Austin Gray: Real quick, I wanted to share with you two agency partners who have helped me grow Bearclaw Land Services. Striker Digital manages all of our SEO services, and they've got us to number one on Google for specific search terms within our local service business. Cedar Digital Consulting manages all of our social media and YouTube, and they make it very simple for owner-operators like myself. All I have to do is go take photos and videos in the field, upload those on my phone to a shared iCloud album very quickly, and they handle everything else from there. They edit and they publish; I don't have to worry about it. I can focus on growing my business.

So, if you're looking for SEO services, check out Striker Digital. That's Striker, stryker-digital.com. And for social media, check out Cedar Digital Consulting, that's cedardigitalconsulting.com.

Hey, welcome back to the Owner Operator Podcast! I'm your host, Austin Gray. In this episode, I've got Les O'Hara. Les O'Hara is a contractor coach. Les has grown and scaled multiple different businesses in the trades. He's grown a roofing business and is currently owning and operating a masonry business that does about four million bucks a year up in the Chicago and surrounding areas.

I hired Les to help me grow my business, and it's been so much fun working with him up to this point. He brings a no-nonsense approach to coaching other contractors, coming from a sports background—he played college football just like I did. All of his sons played college football, and so that resonated well with me.

Les asks me the hard questions and has pushed me out of my comfort zone since I've been working with him. This episode's going to be really, really fun because Les is going to give you the background—his whole story of how he got into the business, starting with helping his dad grow his roofing business, and then from there, going on to sell multiple businesses and start trade businesses from startup. So stick around for the whole episode; I guarantee you, you are going to learn something if you are a service-based business owner or a contractor in the trades working to grow your business.

Speaking of which, this episode is brought to you by OWNR OPS. OWNR OPS is the online platform specifically for service-based business owners and contractors in the early growth stages. We specialize in creating content for the $0 to $100K revenue mark businesses. Our whole goal is to help you get up and off the ground.

Now we've created a community of other service-based business owners and contractors anywhere from that zero to $1.5 million revenue mark. The reason being is because I've learned so much from people like Brock. Brock has a septic business, Canadian Sanitation; he went from zero to 1.3 in seven months. We actually had him on the podcast; go back and listen to that episode if you want to learn more from him! But people like Brock are part of the group, and they are sharing advice. We also have Bod, part of the group, who is a local SEO expert and teaches a lot of free resources inside the classroom setting of the group. You'll be able to learn things about how to grow your business in those early stage growth years.

So, come check it out! It is $49 bucks a month to join, and we have a trial period for just $1—a five-day trial! Come check it out; see if it's for you. If it's not, no harm, no foul, but we'd love to have you in there. You can visit ownrops.com; that's O-W-N-E-R-O-P-S.com. Let's keep rolling with the episode; hope you enjoy it.

Les O'Hara: Holiday—that's ever come up? I think I'm in like year seven of entrepreneurship at this point, and I don't think I've ever remembered one holiday.

Austin Gray: Yeah, you're always thinking about your business, even on the holidays. Like, "What holiday card should I have sent out?" I just got this holiday card, wow, I should have done that for my business!

Les O'Hara: Absolutely! Yeah, I've received cards from, you know, other vendors and whatnot, and I'm like, "Man, I gotta get better at this."

Austin Gray: Yeah, there's always an endless amount of things that we could get better at. That's the problem.

Les O'Hara: There really is, and I don't think that there's ever been a time where an employee hasn't reached out and said, "Hey, what's our plan for President's Day?" or "What's our plan for whatever else there is?"

Austin Gray: Well, that's the, uh, maybe some of the kinds of entrepreneurship, but there are so many other pros to offset it.

Les O'Hara: There definitely are many pros, yeah.

Austin Gray: Well, thanks for being on, Les. I really appreciate this, and I've been so excited to finally sync up schedules here.

Les O'Hara: Yeah, me too. Sorry it’s taking so long. A lot of moving parts on my side.

Austin Gray: Oh yeah, absolutely. I want to dive into everything. I'll record an intro afterwards. I always like to record them and then just tee them up properly, especially based on like the conversations we get into. But I've already got the—

Les O'Hara: That’s smart.

Austin Gray: I've already gotten the recording going, and so I like to just keep these things free-flowing. But man, I really just want to hear about everything you have going on. I want you to talk about all the different facets of your business. But first, I would love to hear how you got into entrepreneurship, and could you just take us back to the beginning and kind of tell us a little bit of backstory here?

Les O'Hara: Well, I was a failed life insurance salesman. So I got into that. I sold all of my family and friends all the needed policies, which was a blessing because it's another tip for, you know, your audience. So many owners do not have enough insurance for their families—life insurance, especially disability insurance. So I was such a believer in it and really blessed my own immediate family by having them get the right insurance because they didn't even have life insurance. When certain—my father, my brother-in-law—when some people passed, they were at least able to have some money for the family.

So that was the good news of that journey. The bad news was I was young, right out of college, and great at sales but not into the business world yet. Too, too young to know what I didn't know. But I got mentored by a bunch of great men, and specifically two great things that I came out of my insurance career, and that failure was that the great men achieving success had a nice network of themselves together. They would do Bible studies; they'd have business forum groups where they would, like, iron sharpens iron. So I was like, "Okay, that's interesting."

The second thing I learned from these big insurance companies was everything was being put into a CRM. So you had to log your conversations, what products they might be interested in, when to follow up, and that I never even heard of, you know, in college. Back then, we weren't getting taught the nuances of CRM. So I picked that up. Fast forward—I asked my dad, "Hey, I need to come home and work for you for a year so I could save enough money to come back in." We loved Minneapolis. We wanted to live there. I was born and raised in Chicago, and he had a roofing company that he always had on the side until he retired from the police department. Then he started doing it full-time. He got it to about half a million dollars in sales.

So I came in, and immediately what I was able to do was install the computer. We got new computers—got the tech. You know, never had QuickBooks before; never had a CRM. We were using old CRMs back in the day. It was called Act or Goldmine—not like you have them nowadays. And really, so those were the three main areas that I made a difference in: was financial organization, tech in order to stay in touch with people, and then the branding.

So my dad had a clip-art logo, and, you know, Avendale Roofing. We did advertisements in the Yellow Pages back then; that was how you got business. But how he really got business was handing out flyers. So here’s a good example—if you could see, you know, I took one. Anytime I see one, can you see that? I pick these up as souvenirs because they still work, and they work so much that I'm looking to do it for my masonry company again in Chicago.

But anyhow, so those three things—putting the fine touches on them and really accelerating the branding—led us to a super path of growth. We grew to six million in about five years—less than five years. It was just a heck of a ride that, you know, will be fun to chat with and all the lessons that I learned from doing that.

Austin Gray: That is incredible. So he’s doing 500K in sales, you come in. You guys have an agreement that you're going to handle—like how did that conversation go? Like you're going to handle what?

Les O'Hara: It was fun because I just rode with him in the car for like a week and just learned the business. I started learning it—climbing on roofs with him, seeing how he met with owners, seeing how he was paying subcontractors. This would be funny for you. The subcontractors, they were really employees at that time. They’d pull up in the back of the house. He’d be on the balcony—lived in a condominium—and he’d throw them down cash, and he’d pay them every day. That's how they got paid—every day, cash! So I’m seeing all this, and I’m like, “Oh my goodness, we got a long way to go here if this is going to be a real business.”

So, yeah, I jumped down— I thought I was just going to help him really organize this, and then I'm scooting out, getting back to the Twin Cities where it's beautiful, the people are nice, and my wife was from North Dakota. We just loved it up there. But it was consuming, you know, fast growth, money starting to come in. I'm thinking, “Wow, I maybe found something that I'm good at.” So 35 years later, I'm still here in the Chicago area doing this kind of business.

Austin Gray: Okay, so you just say that casually, like, “Yeah, we just grew it to six million in sales.” There are a lot of things that need to happen in between 500K and six million. So what are some of the first things you implement immediately?

Les O'Hara: If I had to look back on it and say what were the differentiators, I would say—and this is what I teach a lot of my contractors that I work with—is you need to look like a million dollars before you're earning a million dollars.

So what I was great at was if you were an outside observer when we were doing 500,000 to a million, we looked like we were the biggest player in the area. We had job signs; we had wrapped trucks. You know, this was before the days they were wrapping trucks. We had the biggest trucks. Everyone that worked on the job—subcontractor or not—had a hat, had an Avendale shirt.

And then all of our Yellow Pages and the flyers—all of that marketing went from just text-only to I was so heavy on images because I read, you know, that images sell. So now everyone else, old school, was keeping it text-based. I came in there with ads—you know, here’s a flat roof, here’s a guy shingling, here’s a guy doing a little repair—and I came up with a unique selling proposition. That’s another thing that I think is very important for us entrepreneurs: what is differentiating you from your competitors in the marketplace? Why is someone going to do business with you?

So coming up with those unique selling propositions or a mantra or, you know, that differentiator was key. Ours simply was: we looked like a million bucks, and we had reviews. I just went bonkers on reviews back in the day. They didn’t have Google My Business; it was you filled out an actual survey, handwritten, and we would get all of these. How was the cleanliness? How was this? How was that? And there were, like, I can't remember, but there were eight or ten questions, and we were getting all perfect tens.

Then the customer would sign, and there would be a place, and we had a showroom at that point, so we had this huge conference table. We had a glass made for the top of it, and we put all of these five-star reviews underneath. So anyone that walked into our showroom and saw this whole table of all perfect tens—they were sold already. We did whatever we wanted to sell.

So anyhow, treating the customer always right. That’s what my dad was great at—he’s a great people person. If you're fair, we were going to be fair with you—taking care of the employees and just looking like a million bucks! Those were some of the really key factors that just, you know, took us to great heights.

But with great heights comes great responsibility, right? And that's where I was lacking, and that’s the really important part for your audience to learn my lesson was, okay, all this money's coming in, you're growing really fast—and then all of a sudden you think, okay, this is never going to end—let’s buy that brand new truck, let’s hire this person, let’s start doing our own sheet metal, let’s buy the sheet metal equipment, let’s buy a bigger office, let’s buy this, let’s buy that, let’s hire this person because, you know, one of the owners is tired of doing this!

So you just keep doing that, and at that time, I was not getting mentored at all in the business. It was just me and my dad and what I was trying to learn from Inc. magazine or business books. So that came to a crashing halt when all of a sudden we just started having cash flow problems left and right, and it was like we were robbing Peter to pay Paul—how are we going to make payroll? We got a—you know, this person owes us money, now all of a sudden this large job got hung up, so now that money is in question.

And so your audience needs to know that as you start growing, you consume a lot more cash, and I had to learn the hard way. So that was really difficult times—really shaky trying to navigate that point of our life. But it really helps me now as a seasoned veteran of running these kinds of businesses where it’s easier to run out of money when you're growing and you're having success than it is when you don’t have any jobs.

And that’s one problem—the growing-fast problem is something that really needs to be looked at too.

Austin Gray: So what are some ways you recommend people you work with to mitigate against that cash burn, or that whatever you want to call it? Like, “Hey, I'm making money right now; oh, I can buy this truck for 40 grand; I can buy that piece of equipment for 80 grand.”

Les O'Hara: When we had this time, I finally got smart and I hired a business consultant. He came in and taught me the basics and some of the extra points on cash flow forecasting—how to do it and how important it is. He came from the banking world, so he was teaching me, “Les, this is how you have to look at your cash,” and taught me how to structure it over the next five to 10 years.

I would have CPAs and other consultants trying to dial in this cash flow forecasting system, and it would be really complex. It could be a Microsoft Excel sheet that I paid a guy five grand that was going to pull in all these different numbers from QuickBooks and all that, and at the end of the day, if it’s too complex and you’re not going to use it, it’s not worth it. So over the last—I think it’s been 10 years—I finally dialed in and figured out how to get out of QuickBooks and then put it in a cash flow Google sheet so that every week you document what you brought in on collections, receivables, what you brought in on new deposits because those are two different areas that you need to be tracking.

Then what went out in cost of goods sold? Because in the future, we can formula that. If we know that your labor for jobs is 25%, I could start forecasting 25% of what we collect is going to be paid out in labor materials. And then we do your overhead—what are you paying in fleet-related marketing, advertising, insurance, payroll? And so those are in the red columns; these are your overheads.

So at the end of the week, you see how much you had as an ending cash balance. Now imagine if you saw that for each week, and you saw 12 rows, 12 prior weeks. You can now start seeing some of the formulas or the averages of what you're spending in each of those categories. And so now the sheet, you're able to forecast the next 12 weeks. So always I’m able to see three months in advance of what my cash needs are going to be.

And you know what—good idea for this podcast! I’ll give that out to the audience that they could download it. There's a video I show how to do it. If they have QuickBooks, let them dig in, and if they need help, they can hit me up in the OWNR OPS Slack channel.

But that’s been the game changer. That’s what I coach my almost every client that I coach—they don’t do any cash flow forecasting, so they don’t know if they could add two grand a week to pay-per-click, or can I hire this superintendent to manage all of the projects? You know, you have to plug that in in the next 12 weeks—their salary—and then you could see, do I feel comfortable with that cash burn? It’s going to go down, or should the sales be increasing because I'm doing more marketing? You know, that’s the assumption that you have to make, and then if the assumption isn’t working out week after week after week, you can make cuts because you see, “Hey, we’re going to run out of money six weeks from now.”

Austin Gray: I love this. We're getting tactical immediately, and I can see it in your eyes. You just light up whenever you talk about this because I can tell it must have had a very positive impact once you implemented this into the roofing business. And then I'm sure I can say with confidence that you manage this diligently with Northshore Brick Work.

Les O'Hara: What’s interesting—like I’m looking at my calendar here—so these are my Mondays that I work, you know, predominantly in the businesses. So today I’ll have a cash flow forecast meeting with my chief of staff and my bookkeeper, and we’ll just go over that cash: what came in, what went out, we’ll look at the bills, and we decide who’s going to get paid and what based on the cash flow.

And then I'm done with all of my financial thinking—you know? Now I know, hey, we need to collect 20 grand here in order for this plan to work for this week. So now that’s my marching orders. I got to get on the phone—where’s the money, blah, blah, blah? But after that, I’m basically done; I’m looking at the books and managing money.

Then my bookkeeper later on in the afternoon will look at the short-term rental properties—each one—and same thing: the same cash flow forecast, what came in, what went out, what bills do we have to go down. Now the coaching business, we’ll look at that—what came in, what’s coming out, what do we have to make the decisions?

And so every one of my clients, we need to build that for them so that every week they're looking at their cash flow, they're putting their eyes on it, they're deciding what money they need to bring in or pay out for the week, and then they're done. They’re on to their next activities that they need to do to run the business.

Austin Gray: Man, this is fantastic. You're hearing it from the expert himself on how to manage cash flow in the business. Les, I want to take it from you—you're embedded in the roofing business. Can you tell us, you know, you guys get to six million. What happens after that, and when do you get involved with Northshore Brick Work?

Les O'Hara: So this is where it gets fun, exciting, and, you know, a little bit of tragedy at the same time. Not a little bit of tragedy, but I get bored easy. So here we got the six million, now it’s like I had bought other roofing companies at the time. I would get to know other people in our industry—they would be retiring or failing, and I’d buy them—I’d adopt them in. I’m kind of like, you know, trying to be this sophisticated entrepreneur, but I’m still learning as we go, right?

But I’m buying other kinds of businesses to diversify the risk. I didn’t want—what I realized was roofing is very litigious. You know, we had had fires; we had burned down an apartment complex; we had, you know, a huge building that had computers. We left the roof open; it rained; it ruined all this equipment. Insurance—I was like, man, you can go out of business at any time here.

So I started diversifying into other companies, and one of my subcontractors at the time that did all of our masonry work retired. And he’s like, “Les, I want to sell the business to you; I think this would be perfect for you.” And that was Northshore Brick Work—a little company out of Evanston.

So I had that company; I’m running it. A high school friend started an air duct cleaning business—HVAC restoration. He needed someone to prove the concept; he wanted to franchise it nationally, so he gave me all of Chicago. I’m doing that. I got the roofing business; my hands are, you know, full, but I’m not doing anything really great. So that’s one of the lessons that I realize was you can’t do this all great unless you have really great people around you.

But unfortunately, that was one of the things that was lacking in the early days—was surrounding yourself with great people. But, fast forward to, oh man, there are so many of these fun things to tell you about. But anyhow, I'm going into business with high school friends and, you know, getting them into their own roofing business, and we’re taking on ownership in our other business.

If I had to teach your audience, you know, one of my lessons—and it might not be true for everyone, but I could tell you from my career, and it could be just the way I run—is why it didn't work. But anytime I went into business with friends or family, it has failed miserably because my expectations, their expectations differ.

If you're not a great communicator, if you're not someone that's really going to dial in this agreement ahead of time—if you're loose with, you know, you're just thinking, “Hey, this is going to work out in the end,” it’s blown up in my face so many times, and that’s what it did with the roofing business because at that time, we had my dad, my sister, and me all running the roofing business.

So now we started getting into commercial more, and we're becoming—we're doing bigger and bigger flat roofs. My father and my sister said, “There's no money in the flat roof.” That’s because we have employees there; the residential is where the money is. It’s all subcontractors, and we’re able to turn the money around quicker.

So we’re all having fights every family meeting, Thanksgiving—you're talking about business all the time. So it was just something had to change. So luckily, I came up with the good idea—let's split the company into two: one’s going to be commercial, one’s going to be residential. You two own the residential; I’ll do the commercial, which I was naturally inclined to because it’s very technical—insulation, different kinds of decks, fasteners, our values, you know?

So I’m learning that, and I said let's just have it all under one roof. I’ll do the commercial; you do the residential; we’ll share some of the common expenses. That was great because now I'm my own guy, and I can just call my own shots. I had no partners, no friends, no family, and that’s when I grew a very nice commercial roofing business. My sister and my father, unfortunately, did not have the tools that I was using—a cash flow forecast and managing expenses—they had to file for bankruptcy.

So now—and I had named my company the Avendale Group; my roofing business was called Avendale Roofing. So all of these people were saying, "Hey, I heard you went bankrupt." I’m like, “No, what are you talking about?” I’m like, “Oh no.” So in that whole time, in that whole stress of things, my father passes away. Luckily, he had life insurance; that was the only thing that, you know, kept my mom from owing hundreds of thousands of dollars. So that’s a good tie-in to the insurance.

And then I renamed the company O'Hara's Son Roofing to honor my father that I would have had this if it wasn't for him bringing me back and giving me an opportunity to make a living for me and my family. You know, at that point, we had four boys.

So I took that business, grew it, brought in a general manager, mentored him, and ended up selling him that business. And now that business, he grew it incredibly; it’s a top 20 largest commercial roofing company in the country—O'Hara & Son Roofing. Very proud of that. I have about, you know, 5% of that success story because he just did an incredible job of taking the framework and the branding and building onto that.

So that was a perfect time for me to have a fresh start—get out of roofing. It had already been, like, 20-plus years. And that little masonry company that I had on the side, I decided, “Let’s see how far I could run with this thing.”

Austin Gray: Okay, so you had already bought the masonry company. What do you do tactically immediately after you buy that company?

Les O'Hara: Great question. So let me—let me reverse back five years from when I bought it. So I bought it thinking this is my extra horse. I’m in the horses now after watching the series, 1883. But I’m on my horse, right? Which is the roofing business, and I got this other horse, Northshore Brick Work, and I'm just holding it and I'm taking it along with me. It’s not really doing anything. At the time, I was doing about 300,000 in sales when he sold it to me—350, I think it was.

So I’m just very casually, you know—I put an estimator in there, and it’s running alongside. But then when I sold my roofing business, I took all of that money and I plowed it into a sports training facility. So you, as a former athlete, will enjoy this.

I had four boys; we were driving all around Illinois to go to the best of the best indoor complexes for throwing, speed training, strength training. Nothing in the northwest suburbs here of Illinois. Well, I'm a serial entrepreneur; I say I'm going to build it.

So I went on this quest of going and looking at all of these big warehouses, and you know, I started meeting people in the sports training business and put together the dads and investors and pro athletes and put together a 22,000-square-foot indoor facility—the best of the best: turf, running track, batting cages, basketball court, therapy classrooms, audio-visual.

Austin Gray: 22,000 square feet!

Les O'Hara: Yes! That makes a lot more sense; yeah, yeah, yeah! I wish it only took that—I think everybody would do that!

So it was a whole lot harder to raise that money. That was probably a quarter of a million dollars I had to raise, which that was also now something that I learned that has paid off for me in the real estate syndications that I do, which we might touch on—it's raising money, right?

So I raised the money, and now we’re in business, and we’re going strong. Five years we have a five-year lease, and I cannot figure out how to crack the code on this business. It’s more like a B.A.L. or a Lifetime Fitness. You have to sell memberships; you have to, you know, really bring in the crowds because they’re always turning over. Kids quit sports or you know.

So luckily, I had my horse over here alongside me now with the sports training. So when—we just—we gave up the lease. The good news is three out of my four sons ended up getting football scholarships, so I could say that I did wash itself out. The scholarships—I actually paid for the scholarships. But a very learning experience. What I learned was I really can help elite athletes because I was coaching them. I was a quarterback coach, and I'm helping all these other elite athletes, and then I was mentoring my GM who took the roofing business. I was mentoring my GM for the HVAC restoration company, and I'm all these other business owners that were coming to me for advice.

So I'm realizing I like doing this! I love coaching! I was coaching high school football then, and so I realized maybe there's a business in coaching construction business owners. So then I put out an ad on Facebook and learned how to do that, and then all of a sudden I had clients all across the country that I was mentoring on how I managed my construction businesses. So that was really neat.

I was—that’s my passion! I really love helping an owner like you, you know, solve one problem or two of what I’ve figured out. And if I don't know the answer, someone in my network knows the answer. So anyhow, that's a long way of saying—I don't have any income now again, and I have to make this masonry company pay all the bills for the family. What do I do?

So I go—luckily, I had kept all of my CRM of all of my big roofing clients. That’s the property managers; that’s the facility engineers. So now all I have to do is take those same contacts and now reintroduce them to my new company, Northshore Brick Work. And now it’s just hustling; it’s making sure I look like a million bucks when they got it there.

There would be testimonials; we can do all of these different kinds of services for you: caulking, sealing, brick repair, parging, wall repair. So they just need to know about me and know that, okay, another operator that we had success with roofing can now handle the masonry.

So now, it’s just hand-to-hand combat—take that CRM, okay? Follow up with Peter Conage. Get on the phone! “Peter, this is what I do, okay? Nothing right now—call me in two weeks!"

Put in the CRM. Two weeks later, call this guy up, and then all of a sudden I’m just doing bids, and I'm establishing relationships with subcontractors—that’s the other key that your audience needs to know. I determined I was not going to have any employees this time around. It’s going to be all subcontractors; this is going to be the simplest business. I’m just going to be the branding and marketing company, and then other subcontractors—they need the work, and I'm going to give them the work.

So I started developing these relationships with these subcontractors, and now I would get the lead. Peter Conage would say, “Yeah, go—here's the building that I have; go look at it.” I’d send my subcontractor out; he knew masonry. I didn’t really know masonry; he'd come up with the whole scope of work.

He would be terrible at making it look good; I would have my staff make it really pretty on a proposal—great attachments, great PDFs along with it. And then I would send it out, and I would close the deal. And that's how we started growing that, and that went from probably in the same amount of time—maybe five, six years. We went from that 350,000 to last year, we did 3.5, and the year before, we did actually 4.2. We took a little hit last year, but it does about three and a half million a year, and it pays all of the bills for the family.

But it’s the least stressful of any of my businesses. They call—now we have an estimator; now we have a project manager. At the time, we didn't. Now when you're doing, you know, three and a half million, you need a couple of those people internally. I have a chief of staff; she’s in Idaho—she runs the whole company. My sister from the roofing business, she answers all the calls and gets the estimates scheduled. So these businesses, once you get it dialed in, it’s really—it’s now just rinse and repeat.

Austin Gray: Okay, can we break down the process of—okay, you're at 350. Who do you bring on first? Like, who's your first hire to help take work off of your plate as the owner?

Les O'Hara: That’s the internal person—to answer the phone and to get all of the estimates scheduled. And on those jobs that you get, to get the permits and do proposals—you know, write things up. I call that person your right-hand gal.

So when you’re first starting out a couple hundred thousand, you need a right-hand gal. She could do—I was doing a little bit of the QuickBooks; it wasn’t that hard. But you’re getting to the point where you might need to do some invoicing and entering the bills—whatever you don’t want to be doing as the owner. That right-hand gal could get going, so she starts at maybe 10, 15, or 20 hours a week until she’s at 40, and then she’s maxed out.

And she’s really getting stressed out. Then from there you’re—it’s always you and I were talking about this, I think in your Slack—was how do you replace yourself? Which one? Well for me, I wanted to replace all of the roles. I wanted this to be an investment, not a business that I'm running. This is really the crux of what I teach other owners: if you want to work in the business and have passion, great—we'll build you that business.

But I'm trying to teach you an alternative: how do you build a business that is an asset like a real estate property that you buy? You need to put some property management into it, but it's going to kick off an income for you every year. That’s what I like building—these businesses as an asset, and then you could sell those businesses. They’re very attractive to sell because someone’s not going to look at it and say, “Austin is running the whole show here.” No, if someone looked at Northshore, they say, "Les is easily replaceable; he’s not doing anything!"

Right? It’s actually running on its own. So anyhow, I digress. So you, as the owner, what I did is, okay, production was being managed more or less by the great subs because they were many businesses; they were doing their own jobs.

So all I had to do was tell them, “You’re going to get a bonus if you collect the check when you’re done. If they give a great review, you’re going to get another bonus, and you have to have a job sign Northshore. The guys have to look, you know, job signs, and you're not going to wear your own company stuff."

So I knew the production was going to take care of itself, and more of these residential and easy turns—because if they didn’t get—the customer didn’t pay us, they weren’t going to get paid. So we got the deposit; they got a deposit; when we got paid, they got paid.

So I had production dialed in on that, more or less. So I had to replace myself in actually going out and doing the estimates—the more complex estimates where you needed to shake a hand, and they needed to meet the owner, not just a subcontractor.

So that first person I hired was a salesperson estimator. They would go out; I would teach them how to do it. “Here’s how you ring the doorbell; step back two steps.” You know, “Here are the questions that you're going to ask. Do a complete walk-around; take pictures so that you can package this estimate up where I could put my eyes on it and give you advice if it gets over a certain level.”

But it’s going to fall in this uniformity of how we do an estimate. So once you have that salesperson, now you have sales covered; the subs are doing it; and you have your right-hand gal that’s doing all the finance and admin. Now you can just step on the gas, and that’s what I did.

I was the big contact relationship person; now I was going to go and be a networker, and that’s what every owner really should be doing is doing the networking. That’s how you’re going to make leaps and bounds of growth in revenue.

Austin Gray: That makes sense. How do you—I know a lot of people will have this question. I've had this question presented to me before. If you're leveraging subcontractors, how do you protect yourself against subcontractors not going directly to the customers that you're selling?

Les O'Hara: A couple of things. One is how we do it is we give them our business cards, so they're handing out business cards when the neighbor comes in and says they're interested. They know they have to hand out our Northshore business card, and so it might say, “Jose at Northshore Brick Work,” but that email comes into us—they don’t have that email, so we see what's going on there.

Number two, they really—you know, once you find these two or three or even four trusted subcontractors—they are going to take care of you because you are feeding their family. They are not going to bite the hand that feeds them because they know we spot-check too. And we find out—we find out.

But if you’re that guy that every week you’re getting two, three, or four jobs from Northshore, you’re really in danger of doing your own side job and losing all of that.

And it really doesn’t compute for them, so very rarely have we had that problem. Where you have more of a problem, and I’ll let you know, is when you hire the people—the estimator or the project manager.

Those people are going to take your subcontractors; they’re going to take the clients. And so that’s the other lesson that I learned—was having a non-compete for those people is what you really need to do because those are going to leave you more—a chance than the subcontractors are.

Austin Gray: Interesting. So upfront in your agreement, whenever you hire internally, you have a non-compete. Excuse me, what about your subcontractor agreement? Do you have any sort of language in that that states non-compete style language?

Les O'Hara: No, you can't really do that because then you're flirting with the government saying, “Hey, these really aren't 1099 contractors if you're telling them what they can do or what they can’t do.” So I do have a very tight subcontractor agreement, which is just basically them stating they’re responsible for their own taxes, equipment, employees, and they’re acknowledging that they're their own business.

We’re not telling them where they have to go, what they have to do, and it’s a very detailed, multiple-page document. And then on the end, there’s expectations. So those are more like, hey, when you’re at the homeowner’s house, no smoking; where to park trucks—they're going to do all of that.

It’s another document that, if you can remember, I’ll give that to you for the show notes—that they could download a sample of it: the subcontractor agreement.

Austin Gray: Oh, very cool. That would be awesome—thank you so much for sharing! So just to recap what we’ve talked about: you’re sharing with the audience for everybody listening to talk about cash flow projection or cash flow forecast that you can download in the show notes below, and then a subcontractor agreement template—which that’s great! We really appreciate that.

And I guess for anybody listening, that was something that requires a fair amount of time if you've never done it before. I remember whenever we first started bringing on subcontractors, like in the beginning, some people just don’t even know that you need to have one, right?

One of my mentors challenged me early on, who’s in the trade business, like, “You gotta get a very well-written subcontractor agreement.” So I paid my attorney a fair amount of money to draft that up for me, but Les is sharing that, so thank you very much for that!

I might want you to share yours with me just to triple-check it!

Les O'Hara: Yeah, that’s always great whenever you can just kind of run through multiple peoples because you never know what you might be missing or take the best practices from them.

Okay, so you’ve grown Northshore, you’ve got subcontractors who are fulfilling the work. How do you handle customer relations at this point? Like, if the customer is wondering about the schedule because technically you can’t tell the subcontractor when they can or when they have to show up, right? But if there’s a deadline in place and the customer is worried about the production meeting the schedule, who do they communicate with? Do they give you a call?

Les O'Hara: Yes, they’re going to deal with Northshore. So that’s the infrastructure that we built. There’s now an inside salesperson that is taking calls and scheduling estimates, and then there’s a production coordinator—a project coordinator—they’re getting the permits, they’re getting with the customer scheduling it, confirming that the sub could make it on that date, and then confirming that everything is good the day of. Because, you know, with construction, any kind of inclement weather might delay things.

So eventually when you get to the multi-million dollar mark, you're going to have two inside people—two right-hand gals. One's handling sales; one's handling production.

And they’re probably talking a little bit, but that's what you're going to need.

Austin Gray: Okay, can you talk about the differences in roles for those two people?

Les O'Hara: Yeah, so when anyone calls in, if they're new to the company and they're calling for an estimate, that's going to go into the sales coordination role. They're going to get the details: how they were referred, we’re going to really get dialed in—they're going to enter it into the CRM.

The CRM that we have has a bunch of automations that are going to get triggered. For example, we might get something that says, “Hey, this person has filled out the form on your website."

Well, we still need to get a hold of them, so we'll put them into the pipeline, and automations will start going out. “Hey, thanks for filling out the form! When would you like your estimate? Tell us a little bit more about your project. We’re calling you.” They’re getting on the phone, so that person has a lot of responsibility; that list in the pipeline is growing.

Every day there are leads, and they’re trying to get those leads scheduled. Now when the estimate gets completed, they’re helping the estimator, and sometimes even some of them still might go out and look at a project.

They are packaging the estimate; they’re putting it together really nice; they're adding the photos from CompanyCam; they’re putting the links in there; they’re dressing up the proposal. What I still do to this day is any bid that is over $10,000, I need that hyperlink. I look at it, and that gets sent to me in my company Slack channel, so every day, that’s, like, the first thing that I do.

I open up Northshore Slack under the estimates channel; there might be two or three. I click them; I look at them; I look at the pictures; I look at the margin. I know how busy we are, so I’m like, “Okay, we can afford to just do this job at 20% right now,” or, “Hey, we’ve got a lot of work; I want 35% on this because I don’t like the way it looks or feels.”

So that gets done, and then once I approve it, they send it out. And then they are calling to confirm they received it—any questions—and then they're moving that person in the pipeline to say, “Estimate received.”

And so now they'll get automations every few days: “How's it look? Is there—how can we earn your business?” Now that same person will take that database of people that we have enclosed, and they’re just trying to get some things sold.

And then they’re also digging into our CRM for bigger fish—property management companies, facility engineers, and they’ll go in there and they’ll say, “Hey, it's Jay from Northshore Brick Work. Just seeing if there’s any masonry projects coming up—anything that we can, you know…”

So they’re totally in a sales role—they’re getting more leads and the estimates that we sent try to close the deal.

Production, we have the signed contract, so now that’s adding that invoice for a deposit, checking if we need permits, applying for the permits, checking with the subs, their availability, checking—once we have a backlog report for every job that we have in the system and the dollar amount and the subcontractor is in a Google sheet, they're adding it in there with hyperlinks to go right to the invoice if we need to look at it—how many days that job's going to take.

So we know also how many backlog days we have total for all of the jobs that we have in our system, and that’s really helpful for an owner to know how many days of work do you have.

And then once we have the deposit, then it’s scheduling the day, and then it is getting with the subs, checking with the customer if it’s a multi-day job, confirming that we’re getting paid, the invoice is getting out, and then making sure we get the five-star review and working with our—I’m sorry, one other key element working with our project manager.

So we now have a full-time project manager; she’s able to say, “Hey, you need to go—this customer has a complaint; they don’t like the way this looks. Schedule him out there; he'll go there; he’ll determine what needs to be done; get a sub back; do it ourselves, you know, whatever.”

So that’s how you have production and sales totally worked on their own when you’re getting to two, three, four million.

Austin Gray: So you have a sales role, you have a production role in-house, and then your project manager is separate from your production role—is that correct?

Les O'Hara: Yes! So probably when you’re smaller, that person can be one person, right? It’s just a lot on their plate, but yeah, you’re going to have two people. You’re going to have that inside sales and an outside salesperson—that's your estimator. And in trades like mine—roofing, masonry—they need to have some skills; they need to learn it, right?

It’s not like paving or something like that, maybe where you can just do square footages and you know this is what it is. But so the inside person is going to keep the outside person locked and loaded on doing estimates and optimizing their time.

The inside production person, and then your outside project manager—that’s the beautiful mix right there. Then you have your bookkeeper finance admin, and then what I’ve done is I’ve added a chief of staff. So that chief of staff has me as the owner above, then the chief of staff, and then she communicates with all of those other people—sales, production, finance, admin—so that I don’t have to. I could just work through her, this is what needs to be done, and then she is the communications among the company.

Austin Gray: Okay, and I’m just going to clarify a little bit deeper. So sales has two roles attached to it—inside and outside. Right? Production has two roles attached to it: a project manager and what do you call in-house production manager?

Les O'Hara: Production coordinator.

Austin Gray: And then you have a bookkeeper which manages all your finance admin. Are they contracted or are they in-house employees?

Les O'Hara: Well, it’s going to scale up on different things for you depending on your size of where you’re at, right? So if you're smaller, some of those roles are going to be dual purpose. So your inside salesperson might not have enough time where she could be doing some bookkeeping and A/R, A/P.

When you get to the point, you'll know when it is that you would now—okay, they just need to be dedicated full-time on taking care of estimates, and this person’s full-time on production. Now you need to go to a third party, and that's what I do—we use an outside bookkeeper. She's from California, and she does all of my books, and so that's her full-time job.

But if I just said it was masonry only, that might be only 10 hours a week for her.

Austin Gray: Understood. Okay, we’ve got nine minutes until the top of the hour, and I know you’ve likely got another call or you probably have to jump straight into your cash flow forecasting.

So I want to spend the remainder of the nine minutes here—you’ve built a system that allows you to manage this very well, and this has come from you being in the trenches actually doing the thing.

So can you tell us about—and whichever route you’d like to take it—I’m still unclear on what Contractor Huddle is, but I have heard of Bill 12, and so can you tell us a little bit more about this system you’ve built to manage these pipelines? And just leverage software and technology to help the roles you've hired inside your company manage the day-to-day of the business.

Les O'Hara: Really cool, and thank you for that opportunity to shine a light on the Contractor Huddle because that's really my passion—to help other owners like you and I, you know, have some of these gems that are going to help them, you know, have more time with their families, you know, be able to do what they're passionate about—not just have this one business.

So when I—as I mentioned, when I started this coaching practice that was eight years ago, it became more of—I’m learning what do all of these contractors need? And as I’m coaching them, it would come to these three main areas, right? The one first main area was they didn’t know their numbers; they weren’t knowing when the cash was coming in, and they weren’t working off of a budget.

So the Contractor Huddle is my coaching business that works with a contractor and says, “What are your goals? Where are you trying to take this thing? And then let’s build those three or four pillars and help you grow these pillars so that you can scale.”

So the first pillar of the Contractor Huddle is financial clarity and strategy. So we need to dig into QuickBooks; we need to rearrange the chart of accounts so we know what your gross profit percentage is, we know what your labor percentage is, we know what your marketing percent of income is, we know what your net income is—your take-home pay—we gotta dial that in to make great decisions.

That’s the first pillar. The second, once you get that dialed in, you're going to know, “Okay, what do we now need to know to grow? We need more leads; we need to build the business. How are we going to do that?”

Well, now we take that strategy and that’s where Bill 12 comes in. So one of the things that I’ve mentioned is, how do you stay in front of the customer? How do you not miss opportunities? How do you maximize your sales and opportunities? It’s through a CRM.

So I have personally, along with my son Devin, who—I know you guys are going to hook up on a demo—put together this incredible CRM focused on us trade contractors that helps you send—you know, keep in touch with the client at the right time, and you, as the owner, follow up with the big fish to make sure you can close some of these big deals—a lot of tie-in with LinkedIn—getting your contacts in there. We teach you all of that—so sales and marketing automation; that’s where Bill 12 comes in.

And then lastly, what I would find—I’d be working with you, for example—and we got the numbers dialed in, and we got a marketing plan, but you're working in your business so much—you’re the guy that's doing the estimates, you’re managing the jobs. So all of this other stuff can’t get done; you can’t post the social media; you can’t get on LinkedIn; you can’t enter your accounts receivable; your invoices are two weeks behind; your—the list goes on and on.

So finally, I said this is crazy! I have mastered this about hiring VAs. You know, Chief of Staff in Idaho running my masonry company; I have a Chief of Staff in Ohio running the coaching business.

This is what contractors need, so we came up with the QB VAA—your MVP—who already knows what you need in your business. These are women that were in the business world or teachers that have kids that just need 20 hours a week that would love to come into your business.

And we train them on the QuickBooks, the Bill 12, some of the blocking and tackling that you need, and we put them in your business so that you could take those tasks off, and you can now focus in on the money-making opportunities: the BNI meetings, the meeting other contractors, the growing the business, and not being held back by working in the business.

Austin Gray: Man, I can just hear it in your voice; you're like doing what you are on this Earth to do!

Les O'Hara: Yes, sir!

Austin Gray: It’s awesome! And thank you so much for putting so much time and effort into this over the years. I’m telling you, Les, this resonates with me so much because you and I have similar backgrounds, which you and I have talked about offline before.

You know, I come from a son of a subcontractor—he’s in the concrete business. I grew up working concrete my whole life, and my pops—I have the most respect for him out of anybody on this Earth because he just works his tail off.

He is like one of the only people I know. And like I sort of coined this whole, you know, the Owner Operator Podcast, but like my dad is literally the OG owner operator—like he is the definition of the owner operator! Like, dude does everything! Everything! I can’t even coach all of our sports while he’s doing everything else.

It's amazing! And he is—he has a motor like no one else. But something that’s very—I guess the reason why all this stuff resonates with me is because you have built the system and you come from a similar background, and you figured out a way to leverage other people and systems to manage the business so that you don’t have to go out at 9:00 PM and seal a concrete floor.

And so I just want to say thanks for all the time and effort you’ve put into building these products.

I’m interested to learn more. We've got two minutes here. What else would you like to tell our listeners here?

Les O'Hara: Well, you just resonated with something in me that I want to end with—probably saying this: what your dad did—that is a winning legacy. And that's what I tried to do in my life—was build a business so that I would never miss one of my four boys' games, even practices, and coaching them.

And I know that they'll look back and say, that was worth it more than whatever you build successfully in your business, to you making tons of money, but you weren’t at the kids’ games or you didn’t make them all? That's the barometer for every owner. Are you at every one of your kids’ practices and games, showing that you are? If not, then you don’t have a business that’s working for you, and if you don’t, you know, figure out why and let’s get that solved because that’s the biggest blessing that you can do at the end of the day, leaving that legacy for your kids.

Austin Gray: Well, thanks for sharing that! And I agree 100%. I just had our first little girl, and yeah, that's my goal with entrepreneurship—to be able to control the schedule enough to where I can be at her practice at five o'clock if that’s what she chooses to do with her life.

Thank you so much for being on! I know we’re at the top of the hour here. Where can people find you online and find more information about the Contractor Huddle, Bill 12, QB VAA?

Les O'Hara: So best place to start—I always like saying hey, come join me on LinkedIn, connect with me on LinkedIn at Les O'Hara. That’s a great way of getting the conversation started.

The second way is thecontractorhuddle.com; jump on there—see what we’re doing; that will give you a bunch of links. Then bill12.com—that will be the CRM—all that we’re doing for contractors and getting their sales and marketing automations dialed in.

And yeah, I look forward to helping; I look forward to continuing the conversation. Very proud of you for getting this OWNR OPS Slack channel going—it’s really needed! No one was doing it. Props to you for getting that done, and I look forward to being in there for many years to come!

Austin Gray: Well, thanks! I'm excited about it as well! I mean, it's already been worth it to be able to meet someone like you, meet people like Devin, meet the other owners who are in there.

My motivation for it was legitimately just to build relationships with other people who are in similar, you know, whether it be phases of life or or phases with their business. We all have similar goals, and yeah, the goal of OWNR OPS is just to be a platform where people can help other people grow. And so I'm thankful you're a part of it, and I’m looking forward to many more years.

For those of you listening, if you are enjoying these episodes, would you mind to like, subscribe, comment? If you're listening on YouTube, tell us what you think of the episodes. If you're listening on Apple or Spotify, mind to like, follow?

And we talk about it all the time in service businesses. Les even mentioned it in this podcast, but a five-star review helps us so much with this, and so we would greatly appreciate that.

Once again, thank you for listening, and we appreciate the support so far. This episode is brought to you by OWNR OPS—that's ownrops.com. We're building an online hub specifically for resources for contractors and service business owners, and we would love to see you inside the Slack channel.

So without further ado, we’ll wrap this one up, and we’ll see you in the next episode. Thanks so much!