Brian K. - Ep.40 - Taking Control of Your Time, Money, & Freedom

This is the Wealthy Contractor Podcast brought to you by G4 Marketing. Interviews with today's top home improvement entrepreneurs about marketing, sales, money, mindset, and lifestyle. Now here's your host, Brian Kaskavalciyan. All right, welcome to episode 40 of the Wealthy Contractor Podcast. This is Brian Kaskavalciyan with G4 Marketing Group. And, um, you know, I gotta say, I've been traveling like crazy the first few months of this year. Bunch of cities and a bunch of events. I, I really appreciate it when, when you guys come up to me and tell me about your experience with the Wealthy Contractor Podcast. It seems like at almost every event, somebody will come up to me and and say, hey man, I listen to the podcast and I, and I really enjoy it. And that's great. I mean, I'm doing this for you. This is not about me. This is really all about you. And it's about helping you grow your business and introducing you to people that have been where you are, that have done what you're doing, and, you know, have gained some level of success, whether it be personal or professional or financial. And so I thought for the 40th episode that I would include a clip from our Accelerate Live event that happened here in February. This clip is really all about time and money and freedom, because that's what business is about. That's what our businesses are are really for, is to give us time, money, and freedom. Hope you enjoy it. Thanks for sticking around for so many episodes. It's really motivating and kind of exciting for me to get your feedback because quite frankly, this takes a lot of work to put together. And when I get good feedback from you guys, it really motivates me to want to do more and provide more episodes. So with that said, Let's get to episode number 40. Why did you go into business for yourself? From my experience, it all breaks down to we all wanted some level of freedom. For me, for me, it was about time. I didn't want somebody else telling me, you know, where to be. Yeah, somebody told me I have to be at work every day at 8:30 in the morning or 8 o'clock or 7:30 or 10 o'clock. I would be late probably every single day. It's just not me. Now, a lot of us are unemployable. I mean, that we have to, like, I mean, you know, that's like an underlying truth here is that. But yeah, time was a big thing for me. I don't want anybody telling me how to use my time and where to be. Money was a big thing. You know, money was a big thing. You can, as an entrepreneur, you can make as much money as, you know, the marketplace will allow you and your, your mindset will allow you. Relationship. It's time, money, relationship, purpose. These are kind of the four main, I think, reasons. There are probably some others, but I think just these are the main ones. Relationship. Like right now in my business, if I don't like somebody, I don't have to work with them. If I worked for somebody else and they put a client in front of me and said, you have to work for this person, and I didn't like them, what would I have to do? Have to work for them, right? I don't have to do that today, and that's important for me. I get to spend time with people like you, right? I get to decide who I want to spend my time with and how I get to spend my time, and that's important to me. And then purpose. I know a lot of you have a bigger purpose outside outside of the business, that the business funds whatever that is. I know some of you go on mission trips. I know some of you are heavily involved in your church. I know some of you have a hobby that's really important to you. So I ask you, how is it going for you in those four kind of key areas? A lot of times we kind of forget why we went into business in the first place. And if we think about what the underlying freedoms are, that would help us establish better goals, right? Instead of saying, well, this year I'm going to do $7 million. Okay, why? Why are you going to do $7 million? Just to say I did $7 million or to do $7 million so I make $700,000 so that I can take my family on a vacation, so we can buy another bigger house, so I can put people in and systems in. Whatever those reasons are, they're going to break down to probably one of these 4 key areas— time, money, relationship, and purpose. But business has a funny way of taking on a life all of its own. And if we let it, it will take us over. And instead of us controlling it, it will control us. Instead of us being the master, we become the servants. And so I want to help you be aware of that moving forward. So I put some questions up here. Do you work for your business, or does it work for you? Do you control it, or does it control you? Does your business rely on you to operate, or does it rely on systems? And the big question is, does your business afford you the freedoms you wanted when you started? How many of you would say categorically yes, it does afford me the freedoms I wanted when I started? That's about a third of the room. Now, I've lost sight of this at different points in time. And what I'd like to do here for the next few minutes is I want to help you get back aligned with why you were in business in the first place. Because here's why. Because no discussion of profit and growing your business and getting more leads and making more sales and hiring more people and all this stuff that we've got to do to grow companies means anything if there isn't some sort of underlying, why am I doing this? What do I get out of it underneath? Does that make sense? So a lot of times people get kind of get mixed up with why a business really exists. And people think that your business exists to provide jobs or to pay taxes or to support the community or to support and improve your customers' lives and improve your employees' lives. It's my contention that unless it's doing its true purpose, which is satisfying your needs and funding your ideal lifestyle, it can't effectively do any of the others. So think about it. If providing jobs to the community is important to you, Are you more likely and more able to do that if the business is satisfying your needs and it's giving you the ability to live the life that you want to live? How can we support our communities if the business doesn't give us what we need? How could we effectively go out there if we're stressed out about how we're going to make payroll? If we're stressed out about people, having the right people doing the right jobs, how can we improve our customers' lives if we barely have any money in the bank and we're scrambling to sell the next job to pay for this one? So it's not to provide jobs. That's not the purpose of your business. That's not why it exists. Now, it may do all of these things, and a good, healthy business will do these things, right? It will provide jobs to the community. It will improve customers' lives. It will improve employees' lives. But only, only if it satisfies your needs first. It's okay to put ourselves first. It's okay to want what we want. I know that's not a real popular thing to say, especially nowadays, but you know what? We're entrepreneurs. That's how we're built. It's okay for us to want the things that we want. Of course, if they're acquired and done legally, ethically, morally, that's all without saying. So what I'd like you to do is take a couple minutes here and thinking in terms of time, money, relationship, and purpose. What are the real reasons? What are the real freedoms that you got into business for? And again, they can be personal, professional, financial. What are the real freedoms? What is it that you really want to get out of your business? So the freedoms that you list out here, these are the things that, these are the things that are worth fighting for. These are the things that are worth working hard for. These are the things that get you motivated and excited. Excited. So what is the annual profit that your business needs in order for you to achieve all of the freedoms that you just listed? So what I'm asking you to do is kind of think backwards. You know, a lot of times in this business we come to things like this and you talk with people and, you know, the first thing that comes out of people's mouths is, oh yeah, we did $8 million last year, and we're like, Wow, you did $8 million? You did $50 million? You did $20 million? And I had a conversation. I'll tell you, I'm going to give you a couple of conversations. But I have conversations with clients and I ask them, well, what's your goal for next year? And they'll give me a number. I'll say, why? Why do you have that goal? And a lot of times they can't— it's just the goal is just— it's just a number that's there. I think to me it makes a little bit more sense for us to have kind of an underlying why. Why are we doing this? Why do we need to do— why do you need to do an $8 million business? You know, in home improvement, $8 million, that's what, 1,000 jobs a year, right? 1,000 jobs a year. It's a lot of work. It's a lot of moving parts. And the worst part is if it doesn't make money, that just adds insult to injury, right? So the idea here is that your business is a vehicle. Your business is a vehicle to get you to what you just wrote down, the freedoms. Now you get to choose the type of vehicle that you have. But the beautiful thing about it is you get to choose. So when we talk about profit, what is profit? Profit is the fuel for the business. You want a high-performing business, you need high— well, high performance, you need high-performance fuel, right? You want a high-performing business, you got to make money. Now, for some people, this is like a foreign concept because they're so stuck on the top number Instead of being focused on the real number, the only one that matters, the bottom line. So profit in this room is not a dirty word, at least not in here. Maybe out there, but not in here. I want to help you become more profitable. Okay, so why? Let's be clear, it's fuel. Without enough of it, You won't have enough money to effectively market your services. Is lead generation getting more expensive or less expensive? More, right? So if you're not making enough money in your business, how are you ever going to compete? You won't have enough money to hire great people. Notice I say great, all caps, great people. How many of you strive to hire mediocre people? How many of you have a bunch of mediocre people working for you? Yeah. Great people take money. You gotta make money. By the way, great people, great people can sniff out a company that's not doing well, that's not making money, that's unstable. They will not be attracted to your business. You won't have enough money to deliver your customers the experience they deserve. You won't be able to give your family the rewards that they deliver, or your stakeholders, whoever they happen to be. And you won't have a solid foundation for the next 10 years. We all need Like I said earlier, we all need to develop that foundation now. Some of you have already done it or are there, but a lot of you aren't. You need now while things are good to build that solid foundation. So what are you focused on in 2018? Are you focused only on sales growth or are you focused on bottom line profit growth? See, I think you work backwards. You think about how much money do I want to make, and then you run your calculations that way to see what your business needs to do in order for you to make that money, right? Remember, what you focus on will expand, and your results are going to follow what you focus on. So if you're only focused on sales growth Yeah, you'll get your sales growth, but I think you need to focus on the bottom number. That's the important number. This is a new minimum acceptable profit standard, 10%. There's a great book. I actually interviewed the author on a podcast recently. It's called Simple Numbers by Greg Crabtree. In his book, he makes an argument for and proves to you why, or all of us why, 10% is the new breakeven. If your business is not making 10% net profit, you may be, you may be a little bit in trouble. You just don't maybe know it yet. 10% is the minimum acceptable standard. Right? Now I know people in this business that make up to 20%. In the exact same business that you're in. So it can be done. These people that tell me, oh, I make 5% because that's what everybody makes— no, there are people— if there are other people doing it, it's possible, right? And they're doing it in all— I don't care if you— I'll give you— I can give you a window example, I can give you a roof example, I can give you a one-day bath example, I can give you all of them. It's not about how much you sell, it's about how much you keep. And why I'm so passionate about this, this has been a big thing for me in the last year, year and a half. Those of you that listen to the podcast, you know this is something I've been beating up on, and that participate in our monthly trainings, because man, it's a mess in this business. I was on the phone with a client, This was in the training. It was sometime in December or early January. These are his numbers, top line numbers. 2015, they did $1.6 million. 2016, they did $2.8 million. In '17, they did $4.2 million. That's pretty impressive growth, right? I asked them, how much do you want to do in 20— 18. $5 million something. Okay. How much did you make on the $4.2 million? Less than 5%. I asked him, how much money do you have in the bank? I don't know. My wife does the books, but not a lot. So did you really? So where's the— and then to make things even worse, he pays himself a salary of $50,000 a year. Now I know what he's doing. He thinks that, well, if I keep this growth rate up, eventually when I get to $8 or $9 million, then I'll start to make some real money and it'll make up for all of the years that I didn't make money. I'll tell you what I told him. If you can't make money at 1.6, you ain't making money at 2.8. If you can't make money at 2.8, you're not making money at 4.2. And if you can't make money at 4.2, you're not making money at 8. So we came up with a different plan. I said, okay, let's change your plan then for 2018. This is my suggestion. Let's do less revenue. Instead of trying to do $5.5 million, add over $1 million in revenue, I said, why don't we do $4 million, but you focus on making that $4 million at a 10% net. And by the way, you're going to increase your salary, like, tomorrow from $50,000 to $100,000, so at least you can feed your family. So this guy's running as a full-time salesperson. He sold over $1 million in each of these 3 years. He's running as a full-time salesperson, and he's trying to grow the company. And he's trying to hire salespeople, and he's trying to do marketing, and he's not making any money. So to me, it's okay to sell less as long as you're making more. This is something I wish I had heard 15 years ago. You guys have heard this before? Revenue for vanity, profit for sanity. I needed to hear that. I grew a company at $11 million. Guess what? We didn't make anywhere near the kind of money we should have made. Nowhere near. And it wasn't going to. Why? Because all the basics were wrong. We didn't make money at 5. We didn't make money at 8. Why would we make money at 11? In fact, a lot of times what happens, which makes matters even worse— it's what happened to me— is you've got to fund that growth. Well, if your profit, which is what is supposed to fund the growth, isn't funding the growth, where does that money come from? Or Bank of America, Wells Fargo, right? Debt, Louie. Cash is king. Cash is king. And I say do not settle. You deserve better. All right, so that's it for today's episode of the Wealthy Contractor podcast. Let me ask you, did it help you look at your business in a new way? Did it spark an idea or ideas you hadn't thought of before? Do you have a list of action items that you can take and implement into your business or your life today? I really hope so. Now, before you go, make sure you subscribe to the Wealthy Contractor Podcast so you get access to the latest episodes as soon as they're available. We're always striving to provide you with great content, so you don't want to miss what's coming up. And a favor, I'd really appreciate it if you'd go to iTunes and post a review of this podcast. Let us know how we're doing. And finally, we started The Wealthy Contractor as a resource to help you, the home improvement entrepreneur, regardless of where you are on the wealthy scale. Get where you want to go. We want to provide you with the motivation, the confidence, the resources, and the tools so you too can live the life of the wealthy contractor. Now, the wealthy contractor is a place where it's okay for you to want it all. In fact, it's not only okay, it's encouraged. So until next time, this is Brian Kaskavalciyan with G4 Marketing Group.