Kenny Chapman and Chris Crew discuss profitability and why it should be the driving force behind every decision you make in business. They break down the hidden costs that sneak into your operation, why most contractors misunderstand their income statements, and how fixing—not cutting—expenses is the smarter play.
By the end, you'll walk away with a clearer understanding of what it really takes to run a profitable home service business.
- Kenny starts the conversation with a reminder most business owners need to hear: the goal of every business is to make a profit, unless you're a non-profit.
- For Chris, the simplest path to profitability is selling more than you spend.
- In most service businesses, Chris says nearly 50% of your revenue goes into two things: labor and materials. If you can't control these two things, the rest will take care of itself.
- According to Kenny, business, at its core, is a system of relationships. Your success is a reflection of how well you manage your relationships with clients, employees, and vendors.
- Chris shares his thoughts on expenses and explains why you have to know the difference between fixed and variable expenses.
- If you're struggling with revenue, Chris believes you shouldn't just raise prices. That's a lazy fix. Raising prices without a strategic reason is making life harder for your sales team and driving revenue further away.
- Chris explains why compensation plans should incentivize behaviors that drive long-term success.
- Chris and Kenny see this all the time: contractors who never look at their income statements. If you're not regularly reading the financials, you're guessing. And guessing is the most expensive habit in business.
- According to Chris, you can't cut your way to business success. Smart cost-cutting is about eliminating the baggage that isn't driving your ROI.
- For Kenny, there's no such thing as a small business and there's no such thing as a large business. There's only a business and where you are on that journey.
- Chris explains the difference between an investment and a cost in a business. Investments move the business forward, costs drain it.
- One of Chris' most practical tips: categorize your expenses into buckets. When you know what's being spent where, you can start leading by numbers instead of emotions.
- He further breaks down the five key buckets every business should track: marketing, facilities, vehicles, employees, and admin. You don't need to overcomplicate it; just bucket it, track it, and review it often.
- Kenny pushes back against the mindset that profit is a dirty word. Profit is what allows you to take better care of your team, reward excellence, and take some money home.
- Kenny and Chris agree that alignment matters. Success comes when everyone knows the goal is to run a profitable business and everyone is working towards the same objectives.
- Chris warns against cutting costs just because you can't measure their ROI. For example, that billboard you want to take down might be the invisible force keeping your phones ringing.
- Instead of asking what to cut, Chris says, ask what to fix. Look at every expense through one lens: is this helping us make money today or tomorrow? If the answer's no, then you look at cutting.
- Kenny believes the best investment a business can make is in its people. When you pour into them, they pour back into the business—and that's how you become profitable.
- According to Kenny, your business goal shouldn't be about getting bigger, it should be about getting better. And the fastest way to level up your company is by leveling up the people inside it.
- Training isn't a box to check, it's a key part of company growth. The businesses that win in the next five years will be the ones that take training seriously and commit to making their people better.
Mentioned in This Episode:
HomeServiceBusinessSuccessShow.com/s2e11
The Blue Collar Success Group
You Can't Send a Duck to Eagle School: And Other Simple Truths of Leadership by Mac Anderson
