How This CEO's Software is Driving MASSIVE Profits for Contractors
Jason Phillips: [00:00:00] Welcome to the Contractor Freedom Podcast. I'm your host, Jason Phillips. This show exists to help small business owners like you escape the tyranny of Contractor Freedom and enter the bliss of Contractor Freedom so you can have the Time, Money, and Freedom to Live Your Life With Purpose Beyond Your Business.
As a certified human behavior consultant in DISC personality styles and motivators, I'll be sharing with you skills for life, love, leadership, and business. I'll also be connecting you with experts that can help you scale your business and your life. So if you want to build the business and life of your dreams, then you are in the right place.
Let's go.
Jason Phillips: I've got a special treat for you today. I've got with us, Tom Droste, CEO of Estimate Rocket. And Tom coaches company leaders in sales and profit planning. And guess what? Software implementation as well. In case you don't know Estimate Rocket, it's an all in one business management platform. Software for contractors that helps them run their entire business.
They say [00:01:00] from lead to paid all on one platform. So let's jump right into it. Tom, welcome to the show today. How are you doing?
Tom Droste: I'm doing great, Jason. Thanks for
Jason Phillips: absolutely. Me as well. Quick question. How long has Estimate Rocket been a thing?
Tom Droste: Sure. Estimate Rockets, been a thing for about, seven years.
Jason Phillips: So what, you know, did you have a software background or a contracting background? What gave birth?
Tom Droste: Yeah, so I started, in accounting. that was my, that's what I went to school for and did that for Two years and decided this isn't a lot of fun, but I started, , using computers in my accounting career and I said, this is fun and, got spreadsheets, which at the time were brand new phenomenon and, just really got hooked on it.
I went and quit my, great. high paying full benefits job as an accountant and went to work at a computer store, at the time. So that was my, I turned, I found out recently that my father in law thought I was absolutely a lunatic for quitting this great job I had with benefits and everything[00:02:00] going to a computer store. I was at the computer store for about a year and then I started helping people, Do business things with their computers. And I just really got hooked on it. And then that kind of morphed into building applications. and, this is actually my second software company, the first one, did a whole different area of work, but I will say that one of the first things I ever wrote was actually an estimating program for a plumber.
And this was back in the day when, data was stored on these little things called floppy disks. wE're going way, way back. And we complain about now, about how things are slow and, they're Things aren't, you can't, not enough capacity and we're talking days when, it wasn't a meg that you were sending for a photo.
You were lucky if you could send 30k
Jason Phillips: Yeah, you don't know what slow is until you had to deal with the old floppy disks.
Tom Droste: Exactly. When I started, this company, the company is actually called Logical Engine and we were doing, projects basically for people who needed software. And, we got into doing an estimating application actually for, concrete lifting companies. And [00:03:00] that's how we got it.
That was really the start of it. It was super simple, did very little. And as we grew it, we saw the need for a lot more than what we were doing with that application and expanded it to other trades and really just
Jason Phillips: You've been, seven years, is quite a long time for software these days. And, what are just being associated the, the painting industry in particular, what are some positive trends you've seen over the last seven years?
Tom Droste: Yeah. I think one of the biggest ones, There's been a real focus on people and on your team members and building, making the trades a place where you can actually have a real career and a lot of opportunities. And that has, and maybe part of that is, has been the need, because obviously, there's a need out there for contractors, but it's been a really positive trend because I see, companies.
In the contracting area now, talking about things like culture, and I don't think they talked much about that ten years ago or five years ago, even. It [00:04:00] really is a new phenomenon. And, it's actually influenced my company too, because I came up old school and, hey, you go to work, you do your job. Okay, if you like it, that's a bonus, but that's how it is.
And that's not how it is anymore. People really do want to have a sense of, belonging, and they want to have a sense of purpose of where they're going and what the possibilities are. And I see that as an absolutely great trend. I hope it's enough to keep, the trades growing the way
Jason Phillips: I think that's a great insight. If you think about this, if you've got someone who loves the company they work for, and the people they work with, and they're using their skills, for something they feel is worthwhile, they're going to be way more productive. Paying attention to
Tom Droste: Way more
Jason Phillips: not just to have a, a, a soft, fun, hey, let's have some sleeping pods and, vending, free vending machines or whatever all around, but it's win for everybody.
And I like to say, look, we're not really in the painting business or the contracting business. We're all in the people business. Tom, what, on the flip side of that coin. What are some, some negative trends that you've seen over the last seven [00:05:00] years?
Tom Droste: I think things were really pretty positive, I'll say, until COVID hit and I think COVID, really took a lot of steam out of a lot of people in a lot of different areas. In a lot of respects, I think, contractors got to keep going a little more than other companies did.
We were lucky because we were considered,
Jason Phillips: Essential.
Tom Droste: required people and could still do our work. Yeah, essential workers. and, the fact is that most of our company is remote. I have Florida, South Carolina, Utah, Arkansas, and St. Louis right now is our, area where our people are located.
And we meet a lot just like we're meeting now, we're video pictures of
Jason Phillips: that, gosh, that's, that's wonderful. So you don't need a big, huge, office building with, helps keep overhead low, right?
Tom Droste: Yeah,
Jason Phillips: we,
Tom Droste: I probably have an office that's about four times bigger because when we started, the, Logical Engine actually started like 12 years ago, and then Estimate Rocket about seven years old, we thought, oh, we're gonna need a big office. We're gonna need all kinds of people and I still got the big office, but it's
Jason Phillips: we were in a similar [00:06:00] position up until last year. Most of the contractors, contractor freedom is about elevating the lives of contractors. so they can live their life with greater freedom and purpose. And we talk about time, money, and freedom quite a bit.
And one of the ways to freedom the money component. And just about, not everybody, but just about. All the contractors I speak with want to grow their business. And, there's this, there is this, there's these plateaus and there's this somewhat elusive, five million mark.
And I know you like to talk about that as well. And so obviously, on, on the back end of things, you have access to all kinds of data. How many, how many. Contractors, do you think or what percentage actually hit that five million mark?
Tom Droste: it's a pretty small percentage. If I looked at the, at our demographics, maybe 10 percent make that, that and above, and it seems like That is actually, that's one of the big magic numbers, I think, because over that, it seems to accelerate, and I think, there's a lot of things that happen at that size where [00:07:00] you have the revenues to have the amount of people that you need to staff properly, and you're not constantly struggling for, who's going to do what, because everybody's already full up with stuff to do.
But between there, there's a whole bunch of hurdles. There's the 500, 000 hurdle, and there's the 1, 000, 000 hurdle. And then there's the 2, 000, 000 hurdle. And it is really fascinating how things happened in between those hurdles. It's you're. You're knocking yourself out, you hit the hurdle.
Everything's cool for a while, but you're not going anywhere. Then all of a sudden you hustle and you get the next hurdle and it's it's quite a ride, which gets back to, you also have to try to keep, you have to love what you do. And I think you brought that up in terms of your own, even as the leader, you have to be enjoying something about what you're doing or you're not going to be productive.
And I've gone through that, those phases where why am I not getting anything done right now? And it's usually because I'm just not having, and again, we all know fun when we say having fun. It doesn't mean that this is a party. It means that you're enjoying the people you're working with and the things that you're [00:08:00] doing and what you're creating.
And yeah, there's hassles and headaches, but as long as there's enough of the good stuff rolled in there, it really does make it worthwhile. Makes You want to get up in the morning and go do your thing.
Jason Phillips: You know, I just spoke with a contractor the other day. He's at the 500, 000 level and he said Jason this is he said this is the company I prayed for But I can't keep up. He was like I'm in contractor prison I just know in my own experience, and then I see what I've done, I see the old me and the struggles that I went through growth and all of these other guys and guys and gals.
And we have to see things different. We have to think different. And, those, at those different levels if you're doing, under, under a million, you're. Or at least, half a million or less, you're thinking about how to deliver the widget, how to make that widget, right?
What have you seen in, in the contractors that you guys work with the differences in mindset or leadership even?
Tom Droste: Yeah, I think there's two big things that, that stick out. One is delegating, and that's hard at every level as [00:09:00] well. Because, when you think you're a good delegator, you're not yet. And that happens over and over again, right? Where there's certain things you get to that comfort level with delegating, and then you got to build up again to get that, delegation.
And I think And I'm not, I'm a late delegator, not an early delegator, which, it's a handicap. It really, it can slow down your growth and learning to do that. Yeah. And we all do, it's almost impossible to avoid But it does help having. Resources like yourself that people can talk to and share, because a lot of it is story sharing and honest story sharing, not the, just the beautiful stuff, but the hard stuff too that gets people to realize, wow, everybody's been through this, we're all suffering these same things, all experiencing these same things.
This is not unique. This is something we all go through and that,
Jason Phillips: but we, but there's this time when we feel like we're all alone. Now, a lot of, once you get connected. And your eyes are just open. You're like, Oh man, wow. There's other people just like me everywhere. And how that guy or that [00:10:00] gal over there they broke through it. What did they do?
Wow. Something new is possible. It just, it opens, it opens up your mind and to see the way that things structure and, and even, I think no matter what level you're at, there's these glass ceilings. These beliefs I even find in myself,
Drawn to do certain things and I have to remind myself, no, Jason, you need to be delegating this
Because you've got someone else on your team that can do this.
And and sometimes I'm like I'm the only one that can do this. Maybe that other person, can learn, but there's all these little. These little default thoughts that we have, or even you could even say lies that we believe that really are the are, we really truly are the lid.
I firmly believe in John Maxwell's law of the lid. We are the limiting factor, on our business. So how about these guys that are there's a lot of guys at that million dollar revenue, annual revenue right there. And to get to that next hump, which is there's at least one more hump between one and five, at least one, if not [00:11:00] two.
Tom Droste: Oh, for sure. At
Jason Phillips: What things do you think the guys running a successful $1 million operation, what do you think he needs to do to get to that $2.55 million range?
Tom Droste: Needs to make sure, which is the second part of the, comes after delegation or maybe probably before delegation, But it's it's systems. It's standard operating procedures for things. If you don't have them, and that's one of the big barriers to the reason there's no one else that can do it except me is because I haven't told anyone else how to do it.
It's that simple. And those, and I think everybody gets afraid of that, standard operating procedure or systems. Yeah. It's really just outlining a set of steps to accomplish a task. That's all it is. And putting a heading on it so when somebody needs to do something, they go, Oh that's what I'm trying to do.
Jason Phillips: But we overcomplicate it. We think we've gotta write a book and,
Tom Droste: it's true. And it's like you need 20 percent to get 80
Jason Phillips: One of the, one of the most powerful things that I learned on that subject is that a checklist is to help you not forget the most obvious things. It's not to teach you how to do the [00:12:00] job. It's to help you not forget the most obvious things. And that was empowering to me that I could take, most of our processes and just boil them down to one page.
And just start there. That may not be your complete training program, but you can take a guy and say, hey, for instance, look, I know you know how to paint or I know you how to do X, Y, Z. These are the steps, specific steps at our company. Here's how we do it. And now at least, and I think there's, I think there's a benefit to that too.
is that one, you can improve that list, but two, which I think is possibly even more powerful is you have a team of people that are accustomed to following a process. And one of the most difficult things is to take People that have had to figure it out and do it because they're hardworking people.
They want to do the right thing, but they end up what we call freelancing because we don't have a way to do it. So they have to just do their best. But to get those people to change their ingrained habits to follow a process is tremendously difficult. And so what I teach contractors is, guys, [00:13:00] start with something.
If it's five bullet points or check boxes, and if it's terrible, At least you're going to have that new person following a process. And if you add that sixth item, seventh item, they're going to be used to consulting the checklist.
Tom Droste: Yeah, that's
Jason Phillips: I'm, does Estimate Rocket help with some of that?
Tom Droste: Actually, it helps with a lot of it. It helps with the general project and workflow. From beginning into end. And we do actually, probably in the last year, we introduced a to do feature where you can map out your to do list. Now, it's not necessarily a replacement for a process sheet or something that goes in the work order that is that list of, like you said, bullet points.
It doesn't necessarily have to be something you check off. It needs to be something you reference to say, okay, yep, here's what we're about to close out. What do we need to do? Oh yeah, we gotta go make sure we talked to Mrs. Jones. teLl her what we did and when we'll be back or those kinds of things.
Absolutely
Jason Phillips: to do feature? How does, what is it for for instance Hey, I've got to come back to, I've got to go pick up some touch up paint at the store and deliver it to her on Monday. Is it that,
Tom Droste: yep, and [00:14:00] you can notify a part, you can notify your, if you've got someone who orders the materials or the office manager or someone who does that,
stuff, you can notify them in a message and say, hey, I'm going to need this many more materials. And then in the to do, it'll pop if you, as you set up the to do, it'll also pop up on your dashboard that, hey,
Jason Phillips: so that, that's a great feature. One of the things that, that I feel like my, my company has struggled with, and again, just about everybody, let's say you, you quote, wrap up a job and you get that final payment,
Tom Droste: Okay.
Jason Phillips: there's this little hanging detail, for instance, proverbially just talking about the, that cord of touchup paint or whatever it is, and those tiny details are outta sight, outta mind.
And now you take someone who was a huge promoter of your company and you ignore them and you let them down and now they become a dissatisfied detractor telling a story. And we have a term at our company and we say it's the sale final. And what that means is the sale is final when all promises are delivered in both directions.
That means the customer [00:15:00] has paid us every penny they promised and we have delivered every promise to them. So that way if we've got to go back the sale is not final. Yeah, they don't know a penny They already paid but the sale is not final And so I think that's great that you've got a feature in there to help Even the most well intentioned person if you don't have a system to make sure that those things get done You're going to end up with they're not going to get done.
They're just not. Yeah.
Tom Droste: Yeah.
That's why we love the follow ups, the automated follow ups, because there's even an automated follow up for when
Jason Phillips: Yes. Okay. Thinking about the name of the software is estimate rocket. So an outsider is going to think, Oh, this helps me create estimates. But obviously estimate rocket is so much more than that. And again, you're seeing from lead to paid. So definitely, what are the major components of the software?
Tom Droste: sure. So from, incoming lead, inbound lead comes to us. We don't get you the leads, but we've got the facility for tracking it from lead all the way through the project. That'll initiate a campaign to, to get, to schedule an appointment if you haven't [00:16:00] already made an appointment.
It'll track the appointments on the calendar for you, for your sales team, by person,...
