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 wayJason 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'sJason 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...