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Contractors: Stop Running Crews—Start Building a Real Company. Here is How to Scale.
19 Plays2 hours ago
Too many contractors stay stuck because they’re too good at doing the work and never make the leap to building the business.In this episode, Brent Oberlink lays out the path from operator to owner. From hiring smart to documenting your systems, this is how you go from crew leader to business builder. If you’re ready to stop running ragged and start running a real company, this one’s for you.
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#MindsetMatters #Scale #BusinessOwner #ContractorCEOr #BuildNotJustDo #BusinessOwnerMindset #ContractorGrowth #SystemsOverHustle #TheBetterContractor #ContractorBusiness #BlueCollarLeadership #TradesBusiness #ScaleSmart
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Transcript
Introduction to Transitioning from Job Site to Company
00:00:00
Speaker
Welcome back to another edition of the Better Contractor. So guys, today I want to talk a little bit about you contractors. We've all been there probably at some point. I want to talk about stop running a job site and start running a company.
00:00:12
Speaker
So this is for welcome back to another edition of the better contractor so guys today i want to talk a little bit about you contractors we've all been there probably at some point um want to talk about up running a job site and start running a company so this is for The smaller contractors that are out there trying or thinking about going from maybe a crew that they're running or a one-person shop or two or three people, but they're wanting more out of life. They're wanting more out of their business. So if that's who you are, then this is the podcast for you.
From Doer to Builder: Scaling Business Effectively
00:00:45
Speaker
So I see too many entrepreneurs, especially in the blue collar or service industries, stay stuck. So because they don't want to make this shift from a doer to a builder. You can't scale if you're still in the weeds every day.
00:00:58
Speaker
So today I want to give you guys some strategies to kind of help grow. Think maybe a little bit differently about that. Ways to get to move from that to, hey, and I now have 10, 15, 20 employees, whatever that goal is for you.
00:01:11
Speaker
um I just know, i look around and I see a lot of contractors when they're young, they're really good at what they do and they go out there and they, whatever it is, home building, remodeling, tree work, whatever.
00:01:25
Speaker
They're really, really good at it. And they are the foreman, they're the owner, and they do a killer job. And they have, honestly, a decent business they're making a decent income. But at some point, your body starts to weigh on you. You start to get a little bit older. And all of a sudden, you don't necessarily want to be the dude doing the work every day.
00:01:41
Speaker
So if that's the case, which it is for most people, you need to grow a an actual business. So today, that's what we're going to talk about. So guys, first... and to remember that you're not scaling a trade. You're actually building a business.
00:01:55
Speaker
So like I said before, if you're the best operator, the best estimator, the best crew lead, you've already created a job. You just haven't created a business. You need to move to creating a business. So businesses grow when leadership steps back from the actual doing and then builds out systems, processes, and people that can be scaled.
00:02:11
Speaker
So you got to get into that mindset that you actually are not just home building, home remodeling. You're building a business. You need to do what a business does. In a business, whether you're in construction, you're a tech company, you're a law firm, there certain elements of that business that they all have to do, and that's what you need to start doing.
Systematizing for Consistency and Predictability
00:02:31
Speaker
Number two, your time should be spent on high leverage or high impact activities. So what does that mean? you need to start hiring the right people. You'll hear me talk about in this podcast all the time about systems and processes.
00:02:43
Speaker
That is the second point. You need to build repeatable processes and systems. Believe it or not, even when you're a one person show or a one crew show, you have systems and processes that you inherently are doing that you may not even be aware of. We need to document those, improve upon those.
00:02:58
Speaker
So when you hire a crew two, you hire a crew three and you start expanding, you already have those systems and processes built that make sure that those crews look somewhat similar to the crew you ran. Cause that's one thing too. I've seen some contractors do is not have a system or a process in place.
00:03:13
Speaker
And they just expect everybody to do it the way they do it. Well, the fact is, if you've never built a system or process and communicated that to them or built that software or have the apps available to them, they're probably not going to do it the way you did it.
00:03:27
Speaker
And what does that mean? That means you have chaos. That means you have customers that get pissed off because they liked you as an operator. And then the second time they hired you, you sent crew two and crew two did not even resemble you, but you are who they hired.
00:03:40
Speaker
That's what the systems and processes get away from. And that's what you've got to do.
Building Company Culture and Core Values
00:03:45
Speaker
You need to create predictable revenue. So what does that mean? That means you need to know your numbers a little bit.
00:03:51
Speaker
You need to be able to go through and find the jobs and the and the niches and stuff that actually make money in your industry. You to do those. You need to lead in culture and vision. That's one thing a lot of people don't think about at the beginning, but it's hugely important as you grow because you may have an awesome attitude and your two or three buddies you hire for your first crew, they're your friends usually for a lot of people.
00:04:12
Speaker
They're people that you knew. You worked with them every single day. Well, you were building culture and vision because you were hands-on with those people 8, 9, 10, 12 hours every single day of the week.
00:04:25
Speaker
But when you step back and start building systems, and this is something I'm guilty of doing, um you got to make sure you're still building that culture and casting that vision. As you grow that company, you got to still do that. But you got to start with, number one, what is your culture?
00:04:40
Speaker
You need to write that down. Write down your core values. Write down who you are. Cast that vision so you start hiring other people that can be replicated as well.
Proactive Systems for Future Growth
00:04:49
Speaker
Also, you need to think ahead instead of just reacting. I see a lot of people...
00:04:54
Speaker
will grow a little bit or try to grow, have a bunch of issues, and then they react to those issues. So the whole purpose of systems and processes, doing all that stuff, is to think ahead, create that stuff so you don't have to constantly react. You're taking action, not reacting.
00:05:07
Speaker
Number three, document everything you do repeatedly. So if you do it more than twice, you probably need to create a systems. These systems are going to run your business as you grow. SOPs, checklists, onboarding guides, these are the things that free you from that bottleneck.
00:05:22
Speaker
So I can think back through as we kind of grew in the very beginning, this has been around 2011, 2012 is when we kind of had a big growth spurt at my company. I look back at those years and one failure I did have, can try to be honest on here, was I did not create enough systems and processes, which is why you see me preach it to you. Now we have those because I learned my lesson.
00:05:43
Speaker
But 2012, I did not have someone telling me, hey, make sure you create all the assistance and processes. I was young, I was ambitious. And for my Young, ambitious self, I thought that most people would probably just naturally be that way. Well, most people are not naturally that way.
00:05:57
Speaker
You have to create the vision, the culture, the systems, the processes in order for everyone to fall under that. But you got hire right. You got fire quick. So, guys, make sure you are documenting everything you do.
00:06:09
Speaker
When you're that tiny company, I would recommend the software. I'd recommend the apps so that when you start hiring, you have a system to make sure those crews look like your crew one.
Specialization: Focusing on Strengths and Hiring Experts
00:06:20
Speaker
This one's hard. This next one, number four, fire yourself from roles. So what what do I mean by that one?
00:06:26
Speaker
Y'all know what you're good at. You know what you're not good at. So in the very, very beginning with LandoCorp, some of the things I did well was recognize that within myself. I also knew what I did not want to do. I did not want to do accounting.
00:06:38
Speaker
I hated it in school. still don't like it. So that was one of the first things I hired out. The other thing I knew, my wife went to law school and I knew there was a lot of liability in the world.
00:06:50
Speaker
um I'm also someone who sees safety and liability naturally well. um So I can look at examples, I look at situations and I can usually see, hey, this is high risk, this is high liability, we need to price this higher.
00:07:02
Speaker
But my point in saying that is, that is two things I hired immediately, the lawyer, because I knew it was important. The accountant, because i knew I didn't want to do it. I didn't want to mess up. So you need to look at the different roles that you have.
00:07:15
Speaker
Say, hey, I am amazing at sales or I'm amazing at culture building. You need to eventually get to where that is your primary thing. The other roles, if someone, if you can hire someone and they can do it better than you, then you need to move towards that.
00:07:30
Speaker
Obviously, if you're a four or three person company, you're not going be able to all of that all at one time. So I would prioritize that list. When you can sub that out, when you can hire an accountant, maybe it's not full-time within your company.
00:07:43
Speaker
Maybe what we did at first was we used a local marketing firm that basically had kind of a neat system where I basically gave them our invoices and bills or invoices each week. I did all the billing.
00:07:56
Speaker
They did all the paperwork. So I met with them once, i think it's once every Friday evening for just little bit, but that worked well. It was a lot cheaper than hiring someone on staff.
Structuring for Profitability
00:08:05
Speaker
Now we have a little bit of both. So free yourself from the roles that you are not good at.
00:08:10
Speaker
Your goal should be to eventually replace yourself as the operator and stay on as the owner and vision caster. Number five, profit comes from structure, not chaos.
00:08:21
Speaker
So guys, I know hustle is a proud word anymore. um It's something that you think probably has gives you leverage over others. Here's the thing. A lot of people have hustle, so that's not quite enough.
00:08:34
Speaker
um What a lot of people do not have is predictability, structure and systems. So you will hear me keep talking about structure. lot of people don't do that and that is actually where they fail.
00:08:44
Speaker
Structure is going to give you fewer mistakes. It's going to give you lower overhead. It's going to allow you to scale faster. The other part of that comes from knowing your number. So one thing I see a lot of contractors not doing and we'll go into this a little bit later.
00:08:59
Speaker
but they don't know their numbers at all, partly because they don't have an accountant. They try to do stuff themselves. They don't track everything they to need to track. You to know your KPIs, key performance indicators. You should know your margins in all of your jobs.
00:09:10
Speaker
You should know all your key financials, your performance indicators, all the things that matter to your company, that keep your company profitable, that keep your company moving in the right direction. So one thing I do ah right now is my accountant sends me about five reports, usually every Friday.
00:09:27
Speaker
actually reviewed them before I jumped on this podcast. But so what those are, they're they're KPIs, they're key financials, um they're compared to previous years. So I can look at those in a fairly quick glance and know, hey, this is moving in the right direction.
00:09:42
Speaker
This one is not. This one has not for five months. This one has for 10 months. And I know where we're doing well and I know where we're doing bad. The importance of this is doing every single week is trying to catch stuff before it gets out of whack. So a lot of times I see a lot of companies,
00:09:58
Speaker
They don't even see an independent cash flow or other major issue coming because they haven't had any of these systems running in accounting world. So all of a sudden they get to November and all of a sudden all these bills that were due, they had no idea they had a cash flow collision coming and they do.
00:10:16
Speaker
And that's what ends up taking them out or really hurting them. So the whole goal with all of this is to prevent that from happening. but also to keep you on track with your profitability. You know, what is your goal for the year? Are you going to hit it?
00:10:28
Speaker
So every week, you know, 52 weeks a year, you should be looking at that 52 times a year to make sure you're actually on track to hit it. And then you can tweak things. You can change stuff up and you can say, Hey, this little niche industry, we're not making money there. So we need to drop it. It's not worth it.
00:10:44
Speaker
Or this customer that we low bid, guess what? We're not making any money on it, but they're, they're 5% of our total revenue. They have no profit, but they're 20% of our time in the office being spent on them.
00:10:57
Speaker
That's a customer you need to let go. So that's how you know that stuff, though, and you can make the decision in a factual numbers way, black and white way. You guys got to know your numbers.
00:11:09
Speaker
Be legit. This is one that kind of aggravates me about the contracting world, is I see a lot of contractors. It seems like they're they're either really legit, awesome contractors, or they are not legit at all.
00:11:21
Speaker
So you need to hire the attorney, hire the accountant, hire the team around you to do things right and avoid
Legal and Financial Foundations for Business Legitimacy
00:11:25
Speaker
those costly mistakes later. I see a bunch of contractors not properly insured. I see a bunch of contractors not hiring, not doing payroll, not doing so many things right.
00:11:35
Speaker
And oftentimes, those the contractors that end up going out there and underbidding and low bidding stuff. And we all hate you, by the way. So anyway, but you got to be legit. So hire the attorney, do things right, set your company up the right way from the very, very beginning.
00:11:49
Speaker
It will cost you some money. but I can go on a whole rant about different things that we did early on and how that saved me big headaches later by having the right people on board.
00:12:00
Speaker
Very, very beginning, having the accountant, hi having the attorney, especially when we started to grow into other States. Um, I can't even, can't even explain how important that is as the very first thing you do, set it up, right. Do it right at beginning.
00:12:13
Speaker
It'll save you. You may think, Hey, oh my gosh, that attorney's charging $300 an hour, $400 an
00:12:19
Speaker
If I do this, this, and this, my bill turning' is going to be $2,500. I've done that before. That thought briefly crossed my mind. But that ended up saving me tenfold that amount later.
00:12:29
Speaker
So do it up front. and Do it right. Do the marketing, the training, the branding, the whole thing. you know Look legit. So when you roll up on site, do you have three different trucks? One's red, one's blue, and one's black.
00:12:43
Speaker
Is one truck branded? The other two trucks aren't. Get that stuff in order and do it right from the very beginning. Even though you're a one-person show or a one-crew show right now, that crew should look, the second crew should look the same, the third one should look the same.
00:12:57
Speaker
Do the marketing, spend the money on it, set yourself up to look bigger than you actually are so you can actually grow into that company. Earlier, I mentioned low bidding. So this is the next point. Stop underbidding.
00:13:08
Speaker
I see this so much in the contracting world. I don't know why it's so prevalent. And I think it's actually because of this. I think there's a lot of people know how to do a trade. and they try to turn it into a business, they don't understand that low bidding is just a race to the bottom.
00:13:23
Speaker
And unfortunately, it has kind of set up, depending what kind of contracting world you're in, you may be aggressively bid all the time. And I get that. However, don't participate in it as much as you do. It's way too participate in.
00:13:37
Speaker
I literally see contractors that don't even know. they Let's just, I don't know. Let's say a million dollar project jumps in their lap. All they think about is I just landed a million dollar project. They were low bid.
00:13:49
Speaker
However, that project actually cost 1.1 million to do. So yay, you got a million dollar contract, but you just lost $100,000 doing it. So that is not a win for anyone, except for the person that maybe sent that out for an ah RFP.
00:14:02
Speaker
But typically what I see is it wasn't even a win for them because you ended up failing on the contract. They ended having to find someone else and ended up spending more than 1.1 million anyway. anyway So guys, you need to bid based upon your actual numbers. So I bring this up on this podcast because if you're trying to go from a one person, one crew show to having multiple, you need to do the bidding right or you will have your lunch eight on cash flow and profitability. and So make sure you know your numbers and stop just trying to be low bid.
00:14:34
Speaker
Actually bid the projects based upon historical numbers that you have, knowing that, hey, this takes me this amount per square foot to achieve. or this is what my payroll, this is my overhead, all those numbers that matter to your financial statements, you need to know all of those.
00:14:49
Speaker
You need to bid the job accordingly. like If you're not doing that, you are running the risk of losing money and you cannot do that for long. So some of you may say, well, I have, all my customers want low bid.
00:15:03
Speaker
Most industries that I can think of that come to mind, there are people that will always want low bid. But let's just compare this to the car industry, for example. Nobody thinks about in the car industry. If I'm a customer and I value high-end, I'm going to buy Rolls-Royce.
00:15:19
Speaker
If I am a customer who wants low-end, I'm going to go buy. i hate to diss the buy in a podcast. ah There's another brand I'm going go buy. I'm not going to go to Rolls-Royce and beg them to sell me a car for $25,000 because I know they will not
Value-Based Bidding vs. Low Bidding
00:15:34
Speaker
do it. And I know the car is worth way more than $25,000.
00:15:37
Speaker
You need to find the customers that want the Rolls Royce. You need to be worth the Rolls Royce price and you need to elevate yourself and actually be the company that people know.
00:15:49
Speaker
i can't actually go to them and ask for the lower brand. That's not who they are and that's not what they deliver. That work is out there and i can think you of just almost any the industry that that it does exist. You're going to have customers who are low.
00:16:02
Speaker
You're going to have customers who are willing to spend. You need to make sure you are the company That is not the low bid company. And what, how I would describe the low bid company typically is in most industries, again, this is not a blanket statement to all, but most industries where I see the low bidding and being prevalent, that is an industry where low bid usually fails, has safety issues, bails on the job, ah cuts corners, whatever it is. And I usually see those projects costing more in the end because they failed, they had to find someone else.
00:16:35
Speaker
They end up, the the customer ended up spending a bunch of hours and time finding a new contractor dealing with legal issues and going low bid benefited. Absolutely. No one, the ones who are more best value. I'm not saying high bid, but best value know that, Hey, I have this scope of work.
00:16:53
Speaker
I want it done. Well, I want one contractor to do it. i don't want to be out there babysitting. That's the customer you need to find that actually gets that that's smart enough to understand that that is actually the most important thing.
00:17:04
Speaker
you're actually meeting their goals, meeting their safety standards, doing the job the right way. You are representing them on the job site the way they would want themselves represented. So guys, definitely, definitely know your numbers. Stop underbidding.
00:17:16
Speaker
Last, this is kind of new. I'm trying to do It's why this podcast exists. I'm about the best at it, but i try.
Building a Personal Brand for Competitive Edge
00:17:22
Speaker
Develop a personal brand. People do want to know who they work for and do business with.
00:17:27
Speaker
So I'm a kind of private person. it It never, ever do I wake up in the morning and think, man, I need to post what I ate for breakfast on Instagram. That never, that thought never, ever, ever occurs to me. Not one time.
00:17:41
Speaker
I am not someone that naturally wants to do it. I'm not someone who naturally wants to do a podcast. I do the podcast. I do some social media posting because I understand most people, most employees, most customers at least want to know who owns that company.
00:17:54
Speaker
Who are they? What do they stand for? And do I want to do business with them? So the personal brand to me is just as much about that as it is anything. We live in a world where And especially if you're doing a business where you don't want to work for the low bid, the low contract or the low price, usually the higher end people want to know who they're working with.
00:18:14
Speaker
So it is nice to be able to Google your company name, your name individually, also pull up and then be like, you know what? I jive with this person. I jive with what they say, what they stand for, who they are.
00:18:25
Speaker
They seem like a good person. So that way, when the bid goes out and it's you versus some company they know nothing about, and you guys are close on price, hopefully they pick you because they simply like you and they know more about you. They're more comfortable with you. The personal brand gives comfort.
00:18:39
Speaker
So guys, if you're if you're not doing a personal brand, I would highly recommend doing something. Get it out there. Unless you're a turd, maybe then don't do it because you're probably not going represent your company well. But if you're a good person, get out there, show who you are, show what you stand for.
Pride and Professionalism in the Blue-Collar Industry
00:18:53
Speaker
But guys, it's time to get serious about the blue collar industry. For those who aren't looking at greatness, you need to start doing so. There's so much opportunity in this industry and it's going to start with me. It's going to start with you. It's going to start with a movement.
00:19:06
Speaker
It starts with examples. Guys, we need to be those examples for other people. We need to do what we say. we need to do what is right. We need to execute. what we need to build. I want to see this industry move in the right way. And I think we're in a world right now where blue collar and service and all that type of stuff, I think has its heyday coming.
00:19:22
Speaker
We live in a world where more and more people don't know how to do this type of work. We live in a world where there's a little bit more disposable income, which means people can hire this type of work. We also have had an education system for years where this type of work hasn't been valued. And I think that is changing as well. I think trade schools will continue to increase.
00:19:41
Speaker
Guys, i would be proud of what you do, but it is your job to market it that way, to execute that way, to be an example for other people underneath you, people who are coming behind us. We got to be that example.
00:19:52
Speaker
Guys, let's change industry. you guys like this podcast, please, please share it. If you're not in our Facebook group, I would definitely join. I think would be a great value to you. There's a bunch other contractors in there like you, like me, everybody in between that are willing to help out, provide some input, provide some insight into whatever you're struggling with right now. So I would definitely, definitely join, share the podcast.
00:20:13
Speaker
But guys, appreciate appreciate you. Love you. I'll catch you next time.