Identify Your Contracting Business Stage: Key Signs
2 Dec 2025 · 9 min
Jim Johnson explains how contracting businesses progress through stages—Technician, Operator, Entrepreneur, and Business—and stresses that revenue alone doesn't indicate stage. He describes characteristics and common struggles at each stage (e.g., owner doing all tasks in Technician; time-management and scaling mistakes in Operator; planning, HR, and financial levers in Entrepreneur; structured systems and leadership in Business). He shares a cautionary anecdote about spending $200,000 on marketing before having sales/training systems in place and points listeners to resources (Million Dollar Muss, contractor blueprint) to help navigate transitions.
Chapters
How do you know where you are? What stage are you? Because sometimes the numbers don't tell the whole story. For example, if I'm a painting contractor and my average ticket is, you know, $5,000 or so, you might be at a whole different place than a roofing contractor whose average ticket is $15,000. So revenue isn't really your indicator of where you are. Your biggest indicator is what are you doing as an owner? Are you selling? Are you producing? Are you marketing? Are you doing all the things and it's keeping a lid on your growth because you're the one doing everything. And you're doing everything because you think that's the way it has to be done. You may have even tried to hire a couple people and it didn't work out real well. They didn't perform real well. And so where you are as a contractor is you're kind of in startup phase. You're a rookie, you're thinking like, hey, this is something I want to do. And it may have actually been done as an accident almost. You were maybe working for somebody else as either an installer or a salesperson. And then somebody on the side kind of said, hey, can you do my project? And you're like, hey, that worked out good. They got a referral and now this thing just kind of turned into a business. And what you really need, need to think of yourself as a technician. That's really who you are at this point in time. And so as a technician, you have certain things you got to do to just get to enough revenue and profit that you're allowed to hire a few more people. Okay. Some people that can help you and know who to hire at the right time. It's why we have this whole thing called the million Dollar Muss on our platform that's free. It doesn't cost you anything. Just hop in contact, go check it out, and it will give you literally in order, the things that you need to do to start breaking into this 500,000 to a million dollar revenue mark, depending on the size of the project that you sell. So how do I know which stage I'm at? That's the key question. And one of the things you can do, like we offer this thing you can actually download, it is our contractor's blueprint to scaling mast. Like, these are the things I should be working on at these times. We actually meet with people and go through that kind of stuff with them to help them out with that. But for you to kind of understand it is, I am all things to everybody that's number one and I don't know nearly enough. That's where you're at in stage one. Technician. I just know my one thing that I'm really good at and I don't know a lot of the other stuff, but I'm good enough and people like me well enough where I do good enough work. I'm getting more business. So I need to get these basics down to start moving towards the next level, which is the operator. This operator has problems with time management. They struggle with getting all the stuff done. They're starting to feel really busy, although they're not generating quite the revenue or the profit that they had hoped they needed to. And that's because they haven't put in these key pieces that are really important at that time to do. And they're probably making a lot of mistakes by trying to do things outside of that and above, above that stage wise that get them really confused completely. Like, hey, I'm doing what those guys are doing. It's just not working out for me. Well, what you don't realize, those guys did step one and step two and step three before that. And so once you kind of get to this operator status where you're starting to break a million dollars pretty consistently, you start moving up the scale a little bit and you actually become an entrepreneur. You get much better at your planning. You start looking at your strengths and weaknesses. You are looking at other people as leaders for you. You're creating a vision that is very clear and aligned with all of your people. You have. Your HR has gotten much clearer as far as like job descriptions. Maybe not fully a company handbook yet, but I've got some really strong job descriptions. You understand finances at this point. And so these finances are the levers that we can pull that start to move us towards that 3 to 5 million dollars which starts to create some revenue and some profit. Hopefully if done well that you can now start to scale a little bit with your business. But once again, wrong thing, wrong time can pull you back from that really fast. Actually happened to me pretty heavy. I thought, oh man, I've got this thing now. We've got the profit to do things. I'm going to go invest heavy into marketing. I'm going to go spend 10% of our projected budgetary revenue on marketing. And what that did, because we did that when we didn't have all the other things in place, like a great sales process, a great training program, a great client experience. Like all these other things that were really important I should have had in place First, I blew about $200,000 that we just did not convert. You talk about taking a hit and taking a step back. We had to take a step back and go, hey, wait a minute, what did we miss? And we missed these things that we needed to do that were super important to take us to that next level. But once you start hitting that three to five million dollars, you run into different problems, you run into different caps, you run into communication issues with the team and we start to get overwhelmed again by questions, trying to solve problems. But if we do each one of those things first, you're going to be in a great position. Now as you move further down the road, I've got this entrepreneur thing figured out and we're consistently doing $5 million. And you're wanting to grow again. You're going to become a business at that point. That's the new thing that you become. So you're thinking of stage like, hey, I'm a rookie, a startup. I'm just figuring it out. I'm a technician and I've got a skill that works really well. I've become an operator. So I've got a couple of people working for me, but it's not real big yet, not scaling it the way I would like to. And then I become an entrepreneur. So I'm starting to get some of that stuff in place. It's really important. And then the next thing, usually you're getting into this five to $15 million depending upon your type of company is this idea of a business where structure becomes really important. Everything starts to get followed which the idea is to become this well oiled machine. And this is the place, this is the key spot where the person that owns the company truly starts to become an owner. They start to own the company instead of the company owning them. All the others, entrepreneur, operator, technician, the business kind of owns you. And our job as coaches is to get you from there to owning your business and having it work for you to create the lifestyle that you're after. So that's why we put all this other stuff in place which allows us to scale the businesses quickly. These things do not take a huge amount of effort, but they are things that have to be done. We just tick them off, knock them off and then we get there a lot faster than you would ever imagine. But as a business you run into all this other stuff where this is where you're getting into employee handbooks and understanding your numbers really well so that you can pull the right lever at the right time. So how fast does it take to do a job from start to finish and tracking that? I think a lot of reporting and feedback from leadership to tweak those numbers individually based on where that homeowner is and what's taking us too long. We have all of these different things that we need to start looking at from an owner's perspective instead of the operator or entrepreneur's perspective. We start to put leaders in place that we pay very well to make sure that they do a good job of getting us to where we want to go with our vision. And our job as owners. Owners is to lead that well, to love our people and give them the tools so that they can be successful. If we don't do that, we're going to get stuck right here between entrepreneur and business. So that's kind of the first four. There's a couple more when it gets into expansion and things like that where you're starting to have multiple locations. But that should give you a pretty good idea of like, hey, where am I in the stage of my business? And a lot of us will lie to ourselves. We'll lie to ourselves and say, oh, I'm an entrepreneur, when really we're probably at operator technician. We haven't put those things in place yet that make us successful. Like, for example, I can tell you right now that anybody listening to this right now that doesn't have any kind of training stuff on a platform that allows their people to learn from it is nothing more than an operator. You have not gotten to entrepreneur or business at this point.