Episode 51 Podcast Transcript
Speaker 1 (00:00):
And you just have to accept that your mindsets keeping you trapped. And the only way to be able to turn a corner and achieve the very thing you got in business for in the first place is through leverage. And leverage comes in the form of money, comes in the form of people and it comes in the forms of good systems. Hi everyone Rob Kropp and Dan Stones here from Pravar Group welcome back to another episode of The Trade Den.
Speaker 2 (00:26):
Hey everyone.
Speaker 1 (00:27):
We know the main reason you started your business was to generate more money and time so you could spend it with your family and do the things that you love. We also know that in most cases this is not happening. In fact, the opposite is probably true. You’re most likely trapped working 60, 70, 80 plus hours a week not generating anywhere near enough profit and are confused about how to break this cycle. If you’re honest with yourself, you probably also think the answer to breaking this cycle and getting your business and life to the next level is by working longer and harder. At Pravar, we call this the time myth. The reality is working longer and harder does not make you more money, and more importantly does not help you achieve more freedom. In this episode, we’re going to explore where this mindset comes from and how to achieve more by doing less.
Speaker 2 (01:13):
So Rob, the topic today is working longer and harder is not the answer, but let’s start off with why this mindset that working longer and harder is the answer and where it comes from.
Speaker 1 (01:23):
Yeah, I think the first one for me is the myth of the hustle culture. And for me, I think there’s this whole mindset within society that you just work long and hard and it’s almost like somewhat a bit of a badge of honour. And I think it’s a dangerous mindset and it’s a dangerous position, especially for business owners. And sure, when you’re trying to get a business out of the ground, you absolutely have to work hard and you have to work long and you’ve got to get it up out of the ground, but it’s not sustainable to have that whole hustle mindset for a long period of time that’s for sure.
Speaker 2 (02:06):
Yeah, I think there’s this idea that at some point you’ll have worked long enough and hard enough and paid your dues to the point that you are somehow earning success or you’ll deserve it, of the success that will come your way, put in your time. And to an extent that might be true, but like you said, you end up burned out, you end up tired, and people then sort of use that as the currency of how worthy the are of success.
Speaker 1 (02:30):
Where do you think this comes from, especially for tradespeople? Where do you think this mindset’s traditionally come from?
Speaker 2 (02:36):
I think a lot of it just comes in the masculinity, the macho element of the trades industry. It is harden up, it’s toughen up if you can’t hack the can’t hack whatever we’re going through at the time, the pressure, the workload, the demands, the gentle ribbing, let’s call it that, whatever it is that’s being thrown at you, if you can’t hack that, then you’re not worthy of the success or you don’t belong somehow. So I think there’s that sort of herd or pack mentality of the past is probably a big starting point.
Speaker 1 (03:05):
From my side. For a lot of tradespeople before they got into business, they were obviously trading time for money and that’s where how they did make money, it was an hour worked, a dollar made. And so as most business people turn that corner from being a tra into being self-employed, that’s all they know. It’s all they’ve come from. It’s that whole mentality that they got into business and they just somewhat continue to carry it through.
Speaker 2 (03:34):
And I think the idea, the more hours you work, the more you get paid is true up to that point. But we’re not talking about being an apprentice or a couple of years in or a member of a crew. We’re talking about business owners. So again, that idea of somehow there’s enough hours for me to do all of that and just keep generating income is the fallacy that we’re talking about there.
Speaker 1 (03:55):
And I think it’s going back to where I started with around this whole culture, this hustle culture probably I don’t want to downplay the importance of hard work and because if you want to achieve anything great in life, you’ve got to work hard, but there’s a big difference between working smart and working hard.
Speaker 2 (04:16):
Yeah, I think it’s that celebration on social media mainly that the celebration of exhaustion I think is the thing we’re trying to give up. It’s not the hard work, it’s not the meaningful work, it’s not the effort that’s required, it’s just celebrating the fact that somehow you win because you’ve worked harder than someone else. No one really cares. And there’s plenty of examples of people that make a great living. Most billionaires these days have figured out that working longer and hard is the absolute opposite way to being successful.
Speaker 1 (04:46):
So that’s key number one. What’s key number two, do you think?
Speaker 2 (04:49):
I think this idea of the fallacy of more and the idea in particular that more equals better. I think that’s a big one that people fall into. If I’m doing something and it’s going okay, then surely more of it has to be better. And that’s everywhere in society. But especially when we talk about our work.
Speaker 1 (05:08):
It’s almost like they equate results out for input in and I think it’s a good mindset to get into business, but it’s a dangerous mindset to continue in your journey in business, especially when you’re on that growth journey.
Speaker 2 (05:23):
It is. And so many times there, it’s that fine line in the midpoint is where you need to be. We talk about sweet spots all the time, and the sweet spot of this is there’s enough of what you do that it eventually will tip into being a negative if you do it. The key one when we talk about is a business growth in coaching. If you try and grow too fast, too quick, too big, it’s going to hurt you in the end. And I think that’s true in terms of even the hours that you’re working yourself in your own role.
Speaker 1 (05:49):
For sure. Alright, key number three.
Speaker 2 (05:53):
This one I think is going to come back as we go through the episode, but we’ve called it suffering a severe case of bottleneck. And I think this is sort of our group term. If you’re suffering from bottleneck, there’s probably two, three or four mindsets that you’re suffering from. The first one being of course, no one’s as good as me. That will create bottleneck in a heartbeat.
Speaker 1 (06:11):
And this is yes very much. And as you’re listening here today, I want you to think about how many times you’ve said it or you thought it in your own mind around no one in my business is just good as me, either on the ground doing the pricing, the work, the running the jobs or whatever it is. And it is probably true you got into business because you probably thought you could do it better than your boss or you saw a gap in the marketplace that you wanted to fill. And it comes from a little place of ego, which I think to get into business, you’ve got to have that little bit of ego, a chip in the shoulder to be able to go, you know what, no one is as good as me and I’m just going to have a red hot crack. But that mindset again, serves you getting into business, but it no longer serves you when you’re trying to grow a business.
Speaker 2 (07:00):
And that creates this idea of bottleneck as we said. I think the second thing once, if you can get past the no one as good as me and you haven’t ticked that box yet, probably the next one is that it’s easier just to do things by myself if it’s easier if I just do it, get out of the way.
Speaker 1 (07:15):
Yeah, this is a huge bottleneck because it does, because it’s like, oh, I couldn’t be bothered showing someone, or I’ve showed them before and they’ve made a mistake. And no wonder, and no wonder so many business owners don’t have time is because they’re holding onto so many things. They struggle with those skills around delegation and relinquishing control because they absolutely have this mindset that no one is as good as me and just it’s easier if I just do it myself. And sure, an hour here and an hour there and an hour here and an hour there sounds insignificant. But when you add up hours a week over a week, a month, a quarter, a 12 month period, it’s days over a year for all those little things that add up. So when you do have that mindset that no one’s as good as me as it does save me time, if I just do it myself, no wonder you’ve got no time because you’re just getting stuck down in all those LVTs which are not contributing to the growth of your business because you are the bottleneck and preventing it from actually growing.
Speaker 2 (08:19):
And like you just said, that people’s extension of both of those is it’s going to save me time like you just said, but it’s also energy and money. There’s some sort of loop they play in their mind that somehow it’s beneficial for them to do it themselves because they’re not spending money or the energy that’s required to do it. It’s just easier. So I think these all come back, this whole case of bottleneck, which we’ll touch on in a minute, but it all comes back to some point I could just force myself to do enough. So there’s the fallacy of the hustle culture is real. If I hustle hard enough, I’ll get past all these little hurdles I’m on, and then there’s that idea if I just work more at it, it will get better in time. And in fact it doesn’t. All you’re doing is grooving this rod for your own back, this bottleneck that you’re creating.
Speaker 1 (09:03):
And that’s why at Pravar we speak so much around mindset and strategy and skillset, but more importantly, more than anything, mindset always precedes skillset and strategy because if you’ve got the mindset that no one’s as good as me, it’s easier to do it myself and it saves me time and energy and money, if I do do it myself, then you are naturally going to try and work longer, work harder and just muscle your way through growth because that’s your mindset. You’re not going to want to be able to look outside the box to be able to hire more people or implement your systems or be more efficient with your time because your mindset isn’t open to that way of thinking. So this is why it’s so important that in this episode we crack this mindset of what most business owners have, and until you shift that mindset, nothing is going to change in your world and you’re going to be stuck working the hours that you’re working and experiencing that trapped feeling that you’ve got until you shift that mindset.
Speaker 2 (10:08):
Yeah, I think as we sort of go into what is it that you need to do instead? What’s the alternative way of doing this, then you’ll see how if you don’t change the mindset, you’ll never even reach this point. And of course what we’re going to talk about today for the rest of the episode is unlocking the power of leverage, and we see that as being the solution to releasing these constraints and unlocking growth in your business.
Speaker 1 (10:32):
Leverage is key and leverage is one of those things where you have to accept it as a business owner that one man can only do so much, and when you are wearing all the hats, doing everything, no wonder you work in crazy hours and no wonder that running your business is at the expense of your health, your wellbeing, or worse your family life, which is probably the very reason why you got into business for the first place. And so you have to accept that there’s got to be a point in time where you’ve got to shift your mindset and you’ve got to embrace this thing called leverage. It’s the only way to be able to achieve what you want in business and life.
Speaker 2 (11:11):
So Rob in your words, when you say leverage, obviously there’s a whole lot of concepts and frameworks and coaching strategies that we talk about with leverage, but just simply what do you mean by leverage?
Speaker 1 (11:22):
I think it is simple form is leverage is doing more with less. And if you think about you’re leveraging something, you’re achieving, it’s the multiplication effect. And so if you think about it where you’ve only got 50 hours to give, then you’re going to only achieve so much in that 50 hours. But if you’ve got the ability to leverage your time or your resources or leverage different things, you’ve got the ability to leverage those things where you can go from one person doing something in 40 to 50 hours a week to multiple people all having 40 to 50 hours a week each. And so it’s that leverage where together we achieve more by leveraging things rather than one person putting the input to generate the output. It’s hard to explain, but that’s probably the most simplest way of thinking, well, what is leverage?
Speaker 2 (12:25):
Yeah. I think a good example is just in everyday life people that you are leveraging your time. If you employ a gardener to come and mow your launch or you’re leveraging your time, if you’ve got a cleaner that comes around and cleans or someone that does the ironing, I know you’ve probably got all of those, Rob, but in terms of having those things, that’s leveraging time. That’s what we mean by this concept of leverage.
Speaker 1 (12:44):
Correct. And we’ve spoken heaps in the past and on the podcast is you’ve literally only got 24 hours on a day, seven days a week, 365 days in a year, you’ve only got so much time. And so leverage is it’s leveraging off that buy back principle. You’re spending money to or resources to buy back time, and that’s leverage. What you’re doing is you’re getting time back and by leveraging, you’re not getting more time. You are leveraging things to be able to ensure that you are spending your time in the most important areas, which contributes to the growth of your business, the bottom line results in your business, and to achieve having and living a fulfilling family life. That’s what leverage is all about, to leverage the time and resources you’ve got.
Speaker 2 (13:38):
Yeah, and that’s why it’s so important. All right, let’s look at what are the different elements an owner can focus on? Let’s bring it back to business. I think we’ve covered that off. So let’s bring it back to business now and, what are the different elements an owner can focus on to get leverage in their world?
Speaker 1 (13:54):
There’s three forms of leverage. The first one is money, the second one is people, and the third one is systems.
Speaker 2 (14:06):
And the two main reforms, let’s focus on the two. I think money’s a whole different topic. We’re talking about money. Leveraging money is either exchanging it for services or something like that, or debt or something like that that you’re using to leverage money, but let’s focus on people and systems. Those would be the two that we can focus on today I think, and add some value to people’s lives before we do. We talked about mindset shifts at the start. What’s the biggest mindset shift a business owner has to make to take off some of those hats and gain leverage?
Speaker 1 (14:37):
It’s accepting that what got you here won’t get you to where you want to go. And when you’re running a business, getting a business out of the ground, it’s all about grit, determination, hard work, grinding it out. It is that hustle culture and that mindset often gets you to half a million, three quarters of a million, million dollars in business, but we see it so much with business owners, they get stuck and trapped at that million dollar mark and they wonder, why is it that I cannot get to the next level?
Speaker 2 (15:15):
Yeah. So you’re talking about the tipping point, right?
Speaker 1 (15:17):
Yes. There’s this whole tipping point for a trades business, and it’s generally around that million dollar mark that you have to accept that that way of operating as a businessman is what got you here, but it’s not what’s going to get you to the next level, and it’s no longer about how many hours you work and how hard you work. It’s a complete shift to how well you’ve got the ability to recruit and build a high performing team and lead and manage that team and scale team, not time, which is what gets your business to the next level. It’s a real tipping point. And so many business owners in the trade space, they get to that edge. Where they’re faced with this fork in the road moment is, do I keep trying to grow my business by muscling my way through growth or do I have to completely shift the way that I think and start thinking and acting like a manager and a leader who loves to leverage and they see that as their way to growth rather than trying to just purely muscle their way through growth.
Speaker 2 (16:32):
So a natural checkpoint at this point is the idea, if you’re sitting here listening and thinking that you’ve got to double your business, you’ve got to double your hours, then you can absolutely guarantee you haven’t either had the mindset shift or you just don’t understand that power of leverage that we’re talking about just yet.
Speaker 1 (16:48):
Yeah, correct. And that’s why you can see it when you see a business owner who is doing a million dollars or less and they’re working 60, 70, 80 hours a week, yet you’ve got business owners doing 3 million, 5 million, 8 million, 10 million, 20 million in revenue, and they do it in 45, 40, 35 hours a week. And so the guys who run big businesses, it’s not that they necessarily work longer and harder, they’ve just embraced the power of leverage. They leverage other people’s money, they leverage people, they leverage systems, and they leverage those things which have created that business growth and those results, not them trying to feel like they’ve got to do it all.
Speaker 2 (17:31):
Yeah, absolutely. All right, I’m sold. Let’s leverage if only it was as easy as that, but how do you know when it’s time to do this? Everyone will think this is a great idea, it sounds awesome, I want to do it, but is there a time that you can say that? When is it time to go from doing everything yourself to building leverage through people or systems?
Speaker 1 (17:53):
There’s a time in a business owner’s journey where they’re ready to take that step to take off some of the hats and no longer be great tradesman to be, but be a great businessman.
Speaker 2 (18:10):
So people have that idea. We talk about it when we say it just triggered in my mind that idea of people buying themselves a job if they stay at that certain level. And I think being self-employed is really, it sounds great to be self-employed, but really that’s code for I’ve bought myself a job In my mind that’s very different than being a business owner.
Speaker 1 (18:31):
Correct. And what you’ve done is you’ve bought a job, you’re carrying all the risk and you’re probably making less money and you’re working more hours and you’re way more stressed, and you’ve got way less time and way less flexibility than you did when you were probably employed by someone else. Yet you’ve convinced yourself that and you’ve bought into the glory that is business ownership or entrepreneurship. You’re there and you love the fantasy of it, yet you’re not really getting the rewards or the return on investment from the time and energy money you’ve invested into it.
Speaker 2 (19:07):
Yeah, absolutely agree. What about then let’s come down to, well, how do we do this? All right, so let’s talk through people first. Remember we said we’re going to talk through people and then systems later on, but how do you leverage through people?
Speaker 1 (19:20):
Leveraging through people is one of the best ways when trying to grow a business. And it comes back to that what we spoke around before is one man can only do so much. And I love telling this story of a Matt from, he’s one of our clients who’s a sparky and from MTR and for years he was stuck at that million dollar mark and he was working long hours, he was kind of making all right money. He had a couple of guys in around him, he had him and a few other guys, but he was stuck. He was trapped at that a million dollar mark, and he couldn’t understand why he couldn’t break through. And sure he’d understood the concept in some degree around leverage because he’d put a couple of tradesmen on and a couple of apprentices. But this is where most business owners, they get stuck.
(20:15):
And it wasn’t until Matt realised that he did understand the power of leverage, but only to some degree. And the true leverage came when you do decide to get off the tools, but then you’ve got the ability to see that leverage comes in more other forms through admin, through bookkeepers, through estimation, through project managers. That’s where the real power of leverage comes, because otherwise all that you do is you leverage yourself offsite and into the office and you go from helping contribute to the bottom line and you’re just getting bogged down in low value tasks. So for Matt, he got stuck like most tradies do at that million dollar mark because he hadn’t found the way to be able to truly leverage himself to be able to manage himself into the sweet spot and delegate those low value tasks to be able to take his business and life to the next level.
Speaker 2 (21:17):
Yeah, what you’re saying I think is people start with leverage with people and they think, I’ve just got to get more of me correct. People who can do what I do, more of those people would be awesome. And in terms of being able to charge out more hours, that’s true to an extent like you said, but it’ll only get you so far. The idea of true leverage then comes through structure and looking to those places, well, where can I get people doing things that I know I should be doing that I’m not even doing? Or I dunno, I’m doing them or I’m not even good at them. Where can I get those people? So maybe tell us then, with Matt’s story in mind, what does that leveraged structure look like beyond just more of Matt, if you like in the story sense?
Speaker 1 (21:56):
And I think Matt’s a great example around this, and the reason why I love telling that story is because most traders are comfortable hiring the equivalent of them like you were alluding to before. They understand what a spark you’re a plumber or a chippy does on site because they’ve come from that trade, they’ve been a tradesman, they’ve been an apprentice, they’ve done those roles, so they feel comfortable hiring one of them. But this whole concept of, geez, I know I’ve got to get an admin person, or I’ve got to get a bookkeeper, or I’ve got to hire someone to be able to take on that estimation. This is somewhat where the fear or the doubt creeps in, doesn’t it?
Speaker 2 (22:37):
And it reinforces if you are triggered by that mindset of, Hey, it’s cheaper, I can save money doing it myself, this is where it plays in big time, because the idea of bringing someone in one that I don’t really know how to do that job, and two, it’s just going to cost me money. I can’t charge ’em out. So how could that possibly be good for my bottom line? I think that’s where this starts to trickle in. And that’s something that Matt bumped up against, especially when he started to look at his office crew.
Speaker 1 (23:02):
Yeah, correct. And so when you’ve got that mindset that no one’s as good as me as it saves me time and energy, money, like you alluded to before, is most some guys get off the tools and get into the office, but what they do is they go from charging themselves out at over a hundred dollars an hour to getting bogged down into $30 to $35 an hour low value tasks, and they think that they’re saving the business money by doing it themselves, by doing the deliveries, by doing the invoicing, by scheduling the guys, by ordering the materials. But all that stuff can be done by apprentices or delivery drivers or an admin person, which could cost you 25, 30, 30 35 dollars an hour or less. And if you think about an admin person, 20 hours a week at $35 an hour is 700 bucks. And imagine what you could do with that 20 hours a week. There’s your nights and weekends back, or how many quotes could you get out the door in that 20 hours a week? So no wonder so many trades business owners are stuck working longer and harder because they think they’re saving them money, but it’s actually this thing called opportunity cost. It’s the cost of all the opportunities they’re missing out on because they’re not working on the things that matter because they’re so bogged down in the low value tasks which aren’t actually contributing to the growth of the business.
Speaker 2 (24:17):
And I think that we touched on this without going too much further into it, we touched on this in episode 22, the strategic hires, every trades business needs to grow their business. I think if people go back and listen to that in the context of leverage, it’s going to really dovetail nicely.
Speaker 1 (24:31):
Yeah, correct. And there’s a really real formula to it. So just quickly to get you excited about going back to that episode 22, the first area you always leverage as your ground crew, it’s about designing and building your ground crew with the first real milestone to be able to get your ground crew set. So you’ve got the confidence to be able to step back offsite and that ground crew can run independently and productively without you physically having to be there to nurse them. The next stage of leverage comes through your office crew, and that’s through admin and bookkeeping. It’s a low cost, it’s low risk, it’s flexible labour where you can use part-timers and contractors to be able to get in there where you can bring them in at part-time initially to be able to leverage your time to be able to enable you to price more work and manage work better.
(25:25):
Then the next phase of that then comes in your operations crew, that’s a project manager or an estimator, but you only go down that path once the ground crew and the office crew are dialled in because that’s got risk and cost attached to it, and you want to make sure your business is at the right size to be able to afford that level of leverage. So in episode two, we’ll talk through all those strategic hires in the right time, in the right order to when they bring them through with rough revenue lines. But if you think over a period of time where you can go from doing everything to leading everyone, the structure, the overall business structure doesn’t change. It’s just that as you go from one to two to three to five million, you over time go from doing the role to taking that hat off and someone in the team does that role for you. And that’s why you can see a business owner doing three to $5 million what we call a lifestyle business, and they’re doing it in 45 hours a week or less. And that’s because they’re leveraging through good people to do those functions and those roles rather than physically having to do it themselves.
Speaker 2 (26:35):
Yeah, for sure. No, that’s a great summary of that episode. There’s going to be someone out there who thinks, I won’t listen to episode two. My business is different, and this is probably a good time to say, all right, well, we’re not going to argue that point, but maybe if they wanted to book in a strategy call, hey.
Speaker 1 (26:52):
Yeah, definitely. And that’s the path to growth, the challenges of predictable, which means the strategies are also very predictable as well. And that’s what I love about growing a trades business. There’s a real recipe, there’s a real formula, there’s a real roadmap to growing your business. So if you’re in that position where you’re listening to this and you’re loving what you hear about leverage, but you just don’t know where to start, get a call booked in @strategysession.com.au and let’s talk through where you are and where you want to go and let’s talk through how we can shift your mindset around leverage and we’ll talk a bit about the key hires you need to be able to make in your business to be able to leverage your time and take it to the next level.
Speaker 2 (27:33):
Yeah, it’s a great way to leverage your time. If you’re listening to this, it’ll save you all sorts of hours. Let’s carry on before we round it up, I think the other one we need to talk about in terms of leverage, especially these days is technology. Most people, if they haven’t already, there’s a lot of people that bypass the whole thing about using people for leverage and go straight to tech these days. And you think in terms of ai, there’s all kinds of promises from the software world. What role does technology play in terms of leverage in a trades business today?
Speaker 1 (28:05):
Technology is huge, but it’s the right technology at the right time is key to be able to create leverage and especially with a lot of trades business owners, they got into their trade and their craft because they’re very good problem solvers. They’re very good with their hands. They love being outdoors and building shit or fixing things, let’s face it. But the reality is is that they struggle with technology and sitting behind a computer all day and setting up accounting packages or job management systems is not really what they love to do. And so I think the first thing we’ve got to keep in mind, there’s absolutely a place for technology, but it’s the right piece of technology at the right time in your journey is the key to be able to getting great leverage through that tech.
Speaker 2 (28:55):
Yeah, I look at it as it’s the same as what you just described in terms of leveraging people. There’s a real way to do it, to build it up from the foundational stage with your ground crew into your office crew. There’s the same thing with tech, right? There’s so much that gets overlooked at the foundational stage.
Speaker 1 (29:10):
Yeah, correct. And I know that there’s plenty of other coaching businesses out there that say, Hey, systems and processes is what sets you free, and that’s their messaging. That’s their call cry. That’s their promise, and there’s no denying that systems and processes are important, but at Pravar we do things a little bit backwards that we don’t go systems first, people second and then work out how the hell we go about it With that position, we turn it on its head where it’s position first. You get really clear on what’s the position, then you get the person into that position. So bring in your admin person and then leverage off that admin person to be able to set up the accounting package right? Set up the job management system, get supporting, developing invoicing systems and ordering systems and the way you go about your scheduling. Really leverage off those people to get those systems and technology in place. And if you do it in that order, we promote at Pravar, you’ve got a far better chance of effectively getting leverage from systems and processes and technology rather than getting a bit of tech and paying subscription for two years and just never using it. You never get around to it.
Speaker 2 (30:23):
Oh, we see that all the time,
Speaker 1 (30:25):
All the time.
Speaker 2 (30:26):
Nothing drives me more crazy than a client. I’m doing my JMS. This is the best thing ever. Two years later, it’s still on their roadmap to implement their JMS because they haven’t found the time to get around to doing it. It’s a real trap.
Speaker 1 (30:38):
What about AI? It’s really topical at the moment. What’s your opinion on AI and what place does it have in business in the moment, do you think?
Speaker 2 (30:48):
I think the first thing is that, yeah, AI is all the buzz and there’s definite merits to it and there’s what we call use cases where it’s absolutely beneficial, but it’s not the ultimate tool, the only tool. It’s not replacing every other bit of technology that you could use in order to gain leverage and quite often overlooking the other stuff, it’s never going to help. It’s going to be one of those things that sits on the shelf. It’s already there. You’re not using it for a reason right now, but before you even get to that level of I’m using AI in my business, I think there’s other things that simpler systems, things like do you use a digital calendar when you first start out? Most guys, I’ve seen guys that still write down notes on the block of wood on the building site sort of thing. When we coach them, it’s like, where do you write this stuff or wherever I can get a pencil and something to write on.
(31:39):
Again, in terms of leveraging, being able to come back to this stuff. And I think for me, leveraging your own thoughts to start with, and I mean, where do I need to be? What do I need to work on next? A task management system, a calendar system. How do I keep track of all these invoices so they’re not all sitting on my dash or in my glove box? What do I do with all those receipts systems exist already that does that perfectly well, very simply, and I think the idea of locking in some of those is going to leverage you to the point that’ll free your mind up to be able to get on with what is important rather than what’s another layer of complexity I can add to my business or the way that I operate using an AI for instance.
Speaker 1 (32:18):
Yeah, I would agree with that. What would be your top couple of systems that for a trades business you think are just non-negotiables? From a foundational level?
Speaker 2 (32:26):
I think absolutely a calendar. Having a calendar or somewhere where you are going to be told where you need to be at any particular time, that’s what a calendar’s for. Then I think you have a task management system that tells you what you need to be doing, and I think they’re two very different things. It’s probably worth us diving into this on separate episodes, but having a calendar that consists of all the shit I’ve got to do, all the things I’ve got to remember and where I need to be and my appointments and jobs and notes about what I’ve spent money, it’s too much. So getting your calendar right and your task management right’s, probably the first two. And then I’d say having the ability to collect or capture the data required to give you accurate numbers. So your accounting system I think is probably the next one. Having your accounting package dialled in and being able to feed in transactions and have your bank reconciled, that sort of stuff in your accounting package, all of them do it. Xero, which most people use does it best in the world, their best practise in the world at doing it. There’s not a better leveraging tool for it. So I think having those three would probably be my top three.
Speaker 1 (33:31):
Then from there, the next layer on top of that is obviously a job management system. But it’s actually bloody using it. It’s having the ability to schedule jobs, capture reports, capture site photos, capture things, and then it’s only as good as you feed it with the information. So a job management system’s critical from probably the next layer above that, isn’t it?
Speaker 2 (33:50):
It is, but I think that relies also on the leverage you’ve got through the people you’ve got in the business.
Speaker 1 (33:54):
Correct.
Speaker 2 (33:55):
You’d be crazy, and I think this is where we coach it all the time, is don’t try and implement a job management system by yourself when you are the one that’s going to have to implement it, do it, work it, train it. It can’t be a one man band. You need to have leveraged some people into your organisation to have a successful job management system implementation.
Speaker 1 (34:13):
Yeah, correct. And also we say it with clients all the time is that don’t underestimate how long it actually takes to roll that out effectively. And it’s not just having it there, it’s about effectively using it to get an outcome, whether it’s cutting down on waste or improving your efficiencies or better communication or improving margin on your jobs because you’re managing costs and labour. So it’s not just about having the job management system, it’s about actually using it to save time and energy and to make you more money. In the end of the day, it’s about reducing the repetitiveness of tasks and to get rid of the clunkiness of paper. So that’s why it’s important.
Speaker 2 (34:51):
Absolutely. So hopefully you can see there’s a real, just as it was, like we said with people, there’s a real system to the right people at the right time and the right foundation. Same with leveraging through technology, I think is the point we’re trying to make there. Rob, let’s bring it home. I think there’s probably a couple, one more question or one more area we can talk about. Why do you think people overlook these fundamentals? We’ve talked today and maybe then just touch on how do we bring people back on track at Pravar through doing that?
Speaker 1 (35:18):
It’s the shiny light syndrome, and I think a lot of business owners get caught in the sexiness of certain strategies that they might be hearing online, looking out on Instagram or talking to their mates at a barbecue, but I don’t think we can underestimate the power of very strong foundations and it’s no difference to when you are building an apartment block, for example, the bigger or the more apartments or the levels that you want to build this apartment block at the deeper, the foundations and the footings have to go into the ground. And so the same as in business, the bigger and better and more profitable you want your business to be, the stronger your foundations have to be. And I think so many business owners downplay or underestimate the power of really strong foundations and how they go to set you up for long-term success in business.
Speaker 2 (36:17):
And when you talk about those foundations, it allows you to keep doing those tasks in an optimised fashion. None of this is all about removing the tasks that need to be done. There’s no amount of leverage that says you don’t invoice in your business, but you need someone or a system that’s able to do that for you. Leverage doesn’t reduce or remove the need to have these foundational tasks done. It just makes you better at doing the foundational tasks.
Speaker 1 (36:41):
Correct. And I think about our launch programme for example, which is really designed for those business owners doing say three quarters of a million dollars around to two and a bit million. It’s that real bracket around when it’s critical to go through that phase where you’re stepping off the hamster wheel and getting foundations in place. And for most clients that we deal with in the launch programme, it takes them a good 12 to 18, sometimes 24 months to be able to get all those foundations in place to be able to go from say, $1 to $2 million. And that’s because the amount of mindset shifts are required. It takes time for the strategies to be implemented and executed, let alone still trying to run a business plus working on your business. But it’s that phase where you’re getting off the tools and building your ground crew.
(37:31):
You are going through that journey of getting some office space and hiring an admin person, onboarding them and training them and getting them to support you in the setup of the job management system and your pricing strategy, understanding your numbers better and you break even points and what you should be charging and how to manage. Guys, there’s a whole foundation period in there around how do you just do foundational leverage through ground crew, office crew and the understanding of an operational engine. And I think so many business owners, they’re getting patient, they want everything now, but we’ve just seen it time and time again that the better. You just lay those foundations and the guys who go through launch, they set themselves up for long-term success, and if they do it right, then they turn the corner into leverage, get their operational structure go and boom off they go into lifestyle and crack on from there. But I think their long-term success in leverage and lifestyle comes off the back of a really strong play in launch, which is about getting their foundations personally and the business foundation’s, right?
Speaker 2 (38:36):
Yeah, couldn’t agree more. So I think that’s our case for why working longer and hard is not the answer, and hopefully we’ve answered that today, but I think that’s probably a good place for us to leave it.
Speaker 1 (38:47):
Absolutely. It’s the ability to be able to understand that it’s your mindset holding you back, your mindset of no one’s as good as me. The longer and harder I work, the more money I’ll make and that it saves me time and energy and money to be able to do it myself. It’s those mindsets that also with the fallacy of more and the myth of the hustle calls, that culture, those mindsets is what’s keeping you trapped where you are at the moment and you just have to accept that your mindset’s keeping you trapped, and the only way to be able to turn a corner and achieve the very thing you got in business for in the first place is through leverage. And leverage comes in the form of money comes in the form of people and it comes in the forms of good systems. Absolutely. Thanks for tuning in today. Be sure to hit that follow button and share it with one of your mates in the industry. As I’m sure there’s someone that you know who would benefit from today’s episode, make sure you join us over in The Trade Den Facebook community and let’s keep the conversation going. And until then, looking forward to coming back to you next week with another episode of The Trade Den.
Speaker 2 (39:48):
See you on the next one.