How a Former Fortune 200 Exec Runs His Home Improvement Business | Lee Diamond (Ep. 231)

The thing I take away from doing this entrepreneurialism, and people in corporate America will never feel this, the grit is a whole new level of grit. This is hard. This is real money. Like, when you work for a corporation, you're handling money. It's real. They could fire you. Your paycheck turns into money at the end of every 2 weeks, and your bonuses and all this stuff. But you make a couple of wrong decisions here, there is real risk. Way more risk, way more consequence to your actions.

Hey everybody, welcome to another episode of the Wealthy Contractor Podcast. This is Brian Kaskavalciyan, and with me today I have Lee Diamond from K&H Home Solutions. Lee, welcome. Thanks for being here.

Thanks for having me, Brian.

Yeah. So we met recently at our Accelerate Live event. I met you and your son. And since then, you and I have had a couple of conversations, and I thought it would be really, really interesting to have you come on the podcast because you came into this business in a very different way than most do. And so most people that are in the replacement space, window, roofing, siding, really in contracting, come from one of two sides. Typically they come from the install or production side, or they come from the sales side of the business. Well, you don't really come from either one of those. So give us a little bit of your background. Like, where did you come from and how did you end up in this business?

Yeah. So first of all, this is really cool for me because as we'll probably get into, I've learned a lot of what I've learned from you and the guests you've had on here and other conferences I've been to. Um, I feel like I'm talking to the dean of the, uh, of the college right now, you know. I would say the professor— I have learned a lot from you directly, but you facilitating all these other people that I've really studied, it's brought me up to speed pretty quick. But my, my background is Um, I spent 30 years, uh, of a career with a Fortune 200 company and, um, all kinds of different positions and moved my family all over the country and outside the country. And it was an unbelievable career. Uh, we, we parted ways. I was pretty young at the time and I, I wasn't sure if I would ever do anything again. I've got a lot of hobbies and I, I kind of tried out, uh, retirement for 2 and a half years. And then I decided that I did have a lot more to offer and a lot more I wanted to do career-wise. I think entrepreneurs sometimes get— you don't have the risk tolerance when you're very young coming out of college and you just want a secure job where you're tired of being hungry all the time and you just want to pay your bills and you latch on with a company. I think there's a lot of people out there like me that really never got to scratch that entrepreneurial itch, if you will. And maybe later on in life as a second act that you go back into the workforce and try to do something on your own. So that's what we did. I decided to do something with my son. He's 26 years old. He's also done a few different things in his early career, but him and I are doing this together. Yeah, it's a little bit from the outside, but the thing about our business is we're all homeowners, so we kind of have a little bit of an understanding of what this business is because we are the customer first. And I also, I was a supplier to the building trade, so I knew a little bit about it as a vendor. So think about everybody that'll be listening, your vendors that sell to you. That's kind of what I did. So I was exposed to people in the, in the field that did this type of work just from a different angle. So I had a little bit of background. I felt a little bit more comfortable with this business versus some of the other ones I considered doing. This KNH Home Solutions just happened to be for sale in the Denver, Colorado market, and that's where I wanted to go into business. It's a great market. There's a really good company where the third owners, the 68-year-old company, and just felt very comfortable. It felt right. And it's been a fun ride that we bought the business in April of last year and it's been a blur since then. Yeah. But a lot of fun.

All right, cool. So, I got a lot of questions for you. So, there's, you know, 6 of them hitting me at once. So, let me try and do this in some sort of order. So, you were an executive at a Fortune 200 company. So you were, how far removed were you from the CEO?

I was a 2 or 3, I was in a, in a, at the top part of my career, I was, I would say in the, in the top 20 people in the company. I'm in the annual report and things like that. So.

Yeah. So I think that's really important because where I'm gonna go with that is you have a skillset that us entrepreneurs kind of wish we had, at least I do. And that is the, the organizational skills that you need in order to be in the C-suite and to be up, especially at a Fortune, at a Fortune 1000 company, um, the level of, of, uh, organization and sophistication that you have to have, at least to someone like me who's never even been around any of that. Seems to me like it, you've gotta work at a pretty high level. Is that true?

I would say there's a lot of things that are transferable that I have been exposed to in different capacities all the way through, throughout my career. When you start out in a company like that, you are, you know, you're starting out in, in a very small level doing one specific small thing, and then you, you get along the way, you do get a lot of leadership type of— not only the training but the experiences. Like, I think the key, the key for us is what we're— our kind of our mantra is we're trying to bring in the corporate acumen, but, but we also want to keep the family feel to it and keep our quality and our personal touch and all. There's a lot of things that aren't good about working for a huge company also. So, we're trying to blend those great qualities about both. And I got to tell you, I know you got a whole bunch of questions off my intro, but I've got so many things I've learned from having to do this that I never was exposed to.

So, I want to kind of ask you, as far as being an executive at a company like that and then now being an entrepreneur and being the leader of this business, it really kind of depends on your vision and your ability to mobilize a team and inspire that team and move that team forward. What, what are the skills, first off, that were transferable? And then what's new? What are the new things that you weren't maybe not expecting?

I think a lot of what businesses like ours are challenged with, the people that show up to your conferences and some of the other ones, is bringing more sophistication into the business. We talk about profit and, you know, long-range vision or growth mentality, all these things. So that's part of corporate America. Like, you can't help but you just think about all those different things. It's very innate. You always have to grow. You report to shareholders and a board and all this kind that kind of stuff. So what, what you have to first learn to do, and what I had, what I brought over was, uh, I, I would call it change management because it's very clear. It's very easy to, to walk into a situation and see where they are and then quickly by learning different things, see where you want to end up. But understanding the 12 or 20 steps to get there and how to do that sequentially and in a cadence where it could be absorbed and not overwhelmed. Because, you know, it's just like any business. We can— somebody— and I talked to a lot of the other participants in these conferences, and we have— I've met people and I keep in touch with them. A lot of people know where they want to go, but you have legacy folks that are there. That you want to keep with you because those are the people that are loyal. They're doing everything, they're doing the day-to-day. You know, we were fortunate. We had great people in the company that almost all of them are still with me. But those people have been thrusted into bigger roles because they were the ones there. And I told them from day one, I'll stick with you as, as long as you're willing to learn and grow. But this is where we're going. And you try to paint this picture. But the change management side and being able to do things with finesse in a cadence, it's easy to learn something at a conference or by listening to a podcast, but then understanding the steps that it takes and the psychology with the people that are there, that's not as easy all the time to do.

So is that a skill that— is that the C-suite executive skill set, or is that now the entrepreneurial skill set?

A lot of times in large companies, they move you around. They want you to— they want to cross-train you. They'll throw you into a business that you— it's either in a different geography, that's in a different place, uh, that needs certain change, or a completely different business because, you know, they're trying to prepare you to do other things down the road. So you can walk into something much like I did where you know very little about it and understanding how to do it, you know, assessing where you are, assessing your people, your place, your, your, uh, you know, your strengths, weaknesses, your SWOT analysis, who your competition, all that stuff. Those are skills that I brought over and, you know, without even thinking about it, that's what I started doing from day one. And then it became laying out this phase 1, 2, 3, 4 to get to where we are, you know, today, which is far from a done product. I could tell you right now.

Yeah, of course. Far from.

Yeah.

So what's, what you said is very interesting and it's something that we don't do very well as entrepreneurs is I think essentially what you said is you, you take somebody and you put 'em into this new situation and what it forces them to do is not jump in and do, do, do. It forces you to actually just sit back and watch and see what's going on and think about what's going on and look for, well, what's working, what's not working, what lever can I, you know, what levers can we pull in order to make change? And I think as entrepreneurs, and correct me if I'm wrong, but We're so in it every day that that takes us over. And we are so reluctant to— you know how many people I've told to just stop? Stop. Take a day, take a couple days, take a damn week, and just stop and think. Because you're so in it it swallows you up. Is that fair?

Absolutely. You do. You— what I had the luxury of doing that I understand a lot of people don't is work from day one, setting it up to where I can work on it versus in it. I set it up like that from the beginning. It was just my situation. I had the luxury of being able to do that. I had great people. The prior owner, was working toward that himself. So the, the business was kind of accustomed to just operating. It's— you can't always do that. I get it. Like, if you're, if you're having to pay that mortgage every month and you, and you have to make things go, it's harder to take those risks. It's harder to stop, slow down. Uh, and a lot of what I've been finding is it, it takes like re— you know, re-upping, re— re-putting in your ante, reinvesting to get to these other levels. And I can see where that can be extremely challenging, especially if you have a line of sight, you have visibility of where, you know, you should get to, want to get to. The people you talk to at the, at the conferences, like, yeah, I'm here, I know I need to get there. You, you feel that, that challenge and that, those roadblocks to be able to get there. Because, you know, the, the thing I take away from doing this entrepreneurialism and that I never had before and that I have— like, people in corporate America will never feel this— is like, to me, like, the grit is a whole new level of grit. This is hard. Like, this is real money. Like, when you work for a corporation, Yeah, you're, you're handling money. It's real. They could fire you. Your paycheck turns into money at the end of every 2 weeks and your bonuses and all this stuff. But like, you make a couple of wrong decisions here, like there is real risk, way more risk, way more consequence to your actions. Like the toughness is, to me, it's unmatched. Yeah. Like it, like I have so much respect for everybody that does this. And, and it's opened my eyes, you know, not that I was naive to how hard it is, you know, for many businesses, but it's just a different angle that I look at everything with. And I, you know, it's amazing also, like, the versatility. Like, you got to wear, you know, so many hats all the time, and you're, you're chasing this or that. Or, I mean, people's acumen might not be like, uh, at a level of like a corporate— you'd be corporately trained, but the business acumen from a versatility standpoint, meaning like in our business specifically, like the things you have to learn about on the marketing side, sales, you know, ops, installation, the construction, and then all the way through all the books and the cash flow and all these different things. I mean, that's a lot of skill set. For very few people or just an owner to have. So, you know, in a big company, you kind of learn one thing and you get great at that one thing, but you don't really care about everything else going on. That's somebody else's job. That's for them to do. But just the— and the overall, just the grit. I mean, that's the best word I could describe. Like, the grit it takes is— it's, it's unmatched. So the, the The coolest thing, the, the, the, the luxury, the joy I'm able to get out of this is like blending those things together. And it's, you know, it's a lot of fun. I'm glad. I'm very happy I made the call. Yeah.

And that's why I'm so damn dedicated to this group, because if people really understood how valuable they are in their marketplaces, um, I think that we would see a lot more, um, we'd see a lot more success in this industry, a lot more people making the money they deserve to make, um, rather than just accepting what the business gives them. So anyway, on— so I want to go back to the stopping and thinking, uh, of the business. So you were able to do that, you're still able to do that, just because that's the way you're built. But then you said, okay, now you have this you had to create a plan and you mentioned phases. There are phases to the plan. Can you talk a little bit about what does that plan kind of look like, at least for your business and out of your mind? What does that look like?

Yeah, so I, I think the first phase is just, you know, I, I called it acclimation, you know, and I don't know if I named all the phases, but I'll tell you, this was just like holding up, like, you, you take over this business or you want to put a change in effect, the business isn't stopping, you know, it's going to keep going day after day. You're still running leads, you're still— I mean, to, to, to, to do something in the beginning before you even started is way easier than to do it while it's going on. So, so the acclimation phase was just, you know, grabbing on doing all this observation, but also like for me in particular, buying a business, building, building trust. Because when you take something over, you know, nobody knows what your intentions are. They don't even know who you are, you know. So when you— especially when you come from outside, maybe if you come from inside the business, take over, it's a lot different. They already know you. But for me, they didn't.

So probably a little easier.

Yeah, it's easier and tougher in some ways, but, but it was you know, you're, you're get— you want to gain that trust and then you want to— you can't— what you can't do is go in and have this whole vision played out already and the growth plan. You, you got to kind of see where you are to know where you're going, right? So, right. Um, so it was a lot of, a lot of observation, acclimation to the people, the personalities, all that kind of thing. What we knew early on is what we needed to do was upgrade like all of our systems. We were very antiquated, I would call it. And a lot of the vendors that I've met at, you know, various conferences or we're, we're in business with them and, and we've made some wrong steps there because speed was important to us too. You know, I'm, I'm not always patient. It's a, it's an advantage and a disadvantage when I've assessed something and I know I want to do something, what that next is, I typically am one to say, well, we know we have to do it, let's do it. Like, let's, you know, let's cut, cut the cord and go for it, even though it's going to be— it might cause some pain or whatever. I just want to get there because— so we did a lot of those things, and sometimes we misstepped on some of those because of the speed we took.

Yeah. Was this a list of items that you had to do? I'm looking for kind of like, yeah, typically how do you do lay this out, at least for yourself at first?

Yeah. So for us, yeah, we made a list and we said, you know, we need to bring our bookkeeping from a, a local system into, onto the cloud so we could do it from multiple places. We need to digitize our pricing system. So we partnered with one of the vendors. We needed to figure out a better, you know, customer nurturing system. We weren't really doing anything, so we had to start working on that. So all these different things were in a list and we And then it's up to the leader, me, to kind of prioritize what these things are.

Mm-hmm.

How are you gonna pay for it? You know what I mean? All these kind of things. So we, we went through that process and that took us, you know, till probably throughout another 6 months or so to get all these things into place to where we flipped the year over to this year. Now it became, you know, execution. Now we, we kind of know what we need to do. Now we got to prove to ourselves that we could do it at a different level. And that's had its own— it has its own challenges, you know, that we're still kind of working through 6, 7, 8 months later. Sure.

I want to ask you about execution, but first, I want to go to the business that you purchased. So before you got into the—

and you do windows and We do windows, entry doors, we do siding and we do roofing and we're dabbling in one-day bath also. One-day bath. All right.

So exterior remodeling. Now, when you were looking for a business to acquire, was an exterior replacement business— was it one of the ones on your list?

No. I would say to me it was very much a generic search. I knew I wanted to do something direct to consumer.

Okay.

I like that. I, as a homeowner, I like doing things to, to my home. Like, I love doing home projects in my own house, exterior, interior, whatever. It's something I like doing. So what I— but before that, I jumped to that. But before that, I knew direct-to-consumer because, um, I've— in my prior career, I saw enough nightmares on the commercial side. I saw people out tons and tons of money, go, you know, getting put out of business on a big job. And because they don't get paid, or they get paid 6 months later, or all these issues, regulatory, a million different things. So I knew if I was going to do something like in, in the construction phase, and it was going to be something consumer because I like— I wanted something that would cash flow. You know, we would have really good margins. We could do quality and feel good about it and get the price for it. So I had some like basic things that I kind of learned from, from prior experience that I wanted to stay in and wanted to avoid. And that kind of took me— married that with the home remodeling just because, like I told you, I was— I'm a homeowner and I like I just like stuff to my own, my own house.

What was it? What was it? And, and by the way, part of the reason I'm asking him these questions is one, for you guys to have some context as to what he's walked into and what he's creating. But I also think this is valuable for you to really kind of listen in for those of you that may be considering one day selling your business, or creating a business that would be attractive to a buyer, even if you weren't going to do it. Here's, here's some of the, what people are using to judge whether or not this would be a worthwhile investment or not. Okay. So what was it particularly about this business that you, that you liked?

What I liked is the, the size, the scale of it at the time. So we, we did, we do Historically, this company does between $6.5 and $8 million.

Okay.

Our target is higher than that. You know, for this year we're looking to get to $10 and then, you know, have a good, consistent, profitable growth strategy. But so it had some size, it had something I could kind of sink my teeth into, and it had people there. And that was one of the things that was attractive to me. And to me, it had a lot of I saw by looking over the P&L and everything, it had a lot of areas that I could see that I could improve on. And I'm, I'm more of a fixer. I've, I, I've taken over business units in my career that were humming along and you just have to jump on and keep it going and not screw it up. And I've taken over the ones that were kind of screwed up and I, I enjoy that better. So, I was looking at several businesses in this process and I think you're going to have people on both sides. I mean, I'm going to try to get this to the point where if someone were to take it over like me, it would be just step in and hold on because it's already kind of going. If that's my intention, if or, you know, but what I was attracted to is, hey, this business is making, you know, low mid-single digits on profitability.

And that's my next question.

Yeah. Yeah. This, this business was, you know, mid to low single digits on, on the last 5 or 6 years. They had a nice spike in revenue during COVID like a lot of businesses have. So now we're having to maintain those levels and grow from it. So, you know, my, my team is thinking I'm, I'm very aggressive and I am, but yeah.

Did the cash flow follow the growth? No, no, no.

It stayed right. It didn't move at all. Didn't move at all. Yeah. We saw a lot of—

And we're seeing a lot of that now. We're seeing a lot of that now where you had this crazy revenue spikes, but the bottom line didn't really change all that much. So people were just doing more, more, more, more, more.

Yeah.

But their profits were in the, what'd you say, the low, low to mid single? Yeah. I mean, that's, that's horrible.

Yeah. Yeah. We, we made a few changes. We grew it to right around 10 last year, just in the last 8 months of the year. You know, now we want to keep creeping up to that 15-20 mark.

And you're coming to— you're coming to Profit Workshop next week, right? Oh, yeah, you will see it. You'll see it faster than I think most people will. I hate to say that, not to take anything away from anybody. I'm just saying that because of your experience, you will see it much, much faster than most others will. And you'll get there, you'll make the changes that you need probably right away. But what's interesting about that, so businesses are acquired generally based on a multiple of EBITDA. And so you probably, because even though it was doing pretty good revenues, you probably got a pretty good deal on it because the cash flow wasn't amazing.

Right? I did. I felt I did. And we've been able to chip away at, you know, most of what it cost already. And now it's, you know, I like what you said, like, you know, setting things up to, And I've heard other guests say it, like, even if you never plan on selling your company, which I— people ask me all the time, my employees ask, and I know they'll probably listen to this. Like, I really, as we sit here, don't know. I know I'm supposed to know what I want to do, but I'm enjoying this. I have family in the business.

Yeah.

And if, you know, if when we get it to the point where it's, you know, making a good profit and we may hold it for a long time, or somebody comes along that wants to you know, sweep us off our feet, we're off, we might go that way too. But, you know, but to set it up for that, it just, it just, it makes it easier to run every day for you. And we've done that. We've had the luxury again, like fresh set of lens, like somebody brand new looking at things and, you know, setting it up with all these systems and process and in, in the way that would make it attractive to somebody. But it also just, it's what we need to do to, to run it well for ourselves.

Yeah, well, and look, at the end of the day, I think really it's, it's all about what do we want as, as an owner, what do we want for our family, what do we want for our future? And you said you started this off by saying that you're still young. I think you're younger than I am. I think that you took 2.5 years off. You realized, no, that's probably not for me. I think financially, at least from our conversations, you're probably, you know, good financially. But you want to create something that's strong, stable, sustainable. And look, you get to $10 million— let's just throw some numbers out there— you take a business, any business, yours or any, $10 million, you got $1.5 million to $1.8 million to the bottom line. You could do pretty much anything you kind of want to do at that point, depending on what your lifestyle needs are. And you've got a business that's operating at— in order to make it perform at that level, you've got to have the people in place, you've got to have the right processes in place, you got to have the right profit model in place, which is all the stuff you're working on. But now it's just— it cash flows. So now you pay your people better, you can take chances. You could take your family away for a month or 2 months, come back to the business and say, hey, how are things going? Great, boss. Things were great while you were gone. You going on another trip? How about leaving tomorrow? And they got it, you know, and then now you've got an asset that's paying you over and over and over again in order for— and, and you've set it up in a way where it allows you to live whatever version of your best life is. Everybody's is something different. And so I think there's something really cool about, about that. So let me ask you about this. So you brought up P&L. We talked a little bit about, you know, you're coming to the workshop next week. I want to ask you about big companies. I want to ask you about on the corporate side, how important is the P&L on the corporate side?

I mean, the P&L is your report card.

Yeah.

It's everything. I mean, you could have all the soft skills in the world, but if you don't produce on that P&L, there's 1,000 people behind you that will. So, easier said than done. You know, in our business there's, you know, and again, I want, I just want to go back to what you just finished talking about, you know, the goal and the get everything in order so you could have this great lifestyle. Like I could have all, I have a lot of knowledge. I'm learning a lot about this business in particular, but we are far from getting to that point, but we're working every day to get there and it is going to happen. And not be just— not because I'm just this, you know, wild optimist. You could just see that there's just steps to get to it. I just want to mention that because I just— again, I talk to a lot of people in this business. That's how I learn everything. And everybody kind of wants to get to that. They want to be the wealthy contractor. And some, you know, some believe they can, some, some aren't really sure. Some say they can, but they don't really believe it. It's all different things. It's not easy by any means. Like, I am— we are far from it. But to me, like, I sit in meetings that we, we have a product vendor come in and talk about windows and doors, and I, I, I start glazing over because that's— and, and my people ask me, like, you don't care, you don't have any— you don't care about this, and you're not passionate about it. And I, I, I'm honest with everybody. I'm very genuine, I say no, I have no passion about window, door siding, or roofing.

I just don't.

What I'm passionate about is business. That is my art. Like, that's what I enjoy about this whole thing. And this, this thing that we all do, the people that listen to your podcast, this is— that art is something special. Like, it is a— this is an unbelievable business when you're getting it when you're doing all the little things right that add up. Yeah. To P&L producing what it really should do. You say it all the time, like you shouldn't be doing this for practice. Like it's too hard and it is very hard, but all the pieces, I, you know, again, we're not there yet cuz we're either missing, you know, our processes aren't tight or our people aren't up to snuff yet or trained up or, and then it comes back to me like I gotta, make sure I get there. But that's also the fun of it. Like, the struggles we have are like blessings. Like, I, all day today I was on the phone with dealing with stuff, but to me it's a blessing because it, it surfaces where you, where you really are and where you need to get to, to make it get to that smooth point. And I don't know if it ever gets smooth. I mean, I'll let you know someday.

It gets smoother, but even like, like You know, I think, you know, my buddy Scott Berman, Florida Window and Door. So Scott's got an incredible business. Incredible. He's like number— I don't know, he's in the top 20 on the new QR Top 500 list. Incredible business, great people around him. He's an amazing, like, uh, uh, executor, implementer, and getting things done. And it's funny, we joke around, like, sometimes he'll say, oh, you know, I don't got anything to do, I don't got anything else to do. And it's fine because sometimes, you know, they need him to jump in and do things and solve big problems. And then, which has been the last few months actually because of what's going on with leads. So he's gotten more kind of involved in it. But I think he'll be the first one to tell you too that that's, it's actually kind of fun. And when you build a business that can make mistakes or can, can hire really great people, it starts to get really fun. And when you look back on it, you look and you think about, man, you know, we didn't have a great team. We just did this exercise with Success Society where Charlie, in his book, Charlie Gundel, in Lessons Learned, talks about the ABC people. We created a tool out of it, called it the ABC People Upgrader. And we basically had everybody put their people into buckets. Are they A's, B's, or C's? And in the book, he talks about how you separate the people. The C's, you tell them, okay, today's your last day, you're better off going working somewhere else. The A's, you guys are great, you know, we're gonna keep going and we're going to keep smashing it. And then the B's have a choice to make. In 2 weeks, you're either going to be a C or you're going to be an A. Well, when you start to surround yourself and really think about your business and you have A players around you, that stuff starts to get a a lot more fun because they start to work on all of that stuff with you instead of it all being dependent on you. Now, the reason I'm— part of the reason I'm saying all of that is because profitability is one of the things that really helps to make that happen. Scott says it all the time, you got to make a lot of margin in order to be able to make mistakes. And a lot of people, I think, in this business are afraid to make mistakes, because one mistake could put you out of business if you don't have the right levels of gross margin, cash flow, net profitability. So it's interesting. I want to talk to you about two other things. So you mentioned the word sophistication, which is a word I use a lot. Yeah, also, but you also use the word called acumen. And I think there's a relationship between the two. Business acumen creates sophistication in a business, right? Can you talk a little bit about what you, what your version of what you meant when you used the word acumen, business acumen?

Yeah, I would say, you know, having an understanding of the levers of the business and how they impact everything. You know, there, and there's a million examples. I'll just use the— you talked about margin just now and how that affords you the opportunity to really gain speed because if you're making great, you know, margins, like one of the biggest levers you have.

Oh, absolutely.

Other than sales, like if you could tick that margin, But it's, it's, you can't just say it because everybody would do it tomorrow. If it's like, if I could just change my formula and my, on my pricing pages or your program to take you from $48,000 to $58,000, everybody would do it. There's so many things that go into that.

I'm not so sure about that, but go on.

Well, you, well, you, you would if you think you could sell as many jobs, right? So now you have to make sure your, your sales process.

There you go.

And your marketing all fits a premium product. Like there's so much to it, right? And we did this, we did this here in my business. Like we took us from a, almost like a, a, a good, a really good price, a good value for a good price kind of mentality with all of our salespeople and our marketing and everybody in the building. To, hey, we're going to be not the most premium, but upper middle premium because that's what we need to make to be able to do all the things we want to do. We, we moved offices or we, you know, we bought vehicles and we brought— to me, that's, that kind of goes into the sophistication of the businesses, making it seem like there's, you know, there's, there's a lot there behind, behind the business to bring a customer confidence and to make talented people want to come work there and all these things. But to me, it's easier said than done. Like, you want to get that 60% margin or whatever it is, you got to bring a lot of things home. Like, we had to take all of our salespeople and we had— we just got done putting them through a 2-week academy, like, while the busy season was happening. But we could— again, I— when I see something I know we need to do, I'm not very patient. You know, it was told to me, why don't we wait till the dead sea? I'm like, we're losing every day. We, we're losing days here. Yeah. And it works. So, you know, you gotta put these things behind it, but it's understanding the levers, how they interact with each other. I think that's when I talk about acumen, I think that's what that means to me. And when you, when you show, when you show a P&L that isn't what you thought it would be, you, you have to have the ability to go back and see what happened and what you need to work on or fix, adjust to get it to be where you want it to be. And I think a lot of what you're talking about, what you talk about with the reverse engineering the business, you're figuring out what, what you, what you need to make and then building your, what your overhead is and building it all back in. I mean, that takes a certain amount of acumen to be able to produce those profitability numbers that you really need to have in your business.

Yeah, well, there's a bridge between where you are and where you want to be. And the nice thing about this business, and I think you're discovering this, although you've used— you said how hard this business is like 400 times in, in the last half an hour, but, and I don't disagree with you, but the nice thing about this business is that it's pretty formulaic. You know, you can— if you need to learn more about selling, you don't have to come up with it on your own. There's people you can go call. If you need to learn more about marketing, you can go see what other— what the most successful companies are doing. What offers are they using? What headlines? What are their ads designed like? You know, what, what, what different avenues are they using for lead generation? When it comes to production, you can go and visit other companies that are not competitors, people that you meet at conferences, and you can go see how do they do it over there. So there's a formula to the profitability. You know, Mark and I next week, I don't know when this is going to be released, but we're recording this beginning of September, our profit workshops next week. But Mark and I are going to lay out the finances of this business and exactly what it looks like. He's been doing it for decades. His financial model is, is Unlike anything that's available in this industry, and, and it's been proven to work decade after decade because he's been in the business since the '80s, you know, and he's been consistently financially successful. And I don't know a lot of people, you know, that have been consistently successful for that long. And so there are formulas to this business, but what it comes down to and what I have seen is the owner's mindset and their level of execution. And you just said something that's really good. I wrote it down. Every day we're losing days. I think that way also. And I think that the most successful people I know think the exact same way. Like, I just had somebody put something off. Well, I'm gonna do that in Q4. Well, okay, you're gonna put this off until Q4, but it's about profitability. This is the most important thing in your business. How could you put it off for even one more day? How could you put it off? And the difference, I think, between the most successful in this business and the marginally successful is the levels of implementation and execution on that plan on that bridge between where we are and where we're going. What could you offer in the areas of— now that I've laid that out, what can you offer in the areas of execution?

So, it all comes down to one thing, people, talent, culture and talent. So, again, you could have the best plan that you could mean well, you could have the mindset, you could have the knowledge, the systems and put you need the, you need the right people to, to run it through system. You, unless you're the one-man gang, you're doing all yourself, which you're going to burn yourself out that way, right? The answer to good leadership is, I'm just going to go do it myself. That's not the answer. You got, you got to get the people around you. So sometimes you have those people, sometimes you don't. When you talk to anybody in this business or any other business about Hey, you know, I know you had the plan, you, so it didn't come out the way you wanted. What happened? Usually what you're going to hear is, well, I had to change out my per— this person, or that person didn't work out, or that person left me. Or, you know, in a small business, this is probably the most challenging thing. It is. If you're dealing with who you have and they have a level of knowledge that is, it's hard to replace. It's hard to, you know, there's not In a big company, there's 100 people waiting to do that same job, and there's, it's kind of plug and play, you know, including what I did. I'm not, I was part of that system, you know, but small business is not the case. So finding, you know, working on that talent is, it has to be paramount to everything else. It's not only like finding new people and always be recruiting, like always be looking for those next people. But taking the people you have and really figuring out what they need and how to, how to take that— people that are skilled in a certain area and get them, get those leadership skills so they can execute. Because once you have the talent, then you have to have like a disciplined organization. Like, this is not like in a military sense, but, you know, here's our plan. Let's— you need to execute it within your part of the company and get us all the way there. And then if you can get that as a culture, and then, and, and then you can empower everybody. Like that's the third part and that's the part everybody wants to get to. In my case, I had people that were really good and I had no choice. I just had to empower everybody from day one. And the discipline and process had to come later. And that's, that's some of the growing pains that I'm dealing with, but we will get there. Right. Yeah. And I might not have all the right people, but I think when you're, when you're missing that execution phase that usually, you know, not every plan is perfect, that you're going to have to adapt the plan because nobody has a crystal ball. But that's where that, that's where that talent and discipline comes from, to be able to say, hey, we were going this direction, now we're going to pivot over here. And you have to have everybody in an organization just that, that can do that quickly. That's where that discipline comes from.

Is that a skill set that you had that you developed over time that allowed you to get up to that, to the C-suite in a Fortune 200 company? It seems to me like that would be like one of the strongest skill sets that would be required to make that happen. Is that true? Because, because when you're, when you're at that level and you've got business units under you, and what kind of revenue were you responsible for? Um, at the end, almost a billion dollars. Billion dollars. Okay, so in order to do that, I mean, you had to have a team of lieutenants. I don't know what you would call them. Um, and so that's a skill set you had to develop in order for you to be the lead guy over all these other probably fantastically, uh, skilled, qualified people.

Yeah, you have— you develop that by, you know, experience. Because you fail. You—

that was my next question is how do you develop it?

Yeah, you try it. You say you have an idea early on and you say, I want to— just like it happens in this business, I want to go here and I want to— it doesn't work. And you have to get that mirror out and you got to look at that mirror. Okay, I'm the leader of this, that team, and it didn't work. What did— what do I need to do better? Well, maybe I didn't, uh, lay it out. Maybe I didn't give the why behind the what and I was impatient. I didn't finesse it enough. I didn't, you know, maybe I had a group, but I laid it out in a group where I should have done it individually. So you're learning all these different skills on how to do it. One of the, one of the frustrating things when you take something over is you want your other leaders to get to that speed when they haven't gone through all those steps. But you don't have time. You don't have 30 years to "Like in the next month, I need you leading your team at this high level." And it's really not fair to them. That's one of the challenges of coming out of the corporate world like I did.

How do you, and I think this question could probably be its own episode, but if you were to just, you know, say, just give us maybe a simple answer. The, the answer can't be simple. But how do you do that? How do you develop people? Because to me, it seems like I have to develop myself first, and I have to be at a certain level before I can really take on developing people, at least beyond me.

Yeah, that's the challenge. I mean, I think you have to be able to see the path yourself based on something. You have to have that insight, that self-awareness to be able to see where you need to go. I mean, that's— these are the kind of things you— we as owners, we go to these conferences and we learn things. How do you take that and translate it back to the people that are actually doing that stuff?

Yeah, every day. How do you do it?

You can learn those things. I mean, that's, that is what I have made my job into. That's all. That's my main role in my company is just one-on-one working with these individuals that I care about and trying to get them there. I mean, it's, there's no other way to do it. It takes that work. You can, you can get them training, you can do different things, but my path is I, I kind of have that. Background, so I do it myself.

Well, so what's interesting about what you just said is, so if I, if I think about the most successful people in this business, now look, just to be clear, when I say successful out there, I don't mean to disparage anybody. I think there's a ton of people that have smaller companies that are very successful in this business. They've created a business that works for them. But when we look at like the giants of this business, when we talk about people like a Scott Berman, like a Brian Gottlieb, like a Brian Elias, all my buddies, you know, I love these guys. They all started from nothing, nothing, zero. Brian just wrote a book. It's coming out next week about exactly what you're talking about, about developing people. And I think that when you look at the most successful companies and the most successful entrepreneurs, that is that one skill set that they have. I think it was Brian Elias that said to me, Brian, he goes, Brian, I don't do much. I can't do— I got to get his voice back. Brian, I don't do much, but I get a lot of people to get a lot of stuff done. You know, that's his thing is like, I don't do much. I have a vision. But I get the people to execute on that vision. And his job is like what you said, is his job is to develop those people, to, to, to help them with the process and then empower them to go do that job, but then also continually be developing them as people. And I think that that also is, is maybe something that's missing from what we teach people in this industry. Um, you actually just gave me an idea for Accelerate, uh, Live in, in February. You gave me another idea which actually came up, which was the whole production thing. So we're working on that for Accelerate Live. But I think that there's something to this also, is the development of people. There's talk of it And I think that people will surface talk about it because it is a pretty complex topic, I think. But that might be an interesting one too, is development of self and development of others around you, because you're not going to build that business that you're dreaming of without first developing, again, developing yourself and then having the ability to develop the other people around you. So maybe that's something you can— maybe that's something you can help with.

Yeah, I love it. It's, it's not— it's a high calling of the, of the work we do. And, you know, developing leaders, there's, you know, it, it smooths out every part of your business and it's very fulfilling besides that, you know?

Yeah. And whether you're building a $4 million business that's going to net you, you know, $600,000 to $800,000 a year, you're going to build a $10 million business That skill set still needs to be there. Otherwise, you're just not going to be able to— I just don't think you're able to get there. And I think if we think about the people that are struggling a little bit, I just had a call yesterday with, with somebody, and I was trying to pinpoint what it was. And I've known him for a while. He's got a nice business, making money. But they're having a hard time. It's, it's him and his partner are basically doing everything. And they keep trying to hire people and put them into these positions like sales management, marketing management, production management, and they just— everybody's been a mis-hire. And the one that they did get that was good got recruited away by another big company, which is very telling, which is very telling. You know, if your people are being recruited away, right, that's a culture problem.

It's you.

Yeah, it's you. Yeah. Well, Lee, this has been, this has been great, different perspective. It's so interesting talking with you and learning from you and getting this, this perspective. So thank you so much for your time and, and, and sharing and being so open with us. You're going to have to come back. You're going to have to come back probably mid next year so we can get an update and a report on, on where you're at and what more you've learned. But I wish you continued success and I'm looking Looking forward to seeing you next week. And for everybody listening, I hope this was a valuable episode. I think I learned a lot and I hope you guys did too. Maybe worth another listen. Maybe worth another listen. There was a lot of stuff that Lee said that I think is worth listening to again. So Lee, thank you again. And yeah, to everybody listening, till next time, this is Brian Kaskavalciyan and this is the Wealthy Contractor Podcast.