If you're a business owner struggling to set the right prices for your products or services, you won't want to miss this. We're going to dive deep into the world of pricing and show you exactly how to identify the key factors that determine whether...
If you're a business owner struggling to set the right prices for your products or services, you won't want to miss this. We're going to dive deep into the world of pricing and show you exactly how to identify the key factors that determine whether your business is maximizing its value or leaving money on the table.
Are you worried that raising your prices will scare off customers? We'll tackle that head-on and give you the tools you need to confidently price your offerings at their true value. By the end of this episode, you'll know exactly what to look for and how to tell if you're undervaluing your work.
But that's not all! We'll also give you practical tips and strategies for correcting any undervaluation and maximizing your profitability. You'll learn how to communicate the value of your products or services to your customers in a way that builds trust and inspires loyalty.
So if you're ready to take your business to the next level, join us and learn how to set the right prices for your offerings and how often to update them.
Links and Resources
LinkedIn: Chad Harward
I love when I come across information that just makes so much damn sense. A few days ago I was introduced to a gentleman named Jason Duncan. I'm not sure if you've heard of him or not, but he has a new book called Exit Without Exiting and one of Jason's core principles. And, and I should say that Jason is very, very successful as an entrepreneur himself.
Uh, and he attributes this one. The key concept to his success and that concept is delegation, right? This is something that we all know that we should be doing, but Jason breaks this down in a way that I've never quite heard before, and I realized that this was something that a lot of entrepreneurs struggle with.
I was actually talking to an entrepreneur a few weeks ago who was upset by the output that he received from a new. Most of us think we can tell someone to do something, and that means delegation. This is something that I don't want to do, but I'm going to have somebody else go ahead and do it, and I'm not going to tell them anything about it.
But I have this idea. I have this thought in my mind as to what the deliverable should be, and when I heard Jason's description of delegation, this exact problem. is completely eliminated, and it does go back to the entrepreneur who is asking the person to complete whatever the task may be. So the way that Jason describes delegation, actually involves three different parts.
So whenever you are asking someone to complete a task, you also. Have to tell them why it needs to be done. You need to explain how this task fits into the core mission or the objective that you're trying to accomplish. You can't just tell people to do something and expect it to come out the way that you expect it to in your head.
Along with that, you also need to tell them how to do it right? So are there tools? Are there systems? Are there other pieces of information that are in different locations that they need to pull into, whatever that end result is, right? So you need to show them how to do these things. You also need to describe when it needs to be done.
Is this a one-time task? Is this something that needs to be done by the first or the 15th every month? They need to understand what type of limitations you are expecting from them. Is this something that you need just sort of off the top of your head and you expect it within a few hours? Again, you need to describe.
What the cadence is, how often you're going to need this, and when you're expecting to have it done. So there you have it. Is that the way that you delegate projects? I bet you if you're like most entrepreneurs, it probably is not. So keep that in mind the next time that you are asking someone to do something.
And with that, let's get on to this week's episode.
On the Invest in Square Feet Podcast, we unlock the secrets of wealthy entrepreneurship. I'm Matt Shields and my mission is to help business owners just like you, protect your wealth so that you can invest passively into multi-family real estate opportunities. Today we're going to be talking about concepts that hit very, very core to the problems that entrepreneurs run into.
When we all start our companies and our businesses. We have these great ideas as what life is going to look like. But as we get into actually running those businesses, life doesn't look quite the same way as what we envisioned it. And this is a problem that a lot of entrepreneurs struggle. Today we're gonna be talking to Chad Harward.
We're gonna be tackling things like how to set the correct pricing for your offerings. We're going to discover some key factors that can determine whether or not you're maximizing the value of your business. This is a big one. We're going to overcome the fear of raising prices. I know that this is something that a lot of entrepreneurs struggle with every single day, and probably the most important, we're going to master the art of pricing to be able to take our business to the next level.
And then we're going to talk about what to do when you reach that next level and how to remaster your pricing to. To the next level. So you are always improving and you are always striving for that next level.
I'll give you a couple, uh, a couple stories. One of my favorites was, A remodeler I met with, and one of the questions I always, uh, ask everybody when I first meet with them because we, we treat everybody like they're our first conversation, first client. Um, and value is very individual. You know, one person's form of such version of success and, and hitting the mark is different than someone else's.
So we never tell people what that is for them, but I will ask them, what does that look like? Uh, one of these remodelers, I, I asked him, so what would be, if, if we were together, what, what would be a winning outcome for you? And he said, you're gonna think I'm crazy, but if you can help me, Six to eight hours a night.
That would be life-changing for me. He literally was doing beds after hours until, you know, 3, 3, 4 in the morning. He forced himself, to try to get some sleep because the rest of the time he was so stressed. And Anxie has anxiety of. Of, you know, how am I gonna get this all done? Am I gonna make enough money?
And so he just, literally, his business was literally killing him. He says I am just really concerned. Doctors told me I gotta figure out a way to, you know, sleep. And, uh, it was cool within 30 days. He said, I am, I'm a new man. I, I can't believe what it feels like to have six to eight hours of sleep. Um, so that was one example.
On the time side, we also look, at the money side. Um, we've got, uh, uh, one of my favorite stories there is a, uh, a custom pool contractor, swimming pool contractor. I met with him and his wife. , uh, she was, she was really stressed. She wasn't part of the business, but she was, if you're an entrepreneur, you know, your spouse is part of the business, whether they want to be or not.
And all that comes with that, cuz whatever is at work comes home. She says, Man, I, you know, I don't see him a lot. Uh, secondly, we're making money. We seem to be paying bills. I have no idea where the money's going. We don't have. , like a long-term plan. I don't, we don't really, we don't have a retirement set and I'm just nervous.
What if he stops? What if something happens? Um, we have no plan B and there just seems to be no other than him just working around the clock, there seems to be no constant to our, our plan. Um, she says since, since he's gone through working with you guys, uh, not only have we. , uh, paid off our house. We have doubled our income.
We contribute 20,000 a month to a retirement plan that we didn't have before. And more importantly, I know exactly where all our money is, where it's going, and why it's going there. And she said the peace of mind of knowing that has is, is, is priceless. Uh, just super grateful that, um, You know, I went from unknown stress, uncertain to I, I know exactly every component of our life and where we're going next and when we're gonna arrive to the next point.
And having my husband back has been worth its weight in gold cuz truly for the same reasons he can truly connect with me. And when we go on vacations, we can be on vacation and both relax and really enjoy our life together.
Yeah. No, that's, that's incredibly powerful. So what would you say is the average, um, conversion time, I guess you can call it, where you, again, someone comes in their life is a mess. The exact stories that you just said too. Um, you know, this is, maybe not, you know, at the peak of things, but like this is a dramatic shift in the right direction.
What, kind of timeline are we looking at, to be able to start achieving and feeling some of those changes?
absolutely. So it's interesting. The time comes sooner than money typically. Um, but within, like I said, this remodeler, uh, consistently within 30 days of us taking what they're normally putting into their business on a typical day and restructuring it through measurements, systems, processes. within 30 days easily, they start feeling and seeing a difference in their day-to-day operation from a time standpoint and what I call emotional overhead that they've been putting in, in the form of stress, firefighting, reacting, um, it already starts feeling lighter from that standpoint within the first month.
And then our programs are set up on a six-month increment, so within six months we can take somebody. , uh, what I, what I kind of call organized, um, disorganization and reactionary models or very little systems, processes, uh, measurements. Uh, put our tools in place, have them implemented and operate on those principles.
And within six months, the money starts to show up as well. Um, uh, I would say even in some cases, within three to six months is very real. When they start seeing more profit, they're keeping more money. Their average tickets go up. They're doing ho honestly, um, our, our, our model or our, our, uh, theory is we'd rather you doing less work for more money than maximum work for just enough to get by.
So ways that, um, you know, racing to price and watching my numbers and systemizing that, um, and, and really. Knowing and making decisions off what my numbers are telling me. Um, it's crazy how fast, um, that can make a difference. It's, you know, in business we have lots of numbers, lots of measurements we're looking at.
In fact, that's part of the problem. It's like, what of all this stuff is the most important and what order should I look at as far as. Planning and taxes and payroll and my bids and sales and ratios. Um, if you, there's really only five to seven that we call key performance indicators. If you're, if it's, if I put, uh, you know, I call it, you know, an ounce of effort and resources into that, I get 10 times the return versus me.
For example, uh, one place people like to look at is maintenance and repair. Yeah, it's an expense. It's making a difference, but it's not going to move the needle for us to fix that near to the degree of looking at something that often. Something I don't wanna look at, like most clients. Like I don't really wanna know my numbers.
It just stresses me out and I don't, I'm afraid I won't sleep at night. Well, ironically, they're not sleeping anyway because they don't know their numbers and they're hoping for the best. So yeah, I would say, um, when we have the systems and processes easily, the money side of it within three to six.
Yeah. And, and I, I'm glad like this is a perfect transition because I was, I was thinking of how to, how to kind of work this in, but you, you mentioned the pricing side of things and I feel like that's like one of the biggest challenges, one of the biggest hurdles, one of the biggest roadblocks that everybody puts in front of themselves.
You know, when, when, especially when they're first starting out, like they, you know, I'm gonna, you know, I'm gonna do this and I'll make, you know, $200 off this job. Right? And, and you know, if I can do that five times every week, you know, then I have a thousand dollars and, you know, that's no way to be able to run, you know, run your business, run your company, or anything like that.
Right. You know, you, you want to make sure that. Your, obviously your, your, your, your baseline costs are, are covered, but then you should be, you know, factoring your, your pricing, at least this is the way that I look at it. You should be factoring in your pricing to make whatever it is that you want to be making.
Right. You know, on top of whatever your expenses are. And, um, I'm just curious from your perspective, like, is this, is this one of the major challenges that a lot of people seem to have where they can't, they can't. They, they, they kind of get stuck in this loop, I guess, where you, where they feel like, uh, if I increase my prices, I'm going to lose customers, which then I'm, I'm going to be scrambling for more customers and, you know, I'm not gonna be able to do as much work.
Although the other, you know, the other side that they might not necessarily think of it, I'm, I'm, I'm going to have fewer customers, but I'm gonna be charging them more, so I have to do less, which then is going to equate to more money. But, you know, is, is not going to, uh, involve nearly as much of the, you know, being spread thin and I've gotta be over here and over here and I've gotta do this.
I've gotta do that just to please everybody to make, you know, barely make, you know, ends meet. Is that, is that kind of one of the major roadblocks that everybody, you know, kind of runs?
Yep. You nailed the head. You nailed it. Uh, nail on the head. It, um, it is always. A bigger issue and I will tell you 100%, uh, based on me testing it out myself with my clients, business owners have a way bigger issue with their price than their customers do. Uh, because they go ahead and make the decision for their customer that, oh, they're not gonna be able to afford that.
And what that really is, is me being, being okay, not pushing myself to raise my price to the value. That, that I should be at. Um, let me give you my, there are two sides going on here, Matt. One is strategic and the other is emotional. So let me talk to both. First, is the strategic, okay? And I'm gonna date myself.
If you remember back in the prices, right? One of my favorite games was the Plinko game.
Oh yeah, board, you remember that? Uh, he dropped that little puck down and it bounces around and hits those pegs, and you want it to drop in that $10,000 slot, right in the. Um, and I've realized that strategic pricing and cash flow in business is simply a lingo board.
Um, and, and good cash management works like that. The reality, what? It's the reality. Whether you wanna play it this way or not, you make a sale and that's the hockey puck at the top of the Plinko board. Uh, you drop it down and it's gonna hit some pegs. The first set of pegs is two. the first set of pegs is what we call variable costs or direct costs, which means those are all the costs that are associated with me fulfilling my product or service.
There's only gonna be a few of 'em. Uh, labor materials, uh, distribution, costs of moving the material, and possibly commissions. If I'm paying a commission to have a sale done. At that point, you, you know, it's direct cost cuz you don't have to pay those if you don't make a sale. So they're directly related.
As soon as you make a sale, you obvi, you're, you're on the hook for those costs, okay? And that's what we call direct costs. The next set of, uh, pegs down the p plana board is what we call indirect costs or overhead, um, taxes, rent, uh, loans, um, you know, salary, salary, payroll. Um, labor that's not tied to the job.
Anything that you're gonna be on the hook for, whether you make a sale or not, that's gonna show up every 30 days. That's your indirect cost. And then the, you know, and, and every time that hockey puck or your dollar sign, think of a dollar sign with the, on a, on a top of a hockey pucks bouncing around.
Every time it hits a peg, it shrinks. There's less and less of that dollar and whatever comes out the bottom, that's what you get to keep. That's what we call net profit or the bottom line. , what do I really get for doing this product or service? That's what I get to keep as the owner. Um, the problem is most business owners, small to mid-size companies, they think, okay, I wanna make 10%.
I wanna have 10% come out of the bottom and make 10% of the profit. So I got my labor and I got my material. I'm gonna mark that up as 10. And so all my costs are covered for the job and I make 10% Problem is they don't factor in all of the lower section of that Plinko board and come to find out they're 7% of uh, or 10% or 13% down below, and they make 3% or they lose money on the job.
It's like, well, I marked it up and we, you know, I cover everything came in on the job, but they didn't factor in all the rest of the cost, of running the business. So there's that element, and therefore, the only, there are only two ways to increase what I get out of the bottom is to increase the sale price. And the other way is to reduce costs.
Well, a lot of times it's a, it's a limited amount that we can do with lowering costs. At some point, you've still gotta have help. I've still gotta have a building. I gotta have equipment and vehicles. So you, we, you make way more money. Uh, there's a way bigger upside on increasing sales and increasing price.
Um, so the volume of sales is, is one way you increase the revenue and the other is increasing yours. Raise your price. 30%. It becomes a lot easier to have something left, left over. So mathematically, that's how it works. Now, when we go to do that, then the emotional part comes into play, and they, and we freak out.
Um, and I believe it's because they, the owner are not sold on their own, their value. They contribute their own experience. And what, because it comes so naturally to us. That we don't think it's really valuable out there when somebody else is like, man, your piece of knowledge that you just know, like, breathing will save my business or will give me that record year that I need.
That's what's going on on their side. And yeah, if you can show me how to make $10,000 with a hundred dollars, why wouldn't I do that? And, now, and we're charging $30 for what, you know, um, we're, we're charging a fraction of that. There was a great, uh, uh, analogy that Tony Robbins used on this, where, um, a large, uh, factory had had, um, uh, multiple, about 10, 15 different pieces of large pieces of equipment, hundreds of employees.
One day, the whole factory just goes black. Everything's shut down. Nothing was working. Employees look wandering around wondering what we're, what we're supposed to do. Gets on the phone and calls a call, and a technician says, my, my factory is down. I need you as soon as possible. You've gotta come and fix this.
And he walks in, takes a look, goes to the, goes to the control panel, and finds one screw and turns in a quarter of a turn, everything suddenly comes up and the owner of the factory's going, oh man, thank you so much. What do I owe you? and he said $10,000. He said, what? $10,000? Like you were barely here.
Like 10,000. He said, yep, 10,000. He said, well, can you like invoice me for that? Can I see what I'm getting? You know? He said, yeah, I'm happy to do that. Writes down a handwritten invoice, hands it to him and says, uh, two line items. Uh, turning the screw $1. Knowing which screw to turn, $9,999. So it's all about our value that Yep.
It might seem very obvious and easy to us, but how valuable is it to them and, and literally that's the difference of them making. And winning their, you know, winning their business and, and maintaining, you know, it, it, you can't put a price on that. And, and it's our job to, we need to ask, we're, they're not gonna say, will you charge me maximum price for the value you contribute?
They, that's on us. That's on us. Um, I'll wrap up with the story. I t I talked with a, um, a remodel, another remodeler, and he said, man, Chad, I, I am so busy. , I am, I'm burning out. And I said, man, that's a good problem to have. He said, he said, well, the problem is I'm not making any money. I said, well, that doesn't make any sense.
Um, when's the last time you raised your price? And he said, about 10 years ago. I said, well, there's no way you're gonna win in today's cost cuz everything kept going up and you've gotta raise your prices at least 20% to get any kind of profit. And he said, yeah, you're right. He said, but I can't do it. Why not?
Because if I do it, I'm gonna lose all my customers. And, um, he would rather be burnt out and continue to have people willing to pay him below what he's valued at than, uh, then, to make profit. Um, there's a, uh, I'll wrap up with one more story. Uh, the analogy with, um, this hanging onto things that don't work, and this is a big one because it's all emotion.
It's how body and are we to our value and, and how long will we hang on to what's not working? Uh, they're, they, they've studied monkeys and how they get, how they catch monkeys, if you've heard of this. Um, they'll put peanuts in a hole, uh, in a, in a log or a tree. and they can smell 'em from a long ways away.
The monkey will reach in, grab the peanuts. And uh, the crazy thing is once they have them in their hand, they will not let go. They can put food right out of arm's, reach won't let go. They, they, they can catch the monkey standing there holding onto the peanuts. They, they will, they've, they've watched them.
They'll hold onto the Venus till they go. They're they, they hold onto 'em so long. And the reason is to the monkey, the peanuts in my hand is survival. And the thought process is, the fear is if I let go of these, I might die. But the reality they're not connecting with is the longer I hold onto these, I guarantee I'm gonna die holding onto 'em.
And there's so many parallels to so many business owners that I've seen whether. Um, letting go of that person, you know, should have been let go 12 months ago. They're never gonna produce for you or that bad marketing campaign or me holding onto my pricing from 10 years ago. Cause I've got these moldy customers that I know I'm gonna lose if, if I don't, you know, raise my price and ask for, you know, what I really am valued at 10 years later with my experience.
Supply and demand and all those things, and bottom line, what I need to ultimately get out of my business. At some point, those things all have to factor in, and until I'm willing to let go what I've already got. Uh, then, uh, nothing's gonna change. And I, so I, I tell people, you gotta move from the monkey trap to the monkey bars.
If you remember those going in grade school, they're really hard to do at, at, at my age now. It's painful, but you just swing across those. , but you don't get to the other side without letting go of the bar you're on and, and you're constantly looking at the next bar. Well, in business, we need to know what, who the next person is, what you will outgrow, where we're at, and we've got to be really good at letting go, taking what's next, letting go of that, taking what's next.
It's easy to, lose things that are, you know, obviously, um, Los. what gets trickier as you, as we grow and we let go of something that's good for something's better, something better, that's best, and but the better we are at that, the more resources we get, the faster we get where we where we wanna go.
And it all has to do with price. Starts with price. and we have to be the first one to believe and be sold on our own price and value, which means we need to educate on value that we offer not, um, if, if we don't know the value and we can't communicate that in terms that matter to our client. , then we naturally do become a commodity, which is only based on price.
Then the low price is the only way that customer can differentiate and make their, make their decision. It's our job as the business owner to communicate, educate, and hold our line. It's like, yeah, um, I don't know. You know, that's where our price is. That's what we're valued at today. Um, it's their job to afford the ticket.
It's not our job to reduce our value so that they can play. As long as we're truly giving measurable value that matters, um, then you know that, then that's okay. But usually as I work with businesses, the business owner is the one in the way of that. Um, not, and, and I will push my clients to raise their prices at least once, if not twice a year.
And we look at conversion rates. It's like, I don't want you getting every bid. If you get every bid, we need to raise our price another 10. , I want you to be in that 70, 80% and be able to say no to a few people because then we know we're getting maximum value for, you know, where the market's at right now.
Um, and, and then we keep testing and, and, and adjusting up and down based on that. And the crazy thing is they go, okay, I'm gonna trust you, but I'm probably gonna lose some. Not only do they never lose clients, the clients come back and go, yeah, I kind of wondered when you were gonna raise your price, cuz everybody else is like 30% more than you.
And so anyway, that's long answer to your question. But really, if we are serious about getting where we want to go next, it has to be us getting fair market value for what we do, which means it starts with me as the owner. I gotta be the first one sold because it, and I've gotta believe. I gotta believe in my value because they'll fill it from you.
If you're wishy-washy and you're not really bought into your price, um, or you feel it's too high, you know, I'd say, you know, get a crazy number that you're terrified of and then take half of that, and it's still probably at least 50% above where you're currently pricing, but you've gotta go test it and find out, and pretty soon you'll see, oh.
people do pay this level and they do value me at that level, but you have to have evidence, and the only way to get evidence is for you to test it out and go out and ask for it, and then the ball starts rolling. But it, it's interesting, the fear never leaves. As I've raised my prices over the last 20 years, I still, it, there's still, you still have to pass that test every threshold, and so you just get used to doing that and you just do it faster.
And, and so, so that was gonna be my next question, is how do you establish that pricing? So is it really, again, just a, uh, a matter of, you know, testing things and, you know, this one I'm going to, I'm doing this project and I'm going to go up and, and I, I, I guess, I, I guess there's the element of, you know, all the variables that each one of the projects, you know, have.
So it's a matter of establishing, you know, this is, you know, this is the cost for the, the material, and these are all my fixed costs and everything, right? And then like, like you just went through, like the Plinko board, like these are, these are the fist costs, these are all of our, um, our, uh, you know, uncontrollable expenses, you know, the rent and all of that type of stuff.
And then, you know, this is one I want what I wanna make on the, on the, the bottom side of that. So I'm going to do this one at, you know, 20%. And then the next one I'm gonna try 30%. And the next one I'm gonna try 40%. And wherever you kind of start breaking wh which like you, you mentioned before. , um, you wanna be in the, you know, 70 ish percent conversion ratio.
So wherever you start dropping down into the, you know, 50% range, you know, okay, maybe you're a little bit too high, let's back that off a little bit and then, you know, get back up to around that 70% mark and, you know, kind of go there for six months and then, you know, maybe the market would've changed.
And then you, you kind of go through that exercise again and maybe you can, you know, get where you originally were, were pricing. Yourself, you know, six months from now is that, that's basically the concept, basically the idea there.
Totally. The, totally the deal. Um, I'll make, so this is a really easy way to transition because I know even once I talk, people are freaking out going, oh, I couldn't raise my price 30%. I, I, you know, it, it's just really scary if you've never been there. Um, and it's, you start gro moving into this space. Um, so let's, let's just look at what the reality is.
The reality is. At some point, I want to have choices to not have to do my business, whether I sell it, whether I transition out of the day to day and somebody else is operating it. But any path you choose there for exit is gonna require a mathematical number for me to pay off all my personal debt, pay off my business debt, and maintain my desired lifestyle that I want at point B.
So, First thing is we establish our own economy, which is, okay, that's my number, and then we've gotta timestamp it. What's the maximum amount of time I want to invest moving forward to accumulate that number? And let's say it's five years, I can go, I got five years left in me and I'm gonna do one more push.
And that's the number I need to be able to have the resources to truly walk away from. , um, then you reverse engineer that number divided by five, divided by 12. Now I've got my monthly number, which I can take weekly, and I can reverse engineer that to my baseline price per job. If I'm doing our average, uh, projects, we, we, we get, let's say 20 jobs a month in, then my average ticket needs to be no.
Then this number for the Plinko board to spit out X, you know, a plus 20% that times five years from now and 20 jobs a month will equal that destination number. Uh, that becomes the first criteria because once we look at it through those, through that, that, that criteria, it doesn't matter near as much what's going on outside my doors or what my competitors are.
that's the baseline I need just for me to get, have some choices in five years, which is, for me, the most important thing. And then I look at, okay, that means I need to convert at least 70% and first step is if I'm only converting 40% and I need 70, then instead of lowering the price, which is where most people will go to make up the other, uh, 30%.
I would say increase the. , what else can we charge for? How do we, how could we increase an uptick? What things are we naturally giving away that we're not charging for that that is different than our competition that people would have like guarantees. Uh, turnaround time, availability, locally owned and operated.
Um, reputation, things like that. The people, that's why they buy a hundred thousand dollars vehicle when there's a $10,000 vehicle that will get you the same. , it's all about dialing into what are people willing to pay for that matters to them, and then me educating and charging for that. And we just, you know, add that to my bottom line.
And that becomes, yep, that you're, you're gonna pay more, uh, for us by about 30% that the c your client will test us. They're really good at, at what they do. Um, we need to be equally good and say, yep. Um, and here's what you will get for that extra 30%, which is. You know, a hundred, you know, 10 times what I'm charging.
And you won't get that with these options. I'm not trying to talk my competition down. I'm just simply telling you that's what you'll get and this is what you'll get over here. Are these important to you? Great. Then yeah, we're good. What other questions have you got? Um, and we decompress. Um, not have the energy about, it's just simply.
Talking about the weather. Yep. It's rainy today. It's sunny today. When we can make that comfortable about talking about our money, which, and I've been there once, money starts coming in the conversation, we get all tight and anxious and kind of stammer, and they pick up on that. They know, oh, they can smell blood, blood in the water, and they will, they will go after that.
We gotta be really good at believing and being bought into what we offer, what we provide.
Yeah. The confidence is, is, is key. Absolutely. Um, and, and, and you know, one of the, the, one of the great things about this is, you know, we're arguably in a economic downturn right now. Right. You know, I, I feel like this, these, these methods, these processes, this approach, this mindset. is agnostic of, you know, what the market is doing, right?
This is, this is an approach that should be applied, you know, no matter what the, you know, what the, the stock markets are doing or what the, you know, what the economy is, is looking like, right? I mean, would you, would you agree that these are tried and true? Tested practices, you know, through all types of different cycles, up, down and upside down, doesn't matter.
Um, you know, the, this is the way that business is done and you should be able to look at your business and understand that this is the direction that we need to go or we need to do this to be able to get to wherever this, this outcome is. Right. Would you agree?
absolutely 100%. Um, this is the difference right here. This is the threshold or the pivot point of thriving businesses and surviving businesses. And it's interesting in a thriving economy, there is a vast majority of surviving businesses. And it's so funny because I've been there working with them in the thriving economy, they operate as if it's a, if it, as if it's a downturn and it's like, why are you operating?
Like you have to go beg for business when there's so much opportunity. And why is your price still the same? Uh, now's the time. You should be, you know, taking advantage of that. But the reality is it's best practice. Our price is our price. Our value is our value. Does not matter what economy we're in, that's irrelevant.
the things that I can control are my own value and my own pricing, which ultimately controls my destination. Um, you know, I tell, I tell businesses, you know, it's like we all have our own bus and you are the driver of your bus. Nobody else can drive your bus. As an entrepreneur, you get suited with your own shiny.
and you have two responsibilities as the driver of the bus. First of is to clearly identify where are we going? And I see too many business owners that have buses with nothing on the front. They're just driving around the block. They'll bring on anybody that wants a ride and then they keep driving until they finally run out of gas.
And it look and and I, they literally say in the conversation, . Um, yeah, I mean, I've been at this 5, 10, 15 years. I feel like I'm on a treadmill. We're just nowhere different than we, we were when we started. Well, the reason is I've clearly not identified where I did want to go in time and money terms like we talked about.
Um, and secondly, their job is to get the bus there, which means I gotta be, I'm in charge also of letting people on and off the. , which when we talk about letting go, it's like, yeah, I think this is your stop. This is a good spot for you to exit. And we actually need an up-level person here, and this is the next person that we're letting on off.
Um, clients. We got a limited number of seats for people, for staff, and for clients. You can only do so many jobs in a day, week, month, year. . Um, we gotta make sure the people that are on the bus and in the form of clients are our best clients, best dream jobs. And if they're not, again, um, here's your next stop.
And we need to make room for those if we don't make room, even when people wanna do business with us. And I've seen that, you know, contractor said, man, I said yes to a so-so. That just to keep my guys busy. And then the next day I had two people going, man, we've been waiting to do business with you. We're ready and you can't get to us for a month.
We we're gonna have to go with someone else. We wanted to use you. That's 100% on the driver of the bus cuz they didn't leave any seats available. And it always comes first. You know, you've gotta create the space first and you gotta trust that my value and trust the people are out. It doesn't work the other way.
Even though we would love to have 'em all lined up, it's like apartment perfect, come on in. It requires us to make the room emotionally, financially first, and then the people and resources show up. So yes, it's 100% in our control, 100% our responsibility as the business owner. If we're not getting what we want, when we want it, then we gotta look at, do I clearly know where I'm going, why I'm going there?
how much I need and are, are we using systems? Do I even know if my numbers today line up with five years from now, or am I just trying to work as hard and fast as I can? You know, one, one myth, I, I call it the, the goal, the, the great myth of business is, Uh, if I work hard enough, long enough and I'm good enough at what I do, I'll suddenly arrive at all this time and money freedom that I hoped for when I quit my job and started doing what I love, which ironically, they don't love it very long when it's like a ball and chain and they can't ever get to where they want to go.
So yes, best practice is I gotta shut down all the noise from outside and other people subscribing to those models. . Yeah. I'm just gonna wait and see what happens in the spring and we'll, we'll make some decisions then. It's like, why, why would you wait? Um, the one, the most valuable asset we've got is time.
You can't go borrow more of it, and it's all about maximizing every minute, hour, day to make sure that I'm getting the highest, that the return, the minimum return I need to end up in destination B. No longer than five years from now, one year from now, three years from now, we can chart that course just like a GPS is a great.
You know, tool, it will tell you to the minute until the 10th of a mile, when you're going to arrive at where you, where you need to go. But it does nothing for us if we don't have a destination clearly established and a specific one, not. I want to go to LA but I really need to go to 33, 33 Riverside Drive.
And too many times we throw a general idea out there. I wanna make at least this much. Uh, it's tough to, to calibrate and really run a fine tune business without those specifics. So, long answer your question. Yeah. Best practice is know where I wanna go. Control who, who's on my bus, and make sure that I'm making necessary changes.
Looking at my data, looking at my gps. Make the make, make the decisions quickly and don't become the monkey hanging onto how we. One year ago, five years ago, what got you here won't get you there. Even when we were a decent con size company and we want to be a, you know, 10 million company. I'm currently a 4 million.
The road, the road is uncharted. Um, wherever we're going, um, we're going to have to do significant differences and changes to get what we want next. Um, but we've got. Learn, make quick re reactions quick. Uh, I've got this, um, hang, got this clap right here. This is totally believe in this. Sometimes you win, sometimes you learn.
Both are good. There's no way that we can, uh, get where we wanna go without learning and. It's crazy. People just have this, you know, stigma about things not working out. I failed at it. No, you didn't fail. It didn't work out the way we wanted. So now the question is why? What did we learn that we don't wanna repeat like the moldy peanuts and what did work Cuz there's parts of it that did that we can leverage and let's try it again.
And the commitment is not winning every time and having a perfect business cuz nobody. . It's how fast can we learn and then we predict our outcome. And no matter what, all I'm focused on is my number that I need in five years. That's what matters. And I'm committed to the process. Not any single given day or single diff uh, decision.
So long answer your question, but yes, that's I believe strongly.
All right. How about that? Right. We'd learned a hell of a lot in this episode. I love the analogy that Chad used about the monkey holding the peanut, the moldy peanut in the log. That's a perfect analogy that most entrepreneurs suffer from when they get stuck in their pricing loops. You figure that this is.
I charged last time, this is what I need to charge this time, and if I don't charge that this time, I'm going to lose this customer. As we learned today, businesses evolve and just because you did a certain type of business yesterday doesn't mean that tomorrow you need to do that same type of business.
Allow yourself to evolve, allow your pricing to evolve, and you will develop a business that you are much, much happier. You can reach Chad on LinkedIn and that is just Chad Harward, which is H A R W A R D or hit him up on his website, pp management.com. and he says that one of the things that he hears constantly is that my business is unique.
My business is a unicorn. I'm so much different. My business doesn't run the way that other businesses do, and he assures me that he has never seen a unicorn business and that he has not been able. To help. And as always, if you want to learn what the wealthy do, head over to Invest in square feet and sign up for our newsletter where we send out tips that you can only get on that newsletter.
That is also the way that you're going to find out about any real estate or investment opportunities that we may have. Invest in square feet drops every Wednesday, and we are available on whatever podcast platform it is that you use.