"Don’t mistakenly think just because someone is doing $10M or $15M in sales a year that they’re making a boatload of money."
I've been asked why the focus of The Wealthy Contractor is about making more money - while working less.
It’s simple really… the majority of home improvement business owners I meet are working way too hard for far too little and they/you deserve a pay raise!
I hate to admit this, but in 2003, 2004 and 2005 I had a business that was not making enough money to pay me and my partner what we deserved for the work we were putting in and the risk we took on.
Some months, we wouldn’t get paid.
Some months not only wouldn’t we get paid, but we had to put money into the business to pay everyone else!
We were working hard and serving a LOT of customers. We were building systems and processes. Investing in people, investing in advertising, training, software etc. etc.
We were even on the QR Top 500 List in each of those 3 years, so to the outside world, it looked like we were rocking.
Thinking back, I was not being very smart (actually, if I could go back to my younger self, I’d slap him over the head, and tell him - “don’t be stupid, you moron!”).
My biggest problem was - I was too focused on the topline revenue and not focused enough on the bottom line profit.
But it was OK I told myself, because we were BUILDING a business.
A business that would [eventually] make us millions.
So, keep going, borrow a little more money, it’s okay, we’ll get it back in multiples.
This is a common mistake.
I’m seeing it all over the industry right now with companies big and small. With the economy as good as it is, people are selling a lot of product. Doing big numbers. Investing in people and advertising and showrooms and infrastructure.
But here’s the thing… and believe me, I learned this the hard way, if they/you aren’t making (or can’t make money) at $1M, chances are real good they/you won’t make money at $2M, $5M or even $10M.
Read that again.
Sure, they can brag at industry events that they did $6M last year, and it will impress people… used to impress me.
Today, I don’t care as much about how much you sell, I want to know how much you keep.
- What you keep is going to set you free.
- What you keep is going give your stakeholders (in most cases your family) the return they deserve.
- What you keep is going to give you peace-of-mind, and let you sleep at night.
- What you keep is what’s going to keep your business thriving when this economy turns.
- What you keep is going to keep you, your family, your team - those you care most about - thriving.
- What you keep, properly invested in people and process and other assets will give you more resources, more options.
You see, the more money you have, the more options you have. And I like options, and I want you to have options.
So here is an exercise that I do often to keep me on track and working towards my own goals. I think it’s particularly useful because it keeps you focused on what’s important... to YOU.
- What do you WANT?
Get out a piece of paper, dig deep and write down what you really, really, really want. It’s okay to want a big house, cars, vacations, toys, income producing assets, etc. It’s okay to want to take time off away from your business so you can pursue whatever your heart desires. Nothing wrong with ‘wanting-what-you-want’.
- How much is it going to COST you to have what you really want?
That’s right, put a price tag next to everything you want. How much money do you need to make every month in order to get what you really want. How much money do you need in the bank, invested, working for you, to live the lifestyle you want.
- Then, with both of those questions answered, reverse ENGINEER your business so you’re profitable enough to fund your ideal lifestyle.
Now, this may be oversimplifying. It’s not easy to do this you’re thinking. You’re right.
But, if you’re anything like me, unless you start thinking this way, it’s going to be real hard for you to ever get what you really want.
Look, I get it, we’re entrepreneurs. And as entrepreneurs we are always pushing, driving, striving for more. More leads, more sales, more money.
It’s in our DNA, we can’t help it.
But, let’s make sure that our ego doesn’t ruin our lives.
Your kids don’t care if you did $2M, $5M, or $50M in sales, if they never see you.
Your spouse doesn’t care how much you sold, if you get sick or depressed because you’re so stressed out.
Your team, pushed to their limits, with a stressed out, in-debt tyrant, will never live up to their full potential.
Focus on PROFITABILITY - make more money so you can live the life you’ve always imagined.
Focus on PROFITABILITY - so you can employ the resources you'll need so you can take time away from your business.
Focus on PROFITABILITY - so you can spend your time in relationships that move you forward, rather than weigh you down.
Focus on PROFITABILITY - so you can pursue what's important to you - inside or outside of your business.
Whatever, we can do to help you on your journey, let us know, we 're here, and we are...
Dedicated to Your Success,