“Maximize Your Potential” is a unique and cool talk show that showcases individuals and companies in the community who are making a buzz and giving back. Our goal is to interview guests who are doing great things in their business and in their community. Today, our host, Morgan Allen, spoke with Larry Silver of Contractor Marketing, Inc.
Larry Silver
Owner of Contractor Marketing, Inc
Website Address: contractormarketing.com
Short company description:
Consulting to Construction/M+A Advisor.
What is your “why”? What drives you to do what you do every day?
God’s Glory.
What inspires you to keep growing and learning as a leader?
The example I see in Jesus.
What impact do you hope to leave on your organization or industry?
Simple methods to grow and to exit at the right time.
Who do you admire in the industry and why?
Hard-working folks making thin margins, but persevere to accumulate wealth.
Transcript:
Morgan:
Welcome back to another episode of Maximize Your Potential, where we highlight those who are helping other companies, business owners, and leaders impact and maximize their potential. I’m Morgan Allen, joined today by Larry Silver with Contractor Marketing. Larry, thank you so much for joining today.
Larry:
Morgan, thanks for having me on the show.
Morgan:
So tell me about the great work that you’re doing with Contractor Marketing.
Larry:
Well, Contractor Marketing is 30 years old. I spent about eight years in the construction industry after graduating NYU with a marketing degree. It turned out that I decided to be a consultant and help construction companies grow, primarily commercial building contractors and subcontractors.
So I’ve been doing that for a long time, and I really ended up being primarily a strategic planner. In the last five years, I’ve gotten into mergers and acquisitions, helping these owners exit their businesses at the right time, at the right price, so they can get something for all their blood, sweat, and equity, Morgan.
Morgan:
And that is so important because the building and contracting business is very relationship-based. So it can be challenging for them to have that exit and handoff and get the money that they’re due. So let’s talk more about the strategic growth side of things. What’s your process with that?
Larry:
I have a pretty simple process. What I do is I give a homework assignment to all the employees of a company, and I have them form a strategic management team. It’s usually four to six people, maybe seven at the most.
That team develops basically a list of issues. It could be 50, 70, or 100 issues. And we shortlist that list down to the top three issues. Those issues have to be issues that change the status quo, that make a serious difference. So it’s not really a minor issue.
It could be we’re not marketing and using sales to our advantage. It could be that our human resources need somebody because we’re not taking care of our people the right way, or they don’t know what their expectations are. It could be we’re not very profitable, we’re not keeping an eye on our profits, something serious like that.
But the management team helps me shortlist to the top three. We take those issues to an off-site retreat for two days, and we talk for about two hours on each issue, and then maybe 30 to 60 minutes developing a game plan for each issue.
So that by the time we’re done with the retreat, we have probably a 15-page strategic planning report that explains the whole process that we went through, the key three issues, and it has all the commentary from the retreat, and generally a spreadsheet that says these are the top 10 or 12 things based on the three issues that we’re going to implement moving forward in the next 12 months.
So that’s our basic approach. What’s different about me is I actually help them implement the strategic plan rather than just making a lot of money and saying, see you later, see you next year.
Most companies are not very good, Morgan, at implementing on their own. So a lot of people are good at the strategic plan. I’d say I’m average at that. But what I really am good at is helping them move forward to actually make those changes in the company day to day.
Morgan:
So what does that implementation look like? I mean, I know it’s different amongst different companies depending on their goals, but do you have any examples?
Larry:
I do. Most people would think, well, we have a task force for one of the issues. We have five activities we have to accomplish. Most people would think, let’s meet on a Friday morning before work starts. I’ll have a task force of five people, we’ll work through this issue, and every week we’ll meet.
Most people would think that’s the way to do it, and they will actually fail if they do that. It’s very counterintuitive.
What they want to do is meet and say this: these are the five things I’m going to delegate to each of you. One of these five. And you have a homework assignment between now and next Friday. I want you to work on this, start to develop this, bring other people in the company into it. And every day I want you to work on what’s important for the company.
Then they come back and share the results the next Friday. So the Friday meeting becomes results-oriented. And then again you give another homework assignment.
What you’re teaching your people to do is to work on what’s important during every day of the business rather than treating it like it’s just the meeting. Outside the meeting, I don’t have to work on the business.
So that’s the secret sauce of implementation. And most people are like, I never even thought of that. That is super cool.
Getting your people to realize not just the tyranny of the urgent, putting out fires all day like construction does, but what can we work on that’s really important for the business for 15, 20, or 30 minutes during the day. That’s a game changer, Morgan.
Morgan:
That really is. Thank you for sharing your secret sauce with us. I’m sure that also helps them create this sense of internal responsibility and gives them this feeling of importance in the company as well. So that’s a really cool aspect.
Let’s talk a little bit about the exit strategy, the merger and acquisition aspect of things. I want to hear your perspective on that and how you help them achieve this goal.
Larry:
I’m in my sixth year of mergers and acquisitions, and I’ve come across a lot of construction companies where the owners have trouble exiting. They have trouble knowing when the right time is.
They’re all worried about reducing their taxes, which I understand. But when you’re thinking about selling, you want to maximize your net profits because the value of your company is going to be a multiple of your adjusted net profit.
It’s a fancy term we call adjusted EBITDA. If you can say it, you probably know what it means. But earnings before interest, taxes, depreciation, and amortization. It’s basically your net profit.
So rather than worrying about taxes when you’re getting ready to sell, for a year or two you need to maximize your profits. It’s going to have a major impact on the value of your company.
And if you have a management team in place where the business isn’t dependent on you, the business is much more sellable. The example, Morgan, would be: can I go on vacation for a week and the business run just as well without me?
If the answer is yes and they’re not bugging you every day, you have a successful management team in place. Anyone who buys the company is going to want to know that they’re not dependent on the owner, even though the owner might stay for a year afterward as a consultant just to make sure the relationships have a smooth transition.
So that’s a little bit about M&A, and it’s been very enjoyable. In 2024, I sold three construction companies. Some of them took a while to sell. One of them took over two years to sell.
So from the time you say I want to sell, it’s generally a 12 to 18 month process. It’s not something you can snap your fingers and sell your business overnight. It takes a while.
Morgan:
Yeah, I can imagine. And so viewers, if you’re hearing this and you’re ready to sell your business, grind it out for another two years, really get those profits up, and then call Larry and he’ll help you out.
Larry, thank you so much for joining us today.
Larry:
Thank you, Morgan. Appreciate you having me.
Morgan:
Absolutely. And viewers, thank you for tuning in to another episode of Maximize Your Potential. If you want more information, head on over to DailyNewsNetwork.com. We have it all right there, and we’ll see you in the next episode.
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