7 Essential Systems For Profitable Tradies

It's much better to invest time up front in getting that understood, getting that all into your jobbing software. You might feel like, oh, if we don't get the job, it's a waste of time. But it pays off in the long run. Spade. So it's understanding who the builder's client is, what they're looking to achieve, looking at the plans and often some of the design.

Hello and welcome. If you are a tradie. So that's an electrician, a plumber, a landscaper, a chippy or whatever trade, really, you're in the right place and I think you're going to love this episode. I'm joined by a little bit of a legend in the space, Tony Fraser Jones. He's the author of the Profitable Tradie, founder of the company of the same name. And they really do run quite an extraordinary business that helps tradies quite simply build better businesses. Now, Tony, he's not your stereotypical trade tradie. He started in a consulting firm, Extensure, and I don't know if maybe that's where he got his programming from or maybe he was just born with it, but he's definitely a little bit of a systems thinker. He's a huge advocate of capturing your core processes, making them repeatable. So I couldn't think of anyone better to really explore. What are the most critical systems for tradies and where do things break down commonly and how might they get them on track? So maybe first things first. Tony, just like to welcome you to the session.

Yeah, thanks, David. It's exciting to be here. Love systems. They. They set you free, I think. I don't know who said it, but someone said it. You don't rise to the level of your goals, you fall to the level of your systems. And there's no doubt that that's true in business as well, because without it, it's absolute chaos.

Yes. James Clear Atomic Habits. He was the one that.

I have read that book as well.

So it was in there that.

That's right.

I'm curious, were you like, born a systems person? Like, do you feel like it was innate or is it something that you kind of learned along the way?

That's a great question.

I've.

Even when I was at school, I had a system for. For studying, which sounds pretty weird, but I had a system for organizing myself every week.

Yeah.

To try and get through stuff, because I had a lot going on, sports and all sorts of other stuff. So I guess I kind of was. But, you know, I had a I had a restaurant business actually after I, after I left a sort of a corporate gig. It was a burger as a burger fuel. If you're in New Zealand, you know what it is. If you're an Aussie, maybe you don't, but it's like a gourmet burger restaurant. And it was, it was a bit like McDonald's, so lots of systems and KPIs and measures and stuff. And I just saw the power of it really for helping the business run successfully. So we obviously help our members, tradies and contractors with that and we've put a lot of work in our own business as well to systemize it because otherwise it's just chaos. The good news is I haven't built most of the systems, which has been helpful and I think that's a big challenge for people, isn't it? They try and build everything before they get people to help them with it. But it's just, yes, system saving your stress, time, effort and money. I love that acronym. I think that's what it's all about. So maybe it was a bit natural, but I've certainly honed it in business and seen the power of it to help business owners.

Is it possible then you would have seen it firsthand? I'm imagining with many tradies to own a systems driven business if you're not a systems person. I mean you kind of hint at it, at it right there, which is you didn't make most of the systems yourself. But I'd love to see or hear what you think with a lot of the tradies that you build because a lot of business owners, they just go, yeah, tried that before, didn't really work. I'm not really a systems person, you know, what's the point of putting it in place? But you would have seen plenty because I think that's just about all tradies.

Yeah. Yeah. Well, a lot are and a lot aren't as well. There's a lot of people who are quite detail orientated in the trades and they actually do love a good system. But I, I can tell you for sure that successful businesses that we see and you know, these are the ones that maybe the revenue, their, their profit is, is a million dollars or more. They all are highly systemized. It's impossible to get to a really successful level without being systemized because it is just chaotic and, and one person cannot keep all that in their head. For those who do struggle with it, they 100% can do it. I think everyone probably when they see it in Action. Sometimes they need to see it in action, maybe in someone else's business to actually see the benefit of it. But when they understand that it's important, anyone can make it work. But they often just have to delegate it to people to actually do it. I think that's a big miss for a lot of people. They think, as the owner, that they have to do all the systemizing of the business. And the typical sort of thing is, I want to get someone to help me in my office, but I won't do that until I put all the processes and systems in place. And funnily enough, that never happens because you're too busy already. The reason you need the person is to help you lift some load. And the better way to do it is actually to say to that person, hey, as you learn this job, I want you to write the process that you follow or video all the things that you're going to do and build them into an SOP or an admin manual so you get someone else to do it. I think it's much easier for a trades person to edit the process rather than author it. So I think anyone can do it. As long as they understand the importance of it, they can get it done. It doesn't mean they have to do it.

Yeah. The case for business systemization. Sometimes it's hard for the business owner to recognize what's the roi. I mean, you turn on some Facebook ads and straight away you start to see those leads flow in and you get this instant hit of, I've done something and I'm getting positive reinforcement and that this is working. Whereas systems sometimes can have a lag period. Like, it takes time for them to stick and they have a compounding effect. So it takes time. So I'm wondering how you build the case for. And you touched on it a little bit by saying, look, all successful businesses, to be a successful business at some point has to dial this in. I'm wondering, yes. How you help business owners realize and prioritize this is something that they need to do.

Yeah. Well, all behavior is motivated by pain or pleasure. And so I guess we try and use both of those levers. One is a little more brutal than the other, but sometimes that's what's required. And so it's actually sitting down with people and drilling down to what is the actual situation they find themselves in. And you could take pricing work, for example. That's a great area to systemize. They might have someone helping them do it, but they keep making mistakes or they get things wrong. And you, you actually help them tease out what the implication of those mistakes are or the problems are. And then that helps them understand, well, flipping heck, I've actually got to get out of my head, you know, and get it onto paper or into a template for someone else to follow what I mean, rather than just telling them. Because people don't remember that. In fact, you probably tell them different stuff all the time. So there's the diving into what's not working for them and understanding that the reason that you don't have enough time, that you're stressed out, that your partner, wife, significant other is kind of annoyed with you, is because everything's stuck in your head and you're not trusting other people to do it because they get it wrong when you tell them. And the reason they get it wrong is because you haven't written it down because they can't really see what you mean. So that's part of it. And then the second side, I think goes back to what we said before is let's look at some exemplars. Let's look at the businesses who are doing very well and we spend a lot of time in our community showcasing the wins. And for me, in business, often the inspiration is what's needed to see what is possible. And so when they see, hey, this person's actually put an operations manager in to manage their team of seven or eight tradespeople, they have pricing templates, they have handover checklists, they have quality assurance checklists, they have all of this written down and this is how it's working. They're like, oh, that's a light bulb. I can see how that, how that works now. So I guess to summarize, it's part pain, you know, what's not working now and part pleasure is this is how it can work if you actually put the time and energy into doing it.

Yeah, I love it. Well, we might be able to give someone a little bit of that inspiration on what's possible as we sort of work through the critical client flow and maybe explain what a well functioning trades business looks like and where people kind of miss things. So I'm going to bring up my iPad here and I'd love to work through the critical client flow. Oftentimes when I'm working with clients. There we go. We'll start with the critical client flow and we'll think in terms of what are you currently doing and not what you would like to be doing. So that way we can capture what you're doing and then look to make Parts repeatable when you know, because you know the industry so well though I'd love to focus in on what is best practice and what do you think just works best. So of the different tradies, if we were to narrow, narrow in on one target.

And it's not necessarily a target client for the critical client flow here, but if we imagine ourselves as the business owner of one of these trades based businesses and we're going to put ourselves in their shoes.

Where would you like to start or who do you think that that would best be?

Yeah, I'd quite like to, to maybe kick off with what kicks off all work. Which is, which is how do you get jobs and leads in. So maybe we can, we can look at that.

More.

So like what type? If we were to pick one, like what type of tradie business are we going to talk about?

Yeah, let's say we're talking about a plumbing contractor. Maybe they're a business of say 15, 15 to 20 on the team. They'll have an operations manager, probably have a couple of foremen or senior tradespeople. They have an estimator, they'll have an office person, maybe an office junior. And the owner is like the gm.

Perfect. All right. And for that plumbing business, if we said what would their ideal client be like? If you're imagining that size of business that 15 to 20 team members. Yeah, if we had to pick one as a starting point. Yep.

So I think a great target for these people would be, would be a building contractor or builder and it would be a, not, not a, not a, not a high volume builder necessarily, but a building, a building contractor who maybe does, they do new homes and maybe high end renovations. So they are, you know, not a necessarily a real price shopping business but they, they do value, good, good service and value. And so that, that'd be a business who, you know, they maybe have, I don't know, somewhere between 20 and 50 jobs a year.

Yeah, perfect. I love that already. I mean the target, rather than going for the end retail consumer that might be getting their toilet unblocked once a year, let's make the target client here. The client that might potentially book you for a whole bunch of jobs like that, that already smart.

And what type of work would they be doing for that builder? If we were to pick the primary product or service.

Yeah, so it's, it's bathroom, kitchen.

Yeah.

And maybe.

You know, heating or cooling. Yeah.

The gas type stuff.

Perfect.

All right, I think that sounds great. So if we focus in on that plumber and that's their target audience. Again, we will go for what best practice is. I'm imagining there's probably going to be a lot of word of mouth. Yep.

We can definitely put the word of mouth on there.

And what other ways would that plumber try and track attract the attention of those builders?

Yep. So something that we suggest that works very well. We call it lumpy mail. So. So that is effectively old school direct response marketing. Yeah. You get a list of all the. All the people who fit that target market and you create an interesting, compelling sales letter with some dimension to it. A lump, we call it, and you courier that to them.

That is so cool. I love that.

Old school.

Yeah. It looks a treat in a busy online world. Let's grab their attention offline. Which, which is great. Bit of a pattern interrupt there.

What.

Are there any other particular methods you like?

So, so. And it's probably associated with that lumpy mail because that's a one time. And this, this can take some work. So we call it prospect nurture. So it would be a prospect nurture system would sit alongside that. And so there's some elements to that, David, in that there'll be email, sms, socials and face to face. So there's a bunch of stuff that would be in that system. It's probably like another little system.

But that's about you hit them once at the start, you get their attention, shock and awe and then you love them for a long time, if you like. And so you're top of mouth. So when the time comes, they're going to send you some plans to price.

That is so good. Is there any final ones or. I mean that I could almost imagine that on its own, if you dialed it in, could do, you know, bring them in more than enough.

I think the socials. The socials kind of a part of that, but social media.

It'S kind of surrounding them.

Yes.

With, with the socials. Instagram, Facebook is powerful.

Yeah. Showcasing work and those sorts of things.

Team values, projects, the whole. The whole nine yards.

Yeah. Awesome. And once they grab the attention of those builders, I'm imagining inquiries can come in a variety of different ways. What would be the typical way they.

Would send you plans to price?

Yeah. Okay. And how would they send them that? Just through the website or they would.

Send that via email? Typically.

Yeah. Perfect.

Perfect.

And so they've, let's say, emailed you in, sent some plans. What generally happens for that first step in the sales process? Is that something that.

Yeah. So the first. Yeah, the first step here, which is often missed is to call to clarify the plans and the specifications.

Yeah, perfect.

And so what often happens and where people fall over here, they get the plan to price, they price it, they email it back and that's all they do.

Yes. Yeah.

Which is a big miss.

So start off with a clarifying call and then after that is when you prepare the proposal.

Yeah, you prepare the quote a little bit.

Yeah, perfect.

And there may be some iteration in that.

Yes, yeah.

Very important to call to clarify. Go over the specs. And often you can add some value in that process as well by the questions that you ask.

Oh, hey, I know you're tuned in right now, so I'll keep this super quick. But you like awesome YouTube videos, don't you? Well, there's not really that many YouTube channels that create great content about how to systemize your small business. So I want to make sure that you catch every video that I publish. So if you haven't already, firstly give this video the thumbs up and then go ahead and subscribe to my channel. You can even hit the bell notification to make sure that you're the first to know when I publish anything. So go ahead, do it right now. I'll wait a sec and then I'll transfer you back to the video.

Yes. Yeah, perfect. And then we do the quote and then send that back.

Send the quote or bid.

Yep, yep.

It's kind of like a prepare because there might be some sub steps under here and then we're going to send.

Yeah, you'll have to talk to your suppliers if you need any subcontractors for your particular part of it. Not always as a plumber you would, but sometimes you might.

Yeah.

So you gather all that information.

Yeah, I think that sounds good.

And then is there some sort of follow up process or anything as well? As far best. Like what? Yeah. What would you say is best practice after we send out?

Okay, so, yeah, so quote, so you prepare the quote, you send the quote and then the follow up process is absolutely critical.

Yeah.

And so we would, we would have quite a detailed follow up process. So for example, part of our, you know, exemplar in terms of a process here would be to confirm the receipt of the quote when you send it via a phone call. Yeah, that is critical.

Love it. Very good.

You get the opportunity to ask questions, field questions, make sure they've got it.

Yep.

I mean you'd be amazed how things just don't get got.

Yes.

Staggering. And then, and then there'll be, there'll be steps in the process after that. So you'll need to follow up on a regular interval to see where it's at sometimes. And then we have, you know, scripts or examples there of like, what are the questions you ask if it's taking a while to get there. Like so what do we need to do to get this across the line, for example? Yeah, but yeah, the follow up process is critical.

Perfect. And then once someone's ready to go for that type of project, like we'll come back to the bathroom and kitchen typically. How does the money work? Do they take deposit up front or is the money at the other end of the project or is it kind of like milestoned?

Yeah, well I would put a step in there which is.

Quote acceptance and contract signed.

Yeah.

Because you'd be amazed how many people get a verbal acceptance.

Or you know, it's just not clear. And so you want that clear terms agreed, love it, etc.

And there's probably once that's agreed, some sort of like getting them into the system. Like what? Yep.

So. Yep. So then, then you would update the project schedule. So you would actually on our side, we would schedule a job into our, into our board.

And again it can be a bit of iteration there to, to, to, to fix it up, but you, you.

Yeah.

And then once you've done that, you would order the materials to make sure that they are, you know, good to go when you need them.

Yeah.

And as you know, David, this is not a perfect science because sometimes these projects, you know, a builder might be pricing this. The client, you know, might have a few builders pricing this job. So your client has to wait on the client's decision and sometimes they have got the job and you're pricing it. So it's a little bit fluid, but as a general rule this works.

Yeah. Yeah, that makes sense. And.

As part of that onboarding, because they sign and accept is the sign except where they collect some of the money as well. Or does that happen at like how.

Does, yeah, that, that, that is, that's, that's a big point of contention. So often it's difficult with, you know, business to business trade work to get a deposit. But we definitely have clients who, who do that. So yeah, I haven't put that in there, but you, you could have that there for sure.

If, if we say in, in the dream might not always happen, but if, if we could wave the magic wand, I suppose it, it would be good to collect a deposit, but you're not.

Always going to get it for sure. And, and typically what happened in Covid sort of drove this was you would collect a deposit to pay for the materials that you're ordering. Ordering in advance because they were difficult to get hold of.

Yeah. Okay. To kind of secure that job. And then there's the doing of the work. And typically this particular part of it, there can be a lot of subsystems. I always kind of just capture it high level. But very clearly, depending on the size.

Of the project, 100% this is a whole. You jump into a whole nother set of processes. But I think one thing under that order, materials, you would have project handover meeting. Yeah, project handover meeting is very important. That's a step that is often skipped. And so that's a meeting between the pricing person, the ops person and the client, their project manager. So you get them all together to make sure that we're clear on what we've priced are clear and we've got it all covered. And so you spend some time on that up front. It's going to save you a lot of time down the track. So everyone starts a job ready to go.

Yeah, I love that. I feel like that is missed in so many businesses, not even just trades businesses. And things get lost there. Expectations aren't properly set. And most of the time when clients get frustrated, it comes down to there not being clear expectations and timelines and things being properly communicated with what the salesperson may have agreed to and said. And then when it comes to delivery, the team member doing the work, there's that miscommunication.

I feel like that's the delivery. You know, the team out in the field are basically set up to fail because they didn't have all the information.

And the client is still thinking about what was promised with pricing, which is different to what delivery thinks they're giving.

Yeah.

And I think this is a big thing and you'll see this a lot in your work, David, is when you grow a business and you have to specialize, like you have to have a pricing person or an estimated and then you have a delivery or operations person. You've got to build the system that has a step in the system that actually brings those two together again so that we're all on the same page. And I think that that gets missed quite a lot. And that just. That basically stuffs up the profitability of the job and the client experience.

Yeah, it's that working in silos and people almost like these little black boxes. Sometimes it happens unintentionally and then sometimes it happens intentionally where people kind of don't Want you to know what it is that they're doing for some sort of job security reasons. But that's not a way to run.

A business or not so much.

So we do the delivery and then there's probably some sort of hand over once the work is done or final inspection.

Yeah, there's a final inspection and project completion and that might vary a little bit for big projects. Sometimes there's practical completion and there's retentions or some money's retained till, you know, 12, six, 12 months down the track to make sure everything's good. But again that's probably a slightly more complex system.

Yes. So it's probably the collect money and then hopefully winning some more work, doing some spectacular work and.

Yeah. And the collect money will be in stages if it's a reasonable size. If it's a bathroom, it's probably not a lot of stages. But if it's a home build, there'll be several stages of collection which will be agreed in the quote acceptance and the contract signing around. How that works.

Yeah, awesome. Like, I think it's very easy for someone to follow. I think I'd love to know what you see most commonly as where things go wrong and where do most tradies typically like what are they good at and what are they often missing?

Yep. So I think for me, I think we might have touched on it but the spending a bit of time actually clarifying the plans and specs and talking to the client about the plans I've sent through.

Yes.

We find that it's much better to invest time up front in getting that understood, getting that all into your, into your jobbing software and you might feel like, oh well, if we don't get the job, it's a waste of time. But it just makes it pays off in the long run like it's made. So it's, it's understanding who the builder's client is, what they're looking to achieve, looking at the plans and often some of the design, the plumbing design is a little bit, you know, not ideal. So you can make some suggestions or you might have some, you know, some fixtures and fittings or some kit that's really going to be good for what the client wants that the builder hasn't kind of specified such that they might. So you can actually add some value to the process. So that's really helpful part. I think the next part is when they actually prepare the quote or the bid. The pricing system is not well organized.

Yes.

And so they're pricing jobs from scratch rather than having A like, honestly, if you've got a good pricing system, you should be able to bang at a house price pretty quick.

Yeah.

If it's not too bespoke. It's like an hour to bang at a house, if that. Because you've got pre built and you've got templates and it's kind of like plug and play with a lot of it. So that scenario and then the follow up process, for me, that's a big mess. People just, they just hope that it'll come through rather than knowing that there's some steps you can take to proactively drive people to say yes.

And that's a big part of it. And finally it's the handover process. So not doing a good job, actually handing the project over so that all parties are clear on what's expected, what you're going to deliver and what's not expected as well. Like what's out of scope, that's a big thing. So those probably the key areas that I find where things fall over and.

I'm imagining.

Tradies are a great example of the quintessential.

Business owner who typically knows their craft really well. As in like that's where they're strongest. They know how to do the delivery. That's what they went to trade school to figure out. And very clearly and quickly when they go out on their own, they start to realize, oh, there's obviously a big difference between knowing how to do the technical work and then running a business that delivers the technical work, like classic Michael Gerber stuff and then thinking it is.

Are there any other things that you feel the typical tradie does? Well, like I said, probably the delivery piece. Are there any other bits where they just generally find that part easy?

Was it a bit of a mix?

Look, they do do the, they do the job well. Like honestly, most certainly people we work with are very capable at getting the actual job done.

And generally they have pretty good relationships with their clients as well.

But the flip side of that is as they grow and scale, they find it difficult to deliver on those.

Expectations that they've set and met at the start because they weren't too busy. And then all of a sudden they, they have this, this building contractor they're doing lots of work for and maybe they get another contractor and another one because they're doing a good job. And all of a sudden that's when the wheels start to fall off because the system's not there to capture it. And you know, the, the owner is actually frustrated because basically they're expecting everyone to read their mind about how it works. Yeah, but, but that's, that's pretty difficult to do once you, you've got lots of going on in your business. It's not practical. So it's almost like they're good at something, but that creates the success that then leads to the downfall because of the growth that comes when you're good at something. Yes, I see that a lot.

Yeah, yeah. And I'm imagining all of those behaviors of micromanaging and being on top of it and making sure that everything's done to the right standard and that's really what grew them to one level. So it's kind of like all of those behaviors would be reinforced and then.

Yeah, that's massive, isn't it? I mean, the thing that makes us successful as business owners in whatever sphere is that we were competent. But there is a certain level to which your competence carries you.

Yeah.

Past that, it gets out of control and, and we try and use the same strategy that's made us successful in the past, which is working hard and trying to be across everything. And we might, we might be able to strong arm that for another few months or year or whatever, but there will come a time where it'll just explode and your, your brain will explode because you can't, you can't deal with it. And that's when, as we said at the start, we, we figure out, well, what's the pain of not getting systems? What's the benefit of getting systems? And then people sort of see the light like, oh, okay, I can see. Got to get this out of my head. It's why McDonald's can be run, you know, by 16 year olds who can't buy to their room. And if you can systemize a McDonald's, I think you can systemize most parts of a plumbing business, to be honest.

Yes. Yeah. Yeah. I love your insights all the way through here. Which makes me think, I'd love to get your take on.

I mean, I'm seeing it in different industries to varying degrees. But I'm wondering what impact you're starting to see AI have. Because you, for the typical tradie, they might sit there and think, well, there's a bit of a way off before a robot's going to come out and be unplugging toilets. So maybe I'm safe for a little bit longer here. But where in, you know, some of what we've either gone through here or other parts of the business. Are you saying, hey, AI will save you time, money, and resources and just get things done faster, cheaper, better.

Look, it's a great question. I mean I, I would be lying if I knew where AI ends or how the landscape was going to look and you know, two, five years time, 10 years time. I think it's very difficult because it's unfolding very fast.

But what we are finding is even just in the realm of systemizing your business now, if, if you use ChatGPT, you can, you can ask ChatGPT to, to generate you a system for a part of your business. Yeah, it might be, hey, I want a quality, quality assurance process for.

What's the job? Installing a new hot water heater in my house. And ChatGPT will give you a pretty solid start. Yeah, it'll give you 80% and then you just, you take what it says and you can, you know, edit it and, and you'll have something that's, that's useful and so you know that that sort of stuff can apply to, to all areas of the, of the business in terms of systemizing. You could put numbers into it. You could take your P and L and say hey, please analyze my P and L based on similar plumbing businesses with this many people and it will probably give you some feedback which is enlightening. So, so it's, it's pretty powerful. I mean, you know, scheduling customer service reps, all that sort of stuff could very well soon be done by AI voice without any human interaction, which is, which is a little frightening.

But my suggestion, I guess David, is for a lot of people listening, if you are a trader, you probably, you know a little bit like suss about this, like how does it actually, how do I get started with this? I'm not a tech, techy person. It's really simple. You just have to get started. And I'd suggest just, just get a Chat GPT account and say to Chat GPT, hey, I'm a plumbing business. I've got 15 people. This is where we're based. Can you tell me how I can use you the best and just do that and you, and it'll give you so much suggestion. You'll be like flipping egg. Like this is crazy because CHAT GPT can actually teach you how to use it. And so you just have to get started. And I think that's, that's what I reckon is the best way if you haven't really got on board this already and just ask it what it can do for you and, and you'll get, it'll amaze you.

Yes. Yeah, yeah, I think you've shared some really valuable insights and I couldn't agree more. Like, I think it's just and I think even just going through the process that we went through today, sometimes just getting clear on your process helps you to uncover where tools like ChatGPT and AI can help. Because you can go, well, this is what I'm doing. How, how can I do this better? And how and where can you help? So if people want to keep an eye on your work, I'll pop a link through to the profitable Tradie.com is that the best place for them to get profitable?

Profitable trading.com or.

You know, we have a podcast as well, which is, which has got some useful stuff in it. So that's the Profitable Trading podcast. You can jump on that. It's in the usual places where podcasts are found. That would be a great way to, to connect as well.

And grab a copy of Tony's book as well. I mean, what I liked about it is it's a system. You'll see it step one, step two, step three, step four. So he's definitely talking my language. So yeah, we'll wrap it up there. Thanks heaps for your time today, Tony.

Yeah, awesome to chat, mate.