Identify Your Contracting Business Stage: Key Signs

Understanding where we stand in our contracting business can be challenging, especially when revenue figures don't tell the full story. For instance, a painting contractor with an average ticket of $5,000 is navigating a different landscape than a roofing contractor averaging $115,000. It's crucial to assess what roles we're fulfilling as owners—whether it's selling, producing, or marketing—and how these responsibilities might be stunting our growth.

Many of us may find ourselves in the startup phase, transitioning from technician to business owner. This video explores essential strategies for scaling up and breaking through that $500K to $1 million revenue mark. Discover tools like our free Contractor's Blueprint to Scaling Mastery that guide you on this journey!

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Episode Transcript

Jim Johnson (00:04):
How do you know where you are?
What stage are you?
Um, because sometimes thenumbers don't tell the whole
story.
Uh, for example, if I'm apainting contractor, my average
ticket is, you know, 5, 000 orso.
Um, you, you might be at a wholedifferent place than a roofing
contractor whose average ticketis 15, 000.

(00:26):
So revenue isn't really yourindicator of where you are.
Your biggest indicator is Whatare you doing as an owner?
Uh, are you selling?
Are you producing?
Are you marketing?
Are you, are you doing all thethings and it's keeping a lid on
your growth because you were theone doing everything and it's,

(00:48):
you're doing everything becauseyou think that's the way it has
to be done.
You may have even tried to hirea couple of people and it didn't
work out real well.
They didn't perform real well.
And so where you are as acontractor is you're kind of in
startup phase.
You're, you're a rookie.
You're, you're thinking, um,like, Hey, this is something I
want to do.

(01:09):
And it may have actually been,been done as an accident almost.
You were maybe working forsomebody else as either an
installer or a salesperson.
And then somebody on the sidekind of said, Hey, can you do my
project?
And you're like, Hey, thatworked out good.
They got a referral.
And now this thing just kind ofturned into a business.
And what you really need tothink of yourself as is as a

(01:30):
technician.
That's really who you are atthis point in time.
And so as a technician, you havecertain things you've got to do
to just get to enough revenueand profit that you're allowed
to hire a few more people.
Okay?
Some people that can help youand know who to hire at the
right time.
It's why we have this wholething called the million dollar

(01:52):
must on our platform.
That's free.
It doesn't cost you anything.
Just hop in, go check it out andit will give you literally in
order the things that you needto do.
To start breaking into this 500,000 to 1, 000, 000 revenue mark,
depending on the size of theproject that you sell.

(02:12):
So, how do I know which stageI'm at?
That's the key question.
And one of the things you cando, like we offer this thing,
you can actually like downloadit.
Is our, uh, contractorsblueprint to scaling mastery.
Like these are the things Ishould be working on at these
times.
We actually meet with people andgo through that kind of stuff

(02:33):
with them to help them out withthat.
But for you to kind ofunderstand it is I am all things
to everybody.
That's number one.
And I don't know it nearlyenough.
That's where you're at in stageone technician.
I just know my one thing thatI'm really good at.
And I don't know a lot of theother stuff, but I'm, I'm good
enough and people like me wellenough where I do good enough
work.
I'm getting more business.

(02:55):
So I need to get these basicsdown to start moving towards the
next level, which is theoperator.
This operator has problems withtime management.
They struggle with getting allthe stuff done.
They're starting to feel reallybusy.
Um, although they're notgenerating quite the revenue or
the profit that they had hopedthey needed to.

(03:15):
And that's because they haven'tput in these key pieces that are
really important at that time tohelp them.
To do, and they're probablymaking a lot of mistakes by
trying to do things outside ofthat.
And above that stage wise, theyget them really confused,
completely like, Hey, I I'mdoing what those guys are doing.
It's just not working out forme.
Well, what you don't realizethose guys did step one and step

(03:37):
two and step three before that.
And so once you kind of get tothis operator status where
you're starting to break amillion dollars pretty
consistently, You start movingup the scale a little bit, and
you actually become anentrepreneur.
You get much better at yourplanning.
You start looking at yourstrengths and weaknesses.
You are looking at other peopleas leaders for you.

(04:00):
You're creating a vision that isvery clear and aligned with all
of your people.
You have, um, your, your HR hasgotten much clearer.
As far as like job descriptions,maybe not fully a company
handbook yet, but I've got somereally strong job descriptions.
You understand finances at thispoint.
And so these finances are thelevers that we can pull to start

(04:23):
to move us towards that three to5 million, uh, which starts to
create some revenue and someprofit.
Hopefully I've done well thatyou can now start to scale a
little bit with your business.
But once again, wrong thing,wrong time can pull you back
from that really fast.
It actually happened to mepretty heavy.
I thought, Oh man, I've got thisthing now we've got the profit

(04:45):
to do things.
I'm going to go invest heavyinto marketing.
I'm going to go spend 10 percentof our projected budgetary
revenue on, um, marketing.
And what that did, because wedid that, when we didn't have
all the other things in place,like a great sales process, a
great training program, a greatclient experience, like all

(05:07):
these other things that werereally important that I should
have had in place first, I blewabout 200, 000.
That we just did not convert.
You talk about taking a hit andtaking a step back.
We had to take a step back andgo, Hey, wait a minute.
What did we miss?
And we missed these things thatwe needed to do that were super

(05:27):
important to take us to thatnext level.
But once you start hitting thatthree to 5 million, You run into
different problems, you run intodifferent caps, you run into
communication issues with theteam, and we start to get
overwhelmed again by questionstrying to solve problems.
But if we do each one of thosethings first, um, you're going

(05:48):
to be in a great position.
Now, as you move further downthe road, I've got this
entrepreneur thing figured out,and we're consistently doing,
you know, 5 million or so, andyou're wanting to grow again.
You're going to become abusiness at that point.
That's the new thing that youbecome.
So if you're thinking of a stagelike, Hey, I'm a rookie, a
startup, I'm just figuring itout.

(06:09):
I'm a technician and I've got askill that works really well.
I've become an operator.
So I've got a couple of peopleworking for me, but it's not
real big yet.
Not scaling it the way I wouldlike to.
And then I become anentrepreneur.
So I'm starting to get some ofthat stuff in place.
It's really important.
And then the next thing, usuallyyou're getting into this five to
15 million and depending uponyour type of company is this

(06:33):
idea of a business wherestructure becomes really
important.
You, everything starts to getfollowed at which the idea is to
become this well oiled machine.
And this is the place.
This is the key spot whereyou're Where the person that
owns the company truly starts tobecome an owner.
They start to own the companyinstead of the company owning

(06:54):
them.
All the others, entrepreneur,operator, technician, the
business kind of owns you.
And our job is as coaches is toget you from there to owning
your business and having it workfor you to create the lifestyle
that you're after.
So that, that's why we put allthis other stuff in place, which
allows us to scale thebusinesses quickly.

(07:17):
Um, these things do not take ahuge amount of effort, but they
are things that have to be done.
We just tick them off, knockthem off, and then we get there
a lot faster than you, you wouldever imagine.
But as a business, you run intoall this other stuff where this
is where you're getting anemployee handbooks and
understanding your numbersreally well so that you can pull
the right lever at the righttime.

(07:38):
So how fast does it take to do ajob from start to finish and
tracking that?
I think a lot of reporting andfeedback from leadership to
tweak those numbers individuallybased on where that homeowner is
and what's taking us too long.
We have all of these differentthings that we need to start
looking at from an owner'sperspective, instead of the

(08:02):
operator or entrepreneur'sperspective, we start to put
leaders in place that we payvery well to make sure that they
do a good job of getting us towhere we want to go with our
vision and our job as owners isto lead that well.
To love our people and give themthe tools so that they can be
successful.
If we don't do that, um, we'regoing to get stuck right here

(08:25):
between entrepreneur andbusiness.
So that's kind of the firstfour.
There's a couple more when itgets into expansion and things
like that, where you're startingto have multiple locations, but
that should give you a prettygood idea of like, Hey, where am
I in the stage of my business?
And a lot of us will lie toourselves, lie to ourselves and

(08:46):
say, oh, I'm an entrepreneur.
When really we're probably atoperator or technician, we
haven't put those things inplace yet that make us
successful.
Like, for example, I can tellyou right now that anybody
listening to this right now thatdoesn't have any kind of
training stuff on a platformthat allows their people to

(09:07):
learn from it is nothing morethan an operator.
You have not gotten toentrepreneur or business at this
point.