The Hidden Reason Builders Lose Money on Jobs (Ep 292)

Do you mark up your materials and services appropriately, but still have no idea where the money is evaporating to? 🤔

Today, Max talks about POs: how, when, and why we use purchase orders and how they affect your bottom line! 📈

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

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📧 Email: paris@jobtread.com
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Transcript

SPEAKER_00 0:00

Guys and gals, you all want more profit in your building company. I'm going to talk to you about POs today, and if your eyes roll back in your head, right, that's why you're losing. On today's episode, I'm going to talk to you about why I use purchase orders, how I use purchase orders, and when I use purchase orders to increase my profitability. Check it out. How old are you going to be before you start to experience life like you want it? I want to tell you right now, whether you like it or not, there is a better way to do business. Hi everyone, welcome to the Business for Builders Podcast. My name's Max. I am your humble host, and uh it's great to have you on the show. Uh, thanks for tuning in if you're on uh podcast. Uh good afternoon, evening, or uh morning if you're on the YouTubes. Um, great to have you in the house. Um, you know, we're really uh working hard here at uh at Business for Builders to just try to give as much value as we can to make sure that you guys and gals are making the best decisions in your business to turn it into a highly profitable, high performance building companies. That's what we're about. So um, you know, I today I was just chatting with the team about you know the hook for this episode because it might be a little bit boring. As you can see behind me, we're gonna be chatting about purchase orders. So um if your eyes are rolling back into your head right now and you're like, I have no idea what that's even about, maybe this episode is for you because I think it's gonna be pretty enlightening. The guys and gals that are using POs in their business are good for you. Um and there's a whole bunch of reasons, which is why we're going to look at, you know, the why, the when, the how, the what, um, you know, talk about some of the benefits uh for that, and simply because, you know, when we talk about the builder failure rate, the general contractor failure rate, it's because, guys and gals, let's be honest, we we just don't ever get the instruction or the direction or the and therefore we don't get the understanding around, oh, we've got to know our numbers apparently, we've got to know our financials, why do we do that? And I think, you know, like for me, you know, I would be the probably the most motivated, lazy guy uh that you know, because if there is an easier, more better way of doing it that can save me time, uh, I would do that. So, you know, I'm really inspired to do the things that I want to do, um, not the things that other people tell me to do. So the challenge that I have as a presenter today is to talk to you about something which might just make you throw up in your mouth and really try and convert your thinking across or help you understand why we do what we do in the way of purchase orders. Now, um I think this kind of I don't know that I've ever done an episode just on POs or purchase orders. So this will be interesting to see what the feedback is like from you guys and gals. Um, but it really stems from, you know, a lot of the first exposure that I got when I was running carpenters all around, you know, uh the southeast corner of Queensland. And, you know, I was working for a lot of big corporate building companies where, you know, the site supervisors were given specific instructions that there are not to grant work to subtrades like me, Carpenter Guy, um, without um issuing a purchase order. And so then my reaction to anything when someone, when a supervisor said to me, Hey Max, I need you to do that, I'd be like, P.O., you know, give us a P.O. And so back in those days, in the good old days, um not a lot of computer-generated stuff getting around. Um, although into the 2000s it was definitely, it was becoming more uh online portal-ish, if you like. And so to get the data um, you know, was was pretty quick. You know, there was stuff happening that was really at the beginning of the evolution of technology that we know today. And so that's the I guess that's the context that I just stumbled into that and went, oh well, I don't have a choice. If I if I do a job and I don't have a purchase order, I don't get paid. That's the way that corporate operation runs. Now, do we want to do this? Is it is the why around why we do POs because we want to be hard asses and give guys grief? No, it's not. And so this is why I think we need to. I'll give you an example too before I get cracking. Um just so you know, I think this job that we we did, this big second story edition, if you're not watching us on on socials, um, you can get across to the Smith Sons General Contractors or Smith and Sons Coldstream General Contractors on Facebook, and uh you can sort of see what I'm doing with Jed, what my team do in the way of video production. And on that job, it's a two-story edition, and then the main floor in the basement were a full, you know, basically a full gut reno. And so what that job has produced is over 400 POs, um, and I think we're coming up to our nine-month mark here in about two weeks. So we've been on this project for two uh for nine months as of June, June the 8th or something, and so you know, um, I've been in control of issuing the majority of the big ticket items on POs, but what Jed's been doing is he's been generating POs even as much as for a $10 dump bin, uh uh a dump fee at the local landfill. Um, and so he would go in there, take a copy of that receipt, upload it to the purchase order, and then I would then go in there and create a bill and reconcile that, etc. So I'm gonna try and break this thing down in the next 20 minutes. Um, head nod for my videographer, he likes 20-minute episodes, but we'll see. Um, and just try and give you an introduction to um everything that is part of a PO. So um let's just start off. So, why PO uh why purchase orders matter? Purchase orders create clarity between you, the builder, your vendors, okay, your suppliers, and your subcontractors. And you know, I think like even for and this oh we'll get into this, but you know, even for just as much as I've had my local hardware supplier give materials out to other general contractors for why it ended up on our account, I don't know. But when the PO is Paul or Scott or it's an address, I know instantly we did not make that purchase because only Jed and myself can purchase from that account, and when we do, we have an understanding that it will be in the vicinity of a four to six digit, or so in some cases now, where we're really four, yeah, four to six digit purchase order number um that includes a job number and then the document number. And so anytime I get um, you know, something we only have one real commercial account, and so whenever they send us the the the purchase invoice on email and I look at the PO and it's it's anything but that four to six digit number, then I know that it's not us. Okay, so that's one reason why you want to do it, okay? To keep can keep control to make sure that spending is by you and your team and not by some other random that happens to put shit on my account, like happened to me. Right, so and the other thing is okay, so why else do we do it? When we're talking about communication with our vendors, a lot of the time I'll go a bid request document inside and I use JobTread, uh, bid request document, and then we move that to an approved bid request into a purchase order, an approved purchase order, and then when I get their invoice, I then convert that from a PO to a bill. Now, inside of the bid request, guys and gals, is where I like to pile as much data as it relates to their scope and the specifications that I'm requesting. And then what I find is when I go from a bid request to a purchase order, that information crystallizes. In other words, I put together what I think is relevant for their scope of work on the bid request document. They then produce me a quote, I put it beside my bid request, and I when I when I convert that bid request, or before I convert that bid request to a purchase order, I'll gather their data and actually install it inside of that bid request and then approve that bid request. Okay, and then all of that data that's in the bid request will actually convert to a PO. Now, I know what you're thinking because I am one of you. Okay, you're like Max, I have not got all day to do that shit. Well, look, I think there's two things got to happen. You've got to do a less amount of work to give yourself time to do the office work, or you've got to go and do what you do and get someone else to do it and bring them in and train them. So, you know, I it's not an option. POs are not an option, they're a must, a must-have. They're not optional, right? And so you don't get to run a successful building company without them. That's what I would say. And so, you know, you've got to figure out a way because I'm now telling you that any reputable building company that wants to identify why, you know, or how their business is doing, um, it will start from that bid request PO, you know, and convert to a bill kind of program. So, um, and obviously that communication level certainly does uh crystallize and there's less confusion. Now, when I send a bid request, I can download all kinds, I can add to that bid request pictures, photos, plans, everything that I want, a specification list that I might have created with the client or a selection sheet. And so there's all kinds of data that I can pile into that. Now, if you try and do that with just an email because you don't have a software that you're using, it's you're gonna limit your ability to develop the business. Okay. So flows straight on to it reduces the confusion around scope, price, and expectations. See, I even ask them a couple of things. You know, one is what's your lead time? How long does it take me to get that product or service? And then how long does installation or delivery take? You know, like when can I expect that to be fulfilled and completed, right? PO systems create accountability and financial control. So, like I said at the start, I wouldn't do any work for the builders that I was working for as a subcontract carpenter without a PO because I knew if I did the work and didn't have a purchase order, I wouldn't get paid. Okay, so anytime there is uh confusion, it's because of lack of detail, lack of information. Because there's gray area, there's misunderstanding. So I spend a lot of time putting the data in now. Again, having a business partner who I'm splitting checks with, which some of you might not agree with, and I understand why. Um right now, this is what we've done is created a human resource infrastructure that allows us to maintain very good books, but also a good standard of installation or good standard of product delivery on the building site because we've got two. Now currently, I've uh and any of my subcontractors that are watching this, um, I've been out for the last I think two weeks ago we started a new project, and so I've been in control of overseeing all the demolition and and the framing, and and uh I think we've got we've got plumbers just finished yesterday, sparkies are in there yesterday, started yesterday, they'll be done tomorrow, and then I've got drywallers or gyprockers starting in about five days from now, and I've got the painter scheduled for around about the 21st of next month, and so you know, and I've got to get a PO issued today for the doors. Now, the funny thing is to give you a real life example, I've I've kind of uh not procrastinated, but I've delayed the issuance of a purchase order or bid request for the doors because we've just been flipping and flopping with the client because there was a swinging door, and now there's a uh pocket door or a cavity sliding door, and there's you know, so there's and then there was a couple of closets which all of a sudden we're going to French doors now. So, you know, there's all of these data, and so I was marking up a plan inside a job tread that I'm gonna ship off to my door guy. So not only will he have a schedule of fixtures and finishes as it relates to the door swings and the door types and all the specifications, but he'll also have the plans that go with it. And I bundle all of that up inside of a bid request. When I approve that bid request, it will go to a purchase order. Okay, so we're talking about uh controlling all of those financials, right? Um, so the when, okay, number two up here, and uh yeah, for the sake of time, I've already written it on there. So I guess at the beginning of the episode, if you look at those bits of beats bits and pieces up here, you can soon figure out whether you want to entertain this for the next 20 or 30 minutes. Um, number two, the when are the purchase orders? PO should be issued before labor or materials are supplied. So anytime, and I tell you what, what we do as builders, we there's a lot of just in in time ordering. So if I send um, if I send my bid request off to Travis today for doors, odds on is he'll get that quoted, uh, yeah, probably by this time tomorrow I'll have it back in my inbox. And I will automatically, you know, I think determine, you know, who I'm gonna use for my door supplier. If it is Travis, then we go with him. And we can basically issue that as a trigger for him to know that right, Max has given me the green light. So the worst thing that happens is, um, and now you've got to be careful too. Here's where I got caught last time for the big job is I issued the PO, but I didn't have purchase orders, ironically. It was, it was, I think, oh no, I didn't have the approval marked in the vendors for them to be visible on their portal. And so what I did is I issued my last door order to my old mate, and uh, and then he comes back and I rang him three weeks later. I said, How's that door order going? He's like, Did you go with somebody else? And I'm like, No, I sent it to you. Ha! So we talk about communication. So I take full responsibility for that cock up. He really expedited well, and he we only probably lost one or two weeks, and at the end of the day, it's probably not cost us anything. Lucky, we got a little bit of insulation from other things going on. Um, and so we avoided drama, but that's to me was a learning curve. I'm like, I just assumed I know what it was, because I went straight to approved. I didn't send him an approval, and so when I skipped over that, he didn't get the notification because I didn't have a notification set up for that in his system, ironically enough. So if you want to know how to not mess up shit in job tread, talk to me because I'll probably mess most of it up. Um, so they should, so that's the trigger. So that's the purpose of it. It gets issued before any kind of agreement is established. And then, you know, like I do with sales, if if someone comes into our system like last week, was it this week, and they wanted a garage built 60 by 30 foot, and uh, and I sent her off a welcome email, and I haven't got a response from that. So, what I've got to do is I've got to follow up a text because if I assume that she got that email, it's probably in a junk file, and you know, maybe she's not tech savvy and so she didn't get it. So I've got to follow that up and talk to her and say, hey, it's Max from Smith and Zone. Just want to let you know, I sent you a welcome email from our portal, and did you get that? And she'll be like, No, I didn't. I'm like, okay, there we go. So digitally, I let myself down. So the follow-up is always important. So when I send that off to my guy, I always want to flip flip a text and go, mate, I've just shot that to you. Let me know, can you confirm for me that the 15th of June or whatever the date is is still a go. Okay, so it's just a good way. So open lines of communication. So I'll tell you right now, um, you know what, I think we've made the decision. I talked to Jed the other day, Dom, and so um we've got episode 300 coming up. It's really, I mean, it's it's not, it's only a few weeks away. And so what we're gonna do, I think, is we're going to uh I'm gonna get Jed in to have a chat because I've been talking about him all the time, and so I'm like, mate, I've got to get you on the podcast, and so he'll uh he'll rock it in there. So look out for that one. That'll be episode number 300. Um, and so you know, it it's it's he's very busy doing what he's doing, and he'll tell you, I think, um, and I might have to tune him up a little bit, but no, I think he'll be very honest in sharing the fact that you know what we've got is we've got such diverse roles in the company, but for me to be able to go out there and start a you know small $300,000 reno and oversee that until in such time as I can get my guys, let's say Jed and our offsider there, our number one carpenter, until I can get him back on this job, um, you know, I've got to hold the reins to that. And so that was a calculated decision that we made, okay, because of my skill set, my ability. Now, I was out of the office all day yesterday on site, okay, doing quality control, the liaison with Sparkies and whatnot, and uh it cost me a day. So now I've got 40 unread emails in my um in my email. And so that is the downside, I suppose, when you are the number one and the only guy. So you'll be sitting there on your head going, Yeah, Max, I've got 400 unopened emails. So, guys, that's a red flag, essentially, because it highlights to me that I take one day out of the office and go and do what I love to do, which is go and get materials and talk to guys on job sites and homeowners and whatnot. Um, and then I come back to the office and all of a sudden there's an overwhelm of stuff to be done when I get back here, like purchase orders for doors, etc. Okay, so they become the approved instruction to proceed. We talked about that. Uh, good timing prevents disputes and surprises and surprise invoices later. So I've had to tell, so now here's a little little uh you know, uh a bit of clarity. Whenever I get so I've issued a framing and a demolition um purchase order to a carpenter to do that job. I'm just overseeing myself at the moment. There's one more day of just tidy ups. So, and and that's going to be very separate because um I want to be able to establish this is how much labor we spent on on demo, this is how much labor we spent on framing, and this is how much we spent on the final phase of play one day right before. But it'll be a separate purchase order, okay, because there's a whole bunch of uh like drywall reinstatement that we've got to do. So it's kind of a framing thing, but it's not exactly. So for me, I like to go micro on POs, right? Um, and that way my carpenters know exactly. I know, because we're singing from the same hymn book, we're looking at the same document, so there is a clear understanding. If they don't read the documentation, which I've had, then I'll say, mate, it was on your PO. Now he'll come back to me and he might say, Max, you've just asked me to do something, but it's not on my PO. So at that point, odds on is I've got to now write him another one. Okay, so this is why it saves the dispute. Guys, money loves speed. So you want to be able to ascertain who has got their story straight and who does not, and is there more money got to come out of my bank account to facilitate that scope? Or does that guy need to go and work a sad day because it was included in his scope? Okay, the this is why when we talk about human resource management, we talk about standard operating procedures or SOPs, not because we love to write out documents, but because what it does is if they do something that's not in agreement with the way you want it done, and then over here I can look at an SOP and say, Well, you made the decision to do this, to jump the fence, instead of go through the gate, like the SOP says, there's accountability. And both ways, you know, and so I want to make sure that I'm not arguing um, you know, unnecessarily with my subtrades and my suppliers. It has to be nailed down. Okay, let's get after it. Uh, the when. Uh, no, no, we just talked about the when. The how. Simple is better. Okay. Now, I'm telling you right now, guys, please don't go, Max, I'm gonna save, you know, 200 bucks a month and I'm gonna go and do it on spreadsheets, right? You will drive yourself nutty and you won't be able to keep up with it if it's moving at high pace and it doesn't sync with your, say, QuickBooks Online or whatever you're using for reporting. So, a lot of what I do, so when a PO gets um approved, and then I get an invoice, and then I take that invoice and I I I um I move that PO to a bill and I make the payment on the invoice, and then I uh note or record the payment on the bill, that automatically syncs with my QuickBooks Online, which my accountant has got eyes on. So this is all about speed and accuracy. Okay, so very rarely do I talk on the phone with my accountant. It's all done on very brisk emails, and because we are running a digital program where we've got bank accounts, you know, that are where my my accountant can get bank statements um through QuickBooks Online and all of my payments, other than running the business. So any cost of goods sold, paying suppliers, which is the majority of what we do, right? It's probably 80% of what we do. Um, and and so with all of that happening, she can see exactly what's going on, right? Um, so simple as better, clear scope, clear price, clear expectations. Think about it, guys. Think about where you've got kicked in the the backside before by subtrades or by suppliers, and then think about how a purchase order might have helped you avert that catastrophe or avoid that catastrophe, okay? So, and the thing is, once for you and I, um, you know, purchase orders was never something we were talked about at trade college, right? That we didn't get taught much about finances and business and business development, etc., and management at trade because we're there to learn how to be carpenters or what have you. And so, you know, for us to be doing this, it's very analog y feeling. It's like, oh, I've got to think about now how do I do that purchase order, right? Whereas I've got Jed now and and where he goes out, he he creates the purchase order in a draft format. He'll then go and make the purchase, he'll take a photo of the receipt and upload it to that purchase order. So then I go in the back end and I will pick up all of that data, and if he's paid for it on credit card, I can actually reconcile that payment straight away. So it'll be Jed does the draft, I approve the PO. The PO now um goes to a bill because I've got the invoice, the receipts on the on the portal. I then reconcile that payment against that bill, my accountant gets it instantly, she's got access to that on QuickBooks Online. Guys, you've got to get with the program, and this will automatically push you in to um you know developing a proper business, which is great, which is what you want. Okay. Uh PO's uh should connect directly to estimating a project budgets, right? So everything I Everything that I do now, Jed might create the draft, which is enough to get him that four to six digit PO. Then when I get the invoice or you know, the receipt of payment or whatever, I'm the one that'll go in there and pull from the budget. Um, in most cases, the budget line items have got his uh an allocation for the the goods that he's purchased, okay? In some cases, they're overages, and so I've got to create new line items in the budget to pull from, okay? Um, but they will all automatically, um, it'll always be in the budget. There's never a cost of goods sold that goes without materials or labor without having a PO. That means I've had to insert something into the budget if it's not been included, or I've got to allocate that expenditure to a line item in the budget. Okay. Uh consistency in process matters more than complexity. I'm not saying to you the more complex it is, the better it is, because it's not. If we talk about, and we might talk about, I might have to go and have a bit of a think about what about what are the things that I've gotten Jed to do that are outside his typical scope that he might be used to doing. Okay, and purchase orders is definitely one of those. But if I can make it simple enough, it's like, and I I had to do this, I had to train Jed. I'm like, mate, this is what we do. Get your phone out, this is what we go. We go jobs, pick the job, go to add a document, pick out, you know, um a supplier uh purchase order, hit that, it automatically creates a document, and then he's got the number there. And then I said, now you go to slide down and you've got to hit an upload there, take a picture of the receipt, bang, it goes right in side by side. So I had to get him up to speed. Now, not complex, he just had to do it enough times that he he he was very fluent in it, and I'm not asking too much of him, and uh it works really well. So, consistency is is is more important, consistency in the process is more important than having a complex because complexity is going to make it more difficult for you to execute. Okay, point number four: the power of backcosting. So here's here's probably the the real nuts and bolts around what the benefits are, right? And we'll get onto some long-term benefits, but the power of backcosting, because you can't back cost without purchase orders, right? It's just it's what you'll do is you'll wait to the end of the financial year and you look at all your cost of goods sold, you look at all of your uh overheads, fixed expenses, etc., you'll look at your revenue and your income, and then you count and might say to you, well, you've got a you know, a net profit of, you know, a percentage of your revenue or none, or you're going backwards. I don't know what the story is. But unless you are cost engineering, okay, and everything right from the beginning of this little little chat we're having, right from the beginning, it's about cost control. Okay, it's about engineering the cost around. Now, fortunately or unfortunately, I've had to issue POs that have been beyond the budget. So for the if the plumber quote was you know 20 grand and I or 20 or 30 grand and I allowed 20, then when I issue off the back of that line item, it's going to show a deficit of 10 grand. Okay, but at least, you know, I think a lot of guys go, Max, well, I could do that in my head, mate. I'm telling you, the paperwork that I've got on a $300,000 reno two weeks into it is already, you know, an inch and a half or about 40 mil thick. Okay, and that was that's not even the selections binder. So, you know, you're not, you're kidding yourself if you think, oh, I can get this sorted out in my head. You know, you will for a short amount of time when your business is small, but as you get to you get some sales velocity and then you have more people coming in. I'm telling you that it's exponential the amount of capacity that you're going to need to manage a business that's three times the size of what it currently is. And then what you'll find is you'll dive into having you'll go, I need systems. See, guys, before you go out and start building a you know, five, ten million dollar business, think about how you can run a one million dollar business like like clinically, like execute perfectly. So, what we're talking about is technique first, and then we can add speed or sales velocity or higher revenue targets to that which you've laid as far as a really solid foundation. Um, so purchase orders create valuable cost tracking data, comparing estimated versus actuals, sharpens future pricing accuracy. So, whenever I make a blue, and it's really all me, I mean that job over there was all my estimating. I did obviously collaborate with Jet around certain numbers, but this one really for this $300,000 Renault was all me. So I'm on it like a fat cop on a donut, really looking at you know cost engineering and controlling the cost. Um, so comparing what I estimated versus what I'm actually spending, that to me is a full-time job, right? And of course, software is what makes it a little bit easier for me to do that. Um, and then of course it helps me going forward in the fact that I've got the ability to fall back on those jobs and look at where I did well and where I didn't do so well and make sure that I don't trip up again or make sure that I continue to execute efficiently and productive uh uh profitably. Okay, back costing exposes strengths, weaknesses, and profit leaks. Guys, you know, you've got a system, my system will tell me what my net profit is on a rolling basis. Oh, you're at 7.62% net profit. You know, but that won't work if you've just got a system sitting there with no POs. It'll say, oh, you're running at 100% net profit. Guys, if you're going to use a system now, I think it's lack of education. And we don't take the time to educate ourselves until it's too late. That's usually how it happens. Okay, so don't be that guy. You know, discipline yourself. You know, I've I'm the father of, with my wife, obviously, um, six kids. And so there's a point where that mum and I, you know, me and mum, the parents, we have to assert discipline on our kids. Why? Because they haven't got the established understanding of why it is good to be disciplined in oneself. Now, once you get kids that hit 18 years of age, um, you know, they're in a position where they should now become more self-disciplined. Now, if they're living under my roof, they do cop a bit of dad occasionally, right? Very cautiously I apply that because they could go tell me to kick rocks and I'm I'm cool with that. But at the end of the day, what we've got to be as builders, we don't need Max to beat us up and say we should do purchase orders. But here I am helping you um get bring a bit of awareness and a layer of education. Then the next thing that I do with all my EBA coaching clients is accountability. Come on, mate, you know, we can't do back costing because you're not generating POs. Oh Max, I'm too busy. Okay, do less work. Oh Max, but I want to make more money, mate. You're driving off a cliff. See, like this is what happened. This is why when you've got someone like me who is unemotional about your business, it's easy for me to just talk about the numbers and talk about your infrastructure and look at the big gaps in your business. It's when we're talking that complimentary coaching session, which you can jump online and do, elitebusinessadvisory.com. Okay, big yellow button, book a consultation, go look at my calendar, figure out a spot, make sure you've got the time zone. Don't go booking a meeting at 2 a.m. your time because you're not going to be able to get there, I don't think. Okay, you you we need someone to hold us accountable. You know, like in a very, you know, sort of side bar type approach, my wife and I have been married since 1995. And so for me as a as a male, like I there's accountability mechanisms and there's freedom in accountability. See, and this is why, even for me in the 90s or 2000s, if you said to me back then, because coaching wasn't a big deal as much as what it is today, oh, you need a coach, I'd be like, you you need to just go and you know suck eggs and go away, right? But now I'm older and washed up, and I'm talking to you as a 23, 28, 32, 38-year-old, 45-year-old, right, 53-year-old. And I'm saying to you, this is the power of it. Because having someone who is always calling you out or giving you encouragement and pats on the back is good for your emotions. Okay, because you know that if I don't have Max in my corner, I'm probably never gonna do that. And really, guys, I've only got limited room. I'm running a building company just like you guys. I've got six kids, and you know, like I'm not one of these coaching guys that wants to put on 50 clients. I don't do that. So there is limited spaces, right? So, you know, and we've got different levels. You know, you've got the you can go in there and do the contractor academy for 65 American a month. You can go and you can do 90 days with me, right? On coaching on demand whenever you need it over the next 90 days, and then you can go full-blown one-on-one, which we get tremendous results with because of the consistency. I'll keep moving. Right, long-term business benefits. I'll probably just shared a couple of those. Uh, better better estimating confidence. I get more confident, even me. I get more confident when I look at the failures from our big job, you know, our seven-figured two-story, second-story edition, and then I take that into the little $300,000 reno, and I'm way more micro and way more strategic. I've got better understanding of how do I do a bid request walkthrough document. Like, guys, if you're not meeting some of your sub trades on site, I must have done somewhere between eight and 12 meetings, whether it was just with me and Jed talking about demo and framing, or whether it was with all the trades, multiple trades, right? And so it's all about what didn't I do that I should have done that would have produced a better result. And then we about face and we take off to the next job and we make sure we get it right. And we could talk about that in sales as well, folks. Um, right, better estimate. So you are more confident as estimator. I know when I walk in to a certain size job, I know that it's going to cost about this much. And that helps me put a more accurate estimated price range together, even though we do bounce that off artificial intelligence, right? Because we've got really good prompts, don't we, guys and gals? Okay, very accurate, very relative to the to the project that we're talking about. Um, I've got actual historical data, which could be better than artificial intelligence, you know. Um, right, uh better supplier and subcontractor management. I've talked to a few of my uh EBA clients about this. Part of, you know, there was two, there were two schools of thought. I do a subcontractor agreement, whether we're talking about subs now. I do a you could do an annual or a yearly subcontractor agreement, which I just found was just probably a little bit ineffective, and I never kept track of it and there was not much good at that. So what I do now, every time I issue a purchase order, it has all of the uh, you know, I'd say similar terms and conditions as far as the subcontractor agreement, the annual one, it has them all built in. Because once I build that template, folks, I can just issue that contract. Now, a stipulation on that subcontractor, it says whether or not this this agreement is signed down the bottom. So if my subs just don't sign it, the minute they start the work, they acknowledge the fact that there's an agreement in place. Done. My system has got automatic triggers on uh certificate of insurance and all their WCB stuff, all their occupational health and safety. Okay, it will send me a red flag. This guy's insurance is due up in a month's time, right? And it's a good prompt because as I'm adding a new vendor in or a specifically subcontractor in, I'm like, mate, I need your I need your certificate of insurance and I need your workers' comp. Okay. Better financial visibility and project control. So we talked about, you know, we've already discussed that, right? So financial visibility across multiple sectors, back costing as it relates to the project to help us with estimating going forward, and the communication with my accountant to keep my accountancy cost down because I've got a very digital approach as opposed to a box full of you know paper, which means the accountant's got to go through every one of those, look at bank statements, reconcile that payment on that credit card. You know, I've got two, Jed and I've got a credit card each. Um, and so you know, I've got to be, I'm very vigilant when I'm writing into the notes, you know, my credit card, you know, my bank, and you know, um the last four digits. So it's very obvious when that notation syncs with QuickBooks Online that my accountant understands exactly what happened with that transaction. Uh, better scalability through systemization. So here's the deal. Let's finish off on this, mate. When you've got something working very fluently that's very low drag, okay, that's high velocity, that's very low heat, you've got to ask yourself the question now's a good time, we could probably go to the next level. See, it's not a fluke that guys build big businesses and gals big build big big build big businesses, right? It's not a fluke. It's a conscious, disciplined attitude towards improvement. Like consistent, continuous improvement, getting better, troubleshooting, problem solving, being honest with oneself about what we're good at and what we're not good at instead of blaming third parties. Let's not get on to that. Right. Purchase orders don't just organize your projects, they organize your profitability. So we start out, we talk about EBA's motto is more profit, better lifestyle, guys and gals. Right, if more profit is first base, how are we doing that? How are you doing that? Because you can forget about any kind of lifestyle. Just ask the 20 builders that you know, mate, how's things with you, bro? And you know, odds on is most of the guys will have some pretty negative stories about profitability. And the guys that say they're profitable probably are just kicking the can down the road because they don't understand how to put the projects together as far as uh financially. They don't get it right in the sales process, and therefore they're taking good money from the next project to finance the old money from the previous project. So organize yourself and and and and and consider how you're gonna use purchase orders in your business. Okay, if you've got any questions, hit me up, max at elitebusinessadvisory.com, or probably even better, book your 30-minute complimentary, right? I'm throwing it out there, guys. I'm I'm not gonna, you're gonna, we're gonna sit in that meeting and you're gonna know this is why Max has a coaching business as well as a general contracting company. I'm telling you, we'll get out the back of the third 30 minutes. I will load you up with everything I got as it relates specifically to your business, not general, but your business. And then you'll just go, I will tell you right now the mountain of shit that you're gonna have to work through. I am telling you, A, because you're so busy, you're not gonna get through it. And B, you're not gonna believe in yourself too enough to get through it. That's why you need someone in your corner that's that's given you the direction, the roadmap, the encouragement, maybe even some discipline, you know, a bit of a kick in the bum. Hey mate, step it up, all this sort of stuff. Um only had a call from one of my clients yesterday. He's got an issue with uh a job site with a neighbor, and he he he sort of rang me because he's sort of going, well, how do we figure out how do we um address this? Because I've tried being nice. And so I was able to sit on the phone with him for 30 odd minutes and just chat with him about what our options getting good context on the problem. So, guys, there's definitely more to it. Okay, when you come on as a client, you get access, you can talk to me on WhatsApp, doesn't matter where you are in the world, just don't wake me up at 2 a.m. Um, you're you can email me anytime, um, always get back to you every time we have a meeting, it's all done on on uh an AI note taker. So I send you the notes at the end of the meeting. Guys, success is no accident, okay? You have to be disciplined in your approach and you have to be realistic but optimistic at the same time to make it. Hope that helps. Go busic, build a kick ass business, and I will see you on the next episode. Cheers, big ears.