Episode 22 Podcast Transcript
Speaker 1 (00:00):
Once you’re clear on where you sit in this journey, think who’s my next logical hire and when am I going to put that person on? Hi everyone. Rob Kropp and welcome back to another episode of The Trade Den, great to have you back Dan. How’s things?
Speaker 2 (00:18):
It’s good, Rob. Great to be back. Hello? Yeah, really good at the moment. High energy time. It’s start of a quarter start of a financial year. We always go back and we look at the quarter that was so we’ve had a busy time celebrating wins with clients, which is awesome always. We’ve also been busy reviewing our plans for the quarter upcoming, looking at numbers, reviewing models and things like that. So really, really high energy operational time for us. But it’s been great.
Speaker 1 (00:46):
Yeah, I love this time of year. It’s a great opportunity to reflect on last financial year, celebrate the 12 months has been, just have a big celebration of an awesome 12 months and then the best thing about this time of year is it’s the accountant in me, but it’s like P&Ls go back to zero zero and it’s a fresh start. It’s almost like a bit of a line in the sand, isn’t it?
Speaker 2 (01:06):
It sure is. It’s good to get that the decks clean and all the excuses are out. What are we going to do now? That’s really the big question.
Speaker 1 (01:13):
Yeah, let’s rip into today. I love this topic. It’s one of my favourite topics, and to grow a successful business, it takes strategy and there’s a real recipe and a formula to be able to grow a successful and sustainable lifestyle trades business. And whenever I get a client or a prospective client come to us, they’re like Rob O’Connon know where I want to go in the life and business I want to live, but I just dunno how to get there. And what they’re ultimately chasing is a roadmap. And so in today’s episode we want to talk you through a very part of the overall roadmap, which of what it takes to be able to grow a successful lifestyle trades business. Now there’s a real formula to be able to grow a business and in today’s episode what we want to be able to do is talk you through who to hire and when so that you can build that sustainable business.
(02:12):
And I think that’s what makes us different and unique here at Pravar is that we don’t have one main programme where we’ve got trades businesses doing 50 grand months and 500 grand months in the same programme. It just doesn’t work and that’s because the guy doing 50 grand a month, they’re talking about getting off the tools and hiring tradesmen and just learning good foundations, but the guy doing 500 grand months, they’re talking leadership culture, looking at potentially putting a GM on board and all those types of things. So that’s why we’ve got different phases of coaching and at pr, a client enters into our journey at $80,000 months or a million dollars and they want to be able to go on that journey to be able to build out a profitable business where they’re free from the day-to-day grind or whilst living a fulfilling family life and will no doubt will come back to that 80 grand a month.
(03:06):
And why that’s important, there are four phases for a trades business to be able to go from doing everything to be able to leading everyone. And the good thing about that is that the challenges are predictable, which means so are the solutions and that’s the beauty about this whole journey and that’s why we’ve got four main programmes here at Pravar because every programme is designed to overcome the challenge and have the solutions in place to overcome that challenge and manoeuvre that client another step along their journey to be able to ultimately achieve what they want out of their business and their life. That’s what makes our journey so unique and that’s what a big part of today’s episode’s going to be all about is talking you through this recipe or this formula of the strategic hires of who and when in your journey of growth.
Speaker 2 (04:03):
Yeah, I like what you said there about a recipe. I think everyone sort of knows, like you said vaguely when they come to us it’s sort of like they know what they need to do. It’s like everyone who wants to follow a recipe sort of knows what they’re going to make. They know what roughly the ingredients they need. What they need is the timing and I think that’s the big part that when do I do these certain things that I know I need to do? That’s the magic in it. So really important I think when you introduce the idea of hiring and you introduce the right key hires at the right time, this is when you can start to do things. You do it at the right time, you get to take on more projects simultaneously. You get to increase your overall personal output for the business and the revenue potentially if you’re going into more of a selling or a BD role for instance, you get to do those things if you do it at the right time.
(04:51):
You also then get to leverage your time by taking on the right office crew and admin and accounts and then putting together an operational team that allows you to step back from day-to-day operations. I think we all know that, but unless we do it at the right time that that’s the problem and get it wrong, it can cost you more time than you think. Probably more energy, money, even reputational damage if you do this at the wrong time. And I mean that in the sense of you cut this thing short, you bring someone in and they’re not prepared, that’s when the mistakes happen. Again, you’re doing the wrong thing, the right thing, but at the wrong time. So really important. So the truth is that while building and managing a team, it does require an investment. It is a cost to you to do that.
(05:32):
Hiring, training, management, no matter what that is though the potential benefits when you hire at the right time and you’ve got the right things in place, then it far outweighs the costs, the revenue, the increased revenue, the business growth that it can provide far outweighs those costs of having to go through the potential or the perceived headaches of hiring and training and onboarding and all those good things things. So Rob, I want to come back to something you said in the intro as you were doing it and that’s that number 80 K month. It’s obviously important, it’s where we start, but I think it’s important as you are listening today that you understand why we say that. So maybe start off if you can answer, what does an 80 k month trades business look like? What is it about 80 k months,
Speaker 1 (06:17):
80 grand months is running a million dollar turnover business and for a trades business that’s a natural sticking point for so many tradies in the marketplace. It’s like a bit of a glass ceiling that a lot of trades guys can’t get beyond that point and you’ve proven that you can get out of the ground, you can put your first second tradesman on maybe one or two apprentices. You’ve probably got maybe two or three or four potentially in your ground crew, but it’s a natural sticking point and the reason why it becomes a sticking point is getting to $1 million is just purely off the back of grit, determination, hard work, busting your ass and it’s your ability to get to this point. We call this, we call this, you’re about to enter the hamster wheel zone and you’re feeling like you’re going round and around the circles and you just cannot get ahead.
(07:19):
The problem with this phase is what got you here, the mindset and the skillset that got you here is not what’s going to get you to the next level and what got you here is having that mindset is no one’s as good as me. It saves me time and energy and money if I do it myself. You understand the somewhat concept of leverage and delegation because you’ve already got a couple of people around you on your ground crew, but the shift going forward is it’s all about building team. It’s about starting to take that step of being a good tradesman and having that doer mindset to being a businessman who manages a trades business and this natural point, there’s a lot of mindset shifts that have got to happen. There’s a whole lot of skill sets that got to happen and you’ve got to completely shift the way that you do things to be able to transition your business to be able to go beyond a million dollars and we can talk a bit about why you want to be able to do that, but it’s a natural sticking point that guys get stuck and then they’ve got to completely change the way they do things to be able to move forward.
Speaker 2 (08:33):
Cool. What would you say to someone then that’s not quite at that level and why is it 80 grand from the perspective of leading up to that point? Why wouldn’t you go early? Surely if I’m starting out I could learn all this stuff straight away. It’d be way better for me to learn earlier.
Speaker 1 (08:48):
At 80 grand, you’re at the point where you’re ready to start taking a step back off the tools. That’s what 80 grand gives you and you’re at that point where it’s now about building good people and good systems in around you to be able to start the leverage journey and you’re at that point where you’ve proven yourself in the marketplace where you’ve to get to a million dollars a year, you’ve gone past the one man band phase, you’ve hired your first tradesman, you’ve proven to yourself, there’s some level of sustainability, you’ve obviously you’re a pretty good operator and your workmanship sound enough to be able to get there. You can’t do a million dollars in revenue if you don’t have that level of workmanship in around you, but when you hit that million dollar mark, that’s the turning point where it’s now about winding back off the tools and starting to build in team to be able to start taking your business to the next level. If you try and do it too early, you just don’t have the revenue and the margin from work to be able to afford you to be able to wind back off the tools. That’s why a million dollars is almost that sweet spot to start turning that corner.
Speaker 2 (10:02):
I think also it’s also from just thinking as you’re talking about this, the time and investment in your coaching too. If you’re thinking, well, hey, I want to get in sooner, let me have at it. We know from experience it does take an investment of your time to be able to prioritise and work on these things and you need to have that capability both financially, operationally, time, it’s the right time to do that because that’s where you’re starting to free up some of this and you’re looking where to put that additional effort that you can use.
Speaker 1 (10:30):
Definitely, and I think it also comes down to what you’ve got to focus on before a million dollars. It’s proving that you’ve got what it takes to deliver a good product or service. It’s getting out of the ground. It’s getting the basics of accounting right? It’s getting your mild and accounting set up. It’s real grassroots type of business establishment. It’s almost like getting out of the ground startup phase I suppose that requires a certain style of coaching and that’s just not our jam. That’s not what we’re good at. What we’re very good at is people, systems structure, financial management, management leadership and really growing from a million dollars. There’s plenty of other coaching businesses out there who specialise in the trade space that are very good at businesses sub a hundred K months, but our real sweet spot is a coaching business is 80 grand plus and that’s just because it’s all then about team and who to hire and when to be able to take you on that growth journey.
Speaker 2 (11:31):
Yeah. Well, let’s look at that. Let’s start on this idea of who to hire, why, and I’m going to talk through and so I’m going to introduce it as phases and then jump in, but let’s go phase one. So phase one is all about getting a well-balanced ground crew in and we are saying this is doing this 80 K to a hundred K month. This is sort of the phase when we talk phase one. That’s sort of the revenue guideline we’d have and it’s all about well-balanced ground crew.
Speaker 1 (11:55):
Yeah, this is about getting your balance right on site and if you’re in the B2C space, it’s about getting the right tradesmen on board is in the B2C space. It’s obviously you’re quite tradesmen heavy. We do a lot of work with mostly businesses who are very heavy with their service offering in the B2B space and that’s about getting the right balance between tradesmen and apprentices and the reason why that balance is important, you don’t want to be too tradesmen heavy. You don’t want to be too apprentice heavy. You’ve got to get the balance. If you’re two tradesmen heavy, your cost of labour is quite high and you’ve got expensive ground crew doing low value tasks. That’s why you need apprentices. If you’re too apprentice heavy, then you are constantly required on site because you are the most experienced guy and yes, you’ve got arms and legs in around you, but you’ve got no one to be able to leverage off because you are the most experienced guy and you’ve got to get your balance. So sitting in there between 80 and a hundred grand months, it’s doing a lot of work around getting the design right and making sure you’ve got the right balance with the right experience, the right tickets, just the right people in your ground crew to start giving you the confidence to start phasing yourself off site so that you know you’ve got the right people around you who can deliver the right work at the right standard so that you have the confidence to be able to start stepping back.
Speaker 2 (13:30):
Great. Does that mean that we are also looking at this point in phase one around this mark around leading hands and someone to manage those jobs too or is it purely just the ground crew guys on the ground?
Speaker 1 (13:41):
Definitely around a leading hand, a leading hand’s, a really important person, a senior tech or a leading hand, whatever you want to be able to call them. They start becoming a bit of a wedge between yourself and your ground crew, especially when you’re running more project style work where you might be doing work in the B2B space where you might be doing work on stratas built for building managers, builders, project work developers, all those types of things. Especially where you’ve got a crew of guys on a job site for example. You need someone to show a better leadership on that job site, and the biggest thing is if you start phasing yourself off the tools in this time and you don’t have someone with some level of seniority or leadership on site, productivity takes a dive. And so this is why it’s super important to not only have a good balance between tradesmen and apprentices, but you need a really good leading hand to lead up some of these job sites that you might be on to be able to drive the schedule, liaise with customers, manage the guys and girls on site around productivity. They’re almost an extension of you of the arms and legs to be able to keep the job moving along at the right standard at safely as well as with productivity in mind. So you’re right, a leading hand in there in that mix as well is super important to get that balance right.
Speaker 2 (15:16):
Yeah, I don’t want to lose sight either. I think the mechanics of who to hire and when’s important, I think that the target for the business owner for you that’s listening now is you’re looking for confidence and trust in the team. I think that’s an important thing to sort of say that when we go down this strategy and we start pulling these levers, a big one is we’re looking for building not just the team, but building confidence and trust within the business owner themselves.
Speaker 1 (15:41):
Correct. Because when you’re in this phase, the name of the game is to wind yourself back off the tools, not just pull yourself back off the tools and off you go. When you do send yourself broke, because you’ve got to remember in this phase, as you are winding yourself back on the tools, you are then paying yourself, you become an overhead because you’re paying yourself out of the margin of what your team are generating from billable time. If you pull yourself out too quickly, you’ve got to pull yourself out and hire at the same time. It can have a massive impact on your cashflow. Whenever I’m working with a prospective client, when we are mapping all this out, what I’m looking for is dynamics. I’m asking who’s who in the zoo when it comes to your ground crew. I want to know names and where they’re at and what they’re doing, and then I’m digging into the apprentices to be able to go, well, what year are they?
(16:37):
If you’ve got a fourth year, when are they about go full-time as a tradesman on all those types of things because what I’m trying to do is pull apart the dynamics of the business to be able to find out, well, where are you bottlenecking the business? Where have you got the skills and experience that we need to replace? But who’s that next logical hire of your next one to two hires? Sometimes it’s two apprentices, sometimes it’s an apprentice, then a tradesman, then a leading hand. So every business is different, but you’ve got to be able to take a step back to find the dynamics, what’s working, what’s not, design it correctly, and then lay the path out over the next six to 12 months of who to hire, when to be able to get the dynamics of that ground crew correct. Going forward. Luke Temple is a great example of this.
(17:29):
Luke came into our launch programme and been through leverage now sitting in lifestyle runs a roofing business based out of New South Wales. Great example of this. First got on board and really dialled in the dynamics of his ground crew. The best thing that Luke ever did was put on really good leading hands amongst his crews. He started with two crews, built it out to three roofing crews, and the moment he went from one crew to two, he realised that he couldn’t be at multiple locations all at the same time, and this is where it lended itself nicely to having a really good leading hand and he did an exceptional job of getting really, really good leading hands on there to drive productivities on those sites, and that was the key for him to be able to get out of those teams and to be able to get himself into the office. That was a massive game changer for him. It really gave him the confidence to be able to get off site and still know that he’s driving productivity without having to physically be there in person.
Speaker 2 (18:37):
And I think that’s the biggest challenge, right? For Luke, and you think back to Luke, Luke and his journey, it’s not the hiring. It sort of makes sense. I know I’ve got to put an ad up. There’s the mechanics of hiring, but it’s the challenge to can I come away with this with confidence and trust and more of it rather than less? That’s the real kicker for a business owner.
Speaker 1 (18:54):
Well, it goes back to that episode we ran a little while ago around how to stop people hijacking your time and the story of Frank. Yeah, you might get off Offite, but you’re copping a hundred calls a day and that’s because you just don’t have the dynamics and the right skills and experience and they’re not equipped to be able to make the right decisions. So when you don’t have the right dynamics, yes, you might be able to phase yourself off the tools, but you find yourself not physically on site, but you’re mentally attached to that site and you don’t get the benefit of being off the tools because you’re having to be an extension of arms and legs even though you’re not there because you’ve got to do all the thinking for them.
Speaker 2 (19:35):
Yeah, you’re not getting that leverage or that productivity kick that you set out to get. Which brings us to phase two in terms of we’re talking productivity kicks and things like that, but phase two, we’re now going to jump up a step and go to 120 5K months, call it. That’s around that mark for phase two and we’re going to talk about office crew. So office crew as opposed to ground crew. Ground crew are the guys that are working out in the field doing your jobs. The office crew is supporting that, doing everything and anything from scheduling to admin to all that sort of stuff. But you talk a bit through this phase two of office crew at 125K months.
Speaker 1 (20:09):
Yeah. The reason why it’s about 125K months around this phase because what you’ve done is you’ve built your ground crew enough for you to be able to wind yourself back off the tools and now you’re in that zone where yes, you’re not doing on site, but now you’re doing in the office, and so you’re still a doer, and what happens is instead of you doing 110, 120, $130 an hour billable tasks, you’re finding yourself doing 30 to $40 low value tasks. So you’ve traded billable time for non-productive LVTs or low value tasks. And so during this phase, there’s a real phase at $1.2 to $1.5 million trades business where you’re starting to move out of the front office of your home. You’re starting to look at a very cheap premises just for somewhere to work from, and you’re looking at getting some administrative support in around you, and it comes at a cost.
(21:24):
It definitely comes at a cost, but when you’re going through this phase, what you’re doing is creating separation from home to work. That’s a big tick because that’s when you start to create that separation between business and family life and start to peel that away, but you’re starting to go on that journey of getting some, even if it’s just part-time to begin with, you’re getting some part-time support in around you to do those $30 to $35 an hour tasks and they can help you with those low value tasks rather than you doing them at after hours at night or on weekends or whatever it is. You’re starting to leverage through admin and accounts people to be able to give you that support on those.
Speaker 2 (22:09):
Yeah, and is there a reason admin and office crew, when we talk about it, there’s obviously two parts to this. There’s the admin sort of side I think, and there’s the bookkeeping side, but you’ve also got people like PMs and estimators. Why do we not go in and say, well, let’s get them in. That would free me up massively if I’m spending all my time estimating or doing something like that.
Speaker 1 (22:30):
There’s definitely an argument. It’s like, well, let’s just grab one of my best guys off site and you can help me manage these jobs for me and sure, go down that line, but it’s not what we recommend. Remember, we’ve been talking around a formula and a recipe and a roadmap for growth. That’s what we’re talking about here when we’re restructuring a business. It’s important that you take consideration to cost flexibility and risk. And so when we are looking at restructuring, when you think of an admin and account support, it’s lower cost, lower risk, and there’s greater levels of flexibility, lower cost. You might be able to get someone really experienced in the trades who’s got experience in the trade sector for $30 to $35 an hour. It’s low risk. If they don’t work out, then you can move them on and find someone else, and their impact in the delivery of the jobs is less and then it’s flexibility.
(23:30):
You might be able to find somebody who wants to do 20 hours a week and they want to work part-time for you, which can grow into a full-time role. And so when you’re in this zone, that’s less of a risk and less cost than going straight to a PM who might cost you 150 grand, which is inclusive of salary super and a vehicle and everything. That’s just going to destroy your bottom line at this phase of your journey, rather than bringing an admin person on who’s a lower cost, who can help take all those low value tasks off your plate, which helps you manage your jobs better and frees you up to do that actual role.
Speaker 2 (24:13):
Yeah, yep. I think the other thing, as we talked about with Luke and his example, I’m sure there’s some come to mind as we talk around this, but the idea of for the owner at this point, this is almost the reverse. It’s having the confidence and trust to go out and hire someone that knows something better than you won’t necessarily, and this is why I think guys get stuck at this one because they don’t know. They know the estimation. So I’ll hire someone because I know who’d be good at that. If I’m going to hire in an admin, then I don’t know anything about who’s a good admin, why is it a good admin, why would I do it? Do you know what I mean? It’s sort of that uncertainty kicks in at this point, which I think guys would do well to be aware of, but you’ve got to use that model that we just talked about, low cost, low risk flexibility, go out and do it and find that person that’s going to lift your business to another level and free you up even more to do the next phase.
Speaker 1 (25:02):
A great example of this is Sean Bates from Elk Electrical. When he came through into launch, a big play for him was really getting this admin and accounts function dialled in for his business. We went, you’re right. He had that fear going, I know I need the help. Where am I going to find them? What are they going to do? Am I going to have enough work for them? How am I going to afford to pay for them? They’re the common objections that we get. And the big part was it was really designing the role and we actually went to market, we coach our clients through going to market to finding someone with industry experience because what they can do is bring that experience. They understand job management systems, they can understand time sheets, they understand the blue collar industry, they understand job cards and photos, and they bring that experience with ’em so you don’t have to pay someone to have their training wheels on.
(25:58):
Batesy went out there and we found an amazing operational admin person who had all this experience, brought them in, and they did a blended role of some accounts and admin, and they took over looking after the apprentice stuff, doing the scheduling, doing all the job card stuff, helping manage simPRO that he had at the time. They just took so much workload off Bates’s plate that it was just an absolute game changer for him that helped him reclaim his nights and his weekends instead of him doing the admin stuff after hours. Now that stuff got done by a dedicated resource in the business, and he wasn’t having to do that after hours with the laptop open after he put his kids to bed.
Speaker 2 (26:48):
Yeah, this is the one, we hear this all the time when we do this. It’s like, why didn’t I do this one sooner? This is crazy. It is one of those ones that in hindsight, everyone wishes they did sooner. So yeah, really important one about the right time, right decision.
Speaker 1 (27:01):
The reason why it’s important at this time, right time right decision is that we’ve got to be prepared that there’s a phase in here that you’re going to spend money on admin support and getting out of the office for this person to operate from. There’s overhead that you are bringing into the business, and this got to be prepared that it’s going to be a little bit harder before it gets easier because you’re bringing in, say, a hundred grand of overhead into your business if you are working on 30% margin, you don’t just have to make a hundred grand in revenue to pay for that a hundred grand in overhead. You’ve got to do 300 odd grand in revenue, you’ve got to pay 60 to, you’ve got to pay 70% in margin to cover materials and labour and all those types of things that the margin left over is what covers that overhead.
(27:57):
So you’ve got to be prepared to push through this pain, but once you get up over that pain pointing into a sweet spot, you are off the tools. You’ve got admin and account support, you’ve reclaimed your nights, reclaimed your weekends, you’ve got stability in your business, you’ve got support in around you. They’re helping you with scheduling, pricing, invoicing, draughts and all those types of things. That’s a natural sweet spot in a business. That’s the outcome of our launch programme. But as you move into that sweet spot, that’s when you lock in those foundations, but it’s important that you take those right steps at the right time to do it in that right order. Otherwise, you could burn cash very, very quickly if you do things in the wrong order at the wrong time.
Speaker 2 (28:45):
Yeah, definitely. Definitely. We see that all the time where guys go out of step, let’s do phase three. I want to come back to it. We almost talked about it just before, but estimators and project managers at phase three. I don’t want to spend too long on this because it’s sort of getting towards the upper ends of the phases, but that starts around, let’s say it’s 175K months done this by two 205K months for sure. There’s a time where people can hold onto long, but talk us through the operational phase of the right people at the right time in terms of operations.
Speaker 1 (29:16):
This is a big one that you can’t afford to get wrong and you can’t rush it. This is almost bleeding into what this is entering a phase that we call the nightmare zone. And this is a really tough phase because you’ve got to go on that journey of really almost handing over the keys of the castle to someone in your team that you trust very highly. From an operational point of view, depending on which way you go first, depends on you as the owner, your strengths as an owner. Some guys are really good operationally and they’d rather leverage out their estimation, whether it’s getting a contract estimator on board and then looking to bring that in-house full time. Or someone may not love doing estimation or someone might love doing sales and estimation and they bring in a project manager or a supervisor off the tools. So there’s no right or wrong way of doing it. It depends on what your strengths and weaknesses are as a business owner.
Speaker 2 (30:24):
So I think that clears up that separation between phase two and phase three. But let’s go back, you said, you mentioned the word nightmare zone. Can you just explain that a little bit more in terms of clarifying why this is such a critical hire as you enter or as you get into the nightmare zone?
Speaker 1 (30:39):
The nightmare zone is where we kick in with our leverage programme, and that’s where it’s really understanding management at this point. You’ve got to be, you’re real transitioning from a doer into a really good manager, and that’s now getting clarity around roles, responsibilities, delegation, accountability, all those soft skills of what it takes to be a really good manager. Because ultimately what you’re doing is, like I said before, is you are handing over that function to someone, and this is where it’s really important that you develop those skills to be able to not only have the confidence to hand it over, but you’re ultimately setting that person up for success to make sure that they can actually fulfil that function and take on the responsibility of decision within that role that they’re actually taking on.
Speaker 2 (31:37):
And what do you think this gets you to at that point, you’re obviously stepping back, you’re doing more management well off. What do you think this, the structure at this point sort of getting you to towards, obviously it grows and it becomes a scalable sort of thing. You’re putting more volume through the team grows and expands, but this initial structure of outlining the three phases, what does that sort of get for you in your mind?
Speaker 1 (32:01):
There’s that phase between about two, two and a half million dollars where you’re really heavily bringing in a project manager, for example, to be able to take over the operations. I’m a big believer that this is what every trades business should be aiming to get towards at a minimum is to be getting towards two to two and a half million dollars at a minimum. And the reason why is because anything underneath that, if you ever want to be able to go away on holidays or have some time off, you can’t because sales estimation and operations is hinging on you being there day to day. Sure, you’ve got some admin support and bookkeeping support around you. You are so involved in the day-to-day operations, you’ve got hardly any leverage from an operation point of view. We find that this phase takes a good 12 to 18 months to set someone up for success in that role. And if you do it too quick, it often falls over. And how many times have we seen that where someone’s rushed it and they haven’t set them up well, and it’s been a bit of a disaster.
Speaker 2 (33:09):
Yeah, absolutely. It’s got to be marathon, not a sprint. You’re not just ticking a box going, yeah, I can fill that on my org chart is yeah, I’ve got someone in that box and it’s not me. That’s not what we’re talking about. It’s seeing it all the way through with the training, getting the systems in place, getting them confident and trusting. They’re now in the position you were in when you were coming off as a supervisor. So they’ve got to build that confidence and trust as well. Rob, I think to finish up, I don’t want to leave people on a low and saying, we’re going to hang you in the nightmare zone. What comes beyond that and what’s that? These key hires enable you to get to what we call a lifestyle trades business. So I think just maybe just define that clearly and then we can sort of wrap up. I don’t want to overstep those first three phases, but maybe that’s a nice natural point for us to finish up.
Speaker 1 (33:52):
A lifestyle trades business is a business that’s doing around three to $5 million in revenue doing 10% to 15% up to 20% in net profit. They’ve gone from doing everything to leading everyone. So they’ve got the admin, bookkeeper, project manager, estimator on board. They’ve found themselves in a selling GM role more often than not, and they’ve got a really great ground crew, which are productive, which has been managed by someone in operations. So the owners found themselves out of the day-to-day operations and generally do it in 40 hours a week or less. And they’ve got the ability to be able to do it, take anywhere from four to six weeks leave a year, and that can be outside of just the Christmas shutdown period as well. So three to 5 million, 10 to 20% net full operational structure and around them less than 40 hours a week and take four to six weeks leave a year.
Speaker 2 (34:53):
Beautiful. And that’s all off the back of what we’ve structured up in this episode. This structure that we’ve outlined is really the backbone and the starting point to give you the foundation for that. Correct.
Speaker 1 (35:04):
And the reality is that takes three to five years to be able to get there. I don’t want to bullshit you listening here today. It’s not an overnight thing. And we often find that for a business to go from a million dollars to up to the $1.75 to $2 million, which is generally the outcome for launch, it takes 12 to 18 months to be able to get there. It’s a 12 to 18 month journey to be able to get there, to be able to get the structure set is leverage. It’s six months then to be able to build out your lifestyle business, that’s two to three years to be able to build out that phase. So you’re in for this. Once you make the commitment, you cannot turn back. You’ve got to go all the way. Once you turn the corner at a million, you’ve got to keep going, and it genuinely takes three to five years. But when you get to the back end of that man, you run a great business, you’ve got great structure, you’ve got great stability. We call it the family in the freedom zone. You’ve got great people and around you. Yeah, it takes time. But anything building something great takes time. But gee, the benefits are great on the other side, aren’t they?
Speaker 2 (36:11):
Absolutely. Absolutely. And if you’re listening and you’re a regular listener, you’ll know that the stories we tell we get to tell, or the clients we bring on to tell those stories are living embodiments of this journey. It is the outcome of the recipe and the phases that we talked about today.
Speaker 1 (36:28):
Especially when you hear the stories we’ve already brought on. When you think of the Nathan Wilson, the Ahmad Radi, the Phil from the Great Outdoors, the Anthony, those guys that you’ve already heard so far, you might be thinking, gee, those stories all stand the same. It’s like, yeah, they are all the very similar stories because they’ve all followed the same roadmap that all our clients follow. So it’s one of those things where just don’t mess with the system. You just got to trust the process, follow the system, and the rewards are there for those people who put in the time, the energy, the effort to be able to build it out.
Speaker 2 (37:06):
For sure. Let’s go back and do some key takeaways. Let’s sort of get them on their way. First one today I think for me is really understand how a lifestyle business is structured. Go back and re-listen to this, listen to those three phases, really map it out, write it down, and identify who your next hire is and when or where you are at in the phase journey that we outlined today.
Speaker 1 (37:32):
Yeah, for me, it’s following a proven systematic approach to structure your business correctly. Don’t try and re-engineer it. Just follow a proven system and just put in the work to make it happen.
Speaker 2 (37:44):
Cool. Action steps for you today. What have you got?
Speaker 1 (37:48):
I think it’s about understanding. Obviously we’ve used broad brush revenue brackets and they’re going to be a little bit different for certain styles of business, but it’s about understanding your current state and overlaying that from the path that we’ve mapped out today. And then thinking in your own world, once you’re clear on where you sit in this journey, think who’s my next logical hire and when am I going to put that person on? So it’s who and when, but knowing where you start in your journey.
Speaker 2 (38:18):
For sure, and I’d add to that as well as an action step. If you’re listening to this and it’s like, I’m still not quite sure, it sounds a bit daunting, it’s a bit scary, probably is. But you can also take the action step of booking a call with Rob, jump on and get some clarity, talk through with Rob your future state, where you’re at right now. He’ll be able to give you that guidance. So I can’t stress enough that on the back of any episode, if you’re on the edge of giving us a call and jumping in for a chat, talking through structure today is probably the best starting point you can get.
Speaker 1 (38:48):
This is the backbone of our strategy session, but it’s not just mapping out who and when is all the other things that have to go around it, around where you sit in the market, what business development you’re going to do, your pricing, how are you going to pay for this, how do we manage our profit along the way? So yes, we’ve spoken a lot today around the structure involved and who to hire when. That’s a big part of our strategy call, but it’s all the other strategies around it, which enables us to fund this structure, to be able to go from where you are to where you want to go as a lifestyle business. So absolutely, get the call booked in and we will spend time personalising this to you. We’ll map it out. We’ll give you your very own personalised roadmap of moving forward to build out your definitions of a true lifestyle business. So head across to strategysession.com.au, get it booked in and let’s map it out for you so you can keep moving forward.
Speaker 2 (39:41):
Terrific. I think we can leave it there. Great stuff. Always love talking through these phases. Get excited every time we do. It’s so important.
Speaker 1 (39:49):
Yeah absolutely. Thanks for listening and looking forward to coming back to you next week. Thanks heaps.
Speaker 2 (39:53):
Catch you on the next one.