Staying financially fit in residential construction with Russ Stephens

Today on “The Building Code,” Zach and Charley discuss how builders can remain competitive in a turbulent construction environment with Russ Stephens, co-founder of the Association of Professional Builders. The Australia-based organization helps construction company leaders maximize their profitability through training and consulting to ultimately make the home-building process a world-class experience for consumer and contractor.

Listen to the full episode to hear Russ’ advice for builders looking to bolster their business amid the trials of a construction boom and the best ways to ensure profitability and ultimately, viability.

WHAT’S A MORE IMPORTANT INDICATOR OF A BUILDER’S FINANCIAL HEALTH: CASHFLOW OR PROFIT MARGIN?

“Cash is nice, but in all honesty, if you’re running a new home building company, if you look after the profit, the cash will look after itself. New home building companies that are well organized and that are running properly will always generate excess cash.”

WHY ISN’T A CONSTRUCTION BOOM ALWAYS A BOON FOR BUILDERS?

“Builders earn less in a boom than in a downturn, and that’s simply because they work on fixed-price contracts. Prices go up, delays increase their fixed costs, which increases the fixed-cost-to-revenue ratio, which again reduces their net profits. So it’s not good for building companies in boom times. They’re under a lot of pressure.”

LINKS AND MORE

Related content:

Click here to read more on Russ’ advice for keeping competitive in construction.

Missed our last episode? Check out the latest Building Code podcast with Frank Blake of The Home Depot.

Learn more about escalation clauses for builders and how to tackle the three biggest construction challenges of 2021.

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Russ Stephens

Russ Stephens | Association of Professional Builders

Zach Wojtowicz:

Hello, everybody. It’s The Building Code’s Zach Wojtowicz here.

Charley Burtwistle:

Charley Burtwistle, we are back in the studio.

Zach Wojtowicz:

It feels good.

Charley Burtwistle:

It does feel good. Been a minute.

Zach Wojtowicz:

We go back and forth on our schedule here, sometimes, there’s breaks in between. We’ve got a really unique guest joining us today, Charley. Russ Stephens from the Association of Professional Builders is going to be talking on it. They’re an outfit based out of Australia, working with builders, doing consulting and business coaching, among other things. Before we bring them on, we’ve got some things I want to talk about today, I think, a little bit. And before we jump on and really dive deep with Russ about what his business does for builders out there. So I know things going on right now in the news and the conversations that are happening, something that Russ’ Association of Professional Builders actually talked about, is this construction boom. So I’m excited to get into him with that. His thesis in this article is discussing the fact that just because you’re in boom times doesn’t mean you’re necessarily doing well profitability-wise, and there’s things to be aware of in the construction period or construction timeline. Even if things are heated up now, doesn’t mean they’re always going to be that way.

Charley Burtwistle:

Yeah, it’s funny, I actually have people… I have that conversation semi-frequently where people already do Buildertrend where we work with residential home builders or remodelers, and they’ll be like, “Well, what a great time to be in construction right now. Everything’s booming. Everyone wants to buy a house.” And what he pointed out in his article, while it is an opportunity, a lot of times construction boom does not necessarily equal financial boom. So the coolest thing about this specific article, and they have a whole blog that I would definitely encourage people to check out is, while it is tailored and specific to the construction industry, it’s also just really, really good advice for business practices in general, no matter what kind of segment your business serves or what you’re doing. It will give a lot of really, really good insight into forecasting out your cash flows and things that you can do from a legal standpoint, things you can do from a marketing standpoint, really the whole spectrum of running a successful business. Really, really interested to chat with Russ and learn more about what he’s doing over at the Association of Professional Builders.

Zach Wojtowicz:

Yeah, absolutely. There’s always great guests giving us great advice, so I’m excited to see someone who is working with multiple builders every single day and seeing the dynamics of the different challenges they’re facing. So let’s get Russ in here, Russ Stephens, thanks for joining us on “The Building Code.” Russ, tell us a little bit about your background and how you came to found the Association of Professional Builders.

Russ Stephens:

Yeah, thanks so much for having me really excited to be here. I founded the Association of Professional Builders with my daughter, Sky Stephens, back in 2014. And that was after we had already launched a marketing agency to generate leads or quality leads, I should say, for residential home builders. And it was through that process of generating leads that we realized that there were two camps, really. There were some builders that that was what they needed. They were doing really well. But there were other guys that were still struggling, and they were saying the leads are rubbish, paid advertising doesn’t work. And when we dug into it, we realized that the one thing these guys were missing was a documented sales process compared to the guys that were successful.

Russ Stephens:

So in 2014, we launched [inaudible 00:03:30] sales training, which was dedicated, really, to helping builders with their sales process. And that went phenomenally well because now we were generating quality leads and we were helping builders convert those leads into contracts, but there were still guys that were struggling, and it was at that point we realized that they needed help with the whole business, because margins were not strong enough. They weren’t organized enough, and they were time poor. And that is why we launched the Association of Professional Builders with a mission to generate more leads, more sales at higher margins, but while improving the client experience at the same time.

Charley Burtwistle:

That’s awesome. So hopefully a lot of builders out there listening to this are interested, and this can be a good sales pitch for you to get some more leads for the Association of Professional Builders. For those people listening, how would you describe the association and what is your tagline or your mission statement to go in and help these builders succeed?

Russ Stephens:

Our mission is to improve the construction industry for both builders and consumers. So we strongly believe that builders deserve to be earning a lot more money from building homes than they are currently earning, but we also believe that consumers deserve a far better experience than they’re currently getting. Now, those two things go hand in hand, because you cannot deliver a world-class service on tiny margins and without systems. So our mission is to systemize 50,000 residential building companies worldwide.

Zach Wojtowicz:

50,000?

Russ Stephens:

50,000.

Zach Wojtowicz:

That’s a large goal.

Russ Stephens:

That’s a big, hairy, audacious goal.

Zach Wojtowicz:

So where are you at now, if you don’t mind me asking? Who are your members?

Russ Stephens:

We’ve just crossed 500 members. So we are on the lower steps of the journey, but growing fast.

Charley Burtwistle:

I was going to say, for how new you are, that’s a pretty solid chunk of builders to be working with already. So you guys are headquartered in Australia, is that correct?

Russ Stephens:

That’s correct, yes. We started in Australia, and we’ve been operating across the U.S. and Canada for the last three or four years now, to the extent that we now have coaches in both Texas and Canada, and also we have membership support staff across the U.S. as well.

Zach Wojtowicz:

That’s really interesting. So when you are going out and courting builders, as far as the practices you preach and what you’re really trying to get them to buy into, what’s that process look like to get them into your network and onboarded? And what is that experience like for somebody who’s maybe interested in learning more about what you guys do?

Russ Stephens:

Yeah, that’s a great question because this is where we really walk the talk because what we find is there’s not a lot of builders Googling business coaching, or looking for help in their business, because they just don’t realize this level of support and assistance actually exists. So the strategy that we use is a content marketing strategy, which really came about 15 years ago when the internet went mainstream and the whole sales and marketing process was turned on its head. And at that point, or from that point, consumers became more and more informed. And now, whether it’s the Association of Professional Builders or Buildertrend or a custom home builder, clients are more informed and knowledgeable than they have ever been in the history of time. And that’s because they do their research online before ever speaking to a sales person.

Russ Stephens:

So the way to deal with that situation is to use content because you want to be the provider of information when the prospect is doing their research. And this is what we do at the Association of Professional Builders. We put a lot of information out there in the form of blog articles and videos, and this is what we teach builders to do as well, not to advertise their building company, but to put good quality information out into the marketplace so that they become the expert in their field.

Charley Burtwistle:

Yeah. I feel like just listening to you talk, Zach and I were both nodding our heads. I feel like there’s a lot of parallels in your guys’ sales pitch and mission to Buildertrend’s. It’s like there is a better way out there. The builders that we work with are really, really, really good at what they do, so sometimes they don’t realize that there’s better processes out there. You can adopt technology, you can adopt a business coaching and become more profitable. So I feel like there’s a ton of similarities in the kind of what you’re preaching and what we see in our day-to-day here at Buildertrend.

Russ Stephens:

Yeah, a hundred percent in some ways it’s never been easier to run a residential building company when you have tools like Buildertrend, which simply weren’t around 12 years ago. So it’s made it easier, but then again, it’s never been harder because competition has become even more intense. So we have to continually raise the bar and over-deliver to consumers to stay one step ahead, and you’ve got to have tools like Buildertrend in your toolbox in order to be able to do that.

Zach Wojtowicz:

Is there a business profile that you look for, someone who’s a good fit for your services? Are they already using software and they’re looking to enhance their usage of it? Or are you taking in builders who… They’re on pen and paper in the back of their truck, just trying to figure out how to job cost?

Russ Stephens:

Yeah, it’s interesting. We target builders between the ages of 25 and 55. Typically, below 25, they haven’t really started, but we do welcome builders that are just starting the building company. And we get a lot of guys come to us that, “I’m about to start. I’m going to join you later.” It’s “No, you need to start now before you actually start this company.” But the reason we limit… Or, we don’t limit, we don’t disqualify people for being too old, or I would’ve disqualified myself, but we don’t target builders over the age of 55. And the reason for that is these guys have just spent the last 30 years doing building or running their building company in a certain way, and they simply don’t believe that the margins we talk about are possible. And in the early days, this was a real challenge when we didn’t have the proof behind us, because we talk about 10% net margin.

Russ Stephens:

And we talk about 33% markup, which is a 25% gross margin on new homes, and even higher for remodeling jobs. And a lot of builders find that very hard to accept because, in their mind, the game’s hard. And it’s just a joke if you think you can charge those sorts of margins. But now that we have the proof because of not only our 500 members, but we work privately with over a hundred building companies across five countries, so we have all their data. We now have the proof that these margins are achievable, but they are linked to marketing. So you can’t just put your prices up. There is a process.

Russ Stephens:

But having said all that, we still end up speaking to builders over a certain age. Their mindset won’t allow them to believe this because to accept what we’re saying as being true would be to accept that they’ve just wasted 30 years of their life. And for some guys, they just can’t allow themselves to believe that. It’s a bit like “The Matrix” when Neo meets Morpheus and Morpheus says, “We never free our mind over a certain age. It’s too dangerous.” Yeah, that’s the same with the Association of Professional Builders. We never free a builder’s mind over the age of 55.

Charley Burtwistle:

That’s maybe one of the best analogies I’ve heard to date. That’s incredible, and I love the… Well, you’re speaking my language, first of all. Proving stuff with data is what I do day-to-day, right after this episode-

Zach Wojtowicz:

And we let you out of the closet.

Charley Burtwistle:

Yeah, I’m going back to my dark corner to do exactly that. And I just love your marketing strategy is positioning yourself as a thought leader. Actually, Zach and I were reading one of the blog articles you guys recently posted about how the booming construction industry right now doesn’t necessarily equate to booming profits. Is that something that a lot of people have misconceptions about? And is that another one of those things that you’re just trying to teach people more than what may appear obvious at the offset?

Russ Stephens:

Hundred percent, it’s a big myth in our industry, isn’t it? Because too many people focus on cashflow, and I’m constantly at odds with the saying that cash is king. At the Association of Professional Builders we say, “Cash is king, but it’s profit that wears the trousers in this industry.” It really is all about profit because it will bite you sooner or later. And I know you guys are well aware of the work in progress calculation, the hidden liability that sits in a new home builder’s account. That is one of the most dangerous figures. Dangerous – if you’re not aware of it – it will bite you. And this is what we see potentially unfolding in 2022. We’re already starting to see it unfold to a certain extent, simply because of the supply chain issues causing delays, causing cashflow problems. Already causing a lot of building companies to fall over, but it’s going to get a lot worse in 2022.

Russ Stephens:

But we do have this misconception that when things are busy, builders are doing well, and they’re earning lots of money. And the truth is, builders earn less in a boom than in a downturn, and that’s simply because they work on fixed-price contracts. Prices go up, delays increase their fixed costs, which increases the fixed-cost-to-revenue ratio, which again reduces their net profits. So it’s not good for building companies in boom times. They’re under a lot of pressure. They need a lot of systems, a lot of organization to make sure they stay on top of it.

Zach Wojtowicz:

That’s really great insight. So in your opinion, it’s better to focus in on the forecasted work in progress, see what is actually coming and staying ahead of it rather than focusing on the individual job-by-job cashflow that we hear all the time here at Buildertrend.

Russ Stephens:

Yeah, cash is nice, but in all honesty, if you’re running a new home building company, if you look after the profit, the cash will look after itself. New home building companies that are well organized and that are running properly, will always generate excess cash. Building new homes is cashflow positive, that is the bottom line. So if you’re running a new home building company and you are experiencing cashflow challenges, you have bigger problems under the surface. And that work in progress accounting adjustment is one figure that you really do need to be looking at.

Charley Burtwistle:

Yeah. And in the article I mentioned previously, I know you guys highlighted some things that builders can be doing to stay cautious, or I guess stay effective during a boom. So we’ll definitely link that in our show notes to make sure anybody that wants to can go out and read that and inform themselves. What would you say is probably the biggest hurdle in residential construction right now? Is it the supply chain and the high demand right now, or what have you guys got been seeing across your customers?

Russ Stephens:

Yeah, that is really interesting because we’re seeing two different problems at the moment in Australia to the U.S. Now, in Australia, with the lockdowns that have been happening, and New Zealand as well, Australia and New Zealand, the lockdowns have really hurt the builder’s ability to keep jobs moving, which is really hurting their cashflow. So cashflow is probably top of mind for the builders in Australia and New Zealand. However, in the U.S. we’re not having the same kind of feedback in relation to cashflow, but it is all about margins. Builders in the U.S. have been concerned about their margins, and that has risen over the last few months to be the No. 1 topic. But that’s not to say builders in Australia and New Zealand and not having problems with their margins, either. It’s just being masked. They’re more focused on the cash, but once the jobs start flowing again, I think they’re going to realize that their margins have been well and truly hammered. The underlying margins, I’m talking about.

Zach Wojtowicz:

What’s your advice on how to tackle these challenges, and what can a builder really do to help mitigate those net margins being reduced unexpectedly?

Russ Stephens:

There’s a few things that the builders need to be all across right now, and No. 1 is communication. They’ve got to be overcommunicating with both their clients, their subcontractors, and their suppliers because we have a tendency to sugarcoat things, to look for best-case scenarios to deal with the situation as it unfolds. But really, when it comes to clients, you’ve got to give them an honest appraisal of how you see the next three to six months panning out, so that they’re fully informed and they can make better decisions, and don’t sugar coat it. Give them the scenario as you see it, update them as that scenario materializes, and summarize it post-scenario as well. So you’ve really got to overcommunicate with the clients, but you’ve got to be communicating with suppliers and subcontractors as well, because especially suppliers, we’ve seen timelines have blown out with ordering. So you don’t want to be caught on the back foot and be ordering supplies on an eight-week call forward. When those call forwards have blown out to 13 or 20 weeks.

Russ Stephens:

So the communication is paramount, but the other thing that we’ve been highly recommending builders do is to assess their contracts before they start them because a lot of contracts have had delayed starts on them, and they’re no longer viable to proceed with. And again, we’re seeing two very different scenarios in the U.S. compared to Australia. In the U.S., the National Association of Home Builders have been fantastic in their support of builders in terms of cost escalations and the way they’ve stood behind builders. But it’s not so much the case in Australia where builders have been told to proceed regardless with fixed-price contracts that are no longer profitable, which is something that we don’t agree with at the Association of Professional Builders.

Russ Stephens:

It doesn’t happen in commercial, and it certainly doesn’t happen to the large volume builders, either. They’ve been ripping up contracts that are no longer profitable. And this is one thing that we’ve been really urging builders to do is to take independent, legal advice on their contracts before they start on them because, as the director of a building company, it’s irresponsible to embark on a project that’s going to lose you money and put your whole supply chain at risk of bad debt. And the other thing is, they’ve got to be monitoring their jobs all the way through the build. Now, typically, our best practice is to analyze every job every month in terms of the gross margin, and that can be simply done inside Buildertrend using the Estimating and the Budgeting features to look at the revised budget to build, and record that margin.

Russ Stephens:

Because when you record that margin month on month, you will spot a trend. However, the situation that we found ourselves in the last six months, those margins are moving faster than ever. So we’ve been recommending builders to do this exercise weekly. It’s a little bit of work, but it puts your margins top of mind. And it really does help you spot a situation where your gross margin is declining to a point that a job’s no longer going to become profitable. And what it does is, it encourages builders to protect their margins and charge adequately for the variations and for cost escalations that are taking place. And finally, it’s all about cashflow and looking ahead, so looking at your job schedule in a tool like Buildertrend and forecasting your cashflow based on those stage climbs, and being realistic about that. We’ve seen delays from financial institutions, and so far it’s paying out, build those delays into your forecast. Don’t look at a completion day as being the date the cash is coming in. If that money is coming in 14 or 21 days after the stage, that is what you put into your forecast. Be realistic.

Zach Wojtowicz:

Now, that was amazing. Thank you for explaining all that and what challenges are out there and ways to avoid it. My next question is, do you see the… The lumber futures have been going down. It seems like maybe the supply chain is starting to stabilize or normalize for certain things. Does the advice you just gave ring true, regardless of these waves of unprecedented times when it comes to supply chain?

Russ Stephens:

Yes. Well, what we saw, and the U.S. led the way on this back in August last year, we were seeing a lot of our members were talking about inserting allowances for lumber. And at that time they were actually giving the consumer two choices to accept an allowance for the lumber because they could kind of see what was coming, or to accept a 5% fixed increase. And all the clients at that time were opting for the allowance, because they didn’t believe lumber was going to increase by as much as 5%, which seems crazy now. But the builders in the U.S. were very proactive in this respect, and they continue to be. They’re protecting their downside by having allowances. So we don’t know what’s going to happen with the spot price of lumber because, yes, although the futures price has declined, we haven’t really seen that really roll out in the current supplies.

Charley Burtwistle:

Man, I feel like I, in the past 10 minutes you’ve been talking, have gotten infinitely smarter. I’m currently-

Zach Wojtowicz:

Do you just take on random people to learn from you? We just [crosstalk].

Charley Burtwistle:

Follow you around for a while. How do you typically… How long, when you sign a new customer, obviously everything that you’re talking about are things that you want to help them implement in their business and in their practice. How long do you typically work with them? Or I guess what’s the life cycle of you taking on a new client and implementing these changes that you’re talking about into their business?

Russ Stephens:

Yeah. A lot of builders, we have a initial plan when a builder joins the Association of Professional Builders, and we have levels, starting at level zero, which is just filling in your KPIs, which… That can be quite a challenge just to get the data recorded.

Charley Burtwistle:

Yeah, that’s where I’m at right now is, I’m level zero. So let’s level me up here.

Russ Stephens:

Better information leads to better decisions, but we go right up to level 10, but we’ve got builders still working with us privately that joined back in 2014. Some have even left for a break to go on their own and found themselves veering off course slightly, and they’ve come back into the fold. And they say to us, they just feel like they’re back at their home when they come back. So it is an ongoing process because, although we do have a very structured program, which adapts to where a particular building company is and where they want to go. But as building companies grow, and we’ve worked with building companies that came to us when they were doing $2 or $3 million, they’re now doing $50 or $60 million and looking to top the $100 million mark, but there’s always more to learn. And I guess the one thing that we’ve learned over the years is that, when a building company comes to us doing $60 million, they are typically less systemized than a building company doing $6 million, which just blows our mind.

Zach Wojtowicz:

Interesting. Why do you think that is?

Russ Stephens:

I think they have a very good offer and they’re very good at sales, typically, and that gets them to a certain level of success. And it tends to be in spite of themselves rather as a result of their systemization, and they do lack the backend systems that allow them to take their business to the next level.

Zach Wojtowicz:

Yeah, and how much of it was they grew so quick, and they never really needed to, or had the opportunity to put the systems in place? It just kept growing and growing.

Russ Stephens:

Yeah, one of the most dangerous things, I feel, in this industry, particularly for new home builders is growing fast, because they are cashflow positive that masks a whole multitude of problems. And it’s why we see allegations of Ponzi schemes being leveled at residential building companies these days.

Charley Burtwistle:

So do you have any specific examples or just crazy success stories of people that have come to you on the verge of going out of business, and you’re able to completely do a 180 and see huge growth?

Russ Stephens:

Yeah, we do, and it’s something that we’re really passionate about because, when a builder comes to us and… A lot of the time they don’t realize just how serious the situation is. They find themselves in a situation where they’ve done well, they just need a few more contracts to get a little bit more cashflow and then they’ll be okay. So they come to us with the intention, “I’ll stay for a year, and then I’ll be good.” And what we’re able to do is to unpack their building company in terms of the numbers, the KPIs, and show them exactly how serious the situation is. And, in a lot of cases, these building companies, although everything appeared very rosy on the outside, they’ve been seriously underwater. They might have had some money in the bank at one point, but really that was just masking the problems below.

Russ Stephens:

So we’ve been able to work with those guys because they’ve had cashflow, they’ve come to us early enough that we’ve been able to turn them around. And you’ll see it on the success stories that we have on our website, the amount of builders that openly say they were looking to leave the industry. It’s a very hard thing to do. It’s easy to get into building homes, but it’s very hard to close a company down. And we have a lot of guys openly talking about how they were looking to leave the industry, and now they’ve, in some cases, they’ve 10X’d their companies, and they’re working less and living the life that, really, what they signed up to live in the first place.

Zach Wojtowicz:

Well, this has all been fantastic Russ. For any of our listeners out there that want to learn more about your company, what’s the best place to go find you guys? Your website?

Russ Stephens:

A quick Google search of the Association of Professional Builders will take builders to our website where they can watch a demo, they can have a look on the inside what happens behind the scenes of the Association of Professional Builders. We’ve also launched a new book as well, called “Professional Builders Secrets,” so I would urge any builder that’s looking to grow their building company safely and securely to order that on Amazon, because that contains a lot of information these guys need to know about maxing sales and growing their margins.

Charley Burtwistle:

Yeah, any builder or any podcast host, hypothetically.

Zach Wojtowicz:

You’re going to get a couple sales from Charley.

Charley Burtwistle:

Yeah, for sure. And I would also just encourage anyone listening to check out your guys’ blog section. That was the one I referenced earlier about the booming construction industry. I spent a good five, 10 minutes surfing through that today. It’s your guys’ entire marketing strategy, right? The content marketing? You guys have some just fantastic content out there, so definitely something that I’ll be checking more of in the future, and I would encourage anyone that’s trying to level up their business to do the same.

Russ Stephens:

Fantastic. Thanks so much, Charley.

Zach Wojtowicz:

Thanks, Russ, for joining us on “The Building Code.”

Russ Stephens:

Thanks, Zach.

Zach Wojtowicz:

See you, Russ. Just had Russ Stephens from the Association of Professional Builders on. What’d you think?

Charley Burtwistle:

Oh, man? I thought it was super informative. I was pretty excited going into this one just because I’d read some of their blogs before, but I was really happy with how he was able to get into the weeds and offer up some free advice. The biggest thing that kind of took me by surprise was, and I guess this happens when you run in multiple countries, but all the differences we were talking about, “Okay, well here’s what is affecting the U.S. right now versus here’s what our Australia and New Zealand builders are seeing right now,” and the stark differences between the two. I thought that was really interesting and how him and his business are able to account for that and coach people through that no matter what the obstacle is, they’re there to improve the process and help builders become more profitable.

Zach Wojtowicz:

There’s a lot of elements in running a construction company that obviously have a lot of nuance to them, from the sales side, getting into a software, managing your staff, making sure your financials are tight. It’s difficult. So these businesses that are starting to become more and more common, being able to go to someone who’s an expert in the field and get additional advice to make sure you’re hitting your margins at a more profitable… Hitting your margins at a higher rate and really running your business in a better way. I thought that was really, really great to hear what is out there in the market for people to go explore and learn about these third parties that can help you get better as a construction company.

Charley Burtwistle:

Right. “The Better Way,” plug podcast that you also run. People should definitely go check that out if they want more insights into running their business specifically with Buildertrend. I also thought that it was really interesting when he talked about, a lot of times the biggest pain point in their sales process is, people don’t believe that margins can be that high. What a good problem to have, right? It’s like, “No, trust me, this is where we can get you to.” I thought that was really, really interesting that some people are just, they don’t go with the Association of Professional Builders because they don’t believe that they can be that successful.

Zach Wojtowicz:

Yeah, and he talks about the concept of fixed-fee contracts as well. And I think for a lot of our builders, that is the traditional way that you build a house, where you have just a set timeframe and amount that you’re charging progressing throughout the project. But you’re actually setting yourself up for potential issues where, what happens if the cost of materials raised so much that what you estimated it for is no longer the actual amount? Get really hard to keep track of that information, let alone going to your customer and telling them, “Hey, we’re going to have to charge you over.” It would be a really uncomfortable conversation. You can avoid that in your sales process, by putting those escalation clauses in your contracts, setting yourself up and in a position to where you’re not accidentally not getting your profitability that you should be hitting because of what your terms and conditions say for something that was estimated 10 months ago.

Charley Burtwistle:

Right, and I thought it was pretty cool, and a lot of it was a little over my head from a product standpoint, but I wanted to ask you about it. When he’s talking about how you can forecast out, looking at your Work in Progess report and things like that. When you were on onsite consulting, was that something that you were able to help people do in Buildertrend? I know he mentioned the budget tabs, but was some of the stuff he talking about kind of resonating with some of the stuff you see when you worked with our clients?

Zach Wojtowicz:

Yeah, certainly it’s something that clients would like to see in program as far as being able to forecast and really get into a margin as far as operations go. All the information’s there, like you said, you’re looking at your budget, you’re getting a real time look at what you estimated versus your new expected or revised costing, what has changed. And then from there, you’ll have to do some outside work to really get to the percentage of your margin, but you can certainly derive everything you need within the program to say, “I hit my numbers,” or “I’m way off.” And how did that impact the overall margin itself from a budget standpoint? There’s a lot of things in Buildertrend that people don’t fully see the potential in because they don’t know the full picture. In some of our other episodes, clients have talked about, “There’s a lot to learn,” or “I’m still trying to figure out how I could go further,” and you get to really sophisticated endpoints by getting deep into the budget.

Zach Wojtowicz:

For someone like Russ, that’s what he does every day. So for him, it’s like, that’s the primary concern. It makes a lot of sense that he’s an expert on how to get that information. But that’s the value in getting a third party who is an expert, and being able to get to those answers quicker rather than what a lot of companies do, which is fall into it, or over time they learn to be NAHB, “This is what I should be looking for, but it’s a lot of networking.” So it was really good to see or hear from Russ about his perspective in the construction industry. We, as always, here at “The Building Code,” have new exciting guests, people who are going to join us to talk about these certain things, so we’d love to have you back. Join us next time, I’m Zach Wojtowicz.

Charley Burtwistle:

I’m Charley Burtwistle. Make sure to go out, like, comment, subscribe anywhere podcasts are available. See ya.


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