June 26, 2025 • 37 mins
Most small businesses never look beyond the day-to-day—or maybe a year out at best. But if you want to build real value, you need a plan that reaches further.
In this episode, Chris and Dennis walk through what a true five-year business plan looks like: how to set short-term goals, when to reassess and pivot, and why defining what business you’re actually in is a critical early milestone. (Hint: Dennis thought he was in the ski business. He wasn’t.)
Whether you're starting fresh or already in year two, this episode lays out a clear, practical path to growth—how to set real goals, track your progress, make smart adjustments, and stay focused on building a business that lasts.
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Episode Transcript
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chris (00:02):
When you're starting a business, it's easy to focus on
the day-to-day Getting thingsoff the ground, making sure of
the first sale just keep thingsmoving.
But if you want to buildsomething that lasts, you need
to think further ahead, asDennis puts it because, remember
, a goal without a timeline isreally just a dream.
In this episode of MonkeyBusiness Radio, we're diving
into the five-year plan.
(00:23):
While every startup needs ashort-term, medium-term and
long-term strategy, If you'restarting out, or even thinking
about starting, this episode isa blueprint.
We'll help you lay theshort-term, medium-term and
long-term goals and make sureyou're building a business, not
just chasing busy work.
We have a great show for you,so grab a cup of coffee, sit
back, relax and welcome toMonkey Business Radio.
(00:45):
Hello Dennis, how are we doingtoday?
Good Chris, how are you Good?
Good, what do we got on theagenda for today, the five-year?
dennis (00:57):
plan.
Why every startup should have ashort, medium and a long-range
plan.
chris (01:02):
All right, good, this is kind of an amalgamation of a lot
of our podcasts we've done inthe past couple of weeks.
Here We've been touching onthis topic.
Today we're just going to diveinto it a little deeper.
dennis (01:12):
One of the things, chris , that I notice about a lot of
business owners is when theystart their business, they
usually start it for a varietyof reasons.
The auto mechanic he wants tobe his own boss.
The restaurant owner he's gothis own recipes and he's got his
own style and he wants tobecome the restaurant owner.
He wants to be the head chef.
But a lot of times and theseare people that I know very well
(01:36):
, people I associate with a lotof times they don't have a
medium and a long range plan.
Their goal is to get therestaurant open, get up and
running.
You know, one of my friends justwent back to work for a
mechanic.
He went out on his own for twoor three years, struggled a bit.
I mean, he's a good mechanic,he just was a little light on
(01:56):
the business end of things.
That was the thing that madethings very difficult for him.
And that's why every startupshould have a short, medium and
a long range plan a one year, athree year and a five year plan.
And that's why every startupshould have a short, medium and
a long-range plan, a one-year, athree-year and a five-year plan
.
And in looking towards afive-year plan, a five-year
long-range plan.
Then we can develop steps alongthe way six months, 12 months,
strike points along the way,yardstick measurements, so we'll
(02:20):
know whether we are closing inon that five-year goal, that
five-year plan.
Remember, a goal without atimeline is really just a dream.
chris (02:29):
Yeah, there's got to be some hard and fast strike points
along the way that you want tomeet and this is going to be
tough, especially because, likeyou said, you get your hands
full just starting out.
But, like many of the topics wetouch on in this podcast, the
earlier you start the better.
And all these different thingsfinancial planning and all these
things oh, absolutely.
dennis (02:48):
I remember a young kid.
He was a student of mine way,way back.
He was in college at the timeand his goal well, his idea was
he didn't want to be like hisparents.
His dad was a really high-endmechanic and his mom owned a
horse farm up in the WhiteMountains.
She did training and teachingriding.
(03:09):
She did shows a whole varietyof revenue streams from her
horse farm and he said I don'twant to be like my parents, I
don't want to be working likethat.
He said I'm just going toinvent an app and then I'll be a
millionaire.
Actually, he was probably inhigh school when he said it.
He was a student of mine in amartial arts school that I owned
.
He popped in and out as he wentoff to college.
Great kid, really good kid.
(03:31):
He and I were sitting down six,eight years after he said that
to me.
He was now out of college andhe had a job and he was doing
his thing.
I said how's that going?
How's that app thing going?
And he looked at me he goes youremember that.
And I said, oh gosh, yeah, Iremember that.
And he laughed.
And he goes yeah, that was.
I don't even know why I saidthat.
I don't even know why I thoughtthat, but a lot of younger kids
(03:53):
think that they have a.
They see that somebody inventedan app and became a millionaire
.
Well, they don't see the workthat goes behind that Inventing
the app.
That's like 5%.
Yeah, that's just an egregiousexample of a goal without a
timeline is nothing more than adream.
So, yeah, so when you'restarting out your business, like
(04:13):
we always say, chris, don't goto where the puck is.
Go to where the puck is goingto be when you get there.
Start out early with a visionto see where do you want to be
in five years and how are wegoing to get there?
So the questions that I alwaysask is what business are you in?
I used to be an innkeeper.
(04:33):
I owned an inn.
I was a bed and breakfast.
It was in the White Mountains.
Am I in the ski business?
Am I in the snowmobile business?
Am I in the golf business?
I am in the hiking business.
What we found out is we are inthe three-day getaway business.
Doesn't matter what you'redoing when you come here.
In fact, in the wintertime wewere very, very successful and
(04:55):
we had far fewer skiers thanmost inns and hotels and bed and
breakfast Because skiers ifthey're cross-country skiers,
they might cancel last minute ifthe snow conditions aren't good
.
Downhill skiers if they'recross-country skiers, they might
cancel last minute if the snowconditions aren't good.
Downhill skiers if it's goingto be a rainy, warm, nasty
weekend, they might cancel lastminute and they don't want to go
skiing.
But if people are coming awayjust for a three-day getaway, a
(05:17):
three-day break in their normalroutine, they're coming no
matter what.
That's interesting.
So what business are you in?
We were in the three-daygetaway business.
Four days is different.
We try to turn them over twicea week.
You want to bring in a fullhouse on Friday, check them out
all on Monday, bring in anotherfull house on Tuesday, keep them
for three days, check them outon Friday and then just start
(05:40):
the cycle all over again.
Other questions that you maywant to ask yourself right out
of the gate year one are youproperly funded?
chris (05:49):
Yeah, this is a big one.
I've had a personal experiencewith that coming up a little
short that first year and itdidn't work out.
What was that?
It was a toy company we starteda long time ago.
dennis (05:59):
You told me about that.
Yeah, you did Right, right,right.
chris (06:02):
Yeah, I remember, because my brother took one look at our
plan and said you're notproperly funded, so we'll work
our way around that.
dennis (06:08):
Turns out.
What products and services areyou selling?
Who is your target market?
Sometimes you ask people who'syour target market and he's a
roofing company.
Well, anybody.
Well, how do you identify thatif it's anybody or everybody?
If you're going to advertise bydigital marketing, you've got
to identify the neighbors, theneighborhoods, the value of the
(06:31):
homes where they're located.
So identification of yourtarget market is huge by age, by
income levels.
chris (06:38):
We talk about that a lot here because of course gutter
business on Cape Cod very cleartarget market there and it's
your more elderly types that owna home?
dennis (06:47):
Sure, so you need a marketing strategy, a pricing
strategy in place.
Proof of concept is huge.
Proof of concept is an oftenoverlooked component Proving the
concept.
Is the business model viable?
Do people really need and wantyour products and services?
And if they do, then your proofof concept should pan out.
chris (07:07):
You kind of explained that in some of the past
podcasts about how you kind ofdid that at Gutter Monkeys.
You actually started doing allsorts of different work decks,
roofs, all sorts of differentthings.
Figure it out after a whileabout the gutter cleaning
Basically no one doing it.
dennis (07:22):
Sure, we answered the question is there enough gutter
cleaning business to keep two,three, four, five crews busy on
Cape Cod all year long?
And the answer was yes.
Now, no one had ever done it.
That's why we needed a proof ofconcept.
If you're in the restaurantbusiness, let's take Cape Cod.
There are so many fantasticrestaurants on Cape Cod.
(07:43):
The proof of concept initiallyis yes.
Is your food good?
Is it appealing to the targetmarket?
Number two is can you putenough people through your door
to make it a viable business?
And lastly is can you do thatall year long, even during the
off season?
It's a tough proof of concept.
chris (08:03):
It is.
Yeah, we ate out at aparticularly nice restaurant and
unfortunately it was too badbecause it was a brand new
restaurant.
The owner was excited about it.
My meal came out it wasprobably one of the worst meals
I've ever had and I was just Ifelt so bad.
Normally I would go and send itback, but I felt so bad for
this guy because he had justcome out and said you know, this
is a brand new restaurant, wejust opened it.
I'm so proud.
I'm just wondering how did thatmeal come out of that kitchen
(08:26):
like that?
You know he's got a greatlocation, beautiful inside, just
all redone, and the food cameout.
It was just awful, Was thathere on the Cape.
Yeah, it was on the Cape, nokidding yeah.
dennis (08:36):
We'll leave his name off the books.
chris (08:37):
We're going to leave.
Normally I would send it back.
I actually probably should havedid it.
I kind of did this service.
I should have maybe pulled themaside and just told them about
it.
But it kind of struck me thathow did that happen?
How would that happen?
How would a food like thatleave a kitchen of a brand new
restaurant like that and be inthat state?
But oh yeah, it was too bad.
dennis (08:55):
So by the end of year one.
You're a startup.
One of the most importantpieces to your puzzle is your
inner circle.
So by the end of year one and Idon't care what business you're
in you need a banker.
You need an accountant, alawyer If you have partners in
your business, or consultantsthat you use, business mentors,
maybe that you use all withexperience, knowledge and skills
(09:18):
by the end of year one you wantyour inner that's what I call
my inner circle.
You want your team in place.
Don't wait till you need alawyer to find one right.
Don't wait till you need abanker before you go look for
one.
You know you want to have yourbanker.
You want to have your people inplace.
You want to have youraccountant in place, our
accountant, dave boy.
(09:39):
We talked to Dave probably fouror five times during the year
before tax season.
We ask him questions, we throwideas out to him and he throws
us information on tax laws thatare applicable to that.
So build your inner circle,banker especially.
And again, as I always say,don't e-bank exclusively.
I don't do any e-banking at all.
(10:01):
My partner, andy, or or myoffice manager one of us three
walks into that bank at leastone or two times a week, during
busy seasons three times a week.
I'm in that bank.
I know everybody in the bank,so if I ever needed some advice
or a line of credit or anythinglike that, when I had a check a
customer's check came in odd theother day quick phone call to
(10:23):
my bank.
Customer's check came in oddthe other day Quick phone call
to my bank.
They know who I am.
They cleared it up in a minute.
So yeah, build your innercircle during that first year of
business.
Have your banker, your lawyer,your accountant, just have all
your people as a part of yourinner circle and converse with
those people frequently, talk tothem, do dinner with them once
in a while.
Make them part of yourfriendship.
chris (10:45):
Yeah, you know, touched on that point and I know this
was always a pain point formyself.
But they're going to tell youthings you don't want to hear
and that's really important andI know personal experience.
That's a tough thing and I knowyou've talked about it on the
podcast as well.
But it's good to hear,especially in that first year
when you can make changes andyou haven't gone too far down
the line.
dennis (11:02):
Yeah, you don't want to surround yourself with yes men
all the time.
If two people are thinkingexactly the same thing all the
time, then only one of them isdoing the thinking.
We just had a little meetingbefore, right Before we started
the podcast, Four of us at thetable.
Not all of us agreed oneverything, but that's okay,
right.
chris (11:22):
Learned a lot.
dennis (11:22):
Right, learned a lot as far as medium range plans.
We get into year two and three.
We've got a full year, or maybeyear and a half, under our belt
, we've got some metrics to workwith and so during this we're
going to call this our mid-range, our years two and three First
thing I say is, if you'reaccomplishing all of your goals,
you're not setting the bar highenough.
(11:44):
First thing I say is, if you'reaccomplishing all of your goals
, you're not setting the barhigh enough.
You want to set attainablegoals, but you don't want them
to be so easy, easily attainablethat you can accomplish them
all the time, because you're notgoing to be pushing the limits,
you're not going to be pushingthe envelope and leaving your
comfort zone.
So, set attainable goals andpush the envelope on those.
(12:05):
It'll require that you leaveyour comfort zone periodically,
not too far outside of yourcomfort zone, and just push that
envelope a little bit.
During years two and three.
There's the look back.
You're always looking back.
What did we do our first yearand now we're into our second
and third year.
How are we doing?
How are things?
chris (12:24):
going.
This is where those financialrecords are so important.
We talked about last week youknow that ability to go look
back and actually learn aboutwhat's been going on in your
business that you might not evenbe aware of.
dennis (12:35):
Yeah.
And then ask yourself againwhat business are we in?
Is it still the same or has itchanged?
And getting back to my days asan innkeeper, I remember those
first year or two, first coupleof years we were advertising ski
packages, we were advertising awhole bunch of other different
things until I realized we'renot in the ski business, we are
(12:56):
in the three-day getawaybusiness, and that's eye-opening
.
It changes your marketing, itchanges who you market to and it
also changes the income bracketof who you're marketing to.
It's interesting, right?
Sure, sure, this new three-daygetaway market may have a little
bit more disposable income tospend when they come to your
(13:18):
place of business and they'relikely to repeat all year long.
chris (13:23):
Yeah, they don't have to be skiers, they don't have to be
this, that or the other thing,they're just trying to get away.
dennis (13:28):
A skier's coming up once or twice during the winter and
ski with you, your golf people.
They're going to come up in thesummertime and they're just
going to golf and maybe they'llgolf in the fall, but probably
not.
But the three-day getawaythey'll come up three, four
times a year.
They don't care what time ofyear it is, they're just looking
for a getaway.
Very interesting process.
chris (13:46):
So always ask yourself what business are we in?
That was when the kids werelittle.
We'd take off if we hadcoverage for the kids.
So our parents are available.
dennis (13:56):
Okay, three days, right, yeah, yeah, exactly.
Your parents are available.
Okay, three days, right, yeah,yeah, exactly.
Also, groups used to come up,like work groups, the office
manager.
chris (14:03):
Oh, that's an interesting one I wouldn't think of that
one, the office manager of asmall company.
dennis (14:07):
she kind of runs things back in the day, yeah, back in
the 80s and the 90s, and she'dput together a group of 12 or 15
coworkers.
They just do a three-daygetaway.
Sometimes they ski, sometimesthey would hike, but they're
just coming up three or fourtimes a year.
So, yeah, constantly askyourself what business are we in
(14:28):
.
Try to step back out of thepicture and take a look back at
yourself and ask yourself whatbusiness are we in?
If you're a mechanic, are youin the automotive business, the
repair business, or is it oldercars?
Is it antique cars?
Is it a certain type of car?
Do you specialize in SUVs?
You know, there may besomething there that you're not
(14:50):
seeing.
I knew a gentleman back in theday who he lived in Newton and
he's a veterinarian and he onlydid cats.
Cats are the most numerous petthey out, I think.
At one point I was told theyoutnumber humans in this country
.
Oh my gosh, there's more petcats than people and most people
that own a dog have a dog ortwo, but there's a lot of people
(15:13):
that have like seven cats.
Yeah, and this guy specializes.
He's in Newton, all he does iscats.
What a great idea.
chris (15:23):
High-end cats too.
If you're living in Newton,those are high-end cats.
dennis (15:26):
Absolutely.
Do we need a high?
You know year two.
Do you need a hiring strategyand, looking back, what concepts
worked, which ones didn't?
Do we need to make adjustments?
You know, check out yourpricing.
This is year two.
Look back Are you chargingenough?
Are you charging too much?
In the contracting business,some people get disappointed.
They put out 10 quotes and theyonly get three of them and
(15:49):
they'll get disappointed.
They didn't score those otherseven.
Some people cut prices and theysharpen their pencil.
They want to get every singlequote.
I can tell you I've been in thecontracting business a long,
long time If you're getting allyour quotes, you're not charging
enough money.
You should not get all yourquotes because if you're a
high-end carpenter, if you're ahigh-end contractor, there's
(16:13):
always somebody out there who'sgoing to undercut you for price.
You don't want to try to winevery bid.
You want to identify yourtarget market.
Let's say that's upper middleincome, people who have lovely
homes and want to keep theirhomes beautiful.
They're not afraid to spend alittle bit of money to do that.
Well, that's your target market.
They're not bottom feeders,they're not tire kickers,
(16:35):
they're not looking for thecheapest price.
So, yeah, identify your targetmarket and make sure that your
pricing is in line with whatthey believe your product and
services are worth, and thenmarket to that target market.
Market to those people.
Is it digital marketing?
Is it radio?
Is it some other form ofmarketing?
(16:58):
And you know how many jobs ayear do you need?
You know these are things youwant to ask yourself into year
two.
And then again, funding andfinancing growth.
Is it time that you needanother truck?
Do you need to put an additionon your restaurant?
Are you, if you're an innkeeper, do you need to expand your
kitchen?
Year two and three you've got alittle bit of history behind
(17:20):
you.
Do you need funding orfinancing for growth?
Ask yourself that question.
And building a growth chart.
You always like the growthcharts that we use here, chris.
chris (17:32):
Yeah, I found them really interesting.
A lot of blood, sweat and tearswent into those growth charts
because they're sort of the mapof how gutter monkeys got
started.
Sweat and Tears went into thosegrowth charts because they're
sort of the map of how guttermonkeys got started.
dennis (17:39):
Well, a growth chart in the restaurant world is.
Well, let's say, in my world Iwas an innkeeper.
So the number of rooms that Ihave and the number of people
that those rooms can accommodatehas to align with the number of
seats in my dining room, andthe number of seats in my dining
room will be indicative of howmany fannies I can put in those
(18:00):
seats.
My kitchen has to be able toaccommodate that amount of
people twice a day breakfast anddinner and my parking lot has
to accommodate enough parkingspaces so that all of those
people can come and stay at myfacility.
If any one of those falls short, then we have to make an
adjustment.
I remember when I put anaddition on, I added four new
(18:21):
guest rooms and I also added agift shop.
But four new guest rooms,that's four more couples, that's
eight more people, and Irealized I don't have enough
parking spaces.
So we had to cut down sometrees and clear some area and we
added on to our parkingcapacity.
That's a business growth chart.
You add in, you know, on onecolumn, all of the components
(18:42):
that are necessary to run yourbusiness and on the other grid
is how many, how much of each,including marketing.
You know, if you're in therestaurant business and you add
a wing with you know 36 moreseats, you know, maybe you add
six, eight, 10 more tables, 36seats.
Okay, you're going to need 20more parking spaces and if you
(19:05):
add that many seats, you'reprobably going to have to build
out some capacity in yourkitchen.
But you also might need to addto your marketing budget because
you're going to have to fill 36more seats.
You want to turn them overtwice at dinner, maybe even two
and a half times.
So, yeah, you're going to haveto put in you know 72 to 90 more
(19:26):
dinners per night.
What type of marketing budgetdo you need to have that will
allow you to have that amount ofan increase?
So we call it a business growthchart.
I build them all the time fordifferent businesses and you
just got to gather informationin your industry.
So by years two and three, you,the business owner, you should
know most of those components,and not only from your own
(19:48):
experience but also from yourinner circle.
Just talking with your banker,your banker is going to say, hey
, we have a dozen restaurantsthat we work with and here's
what some of the otherrestaurants are doing so, you're
going to gain information fromyour inner circle and you're
going to gain a lot ofexperience, and that's what I
always recommend that you use tobuild your business growth
(20:11):
chart.
chris (20:11):
Yeah, I like it too.
Of course, in the AmericanGutter Monkeys I'm looking for
franchisees and it's a greatchart to put in front of our
franchisees because it kind ofshows them the path that number
one, cape Cod gutter monkey,took, and number two the path
that we could help them take aswell.
So that's kind of why I'm alsovery interested in this growth
chart.
dennis (20:29):
I remember the first day you saw it, you asked me is
there a blueprint?
That's what you said.
Is there some form of ablueprint that you have that a
new franchisee can follow?
I said, oh yeah, it's righthere.
And I printed it out and youlooked at it and you said, oh my
gosh.
Yeah, this is all you need toknow.
Yeah, it was great.
It really is that simple.
chris (20:48):
Yeah, you know, if you take that chart and then of
course you've got to kind ofmarry that up with taking the
leap and believing in that chart, because some of those steps
you make in that growth chartyou have to make them before
you're ready to do it, beforethe business shows up.
You've got to have the trucks,you've got to hire the people.
So there's that leap of faiththat goes along with that growth
chart.
But yeah it's an easy conceptto understand if you're looking
(21:09):
at it.
Not so easy to implementnecessarily.
dennis (21:12):
But if you use it on a regular basis, like, for example
, today at our little powwowbefore we did the podcast, one
of the topics that Andy broughtup was we need to restaff.
We need about four more guys inthe field in the next two to
four weeks.
I'm thinking two in the nextmonth and maybe two the
(21:33):
following month and then twomore as we get toward the latter
part of the summer.
And we know this because we allhave a business growth chart
and we use it of the summer.
And we know this because we allhave a business growth chart
and we use it all the time, towhere we don't even need to take
the chart out and look at it.
We just know this is what'sgoing on.
We had a rough quarter, thefirst quarter of 2025, very cold
(21:53):
weather, very rainy weather.
Then we had a bit of a stockmarket crash there, which it
seems to have rebounded, but alot of things happened that had
a little bit of an impact on ourhome service business and we
didn't know if this was arecession or was it weather
related and then exacerbated bythis little bit of a crash we
had on Wall Street.
We didn't know, but we knowbecause we look at the numbers
(22:16):
every month and the numbers tellthe story.
We made some adjustments, wetightened our belt and now
things are back on track.
And now we know, because of ourbusiness growth mindset, that,
yeah, we need to hire two tofour more people, two to four
more guys in the field over thenext, say, two to six weeks.
And that just comes from beingaware of your business and
(22:40):
having that, you know, businessgrowth mindset Right.
chris (22:43):
We'll put up a example of a business chart up here, a
business growth chart, and thenyou can take a look at it on the
podcast video.
dennis (22:51):
And you can.
You make them for your ownbusiness too.
And as you, when you first makeit your own business growth
chart for your business, foryour type of business, it's
going to be very rudimentary andyou're going to make some
changes year two, year three,year four, and you're going to
be constantly adding to thatbusiness growth chart and it's
great knowledge to have.
(23:11):
Eventually it just becomessecondhand knowledge.
It's living right in your backpocket anytime you need it.
The five-year plan so as we getto year five, that's sort of
the.
It's not the end of the line,it's not the end of your
business, it's just the end ofyour five-year plan.
And by the time you hit thatfive-year plan, you're going to
(23:32):
have another five-year planthat's going to take you to year
10.
And at this point you're goingto ask yourself or you should
ask yourself are we building abusiness or are we just making
money?
There's a difference between thetwo.
I know so many people that arevery skilled tradesmen, for
example, who don't reallyreinvest in their business.
They keep their business small.
It's a two, three personcompany, you know, installing
kitchens and baths and that typeof thing, making a lot of money
(23:55):
.
But if the owner ever gets hitby a bus, then Pete's Kitchens
and Baths.
If Pete gets hit by a bus,they're out of business.
And so you need to ask yourselfand there's no right or wrong
answer You've got to askyourself am I in this business
to make money or am I in thisbusiness to build a business?
Because if you're building abusiness, that's going to be
(24:17):
worth something.
chris (24:18):
Yeah, we see a little bit of this up in northern New
Hampshire now.
We're having a hard timefinding plumbers and things like
that.
Some of these plumbers aregetting older and they decided
that they're just going to maketheir money.
They don't want to bring onapprentices or anything like
that because it's too muchtrouble.
You know all the other stuffthat goes along with building a
business they're not interestedin.
So now they're just basicallydriving around in vans doing
their jobs.
But the problem with that nowis actually it's the apprentices
(24:41):
are not being trained and soyou can't find any apprentice
plumbers.
They're all kind of fleeingnorthern New Hampshire.
So over time we're going tolose the ability to have a
plumber in New Hampshire,especially northern New
Hampshire, because these guysare all aging out.
And they're just not buildingtheir businesses out.
Yeah, so there are people thatdo that.
That's interesting, yeah, kindof a side note.
dennis (25:00):
So year five.
You're looking back and you'resaying have we hit our marks
over the years?
Have we had five consecutiveyears of growth?
Have we leveled off?
I do find that business owners,we all find our leveling off
point.
Some business owners level offat the end of year one.
You know that carpenter thatused to make 30 bucks an hour
(25:22):
working for this particularcompany goes out on his own and
he can bill out at you know $80an hour and maybe he's netting
you know 55 an hour and he'sable to bill out at 40 hours a
week.
He might be happy doing that.
He's making more money than hewas in his previous job and now
he's the boss, he's calling theshots and he may level off after
(25:46):
a year or two.
But the business owner, the oneman with a pickup truck and a
tool belt who wants to grow andbuild a contracting business
where he has five, six, sevencrews, you know he's going to be
looking towards growth.
Which one of those guys are you?
Ask yourself that question Areyou building a business or are
you just making really goodmoney?
(26:07):
And there is a differencebetween the two.
chris (26:10):
And it's good that you know again, one's not better
than the other, but at leastknow you're consciously making
that choice.
Some people don't even knowthey're consciously making that
choice, that actually build areal business is even an option
for them.
They just haven't asked thatquestion or talked to the right
people.
dennis (26:24):
Sure, and they may not even realize.
That's a piece to the puzzle.
It's exactly right.
I know a lot of business ownerswho didn't retire they just
couldn't do the work anymore whodidn't retire they just
couldn't do the work anymore.
So as they aged out they didn'tbring in a younger team to take
over.
And this happens a lot in thehome services and in the
(26:46):
contractor business.
They just age out and the truckand the van get parked out back
behind the house and that'skind of how things end and it's
kind of too bad because there'sprobably some value there.
But a lot of times too, thecontractor's son or daughters or
children don't want to takeover that business.
chris (27:06):
Yeah, you see that a lot.
dennis (27:08):
Yeah, you do In the old days the way old days farmers
would always turn the businessover to their children.
I worked on a farm when I was akid back in the 60s and 70s and
I worked for Mr MahoneyMahoney's Farm right on the
Framingham Sudbury line and Ipicked eggs.
I work with chickens all thetime.
(27:28):
If there was nothing to do youcan pick strawberries and then
in the fall he'd bring us backfor a harvest of corn and other
such things.
But for the most part allsummer long you're just picking
eggs.
He had probably 2,500 to 3,000laying hens.
I couldn't even count anymore.
His facility was so big andwe'd pick, you know 25, 2,700
(27:50):
eggs every day in in cartons ofthree dozen yeah, me and three
other guys.
And I remember and he was mucholder than my parents, you know,
his kids were like my parents'age and I was, you know, 13.
And I remember all through myhigh school years I didn't
really work there anymore.
I was a little too busy.
(28:10):
You know, life gets in the way.
But my parents always knew Mrand Mrs Mahoney.
They'd stop at the farm standand my mom would pick up eggs
and strawberries and corn andother stuff.
And when I went off to college,one of the two, mr and Mrs
Mahoney, took ill and theycouldn't run the farm anymore
and their kids wanted nothing todo with the farm and I mean it
was acres and acres of justbeautiful rolling hills with
(28:32):
strawberry fields and corn.
Do you remember Mahoney's farm?
Yeah, I do, right across fromKnob's.
chris (28:36):
Cop Mountain.
Yeah, yeah, we used to spend alot of Saturday mornings on
Knob's Cop Mountain running.
dennis (28:42):
And yeah, and Mr Mahoney's kids wanted nothing to
do with farming.
The land was sold, turned intocondos.
Yeah, yeah, I think it's calledMahoney Farms Condominiums now
something like that.
Yeah, it was a nice piece ofproperty.
chris (28:59):
Yeah, they call it a silver tsunami.
And basically right now theysay 75% of small businesses
owned by boomers are going toeither be sold, transferred or
go out of business in the next10 years.
Can you imagine that?
75% small businesses?
Well, the boomers were all inthat age bracket.
Yeah, and they own all thesebusinesses.
(29:19):
And again, their kids aren'ttaking them over.
So they either got to sell them, give them to a kid or shut
them down.
And yeah, it's a huge, hugenumber.
It's especially big in ruralareas.
We have rural shops and thingslike that.
I'll bet.
dennis (29:32):
Wow.
chris (29:37):
Yeah, I think you've seen some scramble by VCs and people
like that to find some of thesebusinesses, because the good
ones are going to go quick.
The rest of them probably won't, but the good ones are going to
go quick, so there's a littlebit of scramble going on,
according to what I was readingabout going out and finding some
of these small businesses thatare going to be changing hands.
My doctor.
dennis (29:53):
He's an orthopedic surgeon here in Cape Cod.
He and I were talking not toolong ago and his practice he's
the owner of the practice.
They are regularly contacted byventure capitalists and people
like this who want to buy theirpractice and bring it under
their umbrella.
They're a bunch of VCs that arebuying up medical businesses,
(30:15):
dental offices, and such Venturecapitalists are making moves in
this direction as well.
Well, because they view it asprofitable.
And that kind of brings us tothe end of our five-year plan
and one of the reasons you wantto keep good records accurate
(30:35):
sales growth, monthly and annualannual profit growth, annual
balance sheet, business valuegrowth.
You want to keep these records.
You want to ask yourself whatis our current value?
What are we worth and wherewill we be in five more years,
year 10?
It gets to our final piece, tothe five-year plan, and the
(30:56):
five-year plan might and thefive-year plan might be a
10-year plan, but no matter whatthat, whether it's a 10 or a
20-year plan, you want to buildin some component of an exit
strategy, Because if yourcompany is building value over
the five or 10 or 15 or 20 yearsthat you own it and run it, and
it may even be 25 years.
There's a value at the end ofthat rainbow and while you're
(31:19):
making good money and you'reinvesting well and you're doing
really well, it's always nice,if you're a business owner, to
walk away with a nice chunk ofchange at the end.
The value of that is going tobe based upon.
That question that we asked inthe previous segment on the
five-year plan is are webuilding a business or are we
just making money?
The owner-operator, the one-manor two-man electrical
(31:42):
contracting business probablynot going to fetch a whole lot
of money at the end of it all,because without Pete's
electrical contracting servicesit isn't worth a whole lot.
But if Pete owns eight vans andhas 12 to 14 employees, he's
got a valid company there.
That's going to be worthsomething.
So that gets to our final pieceof this puzzle is the exit
(32:07):
strategy.
Every solid business modelshould have an exit strategy and
this is why we keep accuraterecords.
This is why we keep updatingour balance sheets, our sales
records, our P&Ls.
And even if that exit strategyisn't a complete exit, maybe it
is a family member's gonna takeit over.
Maybe you're running therestaurant and your son and your
daughter work for thatrestaurant.
(32:27):
Maybe you wanna step out andyou might wanna take a little
bit of equity.
When you do, Maybe you're gonnastep out and take a million
dollars away.
How are you going to take thatmillion dollar walk away?
Well, if you have good recordsand your business is worth five
times that and the business canaccommodate a monthly payment to
carry that debt service, thenyou can take a million dollars
(32:49):
and walk away and leave thebusiness to your kids.
Or you don't have to take thatmillion dollar walk away, Just
step away and continue to take asalary.
There's a lot of options thatcome in an exit strategy and
there's people that specializeas business brokers.
chris (33:04):
And I was just going to say it goes back to your circle.
You know there's a lot ofpeople in that circle that you
need to actually advise you onthis all the way through, you
know, to the point where you'reready to pull the trigger.
dennis (33:13):
Yeah, and at that time you're going to ask yourself, as
all business owners do are youprepared to sell, are you
prepared to transfer ownershipto employees, to the next
generation of your family, orare you prepared to take on a
partner and maybe work part-time?
There's a lot of pieces to thatpuzzle of exit strategy and
(33:38):
that is we all face that.
I've bought, I've built, I'vesold many businesses in my life
and it's not as emotional as youthink.
Sometimes selling a business isthe right.
When we bought the inn, we werethrilled Babs and I, we had a
little infant, another one onthe way, and we thought this
would be the greatest thing.
(33:58):
We're going to be home raisingour kids.
And for 10 years we wereinnkeepers.
All our kids were born and grewup there at the inn.
It was great.
It was a great way to raise afamily and one of the reasons we
got into the business of beingan innkeeper or innkeepers was
for the family.
And 10 years later we realizedour kids don't take vacations,
(34:21):
they can't run around in theirunderwear on a Saturday because
we're always on.
And while it was a lot of fun,it was probably the greatest job
I'll ever have.
It was hard the most hours I'llever work.
We sold.
One of the key reasons forselling that business was for
the family.
Our family had outgrown it.
The shoe didn't fit anymore.
(34:42):
It's time to move on and,believe me, it was a great sale.
We walked away good, never sheda tear.
The timing was right.
I've had a few other smallbusinesses and companies that I
have sold.
You know started from little tonothing and sold, and, believe
me, it's great to walk away witha little money in your pocket.
That's for sure it really is.
(35:04):
So keep that in mind.
Exit strategy it's huge, allright.
chris (35:09):
All right Sounds good.
Do we leave anything out?
I don't think so.
I think that was your completelist.
Again, we touch on a lot ofthese things.
We've touched on almost allthese topics, so we kind of came
back to this one to kind offinish it off, but it's an
important and so we'reconstantly coming back to the
finances the balance sheets, thesales records, the profit and
(35:46):
loss statements, and you'llforever hear Chris and I saying
things like don't go to wherethe puck is.
dennis (35:48):
Go to where the puck is going to be when you get there.
It hints at being a visionary.
Look ahead.
Don't be looking two, threeweeks out.
Yeah, look at this month ascompared to last year in this
particular month, but look aheadone, two, three years.
chris (36:04):
See where you're going so you know where you're going to
be when you get there, yep, yep,and start as early as you can,
and if you haven't done that,then start now, because there's
no time better than the present.
dennis (36:15):
Okay, no monkeys were harmed in the making of this
podcast.
Thanks for listening.
chris (36:20):
All right, see you guys next time.
Bye, thank you for tuning in toMonkey Business Radio.
If you enjoyed today's episode,please make sure to subscribe,
like and follow us wherever youget your podcasts.
It really helps us reach moreaspiring entrepreneurs like you,
and if you've got a question ortopic you'd like us to cover,
(36:40):
leave a comment or reach out tous on social media.
We'd love to hear your thoughtsand keep the conversation going
.
Don't forget to leave us afive-star review if you found
the episode valuable and makesure to share it with anyone who
might benefit from our tips andstories.
We'll see you next time.
Benefit from our tips andstories.
We'll see you next time.
This podcast is produced byAmerican Gutter Monkeys LLC.
Build real wealth throughbusiness ownership.
(37:02):
For details, visit us atAmericanGutterMonkeyscom.
When you're starting a business, it's easy to focus on
the day-to-day Getting thingsoff the ground, making sure of
the first sale just keep thingsmoving.
But if you want to buildsomething that lasts, you need
to think further ahead, asDennis puts it because, remember
, a goal without a timeline isreally just a dream.
In this episode of MonkeyBusiness Radio, we're diving
into the five-year plan.
(00:23):
While every startup needs ashort-term, medium-term and
long-term strategy, If you'restarting out, or even thinking
about starting, this episode isa blueprint.
We'll help you lay theshort-term, medium-term and
long-term goals and make sureyou're building a business, not
just chasing busy work.
We have a great show for you,so grab a cup of coffee, sit
back, relax and welcome toMonkey Business Radio.
(00:45):
Hello Dennis, how are we doingtoday?
Good Chris, how are you Good?
Good, what do we got on theagenda for today, the five-year?
dennis (00:57):
plan.
Why every startup should have ashort, medium and a long-range
plan.
chris (01:02):
All right, good, this is kind of an amalgamation of a lot
of our podcasts we've done inthe past couple of weeks.
Here We've been touching onthis topic.
Today we're just going to diveinto it a little deeper.
dennis (01:12):
One of the things, chris , that I notice about a lot of
business owners is when theystart their business, they
usually start it for a varietyof reasons.
The auto mechanic he wants tobe his own boss.
The restaurant owner he's gothis own recipes and he's got his
own style and he wants tobecome the restaurant owner.
He wants to be the head chef.
But a lot of times and theseare people that I know very well
(01:36):
, people I associate with a lotof times they don't have a
medium and a long range plan.
Their goal is to get therestaurant open, get up and
running.
You know, one of my friends justwent back to work for a
mechanic.
He went out on his own for twoor three years, struggled a bit.
I mean, he's a good mechanic,he just was a little light on
(01:56):
the business end of things.
That was the thing that madethings very difficult for him.
And that's why every startupshould have a short, medium and
a long range plan a one year, athree year and a five year plan.
And that's why every startupshould have a short, medium and
a long-range plan, a one-year, athree-year and a five-year plan
.
And in looking towards afive-year plan, a five-year
long-range plan.
Then we can develop steps alongthe way six months, 12 months,
strike points along the way,yardstick measurements, so we'll
(02:20):
know whether we are closing inon that five-year goal, that
five-year plan.
Remember, a goal without atimeline is really just a dream.
chris (02:29):
Yeah, there's got to be some hard and fast strike points
along the way that you want tomeet and this is going to be
tough, especially because, likeyou said, you get your hands
full just starting out.
But, like many of the topics wetouch on in this podcast, the
earlier you start the better.
And all these different thingsfinancial planning and all these
things oh, absolutely.
dennis (02:48):
I remember a young kid.
He was a student of mine way,way back.
He was in college at the timeand his goal well, his idea was
he didn't want to be like hisparents.
His dad was a really high-endmechanic and his mom owned a
horse farm up in the WhiteMountains.
She did training and teachingriding.
(03:09):
She did shows a whole varietyof revenue streams from her
horse farm and he said I don'twant to be like my parents, I
don't want to be working likethat.
He said I'm just going toinvent an app and then I'll be a
millionaire.
Actually, he was probably inhigh school when he said it.
He was a student of mine in amartial arts school that I owned
.
He popped in and out as he wentoff to college.
Great kid, really good kid.
(03:31):
He and I were sitting down six,eight years after he said that
to me.
He was now out of college andhe had a job and he was doing
his thing.
I said how's that going?
How's that app thing going?
And he looked at me he goes youremember that.
And I said, oh gosh, yeah, Iremember that.
And he laughed.
And he goes yeah, that was.
I don't even know why I saidthat.
I don't even know why I thoughtthat, but a lot of younger kids
(03:53):
think that they have a.
They see that somebody inventedan app and became a millionaire
.
Well, they don't see the workthat goes behind that Inventing
the app.
That's like 5%.
Yeah, that's just an egregiousexample of a goal without a
timeline is nothing more than adream.
So, yeah, so when you'restarting out your business, like
(04:13):
we always say, chris, don't goto where the puck is.
Go to where the puck is goingto be when you get there.
Start out early with a visionto see where do you want to be
in five years and how are wegoing to get there?
So the questions that I alwaysask is what business are you in?
I used to be an innkeeper.
(04:33):
I owned an inn.
I was a bed and breakfast.
It was in the White Mountains.
Am I in the ski business?
Am I in the snowmobile business?
Am I in the golf business?
I am in the hiking business.
What we found out is we are inthe three-day getaway business.
Doesn't matter what you'redoing when you come here.
In fact, in the wintertime wewere very, very successful and
(04:55):
we had far fewer skiers thanmost inns and hotels and bed and
breakfast Because skiers ifthey're cross-country skiers,
they might cancel last minute ifthe snow conditions aren't good
.
Downhill skiers if they'recross-country skiers, they might
cancel last minute if the snowconditions aren't good.
Downhill skiers if it's goingto be a rainy, warm, nasty
weekend, they might cancel lastminute and they don't want to go
skiing.
But if people are coming awayjust for a three-day getaway, a
(05:17):
three-day break in their normalroutine, they're coming no
matter what.
That's interesting.
So what business are you in?
We were in the three-daygetaway business.
Four days is different.
We try to turn them over twicea week.
You want to bring in a fullhouse on Friday, check them out
all on Monday, bring in anotherfull house on Tuesday, keep them
for three days, check them outon Friday and then just start
(05:40):
the cycle all over again.
Other questions that you maywant to ask yourself right out
of the gate year one are youproperly funded?
chris (05:49):
Yeah, this is a big one.
I've had a personal experiencewith that coming up a little
short that first year and itdidn't work out.
What was that?
It was a toy company we starteda long time ago.
dennis (05:59):
You told me about that.
Yeah, you did Right, right,right.
chris (06:02):
Yeah, I remember, because my brother took one look at our
plan and said you're notproperly funded, so we'll work
our way around that.
dennis (06:08):
Turns out.
What products and services areyou selling?
Who is your target market?
Sometimes you ask people who'syour target market and he's a
roofing company.
Well, anybody.
Well, how do you identify thatif it's anybody or everybody?
If you're going to advertise bydigital marketing, you've got
to identify the neighbors, theneighborhoods, the value of the
(06:31):
homes where they're located.
So identification of yourtarget market is huge by age, by
income levels.
chris (06:38):
We talk about that a lot here because of course gutter
business on Cape Cod very cleartarget market there and it's
your more elderly types that owna home?
dennis (06:47):
Sure, so you need a marketing strategy, a pricing
strategy in place.
Proof of concept is huge.
Proof of concept is an oftenoverlooked component Proving the
concept.
Is the business model viable?
Do people really need and wantyour products and services?
And if they do, then your proofof concept should pan out.
chris (07:07):
You kind of explained that in some of the past
podcasts about how you kind ofdid that at Gutter Monkeys.
You actually started doing allsorts of different work decks,
roofs, all sorts of differentthings.
Figure it out after a whileabout the gutter cleaning
Basically no one doing it.
dennis (07:22):
Sure, we answered the question is there enough gutter
cleaning business to keep two,three, four, five crews busy on
Cape Cod all year long?
And the answer was yes.
Now, no one had ever done it.
That's why we needed a proof ofconcept.
If you're in the restaurantbusiness, let's take Cape Cod.
There are so many fantasticrestaurants on Cape Cod.
(07:43):
The proof of concept initiallyis yes.
Is your food good?
Is it appealing to the targetmarket?
Number two is can you putenough people through your door
to make it a viable business?
And lastly is can you do thatall year long, even during the
off season?
It's a tough proof of concept.
chris (08:03):
It is.
Yeah, we ate out at aparticularly nice restaurant and
unfortunately it was too badbecause it was a brand new
restaurant.
The owner was excited about it.
My meal came out it wasprobably one of the worst meals
I've ever had and I was just Ifelt so bad.
Normally I would go and send itback, but I felt so bad for
this guy because he had justcome out and said you know, this
is a brand new restaurant, wejust opened it.
I'm so proud.
I'm just wondering how did thatmeal come out of that kitchen
(08:26):
like that?
You know he's got a greatlocation, beautiful inside, just
all redone, and the food cameout.
It was just awful, Was thathere on the Cape.
Yeah, it was on the Cape, nokidding yeah.
dennis (08:36):
We'll leave his name off the books.
chris (08:37):
We're going to leave.
Normally I would send it back.
I actually probably should havedid it.
I kind of did this service.
I should have maybe pulled themaside and just told them about
it.
But it kind of struck me thathow did that happen?
How would that happen?
How would a food like thatleave a kitchen of a brand new
restaurant like that and be inthat state?
But oh yeah, it was too bad.
dennis (08:55):
So by the end of year one.
You're a startup.
One of the most importantpieces to your puzzle is your
inner circle.
So by the end of year one and Idon't care what business you're
in you need a banker.
You need an accountant, alawyer If you have partners in
your business, or consultantsthat you use, business mentors,
maybe that you use all withexperience, knowledge and skills
(09:18):
by the end of year one you wantyour inner that's what I call
my inner circle.
You want your team in place.
Don't wait till you need alawyer to find one right.
Don't wait till you need abanker before you go look for
one.
You know you want to have yourbanker.
You want to have your people inplace.
You want to have youraccountant in place, our
accountant, dave boy.
(09:39):
We talked to Dave probably fouror five times during the year
before tax season.
We ask him questions, we throwideas out to him and he throws
us information on tax laws thatare applicable to that.
So build your inner circle,banker especially.
And again, as I always say,don't e-bank exclusively.
I don't do any e-banking at all.
(10:01):
My partner, andy, or or myoffice manager one of us three
walks into that bank at leastone or two times a week, during
busy seasons three times a week.
I'm in that bank.
I know everybody in the bank,so if I ever needed some advice
or a line of credit or anythinglike that, when I had a check a
customer's check came in odd theother day quick phone call to
(10:23):
my bank.
Customer's check came in oddthe other day Quick phone call
to my bank.
They know who I am.
They cleared it up in a minute.
So yeah, build your innercircle during that first year of
business.
Have your banker, your lawyer,your accountant, just have all
your people as a part of yourinner circle and converse with
those people frequently, talk tothem, do dinner with them once
in a while.
Make them part of yourfriendship.
chris (10:45):
Yeah, you know, touched on that point and I know this
was always a pain point formyself.
But they're going to tell youthings you don't want to hear
and that's really important andI know personal experience.
That's a tough thing and I knowyou've talked about it on the
podcast as well.
But it's good to hear,especially in that first year
when you can make changes andyou haven't gone too far down
the line.
dennis (11:02):
Yeah, you don't want to surround yourself with yes men
all the time.
If two people are thinkingexactly the same thing all the
time, then only one of them isdoing the thinking.
We just had a little meetingbefore, right Before we started
the podcast, Four of us at thetable.
Not all of us agreed oneverything, but that's okay,
right.
chris (11:22):
Learned a lot.
dennis (11:22):
Right, learned a lot as far as medium range plans.
We get into year two and three.
We've got a full year, or maybeyear and a half, under our belt
, we've got some metrics to workwith and so during this we're
going to call this our mid-range, our years two and three First
thing I say is, if you'reaccomplishing all of your goals,
you're not setting the bar highenough.
(11:44):
First thing I say is, if you'reaccomplishing all of your goals
, you're not setting the barhigh enough.
You want to set attainablegoals, but you don't want them
to be so easy, easily attainablethat you can accomplish them
all the time, because you're notgoing to be pushing the limits,
you're not going to be pushingthe envelope and leaving your
comfort zone.
So, set attainable goals andpush the envelope on those.
(12:05):
It'll require that you leaveyour comfort zone periodically,
not too far outside of yourcomfort zone, and just push that
envelope a little bit.
During years two and three.
There's the look back.
You're always looking back.
What did we do our first yearand now we're into our second
and third year.
How are we doing?
How are things?
chris (12:24):
going.
This is where those financialrecords are so important.
We talked about last week youknow that ability to go look
back and actually learn aboutwhat's been going on in your
business that you might not evenbe aware of.
dennis (12:35):
Yeah.
And then ask yourself againwhat business are we in?
Is it still the same or has itchanged?
And getting back to my days asan innkeeper, I remember those
first year or two, first coupleof years we were advertising ski
packages, we were advertising awhole bunch of other different
things until I realized we'renot in the ski business, we are
(12:56):
in the three-day getawaybusiness, and that's eye-opening
.
It changes your marketing, itchanges who you market to and it
also changes the income bracketof who you're marketing to.
It's interesting, right?
Sure, sure, this new three-daygetaway market may have a little
bit more disposable income tospend when they come to your
(13:18):
place of business and they'relikely to repeat all year long.
chris (13:23):
Yeah, they don't have to be skiers, they don't have to be
this, that or the other thing,they're just trying to get away.
dennis (13:28):
A skier's coming up once or twice during the winter and
ski with you, your golf people.
They're going to come up in thesummertime and they're just
going to golf and maybe they'llgolf in the fall, but probably
not.
But the three-day getawaythey'll come up three, four
times a year.
They don't care what time ofyear it is, they're just looking
for a getaway.
Very interesting process.
chris (13:46):
So always ask yourself what business are we in?
That was when the kids werelittle.
We'd take off if we hadcoverage for the kids.
So our parents are available.
dennis (13:56):
Okay, three days, right, yeah, yeah, exactly.
Your parents are available.
Okay, three days, right, yeah,yeah, exactly.
Also, groups used to come up,like work groups, the office
manager.
chris (14:03):
Oh, that's an interesting one I wouldn't think of that
one, the office manager of asmall company.
dennis (14:07):
she kind of runs things back in the day, yeah, back in
the 80s and the 90s, and she'dput together a group of 12 or 15
coworkers.
They just do a three-daygetaway.
Sometimes they ski, sometimesthey would hike, but they're
just coming up three or fourtimes a year.
So, yeah, constantly askyourself what business are we in
(14:28):
.
Try to step back out of thepicture and take a look back at
yourself and ask yourself whatbusiness are we in?
If you're a mechanic, are youin the automotive business, the
repair business, or is it oldercars?
Is it antique cars?
Is it a certain type of car?
Do you specialize in SUVs?
You know, there may besomething there that you're not
(14:50):
seeing.
I knew a gentleman back in theday who he lived in Newton and
he's a veterinarian and he onlydid cats.
Cats are the most numerous petthey out, I think.
At one point I was told theyoutnumber humans in this country
.
Oh my gosh, there's more petcats than people and most people
that own a dog have a dog ortwo, but there's a lot of people
(15:13):
that have like seven cats.
Yeah, and this guy specializes.
He's in Newton, all he does iscats.
What a great idea.
chris (15:23):
High-end cats too.
If you're living in Newton,those are high-end cats.
dennis (15:26):
Absolutely.
Do we need a high?
You know year two.
Do you need a hiring strategyand, looking back, what concepts
worked, which ones didn't?
Do we need to make adjustments?
You know, check out yourpricing.
This is year two.
Look back Are you chargingenough?
Are you charging too much?
In the contracting business,some people get disappointed.
They put out 10 quotes and theyonly get three of them and
(15:49):
they'll get disappointed.
They didn't score those otherseven.
Some people cut prices and theysharpen their pencil.
They want to get every singlequote.
I can tell you I've been in thecontracting business a long,
long time If you're getting allyour quotes, you're not charging
enough money.
You should not get all yourquotes because if you're a
high-end carpenter, if you're ahigh-end contractor, there's
(16:13):
always somebody out there who'sgoing to undercut you for price.
You don't want to try to winevery bid.
You want to identify yourtarget market.
Let's say that's upper middleincome, people who have lovely
homes and want to keep theirhomes beautiful.
They're not afraid to spend alittle bit of money to do that.
Well, that's your target market.
They're not bottom feeders,they're not tire kickers,
(16:35):
they're not looking for thecheapest price.
So, yeah, identify your targetmarket and make sure that your
pricing is in line with whatthey believe your product and
services are worth, and thenmarket to that target market.
Market to those people.
Is it digital marketing?
Is it radio?
Is it some other form ofmarketing?
(16:58):
And you know how many jobs ayear do you need?
You know these are things youwant to ask yourself into year
two.
And then again, funding andfinancing growth.
Is it time that you needanother truck?
Do you need to put an additionon your restaurant?
Are you, if you're an innkeeper, do you need to expand your
kitchen?
Year two and three you've got alittle bit of history behind
(17:20):
you.
Do you need funding orfinancing for growth?
Ask yourself that question.
And building a growth chart.
You always like the growthcharts that we use here, chris.
chris (17:32):
Yeah, I found them really interesting.
A lot of blood, sweat and tearswent into those growth charts
because they're sort of the mapof how gutter monkeys got
started.
Sweat and Tears went into thosegrowth charts because they're
sort of the map of how guttermonkeys got started.
dennis (17:39):
Well, a growth chart in the restaurant world is.
Well, let's say, in my world Iwas an innkeeper.
So the number of rooms that Ihave and the number of people
that those rooms can accommodatehas to align with the number of
seats in my dining room, andthe number of seats in my dining
room will be indicative of howmany fannies I can put in those
(18:00):
seats.
My kitchen has to be able toaccommodate that amount of
people twice a day breakfast anddinner and my parking lot has
to accommodate enough parkingspaces so that all of those
people can come and stay at myfacility.
If any one of those falls short, then we have to make an
adjustment.
I remember when I put anaddition on, I added four new
(18:21):
guest rooms and I also added agift shop.
But four new guest rooms,that's four more couples, that's
eight more people, and Irealized I don't have enough
parking spaces.
So we had to cut down sometrees and clear some area and we
added on to our parkingcapacity.
That's a business growth chart.
You add in, you know, on onecolumn, all of the components
(18:42):
that are necessary to run yourbusiness and on the other grid
is how many, how much of each,including marketing.
You know, if you're in therestaurant business and you add
a wing with you know 36 moreseats, you know, maybe you add
six, eight, 10 more tables, 36seats.
Okay, you're going to need 20more parking spaces and if you
(19:05):
add that many seats, you'reprobably going to have to build
out some capacity in yourkitchen.
But you also might need to addto your marketing budget because
you're going to have to fill 36more seats.
You want to turn them overtwice at dinner, maybe even two
and a half times.
So, yeah, you're going to haveto put in you know 72 to 90 more
(19:26):
dinners per night.
What type of marketing budgetdo you need to have that will
allow you to have that amount ofan increase?
So we call it a business growthchart.
I build them all the time fordifferent businesses and you
just got to gather informationin your industry.
So by years two and three, you,the business owner, you should
know most of those components,and not only from your own
(19:48):
experience but also from yourinner circle.
Just talking with your banker,your banker is going to say, hey
, we have a dozen restaurantsthat we work with and here's
what some of the otherrestaurants are doing so, you're
going to gain information fromyour inner circle and you're
going to gain a lot ofexperience, and that's what I
always recommend that you use tobuild your business growth
(20:11):
chart.
chris (20:11):
Yeah, I like it too.
Of course, in the AmericanGutter Monkeys I'm looking for
franchisees and it's a greatchart to put in front of our
franchisees because it kind ofshows them the path that number
one, cape Cod gutter monkey,took, and number two the path
that we could help them take aswell.
So that's kind of why I'm alsovery interested in this growth
chart.
dennis (20:29):
I remember the first day you saw it, you asked me is
there a blueprint?
That's what you said.
Is there some form of ablueprint that you have that a
new franchisee can follow?
I said, oh yeah, it's righthere.
And I printed it out and youlooked at it and you said, oh my
gosh.
Yeah, this is all you need toknow.
Yeah, it was great.
It really is that simple.
chris (20:48):
Yeah, you know, if you take that chart and then of
course you've got to kind ofmarry that up with taking the
leap and believing in that chart, because some of those steps
you make in that growth chartyou have to make them before
you're ready to do it, beforethe business shows up.
You've got to have the trucks,you've got to hire the people.
So there's that leap of faiththat goes along with that growth
chart.
But yeah it's an easy conceptto understand if you're looking
(21:09):
at it.
Not so easy to implementnecessarily.
dennis (21:12):
But if you use it on a regular basis, like, for example
, today at our little powwowbefore we did the podcast, one
of the topics that Andy broughtup was we need to restaff.
We need about four more guys inthe field in the next two to
four weeks.
I'm thinking two in the nextmonth and maybe two the
(21:33):
following month and then twomore as we get toward the latter
part of the summer.
And we know this because we allhave a business growth chart
and we use it of the summer.
And we know this because we allhave a business growth chart
and we use it all the time, towhere we don't even need to take
the chart out and look at it.
We just know this is what'sgoing on.
We had a rough quarter, thefirst quarter of 2025, very cold
(21:53):
weather, very rainy weather.
Then we had a bit of a stockmarket crash there, which it
seems to have rebounded, but alot of things happened that had
a little bit of an impact on ourhome service business and we
didn't know if this was arecession or was it weather
related and then exacerbated bythis little bit of a crash we
had on Wall Street.
We didn't know, but we knowbecause we look at the numbers
(22:16):
every month and the numbers tellthe story.
We made some adjustments, wetightened our belt and now
things are back on track.
And now we know, because of ourbusiness growth mindset, that,
yeah, we need to hire two tofour more people, two to four
more guys in the field over thenext, say, two to six weeks.
And that just comes from beingaware of your business and
(22:40):
having that, you know, businessgrowth mindset Right.
chris (22:43):
We'll put up a example of a business chart up here, a
business growth chart, and thenyou can take a look at it on the
podcast video.
dennis (22:51):
And you can.
You make them for your ownbusiness too.
And as you, when you first makeit your own business growth
chart for your business, foryour type of business, it's
going to be very rudimentary andyou're going to make some
changes year two, year three,year four, and you're going to
be constantly adding to thatbusiness growth chart and it's
great knowledge to have.
(23:11):
Eventually it just becomessecondhand knowledge.
It's living right in your backpocket anytime you need it.
The five-year plan so as we getto year five, that's sort of
the.
It's not the end of the line,it's not the end of your
business, it's just the end ofyour five-year plan.
And by the time you hit thatfive-year plan, you're going to
(23:32):
have another five-year planthat's going to take you to year
10.
And at this point you're goingto ask yourself or you should
ask yourself are we building abusiness or are we just making
money?
There's a difference between thetwo.
I know so many people that arevery skilled tradesmen, for
example, who don't reallyreinvest in their business.
They keep their business small.
It's a two, three personcompany, you know, installing
kitchens and baths and that typeof thing, making a lot of money
(23:55):
.
But if the owner ever gets hitby a bus, then Pete's Kitchens
and Baths.
If Pete gets hit by a bus,they're out of business.
And so you need to ask yourselfand there's no right or wrong
answer You've got to askyourself am I in this business
to make money or am I in thisbusiness to build a business?
Because if you're building abusiness, that's going to be
(24:17):
worth something.
chris (24:18):
Yeah, we see a little bit of this up in northern New
Hampshire now.
We're having a hard timefinding plumbers and things like
that.
Some of these plumbers aregetting older and they decided
that they're just going to maketheir money.
They don't want to bring onapprentices or anything like
that because it's too muchtrouble.
You know all the other stuffthat goes along with building a
business they're not interestedin.
So now they're just basicallydriving around in vans doing
their jobs.
But the problem with that nowis actually it's the apprentices
(24:41):
are not being trained and soyou can't find any apprentice
plumbers.
They're all kind of fleeingnorthern New Hampshire.
So over time we're going tolose the ability to have a
plumber in New Hampshire,especially northern New
Hampshire, because these guysare all aging out.
And they're just not buildingtheir businesses out.
Yeah, so there are people thatdo that.
That's interesting, yeah, kindof a side note.
dennis (25:00):
So year five.
You're looking back and you'resaying have we hit our marks
over the years?
Have we had five consecutiveyears of growth?
Have we leveled off?
I do find that business owners,we all find our leveling off
point.
Some business owners level offat the end of year one.
You know that carpenter thatused to make 30 bucks an hour
(25:22):
working for this particularcompany goes out on his own and
he can bill out at you know $80an hour and maybe he's netting
you know 55 an hour and he'sable to bill out at 40 hours a
week.
He might be happy doing that.
He's making more money than hewas in his previous job and now
he's the boss, he's calling theshots and he may level off after
(25:46):
a year or two.
But the business owner, the oneman with a pickup truck and a
tool belt who wants to grow andbuild a contracting business
where he has five, six, sevencrews, you know he's going to be
looking towards growth.
Which one of those guys are you?
Ask yourself that question Areyou building a business or are
you just making really goodmoney?
(26:07):
And there is a differencebetween the two.
chris (26:10):
And it's good that you know again, one's not better
than the other, but at leastknow you're consciously making
that choice.
Some people don't even knowthey're consciously making that
choice, that actually build areal business is even an option
for them.
They just haven't asked thatquestion or talked to the right
people.
dennis (26:24):
Sure, and they may not even realize.
That's a piece to the puzzle.
It's exactly right.
I know a lot of business ownerswho didn't retire they just
couldn't do the work anymore whodidn't retire they just
couldn't do the work anymore.
So as they aged out they didn'tbring in a younger team to take
over.
And this happens a lot in thehome services and in the
(26:46):
contractor business.
They just age out and the truckand the van get parked out back
behind the house and that'skind of how things end and it's
kind of too bad because there'sprobably some value there.
But a lot of times too, thecontractor's son or daughters or
children don't want to takeover that business.
chris (27:06):
Yeah, you see that a lot.
dennis (27:08):
Yeah, you do In the old days the way old days farmers
would always turn the businessover to their children.
I worked on a farm when I was akid back in the 60s and 70s and
I worked for Mr MahoneyMahoney's Farm right on the
Framingham Sudbury line and Ipicked eggs.
I work with chickens all thetime.
(27:28):
If there was nothing to do youcan pick strawberries and then
in the fall he'd bring us backfor a harvest of corn and other
such things.
But for the most part allsummer long you're just picking
eggs.
He had probably 2,500 to 3,000laying hens.
I couldn't even count anymore.
His facility was so big andwe'd pick, you know 25, 2,700
(27:50):
eggs every day in in cartons ofthree dozen yeah, me and three
other guys.
And I remember and he was mucholder than my parents, you know,
his kids were like my parents'age and I was, you know, 13.
And I remember all through myhigh school years I didn't
really work there anymore.
I was a little too busy.
(28:10):
You know, life gets in the way.
But my parents always knew Mrand Mrs Mahoney.
They'd stop at the farm standand my mom would pick up eggs
and strawberries and corn andother stuff.
And when I went off to college,one of the two, mr and Mrs
Mahoney, took ill and theycouldn't run the farm anymore
and their kids wanted nothing todo with the farm and I mean it
was acres and acres of justbeautiful rolling hills with
(28:32):
strawberry fields and corn.
Do you remember Mahoney's farm?
Yeah, I do, right across fromKnob's.
chris (28:36):
Cop Mountain.
Yeah, yeah, we used to spend alot of Saturday mornings on
Knob's Cop Mountain running.
dennis (28:42):
And yeah, and Mr Mahoney's kids wanted nothing to
do with farming.
The land was sold, turned intocondos.
Yeah, yeah, I think it's calledMahoney Farms Condominiums now
something like that.
Yeah, it was a nice piece ofproperty.
chris (28:59):
Yeah, they call it a silver tsunami.
And basically right now theysay 75% of small businesses
owned by boomers are going toeither be sold, transferred or
go out of business in the next10 years.
Can you imagine that?
75% small businesses?
Well, the boomers were all inthat age bracket.
Yeah, and they own all thesebusinesses.
(29:19):
And again, their kids aren'ttaking them over.
So they either got to sell them, give them to a kid or shut
them down.
And yeah, it's a huge, hugenumber.
It's especially big in ruralareas.
We have rural shops and thingslike that.
I'll bet.
dennis (29:32):
Wow.
chris (29:37):
Yeah, I think you've seen some scramble by VCs and people
like that to find some of thesebusinesses, because the good
ones are going to go quick.
The rest of them probably won't, but the good ones are going to
go quick, so there's a littlebit of scramble going on,
according to what I was readingabout going out and finding some
of these small businesses thatare going to be changing hands.
My doctor.
dennis (29:53):
He's an orthopedic surgeon here in Cape Cod.
He and I were talking not toolong ago and his practice he's
the owner of the practice.
They are regularly contacted byventure capitalists and people
like this who want to buy theirpractice and bring it under
their umbrella.
They're a bunch of VCs that arebuying up medical businesses,
(30:15):
dental offices, and such Venturecapitalists are making moves in
this direction as well.
Well, because they view it asprofitable.
And that kind of brings us tothe end of our five-year plan
and one of the reasons you wantto keep good records accurate
(30:35):
sales growth, monthly and annualannual profit growth, annual
balance sheet, business valuegrowth.
You want to keep these records.
You want to ask yourself whatis our current value?
What are we worth and wherewill we be in five more years,
year 10?
It gets to our final piece, tothe five-year plan, and the
(30:56):
five-year plan might and thefive-year plan might be a
10-year plan, but no matter whatthat, whether it's a 10 or a
20-year plan, you want to buildin some component of an exit
strategy, Because if yourcompany is building value over
the five or 10 or 15 or 20 yearsthat you own it and run it, and
it may even be 25 years.
There's a value at the end ofthat rainbow and while you're
(31:19):
making good money and you'reinvesting well and you're doing
really well, it's always nice,if you're a business owner, to
walk away with a nice chunk ofchange at the end.
The value of that is going tobe based upon.
That question that we asked inthe previous segment on the
five-year plan is are webuilding a business or are we
just making money?
The owner-operator, the one-manor two-man electrical
(31:42):
contracting business probablynot going to fetch a whole lot
of money at the end of it all,because without Pete's
electrical contracting servicesit isn't worth a whole lot.
But if Pete owns eight vans andhas 12 to 14 employees, he's
got a valid company there.
That's going to be worthsomething.
So that gets to our final pieceof this puzzle is the exit
(32:07):
strategy.
Every solid business modelshould have an exit strategy and
this is why we keep accuraterecords.
This is why we keep updatingour balance sheets, our sales
records, our P&Ls.
And even if that exit strategyisn't a complete exit, maybe it
is a family member's gonna takeit over.
Maybe you're running therestaurant and your son and your
daughter work for thatrestaurant.
(32:27):
Maybe you wanna step out andyou might wanna take a little
bit of equity.
When you do, Maybe you're gonnastep out and take a million
dollars away.
How are you going to take thatmillion dollar walk away?
Well, if you have good recordsand your business is worth five
times that and the business canaccommodate a monthly payment to
carry that debt service, thenyou can take a million dollars
(32:49):
and walk away and leave thebusiness to your kids.
Or you don't have to take thatmillion dollar walk away, Just
step away and continue to take asalary.
There's a lot of options thatcome in an exit strategy and
there's people that specializeas business brokers.
chris (33:04):
And I was just going to say it goes back to your circle.
You know there's a lot ofpeople in that circle that you
need to actually advise you onthis all the way through, you
know, to the point where you'reready to pull the trigger.
dennis (33:13):
Yeah, and at that time you're going to ask yourself, as
all business owners do are youprepared to sell, are you
prepared to transfer ownershipto employees, to the next
generation of your family, orare you prepared to take on a
partner and maybe work part-time?
There's a lot of pieces to thatpuzzle of exit strategy and
(33:38):
that is we all face that.
I've bought, I've built, I'vesold many businesses in my life
and it's not as emotional as youthink.
Sometimes selling a business isthe right.
When we bought the inn, we werethrilled Babs and I, we had a
little infant, another one onthe way, and we thought this
would be the greatest thing.
(33:58):
We're going to be home raisingour kids.
And for 10 years we wereinnkeepers.
All our kids were born and grewup there at the inn.
It was great.
It was a great way to raise afamily and one of the reasons we
got into the business of beingan innkeeper or innkeepers was
for the family.
And 10 years later we realizedour kids don't take vacations,
(34:21):
they can't run around in theirunderwear on a Saturday because
we're always on.
And while it was a lot of fun,it was probably the greatest job
I'll ever have.
It was hard the most hours I'llever work.
We sold.
One of the key reasons forselling that business was for
the family.
Our family had outgrown it.
The shoe didn't fit anymore.
(34:42):
It's time to move on and,believe me, it was a great sale.
We walked away good, never sheda tear.
The timing was right.
I've had a few other smallbusinesses and companies that I
have sold.
You know started from little tonothing and sold, and, believe
me, it's great to walk away witha little money in your pocket.
That's for sure it really is.
(35:04):
So keep that in mind.
Exit strategy it's huge, allright.
chris (35:09):
All right Sounds good.
Do we leave anything out?
I don't think so.
I think that was your completelist.
Again, we touch on a lot ofthese things.
We've touched on almost allthese topics, so we kind of came
back to this one to kind offinish it off, but it's an
important and so we'reconstantly coming back to the
finances the balance sheets, thesales records, the profit and
(35:46):
loss statements, and you'llforever hear Chris and I saying
things like don't go to wherethe puck is.
dennis (35:48):
Go to where the puck is going to be when you get there.
It hints at being a visionary.
Look ahead.
Don't be looking two, threeweeks out.
Yeah, look at this month ascompared to last year in this
particular month, but look aheadone, two, three years.
chris (36:04):
See where you're going so you know where you're going to
be when you get there, yep, yep,and start as early as you can,
and if you haven't done that,then start now, because there's
no time better than the present.
dennis (36:15):
Okay, no monkeys were harmed in the making of this
podcast.
Thanks for listening.
chris (36:20):
All right, see you guys next time.
Bye, thank you for tuning in toMonkey Business Radio.
If you enjoyed today's episode,please make sure to subscribe,
like and follow us wherever youget your podcasts.
It really helps us reach moreaspiring entrepreneurs like you,
and if you've got a question ortopic you'd like us to cover,
(36:40):
leave a comment or reach out tous on social media.
We'd love to hear your thoughtsand keep the conversation going
.
Don't forget to leave us afive-star review if you found
the episode valuable and makesure to share it with anyone who
might benefit from our tips andstories.
We'll see you next time.
Benefit from our tips andstories.
We'll see you next time.
This podcast is produced byAmerican Gutter Monkeys LLC.
Build real wealth throughbusiness ownership.
(37:02):
For details, visit us atAmericanGutterMonkeyscom.
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