Contractor Cuts
Join the ProStruct360 team on the Contractor Cuts podcast as we delve into the ins and outs of building and sustaining a thriving contracting business. Gain valuable insights and actionable tips from our experts who have successfully grown their own contracting company from the ground up.
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Contractor Cuts
How to Guarantee Growth in the New Year
Unlock the keys to strategic business planning for the year ahead with our latest episode of Contractor Cuts. Have you ever wondered how taking a step back could actually propel your contracting business forward? We promise you'll gain actionable insights into assessing past performance and planning for future growth, all while learning to create more efficient processes and boost your profitability. Join us as we share the benefits of our January retreat—a unique opportunity to collaborate, set boundaries, and step away from the daily grind. It's more than just planning; it's about returning with a renewed perspective, ready to implement impactful strategies.
Shifting gears, we explore the art of financial planning in hiring decisions amidst varying business conditions. With the election season and seasonal slowdowns in mind, we'll guide you through the complex decision-making process of hiring a new team member as a 1099 contractor. Discover how setting a financial target of $150,000 can justify this critical hire and hear our strategies for navigating the off-season. Our conversations are enriched with insights from industry peers and seasoned coaches, ensuring you have a flexible, financially-driven game plan ready to adapt to whatever comes your way.
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Welcome to Contractor Cuts, where we cover the good, the bad and the ugly of growing a successful contracting company.
Speaker 2:Thanks for joining us again this week. So today we are diving into how to guarantee growth in the new year. You know we talk a lot about what you need to do day in and day out, but what we are covering today is how do we turn from this year to next year and successfully plan going into the new year. This is a shameless promotion for our retreat that we do in January, but the whole reason behind why we do it Classic, yeah. But also, what do we do on those?
Speaker 2:If you're not coming on the retreat, what should you be doing on your own to assess this year and to plan out next year? Why do we zoom out? Why do we take that time? What do we do during that time? And if you're going to do it on your own whether you come on the retreat or do it at home or do your own little mini retreat what should you be doing during that time? And if you're going to do it on your own whether you come on the retreat or do it at home or do your own little mini retreat what should you be doing during that time?
Speaker 2:So we've been doing them since 2016 as a company I think it was when we started just internally it was me, you and Jared and then we started bringing some other people from the team and then it turned into as we started doing the coaching and consulting we've started bringing in I think three years now, four years now, that we've been doing it, with a number of our coaching clients coming along on the trips with us. So it's kind of a big group project. James, run through kind of what a company and like what you when you're growing the company, we'll talk about what we do on the retreat next and kind of what you should be doing to plan it. What do you get out of the that time when we take this? Take a second to go like 30,000 foot view, look at your company. What's, what's the goal there?
Speaker 1:There's. Everybody goes through, like you have a million ideas every day of like, oh, this could be better. Ooh, we really need to do this, we really need to do that. And finding the time to get some of that stuff, like, really think through some of that stuff and figure out how am I going to uh, what's the word? How am I going to execute? X, not execute, how am I going to implement that for my company?
Speaker 1:Um, I think the retreat is a great spot to get some of those things fleshed out, because you don't always find the time or, like, have the space to think 30,000 foot view when you're doing this reactive stuff every day. That just comes as part of the job. So, like, for instance, like a, like a, like a, for instance, uh, very few people I think use in the software, use materials paid to vendor. If they are paying those materials to vendor, you know you've got you're working with a cabinet person and they it's a $24,000 job and you put all of that in labor and you're going to be paying that out taxes on labor instead of what you know Separating out. Yeah.
Speaker 1:Like 60% of that's probably material. Yeah, so stuff like that, where it's like I need to figure out how to make sure that either me or whoever my project managers are that we're doing that because it's going to save us on the backend. If you look at your numbers for this year and you're reviewing, how do I make more profit? That's one spot that I think every single person that uses this software can find profit is using that more accurately.
Speaker 2:Yeah, well, and I think, like what you're saying, I feel like day in and day out throughout the year. There are so many times it'd be so cool if we did this, it'd be great if we oh man, this is if we can just change how we do this. But the implementation side is you need the capacity to be able to pull out and take a minute to how are we going to implement it, what are we going to do to implement it, what does that look like? And take four hours to go over implementing some of these changes in your process. You don't do that in the normal day in and day out. We don't sit back and say, okay, let's take half a day to plan out how we're going to do this and the second half of the day to figure out why and how we're going to roll out to the to.
Speaker 1:We have a ton of fun and there's stuff that, like you know, there's extracurriculars. You're just hanging out with guys and sharing war stories and stuff, but it's so important and we'll talk about. I think in the ADHD stuff we talk about all the time, it's like you need to have fun, you need to integrate play into what you're doing. Fun, you need to integrate play into what you're doing. And when you're looking at like these boring processes and stuff, this is a great space to be collaborative with people that are in your industry. Chat with them about how, like, how do you do this? Do you do this? How could like, how do we do this, and that that exchange is a lot of fun. Stuff comes out that you're like I would have never have thought of that because I don't think that way, but that's a really good idea, like it resonates with you.
Speaker 2:So pick each other's brains. Why do you do it that way? How is how are you doing this when it's kind of a fraternity of people coming together to to help all of us grow at the same time?
Speaker 1:Yeah, and it's space away that, like, you should do this. If you're coming, you need to let your clients know. You need to let you know your, your people that work with you. If they're not coming with you know this is I'm unavailable. Yeah, uh, obviously, emergencies pop up. Guys pop out on the phone all the time on these things. But the folks that are like I'm going to commit myself to experiencing this trip and, uh, you know, gleaning everything out of it that I can, those guys get the most out of it. You know, gleaning everything out of it that I can those guys get the most out of it. You know, when I can actually separate myself from what's going on at home and all of the work and all of the you know deadlines, I can actually start to play with some of those processes and figure out how do I want to implement this.
Speaker 2:So if you're doing this on your own, if you're not coming on the retreat, or if you do come on the retreat, you want to know what it's going to be like. The way we break the retreat down is pretty simple. We start looking at the past. We look at the last year, the last 12 months, and there's a bunch of worksheets that you do before the retreat where you're starting to plan, pull financials together, pull that, but the goal is what's working and what's not working.
Speaker 2:Let's be real on assessing our business ourselves. You know we've had guys come on this retreat where we're like OK, so you know. Scale of one to 10, where would your average customer put you? Oh, 10. Ok, so how many customers 100% of my customers thinks I'm a 10 out of 10. Well, you're probably not honest with yourself. Let's talk about where there could be slippage there, when, if someone didn't give you a 10, what's going on? So we've tried to dive down and figure out what's currently the most broken part of your systems and processes. What are you implementing that we have, I mean, nothing broke man, it's just these clients, man.
Speaker 1:These clients just suck man. I hired this guy and he ruined everything.
Speaker 2:Yeah, I hired this guy and he ruined everything. So it's looking at the last year, saying, okay, we're going to systematically walk through the year. What did the growth look like? And if you came last year's retreat, what were your projections? What were you trying to hit? What did you win in and what did you lose in? Why didn't we hit that? Oh, I wanted to hire four guys. This year I hired two, but what happened was this, this and this? So it ended up being a net positive. And so we look at that to assess the history. So then we can change how we do next year.
Speaker 2:Right, if you can't just keep doing the same thing over and over again. You know a lot of companies, when they come and we start doing coaching, it's like I've just I'm tired of grinding and ending up in the exact same spot next year. And it's been five years I've been running this company and I feel like at the end of year one and the end of year five, I feel exactly the same spot. It's because you're doing the same thing over and over again, year over year. So it's how do we break those processes that aren't working and implement new processes? So we start with looking at last year what happened, what's good, what's bad, processes. So we start with looking at last year what happened, what's good, what's bad. Let's look at your financials. Let's look at your debts. Let's look at your sales. Let's look at all of that stuff what's positive, what's negative. We break all that down and then we go and start looking at next year. So, what has to change? Let's project out what's going on. Let's look at realistic projections, lay those out as to as to, as to realistic.
Speaker 2:We I think I've mentioned on this before on a podcast we have we've had guys that come in and say, hey, by november I want to make my first hire. And we say, wait, why by november? Well, I just feel more comfortable waiting till then. And we start breaking down when they can make the first hire. And it's like, well, you should do that by may. Like, let's look at these numbers, you've got growth, you customers, you've got it's time to hire that project manager. And they're like you're, you're right, I can do that by May. And so we set goals January, february, march, april to set up for that hire in May. And if it pushes the June, that's okay, we can assess, we can change, but let's set some goals that you're working towards and some of those goals.
Speaker 1:Better be stacking cash to burn on a higher Yep, cause you're gonna yeah.
Speaker 2:That's, that's one of the big, like $30,000, and I'm going to burn when I make this higher and if it works out, awesome. If it doesn't, I can fire him and I'm not upside down. I'm not going on my credit card to make payments. I'm not going If I want to make a hire. Most of the time when we come in to coach these companies, they're saying, hey, you know, I think we need a new guy. I'm going to start looking to hire them, and it's literally an overnight decision to make a hire and I start listing on Indeed to find someone and it's like that's not. You can't start hiring today for a hire that you want tomorrow. It's got to be laid out to where. I'm three, four, five months ahead of the goal of when and how I'm going to hire. And these are all the steps that I'm going to take and the boxes I'm going to check before I give us permission to make that hire.
Speaker 2:I think that's something that we've learned the hard way throughout the years that we've been doing this of bad hires are the number one reason that we've lost money. And so making the hires, budgeting money, what's the cues? That says you've got a green light to hire and then we're setting out the plan. Right, we're setting out over the next 12 months, each quarter. This is my goal, and so then we can keep the accountability where we're meeting and doing coaching or doing any of our business meetings that we have. Where it's like okay, hey, we said we're meeting and doing coaching or doing any of our business meetings that we have. Where it's like okay, hey, we said we're going to do this by end of March. We aren't even close. What's going on? What have we failed at? What's changed?
Speaker 1:Let's reassess the next nine months of this year and make those, those adjustments, yeah, and that's not always a negative thing Like when you, the market has dictated that you're not growing right now. Uh, that's okay. If you planned, uh, we're going to hire this person, Like we me. Uh, I have this plan to hire this guy as a 10 99, as a uh kind of a ramp into a project manager and see if he's got the goods. Uh, that keeps getting pushed back because election was going on. No one's doing anything, no one's making moves. We couldn't. We had to push that back. That's okay. That's a decision that you're making for the betterment of your company. You're going to hold back on that decision because the money's not there right now.
Speaker 2:Yeah, Well and I mean talking about that specific hire it's like through the summer we were talking about it and then it got to a spot of if we can land a bunch of new work, great. If not, we see winners coming. We know what winter looks like. We know what election season looks like.
Speaker 1:Be more specific, not just a bunch, yes, but in.
Speaker 2:You know like we need to land $150,000 of job to cover these two months to make it make sense to hire Above and beyond the current average work that we're doing and so we we plan marketing around that and if we get it, great, we can make the hire. But we're also looking at election and then we're going into november, december, january which are always the slow months for us in in residential and so we say, okay, we know that by march we're going to have that business. If we can can get X, y and Z done before, then we can go ahead and pull the trigger. If not January, february, we're going to start having that conversation to pull the trigger, ease that guy into that job and by March he's trained up, we got the new jobs hitting, we're good to go.
Speaker 2:So it's a game plan financially based around if this, then that, if this, then that other thing happens, if this other thing happens, then we're not going to go that way. But all of that gets done on these retreats. Right, that's what we do. We sit down and look at it and say this is how we're going to make those decisions and you're sitting there with other people in the industry and us as your coaches saying, hey, what you're saying there is not.
