1720 – How to Create Successful Businesses with Leo George William Smith

0:28Hey there, thoughtful listener. million in revenue. Just head to upmyinfluence.com and watch my free class on how to create endless high-ticket sales appointments. You can even chat with me live and I'll see and reply to your messages. Also, don't forget, the thoughtful entrepreneur is always looking for guests. Go to upmyinfluence.com and click on podcast. We'd love to have you.

0:58with us right now management consultant leo smith leo your website is interim ceo for you that's the number four and the letter u leo thank you so much for joining us my pleasure yeah we'll share with us a bit about the work that you do and who you serve okay well uh i mainly served the construction space. Most of my clients are in the construction industry, renovators, custom home builders, you know, that sort of thing. Landscapers even. I started my first business when I was 17, a construction renovation business when I was 17. I developed that to 22 different franchises, sold hundreds of franchises, then creating franchises, basically taking people that know nothing about the construction renovation space and having the system teach them everything they need to know to make them successful.

1:49And really is consulting, management consulting. So when I sold that business, went straight into management consulting, was trained by the largest management consulting firm in the world, was number two in the world, very proud of that, then started putting out my own shingle. Now I have my own clients. Awesome. And who are the clients that you work with today? Today, I'm working with a landscaping company, two young guys, startups, looking to design and build a landscaping company and eventually become custom home builders. While they're getting their custom home builder license, we're starting with landscaping.

2:28I'm also working with Wow One Day Roof, which is hence the name, a roofing company, residential roofing company, opening a commercial division as well. So we work with companies that are in the 500 to 2 million space. And basically what we do is we redesign them, rebrand them so they can get to the 10 and$20 million space. So aside from redesigning and rebranding, what percentage of the overall implementation would you say would fall under kind of redesign, rebranding, or what other significant pieces of the pie would contribute to that growth? Well, when I say rebranding or redesigning. I'm talking about building a custom home.

3:12Let me use an analogy. If you were going to build a custom home, your wife's dream home, the first thing you would do is probably hire an architect, right? Because you wouldn't start by hiring a bunch of guys and giving them shovels and say, build me my dream home, because you would have a mess. Because each one has their own interpretation of what your dream home or what your wife's dream home might be, right? So the architect basically does the blueprint phase to eliminate 99.99 % of the future mistakes you're going to create. The same thing applies with business, right? Most businesses today, and I belong to a lot of Facebook groups, and I've asked this question hundreds of times, Most people start by working with their hands and they figure, okay, I know I'm a good carpenter or I know how to work with concrete.

4:06So I'm going to start a concrete business or I'm good at planting shrubs and bushes and stuff. So I'm going to start a landscaping company. That explains how most small businesses start and they start by working with their hands and they figure, okay, the knowledge that I have in landscaping or the knowledge that I have in painting should be enough to get me a business. Well, if you look at Google statistics, for example, Google says it takes five to 20 years for the average painter to get to$800 ,000. $800 ,000 at 10 % net profit, he's making 80 to 100 grand, right? So he's basically starving.

4:43but yet when you have companies like wow one day painting or sort of pro painted are 100 and 800 million so i mean the money is there but they haven't really figured out the 33 tools and how we came about these 33 tools is in the last 40 years we've been comparing this general contractor with this general contractor this guy does a million this guy does 20 doing the same product doing the same kitchen, same bathroom, same flooring, same painting, same all that, or custom homes. But yet one has figured out the processes or the systems or the tools or the software or the key people to do it. And it's basically like a recipe.

5:26And we call that recipe, the 33 tools. In your work in working with folks within kind of the construction and trades and those industries. Are there any commonalities you see there? And I'd say, you know, compared to maybe other industries, I know that you've served and you own companies in other segments, but I'm just wondering if there's some cultural commonalities that you've seen that are interesting that you know that you have to proactively address or just, we see it all the time that that sort of experience. Actually, I've learned a lot in my training process working for the largest management consulting firm, I was forced to analyze accounting firms, manufacturing firms, firms in travel and tourism, firms in the funeral industry, which gave me the creeps.

6:17Normally, I get the tour of the facility. I don't want the tour. Let's just stay here. But you've been surprised how much we've learned or how much of the systems we created for the funeral industry that we now apply to the construction renovation space. For example, when I was analyzing a chain of funeral homes, and I'm going back at least 35 years, back then, and I kept asking the question of this director, and he was getting frustrated with me. And I said, what is your business? What is it you do? And he gave me his same answer three times and didn't give me the answer that I was looking for.

6:55And he kept saying, well, Leo, we help with the grieving process. We help with the funeral. role. We helped the family go through this negative period. And I said, no, no, no. But what are you as a business? What is you doing? Because he kept talking about his service and I wanted him to talk about his business. And really what I wanted to talk about is how you're controlling your future. How are you creating the need for your product and service? And I knew what his answer was going to be. Well, we can't control the need. And the third time that I asked the question, he got a little frustrated and they said, well, how are you creating that need?

7:30And that's when we started talking about taking that business to the next level. And we started selling pre-need, right? Because we all know that, unfortunately, our mother's going to die. Our father's going to die. People are going to die. But instead of waiting for the moment to happen, we started creating contracts to say, okay, if and when this does happen, we already have the strategy. We already have the funeral, the flowers and the casket and everything that you're going to want. And because you're signing up today, you're signing up at today's prices instead of prices five and 10 years as the prices grow.

8:10Right. So they started accumulating contracts and they started buying other funeral homes. This project was so successful. They started buying other funeral homes. Then eventually word got out and competitors started copying. But they had three to five year advantage that the other people didn't have. The same type of strategy we can use for today's construction renovation space. And if only people knew the advantages and the leverage tools that are available today. Yeah. That most people, I mean, most contractors today are still have the mindset they did 10 and 20 years ago. The world has changed.

8:50Even the last 10 years, everybody now thinks, okay, I got to do pay-per-click. No, you're 10 years old. That's something you should have done 10 years ago when it was profitable. Now, everybody's trying to get on Google pay-per-click or Facebook pay-per-click, and you're just driving up the prices. You're already five years behind. Yeah. So where do we go? Particularly, like, for example, you mentioned pay-per-click advertising. And I think that that begs the question to our listener, what should I be doing? Good question. You start thinking about where is my client going to be in 12 months, right?

9:26Where are they engaging? Because what happens when we try and sell? What happens when you get a phone call, usually at dinner time, right? You switch off, build a China wall between you and the guy trying to sell you, and you start running away. So selling used to work 10, 20 years ago, but selling doesn't work today. Selling has limited results, right? And the question that I usually ask my clients, would you rather have a million dollars in a marketing account or would you rather have a million followers, right? And most people, no, I want a million dollars in the marketing account, right? But a million dollars today will not buy what a million dollars used to buy you 20 years ago.

10:10It just does not. So influence is the new currency. I keep repeating this and you need to get it through your head. Everyone needs to get it through their heads because without influence, you can't persuade. If you can't persuade, you don't have followers. You don't have trust. You don't have a trust foundation. And it's going to be very difficult for you to close. Even if you get people from a Facebook ad campaign, they don't know who you are. They don't know your trust foundation. You haven't built credibility over the last one to five years, right? They don't trust you. They haven't been following you, right?

10:46So today we should be working on clients we need three to five years down the road. And if we're not doing that, we are severely being left behind. Yeah. I love your example. And by the way, dollars for donuts there, 1 million followers or$1 million. I can tell you that acquiring a follower probably going to cost you more than a dollar a piece. If we're talking about like a legitimate someone who knows you and likes you, that sort of thing. You know, it's like kind of like that example, like, you know, a realtor, like if they're just trying to make it big in their local market, you know, once you get to a point where you've got 200 meaningful relationships in your community, it's kind of game set match.

11:26I mean, you can keep expanding on that, but that is a gift that is going to keep on giving as long as you keep showing up in their life in a generous and valuable way. Yeah. May I expand on your point? That's a great point. I have a client who runs a painting company. He uses what we call stepping stone relationships. His stepping stone relationship are real estate agents, right? Each real estate agent, I mean, if they're worth anything, and the average real estate agent makes about$30 ,000 a year, which is kind of pathetic. But if you reach for the top 10 % or even the top 20 % in your city and you build relationships with those people, those real estate agents will know between 1 ,000 and 5 ,000 people, 1 ,000 homeowners.

12:07So if I'm a painting company, which I do own part of a painting company, we use them as stepping stone relationships to getting introductions to the homeowners. So instead of us trying to build relationships with 10 ,000 or 20 ,000 homeowners, we just build relationships with 50 successful real estate agents. And they in turn recommend us when the client needs to move, repaint or whatever. Now, this client does$5 million in just relationships with real estate agents. And he travels to 38 countries a year surfing and playing beach volleyball while the company works for him. This is what we call company on autopilot.

12:46Right. And very few people, when they're designing a business, they think about working with their hands. They don't think about how can I create this business to work for me while I'm at the cottage or sailing or traveling or doing whatever. Nobody thinks that way, which is pretty damn sad. Right. Again, to emphasize that point, if you look at the people at Dragon's Tank, Shark Tank, they own hundreds of businesses. Are they working with their hands? No. These businesses work for them. Right. And flipping, everybody thinks about flipping real estate. No, flip businesses. You'll make a hell of a lot more money.

13:23Wow. Well, and I know that that's something that I think is a part of that you work with some clients who are really interested, scale, scale, scale, and create a sellable business. Would you mind maybe talking about that? And then let's talk specifically about how you engage with your clients and also to our friend that's listening, how they might know that there's an opportunity to engage. Okay. Well, I'm always looking to meet new people. I spend, I shouldn't say spend, I invest a lot of time on social media, TikTok, Facebook group, and so on. So our goal when we engage with a new client is usually to get them to the next level.

14:01We see a lot of burnout. For an example, I was working with 24 year old roofing company that was stuck. They kept hitting the$2 million glass ceiling. When they flew in to meet with me, him and his wife flew in. We had lunch within the first 10 minutes. I could smell the burnout. The way he spoke, his body language, everything. It was burnout. because the reason why the wife wanted to come along is she was sick and tired of every second or third year refinancing the house because the business is not where it should be. And it kept hitting that glass ceiling after 24 years. And the biggest complaint back then was, Leo, I can't find quality people.

14:43Nobody wants to work for me, right? And the funny thing is we think we are great bosses, we are really ugly to our employees. I've sat in trucks. I followed business owners. And when they start yelling at the top of their lungs, you freaking idiot, I've told you this many times. How can you call that culture? Then how can you say after making that statement that my employees love me because I take them to paintball, I buy them donuts every Friday, every once in a while, I bring them coffee. That's not love. No, you're trying to buy loyalty. And most business owners, and I love sometimes we need to hear this, most business owners are horrible to their employees.

15:26And that's why there's a revolving door. And this was the case in this company. So we had to change the culture. We had to rebrand and create proper differentiation, internal training programs and all the other tools that I don't have time to get into. But a long story short, within four months, we tripled their workforce. That's amazing. Just by not doing the negative that we're doing. Okay. Don't do the negative. Don't push your employees away. You know, rule number one. Yeah. Don't be a D to your employees. Yeah. You know, listen, maybe, you know, this is old crotchety, you know, this, you could have gotten away with that maybe in the sixties, seventies and eighties.

16:09Not today. We're well connected. They have too many choices. Right, right, right. Leo, your website is interimCEO4U, the number four, letter U. Talk about for a friend that's been listening to our conversation and maybe they've stumbled upon this episode 12 months after because they're just kind of searching around. We get a lot of listeners that way. By the way, if that's you, thank you for listening. Leo, to that person who is in the research phase right now and they're looking or wondering what their next steps might be in terms of where they can engage and get value in that engagement, what would you recommend?

16:48Find me on TikTok, Leo George William Smith, or on Facebook, Leo George William Smith, still the same name, and engage with me there. Then you'll understand how we create trusted relationships, how we truly help people, because the same strategy you should be using. If you want to find painting clients or landscaping clients or someone that needs bathrooms, and by the way, I have a client who builds$150 ,000 bathrooms when everybody else says that's impossible. That's his average. When you reach for the higher clientele, the people who live in 5 million,$40 million homes, that's the price tag.

17:25And that's your quality of life is going to be better if you serve better quality people or affluent people. So I try to practice what I preach. So follow me on TikTok or send me an email through the website. You know, let's figure out what your problems are, what your challenges are, what your concerns are, and why you're having a hard time getting followers or testimonials or why you're not making a ton of money right now, because you should be in the construction space. You should be making a ton of money right now. And there's really no reason for it because if you're not making a ton of money, It means you're pushing those profitable clients, your competitors.

18:09Why do that? That makes no sense to me. Leo, your website once again is interim CEO for you, Leo Smith, your management consultant. You have a long and storied background. You guys have over a thousand businesses. You and your team have had their hands on to help them to scale. So thank you very much for 40 years. So that's a long time too. I'm 64 years old. Where did the time go? Well, Leo, thank you so much for your time today. I appreciate you. And again, thank you for joining us. Take care.

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