EP26: Are You In The Crazy Cycle?

Are you saying that the cycle is cyclical? That's what you just said.

I think so, dude. I really do. And so what's interesting about this is it can be cyclical, not only seasonally cyclical, but as you scale and you plateau and you level out and then you try and scale again, you get into that cycle again. I mean, I think... I think it's really interesting that you said it's cyclical. And that really struck a chord with me.

Okay. Well, first of all, before we like really define that, let's... There's personality traits. Maybe we should wait for that. But people are built differently and people can handle pressure differently, right? Different personalities can handle things differently. So the crazy cycle might hit people differently even. But the crazy cycle is, in a nutshell, do you mind if I just go there?

Spill the beans. The crazy cycle is when your business basically runs you. We get into business. you know, to run our own hours and make extra money and like really start to crush it. But in a nutshell, I think the most simple, simplistic way to say it is when the business is actually running you instead of you running the business. Would you agree with that?

100% agree with that. But in like the most simplistic form, I could say it is the crazy cycle is when the business is running you. And there's different levels of that, different personalities, different levels. But basically, when you start your business, most of the people we're talking to, I think, come from craftsmen to businessmen. And if you're female, craftswoman to businesswoman, whatever. So that... That comes in like they don't really understand their numbers. They understand their craft really well, how to produce a beautiful product, whether it's a pond or a kitchen or a floor or tile or whatever it is. Craftsman turns businessman. When you get into it, you don't really know the numbers, but you think you're making enough money. You just not, right? And so you work harder and then to make more money and then you have no time. And whether it's with your girlfriend, boyfriend, or your spouses or your kids, you feel like that work-life balance gets out of whack. And that's when the cycle comes. And it's like this massive, massive tug of war between working and living.

Yeah, for sure. And I would say... A lot of the members in our groups and the students in our coaching programs, like the evolution, if we really dissect how they came up, and I want to share this with everyone, is like they're craftsmen. They're amazing at what they do. They're magical at their craft, whatever the craft it is, like Brad said, pond building, electrician, carpenter, whatever. They're making $25 an hour. They're working for a contractor. The contractor's billing them out at $75 an hour. They feel underappreciated. Maybe they got bad culture. Maybe they're in a position where they need to make more money for themselves personally or whatever. And they kind of topped it out with this particular contractor because contracting is tough. It's hard to create opportunity for people below as a contractor. It's a tough racket. It's tough business. So they quit working for that contractor. They start their own business. They charge $50 an hour to make it twice as much money. and they're going to get all the business because the contractor is billing them out at $75 an hour. So they think they're going to crush it, make twice as much money and get all the business. The problem is, I think that is a formula to go right into the crazy cycle. It might take 12 or 24 months to get in there, but that's the conduit that takes you. directly into the crazy cycle because you're making a lot of assumptions and you didn't do your numbers correctly. And that's what I see happen a great deal in the business.

Yeah, that's crazy. And I think that's what's unique about our partnership, Brad, is because I'm 180 degree opposite. I mean, I came into this as an artist, an artisan. I literally viewed myself as a technician and not a businessman. And it just kind of fell into place. And so, I mean, that's a tough travel. That's a tough road to travel, right? And so that's why I think the way we coach is we have such... a broad spectrum of the way we advise people and then help because we've, we've seen both sides of the tracks, right? So, you know, you went into as business and then, but you're a great carpenter, right? And so I came into it as an artist and had to, had to by force become a good at business. And so I think that the way we came to the same conclusion, we were at the same, we're at the same plateau helping, right? So, but we came at a different angle so we can offer different perspectives and assistance.

Yeah, for sure. And speaking about a cycle and talking about it being cyclical, I go through phases too where I lean hard into working on the business and getting it flowing in a certain direction and then I'll go work in the business for a while. work with the boys and do some training and build a waterfall, whatever. And then, you know, I mean, whether your attention goes, money flows, right? I mean, that's like, that's, that's the way you look at it. So if I, if I pour my attention into, you know, working on the business, we scale in a certain factor. And when I turn around and focus back into my team and do some personal training, then, you know, like our, our team gets better and more efficient. And so it's like, It's like, I just kind of like go back and forth with it. And I still enjoy both sides of it, just like you said.

Well, of course, they start to neglect their family or their fitness or their hobbies. Unless they really love their craft. If you just love carpentry, you can wake up and eat and sleep. carpentry. Like there's other things in our lives that we love to do, like ride motorcycles or go shooting or play with bonsai trees, fish, whatever. Like if you skip out on those kinds of things, like you're not as fulfilled in your life. And so you're not as happy. And then it's really bad when all of a sudden your spouse doesn't want to, you know, she's mad at you all the time. And all of a sudden you're in a marriage and she wants to leave you. And you're like, wait, what a second. I'm trying to make this work. So it's like, you're depleting all those other important things in your life of time. And so then that was the tug of war I talked about earlier. You get tugged back in the direction to either your fitness or your spouse or your girlfriend or your kids, right? And then that's when the tug of war begins and that's when it becomes the crazy cycle.

I want to bring up the ignorant part. And again, ignorance doesn't mean you're stupid, you're an idiot. It just means you just don't know any better, right? you feel like, hey, I'm making 50 bucks an hour and I'm making this much per day to do the job. And if you didn't do your measurements correctly on your finances, you're not billing for enough. You just feel like 50 bucks. So here's the problem. It's like after a year,18,24 months, it's like, oh crap, I got to pay taxes. Oh crap, I got to pay this insurance. Oh crap. Sometimes 50 bucks an hour is not enough to make all that happen. That's why the other contractor was charging 75 an hour for your time. And so, But the problem is the ignorance sets in. It's like, hey, I should be able to make all this happen because I'm making twice as much as I used to. And so without digging into that part of it, your body, your mental capacity is just like, I'll work more hours. I'll catch up on Saturday. I'll work a little bit later. I'll go in earlier and I'll make more money and make it happen. But that's not necessarily the answer. The answer is to communicate with your clients better and learn how to actually sell. Like not just give a number, like the art of selling is beautiful. And if you can learn that art and sell to people and learn why they want things and learn how to, you know, offer bigger brackets of what you can charge for stuff, then suddenly you're making more money, right? So it's, they neglect that part of it. They don't want to learn that. And that's what they need to focus on those kinds of things.

Brad, you know why? Look, I think you're a pretty dynamite coach. You know why I think you're such a good coach?

Because you're such a dumbass in the past. You screwed up so much and so often. But see, here's the beautiful thing. You have the wherewithal to go like, hey, this was a bad idea. And you have the self-awareness to realize where you screwed up and how you could be better. And then you're smart enough to dive into it. But I mean, dude, I've screwed up a lot. I think that's why... when I talk to people, I can go, whoa, don't do that. You know what's going to happen if you do it like this? It's really going to screw you over. You know why? Because I know that it's 20 years of screw-ups. And so I think that's the beautiful thing about this stuff. But I think you're a great coach because you have that really great awareness and perspective.

Saying you're a screw-up?

Yeah, I would say most contractors that are going to listen to this are in it. I would like to think that most contractors that are consuming our content are already in the groove and kind of getting it. They've already experienced it. Maybe they're not in it now, but they're getting ready to hit the next. cycle of the cyclical cycle. We should call it the psycho cycle, the psycho crazy cycle.

Exactly, man. I love it. So listen, the way out is understanding sales. You have to be able to communicate differently with your customers. It is the way out of the crazy cycle is to be able to communicate with your client and understand why they want to do the project they want to. And guess what? The reason why they want to do the project is not because they found you and you're amazing at what you do and they heard all this crazy stuff about you and they know you've been doing it for 20 years. That's not why they want to do the project. But most contractors focus on that. And so they just miss the why. And so if you understand the why and the psychology behind sales, you're able to, Really get in, build a rapport, sell projects for better profit margins, have a better experience for the customers. That is the way out of the crazy cycle.

Okay, fair enough. I mean, you basically laid out the whole profit funnel and that's important as well. But the sales part of it is really like the epicenter of how to get out of it. But you do need to understand KPIs. You do need the leads through marketing and you need to track everything. And Brad, we've talked about this before. I think we talked about in our webinar and some of our other coaching programs of KPIs, the key performance indicators. And the easiest way I can explain that to a contractor is, can you imagine building a house without a tape measure from start to finish? Build it. Can you imagine that?

Yeah. I mean, can you imagine, you know. cutting the studs and the drywall. I mean, there's a lot of cool tricks that carpenters have and drywall and all the trades have really cool tricks to measure things and do stuff. But can you imagine doing some precision work, you know, granite countertops and cabinets and, you know, crown molding, all that stuff without a tape measure. Like running your business without a measuring tape, which is the key performance indicators, how much money do you need to make? Where's your break even? You know, who's tracking the marketing? How much money did you actually make on the job? Those measurement tools and all the different levels of the profit funnel that we talk about, they're freaking mandatory. Like you have to pay attention to those measurements so you have a score of what you're doing and you can navigate where you're going.

Okay, cool. I understand this could make some sense here. We might get an argument right now. I don't know if this is semantics or not, but is it the chicken before the egg or the egg before the chicken? We need to know our numbers. We need the phones to ring and we need to be good at sales. It all goes together. It's a package deal.

Too many contractors run their business by a guessing game. And that's why 96% of contractors fail within the first decade. Because it's like, I think I've told this, I want to say I told this story on one of our podcasts already, but this really relates to what we're talking about. I remember I wanted to do this dock over a pond and I felt it would be better just to sub it out to a buddy of mine who's pretty good at doing woodwork and stuff like that. It just didn't make sense for me to train my crew at the time and I didn't want to mess with it, even though I love that kind of stuff. I remember meeting up with him. And he walked the job. He didn't say, you know, he didn't, he didn't give me any numbers over the phone. He didn't talk about anything. He's like, I'll run right out there. I'll come and take a look at it. I'm like, all right, come on out and take a look, dude. Do you want me to send you some pictures? No, no, no, no. I got to see this place. I'm like, okay, typical contractor, right? He gets out there. We look at it over and then we walk out in the front because the client was in the backyard. And I'm like, like, what are we talking? I just, I need a number so I can pitch it to the client. And I want to make sure we have all their ducks in order. He's like, I don't know, man. I mean, what do you think? Like 2,500 bucks? Like he just literally pulled the number out of his ass and asked me in a question mark thing, like, I don't know. What do you think? 2,500 bucks? And I looked at him like, are you shitting me? Like, you're just going to guess a number right now? You don't, what the? Contractors literally run their businesses this way.

That's when rules of thumb, like that's a rule of thumb. He's like, oh, the rule of thumb is take your materials, double it, and that's your price. Like it's a total, total crap shoot. Close your eyes, shoot at the target, bullshit. way to run your business. And then we wonder why 96% of contractors fail in 10 years.

This is when it comes into the going rate. What's the going rate? The going rate is some jackass contractor with a wheelbarrow and a shovel in the back of his truck and hires a couple guys from Home Depot at the hardware store and goes to someone's backyard, doesn't have... Workman's compensation doesn't take care of the employees. And that's what's going to set the going rate? I mean, that's what happens in the contracting world. Well, what's the going rate? Well, the going rate is not going to be set by some jackass contractors that don't know what they're doing. I won't allow that to happen. And the people that get on our coaching programs, we're not going to let that kind of stuff happen. We don't play the going rate bullshit game.

And so this is going to spin back to understanding sales because you have to be able to communicate with your clients through that. and help them understand that you're providing a different value. Because if the going rate for a bathroom allegedly is $6,000, but you really need to charge $18,000, you have, you know, I don't want to say a lot of explaining to do, but you have a lot of rapport that needs to be built. You have a lot of value you need to build. You have a lot of foundation that you need to lay out with a client as you explain, you know, your pricing structure to them. And still... be able to win them over at that triple rate above the so-called alleged going rate from the jackass contractor.

That image you just described is priceless. It'd be even better if there's a ketchup stain down the middle of the shirt.

I think we talked about it in the podcast, why contractors fail, right? This resonates with me so much because I'm just... I'm amazed and grateful that I made it past 10 years, right? I didn't fall to this because I was in the crazy cycle. many, many times over. And so I'm so grateful that I made it through that. And I'm so thankful and excited about sharing ways to stay out of that with people through our podcasts, coaching programs and groups and all that stuff. I love that. So I was just going to say, let me think about this for a second. I see you want to say something.

I guess, I guess, you know, I want to talk about shortening the learning curve, but I was going to go somewhere and I got, you know, I was looking at your ugly face across this thing and, you know, I don't know what I was thinking. Let me think about this for a second. I'll get back to it.

right. Listen, I know where I was going with this. And if this doesn't get edited out, it's cool. I don't care. Because sometimes my mind wanders on this kind of stuff. But here's the thing. If a lot of contractors going through the crazy cycle, it's a tough road because people lose their kids. People go through divorce. This is a rough spot. And that's why it hurt. And I think I lost it a little bit here. But people lose friends because they're grinding so hard. And grinding is good. Grinding with a little bit of intelligence and foresight and coaching is a good thing, right? Because the grind is important to make this all work. But what's horrible is some contractors get in the crazy cycle and they fail in less than a decade. And that might be a good thing. That might actually be a blessing. It's the contractors that somehow, someway... fight through that decade, pass the decade, and then go for another decade or two in the crazy cycle. Like they're living hell going over and over and over again and ups and downs and hitting home runs and then almost going bankrupt and like losing their next girlfriend. I know guys in this crazy cycle that have been there for 30 years. And it's tough to see. It's tough to watch. And when I try and help them and I can't pull them out of it, it like breaks my heart. And so, If you're in the crazy cycle right now, I would say if it's been less than a decade and you can't handle it anymore, maybe just pull the parachute and jump out and find some other thing going on in your life where you can make money and be happy. But if you're grinding out through and you pass that decade, for the love of God, man, find some help. And I hope you find this podcast and it inspires you and you read a book. You get into some groups, you get surrounded with some rockstar contractors. Maybe you get to a point where you study sales a little bit, you get a little bit better. Maybe you can afford jumping into a coaching program and take your business to a different level. Because you can pull out of it with a little bit of guidance. Sometimes you're so in it, you don't see the forest of the trees. You need someone outside of it to kind of guide you through and show you the light and pull you out of that living hell.

Yeah, I think, I think, I think we wrapped this up, Brad. I don't think, I don't think I could see anything else to kind of drive this home is to, you know, get a book, listen to a podcast, do some stuff, dive into this. There is a way out. There is a way out of the crazy cycle. And I think some contractors feel helpless in there and they don't know how to get out. But getting out is by asking for help and reaching out and having someone in a positive group reach their hand out and grab your hand and pull you out of that living hell.

Thank you so much for spending time with us tonight. We really appreciate you. This one hits really home hard, hard with us because we've been through the crazy cycle. We've made it past the decade. We've reached out for help. We've got coaching. We've got training. Now we're turning around and helping others. And so this podcast is really super, super important to us. Do the world a favor and share the podcast with some other contractors that are like-minded with you so they can know that they're not alone in this tough, tough grind of a journey. You can reach out to Brad and I through DMs in Facebook and Instagram. And we would love to see you over on our free group, the Contractor Profit group. And if you want to raise yourself to the next level, hit us up in a DM and we'll see about getting you, see if it makes sense for you to jump on into the Profit Club where we grind it out and get crazy with all of our rockstar contractors in that group. So that's it for tonight. Catch you on the next download. Thank you so much.