Episode Transcript
[00:00:00] Speaker A: Foreign.
You're listening to the Total profit podcast. I'm T2, your host, and I'm here with the one guy who can spot a margin leak faster than a mechanic can hear a bad alternator, Tommy P.
[00:00:21] Speaker B: Always on the lookout for those profit.
[00:00:23] Speaker A: Leaks and those whining noises. Right.
So today's episode kicks off March, and with it, a new season of growth for our founders. January and February were about realizing what's broken.
And today, we're going to flip the switch. They were going to flip the switch. This is where you start becoming who your business actually needs.
And it's. What your business needs is a real leader. A real leader. Not a firefighter, not a hustler. We talked about that hustle mentality. And not the one who has to touch every single task in order to make it move.
This is the. The performance margin zone, phase four. And this is where you stop surviving and barely keeping your head above water, and you start owning it. Okay.
All right.
We've been incorporating a lot of stories into our podcast lately. I'm kind of enjoying the stories that are coming through the business.
I want to tell you about Mike. He had a very successful H vac company, very big team, solid reputation.
Mike was exhausted. Mike was absolutely exhausted. Every job, every fire, every quote had to come through him.
And when I asked if he considered himself a CEO, he laughed.
He laughed. And he said, I feel more like the janitor and the psychologist and everything in between. And he was. He was stuck in this operator trap, all right? He was constantly reacting and never leading.
He wasn't broken. He was a really smart guy. He was just. He just never learned, really, how to graduate from operator to owner, and he was too busy doing the work in order to lead the business. And we find that a lot. How many owners kind of get sucked into the quicksand and doing a lot of things that they actually hired people to do? They find themselves doing it right.
[00:02:24] Speaker B: Absolutely. And it's. You don't own a business to have more than one job. And if you have more than one job, you're not owning the business. It's owning you.
[00:02:35] Speaker A: It's owning you.
And that's what we want to break down today. So it's a shift in mindset. It's a financial shift. It's a mindset shift. It's an identity shift.
And at Total Profit Management, we don't just hand you a spreadsheet or sell you a piece of software and turn you loose. We help you become the kind of leader who actually uses it. To make strategic, profitable decisions. It's a critical difference.
[00:03:03] Speaker B: Well, it shows you where you fit in your profit and loss statement.
Once you know that, it gives you that confidence to know that you can bring people on where you need them, because you're predicting what your revenue is going to be, because you've set those targets in your margins.
[00:03:23] Speaker A: And we help you understand by job which ones are more profitable or not. And so you will be able to think through with a lot of clarity where you need people to support and who to hire.
[00:03:37] Speaker B: Absolutely.
[00:03:37] Speaker A: And we talked in a previous episode about hiring people for outcomes, not necessarily for tasks. And we help you make that very, very clear.
So in the performance margin zone, phase four, this is where the clouds start parting and the angels start singing.
We see the shift.
You stop saying things like, I just need more jobs, and you start realizing, I need more margin.
And it's not about ego, it's just about ownership of it and ownership of those results for your business, ownership of your calendar, ownership of the direction that you want to take your company.
Let's list some of the big difference between the big differences between somebody who's operating or acting as an operator and somebody who's acting as an owner.
[00:04:26] Speaker B: Absolutely. It goes back to one of our prior podcasts when, if the company falls apart when you're not there, you're part of the problem.
You're not owning the business, it's owning you. And it's truly knowing that point of what people do. I keep what people don't. I keep what jobs are profitable. And when can I take those jobs and get a little strong with my margins? I'm comfortable. I know my overhead is covered. And when can I take jobs to keep my employees busy instead of right out of the chute? I need to keep our people working.
That's gonna. If you're not set up, it could tank the ship really quick.
[00:05:11] Speaker A: Give me an example of a decision where an operator is making a decision in the moment versus an owner who's making a decision by data.
[00:05:22] Speaker B: Well, that's great. The operator in the moment bids something just to get the work where the owner knows, I can afford to take a little bit less for this because they're a good customer, or we've got a gap in our schedule, they're taking it under control and it's not a guess.
You know, stop guessing, start knowing.
[00:05:47] Speaker A: Stop guessing and start knowing.
Operators work in the business daily, whereas owners will design systems to run the business. So I quoted this in an earlier podcast also, and I love this but people. So I'm going to get it wrong. People run the systems. The systems run the business. Maybe I got that backwards. The systems run the business and people run the systems, right?
[00:06:12] Speaker B: Yeah.
[00:06:13] Speaker A: You want strong, solid systems in place that are designed to run your business in the areas that we need. So simplify them. Make sure they're not overly complex because the more complexity you add, the higher cost. It becomes streamlined. Smooth systems really help you feel like you're more in control and you're not as reactive.
[00:06:33] Speaker B: And a system's a multiplier to the value of your company.
If you're the company, it's a multiple of one. If you have a system that somebody can come in and do what you're doing, it's a multiple of many because it's doing the work for you.
[00:06:52] Speaker A: And somebody who's acting like an operator is very reactive to problems as well. Whereas an owner can anticipate and prevent problems.
[00:07:00] Speaker B: Exactly.
[00:07:01] Speaker A: Big difference as well.
Another kind of litmus test of whether you're acting as an operator or an owner is are you thinking about things week to week or month to month? Are you really kind of living in this moment or are you thinking year over year? Are you thinking long term? Are you thinking more strategically? That's how owners think.
So at Total Profit Management, we have onboarding is designed to start that identity shift immediately.
And we call that the margin clarity phase. From day one, we are installing foundational tools and you don't need to be a cpa. We show you what to look at, how to make margin based decisions, and how to lead your teams through data.
And one of my favorite parts is that map that we walk people through.
Sorry, big gap there is that map that we walk our clients through.
One of my favorite parts is that map that we walk clients through. It connects your leadership style with how you kind of communicate your priorities, how you manage your time, and how you structure your profit strategy. So when you lead like an owner, your financial rhythm changes. You stop checking your bank account balance every day, you start looking at KPIs, right?
[00:08:20] Speaker B: Yep.
[00:08:20] Speaker A: And so some indicators that we track during onboarding to kind of train folks through that shift is your owner time allocation. So what percentage of your time is actually being spent on revenue driving versus reactive work? How often are you thinking strategically and long term versus firefighting? Another thing is that decision lag time. How long does it take you to make a key business decision? And what are some of the things that slow that down that could sort of streamline in a process?
A, A team dependence factor as well.
Are you the bottleneck in every major workflow? Does your team have to come to you for everything? We talked about that in an earlier podcast as well. Your revenue, quality. How profitable is your average job? Not just how big is it, how profitable is it? That is different. I've had people say to me, I have a $300,000 business. And I'm like, what does that mean exactly? Are you talking about revenue or are you talking about that's how much profit you made? How much of that did you keep?
Because I'm not impressed. If you have.
If you're a small business owner and you're bringing in 3, 4, $500,000, you can brag about that. But if you can't pay your mortgage because your costs are.
[00:09:33] Speaker B: Yeah, anyway, show me your profit.
[00:09:35] Speaker A: You get the point.
And then that margin mapping again. So how many of your service lines or job types have fully mapped out that margin data? And are you tracking your costs correctly? So that's how we measure leadership clarity. Because profit doesn't just come from effort, it comes from ownership.
[00:09:55] Speaker B: Exactly.
[00:09:57] Speaker A: So your challenge this week is to audit your identity.
Audit your identity.
Where? Are you still acting like an operator instead of owning the direction of your company and the strategic direction?
It's a bit of a gut check this week.
[00:10:13] Speaker B: And again, if you're showing up as a worker and not an owner, it's okay. Take her cool. We'll get you back on track. Everything's going to be fine.
