From Grit to Growth: How to Scale Your Construction Biz Without the Chaos

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ℹ ABOUT THIS EPISODE

Every construction contractor hits the same wall—they become the bottleneck. You can build a $2M business on grit, but you can't scale to $10M on caffeine and chaos.

Wade and Stephen kick off a three-part series exploring how to scale your construction company by getting out of your own way. 

Discover the growth stages that trip up contractors and why your business isn't outgrowing the market—it's outgrowing you.

⌚️ Key moments in this episode:

• 00:00 Introduction: The Bottleneck in Construction Businesses
• 00:30 The Chaos of Winning Big Jobs
• 01:46 Setting Goals and Realizing Bottlenecks
• 03:16 The Founder’s Dilemma: Control vs. Growth
• 04:43 The Importance of Delegation
• 08:35 Recognizing and Overcoming Scaling Problems
• 12:39 Conclusion: Identifying the Real Problem

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Find all episodes and related links at ContractorSuccessForum.com.

Join the conversation on our LinkedIn page: https://www.linkedin.com/company/CarpenterCPAs

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Wade Carpenter, CPA, CGMA | CarpenterCPAs.com
Stephen Brown, Bonding Expert | SuretyAnswers.com

Transcript

Wade Carpenter: [00:00:00] Every contractor who starts their own business eventually hits the same wall, and it's not concrete, it's themselves. They are the bottleneck. You can grow a $2 million business on grit. You cannot grow a $10 million business on caffeine and chaos. Today we're exploring getting out of that chaos.

This is the Contractor Success Forum. I'm Wade Carpenter with Carpenter Company CPAs, alongside Stephen Brown with McDaniel Whitley Bonding and Insurance. And this is the first in a three-part series on how to scale a construction company.

Stephen, how many times have you seen a guy win a big job, celebrate, and then immediately realize he doesn't actually have the bandwidth or system to run it?

Stephen Brown: Usually that person's maybe two or three months into the job and for some reason they're not getting payment. They're not paying you. You talk to them on the phone and all of a sudden every excuse under the sun is coming up. Some of them are legitimate, some of them are just poor planning.

But nevertheless, it's that [00:01:00] customer of yours that is having a problem, and you're trying to empathize and understand what's going on, and at the same time they don't see it, and you see it. How you help them get to understanding that you're the problem, you can't do it. It seems like you certainly can't tell somebody.

And I was telling you before the podcast about a relative of mine whose family was telling her that they needed hearing aids. They got in a big fight. I do not. I mean, it couldn't have made them any madder. But nevertheless they are needed. So what do you do? How do you realize that and how do you see that maybe that bottleneck might be you?

Because it's all about opening things up to make it easier and better, not only for you, but for everyone that works for you and everyone that you work with.

Wade Carpenter: Yeah. That's what my thought was going into 2026. I was thinking about what everybody else usually does this time of year. They go and set goals. It's the end of 25, starting 26. Setting goals, resolutions, and making big plans [00:02:00] for you know, 2026. They say they're gonna go to the gym seven days a week, but if it actually lasts until February, you're doing good.

For me I'm walking into tax season, that's my busy time of year, but the realization is most contractors are in their slow season. It could be demoralizing, but we have big plans for this coming year, and how are we gonna move the needle? How are we gonna do something really different this year?

I don't think it happens with more goals. It doesn't have to more resolutions. I think a real plan to scale and that's what this series is about. Contractors always think growth is more jobs, and in reality, growth means more decisions, the owner becomes the choke point. You know, we talk about the cash being the choke point, but a lot of times it does end with the owner too. What are your thoughts?

Stephen Brown: When you brought up year of end planning, your intentions are good, but if those bottlenecks exist, you can't go forward with any of those great plans.

Wade Carpenter: I realize it in my own business. I'm not infallible too. In a recent episode, I used an analogy: you got a half inch garden [00:03:00] hose running a water lineup, you know, a skyscraper running the whole business for water. The whole company flows through the owner just like that garden hose, you're gonna run outta pressure. No matter how good that pump is, that hose determines the flow.

You can't scale a business if everything has to run through the founder's brain first. At some point, you just can't do it. The pressure just dies.

And, for you what's the most ridiculous thing you've ever seen an owner insist on approving personally? I mean, when I first got started I was like, oh, I gotta print my own business cards and things like that. I look back at myself and say, I can't believe I did that.

Stephen Brown: I did that too. It was like step number one, print business cards so you can tell people who you are and what you do that you run into. That's hilarious. I guess we're really dating ourselves now, but it's funny to me just how we exchange information with the younger generation how quickly and easily it's done. I think it's fantastic.

But, when I was thinking about the things that you start doing as a business that I see people doing over and over again, it's [00:04:00] ridiculous, is not letting people do their jobs. So you hire someone to do a job and then you don't let them do their job. That's the thing I see all the time.

Also I see someone just say, through my strong will, I will force this square peg into a round hole of an employee. And then, we've talked before about the outline of those certain owners that if they don't have a problem, they're not happy. And that's a sign that you may be a bottleneck, if that's your mentality. You're so used to the chaos of the construction industry that if it's not going on, you feel like someone's not doing their job. I see that all the time.

Wade Carpenter: Yeah. And I guess before we get too deep into this, I'd like to ask our subscribers, hit that like button so YouTube knows this channel ain't some abandoned job site. If you would subscribe too, it's free, unlike everything else in construction.

To go back to your point, I absolutely agree. There's always things that we think about and there's too [00:05:00] much chaos in the world. Construction owners, they're trying to run with too many things in their brain. The old saying, you're gonna start as a chief cook and bottle washer.

 It's this founder pattern. The founder is still doing payroll at 11:00 PM at night. You're reviewing all the sub invoices in their truck. You're running materials to the job site while trying to estimate and bid jobs in the same day. You're approving every purchase order over 200 bucks. You're the only person who knows how that QuickBooks file is really supposed to work.

Just like a general contractor who insists on swinging that hammer and wiring the lights and grading the dirt, and then they wonder why that building is not going up. There's gotta be a point where a founder stops building the business, and they start getting buried by it.

Stephen Brown: That's a great analogy. Absolutely getting buried by the chaos that you started. The great news about these series of podcasts that we're doing today is that it doesn't have to be that way. We can talk about so many stories about contractors that are that way. And then the ones [00:06:00] that aren't, the best practices that we see.

The healthiest practices, the most normal practice that helps things flow and that in return helps your bottom line, right? In every possible way, no matter how you look at it, what you project and how you run your business is everything.

That expression, Wade, it always comes down from the top. The chaos and obsessive control that comes down from the top just creates chaos below it. And that's just a fact.

Wade Carpenter: Yeah, and that leads perfectly into where I was wanting to go next. The identity trap. A lot of founders cannot let go. I struggle with this too. Fear of loss of control. Nobody's gonna do it like me. Your ego is tied to doing the work. And they end up like, okay-- I still remember the book, The E-Myth Revisited, but, I tried delegating once and then something failed. Never again. I can't trust people. That's what they say.

If you start digging deeper, the fear is okay, what's it gonna cost me? What if they screw something up? What if somebody [00:07:00] actually does something better? What if they don't need me anymore? There's a lot of things that probably go through your head. It's just like teaching a teenager to drive, at some point you gotta get outta the driver's seat if you want them to learn.

Stephen Brown: That's a good point. Gotta get outta the driver's seat if you want to let them learn. There's gonna be maybe some pain involved with your not being in control of things. But look at the payoff down the road. You taught your teenager how to drive. Now you don't have to drive them around anywhere. Now you have done your job toward them becoming a functional adult someday, right? Now, of course, teenagers may not be driving cars five years from now, but nevertheless that's a great analogy.

Wade Carpenter: You may have to worry about the insurance rates and those kind of things, but you're right. If you don't turn them loose, they're never gonna start getting control. And it's what happens in a founder's mind is you got somebody, do you trust them to really do it?

Stephen Brown: You can look at it two ways. You can trust the people that work for you to do their jobs. You can hire them, give them the training, give them the support. If they're not the right person, get someone else. But you have to [00:08:00] trust them to do their job. And you can't manage on fear. You can't just manage on fear.

Just talking about bottlenecks, we could do a whole podcast on that. But I can tell you how many old time contractor customers I've had. You just talk about safety. It's like oh, they're safe, they know they get hurt, I'm gonna kick their ass. Oh, really? Okay. That's a great attitude to have. That whole mentality of managing on fear as well. So anyway, I'm sorry, Wade. I didn't mean to take that off in a wrong direction.

Wade Carpenter: No you didn't. Absolutely.

We started this episode from a couple of episodes back where we were talking about some of the books that talk about the scaling problem. It doesn't matter if you're a hundred thousand dollars or $500,000 revenue hitting the million mark, whatever, but there are some inflection points that we hit according to these books.

But part of this episode is starting to see that maybe there are some things you may need to do differently. And just based on [00:09:00] reviewing some of these books, there's a one to $3 million range where maybe the owner does every single job.

That's basically, duct tape and Red Bull, get the caffeine in there and we can go and get it done. But then, we're trying to get past that part.

There's a three to $5 million bottleneck where basically, every question's gotta hit the owner's phone like they're some kind of oracle. They're the only ones that can make the decision, that bottleneck.

There's a five to $8 million part where we get into this cash chaos. More jobs, bigger jobs, faster billing, but your cash flow is a mess. We talk about that all the time.

There's a eight to $12 million mark, where we get into this leadership gap. And your jobs are really too big for one brain to control.

There's the 12 to 20, where we have no systems and we have built it on tribal knowledge. But tribal knowledge, everything that's in your brain and all that stuff, is not scalable.

So what I want people to realize, and I love your comments here, you know, your business really isn't outgrowing the [00:10:00] market. It's really outgrowing you as the owner. Unless you evolve some of these things, and that's what I think this is about.

Stephen Brown: Right. And you've seen, Wade, customers like I have at the most elemental stage of starting their construction company. A lot of that growth and how the work gets done depends on the personality of you, the owner. And then the work when it's over your name's on it. So of course you've got to control that.

And then we always see the growth stages that happen when more is needed. I see those growth stages all the time. And you're absolutely right. At these inflection points or at these sales levels, it absolutely triggers all sorts of potential chaos that you need to be aware of. And we see that all the time. That's a great point, Wade.

Wade Carpenter: I know this episode really is more like, let's recognize a problem and then we'll do a little more of that next time. Maybe you could think of some other ways this manifests.

If the owner takes a vacation and the business collapses, that's not a vacation problem. That's [00:11:00] a structure problem. That's an underlying problem. And if you can't get away from it, and I'll be the first to admit I've had those problems. I'm a workaholic and I've tried to get away from that over the years. But too many times, the business owner trying to be the martyr.

Actually, almost 20 years ago, I heard one of my employees like, hey, you're trying to be the martyr. It actually sort of woke me up. But, part of the realization is like there is a point where you can't do it all. That's what the point is here. Until you figure out how to get past it, you're never going to get past yourself.

Stephen Brown: Yeah. You can't get past yourself because you don't know how to relax. If you ever knew how to relax, you forgot. Hopefully you grew up like I did in a neighborhood where everybody just played outside and there was absolutely no stress. Other day I talked to a contractor of mine and he was whispering, and I whispered back, are you in the deer stand? And he had his earbuds in. Yes. I'm like, are you [00:12:00] seeing anything? I did a little bit earlier, but no, I'm not right now. And I'm like, what do you need? I said, I need you to turn off your phone and enjoy deer hunting. And I just hung up on him. It just-- it blew my mind, I mean, I got a call back from him. Look. yeah, they're not moving. What do you want? I was like, man, I just want you to enjoy deer hunting.

Everything's gonna be okay. But he didn't know how to relax. That's a sign. I think this is a great topic. I can't wait to flesh it all out. Spoiler alert listeners I've seen the outlines going forward that Wade's presented and I love the direction we're going.

Wade Carpenter: This is really part one of trying to recognize the problem. And it's not about taking a vacation. It's, I mean, yes, spending time with the family and those kind of things. It's just more about like, how do we fix these problems?

 If this got you thinking maybe the problem isn't the crew, if you're thinking, maybe it is me, then you're already ahead of 90% of contractors. So if you would, tap that subscribe, share it with somebody [00:13:00] whose company is one bad week away from some kind of intervention, and next episode we're gonna break down the 10 specific behaviors that keep founders stuck.

And I guarantee you, every contractor will find at least three that they're guilty of. We'll see you then. Thanks.