Mark Olsen - Ep. 43 - From $500k Underwater To Rebuilding In Just 12 Months

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 everybody, welcome to this episode of the Wealthy Contractor Podcast. This is Brian Kaskavalciyan. With G4 Marketing Group. And in this episode, I'm going to be talking with Mark Olson from Crumwede Roofing in the Chicago metro area. Mark, welcome. Thank you for, for being here.

Yeah, absolutely. Thanks, Brian. Thanks for having me.

Yeah. So, why don't, why don't we, or why don't you tell, tell the listeners a little bit about your company? A little bit about how you guys started and where you're at today.

Yeah, so we're a complete exterior remodeling company from roofing, siding, gutters, windows, and services. We also do commercial roofing, where the backbone of this company started since 1953. I am the third generation, which took over about 4 years ago with my, my older brother Greg. And we basically took a, how would you say, a 60-year-old company and now we're a 4-year-old business because everything that was started is shut down. My brother and I reinvented the wheel in this company and we're moving forward and growing every year. We're really, really happy and we have a great partnership. And a great culture that we're working on within the company year after year.

So you reinvented the wheel 4 years ago. What brought that about?

Well, we had no choice. You know, this company was underwater, almost half a million dollars in debt to all the suppliers. It was just that company that had no understanding of how to price projects right. It was just kind of sad, but my brother and I, we didn't want to do this. We graduated college and I was around the recession and obviously my dad said, "Hey, why don't you come back? You can work on the roof." So I was always just more of an urgent, inspiring person that knew there was more to life than just working on the roof. I wouldn't stop researching. I'd see all these other successful companies in the area and I kept researching on them. Eventually I saw the key to my success, my brother's, and that was CCN. And I tell you, as soon as we joined that on our last dollar we had to the company before we're just belly up, my brother and I knew this was our last chance to make a big turn. And that's what we did 4 years ago. And now I'm here with you.

What was the first big thing that you guys attacked?

Price, big time. We went through the business planning boot camp and we realized, well, one, it was demoralizing. I wanted to cut the carpet and slide out of the room because we realized at the rate we were going at the time, we shouldn't even be doing what we were doing. So, the stressful thing was I couldn't believe that contractors were charging, you know, or up in the 60% gross margin areas. And I'm like, there's no way. I mean, we weren't even on, I'd be lucky to get 15% gross, but that's just how we were programmed growing up in my father's company. So when we came back, yeah, we raised that price, not to 60% gross, but at least up to 40%, which still wasn't cutting it, but that was hard for everyone. Everyone's stressing out 'cause they're so used to being that price-driven contractor. So that was the first thing we did. And you know what, by doing that, got us out of debt the first year.

So it's, it's a little harder to sell value, isn't it, than it is to sell price?

Oh yeah, because not only did we raise our price, but our quality wasn't up with the price. You know, we were— I went to this— we were selling, uh, somewhat, you know, back then at a higher price. But then, you know, then you had to fix production, and then you had to fix your, um, your bookkeeper. Then it just snowballed, and it was just— it was a very chaotic year. It was the most stressful year I've ever been through at a younger age, and more so stressful for my father and my uncle who've been doing this their whole life. And now they're bidders. They're like, wait a minute, I'm not gonna sell at this price. You're out of your mind, you know. And it was a lot of turmoil, a lot of friction in the office. But at the end, when we showed, hey, we're out of debt, and that was— that was the best feeling ever. I didn't have to go on unemployment every winter, you know, because I thought that's just how it was. My dad says, well, that's how it is, you know. You make take your money and go to unemployment in the wintertime. I'm like, this is terrible.

I've heard that plan before. Yeah, it's not— it's— that's not a great, a great plan. So you're saying something very interesting, uh, but I want to hear the other side of it. So it caused a lot of chaos in the office. Um, I'm sure everybody was freaking out about, you know, you and your brother coming back and saying, okay, we're gonna— we're raising our prices. And to go from a 15% margin to a 40% margin, it was probably a pretty substantial price increase. You didn't mention the customer, though. Did the customer flip out?

No, not at all. We sold more. It was the weirdest— I mean, we actually did the same amount of sales the year prior and we did the same amount of sales that new year with CCN. But yeah, we made more money and that was the biggest fear we all had. Our paradigm is, you know, everyone's a price price buying customer. And as soon as we stepped out of that ring of those contractors and create a better value and quality project and actually sell it, not email a bid, present it, go to the homeowner, show why hiring Prumwood is the contractor for you, the community contractor. And since 4 years ago, I mean, we have been moving fast and growing, and, you know, our gross margins where it needs to be at. And the best part about it, we have money to do more marketing, hire better people, provide better vehicles for everyone. I mean, it's, it's, it's, it's really, really cool what price, what price can do for a company.

Uh, yeah, so it's something I talk about a lot, and it, it's almost, I mean, almost without fail Everybody I talked to, and including my own experience, when you raise price, your close rate doesn't really change that much. And in some cases, what's funny is what you said is you actually sold more. When I, when I first discovered, uh, price and, and price as a strategy, I sold more at the significantly higher price than I ever did at the lower price. It's really interesting. A lot of people don't get that. They're, they're afraid of what's going to happen. Oh my God, if we raise price, no one's going to buy anymore. But what's funny is that that hardly ever happens.

Yeah, absolutely. I, I think one thing that stuck in my head was, you know, if your salesmen are trained and continually monitored and you could maintain a 30% closing ratio, the price is really, you could keep moving with prices. It's 30% closing ratio. And it really streamlined there no matter what. And obviously there's a cap on, I believe, on when you got all your books in order for pricing, but it's definitely having a sales process in line to get the price you need. Keeping that quality and value up. I mean, we have a tight, tightrope on our production and what we expect to be produced.

Yeah, the cap on price is interesting. It's— and it's, it's a lot higher than most people think it is. Now, okay, so price was the first thing. What was, what was the, what was the next thing?

Uh, the next thing was, uh, a sales process. You know, I was really the only actual trained salesman. You know, my uncle was the other one. And, you know, he wasn't going to learn the sales process. You know, he doesn't really know how to use a computer, and, you know, nor should he. He's just, he's comfortable what he was doing. So I knew I had to learn the sales process to prove to the new sales hires as I grow, this is how it's done and this is how we do things. So I started the sales process, which is very difficult because I had no one else really to learn from. You know, it really, it was interesting. It worked very well, and we continue to do it to this day. You know, we're still growing, but now I have 5 other salesmen underneath me that I manage. So they're all doing the same sales process. We have our meetings, we go over basically role-playing objections. So that would be the second step is the sales process. You gotta have a sales process.

By the way, Mark just gave you a very important formula. And you notice that 4 years ago was him and his uncle that were selling, and there was no process. So many people are stuck in this business because they can't hire salespeople. And the reason they can't hire salespeople, or they can hire them, they just can't keep them and make them successful and productive, is because there's no process behind it. So you just heard Mark tell you Sales process is key. They have their weekly meetings, and now he's got 5 guys that are all doing the same thing, right? They all run the same process.

Yes. Yeah. Yes. Awesome. Monitor them. Yeah. Another thing with salespeople too, yeah, it's hard to find salespeople and keep them, but I know, I know we may do a little bit more than most companies with their salesmen. I mean, we give them, we We give them a company vehicle with our logos on it, you know, gas card, cell phone, laptop, 401(k) company match, health insurance. I mean, we really try to attract top quality salesmen by giving them what they need to be successful in life. And that, that's how we find the next sales guy. They all know someone that they're like, wow, that is a good deal.

And by the way, if you hadn't raised your prices to the point where your margins were in line, you wouldn't be able to do all that stuff, would you?

Oh no, no, no, no. Yeah, yeah, that takes time. Obviously, you're right. You're absolutely right. We gotta have the right price to be giving all these benefits to not just the salesman but the entire, you know, company.

You kind of gotta be in this business to make money, right?

Absolutely.

Well, I say that joking and laughing because I come across so many people in this business. It's part of the reason why I do this, this podcast, is because A, it doesn't have to be that way, and B, most everybody deserves a whole lot better than they're getting. But there's so many people in this business that are just barely getting by, and the shame of it is, is they got millions of dollars potentially running through their business, and yet they don't make any money. And they're in debt or they're stressed out or they can't take a break, they can't take a vacation, they gotta sell the next job to pay for the one that they're installing now. And doesn't have to be that way. All it takes is, like you guys, you made a decision. So this is really good. So you fixed your price, you fixed your sales process. What was next?

Production is always an ongoing thing. Yeah. So production was definitely, you know, we hired a production manager, now we're up to 3. At that time when we started, we had nothing. I mean, the salesman was getting the lead, running the lead, selling it, scheduling it, ordering it, managing it. I mean, it was just, it was crazy to think of what we were doing 4 years ago. But yeah, production was next. You know, we had to get a process from the firewall. When the job's sold, what are the correct scope of work that needs to be done, the signed contract, the deposit, all that. And then we hand it off properly to the production manager. So I think all in all, my brother and I developed this process. He didn't tell us the process, but we obviously, you know, changed it to fit our dynamics of the company. And it's still going on to this day. We're always improving the process. If you don't have a process, you You're just— it's gonna crash. It's just headaches.

Yeah. Well, and also you're a slave to the business.

Yeah.

Because it's all, it's all dependent on you.

Yep.

Yeah. Michael Gerber said, what do you say, for the business is dependent on you, you have a, you have a job. Something like that. I paraphrase, but something like that.

The E-Myth guy, right?

Oh yeah, Michael Gerber, The E-Myth.

Yeah, I'm listening to it right now actually on my audiobook.

Yeah, so you mentioned that earlier. So, you know, you, you tackled price, you talk— you tackled your sales process, you tackled production and a bunch of other details. But one of the most important pieces of that that I think is an absolute requirement is your mindset. Your mindset, your partner's mindset, in this case your brother, um, your whole, um— talk to me a little bit about how you guys had to change how you thought about the business and what you believed in the business, or what you believed was true. And how you've kind of— because just as an example, I mean, before, 5 years ago, you guys believed that, you know, we sell at a 15% gross margin, we're losing money, and this is just how it is. And then we go on unemployment when the wet weather hits. At some point, you made a decision that said, you know what, we're not going to do it this way anymore. And you took a new path. So what are some of the things— I know you mentioned audiobooks and training— but what are some of the things you had to change in your own minds in order for you to get in a relatively short time to a nice, very successful business?

I, I think a lot has to do with, um, uh, well, for me, I speak for myself, is I just— like any, anyone, you can get down in your dumps and always focus on what's going wrong in the company. And I think having a business coach that could guide you and always remind you what you're doing right and how far you've come. And for my brother and I, that to change our mindset was basically networking. I mean, we would try to go to almost every event possible and always talk to the companies that we wanna be someday. And I still do that. I mean, I know I'm on this podcast right now, but realistically, I'm still learning every day and I'm still talking to the big companies, even the ones I've listened to on your podcast. Because I'm only in the beginning stages still, even though I got the processes done. I still have to search, I still have to listen to podcasts, audio tapes, go to more events other than the CCN, because I see that I'm a young man and so is my brother and we have a lot of potential, but, you know, to keep a positive mindset, you've got to be around companies that are where you want to be and talk with them because It's really inspiring. And, and I, and we listen, you know, we, me and my brother have our meetings and, you know, we just always try to keep a positive mindset outside of the work and focus on our goal. We begin with the end in mind. I, and I always believe in that, you know, every right in front of me and my, my, my whiteboard is my goal, everything. I look at it every day.

That's awesome. So you're very clear on why you're doing things the way that you're doing them. And what you want to get out of it.

That's right. Yeah.

Yeah. And, and look, you know, what's, what's interesting too about you is the seeking out other people. I, I say it all the time, and I'm sure I've said it here before, is that that is one of the keys to the most successful people you'll ever meet. I know people that do $100 million in this business, and guess what? They're always talking with people. There's always something to learn regardless of where you're at. I think the minute you stop doing that or you start to think, well, you know, they've arrived somewhere, or once I get here, then— no, it's an ongoing process. And even the best, the reason why they're the best is because they're seeking out other people and they want to talk and they want to learn. Because right now, what's interesting now is you're, you're, you've created something that has leverage, and leverage is a wealth strategy, right? So you're part of your leverage in your business, for example, is your 5 salespeople. What would happen if you're at an event, you talk with somebody, whether it's a $3 million person, a $300,000 person or a $300 million person, and you got one little idea out of it, just you heard one little thing, and you went and you put that into your sales process, and all of your guys went up by a point. What would that do to the bottom line at the end of the year, at the end of 3 years?

Oh, it's a ripple effect.

Absolutely.

That's why That's why you gotta go to these. I mean, I go to these with the same notebook I got, all these events and conferences, and I always go there with questions and who I'm gonna target to talk to. That's my goal, is to find this person that I've researched and I know, these are the simple questions, I don't like to get too intrusive, I just, you know, I need to know, you know? I mean, we're at about a $4 million revenue company right now and I wanna get the 5. You know, and, and then I want to get to 6. What is the average percentage? I should look at growth every year. You know, I mean, it's talking to the Charlie Gundels or the Brian Kaskavalciyans from Tangerine. It's talking to these guys who have the same urgency and goals to get there, you know, and I need to be around that. It helps me.

Yeah, no, that's awesome. I think that's fantastic. So I also You know, one of the things I really wanted to ask you about and talk and spend a few minutes on is your partnership. You know, you have a business partner, happens to be your brother, which, you know, on the, on the outside, so, you know, a lot of people would say, well, you know, it's his brother, it's easy. Well, no, I've seen it in a lot of cases where it's actually worse. But you guys are making it work. What would you say, you know, what advice would you have to somebody that's, that's a, that's in a partnership right now? What are some of the things that you guys are doing to make the partnership successful?

Communication. I think my brother and I, you know, we've been best friends since day one. And I'm an open book with Greg, and I know he is with me. And don't kid yourself, we do have our hot moments, but we both realize we're also business partners in that we do need to have more, better communication. What's also good is having a business coach so we could each talk to this individual outside of each other's conversations, which really helped. My brother and I are complete opposites. I'm the gas pedal, he's the brake. He's the bookkeeper, I'm the spender. So, but we complement each other very well. I'd like to say we are a phenomenal team. And the other cool thing is my two younger brothers work for me as well, you know, and I'm polishing them as they grow in this business as well as we grow.

That's great. You know, what's interesting is that the whole opposites thing, I think, you know, a lot of people think that or the mistake that they, they make is they get a partner that's maybe just like them. In a lot of cases, I think the most successful partnerships are the ones where you, you have very opposite different skill sets. So one per— like you said, one person's the gas pedal, one person is, is the brake. And I think that that's very healthy. One person is like sales, but another person is operations. And I think that's always very helpful. Do you guys have set times where you get together and you meet, you go over, you know, okay, here's where we are, here's what we did, here's where we're going?

Yes. So the first week of every month we do our business planning. We basically go over our books and kind of go over, you know, the trend of what's going on. Q1 this year was really slow for us in the Chicago land area, the winter wouldn't go away. And so sales were down. And when stuff like that happens, we have to keep on top of any changes that need to be made in order to make it up at the back end of the year. But weekly meetings, but we also have drive time with each other. You know, he has an hour ride home, I usually have about 45, and that's when we talk. You know, we always talk 3 times a week on our rides home and we just discuss what's going on. I mean, we are always talking with each other.

That's on the phone? You're going— yeah, okay.

So we have a week in person in our offices. It may take 1 or 2 days just to get all the, you know, everything organized as far as the previous month. And then usually during the week, we're on the phone with each other on our rides home going over, you know, what's going on, you know, trends, sales, the production. Now, you know, now we have a big marketing budget. Now we're consistently talking about marketing, you know, because now that's a— since, since 4 years ago, we had a— we basically had no marketing, not even a website 4 years ago, to basically— we're at about an 8% marketing right now, which is different for us because we're not used to that. So now it's a big discussion on what we're doing.

Yeah. Do you have very defined roles in the business of he's responsible for this, you're responsible for that?

It's funny you ask that question. We were having kind of a wearing too many hats crisis and wearing each other's hats. And after visiting a company last month and sat down with one of the owners, he really opened our eyes on where to position our company. 'Cause we're still at those stages where we're wearing a lot of hats, right? Right. So what's going on is my brother will be now taking over production management, as in running the production department, as well as the admin offices. I'll be moved fully to sales management and marketing managing, switching offices. We have two offices. So, and then we're taking on some more hires for as far as a call center goes and a customer care rep. But yeah, we have to split it up a little bit better here. You know, right now I'm running production and sales and marketing, you know, and then he's managing a couple salesmen. It's just, it just doesn't make sense. And again, it's always improving the process. Who are the best fit people in certain areas? So, right.

Yeah, it's about process. It's about people. So I guess as we, as we kind of wrap up, here. A lot of good stuff. I mean, I kind of— the thing I want to ask you is, because you, you guys have done amazing over the last 4 years. I know we've, we've known each other for a couple of years. I know we met you guys kind of in the middle of this, of this transition. And I wonder, though, is there anything or any couple of things that knowing what you know today that you would have done different that might have made the process easier for you?

Um, you know, that's a good question. I think I would have went to more networking events and had more schedule of who I'm going to talk to. And instead of just going there and being quiet, I was very, you know, because I was, you know, 27 years old and just kind of timid. And because you're looking at all these people you're inspired by, but everyone's there to help you. And if I was able to just turn my attitude around and really, really get with the people I know that could get me from A to B quicker, I wish I had a better game plan on that. However, there was a lot going on, you know, I mean, all these changes that happened within a year was just enough, enough stress at that time. So If I had to give any advice to anyone, that's raise your price if you're not making it. You know, it does a world of things. Yeah.

Well, cool, Mark. Well, look, I appreciate you taking the time and giving us your story. I love the story. I think, you know, I say this all the time. I got it from somebody else, but it's always so true. Success leaves clues. And if you listen to what Mark said, and then you go back and you listen to what some of the other people have said on this podcast, or in books, on audio cassette, wherever you get your information from, and you, and you learn about very successful people, success always leaves clues. And a lot of what Mark just kind of laid out for us very nicely, by the way, in a very short period of time. I mean, he just basically gave you the plan for how you grow a successful business, a successful home improvement business. So I thank you for that. That's fantastic. And to all of you listening, this is Brian Kaskavalciyan with G4 Marketing, and thank you for being on this episode of the Wealthy Contractor Podcast. Until next time. 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.