One Retired Contractor Teaches Small Business Owners His Secret to Early Retirement
In the 1970s, AL LEVI and his two older brothers went to work with their father in their Long Island, New York contracting business. The brothers and their team of 70 performed plumbing, heating, air conditioning, and electrician services for Long Island outside of Manhattan. They serviced residential, commercial, and industrial accounts for a territory that was 115 miles, tip to tip.
Raised in a family of serial entrepreneurs, AL’s grandfather owned a gas station in 1936. AL’s father started the contracting business that still thrives today. All the time, they also owned dairy stores, liquor stores, and multi-state real estate. From an early age, AL and his older brothers worked alongside their father, sitting in on business meetings and going on service calls. The day AL graduated college with his mechanical engineering degree, he donned his family’s company cap and started making service calls.
The level of responsibility AL’s contracting business required meant that he spent little time with his wife and children. He and his brother, Richie, would be the ones repairing large commercial heating and cooling units at 2 a.m. a hundred miles from home because his own contractors were unable to resolve the service calls. They weren’t trained to the same level as AL and his brother. “I felt like a hostage to my own staff,” he noted. AL was stressed out, but there was one goal that sustained him: retiring before age 50.
AL retired at 48.
He did it by following his own mantra of “less stress and more success.” Today, the fourth generation of the Levi family, AL’s nephew, runs this entire Long Island contractor business.
AL read Michael Gerber’s book The E Myth and that triggered AL to reexamine the way he was running his company. AL completely flipped the script on his operations to realize greater efficiency, productivity, and profitability. First, he took the time while still hard at work – several months – to focus solely on writing down every single process in his business, from how the receptionist answered the phone to how the janitor cleaned their offices to how the contractors handled themselves on service calls. Then he published all of this information in manuals. These manuals trained everyone the same way. Just like Ray Kroc knew when he started McDonald’s restaurants, consistency is the key. “It takes systems to pass a business along. That’s what changed everything for us,” he recalled in his recent interview with RILEY ROWAN on the W. R. MEADOWS podcast.
Another new tactic was how AL LEVI approached hiring. Instead of hiring rockstar-level, highly skilled employees, he hired unskilled applicants who showed the greatest willingness to learn.
As AL wrote his company’s manuals, he identified there were really seven disciplines — or powers — to break down operations sequentially. The 7 Powers:
- Sales Coaching
- Marketing, and
He shared these methods in his bestselling book and consultancy for the trades called The 7-Power Contractor. However, these methods work for any business — building owners, photographers, architects, or freelance graphic designers. Today he consults for companies ranging from $2 million to $100 million in all industries.
How AL LEVI Helped a Montreal Building Owner
AL received a call one day from a condo builder in downtown Montreal. This builder had dipped from $85 million a year in sales down to $35 million. Few business owners can withstand such a seismic financial hit.
AL’s first request was a copy of the client’s org chart. The client sent him several pages. AL warned him, “If you expect me to work with all of these managers and not you personally, this is not going to work.”
When AL finally met the client in his beautiful building, the builder told him, “I have a surprise for you.” He had fired all of those excess employees. He realized his team had been hiding the truth from him. AL replied, “I’m sorry that was the case but I blame you, not them.”
The client’s office was the classic ‘ivory tower experience.’ “I’m a believer in a one-level office,” AL explained. “When you occupy a second floor, you become disconnected from your own business. I moved my client’s desk to the middle of the bottom floor. I made him sign every paycheck. He loved understanding where his money was going. We taught him what to keep in-house, what to outsource, and how to measure the KPIs. But it all started with me redoing his org chart the right way.” AL advised, “The two most important boxes on the org chart are the financial manager and the marketing manager, so you can never totally give those up.”
Another tactic AL teaches is how to prioritize. He asks business owners to create a master project list. From there, he asks them to identify their top five and work solely on those. These top five projects are the ones that will fix the biggest problems impacting profitability. For example, AL’s contracting business was impacted by the non-billable driving time eating into his company’s profits. A good portion of the issue was time wasted with trucks breaking down, so they started leasing and stopped buying. Problem solved.
To hear more about AL LEVI’s advice for contractors and small business owners, check out his podcast interview at https://www.wrmeadows.com/podcast. To learn about AL LEVI’s book and The 7-Power Contractor system, visit https://7powercontractor.com.