Because they're prioritizing the wrong things, or they're growing the wrong way, or, you know, they think that the path to a more lucrative project, job margins, whatever that may be, are something different than what they're doing, and they're just throwing hours and throwing sweat equity at their business to try and figure out what sticks and what works. So I think that, yeah, you should be careful of that. I wouldn't face that somebody's spending a lot of time working and really put
the hours into the day and grind. I don't think that that dictates whether you're successful or not. Welcome back to the modern crossing podcast, guys. Today I'm gonna read two really mean DMS I got. One might be meaner than the other one is definitely meaner than the other one is more of a personal attack, personal and I am not well. I am I am unwell. But you guys submitted some questions or statements that we're going to respond to and to dig into it,
but overall, really, hopefully giving you clarity. Because I think a lot of you guys listen for the sake of the fact that you feel as though you're, you know, you're kind of stuck. I know a lot of you guys email us and communicate that, hey, you know, the podcast has helped me, or, you know, recently we got a really difficult email that said that they're going to be closing
their business. And, you know, we wanted to dig into some really hard hitting questions today that could potentially and I think will provide the clarity that that you are looking for and that I know I certainly was at one point. But before we get into it, make sure you head over to modern craftsman.co. Sign up for the newsletter. We're launching a monthly workshop, which is completely free, where we're going to dig into very specific stuff for business. Help you guys grow and build
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appearance. Their team of skilled in house printers and designers deliver customized gear fully prepared for use. So head over to marnishworkware.com to elevate your brand. I feel badly because I I have a lot of friends who, like, don't have hair, and I'm always complaining that I have way too much hair. And they're like, you're such an ass dude. I'm like, I don't know. Let me read you a comment yesterday on Instagram. I hate to say it, but Nick You should probably give up the fight with
the hairline. Shaking my head, it's a losing battle. Brother, and you'd look way better just shaving it down at this point. Like, Thanks, brother. I feel like your hairline hasn't changed. That's what I think. But I now I'm, like, overly self conscious. I'm like, should I fly to Turkey and get my hair, like, brought down to here? Maybe, dude, just draw it in. Is there anyone bald in your family? My dad has, like, basically my hairline, and it just continues
to get thinner. I mean, I'm sure, I don't know. I'm sure my hair is getting thinner, dude, I just, I didn't realize how, like, people who go bald typically go bald. I didn't realize how young they typically start going bald, like, pretty shortly at, like, people who are going to be fully bald, it's pretty shortly after high school, yeah, that they start balding. Like, it's a lot of times in your early 20s. And I just, I guess I never realized
that I had to get a haircut. I was out in Cleveland. I had to film some stuff with fine homebuilding and loctite. And I was, like, every other time I've gone out there, my hair is either overgrown blonde, unacceptable. And I was like, I'm gonna cut. I'm gonna get my hair cut. So I got my hair cut, and I went out there and they were like, no hat this time. I was like, I brought a hat if you want me to. And then they had to, like, pull everyone and ask them if they wanted me to wear a
hat, because I always have a hat on. They're like, No, you're fine without the Hat. I was like, All right, cool. It's that's the funny thing about when you're doing, like, professional content, is they're like, Hey, make sure this is what you wear, because that's what you wore last time. Yeah. And I'm like, Oh, I never thought about the fact that you're cutting this together. I don't know. I just always wear hats at work too. I think it like, I don't know it's more comfortable. I don't like
wearing sunglasses. So I can use the hat to kind of do sunglasses made me sleepy, really. I just, I can't I think that it's like, if, if you've ever skied, they will sell tinted lenses, and they're fine, as long as you keep them on, but like, as soon as I take them off, I like, don't like sunglasses if it's not sunny. So if I'm in and out of sun, yeah, as soon as there's no sun I have them on, I have to take them off, and then my eyes just never
adjust. So I'm like, I think I'd rather just squint through it. Yeah, I'm definitely a hat over sunglasses. Like, if I put sunglasses on when I'm driving, it literally makes me want to fall asleep. Yeah, I don't know I I'm just like, I know some people who put
sunglasses on just don't take them off. And the only time I ever really use them if I'm somewhere where I'm sitting like a like an athletic event, where I'm sitting in the same spot, and I don't have to take them off for like an hour, if not, they just feel like a pain in the ass to me, and I can't see, I think I said it before. It's funny that my kids, when they draw pictures
of me I have a hat on, yeah? Because I don't wear a hat, except for when I'm basically, like, when I'm scrubbed down and I'm just chilling, it's like, then I usually put a hat on, but at work, I almost never have a hat. Yeah, I I wonder, people probably think that I'm balding, because I always have a hat on. Like, I always wear a hat to the girls. I coach Shelby's team, and I always have a hat on because it's either after work or, like, I don't ever do my
hair. So I came to a game once with, like, when my hair was longer and it was done because I had to do something all the parents are like, whoa. Who knew that you had this, like, full flow of hair under there. You sent a couple questions, and I also had one that was a pretty No, Bs, kind of hard hitting question that I thought we
should maybe dig into. All right, let's do it. If you're such a great builder and businessman, then why are you still grinding 60 hours a week and constantly putting out fires. Don't you think you should be further ahead by now? Is this directly to you? Yeah? Was it like a listener or, I would assume, yeah, someone that follows the content. So it was like a comment on one of your posts. It was a DM, yeah,
damn. I know I read that little troll Well, you know what? But is it like, I feel like there's, I mean, there's definitely truth in that, right? I'm still grinding 60 hours a week as we see, pulling my hair out. I'm gonna be so self conscious about this now, dude. Like, where are you? Oh, I'm in Turkey getting my hair fixed. No, it's so funny because my one friend, Dom's
bald. And I'll send them these videos where they have these, like, it'll be painters on a job, and they'll tape somebody's head and just use the airless and just tape their face off and just spray it black. And I send it to them all the time. I think that's what we should do. Dude, it's funny that you say that because I actually just recorded a midweek this morning, because I was away, and a lot of it was, it was based on, like, what your time's worth and how you're capturing hours and how your
accounting. For your time, and how that's changed from when I first started in business to where I am now. And I think, like, part of the change in, like, the simplest thing is just everyone says we'll charge more money, and I think that if you increase your rate, or whatever you're charging, or your markup, I think that that's not fixing the problem like that. The lack of rate is a symptom of bigger issues. And I think that, yeah, we're just going to charge a higher percentage, or I'm going
to charge more as an hourly rate, is not really a fix. I think that it's a step in the right direction, but it's there's bigger issues, like bigger fundamental issues than if it were just, I'm going to add $20 to my hourly rate, and that's going to fix all of my issues. I think that it would be so simple. So I think that that conversation leads to like how you're how you're evolving as a business, where you came from,
where you stand now, and where you intend to go. And I don't disagree with the the listeners comment, but I also think that it depends on what you want out of your lifestyle and what makes you tick? Because I, I personally think that a lot of what you do is what you want to be doing, yeah. I mean, like, there specifically, like, the 60 plus hours a week. I don't give a shit about that. Yeah, even when I'm even when I'm old and wealthy, like, I'm still gonna
be grinding it out. Like, I just, I thoroughly enjoy that part. But there, you know, I think we all can attest to the fact that there's days where it's like, I feel like I should be further along. And so I've reflected on this quite a bit
recently. Was listening to, actually, Chris Williams, Williamson's podcast, modern wisdom, and they he was talking about, I forget exactly how he described it, but basically we we delay gratification because we say we'll work really hard right now, so then eventually we're happy, and then when we're happy, we we wish we could go back to when we were working really hard. And it's just like we basically never accept the fact that we are in the golden ages, yeah, and so that's
something that I try to remind myself constantly. It's like, Listen, I don't, don't delay being happy because you think you need to accomplish something, and then eventually you'll be happy, because, as we know, we move the goalpost constantly, right? But I will say that when I read that, where it really kind of hit home, is that what you were getting at, it's, you know, it's not just about charging more money and
like, everything is fixed, because we've all done that. And even on the personal side, you know, there was a period of time where I was just getting behind in my finances, like everything else, like I was just bills are stacking up on my desk, and I was like, I'll get to them later, and, and I mean, this happens every so often, and I'll just talk about the most recent, like, I walked out to my truck last week, and my trucks booted, and I'm like, what the fuck I'm Like, why? Like, and sure
enough, like, one of the dads from school texts me. He goes, is that your is that your truck? I'm like, yeah. And he goes, you're an idiot. I'm like, I am an idiot. And I look it up, and I get $1,200 worth of tickets and and Meg and Julian, they're like, how did you not know? I'm like, I just didn't. And sure enough, like, I look, I go through the mail on my desk the other day. I'm like, here's the $1,200 invoice that, yeah, came
30 days ago. But my point with this is this stuff piles up, and every day I was looking at it, and I'm like, man, like, who knows how many you know, 1000s of dollars are sitting in bills right there that I I'm just like, ignoring because something else is taking my attention, and it started building this, like, insane amount of stress in my mind that because it was so stressful, I just kept putting it off. So the other day I finally, I was like, You know what? I'm not doing anything.
I'm doing two things today. I'm gonna go through every piece of mail and make sure I'm caught up on everything. I'm gonna go through my entire email inbox and make sure I'm caught up on everything. That's it. And I sat down and I created a spreadsheet, and it was like a robust spreadsheet. I'm like, I'm gonna, I'm gonna know everything about everything, like, when, when money's owed to me, when I owe everything. Come to find out I didn't know that much. Yeah, there's a handful of
invoices in that pile, and most of them were paid, yeah? And I remember, like finishing that, I'm like, I feel substantially better, and I've done nothing, yeah, you know, it's the same thing with business, right, where it's, you know, we charge more money because we need to, because. Is we're moving so fast, and we're trying to get work done, and I need to go sell a job, because if I don't sell a job, I can't pay my guy, pay for
my guys. But you got to kind of ignore all that for just a moment and understand exactly where you stand today, because if you don't, and this goes off, goes back to what I think we were talking with Matt Arnold, is that you have to understand where you're going, but until, like, you can't understand where you're going, until you understand where you're at right now, and that's personal and professional, it's like, it's
very difficult. And then again, tied back to like, the happiness mantra is, like, it's very difficult to be happy if you're stressed out, and it's very difficult not to be stressed if you don't understand where you stand, what what, what is in front of you right now and what your responsibilities are, you have to understand what your goals are in business. If, if one of your goals is not to work less working 60 hours a
week can be irrelevant. If your goal is to continue to grow your business where every day it's different than it was the day before, you're going to have to invest considerable time into that business, because there's really no benchmark or metric that you can base the success of Your business off of, because it's constantly evolving and constantly changing, and that's like, that's one of the dangers that I find in in rapid growth, is that you're relying on other people's numbers, other people's
experiences, to to really quantify Your success, and if you don't perform consistently. If the numbers, the bottom line, the you know, margins are always changing, then it's very difficult to gage your success. There's really no benchmark. So you know if, if you're telling yourself, I'm making X amount, and you aren't factoring in how many hours you're working, then,
yeah, I think that that's an issue. But if, if those aren't part of your goals, and your goals are just constantly refining what you're doing, and you're not necessarily baking, basing that off of a time investment or financial metric,
then I mean, it kind of it. It is irrelevant. And I don't know how much it matters for me, I think the important thing is to understand that, right if, if you're ignorant to the amount of time that you're investing, or you're investing that amount of time because you feel that you're underwater and you're
trying to make up for it. I think that that's one thing. But I think that if it's something you want to do, as with what you said, right, there's a lot of people who are uber successful, who would never have to work another day, let alone hour, in their life, that still probably wake up and put 12 hours into their day every day, with work related stuff, because that's just what drives them, and that's what they do. And it would be not only incorrect but foolish to say that they're not
successful business owners, right? I do think that there is value and credibility to that statement for probably most people who are struggling through business and spending 80 hours a week and only getting paid for 20 hours, right? Well, that's a major issue, yeah, and they're because they're prioritizing the wrong things, correct?
Or they're growing the wrong way, or, you know, they think that the path to a more lucrative project, job margins, whatever that me may be, are something different than what they're doing, and they're just throwing hours and throwing sweat equity at their business to try and figure out what sticks and what works. So I think that, yeah, you should be careful of that. But I wouldn't, you know, I wouldn't base that somebody spending a lot of time working on their success or lack
of success. There's a lot of people who their goal is to make enough money that they don't have to work and like, that's completely different. But there's some people that, like, find passion and a lot of self worth and just overall enjoyment in life and continuing to refine and invest their time and and really put the hours into the day and grind. And I don't think
that that dictates whether you're successful or not. Yeah, it's, you know, I think, for me and for a lot of people like, like I said, you know, reading that comment makes me reflect on what I have been thinking a lot about and just where my priorities lie. And I mean, even as simple as answering i. This might come out the wrong way. Well, whatever, answering questions, answering DMS, like constant people constantly.
I've, I have a handful of people that reach out to me, and the only thing they ever say is like, Hey, do you have XYZ? Yeah. And it's just, it's never anything else. It's always like, can you help me with and they, interestingly, the two of them messaged me the other day, and I'm like, I'm just, I'm not, I can't I gotta just say no to this shit. Yeah, because it's like, I'm in the middle of something. They're asking me for
help. It's just, it's constantly one sided. And, you know, it's just, it's frustrating, because I know that where my priorities need to be, and I need to focus on the stuff that is moving the needle. And I think I forget when I did this, but I created this. You know, this is a sheet of paper for those who are listening, but it's basically like, Monday, Tuesday, Wednesday, Thursday, Friday. Here's what you focus on. And so when I come in the office, I that's the first thing I look
at. It's like, All right, today, you know, for example, today, like we're recording a podcast. It's Friday, which is not typical, but today, I'm supposed to only focus on my branding and personal growth. And it gives me, like a bullet list of things that I should focus on. And the purpose in doing that was so that I would have a goal that that was, you know, achievable, and I was making progress on it. So each week there would be this forward progress on the brand, there would be this forward
progress on, you know, pipeline. You know, Wednesdays is my pipeline day, so I'm going back and making sure I'm doing all my follow up with potential leads. And, you know, I was just on a phone call with an architect before we started recording, and he was, he was asking about business development and how we handed handle new projects and and pipeline. And I had was
explaining to him how my brain is all over the place. Today, I was explaining to him how ever since I've been doing this, there's been this like immediate response to it, and one of these days is focused strictly on marketing. And then the lead in pipeline, the lead follow up in pipeline build, and by focusing on them for an entire day, for the last few weeks, we have more people reaching out and more people being aware of what we're
doing. And because previously, I can summarize the way I felt about it is that it would be like, I'm taking my foot off the gas, you know, I'm like, throttling up and down based on what I think I should be doing or what I feel like doing, rather than saying, this is a thing I'm supposed to do and I need to make and I need to make progress at this so let Me dedicate some time to actually making progress, yeah, and it's, it's, it's, you know, I think it's, oftentimes people don't
realize just how small, consistent effort can make such a big, you know, a big difference the I think a lot of times in life, I always will relate stuff to analogies or another profession or industry. And to me, it's like when you think about driving and racking miles up on a car, those miles are from like your small,
everyday little trips, not trips across the country, right? And I think that in order to accumulate those large changes or actual progress, it has to be small, incremental contributions to whatever you're doing, just like finances, right? If you want to save money, very few people are going to win multi million dollar lottery. It's like the small, incremental day to day contributions that you make that actually make a
difference in what you're doing. I had a few more listener questions that we can we can dive into that are kind of, we're going to go into these a little bit cold but what's something that you believed about running a business in year one that you've completely changed your mind about, Well, the obvious one is that you'd have more free time. Oh, yeah, it's gonna be my own boss. I'm gonna make my own schedule. Yeah, I think, if I think deeper at that, it's that I would year one, I
expected to have figured out how to run the business. Like, oh, a year will give me plenty of time to get this stuff in place. And I think the reality, I know the reality. Is, is if I had spent a year consistently building that, sure, but I didn't. I spent a year working and dedicated a handful of days trying to clean stuff up. And when you do that for, you know, a decade, you know, those those cleanup days slip further and further in the
wrong direction. So, yeah, I think I completely underestimated how much time and effort it would take to really set the business up to operate appropriately. Yeah, when I think back to first starting my business, I think that my experience, everyone I had worked for, I think that the general notion was that you had to land jobs based on price and fitting the bill as far as client price, which I still think is true today, but I also that price doesn't necessarily
have to be the least expensive price. It has to align with a lot of their other goals and values, but I can recall sending estimates, meeting with clients, and just being so nervous that I was going to send a price that was too much and that they were going to think I was expensive, and I was so far from that. But I guess you know, the clients that I was being marketed towards, and when you're first in business, the jobs that you're landing typically are because you're somewhat of a
bargain. So I think the biggest thing for me, and just mindset as far as industry goes, in the industry that I'd been brought up working in since I was a young kid, was that you got to fit that price point for clients, and if you don't, there's no way that you can get that job. So for years, I was doing things to bring my price down. You know, whether it was, hey, we we don't have to use a plumber on this job. Because if you're only getting 10 grand for this bathroom, how can I pay
2500 of it to a plumber when I just start out? So things like that, where it's like, how can we really squeeze this price down as much possible to get work, where I realized that, you know, those are I'm just selling to the wrong clients in the first place. So I would say that's probably the biggest thing there, yeah, it's, it's, I mean, there's so many things that I
think we underestimate going into this. And the other, the other component of that is we go into it thinking we want one thing, and we immediately change our mind, you know, it's like, I'm just going to be a small carpentry company, and then it's like, you want to build my house? It's like, Yeah, I'll be a builder. And you know, you're, you're, you're constantly changing or moving the goalpost, and you're trying to do that and build systems around what you're doing. I mean, I think it's a
big reason why Spencer is so successful. Yeah, he's, he is who he is. His his business is exactly Spencer Lewis is who I'm talking about. He in, and he has just built systems around that, yep. But if he had, you know, I think he talked about that on one of the podcasts when we had him on, is that when he hired someone, you know, he wasn't any more profitable, and it was because he was changing his business and everything like everything else had to change.
Yeah, it's crazy that you don't realize that. And it's I think that that takes me back to what I what I speak to a lot of people about where it's like, if you have a handle on your business, like, first off, you have to have a handle on your business. Where you stand now if you want to grow, if you want to make a change, like, you have to be profitable. Now you have to understand where you stand, what type of jobs that necessitates.
But I think that it also is critical for understanding once you do make the move, if it's profitable, if it's working or not, because again, you have some sort of benchmark to go off of to say, Hey, this is worse. This is better. I understood where I was before, and now this is what you know. This is how all of this is winding up, what the numbers look like, what's
wrong, what's better, what's worse. And you have that juxtaposition where I don't think that you can understand how those decisions and how those changes impact your business real world, until you understand where you are. And I think that it gives you something to compare against, and something to make changes with, either for the better or for the worse. But if you I see so many people where it's like,
I need to make more money. I need to make a change. And to me, it's like to make that change is probably only going to magnify your issues and your shortcomings, like typically, if your business isn't isn't successful, doing $500,000 worth of work, do. A million dollars worth of work is not going to make it more successful. It's probably going to make it less successful. Let's, let's dig into specifically when we say you need to know where your your business stands, and how you do
that. Because I was on a did a webinar yesterday with a group from QuickBooks and into it. And we were talking about this, and one of the things I had recommended is having some sort
of dashboard. And I talked about the fact that, I mean, my my team, Julian, Tim and me, have been building this dashboard for over a year, and it just, it became this insanely complicated thing, and it but it was trying to tell me everything at once, and if you relate it to a V like a car, you know, when you're driving down the road, the thing that matters the most is typically your speed limit, right? You know, you could argue how much you paid your parking tickets.
That doesn't tell me that on the dashboard, but that's actually a good point, like it should where it's like, that's information that is relevant, but not showing up on the dashboard. And, you know, and when I relate it back to business, it's well, what do you need to understand about your business? You need to understand number one, you know, at a project level, are your
projects profitable? We'll just talk about one single project, because if you don't, if you if you don't know if a if a specific project is profitable or not, then you don't know if, then you're robbing from other projects that make it look like you're you're all of these projects are great. And so how do you do that? Right? Like you understand what your labor actually cost. You know, we talk about labor burden. If you guys go to our website, we have an Excel calculator on there that
helps you calculate your labor burden. You can download that for free, but that was something that we screwed up bad. Like, early on, we were billing out guys at rates that weren't covering what the true cost of that person was, and we didn't know. So it's like, every hour this guy worked, you know, it was costing the company of five bucks. It's like, well, it's only five bucks. It's like, times 40, times 52, weeks. Yeah,
that adds up real quick. Material procurement, I I think it was, what year was that 2020 I think we did an audit, and we went backwards and realized that we had $100,000 worth of purchases made in a 12 month period that were not accounted for against the job. So they were written off as overhead, like just miscellaneous tools. And we, we actually ended up downloading the majority of those receipts. They were at,
you know, big box stores and things like that. They were, like, $5.45 bucks, you know, all, like miscellaneous part, everything under 100 bucks, basically. And when we went through them, we realized all of this stuff was job costs. So that was 100 grand right off the bottom line that we just never got the bill for because they were small purchases that no one thought was really important. And so for us, we basically said
we are going to have a strict process. And I think we dumped it like you spend it, you send it, meaning if you spend the money, you send the receipt. And for two, I think two or three years, we essentially had this missing receipt report that when a receipt didn't have an attachment on it, a report would go out to the whole company and it would say whose card it was. No one wanted their name on that report, yeah, so and so, it just really instilled everyone to, like the the pressure to make
sure that they were capturing it. And the following year, we had, like, less than $5,000 of missing receipts. So that being said for, I mean, this is obviously cost plus, but regardless, well, it doesn't even matter, yeah, so that's what I'm like, regardless. This is a shortcoming on the budget end of things as well, right where it's like, what? What's that conversation like? Or how are you handling that
internally? Because I'm assuming that it's not just like, oh yeah, we could have added $30,000 to three projects, and we would have been fine. How are you accounting for that from a budget perspective, to ensure that that's accounted for in the jobs? Because it's to say hey, that we're $100,000 short. If those projects wouldn't have allowed you to charge the additional money, or you wouldn't have been able to manage that budget to account for that.
Well, that's the last point. That's the last point I was going to make is like the budget overruns is the last where, you know, fixed costs would be a great example, where, if you're spending money and you're watching your framing line item deplete, you know, every week or every day. Hopefully every day, like, you can just see how much money you've spent against it,
when, when you're running out of cash. It's just like a personal like, when you don't have much more, if you don't have any money in your wallet, you're, you're, you're gonna stop spending and or as that money, like, reduces, you only have 20 bucks left, like, you're probably not going to go out and spend the $20 for risk forever, I guess frivolously, frivolously, frivolously,
forget it. Willy nilly, I'll call it, but so that, like though those three things, you implement those three things, and you'll be you feel way more confident about where your project stands. To your point, the $100,000 that's a lot of money. And could we have build on those jobs? Probably they were multi million dollar projects, and they were spread
out across like eight jobs. Yeah. So it wasn't just one job, and, and, and, or there was probably a lot of things that were bought that didn't need to be bought, where that particular site super if they knew they were spending, if they had spent all these little micro purchases, but their their miscellaneous line item on the budget was being depleted, they would look at that and say, You know what, I guess I don't really need a new shop back. I'll drive to the city and grab
the one on storage unit rather than buy one. Yeah, and that's, you know, in because it's exactly what I'm trying to do as a business. Is like, Where do I stand as a business? The the whoever's running that job needs to understand where the job stands, and they're going to make decisions based on where the job stands. It's like, Hey, I got this much money to do this task, and it's like, and I don't, and that that's it. I don't have more money. There's not more money I can go ask for.
I was told I have X amount of dollars for this particular task, and it's my job to get it done. And I think that that, that really reaffirms what I was saying about like, you can't always just tap into more budget, right? Like you can't just say, hey, we need to make more money. We can charge more money. Because that's not always the case. There's a couple of ways to make money, though. One
is sell more or, you know, spend less. So it's the it's the same thing when you're managing a budget for a project, because at the end of the day, the budgets for a project are our bottom line. But if you if you can't increase budget, if you can't sell more, what are you doing to protect your margins on that project and not go over budget? Is it through efficiency? Is it
through better systems? Is it through tracking those budgets more appropriately to understand like, hey, yeah, my, my super understands that we only have x amount in consumables, and that's 90% gone. So we need to scrape together to figure out where all this stuff is, or how we can meet this budget, rather than say, hey, we can just go spend this much more money on that, or understand where that's coming out of from, from
another, another line item in that budget. I think that for me, that's pretty easy to manage based on my scale, but I think that the the challenge is when it's not just you, and there's many other people managing those projects and having a hand in those projects, and there's communication breaches and systems that aren't robust enough to support all of those decisions while maintaining efficiency. I think that that's that's the struggle for people with growth and with change and
having some sort of metric to go off of. There's a lot of cooks in the kitchen. There's a lot of people involved, and a lot of moving parts to manage all of that. Yeah, for me, it's for me, it's fairly simple. You know, it's me managing those numbers, it's me analyzing those numbers, maintaining the budget, the communication, and obviously I'm limited as to the amount of work that I can do. But that being said, there's also not a lot of
waste, right? So I'm limiting my exposure, I'm limiting my debt, my damage, and I'm able to guarantee my profits through efficiencies and through managing that really day to day to guarantee my profits. Where I think a lot of people, there's some fluff, there's some burden involved there, and I think that it becomes tough to manage. And when you have $100,000 across eight jobs at the end of the year, you know that that's a lot of money that is just that's coming out of our revenue,
that's coming out of our bottom line at the end of the day. And when. You're operating an industry with tight margins and a very competitive industry. I don't care how big you are, $100,000 can affect a lot of people, yeah. And I think that's one of the benefits of being a solopreneur, is that you you like you said, you don't have a lot of waste or or, in other words, a lot of overhead, yeah,
and it's money and money out. And I think when these guys, you know, go from a single man show to then starting hiring, starting to hire employees, there's this disconnect from job profitability to business profitability. Yeah, I know I faced it. We were super, you know, we were really profitable on projects. So individually, looks great, but, you know, really profitable on projects still only equals so much cash,
yep. And at the end of the year, it's like, you know, if we're spending all of that cash or spending more than that cash, then now the company's not profitable. And, you know, and I think for the latter part of the less last decade, that's where I
was. I was just overspending my overhead and, and I'd like to sit back and say it was all strategic, and it was part of the growth and, but, you know, no, there was definitely some foolishness to it, where it's, you know, I was doing things that were bigger and grander than I probably should have. And, you know, did they pay off in the long run? Sure, I guess you could say that. But the reality is, is I was, it wasn't, I wasn't going into it knowing that I should be spending this
much on marketing, but instead, I'm spending that. It was just, I'm just going to spend it and figure it out. And which is a, which is terrible, a terrible piece of advice. We know what we spend on marketing and when I'm if I'm going to overspend, it's not, you know, I'm not, I'm not saying I won't overspend on marketing, but I, what I am saying is that I know I'm overspending on marketing. Yeah, and where
are you going to how you can account for that? How you going to make going to make up for that, or where you going to borrow from, right? So that you're just not completely going in the red, right? Spoiler alert, Mark Williams wrote a
bunch of questions for our Omaha trip that's coming up. Yeah, I was reading through them today, and one of the questions that caught me off guard, where I was like, I'm not sure I know the answer to that, but it was if you were given, I mean, if you were given $100,000 to spend in your business or on your
business, what would you do with it? Like, if you were handed 100 grand today, and I like, now, I think I might have a better idea, but I think that that that was a difficult question, yeah, but my mind goes towards because, and I think it's just based solely around my type of business where I'm looking to leverage the Lean nature of my business and efficiencies and really just trying to create higher profitability and not
necessarily increase sales. Like a lot of people would be like, I'd dump it into marketing right where, at the end of the day, you're looking to increase sales, and in order to increase sales, you have to put more people in place to get to generate more of that work. So for me, I look at it more like, how could I put $100,000 into the business that will increase
my margin? So for me, it's like, potentially equipment, um, or processes that would allow me to complete the amount of work that I want to do in a shorter amount of time, that costs me less money to put that work in place. What what equipment like? What's your immediate thought there? I don't know, with regard to me specifically, but like, what came to mind is, and this is somewhat random, but on my business Instagram profile, this dude came up, I think I sent you
this, and he's a tree guy. And like you think most tree guys, right? You need how many people to handle pre work, right? That's not by yourself. And this guy, instead of hiring people,
he bought a truck that the bed and the cap can come off of. He has a trailer he can put his chipper into this he bought a mini excavator that he customized a trailer for so he can literally go climb a tree, cut a tree down, get in his excavator, put it on this trailer, put it in his chipper and perform this tree work, really, with minimal physical effort, with a very low overhead, liability and risk from an insurance perspective, and employees and make great
money not having to put a ton of work into place, as far as like volume and treat people. So to me, that's like he is creating. Creating higher margins, rather than looking to sell more work and creating efficiency within his business by investing in equipment and really unique processes and systems to
generate a higher amount of work quicker. So to me like that's where my brain somewhat goes, where it's like, well, rather than saying, I want to increase my sales volume, what if I could find a way to make the same amount of revenue with 30% less labor put into it? So that's where my mind goes, where it's like, where could I invest that money to create better efficiencies within my business, so I could either work less, or if I work the same amount, I'm going to be making 30% more money,
right? I love that. I love that account because it is, it's just, I mean, his content is great too, yeah, like therapeutic watching, you know. And I think that, I mean just watching machinery. I, you know, build with Aaron, our buddy, you know, his content, I just sit there and watch these machines. Just like so easily handle material, whether it's tree work, site work, whatever. But I figured it had, it would have something to do with your excavator.
Well, I mean, even, like, I think he posted something today, or, I don't know, recently, it came up where he's like, typically, if you're climbing a tree, you're dropping everything so that the people on the ground can manage it in a certain way. And he's like, I don't have people on the ground. I have
equipment on the ground. That's me, so he can basically drop everything however he wants, which is saving him time, more efficient, and then can get in a piece of machine that's like air conditioned, and literally just pick it up with this attachment that he has, put it into a chipper, not move it twice, not have to sort it. And it's like, Damn, that's just, it's a no brainer, and you need the cash to be able to invest in the
equipment. But it's like, you're 100 grand, like you're getting, you're getting set up, nice, for sure, and like you also don't need, you know, 12 tree jobs a week. Yeah, to stay busy, you're not having people call out. You're not getting hurt. You're You're it's less wear and tear on your
body. You're managing your risk, all in an industry where, like, I think that that plays a huge part in it, as far as insurance, safety, everything else and to create efficiencies in what would seem to be like a brute task or just a very blue collar job. I mean, That'd be dope. It like if somebody offered that. I'm like, Oh, yeah. Like, this setup is legit.
I would love to think that I would spend the money on that, because I love the idea of it. And personally, I told bank the other day, I'm like, I think I might buy an excavator too. What? Like, I gotta fix the driveway up in New Hampshire. And she's like, and I'm like, by the time I spend the money and hiring someone like, I could have made 30 payments on that excavator, yeah, dude, and then I could just rent it out, or
just not, yeah or not. And she's like, I mean things ridiculous, but where my mind goes, it's like, all right, someone hands me 100 grand. What do I put it in? And all I'm thinking about is increasing lead generation. I and, like, it's marketing, right? So, like, you need to spending money, and then you're gonna, you're getting money to spend money, yeah, and it's like, I'm like, All right, how do I deploy 100 grand into marketing that I could 10x where it's like, you
know what? Like, what? Basically throw $100,000 at my biggest pain point in marketing, and my biggest pain point right now in marketing is that is one that I don't know the answer to, which is the fact that we are known, we're being brought to the table for these projects, and we're going, and we're going, I mean, the fact that five times, now I've been, you know, I've we've bid work because they're really great projects and we want to be
considered. And all five times the clients are like, You guys are amazing. Your communication is amazing. I love the way that you're you put together the proposal. You clearly understand how to do the job, all this stuff, and they outweigh all of that based on the fact the other guys built 40 homes, he's like, he's just done it 40 times. But the What's crazy to me, though, is that, like your mindset and mentality for penalization is similar to what
I'm saying. Right? Where it's like, you're creating efficiencies and spending money that are going to make you 10x on the back end, but then on the other side of the thing, you're like, I just want to drum up more work so that I could put more work in place, which is just going to cost me more money at the end of the day. Where it's like, I don't know. I think it's a cabinet shop, right? Are you going to invest in a CNC?
Are you going to invest in, oh, 100 grand in the cab shop, CNC, for sure, automatization, as far as finishing goes where it's like, you like, there's, there's, I don't know the exact name is business. I met with him once he
does, like, knock down cabinetry and stuff for his business. But he went from having, like, a dozen employees to having two and instead of spending money on the employees, he spend money on all the optimization with, like, the CNC, all the breakdown cabinetry, the finishing where I'm like, So you spent on that once. And like, you don't have people calling in sick. You don't have somebody spraying something different than the
next guy spends it. And I'm like, to me, if you can afford it, that's the move where it's like you, you are creating systems processes, where you can either put more work in place in the same amount of time, or it costs you less money to produce that one unit of work, which that's like a money printing machine to me when you can figure out those type of
efficiencies. But yeah, in what? On one hand, you're all about that with like, AI and penalization and off site construction, but on the other end, you're like, Nah, just more work. I was talking to Tim the other day, and, you know, we were talking about, like, these social media brand deals, and we were just, he was he just, like, a space he didn't really know. And I was explaining it to him. I'm like, the screwed up part is, is when a good brand deal comes around, and it's like,
yeah, that's great. Like, you know, I get to make a little bit more money this year. And the reality, like, the initial thought, is that goes into, you know, my bank account, and we deploy it within the family, and then I get the money, and then I deploy it right back into the business, and like, Yeah, let's
invest it in that. And what I was trying to get at with him is it would be interesting to have mapped that out over time, where it's, you know, all of this reinvesting, and how much money that, you know, I could have pulled out and just continue to keep, like, the baseline of the business, but instead, I've put back in to know if have I really got a higher ROI on it, right? Like, I'm basically, like, lending the money back the
business. But am I ever really paying myself back for it, you know, break even, or am I paying myself back at it with compounding interest, dude? The thing that's crazy about that too, to me. And it's so hard to really wrap your head around where I think about jobs in the past, right, where it's like, I ate $5,000 there, I ate
$10,000 there. And then you think about it at the end of the year, right, where you're you're new in business, like most guys are trying to make $100,000 when they start their business, yeah. And it's like, if, if, right at the end of the year, say, you made $100,000 and then you have, like, 150 grand worth of mistakes and fluff and burden and everything else. And it's like, if I wouldn't have made those mistakes, would I have made a quarter million dollars? Like, would it have just been
that easy? And it's the same thing with you. It's like, if I didn't have that one expense, or if I were to have not put this back into the business, would I have made a half million dollars? Right? And to me, like, it's not quite that simple. I mean, I think about it even, you know, right? Buying equipment, buying a truck, it's like, well, if I didn't buy that truck and I just kept my old truck, would I have another $100,000 in five years, or would I have just spent that on something else?
It's hard to, it's hard to wrap your head around, yeah, and it's because I think it's the latter. I don't think it's like, I don't think you're actually, you're not actually getting that money back, but it is, you know, it's, I wonder. I mean, it's a personality thing, because I wonder, is there going to be a point in time in my life that all of a sudden I'm I, I don't deploy it back into the business as much, and then I
just watch my personal income go up. Well, yeah, and it's like, if I didn't have that one expense for the past 10 years, would I just be in a completely different like, if it was just that simple? And to me, that's where it comes down to, like, fundamentally, there's much more going on. If, if it's one thing that you have to fix, it would just be too easy, right? Like, there's there. It's the incremental, just like we were talking about earlier, it's all of these little things that
are going to add up to be the big things. If it were as simple as reducing this one cost of your overhead or getting rid of just those receipts that you didn't track, or adding $15 to each employee, like it would be so simple, it's just not exactly we went through. We were going through our overhead list the other day. We printed out all the transactions, and we
were highlighting things that we don't need anymore. And they were like they were software pieces, Tyler, I'm talking like $20 a month software. Oh, yeah. I texted you that about that, like, a month ago, yeah, and they were in. He was like, Hey, make sure you cancel that. Meanwhile, I have two vans that I've owned for two years,
and one of them needs $18,000 worth of repair work. So instead, I took the other I took the other van, I brought up the Mercedes and traded them in, and now, now I have a $1,500 a month payment. Yeah, that could be an excavator, dude. No shit. I'm like, I'm like, Thank God I saved that 20 bucks a month, because now, yeah, now spending another 1500 for two
new vans. It makes no sense. And like you said, it's in, you know, when you said the incremental thing, I think, you know, from a personal level, when I was going through that, I was like that, when I had overwhelming amount of mail, I'm just like, Dude, there's so much, like, I have like, six credit cards that all have payments due coming up. And I'm like, I don't even know where I stand with that right now. And if it was just one credit card, I would know, yeah, and it's
like, not, not that I have no idea. Like, obviously, I can log in and see it, but it just, you know, we we go through life, and we compound all of these little things that just continue to add up. And, you know, I was going through our transaction, and it's like, man, like, Spotify, Apple TV, Netflix, Comcast, Disney plus Hulu. And I'm just like, This is fucking crazy,
yeah. Like, we you get rid of cable, and then you're spending more for this, like, for for 18 different streaming platforms, then my, my four year old fucking ordering $30 rental movies. And I'm like, for 35 you can buy it, like, stop renting the movie. The other thing that I've never really have been able to wrap my head around right, where you have these, like massive businesses and like, their overhead right, is millions of dollars every year. And it's like, where, if you were just to
cut $100,000 out, would you make $100,000 more? Nope, but it like you think that you would right where, it's like, Yo, we could just get rid of $100,000 worth of overhead. And now I go from making 150 to $250,000 a year. It's just as simple as that, and like it doesn't
work out that. I think the only way it works that way is if you get rid of the 100 and you immediately take it well, I also think that like it like the reason, that's the reason why we continue to spend so much money, because at the end of the day, it's like, well, that's only X amount per month, and it like, our overhead is already a million and a half dollars. So what's another 80,000 right? I mean, I was just talking my
buddy stopped by yesterday. I haven't seen him a couple years, but I talk to him every now and then he's like, my my overhead from my plumbing companies, you know, 80 some $1,000 a month, and then I'm looking to pull in 100 130 so right at the end of the day with, like, I could be profiting $350,000 a year, and it's like good money, but at the end of the day, like, that's a big nut to be bringing in $80,000 worth of work every
month. And you have one month where you're $10,000 low, or your sales aren't what they were, or you only sell 70 grand. Like the risk there, like the rewards great, but the risk is also really great, and like, one or two things go wrong and the margins just aren't there for me, personally, to justify having that much risk and that much exposure, where I think that there, there are ways to make a living within this industry where you don't need to expose yourself to that degree.
And that's, you know, that's low on the this the scale of exposure for a lot of people. But at the end of the day, like, I think that you can do it with like, you can make this happen with a lot less if you want to. And I think that people get caught up in the mix, and, you know, trying to compete with other people or compare themselves to other people. And
I think that there's ways. Do this more intelligently, where you don't have to necessarily put yourself in such a whole month to month, which will probably free you up a little bit and reduce the level of stress and anxiety in your life. Yeah, I think, I think to to kind of put a bow on that, if you're you know, I know you guys are listening and like, Dude, you this is, this is my life right now. I'm stressed. We got
an email yesterday. I actually want to respond to it before the end of the day, but, you know, he's like, I'm giving I'm closing my business. I can't do this, and I'm way too stressed out. And I was like, I can't respond to this, like, on my
phone. I gotta sit down and really chat with this guy, but it, you know, this is, it is, like the first and most important thing you have to do is just shut your phone off, sit down with a piece of paper, or whatever it is, and go item by item, and just get your life, your business, whatever, your finances, just in front of you. Where do you actually stand? Because that exercise will, you know, create clarity, whether it's more stress inducing or less stress inducing, it doesn't
matter. At least there's actual clarity. Yeah, and I will say, you know, you get all that information out, and you don't know what your first move is, whether you're you can either work with a financial advisor to help you on that, or work with use AI, yeah. And one of that was actually one of the things I was messing around with, is like, all right, I'm gonna give it the information on my credit cards, just like, hey, this is the interest rate. Here's the terms on the credit card. Here
are the the here's my limits on each card. Tell me how I should, you know, be managing my finances across these cards so I continue to earn points and and leverage and build credit. But I'm not doing it foolishly. And come to find out, the card that I use as my primary card is the worst card I should be I'm
using. It's like no, no. Use that one only for this and keep your keep your spend per month under this amount, and move all of your primary purchases to this card because it's less APR, but you'll still earn the points. That's i i think it ultimately, it comes down to, again, a bunch of those little things. But it typically, it's not just one fix. And I think even, even with regard to, you know, the charge more money, where it's like, Hey, I just got to charge more
money for my employees. I'm going to add $10 to their hourly cost. Where you think that that's going to make the fix, but if they use One Hour inefficiently that day, right? You just made an extra 80 bucks, like you're paying much more for that employee than in one hour, then you up their rate throughout the day. So it's like you have to focus on what you're investing into these projects and how you're managing people's time. You could charge as much as you want if you're over
executing, you're over delivering. You're not managing the amount of labor that's going into projects. Like it's not always just the numbers, as far as your hourly rate or what you're charging, or your overhead, or your markup or your margins. One last thing I wanted to dig into here, which I thought I can recall a specific instance where somebody brought this up. But do you ever feel guilty delegating tasks you used to do yourself, and how do you work through that?
Um, no, no, I've never felt guilty about that, but I think it's primarily driven by the fact that just because I've delegated a task doesn't mean I'm going to, like, not step up and help. Like, there's the times I do feel guilty is when you know, a big delivery or something that's kind of like,
shitty end of day delivery, right? Like, yeah, and I'm and I have to leave because I have a meeting, and it's like, and then you get the classics, like, Oh, of course, delivery truck shows up and Nick can't help, like, Yeah, I do genuinely feel guilty. Because if I didn't have to leave, you know, I would, I would hang out and just get it done. And I remember, you know, white oak was an example. There was concrete. Guys were on site. Whole wasn't prepped correctly for them. And they were, they
were kind of pissed. And they were like, it's this isn't our responsibility. I'm like, You're absolutely right. And I went and got a shovel, and it was freezing out, and I put my jacket and hood on, and I just sat there, and I just dug the hole out by hand. And 10 minutes into it, all the concrete guys were like, all right, fuck it, we'll help. And they just all
gone the hole, and they we dug it out by hand. Which it was supposed to be dug by an excavator, like, but I wasn't gonna let these guys wait, like, lose an entire day, and you don't have an excavator, and I don't have an excavator, further furthering the point. Meg, I can, I can specifically recall, I shot a project with fine homebuilding once where I was up in the attic and we were renovating a kitchen, and we had to put a flush beam in, and it
was all blown in cellulose. So it wasn't like enough of a job to get a vacuum in there, like it was one beam in the kitchen. So I just went up and, like, moved it all over, and the guy shooting it took, like, a pretty cool photo of me with, like, the light coming through the roof, vent in the attic, and sent it to me, and it like wasn't for their magazine. He just sent it to me, and I remember posting, this is years ago, like that, I'm proud to be on the tools, like no job task is above me.
And a lot of people contradicted what I was saying or didn't agree with me. Where it's like, as the owner of the business, your time is much better spent doing other things. And I agree with that. And I think that there are certain aspects of my job right, especially when I'm charging a client a premium for my rate, that I don't need to be doing stuff like that. But I also think at the end of the day, it is important, like, maybe it's not right. Maybe I can't charge a client my rate to
go up and do that for an hour. Maybe that's a freebie. But I also think that it shows a lot to the people around you, to your team, that you're not above that, and that you're willing to lace up your boots and get dirty. But I also think that, like, there's a lot of things that you should be willing to do, or go to bat for your team and not just put on somebody somebody else, because it's not what you want to do. I think that it has to be a calculated decision where financially or
from like an opportunity cost. It doesn't make sense for you to be doing that type of thing. Yeah? At the end of the day, don't ask something. Don't ask someone to do something that you wouldn't do, not saying that you have to do it. But if it's something you wouldn't do, then that's where I think there's a necessary guilt. Yeah? Well, if you guys are listening to this, we're going to be headed to
Omaha this week, and hopefully you're joining us. If you're not, then you'll either have to get a last minute ticket by DMing Tyler or I and showing up in Omaha. And if that's not an option, then maybe we'll see you in Chicago in the fall, but stoked to I'm stoked to get to Omaha. This is what our seventh summer. Yeah, seventh August today, bananas. So we're that's where we'll be this weekend. All right, guys, make sure everyone signs up for the
newsletter as well. Nick and I are looking to be doing, putting out a monthly workshop via zoom. And if you want to get involved with that, if you want the link, if you want the schedule, if you want whatever resources, we're going to be diving into on those workshops, the only place to get that, it's going to be through the newsletter. So make sure you sign up there, you can sign up modern craftsman.co we have links on the Instagram channel,
whatever you need. There's a million ways to get on there, but definitely sign up for that newsletter. Appreciate guys. Talk to you next week.