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Show highlights include:

  • How your Shiny Object Syndrome transforms your business into a profit-eating monster (1:20) 
  • 4 core principles of building a lean and mean business that can scale up or down with ease (2:30) 
  • The “Not a Bank” business model that keeps your company lean and mean (even as you scale) (2:41)
  • The dirt-simple car analogy that makes potential clients want to give you their money before you start building instead of making you foot the bill (4:00) 
  • Why bringing marketing talent in-house is less effective and more gut-wrenching than outsourcing (12:57) 
  • How building your construction business like a doctor’s office maximizes your profitability and minimizes your headaches (14:26) 
  • The “Who, Not How” mindset that unlocks true freedom in your business (20:42)
  • Don’t invest in what you don’t need (26:10)
  • Why creating a lean and mean company puts your exit plan on “easy mode” (29:32) 

To get the most out of this podcast, head over to https://buildernuggets.com and join our active community of like-minded builders and remodelers.

Read Full Transcript

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.

(00:24): In July, we launched our first profit series podcast with so 29 on billable time, you told us you wanted to hear some more. So we're going to focus on another element today. Yeah. Thanks for all the great feedback. Lots of you have confessed to being guilty of giving away time and being ready to do something about it. Today. We're going to look at how to trim the fat in your business. The focus is on being lean and mean we like lean and mean because lean and mean is scalable. It's safe and frankly, it's profitable. Yeah. Converting to a more efficient business model can be tricky though. Especially if you've already painted yourself into a high overhead corner. A lot of the time it's actually stuff you don't even need, but think you do because it's the way it's always been done. Or at least you've always done it. We're going to help you challenge yourself a little bit today.

(01:08): Dwayne, you've seen pretty much every business model out there. What do you think are the classic misconceptions that lead to unnecessary overhead? Oh, I think the most common thing that I see is that business owners are always trying to solve these things, things on their own, trying to solve problems on their own guilty of it myself. And it can come down to the shiny object syndrome. You know, things that you hear in a workshop, you see a fellow builder doing it. You've heard a cool idea in a podcast. And you think that maybe that one thing is the thing that's going to solve your problem. And that ends up multiplying. Cause I think as the business grows, you keep adding stuff to the mix. You don't really have a concrete strategy in place, which would include training and scalability and flexibility on all the parts and pieces you're adding.

(01:51): But when you simply add more people and software without having a coherent plan for all of it, you know, that's inevitably going to result in more things that you have to manage. It's inefficient and it increases your overhead. But Hey, you know, you can always keep raising your markup. Yeah. So basically build a bigger hamster wheel and it'll be fine. Go out and get more clients. You know, we all fall into the trap of, you know, as everything as the volume grows, there's an automatic feeling that, Hey, we have to invest more in, you know, all of this infrastructure and all these things that we need to have, but it really isn't true. You can do a lot with a little if you're a strategic and methodical about it. So we're going to dive into some of the core principles of a lean and mean business and walk through some of the hallmarks.

(02:38): And when we think about what these are, I mean, the first principle is build your client's houses with your client's money. You're not a bank. We talked about charging for your time. This is a hallmark of a lean and mean business getting paid for the time that you invest in the company, outsourcing your professional business services, things like accounting, marketing, social media, we're always tempted to try and bring that person on board. And then we have unwieldy HR issues that we need to deal with. And we're building something that frankly can't scale, both ways up and down, developing your market partner trade base so that you don't have to self-perform everything. And again, build that house of cards and don't invest in what you don't need. You know, we'll, we'll dig into, Hey, do you really need a showroom? Do you really need a design center?

(03:28): Do you really need model homes, extra space, more vehicles? Do you really need them? These are the lenses that we're going to look through today and challenge each of you to examine in your own businesses and see if they make sense or not. And there's a big difference between needing them and wanting them because there absolutely are cases where it's like, Hey, I'm trying to build a boutique business. I want to have this showcase showroom. It's part of who we are. Yeah. That's a strategic to do it, but don't get sucked into it. Where do you want to start Dwayne? I think let's start right at the top. That first one you brought out, you know, building or remodeling clients' houses with, with clients' money, stop doing it with your money. Yeah. Billing in advance. You know, we have a builder that we work with.

(04:12): He had been challenged by a number of clients over the years where it's, they didn't want to put the money up front. They wanted him to do the work. And then when that piece of work was done, then they would pay for it. And he likened it to going on a car trip. You got to put gas in the tank before the car goes anywhere and you can make 50 stops along the way. Or you can fill up the tank three times and go a long distance. But so that's just a little strategy for how to position it as you put the gas in the tank and then you drive. But the real fundamental is, is that the second that you start to fund this, you start to take on all the risk by sticking to your guns at the beginning and explaining that you're not a bank and that you are building the client's house with the client's money.

(04:58): This is how you take that. You know, you already have the risk of doing a good job, but now you don't have the risk of funding, a project that isn't yours. So many stresses in these businesses. I mean, you talk to, you can talk to lots of business owners and, you know, cashflow constantly comes up cashflow cashflow, and it causes so many internal problems distress. You know, it can, it can be, be, become really frustrating. I think it leads to so many of the other problems and it's, it's really in most cases on necessary too. It's just happens to be the way folks have either structured their contracts at the expectations with the client. But you've got to get the fundamental idea in your head that you are, you're building these, you're building these projects with the client's money. And a lot of it does, it comes around.

(05:38): How do you structure that from the front end? How do you set up milestone payments draws with a little thought you can pull this off and you're not going to get the pushback that, that you might think. Yeah. And you're also going to avoid the situation of being held hostage at the end for a large paycheck, for small deliverables or finishing items you know, the punch list things where you've let this go too long. A client's not paying you the final a hundred thousand dollars for $6,000 or $2,000 worth of small items that, that they're holding you hostage for and putting you in a situation where you've got trades asking for money and you don't have it yet. So what are some of the ways to avoid that Twain? Well, I think so, well, the way to avoid it, it's going to go again all the way back to the beginning.

(06:22): Really setting the expectations with the client on how you operate, how you're going to bill, why you build that way and you better have your detail in house in order to, from the very beginning, because it's not going to go over. Well, if you just walk up to the client, say, Hey, I want 50% down. That's because that's the way we work. That's going to take more than that. What are they getting for that? Why is the money being put in the front loaded part of the contract? You know, are there services, are there things that you're acquiring, especially now in this environment? You know, there may be things that you need to secure way before it's time to install them. So I think really the biggest part is probably setting the expectations and then backing it up with specifications, scope of work, all the details to show the client why you're doing that.

(07:02): Well, it comes down to as well, safeguarding their funds, a lot of the time there's mistrust or discomfort with forking over the, over the money in advance. So you have to have a very clear and defined way of managing their capital. Nobody wants to feel like Mr. Jones doesn't want to feel like his capital is finishing the Smith's job. So in order to be able to do this effectively, you have to deliver with confidence, how you are going to safeguard the client's money through this. And whether there's extra sets of eyes on those funds, is there somebody helping you to administer that? Is it in a separate trust fund? Just what exactly is happening there? And this gets, this gets tricky too. When the bank is looking at milestones we could probably do a completely different show around that because when you're, when you're a little bit at the mercy of bank funding, you really have to front end load the client's funds at the beginning to stay ahead of that curve.

(07:58): And those draws in case something goes a little bit, a little bit squirrely, but most of them comes back to being really open and honest, transparent with your clients. You know, letting them see everything that you're doing. And then being able to back it up with, with the numbers is to, like you said, either have somebody in place. If it's not you yourself, you produce that stuff. Show them where they are in the budget at all times when you're meeting with the clients, where are they, how are we doing from a budget standpoint point? Where's the money going? It's just going to put them, it's going to put them at ease. That's a really good point. Transparency is transparency combined with regular communication and expectations is huge too often. Transparency is just used as proof after the fact when it's no good. You know, it's, it's a month after the project has gone $150,000 over that.

(08:42): You're able as a builder to come back and say, well, here's all the proof. This is where it was all all spent, but it's no good to anybody at that stage. You need to have that transparency in, as you're having these weekly budget reviews meetings as you go. And if you can show to your clients that this is how we're managing the funds is you're always going to have visibility into it. And you're always going to be able to make decisions with how, how much is left and when the next draws are coming. That's what you're talking about, Dwayne, with the proper expectations. Absolutely. One of the things we tweaked in, in our contracts was it used to be draws would be coming at the upon completion of let's say framing. So we would have that draw listed in the, in the contract. And it would say upon completion of framing, we just changed completion to commencement.

(09:32): And it was very clear to the clients that, okay, the next stage is framing. Now we need the money for the framing, and we're going to go ahead and take engage in that piece of it and proceed with doing executing that piece of work. And I don't think any builder should feel like, Hey, I'm going to go ahead and commence the next stage of your project without having the money. Like now I'm building your house with, with my money. So it all circles back to that philosophy. I'm not a bank I'm bill. You're trusting me to build your house with your money. This is how we manage your money. This is how, what the draws look like. This is how the project is going to flow. This is how we're going to communicate about it every step of the way. And it is doable. We have seen hundreds of builders convert to this strategy and have it work.

(10:20): So they never have to do it again. At the end of the day is pretty cut and dry. And I think the big takeaway for that one, there is just get it in your head, build remodeling your projects with your client's money, not yours. We talked about, you know, in episode 29, we talked about charging for your time. So we're not going to touch too much on that one. Again, if you haven't listened to it, it was back in July is a real game changer. And we've heard from many of you that, wow, this is something we want to learn more about. And particularly around how to position it with clients. How do I sell billable time? Again? The number one challenge we hear is that won't work in my market. Nobody else is doing it, which is complete BS. We we've seen in every market that we've gone into.

(11:01): We've seen this work. We've seen this effectively positioned and effectively valued by clients. It's just a matter of you learning how to do it. Yeah. The only thing I think I would add to that is something to think about from the lean and mean concept is if you really embrace charging for your time, really focused on, on on the billable hours, even when things might be in, you know, in flux, if you've got several projects lined up and you're, you've entered into a paid planning agreement with your clients, you're getting paid for your time, that's pretty lean and mean you don't have a lot of expenses and overhead going on there. You're getting reimbursed for the time you're putting in. It can carry you in those times where things get a little in between. So it's just, just makes sense. It the numbers work, think about all the ways that you can charge for your time.

(11:45): You know, it also gives you more predictability. And when you have predictability, you're eliminating the margin for error and the fat from like the, the overhead or the cost to you of making mistakes or, or basing your decisions on guesswork. Because you really have no idea where you are part of this really comes down to the strategic use of your decisions and what that means when you, when you take a lot of the guesswork out, you're, you're just more streamlined. And in general, one of the areas that we see people adding HR, the more people that there are on your payroll that are overhead, the bigger, the risk, it makes it hard to downscale. If something changes as well. Cause one of the most gut wrenching things we've heard from, you know, in our conversations is what it was like when the market turned and you had to let people go and these people have become family and are important to you, but you just don't have the work for them anymore.

(12:38): How do you manage that? And one of the solutions to that is two areas for this. It's the professional services that you need in your business, outside of what you do and the self-performing. So if we start with the professional services side, first, what we see an awful lot. This gets back to the builder, wearing too many hats is somebody trying to figure out their marketing program, their social media, who is going to do our accounting. And you start to bring all this stuff in-house and putting multiple hats on multiple people. And it doesn't work as well as just outsourcing it to somebody who is a lights out expert in that field. And that can grow with you or downscale with you as the economy dictates. What do you, what do you think about that, Dwayne? Yeah. Goes back to what I said, kind of in, you know, at the beginning of the podcast there a minute, when you add a lot of stuff like this, it leads to more things than you, as the owner have to manage.

(13:35): I mean, I would much rather put myself in a position where I've got someone that is the rock star, as you said, and I can simply delegate to them and know what's going to get done versus I bring somebody on and then I have to manage what they're doing. There's that finite few things that I want to be managing as a construction business owner. It's not all of the aspects of the bidding. So the flip side, and we'll probably get to this more when we, when we talk about the self-performing, the flip side of this though, is many builders. Don't feel like they have control. If they outsource something. We see that, you know, one of the fundamentals for design build, keeping design in house is because we want to have total control over that. We feel, you know, somebody may feel that their architects aren't responsive enough when they're independent architects, versus when they're in-house and they're, you know, they have to, they have to answer to you.

(14:21): So what's, what's your response to that with the other side of that coin, if I'm playing devil's advocate here, something I think about when you think about shared services or how do you outsource? I think about physicians and doctors, there's a lot of things that they have to do. And if the you know, primary care physician and he's going to have to go out and get someone to do the x-rays and somebody else to do the blood tests and all that, he's not going to do those things himself. He's not going to want to bring in some people and do that. He's got a trusted network of people that he can go to. They lean each other, and that stuff gets outsourced, but it's, it's in a network of folks that are dependable. They're perfect nationals, and boy, can they charge for it? Absolutely.

(15:00): And, and we'll, we'll get to that when we're talking about self-performing, but it really comes down to a pay as you go pay, as you need it, model looking through the lens of, do I need this? Do I, you know, and most of the time when you're making the decision, this is the other thing that's. So whether you're bringing on a project manager or an accounting person or whatever, usually you're looking at it and going like sucking into the breath first. Do I, I don't think I need somebody full time yet. How do I get a part-time person to do this? Or how do I get Steve to work on, you know, he's our accountant, but maybe he can do some of this other stuff over here. And it gets back to what you're talking about. It's very hard to plan. It's very hard to scale.

(15:40): It's very, very unpredictable and you will not get the creme de LA creme. So you end up eating a bunch of eating a bunch of time when you can just simply outsource it. And yes, you'll be paying somebody, some profit on it, but chances are the return. And the result is going to be much better than you can do on your own. And you mentioned that Dwayne was shared services. We work with builders who share. I can think of nine of them who share a marketing manager and that marketing manager understands everything that these builders are looking to accomplish in their areas and is responsible for coordinating their events, making sure that their social media represents them well and provides so much value. But it's split between nine offices and that marketing manager can then scale her team accordingly to ramp up. And it has the obligation to scale down if things scale down.

(16:35): So we've seen it so that you actually get a much better result to have a lower shared cost and much more freedom. You're much more nimble and lean in your business when doing the same thing with accounting, like we were talking to a business owner, who's got an accounting person on their staff, that's doing billings and things like that. That is getting close to a hundred thousand dollars a year of pure overhead versus Dwayne, I think you said last year in a year in a shared accounting model where you're working with a bunch of other business owners who are have a suite of accounting services that are like five times a services company is getting. And I think you were like just over 20 grand a year. So they're out dramatic and it's, it's relying on professionals. You know, when you, when you say outsourcing, you're finding someone that is, that's what they do.

(17:26): That's what they're, they're dialed in to do it. They are the pros, they're the experts. And you can, when you rely on them to get that task done it's going to be done at a very high level versus, you know, when you bring that stuff, in-house, there's generally a learning curve. Somebody has got to be brought up to speed on that. They've got to be trained on how to do it. If they leave, you've got to bring in somebody else. You've got to replace it. You've got to, you've got to start all over again. The lean and mean part that that's where it gets a little bit dicey. Because as you said, as you start to scale in volume, if you're scaling upwards, you might have to add people. You might have to add a bookkeeper. And then the same thing, when things decide to go the other way, you're probably going to have to let somebody go. So it just, it just adds again, another layer of things that you have to manage and kind of monitor versus it's just something you can say it's being done. It's not something I have to invest a lot of time in. I know it's being done and everything is being done professionally. You know, I get the information that I need when I need the information, but boy, it's not something that I have to micromanage

(18:30): 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@buildernuggets.com and follow along on Facebook and Instagram.

(18:44): We've even seen builders, tangle themselves up with building their own websites and working on things like that for months at a time and not having the results or the outcome that they want, because that's not their highest and best use. So we've, we've had people, oh yeah, Carlos is my estimator. And he's also writing the blogs for me. You know what I mean? That that could work, but that's not really a scalable model. No, it comes back to the highest and best use. If you were trying to build an exceptional business, go out and find exceptional people who specialize in this stuff who love doing it, who get you, who align with your core values and can make this stuff happen. So you get it off your plate and you don't have to think about it anymore. And again, focusing on where you add value in your business and what your company is good at.

(19:30): Otherwise, go start. If that's what you want to be in, go start an accounting company for builders, or go start a marketing company or a social media company, or go build websites. Do you really want to be in that business? And I've had some challenging eye-opening conversations with some very well-established custom builders that, you know, when you look at it, they're doing big volume and they do it without almost without any in-house employees. They might have project managers, site superintendents, something like that. They don't really have any carpentry staff or framing crews and all that. And, and, but they build this internal overhead staff. And I challenged them to say, Hey, you're outsourcing everything to build this custom home. Why can't you outsource the stuff to run your business? It can be done. It can be done very efficiently, very cost-effectively. And it will definitely set you up to be lean and mean.

(20:16): And if you have, you know, if you're struggling with that, reach out to us through our website@buildernuggets.com. We'd love to hear from you share with us the piece that you're struggling with. We have access to resources, and we may be able to point you in the right direction and help you find an expert, or at least teach you some of the questions that you should be asking how to interview some of these people, what the risks are or whatever your particular issue is around this. Yeah. Reach out to us and we'll, we'll get you some help, anybody listening. There's probably something going on in your business today that if you took a good look at it, could outsource it and have a really good solution. Well, we see it when we go through the highest and best use exercises or delegate and elevate, depending on what you want to call it, it's all the stuff you want to get off your plate.

(20:57): You look at it through the lens of, is this something I should be doing? Is this something that somebody else on my team should be doing, or do we need to find somebody that's who not how finding that rate, who to do that job and to do it to the best of their ability and to bring the most value to you that is so worth it. And so that's how you create real freedom in your, in your business. So let's, let's apply that to the outsource trade partner model, where you don't feel like you have to have an electrical company as a wing of your business. You're not self performing plumbing that you've got great partner companies that do that for you. And I think what it comes down to is the challenge is that people end up bringing this in house when they feel like there's a shortage in the market, or they're losing control of their ability to get the performance and results that they want from their trade base.

(21:46): What do you think about that? Dwayne? The challenge that, you know, we will put out the builders remodelers. When we talk to them at the core, at the end of the day, we are, we are general contractors. That's what we're doing, where we're supposed to be contracting out to all these different services, trades and professionals. And I get it. I mean, I get the reasons why people will we'll bring it in and, and it can work. There's people that can manage it. It's just, again, if we're the subject we're talking about here today is lean and mean it, that's another layer that you're adding of things that you have to manage. You now have to control keeping everybody busy, making sure if you've got a crew of, you know, framing carpenters, they've got to be working every day. So some of the decisions you might start making might be skewed a little bit, because you might take on a project that you wouldn't normally take on because in the back of your mind, you're saying, well, I've got to keep the, I've got to keep the framers busy.

(22:33): So I think it just, it adds those types of things to the mix that if you had a, just really rock, solid trade partners to take care of that stuff, it's just one less thing that you have to spend your time managing. Yeah. And we're going to get back to that, you know, unsolvable problem territory, where it's like, yeah, but you guys don't understand my market in my market. There's a shortage of these things. And the only way I can get this done is to bring it in, in house. And that's where, you know, again, if you want to reach out when can, I can do some one-on-one case analysis with you, but this is where we've helped. A lot of people understand it. You have that problem because you're not investing time in solving that problem. You're not doing the things we're most, most of the builders are jumping too quickly to bringing in an in house before they go through the other avenues, which are, Hey, really find the trades that can scale really make sure that you can position things differently.

(23:25): Do you have enough budget in your, in your model for getting a higher caliber of bill? Do your clients appreciate that? And how are you developing a relationship with those trade partners? Are you spending time with them? Do you know who they are? Are you treating them like a commodity? Because if you are treating them like a commodity, they're going to you like a commodity right back and nobody's business is going to grow the way that you want it. They're just going to look at you as a job instead of a, of a partner. So it really comes down to how are you going about approaching and winning the trade partner battle where the best trades in your market want to work with you? Because you're the most organized, you're the most professional. You provide them with an unbelievable experience, the fundamentals, like you pay on time and all that sort of thing too.

(24:11): But what are you doing to beat out the competition? So that you're the contractor of choice. When you are the contractor of choice, you don't need to bring all that stuff in house. So go out and be the contractor of choice, win them over. And yeah, and if you're listening to the podcast, then you know, there's a good chance. You're one of those people, that's growth minded. You could be involved in builder, 20 groups, peer groups, masterminds. You're taking the time to try to better your business, better your personal skillsets. Why not take that time? The things that you're learning and share that with the trades, get, you know, get your best trades together. Maybe you've got that frame room. Maybe you've got that. The trim guy that he's been struggling a little bit, he could be, maybe it's a simple thing of they're struggling with just time management.

(24:51): You know, they're really good. They've got a good staff, but they have no idea how to really manage a schedule. Well, maybe you've picked some tricks up along the way and things, as you've heard, sit them down and take some time, understand what they're struggling with. You might be able to help that trade. And what you're going to do there is you're not, you're going to probably solve a problem for yourself, but you're also going to earn a trade for life. If you take a little time and invest well, it's just, yeah, that's the word I was going to use when you invest in them, they invest back in you. And we see that time and time again with project managers and, you know, with any team member that you, that you have. But yeah, if you increase the investment into the development of that trade partner, it's going to come back to you.

(25:28): That is absolutely how you win that battle. Speaking of investment, I mentioned it in the, in the rundown, don't invest in what you don't need. And to a large degree, this is dependent on possibly the maturity of your business, but the notion of taking a good hard look at, do I really need it or do I really want it? Or is this a strategic play? When we think about somebody who's, you know, in their first few years of their business, and they're excited to get, you know, invest in office space or, or a location we're going to challenge them, do you even need it? Are you spending most of your, most of your meetings happening in your client's residence? You, you may not need to take on overhead like that. Also related to that is the buying of tools of trailers, of trucks, of storage space in a warehousing materials.

(26:17): When you, this goes back to outsourcing versus self producing you self produce. Now you need more spots for people, more spot for their tools, the equipment that they need to run that job. Now you're into yards, trucks, trailers, capital, all kinds of stuff that are things that can sit on the bench and just drain you of profit. But getting back to what we're saying about, you know, somebody who's in infancy of their company or is stripping down, we've seen companies do this that were very heavy and they say, okay, we're going to lean right down. And they get rid of their office space. They go right back down to the beginning and start over because they're putting new, new things into it. Sometimes it's, it's a smart move to scale down before you ramp back up and you're doing it lean and mean as we, as we keep saying.

(27:06): And there's so many ways to look at this, you know, and this is certainly one of those things that is not a one size fits. All right? And you know, a lot of the other points we touched on probably could go across the spectrum. But this one here is, is really depending on, you know, the smaller volume, upper to the, you know, maybe higher volume contractor, but you've really got to take a look at what you need here, because, and I think this past year and a half, we've seen, you know, the things that have been done remotely. I mean, obviously we all want to be face-to-face with our clients and our trades. I get that. But we've also proven, not just in our industry, but in many others, a lot of business can be done in virtual ways. You do it. You have to challenge yourself.

(27:40): And there's so many ways you can go about it. You know, maybe, maybe all you really need is you do need a space to get in front of a client. You want to sit down, you want to have a nice place. It's got a nice little conference room. We'll take a look at that. Maybe that's all you need. There's co-work space. There's places where you can probably rent small portions of that. That doesn't necessarily mean just because you need an office. You need, as you said, Dave, the whole thing you need, you know, multiple offices and conference space and warehouse space. And you've got to take a hard look at what you need and just don't get any more because it's at the end of the day, it's really not needed. You can develop relationships. There are so many supplier and trade partners out there that I guarantee are willing to share their conference rooms, let you meet clients in their showrooms.

(28:21): They would like nothing more than I have clients walk through their showroom. So there's a lot of options out there that you can look at first besides saying, you know what? I'm just going to go out and get a big office there. And there's a difference between you need it and you want it. And we've talked to builders that, you know, part of their dream is to have a hub location where they have a design center in there. It becomes an icon within the community. And that's, you know, that's something that you can work towards. If that building is going to have value, it's going to attract, it's going to be worth it. But you really have to look through the lens is what is the return on that investment? That's what you're thinking about. That probably means it's a side business, Brandon, if you've done it right, you've set it up to where it's not relying on your construction company.

(29:06): It's paying for itself. It's paying for the business because maybe it's leasing out space to, to a much of other different businesses. As we said, one size doesn't fit all, but don't make it again. Don't just say, because I'm a contractor because I want to do X, Y, and Z. I have to have this large officer's short. I mean, you really need to take a hard look at what it is that you need. Yeah. So I want, we talked about exit strategy often as well. And one of the things that we didn't have in the in the list there is what lean and mean looks like in terms of acquisition. You know, if you have all this bulky overhead, it becomes very scary to say, okay, how am I going to repeat that somewhere else? But it also becomes very cumbersome for somebody looking at buying in and looking at all that overhead and probably the minimized profit, very, very tough to develop an exit strategy for an owner that wants to come in and take over something that's simple and profitable.

(30:02): It looks great from the outside, but we find these businesses when you get under the hood of them, they're not that attractive to investors, and you're not getting near the multiplier on your profit because of all the fear and risk and management and hassle and potential for disaster in that. Whereas when we see a smaller business that is very, very well run, lean and mean highly profitable. That's when you're seeing the multipliers and more people are attracted to it because it's a much easier take over acquisition and easier to take over a part of it, or for you to be able to turn it over to a project manager who wants to grow into a general manager or somebody who wants to become an equity partner. They know how to run it. There's very few people builders who want, who can and want to take over another company that's like that because there's, it's just too complicated.

(30:55): Simple is attractive for anyone that's thinking about, you know, investing or buying a, a contracting business. You know, the last thing they're going to want is something that they're going to have to really manage it. They're looking at it and they can, man, I've got multiple departments that I'm going to have to manage. It's unwieldy. I can't even track the different divisions that they have. First thing I'm gonna have to do is strip this thing down. That's just not appealing. That is not something that somebody is going to want to put their time and effort into so that the lean and mean is hugely appealing. You can always add to it. You know, when people, well don't want to do is have to buy a business and then start stripping it down to the foundation on day one. Well, you know, it's funny cause we're, we're going through that exact conversation with another builder that reached out to us through the show, just to look at what a, what the options are and his company.

(31:41): And he's got a window company and a roofing component to it and the handyman component, custom contract and component to it as well. And this thing is getting, you know, he's, he now needs to get expert advice about what, what are his exit options does he need to, does he need to look at, is selling it to his employees, the best option, because they're the only ones who, who know how to do it. It just adds a layer of complexity. And if you are going to have those things, do your best to keep them separately and be able to park them out. If you need to, if you're find yourself in that boat and you're agreeing with us right now, do what you can to separate them and create that core nucleus of your custom building remodeling business that focuses on just that. And you'll probably be able to get more for the parts separated out in anyway, overall mission to help people achieve freedom through their business.

(32:33): There's I just can't, I can't think of an easier way for folks to get there. Then the things we talk about, simplify, lean and mean it just, it opens up the options. Once you have your, your company running efficient, running in a lean and mean model, there's lots of runway ahead of you to, to make changes, do things that you want to be flexible. But when you go the other way and you get really filling your company up tons of overhead, it really restricts you. It gets your flexibility disappears. It looks great from the outside. You look, you look like a big company, your website looks amazing. Your team looks huge. And it looks just as big when you're trying to figure out how, how you run it because it's so complex on the inside. So yeah, I agree with you, Dwayne, keep it simple.

(33:19): Build your clients' houses with your client's money. I go back to that one. That was one that I learned in 2013 that really stood out for me is you don't need to be the bank. And you're in a position right now where your services are in high demand. You're coming at the market right now from a position of strength. Now is the time for you to work on your game and use that strength to put in the principles that you want to have in your business. And you will still attract the right clients. If you are building good homes and you are delivering an exceptional service and you are safeguarding your client's money and experience, then you will still be in demand. But take this time to put these things in and architect the business that you want to have, not the business that you feel like you have to have, because that's the way you've done it before.

(34:11): That's what you think looks good. Reach out to us. We'll take a look at things with you and share experience. And if you think we're full of crap and there's, you know, we're way off base on something here, let us know that too. We'll dig. We'll dig into that with you. And you may have you may have something for our audience that we haven't thought of yet, or haven't seen, and we can bring it to the rest of the group. Absolutely. That's a wrap on the lean and mean thing that doesn't take a lot to do it. The hard part is probably taking a solid look at what is what's going on in your business right now and identifying the things that are core to how you function and maybe the things that are no.

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