Practicing what I preach

For many years, I have been an avid and vocal advocate for developing systems. I have, on occasion, received considerable criticism for this advocacy. I’ve been told that paint contracting has too many variables to systemize, that markets are different, that I am being simplistic, and much more. I have shrugged off these criticisms, reminding myself of a line Richard Kaller often used, “They don’t know what they don’t know.”

In a certain sense, I can understand the criticisms. The concept of systemization, and everything it implies, is absolutely foreign to many people. So, when they hear me offer systems as the solution to their problems, it can come off as simplistic.

But the truth is, many contractors make the process of owning and operating a business far more complex than it needs to be. Sound business principles are sound business principles, no matter the type of business, the geographic location, or anything else. Planning, knowing your numbers, differentiating your company, learning from successful members of your industry—these principles and more are applicable to every business, including paint contracting.

I have previously mentioned my recent foray into the world of real estate investing. Two years ago, when I first seriously considered doing so, real estate was a mystery to me. I had no idea how to locate properties, how to analyze their financial potential, how to estimate repairs, how to locate and screen tenants, or any of the other aspects of rental housing. In addition, I heard about myriad options and approaches: foreclosures, short sales, hard money, conventional financing, single-family, multi-family, and much more. It seemed extremely complex and potentially overwhelming.

And so, I practiced what I preach. I found mentors. I learned the numbers. I planned. I developed systems.

In the process, two interesting things occurred. First, what was once very complex, confusing, and potentially paralyzing became understandable and manageable. Second, I received confirmation that systems truly work in any business.

Consider this: In the past month we have bought 2 properties. We placed a tenant in a third property. We closed on a cash-out mortgage on a fourth property. When I started, this would have been unimaginable. I would have thought that to do this, I would be working ungodly hours and be stressed to the max. But because I followed my own advice, I have probably invested less than 10 hours a week on these activities.

Interestingly, in educating myself about real estate, I have heard the same advice that I have been preaching for years. Experts in the field, almost without exception, suggest learning from successful investors, developing a plan, learning the numbers, and creating systems. In other words, apply sound business principles.

Admittedly, developing a plan, learning the numbers, and creating systems takes a lot of work. But that is how the complex becomes simple. That is how we identify what is important and what is trivial. That is how we learn to take consistent actions so that we achieve consistent results.

Whether you are reading this on a desktop computer, a laptop, or an I-Phone, the device you are using is extremely complex. The technology involved in writing and transmitting this post to thousands of readers was unimaginable just a few years ago. Yet, even those with few computer skills are able to use and benefit from this sophisticated technology.

You have probably never met Steven Jobs, Michael Dell, or Bill Gates. Yet, you can use their creations successfully. They do not need to micro-manage the manufacture of their products, much less visit each end user and supervise the use of those products. Their products are easy to use because they developed systems.

After 25 years as a painting contractor, I can safely say that their products are far more complicated and more variables are involved than in painting a house. If they can make those sophisticated products user-friendly, you can certainly do the same with your business.

If it sounds too good to be true…

…maybe what you consider to be good or true is skewed. Sometimes things are so good and so true that people just don’t want to accept it. They may be weighed down with skepticism or shackled by fear.

For example, what if I told you that you could buy rental real estate for $150 and generate cash flow of $120 to $150 a month? You would probably think that this sounds too good to be true. You’d be right that it’s good. You’d be wrong that it isn’t true. I’ve done it twice in the past 4 months and I’m going to do it again in March. And what if I told you I’m going to buy another property for $0 and it’s going to generate the same type of cash flow?

My point here is not about real estate. My point is about your mindset, and that applies to any business endeavor, including painting. Indeed, it applies to life.

You’ve probably heard all kinds of claims about real estate, internet marketing, selling vitamins, and countless other businesses. And if you are like me, you probably dismissed most or all of them. Certainly there are people making outrageous claims that could never be true. There are also—on occasion—people who make outrageous claims that are true. The “trick” is to identify which is which.

Outrageous success usually requires outrageous claims. For example, the Wright Brothers made an outrageous claim—they could build an airplane. Henry Ford made an outrageous claim—he would build an automobile that the masses could afford. These men, and countless others like them, made claims that were considered outrageous at one time. But their claims were true and they proved it.

So, the fact that something sounds outrageous or too good to be true is not a valid reason to reject it out of hand. And that brings me to the real point of this email.

Growth, in any form, requires pushing boundaries. It means venturing into unchartered territory, doing something new, challenging the status quo. Physically, our growth from a helpless little baby into an adult happens automatically. But our success in business and in life is not automatic. It is a consequence of the choices we make.

If you want to grow your business you must push boundaries. You must try new things—at a minimum things that are new to you. And sometimes this means embracing ideas that seem outrageous or too good to be true.

As an example, years ago the late Richard Kaller was a prodigious poster on various Internet forums, including those for painting contractors. He challenged conventional thinking and often made claims that seemed outrageous, such as claiming that painting contractors could and should sell their services for $50 an hour or more. He was regularly and routinely chastised, called a snake-oil salesman (and worse), and subjected to all forms of verbal abuse.

On the surface many of his claims were indeed outrageous. But when I looked below the surface, when I looked at the full context and the reasons for his claims, they made sense. Increasing your prices from $30 an hour to $50 an hour is preposterous if nothing else changes. However, if you consider the full context the claim makes perfect sense. If you understand that customers buy value, that to command a higher price you must offer more value, that you must communicate that value and its benefits to the customer, then you can see that $50 (or more) is not outrageous.

I certainly don’t mean to suggest that every claim is valid and warrants protracted consideration. But to reject ideas out-of-hand simply because they are new and challenge our thinking can be very limiting. Sometimes what seems too good to be true just requires a new perspective.

Sometimes you have to break your rules

Developing systems for your painting business is an important part of long-term success. Having specific steps for performing the myriad tasks within a business helps to insure consistent and desirable results. But sometimes, following those steps too rigidly can create problems. Sometimes the rules may need to be broken.

Bill Hogg provides an example. He submitted an article, which was promptly rejected because it did not meet certain guidelines. After considerable explaining on Hogg’s part, the publisher finally relented and published the article.

The publisher had a perfectly valid rule in place. But in this particular instance, that rule was defeating the purpose for which it was implemented. In other words, the rule was not achieving the desired results.

There are times when we must break the rules. Of course, if we do this too often the rules become meaningless. But if we drop the context and follow the rules, no matter the outcome, the rules are equally meaningless. Rules are not intended to be commandments to be followed no matter what. They are established to be applied in a specific context.

When we establish procedures we must do more than just state what we want done. We must explain why we want it done–what results we are seeking. Not only does this provide clarity to the procedure, it also helps us and our employees identify when the rules should be broken.

Using the right tool for the job

If I had a hammer, I’d hammer in the morning. If I had a hammer, I’d hammer in the evening. If I had a hammer, I’d hammer all over this land. I don’t know about you, but thinking about doing all of that hammering makes me a little tired. If I had that much hammering to do, it might make sense to invest in a nail gun.

Don’t get me wrong, I like hammers. In fact I have 6 different hammers, ranging from a 12 ounce claw to a 20 pound sledge. Hammers are great tools. They allow us to drive nails and break things. But sometimes there is a tool that works better than a hammer. Sometimes there is a tool that will get the job done faster and more efficiently.

Unfortunately, many small business owners hammer away all day long and never spend a few moments looking for a better tool. They think that old ball peen they inherited from their father is the only tool that will work.

While that hammer may do the job, it has its limitations. You could use it to break up a concrete slab, but it would be a slow, laborious task. But in a figurative sense, this is precisely what many small business owners do.

Rather than using the available tools to build a better business, they plod along doing things the same way as their predecessors. Rather than take advantage of the technology available today, they use an abacus to do a computer’s job.

The ironic thing is, they are basically using their forehead as a hammer. They are beating their head against the wall and then wonder why they have a head ache. If they’d only pause and reflect on their situation, they might realize that their head can be used as more than a hammer.

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