The digital world is chock-full of information for contractors.
Try this, do that, download here.
You have so many questions, but where do you go to get answers?
I want answers to those same questions, too. So I went straight to the source to tackle one of the biggest questions I saw contractors asking:
“How can I increase my revenue?”
I asked 15 Industry Experts what the biggest roadblock they see stopping contractors from reaching their full earning potential.
You’ll be just as surprised as me to find out what they had to say.
In this post, you’ll hear from some of the brightest minds in the industry, including:
- Tom Reber, Founder of The Contractor Fight
- Randy Stanbury, Chief Inspiration Officer at 4 Level Coach
- Mike Claudio, Owner of WinRate Consulting
- Jim Johnson, Head Coach at The Contractor Coach Pro
- Vicki Suiter, Owner of Suiter Business Builders
- Danny Kerr, Co-Founder of Breakthrough Academy
- Kyle Powers, Coach at Tony Hoty Training and Consulting
- Dave Yoho, President at Dave Yoho Associates
- Mitchell Fullerton, Marketing Director at The Aspire Institute for Contractors
- Dominic Caminata, Co-Owner at Grosso University
- Jim Ahlin, Co-Founder of Roofer Marketers
- Dominic Rubino, Owner of BizStratPlan
- Ryan Groth, Chief Sales Engineer & Coach at The Sales Transformation Group Inc.
- Rodrigo Silva, Marketing Director at The D2D Experts
- Dave Sullivan, Creator of The Roofer Show Podcast
“The biggest obstacle to earning more all starts with the 6″ between your ears. Your income will be determined by your mindset. Want to start improving your mindset…start flipping the negative thoughts about money into thoughts that will strengthen your mindset. Income will increase.”
“The biggest challenge holding contractors back from their full potential to ultimate wealth and freedom is the ceiling of growth they have self-imposed. This happens so naturally and innocently that it becomes an easy trap that far too many contractors fall into.
Here is what I see as the typical road that leads to the self-imposed ceiling to growth for many contractors.
- You have a skill in one or more of the trades which for obvious reasons leads you to believe starting your own business, to be your own boss, was the obvious thing to do.
- There is plenty of work out there, so you are busy from the start in your new business doing what you love on the tools as a skilled technician.
- You quickly realize there are 50 more things you have to do to as the owner to keep up with and manage the business than just being on the tools doing what you love. At this point frustration and overwhelm starts to set in.
- You now find yourself well planted on the “Hamster Wheel” of your business running and running everyday getting nowhere fast. In fact, you often feel more and more behind as quoting, invoicing, collecting money, and so on piles up.
- You likely begin missing appointments which forces you to begin managing customer upset. Scheduling starts to get out of hand amongst the 50 other things you are desperately trying to keep up with.
At this point, you decide with conviction that you do not want to grow as growth only equals greater problems and a life of more frustration, overwhelm, and chaos than you can already handle.
BOOM!! There you have it, folks, you have reached your self-imposed ceiling for growth. And a lifetime of never realizing your full potential for wealth and freedom.
This ceiling of growth is the exact reason why I made it my mission to help as many contractors as I and 4 Level Coach can bust through this ceiling. I couldn’t stand watching guys work their ass off all their lives to end up with a busted-up body and no value in their business. When the end of the road came, they sadly realized, without them, their business was worth nothing. A brutal story I saw play out too many times for too many great guys that deserved so much more. They just needed a little guidance and a road map with a few new strategies and tools to help make it happen. ”
Watch to read more? Check out their full blog post about how to reach your full earning potential!
“What is the biggest roadblock stopping contractors from their full earning potential? Impostor syndrome. Imposter Syndrome is a psychological pattern in which individuals doubt their skills, talents, or accomplishments and have a persistent internalized fear of being exposed as a “fraud”.
Sound familiar? It’s something I deal with regularly. Especially every time I “level up” a little. Bigger clients, bigger stages, bigger opportunities all ignite this fear in me that I am not good enough. The ironic part is that it is legitimately a syndrome, which means if you are feeling it, you are likely doing everything right. If you feel like you don’t measure up, likely, you are just telling yourself a story that you don’t have the skills necessary to handle or deserve what’s in front of you. The best thing I have found to help me overcome this is to look back and see what I have accomplished. If you are reading this, you have a 100% success rate at overcoming the most challenging things that have ever happened to you.
Celebrating and acknowledging those wins will put deposits in your confidence so you can learn and grow through the challenges in front of you. You can’t have a 100% WinRate while also not being prepared for whatever you see coming… Go out and dominate today and stop letting your internal narrative be your limiting factor. Start seeing yourself as the winner you have proven to be already!”
“The biggest roadblock I see stopping contractors from reaching their full earning potential is not knowing the recipe to achieve that potential. Contractors are normally good at 1 or 2 tactics of their business like sales or workmanship but don’t understand how to develop an overall strategy to position themselves to work on their businesses instead of in it. In other words, they don’t have the capacity to achieve their full potential.
The one thing they could do to maximize their revenue would be to step back for a minute and think. Think about how they can grow future leaders in their business or as we call them “Champions” and what aspects of their business they can automate. Each of these will create more time to work on their business, not in it, affording them the ability to reach their full potential.”
“In my opinion, what is limiting contractors from reaching their full potential is not having clear goals.
- Goals for how much they want to be making personally and in the business;
- Goals for gross profit margin
- Goals for each of their team that defines the criteria for success in each position
The ONE THING they can do to maximize revenue is to know how much they want to make (set a goal) and then work backward – starting with the end in mind. If you want to make $2M in revenue, how much do you have to bid? If you have a close rate of 25%, then you’d have to bid $8M in work in a year. That’s about $665K a month. If your average job size is $350K, then you’d need to close roughly 2 jobs a month. Now you just broke the proverbial elephant into bite-sized pieces. Then the questions are this… “ How will I generate that work? Who is the right customer to pay attention to? What projects do I have that will fill that goal?” THAT is how you get more strategic and maximize revenue. Here is a link to a blog post I did on this. Chapter 2 in my book, The Profit Bleed, is all about how to maximize sales.”
Check out Vicki’s guide for What to Track in Sales!
“Here is one truth that I’ve seen proven countless times: what got you here probably will not get you there. The type of work that will take to grow your business to the next level is very different than the type of work that has gotten you to this point. I often see entrepreneurs spending less than 10% of their week working on tasks that truly make an impact on moving the business forward. Menial tasks such as getting materials for crews, dealing with customer complaints, getting vehicles fixed, etc. will not allow you to focus on the priorities that impact growth.
Working on tasks that influence long-term results requires methodical and intentional planning. Yet, I see very few business owners spending a focused two hours each week to review results, set goals for the week, and outline weekly action plans to achieve their goals. It is this disciplined “Goal Setting and Review” process which has been a staple in the rapid growth of hundreds of companies we’ve worked with.
Entrepreneurs who are serious about profitably growing their trades businesses must follow this weekly ritual to spend a focused two hours at the beginning of each week mapping out goals and priorities, without distractions of the day-to-day.”
“As someone who consults and trains on the marketing process in the remodeling industry, I feel the biggest roadblock that prevents home improvement companies from reaching their full potential is the failure to establish a concrete plan. For what you ask? A great number of things I submit to you. Including systems, processes, minimum performance standards, and key performance indicators. Even in those cases when the systems and processes are in place, there are rarely any firm budgets in place. It is essential to understand that after standard operating procedures are established, there is a need to clearly define them to your staff and regularly measure the progress. It seems that even those companies that have outlined a solid game plan and budget are usually missing the last part, they don’t manage the expectations well or hold their staff accountable to the results.
I have worked with mom and pop shops that have not yet reached a million dollars in annual revenues as well as industry giants with over 200 Million in yearly sales. Regardless of size or sales volume, they all seem to lack a carefully crafted plan. Most get some part of the bigger picture right but often miss the mark in one area or another. You can have the perfect plan but if you do not implement and execute you will never attain it. For the companies that do lay everything out perfectly, inspecting what they expect is usually the problem. If staff members do not clearly understand what they need to do and are not managed to the expectation, rarely if ever will they achieve it?
Plan- What is the goal for the next 30 days, quarter, 6 months, or the year?
Systems/ Process- What tools, such as technology, scripting, and resources will the team need?
Practice- I see so many teams that have the right systems in place, but they never practice in advance, so when they are in-the-game, in-front of the prospect, they are not at their best. Marketing teams and call centers should have a daily ritual of practice and role-play.
Minimum standards- What is the minimum target that a team member must hit to stay a member of the team? Many times, I see teams with employees that are grossly underperforming, yet there is no action plan to coach them up or coach them out! The usual reason for this is the manager’s inability to recruit and just out-right apathy when it comes to taking action to remedy the situation.
Budget- This is a big one. I see a high percentage of managers that have no idea about the financials of their department. If your companies goal is to have a marketing percent lower than let’s say 15% fully loaded and the canvass manager has no idea what part his department plays in reaching that, how can you expect him to achieve it?
The good news is each one of these things is relatively simple to address. Start with a team meeting and have your managers help develop these steps. When the team is involved with the creation, they buy-in naturally. Once you come up with how you are going to execute, holding weekly or bi-weekly meetings with your managers is critical. Are they holding team members to metrics needed to hit the plan? This same accountability structure needs to be in place for all department heads to manage their direct reports. Anyone under-performing needs to be placed on a performance improvement plan designed to coach them up or coach them out. Last but certainly not least is gauging attitudes. Anyone on the team who has not bought into the culture or demonstrates a negative attitude needs to be weeded out quickly. When you have the right people doing the right things within the framework of your plan, your business will flourish as a result.”
“At the end of 2019, optimism was abundant among businesses. Many were forecasting their most profitable year to date. Then COVID-19 hit. Employees were laid off or furloughed, shows/events, and canvassing operations were shuttered. Negativity was pervasive.
However, this is a resilient industry and most companies bounced back strong. By August, many businesses that we spoke with were on pace to meet their year-end revenue projections or surpass them.
But optimism can be a two-way sword, and it can cause you to overlook potential danger areas in your business. The biggest concern facing companies right now is the increase in backlog, which is detrimental to cycle time. To give you an example, the cycle time of one of our most profitable clients is regularly 45 days – – it peaked at 95 days last month. They are working diligently to bring this number down, as the immediate effect is an increase in rescission.
Moving forward, the one thing that companies can do presently to maximize their revenue is to implement a scientific process in every area of their business: sales, marketing, recruiting/hiring, management, and installation. A scientific process means that you adhere to a systematic approach. Yes, you can tweak elements of it as conditions change, but it assures that your employees are following the rules you set out for them. For example, a sound selling system is based on steps. The number of steps is irrelevant. The process is based on how prospects think, feel, and tend to act.
More about Dave Yoho Associates:
Dave Yoho is President of Dave Yoho Associates, the oldest, largest, and arguably most successful consulting firm that works with home improvement companies, remodelers, and home service organizations. They have a team of Account Executives that perform full-service consultations, run sales meetings, and assist with hiring and training. They also sell educational audio and video products designed to help your business immediately. To learn more about their methodology, download the first recording off of their best-selling package, The Science of Successful In-Home Selling.”
“As a business coaching and consulting firm with specific expertise in assisting residential builders become equally skilled at operating their business as they are at their trade, we repeatedly see these factors keeping them from realizing their full earning potential;
1) Revenue Focus – revenue really does not mean anything and yet it is the ‘badge of honor’ that most builders wear to score the success of their contracting business. It would be much more appropriate to put the focus on GPD or gross profit dollars. After all, it’s not what you make that matters. It’s what you keep. Change your focus from revenue to gross profit.
2) Incorrect Pricing Strategy – most builders use a commodity or retail pricing strategy that drags them into competitive bid situations. We see this as a ‘race to the bottom’ – GC’s give up their duly earned margins just to win the work. A better approach is to instill a service pricing strategy because that is what remodelers and home builders provide. Work toward differentiating from the competition and put the focus on those things you do that make you truly ‘special’ and are not offered by other builders.
3) Business acumen – most builders we encounter are excellent tradespeople and craftspeople, but they don’t spend much time improving their business practices. This leads to ‘hoping’ that the business side of things will work out, but it generally doesn’t. ‘Hope’ is not a business strategy. Instead, spend time on improving your business practices to understand how the business model, job mix, and other factors affect your profitability.”
“My name is Dominic Caminata, Owner and Founder of Grosso University. We offer the most comprehensive training and business development platform in the Home Services Industry. We currently consult and network with hundreds of contractors all over the world which provides us with a sound perspective as to the challenges most contractors are facing. Our entire program at Grosso University is built upon the foundation of profitability and educating business owners what it takes to achieve the right margins. We always say, “Volume is for vanity and Profit is for Sanity!” When helping companies achieve maximum success and profitability, we see patterns and recurring challenges.
The biggest roadblock we see preventing contractors from their full earning potential is the failure to offer financing and knowing how to sell it properly in the home. Contractors who rely solely on cash buyers are reducing who they can sell to by 60%, they are shrinking their average sales significantly, lowering closing percentages and forcing salespeople to sell on low price leading to narrow profit margins. Contractors should first aim to offer a robust menu of financing options and then get expertly trained on the artform of selling financing in the home. That alone would transform their business immediately! Grosso University offers the training and the financing tools for contractors to maximize selling financing to begin growing a more profitable business right away! We encourage contractors to reach out to us for a No-Obligation conversation and we will gladly show how we can take their business to the next level!”
“The biggest roadblock that I see stopping contractors from earning their full potential is not having proper systems and processes in place in their business. Well defined marketing systems, sales systems, production systems, long-term customer relationship systems, etc.
With proper systems and processes, a contractor can focus on building their business and not working in it. Without well-defined systems and processes, it is very difficult to grow your business. When you get caught up in the day to day whether it is a fire to put out at a job site, or an A/R issue, it is holding them back from effectively moving their business forward.
The one thing that contractors can do to maximize their revenue is to focus on their brand. People buy from who they know, like, and Trust. Their brand allows customers to know what to expect from their company, and how they are distinguished from their competitors showing that they are the better choice. A strong brand allows a contractor to charge more for the same service because of that trust.
Think of the grocery store. There are generic versions of many products that are exactly the same as the name brand at a fraction of the cost. Many are made in the same factory and they just put a different label on it.
So, why do people buy the name brand vs the generic when it is the same product and it costs more? They trust the brand. Become the trusted brand in your area, and you will reap the rewards.”
“The biggest roadblock stopping contractors is the fact that they are operating reactively. Too often they don’t give themselves the chance to get ahead of things. It might seem difficult but really the easiest way to do this is to put a strategic plan on paper. This doesn’t have to be complicated the most important part is that these goals for what they’re trying to achieve are written down in a way they can refer back to it. Then it’s as simple as picking away at it day by day and week by week.”
“The biggest challenge that I see contractors face is their inability to lead other people effectively. Many contractors really struggle to delegate, trust automation using technology, and eliminate choices and paths that distract them from gaining traction.
The fastest way for contractors to get past this is to learn how to get people to rally behind them toward an amazing vision and mission. If contractors could get an idea in their mind that gives them goosebumps, tears, and adrenaline all at the same time, others will connect with that vision as well. From there, delegating just about anything is possible. Secondly, contractors need to implement technology to automate tasks that the company is doing almost every time to produce revenue. Lastly, it’s important to eliminate thoughts from your brain that aren’t necessary to help you function at a higher level. Solving the problems that are losing you the most money is always first, typically this is a short term solution. From there, look further out into the future and solve problems that will affect revenue down the line.”
“The biggest challenge I see contractors having is not learning how to scale properly. Having good marketing and branding is not enough; having the right people trumps everything. Strong recruiting and training skills are paramount for success, as well as authentic leadership.”
“Revenue is Vanity. Profit is Sanity. Cash is Reality.
If you’re not making money at $1Million you’re not going to make money at $10Million.
So instead, focus on making more money with less risk. This will result in more free time, less stress, less chaos, and more control for you.
Know your numbers, have solid systems and processes in place, have trained A players, then grow a profitable contracting business.
Before creating this post and receiving responses, I was sure that each individual would offer me a completely different response.
With the sales process being so intricate, I had myself convinced that in this article would turn out a 15 step plan for how contractors could increase their revenue.
Was I ever wrong.
To my surprise, these 15 experts narrowed down revenue management to just 4 simple areas:
2. Goal Setting and Planning
3. Systems Operations
4. Business Scaling
Are you a contractor wondering why you’re not earning as much as you think you should?
Go back to the basics.
How is your mindset? Are you setting reachable goals and plans? Do you have system operations that are supportive? Can you scale your business?
Sometimes, simple solutions can be the answer to your difficult questions.