EP132: Profitable Pivot: My Journey from Generalist to Specialist

That's what some of you are like. It's dumb. It's stupid. Like smack yourself. I did it for many years. It's stupid. Even when I had somebody tell me you need to niche down and find the most profitable thing, I thought that's stupid. I'm limiting myself when I do that. It's not stupid. It's smart. And that's what the most successful people do. There's people out there. Think about this for a second. There are companies out there who pick up dog poop in people's backyard that make more money than you. There's companies out there that are picking up dog poop that are making more money than you. There's companies out there that are cleaning garbage bins that are making more money than you. There's companies out there picking up junk that are making more money than you. Why? Because they picked a very simple business that people don't want to do, and they turned it into a profit machine. You guys want to be craftsmen, and you want to do these beautiful things that should cost $100,000 to do, and you want to do it for $50,000 because, you know. I don't want to mark up materials because that's ripping people off. I digress. Sorry, I was reading a Facebook comment today, a post today, people asking about how much to mark up materials. And all the comments are like 25%,35%. I don't mark up materials because I don't rip people off. I really just want to reach through the computer and choke these people out. I really do. The amount of ignorance and stupidity in these. And some of contractors' brain is mind-numbing. It is. All right, back. Focus back, Brad. Focus back. So you have to start niching down, guys. And so let's say right now you have a business and you do 10 different services. I don't care what it is. Let's say you're a landscaper. You do lawn care. You do bed maintenance. You do landscaping. You do pond builds. You do waterless, you know, not waterless, pondless waterfalls or water features. Maybe you do, I don't know, indoor. Maybe you have a nursery. Maybe you're doing a bunch of different stuff. Okay. And I have a couple of clients that actually do a lot of these different things. But there are some exceptions. And I'll get to that here in a second. But let's say you're doing all those things now. And you're running around like a chicken with your head cut off. And you're having trouble staffing, finding staff. And you're having trouble getting leads. Those are all symptoms of you don't have a specific niche that you're trying to serve. You're just trying to get the phone to ring and work for anybody who calls you. That's not a healthy business. You are far better to offer one service. like building ponds and that's it. Now there's some, there's some services that go along with that. If you build ponds, then you may do pond maintenance where you go out and clean the water and all that, right? That makes sense because they go hand in hand. It's an, it's an upsell. It's an add-on service, but cutting grass and doing landscaping. They're really not add-on services. The only thing that you have in common is it's the same customer. That's it. There's nothing in common between cutting grass and doing landscaping. Those two skill sets don't even translate over. It's a natural progression for a lot of landscaping lawn care companies to do lawn care and then work their way into landscaping because they can see dollar signs. They see dollar signs. in the landscaping side, so they pick it up, but they don't drop off the lawn care because that's their bread and butter. Again, there are millionaires out there that became millionaires just cutting grass. They become really good and really efficient at cutting grass. And there's landscapers that are very successful because they don't do lawn care. They just focus on landscaping. And there's companies that are just nurseries that just sell plants. trees and stuff, because that's what they're really good at. Now, again, these things can complement each other, but you don't do that all at the same time. You start with one service and you get laser focused on it and you lean the crap out of it. And by the way, lean is just a term for manufacturing where you take a process and make it as efficient as possible. And so you lean the crap out of your business so that there's There's literally no more room for efficiencies. Like it's an efficiency machine, right? And then when you're there and you have it scaled, in other words, you have leads coming in, you're filling the schedule, you got people to hire, the processes are in place, everything's going smoothly. Then, and only then, you can add on a service that complements what you're already doing. Because you got laser focused on one thing and figured it all out. And then you're adding another service, getting laser focused on that service and figuring it out. Hey, just a quick timeout from the show. In the next 30 seconds, I'm going to tell you exactly how you can transform your contracting business. Imagine being part of a community of winners where you can find out exactly what they've done to be successful. That's exactly what you get when you join the Profit Club. But it's not just the community. You get lifetime access to all of my course-related material, including all future material that I add. But wait, there's more. Each week, you'll get access to three group coaching calls to talk about sales, marketing, and business problems and answer any questions that you may have. Still not convinced? How about personalized one-on-one coaching to help you overcome your limits? And here's my promise to you. I guarantee you will double your investment within 90 days, or I personally will work with you one-on-one until you do. So don't wait. Elevate your game with The Profit Club today. Now let's get back to the show. But if you're doing 10 different services right now, in other words, if you called me and you're like, hey, Brad, you helped my business. I'm not making any money. Things are crazy. And we get on a call together. And I say, what all do you do? And you say, well, I do lawn care, landscaping. I have a nursery. I do ponds. I do maintenance. I do this, this, this, and this. I do snowplow removal, holiday Christmas lighting. I'm like, holy crap, dude. Like, can you, let's take some Adderall or something. Let's get down and focused. Because I promise you. If you look at all of your numbers, and this is the heart, this is the meat, this is the meat and potatoes of this podcast. What you need to do is look at all of your services at the end of the year. Okay. Let's say you're doing 10 different services at the end of the year. You should have the numbers of how much revenue and profit you did by service type. So how much money did you make cutting grass? How much money did you do snow plow removal? How much money did you do in your nursery? How much in the landscaping? How much in the tree lighting, the Christmas lights, so on and so on. And look at those. And whatever one is underperforming should be cut immediately. Because what that underperforming service that you're offering is doing is stealing profit from the other. services that you're offering. So let me look at, let me hit this from a different angle. Let's say you do lawn care and you do landscaping. Let's make it very simple. You do landscaping. Landscaping is a very broad term, but let's just say you do landscaping and you do lawn care. Two services. At the end of the year, you look at the numbers. Your lawn care was 25% of your total revenue, okay? And your average profit on those jobs was 35%. gross profit. And your landscaping was, I think what I say was 25. The other one is 75%, whatever the difference is. And that 75% makes up your, your profit margin on those averages,45%. So 25% of your revenue, total revenue is lawn care and 35% of that. is gross profit. 75% of your revenue is landscaping and your profit margins are 45%. Most of you would be able to tell that your landscaping does, you make 10% more profit on a landscaping project versus lawn care, right? So if you took that lawn care, which is taking up 25% of your revenue, the next thing you look at is how much time do I spend doing that service? So a lot of companies that do both of these will dedicate one or two days a week to cut grass. And then the other two to four days a week or, you know, one to three to four days or whatever are doing landscaping because they don't have the, they don't have two separate businesses. They don't have two separate divisions. So the guys are cutting grass on Monday, Tuesday. They're doing landscaping on Wednesday, Thursday, Friday, same guys. So what happens here? Can you not see the lost opportunity costs that you have right now? If you're cutting grass one day a week, that's 20% of your time. Each week,20% is going to a service that only gets you 35% profit margins and is only contributing to 25% of your revenue. Now, if you were on the other side of that conversation, what would you tell that contractor? you would tell them you need to drop your lawn care immediately because simply doing that is going to give you a 10% increase in profit one day a week automatically. Does that make sense? You guys see how I'm coming to that? You're eliminating things that are not profitable. But Brad, I love cutting grass. It's my favorite thing in the world to do. Okay, then quit doing landscaping and do grass cutting if you're so passionate about cutting grass. Well, I don't want to do that because I can only do it seven months out of the year, eight months out of the year or whatever. So then I have to take up snow plowing. Guys, I'm telling you right now, if you get laser focused on one thing, do it exceptionally well, systematize it, and figure out how to dumb it down, your life will be 100 times easier and more enjoyable, and you will make way more money. I promise you. I promise you this. When you niche down, it makes everything so much easier. See, a lot of you guys want systems because you think systems are going to make your life less chaotic. The reason why your life is so chaotic is because you're trying to do 15 different freaking services. That's why your life's chaotic. In no world should you build homes. And then also do remodeling. You just shouldn't. You're either a home builder full-time or you're a remodeler full-time. Are there certain circumstances where that's possible and you need to do that? Yeah, if you live in a rural area where there's just not enough work to go around. That would be an exception. But that's what a lot of you do. You're a roofing company that also builds fences. You're an electrician who also... does drywall, which I don't even know how those two go together. I have one client that I talked to. That's literally what they did. Electrical and drywall. I'm like, bro, you're like a walking oxymoron. Like those two things don't even go together. And I tried to tell him he needed to niche down. He didn't want to. He didn't listen. Never heard back from him. I wonder why. Because nobody wants to be told they're doing stuff wrong. Nobody wants to look in the mirror and say, oh, I shouldn't be doing this. I was the same way. You guys listening can't see me. I'm waving at the camera. I was the same way. I was doing all those different services, losing money. That was the profitable pivot. When I understood to focus down, I became way more profitable. It became way more easier to systematize my business. And I became a lot less stressed because I'm not trying to figure out. 15 different services. Keep this in mind. If you do, if you build ponds, that requires one way of, you know, one whole process of how to do it. And then you do landscaping. That's a whole nother process of how you do it. And then you do lawn care. That's a whole nother process of how you do it. And then you do snow plow. That's a whole nother process of how you do it. Each one of those services require their own marketing channel, their own training for employees, for skills. their own systems to create like processes that their own unique billing and estimating service, right? Cause some of those can't be estimated and billed the exact same way. Some can, some can't. It may require different types of clothing or uniforms to provide, right? Like all of these things start adding up guys, they start adding up. It's more tools to buy, more services to train, more software you need, more marketing. People don't want to hire generalists. If you had cancer, if you got a cancer diagnosis, would you want to go see a family physician or would you want to go see an oncologist? More importantly, if you had, let's say, prostate cancer, would you want to go see a oncologist, a general oncologist, or would you want to go see an oncologist who specializes in prostate cancer? Most of you would say, I want to go see a prostate cancer specialist. Yet you can't look at your business the same way. Well, I'll be out of it, Brad. I'm good.

I laugh at myself every time I do that voice. But that's how ridiculous some of you sound when I talk to you. I'll just tell you straight up. Some of you guys, when I get on a call with you to see about helping you, I get off the call and I shake my head and I say, that guy is never going to be successful. He's never going to be successful. He either has too much ego, his focus, he has no focus whatsoever. I've talked to guys that want to, they want to do construction and then they also want to get into apartment, you know, real estate, building apartments. And then they also want to start a DIY, you know, service to help homeowners. I'm like, what are you talking about? Like you're in three different planets right now. And you think you're going to be able to do all of these effectively. No, you're not. Every time you change services or add a service, you divide your attention in half. You have to get laser focused. You have to. It has to be boring. I want you to get to the point to where you walk in the office and sit down and twiddle your thumbs and say, I don't have anything to do today. I don't know what I want to do. Guys are out doing their work. The office staff's doing their thing. Everything's taken care of. Marketing's taken care of. Phone's ringing. Like, I don't, I guess maybe I'll just go to the range today and practice for a while. Or maybe I'll go ride my motorcycle. That's where you need to get to. And those are boring businesses. It's boring. Those aren't sexy businesses. Yeah.

There's maybe like five people in the world who want that service, right? If that's what you want to do, then you do that as a hobby and as a passion, but you still have to get to that point, especially if you're starting out, you have to start out doing basic 12 by 12 floor tile by doing basic subway tile. That's where you start out. That's your bread and butter. And as you get more profitable, as you get more well-known, as you expand your knowledge and your processes and you get it to where it's so dialed in, and then someone calls you and is like, hey, I want this off-the-wall crazy. You're like, yes, that's a custom job. It's going to be 10 times more expensive, but I can definitely help you. But you guys think that that's how every single job is going to be. It's not, especially not when you're starting out. You have to be well-known, right? No one's going to go commission a piece of art from somebody that just started last month and pay top dollar for it. It doesn't happen that way. Everybody's got to make their case, build their value in the marketplace. And the way you do that is by being very laser specific in one thing. What you need to be doing, the takeaway here, is you need to look at all of your services, figure out what your revenue is and profit margin by service, and start whittling out the ones that you don't do or don't make you much money. And this is key. This is the most important thing. If you cut out building ponds, If you're a landscaper and you build ponds and you go through this and you realize I only build two ponds a year, I don't make any money. I'm cutting those out. Perfect. Good job. Now, next week, Murphy's Law says you will get a call from somebody who wants to build a pond and it's going to be this amazing pond that is going to cost $100,000 and you're going to be like, oh my gosh, I can't. This is the one I always wanted.

No, you have to have discipline and say, we don't do this service anymore. That's the discipline because most of you will fall back. Most of you will take that, especially if you get a little couple of days where the phone's not ringing and you got a little one week gap in your schedule. You're freaking out. A call comes in for one of those past services. You will take it. Meanwhile, as soon as you sell that job, another job comes in the day after that's going to be way more profitable. And you just missed that opportunity because now you don't have that timeframe available. It takes discipline to say, I'm not doing this work anymore. And then once you've got all this stuff figured out, you can add another service. This is what I was talking to the contractor today on our. Profit Accelerator coaching call. That's our weekly coaching call. It's $97 a month, guys. You get every Wednesday afternoon, we do a call. You can log on, ask whatever questions you want. For $97 a month, you get four to five calls a month for an hour or however long it takes. I have one guy on the call today. It just happened to show up today. Everybody else missed. He got a full hour of my attention. So if you're looking for coaching, and you can't afford to join the profit club or pay a lot of money, the profit accelerator is the cheapest and most effective way to get coaching and help in your business. You can cancel anytime. It's a monthly reoccurring $97. You can cancel anytime. It's like a no-brainer. It really is. If you need coaching, it is a no-brainer way to get help for very cheap. It's too cheap, honestly. And I may even cancel it because it's too cheap. But for now, I still have it going. But I was talking to this contractor today, and he does a foundation repair. And he was talking about somebody else who does remodeling doesn't want to own a business anymore. They just want to be an employee. And a lot of times when he does foundation repair, there's damage to the inside of the house, right? You're lifting up houses, drywall cracks, all that stuff. And in the past, he would just tell them they got to hire somebody else. So he's thinking like a businessman, like an entrepreneur looking for opportunities to connect the dots, add more value, capture more revenue. It's smart. It's a smart play. But I told him, I said, if you're going to do that, this is the only way that I would recommend you do this. And he's still working on his business. So he's still got some stuff going on. So really, this is going to be a distraction. I know he's listening to this podcast. I know he's going to hear this. It's going to be a distraction for you. It really is. But this is why I said the only way I would do it. That person is going to run that entire remodeling side as an entirely different division. So in other words, that guy is like the CEO of a remodeling division. And this contractor I was talking to is like the president. He's going to run his other business and just manage. The division of remodeling. They can't be intertwined. It can't be a situation where the remodeling guy needs to borrow two guys from his other crew and so on and so on. That guy has to run everything, order materials, project management, schedule subs. He has to do 100% of it. And that's the only way that I would tell you to do that, to bring on that service. But if you think it's just another service that you offer and you're going to, you know, everything's going to be intertwined, you're going to set yourself up for major failure. I can't tell you how many guys quit jobs because the owner comes in one day.

And the guy's like, what? Masonry? We don't know anything about freaking masonry. We do, we finish drywall, hang and finish drywall. It's not that hard. I'll teach you everything you need to know. And then now guys who are, have set their life around doing masonry or drywall. Now they have to learn a whole new skill and they get frustrated with it because maybe they've been doing drywall for 10 years. Now you want them to do masonry. They don't know what they're doing. It's a new, it's a new skill. They get frustrated because they're not good at it right off the bat. And so they end up quitting. That stuff happens. I'm telling you right now, if you have a hard time retaining employees and you do multiple different services, very good chance that your team is frustrated because you have them going in so many different directions. Very good chance that that's what's going on. And if you have a simple conversation with them and ask them, what would you rather do? And when I was doing both, I had one guy that loved doing service work. I had another guy that loved doing remodels because he wanted to go to one place every day for a week or two weeks or three weeks. The other guy loved the variety of work, and he may go do three or four jobs a day. Two different people, two different preferences of work to do, and when you start making them do each other's jobs, they get frustrated. That happens all the time. So to recap here, get laser specific. Pick the most profitable jobs each year. Cut out one to two of your least profitable services. Preferably you do it right now and like just cut them all out and pick one or two main ones. I know you're not going to listen to me, though. You're going to give me a bunch of excuses as to why that won't work. That's OK. It's your business. You can do whatever you want. Just telling you what works. You can choose to do what doesn't work. That's your choice. But eliminate all of the ones that are not profitable. And don't be freaking tempted to do that when the call comes in. You got to have discipline. Every person that I've had do this, every contractor that's done this and takes my advice and gets laser focused, makes way more money. Their life is way easier. And it's just all around a better situation. Every one of them. So it's up to you. It's your choice. Guys, thanks for hanging out with me. I really appreciate all the love you guys share. Do me a favor and share this podcast episode with someone that you think may benefit from it. Go leave me a review on your favorite platform. I'd appreciate it. And you know where to find me, Instagram, TikTok, Facebook, YouTube. Just search for the Hammer and Grind podcast and you can find me there. Until next time, guys, remember, profit is not a dirty word.