Profit Changes Everything | Brian Kaskavalciyan

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. Hey everybody, Brian here with a Another special episode of the Wealthy Contractor Podcast. So last week I put out a special Independence Day message about freedom, and we got a lot of really positive feedback about it. It was one or two episodes back if you want to listen to it. What's interesting though is how many business owners reached out to say that they agree, but we all have this Freedom Challenge that we deal with in our businesses every day. And like I said in that episode, if you don't have a clear vision for your business, your business will take on a life of its own and it will make you its servant. So you'll end up working for it rather than it working for you. Because I say it all the time, your business is only a vehicle. It's only a vehicle that is used for you to live the best version of your life, whatever that means to you. And so instead of getting the freedom that you crave from your business, you may end up in an endless loop of more and more work. And so the question was, the real question was, so how do you break free? And in all of my years in business and with all of the wealthy contractors I've worked with and spent time with, You know, the number one weapon that's worked better than any other is profit. Profit helps you hire good people who you can trust to take the response, you know, some of the responsibilities off your shoulders to go and get the work done. Profit helps you train those people, purchase good equipment and vehicles, and provide a wow customer experience that will help you market your business. With profit, you can advertise and grow your business to new levels. With profit, you can afford to pay yourself well and give you and your loved ones the life you deserve. Quite simply, profit done right changes everything. Now, in order to become profitable, not only do you need to understand the mechanics of profitability, but you also need to have the right mindset about money itself. See, we all have a relationship with money. For some of us, it's healthy. For others, it's a struggle, and everything in between. And in our industry, there are too many contractors working way too hard for way too little. It is really shocking to me what little profits people are willing to accept in this business. I can't tell you how many home improvement companies I know of that do over $10 million a year and only make a few points to the bottom line. Personally, I think anything under a 10% net is shaky ground. But who taught us to be profitable when we went into business? Who taught us the right way to set up our books, our pricing, our profit model? For most of us, it was no one. We had to figure it out on our own. So that leaves too many good, hardworking people thinking it has to be hard, that they need to build a $10 million business to get rich. So they just focus on growth and more and more sales, hoping that the money will just show up. Well, I'm sorry to break it to you, but it doesn't work that way. How do I know? Because not only did it happen to me, but I see it happening to others nearly every day. Now, I'm very fortunate to not only have over 200 really great clients in our G4 business, but also people that come to our events, listen to this podcast, and have read my books. This allows me to ask people pretty pointed questions because it's no secret what I believe about money and mindset. So people share things with me they probably don't share with others. So when people have questions about their business, their marketing, their sales, whatever it is, I almost always ask the question first, tell me what you want from your business. Because without a real understanding of what you want, I'm not just going to start giving you advice. Like, I can give you the best marketing advice, the best sales advice you've ever gotten, But if I don't really understand what it is that you want, it might not do you any good. Now, invariably, people will tell me they want to create some multi-million dollar company. $10 million is a very popular number, and my reaction is always the same. That's great. How much money do you want to make? That's how much you want to sell. I want to know how much you want to keep at the end of the day. Almost without fail, this question stumps people because it's not a question we're used to being asked. So I dig. "Let's talk it through," I say. "How much money do you need to live your 'ideal lifestyle'? How much money do you want to contribute to your future wealth?" By the way, this is based on an exercise I developed called the Four Numbers. Those of you that have been to Accelerate or read the Seven Secrets book will be familiar with it. Anyway, in more cases than I can count, when I ask people how much money they want to make, they give me a number between $300,000 and $500,000. Now I'm going to tell you right now in this whole conversation that the numbers themselves do not matter. The numbers themselves do not matter. I'm just sharing with you, you know, what I get. Okay, so they tell me $300,000 to $500,000. Then I say, okay, great. Well, you told me earlier that you want to build a $10 million company. Yeah, they'll say. Then I'll say, well, but you don't need a $10 million business to make $500,000. You just need a really well-run $3 million business because $3 million at a 15% net is $450,000. Plus salary and benefits, you get over $500,000. Now, this generally leaves people confused. And part of the reason for the confusion goes back to what I said earlier is because, I mean, who taught us about profitability, right? Most people are just trying to figure it out themselves. So this leaves people confused. So that tells me that either A, they don't understand the numbers of their business, or B, they haven't really thought through what they really want from their business. Now, to make matters worse, I'll ask them where they are today and how much profit they're making. And again, in most cases, it is not optimal, 10% or less. Generally a lot less. So I explained that if your quote-unquote profit model is broken at you doing, say, $1 million or $2 million, it's going to be broken at $3 million, $5 million, $10 million, $20 million unless you do something about it. Now ideally, they need to fix their profitability first Then we can work on the rest. And now I don't know about you, but I'd much rather make half a million dollars from a $3 million business than from a $10 million business, right? Just think about the number of leads you need, the number of jobs you need, the number of salespeople you need, the number of installers, all of that, that you need to do a $10 million business when you can make the same amount of money or better on a much smaller business. Now I may then throw out that, well, if you do a $10 million business right, you should make a personal income of $1.5 million a year. And I'll just let that sit for a minute. Now you told me your number is 500. Do you want or need to make $1.5 million a year in income? Now an interesting thing will happen here. Either I'm gonna get, well, that would be nice, or no, I, I don't need that much, because we just did the exercise and we determined that for now— for now, this doesn't mean this doesn't change, but for now their goals are half a million. Now the first answer, though, that would be nice, what that tells me is they're not really serious about their goals. They're just not really serious about their goals. The 'that would be nice' means it's pie in the sky. It's a dream. It's a wish. Now, the second answer actually shows emotional maturity. That's a person we can help, because as much as I would love to be able to help get you, or whoever I'm talking to, a million dollar a year income, If your head's not right about it, it's gonna be an uphill battle, and I'm sorry, it from my experience ain't gonna work. Now again, I, I'm gonna say here again what I said earlier. The numbers themselves do not matter. Your number is different from mine, and it's different from the thousands of other people that are listening to this podcast. Okay, for some people, $300,000 would have them doing somersaults down the street. For others, it would cause absolute abject misery. Everyone's different, but here's what's important. The principles are the same, exactly the same. Now, once we get this out of the way, this conversation out of the way, now we can have a real conversation about moving the business forward. Forward. Now, I think, you know, I could keep going with this because these conversations are much more complicated than what I'm laying out here, but I think you get a general idea of the point that I'm trying to make. So let's go back to freedom and profitability. There is no freedom without a good profit. Good profit means you have a healthy business. It means you understand your numbers. It means you'll have the resources you'll need to grow your business. It also means you have the right mindset or relationship with money. I wrote an article some time back called something like, Does Money Like You? And if your business is profitable, very profitable, meaning the business or the money actually sticks right, it wants to stay with you, then money likes you. But if you're just turning money, you're doing $10 million a year and hoping that maybe a couple hundred thousand is going to fall out at the end, money doesn't really like you that much. Okay, now, because now the other side of that same conversation is, okay, you want to make $500,000 a year, what is the most you've ever made? Most people have never made $500,000 a year. That puts you solidly in the top 1% of income earners. The challenge with that is that they don't know what it feels like to earn $500,000 a year. Again, the numbers don't matter. They don't know who they have to be in order to make that kind of money. I'm going to say that again. They don't know who they have to be in order to make that kind of money. And incidentally, I think that is the real work. See, the mechanics of profitability are, are simple. They're not easy. They're not easy, but they are simple. However, making more money is almost entirely tied to our feelings about and our relationship with money. What did we see, hear, and experience growing up about money? What do the people around us every day think about money? It's funny— well, sad actually— how when we go to industry events, everyone is always talking about sales. Unless you're going to one of mine, I should say. But no one's talking about profit. Again, unless you're going to one of mine. See, how much or how little money you make is almost entirely driven by your thinking and beliefs. Again, the mechanics are relatively simple. Now, I told you before that I really believe too many people in this business are working way too hard for way too little, and it's one of my personal goals to change that. I also happen to believe that some pretty major changes are going to be coming down the pike over the next couple of years. As I record this in July, you know, business is booming, but it's slowing a little bit. There's going to be a quote-unquote normalization. We don't know what that's going to look like, but we know, those of us that were in business in 2008 and 2009 and 2010, we know what it's going to do is it's going to thin the herd, if you will. The companies that are weak aren't going to be able to make it. Right now, leads are plentiful, people are buying, but that's not how it always is. We're in a weird environment. This is an anomaly. It's not going to continue like this forever. It's going to stabilize, and when it does, the people that have the good profit models they're going to survive and they're going to thrive. The people without solid profit models, they're going to have a tough time. And unfortunately, many of them who are really good, decent, hardworking people are going to go out of business. So that's why in September I'm going to be hosting a 2-day workshop here in South Florida on mastering the fundamentals of profitability. Plus Wealth Attraction for Contractors with my good friend Mark Curry, who owns Your Remodeling Guys. And it's something you may want to consider joining us for. If you were at Accelerate Live this year, you know that I asked Mark to speak on the subject of profitability and he delivered. Boy, did he deliver. So much so that for weeks after his presentation, I was getting messages with more questions for Mark and asking if I'd make introductions to him. So in an effort to be efficient, I asked him if he'd expand on the topic by doing this 2-day intensive workshop on profitability with me. And thankfully, he said yes. He's a good guy, you know, he's really, really done well. He's had major ups and downs, but, um, He wants to help the industry, and he's really excited about what he's going to be presenting— what we're both going to be presenting. Now, this workshop will be unlike anything that's been done in this industry because, like I said, with most events, the focus is always on just getting more leads and more sales. But at this workshop, Mark and I will show the attendees how to design their businesses to be permanently profitable once and for all. Step by step, if you decide to join us, you'll discover exactly what you need to do to achieve a 15 to 20% net profit so you can use that profit to grow— not only grow your business, but grow your personal wealth. This is going to be like getting a 4-year degree in accounting for home improvement businesses without the boring 4 years. Now, by the way, Mark is one of only a handful of people in this industry that I would trust to teach this subject. Mark is the real deal. And during these 2 days, you will have his undivided attention as he helps you navigate through the complexities of profitability as it relates to home improvement businesses. Now, aside from the mechanics of profitability, we were never taught how to think, act, and make decisions like a multimillionaire home improvement business owner does. So there will be a special bonus session on wealth attraction. And you've heard me say this before, but one thing I know for sure after nearly 30 years of being in business for myself is just how important mindset is to success. You can absolutely become a multi-millionaire from this business if that's what you want. And by the way, you don't need a $10 million business to do it. I have at least 2 dozen clients that are legitimate from scratch millionaires because of this business. What they all have in common is a deep understanding of profitability and their businesses are set up to be consistently and permanently profitable. Now, when I say permanently profitable, that means making money by design, not by accident like so many do. Permanently profitable means that you are making money month in and month out, year in and year out. And permanently profitable means you have the resources you need to provide your team, yourself, and those you love with the lifestyles they deserve. And that's exactly what we'll be delivering during these 2 days. At this point, we're over 50% sold out. So if this sounds like something you'd be interested in, go right now to thewealthycontractor.com profit. If you sign up before July 16th, you can use the coupon code EARLY21 to get $500 off your ticket. E-A-R-L-Y-21, and that'll get you $500 off your ticket. Now I'll tell you this, if you are really serious about the success of your business and you want to master the fundamentals of profitability and have the right mindsets to develop wealth, then your decision on this should be easy and you won't want to sit it out. By the way, as with everything we do, there is a 100% better than risk-free guarantee. And it's simple. You come and spend 2 days with us. And if at the end of those 2 days you are not thrilled with the content or the value, you just let me know and I will give you 3 times your money back. Yes, 3 times your money back. That's, you know, one, the risk should be entirely on us, but also that's how confident we are in the life-changing material that we're going to be presenting. So this is an opportunity for a few business owners to transform their businesses, their personal wealth, and the lives of those they care most about. Seating's limited. So if, again, if this is something that you're interested in, go check it out and secure your spot now. So to wrap up, you know, like I said in the Freedom Podcast, in order for you to truly create the freedoms you desire in your life, you must first be absolutely clear about what it is that you want, and then You go and build the business around that. And you've got to be 100% responsible for every result and every outcome in your life. Every wealthy contractor I know understands that good, bad, or ugly, we create our reality. Only when you accept the fact that you and only you are the creator of your reality, can you ever be free. Because in every moment, you, me, we have a choice. If we aren't getting the results that we want, we can change the way we think, we can change what we believe, and we can change what we do. It is up to you and you alone to design your business to deliver the freedoms you intended when you started. Remember, like I said at the very beginning of this, your business is only a vehicle for allowing you to live the best version of your life. When you take control of your business, your profitability, and your thinking, only then will you experience the true freedom of being a wealthy contractor. So until next time, this is Brian Kaskavalciyan with G4 Marketing Group, and this is the Wealthy Contractor Podcast. Thanks for listening to today's episode of the Wealthy Contractor Podcast. Let me ask you, did it help you look at your business in a different way? Did it spark an idea or ideas that 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. If it did, I'd like to ask you a favor. Would you leave a 5-star review of the podcast? By doing so, you'll help other contractors find the podcast more easily so that we can help them achieve more success, wealth, and freedom. And 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. In fact, if you haven't already, make sure you go to thewealthycontractor.com and get your free copy of my latest book, The 7 Secrets to Becoming a Wealthy Contractor. Just pay shipping and handling, and I'll take care of the cost of the book. So until next time, this is Brian Kaskavalciyan.