Episode 125 Podcast Transcript
Speaker 1 (00:00):
Every client that we bring on who gets the million dollar mark and what helps them break through is number one, transitioning them off the tools and number two, getting an amazing operational admin or CA in place. And that’s what unlocks the next phase of growth. G’day everyone. Rob Kropp and Dan Stones here from Pravar Group and welcome back to another episode of The Trade Den. Good to have you back, Dan. How are you?
Speaker 2 (00:29):
Good to be back. Thank you, Rob. Hi, everyone. Episode 125. We’re getting up there now, aren’t we? We are.
Speaker 1 (00:35):
Pretty cool. Great. I love it.
Speaker 2 (00:37):
It is. Very cool. All right. Yeah, today we’re going to be talking about something that’s really, really cool. And the reason why, if we start there, why most tradies don’t hire an admin or they resist hiring an admin isn’t because they can’t see the value in it. Intellectually, it makes sense, but the resistance comes because their heads are way too full with all of the reasons why it won’t work. All these sort of questions floating around like, what work should they do? Surely it’s a waste of money. If I can do it myself, why wouldn’t I? And these are the wrong questions and today we’re going to start by flipping them around. So Rob, let’s start off at that point. Why most tradies don’t make the move. The first one is things like, well, what are they going to do all day? Those sort of questions and how we hear them.
(01:18):
And the flip side of that is what we want to talk about.
Speaker 1 (01:20):
Yeah, it is. I think it’s because for most trades, they do the admin themselves and they’ve never actually sat down and got clarity around, well, what does an admin actually do? What are their roles? What are their responsibilities? They’re busy already doing the admin, but it’s not until someone helps coach them through or what is the actual role of an admin person and what is the vast range of work that they can actually do when they finally realise it’s like, hang on a second, there’s a lot of that shit that I shouldn’t be doing and they really are low value tasks.
Speaker 2 (01:55):
Yeah. I like the way you said we coached them through it. It’s almost sometimes we’ve got to force them into it at this point. The noise in their head around that and those questions like, what should they do? I don’t know. Will they have enough work is the next one, right? Have I got enough work for an admin to actually do some work?
Speaker 1 (02:10):
Yeah, I think that’s a common thing where it’s like, well, I’m not sure can I even fill a person’s role around that? And it’s natural to ask these questions because you really, for a lot of trades business owners who’s never had an admin person around them, they’ve never experienced the gift of having a great person who is their profession, by the way.That’s their profession and their craft. Just like your profession and craft is being a tradesman. This is what they do for a living. And when you get that gift of having that person around you, you realise that there’s a lot of things you’ve been holding onto. And when you talk this through with clients, it’s like all the apprenticeship stuff. It’s organising trucks to be able to get Rego and insurance and send them off for maintenance and all those entering into job management systems and all these things of photos for jobs and responding to emails and taking phone calls.
(03:01):
It’s when the business owner then goes, “Oh yeah, there is a lot of shit that I do that I probably shouldn’t be doing.” It’s a real eye opener, isn’t it?
Speaker 2 (03:08):
It really is. That whole blasting open the role and where it should sit. It becomes really apparent when you really break it down. So there’s that role element. The next little bit of this is then the questions that come up around money and the financial side. The big one obviously is, well, I’m already battling. I’m already up against it. I feel like I’m sort of getting by, but only just, can I afford them? And that’s another sort of question that gets asked a lot without really exploring what it means to ask that question and how it relates to hiring an admin.
Speaker 1 (03:36):
It does. And when you’re in that space when money is tight, because when you really are starting to get ready for an admin person, like pretty much sub a million dollars, you probably don’t need an admin person. You can get away with you and a couple of guys and in your ground crew and some bookkeeping support, but it’s not really till you get $750,000 in rev per year. That’s when you really need the admin support around you. And when you are teetering on that turnover bracket, money is tight. Let’s face it is a very hard stage in business. And so I think that’s why a lot of business owners do, trades guys have that mindset going, “Well, how can I really afford them when cash is tight already? And I’m going to do this because it’s going to say, I’ll keep doing it because it’s going to save me time and energy and money.” But they’re looking at it through the lens of what it’s going to save them, not what it’s going to create for them.
(04:31):
So in business world, it’s called opportunity cost.
Speaker 2 (04:34):
Yeah, really good. We’re going to explore that a little bit more in detail. The other thing I think that people have is this fear around, “Well, sure, right now I can see I need it. I’m drowning right now, but what if the work dries up?” And again, you start talking about that sort of, well, I’ll have to do it myself or if work dries up, I’m not sure I can sustain this, but they’re doing that with the current mindset of everything else I have to do with it. You’ve got to sort of break that one up too.
Speaker 1 (04:58):
Yeah, it is. I spoke to a client today and we were just reflecting on where he’s come from and where he’s going. And he made the comment going, “I can’t believe I held off that long for not having an admin. It’s the best thoughts a week that I’ll ever spend.” And I realised how much I was actually doing and I put them on part-time and they could have easily been full-time from the word go. And so I think when you get that person in that role, you realise that, hey, they are an asset to the business. It’s not going to cost as much as you think. They pay for themselves very, very quickly and there’s never a lack of admin work that can get done on a day-to-day basis for where you are now, let them know where you’re trying to take the business. It’s one of those things that we always see it that a client never said to us, “Gee, I’m glad I wish I waited this long to get an admin. We’ve never seen it, have we? ”
Speaker 2 (05:50):
No it’s always. And we always have to act like we’re half surprised like, “Oh yeah, it worked again.” It still worked for you too. It sort of does for everyone that goes through this process properly. So we get these excuses still. We’ve got one more to go. We’ve got the role, we’ve got the financial impact. The next one’s like the logistics of it all. Where would I put them? I haven’t got an office. Where would they work? We hear that one as well.
Speaker 1 (06:11):
Yeah, this is a legitimate, I suppose, mental roadblock going, “Well, I work from home. We’ve got a growing business. I don’t mind, I suppose the guy’s coming and going from picking up gear and stuff from home, but I really don’t want an admin person coming and working from the spare office in the front of our house.” And so it’s natural to have that. But I think what the pandemic taught us is that it’s totally possible to be able to work from home and have remote jobs. And you think about how we operate here in Pravar, we have a completely 100% remote team around Australia and we run a great business remotely and I think that for a trades business just to begin, it’s not good enough to use that as an excuse to be able to prevent you from taking this move of getting an admin person on because someone who does have a good home office environment set up and has the ability who can work autonomously and is a profession in this area, then they can totally work from home in the beginning.
(07:18):
Obviously you want to get to the point where you move into an office and you create that environment for your trades business. But in the beginning we can’t let them, that be an excuse to stop someone making this move, can we?
Speaker 2 (07:30):
No, not at all. And then the next thing is, well, all right, they can work remotely. We can work remotely, but what about getting together then? It’s sort of like the little subset of this. You got to think in terms of, well, you can go to a coffee shop, you can go to a cafe. There’s all sorts of places that are fit for doing these sort of meetings. We were in a hotel the other week I went downstairs and there was people just working as if it was an office in the lobby. There was places you can go. You’ve just got to have a little bit of forethought, a little bit of planning, find your spot. But there’s plenty of them that are suitable for conducting like a little one-on-one business meeting, coffee chat, whatever it is that you have where you catch up with your admin who’s otherwise remote.
Speaker 1 (08:04):
Yeah, it’s funny. I used to do living in Brisbane when I used to do my one-on-one coaching in person face-to-face. I actually used to do it out of a nice little area of a hotel where we’d go there two days a week in this little section. We had these big lounge chairs and the guy knew what our coffee orders were and we just had this rotating space of clients coming and going and it was so good. Beautiful. But that’s what you do when you’re trying to get a business up and out of the ground that there’s nothing wrong with that. There’s nothing wrong with having meetings and coffee shops and doing all those types of things. It’s totally okay. I think we just got to stop throwing up these excuses to prevent us from making these key moves in our business to help us get going.
Speaker 2 (08:50):
Yeah, absolutely. I’ve got to get, there used to be the thing about virtual offices and having rented, just even if it’s a one room thing, like you look at back on some of the stuff we did to present like what we thought we should be doing, it’s completely different and unnecessary in these days. Don’t let it be an obstacle, as you said. So let’s look at then the next thing. So we’ve talked about why you don’t make the move, called out some of that stuff and flipped the questions. Let’s look at why you should do this and why are we such big advocates of it? And this is going to centre around probably three reasons. We’ll break them down for you, but we talk in terms of low cost, low risk and high return. So let’s start off, Rob, with the first one, low cost and why we recommend that on that basis.
Speaker 1 (09:33):
When I speak to trades guys who are trying to grow their business, naturally they think the first thing that they’ve got to do is a big play that they’ve got to make is to get themselves off the tools obviously to get themselves in the office, but they’re pretty quick to be able to think, “Well, I’ve got to get estimation support or I’ve got to get a supervisor or a project manager.” And they are the right moves, but they’re the wrong time before you’ve got admin in place. And so what admin is it’s a low cost, low risk move where you have the ability to be able to hide this person in a part-time capacity and it’s a low cost move because you’re not spending $50, $60 or more dollars an hour on an estimator or a project manager. You’re literally spending $30 to $35 an hour.
(10:21):
So if you think about it from an admin, you could get someone in who works 20 hours a week on $35 an hour to get a really good admin person, that’s $700 a week plus super. That is the cheapest resource which will have the most amount of impact to get all those low value tasks off your plate. And you just got to think, what could you do with those 20 hours if you’re able to buy them back for $700 plus super? It’s a very low cost, low risk type of exchange to be able to buy back that time.
Speaker 2 (10:52):
Yeah. And I think where guys make the wrong step is they start to think, “Well, if I’m going to not be there, I’ve got to get someone in to replace me.” But you’re not going in for a like for like. And we had this a long time ago where the big thing was, well, I want to get as soon as I can someone into run ups or someone to be my GM because then I can step away because someone can do all the stuff I’m doing. But as long as you’re doing all those low value tasks or LVTs that we talk about, you don’t need more of that. You’re already wasting enough money with you doing it. You don’t want to replace you with a like for like and then just transfer the problem to someone else and double up on your overheads.
Speaker 1 (11:25):
Yeah, correct. This is about understanding the value of your time. You’ve got to really understand the value of your time. And when you’re trying to build a $1.5, $2, $3, $5 million business, you cannot be stuck doing low value tasks on site that your apprentices or a labourer or your tradesmen are doing and you cannot be stuck in the office doing low value tasks administrative tasks, which are $35 an hour task. Now that’s not being derogatory or anything around to the value of that admin person. It’s not that at all. It’s just that you’ve got to understand as a business owner, you’ve got to understand the value of your time. And this is what I was alluding to around before around opportunity cost. If you’re stuck doing 10 hours a week at $35 an hour, that’s $350 plus super that you could pay someone to do that, or you could go win a quote that’s going to be 10 grand, 20 grand, 50 grand, 100 grand, 200 grand.
(12:20):
And so I know I joke about it when I talk to a client for the first time, but I often say, I’m like, “Mate, you are often the most expensive admin person that I’ve met.” And that’s not being, again, it’s not being derogatory. It’s just like, mate, you are spending time on things that you shouldn’t at the expense of the things that you should when you could hire someone who loves that role and is very, very good at it.
Speaker 2 (12:42):
Yeah, really, really clear example of that. What about the last little piece I want to talk about here is the low risk and the flexibility side of this. The low risk is sort of when we talk about that is around the fact is that it’s not like it’s a high you make once, you invest all this time, you can’t find more people. There are a lot of admins out there and a lot of those admins that we talk about are looking for flexible work as well. And you can afford to be flexible because you don’t necessarily have to start with someone who’s loaded up full-time when you start to begin with.
Speaker 1 (13:12):
Definitely. And the admin function is, you’ve got to remember, an administrative role is a career path for someone. And even though you may not love it, someone else does love it. And again, without sounding sexist, it’s going to be that it might be that you’ve got someone who’s looking for part-time work. It could be a mom who loves admin work. That’s their career. It’s what they’ve chosen to do in the office environment and they might have a young family and they want to be able to be there for drop-offs and be available to start from 9:30 and then finish at 2:30 or 3:0c because they want to go and do pickups, but they’re very organised. They’ve come from the industry, they’re great around technology and they understand how the trade sector works, but they’ve got the responsibilities of a young family. And so to begin with, it’s actually lower cost because you can get someone part-time and the hourly rate and it’s lower risk because there’s more administrative people out there in the marketplace and it’s lower risk if they don’t work out, then you just go back to the market and rehire again without having too much impact on the business or on the customer base or whatever it is.
Speaker 2 (14:28):
Yeah. When you start to talk about that, once people get into this and they do it, it’s like it makes perfect sense. Why did I wait so long? If I could stress anything, my wife Carly, she’s a career administrator that you’re talking about and it’s he career, her passion, her absolute desire to be the best administrator she can. And what would turn into things like you hear her work and you watch what she does and you’re like, “I could not think of anything worse.” But she absolutely prides herself on being at the top of her game in that sense to be as effective as she can for the business she’s working for. So these people that have that passion that are looking to either reenter a workforce like you said or work around school hours, it’s the best of all worlds. So just have that idea that these people, it’s not like the thing you might hate admin, you might sit there going, “Who would want to do this job?” Those people exist and they’re worth their weight in gold if you find someone who is career admin minded because for them it is absolutely what they’re driven to do well.
Speaker 1 (15:26):
Yeah, they’re an organised person. They love organisation in the office environment and they love answering phone calls. They love sending emails and communication pieces. They’re happy to deal with apprenticeship boards. They love getting into the schedule and communicating with the guys and getting photos and sending out messages and talking to customers like that’s the role of a really good operational admin or a CA type of role depending on what industry you’re in if you’re more in the commercial or construction space But that’s a really important profession in itself. And you’re right, I think it’s shifting that mindset going, “Oh, fucking I wouldn’t want to do it. ” I’d hate to do that. Why would someone else? But there’s plenty of people who absolutely love to do it. And to be honest, it’s actually easier at the moment to hire an admin person than it is to hire a tradesperson.
Speaker 2 (16:16):
Yeah. And you’d be amazed. You can get almost the same level of effectiveness. When you actually make this move, what gets unlocked when someone else owns the admin is almost more valuable in a sense in so many ways than just bringing on more ground crew and more arms and legs on site. It has that benefit. So I don’t know if you want to talk to what gets unlocked, but just maybe talk about that for a bit because I’m sure it’s another thing that people take for granted or they just don’t know.
Speaker 1 (16:44):
Yeah. I use Chris, for example, who runs Sydney Metro Decking up in the shire. Great example because he’s probably maybe three or four months post getting an admin person in and it has just completely changed his world where he was that typical tradie working nights, working weekends, working 60, 70, 80 hours a week and he had hit capacity and therefore because he’d hit the capacity, the business started to plateau and the business had hit capacity. It wasn’t a market problem, it was a business owner problem. And so for him he’s like, “Oh, I get it. I can now see it. ” He went out to market, got a really good admin person, started them part-time and before long they’re going to be moving to full-time. But what it did is he reclaimed his nights, he reclaimed his weekends because all that shit that he was doing at nighttime, which was not best use of his time to all the things he was pushing out towards the end of the day that weren’t getting done during the day were now getting done by someone who was a hundred times faster than he was.
(17:51):
So what used to take him five hours takes someone one or two hours and so all of a sudden things were more efficient, more effective, he was more productive because it freed up time for him to do what mattered and things were just way more organised in the operational level and then all of a sudden, bang, the business is now taking off because he’s actually got the headspace and the free time to actually work on the business and the things that matter rather than getting bogged down and the shit that really just slows him down is not best use of his time.
Speaker 2 (18:20):
Yeah. And again, the impact of that is game changer. It really is for guys and it happens over and over again. Let’s talk a litle bit about how to approach it then. So hopefully we’ve made the case for it makes sense to do this, but how we approach this and I think where to start is we talk about three things again here, but skill, maturity and experience. But I want to start off just going on that value sort of chain a little bit more. Given the relative low cost of the role, this is not a time to sort of skimp on cost or try and do it on the cheap, just so you’ve got someone who can look at your emails. It’s way more at stake here, that skill maturity and experience and the relative cost. Let’s start there.
Speaker 1 (19:01):
Skills are really important. It’s like hiring an apprentice versus a qualified trades person. And when you hire an apprentice, you’ve got to somewhat babysit them. You’ve got to keep giving them direction. You’ve got to manage them, you’ve got to upskill them, you’ve got to train them. And I think that’s a bit of a block for when someone hires an admin person going, “Well, how do I manage them? How do I direct them? How do I train them when I don’t even know how to do this stuff myself?” And so when you hire an admin person, it’s the equivalent of hiring a great tradesperson. So go to market and our go – to strategy here at Pravar is go to market and find someone who’s an experienced admin, who’s happy to go part-time, potentially go to full-time and they’ve come from industry. So don’t get an admin person who’s worked at an accounting firm or a legal practise or a gym or a beautician place or whatever it is.
(19:57):
It’s like go and find someone who’s worked in a electrical company, a plumbing business, a carpentry business, a building company, a solar company, whatever it is, someone who actually understands the trades and construction industry and sector because what they’re going to do is bring that skill and that experience and that maturity into your business. So it means they’re going to get up to speed quicker, but it also means that it requires less management because they’re going to bring a lot of systems and processes into your world that you don’t have to train them up on.
Speaker 2 (20:28):
Yeah. I remember I did that with Ryan a while back who was a plumber and he’d struggled with this. He’d always be in his office. There’d be mountains of stuff. He’s trying to plough through it all the time. We went down this path and finally coached him, forced him to go down the admin hiring path and he found someone who he husband was a plumber as well and she used to do all the admin in the husband’s business and for whatever reason she’d left that, didn’t want to do it, wanted more responsibility or they needed more money. I can’t exactly remember. But then Ryan picked her up and she was amazing. As soon as she came in, everything turned on its head. Ryan was like, “You know more about this than I do. You can do all this. You’ve seen this before. Yeah, this is how we used to do it and here’s the processes I used to run and all this sort of stuff.” And all of a sudden Ryan was like, “Holy shit, I don’t have to… ” It’s not about me being the smartest one to get you up to this level. It’s just you run with it and go from there.” Yes, you’ve got to manage them, but you’re not limited, like you said before with an apprentice, where your apprentice comes on board and learns up to what you teach them. When you bring on the skilled person, they can go beyond even your own capability. So it’s really important to understand that point.
Speaker 1 (21:37):
It is. And imagine bringing someone on who understands what it’s like dealing with tradies out in your ground crew and apprentices, dealing with apprenticeship boards. They understand what it’s like to talk to suppliers and help with the organisation, the scheduling, the quote requests from other subcontractors. It’s the ability to understand what a job management system is. And maybe they’ve worked on a score or a Simpro and then you are trying to implement that so they can become a bit of a project champion around that. So that’s what we mean by skill and experience is yeah, you might need to pay someone a few extra dollars, but you’re better off paying someone a few extra dollars an hour and bringing that experience in than trying to train some up. So that’s our go – to here at Pravar is, and it works every time. Every client that we bring on who gets the million dollar mark and what helps them break through is number one, transitioning them off the tools and number two, getting an amazing operational admin or CA in place.
(22:38):
And that’s what unlocks the next phase of growth because A, they’ve got the time to be able to work on the business and B, organisation and the company goes through the roof because you’ve got a really good person who can actually organise the operations alongside you.
Speaker 2 (22:51):
Yeah. Now let’s put a litle caveat on this. When you say it works every time, we’re not saying everyone finds the perfect admin first go. The process of going through and making this your first hire and experiencing what it’s like, it will return itself, but it doesn’t mean that you’ll hire your first one, your first admin, and you’ll have them forever and they’ll be amazing. Guys sometimes go through this multiple times and that’s okay because of the experience, the lessons breaking through those barriers, all of that happens. So I think it’s important that we do stress that this isn’t a one and done thing. This will happen not just because some people don’t work out, but sometimes the business grows beyond that first admin anyway.
Speaker 1 (23:30):
It does. And it’s also that the more you do it, like when you’re hiring a trader, you can get them on site, you can go, oh yeah, you can know within a couple of hours if that guy’s going to work out or not. But when you’re hiring an admin, it’s not until you get them in, you go, hang on a second, this person probably isn’t what I expected. And maybe they over-embellished a litle bit what their capabilities were. So you’re right, sometimes it doesn’t work, but it’s not that the strategy’s wrong. It’s this that you got to go back to market. And again, we’ve seen it. We had a client the other day, they had over 200 applicants for a role and out of that, there were a handful of people that they were like, “If I had multiple roles, I’d take multiple people. ” So it’s not like 200 of them were shit applicants.
(24:13):
There were some really good people in there. So yeah, you might stuff it up a couple of times, but that’s okay. The strategy’s right. It’s just the execution sometimes to find the right person.
Speaker 2 (24:23):
Yeah. Really good. All right. Should we do a challenge for this week?
Speaker 1 (24:28):
Let’s do it.
Speaker 2 (24:29):
All right This week I want you to take note of everything you’re doing or just spend some time writing down every admin task you did in the last sort of week. All right estimate the hours you spent and then ask yourself honestly, for the investment of time I made in this, is this the best use of my time? Answer honestly and write down honestly what you did. If you spent all week running around just doing low value tasks, write them all down and then go, “Is this truly what’s going to take my business forward? Is this the best use of my time?” And that will become your admin, your first hires job description, their first set of roles and responsibilities will be, what can you take off my plate in terms of this list I just drawn up? So really important that you do that.
(25:12):
If you already have an admin and you’re still bogged down, still do the same exercise and then walk through with the admin that you do have, where are we at with this? I did this last week This is now going to be something I want to do this. Am I the best person to do it or is this something that you know how to do? Take it off my hands and go from there because that’ll give you your next step with an existing admin as well.
Speaker 1 (25:35):
Love it. Such a great challenge. It’s an opportunity to self-audit your own role and your own responsibility because getting to the next level isn’t about working longer and harder. It’s about what can I delete and delegate off my plate, isn’t it?
Speaker 2 (25:48):
It really is. It’s a huge question. It’s not about adding all the time, taking more on, grinding harder, all the stuff that the market would love to tell you to do. It’s about being smarter, it’s about finding some leverage and it’s about making the right moves at the right time.
Speaker 1 (26:03):
Yeah, really, really good. If you’re in that position where you know that you are feeling like you’re working longer and harder and business is becoming more of a grind and you would love to be able to build that leverage in your world, then jump across to strategysession.com.au today, fill out the application form and book in a time that does suit you on a discovery call. And let’s talk a bit about your structure and your role and who we can leverage and around you to be able to help take your business and life to the next level. Dan, it sounds like such a simple strategy, but it’s possibly one of the biggest leavers that any trades business can build when they hit that million dollar mark that catapults them to the next level, isn’t it?
Speaker 2 (26:43):
Yeah, let’s not understand. It’s a must have at that point. Before you can progress, you’re going to need it, you should have it, you must break through whatever it is, the mental barrier, the logistics we talked about, all of that. It’s just something you have to confront at some point and you have to work through.
Speaker 1 (26:58):
Hope you’ve enjoyed today’s episode and looking forward to coming back to you with another episode here on The Trade Den very shortly. Until then, take care.
Speaker 2 (27:05):
See you soon.