“Jim hates his life within six months because he's waking up at one in the morning to go make ice cream for people he doesn't even really like!”
Welcome to another episode of Builder Nuggets, the show where builders and remodelers discover how to build thriving businesses while working less. I'm Duane Johns and together with Dave Young, we share the elements of success that have helped hundreds of contractors like you build better lives. [00:23.5]
Duane: Today's guest is a business coach, author and fellow podcaster. He's an expert in helping contractors find purpose. So they are not constantly consumed with putting out fires or wearing too many hats.
Dave: This expert is going to get you out of the weeds and focused on the elements of you need to escape the chaos you may have created for yourself.
Duane: Today, we welcome Scott Beebe, owner of Business on Purpose from beautiful Bluffton, South Carolina. Dave, you and I had the pleasure of getting to know Scott during an event we hosted earlier this year in Clemson, South Carolina.
Dave: Yeah, we sure did. Scott was our keynote speaker at our hundred leaders in construction conference earlier this year. And in our post show, follow up with cited as one of the favorite parts of the conference. So thanks again for your role in that Scott and welcome to the show.
Scott: Guys, thanks for having me. This is a lot of work to put on a podcast. So I want to tell you guys publicly thank you for sharing the platform and offering this for people. It's a lot of work, but it's a lot of value. So thank you. [01:24.2]
Dave: It is a lot of work and a lot of value. And speaking of that, you have been bringing value to your coaching clients for many years. One of the things that we had in common when we first met was the Chaos Theory. You know, we got digging more into that Duane and I teach a lot that you cannot scale chaos. And for that matter, you cannot sell chaos either. So we're, we're really interested and we know that our audience and our community will be interested in hearing about the chaos that you have seen and experienced and what you're doing about it.
Scott: Yeah it’s interesting. I've not thought about it. You cannot sell chaos. I would say this; you cannot sell chaos and get repeat customers. We're living in a time right now at the time of this recording, where chaos is actually doing very well for itself. It's selling very well in the open marketplace, particularly among the news, but not in business because I don't want to buy things that are naturally chaotic because chaos is the bias of life and I'm not looking to add to that bias. [02:27.7]
And so that's why we're so adamantly up kind of not opposed to chaos, you're not going to eradicate chaos. Chaos is all just like weeds, they're just there. The question is, are you going to put yourself in kind of a landscape mindset to think I'm going to, I'm going to eradicate the weeds from this area, even though those weeds will always be available if I ever take my hand off of the regular and ongoing maintenance of this particular area. So we take that and adopt that mindset into what we're doing with heroic business owners of any trade of any industry. And within that we look and where we normally find these heroes are in a place of kind of their own kryptonite to follow the Superman metaphor and they're in this kryptonite. Well, part of their kryptonite is all the detail of the business. They love the product, you know, somebody said, Hey, you know, Jim, you're, you make incredible ice cream, you ought to open your own ice cream place. Jim's like, Oh my gosh, I hate my job. I hate my boss. Yeah, I should open my own ice cream place. And so Jim goes and opens his own ice cream place. And in classic Michael Gerber E-Myth form, Jim hates his life within six months because he's waking up at one in the morning to go make ice cream for people he doesn't even really like. [03:38.4]
Dave: Yeah.
Scott: And so all of a sudden his hobby turned into a job with, again, a bossy hates, the boss just happens to be himself. And so we want to come in and walk alongside business owners and go, Hey, we have got a very prescriptive roadmap. We are not situational consultants. Those are very good by the way; situational consultants absolutely have a place in professional business. It's just not what we do. We are a very prescriptive kind of roadmap based coaches. And so we're much more interested in principles, foundational things that have not changed over literally thousands of years, and then kicking your rear end to make sure that you get those things embedded. So you actually enjoy your business rather than being susceptible to the chaos of it.
Dave: What are some of the chaotic things that seem to be embedded in contracting businesses today? [04:24.0]
Scott: Can I just start with one role? I mean, let's just take the project management role. Just that role carries with it, a laundry list of tasks and expectations from any owner of what that project management role should look like. So take a contractor that’s just getting started out. Wow, you're really good at construction. You're really good at contracting. You ought to open your own company and that person goes, Oh my gosh, I should. Well, not only are they the project manager, which in and of itself, that one role is huge. They're also the accountant, the bookkeeper, they're the marketing coordinator. They're the sales, the estimator, et cetera, all those things. So what happens is when you got this person, that's doing all of these separate roles, because as an owner, you're not just doing the project management and you start out, but you're also doing those other roles as well. It adds all of the complexity, the minute details of all these things. When you put it together, you become like that airplane in 1935, that Boeing had put out called the flying four trips. And it was on display at right airfield, 1935. And it was gonna be the largest aviation military contract in the history of aviation at that point. And what ended up happening was the plane took off 300 feet in the air and it crashed. The newspapers came out and finally said, it's too much plane for one person to fly. [05:38.5]
And that's what business ownership is. A lot of times it's too much plane for one person to fly, but we're scared. We're scared of not enough cash flow, not enough this, I don't trust somebody. So the epic words that will end a business are this, ‘it's just easier to do it myself, it's just quicker to do it myself.’ That is cancer to a business. But the reality is running a business is too much plane for one person to fly. So we've got to have other people kind of joining us, not so they can join in the chaos, but so they can operate the systems and the processes within the business. So we can keep the chaos at Bay and keep our protected area and run the business. [06:16.1]
Duane: You cannot just default to I'll just do it myself. That's so huge.
Dave: You know, when Duane and I teach builders, how to create a more rewarding and more valuable business, we're teaching that from day one, to think about the business as an asset.
Scott: Right.
Dave: When you think about selling that asset, if that asset is based on chaos, it doesn't have any value. Build your business as an asset from day one and chaos is not a selling feature. So it's a, it's an actual detractor. So by avoiding it, you naturally increase the value of your business. You increase the number of people who will be interested in it, and the likelihood that it will thrive beyond you.
Duane: One of the things you say a lot is liberating. It’s from the chaos of working in the business. What kinds of things liberate you from working in the business? [07:10.0]
Scott: We assume that this liberation of this freedom happens when kind of luck all hits at the same time. It's like as business owners, we charge in with our fingers crossed with just like hoping and hoping, hoping that my business works really, really well. And the reality is a lot of business is physics. There's a question that Guy Ross asked on his world renowned podcast, how I built this. And I hate the question. Every time he asks the question, it makes me cringe. And he'll ask the question of the entrepreneur. Do you think your success was a function of your own skill or do you think it was luck? I so badly want to be able to answer that question for him. What we have seen just up close and personal is when you're talking about the principles of business, again, not the strategies. The strategy is something like Facebook marketing. That strategy works today, but it may not work tomorrow, or it will not work tomorrow. You know, in a hundred years, we'll have something else at that point. But principle-based things like vision, mission, values, organizational structure, delegation, those are principle-based things that will allow business to be able to thrive in liberate itself. The strategy might liberate you for a moment. The principles will set up the stage for liberation for a long period of time. [08:21.3]
And so some of those things that we've got to make sure there's two right out of the gate that usually catch people off guard. Number one, if asked Scott, what are the, what are the most important things that I need to do in order to build my business? The majority of people are going to run the marketing product development, whatever vision vision you have got to write your vision down. And there's an age old promise. Write the vision down so that those who read it may run, write the vision down so that those who read it may run. It is a guarantee that if you write your vision down and you share that vision, people will run, they may not run towards you. They may run away from you may not like the vision. And that's good. That's a healthy progress either way is they run towards you or away from you. Number one is vision story. The second most important thing is not profitability. It's not sound organizational structure as important that is. It's not the latest technique in trim development or whatever. The second most important thing are consistent, agenda driven leader led team meetings. I said it, I know it's like a cuss word, but team meetings, well-run team meetings are the second most important thing and I'll prove it to you. [09:30.0]
You've got a, a brick and mortar business and a hurricane comes through and mows it down, destroys it as just happened in Southwest Louisiana to some. There are so many things in that store that are, that are, they are vulnerable to chaos. They are consumptive and consumables to chaos. Meaning chaos comes in, they eat them up and they're valueless at this point. But there are two things that if any business has after a hurricane comes and mows it down, that I would look at that business and say, we're going to make it. We're going to make it. Even if you're, you've got your upside down in debt and all these things; you're going to make it. Number one is a vision of where you want to go. If you've got a vision of where you want to go, then we've got clarity on that direction. We're not wasting our time looking at all this other stuff. That's number one. The second is a means of communication. If all communications wiped out, you're in the middle of nowhere; it's going to be a hard, hard job to try to get back to somewhere. But if you've got a means of communication with somebody, all of a sudden, there's a connectedness there. And there's the efficiency that comes in at the same time. The two most important tools that a business owner can implement day one, an articulated vision, a picture, a snapshot of the destination, where they want to go and a means of communication. That's agenda driven, leader led and incredibly predictable. [10:45.3]
Duane: One of the things that I find is, and I see it over and over again is when, when there's no vision and when there's no communication, this black hole just forms and then the information that gets disseminated by the people that don't know what's going on is almost always going to be negative.
Dave: Yeah.
Scott: Chaos, chaos breeds it, it germinates in where there's a void of vision and communication. It's like humid Southeast, South Carolina weather, and you just got stuff growing everywhere and you just want to chop, you want to burn it all.
Dave: Speculation is the mother of chaos.
Scott: Yeah, absolutely.
Dave: So you've developed a roadmap in your, My Business on Purpose model. Can you walk us through that? [11:34.5]
Scott: The first thing we start with, obviously, as a foundation, we actually need to understand how a business is meant to be built. Most people assume that a business is the interior design, the light fixtures, the tables, the chairs, the paint color, all that. That is so secondary to the healthy function of a business. Give me a with solid foundational footings, foundational concrete slab, well studied two by fours on I'm not a builder, but on 16 or 18 inch widths or whatever it is that you guys do. And give me sound structure and then I don't care what you paint the walls. You can paint the walls, blue or red or white. I don't care what you paint them, but we've got to work on the foundational element first. So that's where we start is actually what we call our step Zero, is understanding how business is constructed. And then kind of in our step one, that's where we call fast, start to profit. It could also be called stabilize the patient. Cause a lot of times we'll take a business and once we get in here and start to talk, they're like, man, I'm just, I’m… things aren't going well and I need help. And so they'll say it and we'll go, great. Thank you for admitting it because we can work a lot faster if you'll just kind of let us walk you through this. And so that's why we have two rules. [12:41.5]
Number one, you have to do everything we ask you to do. And number two, you have to have more money coming in than is going out. Because if you don't have that, it's really hard for us to help you with that. And so we call it the fast, start to profit. That's where we build out that articulated vision story, build out those team meetings, build out your multiple subdivided bank accounts, these foundational things. We just need to get you a right side up. And some people will go, I am right side up. Yeaaah…maybe. That bottom line on your net income statement might be black, but when I look at your bank account, there's no cash that you could take out. There's cash for cash flow, I get that; but that's different than cash you can actually take out in and do something with. And so we've got to kind of get all that set before we move on. [13:21.3]
Then once we go into our second stage, that's where we start to really invest in people, structurally for the business. So we walk through things like our core values, our job roles laying, all those sorts of things down. And then also our dashboards. Every business has got to have tracking and metric dashboards that you're looking back, bare metrically in the business, just to see where it's trending. And so we start to focus on people's structure in step two, and then in step three, that's where we start to focus on the people and process. So we want each of our people to be empowered with the systems and the processes to be able to live those out. So the owner can step back and work on the business, famous Michael Gerber wards, right, ‘Work on it, not in it.’ And so in order to do that, we've got to empower people to be able to work on it instead of just abdicating responsibility. And so there's a huge tool we'll use called a delegation roadmap, which allows the owner to go through and lay out every single task that they do rank it by the amount of time, the amount of energy it gives you an, the amount of money that is being spent by the owner doing that thing. I mean, you do realize that when you go make a one hour bank run, it costs the business $200 for the owner to go make a one hour bank run. [14:30.3]
Dave: What is it that makes it so tough for them to delegate things? We see it time and time again, Duane and I in our teaching and coaching. Owners who should be working on $1,000 dollars an hour or $10,000 an hour tasks are constantly getting pulled back in. Why do you think that is?
Scott: Let me give a caveat because I risk being offensive to our builder friends.
Dave: Ha ha ha.
Scott: Let me, let me just say that first.
Duane: This is the builder nuggets podcast.
Dave: You're allowed to challenge here.
Duane: We can.
Dave: Yeah.
Duane: We challenge everything. [15:01.6]
Scott: I think there's two reasons. I think one, some builders just love it. Like they are literally addicted to the chaos and quite frankly, to the ego strokes of showing up on a job and Boston subcontractors around and making them do what they say. I mean just, if we're going to be honest about that, I think that's just reality. But I think there's a larger issue at play. The larger issue is I think sometimes there's just an ego play. I want to do it all myself. I want to do it all myself. And if that's what it is, that's what it is. That's okay. That's the kind of business that you want. There's nothing wrong with that. Just don't get frustrated when you don't go home and see your kids at night.
Dave: You can also build a craftsman style business around that. It's just going to be very difficult to scale it.
Scott: Well, I would.
Dave: There is, there can be a place for the builder who does want to do it all or to touch it all or to be very involved because it's their true passion, but there's going to be limitations with that as well. [15:59.8]
Scott: Well I would even say that it's not necessarily a business, it's more, you know, we live kind of in a gig economy right now. So I would call that gigging. They go from gig to gig.
Dave: Hmm…hmm.
Scott: And again, that's not a derogatory statement. It's very true is they are project based builders and they have a kind of a gig thing and they really don't have anything to sell. But if you don't want anything to sell, that's okay. Like there is great space in this world for craftspeople. Then there's another kind of a third group of people and Dave & Duane, that's just that's builders who just don't know, they just don't know. They got into construction because they, man, they love construction. But when it comes to running a business of construction, they just, they don't know the principles. They don't know the foundations and they just need to somebody to walk them through and guide them through. And when they had that humility to go, I don't know, man, I'd love to have some help in the same way that the three of us did when we started sports, you know, and we're 8 or 10 or 12. And we listened to that coach go, Hey, you know, you're, you're tackling like you're, you're swinging a golf club. That's not how you tackle a kid on football, right. Let’s do something different. Let's change that up and go, Oh I didn't know. All I've ever played as golf. [17:07.9]
Duane: Most entrepreneurs, you start a business, you're passionate about it. It's your thing; you built it from the ground up. I think with construction, since it's such a personal thing; it's a big ticket item. So in, in some cases the largest ticket item that anybody will ever spend money on. And I think as builders and remodelers, there's always that inherent fear that this could really go wrong.
Scott: Yeah.
Duane: You know, and, and if I don't have my hands on every part of it, I just can't contemplate what that would look like if things went wrong and that's, I mean, that's no way to think about it. And, and at times you have to, you have to use sort of the 80-20 rule. You're going to have to have the trust in things like you're talking about the people, the processes, the systems to where you can let go, because you're just not going to have the bandwidth.
Dave: They do not confidence in handing over these tasks to somebody else. [17:54.2]
A quick reminder that the best way to get the most out of this podcast is to engage with the Builder Nuggets community, visit our website at BuilderNuggets.com and follow along on Facebook and Instagram. [18:08.3]
Duane: You don’t know how many times, I'll talk to folks and they're talking about how a, a particular new hire and workout or somewhere that they move, try to move to a different position or give different responsibilities and it doesn't work out. And then, then you ask the question of, so how did you set that person up?
Dave: The set up? Was there any training? Were there any processes? What tools did you give that person to succeed? The way you said it?
Duane: The gap is, is us and an owner. It's absolutely right. There's no doubt about it.
Scott: A lot of times the chaos. So Dave, let's go back to what you were talking about. The chaos is ringing in our ears, so to stop and to think, Oh, I knew you were gonna mention technology. I knew you're going to mention this. I knew you're going to mention Google docs. We've already defeated ourselves because the chaos is so loud we're like, I don't want to have to learn another thing. And the reality is, but would you learn this one simple thing to create all of these complex things in simple form so other people can get them, so you don't have to do them anymore. [19:04.4]
Dave: Where does somebody get started? Like when you have somebody come in, the chaos is ringing in their head. Is it different for everyone? Because we're talking with builders who may love some aspect of their business, something that is their highest and best use that they should be doing. That they're really good at, but they're stuck doing the other things. How do you do the initial assessment with them?
Scott: So Dave, here's the verbiage we'll get. Well, Scott, I appreciate the roadmap that you have, but our business is different. The jerk part of me wants to respond with, Oh my gosh, I finally found the different one. Like they've all been the same up until now, but I found the unicorn business, right? That's the jerk part of me when I'm thinking inside sometimes. The reality is, I know you want to be special, but your business isn't, it's a business. It runs on principle. That doesn't mean that you're not special and unique and uniquely talented, uniquely gifted and all those things. But your business is an organism. Like it's a physical organism that's growing or dying, or it's just kind of this thing. [20:06.1]
And so let's not be offended when I say no, your organisms kind of like a lot of other organisms and there's principles and physics that goes into that organism. So we start at the same place for everybody— vision story. Let's say you got a Ferrari. So you've got this bad looking Ferrari. I mean, this thing is amazing. I like Dave, man, this is awesome. I'm sitting in your Ferrari and like, all right, let's go, man. Where are we going? And you're like, I don't know. All right, well, where do you want to go? Ahh, I don’t know, you know. We'll figure it out when we get there. We just start driving and driving and driving and driving and driving. But eventually what happens is you run out of gas cause you just drove to nowhere. And so that's what's happening in businesses is we're just running ourselves out of gas to the point where we look up and like, man, I got no fuel in the tank. I'm exhausted. People are exhausted. My finances are exhausted. And the reason is because we could not focus everything towards that one direction. Now some people will go, well, I don't know if I know that one direction. All right, let's get ourselves close. Let's at least say we're going northeast. Even if it's not that pinpoint, at least I know we're going Northeast. We're not going southwest. We're not going northwest. We're going northeast. And so we've got to start articulating the vision because where there is no vision, people die. [21:19.1]
Dave: And so where does the mission come in? Because it seems to me, vision is great. But if you don't have anyone to go with you or your people don't understand it, then you're not on a mission.
Scott: Yeah. It's the other reason we run out of gas. All right. So let's say my vision is Boise, Idaho. Like that's where I'm going. My vision, Boise, Idaho, I've articulated out. I want to go to this beautiful city, surrounded by these beautiful trees and mountain ranges and all this stuff. So I've got it all articulated and then I'm driving out there and halfway out there I'm like, man, this is exhausting. I'm really, really tired. And somebody stops me and goes, Hey Scott, why are you driving out there in the first place? And I go, I don't know, just driving versus Scott, Why are you driving out there? I'm halfway through. I'm exhausted. I'm tired. Scott, why are you driving out there? My daughter's getting married. Whoa, that's different. There's my mission. There's my motivation. I'm going to see my daughter get married. Like that drives me to my destination. Your vision has got to be articulated. Multipage articulation of the snapshot of what you see out there. But your mission is simply, Hey Dave, why are you going out there? However you answer that question, that's the start of your mission and understanding where that is. [22:26.3]
Now that also leads obviously to your core values. What are the core values? Your core values are just your curbs along the highway to get you there. You know, if you're going to Boise, Idaho and go get on I-10 down in Florida, get on 95 go North 26. It's a whole lot more efficient, it’s a better drive, the whole thing. Don't just meander all over the place. That's the core values are those curbs along the side of the road to keep you on the right path, towards your vision. [22:49.1]
Duane: You've got to have that ability to be a sponge, to a degree. You've got to realize that every problem that we're talking about here, there's people out there that have already solved it. And there's so many answers and tools and things out there. But just by getting involved, even with things like this, with this community that we have here with peer groups, masterminds. I think that's the thing I, I hear it over and over again that did the reflex response by most builders, remodelers is I don't have time for that. I don't have time for that. Whatever the question I ask, it's almost immediate. I don't have time for that. And I think if they could start to realize that, get your mind out of having to create all of this stuff and instead get access to it and then implement it in your business. [23:30.5]
Scott: Yeah. Duane, I can't imagine coming home and so one of you guys telling me and I told you originally, Hey, I'm, you know, I'm really having struggles with my wife. Hey Scott, you want to sit down and have conversation with her? Like you ought to sit down. Oh, I don't have time for that. Can you imagine if that was my response? I don't, I don't, I don't have time. Hey, you ought to take your wife on a date. I don't have time for that. Hey, you ought to buy her a gift. I don't have time for that. It's the foundational principle elements that would show love and respect and all of those things for my wife and what I'm saying is I don't have time for that. Why don't you have time for that? Man I'm just so busy putting out all these fires, wearing too many hats and putting all this stuff in there. [24:07.4]
Dave: Walk us through how you help a business owner, understand what they're good at, what they should be doing, what there's missing in their business and then how to help them get it. Because I'm sure that a lot of our community is listening to this and saying, Hey guys, this is great theory, but give us some things like what would a coach do with me? How are they going to analyze these things?
Scott: In a good business coach relationship, every business coach should be walking a business owner through the four major systems of every business— account or administration accounting. Some people call it different things. Let's just call it administration, operations, sales, and marketing. Those are the four major systems, just like the human body has 11 major systems, skeletal system, cardiovascular, et cetera. A business has four— admin, ops, sales marketing. And so any good business coaching has got to walk you through those four. What we tend to do is we tend to run after the kind of the latest pain and it's usually marketing or sales. And we kind of look at that and I need more sales, any more sales. So we go after that one thing rather than looking holistically. [25:08.3]
All right so if we got you more sales, could your operational system handle it? And in most cases, the answer is no or vice versa all the way around. And so we've got to look at the business holistically. So what we built is what's called a master process roadmap, where we basically take all four of those systems in the business and we start to call from the mind of the owner and go, Hey, let's walk down the administrative system. What are the four, the seven or the nine major things when you think of administration that you have to think through and they'll go, Oh, receivables, payables, insurance, licensing taxes, office management; they'll just start talking them out. And by the time they're done, they look and they've got this one page sheet of paper with every process that exists in their business. One sheet of paper, it makes their business inherently more sellable by the way, cause if I'm going to buy your business and I don't see all the processes on one sheet of paper, but I'm not, I don't know what I'm buying at that point, but you've got this roadmap there. And then if you do it digitally, you can actually take all the processes that you've captured along the way, link them to those individual boxes for receivables, payables, licenses, taxes, site visits, job site, cleanliness, all that stuff. You can link it there. And now you've got a digital asset. [26:15.8]
So when you have a new employee, come in, you can go, Hey, new employee, see all those color coded things that are pink, those are your roles. See all the things that are not pink, don't worry about those until you're asked about them. But if you want to know how to do those roles, just click on that link right there. And there's the entire process. And so we lay that out. A good business coach is going to lay that stuff out for you so that when you're done, you've got your entire business on one sheet of paper. It's a powerful, powerful tool to be able to use. [26:43.9]
Dave: Is there like a great awakening and an enlightenment where they see, they get passed well, I have to, I'm the only one who can do that sort of thing.
Scott: Oh, certainly until they start to buy into a genuine hiring process and a, and a, a solid hiring process is going to take anywhere from six to eight, sometimes 12 weeks. What a typical hiring process is a vital pulse check. Hey, do you have a pulse? Yes. Great. You're hired. And that's kind of a typical hiring process. The reality is following the process that we in particular layout, it's going to take you anywhere between six to eight weeks. And again, sometimes up to 12, multiple steps. And for the first three steps of the process, you're not even talking about the role, the first phone call you're having. And you're just kind of getting to know them because you want to hear them talk. The second time you sit down, you talk nothing but vision, mission, values, and culture mentioned nothing about the job role. Because we don't need to talk about the job role if you don't want to be here. I want to know if you want to be here a part of this culture. And if you want to be a part of this culture, then we'll talk about the role. [27:42.7]
And then after that, we get through objective stuff, profiling, et cetera. And then we get to the job role down there. And then we do spousal dinners and a variety of things to run them through. But we've even found that when an owner will tell somebody, Hey, I'd love to interview you. By the way, this is a six to eight week process. Are you okay with that? That in and of itself is a filter to let you know that this is somebody who's a fit or not. So a lot of times we're even just kind of bringing the wrong people in, cause we just need a warm body to fill a spot. But then when we do get the right people, we're not doing a great job of training them and helping them to understand what they're coming into. But once they get that, now they've got the process to be able to do that. So a lot of it, again, falls back on us to make sure that we're doing a great job. Not only during the time that they're employed here, but the six to eight weeks while they're going through the process. And the 90 days of their first 90 days here, we call that stretching for the marathon. They don't start the marathon till about 90 days in. So you're hired you're you got all that stuff, but we're not going to ask you to run right now. Good grief, that would be insane. [28:43.6]
Duane: How long does it take for somebody to working with a business coach make this type of transition, like in earnest; make this transition to escape the chaos?
Scott: This is not three minute abs, this is a grind. This is work. This is the equivalent of P90X. And so the reality is, is we've got to keep motivated with what's on the backend. And yet at the same time, there are wins all along the way. And so we talk about the five stages of a business, because it's really important in these five stages of a business. Business growth is not linear; it's not this line that just kind of goes that way. Business growth is very variable; it's kinda like the stock market. It's a little bit more predictable than stock market, but it's more variable where it's got these peaks and troughs, Seth Godin calls it the dips. And so it's a series of dips peaks, and then dips that you go through when you start up, it's just the startup rocket ship. Oh my gosh, I got my first two projects. This is amazing. And you're starting to do it. And then all of a sudden you realize, Oh my gosh, I owe taxes on those first few projects and I've got to back and I've got to all these sorts of things that I've got to coordinate. [29:50.4]
Once that starts happening, you hit your first dip, then you start to move up. And in that first step, that's where you've got to really start to articulate vision, mission, values, and baseline process. And then you go to that second stage where you go, Oh my gosh, I need some people to help. So it's the people in passion stage. You're still being fueled by passion, but you got to bring some people on and go with it. What happens a lot of times is we jump that stage and we go to the third stage. And the reason we go to the third stage is because it looks cooler. We can put our name on trucks and we can do all that kind of stuff and it looks a lot cooler and we feel bigger than we actually are in that third stage. And so we just jumped the second stage. We do it by accepting outside investment, scaling too fast, getting in over our skis. And so typically what we've got to do with a client is bring them back to the dip that follows stage one. [30:43.7]
So you climb that peak to stage one, and then you dip before you go up the mountain to stage two. That dip, that's where the goodness is. That's where we grow is in those sequences of dips to get there. So in order for business to get typically from where they are, most businesses we find are at between two and 25 employees, they're revenue positive. They've got more money coming in, that's going out, but their net income is not near what they want it to be. They're running really thin margins for the most part, or they're just working their rear ends off. And they get no downtime, even if they've got good margins. So that's typically where we're going to find a contractor. In order for that contractor to get to the point where they have what we call marginal time. They've got legitimate marginal time where they literally come into our office or on a call with us and they go, Oh my gosh, Scott, I've actually got marginal time. It's going to be somewhere in the neighborhood of 18 to 24 months. Now a lot of people don't like to hear that, cause they're like, dang, that guy over there is promising me three months, 10X, my business, Oh, if you've got a $2 million contracting company, do you want to 10X that in three months again, can the skeletal system of your business handle that? [31:52.6]
No, no, no, no, no, no. And so we've gotta be very leery. Now, if you're running a business at generating 50,000 and you want a 10X fine, we can do that. But if you're running a business, that's doing 500,000 and you want to 10X in three months or six months be very aware, that's not how healthy trees grow.
Duane: If you go that route, your Bureau probably have to start listening to some legal podcasts.
Scott: Well, and Duane, the reality is though, that is the message that's being spilled out to contractors right now.
Duane: Yeah, it is.
Scott: Hey, let's 10X and we can do it within six months. Look at this guy, he did it within six months. I don't want a business like that. I don't want a business like that because those are fly by night businesses.
Dave: There's a feeling that you can sell your way, if you're good at sales and building relationships, you can sell your way out of it. You may just be selling your way into it deeper, but.
Scott: 100% [32:43.2]
Dave: But one of the mistakes we see or we hear about when we interview builders who have tried a number of different things is it's hard, I call it the spinach factor. Left to your own devices, you will hit those dips or a wall, or you'll skip them. But you know, it's good to eat spinach. You believe that it's good to eat spinach. You believe it it'll make you stronger and you can do it once in a while, but you can't do it consistently. So a layer of accountability, how do you get a stick to witness, a layer of accountability into your coaching? Because far too often, we hear about builders who recognize a weakness in their game. Hey, I need this software or I need to sign up for this marketing service.
Scott: Hmm…hmm.
Dave: And they do it. Its sorta takes, it's not the systems aren't tied together and it's the constant chase for the next thing, without completely absorbing it and making it a true habit or spreading it through their team as deeply as it needs to go. How do you help business owners get this ingrained to them, so it becomes habit? [33:52.7]
Scott: You know, we have tried to kind of solve the headache of our business through software a lot of times. So we'll look and we'll go, Oh my gosh, builder trend, that's going to save my life. And build trends great, it's awesome or there's others. And so we look around and think, and these things are going to save my life, they're going to do amazing things. The reality is the best project management software, the best marketing software, the best lead capture software, the best CRM; the best all of it is simply the one that you'll use. That's it. It's the one that you'll use and so if it's an Excel spreadsheet, but you use it, that's the best software that you need. So that's not going to save your life. A tool's not going to save your life. What will save the business is the implementation of those tools. [34:31.2]
Joe Calloway said, ‘Vision without implementation is hallucination.’ You asked about the accountability, I wish I could tell you it's more rocket science than it is. For us it's pretty straightforward. We mandate certain coaching meetings with our clients. And part of the reason that we do that, there's a lot of coaching that's offered and we tried this and we realized that it didn't work very well, where we say, Hey, we're gonna meet you for like a full day, four times a year or something like that. But we're really going to grind those four days so we can have your full attention. What happens in the three months in between zero, nothing at all. And so by the time we get to our second full day, three months from now, we gotta start all over again. It's actually incredibly inefficient. And so what we do is we meet methodically and regularly and they don't like it, but they know it's good, it's the spinach factor you're talking about. [35:15.9]
And so the other element of that, that we bring is kind of a twofold part. One is preparation. We're prepared as coaches and the way that we're prepared, the other side of that coin is coaching notes on a Google doc. We simply take notes of our coaching time as we walk them through our roadmap. And then we let them know before they come back. Hey reminder, we're going to ask you about this when you come in. And then we in, we sit down and we start with where we finished last time. And by doing that, we just tell them, Hey, we're not going to move on until we were, make sure that we've ingrained that. It's kind of like what our math teachers should be doing. And we're not going to go onto this discipline until we master this discipline. And so that's been our method of accountability. It's worked really well, but I will warn you. It's slower. It's not all at once. And it takes time. [36:00.4]
Dave: But it's real and it actually happens instead of chasing unicorns.
Scott: And so what we tell people is if you'll do what we've laid out, because they're principles are not strategies. Strategies are more hoped for things. Principals are just; they're kind of natural law. And if I push a gas pedal on a running Ferrari and it's in drive, I'm going forward. That's physics. And that's why good business coaching, you need a roadmap. You need a prescriptive roadmap. I'm not going to sit down and go, so Duane, tell me what's going on, what are you challenged with? I'm not following Duane. Duane’s the one that got himself into this mess. [36:36.1]
Dave: The first step in this is reaching out. So if you want to reach out to Duane and I, we can connect you with Scott. If you just want to have a conversation to figure out, Hey, what do I, how do I get started? How do I invest time in this? Where do I begin? We can connect you with some of the resources that you need to one, take a look at what you're doing well. Some of it's just analysis to say, Hey, what am I already doing? What do I think I'm doing well, but I'm not? And how do I find other people who are going through the same thing so that I can develop a peer group in a healthy way that is going to help to encourage me and inspire me to keep me accountable and where I can do the same for them. Because that's, that's part of the challenge to be honest, is that there are groups out there, but they can feel competitive. What are the different options? [37:24.8]
Reach out to us. We'll spend some one on one time with you and connect you with the right starting places and Scott may very well be one of them.
Duane: We work with hundreds of builders and remodelers, and it's not as scary as you think once you take those first steps.
Scott: Yeah. That's great. Well guys, thank you again for this. This is a it's, it's awesome what you guys are doing and the mission that you have, and I'm just grateful that you're allowing us to be part of it. [37:48.7]
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