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Hammer & Grind : Built For Contractors

Hammer & Grind : Built For Contractors

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    Hammer & Grind : Built For Contractors
    Episode•December 16, 2024•52 min

    EP197: Escape the Owner Prison: Richard Walsh's Guide to Scaling and Loving Life

    Being an entrepreneur is a tricky and ever-changing road that requires a careful balance between growth and control. Richard Walsh, a senior entrepreneur and former Marine, says that becoming an entrepreneur is more than just starting a business. It's also about learning how to grow operations while remaining in charge of your personal and professional life. In this episode, Brad and Richard talk about: Richard's background in the construction industry and his transition to coaching The importance of identity in business and how to shift from being a craftsman to a business owner Strategies for systemizing your business to ensure sustainable growth The significance of setting a clear vision and exit strategy for your business How to attract and retain A players in your team and the difference they can make Mentioned: Facebook: http://www.facebook.com/richard.walsh.9231 Instagram: http://www.instagram.com/sharpenthespear X: http://x.com/sharpenthespearame LinkedIn: http://www.linkedin.com/in/richard-walsh-866ab237 Website: https://sharpenthespearcoaching.com/ Links to Resources: Grab Brad's tell-all book: The Contractor Profit Blueprint https://thecontractorprofitblueprint.com Help us get the word out to other contractors by leaving us a review or sharing our podcast! Hosted on Acast. See acast.com/privacy for more information.

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    Transcript

    0:01

    Your journey to self-mastery

    0:11

    requires

    0:13

    discipline, integrity, and respect. Welcome to Hammer and Grind. Hey, welcome back to the show. On this episode, I have another special guest with me, Richard Walsh from Sharpen the Spear Coaching. Richard, welcome to the show.

    0:33

    Thanks, Brad. Great to be here. I'm excited.

    0:35

    Awesome. Now, okay, before we get started, are you in your office there? I see kind of a bunch of stuff going on in the background. Where are

    0:41

    you? You like that? Yeah. So we've got a big co-working space here. We have my office called The Bunker, and I'm second floor, and it looks out into there. Yeah, a really cool place called Iron Tech. You're in Wisconsin, blue Wisconsin. Wisconsin, okay. So it's live, so you'll see people walk by and everything else.

    0:56

    Well, that's kind of what I was wondering. It looked like a public space, I guess is the right word. Yes. And you got the bunker, which is fitting because you are a former Marine. I guess you can't say that, right, Marine?

    1:10

    Once a Marine, always a Marine. Yeah, I think that's the thing.

    1:14

    Yeah, and I don't know if you know it, but I was also in the Marine Corps, so Semper Fi.

    1:18

    Semper Fi, brother, that's awesome. What was your, uh, I bet you I was in before you. I bet you I was in before you. Uh, maybe I'm reaching old Marine status, brother. I don't know.

    1:28

    You might be a little saltier than me.

    1:30

    Yeah, maybe. What, uh, when

    1:32

    were you in 83 to 87? Okay. Yeah. You got me on that. Uh, I was in 95 to 99. So you're a child.

    1:41

    Not too

    1:41

    far. Not too far after you.

    1:43

    My son's in the Corps now. Been in about a year. He's at MSG School. Oh, really? Yeah. I won the Salty Dog Award at basic when he was graduating. We did the parents' night thing and the dinner. And I was the oldest person to graduate at that dinner from MCRD San Diego. So I'm like, me, because I had the oldest. So they gave me a cool travel mug. It said Salty Dog.

    2:08

    What was your MOS?

    2:11

    72-12. I was a stinger gunner.

    2:13

    Okay. Okay.

    2:14

    Affectionately known as the Air Wing Infantry.

    2:17

    Yeah. I was 03-11. I was a bullet sponge. Good for you. What's your son? What's he doing?

    2:22

    He's at MSG school now, so we're in security guard, so he's going to be doing embassy stuff. He graduates in a couple weeks. We'll be down. He's at Quantico now. So he went in basic, then he did SOI. He's actually the last TAC to do SOI instead of MCT. I mean, they're the last one to do SOI. Everyone will do MCT after this.

    2:39

    Oh, okay.

    2:40

    So for whatever reason. But yeah, it's tough. He's been watching people drop since day one of getting in basic. Just people falling out. It's weird. It's different than when maybe you and I were in. Oh, yeah. Definitely when I was in. He had 20 guys quit the second day of the second week when they got their full-time DIs. 20 guys, like trying to kill themselves.

    3:00

    How do you quit?

    3:01

    That's a good question. That's what I ask. You know, they weren't in the platoon anymore. They started with 55. They graduated with 35. That's crazy. Which is small.

    3:11

    We had like 90-something in our platoon.

    3:13

    Wow, we had 55.

    3:15

    Yeah, we had like 99 and ended with like 93 or something crazy like that.

    3:20

    We had one guy who wanted the drop, and his mother had a senator call. You can imagine how that was received, right? We talked him in the stand, so we had no drops. And some fat privates, though.

    3:32

    Let's talk about some business here. Let's talk some contractor stuff. You've been in the business, or you've been an entrepreneur for 30-plus years, and you actually wrote a book called Escape the Owner Prison, The Contractor's New Way to Scale, Regain Control, and Fast-Track Growth While Loving Life. Give us a little bit of background about you and your entrepreneur business. Have you done construction? Give us a little bit of

    3:57

    info about that. Yeah. So it came out of the core. Started swinging a pickaxe, digging trench, because that's what men do, I guess, for $5 an hour. I did that, and a guy came up and offered me a side gig to move some granite, some crushed granite at his house. He had about 35 tons on the street. I mean, he moves to the backyard, spread it, you know, so, okay. Spent my last $85 before payday. Got a wheelbarrow and a shovel. Showed up on a Saturday. This is down in Tucson, Arizona, a little hot. Took about 10 hours. I banged that out. The best part, Brad. He put $1,000 in my hand for that work. Wow. That was the beginning of the entrepreneurial journey. I went, I did this yesterday for 50 bucks. Okay, I know my future. I'm going to work, so I started a landscape business. Kind of went down that road. It became custom water features, boulders, waterfalls. Then I started to steal sculpture to it. Taught myself how to weld. The next thing you know, I'm doing like. you know, world-class projects. I'm getting commissions from like the shed aquarium and I'm doing this really cool stuff and become kind of internationally recognized as a sculptor. And then my water feature, so I was the best in the country. And that was going for about 20 years to 08,09. So again, a lot of stuff, right? So I had equipment and guys were building, we're doing this great stuff. And 08,09 comes and it's a big financial collapse. I lost my business. I lost my home at that time. Not really because of the financial collapse. That was just that final straw kind of thing. It was really what I wasn't doing in my business, business-wise. I was having a lot of fun being out front, being the creative, making cool stuff, being on committees, being published, doing all this cool stuff. But you've got to kind of take care of the house, too, you know. So I kind of lost everything there. I had six little kids at the time, four years and younger. We ended up having to relocate, lost a house, everything. I had to start over. I had to figure out what I was going to do. Started the gym. Okay. Got into training. I opened the gym, did a bootcamp style training with that. It was really great. Scaled that up. Then started the contracting business. So I started doing roofing, siding, windows. Did that for about five years. Scaled that up. Was able to exit that. And around that same time, I'm like, I started mentoring and coaching people because they're asking like, well, how do you go from all that? Losing everything, starting over. It wasn't fun, but I did it. So I started helping them. And then as an entrepreneur, you realize mentoring is free. Coaching, you get paid. So I think I'll write a book called Escape You in a Prison. I did that, became a bestseller. I built an academy around that, started bringing people into it, started coaching them. I went through a few iterations, and that's why we're now here at Sharpen the Spirit Coaching. So, yeah. Awesome. I grew up in the golf course construction and maintenance business, too. So I've always been working the shovel one way or another. You know, I'm kind of talented with the shovel.

    6:41

    Yeah. So obviously lots of failure and success, right? With the first business you said that didn't work out for you. Why not go back into the same type of business whenever you started back out?

    6:54

    That's a good question. And my wife often asks that to me 15 years later. And I was done. I built over a thousand water features. I have recognition of all this stuff. I'm like, here's the big epiphany that really made me stop. doing that, Brad. So I, things are collapsing. On November 5th,2008, we lost a half a million dollars in the day. The day after the election back then, everyone just stopped spending money. No one needed a waterfall. Okay. So you're pretty much, well, so I'm like, but I wake up one morning and I'm thinking about my little kids. They're all four and under. Love to see me when I come home. My one four-year-old was chasing me down the driveway and I'm leaving in my truck crying. And I'm looking at this going, man, what am I doing? all these hours, all this work, all this stress and everything. I'm like, you know, if I stay on this path, like business first, do whatever it takes to stay in business, to win, to be out front, do this thing. I go, I am going to ruin my children's lives. They're going to have broken marriages, fell relationships, right? They may be good at business, but everything else in their life is going to be trash. And I just like, I always feel like God gave me this window to see that, you know, see 20 years in the future. And I'm like, I got out of bed, Brad. I walked into the office and said, we're done today. And I went to my yard, my construction yard. I told the guys, and they've been with me for 10 years. That's what, like, family. We're wrapping up this week. I said, I'm not doing this anymore. I have no idea what I'm going to do. But I realized that my identity became what I did. I was always in the uniform, always had the hat. It was who I was. You know how it is. The guys ask, what's the first question? What do you do? I'm a landscaper. Well, that was, yeah, I'm Rick Rock. I'm the water feature building guy. I'm this sculpture guy. I built this world-class exhibit, you know, so that I had to let go. So I did a bonfire out in the backyard and I burned all my uniforms, got on video, polo shirts. I just burned everything. I go, I'll never be owned by my business. It's never going to be who I am because this has had way too much control over me. I made bad decisions because of it. right because i wanted to maintain the status my ego was massive right and it prevented me from like getting help meaning like taking good advice right there wasn't a lot of coaches back then right you know like now they're everywhere but you know even in 0809 you're not getting a lot right and i'm way before internet i started in like you know 88 89 right so i kind of saw all that so that was i didn't know what i was going to do brad but i'm like we're not doing this And I owned everything, all my equipment from trucks to excavators to everything else. And I sold it all, you know, at a real good time,08,09, when I got like 20 cents on the dollar. So like, you know, but now that, and I'll agree with my wife, might not have been the best decision because I could have done some side gigs, hauling dirt, excavating and working the skids here. But I'm not that way. I'm all or nothing. It's just who I am. And that forced me to do the next thing. That's how I didn't do it again. And I haven't built a water feature in 15 years or welded in 15 years. I've been completely separate from that.

    10:03

    That's interesting. You know, usually, because you said something there that was just right on, which is, you know, the identity, right? And I've talked about this a lot, where, you know, a lot of contractors... They start their business usually as a solopreneur, right? They're on the tools. And then they want to transition. They want to build a business. They want to grow it. And making that shift from, you know, craftsman to manager, there's an identity shift that has to happen in that because they have identified as I'm a carpenter, I'm a landscaper, I'm a pond builder, I'm a painter, right? Like their profession is their identity. So what have you seen? With people that you work with, I mean, does that ring true for you as well and your clients?

    10:49

    Oh, yeah. It's the pattern. That's why I wrote my book. Okay. It is the most common thing in a small business. The most common thing. You know, they can't put the hammer down, literal hammer. You know, they're still playing trim carpenter, but they're doing $2 million a year. You know, what are you doing? You know, and they're jumping job to job and trying to finish because no one's as good as them. And, Brad, I tell them, I'm going to give you that. you are the best at what you do. I'm not here to argue that, but this guy here that's on your team, he's 95% as good as you, maybe even 97. And I can assure you, your clients don't know the difference. Okay. You're doing this out of your own vanity, your own ego. When, how would you train that guy up the last 3 %? Then he's as good as you. And I'll bet you, if you really looked at it, you can find a lot of people better than you. Cause why do you need to do this? Let's give other people the work, right? Let's build a business. Let's go do more work for customers. You know, you can only, there's only so many hours in a day, right? We can only leverage ourselves so much. So what does that look like? Because my thing, Brad, is to have the owner work on what I call their 5%. That's 5% of the business only they can do. The vision. The growth strategies, right? Reeling in the big clients, stuff like that. That's where they need to be. And to pry that tool out of their hand and get them to look that way is the first challenge. It's the first hurdle. But we have to have some tough conversations. But then we show them the path and how to do it.

    12:24

    But Richard, if they make a mistake, then it's going to reflect bad on me because my business is an extension of me. You ever heard that before?

    12:32

    Yeah. So I'm like, well, how do you train them? Oh, you have them do a ride along. That's not training. Okay. You need real. Here's what they do. Here's all their job functions. So everything they do. And one of them might be something every third Wednesday for 10 minutes, but those are job functions. Then my next column is the how to do it. This is how you do it. But then everyone leaves out the third column, the training of the how. There's a whole set system for training people consistently. Right. It's able to be duplicatable because I have a saying and it's everybody leaves. OK. No one's probably staying with you forever. It might be five years, might be five days, might be till their first break. I've had that. They go back, you know, so. So but you have to understand that. Well, what happens when they leave? How fast can you get someone, plug them in? Will they be up to speed? Is that five days, seven days, seven months, seven weeks? What does that look like? So you have to build out these systems and these lanes. When you begin to systemize your business that way, now you put people into a system, not a system into people, right? You're able to plug people in. Now we want people to stay. And if you build these systems and you build these lanes, Brad, people are going to stay. You know why? Because they know what success looks like every day. They know what's expected of them every day, every week, every month, every quarter of a year. They can win every single day. They're at work. Who doesn't want that? No one wants the mystery job. You know, what's the boss going to hit me with today? What are we doing? We don't know. We got to wait till we're here. We don't know. It's by the hour, right? It's literally by the hour. Okay. That's a mystery job. I call that a mystery job. Okay. No one wants to stay at a place like that.

    14:19

    No, I remember working for my old boss before I started my business. And, you know, it was like, be at my house at eight o 'clock or whatever. Right. I'm like, okay. And then you get there and you think you're working inside that day on a. carpentry job because that's what you've been on for the last three days and then you get there and he's like oh no we're gonna be working outside on a deck and i'm like well i didn't bring it's freezing outside i didn't wear any winter clothes you know what i mean like how am i supposed to prepare if you're telling me that when i get there same with like you know loading the tools up when you get there it's like hey load up all of the tools that we're going to need today into the truck and then go out there and execute and i think that You see that the most with people that are truly craftsmen. They're not really businessmen at all. They're just a craftsman who own a business, and they're just hanging on for dear life, really, to try and keep everything cobbled together. Do you run across a lot of people like that in your dealings?

    15:14

    Yeah, for sure. They're just trying to get through the next payroll cycle. That's all they're trying to do, have enough to deposit Thursday to pay everyone on Friday. That's how they're running. Like you say, my son was working for a concrete contractor. in the last year or so. And they're out there and they're doing these walls, right? And it's like, oh, it's got to go two feet to the left, literally. And they're on this site, Brad, and no one's got a sledgehammer. They're concrete contractors. He's kicking the wall. He's the one kicking the wall. They're trying to move the thing. It's like 80 feet long, you know, or 40 feet, whatever it was. But it's like, I'm like, I go, this guy's a clown. I go, you got to find another job. You know, it's the same thing. You know, he, the owner's tracking the hours. He does your time card and he feels like, and he does this. Oh no, going now you're in company trucks and going back to the shop. You don't get paid.

    16:04

    Oh yeah.

    16:06

    Yeah. You can't do that. That literally is like illegal. I mean, you get an accident, you're in the company, right? The whole thing. And now, so now he's skimping on all these hours. Like you never know what the hours are. You don't get to see your time card. You have to, I go, dude, just track yours yourself. So when he tells you you work 43 and you really work 53, oh, no, no, this doesn't count at lunch and this and you're in the truck. And then you're a hostage because you can't drive to the job site. And he's driving around looking at other stuff and you're sitting there off the clock. So it's crazy stuff like that. And that's the thing. And these guys, like you said, Brad, the point is that they're not business people, and that's okay. We get it. I love that they want to be in business. that they do something well enough they want to go bring that value to the world. I love that. It's just understanding that that's not sustainable. I mean, you might even do it for 20 years, but life's going to be misery. Yeah. You know, you will sacrifice your family to that altar. You won't be at your kids' games, any of that stuff.

    17:06

    And you kind of touched on this. You notice a lot. I think social media has really set a lot of people up for failure. in terms of owning a business. And what I mean by that is, you know, you see a lot of, whether they're a coach or they're just a business owner, and it's like, oh yeah, you know, our business does $100 million a year. But what you don't see is that this guy has been single, right? Or maybe he's been through five divorces. He works all the time. His, you know, his personal life is outside of work. Nobody would ask for that. But then all you see is the accolades and all the achievement. And a lot of times you do have to sacrifice one to get the other at that extreme level in a lot of cases. I think you talk about maybe in your book, but really, like you said, fast track growth while loving life. Like you can have success while not sacrificing your family or your health in the process of doing that. Can you speak a little bit about that?

    18:06

    Yeah, because I think one thing on that point you just mentioned, like, yeah, there's only 100 million and they're bragging about their gross revenue. they don't talk about their real net profit. You know what I mean? How much are they taking home? How much are you actually keeping, brother? That's what I want to know. You're chasing that number, that front revenue number. Okay. And there's a great saying, gross revenue feeds the ego, profit feeds the family. Okay. Like I want to know how much you're keeping because I had clients who were doing 10 million a year and they could barely take home a hundred grand. That's not a good trade off. I don't think I'm like, what are you doing? Like, you know, you could be kind of on the middle management at Home Depot. Maybe you'd make that much. Oh, yeah. I'm like, what are you doing here? So I totally get it, you know. And I think what they have to do, when we talked a little earlier about systemization and building out these lanes, if you want to what I call scale comfortably, okay, and what that means, it doesn't mean you're on the beach while your company's growing necessarily. What it means is that you've built the systems and the processes, okay, you've made your company duplicatable. Okay. So let's say we have a, I'm a home builder. Okay. So here I am. I got this great team. We have a, what a 50 square mile geographic area. We work in really good. We're here in Wisconsin and I'm killing it in this area. But now I want to jump to the other side of the line, maybe go three hours into Illinois. Okay. And I'm going to set up shop and build homes. Well, you know what I don't get to take with me is my people because they're running it here. Right. So what do I have to do? I can't if I don't have systems and processes, I can't just go to three hours locally and hire some people and hope they bring it all together and execute. I have to bring the systems and process and relocate that, then plug people in who are local. Right. That's how you scale comfortably. And it's never like easy.

    19:55

    Right.

    19:55

    But that gives you a chance to get a quick foothold because then you got referrals, you got a build, you got a market. There's a lot to it when you're talking about real scale. And you can scale your immediate business and go from five employees to 10 and 15 and 20. I get that. But when you're actually going to move locations. So if you're planning on scaling and it works for both situations, right? If I'm systemized here, I can continue to add people to it. It's just now if I want to go further again, cross the state line or go three, four hours away, it's very easily duplicatable for me now because we understand all the processes and it can all be linked. Right. So a lot of times people want to grab market share. So they run out and they get the business because they can sell. They can sell and they can market, but they can't handle the work properly. So where they're loved in this area and they get lots of referrals and people love them and they always deliver what they say. Now they can't do that. Now they have angry clients. Now they're not getting all the five star reviews. Now they're just dealing with massive headaches. Now they're gone because they got to go save that sinking ship. Now they're away from their family, right, for three weeks at a time or all week come home on the weekends and that kind of thing, right? So all that stuff starts to snowball, right? So they jump out ahead to grow, but they're not prepared to grow, and that's when they fail. They're overleveraged, overextended, right, and all of a sudden everything collapses. So they actually ruin that great thing they had by prematurely expanding.

    21:27

    Make sense? Yeah, growing for the sake of growing, right? Like kind of almost to the vanity, I call them vanity metrics, the revenue, right? Top line revenue, I call them vanity numbers. But it's like growing for the sake of growing. One of the questions I ask people when I talk to them and they, I'm like, you know, what's your goal? Like, what do you, what do you want to accomplish? Like, what are you trying to do? And they go, well, I want to build a $10 million business. And I say, okay, why? Why do you want a $10 million business? Well, I don't know. I just thought that's a good number. And it's like, that's not a reason to do it. I mean, what if you could have a $2 million a year business and take home $250,000? Would you be okay with that? Why do you have to have a $10 million business? Or why not a $50 million? A lot of it's just, I think it's a good number. Or it's more of an ambition type thing where it's like, I just want to say I have a $10 million a year business, even though it may kill me in the process. I just want to be able to say that. And so go ahead. Yeah,

    22:27

    you're right. No, I try to use this analogy. Okay. So think of your business as an apple tree. Okay. You want this apple tree to grow. Do you want an 800 foot apple tree that just keeps growing and growing and growing and the fruit gets higher and higher and higher to get? Right. And it keeps going because what's another thing that grows endlessly, you know, and I'm basically out of control. I'd call that cancer. Right. Yeah. And what does that do? It kills its host. All right. That's what it does. So what if I had a nice 20 foot apple tree with honey crisps on that bad boy? And it's just loaded with that. Go up and pick these things real easy. And I say, you know, I'd like to do more, but I think I'll go plant another apple tree. Maybe it's another business. Maybe it's that, and it'll grow. And, oh, that's a really good fruit. Oh, I'm good. Next thing you know, you have an orchard, okay? And you have multiple businesses because you know how to systemize. You know how to build. You know how to run this. They can be related, either linked to that, or they can be completely different, but you know how to do that, right? That's true entrepreneurship. But now you have a manageable orchard with amazing fruit that's being produced on every tree. Not one giant Amazon apple tree, right, that's doing all this stuff. And to your point about the question I ask is how much is enough, right? Like you're saying, well, how much do you want to do? They say, Tim, well, how much is enough? And we call it exit strategy. So I like to pull people, and I love if I can get them before they launch their business, I make them do the exit strategy before they start their business. And people think it's kind of counterintuitive, but you need to go out to the end, Brad. Pick a number. How much is enough? You know when they ask John D. Rockefeller how much is enough? You know what his answer was?

    24:08

    I want to say it was like just $1 more. $1 more.

    24:12

    Just $1 more. It's like he's never done, right? He's just agreed it's just endless, right? But pick a number, okay? So whatever that number is. Okay, let's say they want $10 million. Well, now what do you do? So I want $10 million in 10 years. I want to be at $10 million in 10 years. Simple. You got a dollar and you got time. Now you have to reverse engineer. Okay, so a $10 million business in this sector. What does that look like? Here I'm in day one or you're in year three, whatever it is. And like, what do I need to be doing every step of the way as I come backwards? Right. Say, okay, so at 10 million, I want to bring home seven figures. All right. So I'm going to have a seven figure income as a salary as the, as the owner founder. Right. Great. But if I get to the end and I've built a business, someone actually pays me $10 million for great. I get my 10 million, but what do I lose? A million dollars a year. Because I'm no longer in the company. So what would be the smart thing to do? Oh, let's back up that 10 years ago. I need to start accumulating assets that produce income. I need $83,000 a month because when I get to this point, I'm going to be making seven figures. And if I've got $83,000 a month coming in passively, real estate investments, whatever it is, now I get my $10 million, I still got a million a year coming in. I don't lose anything. And I'm not working for that. They're generating their own money. It also tells me when I can hire people. When's the first person coming on? Because I know now. I know where I need to be. I know the whole path. So this exit strategy, this endpoint, it becomes a great business filter. Because you get all the shiny object stuff, people give you all this opportunity. Hey, you should do this and make this money. Okay, let me run this through my exit strategy. Does it get me closer or does it detract from it? If it detracts from my exit, it's a hard no. If it gets me closer, game on. we're going to do it, right, because I know where I'm going. So it's really important. I'm giving kind of high level here, but you get the idea that if they understand where they go and not just some random number, they quantify it. You know, what does 10 million mean in this industry? Are you working at a 10% margin or are you working at a 56% margin? You know, so what does it actually mean? You know, so once they understand these metrics, they can really build a business because they know they need it. Because if you came in, Brad, and you want to buy that business, Here's how I think the exchange should go.

    26:33

    Hey, just a quick timeout from the show.

    26:35

    If you're a frustrated contractor who's dealing with low profit

    26:38

    margins, stuck working on the tools every day, or doing free estimates for people who are never going to hire you in the first place, I invite you to my private contractor community, The Profit Club. where contractors just like you are adding two to three times more profit each year without producing any more jobs and finally getting completely off the tools to never do another free estimate again. So if you're ready to increase your profits, stop doing free estimates and get off the tools, then all you have to do is click the link in the show notes to learn more about the Profit Club. and see how I can easily two to three times the cash in your pocket give you a proven sales process that will convert more jobs with ease and get you off the tools once and for all. And the best part is you can do all of this without having to produce more jobs than you currently are. Click the link to learn more. Now let's get back to the show.

    27:28

    You guys negotiate, you're looking at their business, you know, maybe I get 10, maybe I get 10, five of you. You hand me a check, I shake your hand, I'm out the door, you're in. Nobody knows the business sold because it's run so well that nothing changes. You're just a new owner. That's the business you want to build. That's a self-running business. You can make your tweaks and all that, but I'm out. I got my 10-5. I got my million a year in passive income. Yeah, life's good. I can go on to the next thing and rinse and repeat, right? So that's kind of my quick overview of what that looks like.

    28:03

    Yeah, I think you call that like creating a vision-driven business. Is that right? Right. Every decision you make is being judged against the vision of what you're trying to build.

    28:14

    Exactly. Yeah. So strategic vision is really the purpose everybody's working for in the company because people want to work for purpose. Okay. So newsflash to everybody, money's number three on the list. People don't go to work because money's the number one thing. If you think that, you really have to change your mindset. Okay, because you'll never keep anybody. If it's truly money, then they'll sell you out for 50 cents an hour and move down the road. Right. Right? If it's truly money. The number one thing is purpose. Okay? The number two thing is recognition and quality feedback. The number three thing is quality pay. Okay? Notice I said quality pay. I'm not saying people, they want good money, but that's not what drives them. Right. It's the purpose. And when you have a vision, when you're a vision driven business, everybody in your company knows exactly what you're trying to achieve because the vision is unfulfilled. Right. So we're looking forward 18 to 24 months. What is going to be now what it is now. And when you lay that out and then everyone knows where they're the hero in that part of the journey, how would they do makes the difference to make that get fulfilled. That changes the culture in the business. Now everyone comes to work with purpose because they don't want to let each other down because we're trying to fulfill this vision. And when I do have to let someone go, it's because they can't fulfill the strategic vision. Yes, they may be incompetent, okay? But the reality is the outcome is they can't fulfill the vision. They can't be here. We have a vision to obtain, right? So when you drive that way, people are, it changes kind of the mindset inside the business and it gives that complete direction. You got purpose. Then you got recognition, meaning you're doing a good job. You recognize them either publicly, privately, both. But also you give them quality feedback. Hey, Brad, man, you're kind of not hitting this right. Let me show you. Can we try to fix this here and get you back on track? Because I don't know if you're struggling here or what. Oh, sure. Okay, fix you up, boom, back down the road you go. Right? That's quality feedback. If it's done right, it's the good correction, right? Let me just help you be a little better. And then you've got your pay. Then you work in the quality pay after that. But you get those first two, they're going to stay because the hardest thing is retention, especially in the trades, in construction. These guys are skilled. They're skilled workers. But if they're going and being treated like crap, which most of them are. You know, they're pushing so hard from the sell, sell, sell while they're doing their job, right? You get these systems where, hey, you can make more money, and everything's based on you selling more, selling more, selling more so that you can earn an income when you're a plumber. Okay, that's a hard mix. Now, there's some great guys out there. I have one here local. I was talking to his wife who's here at my offices here, and he's a project manager for a mechanical company, right? And I said, oh, yeah, well, he's a project manager. And he goes, hey, he does some sales. So, yeah, what does he do? He goes, well, last year he did $3 million in sales. I go, and he's a project manager? She goes, yeah. I go, okay, you are married to a superstar. She goes, yeah. I go, holy cow. Will he be on my podcast? So I'm going to bring my podcast. I got to talk to this guy, you know, because that's something, right? But some people are good at it, but others aren't, right? So it's all about building that vision, and everyone knows where they fit. Again, back to the mystery work, right? They don't want that. But they also want to know they're making a difference in different ways.

    31:46

    Well, you said something with that. I mean, the guy is doing sales and project management. I would be asking, why is he not doing more sales? You know what I mean? Like specifically just sales only because it sounds like he's a rock star.

    31:59

    Well, you know, but then you get those companies, though, that, again, this might go back to what's operational. It's a well-run company. It's a good size. Right. And it just seems to work out. I don't know. Maybe they have more struggle getting getting project managers than they do salespeople, which would be unusual. But it

    32:16

    happens. You always have anomalies. You always have anomalies where it's like you got one guy who's just really good at PM and sales and it fits in a need that you have. Let's make it work. But you try that with 10 other people and it's going to fail flat on its face. You know, that's so a lot of times you're. you're actually changing the job description a little bit to fit the skill set of the people you have on your team.

    32:40

    Right. And that there's a little place for that. Yeah. But when you really haven't, when you haven't built out those lanes where you have the boundaries, the expectations, the consequences where people actually know what they have to do. They, again, we talked about, they know what success looks like in the daily, weekly, monthly, quarterly basis. Right. Then you can get the right people because the A players, They aren't coming to a hot mess. No. A players want to come and win. And if they're in sales, just drop me in the lane. Let me run to the goalpost. That's what they want to do. I'll make money for me. I'll make money for you. Everyone will be happy, but I'm not going to create the system. I'm not going to build your business in that way. I'm going to put fuel in the tank with money. because I'm out closing deals.

    33:25

    It's so crazy. A lot of guys don't understand this, like even with systems. And one of the easiest systems to like, to wrap your head around is like a project management system, right? Whether it's scheduling or, you know, estimating, invoicing, whatever. If you just pick like project management and specifically scheduling, if you're a small contractor listening to this, maybe you have five or six employees or whatever, and you're still. Like just telling people like, hey, we're going to be at the Smith job, you know, all week, show up at eight o 'clock. And it's just verbal and written down paper. And you have an A player who's working at a competing company and he's looking to jump ship, but they're using a software. They're using, you know, any of the softwares out there. And that's what he's used to. He's not going to want to go back into an analog environment where it's all chaos. Right. So like as soon as you interview him and he asks you a question, what do you guys use? Any kind of PM software? And you go, no, we don't use any of that. He's not coming on board.

    34:23

    Yeah. He's going to smile till you're done talking and he's never going to, you're never going to see that guy again. He's gone. He's out the door saying, you got to be kidding me. People still do that. You know, so you're, you're totally right. You don't like builders trend is a great software, right? Really robust. A lot of my clients use it. It's got more than you'll probably ever use. But they do train you in it really well. So my people, they send them for those three-day immersions and that kind of stuff. So this is kind of an offside here on the software. But you want to send your people. You want to get them skilled up in that software, let them know everything about it, because that increases their value, right? Because I'm a true believer that every person on the team should be an asset to the company, which means they're free. They generate more income than they're being paid. Whatever their position, I don't care if it's office manager or site foreman, whatever it is, they are highly valuable because they're A players. Because we skilled them up. We increased their competency, right? We get them to the point where they know this back and forth. And they're happy doing it. They understand the purpose. Now they're making money for the company because of who they are and how they can operate. That's the goal. So people get that in their head. Like, when you come on this team, we're going to make you an asset. Do you understand an asset over a liability? You can have that quick conversation, right? It means you produce. You are a producer. You're not going to get a guy who comes and does the work and complains the whole time. Okay, you're going to be producing. That guy, the PM and the 3 million sales, that's an asset.

    35:57

    Oh, yeah.

    35:58

    Absolutely. He ain't going anywhere. They're not going to let him ever leave. OK, they'll give him whatever he wants. Right. So it's a beautiful thing. But you have to have that mindset.

    36:08

    People listen to this. I don't know if they I see it a lot. I mean, you know, blue collar is not going to be a highly educated environment. Right. You're not having people with college degrees knocking on your door right and left. So and this isn't to pick on anybody. I'm just saying it's just the facts of the industry. But there's a lot of people. It's an easy field to get into. Like you don't have to have any experience to go work for a contractor, right? And I don't think people realize. What's that?

    36:38

    It's a low barrier to entry.

    36:39

    Low barrier to entry. And I don't think people realize, like, the difference between a C player and a B player, there's a little bit of a difference, but it's not. I mean, it's noticeable, but it's not huge. But the difference between a B player and an A player is like a 10-level jump in the quality of the employee. And I say all the time, like, guys, you don't have an A player on your team. You may think he's an A player, but everything that you're describing to me is not an A player. Like, if you have to tell him to come in every day or ask him why he's late every day, that is not an A player. And I promise you, once you hire an A player, your mind will be blown because you'll be like, holy crap, I've been doing this wrong this whole time.

    37:22

    Yeah, it's definitions, right? I was on a podcast earlier. We were talking about something similar. I said, here's what a lot of companies don't do, Brad. Everyone's kind of got this high bar. Oh, we want everyone to be like this. Okay, that's cool. And you're going to get a small percentage of people who are going to reach that high bar in your company. But what they don't do is they don't actually set the low bar. Okay? They let people vacillate who's good, who's the slacker. No, we have a low bar, and the question I always ask is, okay, so you've got a low bar. So if I hire someone and they do everything at the low bar level, are they a good employee? No. They say no, but I'm going to change your thought, your thinking on this. If you've set the low bar, that's a yes. Let me tell you why. If they show up every day, they're on time, they don't leave early, they do their work, they do the low bar, the minimum of everything you've got on there every day, and now it's five years, it's seven years, it's eight years. That's that person. That's a good employee. Okay, because you set the low bar. Low bar doesn't mean that they get to be late all the time. It's not a low bar. A bar is standards. Right. So if you dip below the standard, you're out. So if I get someone who's sick, because you're always going to have, there's four levels of employees, right? You got your ones who are your superstars, right? Never have to tell them what to do. They're on it. They'll do it. They're always there. Always do the extra. Then you got the twos who will do everything you tell them. Do it well. Kill it, right? One and twos. That's what we want. One and twos like that. And you get the threes. They're not asking what they can do. They're being told to do it. They kind of do it. They kind of get it done and they're pretty good. Then you got the fours. These are what I call the slacker Steve's. Always moping, always complaining, always late, always calling in sick. We don't want them at all, right? They're the cancer that we want to get rid of. So if you think about that, number three probably can hover at that low bar depending on where you set it. But the company has to set the low bar. That's what they don't do. They just tolerate these mopes because they've got a pulse. Okay, you've got to set the low bar and they say, listen, this is the bar, you go below this, you're out. And they have to follow through. It's like kids. You've got to follow through on the consequences. Idle threats don't serve anybody. Right. So they dip below that low bar, they either get their stuff together and come back above it, or they're out. And if you can set those two bars and everyone's working in between. your company will hum.

    39:49

    Yeah, but I would say, like, why wouldn't you set the low bar higher?

    39:53

    Well, that's what I meant. You get to set it.

    39:55

    Right, but I mean, why not set it, like, really high? And then, but is that just because you're not going to find enough people? And what's the downside of having a really high standards?

    40:03

    Because depending on the volume, if you need three people, great, you could probably do that. If you need 30, that's a challenge because they're individuals. And that's why we build the systems. We were using this example earlier about the military, right? Do they not go lowest common denominator? Do they tell you every single thing to do to fulfill this thing? If you're working on an engine or doing something else, like every step and then it gets checked and everything else, so you can't screw it up. Oh, yeah. You have to follow it. So you can go to that level, you know, and you can start there. Because remember, every complex system is built from simple systems that are combined, right? So if you want a complex thing like everyone at a high bar. How do you begin that process? So what you're really doing is you're bringing people into the entry level, so apprentice or whatever it might be, but you have a path for them to grow and get to be that. Now, they may be an A player as an apprentice, but can they be an A player at the high bar? You don't know.

    41:03

    That's a good point.

    41:04

    You have to give them the path and make it go there, right? You can train them to be one, but they may not be one as an apprentice. But the right training, the right company, the right simple systems that they can delve into, you can change their life. Because I truly believe, Brad, blue collar is going to be the new white collar. Oh, yeah. Okay? This is going to be the new wealthy. This industry, trade service, is going to be – I mean, they're already doing really, really well. Don't get me wrong. I'm talking like – replacing the white collar. Like they don't have jobs anymore due to AI and everything else, but AI can't sweat pipe, right?

    41:39

    No, but they do have robots coming, Richard. Robots are going to be doing some of this.

    41:45

    They're doing it here for masonry. And you know what's really cool? No, it's a really good point. I'm talking to the head of the workforce development for this big construction company here, and they have it, but guess who's coming up into the business? Young people, right?

    41:59

    Somebody's got to run the robots, though.

    42:01

    Exactly. And they love it. They're running them and they fix them, you know, and have you seen, I'm laughing with you, but you ever see a 50-year-old Mason and how he walks? Oh, yeah. And the pain he's getting out of bed in the morning. We've all been there, right? Yeah. Crawling around doing all that stuff. Like, I don't know, there's a lot of people who get into early and go, man, I mean, this is, it beats you up. Oh, yeah. You know, so if you can work the robots and do all that kind of stuff, like, you got longevity. you know, in the trades and you can move up from there and go lateral and everything else. So I'm just saying like, it's a big world. Oh yeah. There's a lot of different stuff and we have to, some of the stuff you really have to embrace and move forward with it. How can you leverage this to your favor? Whether you're a business owner, especially, but as an employee too, you know, and that's why when I say the blue collars can be a new white, is it going to be the new white collars? Because if you're the owner, you need to be looking at these technologies and going, okay, how do I train my people? How do we bring new guys in? What do we struggle with? Getting people, especially in the trade, getting people in, right? There's a real shortage. But if you can show them that path and it's kind of cool, it's not just, you know, mortar on another brick and put it together and scrape it. You know, it's a different animal now. Now you're attracting different people, but they're the right people who can get the work done. So there's going to be that shift.

    43:18

    Yeah, I mean, why do companies rebrand, you know, after 10,15,20 years? Because things change, right? And so, like, you have to, you should always have your finger on the pulse of technology and trends and everything that's happening. You can't just keep your, you know, the proverbial, it's worked this way for 20 years. Why should I, you know, why should I change anything? Keeps a lot of people stuck. You know, I made $12 an hour when I started 30 years ago. I'm not going to hire a new person and pay more than $12 an hour. That kind of mentality. Right.

    43:49

    There's two things to this. First, there's a saying, if you've never heard it, it goes, you know, they say, don't fix what's not broken. Yeah. Break it. If it hasn't broken 10 years,15 years, you need to break it. Break it and do something new. Yeah. You need to upgrade. Okay. And the second thing is going back to that 5% we talked about in the beginning. If you're an owner who's able to focus on the 5%, you know, the vision, the growth. You have the bandwidth now to think about these things we're just talking about. What is new? What is the technology? What should I be looking for in my new workforce? I've been doing this for 20 years. Well, oh, whoa, you mean people are aging out, okay, who may have started with me. So I've got to fill this in. So what is going to attract this new generation to my business? I don't want to go out of business. I want to build a legacy for my family maybe or just whatever or get that great exit money. Because I have something that's still relevant, cutting edge, in the front, right? Because if you're doing it old school, like you're saying, the analog stuff, and then now you hit your exit time and everyone's going, well, you know, that $10 million, I'll give you $2.5 million. Yeah. Because I've got to upgrade all this stuff. None of this stuff is done. It's not even planned for in your company. You know, you really don't have the stuff in place. Yeah, you're not, you know, if you get, yeah, hopefully it's not $250,000. Oh,

    45:08

    yeah.

    45:09

    Because you haven't done anything, right? You're selling a bunch of depreciating assets. I got some trucks, and I got some tools, and I got this and this, but I don't, you know, systems, I don't really have a good customer list and all the other nightmarish things.

    45:21

    Well, that even applies to your labor force, going back to the 50-year-old Mason. I mean, that is a depreciating asset. Honestly, because you're losing the good people. And if you don't have a good recruiting system, if you don't have a way to constantly feed your business with new and fresh talent, then you have another problem there as well.

    45:39

    Yeah. Are you moving these guys into training positions, into leadership, into mentoring? What are you doing for these guys who are getting there? They got skills. They have wisdom. They have knowledge. They've done it all. You don't kick them to the curb. Elevate them and bring these new ones up to speed. That should be their new job. Now they're not physically killing themselves every day. They're watching others do it, right? They're helping them do it, whatever that looks like. So, again, if you're on the 5%, you can think about that stuff. When you're in the mix every day, you can't think about that kind of stuff. Again, you're trying to continue the hamster wheel. keep the hamster wheel moving. That's the struggle.

    46:17

    One last question here. Let me be devil's advocate for a second. Let's say you have a guy who's been in business five years. He's 30 years old, has a family of three, and maybe he makes $100,000 a year, and he's okay with that. He's comfortable, right? But he's like, I don't have plans to build this big business. I don't ever think about retirement. I don't ever think about exiting the business. You're telling me I need to have vision and all this stuff. I don't really care about that. I just want to... continue doing what I'm doing right now in my business. Like what would you say to that person if you were advising them?

    46:48

    Yeah. Say, okay, you don't want to sell. You don't want to stop working. That's awesome. I love it. I commend you for that. So what if you built it like you're going to sell it, which means you systemize everything. You get it running by yourself. You're still here. You still own it. But now instead of working 40 or 50 hours a week, you're working 10, but you're still in it. You still own it. Your profit, your profits have gone way up. by 15,20,25 %? Talking real profit that you're keeping. Now instead of 100, you're making 175. Now you're making 200,000 a year. Would that be okay? Yeah, you don't ever have to sell. This is your business. But why don't you perfect what you have? Focus on that. I get it. You don't want to get out. That's totally okay. I get guys that have died in the machine. You know, I have a friend's dad died in the crane. On this property, still working, I can just find him in the chair. That's where he wanted to go. Right. There's a guy. He took it there, but he probably had a smile on his face. Right. Because he's in the crane. He's 90 years old and checked out. Yeah. OK. So it's OK. But build it so it runs itself. Why not just be the captain of the ship and not working in the engine room? OK. Let's just chart the course. OK. Let's make sure we check on course. That's what I would tell him. I said, I'm all for that. It's not, I got to build it, sell it, build it, and sell it. That's a different animal. But if you're that guy, keep perfecting your business. And when you systemize and build it that way, you'll watch your profits increase. You watch the workload decrease on you. You'll be attracting great people to work there, right? Because you have time in the game. It's secure for them. They have systems. They know it's not a mystery job. Like, that's what I would encourage them to do. So there's work to do. You know, and you can still make your life way better and not go grab another, you know, huge market share. Just continue to do what you do. Just make it better.

    48:45

    Does that make sense? Yeah, it's a 1% better every day, right? I think it's Ed Milet. He says that. Just be 1% better or The Power of One More. That's the book he's got. Speaking of books, what, what I was asking all my guests this, what's a, I mean, obviously your book is out there, but besides your book, what's one that you're currently reading or one that you would recommend?

    49:06

    I just read a little while ago, I finished a book called grit.

    49:10

    Oh yeah.

    49:11

    By Angela Duckworth. Really, really great book. And she's a researcher, right? So you've probably read the book. You can also take the test to see where you fit on the grit scale. Okay. Cause grit is really in, when we're talking this line of work too, cause it's hard. It's dirty. It can be all this stuff, right? Not everybody chooses this. They like an easier path. So I think we need to understand what it really takes to succeed. And it's not I'm the smartest guy. It's not that. It's staying in the game. You know, I'm going through that. Like, I took that test. I'm on 97% on the grid scale. Okay? I am all about grid. A friend of mine gave me the book and said, this book is about you.

    49:48

    Well, you have to be. Being the Marines, you have to have grid. I mean, come on. That's a

    49:52

    requirement. Right. I mean, we. Yeah, we have to, we achieve the mission, right? That's the whole thing. So I would say read that, and it's really cool. It's very practical, and I would put that in play. I think it will give you a perspective and also help you look at who's working for you, you know, and start to see these different traits and stuff. It's kind of cool. So that'd probably be the one I'd throw out there.

    50:14

    Yeah, that's a go. My wife actually does a, she does some public speaking, and she actually has a talk that talks about grit in that book and stuff. Awesome. That's definitely a good book to read. All right, Richard, we're at an end here. I appreciate your time. I want to give you a chance. Where can people find out more information about you or your services, your coaching that you do?

    50:36

    Sharpenthespearcoaching. com. Just go sharpenthespearcoaching. com. That's the website. You can go on there. And let's do this, Brad. This has been awesome. Let's give them a gift. All right. Can you give them a gift? Let's do it. If you go to sharpenthespearcoaching. com, go to my contact page. You send me a one-sentence email. Say, Richard, I saw you on Brad's show. I'd love the free copy of the audio version of Escape the Owner Prison. And I will send it to you. Awesome. No strings attached.

    51:04

    So just email you.

    51:05

    But you do have to listen to me for a couple hours.

    51:07

    So we're going to email you through your website. I just mentioned that they heard you on this podcast and they can get the free audio version of your book.

    51:16

    Exactly.

    51:17

    Awesome. Well, I appreciate you doing that for the listeners. I'm sure that would definitely be another value add for them and their business. And Richard, I'd appreciate you being on the show. Thanks for coming on.

    51:27

    Brad, thanks for having me. I had a blast. This is really good. Thank you.

    51:30

    Awesome. Well, guys, that's the end of the episode. You know where to find me on the social media platforms. You can just search for the Hammer and Grind podcast. And I've mentioned this in the last several podcasts. If you haven't picked up my new book yet, make sure you do that, The Contractor Profit Blueprint. And until next time, guys, remember, profit is not a dirty word.

    EP197: Escape the Owner Prison: Richard Walsh's Guide to Scaling and Loving Life

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