- How I got a million bucks is I realized, Donovan, there's very little you're good at, like the, the one thing you're good at is, is coming up with a quick solution. - But - Besides that, like pretty much I suck at everything else. - Welcome to Masters of Home - Service, - A podcast by Jobber. Each week we talk to successful home service entrepreneurs, experts in their field to learn how they built their company so we can make your business more profitable and more efficient.
We're in Las Vegas at Blue Wire Studios. Today we are talking about scaling to a million dollar business. - Donovan, - You are the owner of DIV cleaning service, correct. Guest today. You also have a Christmas light business. You sell, you, you install all that kind of stuff. Is that right? Absolutely. Welcome to the show. Thank you. Alright, Dan, you own Dan Guest Plumbing. You also have a podcast, the Guest Life. - Yep. - And you do HVAC in plumbing? Yep.
- Is - That right? Yep. Awesome. Welcome to the show. Thanks man. Guest Plumbing, guest - Plumbing and hvac, - Not Dan. Guest Plumbing, - Not Dan. Guest - Plumbing. Got - It. We talked about that before. Yeah. - Yeah. - Cool. - A million dollars a year is 88,000 a month. It's about 22,000 a week and it's $4,500 a day. And my wife, when I broke that down to her, she kinda like congratulated me a little bit 'cause she was like, wow, that's, that's a lot of clients that you serve.
That's a lot of transactions that you do. That's a lot of money. That's a lot of money. And so how did you guys get there? What, what did you guys do to get $2 million a year? - For a long time it was just, just head down. I remember not knowing about business when I started business, it was just, how do I stay busy? And I never liked being slow. And so then it just, all of a sudden you started learning about business and understanding numbers and understanding, you know, sales and profit.
And then it, and then it happened. And then the interesting part is you get over a million dollars and you, you understand, wow, I didn't make any money. I I did over a million dollars in sales and I made no money. This is a problem. Yeah. And I think, you know, the next steps from there are understanding business and having a great accountant. - Yeah, I definitely get back to that profitability aspect. Don, what do you think? Well, - I mean, I grew up an entrepreneurial family.
So for me in high school right around the time you got interest in, ladies, find out you got have a little bit of money. My father has more degrees than a thermometer and he can put himself through college by having a winter clean company. So again, it was just kind of second nature for me. I was like, I'll go hustle up some work. The good side of that is I, I have a high tolerance for risk. The downside is, is, man, it took me like 10, 15 years to get to that million bucks.
'cause I knew everything. Like you couldn't tell me anything I was doing was wrong. And I learned every lesson by screwing it up. One day I had a realization, I was like, you're really doing this wrong. And I was like, what else am I doing wrong? And that moment that I started becoming receptive to actually surround myself with people a little bit more successful is when I went from like six figure business to having six figures in the bank account.
Right, like the profitability aspect of it. Exactly. And it, man, it took a long time. I think everybody starts out with a goal of like, ah, let's reach a million bucks and then you hit a million bucks and you're like, that wasn't what I thought it would be. That's like anti-climatic. And then maybe you start another business, you start a podcast and it's like you focus on the things that got you to it. Instead of focusing on the million dollars, you focus on the things that got you there.
And that's what I did with a Christmas side company. And then it's like, oh wow, we did a million bucks this month. You know? And it wasn't even like that, that was never a goal. So it took a while and it, it takes some hard work. But yeah, focus, I I would say focus on the things that that'll get you there. Not necessarily the million dollars. - How did you change each step along the way? You get a hundred thousand when you're, when you're, when you first start, 250,000, 500,000, a million.
How did you have to change at each of those levels? Generally speaking, what did you - Have to do in order on your, on - Yourselves to like get to there? - I break this down backwards a little bit. So there's two levels of mentor for myself. And that first level is don't get too big and know people suck. They're gonna take advantage of you. Clients won't pay you. You know, you're, you're never gonna have any personal time. More - Negative. - Yeah. More, you know, work-life balance kind of thing.
And the second level of mentor, which is a huge shift, but it was so powerful when I, when I got there and I found it. It was people, people are everything. Our team is great, our leadership is awesome. I'm not the smartest person in the room. You have to talk to this person in, in our business to, to get that answer because they're, they're the expert. They're, they're smarter than me.
And as soon as I shifted that the business just exploded, which was, you know, what my, you know, my purpose is, and our business is creating opportunities for others so they don't need to leave our business. And by doing that and empowering them, it's just, you know, it's exploded. And then you start getting refining and actually have the time to work on how to make the profit when you're over a million bucks because you're not worried about doing all the work.
You're not worried about going all the job sites. You're empowering your team to do it because, you know, just like you said, that $4,500 a day, you can't do that by yourself. - Yeah. - So what does that mean? Well, it's just, it's a simple answer. You have to empower people. So, yeah. - Yeah. I mean, I think for me, getting over a hundred grand, you gotta get off the truck, right?
Because you, you can just work and, and make a hundred grand, you know, to get over two 50, you probably gotta start building up your office admin side of things, getting over half a million. You gotta start developing a team, right? It's not just like husband and wife combination, right? You might could probably get up to maybe half a million or something like that with just wife in the office or husband in the office and the other person.
Like, you kind of divide those roles, but over half a million. I think you gotta start actually building a business that's not just gonna happen. I've had people like just make a hundred grand or 200 grand without really growing the business side of the business over a million bucks. That's a tough barrier, right?
You gotta get past, what I would say is that middle of the road size business, and even though I've done over a million revenue, I feel like I'm still kind of stuck there because there's, there's some things that I'm, I'm still lacking. I think to really sail past a million, you need to have maybe like good core company val, like culture, right? So you gotta have some core values, some good company culture. I, I, I got a lot of room for improving on that one.
I think maybe you need to have some sales team or sales staff, and then you gotta have people who are integrators. If you're not integrators, like you're, you're not gonna get over a million bucks by doing what you already did. Like, you, you're gonna have to say, okay, I am not good at showing up on time. So you gotta hire people who are, who are showing up on time.
That's not, you're, you're not just going to sail past a million bucks or your business is gonna go up and down, up and down, up and down if it's relying on you too much. Like, like you're saying, you gotta empower people. Yeah. - Yeah. Totally. - What, that's a great segue. So what people really, I should say roles. Yeah. - What - People roles do you need in a million dollar company? - Well, you know, you kind of work it backwards. So what, what is your role before that million dollars?
Understanding that you can kind of pull yourself, what do you, what are you good at and what do can you do better? So are you, you know, my, my title is visionary of the, the business. So a visionary of the business is kind of somebody that goes out high level relationships, understanding where the vision is going. You know, understanding if you want to be a $2 million business or a $20 million business is gonna change the direction and the path.
So being able to unpack that and say, well, what am I really trying to do here? And I think, you know, talking about a lifestyle business, which is, yeah, you know, the wife's not working or she's doing the books and you kinda keeping things in in tight, that's okay. But getting over that million dollars you have to understand for the positions is the next person that you're gonna put into what you were doing is never gonna be as good as what you are.
So you understand now there's a capacity issue. So you, we call it the breakthrough stage. So if you're talking about annual revenue and then profit, if you're focused on all the jobs, if you're dealing with the relationships with all the clients, and then you have to train somebody to do it, there's always gonna be a hit to, to your bottom line. It's, I I haven't seen somebody do it any other way.
So understanding that there's gonna be that hit and having and making sure the runway, but trusting the process in, you know what, this is gonna free up my time. It's gonna allow me to do more. And really giving yourself not a month, but giving yourself six months to a year. We had managers come through and we always now give 'em six months to a year to get their feet wet. They've never had a, a process like this.
Maybe they had their own business and they wanted to get into management, or maybe they had to get off the tools and get into management. All those things that's, they're new to it. They're not gonna come in with all the answers and they're definitely not gonna do as great a job as you. - Yeah. - So being aware of that and understanding that's the process to get over that, that hurdle.
Now we do it, you know, monthly with new positions. There's - A lot of listeners who are in like the 250 to 50 thou $500,000 range. And I, I view it like a, like you're shifting a car, you know, first gear, you really, and then second gear and third gear. A lot of entrepreneurs are stuck in third gear and they're trying to go faster. They, they just, they just can't, they're, they're trying, 'cause nothing's changed to get 'em out of third gear.
And so what, what kind of habits do entrepreneurs have who are leading companies in that range? I was - Stuck in third gear for like 10 years. Mm. I I mean, again, I think in order to hit a million and then quickly get past that, I would say that a middle-sized business where a million dollars a year, you gotta hire managers. Exactly what you're saying. You gotta have middle management, right? But middle management just sucks up your cash flow, right?
And, and so I think that a lot of small service businesses, you can be extremely profitable at the 200, at the 500,000 - Absolutely. - At a million bucks. Now you're hiring middle management, you're trying to increase your leads, you're trying to, and, and all these things are just dollar bills, cha-ching cha-ching cha-ching. And it can really suck the profit out of a business.
I would say, you know, for a lot of people, if, if you're trying to hit that million bucks, like almost shoot for three, you know, like, like sail right past that number and, and it'll be so much easier. Now don't overcommit, I'm not saying that, but focus on the things that will get you to three and, and quickly get past that middle-sized business. What are some things that you have to change? For me, I had to realize that a lot of things that I thought I was good at,
I thought I was good at my numbers. I, I - Wasn't, - You know, you gotta, you gotta hire a good cpa, you gotta hire a good bookkeeper. I thought I was good at managing people. I wasn't. I I mean, I, I, I, you know, how I got in a million bucks is I realized, Donovan, there's very little you're good at, like, the one thing you're good at is, is coming up with a quick solution. - But - Besides that, like pretty much I suck at everything else. So, you know, I realize that about myself.
I realize I fall short on the, the monotonous, like over and over repetitive task. I'll do it for when I have to while my, you know, if my business is like, okay, this is putting you on life support, okay, I'll, I'll focus on that and I'll get it done. But I get that much leeway and then I like relax by relaxed too soon.
So for me, I I, I realized that the end of that process of me focusing on something has to be teach and delegate to, to somebody else that has a strength in those areas that I'm weak in. I, so a million bucks is about a, a team you have to let go. - Yeah. You had to let go of things. I used to think, there was a time where I used to think that I was the only one bright enough on this earth to invoice our clients, - Right? - My technicians can't invoice clients. That's crazy. Talk.
And what do they do today? They invoice clients. And I never touched that. Like that was a limiting belief that I had that oh man, I'll be invoicing clients till the day I die. Well that's, that's a bad business. I - I love that statement. Limiting beliefs. It's so interesting. Yeah. Yeah. It, it, it really just, it stops that process of why can't they, why not, right? So we, we do the same thing. Why not me? Why not now?
And like, really just jump into that process of, well, what's the worst that can happen? Or again, trusting the process. So you don't have to trust all your staff, but you have to have a process for them to, you know, trust that they'll get that done. And, and kind of add that into the, you know, - Are, are you a perfectionist? - I stopped being a perfect, - You stopped being okay because I was gonna say perfectionist, right?
And so, and, and so I think that that's like small business owners, like when you feel like you can't let go or something like that. You, you walk in and the mug is like this and you're like, you walk in, the first thing you do is go boop. Right? Right. And then you tell your team, like, the mug must be like this. And, and they, behind the, behind the cameras scatter were all yelling at us earlier. - Like, the mugs have to stay like that.
- Right? And, and I'm joking, but I think that that's like a common trait of a lot of business owners. We, we, we've poured our blood, sweat, and tears into the business to get it to 250,000, half a million. You know, and we've done everything in our power to do that. And then you start bringing on a team and you're like, they don't care as much as we do. If it, if it has to be done, you know, I'll do it myself. Like that's a, that's a common thing.
And correct me if I'm wrong, but I have to look at it now, is if they can do 80% of what I can do, that's amazing. Right? Like, you know, 80% of the, of the invoicing properly. You, you know what I mean? If, if I get that, we could have squeezed 20% more out of giving 'em a quote or something like that. But 80% of the time, if the trucks are perfectly clean, that's good enough. 20% of the time, if they're a little dirty, it's not the end of the world.
And so that 80% rule is like shooting for an employees or team members to, to get it. Most of the time, 80% is like kind of the target instead of like 95, a hundred percent that I kind of hold myself to that standard. - Yeah. We do an exercise called the 80 20 rule, especially for, for management and leadership. So it's, I take it the first 10, they take it 80 and then I finish off the last 10. Hmm. And so a lot of the times people don't wanna make mistakes.
So they, they don't want to go the whole a hundred percent because they want, there might be a small edit that - You wanna make. Ah, and - So then out the door there's a different, give - Us an example of that. Can you give us an example of that? Yeah, - So, okay. You know, you gotta put, put a quote together for the climb. Okay, so here's how I'm gonna take it. The first 10, we got this quote, it's downtown, okay?
Make sure you have the travel time, make sure you got the lifts on this truck, this and that. I want you to go through all the material lists. I wanna set the standard. So I wanna say, make sure you call three different suppliers. Get the pricing out there, put the quote together, package it up, ready to go. Okay, so that's just me. I spent five minutes, they're gonna go out there, they're gonna spend two hours putting this estimate together.
They're gonna call around, they're gonna do all this, this groundwork, and then they're gonna come back to me for the final 10. And that final 10 is just the fine tweaks. Okay, this is what I found, I just want clarification. This is what I do. Okay, perfect. Now I've seen the last 10%, I've put my seal of approval on it. They're happy because they're either in the right path with the right direction, or they're not. And then we can tweak it.
So next time, and again, this isn't micromanaging, this is supporting the outcome that you're looking for, right? And then every time they feel empowered, 'cause they're doing most of the work again, talking about, you know, perfectionism, if they're almost great, they're great, right? So - You, let's celebrate that almost, - Almost. You're not, you're not, you know, you're not drilling into 'em, oh, why didn't you do this? Why didn't you do that? You're saying, oh, great job.
So yes. And right? Yes, that's great. And, and then you just add to it. - Yeah, that's - A good example. - You don't wanna be doing, but, so it's like the, you know, the yes end's a really powerful statement. So that's kind of our, our 80 20 rule. And I also, the team knows that, - Well, that's your rule for delegation. It sounds like 80 20 rule is all about delegation. - Well, I, and I would also say that most tasks, most of it can be done with somebody.
The bulk of the work, like you were saying, can be done by somebody who's not an expert at that, right? They, they can take on a bulk of the work away from the, the person who is an expert. So a perfect example of that is when we're doing Christmas light quotes, we may get a hundred, 200 leads in a day. Wow. Right? I mean, it's, it's crazy. It's so seasonal and it's, it's the toughest thing to staff and train for that seasonal spike.
But what we can do for our quoting is, you know, anybody can be trained to answer the phone and get the client's information and, and set up that process and say, okay, awesome. It sounds good. Sounds like we're on the same page. We're gonna get you a quote within 24 hours. And then what we can do there is I can have an army of people finding a photo, - Doing - The design, because we're doing the same design on every house in jobber.
We can look at that photo, that design photo, and we do a text only line item that's just the photo for design. And then underneath that, based upon that photo, we give line items that correlate to how they marked up that design. Now the difficult part of sending the quote is looking at that house and is that 150 feet of lights or is that 170 feet of lights? Well, that requires a much higher level of, of expertise than just putting a circle.
If there's a triangle, you know, put a big circle right there that is gonna be a wreath, you know, the front roof lines put a red line on that. Anybody can do that. But not everybody can look at that house and accurately measure it. So to to your point, I can have an army of people getting the client's information, making the design photo, adding the line item, save that line item as a draft and jobber.
And then I can have my expert go through and spend 30 seconds a quote, - Signing off, - Just, well signing off. But more so adding the pricing. And then once that person gets caught up, that is that entry level quota. That person, once they get caught up on their stuff, we say, Hey, alright, you're getting real good at doing the design photo, you're getting good at, at putting the line items on properly. Now I want you to take a stab at coming up with an estimate and still save it as a draft.
But then, you know, we're gonna talk about it before we click send, we're gonna talk about it together. And before you know it, you give somebody, like you're saying, six months for a manager. Well, now I can give somebody, they can be efficient almost day two or day three. They can be an efficient, they can be a net positive to the team, but I can give them a month to become an expert at quoting.
- Hmm. - So some of those bulk tasks can be done by somebody who doesn't quite have to be an expert. If you say 80 percent's good enough, - Guys, what value does Java bring your, your organization? - For us, it's, it's getting, getting some time back. I remember turning on jobber payments a couple years ago and like, just saving so much time, almost saved a full position trying to call around getting money. That, that was huge. And, and just keep, keep relearning jobber, right?
Take those training courses, you know, call your representative. And that's been huge for us. - What I'll say is I have like shiny object syndrome, so I'm like, squirrel, ooh, what's, you know, what's going on? Most business owners are a lot smarter than I am. So the biggest thing that jobbers done is it's made me accountable to the process. And then as I'm growing a team, it's allowed everybody to follow that same exact, exact process.
If that client is an input in jobber, it doesn't exist, right? So having a team and growing the team, we can all do it the same every single time. And we, it's a smooth transition when we go from like office admin to sales staff to technicians. I would say that's probably the biggest thing. And I know for a fact there's no way that I could put all those systems in place myself. - Jobber changed my business, I know it'll change yours.
You should give it a try. Go to jobber.com/podcast deal to get an exclusive discount for new members. Try it out. It'll make your whole business more profitable and more efficient. I wanna move into a diff slightly different direction in terms of profit. 'cause I mean, revenues - For - Vanity profits for Sandy, who cares if it's a million dollars if you're not making any money?
A lot of entrepreneurs getting that, that model where they are doing a million and they're not really making any money, they're making a lot more money before. Yeah. At 500,000 if we get there. Any final thoughts on this? Like getting to a million and any final thoughts on this before we move to profit? I - Got one, I got, I got one that I think it's a trap that a lot of people fall into.
They think that they're making, that they're more profitable at a lower level, and that's because they're wearing 15 hats. Mm. And what they're doing is they're paying themselves, their, their business still is at 10% profit at a million dollars or whatever, or 5% profit. But what it is, is they're paying themselves a salary for the work of three or four or five people. Okay? So your business is just as profitable at a hundred grand or 500 grand or a million.
The the difference is that you're working multiple jobs and then at a million dollars, as we're building that team, you're forced to pay other people that salary and you're not earning that income yourself. So you're not more profitable. It's a trick. What it is, is you're wearing a lot of hats. You're working a lot of jobs. And at a million boxer, as you're growing, you've gotta pay that out. So that's a good point. Yeah. You're, you're, you're not profitable.
You, you're Donovan Quesenberry and you do not understand your numbers that, that that's what's going on. So how, - Okay, let's, let's go. That's a great segue. So how do we maintain profitability at a million dollars? - I would say know where you're going. You're talking about the accounting year, right? You got 365 days. So whatever your physical year end is, is your physical year end.
If you're doing a million dollars for that 365 days and the next day you land another million dollar job and you scale, and the following year you end up doing 3 million, what's the difference? So understanding, you know, they talk about Simon Sinek, the Infinite game. So, you know, business is not finite. There are finite things within business, but the infinite game talks about that long stretch of business strategy.
So if you're always focused on profits today and you're not reinvesting into your business, that will be your limiting factor. So for us, we understanding like, you know, especially navigating the banks, if you've got lines of credits or you need financing free business if you're getting into commercial work. So you need those longer lead times for, for different types of jobs.
But being able to understand, well, we want to be a 5 million business or we wanna be a 10 million business, and having the right structure and strategy to unpack that, which means, you know, some people are like, oh, I can't hire this person, or, oh, what, what's the next position gonna be in my business? Well just go look at a bigger business.
They've got an internal bookkeeper, they've got a payroll specialist, they've got a customer service coordinator, they've got somebody to answer the phones, they have managers. So like, nothing you're doing hasn't been done before. So if you can kind of look at other businesses and say, okay, what's the next best position?
Because again, when you're, when you're dealing with growth, say you hire an estimator, like we hired an estimator a year ago now, and it was the best thing we ever did for our business. It got us over that hurdle of, you know, four and a half million. But at the beginning it was an expense, and guess what? The profit line went down, but we know where we're going. We're going to a business that's gonna need estimating, we're probably gonna need multiple estimators, right?
So I think that's, that's really key in terms of like understanding. Don't be scared to reinvest in your business. And if you can keep your personal expenses down in those early stages of your business or whenever you wanna make that, that decision to jump there could be a huge benefit later. And I, it comes down with, you know, financial freedom, but also time. Yeah, - I, I got to a million bucks and my office warehouse was a storage unit, you know, we did a million bucks out of a storage unit.
And so, you know, like living at home with mom, if you're playing video games all day is not a good thing living at home with mom. If you're building a million dollar company, great thing, - Right? - Yeah, yeah, yeah. You know, and, and then you're talking about, look at companies who are successful also, don't be afraid to look outside your industry. Like look at successful people.
One of, one of my mentors is actually a farmer by the name of Joel Soloan, and he has two quotes that I love that I've applied to my business. The first one is like, sales should be organic, almost a serendipitous outgrowth of quality and service. And the second one is that business should scale, be able to scale up profitably and scale down profitably. And what I mean by that is you should be profitable at a hundred grand and you should be profitable at a million bucks.
If you gotta get to 1.5 or $2 million, then you gotta range in there that you're not profitable. So you gotta know your KPIs, you gotta know your numbers. If you're gonna play big numbers and do big jobs and big quotes. All that also is potential for big losses and big, you know, if you're gonna take on big debt, okay, well if the economy goes sour, then you know, you could be in a real bind, you could, you could be hurting if you cannot scale up profitably and also scale back down.
And for me it's like one sales guy can support two crews. You know, I need, I need another office lady for every two crews, right? And so you, you switch from, alright, I'm gonna add crews, and then you quickly get that crew to capacity, right?
I don't, I don't wanna say, oh, I'm gonna grow in a year, so let me, let me buy five new trucks and let me hire 10 new guys and I don't know who's gonna answer the phone or I don't know who's gonna sell those jobs or I don't know where the leads are gonna come from. Right? When you're adding on staff, you should have a really good onboarding training program so that you quickly get them to capacity. And so you should be hiring if you're, if you're in a growing mode, right?
You should be hiring technician side of your business and then you go to the office admin side of your business and then you go to the sales side of the business and you, you, it's, it's a revolving door and you kind of focus on different things and that's, that's growth. And, and at some point you're almost always gonna be behind in, in one area of your business it feels like. But, but you're also profitable if you're, if you're like, oh, we're on easy street.
I can, I can say, you know, there's probably a little bit of waste in your numbers somewhere, right? You're, you're probably a little bit overstaffed or paying people a little bit too much or your crews are a little unproductive. Yeah. - Let's talk about cash flow. So what kind of capital funding do you recommend for companies that wanna go to a million dollars or more? What kind of cash flow management do you need to have in place that doesn't dry up on you? Any tips on that?
- Don't take on unnecessary debt. I mean, start the process, but like, I should have started getting credit for my business sooner. I I didn't, I've only done that for the last maybe three years or something like that, but I went 10 over 10 years with, with just cash, right? So yeah, we grew to a couple million bucks with, with no debt, with no, you know, when I bought a vehicle, Adam, again, when we met, I was driving, you know, I had a thousand dollars truck.
I literally paid a thousand bucks for this truck and it was earning two, three grand a day, right? And, and so I think that, you know, if you're gonna grow your company, I don't think that you need to take on an unreasonable amount of debt. Now with that start the process, you know, go ahead and, and get an LLC go ahead and, and get your your credit start building that. But when you get a credit card, don't use it like a credit card, use it like a debit card, you know, pay it off twice a month.
You know, don't go out and buy a hundred thousand dollars truck if you don't have the money in the bank, right? If you're like, you know, I, I, I, you know, I can't afford to buy this tool, but I need it to complete a job. Maybe you shouldn't take on that job, right? I think again, everything that you do should be profitable and in the back of your mind, you should always say, if this goes sideways, is it going to be detrimental to the company as a whole?
'cause keep in mind, if your company goes over under, then everybody that works for you is going under, right? You, you, you're, you got how many people in your organization that literally you're putting food on their table. And I think that most business owners, at least me, sometimes I stay up at night and I'm like, if I make a bad decision, this is gonna affect a lot of people.
And I think that debt is one of those things that you can very quickly get outta hand if you know how to leverage it. Awesome. Right? But I think that you should be able to grow without it and, and use it like a, like a bank account, like a debit card where you, you can get by without it, but you're building it. - I would say if we take it back to when you're starting your business, make sure you can get personal lending before in Canada, the banks don't really recognize you
as a business for the first two years. So if you're not - Interesting. - Yeah. So if you're not successful, you don't have a track record, they wanna see that. So find, I would say get a good accountant to understand your cash flow because you're not gonna know what it means or how to understand it if you don't have someone explaining yours behind you.
But then also understanding that your banking partners, you know, some of the best advice, as I said, it's like when you go to your mortgage broker and they don't have a, a mortgage, right? So when you go to your banker, but they don't have a business, right? Yes. Maybe they've seen some businesses, but as you start in the small business world, understand the other side of that, the desk, that person is in an entry level business banking position, they're in small business banking.
A lot of the times that is just a stepping stone into commercial banking. A lot of the times that's just a stepping stone in a private wealth management. So understanding that you're not dealing with the expert all the time, but you're dealing with somebody that has guidelines. And so if you can reverse engineer your needs from the bank's guidelines, it's, it's the best advice I ever got.
And once I kind of understood that, and it's not manipulating, it's, it's playing by the rules and playing by their rules. So going to the bank and saying, listen, we've got this new job coming up. There's 60 day terms on the payment. It's, you know, it's, it's legally binding. I just need to take on the job and have the cashflow to do it. It's a profitable opportunity.
And then they, you can come in with the right amount of paperwork and say, okay, listen, that's how we're gonna take this job on. Or you know, kinda like you said, with that tool, we're gonna be able to take this job on and this job's gonna pay for that tool. And then now we've got that tool for the rest of our business' lifecycle. You don't want do it. And I think we're agreeing on that. You don't wanna do it to the point of like, it's, it's not really risk, it's just like you're
just shooting from the hip all the time. Yeah. - You - Know, that - Structured debt, the difference between structured debt and just racking up a credit, getting maxing out your credit card. Right, exactly. - You - Know, and, and you also need to understand there's different types of credit. Exactly. To your point. You gotta understand, you know, what do banks want to lend to you? Well, they wanna return on their money, right?
So that's what they're looking for. It, it is similar in the states, you know, they want two, three years worth of history. And so that's why I'm saying start out small, right? Start out with a $500 credit card if that's all you can, you know, you know, qualify for something like that. But start building that out and then do, do other things.
I mean, there's, there's lines of credit, there's invoice factoring, which is what you were kind of referring to, I believe, where you say, Hey, we got a big job. It's, it's under contract. We, you know, we just wanna upfront on our money and you know, if that job is gonna be a 20% profit and the the debt only costs you a 3%, 5%, like all day every day. Yeah, let's go for that. But you gotta be a little financial literate so you don't get in over your head.
- Yeah, I think the best, like you're talking about scale and over that million dollar threshold, the best thing you can do is have an in-house bookkeeper, by far. I I highly recommend it. A lot of the times they will do part-time work, but in-house is the critical thing there In-house bookkeeping, you want to know your numbers as quickly as you can outsource bookkeeping, you're ne it is gonna be every month. - So - Maybe, maybe get 'em at the 15th of every month. That's not effective.
That's reactive decision making when you can say, Hey, how was this week doing? Okay, there we go, let's go, let's, let's make a decision based on that. Well, how are we looking this month? Listen, there's some extra cashflow. Let's, let's buy that tool. That tool's really gonna pay us off and it's gonna set us up for next month. Absolutely. Okay. You know what? The trucks need some oil changes that thousand truck needs, new tires, right?
But also, you know, if things are tight, you know what man, let's, let's work Saturday or Sunday, right? Yeah. Let's get it going. - Yeah. And being, being able to scale it back or scale it up, like you're saying, the in-house bookkeeper, a guy had a hundred thousand dollars cannot afford to pay you. You know what I mean? Like, you, you can't afford to pay a full-time in-house bookkeeper at four or 5 million. It's a, it's a necessity, right?
So I think hanging around people, it, it goes back to your advice at the beginning of the episode. Hang around people who, who are at where you want to be, get advice from them and then have that plan, you know, at, at, at x amount, at at 1,000,005 we're gonna hire an in-house bookkeeper and this is gonna be a typical salary for our area and this is how many hours and, and X, y, z. So you have that plan in place so when your business reaches that threshold, you can quickly pull the trigger.
And again, it's about that opportunity cost, not, you know, missed opportunity cost and capitalizing and reducing those missed opportunities. So yeah. - Yeah. - I'm going to boil this conversation down to three more actionable steps. Number one is work on the business, not in the business. Number two is build one production crew at a time and then rinse and repeat.
Number three, build your business on fundamentals. Knowing - Your numbers, - Using a platform like Jobber to really know your numbers. How do your listeners learn more about you guys? Yeah, - You can follow us on at Guest Plumbing. We're on Instagram, YouTube, if you wanna check out the podcast, it's at the Guest Life podcast. - One good way to reach me is directly through Facebook. You're welcome to look me up, Donovan Quesenberry, shoot me a direct message.
And if you're interested in growing a seasonal business and your interest maybe in the Christmas site industry, we do run a free group on Facebook, which is Christmas site contractors. So it's geared towards helping the brand new people grow and become successful in the industry. - Small business is the backbone of the economy. You guys are that backbone. Thank you for what you guys do. Thank you for the clients that you serve.
Thank you for the families that you guys impact, and it really makes a difference. Thank you. Yeah, thanks so much and thank you for listening to the podcast today. I hope you learn something will make your business more profitable and more efficient. Maybe get you to the million dollar mark. I'm your host, Adam Sylvester. You can find me@adamsylvester.com. Remember your team and your clients deserve your very, very best. So - Go give it to 'em. - We'll see you next week.