How Can I Scale My Contracting Business?
In this episode of Trade Secrets, brought to you by Elevation Marketing™, Devon Hayes and Amanda Joyce welcome longtime client and operator Stephen Spallo of Stag Homes Design Build. Stephen shares how he helped grow his exterior contracting company from roughly $2.5M to $7.5M in two years, and what he’s applying now in a new, higher-ticket design-build environment.
🎧 Care to listen instead? This post is Episode 68: How Stephen Spallo Scaled A Contracting Business from $2 Million to $7 Million in Two Years.
Scaling a Contracting Business Starts With the Right Operator Mindset
If you want real growth, Stephen’s first point is refreshingly grounded: stop guessing. He describes the Integrator/Visionary dynamic (from EOS) as almost “magnetic.” The visionary sees the big picture. The integrator builds the team, process, and accountability that make the big picture real.
Stephen’s recommendation for contractors who want that “integrator effect” is simple:
- Look for the person who naturally builds structure
- Tracks results without making it feel “corporate”
- Can translate goals into processes your team actually follows
He also calls out a book that shaped his approach: Traction by Gino Wickman.
The First Move: Track Numbers Without Overcomplicating It
Stephen says most contractors are not short on effort but short on clean visibility.
Common symptoms he sees include:
- “We don’t really know where leads come from.”
- “We track cost per lead, but not what closes.”
- “Everyone says ‘the website’, but that’s not the real source.”
His fix is not fancy. It’s disciplined.
Start Today, Not “When It’s Perfect”
Stephen’s advice is to avoid the trap of backfilling years of data.
Instead:
- Start tracking what you can today
- Aim for “75% accurate,” then improve
- Make it a team habit, not an admin chore
If you don’t have a CRM, pick one and start. As Stephen puts it, “There are tons… and they’re not prohibitively expensive.”
Require the Lead Source Field
In his current role, the CRM had ~500 leads, but ~200 had no true source.
So he made “Lead Source” a required field going forward. That single guardrail prevents months of confusion later.
Stop Letting “Referral” Become 200 Different Categories
One of Stephen’s best practical nuggets is his approach to cleaning up messy lead attribution.
He recommends:
- Use one primary source: BNI
- Add the person’s name in the notes
- Keep your dropdown list tight enough to analyze
When lead sources are standardized, reporting becomes easier to digest without needing someone to “translate” spreadsheets every month.
The Metric Stephen Cares About More Than Cost Per Lead
Most contractors obsess over CPL. Stephen doesn’t ignore it, but he prioritizes a bigger number: Net Sales to Lead Issued (NSLI).
Why? Because it answers the real question: How much revenue does each lead source produce per lead you generate?
He shares an example from Google:
- Cost per lead: About $298
- Net sales per lead issued: About $2,700
That math makes decision-making clearer than CPL alone.
Right People, Right Seats: Build the Team Before You Build the Volume
Stephen’s second big lever is hiring and team alignment. He uses a Traction framework: define core values, then score your team and candidates against them using a structured tool often called the “People Analyzer.”
At Stag Homes, they landed on six core values:
- Enthusiasm
- Collaborative
- Communication
- Integrity
- Accountability
- Determined
Then he scores people as:
- Plus (shows the value consistently)
- Plus/Minus (usually shows it)
- Negative (rarely shows it)
If someone is negative on a core value, it doesn’t work long-term. He’s tried to “coach it into existence.” It still ends the same way.
How to Interview for Values Without Making It Weird
Amanda asks the question every owner asks: How do you assess values fast?
Stephen’s answer:
- Use values to shape interview questions
- Run multiple interviews
- Have each interviewer score independently
- Use a third interviewer as a tiebreaker if needed
As Stephen puts it, sometimes your “gut feel” is just you being hungry at 3 p.m. Scorecards reduce that bias and keep everyone measuring candidates consistently.
Why Marketing Was the Growth Accelerator (And Why Partner Choice Matters)
Stephen gives Elevation Marketing™ a shout-out, crediting growth speed to having a marketing partner that feels like an in-house team. He’s worked with multiple marketing companies over his career, and his differentiator is not “better promises.”
It’s this:
- They care about the business outcome
- They protect the brand
- They treat your budget like their own
He even tells prospective employers that if he takes the role, he’ll bring Elevation Marketing™ with him. That’s a strong statement about confidence and accountability.
The “Back Into the Math” Growth Plan
Stephen lays out how to turn a revenue goal into an execution plan:
- Define the revenue target
- Know the average job size
- Know the close rate
- Calculate leads needed
- Match lead volume to channels you can scale
He says there are only so many ways to “slice the cake”:
- Close more jobs
- Sell higher-value jobs
- Generate more qualified leads
Then comes the part most contractors skip:
- Accountability
- Check in weekly or monthly
- Hold the plan to the calendar
If the team is right and bought in, tracking becomes motivating instead of threatening.
FAQs
What’s the First Step to Scaling a Contracting Business from $2M to $7M?
Start by tracking the right numbers consistently. You need clean lead sources in your CRM, close rates, average job size, and revenue per lead source, not just cost per lead. Once that data is reliable, you can “back into the math” for your growth goal and invest confidently in the channels that produce profitable jobs. Without clean inputs, growth turns into expensive guesswork.
Why Isn’t Cost Per Lead Enough When You’re Trying to Grow?
Cost per lead matters, but it can mislead you. A higher CPL can be a win if those leads close into larger, more profitable projects. Stephen recommends focusing on net sales per lead issued, which tells you how much revenue each lead generates by source. That metric makes it easier to decide which channels to scale, cut, or refine when your goal is revenue growth.
How Do Core Values Help Contractors Hire Better During Growth?
When you’re growing, bad hires create bottlenecks and churn. Defining core values gives you a consistent way to evaluate fit across interviews, and a “People Analyzer” scorecard helps reduce gut-bias. If someone consistently violates a core value, it usually becomes a long-term drag on the organization. Values-based hiring protects culture and execution, which is critical when volume increases fast.
What Should I Look for in a Marketing Partner If I Want to Scale?
Look for a partner who ties marketing activity to business outcomes. They should help you understand where leads originate, what converts, and what the ROI looks like by channel, not just send keyword reports. Stephen emphasizes finding a team that understands contracting, treats your budget as its own, and integrates into your operation like an in-house department. That alignment supports a faster, steadier scale.
Turn Growth Into a System You Can Repeat
If you’re ready to grow past the “we’re busy” phase and into a business that scales on purpose, start with Stephen’s formula: define the team you need, track what’s actually happening, and build a plan you can measure every month.
The team at Elevation Marketing™ helps contractors connect marketing spend to real revenue, so you can stop guessing, stop wasting budget, and scale with confidence.
When you’re ready to map out your growth math and the marketing engine behind it, reach out to Elevation Marketing™ and start the conversation.
