6 Reasons Businesses fail & How to be Successful
Dirt Monkey: It’s the Dirt Monkey here at Dirt Monkey. You have heard the stats; ninety percent of you are doomed to fail, seven percent of you are gonna struggle eating hand to mouth, and three percent of you get to live the American dream. That is total B. S. I believe every person should have a chance at the American dream, it’s not reserved for the select few that know the rules. There are multimillionaires today that didn’t exist five years ago. They didn’t invent anything new they’re just doing something that is already established but doing it better.
The absolute best companies in the world have entire teams of people thinking in unison all with one common goal and they’re called mastermind groups. That’s how small businesses get really frickin’ big. Do this, and you will make tons of money. If you think you alone hold all the answers, then good luck it’s insanity. Today I’m going to share with you six technical tips of the people that succeed already know, so let’s get this show rolling.
The hard-working guy feels that if he just works longer and harder, the American dream will eventually be his. He’s actually in competition with other people in the same industry but nothing could be further from the truth and this is going to blow your mind.
Then there’s the other fella, there’s the fella that thinks if he works smarter not harder, success is going to come to him. They believe they’re entitled to success. They don’t get that they have to actually bust their butt to achieve it. He is the next Mark Zuckerberg, the creator of Facebook, all he’s got to do is create the next app on the phone.
What I’m going to tell you is this: you’ve got to be both of those guys. Here’s a fact; there’s more millionaires made in this world doing what has already been done than there are people blazing new paths. There’s more millionaires made running successful small businesses doing the same kinds of services and offering the same kinds of products as somebody has already done.
Five, ten, fifty years ago. They just know how to do it more efficiently than the doomed ninety percent; you are on that fence. If you are one of those guys that has busted their butt for five or ten years but is not yet living your American dream, that’s where you’re failing, plain and simple. There is no easier way to get off that fence and to get on the high road to success, than to find somebody that’s already done it that will come in and give you a hand.
So, how do you do it? Well it’s the trifecta of experience, education and hard work, you probably are willing to give everything you got, you’re willing to give all the hard work necessary to get your business launched to create the American dream.
Here’s a fun fact: the average millionaire in America has seven different sources of income, if you run a small business but decide that, that day you’re gonna run a piece of equipment instead of running your business, you’ve removed your business as a source of income and replaced it with that one piece of equipment that you’re operating. It also means that if you could pay someone fifteen dollars an hour to run that piece of equipment for you, you are now paying yourself fifteen dollars an hour.
Experience and education. You’re going to borrow those things from people that have already been where you want to go, but wait a minute what do you mean, borrow?! There’s infinite resources for you to get out there and build your business based off the experiences and education that other people in the field are willing to provide to you. The problem is too many small business owners are too stubborn to take this up, you don’t have to figure anything out, all you’ve got to do is pick up a lifeline and go, hey wait a minute I got a problem, what do I do?
And you have somebody that has ten, twenty, thirty years of experience on the other end going oh yeah, I remember when I was in that same position, this is what worked and this is what didn’t work. Can you see how effective this is to launch your small business, to take you further faster than you could ever possibly do on your own? I am absolutely adamant that the most important thing you need in your business is guidance. Now, some of you are going to say, oh he just wants us to join his mastermind group. Yeah, because you have myself, Phil, and an entire group of people holding you accountable every week.
We pick a pain, we set new goals and we work together as a team to conquer those goals and to move our businesses further. The more members we have, the larger the pool grows of experience and education that we can share. I only want you guys to join my master group to benefit you and to benefit every single member that we already have in place, please go to Dirt Monkey University, please check out our mastermind group and please sign up, it’s a simple as that. I love you guys I want nothing but the very best for each and every single one of you.
Now, here’s your six technical tips from one of our mastermind webinars. Go get ’em brothers and sisters.
Stan: All right, good morning everybody. I’m with my good friend Phil, and chief Dirt Monkey University professor. Today we’re going to be talking about the top six reasons why most companies fail, but we are not limiting it to that. We are going to be building upon these points and we may end up going down different avenues as we build upon these points. Phil, how are you doing today?
Phil: I’m doing great Stan, I’m excited about this because we get so many questions about building business and all of the most common reasons why the struggles that people are running into are included here today. So, I’m really looking forward to talking about this subject and helping set guys up to be successful with their businesses.
Stan: Exactly, so let’s get on to the next slide. All right, we are in the middle of a bidding and estimating workshop and the reason we’re in the middle of this bidding and estimating workshop is, we’ve broken it into nine separate parts but all of these individual components can lead to the failure of a company and so we’re taking time to develop each and every one of these. But right now what we want to do is, we want to talk about some things outside of bidding and estimating that can also ruin a company.
But it all starts with understanding your pricing components, understanding your overhead, and these are universal principles that apply to every single business out there it has nothing to do with landscaping. It has nothing to do with lawncare or excavating or demolition. It has everything to do with any kind of company that you own or operate. If you do not understand part three, your financial statements, you’re not understanding the life blood of your business. Parts four through seven may be basically aimed right at landscaping contractors, but parts eight and nine do not. So, a lot of the components in our bidding and estimating workshop can help almost any business improve their operations. Phil, walk us through this first one.
Phil: OK the first warning: ignoring, or not knowing what your numbers are is one that can break any company. One of the assumptions that we tend to make as business owners is that we look at what other companies are doing and we make the assumption that they’re doing it right. That they know their numbers, and they’re making the assumption that you know your numbers and the guy across the street’s making the same assumption and you realize everyone is basing businesses off of what other people are doing. Your numbers are yours, they’re unique because they match your overhead. Your cost can be radically different from the cost of your competition for better or for worse.
It’s a chance when you understand your numbers, to check yourself at every step of your operation and make adjustments, make improvements, trim the fat, get rid of wasted expenses. Don’t invest in machinery that you’re not ready to take on or that you can’t afford. Without this fundamental understanding of your numbers and how your business operates, you’re going to set yourself up to fail. Because honestly, selling and growing your business is one of the easiest parts of being in business. Going out, pulling that sales lever and saying I’m gonna sell, sell, sell, you’re gonna realize it’s going to work. Your revenues are going to start to increase and increase and increase, but if you haven’t addressed what your numbers actually are, your problems and your headaches are also going to increase. So understanding and knowing your numbers is critical to having success.
Stan: And I’m gonna guess right now that ninety five percent of the people watching this video have no clue what their numbers actually are. They have absolutely zero knowledge of what their cost per hour to operate their business actually is, and I think we developed that concept in all its full glory in part two of our bidding and estimating workshop series. We actually designed a system for business owners that they can go, hey I’ve got five employees and it costs not just their hourly rate, but we’ve also figured out how to calculate their overhead into their hourly rate.
So that they know what each man or woman within their business has to produce to break even, and then what they have to produce to break to make a profit. This is how specific, we’re not just throwing something against the wall hoping it splatters and sticks and works for these business owners. We are getting absolutely very specific so that guys that are taking the course, are watching videos like this can walk away and go, I got homework to do. I don’t want to motivate them, I’m giving them homework, I want them to go, oh crap, I’ve got to understand this. I took a Dave Ramsey course; Phil you know him?
Phil: Oh yeah.
Stan: People watching right now, it blew me away and what I have to make per month to support my home, my personal business, it shocked and awed me. It changed my life and when we did the Know Your Numbers part of our workshop series, it’s going to shock and awe the business owners. That Dave Ramsey course helps people understand their personal finances, but what we’re doing in this course is helping take it even further so as business owners they know exactly what it costs to have a person go out on the job site and what they’ve got to do to make that up.
Phil: That’s right. And you know what’s just as important, is measuring. What we’re gonna tell you is exactly what it is, that you need to measure in your business. What number should you be dialed into, looking at, all the time so that you can measure your performance and measure the success that you’re having along the way. So we go through that in great detail. Let’s get to problem number two here.
Stan: This is a yardstick, you’re talking about measuring, and this is a yardstick that most companies use to determine how well their business is doing. This one right here, the biggest mistake that I see most companies make and a lot of companies base where they’re going, their future, on this slide right here. Grow as fast as you can. It is the absolute worst possible thing you could ever think of, and what I’m talking about is when you’re a fledgling company, when you’re first starting out, you go “all I want to do is a million dollars a year, don’t even think that way.
Stop right there, because a million dollars a year gross can also mean one point one million dollars a year in expenses. It doesn’t mean profit; it doesn’t mean it in any way, in shape or absolute form. What we talk about here at Dirt Monkey University is to stop that slow death train and to understand that gross doesn’t equal profits, that profits equal profits. If you have a one hundred thousand dollars a year company, but you have seventy percent profit, dude you just made seventy thousand dollars a year. And you know what, lots of times that’s what the companies we work, we with and for, helping them build.
They’re at fifty percent, sixty percent even seventy percent profits, in fact contractor sales Academy which Phil and I are both going to go to at the end of April, their average is sixty to sixty five percent profit margins. We’re guest speakers there, we’re gonna be teaching people how to take their business to the next level and that’s what we strive for here at Dirt Monkey University. So, let’s talk about this yardstick and growing as fast as you can and what it can mean to the individual people Phil.
Phil: Yeah. One of the easiest things for us to do is pull that sales lever, go out and we start getting referrals. We start getting people that want to do business with us and we go out and we’re tempted to sell, sell, sell, sell and then we grow and we reach that point where it’s like, well let’s just, let’s add a truck. Let’s add a piece of machinery, let’s add a piece of equipment, let’s do something else because we have the sales to support it right here in this moment. We take on credit lines, we start to talk our lenders about having thirty day terms with them and we start to extend ourselves out and spread ourselves too thin. That will bury you not just financially, that can bury you emotionally.
That can strain all your relationships in your life. We, not saying that we don’t want you to grow into a huge company if that’s what you desire, but we want you to do it and maximize. Don’t leave any money on the table. That’s what a lot of guys are doing is, as they grow they start leaving money on the table because there’s more cash flowing. It becomes a little bit easier to write a check or swipe a card or do something like that.
They don’t mind, profits go from twenty eight percent down to twenty three percent and they hardly notice it at first. But as time goes on if there’s anything that happens in our economy during seasonal fluctuation, or if good employees leave to pursue other opportunities, we’re back now. We’ve built this machine that needs to be fed with sales, we have overhead commitments, so we want you to grow with as little debt, as little commitments as little headaches as absolutely possible. You may find that you reach a point where life is
But as time goes on if there’s anything that happens in our economy during seasonal fluctuation, or if good employees leave to pursue other opportunities, we’re back now. We’ve built this machine that needs to be fed with sales, we have overhead commitments, so we want you to grow with as little debt, as little commitments as little headaches as absolutely possible. You may find that you reach a point where life is really, really good. You have time, you have money, all your bills are paid, your employees are happy and it’s OK to stop there.
So what if you’re not the biggest guy on the block, so what if your trucks aren’t all brand new and everything’s fancy. OK you’ve got to fix your mowers by hand and they’re you know, a few year-old models and your skid steers need tire replacements, so what. You are happy. I can tell you do not fall into the comparison trap where you go and you compare yourself to what everybody else is doing because the image that is, that is put out there on the outside does not, in fact most often, will not tell the story of what’s really going on, on the inside. I can’t tell you there’s probably a whole host of companies that will never admit the regret that they have of now having this monster of a business that they have to continually fuel with new sales.
Stan: It’s terrible, being bigger is not better at all, but I want to talk about growing as fast as you can, pursuing projects that are beyond your capability. Now I want to clarify this and so let’s just say you’re here, you’re level in your company, I’m talking about looking at a project way up here. I always want you business owners to be looking at projects that are just outside of your capabilities; that just make you slightly uncomfortable because what it does is, it gives you the ability to grow without a lot of risk.
A little bit of risk, a little bit of pushing yourself outside your boundaries is absolutely necessary. Going up here, this amount of a learning curve can be devastating if you screw up. This amount of learning curve is no big deal, but once you hit this plateau, your company’s now here and the next project you take may be here, and then you stair step up.
A little bit of risk, a little bit of pushing yourself outside your boundaries is absolutely necessary. Going up here, this amount of a learning curve can be devastating if you screw up. This amount of learning curve is no big deal, but once you hit this plateau, your company’s now here and the next project you take may be here, and then you stair step up.
I remember sitting on the end of my bed as a twenty-year-old kid going, I just signed two, four thousand dollar projects. I had eight thousand dollars’ worth of retaining walls and I’m on the end of my bed and I’m going oh my God, this is so awesome! And I was so excited and so nervous and right now it’s so easy for me to go, I got five, forty thousand dollar projects that we’ve got to accomplish within the next thirty days. And I didn’t do that as a twenty-year-old kid. I did it as slowly stair-stepping up. So growth within your limits is the way that you are going to experience better profits without the potential to kill yourself.
Now, I’m gonna go all the way down to not turning away low profit work. We have an entire idea, an entire theory where we talk about getting as many bread and butter projects as possible. That means building up your schedule filled with projects that may not make you rich, but you also are very safe doing them and then you have the ability to cherry pick. You’re full but the jobs still come in and you cherry-picked this job and you know what happens. This cherry-picked job where you get a ton of money then gets switched into the schedule for a bread and butter job that may not have as much profit.
Sometimes those lower profit jobs, you’re gonna get the biggest kick of your life when you get to fire those people, because you know what those people would fire you in a heartbeat as well. You’ve got to remember this is business, this isn’t friendship. And a lot of times I’ve been driving out to a site equipment loaded, everything purchased and had the customer say, “Oh you know what, we’ve changed our mind on this job.” I’m three miles down the road, what do you mean? Those lessons were early on in my business. And because I didn’t have solid contracts in place, I didn’t have the solid system in place to prevent customers doing that from me.
It also meant that I was not a priority in their world, that they were a priority in their world but it also meant that you can flip that switch. And that may be a little bit hardcore for some of you guys listening right now, but I’m not here for you to make friends with all of your customers. I’m here for you to make as much profit as absolutely possible and that’s what we’re talking about today, is prioritizing your jobs, getting your schedule filled up, saying no to low profit work.
Phil: Yeah, one of the worst feelings there is, is being in a position where you feel like you have to say yes. Where you don’t have any choice or you feel like you have to take jobs to pay the bills, to keep the guys busy, to do any of that. All of those are not great reasons to go to work every day, they’re not fulfilling reasons to go to work every day to build your business because you have to. You want to be able to have a choice in this, and you do. And I will tell you without a doubt there are a lot more people you should not be working for, and saying no to and firing.
If you’ve gotten routine contract accounts, and most people feel this in their gut, like I know I shouldn’t take this job. But I know I shouldn’t work for this person, but, but I need it, but I have to have it, but my guys have nothing to do. That’s because you have too much capacity and you’re desperate to fill it. It was great two months ago when there was a ton of business in the pipeline but now two months later, not so great. You will feel the strain of your capacity growing. That’s when instead of adding more capacity, raise your prices. We’re gonna tell you exactly how to do it; raise your prices and get it back into your capacity. Now you’re making more profit with the exact same amount of assets.
You haven’t added more people, more headaches, more crew, more equipment, it sounds simple and it is simple. We can walk you through it step by step by step, and tell you how to do it. That extra money goes right in your pocket.
Stan: Another thing too that we talk about is timing the market, timing the season. You know Mike, he had a book called Surge. He’s a friend of the Dirt Monkey University. He’s contributed into our training programs. He’s been phenomenal to work with, but surge is basically nothing more than how you time the market and time your prices. I had a chance to go to the world’s largest construction Expo in Las Vegas.
I was at the Monte Carlo and I asked how much is this room tonight and they told me it was forty dollars and then I said, is that your typical price and the guy looked at me point blank, Phil, and he says your room tonight is forty dollars because there’s not much going on, tomorrow night the convention starts, the room is going to be eighty dollars. Then the next night, there’s two conventions in town your room is going to be four hundred dollars. I said, wait a minute are we talking about the same room? And he says, “Your room, your exact same room.” I walked in, going, what’s a four-hundred-dollar room gonna look like, and it looked like two beds and a refrigerator.
Stan: But it was about demand and the hotel system, times what conventions are in town and the price that they’re going to charge for those rooms. And you guys, as the seasons change and working outdoors or whatever business you’re in, as your demand changes so should your price. It’s called supply and demand. Absolutely. We’ve got, you’ve got to understand that and we cover that at Dirt Monkey University in a mastermind group. This is the kind of information that we pile drive home every single week and in our private Facebook group. Absolutely, but let’s get on to the next point: presenting a poor image.
Phil: Yep, this is, this is a big one. I mean it’s such an easy one, you would think it makes so much sense to put your best foot forward. It’s called showing propriety, and that word means looking and acting the way the customer expects you to look and act. They are expecting you to show up on time, to return phone calls, to answer emails to have a clean shirt on, to be well-shaved and groomed. They’re expecting you and your job sites to be clear and cleaned up of all debris, for you to communicate any delays with them. We win more jobs simply because of this, and our competition not doing this.
I call our competition in that sense, my salespeople. I have a whole sales force out there working for me. Whenever they don’t return a phone call they are helping me. I should call them and pay them commission for doing that. It is so basic as you would think, but we want to talk about this because sometimes this becomes, this is where we struggle. It’s not that we don’t want to do it, it’s that we tell ourselves stories like, I don’t have time to do it.
We’re suggesting you don’t have time not to do these things and not to invest in these things. We’re not saying that your truck can’t be old, old is fine. In fact we prefer things that are old and paid off and well maintained, but that’s the key there, it’s well maintained. Go ahead, take that time that it takes one day and just make it a point to fix these things and get yourself a system in place.
If you can’t afford an office person to come in and answer your phones, have a, just a meticulous way to call people back. Have a professional greeting, don’t have it go into voicemail and say you’ve reached, and then some number repeats itself. Make it all professional and you can even be a one man operation or a small operation, and look and appear bigger than some of the large corporate companies.
Stan: Remember the very first time you meet a customer, you have seven seconds to impress or turn them off, every time that I meet a customer you’re going to see that I have my apparel on, I’m not trying to sell my company, I don’t know if you can see it but I am fully outfitted. My cars, my trucks are fully outfitted. But when my crew shows up, they don’t necessarily have all uniforms and I don’t mind that and I’m gonna fly against the wind a little bit, because when my crew shows up they are excessively professional. Clean jobsites, the quality of their work is absolutely mind-blowing and I don’t say that to brag. I say that as a fact, that I want you guys out there to start to emulate.
Because when you are done with a job, I want the customer to text you and say O.M.G. This is literally how it goes with us. I get the text: “This is, this is way better than what I would have ever expected, could have ever came from any other company”, and I get that time and time again. A lot of that is related in the way we communicate. Communication with your customers is absolutely paramount.
It is absolutely paramount because it is part of your image. You don’t have to always have the best uniforms, but if you have the best communication, if you take the time every single day that you are working on a jobsite or every time you have an opportunity to communicate with the customer, you look them in the eyes and you don’t look down and away. It’s a very simple thing and you train every member of your crew to be respectful, to say hello. They don’t necessarily all need to engage with the customer, you need your trained supervisors to engage with the customers because you, my friend, are gonna be so busy you’re not going to be able to engage with every customer on a daily basis.
So, your supervisors have to be able to do that because when you’re not there, they are your image. So, it’s not just the quality of their work but it’s the quality of their communication with the customer that is absolutely key to your success.
Phil: That’s right. And we’ll hammer home that point. So much of that goes back to great communication. Great communication can solve the majority of your interaction issues with clients. You will again, I can’t emphasize enough, how much business will be gained before you’ve expressed a single ounce of knowledge of the actual service or product. Just through communication, people will hire you because you communicate the best. So focus on that. Look at your company and find out, where am I weak right now? Where are the struggles that I’m having in communication?
If you’re getting texts or voice mails that are saying, hey you know I’ve been expecting a call from you but I haven’t, don’t beat yourself up, correct it. Just acknowledge what the problem is, be willing to look at it for what it is, see the problem and be willing to implement the changes. Some of these changes can be implemented in a day or less, and you can be on the road to having better service. And this is going to impact you up when it comes time for reviews, when it comes time for referrals. And that is going to help you grow your business organically from the inside out, so you’re not chasing down with marketing dollars, new people, but you’re capturing warm and hot leads through referral business and we’re going to help you do that.
Stan: Yesterday Phil when we were doing our bidding and estimating workshop series, you quoted me and in that quote, you said there’s two things you need to remember. You need to remember your birthday, and you need to remember these formulas like they were your birthday. Those are the only two things I care about. And we went through a bunch of estimating, volume calculation formulas that I wanted guys to know like it was on the back of their hand. And this is something else that I want guys to know like it’s on the back of their hand. When you are going into an appointment, on time is late, ten minutes early is on time. Do you agree?
Phil: I absolutely agree. Punctuality is key and show up right when you’re supposed to or early. Don’t be late, don’t even call and be late. At any cost, be there before that appointment .
Stan: If you’re gonna be late, call them
Phil: Yes, call them.
Stan: Don’t just not call them!
Phil: Yeah, yeah. Don’t just not call, but you know try not to make that, that should be a rare exception. These appointments, people are banking on it, they’re counting on you, you tell them you’re going to be there at one o clock, be there at twelve fifty. Just make sure that you’re keeping your word. That is what integrity is all about, making a promise and your ability to keep a promise is the measure of integrity. And you can. It is, as time goes on whether you’re stretched thin or you have a lot going on in your life, things are going to come up, things are going to happen.
But if that becomes routine and normal for you, people are gonna catch on and they’re gonna know. They may not give you a bad review but they might just say, you know what? You don’t have integrity. Or they’re gonna make it really hard for you to compete and you’re gonna have to go to be one of the price competitors. They may hire you still, but you better have the lowest price because you can’t stand on your own on your word. And they know that they’re gonna have to babysit it. Take all that off the plate to establish your professionalism.
Stan: And I want to share something with the YouTube community right now, and I want to hear from the YouTube community your thoughts on this, on negative reviews. When have you gotten an unfair, negative review? Phil? I’m gonna share this quick story with you before we get down to this next point. I went out to a job site, I met a customer. She had had two other companies come out and give her bogus information on how to grade and fix a water problem that was going into her house.
Now this was the seventh or eighth meeting I had that day, and everything was scheduled very tight and I tend to talk very fast. This is how I talk when I talk with a customer. Sometimes this turns people off, I guess. So, I’m communicating with the customer that the grades that were proposed to be set, were off. That it would actually be detrimental to her property, that it would make the water flow into her house and not away from her house. I gave her an absolute blueprint on how to do it and the next day I got a negative review. I never did the
This is how I talk when I talk with a customer. Sometimes this turns people off, I guess. So, I’m communicating with the customer that the grades that were proposed to be set, were off. That it would actually be detrimental to her property, that it would make the water flow into her house and not away from her house. I gave her an absolute blueprint on how to do it and the next day I got a negative review. I never did the job Phil, I never got the bid. Just for a meeting with her, I get this review where “he was very, very, very fast with me, he didn’t give me enough time. But I’m using the way his platform is, I’m using his blueprint to fix my problem.” And I’m like, wait a minute, so in this negative review you give me like a
But I’m using the way his platform is, I’m using his blueprint to fix my problem.” And I’m like, wait a minute, so in this negative review you give me like a one star review, but you then say that what I told you was the correct information, and it’s actually going to fix your problem. So, I want to hear from the YouTube community, when did you guys get a crappy review for something that you didn’t deserve? Now on to the next point. Undervalue employees, tell me about this Phil.
Phil: You’ve probably heard it said before, that employees are your number one asset .These are the people that are going to give you the freedom to go out and sell and build your business. If you don’t take care of them, if you don’t treat them in the appropriate way, you’re going to lose them. You’re gonna find that you’re always struggling to find cheap labor on job boards and help wanted ads, and you’re constantly rolling through people. Rolling through people is not a formula. It’s gonna happen during certain periods of time and certain phases of your growth, you’re gonna go through some different people. But if you’re constantly having turnover in your company, you will never be able to sit still and grow beyond you being the foreman or the manager on that job site.
You’ve got to provide things like training, people want to know that their work is valuable and that they have the skills necessary to do it. Imagine being put out on a job where you don’t know how to use the tools and you don’t know how to assemble the products and you don’t know how to prepare the base, and being asked to be responsible for the success of that project. And yet a lot of times what owners do, is they put the people out there and pray, please do it right because I am so busy in this other area that I’m just hoping you assemble it correctly.
And they think that a lot of things that they are engrained in them should be common sense, and they’re not. So you’ve got to give people a career path through training them. Once you know this, you can become, have this position in my company, because I’m gonna ask you to start training the people below you. Once you reinforce this system of growing and training and learning, you are going to have the most skilled, the best people and they’re gonna take pride in the work that they do and they’re gonna love coming to work for you.
Stan: So, I want to talk about company atmosphere a little bit, because your company atmosphere sets the tone for what your employees’ expectations will be. So, if you do, if you cut corners on projects, expect that when you’re not there, your employees are going to cut corners. If you hurry or rush things, this is a quote that’s in my company and every employee knows it. There’s two ways to do a job, rushed or right. And we never rush anything, so it may take us extra time to do a project, but we will never have any complaints. So that company atmosphere sets the tone so when I’m not there.
They hit something, they hit a wall, they’ve got something they’ve got to figure out, I know they’re not gonna go, oh let’s just get it done. They’re gonna take the time, they’re gonna step back and they’ll go, what’s the right way to do this? So I know when they’re thinking about it, maybe they don’t have all the necessary skills and experience but I know they’re not just gonna push it under the rug and just move on. They’re gonna tackle that thing and at least attempt to do everything the best possible way.
Nine times out of ten that also means multiple phone calls, going, hey boss what about this? How do we handle this? What do we do there? Even though it’s probably within their capabilities already, Phil. We talked about the twenty-minute rule in our webinars in the past, where you’ll read, you’ll handle multiple phone calls. You understand as a business owner that this is something they are absolutely capable of performing, so you give them twenty minutes to figure it out. As the owner a lot of times what I’ll do is, I’ll say, I’ll call you back in twenty minutes.
Most of the time the problem is solved. I didn’t have to do it. But I’ve also seen what solutions they’ve used, which gives me feedback on where my foremans are at, out in the field. I know, and is there critical thinking there? Or are they critically thinking about where they’re gonna party over the weekend. So the guys that are actually focused on the projects get promoted. It’s a simple as that, and it’s the company atmosphere of making sure that we do not rush things, we always do them right.
Phil: We did a whole webinar on the job description and creating job descriptions, for these people in key positions. Really, you should have one for everybody in your company. The one webinar we did was specifically for people in a key position like a foreman type position. We broke it down into several categories like managing yourself, managing management, managing the clients and managing these different areas of your business.
You heard me say there’s an emphasis on managing yourself. We want people to know you know something, that it is a family oriented business, that family does come first. We say that, not just saying it in theory to sound good or to be cliché, but we say it because we know that an employee that’s taking care of themselves is going to be able to come to work and take care of the business that you’re giving them. So we have a whole program designed for how to manage it.
You know the interesting thing is the employees will act exactly like the owner acts, if you’ve ever gone into a business where employees have low morale; you guys have probably had this happen to you, where someone’s looking at their computer and they don’t acknowledge you. You’re thinking in your head, dude I’m here, you should at least say hello, I’ll be with you in a moment, you should kind of perk up. That is the one thing that drives me nuts; would you just amp up your excitement level?
If you’re at like, a two, would you find a way to within yourself to take it to a five while you’re on my job clock? Let’s smile, let’s start with that, smile, hello I’ll be with you in just a minute. If you go to a business where the employees are kind of short and quick and rude, you can bet the owner is short and quick and rude. If you go to a business where employees care, and they’re giving and they’re insightful and they’re polite and respectful, you can bet the owner does that. So if you are the owner, you are setting the example for the employees and they will be far happier working for somebody who is also happy and enthusiastic about the work that they’re doing.
Stan: We’ve talked about it in the past, but just to clarify you are the center dot and everything radiates around from you, everything. So there is a big circle around you and you basically are the bottleneck within your organization. This is a typical way to start and it is what you have to do when you’re first launching, but you launch with the idea of becoming a top down management model. Which means you’re up here and you have one, two, maybe three key people that you can really communicate heavily with.
My phone is ringing by my three key people right now even as I speak. Not the people below them, they don’t call me, they do get to call me. I definitely make sure that I interact with every member in my organization, take personal time for them, but that doesn’t mean that they get a lot of my time. In fact, the lowest guys labor as the new guy is coming in, they go to the field managers and a few managers move on up. So, the business model is the bottleneck that you need to move out of and let’s talk about some of these absolutely key components.
Phil: Yeah, doing everything yourself is only gonna get you as far as your knowledge can possibly take you. It’s an arduous path to follow. If you have a mentor, a coach, a guide, a peer group, people to bounce ideas off, to share ideas with, you are going to exponentially grow your business because you’re gonna be able to share the knowledge that other people have, like we have with Dirt Monkey. These are guys that you can put questions out to, ask of the group and you immediately start getting answers.
Not just the same answers and that’s the whole beauty of it. Because if you look at shows like what was it, Who Wants To Be A Millionaire, one of the most popular lifelines that you had, one of the most reliable lifelines was polling the audience. In general, when you throw a question out to a group you can expect that the bulk of the answers are going to be correct, usable, actionable answers that you can implement right away.
Trying to do everything yourself is only going to, you’re gonna max out at a certain point. It’s probably a pretty low point and you’re only gonna be able to do so much. So, you have to get yourself up to a level where you have people that are influencing you that you’re taking direction from, and you’re passing that down through your company, so you’re not the only person that’s being relied upon to make the important decisions that you need to make.
Stan: Well they’re role models Phil, and in reality, they show you, they guide you to the next step. We’ve covered this before, you are the absolute representation of your five closest people in your world. So if your five closest people aren’t very good and they aren’t role models, this is what you end up looking like. We don’t want you to look like this, we want the five closest people around you to elevate you to the next level. We want you to be the weakest link in the five closest people you associate with. Why is this a key component?
If you are the weakest link of your five closest friends, if they are more successful than you are, your five closest members business and people are influencers in your world. They don’t necessarily have to be friends. No, no not friends, not family but influencers in your world. If they’re up here and you’re down here, I guarantee, I guarantee just through association you will rise up to here or they will come down to you.
If they are strong willed enough, they will not allow you to drag them down into your muck, they’re going to elevate you out of the dirt and take you to the absolute next level. That means finding your peer groups, finding your mentors, finding the people that you can bounce ideas off from that have the skills, experience, the knowledge behind them to answer the questions the right way. Not to second guess, not to give you their opinion. Opinions don’t matter, you want facts, you want people to go to.
When I was in this situation, this is what I did. This is also why we started the private Facebook group for the mastermind people, because our group shares their knowledge and opinions. It’s like polling the audience isn’t it? So, when somebody comes in with a question, you’re gonna get not just Phil and I answering, but you’re gonna get this whole slew of people jumping in. Going, I did this, this is what I did and then whatever worked for the people in the past now you can start to go, oh yeah, this doesn’t really apply in this situation but man I didn’t even think about this over here. It’s like polling the audience and that has the absolute most effective way of answering it.
Phil: Yeah, if you ever walk into your vendors and you, just listen, pay attention to the conversations that are taking place amongst contractors and big box stores. If you want to be normal and part of the ninety plus percent of people, go in and have one of these conversations that are full of complaining, whining, comparing. Comparing doesn’t end, guys love to compare. How’s business, is the type of question that people throw out because they really want to hear: “Are you doing more miserable than what I’m doing? Are you doing bad?”
Because if you’re doing bad I’m gonna feel really good right now, and that’s what people do to each other. They ask this question as if there’s some sort of authenticity or genuineness about asking it and there isn’t, it’s just a way to manipulate how we feel about ourselves. When you free yourself from meeting that validity, that validation of comparing of what you’re, how you’re gonna feel based on how everybody else is doing, you take ownership of your business and your life and you take it to the next level. You start walking into these places and you hear the chitter chatter and you think great, you guys waste your time on these meaningless, really meaningless conversations.
I’m focused on business and if you’re here to show up and talk about solutions and answers and growing and achieving success, then that’s what I’m here for. If you surround yourself with people that are focused on that? That’s what you will achieve.
Stan: Now, here’s a little bit of hard love, Phil, and this is gonna turn some people off and I don’t care, OK? The reason if you’re watching this, the reason if you don’t feel successful, is because of you. It’s because of you, absolutely yourself, look in the mirror and you have limited yourself. It’s the choice, it’s the decisions, it’s nobody else’s excuse out there at all in any way, shape or form. What I want you to do is, I want you to, when you see super successful people are you jealous of them?
Do you hate him a little bit? Or are you happy for them? Are you envious of them? Are you glad that they’re there because they’re a motivator to you? When I see super successful people, that have the homes, that drive the cars, I’m like, “that guy made it”. And that tells me that, that guy is my motivation, if he can do it I can do it. Because that guy has got two hands, he’s got one heart, one head, two eyes, two ears.
He’s got every single thing that I have, he’s just made decisions that I haven’t made. But that doesn’t mean I still can’t make those decisions, it means I can make those decisions, it means I can get to where that guy is because if that guy did it, I can do it too. I am not going to limit myself. I am not going to be the biggest detriment to my own success, not going to allow that to happen and you shouldn’t allow that to happen, but it starts by recognizing it. What step are we on now Phil?
Phil: This is the last one.
Stan: OK. This one kills go for it.
Phil: Well look, whether you’re doing this consciously, undercutting and underbidding jobs or you’re doing this totally unknowingly because you just simply don’t have the understanding of your numbers, either way you’re going to die a slow death in your business. If I was gonna have my business collapse and crumble, I would much rather have it happen overnight, slowly is painful. I will say most people are probably doing this more out of just not taking the time to understand their financials and their numbers and when the seasons are good and cash is flowing readily.
This can be happening completely unnoticed because there’s always cash in the bank. It’s when the season starts to slow down and or you get to the year end and your accountant tells you, you made sixty thousand dollars in profit and you have two thousand dollars in the bank account, you’re like wait a minute where’s all the profit? And we talk about that, we go through this in detail, your bottom line is what you’re trying to protect. If you had a football team, you know your offense is trying to protect the quarterback to give them enough time to make the pass; your quarterback is your bottom line.
That’s what you need to build a shield around, and that shield is built up of the knowledge of these: what’s in your financial statements, everything from how much you’re paying to rent, to insurance, to hourly wages, to how much time gets wasted loading and unloading your truck, how much material you’re wasting, how much material you’re handling twice because you pick it up, load it in your truck, unload it at a job site, reload it when it’s done. I mean you’ve got to be thinking of all of these things. We’re gonna tell you how to systematize it how to make it, so that you have a plan in place to look at all of these numbers on a regularly scheduled basis and correct them before the problems show up, so you stay on top of your bottom line and you protect it.
Stan: Phil you said something that is a personal pet peeve of mine, and one of the reasons I stopped reading books or listening to books on Audible. Because I got sick and tired of all these business authors talking about “systematize your business, systematize this, and systematize that”. What is that system Jack?! And they don’t tell you, they just like to regurgitate crap that you can’t actually implement within your business, but that’s the difference that we do. We actually have the system, we’ve actually walked through a sales pipeline system. We’ve actually walked through
We actually have the system, we’ve actually walked through a sales pipeline system. We’ve actually walked through system after system and said, “Here it is, we built it and we’re handing it to you. “It’s not saying create your own system when you don’t know what the system is, it’s “here it is, put it in your business, it’s plug and play”. Stick it in your business and build your business that way.
Undercutting and underbidding project is chronic within this industry. Landscapers chronically undercharge, you will see me I’ve had videos on how to build retaining walls, videos on how to bid mulch, and half of the comments are like, “you’re charging way too much, oh my God I coulda did that for two”. I won’t, my guys will have the best pay in the industry, they’re gonna use the best tools in the industry, we’re gonna have good equipment.
But we’re going to be able to tear stuff out and start all over again without charging the customer a single nickel for that. If you think you can do that and charge two hundred dollars, you can’t, it’s as plain and simple as that. It’s not going to happen, underbidding and undercutting projects is chronic. These guys watching right now you probably are part of that problem, where you just don’t understand how much money you are really worth. You’ve got to start raising your prices, stop leaving money on the table, stop doing that, that’s what it’s called leaving money on the table Phil.
Phil: That’s exactly what it is. There’s money to be had and you’re not getting it and you somehow think that the next job down the road, is where it’s at. We’re rushing and rushing and rushing to get to these other jobs, and we’re throwing out prices that don’t match and that we can’t do and then we’re somewhat, we’re proud at the end of the day. But it’s like, wow, look how much revenue, revenue, revenue, the whole emphasis is on revenue. I’m gonna be a million-dollar company. I’m telling you, if you focus on that number you will be, you’ll be a million dollar out of business company, because you will drive there and drive there.
You can look at the end of the year and say I doubled my revenue last year. So the next time that conversation has taken place at Home Depot or at your vendors, you can be like, I doubled my business last year, and you can sell that and spin that however you want. I will tell you the one thing that never ever lies and that’s math, numbers do not lie. They tell the truth. When you print off those financial statements, when you get to the end of the year and everything is added up that is truth, it’s either cash in the bank or it’s not. And if it’s not, go address that problem.
I will say across the board, the most wise piece of advice for anybody, if they’re ever gonna just take one thing from us: raise your prices. I can almost bet your prices have to come up. It is pretty much never that somebody comes to us and I’m like, whoa you got to lower your prices, you’re making too much money here! That’s not the case. You’ve got to raise your prices.
Stan: Yeah, you won’t hear me say that either, Phil. I want to go back and develop this idea of leaving money on the table, because a lot of guys don’t understand this concept. What it basically means, is how much can you raise your price and still be just below the next guy? Because that is where you really want to be at. Here’s a real-life story that I told you before and some of these guys may not have heard it.
So I had a pond cleanup project that I was gonna do for the state, it was a decent project I bid it at fifty-five hundred dollars. I really wanted this job. Good profit in it, it was early spring when it got the guys going and everything rolling and put some decent profit in my pocket, OK. The state had to then go out and get multiple bids, this process took about two months roughly, give or take. Well by the time that two months came up and they said,”Hey Stan, we want you to rebid this project, I had followed my own routine of making sure that I had built up my schedule with bread and butter projects OK.
So I had a plum full schedule and this is the exact same job, nothing changed on it, it originally bid it at fifty five hundred .I turned the job, the bid into the state, the state says, all right now we’re getting multiple bids, rebid it using this formula. So I took my calculator and I multiplied fifty five hundred times three, I just hit the times three button and it came up like seventeen thousand dollars, seventeen five or whatever and I turned that bid into the state and the state kind of looked at me like. Really?
And I’m like yeah. Yep, I didn’t even blink an eye, I’m like here’s my bid now, seventeen thousand dollars, same job that I wanted and would have made good money at fifty-five hundred dollars, it went through the bid opening process which means that I am allowed as a consumer to watch and look at everybody’s bids. The next guy came in at thirty-three thousand dollars for the same job, Phil. Now, I was like yeah. I got the job at seventeen thousand I literally just made like fifteen thousand five hundred dollars in profit for a one day project, for three guys and a wheelbarrow.
OK, that’s what the job was, three guys and a wheelbarrow right? And then I stopped and I went, oh crap I literally could have made another thirteen thousand dollars on this job if I would have bid it at thirty-two thousand dollars. I would have made enough money to cover my own personal expenses for almost the entire year on one job, one day. I left thirteen thousand dollars on the table.
The next guy came in at thirty-three thousand dollars for the same job, Phil. Now, I was like yeah. I got the job at seventeen thousand I literally just made like fifteen thousand five hundred dollars in profit for a one day project, for three guys and a wheelbarrow. OK, that’s what the job was, three guys and a wheelbarrow right? And then I stopped and I went, oh crap I literally could have made another thirteen thousand dollars on this job if I would have bid it at thirty-two thousand dollars. I would have made enough money to cover my own personal expenses for almost the entire year on one job, one day. I left thirteen thousand dollars on the table.
Do you see where understanding your prices, now this is a rare occasion, but don’t leave money on the table. Don’t listen to those guys that are going, oh I could’ve done that job and you know and done it for two hundred dollars. Yeah, you go ahead, I’ll do it for two thousand dollars and I’ll make money, don’t do that, don’t, don’t, don’t, don’t be, don’t be like that guy.
Phil: .Yeah, it’s just gonna lead to pain when you have that, when you have that money left out there that you could have and especially the underbidding. Don’t feel that pain, and I can’t tell you how many guys take the job, get the job, know that they’ve underbid the job, get halfway through the job. I will tell you I don’t even know, have words for contractors that walk off projects whether they are making money, and they walk off a job. That to me is such a blow to integrity, to professionalism, to our industry as a whole. It makes it harder for everybody, and I’m not saying stay on, I’m saying don’t lose money in the first place on those projects. So, take a look at what we’ve done with through the webinars. They’re just a wealth of information for how not to do that.
Stan: Well one of the things too, that contractors will do when they know they’re losing money on a job Phil, is they will cut corners to try to make up for it. And what they’re really doing is they’re cutting their reputation, they’re destroying their ability, they’re losing all of the word of mouth. Instead, what I’m going to challenge you guys to do, if you take on a job and you’re not making a lot of profit on it don’t cut any corners.
Keep your quality up and just grin and bear it, bend over and take it and then on the next job, learn from it, analyze your numbers, understand what you did wrong and then in the next job bid higher. But at least you still did good quality work so that this customer over here is going to give you good word of mouth, good referrals. Take pictures, you can show what you did, even though you may not have made a penny on the project, you didn’t lose that reputation. You still with me, Phil?
Stan: Closing thoughts. Go for it.
Phil: You’ve got to get dialed in and connected with a mentor and a peer group, those two things are absolute, surround yourself as Stan said with five great people that are where you’re going to be at. The temptation is to fall in with people that we can compare ourselves to and be better than, or tell ourselves we are better than, because it makes us feel good right now in the moment, and it satisfies that need of significance. We’re important, we’ve doubled our revenues, we’ve done this, we’ve done that, none of those matter. I mean they matter, they’re important if you can show that your bottom line and your cash in your bank supports all of that, all those things are great and we can help you get there.
But if the cash isn’t there, and if you’re struggling on the inside or if you’re struggling with stress and the running around of figuring out a way to do all these new jobs that you’ve sold but haven’t sold at the right price, stop that. Put the brakes on and stop and evaluate where are you now. See things for, as they really are, don’t see them worse than they are, don’t look at the problem and make it worse than it is. But you can’t go out to your garden and say there’s no weeds, there’s no weeds, there’s no weeds. You’ve got to say nope, there’s a weed. I’m gonna pull it and here’s my plan to prevent future weeds from growing. You have to address the mess that you have, if there is one to be done.
Stan: So, just for the guys watching right now, you never stop having mentors, Phil has a mentor, you have a whole mastermind group that you work with outside of Dirt Monkey University to develop very specific skills and traits. I have a group of mentors that I work with in YouTube, one of them is Greg, he owns the toy freak channel right now, but I also have YouTube consultants. So for YouTube, I have a group of mentors that I work with, e-mailing this morning, how do you do this?
How do you do that? How do you handle this? Because for me YouTube is not part of landscaping, it’s not part of my standard business and so I, to understand it better I go to experts that know it way better than I do and I use them as consultants. So I have two consultants through YouTube and one outside of YouTube. I have three people that I work with just to understand this whole YouTube community guideline, posting videos, getting stuff up, understanding what I should be doing, what I shouldn’t be doing, things like that. You never stop having mentors; as you develop your business you just have different mentors for different areas, key components that you want to develop.
Phil: Yeah and ask quality questions. Make sure that you’re putting the time into coming up with, creating really good quality questions about your business. Don’t be so eager to just complain, or put out, I can’t get any help what do I do? Come up with some real quality questions that you can ask of your mentor so you can get quality answers. The better questions you’re asking of yourself, they will cause when you put questions in your mind, your brain will subconsciously give you an answer. If you tell yourself, why does this always happen to me? Your brain is designed to give you an answer, it always happens to you because of this, so if you ask yourself, how can I improve? How can I take steps today to be better off financially tomorrow? You will start coming up with better answers based on those questions.
Stan: Right and to understand your numbers better, go check us out at the Dirt Monkey University. We’ve got the bidding and estimating series, it’s available to our mastermind group for twenty bucks a month, but it’s also available to the general public. But each single webinar is priced you know differently, because you’re not part of our mastermind group. So you get it all as part of our mastermind group, but let us know in the comments down below about the reviews. Also, I want to hear about mastermind groups that you guys have used, because I’m still looking for mastermind groups. I am still looking to take everything to the next level, so I want to hear from you guys what mastermind groups do you use?
I personally, for speaking and engage for speaking and engagement with my customers, I use Toastmasters. I’m an avid member of that; I go to that every single week without fail. It’s a phenomenal group. I use that as a mentorship group, in the past I’ve done it for networking, but also to help with speaking and to understand basic business principles. Phil, I know you’re a member of a couple different mastermind groups. We have one specifically for small businesses over at Dirt Monkey University where we take guys that are landscaping, lawn care, concrete work, outdoor services and we help them with bidding, estimating, marketing, their websites, every component that helps them get to the next level. That’s what our focus is together at Dirt Monkey University’s mastermind group.
Phil: Yeah, let us know how we can help you, we’d love to get your questions. We’d love to get your comments, your feedback, just let us know what we can do to help you. Thanks again.
Stan: God bless. Go get ’em.