Mastering the Stages of Growth in Your Contracting Business with Karan Dhillon

by | May 21, 2024


In this episode of the Digital Remodeler Podcast, host Carl welcomes Karen Dylan, CEO of the Contractors Coach, to discuss the business side of remodeling. Karen shares his background, including an MBA from Michigan State and experience in software marketing, leading to his pivot into business coaching for contractors after the 2008 financial crisis. He highlights the challenges contractors face as they grow, emphasizing that success in construction requires different skills than those needed to run a business.

Karen explains that many contractors mistakenly believe working harder or doing high-quality work alone will ensure success. Instead, He stresses the importance of shifting from a tradesperson’s mindset to that of a business owner, which involves developing systems, procedures, and effective delegation. He breaks down business activities into past (e.g., bookkeeping), present (e.g., project management), and future (e.g., sales and marketing), urging contractors to delegate past and present activities to focus on future growth.

The conversation also touches on the critical role of mindset and clarity. Karen emphasizes that business owners need to be clear about their personal goals and the lifestyle they aim to achieve through their business. This clarity fuels their energy and accelerates success. He highlights the importance of promoting the business, as exemplified by successful leaders like Elon Musk and Jeff Bezos.

Karen concludes by discussing the right time for contractors to seek coaching. He notes that a willingness to change and the desire to create a better life are key indicators that a business owner is ready for coaching. This episode provides valuable insights for contractors looking to transform their business approach and achieve sustainable growth.


(00:08) hey welcome to the digital remodeler podcast I’m so glad you’ve chosen to join us today and with me today is Karen Dylan I hope I said that right did I get that correct pretty good Carl and I said your name right too you sure did and he is the CEO of the contractors coach uh we met here a few weeks ago and really felt like it’d be a great thing to uh get him on the podcast and really talk through the business side of things when it comes to a modeling business so Karen welcome and if you would just tell us a
(00:44) little bit about your background why you chose to start working with contractors and we’ll take it from there sure yeah Carl thanks for having me so like we used mentioned you know we met a few days ago and we realize that we have a lot in common we’re working with the same types of people uh people who own construction companies and a lot of things that we do are synergistic so um the way I got started into this my background is actually I got my MBA from Michigan State then I went and worked for a bunch of software
(01:15) companies as their marketing person and then I decided I’ve had enough of that lots of travel and I quit my job without realizing that the year was 2008 um so you can expect what happened there it was a struggle and you know know I started working with different businesses because I’m like hey if I can help big companies grow I can help small companies grow and so initially I followed the first rule of sales which is what find people with money that’s money that’s right yeah so we work with you know lawyers doctors plastic
(01:47) surgeons um everybody because everybody was suffering back then um but those people are a little bit of a challenged to work with just because their personalities you know because generally the person who becomes a lawyer or a doctor is somebody who’s like an a student and they don’t like other people telling them that they are doing something wrong you know especially around their business at the same time I started working with contractors and there’s like three three contractors we worked with there was two gc’s and one plumber
(02:17) and the experience was very different these guys were humble they were so willing to learn listen and best of all they would Implement you know because as a contractor you’re action oriented we would tell them to do something they would actually do it I be like this is amazing you know and what happened is that this is around 20091 all three of those contractors doubled in size the plumber did so well that he actually started two new companies and that’s when I took a look I’m like this is very unusual especially given the environment
(02:47) where their peers were going out of business and so that’s when we realized we have something and so in 2012 we formed the contractor’s coach and so since then you know we we developed a process of business coaching that is specifically focused on people who who own a a company in the construction space general contractor or trade and you know since then we worked with about 5600 construction businesses and the results have been very nice very good well let’s kind of walk through the Journey of you know a contractor and and
(03:18) of course you and I you know meet contractors at all levels uh but you know it seems like a a guy gets a A Vision he he wants to to break free of working from somebody else yeah uh he wants to have a little more control over his Destiny so uh he he decides it’s time to go into business you know and uh uh I call him Chuck in a truck he’s got his pickup truck he’s got his tools he knows how to do the work sticks a sign on the the side of the truck and uh off he goes knocking doors handing out flyers doing all those things and and
(03:52) he’s Off to the Races so so let’s talk a little bit about his journey from there so so what are some of the things that you know in your own experience working with these contractors what are some of the the challenges they start to face as they grow and what are kind of those next if you will mile stones that they they hit that causes a a bit of a shift in the way they operate yeah you know so you described an excellent way how people get into construction which is they’re working for somebody they’re like hey my boss
(04:22) doesn’t know what he’s doing I can do this way better um he’s doing this this this wrong and then they decide to start a business of themselves you know either that or they inherited or they’ve even been doing this for like 20 years the same way right either way the challenges end end up being the same which is it’s at the foremost it’s a mindset issue which is most people in construction think the way to be more successful is either I do my job really really well then I will be successful because you
(04:52) know reviews will come in and everybody will see how amazing I am and then people will just line up out the door to work with me or or they think that um the only way to grow is to work harder which is just spend more hours in my business and both of those obviously have self-limiting issues right just because you build a better mouth strap doesn’t mean anybody cares about buying it and the other thing is that you know if you just think that being more successful means working harder there’s only so many hours in the day and after
(05:24) a while that strategy runs out and so that’s when most people you know start to wonder is like what do I do now you know I’m already working 12 16 hours I’m doing my best work my business only got to a certain level and you know the way I explain this to people especially I remember the plumber the what I explained to him that the skills you need to be a good plumber have nothing in common with the skills that you need to run a good Plumbing business which means you could almost know nothing about plumbing and be a
(05:55) very successful Plumbing business owner it sounds you know counterintuitive but there’s nothing you know that is so true that most people don’t realize it that’s why when you see you know because I came from like the Fortune 500 space where you have CEOs of a dog food manufacturing company one year will go and start running a residential company the next year and have phenomenal results because it’s not they know anything about dog food or they know anything about building a house those have nothing in common but they
(06:28) understand the business systems and business processes they need to build a successful company so having seen that I brought the same ideas and mindset into the people that we work with which is look the first thing you need to understand is that you’re not a contractor if you think you’re a contractor you have a problem because then what does a contractor do they want more work so then you will just go find looking for work right or looking for more work I mean and then you’ll find it and then you’ll be busy and then you
(06:57) won’t have time to find more work then you’ll do the work then you won’t have any more work left then you have to go find more work you see the cycle versus just understand that you actually are a business owner you own a construction business and your job is to then develop the mindset and the behaviors of somebody that actually owns a business and those that pattern of thinking and that pattern of behavior has almost nothing in common with somebody who applies a trade right absolutely yeah I I think it’s
(07:31) interesting what what you’re describing there you know I think a lot of uh contractors don’t understand that what got you to the point you’re at today is not what’s going to get you to that next level there there are new things you’re going to have to learn and Implement to get beyond that so great great thoughts let’s continue on that path yeah so you know when they start working with us and we explain to them like okay this is what we’re talking about we’re actually talking about help helping you develop a
(08:00) business around your skill set or your trade and in order to do that um you know I keep mentioning mindset a lot what you have to do is you have to really start thinking differently and what that means is you have to understand that your business exists in three time zones there is the past the present and the future and you have to look at every activity that is going on in your business and put them in these time zones so for example if you look at business um look at its past okay what what activities of a business represent
(08:36) its past all the bookkeeping right accounting the only reason you have any bookkeeping or accounting issues is because everything has been done you’re just trying to like match the numbers that’s that’s something that happens in the past um tracking all of the budgets you know how much we spent here how much we spent there on an ongoing job right it’s not quite to the bookkeeping level yet uh the work in progress tracking even that’s only about things that have already happened right um tracking cash
(09:04) flow sending out invoices collecting money all of that stuff also represents what’s happened in the past right so all of the back office functions that happen you know in any business especially in a construction company all represent the past now if you look at what’s going on in the present in a business anything that’s an ongoing job right once a job’s been sold all of the project managing the budgeting the scheduling uh the punch lists the customer satisfaction issues all of those represent the activities that happen in
(09:37) the you know the time zone of the present these are things that are happening now then there’s the future of the business so what what determines the future of the business that is your sales activities right um how many people are you actually talking to and bidding those will result in actual signed contracts um before that you actually have to go out and get some leads which means means somebody said hey I want to find out what you guys do um can you come out and take a look at my job or a contractor if you’re a sub
(10:06) says hey can you give me a bill right all of that represents things that that will determine your future because that is work you haven’t landed yet and then finally you come to the ultimate activity that determines your future which is what marketing right because if you look at the most successful people on the planet Elon Musk Jeff Bezos Warren Buffett all of these guys if you look at what they actually do what are they doing all the time they’re out there promoting their company right yeah I mean you’ve heard of Elan mus you know
(10:36) sleeping in his shop but that’s not his main job right his main job is to be out there promoting the business being the face of the business you know the proverbial uh what do you call it shaking hands and kissing babies right so as a business owner that’s your actual job which is to be out there promoting the business everything else that’s uh that doesn’t represent that you have to get other people you have to delegate that to other people as quickly as possible why because if you look at your past how much of your past can you
(11:08) change obviously nothing right so if you cannot change it should you be spending time on it no it’s a complete waste of time right so get out of that as soon as you can you should have gotten out of that yesterday right so that’s the first thing so when somebody works with us the first thing we do is get them to line up all the activities that represent the past and hand it off delegate train teach you know build procedures Sops and get other people do it you can’t do that fast enough the second thing is now
(11:38) you’re present what’s going on on the job sites your Foreman field guys interviewing hiring people all of those things are important but again not contributing to your future because those are things that have already happened they need to be done right there’s no question so your job then the next thing is you have to go hand off all the activities that represent the present so this is where you start to you know really get into the meat and potatoes start building your training procedures your Sops start learning how
(12:06) to hire people properly start training your managers to learn how to hire people properly so that all of the work that’s going on in the field eventually is done by a trained team of people and then finally get to the activities that represent your future which is what sales and marketing and there most people first of all that is something you hand off last because you can’t screw that up because otherwise have a business right then you have just a hobby um and so when we get to this stage most people look at sales
(12:37) they’re like oh I need to hire a sales guy I was like okay but what you don’t need is a sales guy what you need is actually a sales function which means there is a system that generate leads there’s a system that qualifies those leads so that you’re not just running around all over town you know just dealing with Tire kickers um and there’s a system that then you know schedules you outs you uh has a process of bidding and estimating which you should also have eventually somebody do a process of
(13:06) learning how to close deals and then learning how to teach people how to close deals because what you want as an outcome of this is to have a sales team somebody that that is and managing that sales team so that they can consistently generate future revenue for your business and then your job is to as quickly as you can limit your activities to just being the face of the business because in any business think about it who has the highest level of credibility yeah obviously the owner right so your job really is to go out
(13:41) there and promote the business that’s it because you there will be nobody better than you in doing that and so as soon as you get the sooner I should say you get to that stage the faster your business will grow in fact the more you do the other activities you’re actually harming your business right so I’ll pause there because as you can tell I can just go on and on that’s good that’s a lot of good stuff coming out of that so you know one of the things you you got into and this is a place I see so many trapped is they get
(14:11) trapped in that present State and and sometimes that’s this perfectionist mentality Nobody Does it Better Than You and I think as business owners we all are that way Nobody Does it Better than me so how do you get out of that mental trap you’re you’re proffe you you want to micromanage everything what what’s kind of the guidance that that you give to somebody that that just keeps getting stuck in the operational minutia of day-to-day operations um it’s a mindset issue right you cannot give somebody advice around
(14:48) this what you have to do is you have to help them come to what I call is an agreement an agreement with themselves and that agreement is around what do you want out of your business right do you want your business to be your job and it’s surprising how many people say yes to that you know because they’re like hey this is my comfort zone my security blanket right I get up in the morning my wife says get out of the house I get out I go to my work I’m there from like you know s in whatever time you get there till 6 I feel good
(15:25) about it you know I’ve done my job I’ve earned my living then I go home home right and I feel like I’ve you know done something good okay if that’s what you want there’s nothing wrong with it right but just understand that all you’re doing is just having a you just have a job yeah you created a job for yourself just created a job for yourself this and again nothing wrong with that the only problem is you are in the worst spot of all because if you have an if you’re have an employee who has a job you just
(15:55) clock out you got no more problems right every problem that somebody El is right but as a business owner if that’s what we call this space and if you have a job now you have the worst position right you’re working all the time and you have all of the problems that you have to deal with so essentially you know you got double risk and only like one reward so going back to what I was saying is you have to come to an understanding with yourself what do I want this business to do for me the reason most people start businesses is
(16:26) not because they wanted to work 16 hours a day right the reason they start businesses in the beginning was because at the back of their mind they had an idea hey if I do this I take all these risks I create a business and if I do that and I succeed I can create a much better life for myself and my family than I could ever do running a job or having a job right that’s why we get into the the space of starting businesses of doing all the risks and taking on the hassles however once we get into the business all of those
(16:58) thoughts go out the window now it’s just a constant state of firefighting like what do we what problem do we have today you know what employee issues do we have here this that and the other and now pretty much you’re sucked into this Vortex of this uh business that you thought you had which is essentially a glorified job and if that’s what you want that’s fine but if you actually want to go back to the original intent that you had when you started the business which is you wanted to create a much better life for
(17:25) yourself and your family maybe even generational wealth you know for your kids and people down the road and a much better space even for your employees then you really have to understand that as a business owner it is your responsibility to turn this thing into a business into a self-sustaining business and the example I give people just to understand you know to contrast that is know we’ve all been to like a mom and pop coffee shop right Mom and Pop are friend you know great good to talk to Donuts are amazing um people like going
(17:58) there um but if Mom and Pap are not working guess how much money they’re making you know obviously not okay but we all also all been to a Starbucks do we even know if the owner of the Starbucks knows how to make coffee no we don’t that’s not the point right nobody goes to the Starbucks and says I’m not going to drink coffee because I don’t see the owner I want to talk to the owner nobody goes like that and it’s one of the most successful you know B companies in the world and so the take away from that is that if you think
(18:34) that you’re the only one that can do this job the way it’s supposed to done that’s simply delusional and simply padding your own ego the reason you cannot get somebody else to do the work at the Quality that’s needed because yes quality work is important because it is your company and your reputation okay that is your responsibility but the reason you cannot get other people to perform at that level is because you don’t understand something that’s Starbucks does the value of systems the value of procedures
(19:04) which train people on those systems and the value of accountability right of hiring and training and maintaining a good team that is a skill set that’s very different than being good at your trade and so as a business owner that’s one of the most important skill sets you need to transition into while you’re managing the present because eventually you will have to give that up as well to somebody else who can do it better than you right because your job as an owner like we discussed is to manage the
(19:33) what Market Market those sales right so basically what I’m going through is that you know there is a mental upgrade consistent mental upgrade you have to go through as a business owner and most people are have no idea that this is what it takes right because they all they believe in is like look I work hard I can put in more hours I can be better at my job I can you know push my guys harder fine but that’s not taking any any fun exactly now you know something you you’ve mentioned a couple times that I
(20:05) think let’s dive into a little bit you’ve talked about mindset I think sometimes mindsets an issue and maybe you can elaborate on this because that the business owner actually lacks Clarity they’re not exactly sure what they want it’s this this vague idea out there but they’ve not taken the time to do the Deep work to really figure out what do I really want you know what does it take to get there exactly I think you just hit the nail on the hat that is the source of all the problems is because the thing is
(20:41) if you can’t think right you will never do right right you might succeed by accident but that’s not something you want to like bet your whole life on so this the the piece that you’re mentioning that you’re picking up on is the whole crucial factor in what whether somebody succeeds in creating a great life for themselves or not because the way I describe it is this that I say okay you need to visualize something like this is you this is your business first thing you need to understand these are not the
(21:12) same thing you are not your business okay that sometimes is difficult for people to process because they’re like what do you mean if I’m not there there is no business I am the business if I don’t run this thing nothing happens I’m like yes that’s the problem because you merge these two things okay you are not your business what that means is you could shut this thing down you would still exist right so the point is yes you have a business the important thing to understand your business is a
(21:38) reflection of you more importantly like you’re mentioning your mindset so what does that mean how does this translate to the point which you just mentioned which is crucial which is Clarity right you need to get clear why did you start this business and if you really start being honest with yourself the the reason you start this business is because you have some personal goals around the type of life you wanted to lead right that’s why we all start businesses we want to have better life in terms of you know we want
(22:04) Financial Security we want maybe a bigger house fancy cars we want to travel free time some people want to give back to the community do charitable work we’ve had you know our clients go to like Mexico build water treatment plants you go to Africa and do medical clinics all sorts of things it doesn’t matter what the reasons are but those are the important things to focus on because that lifestyle is what will drive you every every single day if you focus on it and the thing is the clearer you are about this you know if you wake
(22:34) up every single morning and you’re like look the reason I woke up today is not to go out there and solve this employee problem or this client problem the reason I woke up today and I’m crystal clear about this is because I want to create this life for myself okay and that life is defined very clearly okay if that is so clear what will happen to your energy level it’s going go up go up right and the basic principle in life is Success requires energy that’s a fundamental principle notice I did not
(23:07) say hard work right hard work is needed from time to time but hard work doesn’t make you successful I mean look at the employees and you know digging ditches they work hard they’re not going anywhere right and so that is a fundamental thing you have to get clear about is that look success requires energy as the owner of a company your number one job is to be the guy that is fully in charge of your own energy level most people have no control over the ener energy because you know in businesses things are great and things
(23:37) are horrible and somewhere in between and they allow the incidents that happen along the way to dictate what how they feel today I feel great because I got a check tomorrow I feel horrible because nobody showed up at this job site right and if you’re going like this that’s how your business will be too so number one like you mentioned the clarity is I have this business to create a life for myself that’s why I wake up every single morning that allows me to keep a high energy level the second thing you have
(24:05) to do is around what you said was Clarity get clear about what that life is because most people are like you know once I this business is successful one day then I’ll have the money then I will create the life that I want for myself right and they have no idea what that is they’re like I’ll figure it out when I get there okay but the point is if you have no clarity around where you’re going what are the chances you’ll get there yeah you’re not going to you’re not going to it’s pretty poor right and
(24:36) so that’s the other thing is like you you act just hit the nail on the head with a keyword which is Clarity and so you have to get crystal clear about where you’re going and why right what type of life you’re trying to create because the other principle around this the second principle that’s involved is that Clarity accelerates success which is the clearer you are about where you’re going the faster you will get there okay and the call coaching process that we have what is the whole point of
(25:05) it right yeah we call it business coaching but the coaching process we have is not for the business it is for the business owner to get to the life they want to live as quickly as possible their business is just a tool the problem is when you’re not clear you just let the tool take over your life right and then you’re just like this hardest working employee in the business okay so hopefully I sort of clarified the question you were asking absolutely so let’s talk through and and we’ll kind of land the plane here so how
(25:41) how does somebody assess is it the right time to bring a coach into their life you know that’s something that I I think a lot of times business owners don’t even think through do I really need a coach so so what is kind of that decision point so for if you were talking to somebody they’re telling you about their business and and uh you know that you know coaching is the thing that’s going to be of of great value to them what’s kind of that decision point for a business owner when are they
(26:09) really ready to let somebody else speak into their life when they are ready for a change right because a lot of people have problems right the problems are not there’s no scarcity but most people are unwilling to do what it takes to to fix their problems and the way they get to a stage where they’re ready to fix their problems is when they’ve just had it right they’re like I’m sick and tired of having the same problems over and over and over again now some people could get there in a year they’re like the hell
(26:40) it’s been a year and I’m have dealing with the same problems some people it takes them 20 years to get there because they’re like you know yes next year will be better tomorrow we’ll fix this right but if you’re not not changing the thinking patterns you’re not going to change your behavior which is never going to change your result so the right time to get a business coach into your business is when you’re like look I need to fix this and I need to create a much better life for myself okay because you have to get to a
(27:12) point where you’re like I’m willing to do what it takes you know because if you want to grow your business 10% or 20% or 30% it’s not a big deal just work harder it’ll get there right so if you’re if you want to do that hey I just need to make a little bit more money fine just work harder you’ll make more money any you know I I say that not offensively but just to make a point any can work twice as hard and make twice as much money that doesn’t take intelligence right but if you want to
(27:42) make 10 times the money you’re making now then you don’t have 10 times the amount of hours so now you need something that you have no idea how that works because if you had an idea you would have already done it right so if you get to a point where like I need to to get a much better life for myself a much bigger business but I don’t know how that’s when you say let me talk to a coach especially somebody who’s done this for hundreds of companies excellent and so along those lines where can somebody learn more
(28:15) about your coaching Services where can they learn more about you so best place it’s our website the contractors so it’s plural the contractors and you go there you can see stories from all the past class clients we’ve had um you know just like everybody you get a you can book a 30-minute call with us talk to us tell us about your business we’ll tell you if it’s a good fit for what we do or not then if it is you can then really start to get on the process and Off to the
(28:42) Races excellent and then you’ve got some additional resources as well don’t you podcast and a few other things yes yeah so we have a podcast it’s called live the dream you know it’s it’s on Apple and everywhere and the idea is if you have a business you had a dream when you started the business now is the time to actually live it and not just keep it as a dream right and so there’s a live the dream podcast the other most important thing you can do it’s is actually assess the business we have on our website it’s
(29:12) called the power model assessment and this is 20 questions about your business and your job is to rank your business from one to five five means we’re great one means we’re I guess not so great right um and this will tell you exactly where your business is you know in the stage of growth because it goes through the five stages every business goes through doesn’t matter what business perfect and so you should take that assessment it’ll give you a free report you’ll get a great sense of what to do next excellent
(29:41) well Karen thank you for joining us today and we look forward to to uh recording some more podcasts on some some common topics that you and I both deal with in the days ahead it’s been great having you as our guest today awesome Carl nice being here too thank you

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