Successful Recruiting with Danny Kerr
Episode 408: Successful Recruiting with Danny Kerr
Delegating is not an expense. In this episode, Danny Kerr, Cofounder at Breakthrough Academy, joins Mitch as they talk about successful recruiting and the dynamics in delegating out versus operating a one-man show. Danny and Mitch discuss the importance of decluttering your plate and how it can do wonders for growing your business. Aside from a potential burnout, learn how you can focus your precious time and energy on key elements of your business and leave your day to day tasks. Get your money’s worth for each role you bring in by reverse-engineering the entire recruiting process. Danny shares some tips on acquiring overhead and the fundamentals you need to look at when finding someone to help you manage your company.
Watch the episode here:
I’m here with Danny Kerr and we’re going to be talking about how to recruit people so you don’t have to work hard, you can get more done and be more profitable. Before we start, I would like to pay homage to my sponsor, TaxFreeFuture.com. If you don’t have a tax-deferred or tax-free retirement account in which to grow your retirement fund for your finances, you are missing a huge tool in your toolbelt. Please go to TaxFreeFuture.com where you learn about self-directed IRAs, 401(k)s, health savings accounts, educational accounts, all kinds of tools so that you can get ahead and grow your finances tax-deferred of tax-free. Danny, how are you doing?
I am good. Thanks for having me.
You were specialized in stepping into businesses and help them see the forest despite the trees, to get in there and figure out where the sticking points are or where the bottleneck is, and help people be able to improve the flow of their business and their business processes.
It is our world. We do it every day.
You even helped one of my students, Ben Grice, over in Indiana. He signed on shortly after our conversation got posted. How did that go?
It went well. When we first met with him, he had a small team and he was trying to figure out, “How do I step away from doing a lot of this myself and delegate down to an organization of people?” He’s quite out of the day–to–day now. I’m sitting down with them, it’s night and day. He’s got a real business under his hands now versus him in flipping homes. He’s still with us and working on the next level.
Ben came on and he was a one–man show and was doing some wholesaling and flipping, which is an endless rinse and repeat job. You got him turned on to some ways to generate some cashflow. He’s a real success story. A young guy, sharp, asked a lot of questions, implementer and he’s come a million miles in the last many years.
There’s a lot of people that will listen to what you say, and there were very few that do it.People are not a cost to the business, they're often the biggest asset to the entire organization. Click To Tweet
Let’s have a conversation about, this business seems to be notorious for one–man show or a one–man entrepreneur shops where they’re out flipping or wholesaling. People don’t get it for a while. I didn’t get it for way too long that the money’s only in a couple of key things that you do well and everything else should probably be delegated out. You think that that’s an expense, but it’s not an expense. Explain that dynamic.
One of the first things I talk to people about and get them to think about is, “What are all the things you do in a week? Circle the stuff that’s the highest time consumption and lowest skill. What are those things?” There’s usually a pattern. Whether that’s administrative stuff, managing some of the projects, or sales–driven stuff. I was looking at that and saying, “That is probably the next most ideal role for your organization, with the lowest hanging fruit with the biggest ROI.” If you look at what an owner’s worth in their business, when they first start, they got to be the center of everything. They got to grind it out and figure it out. After a while, it gets to a point where they’re doing a lot of tasks that could probably be hired out for $15 or $20 or $30 an hour job.
When they look at how much they’re making, I’m like, “That’s costing you money to go out there and do a lot of those things.” It’s having people realize and see that people are not a cost of business. They’re an asset. Often, they’re the biggest asset to the entire organization. You can’t build everything yourself. You’ll get exhausted. I’ve done this before. I remember when I first started a painting company when I was eighteen years old, I was working 80 hours a week and had a small crew of painters. It’s not that I had zero employees, but I was trying to manage the sales, the production, the financials, get everything under my wing and I burnt out. I couldn’t do it anymore. There was no more me to give.
I slowly realized, “If I put in a project manager who is pure overhead, what can I do?” I went and doubled my sales. All of a sudden, that project manager, as much as they may not deliver the ROI to the company directly by booking more work, it gave me the freedom to be able to go do that. Even Breakthrough Academy, the company we have now, the first person we ever hired is Kaitlyn Kaufmann. She’s still with us to this day and she did administration for me. I realized like, “I’m very good at getting out there and speaking and doing my thing, but I suck at administration. Why am I spending all my time doing it when I can get someone else who loves to do it, who’s better at it than me anyway and free me up to do what I’m great at?”
I thought when I wanted to walk away from my business, I was going to take a million-dollars’ worth of income. I’m pulling a random number out of the air right here. It’s a little bit more than that, but million–dollars of profit a year, and I was going to give up $500,000 of it, so that I could at least keep $500,000 myself and not walk away and get zero. I was willing to pay these people good, not to walk away from business and zero out at the end of the day. I was willing to give up half of what I was making. It turns out, I made more than I made before I made when I was the one–man show and hiring these people and acquiring this overhead.
I made myself more that year than I did and every year after that because I figured it out. I was better than all of those people in that chair. If they were a salesman, I was a better salesman than them. I knew my product better. I was more enthusiastic about my product. I had a bigger why than them, but I wasn’t as good as them because I had to do everything else. There’s only this little sliver of me that could go to sales. All they had to do was one thing, the sales. They were much better at it than me, given the circumstances and that happened in every chair.
Finally, like in your example, I got freed up and I thought, “Where’s the best use of my time?” My best use was to find the private money to fund it because my partner was handling the acquisitions in the salespeople. There was nothing for me to do. I went and started acquiring private money and pushing the limits at what terms people would loan me, how long and how little interest rate. I started pushing. I have $26 million out on the street and a very favorable fifteen-year wrappable mortgages because I sell my houses on wraparound notes. I carry the financing. I was the worst in hiring person in the world. I would hire people and they would be horrible. What are you looking for in a person when you go to hire them? What are the indicators that they’re going to be productive and be what you’re looking for?
There are ten that I learned with that matter. It’s funny that only 1 out of those 10 has to do with their skill or their experience. A lot of it had to do with things like attainment, their preference to set and hit goals, which is huge for salespeople. Anyone managing parts of your business, they need to be able to handle stress in pursuit of a goal. That’s the biggest one I’ve seen in people. They will watch somebody manage a company with you and suddenly shit hits the fan and they’re MIA. That’s fundamental and you’re like, “Why did I even hire you? I’m babysitting you. Now you don’t even show up when I need you.” That’s a big one for anyone helping you manage the company.
Leadership’s a pretty obvious one. You’re going to have people leading others. Introspection is huge, especially if you’re hiring people with lower skills and you need to build into them over time. They have to be able to objectively view themselves and how they take feedback. There are a few more of them, but we often, as a company, teach our people not to focus in on what skills people have. Much more important is what personality, preferences, and styles does this person live by because you can’t change those. Those are baked into who they are. Of the right personality makeup, you can train the right person in anything you need to do or anything that they would need to do. Ultimately, we look a lot more at that generally.
To do that properly, you need to make sure that you’re right from the get–go and know roughly who you’re looking for. You need to reverse engineer the entire recruiting process to find that person. It’s funny and I’m very similar to a sales process. These are the perfect customers and people I love to work with where you want to think about like, “Where do those people hang out? What do those people care about? What are those people thinking about? What would draw those people in? Very similar to recruitment, you need to build a sales and marketing process to do that. The only problem is most people don’t because they’re focused on sales and they’re saying to themselves, “Sales is the number one thing that’ll drive my business.” That’s true to a point, but that changes as you grow to the next level and it’s all about developing people. That becomes the core element. The skill of that will drive the business. It’s the ten attributes or personality.
You had the fundamentals of leadership introspection. Can you give us a few more of those?
Another big one is tenacity. Having people that enjoy hard work and challenge of pushing themselves and working out their day–to–day and putting in long hours, they are the ones who are problem–solving. We’ve all had those people who you hire and they call you for every dumb little thing that could ever happen on a job site or on a sales call. You need people who are dynamic in their thinking. That mitigates a lot of the babysitting. Office people need to be high in precision. That’s pretty obvious, but can often be overlooked because you have somebody who’s very charismatic. You’re like, “This person would be good at getting along with the team and taking your field and client calls.”
How do they organize my QuickBooks? How are they going to take care of the financials that are coming in and out of the office day–to–day? How are they going to manage our projects? Precision is huge. It’s one thing for salespeople don’t often have. One thing we’ve often done is if we have a big enough sales team, we will allocate an administrator to the sales team to allow them to do what they’re great at and let this other person do what they’re good at, which is take care of the details in the backend. That’s a big one. One that everybody gets interviewed on, that we ever bring into our organization and for a lot of guys we coach is values.
Everyone talks a little bit about that, but what’s going on? It’s not about having good values or bad values. It’s like, do their values align with the company itself? I‘m sure we’ve all had this too. You hire somebody who’s like a rockstar and they’re killing it, but they’re doing it in a way that’s pissing you off the whole time. He was like, “That’s not okay. That’s not how we do it,” but they get good results. You have to watch for that. If they don’t have good value, it doesn’t matter how well they perform over time. They usually don’t last.
I’m a big on the values, the integrity of the thing. I can’t spend any time worrying about is this person doing the right thing. That kills me.
There are few other ones that are instrumental. Another one on overall, how do these people present themselves? Do they come across as highly competent, as responsible? These are going to be the people that interact with your public audience. They are representing your brand. Is that the type of person you want representing your brand? There are lots of little ways to look for these things. I know precision is a sneaky thing to do. After you’re done with the interview, you can still ask specific questions about how they organize their time, their calendar, their life and the big projects they managed over time.Focus on personality preferences and the styles this person live by because you can't change those. Click To Tweet
One thing I always do after the interview is, I’ll walk to their car with them and I’ll shake their hand and say goodbye. I’ll look in their vehicle. Is it a complete garbage mess or is it nice, tidy, clean and everything’s pristine. People who have a natural preference for high precision are usually OCD and can’t handle even a speck of dust on their car. It was little things like that you can look forward to. The interview itself, there are specific questions we get people to ask. We’ll get everybody a little download on this exact interview process and the questions they need to ask.
You were going to give away a 30–minute meeting to address your business and build a checklist of what your caller might need to focus on in their business.
I have a recruiting package. I’ll get the team to add as well. That goes through how to do a set up call properly, how to do an interview properly, how to set up an ideal candidate profile. I’ll go through some of these tactics as we go, but I’ll give a little package that people can utilize when we talk about it.
Where do you run your ads to get all this stuff done? Where do you place these for help?
Before we even talk about that, one thing I’ll get into a little bit is understanding what to put in your ad. I want to set some context for all of this because what I’m about to say is a bit of work and people often are like, “That’s a lot of work. I’m good. I’ll just do it my way.” Here’s the reality. In 2008, what was the big thing to get? What was every entrepreneur trying to do more of?
They were trying to get money, weren’t they?
What are we in the recession now of? People. There are few good people out there. You think about the amount of hustle and time and effort that it took in 2008 to get the jobs you wanted to get in, to get the work you needed to get. That same mentality needs to be applied to recruitment. A company that understands recruiting at a high level will outbid their competition all day long, but if they’re like everybody else, they’re going to struggle like everybody else. I always encourage people as I go through this process to realize now in the economy we’re in, that is the skill to hone in on if you want to build a true organization over time. You can throw ads out there all day long and get someone to apply and hire the second person that comes through the door because they had a heartbeat and a willingness to go try the job.
If you want to build a lasting team, you need to understand the mechanics of it and put it quite a bit of time and effort into it. There’s a time in my life, I was recruiting for franchises and I would bring in about 150 student franchises a year. The effort that it took to do that was a game–changer for my skillset and recruitment. As a driven, not only my organization, but most of the companies we work with where they’re realizing, “We got more work coming in than we can handle, but we can’t get the people to do it.”
People said that there’s a scarcity of people, but it’s a great time to go find some good people because a lot of good people have been let go. While some of them may choose to sit on their bottom, collect the unemployment check, others are the one that you want. He’s like, “I don’t want an appointment. I need a job.” That’s the one you want. There are people out there like that. It was me like, “Unemployment is one thing, but I’d rather have my job. I got stuff I need to learn and places I need to go. I can’t do that sitting unemployment.”
You also have $26 million in the marketplace because you’re super motivated. A lot of people will take the easy route. There are only a few that won’t. Those are the people you want to find. It’s not about getting someone willing to work a little bit. It’s about finding a person who’s looking for a career. What I’ve realized over the years is that it’s like a draft pick for a sports team. There’s a whole draft season to finding your right team to go on the bench for the next fiscal year. Usually from September to January, I would be on quite a recruiting stint. Everyone might have different seasons and some people might be recruiting all year. The first thing I do is to build my budget.
I figure out what my financials need to look like in a year from now. I then off of that say, “I can’t do all of that for sales. I can’t do all that for project management. I can’t handle all the office stuff. I need X, Y, Z role.” I started to decide which roles I need a year ahead of time, “I have a $50,000 budget for that person’s salary and $80,000 budget for that person’s salary. Can I afford it?” Once I’m confident about that, I now have a year to insert those people into my organization and then I start my recruiting process. I’ll look at what are the ideal traits of the person I’m trying to attract. Some of the stuff I was talking about with recruiting and then I’ll say, “What is that type of person you’re looking for?”
Instead of trying to put out an ad where it’s like, “This is all about me and what I need as an owner,” I’m thinking about what does that person want, look for and need? Turn the table a bit. I turn it into a bit of sales and marketing ad to attract or draw that person in. A good example of this is years ago on my painting, I was looking for another project manager and I sat down with my current run and I said, “I love what you are and I need to clone you. Tell me more about you. What do you love about this job? What do you hate about this job? What gets you up in the morning? Why did you start with me?
The things that came out of his mouth was interesting because he was like, “I love that you’re my coach more than you’re my boss. I love that you give me the autonomy to set, hit goals, and make bonuses off of those. I love that you give me a team to drive, lead, and be able to strategize how to get things done.” He’s like, “I’m the quarterback on the football team in high school. I get to use that same mentality on the painting field with you and make money doing it.” I realized that my ad before said like, “Need project manager. Drive company truck.” I changed it to like, “Need a quarterback to take our paintings home.” Sick of a boss, wish he had more of a coach, looking for autonomy and freedom to work in your role, looking for bonuses that reflect your efforts.
I spoke to the athlete and people and what I started to get was more of those types of people. Physically, I got more athletes that applied for me and their genetic makeup of who they are and their personality traits were much more relevant to the type of skill I was looking for to be able to drive my organization forward. They weren’t the greatest painters to be honest, but they had the right personality traits for me to able to build into them long–term. As the first step, before I even posted an ad, I spent that type of time interviewing my key people. Even if you don’t have someone in your business already that you can interview, look out at your network and say, “Who’s someone I would love that’s probably not going to come on board with me? I could at least interview them to find out how they tick so I could use their mentality and put that out into an ad properly.” That’s the first step.
I like a certain ex–military person because they have this. It’s been drilled into them early, whatever it takes, “Yes, sir. No, sir. Respect. Not tomorrow, but now.” I like athletes because they don’t quit easily. They’ve been in very uncomfortable positions many times. I didn’t think about appealing to the athletes as much. What’s next? Where are we headed?
You got your ad. You’re ready to put it out. Think about this like fishing too. It’s what are the traits of the fish. Now, we figured out the louver that’s going to attract this fish. We forgot to figure out what ponds we’re going to go fishing in. This is the tactic side. You want to think through like, “Where do these people hang out? Where do their eyes go?” For a lot of people, it’s pretty obvious. Things like Facebook, more professional roles are out on LinkedIn. We’ve got the standard ZipRecruiter and Indeed. The ones that I find work the best are the ones where I’m doing the outreach. Let me explain this. First one would be, if you’re looking for more of an office role or more of a professional role, LinkedIn is amazing. We pay for LinkedIn recruiter. It costs us about $1,000 a month. Some people will be like, “That’s a lot of money.” I’d be like, “Not for the type of people you need. They’re going to create a much higher ROI long–term.” We will have about 200 messages a day that go out that click to connect with people.It's all about developing people. That becomes the core element, the skill that will drive the business. Click To Tweet
Everyone will do an advance search on a certain demographic of people in a certain area, with a certain job title or a certain past history. You can do this with the advanced search through a LinkedIn recruiter. We’ll click to connect with 200 of them. Thirty percent of them usually accept the connection and then we send them a message and say, “I noticed you worked for five years, that’s awesome. They do great training. Our company X, Y, Z is looking for a person at X, Y, Z role. If you know anybody who’d be a good fit, please see the link below and we’d have that recruiting ad ready for them to read. P.S. We’re offering a $500 hiring bonus. If you know anybody, we would love to share that with you,” or $1,000 or $2,000. What you’re doing is you’re not saying, “Would you be a good fit?” That’s pretty aggressive and people get thrown off by that. You’re letting them self–identify or maybe refer you because they might have the network of similar minded people.
They’ll plug themselves in if they want the job.
We do that on LinkedIn. You should do this on your own as well. We do it on Facebook as well, except we direct message people. I have 25 staff. We’ll have them all do about 100 to 200 messages each that is the exact same message. That’s 2,500 direct messages that go out to people’s networks. They message people they think would be a good fit. They think would have a good network of people that’d be a good fit or people that generally have a good relationship with.
It’s an amazing world we live in. Do I have to ask for what you’re looking for? Chances are, you’ll find it because of the way we can connect this. What does it take to generate a bunch of good resume applicants? That’s the bottom line is how you’re wording your ad.
To what you put in your ad, it comes a lot down to the time and money and effort you put into it. I might do that and get no results. It doesn’t mean it’s over. It means I’ve got an entire year to still recruit. What am I doing every single week to keep that pushing forward? I might have a certain ad spend on Indeed. I might have a certain ad spend on Craigslist. I’m putting my waves in webs. I’m putting my web out quite broad and I’m doing it every couple of weeks through waves of doing it. Over time, the right person comes along. If you’re in a rush to recruit and you’re like, “In the next two weeks, I need to hire somebody. I had three people apply, two people I set up for an interview, one guy showed up and he wasn’t high on drugs. Let’s hire that guy.”
One thing we learned from my business partner, Mike Pal’s father, when it’s a pretty important position, we don’t go out and try to invent that person or we find out who’s already good at it in some other organization and we go poach him. We go to that organization or do what you said, ask that person that we want if they know somebody who wants this job. Usually, we know what they’re making or close to and we set our bar a little higher and try to get a conversation going. That’s been good because things that we thought we knew about the chair that we wanted them to sit in, they knew more about that chair than weaning it. They were showing and introducing us to software and product and it was like, “I’m glad we weren’t here trying to train somebody. We found somebody who was an expert at sitting in that chair and they’re improving our thoughts immeasurably.”
When you’re doing LinkedIn searches, you can physically type in company names and people whose resumes have past history and those companies will pop up. I know personally college pro painters, student works, all of the student painting organizations out there. If I had a guy who’s been doing that for 3 to 4 years, I know that they went through a pretty rigorous process to be able to keep doing that. I know that they probably built into them in a very unique way that not a lot have. I know that McDonald’s has incredible management training and that people who have been through that management training for 5 or 6 years have probably got a pretty good box of tools to do job site management. We definitely are keyword searches for certain companies and then we’ll message people that have that past experience.
We’ve been talking about a very small niche of what the overall big picture of what you do. We’ve been talking about how to generate decent resumes and find good help. Let’s talk about what your overall business offers and you’re going to give away some input on how to find the right person since we were talking about recruiting. Before we started talking about recruiting, you are offering a 30–minute free meeting to address an individual’s business and to try to narrow it down to a list of specific things that they need to focus on in their business to move up or to move forward or to streamline. Talk about that part of what that meeting would be like?
I find most entrepreneurs are crazy ADD, dyslexic, idea–driven, action–oriented people. They’re like, “I want to build a business. I want to get to X million in one year. They’re not realizing that the skill of doing what they’re doing, which is often a glorified job for themselves, requires a lot more finesse on the backend. You need an implementer or someone that understands almost like an engineer on the backend helping you. I’m the ADD entrepreneur. I’m not some saint in what I personally can do and understand, but I have a background in franchising that blew me away in my experience.
From 18 to 25 years old, I built a painting franchise then worked for corporate, had hundreds of franchisees that I oversaw with a few other partners. It was incredible to watch how much me and all these people were developing under a system that had something to follow, which told them, “This is where you’re wrong. This is where you’re right. This is the process you need. Here are the templates to go do it. Here’s the tried and true strategies and execute and McDonaldized the process.” Everything has a way to do it.
I call that having the rails to run on. When you’ve got a lot of ideas. you can derail pretty quickly as an entrepreneur. It’s nice to have somebody that goes exactly like these two things, shut up about everything else and go. I have no problem taking action. I need someone to give me some direction on it. Back when I was eighteen years old, that was my life until I was 25. When I left the franchise world, my idea that I wanted to bring to the world was like, “How do I build a franchise system without selling a franchise?” That became Breakthrough Academy.
It’s not just me, but I’ve got two business partners that are incredible and backing me up and the things that I’m weak. We’ve got about another 22 staff that a lot of them are more than the engineer side of running a business and have the project management high–level experience to guide a lot of our members. We have a couple of people in the sales team to do this, but we sit down and we want to understand what is going on in your business? What are the biggest challenges? It’s often around recruitment systemization, pulling away enough, having some time from the day–to–day and then giving some people 1 or 2 things to go do. It doesn’t have to be this big, complicated thing. It’s, “Do this in the next two weeks. I’ll talk to you after that.”
That’s one of the main functions of a coach or mentor, in my opinion, is to keep people from getting overwhelmed like, “Don’t worry about that. I know how to do that over there,” but you’re not even there yet. “Let’s do this part.” I have people like, “How do you sell notes?” I said, “You don’t even have notes to sell yet. Let’s wait until you get a note.” I’ve got it handled up. We can get you through that process, no problem. You don’t need to worry about that right now. First, all we need to figure out is how you’re going to buy a house and create enough. I appreciate you taking the time. You have a great service and the people that I know that you’ve dealt with, they speak highly of your work.
That’s why I want to have you back. I happened to begin a lot of recruitment and systemization questions myself and from my people. I take what’s happening in my day–to–day life and then I go out and search for that stuff and bring it back in. I like to thank everybody for reading to get you some Danny Kerr. If you want to get either or both of those free offers, a little hand out on how to hone on your recruiting and a 30-minute meeting, go to 1000Houses.com/breakthrough. Thank you for coming. I like to thank TaxFreeFuture.com for sponsoring the show. If you do not have a tax–free environment or tax–deferred environment to grow your finances, you need to check it out. You won’t believe what your financial advisors are not telling you. We’re going to tell you what they’re not telling you. We’re going to tell you what they’re not telling you, and then you can do with it what you want, but it’s going to be eye–opening.
- 1000Houses.com/BreakThrough (Code: MITCH)
About Danny Kerr
Danny learned two important things as a young age: to work hard and be humble in everything he does. Coming from a modest family, he was forced to create his own success in life. As a Dyslexic student in school, he was treated differently throughout his upbringing and his potential was questioned by everyone around him. As he grew up, these experiences fueled his desire to push boundaries and prove what was possible.
From a struggling middle school student, Danny graduated high school with a 4.0 GPA, and started his own trades business, employing 12 full time staff and making enough money to buy his first home. By age 20, Danny had taken a leadership position for a franchise company and grew sales by 225% in one year, ultimately operating 100 staff and helping the organization develop its presence in Western Canada. This inspired him to take what he had learned, and help entrepreneurs all over North America move past adversity and reach their full potential.
In 2015, Danny started Breakthrough Academy, a company made to help entrepreneurs in the trades grow their company’s profitability, while taking back control of their time. Breakthrough Academy is currently working with over 220 business owners across the continent, managing over $400 million worth of revenue, and was rated as Canada’s 16th fastest startup by MacLean’s magazine in 2018.