Phases of Contractor Growth: Essential Strategies for Expanding Your Painting Business w-Danny Kerr

This is Daniel Honan, CPA and founder of Bookkeeping for Painters, and today I'm super excited to have Danny Kerr. Danny is one of North America's top contracting thought leaders and a well-loved industry speaker, assisting hundreds of contractors every year to build kick-ass profitable businesses. His entrepreneurial journey began in his teens when he started a painting company and as he got his life on track following a tumultuous upbringing. Since 2015, he and partners Igor and James have built Breakthrough Academy into the foremost industry experts on operational systems implementation with $1.9 billion in revenue currently under management. He's got a no BS approach and leads with heart to build the community of hungry, humble, and smart contractors around him inside BTA. He also loves the F word: faith, family, friends, fitness, financials, and in that order. Welcome to the podcast, Danny.

Cool, Danny. Yeah, thanks for having me.

I am super stoked to get into this topic today, which is the 4 growth phases for contractors. Uh, you showed me this awesome breakdown of it, and so I'd love to just jump right in and get our hands dirty with this topic.

Let's do it. Let's do it.

All right. So can you kind of give us an overview of what are we talking about when we say 4 growth phases? How is this helpful? What is it that we're talking about here? Totally.

Yeah. There's, I mean, in contracting, there is a, everyone thinks their business is super unique and it's only them that deals with this type of stuff. But reality is, especially when, you know, you do the work you do or I do, we get to see everyone's business, right? We get to see the patterns that exist in the industry. And there are for sure, at minimum, I would say, you know, 4 stages that a company or an owner will go through as they're starting to grow their organization. So, um, yeah, after 10 years of doing Breakthrough Academy, I mean, we've taken those patterns and we've started to say, hey, let's actually define what these nail stages actually are and how do you know when you're in them and what are the things you want to work on when you're at these certain stages. Who do you want to hire? What should you as an entrepreneur be focused on for your own self-development to make sure you're kind of getting ahead of the curve? Because If no one tells you this stuff, you'll just end up hitting barrier after barrier after barrier, and you have this idea of like, I've mastered this thing, and then this new thing comes and hits you in the face. So this hopefully will just give some perspective to, you know, where you're at, where you're going, and make sure you're a bit more proactive in your approach of what to build and yeah, what to be working on and focused on in the organization.

So it makes a lot of sense. I know working with a lot of painting businesses, you kind of see this, the trends, like you were saying, the same things come up over and over. And a lot of folks, you know, get stuck in the day-to-day. And even myself, like, I, you know, running businesses, you know, you kind of get stuck in the day-to-day. You can't, you don't have that outside perspective where someone's done it before and they have a bigger bird's-eye view and know what the constraints are that you're facing in your business. And, you know, a lot of— I know I feel like, oh man, I have so many things going on, but really there's probably a couple of key things that I need to pay attention to to unlock the growth to the next, to the next level. So I love this, this, you know, this growth phase that you have broken out at these 4 different levels. So I think we could just start from like the bottom level, the operator level. What are the big constraints? What are the things? What does this look like for the operator level? Like, who is this that we're talking about and what are some of the constraints that they're facing?

Yeah, so this is most businesses in painting specifically that would probably be between like $0,000 and maybe $750,000, maybe $1,000,000, but usually around $750,000. And they're kind of, you know, they're in startup mode, right? They're in this place where this business is first, it's like They didn't even know it was business. A lot of times it's just them painting houses and it's turned into something a little more than that in the last little while. And the first thing they gotta figure out is like, how do I actually make sure I keep, you know, dollars coming into the door? So I see a lot of people at this phase, their number one need is just sales and marketing, sales and marketing. I need more work. How do we get more work? And in that pursuit, you'll start to identify patterns, right? You'll start to say, okay, these are the customers that make the most amount of money with. This is the people that I, I please the most. This is the kind of work that I should probably niche in. And that starts to tell you A, what your marketing campaign should be. It should be all around your ideal candidate or client. And then B, just like making sure that this is the type of work our company can do. We can be profitable with this and we can replicate this. I don't have to be, you know, on every single site at all times. So in that first phase, it's not only just figuring out how to get the work in, but it's figuring out who your ideal customer is and how to stay niched into that marketplace and start to build an organization and build a brand really out of that, which will grow over time. And as you're doing that, to know that that's going well, you need to have a, I would say, the first like numerical thing you have to have your eye on, which is just job costing. If you good about jobs and feel bad about jobs and that's your litmus test for how much work you're going to take on with certain, you know, people in the industry, you're running pretty blind. And so you need some sort of way at the end of the day to sit down and say, okay, we had a budget to produce this job with this much in paint and this much in labor cost. How did we actually do? And so, you know, back in the day when I used to run a painting company, we did job cost cards. It was like a, you know, weekly ritual that we would do and sit down for probably 3 hours at the end of a week on a Friday and just see how do the projects actually do that we're working on. And it's good not to just calculate how you did, but have a goal against it. So I do challenge a lot of people this, it's early stage, but start to think through like what are the standardized ways you can do estimating? So is there a way to get a price that's pretty predictable? And do you have a budget on labor and material? And how did you do against that budget? And get used to actually calculating how you're doing versus the goal you set for costs.

Love it. Yeah. So there's a few things you said in there.

Yeah.

One is the, the sales and marketing is usually the focus at this level. You know, getting the leads in, you know, especially as you're starting, figuring out what, what channels that you need to focus on to get those leads coming in. Then we also figure out your niche. I think this other thing you said, which is, you know, are you focusing on cabinets or interior, exterior, or, you know, whatever it is you're focusing on? What, you know, what, who is your customer avatar? Like, who are you trying to serve and what service are you providing them? And then, and then the last thing was, is job costing. So make sure you're actually being profitable by reviewing that job costing weekly. Um, and so, you know, it reminds me of— I just had a conversation, um, last week where there's this painting business. They were doing cabinets, um, and they're, they're small. They're doing like $400,000 in, in revenue yearly, and they live in a— or they live and work in a pretty big city. However, they were thinking that they should add more services to grow. And, you know, I was asking them why, and then they thought that they had hit the cap of what the city could take in terms of— they were doing cabinets, so they felt like they had saturated that market and they had to expand their service line to do more things so that they could get more revenue. And I think that's a common misconception is that you're hitting your market cap in these larger cities. Maybe if you have a rural painting company or something, but there's cabinets, folks that niche just in cabinet painting and they're doing 2 or 3 million a year pretty easily in these larger cities. So I like how you highlighted the fact that figuring out your niche and sticking to it so you can create those processes and those procedures in your company to allow you to scale, I think is something that a lot of folks might miss.

Yeah, if you don't figure out your niche, you're going— or niche, I guess— you're going to basically be all things to all people, which means you're going to fade off into the static, right, with your competition. But if you become the best at exterior house painting or you become the best at commercial renovations, if you become the best at, you know, like you said, spraying cabinets, you can build a brand around that and you can dominate on the market. And if you're in a market that's like 5 to 30,000 people in the population, I can see where you might start to kind of— growth might start to become a problem based on one offering. But yeah, like anything that's over 30,000, usually I see a lot of 50 to 200,000, you know, city, you know, residential areas that people kind of operate in. You can build a $5 million business out of that. And for most painting companies, that's kind of the cap unless you're going to go commercial or you're going to franchise or license by geography. The path to $5 million is fairly well thought through and it's what we're going to go through today. But above that, you're going to get into some very different stuff and most companies are not there yet.

So, yeah, that makes a lot of sense. The other thing I love, of course, is job costing. Gotta make sure you're profitable. That's like the number one thing when we're first bring on a client is looking at, you know, their pricing. Are they pricing correctly to actually hit what they want to hit in terms of their, their gross profit margin? And, you know, often that's, that's not, that's not on target. That's usually the number one thing is the pricing is off. And so their job costing is off. They're not hitting that, you know, 45% or 50% gross profit. So I would definitely agree at this level or pretty much all the levels, but you got to dial this in. Are there any like common pitfalls you see with job costing or gross profit, you know, hitting the targets there?

Yeah, the biggest one is that if you're job costing and you're not including your cost of labor because at that stage you might still be producing some of the jobs yourself, you don't know your true profitability on the project. So when you're estimating, so when you're actually calculating the cost of how much labor cost and you may have put in 5 hours or 20 hours or half the hours into the project, you need to give that a cost because otherwise you could be like, yeah, I'm great. I hear other people make 45%, I make 65%, I'm great. And I'm like, yeah, but you paint half your projects. Yeah, well, gotta make a living somehow. And I'm kind of like, yeah, but you don't know if you ever pulled yourself off those projects, if they're truly profitable to sustain themselves as you grow your company. And you just said it, 40 to 50% gross profit anyways is the margins that painters should be going for, for residential and I'd say average job size is below $10,000 anyway. Um, and you need to know, and the only way to know is to put yourself in. It's a cost of labor.

Yeah, that makes a lot of sense. Yeah, if you're painting on the job site, make sure you have the market rate of your— what you would have to pay someone else to, to do that job built into that job cost. Otherwise you're kind of kidding yourself. Um, but yeah, it's easy to overlook, but yeah, that's, that's an excellent point. Okay, so $750,000, we're in the operate and below approximately. We're doing all the sales and marketing, and then maybe we have crews that are doing the work. And then folks hit this cap, like this bottleneck where they're having to do all the sales and all the marketing. I'm sorry, all the sales and all the production management. And and then they, they can't really do anything more. So I think this is the next level, right? The manager level. Can, can you talk to me a little bit about that level?

Totally. When you feel this burn, and sometimes it's a little later, sometimes it's a million, but it's, it's somewhere in this range where you're starting to feel like I'm working 65, 85 hours a week and I have no more time to put into anything. And I'm actually going so fast now, things are slipping through my fingers. Um, and this is time where you need to hire help. A, you need to make sure you're profitable to be able to afford that type of help. So if your gross profit margins are sitting at 30% and, you know, you're trying to afford an $80,000 production manager, it's hard to justify that, right? So you got to make— that's why I said early on job costing is so important. But once you can start to justify it, you need to say, okay, I need to decide between an office administrator, a production manager, or an estimator. Probably can't hire all three at once. It's probably too much to too heavy of an overhead cost to bring in all three at once. But I need to pick between one of those three, and that's the first person I need to be able to bring in so they can alleviate my time and some of the stuff I'm doing. And the quickest way to figure this out is— and it's usually the office admin, to be honest— but it's like, do all— basically write down all the stuff that you do in a week, circle the stuff that's high time consumption but low skill. That's probably the next role you need to hire for. I could even just literally be a site gopher. So someone to go around site to site. So these roles will start to present themselves. $750K, it's office, often an office admin. Sometimes it's a production manager first. I usually see sales as the one that we're estimating is the one that the entrepreneur lets go of last, but it's one of those roles and it's there to help you step back a little bit and start to work on the business. And that's the other thing where people get a little bit thrown off is they put someone in place They don't work on the business and then they lose that person or that person ends up costing them too much or they don't grow as much as they should and suddenly they're back to basics. So getting to this place, it's like pick one of those three roles: office admin, production manager, or an estimator. Once you've got that person in place, your job is to work on the systems in the company, right? So CRM project management software can be one of the first like big things that you could start to go for. So you can pick which one, there's a lot of them out there. Jobber or Estimate Rocket, Jobber, Builder Transform for builders, that'd be more commercial, but what else would be good for these guys would be—

Drip Jobs, Paint Scout.

Paint Scout.

Paint Scout. Yeah.

So there's a few. Go do your research, pick one. Cool. Now that you've got that, you're going to have an ability to look at more than just, you know, job costing itself and you can start to look at how the sales metrics are going, how the production metrics are going, how the hours are being produced on every project. And you can start to build out a bit more of a business plan, right? So instead of just doing job costing on a job, start to think about how do I budget out the year and start to project if I'm going to go from $750K to maybe $1.2 million. And if I do that $1.2 million, I'll make whatever, 42% gross profit. And with that 42% gross profit, I'll pay for that new production manager salary and that new CRM cost and all the new costs that come into a business, right? Budget out the year in advance. And project your growth and have a goal on that growth. And if you've done a good job in the early stages of, you know, securing your sales and marketing funnel, you can be a little bit more confident than on the fact that, hey, I could actually grow if I get this many more leads, I can do this many more quotes, I can book this many more jobs. You can start to calculate this. It's mathematical. And you go, okay, cool. $1.2 million is the goal. We're gonna hire one new role. We're gonna add it to the overhead. And I'm going to work on systems for the organization. So that's the next big thing. And there's a lot more we can go into, job descriptions and org structures and all that stuff. But the basics is CRM, project management software, followed by a bit of a budget. So you have a bit of like a company's like financial plan for the year, and then starting to kind of like give that person more autonomy so you can have more time to work on the business itself.

Yeah, makes sense. So, so you basically, you're, you're if you're at the operator level, you're getting into the manager level where you're hitting that ceiling where you're doing all the sales and production management, evaluate your time, what's taking you a lot of time but doesn't require a ton of skill. And then evaluate, you know, like a time audit, I think some folks call it, where you actually go back and look through your calendar. What did you do? What did you spend your time on? What are the low-skill items and bundle those skills together, those tasks together, and then maybe it's an admin or maybe it's a production manager, and then you look for that role. Do you have any rules of thumb for— it is somewhat based off geography, but how much should you pay a production manager or pay an admin person. Do you have any strong feelings or thoughts on that?

It varies on the role, the actual job description of the person and how much they're actually taking on. But I mean, office admin can range from $60,000 to $70,000, or sorry, from $40,000 to $70,000. Um, $70,000 is on the high end. They're actually helping you build parts of the business. $40,000 is on the low end, probably just helping you do the basic administrative stuff. One thing we missed in all this too to say is like you should be having QuickBooks at this stage as well. Like if you don't have it, you should have it. Someone should be entering all the stuff in the QuickBooks, make sure all the numbers are tight, even on a basic level. Manager, I mean, again, that can range from $60,000 to $100,000. So $60,000 is a basic person taking on the orders you give them and executing on the job. $100,000 is probably getting to know the customer well, collecting the check, organizing, coordinating everything that has to do for all things production. You're just handing off a contract and mine's done with it. Um, and then sales and estimating, that can really vary because you can put them on a comp structure that allows them to make as much as they possibly can based on how much they book. Um, so, you know, somewhere like a $40,000 to $60,000 base probably, and then basically everything up from there is all bonus based on their ability to book work. And estimators should and can be able to make $80,000 to even $120,000, let's say. Nice. Cool.

And so go ahead.

Some ranges. And I was also going to say like these hires of these key people, like they do happen no matter what at this stage, they just happen one at a time. And, you know, we're talking about going from $750K to actually probably about $3 million before we get to the next stage. So this slowed from $750K to $3 million involving like $750K, got an office admin, came at $1.5 million, got a production manager, came around $2, $2.5K, got a sales or an estimator. And slowly you're building that overhead up as you're growing revenue.

Makes sense. And all the, all this time you're, you're building the system and then documenting it and creating—

What is the workflow for, from everything? I've gotten your name and the email from a web, you know, from our web, whatever, lead capture thing to you've paid me and I've invoiced you and you're referring me regularly. What are all the steps that are involved in that and what potential roles could be existing in the company to enable that workflow to be passing like a production line from one person down into the next. The reality is you might be documenting it and covering 2 or 3 of these roles, and your production manager might be doing 2 or 3 of these roles, and not everyone's 100% in their role yet, but you're starting to like document this is the workflow so that as we grow and scale, we can add people and time or add job descriptions to this workflow so it becomes its own machine.

Mm-hmm. Yeah. Excellent. Makes sense. And then I love the piece where you're budgeting, you're budgeting all this together, which budgeting I think is just a fancy word for planning, right? Because you're just planning with numbers really. You're saying, here's my goal of whatever the revenue is, you know, $2 million. And then you do the back work. Okay, what do I actually need to do? What actions do I need to take to get to $2 million? And then if we're doing $2 million in sales, how do we, produce $2 million in work? How many crews am I going to need? How many production managers I'm going to need? So just doing that back work to figure out all the actions you need to take to hit your goals.

Okay. Yeah. Quick, quick math on this, right? Once you've figured out, let's just use $2 million, $2 million at a 40% gross margin. Cool. So after I do all those projects, I'm going to have $800,000 left over. What do I do with that $800,000? Well, I got to pay some salaries. I got to pay my office admin and make my estimator. I've got to get all my trucks and my gas and my advertising costs all put in there. It's like, great, after all that, looks like we'll make, you know, usually 10 to 15%. It's usually what I kind of see. So great, we're going to make $200,000 to $300,000 profit for the company. At this stage as well, just like I said at the beginning stage, you put in your cost. So even if your cost is a manager at this point, you're one of the manager salaries, put yourself in there so that you can see it's sustainable. Business can handle itself even if you replaced yourself. With somebody being paid to do that role. That kind of makes sense.

Yeah.

So as that kind of continues on, you will, and it happens not necessarily just at 3, it kind of happens a little earlier, but you'll start to notice that organizing people and their time becomes more important than you just doing all things for all people all the time. And there's mechanisms that need to be put in place to really make sure you can get to that next stage.

Yep. So this is the leader stage. So, and we're getting, we're getting close to the pinnacle here. So I'm excited. What do we get to focus on in the leader stage?

Yeah. So at this point, you'll probably have already started some of this. So there's no like black and white line here. But to have this fully dialed is very important. And it's basically an accountability system where everybody is reporting in on exactly what they're accountable to do. And they have numbers they have to deliver on. And almost like when you started your business in operator phase, like they have their own little like world they're in charge of and they gotta execute on. And so the first thing is you go back to the budget, right? You've worked about the, the financial numbers. You've now probably hopefully worked out the sales numbers. So you know how many jobs, let's say we're using $2 million, let's use a $10,000 average job size. I can go $2 million divided by $10,000. Okay, I got about 200 jobs. Okay, about 200 jobs of a 50% sales ratio. I gotta do 400 quotes. Okay. And about 90% of our leads get estimated. So I've gotta get 440 leads this year. Those numbers on the sales side anyways need to become somebody's job. Those are the numbers that are their job and they have to have a way to track goal versus actual on how they're doing week in and week out. And as you grow the business to this size, you should hopefully be recording things, know the trends, when high season is, when low season is, and when jobs need to be booked to keep in line with production or keep the, the rails down for production, the production train to keep moving. On the production side, you need to be knowing and understanding exactly how many hours it takes to produce how many dollars. So you had already alluded to this, but like, do you have enough people in the field to be able to produce this much work? If you're going to go from whatever, $3 million to $4 million, do you know how many more human beings you need working day in and day out? Do you know what the average productivity per week is given the fact that people get sick and there's rain days and there's all these non-productive things that cause 40-hour work weeks to turn into not 40-hour work weeks? And so do you understand the production capacity that your company has given the amount of people? Do you know how much leadership is going to be involved in order to do that? How much can one human lead, right? There can be an on-site manager that maybe leads 3 painters. There can be a production manager that maybe leads 3 to 4 crews, right? And what's the management requirement for that kind of stuff? So what you're doing is you're figuring out your work structure based on the workflow, and you're giving every single person a number or a deliverable that they're directly in charge of achieving, and that becomes their goal. That becomes the thing that you as the owner start to coach them on. So you're coaching your key leaders and helping them be a bit more like players than employees. Like, you go from being their boss to being their coach, and the goal is on them. They have to go achieve it. Your goal is to just help them achieve their goal. You can't go do any of the work anymore. You're not like, I'm gonna go book a million of it, don't worry. It's like, no, your job is just to coach your people and do everything through them. And the achievement and the actual like ROI at the end of the year comes from your people, not from you anymore.

So it sounds like, so because I see a lot of painting businesses, they kind of get stuck at like around $2 million, and so they're kind of stuck in the manager tier using, using this. So, and it seems like what they're missing is that they don't have, everyone doesn't have a number, they don't know what, what they should be hitting and if they're on track or not. And so they're not empowered with that, that knowledge and that, those goals. And, uh, it might be a case of where the, the, the owner is kind of, you know, used to, to being hands-on managing, doing some of the work, and they're not quite letting go of it and just being a coach, like you said, to coach their team to to hit those, those KPIs for each, you know, position. Is that kind of—

Yeah, I guess many hats. It's that classic adage. I've got 7 hats I'm wearing right now, right? It's like, cool, you're a bit of the office admin even though you have an office admin. You do a few quotes on the side even though you got an estimator. You're still managing a couple of the big projects because even though you got a production manager, because you haven't truly handed it all off. And I think if you start to realize how much how powerful it can be for you to actually step away and just manage and lead and guide people, you'd probably shift that a lot quicker because the opportunity cost of doing what you're doing for those who are in this stage is much higher than I think people realize. A really actually good way to articulate this, Daniel, I don't know if you have a calculator on your phone quick, but like take $20 million, let's say $2 million, even $3 million, at $3 million, it's probably 30-ish staff that somebody will have, whether it's subcontractors, obviously for their field bus staff, it's still like probably 30 people. Times that by 35 hours a week, because I don't think that everyone hits productivity at 40. I think 35 is more realistic. What number is that?

So 30 employees times 35 hours a week, right? That's about 1,000 hours.

So for every week that goes by, as the owner of your organization at a $3 million a year business, you are in charge of 3— what did you say it was? Was it 1,000 hours? It's 1,000 hours of time How are you going to outwork that by working an extra 10 hours this week to take care of XYZ thing? You can't. And so you have to realize, like, I can go and do what takes care of the issue for this week, and maybe that one customer, that one employee is happy, but I've totally stagnated what's going to happen in 6 months from now because I didn't get ahead of it. And now that's why things happen, right? Suddenly there's a gap in the schedule and you have to let people go. Suddenly profitability on a giant $500,000 job you booked that you thought would be great drops and plummets and net profit drops and you can't pay payroll suddenly, you know, and you spend half your time doing 4 people, 5 people's jobs, a little bit of everybody's job, and the other half honestly just putting out fires. And you haven't defined your job description to actually be the leader of the organization, which takes discipline. For most entrepreneurs, we love to get involved. I love to get involved, but to what end? And where does this actually take the company? And it's usually I get plateaued if I don't sort of lead my people and they get used to it too. They have to get used to being like, I am in charge of production. All things live and die with me in production. Danny has spent 3 years developing me in this role so I can do this.

Perfect. So yeah, that's, that's a really cool way to look at it. Uh, at, at the weekly level, it's 1,000 hours. If you have 30 employees, it's basically 1,000 hours. You're, you're in charge of, you know, leading. Or even if you just look at it at 1 hour, like you could spend 1 hour, you know, do, doing something that you probably shouldn't be doing, like answering a customer's email directly for something that could have been handled by somebody else. You spent that hour and where if you have 30 employees, that's like a week's worth of hours that were just spent by other people while they were not being led, you know, so the amount of labor hours that are just being used in your business at that level is so much that you can't, like you said, the opportunity cost is huge when you're not being a leader at this level. So I really like the way you framed that.

Yeah. So that's the big thing. And as you're going to leader stage, I mean, you're kind of getting to this, you know, $3 million mark. You're getting to a place where your team is kind of in place. Hopefully you've done a lot of the legwork to build some of the basic systems so everybody has a way to do things. And then the company starts to hit this place where it's like, we're pretty comfortable. Like, $2 to $3 million is a tough road for a lot of companies. They're usually spending a lot more overhead than they want to with all these new roles they've hired for, and they don't necessarily get the full benefit. But $3 million, $3.5 million, you start to see the benefit come out. And for a lot of people, you can stay right there, and I don't think it's a terrible thing to do. I think a lot of people have a nice you know, 10 to 15% net margin business at $3 million a year and they can ride. But there is another stage you can keep going and that stage ultimately leads into a whole bunch more stuff which we can get into as well.

Yeah, let's do it. I'm excited. The last stage, Stage 4, Strategist. Let's do it.

Yeah. So from here forward, you have to kind of decide you've created a vessel, a machine, like a car. You've created a vehicle. Of some sort. Where do you want to drive it? And you have to be very clear in your decision-making with this, right? So do you want to drive it and franchise it? Do you want to license it? Do you want to grow corporately by geography? Do you want to finally get into that thing you were mentioning around like, you know, other service offerings? Do you want to just keep it a nice profitable little bonsai tree that, you know, is a nice little cash cow? There's a lot of options, right? And so the first step is just to get clear on what is the best fit for the organization, for you and your life as an entrepreneur, the things that drive you. And there is no wrong answer to this, but the only thing is, I would say, is important is to make a decision. Because up until this point, you've probably been fairly good at just like shooting from the hip, dodging and weaving opportunities and challenges that come your way, running the business because, you know, and coming and really having a lot of success because you have that flexibility to have lots of great ideas and just try them out as you go. But that petri dish of trial and error becomes very costly when you run a $3 to $5 million business and you decide we are now going to shift to all subcontractors, no employees, and you suddenly realize the pain that that causes. We are suddenly going to do all commercial work for these two builders and no one else, and suddenly one of them drops. We are going to— so there's some costly, like, things to not being clear in your vision of what you want to go do and shifting every 6 months to a year on new ideas. So yet I always challenge people to pick a 3, maybe max 5-year vision of where you want to go with the company. Something that would align with your organization, the values, the customer you serve, your, like I said, your own motivations and personal life needs as an entrepreneur. And something really ultimately that the team can rally around because they're gonna have to be able to believe in something more than just a paycheck.

Mm-hmm.

So we, we call it like a, a painted picture or like a 5-year BHAG or 3-year BHAG, big hairy audacious goal. And it's not that you shouldn't have set these before, but it's like now it's when— now is when it becomes vitally important for this thing to kind of like drive the entire organization forward. So there's that. So it's like picking your vision, articulating it properly, building that vision backwards. So we didn't talk about it in previous stages, although I still think this needs to exist, but having your annual strategic plan line up to that 3 to 5 year plan. So you know that everything you're working on this year actually is leading somewhere. Bigger than just like what you could see within one year. And you're starting to get to a point where it's like, I'm going to build leaders in the organization that will take this business with me to that place. And I will step more and more back where this thing really just becomes, you know, an entity in and of itself. And I'm just a part of it, part of a big machine. So that's the first step, just big vision, being clear on it, making sure it lines up with the organization and yourself. And that once you've got that figured out, you can actually deduce down in this next fiscal year, What are we doing hire-wise, new initiatives-wise, new technology-wise, ideal customer-wise? What are we doing in all these categories to make sure what we're working on actually leads us somewhere in 3 to 5 years from now?

Yeah, that kind of makes sense. It makes sense. It reminds me of Traction by Gino Wickman, the Entrepreneurial Operating System. They had a very similar methodology there, which is one of my favorite books. It just has like the blueprint for how to run your business, but very similar, like setting your vision and then backing, like how do we actually achieve that with our 1-year plan, you know, and having that battle rhythm of meetings to support that plan throughout the year. So yeah, that makes a lot of sense. So I want to be cognizant of the time. You've been super generous with your time. And where can folks learn more about yourself, Breakthrough Academy, you know, more information about, you know, scaling your business to the next level? Do you have anywhere to point folks on to learn more?

Yeah, obviously the website, btacademy.com. B as in Bravo, T as in Tango, and Academy, A-C-A-D-E-M-Y.com. You can check that out. Um, I also have got some of these resources here, Daniel, for you. So I don't know if you have show notes or anything you'd want to link them off of, but I'll get our team to send this stuff to you about the 4 phases of growth. And then the machine that we use to help people through this is called the Contractor Growth Method. So it just kind of outlines what that methodology looks like. But, um, yeah, we can shoot that off to you, and if you want to share that with the audience, that'd be good. And Yeah, that's it. Our website's probably the best. And I think the big thing is just kind of like realizing, like, if you actually choose to be an entrepreneur as your career, which I think a lot of us do, and I think that's all we're going to be able to do, we're not very employable people, so, which is fine, um, to take this stuff seriously and not just hope and wish that like, I'll just stick my way and it'll be fine, it'll grow and I'll figure it out when I get there. Like, just know that like, no, like, dude, like, there's a, there's a path that like many people have taken in the past. And it doesn't have to be so challenging. I wish as entrepreneurs we had a bit of a school we all had to go through before we could be, you know, get the title of entrepreneur like a doctor or an accountant or, you know, everyone's got to go through some vetting before they do. We got to build our wings on the way down, which is fine, but at minimum, that's good. You know, Danny, you guys do what you do. We do what we do to serve the industry, but it's like, be aware of this stuff and work on it a little bit preemptively. It's easy to ignore because it doesn't become the first most important thing on a Tuesday. But if you never work on it, you're sitting there with a $3 million business and a big headache and a bunch of debt. And I've seen it a lot. It's just slow iterations over time makes all the difference.

Yeah. Yeah. That's a great point. It, it does feel lonely as an entrepreneur, but just knowing the fact that there's been thousands of people in the same boat you've been in, they've, they've figured it out. They, and there is, there is a general path to, to getting out of these problems. So It's a good reminder. I appreciate you providing that and we will absolutely provide the links to the resources that you mentioned in the show notes for sure. Super appreciate you joining the podcast, Danny. Are there any last thoughts or anything before we let you go for today?

No, I think I kind of said it was just like that there is a path and enjoy it. It's like for the right person, being an entrepreneur is the biggest blessing on the planet for me anyways. I'm like, I can't think of any other way of being. Although it is painful and you do work too hard sometimes and you do miss opportunities, maybe you wish you'd be able to walk your dog at 5:00 PM like everybody else after work. It's totally worth it for the right people. You get to create your own reality and to have that ability in today's world where you can take what's in your brain and actually see it come out in real tangible things, real people, real jobs, real money, real brand. Real homes that get produced and painted because of your ideas, that's huge. So I hope that motivates a lot of people. I think it does. But that's what drives me every day. And I'm just kind of like, yeah, go create your own reality and don't be afraid to. There is a path to get there. So yeah.

Yeah, couldn't have said it better. All right. I appreciate your time, Danny.

Cool. Thanks, Daniel.