What's up guys, welcome back to the homework assignment podcast.
I'm your host as always, RJ Patino.
And yeah, we've got a good episode I think prepared for you guys.
Kind of been going over some of the things we want to talk about.
We have a few guest speakers lined up, which I'm sure you guys have all really enjoyed
just trying to coordinate some schedules together and whatnot to get everybody on the same
page, but we're really excited for the future guests that are going to be on here.
But as far as today, today I wanted to talk about a few things.
Number one, can you guys see my socks?
Dang, well I'm wearing mismatching socks again, so I think we're going to make that
an official thing at this point.
My wife does do our laundry, she's very good at it, but sometimes I just see socks just
sitting in this little cubby where they're all mismatched and I just grab two of those
instead of a pair in the other drawer.
Might be a little bit of laziness in me, but works out.
Here's one thing I'm curious about though, do they have to be both long socks?
What do they look like?
Oh, of course, yeah, you can have a short sock and long socks, then you're just a freaking
maniac, you know?
If I ever saw someone doing that, I wouldn't even talk to them anymore.
My dude, you're out, you're out cold.
Well, there's something that I think we've experienced a little bit of, or quite a bit
of in the last four years of our company that I kind of want to touch base on, because I
feel like it's extremely important and that is, well there's kind of two things here.
There's number one, understanding your company's numbers and understanding your finances and
then along with that kind of comes a sales portion, especially as, you know, entrepreneurs
or people run the business.
And then the third part of that is a momentum.
And the momentum, I'm going to kind of focus that on, you know, the other two parts here
and how they kind of correlate, but momentum goes into so many other things, which is
really important.
So I'm sure I'm going to have a few tangents on that.
But number one, one of the biggest things that has really changed my perspective of running
a company and what has changed our company as a whole is understanding our numbers.
So the last four years we have grown drastically.
And I never really understood that.
I thought, you know, this is the first time I've actually truly created a company.
So to me, I thought this was normal, the kind of growth we were having.
And so it wasn't until I kind of started, you know, talking to other people who were,
you know, on a way bigger level than I was, like where I actually started realizing, oh,
we've actually done something really incredible here.
That's kind of out of that ordinary zone.
And understanding the growth that we've had and understanding how we've got there is one
thing, but the other part of that is to really understand the data.
And every company needs to understand data because without data, you are literally rowing
your boat blind without a compass, compass, whatever.
And you could get lucky and you could end up at Catalina Island or you could end up in
a storm and be topside.
So for the first three years, my company's been extremely lucky.
I think we ran into quite a few storms.
It didn't topside our company, but we ran into quite a few storms that we could have
easily avoided by understanding the data.
And there's a lot of different types of data.
There's data for your sales department, for your ops department, there's sales for your,
you know, your finance department, there's data for your finance department.
There's so many different things that you should really be understanding.
I've talked about this so many different times.
I'm going to reiterate again that no matter what trade you do, and even if you've done
it for 15, 20 years, to actually run a business is not even in the same genre.
It's not the same at all.
It's a completely different set of skills and a different set of, or understanding of
so many different things, a different database of knowledge that you need to have in order
to actually run and build a successful company.
And so the data itself that, you know, we brought in a consulting company a little while
ago, which kind of taught us how to understand some of the data we were getting and what
data we were really needing to look at.
And what data was a priority, right?
And so one of the biggest data points that every company should be focused on is their
sales.
And the reason is, is because without clients and without income, without money, you don't
have a business.
So there is nothing more important on the data end than your actual sales, your prospects,
your revenue that you're pulling in, and then all the data that, you know, how you use
that money and who you pay and who you hire, all that stuff comes after actually acquiring
the company or the business.
Sorry.
And so that is kind of one of the first things that we started to focus on.
And we built this sales trend analysis.
And I'll kind of show you guys an example.
I'll put it out, if you're watching YouTube, you guys will be able to see the graph that
we use.
But basically, it takes the last, you know, for us the last three years or four years
of business and it shows us every single month, you know, the revenue that we brought in,
the sales that we brought in, right?
And then based on that, we're able to put in a goal and say like, Hey, this year I want
to do, for example, $10 million.
Well, then it tells me exactly based on the history of data that we have in that sales
trend analysis, tells me, Hey, you need to sell, you know, $600,000 in January, 800 in
February, and so on and so on.
And so what it does is it also told me, Hey, in your first quarter, you sold 19% of your
total revenue that year.
And the second quarter, you sold 20%.
Third quarter, you sold 29% in your fourth quarter, you sold 33%.
And what was interesting about knowing this data is it did a couple of things for me.
Number one, apart from me being able to set a goal in it, literally telling me how much
I need to sell each month based on the trend from the last three years.
It also told me what my biggest and most revenue generating quarters, profiting quarters were
in a year, right?
So most people in construction, you know, there's certain areas where people really
bank a lot of sales.
And if you're, you know, a remodeler, one of the big seasons is like, right when taxes
come back, everybody spends all their tax money on, you know, a shower upgrade, all
that kind of stuff.
And so we're on a bigger scale, but when I was a little bit smaller, that's like, that
was a good season for me to be in.
And a bad season would be was, you know, like a summertime people were on vacation.
So that was kind of just like a lot of people were spending more money on that area, so
they weren't putting in their houses, right?
And then the fourth quarter in my head logically is like, well, dude, that's, you know, you
got Halloween, Thanksgiving, Christmas, New Year's, nobody wants to be doing any work
on their home.
And so that kind of makes sense, right?
So when we ran this analysis, I came to understand that our fourth quarter, right?
So October, November, December, were our highest revenueing months of the year, all three years
in a row, all three years.
And that set me back a little bit like, what in the world are we doing?
How is that, you know, how does that make sense?
Because I thought, you know, it was kind of like the first quarter and maybe the third
quarter where we were doing a lot of revenue or second quarter, and it was the complete
opposite.
So like first quarter was our lowest, second quarter was our, you know, second lowest and
then third and fourth quarter just kind of went through the roof.
And I thought that was super interesting.
So what that did for us and our company is knowing those things, right?
We're able to now understand that, hey, and, you know, right before the third and fourth
quarter, we want to put a lot more money into marketing, right?
Into Google and ads and all this stuff because that's where we are going to start generating
even more profit, right?
And come January time, well, January time is our lowest quarter every single year.
Okay.
So we're not going to put too much into marketing.
We're going to focus on maybe some different ways to generate sales, whether that's boots
on the ground, doorknock, you know, that kind of stuff.
So these are just examples, right?
But it really taught us how to understand what our business does, how it gets it done
and where we can capitalize even more or where we can save money on and pull back when we
know, okay, no matter what happens here, this isn't going to be worth any money.
So we'll wait and put it over here, right?
And make more money, you know, delay gratification of the third quarter versus the fourth or
the first quarter.
And so understanding your data just literally changes the game completely.
And then the third part of that, right?
So you got your data, your sales, which, you know, those who are correlating in this moment
and what we're talking about.
And then the third part is that momentum.
So one of the best things that I think people don't take for granted is momentum.
Momentum is literally its own power, you know, its own source of just energy.
I don't even know how to explain it, but it's crazy how momentum works.
So one of the things that we're really focusing on our company right now is talking about our
wins.
So, you know, especially in construction, and again, I haven't run any other type of
company.
So I don't know how it works there, but I know there's momentum that needs to be created
in every single industry, but in construction, we have a lot more, I don't want to say disappointment,
but we have a lot more hardships, I feel like, than most other companies.
There's a lot more, there are more disappointments, you know, people not keeping the word like
subs, or we're getting off schedule, or there's a change order homeowner wasn't expecting
because they had mold in their walls or anything like that, right?
So those is kind of navigating, truly navigating chaos more than making sure just a schedule
stays on track.
And that's why I always say general contractors in the construction industry, we are controllers
of chaos.
That is literally what people pay us for.
It has nothing to do with so much the quality and stuff, which, you know, for us is always
there, but really it's controlling, you know, 80 moving pieces in one schedule, making sure
things get executed and we're not perfect and nobody ever is, right?
But so getting back to my point is, you know, we have a lot of days where there's just,
it's a little bit negative sometimes, right?
You know, we have 30 jobs going on, for example, I can guarantee every single day there's handfuls
of things that aren't going right or things that, you know, maybe our subs aren't communicating
or somebody's didn't send an invoice and they didn't get paid on time because they
didn't follow the process.
And now we've got to do a check off the off the books to, you know, get them paid so they
can start because they're holding us leverage.
I mean, there's so many different things and it just kind of puts bad taste in your mouth,
right?
And when things happen in the morning, you know, it's easy to have a terrible day when
your first thing that happens is a negative, you know, has a negative impact on you.
And so, you know, it's all about that mindset and controlling that.
Well, one of the things we started, we started doing is really focusing on the wins and I'll
kind of share what we just actually put in place, but we put basically like a point system
in place.
So we have this kind of cold run and we have our weekly meetings on Friday and this is just
our team meeting where we kind of go over everything for the next week, kind of go over
any problems that some of our team members aren't able to solve themselves with brainstorm
as a team.
And then we go through, you know, some wins and stuff and kind of talk about some some
fun things that are coming up.
So anyways, we got this cold run and then we got these gold coins, plastic gold coins
and these fake little ruby jewels.
And so what we did is, you know, every Friday we go through wins.
And so what we do now is we're going to, you know, we have these coins that are worth one
point rubies that are worth two points.
So everybody's going to go through and talk about a business win, something that was a
win and whatever their, you know, their role was.
So project coordinator, oh, hey, we finally got this order that we, you know, order three
months ago, it finally came in.
Okay, great.
That's a win.
Sales, that's easy, right?
Oh, we sold a contract.
Great.
That's a win.
And so everybody starts getting these coins or rubies.
These are worth more.
So like, you know, if we land a million dollar contract like we did last week, that's pretty
much worth two rubies.
It's not going to be worth one.
So they're right.
So some wins are going to be worth more than others, but everybody will get, you know,
go over their win.
And if it's acceptable or if it's an actual real win, they're going to get a coin or a
ruby and they're going to be able to put in this pot.
And then we have this chart.
This chart ranges.
There's 12 of us in our actual office.
And that go through these meetings.
And so there's 12, I mean, there's a minimum of 12 points that can be one every single
week minimum.
But obviously those I get, you know, rubies or their wins are worth more.
It'll be a little bit more than that, but divide that by 52 weeks.
Anyway, so we have this chart and the chart, once you save up to like 50 points, like,
okay, we're going to go do this.
And then we're going to go at this point, you know, go car racing, then this point skydiving.
And then at this point, we're going to go on a weekend getaway trip, go camping and shooting.
And then on this, the final one, I think is a cruise is what we have.
And so we can build this point system.
And what this is doing is this is creating a momentum for our team, right?
So through all the negativity, all the crap that's going on, every week we're focusing
on these wins.
And it's also a motivation, right?
So if, you know, our project coordinator, for example, right, to be on a company's butt,
hold them accountable to get a certain piece of material in on time.
So our job can keep going forward and we can get our progress payments and keep our clients
happy.
He's going to be thinking, oh, we're two points away from going go car racing as a team.
Okay, I want to get my win this week.
I want to make sure something good happens, right?
And so everybody in the role starts to have this and then it creates this momentum.
And once everybody's winning every single week, that momentum is created and then it's
all about maintaining that momentum.
One of the things, we got two salespeople in our company right now, there's me and there's
Mikey.
Mikey and I, we have, you know, we started talking about creating this momentum and creating
a bunch of these, you know, getting a bunch of these cells and stuff.
And we picked up our game at following up with prospects and contacting people and really
being on them to kind of push them over that, that finish line and get them signed.
And we started signing a ton of contracts and it created this enormous wave of momentum
and we're just signing stuff left and right.
And now it's all about maintaining that momentum, right?
So yesterday we had a, you know, so we have this momentum yesterday.
I was sick as a dog.
It just hit me that night and I came into work because I just can't miss work.
This is who I am.
And I'm literally taking naps on our, on our couch in the conference room because I'm just
like literally dead.
But yesterday me and Mike and Mike was on phone very good either.
We closed three contracts yesterday and I was sitting there this morning kind of think
about like, dude, even when we were having the worst day, we probably worked about, I
mean, I know I worked about maybe 25% of my day actually and slept the rest and kind of
relaxed, but still was sending out a text or an email making sure, you know, I was getting
pre-con agreement signed and, and that momentum maintained and it was just really cool to
see because I feel like, you know, on other days I've been sick where that momentum is
not created.
That was just truly an off day.
Nothing really good happened.
You know, I'd be sick, go home, whatever the case is, but because of this momentum that
we had, not only did it stay because, you know, it's a wave, but it just made me want to make
something happen because we were on a winning streak, right?
It's kind of like the Snapchat thing with your friends.
What's it called?
Like, it's a streak, right?
So it's like, you know, those people that get a good momentum going, they don't, they'll
just send a random snap just to keep that streak alive.
And that may be a little bit, you know, back in the day, but that's what makes me think
of like the momentum.
People don't want to forfeit the momentum because keeping something, you know, adding
stuff up, it feels good winning.
It feels good.
And what a good leader understands is that without momentum, your team will fail.
You will fail.
You have to create a momentum of winning, a momentum of energy in order to succeed because
everybody's life is different, of course.
I don't need to explain that to you.
So I guarantee you somebody you talk to every single day is having an off day.
They're having a bad day.
Nothing happened, whether it's they didn't get good sleep, they're in a bad mood.
Maybe they're on a diet so they can't eat anything, you know, more than 900 calories
a day.
So they're probably ticked off every single day because that just sucks, right?
You know, maybe somebody, you know, missed a payment, you know, or they're freaking tight,
they need new tires and they don't know how they're going to pay.
Like there's so many things that are happening day to day basis.
You know, one bad link in your chain and that chain is worthless, right?
So if you come to really take a look at it that way to understand that when you walk
in the office, somebody in your team is having a bad day, that momentum becomes so much more
crucial to make sure that the way the team's working, the way the office is structured
and working and everything going on that the momentum that your company has is going to
carry over to them.
So no matter what happens to that person that day, they're still going to be motivated,
they're still going to want to get stuff done and they're still going to want to win in
order to maintain that momentum, even though something was off, right?
And so now you start recovering all of these lost tasks, all these lost wins, all of these
lost, all this lost time, you start recovering all this because of a wave of momentum, right?
So it plays such a big role and I think like I'm still learning so much more about momentum
as I continue to go on in my career, but I just, it's something that I'm like so focused
on at the moment and I've been focused on for a little bit because it's so powerful
and it's something you can't really see.
There's a lot of tangibility stuff that kind of add up to create that momentum, but like
the actual wave, you don't really see it, you just kind of feel it and there's definitely
markers to let you know that that momentum's there, but at the end of the day, a company
with that momentum is a company that is on their way to failure period because if you're
not going up and you're stagnant, the only way you can actually get back up is through
momentum through wins and having everybody work together as a team because if you're
not going up, you're going down.
There's maybe some plateaus in there, but either way, plateaus only last for a little
bit of time until it breaks.
So momentum's really key.
So kind of recap this little podcast I want to share that was what was on my mind is knowing
your numbers, understanding how your company works, understanding what important data you
need to be looking at to be able to run your business, to make smart business moves, make
smart business decisions, to capitalize on everything that's working and to change or
let go of all the things that are not working.
That is so important.
That's like your step number one in any business is to understand your data and receive your
data.
If you're not getting data reports every single week, then I don't know how you're a business.
You have to get your data reports from every single department.
If you're a one-man show, you better be pulling up reports yourself, understanding what reports
you need to see just to know what trajectory your path is.
Then going back into the data thing, my stress was at an all-time high for years because
I was living week to week.
So my cash flow was week to week, my sales were week to week, my jobs were week to week
and everything was failing because of my jobs.
Well, when you focus week to week and you have 80 million things that need to be scheduled,
we run into time problems because we're calling people last minute, hey, can you do this next
week, oh, I'm booked out three weeks and jobs will take forever.
That's what happened when I planned week to week on our jobs.
Sales week to week, well, I was just focused on a couple of sales, right?
And so I wasn't focused on bringing further leads in.
So I was going week to week on sales and I had huge gaps in signed contracts.
I had crappy cash flow because of it.
And then going to cash flow is when I was planning week to week, like, oh yeah, this
week was great.
I didn't put out a lot of money and I brought in more, but guess what?
Next week I have to put out 80 grand and I'm only bringing in 10.
I didn't know that.
So that weekend I'd be great.
Come Monday, Tuesday, Wednesday, oh shoot.
I don't have enough money to do this.
Crap, what do I got to do?
Now I got to go take our loan and I got to spend more money for capital.
And you know, so going week to week is terrible.
Now, when you're planning ahead and you're looking for the future and you understand
your data, right?
You understand what's coming in and you have a six week projection.
That's what we have is I have a six week projection.
So you know, my cash flow is projected out six weeks, right?
I get all my data in there of what comes out every single week, what's coming in every
single week, all my AR and everything.
And so I'm like, okay, you know what?
I'm going a little bit negative on what I'm putting out versus, I'm sorry, going negative
on what I'm bringing in versus what I'm putting out this week.
But next week, next week I'm like 300% positive.
So knowing that now, instead of stressing over the weekend, like crap, you know, and not
being able to actually be there with my family or my friends, I know next week's going to
be good.
I still got money in the account.
It's not a big deal because the next two weeks I'm positive, right?
So and then, you know, I mean, running jobs is obvious when I'm planned out, my whole
project's planned out versus going from week to week, things are smooth.
We're able to be ahead of schedule, finished jobs sooner and clients are happy.
We're happy and we get to progress.
So understanding your data and knowing what data matters for your particular trade or
business is super, super essential.
And then once you understand all that, you create this momentum of wins, right?
You create this momentum of understanding and you maintain it.
Now what's really important is there's a lot of things in this world that work against
you.
If you have, you know, any type of faith, most faiths believe in a, you know, a force
that works against you, whether it's the devil or, you know, kind of bad karma coming back
at you.
There's always a negative force that's really affecting you.
So understanding that too and being able to have solutions in place to bring your team
or bring yourself most importantly back on track is really, really essential.
So like for me, when I have crap that happens at home or crap that happens in my life, I
choose when to actually worry about it.
And I actually tell my team this quite often is like, Hey, when my team's like worried
about something with the client, for example, Oh, the client's going to be ticked.
Well, are they going to be ticked?
Do you know that for sure?
You know, where are we at?
Well, right now we're waiting to even know if this is going to be a problem from the
architect and I don't want to tell the client blah, blah, blah.
I'm stressed out.
It's like, well, this may not even be a problem.
So we don't find out for a week from the architect, if it is a problem, why are you going to spend
that week stressing?
Right?
You have a million other things to worry about.
You have a lot of problems you can solve right now.
Why would you spend all that time and mental energy on something that you don't even know
if it's going to happen yet?
Right?
And so I tell myself and my team all the time, worry about it when you need to worry about
it.
Don't worry about it when you don't need to worry about it.
Because then you're just missing a ton of opportunity, which is called opportunity costs, right?
You're losing a ton of time, a ton of energy when you could be using all that to capitalize
and make moves forward and progress and make money in all these other areas.
And so with the momentum, all the negative stuff that happens, you've got to find a way
to put yourself back on track.
And a lot of times that is just understanding, hey, right now, can't do anything about it
in this moment.
So I'm not going to worry about it.
I'm going to worry about these things.
Get these wins over here, celebrate these wins over here.
And when it comes time to deal with this problem, I'm going to be ready for it.
Versus crap, I'm going to spend the entire week focused on this.
I'm not going to worry about these wins.
And then let's say you still, for sure now that is a problem with the architect.
Well, you just forfeited all these wins.
So now you have a quadruple loss on the table versus getting all these wins and only losing
this one thing here.
But at the same time, you have this momentum of these wins.
So you're better capable and stronger and have more energy to actually deal with this
problem on this side.
So it's, yeah, it's, it's very important to understand how to deal with the stuff that
happens and maintain that momentum and how to put off what you need to put off and how
to handle what you can handle in the moment.
So data, sales, momentum, that is very key.
And I feel like so many people don't know that because I didn't know that, you know,
when you start a company blindly, you don't know what you don't know.
And so for me, I thought like, Hey, it's simple businesses, have a product, make some
sales, bring the money in, get the crap done and continue to do that.
That's literally like 1% is probably more than that.
You get what I'm saying, that's a small portion of everything else.
And especially when you grow to a bigger scale, you know, for those of you guys that are trying
to build a company or for those of you guys that have a company with team members, it's
really important to know that that's not a normality.
And especially in construction for me, like there's so many GCs out there, but there are
like these, you know, one one show dudes who have a good sub pool.
There's maybe one guy that has like one runner and another guy that kind of helps run a few
jobs, but like to actually have a team is something extremely special.
And so when you're running out of team level, I mean, all this stuff becomes even, I mean,
10 times more important to understand so many different things.
So but anyways, I won't go too much into that.
So guys, you know, understanding your data and having momentum is something that you
probably need in the moment, because if you don't need it, then you're probably failing.
You need this stuff every single day.
And if you are getting lucky, like I was the first couple years of my business, understand
that luck runs out.
And I know that whole saying, Oh, you create your own luck.
Yes, I agree with that.
We do create our own luck.
But at the same time, when you create your own luck, at some point you need to create
you need to transfer that to actually actually not being luck and actually being something
that you are truly making possible, if that makes sense, right?
Like winning the lottery.
Yeah, that was lucky.
But then what are you going to do with all that money?
Are you just going to blow it and lose it?
Or are you going to make something with it?
Right.
So guys, this is a homework assignment podcast.
This is the podcast where we go through all these different types of things we talk about
our lives, our personal, our business lives, and we really break down, you know, the everyday
life of entrepreneurship, entrepreneurship, and the pathway to success from every single
angle possible.
So I appreciate you guys joining.
Remember, we have comments where we go through to look for new questions.
We're actually going to be doing a Q&A next week.
We have one coming up.
So if you guys have any questions at all, please drop them below.
Make sure you guys follow our Instagram page and our Facebook page and just kind of keep
up today while we're doing.
We're actually going to be doing a giveaway for the homework assignment podcast.
So we're actually going to be doing a giveaway for the homework assignment podcast.
Okay.
So we are giving away $1,000 to SHIELDS for those of you guys that have been to one.
I think there's what, 35 in the nation.
So for the most part, everybody should be able to use that if not they have online,
but SHIELDS is an awesome place.
We have one out over here in Arizona and I absolutely love it.
I was shopping there the other day.
I'm like, you know what?
If someone gave me an opportunity to win $1,000 to SHIELDS, I'd be all over that.
So we're going to be launching a giveaway for $1,000 gift card to SHIELDS.
Super simple.
You got to do a few things.
Number one, you have to follow us on social media on both the homework assignment and
the elder contracting and then you have to tag three people as well to on our post, our
actual post for the sponsorship or the giveaway.
I'm sorry.
So if you guys do that, was there anything else for that?
I was going to say the only other thing is share whatever the post is, whether it's a
on your story, right?
Yeah.
That way we can spread to more people, give more people a chance to win this $1,000 because
everyone would love to have it.
I'm sure.
So keep an eye out for that.
We're launching that next week.
And at the end of the day, we're just trying to spread the word guys.
If you guys know anybody that could benefit from this podcast, please let us know.
In a couple of weeks, I'm actually going to be doing a podcast to kind of report a little
bit on the Faction Foundation, this new program that I joined that is absolutely out of this
world.
It's phenomenal.
It's literally all in one.
It's not missing any of the key components like so many other coaching programs and I
don't get anything from talking about it, but I have truly enjoyed it so much and benefited
so much from it.
I'm not trying to sell it, but I just want to talk about it.
I want to show you guys what I'm learning and I'm really excited to kind of share that
journey with you guys.
So thanks for joining guys.
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