Profit First For Contractors (ft. Shawn Van Dyke)

Logan Shinholser
Hey, everyone. Welcome back to Contractor Growth Network. This is Logan Shinholser. And today I have an awesome guest that I’ve been wanting to talk to for a long time. I first heard him speak about probably eight or nine months ago one of Tom Reber’s contractor fight webinars. But he is a contractor business coach, author of two best selling books, and international keynote speaker for the construction industry, Shawn Van Dyke. Welcome. How are you today?

Shawn Van Dyke
Hey, Logan, thanks for having me on, man. I’m doing awesome. And I have to preface that international keynote speaker like, I’m getting ready to go to Mexico next month and do a couple of talks for some construction groups down there. And before it was just a national speaker, but now I get to cross the border and say, yay, international. I figured it would probably happen in Canada first. I was like, man, if I could just get one speaking job just across the border, I can say international. So for anybody that’s listening out there and say, oh, international, he’s pretty fancy. It’s not really that fancy. We’re running down to a resort in Mexico and spending a week doing some speaking while I’m down there. So that’s that, man. Thanks for having me on.

Logan Shinholser
Yeah, dude. And by the time this thing comes out, it’ll be international officially. But we did a website for somebody up in Toronto, and I’m now an international marketing agency.

Shawn Van Dyke
I know. I love our northern brothers and sisters up in Canada because they give us so much clout.

Logan Shinholser
Oh, yeah.

Shawn Van Dyke
Yep.

Logan Shinholser
Exactly. So. Well, Shawn, I appreciate you coming on. I first heard you do Tom’s fight night. Tom Reapers fight night back. I guess it was what, last May or June at this point?

Shawn Van Dyke
Yeah, were actually on vacation. I was in Florida, and we had kind of set it up in our condo that were staying at. And I remember that it, to see the back end of that, I had the computer propped up on the end of the bed. I had taken some lamps and lights to try to get, you know, make the video look a little bit better or whatever, but that would have been, yeah, we would have been at the beach, so it had been about, it was definitely in the summertime, so probably June.

Logan Shinholser
Yeah. So I remember watching that, and then I went out, read your book or listened to your book. I’ve listened to profit first by Michalowicz as well. So it was good to hear how you spin it and how you bring your background to it. So I thought that was fantastic. And I was like, you know what? I need to interview this guy. So I’m glad you joined me. And speaking of the background, can you kind of, I’m sure everybody at this point who’s listening to this, they’ve heard of you or they’ve read your book, but can you give us a background into who is Shawn Van Dyke and how’d you get here?

Shawn Van Dyke
Yeah, sure. So way back when, I got a couple of degrees in engineering, in civil engineering, I got my masters in structural engineering, went out and did the engineering thing for a while, and then was realizing that I didn’t know how to build anything. And so I got out of engineering and went to work for a large commercial contractor on large. Like, one of my first projects was a post tension concrete structure. And they wanted me on the project management team because I had my master’s in structural engineering. So can kind of help out with the quality control on something that’s that specifically structurally designed. So loved that it put me out in the field. And for the first time, I really got to see how things actually got built.

Shawn Van Dyke
As an engineer, I could design them and knew how to read the set of plans and all that kind of stuff. But watching all of the trades work together out in the field, I was just, it was like, I was like a kid in the candy store. So, love that. So I did that for a few years. That led me to working for an architecture firm that specialized in real commercial real estate development. Did civil engineering for them for a while. And then I went to work for a real estate developer as a construction manager. And then I traveled mainly the southeast, but kind of all Southeast and Midwest working for a real estate developer building, you know, pretty, the pretty typical retail, commercial retail development.

Shawn Van Dyke
You know, big box stores with developing the out lots, the shops, and, you know, the Walmarts, the home Depots, the Lowe’s, all of that targets all that kind of stuff. This, by this time, we had probably two kids. We have five now, so this is a long time ago, but we have two. We had two kids. And, I mean, I was on the road three days a week because, you know, you got, as the construction manager, you got to go out to wherever the project is. And my wife was like, I’m glad that you’re enjoying your job, but this is not going to work out so well, you know, with two kids at home. So I quit that job and started my first business as a real estate development and construction management business.

Shawn Van Dyke
I’m here in Knoxville, Tennessee, so I spent several years, that was my first business doing construction management and real estate. Development for what I call small mom and pop shops. You know, somebody that had run a business for 20 years and leased a building, and now they wanted to buy their own property and develop their. Not only that build their own building, but then, you know, some extra warehouse space and an office building on the lot. And they thought they had it all together. I was like, no, you’re in the real estate development game. It’s a different sort of thing. So I did that locally around the east Tennessee area, which cut back on my travel a lot, and did that for several years.

Shawn Van Dyke
Then in about 2008, I was on a large project managing, gosh, it was probably a 300 acre site, and the developer had put $27 million into the infrastructure on this large commercial site. And literally one day I was the construction manager for that project, and literally one day they called up and they said, that’s it. We got no money. Banks aren’t going to let. Banks won’t give us any money. And this was right before the residential market, about a year before the residential. What everybody knows is the downturn, it hit the commercial market first. So I was like, oh, boy, I got to go out and do something else now. And so I made a pivot and started a construction company, a residential remodeling company, and did that for a while, for several years.

Shawn Van Dyke
And then one of my subcontractors, my trim and millwork subcontractor, a very good friend of mine, young guy, we started our businesses about the same time. He took me to lunch one day and he said, man, I got some problems. My business is getting ready to blow up. We got all this work coming in. And he had about six guys at the time. He was like, but I can’t run a business. He was like, I just realized I suck at running a business. I’m really good at training carpenters and putting high end work in place, but the business side, I’m really suffering. And I said, yeah, you suck at running a business. Cause he was one of my subcontractors. I was always like, hey, you’re like, he would send me invoices for other contractors. And I’m like, dude, I’m not paying this.

Shawn Van Dyke
Cause this is not me. Like, you gotta get your paperwork in line. Anyway, at that lunch, he asked me a question that kind of changed the trajectory of my career. He said, he goes, would it be unwise of me just hire somebody to come in and run the business? Because I don’t think that I can. I don’t think that I want to run the business. I want to run the guys, I want to run the work. And I said, yeah, people do it all the time. They’re called CEO’s or CFO’s or Coo, you know, whatever. Hire somebody to do the business and they don’t have to know anything about construction if they know the business side of it. And he said, man, that sounds so great. Why don’t you do it?

Shawn Van Dyke
And I was like, oh, I didn’t, you know, I just told the guy that he sucked at business and I agreed with him. And then he was like, but I said, hey, I got my own company. I got my own thing going on. And he was a really good salesman, and he sold me. And he said, listen, your small little remodeling company that you’ve got is going to take 20 years to get to the level of the projects that we’re on. And he was already in high end residential stuff in our area. And I was just like, you know what? This seems interesting. He said, I got six guys. I’m going to need twelve guys in three months. And then from there, we’re going to need even more guys. That’s the pace at what we’re growing.

Shawn Van Dyke
Said, do you want to be a part of that or do you want to stay small? And I thought, son of a gun just called me out, you know? And so I told him, I said, all right, the only way that I’m going to do this is I’m going to run the company. You run the field, I’m going to run the business, and you got to turn it all over to me. And he literally reached into his bag. He pulled out a manila folder with a whole bunch of paperwork and said, here’s the business. He slid it across table and said, you can have it. You do the business stuff. And then I looked at it was absolutely absolute mess. And so I came on as coo chief operating officer for that trim and Millwork company. And it was a whirlwind.

Shawn Van Dyke
But in eight, within 18 months, went from six guys to about 18 to 20 guys, got the business out of debt, got them making money. And that’s when I realized that the systems that I had built from the real estate and construction management business and that I had done in my contracting business were scalable. I didn’t go to business school. I didn’t. I don’t know that I went out and took any course or class. I think just from the, my engineering background, I was always a numbers guy and a systems guy. And I just kind of put. Built things in place that served me. And then when I went to work for the trim and Millwork company, I realized that these systems apply for any business. They’re just good. They’re just good systems.

Shawn Van Dyke
And then as I looked around more, I was like, oh, I didn’t invent any of this stuff. It’s just tracking the numbers and knowing what to do with the numbers and building systems and then pouring into people. So I worked there at the trim and Millwork company as their coo for about four years, and then got a crazy idea to say, hey, I think that I can. What I’ve done for this company, I might be able to take and do for other construction business owners as well. Wrote a book, put it out there, gave it away for free. And that’s kind of what started the whole thing. Jumped on Instagram and started saying, hey, you know, do you have some problems in your construction business? I might be able to help. And then that was. That was a little over three years ago.

Shawn Van Dyke
So that’s. That’s kind of how we got. Got to here.

Logan Shinholser
So, for you to step into a company, you said you’re always a numbers guy and actually get them from six to 18 guys. Are you, like. Have you ever done a disk assessment where you figured out what, like, your personality traits are and what your strengths are?

Shawn Van Dyke
Yeah, I haven’t done disc the ones that I use and that I actually train my clients on using in their hiring process and through their leadership and management programs that we take them through, is I, like, usually start off with Myers Briggs.

Logan Shinholser
Okay.

Shawn Van Dyke
So that’s. You know. But no, the difficult thing about Myers Briggs, if anybody’s familiar with it, you know, is the four letters, and I’m an ENTJ. But it’s hard to remember what those four letters actually mean and all of that kind of stuff. So I also am certified in five. Five voices training, and it’s based on Myers Briggs, so I really like Myers Briggs. Five voices really simplifies Myers Briggs, and especially in a team environment. So I’m a five voices person, but I’ve also certified in a strengths finder. So people that are familiar with Clifton. The Clifton strengths finders, I use that for myself and for the teams and then recently, on a personal level, but it applies to business, too, is enneagram. I think that the enneagram is very insightful for personality types. But.

Shawn Van Dyke
So, to answer your original question, I’m not a disc guy, because I’ve used these other ones that I found so impactful. And at a certain point, you just have to say, okay, I don’t want to go. I don’t need to learn another one. I’m just using what works. So I like five voices, strengths, finders, and the enneagram. But great question. It certainly is so important.

Logan Shinholser
And the reason that I ask is because the more business owners and contractors that I work with, the more I realize that they’re like me, where they’re a high di, which is very energetic. Go, go. And we all suck at the systems, the processes, looking at the numbers, this and that. So I’m curious if you are naturally more on the what they would consider SC side of things in disk, which is empathetic slash analytical, or are you also this go go activator, but you just figured it out early on.

Shawn Van Dyke
Well, I’ll tell you again, I don’t. I don’t know the different letters. One thing that I struggle with being a systems guy and a numbers guy is I have had to work on empathy, making a connection. But because I’ve owned businesses, several different businesses, they’ve gone through ups and downs and have various successes and failures. When you own a business, you have to learn to sell. Somebody’s got to sell. And if you don’t learn how to make an empathetic connection with a person, then you’re not going to. Your sales aren’t going to be where they are. So what I would say is I’ve had to learn how to be empathetic, which means I have to talk less, listen more, and ask more questions, because I’m a systems guy. Give me the numbers. I’ll tell you what’s right.

Shawn Van Dyke
I’m very binary in my thinking, and sometimes that can overrun people. It was very good in my role as cooze. But I’ve realized, looking back now, that I should have learned the skills of an empathetic connection, especially for sales. And once I learned that, then I realized, like, oh, that’s why maybe part of the reason of the success of the business that I have now is it doesn’t come naturally to me. And so your question was like, did you learn that? Did you develop that? Yeah, I think we all have natural ways that we’re programmed, but when we realize that, maybe the role that I’m in. So being a coo, that just hits all my sweet spots, right? But then also in the role of being a leader in a company, too.

Shawn Van Dyke
If you just bombard people with data and systems and logic, and you never ask somebody, hey, man, how’s it going? How’s your family doing today? Like, I know that your oldest kid is, I don’t know, trying out for that volleyball scholarship. Like, you got to ask those questions as a leader in the, you know, in a company, if you want to have a really good culture and you want people to like, be loyal, that was a skill that I had to learn. So whatever. The letters are on high on analytics and history and data, that is my natural tendency. My wife describes it as like, if you’ve seen the movie a beautiful mind, you know, John Nash, you go into the room and there’s all of the lines, and it’s like he understands it. It’s chaos to everybody else.

Shawn Van Dyke
Like, I can sit down in front of a, give me a spreadsheet full of data and I will walk out 12 hours later and find the pattern and the chaos. And that energizes me when I’m having to, you know, lead people in a certain way or work on development or growth. It’s just not my natural tendency. So 5 hours of leadership training sometimes can drain me because it’s just not a natural place that I come from. And so that’s kind of the way I look at it, saying, hey, I know how to do this now.

Shawn Van Dyke
I’ve learned these skills, but I’m aware that this is going to be draining as opposed to like, give me numbers, let me build a system, give me a spreadsheet, 12 hours later, I’ll actually walk out of there with more energy, because that’s just the way that I’m programmed.

Logan Shinholser
So for you then, because I think most business owners, especially, like, at least the ones that I know, we are all, we’re not numbers people. So in your opinion, is it better to try to figure out the numbers, figure out the systems, figure out all that stuff, or do what the guy did that your buddy that approached you and just hire somebody. Hire somebody who not only loves numbers and knows them, but this, like, energizes them.

Shawn Van Dyke
Yeah.

Logan Shinholser
Is there like a balance on that? On which way to go?

Shawn Van Dyke
No, there. I don’t think that there’s a direct answer to that question. I think that. I think the answer is you have to be self aware, meaning, hey, I’m not a numbers guy. I’m not a systems guy, but I need numbers and systems, so I need to dig in and figure it out. And it’s not a place that I’m naturally programmed to, so it’s going to take me longer. I’m going to be more frustrated and I’m probably going to make more mistakes if I’m aware of that. Okay. It’s no problem. Like, the reason that I’m struggling with this is because it doesn’t come from a natural tendency. So don’t beat yourself up. As opposed to somebody that’s like, because, you know, business owners, you can’t do it. You know, we can’t do it all. Yeah.

Shawn Van Dyke
Even if from a numbers perspective and a systems perspective, that’s only one aspect of running the business. So I have to be very aware of the people in my company that might be forward facing. They need to make up for my, you know, for my weaknesses. So I need to hire somebody. Like I have an operations manager. She lives in California. And when we do live events to, yet she’s the one that works the room, not me. She makes sure she is so aware. And my wife also works for me too. She’s my chief of staff. So the combination of these two people together at like a live event, they are connecting with people in the audience and sensing their needs where I’m just like, just here’s the math, do the math. But I’m not even aware that they’re, where they’re struggling.

Shawn Van Dyke
They sense that. How do they do that? I have no idea because it’s just naturally the way that they’re wired. So I think the key to it is just being self aware. If you’re good at systems, if you’re good at numbers, you might be that rare person that’s good at systems and numbers and also connects with people. There’s a gap somewhere else. Wherever that gap is, just be aware when you have to fill that gap. Especially when you’re growing a business and you’re wearing 17 different hats, that thing is going to suck the energy out of you. You’re not doing anything wrong. It’s just, it’s not your natural tendency and it doesn’t energize you. So like my friend that hired me, he was just very aware and came to that realization pretty quickly as a young guy.

Shawn Van Dyke
I mean, at that time he was under 30, he was probably 28. And for someone to say, you know what, I suck at business. It’s not my strength, and I need to release those reigns to somebody else. You’ll get that wherever you want to be. You’ll get there faster if you’re self aware.

Logan Shinholser
So speaking of self aware, in profit for contractors, you talk all about the craftsman cycle and it seems that most people that are in this craftsman cycle have no idea until they finally go, oh crap, I’m in the cycle. So could you touch on first off, what is the craftsman cycle? And second, how can you identify if you’re actually stuck in it right now?

Shawn Van Dyke
Yeah. So that in my book profit first for contractors, we identify what I call the craftsman cycle and what I found in my experience in starting a construction business and what in dealing with clients. And even before I became a business coach, I found myself answering questions from other people in my network that were kind of, I wouldn’t call it a mastermind group. Everybody has their friends that call them up and say, hey, what do you do? How do you price this? Or, you know, do you have a contract for that or do you have a subcontractor that can do this or whatever.

Shawn Van Dyke
So answering those questions, I realized when I stepped back to write the book that there’s this thing called the craftsman cycle and it really, the way that you get sucked into it, there’s two things that lead to it, lack of time and guessing. So there’s four phases of this cycle. And if your listeners haven’t heard about this before, sit down because you’re about to get smacked in the face. Because I’m about to describe probably your life up until this point. Or if you’re out of the craftsman cycle, you will remember these days being like, yep, that was the first seven years of our business. Here are the four phases. It is price work, get work, produce work, find work. So it starts off when most of us have started construction businesses.

Shawn Van Dyke
We were working somewhere else before and we said, hey, I’m going to go work for myself. And let’s say that you were making, I don’t know, $30 an hour and say, now I’m in business for myself and I know that my boss charges my time out at, I don’t know, $50 an hour, $60 an hour, whatever it is. And so you think, oh, I can make some more money. I’ll charge myself out at $50 an hour. And so what happens is you go out and you start getting, you know, you start pricing work and it starts as side jobs or whatever, it starts out small and that’s, there’s nothing wrong with that. This is where everybody starts. But you’re guessing at what your price should be. And for most construction business owners, they start out and they produce great work.

Shawn Van Dyke
So what happens, and I’ll ask you this, what happens when you do really high quality work for a really low.

Logan Shinholser
Price you have to start finding money elsewhere.

Shawn Van Dyke
No, no. What I’m saying is you produce high quality work and you’re not charging a lot for it. You get a lot of work.

Logan Shinholser
Yeah. Okay.

Shawn Van Dyke
So we go out and we price work and then a few weeks later, a few months later we turn around, we’re like, I got all this work. Look at all this money. It’s more money than I’ve ever made or ever had.

Logan Shinholser
And you start, I’m booked out three years.

Shawn Van Dyke
Yeah, I’m booked out a year. Look at this. I just started a bit. What’s everybody complaining about? Like, business is awesome. I know I got to hustle and grind and do all that bull crap, right? But that’s what it is. And woohoo, I’m making money. So starts off with pricing work and you’re probably pricing your work too low. Then what happens is you get all that work and you’re excited. That’s the second phase. You price work based on a guess and you think it’s great. Now you get the work. That’s awesome. Now you’re booked up. Now your time is gone because you’re spending most of your time pricing more work and talking to people and making sales. Now the third phase, now you start producing the work.

Shawn Van Dyke
That’s when your time is eliminated and the money is gone because now you have to start spending money and you realize, I don’t have enough money left to pay for this project. So what do I got to do? I got to go the four cycle. I got to go find work. You have no money. You have no time. And so the most important thing of calculating the numbers and understanding exactly what your costs are and what you should be charging. And when you figure that out, when you figure out what you should be charging, your clients are going to say no because they don’t want to pay your higher price, but it’s the only way to stay in business.

Shawn Van Dyke
So then you make desperate decisions and you go and find work to, you’re really finding work to pay for the end of the current job that you’re on. When you find that work, you go right back into the cycle, you price it and then you get it and then you produce it and then the same thing happens again and again. So that is the craftsman cycle. Price work, get work, produce work, find work. And it’s vicious and it has to do with guessing at your numbers and the elimination of your time. But the way that you break out of that cycle is by saying no more. That what I’m doing now is not producing a profit for me.

Shawn Van Dyke
You probably have to raise your prices, you probably need to delegate some work, hire some other people, get some systems in place and you’ll find that the word no can be one of the most profitable words in your business. Meaning when you figure out, wait a minute, I gotta, I’ve got to raise my prices by 20 or 30% in order to make a profit. That’s just how the math works out. And then you go talk to a client and you price it correctly and they say, no, you’re too high. You say great, not a good fit for us. Get on to somebody else that will pay your price. And that gets into like, you have to learn how to sell. You have to learn how to sell.

Shawn Van Dyke
And that’s a struggle for a lot of construction business owners because they spent years making people happy. The reason, you have to understand the reason that your clients are so happy, they don’t even realize why they’re happy. They’re happy because you do really great work. You work 80 hours a week and you don’t charge nearly enough for the value that you provide. Of course they’re going to be happy. You’re a miserable wreck, but your clients are happy. But then eventually you can’t, it’s not sustainable and everybody out there knows. You start putting off clients, you start delaying projects and you’re chasing money the whole time. You’re scared of someone saying no because you want to make people happy. But when you have the systems and the math behind you and the, it really is a confidence thing.

Shawn Van Dyke
Hey, you don’t want to pay my price, it’s not a problem. We can’t work for you because I can’t go out of business working for you.

Logan Shinholser
So somebody out there that’s listening right now that they go, all right, I’m in this cycle, I realize it now, what is the first step for them? I know you said raise your prices, but like I hear some people go, you know, I raised my prices instead of charging 5000, now I charge 5200. But they’re still in the red on every project. So what would you say is a good first step to actually getting out of the cycle?

Shawn Van Dyke
Yeah, you have to know your numbers.

Logan Shinholser
Okay.

Shawn Van Dyke
Like you have to, you can’t guess anymore because guessing is not going to solve the problem. And when you’ve got the, like I said, when you have the confidence of math behind you, it’s so much easier to walk away to say no or at least make the decisions that you need to make. Listen, you’re on a path. You’re on a race to the bottom. If you’re competing on your price, you got to know your numbers and determine how to sell your value. And I tell my clients this all the time, like, you have to, what got you here is not going to get you to the next level. And if you’ve never made any money, then you got to do something. You have to do something different. So the math is the math. And that’s the great thing about the math of your business.

Shawn Van Dyke
It will never change. Everything else in your business will change. Market conditions, materials, building science, all of these things that outside of your control. But the math of your business will never change. When you can have confidence in that, then that’s what starts breaking you out of the craftsman cycle. But the easiest way, the simplest way to do that, and I talk about this in the book, and in fact, it’s like the first action item that we say in the first chapter is you go set up a bank account, call it profit, and whatever amount of money is in your bank account right now, you take 1% and put it in your profit account. Don’t touch it. You’re not gonna miss it because it’s just 1%. If, you know, if that is $1,000 in your bank account, we’re talking about $10.

Shawn Van Dyke
You’re not, you can, you’ll survive off of $990. If it’s $100,000, we’re talking about $1,000, 1%. It’s so small, you’re not going to miss it. But it starts that habit. You might not know anything about your numbers. You still may be guessing, but you make this small little step, put that money aside, don’t touch it. And it will be there at the end of the quarter, at the end of the year. And for some people listening out there, if they’ll do that one or 2%, don’t touch it. Every check that comes in, just siphon off one or 2% put in that bank account. That’s probably the most profitable you’ve ever been, even at one or 2%.

Logan Shinholser
Do you think that this whole craftsman cycle, this is just the construction industry that falls into this boat? Or do you think there’s other businesses out there that are kind of playing the same game, always trying to, you know, sell more work just to make up for the stuff that they’ve already got in production right now?

Shawn Van Dyke
Yeah, I mean, I think in general, the craftsman cycle is representative of a lot of other entrepreneurial type businesses and other business owners. I’m sure they have their own struggle. I think that the craftsman cycle is unique in our industry in the fact that contractors are expected to work for free. And what I mean by that is when you call up your mechanic, let’s say for example, you call up your mechanic and you say, hey, my car is broken down or it’s having some problems, I don’t know what’s wrong with it. Can you fix it? And they say, yeah, bring it on in the shop, we’ll take a look at it. You drop it off there and the next day the mechanic calls you back and says, by the way Logan, we figured it out.

Shawn Van Dyke
You got a leak in the radiator, one of your belts is slipping. And because we’re such good professionals and we can tell you drive this car pretty hard, we check the brakes, your brakes are shot and you need an oil change. Because we’re professionals, we looked at more than just the problem you said you thought you had. And all of that stuff is going to cost you dollar 800 to fix. You want us to fix it? And you say, you know what, I’ve watched some YouTube videos and thanks for the diagnostic and I got a buddy of mine that’s got some tools and I think if you’ll just give me the information I’ll go buy my own belt. And you know what, I’ll do it myself.

Shawn Van Dyke
And the mechanic will say, sure, no problem, come up, come down here and pick up your piece of crap, right? I mean I can say that but you go down to the shop and before he hands you the keys he’s going to hand you an invoice for $95 for the diagnostic work and you are going to pay it every time and you’ll be happy about it. You’re not going to argue because he provided you with a professional service, but for some reason contractors are supposed to go out to your house, diagnose all of your problems, give you their solutions, write it up into a detailed scope of work, break out their labor and material costs and provide that to you, mister and misses homeowner so that you can make an informed decision about whether or not you’re going to hire them or not.

Shawn Van Dyke
That is unique in the construction industry and no one else has to do that. How do you get professional services?

Logan Shinholser
How did that start, do you think? That was just like 100 years ago. They just started doing like free estimates and free bids and it’s just over time. That’s been like the culture around it.

Shawn Van Dyke
Gosh, that’s a great question. Like, where did the free estimate or where did the free work start?

Logan Shinholser
Yeah, like, the mechanics. I’m sure there was a couple mechanics out there that probably did free, you know, like, would diagnose your car for free, but that didn’t catch on.

Shawn Van Dyke
Yeah, I don’t, that’s a great question. I don’t, I don’t know where it started, but I think that the problem is the word estimate is defining what that is. So, so people say, oh, Shawn, you never give a free estimate. No, I get free estimates all the time. Tell me about your project, and if I’m a professional, then I should be able to tell you what your project costs. Now, if I am a custom home builder and I do, you know, 2 million to $4 million homes, and you’re calling me for a kitchen remodel, I probably, it’s gonna, I’m gonna struggle to give you an estimate, because that’s not specifically the work that we do. Can we remodel your kitchen? But it’s probably not a good fit for us if we do this other kind of work.

Shawn Van Dyke
But I should be able, if I’m a professional, be able to tell you based on what you tell me what things should cost. And there’s something out there that says, you know, you’re supposed to get three bids. Well, you don’t get three bids on, you know, you don’t go into a restaurant and say, you know, give me three different, I’m gonna visit three different restaurants, and I’m gonna decide, no, they got a menu right there with the prices right there. So I’m saying, for contractors, you gotta develop your own menu of prices. I’m not saying you publish it, although that might not be a bad idea, but you gotta be specific in what your niche is. So I think part of the problem with that is, in the name of the business itself, we’re a general contractor. We’re general.

Shawn Van Dyke
We do this, we do that, we do the other thing. We’ll do anything. And it’s very hard to determine your standard pricing when everybody that calls is always asking for something different. And because you’re caught in the craftsman cycle, you’re just pricing work. We gotta keep the money coming in. And so you’re scared to tell someone no. Where it all started? I have no idea. But it’s an epidemic in our industry when, if you look at other businesses like, they don’t do that. Professionals charge for their work. So I want to help. A lot of contractors say, give free estimates, meaning when someone calls you up, say, tell me about your project. What is it? Oh, that in general, because we’re professionals, is usually between 25 and $30,000. That is 100,000 to 200,000.

Shawn Van Dyke
I don’t know what it is, you know, whatever it they describe. But then you got to say, well, what’s your budget?

Logan Shinholser
Sure.

Shawn Van Dyke
Because, like, if you describe a hundred thousand dollar project, but you only have $50,000 to do it, you’re, you’re in a, you’re in a race to lose a lot of money because there is a contractor out there that will say he can do it. He or she can do it for $50,000, but you won’t get the project that you described. So the best thing for you to do is just to tell me what your budget is, and if it truly is $50,000, then I can, because I’m a professional, I can help you plan a $50,000 budget, but you got to make some decisions to eliminate the $100,000 project you described. And so there’s a difference between an estimate and a proposal. An estimate is a guess based on experience. And if you’re not good at guessing, then you need some more experience.

Shawn Van Dyke
But eventually you should be able to say, hey, this is what we do, and I’m confident in our pricing, so I can give you a range. Now, in order for us to do any professional services, come out, prepare a scope of work, take measurements and do the whole process. That’s a professional service, and you pay for it just like you would anybody else, just like the mechanic, just like your doctor.

Logan Shinholser
So do you remove, like, the word estimate from your vocabulary? Like, are you only doing proposals and, like, I guess like consultative fees? Like, like, how do you approach that?

Shawn Van Dyke
No, I would say, hey, when someone calls up, hey, tell me about your project, and then they’re going to tell you about the project. This is all part of the sales process. And then you eventually get to, hey, well, what’s your budget? Well, we don’t, you know, and you’re going to get one of three answers. We don’t have a budget, or they do have a budget and it’s going to be too low. Or they say, well, we don’t really have a budget, and they’re going to say it in a way that is what they’re saying is, well, price really doesn’t matter because we just want somebody that we can trust. So one of those three answers are going to come up. So the one that’s most typical, oh, we don’t really have a budget. Oh, no problem. You just described the project to me.

Shawn Van Dyke
In my professional opinion, your budget should be this. And then you say, are you prepared to spend that? Customers will always say, oh, no, we’re not going to spend that. And that’s why I say, contractors, you got to listen to this. 2 seconds ago, they didn’t have a budget. You gave them a number or a range, and now they say, we’re not going to spend that. Guess what? They just told you what the budget wasn’t. They do have a budget. They’re not lying. They’re just scared. Everybody that calls you up is scared to give you a number. Now, if you have built a reputation and you’ve done the right marketing, you’ve done the right, like pre framing all of that good, you know, that you teach all of that good stuff to warm up a client.

Shawn Van Dyke
Then when you ask the budget question to someone that knows, I’m going to spend 200 grand with this contractor because I’ve seen their work, I’ve heard testimonials about their clients, talking about the experience. I don’t know what the, I don’t know what the number is, but I’m prepared to go through their process and we’re prepared to pay whatever, we’re actually prepared to pay top dollar for this thing because of this person’s reputation. And when they, when people buy from you based on your reputation, you have to understand what they’re buying from you is the marketing. No one buys a product or service. Everybody buys your marketing. It’s just the product or service is the result of proper marketing. So your original question, do I eliminate estimates from my vocabulary? No.

Shawn Van Dyke
When I have the budget question and they say, oh, we don’t have a budget. Okay, here’s what your budget should be. Are you gonna do that? Are you gonna spend that? And they say, no. Then you figure out what the budget is pretty quick, and you say, okay, in order for us to get started, we’re going to come out and do our pre construction process. You need to walk them through that. And we’re going to charge $1,000, $5,000, what, you know, whatever that is for your company, then people are going to say, oh, you’re going to charge me to do an estimate. You go, no, I just gave you an estimate based on what you described, and you said you didn’t want to spend that. So now we’re working on developing the budget.

Shawn Van Dyke
The only way we can develop the budget is for us to provide you with some professional services. And we charge for those professional services. And those professional services are part of the cost of the construction project. But we don’t know what the construction project is yet. So we’re just charging you for the professional services upfront. And if you pay for those and we’re successful and deliver this, then whatever the construction costs are, we will. There’s a couple different ways you can do it, but we’ll credit that money towards the construction costs. That’s how it works. And.

Logan Shinholser
Yeah, yeah. It’s, it’s good because you hear, like, you know what? Like, because I know at the CSA it’s, they talk about, like, consulting, you know, now we’re consulting, but when you talk about, you know, we’re charging for professional services, I think most everybody that’s listening to this podcast, if I ask them, I say, what kind of clientele do you have? They always say middle to upper class. Like, that’s what everybody says out there. So the middle and upper class, they know what professional services is and the connotation behind that, they understand, oh, like this is like a lawyer, CPA, whatever it is. So they automatically will frame that in their mind as, oh, this is just the norm now. So that was cool how you reframed it and restructured it to show them that it’s not just an estimate.

Logan Shinholser
We’re actually, we’re working with you to make this thing happen.

Shawn Van Dyke
Yeah. And I get it. Like, you’ve got listeners out there saying, wow, I’d love to be able to do that, but no way, not in my area. Here’s another thing they’re going to be saying, no contractor around here does that. Whenever I hear that, when someone says, no contractor around here does that perfect opportunity for you to capitalize on differentiation, and you use that, say, you’re going to charge us for an estimate. No, I’m not going to charge you for an estimate. I gave you an estimate. What we charge for is our professional services. Well, no one charges for that. Well, how do you know? Well, we’ve had three other people come out here and they’ve given us numbers and none of them charges for that. And you say, oh, let’s stop it right there. Three people have come out.

Shawn Van Dyke
You’ve described the project to them. They’ve given you numbers. Let me ask you, why haven’t you hired them? The only reason you haven’t hired them is because you don’t trust them. So don’t use a number that’s made up from somebody you don’t trust to try to get a number out of it. I already gave you an estimate. Now, to go forward, let’s work in a professional relationship, and we’ll be able to deliver a wonderful experience. But some people are saying, nope, no contractors do that. Great. It’s a great opportunity for you to be the one contractor that does, and trust me, it will elevate your clientele because you’ll be known for that. Even if customers are like, who the hell do you think you are charging for that? When someone says that, they’re inviting you into a conversation to describe why you’re better.

Shawn Van Dyke
So when someone says, who the hell do you think you are? No one charges for that. Well, thanks for asking. In fact, who do we think we are? Well, we think we’re better, but let me tell you about the process.

Logan Shinholser
Sure.

Shawn Van Dyke
And you’ve got to have a process to walk them through that delivers on the value. But for your listeners out there, I want you to think about yourself in those terms of the CPA, the doctor, the attorney, the CEO, the CFO of those companies, or your ideal clients. You got to see yourself on the same level as them. And so here’s an example that I use a lot, is to say, okay, imagine calling up your doctor and saying, hey, doc, I’m sick. Here’s what I need you to do. I need you to come to my house on Saturday morning before the kids soccer game because it’s convenient for me. I need you to draw my blood. Then I want you to take my blood back to your lab. I want you to run some tests.

Shawn Van Dyke
I want you to figure out what’s wrong with me. I want you to write a prescription. Then I want you to deliver that prescription back to me at a time when it’s convenient for me, let’s say in the evenings, because that’s when I’ll be home. And I want you to present all that information to me and then give me a cost for what it’s going to take to cure my sickness, and then I will decide if I’m going to pay you for that. No, no one does that. They call up their doctor and they say, hey, doc, I’m feeling bad. In fact, you’re not even gonna get to talk to the doctor. You’re gonna talk to the receptionist. And they say, we have an appointment. Available at this time. And you go because you want that problem solved during their open appointment time.

Shawn Van Dyke
That gets into a whole other thing about how contractors can be seen, you know, as professionals. When people say, and I see this, oh, well, we got to go meet with our, the doctor, the lawyer, the whatever, whatever. After hours on weekends and getting into the craftsman cycle. It’s just sucking that time out of you. And you have to understand, like when that, let’s pick on attorneys because they’re fun to pick on. Let’s pick on attorneys. When that attorney, when that attorney’s child has a cavity, what do they do? They take time off of their job. They take time off and they go during the day because that’s when the other professional is open during office hours. Now there are some dentists or some other service providers that if you have an emergency, guess what?

Shawn Van Dyke
You can go get emergency services after hours and you’re going to pay quadruple the price. It’s totally fine because they’re selling convenience and emergency services and contractors have to view themselves at that same level or they’ll never break out of the craftsman cycle. Now some people say, well, Shawn, we got to meet with our homeowners when they’re there. Yeah, sure you do. But most of them are just going to want you to meet with them evenings and weekends. And that’s your family time. That’s your time, too. And you got to realize that they do it for doctor’s appointments. They do it for parent teacher conferences. They even do it for their oil changes. They go on their lunch break or take time off to meet with other professionals. And you’re no different.

Logan Shinholser
I used to do that with the contractors wanting to work together when they would go, yeah, I’m just busy all day. Can you, can you talk after 08:00 tonight? And at first I’m like, you know what? I get it. You know, you’re busy. Understood. Happy to do it. And I never sold a single job to somebody that wanted to meet at that time. So now it’s, I got nine to five. I work outside those hours as well. But if you can’t take a, a half an hour to talk about the future of your company and your life with me.

Shawn Van Dyke
Yep. It’s not that important to you.

Logan Shinholser
Not that important. It’s a, it’s a two on scale of one to ten. So it’s kind of like that with homeowners where, you know, this emergency home addition that has to happen. But they can only meet at 08:00 at night when it’s convenient for them. How much of an emergency is it, really?

Shawn Van Dyke
Yeah, I’m. But I’m willing to go. I’m willing to go after hours or on weekends for the right customer. Not everybody is your right customer. That’s why you got to pre qualify them. But when that person calls up and they, it starts with, hey, how’d you hear about us? When they were referred from another good customer. Right. And that other customer, you took them through that experience, that process where you charge them up front to do the proposal and professional services, they’ve told their friend, hey, this is the process that person calls in and it’s a bigger project than you’ve ever done before. And it’s with the right designer, the right architect, the right neighborhood, it’s the right whatever. It’s that. Guess what? You better believe I will be there. Hell, I’ll bring you dinner. How about that?

Shawn Van Dyke
But I’m going to be very upfront about it, saying, normally we don’t do this without charging for it, but we’re excited to work for you. We want this job. So I’m not going to charge you what I normally charge people because we’re going to give you the first part of this for free, and that is called marketing. I’m going to market to the right customers, but I’m still going to pre frame them with, hey, normally we charge $5,000 for our pre construction services. Tell you what, let’s take you through the first phase of our three part pre construction services. We won’t charge you anything for that because I want to earn your business and I’m going to tell them, this is the right project. This is the right designer.

Shawn Van Dyke
We’ve been trying to get into this neighborhood, and trust me, we are going to blow you away because when we’re done with this, we want to make you our number one salesperson. So let’s just be really clear. Normally we charge for this, we have a process, and at the end of this, we’re going to make you our number one salesperson because we’re going to get testimonials, we’re going to take pictures, and hell, I’m going to even put you on video because that’s going to sell the next job in this neighborhood with this designer doing this thing. That’s how, that’s how you get out of the craftsman cycle.

Logan Shinholser
So for me, and I know we have other stuff to talk about, but we can, we could skip that just because now you’re speaking my language. Yeah, all the video stuff. So you’re very big on video. I do. I mean, we have a lot. We do three videos a week. We have so many other pieces of content. What got you over the hump of putting your face on camera? Because a lot of I have clients that I had to talk one down yesterday from the ledge of just going, look, man, we’ve been talking about doing video for two years now, and you haven’t done anything. And he said, logan, like, what? What gets other clients over the edge?

Logan Shinholser
And I was like, honestly, I just kind of have to, like, put a shoe in their butt and just say, you know, you can either have the pain of being a little bit embarrassed, but only you’re going to be embarrassed, or you’re eventually going to go out of business because everybody else that’s doing video surpass you. So for you, Shawn, you’re big on it. You walk around the airport talking. What got you over that? If there even was some sort of hesitation, what got you over that?

Shawn Van Dyke
Well, you know, this kind of circles back to what we started talking on, because I excel at being apathetic. Not empathetic, but apathetic. I don’t care what people think. I really don’t. And what was a key for me was realizing people, if you are delivering valuable content, something that someone can walk away with and say, huh, maybe that, maybe I can use that. Then when you know, you’re providing value, however you look, however you sound, just goes away because you know that people are getting valuable information from it. And people will act on valuable information now. They’ll act in different ways. They’ll comment, they’ll like, they’ll share, they’ll come back to you, they’ll sign up for your email, they’ll repost, they’ll do, you know, all of these sorts of things.

Shawn Van Dyke
And when you get that, when you realize, like, I think so much, so many people are concerned about how they look, how they sound, and they’re not focused on what does whoever you’re trying to reach, what does that audience want to hear? What’s the most valuable piece of content or valuable piece of information, if you’ll focus on that, know and just trust in that. No one cares what you look like. No one cares what you sound like, if the content is valuable and someone can go and do something with it. And so for me, it was easy because I don’t, I didn’t care. I had this idea. Like, I think I’ve got, I see a gap in the industry.

Shawn Van Dyke
I think I can fill that with some valuable information, and it’s going to require me to turn my cell phone around on myself and do some wacky. Yeah, I wasn’t being wacky for the sake of being wacky, but I thought it was kind of wacky. But then when I realized, like, people need the information, that was all the fuel that I needed. So I got over it. I got over it pretty quickly. Hey, if you’re not comfortable on camera, don’t worry. You do 100 takes. That’s what everybody. That’s what everybody does. But if you’re not comfortable on camera, here’s another thing, too, is no one really cares about you get your clients to say some good stuff, put them on camera. Now, you got to set that up. You pull out a camera.

Shawn Van Dyke
You pull out a cell phone camera and say, hey, can I put you on camera? People scatter, right? They don’t want to. They don’t. So if you prep them for that, saying, hey, by the way, love to swing by when we check on the job. Are you gonna be there? Just wanted to let you know. Would love to get. I’m not gonna put your face on camera or a close up, but I need some video of my customers like you. Cause you guys are awesome. But if I could just get some video of you guys on camera and then let me just turn my cell phone on here and do an audio recording so people can hear your voice. And we’re just gonna have, like you and I are having right now.

Shawn Van Dyke
Let’s just have a conversation about the project, and you just talk to me. Don’t. I’ll be recording it. You know, I mean, there’s laws. You got to make sure, you know, you let people know they’re being recorded or whatever. But video doesn’t always have to be you, right? So it makes sense for my business, because I am providing information, business information to contractors, but as much as I can, and you see this on my content, if people follow that, you’ll see snippets of me in a coaching session with my clients. So you see. Oh, I see people like me. I hear people like me asking questions that I have, and so it makes that connection in a different way. So video is everything, by the way. It’s. It is everything now. I mean, there’s. There’s SEO, there’s all of that other kind of stuff.

Shawn Van Dyke
But video is so easy to consume, and that’s just what I mean. You look at the. You look at TikTok now. I mean, video is getting shorter, and shorter, and it’s just blowing up massively. And so if you’re not on video, you’re missing out. Just get over yourself. No one cares what you look like. No one cares what you sound like, as long as you’re providing valuable content and valuable information. Now, I will say that lighting and sound does matter. Don’t worry about the hyper. There’s. There’s studies that have shown that the shaky cell phone camera video is actually more engaging because our brains know that it’s not highly produced, so we don’t think that we’re being sold to. And I love watching ads on Facebook. I click on them all the time to see how different people are doing it.

Shawn Van Dyke
And you notice that a lot of ads on Facebook that get a really high engagement are the ones that are not professionally done. But if people can’t hear you, that makes a difference. So grab a mic, make sure you’re in a quiet place or it’s not too echoey or whatever. Even if you’re shooting with your cell phone, sound matters. And it sounds weird. Like, especially when I’m, like, walking through the airport and you’ll see it now and do it. I’m like, I wait until I get into a sunny part of the airport so people can see your face, because, again, the sound is usually off on any kind of ad or any video. And to begin with, and it makes a difference if people can see a smiling face and they can see the whites of your eyes.

Shawn Van Dyke
It’s just one of those things, and it’s a little bit more engaging. So that’s my little spiel on video.

Logan Shinholser
But, you know, that’s something that I like. If somebody ever sends me a video, like, client, I’m like, hey, love it. Really appreciate you doing this. Can we do one more without sunglasses? Because there’s a trust factor of the eyes, and that’s why, like, in the NFL, like, you can’t wear visors that are too dark because your eyes tell you where you’re going. There’s a lot that goes into the eyes. So, yeah, cool, man.

Shawn Van Dyke
We’ll show it when you’re like Casey Neistat, you know, and that’s like, yeah, you can do it. Yeah, yeah. After you made $10 million, you know, from a video he has.

Logan Shinholser
And he talks about why he uses sunglasses, too, so he like, and once you get that now, you go, oh, now it makes sense. But I see that all the time where somebody will, and it’s fine with, you know, no glasses, but, like, to look at yourself in the camera, it looks like you got like a double lazy eye going on. So it’s a lot of practice of knowing where exactly to look. So. Yeah. Well, cool, man. Well, to wrap all this up, let me ask you, Shawn, where can the listeners go to connect with you or learn more about everything you got going on because you’re putting out some good vibes in the contracting industry?

Shawn Van Dyke
Yeah. So my website is Shawnvan dyke.com. So that’s s h a w n v a n d y k e. Or you can just search me on Google and I, I better own that first page on Google. But you can go to my website and if you want to get on my email list, you can download my book, the paperwork punch list. It’s totally free. Just go to Shawnvan dyke.com, the paperwork punch list, and I’ll send that book to you for free and then send you some other valuable content, some other information to connect with me. I’m on Instagram at Shawn Van Dyke. And then if you go on my website, then you can subscribe to my YouTube channel and then my book, profit first for contractors. You can get that on Amazon. Just search my name or profit first for contractors.

Shawn Van Dyke
You’ll see Mike McAllitz’s profit first. It’ll pop up there too. And then you can go to profitfirstcontractor.com. Profitfirstcontractor.com. And you can download some free resources as you get into the book, the tables and the figures. And then you can also plug your email address there, what I call the profit first for contractors bonus toolbox. And I will send you a free video training series on just how to get profit first for contractors set up and going in your business. And yeah, just, you know, connect with me on any of the social media channels. I’m on LinkedIn too. So just search, just Google me and you’ll find it.

Logan Shinholser
Yeah, well, cool, guys. We’ll put that in the show notes. Shawn, thank you very much, man. This was awesome.

Shawn Van Dyke
Logan, thank you, man. Anytime you want me back at the. Love to. Come on. This was awesome for sure.

Logan Shinholser
Thank you.

Shawn Van Dyke
Thank you.