Level Up with Duayne Pearce
Stop Making Excuses, Make Your Profit First by Knowing Your Numbers.
Picture a world where you, a contractor, are paid up-front for your services. Sounds too good to be true? Not according to our guest, Shawn Van Dyke! He's the author of Profit First for Contractors and a keynote speaker who firmly believes in the worth of a contractor's time, knowledge, and expertise, just like that of doctors and lawyers. Join us as Sean enlightens us on how contractors can confidently take the leap to charge for their services, just as we share our PAC process, which is gaining traction in the industry.
Ever wondered about managing finances as a contractor? We discuss this crucial aspect in our chat with Sean. We dive into the value of having separate bank accounts for income, profit, taxes, owner's compensation, and OPEX. Shawn lays out the importance of setting aside profit and paying taxes as hallmarks of a thriving business, plus the vital aspect of compensating oneself for the work done in the business. Be prepared to be enlightened on a new approach to managing your business finances!
Finally, we take a look at lead generation and time management—two essential components of running a successful contracting business. Shawn shares about the importance of filters in lead generation and how this can transform difficult clients into great ones. Plus, we have a deep-dive into time management techniques, the role of automated systems, and the importance of setting boundaries in the construction industry. Our conversation rounds up with Shawn sharing about his successful Built for Build Academy, its growth, and expansion. So tune in, and let's rethink the contracting industry together!
We're on a mission to elevate the professionalism of the residential construction industry, and help everyone enjoy building and renovating homes.
Easy to use Quoting software for Builders. Produce professional and accurate proposals. Quickly and accurately measure and markup plans in minutes. Win more jobs and track costs. 21 Day Free Trial.
Living PurposedWe want to gather with a purposeful intention to explore the world around us. ...
Listen on: Apple Podcasts Spotify
check out more podcasts here...
https://levelupwithduaynepearce.buzzsprout.com
Picture a world where you, a contractor, are paid up-front for your services. Sounds too good to be true? Not according to our guest, Shawn Van Dyke! He's the author of Profit First for Contractors and a keynote speaker who firmly believes in the worth of a contractor's time, knowledge, and expertise, just like that of doctors and lawyers. Join us as Sean enlightens us on how contractors can confidently take the leap to charge for their services, just as we share our PAC process, which is gaining traction in the industry.
Ever wondered about managing finances as a contractor? We discuss this crucial aspect in our chat with Sean. We dive into the value of having separate bank accounts for income, profit, taxes, owner's compensation, and OPEX. Shawn lays out the importance of setting aside profit and paying taxes as hallmarks of a thriving business, plus the vital aspect of compensating oneself for the work done in the business. Be prepared to be enlightened on a new approach to managing your business finances!
Finally, we take a look at lead generation and time management—two essential components of running a successful contracting business. Shawn shares about the importance of filters in lead generation and how this can transform difficult clients into great ones. Plus, we have a deep-dive into time management techniques, the role of automated systems, and the importance of setting boundaries in the construction industry. Our conversation rounds up with Shawn sharing about his successful Built for Build Academy, its growth, and expansion. So tune in, and let's rethink the contracting industry together!
We're on a mission to elevate the professionalism of the residential construction industry, and help everyone enjoy building and renovating homes.
Easy to use Quoting software for Builders. Produce professional and accurate proposals. Quickly and accurately measure and markup plans in minutes. Win more jobs and track costs. 21 Day Free Trial.
Living PurposedWe want to gather with a purposeful intention to explore the world around us. ...
Listen on: Apple Podcasts Spotify
check out more podcasts here...
https://levelupwithduaynepearce.buzzsprout.com
you do fewer jobs and make more money when you charge for the professional services you provide up front.
Speaker 2:Good day everyone and welcome back to another episode of Level Up. I'm absolutely stoked about this one today. It's going to be an absolutely awesome episode. I won't say too much, but this guy had a big influence on our business and the finances of our business, and I was actually had a chat with him on his podcast about four years ago. So a big warm welcome to Sean Van Dyke, author of Profit First for Contractors and Keynote Speaker. How are you, mate?
Speaker 1:Hey, why are you great to see you again, man? It's been like four years and I can't believe how time flies. Thanks for having me on.
Speaker 2:Mate, it's been awesome watching your journey. I'm seeing you like your full speed ahead. Now You've got the built-to-build academy. You're teaching and training and mentoring contractors across the US. Keynote speaking like you're a busy man.
Speaker 1:Yeah, well, I mean, you know the industry. There's no shortage of contractors that are struggling on the business side, so it's just finding the ones that say you know what I'm sick of this. There's got to be a better way, and I certainly don't have all the answers, but I'm pretty good at math, I'm pretty good at the number side and the nerdy stuff that a lot of contractors don't like. So that's where I kind of try to focus and help them out there and say no, we can make us some more money by doing your job, saying no. So yeah, it's been a wild ride.
Speaker 2:Yeah, mate, I really love what you're doing. I follow Febriety's stuff but, like we, I started following you on Instagram maybe five and a half years ago. We obviously reached out to each other because I think back then you picked up like what you were doing, getting charged for quotes, and like we were in the early days of what we now have as our PAC process, so we've trademarked that whole process behind it. You're really big on that getting contractors to charge for their time aren't you? Yeah?
Speaker 1:I'm really big on professionals getting paid. I mean, if you think about it like, I just work with contractors, but you know doctors get paid to do professional stuff they don't work for free and lawyers and CPAs, they all get paid to do professional services. So I'm just a big fan of that.
Speaker 2:Yeah, you go to any of those other professionals. You have to pay a consultation fee or whatever.
Speaker 1:So yeah, I even say the mechanics, they've got to figure it out. You take your car into the shop to get a diagnosis and they spend a few hours with it or whatever, and say, okay, here's what it's going to be. And the customer says, oh, I can watch some YouTube videos on that, and my brother-in-law's got some tools and I got a buddy that knows how to work on cars. Thanks for telling me what's wrong. And the mechanics say cool, here's an invoice for $95 for the diagnostic and we pay it because it's a service.
Speaker 1:Same thing for contractors, except we are expected to work for free. You know free estimate and all that, and I know that you talk about this a lot, but it's just a mindset shift and a lot of contractors say, no, we can't do that, we can't do that, and we're like no, you can't, you're right, but it is possible. Other people are doing it and it's just a professional service.
Speaker 2:And it is a mindset shift, isn't it? But the thing is, when you come across very confident and professional in what you do, so many people are actually so happy with paying a fee because they see the value in you getting to solve problems and sort things out for them before you actually present a price or sign a contract.
Speaker 1:even it's no problem and I'm sure it's like what you teach your clients and what you branded is. I always tell my clients, like we're not, you're not selling a price. When you're charging for a proposal, I call it. I always say, oh, estimate. Yeah, sure, here's an estimate based on whatever information we have floating around the air. But the proposal, it takes some professional work and some time and maybe it's a little bit of time, but still it's a service you can charge for. But when you're selling even that, we call it paid for planning. You have your PAC process. I tell them you're not selling a price, you're selling a process.
Speaker 2:Yeah.
Speaker 1:We'll give you some numbers. Oh, but you want to quote. You want us something that we can, we can stand behind or whatever. Yeah, that's going to take some planning, some time, some effort, whatever that is. I don't care if it's an hour or 100 hours. That's worth something. That's what we're charging you for is the process.
Speaker 2:Yeah, yeah, and your experience, your knowledge and like I'm sure it's similar over there when you're doing refurbishment or renovation work, like there's sometimes. You got to go to site, you got to do investigations, you got to find things out, you got to meet with other consultants and liais with architects. It takes a lot of time to pull that together and I think I don't know. It's funny now like I just think how the hell can it be done any other way?
Speaker 1:Yeah, well, I wonder. I'm going to ask you a question. Do you feel like it's changing over there? You see a shift in that that it's more acceptable 100%.
Speaker 2:So we obviously my business partner and live life builder, milly Lee I think you've done some stuff with her on her podcast as well, like so she's really a big advocate for it to the homeowner side of things. So we've trademarked that PAC process and that we actually have a page on our website now where people and we have a little training course they can get PAC trained and we now have homeowners designers, architects actually requesting where can I find a PAC trained builder?
Speaker 1:That's great. Well, because I would say four or five years ago, when we first met and kind of started talking, it's certainly we were the weirdos.
Speaker 2:Yeah.
Speaker 1:But I do. I feel like over here too, it's more acceptable now. Now it could be just what I'm seeing and the channels that I pay attention to, but at least more and more people are talking and talking about it, which I think is a great thing.
Speaker 2:Well, I think that I think that whole stigma around it is going because there's a lot of people doing it in different ways now and I think, like I know from my point of view, my building business, like we just talk about it openly, like it's across our socials, we give onsite examples of we're working through this PAC process. We've solved this problem like we've done this, we've done that. So, like people come, like they know they're going to have to pay us now before they even contact us, and there's a lot of people out there that are doing that. They're putting it on their socials, like a lot of our live, like bill members actually have it on their websites and things now like this is our process, you'll have to pay for it. So it's out there everywhere now and I think it is fast becoming the standard. If you want a good build, this is the only way to start it.
Speaker 1:I agree, I agree which is a lot of other difficult things in our industry, but it's nice to see that one thing trending that way and it makes a huge. I mean, when I work with my clients it makes a huge difference. And I know that you've seen this before like you can't do it, you can't do it, you can't do it. Until they do it and they're like, oh, you can do it, and then it changes their business because they're like it weeds out people. And then you actually get income and you get paid for your time and the result is and anybody is listening to this it's not try it, you got to try it. Whether it's our process or or Wayne's process is PAC process, it never works until it does. And then, when it does, it's a game changer.
Speaker 1:And you know, this sounds like we would say here in the States you know snake oil, like you're selling snake oil, but you do fewer jobs and make more money when you charge for the professional services you provide up front. Yeah it, just it happens.
Speaker 2:I think it's. It's funny because there is people out there that think they're doing the process and they're not having any success with it, but that is because they don't have a process, they're just trying to charge for a quote.
Speaker 1:Yeah.
Speaker 2:And so I think that's that's the whole reason that it's successful. Like your process and our process, it's actually a process that your contractor can deliver to a client, like there's actually these steps you have to follow, yeah, and that's.
Speaker 1:That's the magic. If there's any magic, is that it's. The clients can see. It's like we're going to do this, we're going to do this, we're going to do this all the stuff you pay for but here's the result and there's the benefits to you along the way, and if we don't do this and we don't have any of this information, we're pretty much just guessing. So this is why we have to do this process, and if you don't hire us to do this, you'll find somebody that will not do this process.
Speaker 2:Good, luck, yeah, and you'll have a a generally a bad experience, but yeah, but how's the book going? So you're obviously the author of Prophet First Contractors the American things. We we've recently had done a podcast with Katie the Australian, Prophet First for Trades.
Speaker 1:Yeah, we, when she started writing her book, she reached out and I was just like God bless you, like get, get this information and more contractor's hand specifically. So I got a chance to talk to her and it was probably a couple of years ago when she was putting the book together and and Prophet First for Trades, it just it's sound, you guys I mean again from American you guys always sound so cool and even that book, you know, sounds cooler than Prophet First for Contractors.
Speaker 2:How's it all going, mate? That book's been pretty successful for you.
Speaker 1:Yeah, and I don't know that if we ever talked about this. But you know, I wrote the book when there's no money. In writing books, first of all, I feel like I mean what you see, you know in the New York time bestseller and all that, yeah, those people make money from books, but in general, people that write books, you make almost no money from it. And for me it was obviously. I believed in Prophet First. I was going through it and I you know I describe a lot of this in the in the book how I came about it. But I was like, oh, this will help me get speaking gigs, because that's one of the things that I do is travel and speak, and anytime that people are booking speakers, you know they're just searching construction industry speaker. So, by the way, if anybody wants to become a construction industry speaker, here's how you do it. These people that are booking speaking events are going to Google construction industry speaker or whatever industry you're in. They don't know anything about the industry. They're just trying to fill event space and all that kind of stuff. And then, depending on where, you show up on Google and they'll look to the side and they'll be like, oh, that person has a book, we should contact them. That was really the point was to get speaking gigs, and it was designed for me as if from a business aspect, it's a really expensive leave behind. You know, $20 book give them out at speaking gigs generates more speaking gigs and you get some client.
Speaker 1:For that was the whole intention behind intention behind it. And then I thought, okay, that's step one, step two if anyone actually reads the book, I'd like it to be good, so I better put some time and effort into it. But that was really the thought process behind it. And I don't know and I think you probably talked to Mike McAlowitz before or you know who he is he created the profit per system. So I worked with Mike.
Speaker 1:He was my mentor because I'd never written a book before. So I worked with him and put it out there, not expecting anyone to really buy it. I sell a few hundred copies but it kind of took off because I had it following on Instagram and I had been talking about profit first for a long time as I was going through the process, just because I was a fan. And then the book came about and so when I was like hey to my audience, I was like, hey, I got this book, if you want to go get it, and people started buying it. So it kind of shot up on Amazon's list there for a little while, which was pretty cool, but then I thought, oh, that'll fade off.
Speaker 2:Didn't you put it out on Christmas Day or something like that?
Speaker 1:Yeah, here's the tip. Here's a little pro tip, if you want to get a little thicker on Amazon. And this is how unprofessional of an author. I was not knowing anything about the book industry or whatever, so I wrote the book in about 90 days, which is again because I didn't know what I was doing. I was working with a coach and basically his course was how to write a book in 90 days. And I'm so dumb I didn't know that other people take years to write books and so I just followed Like I've got coaches and all that kind of stuff, I just do what they say. So how to write a book in 90 days. I just followed every step and the book was done in 90 days. I mean, it was a lot of work, but I was like this is what people do and this is what my coach says to do. And then we were building the website and the landing pages and all the other stuff behind the course and all that stuff, and so it got down to be Christmas Eve.
Speaker 1:The book was on Amazon. So, by the way, it's another thing my wife said when I was going writing the book and figuring out how to distribute it and all that, she was like you're, the only way to get books down to a decent price point for the author is to order thousands and thousands of them. And she was like you're not storing thousands of books in this house. And so I was like, oh man, I got a five. So there's things called vanity presses and at that time Amazon book publishing had come out, which is pretty amazing. Anybody could be an author. You write a PDF, you upload it to Amazon. I have no stacks of book. When you order a book, amazon prints it on demand and ships it to you, so they handle all the drifts. Now I don't make any money, I mean hardly, you know a couple of bucks per book. So that was the idea. I got it uploaded to Amazon.
Speaker 1:As soon as we got the website up and live, it happened to be Christmas Eve, and so I just hit publish on Amazon. And then I think I put something out on Christmas Eve or Christmas Day or something like that, like hey, you can get the book now. Didn't even think anything about it on Christmas Eve. And then we're sitting around Christmas morning, kids are opening gifts and all that kind of stuff, and I go to Amazon to check it and I was just like number one best seller in finance, number one best seller in home building. You know a couple of different categories and I was like, oh my gosh, I'm going to be a millionaire or whatever. There was only a couple of hundred followers on Instagram that just like me sitting around on Christmas morning after the kids open. They're probably checking their phones and, oh, let me grab this book. You know 1995 or whatever.
Speaker 1:And this is what I figured out is all real authors publish their books, so they hit all those lists for Thanksgiving, so people have the actual book for Christmas. Well, when you launch a book on Christmas Eve and no one else in the world is launching a book on Christmas day, then a couple of dozen orders will shoot you up to the top of the list. And so I told my family, my wife and my mother-in-law and everybody. I was like, pull up your phone, screenshot this. It's only going to last for a couple of hours, so I don't recommend it. But if you're going to publish a book and you want to get that little Amazon hot deal or number, one best.
Speaker 1:Yeah, number one. It only lasted for about 24, 48 hours, but I was just like it's like anything marketing and branding. Once you have that and that's still average. Hey, amazon's number one hot new release in finance or business finances or whatever. I mean that was 2018 or whatever, but I still use that little play. I was like, yeah, it's not number one anymore, it was five, six years ago or whatever. So, yeah, that's one of those little happy mistakes, because, again, sometimes you stumble.
Speaker 2:That's an awesome story. You'll be telling that story for forever, but up until I'd come across you, I think we might have had three accounts in our business and then, obviously, listen to your book, and it expanded to six or seven. But the proper first is an incredible system and it's definitely something that's worth looking into. Can you explain it simply for people that have never heard of it before and how it works?
Speaker 1:Yeah, especially for we'll talk specifically to contractors here most construction businesses, just like any other businesses too, but they have one or two bank accounts and all of that money let's just say one bank account it all sits in one bank account, but that money that's sitting in one bucket, it's very hard to see what those individual dollars are used for in the business. So the profit first for contractor system, the profit first system, is a way to view the cash in your business for what it should be used for. And so that's why we break it down to the five foundational bank accounts. Number one is income. We have a bank account for income and so that's so we can see all the money that comes into the business and that's all that account is for. We empty out that bank account into the other four bank accounts as we go through the business, but that's just as we call it, a pass through account, so you can see how much money has come into the business, say on every two week basis. Right, oh, I've got $50,000 that's come in. How do I know that? I can see it, it's in my income account. And then we zero out that account and then we go on and run the business. And then the next week we have $70,000 that have come in.
Speaker 1:So, just right there, without looking at a financial statement, without talking to a CPA or a bookkeeper, I know I made more money the past two weeks than I did the previous two weeks, because I can remember oh yeah, I think it was like $50,000 a couple of weeks ago. Now it's $70,000. And so, right there, it gives you the opportunity to ask yourself, without doing any deep financial stuff, what did I do differently over the past two weeks that increased my income? Whatever that is, I want to keep doing that. And then you go on another two weeks and, let's say, $30,000 comes in. You go, oh man, it was $70,000 a couple of weeks ago. What happened in my business that it's down for $30,000? I need to go fix some stuff. So it's just even that one bank account. The income account lets you know what am I doing right. I want to replicate that. And if the income is down, then you can ask yourself, well, what did I do wrong or what do I need to fix? So that's just one bank account. Now that we have money in the business we want to set aside.
Speaker 1:The reason that you are in business is to make a profit. So we take a small percentage of that, whatever that ends different for every business, especially when you're starting out. It usually is very small. But we put that in a profit account and we don't touch it. So at the end of the quarter, at the end of the year, no matter what the financial statements say because they're confusing and they do require accountants to manipulate the math and all of that kind of stuff. But you can look at a bank account and be like I either have money or I don't have money in my profit account, and the key to it is you put the money in the profit account and then you don't touch it and you get it out of your view and then, like in most countries, like in Australia and here too, when you make a profit, you're going to pay some taxes on it, and everybody hates paying taxes. But I like to say paying taxes is the sign of a successful business.
Speaker 2:So Most people don't like paying the taxes. They haven't got the money sitting around.
Speaker 1:Yeah, they don't have the money sitting around because it's sitting in one other bucket and they react to that oh, we got a bunch of money, I can go buy some stuff, I can go spend some money, I can pay my vendors or whatever, and they operate on that cycle. And then they get down to the end of the year or the end of the quarter and they say I don't have money to pay my taxes. Oh, you did, you just spent it on something else. So not only is it the private first system, a way to view the cash in your business for what it should be used for, it's also a way to prioritize the cash. So we got to have money coming in. That's first. Okay, cool, we got money coming in. We're actually running a business. Now I need to set some profit aside, because that's the reason I am in business.
Speaker 1:If I'm not making a profit, you're not running a business, you're running a charity, and a lot of contractors especially are running charities for millionaires, and I don't like that. I don't like running charities for millionaires. So we set profit aside. When we make a profit, we're gonna pay some taxes, so we need to set something aside for those taxes. Now that we've got profit taken care of our taxes taken care of, then the next priority is making sure the owner of the business is paid to work in the business. If they are working in the business now, you can own a construction company, not work in the business and you still get paid. You just get paid from the profits of the business. That's the way it works and that's a big mistake that a lot of contractors make. Maybe they're paying themselves, but they say oh yeah, I'm profitable because they're able to make a living and pay themselves, but there's nothing left over.
Speaker 2:They're just using the company credit card, pulling out the money whenever they need it, Like there's no visual.
Speaker 1:And again, there may be nothing wrong with that, but I just think you've just created a job for yourself. You're not actually running a business, because a business needs to be profitable, meaning you pay yourself for the work that you do in your business, just like if you didn't work in your. I would say it like this, and I say it like this in the book if you got hit by a bus, you'd have to pay somebody to do all of the jobs, and if there's no money left over after you pay that person to do all the jobs you were doing, then you're not profitable. So that's the fourth bank account is the owner's compensation. We set a certain percentage of every dollar that comes in to make sure that the owner is compensated for working in the business. So now we've got income, profit tax and the owner's compensation, or what we call owner's comp.
Speaker 1:Then the last thing the fifth bank account it usually has the most money in it, but it comes last in the list of priorities is the OPEX account. All right, this is how we operate our business. That's what we pay all of our bills out of, and when we can see our money, instead of in one bucket, one bank account, we have it in these five different bank accounts, then it becomes really clear Like I don't have enough money in my OPEX account to operate the business I'm paying myself. I'm setting something aside for profit and for taxes. What's wrong with my business when you don't have money in your OPEX account to pay your bills? That is your business streaming at you to say operate differently, Don't steal from the profit, don't steal from the government, don't work for free owners.
Speaker 1:Cop, change the way you operate your business. And people say, well, how do? What do I need to do? I don't know. It depends a lot of. It starts with why don't you get paid for the professional service? You know it comes full circle charging more. Start working for the right clients. Start stop working for the for the wrong clients and change the way you operate your business. And I tell people that they'll hear the different bank accounts and I know it sounds confusing, but profit versus actually a very simple system. You can.
Speaker 2:So it makes it just makes everything so clear, like we. So we have another business Quote ease, which is a helps contractors, builders, traders, whoever present there like, put together proposals for their clients. And we actually, the way that it calculates all the cost is split up differently. So it works out all your actual Costs to actually build the project and like labor materials, all those types of things, and then it's got a another, adds on your overhead and all your running costs and then it adds on your profit that you want your business to make. Then it adds on like over here it's GST, so you GST, which is a tax on all those items, and then it gives you a total and it's.
Speaker 2:It's funny because that's pretty much how we set up our accounts. And then we have the other account, like you said, for your, our own salary and those types of things. So it's it's funny like a lot of Contractors, builders, for whatever are working, are actually calculating their costs when they're pricing a job these different ways, but then when the money comes in, they just put it all in the one account. They don't know where it all goes.
Speaker 1:So yeah, and I'll say that the profit first system Works more on human psychology than it does on math. Don't, don't give you wrong that they're math. That's underlying that, because we're gonna rely, as I always say hey, you can disagree with my business tactics and my strategies and maybe you don't charge for quotes or whatever. All right, we can, we can have a debate about that. But what we, what we're not gonna debate is the math of your business. I didn't invent the math, god did. He's not changing it. So that's the underlying truth, everything. And if you don't have the money To operate your business, then the math of your businesses is messed up. And if you go ask a CPA or a bookkeeper or you know even a CFO or somebody with obviously somebody with letters after their names, they probably know the math, but they don't know how the business works.
Speaker 2:Yeah, I love you. You touched on to see when you're talking about Do working for the wrong client because you can. I think this is a huge thing. Like so many people are doing all their work for the wrong types of clients, which is Taking up so much more of their time. If they actually Focused on attracting the right type of clients, that could actually run a more profitable business, get more work done.
Speaker 2:Like, and I think, like I think these days with social media, like everyone sees these other builders and things having all these tens of thousands of followers and they think they need the same. But like, if you're a builder that's only doing 56 big jobs a year, you're a contractor that's doing, I know, say, 30 jobs a year, like, you don't need thousands of followers. So you want followers that are committed to you, that event, like a following you because they like what you're doing and One day going to build with you. So like, yeah, I think people get so crazy. They just want to chase, chase, chase and they end up chasing the wrong types of clients and that just is wasting everyone's time.
Speaker 1:Yeah, when I'm working with builders I'm. One of the things that we looked at is what are the filters that you have in place so that your prospects or your leads Know that you're not the right fit for them? And if they don't have enough filters in place, I'm like, oh, that's one of the problems, you're the only filter. And if you're the only filter, then when you get desperate, you're gonna say, yes, the job. But if you have things in place and it can be as simple as you know, your social media, what you say and what you post and how, what your process is like right there, showing someone they've got, you've got a process to go through that benefits them, but it also requires them to do some things. Not everybody's gonna want to do all those things. They just want to call a contractor, get a price and then, as I say that, they want to put a you know Boot on your neck the whole time. So you got to put some filters in place. That's one of the big things is like how are you saying no to the wrong people? Because you don't have enough time to physically say no to the wrong people. What a great problem to have is that. You know if, if people come to me a lot of time to say, sean, I need to work on my marketing, I'm like marketing is not your problem, you're not charging enough, you're not, you haven't identified the right type of projects. Because if we turn this Marketing machine up, you don't have the systems in place to say, no, that's gonna put you out of, that's gonna put you out of business.
Speaker 1:So one of the things I look for is is what we call the filters. How are you filtering out your leads and your prospects? Now, some of them you'll change their mind, meaning they probably come to you with the wrong mindset of what a contractor is. How should they operate? But because you've got a process dialed in and you've got it spelled out and it's very simple for them to understand. Some of those maybe potentially bad customers, you can transform them into great customers because of your process. But other than that, if they don't want to get on board with the process, I just say, hey, don't tell those. Tell those bad clients, hey, we're not a good fit for you, but don't worry, just keep calling contractors. Eventually someone will give you the price that you're looking for. Now. You won't get the project you described, the experience you described. Oh, you'll find the contractor. That's not. That's not a problem at all.
Speaker 2:It's um, it's unreal. Like I think back like when we started getting better at running the business and like I'm a huge fan of data now I think that is the most important thing across the business and we went back like we we had the data there. We'd just been doing nothing with it and like when we were, we were Basically tendering and pricing for free. We worked out that for I think it was like for an eight-year period We'd averaged um pricing with our average amount of tenders we've done each year was 43 and In that period the most jobs we ever done was 13. So like there was 30 jobs that we weren't. Like we're just wasting time and Now with the process we have now we're pretty much averaging sort of 14 to 18 People that go through our pack process, but we're doing 14 dating jobs.
Speaker 1:Yeah.
Speaker 2:Like it's and we're getting paid for the proposals, so and and and and our like our fee is quite high now because our process is very detailed, we get involved with all the design, in everything. But like I just feel value in every single part of my business now, like I'm not dragging my feet around oh, this client's wasting my time or this client's taking like just expecting to meet me after hours or on a Saturday. Like we are setting the standards and we're attracting clients that want to treat us or see us as a professional. And it's just incredible how it just doesn't change your business. It changes your whole life, change your mindset, change your confidence. Like it's huge.
Speaker 1:Yeah, like what you said was so key there about having the data to say, okay, we do 14 to 18 jobs a year, whatever. That is Like that's kind of our sweet spot. But you have to have the data that comes before you get a client, the way we define it. Before you get a client, you have a prospect. Before you have a prospect, you have a lead. And before you have a lead, you have people call them impressions or eyeballs.
Speaker 1:You gotta know what those numbers are so that in the day to day when you're getting all of those nos, it can feel really bad as a business owner, like, oh, that's another no. But when you understand that, like if we're doing 14 jobs a year, it means that we're probably having 50 conversations, which means we have 200 people seeing our stuff or interacting in that way, then it's like, oh wait, we need 200 leads that lead to 100 prospects so that we only get the right 14. I mean, if you think about that, it's like you need 200 conversations so you get 14 jobs. That's what. 186 nos that you're gonna get.
Speaker 1:So when you're on the phone or you're meeting with somebody and you're thinking, yeah, this isn't a good fit, instead of being kind of depressed about like, oh, there's another. No, it's like cool, that's what. I gotta get 186 of these in order to find the 14 that I need. It changes the mindset to be like cool as soon as you know it's a no. Or they say it's a no, awesome, I mean, provide them with value and help them out. But like get on to the next one, because that's another. Even though it's a no, it's a win. In your column saying the next one's out there and, based on the data, it says we need 200 of these to get 100 of these, to get 14 of these, you start putting those filters in place. As you practice that more and more and you realize, oh, I don't have to have a phone conversation with 200 people. I can send them a video or an email that describes the process and some of them right there, they'll unsubscribe, they'll delete, they'll never call you back.
Speaker 1:Yeah, so one of the things I was gonna say is, when you're practicing this and you decide I'm gonna start selling this process the first couple of times, then use the word normally.
Speaker 1:So you're talking to a client and you're nervous about explaining the process to a church and then just use the word normally and say normally we charge whatever for you, but for you we'll do something different and give them the choice right the first time. That's not about the money that you're charging, is about selling and all the process. So use that word normally and it's the law of participation if you like or need some, and you get the benefit of practicing that for the first time and say, hey, normally first $5,000 for this, but for you we'll do it for 2,500, blah, blah, blah, and you'll get the client go global and you're gonna add more value, a bunch of extra stuff for them, so that when you're done with them, you get them to say, oh, yeah, we call it 20 and you had this process, and they're not gonna say, oh, we're gonna be in the back of the house. I tell them. I say use the word normally, first tax for you. We'll charge $5,000 for you. Come on, buddy, because we like you, you're cool.
Speaker 2:Yeah, they like. So what do you like now you've got all these clients that you work with? Like what's the best part for you? Like what do you love seeing them improve their business? Do you love seeing them get more free time? Or like what's the driver that just keeps you pushing to keep improving your? What you're teaching them, I guess.
Speaker 1:Yeah, I get messages all the time from people I never even worked with about how profit versus change your life and it usually comes down to time yeah, time with the family being able to take a vacation and that kind of stuff and that's I mean I could.
Speaker 1:I could write to the sunset with those second messages, but what really gets me? I had a guy he just emailed me out of. We did a live last year in Austin, texas, and he was one of our members there and we covered a lot of business and stuff or whatever, and just dialed in what it is to run an actual business, what systems, what things you need in place, and he emailed me just a few weeks ago and said that morning at the event they found out that was like that breast cancer, so they were getting ready to go into this you know two year long or deal with life, life-lending stuff, and when he contacted me he said that it had to be in for some of the systems and the pay for planning and so the other things about their idea of man.
Speaker 1:He would have been ruined, but because he had these things in place, they were able to do that and for me that's like that's what's not. It's like life is gonna do some some rough stuff. One of the things they want to almost understand is all of it's how to be determined to run your business. That stuff in life is gonna happen and if you can step away from your business or have your business to stop supporting through that instead of having to go through this at the same time, that's what really helps me. Yeah, it's great that if you want money and better clients, you know we're getting higher and stuff, but I would say that life's gonna come and start to be a better business. I can't do anything about the life stuff but what we can do is do business.
Speaker 1:That's what motivates me. And in that story the guys wife went through treatment, she's doing great and all of that stuff and he was able to keep his business going and doing well at the same time and I'm sure he was saying that he was a systems he had in business and that's.
Speaker 2:I mean that's, that's not so well, imagine just the stress it would have taken off him knowing that the business was operating, it was profitable, like it, like it's plays such a massive part, like what I'm interested to see what you are and back you get over there. Like I know here the biggest excuse we get for people not taking the start of the jump to improve their business is time. Everybody says I just haven't got enough time. Like I just tell them you've got the time, you're just not prioritizing things.
Speaker 1:Yeah, yeah, I'll say that's the great equalizer between unsuccessful people and successful people. We all have the same thing that I, and it's just what are successful people doing that make it? When I'm saying successful, you can certainly have, you have people out there that make a ton of money, but their life is miserable. I'm not talking about what I'm talking about truly, as we call it your time, energy, money. The time is the way it was. Between all that and people have no say, a balanced life.
Speaker 1:I don't like that work life balance, but because there are times, we folks on the business, I'm going to get folks on the line and it's back and forth. So I don't think it's not all successful people that have great business, friends, boys, great clients. If you look at their calendar or you look at their schedule, they have priorities. This is what I do on Monday, this is what I do on Tuesdays, this is what you want Wednesday. I do this once a month or every couple weeks, and I do this quarterly and I would say your calendar should show a very good time for the life. I just do the same things and at this frequency and that all the way through success.
Speaker 2:It's structure, isn't it? It's structure, it's commitment, it's consistency. It ties into what we're just talking about with choosing the wrong client. If you're not structured and have scheduled and you value your time, those wrong clients are taking it all up and you're wasting so much time and that, where it comes back to prioritizing your time, I value my time enormously. It is the number one thing. We tell clients when they can meet me. It's not like, hey, let us know when you can meet and we'll see if we can fit it in. These are the times that I can meet you. If they don't work, we'll give you some more times, but you've got to value your time. That's probably the number one thing. If people can put some value on their time and start prioritizing their time generally, that is all what they need to take that step to start putting time into systems and processes and courses and all those types of things.
Speaker 1:That's right and that's a great example. We talked earlier about what are the filters you're filling in place? That is one of those filters that not only helps establish you as an expert for the clients, but that there is a process when clients like okay, cool, yeah, we'd like to work with you.
Speaker 1:We can come out here instead of just saying let me take a look at my time and say, oh well, great, we do appointments on Tuesday morning from 11am to 1pm or Thursday evening or Thursday late at 4 to 5. That's our appointment. That's a little filter. Someone says like, oh, I can't meet and work those times. Okay, well, let's take a look at the next week, on Tuesday or Thursday or whatever. Now you have to design your tax schedule. There's just a few going renovations. We're going to be meeting people's homes when they're there, so you might have to have your time. That's in the evening. But that's one of those ways to set up those filters. Okay, cool, there's our appointment times. Which one works best for you? And when someone says none of those words on me, then they're not ready to work with a professional because you can't call the doctor. You're like, hey, I'd like to swing by at my kids' office on Saturday.
Speaker 2:You're not going to do that. You're going to call the doctor.
Speaker 1:You're not going to speak to the doctor, you're going to speak to someone sitting at the front desk. They're going to give you the appointment times that are available. Sure, you can go sit in their office and wait all day. They're going to see you during a specific appointment time. No one would call a doctor and be like, yeah, I'm just going to cry why? Because they're a professional and you've got a appointment appointment with them. Contractors the same way.
Speaker 2:And a doctor just wouldn't take it, would they? That's the thing Our industry needs to up its game. Well, one of the things I say is it's okay to say no. You do not have to please every. You do not have to do what a client wants you to do Like it's your business. You set the rules. Yeah, I think so many people just well, you would know in our industry like they're chasing their tail constantly. They're stuck in that cycle. They need that next job to help pay the bills from the last one. So, like, as soon as they get a call from a client that wants to meet them on a Sunday, yeah, no worries, I'll be there, because they're having to survive off getting that job.
Speaker 1:Yeah, and that's the next one where you go back to the word normally hey, maybe it could be the right client and the right man for the right architect and the next project that takes you to the next level. And that person will be on Sunday.
Speaker 1:Yeah, I'm running out there, but it's because it cuts off these boxes and I'm just like, okay, normally making a performance during these times, but for you, we'll be happy to come out on Sunday and take a look at this, because we're really excited, because it's the right project, the right neighborhood, all of these things. You take it, you kind of deep, personalize the world with that and say this is why we're doing this special thing. And if we do the special thing, then you're going to be required to do some special stuff for us, pay us for all of that, but I'll run out there. And that's what the problem happens. Especially in home construction, you need to meet with someone personally. Those are much more rare than if you just said there's our appointment time so there's no more expense for you.
Speaker 1:You'll find that people this comes in at the prioritizing time that most people, most of your clients I'd say 99% of your clients are not on control of their own schedule. If you are a 1% that isn't in control, it's just easier to default to your schedule, and so that's why I guess all of our clients want the first little system in place with an automated account. Hey, you want to meet? Well, here's a link Any time that's open, and it's just easier if you're trying to submit the thing and make the appointment, just do the email and say something what about Tuesday at this time? What about Thursday at this time? Just submit an account number and right there, there's a process and it starts to say in rainy, fine.
Speaker 1:oh, we're dealing with a professional here, I can't put you around, and if we don't click that appointment, you've got to make it super easy for them. Click the thing that's free standard. Now.
Speaker 2:You're setting a standard for the whole process.
Speaker 1:Oh yeah, right from that, you run around it and make this appointment or whatever you're trying to do, and you're in the middle of the project. It's just going to go wrong. It always goes wrong. You're expected because from the very beginning, you just respond to everything. You're going to have to respond to everything that comes up.
Speaker 2:Yeah, that's such a simple thing. So we do a little bit similar to that. But my thing with that is if they, like we're really big on where we schedule our meeting, so like if we meet clients in the same area, we're not driving from one side of town to the other side of town, all those types of things. So like when we give them times, the times are based around when we're in their area, so we're not wasting time driving backwards and forwards all the time. It is the simplest things that can make the biggest difference, like those, just that alone. Like the other big thing that we tell people is you've got to set business hours. Like on email signatures and everything like when does your business operate. Like if you can't blame a client for bringing you at eight o'clock at night if they don't know the hours that your business operates. Like, come on, just put some business hours on there. It's simple.
Speaker 1:Yeah, well, also, you know, wind backs like you've got to give them, especially if you're doing a renovation, riveting the home and all these things. But you've got to set some rules for them. Hey, if it's an emergency, it's not if someone's believing you're something's on fire. Here's the, here's the emergency way of contacting them.
Speaker 2:Yeah, but that's it.
Speaker 1:If you contact us through this, it's not an emergency. You're just like we're not sure what. The paint touches me and that master bathroom. You've got to push back a little bit and say, hey, we'll do this on Monday morning. Don't do this again. This isn't. This isn't the way to do this, because if you don't set that barrier up, that's just the way they're going to do it. Even if you have other systems, you allow them to text you at 10 o'clock online. Then you've said, well, this is the system you can have and they will. Yeah, it will be like a view, but they'll just see it as a view. This is how we use this system and I can explain whenever I want and it'll respond.
Speaker 2:Yeah, yeah. So where's where's where you're heading from here? Like, what's the plans for the future, mate? Like you got the build built to build Academy. That's obviously going very, very well.
Speaker 1:Yeah, so we've got that up and going and doing that, for I mean, we launched the Academy in 2020 and March of 2020. So I had this great idea of like, okay, I'll go on one coaching, this group coaching and you know all these other things, and we'll launch it March 2020 and then the whole world, you know, shut down. Well, this, that was fun. One of that business, I guess might have to figure out something else to do, but I think we had already slashed some things up before the pandemic being online and being virtual. So this is actually really blew up in 2021-22. So what we're finding is we've approached more and more clients.
Speaker 1:The next thing that I'm working on is taking it more to the agency model. So we'll have the coaching, but one of the barriers that we're finding is to approach contractors. Okay, here's the system you're in place, here's how to do it and we've walked in through that. Sometimes they don't have the resources to be able to go and implement. So I'm working on building out all the operational systems agency and it's done for you. Like, the coaching is done with you. Right, let's hand it in, we'll walk you through, but it's really up to the client to go to the implementation and that's fine. That's what something can afford for their business.
Speaker 1:But I just see this opportunity to do it done before you want it and what that is like you before is an operational system agency. It's not like a bookie agency where you would send your bookie for your transaction and they go and practice those transactions and open your account and then give you some reports or whatever. We're doing the same thing with the contractors data to say, all right, your business is using data every day. You're going to send it to the data, we're going to analyze it for you and then build out your dashboard and then develop KPIs and the implementation. So that's really the test that I've been testing that out for some long, long time for the past couple of years and really ready to launch that. So that's pretty exciting. I have eight weeks of coaching One something that I kind of walk with you. If you need a hand and show you a coaching career, or you've got a app and operational implementation, okay, send it to us, we're going to do it for you.
Speaker 2:Yeah, that's awesome, man. Like the team is a big part of it, isn't it? That seems to be the next hurdle. There's a lot of people out there that want to get the help and put the time in, and then they struggle to like that's another big thing I go on about. Like you cannot do things on your own. Like you cannot run a successful construction business on your own.
Speaker 1:I find that every business owner that is successful meaning that they have some margin in their life, like a business doesn't take all of them, all of them. You'll talk to any one of them and I would say there's an inflection point where if they're the smartest person, they have the most experience and they have their hands in the most stuff. And then there comes the inflection point where they say I've got to find people who work than me. That doesn't mean that they have more experience.
Speaker 1:But so, for example, like you said, you're pretty skilled carpenter, guessing that it probably took you seven to 10 years to get to the point where you pretty much need everything about how to run a job and all of that.
Speaker 2:Yeah.
Speaker 1:Well, what I'm talking about is not someone smartly used, someone that maybe only has three years of experience, but they're better at one thing than you were three years in. It may not be smarter than you overall, but in that one area they're like a superstar compared to you. So when you look at successful business owners, they all have people where they can point to their like man, I'm glad I got that estimate. I was estimated to do everything like estimate that gap, that gap, those way more than I did. All they do is estimate, all they do is operations, all they do is management, and so when you see successful business owners, you'll see it seen and the owners will be like yeah, I'm a company person here, I just found people smarter than me and enabled them to do their best work.
Speaker 2:Yeah, you don't have to be doing everything, you just need to make sure everything's getting done.
Speaker 1:Yeah, you still got to own them. There's a whole other job out there. If you, when you get a really even a small group of really smart people, then your job changes. There's no longer a balance of protection. It's about the people development, because smart people are smart people and they always got opportunities for your job making sure they have the best opportunities here.
Speaker 1:And the crappy part about that is that you might provide really great opportunities, but really good also people. They move on. It's not. It has nothing to do with your business to have to do with that person and sometimes you're really good. People aren't a growth path that's faster than your business and that sucks. To lose really great people you have to think about man, if they go on to the level of success they're going to pull back to us as a stepping stone or the reason they were able to do that. Don't give your all to us to lose really great people. But sometimes really, they move on because you're just a step in their ultimate success, which is going to lead to other employees, because they'll hear what they have. How did that person be there? Oh well, I spent three years working for me. That's where you need to go. People that lead become your best recovery tool.
Speaker 2:I think that's that still sucks.
Speaker 2:It always sucks, but I think that's been a big mindset shift for me in the last few years, like that. But I encourage that now. Like I encourage people to learn and ask me questions and I'll help them out with whatever they need to help. And if they want to go out on their own, that's fine and exactly what you say, like those people will tell other younger people that want to come through and they want to learn from us. So you end up getting a culture of this awesome team that is always growing and improving things and like if you're to me now, like if you're attracting those types of people that are on that growth rise and want to keep learning, they're going to make your business better and better Because as they're growing, your business is improving. So it's a win-win for everyone. It is a bit of a pain in the ass every time you got to find the new one, but it's not a bad position to be in when you're attracting people that want that growth.
Speaker 1:Yeah, I don't know who you originally said that, that you know you're on the same train and you're putting in a constant place and getting to system style. Then you know and really well, and then they leave and I'm like, yeah, that sucks, it would be the alternate of that and I didn't come up with this. It's like, well, what if we? You know, the question is, what if we frame them and they leave? But the other side of that is like what if we don't tell you when they stay? Right? So I want to, I've got to have the other like hey, I was looking. You can look at employees and say like is this person a franchise player or are they an all-star? And they both come from the pluses and minuses. Some people just want a good job, they want a good culture, they want a good cost, they want, they want some opportunity and they will be with you forever. And most people are great. And some people drop in your business for two years, three years, and then you know they're like they're going to be gone.
Speaker 1:And that's fine too. I want both. I want my franchise players and I want my you know, my free agents to be, because both of those affect the business in different ways. Just have it. Not everybody's a franchise player, but not everybody is going to be a free agent, and just you know, hop around and you just kind of have to learn to balance that a little bit and just say like, yeah, I want people.
Speaker 1:If they need to, I want them to leave and go have more success. You know that that will circle back down to me.
Speaker 2:Yeah, 100%, mate, we'll. We'll have to wrap it up. I'm sure you got stuff to get on off and start your day over there. What? It's nearly seven. Seven am in the morning.
Speaker 1:Yeah, seven am is the dog Start running around here and then it kicks off the school and then it will quiet down for a few hours.
Speaker 2:Yeah Well, mate, look I could definitely. It's nine pm here, I could talk all night. So thanks so much for taking some time out this morning and starting your day by having a chat to us and really appreciate your knowledge and your time. And definitely, obviously, the profit purse for contractors played a big role in the way we run our business for four odd years ago. So, mate, look forward to seeing all your success in the built built for Build Academy growing and expanding and, yeah, hopefully we can have another one one day.
Speaker 1:Yeah, absolutely. Thanks for having me on.
Speaker 2:Cheers mate, Enjoy your day.
Speaker 1:You too.
Speaker 2:Everything discussed during the Level Up podcast with me, dwayne Pearce, is based solely on my own personal experiences and those experiences of my guests. The information, opinions and recommendations presented in this podcast are for general information only, and any reliance on the information provided in this podcast is done at your own risk. We recommend that you attain your own professional advice in respect to the topics discussed during this podcast.