Unlock Hidden Profit and Scale Your Home Service Business with Jim Bradley

Welcome back to the show. I'm your host, Phil Risher. And on today's episode, we're discussing how to unlock hidden profit and scale your home service business with Jim Bradley. Thanks so much for joining us today, Jim.

Hey, Phil. Good morning. How are you?

Yeah, good morning. Doing good, thank you. Jim and I actually came into Ecosystem. He works with a client of a couple clients of ours and they raving about Jim, and I was like, okay, well, let's get on a call and see what he's about. And I, I can verify that he is someone that is going to add a lot of value on this conversation, and I'm thankful to have him today. So, Jim, could you take maybe 20 seconds to two minutes, give us a quick bio how you got here and what you do?

Yeah, so I. My, My company is Precision Profit Strategies. I've. I've been up and running for about a year now, but I started. Built the company, started building a company probably about 10 years ago and ended up in the coaching space and then even more dialed in. It's been with home services in the trades. But I made a transition from like a full career in the corporate world in manufacturing, transportation in seven different industries. So, like, I just have taken everything I've learned and really applied it to home services. And, you know, if I had to say, like, my niche is like, leadership development and like operations excellence and finance. But, like, you know, my mission is to bring, like, lean thinking to the trades, which really helps companies dial in their profitability. So it's been a great journey. So I basically have taken everything I ever learned and I've been successful helping owners in home services and trades. Apply it.

I love it. Off the. Well, we're on the record, but have you read this book, the Goal?

Yeah, I live by it.

Okay. When you just said lean and manufacturer, I'm like, I literally just finished this book and I'm like, oh, my gosh.

Yeah, I just. Yeah. So honestly, I told you I was just meeting with Harrison, but like, I always talk about Theory of constraints.

Yeah, right.

Toc. Yeah. Yeah, that's. That's one of the best books out there.

Yeah, I agree. If you're listening to this, the Goal, it's. It's from like the 80s or 90s, but it's so good. It's thick and it's good all the way to the end.

Yeah, there's good stories in there. It's like a. It's like a novel. Yeah, the Boy Scouts, right?

Yeah, yeah, the Boy Scouts figures it out.

Cool.

All right, so people that listen to the show, they're like 1 to 10 million dollars. Can you kind of walk us through when you start working with a business? What are some of those constraints that you see and how do you uncover them so that way they can unlock profitability and scale in their business?

Yeah, so when I start with a client, the first thing I do is, like, I. I do discovery, right? So I do a full market analysis, understand their competition and everything. But, like, the most important thing is I say send me three years of P. Ls before we even talk. Right. And then I just identify trends, and then I, you know, I look at benchmarks for industries, and really, like, you know, I have the ability to see what's going on in the company from there. Right.

Can I unpack that real quick? So, like, okay, your payroll expense is out of whack. Your profit margins over here, your cost of goods sold. Is there specific things that you usually see or things that are, like, red flags?

Yeah, yeah. So the first thing is always. And, like, this is so simple. Their chart of accounts isn't set up, right? So, like. Like, you know, so, like, the main thing to know is, like, what's your gross profit? And if the chart of accounts. If you got direct labor down and overhead, we don't know what your gross profit is. Right. So it's getting that straight then. Exactly that, Phil. Like, looking at, hey, your Labor's running at 40% when typically in the industry it's at 32. Yeah. So we need. We need to talk about, like, what behaviors are driving that. Yeah.

Okay, cool. So. So you. You get a good grasp of the business, then when you. When you sit down with them, you kind of know, okay, this person's maybe a little unorganized. They don't have this stuff tight over here. They're inflated here. So what goes. What happens next?

Yeah, so what? You know, it's a lot of discussion, a lot of questions. Like, you're pulling it out of them, then, like, you know, big thing for me is like, hey, let me see your org chart. Right? Like, let me make sure you're set up correctly. And most of the time, they're missing a key role or they're all overextended and processes are breaking down. Like, you know, I think the biggest one would be, like, simplest for everyone is AR. These owners love to have their money sit down on the street, right? So, like, that's when you do that financial review. You look at the balance sheet and you see how much is actually sitting out there. And then, you know, so you look at the org chart, understand the players, right? And then like develop a plan of attack from there, you know, and if the, if the p. If the financials tell me a certain story, like it's like, hey, we got to go here first because that's your leak point. You're bleeding money in labor or like you got bad behaviors the way you buy your materials or something like that.

That's good. When I started working at, I was at a 3 million dollar home service business. I naturally curious. My job is to grow the business. But I'm like, okay, how do we invoice people? Because we're not collecting money. So I go into the QuickBooks and I see 300,000 in unpaid invoices. I'm like. He's like, oh no, we've used this for like 20 years. You know, this is just come. I'm like, still what?

Yeah, yeah. Most of the time you got to clean that up, right? They're like, that's old, you know, but like you, you just gotta. It's like that in itself has to be a main KPI for the company, right? And some survive with it being out there. But like when things get tight, it's like, whoa, yeah, like, you know, and they jump on the phone, they start calling people. But like, if you have a good process, like it, it'll, you know, it won't be a problem, so.

Exactly. I do want to ask you about, so org chart. Do you have a specific structure that you operate on or, or implement like eos, you know, integrator type thing? Or is there something that you look at and say you need this?

Yeah. So the interesting part is like a lot of people that come to me have already been through eos, okay. So traction will get you to a certain point and then they're like, I got stuck again, like, how do I, how do I move this needle even further, right? And that's where like Traction doesn't get into like leadership development or having the right profile in the right role. But like I like, I like Vern harness type scaling up strategies for setting up. I love eos, right? But like once you get done looking at the financials and like you develop like you recognize pain points. Most of it is like, do we have the right people in the right seats and are, are we giving them the right leadership development or the right tools for to be successful?

Yeah, yeah. I think a lot of times there's no structure and EOS gives you a nice one of like, you Know, you have your owner, the CEO, the sales leader, the ops leader, the finance leaders. Like it's nice, but it also is got to customize it to your business and figure out where you, you need people and the right people.

Right. And so, so the org chart, like you bring up the goal, right. The other book is called the Theory of Constraints. Right. Toc. Yeah. You have sales, you have operations, and you have finance. There, there will always be a constraint in one of them. Right. It just moves. But like Eli Goldraff says, like will exist. Right. So for example, how many of our audience, they have so many, so much sales, but they'll now have enough people to produce it. Right. Or sales dip down and we got too many people and we're sitting them at home. Or sales is good operation staff. Incorrect. But we need trucks and like equipment and then we got some financial constraints. We can't run out and buy a truck because we didn't save reserves or anything like that.

Yeah, there's constraints and then you have to figure out what to fix. But to your point, there's always a constraint in one of those buckets to figure out what, how to grow.

Right, Right. So like what I try to teach the people I work with is like predictability and anticipation. Right. So like. Right. If you're, if you're talking about bringing on a sales rep, that's already done in my eyes. We need to start thinking downstream. With this guy, you get a really good sales rep and he's selling 2, $2.2 million. He's going to blow up the rest of the value chain, you know, so.

Yeah, who's gonna do all that work? All right, so you go into their financials, you look at their org chart, talk with them, and then what's, what's the next thing look like that you're evaluating or going through?

Yeah, I saw. Like, what are we looking at? What are we, what are we measuring? Like, what tools are we using? Right. And like, you know, depending on the size of the company, like a two million dollar company, you know, most of them don't even get their financials in time. Right. So they're paying a bookkeeper that's not delivering a monthly report to them and they're just so busy, they don't press them. So like usually like when you're working with someone like me, I'm like, we can't be productive unless we get these reports. Right? So. And like, I think you, you may well, like I, I get involved with marketing, right. Because I look at the whole Business flow. And like, if. If our. If we're not getting sales and we're analyzing marketing, you know, you start to get involved and kind of put pressure wherever they need the support. Right. Like, in your world, a lot of them will be like, I don't understand these metrics that they're sending me. I need to. I need to know how to interpret them and stuff like that. Right?

Yeah, for sure.

But so, yeah, it's. It's like, what are you measuring? And like, most of the time, they. They're not measuring anything. Right? So, like, you sound like you're a fan of Vern Harnish, but Vern Harnish and Rockefeller Habits talks about give everybody that one number that's making an impact on the company. So, like, if it's operations, it should be revenue per labor dollar, for example, or something. Right. And the, the back. The biggest part of that is, like, we also want everybody to know, like, they came to work today and they did a good job. So, like a bookkeeper who's responsible for AR collection, like, they're like, whoa, AR is within terms and all good. I'm doing my job really good, you know? So, like, we got. We got to identify, like, where we got design, like, what do we measure and what's the most impactful to measure? The opposite of that is some people just measure, like, 20 things and, like, it's not impactful.

Yeah, I love it. We. When I was at the home service business, it's like, you don't know if you're winning or losing if there's no scoreboard. So what's the scoreboard? At least just put it up there. Like with our technicians, it was number of reviews. So every single day it was like, this is the number of views. With our csrs, it was number of jobs. So in their CSR room, it was on the board with the jobs. And then it's not 20 numbers. Just like, here's where we're at for this month. Here's our goal. Are we winning or losing?

That's right. And the numbers should shift, right? So, like, if we got productivity problems in the field and, like, I'm real big at, like, doing themes. So, all right, we're going to make Q1 our productivity focus. Let's get the number, let's measure it, and then you'll see it progress. Like, it. It's like anything we focus on, we do see improvement, and you'll see it progress. So then we're like, all right, we got to get a different number for Q2, because production's on it, right? So maybe it's sales, like reoccurring revenue or something like that.

I love it.

I love it.

Can you talk a little bit about another unique thing is that you actually will go out into the field and pre show. You were telling me you were just, you know, on site doing annual planning and that kind of stuff. What, what, wait, so when you go on site, how impactful is that? Because a lot of people, you know, they have coaches or something, but they don't come on site, they don't meet with their team, they don't do that stuff. Is that something that you like, hey, to work with me, you have to do that. And then what is the impact? And then what are you doing to help them on site?

No, it's a good question. So I, I think where I tried to differentiate precision was we're going to get involved with you, right? So we, you know, one thing is you start with the owner and then you very quickly work your way down and you're working with like the ops manager, right? Or you're working with the sales manager. And then it keeps extending down and then like where I see it ending is like, you get in the field and like. So I, I mean, I, I got, I have 20 years training in lean process improvement. So I, I have the ability to look through a certain lens and it's like super easy for me. Like, you know, I've been through the fires and like, you go out and like, the things just hit me. Right. So my goal is to teach those people how to look through that lens and see it. So, like this week we're. We're down in Virginia with a painter and we spent two days in the field and you just see things like startup inefficiencies or like, why, why is this guy running at Home Depot when we should be a. Could we have that done already and set up properly for a good startup? Or does the crew shut down? Or could one guy keep, you know, doing setup? Just things like that, right? Like there's. There's so many inefficiencies that get hidden and it's because we're not measuring. Yeah, right. Yeah.

And a big one that was happening for us. So we had 28 texts. We had 14 trucks and all the guys, every single morning, 7 o', clock, they would take their truck and go to the gas station and fill up. There's not 14 pumps there. So they'd all be sitting around joking around and they wouldn't get on the road till like 8. So I was like, okay, could I find a company to come in and fill the gas tanks at our office the night before? So then they just start their day with full tanks.

Yeah, so I, I've done, I, I, so I Learned that at FedEx, right. Like, and I, I've had the moving companies I work with. That's what we implement it. Like if you can't get on site fueling you want, like you get your fuel on your way back in the afternoon. Because what, what happens is if when they, they dispatch for, for say and like up here we got Wawa, right? So like Wawa, they go in, they get smokes, they get food, they're getting gas. That's like a 30 minute clip. If you got a four man crew on that, like that adds up. Right? So like just, just the small things like that, right, like that's like probably super low hanging fruit.

Yeah, exactly. What about in the sales process? So like for us from a marketing perspective, a lot of times like the companies that are 1 to 3 million, we can generate leads for them, but then usually there's not a good lead management plan. The owner is the best salesperson and then they need to hire a sales team and then grow that side of things. Have you worked with people on that? And then what do you see are some of the big bottlenecks or how do you fix that with them?

Yeah, so that's almost everybody.

Yeah, exactly.

Yeah, like, so again it comes down to like, are you measuring your clos rate? Are you measuring following up on like an open estimate? You know, I think the biggest pet peeve for an owner, if they go into like house call pro or something, they see an estimate that's open for like eight days, like you know, they lose their mind. Right. So like that, that's important for it. You know, also with the sales estimation. So think about the same flowing through the whole process to the field. Right. So an estimator makes an estimate, it goes through all inside operations and back office and then it's handed off to production. Well, you know our, our production crews are like machines. Like these guys, like a painter, they're just getting out there and they're painting. Are they evaluating? Like, all right. I walked into the job for the first time, I'm looking at the hours laid out, the estimate did, Was it accurate? Right. So it's really important to kind of get that, that pushback. Yeah, that extends itself to job costs and like, and it, you got two measures of accountability of production, saying hey, you didn't give me enough hours or, you know, sales saying, no, this job missed its gross profit because your labor ran high. Right. So, like, you know, so to answer your question, most of the time sales is in the silo and you got to integrate them into like the whole process. Right. It's not like we just sell and we move on, you know? Yeah.

They need to understand all the moving parts. But the main numbers, it sounds like, is obviously your close rate and then. Yeah, close rate. Maybe like estimates created or something like that.

Yeah, yeah, yeah.

Okay. I do want to ask you about, like, profitability in general, because as someone scales from 1 to 10 million, usually what I've seen is like, profitability percentage will go down because you have to reinvest a lot in the business.

Yeah.

How do you coach someone to balance that? But then also, like you mentioned about moving in quarters, but is it like, hey, next year the profit's probably going to be down a little bit because we're going to make a big investment in this. Or how do you coach someone on that part of it? Curious.

Yeah. I just did that yesterday with a floor and line striping company. We're talking about bringing on a sales rep and we did very good this year, but we're like, we can expect less next year, right?

Yeah.

So then you get, then you talk about like, sales is kind of easy because, like, well, you know, if you get like a, what I call sales shark, a really good sales guy, there's no overhead cost there because they're like, they're like, I don't want any base. I want straight commission. I want to be at 8%. Right. So there's very little risk there for you. It becomes a matter of managing performance, you know, but like, if you're, if you're growing and you're like, I got to put in a, like an admin role to do job costing and stuff like that. Right. You always say to yourself, like, all right, there's an ROI there though. Right. Like, if someone's mining the data and put in front of the decision makers, we're going to get better and we're going to get more efficient. Which there should be a return on that role.

Yes.

So one thing I, that like, I love doing and it goes back to lean, though, is do you ever hear leader standard work?

No.

No. All right, so leader standard work is when you. We have all these roles in our company. Right. But we want to know, like, there's, there's, there's certain things you do every day. There's certain Things you do every week and certain things you do every month and sometimes annually. Right. So like, you know, 80% of everything that most of our people do is non value added. It's the 20% that's really growing and making us profitable. So we really got to streamline that. So, like, what I do is I get in a room with the leadership team. We put all the roles up and we outline this role. Should be doing this every day, you know, but when you do that and you got like, we usually decorate the walls with it, you see that you have overlap. So just did this last week with a moving company coming out of that, like three positions were overlapping terribly. And we're, we, we just. Yesterday we met. We re revamped the org chart. We're probably unfortunately eliminating two positions and just getting more streamlined with what we had. We eliminated all the overlap. So owners don't see that until you put them through an exercise like that. And they look and they're like, wow, you know, it just kind of smacks you in the face.

Yeah.

You know, so, but like, back to your question. Any position that we add, you got to understand the ROI and their contribution to like mitigating that spend or that overhead.

Yeah, yeah, yeah, definitely. I think being okay with taking the profit and investing in the business and, and not being scared to do that. When you have a good game plan and good numbers and the strategy behind it, it's a smart, it's a smart investment to try. I do want to ask you about. You mentioned about Scorecard, and I'll ask you about scorecards first. And I have another one. So scorecards. Is this just like an Excel spreadsheet where you kind of have things or what's the best way that you found so that the owner can know these numbers and like, easily figure it out?

Yeah, good question. So, like, yes, spreadsheets are typical. Right. But you also have like, Housecall Pro. Monday.com is excellent. Like, a lot of them are building their scorecards into that. So like Monday.com every role in the company can have a segment in there. Salesforce is good. You can put operational stuff in there. But like just the key is it's got to be visual, right? Like, I never, I never push on. Like, it's got to be in Excel or whatever. But if you don't have those platforms, then Excel works. The key is, is it visible? Are you like. Do you ever hear the Hawthorne effect? The Hawthorne effect is like, if you put a light on it and you measure it, like it's going to get better every time, right? So like scorecards is just like, it's got to be visual and it's got to be meaningful. Right. So like it should I, I coach around, like give one, one segment of each role in the company one number and then what you do is you have your meeting cadence or your staff meeting, they bring that in. The scorecards in front of everybody. And like the sales managers talking about our close rates and our, our conversion and timelines on from like lead to sale, right. Operations guys talking about, well, we, we had this many estimated hours. We came in this actual. And what's that gap? You know, so like there's something for everybody. Finance comes in and talks about AR job cost and stuff like that.

Yeah, yeah, I like it. The leadership meetings, would you recommend having them every single week?

Definitely I would, yeah, I would. So like, I'm a big proponent of, you know, usually when you start them, they're messy and they're long. But like if you, if you dial them in, like that could be like a 45 minute deal for you, right. Depending on the size of your company. The other part, like, I think that helps that. So like go back to Vern Harnish and the Rockefeller habits. There's the daily huddle process where it's like a 10 minute huddle. It's like, hey, Phil, where are you stuck? What. Where are you at with your number? Where you stuck? How can I help you? And do you have any feedback from a customer or an employee? Right. And then that streamlines everything, like, because what, what happens every day is like they're all getting overburdened with emails, phone calls, texts. Right? Do the daily huddle where you got them all together.

Yeah, yeah, we implemented that at my business went before they all went to the gas station. We basically, they all had their routes and everything and it was like, hey, real quick, here's where we're at for these numbers. Our reviews are over here. Here's some of the things that's coming up. Here's some of the things that we got going on. Like we're going to crush it today. Does anyone have any issues or questions they want to bring up? Five minutes.

Boom. Yeah, that's great. That. So that, that was like your operations people, right?

Yes.

But like even for your leadership, where you got like an ops manager, you got a sales guy and you got inside ops, just get on the phone because like they're, they're all integrated somehow, right? They'll be like a question will come up and the Ops manager is like, I don't know, I got to check with like the admin, see if they talk to the customer and stuff like that. So there's a lot of wasted time of emails, texts and stuff like that. Just have a quick huddle via phone or zoom or something.

Yeah. So it sounds like from what I'm hearing from you, if someone's listening to this, the first thing is you got to have clean books. So either you need to have a bookkeeper or you need to have a bookkeeper that knows what they're doing and is giving you clean data. Then you got to have an org chart with designated roles for people that are doing stuff.

Right.

Then you need to have some leadership meetings and everyone needs to have a number that's dedicated to the actual org chart that's going to drive some type of growth. Not just a random number, but something that's going to lead you to where you want to go.

Right? Yep.

Yeah. It sounds easy when you say it. I know from running a business that it's not easy.

No, not at all.

Not at all. That's why you need someone that's going to help guide you in and say, hey, yeah, oh yeah, I need to do this. Oh, yeah, I need to do that. And like, get the ball rolling with stuff.

Yeah. I, I have like a number of clients have been with me for like four years.

Yeah.

And like, we, we are just getting into the operation, excellence in the field. So we went through all this, like, we, we got the financials cleaned up. We probably changed the service provider we were using. We got KPIs going. Right. Like, so, like that whole front half of the process flow is tight and now we're just looking for all the opportunities in the field.

Yeah. So, yeah, I think a lot of times people want to grow and they think, oh, I'll just do more sales or get more marketing. But it's really, you got to do the foundational stuff to get you to the point that then you can explode growth by having all of those things in place.

Yeah. So I, it's. I'm glad you said it. I always say you can't, you can't outsell inefficiencies.

Yeah, exactly.

I have a lot, I have a lot of people that are just so focused on the top line, but it's like, hey, do you realize if you shave 2 percentage points on your cost of goods, it multiplies as it flows down to your net, you know, and they never knew that. So you're just kind of like, Educating them on that, and then they just look at their business a different way.

Yeah, it's so good. On a marketing perspective. Like, people come to us and they're like, I want to grow my business, but they don't have a salesperson. They're the owner, running around, firefighting stuff. They don't have a CSR that can talk. It's like, you could hire the best marketing company in the world, but it's not going to grow your business.

Right?

Yeah. You got to fix all the stuff in your business first.

That's it. And, you know, like, some of the people I work with, like, depending where they're at in their journey, if they're like, in phase three of owning a business, meaning they're older and they got to pass it off to their children or their position in the cell, everything we just talked about increases the value of the organization. Right. So that. That's the goal here. Like, is the business serving you? So are you profitable? And, like, do you own some of your time to do the things you love? So, you know, the one thing I know, I learned from working with all these owners is, like, they do some cool stuff. They go hunting all over the world. They go skiing, like, you know, and that's the stuff they want to do. Right. And it's like, did we attain that? And then, like, are we building value along the way for, like, if you, you know, if you choose to move on or not?

Yeah. Built to sell, whether you sell or not.

That's right.

I love it. Cool. Jim. Well, thanks, man. This has been a great conversation. Where should people go to learn more about you or maybe if they. If you might be able to help them or what should they do?

Yeah. So I. So it's precisionprofits.com. there's a website, LinkedIn. I'm pretty active on LinkedIn with my company, Facebook, stuff like that. So you could just reach out to me through any one of those channels. And like, you know, I. I, like, just like, I always start with just kind of learning more about you. Discovery where you're. Where you're stuck. And then if it's a good fit, we start talking about all these things we talked about.

Yeah, I appreciate your information that you provided, but also I know how you work with clients. And like, a lot of people say, you know, oh, I go on site or I do this stuff, but, like, you're really invested. Like, you were even on the sales call for the company that we both work with, you know, evaluating us as a marketing partner, which rarely does that ever happen. So.

Yeah, no you're right. Like I think it's. You got a luxury of picking who you work with.

Yeah.

Right. But like you the relationship. So coach, coaching can go two ways. You can get a consultant. Like you're like man I spent all that money, I have no idea where it went. Or you can gain like a, a strategic advisor basically like a friend as well. That that's with you for years.

Right.

And I'll be honest. Well it far is beyond just business. Like there's stuff that happens in life that you end up talking to them about and stuff like that because it's all related. Right. And yeah, it's cool. It's cool. I love what I do.

Yeah. Yeah. Awesome. Well thanks so much Jim. I look forward to continue the conversation.

Yeah. Thank you. Yep.