7 Steps to Create a Home Improvement Business That Works FOR You

I don't care about revenue. I don't care how much you sell. I want to know how much you make. I want to know how much you take home. Are you building your personal wealth from your business? Instead of just saying, well, we did $10 million this year, we're going to do $12 million next year. Really think about what do you want from your life? What do you really, really want in terms of time, money, freedom? Write it down and then create some sort of system to remind yourself every day what you are working for. Have you ever felt like there's a secret club of successful contractors and you're left outside? Want in? Well, you just found the entry door. Welcome to the Wealthy Contractor Podcast. Each episode, we pull back the curtain, revealing the stories, strategies, and secrets that top leaders use to grow their home improvement business and enjoy more success, more wealth, and more freedom. Discover more at thewealthycontractor.com. Now let's get into today's episode. Hey everybody, Brian here, and I've got a special episode of the podcast for you. A few months back at Qualified Remodelers Top 500 Live, I presented the 7 Steps to Creating a Business That Works for You. And recently I asked the publisher, Patrick O'Toole, if he wouldn't mind my releasing it as a podcast episode. And I think it's valuable. I think you're going to find a lot of good stuff in it. So Enjoy. And until next time, this is Brian Kaskavalciyan and this is The Wealthy Contractor Podcast. So let's talk about your business working for you. Are you working for it? How many of you would say that your business works for you? Show of hands. Your business works for you. Here's the question a little more clearly. If you left your business for one month, one month and no communication with your business, Would you come back to more success, more wealth, and more freedom? Raise your hand. Who's in that position? Okay. I can barely see. So I'm gonna assume some of you. And so good for you because the business should work for you. And so today what I want to talk to you about is how do you create a business that works for you? I'm gonna show you some of the exact frameworks that we use our clients to help them create super profitable businesses that work for them. If you model success, I'm a big believer in modeling success. And so if you take some of these models and implement them in your business, ideally, the idea here is to create more success, more wealth, and more freedom, whatever that means for you. All right. So just real quick about my background. I started this company, G4 Marketing Group, back in 2009. I've known Charlie for 20-something years and God bless him. He was our first client and introduced us to a whole new world. But over the years, we started that in '09. And over the years, I got to meet a lot of you and I got to go behind the scenes of your businesses. And I noticed a couple of things. One thing that I noticed is that, A, of course, there are certain models and frameworks that create success in these businesses. The other thing that I saw was not a lot of people were using them. Good people, hardworking people. I really, I mean, look at The Wealthy Contractor. The number one thing we believe in is you. Right? You guys are the hardest working people I know. I met so many good, decent, hardworking people that were building businesses, but they weren't making the money that they should have been making. They weren't getting the freedom out of the business that they longed for, that that was the reason why we went into business in the first place was so that we can experience freedom in our lives and we can do what we want, when we want, with who we want. Where we want, right? I discovered that there is a dirty little secret in our industry. Some of you may know this. What is the dirty little secret? Dirty little secret is there's a whole bunch of companies that do millions and millions and millions of dollars in business and yet make very little profits. In fact, our friends at Dave Yoho Associates did a survey. Now, I wasn't shocked at this, but I was shocked at the same time. 41% of companies surveyed made a pre-tax profit of 3% or less. To me, this is like absolutely unacceptable. You work too damn hard to accept 3 points to the bottom line. It's like you're working for pennies. As I started to notice the commonalities of what the most successful people I started to talk to them and interview them. I wanted to learn about, well, what is it that made you successful? And so I started the Wealthy Contractor podcast. Does anybody in here listen to the podcast? Cool. A few of you. Great. I even, I wrote a book. Wealthy Contractor became something that I had no idea it would become. But we provide resources and tools for you guys to help you make more money, experience more freedom, and create a business that works for you. So I want to talk to you about some of these things. There's 7 steps I've discovered, and some of them will be very familiar to you. You just heard some of them from Charlie. You heard some of them yesterday from John Anglis. And I, again, I think that repetition is good. I think it's good to hear the same things over and over and over again. And for those of you that listen to the podcast, You know, you hear the same things over and over and over and over again. Success leaves clues. And so the most successful people I know learn by coming to events like this, by listening to podcasts. I mean, look, how many other people were invited to come to this event? Thousands, like literally thousands. And you guys showed up. So you guys are here because you want the edge you want to learn about. And you've gotten a ton of stuff this morning. Tony and Megan are best in the business here. John is like the best in, in his business, Charlie. So hopefully I'll be able to give you a couple of things that maybe you can put on and might make you think a little bit different about your business. So let's go with the 7 things. And I obviously got to run through these pretty quick. So step 1 is clarity of outcome. Clarity of outcome. Most contractors don't start planning their business for what they really want, for what they really want. And then they get to the end of the year and they wonder, well, how come I didn't make the money I wanted to make? And how come I'm not any further ahead than I was a year ago? In order to get what you want from your business, I'm absolutely convinced you must focus on profitability. Now, I for years was a— was like a lot of other contractors. I focused on top line revenue, revenue, revenue. If we sell enough stuff, there's got to be some profit left over somewhere. Then you get to the end of the year and you realize, oh crap, we sold a whole— I mean, I grew a business 20 years ago to $11 million. I had a horrible profit model. Horrible. We made no money, but we did $11 million. Today, I don't care about revenue. I don't care how much you sell. I want to know how much you make. I want to know how much you take home. Are you building your personal wealth from your business? So do this instead. Instead of being focused on the top line, instead of being focused on, you know, we're going to talk about planning here in a second, but instead of just saying, well, we did $10 million this year, we're going to do $12 million next year, really think about What do you want from your life? Like, what do you really, really want in terms of time, money, freedom? Write it down and then create some sort of system to remind yourself every day what you are working for. Do you want to live in a new house in a better neighborhood? Do you want to travel? Do you want to have fun? Do you want to send your kids to the best schools? Do you want to be able to take 4 weeks off of vacation a year? What is it that you want? Start with that. What do you want? I ask people all the time, well, you know, what do you want to do with your business? Well, I want to do $10 million. Horrible answer. Why? Why do you want to do $10 million? Well, you know, it's a good number. It's a round number. I mean, seriously, these are the answers I get. You know what's a good answer? Brian, I want to make a million-dollar-a-year income. So that I can move my family into this particular neighborhood. So me and my wife can go travel. We can sit in the front of the plane instead of the back of the plane. I can contribute $400,000 into my future wealth, into my retirement or whatever, you know, build my future wealth. I have a couple hundred thousand dollars in debt. I want to pay all of that off. And so that's how I'm going to use the money. Great. That's something we can get behind. That's something we can build a business around. Telling me you want to do $10 million. I don't care. You want to do $10 million. I want to know why you want to do $10 million. I created an exercise. I'll give you access to this stuff. This changed my life. I had an income goal for years and years and years. I had this goal. But why? Why did I want this? I never laid it out. I never thought about it. It just was a nice number. Then I broke it down. I actually spent the money. And I figured out how I'm gonna spend the money when I make it. Guess what that did? That got me excited. That got me motivated. That made it real in my mind. In 18 months, I quadrupled my income. This changed my life. So if you scan that barcode, I'll, I give you the worksheets and I walk you through it. So now, You have a number. Now we got a goal. Now when planning for this, most contractors start with just their revenue number, just like I said, right? Start with, well, I want to do $10 million. Then they try and shoehorn in profitability because they don't understand how profitability works. And look, it ain't your fault because nobody taught us how to make money in this business. Sorry. Some of us were lucky and learned along the way, but I didn't learn for years how to make money. I went broke. 'Cause I didn't know how to make money in this business. I knew how to sell. I knew the crap out of marketing. I was damn good at that. But I didn't understand profit model and profitability. So again, most contractors are just going for this revenue number, trying to shoehorn in profitability, get to the end of the year and it's like, well, you know, we did okay. We, you know, we did 8% profit, we did 6%. But next year, but there's next year. It's always next year. Next year's gonna be a repeat of this year with that thinking. So do this instead. Begin with the end in mind. Have a profit target you want to go to. Revenue is only a function of the profit target that you have. So determine what your business needs to look like. It's not that hard. Make sure that you're focused on profitability, not just revenue. So we have a tool for this. Reverse engineering. How do we do it? We begin with the end in mind. So we choose a profit model. Bob Cohen, is Bob in the room? 20% profit. John Anglis, 20% profit. Kolbaska. I mean, I can— there's a whole bunch of people I can line up here that run a 20% model. If you've never done 20% before, start with 15%. Here's how you do it. So now we say, what's our number? How much do we want to make? In this example here, I want to make $500,000. Great. On a 15% model, That means that we've got to do $3.35 million in revenue. And then with a little math, we know how many salespeople we need, how many jobs we need to sell, how many we need to install, and how many leads to issue. Is this a perfect system? No, but it's a damn good starting point. It's a damn good starting point. With this information, now we can make decisions. With this information, now we can create a plan. Step 3, most contractors have a plan they might be working towards, but who else is involved? Who else is involved? So I had a conversation with somebody recently and it's like, okay, I want to do $10 million. And they were like, they had this whole thing laid out. It was a horrible plan. I told them not to do it. We scaled it back anyway. But I asked him, who else knows about this plan besides you in your organization? Nobody. He was the only one that had this goal. Did he have a chance in hell of getting there? No. That's why we had to rein him back in and say, okay, well, let's go back. Let's start with this. Let's start with, well, how much money do you want to make? And then let's figure out the business you need to do that. When you share this information with other people, are they bought in? Are they bought into your vision of where you want the business to go? And by the way, money alone and profit alone is not a great vision. It's not a great vision. Is anyone, including you, being held accountable for results? Angus yesterday said only what's tracked and measured gets accomplished. Charlie just said something very similar. Only what's tracked and measured gets accomplished. So when I was building my company, yeah, we had these goals and we had these ambitious goals and we're gonna grow and we're gonna grow. But did we have a scorecard? Did we have people accountable to hitting targets every single month, every single week? No. It's no wonder I went broke. So once you have a plan, you got to convert it to a scorecard. Now I'm going to give you a simplified version of this just for demonstration. So you've got your net profit target of $500,000. Let's say you're doing a 15% model. If we know that, then we know what our target revenue is. If we know what profit margin we should be at, and I'm just here in this example, I'm using 50%. John yesterday talked about 55%. It's a little bit different. You just got to decide on what yours is. But on this one, I'm just saying 50%. If we know your job average is $10 grand, and at $10 grand you achieve a 50% gross margin, then we know that we've got to sell and install 335 jobs. In order to sell 335 jobs, knowing what our close rate is— in this example I used 30%— we know we need 1,117 issued leads in order for all the rest of this stuff to happen. So then we take those numbers and then we say, okay, we divide. Now this is a simplified, we don't do it this way because there's different weights to different quarters, but I just wanna keep the example easy, okay? So I take that number, I divide it by 4. So now I know what quarterly performance looks like. So there's our target revenue for the quarter, there's our target net profit, there's our target gross profit, the number of jobs that need to be sold, installed, and the number of issued leads. Then what do we do? Then we take that and we break it down into weekly targets. Every quarter has 13 weeks. By the way, all my companies run on EOS. All of my most successful clients that I work with run on EOS. John mentioned the book Traction yesterday. EOS is, uh, is out of that book. That's the system that he talks about in that book. So now we know what our target revenue is for every week this quarter. We know what our target net profit is, our gross profit is, the number of jobs we need to sell and install, and the number of leads we need to issue. Now that we have those targets, now we need accountability. By the way, again, this was missing in my company. We would get to the end of the month and we would wonder, why didn't we make any money? Because we didn't hold anybody accountable to these targets. So in every organization, somebody has to be responsible or accountable to those numbers every single week. In EOS, there's a thing called the accountability chart. I took that and I created it for this business, for the home improvement industry. But who is accountable for leads? Who is accountable for sales? Who's accountable for profitability? Somebody has to be profitable. By the way, ideally it's not you in every single box. Now, you could start that way. So when we implemented EOS in our company, me and my business partner, who's my wife, Addie, we were in every single box. But slowly we started to replace ourselves in each of the boxes. So you can start off being that, but you gotta have the goal or the result that you want is I need to put people into these boxes and hold them accountable for these results. Every week we wanna know, are we on track to our goal or are we off track? When do you wanna know that you are are not going to hit your target as soon as possible. Too many people wait until the end of the year. They take all their shit to the accountant and they say, hey, you know, here's all the stuff, tell us how we did. Not a good system. I want to know Monday morning whether or not we're on track or off track for this quarter. If we're on track, great. Are there any issues we need to deal with? Is there anything? Great. But if we're off track, where are we off track? Did we not hit our leads number? Did we not hit our sales target? And then we gotta dig in and we gotta figure out what's the issue. And we gotta solve it when? Now. Now. 'Cause look, ah, we're one sale off this week. So instead of doing the, what was the number, $64,000? Okay, this week we did $54,000. We'll make it up. We'll make it up. It's okay. Next week, we miss it by 1. Now we're off by 2. Pretty soon you let that behavior keep going and where are you? You're way off your target. Happens every single day in most businesses because nobody is being held accountable to the results. Now, I say in the EOS process, you got to have a weekly meeting. It's called a Level 10 for those of you that are familiar with EOS, but you guys can do this even without EOS. Every week you have a meeting and you sit down with the people that are accountable and you go through the scorecard. Are we on track or are we off track? And it's just a yes or no answer. Yes. No. If it's a no, then it gets put aside to come back to after you're done with the scorecard to talk about solutions. Again, you don't need to implement full-on, implement EOS to do this. You can do this right now. And by the way, if it's just you and you and you, Guess what? You're holding yourself accountable. That's how it starts. Now, most of you all have teams, but do you have people that you can put into the buckets? Do you have people that you can have this meeting with? Shockingly, a lot of people have, oh, we have salespeople. Well, but who's accountable for sales? Well, that's me. Okay, well, that's fine. But now you have to hold yourself accountable. So I say there's two essential time blocks that you need to have in your schedule every week. The first one is this meeting, whatever you guys call it. And I suggest doing it Monday. Why? I want to know as soon as possible, are we on track or are we off track? Step number 4, most contractors allow others to dictate their work and their schedule. Sound familiar? This was me for a long time. When you do this, this makes you reactive instead of proactive. You are working to other people's agendas, not your own. And so they spend— they end up spending their time in the business rather than on the business. By now, do we all know the difference between in and on? So do this instead. I'll tell you what the difference is. Determine where your time, talent, and energy is most needed for your business to achieve your desired outcome. Here's a hint. Working on the business means you are working in an activity that will give you leverage. Leverage. So, for example, Megan with her scripting, right? So a high-value activity that gives you leverage as an owner is inbound scripting. Phone rings, how is that phone answered? Who answers the phone? What do they say? How efficient, how effective are they? So if you tweak your scripting and you get an additional point, so instead of setting 80%, you set 81% or 82%, that's a leverage activity. Because once you're done spending the time on that, and you implement it, it pays you week after week after week after week. And in the business activity is, for example, running a lead. So you run a lead, it takes you, say, 3 hours, 4 hours with drive time. That's it. That 3 hours, there's no leverage in that. You got a deal at the end. Yeah, but there's no leverage in the time that you spent. I hope that makes sense. You want to eliminate your low payoff activities as quickly as possible, and you want to stay Start thinking in terms of who, not how. Who, not how. There's a great book, by the way. I put it big up there. Basically, I love Dan Sullivan. He was one of my mentors for many, many years. It's a great concept, but you just got the whole book. Okay? It's really good because the book is, well, anyway, it's a great book. But you always want to be thinking who, not how. Who, not how. I was just talking with Blaine in the hallway. And it's like he said, yeah, I'm hiring people that are better than me. You know, name it. Too many of us get our ego wrapped up in, well, nobody can do that as good as I can. That's what held John back for years. By the way, I've known John for— he's one of my best friends. I've known him for, what, 12, 14 years now? All that stuff that he was showing you yesterday and all the things that he was saying, it's worse than what he said because he doesn't remember how bad he was. I'm good. I'm better than everybody else. He's not here, so it's okay. I can say how many of you are like that? How many of you are more consumed with your ego than you are with your results? Sorry, but that's us. That's who we are. We're driven entrepreneurs. Nobody can do it better than me. Oh, yes, they can. And by the way, when they do, it is the happiest day of your life. You find that salesperson or that sales manager that's better than you. Oh, that's the best day of your life. When I met Big Pete out there, G4 Marketing. Oh, it's the best day of my life. I don't have to do sales anymore, and he's better at it than I am. Highest and best use of your time. So again, we've got a worksheet for this, but what activities give you the most energy and bring most value to your business? How much more money would you make if you spent 80% of your time in high-payoff activities? A lot more. So this is what you want to aspire to. I don't do a lot. I get a lot of people to get a lot done. I think I got that from Brian Elias. I don't do a lot. I get a lot of people to get a lot done. That's your goal as the owner. Number 5 is focus on progress. Focus on— so one of the frameworks that we teach is this one. It's called the— I call it the Wealthy Contractor Success, Wealth, and Freedom Framework. So in order for you to get what you want, you have to master these 3 things. Now, too many contractors are too busy and too tired to stay focused on what matters. To gain the freedom and the wealth and the success you crave, you must take control of these 3 things: your people, your profit, and your process. People, profit, and process. Do this instead. So every single week you have a singular focus. Bring in the money. Bring in the money, okay? Ensure the right number of leads are being issued. Ensure those leads are being converted into sales at the right price. At the right price. I think Bob talked about this yesterday. John talked about it. Charlie talked about it. Everybody talked— gotta get your price right. Create raving fans. Ensure all jobs are being installed properly and customers are receiving a 5-star experience. Continuously be recruiting so you have the right people in the right seats and then count the money. Never lose sight of the money. And when I say count the money, count your profit, count your profits. Okay. And oh, by the way, take it out of the business so you build your wealth outside of— there's 3 ways to get rich from a home improvement business. So one of the things is you've got to take money out of it and you got to build wealth and build assets and capital outside of the business. Okay? Don't leave all of your money in the business. I see too many people do this. Anyway, so focus on profits. Number 6, eliminate roadblocks. Most contractors are so wrapped up in the day-to-day of their business that they have no control over their time, and so they don't have control over their results. So their time is spent putting out fires rather than eliminating the roadblocks that are in the way of your business being what you want it to be. So do this instead. Remove yourself from your business at least half a day a week, at least half a day a week, and work on only your high payoff activities. You want to use this time to solve big problems and issues, to capitalize on opportunities, assess threats, and of course maximize profitability. This is the second block. And I think middle of the week for this block is, is best. Half a day. Completely disconnected. I call this my library strategy. I think I've got a, if you reach out to me, I can point you in the right direction. But here's basically what this is. And the reason I call it library strategy is because when I started doing this, that's where I went. That's the Huntington Beach Public Library. Why'd I go to the library? It's quiet. Nobody bothers you. But no phone, no internet. You don't need it. All you need is a pad of paper to start with. By the way, it's one of the hardest things you will do because your mind will mess with you. It will call you names. It'll tell you you're a loser. It'll tell you to get back in your truck and get your ass back to work. What it doesn't realize is that the work that you do during this time is the most valuable work you will do. And again, what are you doing there? You're thinking. You're using this time to think, to plan, to strategize. Henry Ford said, thinking is the hardest work there is, which is the probable reason why so few people engage in it. I love that quote, and it's absolutely true. And then finally, step 7 is work on yourself. Most contractors ignore the power of mindset in relation to success. Those of you that have been to any of my events or listened to the podcast, you know I'm big mindset. I am absolutely convinced that success is 90% mindset and 10% skill set. You can buy skill set, you can model skill set. What nobody can do for you, what only you can do for you is control your thinking and your beliefs. It's the hardest work you'll do. This is where you want to spend your time. You work on yourself. You want to be rich? You want to be a millionaire? You got to be a millionaire first. Jim Rohn said, become a millionaire not for the million dollars, but for what it will make of you to become a millionaire. You won't become a millionaire until you change here. I don't care how hard you work. I don't care how hard you try. It took me 48 years to figure this out. And if I can help anybody with their learning curve and just do it even a year earlier or 5 years or 10 years earlier, I'm a slow learner. Took me a long time to figure this out. I don't want that for anybody else. So stand guard at the door of your mind. Don't allow the negative crap in there. Don't let it allow, you know, push you to do things that are not good for you, which it will do. Why? Because it wants, you know, your mind wants to keep you safe. It likes to be comfortable. You got to get outside of your comfort zone a little bit. You've heard that before. It's cliché, but it's absolutely true. I'm sorry. Spend time every day working on yourself. What are you reading? What are you listening to? Who are you talking? Who are you surrounding yourself with? I am so fortunate. I surround myself. I'm surrounded by such amazing people. The conversations we have, like DJ's here somewhere, came up to me yesterday. We had a quick little conversation. He's like, look at my, you know, showed me his net profit. I'm like, so exciting. We were talking about the changes he made and the things that he did and what he's learned about himself. You ask him, go to DJ, go to Tim Brown, go to John Kolbaska, go to a whole bunch of people and ask them what changed? What changed? I changed. Then the business, everything else changed around me because I went to a new place. I went to a place that most people won't ever go to because they're not willing to do the work. Do the work. Do the work. So I was going to say it's like a muscle that's got to be worked out and it's got to be developed. So some things to ask yourself. What are you doing every day? So John's presentation yesterday was amazing. These are the 8 things he showed you. These are all the things to go and do in your business. Ask yourself, is what you're doing reactive or proactive? Are you working in the business or on the business? Is what you are working on, is it something that gives you leverage in your business? Is it a multiplier? Is what you're doing giving you more life or less life? More life or less life? And then who are you being? A lot of what I'm talking to you about today is about being. Who are you being? Are you being a salesperson or an installer? Are you being a fireman? We're damn good at— we have some unique skill sets as entrepreneurs. One of them is solving problems. We are firemen and firewomen. We are damn good at it. But guess what? If you allow yourself to be a fireman, what's going to happen? Everybody around you becomes dependent on you. Every problem, every issue requires who? You. You want them to be independent. You want them to be on their own. You can't be their fireman. They have to be their own. So at the end of the day, You have to work less to make more. You have to work less to make more. By the way, although I'll use DJ's example again, because it's very fresh. His profits are way up. Business is way up. He's got better control over his business and him and his wife are out in their RV having fun, driving from place to place. All while all this other stuff is going on in the business. Does his business work for him? Damn right it does. Damn right it does. And again, I could line them up here. I can put Angus up here. Charlie Nadell figured it out. I can line up 2 dozen people here. One of my clients, a guy, John O'Leary. By the way, this has nothing to do with me. This is all about them. They took what they heard and they implemented. If you're interested in getting more reviews, referrals, and relationships with your customers, go see Pete and Dustin at G4. 4 numbers exercise. If you go out to the G4 booth, there's, uh, QR codes for all this stuff over there. If you want a copy of my book, The 7 Secrets, use that QR code. Thank you so much. Listen, focus on profitability. If you, if you are not killing it right now, making more money than you've ever made, something's got to change because it's not always going to be like this. You work too damn hard to settle for anything less. So good luck. I believe in you. Have fun. Hope you enjoyed this week's episode. For insights on skyrocketing your home improvement business and accelerating your journey to the success, wealth, and freedom you've always dreamed about, be sure to get your free copy of my bestselling book, The 7 Secrets to Becoming a Wealthy Contractor, at www.thewealthycontractor.com. And don't forget to follow us on your favorite podcast platform so you never miss an episode. See you next time.