Ep 25 - Derek Isaac: The Owner Trap, Systems Before People & Scaling Past $10M

SPEAKER_00:American building. One brick would be building the American tree. Okay, ladies and gentlemen, welcome back to another episode of American Builders. Today I am with Derek Isaac, the founder of Rapid Results Creator. Rapid Results Creator is helping general contracting businesses systemize their companies so the owners can take a step back and scale past $10 million. Derek, thanks for coming on today.

SPEAKER_01:Yeah, great to be here again.

SPEAKER_00:Let's start, like we start all episodes, with some background. Give the audience an understanding of who you are, where you come from, and you know how you found your way into this coaching and uh kind of business consulting world.

SPEAKER_01:Yeah, definitely. Started out like uh a lot of contractors out there, saw construction as a viable option of employment and uh got stuck on a crew, learned the ropes, and uh became a carpenter. I liked framing carpentry, did a number of different trades, but that's the one that stuck and started my good, you know, as a good um carpenter. I wanted to start my own business and enjoy all the freedom uh that comes along with business ownership. So started a subcontracting company, grew from there, started doing uh remodels and just scaled up as a general contractor. Realized there's a lot about business I didn't know. And uh we we grew really quick, but uh ended up that overgrew essentially. And I think that's something that is not talked about a lot because we love to hear the success stories.

But um, there is a point where growing just creates more chaos, more financial burden, and um causes

SPEAKER_01:a lot of problems. So learned through trial and error, did a bit of real estate investing as well, um, had worked in a large home building company that did you know a couple hundred homes a year. So I'd kind of seen both sides of the coin from working as a project manager in a larger company to owning my own business and hired some coaches, read all the books, was part of a lot of different seminars and different things like that. I realized that A, there's a lot that you don't know when you start out. And even as you grow, there's a lot you don't know as you reach those certain levels. You know, if you go from one million to five or five to ten or whatever, that there's always like so much to learn and know um as you increase your capacity. Started doing coaching, and the thing essentially I created my coaching program to be the one that I wish I had when I was starting out. And the big

SPEAKER_01:differentiator for me was systems and processes, something I was extremely lacking uh in my own business. We we had some systems, we're utilizing software. Uh, so it was it was okay, but there's just so much more to it that I didn't know. Like a lot of builders, didn't have a formal education background in you know, business management or construction management or anything like that. So it's just figuring stuff out, trial and error. Uh, and then formulator whole coaching company now that we do is implement systems for builders, help them systemize for profit and freedom, essentially, at the end of the day. Most people get into business to make money, and making money part is to give them the freedom that they, you know, desperately want.

Um, but typically they go off somewhere and end up being that stressed-out contractor that's working 70, 80 hours a week and not making a whole lot of money.

SPEAKER_01:So that's what we help solve.

SPEAKER_00:I like that. Most people get into business to make money, but really you make the money so you can have the freedom. And you're 100% right. There's so many, you know, entrepreneurs that end up in that situation where it's like, all right, I've got the money, but I don't have the thing that I originally came here for, which is the freedom. So, you know, this is why uh business like you and coaches like you exist. Let's start with a topic that you've mentioned before, um, which is kind of the mindset that I think a lot of people in construction and trade struggle with, which is going from the builder to the business owner. What does that mean for you? How have you kind of seen that play out in some of your clients?

SPEAKER_01:Yeah, I call this the owner trap, and uh you you get into business not knowing essentially what you don't know, and you end up getting trapped in it. The the mindset shift is you no longer have to be good at just building, now you have to be good at running a business, and they're two very different things, there's some similarities, but essentially, before you were responsible for doing your your trade or you're you know um building a home, so you know how to do that. That's usually not the problem for many builders because you're good at what you do, and that's why you start the business. The problem is now you're also doing HR, you're doing finances, you're doing marketing, sales, any number of other roles in your business, but you don't really know how to do those properly. And you often don't even know what you're doing necessarily because you're just running around every day and it

SPEAKER_01:just doing what needs to get done without actually realizing that those are all compartmentalized, specific, separate roles in your company. And that the reason you feel like you're wearing a lot of hats is because essentially you are wearing all the hats of those different roles in your business. And now you need to be good at like seven different things or 10 different things instead of just the one thing that you started the business for. And because your time is limited, your next the skills that you develop, and you usually just develop those skills, like you get competent, anyways, at HR, finances, whatever, to a degree. Um, but the skills that hold you back are essentially leadership and team building. And you need systems and processes and structure in place because you can't build a team that's going to run your business if there's nothing to run.

Like you need to provide some raw

SPEAKER_01:materials, if you will, um, for the business, for the new people coming into your business to run and operate. And that's another kind of trap that they fall into is I need a project manager, let's hire someone. So they hire a project manager. That person has who knows what experience from who knows where. And now you've got your experience, and they're not going to be the same. So you're telling them what to do. They have no playbook or you know procedures to operate from. Maybe they're using new software, maybe it's different type of projects. And there's just a whole lot of confusion and friction there. And why you'll see some builders that'll scale up and then kind of plummet back down because it's like I they they essentially didn't build a business that could scale. And that's where we come in because you need the system before the people is the way that I see it.

SPEAKER_00:Yeah, I think you know, Alex Hormosy talks about this as you know, a lot of people are in a situation where them, as the owner, the operator of the business, are kind of the sole reason the business can grow. And they're also the sole reason the business can't grow, is because they are the bottleneck of the business. Um, so let's kind of now get into the specifics of how do you break outside of this? I guess before we dive into that point of growth where you need to start bringing on other people, let's talk about some of the core pillars that you kind of help people set up. First one being something I don't, you know, you don't hear this talked a lot about in the construction industry, which is branding. Um, you know, you it's often overlooked. Why, why do you think this is a mistake that a lot of people and especially general contractors make when it comes to branding?

And then maybe specify

SPEAKER_00:the difference between branding um and marketing and how you sort of define brand.

SPEAKER_01:Yeah. So there's an there's a few reasons. One is nobody really taught the business owner what brand is, it's just whatever you've kind of accumulated. And most people don't want to learn about branding. Uh, not many builders want to learn about it, uh, hence they don't care about it typically, uh, because it's framed as branding and whatever. It's you know, the way your logo looks, and if things look good, then that's branding, right? But really, there is so much more to it. And I would change the the frame from branding because that sounds you know boring, plain, and not very enticing, to getting larger, better projects with great clients. That's what branding will do. So when you hear branding, think big projects, amazing clients. That'll that'll tip the scales to valuing branding properly. And I think that's the the internal dialogue that builders are not having with themselves.

So they

SPEAKER_01:they hire someone to put together a fairly decent website, they do a bit of social media, they have a logo they call branding or what have you. But there is a lot of intention that needs to go into branding, your ideal client profile, ideal type of project, um, unique selling proposition. So a lot of stuff.

I'm not going to dive into everything, but essentially knowing your client better than they know themselves, as far as why they're afraid to get your service, what really excites them about getting your service, painting that picture for them, um, and just getting really clear, making sure that you know the type of client you want, the type of project you want, and everything to do with your company, the way you talk, the way your logo looks, the colors you use, your website, your social media, your emails, everything speaks specifically to that type of client and that type of project,

SPEAKER_01:so that you're then attracting that. A lot of builders, it's kind of like we want all the work we can get and we don't want to exclude anybody. Marketing, you need to be exclusive because people pay for exclusivity. The top brands in the world are very exclusive and they're extremely expensive. And as a builder, if you build for everybody and you're not exclusive, you're you're probably not going to be charging a whole lot for your services or don't have the value perception from your clients that you should.

SPEAKER_00:I also think it helps with decision making in a way, right? When you understand what your brand is, who your ICP ideal customer profile is, the exact person you want to serve, it helps when those other projects start to come in. It helps you be able to say, no, I'm not taking that because that doesn't match my brand. So doing the legwork ahead of time, and even you know, if it feels silly, writing all this out on a document, literally describing like, okay, what is my ideal customer profile do in a day? What kind of clothes do they wear? What kind of house do they live in? Laying all that out might seem a little frivolous to begin with, but it helps in the long run, one with your decisions on what kind of content you're putting out, what kind of houses are you building, and then what projects are you taking on? So love what you say there.

You also mentioned um in one of your videos kind of

SPEAKER_00:the difference between a red ocean and a blue ocean and how branding you want to try to target this towards a blue ocean, right? If you're a home builder, like you mentioned in the video, there's a hundred home builders in you know any given city. How are you gonna be the home builder that is different from all the other ones? You know, if you're just Joe's homes, well, there's Joe's homes, there's Sally's homes, there's Jeff's homes. What does Joe's homes actually build and who do they build for?

SPEAKER_01:Yeah, um, Blue Ocean, Red Ocean. So Red Ocean is contested, bloody waters, lots of sharks, and for good reason, it's you know the big market, right? And a lot of people go there because they figure they can get a piece of the market without realizing that it's super competitive. And if you're newer or don't have your uh your your business dialed in, your margins are probably going to be low and you're gonna be hard getting any traction there. Whereas Blue Ocean, not as contested, fewer sharks. You can sort of claim whatever you find, uh, essentially from the analogy. And when you're starting out, uh like I think it's always good to niche. There is a point where after years, uh, you may have a reputation where you can dominate a red ocean and you can be the biggest builder in your city or whatever. Still not that you should be generic, um, but you're gonna have a lot easier time.

Start with

SPEAKER_01:something quite niche and get really dialed in. And this helps for one, not having to compete as hard and getting higher margins, but also two, it's just way easier to run that type of business because you're typically have similar type of clients, you're typically doing similar type of projects that you don't need to be changing gears all the time, right? Um, if you're doing certain remodels in a certain area for a certain type of client, you rinse and repeat. If you're doing like, I don't know, bathrooms, and then you're doing kitchens, and then you're doing like a basement remodel, and then you're doing a new home, and maybe you're developing some land, like it's very hard to build a consistency around a business that has so many varied, you know, different services or projects that they do.

SPEAKER_00:Right. And then you become the expert at that thing, as opposed to being, you know, somewhat good at a lot of things, you become really good at one thing, which is obviously, you know, generally more valuable. Um, let's talk about sort of just general efficiency habits, right? You know, you look at contractors, they're like you said, there's there's typical profile of the GC who's just pulling his hair out and he's too busy. What are just some general tips, tricks, habits that you like to tell your clients that they should be doing on the day-to-day to increase their efficiency?

SPEAKER_01:Yeah, that is a huge question topic and a lot of complication because there's so much uh there. Some of the personal habits is making sure that you've got a calendar and you're scheduling stuff in your calendar. It may sound super basic, um, but like iCalend or Google Calendar, whatever, put your appointments in there, make sure at least you've got a calendar that you're managing your your week or month with. And prioritization. You're always gonna have more work than you can do. That's never gonna change. Uh, there's gonna be rare that you're gonna be like, well, I've got nothing to do today, right? As a business owner, that that doesn't happen because you invent something, you're an entrepreneur, you're gonna you know find something to do. So you have to prioritize heavily and realize what's important, what's urgent, and and block time is is another thing. So block some time.

If you want

SPEAKER_01:to work on your business, build a system, implement uh software, learn a new skill, block some time and and keep that time. Don't just brush it off as like, oh, I don't have time today, but um, but actually use that. So that's the big thing. Now the uh the underlying cause or the like the root cause is being unorganized and building essentially growing a business without the systems in place, and the the systems and processes will enable you to enjoy a much easier and um more stress-free management of your company. There's always going to be stress, there's always gonna be stuff that comes up. Um but you need to switch your skills from getting stuff done to how do I enable other people to get this done for me? And that is management, that is leadership, those is what those are the skills you should be learning and implementing. Use those skills.

I have this happen with clients where they're

SPEAKER_01:still like jumping back on the tools because the guy called in sick, this project's behind. I just went to go do this, you know, quick thing that one day. And it's like instead of spending that eight hours on site, you should be spending that eight hours figuring out how am I gonna better manage this project? How am I gonna find some you know, subcontractor or freelancer or pull someone in or make some calls to maybe some other GCs that I know or whatever, and use your management or delegation uh leadership skills to not do that role yourself, um, essentially. And those are the skills that you should be building.

SPEAKER_00:So, one thing you mentioned specifically is you know, spend two hours a week on systems specifically. Talk to that a little about a little bit. And you know, if you were to tell somebody, okay, next Saturday, I want you to spend two hours building out some systems, what does that actually look like from a tactical perspective? How can they analyze what they do and figure out where to actually implement systems, right? Because systems is is a broad term. Let's try to narrow that down and get super specific on what does that look like and how can they start to go about implementing these systems?

SPEAKER_01:Yeah, so the first call that we do with clients is to figure out what are we prioritizing, what is the system we're actually going to work on? Because there is a lot of them, as you mentioned, it's huge. So figure out what are you gonna do, what do you actually want to improve? I like to use estimating because it's a good example typically, but let's say you know, estimating is taking a lot of your time, you're doing it evenings and weekends, it needs to get better, um, it's inconsistent, what have you? Okay, great. So you're gonna work on estimating what part of your estimating? Do you need to build out a template? Do you need a cost database? Do you need to maybe get a better cost code structure? What specific system? Okay, you don't have any good templates. So that is your thing. That two hours, you need to get a template in place.

What is the like best, biggest project you've ever done?

SPEAKER_01:So if you build homes, that is let's say a million-dollar home. So you need a template for a home like that. And that two hours, you just you work on that template. And if you can't get it done in two hours, then the next week, you know, if you keep working on that thing, that's the biggest priority that's going to move the ball forward the most for you until it's done, and then you move on to the next thing. And uh that's how we build out systems essentially, very prioritized, and the smallest next step, essentially, even a template, like maybe you build out the the pre-construction um and rough structure, you know, in in in the first two hours, and the next two hours it's the rough and trades and you know, whatever else, and then the finishing or or what have you. So step by step, start small, make improvements, and and just continue to move forward essentially.

SPEAKER_00:Would you say the goal of building systems is to you know help the owner? Obviously, you know, freeing up time is important, giving them more freedom and a relaxed lifestyle is important, but when it comes to just specifically the business, would you say a big goal is you know, how do we get you to stop focusing on managing the business and managing the current customers and clients and projects and focused on sales and growth? Is that kind of the transition you're trying to help people make most of the time?

SPEAKER_01:Not from a system standpoint. We look at uh securing the financials, is what I call it. That's one of our earliest things. The first thing is that assessment to know we're prioritizing, then securing the financials, which is checking your financials, margins, estimating, um, that kind of thing, but then also lead generation to make sure that you've got a lot of demand and your production you want to sort of cap whatever's attainable with your current production levels. And the reason for that is because then you can demand higher prices, you're not worried about you know closing every lead, you're not underselling yourself, and things like that. So we set up systems and lead generation in a way that it's a lot more consistent, so that the owner still needs to do sales and marketing, but that should be off of their plate as much as possible. Sales, not so much.

Typically, the owner is doing

SPEAKER_01:sales pretty far into the process, but marketing, we want to get that off the owner's plate, at least like a lot of the administration or time-consuming part of it so that they don't have to worry about that. And and that way we can focus better on the systems and processes. Um, so the the mindset shift is really just about prioritizing focus. And the it's it sounds really easy, but the problem is they don't typically see the big picture and they don't know how this implements. And that's where our coaching, because we've gone through this dozens of times with general contractors, we know like here is the first thing we should focus on. Here is the template for it, and it just like expediates that whole process a lot quicker. If you're trying to do this on your own, you're probably getting lost, and you're probably trying to do too many different things all at once. Because you take your

SPEAKER_01:focus off lead gen and marketing to go build out your estimating, and then you realize, you know, that's now you don't have enough, you know. Um people in your pipeline or what have you. So you you maybe build things out in a non-optimized way and it creates problems uh for you later on.

SPEAKER_00:Let's talk about marketing specifically. What are, again, similar to branding, marketing is something that you know a lot of people in the trades, you know, when they start off as the guy using the tools and just knocking those jobs out, not every you know, contractor is thinking about marketing in the way that maybe they should. What are some of these systems that you're helping helping put in place for marketers? Obviously, you put out a bunch of content. Are you using these same systems? Just talk through the systems that you guys are implementing on the marketing side.

SPEAKER_01:Yeah, so for us with marketing, like we're not a marketing agency, but we definitely help set up the systems. And for us, it's about multi-channel marketing. You want to be everywhere all at once, essentially. And it's not that you need to be doing everything all at once, it's just you need to be smart about the content and the marketing that you're doing. We provide all of our clients with a CRM system for them, which has automated emails, automated social media posting and contact management, a whole bunch of different stuff there. So we will implement that for them. And that right off the bat gives them a really strong system right out of the gate. Um, there's some setup and customization, but once it's running, it's essentially operating in the background and the people can utilize it. One of the like most cost-effective marketing methods that a lot of builders are not utilizing well

SPEAKER_01:is email marketing because you've paid in time or money to generate these leads over the past year, two, five, 10, could have 20 years of leads that you have in your database. Could be in you know, like QuickBooks or your project management job uh software, whatever it may be. These are people that already know your company, they've maybe done work with you. At least you've had a conversation with them about their project or budgeting or what have you. It's very easy to send some emails and get on a newsletter, set up some automated drip campaigns. So when a new lead comes in, they fill out the form of your website. Over maybe two to three weeks, they're getting three, four, five emails showing them the value of your company, something that's educational, and to do specifically with, you know, 10 things to think about when you're planning your new home builder or whatever.

Uh, so that's a

SPEAKER_01:very easy, cost-effective system to set up. It can pretty much more or less all be automated. The other one is posting to all your channels at once. So have some sort of program where you can create a post, it can go to Facebook, Instagram, LinkedIn, TikTok, whatever, uh, so that it just saves you a ton of work. Um, always be utilizing content for multiple streams. So if you create a video, turn it into a blog, or vice versa. Blogs can be turned into you know different social media posts. So there's lots of different stuff. And you, as the owner, shouldn't be sitting down and doing all this. Maybe you are at the beginning. Um, but there's uh marketing, there's easy systems you can set up to delegate this to an assistant, um, essentially. So those are some of the systems that we put into place, and it can run more or less without the owner. The owner will still probably be involved.

They can

SPEAKER_01:maybe be creating videos, taking pictures, you know, giving ideas and stuff like that. But a lot of the generation and management should be handled by someone else. Or you can hire a marketing agency and they can do it for you, uh, which is hit and miss. And there's some good ones out there, and there's some that are mediocre, but um there's there's options essentially. But uh yeah.

SPEAKER_00:I think one of the you know important things you mentioned there is the fact that the the email marketing, and I heard in one of your videos the fact that you know you talk to a guy say, you know, I want to do three million, and it's like, well, that three million is probably sitting in your email list as it exists today, and so activating that email is important. Um, is is most of the email implementation and marketing you do, is it mostly focused on that active leads or you know, people you've built up versus cold outbound emails? Because you know, you hear email marketing and there's the cold outreach where you're emailing somebody you've never met before, and then there's the you know, you've got a massive list of people you've talked to throughout your whole career, is most the focus on the latter as opposed to cold email?

SPEAKER_01:Yes, majority of our clients are residential based, so not a proponent of sending cold emails to random people. Um, but cold outreach, yes, for your referral network. And one thing I didn't mention with the marketing is use your referrals. If you ask a builder, what are your best leads referrals? Where do you get most of your leads referrals? Uh, a lot of them. So why don't you have a really great system for generating better referrals? And a lot of people don't think like that. They think I'll just do good work, maybe ask at the end of the job, and I get referrals. But if they're so important and like one project could literally turn into another project and get you another, you know, hundreds of thousands or millions of dollars, why not have a better system for it?

Um, but to get back to your cold outreach, cold outreach, yes, for realtors, designers, architects, mortgage brokers, anybody

SPEAKER_01:who's like adjacent to you that's not providing the same service, but would have the same clients. You want to be networking with these people, having going for coffee, taking them out to lunch, uh, whatever it may be, following up with uh I mean, it's not cold, but following up with your um previous clients and things like that. So building out your network is is definitely strong. And having a system again, you can have uh an assistant who can easily do this outreach for you through LinkedIn or just Google search or whatever. And it's it's typically easy to find these types of people and connect with them and build those relationships and just realize that it's probably never going to be like a one call or one meeting and they're gonna refer you.

That happens, but these are long-term relationships that you're looking to get in place, and you need a system to remind you to call them every

SPEAKER_01:three months or six months, see how they're doing, see how business is going, just touch base and build those relationships over time.

SPEAKER_00:I like that framework a lot because you know, we've we've experimented with cold outreach, um, and it's just a tough game where everybody on the planet is getting dozens of emails in their inbox every day of just slop that they just don't even read and delete. And that's just a really hard game to win. Um, but I think that's a great framing there of you know, who are the referrals, the affiliates, especially when you can have a relationship where it's like, hey, if you refer me money or refer me clients, I'll give you, you know, a percentage of that revenue. Where as opposed to coming out saying buy something from me, it's hey, we can build a relationship and make money together. You're obviously gonna have a much higher you know odds of getting somebody to talk to you in that scenario.

So that's a really good framework there for the cold outreach, whereas you know, everything else is building

SPEAKER_00:out the current client list and you know, maintaining those and drip campaigns. So very, very good on that. Let's talk about AI a little bit. I mean, you mentioned we were gonna dive into estimating, but you mentioned um some of it there earlier. But I feel like that's a big piece that a lot of you know your GC clients struggle with. It's a lot of you know, especially as the owner escalate, you know, kind of goes up, it's like, oh, I gotta do my estimating because I gotta control the pricing. It's like they they kind of stay attached to that part of their workflow. Talk to that, you know, if you if you have anything else to add there on the estimating side, why is that something that you know comes up so often as a system that needs to be fixed?

SPEAKER_01:Yeah, it's it's so integral to the business. You've maybe heard it mention in real estate, you make your money when you buy in construction, you make your money when you estimate. And if you haven't estimated well, you're gonna lose money on the project. It can only be so efficient, you can only buy materials that's you know so cheaper at a savings. So estimating is critical. That's where you set how much you're gonna make on a job. And if you're not thinking about it right, your margins are off, you forgot stuff, you're you're gonna lose money on it. So that is why I think a lot of builders are very reluctant to give it up and and why they think they need to do it. But at the same time, they also rush it and run into those problems.

I won't go to you know, extrapolate too far on this, but essentially the way that I would look at it is you don't want to necessarily replace yourself with an

SPEAKER_01:estimator early if you're not there yet. But you can easily hire someone, or if you've got a project manager, they can do the estimating. And maybe they get 80, 90% there, and then you double check and and and finish it off, um, essentially. So the goal isn't maybe to fully replace yourself at this point, but know that you can definitely hire someone, or there's AI solutions out there that can do takeoffs, that can pull through the like a scope of work, that can utilize you know, templates that you built. Um when you've got the estimating systemized, it's not that difficult to estimate a project. Essentially, it's you know, takeoffs and pricing. And yeah, there's construction know-how to make sure there's not stuff we got, but essentially that's what you're checking for, or you're hiring someone like a project manager who hopefully has that level of skill.

SPEAKER_00:And it kind of goes back to the branding that we mentioned earlier, where if you're doing a bunch of different types of projects, the estimating does get a little bit harder because every time you do a project, you're coming into a new world, you got to learn a bunch of things. Whereas if you have a you know consistent brand, consistent project base, that template those templates become a lot easier to fill out over time. Let's talk about AI. You mentioned it there with the takeoffs. What are some other ways you're seeing AI implemented at the GC level? You know, maybe talk to what's working and anything that comes to mind in terms of what's not working.

SPEAKER_01:Yeah, one thing I think we've all seen is uh is marketing, you know, like all the uh AI generated marketing out there. And it's getting very generic, it's getting like overdone. And I think if anybody sees an M-dash or a it's not this, it's that, you know, phrasing, it's like next. Uh so just realizing that everyone's inundated with AI slop, if you will, for marketing, even though the the intent behind it can be solid, but it's just that it's not going to land properly if it's just very generated. And all the more reason to have that ideal client profile, because then you can utilize that with AI so that it is still speaking very much to your audience, and you've got some guardrails or guidelines like of things for the AI not to do, or prompts in order to make it sound you know more human or or or land better with your audience.

Uh so marketing definitely saved a lot of time though, because

SPEAKER_01:I I hate writing, don't like copywriting. Uh, so uh for AI to do writing. Um any kind of review is great, summarizing. So if you got contracts, large documents, even house plans, producing summaries of that or scope of work, uh I've found AI is quite good. The the issue with AI is that it can be inconsistent and it'll be consistent for a bunch of times, then all of a sudden it'll be like off on left field. Um so just realizing that it does need to be double-checked and there needs to be human in the loop, um, not just to take it at face value for for everything. Um, but it is getting better and better, and it's it's definitely hitting its stride, I think, for a lot of stuff that people want it for in the building community. Uh, estimating is is pretty much there. I've seen some that are quite good. Um, and you know, can get you that 70, 80 percent there potentially with with takeoffs and

SPEAKER_01:scopes of work, and then you've got to put in your pricing or whatever, but it's getting uh quite quite good. Other places, I mean, creating systems and processes like SOP documents, any sort of writing task, it's it's excelling at. Um, but you want to make sure that you're not rushing things and that you're actually making it for you know with the person in mind and realizing that and keeping things consistent um across there. As far as which AIs to use, I use Chat GPT and Claude. I find ChatGBT is more for my structured type work. And when I want quick stuff, it also has great image generation, which I don't believe Claude has at this point. Uh I use Claude for my creative writing, so like marketing and stuff.

I find it has more human touch and is a little bit more intelligent, if you will, when asking it stuff, whereas ChatGBT, you can ask it something and then it'll change, even though

SPEAKER_01:you told not to change it and whatever. So um, but yeah, get in there, utilize it. I I feel there's like kind of three different levels of of users and you know, your basic users that's that's prompting it. Then your kind of second level users who have built-out prompts or custom, you know, GTPs, that kind of like custom playbooks for the processes for it to run. And then the next level is sort of the agentic uh co-work or or agents, which is sort of the next level, uh, which is a whole nother you know bag of tricks and uh and stuff to figure out.

SPEAKER_00:That's a I I break that down as well in kind of the exact same way. You know, I've done a couple kind of guest speakers at uh Kansas University and gave them that exact same breakdown of like there's there's level one where it's input, output, you've got a prompt. Um, but I think the the level two you talked about is really important for this conversation when it comes to systems. And one thing I would just urge people to check out is the cloud skills usage, which you know how I kind of think about this is if I'm doing something more than you know two, three times a month, uh, I create a skill for it. And that is as easy as going into cloud and saying create a skill for X, Y, and Z. So in this example, right, let's let's talk estimating. For example, if you have gone through the process of creating a new template with Claude, you know, first first thing I would do is if you're creating a

SPEAKER_00:template for a new property, is go into Cloud, have it help you create the template. And then once you've done that and you've gone through that whole process of, hey, I need to create a template, too, you perfected it a bunch of times. At the end of that conversation, you can tell Claude, create a skill for this for any time I need to create templates for other projects. What that allows you to do is going forward, as opposed to having to go through that whole conversation, specify details and you know, fix this. Nope, now change that. It saves all of that into basically one prompt, you know, makes it perfectly structured. And now going forward, you can just basically click backslash, type in the name of whatever that skill is, you know, backslash estimate creator, and then it'll, you know, kind of just speed up the time it takes to get to creating that system.

So that's something I do all

SPEAKER_00:the time, you know, for the podcast prep, I've done that a bunch of times. And now I just do backslash podcast prep, kind of give it the context, context, who I'm talking to, general ideas of what I want to talk about, and it speeds that process up massively. So that's just a framework I would have in the back of your head for anybody who's like, how do I use AI and go to from level one to level two is think about anytime I'm doing something multiple times a week, multiple times a month, how do I create a skill out of that? Um, you know, anything to add on on the AI front? If now we can kind of move on to the financial health aspect of this conversation.

SPEAKER_01:Yeah, uh, you have to hit the nail on the head there for sure. The one thing that I use as a kind of mindset for building systems is if I had to do this a thousand times, this is how I'd want to do it. So if you're typing in a prompt, uh you know, uh, and as you mentioned, you you know you're gonna have to do this into the future, and maybe other people will need to do it. Take the little bit of extra time, create a system around it, um, whether that's a skill or even just a custom prompt in in some database for your uh operating procedures or what have you. And if it can save you a minute a day, that's huge.

Um, they don't need to be earth, you know, groundbreaking, earth shattering for you know, saving you hours every week or something like that, even just a few minutes here and there, because every time you're doing a task or you need to use brain power to think about something, there's

SPEAKER_01:that switching that happens and it creates stress and it creates friction and it just eats up all of your mental bandwidth. So the more of these little things you can automate or improve, it just makes your day and life run so much easier.

SPEAKER_00:Yeah, I think that's the level three aspect of it, right? The automation where, you know, as opposed to just having the the AI inside of Cloud doing one task, where you can now start to maybe string together multiple tasks. You're stringing together access to okay, pull from this spreadsheet, then pull from this tool. That's where you level up yet again, go to the level three, and that's where you can really take a full system from you know research on you know a project. You know, go here, look at this website, understand, you know, what the project scope is, then create a document, then pull this template and fill out the information. Like you start to string together all these standard operating procedures, like you talked about, and now you're really dialing in the systems in a very intelligent way. Uh, we're kind of running up on time here.

So, you know, any any closing thoughts here,

SPEAKER_00:feel free to give it to the to the audience. And then where can people find you and and who do you want reaching out? Obviously, the general contractors of the world is kind of your main demographic, but just wrap them up with uh some closing thoughts and where can they find you?

SPEAKER_01:Yeah, so we work with general contractors. You can visit our website, rapidresultcreators.com, or just Google us, you'll find us on our website. We've got all kinds of stuff there. You can reach out for uh to us for a strategy call. There is all of our different content that we've we have. We have some free uh masterclasses and different things like that. Now you touched on financial health, and this is super important for business owners to understand. And as I mentioned earlier, it's often not a place where most business owners have been formally trained or understood in another business. So the big things are that I've seen over and over again is knowing your overhead as a margin and then translating that back into your estimating.

So go through the last previous 12 months, as long as your bookkeeping is up to date, figure out what your overhead expenses are, and then figure out what as

SPEAKER_01:a margin of uh revenue your your overhead margin is essentially. So I normally see anywhere from 10 to 20 percent. And realizing that markup is not the same as margin, this you know, it gets a little technical. But if you are running projects and you've got a 30% markup, that may sound healthy. But if you've got 15% margins of overhead, that's that's going to eat up about 20% of that markup, which leaves you with 10%. And then if you are not accounting for project management or some of the additional fees, 5% could easily be gone a contingency of mistakes in doing estimating or you know, budget budget overages or scheduling overages, which leaves you with maybe 5% profit. And that's if you're lucky.

So if you're getting to the end of projects and you're wondering where the money went, it is because you you you haven't estimated knowing your financial uh efficiency of your business, essentially.

SPEAKER_01:So that's just the usually the quickest calculation that I do to see where a company is at as far as their actual margins and the most likely reason why they're not making as much money as they as they think that they should. Uh that's the most of it. Other than that, just having it in place, uh, having up-to-date books and realizing you've got cost of goods sold and then you've got overhead and not having your accounts mixed up between the two is very critical. And I still see contractors with mixed up wages in their expense columns of for overhead. Um, and I don't know how bookkeepers don't know that they shouldn't be doing that, but they still do. Uh, so I don't think it's the builder's fault because your financial, whoever's helping the financial should know how to set those up. But often I find that they're still wrong.

Then there's job costing, which is like if we're going on levels,

SPEAKER_01:the next level, and it's very hard to get into place. It's definitely worth it. Um, but knowing exactly how much you made on every project and how much you spent on every category that was estimated, uh, essentially. So that's your goal and is doable, but you'll probably want help with it. Um, but once you're there, I call it the holy grail. Uh, because essentially you should be able to live forever. Uh, because you always know the healthier business um once you have good job costing in place.

SPEAKER_00:That is a great place to end. And I do wish we had some more time to dive into it, but want to be respectful of your time and leave the audience on a nice little cliffhanger of you know, if this is the holy grail that you want to get to, head to rapidresult creators.com and uh set up a conversation with Derek to learn more, figure out how to implement these systems.

SPEAKER_01:Thank you, guys.

SPEAKER_00:Thank you, take care.