What do we all want as contractors? We want to provide a good service and be paid for our work. Where does this process start? As we discuss on Episode 86 of The DYOJO Podcast, positive project outcomes start with a clear and consistent client intake process.
Overhead and Profit for the Contractor
The client intake process also initiates the data collection process. The gathering, interpretation, and application of solid data is critical to helping an entrepreneur make good business decisions. If you want to be profitable as an organization you must manage the project lifecycle sequences. We begin this discussion on The DYOJO Podcast Episode 89 as well as a series of articles on overhead and profit that myself, Ben Justesen, Anthony Nelson, and Ed Cross will be releasing for the in-print version of C&R Magazine.
Using A Letter of Intent (LOI)
Contractor's often discuss whether they should be charging for estimates. Some of the options include:
We talk rather frequently with contractors about this concept of the Letter of Intent or LOI. We will introduce this resource during Episode 89 and will go into further detail in the following episode.
The Four Modes of Profitability
What does the average contractor want?
Our competition as contractors isn't even necessarily with the market, but with ourselves. We want to grow our company by laying a foundation. If you want to be a profitable company, it's important to understand some of these concepts that lead towards profitability. So that's why we're tying a lot of this together, from:
I'm working on the first in a series of articles with C&R magazine that's going to touch on some of those elements of overhead and profit. My contribution, the working title is The Four Modes of Profitability for Contractors.
There's an infographic coming out from Restoration Industry Association (RIA) that will also be a helpful tool for contractors as they work through the process of developing and growing their team. Within that tool there are definitions and visual aides such as these two:
These resources are designed to help shorten your DANG learning curve and to build your company through those stages of profitability.
The Contractor's Fight for Survival
We have observed or participated in many companies that don't make it unfortunately, the Bureau of Labor Statistics estimates that 20% of small businesses fail within the first year and 30% after the second. You feel it right? You're in an all out battle for survival. You want to move from survival mode to scraping-by. At the end of your first year you get hit with this tax debt and renewals for indirect (aka overhead) costs such as your licensing, bonding, and insurance. You realize that to even scrape by as a business, you must charge more than you were charging. You're gonna have to think differently about how you're charging for labor, materials, equipment, overhead, and profit.
Every year is a fight to compete as a contractor, the average failure rate for businesses:
The DYOJO Podcast is designed to help you shorten your DANG learning curve. Going back to those statistics we talked about, which will be in the series of articles with C&R magazine. The mindset used to be that if you can make it past year three, you're probably going to be fine. But the statistics show that if you make it to the fifth year you're in the 50/50 club. 50% of the companies that started at a similar time are likely no longer going to be in business. And then if you push through to year 10, you're in the exclusive 70/30 club. Sadly, only 30% of entrepreneurs make it to the decade mark. Every year is a fight.
That's why we say you're moving from survival to scraping by, to having a fighting chance, and to competing. My latest book, How To Suck Less At Estimating, was written to pick away at some of those faulty foundations that regularly lead to profit sucking estimating habits. In doing this I'll try to break out those mindsets that are particularly helpful for the categories of professionals listed above which are (1) the aspiring professional, (2) the estimator, (3) the new manager, and (4) the business owner. By the end of this book and the course that soon will be coming with Restoration Technical Institute (RTI) you will have at least six elements that every estimator needs in their tool bag for success.
In this podcast conversation with Josh Zolin, I asked our guest if there was a recent business or leadership catchphrase that bugged him, without skipping a beat, the owner of the rapidly growing Windy City Equipment (WCE) in Phoenix, Arizona answered,
Yes! Give it your best effort.
This video is a snip of what will become The DYOJO Podcast, Episode 88. With our guests, Josh Zolin and Kelsey Isaacson. The video also introduces the article that will be released in Cleanfax Magazine titled Goals, Effort and Results, Developing Your Team. Josh wrote the skilled trades advocacy book, Blue is the New White and hosts a weekly podcast by the same name.
This thought-provoking question that Mr. Zolin dropped during our discussion has caused me to think through our understanding and implementation of EFFORT versus RESULTS in our local contracting company, ARES Restoration based in Puyallup, Washington. Josh continues, "This was a big mindset shift for me. Look, it's a good indication of character. But that's about where it ends."
In preparing for this podcast episode, which you can view on YouTube or listen to on Spotify, I did some research. I found an article called The Effort Effect from Stanford magazine. In addition to our discussion with Mr. Zolin, we're going to be talking about the research efforts of a professor of psychology, Carol Dweck. We will also review several quotes from other business minds on the topic of effort versus results including this one from Mark Cuban whom you may recognize from the television show Shark Tank.
“The one requirement for success in our business lives is effort. Either you make the commitment to get results or you don’t.” - Mark Cuban
It appears that Mark blends the concepts of effort and results, and to some degree they are inextricable. What Josh was trying to get at is that it becomes more of the "work smarter rather than work harder" mentality once you have a level of competency in your field. But, when you don't know necessarily what to do you can't just start out working smarter. As you develop your skills and abilities, you have to gather the pennies (see video below). Once you are proficient in gathering pennies, or whatever work you can find, they will eventually turn into nickels. Then eventually your nickels will turn into dimes and so forth until you are up-and-running to the point that you have quarters (better quality work).
Gathering pennies is a reference to a rather old video and article (see above) title The Five Phases of Business Startup. Distinctives of Business Startup Phase One include:
In this first phase of business, the entrepreneur is asking, "Where can we get our name out there with fairly low cost and high exposure?" Often, these opportunities are in the various networking meetings that not everybody likes going to.
“The best results are achieved by using the right amount of effort in the right place at the right time. And this right amount is usually less than we think we need.” - Tony Buzan
For The DYOJO Podcast, Episode 88 we consider this question from Josh Zolin and review several others, such as the one above from Tony Buzan, with Kelsey Isaacson, a successful realtor in Pierce County, Washington. It is important for people in a position of leadership to question whether what they believe, practice and reward is leading their team down the right path to achieving their shared goals. Dweck's research uncovered many interesting insights about goals, performance, and achievement which we will discuss in this episode and dive deeper into for the Cleanfax article. As people in a position of leadership, it is important to take a step back and determine, with brutal honesty, whether we are developing the right mindset and habits for success; both for ourselves as well as for our teams.
Please join us on Thursday as we help you shorten your DANG learning curve!
For the upcoming Episode 88 of The DYOJO Podcast, we have a conversation with a returning guest who shared a thought-provoking question that I believe all leadership teams should consider, “Which is more important, effort or results?”
Josh Zolin is an advocate for helping young people recognize opportunities for gainful employment and career development within the skilled trades. This passion is the impetus behind his book and podcast, both by the same name, Blue is the New White. As prominent as Josh has become as an author, podcast host, and speaker, he is also the owner of the rapidly growing WCE in Phoenix, Arizona where he is implementing the leadership challenge that he shared.
This teaser video gives you a glimpse of our discussion on the intersection between goals, effort, and results as you develop your team. Be sure to check out the article Goals, Effort, and Results: Developing Your Team by Jon Isaacson and published in Cleanfax Magazine.
In this content clip:
0:00 Josh Zolin drops a thought-provoking bomb
1:30 Psychology professor Carol Dweck weighs in
2:14 Kelsey Isaacson squares up with Mark Cuban
3:17 Pennies for your business growth
4:25 Join us for the 3rd Annual SOCKTember Competition
5:55 Curse words and question marks
Thursdays are for The DYOJO Podcast - helping you shorten your DANG learning curve for personal and professional development.
This content is sponsored by the new best-selling book, How To Suck Less At Estimating: Habits For Better Project Outcomes by Jon Isaacson.
Join us for a LIVE discussion and Q&A regarding career and leadership development in the skilled trades
This event will be curated by:
Josh Zolin, renowned author, speaker, contractor, and podcast host of "Blue Is The New White"
See more - blueisthenewwhite.com
Jon Isaacson, medicore author, contractor, and podcast host of "The DYOJO Podcast"
See more - thedyojo.com
Career & Leadership Development for the Skilled Trades
The Plan Thus Far:
Idiots At The Helm: A Discussion About Career Development & Leadership Growth In The Skilled Trades
Our hosts will discuss the questions below for about 45 minutes. They will keep the Zoom chat room open, and try to check on that periodically. At the end of the planned discussion, we will leave about 15 minutes for Q&A direct from the chat room or people that email and comment prior - firstname.lastname@example.org
Questions for our hosts:
Zoom Invitation for this Event
Jon Isaacson is inviting you to a scheduled Zoom meeting.
Topic: TDP Presents: Idiots @ The Helm (LIVE on Zoom)
Time: Jul 7, 2022 12:00 PM Pacific Time (US and Canada)
Join Zoom Meeting
Meeting ID: 847 6912 3891
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Then episode 84 of The DYOJO Podcast is for you. We will discuss many of the mindsets and habits that will help you lay a strong foundation for career growth and help you navigate the open seas of leadership development. We will discuss how to think outside of the box as well as some tips to structure your approach to management that will help you gain personal and professional ground on your goals.
I intended for this episode to be a recap, similar to those of our good friends at IAQ Radio release on a regular basis. But, I couldn't help myself from tweaking the format and merging multiple prior episodes into one semi-coherent semi-new episode. We draw from The DYOJO Podcast episodes 12, 15, and 22. I mention both Organizational Physics and Designed to Scale by author Lex Sisney.
Our guests and shoutouts for this episode include:
THANK YOU TO OUR SPONSORS:
Restoration Industry Association (RIA)
Restoration Technical Institute (RTI)
Office Services by Brandi
Institute of Inspection Cleaning Restoration Certification (IICRC)
THURSDAYS ARE FOR The DYOJO Podcast
INFOtainment to help you shorten your DANG learning curve. New episodes of The DYOJO Podcast are released on Thursdays via video through YouTube and/or audio is distributed through platforms such as Apple, Spotify, Google, etc.
READ MORE in The DYOJO Blog
Additional Resources from The DYOJO:
The old-new may hold the key to help you unleash better mindset and habits for the coming year.
Our kitchen was remodeled by a well-intentioned prior homeowner. To date, I’ve been able to remedy many of the functional discrepancies, such as shaving down the sink cabinet to bring our farmhouse sink to level with our solid surface countertops. But at least weekly, some of the shortfalls in quality instigate conversations about our future plans.
Thankfully my wife and I are [mostly] on the same page with regard to pragmatism, as we both understand in the current market an overhaul of our kitchen will not net a return that offsets the expense. I couldn’t wait to share my revelation with my wife and family. The re-org idea had been chirping in my ear for several days, and slaying the dragon of kitchen dissatisfaction in this simple way was all the more rewarding.
Read MORE in the article The Old New published by Restoration and Remediation (R&R) Magazine.
Jon Isaacson, The Intentional Restorer, is a 19 year veteran of the property restoration industry and a business coach through his organization The DYOJO.