4 Areas You Must Master to Build a Profitable Construction Business (Ep 289)

Do you want to build a high-performance, highly profitable building company?💰 

Today, Max chats about the four areas you must master to grow your business! 

Money loves speed, and to move quickly, you must be efficient!⚡ 

Catch today's episode on the whiteboard --> https://www.youtube.com/playlist?list=PL76rc3DrCOMb7VM9icAOQmLodNCSZTfKf

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📧 Email: paris@jobtread.com
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Transcript

SPEAKER_00 0:00

Here are four areas that you must focus on if you want to build a high performance, highly profitable building company. Enjoy. How old are you going to be before you start to experience life like you want it? I want to tell you right now, whether you like it or not, there is a better way to do business. Hi everyone, welcome to the Business for Builders podcast. My name is Max, and I am your host. And on today's episode, we're going to get pretty simple, but I think it's really important that we understand this area of expertise if we are going to be the best leader in our business that we can be. Today I'm going to talk to you about three things process, communication, execution. Okay. We really need to make a conscious effort and a commitment to our end result, you know, not just we want to get there, but it's like what are we going to go through to get there, right? So, you know, our commitment to efficiency, I guess what this this episode is about. So our commitment to really build in our business efficiency. Why? Because money loves speed. If we can become more efficient in our execution, then obviously we would expect that the um the profit or the benefit or the outcome would be um would be very exciting. Okay, so the first thing today, so we're talking about process. I want you to think about this process, communication, execution. Okay, so around process, you've heard me talk about good businesses operate off the back of good systems, and systems are run by really good humans. Okay, a clear process reduces the confusion, the rework, and the wasted motion. I am so surprised when I talk to prospective elite business advisory clients and I ask them, so talk to me about your sales process. And they run me through it and I say, How long have you been doing that for? And he said, Well, that's the way I've always done it. And I basically say, Well, that's not how I would do it. And these are the reasons why. There you go. Okay, so we need to really have not just a clear process, but we've got to make sure we have a competent process, right? We have the systems, the tools, and the resources. Now it's funny, um, I don't know if I'm getting ahead of myself here, but it's funny, I was talking to Jed, my business partner, and I was talking to him about a new inquiry that we just uh that I'd just been out to see, and he says to me, So you're just gonna issue him with a an estimated price range? And I'm like, mate, you're catching on, you should come into sales with me. And so the reason that that is the case is because I am so repetitive, right? Once I've got a good system that I know works or a good process that I know works, I don't get too funky and change it up every other week. Okay, repeatable steps create consistency across every project. We have a process, we have a system, we have an approach, we have a way of doing things. Without process, every job feels harder than it should be. See, what happens is this is why you've got to have clarity and thought, because the speed of the leader determines the speed of the pack. If what I'm doing by determining the process, and then I teach the process and they execute accordingly, what happens is we get fluent in the way that we do business, whether that's in the sales part of it, where we're doing design, plan, and price, or whether it's in the construction part of it where we're actually executing and actually building the home. Um, so it's it's we've got to what we say, uh, I guess we eliminate the guesswork. So nobody is like, what happens next? It's like this is our process, this is how we do it. You know, I mean, you can pretty much think about your life and go, well, I have, and you know, maybe another word for process is routine. You might, well, this is what I do, you know, every day when I, you know, get out of bed. I do this and I do that. It's interesting. I hear interviews with Gary V and they go, so what tell us about the first hour of your life in the morning, you know, and it's the old shower, shit and a shave, and then he checks his emails and he checks Twitter and da-da-da, all of that sort of stuff. And it's what it does, and you'll you'll notice that for the last 150 or 250 or probably 280, whatever episode number this is, last you know, 280 odd episodes, Max always wears a black shirt. Max wears a black shirt on the weekend, and it's very uncommon to see him in anything until he goes on stage to play some rock and roll, and that's where we change up the uniform a little bit, okay? Because I just don't like to waste energy in the morning picking out, and I, you know, feel for these guys that have got a dress white collar and suits and all that garbage, you know, good on them. But you know, for me, it's just pick up a black shirt, grab my jeans, put my freaking Miara and Williams boots on, and let's go. You know, that's it. So, you know, that that systematic approach to execution or doing what we do are very well rehearsed, very repeatable. Okay, now we're gonna talk about, you know, consistent, excuse me, we're gonna talk about ongoing, you know, development, right? And so the continuous improvement around what we do, um, I find that I take my estimating skills in an analog format that I learned way back in the day, and I try and marry them up with software. Now, what I find is the software is so good that it improves my analog understanding of estimating because of the reporting mechanism, the tracking mechanism, the user interface, the my ability to build that estimate. Whereas once upon a time, if I was typing it all into a spreadsheet, now I can just use a catalog, type the first few words, bang. Because I built that into the catalog with the right cost codes and everything like that, so it reports on you know that we can cost track or we can back cost the actual job itself, but it also pushes to QuickBooks so we can, you know, track our uh, you know, all the details around our profit and loss and our balance sheet all at the same time. Okay, so without process, there's confusion, okay? And everything feels more difficult because we're reinventing the wheel. Okay, so that's the first thing. Second thing there is communication, and I think you know, guys, particularly, geez, that's a funny way of writing that. Guys are the worst, you know. We think a lot of stuff, but we don't say a lot of stuff. And I think that it's it's not necessarily I don't know why that is, but I do know this that you must have the ability to communicate at a high level to allow you to be able to connect with people in your area, whether it's employees, business partners, husbands, wives, kids, uncles, aunts, mums, dads, the whole nine yards, your ability to communicate really is an important facet because it does give you the competitive advantage. I know I've had EBA clients, I absolutely know this, that you can tell they're very good technicians, very good practitioners, good on the tools, knock nails into wood, awesomeness. But the minute they've got to start sharing with a homeowner how they go about their pre-construction, they trip up a little bit. Okay. So you the quality of your communication, your ability to connect all of the dots, and it's like, I guess it's like standing here talking to that black dot and that black dot and doing a podcast where you're not actually, well, I'm not coaching anybody, I'm pretty much talking to myself right now. Um, you know, I think to be able to sort of be able to talk as well as gather your thoughts and maintain your train of thought so that you are communicating at a high level, that is a developed skill. I didn't wake up and go, I'm gonna be a podcaster, I'm gonna be a YouTube guy, I'm gonna do this. No, it what it does, my ability to communicate with my wife has increased because my commitment to communication, my ability to connect with my kids, my ability to connect with my business partners, my trades, my vendors, my my clients. Good communication. Now, it can be confronting for some when I communicate with them at this level and they're not used to communicating, that becomes a little bit intimidating because they're not used to jamming at that level. And so, you know, I wouldn't say that don't become a good communicator, so you're friends with everyone. That's BS. I wouldn't do that. Okay, but you do have to become a better, it's what links, it's the link between your process in your company and execution. We're gonna talk about execution in a minute, but communication is what connects the process with the execution. Clear, simple, timely updates, reduce the friction with clients and team. You know, I know it's easy for me and Jed, you know, it's funny. We'll actually cover more ground on the phone than what we would if we caught up after work for a meeting or a toolbox talk or what have you. Like there's so much more stuff when I'm in the office and I'm sitting in front of my PC and we're talking about adding vendors, or we need to get that PO out, we've got to get that quote sorted out. Can you chase up, you know, that client? You've got to drop in on them and just say good day. All of that sort of stuff can get done much better when there's clear communication in an organized fashion. So the opposite of that is poor communication creates delays, mistakes, and frustration. If you live in a world of disorder, it's because your ability to communicate is not where it should be. And I think when you're when when whenever whenever you feel like you're like really under the pump, you know, when you've you've just got so much going on, you don't know whether you're punch bored or drilled, your ability to communicate is going to be that what makes the difference. So if you've got challenges with clients, you've got challenges with creditors, you've got challenges with you know subcontractors, it's your ability to communicate that's going to save the day. Now I know that because I've been in situations where if I didn't communicate, shit would only get worse. And so if you're sitting there and you're nodding your head and you know what I'm talking about, um, at that point you could probably trace it all the way back and go, it's because I stopped communicating. I'm amazed. I'm amazed that when there is things that are challenging in people's businesses, and I think this is a differentiating factor, if you're the kind of person where there's something goes awry in your business and you put your head in the sand and because you don't want to deal with it because it hurts, you shouldn't be in business. Facts. You need to get out, okay? Because we're talking about it's when something is confrontational, when something is challenging, when something has happened that is going to really not end well if you don't grab it by the horns. If you run away from that event, what you're saying is that I am no longer in control. The tail now is wagging the dog. And my advice would be you need to take time out and consider what you're gonna do with the rest of your life, but you've got to understand that your emotional bandwidth may not be good enough to handle you know the frustrations and the chaos that can come at us in business. Number three, we're gonna talk about execution. Okay, so this is really where the results happen. Okay, well, we hope execution ends up with positive results, right? Execution is the discipline of following through on the process, guys. You know, I think we've got so much going on, and I'm no different, I've got plenty of stuff going on. But when I'm in the moment, I'm in the moment. See, what happens is you you could have 15 things on your to-do list. I don't know what you've got going on, right? But I am telling you this that you need to pick one. Okay? It's if you just sit there back and you roll back in your chair and you're like, oh, I'm so under the pump and I've got so much going on and I can't think straight, that's that is to me, it lacks discipline. Because I'm telling you what I have to do, what you have to do, is I need to, I need to triage, I need to take all of this mess that is maybe your life, my life, and I need to put that in some order, and then I just start picking them off one at a time. Like one shot in the chamber, do that thing. Next thing, do this. I've got, after the show, I've got to issue 10 purchase orders. I'm telling you, short of a personal tragedy, everything doesn't get in. I don't get distracted, my phone goes upside down, it's on silent. I've got 10 POs on my to-do list, this is what I've got to get done today. And I just I hunker down. Now, what I like, it's about getting in the zone. This is why, guys, a building company, A, is a combat sport, two, it's it's almost too much business for one person's head. And I've talked to you about before, I've got Jet on site right now, executing, doing a brilliant job. Okay, at the same time, I'm over here doing project management, I'm doing sales, I'm doing contract administration, I'm doing procurement, and I just happen to be working a couple of uh cost plus jobs that are in that 10 to 50 grand range, and I'm the one going to our local home hardware and picking up wood or lumber or two by fours or 9035, depending on which part of the world you're in, and I'm running that out to the building site. I'm the guy that drew up the quick floor plan for that ensuite to give to my framing carpenter in the next morning. Like, so there's so much business going on, and then we wonder why we can't think straight. So if you are running your business by yourself, you need to have an absolute predetermined understanding of how you tick off your checklist, how you gather your thoughts, and then how you focus. I know this. In the morning is by far my best time. There's no question. By the time I get started shooting podcasts and I'm dealing with interior designers and clients and trades and you know, all that sort of jazz, mate. What I'm doing is I'm running the business now. I'm not into that planning mode. Okay, I'm not into that thought process. But I tell you what, and I'm, you know, I play in a rock and roll band and we do pop punk and grunge, and you know, so I I put in my Blink182 and you know, my offspring, and I put my buds in, and you know, I'm just like, there's my checklist. Now here's a tip too, guys. Last night I put my list together, left it sitting on my desk. So when I come back into the office and I'm early and I know I'm fresh and I'm not gonna get bothered by anyone, put the music on, because that's what I that's how I roll. Now you might say I find music too distracting, and I get that. But I tell you what, when I'm doing something fairly straightforward like PO generation, I'm just in the zone. I just got to get these boxes checked. Next, next, next, next. Okay. So I don't know what that's got to do. Uh, where are we up to? Execution, right? Getting results. So if you're the guys and gals that put your head in the sand and you can't deal with it, what you're saying is that I can't handle the pressure. So I've seen guys go to 1.52 million and they're not the type of person for that business. So, you know, one of one of my uh clients out of Sydney, um, I think I talked about this a couple episodes ago, he said, I'm gonna do some cost plus work just to just to cut my teeth, just to get my toe in the water and see how it feels. And I'm thinking that's a great idea. Because I tend to be more adventurous and go and try and, you know, get her done in the first five minutes, which is not the right approach because you can outrun your supply line pretty quickly. Uh, speed and consistency in action creates momentum in your business. I was chatting with another EBA client this morning. We were talking about how we want to build the business. He's got great branding, great lead generation, uh, closes deals at the right profit margins, um, has got a really good brand reputation. What we're talking about now is trying to, because we've got more profit, what we're trying to do is develop more lifestyle. You know, and so to do that, we need systems and processes and we need people. Now, the other P that I'd throw in there is the premises. Like, you know, it's important that in some guys' psyche and some gals' brains, they're like, Well, I need an office to go to, so when I lock the door, that's my physical way of leaving work at work, and then I go to the gym, and then I go home for dinner or what have you, whatever your process is. Okay, so it's really important that in our execution, that there is momentum, is the result, it is the outcome. Okay, plans don't build project execution does. See, Gary Vainchuk says ideas are shit, execution's the game. This is the point. We can sit there with rolled-up blueprints and never ever go and start work, and we never actually see that dream come to fruition, we never get to build that house. What where we get it built is in the execution, is in the development. See, to know and not to do is not to know. So it's like, yeah, Max, I know, I know, I know. I get that a little bit, you know. I know, I know. And I say, well, to know and not to go and execute is really not to know what you're doing. See, when the clutch drops, the bullshit stops. You've got to get after it. Now, if people are hesitant because they're fearful, that is a bottleneck. That is holding you back from becoming the best you that you can be. See, you've got to feel the fear and do it anyway. When I moved countries at 40 years of age or 42, whatever I was, by then I was well ingrained in business, in you know, my social circles, the footy club, you know, everything that I had grown up with and around, and I was literally within 20 K's of where I grew up. So to have this weird and wonderful idea about coming to Canada, that took me a few years to really swallow that concept. And I'm, you know, I'm glad I made the decision because it's opened up a whole bunch of stuff for our whole family. But you know, we we we couldn't just leave it at an idea situation at some point, I had to make the jump, and so we did. And uh I burned the boats and and you know the rest is history. So motion creates emotion. So, guys, if you're not prepared to really get out of your comfort zone and more or less live in your your you in that world of discomfort because success lies outside your comfort zone, um, what you'll find is that you'll stagnate and you'll get bored. Whereas for me, when I'm I'm I'm business coaching, I'm running a general contracting company, I'm the president of a footy club here in Vernon, I'm a secretary of the Okanagan Carting Club. Um, you know, there's a lot of stuff, you know. Obviously, I'm I'm a husband and I'm a father of six kids. Um, you know, like there's a lot of stuff going on because that motion, it gives you a sense of purpose, it gives you a sense of belonging. Okay. And that's just, I guess that's my perspective. You might have a different perspective, and that's okay. Number four, continuous improvement. I think what I love the most is probably out of these four points is this one, because I think that as we look at, you know, having got into the industry long before most of you folks were born in 1989 and finished my apprenticeship in 1993, and and at that point everything was analog. I do remember there was car phones probably early 90s. I remember one of the supervisors having the phone bolted into the car, and then the carpenter that I work with, Mek, he used to have one of those bricks, you know, walk around on the job site with. So, you know, I've seen the evolution from, you know, the the last days of just purely analog and you know, right throughout, oh, now we've got email and now there's you know YouTube and Facebook, and you know, nothing happened when we went from 1999 to 2000. Um, I remember that clearly. Um, we woke up in the morning with one eye open. Did anything happen? Nothing changed. Interesting, right? So continuous improvement, really, we've got to embrace it because whether we like it or not, it's either gonna happen for us or it's gonna happen to us. So, you know, by design or default, you've heard me say that before. Are you gonna run a business, you know, that you've developed, you know, uh that you've designed, or is you just gonna run the business that comes to you every morning and you let the tail wag the dog and your life sucks and there's no profit, so there's no lifestyle and you hate the industry and you're pathetic to live with. That's a bit harsh, isn't it? So when we're doing the continuous improvement, what the focus is, is to reduce the wasted motions. Now, what comes to my mind is whenever I'm and you know, we do rena's, right? So there's every job is pretty much customers different, but when I build an estimate, I'm trying to develop, I'm trying to improve the accuracy and the speed at which I can put out a quote. You know, or put out an estimated price range in the beginning, let's say, which can potentially lead to a final fixed price quote. So, you know, what I've got to do is I've got to continuously improve line items and make sure that is creating efficiency both in execution but also in uh accountability. So, you know, if I enter a line item in and I don't put it in the catalogue, it'll only be good for that quote. If I enter into the catalogue, I can use it again if it's something that I think is gonna be used more than twice. Now, but if I if I do that and I don't adjust the cost centers, then essentially my back costing my reporting is not going to be of any use because the data is going to be inaccurate, the costs are gonna be distributed in the wrong places. So we always want to look for ways to do things simpler, faster, and much better. Okay, so we're not trying to cut corners, but what we're trying to do is create efficiency. Remember, speed and you know, money loves speed, so we want to be more efficient, we want to be able to execute. Okay, small improvements compound into major efficiency gains. I think we underestimate what we what we can, you know, or excuse me, we overestimate what we're gonna achieve in 12 months, but we underestimate what we can achieve in 10 years. And as you get older, you realize how quick 10 years goes. So don't be impatient, right? Don't like you you don't want to be like the dog chasing a moving vehicle. Like when you catch the car, what are you gonna do with it, dog? See, like we don't we don't appreciate that continuous improvement is our part of our lives for the rest of our lives, and that we should just embrace it. There is no real end result. You know, I think you want to reach a point, maybe take a break, consolidate, and go again. Because I'm telling you, the I think that the reward is in the struggle. Okay, a positive mindset towards change keeps things, uh excuse me, keeps the business moving forward, right? So, you know, I think this is a great way to finish because um I think probably the first podcast I ever did was to we talked about mindset, at least in the first five, we we talked about Mindset from the get-go. And all's mindset is your attitude towards the good and the challenging. Okay? What is your mindset towards building process? What's your mindset towards improving your communication? What's your mindset towards executing more or more efficiently? See, it's all really determined by the six inches between your ears. So this is why, guys, your head is not a storage device per se. It's it's a troubleshooting device, it's a creative tool. And when we cloud it with too much storage, like we are trying to remember too much stuff, then it takes away from that ability to be creative and troubleshoot. So this is why we've got to lean on tools and things that make our life and our ability to execute a little bit more efficient. So my advice is you need to run scenarios in your brain. You need to do assessments and audits, okay, of your current operation and then project forward 12 months, two years, five years, and go, if if I was guaranteed of success, what would my business look like? Because, and then if you get too greedy, what I'm gonna ask you to do now is now what you've got to do is reverse engineer it right back to today and go, right, at the end of this month, I've got to achieve this because that's gonna help me at reach that big goal. See, so you want to set goals, this is why goal setting and deadlines are important. Um, you've got to make sure that they are out of reach but not out of sight. If you set a goal that's too great, you're gonna become disillusioned because all of a sudden you're gonna throw it to the, you're gonna kick it to the curb because it's too hard. All right, let's close it out. Great builders, great general contractors, we don't just work harder, we know that we already can do that. Okay, that's not up for debate. But we work better, we work with better processes, we work better with clearer communication, and we execute at a high at a higher level, at stronger execution is what we want. Stronger, clearer execution is what has helped helps us get the job done. If you want to sit down with me for 30 minutes, go across to elitebusinadvisory.com, hit the book a consultation button. I'll give you 30 minutes of my time, complimentary, just to see what's up, and then we can talk about your options going forward. But I'd love to sit down with you and just hear from you what you do well, uh, maybe what's challenging in your life, and see whether I can throw you something that's going to help you get through the next phase of play. Go build a kick ass business. See you on the next episode. Cheers.