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Business owners, entrepreneurs, they start a business 'cause they want more freedom, they want more money. You're gonna be twice as busy, twice as stressed, making twice as little money. You quit your 40-hour-a-week job so you can go and work 80 hours a week in your business. You may not need to get to 5 million to enjoy your dream life. I still struggle with this, where if I'm not working, I feel like I'm not accomplishing something. Not knowing my overhead margins and my pricing affected my business and my life tremendously. Just more revenue doesn't mean you're gonna be more profitable. Stay humble and lean on other people for advice. Outside perspectives can make a world of difference. Welcome to The Business Game, the show that breaks business down into real levels from zero to over $50 billion, so founders can see exactly where they are and what comes next. Today's guest is playing at level one, which sits in the zero to $1 million bracket, the founder, startup, and survival stage. At this level, you're proving the model works. You're validating demand, refining positioning, and fighting for consistent revenue. The challenges? Doing almost everything yourself, hiring your first team member, and stepping from practitioner into CEO. The goal? Turn expertise into traction, and build momentum that's repeatable, not accidental. Welcome to The Business Game. I'm Steve Plummer. Be sure to like and subscribe to the show wherever you're listening. Today we're joined by Derek Isaac, a business systems coach who helps general contractors and home builders bring structure, control, and accountability to growing businesses. With more than 20 years of experience in construction contracting and real estate investing, Derek has seen firsthand how growth can create complexity, reduce visibility, and make a business increasingly dependent on its owner. Today we're diving into how to systemize a construction business, avoid common financial mistakes, and build a company that works for the owner, not the other way around. So let's dive in with Derek Isaac. Derek, welcome to The Business Game. Great to be here. Looking forward to it. So Derek, tell us, uh, from a snapshot point of view, what you do and why it's important to today's market. Yeah. So the sh- kinda quick and easy short version is we help general contractors systemize their business, and the reason that it's important is, like many business owners, entrepreneurs, they start a business 'cause they want more freedom, they want more money, which translates into more freedom, more time, uh, with the family or doing the things they love. But somewhere down the road, down the tracks, you know, one, two, five, 10 years in, they realize they're busier than ever, uh, overworked, stressed, the money's not adding up, and they've created this freedom but in reality they're, they're still tied and stuck in the business. And, uh, so that's the type of people that we help, and the way we help them get out of that is with building process systems, operations, structure, uh, throughout their business with, you know, intention of, of helping the business owner get more profitable and get more time back on their calendar. Yeah. Uh, a great mission, by the way, so, um, you know, who doesn't want more time and profit and so forth? So, y- can-- looking back on that, can you share with us, or even was there a moment, and share that moment with us, when you realized there were serious systems problems within the industry and that you were the person to help solve those? Mm-hmm. Yeah, I lived through this realization and process with my own, my own contracting company, and I, I always had the, you know, inkling in the, in the back of my mind that we needed systems, and we were pretty early. This At the time, probably the first time I got, like, job software was 15 years ago maybe, 10, 10, 15 years ago, and doesn't seem like a long time, but it was at the time n- still not a lot of builders really optimizing and, and using some of the technology available. And I went through all those trials and tribulations of trying to implement it and get the team on it and imple- you know, use systems to the advantage of the business, and there was a huge learning curve there. And I started coaching small businesses in my area at first just kinda pro bono. I wanted to be able to kinda instill some of my knowledge. I knew I wanted to get into coaching more, and I knew all the difficulties that I went through building my business. And after doing that, the clients that I worked with, I realized how much value and how much I can shorten that learning curve for them to get their businesses profitable and, and set them on the right track of not just looking to make as many sales as possible and then, you know, grow their business to whatever, you know, millions of dollars. But figuring out, like, strategic scaling essentially is what I call it of, you know, how do we do this intentionally? So I, I started learning, I guess, how important systems were, and then I really saw in the construction industry specifically just a lack of systems and processes. It's a very dynamic industry more than some others. Um, every industry has their own, you know, quirks or what have you, but construction, you're dealing with subcontractors, so you have all these other companies with their own systems or lack of systems. You've got suppliers, different pricing. You're dealing with, you know, all types of different construction personalities on, on the job sites and lots of different management layers. There's just a l- like schedules, clients, lots of money, you know, exchanging back and forth and, uh, it's very challenging to say the least. And like myself, I got into business without going to any formal business education, management. I didn't really have a playbook at all. It was more I'm good at doing my job. I was a contract framer when I first started my subcontracting company, which turned into general contracting. So I started a business and, and was the technician who knew how to do the work but didn't know how to run the business, so that's, yeah. Long-winded for it took many years to, to realize what the, what the issue was, and many more years to realize how to implement them effectively in other general contracting businesses. Yeah. Okay. So let's talk about, for, for our listeners' sake more than anything, um, what is w- you know, when a general contractor or home builder comes to you, what does their day-to-day usually look like? And, and why I ask that question is that it's easy to sit there and go, "No, we're doing okay. We probably don't need this," but you probably have a different perspective given your, your positioning in the industry. So what does their day-to-day usually look like that means they actually need some help from Derek? Definitely. Often when new clients come to us, they are There's a few camps, but they're, they're typically overscheduled. They know they're working way too many hours. They've kind of got into that habit, and they feel like they're pushing and it's like, "I'll just work harder this month or this year to get ahead, and then next year will be better or next month will be better." And that, you know, cycle hamster wheel just continues into the future and, and often they come to a realization, "I need some outside help. You know, I wanna do this better, I wanna do it faster. Um, I don't wanna have to slug it out for the next, you know, five years to, to figure things out and finally get my time back or, or get profitable." So, so that's kind of the ideas that are going through their head. Their day-to-day is often reactive. Firefighting is, is the common term in the industry. They call the guys in the morning or the guys call them. They tell them what to do. The site manager doesn't, you know, has to figure out something, he calls the owner. The architect has to change something, they call the owner. The client doesn't know where the guys are 'cause they went out for a two-hour lunch, so they call the owner, and essentially the owner becomes the, the one-stop shop for every little thing in the business and everyone needs to call them to figure out what to do. Uh, so, so that's where we need to change the script from, you know, inbound problem-solving to having an actual script or, you know, process in place that the guys are following, that they know what to do. It's not an overnight, you know, method at all, but there should be a thought-out process for the way things get done, and a training system so the, so people know, you know, what to do without having to rely and go, you know, look at the, the operating procedure. They just, they know from their training. And then accountability to make sure certain quality benchmarks and, um, you know, accountability is, is in place. Yeah. W- we'll get to those, the nuts and bolts and the practicality of it shortly. Um, I'm, I'm curious, though, um, and this is I'm, I'm asking this based on your experience in the industry. W- what's something that you believe about construction business owners that many of them probably don't want to hear? I think the biggest thing is You're, you're not gonna figure it out on your own, and why would you want to? You know? And, and I can point the finger right back at myself. Uh, I typically don't like to ask for help. I like to think I can figure things out. I'm, you know, a fairly intelligent person, and, and I can, you know, read books. I like to read. I'm, I'm a quick learner. So I feel like I can figure stuff out, and I'm not, you know, worried about making mistakes. But then you realize why would you take the hard road? Why not get some help? Talk with people around you, business groups, coaches, consultants. You know, books and, and videos online are a great place to start, but ultimately, other people who have gone through your situation can fast-track essentially probably have encountered every problem that, that you've solved. So I think that's a big one that a lot of contractors need to hear is we're kind of used to being the, you know, Superman, Superwoman in our business, and There's a certain ego to it. Yes. Um, but realizing, like, stay humble and, and lean on other people for, for advice. Of course, you have to figure out what's right for you and your business at the end of the day, but outside perspectives can, can make a world of difference. Mm. It's, it's a really interesting one, isn't it? Because to excuse me, to be a good contractor, a good home builder, et cetera, good in business, there is a certain amount of ego in, in that, right? Otherwise, it, you, you just don't work. But there, there comes that point of time where you have to let that ego go a little bit to, like you say, get some outside help. And so f- for you, was there a, a moment where you realized that or was it just a, a realization over time? Can't think of any specific moment right now, but yes, I've had multiple coaches and been a part of multiple different business groups throughout my, you know, business career. My first real, like, coach, I would say that, um, was like a paid, paid coach, paid mentor, was somebody that I met through a business group and we're still friends to this day. Uh, and then I've hired multiple other ones since then. The, uh, what I found is, like, early on it was more general business coaching of people that I knew close by. Later I got more specific coaching for specific kind of problems or specific to my industry. W- when I started coaching, I hired a, a, you know, coach for coaches, um, because it was a new industry for me, if you will, a new way of, you know, doing business, so I hired someone to help me, um, you know, transition and, you know, do, um, online marketing and then a lot of stuff that I hadn't learned through my construction business. And, uh, I think that's just a ongoing thing. Um, when you're starting out or, or earlier in your journey as an entrepreneur, you can probably find most anybody in business is gonna help you. As you get more experienced and kinda later in your business journey, you're, you're gonna wanna look for specific coaches. You know, if you want to be able to speak better, you find a speaking coach or a Toastmasters group or something like that. If, if you want to be a better marketer, you get a marketing coach, like, or, you know, contractor, you get a contractor coach. So my advice would be to look for more specific coaches for, you know, more aligned with ex- exactly what you do or exactly what you wanna improve in what you do. Yeah. Uh, you mentioned further down the track in the business and, and I just wanna touch on for a moment that, the, this notion that growth is always good. You know, if I, we j- 'cause you always hear all the time, you know, we've gotta scale the business, we've gotta grow. Like it's a, in, in not just in construction, but in almost every industry. You know, we're growing this year, we wanna grow and, um, most so most people I think assume that that growth solves most problems. But why can growth actually make a construction business harder to manage? Yeah, asking the, the right questions there for sure, and this is very in line with the m- mistakes that I made early on. I read a lot of business books and, you know, bought into the mantra of I wanna scale up to millions in dollars and, and be a huge success and everyone will see me back at home. Yeah, said no, said no business owner ever, right? Like that's so common, yes. Yeah. See the great company that I've built- Yes and, and all this good stuff. And, uh, there's nothing wrong with big aspirations and big goals, but realizing the difference between revenue and profit is, at the end of the day, the, the big differentiator, and the financial aspect of knowing is your business healthy? Is it not healthy? It's, uh, I could use a bodybuilder example. I don't know if that's really a great analogy, but there, there's a certain level of bulk and strength and stamina and fitness that's healthy, and then there's y- you know, um places where it's, it's gone, you know, maybe too far. Um, with, with business, the way that we look at it is we want the systems in place first. I, I think that a business should have systems that facilitate the scaling of the business. So we need a system that will operate you at, you know, 10 million, and even if you're only at 2 to 5 million, because we wanna have a system that's not gonna break as you scale up. So that's what we wanna look at. The, I guess the, the mindset is if at a business owner you are busy and already a little bit stressed out and already kinda missing some family time, and you're at, let's say 5 million, you scale up to 10 million with the same systems, the same structure, you're gonna be twice as busy, twice as stressed, making twice as little money Yeah uh, essentially probably less. Mm-hmm. 'Cause as you scale, you add overhead, you, you hire more people, numbers are harder to track 'cause there's more going on. Now you got twice as many clients. So starting with just pushing sales or trying to grow revenues really quickly is usually a surefire way of finding yourself, you know, in disaster and in a really tough spot. Okay. Let's, let's talk about those systems then that can help, um, help our listeners. So the practical side of things, if you walked into a contracting company with zero documented systems, what are the first two or three things you'd put in place, and why is it that those things are important to be first? So I'm gonna s- set aside a little bit like the mindset stuff, uh, with the owner, um, like time management and prioritization. Um, that's kind of more of a personal thing with the, with the, the owner of the company. Yep. As far as like systems, I want a good file management system. For us, that's typically Google Drive. It's just my preferred, but you could have, you know, SharePoint or any other number of file management systems. But I think a good file management system where all the information c- has a place to live and it's shared with the right people, there's a structure to the, the information of the company. So that's usually kind of a backbone system to any well-run organization. Then financial tracking is the next system. You need to know what's going on with your numbers and know your financials, your overhead, cost of goods sold, uh, you know, m- pr- margins on, on profit obviously, and be able to tell what's happening in the business and if things are going off the tracks, all that kinda stuff. And then also just tracking from invoicing to expenses so everything's up to date, it's caught up. The, the owner doesn't have to think about it. They've got like a bookkeeper, and they've got a good financial system that they, they, they know the numbers are sound. So those would be the big two. The, the third one for a general contractor is the, the project management part of the company, and that's really, like, a lot of systems all tied to get together there. So not gonna get into that, but, um, estimating kinda ties in with finances. I... What you, you make your money in a construction business when you estimate. If, if the budgeting is off, you're, you're gonna have a hard time making money later on. Uh, so those are, those are some of the really big important ones, uh, early on when you start out, um, you know, building systems. Yeah. And have you, when you start working with, I know you mentioned, you know, SharePoint and so forth, but when you, uh, uh, when you start working with a company, are there certain systems you recommend that they have, and do you get a bit of pushback? Like, how does just the nuts and bolts of that work? We're pretty custom and open to using different softwares and different systems. So we have our preferred build, and if a contractor's early, sometimes that's a bonus if they don't have much in place because we can build from scratch and we can suggest exactly what we think is gonna work best for them. If they're farther into business, they've already tried and implemented some softwares and, and different things, then we typically try to work with what they have if we know that it's gonna, it's scalable and it doesn't have any, you know, big blind spots or setbacks that we're, that we're gonna encounter. If it's something that we feel is not a fit, w- we will suggest they, they switch over, and we'll, we'll plan out, like, a phase, phase out of the old, phase in of the new. That's more rare, though. Um, typically we've used enough of the construction softwares for our type of clients that we have a pretty good grasp, and most, 90% are already using stuff that we know very well and have used before. So yeah, we will definitely suggest ones and have our preferred, but we're, we're open to using other, um, software. Yeah. Okay. So, uh, all right, we've got our, we've got our systems in place and, and so forth. Let's talk about the money side of things, right? Because we we all know how important that is to, to every business. Yeah. So, and, and I think the, it's not solely a, a construction industry thing, but it is very typical in that construction businesses can generate a lot of revenue but still struggle financially. So what do you see are the most common financial mistakes general contractors and home builders make? Yeah. As mentioned before, contracting is, is can be difficult and challenging. The, the beauty of construction is you can get very large contracts. There is l- lot, like, large revenue that's involved for materials and labor and everything like that, but margins are typically quite thin compared to some other industries. And the place where I see contractors making mistakes is, is not knowing the estimating side, uh, well enough, so they're, they're underbidding and underestimating. And they don't understand the difference between markup and margin and what a healthy margin or markup is for their company, and then how that's tied in with their accounting. Usually they're-- they know their company finances and they can see like, "Oh, I made money this month, I didn't." And they kind of know the projects. Maybe they don't know the actual numbers there, but they kind of understand how project finances work, but they don't know how the two interrelate. Uh, so that's a very early conversation we have with clients is what's your markup, what's your margin? And to get a little bit into the nuts and bolts We need to be thinking about margin, and we need to attribute that with the overhead of the business. So normal construction business overhead, typically anywhere from 10 to 20%. They can range beyond that as well. But if you've got a 15% overhead margin, and you've, you know, putting 20% margins on your, on your projects, you think you might have a 5% margin of profit, which is not very much, you're already in trouble, as most people can tell. But the issue is m- many builders don't really know their true overhead margin, so they're basing their, their estimating on, like, industry standards or what they think is a profitable number without actually tying in, okay, I've got 15% overhead margin. I probably want a 5%-percent contingency in there so that if things go off or pricing changes, 'cause I estimate today I might not build for another six months or one year down the road. Yes. Yes. And then there's, you know, we gotta factor in some profit there. So there's, there's any number of things that they may not be realizing. And then project management, there's things that could get missed as well. Some people will price a project, and they know their numbers are kinda fuzzy, so they'll just tack on an extra 5%. And, but that's not a good way to go about it. They're, they're trying to save a couple hours, and I've been there. I've done that. Like, all of these things I've, I've done before. Uh, so you try to save a couple hours 'cause you, you don't wanna work the weekend or e- or evenings, you know, plugging away at 10 different estimates. So they just put a healthy markup, what they feel is healthy. Um, but the numbers inevitably are, are skewed and, and then... So that's the kind of cause of the problem. And then on the, the back end, many of them really struggle with job costing, of knowing exactly how much do we spend on electrical, how much do we spend on framing, so on and so forth. So they never have that feedback loop of realizing where numbers are out. They just kind of get to the end of the month and look in the bank account and either they feel good or they don't feel good, depending on- Yes on what's there, but don't really know why the, the bank account looks the way it does from, you know, the, the estimating that they're doing. Yeah. And how easy or fast is that to turn around typically? So our base program runs for one year, and that, that is to build out the systems of a contracting business. Now, we can pretty much touch on all the major functions and get all the, the big rocks in place, if you will, of this to systemize a general contractor The implementation can take longer. So to get the system in place is, is typically a pretty easy pro- like, you know, we figure out the process, we, we document it, we create some training, we get it to the people, we put some software in place, we set it up. Um, we will do done for you, so we do actually set up the, the systems for some of our clients as well. So we can do that quite quickly, but then getting the rest of the team on board, getting them trained, working through those hiccups, those roadblocks, the, um, you know, bugs in the system, if you will, that evolves over time. So, uh, one year would be, like, quick, um, two to three years is probably more realistic to have everything, like, really tuned in and operating at a high level. Yeah. Yeah. And I, I think the, the strength of what you do is that you've lived these problems, right? This isn't, this isn't theory, this is you, "Well, I remember when and we had to do X," right? It's, it's very much a case of that, isn't it? Very much. I, I understand all the way from, you know, the guy cleaning up the sites and hammering the, the boards together to the project manager, site manager. I've, I've been in all of those different roles in, in my company as well as worked in other construction companies, uh, right up to the owner. So I, I know the different levels of, you know, technical aspects of, of the whole situation. And then now over the past six or seven years, we've worked with dozens and dozens of general contractors, so I've got, you know, my firsthand experience plus the experience of working with all these other general contractors in different countries, you know, different areas, different sizes and, and what have you. So we've, you know, all of our systems and processes that we provide are, are very, you know, battle tested, if you will- Yeah uh, in the field. Yeah. Uh, just, uh, you mentioned, mentioned people there, um, a little while ago, and I'm, I'm curious, do you get new systems? You know, people don't like change generally. New systems or a system being implemented where there once wasn't one, do you get, I don't know, some pushback or, or resistance from the client or at least the next layer down of the people working within that business? And, and if so, you know, how common is it and how do you help them manage that? Yeah. It's not as common as you might expect. Right. Especially nowadays. I think, like, 10, 20 years ago, yes, if you're bringing in some software to a construction site, they're like, you know, "Get out of here. I'll do it the way I've been doing it for the last 40 years"- Yes, yes or whatever. Uh, but nowadays, I mean, the demographics have all changed. Most of the guys working on site have grown up with you know, technology in, in their smartphone at the touch of their hands. And, and even younger guys, you know, they're... Like AI is just second nature to, to many of them too, the, the new guys coming in. So I think it's almost expected and almost wanted, I find with a lot of my clients. I'm usually dealing directly with the owner and the managers of the business. Yes. And then they're the ones who are kinda spearheading and leading their, their teams of the site guys. But the guys on site are usually using like a phone app. They're not super heavily involved with the software. Uh, so there, there's usually not a lot of pushback, but there is that implementation period that I mentioned. Guys need to get trained. They need to get in the habit of using it, and then the managers need to be checking in and reminding the guys and telling them, you know, why this is important, why we're doing this. It's, you know, not trying to cha- track every little movement that you make. We wanna make the company work better and save time and all this kind of stuff. So I, I would say it's rare that I get, like, strong pushback. Um, sometimes an owner will maybe be hesitant. Yes. I find more on the marketing side because- Right contractors, they're often, like, we, you know, they don't wanna be the center of attention. They don't wanna m- market themselves so much, which is fine. You know, we can market the business and stuff like that. We're not a marketing agency, but I would say that's usually more of a, you know, warm them up to the, to the idea than implementing the systems. Usually by the time they talk to us, they're, you know, "Let's, let's do this thing. Let's, let's get it in place." Yeah. Okay. While we're talking about people, I wanna go off on a bit of a tangent, 'cause this is something that, um, uh, uh, business owners are always fascinated by, and it's, it's people and hiring people. Now, based on your experience, have you got any tips for people in construction about hiring the right kind of people for their business? Yeah, this is huge. We, you know, we're big on systems. That's, that's our niche as a- Yes company or a coaching, you know, uh, program. B- but the, the people component is just as important as the systems. I just think the systems need to be in place so that when you bring the people in, they've got something to run, and they're being efficient, and they can get trained and, and all that kinda stuff. So for me, that comes primary. Like, you gotta build the system for the role, and then hire the, the person to fill that role and run the system. Now, as far as the hiring goes, I think knowing your organization chart, um, is important. Mm-hmm. 'Cause as the owner, often when you're starting, you're filling most of the boxes. You're the, the marketing director. You're the finance director. You're the operations director. You know, you're kind of filling all the senior management roles, and possibly project management and some of the other roles as well. So knowing which roles are in a company and realizing who's filling those roles is a primary step to knowing who should be hired. After that, as far as hiring good people, you wanna be giving yourself as much time as possible. The temptation is, we're busy now. I've got these five new jobs coming up. We're already running behind. I just, I need someone to fill this role. That's not a good place to be in, 'cause you're, you have no leverage. You're typically gonna rush into making a decision on someone. There's also the thought in the industry, like, "I'll just hire someone. If they don't work out, we'll, we'll can them," and, you know, or give them a trial day or something like that. So, I mean, trial days can, can help, but ultimately, having a good process for hiring is, is essential. Starts with the role, then ideal, um, ideal employee profile for that role. So we think of an ideal client, but we need an ideal employee to fit that role. So figuring out who is the right person, how much background experience do they have, what characteristic, what personality types. You know, the clearer you can get on who exactly is a great fit for this role, the more likely you're gonna find and, and know that person when you see them. Then getting the advertising out through as many avenues as you can. The other thing is keeping a database of everyone who e- has ever applied for a job at your business is critically important. The best people for the role i- are people that are working in another company. Right. You know, good employees that stay with companies long term, that are good at their job and happy where they are, are working in companies already. They're probably not on the open market looking for jobs. At least there's a much smaller percentage of those people. So having a database of everyone who's applied over the last five years for your business is v- very valuable to be able to reach those people that maybe now, you know, applied for a job five years ago, now maybe they've leveled up and, you know, they went from site manager to project manager, or they're, you know, maybe a carpenter that has instead of two years of experience at the time, now they've got five, and they could be a good fit. So being able to reach those kind of markets is important. I know meta advertising or just online advertising is another way you can get in front of people that maybe aren't looking for a job, um, but could be interested, you know, given the right, uh, you know, the right job description or, or a- or, um, advertisement. The Business Game is proud to partner with HighLevel, the all-in-one CRM and marketing platform built for growing businesses. With CRM funnel, website, and course builders, marketing automations, email builders, and so much more, HighLevel Software will drive your customer retention and your profits through the stratosphere. And HighLevel is fully white label, which means you can brand the platform and mobile app with your logo and company colors, and then resell it to your customers for a monthly subscription. Ready to go HighLevel? Click on the link below to begin your 14-day free trial. All right. I wanna circle back to owner dependency because you talk a lot about that, and it's the, it's the old chestnut of anyone who runs a business, right? Like, a h- working in the business, on the business, all of those sorts of things that everyone has heard to death. So just so we're really clear and we're on the same page, what does an overly dependent construction business actually cost the owner beyond their time? So it, it costs, I, I mean, their time, obviously, their health. Uh, health is usually affected. Uh, but as far as, like, monetary, the business is gonna be inefficient. Typically, that's over-reliant on the con- on, on the owner because it typically means there's not clear lines of communication or decision-making, which are affecting the speed at which The production can be done and, and the rest of the business. So you're, you're essentially slowing down your business. It's, it's not operating efficiency if it's relying on you. Um, things get bottlenecked. The other issue is, which is very common, is you've got this to-do list with 20 things sitting on it that you are responsible or accountable or need to provide some information to move forward, and you know your business could be operating or working way better or even, like, getting back to, to leads that have come in if you're too busy to capitalize on leads. And there's this vicious cycle, if you will, where it's, you know, you're too busy managing projects and clients and people, and you're neglecting your marketing, and then things slow down, and you've got this kinda seesaw, um, teeter-totter effect where you're focusing on operations and production, you neglect sales and marketing. Then, you know, the inverse happens where it's like, oh, we, you know, we're a month or two months out and we don't have any work. We gotta get some new jobs locked in. And, and so you, you hit this, the phone calls and the sales and, you know, you've got this back and forth. Um, so a lot of inconsistency happens when the owner's, is, uh, is too busy. Yeah. And, and I guess that's almost a, a stressor in itself, isn't it? You mentioned the health impacts, but th- that's probably an understated thing 'cause, uh, especially in the, this industry, people... You just wanna push through. Just, "We'll just, just get busier," and like you said at the start, "We'll just get busier and push through." And, um, that's not really the answer, is it? Yeah. Business owners are the hardest working people you'll find. You know, there's the, the, the running joke of you, you quit your 40-hour-a-week job so you can go and work- Yes 80 hours a week in your business. Yes. Yeah. Uh, which, which is funny because it's so true, and it happens to all of us. And when you're in your first one, two, three years, typically you're, you're kinda younger, you're excited- Yes you're, you know, you've got these, these big dreams and aspirations and, and you typically do well because of, you know, that push and you grind and, and that is needed at startup and especially in the first couple years when people don't really know you, you don't have a reputation. There's all this new things to implement in your business 'cause you're, you're starting from scratch typically or, or close to. Uh, so that will happen, and that will also happen in scaling. And that's also another thing to strategic scaling, is realizing that, like, yeah, you get the systems in place, but even with, like, great systems, there's gonna be growing pains and you're gonna have additional workload as you, as you grow your business. It's- Yeah, I- Yeah, that, yeah, that's okay. It's a classic line I can keep going on that. Yeah But, uh, that's, that's- It, it, well, it, it's a, it's a classic line that you- really how, how it comes down to it. Yeah. It's a classic line that you used, right? Like, "Oh, I'm sick of working these long 40-hour weeks, so I'll go and go and start my own business," or, you know, "Now I'm working 80 hours." Yeah, well, that doesn't quite work out, so just, just on that, and, and without belaboring the point, what, what needs to change for that dependency to decrease? I know you'll say systems and yeah, but is that more of a, a mindset thing or an internal shift, uh, you know, um, that people in, leaders in construction need to make? Yeah. There's, there's a number of factors, which is one of the reasons it's so challenging. Yeah. But yes, typically because you've gone through that growth stage at the beginning of your business and, and you've been grinding, it becomes habitual. And I, I still struggle with this, where if I'm not working, I feel like I'm not accomplishing something- Yeah or I, I'm not, you know, moving myself forward. I, I love ticking those things off my to-dos or getting that new thing in place or, you know, finishing something so... and then you just move on to the, the next thing. Yes, yes. So there is that mindset where it's like, I've worked hard. I know I've made a difference. I'm doing the best I can. I also need some rest. I also need some break. I also deserve, you know, a holiday, just like my guys do on site. And, um, so realizing that you can get in your own head and, and it can be, it can become like a bad habit to think that you need to grind and always be working in order to, to move things forward. So, so definitely that's the mindset angle. The other angle, which we touched on in financials, but often you can get stuck in a hamster wheel because your, your, the financial pricing of your business is not congruent with actually helping you step away because you're, you're too worried about, well, if I don't show up for work or I take some time off or I don't close this next client, we won't have, make payroll. Or, you know, if the business is on a red line or struggling financially- Y- you need to create a pricing model and have sales and marketing in place that can afford you to take time off, can afford you to work a 40-hour week as an owner, which means you need over... Or like you need pricing in there for managers, you need pricing in there to cover all your overhead, you need pricing in there to not have to, you know, work crazy hours. So typically, most contractors, that means you gotta increase your margins and your pricing, which is a little scary, 'cause then it's like, "I'm not gonna-" Yeah close jobs," or, "People are already saying my prices are too high," or whatever. But realize that it doesn't really take a big increase to increase the profit, um, because usually a lot of contractors, like 5%, 10%, maybe 15% profit is, is what they're already sort of making. So to add an extra 5% onto your pricing isn't gonna make or break a sale typically, but that will go directly to your bottom line and could, you know, double or increase your profit by 50%. Uh, so getting healthy financially and putting the right pricing in place to afford the business you want in the future. So, um, just to k- stay on this, this line of thought here, I mentioned earlier about scaling up, and when you scale up you're gonna add managers, you're gonna hire more people, you're probably maybe gonna get some new software or vehicles or tools, whatever. So you need to be pricing for your company in the future, not how your company's running now. So, so realizing that just more revenue doesn't mean you're gonna be more profitable, but that you may have to increase your margins of profit To start to scale, because as you scale, your margins typically will shrink in the, in the short term while you're scaling. Once you reach, you know, that scaled-up level or, or, you know, more of a steady trajectory, then you can start to create efficiencies that improve your margins. But while you're scaling up, usually you're, you're hiring and buying and, and putting money, investing in the business, so your, your margins shrink in the, in the short term. I, I, I love that phrase that you use that the systems and so forth so that the business can afford you having only a 40-hour week or a 35-hour week, whatever it is that you choose. It's, uh, that's a real, a mindset shift in itself, right? You're, you're looking at what can be put in place to allow me to do that as the owner as opposed to, like you said, "Gee, if I don't show up, I'm not worthy of the success." So it's, um, yeah, there's some, there's some, a lot of introspection there I think that, that people can learn from. So c- let's talk about designing the business around your life. Now, you've said that one of your biggest breakthroughs was deciding what lifestyle and what revenue you actually wanted and then designing the business around that. So a- again, it's like, like, um, uh, w- we've said that it's one of those things that's easy to say, but how do you make that decision in practice? People call it different things, but common kinda term is clarity break, so taking some time out to actually, you know, think about the big picture, some quiet time. Typically outdoors is, is good but wherever you do your thinking. And just do some self-assessment. Put it in your calendar so you do this regularly. I would say every quarter is, is probably good, maybe even every month depending on, on who you are and, and what you wanna do. But every quarter's a pretty good cadence. And, and just figuring out what are your, your larger goals. Uh, for a lot of my clients, it's being able to take two to three weeks of vacation every year, like traveling somewhere with the family, um, not having to work weekends i- is a big one. Um, it's... I mean, they, there's definitely, they, they want to be wealthy and be able to afford, you know, a nice house and, or cabin and, you know, some nicer things. But typically it's just getting their time back, being able to enjoy their vacations, not being as stressed, which you may realize you don't really need to grow your business well beyond what you currently have. You just need to get more profitable. If y- you know, if you're already making $100,000 a year, and let's say you're doing, uh, you know, a million or two million in sales, you may not need to get to five million to enjoy your dream life. You might be, you know, two or three million with just, you know, doubling your profit, getting more efficient, only taking on jobs that are worthwhile, realizing that it's a lot easier to manage a smaller company than it is a larger company. Um, as long as it, the company's at a size where you, there's enough revenue to hire managers and, and some of those, those extra, you know, layers of, of people that you'll need. Um, but oftentimes realizing that, you know, growing a huge business, you know, great for the ego and, you know, definitely, uh, great to be aspirational there. But at the end of the day, what you really want, you, you know, that learning to build that big business is great, but for your lifestyle, you probably don't need to change a whole ton or grow some massive business. It's, it's really more about the, the profitability at the end of the day. Yeah. So is it a case then that many entrepreneurs, and particularly in construction, they're actually sacrificing the life they wanted, I, I guess almost in order to build a business they don't really need? Is that a fair reflection of, for some people? To some degree. Um- It's, it's easy to, to I guess simplify this challenge or this issue of, you know, just get profitable and you'll make more money and then you can live, you know, the lifestyle you want. Obviously, there's a lot of challenges and, and as mentioned, you know, the, the systems, the processes and all that is definitely an, an enabler. Finding the right people and realizing that you're never gonna solve all the problems. You know, being a business owner, it's, it's like, you know, playing a full contact sport. You, you're never not gonna get hurt here and there. Yeah. Yeah. But, but there's things you can do to help from getting injured or, you know, stay healthy and, and all that kind of stuff. Uh, so S- so yeah, I mean, working towards tho- those, those goals as mentioned, and, and just not, not getting too far down the rabbit hole, if you will, of, of pushing growth without putting your head up for air and, uh, and, and, you know, asking yourself, "Is this necessary?" I guess, at the end of the day, or, or, "Is there an easier way to get where I want without going through all the, the, the, um, the difficult, um, parts?" Yeah. So for our listeners and, and just in practical terms, what... reflecting on your journey to get more of that balance, what was one thing you had to give up or say no to, to, to enable that balance to occur in, in your work and life? So this will change as you grow, um, as a business owner, and I think there's, there's seasons to business and there's also, you know, your business life, if you will. So I know when I s- was starting business, I would do a lot of, you know, in-person events and I would try to network and meet a lot of people. That's definitely changed over the years. Now I want to be much more, uh, niched, if you will, or specific with the people that I meet and the meetings that I have. Same with, like, networking events and conferences. You know, is this just an excuse for me to go out and- Mm. Mm-hmm rub shoulders with some people? And it is great- Yeah being around entrepreneurs and I'm, I'm not saying, you know, don't go to networking events and things like that. But realizing that, you know, I'm gonna s- spend money on this, I'm gonna travel, it's gonna take up a day or two or three days, and if it's specific and I, you know, and I understand that, great. But just trying to, you know, push yourself everywhere and, and take meetings with everybody, um, you, you gotta guard your time essentially. And then blocking your calendar, so getting strategic with your calendar. I put in blocks of, you know, maker time or, um, creativity time where I'm working on the business, and then I've got, you know, time blocks for working on my client work and things like that 'cause I know that I need to block that out, otherwise my, you know, schedule will fill up and I won't have time to do the, the actual, you know, work that matters for my business and my clients. Um, blocking out lunch is another one. It's easy to, to skip lunch or just grab a quick bite and keep working all day and... It, uh, so, so getting intentional, um, and yeah, being the owner of your schedule and the owner of, of your Uh, your, your meetings, I think, are, are two big ones Yeah. It's, it's such an interesting term, isn't it? Being intentional. I think there's a... You know, everyone could learn a lot from that about being more intentional in your day, in your week to, to, to own your time as you, as you suggest. So let's, let's put you on the spot here a little bit, Derek. So at the moment, you're currently weighing up some very different opportunities to go deeper with coaching clients and build that part of the business, building a SaaS product, you know, scaling your existing model and so forth. So based on, again, your experience, and you're in the, you're in that, that difficult time at the moment, what makes the decision difficult, or the decisions through that difficult, and how are you thinking through which path to take to keep that work-life balance? Yes. So I have long-term goals y- you know, 10, 20, even 30 years out, and that keeps me aligned with my true north of, uh, to know where I've go- I'm going, and I set the stage for where I'm going now six or seven years ago, probably kind of as I was getting into coaching. And I've achieved what I wanted to with, with the coaching company to fully systemize a general contracting company. We've built out the systems, the documentation, the software stacks, and, and, you know, we can f- we fully systemize general contractors top to bottom. Um, so that was an, an ambition of the company to, to get to that point, um, and i- in doing that, enable, you know, all of our clients to live, you know, better lives, make more money, more time, and, and everything that comes from that. And I, I've always been a big proponent of focus. I think, especially younger entrepreneurs, and been there as well, is you see there's so much opportunity out there that it's, it's easy to be like, "This is the next thing," or, "This looks easier." You know, see the marketing behind stuff, whatever it may be, and, and, and, you know, I should go do that, right? Shiny object syndrome. So I've been very 100% focused on, on growing the, the coaching consulting company, uh, to where it is now, and, and I feel like we've, we've definitely matured as, as a business and we've got a good cadence of clients, um, and some, you know, long multi-year clients. And we'll continue to grow and expand that. Um, and then we are producing a, a SaaS product right now to help with the whole financial management job costing of construction projects, 'cause all of my clients struggle it, with it when we start, and even after working together, it's can still be a struggle. Um, so we've worked through those scenarios with many different builders. They use different processes, different softwares and, and all that. So we're, we're creating a solution for it That's, you know, a little bit, not necessarily on the back burner, but it's, um, it's another, what's the word? Um, iron in the fire, y- if you will. Yes. Yeah. As it directly dovetails and ties into the, the coaching business and would be, um, a great addition to, to what we're already doing. So I think My advice is stick with what you have until it's working and you're happy with it, and then explore other opportunities instead of jumping ship or trying new things. I've, I've seen many entrepreneurs do that prematurely, where they've started one thing, it never really gets going, so they jump to the next thing, and then it never really gets going, and they jump to the next thing. And, and they always think the next thing is gonna be, you know, the, um, the silver bullet- Yes if you will. Uh, where, yes, there may be times to pivot and things change and, and what have you, but spending enough time to really get good at something and bringing it to completion of, of the objective that you set out to achieve with the business is, is great. And the common one I see in the c- in the contracting world is, is real estate investment. And I, I did this, where it's like you're a builder, I can buy a house, I can flip it, I could buy houses and rent them, um, which is great. It's a, it's a beautiful business model, and a lot of successful contractors do that. But they do it too early, where their construction business is still kinda struggling. It's not super profitable. They don't have great systems and processes, and they, they feel the shorter path is to s- get into real estate investing without realizing that that's a whole nother business. There's different people involved. There's everything from finding houses to, you know, buying them and, and putting them on market, and there's a whole... It's another business essentially, but they, but it seems like it just ties in 'cause they can do the building and, and whatever. So that would be an example of get, you know, stay focused on one thing until it's working well and you've achieved what you want to, and then you can start to kinda branch off and, and kinda have your side, you know, business until if that overtakes the, the initial one, then, you know, you can sell it off or just have it kinda self-managed and, and go down your, your new path. Um, so that's how I've approached it and what's worked well for me, and it's a great way to... Everyone has their own ambitions or whatever. I like to start new things and, and that. But, um, it's a good way to achieve results while still being open to, to new things and, and having, you know, a reoccurring success, um, story. Yeah. All righty, so for a contractor listening to us right now, and at, at some point in our discussion they've recognized their own business and what you're describing. So, um, put your coach's hat on for us for a moment. What's the one thing they could do this week that would likely create the most traction for them? For me, if I could only do one thing or, or, you know, tell a, a contractor out there one thing is to figure out precisely your overhead margin over the last 12 months And then look at your estimating and figure out what you wanna pay yourself as profit. Put in your contingency if your estimate is off. Make sure your project management is in there and any miscellaneous things are in there. And figure out exactly how much you need to charge in order to live and have the business you want. A- and if that number scares you and you think you can't sell jobs at that number, or you don't have enough leads to facilitate that, you'll, you'll realize where what's broken in your business essentially, because that's the kinda magic number, if you will, that you need to be selling jobs at to have the business operating the way you want it. Yeah. Okay. All righty. So looking forward then, Derek, um, what does a truly well-run construction business look like to you? Great running construction business is where the owner is working less than 40 hours a week, 40 or less, and, and like manageable 40. They're not stressed. They're, they're intentional. You know, if they take a day or two off, no big deal. So that, that's the first thing I would look at. The second one is the camaraderie of the team. Is everyone on the same page? Are they happy? Are they working together? Are they communicating? Are there, you know, none of these, we don't put this person with that person on the same job site? Yeah. Yes, yes. Or we keep this admin person out of, you know, the financial person's way because they, they butt heads. Um, and you- they're, whatever. You know, it happens. Y- everyone's got, you know, personalities and things like that. So I'm not saying that's like, uh, a sign of a bad company or anything like that. Um, but generally speaking, everyone should be getting along and on the same page and, and happy to be working together. Um, and then the owner is considered a competent leader, I think is, is maybe the third requisite there by the team. The, the team's getting along, but they respect the owner. They know the owner has their, their back, that generally they, they want what's best for, you know, the people working for them. I, I think if you have that sort of environment, y- you're doing well and, and you've got a successful construction business. Yeah. Zooming out of that just a little bit, do you believe that's achievable for most contractors or, or does it need to start with the owner operating differently first? So it's, it's definitely achievable, but it, it may be achievable by the owner operator or owner operating differently to, to some extent, you know? I- if things aren't going well, there needs to be changes, and as the owner, you have to take full responsibility and ownership and accountability for the, the business that you built. Yeah. Okay. One of the things on The Business Game we like to do, Derek, is to get to know the person behind the microphone just a little bit more before we finish. So we call it the quick-fire round or the rapid-fire round of questions, where I'm gonna fire 10 questions at you and ask you to respond in one sentence or less if possible. That's not an absolute, but just if possible. All right. Are you ready to go? To go. Okay. So are you a system... I know the answer to this. Are you a, what's most important, systems or hustle? Systems. But you also need a bit of hustle too, right? Come on, let's- You ne- you, you need both, yeah, at different times, as I mentioned. Mm-hmm. Yeah. Um, revenue or margin? Margin. Mm-hmm. Mm-hmm. Growth or control? Control. Mm-hmm. More clients or better clients? Uh, better clients, 100%. Yep. Document it or delegate it? Documentation comes first, so I'd have to say that. Yep. Okay. Owner-led or team-led? It's a tough one. Ultimately team-led. Mm-hmm. Interesting one for you, coaching or SaaS? It depends what you're going for. So for fulfillment and impact, coaching. Mm-hmm. For scalability, SaaS. Yeah. Very true. Yep. Lifestyle or maximum growth? Lifestyle. What's the one system every contractor should build first? I think marketing is, is a... We- you gotta generate clients. A- client acquisition. Hmm, okay. And lastly, what's one construction business mistake you'd happily make again? That one's got me thrown for a loop, I guess. Uh, I prefer not to make mistakes twice. Yeah. Although if I had... I guess I know a lot that I wouldn't wanna make again. Mm-hmm. All right, let me, let me reframe it. What's one mistake that stands out that you learnt the most from? Not knowing my financials, my, my numbers, which I've, I've touched on a bunch of times, and that's the reason why, 'cause I've, I've lived that pain and it, it affected, uh, my business and my life tremendously of not knowing my, my overhead margins and my pricing, um, properly. Yeah. Um- No, th- there's a good message in that too, right? As a, as a finishing, a finishing kind of thing. Mm-hmm. So it, it ties in, it ties it in and ties the, the discussion- Right up nicely. I wouldn't wanna live through that mistake again, but I would happily make that mistake again to learn and be a- as proficient and understand the, the importance of, of knowing your numbers as much as I do now. So in that regard, I would, I would make that mistake again to have the weight that I do now on knowing your financials and watching your numbers. Yep. Yeah, fair enough. All right. And final question, Derek. So Derek Isaac, if business truly is a game, what's your definition of winning? First thing that comes to mind is the cliche answer of doing what you want, when you want, with, with who you want. No, that's fair enough. Absolutely. All right. So finally, where can people find you and your business online? Rapidresultcreators.com. You search us on any search engine, we should pop up, so rapidresultcreators.com. From there, we've got all the information about our coaching programs, free resources, courses, um, links to all our social, and then of course, a business builder call is what we call it, but, you know, strategy call if you'd, if you'd like to get a, on a call with me, you can, you can book a call there. All right. Fantastic. Well, look, that's all we've got time for. If you enjoyed this episode, make sure to subscribe to The Business Game and check out the playlist for the level of business you're currently playing, because every founder is somewhere on the game board, from zero all the way to over $50 billion. Choose your level, and we'll see you next time. Derek, thanks very much. Thank you, Steve. It's been a pleasure.