The "Level Up" with Duayne Pearce Podcast
I take on the role of an authoritative voice that fearlessly communicates truths drawn directly from my lived experiences. With a genuine sense of ownership, my insights are free from any hidden agendas – they truly belong to the audience. My stories and journey add remarkable value, the key now lies in harnessing its power effectively to help others.
My purpose is to create a new residential building industry. My mission is to inspire unshakable self-confidence in my colleagues in the industry, empowering them to orchestrate prosperous, enduring, and lucrative businesses that bring exceptional projects to fruition for our clients.
My goal is to foster a deeper comprehension among clients about the identity and functions of builders, redefining their perceptions.
The "Level Up" with Duayne Pearce Podcast
I Won the Lotto: Spending the Day with Duayne is Life Changing.
GET YOUR TICKETS TO THE LEVEL UP EXPERIENCE HERE - https://duaynepearce.com/events/
#139 Getting help early in business separates successful builders from the rest. As an up and coming builder, Mitch Chan from Agathe builders recognises these knowledge gaps and seeks guidance from Duayne in this weeks podcast to avoid the common pitfalls that plague many in the building industry.
check out Agathe builders here...
https://agathe.au/
Check out Duayne's other projects here...
Live Life Build
livelifebuild.com
D Pearce Constructions
dpearceconstructions.com.au
QuoteEaze
quoteeaze.com/Free-Offer.html
GET YOUR TICKETS TO THE LEVEL UP EXPERIENCE HERE - https://duaynepearce.com/events/
I found your podcast only a few months ago when I found that I just started listening to it non-stop. Since then, in the car it's been on. And then in one of your podcasts, your early days, you said you put out the challenge. You said if anyone wants to come on the podcast, you're you're welcome to, but you just have to sit in the seat. It was a bit of a challenge that and I thought like I don't really want to do that, but I thought that was like a lottery ticket right there.
Speaker 2:The fact that you're treating this experience like you've won a lottery ticket, I believe is going to end up being better than you winning the lottery. Again, I take my hat off to anybody that reaches out and looks for help early on, because it means that you're going to set yourself up for success and you're going to avoid a lot of the headaches that a lot of business owners have. G'day guys. Welcome back to another episode of Level Up. We have another cracking episode for you today.
Speaker 2:This one is a little bit different than normal because the guest I have on today has actually reached out and he's actually been driving around visiting some of our job sites with me today and also sitting in the office seeing a little bit of what goes on behind the scenes. So it's been really good. I've really enjoyed it and I think you're going to get a lot out of this podcast, because the guest we have with us today, mitch, is doing good things and he's hit the ground running. He's been building for 18 months and, uh, you're on a mission, mate, you want to learn. Yeah, that's it on the mission to learn. So, um, mate, tell us a little bit about yourself.
Speaker 1:You're, um, you've been in business for 18 months yeah, sure, so, um, I've been in business for about five and a half years. I started as a carpenter and then transitioned into a builder 18 months ago, you're not very old.
Speaker 2:So again, I take my hat off to anybody that reaches out and looks for help early on, because it means that you're going to set yourself up for success and you're going to avoid a lot of the headaches that a lot of business owners have. So what? What's your drive like? What made you do that?
Speaker 1:um, you in one of your older. So I found your podcast only a few months ago, um, and I, when I found that, I just started listening to it, gone, stopped since then in the car. It's been on. And then in one of your podcasts, your early days, you said you put out the challenge. You said if anyone wants to come on the podcast you're welcome to, but you just have to sit in the seat. It was a bit of a challenge and I thought, oh, like I don't really want to do that. But I thought that was like a lottery ticket right there, like knowing that because what I'd started doing started this building company. It was incredibly hard and you don't really you don't have any guidance or anyone to help you. And so I saw someone there who's running a successful business and I thought that's like an awesome opportunity. How could I give that up? And I've got to sit here and do the podcast, which I'm not that comfortable about.
Speaker 2:but I'm really here for the, the coaching, the advice, yeah the learning experience and you, um, I think it's amazing, mate, that you've done it, even though you're uncomfortable about it, because, uh, life is all about getting comfortable. Being uncomfortable, uh, and I think the more you can get used to that, the more success you're going to have. But, um, the fact that you're treating this experience like you've won a lottery ticket, I, I believe, is going to end up being better than you winning the lottery like you've, um, you've spent a half a day today. You've been to a couple of my job sites. You've seen how I interact with the team, um, you've seen what goes on. You've you've been taking notes, you've been asking questions, um, but that information, that and the knowledge that you're going to gain if you go and implement it, will earn you much more than what a lottery ticket will get you. Um, so, yeah, I really take my hat off to you, mate, for doing that.
Speaker 2:And I guess, to give everybody a little bit of a background, is this our third attempt? Yeah, so, um, we've had a few goes at organizing this. The first time we were supposed to do it, I got double booked. I had a conference I had to be at, and then the second time was when Cyclone Alfred come and we had no power, we had to can everything. So yeah, mitch has made his way up. You actually like what time did you leave home this morning to get here? 4.
Speaker 1:So yeah, Mitch has made his way up. What time did you leave?
Speaker 2:home this morning to get here 4.30. Yeah, so 4.30 off the airport, jumped on a plane, I picked you up in Brizzy at 7 o'clock. We headed off to a few job sites. We've done a lot today. Mitch has said to me multiple times this morning is this a standard day? And I've said to him it's actually a bit of a quiet day, it's good, it's, we're just cruising, it's uh, they're just like. I guess it shows you how much you can get done when things are scheduled and organized and you're like I'm sure you may have picked up this morning, like most people around me, like my supervisor, my wife in the office, like shay. Everyone knows their role and what they're doing. So that takes a lot of pressure off me and allows me to to be able to get as much shit as I get done. Mate, tell us a little bit about like. Where did you start Like? Because being a builder wasn't your first option, from what you've told me.
Speaker 1:Yeah. So I finished school, didn't you know, 18 year old, didn't really know what to do. I kind of wanted to be either a cop or maybe a DT teacher. Thought I can't go be a cop straight away, I'd be this 18 year old kid trying to tell people what to do.
Speaker 2:Sorry man, I might be too old. What's a DT teacher? Design and tech. So it was like dick togs or something I've never heard of DT teacher. So what is it? Digital design, design and tech, design and tech.
Speaker 1:Yeah, righto, yeah, learn something new every day. Yeah, it was like the only actual practical um class at school, like it was like the, the kind of building one. Yeah, um all right.
Speaker 2:So it's not teaching people how to wear dick dogs, no, no not at all.
Speaker 1:Um, yeah, and then. So I actually did start teaching first. Um ended up signing up to like a arts teaching degree and it was like a lot of art, history and stuff and I was like, yeah, this is useless. So six months later I changed to criminology to cause I was like I'll study something first and then I can go do policing after that. So criminology did that for almost three years and then, uh, came to the end of it and was just like this is this is not me, like I can't. I hate writing essays. I just can't stand this whole life.
Speaker 1:Um, at the time I was living with my good mate who was doing a carpentry apprenticeship. So I left uni and we would come home from our days and he would like whinge about laboring and the stuff that he was doing and I was just like that sounds amazing, like I would love to do that. So, yeah, left uni and then found an apprenticeship and just absolutely loved it. So I remember our first day we had just poured a driveway and I was just sitting there in the mud cleaning troughs. Um, but I was absolutely frothing. I had more joy than I had any any day at uni.
Speaker 2:So after four or five years of learning and going to uni and stuff you, you're finding happiness in scraping concrete off concrete yeah, that's it.
Speaker 1:Um, yeah, and so the journey in carpentry and building started there.
Speaker 2:Yeah um, and so what's the background? So you like, I like to dig into this, because I think so many people think they should know exactly what they want to do and just hit the ground running. But it really doesn't matter what, how long it takes. I guess the the point is that you, you need to keep trying things until you find something you enjoy doing. That you, you need to keep trying things until you find something you enjoy doing.
Speaker 1:Otherwise, you're going to spend your whole life whinging about it yeah, um, I went to a private school on north shore of sydney, um, and I think doing a trade wasn't even wasn't even an option for that, and I think that is generally a lot of places, um, like, yeah, we don't really promote doing a trade. It's not really seen as something that you can be successful in, so it wasn't even. You know, we're trying to figure out what am I going to do with my life. That wasn't even an option, even though when I reflect now on, like my childhood, it's like this has always been in me. It's like this is what I should have done from the start. In me it's like this is what I should have done from the start. And, yeah, so finishing school did okay in the hsc. Um had some options for uni. Um didn't really like any of them, but just had to pick something yeah, yeah and then, uh, so what you finished your?
Speaker 2:you did your carpentry apprenticeship, did you just did. You smash that out with the same company.
Speaker 1:So I was 21 when I started that, so technically mature age, even though I don't see how that's mature age. But that also makes it harder to find a job because you cost more. But I did manage to find one with an awesome builder, a small company doing renovations uh, it was the dad was the builder and two sons, um, doing the carpentry work. Um, they were incredible. They, they. I'm now listening to like your podcast and stuff. You hear a lot about how it should be done and all the little tips and tricks of carpentry and you know, like, like planting your arises and things like that and that when I listened to those podcasts I'm like, oh, that's all the stuff that they taught me. So I thought this was just the normal, this is the standard in the industry. I only lasted at that company for six months. I didn't really know what happened. I got fired after six months. I think it was because they had a super high standard which was great to learn from. But trying to keep up with them was quite hard and, being very fresh, I definitely couldn't keep up and I think it just wasn't enough for them. So I'm grateful for the experience I had with them, but then I ended up enough for them. So I'm grateful for the experience I had with them.
Speaker 1:But then I ended up that was, I started that six months before I started TAFE and then I started TAFE, so literally I got let go and then I met people and the next day I had three job offers. So it wasn't, it wasn't a big deal, yeah. Then I got another job with a guy who, let's just say, was probably where I am now. I was six months ago, very young and just like giving it a crack, but had a lot to learn, wasn't running a very good business. It was just him and three apprentices and then he was doing things probably not quite to scratch, I could tell, even though I had very limited experience. So after six months I started searching for another job and then found one with a great builder that then I stayed with through to the end of my apprenticeship. That was a really awesome experience as well.
Speaker 1:He another small company again. The dad was the builder who'd been building all his life and then he had two sons that run the jobs and um, really good experience. I got such a wide range of experience from like real big architectural, like big off-form concrete bunkers and um, and then small kind of reno, carpentry based builds, um, and then at the end of that my boss actually unfortunately passed away. He had a heart attack, he was a bit of a smoker and yeah. So that was right at the end of my apprenticeship he passed away and then the eldest son took over and, um, kind of didn't have enough work for me to continue on, so he's like he was happy to sign me off, but it doesn't, didn't have work for me to stick around. So that just naturally meant that I went out and just started my own thing.
Speaker 2:So it's a big move to go from finishing an apprenticeship to starting a business. So you're obviously a very driven person or you've got goals you want to achieve.
Speaker 1:Yeah, I think running my own business was kind of just in my blood. It's from my dad he's he runs a big, he's got an accounting firm and runs a accounting coaching business, um, and it's always been in my blood. I didn't really know what it was until I started running business, um, and even when I started my carpentry business I wouldn't. It was just, uh, self-employed. It wasn't a business really, I was just contracting to builders, yeah, and then it kind of kept growing. I actually did that for about six months before then I hired an apprentice, or maybe it was a year before I hired an apprentice and then I hired another apprentice and then and then I had like three and then but it's getting a bit, you know, too many apprentices yeah, it's hard to manage and puts a lot of pressure back on you.
Speaker 1:Yeah, yeah, and then just kind of doing that, growing that for a while.
Speaker 2:So just contracting to other builders, yeah, pretty much Did very minimal of my work. Yeah, but it's all building character and building experience. Isn't it Like trialing and all that Like how did you go?
Speaker 1:Were the builders you're working for, were they giving you rates to work to? Or were you pricing the work like I was just hourly, so I was just charging my hourly rates and charge the boys out at an hourly rate? Yeah, yeah, very, I think, quite different to your experience. Potentially like it sounds like you created a big business where, yeah, you're quoting for work and stuff like that is very much like there's a lot of small builders that I knew and they, you know, there's a labor shortage and I had all these guys. So, um, yeah, it was just like they were just basically using my guys as their guys and I was just making sure that they're they're busy. Yeah, um, yeah, whilst I was predominantly working for one builder and then I had a few guys with me yeah, yeah, but you but like it's a.
Speaker 2:It's a good thing for a builder to do that, I guess, every now and then, because you're there to take control of your team. So it takes a little bit of pressure off him if you're managing your team correctly. But, um, so where? What was a? You obviously had the passion to continue and become a builder, so were you doing your? I assume you're doing your study to become a builder. At the same time you're growing a carpentry business.
Speaker 1:Yep, so as soon as I finished my carpentry, I just did my builders at the same time. Yeah, straight after did my builders, whilst I was then subcontracting, but on my own. I think I finished the builders course just as I signed on my first apprentice. So I kind of just yeah, did that before, yeah, and then Having a crack, yeah, just kept going with it.
Speaker 2:So what, what? Yeah, what made you like obviously you thought it was winning a lottery ticket. But what made you reach out Like do you have you had some issues or problems in your business since?
Speaker 1:you started yep, so definitely so the transition from a carpentry to a building company. I thought, oh, you know, it's just taking on more work. Rather than just managing my guys, I can manage everyone. Um, and then you know you make more. So I thought you know, that's sweet, let's just do that. Um applied for my license, eventually got the license and then could start taking on bigger and bigger jobs.
Speaker 1:And then I think I've I've made every, every just mistake that everyone makes. And and um, yeah, just what are, what are some of the mistakes? Just not understanding cash flow, not understanding how much you need to actually put on your jobs to make money, not knowing your numbers, taking on too many staff before I've got like the work to keep everyone busy and actually making profit. I think the biggest one is just not knowing your numbers, taking on debt without any consideration. I think when it started I was like, oh okay, you know, I've got one apprentice. I'm making like five bucks an hour off him. Oh, cool, I can afford. You know, I can afford a yard cost me that that covers that. And then I got another staff member and you're making another bit.
Speaker 1:You're like, oh okay, I can afford this and that works for a little while, but then, once it gets big enough, you know you can't keep track of that and you're like, oh, I've paid for this bill, you know using a credit card or something, and you're like, yeah, I'll pay that back later. And then you never do, and then that can keep just rolling over. You keep kicking the can down the road until you sit down and work out your numbers and all like, if work dries up up, then like, then it all kind of hits you. So, uh, just before I found live life build I was I was at that point where work had slowed down a bit and I was starting to realize how much of a shit show I was running and, um, realizing that, yeah, I just don't have much money, or I don't have any money, and um, it's a hard thing to like.
Speaker 2:I wouldn't beat yourself up about it because I've done it. Most people in the industry have done it. But that explanation you just gave is pretty much what happens. You don't know what you don't know. So all of a sudden you're earning a bit more money. You're employing people and you think, oh, I'm making a bit of money out of them or I'm going to make this much money off this job. And it's if you don't know what you don't know. It's very easy to. Whatever it is, like you said, you're making a few bucks an hour off these guys. So you think you've got that money to spend, or whether you've quoted your job and you think, oh shit, I had 50 grand profit in that job. That's awesome, that's going to cover this. But yeah, if you don't know all the other incidentals and the insurances and the overheads and you haven't a lot of people, I feel and I think I had a bit of this as well you know it in your head. You know, yeah, I got a phone bill. It's $90 a month. Or yeah, I got a car payment it's $300 a month.
Speaker 2:It's not that you don't know it, but you're not taking the time to put it on a document, add it all up and actually see what the true numbers are. Because when you it's like when you sit down like I do the same thing now like you, I do like constant reviews with my accounts manager and review what the incoming, the outgoing, the work in progress, all that stuff, and like you look, you go through the list of bills and like, individually they're not too bad. You might have a couple little ones, couple of gram. I have a couple big ones 20, 30 gram, 40 gram, whatever, and like all all of them individually aren't too bad.
Speaker 2:But then you get to the bottom of the page. You're like, holy fuck, 700 thousand dollars. Like, until you take time to document things and see it as a big picture, it can take a long time to sink in and understand. And yeah, where you ended up is pretty much where most of our industry ends up. You're kicking the can down the road and waiting for the next invoice to come in to help you pay for the bills that are already overdue and so that money goes and you've got no money left to pay for the bills that have come in since you got that bill and it can be very emotionally and physically draining, can't it when you're in that position.
Speaker 1:It's because you're like, scared as well. It's like I know that I wasn't making any money, but it's like I don't want to sit down and do the numbers because I was like, oh, like, I know there's going to be a big bill, so you just focus on trying to solve the next problem. It's like, oh, I know this big bass bill is coming in. Hopefully I've got enough to pay for it, but you know, we'll see how we go when we get there. And then, yeah, can you just keep going? And then, yeah, you end up in a big hole.
Speaker 2:Yeah, so, mate, what's so? You might have heard Mitch mention just before. So Mitch is now a member of our Live Life Build Elevate program. You actually turned up to a live event we did a couple of months ago. What do you think of that? Yeah, it was unreal.
Speaker 1:Yeah, the whole thing has been life-changing. I came at such a pivotal moment as well. Just where I'm at in business life, I kind of feel like I've hit rock bottom now and I'm hopefully crawling. Well, I am crawling out now, but it was like at that point, good pick up, mate yeah. That came from.
Speaker 2:LiveLiveBuild yeah, the words you used, but what made you? I do like to dig into this, because everyone's got a different reason and it helps our listeners out. So what made you take that leap to sign up to LiveLiveBuild?
Speaker 1:So I've got a bit of a journey with business coaching. I've had three different coaching experiences and the first one was not very good. The second one was okay, I got some value out of it, and then this one's been unreal, but I was already in kind of the mindset. And then this one's been unreal so, but I was already in the kind of the mindset or I could see the value in coaching and having a mentor, and that also massively came from my dad as well. So he's been a huge factor in mentoring for business wise. But being an accountant it's a bit not as relevant. Business is still very much relevant and yeah.
Speaker 1:So my first experience was not very good at all and and dad kind of told me that after I told him my experience he was like, yeah, I wouldn't go anywhere near one of those because he's like it's a lot of his words, it's a lot of rah, rah makes you feel good but it doesn't actually help you, um.
Speaker 1:And then my second experience was with another kind of building um business coaching business, which was okay, I got some value out of it, but they um, yeah, they weren't necessarily builders, so it wasn't as relevant, like they didn't really know what I was going through or could give. They gave me some value, definitely helped me in the business, um. But yeah, it just wasn't quite what I was looking for. So I was in that space, in that very much mental space of I need a coach, need someone, um, and then actually somebody mentioned the Level Up podcast in their podcast, um, and I thought, oh, I'll look that up, found it, and then listened to one it was. It was you know. I was like, oh, this all is so relatable, it makes so much sense, um, so then I just started listening to it non-stop. And then I heard about the I think the pack challenge came up on my facebook um feed so I um signed up to that halfway through that. I just signed up as a member so how?
Speaker 2:how do you like? How do you take that punt, but like, so, like you're not making money. So how do you tell yourself that I need to do this because most people are just focused on I can't afford it, instead of getting involved and and finding a solution that's going to get them out of the hole they're in?
Speaker 1:yeah, I guess it's probably a a sales pitch from that first coaching, but actually now I'm grateful for because it did push me to. He's like, basically, you can't not afford, you can't afford not to sign up to it. And it's like you know, if you get this coaching, it'll fast track your learning and you'll then, you know, be able to pay off all your debts and you know, get it, get a good business going.
Speaker 1:Um, so having that understanding was like yeah yeah, I don't think at that point as well. When I signed up, I was I was fully aware. I was like I know I'm not doing great and I'm like trying to just do better and better, but I wasn't fully aware of exactly where I was at, whilst now I know exactly where I'm at.
Speaker 2:Yeah, because whether you're a builder, you're a trader, you're an architect, designer, like I just think, like everybody should have coaches, like I've got multiple coaches right now, because for me it's just like why would you not go and spend time and money with someone that's doing or achieve what you want to achieve, Whether it's business, whether it's finance, whether it's investment, whether it's health, like it just sounds like now that I'm doing it, I'm so addicted to it I can't believe I didn't do it 20 years ago. You're learning from people that have made the mistakes that you're going through, that have made the mistakes that you're going through. So why wouldn't you skip all that heartache, skip all that bloody, lost money and anxiety and all that sort of stuff that goes with it, and just go and surround yourself with people that are striving to achieve the same thing as you are?
Speaker 2:It just makes so much sense, but it really does like. It really makes me happy now to see so many young people like yourself that are getting on board with it, because I really think I was a bit nervous about the future of our industry for a long time, but I'm really excited about it now because to see so many young people uh well, so many young people, but also a lot of people that are young in business taking the leap to, to coaching, get help yeah, I actually think the industry's got a really bright future. If you all continue to work on yourselves, work on your business. It's better for everybody, it's better for our industry, it's better for Australian homeowners, it's better for our contractors, it's better for our suppliers.
Speaker 1:It benefits everybody Well it's thanks to people like yourself, creating things like this and, um yeah, programs, that's making a massive difference no cheers, mate.
Speaker 2:I appreciate it. I definitely appreciate you reaching out um.
Speaker 1:So you reached out to me before you joined live life build didn't you like yeah, I think I you know you said that call on one of the podcasts, um, so I was like I'm taking that and then it still stands for anyone that's listening like, seriously, you want to?
Speaker 2:yeah, if you're out there, you want to spend the day with me? Yeah, get in touch, we'll see what we can organize. But, um, the um, it's just like there's no. I was actually talking to a builder. Um, like, with this level up experience that we've got coming up, um, we're going to be doing a lot of marketing and stuff. And I was talking to a builder that I've heard in the industry for a very long time and looked up to and we're going to get him to help out with some of our marketing and stuff.
Speaker 2:And because of the industry that he's in now, and like he was just sitting in front of me with his jaw on the ground, just absolutely blown away by everything I'm doing in the industry. And he said to me like Dwayne, how have you managed to get builders and tradies talking to each other? Because I've been in the industry 36 years. It has never happened. And I was explaining to him, like that that is one of my biggest drivers, like because that's what will change this industry, like we're all in this together. We need to talk to each other, we need to help each other out, we need to give each other advice, um, and we, like you've seen already in the elevate community, like the knowledge experience, uh, vulnerability, like everything that gets shared in our community is off the charts, and like you've only been with us for a few months, but do you think that's contributed to your growth, that you've had already?
Speaker 1:oh, yeah, massively, hugely. I think that, um, for some reason maybe it's the australian tall poppy syndrome or whatever but people, builders, see each other as competition. But, like I think about you know, if we've, if we've got a massive housing crisis and you know trade shortage and everything like there's, there's gotta be plenty of work out there for us. So there's no way like we can be.
Speaker 2:You know we're not competitors like we're, we're actually you, you know helping each other out because and like I've had a lot of collaboration with builders that I know, like you know, we share staff and things like that when we need to and um, yeah, yeah, it's the only way forward, like the whole industry needs to, to work together and, um, like I said, I think we've got a really bright future, not only with people reaching out to get mentoring, coaching and all those sorts of things, but just people wanting to build better, especially like the whole healthy home movement and high-performance homes. It's really just going to help everybody. But let's get back to you and your business. Tell us about the name of your business, because I think it's a cracker.
Speaker 1:Agathe. So I think when I started my carpentry business it was called Kingdom Creations and it kind of just came like I wanted to have a name and I heard this name Kingdom Building and I was like, oh, that's cool. And then I looked it up and it was taken, and then so I just kind of changed it a bit Kingdom Creations. But I was never really that stoked with it. It was just kind of something that came up and then when I was going to change into a building company, I had to change from a sole trader to a company. And then that was the time I was like, if I'm going to change anything, like now is the time. At the time I was going to partner with a good friend of mine, um, and so I needed to formally make it a company so that we could, you know, split it properly and everything. Um.
Speaker 1:So, okay, I want to give this some good thought and I want it to mean something and have some value. Um, so we're both christians, so we wanted to have it some sort of biblical value. So we spent a bit of time just thinking, going over it, and then he opened to this, I think, just like the index in the Bible, one of the first words was agathe, and so the word means in the Bible. It's like God created the earth and you know so it's good. So that's the ancient Greek word there for good, and it means good both in the moral sense but also in like quality.
Speaker 1:So that's what we're trying to strive towards. We want to have a quality product that we're producing but also have good people and you know, bring up, you know, good people, solid apprentices and stuff. A big heart behind the business as well was how the construction industry has, like, not a great reputation, and we don't like the idea of clients being concerned about tradies coming into the house and things like that. We want to create good people where it's like you know they'll happily have you in their house and have you around and stuff like that.
Speaker 2:So that was a big heart behind it, the kind of what do you talk about all that in your marketing and stuff a little bit, we've started to wait. That's. That is the sort of stuff you need to be getting out there, like building that personal connection with people, because that that's that's a pretty strong meaning for the, for a name of a company to like have you sat, have you ever sat down and done like, figured out what your values are?
Speaker 1:uh, we've done a lot of it, not formally, not like we've. We've sat down and like let's list it out and do that. This is probably a good, good thing to do, and I would be sitting down and listing out all your core values.
Speaker 2:You might end up with 20, 30, you could end up with 100, but just keep putting crosses through them and just keep refining a list until you end up with I don don't know four, five, six absolute core values, and I would imagine that those core values are going to tie in with what you just talked about. It's a powerful exercise to do, because when a business can identify its core values and you can use those values in the way you communicate with people and the way you're wording in your documents, that's where you build those personal connections. I bang on about this all the time. A business is only as good as its relationships it builds with people. It doesn't matter. There's no point spending thousands of dollars on Google AdWords and thousands of dollars on social media marketing and new websites and all this type of stuff if the information that you're putting out there doesn't mean anything.
Speaker 2:Um, and one thing that I've definitely learned in my journey like you, you have to do it yourself. Either you have to sit down and do it yourself or you need to sit with someone. That gets it out of you, because if you're paying a marketing company to come up with your spills, to come up with your posts, to come up with your wording. How does that relate to you? It has to be personal, and when you can make it personal and you can connect with people on a personal level, that's the separation between businesses. It doesn't matter whether you're a tradie, you're a builder.
Speaker 2:If you, uh, if, if you're not making I'll put it this simple if you're not making a personal connection, the only difference between you and the next guy is the price. And as soon as it, as soon as the only difference is price, most people will always go with the cheaper one, because you've added no value, there's no personal connection. You haven't educated them on why they should go with you or what you do better. They're just simply looking at the price on the bottom of a piece of paper, and you would probably know that from some purchases you've made over the years. If there's no connection there, there you're only looking at price, and if you're not educated on what's in that price, you're going to go with the cheapest every time. So does it make sense?
Speaker 2:yeah yeah, yeah, um, so what's your, what's your ambitions for the business? Mate like you. So how many? Let's tell? Tell me, tell us a little bit about the business, how many employees you got at the moment.
Speaker 1:Yeah. So at the moment it's like five yeah Ambitions for the business. Back in the day when I first started, I had big ambitions to like change the industry. I saw how, like you know, we got limited um carpenters out there. We and I see a lot of like young guys particularly struggling and not finding much purpose and, um, you know, just end up drugs and whatnot. Um, and I found that like for myself as well.
Speaker 1:I was like, oh, I just found so much purpose when I found carpentry and then, through my early experiences of hiring a few apprentices as well, I was like, oh, more often than not I give someone a trial and they love it and it's like. It's like where, as males like more commonly slot into this position quite well, and I was like I want to create a big business so that I can accommodate that for many people and create a good environment where people are looked after and they're not, like you know, not abused and things like create a nice, a nice place to be and they want to go to and they actually grow and, yeah, a nice place to be and they want to go to and they actually grow.
Speaker 1:Yeah, I think these days, because I've been in a bit of a hole financially, I've lost a lot of that drive.
Speaker 2:So I think it's a good idea to dream a bit more again. It takes over right. It's the most common story in our industry, like that financial pressure can take away your passion, but um, it doesn't mean that it can't come back. Like can you see now from the changes that you've had in the last three months that there's definitely everything's possible?
Speaker 1:Yeah, yeah, yeah, definitely see, it's all possible. Uh, what's challenging is that, um, I've the life cycle of a build renovation is so long, so, like you might meet a client, you spend. You could spend 12 months planning and then you could spend 12 months in construction, and so I'm still in the middle of uh jobs that I know I've signed that like with old problems, um, and so I've, now that I've fixed up the problems, I'm starting to sign new jobs and have better systems, but I'm still, you know, eating the fruit of of the old jobs.
Speaker 2:So yeah, and that transition period is the hardest time because you've learnt to know your numbers, you've learnt to price things better. So new jobs you're looking forward to because you're going to make good money. But then that sort of can get a little bit pushed to the side because in your mind you know that jobs that you've already got on you've priced the old way. You're not possibly going to make much money or any money out of them. So but you've got to keep pushing through that and just stay focused on what you know now and and just keep improving because you'll the new jobs will make more money and that becomes the focus. So don't lose you. If you have that passion to create that big business so you can house apprentices and bring that joy to them like you had. Man, keep going for it, get that passion back.
Speaker 2:It's still there I can tell from driving around this morning with you, you've still got a lot of passion. The um, I just look, you asked me this morning, um, you've asked me some questions this morning that I that has have made me laugh, because I'm like I'm no different to to any other person out there, like I'm just I've been through the shit and I want to. Everything I do is just to, I guess, help people avoid going through some like I've been through shit that I wouldn't wish on my worst enemy. I've lost a lot of money, like all sorts of things. But, mate, if you can spend the time and the money to jump on a plane and you're willing to spend the day with me and drive around and take some notes, like fuck, like good, like I just think it's fantastic, like why wouldn't I give that to people? Like you haven't stopped me from doing anything that I was meant to do today.
Speaker 2:The phone rang like you, like I, just like I've. It's like you're just a shadow sitting there like um, but just seeing hearing the questions that you've been asking, um, and just seeing the smile on your face and seeing you writing down notes, like mate, that's that's made my week right. Um, so yeah, I really appreciate you taking the time out to spend time with me. So, um, so you, you've got some questions. You wanted to ask me some questions while you're here, so yeah, let's get into them.
Speaker 1:Uh, do you do bonuses with your staff?
Speaker 2:uh, we do, um, we've tried all different types of things over the years. Um, it really like people have to add value, but to me that's all. It is like they have to be adding value. If they're're not adding value, then there's no point giving bonuses. A bonus can be anything. A bonus can be a pat on the back and a hug and well done, mate, that's awesome. Good on you, you've done really well there. It could be take out for a lunch. It could be um, give them some hours off but still pay them their whole um wage. It could be we, I do all sorts of things.
Speaker 2:Okay, I've, like last year, quite often I would turn up to sites. I just had a pocket full of 50 bcf vouchers and just randomly I would say, hey, mate, like since I've been here last time, it's awesome, you've done really well. Here's a voucher like. And then we've gone to the other end of the scale where we've paid for family holidays, like I'm talking 10-15 grand we've. We've given people cash, um, like all sorts of things, and honestly, I feel like the the best results come from the smaller bonuses that are done more regularly, like those vouchers I gave it last year like some of the boys were absolutely stoked about that, like the fact that it was. It was literally like just pulled out of the pocket. Here you go, mate, like and a slab of beer. Like not so much these days, we don't do it as often as we used to, but like occasionally I'll just say to the supervisor hey, mate, like um boys have done really well this week like on friday, just pick up a few slabs of beer, put them on the credit card and just drop them off to the job site.
Speaker 2:So I think bonuses can be a really tricky one. I don't think people. I was just brought up, I never expected a bonus ever and I've talked about this a lot on my podcast and I still see it now. I talk about it all the time and it still doesn't go through to people that work for me. I used to give my boss like gifts because I appreciated my job. I think the whole world's changed. Like everyone just fucking thinks I'm living an expensive lifestyle, you're my boss, you need to pay for it. Um, whereas every job I've ever had, christmas always got my boss gifts, whether it was a bottle of alcohol, whether it was a $50 or $100 voucher. I've always respected that. I have a job To me, I'm grateful, I'm lucky. So, yeah, I don't know.
Speaker 2:I think bonuses are a funny thing. I think anyone that goes through life expecting bonuses is an employee that you don't want to have. Bonuses are something that come when you're, I don't know like. We had a young bloke, lockie, on the podcast not that long ago and he put it really well you have to prove yourself. If you want bonuses, you need to prove that, like you need to prove you're worth it. You need to prove that you you don't need your handheld. You need to prove that you can do the work like um. So yeah, I don't know, I'm pretty. I think I'm pretty, probably pretty hard and pretty old school when it comes to to bonuses. I definitely don't give them out lightly.
Speaker 1:You, you have to really impress me to get a bonus yeah, I guess my idea is just trying to come up with way ways of motivating the guys to work harder. Um, not that they you know they'll work really well at the moment, like I'm happy with how they work, but it's like, oh, if it was a way I could motivate them to to just go that much harder. Like is there, is there a way I could do that? Like I've had ideas like um, because my project managers are tracking the cost. It's like, you know, if you can, if you can beat the, the cost that we've put in here, I'll give you what x percentage of of what we make and stuff like that.
Speaker 1:Um, I haven't been that successful with it. Like one of the guys even said, you know, it doesn't really motivate him. He was like, you know, save your money because it's like you know he's he's he's just happy to come to work and, you know, have a, have a good day at work and and he wants to go home and can forget about it. He's not really motivated by money. So it is true, like you know, it's just a waste of money if it's not going to achieve its purpose of motivating someone.
Speaker 2:So yeah, I was just kind of curious if you had ideas of I think there's so many parts to that like it's not just as simple as giving someone something. Um, like I said, my personal belief is if you've got a team or people in your team that um expect bonuses and pay rises all the time, then I think you're attracting the wrong types of people. I don't believe that, as a boss, like people should expect you to fund their lifestyle Like I've never done that. I think there's a really awesome guy I follow on social media. Now I'm trying to get him on the podcast Jack. I think it's Jack Henderson or something. He's a real estate guy. I follow on social media. Now I'm trying to get him on the podcast, jack, I think it's Jack Henderson or something. He's a real estate guy.
Speaker 2:Yeah, Jack Henderson and I just think he's so good he tells us how it is. I agree with everything he says. So do I. And look, I definitely like there's no cost of living problem, like it's a people's lifestyle problem. It's as simple as that. Cost of living will continue to go up till the day the earth ends. The reality is these days that people want two new vehicles, they want the new house, they want to fill the house with all the new furniture, they want to have the latest phone, they want to go on all the holidays.
Speaker 2:I don't know, I'm pretty old school at that. If you want something, I'll put it this way. Like even me as a business owner, like I, I can't just go shit. I want that, I'm gonna, I'm just gonna get that money. Like I have to do something with the business to make it earn more money so that I can do that. So like when an employee thinks that they need a pay rise or they need a bonus, like that money just doesn't come out of thin air. Like it physically has to be paid for. It has to be earned by the business to do that. And like one thing that does get under my belt a little bit is like I, I feel.
Speaker 2:I do feel sometimes like I I there's so much more shit I could put on social media that I don't, because people don't need to know my personal life. And another reason I don't put a lot of stuff on there is because if people see you doing well, they expect more, but they don't know what you're doing behind the scenes. So when you start investing in houses or you start buying new cars or whatever the case may be, they just assume that it's because the business is doing well and making more money. They don't see that behind the scenes, like you haven't been paying yourself much money, you've been saving up, you've been investing in other things and you've created wealth to be able to do those other things, because wealth is not created by what you earn. It's how you spend it. It and it took me a long time to understand that and it it changed my life when I figured that out, because for a long time I did live my life just thinking that I have to earn more, I have to earn more, I have to earn more. It's nothing to do with that. You can have someone that earns a hundred thousand dollars a year. That is a multi, multi millionaire. You can have someone that earns a million dollars a year, that is a multi, multi millionaire. You can have someone that earns a million dollars a year, that is almost broke. It's all to do with how you spend your money, what you spend it on. Um I think we touched we had a quick conversation about this morning like if you cut back your wants, like you really don't have to work that much, like you're happy to drive around with an old car, happy to live in a just a normal house, like I think the word average needs to be thrown out like live in a normal house, have a normal car, have a normal life. You don't have to have all the shit you see on social media. So back to the bonus thing.
Speaker 2:But a lot of the time I see bonuses ruin businesses because, um, like you take a salesperson, for example, like if they're working on a, a commission or a bonus type scheme, they're going to just talk shit and talk rubbish, basically to get the sale, so they get paid and ultimately that's attracting the wrong type of person or the sale to the business or whatever it is they're trying to sell um and same. And actually I saw a lot of this when I had my carpentry business. I would quite often, um well, I started out saying to the team so we would have I've talked about this a bit before like, occasionally, we would have say 16, 18 might have 20 carpenters smashing out a big set of units or a big childcare center frame or something. And so I'd say, all right, guys, um, if this frame is tied down, braced, finished, ready for a frame inspection, um, I'll give you all 200 bucks bonus on friday. And so 200 bucks doesn't sound like a lot, but when you times it by 20 guys, like it's a fair bit of money. Um, and so I did that.
Speaker 2:And then the boys would run around, they'd get it all done, and then we'd get the engineers inspection and they'd be shit wrong, and so they'd expect their bonus. But then I would have to be paying them more labor to finish the work that should have been done. And it took me a little, like it took me a while. We kept doing that because I was like shit, the work's getting done, going all right.
Speaker 2:But then I learned I've got a, I've got to add to that. So then it started being well, righto, guys, I'll give you 200 bucks on friday if the frame passes frame inspection, so adding another step in there and it was simple. And then that made them. They got it done quickly. But it also made them pick up their quality because just for that one step, by adding in that one comment that it had to pass fire inspection if it doesn't pass fire inspection, no one gets a bonus. So not only did it help the quality pick up, it helped the team work together, because if one, if one of them fucked up, they didn't do their part. Everyone missed out. So everyone was communicating with each other, helping each other out, telling people how you got to do that over there, like.
Speaker 2:So I think bonuses are good but you've really got to figure out a structure and you've got to be very clear, um, on setting expectations. I personally believe now the best bonus you can give anyone is advice, and that's what I really try and do with my team a lot now and my team are making some pretty big headway with it. The ones that run with the advice I give and implement it. It's no different to you coming to Live Life Build or someone going to a training thing. Unless you implement something, it's no good. So the team members that are reaching out to me like. I got one team member in particular that has an interest in investing and property, and so we've had several conversations about how I've invested. I've put him in contact with my broker and a few people that I deal with, and that's been the best bonus he could have ever gotten, because he's actually been able to buy his first investment property. So I don't think a bonus should always be related to dollars.
Speaker 1:How do you show your markup on a proposal? So is it, you know, worked into each item line, or is it just at the bottom? You know your builder's margin. Your markup shouldn't be anywhere, mate, so you just have a final price, then final price and gst amount. So that's the only like dollar figure you have on there.
Speaker 2:Yeah, okay look, I don't care who the clients are, what the architect says, what the contract says. There is absolutely no reason whatsoever that a client, an architect, a designer should see or request a builder's margin markup, whatever you want to call it.
Speaker 1:It's no one's business.
Speaker 2:There's no way of like. It means nothing.
Speaker 2:Yeah, it doesn't oh yeah, like yeah, because the thing is as soon as they. Unless they know what's in it, it means absolutely nothing. So it doesn't matter if it's 10, 20, 30, 40. As soon as it's on there, whoever want, whoever is requesting it, is going to compare it to another quote, and so you might have one builder that puts 20, one bill that puts 25. They're going to go straight to the bill that puts 25. Oh mate, why? Why is your margin so high? We've got another bill that's put 25%. Oh mate, why is your margin so high? We've got another one that's 20%. Because people only see the figure and the figure means absolutely nothing unless you know what's behind it.
Speaker 2:The guy that's putting 20% might not understand his cost, might be running a shit show. The guy that's put 25% might understand everything in his business and he knows what he needs to cover his overheads. The guy that's charging 20 could be still on the tools and doing all the admin work himself. The guy that's 25 could have a supervisor, could add admin staff, could be renting an office space somewhere, could own an office space somewhere, like who cares? A markup means nothing to anybody and it's. It's one thing that really frustrates me that people think they even like. I think it's disrespectful. Um, I don't think it should ever be requested and I think any builder that gets asked to list it or document it or show it on their proposal should be walking away from whoever like the client, the architect, straight away and going finding work elsewhere. But that's that's, that's my view, that's how strong I am on it. Like, walk away from the job, they're the wrong client so do your uh proposals basically have?
Speaker 1:like uh, because you know the a common thing is like oh, can you give me a bit more of a breakdown of of this? Like our proposals are very detailed and like you know you've got but everything's um broken up so you know, detail.
Speaker 2:Detail should be scopes of work, detail should not be line item costings. Yeah, okay, even line item costings. My, my personal opinion and this applies to tradies, plumbers, sparkies, builders, I don't care anybody you should not be giving line item costings. The only costing you should be showing a potential client is the final figure and the gst amount that's included in that figure. Only other pricing they should see are allowance items. So prime cost for visual sums, like I've educated all my trades on to do it like. So the the. When I get a quote from the plumber, for example, the only cost that he'll break down is if I've asked him to, so if it might have some specialty pumps that we've got to buy, or it might have some, uh, might have had a hydraulic engineer involved and there could be some, um, civil works or something. So I might get him to break it down into stack work, rough in, fit off for one price and then civil works, another price, things like that. I don't expect anyone to give me a breakdown, because it means nothing to me and I really it really gets under my skin. I don't think that clients, architects, designers should be asking for it either, because it means nothing because as soon as soon as you show a client light item costings, they just can pick one item. It can be anything. They pick painting. You might have 45 grand for painting.
Speaker 2:So the thing is, when you show someone light item costing, they will pick out the things that they personally feel are too expensive without having a clue about it. So they might go through your proposal. So you've got 45 grand for painting. And in their mind they'll be thinking holy shit, like that 45. It can't cost 45 grand to paint my house. That's ridiculous. And so they'll pick up the phone. They might ring a painter, say hey, much. Hey, mate, I've got a three bedroom queenslander. Uh, what do you think it's worth to paint? And the tradie on the other end of the phone is running a shit show of a business, doesn't know how, it doesn't have any systems or processes, said to him oh look, the average queensland is 35 000, without even knowing it or looking at it. So straight away that homeowner will come back to you. Go, I found a painter that'll paint my house for 35 yeah, and so that that's the can of worms.
Speaker 2:You open up, yeah, and look, even if so, my like, I would never get myself into that situation. But if you're a builder out there or a trader out there that does this type of thing, you should be learning from this. Don't, um like, go back to the client, say, okay, sweet, like, get them out to site, tell them I want to meet them here, we'll walk around the job, we'll get a quote. I guarantee you, once they come out to site, it ain't going to be 35 000. Once they walk around the job, they see the plans or whatever the case may be, it won't be 35 grand anymore. On top of that, like, a builder has generally built a relationship with these trades, so it's not just about the price, it's about, over time, you've set expectations.
Speaker 2:You've the painter knows what you want as a builder. They know your standard. They know how many, what, how many coats you want. They know what sort of primers you want. They know like my painter, for example um, like, there's always extra on top of our painting and what the painter gives us, because our, our team, coat everything before we lay decking. We coat it twice the whole way around so that when the painter comes he's just got to finish the top of it off, still put two or three coats on the top, but the timber's coated the whole way around it. Um, any pre-primed timber, it's all got to be prepped, like the.
Speaker 2:The priming that comes on pre-piped timber is only there for transport. You've got to prep it, you've got to prime it. So we prime everywhere the painter won't be able to get to. Um, our painter, we paint the underside of all of our decks black. So that's just a standard we've set. So our painter allows for that. So when a client sees line item costings and they pick something out that they think is expensive and they start asking questions if they don't have the relationship with that trade and they haven't set all these standards and all these expectations, the pricing is never going to be right. They're always, always going to find a cheaper price. And then you're going to have to waste your time educating them on all these things, meeting extra trades, and then they end up going with the cheaper trade and then you're the guy that's on site that has to deal with the shit job yeah, nice, good answer only show a land on signs mate, the only the only.
Speaker 2:If you're a builder doing a job for clients, the only other costings a client should see is items that they have to make personal selections Only show a land of signs mate. If you're a builder doing a job for clients, the only other costings a client should see is items that they have to make personal selections on. So prime cost for visual stamps.
Speaker 1:This is a concept that I've heard come up a few times, and it could be a massive thing that I'm missing, or it could just be a thing that, but this idea of a contingency in your proposal do you do that, or?
Speaker 2:no, no, I mean it's look, it's something that I've. I think I think clients should have it. It's something I've never, ever put on my jobs, um, even back in the day when I was running a shit show like. I've always taken my job really seriously and I think the PAC process has definitely helped iron it out. But to me, my personal opinion is, whether you're a trader, you're a builder, designer, architect, if you're taking your job seriously enough and you're putting in the time and the effort to review the documents, price the documents, work everything out, create scopes of work and price everything accurately, then there should not be contingencies. Because my thing with contingencies always been most builders are putting it in but they're not telling the client, so the contingencies ultimately just getting chewed up with all the other shit that they've priced wrong. But for the odd builder out there that prices things right, do they get to the end of the job and go hey, here's 100 grand back because I had 100 grand contingency? I think it's a very sneaky way of operating. Um, so for me, the only way a contingency should work is that there should always be a discussion with a client that you should have a contingency for things that could possibly go wrong or you might change your mind on things. And so in my business, like we've gone back and done a full review. We've collected, we've checked all our data and we've actually created a huge spreadsheet on every job we've ever done how, what percentage it went over the contract price before we were doing the pack process. It was a shit show like there was. It was quite often because of amount of variations. They were a long way over since we didn't been doing the project, the the pack process. Our jobs are only going over contract value by I think it worked out average like I think it was 2.4 or 2.7 percent or something, and most of that's client led, uh, requested, variations. So I just have a conversation with clients now because it always comes up and I just and we've got two examples and I just basically say to them look, if it's a new build, it's completely up to you. I I would recommend you have some sort of contingency, maybe two and a half to five percent um, because we could still have latent conditions that unforeseen at the site, that things that are unforeseen at the um, things that are unforeseen at the time of signing the contract, buried in the ground or whatever um, or if it's a renovation, I generally tell them look, if really probably should have five to seven percent up your sleeve because it's an old home. You never know.
Speaker 2:Like we've done our investigations, we've found, we've already found some things, but um, like I always use asbestos as an example like it's not uncommon when you're stripping asbestos that there ends up being a second layer or third layer that wasn't discovered when you're stripping asbestos that there ends up being a second layer or a third layer that wasn't discovered when you did your site investigation.
Speaker 2:Or we've had multiple jobs where we send the asbestos guy out during the pack process. He does his samples on the floors and things he like. We've had one recently where he was confident there was only two layers on the floor, um, but when they actually started doing the job there ended up being four layers. There was like underneath the first two layers there was a layer of compressed sheeting, but when they pulled the compressed sheeting up, there was actually a layer of um, fibrous asbestos under that, which is really bad, and there there obviously was a variation for that yeah, we had sheets of asbestos stuck to the underside of a slab so once we pulled, pulled it up, we discovered it and then it's stuck to it, so you've got to pay for the whole slab as asbestos.
Speaker 2:Yeah, so I think contingencies should be in jobs, but they shouldn't be the responsibility of the builder or the architect. It should be just a discussion that the clients may have made aware of that they shouldn't stretch themselves to their very last dollar and they should keep a little bit up their sleeve.
Speaker 1:I guess a follow-on question to that is do you ask for proof of finance 100%?
Speaker 2:Yeah, 100%. And I guess for anyone that, look, I don't know if I'm pretty sure all contracts do it. Up in Queensland here we use the master builder's contract, so it actually states like in the contract that the clients show proof of funds. So we stipulate that clause. It's part of our contractual obligations before we even start on site. So the usual thing, showing all your property, identification, showing that you own the, or validating who owns the property, whether it's a husband, wife, company, whatever, but definitely proof of funds, and we get all sorts of things.
Speaker 2:Um, I just have a conversation with our clients on that one and just say, look, that's not one that has to be emailed to the whole team like that one. Just email it to sharon, our accounts manager. She's the only one that needs to know it, her, and I'll have a conversation about it. It's completely confidential, but we just need to know that at the time of signing the contract the funds are available to cover the contract amount. So we ask for that, mate, even if it's finance, because, uh, like, people can't get finance without putting some sort of deposit or having to pay a certain amount themselves. So even if, if the job's financed, we still ask for proof of funds, of the amount that the client has to put in.
Speaker 2:And we get proof of funds in all different ways. We get people show us their bank statements. We get letters from bank managers. We get copies of statements. We get people show us their share portfolios. We get people show like we've had a lot of wealthy clients, um, show us the value of their property portfolios, like all sorts types of things.
Speaker 1:But if you're a builder out there that's taking on jobs and you're not requesting to see proof of funds, like seriously you, you have to start doing it yeah, nice I guess, like if someone shows you their share portfolio, you're taking on a bit of risk because, like what happens if their shares dip whilst you're, you know you've got a progress claim coming up and yeah, good, good point.
Speaker 2:So we've had that. We've had multiple, um, wealthy clients share portfolios, um, so, yeah, obviously, so, generally, if it's someone showing us shares and that's how they're, they're funding the job through sale of shares, um, and this has happened on one job, um, I'll get to that in a minute. So what we do is we actually ask for proof of funds every time we submit a draw. So every time we submit a draw, um, we ask for proof of funds to fund the next. Or we say, oh look, the next draw is going to be roughly this like show us proof of funds again. There's only been a handful of jobs that we've done it for every draw, because most clients you build up a relationship and you can see they got far in excess of what the job's worth.
Speaker 2:But we actually have had one job where the share market did crash during the job and he it was pretty tight as it was um, and he basically came back to us and said, oh look, duane, um, I'm just gonna have to do sort my finances out because I I don't like they've fallen and I don't have enough to fund the rest of the job. And it was like he was coming back to us to sort of for us to say, oh yeah, no worries, we'll just fund the job till you figure it out. And I don't think he was expecting that. We went back to him and said, oh, that's no drama, we'll just put the job on hold until you can afford to pay for it. So, again, sticking to our guns, uh, being tough, like it's not my fucking job to fund your house, um, and so we put the. We basically said that to him like, if you can't fund the next draw, um, we'll basically finish up this week and we'll put the job on hold. It's easy for us to do. We just follow the contract. We stipulate that the, the owner, is unable to fund the rest of the project, um, and yeah, he turned around. No, no, no, no, I don't want that, you need to keep going. And um, basically, within I think it was two weeks, he'd been out seeing a broker refinanced some things and yeah, was able to get the funding. So I think that's another thing.
Speaker 2:Like, as a builder or as any business owner, like, you've got to push back on your clients. Like, don't get caught in situations where the client's making you feel guilty because they can't fund what they've requested they want. That's not your problem. They've asked you to build something, they've asked you to supply something, they've asked you to finish this project or do something for them, so it's their responsibility to pay for that. So don't get stuck in these situations where you're feeling guilty because you've suddenly got a client putting it back on you that they can't afford to pay for what they've asked you to do. So, um, be tough, stand your ground and don't be afraid to put a job on hold. Like it might sound a bit tough and a bit blunt, but it there's actually quite a few occasions where we will email a client and say, look, if this doesn't happen or you can't do this, then we will be putting your job on hold, and that makes them sort their shit out real quick.
Speaker 1:Yeah, that's a big thing that I've been learning lately is with cash flow. And when I started and it was only recently that things changed. But when I started, you know you just got like one main account for everything. Cash is coming in, cash is coming out and you're like, oh yeah, I'm doing all right, there's cash in the bank. But if you haven't planned out your draws well enough, then you know you're either cashflow positive or negative, and typically a lot of.
Speaker 1:Before I was always negative and you're having to use like an overdraft or something to fund that. But now I guess what I've realized is that like I need to plan that out so that it's cashflow positive because the client needs to fund their job. I can't be funding the job for them because then something happens and they can't afford to finish job for them because then something happens and they can't afford to finish it for some big variation. Then like I'm stuck and I've got to pay for it now because I've already paid for stuff. But, um, so how, how do you do that? You're, uh, planning out your I think you said in a point every. You plan it out every 21 days. You kind of figure out what would be. What would you need for that the next 21 days, and then that's the year.
Speaker 2:Again, it's something that, as builders, we should be pushing back on. So we're in a position where we will walk away from a job if they don't fund it the way that we want it funded. And we're no different to everyone else. We get pushback from banks all the time. So I'm educating the client on our payment process right through our PAC process before we even go to contract, and I'm just constantly like they probably hear it a dozen times before we go to contract that how our progress rules work, what our expectations are Like.
Speaker 2:We use a master builder's contract, so we only use option b or c. So option b is custom draws, which we set um, and then option c is um. Like we use 21 day payments. So, uh, right at the moment, um, right at the moment, five of five out of our six jobs are all just 21-day payments. There's no questions asked. And the way we get around that is we give people an example of what our draws look like. So every time we put in a draw, it's scheduled out and we list exactly what deposits have been paid, what work's been done on site, what materials have been delivered to site. They know what they're paying for and we basically charge them for that, plus labor, plus our overheads, plus our company profit, and that's our draw for that 21 days. I reckon it's the most honest way to run a building business because we're getting paid and covering everything, we've done everything, we've ordered everything, we've all the work that's been done and the client's not paying any more. But if it is a draw where the client isn't funding it or there's finance involved and they'll only do the option B and we have to schedule the draws out, we will have a lot of draws. So we still work the draws out as if we're getting paid every 21 days. Occasionally it might be a month. So we still work the draws out as if we're getting paid every 21 days. Occasionally it might be a month. So I'll work the draws out, I'll go through my proposal and I'll sit with my accounts manager and we'll add up the work that we've scheduled in that period of time and we'll work out the draws to be that roughly that percentage, so that it's covering it and it works really really well, so well.
Speaker 2:So and again, we're prepared to walk away from jobs. So we've had multiple jobs in the last 12 months where we've educated the client right through the pack process. They've got all their pre-finance, they've got everything going. They're just waiting for us to give the contract and the final set of plans so they can finalize their finance. And they'll get an email from their broker or the bank saying we're not accepting this contract because we'll only do option A, which is like five draws or six draws or something.
Speaker 2:And our standard response is now that, look, we're really sorry but we will pull out of the project if that's the case and again it might sound blunt, but it's my business I'm setting my standards. I am not going to have a bank or a homeowner set expectations how I should run my business. That's not how like. That is not how a successful business operates. A successful business operates by everyone contributing to the standards that I want to set. So we just send that email back and we basically just tell them look, we will not move forward with the project. We are quite happy to walk away because it's not worth the stress, it's not worth the financial pressure on our business to run a job like that. And I'm very blunt with them. I just tell them look, as a successful business operator, I cannot operate a successful business under that contract write a successful business under that contract.
Speaker 1:So does that mean you like you? I guess you've got the deposit first and that kind of access funding for that first? Well, it's essentially a buffer because, uh, if you're doing it every 21 days and basically charging for what you've uh had to spend in the last 21 days, for that 21 days you're funding that. So I guess that can come from the deposit, or then well, the deposit's always up here in queensland.
Speaker 2:The deposit covers the home or insurance. It covers the q leave um. Quite often it'll cover a few deposits on things we have to pay early um to put on hold, but you should always be ahead like so yeah, the deposit is basically building up a little bit of a buffer so that you're always constantly a little bit ahead.
Speaker 1:But that's how you get good cash flow in a business but yeah, so, but you do have to basically fund that 21 days because, yeah, like you know, you might get your draw and then next week you've got to pay a deposit for windows or something, and so you've got to fund that until yeah, but that's, that's the beauty of 21-day draws.
Speaker 2:We've got a job or two jobs at the moment. One job is a good example. So we've got one job that the windows won't be ready for six months. The windows are, I think, off the top of my head, like 187,000 or something, and it's with a supplier that we've never used before. It's a new product and I'm very keen to use it. The client wants to use it, but because we haven't got a reputation there, we don't have an account with them, so they want a 50 deposit straight up to sign the order. So we've done that. In the last few weeks we've had to sign the order. We've we've had to pay 50% deposit. So because we've got a draw next week, we'll be getting that 50% straight back. So that's the beauty of 21-day draws You're never too far out. You're always claiming what you're having to spend in that time period. How do you?
Speaker 1:keep track of knowing exactly what you've spent for that job for the last 21 days.
Speaker 2:Easy as mate. Everything should be entered in your accounting software. So, look, I get it. Smaller businesses that don't have admin and accountants and stuff. It's a little bit different but, believe me, it is something that you have to spend the time or you need to invest the money to hire someone to do it, get a bookkeeper or something. So, look, we've got a full-time accounts manager in our business.
Speaker 2:Every week the bills are coming in and they're getting entered into our software.
Speaker 2:So every single Tuesday I can sit down with her and she can just change dates. We can just pick a period and any invoice at all that's coming in that period, we can see what that job's cost. So, yes, we did it on Tuesday this week and like, literally, because we had a draw to do, and literally she'll just put in the dates from the last draw to this draw and it tells us. So the only things that we have to add on to that is if it falls in the middle, because we pay our team in fortnightly. If it falls in the middle of a pay period, then we just have to do a quick estimation of how much labor our own team and how much supervision's being spent there and just add that onto it, because we won't get those figures until the following week when the boys put their time sheets in okay, yeah, because I can see like I've got um job management system I can see how it would work for because, yeah, every time bill's coming in or timesheets go in it gets logged straight away.
Speaker 1:So I can, I know exactly where I'm at um, but I can't like pick. You know the timing, like you said, but I guess you know I can see how much I've drawn so far. So it'll tell me total, how much have I spent so far, and then minus off what have I claimed, and then that would be 21 days.
Speaker 2:I would like I don't know, we just do it in our accounting software, but you should. I would imagine you should be able to do it in zero, like most accounting software is. You can pick a time period and yeah, zero will work, I guess.
Speaker 1:At the moment, though, it's not organized so that, um, oh, it is. But if you haven't got it set up to do it, honestly, it's not organized so that, oh, it is, mate if you haven't got it set up to do it honestly.
Speaker 2:It's one of the most valuable things you can do in your business. You should, at any point in time, be able to look at your accounting software and know exactly where your job's at. If you're entering all your incomings regularly, that is how you ultimately get financial freedom from your business. You need to be able to look at every job once a week and know exactly where you're sitting, what's under, what's over, what you need to adjust, what's left outstanding all those types of things. We had a good conversation about that this morning, with being able to move things around and check on things.
Speaker 1:Yeah, yeah Cool. Do you adjust your pack fee depending on the job?
Speaker 2:uh, occasionally. So it's no different to building the house. So when we do our pack process, which is our paid as a consultant preliminary process, we don't go into that agreement generally until the second or third meeting with the client. So the client has to make it through our inquiry form. They have to meet our criteria. Uh, we need to. Once they've met our criteria, we, we make the call.
Speaker 2:It's a job for us, we'll have it, I'll go and have a meeting with them, um, and then again get a feel like, if my guts is telling, if they're pushing back on things, if they're questioning what I'm telling them, then it's, it's not a job for us. I'm not going to spend three months, six months, two years, my life, trying to convince someone like I want someone that believes in what we do, believes in what we deliver and we're going to be able to work well. So from there, if they want to move forward, if it's a good fit, we'll generally have a meeting with the building designer, architect and we'll all meet as a team. That's generally the third meeting and then from there, by that point we've got a scope of works off them about roughly what they're wanting. We've got a project spend amount out of them. We've had a meeting with the designer so we sort of know which direction the job may be heading whether it's a new build, renovation, extension, and then we'll prepare a scope of works based on that and adjust our fee accordingly. So I would say 80% of our jobs are just a set fee. So our standard fee now, I think, is just over $11,000, and then our highest one to date, I think's been close to twenty thousand dollars, and then we'll lower it a little bit to like six, I think six, six, sixty or something is one of our standard ones, and that's literally if it's a backyard pool or something like this, it's not a full job, but, um, pretty much most jobs are our standard fee. The only thing that will make us adjust it normally is if there's additional, but we've got one at the moment that we've. We've put up higher because there's a lot more site investigation. It's a really poorly built home that they want to do a renovation on. There's a the with the um through the, through the um initial site meetings. Um, just by looking around the site before I left, I picked up that the neighbors. I thought the neighbor's fence was wrong, so, and it's turned out it is, but we're able to make the call that we're going to have to do a few more site visits. We're going to have to get a survey in. There's going to be additional site visits to pull string lines and identify things. So we up that price because I'm going to have to be outside. I'm going to have to get probably my supervisor or construction manager out there. So you've got to adjust your feed.
Speaker 2:It's no different to the building. Like a building has a scope of works. Your preliminary process needs to have a scope of works. So we give our clients a full scope of works of what we're going to deliver in our preliminary process. So how many site visits, how many design meetings, how many supplier visits, how many rounds of costings, like it's all detailed out and then it's also besides adjusting our fee to suit that scope of works. We make it very clear that if that scope of works is exceeded, there will be hourly rates for additional meetings or my time. So yeah, you've just got to set expectations.
Speaker 1:Be very clear with people so how does your process work? From someone jumps onto your website, they fill in an inquiry form, then what happens from there till you start like they've signed a preliminary PAC agreement?
Speaker 2:Mate, it's. Look, we I'm not afraid to talk about. Like. One thing I say to everybody like social media is an incredibly free tool, so use your social media to talk about your processes. So obviously, I talk about it a lot on my own socials. I talk about it a lot on DPS Constructions. We do it a lot with live life build.
Speaker 2:So if someone makes it through to us and they don't know that we charge a fee, like it's very, very rare. Most people know, before they've even made contact with us, that they're going to have to pay for our process. But if they don't, um, we have an inquiry form that they get sent out. So they go on our website, they send us their details, we send them an inquiry form. We've actually got an embedded video. So when they get sent an inquiry form, there's a three or four minute video there and it's literally just me explaining our process and letting them know that they're going to have to pay for it. And, yeah, we basically, once I send that information back, we qualify them.
Speaker 2:We're choosy on what we, what jobs we take on. So and I think this is a really important part for all business owners, tradies and builders like you don't have to take on every client, and the harder you push back, the better your business becomes, because every job that you say no to opens up the door for a quality client. And so our inquiry form is our first time-saving strategy. Like, if they can't number one, if they can't take the time to fill out our inquiry form and they don't respect that process, I'm not going to work with them. Like if they think their time's. Like we have the odd client that will send an email back saying I don't have time to fill out this form. I just want to talk to Duane. You're not the client for us. You don't follow our process For me straight away. That's see you later, because they're already showing me that they don't respect my time or my business. They're valuing their time. So I guarantee any builder that has a client like that is going to be the client that is going to be ringing them after hours, harassing them on weekends, changing things, because the client's setting the standards, not the builder, and so they've got to make it through our inquiry form Quite often.
Speaker 2:There can occasionally be a bit of backwards and forwards there. So because we actually we know from reading what they put in their inquiry form that a lot of people don't understand what we're asking for. So three of the things we ask for is project spend, scope of work so what they want and the job address. And they're simple things but a lot of people overlook them. So the very first thing we look at when we get an inquiry form back is the job address. We look it up on google. If it's on a main road, an intersection, in a school zone, near a suncourt stadium, I don't want to know about it. It's going to cost me a shitload in parking tickets. I'm going to get have to get parking permits. It's like traffic control. There's so much cost that goes with that that the client doesn't understand and doesn't want to pay for. So that would be a job straight away that we would go back to and say oh look, really sorry, at this point in time we can't help you.
Speaker 2:Project spend is a good one, like a lot of people, their project. So on average, someone's budget and what they want is 70% out, because people will choose to spend a figure based on how much money they have in the bank, how much money they can borrow or what their friends and family have told them they'll get for it. So they're never aligned. So quite often we have to go back to them and tell them like hey guys, we're really sorry but at this point in time we're unable to help you. Based on the data from our current projects, for the scope of works you've given us, your budget really needs to be between this and this. If that sounds like a budget you can possibly spend, then we're happy to go further. So we put all these hurdles in place to make sure by the time they get time to spend with me, it's quality time.
Speaker 2:But we find quite often by doing that step, a lot of clients will come back and go, oh, mate. Like, oh, thanks, no, other builders actually guided us on what we want to send a cost. We would really appreciate some time so you can educate us more, and the job might still not go through, but I'm happy to spend time with a client that has that respect and comes back. We can have a conversation, and we often find that most clients, once you educate them, go one or two ways. They're like oh, look, we, we might just hold off for now because we really want that and we, we just can't afford it at this point in time. Or they go oh look, no one's educated us.
Speaker 2:Now that you've educated us on on your process and how things work, we actually we've got a bit more. We're happy to spend more money because we know that we're going to get what we want. So there's a lot of hurdles in that before they get to that signing our preliminary agreement, because I'm not going to go and rush in and sign a preliminary agreement with someone that's going to waste my time. I think this is an important thing. In the industry, everyone says they have no time and yet they're quite happy to throw it away and waste time having meetings that are going nowhere. So I think you've got to have those hurdles in place to figure out who's worth spending time with and who's not. And yeah, by the time they make it through to the end and they sign our paperwork, we know they're going to be a quality client.
Speaker 1:Yeah, okay. So if they've come through your inquiry form, there might have been a bit of back and forth, um just via email, or would they have called you, or you don't get because they don't get your number very rare.
Speaker 2:The only way people call me mate is if they've been given my number. Like we don't have our number on anything, so they yeah, they have to try pretty hard yeah, okay, and then.
Speaker 1:So if you go okay, yeah, this is a job that you're interested in then will you go out and have a look at, have a meeting with them and then my wife in the office organized everything.
Speaker 2:so nine to ten, I don't speak to a client until that initial meeting. I rock up and and say, g'day, um, my wife may have given him a call somewhere in that process if she thinks that there's something that they haven't filled out right or that might need clarification. She'll ring him up and just say hey, just want to get clarification on this before you. So what we do through our whole process is tell the client whether it's an email or my wife talking to them we need this information so that when Duane comes to meet you, you can get the best, like we can add the best value to you in that hour. And we make it very clear it's only an hour. Like that's it. You're locked in, you get an hour, so don't waste it. So when you set, the thing is so many people are scared to set a standard because they think if they're too tough on the client, the client's going to run away.
Speaker 1:But reality is, the more strict you are, the more standards you set, the more the client respects you. There's more work out there than the industry can handle if, if you don't have enough work, it's not, uh, it's not because there's not enough work out there, it's because you're doing something wrong. It's like because you're not in, you're not marketing yourself well enough, or like people don't know you're around or whatever. But yeah, so it's like to fix that problem. I need to work on getting my name out there rather than Social media, mate, it's free.
Speaker 2:Just get out there. Like don't I tell everyone all the time, like don't be afraid what you put out there. Like so many people wait till the job's finished. They want to put all the fluffy photos and all the finished shit. But, like I talked about this yesterday, to me that sets a really false expectation, because when you're attracting clients because they love all the fluffy pillows and the nice finished projects, they haven't seen all the progress. So when they turn up to site and it's a shit fight or something doesn't go to plan or there's variation in their mind, they've just seen that perfect picture and they're like, why is all this happening? And then all of a sudden you get these difficult situations or the relationship sours.
Speaker 2:The best thing any business can do is just be real. Get on there, do your walkthroughs on site, talk to clients about why you're doing something, how you're doing it. Introduce your team members. You about why you're doing something, how you're doing it, introduce your team members. You have such an incredible opportunity to build a relationship with every client out there that's watching you before you even meet them and then, when you meet them, it's all quality. I don't waste time anymore. I don't have to sell my business to people I meet, I don't have to just talk about what we do so many people when I first meet them, they're like they all tell me oh, I feel like I already know you because I've already talked so much shit on social media. So it's, it's super valuable, mate, like just don't be afraid to get on there. Like I'm I still hate hearing my voice like you just got to get on there and do it yeah, I guess I know that uh, investing that time and will pay off eventually.
Speaker 1:But, being the instant gratification generation, it's hard to like commit to it when you know you start with no followers and like, no, no one's listening, so you don't see the fruit of it straight away. So that's what makes it kind of hard and challenging to go after that. But everyone's got to start somewhere, exactly. Yeah, when do you give jobs a start date or an opportunity to like book in?
Speaker 2:um, well, so we don't this surprise a lot of people, but we don't. We don't go to contract till we know we can start the job. So there's no way in the world I'm signing a contract on a house, taking deposit if I know that I can't start it for three months, six months, whatever it is. So all of our clients are educated through our PAC process that once everything's finalized, once everything's confirmed, you'll basically just sit in the queue until our team can manage your job. I'm not going to take on more jobs than my team can handle, because that's just going to lead to mistakes and we won't get the quality that you you deserve.
Speaker 2:Um, so like, I'm just educating my clients. So, like even with we talked about swimming, like with all this wet weather, we're already emailing all of our future clients saying hey look, all these weather events we're having is delaying our current projects, which means we're going to be delayed in our office. So that means your state date's going to be affected. We will update you as soon as we know so, but we've got multiple jobs that we should be starting in april this year that now, more than likely, probably won't start till september, october. But we're just being honest. We're telling the clients that, so we'll just send them an email once we know, once jobs are under. Current jobs are under control. We're finishing a few up. We'll just be emailing them and educating them. Hey guys, we're about to hand over job. In eight weeks time, your jobs are next in the queue.
Speaker 1:Um yeah have you ever had anyone like uh say that you know results in them getting pushed back too far and they're like, oh, I want to start sooner, but say you're already through the PAC process, so they've already paid for that, and they decide they want to go somewhere else so they can start sooner.
Speaker 2:Look, the situation we're in now, with all the wet weather we've had, is probably the worst we've ever been. We've never had to push so many jobs out so much. So again, we're just being honest with people and telling them but like, so, like we've got jobs backed up to start, like lots of jobs, like we've currently got just under $12 million worth of work under construction, we've got another $11 million worth of work to start and we've got another. I think as of last week there was nearly another $10 million worth of work in PAC process and we, just in the last two days, we've signed another four PAC processes. So we've said to all of those clients we've made it very, very clear that they want to do our process, they want us to do the jobs, and we've just been very, very clear that this is our current workload. This is what we already have locked in um. So if you would like and I just tell them, if you everything was signed, sealed, ready to go and your deposit was paid and you're ready to start your job oh sorry, if everything was costed, agreed on price, everything was ready to go we would not be starting your project until september 2026 or february 27, like we're telling them now. So we're setting that expectation with them. And I know how people are. They get excited. They want to pull things forward, move things around.
Speaker 2:But every meeting I have with my clients through the whole pack process I give them an update. So at the initial, like these jobs that signed up to a pack process this week, some of them might have their preliminary designs designs done in the next two to three months or two months. When we have that next meeting to present the preliminary design, I'll give them an update of where our current jobs are at and what I think their start date might be, because every job changes. Like All those jobs, it's a moving target every single day. So I'm just constantly telling them where it's at and then that way they can be organizing their finance, they can be organizing rentals. So communication is a key. You just got to constantly be updating people. Well, mitch, thanks very much for coming up today. I really take my hat off to you for reaching out, coming up, spending the day with me. It's been a pleasure. It's been really good having a conversation and asking questions and I hope you've learned stuff. Have you learned stuff today?
Speaker 2:Absolutely yeah, well, the difference will be made whether you implement it or not. So I know you've taken a lot to notes. Go back, reflect on them and any implement things, because that's what ultimately will create change. So, yeah, we'll see you next time you come up a couple of months time yeah, yeah, you appreciate it all.
Speaker 2:Good now, guys. Thanks for watching. I look forward to seeing you on the next one. Look, if you haven't bought your tickets yet, make sure you get on board for the level up experience. It is going to be the greatest event the construction industry has ever seen. Tickets are selling fast, so make sure you get on board. Friday, 30th of May, here in Brisbane. Global speakers Matt Reisinger, paula Baker-Lepore, plus a whole host of other great Aussie international speakers and seriously, my mission is to create a new building industry and when you come to this day this Level Up experience you are going to leave that day on fire believing in yourself, believing in your business and believing that we can create a new building industry. Look forward to seeing you there.
Speaker 1:Are you ready to build smarter, live better and enjoy life? Then head over to livelikebuildcom forward. Slash, elevate to get started.
Speaker 2:Everything discussed during the Level Up podcast with me, dwayne Pearce, is based solely on my own personal experiences and those experiences of my guests. The information, opinions and recommendations presented in this podcast are for general information only, and any reliance on the information provided in this podcast is done at your own risk. We recommend that you obtain your own professional advice in respect to the topics discussed during this podcast.