I Asked 7 Contractors Where They're Wasting Money...

I love Condominium, where over 700 contractors come together for 3 days and share stories of war, success, and just hanging out to build their businesses together. And in the first video, I asked them, "What would you do if you lost everything on Friday and had to start over ?" "What will you do first thing on Monday?" Now I want to consider even more complex issues. I want to find out why these successful entrepreneurs of all levels, from a few hundred thousand dollars to over ten million dollars, feel that contractor A spends too much money and contractor B doesn't spend enough money. So let's dive right into the first one. What do you think contractors are currently spending money on that is a complete waste? Hmm. That's a good question. Does anyone know the answer ... I'm just trying to imagine what I've actually been doing wastefully, and, hmm, I think sometimes I've bought equipment that was more for showing off my personality than was really necessary. This is writing checks that your bank account couldn't cash. Yes, that was definitely a lesson . I thought: why do I need this high-end truck or this kind of equipment if I use it once a year, not very often. Equipment. Owning equipment when it can be rented. Because the equipment you have has to be busy all the time. Otherwise, you are losing money on this . If you pay a monthly fee for it, if you have one . So renting equipment makes a lot of sense. I think buying equipment that you don't necessarily need at the moment. Rent what you don't need, rather than buying it at that moment. You know, just a Dingo-type machine and a nice little excavator , a nice trailer, something like a multipurpose trailer, and, uh, general-purpose tools–that's great. You don't need a steel wrist, and you don't need all these other fancy things that get in the way, and they're great. These are great tools, but you can do a lot more with some truly versatile tools that simply save hours of work. Uh, I think people sometimes waste hours on millimeters. It's really great to be focused on details and do really great work, but I think you have to understand where exactly that focus and detail is needed, and when it's not worth spending hours on millimeters. Analysis paralysis. Yes, yes. You just, you know, spent 5 hours trying to fix this tiny thing, and in the end, after 5 hours, you tell the client, " Look, guys, I tried my best." And they reply: " It looks amazing." Perfectly. Like, we're giving it to you. Don't marry your job. Yes, yes. So, I think that's an important thing, yes . This is, uh... So contractors spend a lot of time trying to fix something, and it's essentially nothing more than a waste of time at this point. There is a law of diminishing returns from certain aspects of a project. When I say don't marry the stone, when you're placing boulders in a boulder retaining wall, in a pond, or in a water park , and you have an idea of exactly where you want that stone to be placed, you're the only person who has an idea of ​​how you want that stone to be placed. Someone else might see the same thing and think it's great in 15 different ways. So it doesn't have to be just one way. So do n't waste time. But what really shocked me about this issue was how many experienced businessmen it left in a bind. Some of them simply had to give up. They couldn't find the answer. And after we see how these guys grapple with this question, I'll share my thoughts on the answer, and then we'll move on. Money for armaments is a complete waste. Yes, this is a difficult question. I would say that I'm probably not sure about this issue. So I'll miss it? Yes, I would have to skip this question. Go back to it if you want. Yes. Good. I can tell you that ...Okay. What don't they spend money on... Okay. Well, that's the next question. What should they spend the money on... Well, that's the next question. Good. Tell me what they spend money on, what you think they waste their money on... Um... What is one thing you think contractors spend money on that is a complete waste? Well, that's a good question. I don't know. Well, I don't know. I mean ego versus pride. If you've gotten to the point where you can afford to buy a pickup truck with aluminum wheels and heated seats, and you're proud of your business, and you're proud of what you 've accomplished, and it doesn't take anything away from your business, do it. Be proud of who you are. Pamper yourself. But ego comes when you have to have these things before you are ready for them. If it's a compromise and a sacrifice...I can't pay my guys more, but look how cool my truck is. I can't pay myself more, but look, I want to show the world everything I've accomplished, even if it's a false sense of accomplishment at the moment. It's a matter of ego and pride. You can buy the same thing when you are ready, you can be proud of it. Do it. Please do this. Treat yourself. This world is too short. Buy the nicest thing you can afford and don't look back. You deserve it. But if you haven't reached that point yet, your ego is writing checks that your bank account can't cash. Now the next question: what are contractors not spending money on that they should? Yes. Business coaching. I think business coaching and finding mentors is, above all , the most important thing. Hmm, once you learn what a business is, a business is a system of processes. And when you don't have processes, when the ship doesn't have a port , you just wander around. So for me it was finding mentors and business coaching and asking for help. Overcoming the ego, overcoming yourself, and asking for help. And, you know, I started doing business coaching, I started getting mentors, and it completely changed. Next year we will reach the million mark thanks to the mentorship we had this year. Okay, now I understand a lot more. I did n't even have a written goal. I was still having difficulty at altitude. But what happens, especially in the betting industry, is that there's so much business, so much work. You get so deep into it that a whole year goes by and you think, “You know what? We did n't get any closer to our goal because I didn't set up processes. I didn't get any mentoring." So this applies to mentoring and business coaching. For me, this is the most important thing because I have to get out of my business. OK? I still work in the field on construction sites. Maintenance is no longer a field of activity. Good. But in construction, the guys still don't know how to lay stones, they still don't know how to overcome difficulties. So, I'm still working there, doing construction. And I'll tell you something else. So, the gentleman we work for now, this company had over 600 employees. He sold it. So I do n't know what that income was. But 600 employees–it is a lot. He is 80 years old. He came out, patted me on the shoulder, and said, "Brian, I'm not going to tell you how to run your business." When a guy who built a business with 600 employees speaks, you listen. I say, " Dave, go on." He says, "If you fail, you're lost, my friend." Because I'm watching you, and if you leave this team, there's no way these guys can build this on their own. Knot and knitting needles. Yes. Knot and knitting needles. Center, center, and you control everything. Right. And I am also an obstacle. Yes. I am also a bottleneck . I wear, you know , I wear so many hats. So, I learned what automation is. I realized that when you invest a thousand dollars a month in automation, that's a return on investment. You get a return on that investment. I'm not in marketing anymore. I don't do website work. This guy is doing it. This girl is doing it. So the most important thing for me was to start outsourcing a lot of the things I didn't want to do. It was a terrible time. What do you think contractors should spend money on, but are they too stingy? Yes, I think they should start...That's one thing . Since I belong to the younger generation, I think social media is very important. I think connecting with other people is like participating in a Pandemonium event, which is very important. Everyone is talking , everyone is using social media , Instagram, Facebook, they have their contacts to potentially work together on a project or help each other. And that brings us back to the team. Having a good team and good connections really helps. So, I think a lot of older contractors , like my 40- or 50-year-olds, need to spend more on advertising and actively use social media. And also keep publishing posts, doing daily vlogs, just checking in on your work. I think social media is very important today, especially in today's world. Of course. I think that using social media, like you and I, has its audience because it wasn't for lack of effort, which was worth it anyway, or not worth it, using other people's expertise, i.e. investing in a videographer. I have a videographer. We have, you know, three people on our marketing team, and that investment is absolutely worth it. They gave me access to clients all over the US that I never would have had if I had invested in marketing. In particular, on social networks. Good. What I find interesting is that the first three guys said pretty much the same thing: find a mentor, networking, and social media. They all have one thing in common , which is what these three guys chose, but the next two guys will choose something completely different, and I'm going to go back in the video because I tend to agree, but not completely. I want to temper what they're saying with a little bit of 35 years of experience. So let's see what they say. What are contractors too stingy with that they should be spending money on? A. The staff, probably. Good staff. Good staff. I think, you know, my best purchase I ever made was a little excavator and a little truck. My worst purchase I ever made was another excavator and a larger truck that were just sitting in the yard and I did n't use them well enough. So, I think, but I think overall, with the right team and the right staff, you can lose a guy because you think, "Oh, I don't know if he's worth the extra two dollars an hour that he wants." But to teach someone else, to find someone focused, to find the right guys, he was probably worth 10 times more. Yes. You know. Yes. Then try to teach five new guys who aren't as good. So, I think investing in your staff, engaging your team in activities, you know, trying to reinvest back into them so they have careers and learning opportunities, is probably the most important thing. Perfectly. What do you think contractors are too stingy with to be worth spending money on? On your people. Do you want to expand on this or just want to put it all together like this, buddy? I mean, you know , I think you need to pay your people well enough so that they don't have to struggle, you know? There is a difference between when you pay a guy on the first date. Uh, but, you know, once they, you know, earn their place, and then you pay them well enough that they don't have a hard time. Give them, you know, what they need and more. Perfectly. Interestingly, both of the last two people said they would pay their people better, and I agree. But I also disagree to some extent , because when someone comes in, I often find after 35 years of hiring hundreds and hundreds of people, they tell you one thing but can only do another. They simply write checks that are impossible to collect at that time for their skills. In fact, I was lucky enough to hire one of the top five skid steer operators in the entire state of Minnesota, according to him . But when it came to finishing the job, it was too messy, there wasn't enough space, etc. Excuse after excuse until finally one day when he came up with one of the excuses why he couldn't complete the project, I went to work, he went home, I got the job done that same day. And when he returned the next day, he asked how it was done. And I said, "Well, I'm probably one of the top four skid steer operators in the entire United States." And that's when I quickly realized that a lot of these guys tell you they can do something, but they can't execute. But on the other hand, some guys do the exact opposite. They come and simply amaze with their skills. They prove what they are capable of, and they prove it again and again. And these are the guys who are truly golden. When someone comes to you and they don't just spew a bunch of words, but their actions actually prove their level of skill, these guys deserve to be paid whatever it takes to keep them around. This is very important, and you should probably realize that some guys will cost you money, while others will make you money. Now, next, we're going to go back to these contractors and ask them, after all their years of experience, what would they tell themselves if they could go back in time to the first day they started, what advice would they give themselves? Okay, so now if you could go back in time, everything you know now, Justin. Good. And let's meet you on the first day you started, what would you tell yourself? Uh , seek advice. I lived in isolation and was very proud of starting my own business for the first time , thinking I knew a lot of the answers and that I would find them. So I told myself that I should really rely on events like this where I can meet other people and hear their stories. I feel that a big step forward can be made by using the knowledge and experience of other people. And not just keep quiet, be in shape, bury your head in the ground and work without it. Yes. Don't let your ego stop you from asking questions. You know, when you come to Pandemonium, there are anywhere from 5 to 700 contractors here. Right. And these guys are a company. You noticed that, right? Yes, yes. They just get together, share experiences, help each other, exchange phone numbers. Yes. And people from all over the country and the world come here and leave with friends who you can now call and say, “I’m in a tough spot. What should I do? And sometimes these friends really fly in and help. But other times, it's simply a matter of one contractor's experience helping another. So, I think an event like this is probably one of the most powerful things you can do if you really want to move your business forward. Reach out to people who can give you honest, vulnerable, and authentic advice. And I think that would change me. Justin, great. I appreciate it. It was wonderful. Sign up for business coaching immediately. Um, I don't want to...I'm not trying to promote a book here, but I read the book "E-Myth," you know? Yes. So I don't want to promote this book, but I would go back and start getting business coaching right away. Now, Michael, go back to that Michael 17 years ago, when you were just starting out. Yes. What would you tell yourself? Dream big. Dream bigger. Dream bigger. I think at that point I had a very narrow mindset of, "Hey, I'm just going to mow lawns." You know, I'll just, you know, just do it. And I will do that. You know, my dad and I started a business together. And, you know, after that we didn't have any vision. But then it kept growing and growing, and now, you know, I have a vision that we should reach $2 million . Can you give yourself any specific advice? Any specific directions? Do this, don't do that. Would you recommend going into any niches or acquiring any skills right away? Or what would you say to yourself? Besides dreaming big, living big, and, you know, whatever , but can you say, attend this event, meet these people, take this training, do this, do this, and do that. Can you say something like that? 100%. So I would say: get off the lawn as soon as possible , get into the water structures as soon as possible. This is something we really love to do. We are passionate about this and I can tell my guys. But why? Is there a reason why? Is there a reason why you're getting out of there sooner? And do you go to the water elements faster? Profit, uh, ease of installation, or just because you like it? Because it makes people happy. Because, you know, I... We can install landscaping in someone's house, and they say, "Oh, it looks great." But we install a water feature in someone's house and they go outside and they literally cry because they're so happy about it. That's the difference. You guys have a different mentality than when you're a lawnmower, there's nothing wrong with that. But when a client comes out and looks at his yard , he often criticizes you. They don't...They don't feel this emotional overload. They because they mowed the lawn and they're going to...They combine it with what other guys are doing and how they're doing it and they're familiar enough with it to feel like they can put their, um, what they want to see in that yard. They can plug that into the equation. But when you set up a water element, it's something that most people are not familiar with, and they have this instant emotional reaction, and it's so satisfying in many ways , because it's not judgmental, it's that they're, um, grateful for what you've done. Would this be a good resume? 100%. I can't emphasize enough what he just said about how important job satisfaction really is. Interestingly, our history was that we were almost 100% a commercial contractor, and the minimum job we would take on at any given point was $100,000 or more. Anything under $100,000 just did n't interest us. But the level of satisfaction we got from these jobs decreased exponentially . And, for example, we would build everything according to a set of drawings. We would never have anyone to talk to. There would be a project manager who wouldn't care about us and would only care about whether we completed the work on time. Then we noticed that our level of happiness and satisfaction with our residential projects was exponentially higher than our level of happiness and satisfaction with our commercial projects . So, while we did large-scale projects in the commercial realm and small projects in the residential realm, we had much more joy and happiness in the residential realm and almost none in the commercial realm. And if you compare the profits from residential work with the profits from commercial work, the profits from residential work were much higher. So , our happiness levels were higher, our profits were higher, even though the amount of work we did was much less. There was no happiness here, no profit, so we conducted a grand experiment of reducing our commercial work over and over again. We had much more fun working, we had much more profit, and in the end it turned out that we hardly touch the commercial project to this day . It has to be with someone familiar so that we have a human relationship with that person. This is the only time we are touching on a commercial project at the moment. But, interestingly, the next answer to the last question is one of my favorites. So let's see what this 21-year-old has to say. I would tell myself specifically, "Yeah, you don't talk to them." OK. What would you say now, as 21- year-old Allen, to 15-year-old Allen, who is mowing? Yes. I would tell him to just keep being consistent. Uh, every business is different, so if people give you advice on what to do, it doesn't matter how they do it. You need to find your own rhythm. It's important , you know, to listen to other people's advice and suggestions, but it's not always right for your business. This will not always meet your criteria. You will do something different than them. So, I think you definitely need to approach things with a certain amount of skepticism, but also figure out how you can build a successful business, be consistent in your thinking, and just try not to listen to other people. Uh, trying not to listen, you know, what people think, because obviously you tell people business ideas and they tell you, “Oh, that’s just nonsense. This is not good, you either need to do something else, or think…