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You can grow the top line, but the bottom line is all that matters.
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Know what scales.
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If you're not making money, scaling will not fix it.
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The business is there to support your fulfillment, happiness, and your quality of life. I looked myself in the mirror and said,"This isn't working. How could I make a change? And when I started doing that, it opened up the doors for a lot of opportunity. Welcome to Builders Budgets and beers, I'm Reese Barnes, and I started this podcast to have real conversations about money and the building industry, the wins, the mistakes, and everything in between. I believe builders deserve to feel confident about their finances, and that starts by hearing from others who've been through it too. This industry can be slow to change, but the right stories and the right tools can make profitability feel possible.
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Let's get into it. Alrighty, sir, mikes are hot.
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Uh, that's right.
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I gotta admit, it's weird being on the other side of this. Yeah, I almost didn't know what to do.
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I still don't know what to do.
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So you don't have to be nervous, and I can see that you're nervous, Tyler. Yeah, man. I'm. This is just a lot for me.
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Yeah, for those of you that aren't watching this, he's sweating profusely right now.
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It's bad. Yeah, I was.
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I was trying to. I was trying to get out of it, but I couldn't. I couldn't reschedule twice in a row.
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That's right. That's right. We just follow up and just confirm and just get get this meeting firmed up, baby. Okay, but for the listeners, Tyler, give them a little background on yourself, who you are, what you're about.
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I mean, like, there's going to be a title and everything, but I think it's helpful for people to hear who you are.
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I guess if you go back, so I'm Tyler Grace. I own TRG Home Concepts, small remodeling contractor. I am a co-host of Modern Craftsman podcast. Who am I? I have. I'm married to my wife Rachel. Got married in 2011. I have two daughters, and I got in anger management. It's like when they when they're asking like,"Who are you? and he's like,"Well, I'm so and so. He's like,"No, no, no, no. Who are you?
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Yeah. So, so I mean, it it all plays a part, I think, in what I do and who I am, and I guess getting into the trades. If you want that background, I grew up in a relatively affluent town.
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It was get done high school, go to college. I didn't ever want to go to college, but that was just the next step. So I ended up trying to go to college. I was a science major, wasn't a huge fan of college. Didn't want to become. I realized shortly after I didn't want to become a scientist. I didn't want to be a professor, so I dropped out. I'd always worked with my hands, worked in the trades, and I dropped out, and I just started working in construction full time. And then I realized I probably wanted something to fall back on because I wasn't in love with where I was or what I was doing. I still just didn't really have a path, and I think I kind of fell into construction by proxy. And then I ended up transferring to Drexel University in Philadelphia, where I met my wife, and I went to school. I got a construction management degree, which was primarily commercial, and I absolutely hated it. It was terrible. All my internships, I absolutely hated, and so when I got done college, I decided that I wanted to. It was probably naive and and extremely foolish of me, but I would just start my own company because I could charge 3540, bucks an hour, and that was way more than any of my friends would be making. And I would be set. Hell yeah! And I, you know, a couple years into it, struggling, not making money. Five years into it, still struggling. Seven years into it, realizing that it just wasn't a viable model. So I started switching things up and started marketing myself a little bit better. But then, you know, seven to 10 years rebranding and starting to understand business.
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And I think now I'm 1516, years in business, and I have. I'm not from a business perspective, I'm not this amazing, incredible business. Like I don't have all the systems in place, but I know my lane, and I stay in my lane, and I'm profitable in my lane.
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And that's like from a lifestyle perspective, that's what works.
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That's what you're running, dude. I love it.
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And honestly, like this falling into construction story is.
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is, yeah. You did you mention that you? So you initially got like trades experience in high school.
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Yeah. So my my dad, I he wasn't really a contractor. He he kind of was a contractor, but he he would buy rental properties that were disheveled and run down, and he would renovate them and then pull equity out of them and borrow against them and buy more rental properties. And then if things got slower, he needed cash. He would do some jobs for people. So I grew up maintaining his rental properties and working on and off. In construction, but I always say my dad taught me what not to do.
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Sure, if it was whatever my dad taught me, go 180 degrees in the opposite direction, and you be in the vicinity of where you should be. Yeah, so that was pretty much my experience with it. It just it wasn't doing things the right way. It was a bit of a mess, and it probably just typical construction, and I knew that I didn't want that, but I did enjoy working with my hands and creating stuff and the problem solving behind it.
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You talk to a $20 million a year company, and they're just as vulnerable as a $3 million a year company. Like there is no there is no guarantee, and what does it really boil down to is the process and systems to get the costs categorized with the right codes to tell the picture to understand the data to say where are we winning where are we losing. Okay, the association here is is like I don't even when the kids start playing football like fifth grade sixth grade right probably earlier now right like tackle football right we got the pads on we got the helmets on we're looking like the NFL team, right, and we're running like the basic plays, the blocking and tackling, it's the X's and O's, it's the basics. And then you go, well, what in the hell is the difference between a sixth grade football team and a professional football team? They're running.
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I mean, that you could literally have Pee Wee football running a play that they saw on Sunday, right, from the professionals, or trying to at least, right?
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It's blocking and tackling. The difference is is how well they execute and how how much they prioritize the fundamentals.
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Because you look at any lineman on a professional team, their footwork is impeccable. They know where they're stepping.
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They know where they're looking.
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They look where they're moving the the next guy, and it's no different than the young guy who's doing it, and I'm making this whole association with cost codes because it seems so simple. But we're talking to these builders, like I, I told the story on the last episode that I just did, so it might be a little repetitive for builders, but it was so impactful. $20 million a year builder, one of our clients, love them to death, no slight to them. It highlights the fact that these $20 million, 30 million, 50 million, 100 million dollar companies struggle with the same thing and prioritizing and emphasizing the process around knowing your cost is the difference in scaling your business. That's it. You're gonna be sitting here saying,"I've got my cost codes and my project management software. I got my cost codes in QuickBooks.
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They might be different, and this is how a field does it, and this is how accounting does it, and this is blah blah blah. It's like that's a part of the problem. Start to bring it in, get everyone on the same page.
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Everyone has the same codes.
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Everyone's using the same codes.
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We're speaking the same language. We're using them consistently to paint the picture. End of rant. What's your take?
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Yeah, I I I would say on that, a lot of a lot of builders have to get to 20 million, 30 million, or whatever because they don't know the data. They they often times companies when they get a few things right, they whatever that is the the marketing, the product, the houses that they're building, the reputation, all it that's all great. You need all of that stuff. That's typically what it is. Yeah, and then they. What I say is they blow through their sweet spot instead of gliding through it just slowly and realizing, oh wait a minute, we can if we did $12 million at a solid eight to 10% net profit, then we don't need to chase $20 million at 5% It's actually more profit, and there's a lot less headaches and a ton less risk.
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But because of whatever the good things that are happening in their business force them to grow, and that's why I hear all the time. Oh well, I want to scale, and I always ask, why do you want to scale? Oh, what?
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Because I think it's like a buzz. People think that I'm like, what about growth? And you can grow the top line, but the bottom line is all that matters.
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Let's grow the bottom line first. You might find that you need fewer people, less you use less resources to make more money, dollar wise, or you know, or percentage wise. Either way, and then and then once you realize, like, oh, this is now very repeatable, then you then it's like now we're just what what makes this repeatable?
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Systems support people. Now we just start plugging units into our business. Oh, we have the opportunity to do 20 million.
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We're at 12 now. That requires four more units. You know, and I'm not talking about whatever those units are internally. Oh, we're going to need another. You know, like the way that it breaks down is like, oh, in order to go from here to there, I need 1.5 more project managers on a unit base. Great, that's what the data says. Guess what?
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You probably can't hire 1.5 project managers if you if you only hire one, everybody. Going to be overworked. The math and data says you need 1.5. The real world says I can't hire half a person. So guess what? I got to hire two. If I do two, then I can't go to 20 million. I got to do 24 million. But that would be my sweet spot or whatever. And if we can't get there or whatever, I hired two. You know, this sounds. I hired two. We're not quite there. I got to get rid of the one so we can get back down to 13 million. With the, you know, it's just let the the you guys say it all the time, and the numbers and the data say it. It tells the story of the business.
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100% When you open up the story of your business, if we're just looking at the data, I want to.
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The way I look at it, chapter one, here's my product. This is what we sell. Chapter two, here's how we sell this thing.
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Chapter three, here's the margins of the thing that we sell and how we sell it. Like that's that's it. I will keep adding more chapters to the book as long as it comes in, you know, those three pieces of information.
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As long as the margin follows, as well, I always say you have to test some things out. So I always, I always tell business owners if I were to like going into a restaurant, and I always use this example: go into the, you know, nicest steak restaurant in your in your town, they're going to have a very limited menu because they're known for that thing. They're going to have some side dishes and they're going to sell you a fancy bottle of wine, all that kind of stuff. But that same sort of thing, if I was to go into a to a builder's business, say, okay, what's on your menu?
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There should be three things. I say the money making, like this is the thing we know we make money at the expert creating.
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This is the reason people call us over. Like we're known as experts in something, and usually the expert thing ends up becoming the, as I say, the boring money making thing. We can do this thing all day long, and we know how to make money at it. But that third thing I call this is like the appetizer on the menu. It's always eliminating, meaning let's test this thing out. Oh, let's do the bacon wrapped shrimp avocado toast appetizer because we think it we might be able to make money, but it's an appetizer.
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Let's test it out. Let's track it, and if we say, how can we turn the appetizer, the always eliminating, into a money making or expert creating thing? If we can't, in a certain number, get it off the menu, put something else on there, and it's kind of like what I said before. I don't want to send my guys out and pull them off the crew for what I'm paying, you know, or what I think someone will charge. If someone will buy their whole day at $1,000, I don't have to estimate anything. I can send them an invoice, or they'll even prepay. Man, that would be pretty cool. That's an expert creating thing, right? Oh, when I realized I can send three guys out a week, pull them off a job to go rehang someone's door. I don't know whatever it was.
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That's an extra three grand a week, and it cost me 200 bucks, like all day. Okay, now we have another product on our menu. You can get a 16 ounce steak. You can get a very expensive bottle of wine, and you can also buy a carpenter for a day at $1,000.
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Most people aren't. That's okay because when you do, we're gonna make a ton of money at it.
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Totally, totally. Well, and I think like that that that exploration is what keeps business fun, right? Like that's what keeps it like ever evolving. But it goes back to like knowing what you're gonna make money on, know what makes you the expert, and it just it boils down to know what scales.
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Like before you're scaling anything, know your numbers.
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Know that you're at least going to make money on it. And to your point, it's like they they'll get to a 20 million on like a bread and butter from a product delivery standpoint, but they never quite understand that they're losing money or the business that they've built is completely dependent on the next project coming in, and it's just this like dripping cash flow problem in the business, and as soon as the spigots off, they're done.
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The problem I see with the again, no offense to the 20, 3040, maybe $40 million businesses out there is that it provides a very good living for the owner. Like a $20 million dollar client. When I worked with him, he was about 6 million, right place, right time, and he's a freaking awesome builder in Nashville.
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Great market to be. Again, this was 10 years ago, and and last time I saw him, he was at 20 25 million. I was like, all right, man, you know what are you paying yourself? You know, he's like, oh, I'm I'm you know, got pulling 350,000, you know, dollars, and we have whatever in profit or whatever, and I just ran the numbers, and I'm like, and the thing is, don't be$350,000 as a salary plus some, some dividends, you know, from from the profit or whatever, but I'm like, it's like a half a mil. Ah, to $600,000 a year.
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Trust, I'm. I'll take that money, but you divide that by 20 million reasons why you're at risk.
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Dude, not worth it.
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Pulling in 2 million a year.
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Yes, like you're. You got. Don't get me wrong. You got a $600,000 lifestyle, and life is great, and things are taken care of.
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I'm just saying that's lopsided from a risk and a percentage standpoint. If there's 20 million reasons why someone could sue me and ruin everything, I want to make sure I'm getting you know a good return on all of that risk. But that's the problem with growth too, especially contractors that have some pretty good, like they they do a good job. They're making quote unquote good money because they're well taken care of. But from a purely mathematical business standpoint, the risk is so lopsided.
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Totally, totally. I mean, you start to sit there and you're like, just I could I could reduce my risk and just dump money into the S and P and get a 10% return. It's like if I'm not if I'm not at least hauling in a 10% on the 20 million, like what am I doing? Where like what are some of the biggest like low hanging opportunities? Aside, we kind of talked about it from like a job description thing. Is like we can talk about all the processes and systems, but you don't have job descriptions. It doesn't matter. What are some of the other areas that like builders could see just like immediately listening to this podcast or hearing from you that they could be like focusing on?
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Yeah. So what I always do with new customers when we're talking about working together with new clients is to talk through a handful of categories, and I'll have them rate themselves on a one to a three. So one would be this is a disaster, like we don't have this under control at all. Two is like it's okay, it could be better, and three means we've got this. We don't need to worry about this. This is going well. And so the things I'll ask them about are accounting. Do you feel like you know where your money is coming from and going to? Are you making money?
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Are you able to track your expenses? Do you have reports that are meaningful to you? So that's the first category. The second category would be your people. Do you feel like you have the right people in place?
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Are they clear on what they're supposed to be doing? Is it written down? Do you have a good cadence for giving them feedback? The third thing that I would ask them about is quality.
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How do you feel about the quality of your product? Do you feel confident that you're putting out a quality product that your customers are happy with? Do you trust that the right things are happening in the field? The third thing that I ask them about are schedules.
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Do you feel like you can trust that things are going to happen on time? The what number are we on now? I don't remember what number. This has been third. This is fourth.
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Okay, great. So we've got accounting, people, scheduling.
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Oh, quality was the other one.
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Quality.
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Yeah. So then the next one.
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Let's just throw the numbers out the window. The next one would be customer satisfaction. Are your customers happy? Do they recommend you? Do they come back to you again? And then I think maybe my last one would be like mission and purpose. Do you feel like you have a good story for why you do what you do? Are your people clear on why you do what you do? Are you able to create good branding messaging around that? Are you all clear on where you're headed and why you're headed there? So I look for the ones and the twos, and if people or accounting are a one, or even really a two, we're gonna start there.
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Yeah, because before we do any of this other stuff, we need to know: Are you making money? Is your money safe? Is anyone stealing from you? Are you losing money in places you don't understand?
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Are you? Can you even tell if you're profitable or not, right?
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If you need to take out a loan, can you pull together the right documentation? Like money, let's figure that out. And then the next one is people. Do you trust your people? Are they clear on what they need to be doing? Are they mostly doing it?
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Yeah.
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If those two things are off, I don't care about your punch list checklist. Yeah. We don't need to be doing that. We don't need a pre-con checklist. We don't need any of that stuff. We need to know if you're making money, and we need to know if you've got the right people, and then from there we can talk about other low-hanging fruit.
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Totally, and that's that's like effectively what you're doing is you're just like stripping everything away, all the noise, all the confusion away, and you're getting it down to an expectation and a very easy to follow process, and then from there to your point, that's where like once the foundation is set, then you can start going crazy, and that's where I do. I hear like even all these builders, and again, I might be biased, but I hear I'm like, well, we need project management software, we need this, we need that. I'm like, how many projects are you running?
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They're like, we're doing like three or four. It's like, how many project managers do you have? Like I have like one or two, and then like I'll manage other ones on my own. It's like, okay, well, like, are you confident that you're walking out with like a net eight to 12% on these projects? And they're like, that'd be great, but no.
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It's like, well, what are we trying to do to scale all these like further complexes and throwing on volume when like the opportunity is here today to iron out. What the process is to accomplish building this product to sell it at this margin, right? And it's like that's effectively what you're doing with the sales team, right? It's like you're stripping it away.
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Like, what are the basics? Like, here's the blocking and tackling. What does it take for me to get more contracts? I need to know how many calls am I doing? What are the outputs, and then what are the out or the inputs? What are the outcomes, right?
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And you just touch on such an important point that I think people miss all the time. If you're not making money, scaling will not fix it. All you're going to do is you're going to have more volume of not making money. Like you, if you can't make money on one project, two project, three projects, you're not going to make money on 50.
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So like you have to figure out how to be profitable at a small scale before you blow it up.
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It's just going to get worse. It just magnifies the chaos.
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It's it's like what every not every a lot of builders you mentioned hot markets and like frankly it sounds like we're like coming out of a hot market.
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Oh God, Austin Austin has been a disaster since like 2022 maybe.
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Yeah, yeah. Well, Austin is like its own little like real estate ecosystem use case or case study. Yeah, we've been out of a hot market for a while.
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Yeah, yeah, yeah, yeah. But the point being is, like, all these guys like they would run out and they'd be like, "Holy shit! Like, money's free and people are blowing like crazy and inventory is non-existent. Like, we got to fill the gap. And then it was like they would go out and they would do a 200x business and they would just scale it like crazy. And then it's like they look at their balance or at their at their statements at the end of the year, and they'd be like, "I'm not making any money, any more money than I was at a quarter of the volume. I'm going to go back. I was like, "It's not that's not something for you as a as a as a career entrepreneur to take a step back and say,'I'm never going to do that again. Is to look back and say,"What could I have done differently? The biggest role in any construction company, the biggest role, the most critical role, is hiring that person that can keep you out of the field, or promoting that person in your company to a position to keep you out of the field. Why? Because that time that most owners are spending in the field can be 2030, 4050, hours a week, and then as soon as they're out of the field, all the other activities necessary to build up like a $30 million year juggernaut is actually quite adaptable, and what I mean by adaptable is like if you realize, okay, like I just hired, you know, this person to keep he or she to keep me out of operations. Now I have 30 hours a week where I can focus on marketing and sales, and then managing the person who's running my financial controls and running ops, but I have 30 hours a week to focus on marketing and sales. You can leverage 30 hours a week in very powerful way, just doing marketing and sales. Like one person can be very effective in those in those areas. Another thing I'll say though, the management of operations and the management of financial controls must be done with simple, clear systems. In today's age of AI, you can go download hundreds of documents and SOPs that are just going to confuse your team. So one of the things that we stress is the 8020 rule. When people come into our our system, they just get simple, clear procedures and accountability systems that have been stress tested against super high performing companies that have already done this. We're not here to show everyone how smart we are and give them boatloads of information that we got off Chat GPT. Just simple, clear, concise systems that have already worked dozens of times with great companies, hundreds of times actually. If you want to count, yeah. Okay, so that that's really important. If you're going to train people, make sure you're you have systems that are putting up strong boundaries around how they're managing their day to day activities.
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Yes, and the reason I wanted to ask you the why is because that's tying back into your comment earlier about the carpenter starts a business, bags on as we call it, right?
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They're performing the work, they're doing the thing, and then it's a out of bed next morning, business hat on, right?
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I'm getting the. I'm developing the business skills. I'm developing the finance acumen.
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I'm developing the marketing, the sales acumen, the brand acumen, the process acumen, the the management acumen. All of those things. That is what business skill means, and that's why you need to open up more of your time. So then you can now say, okay, I know how to do the skill. I know how to install the cabinets. I know how to do the trim. I know how to do the tile, the plumbing, the this, the that, the other. That's all stuff that I can get a team doing. And now I pull my time over and I look at my return on time from building my business skills. Yeah, fair.
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Yep, yep.
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It's a full circle moment.
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That's exactly. And as soon as you get yourself out of operations, it's a clear shot up to level five self-managed company. Yeah. First level, chucking the truck. Second level, you're you're wearing all the hats. Most businesses never get through that level. By the way, nothing wrong with that.
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Most businesses never punch through. That's where the owners managing finance, marketing, sales, ops. Third level, though, is where the owners only managing sales, sales and marketing. Fourth level is where the owner has a leadership team running sales, marketing, operations, and finance. And the fifth level is where the owner has a general manager managing the leadership team, and that's a true self-managed company. And at that point, at that point, that's when the companies really take off because it's usually about that. It's usually at that level where they're rolling out like a little bit of equity ownership to their leadership team and their general manager, and then those people are all incentivized themselves to continue growing the organization beyond its current state. If it's doing 20 million a year, you'll see it'll jump to 30 million, and then they'll start talking about different revenue streams, et cetera, maybe operating in a different area.
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Yep, because they're all motivated to continue growing the organization beyond your capabilities, and frankly, they're going to be better at their job than you at that point because all they focus on is operations, or all they focus on is financial controls, which is great. And that's one of the
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is they're able to train people under them to execute at a higher level than they can. Love it, love it, and that's I think that's like the dream, right? Like you can just like the like the people that are listening are like, God, like how do I do that? Why do people and we this might be redundant, but why is it level two that always is like the biggest roadblock, the biggest hurdle? It's the tidy piece. They just can't. I think I might be wrong, but I mean, I think it's the identity piece. Guys just can't. They they just they just can't get themselves out of being a foreman that manages a job site.
00:27:11.339 --> 00:27:16.259
Yeah, they have to get themselves out of operations.
00:27:17.009 --> 00:27:44.319
I think the conversation is good from a self awareness standpoint because I think like you need to have like takeaways in a podcast and like people push structure, which I could probably get better at, but I'm just like so off the cuff. I think when you're when you're thinking about the guys that can't get out of the way of being a format, do you think that it's because like that's where they've seen the most success and that's where they like internally place the most value on themselves, like it's a comfort thing, right?
00:27:44.859 --> 00:28:03.779
100% yeah. One of the things that we always tell people is set up good anti goals for yourself. There's one thing to tell because okay, because what can happen is we tell these people to go build these companies, build wealth, build self managed companies, yeah, grow to 30 million, and we're gonna show you the path to get there.
00:28:04.410 --> 00:28:17.279
Yeah, they go like they get all excited about building wealth, but the other thing that we say is, "Hey, look, wealth is gonna come. It's there's no mysterious force out there keeping you from doing this. It's a foregone conclusion. Just follow the process. You're gonna get there.
00:28:14.730 --> 00:28:31.369
While you're doing that, though, set up anti goals for yourself, and what those are is negative outcomes that you want to avoid in pursuit of your financial goals and your business goals.
00:28:25.190 --> 00:28:54.220
Okay, yeah, say, hey, look, I am not going to build my company if it means that I can't take my wife on a date once a week. I'm not going to build my company if it means that I can't be home to have dinner with my children, or that I can't drive my kids to school three times a week, or I'm not going to be able to work out, or you know go to wing nights with my with my buddies once a week, or whatever it is.
00:28:54.220 --> 00:29:07.589
The things that give you fulfillment and happiness starts with family and and looking after yourself. By the way, you are not going to sacrifice those things in pursuit of your goals. The business is there to support your fulfillment, happiness, and your quality of life.
00:29:09.539 --> 00:29:11.279
Totally, super important, man.
00:29:11.339 --> 00:29:30.650
Dude, the anti-goal-that's great. And I think that even too is like when you think about this, just again to map it back into the conversation. It's like, like again, you're you're the you're the smaller you're the business guy, and this is like to your point. You, someone could listen to this podcast, and they'd be like, "I'm going to go out and I'm going to I'm going to talk to Paul. I'm going to build this huge company. I'm going to do all this stuff. But it's like, where do I start?
00:29:30.740 --> 00:29:35.509
It's like, well, maybe you start by like defining what do you want your company to look like.
00:29:33.259 --> 00:29:36.230
What do you want your company to provide for you?
00:29:36.829 --> 00:30:05.519
Yeah, and it's like it's dude. I don't think it needs to be any rocket science, but I also think people can lose sight of what they want the company to be in the day to day. Right? It's like I've got the project, I've got the job. I need to finish the job. I've got the next job coming up. Like I need to get prepped for that job. And I think just with all the busyness. You can lose sight on the anti goals, right? And it just slowly starts to creep in.
00:30:06.390 --> 00:30:33.589
It's been an interesting path, and there's been so much self discovery throughout this. And I've just realized that like there's so many people in my position that are just killing themselves to try and make $1, and they're not getting paid for their time off. They're not getting paid for retirement, and they're like all my customers get paid for every hour they work. Why am I working for them and not doing that?
00:30:33.769 --> 00:30:35.059
Totally, totally.
00:30:35.869 --> 00:30:57.940
So it it it has been it's been an interesting journey the past couple years, and a lot of self discovery and just analysis and inventorying myself and my business, and then as as I come across those findings, just sharing it with other people, and I think I think it's been super helpful for myself, and I hope helpful for other people.
00:30:59.529 --> 00:32:13.980
Dude, I I think the self awareness is huge, and I would say that's one thing. Like after kind of hearing your story, is like you're a pretty self aware guy, and it sounds like you have been for a while. Like you've known what you wanted to do and what you haven't wanted to do, and you've stayed very true to it. That's not to say that you didn't get burned, because you certainly did, and you certainly like ran in the wrong direction for quite a while, but now you're just like, dude, this is the way that it's done. This is the way that I'm doing it, and I think that there's a greater population that should feel supported in doing it. So I applaud you, dude. It comes down to being confident in yourself and in your business, and I don't think I think I was trying to convince people for a really long time that my model made sense, and I was trying to convince my clients that it made sense. And the more that I've inventoried myself, and that that that self awareness, that self discovery has enlightened me to what actually works and what doesn't work, and understanding my numbers and understanding my business, and that has created a lot of confidence with me. Where it's like, you don't have to hire me; you can absolutely hire somebody else. This is what I do well.
00:32:14.160 --> 00:32:46.720
This is what I don't do well, and I'm not trying to compete really with anyone. I'm not trying to compete with bigger companies. Like this is what I offer. This is how I can serve you. And if if I can't meet your needs, then you probably should go with somebody else. And I think that that has been critical for my success from a business perspective, a life perspective, podcast perspective, all of those things. Like I'm not going to please everyone. What I do may not be right for you, but I can share that with you, and I can share my experience with you.
00:32:47.259 --> 00:32:48.130
Yeah, totally.
00:32:48.309 --> 00:33:00.130
I try and keep things as simple as possible. I just I've realized that life is very short, business is very you know your clients can be very fickle.
00:32:55.240 --> 00:33:04.079
I put I put my clients before my own health before my own family.
00:33:00.400 --> 00:33:10.589
I put serving people and making people happy above all else in my life for so long that I'm just at the point where I'm like, I'm not doing that anymore.
00:33:10.950 --> 00:33:57.940
Yeah, yeah. When I was honest with myself and I looked myself in the mirror and said, "This isn't working. How could I make a change? And when I started doing that, it just it did. It opened up the doors for a lot of opportunity, and it's been it's been so much more enjoyable and less stressful. I have a better a better business now, a better life. I'm a better father, better better husband. It just there's a lot of things that it has fixed or enhanced that when things weren't working, like life was really stressful and and really chaotic and really challenging. And there were a lot of days where I'm like, I don't want to be in this business anymore. It just doesn't make sense. And it's not like that anymore. Sure, I have my days where it's like this sucks. I don't want to be doing this. This is a pain in the ass.
00:33:55.690 --> 00:33:58.990
But like at the end of the day, I'm getting paid for it.
00:33:59.470 --> 00:34:01.200
Yeah, so I can't complain.
00:34:01.650 --> 00:34:13.530
It works. It's worth it. You you found a way to make it worth it, and it sounds like to like regain the appreciation and the excitement to what it is. Yeah.
00:34:10.829 --> 00:34:52.090
Again, going back to your self awareness, like you knew what you wanted to do. You wanted to deliver a quality product. You were you were like you've got like this like almost like midwestern like perspective of just like I'm just gonna work my ass off and I'll get paid what I get paid, yeah, yeah. But it that to me was like this the selling point, right? That yeah that was what I always wanted, and I thought that's where I could I could provide value, but I realized that there there's a lot of opportunities to provide value elsewhere. Where, yeah, I'm still going to get paid my rate, but I can create a lot of value for you in that rate. Yeah, and I'm not going to concede my time.
00:00:00.119 --> 00:00:03.089
You can grow the top line, but the bottom line is all that matters.
00:00:03.120 --> 00:00:04.879
Know what scales.
00:00:04.980 --> 00:00:07.769
If you're not making money, scaling will not fix it.
00:00:07.769 --> 00:00:43.390
The business is there to support your fulfillment, happiness, and your quality of life. I looked myself in the mirror and said,"This isn't working. How could I make a change? And when I started doing that, it opened up the doors for a lot of opportunity. Welcome to Builders Budgets and beers, I'm Reese Barnes, and I started this podcast to have real conversations about money and the building industry, the wins, the mistakes, and everything in between. I believe builders deserve to feel confident about their finances, and that starts by hearing from others who've been through it too. This industry can be slow to change, but the right stories and the right tools can make profitability feel possible.
00:00:43.990 --> 00:00:55.509
Let's get into it. Alrighty, sir, mikes are hot.
00:00:56.679 --> 00:00:58.090
Uh, that's right.
00:00:58.780 --> 00:01:05.609
I gotta admit, it's weird being on the other side of this. Yeah, I almost didn't know what to do.
00:01:03.299 --> 00:01:05.609
I still don't know what to do.
00:01:06.090 --> 00:01:11.009
So you don't have to be nervous, and I can see that you're nervous, Tyler. Yeah, man. I'm. This is just a lot for me.
00:01:11.549 --> 00:01:16.319
Yeah, for those of you that aren't watching this, he's sweating profusely right now.
00:01:13.170 --> 00:01:16.319
It's bad. Yeah, I was.
00:01:16.530 --> 00:01:20.400
I was trying to. I was trying to get out of it, but I couldn't. I couldn't reschedule twice in a row.
00:01:20.459 --> 00:01:31.010
That's right. That's right. We just follow up and just confirm and just get get this meeting firmed up, baby. Okay, but for the listeners, Tyler, give them a little background on yourself, who you are, what you're about.
00:01:28.519 --> 00:01:33.890
I mean, like, there's going to be a title and everything, but I think it's helpful for people to hear who you are.
00:01:34.429 --> 00:02:01.799
I guess if you go back, so I'm Tyler Grace. I own TRG Home Concepts, small remodeling contractor. I am a co-host of Modern Craftsman podcast. Who am I? I have. I'm married to my wife Rachel. Got married in 2011. I have two daughters, and I got in anger management. It's like when they when they're asking like,"Who are you? and he's like,"Well, I'm so and so. He's like,"No, no, no, no. Who are you?
00:02:02.459 --> 00:02:17.818
Yeah. So, so I mean, it it all plays a part, I think, in what I do and who I am, and I guess getting into the trades. If you want that background, I grew up in a relatively affluent town.
00:02:18.088 --> 00:03:54.818
It was get done high school, go to college. I didn't ever want to go to college, but that was just the next step. So I ended up trying to go to college. I was a science major, wasn't a huge fan of college. Didn't want to become. I realized shortly after I didn't want to become a scientist. I didn't want to be a professor, so I dropped out. I'd always worked with my hands, worked in the trades, and I dropped out, and I just started working in construction full time. And then I realized I probably wanted something to fall back on because I wasn't in love with where I was or what I was doing. I still just didn't really have a path, and I think I kind of fell into construction by proxy. And then I ended up transferring to Drexel University in Philadelphia, where I met my wife, and I went to school. I got a construction management degree, which was primarily commercial, and I absolutely hated it. It was terrible. All my internships, I absolutely hated, and so when I got done college, I decided that I wanted to. It was probably naive and and extremely foolish of me, but I would just start my own company because I could charge 3540, bucks an hour, and that was way more than any of my friends would be making. And I would be set. Hell yeah! And I, you know, a couple years into it, struggling, not making money. Five years into it, still struggling. Seven years into it, realizing that it just wasn't a viable model. So I started switching things up and started marketing myself a little bit better. But then, you know, seven to 10 years rebranding and starting to understand business.
00:03:54.938 --> 00:04:11.308
And I think now I'm 1516, years in business, and I have. I'm not from a business perspective, I'm not this amazing, incredible business. Like I don't have all the systems in place, but I know my lane, and I stay in my lane, and I'm profitable in my lane.
00:04:11.459 --> 00:04:14.368
And that's like from a lifestyle perspective, that's what works.
00:04:14.519 --> 00:04:19.290
That's what you're running, dude. I love it.
00:04:14.819 --> 00:04:22.949
And honestly, like this falling into construction story is.
00:04:23.629 --> 00:04:27.740
is, yeah. You did you mention that you? So you initially got like trades experience in high school.
00:04:28.759 --> 00:05:04.110
Yeah. So my my dad, I he wasn't really a contractor. He he kind of was a contractor, but he he would buy rental properties that were disheveled and run down, and he would renovate them and then pull equity out of them and borrow against them and buy more rental properties. And then if things got slower, he needed cash. He would do some jobs for people. So I grew up maintaining his rental properties and working on and off. In construction, but I always say my dad taught me what not to do.
00:05:04.620 --> 00:05:31.550
Sure, if it was whatever my dad taught me, go 180 degrees in the opposite direction, and you be in the vicinity of where you should be. Yeah, so that was pretty much my experience with it. It just it wasn't doing things the right way. It was a bit of a mess, and it probably just typical construction, and I knew that I didn't want that, but I did enjoy working with my hands and creating stuff and the problem solving behind it.
00:05:31.699 --> 00:06:15.360
You talk to a $20 million a year company, and they're just as vulnerable as a $3 million a year company. Like there is no there is no guarantee, and what does it really boil down to is the process and systems to get the costs categorized with the right codes to tell the picture to understand the data to say where are we winning where are we losing. Okay, the association here is is like I don't even when the kids start playing football like fifth grade sixth grade right probably earlier now right like tackle football right we got the pads on we got the helmets on we're looking like the NFL team, right, and we're running like the basic plays, the blocking and tackling, it's the X's and O's, it's the basics. And then you go, well, what in the hell is the difference between a sixth grade football team and a professional football team? They're running.
00:06:15.480 --> 00:06:24.139
I mean, that you could literally have Pee Wee football running a play that they saw on Sunday, right, from the professionals, or trying to at least, right?
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It's blocking and tackling. The difference is is how well they execute and how how much they prioritize the fundamentals.
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Because you look at any lineman on a professional team, their footwork is impeccable. They know where they're stepping.
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They know where they're looking.
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They look where they're moving the the next guy, and it's no different than the young guy who's doing it, and I'm making this whole association with cost codes because it seems so simple. But we're talking to these builders, like I, I told the story on the last episode that I just did, so it might be a little repetitive for builders, but it was so impactful. $20 million a year builder, one of our clients, love them to death, no slight to them. It highlights the fact that these $20 million, 30 million, 50 million, 100 million dollar companies struggle with the same thing and prioritizing and emphasizing the process around knowing your cost is the difference in scaling your business. That's it. You're gonna be sitting here saying,"I've got my cost codes and my project management software. I got my cost codes in QuickBooks.
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They might be different, and this is how a field does it, and this is how accounting does it, and this is blah blah blah. It's like that's a part of the problem. Start to bring it in, get everyone on the same page.
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Everyone has the same codes.
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Everyone's using the same codes.
00:07:29.839 --> 00:07:35.839
We're speaking the same language. We're using them consistently to paint the picture. End of rant. What's your take?
00:07:36.980 --> 00:08:37.549
Yeah, I I I would say on that, a lot of a lot of builders have to get to 20 million, 30 million, or whatever because they don't know the data. They they often times companies when they get a few things right, they whatever that is the the marketing, the product, the houses that they're building, the reputation, all it that's all great. You need all of that stuff. That's typically what it is. Yeah, and then they. What I say is they blow through their sweet spot instead of gliding through it just slowly and realizing, oh wait a minute, we can if we did $12 million at a solid eight to 10% net profit, then we don't need to chase $20 million at 5% It's actually more profit, and there's a lot less headaches and a ton less risk.
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But because of whatever the good things that are happening in their business force them to grow, and that's why I hear all the time. Oh well, I want to scale, and I always ask, why do you want to scale? Oh, what?
00:08:48.340 --> 00:08:58.720
Because I think it's like a buzz. People think that I'm like, what about growth? And you can grow the top line, but the bottom line is all that matters.
00:08:55.299 --> 00:09:23.809
Let's grow the bottom line first. You might find that you need fewer people, less you use less resources to make more money, dollar wise, or you know, or percentage wise. Either way, and then and then once you realize, like, oh, this is now very repeatable, then you then it's like now we're just what what makes this repeatable?
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Systems support people. Now we just start plugging units into our business. Oh, we have the opportunity to do 20 million.
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We're at 12 now. That requires four more units. You know, and I'm not talking about whatever those units are internally. Oh, we're going to need another. You know, like the way that it breaks down is like, oh, in order to go from here to there, I need 1.5 more project managers on a unit base. Great, that's what the data says. Guess what?
00:09:51.370 --> 00:10:35.509
You probably can't hire 1.5 project managers if you if you only hire one, everybody. Going to be overworked. The math and data says you need 1.5. The real world says I can't hire half a person. So guess what? I got to hire two. If I do two, then I can't go to 20 million. I got to do 24 million. But that would be my sweet spot or whatever. And if we can't get there or whatever, I hired two. You know, this sounds. I hired two. We're not quite there. I got to get rid of the one so we can get back down to 13 million. With the, you know, it's just let the the you guys say it all the time, and the numbers and the data say it. It tells the story of the business.
00:10:35.870 --> 00:10:44.620
100% When you open up the story of your business, if we're just looking at the data, I want to.
00:10:40.399 --> 00:10:54.129
The way I look at it, chapter one, here's my product. This is what we sell. Chapter two, here's how we sell this thing.
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Chapter three, here's the margins of the thing that we sell and how we sell it. Like that's that's it. I will keep adding more chapters to the book as long as it comes in, you know, those three pieces of information.
00:11:06.809 --> 00:11:36.320
As long as the margin follows, as well, I always say you have to test some things out. So I always, I always tell business owners if I were to like going into a restaurant, and I always use this example: go into the, you know, nicest steak restaurant in your in your town, they're going to have a very limited menu because they're known for that thing. They're going to have some side dishes and they're going to sell you a fancy bottle of wine, all that kind of stuff. But that same sort of thing, if I was to go into a to a builder's business, say, okay, what's on your menu?
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There should be three things. I say the money making, like this is the thing we know we make money at the expert creating.
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This is the reason people call us over. Like we're known as experts in something, and usually the expert thing ends up becoming the, as I say, the boring money making thing. We can do this thing all day long, and we know how to make money at it. But that third thing I call this is like the appetizer on the menu. It's always eliminating, meaning let's test this thing out. Oh, let's do the bacon wrapped shrimp avocado toast appetizer because we think it we might be able to make money, but it's an appetizer.
00:12:16.980 --> 00:13:00.629
Let's test it out. Let's track it, and if we say, how can we turn the appetizer, the always eliminating, into a money making or expert creating thing? If we can't, in a certain number, get it off the menu, put something else on there, and it's kind of like what I said before. I don't want to send my guys out and pull them off the crew for what I'm paying, you know, or what I think someone will charge. If someone will buy their whole day at $1,000, I don't have to estimate anything. I can send them an invoice, or they'll even prepay. Man, that would be pretty cool. That's an expert creating thing, right? Oh, when I realized I can send three guys out a week, pull them off a job to go rehang someone's door. I don't know whatever it was.
00:12:57.279 --> 00:13:16.799
That's an extra three grand a week, and it cost me 200 bucks, like all day. Okay, now we have another product on our menu. You can get a 16 ounce steak. You can get a very expensive bottle of wine, and you can also buy a carpenter for a day at $1,000.
00:13:12.690 --> 00:13:20.490
Most people aren't. That's okay because when you do, we're gonna make a ton of money at it.
00:13:20.519 --> 00:13:37.580
Totally, totally. Well, and I think like that that that exploration is what keeps business fun, right? Like that's what keeps it like ever evolving. But it goes back to like knowing what you're gonna make money on, know what makes you the expert, and it just it boils down to know what scales.
00:13:37.669 --> 00:13:40.940
Like before you're scaling anything, know your numbers.
00:13:41.179 --> 00:14:05.309
Know that you're at least going to make money on it. And to your point, it's like they they'll get to a 20 million on like a bread and butter from a product delivery standpoint, but they never quite understand that they're losing money or the business that they've built is completely dependent on the next project coming in, and it's just this like dripping cash flow problem in the business, and as soon as the spigots off, they're done.
00:14:05.940 --> 00:14:31.370
The problem I see with the again, no offense to the 20, 3040, maybe $40 million businesses out there is that it provides a very good living for the owner. Like a $20 million dollar client. When I worked with him, he was about 6 million, right place, right time, and he's a freaking awesome builder in Nashville.
00:14:27.950 --> 00:15:01.889
Great market to be. Again, this was 10 years ago, and and last time I saw him, he was at 20 25 million. I was like, all right, man, you know what are you paying yourself? You know, he's like, oh, I'm I'm you know, got pulling 350,000, you know, dollars, and we have whatever in profit or whatever, and I just ran the numbers, and I'm like, and the thing is, don't be$350,000 as a salary plus some, some dividends, you know, from from the profit or whatever, but I'm like, it's like a half a mil. Ah, to $600,000 a year.
00:15:02.309 --> 00:15:10.679
Trust, I'm. I'll take that money, but you divide that by 20 million reasons why you're at risk.
00:15:11.460 --> 00:15:12.809
Dude, not worth it.
00:15:13.049 --> 00:15:15.360
Pulling in 2 million a year.
00:15:16.049 --> 00:15:23.119
Yes, like you're. You got. Don't get me wrong. You got a $600,000 lifestyle, and life is great, and things are taken care of.
00:15:23.208 --> 00:15:57.938
I'm just saying that's lopsided from a risk and a percentage standpoint. If there's 20 million reasons why someone could sue me and ruin everything, I want to make sure I'm getting you know a good return on all of that risk. But that's the problem with growth too, especially contractors that have some pretty good, like they they do a good job. They're making quote unquote good money because they're well taken care of. But from a purely mathematical business standpoint, the risk is so lopsided.
00:15:59.139 --> 00:16:34.370
Totally, totally. I mean, you start to sit there and you're like, just I could I could reduce my risk and just dump money into the S and P and get a 10% return. It's like if I'm not if I'm not at least hauling in a 10% on the 20 million, like what am I doing? Where like what are some of the biggest like low hanging opportunities? Aside, we kind of talked about it from like a job description thing. Is like we can talk about all the processes and systems, but you don't have job descriptions. It doesn't matter. What are some of the other areas that like builders could see just like immediately listening to this podcast or hearing from you that they could be like focusing on?
00:16:34.970 --> 00:17:06.150
Yeah. So what I always do with new customers when we're talking about working together with new clients is to talk through a handful of categories, and I'll have them rate themselves on a one to a three. So one would be this is a disaster, like we don't have this under control at all. Two is like it's okay, it could be better, and three means we've got this. We don't need to worry about this. This is going well. And so the things I'll ask them about are accounting. Do you feel like you know where your money is coming from and going to? Are you making money?
00:17:06.690 --> 00:17:18.990
Are you able to track your expenses? Do you have reports that are meaningful to you? So that's the first category. The second category would be your people. Do you feel like you have the right people in place?
00:17:16.980 --> 00:17:28.490
Are they clear on what they're supposed to be doing? Is it written down? Do you have a good cadence for giving them feedback? The third thing that I would ask them about is quality.
00:17:26.180 --> 00:17:39.440
How do you feel about the quality of your product? Do you feel confident that you're putting out a quality product that your customers are happy with? Do you trust that the right things are happening in the field? The third thing that I ask them about are schedules.
00:17:40.190 --> 00:17:47.079
Do you feel like you can trust that things are going to happen on time? The what number are we on now? I don't remember what number. This has been third. This is fourth.
00:17:47.680 --> 00:17:50.410
Okay, great. So we've got accounting, people, scheduling.
00:17:51.730 --> 00:17:52.960
Oh, quality was the other one.
00:17:53.140 --> 00:17:53.410
Quality.
00:17:53.980 --> 00:17:56.440
Yeah. So then the next one.
00:17:53.980 --> 00:18:28.640
Let's just throw the numbers out the window. The next one would be customer satisfaction. Are your customers happy? Do they recommend you? Do they come back to you again? And then I think maybe my last one would be like mission and purpose. Do you feel like you have a good story for why you do what you do? Are your people clear on why you do what you do? Are you able to create good branding messaging around that? Are you all clear on where you're headed and why you're headed there? So I look for the ones and the twos, and if people or accounting are a one, or even really a two, we're gonna start there.
00:18:29.269 --> 00:18:38.539
Yeah, because before we do any of this other stuff, we need to know: Are you making money? Is your money safe? Is anyone stealing from you? Are you losing money in places you don't understand?
00:18:38.900 --> 00:18:41.920
Are you? Can you even tell if you're profitable or not, right?
00:18:41.980 --> 00:18:53.559
If you need to take out a loan, can you pull together the right documentation? Like money, let's figure that out. And then the next one is people. Do you trust your people? Are they clear on what they need to be doing? Are they mostly doing it?
00:18:53.680 --> 00:18:53.740
Yeah.
00:18:54.430 --> 00:19:08.430
If those two things are off, I don't care about your punch list checklist. Yeah. We don't need to be doing that. We don't need a pre-con checklist. We don't need any of that stuff. We need to know if you're making money, and we need to know if you've got the right people, and then from there we can talk about other low-hanging fruit.
00:19:09.210 --> 00:19:35.839
Totally, and that's that's like effectively what you're doing is you're just like stripping everything away, all the noise, all the confusion away, and you're getting it down to an expectation and a very easy to follow process, and then from there to your point, that's where like once the foundation is set, then you can start going crazy, and that's where I do. I hear like even all these builders, and again, I might be biased, but I hear I'm like, well, we need project management software, we need this, we need that. I'm like, how many projects are you running?
00:19:34.490 --> 00:19:50.140
They're like, we're doing like three or four. It's like, how many project managers do you have? Like I have like one or two, and then like I'll manage other ones on my own. It's like, okay, well, like, are you confident that you're walking out with like a net eight to 12% on these projects? And they're like, that'd be great, but no.
00:19:50.740 --> 00:20:10.140
It's like, well, what are we trying to do to scale all these like further complexes and throwing on volume when like the opportunity is here today to iron out. What the process is to accomplish building this product to sell it at this margin, right? And it's like that's effectively what you're doing with the sales team, right? It's like you're stripping it away.
00:20:10.259 --> 00:20:19.500
Like, what are the basics? Like, here's the blocking and tackling. What does it take for me to get more contracts? I need to know how many calls am I doing? What are the outputs, and then what are the out or the inputs? What are the outcomes, right?
00:20:20.640 --> 00:20:36.440
And you just touch on such an important point that I think people miss all the time. If you're not making money, scaling will not fix it. All you're going to do is you're going to have more volume of not making money. Like you, if you can't make money on one project, two project, three projects, you're not going to make money on 50.
00:20:33.559 --> 00:20:40.849
So like you have to figure out how to be profitable at a small scale before you blow it up.
00:20:40.880 --> 00:20:43.390
It's just going to get worse. It just magnifies the chaos.
00:20:44.529 --> 00:20:51.519
It's it's like what every not every a lot of builders you mentioned hot markets and like frankly it sounds like we're like coming out of a hot market.
00:20:51.910 --> 00:20:56.380
Oh God, Austin Austin has been a disaster since like 2022 maybe.
00:20:56.980 --> 00:21:04.859
Yeah, yeah. Well, Austin is like its own little like real estate ecosystem use case or case study. Yeah, we've been out of a hot market for a while.
00:21:06.210 --> 00:23:58.089
Yeah, yeah, yeah, yeah. But the point being is, like, all these guys like they would run out and they'd be like, "Holy shit! Like, money's free and people are blowing like crazy and inventory is non-existent. Like, we got to fill the gap. And then it was like they would go out and they would do a 200x business and they would just scale it like crazy. And then it's like they look at their balance or at their at their statements at the end of the year, and they'd be like, "I'm not making any money, any more money than I was at a quarter of the volume. I'm going to go back. I was like, "It's not that's not something for you as a as a as a career entrepreneur to take a step back and say,'I'm never going to do that again. Is to look back and say,"What could I have done differently? The biggest role in any construction company, the biggest role, the most critical role, is hiring that person that can keep you out of the field, or promoting that person in your company to a position to keep you out of the field. Why? Because that time that most owners are spending in the field can be 2030, 4050, hours a week, and then as soon as they're out of the field, all the other activities necessary to build up like a $30 million year juggernaut is actually quite adaptable, and what I mean by adaptable is like if you realize, okay, like I just hired, you know, this person to keep he or she to keep me out of operations. Now I have 30 hours a week where I can focus on marketing and sales, and then managing the person who's running my financial controls and running ops, but I have 30 hours a week to focus on marketing and sales. You can leverage 30 hours a week in very powerful way, just doing marketing and sales. Like one person can be very effective in those in those areas. Another thing I'll say though, the management of operations and the management of financial controls must be done with simple, clear systems. In today's age of AI, you can go download hundreds of documents and SOPs that are just going to confuse your team. So one of the things that we stress is the 8020 rule. When people come into our our system, they just get simple, clear procedures and accountability systems that have been stress tested against super high performing companies that have already done this. We're not here to show everyone how smart we are and give them boatloads of information that we got off Chat GPT. Just simple, clear, concise systems that have already worked dozens of times with great companies, hundreds of times actually. If you want to count, yeah. Okay, so that that's really important. If you're going to train people, make sure you're you have systems that are putting up strong boundaries around how they're managing their day to day activities.
00:23:58.779 --> 00:24:13.589
Yes, and the reason I wanted to ask you the why is because that's tying back into your comment earlier about the carpenter starts a business, bags on as we call it, right?
00:24:13.680 --> 00:24:20.549
They're performing the work, they're doing the thing, and then it's a out of bed next morning, business hat on, right?
00:24:20.609 --> 00:24:25.910
I'm getting the. I'm developing the business skills. I'm developing the finance acumen.
00:24:23.210 --> 00:24:59.950
I'm developing the marketing, the sales acumen, the brand acumen, the process acumen, the the management acumen. All of those things. That is what business skill means, and that's why you need to open up more of your time. So then you can now say, okay, I know how to do the skill. I know how to install the cabinets. I know how to do the trim. I know how to do the tile, the plumbing, the this, the that, the other. That's all stuff that I can get a team doing. And now I pull my time over and I look at my return on time from building my business skills. Yeah, fair.
00:25:00.690 --> 00:25:02.279
Yep, yep.
00:25:03.059 --> 00:25:04.079
It's a full circle moment.
00:25:04.349 --> 00:25:21.319
That's exactly. And as soon as you get yourself out of operations, it's a clear shot up to level five self-managed company. Yeah. First level, chucking the truck. Second level, you're you're wearing all the hats. Most businesses never get through that level. By the way, nothing wrong with that.
00:25:21.380 --> 00:26:16.440
Most businesses never punch through. That's where the owners managing finance, marketing, sales, ops. Third level, though, is where the owners only managing sales, sales and marketing. Fourth level is where the owner has a leadership team running sales, marketing, operations, and finance. And the fifth level is where the owner has a general manager managing the leadership team, and that's a true self-managed company. And at that point, at that point, that's when the companies really take off because it's usually about that. It's usually at that level where they're rolling out like a little bit of equity ownership to their leadership team and their general manager, and then those people are all incentivized themselves to continue growing the organization beyond its current state. If it's doing 20 million a year, you'll see it'll jump to 30 million, and then they'll start talking about different revenue streams, et cetera, maybe operating in a different area.
00:26:17.490 --> 00:26:31.789
Yep, because they're all motivated to continue growing the organization beyond your capabilities, and frankly, they're going to be better at their job than you at that point because all they focus on is operations, or all they focus on is financial controls, which is great. And that's one of the
00:26:31.819 --> 00:27:15.029
is they're able to train people under them to execute at a higher level than they can. Love it, love it, and that's I think that's like the dream, right? Like you can just like the like the people that are listening are like, God, like how do I do that? Why do people and we this might be redundant, but why is it level two that always is like the biggest roadblock, the biggest hurdle? It's the tidy piece. They just can't. I think I might be wrong, but I mean, I think it's the identity piece. Guys just can't. They they just they just can't get themselves out of being a foreman that manages a job site.
00:27:11.339 --> 00:27:16.259
Yeah, they have to get themselves out of operations.
00:27:17.009 --> 00:27:44.319
I think the conversation is good from a self awareness standpoint because I think like you need to have like takeaways in a podcast and like people push structure, which I could probably get better at, but I'm just like so off the cuff. I think when you're when you're thinking about the guys that can't get out of the way of being a format, do you think that it's because like that's where they've seen the most success and that's where they like internally place the most value on themselves, like it's a comfort thing, right?
00:27:44.859 --> 00:28:03.779
100% yeah. One of the things that we always tell people is set up good anti goals for yourself. There's one thing to tell because okay, because what can happen is we tell these people to go build these companies, build wealth, build self managed companies, yeah, grow to 30 million, and we're gonna show you the path to get there.
00:28:04.410 --> 00:28:17.279
Yeah, they go like they get all excited about building wealth, but the other thing that we say is, "Hey, look, wealth is gonna come. It's there's no mysterious force out there keeping you from doing this. It's a foregone conclusion. Just follow the process. You're gonna get there.
00:28:14.730 --> 00:28:31.369
While you're doing that, though, set up anti goals for yourself, and what those are is negative outcomes that you want to avoid in pursuit of your financial goals and your business goals.
00:28:25.190 --> 00:28:54.220
Okay, yeah, say, hey, look, I am not going to build my company if it means that I can't take my wife on a date once a week. I'm not going to build my company if it means that I can't be home to have dinner with my children, or that I can't drive my kids to school three times a week, or I'm not going to be able to work out, or you know go to wing nights with my with my buddies once a week, or whatever it is.
00:28:54.220 --> 00:29:07.589
The things that give you fulfillment and happiness starts with family and and looking after yourself. By the way, you are not going to sacrifice those things in pursuit of your goals. The business is there to support your fulfillment, happiness, and your quality of life.
00:29:09.539 --> 00:29:11.279
Totally, super important, man.
00:29:11.339 --> 00:29:30.650
Dude, the anti-goal-that's great. And I think that even too is like when you think about this, just again to map it back into the conversation. It's like, like again, you're you're the you're the smaller you're the business guy, and this is like to your point. You, someone could listen to this podcast, and they'd be like, "I'm going to go out and I'm going to I'm going to talk to Paul. I'm going to build this huge company. I'm going to do all this stuff. But it's like, where do I start?
00:29:30.740 --> 00:29:35.509
It's like, well, maybe you start by like defining what do you want your company to look like.
00:29:33.259 --> 00:29:36.230
What do you want your company to provide for you?
00:29:36.829 --> 00:30:05.519
Yeah, and it's like it's dude. I don't think it needs to be any rocket science, but I also think people can lose sight of what they want the company to be in the day to day. Right? It's like I've got the project, I've got the job. I need to finish the job. I've got the next job coming up. Like I need to get prepped for that job. And I think just with all the busyness. You can lose sight on the anti goals, right? And it just slowly starts to creep in.
00:30:06.390 --> 00:30:33.589
It's been an interesting path, and there's been so much self discovery throughout this. And I've just realized that like there's so many people in my position that are just killing themselves to try and make $1, and they're not getting paid for their time off. They're not getting paid for retirement, and they're like all my customers get paid for every hour they work. Why am I working for them and not doing that?
00:30:33.769 --> 00:30:35.059
Totally, totally.
00:30:35.869 --> 00:30:57.940
So it it it has been it's been an interesting journey the past couple years, and a lot of self discovery and just analysis and inventorying myself and my business, and then as as I come across those findings, just sharing it with other people, and I think I think it's been super helpful for myself, and I hope helpful for other people.
00:30:59.529 --> 00:32:13.980
Dude, I I think the self awareness is huge, and I would say that's one thing. Like after kind of hearing your story, is like you're a pretty self aware guy, and it sounds like you have been for a while. Like you've known what you wanted to do and what you haven't wanted to do, and you've stayed very true to it. That's not to say that you didn't get burned, because you certainly did, and you certainly like ran in the wrong direction for quite a while, but now you're just like, dude, this is the way that it's done. This is the way that I'm doing it, and I think that there's a greater population that should feel supported in doing it. So I applaud you, dude. It comes down to being confident in yourself and in your business, and I don't think I think I was trying to convince people for a really long time that my model made sense, and I was trying to convince my clients that it made sense. And the more that I've inventoried myself, and that that that self awareness, that self discovery has enlightened me to what actually works and what doesn't work, and understanding my numbers and understanding my business, and that has created a lot of confidence with me. Where it's like, you don't have to hire me; you can absolutely hire somebody else. This is what I do well.
00:32:14.160 --> 00:32:46.720
This is what I don't do well, and I'm not trying to compete really with anyone. I'm not trying to compete with bigger companies. Like this is what I offer. This is how I can serve you. And if if I can't meet your needs, then you probably should go with somebody else. And I think that that has been critical for my success from a business perspective, a life perspective, podcast perspective, all of those things. Like I'm not going to please everyone. What I do may not be right for you, but I can share that with you, and I can share my experience with you.
00:32:47.259 --> 00:32:48.130
Yeah, totally.
00:32:48.309 --> 00:33:00.130
I try and keep things as simple as possible. I just I've realized that life is very short, business is very you know your clients can be very fickle.
00:32:55.240 --> 00:33:04.079
I put I put my clients before my own health before my own family.
00:33:00.400 --> 00:33:10.589
I put serving people and making people happy above all else in my life for so long that I'm just at the point where I'm like, I'm not doing that anymore.
00:33:10.950 --> 00:33:57.940
Yeah, yeah. When I was honest with myself and I looked myself in the mirror and said, "This isn't working. How could I make a change? And when I started doing that, it just it did. It opened up the doors for a lot of opportunity, and it's been it's been so much more enjoyable and less stressful. I have a better a better business now, a better life. I'm a better father, better better husband. It just there's a lot of things that it has fixed or enhanced that when things weren't working, like life was really stressful and and really chaotic and really challenging. And there were a lot of days where I'm like, I don't want to be in this business anymore. It just doesn't make sense. And it's not like that anymore. Sure, I have my days where it's like this sucks. I don't want to be doing this. This is a pain in the ass.
00:33:55.690 --> 00:33:58.990
But like at the end of the day, I'm getting paid for it.
00:33:59.470 --> 00:34:01.200
Yeah, so I can't complain.
00:34:01.650 --> 00:34:13.530
It works. It's worth it. You you found a way to make it worth it, and it sounds like to like regain the appreciation and the excitement to what it is. Yeah.
00:34:10.829 --> 00:34:52.090
Again, going back to your self awareness, like you knew what you wanted to do. You wanted to deliver a quality product. You were you were like you've got like this like almost like midwestern like perspective of just like I'm just gonna work my ass off and I'll get paid what I get paid, yeah, yeah. But it that to me was like this the selling point, right? That yeah that was what I always wanted, and I thought that's where I could I could provide value, but I realized that there there's a lot of opportunities to provide value elsewhere. Where, yeah, I'm still going to get paid my rate, but I can create a lot of value for you in that rate. Yeah, and I'm not going to concede my time.
