Logan Hey, everyone, welcome back to the Contractor Growth Network podcast. I'm Logan chin hoser, and today I have a special guest. It is Todd to. What of the construction leading edge podcast. But he also does so much more than that. So Todd, welcome to the show, man. How are you doing? Todd Great, Logan, thanks for having me come in. Logan So today we're talking about Jets, which stands for this is your topic. You hit us with what it stands for. Todd Stands for just enough to.
Start. Todd So in my experience it's the root cause of most of the chaos and profit bleeds that contractors are dealing with today. Logan How do you define just enough to start. Like what does that look like? So if somebody is listening to this and as you describe it, they're gone. Oh damn. That's me. What does that look like? Todd There's a pretty consistent set of symptoms and. If you're. Todd If any of these sound.
Familiar. Todd Like details are falling through the cracks, if you're a construction business. Owner and. Todd You're stuck in firefighting mode, spending 25. 50%, 75% of your. Todd Time putting out fires if your team is constantly in reactive mode, if, you're not making as much money as you should if. You're dealing with profit. Todd Bleeds like giveaways, rework schedule delays, Getting hit with opportunity cost. Todd If your desire. To throw your phone.
Todd Out the window and just drive to Mexico, you. If you find that is increasing, and you're frustrated. Your customers if the cortisol level of. Todd Your team is really high. Because they're. Todd Stressed, those are all some pretty common symptoms of the just enough to start up.
Logan And what we're talking about, just enough to start. Is this like just enough to start a business. So you're kind of just like flying by the seat of your pants is is just enough to start a new project. But then all the problems stem because you barely got this thing prepped. Like, I guess when does this trap set in? Todd But actually it it shows up in all. Of those parts of the. Todd Business. It shows up, When starting a business. Todd A lot of people do just enough to. Start.
Todd A lot of people do just enough to get a project started. It shows. Up in hiring. Todd A lot. They do just enough to get somebody on. Board and then. Todd Try to figure it. Out later. Todd But the focus of the. Conversation, the where. Todd Most of the cost lives, is doing just enough to get a project started, saying, we're going to do just enough planning. Actually, it. Probably starts. Todd Much. Earlier.
Todd Like we can only do just enough to get an estimate out the door, and we'll figure out the rest later. Just enough to get a contract signed and then we'll have to figure out the rest of these details later. Just enough to get a project started, get mobilized, get cash flow going. Get the project started. Todd And then we'll figure out the rest of the details later. So that's. Really. Todd Where the the majority of these symptoms come from. The let's get the project started. So just.
Enough to get started. Todd And then we'll figure out the rest later. Logan Well, I mean, we always had this, this idea that we've heard of, you know, you fake it till you make it like this. Does this kind of align with that? Is this people that are just trying to fake it till they make it and they're realizing like, oh man, I'm in the Jets trap. Todd I don't know if it's fake it till you make it, because that's sort of a conscious effort, you know, to.
Put on a front. Like, we've got our stuff together. Todd We're going to act like we have it together. But I think this is. More. Todd We there's this missing phase of, of projects that a lot of smaller. Contractors. Todd Don't even know exists. But it's it's very common. In large commercial contractors. Todd And it's the pre-construction phase. So it's I think for a lot of people it's they just don't know what they don't know. Like they don't know. There should. Be a pre-construction.
Todd Phase. They don't know that there's another way to do. It rather. Todd Than just enough. To start. Todd So I don't think it's a I don't think it's a conscious effort. I think in a lot of cases, people just look around and say like, well, the everybody else's doing free estimates and. Everybody. Todd Else is just rushing to. Get projects started and everybody else. Todd Seems to be focused on. Getting started.
Todd So maybe that's just the way it's supposed to be. But it causes a lot of problems. Logan So what you're saying is this is almost coming from a place of like just not knowing or just you're ignorant to the fact that you should be doing these things versus, you know, you should be charging for estimates, but you're consciously just doing them for free, which is causing chaos. Todd Yes. Yeah, it's it's this unknown secret profit phase. Of every.
Todd Project, which is the pre-construction phase. A lot of people think it goes straight from sell the deal to construction, and that's how it typically goes. Unfortunately. Todd With a lot of residential contractors and in some smaller commercial contractors, but with big commercial GCS, there is a pre-construction phase because they actually obsess over this pre-construction phase because they know the pre-construction phase is.
Where profits are made or lost, schedules are made or lost, customer experience is made or lost. Todd So they that's why they obsess over it. But most like when I had a residential business, I didn't know it existed. I didn't really think about it. Nobody ever told me, hey, you need to focus on your pre-construction phase. It was just like, sell the deal. Then let's get started. Then we'll figure out the rest as we go.
Logan So what should the pre-construction phase look like? Like, what are you doing during that time? Well, let me start. Todd With what people do or what people don't do that causes problems. There are a few key things like allowances. So starting a. Todd Project with allowances is it's. A recipe for disaster. Todd So what a lot of people do is they plug an allowance. In for flooring or.
Todd Cabinets or painting or something, and they say, we don't need to figure this stuff out yet. Let's get the contract science, put an allowance in there and then we'll figure that out later. For later comes in the middle of the project and the selections are made. The allowance gets reconciled, and typically it comes in higher than what the client expected. Todd And then the client's like, what do you mean? You put the markup on top of the allowance. And all these.
Uncomfortable conversations. Todd Happen in the middle of the project, or maybe even at the end of the project, because the actual pricing wasn't figured out. Another thing people. Do is start. Todd Projects without a complete design. The is not complete and they just say, let's just get started. We'll figure it out as we go, which causes lots of problems. Starting projects. Todd Without fully buying out the project. Sourcing all of the materials.
Todd Writing all the subcontract agreements. People don't do that. So what the just enough to start trip looks like is literally doing just enough to get to the next step. What do we got to do to get a contract signed? Let's do the bare minimum. Todd To get a contract. So it's like there was a movie, Pearl. Harbor. Todd An old movie. And in the movie. There's a. Todd Scene. Where they're launching. Todd These, Bombers, like B-24 B-17 bombers off. Todd The decks of aircraft. Carriers.
Todd And these things are heavy. They're not designed to fly off aircraft carriers. So there's a. Scene where. Todd Alec Baldwin is the. Is Doolittle the guy leading the raid? And he's, like, throwing all this stuff out? Throw the machine guns out, throw the fuel cans out. We get to strip these things down. We have to have just enough to take off. And unfortunately, that's how a lot of. People approach their the projects.
Todd Like, let's do just enough to get a contract side. Let's do just enough planning to get a. Framing crew started. Todd Let's do just enough to get to the next phase, and then we'll. Figure out the rest later.
Logan And kind of back to that, like ignorance versus, you know, consciously doing this, is this in their mind. Like, look, there's a there's a level of like, if we do too much time kills deals. We know that all this friction could potentially, you know, if we add this stuff up, like maybe it is going to be past that budget, like, I guess how much of this is, you know, or I guess where's the line of like doing all the pre con stuff that, you know, is going to make for a better project, but also balancing that with we still got to make sales because ultimately, if we just spent all of our time doing this
Logan and don't get the sale, we got no business. So I guess how do you balance that? Todd Yeah, that's a good question. I think part of that, part of it goes back to the free estimates, right? If you're doing free estimates, if you a custom home. Builder. Todd Remodeler, deck. Builder, pool builder, if you're doing anything that requires. Todd Some level of design and selections, even light.
Commercial. Todd General contracting, maybe even landscaping if you're doing free estimates on a project. That requires. Todd Design and selections, then. You are forced. Todd Into the just enough to. Start trips. Todd So I guess in a way, you're consciously choosing to do just. Enough to start. Todd Because if you're doing a free estimate, you can't figure all this stuff out, right? You can't spend the. Time and energy.
Todd To do the design work for free and make all the selections, without getting paid for it. You just can't do it. So you choose, consciously or unconsciously, to to do just enough to start. I think, In the later phases of a project, like when it comes to pre-construction, most construction guys and gals. Are. Todd Kind of cowboys. You know, we we're entrepreneurial. I was this way. I still have to fight against it, but it's like, we're going to do this and we're going to we're going to get.
Started and we'll we'll figure out the rest later, right? Because we're resourceful, we're entrepreneurial. Todd We'll figure this stuff out later. And there's this belief that we don't have to figure it out. Now that's I think that's one of the root cause problems is we don't need to figure this out now. So we choose to just get started, do just. Enough to start and.
Todd Then kick the can down the road. And, we later comes it's coming at some point. And usually it just happens when there's a fire to put out. So I think it's some of it is conscious, some of it's unconscious. It probably depends on on the situation and the person.
Logan And is this something that you your prescription for this would be like, look, you got to really buckle down and get this stuff dialed in. Or is this you're a cowboy at heart and instead of trying to, I don't know, wrestle in the cowboy, I don't do much cowboys, so I don't have a good analogy for how you rope rope roping.
Logan And that's what I was looking for. Instead of trying to rope him in. Is it better for them to hire somebody or or assign this to somebody else on the team and go, look, I'm going to delegate my knee to see this thing through on the front end. Like, who's supposed to do this in the actual company, especially when you're first starting? Todd Yeah, that's a good question. And what I, what I've seen a lot a lot of our clients. Who are construction business owners.
Todd They are the, the visionary. Right. The they're the cowboy. They're the they're big picture ideas, visions for the future. Plans to grow. Todd They want to tackle big problems. They want to scale the business. They want systems and processes. They desperately want the systems and processes. But they are not the right people to. Todd Build them because they don't have the attention to detail. They don't have the attention span. They're just not. Wired to create.
Todd These things. So a lot of people are stuck in this situation of, I've got to have them. And yeah, I'm a visionary, so I'm gonna I'm just going to buckle down and I'm going to figure out how to do this. And it. Rarely works. Todd They end up. Being miserable.
Todd And they don't actually get any systems and processes in place. So what is better is to think there's a great book called Who Not How, that I read last year. And most people think, well, how how can I fix this problem? How can I solve this? How can I create systems and processes? And a better question, according to Dan Sullivan. And Benjamin Hardy, who wrote. Todd This book, who not how is think? Who can help me do this? Because I'm. Not. If you're that.
Todd Classic visionary, then you need to realize. You're not wired. Todd To create these things. You're you're wired. Todd To be the visionary. So think who can help me develop this stuff? Find somebody who is good at this, somebody who has a proven system to follow and then just outsource. Delegate it so you get the benefit of having the systems and processes, but you don't have to go through the brain damage of trying to create them yourselves.
Logan Especially when you're first starting off. I mean, I know for most people, we all start off by ourselves. I mean, this is how I did it. It was just me. I'm definitely as time has gone on and we're going through iOS right now as a company, I have learned that I am a visionary. I've always thought was like, oh, that's Steve Jobs is the visionary because they want to change the world.
Logan And I'm I'm not rolling up every day in a black turtleneck. But when they define what a visionary is, that is me to a tee where I like to meddle in stuff and I like the big sales. And but at the same time, when you first start off, you don't have the money to necessarily, I guess, hire somebody or maybe you do.
Logan So I guess if you're you're first starting off because you know that, who knows how it's fantastic. If you cannot afford that person or find that person, what do you do in that situation? If you're you're newer and you're trying to find your who and maybe it's tough to hire who. Todd But what I this is a another example of just enough to start. A lot of people think when they. Start their.
Todd Business. Well I don't need to worry about that yet. Right? I just need to make sales. I just need to get started. They think, you know, I'll I don't need to get my bookkeeping system in place yet. I hate bookkeeping, I hate accounting, hell, I don't even know if I'm going to survive the first year, so why would I. Bother worrying about.
Todd My bookkeeping? Same thing with putting systems and processes in place. But we've had hundreds of people come to us who have done just that, and they deal with the consequences of not putting systems and processes in place upfront. Most people do just enough to start and then they deal with the consequences. It's sort of like if you were. Todd The equivalent of building a house and saying, you know what? We're going to. We're going to frame this house.
Todd I'm not sure we need a foundation yet, so we're going to frame this house on. Dirt, and we're going to wait. Todd Until. The drywall starts. Todd Cracking, and then we'll come back and we'll shore up the soft spots right. That's the same as. Starting your business.
Todd Without putting these foundational systems and processes in place and then saying, I'll figure it out later. So if you want to be successful, if you want to have a business that survives and grows, you've got to have these foundational pieces in place. So the problem is think people think they're optional. They think, well, I don't need to have a blueprint for my business. Todd I don't need to have processes. They believe they're optional.
Todd And this is probably why the failure rate is so high in construction businesses. It's also why so many people come to us years later. Because they didn't put the systems in place at the beginning. So how do you do it? Yeah, you you have to you have. To get started. You have. Todd To just like finding the money. For proper. Todd Financial. Systems and proper bookkeeping.
Todd You just got a budget for it. It's it's not optional. Or if you're going to build a business that lasts, these things are not optional. And that's why if you look at big companies, they did these things. They built their business on top of these foundational systems and processes. They didn't wait until the business grew to put the systems in place.
Todd And in fact, that's that's kind of a it's a delusion that some people have. There's a pitfall that people fall into. They say, I'm going to do that. I'm going to put the right. Systems and processes. Todd In place. When we get bigger. Todd And that that's sort of like saying, you know what? I'm going to. I'm going to get in shape when I lose some weight. Right? I'm going to start going to the gym. When I lose some weight. It's it's. Backwards.
Todd It doesn't work that way. So you have to have to break that mindset, that belief off that yeah, I'm going to do that when I get a little bigger. I'm going to put these systems in place. When I have more time. Todd You may not have more time. Unfortunately, a lot of. Todd Companies don't survive that.
Logan So do you think this is a scenario where it's like losing weight? I, I don't know how true this is, but this is kind of how I view it. Where unless you're just naturally somebody that's going to go to the gym and want to work out and stuff like that, typically people going to lose weight because either one, they've got, high school reunion coming up and their ex is going to be there and they don't want to look how they look now, or they have a heart attack.
Logan And the doctor says, look, this is your last shot. You don't get this stuff change like this. Next heart attack may be the last one for you. It is that kind of what's what happens here when when people are in this jet trap where, it almost seems like a cycle. Like I have, like, my little my youngest brother, he graduated college, but, man, it was it took a whole family to get him to graduate college.
Logan And but he was so good at was so we were all athletes in college. And you have to have a certain GPA to remain academically eligible. And T.J. would just be under that line, and he would go to his professors and go, look, if I don't pass this class, I don't even need an A or B, I just need a C, and I'll stay eligible.
Logan I'll keep my scholarship. And every time they said okay or, you know, and so he just got right above every single time until he graduated college. But I imagine like if he had to do that over and over and over, at some point something has to give. So he was just so almost comfortable with that, that he knew I don't need to study because I can just go talk to the teacher at the end of all this and I'll talk my way out of it.
Logan So with all that said, is this jet's trap, is this something that somebody kind of has to have that, that, that low point or that like epiphany of like, I can't do this anymore. I got screwed on my last job. I'm done. Or can they just naturally pick themselves out of this proactively? Todd You bring up a really good point. So what I've found is, like the Jets trap is the root cause of profit, bleeds and chaos. But over the years.
Todd As I've dug into this like and ask the question, right, what's what's behind what's behind this? Why do people do this? And what I found is similar. To, your brother. Todd T.J., most, most of the people who find themselves in the Jets trap. They and and I'll use myself as an example when my back was against the wall. Like, if I had I when I was running a company years ago. I got a call from Heather.
Todd The, my accounts payable or accounting gal, and she said, Todd, if we don't get some, I just been brought in to run this company a month or so. Before I was running operations.
Todd And she said, Todd, if we don't get a check in here soon, we're not going to be able to make payroll. So there were like 15 or 20 people, including myself. We're not going to get paid. And this was news to me. So I went into kind of panic mode to make stuff happen because there's this threat and made stuff happen. Todd Got money in in solve the cash flow crisis. So a lot of people like if you look back. Over your life, you're. Todd Listening to this, look back over. Your career.
Todd When your backs against the. Wall, it's pretty incredible. Todd What you can make happen, right? If you've got to get a check in, if you got to get a project across the finish line, you got to get a customer satisfied. You'll do what it takes. But then what happens is once you do what it takes, that. Part of your brain that.
Todd Lit up when there was a threat, it just goes back to sleep until there's another threat. So I call it urgency addiction. A lot of people have urgency addiction. It's amazing what they can get done when things are urgent, but they only get stuff done when it's urgent. So they sort of because of that, they get into this vicious cycle of let's do just. Enough to start and there's no real threat right. Todd Now. We'll deal with that when it happens. And then the. Fire slowly burns, and then.
Todd It erupts on a project, or with the clients or with the employee. They strap on their superhero cape. The urgency monster lights up. Todd They save the day, and then they just go back. Go back to normal. So it is a vicious cycle. Where people are. Todd Stuck in that. But it's also a choice, right? It's just that we've chosen to only act. If you have urgency, addiction, you've chosen to act only. When there's urgency.
Todd And it's a it's a choice. It's a discipline that can be developed. Clearly other people do it. It's not something people. Are they're born with or they're not born. Todd With. It's just it's just a habit that people get into. Does that make sense?
Logan Yeah, it's I learned this. There was that used to be on our team that we were just chatting one day and we were just talking, I think for fun, like spirit animals. And his spirit animal was the Tasmanian devil, which was very fitting. But he was somebody that I learned because we went through, you know, behavioral assessments as a team and all that stuff that he he thrived on chaos, like just absolutely loved it because for him, he wouldn't have to necessarily prep for stuff because he could always just figure it out on the fly.
Logan When his back was against the wall, he he was the ultimate like all make it happen type deal. But what I also learned was as time went on, the chaos of everybody, you know, around you where they're, you know, you're having to kind of deal with this. It starts to take its toll. And I realized that it wasn't necessarily that he, like, loved it.
Logan It was just like what he was comfortable with. So if there was an environment that was more systematic, he the same way that somebody who is very systems driven see somebody else who's chaotic, they go, oh my God. Like that's that create, you know, produces anxiety. Like I don't like that. It's the same feeling from his perspective of there's a system in place, like subconsciously like he kind of sabotages it because then it brings chaos and it puts him back into a sweet spot.
Logan AKA his back is now against the wall and he's almost back in like, hero mode. So it that urgency addiction. Like, that's a great way to phrase this because that's I see this a lot with people of you know they they're just so good at just like what you're saying, just getting up to enough where they can then come in and save the day.
Logan You get that high of I made it. I, you know, I struck out nine times in a row, but then I hit the grand slam and then it's you're stuck back in that same cycle of nine more strikeouts until the next grand slam. And it's it's like golf, you know, you you played just enough on that one hole to keep you going for the next four holes without snapping your club in half.
Logan So it's it's a cycle. So I guess it in yours. I mean, from what you see, I mean, you were, you know, you've had multiple businesses and now you work with people like how do you how do you get out of this? Like, how are you creating your own discipline to finally say enough is enough? Todd Well, what you're. Talking about. Todd Reminds me of a news. Story. Todd I saw in my local area. There was a. Church. Todd That caught on. Fire. Todd And it. Was.
Todd Arson. And what was interesting was they found out that a couple of local firemen actually start. The. Todd Fire. So this is what happens with a lot of business owners. The the fireman becomes the arsonist. Todd They love the. Fire. They love the thrill. Todd So they. Either. Todd Let. Things burn. Todd Consciously or unconsciously until they become. A fire, or. Todd They consciously cause problems just because they they like that chaos. So the first step is, The first step.
Todd Is to realize this. This is a problem. All right? This is a choice. Step back and realize, okay, this is think about who's this affecting this this chaos. The thing about a lot of construction business owners. Is their their baseline for stress. Their normal baseline for stress. Todd Is so high that they don't even know what normal is anymore. Like they think it's normal to wake up at 2:00. Every morning worrying.
Todd About things. They think it's normal to work 70 hours a week. They think it's normal to go home, you know, work ten, 12. Hours a. Todd Day, go home. Hawk their dinner down. Todd And then go into their office and or answer phone calls all week and think it's normal not to be able to take a vacation. So first of all, you got. Todd To step out and think, all right, this is this is not sustainable. Maybe I can handle it, but. Who's feeling the collateral damage here is your team.
Feeling the stress? Is your your. Todd Spouse or your kids growing up before your eyes and you're not spending time with them or you're not able to take vacation? I spoke with. One of our. Todd Clients a few months ago, and, he has a teenage son and he was like, Mike was talking to his son Mike at a big business. It was a family business. Second or third generation.
Todd And the son said, like, I'm out. I have no interest. I have no interest to be in this business. Why would I want to be in this business? Dad, you're never happy. So the first.
Todd Step is to get outside yourself and look at. Or maybe you can handle the stress. But what about everybody else? And then decide or it's something has to change something. Let me ask to change. There's there has to be a better way. And that's really the first step is making the decision that something has to change.
Logan Okay. So we in this situation this is almost like an external thing. This was like you're sort of having a big, you know, heart attack. You had a small scare if you will. But this was enough that because I know a lot of I mean, I talked to a couple of dads that are contractors that their son has taken over, and I talk to the son and I'm like, do you want this business?
Logan And like, yeah, yeah. And and you can just hear it in their voice of, they just don't want it. And I don't know if, if it's just not a cool, you know, it's, it's drywall like, you know, not there's probably not too many kids that in fourth grade when you what do you want to be when you grow up there?
Logan Like I just sheetrock is my life. Like they just don't they don't draw that out. So I can never tell if it's that or if it's like the chaos associated with it. So in this case, it sounds like with Mike, it was an external thing of the son saying, look, I don't I don't essentially I don't want your life, which, you know, my son is 13 months, so he has yet to offend me in anything.
Logan But I can imagine that that hits pretty heavy. So with Mike, what what is Mike then do from there? So now he knows this is how his family feels. Todd All right. I think I'm back. I think I lost you there for a couple of seconds. Slogan. Logan Cool. We can edit that out. Did you hear the question I heard? Todd So what does Mike then I lost. Logan What is Mike now? Do? Todd I think there's one. More thing for.
Todd Mike to look at this. Maybe there's some people listening, like, you know, I'm a lone, lone Ranger. I don't have any family. Todd It's just me. But you really have to look at the financial impact of the just enough. To start trip. Todd Right? If you're doing just enough to start, you're probably leaving a lot of money on the table, which means. You're working for. Todd Less than you should. And in some cases, it's, it's. A startling amount. Todd Of money is being left on the table.
Every year. Todd Which is affecting. Your. Todd Profitability, but it's also affecting. Your, your long term wealth. Todd Right. So instead of money being invested in a 401 K or invested in real estate, it's just bleeding out in the form of rework and schedule delays and things like that. So it's not unusual for me to talk to people who are bleeding out. Six figures of profit, not six. Figures of revenue. Todd But six.
Figures of profit, net profit every year. So you got to think, all right, I'm working really hard. Todd And this money is just bleeding out. Something has to change. So what do you do. So there are a few steps. Todd And we've taken a few hundred. People through this process. Todd And the first step is really to. Create your strategic blueprint. Todd For your business. And this is to design your business the way you want it to run. You really. Clear.
Todd On what do you want this business to look like? And maybe a shorter question that you need to answer is, what do you want? Right? What do. You want your. Todd Lifestyle to look like? What do you want your business to look like in the future? And most people are really good at answering the question what they don't want. And when I ask them, hey, what do you want? Well, I don't want to do this, and I don't want to do this, like, okay, that's great, but what do you want?
And get really clear on what you. Todd Want this business to produce for you and your family and then. Work backwards from there. Todd And then design your business. We call this designing. Your strategic blueprint. Todd For your business. To get really clear on. Todd What do you want this business to look like and how do you want it to run? If you if somebody. Hired.
Todd Todd and Logan and said, I want you guys to build me a machine, I would say, great, what is the machine going to produce and how much of it will it produce? Right. What are the outputs? And it's the same thing for your business. Unfortunately, most people don't. Ever do. Todd This. They just jump in. And start. Todd Taking projects. So step one is to create your strategic. Blueprint for the future.
Todd And then step two is what we found is if you want to eliminate chaos, is to get your pre-construction process dialed in. If you want to get out of firefighting mode, stop details from slipping through the cracks, eliminate profit bleeds. It's. And if you want to get out of the just enough to. Start trap. Todd It's to have a well developed, well designed pre-construction process that. Gives your. Todd Field teams. And your subcontractors.
Todd Everything they need to finish, instead of just enough to start. So we think of this like a hand off. If you've ever watched a an Olympic relay, there's a handoff of the baton and that's how it should be. From. Todd Sales to operations. Or. Todd From estimating to construction or from pre-construction to construction. A complete handoff of all the information that they need, all the communication and all the accountability. So those are the first few. Todd Steps to solving these problems.
Strategic. Todd Blueprint while making the decision, something has to change. Design your strategic blueprint and then get your pre-construction process dialed in.
Logan On this, strategic blueprint. How? This idea of, like, we need to visualize and set, you know, get clarity around what the business needs to be. This is I think we a lot of, you know, programs talk about this, but like, what are some best practices that you've seen as far as like, you know, because I talk to the person that they're like, I, I want to grow this thing so fast.
Logan I want to franchise it. I want to work one hour a week and they go through this whole stuff and I'm like, well, how long you been doing this for? And they're like, oh, I'm about to start it. I'm like, oh, okay, well, let's just let's get through the first month of business first. Then we can start to talk about how do we, you know, franchises all over the world.
Logan And, you know, never, you know, so do you have like a timeline? Do you have a certain set of criteria of, hey, you need to get this down to the exact org chart over that period. Like, what does that strategic blueprint look like from what works best in your perspective? Todd It it's. They're all different. Todd It has to be customized to what what the entrepreneur wants. Right. I can give you a couple of best practices. For every strategic blueprint. Todd We've done.
For example, there are a good place to start would be there are. Todd 25 key activities, about 25 key activities. In every construction. Todd Company. That one person needs. Todd To be responsible for. And so. Part of that strategic. Todd Blueprint is to map each of those 25. Responsibilities to one person. Right. Todd And this is crucial is to have if it's if it's a key part of the business, one. Person. Todd Needs to be responsible for it. We can't have two people. Who are accountable for the.
Todd Same result. This goes back to I. Call it the starving Horse syndrome. Todd It's an old saying. I heard. Todd 15 years ago, the best way. To starve a horse. Todd Is to have two people feed it. So one of the best practices is if something's. Really important in. Todd The business. Make sure one person is. Todd Accountable for it. So that means. Change orders. One person. Todd Needs to be accountable. For change orders on a.
Todd Project. Customer communication daily logs schedule budget. One person needs to be accountable for each of these things. Another best practice that we found, especially with, I would say most most companies we work with most. And this. Works for. Todd All home. Builders, remodelers and general contractors. And it works for. Todd Most trade contractors is to have. Four major. Todd Functions going. You mentioned iOS. You know the traction book. They have major functions of the business.
What we found that works best is they have four major. Todd Functions of the business sales and then the separate pre-construction. From. Todd Sales and. Operations. Todd So you have sales pre-construction construction and then finance slash Adnan. That's a good. Framework that. Todd We found for the four. Major. Todd Functions. So the big takeaway. There is. Todd Create a is. A major function. Todd In your business called pre-construction. And then have. One person. Todd Accountable. For.
Todd Pre-Construction on each project. Separate that from sales. And separate that. Todd From construction. Because the skill set needed to be good at pre-construction is very different from the skill set needed to be good at sales and the skill set needed to be good at construction. So those are a couple of best practices that we found apply to the vast majority of people that, that we helped put their strategic blueprint together.
Logan So I mean, your the fact that you are putting pre-construction pretty much I mean, if you have four major function sales, pre-construction construction and then back office, I mean, the fact that you were putting pre-construction as its own department almost. I mean, that's how important you find this to be. Who what type of person is a good fit to head up this pre-construction?
Logan Because imagine sales you need a good sales person construction. You need somebody who's maybe good at being a PM, but like, who's going to bridge that gap between the sales person and the, you know, the PM? Todd Yeah, it's it's it's not the. Sales person. Todd Because salespeople. Are. Todd Not always but. For the most part, salespeople. Todd Are not known for their attention to detail. Right. Todd Construction people, the best superintendents, the.
Best project managers, they're just good at driving. Todd Things, making things happen. Right? They take a plan, they drive it to completion. You give them something to build, and they're going to build it. When you ask a superintendent to put on a different hat and go make selections. Or work with an interior designer. Todd Or go to Ferguson and help pick out plumbing fixtures. That's not their strong suit.
Todd So it really goes back to that strategic blueprint. If you're going to have Preconstruction as a separate, Department or major. Todd Function. I would start with the results. What are the results. Todd That you. Want this person to deliver? Todd They're usually things like, well, we need to have a good customer experience. We need this. Person to be.
Todd Super detail oriented. They need to be really good with people. They need to be good at communication. And they also need to be able to push things along and manage a pre-construction schedule. So things. Move forward. So they are pre-construction directors, they are selections coordinators. Todd They need to be able to deal with designers in many cases. So it really starts with what are the results. You need this person to deliver and then work backwards. Todd Into.
It. What sort of characteristics are we looking for? But those are. Todd Typically the things good. With customers really. Todd Good at communication, super detail oriented.
Logan So when you say like you're defining this, are you looking at them going, look, they need to at the end result of this pre-construction, they need to have like a production packet that is fully filled out with this information. They also need to have the client that still excited, like are you just starting with like the end in mind of like when you're passing that baton, this is what the baton is going to look like. Logan And then we like reverse engineer from there.
Todd Exactly, exactly. Yeah. Logan And then how do you okay. So we start there and then now is it up to pre-construction to say, hey sales this I need you to run the ball to the 40 yard line. I'm going to pick it up from the 40 and move it to the 20. Or is it on pre-construction from what you've seen or pre-construction, says sales, you tell me how far you're going to run it, and I'll just I'll kind of figure it out.
Logan So if you want to run to the 40, I'll meet you at the 40. If you want to run to the only the 15, I'll meet you at the 15. Take it all the way. How do you then figure out where the handoff zones happen? From sales to pre-construction to production? Todd Yeah. The key is for to know where that handoff is going to happen. Right? You probably seen watch some football plays. Where the quarterback.
Todd Thought he was handing it off at one point, and the running back didn't realize he was. It was a running play. So the key is that there is a consistent handoff point. And what we found that works best is you get. Everybody in the. Todd Room and agree on what they're going to do. So here's what doesn't work Logan. This is what I tried. For 15 years. Todd Is I would see a problem. I would go into my office, I would. Close the door.
Todd Hammer out an SOP to process. Just be so proud of it. Like, this is perfect. This is going to work. And then I would go out and attempt to. Cram it.
Todd Down the throats of my team. And then I would be disappointed at why it didn't work, why they it seems like they resisted it. They didn't appreciate the perfection. And it was because I was working against human psychology. All right. So what works best? We've done this with hundreds of our clients. So this is the secret sauce to getting people to buy into a process is get the team together and say, all right, this is this is the end result, right?
Todd This is the goal line. This is the handoff. We need to agree on what a complete handoff is from pre-construction to construction. Right. Let's agree you as the the visionary. You as the business owner. You don't have to figure that stuff out and try to cram it down your team's throat. You need to get your. Todd Your job is to facilitate a. Conversation where the team.
Todd Says, yes, this is how we should do it. We will commit to doing this and then do the same thing with the handoff from sales to pre-construction. And then everybody agrees, okay, this is how we're going to do it, right? Everybody commits, they're making commitments that this is how we're going to do it. And then once you have that process agreed upon by the whole team, then you document it and then you bake it into your software and then you hold people accountable to it.
Logan Yeah. I've done you're talking at the beginning where you like, come back and you worked it all out over the weekend and you explain to the team and you're like, hey guys, I just this is when you applaud like you're supposed to like. That's right. Praise me for all the hard work that I did over the weekend. And now all of our problems are solved.
Logan And it's just it now it there's no buy in whatsoever. It's just ultimately it was just this was a little bit over the weekend like Logan, you probably should've spent time with your family instead of working on that document. So, and with with what you are doing, are you bringing like, is this like like, do you run a workshop?
Logan That's all. Like, you know, you bring your sales person in, you're pre-construction potential person in your actual PM, like, I guess, how do you work, Todd? Because like, if this is such a big sticking point to you, I'd imagine you at least have some resources somewhere that's like, this is this is basically how you set up your pre-construction department or seat, if you will. Todd Yeah. As part of our we have a program. Todd Called Systematize Your Construction Business. And a big.
Part of it. Todd Really the. Pivotal part of that. Todd Is the we call it the team nail the handoff session. And we have an execution plan that we give to our clients training videos. We set them up. Here's how to facilitate your nail the handoff session. And in some cases we've run these team sessions in person. Somebody from my team goes and actually facilitates these with some of our larger clients.
Todd And it's we have a process and a system to follow for that. And consistently what we hear is people who are like, you and I probably were like, man, I've, I've tried this before. I've tried processes and systems before and they, they haven't follow them. And I'm concerned. People are. Todd Going to think this. Is corny or. Todd Goofy. And then they go. Through this process. Todd And what we. Hear. Todd Very consistently. One example, a guy named Shawn Dominguez from, he runs a 25 million.
Dollar commercial GC firm in Florida. Todd He said one of his longtime superintendents pulled him aside after this team session and said, yeah, we've been waiting on this. We've needed this for a long time. So what we hear consistently is the team is bought in, the team is energetic, the team's excited. We're taking ownership of these things and they're driving implementation because. They were part of the. Todd Process. And all of us are much more. Todd Likely to implement a plan.
That's ours, or at least we're part of. Todd Than the plan that Logan or Todd brings to us on a Monday morning and tries to cram down her throat. Logan So do you. Do you need to have a because, like you mentioned, like there's 25 functions and each function used to have a one person tied to it and not imagine if you're if you're it's you and three other people on your team. I mean, that's six and a quarter functions per person. Do you need to have a certain team size for this to make sense?
Logan Or is this even as like a solopreneur, you can still build out the pre-construction C? You just got to know what that looks like. Todd Yeah. There are two approaches to this. One would be to say. Or we're going. Todd To wait until we. Hire. Todd Somebody, and then we'll define. Their role. Todd And then we'll define our process. Right. And actually a lot of people try this. They think, well, I'm, I think I.
Need a project manager. So I'm going to hire a project manager. And he or she is going to bring the process. Todd And system and they're going to. Define their role for me, or. Todd I think I need somebody in sales. I'm going to hire a really good salesperson and let. Todd Them figure this stuff out for me. I've tried that. That rarely works. What works better is to. Todd Have a blueprint for that role, right? So if you're going. To hire. Todd Somebody who's going to be.
A project manager, it's really important that you get clear on the results. Todd That you want this project manager to produce, because that will inform the job description. And then it's really important that you have a process that this project manager can plug into, so that you can hold them accountable, at least as a. Starting. Todd Point. So if you. Are starting, if you're a one person.
Todd Business, now's the time. Design your business the way you want it to run, and then you'll have a. Blueprint for actually hiring. Todd People, and you'll know the sequence of what needs to be hired. You'll have clarity on what their roles and responsibilities will be. Todd If you have a small team, now's the time to do it like there is. There's no bad time to do it. Actually, the only time. It doesn't work is when it's.
Todd Too late. We have had a few people come to us and the ships just going down. They've taken a hit below the waterline. The profit bleeds are too bad. Todd People are leaving. There's an exodus from the company and they have no work. They're cash flow. Situation's bad and it's just too late. And that's sort of like there would be sort. Of like rearranging. Todd Chairs on the Titanic. But for everybody else, whether you have. Your one person team, three person team, ten person team.
Todd If you're dealing with that chaos, now's the time. Logan And do you typically find like the person who's going to own this seat? Is it usually there's a there's probably a great person within your company that they would be great at it. It's like the whole lot, you know, iOS is do they get it? Do they want it, and do they have the capacity to have it.
Logan Yep. Is this typically somebody internal that you that steps up or is this like most of the time you have to then eventually hire somebody outside to come in. Like what does that typically look like? The first step.
Todd My advice is always look inside and reshuffle. And what we've seen in many cases is there's a small team like for example, I just interviewed one of our clients, Ross and Lockland Franklin. They're from Canada, and there are two sons and their dads as Ross and Lachlan and their dad. Mallory. Todd And they've been running a general contracting. Firm, and they were all. Todd Working out in the field, and they were all doing estimating, and they're all doing sales. They're all doing this.
Sort of this. Three Musketeers all for one. Todd One for all type approach. And they went through this process and they realized, oh, we can just divide and conquer. So Lockland will take pre-construction, dad will take sales, Ross will run operations. And what we've seen in many cases is it's just a. Matter of reallocating resources. Todd And eliminating a lot of toes. Stepping. There are people duplicating efforts.
Todd So the first step and if you have a small team, there's a pretty good chance you don't need to hire somebody. You just need to shuffle. The deck and reallocate. Todd Those resources. In some cases, it does make sense to bring somebody in from the outside. And by having a. Really clear. Todd Blueprint and really. Clear, results. Todd That you want them to be. To deliver the process to follow. Todd That dramatically increases the likelihood of that. Of getting the right.
Todd Candidate in there and then being successful.
Logan And then on this, like when you're building out the system associated with it, is it common for people to have like checklists of like, hey, when you hand it from the sales person to the, construction person, you need to check off that we have, I don't know, down payment, taking care of, you know, they they already have these things picked out, like, is this, I guess, like when you're establishing that hand off zone, is it pretty boilerplate across different companies, or is this, like each company is going to have their own version of that checklist?
80% will. Todd Probably be pretty similar. But it's it's customized because every municipality has special or. Permitting requirements. Todd Even. Within their special. Todd Zoning requirements and HOA requirements, depending on the exact location. So every every nail. Todd The hand off process, every nail they hand off checklist is different and it's customized. It needs to be customized. We don't do boilerplate stuff. I've seen a lot of. People out there who are like, here.
Todd Just download this checklist and just use it and it doesn't work very well. Here's how we think about a handoff. It's not an email. It's not like, hey, go check out. The OneDrive folder. Todd We think of handoffs like a loan closing, right. So if you've. Bought a car or if you've bought a piece of real estate, there's a.
Todd Closing, there's a title company and they have a list of stipulations. And if you clear 26 out of 27 stipulations, you ain't closing. So that's the way we think about a handoff is pre-construction comes to the table. Operations comes to the table. There's a handoff checklist that's agreed upon. And if pre-construction has 25 of 27 things then the construction team is expected to say, let me know when you're done.
Todd This is not ready to handoff. And everybody's okay with this. And pre-construction is holding construction accountable. Construction is holding pre-construction accountable. It's all about building those these structures. For. Todd The team, holding each other accountable.
Logan Because I'd imagine, especially if the owner is still selling and the owner is, you know, susceptible to jet's trap, their hand-off zone to pre-production could very much start really well. And then little by little, get back to well. This is just enough to get started with the pre-construction, and they're slowly working their way back into that same trap that got them into the situation in the first place. Todd Yes. So owners have. Todd To be accountable to the processes as well.
And that's why everybody in the room. Todd So one of the big problems that I see when I get into organizations, our clients, construction business owners will say, my people won't make decisions. My people come to me. Every problem lands in my lap.
Todd They're constantly asking me questions. Why can't they figure these things out on their own? And when I dig into it, it's because there are documented processes, but they're not being followed and they're not being followed by the owner. I'll tell my client like, look. You're not following your. Todd Process and your team is not confident in what to do because. You're.
Todd Handing the ball off really well sometimes. Sometimes you're telling them to do things that you agreed to be accountable for. Sometimes you're going a little too far. Todd Ever. Not sure what you're doing. You're out here freestyling and they're not confident. And so a lot of these. Frustrations. Todd Like they're asking you so many questions and why won't they take ownership? These are symptoms of low confidence from the team. And it's because the process isn't being followed.
So owners need to be accountable. Everybody in the room needs. Todd To say, okay, if this is what we're going to do, right. This is how we do it. And everybody's okay to hold each other accountable. So it's not when there's an issue, it's not, hey, I think you should do this. It's look, here's the process, Alex, you said you would do this right? I need this, so. There's no finger. Todd Pointing. It's just it's like I was building a hospital edition 15 or 20 years ago.
And it was an emergency department. Todd Edition, and I knew I was I needed to get a state building inspector to come through and approve it. And I knew I was close. I knew I wasn't quite there yet, but I got the guys schedule and I was hoping to get him, get his approval. And so we met at the jobsite trailer, walked to the ambulance entrance. Todd We walked in. There's quite a bit of work still going on. Final details.
We walked around the racetrack, came back to the ambulance doors. He didn't say a word to me. Todd Until we got back and he said, you call me when you're done and you got back in his car and left. So everybody needs to be okay saying, hey, you call me when you're done. This is not done. And pushing it back to the. The person. Todd Who hasn't completed the handoff.
Logan All right, I that's a good way to to end it I like that which I'd imagine it takes a lot of confidence to get to that point, to say that to somebody. So, if if somebody is listening to this, Todd and they want to connect and they want to learn more about, hey, they're on their part of this cycle, this trap right now, or they just go, look, I don't think I'm quite there, but man, this pre-construction stuff sounds awesome.
Logan Like, that's definitely a huge piece of like that would make my life so much better. How do they connect with you? Like, what's the best way? Yeah, there are a couple of resources. Todd That. I would recommend starting with. Todd If you're if you've heard us talk about free estimates and you're like, wait a minute, there's another way, the answer is yes. So we have a free get paid for estimates masterclass. We used to sell this for $1,000. Or.
Todd So, but we declared war on free estimates a couple of years ago. And you can get. Our entire get. Todd Paid for estimates masterclass. I think last time I looked, we've helped 1200 or so people get paid for estimates, and it is entirely possible to do it. So I'll, we could share the link in the show notes. Another. Resource. Todd Is. There's a. Todd Specific. Part of.
Todd The pre-construction process that gets missed a lot. It's called the buyout phase, and I don't have time to go into it. I did a podcast episode on this, and I actually put together a buyout playbook. So if you want a buyout, if you want to learn how to how the big companies buyout. Their projects before it starts, before they break ground.
Todd How they lock in profits and reduce risk, we've got a buyout playbook that I'll make available to. You can have that that link in the show notes and then if you want to connect with us go to construction Leading edge.com. Check out our podcast. We have 380 episodes. Or. Todd So. A lot of resources there. And then there's a link there. If you want. Todd Our help, you want to talk to us about how we might be able to help. You. There's a link there where. Todd You can apply for a call.
Logan Cool. Well, I appreciate it, man. I like the, Yeah, I really like the I understand the Jets trap. I, I really like the idea of of pulling out the pre-construction into its own. Like it is that important that one person needs to own it so that that personally to me is like my biggest takeaway. I thought that was fantastic. Logan So I appreciate you coming on here and sharing this. This is super helpful. So thank you very much. Todd My pleasure. Thanks, Logan. Logan Cool. Thank you guys.