problem.

2. Read your overhead commitments like a balance sheet, not a budget line. Every lease you sign is a promise you're making against revenue you haven't earned yet.

3. Find out if your techs know your financing options better than your sales sheet. If they don't, the close rate problem starts there.

Can you do me a favor?

To help me create the best content for you, can you answer this quick (4 question) survey? I promise it won’t take more than 30 seconds :)

Technology Corner with ServiceTitan

The Event I'd Pick Above All Others in 2026

I remember the first ServiceTitan Pantheon event in Los Angeles.

A couple hundred of us. Small enough that we hosted dinners at Vahe's house. Backyard conversations, good food, people who were genuinely excited about what this software could do for the trades.

That was then.

Pantheon 2025 was sold out. 4,000+ attendees. Operators from residential and commercial service companies, private equity firms, family businesses, service providers, aspiring entrepreneurs, technology executives, manufacturers, and more. What started as a gathering of early believers has become the defining event for our industry.

If I could only attend one industry event this year, Pantheon would be at the top of my list. No debate.

The Details

Pantheon 2026 takes place October 5-7 at the Walt Disney World Swan & Dolphin Resort in Orlando, Florida.

The format this year is bigger and more immersive than anything they've done before. ServiceTitan is taking over the entire Swan and Dolphin campus, with keynotes, breakout sessions, and exhibit halls spread across the property. Over 125 industry speakers across 2.5+ days of programming.

If you haven't registered, the April pricing window is open now.

Why This Year Feels Different

We're at an inflection point.

The conversation at last year's Pantheon set the table for where things are heading. Ara Mahdessian stood up and laid out, in plain terms, the magnitude of ServiceTitan's commitment to AI. We're talking hundreds of millions of dollars in R&D investment. $300M in FY2026 alone, with tons of new hires in research and development.

That's not a company dabbling in AI. That's a company making a long-term bet on where this industry is going.

And the question they're trying to answer isn't abstract. Their own customers are asking it directly: Is ServiceTitan committed to winning in AI, or just participating?

What I'm Watching Closely

A few things I'm particularly interested in at this year's event.

First, the new CTO, Abhishek Mathur. ServiceTitan has brought in experienced technology leadership to accelerate the platform's development, and I think the implications of that hire will be felt for years. Great software companies don't just happen. They require the right technical vision at the top. I'm eager to hear how this changes the product roadmap and the pace of execution.

Second, the new field mobile app. My team has been tracking this closely. The updates accompanying this app are meaningful, not cosmetic. Tools that actually make a field pro's day easier, that reduce friction, that support the work we're doing at the job level. In an industry where the field experience is everything, better tools for your best people matter.

Third, the broader AI product rollout. What's live now, what's coming, and what will separate the operators who use these tools from the ones who don't. ServiceTitan has been building toward AI dispatching, AR intelligence for accounts receivable, automated invoicing and billing, commercial margin forecasting, and more. These aren't features for tech enthusiasts. These are operational levers that affect your bottom line.

The Bigger Picture

I've been saying for a while that AI is something home service operators need to take seriously, not because it's exciting technology, but because it's going to create real separation between companies who lean in and those who wait.

We're a fast follower, not an early adopter. That's intentional. I want proven use cases before we build our operations around new tools. But the pace of "proven" is accelerating. What sounded experimental two years ago is now table stakes. Pantheon is one of the best places to see that shift in real time.

When I think about what we're building at HB Solutions Group and the role that the right technology platform plays in getting there, these conversations matter. The best operators in the country will be in that room in Orlando. The ideas they share, the questions they ask, and the roadmap that ServiceTitan puts in front of us will shape how I'm thinking about technology strategy for the next 12-18 months.

It's worth showing up.

#grateful to have ServiceTitan sponsoring this section of TPLT

CEO: Growth Mindset

Overhead Doesn't Care About Your Revenue

Our facility costs grew 30 percent over two years.

I'm not sharing that as a confession. I'm sharing it because it illustrates something that doesn't get talked about enough in the conversation about growth: overhead doesn't flex down when revenue softens.

Every lease you sign is a fixed obligation against a variable revenue stream. Every building you commit to. Every corporate hire you add. These costs don't adjust when you have a mild winter, or when a market takes longer to mature than you projected, or when a key leader departs and takes six months of momentum with them.

Revenue is variable. Overhead (or most of it) is not. And the gap between those two realities is where a lot of growing companies get into trouble.

The way to think about this isn't to avoid investment. It's to be honest about what you're committing to (and over what time horizon) before you sign.

When we expanded facilities in 2017, it felt like a growth decision. And it was. But it was also a multi-year fixed cost decision. Those are different things, and they require different conversations.

Here's the question I now try to ask before any significant overhead commitment: if revenue comes in 20 percent below target, can we still support this cost? If the answer is no, that doesn't mean the investment is wrong — it means you need to be clear-eyed about the risk you're taking on, and have a plan for how you manage through a softer scenario.

Growth has a cost. That's fine. The mistake is when we account for the upside without accounting for the fixed obligations we're building underneath it.

The lesson isn't to stop growing. The lesson is to understand exactly what you're committing to before you commit.

CyberNetic Labs - bringing powerful Agentic AI tools to the trades

The Text We Send When the Call Drops

A customer calls. Something happens in the middle of the conversation. The call drops. They hang up. The line goes dead.

In most service businesses, that's the end of the story. The call is gone. The customer moves on. Maybe they call a competitor. Maybe they just give up. Either way, the opportunity disappears and nobody notices because there's no system in place to catch it.

We decided to build one.

Inside Netic, we've configured what we call a recapture text campaign. The concept is simple: when a customer calls and disconnects mid-call, an automated text message goes out within a defined window. It reads: "Hoffmann Brothers here. Sorry we were disconnected, let me know how I can help you."

That's it. No hard sell. No script. Just a human-feeling message that says we noticed, we care, and we're still here.

The lesson in this one isn't the technology. It's the mindset behind it.

Most companies treat a dropped call as a lost opportunity by default. We treat it as an unfinished conversation. Those are two very different operating postures, and they produce very different results.

What Netic allows us to do is configure the rules around timing and frequency. We're not blasting customers. We're sending a single, well-timed message at a moment when they're most likely to still need help. The difference between a helpful touchpoint and an annoying one is usually just discipline around when and how you reach back out.

The numbers from the last 30 days tell the story clearly. We booked 164 calls directly from recapture text messages. Calls that would have otherwise been lost. Customers who disconnected, received a text, and came back. Over the course of a year, that's roughly 2,000 additional booked calls we wouldn't have without this configuration in place.

Think about what 2,000 calls represents in revenue terms. Think about what it represents in customer relationships that didn't get dropped along with the phone line.

This is what we mean when we talk about AI and automation as a customer experience tool, not just a cost-reduction tool. The recapture text doesn't replace a CX rep. It fills a gap that no CX rep could ever fill at scale, because no human can monitor every disconnected call across three markets and send a personal follow-up within minutes, every single time.

Netic is one feature in a broader platform we're building around. Recapture texts are one campaign inside that platform. But the compounding effect of getting these details right, across every touchpoint, across every market, is what separates a good customer experience from a great one.

We're not done building. But 164 booked calls in 30 days is a pretty good proof of concept.

#grateful to have Cybernetic Labs sponsor this section of TPLT

Consumer Financing¹

What PE-Backed Competitors Know About Financing That Independents Don't

There's a pattern I've noticed in the home services consolidation wave that doesn't get talked about enough.

When private equity buys a home service company, one of the first operational levers they pull isn't marketing spend or headcount. It's financing attachment rate. They build it into the sales process, train field teams to present it consistently, and measure it like any other performance metric. Within months of an acquisition, financing penetration on large-ticket jobs goes up significantly.

They're not doing this because it's a nice thing to offer customers. They're doing it because the numbers are unambiguous.

Here's the lesson. A customer standing in front of a failed HVAC system in July doesn't have a want problem. They have a cash flow problem. They need the system. They know they need the system. The only thing standing between your technician and a booked job is how the customer is going to pay for it today. If you hand them a financing option at that moment, the conversation changes. If you don't, you're asking them to solve a $12,000 problem on their own before they can say yes.

PE-backed platforms understand this at an institutional level. They've run the data across hundreds of locations. They know what average ticket looks like with financing attached versus without it. They know what close rate looks like when a technician presents financing at the point of recommendation versus when they leave it to the office to follow up later. They've turned those numbers into training, process, and accountability.

Most independent operators treat financing as something available if a customer asks. That's the gap.

The offer has to be proactive. It has to be consistent. And it has to happen at the right moment, which is when the technician is standing in front of the customer making the recommendation, not an hour later when the customer has already started second-guessing the decision.

We've partnered with GreenSky because we believe financing is a customer experience decision as much as it is a revenue decision. A customer who can say yes today, get the work done today, and pay over time on terms that fit their budget is a better experience than a customer who has to defer necessary work because the timing of the expense doesn't align with their cash flow.

The replacement deferral problem in home services is real. Customers are sitting on aging equipment, running systems past their useful life, and making maintenance decisions based on what they can afford right now rather than what's right for their home. Financing removes that constraint.

Independent operators who treat it as optional are leaving revenue behind. More importantly, they're leaving customers in situations that financing could have solved.

The PE platforms figured this out early. It's one of the reasons their average tickets are where they are.

We're not going to cede that advantage.

#grateful to have GreenSky® Home Improvement sponsor this section of TPLT

¹ The views and opinions expressed here are owned by The Path Less Traveled and its author and may not reflect the views of GreenSky®

This Week’s Favorite Tweets

Friends of The Path Less Traveled

Who are the VENDORS that fuel our success?

ACCOUNTING & TAX SERVICES

I met Patrick on X (formerly Twitter), which continues to be one of the best communities for thoughtful operators sharing real insights. I’ve followed his work closely and have been consistently impressed by the quality of content he puts out around building strong finance and accounting foundations in small businesses. He brings both clarity and practicality to a topic that is often overlooked but critically important. If you’re a business doing anywhere from startup to ~$15M in revenue, Appletree is an excellent partner to have in your corner.

PAYROLL & HR

Inova Payroll & HR has been a partner to our companies for over 10 years. They have provided us with a payroll technology platform that has been able to keep pace with the demands of our fast-growing organization (now serving team members across 4 states). Inova’s platform works seamlessly with our CRM, ServiceTitan, and with our accounting back-end, Sage Intacct.

COACHING & TRAINING

If there is one organization - perhaps more than any other - that has fueled our growth over the last 10 years… that organization would be Nexstar Network. I like to say that Nexstar Network has built & refined a “process playbook” that touches on so many facets of our business. Don’t try and re-create the wheel… come and learn from the best. Reach out to my friend Kara Schuster at [email protected] and tell her that I sent you.

#grateful for the “Friends of TPLT” sponsors in this section

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