His MISTAKES cost his Construction company BIG $$$$ pt1

okay so ten years is a GC in Maui and you've completely transformed the way you operate your business if I understand this correctly yes this is an amazing story you guys so you did 776 thousands what you've got written down there's two you left from 1.4 million done a 776 thousand but your net went from 7% over to over 12% yeah so in reality you're handling half the work and in the actual hard core numbers your profits are according to this you literally made five thousand five hundred dollars less yeah and and you've done half the work you did you did over seven hundred thousand dollars less work and you only lost five thousand five hundred dollars by doing seven hundred and some thousand dollars less work that's insane when I come out there what's gonna happen Gav is I'm an artist I'm gonna be able to look at this and I'm gonna be able to put in a comma top for you that costs five dollars a square foot or a countertop that costs twenty five dollars a square foot and if I have an idea of where your budget lies I can start to give you options that fall within your budget but also we can match up to those pictures that you so much like so that we can actually create something in the end you're comfortable with the price and you're comfortable with the look so the first thing that I'm going to request from you is a budget so that we can get off to the races running like like like it's nobody's business all right you guys this is going to be part of our listen while you work series which is designed to let you guys just tune into a set of headphones and keep working now the overall success of this series depends upon you guys interacting with the video so please hit the like button and comment down below today's word is Aloha Gabe so will waste any more time let's go meet Gabe and hear his story how he's utterly transformed his business in a completely bass-ackwards had incredible amounts of success doing it so they'll waste any more time let's get into part one of this two part series boomin we're not alright so i'm with gabe deep what do you do general contractor maui okay I'm celebrating my 10th year okay so ten years is a GC in Maui and you've completely transformed the way you operate your business if I understand this correctly yes this is an amazing story you guys and give you used to do high-end custom work right mm-hmm that's correct okay so tell me a little bit about where you started and how you got into that and then we'll evolve to where you are now well I mean originally it started in Minnesota before I moved to Maui and I worked for a guy who did all types of different remodeling so that's where I learned it and then I took what I you know learned there and moved to Hawaii and ended up in Maui and that was about 12 years ago and so for whatever reason I was just always known as one of these contractors that just takes on the whole project you know okay I don't know where that really came from but maybe it's leadership maybe people trusted me I don't really know but long story short as I ended up getting my general contractor's license in Maui and the ball just started rolling and and people just started coming to me with you know these these big projects you know for me this is the word of mouth started to spread word of mouth started to spread and I started taking on you know huge home remodels condo remodels is a huge thing in Hawaii because I make all the vacation rentals there you know for a long time it worked really really well and so as as time went on I started you know like observing my subs that I would hire you know the electrician guy the plumber guide the excavator guy this whatever guy and noticed that their world was a little bit easier than mine as far as estimating pulling their hair out you know like you know they started to work you know just like everybody else but I I started kind of observing and noticing like why is it that you know I'm working all night and all weekend on these super on detailed estimates and all this other crazy stuff and these guys are rifling off estimates in 15 minutes right so that's where it started but you know I was so busy and in the middle of you know my business that I I didn't really I didn't know anything different and I just kept doing what I was doing for how long well it really started in its until about 2016-2017 I really started to take a long hard look at myself and my business and go like they like something's something's not right you know and these profit margins and and it actually started when I read your book jack of all trades yeah and it was what you talked about in that book where it was like you know like doing everything it's just crazy and knowing your numbers and that's really where it started when I started digging into the numbers because I had QuickBooks for a long time I had a bookkeeper and all the data was there I just had to look at it and so last year was the year I had lost a couple of guys a couple of my main guys had moved off the island and I was like well if I'm gonna if I'm gonna make a change now's the time so I wrote some numbers down here last year at this time from January to September I did one point four million in sales yeah and my gross profit at the end was seven and a half percent one hundred one hundred and one thousand dollars okay and so basically I'm just moving money yeah that's all I'm doing yeah that's actually a really bad profit margin very bad okay yeah so this years much better because of some changes that I that I had made and recognizing what what's profitable what's not what am I just you know sometimes I would sit at some of these remodels for three months and the profit margin on those would be pretty pretty low but I could go and do a quick job for a couple of weeks like a room for an exterior okay or without an exterior painting job or whatever it is and be in and out in a week or two and make the exact same prophecy money so you know that really that really slapped me across the face but you know it's it's tough because I I'm I'm really known where I live as like the guy that gets and again there's a lot of me it's not just me but the guy who remodels the whole house call Gabe he'll take care of the whole thing okay he'll quarterback the whole thing and I'm good at it but if the numbers aren't there it's like I so so you started to get this epiphany that why am I doing this amount of work for this amount of profit when I can take on jobs that is about this amount of work and has this amount of profit you know so you were do so you started to to micromanage or micro dig into your business and find the really profitable icon the the they I don't know what you where the riches are in the niches yes okay so what you call it that or whatever you feel you're cherry-picking your best jobs so were you able to start to figure out which jobs we're actually the best jobs and then kind of start to model your business to go after just those absolutely and and some of those jobs like for instance like I'm a licensed general contractor so you know I'm not an electrician or a plumber like you have to have separate licenses for a lot of stuff but I have under my license I have a handful license as I already own I already own them framing remodeling painting roofing as an example roofing is one roofing is very it's not many people want to do it especially in Hawaii that's really hot there but Roofing was one example exterior work in and out you don't have to go inside someone's house that's a whole nother story for another day inside of someone's house it's different than working on the outside of their house okay so I found that the profit margins for whatever reason are higher when you stay outside of someone's house that's bizarre yeah do you know why I think there's more guys that are willing to go inside and there's more guys who will go in and paint maybe there are that we'll go and get up on your roof okay so you can charge a premium price because you're doing a job that nobody else wants to do it so it's basically the law of supply and demand attempt yeah and the law of scarcity like you know the roofers are scarce there okay but there's a million painters that will come in and paint your bedroom okay so they like to work in the air yeah so I just started realizing like you know everybody wants to work in the air conditioning and inside and listen to the radio all day and all that great stuff and and you don't make as much money doing that so you had okay so let's go back to 2016 1.4 million with a seven and a quarter percent profit margin which netted you what a hundred and one thousand so then you've changed up the model of your business you went you took out more bread and butter but ninja five bread and butter jobs and then what happened to your growth and your net then well since then I've done half the sales and the girls profit was about the same so it went up by about six percent so you did seven hundred seventy six thousands which you've got written down there's two you left from 1.4 million down to seven hundred and seventy six thousand but your net went from seven percent over to over twelve percent yeah so in reality you're handling half the work and in the actual hard core numbers your profits are according to this you literally made five thousand five hundred dollars less yeah and and you've done half the work you did you did over seven hundred thousand dollars less work and you only lost five thousand five hundred dollars by doing seven and some thousand dollars less work that's insane and it goes even further than that because like my bookkeeper that that's that's seven hundred thousand dollars less that she has to manage that's seven hundred thousand you know that that's subcontractors that's 1099s that's bookkeeping that's whole I call them bull's-eyes Gabe so the bigger a company grows the bigger the bullseye on their back rose and the more guys outside or customers or people's perception they think you're this big giant target for fraudulent lawsuits discrimination lawsuits from contractors that aren't happy or whatever you name it so the less you're actually out there in the world doing that the less liability that you have right I mean are you seeing that at all well yeah I am because part of that eye opening experience around 2016 was when I first met you was I was going through a lawsuit and I was kind of like just like dumbfounded like how in the world could this happen to me like you know but it happens to everybody it doesn't matter if you're good bad or whatever and so what I realized is the reason that reason that happened is because everything got so big and kind of borderline out of control that I had missed some steps with this certain customer and it ended up in a lawsuit and we eventually settled and everything's fine now but at the time it was very scary and it was confusing it's like how did this this wasn't supposed to go down this way and so that's an example of the bullseye getting bigger mm-hmm and not really realizing it and it's like that's that's a consequence what are you gonna do next year are you gonna actually try to shrink your numbers some more yeah I since since then I have I had a couple guys move off the island so I have replaced them with with new guys that are running jobs for me but we constantly are talking about riches are the niches what like why are we sitting and occasionally I'm still doing some of those some of those remodels from the past okay but I've adjusted my numbers so I'm not just moving money for three months from remodeling these houses and condos so if the numbers are right I'll do it so if you dramatically raised your prices then yeah I have and have you basically just quit caring cut what customers perceptions are because you've probably had customers look at you like why are the prices so high now and do you come back say because I want to make a living to or I have a script now I bet people before I even go to their house I won't go over to their house and it's not an ego thing or an arrogance thing it's just no one's gonna care about my time except me yeah that was a really hard thing for me to learn and so now before I even engage in someone I ask a lot of questions before I go over there and if they can answer most of them you know I'll go over and so let's do something fun can we do a role-playing where I'm the customer and calling you up to do yeah what kind of project would you typically then screen all right you guys well we're going to be wrapping up this series in the next episode with Gabe figuring out exactly what it took for him to have the bravery the courage to actually completely transform his company now this was part one part twos coming up so make sure you guys stick around because that one is gonna be coming at you down the pipeline and while I got you here check out the video I'm gonna pop up here the one I'm gonna pop up here hit the like button and comment down below god bless you guys and go get them