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From Going Bankrupt to Scaling 5 Construction Companies Beyond $5 Million · Contractor Business Builder Podcast

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This is a story of how I went from being a depressed
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contractor working 80 hours a week to scaling 5 construction
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companies beyond $5,000,000. As a 41 year old living in North
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America, there was a time when I had to shut down my business.
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My revenue was doing every month was over $100,000, but in
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reality I was losing money and going into debt.
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I had worked with three different coaches, none of them
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could help me at the time and there's a point where I
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seriously questioned if this industry was even worth staying
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in. Fast forward to now, I've helped
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5 construction companies scale beyond 5 million, I've helped
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generate or $11 million in profit for contractors, and most
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importantly, I've got the free time I always wanted to spend
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with my family. Basically, I've built an
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inspired life for myself that I've always wanted.
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I didn't have it easy though, and I'm going to share
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everything in this video, including the critical mistakes
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that destroyed my construction business so you can avoid them
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and save your company. You might think these lessons
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aren't for you, and this is exactly what I thought before I
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had to close my business. So with that being said, let's
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get right into it. Before scaling any company,
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before having any success, before any of this even
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happened, I was just a regular 18 year old guy living in
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Canada. I started on the tools in
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construction, did a number of different trades, ended up on
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carpentry, framing, loved being outside framing houses, got good
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at it, became a foreman, led a crew and decided I wanted to
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move out and start my own business.
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So I started off as a subcontract framer, did that for
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a number of years, got really good at it, started doing luxury
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homes and then thought I want to scale up.
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I want to be the general contractor, want to have my own
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clients not work for, you know, other home builders.
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So I moved into getting into some real estate flips and
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remodels for clients. And one thing led to another and
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I actually grew my company really quickly.
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I was able to triple revenue in one year.
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But the thing was, I was not focusing on a lot of key parts
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of my business. I didn't know what I didn't
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know. And this rapid growth actually
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led to my ultimate demise with that company.
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So first, how did I actually triple my revenue with my
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company? Actually put some time and
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effort into my marketing and I worked like crazy and got some
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luxury projects, larger projects.
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My project size kept growing and building.
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That enabled me just to keep fueling the company, hiring more
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employees, growing and scaling. You know, I thought I was
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winning, but in reality I was failing.
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I just couldn't see it and I was trapped in my business.
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Without me. It was like a House of Cards and
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everything would collapse. What I never realized was my
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business was growing on paper, but is actually just getting
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destroyed triple my revenue in 12 months.
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But I made some critical mistakes that destroyed my
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entire business. The biggest mistakes that I made
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was not understanding the financials of my business, not
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understanding what profitable actually was.
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I was not charging appropriately for all the project management
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for all my time for the pre construction that was going into
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projects and I didn't have a handle on my actual margins and
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and what I should be charging. I thought I was always charging
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at, you know, the higher end and I was making good money.
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But it became really evident very quickly that I was losing
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money and I was just taking on more debt to facilitate the
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growth of my company, which was a recipe for disaster.
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I'd also gotten involved with a lot of real estate investing.
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I was doing large projects, putting a lot of money that I
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had taken years to kind of accumulate and to turn that into
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to flip projects and, you know, rinse and repeat.
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But I just didn't have the wherewithal or the business
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knowledge or the acumen to have a good team around me as well.
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And one thing led to another and as I mentioned, the House of
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Cards that eventually fell apart.
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I knew the importance of getting outside help of of learning.
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I was constantly, you know, reading books and improving my
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personal development. I hired 3 coaches throughout the
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the time frame of that business. All of them were able to help me
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in some way, but a lot of it was kind of mindset.
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None of them had really specifically worked in
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construction. So they just didn't have that
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business knowledge specific for my company and what I needed.
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And there wasn't anything concrete besides is giving me
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advice, which was good at the time, but it didn't really build
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my business. It just gave me some direction
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and left everything up to me. So as the business started to
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fall apart, it got worse and worse.
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I, I took on loans and debt to facilitate the growth, thinking
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I just need that next project that, you know, we were landing
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large projects. So it seemed like we were
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winning. But when we sat down at the end
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of the day and realized we're behind on taxes, we're behind on
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payments, you come to that realization that you've messed
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up. You've build.
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It was such a hard time in my life.
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We ended up having to lose our house.
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We lost essentially everything that we owned.
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Starting from scratch, having to go to my family and have people
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know that essentially all of this success I had built was, I
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thought at the time for nothing. It was a very dark time in my
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life and I had to turn it around.
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There's a famous saying by Henry Ford, failure is simply the
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opportunity to begin again, this time more intelligently.
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So I wasn't able to just start over it again.
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They had to let the dust settle. But this time around, as I
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rebuilt myself, I did it with intention, with intelligence,
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and with all of that experience and a lot of lessons learned of
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what not to do after everything fell apart, I didn't let my
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vision die. I knew I still wanted to be
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successful business owner, but I had to start somewhere.
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So I applied for construction companies.
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It's it's what I knew got hired on as a project manager in a
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very large construction company doing over $100 million in
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revenue per year. And I had built some systems in
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my business and started that. I understood the importance of
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it. But working in such a large
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company that had been finetuned over decades was an eye opening
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experience as far as how their team structure is, how their
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systems operate, how refined and specific different parts of the
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business could be. And the real role of the owner
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and the general managers and all of the other personnel and
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business was, was very eye opening.
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I worked there for a while. I also worked for another
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contractor as a project manager and they had amazing systems in
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their business. So through that experience and
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and my own experience, plus all the trials and tribulations that
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I've been, I really honed in and and realized I can build an
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amazing construction business and I know all the systems.
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I know what not to do and what to do.
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I'd hired 3 coaches through my career but none of them really
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had that inside knowledge because they were too kind of
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general generic and mindset focused.
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So at this point, I'd had well over 15 years of knowledge and
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experience in the construction industry through various
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businesses before my business collapsed.
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I was already starting to coach and mentor people.
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I'd started like a mastermind group coaching sort of program
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as well as been facilitated with other people in my city who are
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starting businesses. And it opened my eyes that I had
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so much knowledge and ability to help share with them and we were
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able to help them scale up and grow their company very quickly.
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What I thought like basic type of advice and, and now that I
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knew this is how you do things, it just it was so easy to like
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see them progress coach more and more companies, specifically
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contractors, we need to refine the system, provided
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documentation, built out their software and help them scale
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beyond $5,000,000 for multiple companies.
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And it was so rewarding and assuring it for me when I can
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see things click for someone, I can walk into a business and
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say, like, yeah, your actual profit margins are this your
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your overhead is this you should not be charging this on your
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estimates. This process doesn't work for
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you. This is how you set up your
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sales process. This is how you do quality
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assurance on on project. So there's just so many little
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things to get right that it's difficult.
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But when you know the pieces and you can focus on what needs to
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be done in order create, things can happen very quickly.
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One of our clients, James, they started at a couple million,
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maybe 2 million or so. We were able to help them scale
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up well beyond 5 million. Now they're closing some quite
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large projects, doing some government projects and things
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like that. And things were just out of
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place. Like the team was great.
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They had scaled up, they had some basic systems, but really
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it was just a lot of chaos. Everything lived inside the
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owner's head did all the estimating that all the project
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management. So we were able to come in and
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create specific roles, hire people for those roles, offload
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delegate, improve profitability. They were able to double revenue
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in 1 1/2 years and and while also doubling their total
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profit, which is not an easy thing to do, but they were able
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to do that. And my other client, Rob, he
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came to us, he was in a bad spot.
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They had negative profitability, a lot of debt.
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It was one of those things where you look at and you're like, I
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don't know if this business is going to survive.
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He's pulled through, he's put in a lot of hard work.
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We've helped him with his systems, with his pricing and
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profitability. He's now pulling out 12% profit
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margins on projects and he's closed a number of new large
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home builds for this year's on his way to scale up to multiple
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millions of dollars in revenue getting to that $5,000,000 mark.
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And then another client of mine, Chevin, they had a reputable
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business had been around for decades.
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They were doing some a bunch of different types of, of
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construction projects, but typically new homes and kind of
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like track builds. They had good revenue, but
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again, they're just in business for so long that they didn't
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have any good systems. It was just sort of a reputation
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and the way they did things were able to come in within a one
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year time period. We installed systems and
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processes throughout his business.
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So he wasn't the one who hadn't needed to answer the phone.
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He only got contacted when he had to like have a qualified
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lead. We did quality assurance on
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their projects with with checklists and everything and
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they were able to start finishing projects weeks
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earlier. Normally they kind of hit the
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end of a project and they had weeks of ketchup punch list
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stuff to do. None of that happened.
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They were able to turn better profits and scale their company
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on their way to high sevens 8 figure company.
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Now all of this, we've generated over $11 million of profit for
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contractors that have joined our coaching program.
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The coaching program has almost 100% success rate.
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This is the reason why we only work with contractors.
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We're very specific with general contractors who we can help
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grow. We don't work with other
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companies. We don't work with people who we
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know aren't going to get the benefit out of our program, so
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we can't help them. We simply don't work with them,
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even if they've got a lot of money they want to invest just
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because we know the program is not right for them.
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Period. The lessons I've learned with 20
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years of experience in the industry, these lessons took me
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a lot of time, pain, and money to learn, but I've I'll reveal
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them here in just a minute. I can remember breaking down in
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my bedroom crying, thinking my world is falling apart.
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Looking back now, I can attribute that to these specific
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lessons. So the first lesson that I
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learned was bad pricing kills good businesses.
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We had a fantastic business, great people, happy clients.
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On the outside everything looked amazing.
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It looked like we were on track to build like a really one of
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the strongest building companies in our city.
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But my pricing was off. I'd grow in too fast and I did
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not have the financial controls that I need.
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So looking back, it's not that we didn't have projects and we
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had marketing out. We did decent marketing, but it
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really wasn't in the place we were always marketing and
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filling that capacity and doing work with too many different
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types of clients. We worked with investors,
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residential people, larger development companies and things
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like this. And we just took on projects,
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some government stuff too. We taken all these different
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types of projects without really knowing the financials.
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And being specific about the margins is so important.
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You need to be able to look at your financials for the past
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quarter, for the past 12 months and know how profitable I am.
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My 5% margins, 10 percent, 20%. And how does that affect my
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estimating markup? The amount you put on top of
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your your estimates. If you're marking up 20 or 25
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percent, that is not 20 or 25% margin.
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That's like a 1517% margin. If you've got 15% overhead,
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you're not making any profit at the end of the day, it's just
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the numbers don't add up. And I didn't know this at the
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time. I understand obviously the the
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more I charge, the the more profit we are.
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But I was missing a lot of things in my estimate.
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So this is the biggest lesson. Biggest take away is, is know
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your pricing and do not take jobs that don't align with your
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company. Don't sell yourself short.
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Don't take on projects just to stay busy.
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It's not worth it. And make sure your marketing,
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yeah, very high level and only taking projects that you know
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can fit your production pipeline, fit the type of
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services that you want to do, the type of clients that you
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want to work with. When you've got those things In
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Sync, you can just keep ratcheting it up and build a
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beautiful company. The second lesson I learned is
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cash flow matters more than growth.
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Just growing really fast is a recipe for disaster.
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Unless you have really good like financial controls with
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deposits, invoicing and you've always got a very tight pulse on
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your numbers, things can go off the rails really quickly.
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Because if you, when you take on a larger project, you've gotten
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a larger expenses, larger bills, larger cash fluctuations.
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And if you miscalculate that or you don't have enough money
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coming in from new projects, which is often happens beginning
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of the season, you think, oh, we're on, you know, we finally
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reached our, the point of our business where we want to be.
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We've got these five new projects.
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We're going to make, you know, millions of dollars this year.
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And then you get kind of to the end of those projects and you
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realize that they're all kind of stopping at the same time.
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You don't have new projects coming in to continue that cash
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flow. And now you are in a really
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rough spot wondering how you're going to make payroll, how are
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you gonna pay your bills? And even companies that are
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profitable, if they don't manage their cash flow property can go
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bankrupt because of that mixed mash of money coming in and
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money going out. Another lesson I learned the
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hard way is debt can hide problems in your business.
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That's why you need to be looking at your financials and
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you need to have a banking system the way that your banks
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bank accounts are allocated to ensure that you always know
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where your money is and you're setting money aside for specific
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things. Taking on debt to facilitate
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growth can feel right in the moment.
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And there's some gurus out there that say, hey, there's good debt
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and bad debt and if you can get good debt, take all the debt
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that you can get. But most business owners,
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especially contractors who are growing, you haven't lived or
14:08
experienced a business at that size yet.
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So if you had 2,000,000 going to 5 million, realize that taking
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on debt to help get there with investing in whatever may make
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that 5 million just a more chaos, more craziness.
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And you as a business owner aren't going to have the acumen
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or the the experience, the skills to operate a business at
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the sky. So just pushing your business up
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and taking on all the projects you can.
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Can it be that House of Cards that ends up falling over?
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So be very careful with taking on debt.
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A good managed company that has good marketing, good reputation,
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you're pricing properly. You don't need debt to grow your
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business. And be very careful about taking
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on debt just because you have credit and in the old banks
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gonna offer it to you. That's last night to learn.
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The hard way is most coaches are gonna teach you mindset, not
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execution. So they are going to tell you
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how to think about things. Maybe they'll give you a bit of
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specific advice from companies that they've had, but they don't
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really teach you how to execute and give you the assets you need
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in your company. That's the difference.
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When I started coaching with clients, we developed a suite of
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documentation. We have software that we
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provide. We give everything like the
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ideas of business in a box, like a franchise type system where
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it's flexible, it's customized, it can work with any type of
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different general contractor, but you're given all of that
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when you start. So it's not just the coaching.
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The coaching is for the implementation, for the
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execution, for how to hire the right people, implement the
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right system, but the the basis, the backbone, the foundation,
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the bedrock of your business is provided for you and you build
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it. You create it, or you get us to
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do it for you. These coaches that I mentioned,
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I'm happy I did it. I overspent probably some of
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them, and I know I did on some of them.
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It's always helpful just for the accountability.
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But at the end of the day, it was the wrong choice because I
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should have gone with a coach that was specific for
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construction and specific for my business.
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I'm sure they would have spotted things in my business that these
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other coaches missed. The last big lesson I'm going to
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share with you here is systems is the only way to remove stress
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and scale properly. You'll hear out there like
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counterculture maybe. I don't even know if it's
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counterculture. I was, you know, I've been
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talking about systems before they were cool.
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There's people saying that, you know, the system's not gonna
16:25
change it. You need, you know, the people
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is, is the big thing. And yes, your business is built
16:29
on people. Your mindset is important.
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When I mentioned mindset about those with coaching, it's not
16:33
that that's not important. But at the end of the day, if
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you're going to scale a business, you can't do it
16:38
without good systems, because good systems is what's going to
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enable you to hire the right people.
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Good systems is going to enable you to have an organization
16:46
chart with roles that you can put people in with a training
16:49
system to find the right person, train them properly, make sure
16:53
that they're actually effective with their job, what to do if
16:56
they're not, how to hold them accountable.
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All of that stuff is documented and you've got the software,
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you've got the Intel, you've got the training behind it so that
17:04
they know how to be effective. Of course, you still need a
17:07
competent person and you need someone who's willing to be
17:10
incorporated into the culture of of your company and actually
17:13
gives you know what's going on. Of course you need that.
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Good systems enable good people to make great companies.
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You don't need the most amazing people.
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Yes, you want a players. There's going to be a lot of
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people in your company that aren't going to be top notch,
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amazing A players because you would never afford a full
17:29
company of these types of people.
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You need systems and processes in your business.
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That's what's gonna give you efficiency, profitability, ease
17:36
of mind. You're never going to be able to
17:38
take a vacation without having good systems in place.
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Even if you bring in a general manager who's amazing, who's
17:44
built a business, who can run everything without you, they're
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going to have a hard time and it's going to end up falling on
17:49
you if there's not good systems and processes in place.
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So this is a must and it's something that you need to get
17:55
into your brain, like I need to work on my business to build
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these out or find someone like us who can help you with it so
18:02
that you can enable your people to be great.
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Because good people with good systems make great businesses
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and their their jobs are just going to be so much more
18:10
fulfilling because they're not scratching their head wondering
18:12
what they need to do every day. It's all there, it's fine-tuned,
18:15
it's efficient. Everything I learned after
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scaling 5 construction companies to 5 million and helping
18:20
contractors generate over 11,000,000 in profit took me a
18:24
lot of hard work, time and effort.
18:26
But in my coaching program, I work with you one-on-one.
18:29
So you can save years of time and scale your construction
18:32
company by building systems. But since our success rate is
18:35
almost 100%, we don't accept everybody, do not accept
18:38
contractors who are not willing to put in hard work on their
18:41
business. We don't accept contractors who
18:42
don't value systems, and we don't accept contractors who
18:45
aren't serious about their growth.
18:47
So if you're serious about scaling your company with
18:49
systems, click the first link in the description below to apply
18:53
to work with us in our coaching programs.
18:55
And if you want to see how I scaled construction company
18:58
beyond 5 million, then watch this next video where I break it
19:01
down for you.