Episode 113 Podcast Transcript

Speaker 1 (00:00):

It’s about asking yourself that honest question around, could my business run without me for a week, for two weeks, for four weeks? And if the answer is no, then you don’t have a business. You’ve just got a highly risky job that you’ve built around you. And that’s not what running a business is all about. G’day everyone. Rob Kropp and Dan Stones here for Pravar Group, and welcome back to another episode of The Trade Den. Good to have you back, Dan. How are you?

Speaker 2 (00:35):

Good to be back, Rob. Very well looking forward to today. Good episode, good topic, a meaty topic. I love this question. Could your business survive for a month without you? It’s huge. And the reason your business can’t run without usually is because your team isn’t good enough.That’s the fact. And I’m not saying that to be nasty, but the reason for that is because you haven’t set it up to be. You made yourself the owner to every question. You’re the approver of every decision. You’re the one person who knows where everything is. You’re the one person that knows how to handle the difficult clients, what to fix when things go wrong. And you do that because you care and it’s because of the natural evolution of your business, because no one knows the business like you. And whilst that’s true, it also leads to that trap of everything’s easier when you do it yourself.

(01:20):

So now you’re trapped inside the things that you’ve already built yourself. So today, that question, could your business run without you? It’s not so much a question about, can I go on holidays for a month? Although most people do that and we’ll talk about that today. But it is really the ultimate test of whether you’ve built a business or as you said, just a very demanding job. It’s a huge question.

Speaker 1 (01:41):

Yeah. The sad reality is most people, like we said at the top, get into business for to have more money, have more time, have more choice. But you ask a business owner, when was the last time you had even a week’s break? And they’re like, “I can’t remember that the last time I even had a holiday.” And if I could only have one week, Rob, I would sacrifice everything just to have a week with my family uninterrupted. It’s a pipe dream a week, let alone even a month for a lot of people. But today we’re going to show you it’s totally possible. And that’s why this question is so challenging to get you thinking in a different way.

Speaker 2 (02:17):

Yeah. And you’ve done it. I’ve done it. We’ve had clients that say I’d gladly give up profit to get some of that. That’s the thing that I’m really after. That’s that valuable thing that they want. So it’s a real challenge. And today we’re going to break down or start with the four things that typically break when you leave, because if you understand that, you start to understand how you can set yourself up. So if you stepped away for a month, here’s the things that typically fall apart first. And the first one we’re going to talk about is quoting and sales. One of the biggest.

Speaker 1 (02:48):

It’s the biggest because when you’re trying to grow a business, it’s generally the last thing that as a business owner, you will hand over. You can phase yourself off the tools, you can get a bookkeeper, an admin in place, potentially a project manager if you’re big enough. But most business owners hold on to the quoting and estimation of jobs. And you got to think about it. If you go away for a week, two weeks or more, then there’s no quotes going out the door. And you don’t necessarily feel it now. You’ll feel it in three or six months time post holiday because there’s generally that gestation period from when a quote comes in the door, goes out the door and you win the job. So it’s not an immediate feeling, but it’s a definite feeling in the future because you know you haven’t quoted for that period you’ve been on break.

Speaker 2 (03:42):

Yeah. Not only quoted for it, I think also the fact that it’s never written down. Some clients have tied themselves up in some horrible knots because the whole quoting process lives inside their head. There’s no price list. If there is, it’s either in their head or it’s so out of date for everyone else to refer to it. So that sales process, the actual sales process, and it’s not just the front end, but converting existing quotes, like the idea of who goes back and follows up on the outstanding ones while you’re gone. So there’s never a natural point to go, right, we can now tidy that up and I’ll leave quoting in sales for a few months. That’s one part of your business that cannot stop. What about the second one then? Job management. And this is a key one I think as well. This is another thing that people are deadset afraid to let go of or have got real problems in their business and they know it, but they haven’t dealt with it, which means it’s always there. Job management, another huge one.

Speaker 1 (04:33):

It is a big one because imagine if you’re not there, who’s scheduling, who’s coordinating the team, who’s ordering materials, who’s liaising with customers, who’s dealing with challenges on site. All these things that you just do day in, day, out, week in, week out, all of a sudden just stop when you’re away. And this is why most people, most tradies, when they’re on holidays, they’ve got a phone strapped to the area or a laptop next to the pool because they’re trying to keep their team busy because in their mind they’re like, “Well, I’m paying for a holiday and I’m paying for my boats to sit around and be inefficient.” And so that’s why most people work on the holidays because they’ve got to keep the jobs moving along. So if this is an area in your business, there’s a real weakness for a lot of businesses as it is, things can come to a grinding hold very, very quickly if you’re not there for even a short period of time.

Speaker 2 (05:28):

It really does. The other side of that obviously is the client and what they see. The job’s obviously got the client involved. And then it’s amazing how much they sort of feel abandoned in this situation when you know you can’t be away for a period of time. I guarantee, if you really look at it, one of the fears you’ll have is that the clients are going to feel like they’ve been abandoned. Who do we talk to? Where do we go? Small decisions. Everything stalls and you end up in that position. If you’re not available, the client’s going to be like, “Well, the whole business is shut down.” And it’s not the case.

Speaker 1 (05:56):

And this is why most in trades businesses, this is why most tradies shut down for two or three a weeks or more over Christmas because it’s the only time they can take a break because the whole industry shuts down, but they feel like it’s their only chance because they’re like, “Oh, well, the industry shuts down. This is my opportunity to do it because it means that it’s my opportunity to not have to worry about estimation and sales and job management over this period.” And they jump at the opportunity during that period.

Speaker 2 (06:24):

Yeah. It’s a real trap though, that sales ones. This is when the sales thing really kicks off because they think they’re getting their break, but then everything falls apart still, even when they do that. And it’s an agreed thing in the industry, but then it’s picking up all those pieces. The third one we’re going to talk about is day-to-day decisions. And this is a big one because when you’ve got a team that is reliant on you for everything, their decision making muscles wither, they atrophy. It’s like you don’t use your right leg for a fair amount of time. It’s going to atrophy and be weak. And that’s what happens with teams when the owner’s making all the decisions. The decision making muscle within the team is non-existent.

Speaker 1 (07:03):

It’s a big thing when delegations are real weakness for a lot of business owners, and that’s a management skill that needs to be developed over a period of time. But the reality is most business owners are poor delegators. They’re poor at delegating the ability for their team to be able to make decisions. And so that’s why so many business owners cop a thousand emails, text messages, phone calls day in day from their team because they’ve never learned to effectively delegate to their team and they’re trained their team on a day-to-day basis to keep coming back to them to solve problems. And this is the common complaint that we hear from so many trades. It’s like, “Oh, it feels like I’m just managing a kindergarten.” It’s like, “Well, mate, you’ve created this kindergarten because your team, even though they’re qualified tradesmen, they keep coming back to you for decisions because you’ve trained them to operate that way.” So not only you can’t go away on holidays, you’ve put yourself into that box seat to make the decisions and do the thinking for them.

Speaker 2 (08:05):

It’s amazing when we hear that. And you’re right, I was just thinking as you were talking, owners don’t know how to delegate, but what they’re very good at is training a team full of escalators where everything has to be escalated. And I think that’s what happens. And it’s amazing that even with clients, another list of clients goes through your mind. But guys that have got people in management positions who are actually paid to make these decisions, yet the minute the boss is away, they can’t make it, they don’t know how to make it, there’s no confidence, there’s no decision making history of how this should work and everything stalls. It’s incredible.

Speaker 1 (08:38):

It is. And we’ll get to the fourth one in a second, but this is why so many business owners do have that mindset where it’s like, well, naturally, if I grow my business and take on more revenue and build my team and over time put in systems, it’s like, well, people and systems will set me free and I’ll have more holidays. That is true, but they never get to experience that because they grow their business, they build their team and their systems, but they’re still the bottleneck around this. They’re still the go-to. They’re still the person who makes all the decisions because you’ve built your business that way, you’ve trained your team that way, and all the systems route through you, and that’s why you’re feeling trapped. And no wonder you’re stuck making the decisions on a day-to-day basis, even though you’ve got people around you, that’s why you’re trapped even when you’re at work, let alone even trying to have a holiday and have time off with your family.

(09:35):

And so people and systems do set you free, but you’ve got to build it and design it the right way so that it can be managed accordingly.

Speaker 2 (09:44):

Yeah. I think people in systems set you free, but it’s not systems as in another app set you free. It’s not people as in just put more people in the team and the more you’ve got, the easier it gets. It’s actually, there’s a whole list of things that go with that, skills you have to learn on the back of doing that. It’s more than just ticking that box, which a lot of people sadly just think, “I’ll tick the box. I’ve got the people and it’s still shit. Why would I bother and they roll back?” Let’s go full circle here, come back almost a knock on of what we discussed first with quoting and sales. The next thing that falls apart is invoicing, cash flow, payroll, those functions in the business typically that are held onto by an owner who hasn’t got any leverage in their business.

Speaker 1 (10:25):

This is a big one because this is the financial engine of the business.This is the lifeblood of the business where money’s coming in, invoices are going out the door, money’s coming in the door and payroll needs to keep happening on a week-to-week basis to keep your employees happy. And so how many times have we heard stories and clients where it’s like, “Oh, my wife does the books and she was up late at night at midnight doing payroll the night before we’re going on holidays or horror stories. It’s like, well, she was doing payroll on the way to the hospital to have their babies.” =

Speaker 2 (10:59):

And sit in the car all the time. Yeah, absolutely.

Speaker 1 (11:02):

Or they’re on holidays and they’re logging in trying to do payroll on holidays. That sucks. And that’s just a symptom of a business owner holding onto that financial function and haven’t delegated accordingly. And it’s important. Invoices have to go out the door. Money’s got to keep coming in and the boys and the team have to keep getting paid. And so this is the big one that a lot of people get stuck with.

Speaker 2 (11:27):

Yeah, absolutely. Let’s back this up and say, this is common. These aren’t just areas you think you’ve never heard of. You probably know this. And let’s go through … I want to talk to you. I’ve got, like I said before, so many clients in mind as we go through this that have been through it. One of the ones I’m thinking of is Matt from MTR, and we talked to Matt a while ago on the podcast, but Matt had a real challenge. He wanted to go on leave and he’d never been able to go on leave. And I know you were coaching him at the time. What was Matt’s … If we use that as sort of an example or a case study, where did Matt start with this in the journey? Did he just go on leave Snap decision and go, or was it a plan thing he did?

(12:05):

And he’s had a couple of goes at this over the years. So I’m interested to hear your take on Matt in the beginning.

Speaker 1 (12:11):

In the beginning, I think it was just … I think deep down, he’s always loved … He’s got a young family, he’s got a wife and young family. He’s got his boys, and he loves his caravaning and he’s fishing, and he’s always wanted to do an adventure up to the Cape. For him, it’s always been a pipe dream. And I think for a lot of tradies, it’s a pipe dream. It always is a pipe dream. And for Matt, he came into coaching around doing just over a million dollars, had a really small team around him as a Sparky. And the reason why it was a pipe dream is because he was the admin. He was the bookkeeper. He was still on the tours and he’s like, “I can’t even take a day off, let alone taking a week or two or more off.” And so at the beginning, it was so far, not even possible in his mind, but I think deep inside, he really wanted to make it work one day.

Speaker 2 (13:07):

So what was his approach to it? And I’m interested in the timing here because people go, “I want to take a week off,” but it’s usually when they burn out and they’re right at the end of their open. If this doesn’t happen soon, I don’t know where I’m going to snap. Matt didn’t do that. The timing in terms of when he started to think about this, when did it go from being a dream or a pipe dream into, “We’re going to do something about this real and make it happen.”

Speaker 1 (13:29):

I always say that for a trades business, unless you’re turning over $2 million or more, which is our definition of an owner-operator business, it’s a $2 million plus owner-operator business, you’re wasting your time because you’ve genuinely got no flexibility, you’ve got no freedom and you’ve got no choice. You’ve just got a highly risky, highly leveraged job. And for Matt, he was at that million dollar mark and it took him a good 12 to 18-ish months to be able to go from just over a million dollars to banging on the door of that $2 million business. And that’s where he got off the tools. He got some support in from the bookkeeping function. He got some admin support in. He really put himself in the box seat around driving sales and managing work. And I think as he started to get closer to that $2 million mark and his life somewhat started to settle down, he freed his nights and his weekends up.

(14:31):

I think he started to see that, “Hey, this is possible.” And he had little breaks and then he’s like, “Okay, I can see this. Let’s do it. Let’s really put our sights on it. Let’s make it happen.”

Speaker 2 (14:44):

In the end, what was the jump he made to do it and talk about the trip he went on, the trip he’s on, all of that sort of stuff. But what were that big lever that he pulled to give himself the confidence to do that? Probably not only once now, but probably twice I can think of.

Speaker 1 (15:01):

The big trip that he went is he went offline for a number of weeks up to the Cape. I think he spent three to four weeks up there and he pretty much took his family with another couple of other families and they jumped in their four-wheel drive and towed their caravan all the way from Melbourne all the way up to the Cape, and they had the best time. And he pretty much went offline. And in January, we always do visioneering for our clients, and he was able to connect the dots. And the reason why we used the two-ish million dollar mark, because that’s when the business warrants having a project manager. And for Matt, it was like, “Well, if I step a project manager in, even if it’s part-time to begin with, with the view to moving full-time, and if I can have a PM in there managing the day-to-day operations around the scheduling and ordering materials, and managing the guys, and liaising with the builders, and helping with variations, and a little bit of quoting, and really managing the day-to-day delivery of the jobs, that’s my ticket to be able to have my extended holiday.” That was the turning point for Matt where he is like, “Okay, I can see if I grow that, put in that PM, gives me that breakoff.” And that was the turning point where Matt’s like, “Right, let’s get to work and make it happen.”

Speaker 2 (16:24):

And he did. And he didn’t look back at a great trip, which is awesome. And you come back to everything you’ve just talked about there, quoting and sales, job management, day-to-day decisions, invoicing, cash flow and payroll. He took care of that. He had a plan in place. He deliberately set himself up that that wasn’t going to be the thing that sunk in once he left the state.

Speaker 1 (16:43):

Correct. And that’s why I always say that unless you’re looking at a $2 million plus trades business, you’re wasting your time because if you don’t have that size business, it doesn’t warrant putting a PM on. And at that size business, you’re off the tools, you’ve got site leadership through leading hands, you’ve got an admin and a bookkeeper and you’re tapping at the door ready for a PM. All of a sudden, as you just said, some quoting can get done, the day-to-day operations can be managed, the admin person can draught invoices, they can do some debtor management through the bookkeeper, and payroll can be done through the bookkeeper. So those four primary challenges that we spoke around earlier in the episode are now handled through good people and systems around those people, and that’s what sets you free from the operations. Now, it wasn’t perfect for Matt.

(17:37):

There was still challenges and shit that went sideways, but that’s why we always have that level of business is important because your business is now at the economies of scale to be able to ensure that those functions get done even for you to at least have one week off, let alone three to four like Matt had.

Speaker 2 (17:58):

The other one I’m thinking of as well, and it’s a slight twist on this. So Matt did it with the structure, the timing, and all that sort of stuff. The other one I want to talk about is Rob Smedley, who had a big US trip, but that was a little bit, and I know you were coaching him at the time too, this was a while ago now, but when he did that, that was a different take on how to do this as well. He had a different approach.

Speaker 1 (18:18):

He did. And he’s an engineer. So I’m going to pardon my pun here, but he runs an engineering business. And in his mind, he was, “Well, how do I reverse engineer this? ” And so Matt kind of built his way up to being able to have a break. Rob Smedley reversed engineered it to be able to go, “Well, I’m having a break. What needs to happen in order for me to be offline while I’m away?” So two different approaches, that’s because the guys thought differently. But Rob was able to use this question to be able to go, “Well, what does it need to look like for me to be away?” Reversed engineered it from where he wanted to be to where he is today, and he was able to fill all the gaps. And then that became his intentional business growth plan with the view of being able to go away and have a break.

(19:12):

So same outcome as Matt, just a different approach of tackling it.

Speaker 2 (19:16):

Yeah. And then being the engineer, he stress tested the whole thing while he was away and didn’t get caught up in it. It was literally, he knew things were going to go sideways. It wasn’t a matter of if it does. It was when it does, let’s document it, let’s come back, review it again, and then let’s double down on where those gaps were in practise. It was a really important step for him.

Speaker 1 (19:36):

It was because for Rob, he was worried about, he’s like, “Well, what happens if this goes wrong and what happens if that goes wrong? And what happens if we get a quote wrong? Or what happens if we don’t invoice correctly? Or what happens if the team aren’t as productive as they’d like to be or what happens if an invoice goes out the door and it’s not right?” And at the time when we were coaching him through it, it’s like, “Well, mate, we use stress test a lot in that phase.” It’s like, “Well, mate, let’s use this as an opportunity to put the business under stress and let’s pressure test everything and it’s not going to be perfect. There’s things are going to break. Go on your holidays and use this as an opportunity to find all the gaps while you’re away.” And Rob did that.

(20:16):

He was a little bit nervous. He worked his ass off going leading up to that point, went away, came back and then went right, that was broken. That didn’t work. We need to fix that. We need to fix this. We need to fix that. And then that became the basis of his quarterly action plans going forward to fix the holes, but he never would’ve had that opportunity to fix them if he hadn’t have gone on break and waited for everything to be perfect before he went.

Speaker 2 (20:41):

I love that, that idea of waiting for it to all be perfect. You’ll never get a break if you’re waiting for it to all be perfect, but there’s steps you can take. So that leads us beautifully into what we’re going to call … It’s not a challenge as much. It’s a series of questions, but we’re going to call this the month without you audit. And what we’re saying here is you don’t have to go on holidays for a month, but we’d love to say, “Yeah, just clear out for a month and enjoy yourself and we’ll see what happens.” But we’re not saying that. But if you want to know if your business is ready, it’s really a matter. And as you’ve sort of heard, the two different ways that Rob and Matt both did it was to ask the right questions. And we really want you to start by asking the right questions.

(21:19):

And the very first one is, if you’re unreachable for a month, what’s the first thing that breaks? Just put yourself in that mode. I’m out of the office. I’m not there for a week. What’s broken by the end of that week? And if you ask that question, you start to get a feel for where those gaps are like Rob did, and you write those down and list them out. And then when you get to that next phase of that, once you know what it is that breaks, ask yourself the next question. Is it a people problem? Is it a systems problem or is it a you problem? Now, Rob, do you want to explain what we mean by is it a you problem?

Speaker 1 (21:53):

Well, sometimes it can be you as the owner. It’s you’re the one holding tight. You’ve got the mindset that no one can … It saves me time and energy, if money, if I do it myself and you become the bottleneck in the business. So sometimes it’s not the people problem or the systems problem. It’s you as the owner that is holding on tight strangling this business. And how often do we hear it? It’s like, “Oh, I went away on holidays for a week and the business worked better without me. ” And that’s what we mean by it’s a you problem. So that’s a you problem.

Speaker 2 (22:24):

Yeah, absolutely. Then the question after that, you’ve identified if it is a people systems or a you problem, what would need to exist? A process, a person, a documented decision. By documented decision, we made a walkthrough of if this happens then sort of thing, a little bit of a playbook, if you like. What would it be? What would need to exist in order to stop it from breaking? And as you work through each area of your business, be it in the quoting, the sales, the operations, client management, admin, whatever it is, repeat those sort of questions if you need to, go through the different functions and areas of your business. And then you’ve just got to ask yourself, for each one of these, does it run because I’m here or does it run because we’ve built it to run that way? And the goal is to get the business to run that way because that’s the bit that sets you free.

(23:15):

And then probably the last point I want to make is that this is not fix it all at once. This isn’t a thing where you go and fix it all at once. Like Matt handled his things over time and even Smeds had a time where he was thinking about this and where those gaps were. So it’s really important that people understand that it’s not a let’s fix it once or just fix it all at once, I should say, Rob.

Speaker 1 (23:36):

Correct. Like you look at Matt from MTR, it was a 12 to 18 month period to go from a million dollars through the hamster wheel into a owner operator business to get to that $2 million mark. And then it took him another 12 months to be able to then really get the structure of the project manager and a little bit of estimation support in there. It took him another 12 months to get there. So if you look at Matt’s journey, he has executed like a champion over a two and a half period, two and a half year period to be able to earn the right to be able to step away from that long period of time. So it wasn’t a, “Hey, let’s do this and work on everything at once and then let’s go on holidays next quarter kind of thing.” It was a long journey.

(24:18):

And that’s why we also live and breathe by the principle of one thing at a time overtime. And Matt and Rob Smedley both did that where they planned for it in the future, but it gave them meaning, gave them purpose around their strategic plans to be able to get those things done. So one thing at a time over time, and don’t rush the process, just chip away at making these improvements with the intention of being able to go and have that holiday when you choose to.

Speaker 2 (24:48):

Nice. That’s how you go from being trapped to being free, like we said at the very beginning.

Speaker 1 (24:52):

What I love about this episode is that it’s about asking yourself that honest question around, could my business run without me for a week, for two weeks, for four weeks? And if the answer is no, then you don’t have a business. You’ve just got a highly risky job that you’ve built around you, and that’s not what running a business is all about. And so if you want to be in that position where you do have freedom from the day-to-day operations in your business and that you know that good people and good systems and good structure is what’s required to be able to get you from where you are to enjoy life outside of the business with you and your family, which is why you probably started the business in the first place, then jump across to strategysession.com.au, fill out the application form. And if you qualify, book it a time that suits and let’s have a discovery call to be able to see how we might be able to help you experience what this journey of business is all about, about being able to do great things, but also being able to have a life outside of the business as well.

(25:59):

Hopefully you enjoyed today’s episode. Hopefully you’ve loved the stories around Matt and Rob Smedley. It’s super inspiring and I love seeing clients being able to build great businesses and be great family men and be able to enjoy the life as well. That’s what it’s all about. Hopefully you’ve enjoyed it and Dan hasn’t been a great conversation.

Speaker 2 (26:16):

Yeah, I love it. Knew it was going to be a good one. Good fun.

Speaker 1 (26:20):

Until next episode, take care.

Speaker 2 (26:22):

See you soon.